2004 10 19 RDARedevelopment Agency Agendas are
Available on the City's Web Page
@ www.la-quinta.org
REDEVELOPMENT, AGENCY
AGENDA
CITY COUNCIL CHAMBERS
78-495 Calle Tampico
La Quinta, California 92253
Regular Meeting
Tuesday, October 19, 2004 - 2:00 P.M.
Beginning Resolution No. RA 2004-15
CALL TO ORDER
Roll Call:
Agency Board Members: Adolph, Osborne, Perkins, Sniff, and Chairperson Henderson
PUBLIC COMMENT
At this time, members of the public may address the Redevelopment Agency on any
matter not listed on the agenda. Please complete a "request to speak" form and limit your
comments to three minutes. Please watch the timing device on the podium.
CLOSED SESSION
NOTE: Time permitting, the Redevelopment Agency Board may conduct Closed Session
discussions during the dinner recess. In addition, persons identified as negotiating parties
are not invited into the Closed Session meeting when the Agency is considering acquisition
of real property.
1. CONFERENCE WITH AGENCY'S LEGAL COUNSEL REGARDING PENDING
LITIGATION, LA QUINTA REDEVELOPMENT AGENCY, V KSL DESERT RESORTS,
INC., ET. AL., RIVERSIDE SUPERIOR COURT, INDIO BRANCH CASE NO. INC
044676, AND RAMON GARCIA MARTINEZ, ET. AL., v. CITY OF LA QUINTA, ET.
AL., UNITED STATES DISTRICT COURT, CENTRAL DISTRICT CASE NO. CV 04-
06373 DT (RZx), PURSUANT TO GOVERNMENT CODE SECTION 54956.9(a)
Redevelopment Agency Agenda 1 October 19, &04
RECONVENE AT 3:00 P.M.
PUBLIC COMMENT
At this time members of the public may address the Agency Board on items that appear
within the Consent Calendar or matters that are not listed on the agenda. Please complete
a "request to speak" form and limit your comments to three minutes. When you are called
to speak, please come forward and state your name for the record. Please watch the
timing device on the podium.
For all Agency Business Session matters or Public Hearings on the agenda, a completed
"request to speak" form should be filed with the City Clerk prior to the Agency beginning
consideration of that item.
CONFIRMATION OF AGENDA
APPROVAL OF MINUTES
1. APPROVAL OF MINUTES OF OCTOBER 5, 2004.
CONSENT CALENDAR
NOTE: Consent Calendar items are considered to be routine in nature and will be approved
by one motion.
1. APPROVAL OF DEMAND REGISTER DATED OCTOBER 19, 2004.
2. TRANSMITTAL OF TREASURER'S REPORT DATED AUGUST 31, 2004.
3. TRANSMITTAL OF REVENUES AND EXPENDITURES REPORT DATED AUGUST 31,
2004 AND INVESTMENT SUMMARY REPORT FOR THE QUARTER ENDING
SEPTEMBER 30, 2004.
4. APPROVAL OF A REQUEST FOR QUALIFICATIONS FOR RESORT HOTEL AND
DEVELOPMENT INTERESTS AT SilverRock RESORT.
5. APPROVAL OF AN AMENDMENT TO THE PROFESSIONAL SERVICES AGREEMENT
WITH THE DAHLIN GROUP TO PROVIDE BUILDING ARCHITECTURAL SERVICES
FOR SilverRock RESORT.
Redevelopment Agency Agenda 2 October 19, 2004
2
BUSINESS SESSION
1. CONSIDERATION OF. RESOLUTIONS APPROVING AMENDMENT NO. 2 TO THE
AFFORDABLE HOUSING AGREEMENT AND AN AMENDED AND RESTATED
OPTION AGREEMENT BY AND BETWEEN THE LA QUINTA REDEVELOPMENT
AGENCY ("AGENCY") AND SANTA ROSA DEVELOPMENT, INC. ("AMENDMENT
NO. 2 TO AHA"); AND
AMENDMENT NO. 2 TO AGREEMENT FOR PURCHASE AND SALE, ESCROW
INSTRUCTIONS, AND AN AMENDED AND RESTATED OPTION AGREEMENT BY
AND BETWEEN THE AGENCY AND 48TH AND ADAMS, LLC ("AMENDMENT NO. 2
TO P&S AGREEMENT"), BOTH OF WHICH AMENDMENTS ARE RELATED TO
PROPERTY LOCATED NORTHEAST OF THE INTERSECTION OF AVENUE 48 AND
ADAMS STREET IN LA QUINTA PROJECT NO. 2.
A. RESOLUTION ACTIONS.
STUDY SESSION — NONE
CHAIR AND BOARD MEMBERS' ITEMS NONE
PUBLIC HEARINGS - NONE
ADJOURNMENT
Adjourn to a regularly scheduled meeting of the Redevelopment Agency to be held on
November 2, 2004 commencing with closed session at 2:00 p.m. and open session at
3:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253.
DECLARATION OF POSTING
I, June S. Greek, City Clerk of the City of La Quinta, do hereby declare that the foregoing
agenda for the La Quinta Redevelopment Agency meeting of Tuesday, October 19, 2004 ,
was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on
the bulletin boards. at 51-321 Avenida Bermudas and 78-630 Highway 111, on Friday,
October 15, 2004.
DATED: October 15, 2004
JUNE S. GREEK, CMC, City Clerk
City of La Quinta, California
Redevelopment Agency Agenda 3 October 19, 2004
. 3
COUNCHIRDA MEETING DATE: OCTOBER 19, 2004
ITEM TITLE:
Demand Register Dated October 19, 2004
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION
CONSENT CALENDAR
STUDY SESSION
PUBLIC HEARING
It is recommended the Redevelopment Agency Board: '
Receive and File the Demand Register Dated October 19, 2004 of which $515,089.79
represents Redevelopment Agency Expenditures.
PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA
o`tC6
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;• Iaurwau
OF
COUNCIL/RDA MEETING DATE: October 19, 2004 AGENDA CATEGORY:
ITEM TITLE
Transmittal of Treasurer's Report
as of August 31, 2004
RECOMMENDATION:
It is recommended the La Quinta Redevelopment Agency:
BUSINESS SESSION:
CONSENT CALENDAR: C;L
STUDY SESSION:
PUBLIC HEARING:
Receive and File the Treasurer's Report dated August 31, 2004.
PLEASE SEE BUSINESS SESSION ITEM ON CITY COUNCIL AGENDA
5
COUNCIL/RDA MEETING DATE: October 19, 2004
ITEM TITLE:
Transmittal of Revenue and
Expenditure Report dated
August 31, 2004 and Investment
Summary Report for the Quarter
Ending September 30, 2004
RECOMMENDATION:
Receive and File
BACKGROUND AND OVERVIEW:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
Transmittal of the August 31, 2004 Statement of Revenue and Expenditures for the La
Quinta Redevelopment Agency and Investment Summary Report for the Quarter Ending
September 30, 2004.
Resp ctfully submitted,
John M. Falcone , Finance Director
Approved for submission y:
n
Thomas P. Genovese, Executive Director
Attachments: 1. Revenue and Expenditures Report, August 31, 2004
2. Investment Summary for the Quarter Ending September 30, 2004
DIJ
ATTACHMENT 1
LA QUINTA REDEVELOPMENT AGENCY
REVENUE SUMMARY
PROJECT AREA NO.1:
LOW/MODERATE BOND FUND:
Allocated Interest
Home Sale Proceeds
Non Allocated Interest
Transfer In
TOTAL LOWIMOD BOND
LOWIMODERATE TAX FUND:
Tax Increment
Allocated Interest
Non Allocated Interest
Miscellaneous revenue
Non Allocated Interest
LQRP-Rent Revenue
Home Sales Proceeds
Sale of Land
Sewer Subsidy Reimbursements
Rehabilitation Loan Repayments
2nd Trust Deed Repayment
Transfer In
TOTAL LOWIMOD TAX
DEBT SERVICE FUND:
Tax Increment
Allocated Interest
Non Allocated Interest
Interst - County Loan
Interest Advance Proceeds
Transfers In
TOTAL DEBT SERVICE
CAPITAL IMPROVEMENT FUND - NON-TAXABLE
Pooled Cash Allocated Interest
Non Allocated Interest
Litigation Settlement Revenue
Loan Proceeds
Rental income
Transfers In
TOTAL CAPITAL IMPROVEMENT
CAPITAL IMPROVEMENT FUND - TAXABLE
Pooled Cash Allocated Interest
Non Allocated Interest
Litigation Settlement Revenue
Bond proceeds
Rental Income
Transfers In
TOTAL CAPITAL IMPROVEMENT
REMAINING
BUDGET RECEIVED BUDGET
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
6,246,300.00
58,935.80
6,187,364.20
20,800.00
0.00
20,800.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
341,000.00
29,474.00
311,526.00
150,000.00
0.00
150,000.00
165,000.00
0.00
165,000.00
0.00
15,862.34
(15,862.34)
0.00
83,314.92
(83,314.92)
0.00
42,500.00
(42,500.00)
0.00
0.00
0.00
6,923,100.00
230,087.06
6,693,012.94
24,985,400.00
235,743.20
24,749,656.80
66,000.00
(16.82)
66,016.82
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
2,478,347.00
0.00
2,478,347.00
27,529,747.00
235,726.38
27,294,020.62
0.00
0.00
0.00
0.00
80,008.73
(80,008.73)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
80,008.73
(80,008.73)
0.00
0.00
0.00
0.00
16,183.15
(16,183.15)
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
16,183.15
(16,183.15)
7 2
LA QUINTA REDEVELOPMENT AGENCY
EXPENDITURE SUMMARY
PROJECT AREA NO. 1:
LOWIMODERATE BOND FUND
PERSONNEL
SERVICES
REIMBURSEMENT TO GEN FUND
HOUSING PROJECTS
TRANSFERS OUT
TOTAL LOW/MOD BOND
07/0112004.8/31/04 REMAINING
BUDGET EXPENDITURES ENCUMBERED BUDGET
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
LOWIMODERATE TAX FUND:
PERSONNEL
4,900.00
4,953.27
0.00
(53.27)
SERVICES
253,157.00
17,070.70
0.00
236,086.30
BUILDING HORIZONS
210,000.00
0„00
0.00
210,000.00
LO RENTAL PROGRAM
150,000.00
26,884.49
0.00
123,115.51
LO HOUSING PROGRAM
3,118,240.00
0.00
0.00
3,118,240.00
LOWMOD VILLAGE APARTMENTS
400,000.00
0.00
0.00
400,000.00
LORP - REHABILITATION
0.00
0.00
0.00
0.00
APT REHABILITATION
276,411.00
0.00
0.00
276,411.00
LQ HOUSING PROJECTS
500,000.00
0.00
0.00
500,000.00
REIMBURSEMENT TO GEN FUND
668,272.00
111,378.70
0.00
556,893.30
TRANSFERS OUT
2,478,347.00
0.00
0.00
2,478,347.00
TOTAL LOWIMOD TAX
8,059,327.00
160,287.16
0.00
7,899,039.84
DEBT SERVICE FUND:
SERVICES
496,585.00
8,512.29
0.00
488,072.71
BOND PRINCIPAL
2,395,000.00
0.00
0.00
2,395,000.00
BOND INTEREST
7,929,969.00
0.00
0.00
7,929,969.00
INTEREST CITY ADVANCE
952,764.00
158,794.00
0.00
793,970.00
PASS THROUGH PAYMENTS
11,903,406.00
359,462.25
0.00
11,543,943.75
ERAF SHIFT
3,000,000.00
0.00
0.00
3,000,000.00
TRANSFERS OUT
1,995,101.00
0.00
0.00
1,995,101.00
TOTAL DEBT SERVICE
28,672,825.00
526,768.54
0.00
28,146,056.46
CAPITAL IMPROVEMENT FUND:
PERSONNEL
4,900.00
4,408.12
0.00
491.88
SERVICES
116,393.00
28,490.35
0.00
87,902.65
LAND ACQUISITION
0.00
0.00
0.00
0.00
ASSESSMENT DISTRICT
0.00
0.00
0.00
0.00
ADVERTISING -ECONOMIC DEV
40,000.00
0.00
0.00
40,000.00
ECONOMIC DEVELOPMENT
50,000.00
1,927.50
0.00
48,072.50
BOND ISSUANCE COSTS
0.00
0.00
0.00
0.00
CAPITAL - BUILDING
0.00
0.00
0.00
0.00
REIMBURSEMENT TO GEN FUND
396,013.00
66,002.48
0.00
330,010.52
TRANSFERS OUT
37,354,752.00
1,151,721.19
0.00
36,203,030.81
TOTAL CAPITAL IMPROVEMENT
37,962,058.00
1,252,549.64
0.00
36,709,508.36
CAPITAL IMPROVEMENT FUNDITAXABLE BOND
BOND ISSUANCE COSTS
0.00
0.00
0.00
0.00
TRANSFERS OUT
5,666,764.00
1,017,572.19
0.00
4,649,191.81
TOTAL CAPITAL IMPROVEMENT
5,66 ,764.00
1,017,572.19
0.00
4,649,191.81
K
LA QUINTA REDEVELOPMENT AGENCY
REVENUE SUMMARY
PROJECT AREA NO, 2:
LOWIMODERATE BOND FUND:
Allocated Interest
Non Allocated Interest
Bond proceeds (net)
Transfer In
TOTAL LOWIMOD BOND
LOWIMODERATE TAX FUND:
Tax Increment
Allocated Interest
Non Allocated Interest
Developer funding
Vista Dunes MHP Rental Rev
2nd Trust Deed Repayment
ERAF Shift - Interest
Sale of Land
Transfer In
TOTAL LOWIMOD TAX
2004 LOWIMODERATE BOND FUND:
Allocated Interest
Home Sale Proceeds
Non Allocated Interest
Transfer In
TOTAL LOWIMOD BOND
DEBT SERVICE FUND:
Tax Increment
Allocated Interest
Non Allocated Interest
Interest Advance Proceeds
Transfer In
TOTAL DEBT SERVICE
CAPITAL IMPROVEMENT FUND:
Allocated Interest
Non Allocated Interest
Developer Agreement
Transfers In
TOTAL CAPITAL IMPROVEMENT
REVENUE
GRAND TOTALS PER REPORT
REMAINING
BUDGET RECEIVED BUDGET
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
3,115,000.00
47,228.16
3,067,771.84
24,100.00
0.00
24,100.00
0.00
0.00
0.00
7,054,074.00
0.00
7,054,074.00
0.00
69,873.13
(69,873.13)
0.00
86,503.33
(86,503.33)
0.00
0.00
0.00
801,358.00
801,359.00
(1.00)
0.00
0.00
0.00
10,994,532.00
1,004,963.62
9,989,568.38
0.00
0.00
0.00
0.00
0.00
0.00
0.00
162,790.93
(162,790.93)
0.00
0.00
0.00
0.00
162,790.93
(162,790.93)
12,459,800.00
188,912.65
12,270,887.35
0.00
0.00
0.00
0.00
(5.35)
5.35
0.00
0.00
0.00
4,099,819.00
0.00
4,099,819.00
16,559,619.00
188,907.30
16,370,711.70
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
0.00
REMAINING
BUDGET RECEIVED BUDGET
172, 611,126.00 10, 701, 569.00 161, 909, 557.00
4
LA QUINTA REDEVELOPMENT AGENCY
EXPENDITURE SUMMARY
PROJECT AREA NO.2:
LOWIMODERATE BOND FUND
LOW/MODERATE TAX FUND:
2004 LOWIMODERATE BOND FUND
07/01/2004 - 8131/04 REMAINING
BUDGET EXPENDITURES ENCUMBERED BUDGET
2nd TRUST DEEDS
0.00
0.00
0.00
0.00
LAND
0.00
0.00
0.00
0.00
BOND ISSUANCE COSTS
0.00
0.00
0.00
0.00
TRANSFERS OUT
0.00
0.00
0.00
0.00
TOTAL LOW/MOD BOND
0.00
0.00
0.00
0.00
PERSONNEL
2,900.00
2,997.34
0.00
(97.34)
SERVICES
192,088.00
21,715.40
0.00
170,372.60
2ND TRUST DEEDS
500,000.00
0.00
0.00
500,000.00
2ND TRUST DEEDS FROM CENTERPOINTE
2,520,000.00
0.00
0.00
2,520,000.00
48TH AND ADAMS - FROM CENTERPOINTE
1,423,203.00
7,058.20
0.00
1,416,144.80
WASH/MILES PROJECT
0.00
5,317.50
0.00
(5,317.50)
VISTA DUNES MOBILE HOME PARK
0.00
48,301.68
0.00
(48,301.68)
LOW MOD HOUSING PROJECT/47TH/ADAMS PROJ
776,239.00
0.00
0.00
776,239.00
48TH/ADAMS PLANNING
0.00
0.00
0.00
0.00
FORECLOSURE ACQUISITION
150,000.00
0.00
0.00
150,000.00
REIMBURSEMENT TO GEN FUND
333,272.00
55,545.30
0.00
277,726.70
TRANSFERS OUT
7,350,044.00
1,001,421.11
0.00
6,348,622.89
TOTAL LOWIMOD TAX
13,247,746.00
1,142, .53
0.00
12,105, 9.47
2nd TRUST DEEDS
0.00
0.00
0.00
0.00
LAND
0.00
0.00
0.00
0.00
BOND ISSUANCE COSTS
0.00
0.00
0.00
0.00
TRANSFERS OUT
500,965.00
0.00
0.00
500,965.00
TOTAL LOW/MOD BOND
500,965.00
0.00
0.00
500,965.00
DEBT SERVICE FUND:
SERVICES
179,013.00
3,025.00
0.00
175,988.00
BOND PRINCIPAL
95,000.00
0.00
0.00
95,000.00
BOND INTEREST
323,264.00
0.00
0.00
323,264.00
INTEREST CITY ADVANCE
1,053,580.00
243,262.00
0.00
810,318.00
INTEREST - ERAF L/MOD LOAN
0.00
0.00
0.00
0.00
PASS THROUGH PAYMENTS
10,605,577.00
0.00
0.00
10,605,577.00
TRANSFERS OUT
994,948.00
0.00
0.00
994,948.00
TOTAL DEBT SERVICE
38
13,251,2.00
246,287.00
0.00
13,005,095.00
CAPITAL IMPROVEMENT FUND:
PERSONNEL
2,900.00
2,996.52
0.00
(96.52)
SERVICES
117,820.00
16,939.52
0.00
100,880.48
ADVERTISING -ECONOMIC DEV
250.00
0.00
0.00
250.00
ECONOMIC DEVELOPMENT ACTIVITY
40,000.00
0.00
0.00
40,000.00
REIMBURSEMENT TO GEN FUND
41,443.00
6,907.52
0.00
34,535.48
TRANSFERS OUT
1,634.00
91.48
0.00
1,542.52
TOTAL CAPITAL IMPROVEMENT
204,047.00
26,935.04
0.00
177,111.96
10 s
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11 s
COUNCIL/RDA MEETING DATE: October 19, 2004
ITEM TITLE: Approval of a Request for Qualifications for
Resort Hotel and Development Interests at SilverRock
Resort
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
RECOMMENDATION:
Approve the Request for Qualifications (RFQ) to solicit hotel developers and operators
for SilverRock Resort and authorize staff to circulate the RFQ to hotel developers and
operators.
FISCAL IMPLICATIONS:
None.
BACKGROUND AND OVERVIEW:
In addition to offering golf and other recreation venues for La Quinta residents,
SilverRock Resort has been designed to accommodate a variety of resort hotel uses.
The development activities related to constructing the tournament golf course have
produced building sites that are designated in the SilverRock Resort Master Plan for
hotel, boutique hotel and condominium hotel development. Now that these sites are
physically defined, staff recommends that the Agency initiate a developer and operator
solicitation process to introduce the hotel community to SilverRock Resort
opportunities, and to initiate the hotel planning and development phase.
The attached RFQ (Attachment 1) has been prepared for circulation to the hotel
development and operator community. Staff is recommending using an RFQ versus a
request for proposals (RFP) in order to assess the hotel market. Since SilverRock
Resort's conception, a variety of hotel developers and operators have contacted the
Agency expressing interest in developing a variety of hotel products. Since these
discussions were preliminary in nature, staff recommends that the Agency solicit
qualifications statements to determine who is really interested in moving forward with
hotel planning and development activities at this time. Upon selecting the best
qualified firm or firms, the Agency can then work to further define and design the hotel
venues.
12
The RFQ will be included in the marketing packet that has been prepared by McMurry.
It will be circulated to the list of developers and operators who are on file. It will also
be presented to the major hotel chains including Ritz Carlton, Hyatt, Starwood, Hilton
and Marriott. The RFQ provides information regarding the development sites,
entitlements, utilities, roadways, and current use restrictions. It also presents the
guiding principals, evaluation criteria and submittal requirements previously reviewed
by the Agency Board. The anticipated schedule envisions transmitting the RFQ
packages by November 1, 2004, receiving the qualification statements by December
10, 2004, staff interviews of the top candidates on January 6 and 7, 2005, and a
selection recommendation to the Agency Board by February 15, 2005.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency Board include:
1. Approve the Request for Qualifications (RFQ) to solicit hotel developers and
operators for SilverRock Resort and authorize staff to circulate the RFQ to hotel
developers and operators; or
2. Do not approve the Request for Qualifications (RFQ) to solicit hotel developers
and operators for SilverRock Resort and do not authorize staff to circulate the
RFQ to hotel developers and operators; or
3. Provide staff with alternative direction.
Respectfully submitted,
Mark Weiss, Assistant Executive Director
Approved for submission by:
Thomas P. Genovese, Executive Director
Attachment: 1. Request for Qualifications
13
ATTACHMENT 1
[TO BE PRINTED ON SILVERROCK RESORT LETTERHEAD]
HOTEL DEVELOPMENT OPPORTUNITIES — SILVERROCK RESORT
LA QUINTA, CALIFORNIA
Dear
This package is designed to introduce your firm to resort hotel development
opportunities at SilverRock Resort. The La Quinta Redevelopment Agency is
completing the first of two tournament golf courses located at the base of
the Santa Rosa Mountains. Both within and adjacent to this and the planned
second golf course, are development sites that will accommodate four- to
five-star quality, full service resort hotels, boutique hotels, vacation
condominium units and related commercial uses.
The Agency is requesting qualification statements from a limited group of
firms to assess interest in these development opportunities. A selected firm
or firms will be invited to work in concert with the Agency to further design,
and then subsequently develop, these sites.
The Development Palette
SilverRock Resort is located just thirty minutes from Palm Springs and is
easily accessible by travelers from around the world. It's just 125 miles
from San Diego, 120 miles from Los Angeles and a comfortable four-hour
drive from Phoenix, Arizona. All said, a SilverRock Resort vacation is easy to
take, whether one is traveling internationally or from just around the corner.
In 2002 the La Quinta Redevelopment Agency purchased 525 acres of prime
property nestled at the base of the Santa Rosa Mountains to develop a
destination golf oriented resort. Master planning activities concluded in
2003, with the approval of plans and specifications to develop a 7,570-yard
tournament level golf course designed by Arnold Palmer. This course will
open in 2005, and will be a home course for the 2006 Bob Hope Chrysler
Classic.
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Permitted Land Uses
The master planning activities also designated sites for hotel, conference
center and retail development; no residential uses are planned for this
property. The five development sites range from 6 to 16 acres in size and
are located within the Palmer Tournament Course, contiguous to the 12-acre
village lake, or imbedded in the second golf course.
The Agency has secured the required General Plan and California
Environmental Quality Act (CEQA) entitlements for:
• two 18-hole golf courses with a 25,000 square foot clubhouse
• a 250-room hotel
• a 10,000 square foot conference center
• 300 timeshare, fractional or condominium hotel units
25,000 square feet of ancillary commercial uses.
Subsequent requirements to develop these uses include a specific plan to
further define and entitle the tourist commercial uses, a conditional use
permit for the timeshare, fractional or condominium hotel units, and site
development permits. The Agency is open to consider other non-residential
resort and commercial land use options provided that they enhance
SilverRock's golf resort standing.
Access/Utility Infrastructure
Included with the Palmer Tournament Golf Course construction program are
site access, drainage, utility infrastructure, and building pad rough grading
improvements. All adjoining arterial roadways will be improved to their
ultimate design requirements. The internal roadway system to the
tournament course, future permanent clubhouse, and one of the hotel sites
will be fully improved. All required backbone utility infrastructure (water,
sewer, electric, telephone and cable TV) will be fully installed with locations
contiguous to all of the resort, conference center and retail development
sites. Finally, the Agency is securing a master agreement with the
Coachella Valley Water District (CVWD) to provide the required water and
sewer service for all site uses.
Development Restrictions
The Agency purchased the SilverRock Resort property from KSL Recreation;
KSL operates the legendary La Quinta Resort and Club. When purchasing
the property, the Agency agreed to accept certain use restrictions that
expire in June 2009. These restrictions encompass the following:
4
15
• The maximum number of hotel rooms that may be constructed on -site
prior to June 2009 is 250.
• The maximum number of condominium -hotel units that may be
constructed prior to June 2009 is 300 with a maximum of 500 keys.
• The maximum amount of hotel -associated conference space that may
be constructed prior to June 2009 is 10,000 square feet.
• The maximum room rate that may be charged for the hotel and
condominium -hotel units prior to June 2009 is 70% of the advertised
rate of the La Quinta Resort and Club for rooms of like kind.
However, the permitted room rate shall in no event be less than
$125.00 per night.
The Agency is currently working to reduce or eliminate these restrictions.
Qualifications Selection Criteria
Prior to circulating this request for qualifications, the La Quinta
Redevelopment Agency Board adopted the following guiding principals for
the development of resort uses at SilverRock Resort:
• Secure an exclusive, four- to five-star, luxury resort that anchors the
golf and resort experience; locate this facility at the major hotel site in
the resort village.
• Secure smaller boutique hotel and/or vacation condominium
complexes for the non -resort village parcels that adjoin the golf
courses that uphold and complement the four- to five-star luxury
experiences.
• Pursue land sale or long-term lease options that attract the desired
resort hotel development and operators, generate a reasonable return
on the Agency's land investment, and afford the Agency some degree
of control over design and operations standards.
• Do not entertain offers that provide immediate land investment
returns but limit the possibilities of obtaining a four- to five-star luxury
resort experience.
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In addition, the Agency Board established the following brand promise:
Discover the mystique of SilverRock Resort, the crown jewel of
La Quinta's golf legacy. Rich in both history and legend, the
majestic Santa Rosa Mountains frame an unwavering
commitment to an exceptional SilverRock experience.
Our promise: Exceptional In All, For All, Always.
Evaluation Criteria
The aforementioned items generated the following criteria that will be used
to evaluate the Qualifications Statements:
• The proposed development program should align with or enhance the
Brand Promise for SilverRock Resort.
• The proposed development program should align with or enhance the
land use and planning criteria presented in the adopted conceptual
master plan.
• The proposed development program should feature a full service,
whole ownership, four- or five-star quality hotel with
restaurants/lounges, meeting facilities, and recreation and spa
facilities.
• Fractional and investor owned hotel rooms (condominium ownership
units) may be included in the proposed development program but
only in association with a full service four- to five-star quality, whole
ownership hotel.
• The hotel operations must include a reservation system so that
national and international leisure and commercial travelers may easily
access these properties.
• The development entity must demonstrate extensive experience with
designing, building and operating four- and five-star resorts. Extensive
experience entails at least five or more properties.
• The development entity must demonstrate that it has access to at
least $50,000,000 of equity and financing to underwrite construction
and operating capital requirements.
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17
• The development entity must demonstrate that it is ready to initiate
site and development program planning activities upon signing
an exclusive negotiation agreement, and that it can commit to
initiating construction activities within 12 months after executing a
disposition and development agreement.
Qualification Statements
The La Quinta Redevelopment Agency is requesting that your firm submit
materials that express your entity's interest, vision and capability to develop
and operate hospitality uses at SilverRock Resort. We are specifically
seeking the following materials:
Firm Specialty. Provide a narrative that details whether your firm develops,
or develops and operates, resort hotel venues. Please identify the firm's
specialization: full service hotels, boutique hotels, condominium hotels or the
entire spectrum of hotel operations. If teams are proposed that would
separately undertake the development and operating responsibilities, please
provide this information for each team member.
Vision and Development Program Summary. Identify your vision for one or
more of the hospitality venues your firm would develop and describe how a
SilverRock property would fit in your firm's overall business strategy. Please
discuss how your vision would achieve the Brand Promise and align with the
SilverRock master plan. Further, translate your vision into a development
program that identifies the SilverRock site or sites your firm would develop,
including the type of development and the anticipated lodging market these
facilities would access. Also, please detail ancillary (restaurant, spa, retail,
and other resort) uses your firm, or another entity, would develop in
conjunction with your development program. The proposed vision and
development program should embrace the points detailed in the Guiding
Principals and Evaluation Criteria.
Operations Franchises. Identify anticipated hotel operators for each
proposed hospitality venue. Also identify other proposed operators for all
ancillary uses. Describe the brand promise, marketing program and
reservation system that is unique to each operator.
Experience. Please provide a detailed resume of the firm's (or if a team,
each participating firm) experience with four- and five-star hospitality
venues. Identify other projects your firm has developed and/or operates
including their location, size, resort uses, and quality level. Also provide
information regarding your firm (if a development team, then for each firm
included in the team) that identifies length of time in business, ownership
structure, operating structure, principal offices, and the office that would
service SilverRock Resort. Further, identify the project manager and
personnel that would be assigned to this project including their responsibility
and experience.
Financial Capability. Identify the firm's or team's capacity to secure the
equity and financing required to implement the proposed development
program. The development entity must demonstrate that it has access to at
least $ 50,000,000 of equity and financing to underwrite construction and
operating capital requirements. Confidential information should be submitted
to the Agency's Economic Development consultant. Please disclose if your
firm has ever defaulted on its financial obligations, has had projects that
were foreclosed upon, or if bankruptcy has ever been filed.
Implementation Time Frame. Outline the time period your firm would
propose to initiate site and development program planning activities upon
signing an exclusive negotiation agreement. Discuss your firm's ability to
initiate construction activities within 12 months after executing a disposition
and development agreement.
Submittal Requirements
Please submit ten (10) qualification statement packages by 1:00 p.m.,
Friday, December 10, 2004, delivering them to:
Mark Weiss, Assistant Executive Director/Project Manager
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
(P. 0. Box 1504, La Quinta, CA 92247)
Contact Person
All questions regarding SilverRock Resort and this Request for Qualifications
should be directed to Mark Weiss via e-mail at mweiss@la-auinta.org.
Additional information regarding SilverRock Resort is available at
www.silverrock.org.
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Selection Process
A Selection Committee comprised of Agency staff and advisors will review
the submittals and evaluate how they achieve the Guiding Principals and
meet the Evaluation Criteria detailed herein. Interviews will be held with the
top four teams. From this information, the Selection Committee will then
recommend that one or more firms be considered by the Agency Board for
an exclusive negotiation agreement.
The anticipated schedule is as follows:
Issue Request for Qualifications
November 1, 2004
Qualification Statements due
December 10, 2004
Interviews
January 6 - 7, 2005
Agency Board consideration
February 15, 2005
This solicitation does not commit the La Quinta Redevelopment Agency to
award a contract, to pay any cost incurred with the preparation of a
qualifications statement, or to procure or contract for services or supplies.
The Agency reserves the right to accept or reject any submittals received in
response to this request, to negotiate with any qualified source, or cancel in
whole or part this process if it is in the best interest of the Agency to do so.
Prior to negotiations, prospective entities may be required to submit revisions
to their qualifications statements. All proposers should note that any
contract pursuant to this solicitation is dependent upon the recommendation
of the Agency staff and the approval of the Agency Board.
Thank you for your interest in SilverRock Resort development opportunities.
Again, please contact me with any questions or further information needs.
Sincerely,
Mark Weiss
Assistant Executive Director
9 20
.A Alp
Tar 44alb(Z
COUNCIL/RDA MEETING DATE: October 19, 2004
ITEM TITLE: Approval of an Amendment to the
Professional Services Agreement with the Dahlin
Group to Provide Building Architectural Services for
SilverRock Resort
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR: J
STUDY SESSION:
PUBLIC HEARING:
Approve an amendment to the Professional Services Agreement with the Dahlin Group
in an amount not -to -exceed $44,900 to provide building architectural services for the
SilverRock Resort project, and authorize the Executive Director to execute the
amendment.
FISCAL IMPLICATIONS:
Of the total contract amendment (Attachment 1), $42,900 is for design of the
commercial kitchen adjacent to the temporary clubhouse, and will be funded from the
$200,000 approved by the Agency Board on September 7, 2004. The remaining
$2,000 is for design services associated with the shade structures at the maintenance
building, which will, be funded from the SilverRock Resort Professional Services
account. There is $71 1,739 in professional services funds available. Of this amount,
$640,000 has been designated for permanent clubhouse architectural services.
BACKGROUND AND OVERVIEW:
On November 18, 2003, the Agency Board approved a Professional Services
Agreement with the Dahlin Group to provide building architectural services for the golf
course maintenance building, restrooms, pump house, and temporary clubhouse. The
designs are complete and the buildings are under construction.
On September 7, 2004, the Agency Board approved an amount not -to -exceed
$200,000 to design and construct a kitchen facility adjacent to the temporary
clubhouse that would enhance the meal menu and allow the operator to obtain a full
liquor license.
21
Attachment 2 outlines the Dahlin Group's request for additional compensation for
services associated with the kitchen and shade structure design at the maintenance
building.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency Board include:
1. Approve an amendment to the Professional Services Agreement with the Dahlin
Group in an amount not -to -exceed $44,900 to provide building architectural
services for the SilverRock Resort project, and authorize the Executive Director
to execute the amendment; or
2. Do not approve an amendment to the Professional Services Agreement with the
Dahlin Group in an amount not -to -exceed $44,900 to provide building
architectural services for the SilverRock Resort project, and do not authorize the
Executive Director to execute the amendment; or
3. Provide staff with alternative direction.
Respectfully submitted,
k'I", .Q -- —
Mark Weiss, Assistant Executive Director
Approved for submission by:
Thomas P. Genovese, Executive Director
Attachments: 1. Contract Amendment
2. Outline of Requested Additional Services
22 2
ATTACHMENT 1
Iry
4 aCP QuArrA
PROFESSIONAL SERVICES AGREEMENT
AMENDMENT
PROJECT: SilverRock Resort Architectural Services
CONSULTANT: Dahlin Group
******************************************************************************************
Pursuant to the terms of the original Contract Agreement, you are hereby directed to make the herein described changes or do
the following described work not included in the plans and specifications for this Contract. Unless otherwise stated all work
shall conform to the terms, general conditions, and special provisions of the original Contract.
DESCRIPTION OF CHANGE
Provide architectural services related to the temporary clubhouse kitchen and maintenance facility shade structures..
Submitted By:
Approved By:
Contract Amount $212,000.00
Add this Amendment $44 900.00
Total $256 900.00
Date:
Date:
We, the undersigned Consultant, havegiven careful consideration to the changeproposed and hereby agree, if thisproposal
is approved, that we will provide all equipment, furnish all materials, perform all labor, except as may be noted above, and
perform all services necessary to complete the above specified work, and hereby accept as full payment the amount shown
above.
PSA96041.doc 3
23
Accepted By:
Consultant:
Title:
Date:
PSA96041.dm 24
4
ATTACHMENT 2
EXHIBIT 1-A
OUTLINE OF REQUESTED ADDITIONAL SERVICES
SILVERROCK RESORT GOLF CLUBHOUSE AND SUPPLEMENTARY FACILITIES
September 23, 2004 (revised)
A. REQUESTED ADDITIONAL SERVICES PROVIDED THROUGH AUGUST 31, 2004
The following services were provided by Dahlin Group and our consultants, despite
being excluded from the Scope of Work outlined in our Agreement.
ITEM DESCRIPTION FEE
A.1. Designed new restroom building adjacent to clubhouse. This increased
the project scope from 2,500 s.f. (per our Agreement) to 3,200 s.f., and
required many custom details and conditions separate from the
remodel..................No Charge
A.2. Provided conceptual site designs and exhibits..................................No
Charge
A.3. Attended (6) public presentations beyond those (2) listed in our
Agreement. Most required a considerable commitment of time. Attended -
various other meetings excluded from our
Agreement......................................................No Charge
A.4. Provided architectural revisions after RDA -approved designs due to
revisions by Agency's consultants (e.g. Pump
Station) ........................................ No Charge
A.5. Provided design for Arbor at request of Landscape Architect................ No
Charge
A.6. Provided pre -design and conceptual design services for proposed kitchen
expansion. See breakdown, Exhibit 1 -
B.............................................. $ 4, 82 0 .
A.7. Provided pre -design services for Maintenance yard remote equipment
and wash -down shade structures. See breakdown., Exhibit 1 -
B................
B. REQUESTED ADDITIONAL SERVICES TO BE PROVIDED AFTER AUGUST 31, 2004
The following additional services have been requested.
25 5
ITEM DESCRIPTION FEE
B.I. Provide design services for an approximately 365 s.f. kitchen addition to
the ranch house to include Schematic Design, Design Development,
Construction Documents and Construction Administration. Consultant
services to include Structural Engineering, Mechanical, Plumbing and
Electrical Engineering, Title-24 calcs, and Food Service Consultant. See
breakdown, Exhibit 1-B............ $29,830.
B.2. Provide services to assist the City in procuring approximately 4,000 s.f. of
remote shade structures for equipment parking and equipment wash -
down in the Maintenance yard. The shade structures will be design -build
by others......$2,000.
B.3. Attend additional meetings or presentations as required by
Ag e n cy...........$2,000.
B.4. Estimated additional reimbursable expenses due to fast -track construction
schedule and associated requests for overnight deliveries in order for
immediate return of all
submittals....................................................................... $500.
B.S. Estimated additional Construction Administration hourly services due to
fast -track construction schedule and frequency and intensity of requested
services thus far (the original fund for hourly services has been
exhausted) .....................$5,000.
Total Additional
Fees........................................................................................$44,900.
End of Exhibit 1-A
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26
COUNCIL/RDA MEETING DATE: October 19, 2004 AGENDA CATEGORY:
ITEM TITLE: Consideration of Resolutions Approving
BUSINESS SESSION: /
Amendment No. 2 to Affordable Housing Agreement CONSENT CALENDAR:
and an Amended and Restated Option Agreement By
and Between the La Quinta Redevelopment Agency STUDY SESSION:
("Agency") and Santa Rosa Development, Inc. PUBLIC HEARING:
("Amendment No. 2 to AHA"); and
Amendment No. 2 to Agreement for Purchase and Sale,
Escrow Instructions, and an Amended and Restated
Option Agreement by and between the Agency and
48" and Adams, LLC ("Amendment No. 2 to P&S
Agreement"), Both of Which Amendments are Related
to Property Located Northeast of the Intersection of
Avenue 48 and Adams Street in La Quinta Project Area
No. 2
RECOMMENDATION:
Adopt Resolutions approving (1) Amendment No. 2 to Affordable Housing
Agreement, and (2) Amendment No. 2 to Purchase & Sale Agreement.
FISCAL IMPLICATIONS:
Implementing the Affordable Housing Agreement (AHA), either as currently in
effect or after approval of Amendment No. 2 to AHA, will result in expenditure of
$7,800,000 in housing funds ($800,000 has been expended for costs related to
securing development entitlements). These expenditures were made from funds
the Agency currently had on hand. The additional $7,000,000 required to fund
homebuyer second trust deed loans (anticipated to be needed approximately 10
months from now) will be derived from the 2004 Housing Bond proceeds. Staff
will be requesting appropriation of those funds when they are needed. These funds
are being reserved for this project.
27
BACKGROUND AND OVERVIEW:
In January 2003 the Agency approved two agreements with Santa Rosa
Development, Inc. ("Santa Rosa") which facilitated the sale of 32.3 acres of
Agency property ("Property"): (1) an Affordable Housing Agreement (the "Original
AHA") which provided for the development of 149 one- and two -bedroom single -
story court homes to be restricted to moderate -income homebuyers aged 55 years
and older (the "Affordable Homes") (defined as households earning from 81 % to
120% of the Riverside County median income); and (2) an Agreement for Purchase
and Sale and Escrow Instructions (the "Original P&S Agreement") for the
development of 36 market rate homes (the "Market Homes").
Per the Original AHA and the Original P&S Agreement, Santa Rosa was required to
prepare and process the entitlements and tract map required for both the Market
Homes and Affordable Homes. Upon receiving the entitlements, the Original AHA
provided that Santa Rosa would purchase the 20.9 acre Affordable Homes site for
$1.00, and the 1 1.9-acre Market Homes site for $801,358.
Prior to the closing of these transactions, the Agency and Santa Rosa negotiated
an amendment to the Original AHA ("Amendment No. 1 to AHA") and an
amendment to the Original P&S Agreement ("Amendment No. 1 to P&S
Agreement") to change the timing for certain project entitlements from "pre -
closing" to "post -closing." Specifically, the requirements for (i) recording the tract
map; (ii) obtaining City approval and recording covenants, conditions, and
restrictions ("CC&Rs"); and (iii) obtaining building permits, were changed from pre -
closing to post -closing obligations. The Option Agreements attached to each
original document were also amended to reflect these changes.
The transactions closed on July 21, 2004. At the closing, Santa Rosa assigned all
of its interests and obligations in the Original P&S Agreement, as amended by
Amendment No. 1 to P&S Agreement, to 48th and Adams, LLC, an entity related
to Santa Rosa ("481h and Adams").
Santa Rosa and 481h and Adams (collectively, the "Developers") have requested
additional changes to the timing of some of the "post -closing" project entitlement
obligations and to the Option Agreements to enable the Developers to close their
construction loans and obtain funding to commence the two projects. The
requested modifications are as follows:
• The agreements provided that the Developers would secure all 185 building
permits soon after closing. In order to manage their cash flow, they are
requesting that building permits be obtained initially to construct the model
K
homes, and then for each subsequent phase of the development. This
change is embodied in the proposed amendment.
• The Agreement provided that the Developers obtain City approval of, and
record, the CC&RS for the subdivisions within a short time frame after the
closing. The proposed amendment modifies this requirement. to obtaining
City approval prior to the issuance of any building permits and to recording
the approved CC&Rs prior to the City's issuance of any certificate of
occupancy.
• The Schedule of Performance contained in the Agreement has been modified
to reflect current time frames and the above modifications.
• The Amended AHA and the Amended P&S Agreement each contain, as an
exhibit, an Option Agreement that grants certain property repurchase rights
to the Agency in the event of a default by one of the Developers. The
Developers' lenders will not agree to some of the provisions contained in the
Option Agreements, which limit the Developers' ability to secure financing to
develop both the Market Homes and the Affordable Homes. The proposed
amendment modifies these provisions as follows:
o Change "Repurchase Option I" (which the Agency will not subordinate
to the construction lenders' deed of trust) to replace the requirement
that the tract map be recorded with a requirement that a subdivision
improvement agreement be secured and executed. The amendment
addresses this request and moves the tract map recordation
requirement to "Repurchase Option II" (which the Agency will
subordinate to the construction lenders' deed of trust).
o Change "Repurchase Option I" to define the requirement that the
Developers commence construction as a requirement that the
Developers complete at least 15 days of mass grading activities on
each site.
o Change "Repurchase Option I" to move the requirement that the
Developers obtain building permits to "Repurchase Option II" (which
will be subordinated to the construction lenders' deed of trust), and
modify this requirement to require that the Developers obtain building
permits within the schedule set forth in Amendment No. 2 to P&S
Agreement and Amendment No. 2 to AHA.
o Change "Repurchase Option I" to move the requirement that the
Developers obtain the City's approval of and record the CC&Rs to
2 9- 3
"Repurchase Option II, ' and modify this requirement to require that
the Developers obtain City's approval of the CC&Rs prior to pulling the
first building permit for each project, and to record the CC&Rs prior to
obtaining the first certificate of occupancy for each project.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Agency Board include:
1. Adopt Resolutions approving Amendment No. 2 to Affordable Housing
Agreement and the Amended and Restated Option Agreement by and
between the La Quinta Redevelopment Agency and Santa Rosa
Development, Inc., and
Amendment No. 2 to Agreement for Purchase and Sale and Escrow
Instructions and the Amended and Restated Option Agreement by and
between the La Quinta Redevelopment Agency and 48th and Adams, LLC,
both of which amendments are related to property located northeast of the
Intersection of Avenue 48 and Adams Street in La Quinta Project Area No. 2;
or
2. Do not adopt Resolutions approving Amendment No. 2 to Affordable Housing
Agreement and the Amended and Restated Option Agreement by and
between the La Quinta Redevelopment Agency and Santa Rosa
Development, Inc., and
Amendment No. 2 to Agreement for Purchase and Sale and Escrow
Instructions and the Amended and Restated Option Agreement by and
between the La Quinta Redevelopment Agency and 48th and Adams, LLC,
both of which amendments are related to property located northeast of the
Intersection of Avenue 48 and Adams Street in La Quinta Project Area No. 2;
or
3. Provide staff with alternative direction.
Respectfully submitted,
Oscar Orci, Interim
Community Development Director
30 4
Approved for submission by:
C/ y4r�
Thomas P. Genovese, City Manager
31
RESOLUTION NO. RA 2004-
A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY
APPROVING AMENDMENT NO. 2 TO AFFORDABLE HOUSING
AGREEMENT BY AND BETWEEN THE AGENCY AND SANTA ROSA
DEVELOPMENT, INC. FOR THE PROPERTY LOCATED AT THE
NORTHEAST CORNER OF AVENUE 48 AND ADAMS STREET
WHEREAS, the La Quinta Redevelopment Agency ("Agency") is a
public body, corporate and politic, organized and existing under the California
Community Redevelopment Law ("Health & Safety Code § 33000 et seq.) ("CRL");
and
WHEREAS, pursuant to the CRL, the City Council of the City of La
Quinta ("City" or "City Council," as applicable) approved and adopted the
Redevelopment Plan ("Redevelopment Plan) for Project Area No. 2 (Project
Area"), on May 16, 1989, by Ordinance No. 139; and
WHEREAS, a fundamental purpose of the CRL is to expand the supply
of low- and moderate -income housing (Health & Saf. Code, § 33071); and
WHEREAS, on or about January 22, 2003, the Agency and Santa
Rosa Development, Inc., a California corporation ("Developer") entered into that
certain Affordable Housing Agreement (the Original AHA ),pursuant to which (i)
the Agency agreed to convey to the Developer certain real property located within
the Project Area ("Property") for One Dollar ($1.00) for the Developer's subsequent
development thereon of One Hundred Forty -Nine (149) single family homes for sale
to senior citizens who are at least 55 years of age and who are also persons and
families of moderate income" (i.e., persons and families whose income does not
exceed 120% of the median income for Riverside County, adjusted for family size)
(the "Project"); (ii) the Agency is to reimburse the Developer, in an amount up to
but not exceeding Eight Hundred Thousand Dollars ($800,000), from the Agency's
Low and Moderate Income Housing Tax Increment Fund ("Housing Fund"), for
engineering, architectural and planning costs and building permit fees incurred in
planning and developing the Project (the "Development Assistance"); and (iii) the
Agency is to provide second trust deed assistance to qualified buyers of units in the
Project in an amount not to exceed, collectively, Seven Million Dollars
($7,000,000), from the Agency's Housing Fund (the "Homebuyer Assistance"), all
as more particular described in the Original AHA; and
WHEREAS, on or about June 22, 2004, the Agency and Developer
amended the Original AHA and the Option Agreement attached as Attachment No.
7 to the Original AHA (the "Original Option Agreement") by that certain Waiver and
Replacement of Conditions for Closing for the Affordable Housing Agreement and 32
882/015610-0043 r
550138.01 a10/15/04 r .`
Resolution No. RA 2004-
Amendment No. 2 to 481h & Adams
Affordable Housing Agreement
Adopted: October 19, 2004
Page 2
for the Option Agreement ("Amendment No. 1 ") to revise, among other terms,
various provisions related to the "Project Entitlements,(as that term is defined in
the Original AHA); and
WHEREAS, the Original AHA, as amended by Amendment No. 1, is
hereinafter referred to as the "Amended AHA," and the Original Option Agreement,
as amended by Amendment No. 1, is hereinafter referred to as the Amended
Option Agreement"; and
WHEREAS, Agency and Developer have negotiated an amendment to
the Amended AHA and to the Amended Option Agreement ("Amendment No. 2"),
to� further revise the provisions related to the Project Entitlements, and to revise the
subordination provisions set forth in the Amended Option Agreement, all as more
particularly set forth in Amendment No. 2.
WHEREAS, the Agreement. is in accordance with the Redevelopment
Plan and is of benefit to the Project Area and the City of La Quinta; and
NOW, THEREFORE, BE IT RESOLVED BY THE LA QUINTA
REDEVELOPMENT AGENCY AS FOLLOWS:
1. That the above recitals are true and correct and incorporated herein.
2. That the La Quinta Redevelopment Agency hereby finds and
determines that Amendment No. 2 effectuates the purposes of the Community
Redevelopment Law (Health & Safety Code § 33000 et seq.) and of the
Redevelopment Plan and is in the best interests of the citizens of the City of
La Quinta.
3. Amendment No. 21 a copy of which is on file with the Agency
Secretary, is hereby approved. The Agency Executive Director and Agency Counsel
are hereby authorized and directed to make final modifications to Amendment No. 2
that are consistent with the substantive terms of Amendment No. 2 approved
hereby, and the Agency Executive Director is authorized to thereafter sign
Amendment No. 2 on behalf of the Agency.
4. The Agency Executive Director is authorized and directed, on behalf of
the Agency, to (i) sign such other. and further documents, including but not limited
to subordination agreements and escrow instructions that require the Agency's
signature, and (ii) take such other and further actions, as may be necessary and
proper to carry out the terms of Amendment No. 2.
,.: 882/015610-0043 33
550138.01 a10/15/04
Resolution No. RA 2004-
Amendment No. 2 to 48`h & Adams
Affordable Housing Agreement
Adopted: October 19, 2004
Page 3
PASSED, APPROVED, AND ADOPTED at a regular meeting of the La
Quinta Redevelopment Agency held this 19th day of October, 2004, by the
following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
TERRY HENDERSON, Agency Chair
City of La Quinta, California
ATTEST:
JUNE S. GREEK, Agency Secretary
City of La Quinta, California
APPROVED AS TO FORM:
M. KATHERINE JENSON, Agency Counsel
City of La Quinta, California
34
882/015610-0043 �.
550138.01 a10/15/04
AMENDMENT NO.2 TO AFFORDABLE HOUSING AGREEMENT
THIS AMENDMENT NO. 2 TO AFFORDABLE HOUSING AGREEMENT
("Amendment No.2") is made and entered into as of , 2004 (the
"Effective Date") by and between the LA QUINTA REDEVELOPMENT AGENCY, a public
body, corporate and politic (the "Agency"), and SANTA ROSA DEVELOPMENT, INC., a
California corporation ("Developer").
RECITALS:
A. On or about January 22, 2003, the Agency and Developer entered into that certain
Affordable Housing Agreement (the "Original AHA"), pursuant to which Agency agreed to sell
to Developer, and Developer agreed to purchase from Agency, that certain real property located
at the corner of Avenue 48th and Adams Street, in the City of La Quinta, County of Riverside,
State of California (the "Site"), and to construct thereon a "senior citizen housing development,"
as defined in Civil Code Section 51.3(b)(4), consisting of not less than one hundred forty-nine
(149) single-family detached homes and related improvements (the "Project") to be sold to
"Eligible Buyers" at an "Affordable Housing Cost" (at those terms are defined in the Original
AHA).
B. On or about June 22, 2004, the Agency and Developer amended the Original
AHA and the Option Agreement attached as Attachment No. 7 to the Original AHA (the
"Original Option Agreement") by that certain Waiver and Replacement of Conditions for
Closing for the Affordable Housing Agreement and for the Option Agreement ("Amendment
No. 1") to revise, among other terms, various provisions related to the "Project Entitlements" (as
that term is defined in the Original AHA). The Original AHA, as amended by Amendment No.
1, is hereinafter referred to as the "Amended AHA" and the Original Option Agreement, as
amended by Amendment No. 1, is hereinafter referred to as the "Amended Option
Agreement").
C. Agency and Developer now wish to amend the Amended AHA and the Amended
Option Agreement to further revise the provisions related to the Project Entitlements, and to
revise the subordination provisions set forth in the Amended Option Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated
herein by this reference, and for valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows:
1. The Amended AHA is hereby amended as follows:
1.1 To replace Section 305(b) with the following:
(b) Within one hundred twenty (120) days following the Closing Date,
Developer shall (i) prepare and record in the Official Records a tract map
35
882/014122-0001 i
549555.01 a10/13/04
subdividing the Site from the adjacent real property (the "Tract Map"); and (ii)
furnish to the City of La Quinta a fully secured and executed Subdivision
Improvement Agreement ("SIA") in the form currently used by the City
guaranteeing the construction of all on and off -site improvements required in
connection with the Project, in accordance with the Conditions of Approval for
Tentative Tract Map 31311, which was approved by the City pursuant to City
Council Resolution 2003-112, adopted on November 18, 2003
1.2 To replace Section 305(c) with the following:
(c) Within the times set forth in the Schedule of Performance, Developer shall
have obtained from the City the building permits necessary for the construction of
the model homes and each phase of the Project.
1.3 To replace Section 305(d) with the following:
(d) Prior to, and as a condition of, City's issuance of the first building permit
for the Project, Developer shall obtain approval from the City of covenants,
conditions, and restrictions providing for maintenance of. all commonly -owned
property within the Project by a homeowners' association ("CC&Rs"), which
CC&Rs shall provide that the City and Agency are third party beneficiaries with
the right, but not the obligation, to enforce the terms thereof. Prior to, and as a
condition of, City's issuance .of a certificate of occupancy for the first Unit,
Developer shall record the CC&Rs in the Official Records.
1.4 To replace Section 305(e) with the following:
(e) Agency agrees to fully cooperate with, and assist, at no cost to Agency,
Developer in its pursuit of the Tract Map, building permits, and the CC&Rs
("Post Closing Entitlements"), subject to Agency's exercise of its legislative
discretion and without any representation, warranty, or guaranty by Agency that
the City will issue or approve, or will issue or approve the same with conditions,
any of the Post Closing Entitlements. Without limiting the generality of the
foregoing, where required, Agency shall review all submittals by Developer in a
timely manner and shall provide Developer with all information, in Agency's
possession or control, that Developer may reasonably request in writing in
connection with the Post Closing Entitlements.
2. The Schedule of Performance attached to the Amended AHA is hereby replaced, in its
entirety, with the Schedule of Performance attached hereto and incorporated herein as Exhibit
«A„
3. The Amended Option Agreement is hereby replaced, in its entirety, with the Amended
and Restated Option Agreement attached hereto and incorporated herein as Exhibit `B" (the
"Amended and Restated Option Agreement"). Agency's approval of this Amendment No. 2
is conditioned upon Developer's execution, concurrently with the execution hereof, of the
Amended and Restated Option Agreement.
882/014122-0001 10
549555.01 a10/13/04 2 C
4. Nothing herein or in the Amended AHA constitutes a representation or warranty by
Agency that the construction of the Project is not subject to California Health and Safety Code
Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code
(commencing with section 1720), and all applicable statutory and regulatory provisions related
thereto, and Developer expressly waives any right of reimbursement for any "increased costs"
under California Labor Code Section 1781 or otherwise with respect to. the Project or Site.
Developer shall indemnify, defend, and hold Agency harmless, including litigation costs and
reasonable attorneys' fees, from and against any and all claims pertaining to the payment of
wages for the Project.
5. Except as otherwise expressly provided in this Amendment No. 2, all of the terms and
conditions of the Amended AHA shall remain in full force and effect.
6. In the event of any action between Agency and Developer seeking enforcement of any of
the terms and conditions to this Amendment No. 2, the prevailing party in such action shall be
awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses,
including without limitation its expert witness fees and reasonable attorney's fees.
7. This Amendment No. 2 shall be construed according to its fair meaning and as if
prepared by both parties hereto.
8. This Amendment No. 2 shall be governed by the internal laws of the State of California
and any question arising hereunder shall be construed or determined according to such law. The
Municipal and Superior Courts of the State of California in and for the County of Riverside, or
such other appropriate court in such county, shall have exclusive jurisdiction of any litigation
between the parties concerning this Amendment No. 2. Service of process on Agency shall be
made in accordance with California law. Service of process on Developer shall be made in any
manner permitted by California law and shall be effective whether served inside or outside
California.
9. Time is of the essence of this Amendment No. 2 and of each and every term and
provision hereof.
10. A waiver of a provision hereof, or modification of any provision herein contained, shall
be effective only if said waiver or modification is in writing, and signed by both Agency and
Developer. No waiver of any breach or default by any party hereto shall be considered to be a
waiver of any breach or default unless expressly provided herein or in the waiver.
11. Signatures of the parties transmitted by facsimile shall be deemed binding. However,
each party agrees to submit their original signature to the other party within five (5) business
days after execution hereof.
12. This Amendment No. 2 may be executed in counterparts, each of which, when this
Amendment No. 2 has been signed by all the parties hereto, shall be deemed an original, and
such counterparts shall constitute one and the same instrument.
13. The person(s) executing this Amendment No. 2 on behalf of each of the parties hereto
represent and warrant that (i) such party is duly organized and existing, (ii) they are duly
882/014122-0001
549555.01 a10/13/04 -3- t, 37
authorized to execute and deliver this Amendment No. 2 on behalf of said party, (iii) by so
executing this Amendment No. 2 such party is formally bound to the provisions of this
Amendment No. 2, and (iv) the entering into this Amendment No. 2 does not violate any
provision of any other agreement to which such party is bound. -
[End — Signature Page Follows]
ty- 1
882/014122-0001
549555.01 a10/13/04 -4-
IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read
this Amendment No. 2, understands it, and hereby executes this Amendment No. 2 to be
effective as of the day and year first written above.
Date:
Date:
"Developer"
SANTA ROSA DEVELOPMENT, INC.,
2004 a California corporation
By:
Michael Shovlin
Its: President
"Agency"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
2004 . By:
Executive Director
ATTEST:
June Greek, Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
By:
M. Katherine Jenson, Agency Counsel
13
882/014122-0001 3 9
549555.01 a10/13/04 -5-
EXHIBIT "A"
SCHEDULE OF PERFORMANCE
[See Following Pages]
882/014122-0001
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40-
14
ATTACHMENT NO. 4
SCHEDULE OF PERFORMANCE
ACTIVITY
TIME FRAME
1.
Agency approves this Agreement.
Completed.
2.
Agency and Developer execute
Completed.
Agreement and open Escrow.
3.
Developer provides evidence of insurance
Completed.
to Agency.
4.
Developer submits initial set of
Completed.
documents to City as necessary to prepare
and process Specific Plan, tentative tract
map and Site Development Plan for the
Project and thereafter diligently takes all
necessary actions to obtain City approval
of the same.
5.
Agency and Developer close Escrow on
Completed.
Agency's transfer of title to Site to
Developer.
6.
Developer (i) processes through the City
Within one hundred twenty (120) days after
and causes to be recorded a final Tract
the close of Escrow.
Map for the Project; and (ii) submits to
the City the executed SIA.
7.
Developer processes through the City and
Within thirty (30) days following recordation
obtains all of the remaining Project
of the Tract Map.
Entitlements, except for building permits.
8.
Developer obtains approval from Agency
Prior to City's issuance of the first building
of covenants, conditions, and restrictions
permit for the Project.
providing for maintenance of all
commonly owned -property within the
"Project" (as that term is defined in
Section 302) by a homeowners'
association ("CC&Rs"), which CC&Rs
provide that the City and Agency are third
party beneficiaries with the right, but not
the obligation, to enforce the terms
thereof.
882/014122-0001
549555.01 a10/13/04 1
9.
Developer obtains from the City building
By January 8, 2005.
permits for the three (3) model homes
Developer anticipates will be constructed
on the Site.
10.
Developer obtains from the City building
By January 24, 2005.
permits for the first phase of the Project,
which consists of thirty-seven (37) Units.
11.
Developer obtains from the City building
By May 1, 2005.
permits for the second phase of the
Project, which consists of forty-six (46)
Units.
12.
Developer obtains from the City building
By (see note below).
permits for the third phase of the Project,
which consists of thirty-seven (37) Units.
13.
Developer obtains from the City building
By (see note below).
permits for the fourth phase of the Project,
which consists of twenty-six (26) Units.
14.
Developer commences construction of the
Within sixty (60) days after recordation of the
Project.
Tract Map.
15.
Developer records in the Official Records
Prior to City's issuance of the first certificate
the CC&Rs.
of occupancy for a Unit in the Project.
16.
Developer completes construction of pool
On or before the date Developer receives
and restroom facilities.
certificate of occupancy for thirtieth (30th)
house.
17.
Developer receives certificate of
On or before January 31, 2007 (see note
occupancy for final house.
below).
18.
Agency issues a Certificate of Completion
Within ten (10) days after Agency receipt of
for the improvements or provides
written request from Developer for Certificate
Developer with a written explanation of
of Completion pursuant to Section 315 of the
reasons why such a Certificate shall not be
Agreement.
issued.
It is understood that the foregoing Schedule is subject to all of the terms and conditions of the
text of the Agreement. The summary of items of performance in the Schedule is not intended to
supercede or modify any more complete description in the text; in the event of any conflict or
inconsistency between this Schedule and text of the Agreement, the text of the Agreement shall
govern.
882/014122-0001
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42
Notwithstanding the times set forth in the foregoing Schedule for Developer to (i) obtain
building permits for the third and fourth phases of the Project (Items 12 and 13), or obtain the
certificate of occupancy for the final Unit (Item 18), in the event Developer submits evidence
satisfactory to Agency, in Agency's reasonable discretion, demonstrating that home sales in the
Coachella Valley are currently declining, due to market -driven factors beyond the reasonable
control of Developer, Agency agrees to meet and confer with Developer to discuss extending the
time for Developer's performance of this item.
882/014122-0001
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17
43
EXHIBIT "B"
AMENDED AND RESTATED OPTION AGREEMENT
[See Following Pages]
M],
882/014122-0001
549555.01 a10/13/04 44
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
(SPACE ABOVE THIS LINE FOR RECORDING USE)
(EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383)
AMENDED AND RESTATED OPTION AGREEMENT
SUBORDINATED
NOTICE: This AMENDED AND RESTATED OPTION AGREEMENT contains a
subordination clause which may result in your security interest in the property becoming subject
to and of lower priority than the lien of some other or later security instrument.
THIS AMENDED AND RESTATED OPTION AGREEMENT ("Amended and Restated
Option Agreement") is made this day of (the "Effective Date"), by SANTA
ROSA DEVELOPMENT, INC., a California corporation ("Developer"), and the LA QUINTA
REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency").
RECITALS
A. On or about January 22, 2003, Developer and the Agency entered into an
Affordable Housing Agreement ("Original Affordable Housing Agreement"), pursuant to which
(i) Agency conveyed to Developer that certain real property located at the corner of Avenue 48th
and Adams Street, in the City of La Quinta, County of Riverside, State of California (the "Site");
and (ii) Developer agreed to construct on the Site a "senior citizen housing development," as
defined in Civil Code Section 51.3(b)(4), consisting of not less than one hundred forty-nine (149)
single-family detached homes and related improvements (the "Project"), all as more particularly
described in the Original Affordable Housing Agreement. The Site is legally described in
Exhibit "A", which is attached hereto and incorporated herein by this reference.
B. The Original Affordable Housing Agreement requires, among other terms, that
Developer grant to Agency an option to repurchase the Site from Developer if Developer fails to
commence, continuously proceed with, or complete construction within certain specified time
frames, or if Developer transfers the Site in violation of the terms of the Original Affordable
Housing Agreement, all as more particularly described therein. Developer's grant to Agency of
the aforementioned option was to be effected pursuant to an Option Agreement substantially in
the form attached to the Original Affordable Housing Agreement as Attachment No. 7 (the
"Original Option Agreement").
882/014122-0001 -1- 19
549555.01 a10/13/04 45
C. On or about June 22, 2004, and prior to Agency's conveyance of the Site to
Developer, the Agency and Developer amended the Original Affordable Housing Agreement and
the Original Option Agreement by that certain Waiver and Replacement of Conditions for
Closing for the Affordable Housing Agreement and for the Option Agreement ("Amendment
No. 1") to revise, among other terms, various provisions related to the "Project Entitlements" (as
that term is defined in the Original Affordable Housing Agreement). The Original Affordable
Housing Agreement, as amended by Amendment No. 1, is hereinafter referred to as the
"Amended Affordable Housing Agreement" and the Original Option Agreement, as amended by
Amendment No. 1, is hereinafter referred to as the "Amended Option Agreement".
D. On or about July 21, 2004 (the "Closing Date"), Agency conveyed to Developer
the Site and Developer and Agency executed and recorded against the Site, in the Official
Records of the County of Riverside, as Instrument No. 2004-0565213, the Amended Option
Agreement.
E. Agency and Developer have, concurrently with the execution hereof, entered into
that certain Amendment No. 2 to Affordable Housing Agreement ("Amendment No. 2") to
further revise the provisions related to the Project Entitlements, and to revise the subordination
provisions set forth in the Amended Option Agreement. The Amended Affordable Housing
Agreement, as amended by Amendment No. 2, is hereinafter referred to as the "Affordable
Housing Agreement". To effect the revisions set forth in Amendment No. 2, Developer and
Agency now desire to replace the Amended Option Agreement, in its entirety, with this
Amended and Restated Option Agreement. All defined terms used herein shall have the same
meaning as set forth in the Affordable Housing Agreement unless otherwise stated.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and incorporating the above recitals and all of the terms and
conditions contained in the Affordable Housing Agreement, (i) Agency and Developer hrereby
agree that the Amended Option Agreement is replaced, in its entirety, by this Amended and
Restated Option Agreement; and (ii) Developer hereby grants to Agency the following
repurchase options:
1. Repurchase Option I - Failure to Commence Construction
Developer hereby grants to Agency an exclusive option to repurchase the Site
("Repurchase Option I") if Developer fails to (i) commence construction of the Project within
one hundred eighty (180) days after the Closing Date, subject to Sections 4(b) and 4(h) below; or
(ii) furnish to the City of La Quinta, within one hundred twenty (120) days after the Closing
Date, a fully secured and executed Subdivision Improvement Agreement ("SIA") in the form
currently used by the City guaranteeing the construction of all on and off -site improvements
required in connection with the Project, in accordance with the Conditions of Approval for
Tentative Tract Map 31311, which was approved by the City pursuant to City Council
Resolution 2003-112, adopted on November 18, 2003.
For the purposes of this Amended and Restated Option Agreement, Developer shall have
"commenced construction of the Project" at the time Developer has completed all of the
following: (1) obtained all necessary bonds and permits to complete the mass grading of the
882/014122-0001 _ w,
549555.01 a10/13/04 -2- 46
Site; (2) completed all necessary pre -grading activities, including, but not limited to, fencing and
watering the Site; and (3) conducted mass grading activities on the Site for a minimum of fifteen
(15) days (with only those days where actual and continuous mass grading activities are
conducted counting towards this requirement); or
In the event of Developer's failure to commence construction within the one hundred
eighty (180) day time period referenced above, or to furnish to the City an SIA within the one
hundred twenty (120) day time period referenced above, Agency shall be entitled to exercise, but
is not obligated to exercise, the foregoing .option for a period of ninety (90) days following the
expiration of the one hundred eighty (180) day period or one hundred twenty (120) day period
(as applicable) described above ("Repurchase Option I Period").
(a) Exercise of Option
Agency shall exercise the Repurchase Option I by giving written notice to Developer
("Agency's Notice of Option 1 Exercise"), in accordance with Section 5 of this Amended and
Restated Option Agreement, prior to the expiration of the Repurchase Option I Period. Failure
of Agency to exercise the Repurchase Option I shall constitute a waiver by Agency of its
exercise of this Repurchase Option I only, and shall not constitute a waiver by Agency of any
remedies it may have under the terms of the Affordable Housing Agreement or of any other
agreement for Developer's failure to timely commence construction (as defined herein or as such
term may be defined in any other agreement). Any Agency waiver as described in the preceding
sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions
of the Affordable Housing Agreement.
(b) Repurchase Price and Escrow - Repurchase Option I
Agency's repurchase price for the Site ("Repurchase Option I Repurchase Price") shall be
Developer's Purchase Price for the Site ($1.00).
Within five (5) business days after Agency has exercised Repurchase Option I, or as soon
thereafter as reasonably practicable, an escrow shall be opened with an escrow company selected
by Agency for the reconveyance of the Site to Agency. Agency shall deposit the Repurchase
Option I Repurchase Price in escrow not later than one (1) business day prior to the anticipated
close of escrow date. The escrow shall be subject to Agency's approval of a then -current
preliminary title report and, at Agency's option, environmental and other site testing. Any
monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are) created
concurrent with or after the Close of Escrow that conveyed the Site from Agency to Developer
shall be removed by Developer at its sole expense prior to the close of escrow pursuant to this
Section l (b) unless such exception(s) is (are) accepted by Agency in its sole discretion; provided,
however, that Agency shall accept the following exceptions to title: (i) current taxes not yet
delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the
Site (Attachment No. 5 to the Affordable Housing Agreement); and (iii) matters shown as
printed exceptions in the standard form ALTA policy of title insurance. In the event the Site is
encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally instruct the
escrow agent to satisfy the indebtedness secured thereby out of the proceeds payable to
Developer through the foregoing escrow. Any additional amount necessary to satisfy such
882/014122-0001 1
549555.01 a10/13/04 3 47
indebtedness shall be paid by Developer. Agency and Developer shall each pay one-half (1/2) of
the escrow fees. Developer shall pay for documentary tax stamps, recording fees, and for an
ALTA standard form owner's policy of title insurance in the amount of the Repurchase Option I
Repurchase Price showing title vested in Agency free and clear of all liens and encumbrances
except those permitted by this paragraph. (Agency shall pay the portion of the title insurance
premium attributable to any extra or extended coverages or if the amount of insurance requested
by Agency is higher than the Repurchase Option I Repurchase Price.) Any other costs and
expenses shall be allocated between the parties in the manner customary for a commercial
property conveyance in Riverside County. Agency shall have thirty (30) days after exercise of
the Repurchase Option I to enter upon the Site to conduct any tests, inspections, investigations,
or studies of the condition of Site. Developer shall permit Agency access to the Site for such
purposes. Agency shall indemnify, defend, and hold harmless Developer and its officers,
directors, shareholders, employees, agents, and representatives from and against all claims,
liabilities, or damages, and including expert witness fees and reasonable attorney's fees and
costs, arising out of any such testing, inspection, or investigatory activity on the Site. Escrow
shall close promptly after acceptance by Agency of the condition of title and the physical and
environmental condition of the Site.
2. Repurchase Option II - Failure to Continuously Proceed With or Complete
Construction
Developer hereby grants to Agency an exclusive option to repurchase the Site
("Repurchase Option II") if, (i) after commencement of construction, Developer fails to
continuously proceed with, and complete, construction of the Project on the Site (for purposes of
this Amended and Restated Option Agreement, "continuously proceed with construction" shall
be defined as construction that is interrupted, if at all, for periods of no longer than ninety (90)
days, and "completion of construction of the Project" shall be defined as the issuance by the City
of La Quinta ("City") to Developer of a Certificate of Occupancy for the Project) by January 31,
2007, subject to Sections 4(b) and 4(h) below (the "Completion Deadline"); or (ii) Developer
fails to comply with the provisions of Section 305(b), (c) or (d) of the Affordable Housing
Agreement within the time periods specified in said subsections.
In the event of Developer's failure to continuously proceed with, or to complete,
construction of the Project by the Completion Deadline, or to timely comply with the provisions
of Section 305(b), (c), or (d) of the Affordable Housing Agreement, Agency shall be entitled to
exercise, but is not obligated to exercise, the foregoing option for a period of ninety (90) days
following the Completion Deadline or the deadline for completing the obligations in Section
305(b), (c), or (d) (as applicable) ("Repurchase Option II Period").
(a) Exercise of Option
Agency shall exercise the Repurchase Option II by giving written notice to Developer, in
accordance with Section 5 of this Amended and Restated Option Agreement, prior to the
expiration of the Repurchase Option II Period. Failure of Agency to exercise the Repurchase
Option H shall constitute a waiver by Agency of Developer's breach of its obligation to timely
complete construction. Any Agency waiver as described in the preceding sentence shall not be
882/014122-0001 48 22
549555.01 a10/13/04 4-
deemed a waiver of any other Developer breach of the terms or conditions of the Affordable
Housing Agreement.
(b) Determination of Repurchase Price - Repurchase Option II
Agency and Developer shall comply with the following terms and provisions to
determine Agency's repurchase price for the Site ("Repurchase Option II Repurchase Price"), the
escrow for the reconveyance, and other matters therein discussed:
(1) Within ten (10) days after Agency's exercise of Repurchase Option
II, Developer shall deliver to Agency a list of improvements, if any, constructed
by Developer on the Site that are usable for the purposes for which the Site was
conveyed to Developer ("Site Improvements").
(2) Developer, within fifteen (15) days after submission of the list of
Site Improvements to Agency, shall deliver to Agency a statement of Developer's
costs for each of the Site Improvements ("Statement of Costs").
(3) After Agency's receipt of the Site Improvements list and the
Statement of Costs, Agency and Developer shall consult with each other in good
faith the purpose of arriving at an agreement concerning the Site Improvements
that are usable to Agency ("Usable Improvements") and the costs for those Usable
Improvements. Developer agrees that the final determination of which of the Site
Improvements are Usable Improvements shall be made by Agency in its sole
discretion. The Site Improvements that are not included within the list of Usable
Improvements shall be deemed "Unusable Improvements." The "Cost of the
Usable Improvements" shall be the lesser of:
(a) an amount equal to Developer's construction costs actually
incurred as of the date of Agency's exercise of Repurchase Option II
("Construction Cost Percentage"), as verified by Developer's provision of
all information pertaining to its cost of construction for the Project on the
Site up to the date of Agency's exercise of Repurchase Option II,
including construction contracts, invoices, and such other information and
documents reasonably required by Agency to verify the Construction Cost
Percentage; or
(b) a cost mutually determined by Agency or Developer, or in
the event Agency and Developer cannot arrive at a mutually agreeable
determination of costs for the Usable Improvements, the cost shall be
defined as the costs as listed in Developer's Statement of Costs unless
Agency, in its sole discretion and at Agency's cost, obtains a written
appraisal of the fair market value of the Usable Improvements from an
independent and qualified MAI appraiser ("Agency's Usable
Improvements Appraisal"). If Agency, in its sole discretion, decides to
use Agency's Usable Improvements Appraisal as a basis for a portion of
the Repurchase Price as described below, Agency shall provide a copy of
882/014122-0001 23
549555.01 a10/13/04 -5 49
the Agency's Usable Improvements Appraisal to Developer and the
following shall apply:
(i) If Developer does not agree with Agency's Usable
Improvement Appraisal, Developer shall notify Agency in writing
within five (5) business days of receipt thereof. Within thirty (30)
days thereafter, Developer, at its cost, shall deliver to Agency a
written appraisal of the fair market value of the Usable
Improvements prepared by an independent and qualified MAI
appraiser ("Developer's Usable Improvements Appraisal").
(ii) If Developer fails to deliver Developer's Usable
Improvements Appraisal to Agency within the time provided,
Agency's Usable Improvements Appraisal shall constitute the final
and binding determination of the fair market value of the Usable
Improvements.
(iii) If Developer delivers Developer's Usable
Improvements Appraisal to Agency within the time provided, and
such Developer's Usable Improvements Appraisal is lower than
Agency's Usable Improvements Appraisal, then Developer's
Usable Improvements Appraisal shall constitute the final and
binding determination of the fair market value of the Usable
Improvements.
(iv) If Developer delivers Developer's Usable
Improvements Appraisal to Agency within the time provided, and
such Developer's Usable Improvements Appraisal is higher than
Agency's Usable Improvements Appraisal, but less than or equal
to five percent (5%) higher, the average of Developer's Usable
Improvements Appraisal and Agency's Usable Improvements
Appraisal shall constitute the final and binding determination of
the fair market value of the Usable Improvements.
(v) If Developer delivers Developer's Usable
Improvements Appraisal to Agency within the time provided, and
such Developer's Usable Improvements Appraisal is higher than
Agency's Usable Improvements Appraisal, and is more than five
percent (5%) higher, Agency and Developer shall appoint, and
shall share the cost of, a third independent and qualified MAI
appraiser who shall perform a review appraisal and shall render a
determination of the fair market value of the Usable
Improvements, which value cannot be higher than the amount of
Developer's Usable Improvements Appraisal. If Agency and
Developer cannot agree on a third appraiser, then an amount equal
to twenty-five percent (25%) of the difference between Agency's
and Developer's Usable Improvements Appraisals shall be added
882/014122-0001 �� O 24
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to Agency's Usable Improvements Appraisal and that sum shall
constitute the final and binding determination of the fair market
value of the Usable Improvements.
Agency's Repurchase Option II Repurchase Price for the Site shall be the sum of (i) and
(ii): (i) the Repurchase Option I Repurchase Price; and (ii) the lesser of (A) the Cost of Usable
Improvements (if any) or (B) the fair market value of Usable Improvements (if any) determined
as set forth hereinabove.
Within five (5) days after Agency has exercised Repurchase Option II, or as soon
thereafter as reasonably practicable, an escrow shall be opened with an escrow company selected
by Agency for the reconveyance of the Site to Agency. Agency shall deposit the Repurchase
Option II Repurchase Price in escrow not later than one (1) business day prior to the anticipated
close of escrow date. The escrow shall be subject to approval of a then -current preliminary title
report and, at Agency's option, environmental and other site testing. Any monetary lien(s) or
encumbrance(s) shown on such preliminary title report that is (are) created concurrent with or
after the Close of Escrow that conveyed the Site from Agency to Developer shall be removed by
Developer at its sole expense prior to the close of escrow pursuant to this Section 2(c) unless
such exception(s) is (are) accepted by Agency in its sole discretion; provided, however, that
Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii)
matters affecting title existing on the date of recordation of the Grant Deed to the Site
(Attachment No. 5 to the Affordable Housing Agreement); and (iii) matters shown as printed
exceptions in the standard form ALTA owner's policy of title insurance. In the event the Site or
any portion thereof is encumbered by a mortgage or deed of trust, Agency shall be permitted to
unilaterally ' instruct the escrow agent to satisfy the indebtedness secured thereby out of the
proceeds payable to Developer through the foregoing escrow. Any additional amount necessary
to satisfy such indebtedness shall be paid by Developer. Agency and Developer shall each pay
one-half (1 /2) of the escrow fees; provided, however, that Agency shall deduct its share from the
price paid to Developer to repurchase the Site, as described above. Developer shall pay for
documentary tax stamps, recording fees, and for a ALTA standard form owner's policy of title
insurance in the amount of the Repurchase Option II Repurchase Price showing title vested in
Agency free and clear of all liens and encumbrances except those permitted by this paragraph.
Any other costs and expenses shall be allocated between the parties in the manner customary for
a commercial property conveyance in Riverside County. Agency shall have thirty (30) days after
exercise of the Repurchase Option II, to enter upon the Site to conduct any tests, inspections,
investigations, or studies of the condition of Site. Developer shall permit Agency access to the
Site for such purposes. Agency shall indemnify, defend, and hold harmless Developer and its
officers, directors, shareholders, employees, agents, and representatives from and against all
claims, liabilities, or damages, and including expert witness fees and reasonable attorney's fees
and costs, arising out of any such testing, inspection, or investigatory activity on the Site.
Escrow shall close promptly after acceptance by Agency of the condition of title and the physical
and environmental condition of the Site.
3. Repurchase Option III - Transfer of the Site
Developer hereby grants to Agency an exclusive option to repurchase the Site
(Repurchase Option III) if, prior to the time Agency issues a Certificate of Completion for the
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Project, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms
of the Affordable Housing Agreement. In the event of Developer's transfer of the Site in
violation of the Affordable Housing Agreement, Agency shall be entitled to exercise, but is not
obligated to exercise, the foregoing option for a period of ninety (90) days following the transfer
that gives rise to Agency's option under this Section ("Repurchase Option III Period").
(a) Exercise of Option
Agency shall exercise the Repurchase Option III by giving written notice to Developer
("Agency's Notice of Option III Exercise"), in accordance with Section 5 of this Amended and
Restated Option Agreement, prior to the expiration of the Repurchase Option III Period. Failure
of Agency to exercise the Repurchase Option III shall constitute a waiver by Agency of its
exercise of this Repurchase Option III only, and shall not constitute a waiver by Agency of any
remedies it may have under the terms of the Affordable Housing Agreement or of any other
agreement for Developer's failure to timely commence construction (as defined herein or as such
term may be defined in any other agreement). Any Agency waiver as described in the preceding
sentence shall not be deemed a waiver of any other Developer breach of the terms or conditions
of the Affordable Housing Agreement.
(b) Repurchase Price and Escrow - Repurchase Option III
Agency's repurchase price for the Site ("Repurchase Option III Repurchase Price") shall
be as follows:
(i) In the event Developer has not yet commenced construction of the
Project at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III
Price shall be the Repurchase Option I Repurchase Price, as set forth in Section l (b) of this
Amended and Restated Option Agreement.
(ii) In the event Developer has commenced construction of the Project
at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III
Repurchase Price shall be the Repurchase Option II Repurchase Price, as set forth in Section 2(b)
of this Amended and Restated Option Agreement.
4. Additional Terms Applicable to the Repurchase Options
The following additional terms shall apply to Repurchase Option I, Repurchase Option II,
and Repurchase Option III, as applicable:
(a) The Repurchase Option I, Repurchase Option II, and Repurchase Option
III created hereby shall be irrevocable by Developer and, subject to any
subordination by Agency in accordance with paragraph (i) below, shall be
binding upon the successors and assigns of Developer.
(b) Notwithstanding anything herein to the contrary, Agency shall not be
entitled to exercise Repurchase Option I, Repurchase Option II, or
Repurchase Option III until Agency has provided a written notice to
Developer regarding (i) Developer's failure to commence, continuously
882/014122-0001 y 26
549555.01 a10/13/04 -8- 52
proceed with, or complete, construction of the Project, or (ii) Developer's
transfer of the Site in violation of the Affordable Housing Agreement, as
applicable (with each of (i) and (ii) above referred to hereinafter as an
"Option Triggering Event"), and Developer has not, within sixty (60) days
after receipt of such notice, cured, corrected, or remedied such Option
Triggering Event, or, for those Option Triggering Events that cannot
reasonably be cured, corrected, or remedied within sixty (60) days,
commenced to cure, correct or remedy such Option Triggering Event
within said sixty (60) day period, and diligently prosecute the same to
completion.
(c) Agency shall have sixty (60) days after exercising Repurchase Option I (or
Repurchase Option III if Agency exercises Repurchase Option III and the
Repurchase Option I Repurchase Price is the applicable repurchase price
for the Site) to deliver to Developer a written commitment to close
escrow, and escrow shall close no later than ninety (90) days after
Agency's notice of commitment to close escrow, unless an extension to
any of the foregoing time periods is/are required due to a delay not the
fault of Agency, or the parties, each in its sole discretion, mutually agree
to extend one or both of such periods
(d) Agency shall have until the later of (i) sixty (60) days after exercising
Repurchase Option II (or Repurchase Option III if Agency exercises
Repurchase Option III and the Repurchase Option II Repurchase Price is
the applicable repurchase price for the Site), or (ii) thirty (30) days after
the determination of the purchase price pursuant to Section 2(b) of this
Amended and Restated Option Agreement (whether said purchase price is
the Repurchase Option II Repurchase Price or the Repurchase Option III
Repurchase Price), to deliver to Developer a written commitment to close
escrow, and escrow shall close no later than ninety (90) days after
Agency's notice of commitment, unless an extension to any of the
foregoing time periods is/are required due to a delay not the fault of
Agency, or the parties, each in its sole discretion, mutually agree to extend
one or both of such periods
(e) In the event that, at the time Agency exercises Repurchase Option II or
Repurchase Option III Developer has obtained a Certificate of Completion
from the City for one or more of the lots that comprise the Site, (i) the
provisions of this Amended and Restated Option Agreement shall apply
only to that portion of the Site for which Certificates of Completion have
not been issued ("Uncompleted Portion of the Site") and any calculations
for determining the Repurchase Option II Repurchase Price or the
Repurchase Option III Repurchase Price shall be based solely upon the
Uncompleted Portion of the Site, and (ii) Developer agrees to cooperate
with Agency to effect the subdivision of the Uncompleted Portion of the
Site from the completed portions of the Site (those portions of the Site for
which Certificates of Completion have been issued).
r
882/014122-0001 - -
549555.01 a10/13/04 9
(f) Notwithstanding any covenant, term, or provision in this Section 4 to the
contrary, Agency shall not be. obligated to exercise Repurchase Option I,
Repurchase Option II, or Repurchase Option III, or once exercised, to
close escrow. Agency shall not be liable to Developer for any costs
incurred by Developer occasioned by Agency's decision not to close
escrow.
(g) In the event Developer commences and completes construction of the
Project and Agency has not exercised Repurchase Option I, Repurchase
Option II, or Repurchase Option III, Agency shall execute and record a
termination of this Amended and Restated Option Agreement within
fifteen (15) business days after the final and permanent Certificate of
Occupancy is issued by the City.
(h) Notwithstanding anything to the contrary herein, in addition to specific
provisions of this Amended and Restated Option Agreement, performance
by either party hereunder shall not be deemed to be in default where
delays or defaults are due to war; insurrection; strikes; lock -outs; riots;
floods; earthquakes; fires; casualties; supernatural causes; acts of the
public enemy; epidemics; quarantine restrictions; freight embargoes; lack
of transportation; governmental restrictions or priority litigation; unusually
severe weather; inability to secure necessary labor, materials or tools; acts
of the other party; acts or the failure to act of a public or governmental
agency or entity (except that acts or the failure to act of Agency shall not
excuse performance by Agency unless the act or failure is caused by the
acts or omissions of Developer); or any other causes beyond the
reasonable control or without the fault of the party claiming an extension
of time to perform. In the event of such a delay .(herein "Enforced
Delay"), the party delayed shall continue to exercise commercially
reasonable efforts to minimize the period of the delay. An extension of
time for any such cause shall be limited to the period of the Enforced
Delay, and shall commence to run from the time of the commencement of
the cause, provided notice by the party claiming such extension is sent to
the other party within thirty (30) days following the commencement of the
cause. The following shall not be considered as events or causes beyond
the control of Developer, and shall not entitle Developer to an extension of
time to perform: (i) Developer's failure to obtain financing for the Project,
(ii) Developer's failure to negotiate agreements with prospective tenants
or users for the Project, (iii) interest rates or (iv) economic or market
conditions. Times of performance under this Amended and Restated
Option Agreement may also be extended by mutual written agreement by
Agency and Developer. Agency's Executive Director shall also have the
authority on behalf of Agency to administratively approve extensions of
time not to exceed a cumulative total of one (1) year.
(i) Subordination. The Agency agrees to subordinate Repurchase Option II
and Repurchase Option III to Developer's construction loan, provided that
el a
882/014122-0001 t' V
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`J
(i) the maximum cumulative principal amount of the construction loan
shall not exceed ninety percent (90%) of the lender's appraised value of
the Site upon completion of the Project, which amount shall be verified in
writing to Agency Executive Director's reasonable satisfaction; (ii) the
loan(s) shall obligate Developer to expend loan proceeds for no other
purpose than the Project; and (iii) the loan(s) shall provide that any notice
of a Developer breach or default shall also be sent to the Agency at the
address listed in Section 5 and that upon receipt of such notice, Agency
shall have the right to (A) cure the noticed breach or default, (B) negotiate
with the lender regarding the noticed breach or default, and (C) purchase
the. Site from Developer subject to the construction lender's deed of trust,
without the consent of Developer or the holder of the construction lender's
deed of trust, and that Agency's exercise of the foregoing rights shall not,
in and of itself, give rise to any right on the part of the lender to accelerate
the amounts due under the loan.
5. Notices. Demands and Communications Between the Parties
Formal notices, demands, and communications between Agency and Developer shall be
given either by (i) personal service, (ii) delivery by reputable document delivery service such as
Federal Express that provides a receipt showing date and time of delivery, or (iii) or by mailing
in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to:
To Agency: La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
With a copy to: Rutan & Tucker, LLP
611 Anton Blvd., Suite 1400
Costa Mesa, California 92626
Attn: M. Katherine Jenson, Esq.
To Developer: Santa Rosa Development, Inc.
71084 Tamerisk Lane
Rancho Mirage, CA 92270
Attn: Michael Shovlin
With a copy to: Best Best & Krieger, LLP
74-760 Highway 111, Suite 200
Indian Wells, California 92210
Attn: Daniel E. Olivier, Esq.
Notices personally delivered or delivered by document delivery service shall be deemed
effective upon receipt. Notices mailed in the manner provided above shall be deemed effective
on the second business day following deposit in the United States mail. Such written notices,
882/014122-0001 g
549555.01 a10/13/04 -11- 55
demands, and communications shall be sent in the same manner to such other addresses as either
party may from time to time designate by mail.
6. Agency's Option to Acquire Plans
If Agency exercises Repurchase Option I, Repurchase Option II, or Repurchase Option
III in accordance with this Agreement, at the option of the Agency, which may be exercised in
the Agency's sole and absolute discretion, the Developer shall deliver to the Agency an executed
assignment in a form reasonably acceptable to the Agency of the Developer's right to use all
plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps,
landscape plans, utilities plans, soils reports, noise studies, environmental assessment ' reports,
grading plans and any other materials relating to the construction of the Project on the Site (the
"Plans"), together with copies of all of the Plans, as have been prepared for the development of
the Site to date of the termination. Notwithstanding the foregoing, however, Developer does not
covenant to convey to the Agency the copyright or other ownership rights of third parties.
Agency understands and agrees that the assignment to Agency under this Section 6 is subject and
subordinate to any assignment which Developer may make to a lender providing financing for
the Project, and Agency agrees to execute any documents required by such lender
acknowledging and effectuating such subordination of Agency's rights in and to the assignment.
Agency's acquisition or use of the Plans or any of them shall be without any representation or
warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall
assume all risks in the use of the Plans.
7. Applicable Law and Forum; Attorne s Fees
The Municipal and Superior Courts of the State of California in the County of Riverside
shall have the exclusive jurisdiction of any litigation between the parties arising out of this
Amended and Restated Option Agreement. This Amended and Restated Option Agreement shall
be governed by, and construed under, the laws of the State of California. In addition to any other
rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or
remedy any default, to recover damages for any default, to compel specific performance of this
Amended and Restated Option Agreement, to obtain declaratory or injunctive relief, or to obtain
any other remedy consistent with the purposes of this Amended and Restated Option 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
times, of any other rights or remedies for the same default or any other default by the other party.
Service of process on Agency shall be made in the manner required by law for service on a
public entity. Service of process on Developer shall be made in any manner permitted by law
and shall be effective whether served within or outside of California.
If either party to this Amended and Restated Option Agreement is required to initiate or
defend, or is made a party to, any action or proceeding in any way connected with this Amended
and Restated Option Agreement, the party prevailing in the final judgment in such action or
proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable
attorney's fees. Attorney's fees shall include reasonable costs for investigating such action,
conducting discovery, retaining expert witnesses, and all other necessary costs the court allows
which are incurred in such litigation.
30
882/014122-0001
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�s
8. Nonliability of Agency Officials and Employees
No officer, official, employee, agent, or representative of Agency shall be personally
liable to Developer or any successor in interest, in the event of any default or breach by Agency,
or for any amount which may become due to Developer or its successor, or for breach of any
obligation of the terms of this Amended and Restated Option Agreement.
9. Nondiscrimination
Developer covenants for itself, its heirs, executors, assigns, and all persons claiming
under or through them, that there shall be no discrimination against any person on account of
race, color, creed, religion, sex, marital status, national origin, or ancestry with respect to this
Amended and Restated Option Agreement or use of the Site.
10. Interpretation
The terms of this Amended and Restated Option Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or against either
party by reason of the authorship of this Amended and Restated Option Agreement or any other
rule of construction which might otherwise apply. The Section headings are for purposes of
convenience only, and shall not be construed to limit or extend the meaning of this Amended and
Restated Option Agreement.
11. Entire Agreement
This Amended and Restated Option Agreement integrates all of the terms and conditions
mentioned herein, or incidental hereto, and supersedes all negotiations or previous agreements
between the parties with respect to all or any part of the subject matter hereof.
All waivers of the provisions of this Amended and Restated Option Agreement must be
in writing and signed by the appropriate authorities of the party to be charged, and all
amendments and modifications hereto must be in writing and signed by the appropriate
authorities of Agency and Developer.
12. Counterparts
This Amended and Restated Option Agreement may be executed in counterparts, each of
which, after all the parties hereto have signed this Amended and Restated Option Agreement,
shall be deemed to be an original, and such counterparts shall constitute one and the same
instrument.
13. Severability
In the event any section or portion of this Amended and Restated Option Agreement shall
be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the
remaining provisions shall remain in effect, and the parties hereto shall take further actions as
may be reasonably necessary and available to them to effectuate the intent of the parties as to all
provisions set forth in this Amended and Restated Option Agreement.
`F
882/014122-0001 5 7 31
549555.01 a10/13/04 -13-
IN WITNESS WHEREOF, the parties have executed this Amended and Restated Option
Agreement as of the date first above written.
"DEVELOPER"
SANTA ROSA DEVELOPMENT, INC.,
a California corporation
By:
Michael Shovlin
Its: President
"AGENCY"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
LE
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the La Quinta Redevelopment
Agency
Executive Director
882/01412M001 32
549555.01 a10/13/04 -14- ;j Q
STATE OF CALIFORNIA )
)SS
COUNTY OF )
On , before me, ,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
) ss
COUNTY OF )
On , before me, ,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
882/014122-0001 I- 33
549555.01 a10/13/04 -IS-
�9
EXHIBIT "A'
LEGAL DESCRIPTION OF THE SITE
[See Following Page]
34
882/014122-0001
549555.01 a10/13/04 60
RESOLUTION NO. RA 2004-
A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY
APPROVING AMENDMENT NO. 2 TO AGREEMENT FOR PURCHASE
AND SALE AND ESCROW INSTRUCTIONS BETWEEN THE AGENCY
AND 48T" AND ADAMS, LLC, FOR THE PROPERTY LOCATED AT THE
NORTHEAST CORNER OF AVENUE 48 AND ADAMS STREET '
WHEREAS, the La Quinta Redevelopment Agency ("Agency") is a
public body, corporate and politic, organized and existing under the California
Community Redevelopment Law ("Health & Safety Code § 33000 et seq.) ( CRL ),
and
WHEREAS, pursuant to the CRL, the City Council of the City of La
Quinta ("City" or "City Council," as applicable) approved and adopted the
Redevelopment Plan ("Redevelopment Plan") for Project Area No. 2 ("Project
Area"), on May 16, 1989, by Ordinance No. 139; and
WHEREAS, on or about January 22, 2003, the Agency and Santa
Rosa Development, Inc., a California corporation (the "Original Developer") entered
into that certain Agreement for Purchase and -Sale and Escrow Instructions (the
"Original P&S Agreement"), pursuant to which Agency agreed to sell to the
Original Developer, and the Original Developer agreed to purchase from Agency, for
the purchase price of Eight Hundred One Thousand Three Hundred Fifty -Eight
Dollars ($801,358.00), that certain real property located at the corner of Avenue
48th and Adams Street, in the City of La Quinta, County of Riverside, State of
California (the "Site"), and to construct thereon a residential development
containing thirty-six (36) single family homes and related landscaping and other
improvements (the "Project"); and
WHEREAS, on or about June 22, 2004, the Agency and the Original
Developer amended the Original P&S Agreement and the Option Agreement
attached as Exhibit "E" to the Original P&S Agreement (the "Original Option
Agreement") by that certain Waiver and Replacement of Conditions for Closing for
the Purchase and Sale Agreement and for the Option Agreement ("Amendment No.
1") to revise, among other terms, various provisions related to the Project
Entitlements" (as that term is defined in the Original P&S Agreement). The Original
P&S Agreement, as amended by Amendment No. 1, is hereinafter referred to as the
"Amended P&S Agreement" and the Original Option Agreement, as amended by
Amendment No. 1, is hereinafter referred to as the "Amended Option Agreement";
and
882/015610-0043
550105.01 a10/15/04
35
61
Resolution No. RA 2004-
Amendment No. 2 to 481h & Adams
Purchase & Sale Agreement
Adopted: October 19, 2004
Page 2
WHEREAS, on or about , 2004, the Original Developer
assigned all of its right, title and interest in and to the Amended P&S Agreement to
48t' and Adams, LLC, a California limited partnership; and
WHEREAS, Agency staff has negotiated a second amendment to the
Amended P&S Agreement and the Amended Option Agreement ("Amendment No.
2") to further revise the provisions related to the Project Entitlements, and to revise
the subordination provisions set forth in the Amended Option Agreement.; and
WHEREAS, Amendment No. 2 is In accordance with the
Redevelopment Plan and is of benefit to the Project Area and the City of La Quinta;
and
NOW, THEREFORE, BE IT RESOLVED BY THE LA QUINTA
REDEVELOPMENT AGENCY AS FOLLOWS:
1. That the above recitals are true and correct and incorporated herein.
2. That the La Quinta Redevelopment Agency hereby finds and
determines that Amendment No. 2 effectuates the purposes of the Community
Redevelopment Law (Health & Safety Code § 33000 et seq.) and of the
Redevelopment Plan and is in the best interests of the citizens of the City of La
Quinta.
3.. Amendment No. 2, a copy of which is on file with the Agency
Secretary, is hereby approved. The Agency Executive Director and Agency Counsel
are hereby authorized and directed to make final modifications to Amendment No. 2
that are consistent with the substantive terms of Amendment No. 2 approved
hereby, and the Agency Executive Director is authorized to thereafter sign
Amendment No. 2 on behalf of the Agency.
4. The Agency Executive Director is authorized and directed, on behalf of
the Agency, to (i) sign such other and further documents, including but not limited
to subordination agreements and escrow instructions that require the Agency's
signature, and (ii) take such other and further actions, as may be necessary and
proper to carry out the terms of Amendment No. 2.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the La
Quinta Redevelopment Agency held this 19th day of October, 2004, by the
following vote:
AYES:
882/015610-0043
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j� 36
62
Resolution No. RA 2004-
Amendment No. 2 to 4811 & Adams
Purchase & Sale Agreement
Adopted: October 19, 2004
Page 3
NOES:
ABSENT:
ABSTAIN:
ATTEST:
JUNE S. GREEK, Agency Secretary
City of La Quinta, California
APPROVED AS TO FORM:
M. KATHERINE JENSON, Agency Counsel
City of La Quinta, California
882/015610-0043
550105.01 a10/15/04
TERRY HENDERSON, Agency Chair
City of La Quinta, California
37
63
AMENDMENT NO. 2 TO AGREEMENT FOR PURCHASE AND SALE
AND ESCROW INSTRUCTIONS
THIS AMENDMENT NO. 2 TO AGREEMENT FOR PURCHASE AND SALE AND
ESCROW INSTRUCTIONS ("Amendment No. 2") is made and entered into as of
, 2004 (the "Effective Date") by and between the LA QUINTA
REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Agency"), and 48th &
ADAMS, LLC, a California limited liability company ("Developer").
RECITALS:
A. On or about January 22, 2003, the Agency and Santa Rosa Development, Inc., a
California corporation (the "Original Developer") entered into that certain Agreement for
Purchase and Sale and Escrow Instructions (the "Original P&S Agreement"), pursuant to
which Agency agreed to sell to Developer, and Developer agreed to purchase from Agency, that
certain real property located at the corner of Avenue 48th and Adams Street, in the City of La
Quinta, County of Riverside, State of California (the "Site"), and to construct thereon a
residential development containing thirty-six (36) single family homes and related landscaping
and other improvements (the "Project").
B. On or about June 22, 2004, the Agency and Developer amended the Original P&S
Agreement and the Option Agreement attached as Exhibit "B" to the Original P&S Agreement
(the "Original Option Agreement") by that certain Waiver and Replacement of Conditions for
Closing for the Purchase and Sale Agreement and for the Option Agreement ("Amendment
No. 1 ") to revise, among other terms, various provisions related to the "Project. Entitlements"
(as that term is defined in the Original P&S Agreement). The Original P&S Agreement, as
amended by Amendment No. 1, is hereinafter referred to as the "Amended P&S Agreement"
and the Original Option Agreement, as amended by Amendment No. 1, is hereinafter referred to
as the "Amended Option Agreement".
C. On or about , 2004, the Original Developer assigned all of its right,
title and interest in and to the Amended P&S Agreement to the Developer.
D. Agency and Developer now wish to amend the Amended P&S Agreement and the
Amended Option Agreement to further revise the provisions related to the Project Entitlements,
and to revise the subordination provisions set forth in the Amended Option Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing recitals, which are incorporated
herein by this reference, and for valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties hereto agree as follows-
1 . The Amended P&S Agreement is hereby amended as follows:
1.1 To replace Section 8(b) with the following:
882/015610-0043
547845.02 a10/13/04 ' 1-
(b) Within one hundred twenty (120) days following the Closing Date, Buyer
shall (i) prepare and record in the Official Records a tract map subdividing the
Property from the adjacent real property (the "Tract Map"); and (ii) furnish to the
City of La Quinta a fully secured and executed Subdivision Improvement
Agreement ("SIA") in the form currently used by the City guaranteeing the
construction of all on and off -site improvements required in connection with the
Project, in accordance with the Conditions of Approval for Tentative Tract Map
31310, which was approved by the City pursuant to City Council Resolution
2003-113, adopted on November 18, 2003.
1.2 To replace Section 8(c) with the following:
(c) Within the times set forth below, Buyer shall have obtained from the City
the building permits necessary for the construction of the model homes and each
phase of the Project:
(i) On or before January 8, 2005, Buyer shall have obtained the
building permits necessary to construct the two (2) model homes Buyer
anticipates constructing on the Property;
(ii) On or before January 24, 2005, Buyer shall have obtained the
building permits necessary to construct the first phase of the Project, which
consists of sixteen (16) homes; and
(iii) On or before May 1, 2005, Buyer shall have obtained the building
permits necessary to construct the second phase of the Project, which consists of
eighteen (18) homes.
Notwithstanding the times set forth in this Section 8(c), in the event Buyer
submits evidence satisfactory to Agency, in Agency's reasonable discretion,
demonstrating that home sales in the Coachella Valley are currently declining,
due to market -driven factors beyond the reasonable control of Buyer, Agency
agrees to meet and confer with Buyer to discuss extending one or more of the
timeframes set forth herein.
To replace Section 8(d) with the following:
(d) Prior to, and as a condition of, City's issuance of the first building permit
for the Project, Buyer shall obtain approval from the City of covenants,
conditions, and restrictions providing for maintenance of all commonly -owned
property within the Project by a homeowners' association ("CC&Rs"), which
CC&Rs shall provide that the City and Agency are third party beneficiaries with
the right, but not the obligation, to enforce the terms thereof. Prior to, and as a
condition of, City's issuance of a certificate of occupancy for the first home,
Buyer shall record the CC&Rs in the Official Records of Riverside County.
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F5
1.3 To replace Section 8(e) with the following:
(e) Agency agrees to fully cooperate with, and assist, at no cost to Agency,
Buyer in its pursuit of the Tract Map, building permits, and the CC&Rs ("Post
Closing Entitlements"), subject to Agency's exercise of its legislative discretion
and without any, representation, warranty, or guaranty by Agency that the City
will issue or approve, or will issue or approve the same with conditions, any of
the Post Closing Entitlements. Without limiting the generality of the foregoing,
where required, Agency shall review all submittals by Buyer in a timely manner
and shall provide Buyer with all information, in Agency's possession or control,
that Buyer may reasonably request in writing in connection with the Post Closing
Entitlements.
2. The Amended Option Agreement is hereby replaced, in its entirety, with the Amended
and Restated Option Agreement attached hereto and incorporated herein as Attachment No. 1
(the "Amended and Restated Option Agreement"). Agency's approval of this Amendment No. 2.
is conditioned upon Developer's execution, concurrently with the execution hereof, of the Option
Agreement.
3. Nothing herein or in the Amended P&S Agreement constitutes a representation or
warranty by Agency that the construction of the Project is not subject to California Health and
Safety Code Sections 33423 through 33426, or Chapter 1 of Part 7 of the California Labor Code
(commencing with section 1720), and all applicable statutory and regulatory provisions related
thereto, and Developer expressly waives any right of reimbursement for any "increased costs"
under California Labor Code Section 1781 or otherwise with respect to the Project or Site.
Developer shall indemnify, defend, and hold Agency harmless, including litigation costs and
reasonable attorneys' fees, from and against any and all claims pertaining to the payment of
wages for the Project.
4. Except as otherwise expressly provided in this Amendment No. 2, all of the terms and
conditions of the Amended P&S Agreement shall remain in full force and effect.
5. In the event of any action between Agency and Developer seeking enforcement of any of
the terms and conditions to this Amendment No. 2, the prevailing party in such action shall be
awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses,
including without limitation its expert witness fees and reasonable attorney's fees.
6. This Amendment No. 2 shall be construed according to its fair meaning and as if
prepared by both parties hereto.
7. This Amendment No. 2 shall be governed by the internal laws of the State of California
and any question arising hereunder shall be construed or determined according to such law. The
Municipal and Superior Courts of the State of California in and for the County of Riverside, or
such other appropriate court in such county, shall have exclusive jurisdiction of any litigation
between the parties concerning this Amendment No. 2. Service of process on Agency shall be
made in accordance with California law. Service of process on Developer shall be made in any
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manner permitted by California law and shall be effective whether served inside or outside
California.
8. Time is of the essence of this Amendment No. 2 and of each and every term and
provision hereof.
9. A waiver of a provision hereof, or modification of any provision herein contained, shall
be effective only if said waiver or modification is in writing, and signed by both Agency and
Developer. No waiver of any breach or default by any party hereto shall be considered to be a
waiver of any breach or default unless expressly provided herein or in the waiver.
10. Signatures of the parties transmitted by facsimile shall be deemed binding. However,
each party agrees to submit their original signature to the other party within five (5) business
days after execution hereof.
11. This Amendment No. 2 may be executed in counterparts, each of which, when this
Amendment No. 2 has been signed by all the parties hereto, shall be deemed an original, and
such counterparts shall constitute one and the same instrument.
12. The person(s) executing this Amendment No. 2 on behalf of each of the parties hereto
represent and warrant that (i) such party is duly organized and existing, (ii) they are duly
authorized to execute and deliver this Amendment No. 2 on behalf of said party, (iii) by so
executing this Amendment No. 2 such party is formally bound to the provisions of this
Amendment No. 2, and (iv) the entering into this Amendment No. 2 does not violate any
provision of any other agreement to which such party is bound.
[End — Signature Page Follows]
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IN WITNESS WHEREOF, Agency and Developer each hereby represents that it has read
this Amendment No. 2, understands it, and hereby executes this Amendment No. 2 to be
effective as of the day and year first written above.
"Developer"
48th & ADAMS, LLC, a California limited
liability company
By: SANTA ROSA DEVELOPMENT,
INC., a California corporation
Date: , 2004 Its:
By:
Michael Shovlin
Its: President
"Agency"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
Date: , 2004 By:
ATTEST:
June Greek, Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
By:
M. Katherine Jenson, Agency Counsel
Executive Director
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ATTACHMENT NO. 1
AMENDED AND RESTATED OPTION AGREEMENT
[See Following Pages]
882/015610-0043 C
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547845.02 a10/13/04 6
EXHIBIT "E"
AMENDED AND RESTATED OPTION AGREEMENT
[See Following Pages]
94
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O
FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
(SPACE ABOVE THIS LINE FOR RECORDING USE)
(EXEMPT FROM RECORDING FEE PER GOV. CODE § 27383)
AMENDED AND RESTATED OPTION AGREEMENT
SUBORDINATED
NOTICE: This AMENDED AND RESTATED OPTION AGREEMENT contains a
subordination clause which may result in your security interest in the property becoming subject
to and of lower priority than the lien of some other or later security instrument.
THIS AMENDED AND RESTATED OPTION AGREEMENT ("Amended and Restated
Option Agreement") is made this day of (the "Effective Date"), by 48th &
ADAMS, LLC, a California limited liability company ("Developer"), and the LA QUINTA
REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency").
RECITALS
A. On or about January 22, 2003, Santa Rosa Development, Inc., a California
corporation (the "Original Developer") and the Agency entered into an Agreement for Purchase
and Sale and Escrow Instruction ("Original P&S Agreement"), pursuant to which (i) Agency
conveyed to Developer that certain real property located at the corner of Avenue 48th and
Adams Street, in the City of La Quinta, County of Riverside, State of California (the "Site"); and
(ii) the Original Developer agreed to construct on the Site a single family residential
development (the "Project"), all as more particularly described in the Original P&S Agreement.
The Site is legally described in Exhibit "A" which is attached hereto and incorporated herein by
this reference.
B. The Original P&S Agreement requires, among other terms, that the Original
Developer grant to Agency an option to repurchase the Site from the Original Developer if the
Original Developer fails to commence, continuously proceed with, or complete construction
within certain specified time frames, or if the Original Developer transfers the Site in violation of
the terms of the Original P&S Agreement, all as more particularly described therein. The
Original Developer's grant to Agency of the aforementioned option was to be effected pursuant
to an Option Agreement substantially in the form attached to the Original P&S Agreement as
Exhibit "E" (the "Original Option Agreement").
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C. On or about June 22, 2004, and prior to Agency's conveyance of the Site to the
Original Developer, the Agency and the Original Developer amended the Original P&S
Agreement and the Original Option Agreement by that certain Waiver and Replacement of
Conditions for Closing for the Purchase and Sale. Agreement and for the Option Agreement
("Amendment No. 1") to revise, among other terms, various provisions related to the "Project
Entitlements" (as that term is defined in the Original P&S Agreement). The Original P&S
Agreement, as amended by Amendment No. 1, is hereinafter referred to as the "Amended P&S
Agreement" and the Original Option Agreement, as amended by Amendment No. 1, is
hereinafter referred to as the "Amended Option Agreement".
D. On or about July 21, 2004 (the "Closing Date"), Agency conveyed to the Original
Developer the Site and the Original Developer and Agency executed and recorded against the
Site, in the Official Records of the County of Riverside, as Instrument No. 2004-0565216, the
Amended Option Agreement.
E. On or about , 2004, the Original Developer assigned all of its right,
title and interest in and to the Amended P&S Agreement to the Developer.
F. Agency and Developer have, concurrently with the execution hereof, entered into
that certain Amendment No. 2 to Disposition and Development Agreement ("Amendment
No. 2") to further revise the provisions related to the Project Entitlements, and to revise the
subordination provisions set forth in the Amended Option Agreement. The Amended P&S
Agreement, as amended by Amendment No. 2, is hereinafter referred to as the "P&S
Agreement". To effect the revisions set forth in Amendment No. 2, Developer and Agency now
desire to replace the Amended Option Agreement, in its entirety, with this Amended and
Restated Option Agreement. All defined terms used herein shall have the same meaning as set
forth in the P&S Agreement unless otherwise stated.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, and incorporating the above recitals and all of the terms and
conditions contained in the P&S Agreement, (i) Developer and Agency hereby agree that this
Amended and Restated Option Agreement replaces, in its entirety, the Amended Option
Agreement; and (ii) Developer hereby grants to Agency the following repurchase options:
1. Repurchase Option I - Failure to Commence Construction
Developer hereby grants to Agency an exclusive option to repurchase the Site
("Repurchase Option I") if Developer fails to (i) commence construction of the Project within
one hundred eighty (180) days after the Closing Date, subject to Sections 4(b) and 4(h) below; or
(ii) furnish to the City of La Quinta, within one hundred twenty (120) days after the Closing
Date, a fully secured and executed Subdivision Improvement Agreement ("SIA") in the form
currently used by the City guaranteeing the construction of all on an off -site improvements
required in connection with the Project, in accordance with the Con itions of Approval for
Tentative Tract Map 31310, which was approved by the City pur uant to City Council
Resolution 2003-113, adopted on November 18, 2003.
In
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For the purposes of this Amended and Restated Option Agreement, Developer shall have
"commenced construction of the Project" at the time Developer has completed all of the
following: (1) obtained all necessary bonds and permits to complete the mass grading of the
Site; (2) completed all necessary pre -grading activities, including, but not limited to, fencing and
watering the Site; and (3) conducted mass grading activities on the Site for a minimum of fifteen
(15) days (with only those days where actual and continuous mass grading activities are
conducted counting towards this requirement); or
In the event of Developer's failure to commence construction within the one hundred
eighty (180) day time period referenced above, or to furnish to the City an SIA within the one
hundred twenty (120) day time period referenced above, Agency shall be entitled to exercise, but
is not obligated to exercise, the foregoing option for a period of ninety (90) days following the
expiration of the one hundred eighty (180) day period or one hundred twenty (120) day period
(as applicable) described above ("Repurchase Option I Period").
(a) Exercise of Option
Agency shall exercise the Repurchase Option I by giving written notice to Developer
("Agency's Notice of Option 1 Exercise"), in accordance with Section 5 of this Amended and
Restated Option Agreement, prior to the expiration of the Repurchase Option I Period. Failure
of Agency to exercise the Repurchase Option I shall constitute a waiver by Agency of its
exercise of this Repurchase Option I only, and shall not constitute a waiver by Agency of any
remedies it may have under the terms of the P&S Agreement or of any other agreement for
Developer's failure to timely commence construction (as defined herein or as such term may be
defined in any other agreement). Any Agency waiver as described in the preceding sentence
shall not be deemed a waiver of any other Developer breach of the terms or conditions of the
P&S Agreement.
(b) Repurchase Price and Escrow - Repurchase Option I
Agency's repurchase price for the Site ("Repurchase Option I Repurchase Price") shall be
Developer's Purchase Price for the Site ($801,358.00) less the sum of (i) Agency's costs of sale,
including but not limited to Agency's escrow costs, real estate commissions, attorney fees
incurred to negotiate and draft the P&S Agreement, and other costs under Section 12.2 of the
P&S Agreement; and (ii) Agency's escrow costs and transaction fees to repurchase the Site in
accordance with this Option Agreement.
Within five (5) business days after Agency has exercised Repurchase Option I, or as soon
thereafter as reasonably practicable, an escrow shall be opened with an escrow company selected
by Agency for the reconveyance of the Site to Agency. Agency shall deposit the Repurchase
Option I Repurchase Price in escrow not later than one (1) business day prior to the anticipated
close of escrow date. The escrow shall be subject to Agency's approval of a then -current
preliminary title report and, at Agency's option, environmental and other site testing. Any
monetary lien(s) or encumbrance(s) shown on such preliminary title report that is (are) created
concurrent with or after the Close of Escrow that conveyed the Site from Agency to Developer
shall be removed by Developer at its sole expense prior to the close of escrow pursuant to this
Section 1(b) unless such exception(s) is (are) accepted by Agency in its sole discretion; provided,
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73
however, that Agency shall accept the following exceptions to title: (i) current taxes not yet
delinquent, (ii) matters affecting title existing on the date of recordation of the Grant Deed to the
Site (Attachment No. 5 to the P&S Agreement); and (iii) matters shown as printed exceptions in
the standard form ALTA policy of title insurance. In the event the Site is encumbered by a
mortgage or deed of trust, Agency shall be permitted to unilaterally instruct the escrow agent to
satisfy the indebtedness secured thereby out of the proceeds payable to Developer through the
foregoing escrow. Any additional amount necessary to satisfy such indebtedness shall be paid
by Developer. Agency and Developer shall each pay one-half (1/2) of the escrow fees.
Developer shall pay for documentary tax stamps, recording fees, and for an ALTA standard form
owner's policy of title insurance in the amount of the Repurchase Option I Repurchase Price
showing title vested in Agency free and clear of all liens and encumbrances except those
permitted by this paragraph. (Agency shall pay the portion of the title insurance premium
attributable to any extra or extended coverages or if the amount of insurance requested by
Agency is higher than the Repurchase Option I Repurchase Price.) Any other costs and expenses
shall be allocated between the parties in the manner customary for a commercial property
conveyance in Riverside County. Agency shall have thirty (30) days after exercise of the
Repurchase Option I to enter upon the Site to conduct any tests, inspections, investigations, or
studies of the condition of Site. Developer shall permit Agency access to the Site for such
purposes. Agency shall indemnify, defend, and hold harmless Developer and its officers,
directors, shareholders, employees, agents, and representatives from and against all claims,
liabilities, or damages, and including expert witness fees and reasonable attorney's fees and
costs, arising out of any such testing, inspection, or investigatory activity on the Site. Escrow
shall close promptly after acceptance by Agency of the condition of title and the physical and
environmental condition of the Site.
2. Repurchase Option II - Failure to Continuously Proceed With or Complete
Construction
Developer hereby grants to Agency an exclusive option to repurchase the Site
("Repurchase Option II") if, (i) after commencement of construction, Developer fails to
continuously proceed with, and complete, construction of the Project on the Site (for purposes of
this Amended and Restated Option Agreement, "continuously proceed with construction" shall
be defined as construction that is interrupted, if at all, for periods of no longer than ninety (90)
days, and "completion of construction of the Project" shall be defined as the issuance by the City
of La Quinta ("City") to Developer of a Certificate of Occupancy for the Project) by January 31,
2007, subject to Sections 4(b) and 4(h) below (the "Completion Deadline"); or (ii) Developer
fails to comply with the provisions of Section 8(b), (c) or (d) of the P&S Agreement within the
time periods specified in said subsections.
In the event of Developer's failure to continuously proceed with, or to complete,
construction of the Project by the Completion Deadline, or to timely comply with the provisions
of Section 8(b), (c), or (d) of the P&S Agreement, Agency shall be entitled to exercise, but is not
obligated to exercise, the foregoing option for a period of ninety (90) days following the
Completion Deadline or the deadline for completing the obligations in Section 8(b), (c), or (d)
(as applicable) ("Repurchase Option II Period").
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(a) Exercise of Option
Agency shall exercise the Repurchase Option II by giving written notice to Developer, in
accordance with Section 5 of this Amended and Restated Option Agreement, prior to the
expiration of the Repurchase Option II Period. Failure of Agency to exercise the Repurchase
Option II shall constitute a waiver by Agency of Developer's breach of its obligation to timely
complete construction. Any Agency waiver as described in the preceding sentence shall not be
deemed a waiver of any other Developer breach of the terms or conditions of the P&S
Agreement.
(b) Determination of Repurchase Price - Repurchase Option II
Agency and Developer shall comply with the following terms and provisions to
determine Agency's repurchase price for the Site ("Repurchase Option II Repurchase Price"), the
escrow for the reconveyance, and other matters therein discussed:
(1) Within ten (10) days after Agency's exercise of Repurchase Option
II, Developer shall deliver to Agency a list of improvements, if any, constructed
by Developer on the Site that are usable for the purposes for which the Site was
conveyed to Developer ("Site Improvements").
(2) Developer, within fifteen (15) days after submission of the list of
Site Improvements to Agency, shall deliver to Agency a statement of Developer's
costs for each of the Site Improvements ("Statement of Costs").
(3) After Agency's receipt of the Site Improvements list and the
Statement of Costs, Agency and Developer shall consult with each other in good
faith the purpose of arriving at an agreement concerning the Site Improvements
that are usable to Agency ("Usable Improvements") and the costs for those Usable
Improvements. Developer agrees that the final determination of which of the Site
Improvements are Usable Improvements shall be made by Agency in its sole
discretion. The Site Improvements that are not included within the list of Usable
Improvements shall be deemed "Unusable Improvements." The "Cost of the
Usable Improvements" shall be the lesser of:
(a) an amount equal to Developer's construction costs actually
incurred as of the date of Agency's exercise of Repurchase Option II
("Construction Cost Percentage"), as verified by Developer's provision of
all information pertaining to its cost of construction for the Project on the
Site up to the date of Agency's exercise of Repurchase Option II,
including construction contracts, invoices, and such other information and
documents reasonably required by Agency to verify the Construction Cost
Percentage; or
(b) a cost mutually determined by Agency or Developer, or in
the event Agency and Developer cannot arrive at a mutually agreeable
determination of costs for the Usable Improvements, the cost shall be
defined as the costs as listed in Developer's Statement of Costs unless
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Agency, in its sole discretion and at Agency's cost, obtains a written
appraisal of the fair market value of the Usable Improvements from an
independent and qualified MAI appraiser ("Agency's Usable
Improvements Appraisal"). If Agency, in its sole discretion, decides to
use Agency's Usable Improvements Appraisal as a basis for a portion of
the Repurchase Price as described below, Agency shall provide a copy of
the Agency's Usable Improvements Appraisal to Developer and the
following shall apply:
(i) If Developer does not agree with Agency's Usable
Improvement Appraisal, Developer shall notify Agency in writing
within five (5) business days of receipt thereof. Within thirty (30)
days thereafter, Developer, at its cost, shall deliver to Agency a
written appraisal of the fair market value of the Usable
Improvements prepared by an independent and qualified MAI
appraiser ("Developer's Usable Improvements Appraisal").
(ii) If Developer fails to deliver Developer's Usable
Improvements Appraisal to Agency within the time provided,
Agency's Usable Improvements Appraisal shall constitute the final
and binding determination of the fair market value of the Usable
Improvements.
(iii) If Developer delivers Developer's Usable
Improvements Appraisal to Agency within the time provided, and
such Developer's Usable Improvements Appraisal is lower than
Agency's Usable Improvements Appraisal, then Developer's
Usable Improvements Appraisal shall constitute the final and
binding determination of the fair market value of the Usable
Improvements.
(iv) If Developer delivers Developer's Usable
Improvements Appraisal to Agency within the time provided, and
such Developer's Usable Improvements Appraisal is higher than
Agency's Usable Improvements Appraisal, but less than or equal
to five percent (5%) higher, the average of Developer's Usable
Improvements Appraisal and Agency's Usable Improvements
Appraisal shall constitute the final and binding determination of
the fair market value of the Usable Improvements.
(v) If Developer delivers Developer's Usable
Improvements Appraisal to Agency within the time provided, and
such Developer's Usable Improvements Appraisal is higher than
Agency's Usable Improvements Appraisal, and is more than five
percent (5%) higher, Agency and Developer shall appoint, and
shall share the cost of, a third independent and qualified MAI
appraiser who shall perform a review appraisal and shall render a
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determination of the fair market value of the Usable
Improvements, which value cannot be higher than the amount of
Developer's Usable Improvements Appraisal. If Agency and
Developer cannot agree on a third appraiser, then an amount equal
to twenty-five percent (25%) of the difference between Agency's
and Developer's Usable Improvements Appraisals shall be added
to Agency's Usable Improvements Appraisal and that sum shall
constitute the final and binding determination of the fair market
value of the Usable Improvements.
Agency's Repurchase Option II Repurchase Price for the Site shall be the sum of (i) and
(ii): (i) the Repurchase Option I Repurchase Price; and (ii) the lesser of (A) the Cost of Usable
Improvements (if any) or (B) the fair market value of Usable Improvements (if any) determined
as set forth hereinabove.
Within five (5) days after Agency has exercised Repurchase Option II, or as soon
thereafter as reasonably practicable, an escrow shall be opened with an escrow company selected
by Agency for the reconveyance of the Site to Agency. Agency shall deposit the Repurchase
Option II Repurchase Price in escrow not later than one (1) business day prior to the anticipated
close of escrow date. The escrow shall be subject to approval of a then -current preliminary title
report and, at Agency's option, environmental and other site testing. Any monetary lien(s) or
encumbrance(s) shown on such preliminary title report that is (are) created concurrent with or
after the Close of Escrow that conveyed the Site from Agency to Developer shall be removed by
Developer at its sole expense prior to the close of escrow pursuant to this Section 2(c) unless
such exception(s) is (are) accepted by Agency in its sole discretion; provided, however, that
Agency shall accept the following exceptions to title: (i) current taxes not yet delinquent, (ii)
matters affecting title existing on the date of recordation of the Grant Deed to the Site
(Attachment No. 5 to the P&S Agreement); and (iii) matters shown as printed exceptions in the
standard form ALTA owner's policy of title insurance. In the event the Site or any portion
thereof is encumbered by a mortgage or deed of trust, Agency shall be permitted to unilaterally
instruct the escrow agent to satisfy the indebtedness secured thereby out of the proceeds payable
to Developer through the foregoing escrow. Any additional amount necessary to satisfy such
indebtedness shall be paid by Developer. Agency and Developer shall each pay one-half (1/2) of
the escrow fees; provided, however, that Agency shall deduct its share from the price paid to
Developer to repurchase the Site, as described above. Developer shall pay for documentary tax
stamps, recording fees, and for a ALTA standard form owner's policy of title insurance in the
amount of the Repurchase Option II Repurchase Price showing title vested in Agency free and
clear of all liens and encumbrances except those permitted by this paragraph. Any other costs
and expenses shall be allocated between the parties in the manner customary for a commercial
property conveyance in Riverside County. Agency shall have thirty (30) days after exercise of
the Repurchase Option II, to enter upon the Site to conduct any tests, inspections, investigations,
or studies of the condition of Site. Developer shall permit Agency access to the Site for such
purposes. Agency shall indemnify, defend, and hold harmless Developer and its officers,
directors, shareholders, employees, agents, and representatives from and against all claims,
liabilities, or 'damages, and including expertwitness fees and reasonable attorney's fees and
costs, arising out of any such testing, inspection, or investigatory activity on the Site. Escrow
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shall close promptly after acceptance by Agency of the condition of title and the physical and
environmental condition of the Site.
3. Repurchase Option III - Transfer of the Site
Developer hereby grants to Agency an exclusive option to repurchase the Site
(Repurchase Option III) if, prior to the time Agency issues a Certificate of Completion for the
Project, Developer transfers or suffers an involuntary transfer of the Site in violation of the terms
of the P&S Agreement. In the event of Developer's transfer of the Site in violation of the P&S
Agreement, Agency shall be entitled to exercise, but is not obligated to exercise, the foregoing
option for a period of ninety (90) days following the transfer that gives rise to Agency's option
under this Section ("Repurchase Option III Period").
(a) Exercise of Option
Agency shall exercise the Repurchase Option III by giving written notice to Developer
("Agency's Notice of Option III Exercise"), in accordance with Section 5 of this Amended and
Restated Option Agreement, prior to the expiration of the Repurchase Option III Period. Failure
of Agency to exercise the Repurchase Option III shall constitute a waiver by Agency of its
exercise of this Repurchase Option III only, and shall not constitute a waiver by Agency of any
remedies it may have under the terms of the P&S Agreement or of any other agreement for
Developer's failure to timely commence construction (as defined herein or as such term may be
defined in any other agreement). Any Agency waiver as described in the preceding sentence
shall not be deemed a waiver of any other Developer breach of the terms or conditions of the
P&S Agreement.
(b) Repurchase Price and Escrow - Repurchase Option III
Agency's repurchase price for the Site ("Repurchase Option III Repurchase Price") shall
be as follows:
(i) In the event Developer has not yet commenced construction of the
Project at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III
Price shall be the Repurchase Option I Repurchase Price, as set forth in Section 1(b) of this
Amended and Restated Option Agreement.
(ii) In the event Developer has commenced construction of the Project
at the time Agency exercises its Repurchase Option III, Agency's Repurchase Option III
Repurchase Price shall be the Repurchase Option II Repurchase Price, as set forth in Section 2(b)
of this Amended and Restated Option Agreement.
4. Additional Terms Applicable to the Repurchase Options
The following additional terms shall apply to Repurchase Option I, Repurchase Option II,
and Repurchase Option III, as applicable:
(a) The Repurchase Option I, Repurchase Option II, and Repurchase Option
III created hereby shall be irrevocable by Developer and, subject to any
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subordination by Agency in accordance with paragraph (i) below, shall be
binding upon the successors and assigns of Developer.
(b) Notwithstanding anything herein to the contrary, Agency shall not be
entitled to exercise Repurchase Option I, Repurchase Option II, or
Repurchase Option III until Agency has provided a written notice to
Developer regarding (i) Developer's failure to commence, continuously
proceed with, or complete, construction of the Project, or (ii) Developer's
transfer of the Site in violation of the P&S Agreement, as applicable (with
each of (i) and (ii) above referred to hereinafter as an "Option Triggering
Event"), and Developer has not, within sixty (60) days after receipt of
such notice, cured, corrected, or remedied such Option Triggering Event,
or, for those Option Triggering Events that cannot reasonably be cured,
corrected, or remedied within sixty (60) days, commenced to cure, correct
or remedy such Option Triggering Event within said sixty (60) day period,
and diligently prosecute the same to completion.
(c) Agency shall have sixty (60) days after exercising Repurchase Option I (or
Repurchase Option III if Agency exercises Repurchase Option III and the
Repurchase Option I Repurchase Price is the applicable repurchase price
for the Site) to deliver to Developer a written commitment to close
escrow, and escrow shall close no later than ninety (90) days after
Agency's notice of commitment to close escrow, unless an extension to
any of the foregoing time periods is/are required due to a delay not the
fault of Agency, or the parties, each in its sole discretion, mutually agree
to extend one or both of such periods
(d) Agency shall have until the later of (i) sixty (60) days after exercising
Repurchase Option II (or Repurchase Option III if Agency exercises
Repurchase Option III and the Repurchase Option II Repurchase Price is
the applicable repurchase price for the Site), or (ii) , thirty (30) days after
the determination of the purchase price pursuant to Section 2(b) of this
Amended and Restated Option Agreement (whether said purchase price is
the Repurchase Option II Repurchase Price or the Repurchase Option III
Repurchase Price), to deliver to Developer a written commitment to close
escrow, and escrow shall close no later than ninety (90) days after
Agency's notice of commitment, unless an extension to any of the
foregoing time periods is/are required due to a delay not the fault of
Agency, or the parties, each in its sole discretion, mutually agree to extend
one or both of such periods
(e) In the event that, at the time Agency exercises Repurchase Option II or
Repurchase Option III Developer has obtained a Certificate of Completion
from the City for one or more of the lots that comprise the Site, (i) the
provisions of this Amended and Restated Option Agreement shall apply
only to that portion of the Site for which Certificates of Completion have
not been issued ("Uncompleted Portion of the Site") and any calculations
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5
for determining the Repurchase Option II Repurchase Price or the
Repurchase Option III Repurchase Price shall be based solely upon the
Uncompleted Portion of the Site, and (ii) Developer agrees to cooperate
with Agency to effect the subdivision of the Uncompleted Portion of the
Site from the completed portions of the Site (those portions of the Site for
which Certificates of Completion have been issued).
(f) Notwithstanding any covenant, term, or provision in this Section 4 to the
contrary, Agency shall not be obligated to exercise Repurchase Option I,
Repurchase Option II, or Repurchase Option III, or once exercised, to
close escrow. Agency shall not be liable to Developer for any costs
incurred by Developer occasioned by Agency's decision not to close
escrow.
(g) In the event Developer commences and completes construction of the
Project and Agency has not exercised Repurchase Option I, Repurchase
Option II, or Repurchase Option III, Agency shall execute and record a
termination of this Amended and Restated Option Agreement within
fifteen (15) business days after the final and permanent Certificate of
Occupancy is issued by the City.
(h) Notwithstanding anything to the contrary herein, in addition to specific
provisions of this Amended and Restated Option Agreement, performance
by either party hereunder shall not be deemed to be in default where
delays or defaults are due to war; insurrection; strikes; lock -outs; riots;
floods; earthquakes; fires; casualties; supernatural causes; acts of the
public enemy; epidemics; quarantine restrictions; freight embargoes; lack
of transportation; governmental restrictions or priority litigation; unusually
severe weather; inability to secure necessary labor, materials or tools; acts
of the other party; acts or the failure to act of a public or governmental
agency or entity (except that acts or the failure to act of Agency shall not
excuse performance by Agency unless the act or failure is caused by the
acts or omissions of Developer); or any other causes beyond the
reasonable control or without the fault of the party claiming an extension'
of time to perform. In the event of such a delay (herein "Enforced
Delay"), the party delayed shall continue to exercise commercially
reasonable efforts to minimize the period of the delay. An extension of
time for any such cause shall be limited to the period of the Enforced
Delay, and shall commence to run from the time of the commencement of
the cause, provided notice by the party claiming such extension is sent to
the other party within thirty (30) days following the commencement of the
cause. The following shall not be considered as events or causes beyond
the control of Developer, and shall not entitle Developer to an extension of
time to perform: (i) Developer's failure to obtain financing for the Project,
(ii) Developer's failure to negotiate agreements with prospective tenants
or users for the Project, (iii) interest rates or (iv) economic or market
conditions. Times of performance under this Amended and Restated
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Option Agreement may also be extended by mutual written agreement by
Agency and Developer. Agency's Executive Director shall also have the
authority on behalf of Agency to administratively approve extensions of
time not to exceed a cumulative total of one (1) year.
(i) Subordination. The Agency agrees to subordinate this Amended and
Restated Option Agreement to Developer's construction loan, provided
that (i) the loan(s) shall obligate Developer to expend loan proceeds for no
other purpose than the Project; and (ii) the loan(s) shall provide that any
notice of a Developer breach or default shall also be sent to the Agency at
the address listed in Section 5 and that upon receipt of such notice,
Agency shall have the right to (A) cure the noticed breach or default, and
(B) communicate with the lender regarding the noticed breach or default.
5. Notices. Demands and Communications Between the Parties
Formal notices, demands, and communications between Agency and Developer shall be
given either by (i) personal service, (ii) delivery by reputable document delivery service such as
Federal Express that provides a receipt showing date and time of delivery, or (iii) or by mailing
in the United States mail, certified mail, postage prepaid, return receipt requested, addressed to:
To Agency: La Quinta Redevelopment Agency
78-495 Calle Tampico
La Quinta, CA 92253
Attn: Executive Director
With a copy to: Rutan & Tucker, LLP
611 Anton Blvd., Suite 1400
Costa Mesa, California 92626
Attn: M. Katherine Jenson, Esq.
To Developer: Santa Rosa Development, Inc.
71084 Tamerisk Lane
Rancho Mirage, CA 92270
Attn: Michael Shovlin
With a copy to: Best Best & Krieger, LLP
74-760 Highway 111, Suite 200
Indian Wells, California 92210
Attn: Daniel E. Olivier, Esq.
Notices personally delivered or delivered by document delivery service shall be deemed
effective upon receipt. Notices mailed in the manner provided above shall be deemed effective
on the second business day following deposit in the United States mail. Such written notices,
demands, and communications shall be sent in the same manner to such other addresses as either
party may from time to time designate by mail.
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6.. Agency's Option to Acquire Plans
If Agency exercises Repurchase Option I, Repurchase Option II, or Repurchase Option
III in accordance with this Agreement, at the option of the Agency, which may be exercised in
the Agency's sole and absolute discretion, the Developer shall deliver to the Agency an executed
assignment in a form reasonably acceptable to the Agency of the Developer's right to use all
plans, blueprints, drawings, sketches, specifications, tentative or final subdivision maps,
landscape plans, utilities plans, soils * reports, noise studies, environmental assessment reports,
grading plans and any other materials relating to the construction of the Project on the Site (the
"Plans"), together with copies of all of the Plans, as have been prepared for the development of
the Site to date of the termination. Notwithstanding the foregoing, however, Developer does not
covenant to convey to the Agency the copyright or other ownership rights of third parties.
Agency understands and agrees that the assignment to Agency under this Section 6 is subject and
subordinate to any assignment which Developer may make to a lender providing financing for
the Project, and Agency agrees to execute any documents required by such lender
acknowledging and effectuating such subordination of Agency's rights in and to the assignment.
Agency's acquisition or use of the Plans or any of them shall be without any representation or
warranty by Developer as to the accuracy or completeness of any such Plans, and Agency shall
assume all risks in the use of the Plans.
7. Applicable Law and Forum; Attorneys Fees
The Municipal and Superior Courts of the State of California in the County of Riverside
shall have the exclusive jurisdiction of any litigation between the parties arising out of this
Amended and Restated Option Agreement. This Amended and Restated Option Agreement shall
be governed by, and construed under, the laws of the State of California. In addition to any other
rights or remedies, either party may take legal action, in law or in equity, to cure, correct, or
remedy any default, to recover damages for any default, to compel specific performance of this
Amended and Restated Option Agreement, to obtain declaratory or injunctive relief, or to obtain
any other remedy consistent with the purposes of this Amended and Restated Option 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
times, of any other rights or remedies for the same default or any other default by the other party.
Service of process on Agency shall be made in the manner required by law for service on a
public entity. Service of process on Developer shall be made in any manner permitted by law
and shall be effective whether served within or outside of California.
If either party to this Amended and Restated Option Agreement is required to initiate or
defend, or is made a party to, any action or proceeding in any way connected with this Amended
and Restated Option Agreement, the party prevailing in the final judgment in such action or
proceeding, in addition to any other relief which may be granted, shall be entitled to reasonable
attorney's fees. Attorney's fees shall include reasonable costs for investigating such action,
conducting discovery, retaining expert witnesses, and all other necessary costs the court allows
which are incurred in such litigation.
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8256
8. Nonliability of Agency Officials and Employees
No officer, official, employee, agent, or representative of Agency shall be personally
liable to Developer or any successor in interest, in the event of any default or breach by Agency,
or for any amount which may become due to Developer or its successor, or for breach of any
obligation of the terms of this Amended and Restated Option Agreement.
9. Nondiscrimination
Developer covenants for itself, its heirs, executors, assigns, and all persons claiming
under or through them, that there shall be no discrimination against any person on account of
race, color, creed, religion, sex, marital status, national origin, or ancestry with respect to this
Amended and Restated Option Agreement or use of the Site.
10. Interpretation
The terms of this Amended and Restated Option Agreement shall be construed in
accordance with the meaning of the language used and shall not be construed for or against either
party by reason of the authorship of this Amended and Restated Option Agreement or any other
rule of construction which might otherwise apply. The Section headings are for purposes of
convenience only, and shall not be construed to limit or extend the meaning of this Amended and
Restated Option Agreement.
11. Entire Agreement
This Amended and Restated Option Agreement integrates all of the terms and conditions
mentioned herein, or incidental hereto, and supersedes all negotiations or previous agreements
between the parties with respect to all or any part of the subject matter hereof.
All waivers of the provisions of this Amended and Restated Option Agreement must be
in writing and signed by the appropriate authorities of the party to be charged, and all
amendments and modifications hereto must be in writing and signed by the appropriate
authorities of Agency and Developer.
12. CounterMarts
This Amended and Restated Option Agreement may be executed in counterparts, each of
which, after all the parties hereto have signed this Amended and Restated Option Agreement,
shall be deemed to be an original, and such counterparts shall constitute one and the same
instrument.
13. Severability
In the event any section or portion of this Amended and Restated Option Agreement shall
be held, found, or determined to be unenforceable or invalid for any reason whatsoever, the
remaining provisions shall remain in effect, and the parties hereto shall take further actions as
may be reasonably necessary and available to them to effectuate the intent of the parties as to all
provisions set forth in this Amended and Restated Option Agreement.
57
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IN WITNESS WHEREOF, the parties have executed this Amended and Restated Option
Agreement as of the date first above written.
"DEVELOPER"
48th & ADAMS, LLC, a California limited
liability company
By: SANTA ROSA DEVELOPMENT,
INC., a California corporation
Its:
Date: , 2004 Bv:
Michael Shovlin
Its: President
"AGENCY"
LA QUINTA REDEVELOPMENT AGENCY,
a public body, corporate and politic
By:
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
RUTAN & TUCKER, LLP
Attorneys for the La Quinta Redevelopment
Agency
Executive Director
t$
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547845.02 a10/13/04 -14-
STATE OF CALIFORNIA )
)SS
COUNTY OF )
On , before me, 31
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
STATE OF CALIFORNIA )
) ss
COUNTY OF )
On , before me, ,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the
person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s)
acted, executed the instrument.
Witness my hand and official seal.
Notary Public
[SEAL]
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EXHIBIT "A
LEGAL DESCRIPTION OF THE SITE
[See Following Page]
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