PCRES 2014-026PLANNING COMMISSION RESOLUTION NO. 2014 - 026
A RESOLUTION OF THE PLANNING COMMISSION OF
THE CITY OF LA QUINTA, CALIFORNIA,
RECOMMENDING TO THE CITY APPROVAL OF A
DEVELOPMENT AGREEMENT BY AND BETWEEN THE
CITY OF LA QUINTA AND SILVERROCK DEVELOPMENT
COMPANY, LLC, RELATING TO DEVELOPMENT PLANS
FOR TWO HOTELS, CONFERENCE CENTER, RESORT
RESIDENTIAL UNITS, RETAIL COMMERCIAL,
RECREATION AREAS AND A GOLF CLUBHOUSE ON
APPROXIMATELY 145 ACRES
CASE NO.: DEVELOPMENT AGREEMENT 2014-1001
APPLICANT: SILVERROCK DEVELOPMENT COMPANY, LLC
WHEREAS, the Planning Commission of the City of La Quinta, California, did
on the 141h day of October, 2014, hold a duly noticed Public Hearing to consider a
recommendation to the City Council for approval of a Development Agreement
(Exhibit "A"), representing the development of two hotels with a combined 340
hotel rooms, 95 hotel branded residential units, a conference center, approximately
300 resort residential units, approximately 40,000 square feet of retail space,
recreation areas and a 5,000 square -foot golf clubhouse located southwest of
Avenue 52 and Jefferson Street, more particularly described as:
PORTIONS OF CERTAIN PARCELS WITHIN PARCEL MAP 33367
WHEREAS, the La Quinta Community Development Department has prepared
an Addendum to a previously adopted Mitigated Negative Declaration (EA 2002-
453) and subsequent Addendum (EA 2006-568) in compliance with the
requirements of the California Environmental Quality Act (CEQA) of 1970, as
amended. The Addendum was presented to the La Quinta Planning Commission,
which reviewed and considered the information contained in the Addendum prior to
its recommendations to the City Council; and,
WHEREAS, the Community Development Department did publish a public
hearing notice in the Desert Sun newspaper, on the 3rd day of October, 2014, as
prescribed by the Municipal Code, with public hearing notices mailed to all property
owners within 500 feet of the SilverRock Resort property; and,
WHEREAS, at said Public Hearing, upon hearing and considering all
testimony and arguments of all interested persons desiring to be heard, the
Planning Commission did make the following mandatory findings to justify a
Planning Commission Resolution 2014 - 026
Development Agreement 2014-1001
SilverRock Development Corporation
October 14, 2014
Page 2 of 3
recommendation of approval for the proposed Development Agreement:
The proposed Agreement is consistent with the La Quinta General Plan,
Municipal Code and the SilverRock Resort Specific Plan. The development
proposal as represented in the Agreement will not be developed in any
manner inconsistent with the General Plan land use designations of Tourist
Commercial and Recreational Open Space.
2. The proposed Development Agreement is compatible with the uses and
regulations as stipulated for the Tourist Commercial and Golf Course zoning
districts.
3. The proposed Development Agreement is in conformity with the public
necessity, convenience, general welfare and good land use practice. The
Development Agreement will allow development of hotel, commercial,
recreation and resort residential uses, and ensure provision of a desirable and
functional community environment and effective and efficient development
of public facilities, infrastructure, and services appropriate for the
development of the Project.
4. The proposed Development Agreement will not be detrimental to the public
health, safety and general welfare. All immediately surrounding property is
zoned for residential or golf course use development. Development of the
site for hotel, commercial, recreation and resort residential use will not
significantly impact quality of life for area residents.
5. The proposed Development Agreement will not affect the orderly
development of property or the preservation of property values.
Development of the subject site, pursuant to project application and this
Development Agreement, will enhance property values for other surrounding
area properties, as it facilitates development of a high -quality resort complex
with hotel, commercial, recreation and resort residential uses.
6. The proposed Development Agreement will have a positive fiscal impact on
the City, in that implementation of the Development Agreement will produce
revenues through payment of certain development fees, as well as the
generation of transient occupancy, sales and property taxes from the
proposed development.
NOW, THEREFORE, BE IT RESOLVED by the Planning Commission of the
City of La Quinta, California, as follows:
Planning Commission Resolution 2014 - 026
Development Agreement 2014-1001
SilverRock Development Corporation
October 14, 2014
Page 3 of 3
SECTION 1 . That the above recitations are true and constitute the findings of the
Planning Commission in this case;
SECTION 2. That it does hereby recommend to the City Council approval of the
Development Agreement (Exhibit "A"), as referenced in the title of this Resolution,
for the reasons set forth in this Resolution.
PASSED, APPROVED, and ADOPTED at a regular meeting of the City of La
Quinta Planning Commission, held on this the 14th day of October, 2014, by the
following vote, to wit:
AYES: Commissioners Bettencourt, Wilkinson, Fitzpatrick, Blum, and
Chairperson Wright.
NOES: None
ABSENT: None
ABSTAIN: None
ROBERT RIG , Chairperson
City of G Quin a, California
ATTEST:
JQVNSON, Community Development Director
ity of La Quinta, California
EXHIBIT "A"
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO
City of La Quinta
78-495 Calle Tampico
La Quinta, CA 92253
Attn: City Clerk
Space Above This Line for Recorder's Use
(Exempt from Recording Fee per Gov't Code §6103 and
§27383)
DEVELOPMENT AGREEMENT BY AND BETWEEN
THE
CITY OF LA QUINTA
AND
SILVERROCK DEVELOPMENT COMPANY, LLC
916799.3
TABLE OF CONTENTS
Page
1. GENERAL....................................................................................................................................... 2
1.1
Definitions...............................................................................................................2
1.2
Term........................................................................................................................ 6
1.3
Effective Date......................................................................................................... 6
1.4
Amendment or Cancellation................................................................................... 6
1.5
Termination.............................................................................................................7
1.6
Statement of Benefits and Consideration................................................................ 7
1.7
City Findings........................................................................................................... 8
2. AGREEMENTS AND ASSURANCES.......................................................................................... 8
2.1
Agreement and Assurance on the Part of Developer .............................................. 8
2.2
Agreement and Assurances on the Part of the City ................................................ 8
3. DEVELOPER'S OBLIGATIONS................................................................................................. 11
3.1 Development of the Project; Planned Development ............................................. 11
3.2 Mitigation Monitoring Program............................................................................ 12
3.3 Payments to City by Developer............................................................................ 12
3.4 Dedications and Improvements............................................................................. 12
3.5 Indemnification..................................................................................................... 13
3.6 Insurance............................................................................................................... 14
4. CITY'S OBLIGATIONS............................................................................................................... 16
4.1 Scope of Subsequent Review/Confirmation of Compliance Process ................... 16
4.2 Project Approvals Independent............................................................................. 16
4.3 Review for Compliance........................................................................................ 16
5. DEFAULT; REMEDIES; DISPUTE RESOLUTION................................................................... 17
5.1 Notice of Default................................................................................................... 17
5.2 Cure of Default..................................................................................................... 17
5.3 City Remedies....................................................................................................... 17
6. MORTGAGEE PROTECTION; CERTAIN RIGHTS OF CURE ................................................ 17
6.1 Encumbrances on the Project Site......................................................................... 17
6.2 Mortgage Protection.............................................................................................. 18
6.3 Mortgagee Not Obligated..................................................................................... 18
6.4 Notice of Default to Mortgagee; Right of Mortgagee to Cure .............................. 18
7. TRANSFERS OF INTEREST IN SITE OR AGREEMENT [REVISE AS PSDA
REVISED]..................................................................................................................................... 18
7.1 Transfers of Interest in Property or Agreement .................................................... 18
7.2 Transfers of Interest in Property or Agreement Prior to City's Issuance of
a Release of Construction Covenants................................................................... 19
7.3 Assignment and Assumption of Obligations........................................................ 20
7.4 Successors and Assigns......................................................................................... 20
-1-
916799.3
TABLE OF CONTENTS
Page
7.5 Assignment by City.............................................................................................. 20
8. MISCELLANEOUS......................................................................................................................
20
8.1
Notices, Demands and Communications Between the Parties .............................
20
8.2
Force Majeure.......................................................................................................
21
8.3
Binding Effect.......................................................................................................
21
8.4
Independent Entity................................................................................................
22
8.5
Agreement Not to Benefit Third Parties...............................................................
22
8.6
Covenants..............................................................................................................22
8.7
Non -liability of City Officers and Employees......................................................
22
8.8
Covenant Against Discrimination.........................................................................
22
8.9
Amendment of Agreement....................................................................................
22
8.10
No Waiver.............................................................................................................
23
8.11
Severability...........................................................................................................23
8.12
Cooperation in Carrying Out Agreement..............................................................
23
8.13
Estoppel Certificate...............................................................................................
23
8.14
Construction..........................................................................................................24
8.15
Recordation...........................................................................................................24
8.16
Captions and References.......................................................................................
24
8.17
Time......................................................................................................................24
8.18
Recitals & Exhibits Incorporated; Entire Agreement ...........................................
24
8.19
Exhibits.................................................................................................................24
8.20
Counterpart Signature Pages.................................................................................
25
8.21
City Approvals and Actions..................................................................................
25
8.22
Governing Law; Litigation Matters......................................................................
25
916799.3
DEVELOPMENT AGREEMENT
This Development Agreement (the "Agreement") is entered into as of the _ day of
, 2014 ("Reference Date"), by and between the CITY OF LA QUINTA, a
California municipal corporation and charter city organized and existing under the Constitution
of the State of the California ("City"), and Silverrock Development Company, LLC, a Delaware
limited liability company ("Developer"), with reference to the following:
RECITALS:
A. Government Code Section 65864 et seq. ("Development Agreement Act")
authorizes City to enter into a binding development agreement for the development of real
property within its jurisdiction with persons having legal or equitable interest in such real
property.
B. Pursuant to Section 65865 of the Government "Code, City has adopted its
Development Agreement Ordinance (La Quinta Municipal Code Section 9.250.030) establishing
procedures and requirements for such development agreements ("Development Agreement
Ordinance").
C. Prior to or concurrently with the execution of this Agreement, Developer has
entered into a Purchase, Sale, and Development Agreement (the "PSDA") with City, pursuant to
which (1) City, subject to the terms and conditions set forth in the PSDA, has agreed to sell to
Developer, in one or more phases, certain real property located at the southwest intersection of
Jefferson Street and Avenue 52 in the City of La Quinta, CA, as described in Exhibit A attached
hereto and shown on the Site Map attached hereto as Exhibit B (the "Site"); and (2) Developer
has agreed to construct on the Site the "Project," consisting of a luxury resort hotel and spa and
associated branded luxury residential units, a lifestyle hotel and associated lifestyle branded
residential units, a conference and shared service facility, a permanent clubhouse for the
SilverRock Resort's Arnold Palmer Classic Course, a mixed use village, a resort residential
village, and associated amenities. The Project is more fully described in, and subject to (i) this
Agreement, (ii) the SilverRock Specific Plan, also known as Specific Plan No. SP2006-080
("Specific Plan"); (iii) the Mitigated Negative Declaration prepared for an earlier version of the
Project, approved by the former La Quinta Redevelopment Agency (the "Agency") on May 15,
2002, by Agency Resolution 2002-09, as updated by the Addendum to Mitigated Negative
Declaration, approved by the City Council on July 18, 2006, by City Council Resolution No.
2006-082, and by the Second Addendum to Mitigated Negative Declaration approved by the City
Council on , by City Council Resolution No. (collectively, the "Updated Mitigated
Negative Declaration"); (iv) the PSDA, (v) any future discretionary or ministerial approvals
and/or permits issued for the Project, including all conditions of approval attached thereto
(collectively, the "Project Site Development Permits"); (vi) any future subdivision maps
approved for the Project, including all conditions of approval thereto (collectively, the "Project
Tract Maps"); and (vii) the conditions of approval associated with each and all of the foregoing
approvals (collectively, the "Conditions of Approval"). The documents, permits, approvals, and
conditions described in the foregoing clauses (i)-(vii) are collectively referred to herein as the
"Project Approvals," and are, or when approved or issued shall be, on file with the City Clerk.
-1-
916799.3
D. By virtue of the PSDA, as of the execution of this Agreement, Developer has an
equitable interest in the Site. By its execution of the consent form attached to this Agreement,
City consents to recordation of this Agreement against the Site.
E. Consistent with Section 9.250.030 of the La Quinta Municipal Code, City and
Developer desire to enter into a binding agreement that shall be construed as a development
agreement within the meaning of the Development Agreement Act. This Agreement will
eliminate uncertainty in planning for and secure the orderly development of the Project, ensure a
desirable and functional community environment, provide effective and efficient development of
public facilities, infrastructure, and services appropriate for the development of the Project, and
assure attainment of the maximum effective utilization of resources within the City, by achieving
the goals and purposes of the Development Agreement Act. In exchange for these benefits to
City, Developer desires to receive the assurance that if it acquires the Site in accordance with the
PSDA, it may proceed with development of the Project in accordance with the terms and
conditions of this Agreement and the Project Approvals, all as more particularly set forth herein.
F. The Planning Commission and the City Council have determined that the Project
and this Agreement are consistent with the City's General Plan and the Specific Plan, including
the goals and objectives thereof.
G. All actions taken by City have been duly taken in accordance with all applicable
legal requirements, including the California Environmental Quality Act (Public Resources Code
Section 21000, et seq.) ("CEQA"), and all other requirements for notice, public hearings,
findings, votes and other procedural matters.
H. On .,,,,,,,. , 2014, the City Council adopted its Ordinance No. approving
this Agreement.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing Recitals, which are incorporated
herein by this reference, the mutual covenants and agreements contained herein and other good
and valuable consideration, the receipt and legal sufficiency of which is hereby acknowledged,
the Parties do hereby agree as follows:
1. GENERAL
1.1 Definitions
1.1.1 "Agreement" means this Development Agreement and all amendments
and modifications thereto.
1.1.2 "Applicable Rules" means the rules, regulations, ordinances and officially
adopted policies of the City of La Quinta in full force and effect as of the Effective Date of this
Agreement, including, but not limited to, the City's General Plan, Zoning Ordinance, and
Specific Plan. Additionally, notwithstanding the language of this Section or any other language
in this Agreement, all specifications, standards and policies regarding the design and
-2-
916799.3
construction of public works facilities, if any, shall be those that are in effect at the time the
Project plans are being processed for approval and/or under construction.
1.1.3 "CEQA" means the California Environmental Quality Act (Cal. Public
Resources Code Sections 21000 et seq.) and the State CEQA Guidelines (Cal. Code of Regs.,
Title 14, Sections 15000 et seq.).
1.1.4 "Certificate" shall have the meaning set forth in Section 2.2.3 herein.
1.1.5 "City" means the City of La Quinta, a charter city and municipal
corporation, including each and every agency, department, board, commission, authority,
employee, and/or official acting under the authority of the City, including without limitation the
City Council and the Planning Commission.
1.1.6 "City Council" means the City Council of the City and the legislative
body of the City pursuant to California Government Code Section 65867.
1.1.7 "Community Development Director" means the Community
Development Director for the City or his or her designee.
1.1.8 "Conditions of Approval" shall have the meaning set forth in Recital C.
1.1.9 "Developer" means , a Delaware limited liability
company.
1.1.10 "Development Agreement Act" means Section 65864 et sea., of the
California Government Code.
1.1.11 "Discretionary Action" means an action which requires the exercise of
judgment, deliberation or a decision on the part of City, including any board, commission,
committee, or department or any officer or employee thereof, in the process of approving or
disapproving a particular activity, as distinguished from an activity which merely requires City,
including any board, commission or department or any officer or employee thereof, to determine
whether there has been compliance with statutes, ordinances or regulations.
1.1.12 "Discretionary Permits" means any permits, approvals, plans, Project
Tract Maps, inspections, certificates, documents, and licenses that require a Discretionary
Action, including, without limitation, site development permits, grading permits, stockpile
permits, and encroachment permits.
Agreement.
1.1.13 "Effective Date" shall have the meaning set forth in Section 1.3 of this
1.1.14 "General Plan" means the General Plan of the City.
1.1.15 "Impact Fees" means impact fees, linkage fees, exactions, assessments or
fair share charges or other similar impact fees or charges imposed on and in connection with new
development by City pursuant to City Council Resolution No. 2013-006, which was approved by
-3-
916799.3
the City Council on February 5, 2013. Notwithstanding anything herein to the contrary, none of
the following shall constitute Impact Fees: (i) Processing Fees, (ii) impact fees, linkage fees,
exactions, assessments or fair share charges or other similar fees or charges imposed by other
governmental entities and which City is required to collect or assess pursuant to applicable law,
including, without limitation, school district impact fees pursuant to Government Code Section
65995), fees required pursuant to the Coachella Valley Multiple Species Habitat Conservation
Plan, and the Transportation Uniform Mitigation Fee, or (c) other City-wide fees or charges of
general applicability, provided that such City-wide fees or charges are not imposed as an impact
fee on new development.
1.1.16 "Meriwether" means Meriwether Companies LLC [entity not found], a
Delaware limited liability company.
1.1.17 "Ministerial Permits and Approvals" means the permits, approvals,
plans, inspections, certificates, documents, licenses, and all other actions required to be taken by
City in order for Developer to implement, develop and construct the Project and the Mitigation
Measures, including without limitation, building permits, foundation permits, and other similar
permits and approvals which are required by the La Quinta Municipal Code and Project plans
and other actions required by the Project Approvals to implement the Project and the Mitigation
Measures. Ministerial Permits and Approvals shall not include any Discretionary Actions or
Discretionary Permits.
1.1.18 "Mitigation Measures" means the mitigation measures described in the
Updated Mitigated Ner r.:- eclaration and in the Mitigation Monitoring Program for the
Project.su
1.1.19 "New Laws" means amendments or modifications to the Applicable
Rules, and all ordinances, resolutions, initiatives, regulations, rules, laws, plans, policies, and
guidelines of the City and its City Council, Planning Commission, and all other City boards,
commissions, departments, agencies, and committees enacted or adopted after the Effective
Date.
1.1.20 "Parties" means collectively Developer and City. Each shall be referred
to in the singular as a "Party".
1.1.21 "Planning Area" shall mean an area designated on the Site Map as a
planning area.
1.1.22 "Planning Commission" means the City Planning Commission and the
planning agency of the City pursuant to California Government Code Section 65867.
1.1.23 "Processing Fees" means all processing fees and charges required by
City including, but not limited to, fees for land use applications, Project permits and/or
approvals, building applications, building permits, grading permits, encroachment permits,
Project Tract Maps, lot line adjustments, air right lots, street vacations, certificates of occupancy,
and any fees over which City has no authority with respect to setting the rates, which are
necessary to accomplish the intent and purpose of this Agreement. Processing Fees shall not
include Impact Fees. The amount of the Processing Fees to be applied in connection with the
-4-
916799.3
development of the Project shall be the amount which is in effect on a City-wide basis at the time
an application for the City action is made. Notwithstanding the language of this Section or any
other language in this Agreement, Developer shall not be exempt from the payment of fees, if
any, imposed on a City-wide basis as part of City's program for storm water pollution abatement
mandated by the Federal Water Pollution Control Act of 1972 and subsequent amendments
thereto, unless a waiver of these fees is provided by City in a subsequent agreement.
Section 3.1.
1.1.24 "Project" means development of the Site as set forth in more detail in
1.1.25 "Project Approvals" shall have the meaning set forth in Recital C.
1.1.26 "Project Component" shall have the meaning set forth in the PSDA.
1.1.27 "Project Tract Maps" shall have the meaning set forth in Recital C.
1.1.28 "PSDA" shall have that meaning set forth in Recital C.
1.1.29 "Reserved Powers" means the rights and authority excepted from this
Agreement's restrictions on City's police powers and which are instead reserved to City, its City
Council, Planning Commission, and all other City boards, commissions, departments, agencies,
and committees. The Reserved Powers include the powers to enact or adopt New Laws or take
future Discretionary Actions after the Effective Date of this Agreement that may be in conflict
with the Applicable Rules and Project Approvals, except such New Laws which would prevent
or materially impair Developer's ability to develop the Project in accordance with the Project
Approvals; provided, however, that with respect to such New Laws which would prevent or
materially impair Developer's ability to develop the Project in accordance with the Project
Approvals, such New Laws shall apply to the Project if such New Laws are: (1) necessary to
protect the public health and safety, and are generally applicable on a City-wide basis (except in
the event of natural disasters as found by the City Council such as floods, earthquakes and
similar acts of God, which shall apply even if not applicable on a City-wide basis); (2)
amendments to Uniform Codes, as adopted by City, and/or the La Quinta Municipal Code, as
applicable, regarding the construction, engineering and design standards for private and public
improvements to be constructed on the Site; (3) required by a non -City entity to be adopted by or
applied by the City (or if optional the failure to adopt or apply such non -City law or regulation
would cause City to sustain a loss of funds or loss of access to funding or other resources, or (4)
necessary to comply with state or federal laws and regulations (whether enacted previous or
subsequent to the Effective Date of this Agreement).
1.1.30 "RGC" means The Robert Green Company, a California corporation.
1.1.31 "Site" means approximately 96 acres of real property located at the
southwest intersection of Jefferson Street and Avenue 52 in the City of La Quinta, California
92253. The Site is legally described in the Site Legal Description and depicted in the Site Map.,
attached hereto as Exhibits A and B.
1.1.32 "Site Development Plan" shall have the meaning set forth in Section
9.180.020 of the La Quinta Municipal Code.
-5-
916799.3
1.1.33 "Site Map" means the map of the Site and immediately adjacent
properties, which is attached hereto as Attachment No.2 and incorporated herein by this
reference. The Site Map depicts twelve (12) proposed planning areas within the real property
covered by the Specific Plan, numbered 1, 2, 3, 4, 5, 6, 7, 8, 9, 1OA,IOB, 11, and 12.
1.1.34 "Specific Plan" shall have the meaning as set forth in Recital C.
1.1.35 "Term" means the period of time for which the Agreement shall be
effective in accordance with Section 1.2 herein.
1.1.36 "Transferee" means individually or collectively, Developer's successors
in interest, assignees or transferees of all or any portion of the Site.
1.1.37 "Uniform Codes" means those building, electrical, mechanical, plumbing,
fire and other similar regulations of a City-wide scope which are based on recommendations of a
multi -state professional organization and become applicable throughout the City, such as, but not
limited to, the Uniform Building Code, the Uniform Electrical Code, the Uniform Mechanical
Code, Uniform Plumbing Code, or the Uniform Fire Code (including those amendments to the
promulgated uniform codes which reflect local modification to implement the published
recommendations of the multi -state organization and which are applicable City-wide).
1.1.38 "Zoning Ordinance" means Title 9 of the La Quinta Municipal Code.
1.2 Term.
The term of this Agreement shall commence on the Effective Date and shall continue for
thirty (30) years thereafter, unless said term is otherwise terminated, modified, or extended by
circumstances set forth in this Agreement or by mutual consent of the Parties after the
satisfaction of all applicable public hearing and related procedural requirements.
1.3 Effective Date.
This Agreement shall be effective, and the obligations of the Parties hereunder shall be
effective, as of , 2014 (`Effective Date"), which is the date that Ordinance No.
takes effect.
1.4 Amendment or Cancellation by Mutual Consent.
Except as expressly stated to the contrary herein, this Agreement may be amended or
canceled in whole or in part only by mutual consent of the Parties and in the manner provided for
in Government Code Section 65867-65868 and the Development Agreement Ordinance.
Notwithstanding the foregoing, in the event that any portion of the Site is under different
ownership at some time during the Term hereof, City and the then -owner of such portion may
amend the terms of this Development Agreement and the Project Approvals with respect to said
portion, without obtaining the approval or consent of the owners of the other portions of the Site.
-6-
916799.3
1.5 Termination.
Unless terminated earlier, pursuant to the terms hereof, this Agreement shall
automatically terminate and be of no further effect upon the expiration of the Term of this
Agreement as set forth in Section 1.1. Termination of this Agreement, for any reason, shall not,
by itself, affect any right or duty arising from entitlements or approvals set forth under the
Project Approvals.
Notwithstanding anything herein to the contrary, (i) in the event the "Phase 1 Escrow" (as
that term is defined in the PSDA) fails to close within the time period set forth for such closing
in the PSDA, as such time period may be extended pursuant to the terms of the PSDA, and/or the
PSDA is terminated, this Agreement shall automatically terminate and the Developer and City
agree to execute and record such document as the "Title Company" (as that term is defined in the
PSDA) reasonably requires to remove this Agreement of record, and (ii) in the event the Phase 1
Escrow closes, but the "Phase 2 Escrow" (as that term is defined in the PSDA) fails to close
within the time period set forth for such closing in the PSDA, as such time period may be
extended pursuant to the terms of the PSDA, and/or the PSDA is terminated with respect to the
"Phase 2 Property" (as that term is defined in the PSDA), this Agreement shall automatically
terminate with respect to the Phase 2 Property and the Developer and City agree to execute and
record such document as the Title Company reasonably requires to remove this Agreement of
record from the Phase 2 Property.
The Parties acknowledge and agree that notwithstanding the provisions in the foregoing
paragraph providing for automatic termination of this Agreement on the occurrence of certain
events, each of the Development Agreement Act and Development Agreement Ordinance require
that prior to any such early termination of this Agreement, (a) the Quinta Planning Commission
must hold a public hearing regarding the proposed termination and make certain
recommendations to the City Council, and (b) the City Council must hold a public hearing
regarding the termination and make certain findings. The Parties further acknowledge and agree
that on the occurrence of any of the events described in the foregoing paragraph providing for
automatic termination, the Parties shall be deemed to have mutually consented to the early
termination of this Agreement for purposes of the Development Agreement Act and
Development Agreement Ordinance.
wwk,
1.6 Statement of Benefits and Consideration.
The Parties have determined that a development agreement is appropriate for the
construction and operation of the Project due to the substantial benefits to be derived therefrom.
The Project will promote the health, safety and general welfare of City and its residents.
In exchange for these and other benefits to City, Developer will receive the assurance that
Developer may develop the Project during the Term of this Agreement, subject to the terms and
conditions herein contained. City has undertaken the necessary proceedings, has found and
determined that this Agreement is consistent with the General Plan, and has adopted Ordinance
No. approving this Agreement. As a result of the development of the Project in
accordance with this Agreement, City will receive substantial benefits.
-7-
916799.3
In consideration of the substantial benefits, commitments and consideration to be
provided by Developer pursuant to this Agreement and in order to strengthen the public planning
process and reduce the economic costs of development, City hereby provides Developer
assurance that if Developer acquires title to the Site, Developer can proceed with the
construction and operation of the Project for the Term of this Agreement pursuant to the
Applicable Rules and this Agreement. Developer would not enter into this Agreement or agree to
provide the public benefits, commitments and consideration described in this Agreement if it
were not for the certainty provided by the agreement of City that the Project could be constructed
and operated during the Term of this Agreement in accordance with the Applicable Rules and
this Agreement.
1.7 Citeses A Findings.
City finds that review of the environmental impacts of this Agreement and the Project has
been conducted in accordance with the provisions of CEQA and the State and local guidelines
adopted thereunder, and City has given consideration to such environmental review prior to its
approval of this Agreement and the Project and has undertaken all actions necessary to comply
with CEQA. ,. «��
2. AGREEMENTS AND ASSURANCES
2.1 Agreement and Assurance on the Part of Developer; PSDA.
In consideration for City entering into this Agreement, and as an inducement for City to
obligate itself to carry out the covenants and conditions set forth in this Agreement, and in order
to effectuate the premises, purposes and intentions set forth in the Recitals of this Agreement,
Developer hereby agrees as follows:
PSDA.
2.1.1 Project Development.
Developer shall develop the Project pursuant to all of the requirements set forth in the
2.1.2 Conflicts with PSDA
To the extent there is any conflict between the terms and conditions of this Agreement
and the terms and conditions of the PSDA, the terms and conditions of the PSDA shall govern
and control.
2.2 Agreement and Assurances on the Part of the City.
In consideration for Developer entering into this Agreement, and as an inducement for
Developer to obligate itself to carry out the covenants and conditions set forth in this Agreement,
and in order to effectuate the premises, purposes and intentions set forth in this Agreement, City
hereby agrees as follows:
-8-
916799.3
2.2.1 Entitlement to Develop.
Developer has the vested right to develop the Project subject to the terms and conditions
of this Agreement, the Applicable Rules, Project Approvals and the Reserved Powers.
Developer's vested rights under this Agreement shall include, without limitation, the right to
remodel, renovate, rehabilitate, rebuild or replace the existing development and the Project or
any portion thereof throughout the applicable Term for any reason, including, without limitation,
in the event of damage, destruction or obsolescence of the existing development or the Project or
any portion thereof, subject to the Applicable Rules, Project Approvals and Reserved Powers. To
the extent that all or any portion of the existing development or the Project is remodeled,
renovated, rehabilitated, rebuilt or replaced, Developer may locate that portion of the existing
development or the Project, as the case may be, at any other location of the Site, subject to the
requirements of the Project Approvals, the Applicable Rules, and the Reserved Powers.
2.2.2 Changes in Applicable Rules.
(A) Nonapplication of Changes in Applicable Rules.
Any change in, or addition to, the Applicable Rules, including, without limitation, any
change in the General Plan or Specific Plan, zoning or building regulation, adopted or becoming
effective after the Effective Date, including, without limitation, any such change by means of
ordinance, City Charter amendment, initiative, referendum, resolution, motion, policy, order or
moratorium, initiated or instituted for any reason whatsoever and adopted by the City, City
Council, Planning Commission or any other board, commission, department or agency of the
City, or any officer or employee thereof, or by the electorate, as the case may be, which would,
absent this Agreement, otherwise be applicable to the Site and/or to the Project and which would
conflict in any way with the Applicable Rules, Project Approvals, or this Agreement, shall not be
applied to the Site or the Project unless such changes represent an exercise of City's Reserved
Powers, or are otherwise agreed to in this Agreement. Notwithstanding the foregoing, Developer
may, in its sole discretion, consent to the application to the Project of any change in the
Applicable Rules.
(B) Changes in Uniform Codes.
Notwithstanding any provision of this Agreement to the contrary, development of the
Project shall be subject to changes which may occur from time to time in the Uniform Codes, as
such Codes are adopted by the City of La Quinta.
(C) Changes Mandated by Federal or State Law.
This Agreement shall not preclude the application to the Project of changes in, or
additions to, the Applicable Rules, including rules, regulations, ordinances and official policies,
to the extent that such changes or additions are mandated to be applied to developments such as
this Project by state or federal regulations, pursuant to the Reserved Powers. In the event state or
federal laws or regulations prevent or preclude compliance with one or more provisions of this
Agreement, such provisions shall be modified or suspended as may be necessary to comply with
such state or federal laws or regulations.
-9-
916799.3
2.2.3 Subsequent Development Review.
Nothing set forth herein shall impair or interfere with the right of City to require the
processing of building permits as required by law pursuant to the applicable provisions of the La
Quinta Municipal Code and the provisions of Uniform Codes.
Prior to each request for a building permit, Developer shall provide City with a
Compliance Certificate ("Certificate") in a form created by Developer and approved by City,
which shall describe how all applicable Conditions of Approval have been fully complied with.
Each Certificate shall be distributed by City to the relevant C' . departments for checking the
representations made by Developer on the Certificate.
2.2.4 Effective Development Standards.
City agrees that it is bound to permit the uses, intensities of use and densities on the Site
which are permitted by this Agreement and the Project Approvals, insofar as this Agreement and
the Project Approvals so provide or as otherwise set forth in the Applicable Rules or the
Reserved Powers. City hereby agrees that it will not unreasonably withhold or unreasonably
condition any approvals and/or permits which must be issued by City in order for the Project to
proceed, provided that Developer reasonably and satisfactorily complies with all City-wide
standard procedures for processing applications for such approvals and/or permits.
2.2.5 Moratoria or Interim Control Ordinances.
In the event an ordinance, resolution, policy, or other measure is enacted, whether by
action of City, by initiative, or otherwise, which relates directly or indirectly to the Project or to
the rate, amount, timing, sequencing, or phasing of the development or construction of the
Project on all or any part of the Site or the implementation of the Mitigation Measures adopted in
connection with approval of the Project, City agrees that such ordinance, resolution or other
measure shall not apply to the Site, the Project or this Agreement, unless such changes are
adopted pursuant to the Reserved Powers or other applicable provisions of this Agreement.
2.2.6 Special Taxes and Assessments.
Developer shall not be obligated to support infrastructure financing undertaken by City or
others. Developer shall have the right, to the extent permitted by law, to protest, oppose and vote
against any and all special taxes, assessments, levies, charges and/or fees imposed with respect to
any assessment districts, Mello -Roos or community facilities districts, maintenance districts or
other similar districts.
2.2.7 Impact Fees.
Impact Fees imposed by City with respect to the Project shall be only those Impact Fees
in full force and effect as of the Effective Date, in the amounts/rate in effect as of the Effective
Date.
-10-
916799.3
2.2.8 Timeframes and Staffing for Processing and Review.
City agrees that expeditious processing of Ministerial Permits and Approvals and
Discretionary Actions, if any, and any other approvals or actions required for the Project are
critical to the implementation of the Project. In recognition of the importance of timely
processing and review of Ministerial Permits and Approvals and Discretionary Actions, City
agrees to reasonably cooperate with Developer to establish time frames for processing and
reviewing such Ministerial Permits and Approvals and Discretionary Actions and to comply with
any timeframes established in the Project Approvals.
3. DEVELOPER'S OBLIGATIONS
3.1 Development of the Project; Planned Development.
Developer shall construct the Project on the Site in accordance with the Project
Approvals. As depicted in the Project Approvals, as the same may be updated or amended from
time to time, the Project shall consist of a mixed -use resort development with the following
components:
(A) Modification of the existing Arnold Palmer Classic Golf Course
and rehabilitation of the Ahmanson Ranch House, along with the surrounding area within
Planning Area 1;
(B) a luxury hotel project within Planning Area 2 consisting of
approximately one hundred forty (140) luxury hotel rooms on approximately seventeen (17)
acres, consisting of approximately one hundred seventy thousand (170,000) square feet of air
conditioned and exterior spaces, and containing parking, spa and fitness center, and other
associated amenities, all as further defined by the submittal of a Site Development Plan as
prescribed by the Specific Plan;
(C) a residential development within Planning Area 3 consisting of
approximately thirty-five (35) luxury branded residential homes, potentially including lock -offs,
on approximately 14.0 acres, all as further defined by the submittal of a Site Development Plan
as prescribed by the Specific Plan;
(D) a shared service/conference facility building and associated
parking within Planning Area 4 consisting of approximately seventy-one thousand (71,000)
square feet of interior and exterior square feet (not including parking) on approximately 12.0
acres;
(E) a lifestyle hotel ("Lifestyle Hotel") project within Planning Area 5
consisting of approximately two hundred (200) hotel rooms on approximately ten (10) acres,
consisting of approximately one hundred seventy thousand (170,000) square feet of air
conditioned and exterior spaces, and including other associated amenities, all as further defined
by the submittal of a Site Development Plan as prescribed by the Specific Plan;
(F) a residential development within Planning Area 6 consisting of
approximately sixty (60) luxury branded residential homes, potentially containing lock -off units
-11-
916799.3
for a potential total key capacity of one hundred twenty (120) keys for the Lifestyle Hotel, on
approximately ten (10) acres, all as further defined by the submittal of a Site Development Plan
as prescribed by the Specific Plan;
(G) a promenade mixed -use village ("Village") within Planning Areas
7 and 9; in Planning Area 7 the Village would contain a mix of residential and commercial uses
consisting of approximately one hundred fifty thousand (150,000) square feet of livable space,
up to twenty-five thousand (25,000) square feet of mixed -use commercial, on ten and one-half
(10.5) acres; in Planning Area 9 the Village would contain either (1) a fifteen (15) acre public
park, or (2) a mix of public and private recreational uses and amenities, community cultural
elements, and residential and commercial development (not to exceed up to seventy-five
thousand (75,000) square feet of livable space and fifteen thousand (15,000) square feet of
commercial development), on approximately fifteen (15) acres, all as further defined by the
submittal of a Site Development Plan as prescribed by the Specific Plan;
(H) a resort residential village within Planning Area 8 containing one
hundred -sixty (160) residences and associated services and amenities on approximately thirty-
two and one-half (32.5) acres, all as further defined by the submittal of a Site Development Plan
as prescribed by the Specific Plan;
3.2 Compliance with Government Code Section 66473.7
Developer shall comply with the provisions of Government Code section 66473.7 with
respect to any Project Tract Maps prepared for the Project.
3.3 Mitigation Monitoring Program.
The Developer shall also comply with the mitigation monitoring program set forth in
Exhibit "C" attached hereto (the "Mitigation Monitoring Program").
3.4 Payment of Fees.
During the Term of this Agreement, Developer shall timely pay all Processing Fees and
Impact Fees with respect to the Project.
3.5 Other Fees and Charges.
Nothing set forth in this Agreement is intended to or shall be construed to limit or restrict
the City's authority to impose its existing, or any new or increased, fees, charges, levies, or
assessments for the development of the Site, or to impose or increase, subject to the required
procedure, any taxes applicable to the Site including but not limited to transient occupancy taxes,
provided nothing set forth herein, subject to the following two sentences, is intended or shall be
construed to limit or restrict whatever right Developer might otherwise have to challenge any
fee, charge, levy, assessment, or tax imposed.
-12-
916799.3
3.6 Dedications and Improvements.
Developer shall offer dedications to the City or other applicable public agency, or
complete those public improvements in connection with the Project, as specified in the
Conditions of Approval.
3.7 Indemnification.
3.7.1 Developer shall protect, defend, indemnify and hold harmless City and
City's officers, officials, members, employees, volunteers, agents, and representatives (any of the
foregoing shall be known individually as "Indemnitee" and collectively as "Indemnitees"), and
each of them, jointly and severally, against and from any and all claims, demands, causes of
action, damages, costs, expenses, losses and liabilities, at law or in equity, of every kind or
nature whatsoever, including reasonable attorneys' fees and expert witness fees, but excluding
those resulting from (i) the gross negligence or willful misconduct of any Indemnitee, or (ii)
environmental contamination of the Site or other defects on the Site existing prior to Developer's
entry thereon, but including, without limitation, injury to or death of any person or persons and
damage to or destruction of any property, threatened, brought or instituted ("Claims"), arising
out of or in any manner directly or indirectly connected with the entry upon the Site by
Developer or any of the Developer Representatives, including without limitation:
(A) any damage to the Site and any liability to any third parry incurred
by reason of any acts or omission of, including, but not limited to, any commission of any
negligent or tortious acts, by Developer or the Developer Representatives, or any of them;
(B) any mechanics' or materialmen's liens, claims, demands, actions
or suits arising (directly or indirectly) from (i) any work performed or materials supplied to or for
Developer, or (ii) any activities of Developer or any of the Developer Representatives, or any of
them, on or relating to the Site (including, without limitation, any claims by any of such
Developer Representatives).
In the event of litigation, City agrees, at no cost to City, to cooperate with Developer.
Developer shall have the obligation to provide the defense of City in the litigation, either by
providing for legal counsel or, at City's option, timely paying the legal costs incurred by City in
the defense of litigation, even though negligence or gross negligence of Developer or its
contractors, subcontractors, agents, employees or other persons acting on its behalf has not been
established at the time that the defense is provided.
3.7.2 In the event of any court action or proceeding challenging the validity of
this Agreement or the Project Approvals, Developer shall indemnify, hold harmless, pay all costs
and provide defense for City in said action or proceeding with counsel chosen by Developer and
reasonably approved by City. City shall, at no cost to City, cooperate with Developer in any
such defense as Developer may reasonably request. In the event Developer fails or refuses to
provide such defense of any challenge to this Agreement or the Project Approvals, or any
component thereof, City shall have the right not to defend such challenge, and to resolve such
challenge in any manner it chooses in its sole discretion, including terminating this Agreement.
In the event of such termination, Developer, upon written request of City, shall immediately
-13-
916799.3
execute a termination document or other document reasonably required by a reputable title
company to remove this Agreement as a cloud on title.
3.8 Insurance.
3.8.1 Commencing with the Effective Date hereof and ending on the date that is
one (1) year following the later of (i) the date City issues a Release of Construction Covenants
pursuant to the PSDA for the final Project Component to be constructed on the Site (the
"Completion of Construction Date"), or (ii) the date City signs off on the last and final inspection
for the final Project Component to be constructed on the Site, Developer shall procure and
maintain, at its sole cost and expense, in a form and content reasonably satisfactory to the City
Manager, the following policies of insurance:
(A) A policy of commercial general liability insurance written on a per
occurrence basis in an amount not less than Five Million Dollars ($5,000,000.00) per occurrence
and Five Million Dollars ($5,000,000.00) in the aggregate.
(B) A policy of workers' compensation insurance in such amount as
will fully comply with the laws of the State of California against any loss, claim or damage
arising from any injuries or occupational diseases occurring to any worker employed by
Developer in the course of carrying out the work or services contemplated in this Agreement.
(C) A policy of commercial automobile liability insurance written on a
per occurrence basis in an amount not less than Three Million Dollars ($3,000,000.00). Said
policy shall include coverage for owned, non -owned, leased, and hired cars.
(D) "All Risks" Builder's Risk (course of construction) insurance
coverage on a replacement cost basis in an amount equal to the full cost of the hard construction
costs of the Project. Such insurance shall contain no coinsurance provision, and cover, at a
minimum: all work, materials, and equipment to be incorporated into the Project; the Project
during construction; the completed Project until such time as City issues the final certificate of
occupancy for the Project, and storage, transportation, and equipment breakdown risks. Such
insurance shall include coverage for earthquake (for the Luxury Hotel, Lifestyle Hotel, and
Conference and Shared Service Facility only), flood, ordinance or law, temporary offsite storage,
debris removal, pollutant cleanup and removal, preservation of property, landscaping, shrubs and
plants and full collapse during construction. Such insurance shall protect/insure the interests of
Developer/owner and all of Developer's contractor(s), and subcontractors, as each of their
interests may appear. If such insurance includes an exclusion for "design error," such exclusion
shall only be for the object or portion which failed. Notwithstanding the foregoing, such
insurance shall only be required for a particular Project Component at such time as construction
commences on such Project Component.
3.8.2 Commencing on the date City issues a Release of Construction Covenants
pursuant to the PSDA for a Project Component, Developer shall procure and maintain, at its sole
cost and expense, in a form and content satisfactory to City Manager, "All Risks" property
insurance on a replacement cost basis in an amount equal to full replacement cost of the Project
-14-
916799.3
Component, as the same may change from time to time. The above insurance policy or policies
shall contain no coinsurance provision.
3.8.3 The following additional requirements shall apply to all of the above
policies of insurance:
All of the above policies of insurance shall be primary insurance and, except the
Worker's Compensation and All Risks insurance, shall name City and City's officers, officials,
members, employees, agents, and representatives as additional insureds, using a pre-2004
additional insured endorsement (or equivalent). The insurer shall waive all rights of subrogation
and contribution it may have against City and City's officers, officials, members, employees,
agents, and representatives, and their respective insurers. All of said policies of insurance shall
provide that said insurance may not be materially amended or cancelled without providing thirty
(30) days' prior written notice to City. In the event any of said policies of insurance are
cancelled, Developer shall, prior to the cancellation date, submit new evidence of insurance in
conformance with this Section to the City Manager. Not later than the Effective Date of this
Agreement, Developer shall provide the City Manager with Certificates of Insurance or
appropriate insurance binders evidencing the above insurance coverages and said Certificates of
Insurance or binders shall be subject to the reasonable approval of the City Manager. Upon the
request of the City Manager, Developer shall provide City with complete copies of each policy
of insurance required by this Agreement.
The policies of insurance required by this Agreement shall be satisfactory only if issued
by companies (i) licensed and admitted to do business in California, rated "A" or better in the
most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and
only if they are of a financial category Class VII or better, or (ii) authorized to do business in
California, rated "A+" or better in the most recent edition of Best Rating Guide, The Key Rating
Guide, or in the Federal Registry and only if they are of a financial category Class XV.
Notwithstanding the foregoing, in the event that the policies required hereunder are not available
from such insurers at commercially reasonable rates, the City Manager shall have the authority,
in his or her sole and absolute discretion, to waive one or more of such requirements provided
the proposed policies will adequately protect City's interests hereunder.
City may reasonably require coverage increases, provided that the percentage increase in
coverage shall not be required to exceed the percentage increase in the Consumer Price Index
published by the United States Department of Labor, Bureau of Labor Statistics, for Urban Wage
Earners and Clerical Workers, Los Angeles -Riverside -Orange County Average, All Items (1984
= 100) (the "Index"), from and after the date of this Agreement, or, if said Index is discontinued,
such official index as may then be in existence and which is most nearly equivalent to said Index
(the "CPI Adjustment"). Unless otherwise approved in advance by the City Manager, the
insurance to be provided by Developer may provide for a deductible or self -insured retention of
not more than Fifty Thousand Dollars ($50,000); provided, however, that the deductible or self -
insured retention for the earthquake coverage may be up to, but not exceed, ten percent (10%) of
the replacement cost of the damaged Luxury Hotel, Lifestyle Hotel, and/or Conference and
Shared Service Facility (as applicable).
-15-
916799.3
Developer agrees that the provisions of this Section shall not be construed as limiting in
any way the extent to which Developer may be held responsible for the payment of damages to
any persons or property resulting from Developer's activities or the activities of any person or
persons for which Developer is otherwise responsible.
4. CITY' S OBLIGATIONS
4.1 Scope of Subsequent Review/Confirmation of Compliance Process.
Nothing set forth herein shall impair or interfere with the right of City to require the
processing of building permits as required by law pursuant to the applicable provisions of the La
Quinta Municipal Code and the provisions of City's Fire Codes and ordinances, Health and
Safety Codes and ordinances, and Building, Electrical, Mechanical, and similar building codes.
4.2 Project Approvals Independent.:
All approvals required for the Project which may be or have been granted, and all land
use entitlements or approvals generally which have been issued or will be issued by City with
respect to the Project, constitute independent actions and approvals by City. If any provision of
this Agreement or the application of any provision of this Agreement to a particular situation is
held by a court of competent jurisdiction to be invalid or unenforceable, or if this Agreement
terminates for any reason, then such invalidity, unenforceability or termination of this Agreement
or any part hereof shall not affect the validity or effectiveness of any such Project approvals or
other land use approvals and entitlements. In such cases, such approvals and entitlements will
remain in effect pursuant to their own terms, provisions, and the Conditions of Approval. It is
understood by the Parties that pursuant to existing law, if this Agreement terminates or is held
invalid or unenforceable as described above, such approvals and entitlements shall not remain
valid for the term of this Agreement, but shall remain valid for the term of such approvals and
entitlements.
4.3 Review for Compliance.
City shall review this Agreement at least once during every twelve (12) month period
following the Effective Date of this Agreement, in accordance with City's procedures and
standards for such review set forth in City's Development Agreement Ordinance. During such
periodic review by City, Developer, upon written request from City, shall be required to
demonstrate, and hereby agrees to furnish, evidence of good faith compliance with the terms
hereof. The failure of City to conduct or complete the annual review as provided herein or in
accordance with the Development Agreement Ordinance shall not impact the validity of this
Agreement. If, at the conclusion of the annual review provided for herein, Developer shall have
been found in compliance with this Agreement, City, through City's Community Development
Director, shall, at Developer's written request, issue a Certificate of Compliance to Developer
stating that (1) this Agreement remains in full force and effect and (2) Developer is in
compliance with this Agreement. The Certificate of Compliance shall be in recordable form, and
shall contain information necessary to communicate constructive record notice of the finding of
compliance. Developer, at its option and sole cost, may record the Certificate of Compliance.
-16-
916799.3
5. DEFAULT: REMEDIES: DISPUTE RESOLUTION.
5.1 Notice of Default.
In the event of failure by either Party substantially to perform any material term or
provision of this Agreement, the non -defaulting Party shall have those rights and remedies
provided herein, provided that such non -defaulting Party has first provided to the defaulting
Party a written notice of default in the manner required by Section 8.1 hereof identifying with
specificity the nature of the alleged default and the manner in which said default may
satisfactorily be cured.
5.2 Cure of Default. „.
Upon the receipt of the notice of default, the alleged defaulting Party shall promptly
commence to cure, correct, or remedy the identified default at the earliest reasonable time after
receipt of the notice of default and shall complete the cure, correction or remedy of such default
not later than thirty (30) days after receipt of the notice of default, or, for such defaults that
cannot reasonably be cured, corrected or remedied within thirty (30) days, such Party shall
commence to cure, correct, or remedy such default within such thirty (30) day period, shall and
continuously and diligently prosecu � h cure, correction or remedy to completion.
,. .
5.3 City Remedies.
In the event of an uncured default by Developer of the terms of this Agreement, City, at
its option, may institute legal action in law or in equity to cure, correct, or remedy such default,
enjoin any threatened or attempted violation, or enforce the terms of this Agreement; provided,
however, that in no event shall City be entitled to consequential damages for any Developer
default. For purposes of this Agreement the term "consequential damages" shall include, but not
be limited to, potential loss of anticipated tax revenues from the Project or any portion thereof.
Furthermore, City, in addition to or as an alternative to exercising the remedies set forth in this
Section 5.3, in the event of a material default by Developer, may give notice of its intent to
terminate or modify this Agreement pursuant to City's Development Agreement Ordinance
and/or the Development Agreement Act, in which event the matter shall be scheduled for
consideration and review by the City Council in the manner set forth in the City's Development
Agreement Ordinance or the Development Agreement Act.
6. MORTGAGEE PROTECTION; CERTAIN RIGHTS OF CURE
6.1 Encumbrances on the Proiect Site.
This Agreement shall not prevent or limit Developer from encumbering the Site or any
portion thereof or any improvements thereon with any mortgage, deed of trust, sale and
leaseback arrangement, or any other form of conveyance in which the Site, or a portion thereof
or interest therein, is pledged as security, and contracted for in good faith and fair value (a
"Mortgage") securing financing with respect to the construction, development, use or operation
of the Project.
-17-
916799.3
6.2 Mortgage Protection.
This Agreement shall be superior and senior to the lien of any Mortgage.
Notwithstanding the foregoing, no breach of this Agreement shall defeat, render invalid,
diminish, or impair the lien of any Mortgage made in good faith and for value, and any
acquisition or acceptance of title or any right or interest in or with respect to the Site or any
portion thereof by a holder of a beneficial interest under a Mortgage, or any successor or
assignee to said holder (a "Mortgagee") [whether pursuant to foreclosure, trustee's sale, deed in
lieu of foreclosure, lease termination or otherwise] shall be subject to all of the terms and
conditions of this Agreement.
6.3 Mortgagee Not Obligated."
No Mortgagee will have any obligation or duty under this Agreement to perform the
obligations of the Developer or other affirmative covenants of Developer hereunder, or to
guarantee such performance, except that (i) the Mortgagee shall have no right to develop or
operate the Site, and (ii) to the extent that any covenant to be performed by the Developer is a
condition to the performance of a covenant by the City, the performance thereof shall continue to
be a condition precedent to the City's performance hereunder.
6.4 Notice of Default to Mortgagee;ght of Mortgagee to Cure.
With respect to any mortgage or deed of trust granted by Developer, whenever City may
deliver any notice or demand to Developer with respect to any breach or default by Developer in
completion of construction of the Project or any component of the Project, City shall at the same
time deliver a copy of such notice or demand to each holder of record of any mortgage or deed of
trust which has previously requested such notice in writing. Each such holder shall (insofar as the
rights granted by City are concerned) have the right, at its option, within sixty (60) days after the
receipt of the notice, to cure or remedy or commence to cure or remedy and thereafter to pursue
with due diligence the cure or remedy of any such default and to add the cost thereof to the
mortgage debt and the lien of its mortgage. It is understood that a holder shall be deemed to have
satisfied the sixty (60) day time limit set forth above for commencing to cure or remedy a
Developer default which requires title and/or possession of the Site (or portion thereof) if and to
the extent any such holder has within such sixty (60) day period commenced proceedings to
obtain title and/or possession and thereafter the holder diligently pursues such proceedings to
completion and cures or remedies the default.
7. TRANSFERS OF INTEREST IN SITE OR AGREEMENT
7.1 Transfers of Interest in Site or Agreement.
The qualifications and identity of Developer as the developer and operator of high quality
commercial resort developments are of particular concern to City. Furthermore, the Parties
acknowledge that City has negotiated the terms of this Agreement in contemplation of the
development and operation of the Project on the Site and the mutual benefits to the Parties.
-18-
916799.3
7.2 Transfers of Interest in Site or Agreement Prior to City's Issuance of a Release of
Construction Covenants.
Except as provided in this Section 7.2, until the date City issues a Release of
Construction Covenants for a particular Project Component (the "Fee Transfer Release Date"),
as defined in the PSDA, (1) no voluntary successor in interest of Developer shall acquire any
rights or powers under this Agreement with respect to said Project Component; (2) Developer
shall not make any total or partial sale, transfer, conveyance, assignment, or lease of the whole or
any part of the Project Component or underlying real property; and (3) no changes shall occur
with respect to the ownership and/or control of Developer, including, without limitation, stock
transfers, sales of issuances, or transfers, sales or issuances of membership or ownership
interests, or statutory conversions (any of the above, a "Transfer"). Prior to the Fee Transfer
Release Date for a particular Project Component, City may approve or disapprove a proposed
Transfer in its sole and absolute discretion; provided, however, City agrees to reasonably
consider a Transfer to a transferee that has substantial experience in developing and operating
developments comparable in all material respects to the Project or Project Component (as
applicable), and the financial capability to develop and operate the Project or Project Component
(as applicable), as determined pursuant to the factors set forth in Section 311.1 of the PSDA.
Notwithstanding the foregoing, City approval of a Transfer prior to the Fee Transfer
Release Date for a particular Project Component shall not be required in connection with any of
the following:
(a) The conveyance or dedication of any portion of the Site to an appropriate
governmental agency, or the granting of easements or permits to facilitate construction of the
Project.
(b) Any assignment for financing purposes (subject to such financing being
permitted pursuant to Section 311 of the PSDA), including the grant of a deed of trust to secure
the funds necessary for land acquisition, construction and permanent financing of the Project or
of a Project Component.
(c) The Transfer to a lender who has provided financing to Developer (subject
to such financing being permitted pursuant to Section 311 of the PSDA) as a result of foreclosure
by such lender of the deed of trust securing funds necessary for land acquisition, construction,
and permanent financing of the Project or of a Project Component.
(d) The Transfer by Developer to an entity (i) whose managing member,
manager, or managing general partner is (A) Developer, or (B) an entity which is at least fifty-
one percent (51 %) owned and controlled by Developer, Meriwether, or RGC, and (ii) which
engages as the project/development manager for the Project Component an entity which is at
least fifty-one percent (51%) owned and controlled by Developer, Meriwether or RGC.
(e) The sale by Developer of individual for -sale residential dwelling units to
third party buyers.
-19-
916799.3
7.3 Assignment and Assumption of Obligations.
Except for the sale of individual for -sale residential dwelling units, any Transfer
(including Transfers not requiring prior City approval) by Developer of any interest in the Site or
of any interest in this Agreement shall require the execution of an assignment and assumption of
obligations substantially in the form attached hereto and incorporated herein as Exhibit "D" (an
"Assignment and Assumption Agreement"). Transfers of Developer's rights and/or obligations
under this Agreement made without an executed Assignment and Assumption Agreement are
null and void. The requirement for the provision to City of an executed Assignment and
Assumption Agreement shall apply regardless of whether City approval is required for the
Transfer. Developer agrees that (a) at least thirty (30) days prior to any Transfer it shall give
written notice to City of such proposed Transfer; and (b) within five (5) days after any Transfer it
shall provide City with a copy of the fully executed Assignment and Assumption Agreement
evidencing that the assignee has assumed in writing all applicable obligations under this
Agreement. A Party proposing to assign its obligations under this Agreement (i) shall remain
liable for the obligations until and unless City has received a fully executed Assignment and
Assumption Agreement, and (ii) shall remain liable for any default hereunder that occurred prior
to the effective date of the assignment. Developer or Developer's successor in interest shall
reimburse City for any costs (other than staff time) City incurs in reviewing any Assignment and
Assumption Agreement required hereunder.
7.4 Successors and Assigns.
All of the terms, covenants and conditions of this Agreement shall be binding upon
Developer and its permitted successors and assigns. Whenever the term "Developer" is used in
this Agreement, such term shall include any other permitted successors and assigns as herein
provided, and the term "Developer shall only mean the owner of a Project Component from time
to time during the period of such entity's ownership, provided that the procedures set forth in this
Agreement for that entity's acquisition and or disposition have been followed, including, without
limitation, the provisions of Section 7.1.
7.5 Assignment by City.
City may assign or transfer any of its rights or obligations under this Agreement with the
approval of Developer, which approval shall not be unreasonably withheld; provided, however,
that City may assign or transfer any of its interests hereunder to a joint powers authority in which
City is a member at any time without the consent of Developer.
8. MISCELLANEOUS
8.1 Notices, Demands and Communications Between the Parties.
Any approval, disapproval, demand, document or other notice ("Notice") which either
Party may desire to give to the other Party under this Agreement must be in writing and shall be
sufficiently given if (i) delivered by hand, (ii) delivered by reputable same -day or overnight
messenger service that provides a receipt showing date and time of delivery, or (iii) dispatched
by registered or certified mail, postage prepaid, return receipt requested, to the principal offices
-20-
916799.3
of City and Developer at the addresses specified below, or at any other address as that Party may
later designate by Notice.
To City: City of La Quinta
78-495 Calle Tampico
La Quinta, California 92253
Attn: Community Development Director
With a copy to: Rutan & Tucker, LLP
611 Anton Boulevard, Suite 1400
Costa Mesa, California 92626
Attn: William H. Ihrke
To Developer: Silverrock Development Company, LLC
With copies to:
"Toll
Any written notice, demand or communication shall be deemed received immediately if
personally delivered or delivered by delivery service, and shall be deemed received on the third
day from the date it is postmarked if delivered by registered or certified mail.
8.2 Force Majeure.
In addition to specific provisions of this Agreement, performance by either Party
hereunder shall not be deemed to be in default, and all performance and other dates specified in
this Agreement shall be extended, where delays or Defaults are due to causes beyond the control
or without the fault of the Party claiming an extension of time to perform, which may include the
following (each, a "Force Majeure"): war; insurrection; acts of terrorism; strikes; lockouts;
riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics;
quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or
priority; litigation; unusually severe weather; inability to secure necessary labor, materials or
tools; delays of any contractor, subcontractor or supplier; acts or omissions of the other Party; or
acts or failures to act of any public or governmental agency or entity (other than the acts or
failures to act of City which shall not excuse performance by City). Notwithstanding anything to
the contrary in this Agreement, an extension of time for any such cause shall only be for the
period of the enforced delay and shall commence to run from the time of the commencement of
the cause, if notice by the Party claiming such extension is sent to the other Party within thirty
(30) days of the commencement of the cause. Times of performance under this Agreement may
also be extended in writing by the mutual agreement of City and Developer.
8.3 Binding Effect.
-21-
916799.3
This Agreement, and all of the terms and conditions hereof, shall be binding upon and
inure to the benefit of the Parties, any subsequent owner of all or any portion of the Project or the
Site, and their respective assigns, heirs or successors in interest, whether or not any reference to
this Agreement is contained in the instrument by which such person acquired an interest in the
Project or the Site.
8.4 Independent Entity.
The Parties acknowledge that, in entering into and performing this Agreement, each of
Developer and City is acting as an independent entity and not as an agent of the other in any
respect.
8.5 Agreement Not to Benefit Third Parties. .
This Agreement is made for the sole benefit of the Parties, and no other person shall be
deemed to have any privity of contract under this Agreement nor any right to rely on this
Agreement to any extent for any purpose whatsoever, nor have any right of action of any kind on
this Agreement nor be deemed to be a third party beneficiary under this Agreement.
8.6 Covenants.
The provisions of this Agreement shall constitute mutual covenants which shall run with
the land comprising the Site for the benefit thereof, and for the benefit of City's adjoining
properties, and the burdens and benefits hereof shall bind and inure to the benefit of each of the
Parties hereto and all successors in interest to the Parties hereto for the term of this Agreement.
8.7 Non -liability of City Officers and Employees.
No official, officer, employee, agent or representative of City, acting in his/her official
capacity, shall be personally liable to Developer, or any successor or assign, for any loss, costs,
damage, claim, liability, or judgment, arising out of or connection to this Agreement, or for any
act or omission on the part of City.
8.8 Covenant Against Discrimination.
Developer and City covenant and agree, for themselves and their respective successors
and assigns, that there shall be no discrimination against, or segregation of, any person or group
or persons on account of race, color, creed, religion, sex, marital status, national origin or
ancestry, or any other impermissible classification, in the performance of this Agreement.
Developer shall comply with the Americans with Disabilities Act of 1990, as amended (42
U.S.C. §§ 12101, et seq.).
8.9 Amendment of Agreement.
This Agreement may be amended from time to time by mutual consent of the original
Parties or such party to which Developer assigns all or any portion of its interest in this
Agreement, in accordance with the provisions of the City's Development Agreement Ordinance
and Government Code Sections 65867 and 65868. Developer shall be required to reimburse City
-22-
916799.3
for all costs City incurs in negotiating, preparing, and processing any such alterations, changes,
or modifications requested by Developer or any lender or investor. In connection with any
request for an alteration, change or modification, Developer shall deposit with City the sum of
Ten Thousand Dollars ($10,000). Notwithstanding the foregoing, the City Manager shall have
the discretion to authorize a lesser deposit, in the event he or she determines the proposed
alteration, change or modification is minor. In the event the funds on deposit are depleted, City
shall notify Developer of the same, and Developer shall deposit with City an additional Five
Thousand Dollars ($5,000) to complete processing of the requested alteration, change or
modification. Developer shall make additional deposits to City, as needed, pursuant to the
foregoing process, until the requested alteration, change, or modification is finalized. Within
sixty (60) days after such alteration, change or modification is finalized, City shall reimburse the
Developer any unused sums
8.10 No Waiver. �
No waiver of any provision of this Agreement shall be effective unless in writing and
signed by a duly authorized representative of the Party against whom enforcement of a waiver is
sought and referring expressly to this Section. No delay or omission by either Parry in exercising
any right or power accruing upon non-compliance or failure to perform by the other Party under
any of the provisions of this Agreement shall impair any such right or power or be construed to
be a waiver thereof, except as expressly provided herein. No waiver by either Party of any of the
covenants or conditions to be performed by the other Party shall be construed or deemed a
waiver of any succeeding breach or nonperformance of the same or other covenants and
conditions hereof.
8.11 Severability.
If any term, provision, covenant or condition of this Agreement is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remaining provisions of this
Agreement shall continue in full force and effect, to the extent that the invalidity or
unenforceability does not impair the application of this Agreement as intended by the Parties.
8.12 Cooperation in Carrying Out Agreement.
Each Party shall take such actions and execute and deliver to the other all such further
instruments and documents as may be reasonably necessary to carry out this Agreement in order
to provide and secure to the other Party the full and complete enjoyment of its rights and
privileges hereunder.
8.13 Estoppel Certificate.
Either Party may, at any time, deliver written notice to any other Party requesting such
Party to certify in writing that, to the best knowledge of the certifying Parry, (i) this Agreement is
in full force and effect and a binding obligation of the Parties, (ii) this Agreement has not been
amended or modified either orally or in writing, or if so amended, identifying the amendments,
(iii) the requesting Party is not in default in the performance of its obligations under this
Agreement, or if in default, describing the nature and amount of any such defaults, and (iv) any
other reasonable information requested. A Party receiving a request hereunder shall execute and
-23-
916799.3
return such certificate within ten (10) days following approval of the proposed estoppel
certificate by the City Attorney, which approval shall not be unreasonably withheld or delayed.
The City Manager, Assistant City Manager, and Community Development Director are each
authorized to sign and deliver an estoppel certificate on behalf of City. City acknowledges that a
certificate hereunder may be relied upon by transferees and Mortgagees.
8.14 Construction.
The terms of this Agreement shall be construed in accordance with the meaning of the
language used and shall not be construed for or against either Party by reason of the authorship
of this Agreement or any other rule of construction that might otherwise apply. As used in this
Agreement, and as the context may require, the singular includes the plural and vice versa, and
the masculine gender includes the feminine and vice versa.
8.15 Recordation. 4:.4
This Agreement shall be recorded with the County Recorder of Riverside County at
Developer's cost, if any, within the period required by Government Code Section 65868.5.
Amendments approved by the Parties, and any cancellation or termination of this Agreement,
shall be similarly recorded.
8.16 Captions and References.
The captions of the paragraphs and subparagraphs of this Agreement are solely for
convenience of reference, and shall be disregarded in the construction and interpretation of this
Agreement. Reference herein to a paragraph or exhibit are the paragraphs, subparagraphs and
exhibits of this Agreement.
8.17 Time.
Time is of the essence in the performance of this Agreement and of each and every term
and condition hereof as to which time is an element.
8.18 Recitals & Exhibits Incorporated; Entire Agreement.
The Recitals to this Agreement and all of the exhibits and attachments to this Agreement
are, by this reference, incorporated into this Agreement and made a part hereof This
Agreement, including all Exhibits attached hereto, constitutes the entire agreement between the
Parties with respect to the subject matter of this Agreement, and this Agreement supersedes all
previous negotiations, discussions and agreements between the Parties, and no parole evidence of
any prior or other agreement shall be permitted to contradict or vary the terms hereof.
8.19 Exhibits.
Exhibits "A" -"D" to which reference is made in this Agreement are deemed appropriated
herein in their entirety. Said exhibits are identified as follows:
A Legal Description of Site
-24-
916799.3
B Site Map
C Mitigation Monitoring Program
D. Form of Assignment and Assumption Agreement
8.20 Counterpart Signature Pages.
For convenience the Parties may execute and acknowledge this agreement in counterparts
and when the separate signature pages are attached hereto, shall constitute one and the same
complete Agreement. -A&Iz,
8.21 Authority to Execute; Representations and Warranties.
Developer warrants and represents that (i) it is duly organized and existing, (ii) it is duly
authorized to execute and deliver this Agreement, (iii) by so executing this Agreement,
Developer is formally bound to the provisions of this Agreement, (iv) Developer's entering into
and performance of its obligations set forth in this Agreement do not violate any provision of any
other agreement to which Developer is bound, and (v) there is no existing or threatened litigation
or legal proceeding of which Developer is aware which could prevent Developer from entering
into or performing its obligations set forth in this Agreement.
8.22 City Approvals and Actions.
Whenever a reference is made in this Agreement to an action or approval to be
undertaken by the City Manager, his or her authorized designee is authorized to act on behalf of
the City unless specifically provided otherwise or the law otherwise requires.
8.23 Governing Law; Litigation Matters.
The internal laws of the State of California shall govern the interpretation and
enforcement of this Agreement without regard to conflicts of law principles. Any action at law
or in equity brought by either Party hereto for the purpose of enforcing, construing, or
interpreting the validity of this Agreement or any provision hereof shall be brought in the
Superior Court of the State of California in and for the County of Riverside, or such other
appropriate court in said county, and the Parties hereto waive all provisions of law providing for
the filing, removal, or change of venue to any other court. Service of process on City shall be
made in accordance with California law. Service of process on Developer shall be made in any
manner permitted by California law and shall be effective whether served inside or outside of
California. In the event of any action between the Parties hereto seeking enforcement of any of
the terms of this Agreement or otherwise arising out of this Agreement, the prevailing Party in
such litigation shall be awarded, in addition to such relief to which such Party is entitled, its
reasonable attorney's fees, expert witness fees, and litigation costs and expenses.
[end — signature page follows]
-25-
916799.3
IN WITNESS WHEREOF, Developer and City have executed this Agreement as of the
Reference Date.
"DEVELOPER"
, LLC,
a Delaware limited liability company
"CITY"
CITY OF LA QUINTA, a California municipal
corporation
By:
Name:
Title:
ATTEST:
William H. Ihrke
City Attorney
-26-
916799.3
State of California )
County of Riverside )
On , before me,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under th h of the State of California that
the foregoing paragraph is true and correct.,
WITNESS my hand and official seal.
Signature _pal)
State of California )
County of Riverside )
On , before me, ,
(insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument
the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature
(Seal)
-27-
916799.3
EXHIBIT "A"
LEGAL DESCRIPTION OF SITE
EXHIBIT "A"
916799.3
EXHIBIT `B"
SITE MAP
EXHIBIT `B"
916799.3
EXHIBIT "C"
MITIGATION MONITORING PROGRAM
EXHIBIT "C"
916799.3
EXHIBIT "D"
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
EXHIBIT "D"
916799.3