Apple Valley City Council
August 25, 2026

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GPA 2024-001, ZC 2024-007, DCA 2024-001, DP 2025-013, TPM 21034, DA 2026-003 Agenda Report, Planning Commission, July 15, 2026
is provided by Southwest Gas. Telecommunications services would be provided by Charter Communications and Spectrum. The Project would involve utility connections to provide electric power and telecommunications services. The project does not envision connecting to natural gas.

Other site improvements would include two guard booths, a pump house, site lighting, trash enclosures, bicycle racks, a retaining wall at the north end of the site and outdoor sitting and employee dining areas.

H. Entitlements
General Plan Amendment: The project requests a General Plan Amendment to change the site’s land use designation from “Office Professional” to “Regional Commercial” to accommodate the intended e-commerce warehousing and logistics use (see Attachment 3). Planning Commission is authorized to make a recommendation to the Town Council per Development Code Section 9.02.050.F.

Zone Change: The project requests a Zone Change from the existing “O-P” Office Professional zone to the “C-R” Regional Commercial zone as well as application of the IN Industrial / e-commerce overlay (see Attachment 4). Planning Commission is authorized to make a recommendation to the Town Council per Development Code Section 9.06.040B.

Development Code Amendment: E-commerce warehousing and distribution centers are allowed as a “Permitted Use” per Development Code Table 9.35.030.A. Footnote 7 of that table states “in the C-R District, new eCommerce fulfillment and distribution centers shall only be allowed within the 978 acres bounded by the I-15 freeway to the west, Dante Road to the south, “Caplet Street” (now Cordova Road) to the north and the C-R District’s boundary to the east”. The proposed DCA would change Code Section 9.35.020.D and Table 9.35.030-A, Footnote 7, by expanding the overlay boundary eastward to include the project site and revising the overlay’s acreage from 978 to 1,071 acres to encompass the proposed project area (see Attachment 5). Planning Commission is authorized to make a recommendation to the Town Council per Development Code Section 9.06.040B.

Tentative Parcel Map: The project requires a Tentative Parcel Map and Final Map to consolidate its twelve (12) parcels to a single parcel to accommodate a single large warehouse building. The Tentative Parcel Map would also vacate three street segments across the site. TPM’s are typically approved by the Planning Commission, however, due to the GPA, Zone Change and DCA, the Commission will provide a recommendation to Town Council, which has final review authority over the project (see Attachment 6).

Development Permit: industrial sites greater than 100,000 square feet require Planning Commission approval of a development permit. The Commission will provide a recommendation to Town Council, which has final review authority over the project, per Development Code Section 9.17.020.B.2.

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GPA 2024-001, ZC 2024-007, DCA 2024-001, DP 2025-013, TPM 21034, DA 2026-003 Agenda Report, Planning Commission, July 15, 2026
Development Agreement: The development agreement has been prepared between the Town and Project Applicant pursuant to Section 9.04 of the Municipal Code. Development Agreements establish the mechanism to provide needed stability for project development by memorializing development standards and extending applicable vesting periods for project entitlements. The proposed development agreement does not contemplate any additional physical improvements beyond those that are already identified in the project description, analysis, and proposed conditions and design features; and no land use standards and/or criteria are being changed or waived by this agreement. As specified in Subsection C of Section 9.04.020, "Applications and Processing", the Commission, in its review of the proposed Development Agreement, is tasked with recommending approval to Town Council, which has final review authority over the agreement.

ANALYSIS
A. Development Standards Compliance
The project complies with all applicable development standards and regulations per Table

9.35.040-A for the C-R zone, as shown in the attached Development Standards compliance chart (Attachment 8).

B. Traffic Circulation and Roadway Improvements
Regional access to the site is provided from northbound Interstate 15, Exit 154 and via State Route 18. In the project area, Stoddard Wells Road is paved, while Wrangler and Johnson do not yet exist. The project is required to provide the following, per Town Engineering requirements:
• Stoddard Wells Road: A 64-ft wide half-width dedication adjacent to the property, improved to the half-width of the Major Divided Arterial Street standards (128-foot ROW width).
• Wrangler Road: A 44-ft wide half-width dedication adjacent to the west boundary of the property, improved to the half-width Secondary Street standards (88-foot ROW width).
• Johnson Road: A 33-ft wide half-width dedication adjacent to the north project boundary, improved to the half-width Industrial/Commercial Local Street standards (66-foot ROW width).
• Install a traffic signal at the intersection of Stoddard Wells Road and Wrangler Road.

C. Architecture
The project proposes a 1.38 million square foot steel-framed concrete tilt-up joint panel warehouse building with maximum height of 52 feet. Aluminum framed 9’ x 10’ roll up

7 Apple Valley 84 Logistics Center
GPA 2024-001, ZC 2024-007, DCA 2024-001, DP 2025-013, TPM 21034, DA 2026-003 Agenda Report, Planning Commission, July 15, 2026
loading dock doors would line both the east and west walls. The design incorporates a variety of architectural strategies to create a contemporary, high-quality e-Commerce facility. Vertical and horizontal elements break up the overall sense of massing. A variety of architectural accents are deployed including wall articulation, varying roof planes, cornice caps, wall scoring, painted reveals, metal louvered vents and prominent glass entryways at all four corners. The paint palette includes a collection of complementary grays and blues. Clerestory windows are shown across the tops of all elevations and all windows are tempered reflective, blue-tinted “vision” and “spandrel glass”. Rooftop parapets will conceal rooftop equipment. Overall, Staff finds that the proposed building design meets the Town’s architectural design intent as identified in the General Plan and Development Code.

D. Development Impact Fees
Below are the development impact fees that would be collected for the project.

Development Impact Fees (per square foot)
Traffic Impact Up to $2.31
Law Enforcement Facilities $0.001
Storm Drainage Facilities $0.114
General Government Facilities $0.034
General Park Fee $0.0062
Sanitary Sewer Facilities $0.684
Fire District $0.263
In addition, Fair Share regional transportation improvement fees would be collected.

E. Tribal Notification
Assembly Bill 52 (AB 52) requires public agencies to consult with California Native American tribes “that are traditionally and culturally affiliated with the geographic area of a proposed project that is subject to CEQA”. Since an EIR has been prepared, Tribal notification is required pursuant to AB 52. In addition, Senate Bill 18 (SB 18) requires local governments to consult with both federally and non-federally recognized potentially affected Native American tribes before adopting General Plan Amendments, to mitigate potential impacts of those actions on tribal cultural resources. Such notifications were sent to ten potentially affected tribes on October 6th, 2025, per lists provided by the Native American Heritage Commission.

F. Western Joshua Trees
The project site contains two live Western Joshua Trees, as mapped during surveys conducted in 2025, both of which would be impacted by construction. Joshua Trees are a “Threatened” candidate species for listing under the California Endangered Species Act

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GPA 2024-001, ZC 2024-007, DCA 2024-001, DP 2025-013, TPM 21034, DA 2026-003 Agenda Report, Planning Commission, July 15, 2026
and removal or relocation requires consultation with the California Department of Fish & Wildlife (CDFW) under the Western Joshua Tree Conservation Act. The project is required to obtain authorization from CDFW to remove or relocate the two living trees and will also be required to obtain a native plant removal permit from the Town (Municipal Code Chapter 9.76). The trees will be relocated on site if feasible, and the project will be required to pay fees into the Western Joshua Tree Conservation Fund and/or purchase conservation bank credits if they cannot be replanted on site.

G. Adjacent sensitive use
One existing residence is located in the area, at 19277 Stoddard Wells Road, approximately 388 feet south of the project site. Residences are considered sensitive environmental receptors. Based on the environmental analysis, while this residence would be subject to heightened exposure to air quality impacts during project construction activities, the anticipated impacts are within the Air Quality District’s allowable thresholds, and the impacts are considered less-than-significant. In addition, active project site activity would be a minimum of 500 linear feet away from the residence, separated from the site by Stoddard Wells Road, which is anticipated to be a Major Divided Arterial roadway, and significant landscape screening, including fast-growing tree varieties. Staff therefore feels that project impacts to this residence would be negligible.

H. CEQA compliance
Based on technical studies, the Town determined that the proposed project would require an Environmental Impact Report (EIR) to evaluate potential environmental impacts and provide the public and responsible agencies with detailed information about those impacts.

A 30-day “Notice of Preparation” comment period was held between October 2, 2025 and October 31, 2025, as well as a Scoping Session held on October 8, 2025. A total of three comments were received during the comment period.

A Draft EIR (DEIR) was prepared providing detailed information regarding short-term, long-term, direct, indirect and cumulative environmental effects and an analysis of project alternatives. An initial study was not prepared for this project because the Town already determined an EIR was required for this project. The DEIR identifies extensive mitigation measures that would minimize or eliminate the project’s adverse impacts and demonstrates that most environmental impacts associated with the project can be reduced to less-than-significant levels with adoption of mitigation measures. A “Notice of Availability” and the DEIR were circulated and posted per Town and State Law for 45 days from January 13, 2026 through February 27, 2026. The DEIR and NOA were sent to the State Clearinghouse and San Bernardino County Clerk’s Office and uploaded to the Town website for public review. The NOA was also directly sent to responsible public agencies and other interested parties. Copies of the DEIR and its appendices were placed at Town Hall, the Planning Department and at the San Bernardino County Library. During

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GPA 2024-001, ZC 2024-007, DCA 2024-001, DP 2025-013, TPM 21034, DA 2026-003 Agenda Report, Planning Commission, July 15, 2026
the public review period, the Town received a total of nine comment letters. A total of nine written comment letters were received during the DEIR public notice of availability period.

This included a letter submitted by Advocates for the Environment on February 17, 2026.

AENV withdrew their comment letter and opposition in a follow-up letter dated April 9, 2026.

Based on the analysis and comments, the Town prepared a Final EIR (FEIR) following the 45-day DEIR review period, containing Responses to Comments, clarifications and changes to the DEIR. A Mitigation Monitoring and Reporting Program (MMRP) was also prepared, along with CEQA Findings of Fact providing the legal record documenting the Town's reasoning for approving the project. A Statement of Overriding Considerations was prepared addressing the project’s “significant and unavoidable” impacts to Greenhouse Gas Emissions and Transportation (Vehicle Miles Traveled) and providing written justification for the Town to approve the project based on benefits that would be expected from the project, including economic, fiscal and community benefits, that would outweigh adverse environmental impacts. The Town posted the FEIR on the Town website and sent direct notification to commenting public agencies and other parties requesting to be notified.

The project’s environmental documentation, including the CEQA Findings of Fact and Statement of Overriding Considerations, may be viewed on the Town’s environmental web page, here: https://applevalley.org/ceqa-related-documents/.

I. Town noticing
On July 3, 2026, a Public Hearing Notice was sent to all property owners located within 700 linear feet of the project site boundaries. In addition, the Notice was posted to the Town Bulletin Board, uploaded to the Town website, was published in Valleywide Newspaper, and a public notice information sign board was installed at the project site.

All public noticing requirements have been met.

J. Findings
Findings for approval must be made prior to the Planning Commission recommending approval of the requested entitlements (GPA, DCA, ZC, TPM, DP and DA), pursuant to the Town of Apple Valley Development Code. The Findings and their associated Facts are included in Attachments 11,12, and 13).

K. Authority
Development Code Section 9.12.100 provides guidance for projects requesting multiple permits. The Planning Commission is typically the decision-making authority for Tentative Maps and Development Permits. GPAs, Zone Changes and Development Code Amendments are considered by Town Council. Final decision on such projects where multiple permits are required are made by the highest level of review authority.

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GPA 2024-001, ZC 2024-007, DCA 2024-001, DP 2025-013, TPM 21034, DA 2026-003 Agenda Report, Planning Commission, July 15, 2026
Considering that the GPA, Zone Change and DCA require Town Council approval, the Town Council acts as the decision-making authority over all requested project entitlements.

RECOMMENDATION:

Based on the information contained in this staff report, and any input received from the public at the hearing, staff recommends that the Planning Commission move to recommend the following to the Town Council:

A. Adopt a resolution recommending that the Town Council certify the Final Environmental Impact Report, adopt the Mitigation Monitoring and Reporting Program for the Apple 84 Project (SCH#2025100104), and adopt CEQA Findings of Fact and Statement of Overriding Considerations (Attachment 10); and, B. Adopt a resolution recommending that the Town Council approve General Plan Amendment 2024-001, Zone Change 2024-007, Development Code Amendment 2024-001 (Attachment 11); and,
C. Adopt a resolution recommending that the Town Council approve Development Permit 2025-013, and Tentative Parcel Map 21034 (Attachment 12); and, D. Adopt a resolution recommending that the Town Council approve Development Agreement 2026-003 (Attachment 13).

ATTACHMENTS:

1. Regional Location map

2. Vicinity Map

3. General Plan Exhibit

4. Zoning Exhibit

5. eCommerce Overlay map

6. Tentative Parcel Map

7. Drawings

8. Development Standards Compliance

9. Parking Calculations

10.Resolution No. 2026-002 (EIR) (with Exhibit A- Findings of Fact and Statement of Overriding Considerations, Exhibit B- MMRP)

11.Resolution No. 2026-003 (GPA, DCA, ZC) (with Exhibit A- Findings, Exhibit B - draft Ordinances)

12.Resolution No. 2026-004 (TPM, DP) (with Exhibit A – Findings, Exhibit B- draft Conditions of Approval)

13.Resolution No. 2026-005 (with Exhibit A – Findings, Exhibit B- draft DA)

Town Council Agenda Report
Date: August 25, 2026
To: Honorable Mayor and Town Council
Subject: INTRODUCE ORDINANCE NO. 579 AN ORDINANCE OF THE TOWN

COUNCIL OF THE TOWN OF APPLE VALLEY, CALIFORNIA,
APPROVING DEVELOPMENT AGREEMENT 2026-002 BETWEEN

THE TOWN OF APPLE VALLEY AND COV APPLE VALLEY, LLC
From: Guy Eisenbrey, Town Manager
Submitted by: Lindy Daugherty, Economic Development Specialist II Planning Division
Budgeted Item: Yes No N/A

RECOMMENDED ACTION
That the Town Council conduct a public hearing and;
A. Find that the environmental impacts of this Project were previously reviewed in conjunction with the Apple Valley 143 Project Environmental Impact Report (State Clearinghouse No. 2022070019) which was certified by the Planning Commission on November 15, 2023. This Development Agreement is consistent with the previously Certified Environmental Impact Report (the “Certified EIR”) and introduces no new significant environmental impacts; and

1. The previous Certified EIR contains a complete and accurate reporting of the environmental impacts associated with the Project; and

2. The previous Certified EIR was completed in compliance with CEQA and the Guidelines promulgated thereunder; and

3. The previous Certified EIR reflects the independent judgment of the Planning Commission; and

4. The proposed Development Agreement for the Project will introduce no new significant environmental impacts beyond those previously analyzed in the previous Certified EIR, and all mitigation measures previously adopted with the Certified EIR, are incorporated herein by this reference.

B. Find that the provisions of Development Agreement 2026-002 are:

1. Consistent with the General Plan or any applicable specific plan;

2. Compatible with the uses authorized in, and the regulations prescribed for the land use district in which the real property is located; and

3. Not detrimental to the public health, safety and welfare.

C. Move to waive the reading of Ordinance No. 579 in its entirety and read by title only.

D. Move to introduce Ordinance No. 579 approving Development Agreement 2026- 002 between the Town of Apple Valley and COV Apple Valley, LLC.

E. Direct Staff to file a Notice of Determination.

BACKGROUND
On November 15, 2023, the Town’s Planning Commission approved Development Permit 2022-016 for the Apple Valley 143 project, to construct a 2.52 million square foot industrial warehousing and distribution development with three (3) buildings and a proposed maximum height of fifty-five (55) feet for all buildings, as well as Tentative Parcel Map No. 20674 to establish three (3) parcels from approximately 143 acres within the Regional Commercial (C-R) zoning district (Apple Valley 143 Project). The previously approved entitlements are set to expire on November 15, 2026.

The Developer has requested that the Town enter into a Development Agreement pursuant to Government Code Section 65864 et. seq. (Attachment A) under the same conditions as those approved on November 15, 2023. The Developer is requesting a development agreement to extend the approved entitlements as the complexity of securing utility extensions to the project has delayed project implementation.

The proposed Development Agreement vests the Developer's rights under the agreement for a 10-year period. The Project will develop a vacant site with a 2.52 million square foot industrial warehousing and distribution development and will provide on-site infrastructure upgrades and provide significant public infrastructure improvements as well as the payment of development impact fees, described in the Development Agreement. In addition, the Project will stimulate development of adjacent properties. Lastly, the Project will implement numerous Town planning and economic development policies which benefit the health and fiscal welfare of the Town and its residents.

VISION ALIGNMENT
The provisions in the proposed Development Agreement align with the Town’s Vision and strategic priorities for responsible growth and economic development. Development Agreements establish the mechanism to provide needed stability for project development.

The proposed Development Agreement extends the established entitlements and confirms the respective obligations of the Town and the Developer, development timeline, applicable public infrastructure improvements, payment of applicable fees, annual review requirements, and other negotiated provisions.

FISCAL IMPACT
None.

ATTACHMENTS
A. Development Agreement 2026-002
B. Planning Commission Resolution 2026-006
C. Proposed Ordinance No. 579

Recorded at request of: )
Clerk, Town Council )
Town of Apple Valley )
)
When recorded return to: )
Town of Apple Valley )
14955 Dale Evans Parkway )
Attention: Town Clerk )
)
Exempt from Filing Fees, Government Code Section 6103
APNs: 0472-211-05, 0472-211-06,
0472-211-15, 0472-222-06 & 0472-222-11
DEVELOPMENT AGREEMENT NO. 2026-002
(APPLE VALLEY 143 PROJECT)

A DEVELOPMENT AGREEMENT BETWEEN

TOWN OF APPLE VALLEY
and

COV APPLE VALLEY LLC, A DELAWARE LIMITED LIABILITY COMPANY

DEVELOPMENT AGREEMENT NO. 2026-002
(APPLE VALLEY 143)
This Development Agreement (hereinafter “Agreement”) is entered into effective on the date it is recorded with the San Bernardino County Recorder (hereinafter the “Effective Date”) by and among the Town of Apple Valley, a California municipal corporation (hereinafter “TOWN”), and COV Apple Valley LLC, a Delaware limited liability company (hereinafter “OWNER”):

RECITALS
WHEREAS, TOWN is authorized to enter into binding development agreements with persons having legal or equitable interests in real property for the development of such property, pursuant to Section 65864 et seq. of the Government Code; and WHEREAS, OWNER has requested TOWN enter into a development agreement and proceedings have been taken in accordance with the rules and regulations of TOWN; and WHEREAS, by electing to enter into this Agreement, TOWN shall bind future Town Councils of TOWN by the obligations specified herein and limit the future exercise of certain governmental and proprietary powers of TOWN; and
WHEREAS, the terms and conditions of this Agreement have undergone extensive review by TOWN the Town Council and have been found to be fair, just and reasonable; and WHEREAS, the best interests of the citizens of the TOWN and the public health, safety and welfare will be served by entering into this Agreement; and WHEREAS, OWNER filed an application for the creation of three (3) parcels totaling approximately 143 acres to assemble and develop the Property with three (3) industrial/warehouse buildings: Building 1 (approximately 615,000 square feet); Building 2 (approximately 1,222,500 square feet); and Building 3 (approximately 682,500 square feet) for a total of approximately 2,520,000 square feet; and
WHEREAS, all of the procedures of the California Environmental Quality Act have been met with respect to the Project and the Agreement (State Clearinghouse No. 2022070019); and WHEREAS, on November 15, 2023, the Town’s Planning Commission approved Development Permit No. 2022-016, to construct a 2.52 million square foot industrial warehousing distribution development with a proposed maximum height of fifty-five (55) feet for all buildings; and
WHEREAS, on November 15, 2023, the Town’s Planning Commission approved Tentative Parcel Map No. 20674 to establish three (3) parcels from approximately 143 acres within the Regional Commercial (C-R) – Warehouse Overlay zoning district; and

WHEREAS, this Agreement and the Project are consistent with the TOWN’S Comprehensive General Plan and any Specific Plan applicable thereto; and WHEREAS, all actions taken and approvals given by TOWN have been duly taken or approved in accordance with all applicable legal requirements for notice, public hearings, findings, votes, and other procedural matters; and
WHEREAS, development of the Property in accordance with this Agreement will provide substantial benefits to TOWN and will further important policies and goals of TOWN; and WHEREAS, this Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property, ensure progressive installation of necessary improvements, provide for public services appropriate to the development of the Project, and generally serve the purposes for which development agreements under Sections 65864 etseq. of the Government Code are intended; and
WHEREAS, OWNER has incurred and will in the future incur substantial costs in order to assure development of the Property in accordance with this Agreement; and WHEREAS, OWNER has incurred and will in the future incur substantial costs in excess of the generally applicable requirements in order to assure vesting of legal rights to develop the Property in accordance with this Agreement.

COVENANTS
NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. DEFINITIONS AND EXHIBITS.

1.1 Definitions. The following terms when used in this Agreement shall be defined as follows:

1.1.1 “Agreement” means this Development Agreement.

1.1.2 “TOWN” means the Town of Apple Valley, a municipal corporation, organized and existing pursuant to the laws of the State of California.

1.1.3 “Development” means the improvement of the Property for the purposes of completing the structures, improvements and facilities comprising the Project including, but not limited to: grading; the construction of infrastructure and public facilities related to the Project whether located within or outside the Property; the construction of buildings and structures; and the installation of landscaping. “Development” does not include the maintenance, repair, reconstruction or redevelopment of any building, structure, improvement or facility after the construction and completion thereof.

1.1.4 “Development Agreement Policies” means those certain development agreement policies approved by TOWN pursuant to Ordinance No. 383, adopted on June 24, 2008; as Ordinance No. 405, adopted on April 27, 2010; as Ordinance No. 567, adopted on December 12, 2023, as amended as Title 9, Chapter 9.04, of the Town of Apple Valley Development Code.

1.1.5 “Development Approvals” means all permits and other entitlements for use subject to approval or issuance by TOWN in connection with development of the Property including, but not limited to:
(a) specific plans and specific plan amendments;
(b) tentative and final subdivision and parcel maps;
(c) development plan review;
(d) conditional use permits, public use permits and plot plans; (e) zoning;
(f) grading and building permits.

1.1.6 “Development Exaction” means any requirement of TOWN in connection with or pursuant to any Land Use Regulation or Development Approval for the dedication of land, the construction of improvements or public facilities, or the payment of fees in order to lessen, offset, mitigate or compensate for the impacts of development on the environment or other public interests.

1.1.7 “Development Impact Fee” means a monetary exaction other than a tax or special assessment, whether characterized as a fee or a tax and whether established for a broad class of projects by legislation of general applicability or imposed on a specific project on an ad hoc basis, that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project, but does not include park “in lieu” fees specified in Government Code Section 66477, fees for processing applications for governmental regulatory actions or approvals, fees collected under development agreements adopted pursuant to Article 2.5 of the Government Code (commencing with Section 65864) of Chapter 4. “Development Impact Fee” shall not include processing fees and charges imposed by TOWN to cover the estimated actual costs to TOWN of processing applications for Development Approvals or for monitoring compliance with any Development Approvals granted or issued, including, without limitation, fees for zoning variances; zoning changes; use permits; building inspections; building permits; filing and processing applications and petitions filed with the local agency formation commission or conducting preliminary proceedings or proceedings under the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, Division 3 (commencing with Section 56000) of Title 5 of the Government Code; the processing of maps under the provisions of the Subdivision Map Act, Division 2 (commencing with Section 66410) of Title 7 of the Government Code; or planning services under the authority of Chapter 3 (commencing with Section 65100) of Division 1 of Title 7 of the Government Code, fees and charges as described in Sections 51287, 56383, 57004, 65104, 65456, 65863.7, 65909.5, 66013, 66014, and 66451.2 of the Government Code, Sections 17951,

19132.3, and 19852 of the Health and Safety Code, Section 41901 of the Public Resources Code, and Section 21671.5 of the Public Utilities Code, as such codes may be amended or superseded, including by amendment or replacement.

1.1.8 “Development Plan” means the proposed plan for Development of all or a portion of the Property pursuant to the Existing Development Approvals and Subsequent Development Approvals, in accord with the Existing Land Use Regulations and applicable Subsequent Land Use Regulations, subject to the Reservations of Authority.

1.1.9 “Effective Date” means the date that the ordinance approving this Agreement becomes effective.

1.1.10 “Existing Development Approvals” means all Development Approvals approved or issued prior to the Effective Date. Existing Development Approvals includes the Approvals incorporated herein as Exhibit “C” and all other Approvals which are a matter of public record on the Effective Date.

1.1.11 “Existing Land Use Regulations” means all Land Use Regulations in effect on the Effective Date. Existing Land Use Regulations includes the Land Use Regulations incorporated herein as Exhibit “D” and all other Land Use Regulations which are in effect and a matter of public record on the Effective Date.

1.1.12 “General Plan” means the General Plan adopted on August 11, 2009 by Resolution No. 2009-31.

1.1.13 “Improvement” or “Improvements” means those public improvements required to support the development of the Project as described in the conditions of approval for Development Permit 2022-016 and Tentative Parcel Map No. 20574 as further described in Exhibit “E” (the “Infrastructure Improvements Exhibit”).

1.1.14 “Land Use Regulations” means all ordinances, resolutions, codes, rules, regulations and official policies of TOWN governing the development and use of land, including, without limitation, the permitted use of land, the density or intensity of use, subdivision requirements, timing and phasing of development, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction standards and specifications applicable to the development of the Property. “Land Use Regulations” does not include any TOWN ordinance, resolution, code, rule, regulation or official policy, governing:
(a) the conduct of businesses, professions, and occupations; (b) taxes and assessments;
(c) the control and abatement of nuisances;
(d) the granting of encroachment permits and the conveyance of similar rights and interests which provide for the use of or the entry upon public property;

(e) the exercise of the power of eminent domain.

1.1.15 “Mortgagee” means a mortgagee of a mortgage, a beneficiary under a deed of trust or any other security-device lender, and their successors and assigns.

1.1.16 “OWNER” means the persons and entities listed as OWNER on page 1 of this Agreement and their permitted successors in interest to all or any part of the Property.

1.1.17 “Project” means the development of the Property contemplated by the Development Plan as such Plan may be further defined, enhanced or modified pursuant to the provisions of this Agreement.

1.1.18 “Property” means the real property described on Exhibit “A” and shown on Exhibit “B” to this Agreement.

1.1.19 “Reservations of Authority” means the rights and authority excepted from the assurances and rights provided to OWNER under this Agreement and reserved to TOWN under Section 3.6 of this Agreement.

1.1.20 “Subsequent Development Approvals” means all Development Approvals required subsequent to the Effective Date in connection with development of the Property.

1.1.21 “Subsequent Land Use Regulations” means any Land Use Regulations adopted and effective after the Effective Date of this Agreement.

1.2 Exhibits. The following documents are attached to, and by this reference made a part of, this Agreement:

Exhibit “A” — Legal Description of the Property.

Exhibit “B” — Map showing Property and its location.

Exhibit “C” — Existing Development Approvals.

Exhibit “D” — Existing Land Use Regulations.

Exhibit “E” — Infrastructure Improvements Exhibit.

2. GENERAL PROVISIONS.

2.1 Binding Effect of Agreement. The Property is hereby made subject to this Agreement. Development of the Property is hereby authorized and may be carried out only in accordance with the terms of this Agreement.

2.2 Ownership of Property. OWNER represents and covenants that it is the owner of the fee simple title to the Property or a portion thereof, or has the right to acquire fee simple title to the Property or a portion thereof from the current owner(s) thereof. To the extent OWNER does not own fee simple title to the Property, OWNER shall obtain written consent from the current fee owner of the Property agreeing to the terms of this Agreement and the recordation thereof.

2.3 Term. The term of this Agreement shall commence on the Effective Date, and shall continue for an initial period of ten (10) years thereafter unless this term is modified or extended pursuant to the provisions of this Agreement. The term of this Agreement may be extended for an additional five (5) years following expiration of the initial ten (10) year term, provided the following have occurred:
(a) OWNER provides at least one hundred eighty (180) days written notice to TOWN prior to expiration of the initial term;
(b) OWNER is not then in uncured default of this Agreement.

The initial term and, if and upon extension, the 5-year extension, shall sometimes be referred to herein collectively as the “Term.” Upon extension of the Term in accord with this Section 2.3, TOWN will execute, in recordable form, any instrument which OWNER may reasonably require to evidence the extension.

2.4 Assignment.

2.4.1 Right to Assign. OWNER shall have the right to sell, transfer or assign the Property in whole or in part (provided that no such partial transfer shall violate the Subdivision Map Act, Government Code Section 66410 et seq.), to any person, partnership, limited liability company, joint venture, firm or corporation at any time during the term of this Agreement; provided, however, that any such sale, transfer or assignment shall include the assignment and assumption of the rights, duties and obligations arising under or from this Agreement and be made in strict compliance with the following conditions precedent:
(a) No sale, transfer or assignment of any right or interest under this Agreement shall be made unless made together with the sale, transfer or assignment of all or a part of the Property.
(b) Concurrent with any such sale, transfer or assignment, or within fifteen (15) business days thereafter, OWNER shall notify TOWN’s Town Manager, in writing, of such sale, transfer or assignment and shall provide TOWN with (1) an executed agreement, in a form reasonably acceptable to TOWN, by the purchaser, transferee or assignee and providing therein that the purchaser, transferee or assignee expressly and unconditionally assumes all the duties and obligations of OWNER under this Agreement with respect to the portion of the Property so sold, transferred or assigned; and (2) the payment of the applicable processing charge to cover the TOWN’s review and consideration of such sale, transfer or assignment.

Any sale, transfer or assignment not made in strict compliance with the foregoing conditions shall constitute a default by OWNER under this Agreement. Notwithstanding the failure of any purchaser, transferee or assignee to execute the agreement required by Paragraph (b) of this Subsection 2.4.1, the burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the benefits of this Agreement shall not inure to such purchaser, transferee or assignee until and unless such agreement is executed. The Town Manager shall have the authority to review, consider and either approve, conditionally approve, or deny any proposed sale, transfer or assignment that is not made in compliance with this section 2.4.

2.4.2 Release of Transferring Owner. Notwithstanding any sale, transfer or assignment, a transferring OWNER shall continue to be obligated under this Agreement unless such transferring OWNER is given a release in writing by TOWN, which release shall be provided by TOWN upon the full satisfaction by such transferring OWNER of the following conditions:
(a) OWNER no longer has a legal or equitable interest in all or any portion of the Property sold, transferred, or assigned.
(b) OWNER is not then in default under this Agreement.
(c) OWNER has provided TOWN with the notice and executed agreement required under Paragraph (b) of Subsection 2.4.1 above.
(d) The purchaser, transferee or assignee provides TOWN with security equivalent to any security previously provided by OWNER to secure performance of its obligations hereunder.

2.4.3 Effect of Assignment and Release of Obligations. In the event of a sale, transfer or assignment pursuant to the provisions of Section 2.4.2 above:
(a) The assignee shall be liable for the performance of all obligations of OWNER with respect to transferred property, but shall have no obligations with respect to the portions of the Property, if any, not transferred (the “Retained Property”). (b) The owner of the Retained Property shall be liable for the performance of all obligations of OWNER with respect to Retained Property, but shall have no further obligations with respect to the transferred property.
(c) The assignee’s exercise, use and enjoyment of the Property or portion thereof shall be subject to the terms of this Agreement to the same extent as if the assignee were the OWNER.

2.4.4 Subsequent Assignment. Any subsequent sale, transfer or assignment after an initial sale, transfer or assignment shall be made only in accordance with and subject to the terms and conditions of this Section 2.4.

2.4.5 Termination of Agreement with Respect to Individual Lots Upon Sale to Public and Completion of Construction. The provisions of Subsection 2.4.1 shall not apply to the sale or lease (for a period longer than one year) of any lot which has been finally subdivided and is individually (and not in “bulk”) sold or leased to a member of the public or other ultimate user. Notwithstanding any other provisions of this Agreement, this Agreement shall terminate with respect to any lot and such lot shall be released and no longer be subject to this Agreement without the execution or recordation of any further document upon satisfaction of both of the following conditions:
(a) The lot has been finally subdivided and individually (and not in “bulk”) sold or leased (for a period longer than one year) to a member of the public or other ultimate user; and, (b) A certificate of occupancy has been issued for a building on the lot, and the fees set forth under Section 4 of this Agreement have been paid.

2.4.6 Partial Assignment and Assumption. TOWN and OWNER agree OWNER may partially assign its obligations and rights under this Agreement, and all amendments hereto, to a purchaser, transferee or assignee of a lot, which has been subdivided subject to provisions of a partial assignment and assumption agreement in a form approved by TOWN. Any such complete and executed partial assignment and assumption of this Agreement shall be submitted to TOWN for approval, which shall not be unreasonably withheld, pursuant to Section 2.4.1 of this Agreement. Within thirty (30) days following such complete submittal, TOWN shall review, and if the above conditions are satisfied, may approve the partial assignment and release and notify the purchaser, transferee or assignee in writing thereof. No such release approved pursuant to this Subsection 2.4.6 shall cause, or otherwise affect, a release of OWNER from the duties and obligations under this Agreement that are retained by OWNER and excluded from the transfer or assignment.

2.5 Amendment or Cancellation of Agreement. This Agreement may be amended or cancelled in whole or in part by either party or successor in interest only in the manner provided for in Government Code Sections 65865.1 or 65868 and the Development Agreement Policies.

Any amendment of this Agreement, which amendment has been requested by OWNER, shall be considered by the TOWN only upon the payment of the applicable processing charge. This provision shall not limit any remedy of TOWN or OWNER as provided by this Agreement. For purposes of this section, the term “successor in interest” shall mean any person having a legal or equitable interest in the whole of the Property, or any portion thereof as to which such person wishes to amend or cancel this Agreement. The procedure for proposing and adopting an amendment to, or cancellation of, in whole or in part, this Agreement shall be the same as the procedure for adopting and entering into this Agreement in the first instance. Notwithstanding the foregoing sentence, if the TOWN initiates the proposed amendment to, or cancellation of, in whole or in part, this Agreement, TOWN shall first give notice to the OWNER of its intention to initiate such proceedings at least sixty (60) days in advance of the giving the public notice of intention to consider the amendment or cancellation.

2.6 Minor Modification. Upon the written application of OWNER, minor modifications and changes to the Development Plan including modifications to building design or footprint (not affecting minimum setbacks), parking layout and design, and landscape area design may be approved by the Director of the Planning Department without the need to amend this Development Agreement. Other changes in the Development Plan shall be processed pursuant to the Town Zoning Ordinance. It is also contemplated by TOWN and OWNER that OWNER may, from time to time, seek amendments to one or more of the Development Approvals. Any such amendments are contemplated by TOWN and OWNER as being within the scope of this Agreement as long as they are consistent with the Land Use Regulations and shall, upon approval by TOWN, continue to constitute the Development Approvals as referenced herein. The parties agree that any such modifications or amendments shall not constitute an amendment to this Agreement nor require an amendment to this Agreement.

2.7 Termination. This Agreement shall be deemed terminated and of no further effect upon the occurrence of any of the following events:
(a) Expiration of the stated term of this Agreement as set forth in Section 2.3.

(b) Entry of a final judgment setting aside, voiding or annulling the adoption of the ordinance approving this Agreement.
(c) The adoption of a referendum measure overriding or repealing the ordinance approving this Agreement.
(d) Completion of the Project in accordance with the terms of this Agreement including issuance of all required occupancy permits and acceptance by TOWN or applicable public agency of all required dedications.
(e) Termination of this Agreement based on any default of OWNER and following the termination proceedings required by the Development Agreement Policies.

Termination of this Agreement shall not constitute termination of any other land use entitlements approved for the Property. Upon the termination of this Agreement, no party shall have any further right or obligation hereunder except with respect to any obligation to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination or with respect to any obligations which are specifically set forth as surviving this Agreement. Upon such termination, any public facilities and services mitigation fees paid pursuant to Section 4.2 of this Agreement by OWNER to TOWN on which construction has not yet begun shall be refunded to OWNER by TOWN.

2.8 Notices.
(a) As used in this Agreement, “notice” includes, but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment or other communication required or permitted hereunder. (b) All notices shall be in writing and shall be considered given either: (i) when delivered in person, including, without limitation, by courier, to the recipient named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United States mail in a sealed envelope as either registered or certified mail with return receipt requested, and postage and postal charges prepaid, and addressed to the recipient named below. All notices shall be addressed as follows:

If to TOWN:

Town of Apple Valley
14955 Dale Evans Parkway
Apple Valley, CA 92307
Attn: Guy Eisenbrey, Town Manager
Telephone: 760-240-7000 ext 7051
Copy to:

Best, Best & Krieger, LLP
2855 E. Guasti Rd., Suite 400
Ontario, CA 91761
Attn: Thomas Rice, Town Attorney

Telephone: (909) 989-8584
Facsimile: (909) 944-1441
If to OWNER:

COV Apple Valley, LLC
19782 MacArthur Blvd., Suite 230
Irvine, CA 92612
Attn: Ronald Rakunas
with a copy to:

Rutan & Tucker, LLP
18575 Jamboree Road, Suite 900
Irvine, CA 92612
Attn: John A. Ramirez
(c) Either party may, by notice given at any time, require subsequent notices to be given to another person or entity, whether a party or an officer or representative of a party, or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalidated by the change.

2.9 Representations and Warranties.

TOWN represents and warrants to Developer, as follows:
i. TOWN is a public body, corporate and politic. TOWN is authorized to enter into this Agreement pursuant to Government Code Section 65864, et seq., and the execution and delivery of this Agreement by TOWN has been fully authorized by all requisite actions on the part of TOWN.
ii. TOWN’s execution and delivery of this Agreement and TOWN’s performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which TOWN is a party or by which it is bound. iii. TOWN has not received any notice of, or knows any basis for, any actual or pending litigation or proceeding by any Person against TOWN with respect to the Property or this Agreement.

3. DEVELOPMENT OF THE PROPERTY.

3.1 Rights to Develop. Subject to the terms of this Agreement including the Reservations of Authority, OWNER shall have a vested right to develop the Property in accordance with, and to the extent of, the Development Plan. Except as otherwise provided in this Agreement, the permitted uses of the Property, the density and intensity of use, the maximum height and size

of proposed buildings, and provisions for reservation and dedication of land for public purposes shall be those set forth in the Existing Land Use Regulations.

3.2 Effect of Agreement on Land Use Regulations. Except as otherwise provided under the terms of this Agreement including the Reservations of Authority, the rules, regulations and official policies governing permitted uses of the Property, the density and intensity of use of the Property, the maximum height and size of proposed buildings, and the design, improvement and construction standards and specifications applicable to development of the Property shall be the Existing Land Use Regulations. In connection with any Subsequent Development Approval, TOWN shall exercise discretion in the same manner that it exercises discretion under its police powers including the Reservations of Authority set forth herein; provided, however, that such discretion shall not prevent development of the Property for the uses and to the density or intensity of development set forth in this Agreement.

3.3 Timing of Development. The parties acknowledge that OWNER cannot at this time predict when or the rate at which phases of the Property will be developed. Such decisions depend upon numerous factors which are not within the control of OWNER, such as market orientation and demand, interest rates, absorption, completion and other similar factors. Since the California Supreme Court held in Pardee Construction Co. v. Town of Camarillo, (1984) 37 Cal.3d 465, that the failure of the parties therein to provide for the timing of development resulted in a later adopted initiative restricting the timing of development to prevail over such parties’ agreement, it is the parties’ intent to cure that deficiency by acknowledging and providing that OWNER shall have the right to develop the Property in such order and at such rate and at such times as OWNER deems appropriate within the exercise of its subjective business judgment, subject only to any timing or phasing requirements set forth in the Development Plan or the Phasing Plan set forth in Section

3.5. 3.3.1 Infrastructure Improvement Exhibit. Attached hereto as Exhibit “E” is a depiction of the Improvements needed for the development of the Property (the “Infrastructure Improvement Exhibit”).

3.4 Requirement for Public Infrastructure Improvements. Development of the Property is contingent in part on the phasing of area-wide infrastructure improvements over which the OWNER has control. The issuance of building permits by TOWN is, in general, contingent on OWNER’s completion of needed infrastructure improvements and the availability of improvements and services to serve the Property.

3.5 Phasing Plan. Construction of Building 2 and all off-site development work will begin within three (3) years of the Effective Date of this Agreement. Construction of Building 1 and Building 3 will begin within the subsequent three (3) years.

This Phasing Plan is preliminary and reflects OWNER’s good-faith estimate of the sequencing and timing of the Project based on conditions known on the Effective Date. Except as expressly provided in this Agreement, phase dates are estimates only and are not binding deadlines, and any change in phasing shall not, by itself, constitute a default.

OWNER may revise the Phasing Plan from time to time. OWNER may make non-material sequencing changes upon written notice to TOWN. Any material revision affecting (a) public or off-site improvements, (b) dedications or easements to TOWN, (c) reimbursements, credits, or other financial obligations of either party, or (d) the timing of any express obligation under this Agreement, requires TOWN’s prior written approval, which shall not be unreasonably withheld, conditioned, or delayed. Any approved revised Phasing Plan shall replace the prior Phasing Plan as of the date of approval.

3.6 Changes and Amendments. The parties acknowledge that refinement and further development of the Project will require Subsequent Development Approvals and may demonstrate that changes are appropriate and mutually desirable in the Existing Development Approvals. In the event OWNER finds that a change in the Existing Development Approvals is necessary or appropriate, OWNER shall apply for a Subsequent Development Approval to effectuate such change and TOWN shall process and act on such application in accordance with the Existing Land Use Regulations, except as otherwise provided by this Agreement including the Reservations of Authority. If approved, any such change in the Existing Development Approvals shall be incorporated herein as an addendum to Exhibit “C”, and may be further changed from time to time as provided in this Section. Unless otherwise requested by OWNER, TOWN may not amend or rescind any Subsequent Development Approvals applicable to the Property after those Approvals have been granted by the TOWN. Unless otherwise required by law, as determined in TOWN’s reasonable discretion, a change to the Existing Development Approvals or Development Plan and the processing of Subsequent Development Approvals shall be deemed “minor” and not require an amendment to this Agreement provided such change does not:
(a) Alter the permitted uses of the Property as a whole; or, (b) Increase the density or intensity of use of the Property as a whole; or, (c) Increase the maximum height and size of permitted buildings; or, (d) Delete a requirement for the reservation or dedication of land for public purposes within the Property as a whole; or,
(e) Constitute a project requiring a subsequent or supplemental environmental impact report pursuant to Section 21166 of the Public Resources Code.

3.7 Reservations of Authority.

3.7.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the TOWN shall not be prevented from applying new rules, regulations and policies upon the OWNER, nor shall a development agreement prevent the TOWN from denying or conditionally approving any subsequent development project application on the basis of such new rules, regulations and policies where the new rules, regulations and policies consist of the following:
(a) Processing fees and charges of every kind and nature imposed by TOWN to cover the costs of processing applications for Development Approvals or for monitoring compliance with any Development Approvals.

(b) Procedural regulations relating to hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure.
(c) Regulations, policies, and rules governing engineering and construction standards and specifications applicable to public and private improvements, including all uniform codes adopted by the TOWN and any local amendments to those codes adopted by the TOWN which are applied uniformly to all similar development projects within the TOWN. (d) Regulations imposing Development Exactions; provided, however, that no such subsequently adopted Development Exaction shall be applicable to development of the Property unless such Development Exaction is applied uniformly to development, either throughout the TOWN or within a defined area of benefit which includes the Property. No such subsequently adopted Development Exaction shall apply if its application to the Property would physically prevent development of the Property for the uses and to the density or intensity of development set forth in the Development Plan. In the event any such subsequently adopted Development Exaction fulfills the same purposes, in whole or in part, as the fees set forth in Section 4 of this Agreement, TOWN shall allow a credit against such subsequently adopted Development Exaction for the fees paid under Section 4 of this Agreement to the extent such fees fulfill the same purposes.
(e) Regulations which may conflict with this Agreement or the Development Plan but which are reasonably necessary to protect the public health and safety. To the extent possible, any such regulations shall be applied and construed so as to provide OWNER with the rights and assurances provided under this Agreement. (f) Regulations which do not conflict with those rules, regulations and policies set forth in this Agreement or the Development Plan. Any regulation, whether adopted by initiative or otherwise, limiting the rate or timing of development of the Property shall be deemed to conflict with the Development Plan and shall therefore not be applicable to the development of the Property.
(g) Regulations which may conflict with this Agreement or the Development Plan, but to which the OWNER consents in writing.

3.7.2 Subsequent Development Approvals. When acting on Subsequent Development Approvals, TOWN may apply only the Existing Land Use Regulations and those Subsequent Land Use Regulations that are permitted under the Reservations of Authority. Any Subsequent Development Approval will be automatically vested under this Agreement.

Upon OWNER’s request, TOWN will accept and diligently process applications for Subsequent Development Approvals. TOWN will exercise reasonable good faith efforts to expedite the processing of the Subsequent Development Approvals applications to ensure that those applications are promptly considered by the approving authority. TOWN will ensure that all applications are processed and considered within the timing requirements of all applicable law, including the Permit Streamlining Act (Govt. Code § 65920, et seq.).

3.7.3 Modification or Suspension by State or Federal Law. 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 of the provisions of this Agreement, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such State or Federal laws or regulations, provided, however, that this Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provisions impractical to enforce. In the event OWNER alleges that such State or Federal laws or regulations preclude or prevent compliance with one or more provisions of this Agreement, and the TOWN does not agree, the OWNER may, at its sole cost and expense, seek declaratory relief (or other similar non-monetary remedies); provided, however, that nothing contained in this Section 3.7.3 shall impose on TOWN any monetary liability for contesting such declaratory relief (or other similar non-monetary relief).

3.7.4 Intent. The parties acknowledge and agree that TOWN is restricted in its authority to limit its police power by contract and that the foregoing limitations, reservations and exceptions are intended to reserve to TOWN all of its police power which cannot be so limited. This Agreement shall be construed, contrary to its stated terms if necessary, to reserve to TOWN all such power and authority which cannot be restricted by contract.

3.8 Public Works. If OWNER is required by this Agreement to construct any public works facilities which will be dedicated to TOWN or any other public agency upon completion, and if required by applicable laws to do so, OWNER shall perform such work in the same manner and subject to the same requirements as would be applicable to TOWN or such other public agency should it have undertaken such construction.

3.9 Acquisition of Offsite Real Property Interests. In any instance where OWNER is required by any Development Approval or Land Use Regulation to construct any public improvement on land not owned by OWNER (together, “Offsite Improvements”), OWNER shall at its sole cost and expense provide or cause to be provided, the real property interests necessary for the construction of such public improvements (the “Offsite Property”). In the event OWNER is unable, after exercising reasonable efforts, including, but not limited to, the rights under Sections 1001 and 1002 of the Civil Code, to acquire the Offsite Property necessary for the construction of the Offsite Improvements, and if so instructed by OWNER and upon OWNER’S provision of adequate security for costs TOWN may reasonably incur, TOWN agrees to use reasonable and diligent good faith efforts to acquire the Offsite Property from the owner or owners of record by negotiation to the extent permitted by law and consistent with this Agreement. If TOWN is unable to acquire the Offsite Property by negotiation within thirty (30) days after OWNER’s written request, TOWN shall, in accordance with the procedures established by law, use its power of eminent domain to acquire the Offsite Property at a public hearing noticed and conducted in accordance with California Code of Civil Procedure Section 1245.235 for the purpose of considering the adoption of a resolution of necessity concerning the Offsite Property, subject to the conditions set forth in this Section 3.9. The TOWN and OWNER acknowledge that the timelines set forth in this Section 3.9 represent the maximum time periods which TOWN and OWNER reasonably believe will be necessary to complete the acquisition of any Offsite Property.

TOWN agrees to use reasonable good faith efforts to complete the actions described within lesser time periods, to the extent that it is reasonably able to do so, consistent with the legal constraints imposed upon TOWN. OWNER shall pay all costs associated with such acquisition or

condemnation proceedings. This section 3.9 is not intended by the parties to impose upon the OWNER an enforceable duty to acquire land or construct any public improvements on land not owned by OWNER, except to the extent that the OWNER elects to proceed with the development of the Project, and then only in accordance with valid conditions imposed by the TOWN upon the development of the Project under the Subdivision Map Act or other legal authority.

3.9.1 Owner’s Option to Terminate Proceedings. TOWN shall provide written notice to OWNER no later than fifteen (15) days prior to making an offer to the owner of the Offsite Property. At any time within that fifteen (15) day period, OWNER may, at its option, notify TOWN that it wants TOWN to cease all acquisition proceedings with respect to the Offsite Property, whereupon TOWN shall cease such proceedings. TOWN shall provide written notice to OWNER no later than fifteen (15) days prior to the date of the hearing on TOWN’S intent to consider the adoption of a resolution of necessity as to any Offsite Property. At any time within that fifteen (15) day period, OWNER may, at its option, notify TOWN that it wants TOWN to cease condemnation proceedings, whereupon TOWN shall cease such proceedings. If OWNER does not notify TOWN to cease condemnation proceedings within said fifteen (15) day period, then the TOWN may proceed to consider and act upon the Offsite Property resolution of necessity.

If TOWN adopts such resolution of necessity, then TOWN shall diligently institute condemnation proceedings and file a complaint in condemnation and seek an order of immediate possession with respect to the Offsite Property.

3.10 Regulation by Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of TOWN possess authority to regulate aspects of the development of the Property separately from or jointly with TOWN and this Agreement does not limit the authority of such other public agencies. TOWN agrees to cooperate, at no cost to TOWN, with OWNER in obtaining any required permits or compliance with the regulations of other public agencies provided such cooperation is not in conflict with any laws, regulations or policies of the TOWN.

3.11 Tentative Tract Maps; Extension. With respect to applications by OWNER for tentative subdivision maps for portions of the Property, TOWN agrees that OWNER may file and process tentative maps in accordance with Chapter 4.5 (commencing with Section 66498.1) of Division 2 of Title 7 of the California Government Code and the applicable provisions of TOWN’s subdivision ordinance, as the same may be amended from time to time. In accordance with the provisions of Section 66452.6 of the Government Code, each tentative subdivision map or tentative parcel map, heretofore or hereafter approved in connection with development of the Property, shall be deemed to have been granted an extension of time to and until the date that is five (5) years following the Effective Date of this Agreement. The TOWN’s Town Council may, in its discretion, extend any such map for an additional period of up to five (5) years beyond its original term, so long as subdivider files a written request for an extension with the TOWN prior to the expiration of the initial five (5) year term.

3.12 Utilities. The Project shall be connected to all utilities necessary to provide adequate water, sewer, gas, electric, and other utility service to the Project. OWNER shall contract with the TOWN for TOWN-owned or operated utilities serving the Project for such prices and on such terms as may be mutually agreed to between the parties.

4. PUBLIC BENEFITS.

4.1 Intent. The parties acknowledge and agree that development of the Property will result in substantial public needs which will not be fully met by the Development Plan and further acknowledge and agree that this Agreement confers substantial private benefits on OWNER which should be balanced by commensurate public benefits. Accordingly, the parties intend to provide consideration to the public to balance the private benefits conferred on OWNER by providing more fully for the satisfaction of the public needs resulting from the Project.

4.2 Development Impact Fees.

4.2.1 Amount and Components of Fee. Development Impact Fees (DIF) shall be paid by OWNER. The Development Impact Fee amounts to be paid by OWNER shall be the amounts that are in effect at the time such amounts are due. Nothing contained in this Agreement shall affect the ability of the TOWN to impose new Development Impact Fees or amend the amounts of existing Development Impact Fees. Additionally, nothing contained in this Agreement shall affect the ability of other public agencies that are not controlled by TOWN to impose and amend, from time to time, Development Impact Fees established or imposed by such other public agencies, even though such Development Impact Fees may be collected by TOWN.

4.2.2 Time of Payment. The Development Impact Fees required pursuant to Subsection

4.2.1 shall be paid to TOWN prior to the issuance of building permits for each industrial building.

No fees shall be payable for building permits issued prior to the Effective Date of this Agreement, but the fees required pursuant to Subsection 4.2.1 shall be paid prior to the re-issuance or extension of any building permit for each industrial building for which such fees have not previously been paid. Notwithstanding the foregoing, deferral of the payment of any Development Impact Fees may be granted pursuant to a separate agreement approved by TOWN pursuant to TOWN policy.

4.2.3 Credits. OWNER may be entitled to credit against the fees required pursuant to Subsection 4.2.1 for the dedication of land, the construction of improvements or the payment of fees. Under no circumstance shall any credit and/or reimbursement exceed the actual costs for any dedication of land, construction of improvements, or payment of fees.

4.3 Responsibility for Construction of Public Improvements.

4.3.1 Timely Construction of Public Infrastructure. The phasing of any areawide infrastructure construction will be as approved by the TOWN. OWNER shall be responsible for the timely construction and completion of all Improvements required for the Project as shown on the attached Exhibits “E.” Unless otherwise specified, all required Improvements, shall be completed and operational prior to, and as a condition precedent to, OWNER requesting and TOWN’s granting of the first certificate of occupancy. All Infrastructure and Improvements shall be completed as required by the applicable conditions of approval.

4.3.2 Construction of DIF Program Infrastructure. To the extent OWNER is required to construct and complete construction of public improvements that are included in TOWN’s Development Impact Fee Program, TOWN agrees that TOWN shall issue DIF Credit in accordance with the provisions of a separate Fee Credit Agreement between TOWN and OWNER.

Limitation on the use of DIF Credit issued to OWNER to offset OWNER’s DIF payment

obligations shall also be subject to the provisions of a separate Fee Credit Agreement. TOWN and OWNER agree that the Fee Credit Agreement between TOWN and OWNER shall comply with TOWN’s adopted policies applicable to such agreements. Under no circumstance shall any credit and/or reimbursement exceed the actual costs for construction of the improvements.

5. [Intentionally Omitted.]

6. REVIEW FOR COMPLIANCE.

6.1 Periodic and Special Reviews.

6.1.1 Time for and Initiation of Periodic Review. The TOWN shall review this Agreement annually, on or before the anniversary of the Effective Date, in order to ascertain the good faith compliance by OWNER with the terms of this Agreement. OWNER shall submit an Annual Monitoring Report to TOWN, in a form acceptable to the Town Manager, along with any applicable processing charge, within thirty (30) days after each anniversary date of the Effective Date of this Agreement. Within thirty (30) days after the receipt of the Annual Monitoring Report, TOWN shall either issue a notice of continuing compliance or a notice of non-compliance and a notice of TOWN’s intent to conduct a Special Review pursuant to Sections 6.1.2 through 6.1.6.

Issuance of a notice of continuing compliance may be issued by the Town Manager or his designee.

The amount of the annual review and administration fee shall be set annually by resolution of the Town Council.

6.1.2 Initiation of Special Review. A special review may be called either by agreement of the parties or by unilateral initiation by the TOWN in one or more of the following ways:
(a) Recommendation of the Planning Director;
(b) Affirmative vote of at least three (3) members of the Planning Commission; or (c) Affirmative vote of at least three (3) members of the Town Council.

6.1.3 Notice of Special Review. The Town Manager shall begin the special review proceeding by giving notice to OWNER that the TOWN intends to undertake a special review of this Agreement. Such notice shall be given at least ten (10) days in advance of the time at which the matter will be considered by the Planning Commission.

6.1.4 Public Hearing. The Planning Commission shall conduct a hearing at which OWNER must demonstrate good faith compliance with the terms of this Agreement. The burden of proof on this issue shall be on OWNER.

6.1.5 Findings upon Public Hearing. The Planning Commission shall determine, upon the basis of substantial evidence, whether OWNER has, for the period under review, complied in good faith with the terms and conditions of this Agreement.

6.1.6 Procedure upon Findings.

(a) If the Planning Commission finds and determines on the basis of substantial evidence that OWNER has complied in good faith with the terms and conditions of this Agreement, during the period under review, the review for that period shall be concluded. (b) If the Planning Commission finds and determines on the basis of substantial evidence that OWNER has not complied in good faith with the terms and conditions of this Agreement, during the period under review, the Planning Commission may recommend to the Town Council to modify or terminate this Agreement.
(c) OWNER may appeal a determination pursuant to paragraph (b) to the Town Council in accordance with TOWN’s rules for consideration of appeals in zoning matters generally.

6.2 Proceedings Upon Modification or Termination. If, upon a finding under Section

6.1.6(b), TOWN determines to proceed with modification or termination of this Agreement, TOWN shall give written notice to OWNER of its intention so to do. The notice shall be given at least thirty (30) calendar days prior to the scheduled hearing and shall contain:
(a) The time and place of the hearing;
(b) A statement as to whether or not TOWN proposes to terminate or to modify the Agreement; and,
(c) Such other information TOWN considers necessary to inform OWNER of the nature of the proceeding and the facts supporting Town’s preliminary findings under Section

6.1.6(b).

6.3 Hearing on Modification or Termination. At the time and place set for the hearing on modification or termination, OWNER shall be given an opportunity to be heard and present witnesses and evidence on its behalf. OWNER shall be required to demonstrate good faith compliance with the terms and conditions of this Agreement. The burden of proof on this issue shall be on OWNER. If the Town Council finds, based upon substantial evidence in the administrative record, that OWNER has not complied in good faith with the terms or conditions of the Agreement, the Town Council may terminate or modify this Agreement and impose such conditions to the action it takes as it considers necessary to protect the interests of the TOWN. The decision of the Town Council shall be final, subject only to judicial review pursuant to Section 1094.5 of the Code of Civil Procedure.

6.4 Certificate of Agreement Compliance. If, at the conclusion of a Periodic or Special Review, OWNER is found to be in compliance with this Agreement, TOWN shall, upon written request by OWNER, issue a Certificate of Agreement Compliance (“Certificate”) to OWNER stating that after the most recent Periodic or Special Review and based upon the information known or made known to the Planning Director and Town Council that (1) this Agreement remains in effect and (2) OWNER is not in default. The Certificate shall be in recordable form, shall contain information necessary to communicate constructive record notice of the finding of compliance, shall state whether the Certificate is issued after a Periodic or Special Review and shall state the anticipated date of commencement of the next Periodic Review. OWNER may record the Certificate with the County Recorder.

Whether or not the Certificate is relied upon by assignees or other transferees or OWNER, TOWN shall not be bound by a Certificate if a default existed at the time of the Periodic or Special Review, but was concealed from or otherwise not known to the Planning Director or Town Council.

6.5 No Cross-Defaults. TOWN acknowledges that OWNER may transfer, sell or assign all or portions of the Property to other persons in accordance with Section 2.4. TOWN further acknowledges that title to all or portions of the Property may become vested in Mortgagees or a Mortgagee’s successor as a result of foreclosure, or the acceptance of a deed in lieu of foreclosure, by a Mortgagee. TOWN agrees that defaults under this Agreement by an owner of a portion of the Property will not be a default as to any other portion of the Property. In other words, a default by OWNER with respect to its obligations pertaining to that portion of the Property retained by OWNER following a transfer, sell, or assignment will not constitute a default as to any person other than OWNER or permit TOWN to exercise any remedy under this Agreement or otherwise with respect to any other portion of the Property other than that portion owned by OWNER.

Similarly, a default by a transferee with respect to its obligations pertaining to the portion of the Property owned by that transferee will not constitute OWNER’s default or permit TOWN to exercise any remedy under this Agreement or otherwise as to any portion of the Property other than the portion owned by the defaulting transferee. TOWN agrees that, if more than one person holds title to the Property, then the rights and obligations of the persons holding title to the Property are the distinct and several obligations of each person.

7. DEFAULT AND REMEDIES.

7.1 Remedies in General. It is acknowledged by the parties that TOWN would not have entered into this Agreement if it were to be liable for monetary damages under this Agreement, or with respect to this Agreement or the application thereof.

In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that neither party shall be liable in monetary damages (other than attorney’s fees under Section 10.22) to the other party, or to any successor in interest, or to any other person, and each party covenants not to sue for damages or claim any damages:
(a) For any breach of this Agreement or for any cause of action which arises out of this Agreement; or
(b) For the taking, impairment or restriction of any right or interest conveyed or provided under or pursuant to this Agreement; or
(c) Arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement.

7.2 Specific Performance. The parties acknowledge that money damages and remedies at law generally are inadequate and specific performance and other non-monetary relief are particularly appropriate remedies for the enforcement of this Agreement and should be available to all parties for the following reasons:

(a) Money damages are unavailable against the parties as provided in Section 7.1 above.
(b) Due to the size, nature and scope of the Project, it may not be practical or possible to restore the Property to its natural condition once implementation of this Agreement has begun.

After such implementation, OWNER may be foreclosed from other choices it may have had to utilize the Property or portions thereof. OWNER has invested significant time and resources and performed extensive planning and processing of the Project in agreeing to the terms of this Agreement and will be investing even more significant time and resources in implementing the Project in reliance upon the terms of this Agreement, and it is not possible to determine the sum of money which would adequately compensate OWNER for such efforts were TOWN to breach its obligations.

7.3 Release. Except for non-damage remedies, including the remedy of specific performance and judicial review as provided for in Sections 7.2 and 6.3, respectively, and the right to recover attorney’s fees under Section 10.22, OWNER, for itself, its successors and assignees, hereby releases the TOWN, its officers, agents and employees from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, including, but not limited to, any claim or liability, based or asserted, pursuant to Article I, Section 19 of the California Constitution, the Fifth Amendment of the United States Constitution, or any other law or ordinance which seeks to impose any other liability or damage, whatsoever, upon the TOWN because it entered into this Agreement or because of the terms of this Agreement.

7.4 Termination or Modification of Agreement for Default of OWNER. Subject to the provisions contained in Subsection 6.3 herein, TOWN may terminate or modify this Agreement for any failure of OWNER to perform any material duty or obligation of OWNER under this Agreement, or to comply in good faith with the terms of this Agreement (hereinafter referred to as “default”); provided, however, TOWN may terminate or modify this Agreement pursuant to this Section only after providing written notice to OWNER of default setting forth the nature of the default and the actions, if any, required by OWNER to cure such default and, where the default can be cured, OWNER has failed to take such actions and cure such default within 60 days after the effective date of such notice or, in the event that such default cannot be cured within such 60 day period but can be cured within a longer time, has failed to commence the actions necessary to cure such default within such 60 day period and to diligently proceed to complete such actions and cure such default.

7.5 Termination of Agreement for Default of TOWN. OWNER may terminate this Agreement only in the event of a default by TOWN in the performance of a material term of this Agreement and only after providing written notice to TOWN of default setting forth the nature of the default and the actions, if any, required by TOWN to cure such default and, where the default can be cured, TOWN has failed to take such actions and cure such default within 60 days after the effective date of such notice or, in the event that such default cannot be cured within such 60 day period but can be cured within a longer time, has failed to commence the actions necessary to cure such default within such 60 day period and to diligently proceed to complete such actions and cure such default.

7.6 Informal Resolution. During the administration and implementation of this Agreement, the parties recognize that good faith disagreements may arise between TOWN staff and OWNER. In the event that a dispute arises, the Parties will meet and confer in a good-faith attempt to resolve the dispute.

8. THIRD PARTY LITIGATION.

8.1 General Plan Litigation. TOWN has determined that this Agreement is consistent with its Comprehensive General Plan, as such called General Plan exists as of the Effective Date (“General Plan”), and that the General Plan meets all requirements of law. OWNER has reviewed the General Plan and concurs with TOWN’s determination.

TOWN shall have no liability in damages under this Agreement for any failure of TOWN to perform under this Agreement or the inability of OWNER to develop the Property as contemplated by the Development Plan of this Agreement as the result of a judicial determination that on the Effective Date, or at any time thereafter, the General Plan, or portions thereof, are invalid or inadequate or not in compliance with law.

8.2 Third Party Litigation Concerning Agreement. OWNER shall defend, at its expense, including attorneys’ fees, indemnify, and hold harmless TOWN, its agents, officers and employees from any claim, action or proceeding against TOWN, its agents, officers, or employees to attack, set aside, void, or annul the approval of this Agreement or the approval of any permit granted pursuant to this Agreement. TOWN shall promptly notify OWNER of any such claim, action or proceeding, and TOWN shall cooperate in the defense. If TOWN fails to promptly notify OWNER of any such claim, action or proceeding, or if TOWN fails to cooperate in the defense, OWNER shall not thereafter be responsible to defend, indemnify, or hold harmless TOWN.

TOWN may in its discretion participate in the defense of any such claim, action or proceeding.

8.3 Indemnity. In addition to the provisions of 8.2 above, OWNER shall indemnify and hold TOWN, its officers, agents, employees and independent contractors free and harmless from any liability whatsoever, based or asserted upon any act or omission of OWNER, its officers, agents, employees, subcontractors and independent contractors, for property damage, bodily injury, or death (OWNER’s employees included) or any other element of damage of any kind or nature, relating to or in any way connected with or arising from the activities contemplated hereunder, including, but not limited to, the study, design, engineering, construction, completion, failure and conveyance of the public improvements, save and except claims for damages arising through the sole negligence or sole willful misconduct of TOWN. OWNER shall defend, at its expense, including attorneys’ fees, TOWN, its officers, agents, employees and independent contractors in any legal action based upon such alleged acts or omissions. TOWN may in its discretion participate in the defense of any such legal action.

8.4 Environment Assurances. OWNER shall indemnify and hold TOWN, its officers, agents, and employees free and harmless from any liability, based or asserted, upon any act or omission of OWNER, its officers, agents, employees, subcontractors, predecessors in interest, successors, assigns and independent contractors for any violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene or to environmental conditions on, under or about the Property, including, but not limited to, soil and groundwater conditions, and OWNER

shall defend, at its expense, including attorneys’ fees, TOWN, its officers, agents and employees in any action based or asserted upon any such alleged act or omission. TOWN may in its discretion participate in the defense of any such action.

8.5 Reservation of Rights. With respect to Sections 8.2, 8.3 and 8.4 herein, TOWN reserves the right to either (1) approve the attorney(s) which OWNER selects, hires or otherwise engages to defend TOWN hereunder, which approval shall not be unreasonably withheld, or (2) conduct its own defense, provided, however, that OWNER shall reimburse TOWN forthwith for any and all reasonable expenses incurred for such defense, including attorneys’ fees, upon billing and accounting therefor.

8.6 Survival. The provisions of this Sections 8.1 through 8.6, inclusive, shall survive the termination of this Agreement.

9. MORTGAGEE PROTECTION.

The parties hereto agree that this Agreement shall not prevent or limit OWNER, in any manner, at OWNER’s sole discretion, from encumbering the Property or any portion thereof or any improvement thereon by any mortgage, deed of trust or other security device securing financing with respect to the Property. TOWN acknowledges that the lenders providing such financing may require certain Agreement interpretations and modifications and agrees upon request, from time to time, to meet with OWNER and representatives of such lenders to negotiate in good faith any such request for interpretation or modification. TOWN will not unreasonably withhold its consent to any such requested interpretation or modification provided such interpretation or modification is consistent with the intent and purposes of this Agreement. Any Mortgagee of the Property shall be entitled to the following rights and privileges:
(a) Neither entering into this Agreement nor a breach of this Agreement shall defeat, render invalid, diminish or impair the lien of any mortgage on the Property made in good faith and for value, unless otherwise required by law.
(b) The Mortgagee of any mortgage or deed of trust encumbering the Property, or any part thereof, which Mortgagee, has submitted a request in writing to the TOWN in the manner specified herein for giving notices, shall be entitled to receive written notification from TOWN of any default by OWNER in the performance of OWNER’s obligations under this Agreement. (c) If TOWN timely receives a request from a mortgagee requesting a copy of any notice of default given to OWNER under the terms of this Agreement, TOWN shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of default to OWNER. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement.
(d) Any Mortgagee who comes into possession of the Property, or any part thereof, pursuant to foreclosure of the mortgage or deed of trust, or deed in lieu of such foreclosure, shall take the Property, or part thereof, subject to the terms of this Agreement. Notwithstanding any other provision of this Agreement to the contrary, no Mortgagee shall have an obligation or duty under this Agreement to perform any of OWNER’s obligations or other affirmative covenants of OWNER hereunder, or to guarantee such performance; provided, however, that to the extent that

any covenant to be performed by OWNER is a condition precedent to the performance of a covenant by TOWN, the performance thereof shall continue to be a condition precedent to TOWN’s performance hereunder, and further provided that any sale, transfer or assignment by any Mortgagee in possession shall be subject to the provisions of Section 2.4 of this Agreement.

10. MISCELLANEOUS PROVISIONS.

10.1 Recordation of Agreement. This Agreement and any amendment or cancellation thereof shall be recorded with the San Bernardino County Recorder by the Town Clerk within ten (10) days of TOWN’s entry into this Agreement, as required by Section 65868.5 of the Government Code. If the parties to this Agreement or their successors in interest amend or cancel this Agreement as provided for herein and in Government Code Section 65868, or if the TOWN terminates or modifies the agreement as provided for herein and in Government Code Section 65865.1 for failure of the applicant to comply in good faith with the terms or conditions of this Agreement, the Town Clerk shall have notice of such action recorded with the San Bernardino County Recorder.

10.2 Entire Agreement. This Agreement sets forth and contains the entire understanding and agreement of the parties, and there are no oral or written representations, understandings or ancillary covenants, undertakings or agreements which are not contained or expressly referred to herein. No testimony or evidence of any such representations, understandings or covenants shall be admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions of this Agreement.

10.3 Severability. If any term, provision, covenant or condition of this Agreement shall be determined invalid, void or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this Agreement. Notwithstanding the foregoing, the provision of the Public Benefits set forth in Section 4 of this Agreement, including the payment of the fees set forth therein, are essential elements of this Agreement and TOWN would not have entered into this Agreement but for such provisions, and therefore in the event such provisions are determined to be invalid, void or unenforceable, this entire Agreement shall be null and void and of no force and effect whatsoever.

10.4 Interpretation and Governing Law. This Agreement and any dispute arising hereunder shall be governed and interpreted in accordance with the laws of the State of California.

This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement, all parties having been represented by counsel in the negotiation and preparation hereof.

10.5 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement.

10.6 Singular and Plural. As used herein, the singular of any word includes the plural.

10.7 [Intentionally Omitted.]

10.8 Time is of the Essence. Time is of the essence in the performance of .the provisions of this Agreement as to which time is an element.

10.9 Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by the other party with the terms of this Agreement thereafter.

10.10 No Third Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the parties and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement.

10.11 Force Majeure. Neither party shall be deemed to be in default where failure or delay in performance of any of its obligations under this Agreement is caused by floods, earthquakes, other Acts of God, fires, wars, riots or similar hostilities, strikes and other labor difficulties beyond the party’s control, (including the party’s employment force), government regulations, court actions (such as restraining orders or injunctions), or other causes beyond the party’s control. If any such events shall occur, the term of this Agreement and the time for performance by either party of any of its obligations hereunder may be extended by the written agreement of the parties for the period of time that such events prevented such performance, provided that the term of this Agreement shall not be extended under any circumstances for more than five (5) years.

10.12 Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the party benefited thereby of the covenants to be performed hereunder by such benefited party.

10.13 Successors in Interest. The burdens of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement. All provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land. Each covenant to do or refrain from doing some act hereunder with regard to development of the Property: (a) is for the benefit of and is a burden upon every portion of the Property; (b) runs with the Property and each portion thereof; and, (c) is binding upon each party and each successor in interest during ownership of the Property or any portion thereof.

10.14 Counterparts. This Agreement may be executed by the parties in counterparts, which counterparts shall be construed together and have the same effect as if all of the parties had executed the same instrument.

10.15 Jurisdiction and Venue. Any action at law or in equity arising under this Agreement or brought by a party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of San Bernardino, State of California, and the parties hereto waive all provisions of law providing for the filing, removal or change of venue to any other court.

10.16 Project as a Private Undertaking. It is specifically understood and agreed by and between the parties hereto that the development of 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. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between TOWN and OWNER is that of a government entity regulating the development of private property and the owner of such property.

10.17 Further Actions and Instruments. Each of the parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement.

Upon the request of either party at any time, the other party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. The Town Manager may delegate his or her powers and duties under this Agreement to an Assistant Town Manager or other management level employee of the TOWN.

10.18 Eminent Domain. No provision of this Agreement shall be construed to limit or restrict the exercise by TOWN of its power of eminent domain.

10.19 Agent for Service of Process. In the event OWNER is not a resident of the State of California or it is an association, partnership or joint venture without a member, partner or joint venturer resident of the State of California, or it is a foreign corporation, then in any such event, OWNER shall file with the Planning Director, upon its execution of this Agreement, a designation of a natural person residing in the State of California, giving his or her name, residence and business addresses, as its agent for the purpose of service of process in any court action arising out of or based upon this Agreement, and the delivery to such agent of a copy of any process in any such action shall constitute valid service upon OWNER. If for any reason service of such process upon such agent is not feasible, then in such event OWNER may be personally served with such process out of this County and such service shall constitute valid service upon OWNER. OWNER is amenable to the process so served, submits to the jurisdiction of the Court so obtained and waives any and all objections and protests thereto. OWNER for itself, assigns and successors hereby waives the provisions of the Hague Convention (Convention on the Service Abroad of Judicial and Extra Judicial Documents in Civil or Commercial Matters, 20 U.S.T. 361, T.I.A.S. No. 6638).

10.20 Estoppel Certificate. Within thirty (30) days following a written request by any of the parties, the other party shall execute and deliver to the requesting party a statement certifying that (i) either this Agreement is unmodified and in full force and effect or there have been specified (date and nature) modifications to the Agreement, but it remains in full force and effect as modified; and (ii) either there are no known current uncured defaults under this Agreement or that the responding party alleges that specified (date and nature) defaults exist. The statement shall also provide any other reasonable information requested. The failure to timely deliver this statement shall constitute a conclusive presumption that this Agreement is in full force and effect without modification except as may be represented by the requesting party and that there are no uncured defaults in the performance of the requesting party, except as may be represented by the requesting party. OWNER shall pay to TOWN all costs incurred by TOWN in connection with the issuance of estoppel certificates under this Section 10.20 prior to TOWN’s issuance of such certificates.

10.21 Authority to Execute. The person or persons executing this Agreement on behalf of a party warrants and represents that he or she/they have the authority to execute this Agreement on behalf of his or her/their corporation, partnership or business entity and warrants and represents that he or she/they has/have the authority to bind that party to the performance of its obligations hereunder.

10.22 Attorneys’ Fees. If either Party files any action or brings any action or proceeding against the other pertaining to the interpretation or enforcement of this Agreement, then the prevailing Party will recover as an element of its costs of suit and not as damages its costs of suit, expert fees, consultant costs, and reasonable attorneys’ fees as fixed by the Court.

IN WITNESS WHEREOF, the parties hereto have executed this Development Agreement on the day and year set forth below.
[SIGNATURES CONTAINED ON FOLLOWING PAGE]

SIGNATURE PAGE
TO DEVELOPMENT AGREEMENT NO. 2026-002

COV APPLE VALLEY LLC,
a Delaware limited liability company
By: ________________________________
Name and Title:

Date: ___________________

TOWN OF APPLE VALLEY,
a California municipal corporation
By: ________________________
Scott Nassif, Mayor

Date: ___________________
ATTEST:

By: _________________________________
Kiel E. Mangerino, Acting Town Clerk
APPROVED AS TO FORM:

By: ______________________________
Thomas Rice, Town Attorney

ACKNOWLEDGMENT
A notary public or other officer completing
this certificate verifies only the identity of the
individual who signed the document to which
this certificate is attached, and not the
truthfulness, accuracy, or validity of that
document.

State of California
County of )
On before me, _____________________________________
(insert name and title of the officer)
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 capacities(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)

ACKNOWLEDGMENT
A notary public or other officer completing
this certificate verifies only the identity of the
individual who signed the document to which
this certificate is attached, and not the
truthfulness, accuracy, or validity of that
document.

State of California
County of )
On before me, _____________________________________
(insert name and title of the officer)
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 capacities(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)

Sierra Pierce
Chairman Kallen, Vice-Chairman Tinsley, Commissioner Arias, Commissioner Lanyon, and Commissioner Pambianco.

ORDINANCE NO. 579

AN ORDINANCE OF THE TOWN COUNCIL OF THE TOWN

OF APPLE VALLEY, CALIFORNIA, APPROVING
DEVELOPMENT AGREEMENT NO. 2026-002 BETWEEN

THE TOWN OF APPLE VALLEY AND COV APPLE

VALLEY, LLC
WHEREAS, the Town of Apple Valley (“Town”) is a municipal corporation, duly organized under the constitution and laws of the State of California; and WHEREAS, Article 2.5 of Chapter 4 of Division 1 of Title 7 (commencing with Section 65864) of the Government Code of the State of California (“Statute”) authorizes the Town to enter into a contract which is called a development agreement in order to establish with certainty what regulations will govern the construction of a development; and
WHEREAS, Title 9 “Development Code” of the Municipal Code of the Town of Apple Valley (“AVMC”), specifically Chapter 9.04 “Development Agreements” establishes procedures and requirements for consideration of development agreements; and WHEREAS, in accordance with the Statute and Chapter 9.04 of the AVMC (herein referred to collectively as the “Development Agreement Law”), the Planning Commission of the Town of Apple Valley (the “Planning Commission”) did receive a request by Owner to enter into a development agreement to extend the life of Development Permit No. 2022- 016 and Tentative Parcel Map No. 20674; and
WHEREAS, Owner previously filed a successful application for the creation of three (3) parcels totaling approximately 143 acres to assemble and develop the Property with three (3) industrial/warehouse buildings: Building 1 (approximately 615,000 square feet); Building 2 (approximately 1,222,500 square feet); and Building 3 (approximately 682,500 square feet) for a total of approximately 2,520,000 square feet; and WHEREAS, all of the procedures of the California Environmental Quality Act have been met with respect to the Project and the Agreement (State Clearinghouse No. 2022070019); and
WHEREAS, on November 15, 2023, the Town’s Planning Commission approved Development Permit No. 2022-016, to construct a 2.52 million square foot industrial warehousing distribution development with a proposed maximum height of fifty-five (55) feet for all buildings, incorporated herein by this reference as if set forth in full; and WHEREAS, on November 15, 2023, the Town’s Planning Commission approved Tentative Parcel Map No. 20674 to establish three (3) parcels from approximately 143 acres within the Regional Commercial (C-R) – Warehouse Overlay zoning district, incorporated herein by this reference as if set forth in full; and

Ordinance No. 579
WHEREAS, Development Permit No. 2022-016 and Tentative Parcel Map No. 20674 are consistent with the General Plan and Municipal Code of the Town of Apple Valley; and
WHEREAS, Development Agreement No. 2026-002, attached hereto as Exhibit “A,” is proposed to provide for the development of the Proposed Project and certain vested development rights for the term of the Development Agreement, and in turn the Owner would provide specified public benefits; and
WHEREAS, development of the Property in accordance with this Agreement will provide substantial benefits to Town and will further important policies and goals of the Town; and
WHEREAS, Owner has incurred and will in the future incur substantial costs in order to assure development of the Property in accordance with this Agreement; and WHEREAS, Owner has incurred and will in the future incur substantial costs in excess of the generally applicable requirements in order to assure vesting of legal rights to develop the Property in accordance with this Agreement; and WHEREAS, this Agreement introduces no new significant environmental impacts, and all previously adopted mitigation measures are a condition of project approval; and WHEREAS, Apple Valley Development Code Table 9.11.020-A “Review Authority,” grants the Planning Commission the responsibility and authority to review and make recommendations to the Town Council on the Development Agreement; and WHEREAS, on July 3, 2026, Development Agreement No. 2026-002 was duly noticed in the Apple Valley News, a newspaper of general circulation within the Town of Apple Valley. Pursuant to Section 9.13.030(9), a thirty-two (32) square foot sign was posted on the site adjacent to the public right-of-way with a description of the project and the location, date, time and place of the scheduled hearing; and WHEREAS, on July 15, 2026, the Planning Commission of the Town of Apple Valley conducted a duly noticed and advertised public hearing for Development Agreement 2026-002, receiving testimony from the public and adopted Planning Commission Resolution No. 2026-006 recommending adoption of Development Agreement 2026-002; and
WHEREAS, Development Agreement 2026-002 is consistent with the Land Use Element goals and polices of the Town’s General Plan and Title 9 “Development Code” of the Municipal Code of the Town of Apple Valley and shall promote the health, safety, and general welfare of the citizens of the town of Apple Valley; and WHEREAS, all actions taken and approvals given by Town have been duly taken or approved in accordance with all applicable legal requirements for notice, public hearings, findings, votes, and other procedural matters; and

Ordinance No. 579
WHEREAS, this Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property, ensure progressive installation of necessary improvements, provide for public services appropriate to the development of the Project, and generally serve the purposes for which development agreements under Sections 65864 et seq. of the Government Code are intended; and
WHEREAS, the Town and Owner have reached mutual agreement and desire to voluntarily enter into the Development Agreement to facilitate development of the Project subject to the conditions and requirements set forth therein; and WHEREAS, at the public hearing, the Planning Commission considered the Staff Report, the Development Agreement, and public testimony; and WHEREAS, in adopting Planning Commission Resolution No. 2026-006 on July 15, 2026, the Planning Commission made the following findings pursuant to Development Code Section 9.04.020(C) with respect to Development Agreement 2026-002:

1. The proposed Development Agreement was consistent with the objectives, policies, land uses, and programs specified in the General Plan and any applicable specific plan,

2. The proposed Development Agreement was compatible with the uses authorized in, and the regulations prescribed for, the land use district in which the real property is located because development of the Property in accordance with Development Agreement 2026-002 will provide substantial benefits to Town and will further important policies and goals of Town as described in the Development Agreement, the staff report and the resolution.

3. The proposed Development Agreement would be beneficial to the public health, safety and welfare because Development Agreement 2026-002 ensures the orderly and timely development of the Property, progressive installation of necessary improvements, and provides for public services appropriate to the development of the Project.

NOW, THEREFORE, THE TOWN COUNCIL OF THE TOWN OF APPLE
VALLEY DOES ORDAIN AS FOLLOWS:

SECTION 1. Incorporation of Recitals. The above recitals are true and correct and are incorporated herein by this reference.

SECTION 2. Based on the entire record before the Town Council and all oral and written evidence presented, the Town Council finds this Development Agreement not detrimental to the health, safety and welfare of the community because the Development Agreement will permit land uses that best reflect community needs, including the need for local employment opportunities and increased property tax revenue to fund Town services, and will allow for the most efficient and logical development of the real property governed by the Development Agreement in the Town.

Ordinance No. 579
SECTION 3. Pursuant to California Government Code section 65867.5(b), and based on the entire record before the Town Council, including all written and oral evidence presented, the Town Council hereby finds that the Development Agreement is consistent with the General Plan because the Development Agreement will result in the development of the Property that is consistent with the uses and intensity allowed under the General Plan.

SECTION 4. Based on the entire record before the Town Council and all written and oral evidence presented, the Town Council finds that: (i) the economic interests of Apple Valley citizens and the public health, safety and welfare will be best served by entering into the Development Agreement; (ii) this Development Agreement is compatible with the uses authorized in, and the regulations prescribed for, the area in which the Property is located, (iii) the Development Agreement is in conformity with the public convenience, general welfare and good land use practice; and (iv) the Development Agreement will not adversely affect the orderly development or the preservation of property values for the property it governs or any other property.

SECTION 5. Pursuant to California Government Code Section 65865, the Town Council hereby approves Development Agreement 2026-002, attached hereto as Exhibit “A.”
SECTION 6. CEQA. The Town Council has reviewed and considered the information in the previous Certified EIR and supporting documentation (State Clearinghouse No. 2022070019). Based upon the facts and information contained in the previous Certified EIR and supporting documentation, the Town Council finds as follows:
(1) The environmental impacts of this Project were previously reviewed in conjunction with the Apple Valley 143 Project Environmental Impact Report (State Clearinghouse No. 2022070019) which was certified by the Planning Commission on November 15, 2023. This Development Agreement is consistent with the previously Certified Environmental Impact Report (the “Certified EIR”) and introduces no new significant environmental impacts; and
(2) The previous Certified EIR contains a complete and accurate reporting of the environmental impacts associated with the Project; and (3) The previous Certified EIR was completed in compliance with CEQA and the Guidelines promulgated thereunder; and
(4) The previous Certified EIR reflects the independent judgement of the Planning Commission; and
(5) The proposed Development Agreement for the Project will introduce no new significant environmental impacts beyond those previously analyzed in the previous Certified EIR, and all mitigation measures previously adopted with the Certified EIR, are incorporated herein by this reference.

SECTION 7. Subsequent or Supplemental Environmental Review Not Required.

Ordinance No. 579
Based on the information presented to the Town Council, and the specific findings set forth in Section 6 above, the Town Council finds that the preparation of a subsequent or supplemental Certified EIR is not required for the Project, as the Project:
(1) Does not constitute substantial changes to the Certified EIR that will require major revisions to the Certified EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; and
(2) Does not constitute substantial changes with respect to the circumstances under which the Certified EIR was prepared, that will require major revisions to the Certified EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects; and (3) Does not contain new information of substantial importance that was not known and could not have been known with the exercise of reasonable diligence at the time the Certified EIR was certified/adopted, that shows any of the following:
(a) The project will have one or more significant effects not discussed in the Certified EIR; or
(b) Significant effects previously examined will be substantially more severe than shown in the Certified EIR; or
(c) Mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more significant effects of the Project, but the Town declined to adopt such measures; or (d) Mitigation measures or alternatives considerably different from those analyzed in the Certified EIR would substantially reduce one or more significant effects on the environment, but which the Town declined to adopt.

SECTION 8. Notice of Adoption. The Town Clerk of the Town of Apple Valley shall certify to the adoption of this Ordinance and cause publication to occur in a newspaper of general circulation and published and circulated in the Town in a manner permitted under Section 36933 of the Government Code of the State of California.

SECTION 9. Effective Date. This Ordinance shall take effect thirty (30) days after its adoption.

SECTION 10. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase of this Ordinance, or any part thereof, is for any reason held to be unconstitutional, such decision shall not affect the validity of the remaining portion of this Ordinance or any part thereof. The Town Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsection, subdivision, paragraph, sentence, clause or phrase be declared unconstitutional. If for

Ordinance No. 579
any reason any portion of this ordinance is found to be invalid by a court of competent jurisdiction, the balance of this ordinance shall not be affected.

SECTION 11. Notice of Determination. The Town Council hereby directs staff to prepare, execute, and file with the San Bernardino County Clerk a notice of determination within five (5) working days of the adoption of this Ordinance.

APPROVED and ADOPTED by the Town Council of the Town of Apple Valley and signed by the Mayor and attested by the Town Clerk this 8th day of September 2026. ____________________________
Scott Nassif, Mayor
Attest:
______________________________
Kiel E. Mangerino, Acting Town Clerk
Approved as to Form: Approved as to Content:
__________________________ _____________________________ Thomas A. Rice, Town Attorney Guy Eisenbrey, Town Manager

Town Council Agenda Report
Date: August 25, 2026
To: Honorable Mayor and Town Council
Subject: CLOSED SESSION
From: Guy Eisenbrey, Town Manager
Submitted by: Thomas Rice, Town Attorney
Budgeted Item: Yes No N/A
A. PUBLIC EMPLOYEE PERFORMANCE EVALUATION (120 DAY)
Title: Town Manager