HomeMy WebLinkAboutStaff Report 4.D 09/19/2005CITY OF PETALUMA, CALIFORNIA
City Council/Petaluma Community Developmet
AGENDA BILL
Agenda Title: Theater District Proieet: Discussion and Action by
the PCDC Adopting A Resolution Approving the First Amendment
to an Owner Participation Agreement with Basin Street Properties
Involving the PCDC Financing of Public Improvements In the
Downtown Theater District and Authorizing Additional Project
Funding; and Discussion and Action by City Council Adopting a
Resolution Authorizing Additional Project Funding for the Theater
r
September 19, 2005
Meetine Date: September 19, 2005
Meetine Time: 3:00 PM
District Project.
Category: ❑ Consent Calendar ❑ Public Hearing ® New Business
❑ Unfinished Business ❑ Presentation
Department: Director: Contact Person: Phone Number:
ED & Redevelopment Paul Marangella Michael Bierman 778-4345
Public Works Vince Marengo Vince Marengo 778-4303
Cost of Proposal: $1.629 Million (net) Account Number: 3300-C200703
Amount Budeeted: $0
Attachments to Agenda Packet Item:
Name of Fund: CBD Project Fund
1. PCDC Resolution Approving the First Amendment to an Owner Participation Agreement With
Basin Street Properties and Authorizing Additional Project Funding
2. City Council Resolution Authorizing Additional Project Funding from Water Resources &
Conservation Funds.
3. Owner Participation Agreement with Basin Street Properties
4. Theater District and D Street Underground Utility Project Budgets
Summary Statement: In May 2003, the City of Petaluma received a development application from Basin
Street Properties to undertake a "Theatre District Project," redeveloping the downtown area south of B
Street, east of Petaluma Boulevard, west of the Petaluma River, and north of D Street. The application also
included the redevelopment of the west side of l't Street, south of D Street. The proposed development
was consistent with the recently adopted Central Petaluma Specific Plan (CPSP).
After several months of discussion, City officials and Basin Street Properties determined that without the
assistance of the Petaluma Community Development Commission (PCDC) in funding public infrastructure
and improvements, the project would not be financially feasible. It was further determined that the
proposed project would eliminate a significant amount of blight, consistent with the objectives of the
PCDC's Central Business District (CBD) Redevelopment Plan. The project would provide a substantial
benefit to the CBD Redevelopment Project Area by adding significant increase in property tax increment,
enhancing the retail vitality of the area, and creating a vibrant 24-hour use of the downtown core.
Within this context, the City of Petaluma and the PCDC entered into a Development Agreement (DA) and
Owner Participation Agreement (OPA) with Basin Street Properties. The agreements provide for the
orderly phased development of the properties in accordance with the objectives established in the General
Plan, the CBD Redevelopment Project Area Plan, and the CPSP. Moreover, the agreements eliminate
uncertainty in planning for and securing orderly development for the project and provide PCDC financing
for public infrastructure within the project.
Summary Statement (continued)
The first phase of the project is essentially complete. However, during the construction, numerous
unforeseen conditions were discovered, including toxic substances, elevation/grading issues, and buried
impediments. These unforeseen conditions have driven up the cost of the project, including the public
improvements to be undertaken by Basin Street Properties. According to the terms of the OPA, when
unforeseen costs are incurred for public improvements, the PCDC and Basin Street Properties are to
negotiate an amendment authorizing the financing of these costs. City staff and Basin Street Properties
have met to negotiate and are recommending the first amendment to the OPA which would allocate an
additional $4.8 million of which $3.1 million is anticipated to be reimbursed by property owners.
Therefore, the purpose of this item is to adopt a resolution approving the First Amendment to an Owner
Participation Agreement with Basin Street Properties and authorize additional project funding,
Recommended PCDC/City Council Actions/Suggested Motion:
It is recommended that the PCDC and City Council adopt resolutions approving the First Amendment to
the Owner Participation Agreement with Basin -a treet Pro erties and authorize additional project funding.
Reviewed by Administrative Revie�ved[lty Attorney: APell v City Manager:
Svcs:- `((��'��i —{ j`[ te: � Date:
- -4 Date: 7 I
Today's Date: Revision # and Date Revised: File Code:
September 9, 2005 # Revised OPA Amendment 091505/citymer/ke
Y
CITY OF PETALUMA, CALIFORNIA
SEPTEMBER 19, 2005
AGENDA REPORT
FOR
THEATER DISTRICT PROJECT: DISCUSSION AND ACTION BY THE PCDC ADOPTING A RESOLUTION
APPROVING THE FIRST AMENDMENT TO AN OWNER PARTICIPATION AGREEMENT WITH BASIN
STREET PROPERTIES INVOLVING "ITIE PCDC FINANCING OF PUBLIC IMPROVEMENTS IN THE
DOWNTOWN THEATER DISTRICT AND AUTHORIZING ADDITIONAL. PROJECT FUNDING; AND
DISCUSSION AND ACTION BY CITY COUNCIL ADOPTING A RESOLUTION AUTHORIZING ADDITIONAL
PROJECT FUNDING FOR THE THEATER DISTRICT PROJECT.
I. EXECUTR'E SUMMARY:
In May 2003, the City of Petaluma received a development application from
Basin Street Properties to undertake a "Theatre District Project," redeveloping the
downtown area south of B Street, east of Petaluma Boulevard, west of the
Petaluma River, and north of D Street. The application also included the
redevelopment of the west side of 1" Street, south of D Street. The proposed
development was consistent with the recently adopted Central Petaluma Specific
Plan (CPSP).
After several months of discussion, City officials and Basin Street Properties
determined that without the assistance of the Petaluma Community Development
Commission (PCDC) in funding public infrastructure and improvements, the
project would not be financially feasible. It was further determined that the
proposed project would eliminate a significant amount of blight, consistent with
the objectives of the PCDC's Central Business District (CBD) Redevelopment
Plan. The project would provide a substantial benefit to the CBD Redevelopment
Project Area by adding significant increase in property tax increment, enhancing
the retail vitality of the area, and creating a vibrant 24-hour use of the downtown
core.
Within this context, the City of Petaluma and the PCDC entered into a
Development Agreement (DA) and Owner Participation Agreement (OPA) with
Basin Street Properties. The agreements provide for the orderly phased
development of the properties in accordance with the objectives established in the
General Plan, the CBD Redevelopment Project Area Plan, and the CPSP.
Moreover, the agreements eliminate uncertainty in planning for and securing
orderly development for the project and provide PCDC financing for public
infrastructure within the project,
The first phase of the project is essentially complete. However, during the
construction, numerous unforeseen conditions were discovered, including toxic
substances, elevation/grading issues, and buried impediments. These unforeseen
conditions have driven up the cost of the project, including the public
improvements to be undertaken by Basin Street Properties. According to the
terms of the OPA, when unforeseen costs are incurred for public improvements,
the PCDC and Basin Street Properties are to negotiate an amendment authorizing
the financing of these costs. City staff and Basin Street Properties have met to
negotiate and are recommending the first amendment to the OPA which would
allocate an additional $4.8 million of which $3.1 million is anticipated to be
reimbursed by property owners.
Therefore, the purpose of this item is to adopt resolutions approving the First
Amendment to an Owner Participation Agreement with Basin Street Properties
and authorize additional project funding.
2. Backeround:
The attached First Amendment to the Owner Participation Agreement between the
PCDC and Basin Street Properties, Inc., provides for additional financing as
described in this staff report. It does not alter the responsibilities of each of the
parties under which the Petaluma Theater District Project continues to be
developed. The City will be responsible for rehabilitating the street system
(streets, curb, gutter, sidewalk), installing new underground utility infrastructure
where necessary, and installing the improvements outlined in the City of Petaluma
Streetscape Master Plan. Basin Street Properties is responsible for constructing
the project components outlined below.
Proiect Components
• Cinema Project: The design, development and construction on the Cinema
Parcel of a twelve screen cinema complex developed in an "Art Decd'
architectural style;
• Office Project: The design, development and construction on the Office
Parcel of a 50,000 square foot 3 -story office building;
• Parking Garage: The design, development and construction on the Garage
Parcel of a parking garage containing at least 530 off-street parking spaces in
four levels of parking over 30,000 square feet of ground floor commercial
space (216 parking spaces are available to the public);
• Mixed Use Project: The design, development and construction on the Mixed
Use Parcel of a mixed use project consisting of 46,000 square feet of ground
floor commercial space and 78 residential units in two buildings forming an
interior courtyard;
• Apartment Project: The design, development and construction on the
Apartment Parcel of a one -hundred eleven unit apartment complex; and
• Site Improvements: The design, development and installation of related
landscaping and site improvements.
3.
Proiect Phasing
According to the Owner Participation Agreement, the project will be developed in
phases, as follows:
Phase A: Cinema and Parking Garage
1. Estimated Commencement Date: November 15, 2003
2. Estimated Completion Date: November 15, 2004
3. Actual Completion Date: May 2005
Phase B: Riverfrout Office Building
1. Estimated Commencement Date: May 1, 2004
2. Estimated Completion Date: May 1, 2005
3. Actual Completion Date: May 2005
Phase C: Riverfront Residential Apartments
1. Estimated Commencement Date: May 1, 2004
2. Estimated Completion Date: November 1, 2005
3. Revised Estimated Completion Date: June 2006
Phase D: Residential/retail buildings on Petaluma Boulevard
1. Estimated Commencement Date: April 1, 2005
2. Estimated Completion Date: December 1, 2006
The only PCDC assistance for this project is the financing of the construction and
reconstruction of public improvements in the City right-of-ways. The PCDC is
providing no financial assistance whatsoever for the privately developed portions
of this project.
FINANCIAL IMPACTS:
Public Improvement Development Costs
The following will summarize the most current project budget authorization by
the PCDC and the additional project costs. (Refer to Attachment 4 for approved
budgets totaling $13,615,000.)
• Total Revised Estimated CII' Project Costs $17,100,665
■ Revenue Currently on Hand (All Funds) ($11,010,000)
• Revenue Originally Budgeted From Special Taxing District ($ 2.605.000)
Total Gap $ 3,485,665
Cause of Additional Project Costs
During the underground utility phase of construction, the following unanticipated
additional costs were incurred:
• Unforeseen Hazardous Materials/Toxics
• Buried Obstructions & Quantity Increases
Total
Participation in Closing the Funding Gap
• Basin Street Properties - Toxics
■ Water Resources — Toxics
• PCDC added Funding - Other Expenses
■ Added to Special Taxing District - Other Expenses
• Other Property Owners — Toxics
Total Gap Funding
Need to Advance Funds to Complete the Project
$1,939,475
$1,546,190
$3,485,665
$ 704,481
$ 583,536
$ 1,046,190
$ 500,000
$ 651,458
$ 3,485,665
In order to continue work on the project, it is necessary for the PCDC to fund
the cash not readily available totaling $3,756,458 for which PCDC will seek
reimbursement from property owners / gas stations for toxics and from a
special taxing district. The advance requirements are as follows:
Recoverable Revenue Requiring Cash Advance
o Other Property Owners / Gas Companies: $ 651,458
a Special Taxing District: Budgeted,
Not Established $2,605,000
o Special Taxing District — Additional S 500,000
Subtotal: $3,756,458
Therefore, the total cash required from PCDC to resume work on the project
is:
Cash Required from PCDC to Immediately Resume Work on Project
o PCDC Additional Funding $1,046,190
o Recoverable Revenue Requiring Cash Advance $3,756,458
Subtotal: $4,802,648
I
Method of Providing Cash Flow
Assuming that the responsible property owners approve its formation, it is
anticipated that the establishment of a special taxing district can be completed by
June 2006. The recovery of funding for toxic materials could take up to two
years, depending upon property -owner cooperation. Therefore, the following
method for advancing funds is based upon the likely timetable for receiving
repayment.
• Reprogram CIP for Turning Basin Improvements
to finance the Theater District added construction costs:
$1,000,000
■ Delay Phase IV Depot Improvements, except design
and administration, until Taxing District is established
$ 897,648
■ Delay Downtown Streetscape Phase H, except design
and administration, until Taxing District is established:
$2,230,000
■ Allocate Undesignated Cash Balance Until Taxing
District is established:
$ 675,000
Total:
$4,802,648
Summary of Added Public Financing to Complete Project
To complete the project, $4.8 million is immediately needed. Of this amount, it is
assumed that all but $1,629,726 will be repaid by property owners. In other
words, in amending the OPA, the City is agreeing to advance $4.8 million in
anticipation of being repaid $3,167,922. The unreimbursed public funding is as
follows:
• PCDC: $1,046,190
• WR&C: $ 583,536
Total: $1,629,726
Property Tax Increment
The overall project development cost is estimated at $80,000,000. This is in
addition to Basin Street Landing, with an estimated value of $20,000,000.
As a result of these projects, an additional annual property tax increment in
excess of $500,000 is anticipated. This revenue can be used to generate bonds to
$5,000,000.
The anticipated $500,000 would pay off the project cost increase of $1.629
million within 3-1/2 years.
4. CONCLUSION:
The City of Petaluma and Basin Street Properties have partnered in the
implementation of the Petaluma Theater District Project, thereby redeveloping
and revitalizing a significant portion of the Central Business District. Without
this partnership, the project area would have remained blighted and underutilized.
The amendment to the Owner Participation Agreement will provide the financing
necessary for economic transformation to occur.
$. OUTCOMES OR PERFORMANCE MEASUREMENTS THAT WILL IDENTIFY
SUCCESS OR COMPLETION:
Adoption of resolutions authorizing the First Amendment to the Owner
Participation Agreement and authorizing additional project funding will allow
construction to be completed in 2006.
6. RECOMMENDATION:
It is recommended that the PCDC and City Council adopt resolutions approving the
First Amendment to the Owner Participation Agreement with Basin Street
Properties and authorizing additional project funding.
I
ATTACHMENT
RESOLUTION # 2005-
PETALUMA COMMUNITY DEVELOPMENT COMMISSION
A RESOLUTION OF THE CITY OF PETALUMA COMMUNITY
DEVELOPMENT COMMISSION APPROVING THE FIRST AMENDMENT TO
AN OWNER PARTICIPATION AGREEMENT WITH BASIN STREET
PROPERTIES AND AUTHORIZING ADDITIONAL PROJECT FUNDING
WHEREAS, the Petaluma Community Development Commission has reviewed and
considered the amendment to the Owner Participation Agreement (OPA), attached hereto as
Exhibit 1, and
WHEREAS, completion of the project described in the Agreement is in the public interest
and is consistent with the Petaluma General Plan, the Central Petaluma Specific Plan, the Central
Business District Redevelopment Plan, and is in compliance with Article 19.3 of the Petaluma
Zoning Ordinance; and
WHEREAS, the Petaluma Community Development Commission further finds, with
respect to the attached amendment and the public improvements described therein:
• It is compatible with the land uses authorized in, and the regulations prescribed
for, the zone in which the real property is located.
• It will be of benefit to the public health, safety and general welfare.
• It will promote the orderly development of property or the preservation of
property values in accordance with good land use practice.
It will eliminate blight in the Central Business District Redevelopment Project
Area.
• It will substantially benefit the Central Business District Redevelopment Project
Area, increasing property tax increment and property values, enhancing the
economic vitality of the area and creating a vibrant 24-hour use of the downtown
;K4TIM
• Without the amendment, the project would be financially infeasible; and
WHEREAS, it may be necessary to undertake negotiation and legal action to recover the
project costs of removing, mitigating, and handling contaminated materials attributable to
properties that were the source of the contamination; and
WHEREAS, additional funding from PCDC and Water Resources & Conservation
Funds is necessary to complete the public improvement components of the project.
NOW, THEREFORE, BE IT RESOLVED that the Petaluma Community
Development Commission hereby:
2.
3.
11
Approves the First Amendment to an Owner Participation Agreement with Basin Street
Properties, provided in Exhibit 1, and authorizes the Executive Director to execute the
amendment substantially in the form provided.
Authorizes the Executive Director to negotiate and undertake legal action as necessary to
recover the project costs of removing, mitigating, and handling contaminated materials
attributable to Theater District properties that were the source of the contamination.
Authorizes the City Manager to transfer $583,536 from Water Resources & Conservation
Funds to pay the City's share for handling and removing contaminated materials in the
Theater District Project (C200703).
Authorizes the Executive Director to:
• Reprogram the CIP for Turning Basin Improvements (C200403)
and transfer funds to finance the Theater District (C200703)
for added construction costs:
■ Delay Phase IV Depot Improvements (C200303),
except design and Admin, until Taxing District is established:
• Delay Downtown Streetscape Phase II (C200603), except
design and admin, until Taxing District is established:
■ Allocate Undesignated Cash Balance Until Taxing
District is established:
Total:
$1,000,000
$ 897,648
$2,230,000
$ 675.000
$4,802,648
�0
5. Authorizes the Executive Director to:
• Advance $651,458 in PCDC funds to finance the cost of toxic remediation pending
recovery of funds from responsible property owners.
■ Advance $3,105,000 to finance public improvement costs pending formation of a
special taxing district.
• Expend $1,046,190 from PCDC fimds for the additional cost of public improvements
in the Theater District Project (C200703).
Adopted this 19th day of September 2005 by the following vote:
Commissioner Ave No Absent,
Glass
Canevaro
Barris
Healy
Nan
O'Brien
Torliatt
David Glass, Chairperson
ATTEST:
Claire Cooper, Recording Secretary
1*46,1101161
FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT WITH
BASIN STREET PROPERTIES
THIS FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT (this
"Amendment") is entered into effective as of , 2005 ("Effective Date") by
and between the Petaluma Community Development Commission ("Agency") and Basin Street
Properties, a California corporation ("Participant"). Agency and Participant are hereinafter
collectively referred to as the "Parties." Capitalized terms used herein without definition shall
have the meaning ascribed to such terms in the Owner Participation Agreement (defined below).
RECITALS
A. The Agency and Participant entered into that certain Owner Participation Agreement
dated as of February 27, 2004 (the "Owner Participation Agreement") which addresses the
development of both public and private improvements on certain property located within the
Central Business District Redevelopment Project Area in the City of Petaluma.
B. Section 2.6.8 of the Owner Participation Agreement provides that the Agency's
maximum payment to Participant for the Public Improvements to be constructed and installed as
part of the Project shall not exceed $4.8 million; provided however, among other exceptions,
Participant shall not be required to pay for costs associated with the inspection, analysis,
removal, remediation, monitoring or any other work concerning unforeseen conditions under the
surface of the real property owned by the City of Petaluma, including but not limited to
hazardous materials, archaeological resources, unknown utilities, unknown construction debris,
or similar conditions.
C. Section 2.6.8 of the Owner Participation Agreement further provides that if the
aforementioned costs would make the total cost of the Public Improvements exceed the
Agency's maximum amount, then the Participant and the City shall meet to determine whether
the City will pay for such costs notwithstanding the established maximum amount, whether the
1�
scope of the Public Improvements will be modified to offset the increased cost, or whether some
other course of action will be followed.
D. Exhibit E of the Owner Participation Agreement states that the total cost of the Public
Improvements is estimated to be $7,550,000, and provides that in addition to the $4,800,000
Agency payment described in Recital B, the Agency will also pay $2,750,000 to cover the City's
share of the cost of the Public Improvements.
E. Over the past two fiscal years, the PCDC and City Council have augmented funding for
the Project in both the annual budget process and during the mid -year budget review. To this
end, funding for the project has been augmented to $13,615,000. More recently, during the
course of Project construction, a number of unforeseen conditions have arisen or have been
discovered, including the presence of toxic and hazardous substances, issues related to elevation
and grading, and buried impediments. The Parties have determined that as a result of such
conditions, additional Project costs must be incurred in the amount of approximately $1,939,475
for remediation of hazardous materials, and approximately $1,546,190 for buried obstructions
and quantity increases. The Parties have determined that completion of the Project will not be
feasible without an additional Agency contribution to the cost of the Public Improvements.
F. The Parties acknowledge that the Agency may attempt to recoup a portion of the
Agency's additional contribution to the cost of the Public Improvements via implementation of a
special taxing district pursuant to which Participant or its successors in interest may be subject to
additional taxes.
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which
are hereby acknowledged, the Parties agree as follows.
1. The first sentence of Section 2.6.8 of the Owner Participation Agreement is hereby
amended to read as follows:
Notwithstanding anything to the contrary contained herein, Agency's
maximum payment to Participant for the construction and installation of
the Public Improvements shall not exceed $16,396,184 ($17,100,665
less $704,481).
2. The following sentence is hereby added to Section 2.6.8 of the Owner Participation
Agreement:
The sum specified in the first sentence of this Section as the maximum
Agency Payment is equal to the $4,800,000 Agency contribution
specified in the original Owner Participation Agreement, plus
$2,750,000 for City related costs as provided in Exhibit E of the OPA,
plus $6,065,000 in authorized budget adjustments in FYs 2003-04
through FY 2005-06, plus $3,485,665 in new costs as specified in
Recital E of the First Amendment to Owner Participation Agreement,
less $704,481, which is the estimated share of such new costs that is
allocable to, and which shall be paid by Participant.
All other terms and conditions of the Owner Participation Agreement shall remain
unchanged and in full force and effect.
4. If any provision of this Amendment is held by a court of competent jurisdiction to be
invalid, void or unenforceable, the remainder of the provisions shall continue in full force
and effect.
5. This Amendment may be executed in counterparts, each of which shall be an original and
all of which together shall be deemed to be one instrument.
�r
IN WITNESS WHEREOF. the Parties have executed this Amendment effective as of the date
first written above.
AGENCY
PETALUMA COMMUNITY DEVELOPMENT COMMISSION
BY:
Title:
ATTEST:
Recording Secretary
APPROVED AS TO FORM:
Agency Counsel
PARTICIPANT
BASIN STREET PROPERTIES, a California Corporation
m -
Matthew T. White
Title: President
ATTACHMENT 2
A RESOLUTION OF THE CITY COUNCIL AUTHORIZING
ADDITIONAL PROJECT FUNDING FOR THE
THEATER DISTRICT PROJECT
WHEREAS, the Petaluma City Council has reviewed and considered the First
Amendment to the Owner Participation Agreement (OPA) between the Petaluma Community
Development Commission and Basin Street Properties, Inc., and
WHEREAS, completion of the project described in the agreement is in the public
interest and is consistent with the Petaluma General Plan, the Central Petaluma Specific Plan, the
Central Business District Redevelopment Plan, and is in compliance with Article 19.3 of the
Petaluma Zoning Ordinance; and
WHEREAS, the Petaluma City Council further confirms the findings of the Petaluma
Community Development Commission, with respect to Amendment and the public
improvements described therein:
• It is compatible with the land uses authorized in, and the regulations prescribed
for, the zone in which the real property is located.
• It will be of benefit to the public health, safety and general welfare.
• It will promote the orderly development of property or the preservation of
property values in accordance with good land use practice.
• It will eliminate blight in the Central Business District Redevelopment Project
Area.
• It will substantially benefit the Central Business District Redevelopment Project
Area, increasing property tax increment and property values, enhancing the
economic vitality of the area and creating a vibrant 24-hour use of the downtown
Left4i
• Without the amendment, the project would be financially infeasible; and
�1
WHEREAS, additional funding from Water Resources & Conservation Funds is necessary
to complete the public improvement components of the project.
NOW, THEREFORE, BE IT RESOLVED that the Petaluma City Council hereby
authorizes the City Manager to transfer $583,536 from Water Resources & Conservation Funds
to pay the City's share for handling and removing contaminated materials in the Theater District
Project (C200703) and approves the reallocation and expenditure of funds set forth in PCDC
Resolution adopted on September 19, 2005.
I
Attachment 3
OWNER PARTICIPATION AGREEMENT
by and behveen
THE PETALUMA COMMUNITY DEVELOPMENT COIbI'MISSION
and
BASIN STREET PROPERTIES
I
THIS OWNER PARTICIPATION AGREEMENT ("Agreement") dated as of
a� +-e—�,'r((2004 ("Effective Date") is entered into by and between the
Petaluma Communi�Development Commission ("Agency") and Basin Street
Properties, a California corporation ("Participant"). Agency and Participant are
hereinafter collectively referred to as the "Parties." Capitalized terms used herein shall
have the definitions set forth in Article I or as otherwise set forth herein.
RECITALS
A. The purpose of this Agreement is to effectuate the Redevelopment Plan
for the Central Business District Redevelopment Project Area by providing for the
redevelopment of the Property. Completion of the Project and the Improvements
pursuant to the terms and conditions hereof is in the best interests of City and Agency and
the health, safety and welfare of the residents and the taxpayers of the Project Area and
the City, and is in accord with the public purposes and provisions of applicable state and
local laws.
B. By Resolution No.2158 N.C.S. adopted August 4, 2003, the City has
adopted an ordinance ("Theater District Ordinance") which (i) establishes a theater
district in the City's central business district, and (ii) prohibits the construction of movie
theaters outside the boundaries of the Theater District (as defined in the Ordinance).
C. A material inducement to Agency to enter into this Agreement is the
agreement by Participant to develop the Property and the Improvements within the
periods of time specified herein and in accordance with the provisions hereof, and the
Agency would be unwilling to enter into this Agreement in the absence of an enforceable
commitment by Participant to complete the Project and the Improvements in accordance
with such provisions and within such time periods.
D. Construction of the Improvements and completion of the Project will
assist in the elimination of blight in the Project Area, provide additional jobs, improve
safety in the Project Area and substantially improve the economic and physical
conditions in the Project Area in accordance with the purposes and goals of the
Redevelopment Plan.
E. The Agency has determined that this Agreement fulfills the requirements
of the California Community Redevelopment Law and the Agency's rules governing
participation by property owners, and that this Agreement, including without limitation,
the provisions hereof relating to construction of the Improvements and development of
the Property are consistent with the provisions of the Redevelopment Plan and each of its
applicable elements.
F. Participant is the owner in fee or has the contractual right to obtain fee
ownership of the Property, which is located within the Project Area.
2/18/2004 2 A0
G. On May 21, 2003, by Resolution No. 2001-103 N.C.S., the Agency
certified an Environmental hnpact Report ("EIR") for the Redevelopment Plan, and on
June 2, 2003, by Resolution No. 2003-103, the City Council certified an EIR for the
Specific Plan. By resolution 2003-09, adopted on July 14, 2003, the Agency certified a
Negative Declaration for the Project. By resolution 2003-140 N.C.S., adopted on July
14, 2003, the City Council certified aNegative Declaration for the Project. Agency and
City have approved development of the Project, conditioned upon Participant's
compliance with certain conditions of approval ("Conditions of Approval") which are
set forth in Exhibit C attached hereto.
H. The City of Petaluma and Participant are entering into a Development
Agreement relative to the development of this Project. It is the intention of the Parties
hereto that the Development Agreement and this OPA be administered in a manner
consistent with each other.
NOW, THEREFORE, in consideration of the mutual covenants contained herein
and good and valuable consideration the receipt and sufficiency of which are hereby
acknowledged, the Parties agree as follows.
ARTICLE I: DEFINITIONS.
Section 1. Definitions.
1.1 "Development Agreement" mcans that certain development agreement
pertaining to the Project entered into by City and Participant.
1.2 Reserved.
1.3 "City" means the City of Petaluma, California, a municipal corporation.
1.4 "Certificate of Completion" is defined in Section 3.5 hereof.
1.5 "Community Redevelopment Law" means California Health and Safety
Code, Section 33000.et seq.
1.6 "Conditions of Approval" means those conditions of approval for the Project
adopted by City and set forth in the Development Agreement.
L7 "Construction Plans" is defined in Section 3.2 hereof.
1.8 "Effective Date" means the date first written above, which shall be the date
upon which this Agreement is approved by the Agency.
1.9 "Environmental Law" means any federal, state or local statute, ordinance,
rule, regulation, order, consent decree, judgment or common law doctrine, and
2/18/2004 3 p
provisions and conditions of permits, licenses and other operating
authorizations regulating, or relating to or imposing liability or standards of
conduct concerning (i) pollution or protection of the environment, including
natural resources; (ii) exposure of persons, including employees and agents, to
Hazardous Materials or other products, raw materials, chemicals or other
substances; (iii) protection of the public health or welfare from the effects of
by-products, wastes, emissions, discharges or releases of chemical substances
or Hazardous Materials from industrial or commercial activities; or (iv)
regulation of the manufacture, use or introduction into commerce of chemical
substances, including without limitation, their manufacture, formulation,
labeling, distribution, transportation, handling, storage and disposal.
1.10 "Hazardous Materials" means any substance, material or waste which is or
becomes regulated or otherwise subject to liability, response obligations or
standards of conduct under any Environmental Law, and includes without
limitation (i) petroleum or oil or gas or any direct or indirect product or by-
product thereof; (ii) asbestos and any material containing asbestos; (iii) any
substance, material or waste regulated by, listed (directly or by reference) as a
"hazardous substance," "hazardous material," "hazardous waste," "toxic
waste," "pollutant," "toxic pollutant," or "toxic substances" in, or similarly
identified as hazardous to human health or the environment in or pursuant to
(A) the Comprehensive Environmental Response, Compensation and Liability
Act, 42 U.S.C. Section 9601, et seq., (B) the Hazardous Materials
Transportation Act, 49 U.S.C. Section 5101, et seq., (C) the Resource
Conservation and Recovery Act, 42 U.S.C. 6901, et seq., (D) the Clean Water
Act, 33 U.S.C. Section 1251, et seq., (E) the Water Pollution Control Act, 33
U.S.C. Section 1317, (F) the Clean Air Act, 42 U.S.C. Section 7901, et seq.,
or (G) applicable state or local law; (iv) any substance, material or waste
which is defined as such or regulated by any "Superfand" or "Superlien" law
or any Environmental Law; or (v) any other hazardous or toxic substance,
material, chemical, waste or pollutant identified as hazardous or toxic and
regulated under any other federal, state or local environmental laws, including
without limitation, asbestos, polychlorinated biphenyls, petroleum, natural gas
and synthetic fuel products and byproducts.
1.11 Reserved.
1.12 "Improvements" means collectively the portion of the Public Improvements
to be constructed on the Property and the structures to be constructed on the
Property pursuant to the Master Plan and the Conditions of Approval.
1.13 "Master Plan" means Participant's master plan for development of the
Project, as approved by the Agency and City by approval of the Development
Agreement. The plans comprising the Master Plan are listed in Exhibit D.
2/18/2004 4 It �.
1.14 "Participant" means Basin Street Properties, a California corporation, and its
successors and assigns as approved and permitted pursuant to Article V
hereof. The term "Participant' as used herein shall not include City or
Agency should either become Participant's successor, assignee or transferee
of the Property, the Project, or any portion thereoC.
1.15 "Project" means the development of the Property and the design,
development and installation of the Improvements as described in Section 222
hereof and the Conditions of Approval.
1.16 "Property" means the real property more particularly described in Exhibit A
attached hereto. The Property consists of:
• Parcel A, the Theater Parcel;
• Parcel B, the Mixed Use Theater Square;
• Parcel C, the Parking Garage;
• Parcel D, the Waterfront Office Building; and
• Parcel E, the River Row Apartments; each as described in Exhibit
A and depicted on Exhibit B.
1.17 "Project Area" means the Central Business District Redevelopment Project
Area established by the Redevelopment Plan.
"Public Improvements" means the improvements described in Exhibit E
attached hereto.
1.19 "Redevelopment Plan" means the Redevelopment Plan for the Central
Business District Redevelopment Project adopted by the Agency and the City
by Ordinance No. 1221 on September 27, 1976, as amended on November 21,
1994 by Ordinance No. 1973, and by Ordinance No. 2092 on July 21, 1999.
1.20 "Schedule of Development" means the timing for the completion of
construction of the Project as set forth in Section 2.4 and Exhibit F.
1.21 "Specific Plan" means the Central Petaluma Specific Plan, adopted on
June 2, 2003 by City Council Resolution 2003-103,
1.22 Reserved.
ARTICLE I1: DEVELOPMENT OF THE PROPERTY
Section 2.1 The Pronertv.
Participant hereby represents, warrants and covenants that it has the unconditional
right and option to acquire the Property and that it shall become the fee owner of the
Property within thirty (30) days following the Effective Date. If Participant does not
2/18/2004 5,��
become the fee owner of the entire Property within such time, Agency shall have the right
to terminate this Agreement upon written notice to Participant.
Section 2.2 Scone of Develonment.
The Project consists of the following, all to be undertaken on the Property in
accordance with the Master Plan and the Conditions of Approval:
(i) Parcel A (Theater): the design, development and of a twelve screen cinema
complex developed in an "Art Deco" architectural style ("Cinema Project");
(ii) Parcel B (Theater Square): the design, development and construction of a
mixed use project ("Mixed Used Theater Square Project') consisting of 46,000
square feet of ground floor commercial space and 78 residential units in two
buildings forming an interior courtyard;
(iii) Parcel C (Parking Garage): the design, development and construction of a
parking garage containing approximately 530 off-street parking spaces in four
levels of parking over 30,000 square feet of ground floor commercial space
("Parking Garage Project");
(iv) Parcel D (Waterfront Office Building): the design, development and
construction of a 50,000 square foot 3 -story office building ("Waterfront Office
Building Project');
(v) Parcel E (River Row Apartments): the design, development and construction
of a one hundred eleven unit apartment complex (the "River Row Apartment
Projecf' ; and
(vi) Landscaping and Site Improvements: the design, development and installation
of related landscaping and site improvements.
Section 2.2.1 Public Use of Garage.
Provided that Agency pays in full the cost of the Public Improvements that
Agency is obligated to pay to Participant pursuant to Section 2.8 and Exhibit E hereof,
Participant shall grant to Agency and City an irrevocable, nonexclusive easement for
twenty (20) years providing for use by the public of no fewer than 216 parking spaces in
the Parking Garage and for public right of way and pedestrian and vehicular ingress,
egress and access on, over and across all portions of the Parking Garage except those
portions which Participant designates for exclusive use by commercial and residential tenants
of the Project and their respective employees and invitees. Such easement shall be
memorialized in an agreement ("Easement and Operating Agreement") substantially in
the form attached hereto as Exhibit H. The Easement and Operating Agreement shall be
recorded in the official records of Sonoma County and shall provide for all of the
following: (i) Participant may designate up to 143 parking spaces in the Parking Garage
for the exclusive use of residential occupants of the Project; (ii) Participant may issue up
to 171 stickers to allow commercial tenants of the Project or other project of Participant
or it's affiliates all -day parking privileges in the Parking Garage; (iii) the Parking Garage
shall operate and be available for use by the public seven (7) days per week from 6:00
a.m. to 2:00 a.m.; (iv) Participant shall, at Participant's expense, ensure that the Parking
Garage is at all times maintained in good condition and shall perform all necessary
2/18/2004 6
repairs and maintenance; (v) Participant shall be solely responsible for payment of all
taxes, assessments, insurance, employee and contractor expenses necessary for the
operation, maintenance and security of the Parking Garage.
Section 2.2.2 Housine Affordabilitv Covenants.
Participant acknowledges that the law provides that (i) not less than 15% of the
housing units developed as part of the Project shall be available for occupancy at an
Affordable Housing Cost or an Affordable Rent, as applicable, by persons and families of
Low or Moderate -Income, and (ii) of that number, not less than 40% (i.e., 6% of the
housing units developed as part of the Project) shall be available for occupancy at
Affordable Housing Cost or Affordable Rent by Very Low -Income Households. Agency
and Participant agree that the affordable housing requirements are more efficiently
satisfied through payment of an in lieu few equal to $2,400.00 per dwelling unit.
Participant shall pay such fee upon issuance of building permits.
Section 2.3 ADoroval Process.
Participant acknowledges and agrees that execution of this Agreement by Agency
does not constitute approval for the purpose of the issuance of building permits for the
construction of the Project, does not limit in any manner the discretion of City in such
approval process, and does not relieve Participant from the obligation to obtain all
necessary approvals and permits for the construction of the Project, including without
limitation, the approval of architectural plans, the issuance of any certificates regarding
historic resources required in connection with the Project, and the issuance of building
permits.
Participant shall be solely responsible for, and shall promptly pay when due, all
customary and reasonable fees and charges of City in connection with obtaining building
permits and other approvals for the Project, including without limitation, those related to
the processing and consideration of amendments, if any, to the current entitlements, any
related approvals and permits, architectural review, historic review, and any subsequent
approvals for the Project or the development of the Property.
Participant covenants that it shall: (i) prior to issuance of building permits for the
Project, obtain all necessary permits and approvals which may be required by Agency,
City, or any other governmental agency having jurisdiction over the construction of the
Project or the development of the Property, (ii) comply with all Conditions of Approval
and other conditions which maybe imposed by City in connection with the grant of
permits or approvals for the Project, and (iii) not commence any construction of the
Project prior to issuance of building permits related thereto.
Section 2.4 Time for Comnletion of Construction.
Participant shall commence construction of the fust phase of the Project no later
than sixty (60) days from expiration of administrative appeals and legal challenges under
2/18/2004 7 `^
CEQA, shall develop the Project in accordance with the schedule attached hereto in
Exhibit F and shall complete construction of the Project no later than the termination of
this Agreement, unless the terms of any written agreement with City, or the Conditions of
Approval, require an earlier or later commencement or completion date, in which case
commencement or completion of the Project shall be in accordance with such written
agreement or Condition of Approval. If Participant fails to commence or complete the
Project in accordance with the foregoing, Agency shall have the right, at its option, to
terminate this Agreement. Notwithstanding anything to the contrary contained in this
Agreement, Agency shall have no obligation to fund the Public Improvements associated
with Phase A (as described in Exhibit F) until Developer has commenced construction of
the Cinema.
Section 2.5. Cost of Construction.
Except for the cost of the Public Improvements (which shall be paid by the
Agency in accordance with Section 2.6), all costs of (i) site preparation, demolition,
designing, rehabilitation, developing and constructing the Project, and (ii) compliance
with the Conditions of Approval and any other requirements imposed in connection with
any subsequent approvals for the development of the Project shall be home solely by
Participant and shall not be an obligation of the Agency or City.
Section 2.6 Public Improvements.
2.6.1 Construction Pursuant to Scheduled Cost and Phasine Schedule.
Participant shall construct and install the Public Improvements described in Exhibit E
attached hereto in accordance with the schedule set forth therein. The Agency shall
design and prepare the plans and specifications for such Public Improvements and shall
pay for the cost of their construction and installation in accordance with the schedule of
costs set forth in Exhibit E and pursuant to the procedures set forth in Section 2.6.7.
upon Agency's receipt of Participant's written request for disbursement of funds
specifying the amount and use of the requested funds, accompanied by copies of bills and
invoices from third parties for the costs incurred and such other documentation as
Agency may reasonably require, and upon Agency's inspection and approval of the work
covered by such disbursement request.
2.6.2 Plans and Snecifications: Permits. Agency has obtained or shall
obtain final approval of the plans and specifications for the Public Improvements from all
appropriate City departments and all other agencies having jurisdiction over such matters.
Participant shall, prior to the commencement of construction of the Public Improvements,
obtain all approvals, licenses, permits or similar authorizations necessary for the
construction or installation of the Public Improvements from City, Agency and all other
agencies having jurisdiction over such matters. Following final approval of the plans
and specifications, neither Agency nor City shall require any changes to the plans and
specifications or to the Public Improvements (including without limitation the scope or
design thereof); provided, however, that if during the course of construction of the Public
Improvements, public interest requires a modification of or a departure from the
2/18/2004 8
previously approved plans and specifications (such as in the case of the discovery of
unknown field conditions), City and Agency shall have the authority to require such
modifications or departure and to specify the manner in which the same is to be made.
2.6.3 Standards of Construction. Participant shall cause the construction
of the Public Improvements to be in compliance with all applicable state or local laws
and regulations. Participant shall cause the Public Improvements to be performed in
accordance with the City provided plans and specifications and the permits and approvals
issued by the City. In the event of any conflict between the prior two sentences, the latter
shall control.
2.6.4 Contracts: Change Orders. Participant shall submit all contracts
related to the construction of the Public Improvements, together with the plans and
specifications therefor, to the City Engineer or his or her designee for review and
approval of the cost, quantity and quality of work. Participant shall have the right, and
upon written request of City or Agency, shall be required to submit to the City Engineer
for review and approval all change orders to any contract (together with applicable plans
and specifications) which would (i) change the scope of the work to be performed under
such contract, (ii) provide for the use of materials different than those identified in the
specifications previously approved by City, or (iii) increase the cost of the work to he
performed under such contract,. The City Engineer shall provide to Participant a written
approval or denial of the contract or change order (identifying the reasons therefor)
within five (5) days after receipt by the City Engineer of the contract or requested change
order, which approval shall not be unreasonably withheld. The City Engineer's decision
approving or denying a contract or change order shall be final provided the procedural
requirements set forth in this Agreement have been followed. If any contract or change
order is not approved by the City Engineer within such five (5) day period it shall be
deemed to be rejected.
2.6.5 Bonds. Prior to commencement of construction of the Public
Improvements, Participant shall cause the performance of the Public Improvements to be
protected by labor and materials and performance bonds, and posted by the contractor or,
if no "wrap" bond is provided at such level, by each of the additional contractors. The
parties agree that the costs of such bonds shall be borne by the construction funds for the
Public Improvements. Participant shall cause the Agency to be named as a co -obligee on
the bonds and deliver copies to the Agency. Such bonds shall be issued by a reputable
insurance company licensed to do business in California, and shall be in a form and
content reasonably satisfactory to Agency, and shall be in the following amounts:
A. A corporate surety bond to secure performance and
guarantee the work in the amount of one hundred percent (100°/x) of the cost of
construction and installation of the Public Improvements. With this security, contractor
or contractors working under the management of Participant shall guarantee completion
of the Public Improvements and guarantees the Public Improvements against defective
workmanship or materials and unsatisfactory performance for a period of one year
2/18/2004 9 \
following the completion of the Public Improvements and the acceptance thereof by
Agency.
B. A corporate surety bond in the amount of one hundred
percent (100%) to guarantee payment to the subcontractors, and persons renting
equipment or finuishing labor or material to the contractor, contractors, subcontractors or
Participant in connection with construction and installation of the Public Improvements.
2.6.5.1 Guarantv And Warranty. During the period twelve (12)
months following the final completion date, Participant shall be available, as needed, to
assist City or Agency to cause the contractors, subcontractors and suppliers to honor their
warranty responsibilities as provided for in the contract documents in a timely manner
and to resolve any Public Improvement related claims and, when requested by City or
Agency, review and monitor warranty work. In connection therewith, Participant shall
ensure that the warranties run in favor of the City, or shall enforce such warranties for the
benefit of the City as necessary.
2.6.5.2 No Waiver By Aeencv. Acceptance of the whole or any
part of the Public Improvements or payment therefor, shall not relieve the Participant of
its obligation to fulfill this Agreement as prescribed; nor shall the Agency thereby be
estopped from bringing any action for damages arising from Participant's failure to
comply with any of the terms and conditions hereof.
2.6.6 Inspection: Accentance: Convevance to Citv.
2.6.6.1 Inspection: Compliance with Reeulations. Prior to City's
acceptance of any Public Improvement, the Public Improvement shall be subject to
inspection by the City Engineer. In addition, prior to City's acceptance of any Public
Improvement, Participant shall provide City with: (a) as -built drawings or similar plans
and specifications in a form complying with applicable City requirements; (b) either (i)
conditional lien releases from the contractor performing the work with respect to the
Public Improvement in the form required by California Civil Code Section 3262, or (ii)
evidence satisfactory to the City Engineer that all costs of constructing the Public
Improvement have been fully paid by Participant; and (c) all maintenance bonds,
warranties, guaranties or other evidence of contingent obligations of third parties relating
to the Public Improvement and any assignment thereof (with the assignments to become
effective as of the date City accepts the Public Improvement).
2.6.6.2 Acceptance. When fully completed, each Public
Improvement shall be accepted by City in accordance with applicable City policy
promptly following City's receipt of all required documentation, provided that the City
Engineer has inspected and approved such Public Improvement. Documentation
evidencing Participant's offer of dedication or transfer of any Public Improvement to City
in a form reasonably acceptable to City, together with the documentation described in
Section 2.6.6.1. shall be delivered to the City Engineer prior to City's acceptance of the
Public Improvement. No Public Improvement shall be accepted unless it is ready for use
by City or the public, based on applicable City standards relating to construction of
2/18/2004 10 �b
public improvements. Participant shall rely upon the City provided plans and
specifications and ongoing inspections to meet the standard for acceptance. Upon
acceptance of a Public Improvement, Agency shall pay any balance payable for the
Public Improvement pursuant to Exhibit E provided that the Public Improvement has
been constructed in compliance with the approved plans and specifications. Neither
Agency, City nor any other public agency shall accept liability or responsibility for any
Public Improvement, or the maintenance thereof, until City has accepted the Public
Improvement pursuant to this Section.
2.6.7 Payments.
(a) Proeress Pavments. During the construction of the Public
Improvements, Participant shall be entitled to request and receive from Agency progress
payments as the work is completed as forecast in the schedule listed in Exhibit E.
(b) Documentation. Any payment request submitted by Participant shall
be properly executed and shall include all supporting documentation required by the
terns of this Agreement or reasonably requested by the City Engineer.
(c) Review of Pavment Request. The City Engineer shall review each
payment request and inform Participant in writing within ten (10) business days after
receipt thereof, of the reasons, if any, for the denial of all or any portion of the request. If
not accepted within such ten (10) days, the payment request shall be deemed rejected.
Participant shall have the right to challenge the denial by submitting further
documentation and/or to resubmit the payment request within thirty (30) days after
receipt of the denial. A resubmittal shall not be deemed a new payment request. The
City Manager shall review any resubmitted payment request and shall inform Participant
of his or her approval or denial within ten (10) business days after receipt of the
resubmission.
(d) Payment. The Agency shall pay to Participant the amount of any
approved payment request within thirty (30) days after its approval pursuant to this
Section. Notwithstanding the foregoing, Agency shall not be required to pay the amount
requested in any payment request for which a Notice of Completion is required pursuant
to Section 2.6.7(e) until either (i) thirty-five (35) days have elapsed since Participant has
filed such Notice of Completion, or (ii) the contractor performing the work has provided
lien releases in form acceptable to the City Attorney, or such contractor or the Participant
has provided City and Agency with an indemnity agreement in form acceptable to the
City Attorney indemnifying City and Agency against the claims of subcontractors or
material suppliers resulting from their nonpayment or alleged nonpayment.
(e) Notice of Completion. With respect to any Public Improvement, or
portion thereof, as to which no other work is to be performed under the contract pursuant
to which it was constructed, Participant shall prepare and execute a Notice of Completion
in form acceptable to the City Engineer as to each of the Public Improvements to be
acquired and shall record such notice in the Official Records of Sonoma County. No
Notice of Completion shall be required to be filed for a Public Improvement, or portion
211 UNN
thereof, unless there is no other work to be performed under the contract pursuant to
which it was constructed
2.6.8. Maximum Aeencv Pavment. Notwithstanding anything to the
contrary contained herein, Agency's maximum payment to Participant for the
construction and installation of the Public Improvements shall not exceed $4.8 million.
Notwithstanding the foregoing or any other provision of this Agreement, the Participant
shall not be required to pay for any costs (a) arising during the course of construction
from changes required by the City or Agency pursuant to Section 2.6.2, (b) associated
with the inspection, analysis, removal, remediation, monitoring or any other work
concerning unforeseen conditions under the surface of the real property owned by the
City, including but not limited to hazardous materials, archaeological resources, unknown
utilities, unknown construction debris, or similar conditions, or (c) in excess of the
maximum amount if the initial low, qualified bid for the Public Improvements exceeds
the maximum amount. If any such costs would make the total cost of the Public
Improvements exceed the Agency's maximum amount, then the Participant and the City
shall meet to determine whether the City will pay for such costs notwithstanding the
established maximum amount, whether the scope of the Public Improvements will be
modified to offset the increased cost, or whether some other course of action will be
followed.
2.6.9. Transfer of Ownership of Public Imp_ rovements. Participant shall
convey the Public Improvements to the City as follows:
(a) Real Property. For any Public Improvement constructed on real
property owned by Participant and to be transferred to City, following Participant's
submission of all documentation necessary for City's acceptance of the Public Improvement,
Participant shall convey the real property to City by recordation of an instrument in a form
acceptable to City, free and clear of all monetary encumbrances (except property taxes and
governmental assessments not yet accrued). Prior to such conveyance, Participant shall
maintain the Public Improvement in good and safe condition and repair.
(b) Public Improvements Constructed on Land Owned by City. If a Public
Improvement is constructed on real property to which City holds fee title or easement rights,
Participant hereby is granted a license to enter the real property for purposes related to the
construction and maintenance (prior to acquisition by City hereunder) of the Public
Improvement. Upon completion of construction of the Public Improvement, City shall
accept and acquire the Public Improvement from Participant in accordance with the
provisions of Sections 2.6.6.
(c) Personal Prooerty. If any Public Improvement is comprised of or
includes personal property, transfer of the personal property by Participant to City shall be
accomplished by a bill of sale after acceptance by the City in accordance with Section 2.6.6.
2.6. 10 Audit. The City Engineer or his or her designee shall have the right,
upon reasonable prior notice and during normal business hours, to review Participant's books
2/18/2004
12 YJ
and records pertaining to costs and expenses incurred by Participant in constructing any of
the Public Improvements.
Section 2.7 Convevance of Certain Land to Participant,
The Agency agrees to acquire from the City that certain strip of land described in
Exhibit G, and to convey the same to the Participant at no cost to the Participant. Such
land is a portion of the parcel upon which the Petaluma Fire Station is currently located,
is not necessary for the proper functioning of the fire station, and will allow the
Participant to construct a larger parking garage and thereby provide additional panting
available to the public. The Agency shall convey the strip of land to the Participant within
thirty (30) days following the Effective Date by means of a lot line adjustment or
otherwise, subject to a right of reversion in favor of the Agency if the Participant has not
completed construction of the Garage Project within five (5) years following the
Effective Date.
Section 2.8 Vacation of Certain Streets.
The Agency agrees, if requested by Participant, to work with City in a good faith
effort to vacate (pursuant to existing City requirements) and convey to the Participant, at
no cost to the Participant, the public streets (or such portions thereof as may be specified
by the Participant) identified in the Master Plan as being intended for vacation and/or
abandonment. Upon such vacation and/or abandonment to the Participant, such public
streets shall become part of the Property, and this Agreement shall thereupon
automatically apply thereto.
Section 2.9 Rights of Access.
In addition to those rights of access to and across the Property to which the
Agency and City may be entitled by law, employees or agents of the Agency or City shall
have the right of access to the Property without charge or fee, at any reasonable time, to
inspect the work being performed at the Property. The Agency or City shall give the
Participant notice of its intent to so enter a reasonable period of time in advance of such entry
(except in the case of an emergency, in which case notice shall not be required). In exercising
its right of entry, the Agency shall use its best efforts to minimize interference with the
operations or other activities of the Participant.
Section 2.10 Compliance with Laws.
Participant shall carry out the construction of the Project in conformity with all
applicable local, state and federal laws and regulations, including all applicable local,
state and federal occupational, safety, health and labor standards.
ARTICLE III: CONSTRUCTION OF PROJECT AND IMPROVEMENTS
Section 3.1 Construction Pursuant to Plans.
2/isn004 13
Unless modified by operation of Section 3.2 of this Article, all construction of the
Project and the Improvements shall be done in accordance with the Construction Plans,
the Conditions of Approval, and any other plans or development approvals issued by the
Agency or City with respect to the Project or the development of the Property.
Section 3.2 Construction Plans.
As used herein "Construction Plans" mean all construction documents upon
which Participant shall rely in building the Project, including but not limited to those
related to landscaping, parking, and public areas, and including final architectural
drawings, landscaping, exterior lighting and signage plans and specifications,
descriptions of materials to be used, final elevations, and building plans and
specifications. The Construction Plans shall be based upon the plans or development
approvals issued by the Agency or City with respect to the Project or the development of
the Property, and shall not materially deviate therefrom without the express written
consent of Agency and City.
Section 3.3 Chance in Construction Plans.
If Participant desires to make any material change in the approved Construction
Plans, Participant shall submit the proposed change in writing to the Agency and City for
their written approval, which approval shall not be unreasonably withheld or delayed. If
the Construction Plans, as modified by any proposed change, conform to the
requirements of this Agreement and any plans or development approvals issued by
Agency or City after the Effective Date, Agency and City, as applicable, shall approve
the change by notifying Participant in writing. Unless such proposed change is approved
by Agency or City within thirty (30) days, it shall be deemed rejected. If rejected, the
previously approved Construction Plans shall continue to remain in full force and effect.
Any change in the Constriction Plans required in order to comply with applicable
codes shall be deemed approved, so long as such change does not substantially nor
materially change the architecture, design, function, use, or amenities of the Project as
shown on the latest approved Construction Plans.
Section 3.4 Proeress of Construction.
Participant shall commence the construction of the Project pursuant to the
Schedule of Development. During construction of the Project, Participant shall submit to
the Agency from time to time, within ten days following the Agency's request therefor,
but not more frequently than monthly, a written report of the progress of the construction
when and as requested by the Agency. The report shall be in such form and detail as to
inform the Agency fully of the status of construction.
Until construction of the Project has been completed, Participant authorizes the
Agency to have full access to all building inspection reports and other information at the
City to assist the Agency in reviewing the actual progress of construction. Participant
2118/_004 14
shall allow the Agency to review construction documents and records maintained by
Participant in the ordinary course of the construction as may be reasonably requested by
the Agency.
Section 3.5 Certificate of ComDletion for Proiect.
Promptly after completion of construction of the Project and the Improvements in
accordance with the provisions of this Agreement and upon issuance of a Certificate of
Occupancy by the City and written request of Participant, the Agency will provide an
instrument ("Certificate of Completion") so certifying, provided that, at the time such
certificate is issued, all components of the Project (or phase thereof), including the Public
Improvements, have been completed. Such Certificate of Completion shall be
conclusive determination that Participant has satisfied its obligations regarding the
development of the Property (or phase thereof). Without limiting the foregoing, the
Participant may obtain a separate Certificate of Completion with respect to each of the
five phases of the Project (i.e., the development of the Cinema Parcel, the Garage Parcel,
the Office Parcel, the Mixed Use Parcel and the Apartment Parcel) as such phases are
completed.
The Certificate of Completion shall be in such form as will enable it to be
recorded among the official records of Sonoma County, California. The Certificate of
Completion shall not constitute evidence of compliance with or satisfaction of any
obligation of Participant to any holder of a deed of trust or mortgage securing money
loaned to finance the Proj ect or any part thereof and shall not be deemed a notice of
completion under the California Civil Code.
Section 3.6 ImDlementafion of Mitigation Measures and Conditions of
Approval.
In carrying out the construction of the Project, it shall be the sole responsibility of
Participant to implement, at its sole cost and expense, all Conditions of Approval.
Participant acknowledges that additional conditions of approval or mitigation and
monitoring measures may be imposed as part of subsequent project approvals by the
Agency or City and agrees that such additional conditions of approval and/or mitigation
and monitoring measures shall govern development of the Property and shall be
implemented by Participant.
Section 3.7 Ecual ODDortunity.
During the construction of the Project, Participant shall not discriminate on the
basis of race, color, religion, creed, sex, marital status, ancestry or national origin in the
hiring, firing, promoting or demoting of any person engaged in the construction work and
shall direct its contractors and subcontractors to refrain from discrimination on such
basis.
Section 3.8 Prevailing Wage Requirements.
2/18/2004 15 b
J
To the extent applicable to the Project, Participant and its subcontractors and
agents, shall comply with California Labor Code Section 1720 et seq. and regulations
adopted pursuant thereto ("Prevailing Wage Laws") and shall be responsible for carrying
out the requirements of such provisions.
The Public Improvements to be constructed by Participant under this Agreement
shall be subject to the provisions of the Prevailing Wage Laws to the same extent as if
City had awarded the contract for the construction of the Public Improvements.
Participant shall, and hereby agrees to, unconditionally indemnify, reimburse,
defend, protect and hold harmless Agency, City and their respective elective and
appointive boards, commissions, officers, agents, attorneys, consultants and employees,
and their respective successors and assigns, from and against any and all claims,
demands, suits and actions at law or in equity, and losses, liabilities, expenses, penalties,
fines, orders, judgments, injunctive or other relief, and costs and damages of every kind,
nature and description (including but not limited to attorneys' fees and court costs, with
counsel reasonably acceptable to Agency and City), and administrative, enforcement or
judicial proceedings, whether known or unknown, and which directly or indirectly, in
whole or in part, are caused by, arise from, or relate to, or are alleged to be caused by,
arise from, or relate to, the payment or requirement of payment of prevailing wages or the
requirement of competitive bidding in the construction of the Project, the failure to
comply with any state or federal labor laws, regulations or standards in connection with
this Agreement, including but not limited to the Prevailing Wage Laws, or any act or
omission of Agency, City or Participant related to this Agreement with respect to the
payment or requirement of payment of prevailing wages or the requirement of
competitive bidding, whether or not any insurance policies shall have been determined to
be applicable to any such claims, demands, suits, actions, losses, liabilities, expenses,
penalties, fines, orders, judgments, injunctive or other relief, costs, damages, or
administrative, enforcement or judicial proceedings. It is further agreed that Agency and
City do not, and shall not, waive any rights against Participant which they may have by
reason of this indemnity and hold harmless agreement because of the acceptance by
Agency or City, or Participant's deposit with Agency of any of the insurance policies
described in this Agreement.
ARTICLE IV: USE OF THE PROPERTY
Section 4.1 Uses.
Participant covenants and agrees that Participant shall comply with all provisions
of the Redevelopment Plan and shall use the Property solely for purposes authorized in
the Specific Plan, the Redevelopment Plan, the Master Plan and the Conditions of
Approval. Participant shall comply with all mitigation measures set forth in the
Conditions of Approval.
2/18/2004
Section 4.2 Oblieation to Refrain from Discrimination.
VA
3q
Participant shall not restrict the rental, sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Property, or any portion thereof, on the basis of
race, color, religion, creed, sex, marital status, ancestry, or national original of any
person. Participant covenants for itself and all persons claiming under or through it, and
this Agreement is made and accepted upon and subject to the conditions that there shall
be no discrimination against or segregation of any person or of a group of persons on
account of race, color, religion, creed, sex, marital status, ancestry, or national origin in
the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the Property,
or any portion thereof, nor shall Participant or any person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants, lessees,
sublessees, subtenants, or vendees in the property herein transferred. The foregoing
provisions shall run with the land, be binding upon any subcontracting parties,
successors, assigns and other transferees under this Agreement and shall remain in effect
in perpetuity.
All deeds, leases or contracts for the sale, lease, sublease, or other transfer of the
Property, or any portion thereof made or entered into by Participant, its successors or
assigns, shall contain therein the following language:
2/18/2004
(a) In Deeds:
"The grantee herein covenants by and for itself, its successors and assigns, and all
persons claiming under or through it, that there shall be no discrimination against
or segregation of any person or group of persons on account of race, color,
religion, creed, sex, marital status, ancestry, or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the property herein
conveyed, nor shall the grantee or any person claiming under or through it
establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants,
lessees, subtenants, sublessees or vendees in the property herein conveyed. The
foregoing covenants shall run with the land."
(b) In Leases:
"The lessee herein covenants by and for itself and its successors and
assigns, and all persons claiming under or through it, and this lease is
made and accepted upon and subject to the conditions that there shall be
no discrimination against or segregation of any person or of a group of
persons on account of race, color, religion, creed, sex, marital status,
ancestry, or national origin in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the property herein leased nor shall the
lessee or any person claiming under or through it establish or permit any
such practice or practices of discrimination or segregation with reference
to the selection, location, number, use or occupancy of tenants, lessees,
sublessees, subtenants, or vendees in the property herein leased."
17
161,
(c) In Contracts:
"The contractor herein covenants by and for itself and its successors and assigns,
and all persons claiming under or through it, and this contract is made and
accepted upon and subject to the conditions that there shall be no discrimination
against or segregation of any person or of a group of persons on account of race,
color, religion, creed, sex, marital status, ancestry, or national origin in the
leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the
property herein transferred nor shall the contractor or any person claiming under
or through it establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of
tenants, lessees, sublessees, subtenants, or vendees in the property herein
transferred. The foregoing provisions shall be binding upon any subcontracting
Parties, successors, assigns and other transferees under the contract."
Section 4.3 Effect and Duration of Covenants.
Except as may be otherwise provided in this Agreement, all of the terms,
covenants, agreements or conditions set forth in this Agreement shall remain in effect
until the termination of the Redevelopment Plan, except for the provisions of Sections
3.8.4.2. 8.1. 101 and Article VII which shall continue to remain effective
notwithstanding the termination of this Agreement or the Redevelopment Plan.
ARTICLE V: CHANGES IN PARTICIPANT
Section 5.1 ChanEes Only Pursuant to this Aereement.
The qualifications, experience, financial capacity and expertise of Participant are
of particular concern to the Agency. It is because of these qualifications, experience,
financial capacity and expertise that the Agency has entered into this Agreement. No
voluntary or involuntary successor, assignee or transferee of Participant shall acquire any
rights or powers under this Agreement, except as expressly provided herein.
Section 5.2 Transfer by Particinant.
Prior to the issuance by Agency of the Certificate of Completion, Participant shall
not voluntarily or involuntarily make or attempt any total or partial sale, transfer,
conveyance, assignment or lease ("Transfer") of the whole or any part of the Property,
the Improvements, or this Agreement, without the prior written approval of Agency. This
prohibition shall not be deemed to prevent the granting of temporary easements or
permits to facilitate the development, conveyance or dedication of the Property.
After recordation of the Certificate of Completion for the Project, no restriction or
covenant set forth in the Agreement shall affect or prohibit a Transfer except as provided
in this Article V, and no Agency approval shall be needed for a Transfer of the Property
2/18/2004 18 1 W
or right under this Agreement, or any portions thereof. Notwithstanding anything set forth
in this Section, Participant agrees that it shall complywith the Conditions of Approval
and any applicable mitigation and monitoring measures in the operation of any business
on the Property.
If Participant proposes a Transfer, the proposed transferee shall have the
qualifications and financial resources necessary and adequate as may be reasonably
determined by Agency to fulfill the obligations undertaken in this Agreement by
Participant. Participant shall submit to Agency for review all instruments and other legal
documents proposed to effect any such Transfer along with documentation demonstrating
that the proposed successor, assignee or transferee has such qualifications and financial
resources, including but not limited to financial statements of the proposed successor,
assignee or transferee.
Approval of a Transfer by Agency must be in writing. No proposed successor,
assignee or transferee shall become a Participant under this Agreement without such
written approval by Agency. Unless a proposed Transfer is approved by Agency in
writing within 34 days of receipt of written request by Participant, it shall be deemed
rejected. Agency retains final discretionary approval of each proposed Transfer;
provided however, Agency shall not unreasonably withhold approval of the Transfer if
the proposed successor, assignee or transferee has the qualifications and financial
resources necessary and adequate, as reasonably determined by Agency, to fulfill the
terms, conditions, covenants and obligations undertaken in this Agreement by Participant
with respect to the property proposed to be transferred.
All Agency costs, including but not limited to attorneys' fees, in reviewing
instruments and other legal documents proposed to effect a Transfer under this
Agreement and in reviewing the qualifications and financial resources of a proposed
successor, assignee or transferee shall be reimbursed by Participant within ten days
following Agency's delivery to Participant of a detailed invoice for such costs.
Section 5.3 Transferee Subiect to All Conditions of Agreement.
Any transferee of the Property, or portion thereof shall be subject to all of the
Conditions of Approval and covenants and restrictions of this Agreement applicable to
such property. Any such transfer shall be by instrument in writing satisfactory to Agency
and in form recordable among the official records of Sonoma County, and any such
transferee shall expressly assume all of the obligations of Participant under this
Agreement and all related agreements pertaining to the property so transferred and shall
agree to be subject to all of the conditions and restrictions to which Participant is subject.
Section 5.4 Exception to Prohibition Against Transfer.
Participant may at any time, without limitation, and without the necessity of
approval from Agency, make a transfer of the Property or any part thereof, or interest
therein, or rights and obligations under this Agreement, or portion thereof, to: (i) a
2/1812004 19 IA
subsidiary, affiliate, parent or other entity which controls, is controlled by, or is under
common control with Participant, or (ii) a successor or successors to Participant by
merger, consolidation, non -bankruptcy reorganization, or government action, provided
that the liabilities of Participant are assumed by the entity surviving or created by such
merger, consolidation, reorganization or action.
ARTICLE VI: SECURITY FINANCING AND RIGHTS OF HOLDERS
6.1 No Encumbrances Exceot for Development Purooses.
Notwithstanding any other provision of this Agreement, mortgages and deeds of
trust, or any other reasonable method of security (including assignment of leases or
ground leases to a lender as security for a loan), are permitted to be placed upon the
Property or the Improvements before the Certificate of Completion has been issued by
Agency, but only for the purpose of securing loans or funds to be used by Participant for
the development and construction of the Improvements and any other expenditures
reasonably necessary and appropriate to develop the Property under this Agreement.
Participant shall promptly notify Agency of any mortgage, deed of trust, sale and lease-
back or other financing, conveyance, encumbrance or lien that has been or will be created
or attached to the Property or the Improvements. The words "mortgage" and "deed of
trust' as used herein include all other appropriate modes of financing real estate
acquisition, construction, and land development.
6.2 Holder Not Oblisated to Construct.
The holder of any mortgage, deed of trust or other security interest authorized by
this Agreement is not obligated to construct or complete any of the Improvements or to
guarantee such construction or completion. Nothing in this Agreement shall be deemed
to permit or authorize any such holder to devote the Property or any portion thereof to
any uses, or to construct any improvements thereon, other than those uses or
improvements provided for or authorized by this Agreement.
6.3 Notice of Default and Richt to Cure.
Whenever Agency pursuant to its rights set forth in this Agreement delivers any
notice or demand to Participant with respect to the commencement, completion, or
cessation in the construction of the Improvements, Agency shall at the same time deliver
to each holder of record of any mortgage, deed of trust or other security interest
authorized by this Agreement a copy of such notice or demand. Each such holder shall
(insofar as the rights of Agency are concerned) have the right, but not the obligation, at
its option, within ninety (90) days after the receipt of the notice, to cure or remedy any
such default or breach and to add the cost thereof to the security interest debt and the lien
on its security interest. A holder who chooses to exercise its right to cure or remedy a
default or breach shall first notify Agency of its intent to exercise such right prior to
commencing to cure or remedy such default or breach. -Nothing contained in this
Agreement shall be deemed to permit or authorize such holder to undertake or continue
2/18/2004 20 hh
h�
the constriction or completion of the Improvements (beyond the extent necessary to
conserve or protect such Improvements or constriction already made) without first
having expressly assumed in writing Participant's obligations to Agency relating to such
Improvements under this Agreement. The holder in that event must agree to complete, in
the manner provided in this Agreement, the Improvements and submit evidence
reasonably satisfactory to Agency that it has the development capability on staff or
retainer and financial capacity necessary to perform such obligations. Any such holder
properly completing such Improvements pursuant to this paragraph shall assume all
rights and obligations of Participant under this Agreement and shall be entitled, upon
written request made to Agency, to a Certificate of Completion from Agency.
6A Failure of Holder to Complete Improvements,
In any case where, six (6) months after default by Participant in completion of
construction of the Improvements under this Agreement, the holder of record of any
mortgage, deed of trust or other security interest creating a lien or encumbrance upon the
Property or the Improvements, having fust exercised its option to construct, has not
proceeded diligently with construction, Agency shall be afforded those rights against
such holder which it would otherwise have against Participant under this Agreement.
6.5 Right of Agenev to Terminate if Default By Participant of a Mortgage,.
In the event of a default or breach by Participant of a mortgage, deed of trust or
other security instrument prior to issuance of the Certificate of Completion for the
Improvements, and the holder has not exercised its option to complete the Improvements,
Agency may terminate this Agreement by writing.
6.6 Holder to be Notified.
Participant, for itself; its successors and assigns hereby warrants and agrees that
each term contained herein dealing with security financing and rights of holders shall be
either inserted into the relevant deed of trust or mortgage or acknowledged by the holder
prior to its coming into any security right or interest in the Property or the Improvements.
6.7 Modifications to Agreement.
Agency shall not unreasonably withhold its consent to modifications of this
Agreement requested by Participant's lender or lenders provided such modifications do
not alter Agency's substantive rights and obligations under this Agreement.
6.8 EStoppel Certificates
Either Party shall, at any time, and from time to time, within thirty (30) days atter
receipt of written notice from the other Party, execute and deliver to such Party a written
statement certifying that, to the knowledge of the certifying Party: (i) this Agreement is
in full force and effect and a binding obligation of the Parties (if such be the case), (ii)
this Agreement has not been amended or modified either orally or in writing, or if so
2/18/2004 21
t��
amended, identifying the amendments, and (iii) the requesting Party is not in default in
the performance of its obligations under this Agreement, or if in default, describing the
nature and amount of any such defaults.
ARTICLE VII: ENVIRONMENTAL MATTERS
Section 7.1 Hazardous Materials Remediation. Participant shall not hold
Agency or City responsible for the cost of any soil, groundwater or other environmental
remediation or other response activities for any Hazardous Materials existing or
occurring on the Property, or any portion thereof, or any land conveyed to Participant by
Agency pursuant to this Agreement, and Participant shall be solely responsible for all
actions and costs associated with any soil, groundwater or other environmental
remediation or other response activities required for the development of the Project, the
Property, or any portion thereof. Upon receipt of any notice regarding the presence,
release or discharge of Hazardous Materials in, on or under the Property, or any portion
thereof, Participant (as long as Participant owns the property which is the subject of such
notice) shall, and hereby agrees to, timely initiate and diligently pursue and complete all
appropriate response, remediation and removal actions for the presence, release or
discharge of such Hazardous Materials within such deadlines as specified by applicable
Environmental Laws. The provisions of this section and section 7.2 are not applicable to
any real property owned and retained by the City upon which the Public Improvements
are constructed.
Section 7.2 Indemnification.
Participant shall, and hereby agrees to, unconditionally indemnify, reimburse,
defend, protect and hold harmless Agency and City and their elected and appointed
boards, commissions, officers, agents, attorneys, consultants and employees, and all of
their respective successors and assigns, from and against any and all claims, demands,
suits and actions at law or in equity, and losses, liabilities, expenses, penalties, fines,
orders, judgments, injunctive or other relief (whether known or unknown and whether
based on personal injury, property damage, or contamination of, or adverse effects upon,
the environment or natural resources), and costs and damages of every kind, nature and
description (including but not limited to attorneys' fees and court costs, with counsel
reasonably acceptable to Agency and City) and any expenses associated with the
investigation, assessment, monitoring, response, removal, treatment, abatement or
remediation of Hazardous Materials, and administrative, enforcement or judicial
proceedings and which directly or indirectly, in whole or in part, are caused by, arise
from, or relate to, or are alleged to be caused by, arise from, or relate to, the presence,
release or discharge, or alleged presence, release or discharge, of any Hazardous
Materials in, on or under the Property, or any portion thereof, or any land conveyed by
Agency to Participant pursuant to this Agreement, or the failure to comply with any
Environmental Laws, whether or not any insurance policies shall have been determined
to be applicable to any such claims, demands, suits, actions, losses, liabilities, expenses,
penalties, fines, orders, judgments, injunctive or other relief, costs, damages, or
administrative, enforcement or judicial proceedings. It is further agreed that Agency and
2/18/2004 22
0
City do not, and shall not, waive any rights against Participant which they may have by
reason of this indemnity and hold harmless agreement because of the acceptance by
Agency, or the deposit with Agency by Participant, of any of the insurance policies
described in this Agreement.
ARTICLE VIII: RELOCATION
Section 8.1 Relocation Hold Harmless and Indemnitv Agreement.
Participant agrees that it shall have the sole and exclusive responsibility for
providing any relocation assistance and paying any relocation costs associated with the
development of the Property which may be required by applicable federal, state or local
laws, rules and regulations. Participant shall, and hereby agrees to, unconditionally
indemnify, reimburse, defend, protect and hold harmless Agency and City and their
elective and appointive boards, commissions, officers, agents, attorneys, consultants and
employees, and all of their respective successors and assigns, from and against any and
all claims, demands, suits and actions at law or in equity, and losses, liabilities, expenses,
costs and damages of every kind, nature and description (including but not limited to
attorneys' fees and court costs; with counsel reasonably acceptable to Agency and City),
whether known or unknown, and which directly or indirectly, in whole or in part, are
caused by, arise from, or relate to, or are alleged to be caused by, arise from, or relate to,
relocation assistance or benefits or any act or omission of Agency or Participant with
respect to the provision of relocation assistance or benefits in connection with this
Agreement, whether or not any insurance policies shall have been determined to be
applicable to any such claims, demands, suits, actions, losses, liabilities, expenses, costs
or damages. It is fiuther agreed that Agency and City do not, and shall not, waive any
rights against Participant which they may have by reason of this indemnity and hold
harmless agreement because of the acceptance by Agency, or the deposit with Agency by
Participant, of any of the insurance policies described in this Agreement.
ARTICLE IX: DEFAULTS, REMEDIES AND TERMINATION
Section 9.1 Participant's Default.
The following events shall constitute an event of default ("Event of Default") on
the part of Participant.
(a) If Participant shall fail to keep, observe or perform any of its covenants,
duties or obligations under this Agreement and such default shall continue for a period of
thirty (30) days after written notice thereof from Agency to Participant, or in the case of a
default which cannot with due diligence be cured within thirty (30) days, Participant fails
to promptly begin and diligently proceed to cure such default promptly after such notice;
(b) The making by Participant of an assignment for the benefit of creditors, or
filing by Participant of a petition in bankruptcy or of reorganization under any
bankruptcy or insolvency law;
2118/2004 23 ' \
(c) The appointment of a receiver or trustee of the property of Participant which
appointment is not vacated or stayed within ninety (90) days after such appointment; or
(d) The filing of a petition in bankruptcy against Participant or for its
reorganization under any bankruptcy or insolvency law which is not dismissed or staycd
within ninety (90) days after such filing.
Section 9.2 AEencv's Remedies in the Event of Default.
If an Event of Default on the part of Participant shall occur and be continuing
beyond any applicable cure period, then Agency shall have the following rights and
remedies in addition to other rights available to it under law or this Agreement.
(a) Termination. Agency shall have the right to terminate this Agreement. If
Agency makes such election, Agency shall give written notice to Participant and to any
mortgagee entitled to such notice, specifying the Event of Default and stating that this
Agreement shall expire and terminate on the date specified in such notice, which shall be
at least thirty (30) days after the giving of such notice, and upon the date specified in such
notice, this Agreement and all rights of Participant under this Agreement shall expire and
tenninate.
(b) Injunction. Agency shall have the right to seek to restrain, by injunction, the
commission of or attempted or threatened commission of an Event of Default and to
obtain a judgment or order specifically compelling performance of any such term or
provision of this Agreement without, in either case, being required to prove or establish
that Agency does not have an adequate remedy at law. Participant hereby waives the
requirement of any such proof and acknowledges that Agency would not have an
adequate remedy at law for Participant's commission of an Event of Default hereunder if
such Event of Default was voluntary on the part of Participant and could be prevented or
remedied by injunctive relief or specific performance.
(c) Damages. Agency shall be entitled to proceed against Participant for all
direct damages, costs and expenses arising from Participant's commission of an Event of
Default hereunder and to recover all such direct damages, costs and expenses, including
reasonable attorneys' fees,
Section 9.3 Aeencv's Default.
The following events shall constitute an event of default on the part of Agency
("Event of Agency Default"):
If Agency shall fail to keep, observe or perform any of its covenants, duties or
obligations trader this Agreement and such default shall continue for a period of thirty
(30) days after written notice thereof from Participant to Agency, or in the case of a
default which cannot with due diligence be cured within thirty (30) days, Agency fails to
promptly begin and diligently proceed to cure such default promptly after such notice.
2/19/2004 24
Section 9.4 Participant's Remedies in the Event of Aeencv Default.
If an Event of Agency Default shall occur and be continuing beyond any
applicable cure period, then Participant shall have the following rights and remedies in
addition to other rights available to it under law or this Agreement.
(a) Participant shall have the right to restrain, by injunction, the commission of or
attempted or threatened commission of an Event of Agency Default and to obtain a
judgment or order specifically compelling performance of any such term or provision of
this Agreement without, in either case, being required to prove or establish that
Participant does not have an adequate remedy at law. Agency hereby waives the
requirement of any such proof and acknowledges that Participant would not have an
adequate remedy at law for Agency's commission of an Event of Agency Default
hereunder if such Event of Agency Default was voluntary on the part of Agency and
could be prevented or remedied by injunctive relief or specific performance.
(b) Notwithstanding anything to the contrary contained herein, in no event shall
damages be awarded against City or Agency upon the occurrence of an Event of Agency
Default or upon termination of this Agreement.
Section 9.5 Riehts and Remedies are Cumulative.
Except as otherwise expressly stated in this Agreement, the rights and remedies of
the Parties are cumulative, and the exercise by either Party of one or more of such rights
or remedies shall not preclude the exercise by it, at the same or different time, of any
other rights or remedies for the same or any other default by the other Party.
Section 9.6 Inaction Not a Waiver of Default.
No failure or delay by either Party in asserting any of its rights and remedies as to
any default shall not operate as a waiver of such default or of any such rights or remedies,
nor deprive either such Party of its rights to institute and maintain any action or
proceeding which it may deem necessary to protect, assert or enforce any such rights or
remedies in the same or any subsequent default.
Section 9.7 Excuse for Nonnerformance.
Participant and Agency shall be excused from performing any obligation or
undertaking provided in this Agreement, except any obligation to pay any sum of money
under the applicable provisions hereof, in the event and for so long as the performance of
any such obligation is prevented or delayed, retarded or hindered by act of God, fire,
earthquake, flood, explosion, action of the elements, war, invasion, insurrection, riot,
mob violence, sabotage, inability to procure or general shortage of labor, equipment,
facilities, materials or supplies in the open market, failure of transportation, strikes,
lockouts, action of labor unions, condemnation, requisition; laws, orders of governmental,
civil, military or naval authority, or any other cause, whether similar or dissimilar to the
2/18/2004 25 b
foregoing, not within the control of the Party claiming the extension of time to perform.
The Party claiming such extension shall send written notice of the claimed extension to
the other Party within thirty (30) days following the commencement of the cause entitling
the Party to the extension.
ARTICLE X: INDEMNITY AND INSURANCE
Section 10.1 Hold Harmless
Participant hereby shall indemnify, hold harmless and defend Agency and City,
their respective elected and appointed boards, commissions, officers, agents and
employees (collectively, "Indemnified Parties") from and against any or all losses,
expenses, claims, suits, demands, costs (including attorneys' fees and expenses of
litigation), damages and liabilities of every kind (collectively, "Claims"), including
without limitation, Claims arising in connection with any personal injury, death or
property damage, which may arise directly or indirectly as a result of any action or
inaction, error, negligent or wrongful act or omission, breach of warranty, willful
misconduct or fraudulent misrepresentation of Participant's or Participant's contractors,
subcontractors, agents or employees in connection with the construction, improvement,
operation or maintenance of the Project, the Public Improvements, or any part thereof.
Participant shall defend Agency, City, and their elected and appointed boards,
commissions, officers, agents and employees from any suits or actions at law or in equity
for damages caused, or alleged to have been caused, by reason of Participant's
performance of its rights and obligations under this Agreement.
Section 10.2 Liabilitv and Workers Comnensation Insurance.
(a) Participant shall maintain in force during the construction of the Project and
through the issuance of the Certificate of Completion, comprehensive general liability
and property damage insurance, including personal injury, contractual, and owned and
non -owned automobile insurance with such coverage and limits as may be reasonably
requested by Agency and City from time to time, but in no event for less than the sum of
three million dollars ($3,000,000) per occurrence combined single limit. During the term
of this Agreement, Participant shall maintain Worker's Compensation insurance for all
persons employed by Participant for work at the Project site. Participant shall require
each contractor and subcontractor similarly to provide Worker's Compensation insurance
for its respective employees. Participant agrees to indemnify the City and the Agency for
any damage resulting from Participant's failure to maintain or require any such insurance.
(b) Liability insurance policies shall name Agency and City as additional
insureds. An endorsement shall be provided which states the coverage is primary
insurance and that no other insurance held by Agency or City will be called upon to
contribute to a loss under this coverage.
(c) Participant shall furnish to the Agency duplicate originals or certificates
evidencing such insurance coverage or coverages prior to commencement of construction
2/1812004 26 `
(or any work related thereto) on the Property, but in no event later than thirty (30) days
after the Effective Date, and such certificate(s) shall provide that such insurance coverage
will not be canceled or reduced without at least thirty (30) days' prior written notice to
Agency.
(d) If such coverage is canceled or reduced, Participant shall, within fifteen (15)
days after receipt of notice of such cancellation or reduction in coverage, but in no event
later than the effective date of cancellation or reduction, file with Agency and City a
certificate showing that the required insurance has been reinstated or provided through
another insurance company or companies. Upon failure to so file such certificate,
Agency or City may, without further notice and at its option, procure such insurance
coverage at Participant's expense, and Participant shall promptly reimburse Agency or
City for such expense upon receipt of billing from Agency or City.
(e) The insurance policies specified in this Section shall be provided by a
reputable company or companies, licensed to do business in California.
ARTICLE XI: GENERAL PROVISIONS
Section 11.1 Notices.
Except as otherwise specified in this Agreement, all notices to be sent pursuant to
this Agreement shall be made in writing, and sent to the Parties at their respective
addresses specified below or to such other address as a Party may designate by written
notice delivered to the other parties in accordance with this Section. All such notices
shall be sent by:
(i) personal delivery, in which case notice is effective upon delivery;
(ii) certified or registered mail, return receipt requested, in which case
notice shall be deemed delivered on receipt if delivery is confirmed by a return
receipt;
(iii) nationally recognized overnight courier, with charges prepaid or
charged to the sender's account, in which case notice is effective on delivery if
delivery is confirmed by the delivery service;
(iv) facsimile transmission, in which case notice shall be deemed delivered
upon transmittal, provided that (a) a duplicate copy of the notice is promptly
delivered by first-class or certified mail or by overnight delivery, or (b) a
transmission report is generated reflecting the accurate transmission thereof. Any
notice given by facsimile shall be considered to have been received on the next
business day if it is received after, 5:00 p.m. recipient's time or on a nonbusiness
day.
AGENCY: Petaluma Community Development Commission
27 Howard Street
Petaluma. California 94952
2/18/2004 27
Attn: Michael Bierman
Telephone: 707-778-4345
Facsimile: 707-778-4419
With a copy to: Petaluma Community Development Commission
27 Howard Street
Petahnna. California 94952
Attn: Paul Marangella
Telephone: 707-778-4581
Facsimile: 707-778-4586
PARTICIPANT:
With a copy to:
Basin Street Properties
1318 Redwood Way, Suite 140
Petaluma, California 94954
Attn: Matthew T. White
Telephone: (707) 794-4477
Facsimile: (707) 795-6283
Law Offices of Paul A. Andronico
25 Gregory Drive
Fairfax, CA 94930
Telephone: (415) 456-3166
Facsimile: (415) 329-1767
Section 11.2 Conflicts of Interest.
No member, official or employee of the Agency shall have any direct or indirect
interest in this Agreement, nor participate in any decision relating to this Agreement
which is prohibited by law.
Section 11.3 Warrantv Aeainst Pavment of Consideration for Aereement.
Participant warrants that it has not paid or given, and will not pay or give, to any
third party, any money or other consideration for obtaining this Agreement, other than
normal costs of conducting business and costs of professional services such as architects,
engineers and attorneys.
Section 11.4 Nonliabilitv of Aaencv and Citv Officials.
No member, official or employee of the Agency or City shall personally be liable
to Participant, or any assignee or successor of Participant, in the event of any default or
2/18/2004
IN
�14
breach by the Agency or for any amount which may become due to Participant or its
successors or on any obligation under the terms of this Agreement.
Section 11.5. Parties Not Co -Venturers; No Third-Partv Beneficiaries
No provision of the Agreement nor any act of the City or the Agency shall be
deemed or construed to establish the Parties as partners, co -venturers, or principal and
agent with one another or to create any relationship of third -party beneficiary.
Section 11.6 Litigation.
In the event of any dispute between the Parties hereto arising out of this
Agreement the non -prevailing party agrees to pay to the prevailing party all sums paid or
incurred by the prevailing party as reasonable costs and expenses and incurred in the
legal proceedings, including but not limited to reasonable attorneys' fees.
Section 11.7 Severabilitv.
If any term, provision, covenant or condition of this Agreement is held by a court
of competent jurisdiction to be invalid, void or unenforceable, the remainder of the
provisions shall continue in full force and effect unless the rights and obligations of the
Parties have been materially altered or abridged by such invalidation, voiding or
unenforceability. If as a result of any final judgment this Agreement or any other
required approvals under this Agreement are determined to be invalid, the Parties agree to
cooperate to amend this Agreement and other necessary documents in order to
accomplish the basic purposes and intent of this Agreement.
Section 11.8 Counterparts; Entire Agreement. Captions.
This Agreement may be executed in multiple counterparts, each of which shall be
an original and all of which together shall be deemed to be one agreement. This
Agreement, together with all Exhibits attached hereto, constitutes the entire agreement of
the Parties with respect to the subject matter hereof and supersedes all prior negotiations
or agreements between the Parties with respect thereto. The captions of the sections and
articles of this Agreement are for convenience only and are not intended to affect the
interpretation or construction of the provisions hereof.
2/18/2004 29 1
Section 11.9 Amendments. Waivers.
This Agreement may be amended only by a written instrument executed by the
Parties. No waiver of any provision of this Agreement shall constitute or be deemed a
waiver of any other provision, whether or not similar, nor shall any waiver constitute a
continuing waiver. No waiver shall be binding unless it is executed in writing by the
Party malting the waiver.
Section 11.10 Govermne Law: Venue.
The laws of the State of California shall govern the interpretation and
enforcement of this Agreement. Any action to enforce or interpret this Agreement shall
be filed in the Superior Court of Sonoma County, California.
Section 11.11 Exhibits.
Exhibits A through H attached hereto are incorporated herein by this reference.
Section 11.12 Recordation: Further Assurances.
Agency is authorized to record this Agreement and any amendments thereto in the
official records of Sonoma County, California. The Parties shall execute, acknowledge
and deliver to the other such other documents and instruments, and take such other
actions, as may be reasonably necessary to carry out the intent of this Agreement.
IN WITNESS WHEREOF, the Parties hereto have entered into this Agreement as
of the day and year first above written.
AGENCY
PETALUMA COMMUNITY
DEVELOPMENT AGENCY
Its: -f reo n�
ATTEST:
P�
S reta
2/18/2004 30 D
APPROVED AS TO FORM:
Agency Counsel
PARTICIPANT
BASIN STREET PROPERTIES,
a California Corpora
By: 4N�(�n
Matthew T. White
Its: President
2/18/2004 31 ,1 c�
Attachment 4
Theater District & D Street Underground Utility Project Budgets
CPSP Theatre District Budget C200703
All Funds
PCDC Fund 3300
Water Operating
Waste Water Operating
Flood Mitigation Funds
Assessment District
Street Reconstruction
Prior
Prior
Total Appro.
05.06
Thru 05-06
Years
05.06 Thru 05-06
55011
CIP Intragov Admin Overhead $
310 $
$ 310
54153
Administration
160
160
54150
Planning & Env Svcs
-
-
54110
Design Services
745
745
54120
Legal Counsel
100
100
62110
Land & Easements
-
-
54152
Construction Management
600
- 600
54151
Construction Contracts
9,640
460 10,100
57310
Contingency/Salary*
600
- 600
PCDC Fund 3300
Water Operating
Waste Water Operating
Flood Mitigation Funds
Assessment District
Street Reconstruction
Prior
Total Appro.
Years
05.06
Thru 05-06
$ 6,220
$ 60
$ 6,280
221
335
556
1,269
65
1,334
510
-
510
2,605
2,605
1.330
1.330
15
3�4SQ
��1
D Street Underground Utilities
Budget C200705
PCDC Fund 3300
Total Appro.
05-06 Thru 05-06
$ $ 40
60
800
100
Prior Total Appro.
Years 05-06 Thru 05-06
$ 1,000 1.000
0-
Prior
Years
55011
CIP Intragov Admin Overhead $
40
54153
Administration
-
54150
Planning & Env Svcs
-
54110
Design Services
-
54120
Legal Counsel
-
62110
Land & Easements
-
54152
Construction Management
60
54151
Construction Contracts
800
57310
Contingency
100
PCDC Fund 3300
Total Appro.
05-06 Thru 05-06
$ $ 40
60
800
100
Prior Total Appro.
Years 05-06 Thru 05-06
$ 1,000 1.000
0-