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2018 03 13 PCt(v 0aigr(V — GEM of the DESERT — Planning Commission agendas and staff reports are now available on the City's web page: www.laquintaca.org PLANNING COMMISSION AGENDA CITY HALL COUNCIL CHAMBERS 78-495 Calle Tampico, La Quinta REGULAR MEETING on TUESDAY, MARCH 13, 2018 AT 6:00 P.M. CALL TO ORDER ROLL CALL: Commissioners Bettencourt, Caldwell, Currie, McCune, Proctor, Wright and Chairperson Quill. PLEDGE OF ALLEGIANCE PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA At this time, members of the public may address the Planning Commission on any matter not listed on the agenda. Please complete a "Request to Speak" form and limit your comments to three minutes. The Planning Commission values your comments; however in accordance with State law, no action shall be taken on any item not appearing on the agenda unless it is an emergency item authorized by GC 54954.2(b). CONFIRMATION OF AGENDA ANNOUNCEMENTS, PRESENTATIONS AND WRITTEN COMMUNICATIONS 1. CITY-WIDE CAMERA SYSTEM PRESENTATION CONSENT CALENDAR 1. APPROVE MINUTES OF FEBRUARY 13, 2018 2. ADOPT A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LA QUINTA FINDING THE PROPOSED PURCHASE BETWEEN THE CITY OF LA QUINTA AND FRONTIER COMMUNICATIONS FOR A PORTION OF THE PROPERTY LOCATED PLANNING COMMISSION AGENDA 1 MARCH 13, 2018 AT 78150 AVENIDA LA FONDA CONSISTENT WITH THE GENERAL PLAN 2035 [RESOLUTION NO. 2018-0021 BUSINESS SESSION 1. APPOINT A PLANNING COMMISSIONER AND ALTERNATE TO PARTICIPATE AS A MEMBER OF THE EVENT SPACE AD HOC COMMITTEE STUDY SESSION 1. DISCUSS NON -BEDROOM CONVERSION LIMITATIONS PUBLIC HEARINGS - None REPORTS AND INFORMATIONAL ITEMS - None COMMISSIONERS' ITEMS STAFF ITEMS 1. REPORT ON PROGRESS, CUP 2007-105 AND TPM 31876 MAYER VILLA CAPRI 2. 2017 PLANNING DIVISION METRICS ADJOURNMENT The next regular meeting of the Planning Commission will be held on March 27, 2018, commencing at 6:00 p.m. at the City Hall Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, Wanda Wise -Latta, Commission Secretary of the City of La Quinta, do hereby declare that the foregoing Agenda for the La Quinta Planning Commission meeting was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico, and the bulletin boards at 78-630 Highway 111, and the La Quinta Cove Post Office at 51-321 Avenida Bermudas, on March 9, 2018. DATED: March 8, 2018 WANDA WISE-LATTA, Commission Secretary City of La Quinta, California PLANNING COMMISSION AGENDA 2 MARCH 13, 2018 Public Notices The La Quinta City Council Chamber is handicapped accessible. If special equipment is needed for the hearing impaired, please call the Planning Division of the Design and Development Department at 777- 7118, twenty-four (24) hours in advance of the meeting and accommodations will be made. If special electronic equipment is needed to make presentations to the Commission, arrangements should be made in advance by contacting the Planning Division of the Design and Development Department at 777-7118. A one (1) week notice is required. If background material is to be presented to the Commission during a Planning Commission meeting, please be advised that eight (8) copies of all documents, exhibits, etc., must be supplied to the Executive Assistant for distribution. It is requested that this take place prior to the beginning of the meeting. Any writings or documents provided to a majority of the Commission regarding any item(s) on this agenda will be made available for public inspection at the Design and Development Department's counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253, during normal business hours. PLANNING COMMISSION AGENDA 3 MARCH 13, 2018 Consent Calendar Item No. 1 PLANNING COMMISSION MINUTES TUESDAY, FEBRUARY 13, 2018 CALL TO ORDER A regular meeting of the La Quinta Planning Commission was called to order at 5:59 p.m. by Chairperson Quill. PRESENT: Commissioners Bettencourt, Caldwell, Currie, McCune, Proctor, Wright and Chairperson Quill ABSENT: None STAFF PRESENT: Assistant City Attorney Morgan Gallagher, Planning Manager Gabriel Perez, City Engineer Bryan McKinney, Senior Planner Cheri Flores, Associate Planner Carlos Flores, Commission Secretary Wanda Wise -Latta and Office Assistant Mirta Lerma PLEDGE OF ALLEGIANCE Commissioner Caldwell led the audience in the pledge of allegiance. PUBLIC COMMENT ON MATTERS NOT ON THE AGENDA - None CONFIRMATION OF AGENDA - Confirmed ANNOUNCEMENTS, PRESENTATIONS AND WRITTEN COMMUNICATIONS - None CONSENT CALENDAR Commissioner Bettencourt requested presentation of the staff report on Consent Calendar Item No. 2 and that it be pulled for discussion and separate vote. Commission concurred. 1. APPROVAL OF MINUTES OF DECEMBER 12, 2017 MOTION - A motion was made and seconded by Commissioners Bettencourt/Caldwell to approve Consent Calendar Item No. 1 as submitted. Motion passed unanimously. PLANNING COMMISSION MINUTES 1 FEBRUARY 13, 2018 2. Pulled for a presentation of staff report, discussion and separate vote by Commissioner Bettencourt >>> ADOPT A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LA QUINTA FINDING THE PROPOSED PURCHASE BETWEEN THE CITY OF LA QUINTA AND STRATEGIC ACQUISITIONS, INC. FOR CERTAIN PROPERTY LOCATED AT 77895 AVENIDA MONTEZUMA CONSISTENT WITH THE GENERAL PLAN 2035 Senior Planner Cheri Flores presented the staff report, which is on file in the Design and Development Department. Staff addressed Commission Members' questions regarding CEQA; city ownership of the current museum building and casita; and city ownership of the property proposed to be purchased. MOTION - A motion was made and seconded by Commissioners Wright/Bettencourt to approve Consent Calendar Item No. 2 adopting Planning Commission Resolution No. 2018-001. Motion passed unanimously. BUSINESS SESSION 1. DISCUSSION REGARDING EVENT SPACE PLANNING AND DEVELOPMENT AT SILVERROCK AND SELECT A PLANNING COMMISSIONER TO PARTICIPATE AS A MEMBER OF THE EVENT SPACE AD HOC COMMITTEE Planning Manager Perez and Facilities Director Steve Howlett presented the staff report, which is on file in the Design and Development Department. Members of the Commission discussed goals regarding the event space; size of the civic center campus; storm and nuisance water accommodation; turfed areas; three - phased approach to the development; lighting; and infrastructure. Commissioner Bettencourt stated for the record that he has had dealings with the Hermann Design Group. Commission discussion continued regarding specific plan; programming for unmet needs of the community; ownership of site; ad hoc committee inclusion of Robert Green, Montage and Pendry representatives; passive pop-up sports events; role of ad hoc committee; La Quinta Arts Festival; parking; impact on future residential units at SilverRock Resort; transition to temporary clubhouse; administration of the event area; feedback from neighboring developments; orientation of the event site; and light and sound studies. At the request of a member of the Commission, City Manager Frank Spevacek gave a financial history of SilverRock and the concept of a special event space. PLANNING COMMISSION MINUTES 2 FEBRUARY 13, 2018 Commissioners Caldwell, McCune, Proctor and Wright expressed interest in being considered for the ad hoc committee. The Commission suggested that a Commission alternate to the committee be considered by Council. STUDY SESSION 1. NON -BEDROOM CONVERSIONS MORATORIUM Planning Manager Perez presented the staff report, which is on file in the Design and Development Department. Members of the Commission discussed auxiliary dwelling units, group homes; and short term vacation rentals. 2. HIGHWAY 111 CORRIDOR Senior Planner Cheri Flores presented the staff report, which is on file in the Design and Development Department. Planning Manager Perez informed the Commission that a Joint Study Session of the City Council and Planning Commission is scheduled for February 27, 2018. He also shared information regarding the Urban Land Institute. Members of the Commission discussed options for the Highway 111 Corridor; maintenance of shopping centers along Highway 111, landscape buffer zones; and Urban Land Institute Technical Assistance Panel. 3. LA QUINTA ART ALLEY Planning Manager Perez presented the staff report, which is on file in the Design and Development Department. Members of the Commission discussed the Village Make event, expansion of the area for future events; art alley concept, landscape guidelines; code compliance matters; adequate shade; grease and trash issues behind certain businesses in the alley area; lighting; and business deliveries. PUBLIC HEARING - None REPORTS AND INFORMATIONAL ITEMS - None COMMISSIONERS' ITEMS PLANNING COMMISSION MINUTES 3 FEBRUARY 13, 2018 Commissioner Bettencourt spoke regarding the process and impact of cancelling Planning Commission meetings. Chairperson Quill commented on staff time and cost associated with commission meetings and meeting protocol. STAFF ITEMS 1. VERBAL REPORT ON IID AND CVWD SITE MAINTENANCE Planning Manager Perez presented power point slides which showed the IID and CVWD utility sites in the City and introduced City Manager Frank Spevacek who updated the Commission on the status of sites and ongoing maintenance concerns. Members of the Commission discussed the East Valley Coalition and future sites. 2. JANUARY 2018 VILLAGE PARKING SURVEY Associate Planner Flores presented the staff report, which is on file in the Design and Development Department. 3. COUNCIL WORKSHOP RECAP Planning Manager Perez presented the staff report, which is on file in the Design and Development Department. 4. LEAGUE OF CALIFORNIA CITIES 2018 PLANNING COMMISSION ACADEMY Planning Manager Perez presented the staff report, which is on file in the Design and Development Department. He stated that four commissioners had been registered for the academy and due to scheduling conflicts one commissioner will not be able to attend. He asked the remaining Commissioners if they had any interest in attending, but none were available to attend due to other commitments. ADJOURNMENT There being no further business, it was moved and seconded by Commissioners Proctor/Wright to adjourn this meeting at 7:58 p.m. Motion passed. Respectfully submitted, WANDA WISE-LATTA, Commission Secretary City of La Quinta, California PLANNING COMMISSION MINUTES 4 FEBRUARY 13, 2018 CONSENT CALENDAR ITEM NO. 2 PLANNING COMMISSION STAFF REPORT DATE: MARCH 13, 2018 APPLICANT: CITY OF LA QUINTA REQUEST: ADOPT A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LA QUINTA FINDING THE PROPOSED PURCHASE BETWEEN THE CITY OF LA QUINTA AND FRONTIER COMMUNICATIONS FOR A PORTION OF THE PROPERTY LOCATED AT 78150 AVENIDA LA FONDA CONSISTENT WITH THE GENERAL PLAN 2035 CEQA: THE CITY COUNCIL HAS DETERMINED THAT THIS PROJECT IS EXEMPT FROM ENVIRONMENTAL REVIEW PURSUANT TO SECTIONS 15301, 15303 AND 15304 OF THE STATE CEQA GUIDELINES SINCE THE ACQUISITION WILL RESULT IN A CONTINUATION OF EXISTING TOPOGRAPHICAL FEATURES WITH NEGLIGIBLE OR NO EXPANSION OF USE, AND ANY FUTURE INSTALLATION OF NEW FACILITIES WILL BE FOR OPEN SPACE IMPROVEMENTS AND INVOLVE ONLY MINOR ALTERATIONS IN LAND AND LANDSCAPING LOCATION: 78150 AVENIDA LA FONDA RECOMMENDED ACTION Adopt a resolution confirming that the proposed purchase agreement between the City of La Quinta and Frontier Communications is consistent with the General Plan 2035. EXECUTIVE SUMMARY • The City Council approved a purchase agreement between the City of La Quinta and Frontier Communications for the purchase of the property at 78150 Avenida La Fonda, on February 20, 2018. • Acquiring this property would provide additional parking for City events located in the Village and Civic Center Campus. BACKGROUND/ANALYSIS In March of 2017, the City presented an offer to Frontier Communications to acquire approximately 6,700 square feet of unimproved land on the subject property, 78150 Avenida La Fonda (Attachment 1). As part of the acquisition, the City has agreed to reconstruct the existing block wall along the new property line. This property is adjacent to City -owned property to the east and north. In the near term, the subject Page 1of2 property would provide additional surface parking and for the long term, increase the total area available for future development. The City Council, at its regular meeting of February 20, 2018, approved by resolution the Purchase Agreement and Joint Escrow Instructions (Attachment 2). The cost to acquire the property is $67,000. There are adequate reserves ($125,060) in the Development Agreement Fund from Village Parking in Lieu revenue. Government Code 65402 requires that the Planning Commission confirm that the purchase of property is consistent with the City's General Plan by resolution. A resolution has been prepared for Planning Commission consideration with General Plan consistency findings. ENVIRONMENTAL REVIEW Pursuant to Sections 15301, 15303 and 15304 of the State CEQA Guidelines, the City Council has determined that the acquisition of the property is exempt from environmental review under CEQA because the acquisition will result in a continuation of existing topographical features with negligible or no expansion of use, and any future installation of new facilities will be for open space improvements and involve only minor alterations in land and landscaping. Prepared by: Cheri Flores, Senior Planner Attachments: 1. Site Map 2. Purchase Agreement Page 2of2 RESOLUTION NO. 2018 - A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF LA QUINTA FINDING THE PROPOSED PURCHASE AGREEMENT THE CITY OF LA QUINTA AND FRONTIER COMMUNICATIONS, FOR A PORTION OF PROPERTY LOCATED AT 78150 AVENIDA LA FONDA IS CONSISTENT WITH THE GENERAL PLAN 2035 WHEREAS, the City Council of the City of La Quinta, California did, on the 20th, day of February, 2018 approve a purchase agreement and joint escrow instructions between the City of La Quinta and Frontier Communications for certain property located at 78150 Avenida La Fonda comprised of 6,700 square feet; and WHEREAS, Buyer will make all improvement required to bring the property up to City standards and will reconstruct the existing block wall along the new property line; and WHEREAS, this Resolution has been reviewed with respect to applicability of the California Environmental Quality Act ("CEQA"), the State CEQA Guidelines (California Code of Regulations, Title 14, Sections 15000 et seq., hereafter the "State CEQA Guidelines"), and the City's environmental guidelines; and WHEREAS, pursuant to Sections 15301, 15303, and 15304 of the State CEQA Guidelines, the acquisition of the property is exempt from environmental review under CEQA because the acquisition will result in a continuation of existing topographical features with negligible or no expansion of use, and any future installation of new facilities will be for open space improvements and involve only minor alterations in land and landscaping; and WHEREAS, the Planning Commission of the City of La Quinta did make the following mandatory finding pursuant to Government Code 65402 to justify said property purchase: 1. Consistency with General Plan The proposed commercial property purchase is consistent with the La Quinta General Plan Policy LU 7.7-Continue to allow off -site parking through the payment of in lieu fees in the Village, as well as other creative parking alternatives. NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the City of La Quinta, California, as follows: SECTION 1. That the above recitals are true and correct and incorporated herein. Resolution No. 2018- General Plan Consistency- Purchase Agreement -Strategic Acquisitions, Inc. Adopted: Page 2 of 2 SECTION 2. That the Planning Commission of the City of La Quinta hereby finds and determines that the acquisition of said property is consistent with the La Quinta General Plan 2035. PASSED, APPROVED, and ADOPTED at a regular meeting of the City of La Quinta Planning Commission, held on this the 13th day of March, 2018, by the following vote: AYES: NOES: ABSENT: ABSTAIN: PAUL QUILL, Chairperson City of La Quinta, California ATTEST: GABRIEL PEREZ, Planning Manager City of La Quinta, California ATTACHMENT 1 �, i y i 1 y ► A w t ATTACHMENT 2 AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS BY AND BETWEEN FRONTIER CALIFORNIA INC., A CALIFORNIA CORPORATION, AS SELLER, AND THE CITY OF LA QUINTA, A CALIFORNIA MUNICIPAL CORPORATION AND CHARTER CITY, AS BUYER, RELATING TO A PORTION OF 78150 AVENIDA LA FONDA, LA QUINTA, CALIFORNIA 00016809.3 AGREEMENT OF PURCHASE AND SALE AND JOINT ESCROW INSTRUCTIONS This Agreement of Purchase and Sale and Joint Escrow Instructions ("Agreement"), dated solely for reference purposes as of 2018, is made and entered into by and between FRONTIER CALIFORNIA INC., a California corporation ("Seller") and THE CITY OF LA QUINTA, a California municipal corporation and charter city ("Buyer"), with reference to the following facts: RECITALS A. Seller is the owner of certain land, containing approximately 37,461 square feet, located at 78150 Avenida La Fonda, in the City of La Quinta (the "City"), County of Riverside (the "County"), State of California (the "State"), more particularly described on Exhibit A attached hereto and incorporated herein (the "Land"). B. A certain portion of the Land, more particularly described in Exhibit A and depicted in Exhibit A-1, both attached hereto and incorporated herein, together with any improvements thereon, and Seller's interest, if any, in any rights, privileges, and easements appurtenant to such portion, are hereinafter collectively referred to as the "Property". C. Buyer desires to purchase the Property from Seller and Seller desires to sell the Property to Buyer upon the terms, conditions and provisions set forth in this Agreement. NOW, THEREFORE, for good and valuable consideration, including the payment of One Hundred and 00/100ths Dollars ($100.00) by Buyer to Seller (the "Nonrefundable Consideration"), which is independent nonrefundable consideration to Seller with respect to the rights provided to Buyer under this Agreement, the receipt and adequacy of which are acknowledged, Buyer and Seller agree as follows: AGREEMENT 1. Definitions. For the purposes of this Agreement the following terms shall be defined as follows: (a) "Closing" and "Close of Escrow" shall mean, and shall be deemed to have occurred, on that date when the Grant Deed is recorded in the official records of Riverside County, which shall be at least ten (10) days, but no more than sixty (60) days, after expiration of the Due Diligence period. If the Closing falls on a weekend or federal or state holiday, then such date shall be automatically extended to the next succeeding weekday that is not a federal or state holiday. Closing and Close of Escrow are terms used interchangeably in this Agreement. Notwithstanding the foregoing identified closing date(s), Buyer and Seller may mutually agree to extend the Closing and Close of Escrow by memorializing such extended date in writing. (b) "Closing Date" shall mean the date of the Closing. (c) "County" shall mean Riverside County. 00016809.3 -1- (d) "Demising Wall" and "Demising Wall Work" shall have the meanings ascribed in Section 21 of this Agreement. (e) "Deposit" shall mean One Thousand and 00/100ths Dollars ($1,000.00), which shall be paid into Escrow on the Effective Date, plus any interest thereon, and which shall be subject to refund as provided herein. (f) "Due Diligence Period" shall mean the period of time from the Effective Date of this Agreement until 5:00 p.m., California time, on the date that is thirty (30) days after the Effective Date, during which Buyer must complete its due diligence as described in Section 4. (g) "Effective Date" shall mean the date that this Agreement has been signed and delivered by both Buyer and Seller. (h) "Environmental Audit" shall have the meaning given thereto in Section 16.1 hereof. (i) "Environmental Law" shall have the meaning given thereto in Section 16.1 hereof. 0) "Environmental Report(s)" shall mean the environmental reports, if any, listed on the attached Exhibit C as part of "Seller's Deliveries". (k) "Escrow" shall have the meaning given thereto in Section 3.2 of this Agreement. (1) "Escrow Holder" shall mean, Four Seasons Escrow, Inc., Attention: Malia Monroe, President. (m) "Exhibits" shall mean, collectively, the following, each of which is attached hereto and incorporated herein by this reference: Exhibit A - Legal Description of Land Exhibit A-1 - Legal Description of Property Exhibit B - Form of Grant Deed Exhibit C - Seller's Deliveries Exhibit D - Demising Wall Work (n) "FIRPTA Certificate" shall have the meaning given thereto in Section 7 of this Agreement. (o) "Grant Deed" shall have the meaning given thereto in Section 7 of this Agreement. (p) "Hazardous Materials" shall have the meaning given thereto in Section 16.1 of this Agreement. (q) "Improvements" shall mean the improvements (if any) located on the Land. 00016809.3 -2- (r) "Opening of Escrow" shall have the meaning given thereto in Section 3.2 of this Agreement. (s) "Permitted Exceptions" shall have the meaning given thereto in Section 5.1 of this Agreement. (t) "Purchase Price" is Sixty-seven Thousand and 00/100ths Dollars ($67,000.00). (u) "Seller's Deliveries" shall have the meaning given thereto in Section 4.3. (v) "Surviving Obligations" shall have the meaning given thereto in Section 4.5. (w) "Title Company" shall mean Four Seasons Escrow, Inc. (x) "Title Objection Deadline" shall be the same date as the expiration of the Due Diligence Period. (y) "Title Policy" shall have the meaning given thereto in Section 5.3 hereof. 2. Purchase and Sale. Subject to the terms and conditions set forth in this Agreement, Seller agrees to sell to Buyer and Buyer agrees to buy from Seller, the Property. In consideration of Seller's sale of the Property to Buyer, Buyer shall (a) pay to Seller the Purchase Price at the Closing, and (b) perform all of Buyer's other obligations hereunder, including construction of a Demising Wall on the Property, the various indemnities set forth herein, and any other obligations of Buyer prior to Closing, whether or not the Closing occurs hereunder. In consideration of Buyer's purchase of the Property from Seller, Seller shall perform all of Seller's obligations hereunder. 3. Deposits; Escrow. 3.1 Deposits. Within five (5) days of the Effective Date, Buyer shall deliver (or caused to be delivered) into Escrow (as hereinafter defined) with the Escrow Holder the Deposit of $1,000 in cash, by confirmed wire transfer of good and available funds. The Deposit shall be placed in an interest -bearing account. Upon expiration of the Due Diligence Period, if Buyer has not terminated this Agreement in accordance with Section 4.5, the Deposit shall be nonrefundable to Buyer and the property of Seller, except as set forth in this Agreement. At the Closing, the Title Company shall pay the Deposit to Seller in immediately available funds, and the balance of the Purchase Price, subject to the prorations and adjustments provided for herein and less the Nonrefundable Consideration, shall be deposited by Buyer into Escrow with the Title Company, to be disbursed by Title Company to Seller. 3.2 Escrow. Within one (1) business day after the Effective Date, Buyer and Seller shall open an escrow (the "Escrow") with the Escrow Holder by delivering to Escrow Holder a fully executed copy of this Agreement (the "Opening of Escrow"). The purchase and sale of the Property shall be completed through the Escrow. Buyer and Seller agree to execute any additional instructions reasonably required by the Escrow Holder that are consistent with this Agreement. If there is a conflict between any printed escrow instructions and this Agreement, the terms of this Agreement shall govern. If the Closing does not occur at the time and in the manner 00016809.3 -3 - provided in this Agreement because of the default of one of the parties, then the costs of cancellation, if any, shall be paid by the defaulting party. If the Closing does not take place for any reason other than a default by one of the parties, including if the City properly elects to terminate this Agreement pursuant to Section 4.5, then each of Buyer and Seller shall be responsible for one-half share of any cancellation costs. 3.3 Refund of Deposit. If Buyer properly elects to terminate this Agreement pursuant to Section 4.5, Escrow Holder shall pay the Deposit to Buyer one (1) business day following receipt of the termination notice from Buyer (if the current investment cannot be liquidated in one day, the Deposit shall be paid to Buyer as soon as reasonably possible) and, except for any Surviving Obligations, neither party shall have any further obligation or liability hereunder. 3.4 Other Releases of the Deposit. Upon a termination of this Agreement other than as described in Section 3.3 above, either party to this Agreement (the "Terminating Party") may give written notice to the other party (the "Non -Terminating Party") and the Escrow Holder of such termination and the reason for such termination. Such request shall also constitute a request for the release of the Deposit to the Terminating Party, which must be strictly in accordance with this Agreement. The Non -Terminating Party shall then have five (5) business days in which to object in writing to the release of the Deposit to the Terminating Party. If the Non -Terminating Party provides such a written objection, then the Escrow Holder shall retain the Deposit until it receives written instructions executed by both Seller and Buyer as to the disposition and disbursement of the Deposit, or until ordered by final court order, decree or judgment, which is not subject to appeal, to deliver the Deposit to a particular party, in which event the Deposit shall be delivered in accordance with such notice, instruction, order, decree or judgment. 3.5 Escrow Holder's Right to Interplead. Except as provided in Sections 3.3 and 3.4 above, Seller and Buyer mutually agree that in the event of any controversy regarding the Deposit, unless mutual written instructions are received by Escrow Holder directing the Deposit's disposition, the Escrow Holder shall not take any action, but instead shall await the disposition of any proceeding relating to the Deposit or, at the Escrow Holder's option, Escrow Holder may interplead all parties and deposit the Deposit with a court of competent jurisdiction in which event the Escrow Holder may recover all of its court costs and reasonable attorneys' fees. The non - prevailing party in any such interpleader action shall be solely obligated to pay such costs and fees of Escrow Holder, as well as the reasonable attorneys' fees of the prevailing party in accordance with the provisions of this Agreement. 4. Buyer's Investigation of the Property. 4.1 Investigation Period. Commencing on the Effective Date and continuing until the expiration of the Due Diligence Period, Buyer, including all agents, representatives and other persons designated by Buyer, at Buyer's sole cost and expense, shall perform such investigations and review of the Property, title matters, Seller's Deliveries, and such other matters as Buyer sees fit. Buyer shall have the right, upon reasonable prior written notice to Seller, and subject to Section 4.4, to enter on any portion of the Property for the purpose of investigation, discovery and non-invasive testing of the Property that Buyer determines to be necessary or appropriate, including, without limitation, surveying and environmental studies. Any invasive 00016809.3 -4- testing of the Property, including any "Phase II" environmental studies, shall be subject to Seller's prior written approval pursuant to Section 4.4(b) below. 4.2 Natural Hazard Disclosure. No later than five (5) business days after the Effective Date, Seller will provide, or will cause Escrow Holder to provide, Buyer with a Natural Hazard Statement, issued by a reputable provider of such statements. Buyer acknowledges and agrees that (i) Buyer shall review the Natural Hazards Statement; and (ii) by its delivery of the Natural Hazards Statement to Buyer, Seller shall have fully complied with the disclosure obligations relating to seismic, geologic and other natural hazards imposed on Seller by the following California statutory provisions: Government Code Sections 8589.4; 8589.3; Government Code Sections 51183.4, 51183.5 (Fire Hazard Severity Zone); Public Resource Code Section 2621.9 (Earthquake Fault Zone); Public Resource Code Section 2694 (Seismic Hazard Zone); and Public Resource Code Section 4136 (Wildland Area). Buyer acknowledges and agrees that upon Closing, Buyer will have had the opportunity to independently evaluate and investigate whether any or all of such Natural Hazards affect the Property and Seller shall have no liabilities or obligations with respect thereto. Without limiting the foregoing, Buyer acknowledges and agrees that Buyer knowingly and intentionally waives any disclosures, obligations or requirements of Seller with respect to Natural Hazards and the related statutory provisions, and Seller shall have no monetary liability to Buyer with respect thereto. Buyer represents that Buyer has experience acquiring commercial real estate and conducting due diligence, and that this waiver has been negotiated and is an essential aspect of the bargain between the parties. 4.3 Seller's Deliveries. Within three (3) business days after the Effective Date, Seller shall provide to Buyer, by electronic "CD" copy or by physical copies, or by providing access to a due diligence website, all of the items listed on the attached Exhibit C, to the extent in Seller's possession (the "Seller's Deliveries"). Seller makes no representation or warranty with respect to the documents that Seller may or may not have in its possession, or with respect to the content or accuracy of such documents provided to Buyer for review. Any information provided by Seller which is privileged, confidential or proprietary, including, but not limited to: internal memoranda, analyses and business plans; financial information; and correspondence and other materials to or from Seller's attorneys and potential third party buyers, shall be marked confidential and shall not be disclosed by Buyer to any other person unless if disclosure is required by any applicable law or by any administrative or judicial process or order. Buyer expressly agrees that Seller is furnishing copies of all such documents and information to Buyer as described above for informational purposes only and without representation or warranty as to the accuracy or completeness of the contents of such materials. Buyer covenants and agrees that it shall not rely on such documents and information and shall conduct its own due diligence on all matters referred to in such documents and information, or otherwise relating to the Property. 4.4 Entry Duriniz Due Diligence Period. Buyer and Buyer's representatives, agents and contractors shall have the right, at reasonable times and upon reasonable notice to Seller (which notice must describe the scope of the planned investigations), to enter upon the Property, in connection with Buyer's proposed purchase of the Property. However, Buyer agrees that: (a) the persons or entities performing such tests and investigations shall be properly licensed and qualified and shall have obtained all appropriate permits therefor; 00016809.3 - 5 - (b) Seller shall have the right of prior written approval (which shall be reasonably granted or withheld) of any proposed physical testing, invasive testing, or drilling; (c) Buyer shall advise Seller at least forty-eight (48) hours in advance of the dates of all tests and investigations and shall schedule all tests and investigations during normal business hours whenever feasible unless otherwise agreed to by the Parties in writing; (d) Seller shall have the right to have a representative of Seller accompany Buyer and Buyer's representatives, agents or designees while they are on the Property; (e) Buyer shall indemnify, defend and hold Seller free and harmless from any loss, injury, damage, claim, lien, cost or expense including reasonable attorneys' fees and costs at trial and all appellate levels, arising out of a breach of this Agreement by Buyer in connection with the inspection of the Property during the Due Diligence period due to the exercise by Buyer or Buyer's agents of the right of access described in this Section. This indemnification obligation shall survive the Closing or the termination of this Agreement; (f) Buyer shall restore the Property to the same condition as previously existed prior to Buyer's inspection at Buyer's sole cost and expense. This obligation shall survive the termination of this Agreement if this Agreement is terminated. Until restoration is complete, Buyer shall take all steps necessary to ensure that any conditions on the Property created by Buyer's testing shall not interfere with the normal operation of the Property or create any dangerous, unhealthy, unsightly or noisy conditions on the Property; and (g) Buyer agrees that, in making any physical and environmental inspections of the Property, including any due diligence activities at or about the Property, Buyer shall maintain (i) commercial general liability insurance on an occurrence basis, including contractual liability coverage (designating the indemnity provisions of subsection (g) above) and broad form property damage endorsement coverage, providing that Buyer is the named insured and that Seller, Seller's property manager, and Broker are additional insureds, and providing liability limits of not less than $1,000,000 combined single limit per occurrence with respect to bodily and personal injury, death and property damage and $2,000,000 in the aggregate, (ii) workmen's compensation insurance at statutory limits, including employer's liability insurance in an amount not less than $1,000,000 as required by law, and (iii) for any of Buyer's consultants who conduct environmental inspections of the Property, professional liability insurance of not less than $1,000,000. Buyer shall provide Seller with Certificates of Insurance in form reasonably satisfactory to Seller which evidences such insurance prior to obtaining access to the Property. Such insurance shall contain a waiver of subrogation provision with respect to Seller. 4.5 Buyer's Termination Right During Due Diligence Period, Release of Deposit. Buyer shall have the right to terminate this Agreement prior to the expiration of the Due Diligence Period, by written notice to Seller to such effect, if Buyer determines not to purchase the Property. If Buyer fails to terminate this Agreement by written notice to Seller due to any matter raised during Buyer's investigation, including without limitation, Buyer's financing, by the expiration of the Due Diligence Period, then Buyer shall be deemed to have approved all matters relating to the Property. If Buyer terminates this Agreement pursuant to this Section 4.5 prior to the expiration of the Due Diligence Period, then Escrow Agent shall return the Deposit in 00016809.3 -6- accordance with Section 3.3, subject to any claims made by Seller under Sections 4.4(e) above and 21 below. Buyer shall also provide Seller with copies of any third party reports obtained by Buyer if Buyer terminates the Agreement under this Section, except for any Environmental Audits, which are governed by Section 16.3, and except for any information which is privileged, confidential or proprietary. Upon such termination, neither party shall have any further liability to the other, except for any obligations that are intended to survive such termination, including Buyer's specific indemnity obligations under Section 4.4(e), Buyer's confidentiality obligations under Section 23.12, and obligations under Section 3.5 (the "Surviving Obligations"). 5. Condition of Title. 5.1 Permitted Exceptions. At the Close of Escrow, Seller's interest in the Property shall be conveyed to Buyer by Seller by the Grant Deed, subject to the following matters ("Permitted Exceptions"): (a) a lien for real property taxes and assessments not then delinquent; (b) matters affecting the condition of title to the Property created by or with the written consent of Buyer; (c) zoning or permit conditions; (d) any matters which would be shown by an inspection, a survey of the Property or by inquiry of persons in possession of the Property; (e) all matters of record recorded prior to the Closing Date, it being agreed that Buyer is assuming the risk of any new exceptions arising after the Closing Date, and Seller shall be responsible for any monetary liens imposed after the Effective Date and prior to the Closing Date ("Monetary Liens"), and subject to Seller's obligations under Section 13; and (f) the matters shown in the Report (as defined below). The parties agree that (i) Seller makes no express or implied warranties regarding the condition of title to the Property, (ii) Buyer shall rely on the Title Policy for protection against any title defects, (iii) Seller shall have no obligation to cure any title obligations, and (iv) Seller shall have no liability to Buyer for any title matters except to remove the Monetary Liens. 5.2 Title Review. Seller shall obtain and deliver to Buyer, not later than three (3) business days following the Effective Date, a current title report (the "Report") from Title Company. If the Report and/or any survey obtained by Buyer discloses any matter which is disapproved by Buyer (each a "Title Defect"), Buyer shall have until the Title Objection Deadline to notify Seller in writing of any such Title Defect. Seller shall have until three (3) business days after end of the Due Diligence Period to notify Buyer in writing that Seller shall, on or prior to Closing, cure or remove the Title Defect or obtain an endorsement to Buyer's title insurance policy insuring over the Title Defect. If agreed to in writing by the Parties, the Closing shall be extended as necessary to afford Seller the opportunity to cure or remove any such Title Defect; provided, however, that such extension shall not exceed thirty (30) days. Seller's failure to deliver such written notice on or prior to the three (3) business days after the expiration of the Due Diligence 00016809.3 - / - Period shall be deemed Seller's election not to cure or remove such Title Defect or obtain an endorsement insuring over such Title Defect. If Seller elects (or is deemed to have elected) not to cure or remove, or cannot cure or remove, any such Title Defect, or obtain a title endorsement insuring over such Title Defect, then Seller shall have no liability to Buyer therefor, but Buyer may terminate this Agreement as provided in Section 4.5, and the Deposit shall be refunded to Buyer. If Buyer does not terminate this Agreement, which shall be confirmed in writing from Buyer that Buyer elects to proceed to Close of Escrow, then Buyer shall be deemed to have agreed to take title subject to such Title Defects with no reduction in the Purchase Price, and all Title Defects shall be Permitted Exceptions. 5.3 Title Policy. At the Close of Escrow, Seller shall cause the Title Company to issue to Buyer a Standard Coverage Policy (e.g., CLTA) with coverage in an amount equal to the Purchase Price showing Seller's interest in the Property vested in Buyer subject only to the Permitted Exceptions and the standard printed exceptions and conditions in the policy of title insurance (the "Title Policy"). If Buyer elects to obtain any additional endorsements or an extended coverage policy, the additional premium and costs of survey for the extended coverage policy and the cost of any endorsements shall be at Buyer's sole cost and expense; however, Buyer's election to obtain an extended coverage policy shall not delay the Closing and Buyer's inability to obtain an extended coverage policy or any such endorsements shall not be deemed to be a failure of any condition to Closing. 6. Conditions to the Close of Escrow. 6.1 Conditions Precedent to Buyer's Obligations. The Close of Escrow and Buyer's obligations with respect to this transaction are subject to the following conditions precedent: (a) Seller having duly performed each and every obligation to be performed by Seller hereunder; and (b) the Title Company shall be prepared to issue the Title Policy in favor of Buyer, subject to the Permitted Exceptions and any standard pre-printed policy exceptions; and (c) Seller shall have delivered to Escrow Holder, on or before the Closing Date, the items referred to in Section 7.1; and (d) Buyer and Seller approving modifications, if any, to the plans and specifications for the Demising Wall and Demising Wall Work from those identified in Exhibit D attached to this Agreement. The conditions set forth in this Section 6.1 are solely for the benefit of Buyer and may be waived only by Buyer. At all times Buyer has the right to waive any condition, and such waiver or waivers must be in writing to Seller. 6.2 Conditions Precedent to Seller's Obligations. The Close of Escrow and Seller's obligations with respect to this transaction are subject to the following conditions precedent: 00016809.3 -O- (a) Buyer's delivery to Escrow Holder on or before the Closing, of the Purchase Price, Buyer's share of closing costs and the other items described in Section 7.2; (b) Buyer having duly performed each and every agreement to be performed by Buyer hereunder; and (c) Buyer and Seller approving modifications, if any, to the plans and specifications for the Demising Wall and Demising Wall Work from those identified in Exhibit D attached to this Agreement. The conditions set forth in this Section 6.2 are solely for the benefit of Seller and may be waived only by Seller. At all times Seller has the right to waive any condition, and such waiver or waivers must be in writing to Buyer. 6.3 Subdivision May Act Compliance — Exemption for Sale to Buyer as Public Entity. The parties acknowledge that California Government Code Section 66426.5 provides that a conveyance to a public entity is not required to comply with the California Subdivision Map Act ("CSMA"). Because Buyer is a public entity, the parties acknowledge and agree that the transaction contemplated by this Agreement is not subject to the CSMA. Buyer makes no representations or warranties in this Agreement regarding Seller's obligations under the CSMA except to the extent that Buyer agrees that the transaction contemplated by this Agreement is exempt from the CSMA. Buyer similarly makes no representations or warranties regarding the condition of the Land relative to any applicable State or local requirements, including any applicable City Code requirements. 7. Deliveries to Escrow Holder. 7.1 By Seller. On or before Closing, Seller shall deliver or cause to be delivered to Escrow Holder the following items: (a) A Grant Deed ("Grant Deed"), in the form attached to this Agreement as Exhibit B, duly executed and acknowledged by Seller and in recordable form, conveying the Property to Buyer, subject to the Permitted Exceptions; (b) A Transferor's Certificate of Non -Foreign Status ("FIRPTA Certificate") properly executed by Seller; (c) A properly executed California Form 593-C or other evidence sufficient to establish that Buyer is not required to withhold any portion of the Purchase Price pursuant to Sections 18805 and 26131 of the California Revenue and Taxation Code; (d) A settlement statement (the "Settlement Statement") setting forth prorations, taxes and other monies to be paid by each party at Closing, as described in Sections 8 and 9, prepared by Escrow Holder in form and substance satisfactory to the parties hereto, and executed by Seller; and 00016809.3 -9- (e) Such corporate resolutions, certificates of good standing and/or other corporate or partnership documents relating to Seller as are reasonably required by Escrow Holder in connection with this transaction. 7.2 By Buyer. On or before Closing, Buyer shall deliver or cause to be delivered to Escrow Holder the following items: (a) The balance of the Purchase Price, after crediting Buyer for the Deposit, in accordance with Section 3; (b) The amount due Seller, if any, after the prorations are computed in accordance with Section 9; (c) The Settlement Statement, executed by Buyer; and (d) Such corporate resolutions, certificates of good standing and/or other corporate or partnership documents relating to Buyer as are reasonably required by Escrow Holder in connection with this transaction. 7.3 By Buyer and Seller. Buyer and Seller shall each deposit such other instruments consistent with this Agreement as are reasonably required by Escrow Holder or otherwise required to close escrow. In addition, Seller and Buyer hereby designate Escrow Holder as the "Reporting Person" for the transaction pursuant to Section 6045(e) of the Internal Revenue Code. 8. Closing Costs and Expenses. 8.1 Seller. Seller shall pay Seller's share of prorations as described in Section 9 below. 8.2 Buyer. Buyer shall pay (a) all premiums for the Title Policy, including any extended coverage and any endorsements requested by Buyer, in connection with the Title Policy, (b) all escrow fees and recording costs, and (c) Buyer's share of prorations as described in Section 9 below. 8.3 Transaction Costs. Buyer and Seller shall each pay all legal and professional fees and fees of other consultants incurred by Buyer and Seller, respectively. 9. Prorations. The following prorations shall be made between the parties at Closing, as of midnight on the day preceding the Closing, except as otherwise specified in this Section. 9.1 Taxes and Assessments. All non -delinquent real estate taxes and assessments on the Property shall be prorated as of the Close of Escrow based on the actual current tax bill for the Property. All delinquent taxes and all delinquent assessments, if any, assessed against the Property shall be paid at the Close of Escrow by Seller. All supplemental taxes pursuant to this transaction that are billed or assessed after the Close of Escrow shall be the responsibility of Buyer. If Seller has filed real estate tax appeals with respect to the assessed value of the Property, Buyer agrees to cooperate with such appeals, including, but not limited to, the prompt 00016809.3 -10- signing of related documentation and provision of requested information. Seller shall retain all rights to any real estate tax appeals or refunds relating to the period prior to the Close of Escrow. Any real estate tax refunds received by Buyer, which are allocable to the period prior to Close of Escrow, shall be paid by Buyer to Seller within ten (10) days of Buyer's receipt of such tax refunds. 9.2 Proration Schedule. At least three (3) days prior to Closing, Seller shall provide to Buyer a draft Settlement Statement for Buyer's review and approval, which approval shall not be unreasonably withheld or delayed. 9.3 Post Closing Adjustments. Within one hundred eighty (180) days after the Closing, Buyer shall have the right to prepare and present to Seller for its review and approval a calculation of the proration of any other items of income or expense prorated under this Section whose precise amounts could not be determined prior to Closing. Either party shall be entitled to a post -Closing adjustment for any incorrect proration or adjustment in accordance with this Section. In each case, the parties shall make the appropriate adjusting payment between them within thirty (30) days after presentment to Seller of Buyer's calculation. Seller may inspect Buyer's books and records related to the Property to confirm the calculation made by Buyer. No further adjustments, payments, or credits with respect to the prorations for the Property shall accrue after the applicable dates listed above. All prorations shall be made as of the date of Close of Escrow based on a three hundred sixty-five (365)-day year or a thirty (30)-day month, as applicable. 9.4 Survival. This Section 9 shall survive the Closing, and no claims for prorations shall be made unless Seller or Buyer notifies the other of a specific claim or right under this Section 9 prior to the date specified in Section 9.3 above. 10. Sale of Property "As -Is". 10.1 No Oral Agreements or Representations; As -Is Purchase. BUYER REPRESENTS, WARRANTS AND COVENANTS TO SELLER THAT BUYER SHALL, DURING THE DUE DILIGENCE PERIOD AND PRIOR TO CLOSING, INDEPENDENTLY AND PERSONALLY INSPECT THE PROPERTY AND IMPROVEMENTS, AND THAT BUYER HAS ENTERED INTO THIS AGREEMENT BASED UPON ITS RIGHTS AND INTENTIONS TO MAKE SUCH PERSONAL EXAMINATION AND INSPECTION. BUYER AGREES THAT BUYER SHALL ACCEPT THE PROPERTY, IN ITS THEN CONDITION AS - IS AND WITH ALL ITS FAULTS. NO PERSON ACTING ON BEHALF OF SELLER IS AUTHORIZED TO MAKE, AND BY EXECUTION HEREOF, BUYER ACKNOWLEDGES AND AGREES THAT, EXCEPT AS SPECIFICALLY PROVIDED IN THIS AGREEMENT, IF AT ALL, SELLER HAS NOT MADE, DOES NOT MAKE AND SPECIFICALLY NEGATES AND DISCLAIMS ANY REPRESENTATIONS, WARRANTIES, PROMISES, COVENANTS, AGREEMENTS OR GUARANTIES OF ANY KIND OR CHARACTER WHATSOEVER, WHETHER EXPRESS OR IMPLIED, ORAL OR WRITTEN, PAST, PRESENT OR FUTURE, OF, AS TO, CONCERNING OR WITH RESPECT TO: (I) THE VALUE OF THE PROPERTY; (II) THE INCOME TO BE DERIVED FROM THE PROPERTY; 00016809.3 - I I - (III) THE SUITABILITY OF THE PROPERTY FOR ANY AND ALL ACTIVITIES AND USES WHICH BUYER MAY CONDUCT THEREON, INCLUDING ANY LEASING OR DEVELOPMENT OF THE PROPERTY; (IV) THE HABITABILITY, MERCHANTABILITY, MARKET- ABILITY, PROFITABILITY OR FITNESS FOR A PARTICULAR PURPOSE OF THE PROPERTY; (V) THE MANNER, QUALITY, STATE OF REPAIR OR LACK OF REPAIR OF THE PROPERTY; (VI) THE NATURE, QUALITY OR CONDITION OF THE PROPERTY, INCLUDING WITHOUT LIMITATION, THE WATER, SOIL AND GEOLOGY; (VII) THE COMPLIANCE OF OR BY THE PROPERTY OR ITS OPERATION WITH ANY LAWS, RULES, ORDINANCES OR REGULATIONS OF ANY APPLICABLE GOVERNMENTAL AUTHORITY OR BODY; (VIII) THE MANNER, CONDITION OR QUALITY OF THE CONSTRUCTION OR MATERIALS, IF ANY, INCORPORATED INTO THE PROPERTY; (IX) COMPLIANCE WITH ANY ENVIRONMENTAL PROTECTION, POLLUTION OR LAND USE LAWS, RULES, REGULATION, ORDERS OR REQUIREMENTS, INCLUDING BUT NOT LIMITED TO, THE AMERICANS WITH DISABILITIES ACT OF 1990 OR ANY OTHER LAW, RULE OR REGULATION GOVERNING ACCESS BY DISABLED PERSONS, THE FEDERAL WATER POLLUTION CONTROL ACT, THE FEDERAL RESOURCE CONSERVATION AND RECOVERY ACT, THE U.S. ENVIRONMENTAL PROTECTION AGENCY REGULATIONS AT 40 C.F.R., PART 261, THE COMPREHENSIVE ENVIRONMENTAL RESPONSE COMPENSATION AND LIABILITY ACT OF 1980, AS AMENDED, THE RESOURCES CONSERVATION AND RECOVERY ACT OF 1976, THE CLEAN WATER ACT, THE SAFE DRINKING WATER ACT, THE HAZARDOUS MATERIALS TRANSPORTATION ACT, THE TOXIC SUBSTANCE CONTROL ACT, AND REGULATIONS PROMULGATED UNDER ANY OF THE FOREGOING; (X) THE PRESENCE OR ABSENCE OF HAZARDOUS MATERIALS AT, ON, UNDER, OR ADJACENT TO THE PROPERTY; (XI) THE CONTENT, COMPLETENESS OR ACCURACY OF THE SELLER'S DELIVERIES, INCLUDING ANY INFORMATIONAL PACKAGE, OR OTHER MATERIALS PREPARED BY SELLER; (XII) THE CONFORMITY OF THE IMPROVEMENTS (IF ANY) TO ANY PLANS OR SPECIFICATIONS FOR THE PROPERTY, INCLUDING ANY PLANS AND SPECIFICATIONS THAT MAY HAVE BEEN OR MAY BE PROVIDED TO BUYER; 00016809.3 -12- (XIII) THE CONFORMITY OF THE PROPERTY TO PAST, CURRENT OR FUTURE APPLICABLE ZONING OR BUILDING REQUIREMENTS, AND ANY VIOLATIONS OF SUCH REQUIREMENTS; (XIV) SUFFICIENCY OF ANY UNDERSHORING; (XV) SUFFICIENCY OF ANY DRAINAGE; (XVI) THE FACT THAT ALL OR A PORTION OF THE PROPERTY MAY BE LOCATED ON OR NEAR AN EARTHQUAKE FAULT LINE OR LOCATED IN AN ALQUIST-PRIOLO SPECIAL STUDY ZONE; (XVII) THE EXISTENCE OR LACK OF VESTED LAND USE, ZONING OR BUILDING ENTITLEMENTS AFFECTING THE PROPERTY, OR (XVIII) WITH RESPECT TO ANY OTHER MATTER CONCERNING THE PROPERTY EXCEPT AS MAY BE OTHERWISE EXPRESSLY STATED HEREIN, INCLUDING ANY AND ALL SUCH MATTERS REFERENCED, DISCUSSED OR DISCLOSED IN ANY DOCUMENTS DELIVERED BY SELLER TO BUYER, IN ANY PUBLIC RECORDS OF ANY GOVERNMENTAL AGENCY OR ENTITY OR UTILITY COMPANY, OR IN ANY OTHER DOCUMENTS AVAILABLE TO BUYER. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT HAVING BEEN GIVEN THE OPPORTUNITY TO INSPECT THE PROPERTY AND REVIEW INFORMATION AND DOCUMENTATION AFFECTING THE PROPERTY, BUYER IS RELYING SOLELY ON ITS OWN INVESTIGATION OF THE PROPERTY AND REVIEW OF SUCH INFORMATION AND DOCUMENTATION, AND NOT ON ANY INFORMATION PROVIDED OR TO BE PROVIDED BY SELLER. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT ANY INFORMATION MADE AVAILABLE TO BUYER OR PROVIDED OR TO BE PROVIDED BY OR ON BEHALF OF SELLER WITH RESPECT TO THE PROPERTY WAS OBTAINED FROM A VARIETY OF SOURCES AND THAT SELLER HAS NOT MADE ANY INDEPENDENT INVESTIGATION OR VERIFICATION OF SUCH INFORMATION AND MAKES NO REPRESENTATIONS AS TO THE ACCURACY OR COMPLETENESS OF SUCH INFORMATION EXCEPT AS MAY OTHERWISE BE PROVIDED HEREIN. BUYER AGREES TO FULLY AND IRREVOCABLY RELEASE ALL SUCH SOURCES OF INFORMATION AND PREPARERS OF INFORMATION AND DOCUMENTATION TO THE EXTENT SUCH SOURCES OR PREPARERS ARE SELLER, OR ITS EMPLOYEES, OFFICERS, DIRECTORS, PARTNERS, REPRESENTATIVES, AGENTS, SERVANTS, ATTORNEYS, AFFILIATES, PARENT COMPANIES, SUBSIDIARIES, SUCCESSORS OR ASSIGNS FROM ANY AND ALL CLAIMS THAT THEY MAY NOW HAVE OR HEREAFTER ACQUIRE AGAINST SUCH SOURCES AND PREPARERS OF INFORMATION FOR ANY COSTS, LOSS, LIABILITY, DAMAGE, EXPENSE, DEMAND, ACTION OR CAUSE OF ACTION ARISING FROM SUCH INFORMATION OR DOCUMENTATION. SELLER IS NOT LIABLE OR BOUND IN ANY MANNER BY ANY ORAL OR WRITTEN STATEMENTS, REPRESENTATIONS OR INFORMATION PERTAINING TO THE PROPERTY, OR THE OPERATION THEREOF, FURNISHED BY ANY OF THE FOREGOING ENTITIES AND INDIVIDUALS OR ANY OTHER INDIVIDUAL 00016809.3 -13 - OR ENTITY. BUYER FURTHER ACKNOWLEDGES AND AGREES THAT TO THE MAXIMUM EXTENT PERMITTED BY LAW, THE SALE OF THE PROPERTY AS PROVIDED FOR HEREIN IS MADE ON AN "AS -IS" CONDITION AND BASIS WITH ALL FAULTS, AND THAT SELLER HAS NO OBLIGATIONS TO MAKE REPAIRS, REPLACEMENTS OR IMPROVEMENTS EXCEPT AS MAY OTHERWISE BE EXPRESSLY STATED IN THIS AGREEMENT. 10.2 Release of Seller. (a) Except as expressly provided in this Agreement, Buyer and anyone claiming by, through or under Buyer hereby fully and irrevocably releases Seller, and its members, managers, partners affiliates, parent companies and subsidiaries, and each of their respective employees, officers, directors, partners, shareholders, representatives, agents, servants, attorneys, successors and assigns, and all persons, firms, corporations and organizations acting on the behalf of each of the foregoing, each a ("Seller Party", and collectively, the "Seller Parties") from any and all claims that it may now have or hereafter acquire against any Seller Party for any costs, loss, liability, damage, expenses, demand, action or cause of action arising from or related to the condition of the Property, including, without limitation, (i) environmental matters, (ii) matters described or referred to in the Environmental Report(s) or in any Environmental Audit obtained by Buyer; (iii) matters reasonably discoverable by prudent investigation during the Due Diligence Period; (iv) matters that are of public record; (v) matters otherwise disclosed by Seller to Buyer or discovered by Buyer at any time prior to the Closing; (vi) the presence of Hazardous Materials in, on, about or under the Property or which have migrated from adjacent lands to the Property or from the Property to adjacent lands, and (vii) the matters described in Section 10.1 above. This release includes any claims made by third parties. (b) THE ABOVE RELEASE INCLUDES CLAIMS OF WHICH BUYER IS PRESENTLY UNAWARE OR WHICH BUYER DOES NOT PRESENTLY SUSPECT TO EXIST WHICH, IF KNOWN BY BUYER, WOULD MATERIALLY AFFECT BUYER'S RELEASE TO SELLER. BUYER SPECIFICALLY WAIVES THE PROVISION OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR EXPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN TO HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. (c) IT IS UNDERSTOOD AND AGREED THAT THE PURCHASE PRICE HAS BEEN ADJUSTED BY PRIOR NEGOTIATIONS TO REFLECT THAT ALL OF THE PROPERTY IS SOLD BY SELLER AND PURCHASED BY BUYER SUBJECT TO THE FOREGOING. Buyer's Initials Seller's Initials 00016809.3 -14- 10.3 Survival. The covenants, terms, conditions, releases and waivers in Sections 10.1 and 10.2 above shall be binding on Buyer only after the Close of Escrow and only if title has vested with Buyer. This Section 10 shall survive the Closing and shall not merge with the Grant Deed. 11. Disbursements and Other Actions by Escrow Holder. At the Close of Escrow, Escrow Holder shall promptly undertake all of the following: 11.1 Funds. Disburse all funds deposited with Escrow Holder by Buyer in payment of the Purchase Price for the Property as follows: (a) deliver to Seller the Purchase Price, less the amount of all items, costs and prorations chargeable to the account of Seller in accordance with this Agreement; and (b) disburse the remaining balance, if any, of the funds deposited by Buyer to Buyer, less amounts chargeable to Buyer. 11.2 Recording. Cause the Grant Deed to be recorded with the Recorder's office for the County and obtain conformed copies of the recorded Grant Deed for distribution to Buyer and Seller. 11.3 Title Policy. Direct the Title Company to issue the Title Policy to Buyer. 11.4 Delivery of Documents to Buyer or Seller. Deliver to Buyer the documents (or copies thereof) deposited into Escrow by Seller. Deliver to Seller the documents (or copies thereof) deposited into Escrow by Buyer. 12. Representations and Warranties. 12.1 Representations and Warranties of Seller. Seller represents and warrants to Buyer the following, as of the Effective Date: (a) To Seller's knowledge, Seller has not received written notice from any governmental agency of any violation of Environmental Laws related to the Property. (b) To Seller's knowledge, Seller has not received written notice of any litigation relating to the Property except as disclosed to Buyer in writing. (c) To Seller's knowledge, Seller has not received any written notice from any governmental authority of any pending or threatened condemnation or similar proceeding or pending public improvements in or adjoining the Property which will adversely affect the Property. (d) Seller is duly organized and validly existing under the laws of the State of California with the full power and authority to perform its obligations hereunder. (e) The execution, delivery and performance by Seller of this Agreement has been duly and validly authorized by all requisite action on the part of the Seller. 00016809.3 -15 - This Agreement constitutes the legal, valid and binding obligation of Seller, enforceable against it in accordance with its terms. (f) None of the execution, delivery or performance of this Agreement by Seller does or will, with or without the giving of notice, lapse of time or both, violate, conflict with, constitute a default or result in a loss of rights under or require the approval or waiver of any entity under (1) the organizational documents of Seller or any material agreement, instrument or other document to which Seller is a party or by which Seller is bound, or (2) any judgment, decree, order, statute, injunction, rule, regulation or the like of a governmental unit applicable to Seller. As used herein "to the best of Seller's knowledge," "Seller's knowledge" or "Seller has not received written notice" shall mean the actual knowledge of or receipt of written notice by Seller or any duly authorized representative of Seller. There shall be no duty imposed or implied to investigate, inspect or audit any such matters, and there shall be no personal liability on the part of any such duly authorized representatives. 12.2 Representations and Warranties of Buyer. Buyer represents and warrants to Seller the following, which shall be true and correct as of the Effective Date hereof and as of the Closing Date: (a) Buyer is the City of La Quinta, a California municipal corporation and charter city, duly organized and validly existing under the laws of the State of California with the full power and authority to perform its obligations hereunder. (b) The execution, delivery, and performance by Buyer of this Agreement has been duly and validly authorized by all requisite action on the part of the Buyer. This Agreement constitutes the legal, valid and binding obligation of Buyer, enforceable against it in accordance with its terms. (c) To Buyer's knowledge, none of the execution, delivery or performance of this Agreement by Buyer does or will, with or without the giving of notice, lapse of time or both, violate, conflict with, constitute a default or result in a loss of rights under or require the approval or waiver of any entity under (i) the organizational documents of Buyer or any material agreement, instrument or other document to which Buyer is a party or by which Buyer is bound, or (ii) any judgment, decree, order, statute, injunction, rule, regulation or the like of a governmental unit applicable to Buyer. As used herein `Buyer's knowledge" shall mean the actual knowledge of or receipt of written notice by Buyer or any duly authorized representative of Buyer. There shall be no duty imposed or implied to investigate, inspect or audit any such matters, and there shall be no personal liability on the part of any such duly authorized representatives. 12.3 Subsequent Variances in Representations and Warranties of Seller. (a) In the event at any time prior to Closing, Seller or Buyer learns or has reason to believe that any of the representations and warranties by Seller under Section 12.1 were not accurate when made, such party shall promptly notify the other party by a written notice (a "Variance Notice") and, in the Variance Notice, specify the factors rendering or likely to render such representation and warranty inaccurate (the "Variance"). Within ten (10) days of delivering or receiving a Variance Notice, Seller shall deliver to Buyer written notice whether it has elected 00016809.3 -16- to cure the underlying facts or circumstances causing the Variance (it being agreed that the failure to deliver such notice shall be deemed Seller's election not to cure the Variance). If Seller elects to cure the Variance, Seller will exercise reasonable efforts to effectuate the cure on or before the Closing and Closing may be delayed by Seller as necessary for a period not to exceed thirty (30) days while it attempts to cure the same. If Seller ultimately fails to cure such Variance, then the parties shall treat such failure as if Seller had elected not to cure the Variance pursuant to subSection 12.3(b) below. (b) If Seller elects not to cure the Variance and the Variance is material (material shall be that the cost to cure the Variance is in excess of $50,000.00), this Agreement shall, at the sole election of Buyer exercisable by written notice to Seller delivered not later than five (5) days after Seller has, or has been deemed to have, elected not to cure the Variance, be terminated, whereupon the Deposit shall be returned to Buyer and the parties shall have no further rights or obligations hereunder except with respect to the Surviving Obligations. However, if Buyer does not terminate this Agreement, the representations and warranties in Section 12.1 shall be deemed to be modified by the Variance. 12.4 Buyer's Knowledge as to Representations and Warranties of Seller. Notwithstanding anything in this Agreement to the contrary, if (a) on the Effective Date Buyer has knowledge that any of Seller's representations or warranties set forth in Section 12.1 are untrue in any respect, then the breach by Seller of the representations or warranties as to which Buyer has such knowledge shall be deemed waived by Buyer, and Seller shall not be in default hereunder and shall have no liability to Buyer or its successors or assigns in respect thereof, and (b) after the Effective Date and prior to Closing, Buyer obtains knowledge that any of Seller's representations or warranties set forth in this Agreement, or any of Seller's representations or warranties made in any documents delivered by Seller in connection with the Closing, are untrue in any respect, then Seller shall not be in default hereunder and shall have no liability to Buyer or its successors or assigns in respect thereof following the Closing for the breach of such representations or warranties. For purposes of this Section 12.4, Buyer shall be deemed to have or to have obtained knowledge of any such matter or thing only if such matter or thing (i) is set forth in the Seller's Deliveries, or any other document delivered to and/or made available for review by Buyer, (ii) was set forth in any written studies or reports furnished to Buyer including, without limitation, the Report and any Environmental Reports, (iii) was set forth in any letter, memorandum, or other written communication provided to or otherwise made available for inspection by Buyer or Buyer's attorneys, or (iv) was otherwise within the actual knowledge of Buyer. 12.5 Survival of Representations and Warranties. The representations and warranties set forth in Sections 12.1 and 12.2 above shall survive Closing for a period of two (2) years (the "Survival Period"). No claim for a breach of any representation or warranty in this Section 12 shall be actionable or payable (i) unless and until the valid claims for all such breaches collectively aggregate more than Three Thousand and no/100 Dollars ($3,000.00), and (ii) unless written notice containing a description of the specific nature of such breach shall have been given to the other party prior to the expiration of the Survival Period, and an action shall have been commenced in a court having jurisdiction within thirty (30) days after the expiration of the Survival Period. In no event shall the total liability of Seller to Buyer for all breaches of all representations and warranties of Seller in this Agreement exceed the amount of One Hundred Twelve Thousand 00016809.3 -1 / - and no/100 Dollars ($112,000.00). Seller's liability under this Section shall be further limited as described in Section 23.10. 13. Seller's Pre -Closing Covenants. As long as this Agreement remains in full force and effect, and provided Buyer is not in default under this Agreement, Seller hereby covenants as follows: (a) Without the prior written consent of Buyer in Buyer's sole and absolute discretion (except which shall not be unreasonably withheld or delayed with respect to easements or rights of way), Seller shall not subject the Property to any additional liens, monetary encumbrances, easements, or rights of way, after the Effective Date, except for as may be otherwise provided for in this Agreement. (b) Seller shall not make any material alterations to the Property without Buyer's consent, in Buyer's sole and absolute discretion, other than necessary or typical maintenance and repairs. (c) Seller shall not enter into any contract or agreement (including but not limited to a lease or similar occupancy/use agreement) providing for the provision of goods or services to or with respect to the Property or the operation of this Agreement, without the prior written consent of Buyer, in Buyer's sole and absolute discretion. (d) Seller will maintain its existing fire and extended coverage casualty insurance (if any) in force with respect to the Property. (e) Seller will promptly notify Buyer in writing of any litigation or governmental proceeding to which Seller becomes a party or which affects the Property or any part thereof. (f) Seller will continue to operate and maintain the Property in the ordinary course of its business and substantially in accordance with Seller's present practice, subject to ordinary wear and tear and further subject to Section 15. Seller shall have no liability under this Section 13 after the Closing. Buyer's sole remedy for any alleged breach of this Section 13 shall be as described in Section 19.1. 14. Destruction. Except as provided in this Section, prior to the Close of Escrow, the entire risk of loss of damage by earthquake, flood, landslide, fire or other casualty is borne and assumed by Seller. If, prior to the Close of Escrow, any part of the Improvements is damaged or destroyed by earthquake, flood, landslide, fire or other casualty, Seller shall promptly inform Buyer of such fact in writing and advise Buyer as to the extent of the damage and whether it is, in Seller's reasonable opinion, material or not material. (a) If such damage or destruction is material, Buyer has the option to terminate this Agreement upon written notice to the Seller given not later than ten (10) days after receipt of Seller's written notice to Buyer advising of such damage or destruction. (b) For purposes of this Section 14, "material" is deemed to be any condemnation, damage or destruction to the Improvements where the cost of repair or replacement 00016809.3 -1 O - is estimated to be more than one percent (1%) of the Purchase Price of the Property or shall take more than one hundred eighty (180) days to repair after receipt of all required permits. (c) If this Agreement is so terminated, the Deposit and any interest accrued thereon, less Buyer's one-half share of Escrow cancellation costs, shall be returned to Buyer, and neither party shall have any further obligation to or rights against the other except any rights or obligations of either parry which are expressly stated to survive termination of this Agreement. (d) If Buyer does not elect to terminate this Agreement, or if the casualty is not material, and this transaction shall close pursuant to the terms of this Agreement and Seller shall assign to Buyer, at Closing, all rights to insurance claims or proceeds with respect to the damage or destruction of the Improvements. 15. Indemnification. Except for any third party claims, demands, liabilities, costs, expenses, damages and losses, causes of action and suits relating to Seller's obligations, performance, failure to perform, default, or breach under this Agreement prior to the Closing, Buyer shall indemnify, defend and hold Seller and each Seller Party harmless for, from and against any and all third party claims, demands, liabilities, costs, expenses, damages and losses, cause or causes of action and suit or suits of any nature whatsoever arising out of the ownership and/or operation of the Property by Buyer or any affiliate of Buyer after Closing. The provisions of this Section 15 shall survive the Close of Escrow, and shall not merge with the Grant Deed. 16. Hazardous Materials. 16.1 Definitions. For the purposes of this Agreement, the following terms have the following meanings: (a) "Environmental Law" means any state, federal or local law, statute, ordinance or regulation pertaining to health, hazardous materials, industrial hygiene or the environment including, without limitation CERCLA (Comprehensive Environmental Response, Compensation and Liability Act of 1980) and RCRA (Resources Conservation and Recovery Act of 1976). (b) "Hazardous Materials" means any substance, material or waste which is or becomes designated, classified or regulated as being "toxic" or "hazardous" or a "pollutant" or which is or becomes similarly designated, classified or regulated, under any Environmental Law, including asbestos, petroleum and petroleum products. (c) "Environmental Audit" means an environmental audit, review or testing of the Property performed by Buyer or any third party or consultant engaged by Buyer to conduct such study. 16.2 Disclosure of Hazardous Materials. Seller shall make available to Buyer for its inspection a copy of the Environmental Reports, if any, with Seller's Deliveries. 16.3 Environmental Audit. If during the Due Diligence Period Buyer elects to perform an Environmental Audit: 00016809.3 -19- (a) The Environmental Audit shall be conducted pursuant to standard quality control/quality assurance procedures and in accordance with Section 4. Buyer shall have no right to perform invasive testing without Seller's prior written consent, which shall not be unreasonably delayed or withheld. (b) If any report is prepared as the result of the Environmental Audit, Buyer shall promptly give Seller a copy of the report, if requested by Seller. Prior to the Closing, Buyer shall keep the report and the information contained therein confidential and shall not disclose it to any person or entity without Seller's prior written consent unless disclosure is required pursuant to any applicable law, or administrative or judicial process or order; provided, further, that Buyer may furnish a copy of said report to any proposed lender in connection with prosecution of an application for a mortgage loan and to any person or entity contemplating an investment in the Property as a partner or permitted assignee of Buyer, or to any consultant engaged in, or commenting upon the results of, said report, provided that Buyer shall be responsible for causing such parties to keep the report confidential. (c) If Buyer elects during the Due Diligence Period not to acquire the Property or if the Closing fails to occur for any reason other than a default by Seller, then upon Seller's request, Buyer shall deliver all copies of the report to, and they shall become the property of, Seller, and Buyer shall not disclose to any party the contents of the report except pursuant to any applicable law, valid legal process, or with the written consent of Seller. (d) Any ground water, soil or other samples taken from the Property shall be properly disposed of by Buyer at Buyer's sole cost and in accordance with all applicable laws. Buyer shall restore the Property to its condition existing before any testing. 17. Notices. All notices (including, without limitation, approvals, consents and exercises of rights or options) required or permitted to be given hereunder shall be in writing and shall be served on the parties at the addresses set forth below or to such other address as the party entitled to receive such notice may, from time to time hereinafter, designate by giving written notice pursuant hereto. Any such notice shall be either (a) sent by personal delivery, in which case notice shall be deemed delivered upon receipt, (b) sent by electronic mail, with written confirmation by overnight or first class mail, in which case notice shall be deemed delivered upon receipt of such electronic notice, (c) sent by certified mail, return receipt requested, postage prepaid, in which case notice shall be deemed delivered only upon actual delivery (or attempted delivery which is refused) or, (d) sent by overnight delivery using a nationally recognized overnight courier (e.g., FedEx), in which case notice shall be deemed delivered one business day after deposit with such courier. Notices given by counsel to the Buyer shall be deemed given by Buyer, notices given by counsel to the Seller shall be deemed given by Seller, and notices given to a party's counsel shall be deemed given to the party. If to Buyer: City of La Quinta 78495 Calle Tampico La Quinta, CA 92253 Attn: Frank J. Spevacek E-mail: fspevacek@la-quinta.org 00016809.3 -20- with a copy to: Rutan & Tucker 611 Anton Boulevard, Suite 1400 Costa Mesa, CA 92626 Attn: William H. Ihrke Phone: 714-338-1863 E-mail: bihrke@rutan.com If to Seller: Frontier California Inc. c/o Dexter T. Craig 21 West Avenue Spencerport, New York 14559 E-mail: Dexter.Craig@FTR.com with a copy to Stewart Ward & Josephson LLP 1601 Response Rd., Suite 390 Sacramento, CA 95815 Attn: Winnifred C. Ward E-mail: wward@swjllp.com with an additional Frontier Communications Corp. copy to: c/o Ms. Kelley Stewart 805 Central Expressway South Allen, Texas 75013 E-mail: Kelley. Stewart@FTR.com 1 41 Frontier Communications Corp. c/o Kevin Saville, Esq. 2378 Wilshire Blvd Mound, Minnesota 55364 E-mail: Kevin.Saville@FTR.com If to Escrow Holder or Four Seasons Escrow, Inc. Title Company: 51351 Avenida Bermudas La Quinta, CA 92253 Attn: Malia Monroe, President E-mail:info @ 4seasonsescrow.com 18. Broker. Seller represents and warrants to Buyer, and Buyer represents and warrants to Seller, that no broker or finder has been engaged by them, respectively, in connection with any of the transactions contemplated by this Agreement, or to its knowledge is in any way connected with any of such transactions. Buyer shall indemnify, hold harmless and defend Seller from any liability, cost, or expense arising out of or connected with any claim for any commission or compensation made by any person or entity claiming to have been retained or contacted by 00016809.3 -21- Buyer in connection with this transaction. Seller shall indemnify, hold harmless and defend Buyer from any liability, cost, or expense arising out of or connected with any claim for any commission or compensation made by any person or entity claiming to have been retained or contacted by Seller in connection with this transaction. This indemnity provision shall survive the Closing or any earlier termination of this Agreement. 19. Default. 19.1 Buyer's Remedies. In the event the Close of Escrow and the consummation of the transaction contemplated by this Agreement do not occur by reason of material default by Seller, provided that Seller shall have at least five (5) business days' prior written notice of such material default and may cure the same within such period, then Buyer, as its sole remedy, shall be entitled to either (a) terminate this Agreement, in which case Escrow Holder shall promptly return the Deposit to Buyer, subject to the terms of Section 3.4, and Seller shall pay Buyer's reasonable, out-of-pocket third party expenses incurred in connection with the transaction, reasonably documented to Seller, or (b) Buyer may elect to pursue an action for the specific performance of this Agreement, which right to pursue an action of specific performance shall only be available if Buyer is fully ready, able and willing to close this transaction, including the Deposit and all closing documentation deposited with Escrow Holder, and Seller has breached this Agreement and refused to close this transaction in breach of this Agreement, and not because of Buyer's default. Buyer shall indemnify, defend, and hold Seller harmless from and against any losses, costs, damages or liabilities, including, without limitation, damages due to Seller's inability to sell or market the Property, and reasonable attorneys' fees and costs, each arising out of or relating to Buyer's bringing any claims that are contrary to this Section, including, without limitation, any action for specific performance or the filing of a lis pendens against the Property if not brought in good faith and in strict compliance with this Section 19.1. Buyer expressly waives all rights at law or in equity to seek monetary damages (including consequential, speculative and punitive damages) for any default by Seller hereunder. 19.2 Default by Buyer. BUYER AND SELLER AGREE THAT IT WOULD BE IMPRACTICAL AND EXTREMELY DIFFICULT TO ESTIMATE THE DAMAGES SUFFERED BY SELLER AS A RESULT OF BUYER'S DEFAULT OR FAILURE TO COMPLETE THE PURCHASE OF THE PROPERTY PURSUANT TO THIS AGREEMENT, AND THAT UNDER THE CIRCUMSTANCES EXISTING AS OF THE DATE OF THIS AGREEMENT, THE LIQUIDATED DAMAGES PROVIDED FOR IN THIS SECTION REPRESENT A REASONABLE ESTIMATE OF THE DAMAGES WHICH SELLER SHALL INCUR AS A RESULT OF SUCH FAILURE; PROVIDED, HOWEVER THAT THIS PROVISION SHALL NOT LIMIT SELLER'S RIGHT TO RECEIVE REIMBURSEMENT FOR ATTORNEYS' FEES AS AUTHORIZED BY SECTION 23.6, NOR WAIVE OR AFFECT BUYER'S INDEMNITY OBLIGATIONS AND SELLER'S RIGHTS TO THOSE INDEMNITY OBLIGATIONS UNDER THIS AGREEMENT, NOR WAIVE OR AFFECT BUYER'S OBLIGATIONS TO RETURN OR PROVIDE TO SELLER DOCUMENTS, REPORTS OR OTHER INFORMATION PROVIDED TO OR PREPARED BY OR FOR BUYER PURSUANT TO APPLICABLE PROVISIONS OF THIS AGREEMENT. THEREFORE, BUYER AND SELLER DO HEREBY AGREE THAT A REASONABLE ESTIMATE OF THE TOTAL NET DETRIMENT THAT SELLER WOULD SUFFER IN THE EVENT THAT BUYER DEFAULTS AND FAILS TO COMPLETE THE PURCHASE OF THE 00016809.3 -22- PROPERTY IS AN AMOUNT EQUAL TO THE DEPOSIT (WHICH INCLUDES ANY ACCRUED INTEREST THEREON). SAID AMOUNT SHALL BE THE FULL, AGREED AND LIQUIDATED DAMAGES FOR THE BREACH OF THIS AGREEMENT BY BUYER. THE PAYMENT OF SUCH AMOUNT AS LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369, BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. UPON DEFAULT BY BUYER, AND SELLER'S TERMINATION OF THIS AGREEMENT, EXCEPT FOR THE SURVIVING OBLIGATIONS, WHICH MAY BE ENFORCED BY SELLER (IN ADDITION TO COLLECTION AND RETENTION BY SELLER OF BUYER'S DEPOSIT AS PROVIDED HEREUNDER), NEITHER PARTY SHALL HAVE ANY FURTHER RIGHTS OR OBLIGATIONS HEREUNDER, EACH TO THE OTHER EXCEPT FOR THE RIGHT OF SELLER TO COLLECT SUCH LIQUIDATED DAMAGES FROM BUYER AND ESCROW HOLDER. Buyer's Initials Seller's Initials 20. Assignment. This Agreement may not be assigned by Buyer without the prior written consent of Seller, which consent may be withheld in Seller's sole and absolute discretion. No such assignment shall relieve Buyer of any its obligations and liabilities hereunder. Notwithstanding the foregoing, in no event shall Buyer be entitled to receive any so-called "flip fee" in connection with a permitted assignment of this Agreement. Any such "flip fee" paid to Buyer as a result of any such assignment shall be credited to Seller at Closing. 21. Demising Wall Construction. Buyer agrees to construct a Demising Wall on the Property following Closing. Preliminary plans for the Demising Wall are attached hereto as Exhibit "D" (the "Demising Wall Work"). Buyer acknowledges and agrees that completion of the Demising Wall Work is a material consideration for Seller in entering into this Agreement. Buyer hereby acknowledges and agrees that the plans in Exhibit "D" for the Demising Wall are subject to design revisions and a public bidding process as required by California law. Buyer shall provide Seller with an opportunity to review and approve the final plans for the Demising Wall Work following completion of the final plans and the public bidding process, which approval shall not be unreasonably withheld. Following review and approval of the final plans for the Demising Wall Work by Seller, Buyer explicitly reserves the right to make minor modifications to the Demising Wall Work without obtaining approval from Seller. 22. [Intentionally omitted.]. 23. Miscellaneous. 23.1 Counterparts. This Agreement may be executed in counterparts, together which shall constitute a single instrument. This Agreement may be executed by facsimile or "pdf7electronic signatures. 23.2 Partial Invalidity. If any term or provision of this Agreement shall be deemed to be invalid or unenforceable to any extent, the remainder of this Agreement shall not be 00016809.3 -23 - affected thereby, and each remaining term and provision of this Agreement shall be valid and be enforced to the fullest extent permitted by law. 23.3 Possession of the Property. Seller shall deliver possession of the Property to Buyer upon the Close of Escrow, subject to the Permitted Exceptions. 23.4 Waivers. No waiver of any breach of any covenant or provision contained herein shall be deemed a waiver of any preceding or succeeding breach thereof, or of any other covenant or provision contained herein. No extension of time for performance of any obligation or act shall be deemed an extension of the time for performance of any other obligation or act except those of the waiving party, which shall be extended by a period of time equal to the period of the delay. 23.5 Successors and Assigns. Without limitation of Section 20, this Agreement is binding upon and inures to the benefit of the permitted successors and assigns of the parties hereto. 23.6 Attorneys' Fees. In the event of the bringing of any action or suit by a party hereto against another party hereunder by reason of any breach of any of the covenants, agreements or provisions on the part of the other party arising out of this Agreement, then in that event the prevailing party shall be entitled to recover from the other party all costs and expenses of the action or suit, reasonable attorneys' fees (including the allocated costs of Seller's in-house counsel), witness fees and any other professional fees resulting therefrom through trial and any appeal in connection therewith. The prevailing party shall be the party that obtains substantially the result sought, whether by settlement, judgment or dismissal. 23.7 Entire Agreement. This Agreement (including all Exhibits attached hereto) constitutes the entire contract between the parties hereto with respect to the subject matter of this Agreement and may not be modified except by an instrument in writing signed by the party to be charged with the modification. 23.8 Time of Essence. Seller and Buyer hereby acknowledge and agree that time is strictly of the essence with respect to each and every term, condition, obligation and provision hereof. 23.9 Construction. Seller and Buyer and their respective advisors believe that this Agreement is the product of all of their efforts, that it expresses their agreement and that it should not be interpreted in favor of or against either Buyer or Seller. The parties further agree that this Agreement shall be construed to effectuate the normal and reasonable expectations of a sophisticated Seller and Buyer. The parties waive the benefit of any statute or legal decision providing otherwise. Section headings shall not be used in interpreting this Agreement. Use of the term "including" shall mean "including, without limitation". 23.10 Limitation of Liability. In no event shall Seller be liable to Buyer for consequential, speculative or punitive damages and in no event shall Buyer be liable to Seller for consequential, speculative or punitive damages. The obligations of Seller hereunder are binding only on Seller and Seller's assets and shall not be personally binding upon, nor shall resort be had to, the private properties of any of the partners, officers, directors, members or shareholders of 00016809.3 -24- Seller, or any employees or agents of Seller. The obligations of Buyer hereunder are binding only on Buyer and shall not be personally binding upon, nor shall resort be had to, any elected official, employee, or agent of Buyer. 23.11 Governing Law. The parties hereto expressly agree that this Agreement shall be governed by, interpreted under, and construed and enforced in accordance with the laws of the State of California, without regard to conflict of law principles. 23.12 Confidentiality. Unless otherwise agreed to in writing by Seller, and except as required pursuant to any applicable law, or any administrative or judicial process or order, Buyer shall keep confidential all documents, financial statements, reports or other information provided to, or generated by Buyer relating to the Property, including the documents listed on Exhibit C, and shall not disclose any such information to any person other than those employees and agents of Buyer who are actively and directly participating in the evaluation of the Property and the negotiation and execution of this Agreement or financing of the purchase of the Property. Upon any termination of this Agreement for any reason, Buyer shall promptly return to Seller copies of all documents or other information pertaining to the Property provided to Buyer by Seller, including, without limitation, pursuant to Section 4. The provisions of this Section shall survive the termination of this Agreement and shall survive the Closing. 23.13 Wear and Tear. Buyer specifically acknowledges that Seller may continue to use the Property in the course of its business for a use and in a manner as was the case before the Effective Date of this Agreement. Buyer authorizes Seller to use the Property for exactly the same uses (and non -uses) in exactly the same manner as was the case on the date prior to the Effective Date until three (3) business days prior to Closing, as long as Seller removes at its own cost and expense any and all furnishings, fixtures, and equipment from the Property prior to such date. Buyer accepts the fact that reasonable wear and tear may occur after the date of this Agreement. Buyer specifically agrees that Seller is not responsible for repairing such reasonable wear and tear and that Buyer is prohibited from raising such wear and tear as a reason for not consummating this transaction or for requesting a reduction in the Purchase Price. 23.14 No Recordation. No memorandum or other document relating to this Agreement shall be recorded without the prior written consent of Seller, with the exception of recordation of the Grant Deed as provided for in Section 11.2. Seller's consent for any memorandum or document to be recorded, which is consistent with this Agreement, shall not be unreasonably withheld, delayed, or denied. 23.15 Survival. Except for the limited survival of the parties' representations and warranties, as specified in Section 12, all obligations of the parties contained herein which by their terms are intended to survive the Close of Escrow, shall survive the Close of Escrow and not merge with the Grant Deed. [signatures on next page] 00016809.3 -25- IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year hereinabove written. SELLER: BUYER: FRONTIER CALIFORNIA INC., THE CITY OF LA QUINTA, a California corporation a California municipal corporation and charter city By: By: Name: Name: Title: Title: By: Name: Title: ESCROW AGENT: Escrow Agent agrees to comply with the terms of this Agreement applicable to Escrow Agent. FOUR SEASONS ESCROW, INC. LZIN Name: Title: 00016809.3 -26- EXHIBIT A LEGAL DESCRIPTION OF LAND The land referred to herein is situated in the State of California, County of Riverside, City of La Quinta, and is described as follows: LOTS 73,74 & 75 MB 021/060 DESERT CLUB TR UNIT 4 Parcel #700-124-006 The Property consists of that certain portion consisting of approximately 6,700 square feet of gross area of the Land, as shown on Exhibit A-1. 00016809.3 A-1 EXHIBIT A-1 DEPICTION OF PROPERTY A portion of the Land, described as follows: That certain portion consisting of approximately 6,700 square feet of gross area as shown on the photo set forth below: 00016809.3 A-1-1 Recorded at Request of: When Recorded Mail to: Mail Tax Statements to: EXHIBIT B GRANT DEED GRANT DEED FOR VALUABLE CONSIDERATION, receipt of which is acknowledged, FRONTIER CALIFORNIA INC., a California corporation ("Grantor"), hereby grants to ("Grantee"), the real property in the City of La Quinta, County of Riverside, State of California, described in Exhibit A attached hereto and made a part hereof (the "Property"). The Property is being sold subject to the exceptions listed on Exhibit B attached hereto. Dated: , 20 FRONTIER CALIFORNIA INC., a California corporation Name: Title: 00016809.3 B-1 CERTIFICATE OF ACCEPTANCE (GOVERNMENT CODE SECTION 27281) THIS IS TO CERTIFY that the interest in real property conveyed by a Grant Deed dated from to the City of La Quinta, a California municipal corporation ("City") is hereby accepted by the City by the signature of the undersigned agent on behalf of the City pursuant to the authority conferred upon him by Resolution of the City, adopted on , and that the City, as the Grantee, by its said duly authorized agent, hereby consents to the recordation thereof. DATED: CITY OF LA QUINTA, a California municipal corporation By: Name: Frank J. Spevacek Title: City Manager I HEREBY ATTEST to the authenticity of the foregoing signature and to the said adoption of the said Resolution of his general authority to so act and certify that said authority has not been revoked by any subsequent Resolution or order of the City. DATED: Susan Maysels, City Clerk 00016809.3 B-2 ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF COUNTY OF On , 20_, before me, , a Notary Public in and for the State of personally appeared , proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument, and acknowledged to me that he/she executed the same in his/her authorized capacity, and that by his/her signature on the instrument he/she, or the entity upon behalf of which he/she acted, executed said instrument. I certify under PENALTY OF PERJURY under the laws of the State of that the foregoing is true and correct. WITNESS my hand and official seal. Signature (Seal) 00016809.3 U -3 EXHIBIT A TO GRANT DEED All of the real property in the City of La Quinta, County of Riverside, State of California, described as follows: [INSERT LEGAL DESCRIPTION AND DEPICTION FROM PURCHASE / SALE AGREEMENT] 00016809.3 B-4 EXHIBIT B TO GRANT DEED (a) a lien for real property taxes and assessments not then delinquent; (b) matters affecting the condition of title to the Property created by or with the written consent of Buyer; (c) zoning or permit conditions; (d) any matters which would be shown by an inspection, a survey of the Property or by inquiry of persons in possession of the Property; (e) all matters of record, whether or not recorded prior to or after the Effective Date, it being agreed that Buyer is assuming the risk of any new exceptions arising after the Effective Date, provided that Seller shall be responsible for any monetary liens imposed with Seller's approval; and (f) the matters shown in that certain Preliminary Report issued by dated , Order No. 00016809.3 B-5 EXHIBIT C SELLER'S DELIVERIES Seller to list: o Any and all disclosures required under California law concerning the known conditions of the Property; o Any and all reports and other documents concerning the physical and environmental condition of the Property (for example, any Phase I or Phase II Environmental Reports that the Seller may have in its possession); o Any and all leases, subleases, licenses, rights of entry, or other similar agreements (verbal, written, recorded or unrecorded) granting any right to use and/or occupy the Property; o Any and all surveys of the Property that the Seller may have in its possession; o Any and all recorded covenants, reciprocal easements, use restrictions, or similar agreements that the Seller may have in its possession; o The "Report" for title review as defined in Section 5.2 of the Agreement. [attach additional pages if necessary] 00016809.3 C- I EXHIBIT D DEMISING WALL WORK, PLANS & SPECIFICATIONS [to be attached] 00016809.3 D-1 BUSINESS SESSION ITEM NO. 1 PLANNING COMMISSION STAFF REPORT DATE: MARCH 13, 2018 PROPERTY OWNER: CITY OF LA QUINTA REQUEST: APPOINT A PLANNING COMMISSIONER AND ALTERNATE TO PARTICIPATE AS A MEMBER OF THE EVENT SPACE AD HOC COMMITTEE LOCATION: SOUTHEAST CORNER OF SILVERROCK WAY AND AVENUE 52 RECOMMENDED ACTION Appoint a Planning Commissioner and alternate to participate as a member of the event space ad hoc committee. EXECUTIVE SUMMARY • Council approved the SilverRock Resort Specific Plan in July 2006, which includes a 35-acre public event site. • SilverRock development will generate $3.4 million of development impact fees. • Council requests the Planning Commission appoint a Commissioner and an alternate to participate in the ad hoc committee for the event space planning. BACKGROUND/ANALYSIS In July 2006, Council approved the SilverRock Specific Plan, which designates 35 acres as special event space to accommodate art shows, festivals, corporate events, automobile shows, and public parking. In November 2014, Council approved the Development Agreement with the SilverRock Development Company to construct two hotels, a conference center, a new golf clubhouse, and retail and resort residential uses. During the next five years, $3,400,000 in development impact fees is expected from this development. Village infrastructure improvements, funded by the Alternative Transportation Planning (ATP) grant, will commence in late spring 2019 and impact the ability to hold the 2020 La Quinta Arts Festival at the Civic Center campus. SilverRock Event Space Council provided direction to staff for preliminary planning for the event grounds and Page 1 of 2 space at SilverRock. The first phase would entail constructing an art walk and festival space (to accommodate art festivals), parking, and the infrastructure to accommodate future expansion. The second and third phases could entail additional turfed and/or improved area to accommodate larger festivals. A phased approach would allow flexibility for unforeseen needs and potential non -City funded opportunities. In addition to events, this space would be open to residents to recreate, hike and relax, similar to the Civic Center Campus. Ad Hoc Design Committee Staff presented the event space concept at the February 6, 2018 Council meeting and Councilmembers expressed support for the venue and establishing an ad hoc committee for the event space planning. At the February 13, 2018 Planning Commission meeting the names of four Commissioners were forwarded to Council for appointment to the ad hoc committee that included Mary Caldwell, Kevin McCune, Michael Proctor, and Robert Wright. On February 20, 2018, Council directed Planning Commission to select a Commissioner to serve on the committee and a Commissioner to serve as the Planning Commission's alternate representative. Timing In order to accommodate events by the spring of 2020, turfed areas must be grassed by July 2019. Event space planning by the ad hoc committee would commence March 2018 and end July 2018. Council would consider ad hoc committee event space plans in August 2018. Assuming an 8-month grading and site preparation period, the City would need to bid the construction phase by the end of 2018 and construction would begin March 2019. This would be in advance of the full payment of the SilverRock development DIF income; the RDA loan repayment or Measure G funds would need to be used with repayment from DIF income as SilverRock develops. Prepared/Approved by: Gabriel Perez, Planning Manager Page 2of2 STUDY SESSION ITEM NO. 1 ta 0"irdu GEM of the DESERT — TO: Honorable Chair and Members of the Planning Commission FROM: Gabriel Perez, Planning Manager DATE: March 13, 2018 SUBJECT: DISCUSS NON -BEDROOM CONVERSION LIMITATIONS Council adopted an extension of the moratorium for 120 days on February 20, 2018 that prohibits approval of any entitlements, such as building permits that propose conversion of residential common living area to bedroom space and directed staff to draft code amendments to limit non -bedroom conversions for Council consideration on April 17, 2018. At the joint study session of Council and Commission on February 27, 2018 it was directed that Commission further study the issue. Since adoption of the moratorium, staff reviewed residential development standards of nearby cities and found: • No Coachella Valley cities directly limit non -bedroom conversions in single- family residences. • City of Rancho Mirage limits residences of 1,900 square feet of living area or less to a maximum of 4 bedrooms. • City of Indio requires an additional garage space for residences with more than 4 bedrooms. • City of Riverside limits bedrooms space to less than 50% of residential living area and requires additional on -site parking when homeowners exceed 5 bedrooms. This response was due to the proliferation of non -bedroom conversions of residences near the University of California, Riverside. Amendments to the residential development standards of Title 9, Zoning, would require approval at a public hearing of a zoning text amendment by Planning Commission and City Council. Staff suggests consideration of the following amendments to the residential development standards: • 40-50% bedroom space maximum coverage within existing dwelling unit. • Limit residences of up to 2,000 sq. ft. to 4 bedrooms; up to 3,000 sq. ft. to 6 bedrooms; more than 3,000 sq. ft. no bedroom maximum. • Require additional on -site covered parking for proposals adding more than 4 or 5 bedrooms. • Limit guest houses to 2 bedrooms. Currently, accessory dwelling units (ADUs) are limited to 2 bedrooms and guest houses have no bedroom limitation. Staff also reviewed short-term vacation rental (STVR) ordinances of resort communities that limit non -bedroom conversions and/or mitigate STVR impacts to neighbors. Amendments to the STVR standards of Title 3, Revenue and Finance, would require adoption of an ordinance as a Council business session item. Staff identified the following standards that may limit non -bedroom conversions: • Parking. Limit STVR parking to off-street only, thereby reducing impact on the neighborhood on -street parking supply (Palm Desert, Palm Springs, Indian Wells, Big Bear Lake, and Las Vegas). The cities of Indian Wells and Big Bear Lake limit STVRs to one vehicle per bedroom. • Bedroom limitations. Limit number of bedrooms that can be advertised for any STVR or by property size thresholds. City of Las Vegas requires approval of a conditional use permit for STVRs with 4 or more bedrooms. • Distance/area limitations. Limit STVR to designated areas or establish a distance requirement between STVRs (Palm Desert and Las Vegas). • Owner -occupied vs. Investor -owned STVRs. Limit STVRs to owner -occupied residences or establish limitations for investor -owned STVRs (Las Vegas). • Limit number of STVRs per applicant within the City. • Casitas/ADUs. Prohibit casitas and ADUs as STVRs, as long as state mandates regarding ADUs are met (Las Vegas). • Staff requests the Council and Commission discuss non -bedroom conversion limitations and amendments to the short term vacation rental ordinance. Staff is available to answer questions during the study session. Staff recommends the Commission make recommendations for code amendments to Council. Staff will present draft code amendments to Commission and Council for review within the moratorium extension period. 2 STAFF ITEM N0. 1 ta W GEM of the DESERT — TO: Honorable Chair and Members of the Planning Commission FROM: Nicole Sauviat Criste, Consulting Planner DATE: March 13, 2018 SUBJECT: REPORT ON PROGRESS, CUP 2007-105 AND TPM 31876 MAYER VILLA CAPRI At its meeting of June 20, 2017, the City Council approved a two year extension to Tentative Parcel Map 31876 (TPM2017-0001) and Conditional Use Permit 2007-105 (CUP 2017-0002). The project consists of a retail project on the west half of the site, and a medical office complex on the east, on a project site that totals 25± acres at the northeast corner of Fred Waring Drive and Washington Street. The Council expressed concerns at the time that there had been no activity toward the development of the property, and asked the applicant several questions in that regard. The Council's concern was related to the age of the approval (the original approval dates to 2007), and the relevance of the project in the current market. Because of this concern, the Council added a condition of approval that required that the applicant report to the Planning Commission on the progress made toward development in March of 2018 to demonstrate that efforts were being made to activate the project. Staff contacted the applicant in February and asked for a report of progress. The applicant's representative, Mr. Marvin Roos, provided the attached letter on February 26, 2018. As indicated in the letter, the applicant has designed a conceptual project that would activate the Mixed Use Overlay on the site, as allowed in the Zoning Ordinance. The applicant included residential, commercial and hotel land uses in that plan, secured letters of interest from developers interested in each of the components, and later secured a purchase agreement with a buyer for the entire site. That purchase agreement included a requirement for site planning to City Mixed Use Overlay standards, but the purchaser's site plan did not meet these requirements, and in February of this year the sales transaction was canceled. The applicant, however, is continuing to pursue a commercial developer for the project. As described above and in the attached letter, staff believes that the applicant has made efforts toward the development of the property. The Council's condition of approval did not specify what further action might be required, beyond requiring that the applicant report to the Planning Commission. It is therefore the Commission's option to: 1. Receive and file the applicant's letter and this staff report, and allow the extension to continue to March 17, 2019. 2. Receive and file the applicant's letter and this staff report, and set a follow up report for a time of the Commission's choosing (potentially another 6 months or one year). 3. Reject the applicant's letter and this staff report, and recommend to the City Council that the extension be rescinded. The Planning Commission's discussion and action on this matter will be reported to the City Council as an informational item, thereby completing the condition of approval. Attachments: 1. Letter from Marvin Roos dated February 26, 2018 2. TPM 31876 Layout 3. Site Plan 2 ATTACHMENT 1 Marvin Roos, AICP (emeritus) Planning Consultation Land Planning/Entitlements/Process February 26, 2018 Ms. Nicole Sauviat Criste Consulting Planner City of La Quinta 78495 Calle Tampico La Quinta, CA 92253 Subject: Mayer Villa Capri Development Progress Dear Ms. Criste, Thank you for the reminder of the direction given to Mayer Villa Capri LP ("MVC") last June at the time of the Council's approval of our two-year time extension request for our Site Development Permit, Conditional Use Permit and Tentative Parcel Map. A timeline of recent activities concerning the property is below and shows that our team, starting immediately after the City Council action, has been actively developing an updated site plan that better responds to the City's Mixed Use Ordinance and current market conditions. As noted below, MVC has also been engaged with developers interested in the property including the negotiation and execution of a purchase agreement at one point and is still pursuing the appropriate team members for the development of this key property. It is our intention to meet with Planning staff shortly after March 1 to review the progress to date and to look for feedback on site planning and land use issues. July, 2017: • MVC engaged MSA Consulting, Inc., to begin working on a preliminary mixed use plan for residential, commercial and hospitality uses on the site consistent with the goals of the City's Mixed Use Ordinance. • MVC received an unsolicited Letter of Intent from a qualified residential/mixed-use developer offering to purchase the multi -family and commercial portions of the property ("Buyer"). This developer was represented by a local experienced real estate broker. • MVC received an unsolicited Letter of Intent from a qualified hotel developer offering to purchase the hotel portion of the property. • Due to the significant complexities associated with negotiating separate sales of portions of the property to multiple parties prior to recordation of a parcel map or other boundary adjustments, grading of the site, and installation of infrastructure, MVC determined that it would be prudent to pursue a sale of the entire property to a single master developer who would be responsible for site development and delivery of pads for the various approved uses. August, 2017 — October, 2017: • MVC engaged in negotiations of a purchase agreement for the sale of the entire site to Buyer. Marvin Roos, AICP (emeritus) Planning Consultation Land Planning/Entitlements/Process October, 2017: MVC entered into a binding purchase agreement with Buyer and opened an escrow for the sale of the entire property. The purchase contract required Buyer to submit a detailed site plan for the entire site to MVC within 90 day, which site plan was to be consistent with the City's Mixed Use Ordinance and to specifically identify several key elements of the proposed project. This site plan was subject to MVC's review and approval. If MVC disapproved of the site plan, MVC had the right to terminate the transaction. If approved, this site plan would serve as the basis for the project going forward. October, 2017 -January, 2018: Buyer conducted various due diligence efforts, including, as we understand it, engaging in certain discussions with various Planning staff regarding the project. Buyer engaged in negotiations with a nationally recognized retail and hospitality developer (Commercial Developer), with a goal of having Buyer ultimately develop and deliver the residential component, and with Commercial Developer ultimately delivering the retail and hospitality components. January, 2018: Buyer submitted its site plan to MVC for review. MVC determined that the site plan was not consistent with the City's Mixed Use Ordinance and did not adequately reflect and incorporate the elements that MVC understands to be important to the City, nor did it reflect a project that MVC would like to see developed on this site. Amongst other deficiencies, Buyer's site plan did not adequately integrate the various site uses (e.g., residential, commercial and hospitality). As a result, MVC disapproved of Buyer's site plan. MVC engaged in further discussions with Buyer regarding potential revisions to the site plan that would be more likely to receive City support, but MVC and Buyer were unable to reach agreement on terms upon which the transaction could proceed. February, 2018: The transaction between MVC and Buyer was cancelled. Despite this cancelation, MVC anticipates meeting with Commercial Developer in March to discuss the City's visions for this project and Commercial Developer's potential continued interest in this project. We hope that this letter is responsive to the City's request for an update as to recent efforts pertaining to this property. Please let us know if you have any questions or additional requests. Thank you for your assistance and feel free to contact me if you have any questions. Sincerely, Marvin D. Roos Planning Consultant ATTACHMENT 2 SITE PLAN / PARCEL MAP OVERLAY NO. 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The code streamlining reduced costs and timeframe for development review by delegating more approval authority to Planning Commission and staff. The code streamlining resulted in the following in 2017: - Six (6) planning cases were approved by staff in 2017 that would have previously required Planning Commission approval. - Out of the six: Two (2) were Site Development Permits, two (2) were Modification by Applicants that would have previously been considered Site Development Permits, and two (2) were Sign Programs. TrakIt and eTrakIt software serves as the City's plan check, project, and permit tracking systems. ETrakIt allows applicants to submit projects/permits online resulting in time and printing/travel cost savings to applicants. 2017 was the first full year of eTrakIt's implementation and had the following results: - 28% of projects (22 out of 80 projects) applied online. - 38% of permits (28 out of 74 permits) applied online. - 32% of projects/permits (50 out of 154 total planning cases) applied online. TrakIt software allows tracking of staff reviews of permits/projects and determines if reviews were conducted on -time or late. The 2017 permit/project review metrics are as follows: - 94% of 2017 planning staff reviews were completed on time. 680 reviews were completed (Attachment 1). In 2016, 87% planning reviews were completed on time. - 65% assigned review time was used to complete planning reviews. The 2017 planning metrics demonstrate a high percentage of reviews completed on - time and improving every year. Staff also found that a significant number of applicants elected to submit permits/projects online. Planning goals for 2018 include 40% online submittals and 95% planning staff reviews completed on time. Attachments: 1. 2017 Planning Staff Review Performance a ATTACHMENT 1 LO C7 O g rn w m lC7 O 0 rn CD HANDOUT PLANNING COMMISSION MEETING MARCH 13, 2018 —AGENDAITEM C2- FRONTIER COMMUNICATION LAND PURCHASE ADDITIONAL RECOMMENDED FINDINGS OF CONSISTENCY To be added to Resolution No. 2018- IN BOLD 1. Consistency with General_ Plan The proposed commercial property purchase is consistent with the La Quinta General Plan Policy LU 7.7-Continue to allow off -site parking through the payment of in lieu fees in the Village, as well as other creative parking alternatives; General Plan Program ED 1.3c-continue to sponsor and support . special events in the Village and at the Civic Center, as a means of attracting visitors to the area; and Goal ED 2-the continued growth of the tourism and resort industries in the City. The purchase will increase available parking to support Village events that increase tourism to La Quinta and enhances the Village as a retail and dining destination. Page 1of1 POWER POINTS PLANNING COMMISSION MEETING MARCH 13, 2018 Planning Commission Meeting March 13, 2018 City -Wide Camera System L � — [;EM nl'Ww DFSERT — Purpose In October 2016, an Ad Hoc Committee was established to assess the potential use of public safety camera systems to increase efficiencies and control costs in the public safety sector. • Ad Hoc formed October 2016 • Survey complete March 2017 • On July 5, 2017, staff provided Council an update on the survey results. Council requested staff to gather further community feedback. • To date, Ad Hoc has conducted: 4 Community Outreach Meetings, 2 Focus Groups. Ad Hoc Committee Robert Rodi, Chris Council Escobedo, Member Chief Dir. of Grace, Comm. LQPD Resources Martha Mendez, Assist. Public Chief Safety Manning, rnonuver Ad Hoc * LQPD nthon Battalion Moreno, Chief Public LaClair, Safety Anoiyst LQ Fire Jesus Kris Gamino, Gunterson, COLQ Traffic Onsite IT Signal 7peclalrst Analyst Timeline CpmmunrtY Commission rod Hoc Formed Survey Issued t uon(it Input GEM Article MppWtgs Fain Croups Council UPdutp Meetings (Feb: Mor. udw tR FHbf I (Oct 2016) 2017) rluly',107/� (Sept. 2017) [(kt, (n Ida r. 20181 IMpr�lih 1t 161 �lMmch to April 20171 2018) ec Technicacol iCouncil hpoute ,uie .018 �kr�ur�rcnm•, Focus Groups Aw Vr- -0075 r Community Outreach Results Undecided +� I Against i 1 In Support -- 0% 20% 40% 60% 80% 100% In Support Against Undecided a Survey 83% 13% 3% Focus #1 94% 6% Focus #2 80% 20% City of Moreno Valley Lj Infrastructure & Grant Opportunity • Highway Safety Improvement Grant Program • $1.87 million • Completion 4th quarter of 2018 • Tie in opportunity 3/19/2018 Punning Commission Meeting March 13, 2018 C2 - Frontier Property Acquisition tilt,. • � v• M1 �,-3a. Background • February 20, 2018, City Council approved an agreement with Frontier Communications to purchase at 78150 Avenida La Fonda • This property would provide additional parking for City events in the Village and Civic Center Campus. Location ,'Stme "�- AvenidaLo Foredo General Plan Consistency • The purchase is consistent with General Plan Goals and Policies to support tourism in the City by adding additional areas for parking in the Village. Recommendation • Adopt a resolution confirming that the proposed purchase agreement between the City of La Quinta and Frontier is consistent with the General Plan 2035. &0, Planning Commission March 13, 2018 S1 - Discuss Non -Bedroom Conversion Limitations w X. w I .( ; TI, A. { C;EN1 nj the DESEIC1 Background • Recent building permit applications to convert non - bedroom areas into bedrooms • Non -bedroom conversions may increase residential occupancies beyond intent • 120-day moratorium on non -bedroom conversions in residential districts Defining the Issue • Existing development standards allow for non - bedroom conversions • Recent building permits to increase bedrooms and occupancy for short-term vacation rentals (STVRs) Via Sevilla Bedroom Conversions • 2 Homes of 3,400 sq. ft., 2 stories, modified from 5 bedrooms to 8 bedrooms • 1 Home of 3,400 sq. ft., 2 stories, modified from 5 to 7 bedrooms Recommended Amendments • Non -bedroom conversion limitations (Title 9) • Short Term Vacation Rental Ordinance limits (Title 3) Short -Term Rental Standards • Parking • Bedroom limits • Distance/area limits • Owner occupied vs. investor -owned STVRs • Casitas/accessory dwelling units Existing Residential Standards • No limit on converting non -bedroom space into bedrooms • Dining and/or living rooms can be converted • No additional parking is required Research Findings • No Coachella Valley cities directly limit conversion of non -bedroom spaces into additional bedrooms • City of Rancho Mirage limits residences of 1,900 square feet of living area or less to a maximum of 4 bedrooms • City of Indio requires an additional garage space for residences with more than 4 bedrooms Suggested Title 9 Amendments • 40-50% bedroom space maximum coverage within existing dwelling unit • Limit residences of up to 2,000 sq. ft. to 4 bedrooms; up to 3,000 sq. ft. to 6 bedrooms • Require additional on -site covered parking for proposals adding more than 4 bedrooms Suggested Title 9 Amendments • Limit guest houses to 2 bedrooms. Accessory dwelling units are limited to 2 bedrooms and guest houses have no bedroom limitation. 3/19/2018 Representative LQ RL Lot Max Buildable Area 60 Feet Representative LQ RL Lot with Potential Attached ADU 60 Feet 3/19/2018 Number of Bedrooms 0 - Studio 1 _ 2 3 4 5 6 Representative LQ RL Lot with detached ADU 6 Feet Total of Overnight* Occupants 2 4 6 8 10 12 14 8 16 9 18 vern g p.m. - : a-m, Daytime (7:00 a.m. -10:00 p.m.) Total Daytime** Occupants (Including Number of Overnight Occupants) 8 8 8 12 16 18 20 22 24 F, Planning Commission Meeting March 13, 2018 SI 1 - Mayer Villa Capri Status Report Background • Original approvals of TTM and CUP in 2007. • 511 Extension approved by Council June 20, 2017. • Council added condition to report to Commission on status of project activity. • Applicant has worked on revised site plan and use, but has not been successful in securing development partners. Alternatives • Receive and file the applicant's letter and staff report, and allow the extension to continue to March 17, 2019. • Receive and file the applicant's letter and staff report, and set a follow up report for a time of the Commission's choosing (potentially another 6 months or one year). • Reject the applicant's letter and staff report, and recommend to the City Council that the extension be rescinded. Planning Commission Meeting March 13, 2018 SI 2 - Planning Staff Metrics � M70, �-- 4 ONE STOP SHOP EXPERIENCE Plan heck 'THE HUB" Business License CUSTOMER INTERNAL AND DIVf�S[DNAL SERVICE EXTERNAL ACCESSIBILITY TRANSPARENCY PRpCE55 COMMUNICATION 4NlFORhS[iY 2017 HUB STATISTICS QUALITY 98% '} WAIT TIME HELPFULLNESS 92 tit 97 r ti PLANNING E v I E w S CUSTOMERS SERVED 9,697 PERMITS ISSUED 3,190 PROJECTS APPROVED 169 STVRP NEW PERMITS 345 BUSINESS LICENSES ISSUED 899 3/19/2018 1% 0% 2%- i r ■ ON TIME ■ ONE DAY TWO DAYS MORE THAN TWO DAYS Avararge Rwiew Time Dept 2017 Public Works 70 68 CC teeeto �ooeo°ce � `ccce�c � CcccCC 0 7% 4°/,Z /o, 1 ❑ ON TIME n ONE DAY TWO DAYS MORE THAN TWO DAYS go009C c 3 3/19/2018 1! ON TIME ONE DAY TWO DAYS MORE THAN TWO DAYS Dept Buildir coo;e ��oee*i 000000 coeoof ■ ON TIME ONE DAY TWO DAYS MORE THAN TWO DAYS �000�t Cootrgwa �YYYi1/`¢eoo �Coe :e 4 2017 ACCOMPLISHMENTS • Service Enhancements • Interactive Development Map • eTRAKiT Workshops • HUB Lounge • Paperless Plan Review • 32% of planning projects/permits applied online (50 out of 154) • Six planning cases approved by Staff that would have previously required Planning Commission approval DEVELOPMENT PROJECTS 2018 ENGINEERING SILVERROCK CLUBHOUSE PGA WEST SPORT CLUB ANDALUSIA VILLAGE WASHINGTON STREET APT. BUILDING PERMITS SILVERROCK CONTOUR DERMATOLOGY GRIFFIN RANCH MONTERRA ANDALUSIA CODORNIZ EL POLLO LOCO MADISON CLUB HIDEAWAY TRADITION CLUB QUARRY ENTITLEMENT TRAVERTINE PAVILION PALMS CENTRE AT LA QUINTA HOTEL AT JEFFERSON SQUARE BUSINESS LICENSE/STVRP 3.700 LICENSES 2,200 STVR REGISTRANTS LA QUINTA ARTS FESTIVAL ARTS UNDER THE UMBRELLA OLD TOWN FARMER'S MARKET FRIDAY NIGHT LIGHTS COACHELLA FESTIVAL. STAGECOACH FESTIVAL 3/19/2018