Loading...
2010/03/02 KB Home Coastal, Inc. Hidden Hills Project DEVELOPMENT AGREEMENT HIDDEN HILLS PROJECT This Development Agreement("Agreement") is entered into as of this 2nd day of March, 2010, by and between the CITY OF MENIFEE, a municipal corporation ("City") and KB HOME COASTAL INC., a California corporation ("Landowner"). City and Landowner are sometimes hereinafter collectively referred to as the"Parties"and singularly as"Party." RECITALS A. To strengthen the public planning process, encourage private participation in comprehensive planning, and reduce the economic risk of development, the Legislature of the State of California adopted Government Code Sections 65864, et seq. (the "Development Agreement Statute"), which authorizes the City and any person having a legal or equitable interest in real property to enter into a development agreement and, among other things, establish certain development rights in the property which is the subject of the development project application. The City has adopted Chapter 9.75 of the Municipal Code which governs the processing of Development Agreements within the City. B. Landowner holds a legal or equitable interest in certain real property comprised of approximately 166.2 gross acres and located in the City of Menifee, County of Riverside, State of California,more particularly described in Exhibit"A"attached hereto(the"Property"). C. The Landowner proposes to develop on the Property 511 lots for single-family houses, an improved park containing approximately 5.3 acres, 10 open space/regional trail/paseo lots, 3 storm drain flood control swale lots and accompanying infrastructure and other improvements (the"Project"). D. On October 26, 2004, the Board of Supervisors of Riverside County, California granted the following land use approvals(collectively,the"Project Approvals')for the Project: 1, Resolution No. 2004-408 which (a) certified Environmental Impact Report No. 445 (the "Project EIR") and (b) approved Tentative Tract Map No. 30142 for the development of the Project; and 2. Change of Zone No. 6670 amending the Zoning Map from "Residential Agriculture - R-A-1 (one acre minimum)" to "One Family Dwellings (R-1)," "Planned Residential (R-4)," and "Open Area Combining Zone-Residential Developments (R-5)" (collectively, the"Zone Change"). E. On June 16, 2009, the Menifee City Council (the "City Council") granted a one year extension for Tentative Tract Map No. 30142 so that, subject to (i) the Conditions of Approval that supersede all previous Conditions of Approval placed on Tentative Tract Map No. 30142 (the"Conditions of Approval")and (ii)the provisions of Section 6.4 below, Tentative Tract Map No. 30142 is valid through August 7, 2010. As used in this Agreement, the tern "TTM 30142" shall refer to Tentative Tract Map No. 30142, including the Conditions of Approval, as approved for the one year extension by the City Council on June 16,2009. 47407U799916v1S ] F. Landowner currently owns approximately 20.18 gross acres at the combined northeast and southeast corners of Evans Road and Craig Avenue (the "Civic Site"). The Civic Site is more particularly described in Exhibit "B"'attached hereto. City has expressed an interest in acquiring the Civic Site to develop as a recreational amenity for the City and the community. Therefore, in exchange for the "Development Impact Fee Credits" (as hereinafter defined), Landowner has agreed,in accordance with the provisions of Section 8 below,to convey and City has agreed to accept conveyance(the"Civic Site Conveyance")of fee title to the Civic Site. G. As used in this Agreement, the term "City's DIF" shall be defined to mean those development impact fees and exactions, including, without limitation, dedications and any other fee or tax (including excise, construction or any other tax) relating to development or the privilege of developing, which were in effect on a City-wide basis immediately prior to the effective date of Ordinance No. 2009-43, which Ordinance No. 2009-43 has the effect, among other things,of reducing, for a period of time,the City's DIF. As consideration for the Civic Site Conveyance, City has agreed that all lots within TTM 30142 shall (i) for the "Tetra" (as hereinafter defined) of this Agreement, receive credits for the payment of eighty percent (80°/a) of City's DIF,after deducting the"County Public Facilities Fee"(as hereinafter defined),and(ii) for a period of five (5) years from the "Effective Date" (as hereinafter defined), receive credits for one hundred percent(1001/o)of the payment of(a) any increases in any of the City's DIF and (b) any new City's DIF adopted by the City subsequent to the Effective Date. City hereby confirms that a complete list of City's DIF is reflected on Exhibit "C" attached hereto. In this Agreement, the term "County Public Facilities Fee" shall refer to the $1,207 "Public Facilities" fee set forth as Item "a." on Exhibit "C." The use of the term "County" in the definition of "County Public Facilities Fee" is based on the fact that such fee is, in fact, passed (by the City) through to the County of Riverside (the"County"). The credits described in this Recital G shall be referred to and defined in this Agreement as the"Development Impact Fee Credits." H. City and Landowner have agreed that, in today's real estate marketplace, the value of the Civic Site would be difficult to ascertain. However, Landowner and City have agreed that the value of the Civic Site is equal to, or greater than, the value of the Development Impact Fee Credits. I. The City Council has determined that the development of the Project will further the comprehensive planning objectives contained within City's current General Plan (as hereinafter defined) and will afford the City, its citizens and the surrounding region with the following benefits: 1. Fulfilling long-term economic and social goals for City and the community; 2. Providing fiscal benefits to City's general fund in terms of increased property tax revenues; 3. Providing both short-term construction employment and long-term permanent employment within City; 4. Financing and constructing significant infrastructure improvements that will serve the region and the community; 474071139981608 2 5. Providing recreational amenities for the community, including 11 acres of walking trails and paseos that will be open to the public; 6. Enabling the City to acquire the Civic Site on which the City intends to develop a recreational amenity that will benefit the City and the community; and 7. Providing housing that will help to satisfy City's obligation to meet City's share of regional housing needs. J. For the reasons recited herein, the City Council, on the advice of the Planning Commission, has determined that the Project is a development for which a development Agreement is appropriate under the Development Agreement Statute and Menifee Municipal Code Chapter 9.75 and that this Agreement is consistent with the General Plan. K. After reviewing the Project EIR in the context of the consideration and approval of this Agreement, the City Council has determined that none of the elements set forth in Public Resources Code Section 21166 or Section 15162 of the State California Environmental Quality Act ("CEQA") Guidelines ("CEQA Guidelines') exists and therefore has determined, in accordance with Public Resources Code Section 21166 and Section 15162 of the CEQA Guidelines, that no subsequent or supplemental Environmental Impact Report or Mitigated Negative Declaration is required to be prepared prior to adopting the Enacting Ordinance approving this Agreement. L. The Planning Commission of City held a duly noticed public hearing on this Agreement on February 9,2010, and recommended approval of this Agreement subject to the City Council's receipt of staffs due diligence analysis of the acquisition of the Civic Site, including any costs that could be incurred by.the City in connection with flood control and drainage improvements for the Civic Site. M. The City Council, after a duly noticed public hearing, and after consideration of staffs due diligence analysis adopted Ordinance No. 2010-71, approving this Agreement on March 2, 2010("Enacting Ordinance"), which Enacting Ordinance became effective on April 1, 2010(the "Effective Date'). NOW,THEREFORE, in consideration of the mutual promises, conditions and covenants hereinafter set forth,the Parties agree as follows: AGREEMENT 1. Incorporation of Recitals. The Preamble, the Recitals and all defined terms set forth in both are hereby incorporated into this Agreement as if hereinafter fully and completely rewritten. 2. Definitions. Each reference in this Agreement to any of the following terms shall have the meaning set forth below for each such term. Certain other terms shall have the meaning set forth for such term in this Agreement. 2.1 Adoption Date. March 2, 2010, the date the City Council adopted the Enacting Ordinance. 47407U399816v18 3 2.2 Annual Review Date. Defined in Section 24.1. 2.3 Agreement. Defined in the Introduction of this Agreement. 2A Approvals. All amendments to City Laws and any and all permits or approvals (including conditions of approval imposed in connection therewith) of any kind or character necessary or appropriate under the City Laws to confer the requisite lawful right on Landowner to develop the Project in accordance with this Agreement, including, but not limited to, the Project Approvals, subdivision maps, plot plans, minor administrative permits, sign permits, lot mergers, building permits, use permits, variances, demolition permits, site clearance, grading plans and permits, certificates of occupancy, municipal financing(including Mello-Roos bonds), abandonment of streets or rights-of-way,and right•of--way transfers. 2.5 CFD Facilities. Defined in Section 17. 2.6 CEQA. Defined in Recital K. 2.7 CEQA Guidelines. Defined in Recital K. 2.8 Certificate of Acceptance. Defined in Section 8.5. 2.9 City. Defined in the Introduction of this Agreement. 2.10 City Manager. The City Manager of the City or his or her designee,and shall be referred to as the"City Manager." 2.11 City Council. Defined in Recital E. 2.12 City's DIF. Defined in Recital G. 2.13 City Law(s). The ordinances, resolutions, codes, rules, regulations and official policies of City, governing the permitted uses of land, density, design, improvement and construction standards and specifications applicable to the development of the Property and property upon which required off-site public improvements will be constructed. Specifically,but without limiting the generality of the foregoing, City Laws shall include the City's General Plan, the City's zoning ordinance and the City's subdivision regulations. 2.14 Civic Site. Defined in Recital F. 2.15 Civic Site Conveyance. Defined in Recital F above. 2.16 Community Development Director. The "Community Development Director" shall mean the Community Development Director.. 2.17 Community Facilities District(`ICFD"). Defined in Section 17. 2.18 Complaining Party. Defined in Section 29. 2.19 Conditions of Approval. Defined in Recital E. 474pT139981608 4 _ 2.20 Consent. Defined in Section 45. 2.2I County. Defined in Recital G. 2.22 County Flood Control. Defined in Section 8.2. 2.23 County Public Facilities Fee. Defined in Recital G. 2.24 Default. Defined in Section 27. 2.25 Development Agreement Statute. Defined in Recital A. 2.26 Development Impact Fee Credits. Defined in Recital G. 2.27 Effective Date. Defined in Recital M. 2.28 Enacting Ordinance. Defined in Recital M. 2.29 Exactions. All exactions, costs, fees, in-hcu fees or payments, charges, assessments, dedications or other monetary or non-monetary requirements charged or imposed by City, or by City through an assessment district (or similar entity), in connection with the development of, construction on, or use of real property, including but not limited to transportation improvement fees, park fees, art fees, affordable housing fees, infrastructure fees, dedication or reservation requirements, facility fees, sewer fees, water connection fees, obligations for on- or off-site improvements or construction requirements for Public Improvements, or other conditions for approval called for in connection with the development of or construction of the Project, whether such exactions constitute Public Improvements, Mitigation Measures in connection with environmental review of the Project Approvals or other Approvals, or impositions made under applicable City Laws or in order to make an Approval consistent with applicable City Laws. Exactions shall not include Processing Fees or maintenance financing mechanisms resulting from a Landscaping and Lighting Maintenance District formed at Landowner's request. 2.30 Existing City Laws, The City Laws in effect as of the Adoption Date. 2.31 Existing Land Use Regulations. Collectively, the Existing Land Use Regulations shall mean (i) the City of Menifee General Plan, (ii) City Laws and Planning and Zoning Codes of the City's Municipal Code(including the Zone Change), and (iii) all other City Laws and ordinances, resolutions, regulations, and official policies governing land use development and building construction in the versions of these documents in effect in the City as of the Adoption Date of this Agreement. 2.32 Flood Control Easements. Defined in Section 8.2 2.33 General Plan. The General Plan for the City, which was adopted by the City Council upon incorporation as required by State law on October 1, 2008, as subsequently amended,and in effect as of the Adoption Date, 4740A1399916v18 5 2.34 Grant Deed. Defined in Section 8.2. 2.35 Landowner. Defined in the Introduction in this Agreement. 2.36 Law(s). The laws of the State of California,the Constitution of the United States and any codes,statutes or mandates in any court decision,state or federal, thereunder. 2.37 Minor Amendment. Defined in Section 26.4. 2.38 Mitigation Measures. The mitigation measures applicable to the Project developed as part of the Project EIR process and required to be implemented by Landowner,and adopted as part of the Project Approvals. 2.39 Mortgage. A.mortgage or deed of trust, or other transaction, in which the Property,or a portion thereof or an interest therein, or any improvements thereon, is conveyed or pledged as security, contracted in good faith and for fair value, or a sale and leaseback arrangement in which the Property, or a portion thereof or an interest therein, or improvements thereon, is sold and leased back concurrently therewith in good faith and for fair value. 2.40 Mortgagee. The holder of the beneficial interest under a Mortgage, or the owner of the Property, or interest therein, under a Mortgage. 2.41 Other Agencies. Defined in Section 17. 2.42 Party. City and Landowner, and their respective assignees or Transferees, determined as of the time in question,and collectively they shall be called the"Parties." 2.43 Party in Default. Defined in Section 29. 2.44 Permitted Delay. Defined in Section 37. 2.45 Person. An individual, partnership, limited liability company or partnership, firm, association, corporation, trust, governmental agency, administrative tribunal or other form of business or legal entity. 2.46 Plot Plan Review. Review including but not limited to site plan, architectural review, landscaping map review, front yard landscaping map, parking/landscaping plan, landscaping/irrigation, and other review of plans by City. 2.47 Processing Fee. A City-wide fee payable upon the submission of an application for a permit or approval, which covers only the estimated actual costs to City of processing that application,and which is not an Exaction. 2.48 Project. Defined in Recital C. 2.49 Project Approvals. Defined in Recital D, 2.50 Project EIR. Defined in Recital D.1. 4740T1399816v18 6 - 2.51 Property. Defined in Recital B. 2.52 Public Improvements. The lands and facilities, both on- and off-site, to be improved and constructed by Landowner, and publicly dedicated or made available for public use, as provided by the Project Approvals and this Agreement. Public Improvements consist of all right-of-way improvements, streets and roads within the Property; all utilities (such as gas, electricity, cable television, water, sewer and storm drainage): pedestrian and bicycle paths and trails; parks and open space; the off-site public improvements; and all other improvements and facilities required or called for by the Mitigation Measures and this Agreement to be implemented by Landowner. 2.53 Single Family Sale. Defined in Section 6.5. 2.54 Subsequent Approvals. Defined in Section 12.4. 2.55 Subsequent Rules. Defined in Section 12. 2.56 Substantive Amendments. Defined in Section 26.3. 2.57 Term. Defined in Section 6.2. 2.58 Termination. The expiration of the Term, whether by the passage of time or by any earlier occurrence pursuant to any provision, including an uncured Default, of this Agreement. For purposes hereof, "Termination" includes any grammatical variant thereof, including"Terminate,""Ferminated,"and"Terminating." 2.59 Title Company. Defined in Section 8.2. 2.60 Transfer. Defined in Section 20. 2.61 Transferee. Defined in Section 20. 2.62 Transferred Property. Defined in Section 20. 2.63 TTM 30142. Defined in Recital E. 2.64 Vested Rights. Defined in Section 7.1. 2.65 Zone Change. Defined in Recital D.2. 3. Provisions Required by Statute. California Government Code §§ 65865.1 and 65865.2 provide, among other things,that a development agreement shall specify the following: (a) Duration of the agreement. See Section 6.2 of this Agreement. (b) Permitted uses of the property. See Section 7.1 of this Agreement. (c) Density or intensity of such use. See Project Approvals. 4740711399816v18 7 _ (d) Maximum height and size of proposed buildings. See Project Approvals. (e) Reservation or dedication of land for public purposes. See Project Approvals. (f) Periodic Review at least annually to demonstrate good faith compliance with the development agreement. See Section 24 of this Agreement. 4. Landowner Representations and Warranties. The Landowner represents and wan-ants to the City, as follows: (a) Organization. The Landowner is a corporation duly organized, validly existing and in good standing under the laws of the State of California, with full right, power and authority to conduct its business as presently conducted and to execute, deliver and perform its obligations under this Agreement. (b) Authorization. The Landowner has taken all necessary action to authorize its execution, delivery and, subject to any conditions set forth in this Agreement, performance of this Agreement. Upon the date of this Agreement, this Agreement shall constitute a legal,valid and binding obligation of the Landowner,enforceable against it in accordance with its terms. (c) No Conflict. The execution, delivery and performance of this Agreement by the Landowner does not and will not materially conflict with, or constitute a material violation or material breach of, or constitute a default under(i) the charter or incorporation documents of the Landowner, (ii) any applicable law, rule or regulation binding upon or applicable to the Landowner,or(iii)any material agreements to which the Landowner is a party. (d) No Litigation. Unless otherwise disclosed in writing to the City prior to the date of this Agreement and except for threats of litigation expressed in public hearings relating to the Project Approvals and/or this Agreement, there is no existing or, to the Landowner's actual knowledge, pending or threatened litigation, suit, action or proceeding before any court or administrative agency affecting the Landowner or, to the best knowledge of the Landowner, the Property that would, if adversely determined, materially and adversely affect the Landowner or the Property or the Landowner's ability to perform its obligations under this Agreement or to develop and operate the Project. As used in this Agreement, the phrase "Landowner's actual knowledge" shall be defined to mean the actual knowledge of Michael H. Freeman, Jr., after reasonable investigation. (e) Licenses, Permits, Consents and Approvals. Landowner and/or any person or entity owning or operating the Property has duly obtained and maintained, or will duly obtain and maintain, and will continue to obtain and maintain, all licenses, permits, consents and approvals required by all applicable governmental authorities to develop, sell, lease, own and operate the Project on the Property. 5. Relationship of City and Landowner. The Parties specifically acknowledge that the Project is a private development, that neither Party is acting as the agent of the other in any respect hereunder, and that each Party is an independent contracting entity with respect to the terms,covenants and conditions contained in this Agreement. None of the terms or provisions of this Agreement shall be deemed to create a partnership between or among the Parties in the 47407099816AS 8 - businesses of Landowner, the affairs of City, or otherwise, nor shall it cause them to be considered joint venturers or members of any joint enterprise. The City and Landowner hereby renounce the existence of any form of joint venture or partnership between them, and agree that nothing contained herein or in any document executed in connection herewith shall be construed as making the City and Landowner joint venturers or partners. 6. Execution,Recording and Term. 6.1 Execution and Recording. Not later than ten(10)days after the Adoption Date, City and Landowner shall execute and acknowledge this Agreement. Not later than 40 days after the Adoption Date, the City Clerk shall cause this Agreement to be recorded in the Official Records of the County of Riverside,State of California,provided that a referendum applicable to the Enacting Ordinance has not been timely submitted to the City. 6.2, Term. The term of this Agreement shall commence on the Effective Date and extend for a period of ten (10) years ("Term'), unless the Term is terminated, modified or extended by the terms of this Agreement. 6.3 Extension of Term Due to Litigation. In the event that litigation is filed by a third party(defined to exclude City and Landowner or any assignee or Transferee of Landowner) which seeks to invalidate this Agreement or any of the Project Approvals, the Term shall be extended for a period equal to the length of time from the time a summons and complaint and/or petition are served on the defendant(s)/respondent(s)until the resolution of the matter is final and not subject to appeal.; provided, however, that the total amount of time for which the term shall be extended as a result of any and all litigation shall not exceed two(2)years. 6.4 Extension of Approvals or Project Approval. Upon the granting of any Approval or Project Approval, including but not limited to any tentative tract map, the TTM 30142 (as heretofore approved), and any Plot Plan Review, both prior and subsequent to the Effective Date, the tern of such Approval and/or Project Approval shall be extended automatically through the Term notwithstanding any other City Law. 6.5 Automatic Termination Upon Completion and Sale of Residential Lot. This Agreement shall automatically be terminated, without any further action by either party or need to record any additional document, with respect to any single-family residential lot comprising a portion of the Property, upon completion of construction and issuance by the City of a final certificate of occupancy permit for a dwelling unit upon such residential lot, and conveyance and occupancy of such improved residential lot to a bona-fide good-faith purchaser (e.g., individual homeowner or end-user) ("Single Family Sale'. In connection with its issuance of a final inspection for such improved lot, City shall confirm that all improvements,which are required to serve the lot,as determined by City, have been accepted by City. Termination of this Agreement for any such residential lot as provided for in this Section shall not in any way be construed to terminate or modify any tax, assessment, or affordable housing restriction or covenant affecting such lot at the time of termination. 6.6 Rights and Obligations Upon Expiration of the Term. Following Termination of this Agreement all of the rights,duties and obligations of the Parties hereunder shall terminate 474ON 399 I M S 9 and be of no further force and effect. Upon Termination of this Agreement, Landowner shall thereafter comply with the provisions of all City Laws then in effect or subsequently adopted with respect to the Property and/or the Project, except that any Termination shall not affect any right vested (absent this Agreement), or other rights arising from Approvals and/or Project Approvals granted by City for development of all or any portion of the Project, including,but not limited to any approved Plot Plan Review, valid building permit, or certificate of occupancy. Termination of this Agreement shall not affect the validity of any building or improvement within the Property which is completed as of the date of Termination, provided that such building or improvement has been constructed pursuant to a valid building permit issued by the City. Furthermore, no Termination shall prevent Landowner from completing and occupying any building or other improvement authorized pursuant to an approved Plot Plan Review, valid building permit previously issued by the City or certificate of occupancy provided that any such building or improvement is completed in accordance with said building permit in effect at the time of such termination. 7. Vested Rights. 7.1 Permitted Uses/Vested Rights. Except as set forth in Sections 7.2, 7.3 and 12 (including all subsections therein) below, during the Term, the permitted uses of the Property, the density and intensity of use, the rate, timing and sequencing of development .the maximum height and design and size of proposed buildings, the parking standards, and provisions for reservation and dedication of land, shall be those set forth in this Agreement, the Project Approvals, and the City Laws in force and effect on the Adoption Date of this Agreement (the "Vested Rights"). 7.2 Fees and Exactions. As consideration for the Civic Site Conveyance, City hereby agrees that all lots within TTM 30142 shall be entitled to and shall receive the Development Impact Fee Credits. Protection from any increases in arty of the City's DIF shall not include increases mandated by the County, the State of California,the federal government or . any other entity that is outside the control of the City. This Section shall not be construed to limit the authority of City to charge Processing Fees. 7.3 Uniform Codes Applicable. The Project shall be constructed in accordance with the provisions of the International Building, Mechanical, Plumbing, Electrical and Fire Codes and Title 24 of the California Code of Regulations, relating to building standards, in effect at the time of approval of the appropriate building, grading, encroachment or other construction permits for the Project. 7.4 Subdivision Maps - Compliance with California Government Code Section 66473.7. Any subdivision map prepared for the Property, or any portion of the Property, including, without limitation, TTM 30142, shall comply with the provisions of California Government Code Section 66473.7. 8. Civic Site Conveyance. Subject to the following terms and conditions, Landowner shall convey the Civic Site to City: 4740A139991608 10 - I. It shall be a condition to the transfer of the Civic Site to the City that (a) the CEQA statute of limitation under which City's approval of this Agreement might be challenged shall have expired without a challenge having been filed or, if a challenge has been filed,that any such challenge has been finally resolved to the satisfaction of Landowner and (b) no referendum petition challenging this Agreement has qualified to be placed on the ballot. 2_ Title to the Civic Site shall be subject to the exceptions set forth in the Preliminary Title Report which has been provided to the City dated January 15, 2010 issued by First American Title Insurance Company(the"Title Company") and any exceptions approved or caused by the City or that would have been disclosed by an inspection or survey of the Civic Site. Notwithstanding the foregoing, Landowner's conveyance of the Civic Site shall be free of any monetary liens other than liens for non-delinquent general, special and supplemental taxes (including, without limitation, any community facilities district assessments), bonds and assessments, which shall be prorated upon the recording of the "Grant Deed" (as hereinafter defined). In addition, the Civic Site Conveyance shall be subject to Landowner's reservation of easements to permit Landowner (a) to construct flood control, drainage and associated improvements within the Civic Site as shown on approved final improvement plans(the "Flood Control Easements"), (b) to carry out any other construction or development related activities as shall be reasonably necessary for Landowner to develop the Project including,without limitation, a temporary grading and construction easement over the southerly area of the Civic Site(located south of Craig Avenue) to facilitate Landowner's grading of the Project and a temporary grading and construction easement for the earthen flood control dikes bordering the natural flood control channel (located north of Craig Avenue). Landowner's conveyance and City's acceptance of title to the Civic Site shall be by a Grant Deed in a form acceptable to the City (the "Grant Deed"). City hereby acknowledges that the area of the Civic Site reserved for the Flood Control Easements will ultimately be conveyed in fee to the Riverside County Flood Control and Water Conservation District ("County Flood Control.") In that connection, City hereby agrees to cooperate and to execute any and all documents, including, without limitation, a parcel map (to be processed by Landowner on behalf of the City at Landowner's sole cost),necessary to effect a transfer of the area covered by the Flood Control Easements to County Flood Control. 3. City shall accept conveyance of the Civic Site "AS IS, WHERE IS" and "WITH ALL FAULTS, LIABILITIES, AND DEFECTS, LATENT OR OTHERWISE, KNOWN OR UNKNOWN." City's acceptance of title to the'Civic Site shall constitute City's acknowledgement that City has relied solely on its own inspection, investigation and analyses of the Civic Site. The provisions of this Section 8.3 shall survive the transfer of the Civic Site to City and any termination of this Agreement. 4. . City shall adopt a Resolution in accordance with the provisions of Government Code Section 27281 authorizing the City's acceptance of title to the Civic Site. 5. Landowner and City shall each sign and deliver (to each other and/or to third parties) all additional papers, documents and other assurances and shall do all acts and things reasonably necessary in connection with the performance of each of their obligations hereunder to carry out the intent of the Civic Site Conveyance. 47407t1399816v18 l] When Landowner determines that each of the conditions set forth in this Section 8 has been satisfied, Landowner shall sign and submit the Grant Deed to City and City shall sign the certificate of acceptance on the Grant Deed(the"Certificate of Acceptance")within five(5) days following City's receipt of the Grant Deed and famish a copy of the fully executed Grant Deed to Landowner. City hereby confirms and agrees that City will, subject to the provisions of Sections 8.2 and 8.4 above, accept title to the Civic Site and hereby authorizes and directs the City Manager to execute the Grant Deed on behalf of the City. 9. Model Homes. Prior to recordation of any final map and prior to Landowner's being required to complete any public and/or private infrastructure improvements and/or facilities,City shall, at Landowner's request, issue building permits for the construction of model homes (and related model home complex structures) that will be used by Landowner for the purpose of promoting sales of single-family residential units within the Project; provided, however, in no event shall City be required to issue more than six (6) building permits for the construction of model homes. 10. Eminent Domain. City shall cooperate with Landowner in implementing all of the conditions of the Project Approvals, including, but not limited to, the exercise.of its eminent domain powers in connection therewith provided that City, in its independent exercise of judgment following all applicable procedures,has made the requisite findings property supported by evidence that the use of such power is appropriate. 11.. Additional Staffing. If standard City staffing fails to result in processing of ministerial permits and/or approvals or discretionary actions and/or approvals as promptly as required by Landowner, the City shall, at the request and sole expense of the Landowner, hire plan check, inspection and other personnel, or hire additional consultants for such actions, or allocate use of exclusively dedicated staff time, such that the time limits of Landowner can be achieved. City shall consult in good faith with Landowner as to any additional consultants to be hired pursuant to this Section provided that City shall retain the sole discretion as to selection and direction of any such consultants. 12. Subseauent Rules and Approvals. Except as set forth in Sections 7.2 and 7.3 above and 12.1 through and including 12.3 and 17 below, during the Term, City shall not apply any City Laws enacted after the Adoption Date ("Subsequent Rule') that would conflict with or impede the Vested Rights of Landowner set forth in Section 7.1 above or otherwise conflict with this Agreement or the Existing City Laws or Existing Land Use Regulations, without Landowner's written consent,which consent shall be in Landowner's sole discretion. 12.1 Conflicting Laws. For purposes of illustrating, but in no way limiting the provisions of Section 12 above, any action or proceeding of the City (whether enacted by the legislative body or the electorate) undertaken without the consent of Landowner, that has any of the following effects on the Project shall be considered in conflict with the Vested Rights, this Agreement and the Existing City Laws and/or Existing Land Use Regulations: (a) limiting, reducing or modifying the density or intensity of all or any part of the Project, or otherwise requiring any reduction in the square footage or total number of buildings, residential units or other improvements; 4740711399816A 8 12 (b) limiting the phasing or increasing the timing for completion of the Project in any manner inconsistent with this Agreement;or (c) limiting the location of sites, grading, or other improvements on the Property in a manner that is inconsistent with or more restrictive than the limitations included in this Agreement or the Project Approvals. 12.2 Changes in State or Federal Law. This Agreement shall not preclude the application to development of the Property of Subsequent Rules mandated and required by changes in state or federal laws or regulations. 12.3 Quotas, Restrictions or Other Growth Limitations. Landowner and City intend that,except as otherwise provided in this Agreement,this Agreement shall vest the Project Approvals against subsequent City Laws that directly or indirectly limit the rate, timing, sequencing of development, or prevent or conflict with the permitted uses,density and intensity of uses as set forth in the Project Approvals. ' 12.4 Subsequent Approvals. The development of the Project is subject to future approvals and actions by the City that have not been reviewed or approved by the City prior to the Adoption Date of this Agreement. These future approvals include discretionary and ministerial actions by the City (collectively referred to as "Subsequent Approvals") include, but are not limited to, the Plot Plan Review process, final parcel and subdivision maps, additional tentative subdivision maps, special permits, variances, demolition permits, plan review, design review, grading permits and building permits. In reviewing and acting on applications for Subsequent Approvals, the City shall apply the Project Approvals and the Existing Land Use Regulations when considering the application and may attach such conditions as necessary to comply with the Project Approvals and Existing Land Use Regulations and as permitted in Sections 7.1 through 7.4 and these Sections 12, 12.1, 12.2 and 12.4. In connection with the foregoing, City and Landowner hereby agree that City's Minor Plot Plan Review process constitutes a ministerial action by the Community Development Director. 12.5 Subsequent Environmental Review. The provisions of CEQA, as they may be amended from time to time, shall apply to any Subsequent Approval for the Project. The Parties acknowledge, however, that the Project E1R contains a thorough analysis of the Project and Project alternatives and specifies the feasible Mitigation Measures necessary to eliminate or reduce to an acceptable level adverse environmental impacts of the Project, and acknowledge that the County Board of Supervisors issued a statement of overriding considerations in connection with the Project Approvals, pursuant to CEQA Guidelines Section 15093 for those significant impacts which could not be mitigated. For these reasons, no further review or mitigation under CEQA shall be required by City for any Subsequent Approval unless the standards for further environmental review under CEQA are met as a result of a change in circumstances as specified in California Public Resources Code Section 21166. 13. Other Governmental Permits. Landowner shall apply for such other permits and approvals as may be required from other governmental or quasi-governmental agencies having jurisdiction over the Project for the development of, or provision of services to, the Project. City shall reasonably cooperate with Landowner in its endeavors to obtain such permits and approvals 4740711399816v18 13 and, from time to time at the request of Landowner, shall attempt with due diligence and in good faith to enter into binding agreements with any such entity in order to assure the availability of such permits and approvals or services. To the extent allowed by Law, Landowner shall be a party or third party beneficiary to any such agreement entitled to enforce the rights of Landowner or City thereunder or the duties and obligations of the Parties thereto. 14. Easements; Improvements: Abandonments. City shall reasonably cooperate with Landowner in connection with any arrangements for abandoning existing utility or other easements and facilities and the relocation thereof or creation of any new easements within the Property necessary or appropriate in connection with the development of the Project; and if any such easement is owned by City or an agency of City, City or such agency shall, at the request of Landowner, take such action and execute such documents as may be reasonably necessary to abandon existing easements and relocate them, as necessary or appropriate in connection with the approved development of the Project. 15. Design of On-Site and Off-Site Improvements. Subject to the provisions of Section 12.4 above, development of the Property shall be subject to the Minor Plot Plan Review process and other future City review as provided by the Project Approvals. The Project Approvals, and all improvement plans prepared in accordance with the Project Approvals, shall govern the design and scope of all on-site and off-site improvements to be constructed on or benefiting the Property, including all street widths and dedications. 16. Subdivision of Property - Future Tentative Maps. Landowner shall have the right, from time to time or at any time, to apply for one or more individual maps, subdividing the Property into smaller developable parcels, as may be necessary in order to develop, lease or finance any portion of the Property in connection with development of the Project consistent . with the Project Approvals. All final individual maps may be approved on a phased basis. As the Property is developed, subsequent individual maps further parcelizing the Property or individual buildings may be submitted to the City for approval. 17. Community Facilities District for Public Improvements and Maintenance. At the request of Landowner, City will (a) adopt financing policies and (b)thereafter initiate proceedings for the formation of a Community Facilities District pursuant to Government Code Section 53311 et seq. (the "Community Facilities District" or "CFD') for the purposes of financing certain of the Public Improvements (the "CFD Facilities") and the Exactions that are required to be provided or paid, as the case may be, by the Landowner in order to pay for all or any portion of the costs of any real or other tangible property or service that is eligible by law or regulations to be financed by a community facilities district, whether such requirement is imposed pursuant to the provisions hereof or as conditions precedent to the development of the Property by entities including the following: the Menifee Union School District, Perris Union High School District, Eastern Municipal Water District and investor owned utility companies including.Southern California Gas Company, Southern California Edison, AT&T and Time Warner (collectively, the "Other Agcncies'� and the expenses incidental thereto; and (b) cooperate with the Landowner in forming the CFD and authorizing the levy of appropriate special taxes in accordance with this Section 17. In connection therewith, the City will meet and confer in good faith with Landowner concerning the selection of bond counsel, underwriter, appraiser and other advisers and consultants to be retained by the City, although City retains the 47407\09981608 14 sole discretion in the hiring of all such advisers and consultants. City will use its best efforts to enter into such agreements with the Other Agencies as may be necessary to permit the CFD to finance the respective CFD Facilities to be owned and operated by them, the development fees and any fire service costs. Notwithstanding the foregoing, nothing contained in this Section 17 shall require City to expend any of its own funds in forming the CFD and other responsibilities with respect to the CFD unless the Landowner has agreed to reimburse the City for its expenditures. The boundaries of the area of the Community Facilities District shall be contiguous with the boundaries of the Property. The Community Facilities District tax shall remain in effect until any bonds issued on behalf of the Community Facilities District have been paid; provided, however, that the Community Facilities District may remain in effect in perpetuity for purposes of paying any law enforcement and/or fire service and/or parks maintenance costs. A vote by Landowner against the Ievying of the special tax otherwise complying with this Agreement, or a vote to repeal or amend the special tax inconsistent with this Agreement,shall constitute a Default under this Agreement. 18. Phasing. The Parties acknowledge that presently Landowner cannot predict the exact timing or sequence of the phasing of the Project. Landowner therefore shall have the right to develop the Project in phases in such order and at such times as Landowner deems appropriate ' within the exercise of its subjective business judgment and the provisions of this Agreement. 19. Moratorium. No City imposed moratorium or other limitation (whether relating to the rate, timing or sequencing of the development or construction of all or any part of the Property, whether imposed by ordinance, initiative, resolution, policy, order or otherwise, and whether enacted by the City Council, an agency of City, the electorate, or otherwise) affecting parcel or subdivision maps (whether tentative, vesting tentative or final), building permits, occupancy certificates or other entitlements to use or service (including, without limitation, water and sewer) approved, issued or granted within City,or portions of City, shall apply to the Property to the extent such moratorium or other limitation is in conflict with this Agreement; provided, however,the provisions of this Section shall not affect City's compliance with moratoria or other limitations mandated by other governmental agencies or court imposed moratoria or other limitations. 20. Transfers and Assignments. Subject to the terms of this Section 20, Landowner shall have the right to assign or transfer all or any portion of its interest, rights or obligations under this Agreement to third Persons (the "Transferee") acquiring an interest or estate in all or a portion of the Property (the "Transferred Property"), including, but not limited to, purchasers or long term ground lessees of individual lots,parcels, or of any of the buildings located within the Property. Any sale, transfer or conveyance of the Property, or portion thereof,shall comply with the state Subdivision Map Act and City Subdivision Ordinance. Except for Single Family Sales, Landowner shall provide thirty(30) days written notice to City prior to the effective date of any sale, transfer or assignment (collectively, "Transfer") of its interest in all or any portion of the Property or any of its interests, rights and obligations under this Agreement, and upon giving of such notice, Transferee shall be deemed a Party with respect to the portion of the Property so transferred. Landowner shall remain fully liable for all obligations and requirements under this Agreement after the effective date of the Transfer unless Landowner satisfies the following conditions: (1)prior to the effective date of the Transfer, Transferee executes and delivers to 47407V399816v18 1$ City an Assignment and Assumption Agreement, in a form acceptable to the City specifying the obligations and requirements to be assumed by the Transferee; (2) Landowner has not received a notice of a Default under this Agreement that remains uncured as of the effective date of the Transfer; and (3) if Transferee is to assume any of the obligations or requirements to construct Public Improvements, then prior written consent of the City shall be required, which consent shall not be unreasonably withheld. Notwithstanding the foregoing, if Transferee is to assume only the lot-specific obligations, conditions or requirements that are related to the development of the Transferred Property (i.e. the Mitigation Measures or Plot Plan Review conditions of approval, but not any obligation to construct Public Improvements), then no consent shall be required. If conditions (1) and (2) are satisfied and any City consent(to the extent City consent is required herein) is given, then Landowner shall be released from any further liability or obligation under this Agreement related to the Transferred Property as specified in the Assignment and Assumption Agreement, and the Transferee shall be deemed to be the , "Landowner"under this Agreement with all rights and obligations related thereto,with respect to such Transferred Property. Notwithstanding anything to the contrary contained in this Agreement, if a Transferee Defaults under this Agreement, such Default shall not constitute a Default by Landowner with respect to any other portion of the Property hereunder and shall not entitle City to declare a Default, Terminate or modify this Agreement with respect to such other portion of the Property. In addition to the foregoing, Transfers shall be subject to the provisions of Sections 24.7 and 29.5 below. Any amendment to this Agreement between City and a Transferee shall only affect the portion of the Property owned by such Transferee. 21. Applicable Rule/Project Approval/Development Agreement Inconsistency. In the event of any inconsistency between any Existing City Law, Existing Land Use Regulation, Project Approval and this Agreement,the provisions of this Agreement shall control 22. Lender Obligations and Protections. 22.1 Encumbrances on the Property. The Parties hereto agree that this Agreement shall not prevent or limit Landowner, in any manner, from encumbering the Property or any portion thereof or any improvements thereon with any Mortgage securing financing with respect to the construction,development,use, or operation of the Property. 22.2 Mortgagee Obligations. A Mortgagee not in legal possession of the Property or any portion thereof shall not be subject to the obligations or liabilities of the Landowner under this Agreement, including the obligation to construct or complete construction of improvements or pay fees. A Mortgagee in legal possession shall not have any obligation or duty under this Agreement to construct or complete the construction of improvements, or to pay, perform or provide any fee, dedication, improvements or other exaction or imposition. A Mortgagee in legal possession of the Property or portion thereof shall only be entitled to use of the Property or to construct any improvements on the Property in accordance with the Project Approvals and this Agreement if Mortgagee fully complies with the terms of this Agreement. 22.3 Mortgagee Protection. This Agreement shall be superior and senior to any lien placed upon the Property, or any portion thereof after the date of recording this Agreement, including the lien for any deed of trust or Mortgage. Notwithstanding the foregoing, no breach of this Agreement shall defeat,render invalid,diminish or impair the lien of any Mortgage made 47407%1399816v18 16 in good faith and for value,but all the terms and conditions contained in this Agreement shall be binding upon and effective against any person or entity, including any deed of trust beneficiary or Mortgagee that acquires title to the Property, or any portion thereof, by foreclosure, trustee's sale, deed in lieu of foreclosure,or otherwise, and any such Mortgagee or successor to a Lender that takes title to the Property or any portion thereof shall be entitled to the benefits arising under this Agreement. 22.4 Notice of Default to Mortgagee, Right of Lender to Cure. If City receives notice from a Mortgagee requesting a copy of any notice of Default given Landowner under this Agreement and specifying the address for service thereof, then City shall deliver to such Mortgagee, concurrently with service thereon to Landowner, any notice given to Landowner with respect to any claim by City that Landowner is in Default and/or any Certificate of Non- Compliance. Each Mortgagee shall have the right during the same period available to Landowner to cure or remedy,or to commence to cure or remedy,the Default or non-compliance as provided in this Agreement; provided, however; that if the Default, noncompliance or Certificate of Non-Compliance is of a nature which can only be remedied or cured by such Mortgagee upon obtaining possession, such Mortgagee may seek to obtain. possession with diligence and continuity through a receiver or otherwise, and shall thereafter remedy or cure the Default, noncompliance or Certificate of Non-Compliance within ninety (90) days after obtaining possession. If any such Default, noncompliance or Certificate of Non-Compliance cannot, with diligence, be remedied or cured within such ninety (90) day period, then such Mortgagee shall have such additional time as may be reasonably necessary to remedy or cure such Default, noncompliance or Certificate of Non-Compliance (including but not limited to proceeding to gain possession of the Property) if such Mortgagee commences cure during such ninety (90) day period, and thereafter diligently pursues completion of such cure to the extent possible. 23. Estounel Certificate. Either Party may, at any time, and from time to time, deliver written notice to the other Party requesting such Party to certify in writing that, to the knowledge of the certifying Party,'(a) this Agreement is in full force and effect and a binding obligation of the Parties,(b)this Agreement has not been amended or modified either orally or in writing,or if so amended, identifying the amendments, (c) the requesting Party is not in Default in the performance of its obligations under this Agreement, or if in Default, to describe therein the nature and amount of any such Defaults; and (d) such other information as may reasonably be requested. A Party receiving a request hereunder shall execute and return such certificate within thirty(30) days following the receipt thereof. The City Manager shall have the right to execute any certificate requested by Landowner hereunder. City acknowledges that a certificate hereunder may be relied upon by Transferees,lenders and Mortgagees. 24. Annual Review. 24.1 Review Date. The annual review date for this Agreement shall occur each year on the anniversary date of the Effective Date of this Agreement("Annual Review Date"). 24.2 Required Information from Landowner. Not more than sixty(60)days and not less than forty-five (45) days prior to the Annual Review Date, the Landowner shall provide a letter to the Community Development Director containing evidence to show compliance with 47407W99816v18 17 this Agreement. The burden of proof, by substantial evidence, of compliance is upon the Landowner. 24.3 City Report. Within forty (40) days after Landowner submits its letter, the Community Development Director shall review the information submitted by Landowner and all other available evidence of Landowner's compliance with this Agreement. All such available evidence including public comments and final staff reports shall, upon receipt of the City, be made available as soon as possible to Landowner. The Community Development Director shall notify the Landowner in writing whether the Landowner has complied with the terms of this Agreement. If Community Development Director finds the Landowner in compliance, the Community Development Director shall issue a Certificate of Compliance. If Community Development Director finds the Landowner is not in compliance, the Community Development Director shall issue a Certificate of Non-Compliance after complying with the procedures set forth in Section 24.4. The City's failure to timely complete the annual review is not deemed to be a waiver of the right to do so at a later date; nor shall City's failure to perform an annual review constitute or be asserted as a"Default"(as hereinafter defined)by Landowner. 24A Non-compliance with Agreement; Rearing. Prior to issuing a Certificate of Non-Compliance,if the Community Development Director,on the basis of substantial evidence, finds that the Landowner has not complied with the terms of this Agreement,he/she shall specify in writing to Landowner,with reasonable specificity, the respects in which Landowner has failed to comply. The Community Development Director shall also specify a reasonable time for Landowner to meet the terms of compliance, which time shall be not less than thirty(30) days, and shall be reasonably related to the time necessary for Landowner to adequately bring its performance into compliance with the terms of this Agreement, subject to any Permitted Delay; provided, however, that if the noncompliance solely involves a monetary Default, then the Community Development Director may require payment in ten (10)days. If after the reasonable time for Landowner to meet the terms of compliance has passed and the Community Development Director,on the basis of substantial evidence,continues to find that the Landowner has not complied, then Community Development Director shall issue a Certificate of Non- Compliance. Any Certificate of Non-Compliance shall be made in writing with reasonable specificity as to the reasons for the determination,and a copy shall be provided to Landowner in the manner prescribed in Section 42. If the Community Development Director issues a Certificate of Non-Compliance, then the City Council shall conduct a hearing within thirty(30) days of the Community Development Director's issuance of the Certificate of Non-Compliance. The Landowner shall be given ten (10) days written notice of the hearing and copies of the evidence upon which the Community Development Director made her/his determination. Landowner will be given the opportunity to present evidence at the hearing. If the City Council determines that the Landowner is not in compliance with this Agreement, it may initiate proceedings to modify or Terminate this Agreement, at which time an administrative hearing shall be conducted. 24.5 Appeal of Determination. The decision of the City Council as to Landowner's compliance shall be final, and any Court action or proceeding to attack, review,set.aside, void or annul any decision of the determination by the City Council shall be commenced within ninety (90)days of the final decision by the City Council. 4740711399816A8 - 18 24.6 Costs. Costs reasonably incurred by the City in connection with the annual review and related hearings shall be paid by Landowner in accordance with the City's schedule of fees and billing rates for staff time in effect at the time of review. 24.7 Effect on Transferees. If Landowner has effected a transfer so that its interest in the Property has been divided between Transferees, then the annual review hereunder shall be conducted separately with respect to each Party, and the Community Development Director,and if appealed, the City Council shall make its determinations and take its actions separately with respect to each Party. If the Community Development Director or City Council Terminates, modifies or takes such other actions as may be specified in Section 28 of this Agreement in connection with a determination that such Party has not complied with the terms and conditions of this Agreement, such action by the Community Development Director, or the City Council shall be effective only as to the Party to whom the determination is made and the portions of the Property in which such Party has an interest. 24.8 Default. The rights and powers of the City Council under this Section 24 are in addition to,and shall not limit,the rights of the City to Terminate or take other action under this Agreement on account of the commission by Landowner of an event of Default. 25. Indemnification. Landowner agrees to indemnify, defend and hold harmless City, any City agencies and their respective elected and appointed councils,boards,commissions, officers, agents,employees,volunteers and representatives from any and all loss, liability, fines,penalties, forfeitures, costs and damages (whether in contract, tort or strict liability, including but not limited to personal injury, death at any time and property damage) and from any and all claims, demands and actions in law or equity(including attorneys' fees and litigation expenses)by any Person or entity, directly or indirectly arising or alleged to have arisen out of or in any way related to (1) the approval of this Agreement or the Project Approvals; (2) any development or use of the Property under this Agreement or the Project Approvals; and (3) any actions or inactions by the Landowner or its contractors, subcontractors, agents, or employees in connection with the construction or improvement of the Property and the Project, including off- site Public Improvements; provided, however, that once the City accepts the Public Improvements Landowner's indemnification obligation with respect to those improvements shall cease. Notwithstanding the foregoing, Landowner shall have no indemnification obligation (1) with respect to the negligence or willful misconduct of City, its contractors, subcontractors, agents or employees; (2) with respect to the maintenance, use or condition of any improvement or portion of the Property after the time it has been dedicated to and accepted by the City or another public entity, or taken over by a home owner's association(except as provided in an improvement agreement or maintenance bond); (3), with respect to any public use easements after the time the public use easements have been accepted by the City. The indemnity under this Section does not survive Termination of this Agreement but shall be independent of other indemnities or indemnity agreements,which may survive in accordance with their terms. 26. Amendment. Cancellation.Susuension and Clarifications. 26.1 Modification Because of Conflict with State or Federal Laws. In the event that State or Federal laws or regulations enacted after the Effective Date of this Agreement prevent or preclude compliance with one or more provisions of this Agreement or require substantial and 474on13"81608 19 material changes in Project Approvals, the parties shall meet and confer in good faith in a reasonable attempt to modify this Agreement to comply with such federal or State law or regulation. Any such modification to this Agreement shall be approved by the City Council in accordance with State law,the City Laws,and this Agreement. 26.2 Amendment by Mutual Consent. This Agreement may be amended in writing from time to time by mutual consent of the parties hereto and in accordance with the procedures of State law,the City Laws and this Agreement. 26.3 Substantive Amendments. Any substantive amendment to this Agreement shall require approval of an amendment to this Agreement in accordance with State law and the City Laws. The term "Substantive Amendments"is defined to include the following: (a) any change to the Term; (b)any changes to the permitted uses of the Project or the density and/or intensity of use of the Project; provided, however, a reduction in the number of lots within the Project shall not constitute a change in the density and/or intensity of use of the Project and shall constitute a "Minor Amendment" (as defined in Section 26.4 below); (c) any changes to provision(s) in this Agreement related to reservation or dedication of land or easements; or (d) any changes to provision(s) in this Agreement or the Project Approvals related to monetary contributions or payments by Landowner. if a Substantive Amendment is required, the City, in its reasonable discretion, may withhold or suspend any Subsequent Approval until the approval of the Substantive Amendment is final. 26A Minor Amendment. A "Minor Amendment" is any amendment of this Agreement other than a Substantive Amendment. A Minor Amendment may be approved by written agreement approved,without a public hearing,by the City Manager. 26.5 Cancellation by Mutual Consent. This Agreement may be Terminated in whole or in part by the mutual consent of the parties or their successors in interest, in accordance with the provisions of the State law and the City Laws. Any fees or payments of any kind paid pursuant to this Agreement prior to the date of mutual Termination shall be retained by City. 26.6 Suspension by City. City may suspend this Agreement or a portion thereof, if it finds, in its reasonable discretion, that suspension is necessary to protect persons or property from a condition which would create an immediate and serious risk to the health and safety of the general public or residents or employees who are occupying or will occupy the Property, such as might be the case in the event of a major earthquake or natural disaster of similar magnitude. 26.7 Operating Memoranda. The provisions of this Agreement require a close degree of cooperation between City and Landowner and the refinements and further development of the Project may demonstrate that clarifications are appropriate with respect to the details of performance of City and Landowner. If and when, from time to time, during the Term, City and Landowner agree that such clarifications are necessary or appropriate, they shall effectuate such clarifications through operating memoranda approved by City and Landowner. No such operating memoranda shall constitute an amendment to this Agreement requiring public notice or hearing. The City Attorney shall be authorized to make the determination whether a requested clarification may be effectuated pursuant to this Section 26.7 or whether the requested 4740T1399816v18 20 clarification is of such a character to constitute a Substantive Amendment or a Minor Amendment pursuant to this Section 26. The City Manager is herby authorized to execute any operating memoranda hereunder without City Council action. 27. Default. Subject to Section 37, a Party's violation of any material term of this Agreement or failure by any Party to perform any material obligation of this Agreement required to be performed by such Party shall constitute a default ("Defaulej. While Landowner is in Default under this Agreement, City shall not be obligated to issue any permit or grant any Subsequent Approval until Landowner cures the Default in accordance with Section 29.2. 28. Remedies for Default. Subject to the notice and opportunity to cure provisions in Section 29 below, the sole and exclusive judicial remedy for any Party in the event of a Default by the other Party shall be an action in mandamus, specific performance, or other injunctive or declaratory relief. In addition, upon the occurrence of a Default and subsequent to the procedures described in Section 29, the non-defaulting Party shall have the right to Terminate this Agreement, but any such Termination shall not affect such Party's right to seek a remedy on account of the Default for which this Agreement has been Terminated, and shall be subject to the procedures specified in this Agreement. Landowner expressly agrees that the City, any City agencies and their respective elected and appointed councils, boards, commissions, officers, agents, employees, volunteers and representatives (collectively, for purposes of this Section 28, "City") shall not be liable for any monetary damage for a Default by the City or any claims against City arising out of this Agreement. Landowner hereby expressly waives any such monetary damages against the City. Any legal action by a Party alleging a Default must be filed within 180 days from the end of the default procedure described in Section 29. 29. Procedure Regarding Defaults. For purposes of this Agreement, a Party claiming another Party is in Default shall be referred to as the"Complaining Party," and the Party alleged to be in Default shall be referred to as the "Party in Default." A Complaining Party shall not exercise any of its remedies as the result of Default unless such Complaining Party first gives notice to the Party in Default as provided in this Section, and the Party in Default fails to cure such Default within the applicable cure period. 29.1 Notice. The Complaining Party shall give written notice of Default to the Party in Default, specifying the Default alleged by the Complaining Party. Delay in giving such notice shall not constitute a waiver of any Default nor shall it change the time of Default. 29.2 Cure. Subject to Section 37, the Party in Default shall have thirty(30)days from receipt of the notice of Default to effect a cure prior to exercise of remedies by the Complaining Party. If the nature of the alleged Default is such that it cannot practicably be cured within such thirty (30) day period, the cure shall be deemed to have occurred within such thirty (30) day period if: (a)the cure shall be commenced at the earliest practicable date following receipt of the notice; (b)the cure is diligently prosecuted to completion at all times thereafter,(c)at the earliest practicable date (in no event later than thirty (30) days after the curing Party's receipt of the notice), the curing Party provides written notice to the other Party that the cure cannot practicably be completed within such thirty (30)day period; and (d) the cure is completed at the earliest practicable date. The Party in Default shall diligently endeavor to cure, correct or remedy the matter complained of, provided such cure, correction or remedy shall be completed 47407\139981608 21 within the applicable time period set forth herein after receipt of written notice (or such additional time as may be agreed to by the Complaining Party to be reasonably necessary to correct the matter). 29.3 Failure to Assert. Any failures or delays by a Complaining Party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies. Delays by a Complaining Party in asserting any of its rights and remedies shall not deprive the Complaining Party of its right.to institute and maintain any actions or proceedings, which it may deem necessary to protect, assert, or enforce any such rights or remedies. 29.4 Procedure for Terminating Agreement upon Default. If the City desires to Terminate this Agreement in the event of a Default, the matter shall be set for a public hearing before the City Council. The burden of proof of whether a Party is in Default shall be on the Party alleging Default. If City Council determines that Landowner is in Default and has not cured to City's reasonable satisfaction, or that the Default would place the residents of the City in a condition dangerous to their health or safety, the City Council may Terminate this Agreement. 29.5 No Cross Default. Notwithstanding anything to the contrary in this Agreement, if Landowner has effected a Transfer so that its interest in the Property has been divided between Transferees, then any determination that a Party is in Default shall be effective only as to the Party to whom the determination is made and the portions of the Property in which such Party has an interest. Z9.6 California Claims Act Compliance. Compliance with the procedures set forth in Section 28 above and this Section 29 shall be deemed full compliance with the requirements of the California Claims Act (Government Code §§900 et seq.) including, but not limited to, the notice of an event of default hereunder constituting full compliance with the requirements of Government Code §910. 30. Attorneys' Fees and Costs in Legal Actions by Parties to the Agreement. If either Party brings an action or proceeding (including, without limitation, any cross-complaint, counterclaim, or third-party claim) against the other Party by reason of a Default, or otherwise arising out of this Agreement, the prevailing Party in such action or proceeding shall be entitled to its costs and expenses of suit, including but not limited to reasonable attorneys' fees (including, without limitation, costs and expenses), which shall be payable whether or not such action is prosecuted to judgment. In addition to the foregoing award of attorneys' fees to the prevailing Party, the prevailing Party in any lawsuit shall be entitled to its attorneys' fees incurred in any post-judgment proceedings to collect or enforce the judgment. This provision is separate and several and shall survive the merger of this Agreement into any judgment on this Agreement. 31. Attorneys' Fees and Costs in Legal Actions by Third Parties to the Agreement. If any Person or entity not a Party to this Agreement initiates an action at law or in equity to challenge the validity of any provision of this Agreement or the Project Approvals, the Parties shall cooperate in defending such action. Landowner shall bear its own costs of defense as a real 474075139981608 22 party in interest in any such action, and Landowner shall reimburse City for all costs (including, court costs) and attorneys' fees incurred by City in defense of any such action or other proceeding. In its sole discretion, City may tender its defense of such action to Landowner or defend the action itself. Upon a tender of defense to Landowner by City, Landowner shall defend through counsel approved by City, which approval shall not be unreasonably withheld, and Landowner shall bear all attorneys' fees and costs from the date of tender. 32. Third Party Court Action/Limitation on Actions. If any court action or proceeding is brought by any third party to challenge any Project Approval, or this Agreement, then (a) Landowner shall have the right to Terminate this Agreement upon thirty (30) days' notice in writing to City, given at any time during the pendency of such action or proceeding, or within ninety(90) days after the final determination therein (including any appeals), irrespective of the nature of such final determination, and (b) any such action or proceeding shall constitute a Permitted Delay(s). Any action by any third party to attack, review, set aside, void or annul any action or decision taken by a Party under this Agreement shall not be maintained by such third party unless such action or proceeding is commenced within ninety(90) days after the date such decision or action is made or taken hereunder,or such shorter period as is prescribed by Law. 33. Processing During Third Party Litigation. The filing of any third party lawsuit(s) against City or .Landowner relating to this Agreement, the Project Approvals or to other development issues affecting the Property shall not delay or stop the development, processing or construction of the Project, or issuance of ministerial and/or discretionary approvals, unless the third party obtains a court order preventing the activity. 34. Reimbursement of Development Agreement Costs and Fees. Landowner shall reimburse City for all of its reasonable and actual costs, fees and expenses incurred in drafting, reviewing, revising and processing this Agreement, including, but not limited to, recording fees, ordinance publication fees, special notice or special meeting costs, staff time in preparing staff reports, and staff time, including legal counsel fees, for preparation and review of this Agreement and changes requested by Landowner. 35. Agreement Runs with the Land. Except as otherwise provided for in this Agreement, all of the provisions, agreements, rights, terms, powers, standards, covenants, and obligations contained in this Agreement shall be binding upon the Parties and their respective heirs, successors and assignees, representatives, lessees; and all other Persons acquiring the Property, or any portion thereof, or any interest therein, whether by operation of law or in any manner whatsoever. All of the provisions of this Agreement shall be enforceable as equitable servitudes and shall constitute covenants running with the land pursuant to applicable laws, including, but not limited to, Section 1468 of the Civil Code of the State of California, and the burdens and benefits shall be binding upon and inure to the benefit of each of the Parties and their respective heirs, successors (by merger, consolidation, or otherwise), assigns, devisees, administrators, representatives, and lessees. 36. Bankruptcy. The obligations of this Agreement shall not be dischargeable in bankruptcy. 47407V39981608 - 23 37. Excuse for Nonperformance. Notwithstanding anything to the contrary in this Agreement, Landowner and City shall be excused from performing any obligation or undertaking provided in this Agreement, except any obligation to pay any sum of money under the applicable provisions hereof, in the event and so long as the performance of any such obligation is prevented or delayed, retarded or hindered by act of God, fire, earthquake, flood, explosion, action of the elements, war, invasion, insurrection, riot, mob violence, terrorist acts, sabotage, inability to procure or general shortage of labor, equipment, facilities, materials or supplies in the open market, failure of transportation, strikes, lockouts, condemnation, requisition, laws, litigation, orders of governmental, civil, military or naval authority, or any other cause, whether similar or dissimilar to the foregoing, not caused by and not within the control of the Party claiming the extension of time to perform(a"Permitted Delay"). 38. Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the Landowner and the City and their successors and assigns. No other Person shall have any right of action based upon any provision in this Agreement. City and Landowner hereby renounce the existence of any third party beneficiary to this Agreement and agree that nothing contained herein shall be construed as giving any Person third party beneficiary status. 39. Severability. Except as set forth herein, if any term, covenant or condition of this Agreement or the application thereof to any Person,entity or circumstance shall to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant or condition to Persons, entities or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and be enforced to the fullest extent permitted by law; provided, however,if any provision of this Agreement is determined to be invalid or unenforceable and the effect thereof is to deprive a Party hereto of an essential benefit of its bargain hereunder, then such Party so deprived shall have the option to Terminate this entire Agreement from and after such determination. 40. Waiver; Remedies Cumulative. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by the other Party, irrespective of the length of time for which such failure continues, shall not constitute a waiver of such Party's right to demand strict compliance by such other Party in the future. No waiver by a Party of a Default shall be effective or binding upon such Party unless made in writing by such Party and no such waiver shall be implied from any omission by a Party to take any action with respect to such Default. No express written waiver of any Default shall affect any other Default, or cover any other period of time, other than any Default and/or period of time specified in such express waiver. Except as provided in Section 28, all of the remedies permitted or available to a Party under this Agreement, or at law or in equity, shall be cumulative and not alternative, and invocation of any such right or remedy shall not constitute a waiver or election of remedies with respect to any other permitted or available right or remedy. 41. Applicable Law and Venue. This Agreement, and the rights and obligations of the Parties, shall be governed by and interpreted in accordance with the laws of the State of California. The parties agree that any lawsuit or legal proceeding arising hereunder shall be heard in the Superior Court of California located in Riverside, California. 47401t1399816v18 24 - 42. Notices. Any notice to either Party required by this Agreement, the Development Agreement Statute,or the procedure adopted pursuant to Government Code Section 65865, shall be in writing and given by delivering the same to such Party in person or by sending the same by registered or certified mail, or express mail, return receipt requested, with postage prepaid, by overnight delivery or by facsimile, to the Parry's mailing address. The respective mailing addresses of the Parties are,until changed as hereinafter provided,the following: City: City of Menifee 29714 Haun Road Menifee,CA 92586 Attention:City Manager Facsimile:951/679-3843 Copy to: Lewis Brisbois Bisgaard&Smith LLP 650 Town Center Drive, Suite 1400 Newport Coast,CA 92626-1925 Attention: Elizabeth L. Martyn,Esq. Facsimile: 714/850-1030 Landowner: KB Home Coastal Inc. 36301 Inland Valley Drive Wildomar,CA 92595 Attention:Michael H. Freeman,Jr. Facsimile: 951/677-2190 Copy to: KB Home 10990 Wilshire Boulevard Los Angeles, CA 90024 Attention:Legal Department Facsimile: 310/231-4280 Copy to: Cox,Castle&Nicholson LLP 2049 Century Park East, Suite 2800 Los Angeles,CA 90067 Attention:Ronald I. Silverman,Esq. Facsimile: 310/277-7889 Any Party may change its mailing address at any time by giving written notice of such change to the other Party in the manner provided herein at least ten(10) days prior to the date such change is effected. All notices under this Agreement shall be deemed given, received, made or communicated on the earlier of the date personal delivery is effected or on the delivery date or attempted delivery date shown on the return receipt, air bill or facsimile. 43. Form of Agreement: Recordation: Exhibits. The City shall cause this Agreement, any amendment hereto and any Termination of any parts or provisions hereof, to be recorded, at Landowner's expense, with the Riverside County Recorder within ten (10) days of the Effective Date thereof. Any amendment or Termination of this Agreement to be recorded that affects less 4740A139 RIW8 25 � 1 • than all of the Property shall describe the portion thereof that is the subject of such amendment or Termination. This Agreement is executed in three duplicate originals, each of which is deemed to be an original. This Agreement consists of 29 pages(including Notarial jurats) and 3 Exhibits,which constitute the entire understanding and agreement of the parties. 44. Further Assurances. Each Party covenants, on behalf of itself and its successors, heirs and assigns, to take all actions and do all things, and to execute, with acknowledgment or affidavit if required, any and all documents and writings that may be necessary or proper to achieve the purposes and objectives of this Agreement. 45. Approvals. Unless otherwise herein provided, whenever a determination, approval, consent or satisfaction (herein collectively referred to as "consent") is required of a Party pursuant to this Agreement, such consent shalt not be unreasonably withheld or delayed. If a Party shall not consent, the reasons therefor shall be stated in reasonable detail in writing. Consent by a Party to or of any act or request by the other Party shall not be deemed to waive or render unnecessary consent to or of any similar or subsequent acts or requests. Consent given or withheld by the City Manager or the Community Development Director may,be appealed to the City Council. 46. Not a Public Dedication. Nothing contained herein shall be deemed to be a gift or dedication of the Property, or of the Project, or portion thereof, to the general public, for the general public, or for any public use or purpose whatsoever. Landowner shall have the right to prevent or prohibit the use of the Property, or the Project, or any portion thereof, including common areas and buildings and improvements located thereon, by any person for any purpose inimical to the operation of a private, integrated Project as contemplated by this Agreement. 47. Entire Agreement. This written Agreement and the Exhibits contain all the representations and the entire agreement between the Parties with respect to the subject matter hereof. Except as otherwise specified in this Agreement, any prior correspondence, memoranda, agreements,warranties or representations are superseded in total by this Agreement. 48. Construction of Agreement. The provisions of this Agreement and the Exhibits shall be construed as a whole according to their common meaning and not strictly for or against any Party in order to achieve the objectives and purpose of the Parties. The captions preceding the text of each Section, subsection and the Table of Contents are included only for convenience of reference and shall be disregarded in the construction and interpretation of this Agreement. Wherever required by the context, the singular shall include the plural and vice versa, and the masculine gender shall include the feminine or neutergenders, or vice versa. Unless otherwise specified, whenever in this Agreement reference is made to the Table of Contents, any Section, or any defined term, such reference shall be deemed to refer to the Table of Contents, Section or defined term of this Agreement. Exhibits to this Agreement shall be incorporated into this Agreement as if stated fully herein. The use in this Agreement of the words "including", "such as"or words of similar import when following any general term, statement or matter shall not be construed to'limit such statement, term or matter to the specific items or matters, whether or not language of non-limitation, such as "without limitation" or "but not limited to", or words of similar import, are used with reference thereto, but rather shall be deemed to refer to all other items or matters that could reasonably fall within the broadest possible scope of such statement, 47407tl399316vIS 26 term or matter. This Agreement has been reviewed and revised by legal counsel for both Landowner and City, and no presumption or rule that ambiguities shall be construed against the drafting Party shall apply to the interpretation or enforcement of this Agreement. 49. Signature Pages. For convenience, the signatures of the Parties to this Agreement may be executed and acknowledged on separate pages in counterparts which, when attached to this Agreement, shall constitute this as one complete Agreement. 50. Time. Time is of the essence of this Agreement and of each and every term and condition hereof. 51. Facsimile Signatures. Signatures delivered by facsimile shall be as binding as originals upon the Parties so signing and delivering. IN WITNESS WHEREOF, the City of Menifee, a municipal corporation, has authorized the execution of this Agreement in duplicate by its Mayor and attested to by its City Clerk under the authority of Ordinance No. 2010-71, adopted by the City Council of the City of Menifee on the 2nd day of March,2010,and Landowner has caused this Agreement to be executed. "CITY" "LANDOWNER" CITY OF MENIFEE, KB HOME COASTAL INC., a municipal c rporation a California corporation By: By: AF Name: 1 J. Ruffner Its: Title: President By: �--� Michael H.Freeman,Jr. Title: Vice President,Land and Planning ATTEST: City Clerk APPROVED AS TO FORM: a. LQ. �! t car City A omey 47407\1399816v18 27 - CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of CalicoJJ/Jp�ia /11 j� County of 1�-, V�►AVt 61 d V" (�/�y� 1 /�y� On MJ 42_0D 10 before me, t r VW l mi I li 1, a naby\l Dubl ic., Date �Nierearss1114"8 em/nu'o�m moonrar personally appeared � W. e 1t t 1 a IpnaHa 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/herAheir authorized Y MILLION capacfty(ies), and that by hisdhedtheir signature(s)on the COMa.A i6&56t16 instrument the person(s), or the entity upon behalf of NaiAl{r p1 ma-cuWowla N MeRry rbuxn which the person(s) acted, executed the instrument. ilus,f,701a I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my d o Signature Mee Notary Seal AEow S'ridlum of a OPTfONAL Though the tnformatlon below fs not required by law,it may prove valuable to persons relying on the document and could prownt fraudulent removal and reattachment of this form to another document. Description of Attached D ument �Q rn Title or Type of Document/�:yy t ��11��� r)p �i a 1 1 '�__��-�//'� Document Date:03-V�-r7HJyQ Number of Pages: r'DH Signer(s)OlherThan Named Above: Capacity(fes)Claimed by Signer(s) Signer's Name: Signer's Name: 1190ndividual ❑Individual. ❑ Corporate Officer—Title(s): ❑Corporate Officer—Tille(s): ❑ Partner—❑Limited ❑General _ _ ❑Partner—❑Limited ❑General ❑ Attorney in Fact ❑Attorney in Fact ❑ Trustee rap of humb oars ❑Trustee Tan of thumb hate ❑ Guardian or Conservator ❑Guardian or Conservator ❑ Other: ❑Other: Signer Is Representing: Signer Is Representing: 02Wl NaeorW rJamry AsmtleEon•A95a Da 3NO Ae..P,O.6aa 2CO2•Ctmlw.aN,CA 91313-Z4a2•xxxNaivielNoiaryaq Ilem f159D7 eeomar:Celio4Fina 18aUb]65a71 ACKNOWLEDGMENT State of California County of Riverside ) On February 19, 2010 before me, C. Harrington, Notary Public, (insert name and title of the officer) personally appeared Stephen J. Ruffner and Michael Freeman, Jr. who proved to me on the basis of satisfactory evidence to be the person(s)whose name(s)jslare subscribed to the within Instrument and acknowledged to me that hellshe/they executed the same in hWA4e9their authorized capacity(ies), and that by We/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. - - - - - - - - - - - - - C. HARRINGTON WITNESS my hand and official seal, Commission♦t JOT9" Notary Public-Calttomia E �/ l0l A/pOtM Cowt Signature V ^ (Seal) STATE OF CALIFORNIA ) �y ) ss: COUNTY OF Tit � ) On 6;?-QA-XIQ , 2010 before me, , (he insert name of the officer),Notary Public,personally appeared ho proved to me on the basis of satisfactory evidence to be the person(s) whose nam ) islare 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 hiAer/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. .• 4V[Ulm Sign ure o Notary Public [Seal] ,�"�� MARY MILLION CDMM.Ii 1bB38bb a NOT km coon M N MY cuu.E}P.hN.I.201D i 4740AI399816v18 29 , K EXHIBIT"C" CITY'S DIF Single Multi- Family Family Residential Residential Area ($per ($per Surface Plan Sun City/Menifee dwelling dwelling Commercial Industrial($ Mining($ 17 Valley unit) unit) ($per acre) per acre) per acre) a Public Facilities $1,207 $1,011 $5,163 $2,112 $211 b Fire Facilities $705 $590 $4,879 $2,035 $203 c Transportation- $1,564 $1,236 $5,823 $3,042 $2,677 Roads,Bridges, Major Improvements d Transportation— $420 $378 $6,971 $4,878 $4,293 Signals e Conservation and $0 $0 $0 $0 $0 Land Bank f Regional Parks $563 $472 $2,259 $942 $94 g Community $0 $0 $0 $0 $0 Centers/Parks h Regional $316 $264 $1,266 $528 $53 Multipurpose Trails i Flood Control $0 $0 $0 $0 $0 j Library Books $341 $286 $0 $0 $0 k Fee Program $69 $56 $284 $127 $47 Administration Total $5,185 $4,293 $26,645 $13,664 $7,578 47407V399816v18 C-1