HomeMy WebLinkAbout2364 ORDINANCE NO. 2364
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, APPROVING DEVELOPMENT AGREEMENT NO. DA 19-
01, WITH A CATEGORICAL EXEMPTION UNDER THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT ("CEQA"), PERTAINING TO THE
CONVERSION OF 5,849 SQUARE FEET OF AN EXISTING 38,761
SQUARE FOOT, SELF-STORAGE BUILDING INTO A MULTITENANT
FOOD HALL WITH A 1,326 SQUARE FOOT INCIDENTAL OUTDOOR
DINING AND SEATING AREA AT 33-35 W. HUNTINGTON DRIVE
WHEREAS, CITY is authorized to enter into binding development agreements with
persons having legal or equitable interests in real property for the development of such
property, pursuant to Section 65864 et seq. of the Government Code; and
WHEREAS, OWNER is in the process of purchasing the property at 33-35 W.
Huntington Drive (the "Property"), and has requested CITY to enter into Development
Agreement No. DA-19 (the "Agreement"), attached to this Ordinance as Exhibit "A", and
proceedings have been taken in accordance with the rules and regulations of CITY to
allow for the redevelopment of the Property with a mixed use project consisting of self-
storage uses and a multitenant food hall space; and
WHEREAS, by electing to enter into this Agreement, CITY shall bind future City
Councils of CITY by the obligations specified herein and limit the future exercise of certain
governmental and proprietary powers of CITY; and
WHEREAS, the terms and conditions of this Agreement have undergone extensive
review by CITY and the City Council and have been found to be fair, just and reasonable;
and
WHEREAS, the best interests of the citizens of the CITY and the public health,
safety and welfare will be served by entering into this Agreement; and
1
WHEREAS, all of the procedures of the California Environmental Quality Act have
been met with respect to the Project and the Agreement and City staff has determined
that this Project and Agreement and its implementing actions are exempt from
environmental review pursuant to the California Environmental Quality Act (Pub.
Resources Code, § 21000 et seq.) and State CEQA Guidelines (Cal. Code Regs., tit. 14,
§ 15000 et seq.) section 15303 (Conversion of Small Structures). This exemption applies
to conversion of commercial spaces not exceeding 10,000 square feet in floor area from
one use to another on sites zoned for such use if not involving the use of significant
amounts of hazardous substances where all necessary public services and facilities are
available and the surrounding area is not environmentally sensitive.
WHEREAS, this Agreement and the Project are consistent with the CITY's General
Plan and any Specific Plan applicable thereto; and
WHEREAS, all actions taken and approvals given by CITY have been duly taken
or approved in accordance with all applicable legal requirements for notice, public
hearings, findings, votes, and other procedural matters; and
WHEREAS, development of the Property in accordance with this Agreement will
provide substantial benefits to CITY and will further important policies and goals of CITY;
and
WHEREAS, this Agreement will eliminate uncertainty in planning and provide for
the orderly development of the Property, ensure progressive installation of necessary
improvements, provide for public services appropriate to the development of the Project,
and generally serve the purposes for which development agreements under Sections
65864 et seq of the Government Code are intended; and
2
WHEREAS, OWNER has incurred and will in the future incur substantial costs in
order to assure development of the Property in accordance with this Agreement; and
WHEREAS, OWNER has incurred and will in the future incur substantial costs in
excess of the generally applicable requirements in order to assure vesting of legal rights
to develop the Property in accordance with this Agreement.
WHEREAS, on November 15, 2018, an application was submitted for Minor Use
Permit No. MUP 18-06, Architectural Design Review No. ADR 18-19, Planning
Commission Administrative Modification No. PC AM 18-02, and Development Agreement
No. DA 19-01 to convert a portion of the existing 38,761 square foot, self-storage building
into a multitenant food hall and add an incidental outdoor dining area at the rear of the
building at 33-35 W. Huntington Drive (the "Project"); and
WHEREAS, on June 3, 2019, Planning Services completed an environmental
assessment for the Project in accordance with the California Environmental Quality Act
("CEQA") and on September 10, 2019, Planning Services updated the environmental
assessment based on changes to the Project and recommends that the City Council
determine that the Project qualifies as a Class 3 Categorical Exemption under CEQA
pursuant to Section 15303 of the CEQA Guidelines as a conversion of small structures;
and
WHEREAS, on July 9, 2019, a duly noticed public hearing was held before the
Planning Commission on said applications to provide their recommendations and
comments to the City Council, at which time all interested persons were given full
opportunity to be heard and to present evidence; and
3
WHEREAS, on October 1, 2019, a duly noticed public hearing was held before the
City Council on said applications, at which time all interested persons were given full
opportunity to be heard and to present evidence.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF ARCADIA,
CALIFORNIA, DOES ORDAIN AS FOLLOWS:
SECTION 1. The factual data submitted by the Development Services Department
in the staff report dated October 1, 2019 are true and correct.
SECTION 2. The City Council finds that based upon the entire record, including
all written and oral evidence presented, pursuant to the Arcadia Development Code, all of
the following findings can be made.
1. The development agreement is in the best interests of the City.
Facts to Support This Finding: The proposed Development Agreement is needed
to ensure that following the sale of the subject property by the Successor Agency to the
Applicant, the ground floor of the existing self-storage building will be transformed into a
multitenant Food Hall per the Applicant's proposed project. The Applicant was chosen by
the Successor Agency as the preferred buyer for this property based in part on the positive
benefits the Food Hall will bring to the area in the form of increased customers, sales tax
revenue, aesthetics, and overall vitality. The Development Agreement also facilitates a
$200,000 parking in-lieu fee paid by the Applicant to the City to use towards public parking
management and/or public parking construction in the Downtown Arcadia commercial
district. Finally, the Development Agreement includes a provision that the City will add
time-limits to the Morlan Place curbside parking spaces, which is an item requested by the
Applicant/Buyer to provide assurance that Morlan Place public parking spaces will not be
4
used for all day parking by employees working in the area and/or Gold Line riders. In
summary, the Development Agreement allows for a unique destination attraction in
Downtown Arcadia that is beneficial to this commercial district and in the best interests of
the City as a whole.
2. The Development Agreement is consistent with the purpose, intent, goals,
policies, programs, and land use designations of the General Plan, any applicable specific
plan, this Development Code, and the Zoning Map.
Facts to support this Finding: The Development Agreement will allow for a food hall
project that meets the required findings for approval of a Minor Use Permit, Administrative
Modification, and Architectural Design application, per the specifications of the Arcadia
Development Code, and is an allowable use per the CBD (Central Business District)
Zoning of the project site. The Development Agreement facilitates the adaptive reuse of
the ground floor of an outdated light-industrial storage building into a land use that is
consistent and compatible with the Commercial Land Use designation.
The Commercial designation is intended to permit a wide range of commercial uses
which serve both neighborhood and citywide markets. The designation allows a broad
array of commercial enterprises, including restaurants, durable goods sales, food stores,
lodging, professional offices, specialty shops, indoor and outdoor recreational facilities,
and entertainment uses. Adjacent to Downtown, the Commercial designation is intended
to encourage small-scale office and neighborhood-serving commercial uses that
complement development in the Downtown Mixed Use areas.
The proposed project and Development Agreement will also further the specific
General Plan goals and policies of the Downtown Arcadia Land Use Focus Area and the
Economic Development Element of the General Plan, including the following items:
5
Goal LU-10: A thriving Downtown, with healthy commercial areas supported by
high-quality, residential uses and supportive of the Metro Gold Line transit station.
• Policy LU-10.2: Promote the Metro Gold Line Extension and establishment of a
transit station in Downtown Arcadia, and take full advantage of the opportunities the Gold
Line station will bring to Downtown and the City as a whole.
• Policy LU-10.4: Establish commercial uses that complement the vision of the
Downtown core with opportunities for more intense, quality development at key
intersections that are unique from the regional offerings at the regional mall.
• Policy LU-10.10: Establish a "park once" system in Downtown with a collection
of shared surface and parking structures.
• Policy LU-10.14: Create a high-quality pedestrian experience in Downtown
through the use of street trees, public art, street furniture, and public gathering spaces.
Using signage, art, and unique uses, entice and encourage people to walk and explore
the commercial core of Downtown.
Goal ED-2: Re-creation of Downtown as the social and symbolic "Heart of the City".
• Policy ED-2.3: Adjust parking standards for Downtown to allow for shared
parking arrangements, use of public parking lots and structures, and reduced parking
requirements.
• Policy ED-3.2: Promote the commercial reuse of key vacant commercial
properties within the City through a program of active solicitation of prospective users,
particularly in those retail sectors for which the City is underserved and currently
experiencing leakage of sales tax dollars, and through the provision of appropriate
development incentives.
6
Goal ED-4: Continued revitalization of public infrastructure and private properties
within the redevelopment project area
• Policy ED-4.7: Adjust development standards as needed to ensure that parking
and zoning regulations enhance redevelopment opportunities and do not preclude project
feasibility.
3. The Development Agreement will promote the public convenience, health,
interest, safety, general welfare, and good land use practice.
Facts to support this Finding: The Development Agreement facilitates the adaptive
reuse of the ground floor of an outdated light-industrial storage building into a food hall
use that is more compatible and beneficial to the Downtown Arcadia commercial district.
The use will update the building to be in compliance with all applicable health, safety,
building, and other requirements. The Development Agreement will facilitate the
replacement of the current ground floor self-storage use and the vacant commercial units
fronting Huntington Drive with an active land use that is consistent with the Land Use
Designation of the site and General Plan goals and policies of the Downtown Arcadia Land
Use Focus Area. By converting the ground floor of an outdated light-industrial storage
building into a food hall, not only is the use more compatible and beneficial to the
Downtown Arcadia commercial district, it also promotes the public convenience, interest
and general welfare, and is a good land use practice in line with the City's General Plan.
4. The project will be compatible with the uses authorized in, and the regulations
prescribed for, the zone in which the real property is located.
Facts to support this Finding: The project facilitated by the Development Agreement
is for a food hall (small restaurants) use with alcoholic beverage service (which is allowed
by right in the subject zone), late night operating hours, and an incidental outdoor dining
7
area with greater than 12 seats which is allowed in the CBD Zone subject to approval of a
Minor Use Permit. The existing self-storage use will remain on floors 2 through 4 and the
basement level as a continuation of an existing legal-nonconforming use. With approval
of the proposed Administrative Modification for reduced on-site parking, the project
complies with all regulations prescribed for the subject property and zone.
5. The project will not adversely affect the orderly development of property or the
preservation of property values.
Facts to support this Finding: The project is anticipated to bring additional
customers and new businesses to the Downtown Arcadia commercial district. The project
is consistent with the shared parking strategies outlined in the Arcadia General Plan for
the Downtown Arcadia Land Use Focus Area. Based on the peak operating hours and
parking demands identified by Gibson Transportation Consultants for the food hall and
self-storage uses, and with the parking measures included in the Arcadia Commons
Parking Management Plan, including the addition of new curbside parking spaces on
Santa Clara Street and time limits on Morlan Place, the project will not adversely impact
development of other property or the preservation of property values in the area.
6. The project will further important Citywide goals and policies that have been
officially recognized by the City Council.
Facts to support this Finding: The proposed project will further a large number of
the goals and policies stated in the Arcadia General Plan, which was officially recognized
by the City Council through their adoption of the General Plan in November of 2010. These
goals and policies include the following items:
Goal LU-10: A thriving Downtown, with healthy commercial areas supported by
high-quality, residential uses and supportive of the Metro Gold Line transit station.
8
• Policy LU-10.2: Promote the Metro Gold Line Extension and establishment of a
transit station in Downtown Arcadia, and take full advantage of the opportunities the Gold
Line station will bring to Downtown and the City as a whole.
• Policy LU-10.4: Establish commercial uses that complement the vision of the
Downtown core with opportunities for more intense, quality development at key
intersections that are unique from the regional offerings at the regional mall.
• Policy LU-10.10: Establish a "park once" system in Downtown with a collection
of shared surface and parking structures.
• Policy LU-10.14: Create a high-quality pedestrian experience in Downtown
through the use of street trees, public art, street furniture, and public gathering spaces.
Using signage, art, and unique uses, entice and encourage people to walk and explore
the commercial core of Downtown.
Goal ED-2: Re-creation of Downtown as the social and symbolic "Heart of the City".
• Policy ED-2.3: Adjust parking standards for Downtown to allow for shared
parking arrangements, use of public parking lots and structures, and reduced parking
requirements.
• Policy ED-3.2: Promote the commercial reuse of key vacant commercial
properties within the City through a program of active solicitation of prospective users,
particularly in those retail sectors for which the City is underserved and currently
experiencing leakage of sales tax dollars, and through the provision of appropriate
development incentives.
Goal ED-4: Continued revitalization of public infrastructure and private properties
within the redevelopment project area
9
• Policy ED-4.7: Adjust development standards as needed to ensure that parking
and zoning regulations enhance redevelopment opportunities and do not preclude project
feasibility.
7. The project will provide the City with important, tangible benefits beyond those
that may be required by the City through project conditions of approval.
Facts to support this Finding: The Development Agreement for this project ensures
that following the sale of the Successor Agency property, the Applicant will implement in
a timely manner (30 months) the conversion of the ground floor of the building into a
multitenant food hall and that the food hall will remain in continuous operation for a
minimum of ten (10) years with operating hours of at least four (4) days and thirty (30)
hours per week. The Development Agreement creates an enforceable mechanism for
compliance with these requirements as failure to meet these minimums will be grounds
for liquidated damages paid by the property owner to the City. In addition, the Development
Agreement facilitates the payment of a $200,000 in lieu parking impact fee to be paid to
the City. Finally, through the development agreement the City agrees to add time-limits
on Morlan Place of no greater than four (4) continuous hours during weekday business
hours in order to free up additional public parking spaces for use by customers of the
nearby businesses, including the proposed food hall, which is an item that the Applicant
has stated is needed to ensure project viability. The above items cannot be effectively
implemented through project conditions of approval, and the Development Agreement
therefore makes the project feasible and provides important, tangible benefits to the City.
SECTION 3. The City Council finds that the Project and Development Agreement
are Categorically Exempt from the California Environmental Quality Act ("CEQA")
10
pursuant to Section 15303 of the CEQA Guidelines pertaining to the conversion of less
than 10,000 square feet of an existing structure (conversions of small structures).
SECTION 4. For the foregoing reasons the City Council approves Development
Agreement No. DA 19-01 pertaining to the pertaining to the conversion of 5,849 square
feet of an existing 38,761 square foot, self-storage building into a multitenant food hall
with a 1,326 square foot incidental outdoor dining and seating area at 33-35 W.
Huntington Drive.
SECTION 5. The City Clerk shall certify to the adoption of this Ordinance and
shall cause a copy of the same to be published at least once in the official newspaper of
said City within fifteen (15) days after its adoption. This Ordinance shall take effect on
the thirty-first (31St) day after its adoption.
Passed, approved, and adopted this 15th day of October , 2019.
0 ,,, '
/I/
�
yor of City of Arcadia
ATTEST:
Ard,, ..,_.,..,......
City Clef
AP' OVED AS TO FORM:
al,}/ii, f
Stephen P.'Deitsch
City Attorney
11
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:
CITY OF ARCADIA )
I, GENE GLASCO, City Clerk of the City of Arcadia, hereby certifies that the
foregoing Ordinance No. 2364 was passed and adopted by the City Council of the City of
Arcadia, signed by the Mayor and attested to by the City Clerk at a regular meeting of said
Council held on the 15th day of October, 2019 and that said Ordinance was adopted by the
following vote, to wit:
AYES: Amundson, Beck, and Chandler
NOES: None
ABSENT: Tay
ABSTAIN: Verlato
City ' lerk-ef i ity of Arcadia
12
Recorded at request of: )
Clerk, City Council )
City of Arcadia )
)
When recorded return to: )
City of Arcadia )
240 West Huntington Drive )
Arcadia, CA 91066 )
Attention: City Clerk )
)
Exempt from Filing Fees, Government Code Section 6103
DEVELOPMENT AGREEMENT NO. DA 19-01
A DEVELOPMENT AGREEMENT BETWEEN
CITY OF ARCADIA
and
NORTHEAST DEVELOPMENT ENTERPRISES II
A CALIFORNIA LIMITED LIABILITY COMPANY
24347.00801\30639162.7
DEVELOPMENT AGREEMENT NO. DA 19-01
This Development Agreement (hereinafter "Agreement") is dated as of the date it is
recorded with the Los Angeles County Recorder, and is entered into by and among the City of
Arcadia, a California municipal corporation (hereinafter "CITY"), and Northeast Development
Enterprises II, a California Limited Liability Company (hereinafter"OWNER"):
RECITALS
WHEREAS, CITY is authorized to enter into binding development agreements with
persons having legal or equitable interests in real property for the development of such property,
pursuant to Section 65864 et m. of the Government Code; and
WHEREAS, OWNER is in the process of purchasing the Property, as defined in Section 1
below,and has requested CITY to enter into a development agreement and proceedings have been
taken in accordance with the rules and regulations of CITY to allow for the redevelopment of the
Property with a mixed use project consisting of self-storage uses and a multitenant food hall space;
and
WHEREAS,by electing to enter into this Agreement,CITY shall bind future City Councils
of CITY by the obligations specified herein and limit the future exercise of certain governmental
and proprietary powers of CITY; and
WHEREAS,the terms and conditions of this Agreement have undergone extensive review
by CITY and the City Council and have been found to be fair,just and reasonable; and
WHEREAS,the best interests of the citizens of the CITY and the public health, safety and
welfare will be served by entering into this Agreement; and
WHEREAS, all of the procedures of the California Environmental Quality Act have been
met with respect to the Project and the Agreement and City staff has determined that this Project
and Agreement and its implementing actions are exempt from environmental review pursuant to
the California Environmental Quality Act(Pub.Resources Code, §21000 et seq.)and State CEQA
Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) section 15303 (Conversion of Small
Structures). This exemption applies to conversion of commercial buildings not exceeding 10,000
square feet in floor area from one use to another on sites zoned for such use if not involving the
use of significant amounts of hazardous substances where all necessary public services and
facilities are available and the surrounding area is not environmentally sensitive.
WHEREAS, this Agreement and the Project are consistent with the CITY's General Plan
and any Specific Plan applicable thereto; and
WHEREAS, all actions taken and approvals given by CITY have been duly taken or
approved in accordance with all applicable legal requirements for notice,public hearings,findings,
votes, and other procedural matters; and
WHEREAS, development of the Property in accordance with this Agreement will provide
substantial benefits to CITY and will further important policies and goals of CITY; and
24347.00801130639162.7
WHEREAS, this Agreement will eliminate uncertainty in planning and provide for the
orderly development of the Property, ensure progressive installation of necessary improvements,
provide for public services appropriate to the development of the Project, and generally serve the
purposes for which development agreements under Sections 65864 et se_c of the Government Code
are intended; and
WHEREAS,OWNER has incurred and will in the future incur substantial costs in order to
assure development of the Property in accordance with this Agreement; and
WHEREAS, OWNER has incurred and will in the future incur substantial costs in excess
of the generally applicable requirements in order to assure vesting of legal rights to develop the
Property in accordance with this Agreement.
TERMS AND CONDITIONS
NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants
hereinafter contained and for other good and valuable consideration,the receipt and sufficiency of
which is hereby acknowledged,the parties agree as follows:
1. DEFINITIONS AND EXHIBITS.
1.1 Definitions. The following terms when used in this Agreement shall be defined as
follows:
1.1.1 Agreement. This Development Agreement.
1.1.2 City. The City of Arcadia,a municipal corporation, organized and existing
pursuant to the laws of the State of California.
1.1.3 Development. The improvement of the Property for the purposes of
completing the structures, improvements and facilities comprising the Project including, but not
limite$ to: grading; the construction of infrastructure and public facilities related to the Project
whether located within or outside the Property; the construction of buildings and structures; and
the installation of landscaping. "Development" does not include the maintenance, repair,
reconstruction or redevelopment of any building, structure, improvement or facility after the
construction and completion thereof.
1.1.4 Development Approvals. All permits and other entitlements for use
subject to approval or issuance by CITY in connection with development of the Property including,
but not limited to:
(a) specific plans and specific plan amendments;
(b) tentative and final subdivision and parcel maps;
(c) conditional use permits, public use permits and plot plans;
(d) zoning;
3
24347.00801\30639162.7
(e) grading and building permits.
1.1.5 Development Exaction. Any requirement of CITY in connection with or
pursuant to any Land Use Regulation or Development Approval for the dedication of land, the
construction of improvements or public facilities, or the payment of fees in order to lessen,offset,
mitigate or compensate for the impacts of development on the environment or other public
interests.
1.1.6 Development Impact Fee. A monetary exaction other than a tax or special
assessment,whether established for a broad class of projects by legislation of general applicability
or imposed on a specific project on an ad hoc basis, that is charged by a local agency to the
applicant in connection with approval of a development project for the purpose of defraying all or
a portion of the cost of public facilities related to the development project, but does not include
park"in lieu" fees specified in Government Code Section 66477, fees for processing applications
for governmental regulatory actions or approvals, or fees collected under development agreements
adopted pursuant to Article 2.5 of the Government Code (commencing with Section 65864) of
Chapter 4. The term "Development Impact Fee" expressly includes the Parking Impact Fee and
any additional impact, public facilities or impact fee of the CITY as of the Effective Date of this
Agreement.
1.1.7 Development Plan.The Existing Development Approvals and the Existing
Land Use Regulations applicable to development of the Property.
1.1.8 Effective Date. The close of escrow date under the Purchase and Sale
Agreement.
1.1.9 Existing Development Approvals. All Development Approvals approved
or issued prior to the Effective Date. Existing Development Approvals includes the Approvals
incorporated herein as Exhibit"C" and all other Approvals which are a matter of public record on
the Effective Date.
1.1.10 Existing Land Use Regulations. All Land Use Regulations in effect on
the Effective Date. Existing Land Use Regulations includes the Regulations incorporated herein
as Exhibit"D"and all other Regulations which are a matter of public record on the Effective Date.
1.1.11 Food Hall. 7,000—7,500 gross square feet of multitenant food hall space,
inclusive of an outdoor dining and seating area,that is open for business not less than four(4)days
and thirty(30)hours per week as further described in Exhibit"B"to this Agreement.
1.1.12 Food Hall Opening. The opening for business of a minimum of 7,000
gross square-feet of multitenant food hall space, inclusive of an outdoor dining and seating area,
with operating hours of not less than four(4) days and thirty(30)hours per week.
1.1.13 Land Use Regulations. All ordinances, resolutions, codes, rules,
regulations and official policies of CITY governing the development and use of land, including,
without limitation, the permitted use of land, the density or intensity of use, subdivision
requirements, the maximum height and size of proposed buildings, the provisions for reservation
4
24347 00801\30639162.7
or dedication of land for public purposes, and the design, improvement and construction standards
and specifications applicable to the development of the property. "Land Use Regulations" does
not include any CITY ordinance, resolution, code, rule, regulation or official policy, governing:
(a) the conduct of businesses, professions, and occupations;
(b) taxes and assessments;
(c) the control and abatement of nuisances;
(d) the granting of encroachment permits and the conveyance of rights
and interests which provide for the use of or the entry upon public property;
(e) the exercise of the power of eminent domain.
1.1.14 OWNER. The persons and entities listed as OWNER on page 1 of this
Agreement and their successors in interest to all or any part of the Property.
1.1.15 Mortgagee. A mortgagee of a mortgage,a beneficiary under a deed of trust
or any other security-device lender, and their successors and assigns.
1.1.16 Parking Impact Fee. A fee in the amount of$200,000 to be paid to the
City as a Development Impact Fee for public parking impacts resulting from the Project.
1.1.17 Project.The development of the Property with 7,000 to 7,500 gross square-
feet of multitenant food hall space, inclusive of an outdoor dining and seating area, as further
described in Exhibit"B"to this Agreement.
1.1.18 Property. The real property described on Exhibit"A"to this Agreement.
1.1.19 Purchase and Sale Agreement. The Real Property Purchase and Sale
Agreement and Joint Escrow Instructions (Self-Storage Building/Northeast Development), dated
October 16, 2018 and entered into by and between the Successor Agency to the City of Arcadia
Redevelopment Agency and OWNER.
1.1.20 Reservations of Authority. The rights and authority excepted from the
assurances and rights provided to OWNER under this Agreement and reserved to CITY under
Section 3.6 of this Agreement.
1.1.21 Street Parking Restrictions. Time restrictions on public curbside parking
of no greater than four(4)continuous hours on weekdays from 9:00AM to 6:00PM for the entirety
of Morlan Place, a street in Arcadia adjacent to the Property.
1.1.22 Subsequent Development Approvals. All Development Approvals
required subsequent to the Effective Date in connection with development of the Property.
1.1.23 Subsequent Land Use Regulations. Any Land Use Regulations adopted
and effective after the Effective Date of this Agreement.
J
24347.00801130639162.7
1.2 Exhibits. The following documents are attached to, and by this reference made a
part of,this Agreement:
Exhibit"A"—Legal Description of the Property.
Exhibit"B"—Project Description.
Exhibit"C"—Existing Development Approvals.
Exhibit"D"—Existing Land Use Regulations.
Exhibit"E"—Development Impact Fees.
2. GENERAL PROVISIONS.
2.1 Binding Effect of Agreement. The Property is hereby made subject to this
Agreement. Development of the Property is hereby authorized and shall be carried out only in
accordance with the terms of this Agreement.
2.2 Ownership of Property. OWNER represents and covenants that, as of the Effective
Date, OWNER shall be the owner of the fee simple title to the Property or a portion thereof. In
the event that OWNER fails to close escrow on the Property through the Purchase and Sale
Agreement,this Agreement shall be null and void.
2.3 Term. The initial term of this Agreement shall commence on the Effective Date
and shall continue for a period of ten(10)years thereafter unless this term is modified or extended
pursuant to the provisions of this Agreement.
2.4 Assignment.
2.4.1 Right to Assign. OWNER shall have the right to sell, transfer or assign the
Property in whole or in part (provided that no such partial transfer shall violate the Subdivision
Map Act,Government Code Section 66410 et seg.),to any person,partnership,joint venture, firm
or corporation at any time during the term of this Agreement; provided, however, that any such
sale, transfer or assignment shall include the assignment and assumption of the rights, duties and
obligations arising under or from this Agreement and be made in strict compliance with the
following conditions precedent:
(a) No sale, transfer or assignment of any right or interest under this
Agreement shall be made unless made together with the sale,transfer or assignment of all or a part
of the Property.
(b) Concurrent with any such sale, transfer or assignment, or within
fifteen(15)business days thereafter, OWNER shall notify CITY, in writing, of such sale,transfer
or assignment and shall provide CITY with an executed agreement, in a form reasonably
acceptable to CITY, by the purchaser, transferee or assignee and providing therein that the
purchaser, transferee or assignee expressly and unconditionally assumes all the duties and
obligations of OWNER under this Agreement.
6
24347.00801\30639162.7
Any sale, transfer or assignment not made in strict compliance with the foregoing
conditions shall constitute a default by Owner under this Agreement. Notwithstanding the failure
of any purchaser,transferee or assignee to execute the agreement required by Section 2.4.1(b),the
burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the
benefits of this Agreement shall not inure to such purchaser,transferee or assignee until and unless
such agreement is executed.
2.4.2 Release of Transferring Owner. Notwithstanding any sale, transfer or
assignment, a transferring OWNER shall continue to be obligated under this Agreement unless
such transferring OWNER is given a release in writing by CITY, which release shall be provided
by CITY upon the full satisfaction by such transferring OWNER of the following conditions:
(a) OWNER no longer has a legal or equitable interest in all or any part
of the Property.
(b) OWNER is not then in default under this Agreement.
(c) OWNER has provided CITY with the notice and executed
agreement required under Section 2.4.1(b).
(d) The purchaser, transferee or assignee provides CITY with security
equivalent to any security previously provided by OWNER to secure performance of its
obligations hereunder.
2.4.3 Subsequent Assignment. Any subsequent sale, transfer or assignment after
an initial sale, transfer or assignment shall be made only in accordance with and subject to the
terms and conditions of this Section.
2.5 Amendment or Cancellation of Agreement. This Agreement may be amended or
canceled in whole or in part only by written consent of all parties in the manner provided for in
Government Code Section 65868. This provision shall not limit any remedy of CITY or OWNER
as provided by this Agreement.
2.6 Termination. This Agreement shall be deemed terminated and of no further effect
upon the occurrence of any of the following events:
2.6.1 Expiration of the stated term of this Agreement as set forth in Section 2.3.
2.6.2 Entry of a final judgment setting aside, voiding or annulling the adoption of
the ordinance approving this Agreement.
2.6.3 The adoption of a referendum measure overriding or repealing the
ordinance approving this Agreement.
2.6.4 Completion of the Project in accordance with the terms of this Agreement
including issuance of all required occupancy permits and acceptance by CITY or applicable public
agency of all required dedications.
7
24347.00801\30639162.7
2.6.5 Termination of this Agreement based on any default of OWNER and
following the termination proceedings required by Section 6.4.
Termination of this Agreement shall not constitute termination of any other land
use entitlements approved for the Property.Upon the termination of this Agreement,no party shall
have any further right or obligation hereunder except with respect to any obligation to have been
performed prior to such termination or with respect to any default in the performance of the
provisions of this Agreement which has occurred prior to such termination or with respect to any
obligations which are specifically set forth as surviving this Agreement. Upon such termination,
any public facilities and services mitigation fees paid pursuant to Section 4.2 of this Agreement by
OWNER to CITY on which construction has not yet begun shall be refunded to OWNER by CITY.
2.7 Notices.
2.7.1 As used in this Agreement, "notice" includes, but is not limited to, the
communication of notice, request, demand, approval, statement, report, acceptance, consent,
waiver, appointment or other communication required or permitted hereunder.
2.7.2 All notices shall be in writing and shall be considered given either:(i)when
delivered in person to the recipient named below;or(ii)on the date of delivery shown on the return
receipt, after deposit in the United States mail in a sealed envelope as either registered or certified
mail with return receipt requested, and postage and postal charges prepaid, and addressed to the
recipient named below; or (iii) on the date of delivery shown in the records of the telegraph
company after transmission by telegraph to the recipient named below. All notices shall be
addressed as follows:
If to CITY:
City of Arcadia
240 West Huntington Drive
Arcadia, CA 91066
Attn: City Manager
Telephone: (626) 574-5401
Facsimile: (626)446-5729
Copy to:
Best, Best& Krieger, LLP
2855 E. Guasti Road, Suite 400
Ontario, CA 91761
Attn: Arcadia City Attorney
Telephone: (909)989-8584
Facsimile: (909) 944-1441
If to OWNER:
Northeast Development Enterprises II
do Peter Lee, Manager
1828 Lincoln Blvd, Unit#B
8
24347.00801\30639162.7
Santa Monica, CA 90404
Telephone: (310) 985-2133
Email: peterintaelee@gmail.com
2.7.3 Either party may, by notice given at any time, require subsequent notices to
be given to another person or entity, whether a party or an officer or representative of a party, or
to a different address, or both.Notices given before actual receipt of notice of change shall not be
invalidated by the change.
3. DEVELOPMENT OF THE PROPERTY.
3.1 Rights to Develop. Subject to the terms of this Agreement, OWNER shall have a
vested right to develop the Property in accordance with, and to the extent of, the Development
Plan. The Project shall remain subject to all Subsequent Development Approvals required to
complete the Project as contemplated by the Development Plan. Except as otherwise provided in
this Agreement,the permitted uses of the Property, the density and intensity of use,the maximum
height and size of proposed buildings, and provisions for reservation and dedication of land for
public purposes shall be those set forth in the Development Plan.
3.2 Effect of Agreement on Land Use Regulations.Except as otherwise provided under
the terms of this Agreement including the Reservations of Authority, the rules, regulations and
official policies governing permitted uses of the Property, the density and intensity of use of the
Property, the maximum height and size of proposed buildings, and the design, improvement and
construction standards and specifications applicable to development of the Property shall be the
Existing Land Use Regulations. In connection with any Subsequent Development Approval,CITY
shall exercise its discretion in accordance with the Development Plan, and as provided by this
Agreement including, but not limited to, the Reservations of Authority. CITY shall accept for
processing, review and action all applications for Subsequent Development Approvals, and such
applications shall be processed in the normal manner for processing such matters.
3.3 Timing of Development. The parties acknowledge that OWNER cannot at this time
predict when or the rate at which phases of the Property will be developed. Such decisions depend
upon numerous factors which are not within the control of OWNER, such as market orientation
and demand, interest rates, absorption, completion and other similar factors. Since the California
Supreme Court held in Pardee Construction Co. v. City of Camarillo (1984) 37 Ca1.3d 465, that
the failure of the parties therein to provide for the timing of development resulted in a later adopted
initiative restricting the timing of development to prevail over such parties' agreement, it is the
parties' intent to cure that deficiency by acknowledging and providing that OWNER shall have
the right to develop the Property in such order and at such rate and at such times as OWNER deems
appropriate within the exercise of its subjective business judgment, subject only to any timing or
phasing requirements set forth in the Development Plan or the Phasing Plan set forth in Section
3.4.
3.4 Phasing Plan. Development of the Property shall be subject to all timing and
phasing requirements established by the Development Plan. Notwithstanding the foregoing, the
Property shall be developed consistent with the Development Plan which shall provide that the
Food Hall component of the Project shall open for business ("Food Hall Opening") not later than
9
24347 00801\30639162.7
thirty(30)months from the Close of Escrow under the Purchase and Sale Agreement entered into
by Successor Agency to the Arcadia Redevelopment Agency and OWNER, dated October 16,
2018. OWNER shall demonstrate good faith efforts to enable the Food Hall Opening to occur as
reasonably early as possible. In the event that the Food Hall Opening has not occurred within
twelve (12) months from Close of Escrow, OWNER shall provide to CITY monthly written
updates regarding development status of the Property which can include but not be limited to,
progress reports for design, construction, and leasing. The Parties acknowledge that Owner has
incentive to open the Food Hall as soon as possible but there are factors, including those described
in Section 3.3, that are out of Owner's control.
3.5 Food Hall Continuous Operation. Food Hall shall continuously operate of a
minimum of 7,000 gross square-feet of multitenant food hall space, inclusive of an outdoor patio
and seating area, for ten (10) years from the date of Food Hall Opening with operating hours of
not less than four(4) days and thirty (30) hours per week.
3.6 Street Parking Restrictions. Prior to Food Hall Opening, CITY agrees in good faith
to pursue restricting the parking, subject to following all procedural requirements of law.
Following the adoption of any parking restrictions,CITY will post and actively enforce,consistent
with existing practices and the law, curbside parking restrictions during regular weekday business
hours of 9:00 AM to 6:00 PM for the entirety of Morlan Place. These restrictions shall be
determined and adjusted at the sole discretion of the CITY,provided however,that they shall allow
for no greater than four (4) hours of continuous curbside parking during weekday business hours
for the entirety of Morlan Place. The Parties agree the Street Parking Restrictions will remain in
effect for ten (10) years from the date of Food Hall Opening provided the Food Hall remains in
compliance with the operating hours specified in Sec. 3.5 of this Agreement.Notwithstanding the
preceding sentence, Owner agrees and acknowledges that CITY is a public agency and must and
does retain its full and unfettered discretion as to future parking restrictions. Prior to making any
adjustments to the parking restrictions on Morlan Place, CITY will meet and confer with Owner
during the ten (10) year period, provided Owner is in compliance with the operating hours
requirements in Section 3.5, prior to adjusting the parking restrictions on Morlan Place.
3.7 Changes and Amendments. The parties acknowledge that refinement and further
development of the Project will require Subsequent Development Approvals and may demonstrate
that changes are appropriate and mutually desirable in the Existing Development Approvals. In
the event OWNER finds that a change in the Existing Development Approvals is necessary or
appropriate, OWNER shall apply for a Subsequent Development Approval to effectuate such
change and CITY shall process and act on such application in accordance with the Existing Land
Use Regulations, except as otherwise provided by this Agreement including the Reservations of
Authority. If approved, any such change in the Existing Development Approvals shall be
incorporated herein as an addendum to Exhibit"C",and may be further changed from time to time
as provided in this Section. Unless otherwise required by law,as determined in CITY's reasonable
discretion, a change to the Existing Development Approvals shall be deemed "minor" and not
require an amendment to this Agreement provided such change does not:
3.7.1 Alter the permitted uses of the Property as a whole; or,
3.7.2 Increase the density or intensity of use of the Property as a whole; or,
10
24347 00801\30639162.7
3.7.3 Increase the maximum height and size of permitted buildings; or,
3.7.4 Delete a requirement for the reservation or dedication of land for public
purposes within the Property as a whole; or,
3.7.5 Constitute a project requiring a subsequent or supplemental environmental
impact report pursuant to Section 21166 of the Public Resources Code.
3.8 Reservations of Authority.
3.8.1 Limitations, Reservations and Exceptions. Notwithstanding any other
provision of this Agreement, the following Subsequent Land Use Regulations shall apply to the
development of the Property.
(a) Processing fees and charges of every kind and nature imposed by
CITY to cover the estimated actual costs to CITY of processing applications for Development
Approvals or for monitoring compliance with any Development Approvals granted or issued.
Procedural regulations relating to hearing bodies, petitions, applications,
notices, findings, records, hearings, reports, recommendations, appeals and
any other matter of procedure.
(b) Regulations governing construction standards and specifications
including, without limitation, the CITY's Building Code, Plumbing Code, Mechanical Code,
Electrical Code, Fire Code and Grading Code.
(c) Regulations imposing Development Exactions; provided, however,
that no such subsequently adopted Development Exaction shall be applicable to development of
the Property unless such Development Exaction is applied uniformly to development, either
throughout the CITY or within a defined area of benefit which includes the Property. No such
subsequently adopted Development Exaction shall apply if its application to the Property would
physically prevent development of the Property for the uses and to the density or intensity of
development set forth in the Development Plan. In the event any such subsequently adopted
Development Exaction fulfills the same purposes, in whole or in part, as the fees set forth in
Section 4 of this Agreement, CITY shall allow a credit against such subsequently adopted
Development Exaction for the fees paid under Section 4 of this Agreement to the extent such fees
fulfill the same purposes.
(d) Regulations which may be in conflict with the Development Plan
but which are reasonably necessary to protect the public health and safety. To the extent possible,
any such regulations shall be applied and construed so as to provide OWNER with the rights and
assurances provided under this Agreement.
(e) Regulations which are not in conflict with the Development Plan.
Any regulation, whether adopted by initiative or otherwise, limiting the rate or timing of
development of the Property shall be deemed to conflict with the Development Plan and shall
therefore not be applicable to the development of the Property.
11
24347.00801\30639162.7
(fj Regulations which are in conflict with the Development Plan
provided OWNER has given written consent to the application of such regulations to development
of the Property.
3.8.2 Subsequent Development Approvals. This Agreement shall not prevent
CITY, in acting on Subsequent Development Approvals, from applying Subsequent Land Use
Regulations which do not conflict with the Development Plan, nor shall this Agreement prevent
CITY from denying or conditionally approving any Subsequent Development Approval on the
basis of the Existing Land Use Regulations or any Subsequent Land Use Regulation not in conflict
with the Development Plan.
3.8.3 Modification or Suspension by State or Federal Law. In the event that
State or Federal laws or regulations, enacted after the Effective Date of this Agreement, prevent
or preclude compliance with one or more of the provisions of this Agreement, such provisions of
this Agreement shall be modified or suspended as may be necessary to comply with such State or
Federal laws or regulations,provided, however,that this Agreement shall remain in full force and
effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws
or regulations do not render such remaining provisions impractical to enforce.
3.8.4 Intent. The parties acknowledge and agree that CITY is restricted in its
authority to limit its police power by contract and that the foregoing limitations, reservations and
exceptions are intended to reserve to CITY all of its police power which cannot be so limited.This
Agreement shall be construed, contrary to its stated terms if necessary,to reserve to CITY all such
power and authority which cannot be restricted by contract.
3.9 Public Works. If OWNER is required by this Agreement to construct any public
works facilities which will be dedicated to CITY or any other public agency upon completion, and
if required by applicable laws to do so, OWNER shall perform such work in the same manner and
subject to the same requirements as would be applicable to CITY or such other public agency
should it have undertaken such construction.
3.10 Provision of Real Property Interests by CITY. In any instance where OWNER is
required to construct any public improvement on land not owned by OWNER, OWNER shall at
its sole cost and expense provide or cause to be provided,the real property interests necessary for
the construction of such public improvements. In the event OWNER is unable, after exercising
reasonable efforts, including, but not limited to, the rights under Sections 1001 and 1002 of the
Civil Code, to acquire the real property interests necessary for the construction of such public
improvements, and if so instructed by OWNER and upon OWNER'S provision of adequate
security for costs CITY may reasonably incur, CITY shall negotiate the purchase of the necessary
real property interests to allow OWNER to construct the public improvements as required by this
Agreement and, if necessary, in accordance with the procedures established by law, use its power
of eminent domain to acquire such required real property interests. OWNER shall pay all costs
associated with such acquisition or condemnation proceedings. This section 3.8 is not intended by
the parties to impose upon the OWNER an enforceable duty to acquire land or construct any public
improvements on land not owned by OWNER, except to the extent that the OWNER elects to
proceed with the development of the Project, and then only in accordance with valid conditions
12
24347.00801\30639162.7
imposed by the CITY upon the development of the Project under the Subdivision Map Act or other
legal authority.
3.11 Regulation by Other Public Agencies. It is acknowledged by the parties that other
public agencies not within the control of CITY possess authority to regulate aspects of the
development of the Property separately from or jointly with CITY and this Agreement does not
limit the authority of such other public agencies.
3.12 Utilities. The Project shall be connected to all utilities necessary to provide
adequate water,sewer,gas,electric,and other utility service to the Project. OWNER shall contract
with the CITY for CITY-owned or operated utilities serving the Project for such prices and on
such terms as may be mutually agreed to between the parties.
3.13 Owner Attendance at City Meetings. OWNER agrees to have one or more of its
employees or consultants who are knowledgeable regarding this Agreement and the Project, such
that such person(s) can meaningfully respond to City questions regarding the progress of the
Project, attend meetings of the City governing body,when requested to do so by City.
3.14 PREVAILING WAGES
3.14.1 PUBLIC FUNDS: OWNER AND CITY ACKNOWLEDGE AND
AGREE THAT IT IS THE PARTIES INTENT THAT THE DEVELOPMENT PROJECT SHALL
BE FINANCED ENTIRELY BY THE OWNER AND THAT NO PUBLIC FUNDS OR IN-KIND
INCENTIVES SHALL BE PROVIDED.
3.14.2 RESPONSIBILITY. OWNER AGREES WITH CITY THAT OWNER
SHALL ASSUME ANY AND ALL RESPONSIBILITY AND BE SOLELY RESPONSIBLE
FOR DETERMINING WHETHER OR NOT LABORERS EMPLOYED RELATIVE TO THE
CONSTRUCTION OF THE PROJECT MUST BE PAID THE PREVAILING PER DIEM WAGE
RATE FOR THEIR LABOR CLASSIFICATION, AS DETERMINED BY THE STATE,
PURSUANT TO LABOR CODE SECTIONS 1720 ET SEQ., OR PURSUANT TO
APPLICABLE FEDERAL LAW.
3.14.3 WAIVERS AND RELEASES. OWNER,ON BEHALF OF ITSELF, ITS
SUCCESSORS AND ASSIGNS, WAIVES AND RELEASES CITY FROM ANY RIGHT OF
ACTION THAT MAY BE AVAILABLE TO ANY OF THEM PURSUANT TO STATE LABOR
CODE SECTION 1781 OR OTHER STATE OR FEDERAL LAW REGARDING PAYMENT
OF MINIMUM OR PREVAILING WAGE AMOUNTS. RELATIVE TO THE WAIVERS AND
RELEASES CONTAINED IN THIS SECTION 3.14.2 OWNER ACKNOWLEDGES THE
PROTECTIONS OF CIVIL CODE SECTION 1542, WHICH READS AS FOLLOWS:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING
THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT
WITH THE DEBTOR.
13
24347 00801\30639162.7
3.14.4 INITIALS. BY INITIALING BELOW, OWNER KNOWINGLY AND
VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN
CONNECTION WITH THE WAIVERS AND RELEASES CONTAINED IN SECTION 3.14.2:
Initials of Authorized
OWNER Representative
4. PUBLIC BENEFITS.
4.1 Intent. The parties acknowledge and agree that development of the Property will
result in substantial public needs which will not be fully met by the Development Plan and further
acknowledge and agree that this Agreement confers substantial private benefits on OWNER which
should be balanced by commensurate public benefits. Accordingly, the parties intend to provide
consideration to the public to balance the private benefits conferred on OWNER by providing
more fully for the satisfaction of the public needs resulting from the Project.
4.2 Development Impact Fees.
4.2.1 Time of Payment. All Development Impact Fees, including the Parking
Impact Fee, shall be paid to CITY prior to the issuance of building permits.
5. REVIEW FOR COMPLIANCE.
5.1 Periodic Review. The Planning Director shall review this Agreement annually, on
or before the anniversary of the Effective Date, in order to ascertain the good faith compliance by
OWNER with the terms of the Agreement. OWNER shall submit an Annual Monitoring Report,
in a form acceptable to the Planning Director,within 30 days after written notice from the Planning
Director.
5.2 Special Review. The City Council may order a special review of compliance with
this Agreement at any time. The Planning Director shall conduct such special reviews.
5.3 Procedure.
5.3.1 During either a periodic review or a special review, OWNER shall be
required to demonstrate good faith compliance with the terms of the Agreement. The burden of
proof on this issue shall be on OWNER.
5.3.2 Upon completion of a periodic review or a special review, the Planning
Director shall submit a report to the City Council setting forth the evidence concerning good faith
compliance by OWNER with the terms of this Agreement and his or her recommended finding on
that issue.
5.3.3 If the City Council finds on the basis of substantial evidence that OWNER
has complied in good faith with the terms and conditions of this Agreement, the review shall be
concluded.
14
24347 00801\30639162.7
5.3.4 If the City Council makes a preliminary finding that OWNER has not
complied in good faith with the terms and conditions of this Agreement, the Council may modify
or terminate this Agreement as provided in Section 5.4 and Section 5.5. Notice of default as
provided under Section 6 of this Agreement shall be given to OWNER prior to or concurrent with,
proceedings under Section 5.4 and Section 5.5.
5.4 Proceedings Upon Modification or Termination. If, upon a finding under Section
5.3, CITY determines to proceed with modification or termination of this Agreement, CITY shall
give written and e-mail notice to OWNER of its intention so to do. The notice shall be given at
least ten (10)calendar days prior to the scheduled hearing and shall contain:
5.4.1 The time and place of the hearing;
5.4.2 A statement as to whether or not CITY proposes to terminate or to modify
the Agreement; and,
5.4.3 Such other information as is reasonably necessary to inform OWNER of the
nature of the proceeding.
5.5 Hearing on Modification or Termination. At the time and place set for the hearing
on modification or termination,OWNER shall be given an opportunity to be heard. OWNER shall
be required to demonstrate good faith compliance with the terms and conditions of this Agreement.
The burden of proof on this issue shall be on OWNER. If the City Council finds, based upon
substantial evidence,that OWNER has not complied in good faith with the terms or conditions of
the Agreement, the City Council may terminate this Agreement or modify this Agreement and
impose such conditions as are reasonably necessary to protect the interests of the CITY. The
decision of the City Council shall be final, subject only to judicial review pursuant to Section
1094.5 of the Code of Civil Procedure.
5.6 Certificate of Agreement Compliance. If,at the conclusion of a Periodic or Special
Review, OWNER is found to be in compliance with this Agreement, CITY shall, upon request by
OWNER, issue a Certificate of Agreement Compliance ("Certificate") to OWNER stating that
after the most recent Periodic or Special Review and based upon the information known or made
known to the Planning Director and City Council that(1)this Agreement remains in effect and(2)
OWNER is not in default. The Certificate shall be in recordable form, shall contain information
necessary to communicate constructive record notice of the finding of compliance, shall state
whether the Certificate is issued after a Periodic or Special Review and shall state the anticipated
date of commencement of the next Periodic Review. OWNER may record the Certificate with the
County Recorder.
Whether or not the Certificate is relied upon by assignees or other transferees or OWNER,
CITY shall not be bound by a Certificate if a default existed at the time of the Periodic or Special
Review,but was concealed from or otherwise not known to the Planning Director or City Council.
6. DEFAULT AND REMEDIES.
15
24347.00801\30639162.7
6.1 Remedies in General. It is acknowledged by the Parties that CITY would not have
entered into this Agreement if it were to be liable in damages under this Agreement,or with respect
to this Agreement or the application thereof. In general,each of the Parties hereto may pursue any
remedy at law or equity available for the breach of any provision of this Agreement, except that
CITY shall not be liable in damages to OWNER,or to any successor in interest of OWNER,or to
any other person, and OWNER covenants not to sue for damages or claim any damages:
6.1.1 For any breach of this Agreement or for any cause of action which arises
out of this Agreement; or
6.1.2 For the taking, impairment or restriction of any right or interest conveyed
or provided under or pursuant to this Agreement; or
6.1.3 Arising out of or connected with any dispute,controversy or issue regarding
the application or interpretation or effect of the provisions of this Agreement.
6.2 Specific Performance. The parties acknowledge that money damages and remedies
at law generally are inadequate and specific performance and other non-monetary relief are
particularly appropriate remedies for the enforcement of this Agreement and should be available
to all parties for the following reasons:
6.2.1 Money damages are unavailable against CITY as provided in Section 6.1.
6.2.2 Due to the size, nature and/or scope of the Project, it may not be practical
or possible to restore the Property to its natural condition once implementation of this Agreement
has begun.After such implementation,OWNER may be foreclosed from other choices it may have
had to utilize the Property or portions thereof. OWNER has invested significant time and resources
and performed extensive planning and processing of the Project in agreeing to the terms of this
Agreement and will be investing even more significant time and resources in implementing the
Project in reliance upon the terms of this Agreement, and it is not possible to determine the sum
of money which would adequately compensate OWNER for such efforts.
6.3 Release. Except for nondamage remedies, including the remedy of specific
performance and judicial review as provided for in Section 5.5, OWNER, for itself, its successors
and assignees, hereby releases the CITY, its officers, agents and employees from any and all
claims, demands, actions, or suits of any kind or nature arising out of any liability, known or
unknown,present or future, including, but not limited to, any claim or liability, based or asserted,
pursuant to Article I, Section 19 of the California Constitution,the Fifth Amendment of the United
States Constitution, or any other law or ordinance which seeks to impose any other liability or
damage,whatsoever,upon the CITY because it entered into this Agreement or because of the terms
of this Agreement.
6.4 Termination or Modification of Agreement for Default of OWNER. Subject to the
provisions contained in Section 5.5,CITY may terminate or modify this Agreement for any failure
of OWNER to perform any material duty or obligation of OWNER under this Agreement, or to
comply in good faith with the terms of this Agreement (hereinafter referred to as "Default");
provided, however, CITY may terminate or modify this Agreement pursuant to this Section only
16
24347.00801\30639162 7
after providing written notice to OWNER of default setting forth the nature of the default and the
actions, if any, required by OWNER to cure such default and, where the default can be cured,
OWNER has failed to take such actions and cure such default within 60 days after the effective
date of such notice or, in the event that such default cannot be cured within such 60 day period but
can be cured within a longer time, has failed to commence the actions necessary to cure such
default within such 60 day period and to diligently proceed to complete such actions and cure such
default.
6.4.1 Failure to Open Food Hall Default. As provided in Section 3.4 of this
Agreement, Food Hall Opening shall occur within thirty (30) months of Close of Escrow under
the Purchase and Sale Agreement between the OWNER and the Successor Agency to the Arcadia
Redevelopment Agency.Failure to open the Food Hall within the aforementioned time frame shall
be Default under this Agreement. If such Default occurs CITY shall be entitled to collect liquidated
damages from the OWNER in the amount of three hundred dollars ($300) for each day the Food
Hall is not open.
6.4.2 Failure to Continuously Operate Food Hall Default. As provided in Section
3.5 of this Agreement, Food Hall shall operate no less than four(4) days and thirty(30)hours per
week for a minimum of ten (10) years from the date of Food Hall Opening. Failure to comply
with the aforementioned time frames shall be Default under this Agreement. If such Default occurs
CITY shall not be required to continue posting Street Parking Restrictions and OWNER shall be
prohibited from using the ground floor of the building for any non-Food Hall uses other than a
small, 400 square foot or less self-storage leasing office until such time that the Development
Agreement is modified by mutual consent of the CITY and the OWNER.
6.5 Termination of Agreement for Default of CITY. OWNER may terminate this
Agreement only in the event of a default by CITY in the performance of a material term of this
Agreement and only after providing written notice to CITY of default setting forth the nature of
the default and the actions, if any, required by CITY to cure such default and, where the default
can be cured, CITY has failed to take such actions and cure such default within 60 days after the
effective date of such notice or, in the event that such default cannot be cured within such 60 day
period but can be cured within a longer time, has failed to commence the actions necessary to cure
such default within such 60 day period and to diligently proceed to complete such actions and cure
such default.
7. THIRD PARTY LITIGATION.
7.1 General Plan Litigation. CITY has determined that this Agreement is consistent
with its General Plan, and that the General Plan meets all requirements of law. OWNER has
reviewed the General Plan and concurs with CITY's determination. CITY shall have no liability
in damages under this Agreement for any failure of CITY to perform under this Agreement or the
inability of OWNER to develop the Property as contemplated by the Development Plan of this
Agreement as the result of a judicial determination that on the Effective Date, or at any time
thereafter, the General Plan, or portions thereof, are invalid or inadequate or not in compliance
with law.
17
24347.00801\30639162 7
7.2 Third Party Litigation Concerning Agreement. OWNER shall defend, at its
expense, including attorneys' fees, indemnify, and hold harmless CITY, its agents, officers and
employees from any claim, action or proceeding against CITY, its agents, officers, or employees
to attack, set aside, void, or annul the approval of this Agreement or the approval of any permit
granted pursuant to this Agreement.CITY shall promptly notify OWNER of any such claim,action
or proceeding,and CITY shall cooperate in the defense. If CITY fails to promptly notify OWNER
of any such claim, action or proceeding, or if CITY fails to cooperate in the defense, OWNER
shall not thereafter be responsible to defend, indemnify, or hold harmless CITY. CITY may in its
discretion participate in the defense of any such claim, action or proceeding.
7.3 Indemnity. In addition to the provisions of Sections 7.2 and 7.4, and any other
indemnity provided for herein„ OWNER shall indemnify and hold CITY, its officers, agents,
employees and independent contractors free and harmless from any liability whatsoever, based or
asserted upon any act or omission of OWNER, its officers, agents, employees, subcontractors and
independent contractors, for property damage, bodily injury, or death (OWNER's employees
included)or any other element of damage of any kind or nature,relating to or in any way connected
with or arising from the activities contemplated hereunder, including, but not limited to,the study,
design,engineering,construction,completion,failure and conveyance of the public improvements,
save and except claims for damages arising through the sole active negligence or sole willful
misconduct of CITY. OWNER shall defend, at its expense, including attorneys' fees, CITY, its
officers, agents, employees and independent contractors in any legal action based upon such
alleged acts or omissions. CITY may in its discretion participate in the defense of any such legal
action.
7.4 Environment Assurances. OWNER shall indemnify and hold CITY, its officers,
agents, and employees free and harmless from any liability, based or asserted, upon any act or
omission of OWNER, its officers, agents, employees, subcontractors, predecessors in interest,
successors,assigns and independent contractors for any violation of any federal, state or local law,
ordinance or regulation relating to industrial hygiene or to environmental conditions on, under or
about the Property, including, but not limited to, soil and groundwater conditions, and OWNER
shall defend, at its expense, including attorneys' fees, CITY, its officers, agents and employees in
any action based or asserted upon any such alleged act or omission. CITY may in its discretion
participate in the defense of any such action.
7.5 Reservation of Rights. With respect to Sections 7.2,7.3,and 7.4,CITY reserves the
right to either (1) approve the attorney(s) which OWNER selects, hires or otherwise engages to
defend CITY hereunder, which approval shall not be unreasonably withheld, or (2) conduct its
own defense, provided, however, that OWNER shall reimburse CITY forthwith for any and all
reasonable expenses incurred for such defense, including attorneys' fees, upon billing and
accounting therefor.
7.6 Survival. The provisions of this Section 7 shall survive the termination of this
Agreement.
8. MORTGAGEE PROTECTION.
18
24347 00801\30639162.7
The Parties hereto agree that this Agreement shall not prevent or limit OWNER, in any
manner, at OWNER's sole discretion, from encumbering the Property or any portion thereof or
any improvement thereon by any mortgage, deed of trust or other security device securing
financing with respect to the Property. CITY acknowledges that the lenders providing such
financing may require certain Agreement interpretations and modifications and agrees upon
request, from time to time, to meet with OWNER and representatives of such lenders to negotiate
in good faith any such request for interpretation or modification. CITY will not unreasonably
withhold its consent to any such requested interpretation or modification provided such
interpretation or modification is consistent with the intent and purposes of this Agreement. Any
Mortgagee of the Property shall be entitled to the following rights and privileges:
8.1 Neither entering into this Agreement nor a breach of this Agreement shall defeat,
render invalid,diminish or impair the lien of any mortgage on the Property made in good faith and
for value, unless otherwise required by law.
8.2 The Mortgagee of any mortgage or deed of trust encumbering the Property, or any
part thereof, which Mortgagee, has submitted a request in writing to the CITY in the manner
specified herein for giving notices, shall be entitled to receive written notification from CITY of
any default by OWNER in the performance of OWNER's obligations under this Agreement.
8.3 If CITY timely receives a request from a mortgagee requesting a copy of any notice
of default given to OWNER under the terms of this Agreement, CITY shall provide a copy of that
notice to the Mortgagee within ten (10) days of sending the notice of default to OWNER. The
Mortgagee shall have the right,but not the obligation,to cure the default during the remaining cure
period allowed such party under this Agreement.
8.4 Any Mortgagee who comes into possession of the Property, or any part thereof,
pursuant to foreclosure of the mortgage or deed of trust, or deed in lieu of such foreclosure, shall
take the Property, or part thereof, subject to the terms of this Agreement. Notwithstanding any
other provision of this Agreement to the contrary, no Mortgagee shall have an obligation or duty
under this Agreement to perform any of OWNER's obligations or other affirmative covenants of
OWNER hereunder, or to guarantee such performance; provided, however, that to the extent that
any covenant to be performed by OWNER is a condition precedent to the performance of a
covenant by CITY , the performance thereof shall continue to be a condition precedent to CITY's
performance hereunder, and further provided that any sale, transfer or assignment by any
Mortgagee in possession shall be subject to the provisions of Section 2.4 of this Agreement.
9. MISCELLANEOUS PROVISIONS.
9.1 Recordation of Agreement. This Agreement and any amendment or cancellation
thereof shall be recorded with the County Recorder by the City Clerk within the period required
by Section 65868.5 of the Government Code.
9.2 Entire Agreement. This Agreement sets forth and contains the entire understanding
and agreement of the parties, and there are no oral or written representations, understandings or
ancillary covenants, undertakings or agreements which are not contained or expressly referred to
herein. No testimony or evidence of any such representations, understandings or covenants shall
19
24347.00801\30639162.7
be admissible in any proceeding of any kind or nature to interpret or determine the terms or
conditions of this Agreement.
9.3 Severability. If any term, provision, covenant or condition of this Agreement shall
be determined invalid,void or unenforceable,the remainder of this Agreement shall not be affected
thereby to the extent such remaining provisions are not rendered impractical to perform taking into
consideration the purposes of this Agreement.Notwithstanding the foregoing,the provision of the
Public Benefits set forth in Section 4 of this Agreement, including the payment of the fees set forth
therein, are essential elements of this Agreement and CITY would not have entered into this
Agreement but for such provisions, and therefore in the event such provisions are determined to
be invalid,void or unenforceable,this entire Agreement shall be null and void and of no force and
effect whatsoever.
9.4 No Discrimination or Segregation. OWNER covenants by and for itself, himself
or herself, its, his or her heirs, executors, administrators, and assigns, and all Persons claiming
under or through it, him or her, and this Agreement is made and accepted upon and subject to the
following conditions:
9.4.1 Standards. That there shall be no discrimination against or segregation of
any Person or group of Persons, on account of any basis listed in subdivision (a) or(d)of Section
12955 of the Government Code,as those bases are defined in Sections 12926, 12926.1,subdivision
(m)and paragraph(1)of subdivision(p)of Section 12955,and Section 12955.2 of the Government
Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the Property
nor shall the OWNER, itself, himself or herself, or any Person claiming under or through it, him
or her, establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use, or occupancy, of tenants, lessees, subtenants,
sublessees, or vendees in the Property.
9.4.2 Covenant Running With Land. The provisions of this Section 9.4 shall
be a covenant running with the land of the Property and binding on all successive owners and users
of the Property.
9.5 Interpretation and Governing Law. This Agreement and any dispute arising
hereunder shall be governed and interpreted in accordance with the laws of the State of California.
This Agreement shall be construed as a whole according to its fair language and common meaning
to achieve the objectives and purposes of the parties hereto, and the rule of construction to the
effect that ambiguities are to be resolved against the drafting party shall not be employed in
interpreting this Agreement, all parties having been represented by counsel in the negotiation and
preparation hereof.
9.6 Section Headings. All section headings and subheadings are inserted for
convenience only and shall not affect any construction or interpretation of this Agreement.
9.7 Singular and Plural. As used herein,the singular of any word includes the plural.
9.8 Joint and Several Obligations. If at any time during the term of this Agreement the
Property is owned, in whole or in part, by more than one OWNER, all obligations of such
20
24347.00801\30639162.7
OWNERS under this Agreement shall be joint and several, and the default of any such OWNER
shall be the default of all such OWNERS.Notwithstanding the foregoing, no OWNER of a single
lot which has been finally subdivided and sold to such OWNER as a member of the general public
or otherwise as an ultimate user shall have any obligation under this Agreement except as provided
under Section 4.
9.9 Time of Essence. Time is of the essence in the performance of .the provisions of
this Agreement as to which time is an element.
9.10 Waiver. Failure by a party to insist upon the strict performance of any of the
provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon
the default of the other party,shall not constitute a waiver of such party's right to insist and demand
strict compliance by the other party with the terms of this Agreement thereafter.
9.11 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 shall have
any right of action based upon any provision of this Agreement.
9.12 Force Majeure.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 by floods, earthquakes,
other Acts of God,fires,wars,riots or similar hostilities,strikes and other labor difficulties beyond
the party's control, (including the party's employment force), government regulations, court
actions (such as restraining orders or injunctions), or other causes beyond the party's control. If
any such events shall occur, the term of this Agreement and the time for performance by either
party of any of its obligations hereunder may be extended by the written agreement of the parties
for the period of time that such events prevented such performance, provided that the term of this
Agreement shall not be extended under any circumstances for more than five(5) years.
9.13 Mutual Covenants. The covenants contained herein are mutual covenants and also
constitute conditions to the concurrent or subsequent performance by the party benefited thereby
of the covenants to be performed hereunder by such benefited party.
9.14 Successors in Interest. The burdens of this Agreement shall be binding upon, and
the benefits of this Agreement shall inure to, all successors in interest to the parties to this
Agreement. All provisions of this Agreement shall be enforceable as equitable servitudes and
constitute covenants running with the land. Each covenant to do or refrain from doing some act
hereunder with regard to development of the Property: (a) is for the benefit of and is a burden upon
every portion of the Property; (b) runs with the Property and each portion thereof; and, (c) is
binding upon each party and each successor in interest during ownership of the Property or any
portion thereof.
9.15 Counterparts. This Agreement may be executed by the parties in counterparts,
which counterparts shall be construed together and have the same effect as if all of the parties had
executed the same instrument.
9.16 Jurisdiction and Venue.Any action at law or in equity arising under this Agreement
or brought by a party hereto for the purpose of enforcing, construing or determining the validity
21
24347 00801\30639162.7
of any provision of this Agreement shall be filed and tried in the Superior Court of the County of
Los Angeles, State of California, and the parties hereto waive all provisions of law providing for
the filing, removal or change of venue to any other court.
9.17 Project as a Private Undertaking. It is specifically understood and agreed by and
between the parties hereto that the development of the Project is a private development,that neither
party is acting as the agent of the other in any respect hereunder, and that each party is an
independent contracting entity with respect to the terms, covenants and conditions contained in
this Agreement. No partnership,joint venture or other association of any kind is formed by this
Agreement. The only relationship between CITY and OWNER is that of a government entity
regulating the development of private property and the owner of such property.
9.18 Further Actions and Instruments. Each of the parties shall cooperate with and
provide reasonable assistance to the other to the extent contemplated hereunder in the performance
of all obligations under this Agreement and the satisfaction of the conditions of this Agreement.
Upon the request of either party at any time, the other party shall promptly execute, with
acknowledgment or affidavit if reasonably required, and file or record such required instruments
and writings and take any actions as may be reasonably necessary under the terms of this
Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or
consummate the transactions contemplated by this Agreement.
9.19 Eminent Domain. No provision of this Agreement shall be construed to limit or
restrict the exercise by CITY of its power of eminent domain.
9.20 Agent for Service of Process. In the event OWNER is not a resident of the State of
California or it is an association, partnership or joint venture without a member, partner or joint
venturer resident of the State of California, or it is a foreign corporation, then in any such event,
OWNER shall file with the Planning Director,upon its execution of this Agreement,a designation
of a natural person residing in the State of California, giving his or her name, residence and
business addresses,as its agent for the purpose of service of process in any court action arising out
of or based upon this Agreement, and the delivery to such agent of a copy of any process in any
such action shall constitute valid service upon OWNER. If for any reason service of such process
upon such agent is not feasible, then in such event OWNER may be personally served with such
process out of this County and such service shall constitute valid service upon OWNER. OWNER
is amenable to the process so served,submits to the jurisdiction of the Court so obtained and waives
any and all objections and protests thereto. OWNER for itself, assigns and successors hereby
waives the provisions of the Hague Convention (Convention on the Service Abroad of Judicial
and Extra Judicial Documents in Civil or Commercial Matters,20 U.S.T. 361,T.I.A.S.No. 6638).
9.21 Authority to Execute. The person or persons executing this Agreement on behalf of
OWNER warrants and represents that he or she/they have the authority to execute this Agreement
on behalf of his or her/their corporation,partnership or business entity and warrants and represents
that he or she/they has/have the authority to bind OWNER to the performance of its obligations
hereunder.
[signatures on following page]
22
24347.00801\30639162 7
SIGNATURE PAGE
TO
DEVELOPMENT AGREEMENT
NO. DA 19-01
IN WITNESS WHEREOF,the parties hereto have executed this Development Agreement
on the last day and year set forth below.
CITY OWNER
CITY OF ARCADIA, a California municipal NORTHEAST DEVELOPMENT
corporation ENTERPRISES II, a California limited
liability company
By:
April Verlato By:
Mayor
Its:
Dated:
Dated:
Attest:
By:
Gene Glasco
City Clerk
Approved as to legal form:
Best Best&Krieger LLP
By:
23
24347.00801\30639162.7