28545-1 KSL Desert Resorts 98CITY OF LA QUINTA
SUBDIVISION IMPROVEMENT AGREEMENT
TRACT 28545-1
THIS SUBDIVISION IMPROVEMENT AGREEMENT (the "Agreement") is made and entered into this /% day
of March. 1998, by and between KSL Desert Resorts, Inc., a Delaware Corporation hereinafter referred to as
"Subdivider," and the City of La Quinta, a municipal corporation of the State of California, hereinafter referred to
as "Citv."
RECITALS:
A. Subdivider has prepared and filed a final map or parcel map (the "Map") of a unit of land in the City of La
Quinta, County of .Riverside, which unit of land is known as Tract No. 28545-1 (the "Tract") pursuant to the
provisions of Section 66410, et sec. of the California Government Code (the "Subdivision Map Act").
B. Prior to approval of the Map, Subdivider is required to install or agree to install certain public and private
improvements (the "Improvements").
C. The Improvements have not been.installed and accepted at this time
D. It is therefore necessary that Subdivider and City enter into an agreement for the installation of the
Improvements as provided in Section 66462 of the Subdivision Map Act.
NOW, THEREFORE, it is agreed by and between the parties hereto as follows:
1. Improvement Plans. Prior to submittal of the Map for approval by the City Council, Subdivider shall furnish
original improvement plans meeting the requirements of the City Engineer.
2. Improvements. Subdivider shall construct the public and private street, drainage, utility, landscaping, and
other improvements required to be constructed or agreed to be constructed under this Agreement as listed in
Exhibit "A", and shall bear the full cost thereof. The methods, standards, specifications, sequence, and scheduling
of construction shall be as approved by the City Engineer.
3. Improvement Security.
A. One class of security to be provided by Subdivider, hereinafter referred to as "performance security,"
shall assure the faithful performance of this Agreement including construction of the Improvements, payment of
Subdivider's fair share of Improvements which have been or will be constructed by others ("Participatory
Improvements"), and .payment of plan check and permit fees. A second class of security to be provided by
Subdivider, hereinafter referred to as "payment security," shall assure the payment of the cost of labor, equipment
and materials supplied to construct the;lmprovements. A third class of security to be provided by Subdivider,
hereinafter referred to as "warranty security," shall serve as a guarantee and warranty of the Improvements for a
period of one year following the . completion and acceptance of the Improvements. Subdivider shall furnish
performance and payment security prior to and as a condition of City Council approval of the Map. Subdivider shall
provide warranty security after Improvements are complete and accepted by the City Council and prior to or
concurrently with the final release of performance security. Warranty security shall not be required for
Monumentation or Participatory Improvements. However, the City may utilize Monumentation Security for
performance of or payment for the work in accordance with the Subdivision Map Act.
As part of the obligation secured by each of the performance security, payment security and warranty
security, and in addition to the face amount,of each such security, each such security shall include and assure the
payment of costs and reasonable expenses and fees, including reasonable attorney's fees, incurred by City in
successfully enforcing the obligations thereby secured.
B. Improvement security shall conform with Section 66499 of the California Government Code and one
or more of the following:
1) A cash deposit with City or a responsible escrow agent or trust company, at City's option.
KSL Desert Resorts, Inc. -- Tract 28545-1 Page 1 of 6
2) Surety bonds, of the form specified in subsection 66499.2 of the California Government Code,
issued by a surety or sureties listed in the U.S. Department of Treasury Circular 570 (latest version).
3) Certificates of deposit, in City's name, from one or more financial institutions subject to
regulation by the state or federal government and having a financial quality rating of "A" or better and a commitment
reliability rating of "R-2" or better on the Investment Data Exchange (of the Los Angeles County Treasurer's office).
4) Irrevocable letters of credit, issued by one or more financial institutions meeting the requirements
of Paragraph (3), pledging that the funds necessary to carry out the completion of the Improvements are on deposit,
guaranteed for payment, and constitute a trust fund which is not subject to levy or attachment by any creditor of
the depositor until released by City. Letters of credit shall guarantee that all or any portion of the funds available
pursuant to the letters of credit will be paid upon the written demand of City and that such written demand need not
present documentation of any type as a condition of payment, including proof of loss. The duration of any such
letter of credit shall be for a period of not less than one year from the execution of the agreement with which it is
provided and shall state, on its face, that the letter of credit will be automatically renewed until such time that City
authorizes its expiration or until sixty (60) days after City receives notice from the financial institution of intent to
allow expiration of the letter of credit.
5) A lien upon the subdivided property, if City finds that it would not be in the public interest to
require the installation of the Improvements sooner than two (2) years after recordation of the final map or parcel
map for which the Improvements are required. The lien shall provide a collateral value of three (3) times the
estimated cost of the Improvements and shall include the power of sale of the real property, all buildings and
improvements thereon, or, that may be erected upon or made thereto, together with all hereditaments and
appurtenances thereunto belonging, or in any wise appertaining, and the reservations, remainders, rents, issues,
and profits thereof. The collateral value of the property shall be established at Subdivider's expense through an
appraisal approved by City.
6) An instrument of credit from an agency of the state, federal or local government, when any
agency of the state, federal, or local government provides at least Twenty Percent (20%) of the financing for the
Improvements.
7) When Subdivider is a non-profit organization, security may be negotiable bonds, of the kind
approved for securing deposits of public moneys with City or in favor of City, as specified in Section 16430 of the
California Government Code, deposited, at City's option, with City or a responsible escrow agent or trust company.
C. All securities shall be furnished in accordance with the provisions of Exhibit A. The amount of the
performance security shall equal One Hundred Percent (100%) of the estimated cost of constructing the
Improvements, including payment of plan check and permit fees, as estimated by the City Engineer or a duly
authorized representative of the City Engineer. The amount of Payment security shall equal the amount of the
amount of performance security, except as otherwise set forth in Exhibit A, and shall be furnished as a separate
security. Warranty security shall equal Ten Percent (10%) of the amount of performance security except as
otherwise set forth in Exhibit A.
D. At the time of submittal of security, Subdivider shall pay to City administrative fees applicable to the
form of security provided. Administrative fees shall apply to the subdivision (final map, parcel map or waiver of
parcel map) rather than to individual security instruments. The fees shall be paid separately for each different form
and/or source (surety or financial institution) of security initially submitted and for substitution of securities but shall
not be required for submittal of warranty security if the warranty security is of the same form and from the same
source as the performance security it replaces. Administrative fees for security shall be as follows:
1) For certificates of deposit, bonds and letters of credit as described in Paragraphs 2), 3) and 4)
of SECTION 3.B., which require the establishment of evidence of the reliability of the surety or financial institution,
the administrative fee shall be One Hundred Fifty Dollars ($150.00).
2) For liens on real property as described in Paragraph 5) of SECTION 3.B., for which City will
prepare lien agreements and subordination agreements, administer valuation of the real property and administer
the agreements over the life of the lien, all of which require legal assistance and financial advice, Subdivider shall
pay to City an administration fee of One Half of One Percent (0.5%) of the estimated cost of the improvements
secured but not less than Five Hundred Dollars ($500.00) nor more than Five Thousand Dollars ($5,000.00).
KSL Desert Resorts, Inc. -- Tract 28545-1 Page 2 of 6
3) For other forms of security listed in Section 3 B, above, there will be no administrative fee.
E. Participatory Improvements, if any, are identified in Exhibit A. Security for Participatory Improvements
shall remain in place until the Participatory Improvements are constructed and actual costs are known and paid
by Subdivider, or until Subdivider pays to City the estimated cost of the Participatory Improvements, and shall
guarantee the reimbursement by Subdivider of Subdivider's share of the cost of the Participatory Improvements.
Payment security and warranty security shall not be required for Participatory Improvements.
Upon written demand from City, Subdivider shall deposit cash with City in lieu of or in replacement of security
guaranteeing Participatory Improvements. If Subdivider fails to deposit said cash within 30 days of the date of the
written demand from City, City may present a written demand to Subdivider's Surety for payment of said cash and
Subdivider's Surety shall pay to City the lesser of: 1) the amount demanded, or 2) the amount of the security.
F. Security shall not expire, be reduced or become wholly or partially invalid for any reason, including
non-payment of premiums, modifications of this Agreement and/or expiration of the time for performance stated
in this Agreement, without express authorization from City unless the surety provides City with sixty (60) days
written notice by registered or certified mail, return receipt requested.
G. Security shall be released in the following manner:
1) Performance security shall be released upon the final completion and acceptance or approval,
by the City Council of the Improvements subject to the provisions of paragraph B.
2) The City Engineer may authorize partial reduction of performance security as work progresses,
upon application by Subdivider. However, no such reduction shall be for an amount less than Ten Percent (10%)
of the total performance security provided for the faithful performance of the act or work. In no event shall security
be reduced below that required to guarantee the completion of the act or work or obligation secured, plus Ten
Percent (10%). The City Engineer shall not allow more than two partial reductions of security furnished for any
improvement agreement.
3) Participatory Improvement security shall be released upon payment by Subdivider of
Subdivider's share of the cost or estimated cost of the Participatory Improvements.
4) If City receives no notice of recorded claims of lien, labor and materials security shall be
released in full 90 days after final acceptance and/or approval by the City Council, of the Improvements. If City
receives notice of any recorded lien, the provisions of the Subdivision Map Act shall apply.
5) Warranty security not utilized during the warranty period shall be released one year after final
acceptance or approval by the City Council of all Tract Improvements. However, if at the end of the one-year
warranty period, there are one or more outstanding requests by City for performance of work or provision of
materials under the terms of the warranty, warranty security shall be retained until the outstanding requests are
satisfied or until Subdivider has made other arrangements satisfactory to the City Engineer.
4. Permits Required. Prior to commencing any phase of work, Subdivider shall obtain all permits required
for that phase of work and pay all required fees. Work performed under a permit or permits shall comply with all
provisions of the required permits.
5. Off -site Improvements. When the construction of one or more of the Improvements requires or
necessitates the acquisition of real property not owned by Subdivider or City, Subdivider shall use its best efforts
purchase such real property at a reasonable price. In the event that Subdivider is unsuccessful, despite its best
efforts, to acquire such real property at a reasonable price, Subdivider may request in writing that City attempt to
acquire such real property. City may, but is not required to, agree to attempt to acquire such real property on behalf
of Subdivider. If City so agrees, City and Subdivider shall enter a separate written agreement in a form acceptable
to the City Attorney. Said separate agreement shall provide that Subdivider advance to City One Hundred Fifty
Percent (150%) of the appraised fair market value of the real property. Any unexpended portion of said advance
shall be refunded to Subdivider. Any additional funds required for acquisition of the real property shall be paid by
Subdivider to City upon the conveyance of said real property to Subdivider. In no event shall the failure of
Subdivider or City to acquire such real property excuse, waive, or otherwise terminate Subdivider's obligation to
construct the applicable improvement pursuant to this Agreement or the Conditions of Approval.
KSL Desert Resorts, Inc. -- Tract 28545-1 Page 3 of 6
6. Completion of Improvements. Subdivider shall begin construction of the Improvements within ninety (90)
days and shall complete construction within twelve (12) months after the approval of this Agreement. Portions of
the Improvements may be completed at a later date, as determined by the City Engineer or as set forth in Exhibit
A. Failure by Subdivider to begin or complete construction of the Improvements within the specified time periods
shall constitute cause for City, in its sole discretion and when it deems necessary, to declare Subdivider in default
of this agreement, to revise improvement security requirements as necessary to ensure completion of the
improvements, and/or to require modifications in the standards or sequencing of the Improvements in response
to changes in standards or conditions affecting or affected by the Improvements. Said failure shall not otherwise
affect the validity of this agreement or Subdivider's obligations hereunder.
7. Force Majeure. In the event that Subdivider is unable to perform within the time limits herein due to
strikes, act of God, or other events beyond Subdivider's control, the time limits for obligations affected by such
events will be extended by the period of such events.
8. Time Extension. Subdivider may make application in writing to the City Council for an extension of time
for completion of the Improvements. The City Council, in its sole and absolute discretion, may approve or deny
the request or conditionally approve the extension with additions or revisions to the terms and conditions of this
Agreement.
As a condition of the time extension, Subdivider shall furnish securities, similar in form and substance to those
required in SECTION 3 hereinabove, to cover the period of extension. The value of the securities shall be sufficient
to ensure the performance of and payment for Improvements that remain incomplete at the time of the extension,
and to provide warranty security on completed Improvements.
9. Survey Monuments. Before final approval of street improvements, Subdivider shall place survey
monuments in accordance with the provisions of Sections 66495, et sec. of the Subdivision Map Act and of the La
Quinta Municipal Code. Subdivider shall provide the City Engineer written proof that the monuments have been
set, evidence of payment and receipt thereof by the engineer or surveyor setting the monuments, and intersection
monument tie -outs for monuments set in public streets.
10. Final Acceptance of Improvements. At the completion of construction and prior to acceptance of the
Improvements by City, Subdivider shall submit a request for final approval by City. The request shall be
accompanied by any required certifications from Subdivider's engineers or surveyors, approval letters from other
agencies having jurisdiction over and approval authority for improvements required by this Agreement or the
Conditions of Approval, and any required construction quality documentation not previously submitted.
Upon receipt of said request, the City Engineer or a duly -authorized representative will review the required
documentation and will inspect the Improvements. If the Improvements are determined to be in accordance with
applicable City standards and specifications, and as provided herein, obligations required by the Conditions of
Approval and this Agreement have been satisfied, and Subdivider has provided revised plans as required in
Paragraph 11, hereinafter, the City Engineer shall recommend acceptance of the Improvements by the City Council.
11. Revisions to Plans. When the Improvements have been inspected and approved by the City Engineer,
Subdivider shall make any necessary revisions to the original plans held by City so the plans depict the actual
Improvements constructed. When necessary revisions have been made, each separate sheet of the plans shall
be clearly marked with the words "As -Built," "As -Constructed," or "Record Drawing," the marking shall be stamped
by an engineer or surveyor, as appropriate for the improvements thereon, who is licensed to practice in California,
and the plans shall be resubmitted to the City Engineer.
12. Improvement Warranty. Subdivider hereby guarantees the Improvements to City for a period of one (1)
year, beginning on the date of final acceptance of the Improvements by the City Council, against any defective work
or labor done, or defective materials furnished, and shall repair or replace such defective work or materials.
13. Release of Security. City shall retain and release securities in accordance with the provisions of Section
3 of this agreement. Prior to the release of payment security, the City Engineer may require Subdivider to provide
a title report or other evidence sufficient to show claims of lien, if any, that may affect the amount of payment
security released.
14. City Right to Cure. If Subdivider fails to perform any obligation hereunder and such obligation has not
been performed within sixty (60) days after written notice of default from City, then City may perform the obligation,
KSL Desert Resorts, Inc. -- Tract 28545-1 Page 4 of 6
and Subdivider shall pay the entire cost of such performance by City including costs of suit and reasonable
attorney's fees incurred by City in enforcing such obligation. In cases of emergency or compelling public interest,
as determined by the City Engineer, the requirement for written notice of default and/or the passage of sixty (60)
days shall be deemed waived and all other provisions of this Article shall remain in effect.
15. Indemnification. Subdivider hereby binds itself, its officers, employees, agents, representatives, executors,
administrators, guarantors, heirs, and assigns, and agrees to indemnify, defend and hold City and its officers,
employees, agents, representatives, and assigns harmless from and against any losses, claims, demands, actions,
or causes of action of any nature whatsoever, arising out of or in any way connected with Subdivider's performance
herein under, including costs of suit and reasonable attorneys' fees.
16. No Modification of Conditions. This Agreement shall in no respect act to modify or amend any provision
of the Conditions of Approval. In the event that any requirement or condition of this Agreement is inconsistent with
or fails to include one or more provisions of the Conditions of Approval, which document(s) is (are) incorporated
herein by reference, the provisions in the Conditions of Approval shall remain in effect and shall control.
17. Severability. In the event that any provision or provisions of this Agreement are held unenforceable, all
provisions not so held shall remain in full force and effect.
18. General Provisions
A. All notices pursuant to this Agreement shall be in writing and shall be personally delivered or sent
by registered or certified mail, return receipt requested, to the parties at their respective addresses indicated
hereon. Notices personally delivered shall be effective upon delivery. Notices mailed as provided herein and sent
postage prepaid shall be effective upon the date of delivery or refusal indicated on the return receipt. Either party
may change its address for notices hereunder by notice to the other given in the manner provided in this
subparagraph.
B. The terms, conditions, covenants, and agreements set forth herein shall apply to and bind the heirs,
executors, administrators, assigns, and successors of the parties hereto.
C. Neither party to this Agreement relies upon any warranty or representation not contained in this
Agreement.
D. This Agreement shall be governed by and interpreted with respect to the laws of the State of
California.
E. In the event of any dispute between the parties with respect to this Agreement, the prevailing party
shall be entitled to prompt payment of its reasonable attorneys' fees from the non -prevailing party.
F. Any 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 any default or of any such rights or remedies provided for hereunder.
KSL Desert Resorts, Inc. -- Tract 28545-1 Page 5 of 6
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the day and year first written
above.
CITY:
Thomas P. Genovese, City Manager
SUBDIVIDER:
By:
A �� J±C �
Title:
By:
Title:
City of La Quinta
78-495 Calle Tampico
La Quinta, CA 92253.
(760) 777-7075
.-/ — z
Date
KSL Desert Resorts, Inc.
56-140 PGA Boulevard
La Quinta, CA 92253
(760) 564-1088
/l
Date
Date
Reviewed and Approved: lgPP 312-3 /
City Engineer z Date
Approved as to Form:
City Attorney Date
KSL Desert Resorts, Inc. -- Tract 28545-1 Page 6 of 6
Exhibit A
SECURITY - TRACT 28545-1
Except as otherwise provided herein, Subdivider shall furnish performance security and labor & materials security
prior to agendization of the Map for approval by the City Council.
Improvements designated as "Participatory" have been or will be constructed by others. Security for Participatory
Improvements shall remain in place indefinitely until called upon or released by City.
Monumentation security shall guarantee performance of or payment for the work and shall be utilized or released
as specified in Chapter 4, Article 9 of the Subdivision Map Act.
As elements of the work are completed, Subdivider may request a maximum of two partial releases of performance
security. Partial releases shall be for not less than ten percent (10%) of the total performance security for the tract
and shall not reduce total performance security below the amount necessary to complete the Improvements plus
ten percent (10%) of the original amount. Partial releases of performance security will be evaluated and may be
granted, in whole or in part, by the City Engineer. Requests for partial releases, setting forth in detail the amount
of work completed and the value thereof, shall be made in writing to the City Engineer.
Labor & materials security shall remain in place until 90 days after all required tract improvements are complete
and accepted by the City Council
Improvement Description Performance Labor & Materials
Monumentation 5.160 0
Totals: $5,160 $0
OUTSTANDING BOND REPORT
Name: KSL Desert Resorts
Tract No. 28545-1
Date of Contract: March 17, 1998
Required Bond Amounts:
Monumentation - $ 5,160
Dates of Bond Reductions:
Outstanding Bonds:
Amount:
$5,160
$5,350
Bond No.
449875S
CD#78-6705
performance only
Date Cancelled/Released:
SUBDIVISION IMPROVEMENT BOND
FAITHFUL PERFORMANCE
MENT BOND
(CALIFORNIA)
recuted
in One (1) Original
Bond 449876 S
Initial Premium
for two years subject to renewal
WHEREAS, The City Council of the City of La Quinta, State of California, and KSL Desert Resorts, Inc...(hereinafter
designated as "Principal") have entered into an agreement whereby Principal agrees to install and complete certain
designated public improvements, which said agreement, dated , 1998, and identified as project
La Quinta Resort & Club Tract 28545-1 , is hereby referred to and made a part hereof; and
Whereas, Said principal is required under the terms of said agreement to furnish a bond for the faithful performance of said
agreement.
Now, therefore, we, the principal and DEVELOPERS INSURANCE COMPANY 17780 Fitch Irvine CA 92714, as surety,
are held firmly bound unto the City of La Quinta hereinafter called ("Obligee"), in the penal sum of Five Thousand One
Hundred Sixtv and No/100 dollars ($5.160,00) lawful money of the United States, for the payment of which sum well and
truly to be made, we bind ourselves, our heirs, successors, executors and administrators, jointly and severally, firmly by
these presents.
The condition of this obligation is such that if the above bounded principal, his or its heirs, executors, administrators,
successors or assigns, shall. in all things. stand to .and abide by, and well and truly keep and. perform the covenants,
conditions and provisions in the said agreement and any alteration thereof made as therein provided, on his or their part, to
be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and
meaning, and shall indemnify and save harmless City of La Quinta, its officers, agents and employees, as therein
stipulated, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect.
As part of the obligation secured hereby and in addition to the face amount specified therefore, there shall be included
costs and reasonable expenses and fees including reasonable attorney's fees, incurred by city in successfully enforcing
such obligation, all to be taxed as costs and included in any judgment rendered.
The surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the
agreement or to the work to be performed thereunder or the specifications accompanying the same shall in anywise affect
its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or- addition to
the terms of the agreement or to the work or to the specifications.
In witness whereof, this instrument has been duly executed by the principal and surety above named, on March 11. 1998.
KSL DESERT RESORTS INC. QEVEL0,F&S INSURANCE raIVINANY
Principal
Bye
Ann Willard, Attorney -in -Fact
17780 Fitch
Irvine, CA 92714
Agent's Address: HRH Insurance Services of Coachella Valley
77564 County Club Drive
Suite 150
Palm Desert, California 92211-0449
4
5 MEMORANDUM
OF I
TO: Saundra Juhola, City Clerk
FROM: Marcus Fuller, Assistant Engineer
DATE: May 26, 1998
RE: Dust Control Security, La Quinta Hotel
Please hold on file the attached certificate of deposit, Document No. 63797, in the amount of $5,350,
as dust control security during grading and construction of the La Quinta Resort development, Tract
28545, by KSL Land Corporation. We will advise when the security will no longer be required.
Thank you.
cc: Permit 2751
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