ensure that approval of the Project will not result in a net loss of residential housing capacity; and
WHEREAS, the Project will provide jobs and industry in the City; and WHEREAS, the Project will provide a community benefit to the residents of the City; and
WHEREAS, the Developer is not requesting from the City, nor is the City providing, any form of financial assistance to locate, develop, construct and/or operate the Project in the City of Banning, and Developer agrees to comply with all conditions of approval; and
WHEREAS, to strengthen the public planning process, encourage private participation in comprehensive planning and reduce the economic risk of development, the Legislature of the State of California adopted Sections 65864 et seq. of the California Government Code, (the “Development Agreement Statute”) which authorizes cities to enter into property development agreements with any person(s) or entity(ies) having a legal or equitable interest in real property for the development of such real property in order to establish certain development rights in the real property; and WHEREAS, the Development Agreement is intended to provide assurances to Developer that an approved Project may proceed subject to the specified policies, rules, regulations, and conditions of approval applicable to the Project at the time of approval as specifically provided in the Development Agreement, regardless of any changes to City policies, rules, and regulations after project approval; and WHEREAS, the Development Agreement is intended to eliminate uncertainty in planning for and securing orderly development and occupancy of the Property, assure installation of necessary improvements, and ensure attainment of the maximum effective utilization of resources within the City at the least economic cost to its citizens; and WHEREAS, in compliance with Government Code Section 65854, the City Planning Commission provided notice and the City Planning Commission held a duly noticed public hearing on the Project at a special meeting on September 25, 2025, further considered the Project at a separately noticed continuation of such meeting on November 5, 2025 and at a continuation of that meeting to a special meeting on November 17, 2025 voted 3 in support and 2 opposed, passing a resolution recommending the City Council deny the Project applications. At the same special meeting, the Planning Commission voted 5 in support and none opposed, passing a resolution recommending the City Council deny the MSJC Entitlements; and
WHEREAS, the City prepared the Final EIR, including the Draft EIR (collectively, the “FEIR”) and, pursuant to Public Resources Code section 21092.5, the City provided copies of the FEIR to all commenting agencies and persons requesting copies of the responses; and
1106
Ordinance No. 1620
March 10, 2026
WHEREAS, at the January 28, 2026, special meeting, the City Council of the City of Banning (the “City Council”) held a public hearing, commenced deliberation and voted five in favor and none opposed to continue deliberation of the matter at a special meeting on February 26, 2026; and
WHEREAS, at the on February 26, 2026, special meeting, the City Council voted unanimously 5-0 to continue the item to a regular meeting date of March 10, 2026; and WHEREAS, based on the foregoing recitals, City has determined that the Development Agreement is appropriate under the Development Agreement Statute and Chapter 17.60 of the Banning Municipal Code and consistent with the policies and programs of the City of Banning General Plan, any applicable specific plan and the zoning ordinances; and
WHEREAS, the Development Agreement is voluntarily entered into in consideration of the benefits to and the rights created in favor of each of the parties hereto and in reliance upon the various representations and warranties contained herein; and WHEREAS, the City, as “Lead Agency” under the California Environmental Quality Act (“CEQA”) and the CEQA Guidelines, has concurrently with adoption of this Ordinance pursuant to adoption of Resolution 2026-28, certified the FEIR as supplemented by the Supplemental CEQA Memorandum dated October 23, 2025, to address revisions to the Project and the Sunset Crossroads Project—Modified Project V2.1 Trip Generation Assessment dated February 20, 2026 to address further reductions in Project industrial square footage and related traffic impacts, each prepared by Urban Crossroads, Inc. (collectively “Supplemental CEQA Memoranda”) and adopted Findings and Statement of Overriding Consideration and a Mitigation Monitoring and Reporting Program and determined that the FEIR as so supplemented sufficiently analyzes both the feasible Mitigation Measures necessary to avoid or substantially lessen the Project's potential environmental impacts and a range of feasible alternatives capable of eliminating or reducing these effects while feasibly attaining most of the basic objectives of the Project in accordance with CEQA and the State CEQA Guidelines and has determined that the “Project,” as more fully described in the Development Agreement, has been fully analyzed per CEQA under the FEIR and all other legal prerequisites to the adoption of this Ordinance have occurred.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF BANNING DOES ORDAIN AS FOLLOWS:
SECTION 1. RECITALS
That the above Recitals are true and correct and are incorporated as though fully set forth herein.
SECTION 2. APPROVAL OF DEVELOPMENT AGREEMENT
1107
Ordinance No. 1620
March 10, 2026
That the City Council hereby approves the Development Agreement by and between the City of Banning and NP BANNING INDUSTRIAL, LLC A Missouri Limited Liability Company (“Development Agreement”), a copy of which is attached hereto as Exhibit B and incorporated herein by this reference, subject to the terms and conditions stated therein.
SECTION 3. SEVERABILITY
The City Council declares that, should any provision, section, paragraph, sentence or word of this Ordinance be rendered or declared invalid by any final action in a court of competent jurisdiction or by reason of any preemptive legislation, the remaining provisions, sections, paragraphs, sentences or words of this Ordinance as hereby adopted shall remain in full force and effect.
SECTION 4. EFFECTIVE DATE OF ORDINANCE
That this Ordinance shall take effect thirty (30) days after its second reading by the City Council.
SECTION 5. EFFECTIVE DATE OF DEVELOPMENT AGREEMENT
The Development Agreement shall not be executed by the City until on or after the effective date of the Ordinance.
SECTION 6. RECORDATION OF DEVELOPMENT AGREEMENT
The City Clerk is hereby directed to record the fully executed Development Agreement with the Riverside County Recorder no later than ten (10) days after its execution. 1108
Ordinance No. 1620
March 10, 2026
SECTION 7. CERTIFICATION
The City Clerk is directed to certify the passage and adoption of this Ordinance; cause it to be entered into the City of Banning’s book of original ordinances; make a note of the passage and adoption in the records of this meeting; and, within fifteen (15) days after the passage and adoption of this Ordinance, cause it to be published or posted in accordance with California law.
INTRODUCED AND READ for the first time and ordered posted at a special meeting of the City Council of the City of Banning, California, held on the 10th day of March 2026, by the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
PASSED, APPROVED, AND ADOPTED at a regular meeting of the City Council of the City of Banning, California, held on the 24th day of March 2026, by the following roll call vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
Richard Royce, Mayor
City of Banning
ATTEST:
Sandra Calderon, Deputy City Clerk
City of Banning
APPROVED AS TO FORM:
John Pinkney, City Attorney
Slovak, Baron, Empey, Murphy & Pinkney, LLP
1109
Ordinance No. 1620
March 10, 2026
CERTIFICATION:
I, Sandra Calderon, Deputy City Clerk of the City of Banning, California, do hereby certify that Ordinance No. 1620 was duly introduced at a special meeting of the City Council of the City of Banning, held on the 10th day of February, 2026, and was duly adopted at a regular meeting of said City Council on the 24th day of March, 2026, by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
Sandra Calderon, Deputy City Clerk
City of Banning
1110
EXHIBIT A
Legal Description
LEGAL DESCRIPTION OF THE NORTHERN PORTION OF THE PROPERTY AND
THE SLB EXTENSION
PARCEL A:
PARCELS 1 THROUGH 4, INCLUSIVE OF MAPS AND LETTERED LOTS A THROUGH J, INCLUSIVE, OF PARCEL MAP NO. 25541, IN THE CITY OF BANNING, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ON FILE IN BOOK 166 PAGES 27 THROUGH 35, INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE
COUNTY, CALIFORNIA
LEGAL DESCRIPTION OF THE SOUTHERN PORTION OF THE PROPERTY PARCEL B:
PARCELS 1 THROUGH 9 AND LETTERED LOTS "A" THROUGH "O", ALL INCLUSIVE OF PARCEL MAP 28971, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 198 PAGES 8 THROUGH 10
INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM PARCELS 3 AND 7, THOSE PORTIONS
CONVEYED TO THE CITY OF BANNING BY A DEED RECORDED JANUARY 15, 1998 AS INSTRUMENT NO. 015506 OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
ALSO EXCEPTING THEREFROM PARCEL 3 ALL THAT PORTION CONVEYED TO THE CITY OF BANNING BY A DEED RECORDED MARCH 22, 2002 AS INSTRUMENT NO. 2002-146041.
PARCEL C:
PARCELS 1 AND 2 AND LETTERED LOTS A, B, AND C OF PARCEL MAP 13521, IN THE COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 83, PAGES 13 THROUGH 15, INCLUSIVE OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM THOSE PORTIONS CONVEYED TO THE CITY OF BANNING, A MUNICIPAL CORPORATION, BY DEED RECORDED JANUARY 15, 1998, AS INSTRUMENT NO. 98-015506, OFFICIAL RECORDS.
1111
EXHIBIT B
Development Agreement
1112
4861-3845-1024.132
390086.00004/3-4-26/jcc/kp
RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL
TO:
CITY OF BANNING
99 EAST RAMSEY STREET
BANNING, CA 92220
ATTN: CITY CLERK
SPACE ABOVE THIS LINE FOR RECORDER’S USE
EXEMPT FROM RECORDING FEE PER GOVERNMENT CODE SECTION 6103 1113
4861-3845-1024.132
390086.00004/3-4-26/jcc/kp
DEVELOPMENT AGREEMENT
NO. ___
A DEVELOPMENT AGREEMENT BETWEEN
CITY OF BANNING
AND
NP BANNING INDUSTRIAL, LLC
1114
TABLE OF CONTENTS
Page
(i)
1. DEFINITIONS AND EXHIBITS.....................................................................................5
1.1 Definitions.............................................................................................................5
1.2 Exhibits...............................................................................................................13
2. GENERAL PROVISIONS .............................................................................................14
2.1 Binding Effect of Agreement..............................................................................14
2.2 Ownership of Property........................................................................................14
2.3 Term....................................................................................................................14
2.4 Transfer...............................................................................................................15
2.5 Amendment or Cancellation of Agreement ........................................................16
2.6 Termination.........................................................................................................17
2.7 Notices ................................................................................................................18
2.8 Estoppel Certificate.............................................................................................19
3. DEVELOPMENT OF THE PROPERTY.......................................................................20
3.1 Vested Rights to Develop ...................................................................................20
3.2 Effect of Agreement on Land Use Regulations..................................................20
3.3 Reservations of Authority...................................................................................21
3.4 Subsequent Development Review ......................................................................22
3.5 Timing and Phasing of Development .................................................................24
3.6 Changes and Amendments..................................................................................25
3.7 Regulation by Outside Agencies.........................................................................26
3.8 Public Works.......................................................................................................26
3.9 Provision of Real Property Interests by City ......................................................26
3.10 City Covenants....................................................................................................27
3.11 Retail Development Obligations.........................................................................28
3.12 Planning Area 2...................................................................................................28
3.13 Planning Area 4 Buffer.......................................................................................29
3.14 Modifications to the Project to Decrease Environmental Impacts......................29
4. ANNEXATION ..............................................................................................................30
4.1 Contemplated LAFCO Action ............................................................................30
4.2 Contemplated Action ..........................................................................................30
4.3 Cooperation of City.............................................................................................30
4.4 Development of Annexed Property ....................................................................30
5. PUBLIC BENEFITS, PUBLIC IMPROVEMENTS, AND DEVELOPMENT IMPACT FEES ...............................................................................................................30
5.1 Intent ...................................................................................................................30 1115
(ii)
5.2 Public Benefit Fee...............................................................................................31
5.3 Owner Required Public Improvements...............................................................31
5.4 Sun Lakes Boulevard Extension .........................................................................32
5.6 Sunset Avenue Improvements............................................................................35
5.7 Payment of “Fair Share” Share of Certain Roadway Improvements..................36
5.8 Land Reservation, Conveyance, and Dedication ................................................36
5.9 Electrical Substation ...........................................................................................37
5.10 Additional Public Benefits..................................................................................40
5.11 Development Fees...............................................................................................42
5.12 Fair Share Payments; Oversized Improvements; Fee Credits.............................43
5.13 Limits on Public Funds.......................................................................................44
6. FINANCING OF PUBLIC IMPROVEMENTS.............................................................44
6.1 Intent ...................................................................................................................44
6.2 Formation of Community Facilities Districts.....................................................44
6.3 City Council Approval........................................................................................45
6.4 City’s Reimbursement to Owner ........................................................................45
7. REVIEW FOR COMPLIANCE .....................................................................................46
7.1 Annual Review....................................................................................................46
7.2 Procedure ............................................................................................................46
7.3 Proceedings Upon Modification or Termination ................................................46
7.4 Hearing on Modification or Termination............................................................47
7.5 Certificate of Agreement Compliance ................................................................47
8. DEFAULT AND REMEDIES........................................................................................47
8.1 Remedies in General...........................................................................................47
8.2 Specific Performance ..........................................................................................48
8.3 General Release ..................................................................................................49
8.4 Termination or Modification of Agreement for Default of Owner.....................49
8.5 Termination of Agreement for Default of City...................................................49
8.6 Attorneys’ Fees...................................................................................................50
9. THIRD PARTY LITIGATION ......................................................................................50
10. MORTGAGEE PROTECTION .....................................................................................51
11. MISCELLANEOUS PROVISIONS...............................................................................52
11.1 Recordation of Agreement..................................................................................52
11.2 Entire Agreement................................................................................................53
11.3 Severability .........................................................................................................53
11.4 Preemption or Frustration of Agreement by Changes in Law ............................53
11.5 RESERVED........................................................................................................53 1116
(iii)
11.6 Interpretation and Governing Law......................................................................53
11.7 Operating Memoranda ........................................................................................54
11.8 Section Headings ................................................................................................54
11.9 Gender and Number............................................................................................54
11.10 Rule Against Perpetuities....................................................................................54
11.11 Time of Essence..................................................................................................54
11.12 Waiver.................................................................................................................54
11.13 No Third-Party Beneficiaries..............................................................................55
11.14 Mutual Covenants...............................................................................................55
11.15 Successors in Interest..........................................................................................55
11.16 Counterparts........................................................................................................55
11.17 Jurisdiction and Venue........................................................................................55
11.18 Project as a Private Undertaking.........................................................................55
11.19 Further Actions and Instruments.........................................................................55
11.20 Eminent Domain .................................................................................................56
11.21 Agent for Service of Process...............................................................................56
11.22 Designation of City Officials..............................................................................56
11.23 Legally Binding Contract; Enforceability...........................................................56
11.24 Authority to Execute ...........................................................................................56
1. DEFINITIONS AND EXHIBITS.....................................................................................5
1.1 Definitions.............................................................................................................5
1.2 Exhibits...............................................................................................................13
2. GENERAL PROVISIONS .............................................................................................14
2.1 Binding Effect of Agreement..............................................................................14
2.2 Ownership of Property........................................................................................14
2.3 Term....................................................................................................................14
2.4 Transfer...............................................................................................................16
2.5 Amendment or Cancellation of Agreement ........................................................16
2.6 Termination.........................................................................................................17
2.7 Notices ................................................................................................................17
2.8 Estoppel Certificate.............................................................................................19
3. DEVELOPMENT OF THE PROPERTY.......................................................................19
3.1 Vested Rights to Develop ...................................................................................19
3.2 Effect of Agreement on Land Use Regulations..................................................20
3.3 Reservations of Authority...................................................................................20
3.4 Subsequent Development Review ......................................................................22
3.5 Timing and Phasing of Development .................................................................23
3.6 Changes and Amendments..................................................................................25
3.7 Regulation by Outside Agencies.........................................................................25
3.8 Public Works.......................................................................................................26 1117
(iv)
3.9 Provision of Real Property Interests by City ......................................................26
3.10 City Covenants....................................................................................................26
3.11 Retail Development Obligations.........................................................................27
3.12 Planning Area 2...................................................................................................28
3.13 Planning Area 4 Buffer.......................................................................................28
4. ANNEXATION ..............................................................................................................28
4.1 Contemplated LAFCO Action ............................................................................28
4.2 Contemplated Action ..........................................................................................28
4.3 Cooperation of City.............................................................................................29
4.4 Development of Annexed Property ....................................................................29
5. PUBLIC BENEFITS, PUBLIC IMPROVEMENTS, AND DEVELOPMENT IMPACT FEES ...............................................................................................................29
5.1 Intent ...................................................................................................................29
5.2 Public Benefit Fee...............................................................................................29
5.3 Public Improvements..........................................................................................30
5.4 Sun Lakes Boulevard Extension .........................................................................30
5.6 Sunset Avenue Improvements............................................................................33
5.7 Payment of “Fair Share” Share of Roadway Improvements ..............................33
5.8 Land Reservation, Conveyance, and Dedication ................................................34
5.9 Electrical Substation ...........................................................................................35
5.10 Additional Public Benefits..................................................................................37
5.11 Development Fees...............................................................................................39
5.12 Fair Share Payments; Oversized Improvements; Fee Credits.............................39
5.13 Limits on Public Funds.......................................................................................40
6. FINANCING OF PUBLIC IMPROVEMENTS.............................................................40
6.1 Intent ...................................................................................................................40
6.2 Formation of Community Facilities Districts.....................................................40
6.3 City Council Approval........................................................................................41
6.4 City’s Reimbursement to Owner ........................................................................42
6.5 Accounting of Revenue.......................................................................................42
6.6 Legal Challenge ..................................................................................................42
7. REVIEW FOR COMPLIANCE .....................................................................................42
7.1 Annual Review....................................................................................................42
7.2 Procedure ............................................................................................................43
7.3 Proceedings Upon Modification or Termination ................................................43
7.4 Hearing on Modification or Termination............................................................43
7.5 Certificate of Agreement Compliance ................................................................44 1118
(v)
8. DEFAULT AND REMEDIES........................................................................................44
8.1 Remedies in General...........................................................................................44
8.2 Specific Performance ..........................................................................................45
8.3 General Release ..................................................................................................45
8.4 Termination or Modification of Agreement for Default of Owner.....................46
8.5 Termination of Agreement for Default of City...................................................46
8.6 Attorneys’ Fees...................................................................................................46
9. THIRD PARTY LITIGATION ......................................................................................46
10. MORTGAGEE PROTECTION .....................................................................................48
11. MISCELLANEOUS PROVISIONS...............................................................................49
11.1 Recordation of Agreement..................................................................................49
11.2 Entire Agreement................................................................................................49
11.3 Severability .........................................................................................................49
11.4 Preemption or Frustration of Agreement by Changes in Law ............................49
11.5 Force Majeure .....................................................................................................50
11.6 Interpretation and Governing Law......................................................................50
11.7 Operating Memoranda ........................................................................................50
11.8 Section Headings ................................................................................................51
11.9 Gender and Number............................................................................................51
11.10 Rule Against Perpetuities....................................................................................51
11.11 Time of Essence..................................................................................................51
11.12 Waiver.................................................................................................................51
11.13 No Third-Party Beneficiaries..............................................................................51
11.14 Mutual Covenants...............................................................................................51
11.15 Successors in Interest..........................................................................................51
11.16 Counterparts........................................................................................................51
11.17 Jurisdiction and Venue........................................................................................51
11.18 Project as a Private Undertaking.........................................................................51
11.19 Further Actions and Instruments.........................................................................52
11.20 Eminent Domain .................................................................................................52
11.21 Agent for Service of Process...............................................................................52
11.22 Designation of City Officials..............................................................................52
11.23 Legally Binding Contract; Enforceability...........................................................52
11.24 Authority to Execute ...........................................................................................53 1119
(vi)
EXHIBIT LIST
EXHIBIT “A-1” - LEGAL DESCRIPTION OF THE NORTHERN PORTION OF THE
PROPERTY AND THE SLB EXTENSION
EXHIBIT “A-2” - LEGAL DESCRIPTION OF THE SOUTHERN PORTION OF THE
PROPERTY
EXHIBIT “B” - MAP SHOWING PROPERTY AND ITS LOCATION
EXHIBIT “C” - EXISTING DEVELOPMENT APPROVALS
EXHIBIT “D” - EXISTING LAND USE REGULATIONS
EXHIBIT “E-1” - INITIAL PHASING PLAN
EXHIBIT “F” - PUBLIC IMPROVEMENTS
EXHIBIT “G-1” MODIFICATIONS TO PROJECTINTENTIONALLY OMITTED EXHIBIT “G-2” DIF CREDIT AND REIMBURSEMENT AGREEMENT
EXHIBIT “H” - DEVELOPMENT FEES IN EFFECT AS OF EFFECTIVE DATE EXHIBIT “I” - FAIR SHARE PAYMENTS
1120
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DEVELOPMENT AGREEMENT NO. __________
This Development Agreement (hereinafter “Agreement”) is entered into as of the Effective Date by and among the CITY OF BANNING (hereinafter “City”), and NP BANNING INDUSTRIAL, LLC, a Missouri limited liability company (hereinafter “Owner”). City and Owner are, collectively, the “Parties,” and individually, a “Party”. Initially capitalized terms used in this Agreement shall have the meanings set forth in Section 1.1 below.
RECITALS
1. City 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 Article 11, Section 7 of the California Constitution and Section 65864, et seq. (“Development Agreement Law”) of the California Government Code (“Government Code”).
2. City has adopted Procedures and Requirements of the City of Banning For the Consideration of Development Agreements (“Procedures and Requirements”), pursuant to Section 65865 of the Government Code.
3. Owner is the owner of real property comprised of approximately 533.8 acres of land. The Property is divided for purposes of this Agreement into the northerly portion, comprising approximately 280.1 acres (“Northern Portion of the Property”) located in the City, an additional approximately 8.52 acres of real property owned by Owner but subject to a public right of way easement in favor of the City for the future extension of Sun Lakes Boulevard (“SLB Extension”) and the southerly portion, comprising approximately 253.7 acres (“Southern Portion of the Property”), located in unincorporated Riverside County (“County”) within the Sphere of Influence of the City (“SOI”). The SLB Extension is subject to this Agreement but is not addressed by the Specific Plan. The Northern Portion of the Property, the SLB Extension, and the Southern Portion of the Property are collectively referred to herein as the “Property”. The Northern Portion of the Property and the SLB Extension is described in Exhibit “A-1” to this Agreement, the Southern Portion of the Property is described in Exhibit “A-2” to this Agreement, and the Property is depicted in Exhibit “B” to this Agreement.
4. Owner has filed, or will be filing, and is seeking the approval of an annexation application pertaining to the Southern Portion of the Property (“Annexation Application”) through the Local Agency Formation Commission for Riverside County (“LAFCO”) pursuant to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, Government Code Section 56000 et seq. LAFCO is processing the Annexation Application concurrently with City’s consideration of this Agreement and various land use entitlements detailed below.
5. The Parties acknowledge and agree that this Agreement shall be operative on the Northern Portion of the Property and the SLB Extension upon the Effective Date, and as established under the Development Agreement Law, this Agreement shall be operative on the Southern Portion of the Property upon approval of the Annexation Application.
6. Owner is proposing to develop and facilitate the future development on the Property of a project currently titled Sunset Crossroads, which is intended to include upcommercial and industrial uses, including, but not limited to 223,753: (a) up to 268,400 square feet of commercial 1121
-2-
uses, and anincluding Travel Center Retail Uses, a Fueling Facility and a hotel with approximately 125 room hotel rooms comprised of approximately 90,000 square feet in a 48.3-acre area on the Northern Portion of the Property; (b) up to 4,7495,545,000 square feet of industrial land uses within a 396.5-acre portion of the Property; (c) related signage; (d) andapproximately 65.4 acres of land designated for Open Space-Resources, (52.8 acres), and Open Space-Parks; and (e) (approximately 5 acres); and approximately 23.6 acres of internal circulation features, all as further set forth in the Specific Plan as modified by this Agreement.
7. Owner has initiated an application to City for this Agreement, and certain related land use entitlements and development rights (collectively, “Existing Development Approvals”, and listed in Exhibit “C” to this Agreement), which were approved by City, specifically: (a) a General Plan Amendment, designated (GPA 20-2501) by City, changing the General Plan land use designation of the Property to the land uses identified on the General Plan Land Use Map attached as Exhibit “B” (“GPA”), (b) a Specific Plan (designated SP 20-2002) , by City, (c) a Zone Change (designated ZC 20-3502), (d) a tentative parcel map (designated TPM 38118), (e) a Tax Sharing and Reimbursement Agreement and (f) an Environmental Impact Report (designated EA 20-1506) by City, inclusive of the EIR, incorporating a mitigation monitoring and reporting program (“MMRP”) and conforming to the specifications of the California Environmental Quality Act California Public Resources Code § 21000 et seq., and the CEQA guidelines, Title 14 of the California Code of Regulations, chapter 3, § 15000 et seq. (collectively, “CEQA”).
8. Owner has requested City to enter into a development agreement and proceedings have been taken in accordance with the Procedures and Requirements of City.
9. By electing to enter into this Agreement, City shall bind current and future Councils of City (“City Council”) by the obligations specified herein and limit the future exercise of certain governmental and proprietary powers of City.
10. The terms and conditions of this Agreement have undergone extensive review by City and the City Council and have been found to be fair, just, and reasonable.
11. The best interests of the citizens of the City and the public health, safety and welfare will be served by entering into this Agreement.
12. All of the procedures of CEQA have been met with respect to the Project and the Agreement.
13. This Agreement and the Project are consistent with the City General Plan, the City of Banning Municipal Code and the Specific Planany specific plan applicable thereto.
14. All actions taken, and approvals given by City have been duly taken or approved in accordance with all applicable legal requirements for notice, public hearings, findings, votes, and other procedural matters; and
15. This Agreement will confer substantial private benefits on Owner by granting vested rights to develop the Property in accordance with the provisions of this Agreement. 1122
-3-
16. City has determined that development of the Property in accordance with this Agreement and Owner’s participation in the implementation of the Specific Plan and provision of the Public Improvements will result in a number of public benefits will provide substantial benefits to City and will further important policies and goals of the City.
17. 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 (“Development Agreement Law”) are intended.
18. 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.
19. The development of the Project and the Public Improvements and other Public Benefits require a substantial early investment of money and planning and design effort by Owner.
Without the protection provided by this Agreement, uncertainty that the Project may be completed in its entirety could result in a waste of public resources, escalate the cost of public improvements, and discourage Owner’s provision of the Public Benefits specified in this Agreement. Owner’s participation in the implementation of Project will result in a number of public benefits. These benefits require the cooperation and participation of City and Owner and could not be secured without mutual cooperation in and commitment to the comprehensive planning effort that has resulted in the Specific Plan and other development approvals adopted concurrently with this Agreement.
20. Owner wishes to avoid certain development risks and uncertainties that would, in the absence of this Agreement, deter and discourage Owner from making a commitment to implement the Project. The following assurances are of vital concern to Owner to offset or remove the disincentives and uncertainties:
a. Assurance to Owner that, in return for Owner’s commitment to the development of the Property, City will in turn remain committed to development of the Project in accordance with the Development Plan and the terms of this Agreement and subject to the Reservations of Authority.
b. Assurances to Owner that as Owner becomes obligated for the costs of designing and constructing the public and private improvements described in the Project Approvals, and to make dedications, Owner will become entitled to rely upon the vested rights conferred by this Agreement in the development of the Property; and c. Assurances to Owner that in City’s administration of the Development Plan, Owner will be allowed, consistent with the Specific Plan, to develop the types and intensities of use identified in the Specific Plan.
21. The Parties agree that the consideration to be received by City pursuant to this Agreement and the rights secured to Owner hereunder constitute sufficient consideration to support the mutual and respective covenants and agreements of the Parties. By entering into this 1123
-4-
Agreement, City desires to vest in Owner certain rights and approvals as specified in this Agreement.
22. This Agreement provides assurances that the public benefits identified below will be achieved in accordance with the terms of this Agreement. Developer is willing, pursuant to the terms of this Agreement, to make expenditures and provide benefits to the City including, without limitation, construction of improvements in a manner that benefits a wider area, and mitigates impacts resulting in part from certain existing conditions and cumulative development in addition to those impacts caused by the Project, thus conferring a public benefit on the City. The Project will provide local and regional public benefits to the City, including, without limitation:
a. Increased real property taxes, sales taxes, transit occupancy taxes and other revenues to the City.
b. Provision of public facilities, including the construction of the Sunset Avenue Improvements. The Sunset Avenue Improvements are depicted in Exhibit “F”. c. Provision of a Public Benefit Fee, an Accelerated Transportation DIF Payment to facilitate the construction of the SLB Extension, and a Service Special Tax. d. Provision of $3 million of the Public Benefit Fee, regardless of whether the Project is developed.
d.e. Provision of funding for a Banning Electric Utility Substation. e.f. Provision of $1615,000,000 for a possible future fire station to be considered by the City pursuant to Section 5.10.4.
f.g. Provision of $1,000,000 for a new fire ladder truck or other fire suppression equipment.
g.h. Provision of $750,000 for City downtown beautification/small business assistance.
i. Provision of $500,000 for a City animal shelter.
h.j. Dedication of property to the City as a site for a possible future fire station, a water tank, electrical substation and a reverse osmosis facility. i.k. Establishment of a job fair to benefit City residents, and a requirement that all leases include language requiring lessees to provide two weeks’ advance notice to City residents when new lessees are hiring employees.
j.l. Setting aside approximately 53 acres for Open Space Resource Land and approximately 5 acres for parks and recreational facilities (“Park”). k.m. Construction of the Park facilities, as specified in the Specific Plan (“Specific Plan Park Facilities”) and maintenance of the Park. 1124
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l.n. Provision of both construction jobs and permanent jobs. m.o. Provision of approximately $71,000,000 in City Development Impact Fees (“DIF”), TUMF and MSHCP impact fees and school fees, before the DIF transportation reduction specified herein.
n.p. Modifications to the Project analyzed in the EIR that are consistent with the Specific Plan to provide further buffer to certain nearby residential properties.
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 unless another meaning is clearly intended in the context in which it appears:
“Accelerated Transportation DIF Payment” has the meaning set forth in Section 5.5.1. “Additional Park Facilities” has the meaning set forth in Section 5.10.3. “Agreement” means this Development Agreement.
“Annexation” has the meaning set forth in Section 4.1.
“Annexation Application” has the meaning set forth in Recital 4. “Annexation Date” has the meaning set forth in Section 2.3.1. “Annexation Deadline” has the meaning set forth in Section 2.3.1 “Annual Escalation Factor” has the meaning set forth in Section 6.2.2(c). “Authorized Facilities and Fees” means facilities authorized under the Mello-Roos Act including, without exception, public streets and other related improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, water facilities, storm drain facilities, sewer facilities, public parks, open space and landscaping, electrical facilities, any fees (cash contribution) paid by Owner pursuant to the Project’s conditions of approval or this Agreement or which is included in any City capital improvement fee program, to finance public facilities to be constructed and owned by City, subject to credit against the corresponding fee.
“Authorized Services” has the meaning set forth in Section 6.2.1. “Banning Electric Final Contribution” has the meaning set forth in Section 5.9.3. 1125
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“Banning Electric Initial Contribution” has the meaning set forth in Section 5.9.1. “Base Year” means the Fiscal Year prior to the effective date of the ordinance approving this Agreement.
“Benefitted Properties” has the meaning set forth in Section 5.12.1 “CEQA” means the California Environmental Quality Act.
“CFD” means a community facilities district formed pursuant to the Mello-Roos Act by the City as described in section 6.2.1.
“CFD Bonds” means one or more series of bonds (including refunding bonds) issued by the CFD secured by the levy of special taxes levied against taxable parcels within the boundaries of the Property, the proceeds of which reimburse the Owner for Authorized Facilities and Fees.
“Certificate” has the meaning set forth in Section 7.5. “City” means the City of Banning, a political subdivision of the State of California. “City Council” means the current and future councils of City. “City Expenditures” has the meaning set forth in Section 2.6. “City Grant” has the meaning set forth in Section 5.9.6. “City Manager” means the current and future city manager for the City. “City Ordinance” means the Ordinance adopted by the City Council approving this Agreement.
“City Substation Payment” has the meaning set forth in Section 5.9.3. “Conveyance Documents” has the meaning set forth in Section 5.9.3(a). “County” means County of Riverside.
“CSCDA” has the meaning set forth in Section 6.2.1.
“Default” has the meaning set forth in Section 8.4.
“Design Review” has the meaning set forth in the Specific Plan. “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. When authorized by a Subsequent Development 1126
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Approval as provided by this Agreement, “development” includes the maintenance, repair, reconstruction, or redevelopment of any building, structure, improvement, or facility after the construction and completion thereof.
“Development Agreement Law” as defined in Section 7 of the California Constitution and Section 65864, et seq. of the Government Code.
“Development Approvals” means all discretionary and ministerial permits and other entitlements authorizing the development and use of the Project and which have been requested by Owner and approved by the City including, but not limited to the Existing Development Approvals and the following and any amendments thereto:
(1) General Plan Amendments
(2) Specific Plan
(3) Zoning Code Amendments
(4) Sign Program
(5) Tentative and Final Subdivision and Parcel Maps
(6) Lot line adjustments
(7) Minor Modifications to Specific Plan
(8) Variances
(9) Conditional use permits
(10) Design Review approvals
(11) Reimbursement Agreement
(12) DIF Credit and Reimbursement Agreement
(13) Grading and building permits
(14) Electrical and Misc. Permits
(15) Sign Permits
(16) Occupancy Permits
(17) Tenant Permits
“Development Exactions” means any requirement of City 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 Development Fees in 1127
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order to lessen, offset, mitigate or compensate for the impacts of development on the environment or other public interests.
“Development Fees” or “DIF” means any monetary exactions, other than Processing Fees, charged by City or local agencies under City’s control to applicants in connection with approval of development projects for the purpose of defraying all or a portion of the cost of public improvements, public services or community amenities related to the Project or the Property.
“Development Limitation” has the meaning set forth in Section 2.3.2. “Development Plan” means the Existing Development Approvals and the Existing Land Use Regulations applicable to development of the Property. “DIF Vesting” has the meaning set forth in Section 5.11. “DIF Vesting End Date” has the meaning set forth in Section 5.11. “Economic Downturn” has the meaning set forth in Section 2.3.2(e). “Effective Date” means the later of (i) the date the City Ordinance approving this Agreement becomes effective; or (ii) the date the Agreement is recorded in the County Recorder’s Office.
“Engineer’s Estimate” has the meaning set forth in Section 5.9.2. “EIR” means Environmental Impact Report, State Clearinghouse No. 2021020011, addressing the impacts of the Project, certified by the City in accordance with the requirements of CEQA and includes, without limitation, the Draft EIR, the Final EIR and all technical appendices, as the EIR has been supplemented as described in City Resolution 2026-28 certifying the EIR.
“Electric DIF Obligation” has the meaning set forth in Section 5.9.3. “Electrical Property” has the meaning set forth in Section 5.8.3. “Existing Development Approvals” means all Development Approvals approved or issued prior to the Effective Date. Existing Development Approvals includes the list of Existing Development Approvals incorporated herein as Exhibit “C” and all other Development Approvals which are a matter of public record on the Effective Date or the finalization of which is contingent only upon this Development Agreement becoming effective. “Existing Land Use Regulations” means all Land Use Regulations in effect on the Effective Date and includes the Land Use Regulations incorporated herein as Exhibit “D” and all other Land Use Regulations which are a matter of public record on the Effective Date, as the same may have been modified or superseded pursuant to the Existing Development Approvals or this Agreement.
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“Fair Share” shall have the meaning set forth in Section 5.12.2. “Fire Equipment Payment” shall have the meaning set forth in Section 5.10.5. “Fire Station Payment” shall have the meaning set forth in Section 5.10.4. “Fire Station Property” shall have the meaning set forth in Section 5.8.1. “Fiscal Year” means the period beginning on July 1 of each year and ending on the next succeeding June 30.
“Fueling Facility” has the meaning set forth in the Specific Plan. “Government Code” means the California Government Code. “GPA” has the meaning set forth in the Recitals hereto. “Gross Tax Increment Revenue” shall mean, with respect to the Property, one hundred percent (100%) of the ad valorem tax revenue the City receives from the County with respect to the Incremental Assessed Property Value of the Property for any given Fiscal Year.
“Incremental Assessed Property Value” means, in any Fiscal Year, the difference between the assessed value of the Property and the assessed value of the Property in the Base Year, to the extent that the difference is a positive number. “Industrial Property” has the meaning set forth in Section 6.2.2(b). “Initial Phasing Plan” means the phasing plan set forth on Exhibit “E-1”. “LAFCO” means the Local Agency Formation Commission for Riverside County. “Land Use Regulations” means all ordinances, resolutions, codes, rules, regulations and official policies of City governing the development and use of land, including, without limitation, the permitted use of land, the density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings and structures, Development Exactions, 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 City ordinance, resolution, code, rule, regulation, or official policy, governing:
(1) The conduct of businesses, professions, and occupations; (2) Taxes and assessments;
(3) The control and abatement of nuisances;
(4) The granting of encroachment permits and the conveyance of rights and interests which provide for the use of or the entry upon public property; 1129
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(5) The exercise of the power of eminent domain.
“Maximum Reimbursement Payment” has the meaning set forth in Section 6.4. “MARA Agreement” has the meaning set forth in Section 5.4. “Mello-Roos Act” means the Mello-Roos Community Facilities Act of 1982 (Cal. Gov’t Code §§ 53311-53368), as amended from time to time.
“MMRP” means a mitigation monitoring and reporting program, as more fully described in the Recitals hereto.
“Mortgage” means any mortgage, deed of trust, sale and leaseback arrangement (in which the Property, or a portion thereof or an interest therein is sold by Owner and leased back concurrently therewith, which arrangement is subject to no prior contractual encumbrances securing payment of money), or other transaction in which the Property, or a portion thereof or an interest therein is pledged as security contracted in good faith and for fair value.
“Mortgagee” means the holder or beneficiary of any Mortgage covering all or part of the Property or any successor and assignee of any such Mortgage holder or beneficiary. “Non-DIF Sunset Improvements” has the meaning set forth in Section 5.6. “Northern Portion of the Property” has the meaning set forth in Recital 3. “Offsite Interests” has the meaning set forth in Section 3.9. “Operating Memoranda” has the meaning set forth in Section 11.7. “Outside Agencies” has the meaning set forth in Section 3.7. “Outside Agency” has the meaning set forth in Section 3.7. “Oversized Improvements” shall mean any Public Improvement with respect to which the Parties agree that Owner’s direct or indirect financial contribution exceeds the cost of the Improvement or portion thereof reasonably attributable to the Project or phase thereof, as depicted in Exhibit “F”.
“Owner” means the persons and entities listed as Owner on the first page of this Agreement and their successors in interest to all or any part of the Property. “Owner’s Costs” has the meaning set forth in Section 5.5.2(d)(iii). “Owner’s Deficit” has the meaning set forth in Section 5.5.2(d)(iii). “Owner’s Offset” has the meaning set forth in Section 5.5.2(d)(iii). “Owner’s Plan” has the meaning set forth in Section 5.5.2(b). 1130
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“Park” has the meaning set forth in Recital 22.l.
“Permitted Uses” has the meaning set forth in Section 3.4.3. “Phasing Plan” has the meaning set forth in Section 3.5.2. “Procedures and Requirements” means the Procedures and Requirements of the City of Banning For the Consideration of Development Agreements. “Processing Fees” has the meaning set forth in Section 3.3.1. “Project” means the development of the Property contemplated by the Development Plan as the same may be further defined, enhanced, or modified pursuant to the provisions of this Agreement.
“Property” means the real property described on Exhibits “A-1” and “A-2.” “Public Benefit Fee” has the meaning set forth in Section 5.2. “Public Benefits” means the Public Improvements constructed by Owner pursuant to this Agreement, including the Oversized Improvements (subject to the right of Owner for reimbursement and/or fee credit as described in this Agreement), the payment of Owner’s Fair Share of Public Improvements and the additional matters described as public benefits in Section 5.
“Public Improvements” has the meaning set forth in Section 5.3. “Public Maintenance and Access Easements” has the meaning set forth in Section 5.4. “Reduced Tolling Obligations” has the meaning set forth in Section 2.3. “Regulatory Change” has the meaning set forth in Section 3.2. “Retail Plan” has the meaning set forth in Section 3.11. “Retail Date” has the meaning set forth in Section 3.11. “Retail Threshold” has the meaning set forth in Section 3.11. “Reimbursement Payment” has the meaning set forth in Section 6.4. “RCA” means the Regional Conservation Authority.
“RCTC” means the Riverside County Transportation Commission. “RMA” has the meaning set forth in Section 6.2.2.
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“Reservations of Authority” means the rights and authority reserved to City under Section 3.6 of this Agreement and not a part of the assurances and rights provided to Owner under this Agreement.
“RO Property” has the meaning set forth in Section 5.8.4. “Sales Tax Revenue” means the City’s share of annual State sales tax revenue received from the State and/or County attributable to the Property. “Service Special Tax” has the meaning set forth in Section 6.2.2(b). “SLB Estimated Completion Date” has the meaning set forth in Section 5.5.2(a). “SLB Extension” has the meaning set forth in Recital 3, as depicted in Exhibit “F”. “SLB Extension Completion Date” has the meaning set forth in Section 5.5. “SOI” has the meaning set forth in Recital 3.
“Southern Portion of the Property” has the meaning set forth in Recital 3. “Specific Plan” means the Sunset Crossroads Specific Plan (Specific Plan No. 20- 20000002) as the same may be amended or modified from time to time consistent with the requirements of this Agreement.
“Specific Plan Park Facilities” has the meaning set forth in Recital 22.m. “Subsequent Installment” has the meaning set forth in Section 5.2.2. “Substation” has the meaning set forth in Section 5.9.1. “Substation Clearances” has the meaning set forth in Section 5.9.1. “Substation Costs” has the meaning set forth in Section 5.9.1. “Substation Excess Cost Documentation” has the meaning set forth in Section 5.9.3. “Substation Fair Share Percentage” has the meaning set forth in Section 5.9.3(b). “Substation Funding Date” has the meaning set forth in Section 5.9.3. “Substation Reimbursement” has the meaning set forth in Section 5.9.3(b) “Subdivision Map” means any parcel map or tract map approved by the City pursuant to the Subdivision Map Act, including without limitation Parcel Map No. _________. “Subdivision Map Act” means Government Code Section 66410, et seq. 1132
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“Subsequent Development Approvals” means all Development Approvals approved after the Effective Date in connection with development of the Property that are adopted in accordance with the Development Plan or in accordance with Subsequent Land Use Regulations adopted consistent with the requirements of this Agreement, including the Reservation of Authority, but specifically excluding the Existing Development Approvals. “Subsequent Land Use Regulations” means any Land Use Regulations adopted and effective after the Effective Date of this Agreement that are adopted in accordance with the Development Plan and the requirements of this Agreement, including the Reservation of Authority.
“Sunset Avenue Improvements” has the meaning set forth in Section 5.6, as depicted in Exhibit “F”.
“Term” has the meaning set forth in Section 2.3.1.
“Third Party Fair Share Payments” has the meaning set forth in Section 5.6. “Tolling Period” has the meaning set forth in Section 2.3. “Transfer” means sale, assignment, lease, sublease, or any other transfer of a legal or equitable interest in the Property.
“Travel Center Retail Uses” has the meaning set forth in the Specific Plan. “TUMF Agreement” has the meaning set forth in Section 5.5.2(d)(ii). “Water Tank Property” has the meaning set forth in Section 5.8.2. “WRCOG” means the Western Riverside Council of Governments.
1.2 Exhibits. The following documents are attached to, and by this reference made a part of, this Agreement:
Exhibit “A-1” Legal Description of the Northern Portion of the Property and the SLB Extension
Exhibit “A-2” Legal Description of the Southern Portion of the Property Exhibit “B” Map Showing Property and Its Location
Exhibit “C” Existing Development Approvals
Exhibit “D” Existing Land Use Regulations
Exhibit “E-1” Initial Phasing Plan
Exhibit “F” Public Improvements
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Exhibit “G-1” Modifications to ProjectIntentionally Omitted Exhibit “G-2” DIF Credit and Reimbursement Agreement
Exhibit “H” Development Fees in Effect as of Effective Date Exhibit “I” Fair Share Payments
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 shall be carried out only in accordance with the terms of this Agreement.
2.2 Ownership of Property. Each Owner represents and covenants that it is the owner of a legal or equitable interest in the Property or a portion thereof.
2.3 Term.
2.3.1 Commencement. For the Northern Portion of the Property and the SLB Extension, the term of this Agreement shall commence on the Effective Date. For the Southern Portion of the Property, this Agreement shall become operative on the recordation date of the LAFCO Certificate of Completion. (“Annexation Date”). This Agreement shall remain in effect for thirty (30) years from the Effective Date unless this term is modified or extended pursuant to the provisions of this Agreement (“Term”). The Annexation Date shall be no later than June 15, 2030 or such subsequent date as may be determined based upon intervening Development Limitations as that term is defined below in Section 2.3.2 or the Parties’ written agreement to extend this time period (“Annexation Deadline”). In the event that either the Annexation or another successor annexation effort relative to the Southern Portion of the Property is not complete by the Annexation Deadline, either Party may terminate this Agreement as a matter of right upon written notice to the other per Section 2.7 below. Notwithstanding the foregoing, the provisions of Sections 5.2, 5.4, 5.4.1, 5.5, 5.6 and 6.4 shall survive the expiration or the termination of this Agreement.
2.3.2 Extensions for Development Limitations. Notwithstanding the Parties’ expectation that there will be no limit or moratorium upon the Project’s development or the issuance of any Development Approvals, building or other development related permits (“Development Limitation”) during the Term, the Parties understand and agree that various third Parties may take action causing a de facto Development Limitation. Such third party actions include the filing of litigation challenging the City’s issuance of any Development Approval, including this Agreement and the following potential Development Limitations. Consequently, the Term, all Development Approvals and all obligations imposed pursuant to this Agreement shall be extended day for day for any delay caused byarising from or related to any of the following potential Development Limitations for a time equal to the duration of that delay occurring during the Term as further provided below:
(a) Changed conditions, changes in local, state or federal laws or regulations, floods, earthquakes, other Acts of God, fires, moratoria enacted by 1134
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governmental entities or agencies, including Owner’s inability to obtain any kind of utility service to serve the Project, litigation challenging this Agreement or any Development Approvals, injunctions issued by any court of competent jurisdiction applicable to this Agreement or the Development Approvals, acts of the public enemy, wars, riots or similar hostilities; epidemics, quarantine, pandemics or other nationalnation, state, or local mass medical emergencies, restrictions; freight embargoes, lack of transportation, unusually severe weather, inability to secure or delays in securing labor, fuels, materials, services or tools, delays due to the existence or remediation of hazardous materials, acts of God, riots, war or acts of terrorism;
(b) Strikes or other labor problems, or delays of any contractor, subcontractor or supplier;
(c) Any national, state, county or local state of emergency declared by a duly authorized public official;
(d) Any delays resulting from the unreasonable delay or failure of a governmental agency or entity, excludingincluding the City, to perform any act or to issue any permit or approval necessary for the Project where such delay or failure is beyond the reasonable control of the Owner and not caused by any act or omission of the Owner;
(e) Withdrawal of financing for the Project that is beyond the reasonable control of the Owner and not caused by any act or omission of Owner; or economic hardship of a nature that is not specific to the Owner but is reflective of a broad economic downturn or similar event or circumstance affecting the ability of the Owner to develop or lease the Project or any portion thereof (“Economic Downturn”).
(f) Other matters beyond the reasonable control of Owner.
Each Party shall promptly notify the other Party to this Agreement upon learning of any Development Limitation. If any Party to this Agreement is prevented (the filing of a lawsuit by a third party attacking this Agreement or the Development Approvals is deemed to prevent any Party from performing its obligations under this Agreement or the Development Approvals) by any Development Limitation from performing its obligations under this Agreement, then on the condition that the Party claiming a Development Limitation (i) did not cause said event(s) and (ii) said event(s) was beyond said Party’s reasonable control, the time for performance by said Party of the applicable obligations under this Agreement shall be extended day for day by a number of days equal to the number of days of that said Development Limitation continued in effect or by the number of days it takes to repair or restore the damage caused by the Development Limitation to the condition which existed prior to the occurrence, whichever is longer, or longer as the Parties may mutually agree (“Tolling Period”). Regarding the applicable time periods of Owner’s satisfaction of obligations under Sections 3.11 (Retail Development Obligations), 5.2.1 and 5.2.2 (Public Benefit Fee), 5.5.1 (Accelerated Transportation DIF Payment), 5.8.1 (Fire Station Property), 5.8.2 (Water Tank Property), 5.8.3 (Electrical Property), 5.8.4 (RO Property), 5.9.1 1135
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(Banning Electric Initial Contribution), 5.9.3(Substation Funding Date), 5.10.2 (Open Space Dedication), 5.10.3 (Park Dedication) 5.10.4 (initial Fire Station Payment), and 5.10.6 (City Grant) (collectively, “Reduced Tolling Obligations”), when such Development Limitation terminates, all of the Reduced Tolling Obligations’ respective time periods for satisfaction shall be extended only ten (10) business days after the Development Limitation terminates.
2.4 Transfer.
2.4.1 Right to Transfer. Owner shall have the right to transfer the Property in whole or in part (provided that no such partial transfer shall violate the Subdivision Map Act) to any person, partnership, joint venture, firm or corporation at any time during the term of this Agreement; provided, however, that any such, transfer 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 transfer of any right or interest under this Agreement shall be made unless made together with the transfer of all or a part of the Property. (b) Concurrent with any such transfer, or within thirty (30) days thereafter, Owner shall notify City, in writing, of such transfer and shall provide City with an executed agreement by the transferee providing therein that the transferee expressly and unconditionally assumes all the duties and obligations of Owner under this Agreement with respect to the portion of the Property so transferred.
(c) Notwithstanding the failure of any transferee to execute the agreement required by Paragraph (b) of this Subsection 2.4.1, the burdens of this Agreement shall be binding upon such transferee, but the benefits of this Agreement shall not inure to such transferee until and unless such agreement is executed.
2.4.2 Release of Transferring Owner.
(a) Notwithstanding any transfer, a transferring Owner shall continue to be obligated under this Agreement until the full satisfaction by such transferring Owner of the following conditions and upon such satisfaction shall be released from the obligations under this Agreement: (i) Owner no longer has a legal or equitable interest in all or any part of the Property; (ii) Owner is not then in default under this Agreement; (iii) Owner has provided City with the notice and executed agreement required under Section 2.4.1(b) above; and (iv) The transferee provides City with security equivalent in all respects to any security previously provided by Owner to secure performance of its obligations hereunder. If City previously had not required the posting of security, then City shall not require the transferee to provide such security.
(b) If requested by transferring Owner, the City shall promptly memorialize such release in writing upon satisfaction of the foregoing conditions.
A default under this Agreement by Owner shall not be considered or acted upon by the City as a default by the transferee and shall not affect the transferee’s rights or 1136
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obligations hereunder. Likewise, a default by a transferee relating to the transferred property shall not be considered or acted upon by the City as a default by Owner and shall not affect Owner’s rights and obligations hereunder.
2.4.3 Subsequent Transfer. Any subsequent transfer after an initial transfer shall be made only in accordance with and subject to the terms and conditions of Section 2.4.this Section
2.4. 2.5 Amendment or Cancellation of Agreement. This Agreement may be amended or cancelled in whole or in part only by written consent of all Parties in the manner provided for in Government Code Section 65868 or 65865.1. This provision shall not limit any remedy of City or Owner as provided by this Agreement. In the case of amendments affecting portions of the Property, only the consent of the owner of such portion of the Property shall be required so long as the amendment does not diminish the rights appurtenant to or increase the burdens upon any other portion of the Property. Any Subsequent Land Use Approval pursuant to this Agreement and any amendment of the Land Use Regulations including to the General Plan, the Specific Plan or City’s zoning ordinance, shall not require amendment of this Agreement. Instead, any such amendment shall be deemed to be incorporated into this Agreement at the time that such amendment is approved by the City Council.
2.6 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 by a court of competent jurisdiction setting aside, voiding or annulling the adoption of the ordinance approving this Agreement, provided the time for filing any return to writ has also expired. (c) The adoption of a referendum measure overriding or repealing the City Ordinance.
(d) Owner’s election to terminate this Agreement. It is understood that the majority of the industrial development allowed by the Development Approvals is located on land that must be annexed to the City with the approval of LAFCO.
Therefore, if LAFCO denies the Annexation of the Property not due to the acts or omissions of Owner, Owner may elect, in its sole and absolute discretion, not to develop the Property in accordance with the Development Approvals and terminate this Agreement and the Development Approvals prior to the issuance of a grading permit for the industrial development. In such a situation, Owner shall provide notice of said election to terminate this Agreement and the Development Approvals to the City, and this Agreement and the Development Approvals shall be terminated. The Parties, if they mutually agree, may enter into a meet and confer process to determine if any of the Development Approvals within the boundaries of the City should be retained and not terminated. Following receipt of Owner’s notice of election to terminate this Agreement and Development Approvals, Owner 1137
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and City shall execute an appropriate instrument in recordable form evidencing such termination of this Agreement and the Development Approvals as provided in the preceding sentence. In the event that City has received any monetary payments from Owner under Section 5.5.1 (Accelerated DIF), 5.9.1 (Electrical Substation),
5.10.4 (Fire Station) or 5.10.6 (City Grant) prior to Owner’s termination under this Section 2.6(d), it shall return such payments to Owner within thirty (30) days from receipt of Owner’s election to terminate this Agreement and the Development Approvals, less the amount of any reasonable expenditures made by City for their intended purpose (“City Expenditures”), including, but not limited to, design or construction fees for the fire station (5.10.4) (and fire equipment purchases (5.10.5)), the electric Substation, (5.9) Fair Share payments for roadway improvements (5.7) Animal Shelter Grant (5.10.8) incurred prior to such termination, and provided further that the amount of Three Million Dollars ($3,000,000) provided for in Section 5.2.1 (First Installment, Public Benefit Fee) and the amounts under 3.11 (Retail Development Obligations) and 5.2.2 (Subsequent Installments, Public Benefit Fee), shall not be subject to termination, reimbursement or repayment under any circumstances. In order for the City to be eligible to any offset due to the incurrence of City Expenditures, City is required to provide documentation to Owner of all City Expenditures actually paid by City. In addition, upon City’s receipt from Owner of Owner’s notice of election to terminate this Agreement and Development Approvals, City shall cease the incurrence of further City Expenditures. Any construction completed by Owner prior to such termination shall be subject to applicable DIF (as may be deducted from DIF paid under 5.5.1). Further, it is understood that City does not collect TUMF and MSHCP and that Owner will be solely responsible to recover any such amounts from WRCOG and RCA, as applicable, with no liability to City whatsoeverIf Owner elects not to develop Property in accordance with the Development Approvals in substantial conformance with the Development Approvals, Owner shall provide notice of said election to the City and identify the location of the Property that is subject to the notice of termination. Following receipt of Owner’s notice of election to terminate this Agreement in whole or in part, Owner and City shall execute an appropriate instrument in recordable form evidencing such termination. (e) 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.
2.7 Notices.
2.7.1 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: (a) when hand delivered to the other Party; (b) five (5) days after such notice has been sent by United States mail via certified mail, return receipt requested, postage prepaid, and addressed to the other Party as set 1138
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forth below; or (c) two (2) days after such notice has been deposited with a national overnight delivery service reasonably approved by the Parties (Federal Express, United Parcel Service and U.S. Postal Service are deemed approved by the Parties), postage prepaid, addressed to the Party to whom notice is being sent as set forth with next Business-Day delivery guaranteed, or (d) on the date of delivery shown in the email records of the Party sending the email, provided that the sending Party either receives a confirmation of delivery from the persons to whom the email is addressed or follows the provisions for notice set forth in clauses (a), (b) or (c) within two (2) days following email transmittal.
2.7.2 Unless otherwise provided in writing, all notices hereunder shall be addressed as follows:
If to City:
City Clerk
City of Banning
99 East Ramsey Street
Banning, CA 92220
with copies to:
City Manager
City of Banning
99 East Ramsey Street
Banning, CA 92220
and to:
Community Development Director
City of Banning
99 East Ramsey Street
Banning, CA 92220
And to:
City Attorney
City of Banning
99 East Ramsey Street
Banning, CA 92220
If to Owner:
NP Banning Industrial, LLC
Attn: Nathaniel Hagedorn
3315 N. Oak Trafficway
Kansas City, MO 64116
Email: [email protected]
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with copies to:
John C. Condas, Esq.
Allen Matkins Leck Gamble Mallory & Natsis LLP
2010 Main Street, Suite 800
Irvine, CA 92614
email: [email protected]
and to:
NorthPoint Development, LLC
Attn: Asst. General Counsel
3315 N. Oak Trafficway
Kansas City, MO 64116
Email: [email protected]
and to:
NP Banning Industrial, LLC
Attn: J.J. Jenkins
12977 N. Outer Forty Rd., Suite 203
St. Louis, MO 63141
Email: [email protected]
2.7.3 Any 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 any such change.
2.8 Estoppel Certificate. City shall, at any time and from time to time within ten (10) days after receipt of written notice from Owner so requesting, execute, acknowledge and deliver to Owner a statement in writing: (a) certifying that this Agreement is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Agreement, as so modified, is in full force and effect); (b) acknowledging that there are no uncured defaults on the part of Owner hereunder or specifying such defaults if any are claimed; and (c) addressing such other reasonable and customary matters as Owner may request. Any such statement may be relied upon by any prospective purchaser or encumbrances of all or any portion of the Property. Upon Owner’s written request, City shall issue a certificate of performance evidencing completion of any of Owner’s obligation(s) under this Agreement.
3. DEVELOPMENT OF THE PROPERTY.
3.1 Vested Rights to Develop. Subject to the terms of this Agreement including the Reservations of Authority, Owner shall have a vested right to develop the Project on the Property during the Term of this Agreement in accordance with, and to the extent of, the Development Plan.
City covenants that it will not initiate, so long as this Agreement remains in effect, any amendment to the General Plan directly applicable to the Property, the Project’s zoning as established by the Development Plan or the Specific Plan in a manner that Owner reasonably deems contrary to its 1140
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interest in, or use of the Property. Except as otherwise provided in this Agreement, the Permitted Uses of the Property shall include construction of commercial and/or industrial buildings and appurtenant structures, installation of all improvements and infrastructure reasonably incident thereto, as permitted under the Development Plan and this Agreement, including without limitation as set forth in Section 3.4.3, and the density or intensity of use of the Property and the maximum height and size of proposed buildings shall be as set forth in the Development Plan.
Provisions for reservation or dedication of land for public purposes applicable to the Property shall be those set forth in Section 5.10.3 of this Agreement and the Development Plan. Subject to the other provisions of this Agreement, Owner shall have the right to increase the density and intensity of use of any portion of the Property by a transfer of density or floor area from other portions of the Property in excess of the density and intensity limitations specified under and consistent with the Development Plan. Nothing herein is deemed or interpreted to vest an increase in the overall density or intensity of use of the Property as a whole, and any density transfer shall fully conform to the requirements of the Specific Plan. Additionally, notwithstanding the language of this Section or any other language in this Agreement, all specifications, standards and policies regarding the design and construction of public works facilities, if any, shall be those that are in effect at the time the applicable Project plans are being processed for approval.
3.2 Effect of Agreement on Land Use Regulations. In accordance with the terms of Government Code § 65866, 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 structures, and the design, improvement and construction standards and specifications applicable to development of the Property shall be the Development Plan. The Development Plan shall continue to apply to the Project and to the reconstruction of any Project improvements damaged or destroyed from any cause. Except as otherwise provided in this Agreement, no amendment, revision of, or addition to the Development Plan that would affect the Project or increase the obligations or decrease the rights of Owner hereunder or under the Development Plan (“Regulatory Change”) shall be made without Owner’s consent, whether adopted or approved by the City Council or any office, board commission or other agency of City, or by the people of City through an initiative measure. Furthermore, no such Regulatory Change shall be effective or enforceable by City with respect to the Project or the Property, nor against Owner or its successors or assigns. However, nothing in this Section shall preclude City: (i) from applying the Subsequent Land Use Regulations authorized by Section 3.3.1 or (ii) from denying or conditionally approving any subsequent development project application on the basis of the Development Plan (except for this Agreement, the amendment process for which is set forth in Section 2.5) as it may be amended or modified from time to time, but only at the written request of Owner or with the written consent of Owner in its sole and absolute discretion. All amendments to the Development Approvals shall automatically become part of the Development Plan.
3.3 Reservations of Authority.
3.3.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the following Subsequent Land Use Regulations shall apply to the development of the Property.
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(a) Reasonable processing fees and charges for land use, approvals of entitlements and mitigation monitoring imposed by City to cover the estimated actual costs to City of processing applications for Development Approvals or for monitoring compliance with any Development Approvals granted or issued (“Processing Fees”); provided that: (i) such Processing Fees are in force and effect on a City-wide basis at the time application is submitted for such permits, approvals or entitlements; and (ii) any Processing Fees shall not exceed an amount which will compensate City for the estimated reasonable cost and increases incurred, as permitted pursuant to Government Code Section 54990. City may also increase Processing Fees based on any increase in the estimated reasonable cost to City of performing the work for which the particular Processing Fee is paid provided that such increases are made on a City-wide basis. In addition, all processing fees and charges for plan checks, building permits and inspections, excluding all such charges imposed by the City Public Works Department, shall be based upon the City fee schedule in effect at the time such permits and inspections are sought. (b) Regulations prescribing or relating to procedural matters, hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure excluding those set forth in the Development Plan.
(c) Regulations governing construction standards and specifications including, without limitation, the Building Code, Plumbing Code, Mechanical Code, Electrical Code, Fire Code and Grading Code applicable in City. (d) Regulations imposing Development Fees, subject to the provisions of Section 5.11 below.
(e) Regulations that are reasonably necessary to protect the public health and safety regardless as to whether they conflict with the Development Plan.
To the extent feasible , any such regulations shall be applied and construed so as to provide Owner with the rights and assurances provided under this Agreement. (f) Regulations that do not conflict with the Development Plan. For purposes of this Section, a Subsequent Land Use Regulation shall be deemed in conflict with the Development Plan if it substantially increases the cost of development or reduces the Project unit or square footage, yield, or materially limits the rate, timing, or sequencing of development of the Property. Any regulation, whether adopted by initiative or otherwise, materially limiting the rate or timing of development of the Property shall be deemed in conflict with the Development Plan and shall therefore not be applicable to the development of the Property.
(g) Regulations for which Owner has given written consent to be applied to development of the Property, regardless of whether they conflict with the Development Plan.
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(h) Regulations that City is required to adopt and/or enforce by applicable state or federal law.
3.3.2 Subsequent Development Approvals. This Agreement shall not prevent City, in acting on Subsequent Development Approvals, from applying Subsequent Land Use Regulations, that are approved in writing by Owner, nor shall this Agreement prevent City from denying or conditionally approving any Subsequent Development Approval on the basis of the Development Plan or any Subsequent Land Use Regulation, authorized pursuant to Section 3.3.1 or approved by Owner in writing.
3.3.3 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, preempt, 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 and the provisions of Section 11.4 shall apply to any modifications or suspensions pursuant to this Section.
3.3.4 Intent. The Parties acknowledge and agree that City 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 City 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 City all such power and authority which cannot be restricted by contract.
3.4 Subsequent Development Review.
3.4.1 Processing of Subsequent Development Applications. In connection with any Subsequent Development Approval, City shall exercise its discretion in accordance with the Development Plan and as provided by this Agreement including, but not limited to, the Reservations of Authority; provided however that Subsequent Development Approvals shall not be disapproved, conditioned or delayed by City for reasons inconsistent with the Development Plan or the provisions of this Agreement and the conditions, terms, restrictions, and requirements for any subsequent discretionary actions shall not prevent development of the land for the uses and to the density or intensity of development set forth in the Development Plan or this Agreement.
City shall accept for processing, review and action all applications for Subsequent Development Approvals, and such applications shall be processed in the normal manner for processing such matters, consistent with the Development Plan. Following approval of each Subsequent Development Approval, Owner shall have the vested right to develop pursuant to said approval to the same extent that Owner has the vested right to develop pursuant to the Development Plan. If, as of the date Owner applies for any Subsequent Development Approval, Owner has fulfilled, or irrevocably committed itself with respect to, any obligation on its part to finance or otherwise contribute its share of the public improvements applicable as of that date and made appropriate arrangement to cause the construction of such public improvements subject to a Reimbursement Agreement under Section 5.12.1, City shall not withhold such Subsequent Development Approval on the basis of any delay in obtaining the financial or other contributions of any other property owner or Owner to such improvements. Nothing in this Agreement shall be interpreted to require 1143
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the City to pay, from its general fund, special fund or any other fund, the costs of all or any part of the Project or related public improvements other than than as expressly provided in Section 5 of this Agreement with respect to the Public Improvements as specified in this Agreement, and, if no other method of providing such Public Improvements is available, the provisions of Section 5.12 shall apply to the extent applicable.
3.4.2 Additional CEQA Review. City shall not require Owner to obtain any approvals or permits for the development of the Project in accordance with this Agreement other than those permits or approvals that are required by the Development Plan or this Agreement. The Parties agree that this Agreement does not modify, alter or change City’s obligations pursuant to CEQA and acknowledge that future discretionary actions may require additional environmental review pursuant to CEQA. In the event that additional environmental review is required by CEQA, City agrees to utilize tiered environmental documents, including the use of addenda, to the fullest extent permitted by law, as determined by City, and as provided in California Public Resources Code Sections 21093 and 21094. The Community Development Director shall make the determination as to the level of CEQA documentation (exemption, addendum, supplemental EIR, supplemental MND, or subsequent EIR or no further review required), that is appropriate and may request and obtain technical information as necessary to make this determination. Because the Project has been extensively reviewed in the EIR, it is the intent of City in adopting this Agreement and the Existing Development Approvals that applications for implementing approvals for the Project, including with respect to grading, improvements, individual maps, buildings or phases, consistent with the Development Plan shall not require additional review under CEQA, provided that none of the conditions are present which require further environmental review under CEQA, including but not limited to Public Resources Code Section 21166 and provisions that may require an Addendum to the EIR under CEQA GuidelinesGuidleines Section 15164.
3.4.3 Permitted Uses. The Project is designed to includebe a regional commercial and entertainment attraction, providing multi- generational destinations such as activity and wellness-based retail uses, including upbut not limited to 200,000 square feet of stationary wave surfing, indoor skydiving, indoor go-karting, obstacle gyms, and a large single tenant useindoor/outdoor climbing wall, yoga studios, dance studios and other commercial retail and restaurantathletic activities. sit-down restaurants (with patio areas), a food hall and specialty retail uses, a hotel and warehouse and that will orient inwards to central open space areas that would allow for outdoor activities (i.e., walking paths, grass areas, outdoor displays, benches) or could be used by on-site vendors/concessionaires and as connections between uses along with an internal system of pedestrian walkways. In addition, the Project is designed to generate employment through the development of warehouses and other industrial uses, which constitute Permitted Uses (defined below) in the Specific Plan. However, because the buildings in the commercial and industrial areas of the Property will be leased to third parties, the Specific Plan provides for a range of allowable uses. Therefore, while the uses described above may be developed under the Development Plan, the Development Plan does not require these uses to be implemented and any of the commercial land uses listed in Table 3-1 of the Specific Plan are deemed to be consistent with the Development Plan and allowed uses so long as the City determines either that the environmental impacts of such uses do not generate new significant unmitigatable impacts as compared with what was disclosed in the EIR or supplemental environmental analysis is performed by the City as required by CEQA. The full list of Permitted, Conditionally Permitted, Ancillary, and Prohibited Uses in this Planning Areas is provided in Chapter 3, Development Standards of 1144
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the Specific Plan (“Permitted Uses”). City, in considering an application for a specific use, shall determine whether there are significant environmental impacts resulting from such proposed use not addressed in the EIR, as supplemented, and in that case whether to prepare additional environmental documentation. If the environmental impacts exceed the impacts disclosed in the EIR or subsequent environmental documentation previously approved by City, City shall undertake additional environmental review in compliance with CEQA prior to approving any such use.
3.5 Timing and Phasing of Development.
3.5.1 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. City 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 for construction of Public Improvements set forth in the Development Plan or in the Phasing Plan, as the same may be amended from time to time.
3.5.2 Phasing of Development. Owner may phase its subdivision of the Property and/or any of the Planning Areas by applying for Subdivision Maps covering less than the entire Property or some discrete portion of any of the Planning Areas. Attached hereto as Exhibit “E” is an initial phasing plan for construction of the Project (“Initial Phasing Plan”), which may be modified from time to time as set forth in Section 3.5.3. The Initial Phasing Plan, and all subsequent revisions to the Initial Phasing Plan, shall insure that each building of each phase shall have adequate public facilities to service each building of each phase. The phasing plan in effect during any given time period shall be referred to as the “Phasing Plan”. The Parties acknowledge and agree that Owner may modify the Phasing Plan at any time, in its sole and absolute discretion, as long as each phase or each building in each phase can be adequately serviced with all necessary public facilities related to such modification of the Phasing Plan. Notwithstanding the foregoing, if the Developer modifies the Initial Phasing Plan to increase or decrease the need for public facilities serving the buildings in one or more of the phases, Developer and City shall mutually agree to modify the public facilities to assure that each building of each phase has adequate public facilities to service each building of each such phase.
3.5.3 Deviation from Phasing Plan. The Parties acknowledge that Owner cannot at this time accurately predict the time schedule within which the Project will be developed, or the order in which particular phases or other portions of the Project will be developed, and that the rate, timing, order, and sequence of the development of the Project will depend on numerous circumstances beyond Owner’s control, including, without limitation, market trends, demand, the condition of capital markets, interest rates, availability of financing and other economic and social factors. Therefore, so long as the Project is developed in accordance with the Development Plan (as these may be amended from time to time pursuant to this Agreement), Owner shall not be 1145
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required to initiate or complete development of the Project, or any particular phase or portion of the Project, within any specific period of time. Subject to the provisions of this Agreement, including but not limited to Sections 3.5.1 and 3.5.2, Owner shall develop the Project in accordance with the Owner’s own time schedule as such schedule may exist from time to time, and Owner may determine which part of the Project shall be developed during each phase of the Project, it being the intent of the Parties hereunder to cure any deficiency in this Agreement by reason of any failure to provide for the timing of development by acknowledging and providing that Owner shall have the right to develop the Project in such order and at such rate and at such times as Owner deems appropriate in the good faith exercise of its objective business judgment. It is acknowledged, however, that any deviation from the project phasing set forth in the Phasing Plan agreed upon by the Parties may require modification of the timing and order of providing public facilities provided in the Existing Development Approvals in order to insure that each building of the Project is adequately serviced by all necessary Public Improvements. Owner shall give City written notice of any intended deviation from the phasing set forth in the Phasing Plan, as modified by any prior, noticed deviations, with such notices to include a revised phasing plan.
By entering into this Agreement, Owner shall not be obligated to build any structures, make any improvement, or otherwise develop the Project, provided, however, that Owner’s failure to develop the Project shall not preclude application to the Property of the taxes or assessments levied by any financing district in accordance with state law. Nothing in this Agreement shall be deemed to release Owner of the obligation to construct Public Improvements as required by this Agreement.
3.5.4 Project Construction Beyond 2027 EIR Buildout Year. The Parties agree and acknowledge that the EIR describes buildout of the Project by 2027 and that economic conditions or business factors, including without limitation, the timing of attracting tenants may influence the ability to complete construction of the Project by 2027. This Agreement in no way obligates Developer to commence or complete buildout of the Project by 2027. Therefore, with respect to any request for any discretionary Subsequent Development Approval which is subject to the final approval of the Director of Planning, the Director of Planning shall make an administrative determination as to whether the EIR together with any addendum thereto is sufficient for the issuance of the permit or approval or whether, as required by CEQA Section 21166 or CEQA Guidelines Sections 15162, 15163 and 15164, there have been substantial changes in the Project, circumstances or new information of substantial importance that would require additional environmental review. However, if Developer submits an application for a discretionary Subsequent Development Approval that is subject to recommendation or approval of the Planning Commission and/or City Council, those bodies shall make all applicable determinations under CEQA.
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 City shall process and act on such application in accordance with Development Plan, except as otherwise provided by this Agreement including the Reservations of Authority. 1146
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3.6.1 Minor modifications to the Existing Development Approvals may be approved by the City Community Development Director and, if approved, 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 required by law, as determined in City’s reasonable discretion, a change to the Existing Development Approvals shall be deemed “minor” and may be approved by the Community Development Director provided such change does not:
(a) Alter the permitted uses of the Property; 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 structures in excess of 10% of the originally approved criteria; or, (d) Increase the number of lots or parcels of any tentative parcel or subdivision map; or
(e) Constitute a project requiring a subsequent or supplemental environmental impact report pursuant to Section 21166 of the Public Resources Code.
3.7 Regulation by Outside Agencies. It is acknowledged by the Parties that governmental agencies, quasi-public entities, and public utilities not within the control of City (“Outside Agencies” and each an “Outside Agency”) possess authority to regulate aspects of the development of the Property separately from or jointly with City and this Agreement does not limit the authority of such Outside Agencies. City shall use best efforts to cooperate with Owner in securing permits and approvals required from such Outside Agencies.
3.8 Public Works. If Owner is required by this Agreement to construct any public works facilities which will be dedicated to City or any Outside Agency (as defined below) 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 City or such Outside Agency if it would have undertaken such construction
3.9 Provision of Real Property Interests by City. In any instance where Owner is required to construct any public improvement on land not owned by Owner, 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. In the event Owner is unable, after exercising reasonable efforts to acquire the real property interests necessary for the construction of such public improvements (“Offsite Interests”), and if so instructed by Owner and upon Owner’s provision of adequate security for costs City may reasonably incur, City shall negotiate to attempt to purchase the Offsite Interests in order to allow Owner to construct the public improvements as required by this Agreement. If City is unable to acquire the Offsite Interests through a voluntary transaction, City shall consider acquiring the Offsite Interests through using its power of eminent domain to acquire such required real property interests. Owner shall pay all reasonable costs associated with such acquisition or condemnation proceedings and shall enter into a land acquisition agreement with City in a form approved by the City Attorney. This Section is not 1147
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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 City upon the development of the Project under the Subdivision Map Act or other legal authority. If after using good faith efforts to acquire the Offsite Interests, Owner is unable to acquire the Offsite Interests, and City, in its reasonable discretion, refuses to use its power of eminent domain to acquire the Offsite Interests, City shall waive the requirement for Owner to acquire the Offsite Interests, or if development of the Project cannot proceed without acquisition of the Offsite Interests, the Parties shall meet and confer in good faith to attempt to devise alternatives to allow the Project to proceed without acquisition of the Offsite Interests.
3.10 City Covenants.
3.10.1 No Conflicting Land Use Regulations. City hereby represents and warrants to Owner that as of the Effective Date there are no rules, regulations, ordinances, or official policies of City that would materially interfere with development of the Project according to the Development Plan, provided the Southern Portion of the Property is annexed into the City.
3.10.2 Subdivision Map Extension and Other Development Approvals. As permitted by Section 66452.6 of the Government Code, each Subdivision Map, heretofore or hereafter approved in connection with development of the Property or the Project shall be extended and shall remain in effect for the term provided by the Subdivision Map Act or the term provided by this Agreement, whichever is longer. If Owner, in its sole and absolute discretion, chooses to process vesting tentative maps, City shall process such vesting maps in accordance with the Existing Land Use Regulations and the Subdivision Map Act, and any tentative map, either vesting or non-vesting, may be processed in phases. In addition, all other Development Approvals shall automatically be extended, without the need for filing extension applications, and shall remain in effect for the term provided by the Banning Municipal Code or the term provided by this Agreement, whichever is longer.
3.10.3 Additional Covenants. City agrees to take the following actions with respect to the development of the Project:
(a) Consider and approve signage consistent with the Sign Program requirements.
(b) Construct the SLB Extension. TheThe specifications of the SLB Extension have not been established by the City. Once the City has finalized the specifications of the SLB Extension, the Parties shall use good faith efforts to enter into an Operating Memorandum as provided in Section 11.7 to confirm thethese specifications of the SLB Extension.
(c) Subject to the provisions of Section 5.9, construct the Substation and,
(d) Subject to the provision of Section 5.8.1, if the City determines to do so at a future date, any fire station.
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3.10.4 Easements. City shall cooperate with Owner in connection with any arrangements for abandoning existing utility or other easements and facilities and the relocation thereof or creation of any new easements within the PropertyPropert`y necessary or appropriate in connection with the development of the Project. If any such easement is owned by City or any governmental agency under the control of City, City shall subject to applicable state law, at the request of Owner take such action and execute such documents as may be necessary to abandon and/or relocate such easements as necessary or appropriate in connection with the development of the Project.
3.11 Retail Development Obligations. Owner shall obtain all necessary approvals including but not limited to building permits and commence construction as provided in the building permits of a minimum of One Hundred Thousand (100,000) square feet of Project commercial uses (“Retail Threshold”), within thirty six (36twenty -four (24) months after Owner obtains the Effective Datefirst final certificate of occupancy for a Project warehouse (“Retail Date”). Thereafter, Owner shall diligently complete the One Hundred Thousand (100,000) square feet of Project commercial uses. `Owner shall submit all required entitlement applications a minimum of six (6) months before the Retail Date. City and Owner shall process these entitlement applications promptly, using all reasonable good faith efforts. If Owner timely submits all required applications, the Parties may mutually agree upon extending the Retail Date in order to provide City with adequate time to process and consider approval of these entitlement applications. For the purposes of this section, “commercial uses” include any of the General Commercial uses authorized in the Specific Plan. If the Retail Threshold is not satisfied by the Retail Date, Owner shall pay the City Five Hundred Thousand Dollars ($500,000) thirty (30) days after the Retail Date, and an additional Five Hundred Thousand Dollars ($500,000) every six (6) months thereafter, if the Retail Threshold is not satisfied. Developer and City agree and acknowledge that the payments required hereunder are reasonable under the circumstances, that it would be extremely difficult or impossible to establish the damages that would be suffered by the City and the public by reason of Developer’s failure to meet the Retail Threshold and therefore the payments provided in this paragraph are a reasonable estimate of such damages (which are not punitive) and which shall be deemed liquidated damages under Civil Code Section 1671 and other applicable law. Owner shall submit for City review a retail recruitment and tenant outreach plan (with a focus on anchor tenants) (“Retail Plan”) within six (6) months of the Effective Date. The Retail Plan shall obligate Owner to recruit retail tenants. Owner shall regularly apprise City of Owner’s efforts to attract potential or actual anchor tenants. A minimum of two (2) 100,000 square foot or larger retail commercial buildings (for single tenants) shall be constructed within the retailRetail/commercial area of the Project.
3.12 Planning Area 2. Following a joint Planning Commission/City Council public hearing with respect to the Project held on May 8, 2025, and in order to provide an additional buffer to existing residences east of Sunset Avenue consistent with the Specific Plan, the City has requested and Owner acknowledges and agrees that no construction of any warehouses, or the commencement of any Industrial uses, shall occur in Planning Area 2 of the Specific Plan. Within one hundred twenty (120) days of the Effective Date, Owner shall submit all applications necessary to process a General Plan Amendment, Specific Plan Amendment and Zone Change for Planning Area 2, to General Commercial (GC) uses(LI) uses, as specified in the Specific Plan, shall occur in Planning Area 2. The City and Owner acknowledge and agree that at the time of execution of this Agreement, Owner has not had an opportunity to evaluate the feasibility of alternative uses on 1149
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Planning Area 2. The City has requested and Owner agrees that it shall evaluate and use its best efforts to implement additional commercial development in Planning Area 2 consistent with the Permitted Uses in the Specific Plan, in accordance with the following: Within one hundred twenty (120) days of the Effective Date, Owner shall submit to the City a preliminary market feasibility study performed by a reputable brokerage or real estate consulting firm with specialization in retail development evaluating the market potential, if any, for commercial uses in Planning Area 2 that are considered feasible in light of surrounding commercial saturation and the obligations of Owner pursuant to Section 3.11. Promptly thereafter, Owner and the City shall meet to discuss the details of commercial development on Phase 2. After market evaluation, Owner shall develop an initial plan for review with the City and, in compliance with all requirements of the Specific Plan Implementation Regulations and CEQA, shall submit all applications necessary to process a Specific Plan Amendment for Planning Area 2, to authorize General Commercial (GC) Permitted Uses, as specified in the Specific Plan. The City and Owner acknowledge and agree that any change in the Specific Plan designation of Planning Area 2 is speculative at this time and cannot proceed, if at all, unless and until City undertakes and completes environmental review under CEQA if required, and the City issues all necessary permits and clearances to authorize GC uses in Planning Area 2. The City and Owner acknowledge and agree that consistent with the mere submissionrequirements of athe Specific Plan Amendment for Planning Area 2 does not commit the City to approve such an amendment or any other development applications submitted by Owner..
3.13 Planning Area 4 Buffer. Following a joint Planning Commission/City Council public hearing with respect to the Project held on May 8, 2025, and at the request of the City, in order to provide an additional buffer to existing residences south of Bobcat Road consistent with the Specific Plan, Owner hereby agrees that it shall create a buffer area of at least one hundred fifty (150(100) feet between the building footprint of any building built in Planning Area 4 of the Specific Plan which has frontage on Bobcat Road. Included in this buffer area will be a minimum of twenty (20) feet of landscaped area.
3.14 Modifications to the Project to Decrease Environmental Impacts. Based upon input from the City Council at its January 28, 2026, hearing on the Project, Owner has agreed to provide additional modifications to the Project as specified below. These modifications are depicted in Exhibit “G-1”.
3.14.1 Removal of Industrial Uses in Planning Area 7. Owner acknowledges and agrees that no construction of any warehouses, or the commencement of any Industrial (LI) uses, as specified in the Specific Plan, shall occur in Planning Area 7.
3.14.2 Removal of Trailer Storage Yard. Owner acknowledges and agrees that no construction or use of a trailer storage yard shall occur in Planning Area 8 of the Specific Plan.
3.14.3 Construction of a Truck Barrier System. Subject to approval of the City, Owner shall construct a truck barrier system on Sun Lakes Blvd. at the western boundary of the Property, to limit heavy truck access west of the Property along Sun Lakes Blvd. This truck barrier system is in addition to other Project improvements designed to prohibit heavy truck access west of the Property along Sun Lakes Blvd.
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3.14.4 Modifications to the Improvement of Highland Home Road. Owner shall be required to and shall only construct improvements to Highland Home Road south of Sun Lakes Blvd. Owner shall not be obligated to construct improvements to Highland Home Road north of Sun Lakes Blvd., except for the construction of an access road to allow Banning Electric Utility to access the contemplated substation, subject to the reasonable approval of the City and Banning Electric Utility and compliance with CEQA.
3.14.5 Modifications to the Improvements of Lincoln Avenue. Owner shall be required to and shall only construct improvements to Lincoln Avenue to the eastern edge of Smith Creek in Planning Area 6 of the Specific Plan.
3.14.6 Public Bypass Route to Access Retail Development in Planning Area 1. In order to reduce trips traveling easterly along Sun Lakes Blvd. to Sunset Avenue to access retail development in Planning Area 1, Owner shall make accommodations for and construct road improvements to allow public vehicular access from Sun Lakes Blvd. to Lincoln Avenue. The City and Owner acknowledge and agree that construction of this bypass cannot proceed, if at all, unless and until City complies with CEQA, and all necessary permits and clearances are obtained by Owner.
3.14.7 Prohibition of Cold Storage and Freestanding Travel Center Uses. In order to reduce environmental impacts, Owner agrees that the Project shall not include any cold storage uses or a freestanding travel center, similar to travel centers operated by Flying J, Buc-ee’s or Love’s.
4. ANNEXATION.
4.1 Contemplated LAFCO Action. The Parties recognize that the Property includes land that presently is outside of the City, generally comprised of the Southern Portion of the Property, that is in the City’s sphere of influence (“SOI”) and subject to annexation by LAFCO (“Annexation”). Owner will be the applicant with respect to the Annexation. The Parties recognize that the Development Agreement Law authorizes the City to enter into a development agreement with Owner for property that is within the City’s SOI. The Parties further agree and understand that prior to the contemplated Annexationannexation, this Agreement shall function as a preannexation agreement with respect to the Southern Portion of the Property and bind the Parties as such.
4.2 Contemplated Action. Upon LAFCO approval of the Annexationproposed annexation, and the recordation of the Certificate of Completion, the Parties agree that the Agreement shall become operative on the Southern Portion of the Property. The Parties agree that if LAFCO denies the Annexation, or any successor annexation application prepared by either of the Parties, the Parties will negotiate in good faith to preserve this Agreement and the Development Approvals to the maximum extent that same may be consistent with that denial and the Parties’ commercial concerns. Notwithstanding this commitment to negotiate in good faith, Owner reserves the absolute right to terminate this Agreement, with no liability to Owner, in the event that LAFCO denies the Annexation, or any successor annexation application prepared by either of the Parties.
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4.3 Cooperation of City. The City agrees to support the Annexation and to use best efforts to achieve the prompt annexation of the Property within the SOI into the City.
4.4 Development of Annexed Property. The Parties agree that upon City approval of the Annexation by LAFCO, the rights of Owner to develop the Project upon the newly annexed portion of the Property in accordance with the Development Plan as set forth in this Agreement shall vest and become equivalent to the vested rights described above in Section 3.1 for the portions of the Property within the City jurisdictional boundaries as of the Effective Date.
5. PUBLIC BENEFITS, PUBLIC IMPROVEMENTS, AND DEVELOPMENT IMPACT FEES.
5.1 Intent. The Parties intend to provide consideration to the public to balance the private benefits conferred on Owner under this Agreement by requiring that Owner provide the Public Benefits described in this Section 5. The City has either previously approved or is in the process of considering various public improvements that may occur on or adjacent to the Property including the Sun Lakes Boulevard Extension, the Substation, a reverse osmosis facility and a potable water reservoir. Each of these public improvements has either undergone prior environmental (CEQA) review or is under consideration by the City or would, prior to construction, undergo applicable environmental (CEQA) review by the City and may proceed with or without development of the Project. Nonetheless, the Public Benefits include land conveyance and payments to be made to the City by Owner which land and payments may be utilized by the City for these and for other purposes to the extent described in this Agreement, in the event the City does not proceed with construction of such public improvements.
5.2 Public Benefit Fee. Owner shall pay the City a Public Benefit Fee (“Public Benefit Fee”) equal to the lesser of either Eight Million Dollars ($8,000,000) or One Dollar and Forty Four Cents ($1.44) per square foot of entitled warehouse/logistics/industrial building square footage.
Furthermore, the Public Benefit Fee shall be paid in installments subject to the following terms and conditions:
5.2.1 First Installment. In consideration for the City entering into this Agreement, Owner shall pay the first installment of the nonrefundable Public Benefit Fee of Three Million Dollars ($3,000,000) (First Installment”) by wire transfer in immediately available funds within sixty (60) days of the Effective Date without extension for any reason such as denial of the Annexation by LAFCO, a Development Limitation, force majeure, lawsuit challenging this Agreement or the Development Approvals or Tolling Period. In the event that such payment is not made within such sixty (60) days, this Agreement and the Development Approvals shall, without the necessity of notice or cure, terminate. However, the provisions providing for the City to retain the First Installment shall survive such termination. Notwithstanding anything to the contrary in this Agreement and the Development Approvals, they shall not be deemed to be vested rights of Owner until the First Installment is made. If Owner elects to terminate this Agreement and the Development Approvals as provided for in this Agreement, the rights under this Agreement and the Development Approvals shall be deemed not to be vested.. Upon Owner’s payment of the First Installment, the Existing Land Use Regulations shall revert to the Land Use Regulations in effect on the Effective Date.
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5.2.1 First Installment. Owner shall pay the first installment of the Public Benefit Fee of One Million Dollars ($1,000,000) prior to the issuance of the first grading permit for the Project.
5.2.2 Subsequent Installments. Following the issuance of occupancy permits for the first 694,444 square feet of warehouse/logistics/industrial buildings, Owner shall pay subsequent installments of the Public Benefit Fee upon issuance of occupancy permits for each warehouse/logistics/industrial building on a square-foot-by-square foot basis at the rate of One Dollar and Forty Four Cents ($1.44) per square foot (“Subsequent Installments”).
5.2.3 Sales Tax Credits. Owner may claim Sales Tax Revenues generated by the Industrial Property (as defined below) as a credit on a dollar-for-dollar basis toward future Subsequent Installments up to a maximum cumulative credit of Two Million Dollars ($2,000,000).
These credits shall be applied only on a going-forward basis for Sales Tax Revenues actually received by the City and are non-refundable.
5.2.4 Special Account. Until the SLB Extension is completed, City shall: (i) keep Public Benefit Fee payments made by Owner in a special account, and (ii) not expend any portion of the Public Benefit Fee for any purpose other than completing the SLB Extension. Upon completion of the SLB Extension, the City shall not be required to maintain the Public Benefit Fee in a special account and shall have sole discretion to use the Public Benefit fee for any other City purposes.
5.3 Owner Required Public Improvements. Owner shall construct and install or fund the installation of the public improvements and infrastructure required in connection with the Project and listed on Exhibit “F” (“Public Improvements”) and/or required as conditions of approval to the Existing Development Approvals in conformance with standards set forth in the Development Plan. Subject to Section 3.5, Owner will make these Public Improvements in phases concurrent with the development of each building of each phase of the Project and in accordance with the Phasing Plan and the conditions of approval to the Existing Development Approvals. If development of the Project proceeds according to the Phasing Plan and the Development Plan, the Owner and City acknowledge and agree that no additional Public Improvements shall be required beyond what is found in in Exhibit “E-1,” Exhibit “F,” and the conditions of approval for the Existing Development. Owner shall have the right to construct any public facilities on behalf of the City and to obtain fee credits or reimbursements from the City as further described below to the extent that such Public Improvements are included in the City’s DIF Program.
5.4 Sun Lakes Boulevard Extension. It is the mutual intent of the Parties to provide for the completion of the SLB Extension as set forth in this Section 5.4 and with mutual acknowledgement of the facts set forth in this paragraph. Owner shall dedicate, or has dedicated, portions of the Property to the City to accommodate the construction and operation of the SLB Extension (“Public Maintenance and Access Easements”). Upon request of Owner, City shall promptly vacate via quitclaim deed portions of the Public Maintenance and Access Easement based upon the following conditions precedent: (i) access to the creek culvert crossings is maintained (this Access may be reconfigured to accommodate development and operation of the Project, as reasonably determined by the City Engineer); (ii) Owner has designated a private maintenance entity to either maintain cut slope and filled embankments, or has proposed and 1153
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completed grading to eliminate cut slopes and filled embankments to accommodate the Project; (iii) Owner has maintained continued access to City-owned utility facilities. Access may be reconfigured to accommodate development and operation of the Project needs, as reasonably determined by the City Engineer.
5.5 Coordination Regarding Construction of Sun Lakes Boulevard Extension. In order to insure that construction or operation of the SLB Extension does not interfere with development or operation of the Project, Construction of the SLB Extension is under the control of the City and could be constructed by the City or by third parties designated by the City separate and apart from Owner’s Project, and Owner has a separate interest in completion of the SLB Extension to ensure access to Owner’s Project. City has entered into an Agreement for the Funding of Measure A Regional Arterial Improvements (“MARA Agreement”) with RCTC, pursuant to which the City is receiving a reimbursement grant for the SLB Extension’s design and construction costs and the City is obligated to complete the SLB Extension on or before August 31, 2027, or later if the parties to the MARA Agreement agree to one or more extensions of the date of completion (“SLB Extension Completion Date”). Additional regulatory approvals and other actions may be required to construct the SLB Extension, including approvals and actions necessary to address the Kinder Morgan pipeline that currently traverses the Property. Such approvals and actions may affect construction of the SLB Extension and cause delays beyond the control of either Party. Each Party agrees to provide the other with regular updates regarding such approvals and actions and the status of the SLB Extension.
5.5.1 Accelerated DIF Payment. Within forty five (45) days after the City has obtained all permits to commence the construction of the SLB Extension or upon the Effective Date, whichever is later, Owner shall pay City Five Million One Hundred Thousand Dollars ($5,100,000) of the Project’s Transportation DIF obligation (“Accelerated Transportation DIF Payment”) to assist the City to in its design and construction of the SLB Extension. Until the SLB Extension is completed, the City shall only use the Accelerated Transportation DIF Payment to pay for design and construction costs of the SLB Extension.
5.5.2 Owner’s Contingency.
(a) No later than sixty (60) days before the SLB Extension Completion Date, City shall give Owner written notice whether the SLB Extension will be completed by the SLB Extension Completion Date, and if not, when the City estimates that the SLB Extension will be completed (“SLB Estimated Completion Date”).
(b) If the SLB Estimated Completion Date is greater than sixty (60) days after the SLB Extension Completion Date, then Owner may, in its sole discretion, prepare a plan (“Owner’s Plan”) specifying how Owner would complete the SLB Extension if given control over construction. Owner shall submit Owner’s Plan to the City for review and approval, with such approval not to be unreasonably withheld. The Owner’s Plan must specify (i) the actions needed to finish the SLB Extension; (ii) a schedule to complete the SLB Extension, providing a completion date for the SLB Extension at least sixty (60) days before the SLB Estimated Completion Date; (iii) the cost to complete the SLB Extension and (iv) the form 1154
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and amount of financial security to be posted by Owner, in favor of the City, to insure that Owner finishes the SLB Extension. City shall review and either approve or deny Owner’s Plan no later than forty-five(45) days after submitted by Owner.
City shall neither unreasonably withhold its approval of Owner’s Plan nor deny approval of Owner’s Plan based solely upon delay incurred due to replacement of any existing contractor or consultant. If the City timely denies the Owner’s Plan, City shall notify Owner of this denial, and thereafter, the Parties shall enter into a thirty (30) day meet and confer process to attempt to reach agreement on all steps needed to complete the SLB Extension as quickly as possible. If City fails to either approve or deny the Owner’s Plan within forty-five (45) days, Owner’s Plan shall be deemed accepted by the City.
(c) City shall allow Owner to complete construction of the SLB Extension and Owner may, in its sole discretion, choose to complete the SLB Extension if: (i) completion of the SLB Extension is required by the conditions of approval in the Development Approvals and the City has not awarded a contract for construction of the SLB Extension on or before issuance of the first grading permit or six (6) months before the SLB Estimated Completion Date, whichever is sooner; (ii) the MARA Agreement is terminated before the SLB Extension is completed; (iii) City has affirmatively approved the Owner's Plan; or the Owner's Plan has been deemed accepted; or (iv) through the aforementioned meet and confer process, the Parties have agreed that Owner can complete construction of the SLB Extension.
(d) If Owner chooses to complete the SLB Extension, as provided in the preceding paragraph, Owner shall promptly provide City with written notice of its choice and responsible for all design, permitting, and construction activities necessary to complete the SLB Extension. The following provisions shall also thereafter apply:
(i) Owner shall not begin any work on the SLB Extension unless and until it enters into an agreement with the City in a form deemed acceptable to the City Attorney to indemnify, defend, and hold the City and its elected officials, officers, contractors serving as City officials, agents, and employees harmless from liability for damage and/or claims for damage for personal injuries, including death, and claims for property damage, and with respect to all other actions and liabilities for damages caused or alleged to have been caused by reason of Owner's choice to complete the SLB Extension itself and/or construction of the SLB Extension, and which may arise from the direct or indirect operations of Owner or those of Owner's contractors, agents, tenants, employees, or any other persons acting on Owner's behalf, which relate to the SLB Extension (“City Losses”). This indemnity shall apply to all City Losses, as described above, regardless of whether or not the City affirmatively approved Owner’s Plan, except for City Losses arising from the sole negligence or willful misconduct of City.
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Agreement, but shall also terminate one (1) year after City accepts Owner’s offer of dedication of the SLB Extension public improvements. (ii) Within forty-five (45) days of receipt of Owner’s written notice of its intention to complete the SLB Extension and City’s approval or deemed approval of Owner’s Plan, City shall refund to Owner any remaining unspent portion of the Accelerated Transportation DIF Payment.
The City agrees that Owner may pursue TUMF credits and reimbursements and DIF credits and reimbursement for all sums Owner expends in designing, permitting, and constructing the SLB Extension to the extent such sums are covered under the applicable DIF or TUMF study. Owner and City shall use good faith efforts to enter into a DIF Credit and Reimbursement Agreement, in substantially the same form as specified in Exhibit “G-2”. To the extent of any conflict between the terms of this Agreement and the DIF Credit and Reimbursement Agreement, this Agreement shall control. The Parties acknowledge and agree that the DIF Credit and Reimbursement Agreement shall address Owner’s construction of other Public Improvements which do not include the SLB Extension which otherwise would be funded by the City DIF program. Owner and City shall use good faith efforts to enter into an Improvement and Credit/Reimbursement Agreement Transportation Uniform Mitigation Fee Program (“TUMF Agreement”) with respect to the SLB Extension in a form acceptable to and approved by the WRCOG.
(iii) Upon completion of the SLB Extension by Owner if it does so in accordance with this Agreement, Owner shall submit a final written account of the actual costs Owner incurred in completing the design, permitting and construction of the SLB Extension (“Owner’s Costs”) to City. City shall forty-five (45) days to review and approve or disapprove Owner’s Costs, which approval shall not be unreasonably withheld. Within thirty (30) days of the approval of the Owner’s Costs, the Parties shall calculate the total amount of estimated TUMF credits and DIF credits Owner is entitled to receive, provided that the final TUMF calculation shall be subject to the review and approval of WRCOG. City will use best efforts to assist Owner in obtaining TUMF credits from WRCOG. The amount of the DIF credits Owner shall be entitled to seek and receive as allowed by this Agreement shall include the portion of the Accelerated Transportation DIF Payment that was not refunded to Owner as described above. “Owner’s Offset” is defined herein as the actual amount of TUMF credits and DIF credits received by Owner. If Owner’s Costs exceed Owner’s Offset (“Owner’s Deficit”), Owner shall be entitled to seek TUMF reimbursements (subject to WRCOG approval) and/or DIF reimbursements to recover the Owner’s Deficit to the extent there remains any difference between the maximum cost included in each of the TUMF and DIF nexus studies and TUMF or DIF funds already spent on the SLB Extension. The City, in its sole and absolute discretion, shall determine which source of reimbursement shall be used based on the applicable nexus studies. Each 1156
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Fiscal Year, City shall make the forgoing reimbursement payments to Owner to satisfy, or partially satisfy the Owner’s Deficit, with such payments to be received solely through TUMF reimbursement, DIF reimbursement provided that Owner does not recover more than Owner’s Deficit. Notwithstanding anything to the contrary in this Agreement, the City shall have no obligation to reimburse Developer from its general fund or other sources except from applicable DIF or TUMF as provided above, but City, in its sole and absolute discretion, may choose to reimburse Developer from other sources aside from DIF or TUMF funds.
5.6 Sunset Avenue Improvements. As specified in Exhibit “F”, Owner or third parties shall construct and install or fund the construction of improvements to Sunset Avenue (“Sunset Avenue Improvements”). Owner’s construction and installation or its funding of the Sunset Avenue Improvements, if undertaken by Owner, shall occur as specified in the Initial Phasing Plan, as defined in Section 3.5.2, which may be amended in the future as provided in Section 3.5.2.
Pursuant to the DIF Credit and Reimbursement Agreement attached hereto as Exhibit G-2, Owner shall be entitled to receive a partial DIF credit if Owner constructs or funds the construction of the Sunset Avenue Improvements to the extent such improvements are included in the City’s DIF program and nexus study. In the event that Owner constructs any Sunset Avenue Improvements that are not included in the City’s DIF program (“Non-DIF Sunset Improvements”), City agrees to use good faith efforts at such time as it has the legal authority to do so to (i) impose a fair share payment condition of approval onto any third party developer’s project which would benefit from the construction of the Non-DIF Sunset Improvements to the extent of their fair share (“Third Party Fair Share Payments”); and (ii) collect all Third Party Fair Share Payments. Regarding the Rancho San Gorgonio project Owner and City agree that this project’s entitlements contain conditions of approval that obligate this developer to install portions of the Sunset Avenue Improvements. City shall use good faith efforts to enforce these entitlements’ conditions of approval regarding this developer’s required Sunset Avenue Improvements, and shall use good faith efforts to collect this developer’s Third Party Fair Share Payments to the extent it has the legal authority to do so. City shall distribute all Third Party Fair Share Payments to Owner within thirty (30) days of City’s receipt of such payments provided that Owner has provided City with current up to date payment information upon request. However, City shall have no obligation to incur any legal fees to collect Third Party Fair Share Payments except to the extent such legal fees are advanced by Owner. For the sake of clarity, City shall have no liability to Owner to pay Third Party Fair Share Payments to Owner except to the extent that it receives Third Party Fair Share Payments from a third-party developer. If third parties construct Sunset Avenue Improvements not included in the City’s DIF program, Owner shall pay its fair share of such facilities to the City within thirty (30) days of receiving written notice from the City to make such payment.
5.7 Payment of “Fair Share” Share of Certain Roadway Improvements. To help facilitate the City’s achievement of its goals and policies with respect to roadway improvements, Owner agrees to pay its proportional or Fair Share (as defined in Section 5.12.2) of the roadway improvements listed on Exhibit “I”. The Fair Share payments shall become due at the times specified on Exhibit “I”; or if there is no time specified in Exhibit “I”, at such time as reasonably required by the City; or as otherwise established in conditions of approval for Subsequent Development Approvals, if any.
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5.8 Land Reservation, Conveyance, and Dedication.
5.8.1 Owner shall reserve a portion of the Property suitable for construction of a fire station by the City or County (“Fire Station Property”). The Parties have already tentatively approved the location of the Fire Station Property on portions of parcels 4 and 34 of Tentative Parcel Map No. 38118. The Parties agree to work cooperatively and in good faith to identify a suitable final location of the Fire Station Property no later than one (1) year after the Effective Date. The Parties agree that the Fire Station Property must be at least two and one half (2 ½) acres and not greater than three (3) acres in size. Owner shall reserve and dedicate the Fire Station Property to the City at no cost to the City no later than three (3) years from the Effective Date.
After the City acquires the Fire Station Property, City or County shall not use the Fire Station Property for any use other than a fire station, a reverse osmosis facility, or both. Regardless of whether the City elects to develop a fire station, Owner has agreed to make the Fire Station Payment in accordance with Section 5.10.4. Under no circumstances shall Owner be obligated to pay any sums for the construction of the fire station over and above the Fire Station Payment.
5.8.2 Owner shall reserve a portion of the Property suitable for construction of a water tank (“Water Tank Property”). The Parties have already tentatively approved the location of the Water Tank Property on portions of parcels 4 and 34 of Tentative Parcel Map No. 38118. The Parties agree to work cooperatively and in good faith to identify the final location of the Water Tank Property no later than one (1) year after the Effective Date. The Parties agree that the Water Tank Property must be no greater than two (2) acres in size. Owner shall reserve and dedicate the Water Tank Property to the City at no cost to the City, no later than three (3) years from the Effective Date. After acquiring the Water Tank Property, City or its successors shall not use the Water Tank Property for any use other than a water tank. Under no circumstances shall Owner be obligated to pay for the construction of the water tank and related uses.
5.8.3 Owner shall reserve a portion of the Property for a Banning Electric Utility Substation (“Electrical Property”). The Parties have tentatively approved the location of the Electrical Property, on Tentative Parcel Map No. 38118. The Parties agree to work cooperatively and in good faith to identify a suitable final location of the Electrical Property no later than one (1) year after the Effective Date. Owner shall reserve and dedicate the Electrical Property to the City at no cost to the City no later than three (3) years from the Effective Date. After acquiring the Electrical Property, City or Banning Electric Utility shall not use the Electrical Property for any use other than a utility substation and related uses
5.8.4 Owner shall reserve a portion of the Property suitable for construction of a reverse osmosis facility (“RO Property”). The Parties have already tentatively approved the location of the RO Property on portions of parcels 10, 31 and 33 of Tentative Parcel Map No. 38118. The Parties agree to work cooperatively and in good faith to identify a suitable final location for the RO Property no later than one (1) year after the Effective Date. The Parties agree that the RO Property must be no greater than two (2) acres in size. Owner shall reserve and dedicate the RO Property to the City at no cost to the City, no later than three (3) years from the Effective Date. After acquiring the RO Property, City or its successors shall not use the RO Property for any use other than for an RO facility and related uses. Under no circumstances shall Owner be obligated to pay for the construction of the reverse osmosis facility. 1158
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5.9 Electrical Substation.
5.9.1 Owner shall contribute Five Hundred Thousand Dollars ($500,000) for the design and environmental review of an electrical Substation, (“Banning Electric Initial Contribution”). Upon receipt of the Banning Electric Initial Contribution, City shall promptly commence the design and environmental review of the Substation, as defined below. The City and Owner acknowledge and agree that construction of the Substation cannot proceed, if at all, unless and until City undertakes and completes environmental review under CEQA, and the City obtains all necessary permits and clearances to construct the Substation. The City’s obtaining all necessary environmental clearances, permits and other clearances are, collectively (“Substation Clearances”). The entering into of this Agreement by the Parties does not commit the City to construct the Substation, but rather this Agreement establishes the framework and the procedure for the City to construct the Substation, if the City ultimately determines, in its sole discretion, to commence the design, permitting process and construction of the Substation. The Substation shall be designed and constructed to provide at least 40 Mega Volt Amperes (“Substation”). The Parties acknowledge and agree that the estimated cost to design, permit and construct the Substation (“Substation Costs”) is Twelve Million Five Hundred Thousand Dollars ($12,500,000). City shall design and construct the Substation, and obtain all necessary governmental and private party approvals. The design, components, and schedule to construct and complete the Substation shall be based upon an Engineer’s Estimate, discussed below. The City shall complete the Engineer’s Estimate within ninety (90) days after City completes the design of the Substation. Owner shall pay the Banning Electric Initial Contribution ninety (90) days after the Effective Date. If the City chooses, in its sole discretion, to not design or construct the Substation, City shall refund the Banning Electric Initial Contribution within thirty (30) days after City notifies Owner of its decision to not design and construct the Substation. Upon request of Owner, City shall provide Owner with documentation demonstrating that the Banning Electric Initial Contribution has only been used for design and environmental review of the Substation. Any portion of the Banning Electric Initial Contribution not used for design and environmental review retained by City shall result in a reduction in the amount of the Banning Electric Final Contribution, defined below, unless City chooses to not design and construct the Substation..
5.9.2 Upon the City’s obtaining the Substation Clearances, Owner shall further contribute to the completion of the Substation, by making the Banning Electric Final Contribution in the amount of Nine Million Five Hundred Thousand Dollars ($9,500,000) as specified in Section
5.9.3(a). The City shall make an in-kind contribution valued at approximately Two Million, Five Hundred Thousand Dollars ($2,500,000) consisting of City staff time, labor, materials and equipment, which may include, but not limited to: two (2), twenty (20) MVA transformers. The Engineer’s Estimate shall: (i) be based upon substantial objective evidence (ii) accurately specify the Substation Costs, which shall not exceed Twelve Million Five Hundred Thousand Dollars ($12,500,000) unless City provides Owner the information required by Section 5.9.3; and (iii) establish a schedule concerning the construction and completion of the Substation. The City shall share the Engineer’s Estimate with Owner, for Owner’s reasonable approval, which shall not be unreasonably withheld or conditioned. Owner shall have sixty (60) days from receipt of the Engineer’s Estimate to review it, after which time Owner shall be deemed to have approved the Engineer’s Estimate unless Owner has presented written objections to the City. 1159
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5.9.3 Owner’s obligation to fund the Substation Costs shall not exceed the amount of the Banning Electric Initial Contribution and an additional Nine Million Five Hundred Thousand Dollars ($9,500,000) (“Banning Electric Final Contribution”) plus the Banning Electric Initial Contribution of Five Hundred Thousand Dollars ($500,000.00) for a grant total of Ten Million Dollars ($10,000,000.00) (“Total Electric Contribution”). Within thirty (30) days after City has obtained the Substation Clearances (“Substation Funding Date”), Owner shall deposit One Million Five Hundred Thousand Dollars ($1,500,000) into an escrow account or funds control, with the escrow holder to be mutually selected by the Parties. In addition, on or before the Substation Funding Date, Owner shall deposit in the escrow account, Eight Million Dollars ($8,000,000), or provide security in the form of a bond or letter of credit in favor of the City, in the amount of Eight Million Dollars ($8,000,000), or a combination of bonds, letters of credit and and cash. Owner, in its sole and absolute discretion, shall determine the form of such security to be provided. Regardless of the amount of the Engineer’s Estimate, in no event shall Owner be required to contribute any funding in excess of the Banning Electric Initial Contribution and the Banning Electric Final Contribution. If the Engineer’s Estimate exceeds Twelve Million Five Hundred Thousand Dollars ($12,500,000), the City shall provide written documentation (“Substation Excess Cost Documentation”) to Owner demonstrating how the City intends to pay all costs in excess of Twelve Million Five Hundred Thousand Dollars ($12,500,000) (“City Substation Payment”). Prior to Owner’s payment of the Banning Electric Final Contribution, City shall provide the Substation Cost Documentation to Owner, for Owner’s approval, which approval shall not be unreasonably withheld or conditioned. Owner shall either approve or deny the Substation Cost Documentation sixty (60) days after it is received. If Owner denies the Substation Cost Documentation it shall specify in writing to City the specific reasons for so denying the Substation Cost Documentation and shall negotiate reasonably and in good faith a resolution of the issue with City within ten (10) days thereafter. If Owner fails to provide written approval or denial of the Substation Cost Documentation within this sixty (60) day period, then Owner shall be deemed to have approved the Substation Excess Cost Documentation. (a) After Owner’s provision of the Banning Electric Final Contribution, the City shall promptly take all necessary steps in order for construction of the Substation to commence. Prior to commencing construction, City shall provide documentation to Owner, demonstrating that the construction contract for the Substation Costs is consistent with the amount specified in the Engineer’s Estimate or the lowest responsive and responsible bid received in accordance with applicable public bidding laws (“Low Bid”), and the schedule established by the Engineer’s Estimate. Upon receipt of this documentation from City, Owner shall deposit into an escrow account, as provided below, all necessary documents to convey the Electrical Property to the City (“Conveyance Documents”). City shall notify Owner, in writing, when the construction contract for the Substation has been awarded. Upon receipt of this written notice from City, Owner shall immediately authorize the escrow holder to release the Conveyance Documents, and will insure that the Conveyance Documents are recorded in the official records of the County Recorder. Upon commencement of construction, the following process shall be followed to fund the construction of the Substation, which shall continue until construction of the Substation is completed: (i) Upon City’s receipt of invoices from the contractor retained to construct the Substation, City shall present such invoices to Owner; (ii) If such invoices comport with information in the Engineer’s 1160
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Estimate or the Low Bid, within thirty (30) days of receipt of such invoices, Owner shall authorize payment of the invoices from the cash deposited in the escrow or funds control, and after such authorization is issued, City shall use the proceeds to pay such invoices or reimburse itself if it previously paid the invoice from its own funds; (iii) Within thirty (30) days after the cash is withdrawn from the escrow, Owner shall deposit into the escrow the same amount of cash which was withdrawn from the escrow, and shall continue to do so, upon the City’s submission of invoices to Owner, until Owner has deposited into escrow the entire amount of the Banning Electric Final Contribution; and (iv) Within thirty (30) days after the cash is withdrawn from the escrow, City shall authorize a reduction in the amount of security posted by Owner, in the same amount as the amount of cash withdrawn from the escrow. Owner shall have the ability to enter the Electrical Property while construction of the Substation is ongoing, to determine the progress and timing of the construction. If the cost of the Low Bid exceeds the amount of the Engineer’s Estimate, or of the cost of construction exceeds the Banning Electric Final Contribution for any reason, including due to change orders, the obligation of Owner to pay the Banning Electric Final Contribution shall not terminate or abate, but the City shall be obligated to fund any such additional amount to complete the Substation.
(b) Due to Owner’s payment of the Total Electric Contribution and City’s adoption of the Electric Facilities DIF, the Parties acknowledge and agree that Owner shall receive Electric Facilities DIF credits in the amount of the Project’s entire Electric Facilities DIF obligation (“Electric DIF Obligation”), and Owner shall not be obligated to pay the Electric Facilities DIF. It is agreed by City and Owner that Owner’s projected electrical demand, if the Project were to receive its electricity from the Substation, would be expected to account for fifty-four percent (54%) of the Substation’s capacity (“Substation Fair Share Percentage”).
Upon completion of the Substation, Owner will be entitled to reimbursement from the City for the difference between the sum of its Banning Electric Initial Contribution and its Banning Electric Final Contribution, on the one hand, and the Electric DIF ObligationSubstation Fair Share Percentage of the Substation Costs, on the other hand (“Substation Reimbursement”). Owner shall begin to receive the Substation Reimbursement in the first Fiscal Year after the City issues a Notice of Completion of the Substation. The Substation Reimbursement shall be paid to the Owner (i) solely through cash payments from the City in equal annual installments over a term of ten (10) years, or more quickly, in the sole and absolute discretion of the City; or (ii) third party developers to the extent actually paid, or a combination thereof, with the City, in its sole discretion, to determine which payment sources are to be used to pay the Substation Reimbursement. The City shall use good faith efforts to expedite the payment of the Substation Reimbursement as quickly as reasonably possible. City shall reserve electrical power capacity equal to the Substation Fair Share Percentage to service the Project so long as the Owner has paid the full amount of the Banning Electric Final Contribution and development of the Project remains in substantial compliance with the Project Initial Phasing Plan set forth in Exhibit “E-1”. Except as otherwise 1161
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provided in this Section 5.9.3, the City shall have no obligation to pay or reimburse Owner for any portion of the cost of the Substation Costs.
5.10 Additional Public Benefits. Owner shall provide the following additional Public Benefits:
5.10.1 Maintenance of Private Roads. Owner shall maintain all private roads and sidewalks and landscape areas within and fronting the public right-of-way on the Property in accordance with the requirements of the Specific Plan and any conditions of approval.
5.10.2 Open Space Dedication. At no cost to City and without reimbursement or credit to any DIF, Owner will set aside and grant to City an irrevocable offer to dedicate to the City, approximately 52.8 acres as Open Space Resource land. Notwithstanding the foregoing, Owner may be able to receive reimbursement or MSHCP impact fee credits from the Regional Conservation Agency (“RCA”) if RCA determines that Owner is entitled to MSHCP impact fee credits or reimbursement. Subject to approval from RCA, City shall have sole and absolute discretion whether to accept such dedication. The Parties acknowledge and agree that the acreage of the dedicated Open Space Resource land may be reduced, based upon required mitigation which may be imposed on development of the Project by other public agencies, such as the U. S. Fish & Wildlife Service, U. S. Army Corps of Engineers, California Department of Fish & Wildlife or the Western Riverside Regional Conservation Authority (collectively, “Resource Agencies”). In addition, the Parties acknowledge and agree that the Resource Agencies may limit use of the Open Space Resource land, and the Parties agree that they will both abide by any and all applicable restrictions which may be imposed by the Resource Agencies. However, if habitat restoration, habitat mitigation and monitoring plan, endowment agreement or other similar obligations are required by the Resource Agencies solely in connection with development of the Project, the same shall be the sole obligation of the Owner.
5.10.3 Park Dedication. Owner shall reserve and dedicate to City, at no cost to City and without reimbursement or credit to any DIF, approximately 125 acres for the Park. Owner shall be responsible for the design and the cost of constructing the Specific Plan Park Facilities.
Owner shall be responsible, at its sole cost, to maintain the Park, and City shall use best efforts to assist Owner in its efforts to obtain grants or tax benefits in connection with Owner’s reservation of the Park. Owner shall be responsible for maintaining the Park upon completion. City agrees that Owner shall receive parks and recreation development impact fee credits, if the Specific Plan Park Facilities meet the applicable criteria of the parks and recreation development impact fee program, on a dollar-for-dollar basis for all Owner’s costs incurred for designing and constructing the Specific Plan Park Facilities. Prior to receiving such development impact fee credits, the City shall require that Owner provide proof in the form of paid invoices or receipts for the incurred costs to insure all such costs were actually incurred. If the City chooses to expand the Specific Plan Park Facilities after the effective date to include facilities not previously included in the Specific Plan (“Additional Park Facilities”), City shall provide written notification to Owner no later than City’s approval of Owner’s Specific Plan Park Facilities plans, and the Parties shall meet and confer and use good faith efforts to enter into a Park improvement plan, addressing the Additional Park Facilities that will address an appropriate apportionment of the costs to design and construct the Additional Park Facilities.
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5.10.4 Fire Station Payment. Owner shall contribute SixteenFifteen Million Dollars ($16 ($15,000,000) (“Fire Station Payment”) to the City to be used for construction of the fire station. Owner shall pay the City TwoOne Million Five Hundred Thousand Dollars ($21,500,000) of the Fire Station Payment within six (6) months of the Effective Date. Owner shall pay the City the remainder of the Fire Station Payment within sixty (60) days after City obtains all necessary approvals to commence construction of the fire station. Owner acknowledges that neither the City nor the Riverside County Fire Department has considered or identified a need for a fire station at the Property, there is no current plan for development of a fire station and, if desired, the planning, design, and construction of any fire station would occur at an undetermined future date by the City. Construction of a fire station cannot proceed, if at all, unless and until City undertakes and completes environmental review under CEQA, and the City obtains all necessary permits and clearances to construct the fire station. If the City determines in its sole and absolute discretion to not construct the fire station, then the City may use the proceeds of the Fire Station Payment for any City purpose. In such a situation, City shall provide written notification to Owner of its determination not to build the fire station within one (1) year of the Effective Date. If such notification is received, Owner shall make the Fire Station Payment based upon the following schedule: (i) One Million Dollars ($1,000,000) prior to issuance of occupancy permits for Five Hundred Thousand (500,000) square feet of warehouse building(s); (ii) Three Million Dollars ($3,000,000) prior to issuance of occupancy permits for One Million (1,000,000) square feet of warehouse building(s); (iii) Three Million Dollars ($3,000,000) prior to issuance of occupancy permits for Two Million (2,000,000) square feet of warehouse building(s); (iii) Three Million Dollars ($3,000,000) prior to issuance of occupancy permits for Three Million (3,000,000) square feet of warehouse building(s) and (iv) Three Million Five Hundred Thousand Dollars ($3,500,000) prior to issuance of occupancy permits for Three Million Five Hundred Thousand (3,500,000) square feet of warehouse building(s). Notwithstanding the forgoing the entire amount of the Fire Station Payment by Owner to City shall be made no later than five (5) years from the Effective Date. The amount of the Fire Station Payment shall be subject to an “Annual Escalation Factor” on each anniversary of the Effective Date during the term of this Agreement equal to the annual percentage change in the Consumer Price Index published by the U.S. Bureau of Labor Statistics for “All Urban Consumers” in the Riverside-San Bernardino-Ontario Area, measured as of the month of April in the previous Fiscal Year, but not less than one percent (1%) and not greater than five percent (5%).
5.10.5 Fire Equipment Payment. Owner shall contribute One Million Dollars ($1,000,000) (“Fire Equipment Payment”) to the City for the City to use to acquire fire equipment for the fire station. Owner shall make this payment within one hundred eighty (180) days from when the City obtains all necessary approvals to construct the fire station. As specified in Section
5.10.4, if City determines to not use the proceeds of the Fire Station Payment to construct the fire station, then the City may use the proceeds of the Fire Equipment Payment for any City purpose.
In such a situation, Owner shall make the Fire Equipment Payment to the City prior to issuance of occupancy permits for Four Million (4,000,000) square feet of warehouse building(s).
Notwithstanding the forgoing the entire amount of the Fire Equipment Payment shall be made by Owner to City no later than five(5) years from the Effective Date.
5.10.6 City Grant. Owner shall provide City with a grant of Seven Hundred Fifty Thousand Dollars ($750,000) (“City Grant”), with the proceeds solely to be used by the City to aid in City downtown beautification or small business assistance for small businesses located in 1163
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the City. The City Grant is to be disbursed in three (3) equal payments of Two Hundred Fifty Thousand Dollars ($250,000): (i) within sixty (60) days of the Effective Date; (ii) within twelve (12) months of the Effective Date; and (iii) within twenty four (24) months of the Effective Date.
5.10.7 Employment Outreach. Owner shall include in all leases for the Project the requirement that each tenant provide the City with written notice that each tenant is intending to hire employees for its business, with such notice issued at least two (2) weeks before each tenant intends to commence its operations. City shall provide notice to City residents of these commencements of operations.
5.10.8 Animal Shelter Grant. Owner shall provide City with a grant of Five Hundred Thousand Dollars ($500,000), with the proceeds solely to be used to build or operate an animal shelter. This payment shall be made to City prior to issuance of first grading permit of an industrial building.
5.11 Development Fees. Development Fees currently imposed are identified in City Resolution 2019-112 adopted by the City Council on September 10, 2019. Development Fees or “DIF” also includes TUMF and MSHCP. A schedule showing the Development Fees in place as of the Effective Date as Exhibit “H” only for the specific uses therein identified. The City shall not impose any future mitigation measure, exaction or Development Fee on the Property, the Project or the Development Plan (unless modifications to the Project necessitate such future mitigation measures, exactions or Development Fees, which are reasonably related and roughly proportional to the impacts associated with modifications to the Project) or any portion thereof, except those existing Development Fees in existence on the Effective Date of this Agreement as they may be amended and increased from time to time and for different improvements and/or uses as Owner may later develop and for new categories as provided in this paragraph. Further, except as otherwise provided herein the City shall not impose any new categories of Development Fees to the Project (“DIF Vesting”). Notwithstanding the foregoing, the DIF Vesting shall terminate on the seventh (7th) anniversary of the Effective Date (“DIF Vesting End Date”). After the DIF Vesting End Date, the City may apply subsequently adopted new categories of DIF to the Project, the Property and the Development Plan if the same are applied uniformly to development either (i) throughout the City or (ii) within a defined area of benefit that includes the Property if the subsequently adopted DIF is not applied on an ad hoc basis solely to the Project and the subsequently adopted fee does not physically prevent development of the Property for the uses and to the density and intensity of development set forth in this Agreement and the Development Approvals.. Notwithstanding the forgoing, it is understood and agreed that when the OwnerDeveloper applies for permits or entitlements under the Development Plan the more detailed plans submitted in connection with the same may disclose the need for easements, dedications or rights of way for Public Improvements serving the Project not previously foreseeable and the Developer shall cooperate in good faith with City to grant such rights to City at no cost to City.
5.12 Fair Share Payments; Oversized Improvements; Fee Credits.
5.12.1 Construction of Oversized Public Improvements. The Parties acknowledge that certain of the Public Improvements, to be constructed by Owner may, to a greater or lesser extent, constitute Oversized Improvements and that owners of other properties may benefit from such Oversized Improvements. In addition, the City agrees that, in recognition of the regional 1164
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nature of certain street and, possibly, other improvements made to the Property by Owner, City shall use good faith efforts so that owners of all property that will reasonably benefit from the Improvements including Oversized Improvements and certain components of the Sunset Avenue Improvements as determined in accordance herewith (“Benefitted Properties”) or otherwise benefitted by the regional Improvements who apply for entitlements will pay their Fair Share for such Public Improvements, either directly or through subdivision agreements or other agreements, between such owners and the City, or between owners of Benefitted Properties.. The DIF Credit and Reimbursement Agreement shall include the obligations specified in this Section and elsewhere in this Agreement.
5.12.2 Fair Share Determination. “Fair Share” shall mean the amount if any, of Owner’s contribution to the cost of any Public Improvements and unless otherwise provided on Exhibit “I” or elsewhere in this Agreement with respect to a particular improvement, shall be calculated for the Project based on the Project’s proportion of the benefit conferred on all Benefitted Properties, as established by a regional benefit study prepared by independent professional consultants experienced in the preparation of “zone of benefit” studies. The consultants shall be selected by City, and their conclusions shall be subject to review and approval by City. City shall afford Owner, and any other involved developer(s), the opportunity to review and comment on the tentative conclusions, and such comments shall be taken into consideration by City in its review. The costs of any such study shall be deemed to be a part of the cost of the Oversized Facility to which it pertains. The fees and costs of the consultants shall be solely paid, initially, by the developers seeking entitlements and then involved. The Parties recognize, however, that it will not always be possible to implement or achieve such goals, given the size, timing of development and nature of the other Benefitted Properties, and nothing herein shall be deemed to require City to fund or reimburse any portion of the excess costs other than from funds actually collected from third party developers expressly for such purpose. For the sake of clarity, the City shall not be responsible to pay for the cost of any such improvements or any portions thereof out of any fund not specifically set aside for such purpose including but not limited to its general fund or special fund revenues.
5.12.3 Fee Credits. To the extent an improvement is included in City’s current Nexus Study that is a component of City’s DIF program, the City shall recognize and apply in lieu credit against the fees associated with the specific Nexus Study, equal to the actual documented cost of improvements and/or dedications made in the development of the Project by Owner, even if improvement was funded by a CFD or other alternative financing mechanism, and for which the fees would otherwise be imposed in accordance with City ordinances and resolutions; provided, however, that such in lieu credit shall not exceed the amount established by the City’s DIF program for construction of such improvements and/or dedications. These in lieu fee credits shall be further defined within the DIF Credit and Reimbursement Agreement. For the sake of clarity, it is understood and agreed by Owner that credits to TUMF and MSHCP development impact fees shall be subject to the rules of the Western Riverside Regional Council of Governments (“WRCOG”) and Western Riverside Regional Conservation Agency rules concerning fee credits as administered by those agencies. This paragraph shall apply to all DIF credits sought by Owner under this Agreement.
5.13 Limits on Public Funds. Notwithstanding anything else to the contrary herein, the parties acknowledge and agree that in no event shall the cumulative total of public funds, if any, 1165
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as defined in California Labor Code Section 1720(b), received by Owner with respect to the Project exceed the amount of the conditioned public improvements imposed on the Project as part of the Development Approvals.
6. FINANCING OF PUBLIC IMPROVEMENTS.
6.1 Intent. The intent of this Section 6 is to establish the contractual framework for mutual cooperation between the City and Owner necessary to finance and implement the Project.
Accordingly, the City shall take all actions reasonably necessary, and Owner shall take all actions reasonably necessary and shall reasonably cooperate, as appropriate, in furtherance of the development and operation of the Project.
6.2 Formation of Community Facilities Districts.
6.2.1 Owner agrees to submit a petition(s) to the City and or California Statewide Communities Development Authority (“CSCDA”) under the Mello Roos Act for formation of one or two CFDs over some or all of the Owner’s Property. Owner has the sole and absolute discretion to determine if it will proceed with one CFD or two CFDs to finance eligible facilities and TUMF and DIF payments defined herein as Authorized Facilities and Fees, and Authorized Services (as defined below). If the City is the sponsor of the CFD, the City shall initiate formation of the CFD(s) promptly following submission by Owner of any such petition and compliance with section 53318(d) of the Mello-Roos Act. City agrees to cooperate in the formation of the CFD should the Owner elect CSCDA to be the sponsor of the CFD(s). Owner agrees to vote in favor of the formation of the CFD(s) for which it has petitioned. The CFD shall also be authorized to finance City services provided to only the parcels within the boundaries of the CFD, provided such services are authorized under the Mello Roos Act and to the extent that the services do not supplant services already available within the territory of the CFD at the time the CFD is created (“Authorized Services”).
6.2.2 The Rate and Method of Apportionment of Special Taxes for the CFD (“RMA”) shall provide, in part:
(a) Special taxes shall be levied to finance Authorized Facilities and Fees, should the Owner, in its sole and absolute discretion, decide to form the CFD to finance any such Authorized Facilities and Fees, which decision shall remain subject to the approval of the City;
(b) Special taxes for Authorized Services (“Service Special Tax”) shall only be levied against parcels used for industrial/warehouse/logistic purposes (collectively, “Industrial Property”) and the levy of the Service Special Tax shall commence upon the issuance of a certificate of occupancy prior to May 1 for an Industrial Property;
(c) The maximum Service Special Tax rate in the first year that there is a levy of the Service Special Tax for an Industrial Property parcel shall be at a rate of $0.20 per building square foot, not including space devoted to stairwells, public restrooms, vehicle parking and areas incident thereto, and mechanical equipment incidental to the operation of any such building, which amount shall be subject to 1166
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an “Annual Escalation Factor” equal to the annual percentage change in the Consumer Price Index published by the U.S. Bureau of Labor Statistics for “All Urban Consumers” in the Riverside-San Bernardino-Ontario Area, measured as of the month of April in the previous Fiscal Year, but not less than one percent (1%) and not greater than five percent (5%);
(d) The CFD for Authorized Services shall be formed prior to the City’s issuance of a final certificate of occupancy for the first Industrial Property; and (e) A budgeting process that includes that each Fiscal Year the Service Special Taxes for each parcel shall be reduced by 100% of the aggregated amount of Sales Tax Revenues generated by the Industrial Property within the boundaries of the CFD and collected by the City in the preceding Fiscal Year on a pro rata basis based on taxable building square footage for each parcel.
6.2.3 Owner and the City shall cooperate reasonably in developing the RMA(s).
Promptly following Owner’s request to have CFD Bonds issued, Owner and the City shall meet with the City’s public financing consultants to determine reasonable and appropriate issuance dates, amounts, and main financing terms. Contemporaneously with the formation of the CFD, Owner and the City shall enter into a CFD Acquisition and Reimbursement Agreement that shall apply to the acquisition and construction and/or reimbursement of Authorized Facilities and Fees.
6.2.4 In the event Owner conveys any portion of the Property to City or any Outside Agencies and said Property (or part thereof) is subject to payment of special taxes for Authorized Facilities and Fees and CFD Bonds have been issued and are outstanding, Owner shall prepay the special taxes pursuant to the terms of the RMA with respect to the portion of the Property being conveyed prior to completion of any such conveyance.
6.2.5 Except to the extent permitted by this Section 6 or otherwise approved by Owner, the City shall not initiate the formation of any other land-secured financing district or assessment district involving the levy of special taxes or assessments for facilities or services with regards to the Property.
6.3 City Council Approval. Notwithstanding the foregoing, it is acknowledged and agreed by the Parties that nothing contained in this Section 6 shall be construed as committing or requiring the City Council to authorize and approve the formation of the CFD, or to issue and sell CFD Bonds.
6.4 City’s Reimbursement to Owner. Owner shall be entitled to reimbursement from the City for: (i) an Owner’s Deficit, if such a deficit occurs, as provided in Section 5.5.2(d)(iii), and (ii) the Substation Reimbursement, as provided in Section 5.9.3(b) (collectively, “Maximum Reimbursement Payment”).
7. REVIEW FOR COMPLIANCE.
7.1 Annual Review. The Community Development Director, in consultation with the City Manager and City Attorney, shall review this Agreement annually, on or before the September 15th of each year commencing on the September 15th at least six months after the Effective Date, 1167
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in order to ascertain the good faith compliance by Owner with the terms of the Agreement. This review shall be limited in scope to compliance with the terms of this Agreement pursuant to Government Code Section 65865.1 and the Banning Municipal Code, in effect on the Effective Date. On or before July 1st of each year, Owner shall submit an annual monitoring report, in a form specified by the Community Development Director, providing all information necessary to evaluate such good faith compliance as determined by the Community Development Director.
7.2 Procedure.
7.2.1 During either an annual review or a special review at a public hearing, Owner shall be required to demonstrate good faith compliance with the terms of the Agreement.
7.2.2 Upon completion of an annual review or a special review, the Community Development Director shall submit a report to the Planning Commission and City Council setting forth the evidence concerning good faith compliance by Owner with the terms of this Agreement and his recommended finding on that issue. The Planning Commission shall hold a public hearing regarding Owner’s good faith compliance with this Agreement.
7.2.3 Within thirty (30) days following the date of the Planning Commission’s public hearing the Planning Commission shall forward its recommendation to the City Council.
After receiving the Planning Commission’s recommendation, the City Council shall hold a public hearing regarding Owner’s good faith compliance with this Agreement. If the City Council finds on the basis of quantifiable, objective substantial evidence that Owner has complied in good faith with the terms and conditions of this Agreement, the review shall be concluded.
7.2.4 If the City Council makes a preliminary finding that Owner has not complied in good faith with the terms and conditions of this Agreement, the City Council may modify or terminate this Agreement as provided in Section 7.3 and Section 7.4. Notice of default as provided under Section 8.4 of this Agreement shall be given to Owner prior to proceeding under Section 7.3 and Section 7.4.
7.3 Proceedings Upon Modification or Termination. If, upon a preliminary finding under Section 7.2, City determines to proceed with modification or termination of this Agreement, City shall give written notice to Owner of its intention so to do. The notice shall be given at least ten 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 City proposes to terminate or to modify the Agreement; and,
(c) Such other information as is reasonably necessary to inform Owner of the nature of the proceeding and the specific issues asserted by the City as not demonstrating good faith compliance.
7.4 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 shall be entitled to present written and oral evidence with respect to its good faith compliance with the 1168
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terms and conditions of this Agreement and any other matters related to this Agreement and the development of the Property. If the City Council finds, based upon substantial evidence, that Owner has not complied in good faith with the terms or conditions of the Agreement, the Council may terminate this Agreement or modify this Agreement and impose such conditions as are reasonably necessary to protect the interests of the City. The decision of the City Council shall be final, subject only to judicial review pursuant to Section 1094.5 of the Code of Civil Procedure.
7.5 Certificate of Agreement Compliance. If, at the conclusion of an annual or special review, Owner is found to be in compliance with this Agreement, City shall, upon request by Owner, promptly issue a Certificate of Agreement Compliance (“Certificate”) to Owner stating that after the most recent annual or special review and based upon the information known or made known to the Community Development Director and City 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 an annual or a special review and shall state the anticipated date of commencement of the next annual review. Owner may record the Certificate with the County Recorder. If the City shall fail to conduct any annual review, Owner shall be deemed to be in compliance with the requirements of this Agreement.
Whether or not the Certificate is relied upon by transferees or Owner, City 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 Community Development Director or City Council.
8. DEFAULT AND REMEDIES.
8.1 Remedies in General.
8.1.1 It is acknowledged by the Parties that City would not have entered into this Agreement if it were to be liable in damages under this Agreement, or with respect to this Agreement or the application thereof.
8.1.2 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 City shall not be liable in damages to Owner, or to any successor in interest of Owner, or to any other person, and Owner 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, validity, interpretation or effect of the provisions of this Agreement; or
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(d) For any injury to or interference with the rights of Owner, allegedly or actually arising out of, or incurred in connection with, the parties entering this Agreement, or their exercise of any rights under this Agreement.
8.1.3 Notwithstanding the foregoing, Owner is entitled to pursue any claims for damages against City arising out of any breach of City concerning the TUMF Improvement and Credit Agreement, Reimbursement Agreement or the DIF Credit Agreement. Likewise and notwithstanding anything to the contrary in this Agreement, the City and Owner shall have the right to pursue claims for damages against the other for the non-payment of any monetary amount expressly provided for in this Agreement. Notwithstanding the foregoing, Owner’s liability to the City and City’s liability to Owner in connection with this Agreement shall be limited to direct damages and shall exclude any other liability, including without limitation liability for special, indirect, punitive, or consequential damages in contract, tort, warranty, strict liability or otherwise.
If either City or Owner fail to make a payment due under this Agreement on the date specified in this Agreement, interest shall accrue on such amount at the rate of ten percent (10%) per annum until such amount is paid in accordance with this Agreement. Claims by Owner concerning the TUMF Improvement and Credit Agreement must be brought against WRCOG and not City.
Claims by Owner concerning MSHCP implementation must be brought against RCA and not City.
8.2 Specific Performance.
8.2.1 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 the Parties for the following reasons:
(a) Money damages are unavailable against City except as provided in Section 8.1 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.
8.2.2 Accordingly, it is expressly recognized that injunctive relief and specific enforcement of this Agreement are proper and desirable remedies, and it is agreed that any claim by Owner against City for an alleged breach of this Agreement shall be remedied by injunctive relief or an appropriate action for specific enforcement of this Agreement. It is agreed that specific performance is not available to City against Owner, although City can seek the remedy of injunctive relief against Owner.
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8.3 General Release. Except for non-damage remedies, including the remedy of specific performance and judicial review as provided in this Agreement, Owner, for itself, its successors and assignees, hereby releases the City, its officers, agents, employees, and independent contractors from any and all claims, demands, actions, or suits of any kind or nature whatsoever arising out of any liability, known or unknown, present or future, including, but not limited to, any claim or liability, based or asserted, on any law or ordinance which seeks to impose any other monetary liability or damages, upon the City because it entered into this Agreement or because of the terms of this Agreement. Owner hereby waives the provisions of Section 1542 of the Civil Code which provides: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” Notwithstanding the foregoing, this general release is inapplicable to claims that City has breached the TUMF Improvement and Credit Agreement, Reimbursement Agreement or the DIF Credit Agreement.
8.4 Termination or Modification of Agreement for Default of Owner. Subject to the provisions contained in Section 7.4 herein, City 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, City 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. In addition to the remedies specified in this Section, if Owner fails to make any of the payments specified in Sections 5.2, 5.5.1, 5.9, 5.9.1, 5.9.3, 5.10.4, 5.10.5 or 5.10.6 after the City's completion of the process specified in this section, it may in its sole discretion withhold issuance of permits sought by Owner until such payments are made by Owner and pursue any other remedies under this Agreement.
8.5 Termination of Agreement for Default of City. Owner may terminate this Agreement only in the event of a default by City in the performance of a material term of this Agreement and only after providing written notice to City of default setting forth the nature of the default and the actions, if any, required by City to cure such default and, where the default can be cured, City 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. During the time when Owner alleges the existence of a City Default and without limiting any of its other available remedies, Owner shall not be obligated to proceed with or complete the Project or any phase of the Project, nor to reserve or dedicate any property pursuant to this Agreement. Upon a City Default, any resulting delays in Owner’s performance shall neither be a default by Owner nor constitute grounds for termination or cancellation of this Agreement by the City.
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8.6 Attorneys’ Fees. Should any legal action be brought by either Party against the other for default under this Agreement or to enforce or interpret any provision hereof, the Party prevailing in such action shall be entitled to recover against the non-prevailing Party its reasonable attorneys’ fees and costs incurred in such action.
9. THIRD PARTY LITIGATION.
9.1 To the maximum extent permitted by law, Owner must defend, indemnify, and hold the City and its elected officials, officers, contractors serving as City officials, agents, and employees ("Indemnitees") harmless from liability for damage and/or claims for damage for personal injuries, including death, and claims for property damage, and with respect to all other actions and liabilities for damages caused or alleged to have been caused by reason of Owner's activities in connection with the Development and/or construction of the Project, and which may arise from the direct or indirect operations of Owner or those of Owner's contractors, agents, tenants, employees, or any other persons acting on Owner's behalf, which relate to the Development and/or construction of the Project. This indemnity provision applies to all damages and claims for damage, as described above, regardless of whether or not the City prepared, supplied, or approved the plans, specifications, or other documents for the Project, including any associated public or private improvements.
9.2 Without limiting the generality of Section 9.1, Owner shall also defend, indemnify, and hold the Indemnitees harmless from and against any and all claims, liabilities, losses, damages, costs, and expenses arising from or related to any claims that Owner or Owner's contractors are required to pay prevailing wages pursuant to Labor Code Section 1720 et seq., in connection with the Development of the Project.
9.3 Without limiting the generality of Section 9.1, in the event of any legal action challenging the validity, applicability, or interpretation of any provision of this Agreement, any of the entitlement documents pertaining to the Project including, without limitation, the City's General Plan, Zoning Code, or any other supporting document relating to the Project, Owner shall also indemnify, defend, and hold harmless the Indemnitees with respect to all liability, costs, and expenses incurred by, and/or awarded against, the City or any of the Indemnitees in relation to such action.
9.4 Without limiting the generality of Section 9.1, Owner shall defend indemnify and hold Indemnitees 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.
9.5 With respect to any legal action or claim falling within Owner's defense, indemnity, and hold harmless obligations under this Agreement:
(a) City shall promptly notify Owner of any such claim, action or proceeding, and City shall cooperate in the defense save and except claims for damages arising through the sole active negligence or sole willful misconduct of 1172
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City or from breach of this Agreement by City, and if City fails to promptly notify Owner of any such claim, action or proceeding, or if City fails to cooperate in the defense, Owner shall not thereafter be responsible to defend, indemnify, or hold harmless City.
(b) City shall have the right to select counsel of its choice and Owner shall provide, and maintain for the duration of such action or claim, a cash deposit to City in an amount or amounts determined by the City Attorney to be reasonably necessary to cover the City's legal fees, costs, and expenses. The City’s separate counsel billing rates shall be identical to the rates City pays for its typical municipal litigation rates for legal challenges of the variety being defended. The City shall refund to Owner any unexpended funds from the deposit within thirty (30) days of any final disposition or full and complete settlement of the action or claim. (c) In the event of any litigation challenging the effectiveness of this Agreement, or any portion hereof, this Agreement shall remain in full force and effect while such litigation, including any appellate review, is pending, unless otherwise ordered by the court. Absent issuance of an injunction, Owner may elect to continue Development under this Agreement pending completion of the litigation but it shall do so at its sole risk, and the City shall not be liable for any loss suffered as a result thereof.
9.6 In the event any initiative, moratorium, referendum, statute, ordinance, limitation or other measure is enacted by or under authority of City subsequent to the Effective Date that would otherwise modify the development rights vested pursuant to this Agreement, Owner reserves the right to challenge any such enactment in a court of law should it become necessary to protect the development rights vested in the Owner pursuant to the terms and conditions of this Development Agreement, and City agrees that (subject to any judicial writ or order to the contrary) Owner shall continue to enjoy such development rights until such time, if ever, as all such challenges to the validity of such measure, or its interpretation or applicability to Owner have been finally resolved (including the expiration of all times for appeal without any appeals having been filed) adversely to Owner. Any exercise by Owner of challenged development rights shall be at Owner’s sole risk and expense, and City will not be liable to Owner if it is determined that Owner was not entitled to exercise such development rights.
9.7 This Section shall survive the expiration or earlier termination of this Agreement.
Notwithstanding the foregoing, Owner’s indemnity obligations specified in this Section 9.7 regarding Owner’s design, construction or dedication of public improvements shall terminate one (1) year after City accepts Owner’s offer of dedication of public improvements.
10. MORTGAGEE PROTECTION.
10.1 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.
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10.2 City 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. City 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 City in the manner specified herein for giving notices, shall be entitled to receive written notification from City of any default by Owner in the performance of Owner’s obligations under this Agreement.
(c) If City timely receives a request from a Mortgagee requesting a copy of any notice of default given to Owner under the terms of this Agreement, City 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. If the Community Development Director, acting in consultation with the City Manager and City Attorney, provides prior written consent, which consent shall not be unreasonable withheld, a Mortgagee in possession shall not 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 City, the performance thereof shall continue to be a condition precedent to City’s performance hereunder. Any transfer by any Mortgagee in possession shall be subject to the provisions of Section 2.42.4 of this Agreement.
11. MISCELLANEOUS PROVISIONS.
11.1 Recordation of Agreement. This Agreement and any amendment, modification, termination or cancellation thereof shall be recorded with the County Recorder by the Clerk of the Board of Supervisors within the period required by Section 65868.5 of the Government Code.
11.2 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 1174
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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.
11.3 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, including the payments set forth therein, are essential elements of this Agreement and City 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.
11.4 Preemption or Frustration of Agreement by Changes in Law. In the event that any Party has or acquires actual knowledge that: (i) state or federal law or regulations enacted after the Effective Date preempt this Agreement or City’s authority to perform hereunder, or (ii) the action or inaction of any governmental agency or quasi-public entity arising from or related to this Agreement, apart from City or any instrumentality thereof, frustrates compliance with one or more provisions of this Agreement as a matter of law, such a Party shall:
(a) Provide the other Party with written notice of such state or federal law or regulation, a copy of such law or regulation and a statement identifying how such law regulation conflicts with the provisions of this Agreement. (b) Upon notice by one Party to another as to preemption or frustration of this Agreement by law or regulation, the Parties shall promptly meet and confer in good faith and make a reasonable attempt to modify or amend this Agreement to comply with such applicable state or federal law or regulation in a manner that is least disruptive to the purpose and intent of this Agreement. If the Parties cannot agree on a manner or method to comply with such state or federal law or regulation, the Parties shall follow the Dispute Resolution procedures set forth in this in section 8 of this Agreement.
11.5 RESERVED
11.5 Force Majeure. In the event that any party hereto shall be delayed or hindered or prevented from performance of any act required hereunder by reason of acts of God, strikes, lockouts, labor troubles, riots, insurrection, terrorism, war or other reason of similar nature not the fault of the party delayed in performing the work or doing the acts required under the terms of this Agreement, then the performance of such act shall be excused for the period of the delay caused by the foregoing. Financial inability shall not be deemed an excuse for delay under this Section.
11.6 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 1175
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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.
11.7 Operating Memoranda. The provisions of this Agreement require a close degree of cooperation between the City and the Owner. It is anticipated due to the term of this Agreement that clarification, interpretation and refinements to the Development Approvals may be appropriate with respect to the details of performance of the City and the Owner. To the extent allowable by law, the Owner shall retain a certain degree of flexibility as provided herein with respect to all matters, items and provisions covered in general under this Agreement and exhibits thereto. When and if the Owner finds it necessary or appropriate to make clarification, interpretation and refinements, the Parties shall effectuate such changes, adjustments or clarifications through operating memoranda (“Operating Memoranda”) approved by the Parties in writing, which reference this Section of the Agreement. Operating Memoranda are not intended to constitute an amendment to this Agreement but mere ministerial clarifications; therefore, public notices and hearings shall not be required. The City Attorney shall be authorized, upon consultation with the Owner, to determine whether a requested clarification may be effectuated pursuant to this Section or whether the requested clarification is of such character to constitute an amendment to the Agreement which requires compliance with the provisions of this Agreement pertaining to amendments. The authority to enter into such Operating Memoranda is hereby delegated to the City Manager, and the City Manager is hereby authorized to execute any Operating Memoranda hereunder without Planning Commission or City Council action and without public hearing.
Although other matters may also fall within the scope of Operating Memoranda, any clarification, interpretation and refinements to this Agreement which does not relate to the Term, permitted uses of the Project, provisions for the reservation or dedication of land, grant of easement, or the conditions, terms, restrictions and requirements relating to Subsequent Development Approvals of City, revisions to Public Benefits (other than to the time for performance of such Public Benefits) or monetary exactions of Owner, shall be considered an “Operating Memoranda”.
Notwithstanding the foregoing, if the City Manager determines that such requested Operating Memorandum must or should be submitted for approval to the Planning Commission or City Council, the City Manager may so submit the requested Operating Memorandum for approval.
11.8 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement.
11.9 Gender and Number. As used herein, the neuter gender includes the masculine and feminine, the feminine gender includes the masculine, and the masculine gender includes the feminine. As used herein, the singular of any word includes the plural.
11.10 Rule Against Perpetuities. This Agreement shall be construed by all interested Parties, to the maximum extent possible, to be consistent with, and not in violation of, the Rule against Perpetuities.
11.11 Time of Essence. Time is of the essence in the performance of the provisions of this Agreement as to which time is an element.
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11.12 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.
11.13 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.
11.14 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.
11.15 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.
11.16 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.
11.17 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 Riverside Historic Courthouse of the Superior Court, and the Parties hereto waive all provisions of law providing for the filing, removal or change of venue to any other court.
11.18 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 City and Owner is that of a government entity regulating the development of private property and the owner of such property.
11.19 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 acknowledgement 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 1177
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consummate the transactions contemplated by this Agreement. The Parties further agree to mutually cooperate with one another in carrying out the purposes of this Agreement.
11.20 Eminent Domain. No provision of this Agreement shall be construed to limit or restrict the exercise by City of its power of eminent domain, or to mandate City’s use of eminent domain.
11.21 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, Ownershall file with the Community Development 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).
11.22 Designation of City Officials. Except for functions to be performed by the City Council, City may, at any time and in its sole discretion, substitute any City official to perform any function identified in this Agreement as the designated responsibility of any other official.
City shall provide notice of such substitution pursuant to Section 2.7; provided, however, the failure to give such notice shall not affect the authority of the substitute official in any way.
11.23 Legally Binding Contract; Enforceability.
11.23.1 It is the intent of City and Owner that this Agreement is a legally binding contract which shall prevail over the provisions of any subsequently enacted moratoria, statutes, ordinances, limitations, or other measures, whether or not enacted by City, or under the authority of City by voter initiative or referendum, and whether or not such initiative, moratorium, referendum, statute, ordinance, limitation, or other measure relates, in whole or in part, to the rate, timing, sequence, or phasing of the development or construction of all or part of the Project or the improvements or affecting parcel or Subdivision Maps, building permits, occupancy certificates, or other entitlement to use the Property which are issued by City, subject only to the rights and powers reserved to City under the terms of this Agreement and the requirements of California law.
11.23.2 This Agreement shall not become binding and shall have no force and effect whatsoever until such time as it has been approved by the City Council pursuant to a duly enacted ordinance and fully executed by and delivered to all of the Parties hereto.
11.24 Authority to Execute. The person executing this Agreement on behalf of Owner warrants and represents that he has the authority to execute this Agreement on behalf of his 1178
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corporation, partnership or business entity and warrants and represents that he has the authority to bind Owner to the performance of its obligations hereunder.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year set forth below.
[Signatures appear on following pages.]
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CITY OF BANNING
Dated:
By:
Mayor, City of Banning
ATTEST:
Sandra CalderonDaryl A. Betancur
Deputy City Clerk
By:
Deputy
(SEAL)
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Owner:
NP BANNING INDUSTRIAL, LLC
By: NPD Management, LLC,
a Missouri limited liability company
By:
Nathaniel Hagedorn, Manager
Dated:
(ALL SIGNATURES SHALL BE ACKNOWLEDGED BEFORE A NOTARY PUBLIC.
EXECUTION ON BEHALF OF ANY CORPORATION SHALL BE BY TWO CORPORATE OFFICERS.)
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CALIFORNIA ALL-PURPOSE 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, ,
Date Here Insert Name and Title of the Officer
personally appeared
Name(s) of Signer(s)
,
who proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Place Notary Seal Above Signature of Notary Public
[ACKNOWLEDGMENT PAGE TO _________________________]
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EXHIBIT “A-1”
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Development Agreement No.___
EXHIBIT “A-1”
LEGAL DESCRIPTION OF THE NORTHERN PORTION OF THE PROPERTY AND
THE SLB EXTENSION
PARCEL A:
PARCELS 1 THROUGH 4, INCLUSIVE OF MAPS AND LETTERED LOTS A THROUGH J, INCLUSIVE, OF PARCEL MAP NO.
25541, IN THE CITY OF BANNING, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ON FILE IN BOOK 166 PAGES 27
THROUGH 35, INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
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EXHIBIT “A-2”
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Development Agreement No.___
EXHIBIT “A-2”
LEGAL DESCRIPTION OF THE SOUTHERN PORTION OF THE PROPERTY PARCEL B:
PARCELS 1 THROUGH 9 AND LETTERED LOTS "A" THROUGH "O", ALL INCLUSIVE OF PARCEL MAP 28971, IN THE
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 198 PAGES 8 THROUGH 10
INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM PARCELS 3 AND 7, THOSE PORTIONS CONVEYED TO THE
CITY OF BANNING BY A DEED
RECORDED JANUARY 15, 1998 AS INSTRUMENT NO. 015506 OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
ALSO EXCEPTING THEREFROM PARCEL 3 ALL THAT PORTION CONVEYED TO THE
CITY OF BANNING BY A DEED
RECORDED MARCH 22, 2002 AS INSTRUMENT NO. 2002-146041.
PARCEL C:
PARCELS 1 AND 2 AND LETTERED LOTS A, B, AND C OF PARCEL MAP 13521, IN
THE COUNTY OF RIVERSIDE, STATE OF
CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 83, PAGES 13 THROUGH 15,
INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM THOSE PORTIONS CONVEYED TO THE CITY OF
BANNING, A MUNICIPAL CORPORATION, BY
DEED RECORDED JANUARY 15, 1998, AS INSTRUMENT NO. 98-015506, OFFICIAL RECORDS.
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EXHIBIT “B”
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Development Agreement No.___
EXHIBIT “B”
MAP SHOWING PROPERTY AND ITS LOCATION
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Development Agreement No.___
EXHIBIT “C”
EXISTING DEVELOPMENT APPROVALS
1. certification of the EIR;
2. adoption of a general plan amendment;
3. adoption of a zone change for the Northern Portion of the Property;
4. adoption of a prezoning change for the Southern Portion of the Property;
5. adoption of the Specific Plan to regulate development within the Property;
6. approval of this Agreement; and
7. approval of tentative parcel map No. TPM 38118.
COPIES OF THE EXISTING DEVELOPMENT APPROVALS LISTED ABOVE ARE ON FILE
IN THE CITY OF BANNING PLANNING DEPARTMENT AND ARE INCORPORATED HEREIN BY REFERENCE.
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EXHIBIT “D”
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Development Agreement No.___
EXHIBIT “D”
EXISTING LAND USE REGULATIONS
COPIES OF THE EXISTING LAND USE REGULATIONS LISTED ABOVE ARE ON FILE IN
THE CITY OF BANNING PLANNING DEPARTMENT AND ARE INCORPORATED HEREIN BY REFERENCE.
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EXHIBIT “E-1”
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Development Agreement No.___
EXHIBIT “E-1”
INITIAL PHASING PLAN
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EXHIBIT “F”
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Development Agreement No.___
EXHIBIT “F”
IMPROVEMENTS INCLUDED AS CONDITIONS OF
APPROVAL TO THE EXISTING DEVELOPMENT APPROVALS.
Depicted in Exhibit “E-1”, incorporated herein by reference Roadway Improvements, per Specific Plan
• Sunset Avenue (1-10 to Lincoln Street): Arterial Highway (110' R/W) - Full Width Improvements (if not constructed by others)
• Sunset Avenue (Lincoln Street to Sun Lakes Boulevard): Modified Secondary Highway (110' R/W) - Full Width Improvements
• Sunset Avenue (South of Sun Lakes Boulevard): Secondary Highway (88' R/W) - Full Width Improvements (if not constructed by others)
• Lincoln Street: Collector Street (78' R/W) - Full Width Improvements • Bobcat Road: Collector Street (78' R/W) - Half Width Improvements plus 10' of Roadway Improvements
• Highland Home Road (North of Sun Lakes Boulevard): Arterial Highway (110' R/W) – Half Width Improvements plus 10’ of Roadway Improvements • Highland Home Road (South of Sun Lakes Boulevard): Arterial Highway (110' R/W) - Half Width Improvements plus 10’ of Roadway Improvements • Utility Improvements
• Recycled Water (size varies)
• Water (size varies)
• Sanitary Sewer (size varies)
• Storm Drain (size varies)
• 24" Sanitary Sewer Dry Trunk Main (South of Sun Lakes Boulevard) • (2) Concrete Box Culvert Roadway Crossings along Lincoln Street • (1) Concrete Box Culvert Roadway Crossings along Sunset Avenue (South of Sun Lakes Boulevard)
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Development Agreement No.___
EXHIBIT “G-1”
Modifications to Project
Intentionally omitted
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Development Agreement No.___
EXHIBIT “G-2”
DIF CREDIT AND REIMBURSEMENT AGREEMENT
DEVELOPMENT IMPACT FEE CREDIT IMPLEMENTATION AGREEMENT
(Sunset Crossroads)
This DEVELOPMENT IMPACT FEE CREDIT IMPLEMENTATION AGREEMENT (“Agreement”) is made and effective this ____ day of __________, 2025, by and between the CITY OF BANNING, a California municipal corporation (“City”), and NP BANNING INDUSTRIAL, LLC, a Missouri limited liability company (“Owner”). City and Owner are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties.”
RECITALS
A. Owner is the owner and developer of certain real property comprised ___ gross acres of land, more specifically described in the legal description set forth in Exhibit “A,” attached hereto and incorporated herein by this reference (“Property”).
B. Owner has obtained certain entitlements from the City including General Plan Amendment No. __-____, Zone Change No __-____, Pre-zone Change No. __-____, the Sunset Crossroads Specific Plan No. 20-20000002, FEIR (SCH No. __________), Tentative Parcel Map No. _____, a Sign Program, and a Development Agreement, which entitlements together allow for the development of a project currently titled “Sunset Crossroads,” which is intended to include commercial and industrial uses, including, without limitation: (a) up to 268,400 square feet of commercial uses, including Travel Center Retail Uses, a Fueling Facility, and a hotel with approximately 125 rooms; (b) up to 5,545,000 square feet of industrial land uses within a 396.5- acre portion of the Property; (c) related signage; (d) approximately 65.4 acres of land designated for Open Space-Resources (52.8 acres) and Open Space-Parks (approximately 5 acres); and approximately 23.6 acres of internal circulation features (“Project”). The Development Agreement was recorded in the official records of the County of Riverside on __________ __, 2025, as Document No. 2025-________ and became effective on __________ __, 2025 (“Development Agreement”).
C. On September 10, 2019, the Banning City Council adopted Resolution 2019-112, approving updated development impact fees, including fees for General Facilities, Police Facilities, Fire Facilities, Parkland and Park Facilities, General City Facilities, Wastewater Facilities, and Water Facilities additionally the City imposes regional development impact fees pursuant to separate ordinances known as TUMF Fees and MSHCP Fees (collectively “Development Impact Fees” or “DIF”). The final Development Impact Fee Update Study dated August 7, 2019 (“DIF Nexus Study”), is currently on file with the City.
D. The Development Agreement requires Owner to pay Development Impact Fees as set forth in the Development Agreement at Section 5.11 and Exhibit “H” for the purpose of 1192
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defraying all or a portion of the cost of public improvements, public services, and community amenities related to the Project.
E. As a condition of the development approvals for the Project, as more specifically set forth the Development Agreement, City has required, or for some improvements gives the option for, Owner to design, construct, and/or install certain components of public infrastructure, and/or dedicate certain properties, that might otherwise have been funded by DIF (collectively, the “DIF Improvements”, and individually a “DIF Improvement”).
F. The City’s DIF program authorizes the City to provide a credit to project applicants against certain DIF in exchange for the applicant’s construction and dedication of public improvements covered by the nexus study for that DIF. TUMF and MSHCP credits are subject to and Owner shall comply with the rules of the Western Regional Council of Governments and the Western Riverside Regional Conservation Agreement respectively. Accordingly, the Development Agreement contemplates that, in exchange for providing the DIF Improvements, Owner shall be entitled to: (1) fee credits or reimbursements from the City for the public improvements required in Section 5.3 of the Development Agreement (“Public Improvements”), to the extent that such public improvements are included in the City’s DIF program; (2) DIF credits in the amount of Owner’s Deficit, including the portion of the Accelerated Transportation DIF Payment that was not refunded to Owner, related to the future extension of Sun Lakes Boulevard (“SLB Extension”), to the extent there remains any difference between the maximum cost included in each of the TUMF and DIF nexus studies and TUMF or DIF funds already spent on the SLB Extension; (3) a partial DIF credit due to Owner’s constructing or funding the construction of improvements to Sunset Avenue (“Sunset Avenue Improvements”) as set forth in Section 5.6 of the Development Agreement to the extent such improvements are included in City’s DIF program; (4) Parkland and Park Facilities DIF credit for the design and cost of constructing the Specific Plan Park Facilities, as set forth in Section 5.10.3 of the Development Agreement; and (5) DIF credit for Owner’s construction of Oversized Improvements to the extent an improvement is included in the DIF program, as set forth in more detail in Section 5.12 of the Development Agreement.
Sections 5.8.1 through 5.8.24 of the Development Agreement require Owner to dedicate the Fire Station Property, Water Tank Property, Electrical Property and the RO Property (“Dedication Properties”) in exchange for DIF credits, following dedication of said properties. For the sake of clarity and notwithstanding anything to the contrary herein, DIF credits shall only be due with respect to the particular DIF having the corresponding improvement identified in the Nexus Study for the DIF in question.
G. This Agreement shall be interpreted consistently with California Labor Code Section 1720(c)(2) to accomplish the Parties’ intent that the Project is a private development and exempt from payment of prevailing wages to the full extent permitted under California Labor Code Section 1720(c)(2), and any other applicable provisions and City maintains no proprietary interest in the Project; provided, however, that Owner shall pay prevailing wage for the DIF Improvements and as otherwise required by state law.
H. The Parties desire to enter into this Agreement to implement the Project in a manner consistent with the Development Agreement for the following purposes: (1) to provide for the timely delivery of the DIF Improvements; (2) to provide a means by which Owner’s costs for delivery of the DIF Improvements and related right-of-ways are offset against Owner’s DIF 1193
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obligations; and (3) to provide a means for Owner to be reimbursed for DIF Improvements in accordance with the terms of the Development Agreement.
I. It is the intent of this Agreement to implement certain provisions of the Development Agreement related to the City providing credit against Developer’s required payment of DIF for qualifying improvements. If there is any conflict between this Agreement and the Development Agreement, the Development Agreement shall control. Capitalized terms which are used in this Agreement but not defined herein shall be as defined in the Development Agreement.
J. The Parties contemplate that one or more Subdivision Improvement Agreements will be entered into in connection with a final map approved and recorded in connection with the development of the Project. The Subdivision Improvement Agreements will likely include provisions related to required insurance, bonds, warranty, and other provisions related to the construction of improvements to be accepted by the City. It is the intent of this Agreement to not duplicate, contradict, or override the terms of that Subdivision Improvement Agreements, but to have the terms of the Subdivision Improvement Agreements control in the event of a conflict with the terms of this Agreement.
NOW, THEREFORE, for the purposes set forth herein, and for good and valuable consideration, the adequacy of which is hereby acknowledged, the Parties hereby agree as follows:
TERMS
1.0 Incorporation of Recitals. The Parties hereby affirm the facts set forth in the Recitals above and agree to the incorporation of the Recitals as though fully set forth herein.
2.0 Construction of DIF Improvements. Owner shall construct or have constructed at its own cost and expense the DIF Improvements. The DIF Improvements are described and listed in the City’s May 2019 Traffic Fee Study and the DIF Nexus Study that support the imposition of the City’s Development Impact Fees, TUMF and MSHCP, as the same may be amended or added to under the Development Agreement. The DIF Improvements shall thereafter be shown and described more specifically on the plans, profiles, and specifications that will be prepared by or on behalf of Owner and approved by City, as provided by this Agreement and under applicable law.
The DIF Improvements are the public facilities identified in the Nexus Study upon which the applicable DIF Credit (as defined in this Agreement) is calculated. Owner shall be eligible to receive the applicable DIF Credit against payment of the DIF upon the proof of payment under the construction contract for the applicable DIF Improvements. Owner shall provide all equipment, tools, materials, labor, tests, design work, and engineering services necessary to fully and adequately complete the DIF Improvements.
2.1 Pre-Approval of Plans and Specifications. Owner shall obtain City approval of all plans and specifications of the DIF Improvements before starting construction. In preparing the plans and specifications, Owner shall utilize competent design professionals who timely perform design services at a competitive cost. City approval of plans and specifications shall not relieve Owner from ensuring that all DIF Improvements conform with all other requirements and standards set forth in this Agreement and under applicable law. 1194
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2.2 Bidding and Contracting Requirements. Owner shall comply with Exhibit “C” to this Agreement and all state and local laws, ordinances, regulations, codes, standards, and other requirements applicable to the bidding and contracting for the construction of the DIF Improvements including but not limited to Labor Code Section 1720 requiring the payment of prevailing wages.
2.3 Permits and Notices. Before starting any work on the applicable DIF Improvements, the contractor(s) retained by Owner for the work (each, a “Contractor”) shall, at its sole cost and expense, obtain all necessary permits and licenses and give all necessary and incidental notices required for the lawful construction of the applicable DIF Improvements and performance of the Contractor’s obligations under its contract with Owner. The Contractor shall conduct the work in full compliance with the regulations, rules, standard procedures, and other requirements contained in any permit or license issued to the Contractor.
2.4 Insurance and Public Works Requirements. Owner and all of its Contractors shall pay prevailing wages (in accordance with Articles 1 and 2 of Chapter 1, Part 7, Division 2 of the Labor Code) as required by law and otherwise comply with applicable provisions of the Labor Code, the Government Code and the Public Contract Code on work on all DIF Improvements. The Contractors shall be required to provide proof of insurance coverage throughout the term of the construction of the applicable DIF Improvements reasonably acceptable to City. The Contractors shall comply with such other reasonable requirements relating to the construction of the applicable DIF Improvements which Owner, in consultation with City, may impose by written notification delivered to the Contractors at any time. The Contractors shall provide proof to Owner, at such intervals and in such form as Owner may require, that the foregoing requirements have been satisfied.
2.5 Quality of Work/Compliance with Laws. The construction plans and specifications for the DIF Improvements shall be prepared in accordance with all applicable federal, state, and local laws, ordinances, regulations, codes, standards, and other requirements.
The DIF Improvements shall be completed in a good and workmanship like manner in accordance with all approved maps, plans, specifications, standard drawings, and special amendments thereto on file with City, as well as all applicable federal, state, and local laws, ordinances, regulations, codes, standards, and other requirements applicable at the time work is actually commenced.
2.6 Standard of Performance. The DIF Improvements shall be completed in a skillful and workmanlike manner, and consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. The Contractors shall be skilled in the professional calling necessary to perform the work and shall have all licenses, permits, qualifications, and approvals of whatever nature legally required to perform the work, and such licenses, permits, qualifications, and approvals shall be maintained throughout the term of this Agreement.
2.7 Alterations to DIF Improvements. All work shall be done, and the applicable DIF Improvements completed, as shown on approved plans and specifications, and any subsequent alterations thereto. If during the course of construction and installation it is reasonably determined that public health and safety interests require alterations in the applicable DIF Improvements, the Contractor shall undertake such design and construction changes as may be 1195
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reasonably required by City and agreed to by Owner. Any and all alterations in the plans and specifications and the applicable DIF Improvements to be completed may be accomplished without first giving prior notice thereof to the Contractor’s surety for this Agreement.
2.8 Coordination of DIF Improvements. Construction of the DIF Improvements shall include any transitions and/or other incidental work deemed necessary for drainage or public safety, as shown more specifically for the applicable DIF Improvements. Owner shall be responsible for the replacement, relocation, or removal of any component of any existing public or private improvement in conflict with the construction or installation of the DIF Improvements, to the extent that Owner is permitted to do so, with such cooperation as may be necessary from the City, including, without limitation, condemnation proceedings. Such replacement, relocation, or removal shall be performed to the satisfaction of City, which shall not be unreasonably withheld, conditioned, or delayed, and Owner shall make commercially reasonable efforts in coordinating with private owners of such improvements, if any.
3.0 Maintenance of DIF Improvements. City shall not be responsible or liable for the maintenance or care of any completed portion of the DIF Improvements until City expressly approves and accepts that portion in writing. City shall exercise no control over completed portions of the DIF Improvements until accepted. Any use by any person of any completed portion of the DIF Improvements, shall be at the sole and exclusive risk of Owner at all times prior to City’s acceptance of completed portions of the DIF Improvements. Owner shall maintain completed portions of the DIF Improvements in a state of good maintenance and repair until they are approved and accepted by City, and until the security for the performance of the completed portion of the DIF Improvements is released. It shall be Owner’s responsibility to initiate all maintenance work, but if it shall fail to do so, it shall promptly perform such maintenance work when notified to do so by City. If Owner fails to properly prosecute its maintenance obligation under this section, following thirty (30) days’ written notice by City, City may do all work necessary for such maintenance and the cost thereof shall be the responsibility of Owner and the surety under this Agreement. City shall not be responsible or liable for any damages or injury of any nature in any way related to or caused by any completed portion of the DIF Improvements or their condition prior to acceptance, except to the extent caused by, relating to, or arising out of the negligent acts or omissions or willful conduct of City or its elected officials, officers, employees, volunteers, or agents. The process and terms for the City accepting a completed DIF Improvement shall be as provided in the applicable Subdivision Improvement Agreement, if any, entered into for that applicable portion of the Project.
4.0 Fees and Charges. Owner shall, at its sole cost and expense, pay all fees, charges, and taxes required by the Development Agreement arising out of the construction of the DIF Improvements, including, without limitation, all plan check, design review, engineering, inspection, sewer treatment connection fees, and other service fees established by City. All of these fees may be included in the DIF Credit subject to the other terms of this Agreement and the Development Agreement.
5.0 City Inspection of DIF Improvements. Owner shall, at its sole cost and expense, and at all times during construction of the DIF Improvements, maintain reasonable and safe facilities and provide safe access for inspection by City of the DIF Improvements and areas where construction of the DIF Improvements is occurring or will occur. 1196
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6.0 Liens. Upon the expiration of the time for the recording of claims of liens as prescribed by Civil Code Sections 8412 and 8414 with respect to the DIF Improvements, Owner shall provide to City such evidence or proof as City shall require that all persons, firms, and corporations supplying work, labor, materials, supplies, and equipment to the construction of the DIF Improvements, have been paid in full, and that no claims of liens have been threatened (with such threats made in writing) or recorded by or on behalf of any such person, firm, or corporation.
7.0 Acceptance of DIF Improvements; As-Built or Record Drawings. As the applicable DIF Improvements are completed by Owner and approved by City, and if they comply with all applicable federal, state, and local laws, ordinances, regulations, codes, standards, and other requirements, City shall be authorized to accept the completed DIF Improvements or any portion thereof as provided herein or in the applicable Subdivision Improvement Agreement, if any. City may, in its reasonable discretion, accept fully completed portions of the applicable DIF Improvements before all of the DIF Improvements for an area are complete, which shall not release or modify Owner’s obligation to complete the remainder of the DIF Improvements. Upon the total or partial acceptance of the applicable DIF Improvements by City, Owner shall file with the Recorder’s Office of the County of Riverside a notice of completion for the accepted DIF Improvements in accordance with California Civil Code Sections 8182, 8184, 9204, and 9208 (“Notice of Completion”), and after the passage of all required periods of time for filing claims, and then resolution of all outstanding claims, DIF Improvements which have been accepted by the City in accordance with this Agreement shall become the sole and exclusive property of City without any payment therefore.. Notwithstanding the foregoing, City may not accept any portion of the applicable DIF Improvements unless and until Owner provides one (1) set of “as-built” or record drawings or plans to the City for all such portions of the applicable DIF Improvements. The drawings shall be certified and shall reflect the condition of the applicable DIF Improvements as constructed, with all changes incorporated therein.
8.0 Warranty and Guarantee. Owner hereby warrants and guarantees all the DIF Improvements against any defective work or labor done, or defective materials furnished in the performance of this Agreement, including the maintenance of the DIF Improvements, for a period of one year following completion of the portion of the applicable DIF Improvements as provided by this Agreement and/or the applicable Subdivision Improvement Agreement between the parties (“Warranty”). During the Warranty, Owner shall repair, replace, or reconstruct any defective portion of the DIF Improvements or portion that is not in substantial compliance with the approved plans, profiles and specifications for the applicable DIF Improvements, in accordance with the applicable ordinances, resolutions, regulations, codes, standards, or other requirements of City. All repairs, replacements, or reconstruction during the Warranty shall be at the sole cost and expense of Owner and the surety, except to the extent caused by, relating to, or arising out of the negligent acts or omissions or willful conduct of City, or its elected officials, officers, employees, volunteers, or agents. Upon completion of such repairs, replacements, or reconstruction required for claims made during the Warranty and after expiration of the Warranty, City shall release the related Warranty bond. As to any portion of DIF Improvements that have been repaired, replaced, or reconstructed pursuant to claims made during the Warranty, Owner agrees to Warranty those portions for an additional one year, but no additional extensions are applicable. Nothing herein shall relieve Owner from any other liability it may have under federal, state, or local law to repair, replace, or reconstruct any DIF Improvement following expiration of the Warranty or any extension thereof. Owner’s Warranty obligation under this Section shall survive the expiration or 1197
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termination of this Agreement, but the survival period shall be limited to the statutory period of limitations for claims under the applicable law. In the event of a conflict among the warranty provisions of this Section and the provisions of the applicable Subdivision Improvement Agreement, the provisions which provide the most protection to City shall control.
9.0 Administrative Costs. If Owner fails to have constructed and installed all or any part of the applicable DIF Improvements, or if Owner fails to comply with any other obligation contained within this Agreement, Owner and the surety shall be jointly and severally liable to City for all administrative expenses, fees, and costs, including reasonable attorney’s fees and costs, incurred in obtaining compliance with this Agreement or in processing any legal action or for any other remedies permitted by law.
10.0 Default; Notice; Remedies.
10.1 Notice. Notice and Defaults under this Agreement shall be as provided for in the Development Agreement.
10.2 City Completion of DIF Improvements. If the Default pertains to the failure of Owner to reasonably and timely prosecute to completion the applicable DIF Improvements, resulting in a demonstrated deficiency of necessary public health and safety services, City may complete all remaining work on the applicable DIF Improvements, arrange for the completion of all remaining work on the applicable DIF Improvements, and/or conduct such remedial activity as in its reasonable discretion it believes is required to remedy the Default. The cost of all such work or remedial activity shall be recoverable by City from Owner. City’s right to take such actions shall in no way be limited by the fact that Owner, the Contractor, or its surety may have constructed any of the DIF Improvements at the time of City’s demand for performance. Provided, however, that the City may not undertake completion of the applicable DIF Improvement until 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. In the event City elects to complete or arrange for completion of the remaining work for the DIF Improvements, City may also require all work by Owner, the Contractor, or its surety on the applicable DIF Improvements to cease in order to allow adequate coordination by City.
10.3 Other Remedies. No action by any Party pursuant to this Section 10.0 et seq. of this Agreement shall prohibit that Party from exercising any other right or pursuing any other legal or equitable remedy available under this Agreement or any federal, state, or local law, except that in no event shall Owner or any of its contractors, subcontractors, or assignees be entitled to seek monetary damages from City. The Parties may exercise their rights and remedies independently or cumulatively, and the Parties may pursue inconsistent remedies. The Parties may institute an action for damages, injunctive relief, or specific performance.
11.0 Security; Surety Bonds. Prior to the commencement of any work on the DIF Improvements, the Contractor shall provide City with surety bonds in the amounts and under the 1198
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terms set forth below (“Security”). The amount of the Security shall be based on the estimated actual costs to construct the applicable DIF Improvements to be constructed by the Contractor for the applicable portion of the work, as determined by City in consultation with Owner after Owner has awarded a contract for construction of the DIF Improvements to the Contractor in accordance with this Agreement (“Estimated Costs”). If City in consultation with Owner determines, in its reasonable discretion, that the Estimated Costs have changed, the Contractor shall adjust the Security in the amount requested by the City. Compliance with this Section 11.0 et seq. of this Agreement shall in no way limit or modify Owner’s indemnification obligation provided in Section
12.0 of this Agreement. In the event of a conflict between the surety bond provisions of this Section and the surety bond provisions of the applicable Subdivision Improvement Agreement, the Subdivision Improvement Agreement shall control.
11.1 Performance Bond. To guarantee the faithful performance of the DIF Improvements, to protect City if Owner is in Default as set forth in Section 10.0 et seq. of this Agreement, and to secure the one-year guarantee and Warranty of the applicable DIF Improvements, the Contractor shall provide City a faithful performance bond in an amount which sum shall be not less than one hundred percent (100%) of the Estimated Costs. City may, in its reasonable discretion, partially release a portion or portions of the Security provided under this Section as the applicable DIF Improvements or portion thereof are accepted by City, provided that the Contractor is not in default on any provision of its contract with Owner and the total remaining security is not less than ten percent (10%) of the Estimated Costs. All security provided under this Section shall be released at the end of the Warranty period, or any extension thereof as provided in Section 8.0 of this Agreement, provided that Owner is not in Default on any provision of this Agreement.
11.2 Labor & Material Bond. To secure payment to the Contractors, subcontractors, laborers, materialmen, and other persons furnishing labor, materials, or equipment for performance of the DIF Improvements, the Contractor shall provide City a labor and materials bond in an amount which sum shall not be less than one hundred percent (100%) of the Estimated Costs. The Security provided under this Section may be released by written authorization of City by passage of time within which claims of lien are required to be recorded under Civil Code sections 8410 et seq. The amount of such security shall be reduced by the total of all stop notice or mechanic’s lien claims of which City is aware, plus an amount equal to ten percent (10%) of such claims for reimbursement of City’s anticipated administrative and legal expenses arising out of such claims.
11.3 Additional Requirements. The surety for any surety bonds provided as Security shall have a current A.M. Best rating of at least “A” and FSC-VIII, shall be licensed to do business in California, and shall be satisfactory to City in its reasonable discretion. As part of the obligation secured by the Security and in addition to the face amount of the Security, Owner, the Contractor, or the surety shall secure the costs and reasonable expenses and fees, including reasonable attorney’s fees and costs, incurred by City in enforcing the obligations of this Agreement. Owner, the Contractor, and the surety shall stipulate and agree that no change, extension of time, alteration, or addition to the terms of this Agreement, the DIF Improvements, or the plans and specifications for the DIF Improvements shall in any way affect its obligation on the Security.
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11.4 Evidence and Incorporation of Security. Evidence of the Security shall be provided on the forms set forth in Exhibit “B” to this Agreement, unless other forms are deemed acceptable by City, and when such forms are completed to the satisfaction of City, the forms and evidence of the Security shall be attached hereto as Exhibit “B” and incorporated herein by this reference.
12.0 Indemnification. Owner shall defend, indemnify, and hold harmless City, its elected officials, employees, and agents from any and all actual or alleged claims, demands, causes of action, liability, loss, damage, or injury to property or persons, including wrongful death, whether imposed by a court of law or by administrative action of any federal, state, or local governmental agency, arising out of, or incident to, any acts, omissions, or willful misconduct of Owner, its employees, contractors, subcontractors, or agents in connection with, or arising out of, or in any way related to, or caused by, the DIF Improvements or their condition prior to City’s approval and acceptance of the DIF Improvements (“Claims”). This indemnification includes, without limitation, the payment of all penalties, fines, judgments, awards, decrees, attorney’s fees, and related costs or expenses, and the reimbursement of City, its elected officials, employees, and/or agents for all legal expenses and costs incurred by each of them. This indemnification excludes only such portion of any Claim that is caused by, related to, or arising out of the negligence or willful misconduct of City or its elected officials, officers, employees, volunteers or agents.
Owner’s obligation to indemnify shall survive the expiration or termination of this Agreement and shall not be limited or restricted to insurance proceeds, if any, received by City, its elected officials, employees, or agents. The City shall provide prompt notice to Owner of any Claims, and City shall have the right to select the counsel representing City with respect to the Claims.
Notwithstanding the foregoing, Owner’s indemnity obligations specified in this Section 12.0 with respect to any given DIF Improvement shall terminate one (1) year after City accepts the DIF Improvement.
13.0 Insurance. The insurance requirement under this Agreement shall be the same as the insurance requirements in any approved Subdivision Improvement Agreements entered into by City and Owner in connection with a final map.
14.0 DIF and other Credits; Reimbursements.
14.1 DIF Credit Offset Against DIF. Under the Development Agreement and in consideration for Owner’s obligation under this Agreement for the delivery of DIF Improvements, Owner shall be entitled to receive a credit for its DIF Improvement Costs against the DIF for the Project. Owner’s Costs for delivery of the DIF Improvements shall include all costs actually and reasonably incurred by Owner, and verified by the City as reasonably incurred, that the Contractor, and third party consultants or subcontractors incurred in the design, permitting, land and right of way, construction, installation, management, and related activities for delivery of the DIF Improvements both before and after the date of execution of this Agreement but after the date of the Development Agreement (“Costs”), except that Costs shall exclude any overhead or debt service. With regard to the SLB Extension, the Costs shall include the portion of the Accelerated Transportation DIF Payment that was not refunded to Owner. Owner shall be entitled to, and the City shall grant to Owner, a credit against the DIF (“DIF Credit”) in an amount equal to the lesser of: (a) the Costs or (ii) the total amount of the DIF to be imposed and levied on the Project. The grant of DIF Credit under this Agreement shall not preclude the financing of the DIF Improvement 1200
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through a Community Facilities District (“CFD”) established for all or any portion of the Project.
The determination of DIF Credit will be determined by the City in good faith with input from Owner on a quarterly or other basis.
14.2 Evidence of Costs of DIF Improvements. Before the City’s issuance of any certificate of occupancy for the Project for which the applicable DIF Improvement is needed, Owner shall provide to City reasonably satisfactory evidence of the Costs of each of the DIF Improvements for that portion of the DIF Improvements under construction that would equal or exceed the applicable DIF fees (“Estimated Costs”). City may consider the following evidence of Costs provided that clearly relate to and are determined by City to be reasonable incurred and related to DIF Improvements in the Project Phase: (a) Owner and/or Contractor’s invoices that verify the work completed and percentage of work performed; (b) invoices from and payments made to design professionals; and (c) invoices or assessments and payments made for permits.
Following substantial completion and before City’s acceptance of the DIF Improvements, Owner may elect to pay to City the total amount of the DIF due to be imposed and levied on the Project in satisfaction of the precondition for issuance of certificates of occupancy, minus the Estimated Costs incurred as of that date. Thereafter, upon acceptance of the DIF Improvements by City and Owner’s provision of evidence of the actual Costs, City shall refund to Owner the amount of DIF paid that should have been covered by the DIF Credit within forty-five (45) calendar days.
14.3 DIF Reimbursement. If the dollar amount of the Costs exceeds the DIF applicable to the Project or a portion of the Project, Owner will be deemed to have fully satisfied the DIF as to that portion and is entitled to a reimbursement from City for the Costs in excess of the applicable DIF (the “Excess Costs”) but only for Costs of a DIF Improvement that is identified in a DIF nexus study (“Qualified Excess Costs”) and only if and to the extent that the City receives development impact fee funds from other developers that are found to have contributed to the need for the DIF Improvement. The obligation of the City to collect and pay Owner Qualified Excess Costs from other developers in the City shall terminate with the Development Agreement.
Notwithstanding any other provision of this Agreement, City’s assistance with reimbursement related to the DIF Improvements is limited to the Qualified Excess Costs which shall, in any event, not exceed the Costs of the DIF Improvements. City shall not under any circumstances be obligated to contribute, and shall not contribute additional assistance to the DIF Improvements, other than as expressly provided for in this Agreement. Under no circumstance shall the City pay any Excess Cost to Owner from the general fund, special funds or other funds of the City, unless the City, in its sole and absolute discretion, chooses to do so. If any audit by the Parties or the California Department of Industrial Relations determines that any excess amount has been credited, reimbursed, or otherwise contributed by City, then Owner shall reimburse City for such excess amount. This paragraph shall be interpreted consistently with California Labor Code Section 1720(c)(2) to accomplish the Parties’ intent that the Project is a private development exempt from payment of prevailing wages to the full extent permitted under California Labor Code Section 1720(c)(2), and any other applicable provisions and City maintains no proprietary interest in the Project; provided, however, that Owner shall pay prevailing wage for the DIF Improvements.
14.4 Oversized Public Improvements; Fair Share Payments; Fee Credits.
14.4.1 Construction of Oversized Public Improvements. The Parties acknowledge that certain of the Public Improvements to be constructed by Owner may, to a greater 1201
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or lesser extent, constitute Oversized Improvements and that owners of other properties will benefit from such Oversized Improvements. For purposes of Section 14.4 of this Agreement, “Oversized Improvements” means any Public Improvement with respect to which the Parties agree that Owner’s direct or indirect financial contribution exceeds its Fair Share of the cost of the Public Improvement or portion thereof reasonably attributable to the Project or phase thereof.
Exhibit “F” of the Development Agreement lists all of the Public Improvements; not all of these Public Improvements are Oversized Improvements. In addition, City agrees that, in recognition of the regional nature of certain street and, possibly, other improvements made to the Property by Owner, City shall use its best efforts subject to limitations on its legal authority to ensure that owners of all property that will reasonably benefit from the Public Improvements, as determined in accordance with Section 14.4.2 of this Agreement (“Benefitted Properties”), will pay their Fair Share for such Public Improvements, either directly or through subdivision, reimbursement, or other agreements, between such owners and City, or between owners of Benefitted Properties.
14.4.2 Fair Share Determination. For purposes of Section 14.4 of this Agreement, “Fair Share” shall mean the amount if any, of Owner’s contribution to the cost of any Public Improvements, and unless otherwise provided in Exhibit “I” of the Development Agreement, shall be calculated for the Project based on the Project’s proportion of the benefit conferred on all Benefitted Properties, as established by a regional benefit study prepared by independent professional consultants experienced in the preparation of “zone of benefit” studies.
The consultants shall be selected by City.. City shall afford Owner, and any other involved developer(s), the opportunity to review and comment on the tentative conclusions, and such comments shall be taken into consideration by City in its review. The costs of any such study shall be deemed to be a part of the cost of the Oversized Improvement to which it pertains. The fees and costs of the consultants shall be paid, initially, by the Owner or if possible from other developers then involved. The Parties recognize, however, that it will not always be possible to implement or achieve such goals, given the size, timing of development and nature of the other Benefitted Properties, and nothing herein shall be deemed to require City to fund or reimburse any portion of the excess costs other than from funds collected expressly for such purpose, or to pay for the cost of any such improvements or any portions thereof out of its general, special or other fund revenues.
14.4.3 Fee Credits. In accordance with Section 5.12.3 of the Development Agreement, to the extent a Public Improvement is included in the DIF Nexus Study, City shall recognize and apply in lieu credit against any and all fees, for and equal to the Costs to provide the Public Improvement and/or dedications made in the development of the Project by Owner, even if such improvement was funded by a CFD or other alternative financing mechanism, and for which the fees would otherwise be imposed in accordance with City ordinances and resolutions; provided, however, that such in lieu credit shall not exceed the amount established by City’s DIF program for construction of such improvements and/or dedications.
14.4.4 Limits on Public Funds. Notwithstanding anything else to the contrary herein, the parties acknowledge and agree that in no event shall the cumulative total of public funds, as defined in California Labor Code Section 1720(b), received by Owner with respect to the Project exceed the amount of the conditioned public improvements imposed on the Project as part of the Development Approvals.
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14.5 Credits and Reimbursements for Dedication Properties.
14.5.1 Dedication of Fire Station Property and Water Tank Property.
Although not needed for the Project, the Parties acknowledge that in the future the City or the County may choose to construct a fire station on the Fire Station Property and a water tank on the Water Tank Property. Owner shall reserve the Fire Station Property and Water Tank Property and shall dedicate such properties to the City.. After acquiring the Fire Station Property and Water Property, the City or County shall not use the Fire Station Property for any use other than a fire station or the Water Tank Property for anything other than a water tank. Under no circumstances shall Owner be obligated to pay for the construction of the fire station or water tank.
15.0 Miscellaneous.
15.1 Assignment. Owner may assign all or any portion of its rights under this Agreement, including any DIF Credits under this Agreement, following notice to City.
15.2 Relationship between the Parties. The Parties hereby mutually agree that this Agreement shall not operate to create the relationship of partnership, joint venture, or agency between City and Owner. Further, the Parties mutually agree that the Contractor is exclusively and solely under the control and dominion of Owner. Nothing herein shall be deemed to make Owner or its Contractor an agent or contractor of City.
15.3 Warranty as to Property Ownership; Authority to Enter Agreement. Owner hereby warrants that it owns fee title to the Property and that it has the legal capacity to enter into this Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority make this Agreement and bind each respective Party.
15.4 Prohibited Interests. Owner warrants that it has not employed or retained any company or person, other than a bona fide employee working solely for Owner, to solicit or secure this Agreement. Owner also warrants that it has not paid or agreed to pay any company or person, other than a bona fide employee working solely for Owner, any fee, commission, percentage, brokerage fee, gift, or other consideration contingent upon the making of this Agreement. For breach of this warranty, City shall have the right to rescind this Agreement without liability.
15.5 Notices. All notices, demands, invoices, and written communications shall be in writing and delivered to the following addresses or such other addresses as the Parties may designate by written notice:
To City: City of Banning
Attn: Public Works Director
99 E. Ramsey Street
Banning, CA 92220
Fax No. (951) 922-3141
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To Owner: NP Banning Industrial, LLC
Attn: J.J. Jenkins
12977 N. Outer Forty Rd., Suite 203
St. Louis, MO 63141
Email: [email protected]
Depending upon the method of transmittal, notice shall be deemed received as follows: by facsimile, as of the date and time sent; by messenger, as of the date delivered; and by reputable overnight mail, as of two (2) days after deposit in the overnight mail.
15.6 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate, or convenient to attain the purposes of this Agreement.
15.7 Construction; References; Captions. It being agreed the Parties or their agents have participated in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days, or period for performance shall be deemed calendar days and not work days. All references to Owner include all personnel, employees, agents, and contractors of Owner, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers, except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.
15.8 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding, unless executed in writing and signed by both Parties.
15.9 Waiver. No waiver of any Default shall constitute a waiver of any other Default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual right by custom, estoppel, or otherwise.
15.10 Binding Effect. Each and all of the covenants and conditions shall be binding on and shall inure to the benefit of the Parties, and their successors, heirs, personal representatives, or assigns. This section shall not be construed as an authorization for any Party to assign any right or obligation.
15.11 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.
15.12 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.
15.13 Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California.
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15.14 Time is of the Essence. Time is of the essence in this Agreement, and the Parties agree to execute all documents and proceed with due diligence to complete all covenants and conditions.
15.15 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original and which collectively shall constitute one instrument.
15.16 Entire Agreement. This Agreement and the Development Agreement contain the entire agreement between City and Owner with respect to DIF Credits and supersede any prior oral or written statements or agreements between City and Owner.
15.17. Exhibits. All Exhibits to this Agreement are hereby incorporated in full by reference as though set forth in full, provided that in the event of any material conflict between any Exhibit or portion thereof and any provision of this Agreement, the provisions of this Agreement shall control.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.
(Signatures on next page)
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OWNER
NP Banning Industrial, LLC, a Missouri
Limited Liability Company
____________________________________
By:
Its:
____________________________________
By:
Its:
APPROVED AS TO FORM:
____________________________________
By:
Attorneys for NP Banning Industrial, LLC
CITY OF BANNING
____________________________________
By: Richard Royce, Mayor
ATTEST:
____________________________________
By: Caroline Patton
Administrative City Clerk
APPROVED AS TO FORM:
____________________________________
By: John Pinkney,
City Attorney
1206
EXHIBIT “G-2”
-17-
CERTIFICATE OF ACKNOWLEDGMENT OF NOTARY PUBLIC
State of California )
)ss.
County of ______} )
On before me, , Notary Public, personally
appeared ,who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_________________________________
Signature
(seal)
My commission expires: _____________
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.
1207
EXHIBIT “A”
LEGAL DESCRIPTION OF PROPERTY
[ATTACHED BEHIND THIS PAGE]
1208
EXHIBIT “B”
FORMS FOR SECURITY
[ATTACHED BEHIND THIS PAGE]
1209
BOND NO. _________________
INITIAL PREMIUM: _________________
SUBJECT TO RENEWAL
PERFORMANCE BOND
WHEREAS, the City of Banning (“City”) has executed an agreement with NP Banning Industrial, LLC (hereinafter “Owner”), requiring Owner to perform certain work consisting of, but not limited to, furnishing all labor, materials, tools, equipment, services, and incidentals for the design, construction, and/or installation of public improvements (hereinafter the “Work”);
WHEREAS, the Work to be performed by Owner is more particularly set forth in that certain DIF Credit Implementation Agreement dated _______________, (hereinafter the “Agreement”); and
WHEREAS, the Agreement is hereby referred to and incorporated herein by this reference; and
WHEREAS, Owner or its contractor is required by the Agreement to provide a good and sufficient bond for performance of the Agreement, and to guarantee and warranty the Work constructed thereunder.
NOW, THEREFORE, we the undersigned, , as Principal and , a corporation organized and existing under the laws of the State of and duly authorized to transact business under the laws of the State of California, as Surety, are held and firmly bound unto the CITY in the sum of
($_____________), said sum being not less than one hundred percent (100%) of the total cost of the Work as set forth in the Agreement, we bind ourselves, our heirs, executors and administrators, successors and assigns, jointly and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION is such, that if Owner and its contractors, or their heirs, executors, administrators, successors, or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions, agreements, guarantees, and warranties in the Agreement and any alteration thereof made as therein provided, to be kept and performed at the time and in the manner therein specified and in all respects according to their intent and meaning, and to indemnify and save harmless City, its officers, employees, and agents, as stipulated in the Agreement, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect.
As part of the obligation secured hereby, and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorney’s fees, incurred by City in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered. 1210
The said Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration, or additions to the terms of the said Agreement or to the Work to be performed thereunder or the specification accompanying the same shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration, or addition to the terms of the Agreement or to the Work.
IN WITNESS WHEREOF, we have hereto set our hands and seals this _____ day on ______________________________________, 20___.
Principal
By:____________________________________
President
Surety
By:____________________________________
Attorney-in-Fact
1211
CERTIFICATE OF ACKNOWLEDGMENT OF NOTARY PUBLIC
State of California )
)ss.
County of ______} )
On before me, , Notary Public, personally
appeared ,who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_________________________________
Signature
(seal)
My commission expires: _____________
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.
1212
CERTIFICATE AS TO CORPORATE PRINCIPAL
________________________________________, certify that I am the Secretary of the corporation named as principal in the attached bond, that who signed the said bond on behalf of the principal was then of said corporation; that I know his signature, and his signature thereto is genuine; and that said bond was duly signed, sealed and attested for and in behalf of said corporation by authority of its governing Board.
(Corporate Seal)
Signature:
Date:
NOTE: A copy of the power of attorney to local representatives of the bonding company may be attached hereto.
1213
BOND NO.
INITIAL PREMIUM:
SUBJECT TO RENEWAL
LABOR & MATERIAL BOND
WHEREAS, the City of Banning (“City”) has executed an agreement with NP Banning Industrial, LLC (hereinafter “Owner”), requiring Owner to perform certain work consisting of, but not limited to, furnishing all labor, materials, tools, equipment, services, and incidentals for the design, construction, and/or installation of public improvements (hereinafter “Work”);
WHEREAS, the Work to be performed by Owner is more particularly set forth in that certain DIF Credit Implementation Agreement dated _______________, (hereinafter the “Agreement”); and
WHEREAS, Owner or its contractor is required to furnish a bond in connection with the Agreement providing that if Owner or any of his or its contractors shall fail to pay for any materials, provisions, or other supplies, or terms used in, upon, for or about the performance of the Work contracted to be done, or for any work or labor done thereon of any kind, or for amounts due under the provisions of 3248 of the California Civil Code, with respect to such work or labor, that the Surety on this bond will pay the same together with a reasonable attorney’s fee in case suit is brought on the bond.
NOW, THEREFORE, we the undersigned, as __________________ Principal and __________________, a corporation organized and existing under the laws of the State of_________________ and duly authorized to transact business under the laws of the State of California, as Surety, are held and firmly bound unto the City and to any and all material men, persons, companies or corporations furnishing materials, provisions, and other supplies used in, upon, for or about the performance of the said Work, and all persons, companies or corporations renting or hiring teams, or implements or machinery, for or contributing to said Work to be done, and all persons performing work or labor upon the same and all persons supplying both work and materials as aforesaid, the sum of ($_____________), said sum being not less than one hundred percent (100%) of the total amount payable by Owner under the terms of the Agreement, for which payment well and truly to be made, we bind ourselves, our heirs, executors and administrators, successors and assigns jointly and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION IS SUCH that if Owner or its contractors, or their heirs, executors, administrators, successors, or assigns, shall fail to pay for any materials, provisions, or other supplies or machinery used in, upon, for or about the performance of the Work contracted to be done, or for work or labor thereon of any kind, or fail to pay any of the persons named in California Civil Code Section 9100, or amounts due under the Unemployment Insurance Code with respect to work or labor performed by any such claimant, or for any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of the contractor and his subcontractors pursuant to Section 13020 of the Unemployment Insurance Code with respect to such work and labor, and all other applicable laws of the State of California and rules and regulations of its agencies, then said Surety will pay the same in or to,an amount not exceeding the sum specified herein. 1214
In case legal action is required to enforce the provisions of this bond, the prevailing party shall be entitled to recover reasonable attorneys' fees in addition to court costs, necessary disbursements and other consequential damages. In addition to the provisions hereinabove, it is agreed that this bond will inure to the benefit of any and all persons, companies and corporations entitled to make claims under Sections 8024, 8400, 8402, 8404, 8430, 9100 of the California Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond.
The said Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration or additions to the terms of the Agreement or to the Work to be performed thereunder or the specification accompanying the same shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Agreement or to the Work.
IN WITNESS WHEREOF, we have hereto set our hands and seals this _____ day on ______________________________________, 20___.
Principal
By:____________________________________
President
Surety
By:____________________________________
Attorney-in-Fact
1215
CERTIFICATE OF ACKNOWLEDGMENT OF NOTARY PUBLIC
State of California )
) ss.
County of _______} )
On before me, , Notary Public, personally
appeared ,who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_________________________________
Signature
(seal)
My commission expires: _____________
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.
1216
CERTIFICATE AS TO CORPORATE PRINCIPAL
________________________________________, certify that I am the Secretary of the corporation named as principal in the attached bond, that who signed the said bond on behalf of the principal was then of said corporation; that I know his signature, and his signature thereto is genuine; and that said bond was duly signed, sealed and attested for and in behalf of said corporation by authority of its governing Board.
(Corporate Seal)
Signature:
Date:
NOTE: A copy of the power of attorney to local representatives of the bonding company may be attached hereto.
1217
EXHIBIT “C” to
EXHIBIT “G-2”
-1-
EXHIBIT “C”
BIDDING AND CONTRACTING, REQUIREMENTS FOR DIF IMPROVEMENTS With respect to construction contracts awarded for DIF Improvements after approval of this Agreement, bids for construction shall be solicited from at least three qualified contractors, provided that three qualified contractors are reasonably available. Owner may also directly solicit bids. The bid package may consist of preliminary plans and specifications.
The bidding response time shall be not less than ten (10) business days.
The City’s Public Works Director shall be provided a copy of the tabulation of bid results before the award of the contract.
Contract(s) for the construction of the DIF Improvements shall be awarded to the qualified contractor(s) submitting the lowest bid(s), as determined by Owner.
The contractor to whom a contract is awarded shall be required to pay not less than the prevailing rates of wages pursuant to Labor Code Sections 1770, 1773 and 1773.1. A current copy of applicable wage rates shall be on file in the Office of the City Clerk, as required by Labor Code Section 1773.2
The contractor shall be required to provide certified payrolls to Owner and shall furnish copies of those records to the City upon request. 1218
EXHIBIT “G-2”
-1-
1219
EXHIBIT “H”
-1-
Development Agreement No.___
EXHIBIT “H”
DEVELOPMENT FEES IN EFFECT AS OF EFFECTIVE DATE
City of Banning Development Impact Fees1
Land
Use
Category
Police
Facilities
Fire
Protection
Facilities
Parkland
and
Parks
General City
Facilities
Wastewater
FacilitiesPolice
Transportation
DIFTraffic
Electric
Facilities Water
Facilities2 Wastewater2
Nonresidential –
(Fee per 1,000
Square Foot)Feet
- Industrial
$236.00 $239.00 $170.00 $1,791.69
Per Table
8.5 in City
Council
Resolution
2019-112
$708.54
Nonresidential –
Fee per 1,000
Square Feet
- Commercial
$ 0.48486.00 $ 0.65493.00 N/A$351.00 $ 0.47 $ 2.29
$
10.0 6
$ 2.36
Nonresidential –
Fee per 1,000
Square Feet
- Office
0.63$633.00 0.85$633.00 N/A$458.00 0.62$ 0.80 3.29
2.21 IndustrialPer
Equivalent
Dwelling Unit
0.23N/A 0.32N/A N/A 0.23N/A 0.87 1.60
1.27 ¾” $ 6,094
1” 10,156
1-1/2” 20,312
2” 32,500
3” 60,937
4” 101,562
6” 203,123
8” 568745
1 Represents the City of Banning Development Impact Fees per square foot for nonresidentialfor non-residential land uses approved by effective November 9, 2019 per City Council on February 24th, 2026 per Resolution No. 2026-242019-112. 2 Water Facilities fee is now charged based on meter sizes. 2 Wastewater Facilities Fee shown as per 1 EDU. Wastewater Facilities EDU Factors for every 1,000 square feet are 0.37 for Commercial, 0.13 for Office and 0.14 for Industrial.
Inserted Cells
Inserted Cells
Inserted Cells
Deleted Cells
Split Cells
Split Cells
Inserted Cells
Inserted Cells
1220
EXHIBIT “H”
-2-
City of Banning Development Impact Fees (cont’d.)
Land Use Category TUMF3 MSHCP3
Industrial $2.33 per square foot
$20,191 per acre
Class A/B Office $2.45 per square foot
Retail $7.72 per square foot
Service $4.89 per square foot
3 TUMF and MSHCP subject to annual increases.
1221
EXHIBIT “I”
-1-
Development Agreement No.___
EXHIBIT “I”
FAIR SHARE PAYMENTS
1222
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RECORDING REQUESTED BY,
AND WHEN RECORDED MAIL
TO:
CITY OF BANNING
99 EAST RAMSEY STREET
BANNING, CA 92220
ATTN: CITY CLERK
SPACE ABOVE THIS LINE FOR RECORDER’S USE
EXEMPT FROM RECORDING FEE PER GOVERNMENT CODE SECTION 6103 1223
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DEVELOPMENT AGREEMENT
NO. ___
A DEVELOPMENT AGREEMENT BETWEEN
CITY OF BANNING
AND
NP BANNING INDUSTRIAL, LLC
1224
TABLE OF CONTENTS
Page
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1. DEFINITIONS AND EXHIBITS.....................................................................................5
1.1 Definitions.............................................................................................................5
1.2 Exhibits...............................................................................................................13
2. GENERAL PROVISIONS .............................................................................................14
2.1 Binding Effect of Agreement..............................................................................14
2.2 Ownership of Property........................................................................................14
2.3 Term....................................................................................................................14
2.4 Transfer...............................................................................................................15
2.5 Amendment or Cancellation of Agreement ........................................................16
2.6 Termination.........................................................................................................17
2.7 Notices ................................................................................................................18
2.8 Estoppel Certificate.............................................................................................19
3. DEVELOPMENT OF THE PROPERTY.......................................................................20
3.1 Vested Rights to Develop ...................................................................................20
3.2 Effect of Agreement on Land Use Regulations..................................................20
3.3 Reservations of Authority...................................................................................21
3.4 Subsequent Development Review ......................................................................22
3.5 Timing and Phasing of Development .................................................................24
3.6 Changes and Amendments..................................................................................25
3.7 Regulation by Outside Agencies.........................................................................26
3.8 Public Works.......................................................................................................26
3.9 Provision of Real Property Interests by City ......................................................26
3.10 City Covenants....................................................................................................27
3.11 Retail Development Obligations.........................................................................28
3.12 Planning Area 2...................................................................................................28
3.13 Planning Area 4 Buffer.......................................................................................29
3.14 Modifications to the Project to Decrease Environmental Impacts......................29
4. ANNEXATION ..............................................................................................................30
4.1 Contemplated LAFCO Action ............................................................................30
4.2 Contemplated Action ..........................................................................................30
4.3 Cooperation of City.............................................................................................30
4.4 Development of Annexed Property ....................................................................30
5. PUBLIC BENEFITS, PUBLIC IMPROVEMENTS, AND DEVELOPMENT IMPACT FEES ...............................................................................................................30
5.1 Intent ...................................................................................................................30 1225
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5.2 Public Benefit Fee...............................................................................................31
5.3 Owner Required Public Improvements...............................................................31
5.4 Sun Lakes Boulevard Extension .........................................................................32
5.6 Sunset Avenue Improvements ............................................................................35
5.7 Payment of “Fair Share” Share of Certain Roadway Improvements..................36
5.8 Land Reservation, Conveyance, and Dedication ................................................36
5.9 Electrical Substation ...........................................................................................37
5.10 Additional Public Benefits..................................................................................40
5.11 Development Fees...............................................................................................42
5.12 Fair Share Payments; Oversized Improvements; Fee Credits.............................43
5.13 Limits on Public Funds.......................................................................................44
6. FINANCING OF PUBLIC IMPROVEMENTS.............................................................44
6.1 Intent ...................................................................................................................44
6.2 Formation of Community Facilities Districts.....................................................44
6.3 City Council Approval........................................................................................45
6.4 City’s Reimbursement to Owner ........................................................................45
7. REVIEW FOR COMPLIANCE .....................................................................................46
7.1 Annual Review....................................................................................................46
7.2 Procedure ............................................................................................................46
7.3 Proceedings Upon Modification or Termination ................................................46
7.4 Hearing on Modification or Termination............................................................47
7.5 Certificate of Agreement Compliance ................................................................47
8. DEFAULT AND REMEDIES........................................................................................47
8.1 Remedies in General...........................................................................................47
8.2 Specific Performance ..........................................................................................48
8.3 General Release ..................................................................................................49
8.4 Termination or Modification of Agreement for Default of Owner.....................49
8.5 Termination of Agreement for Default of City...................................................49
8.6 Attorneys’ Fees...................................................................................................50
9. THIRD PARTY LITIGATION ......................................................................................50
10. MORTGAGEE PROTECTION .....................................................................................51
11. MISCELLANEOUS PROVISIONS...............................................................................52
11.1 Recordation of Agreement..................................................................................52
11.2 Entire Agreement................................................................................................53
11.3 Severability .........................................................................................................53
11.4 Preemption or Frustration of Agreement by Changes in Law ............................53
11.5 RESERVED........................................................................................................53 1226
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11.6 Interpretation and Governing Law......................................................................53
11.7 Operating Memoranda ........................................................................................54
11.8 Section Headings ................................................................................................54
11.9 Gender and Number............................................................................................54
11.10 Rule Against Perpetuities....................................................................................54
11.11 Time of Essence..................................................................................................54
11.12 Waiver.................................................................................................................54
11.13 No Third-Party Beneficiaries..............................................................................55
11.14 Mutual Covenants...............................................................................................55
11.15 Successors in Interest..........................................................................................55
11.16 Counterparts........................................................................................................55
11.17 Jurisdiction and Venue........................................................................................55
11.18 Project as a Private Undertaking.........................................................................55
11.19 Further Actions and Instruments.........................................................................55
11.20 Eminent Domain .................................................................................................56
11.21 Agent for Service of Process...............................................................................56
11.22 Designation of City Officials..............................................................................56
11.23 Legally Binding Contract; Enforceability...........................................................56
11.24 Authority to Execute ...........................................................................................56 1227
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EXHIBIT LIST
EXHIBIT “A-1” - LEGAL DESCRIPTION OF THE NORTHERN PORTION OF THE
PROPERTY AND THE SLB EXTENSION
EXHIBIT “A-2” - LEGAL DESCRIPTION OF THE SOUTHERN PORTION OF THE
PROPERTY
EXHIBIT “B” - MAP SHOWING PROPERTY AND ITS LOCATION
EXHIBIT “C” - EXISTING DEVELOPMENT APPROVALS
EXHIBIT “D” - EXISTING LAND USE REGULATIONS
EXHIBIT “E-1” - INITIAL PHASING PLAN
EXHIBIT “F” - PUBLIC IMPROVEMENTS
EXHIBIT “G-1” MODIFICATIONS TO PROJECT
EXHIBIT “G-2” DIF CREDIT AND REIMBURSEMENT AGREEMENT
EXHIBIT “H” - DEVELOPMENT FEES IN EFFECT AS OF EFFECTIVE DATE EXHIBIT “I” - FAIR SHARE PAYMENTS
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DEVELOPMENT AGREEMENT NO. __________
This Development Agreement (hereinafter “Agreement”) is entered into as of the Effective Date by and among the CITY OF BANNING (hereinafter “City”), and NP BANNING INDUSTRIAL, LLC, a Missouri limited liability company (hereinafter “Owner”). City and Owner are, collectively, the “Parties,” and individually, a “Party”. Initially capitalized terms used in this Agreement shall have the meanings set forth in Section 1.1 below.
RECITALS
1. City 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 Article 11, Section 7 of the California Constitution and Section 65864, et seq. (“Development Agreement Law”) of the California Government Code (“Government Code”).
2. City has adopted Procedures and Requirements of the City of Banning For the Consideration of Development Agreements (“Procedures and Requirements”), pursuant to Section 65865 of the Government Code.
3. Owner is the owner of real property comprised of approximately 533.8 acres of land. The Property is divided for purposes of this Agreement into the northerly portion, comprising approximately 280.1 acres (“Northern Portion of the Property”) located in the City, an additional approximately 8.52 acres of real property owned by Owner but subject to a public right of way easement in favor of the City for the future extension of Sun Lakes Boulevard (“SLB Extension”) and the southerly portion, comprising approximately 253.7 acres (“Southern Portion of the Property”), located in unincorporated Riverside County (“County”) within the Sphere of Influence of the City (“SOI”). The SLB Extension is subject to this Agreement but is not addressed by the Specific Plan. The Northern Portion of the Property, the SLB Extension, and the Southern Portion of the Property are collectively referred to herein as the “Property”. The Northern Portion of the Property and the SLB Extension is described in Exhibit “A-1” to this Agreement, the Southern Portion of the Property is described in Exhibit “A-2” to this Agreement, and the Property is depicted in Exhibit “B” to this Agreement.
4. Owner has filed, or will be filing, and is seeking the approval of an annexation application pertaining to the Southern Portion of the Property (“Annexation Application”) through the Local Agency Formation Commission for Riverside County (“LAFCO”) pursuant to the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, Government Code Section 56000 et seq. LAFCO is processing the Annexation Application concurrently with City’s consideration of this Agreement and various land use entitlements detailed below.
5. The Parties acknowledge and agree that this Agreement shall be operative on the Northern Portion of the Property and the SLB Extension upon the Effective Date, and as established under the Development Agreement Law, this Agreement shall be operative on the Southern Portion of the Property upon approval of the Annexation Application.
6. Owner is proposing to develop and facilitate the future development on the Property of a project currently titled Sunset Crossroads, which is intended to include up to 223,753 square feet of commercial uses, and an approximately 125 room hotel on the Northern Portion of the 1229
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Property; (b) up to 4,749,000 square feet of industrial land uses within a 396.5-acre portion of the Property; (c) related signage; (d) and land for Open Space-Resources, and Open Space-Parks; and (e) circulation features, all as further set forth in the Specific Plan as modified by this Agreement.
7. Owner has initiated an application to City for this Agreement, and certain related land use entitlements and development rights (collectively, “Existing Development Approvals”, and listed in Exhibit “C” to this Agreement), which were approved by City, specifically: (a) a General Plan Amendment, designated (GPA 20-2501) by City, changing the General Plan land use designation of the Property to the land uses identified on the General Plan Land Use Map attached as Exhibit “B” (“GPA”), (b) a Specific Plan (designated SP 20-2002) , by City, (c) a Zone Change (designated ZC 20-3502), (d) a tentative parcel map (designated TPM 38118), (e) a Tax Sharing and Reimbursement Agreement and (f) an Environmental Impact Report (designated EA 20-1506) by City, inclusive of the EIR, incorporating a mitigation monitoring and reporting program (“MMRP”) and conforming to the specifications of the California Environmental Quality Act California Public Resources Code § 21000 et seq., and the CEQA guidelines, Title 14 of the California Code of Regulations, chapter 3, § 15000 et seq. (collectively, “CEQA”).
8. Owner has requested City to enter into a development agreement and proceedings have been taken in accordance with the Procedures and Requirements of City.
9. By electing to enter into this Agreement, City shall bind current and future Councils of City (“City Council”) by the obligations specified herein and limit the future exercise of certain governmental and proprietary powers of City.
10. The terms and conditions of this Agreement have undergone extensive review by City and the City Council and have been found to be fair, just, and reasonable.
11. The best interests of the citizens of the City and the public health, safety and welfare will be served by entering into this Agreement.
12. All of the procedures of CEQA have been met with respect to the Project and the Agreement.
13. This Agreement and the Project are consistent with the City General Plan, the City of Banning Municipal Code and the Specific Plan.
14. All actions taken, and approvals given by City have been duly taken or approved in accordance with all applicable legal requirements for notice, public hearings, findings, votes, and other procedural matters; and
15. This Agreement will confer substantial private benefits on Owner by granting vested rights to develop the Property in accordance with the provisions of this Agreement.
16. City has determined that development of the Property in accordance with this Agreement and Owner’s participation in the implementation of the Specific Plan and provision of the Public Improvements will result in a number of public benefits will provide substantial benefits to City and will further important policies and goals of the City. 1230
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17. 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 (“Development Agreement Law”) are intended.
18. 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.
19. The development of the Project and the Public Improvements and other Public Benefits require a substantial early investment of money and planning and design effort by Owner.
Without the protection provided by this Agreement, uncertainty that the Project may be completed in its entirety could result in a waste of public resources, escalate the cost of public improvements, and discourage Owner’s provision of the Public Benefits specified in this Agreement. Owner’s participation in the implementation of Project will result in a number of public benefits. These benefits require the cooperation and participation of City and Owner and could not be secured without mutual cooperation in and commitment to the comprehensive planning effort that has resulted in the Specific Plan and other development approvals adopted concurrently with this Agreement.
20. Owner wishes to avoid certain development risks and uncertainties that would, in the absence of this Agreement, deter and discourage Owner from making a commitment to implement the Project. The following assurances are of vital concern to Owner to offset or remove the disincentives and uncertainties:
a. Assurance to Owner that, in return for Owner’s commitment to the development of the Property, City will in turn remain committed to development of the Project in accordance with the Development Plan and the terms of this Agreement and subject to the Reservations of Authority.
b. Assurances to Owner that as Owner becomes obligated for the costs of designing and constructing the public and private improvements described in the Project Approvals, and to make dedications, Owner will become entitled to rely upon the vested rights conferred by this Agreement in the development of the Property; and c. Assurances to Owner that in City’s administration of the Development Plan, Owner will be allowed, consistent with the Specific Plan, to develop the types and intensities of use identified in the Specific Plan.
21. The Parties agree that the consideration to be received by City pursuant to this Agreement and the rights secured to Owner hereunder constitute sufficient consideration to support the mutual and respective covenants and agreements of the Parties. By entering into this Agreement, City desires to vest in Owner certain rights and approvals as specified in this Agreement.
22. This Agreement provides assurances that the public benefits identified below will be achieved in accordance with the terms of this Agreement. Developer is willing, pursuant to the 1231
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terms of this Agreement, to make expenditures and provide benefits to the City including, without limitation, construction of improvements in a manner that benefits a wider area, and mitigates impacts resulting in part from certain existing conditions and cumulative development in addition to those impacts caused by the Project, thus conferring a public benefit on the City. The Project will provide local and regional public benefits to the City, including, without limitation:
a. Increased real property taxes, sales taxes, transit occupancy taxes and other revenues to the City.
b. Provision of public facilities, including the construction of the Sunset Avenue Improvements. The Sunset Avenue Improvements are depicted in Exhibit “F”. c. Provision of a Public Benefit Fee, an Accelerated Transportation DIF Payment to facilitate the construction of the SLB Extension, and a Service Special Tax. d. Provision of $3 million of the Public Benefit Fee, regardless of whether the Project is developed.
e. Provision of funding for a Banning Electric Utility Substation. f. Provision of $16,000,000 for a possible future fire station to be considered by the City pursuant to Section 5.10.4.
g. Provision of $1,000,000 for a new fire ladder truck or other fire suppression equipment.
h. Provision of $750,000 for City downtown beautification/small business assistance.
i. Provision of $500,000 for a City animal shelter.
j. Dedication of property to the City as a site for a possible future fire station, a water tank, electrical substation and a reverse osmosis facility. k. Establishment of a job fair to benefit City residents, and a requirement that all leases include language requiring lessees to provide two weeks’ advance notice to City residents when new lessees are hiring employees.
l. Setting aside approximately 53 acres for Open Space Resource Land and approximately 5 acres for parks and recreational facilities (“Park”). m. Construction of the Park facilities, as specified in the Specific Plan (“Specific Plan Park Facilities”) and maintenance of the Park. n. Provision of both construction jobs and permanent jobs. 1232
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o. Provision of approximately $71,000,000 in City Development Impact Fees (“DIF”), TUMF and MSHCP impact fees and school fees, before the DIF transportation reduction specified herein.
p. Modifications to the Project analyzed in the EIR that are consistent with the Specific Plan to provide further buffer to certain nearby residential properties.
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 unless another meaning is clearly intended in the context in which it appears:
“Accelerated Transportation DIF Payment” has the meaning set forth in Section 5.5.1. “Additional Park Facilities” has the meaning set forth in Section 5.10.3. “Agreement” means this Development Agreement.
“Annexation” has the meaning set forth in Section 4.1.
“Annexation Application” has the meaning set forth in Recital 4. “Annexation Date” has the meaning set forth in Section 2.3.1. “Annexation Deadline” has the meaning set forth in Section 2.3.1 “Annual Escalation Factor” has the meaning set forth in Section 6.2.2(c). “Authorized Facilities and Fees” means facilities authorized under the Mello-Roos Act including, without exception, public streets and other related improvements, including grading, paving, curbs and gutters, sidewalks, street signalization and signage, street lights and parkway and landscaping related thereto, water facilities, storm drain facilities, sewer facilities, public parks, open space and landscaping, electrical facilities, any fees (cash contribution) paid by Owner pursuant to the Project’s conditions of approval or this Agreement or which is included in any City capital improvement fee program, to finance public facilities to be constructed and owned by City, subject to credit against the corresponding fee.
“Authorized Services” has the meaning set forth in Section 6.2.1. “Banning Electric Final Contribution” has the meaning set forth in Section 5.9.3. “Banning Electric Initial Contribution” has the meaning set forth in Section 5.9.1. 1233
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“Base Year” means the Fiscal Year prior to the effective date of the ordinance approving this Agreement.
“Benefitted Properties” has the meaning set forth in Section 5.12.1 “CEQA” means the California Environmental Quality Act.
“CFD” means a community facilities district formed pursuant to the Mello-Roos Act by the City as described in section 6.2.1.
“CFD Bonds” means one or more series of bonds (including refunding bonds) issued by the CFD secured by the levy of special taxes levied against taxable parcels within the boundaries of the Property, the proceeds of which reimburse the Owner for Authorized Facilities and Fees.
“Certificate” has the meaning set forth in Section 7.5. “City” means the City of Banning, a political subdivision of the State of California. “City Council” means the current and future councils of City. “City Expenditures” has the meaning set forth in Section 2.6. “City Grant” has the meaning set forth in Section 5.9.6. “City Manager” means the current and future city manager for the City. “City Ordinance” means the Ordinance adopted by the City Council approving this Agreement.
“City Substation Payment” has the meaning set forth in Section 5.9.3. “Conveyance Documents” has the meaning set forth in Section 5.9.3(a). “County” means County of Riverside.
“CSCDA” has the meaning set forth in Section 6.2.1.
“Default” has the meaning set forth in Section 8.4.
“Design Review” has the meaning set forth in the Specific Plan. “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. When authorized by a Subsequent Development Approval as provided by this Agreement, “development” includes the maintenance, repair, 1234
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reconstruction, or redevelopment of any building, structure, improvement, or facility after the construction and completion thereof.
“Development Agreement Law” as defined in Section 7 of the California Constitution and Section 65864, et seq. of the Government Code.
“Development Approvals” means all discretionary and ministerial permits and other entitlements authorizing the development and use of the Project and which have been requested by Owner and approved by the City including, but not limited to the Existing Development Approvals and the following and any amendments thereto:
(1) General Plan Amendments
(2) Specific Plan
(3) Zoning Code Amendments
(4) Sign Program
(5) Tentative and Final Subdivision and Parcel Maps
(6) Lot line adjustments
(7) Minor Modifications to Specific Plan
(8) Variances
(9) Conditional use permits
(10) Design Review approvals
(11) Reimbursement Agreement
(12) DIF Credit and Reimbursement Agreement
(13) Grading and building permits
(14) Electrical and Misc. Permits
(15) Sign Permits
(16) Occupancy Permits
(17) Tenant Permits
“Development Exactions” means any requirement of City 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 Development Fees in 1235
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order to lessen, offset, mitigate or compensate for the impacts of development on the environment or other public interests.
“Development Fees” or “DIF” means any monetary exactions, other than Processing Fees, charged by City or local agencies under City’s control to applicants in connection with approval of development projects for the purpose of defraying all or a portion of the cost of public improvements, public services or community amenities related to the Project or the Property.
“Development Limitation” has the meaning set forth in Section 2.3.2. “Development Plan” means the Existing Development Approvals and the Existing Land Use Regulations applicable to development of the Property. “DIF Vesting” has the meaning set forth in Section 5.11. “DIF Vesting End Date” has the meaning set forth in Section 5.11. “Effective Date” means the later of (i) the date the City Ordinance approving this Agreement becomes effective; or (ii) the date the Agreement is recorded in the County Recorder’s Office.
“Engineer’s Estimate” has the meaning set forth in Section 5.9.2. “EIR” means Environmental Impact Report, State Clearinghouse No. 2021020011, addressing the impacts of the Project, certified by the City in accordance with the requirements of CEQA and includes, without limitation, the Draft EIR, the Final EIR and all technical appendices, as the EIR has been supplemented as described in City Resolution 2026-28 certifying the EIR.
“Electric DIF Obligation” has the meaning set forth in Section 5.9.3. “Electrical Property” has the meaning set forth in Section 5.8.3. “Existing Development Approvals” means all Development Approvals approved or issued prior to the Effective Date. Existing Development Approvals includes the list of Existing Development Approvals incorporated herein as Exhibit “C” and all other Development Approvals which are a matter of public record on the Effective Date or the finalization of which is contingent only upon this Development Agreement becoming effective. “Existing Land Use Regulations” means all Land Use Regulations in effect on the Effective Date and includes the Land Use Regulations incorporated herein as Exhibit “D” and all other Land Use Regulations which are a matter of public record on the Effective Date, as the same may have been modified or superseded pursuant to the Existing Development Approvals or this Agreement.
“Fair Share” shall have the meaning set forth in Section 5.12.2. 1236
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“Fire Equipment Payment” shall have the meaning set forth in Section 5.10.5. “Fire Station Payment” shall have the meaning set forth in Section 5.10.4. “Fire Station Property” shall have the meaning set forth in Section 5.8.1. “Fiscal Year” means the period beginning on July 1 of each year and ending on the next succeeding June 30.
“Fueling Facility” has the meaning set forth in the Specific Plan. “Government Code” means the California Government Code. “GPA” has the meaning set forth in the Recitals hereto. “Gross Tax Increment Revenue” shall mean, with respect to the Property, one hundred percent (100%) of the ad valorem tax revenue the City receives from the County with respect to the Incremental Assessed Property Value of the Property for any given Fiscal Year.
“Incremental Assessed Property Value” means, in any Fiscal Year, the difference between the assessed value of the Property and the assessed value of the Property in the Base Year, to the extent that the difference is a positive number. “Industrial Property” has the meaning set forth in Section 6.2.2(b). “Initial Phasing Plan” means the phasing plan set forth on Exhibit “E-1”. “LAFCO” means the Local Agency Formation Commission for Riverside County. “Land Use Regulations” means all ordinances, resolutions, codes, rules, regulations and official policies of City governing the development and use of land, including, without limitation, the permitted use of land, the density or intensity of use, subdivision requirements, the maximum height and size of proposed buildings and structures, Development Exactions, 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 City ordinance, resolution, code, rule, regulation, or official policy, governing:
(1) The conduct of businesses, professions, and occupations; (2) Taxes and assessments;
(3) The control and abatement of nuisances;
(4) The granting of encroachment permits and the conveyance of rights and interests which provide for the use of or the entry upon public property; (5) The exercise of the power of eminent domain.
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“Maximum Reimbursement Payment” has the meaning set forth in Section 6.4. “MARA Agreement” has the meaning set forth in Section 5.4. “Mello-Roos Act” means the Mello-Roos Community Facilities Act of 1982 (Cal. Gov’t Code §§ 53311-53368), as amended from time to time.
“MMRP” means a mitigation monitoring and reporting program, as more fully described in the Recitals hereto.
“Mortgage” means any mortgage, deed of trust, sale and leaseback arrangement (in which the Property, or a portion thereof or an interest therein is sold by Owner and leased back concurrently therewith, which arrangement is subject to no prior contractual encumbrances securing payment of money), or other transaction in which the Property, or a portion thereof or an interest therein is pledged as security contracted in good faith and for fair value.
“Mortgagee” means the holder or beneficiary of any Mortgage covering all or part of the Property or any successor and assignee of any such Mortgage holder or beneficiary. “Non-DIF Sunset Improvements” has the meaning set forth in Section 5.6. “Northern Portion of the Property” has the meaning set forth in Recital 3. “Offsite Interests” has the meaning set forth in Section 3.9. “Operating Memoranda” has the meaning set forth in Section 11.7. “Outside Agencies” has the meaning set forth in Section 3.7. “Outside Agency” has the meaning set forth in Section 3.7. “Oversized Improvements” shall mean any Public Improvement with respect to which the Parties agree that Owner’s direct or indirect financial contribution exceeds the cost of the Improvement or portion thereof reasonably attributable to the Project or phase thereof, as depicted in Exhibit “F”.
“Owner” means the persons and entities listed as Owner on the first page of this Agreement and their successors in interest to all or any part of the Property. “Owner’s Costs” has the meaning set forth in Section 5.5.2(d)(iii). “Owner’s Deficit” has the meaning set forth in Section 5.5.2(d)(iii). “Owner’s Offset” has the meaning set forth in Section 5.5.2(d)(iii). “Owner’s Plan” has the meaning set forth in Section 5.5.2(b). “Park” has the meaning set forth in Recital 22.l.
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“Permitted Uses” has the meaning set forth in Section 3.4.3. “Phasing Plan” has the meaning set forth in Section 3.5.2. “Procedures and Requirements” means the Procedures and Requirements of the City of Banning For the Consideration of Development Agreements. “Processing Fees” has the meaning set forth in Section 3.3.1. “Project” means the development of the Property contemplated by the Development Plan as the same may be further defined, enhanced, or modified pursuant to the provisions of this Agreement.
“Property” means the real property described on Exhibits “A-1” and “A-2.” “Public Benefit Fee” has the meaning set forth in Section 5.2. “Public Benefits” means the Public Improvements constructed by Owner pursuant to this Agreement, including the Oversized Improvements (subject to the right of Owner for reimbursement and/or fee credit as described in this Agreement), the payment of Owner’s Fair Share of Public Improvements and the additional matters described as public benefits in Section 5.
“Public Improvements” has the meaning set forth in Section 5.3. “Public Maintenance and Access Easements” has the meaning set forth in Section 5.4. “Reduced Tolling Obligations” has the meaning set forth in Section 2.3. “Regulatory Change” has the meaning set forth in Section 3.2. “Retail Plan” has the meaning set forth in Section 3.11. “Retail Date” has the meaning set forth in Section 3.11. “Retail Threshold” has the meaning set forth in Section 3.11. “Reimbursement Payment” has the meaning set forth in Section 6.4. “RCA” means the Regional Conservation Authority.
“RCTC” means the Riverside County Transportation Commission. “RMA” has the meaning set forth in Section 6.2.2.
“Reservations of Authority” means the rights and authority reserved to City under Section 3.6 of this Agreement and not a part of the assurances and rights provided to Owner under this Agreement.
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“RO Property” has the meaning set forth in Section 5.8.4. “Sales Tax Revenue” means the City’s share of annual State sales tax revenue received from the State and/or County attributable to the Property. “Service Special Tax” has the meaning set forth in Section 6.2.2(b). “SLB Estimated Completion Date” has the meaning set forth in Section 5.5.2(a). “SLB Extension” has the meaning set forth in Recital 3, as depicted in Exhibit “F”. “SLB Extension Completion Date” has the meaning set forth in Section 5.5. “SOI” has the meaning set forth in Recital 3.
“Southern Portion of the Property” has the meaning set forth in Recital 3. “Specific Plan” means the Sunset Crossroads Specific Plan (Specific Plan No. 20- 20000002) as the same may be amended or modified from time to time consistent with the requirements of this Agreement.
“Specific Plan Park Facilities” has the meaning set forth in Recital 22.m. “Subsequent Installment” has the meaning set forth in Section 5.2.2. “Substation” has the meaning set forth in Section 5.9.1. “Substation Clearances” has the meaning set forth in Section 5.9.1. “Substation Costs” has the meaning set forth in Section 5.9.1. “Substation Excess Cost Documentation” has the meaning set forth in Section 5.9.3. “Substation Fair Share Percentage” has the meaning set forth in Section 5.9.3(b). “Substation Funding Date” has the meaning set forth in Section 5.9.3. “Substation Reimbursement” has the meaning set forth in Section 5.9.3(b) “Subdivision Map” means any parcel map or tract map approved by the City pursuant to the Subdivision Map Act, including without limitation Parcel Map No. _________. “Subdivision Map Act” means Government Code Section 66410, et seq. “Subsequent Development Approvals” means all Development Approvals approved after the Effective Date in connection with development of the Property that are adopted in accordance with the Development Plan or in accordance with Subsequent Land Use Regulations adopted consistent with the requirements of this Agreement, including the Reservation of Authority, but specifically excluding the Existing Development Approvals. 1240
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“Subsequent Land Use Regulations” means any Land Use Regulations adopted and effective after the Effective Date of this Agreement that are adopted in accordance with the Development Plan and the requirements of this Agreement, including the Reservation of Authority.
“Sunset Avenue Improvements” has the meaning set forth in Section 5.6, as depicted in Exhibit “F”.
“Term” has the meaning set forth in Section 2.3.1.
“Third Party Fair Share Payments” has the meaning set forth in Section 5.6. “Tolling Period” has the meaning set forth in Section 2.3. “Transfer” means sale, assignment, lease, sublease, or any other transfer of a legal or equitable interest in the Property.
“Travel Center Retail Uses” has the meaning set forth in the Specific Plan. “TUMF Agreement” has the meaning set forth in Section 5.5.2(d)(ii). “Water Tank Property” has the meaning set forth in Section 5.8.2. “WRCOG” means the Western Riverside Council of Governments.
1.2 Exhibits. The following documents are attached to, and by this reference made a part of, this Agreement:
Exhibit “A-1” Legal Description of the Northern Portion of the Property and the SLB Extension
Exhibit “A-2” Legal Description of the Southern Portion of the Property Exhibit “B” Map Showing Property and Its Location
Exhibit “C” Existing Development Approvals
Exhibit “D” Existing Land Use Regulations
Exhibit “E-1” Initial Phasing Plan
Exhibit “F” Public Improvements
Exhibit “G-1” Modifications to Project
Exhibit “G-2” DIF Credit and Reimbursement Agreement
Exhibit “H” Development Fees in Effect as of Effective Date 1241
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Exhibit “I” Fair Share Payments
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 shall be carried out only in accordance with the terms of this Agreement.
2.2 Ownership of Property. Each Owner represents and covenants that it is the owner of a legal or equitable interest in the Property or a portion thereof.
2.3 Term.
2.3.1 Commencement. For the Northern Portion of the Property and the SLB Extension, the term of this Agreement shall commence on the Effective Date. For the Southern Portion of the Property, this Agreement shall become operative on the recordation date of the LAFCO Certificate of Completion. (“Annexation Date”). This Agreement shall remain in effect for thirty (30) years from the Effective Date unless this term is modified or extended pursuant to the provisions of this Agreement (“Term”). The Annexation Date shall be no later than June 15, 2030 or such subsequent date as may be determined based upon intervening Development Limitations as that term is defined below in Section 2.3.2 or the Parties’ written agreement to extend this time period (“Annexation Deadline”). In the event that either the Annexation or another successor annexation effort relative to the Southern Portion of the Property is not complete by the Annexation Deadline, either Party may terminate this Agreement as a matter of right upon written notice to the other per Section 2.7 below. Notwithstanding the foregoing, the provisions of Sections 5.2, 5.4, 5.5, 5.6 and 6.4 shall survive the expiration or the termination of this Agreement.
2.3.2 Extensions for Development Limitations. Notwithstanding the Parties’ expectation that there will be no limit or moratorium upon the Project’s development or the issuance of any Development Approvals, building or other development related permits (“Development Limitation”) during the Term, the Parties understand and agree that various third Parties may take action causing a de facto Development Limitation. Such third party actions include the filing of litigation challenging the City’s issuance of any Development Approval, including this Agreement and the following potential Development Limitations. Consequently, the Term, all Development Approvals and all obligations imposed pursuant to this Agreement shall be extended day for day for any delay caused by any of the following potential Development Limitations for a time equal to the duration of that delay occurring during the Term as further provided below:
(a) floods, earthquakes, other Acts of God, fires, moratoria enacted by governmental entities or agencies, including Owner’s inability to obtain any kind of utility service to serve the Project, litigation challenging this Agreement or any Development Approvals, injunctions issued by any court of competent jurisdiction applicable to this Agreement or the Development Approvals, acts of the public enemy, wars, riots or similar hostilities; epidemics, quarantine, pandemics or other national, state, or local mass medical emergencies, restrictions; freight embargoes, lack of transportation, unusually severe weather, inability to secure or delays in 1242
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securing labor, fuels, materials, services or tools, delays due to the existence or remediation of hazardous materials, acts of God, riots, war or acts of terrorism; (b) Strikes or other labor problems, or delays of any contractor, subcontractor or supplier;
(c) Any national, state, county or local state of emergency declared by a duly authorized public official;
(d) Any delays resulting from the unreasonable delay or failure of a governmental agency or entity, excluding the City, to perform any act or to issue any permit or approval necessary for the Project where such delay or failure is beyond the reasonable control of the Owner and not caused by any act or omission of the Owner;
Each Party shall promptly notify the other Party to this Agreement upon learning of any Development Limitation. If any Party to this Agreement is prevented (the filing of a lawsuit by a third party attacking this Agreement or the Development Approvals is deemed to prevent any Party from performing its obligations under this Agreement or the Development Approvals) by any Development Limitation from performing its obligations under this Agreement, then on the condition that the Party claiming a Development Limitation (i) did not cause said event(s) and (ii) said event(s) was beyond said Party’s reasonable control, the time for performance by said Party of the applicable obligations under this Agreement shall be extended day for day by a number of days equal to the number of days of that said Development Limitation continued in effect or by the number of days it takes to repair or restore the damage caused by the Development Limitation to the condition which existed prior to the occurrence, whichever is longer, or longer as the Parties may mutually agree (“Tolling Period”). Regarding the applicable time periods of Owner’s satisfaction of obligations under Sections 3.11 (Retail Development Obligations), 5.2.1 and 5.2.2 (Public Benefit Fee), 5.5.1 (Accelerated Transportation DIF Payment), 5.8.1 (Fire Station Property), 5.8.2 (Water Tank Property), 5.8.3 (Electrical Property), 5.8.4 (RO Property), 5.9.1 (Banning Electric Initial Contribution), 5.9.3(Substation Funding Date), 5.10.2 (Open Space Dedication), 5.10.3 (Park Dedication) 5.10.4 (initial Fire Station Payment), and 5.10.6 (City Grant) (collectively, “Reduced Tolling Obligations”), when such Development Limitation terminates, all of the Reduced Tolling Obligations’ respective time periods for satisfaction shall be extended only ten (10) business days after the Development Limitation terminates.
2.4 Transfer.
2.4.1 Right to Transfer. Owner shall have the right to transfer the Property in whole or in part (provided that no such partial transfer shall violate the Subdivision Map Act) to any person, partnership, joint venture, firm or corporation at any time during the term of this Agreement; provided, however, that any such, transfer 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 transfer of any right or interest under this Agreement shall be made unless made together with the transfer of all or a part of the Property. 1243
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(b) Concurrent with any such transfer, or within thirty (30) days thereafter, Owner shall notify City, in writing, of such transfer and shall provide City with an executed agreement by the transferee providing therein that the transferee expressly and unconditionally assumes all the duties and obligations of Owner under this Agreement with respect to the portion of the Property so transferred.
(c) Notwithstanding the failure of any transferee to execute the agreement required by Paragraph (b) of this Subsection 2.4.1, the burdens of this Agreement shall be binding upon such transferee, but the benefits of this Agreement shall not inure to such transferee until and unless such agreement is executed.
2.4.2 Release of Transferring Owner.
(a) Notwithstanding any transfer, a transferring Owner shall continue to be obligated under this Agreement until the full satisfaction by such transferring Owner of the following conditions and upon such satisfaction shall be released from the obligations under this Agreement: (i) Owner no longer has a legal or equitable interest in all or any part of the Property; (ii) Owner is not then in default under this Agreement; (iii) Owner has provided City with the notice and executed agreement required under Section 2.4.1(b) above; and (iv) The transferee provides City with security equivalent in all respects to any security previously provided by Owner to secure performance of its obligations hereunder. If City previously had not required the posting of security, then City shall not require the transferee to provide such security.
(b) If requested by transferring Owner, the City shall promptly memorialize such release in writing upon satisfaction of the foregoing conditions.
A default under this Agreement by Owner shall not be considered or acted upon by the City as a default by the transferee and shall not affect the transferee’s rights or obligations hereunder. Likewise, a default by a transferee relating to the transferred property shall not be considered or acted upon by the City as a default by Owner and shall not affect Owner’s rights and obligations hereunder.
2.4.3 Subsequent Transfer. Any subsequent transfer after an initial transfer shall be made only in accordance with and subject to the terms and conditions of Section 2.4.
2.5 Amendment or Cancellation of Agreement. This Agreement may be amended or cancelled in whole or in part only by written consent of all Parties in the manner provided for in Government Code Section 65868 or 65865.1. This provision shall not limit any remedy of City or Owner as provided by this Agreement. In the case of amendments affecting portions of the Property, only the consent of the owner of such portion of the Property shall be required so long as the amendment does not diminish the rights appurtenant to or increase the burdens upon any other portion of the Property. Any Subsequent Land Use Approval pursuant to this Agreement and any amendment of the Land Use Regulations including to the General Plan, the Specific Plan or City’s zoning ordinance, shall not require amendment of this Agreement. Instead, any such 1244
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amendment shall be deemed to be incorporated into this Agreement at the time that such amendment is approved by the City Council.
2.6 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 by a court of competent jurisdiction setting aside, voiding or annulling the adoption of the ordinance approving this Agreement, provided the time for filing any return to writ has also expired. (c) The adoption of a referendum measure overriding or repealing the City Ordinance.
(d) Owner’s election to terminate this Agreement. It is understood that the majority of the industrial development allowed by the Development Approvals is located on land that must be annexed to the City with the approval of LAFCO.
Therefore, if LAFCO denies the Annexation of the Property not due to the acts or omissions of Owner, Owner may elect, in its sole and absolute discretion, not to develop the Property in accordance with the Development Approvals and terminate this Agreement and the Development Approvals prior to the issuance of a grading permit for the industrial development. In such a situation, Owner shall provide notice of said election to terminate this Agreement and the Development Approvals to the City, and this Agreement and the Development Approvals shall be terminated. The Parties, if they mutually agree, may enter into a meet and confer process to determine if any of the Development Approvals within the boundaries of the City should be retained and not terminated. Following receipt of Owner’s notice of election to terminate this Agreement and Development Approvals, Owner and City shall execute an appropriate instrument in recordable form evidencing such termination of this Agreement and the Development Approvals as provided in the preceding sentence. In the event that City has received any monetary payments from Owner under Section 5.5.1 (Accelerated DIF), 5.9.1 (Electrical Substation),
5.10.4 (Fire Station) or 5.10.6 (City Grant) prior to Owner’s termination under this Section 2.6(d), it shall return such payments to Owner within thirty (30) days from receipt of Owner’s election to terminate this Agreement and the Development Approvals, less the amount of any reasonable expenditures made by City for their intended purpose (“City Expenditures”), including, but not limited to, design or construction fees for the fire station (5.10.4) (and fire equipment purchases (5.10.5)), the electric Substation, (5.9) Fair Share payments for roadway improvements (5.7) Animal Shelter Grant (5.10.8) incurred prior to such termination, and provided further that the amount of Three Million Dollars ($3,000,000) provided for in Section 5.2.1 (First Installment, Public Benefit Fee) and the amounts under 3.11 (Retail Development Obligations) and 5.2.2 (Subsequent Installments, Public Benefit Fee), shall not be subject to termination, reimbursement or repayment under any circumstances. In order for the City to be 1245
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eligible to any offset due to the incurrence of City Expenditures, City is required to provide documentation to Owner of all City Expenditures actually paid by City. In addition, upon City’s receipt from Owner of Owner’s notice of election to terminate this Agreement and Development Approvals, City shall cease the incurrence of further City Expenditures. Any construction completed by Owner prior to such termination shall be subject to applicable DIF (as may be deducted from DIF paid under 5.5.1). Further, it is understood that City does not collect TUMF and MSHCP and that Owner will be solely responsible to recover any such amounts from WRCOG and RCA, as applicable, with no liability to City whatsoever. (e) 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.
2.7 Notices.
2.7.1 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: (a) when hand delivered to the other Party; (b) five (5) days after such notice has been sent by United States mail via certified mail, return receipt requested, postage prepaid, and addressed to the other Party as set forth below; or (c) two (2) days after such notice has been deposited with a national overnight delivery service reasonably approved by the Parties (Federal Express, United Parcel Service and U.S. Postal Service are deemed approved by the Parties), postage prepaid, addressed to the Party to whom notice is being sent as set forth with next Business-Day delivery guaranteed, or (d) on the date of delivery shown in the email records of the Party sending the email, provided that the sending Party either receives a confirmation of delivery from the persons to whom the email is addressed or follows the provisions for notice set forth in clauses (a), (b) or (c) within two (2) days following email transmittal.
2.7.2 Unless otherwise provided in writing, all notices hereunder shall be addressed as follows:
If to City:
City Clerk
City of Banning
99 East Ramsey Street
Banning, CA 92220
with copies to:
City Manager
City of Banning
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99 East Ramsey Street
Banning, CA 92220
and to:
Community Development Director
City of Banning
99 East Ramsey Street
Banning, CA 92220
And to:
City Attorney
City of Banning
99 East Ramsey Street
Banning, CA 92220
If to Owner:
NP Banning Industrial, LLC
Attn: Nathaniel Hagedorn
3315 N. Oak Trafficway
Kansas City, MO 64116
Email: [email protected]
with copies to:
John C. Condas, Esq.
Allen Matkins Leck Gamble Mallory & Natsis LLP
2010 Main Street, Suite 800
Irvine, CA 92614
email: [email protected]
and to:
NorthPoint Development, LLC
Attn: Asst. General Counsel
3315 N. Oak Trafficway
Kansas City, MO 64116
Email: [email protected]
and to:
NP Banning Industrial, LLC
Attn: J.J. Jenkins
12977 N. Outer Forty Rd., Suite 203
St. Louis, MO 63141
Email: [email protected]
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2.7.3 Any 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 any such change.
2.8 Estoppel Certificate. City shall, at any time and from time to time within ten (10) days after receipt of written notice from Owner so requesting, execute, acknowledge and deliver to Owner a statement in writing: (a) certifying that this Agreement is unmodified and in full force and effect (or, if modified, stating the nature of such modification and certifying that this Agreement, as so modified, is in full force and effect); (b) acknowledging that there are no uncured defaults on the part of Owner hereunder or specifying such defaults if any are claimed; and (c) addressing such other reasonable and customary matters as Owner may request. Any such statement may be relied upon by any prospective purchaser or encumbrances of all or any portion of the Property. Upon Owner’s written request, City shall issue a certificate of performance evidencing completion of any of Owner’s obligation(s) under this Agreement.
3. DEVELOPMENT OF THE PROPERTY.
3.1 Vested Rights to Develop. Subject to the terms of this Agreement including the Reservations of Authority, Owner shall have a vested right to develop the Project on the Property during the Term of this Agreement in accordance with, and to the extent of, the Development Plan.
City covenants that it will not initiate, so long as this Agreement remains in effect, any amendment to the General Plan directly applicable to the Property, the Project’s zoning as established by the Development Plan or the Specific Plan in a manner that Owner reasonably deems contrary to its interest in, or use of the Property. Except as otherwise provided in this Agreement, the Permitted Uses of the Property shall include construction of commercial and/or industrial buildings and appurtenant structures, installation of all improvements and infrastructure reasonably incident thereto, as permitted under the Development Plan and this Agreement, including without limitation as set forth in Section 3.4.3, and the density or intensity of use of the Property and the maximum height and size of proposed buildings shall be as set forth in the Development Plan.
Provisions for reservation or dedication of land for public purposes applicable to the Property shall be those set forth in Section 5.10.3 of this Agreement and the Development Plan. Subject to the other provisions of this Agreement, Owner shall have the right to increase the density and intensity of use of any portion of the Property by a transfer of density or floor area from other portions of the Property in excess of the density and intensity limitations specified under and consistent with the Development Plan. Nothing herein is deemed or interpreted to vest an increase in the overall density or intensity of use of the Property as a whole, and any density transfer shall fully conform to the requirements of the Specific Plan. Additionally, notwithstanding the language of this Section or any other language in this Agreement, all specifications, standards and policies regarding the design and construction of public works facilities, if any, shall be those that are in effect at the time the applicable Project plans are being processed for approval.
3.2 Effect of Agreement on Land Use Regulations. In accordance with the terms of Government Code § 65866, 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 structures, and the design, improvement and construction 1248
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standards and specifications applicable to development of the Property shall be the Development Plan. The Development Plan shall continue to apply to the Project and to the reconstruction of any Project improvements damaged or destroyed from any cause. Except as otherwise provided in this Agreement, no amendment, revision of, or addition to the Development Plan that would affect the Project or increase the obligations or decrease the rights of Owner hereunder or under the Development Plan (“Regulatory Change”) shall be made without Owner’s consent, whether adopted or approved by the City Council or any office, board commission or other agency of City, or by the people of City through an initiative measure. Furthermore, no such Regulatory Change shall be effective or enforceable by City with respect to the Project or the Property, nor against Owner or its successors or assigns. However, nothing in this Section shall preclude City: (i) from applying the Subsequent Land Use Regulations authorized by Section 3.3.1 or (ii) from denying or conditionally approving any subsequent development project application on the basis of the Development Plan (except for this Agreement, the amendment process for which is set forth in Section 2.5) as it may be amended or modified from time to time, but only at the written request of Owner or with the written consent of Owner in its sole and absolute discretion. All amendments to the Development Approvals shall automatically become part of the Development Plan.
3.3 Reservations of Authority.
3.3.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the following Subsequent Land Use Regulations shall apply to the development of the Property.
(a) Reasonable processing fees and charges for land use, approvals of entitlements and mitigation monitoring imposed by City to cover the estimated actual costs to City of processing applications for Development Approvals or for monitoring compliance with any Development Approvals granted or issued (“Processing Fees”); provided that: (i) such Processing Fees are in force and effect on a City-wide basis at the time application is submitted for such permits, approvals or entitlements; and (ii) any Processing Fees shall not exceed an amount which will compensate City for the estimated reasonable cost and increases incurred, as permitted pursuant to Government Code Section 54990. City may also increase Processing Fees based on any increase in the estimated reasonable cost to City of performing the work for which the particular Processing Fee is paid provided that such increases are made on a City-wide basis. In addition, all processing fees and charges for plan checks, building permits and inspections, excluding all such charges imposed by the City Public Works Department, shall be based upon the City fee schedule in effect at the time such permits and inspections are sought. (b) Regulations prescribing or relating to procedural matters, hearing bodies, petitions, applications, notices, findings, records, hearings, reports, recommendations, appeals and any other matter of procedure excluding those set forth in the Development Plan.
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(d) Regulations imposing Development Fees, subject to the provisions of Section 5.11 below.
(e) Regulations that are reasonably necessary to protect the public health and safety regardless as to whether they conflict with the Development Plan.
To the extent feasible , any such regulations shall be applied and construed so as to provide Owner with the rights and assurances provided under this Agreement. (f) Regulations that do not conflict with the Development Plan. For purposes of this Section, a Subsequent Land Use Regulation shall be deemed in conflict with the Development Plan if it substantially increases the cost of development or reduces the Project unit or square footage, yield, or materially limits the rate, timing, or sequencing of development of the Property. Any regulation, whether adopted by initiative or otherwise, materially limiting the rate or timing of development of the Property shall be deemed in conflict with the Development Plan and shall therefore not be applicable to the development of the Property.
(g) Regulations for which Owner has given written consent to be applied to development of the Property, regardless of whether they conflict with the Development Plan.
(h) Regulations that City is required to adopt and/or enforce by applicable state or federal law.
3.3.2 Subsequent Development Approvals. This Agreement shall not prevent City, in acting on Subsequent Development Approvals, from applying Subsequent Land Use Regulations, that are approved in writing by Owner, nor shall this Agreement prevent City from denying or conditionally approving any Subsequent Development Approval on the basis of the Development Plan or any Subsequent Land Use Regulation, authorized pursuant to Section 3.3.1 or approved by Owner in writing.
3.3.3 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, preempt, 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 and the provisions of Section 11.4 shall apply to any modifications or suspensions pursuant to this Section.
3.3.4 Intent. The Parties acknowledge and agree that City 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 City 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 City all such power and authority which cannot be restricted by contract. 1250
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3.4 Subsequent Development Review.
3.4.1 Processing of Subsequent Development Applications. In connection with any Subsequent Development Approval, City shall exercise its discretion in accordance with the Development Plan and as provided by this Agreement including, but not limited to, the Reservations of Authority; provided however that Subsequent Development Approvals shall not be disapproved, conditioned or delayed by City for reasons inconsistent with the Development Plan or the provisions of this Agreement and the conditions, terms, restrictions, and requirements for any subsequent discretionary actions shall not prevent development of the land for the uses and to the density or intensity of development set forth in the Development Plan or this Agreement.
City shall accept for processing, review and action all applications for Subsequent Development Approvals, and such applications shall be processed in the normal manner for processing such matters, consistent with the Development Plan. Following approval of each Subsequent Development Approval, Owner shall have the vested right to develop pursuant to said approval to the same extent that Owner has the vested right to develop pursuant to the Development Plan. If, as of the date Owner applies for any Subsequent Development Approval, Owner has fulfilled, or irrevocably committed itself with respect to, any obligation on its part to finance or otherwise contribute its share of the public improvements applicable as of that date and made appropriate arrangement to cause the construction of such public improvements subject to a Reimbursement Agreement under Section 5.12.1, City shall not withhold such Subsequent Development Approval on the basis of any delay in obtaining the financial or other contributions of any other property owner or Owner to such improvements. Nothing in this Agreement shall be interpreted to require the City to pay, from its general fund, special fund or any other fund, the costs of all or any part of the Project or related public improvements other than as expressly provided in Section 5 of this Agreement with respect to the Public Improvements as specified in this Agreement, and, if no other method of providing such Public Improvements is available, the provisions of Section 5.12 shall apply to the extent applicable.
3.4.2 Additional CEQA Review. City shall not require Owner to obtain any approvals or permits for the development of the Project in accordance with this Agreement other than those permits or approvals that are required by the Development Plan or this Agreement. The Parties agree that this Agreement does not modify, alter or change City’s obligations pursuant to CEQA and acknowledge that future discretionary actions may require additional environmental review pursuant to CEQA. In the event that additional environmental review is required by CEQA, City agrees to utilize tiered environmental documents, including the use of addenda, to the fullest extent permitted by law, as determined by City, and as provided in California Public Resources Code Sections 21093 and 21094. The Community Development Director shall make the determination as to the level of CEQA documentation (exemption, addendum, supplemental EIR, supplemental MND, or subsequent EIR or no further review required), that is appropriate and may request and obtain technical information as necessary to make this determination. Because the Project has been extensively reviewed in the EIR, it is the intent of City in adopting this Agreement and the Existing Development Approvals that applications for implementing approvals for the Project, including with respect to grading, improvements, individual maps, buildings or phases, consistent with the Development Plan shall not require additional review under CEQA, provided that none of the conditions are present which require further environmental review under CEQA, including but not limited to Public Resources Code Section 21166 and provisions that may require an Addendum to the EIR under CEQA Guidelines Section 15164. 1251
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3.4.3 Permitted Uses. The Project is designed to include regional commercial uses, including up to 200,000 square feet of large single tenant use and other commercial retail and restaurant uses, a hotel and warehouse and industrial uses, which constitute Permitted Uses (defined below) in the Specific Plan. However, because the buildings in the commercial and industrial areas of the Property will be leased to third parties, the Specific Plan provides for a range of allowable uses. Therefore, while the uses described above may be developed under the Development Plan, the Development Plan does not require these uses to be implemented and any of the commercial land uses listed in Table 3-1 of the Specific Plan are deemed to be consistent with the Development Plan and allowed uses so long as the City determines either that the environmental impacts of such uses do not generate new significant unmitigatable impacts as compared with what was disclosed in the EIR or supplemental environmental analysis is performed by the City as required by CEQA. The full list of Permitted, Conditionally Permitted, Ancillary, and Prohibited Uses in this Planning Areas is provided in Chapter 3, Development Standards of the Specific Plan (“Permitted Uses”). City, in considering an application for a specific use, shall determine whether there are significant environmental impacts resulting from such proposed use not addressed in the EIR, as supplemented, and in that case whether to prepare additional environmental documentation. If the environmental impacts exceed the impacts disclosed in the EIR or subsequent environmental documentation previously approved by City, City shall undertake additional environmental review in compliance with CEQA prior to approving any such use.
3.5 Timing and Phasing of Development.
3.5.1 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. City 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 for construction of Public Improvements set forth in the Development Plan or in the Phasing Plan, as the same may be amended from time to time.
3.5.2 Phasing of Development. Owner may phase its subdivision of the Property and/or any of the Planning Areas by applying for Subdivision Maps covering less than the entire Property or some discrete portion of any of the Planning Areas. Attached hereto as Exhibit “E” is an initial phasing plan for construction of the Project (“Initial Phasing Plan”), which may be modified from time to time as set forth in Section 3.5.3. The Initial Phasing Plan, and all subsequent revisions to the Initial Phasing Plan, shall insure that each building of each phase shall have adequate public facilities to service each building of each phase. The phasing plan in effect during any given time period shall be referred to as the “Phasing Plan”. The Parties acknowledge and agree that Owner may modify the Phasing Plan at any time, in its sole and absolute discretion, as long as each phase or each building in each phase can be adequately serviced with all necessary public facilities related to such modification of the Phasing Plan. Notwithstanding the foregoing, 1252
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if the Developer modifies the Initial Phasing Plan to increase or decrease the need for public facilities serving the buildings in one or more of the phases, Developer and City shall mutually agree to modify the public facilities to assure that each building of each phase has adequate public facilities to service each building of each such phase.
3.5.3 Deviation from Phasing Plan. The Parties acknowledge that Owner cannot at this time accurately predict the time schedule within which the Project will be developed, or the order in which particular phases or other portions of the Project will be developed, and that the rate, timing, order, and sequence of the development of the Project will depend on numerous circumstances beyond Owner’s control, including, without limitation, market trends, demand, the condition of capital markets, interest rates, availability of financing and other economic and social factors. Therefore, so long as the Project is developed in accordance with the Development Plan (as these may be amended from time to time pursuant to this Agreement), Owner shall not be required to initiate or complete development of the Project, or any particular phase or portion of the Project, within any specific period of time. Subject to the provisions of this Agreement, including but not limited to Sections 3.5.1 and 3.5.2, Owner shall develop the Project in accordance with the Owner’s own time schedule as such schedule may exist from time to time, and Owner may determine which part of the Project shall be developed during each phase of the Project, it being the intent of the Parties hereunder to cure any deficiency in this Agreement by reason of any failure to provide for the timing of development by acknowledging and providing that Owner shall have the right to develop the Project in such order and at such rate and at such times as Owner deems appropriate in the good faith exercise of its objective business judgment. It is acknowledged, however, that any deviation from the project phasing set forth in the Phasing Plan agreed upon by the Parties may require modification of the timing and order of providing public facilities provided in the Existing Development Approvals in order to insure that each building of the Project is adequately serviced by all necessary Public Improvements. Owner shall give City written notice of any intended deviation from the phasing set forth in the Phasing Plan, as modified by any prior, noticed deviations, with such notices to include a revised phasing plan.
By entering into this Agreement, Owner shall not be obligated to build any structures, make any improvement, or otherwise develop the Project, provided, however, that Owner’s failure to develop the Project shall not preclude application to the Property of the taxes or assessments levied by any financing district in accordance with state law. Nothing in this Agreement shall be deemed to release Owner of the obligation to construct Public Improvements as required by this Agreement.
3.5.4 Project Construction Beyond 2027 EIR Buildout Year. The Parties agree and acknowledge that the EIR describes buildout of the Project by 2027 and that economic conditions or business factors, including without limitation, the timing of attracting tenants may influence the ability to complete construction of the Project by 2027. This Agreement in no way obligates Developer to commence or complete buildout of the Project by 2027. Therefore, with respect to any request for any discretionary Subsequent Development Approval which is subject to the final approval of the Director of Planning, the Director of Planning shall make an administrative determination as to whether the EIR together with any addendum thereto is sufficient for the issuance of the permit or approval or whether, as required by CEQA Section 21166 or CEQA Guidelines Sections 15162, 15163 and 15164, there have been substantial changes in the Project, circumstances or new information of substantial importance that would require additional environmental review. However, if Developer submits an application for a 1253
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discretionary Subsequent Development Approval that is subject to recommendation or approval of the Planning Commission and/or City Council, those bodies shall make all applicable determinations under CEQA.
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 City shall process and act on such application in accordance with Development Plan, except as otherwise provided by this Agreement including the Reservations of Authority.
3.6.1 Minor modifications to the Existing Development Approvals may be approved by the City Community Development Director and, if approved, 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 required by law, as determined in City’s reasonable discretion, a change to the Existing Development Approvals shall be deemed “minor” and may be approved by the Community Development Director provided such change does not:
(a) Alter the permitted uses of the Property; 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 structures in excess of 10% of the originally approved criteria; or, (d) Increase the number of lots or parcels of any tentative parcel or subdivision map; or
(e) Constitute a project requiring a subsequent or supplemental environmental impact report pursuant to Section 21166 of the Public Resources Code.
3.7 Regulation by Outside Agencies. It is acknowledged by the Parties that governmental agencies, quasi-public entities, and public utilities not within the control of City (“Outside Agencies” and each an “Outside Agency”) possess authority to regulate aspects of the development of the Property separately from or jointly with City and this Agreement does not limit the authority of such Outside Agencies. City shall use best efforts to cooperate with Owner in securing permits and approvals required from such Outside Agencies.
3.8 Public Works. If Owner is required by this Agreement to construct any public works facilities which will be dedicated to City or any Outside Agency (as defined below) 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 City or such Outside Agency if it would have undertaken such construction
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3.9 Provision of Real Property Interests by City. In any instance where Owner is required to construct any public improvement on land not owned by Owner, 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. In the event Owner is unable, after exercising reasonable efforts to acquire the real property interests necessary for the construction of such public improvements (“Offsite Interests”), and if so instructed by Owner and upon Owner’s provision of adequate security for costs City may reasonably incur, City shall negotiate to attempt to purchase the Offsite Interests in order to allow Owner to construct the public improvements as required by this Agreement. If City is unable to acquire the Offsite Interests through a voluntary transaction, City shall consider acquiring the Offsite Interests through using its power of eminent domain to acquire such required real property interests. Owner shall pay all reasonable costs associated with such acquisition or condemnation proceedings and shall enter into a land acquisition agreement with City in a form approved by the City Attorney. This Section 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 City upon the development of the Project under the Subdivision Map Act or other legal authority. If after using good faith efforts to acquire the Offsite Interests, Owner is unable to acquire the Offsite Interests, and City, in its reasonable discretion, refuses to use its power of eminent domain to acquire the Offsite Interests, City shall waive the requirement for Owner to acquire the Offsite Interests, or if development of the Project cannot proceed without acquisition of the Offsite Interests, the Parties shall meet and confer in good faith to attempt to devise alternatives to allow the Project to proceed without acquisition of the Offsite Interests.
3.10 City Covenants.
3.10.1 No Conflicting Land Use Regulations. City hereby represents and warrants to Owner that as of the Effective Date there are no rules, regulations, ordinances, or official policies of City that would materially interfere with development of the Project according to the Development Plan, provided the Southern Portion of the Property is annexed into the City.
3.10.2 Subdivision Map Extension and Other Development Approvals. As permitted by Section 66452.6 of the Government Code, each Subdivision Map, heretofore or hereafter approved in connection with development of the Property or the Project shall be extended and shall remain in effect for the term provided by the Subdivision Map Act or the term provided by this Agreement, whichever is longer. If Owner, in its sole and absolute discretion, chooses to process vesting tentative maps, City shall process such vesting maps in accordance with the Existing Land Use Regulations and the Subdivision Map Act, and any tentative map, either vesting or non-vesting, may be processed in phases. In addition, all other Development Approvals shall automatically be extended, without the need for filing extension applications, and shall remain in effect for the term provided by the Banning Municipal Code or the term provided by this Agreement, whichever is longer.
3.10.3 Additional Covenants. City agrees to take the following actions with respect to the development of the Project:
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(a) Consider and approve signage consistent with the Sign Program requirements.
(b) Construct the SLB Extension. The Parties shall use good faith efforts to enter into an Operating Memorandum as provided in Section 11.7 to confirm the specifications of the SLB Extension.
(c) Subject to the provisions of Section 5.9, construct the Substation and,
(d) Subject to the provision of Section 5.8.1, if the City determines to do so at a future date, any fire station.
3.10.4 Easements. City shall cooperate with Owner in connection with any arrangements for abandoning existing utility or other easements and facilities and the relocation thereof or creation of any new easements within the Property necessary or appropriate in connection with the development of the Project. If any such easement is owned by City or any governmental agency under the control of City, City shall subject to applicable state law, at the request of Owner take such action and execute such documents as may be necessary to abandon and/or relocate such easements as necessary or appropriate in connection with the development of the Project.
3.11 Retail Development Obligations. Owner shall obtain all necessary approvals including but not limited to building permits and commence construction as provided in the building permits of a minimum of One Hundred Thousand (100,000) square feet of Project commercial uses (“Retail Threshold”), within thirty six (36) months after the Effective Date (“Retail Date”). Thereafter, Owner shall diligently complete the One Hundred Thousand (100,000) square feet of Project commercial uses. Owner shall submit all required entitlement applications a minimum of six (6) months before the Retail Date. City and Owner shall process these entitlement applications promptly, using all reasonable good faith efforts. If Owner timely submits all required applications, the Parties may mutually agree upon extending the Retail Date in order to provide City with adequate time to process and consider approval of these entitlement applications. For the purposes of this section, “commercial uses” include any of the General Commercial uses authorized in the Specific Plan. If the Retail Threshold is not satisfied by the Retail Date, Owner shall pay the City Five Hundred Thousand Dollars ($500,000) thirty (30) days after the Retail Date, and an additional Five Hundred Thousand Dollars ($500,000) every six (6) months thereafter, if the Retail Threshold is not satisfied. Developer and City agree and acknowledge that the payments required hereunder are reasonable under the circumstances, that it would be extremely difficult or impossible to establish the damages that would be suffered by the City and the public by reason of Developer’s failure to meet the Retail Threshold and therefore the payments provided in this paragraph are a reasonable estimate of such damages (which are not punitive) and which shall be deemed liquidated damages under Civil Code Section 1671 and other applicable law. Owner shall submit for City review a retail recruitment and tenant outreach plan (with a focus on anchor tenants) (“Retail Plan”) within six (6) months of the Effective Date. The Retail Plan shall obligate Owner to recruit retail tenants. Owner shall regularly apprise City of Owner’s efforts to attract potential or actual anchor tenants. A minimum of two (2) 100,000 square 1256
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foot or larger retail commercial buildings (for single tenants) shall be constructed within the retail/commercial area of the Project.
3.12 Planning Area 2. Following a joint Planning Commission/City Council public hearing with respect to the Project held on May 8, 2025, and in order to provide an additional buffer to existing residences east of Sunset Avenue consistent with the Specific Plan, the City has requested and Owner acknowledges and agrees that no construction of any warehouses, or the commencement of any Industrial uses, shall occur in Planning Area 2 of the Specific Plan. Within one hundred twenty (120) days of the Effective Date, Owner shall submit all applications necessary to process a General Plan Amendment, Specific Plan Amendment and Zone Change for Planning Area 2, to General Commercial (GC) uses, as specified in the Specific Plan. The City and Owner acknowledge and agree that any change in the Specific Plan designation of Planning Area 2 cannot proceed, if at all, unless and until City undertakes and completes environmental review under CEQA, and the City issues all necessary permits and clearances to authorize GC uses in Planning Area 2. The City and Owner acknowledge and agree that the mere submission of a Specific Plan Amendment for Planning Area 2 does not commit the City to approve such an amendment or any other development applications submitted by Owner.
3.13 Planning Area 4 Buffer. Following a joint Planning Commission/City Council public hearing with respect to the Project held on May 8, 2025, and at the request of the City, in order to provide an additional buffer to existing residences south of Bobcat Road consistent with the Specific Plan, Owner hereby agrees that it shall create a buffer area of at least one hundred fifty (150) feet between the building footprint of any building built in Planning Area 4 of the Specific Plan which has frontage on Bobcat Road. Included in this buffer area will be a minimum of twenty (20) feet of landscaped area.
3.14 Modifications to the Project to Decrease Environmental Impacts. Based upon input from the City Council at its January 28, 2026, hearing on the Project, Owner has agreed to provide additional modifications to the Project as specified below. These modifications are depicted in Exhibit “G-1”.
3.14.1 Removal of Industrial Uses in Planning Area 7. Owner acknowledges and agrees that no construction of any warehouses, or the commencement of any Industrial (LI) uses, as specified in the Specific Plan, shall occur in Planning Area 7.
3.14.2 Removal of Trailer Storage Yard. Owner acknowledges and agrees that no construction or use of a trailer storage yard shall occur in Planning Area 8 of the Specific Plan.
3.14.3 Construction of a Truck Barrier System. Subject to approval of the City, Owner shall construct a truck barrier system on Sun Lakes Blvd. at the western boundary of the Property, to limit heavy truck access west of the Property along Sun Lakes Blvd. This truck barrier system is in addition to other Project improvements designed to prohibit heavy truck access west of the Property along Sun Lakes Blvd.
3.14.4 Modifications to the Improvement of Highland Home Road. Owner shall be required to and shall only construct improvements to Highland Home Road south of Sun Lakes Blvd. Owner shall not be obligated to construct improvements to Highland Home Road north of 1257
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Sun Lakes Blvd., except for the construction of an access road to allow Banning Electric Utility to access the contemplated substation, subject to the reasonable approval of the City and Banning Electric Utility and compliance with CEQA.
3.14.5 Modifications to the Improvements of Lincoln Avenue. Owner shall be required to and shall only construct improvements to Lincoln Avenue to the eastern edge of Smith Creek in Planning Area 6 of the Specific Plan.
3.14.6 Public Bypass Route to Access Retail Development in Planning Area 1. In order to reduce trips traveling easterly along Sun Lakes Blvd. to Sunset Avenue to access retail development in Planning Area 1, Owner shall make accommodations for and construct road improvements to allow public vehicular access from Sun Lakes Blvd. to Lincoln Avenue. The City and Owner acknowledge and agree that construction of this bypass cannot proceed, if at all, unless and until City complies with CEQA, and all necessary permits and clearances are obtained by Owner.
3.14.7 Prohibition of Cold Storage and Freestanding Travel Center Uses. In order to reduce environmental impacts, Owner agrees that the Project shall not include any cold storage uses or a freestanding travel center, similar to travel centers operated by Flying J, Buc-ee’s or Love’s.
4. ANNEXATION.
4.1 Contemplated LAFCO Action. The Parties recognize that the Property includes land that presently is outside of the City, generally comprised of the Southern Portion of the Property, that is in the City’s sphere of influence (“SOI”) and subject to annexation by LAFCO (“Annexation”). Owner will be the applicant with respect to the Annexation. The Parties recognize that the Development Agreement Law authorizes the City to enter into a development agreement with Owner for property that is within the City’s SOI. The Parties further agree and understand that prior to the contemplated Annexation, this Agreement shall function as a pre-annexation agreement with respect to the Southern Portion of the Property and bind the Parties as such.
4.2 Contemplated Action. Upon LAFCO approval of the Annexation, and the recordation of the Certificate of Completion, the Parties agree that the Agreement shall become operative on the Southern Portion of the Property.
4.3 Cooperation of City. The City agrees to support the Annexation and to use best efforts to achieve the prompt annexation of the Property within the SOI into the City.
4.4 Development of Annexed Property. The Parties agree that upon City approval of the Annexation by LAFCO, the rights of Owner to develop the Project upon the newly annexed portion of the Property in accordance with the Development Plan as set forth in this Agreement shall vest and become equivalent to the vested rights described above in Section 3.1 for the portions of the Property within the City jurisdictional boundaries as of the Effective Date. 1258
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5. PUBLIC BENEFITS, PUBLIC IMPROVEMENTS, AND DEVELOPMENT IMPACT FEES.
5.1 Intent. The Parties intend to provide consideration to the public to balance the private benefits conferred on Owner under this Agreement by requiring that Owner provide the Public Benefits described in this Section 5. The City has either previously approved or is in the process of considering various public improvements that may occur on or adjacent to the Property including the Sun Lakes Boulevard Extension, the Substation, a reverse osmosis facility and a potable water reservoir. Each of these public improvements has either undergone prior environmental (CEQA) review or is under consideration by the City or would, prior to construction, undergo applicable environmental (CEQA) review by the City and may proceed with or without development of the Project. Nonetheless, the Public Benefits include land conveyance and payments to be made to the City by Owner which land and payments may be utilized by the City for these and for other purposes to the extent described in this Agreement, in the event the City does not proceed with construction of such public improvements.
5.2 Public Benefit Fee. Owner shall pay the City a Public Benefit Fee (“Public Benefit Fee”) equal to the lesser of either Eight Million Dollars ($8,000,000) or One Dollar and Forty Four Cents ($1.44) per square foot of entitled warehouse/logistics/industrial building square footage.
Furthermore, the Public Benefit Fee shall be paid in installments subject to the following terms and conditions:
5.2.1 First Installment. In consideration for the City entering into this Agreement, Owner shall pay the first installment of the nonrefundable Public Benefit Fee of Three Million Dollars ($3,000,000) (First Installment”) by wire transfer in immediately available funds within sixty (60) days of the Effective Date without extension for any reason such as denial of the Annexation by LAFCO, a Development Limitation, force majeure, lawsuit challenging this Agreement or the Development Approvals or Tolling Period. In the event that such payment is not made within such sixty (60) days, this Agreement and the Development Approvals shall, without the necessity of notice or cure, terminate. However, the provisions providing for the City to retain the First Installment shall survive such termination. Notwithstanding anything to the contrary in this Agreement and the Development Approvals, they shall not be deemed to be vested rights of Owner until the First Installment is made. If Owner elects to terminate this Agreement and the Development Approvals as provided for in this Agreement, the rights under this Agreement and the Development Approvals shall be deemed not to be vested.. Upon Owner’s payment of the First Installment, the Existing Land Use Regulations shall revert to the Land Use Regulations in effect on the Effective Date.
5.2.2 Subsequent Installments. Following the issuance of occupancy permits for the first 694,444 square feet of warehouse/logistics/industrial buildings, Owner shall pay subsequent installments of the Public Benefit Fee upon issuance of occupancy permits for each warehouse/logistics/industrial building on a square-foot-by-square foot basis at the rate of One Dollar and Forty Four Cents ($1.44) per square foot (“Subsequent Installments”).
5.2.3 Sales Tax Credits. Owner may claim Sales Tax Revenues generated by the Industrial Property (as defined below) as a credit on a dollar-for-dollar basis toward future Subsequent Installments up to a maximum cumulative credit of Two Million Dollars ($2,000,000). 1259
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These credits shall be applied only on a going-forward basis for Sales Tax Revenues actually received by the City and are non-refundable.
5.3 Owner Required Public Improvements. Owner shall construct and install or fund the installation of the public improvements and infrastructure required in connection with the Project and listed on Exhibit “F” (“Public Improvements”) and/or required as conditions of approval to the Existing Development Approvals in conformance with standards set forth in the Development Plan. Subject to Section 3.5, Owner will make these Public Improvements in phases concurrent with the development of each building of each phase of the Project and in accordance with the Phasing Plan and the conditions of approval to the Existing Development Approvals. If development of the Project proceeds according to the Phasing Plan and the Development Plan, the Owner and City acknowledge and agree that no additional Public Improvements shall be required beyond what is found in in Exhibit “E-1,” Exhibit “F,” and the conditions of approval for the Existing Development. Owner shall have the right to construct any public facilities on behalf of the City and to obtain fee credits or reimbursements from the City as further described below to the extent that such Public Improvements are included in the City’s DIF Program.
5.4 Sun Lakes Boulevard Extension. It is the mutual intent of the Parties to provide for the completion of the SLB Extension as set forth in this Section 5.4 and with mutual acknowledgement of the facts set forth in this paragraph. Owner shall dedicate, or has dedicated, portions of the Property to the City to accommodate the construction and operation of the SLB Extension (“Public Maintenance and Access Easements”). Upon request of Owner, City shall promptly vacate via quitclaim deed portions of the Public Maintenance and Access Easement based upon the following conditions precedent: (i) access to the creek culvert crossings is maintained (this Access may be reconfigured to accommodate development and operation of the Project, as reasonably determined by the City Engineer); (ii) Owner has designated a private maintenance entity to either maintain cut slope and filled embankments, or has proposed and completed grading to eliminate cut slopes and filled embankments to accommodate the Project; (iii) Owner has maintained continued access to City-owned utility facilities. Access may be reconfigured to accommodate development and operation of the Project needs, as reasonably determined by the City Engineer.
5.5 Coordination Regarding Construction of Sun Lakes Boulevard Extension. In order to insure that construction or operation of the SLB Extension does not interfere with development or operation of the Project, Construction of the SLB Extension is under the control of the City and could be constructed by the City or by third parties designated by the City separate and apart from Owner’s Project, and Owner has a separate interest in completion of the SLB Extension to ensure access to Owner’s Project. City has entered into an Agreement for the Funding of Measure A Regional Arterial Improvements (“MARA Agreement”) with RCTC, pursuant to which the City is receiving a reimbursement grant for the SLB Extension’s design and construction costs and the City is obligated to complete the SLB Extension on or before August 31, 2027, or later if the parties to the MARA Agreement agree to one or more extensions of the date of completion (“SLB Extension Completion Date”). Additional regulatory approvals and other actions may be required to construct the SLB Extension, including approvals and actions necessary to address the Kinder Morgan pipeline that currently traverses the Property. Such approvals and actions may affect construction of the SLB Extension and cause delays beyond the control of either Party. Each Party 1260
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agrees to provide the other with regular updates regarding such approvals and actions and the status of the SLB Extension.
5.5.1 Accelerated DIF Payment. Within forty five (45) days after the City has obtained all permits to commence the construction of the SLB Extension or upon the Effective Date, whichever is later, Owner shall pay City Five Million One Hundred Thousand Dollars ($5,100,000) of the Project’s Transportation DIF obligation (“Accelerated Transportation DIF Payment”) to assist the City to in its design and construction of the SLB Extension. Until the SLB Extension is completed, the City shall only use the Accelerated Transportation DIF Payment to pay for design and construction costs of the SLB Extension.
5.5.2 Owner’s Contingency.
(a) No later than sixty (60) days before the SLB Extension Completion Date, City shall give Owner written notice whether the SLB Extension will be completed by the SLB Extension Completion Date, and if not, when the City estimates that the SLB Extension will be completed (“SLB Estimated Completion Date”).
(b) If the SLB Estimated Completion Date is greater than sixty (60) days after the SLB Extension Completion Date, then Owner may, in its sole discretion, prepare a plan (“Owner’s Plan”) specifying how Owner would complete the SLB Extension if given control over construction. Owner shall submit Owner’s Plan to the City for review and approval, with such approval not to be unreasonably withheld. The Owner’s Plan must specify (i) the actions needed to finish the SLB Extension; (ii) a schedule to complete the SLB Extension, providing a completion date for the SLB Extension at least sixty (60) days before the SLB Estimated Completion Date; (iii) the cost to complete the SLB Extension and (iv) the form and amount of financial security to be posted by Owner, in favor of the City, to insure that Owner finishes the SLB Extension. City shall review and either approve or deny Owner’s Plan no later than forty-five(45) days after submitted by Owner.
City shall neither unreasonably withhold its approval of Owner’s Plan nor deny approval of Owner’s Plan based solely upon delay incurred due to replacement of any existing contractor or consultant. If the City timely denies the Owner’s Plan, City shall notify Owner of this denial, and thereafter, the Parties shall enter into a thirty (30) day meet and confer process to attempt to reach agreement on all steps needed to complete the SLB Extension as quickly as possible. If City fails to either approve or deny the Owner’s Plan within forty-five (45) days, Owner’s Plan shall be deemed accepted by the City.
(c) City shall allow Owner to complete construction of the SLB Extension and Owner may, in its sole discretion, choose to complete the SLB Extension if: (i) completion of the SLB Extension is required by the conditions of approval in the Development Approvals and the City has not awarded a contract for construction of the SLB Extension on or before issuance of the first grading permit or six (6) months before the SLB Estimated Completion Date, whichever is sooner; (ii) the MARA Agreement is terminated before the SLB Extension is 1261
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completed; (iii) City has affirmatively approved the Owner's Plan; or the Owner's Plan has been deemed accepted; or (iv) through the aforementioned meet and confer process, the Parties have agreed that Owner can complete construction of the SLB Extension.
(d) If Owner chooses to complete the SLB Extension, as provided in the preceding paragraph, Owner shall promptly provide City with written notice of its choice and responsible for all design, permitting, and construction activities necessary to complete the SLB Extension. The following provisions shall also thereafter apply:
(i) Owner shall not begin any work on the SLB Extension unless and until it enters into an agreement with the City in a form deemed acceptable to the City Attorney to indemnify, defend, and hold the City and its elected officials, officers, contractors serving as City officials, agents, and employees harmless from liability for damage and/or claims for damage for personal injuries, including death, and claims for property damage, and with respect to all other actions and liabilities for damages caused or alleged to have been caused by reason of Owner's choice to complete the SLB Extension itself and/or construction of the SLB Extension, and which may arise from the direct or indirect operations of Owner or those of Owner's contractors, agents, tenants, employees, or any other persons acting on Owner's behalf, which relate to the SLB Extension (“City Losses”). This indemnity shall apply to all City Losses, as described above, regardless of whether or not the City affirmatively approved Owner’s Plan, except for City Losses arising from the sole negligence or willful misconduct of City.
This indemnity shall also survive the expiration or earlier termination of this Agreement, but shall also terminate one (1) year after City accepts Owner’s offer of dedication of the SLB Extension public improvements. (ii) Within forty-five (45) days of receipt of Owner’s written notice of its intention to complete the SLB Extension and City’s approval or deemed approval of Owner’s Plan, City shall refund to Owner any remaining unspent portion of the Accelerated Transportation DIF Payment.
The City agrees that Owner may pursue TUMF credits and reimbursements and DIF credits and reimbursement for all sums Owner expends in designing, permitting, and constructing the SLB Extension to the extent such sums are covered under the applicable DIF or TUMF study. Owner and City shall use good faith efforts to enter into a DIF Credit and Reimbursement Agreement, in substantially the same form as specified in Exhibit “G-2”. To the extent of any conflict between the terms of this Agreement and the DIF Credit and Reimbursement Agreement, this Agreement shall control. The Parties acknowledge and agree that the DIF Credit and Reimbursement Agreement shall address Owner’s construction of other Public Improvements which do not include the SLB Extension which otherwise would be funded by the City DIF program. Owner and City shall use good faith efforts to enter into an Improvement and 1262
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Credit/Reimbursement Agreement Transportation Uniform Mitigation Fee Program (“TUMF Agreement”) with respect to the SLB Extension in a form acceptable to and approved by the WRCOG.
(iii) Upon completion of the SLB Extension by Owner if it does so in accordance with this Agreement, Owner shall submit a final written account of the actual costs Owner incurred in completing the design, permitting and construction of the SLB Extension (“Owner’s Costs”) to City. City shall forty-five (45) days to review and approve or disapprove Owner’s Costs, which approval shall not be unreasonably withheld. Within thirty (30) days of the approval of the Owner’s Costs, the Parties shall calculate the total amount of estimated TUMF credits and DIF credits Owner is entitled to receive, provided that the final TUMF calculation shall be subject to the review and approval of WRCOG. City will use best efforts to assist Owner in obtaining TUMF credits from WRCOG. The amount of the DIF credits Owner shall be entitled to seek and receive as allowed by this Agreement shall include the portion of the Accelerated Transportation DIF Payment that was not refunded to Owner as described above. “Owner’s Offset” is defined herein as the actual amount of TUMF credits and DIF credits received by Owner. If Owner’s Costs exceed Owner’s Offset (“Owner’s Deficit”), Owner shall be entitled to seek TUMF reimbursements (subject to WRCOG approval) and/or DIF reimbursements to recover the Owner’s Deficit to the extent there remains any difference between the maximum cost included in each of the TUMF and DIF nexus studies and TUMF or DIF funds already spent on the SLB Extension. The City, in its sole and absolute discretion, shall determine which source of reimbursement shall be used based on the applicable nexus studies. Each Fiscal Year, City shall make the forgoing reimbursement payments to Owner to satisfy, or partially satisfy the Owner’s Deficit, with such payments to be received solely through TUMF reimbursement, DIF reimbursement provided that Owner does not recover more than Owner’s Deficit. Notwithstanding anything to the contrary in this Agreement, the City shall have no obligation to reimburse Developer from its general fund or other sources except from applicable DIF or TUMF as provided above, but City, in its sole and absolute discretion, may choose to reimburse Developer from other sources aside from DIF or TUMF funds.
5.6 Sunset Avenue Improvements. As specified in Exhibit “F”, Owner or third parties shall construct and install or fund the construction of improvements to Sunset Avenue (“Sunset Avenue Improvements”). Owner’s construction and installation or its funding of the Sunset Avenue Improvements, if undertaken by Owner, shall occur as specified in the Initial Phasing Plan, as defined in Section 3.5.2, which may be amended in the future as provided in Section 3.5.2.
Pursuant to the DIF Credit and Reimbursement Agreement attached hereto as Exhibit G-2, Owner shall be entitled to receive a partial DIF credit if Owner constructs or funds the construction of the Sunset Avenue Improvements to the extent such improvements are included in the City’s DIF program and nexus study. In the event that Owner constructs any Sunset Avenue Improvements that are not included in the City’s DIF program (“Non-DIF Sunset Improvements”), City agrees to 1263
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use good faith efforts at such time as it has the legal authority to do so to (i) impose a fair share payment condition of approval onto any third party developer’s project which would benefit from the construction of the Non-DIF Sunset Improvements to the extent of their fair share (“Third Party Fair Share Payments”); and (ii) collect all Third Party Fair Share Payments. Regarding the Rancho San Gorgonio project Owner and City agree that this project’s entitlements contain conditions of approval that obligate this developer to install portions of the Sunset Avenue Improvements. City shall use good faith efforts to enforce these entitlements’ conditions of approval regarding this developer’s required Sunset Avenue Improvements, and shall use good faith efforts to collect this developer’s Third Party Fair Share Payments to the extent it has the legal authority to do so. City shall distribute all Third Party Fair Share Payments to Owner within thirty (30) days of City’s receipt of such payments provided that Owner has provided City with current up to date payment information upon request. However, City shall have no obligation to incur any legal fees to collect Third Party Fair Share Payments except to the extent such legal fees are advanced by Owner. For the sake of clarity, City shall have no liability to Owner to pay Third Party Fair Share Payments to Owner except to the extent that it receives Third Party Fair Share Payments from a third-party developer. If third parties construct Sunset Avenue Improvements not included in the City’s DIF program, Owner shall pay its fair share of such facilities to the City within thirty (30) days of receiving written notice from the City to make such payment.
5.7 Payment of “Fair Share” Share of Certain Roadway Improvements. To help facilitate the City’s achievement of its goals and policies with respect to roadway improvements, Owner agrees to pay its proportional or Fair Share (as defined in Section 5.12.2) of the roadway improvements listed on Exhibit “I”. The Fair Share payments shall become due at the times specified on Exhibit “I”; or if there is no time specified in Exhibit “I”, at such time as reasonably required by the City; or as otherwise established in conditions of approval for Subsequent Development Approvals, if any.
5.8 Land Reservation, Conveyance, and Dedication.
5.8.1 Owner shall reserve a portion of the Property suitable for construction of a fire station by the City or County (“Fire Station Property”). The Parties have already tentatively approved the location of the Fire Station Property on portions of parcels 4 and 34 of Tentative Parcel Map No. 38118. The Parties agree to work cooperatively and in good faith to identify a suitable final location of the Fire Station Property no later than one (1) year after the Effective Date. The Parties agree that the Fire Station Property must be at least two and one half (2 ½) acres and not greater than three (3) acres in size. Owner shall reserve and dedicate the Fire Station Property to the City at no cost to the City no later than three (3) years from the Effective Date.
After the City acquires the Fire Station Property, City or County shall not use the Fire Station Property for any use other than a fire station, a reverse osmosis facility, or both. Regardless of whether the City elects to develop a fire station, Owner has agreed to make the Fire Station Payment in accordance with Section 5.10.4. Under no circumstances shall Owner be obligated to pay any sums for the construction of the fire station over and above the Fire Station Payment.
5.8.2 Owner shall reserve a portion of the Property suitable for construction of a water tank (“Water Tank Property”). The Parties have already tentatively approved the location of the Water Tank Property on portions of parcels 4 and 34 of Tentative Parcel Map No. 38118. The Parties agree to work cooperatively and in good faith to identify the final location of the Water 1264
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Tank Property no later than one (1) year after the Effective Date. The Parties agree that the Water Tank Property must be no greater than two (2) acres in size. Owner shall reserve and dedicate the Water Tank Property to the City at no cost to the City, no later than three (3) years from the Effective Date. After acquiring the Water Tank Property, City or its successors shall not use the Water Tank Property for any use other than a water tank. Under no circumstances shall Owner be obligated to pay for the construction of the water tank and related uses.
5.8.3 Owner shall reserve a portion of the Property for a Banning Electric Utility Substation (“Electrical Property”). The Parties have tentatively approved the location of the Electrical Property, on Tentative Parcel Map No. 38118. The Parties agree to work cooperatively and in good faith to identify a suitable final location of the Electrical Property no later than one (1) year after the Effective Date. Owner shall reserve and dedicate the Electrical Property to the City at no cost to the City no later than three (3) years from the Effective Date. After acquiring the Electrical Property, City or Banning Electric Utility shall not use the Electrical Property for any use other than a utility substation and related uses
5.8.4 Owner shall reserve a portion of the Property suitable for construction of a reverse osmosis facility (“RO Property”). The Parties have already tentatively approved the location of the RO Property on portions of parcels 10, 31 and 33 of Tentative Parcel Map No. 38118. The Parties agree to work cooperatively and in good faith to identify a suitable final location for the RO Property no later than one (1) year after the Effective Date. The Parties agree that the RO Property must be no greater than two (2) acres in size. Owner shall reserve and dedicate the RO Property to the City at no cost to the City, no later than three (3) years from the Effective Date. After acquiring the RO Property, City or its successors shall not use the RO Property for any use other than for an RO facility and related uses. Under no circumstances shall Owner be obligated to pay for the construction of the reverse osmosis facility.
5.9 Electrical Substation.
5.9.1 Owner shall contribute Five Hundred Thousand Dollars ($500,000) for the design and environmental review of an electrical Substation, (“Banning Electric Initial Contribution”). Upon receipt of the Banning Electric Initial Contribution, City shall promptly commence the design and environmental review of the Substation, as defined below. The City and Owner acknowledge and agree that construction of the Substation cannot proceed, if at all, unless and until City undertakes and completes environmental review under CEQA, and the City obtains all necessary permits and clearances to construct the Substation. The City’s obtaining all necessary environmental clearances, permits and other clearances are, collectively (“Substation Clearances”). The entering into of this Agreement by the Parties does not commit the City to construct the Substation, but rather this Agreement establishes the framework and the procedure for the City to construct the Substation, if the City ultimately determines, in its sole discretion, to commence the design, permitting process and construction of the Substation. The Substation shall be designed and constructed to provide at least 40 Mega Volt Amperes (“Substation”). The Parties acknowledge and agree that the estimated cost to design, permit and construct the Substation (“Substation Costs”) is Twelve Million Five Hundred Thousand Dollars ($12,500,000). City shall design and construct the Substation and obtain all necessary governmental and private party approvals. The design, components, and schedule to construct and complete the Substation shall be based upon an Engineer’s Estimate, discussed below. The City shall complete the Engineer’s 1265
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Estimate within ninety (90) days after City completes the design of the Substation. Owner shall pay the Banning Electric Initial Contribution ninety (90) days after the Effective Date. If the City chooses, in its sole discretion, to not design or construct the Substation, City shall refund the Banning Electric Initial Contribution within thirty (30) days after City notifies Owner of its decision to not design and construct the Substation. Upon request of Owner, City shall provide Owner with documentation demonstrating that the Banning Electric Initial Contribution has only been used for design and environmental review of the Substation. Any portion of the Banning Electric Initial Contribution not used for design and environmental review retained by City shall result in a reduction in the amount of the Banning Electric Final Contribution, defined below, unless City chooses to not design and construct the Substation.
5.9.2 Upon the City’s obtaining the Substation Clearances, Owner shall further contribute to the completion of the Substation, by making the Banning Electric Final Contribution in the amount of Nine Million Five Hundred Thousand Dollars ($9,500,000) as specified in Section
5.9.3(a). The City shall make an in-kind contribution valued at approximately Two Million, Five Hundred Thousand Dollars ($2,500,000) consisting of City staff time, labor, materials and equipment, which may include, but not limited to: two (2), twenty (20) MVA transformers. The Engineer’s Estimate shall: (i) be based upon substantial objective evidence (ii) accurately specify the Substation Costs, which shall not exceed Twelve Million Five Hundred Thousand Dollars ($12,500,000) unless City provides Owner the information required by Section 5.9.3; and (iii) establish a schedule concerning the construction and completion of the Substation. The City shall share the Engineer’s Estimate with Owner, for Owner’s reasonable approval, which shall not be unreasonably withheld or conditioned. Owner shall have sixty (60) days from receipt of the Engineer’s Estimate to review it, after which time Owner shall be deemed to have approved the Engineer’s Estimate unless Owner has presented written objections to the City.
5.9.3 Owner’s obligation to fund the Substation Costs shall not exceed the amount of the Banning Electric Initial Contribution and an additional Nine Million Five Hundred Thousand Dollars ($9,500,000) (“Banning Electric Final Contribution”) plus the Banning Electric Initial Contribution of Five Hundred Thousand Dollars ($500,000.00) for a grant total of Ten Million Dollars ($10,000,000.00) (“Total Electric Contribution”). Within thirty (30) days after City has obtained the Substation Clearances (“Substation Funding Date”), Owner shall deposit One Million Five Hundred Thousand Dollars ($1,500,000) into an escrow account or funds control, with the escrow holder to be mutually selected by the Parties. In addition, on or before the Substation Funding Date, Owner shall deposit in the escrow account, Eight Million Dollars ($8,000,000), or provide security in the form of a bond or letter of credit in favor of the City, in the amount of Eight Million Dollars ($8,000,000), or a combination of bonds, letters of credit and cash. Owner, in its sole and absolute discretion, shall determine the form of such security to be provided. Regardless of the amount of the Engineer’s Estimate, in no event shall Owner be required to contribute any funding in excess of the Banning Electric Initial Contribution and the Banning Electric Final Contribution. If the Engineer’s Estimate exceeds Twelve Million Five Hundred Thousand Dollars ($12,500,000), the City shall provide written documentation (“Substation Excess Cost Documentation”) to Owner demonstrating how the City intends to pay all costs in excess of Twelve Million Five Hundred Thousand Dollars ($12,500,000) (“City Substation Payment”). Prior to Owner’s payment of the Banning Electric Final Contribution, City shall provide the Substation Cost Documentation to Owner, for Owner’s approval, which approval shall not be unreasonably withheld or conditioned. Owner shall either approve or deny the 1266
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Substation Cost Documentation sixty (60) days after it is received. If Owner denies the Substation Cost Documentation it shall specify in writing to City the specific reasons for so denying the Substation Cost Documentation and shall negotiate reasonably and in good faith a resolution of the issue with City within ten (10) days thereafter. If Owner fails to provide written approval or denial of the Substation Cost Documentation within this sixty (60) day period, then Owner shall be deemed to have approved the Substation Excess Cost Documentation. (a) After Owner’s provision of the Banning Electric Final Contribution, the City shall promptly take all necessary steps in order for construction of the Substation to commence. Prior to commencing construction, City shall provide documentation to Owner, demonstrating that the construction contract for the Substation Costs is consistent with the amount specified in the Engineer’s Estimate or the lowest responsive and responsible bid received in accordance with applicable public bidding laws (“Low Bid”), and the schedule established by the Engineer’s Estimate. Upon receipt of this documentation from City, Owner shall deposit into an escrow account, as provided below, all necessary documents to convey the Electrical Property to the City (“Conveyance Documents”). City shall notify Owner, in writing, when the construction contract for the Substation has been awarded. Upon receipt of this written notice from City, Owner shall immediately authorize the escrow holder to release the Conveyance Documents, and will insure that the Conveyance Documents are recorded in the official records of the County Recorder. Upon commencement of construction, the following process shall be followed to fund the construction of the Substation, which shall continue until construction of the Substation is completed: (i) Upon City’s receipt of invoices from the contractor retained to construct the Substation, City shall present such invoices to Owner; (ii) If such invoices comport with information in the Engineer’s Estimate or the Low Bid, within thirty (30) days of receipt of such invoices, Owner shall authorize payment of the invoices from the cash deposited in the escrow or funds control, and after such authorization is issued, City shall use the proceeds to pay such invoices or reimburse itself if it previously paid the invoice from its own funds; (iii) Within thirty (30) days after the cash is withdrawn from the escrow, Owner shall deposit into the escrow the same amount of cash which was withdrawn from the escrow, and shall continue to do so, upon the City’s submission of invoices to Owner, until Owner has deposited into escrow the entire amount of the Banning Electric Final Contribution; and (iv) Within thirty (30) days after the cash is withdrawn from the escrow, City shall authorize a reduction in the amount of security posted by Owner, in the same amount as the amount of cash withdrawn from the escrow. Owner shall have the ability to enter the Electrical Property while construction of the Substation is ongoing, to determine the progress and timing of the construction. If the cost of the Low Bid exceeds the amount of the Engineer’s Estimate, or of the cost of construction exceeds the Banning Electric Final Contribution for any reason, including due to change orders, the obligation of Owner to pay the Banning Electric Final Contribution shall not terminate or abate, but the City shall be obligated to fund any such additional amount to complete the Substation.
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(b) Due to Owner’s payment of the Total Electric Contribution and City’s adoption of the Electric Facilities DIF, the Parties acknowledge and agree that Owner shall receive Electric Facilities DIF credits in the amount of the Project’s entire Electric Facilities DIF obligation (“Electric DIF Obligation”), and Owner shall not be obligated to pay the Electric Facilities DIF. Upon completion of the Substation, Owner will be entitled to reimbursement from the City for the difference between the sum of its Banning Electric Initial Contribution and its Banning Electric Final Contribution, on the one hand, and the Electric DIF Obligation, on the other hand (“Substation Reimbursement”). Owner shall begin to receive the Substation Reimbursement in the first Fiscal Year after the City issues a Notice of Completion of the Substation. The Substation Reimbursement shall be paid to the Owner (i) solely through cash payments from the City in equal annual installments over a term of ten (10) years, or more quickly, in the sole and absolute discretion of the City; or (ii) third party developers to the extent actually paid, or a combination thereof, with the City, in its sole discretion, to determine which payment sources are to be used to pay the Substation Reimbursement. The City shall use good faith efforts to expedite the payment of the Substation Reimbursement as quickly as reasonably possible. City shall reserve electrical power capacity equal to the Substation Fair Share Percentage to service the Project so long as the Owner has paid the full amount of the Banning Electric Final Contribution and development of the Project remains in substantial compliance with the Project Initial Phasing Plan set forth in Exhibit “E-1”. Except as otherwise provided in this Section 5.9.3, the City shall have no obligation to pay or reimburse Owner for any portion of the cost of the Substation Costs.
5.10 Additional Public Benefits. Owner shall provide the following additional Public Benefits:
5.10.1 Maintenance of Private Roads. Owner shall maintain all private roads and sidewalks and landscape areas within and fronting the public right-of-way on the Property in accordance with the requirements of the Specific Plan and any conditions of approval.
5.10.2 Open Space Dedication. At no cost to City and without reimbursement or credit to any DIF, Owner will set aside and grant to City an irrevocable offer to dedicate to the City, approximately 52.8 acres as Open Space Resource land. Notwithstanding the foregoing, Owner may be able to receive reimbursement or MSHCP impact fee credits from the Regional Conservation Agency (“RCA”) if RCA determines that Owner is entitled to MSHCP impact fee credits or reimbursement. Subject to approval from RCA, City shall have sole and absolute discretion whether to accept such dedication. The Parties acknowledge and agree that the acreage of the dedicated Open Space Resource land may be reduced, based upon required mitigation which may be imposed on development of the Project by other public agencies, such as the U. S. Fish & Wildlife Service, U. S. Army Corps of Engineers, California Department of Fish & Wildlife or the Western Riverside Regional Conservation Authority (collectively, “Resource Agencies”). In addition, the Parties acknowledge and agree that the Resource Agencies may limit use of the Open Space Resource land, and the Parties agree that they will both abide by any and all applicable restrictions which may be imposed by the Resource Agencies. However, if habitat restoration, habitat mitigation and monitoring plan, endowment agreement or other similar obligations are 1268
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required by the Resource Agencies solely in connection with development of the Project, the same shall be the sole obligation of the Owner.
5.10.3 Park Dedication. Owner shall reserve and dedicate to City, at no cost to City and without reimbursement or credit to any DIF, approximately 12 acres for the Park. Owner shall be responsible for the design and the cost of constructing the Specific Plan Park Facilities. Owner shall be responsible, at its sole cost, to maintain the Park, and City shall use best efforts to assist Owner in its efforts to obtain grants or tax benefits in connection with Owner’s reservation of the Park. Owner shall be responsible for maintaining the Park upon completion. City agrees that Owner shall receive parks and recreation development impact fee credits, if the Specific Plan Park Facilities meet the applicable criteria of the parks and recreation development impact fee program, on a dollar-for-dollar basis for all Owner’s costs incurred for designing and constructing the Specific Plan Park Facilities. Prior to receiving such development impact fee credits, the City shall require that Owner provide proof in the form of paid invoices or receipts for the incurred costs to insure all such costs were actually incurred. If the City chooses to expand the Specific Plan Park Facilities after the effective date to include facilities not previously included in the Specific Plan (“Additional Park Facilities”), City shall provide written notification to Owner no later than City’s approval of Owner’s Specific Plan Park Facilities plans, and the Parties shall meet and confer and use good faith efforts to enter into a Park improvement plan, addressing the Additional Park Facilities that will address an appropriate apportionment of the costs to design and construct the Additional Park Facilities.
5.10.4 Fire Station Payment. Owner shall contribute Sixteen Million Dollars ($16,000,000) (“Fire Station Payment”) to the City to be used for construction of the fire station.
Owner shall pay the City Two Million Five Hundred Thousand Dollars ($2,500,000) of the Fire Station Payment within six (6) months of the Effective Date. Owner shall pay the City the remainder of the Fire Station Payment within sixty (60) days after City obtains all necessary approvals to commence construction of the fire station. Owner acknowledges that neither the City nor the Riverside County Fire Department has considered or identified a need for a fire station at the Property, there is no current plan for development of a fire station and, if desired, the planning, design, and construction of any fire station would occur at an undetermined future date by the City.
Construction of a fire station cannot proceed, if at all, unless and until City undertakes and completes environmental review under CEQA, and the City obtains all necessary permits and clearances to construct the fire station. If the City determines in its sole and absolute discretion to not construct the fire station, then the City may use the proceeds of the Fire Station Payment for any City purpose. In such a situation, City shall provide written notification to Owner of its determination not to build the fire station within one (1) year of the Effective Date. If such notification is received, Owner shall make the Fire Station Payment based upon the following schedule: (i) One Million Dollars ($1,000,000) prior to issuance of occupancy permits for Five Hundred Thousand (500,000) square feet of warehouse building(s); (ii) Three Million Dollars ($3,000,000) prior to issuance of occupancy permits for One Million (1,000,000) square feet of warehouse building(s); (iii) Three Million Dollars ($3,000,000) prior to issuance of occupancy permits for Two Million (2,000,000) square feet of warehouse building(s); (iii) Three Million Dollars ($3,000,000) prior to issuance of occupancy permits for Three Million (3,000,000) square feet of warehouse building(s) and (iv) Three Million Five Hundred Thousand Dollars ($3,500,000) prior to issuance of occupancy permits for Three Million Five Hundred Thousand (3,500,000) square feet of warehouse building(s). Notwithstanding the forgoing the entire amount of the Fire 1269
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Station Payment by Owner to City shall be made no later than five (5) years from the Effective Date. The amount of the Fire Station Payment shall be subject to an “Annual Escalation Factor” on each anniversary of the Effective Date during the term of this Agreement equal to the annual percentage change in the Consumer Price Index published by the U.S. Bureau of Labor Statistics for “All Urban Consumers” in the Riverside-San Bernardino-Ontario Area, measured as of the month of April in the previous Fiscal Year, but not less than one percent (1%) and not greater than five percent (5%).
5.10.5 Fire Equipment Payment. Owner shall contribute One Million Dollars ($1,000,000) (“Fire Equipment Payment”) to the City for the City to use to acquire fire equipment for the fire station. Owner shall make this payment within one hundred eighty (180) days from when the City obtains all necessary approvals to construct the fire station. As specified in Section
5.10.4, if City determines to not use the proceeds of the Fire Station Payment to construct the fire station, then the City may use the proceeds of the Fire Equipment Payment for any City purpose.
In such a situation, Owner shall make the Fire Equipment Payment to the City prior to issuance of occupancy permits for Four Million (4,000,000) square feet of warehouse building(s).
Notwithstanding the forgoing the entire amount of the Fire Equipment Payment shall be made by Owner to City no later than five (5) years from the Effective Date.
5.10.6 City Grant. Owner shall provide City with a grant of Seven Hundred Fifty Thousand Dollars ($750,000) (“City Grant”), with the proceeds solely to be used by the City to aid in City downtown beautification or small business assistance for small businesses located in the City. The City Grant is to be disbursed in three (3) equal payments of Two Hundred Fifty Thousand Dollars ($250,000): (i) within sixty (60) days of the Effective Date; (ii) within twelve (12) months of the Effective Date; and (iii) within twenty four (24) months of the Effective Date.
5.10.7 Employment Outreach. Owner shall include in all leases for the Project the requirement that each tenant provide the City with written notice that each tenant is intending to hire employees for its business, with such notice issued at least two (2) weeks before each tenant intends to commence its operations. City shall provide notice to City residents of these commencements of operations.
5.10.8 Animal Shelter Grant. Owner shall provide City with a grant of Five Hundred Thousand Dollars ($500,000), with the proceeds solely to be used to build or operate an animal shelter. This payment shall be made to City prior to issuance of first grading permit of an industrial building.
5.11 Development Fees. Development Fees currently imposed are identified in City Resolution 2019-112 adopted by the City Council on September 10, 2019. Development Fees or “DIF” also includes TUMF and MSHCP. A schedule showing the Development Fees in place as of the Effective Date as Exhibit “H” only for the specific uses therein identified. The City shall not impose any future mitigation measure, exaction or Development Fee on the Property, the Project or the Development Plan (unless modifications to the Project necessitate such future mitigation measures, exactions or Development Fees, which are reasonably related and roughly proportional to the impacts associated with modifications to the Project) or any portion thereof, except those existing Development Fees in existence on the Effective Date of this Agreement as they may be amended and increased from time to time and for different improvements and/or uses 1270
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as Owner may later develop and for new categories as provided in this paragraph. Further, except as otherwise provided herein the City shall not impose any new categories of Development Fees to the Project (“DIF Vesting”). Notwithstanding the foregoing, the DIF Vesting shall terminate on the seventh (7th) anniversary of the Effective Date (“DIF Vesting End Date”). After the DIF Vesting End Date, the City may apply subsequently adopted new categories of DIF to the Project, the Property and the Development Plan if the same are applied uniformly to development either (i) throughout the City or (ii) within a defined area of benefit that includes the Property if the subsequently adopted DIF is not applied on an ad hoc basis solely to the Project and the subsequently adopted fee does not physically prevent development of the Property for the uses and to the density and intensity of development set forth in this Agreement and the Development Approvals. Notwithstanding the forgoing, it is understood and agreed that when the Owner applies for permits or entitlements under the Development Plan the more detailed plans submitted in connection with the same may disclose the need for easements, dedications or rights of way for Public Improvements serving the Project not previously foreseeable and the Developer shall cooperate in good faith with City to grant such rights to City at no cost to City.
5.12 Fair Share Payments; Oversized Improvements; Fee Credits.
5.12.1 Construction of Oversized Public Improvements. The Parties acknowledge that certain of the Public Improvements, to be constructed by Owner may, to a greater or lesser extent, constitute Oversized Improvements and that owners of other properties may benefit from such Oversized Improvements. In addition, the City agrees that, in recognition of the regional nature of certain street and, possibly, other improvements made to the Property by Owner, City shall use good faith efforts so that owners of all property that will reasonably benefit from the Improvements including Oversized Improvements and certain components of the Sunset Avenue Improvements as determined in accordance herewith (“Benefitted Properties”) or otherwise benefitted by the regional Improvements who apply for entitlements will pay their Fair Share for such Public Improvements, either directly or through subdivision agreements or other agreements, between such owners and the City, or between owners of Benefitted Properties.. The DIF Credit and Reimbursement Agreement shall include the obligations specified in this Section and elsewhere in this Agreement.
5.12.2 Fair Share Determination. “Fair Share” shall mean the amount if any, of Owner’s contribution to the cost of any Public Improvements and unless otherwise provided on Exhibit “I” or elsewhere in this Agreement with respect to a particular improvement, shall be calculated for the Project based on the Project’s proportion of the benefit conferred on all Benefitted Properties, as established by a regional benefit study prepared by independent professional consultants experienced in the preparation of “zone of benefit” studies. The consultants shall be selected by City, and their conclusions shall be subject to review and approval by City. City shall afford Owner, and any other involved developer(s), the opportunity to review and comment on the tentative conclusions, and such comments shall be taken into consideration by City in its review. The costs of any such study shall be deemed to be a part of the cost of the Oversized Facility to which it pertains. The fees and costs of the consultants shall be solely paid, initially, by the developers seeking entitlements and then involved. The Parties recognize, however, that it will not always be possible to implement or achieve such goals, given the size, timing of development and nature of the other Benefitted Properties, and nothing herein shall be deemed to require City to fund or reimburse any portion of the excess costs other than from funds 1271
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actually collected from third party developers expressly for such purpose. For the sake of clarity, the City shall not be responsible to pay for the cost of any such improvements or any portions thereof out of any fund not specifically set aside for such purpose including but not limited to its general fund or special fund revenues.
5.12.3 Fee Credits. To the extent an improvement is included in City’s current Nexus Study that is a component of City’s DIF program, the City shall recognize and apply in lieu credit against the fees associated with the specific Nexus Study, equal to the actual documented cost of improvements and/or dedications made in the development of the Project by Owner, even if improvement was funded by a CFD or other alternative financing mechanism, and for which the fees would otherwise be imposed in accordance with City ordinances and resolutions; provided, however, that such in lieu credit shall not exceed the amount established by the City’s DIF program for construction of such improvements and/or dedications. These in lieu fee credits shall be further defined within the DIF Credit and Reimbursement Agreement. For the sake of clarity, it is understood and agreed by Owner that credits to TUMF and MSHCP development impact fees shall be subject to the rules of the Western Riverside Regional Council of Governments (“WRCOG”) and Western Riverside Regional Conservation Agency rules concerning fee credits as administered by those agencies. This paragraph shall apply to all DIF credits sought by Owner under this Agreement.
5.13 Limits on Public Funds. Notwithstanding anything else to the contrary herein, the parties acknowledge and agree that in no event shall the cumulative total of public funds, if any, as defined in California Labor Code Section 1720(b), received by Owner with respect to the Project exceed the amount of the conditioned public improvements imposed on the Project as part of the Development Approvals.
6. FINANCING OF PUBLIC IMPROVEMENTS.
6.1 Intent. The intent of this Section 6 is to establish the contractual framework for mutual cooperation between the City and Owner necessary to finance and implement the Project.
Accordingly, the City shall take all actions reasonably necessary, and Owner shall take all actions reasonably necessary and shall reasonably cooperate, as appropriate, in furtherance of the development and operation of the Project.
6.2 Formation of Community Facilities Districts.
6.2.1 Owner agrees to submit a petition(s) to the City and or California Statewide Communities Development Authority (“CSCDA”) under the Mello Roos Act for formation of one or two CFDs over some or all of the Owner’s Property. Owner has the sole and absolute discretion to determine if it will proceed with one CFD or two CFDs to finance eligible facilities and TUMF and DIF payments defined herein as Authorized Facilities and Fees, and Authorized Services (as defined below). If the City is the sponsor of the CFD, the City shall initiate formation of the CFD(s) promptly following submission by Owner of any such petition and compliance with section 53318(d) of the Mello-Roos Act. City agrees to cooperate in the formation of the CFD should the Owner elect CSCDA to be the sponsor of the CFD(s). Owner agrees to vote in favor of the formation of the CFD(s) for which it has petitioned. The CFD shall also be authorized to finance City services provided to only the parcels within the boundaries of the CFD, provided such services 1272
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are authorized under the Mello Roos Act and to the extent that the services do not supplant services already available within the territory of the CFD at the time the CFD is created (“Authorized Services”).
6.2.2 The Rate and Method of Apportionment of Special Taxes for the CFD (“RMA”) shall provide, in part:
(a) Special taxes shall be levied to finance Authorized Facilities and Fees, should the Owner, in its sole and absolute discretion, decide to form the CFD to finance any such Authorized Facilities and Fees, which decision shall remain subject to the approval of the City;
(b) Special taxes for Authorized Services (“Service Special Tax”) shall only be levied against parcels used for industrial/warehouse/logistic purposes (collectively, “Industrial Property”) and the levy of the Service Special Tax shall commence upon the issuance of a certificate of occupancy prior to May 1 for an Industrial Property;
(c) The maximum Service Special Tax rate in the first year that there is a levy of the Service Special Tax for an Industrial Property parcel shall be at a rate of $0.20 per building square foot, not including space devoted to stairwells, public restrooms, vehicle parking and areas incident thereto, and mechanical equipment incidental to the operation of any such building, which amount shall be subject to an “Annual Escalation Factor” equal to the annual percentage change in the Consumer Price Index published by the U.S. Bureau of Labor Statistics for “All Urban Consumers” in the Riverside-San Bernardino-Ontario Area, measured as of the month of April in the previous Fiscal Year, but not less than one percent (1%) and not greater than five percent (5%);
(d) The CFD for Authorized Services shall be formed prior to the City’s issuance of a final certificate of occupancy for the first Industrial Property; and (e) A budgeting process that includes that each Fiscal Year the Service Special Taxes for each parcel shall be reduced by 100% of the aggregated amount of Sales Tax Revenues generated by the Industrial Property within the boundaries of the CFD and collected by the City in the preceding Fiscal Year on a pro rata basis based on taxable building square footage for each parcel.
6.2.3 Owner and the City shall cooperate reasonably in developing the RMA(s).
Promptly following Owner’s request to have CFD Bonds issued, Owner and the City shall meet with the City’s public financing consultants to determine reasonable and appropriate issuance dates, amounts, and main financing terms. Contemporaneously with the formation of the CFD, Owner and the City shall enter into a CFD Acquisition and Reimbursement Agreement that shall apply to the acquisition and construction and/or reimbursement of Authorized Facilities and Fees.
6.2.4 In the event Owner conveys any portion of the Property to City or any Outside Agencies and said Property (or part thereof) is subject to payment of special taxes for Authorized Facilities and Fees and CFD Bonds have been issued and are outstanding, Owner shall 1273
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prepay the special taxes pursuant to the terms of the RMA with respect to the portion of the Property being conveyed prior to completion of any such conveyance.
6.2.5 Except to the extent permitted by this Section 6 or otherwise approved by Owner, the City shall not initiate the formation of any other land-secured financing district or assessment district involving the levy of special taxes or assessments for facilities or services with regards to the Property.
6.3 City Council Approval. Notwithstanding the foregoing, it is acknowledged and agreed by the Parties that nothing contained in this Section 6 shall be construed as committing or requiring the City Council to authorize and approve the formation of the CFD, or to issue and sell CFD Bonds.
6.4 City’s Reimbursement to Owner. Owner shall be entitled to reimbursement from the City for: (i) an Owner’s Deficit, if such a deficit occurs, as provided in Section 5.5.2(d)(iii), and (ii) the Substation Reimbursement, as provided in Section 5.9.3(b) (collectively, “Maximum Reimbursement Payment”).
7. REVIEW FOR COMPLIANCE.
7.1 Annual Review. The Community Development Director, in consultation with the City Manager and City Attorney, shall review this Agreement annually, on or before the September 15th of each year commencing on the September 15th at least six months after the Effective Date, in order to ascertain the good faith compliance by Owner with the terms of the Agreement. This review shall be limited in scope to compliance with the terms of this Agreement pursuant to Government Code Section 65865.1 and the Banning Municipal Code, in effect on the Effective Date. On or before July 1st of each year, Owner shall submit an annual monitoring report, in a form specified by the Community Development Director, providing all information necessary to evaluate such good faith compliance as determined by the Community Development Director.
7.2 Procedure.
7.2.1 During either an annual review or a special review at a public hearing, Owner shall be required to demonstrate good faith compliance with the terms of the Agreement.
7.2.2 Upon completion of an annual review or a special review, the Community Development Director shall submit a report to the Planning Commission and City Council setting forth the evidence concerning good faith compliance by Owner with the terms of this Agreement and his recommended finding on that issue. The Planning Commission shall hold a public hearing regarding Owner’s good faith compliance with this Agreement.
7.2.3 Within thirty (30) days following the date of the Planning Commission’s public hearing the Planning Commission shall forward its recommendation to the City Council.
After receiving the Planning Commission’s recommendation, the City Council shall hold a public hearing regarding Owner’s good faith compliance with this Agreement. If the City Council finds on the basis of quantifiable, objective substantial evidence that Owner has complied in good faith with the terms and conditions of this Agreement, the review shall be concluded. 1274
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7.2.4 If the City Council makes a preliminary finding that Owner has not complied in good faith with the terms and conditions of this Agreement, the City Council may modify or terminate this Agreement as provided in Section 7.3 and Section 7.4. Notice of default as provided under Section 8.4 of this Agreement shall be given to Owner prior to proceeding under Section 7.3 and Section 7.4.
7.3 Proceedings Upon Modification or Termination. If, upon a preliminary finding under Section 7.2, City determines to proceed with modification or termination of this Agreement, City shall give written notice to Owner of its intention so to do. The notice shall be given at least ten 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 City proposes to terminate or to modify the Agreement; and,
(c) Such other information as is reasonably necessary to inform Owner of the nature of the proceeding and the specific issues asserted by the City as not demonstrating good faith compliance.
7.4 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 shall be entitled to present written and oral evidence with respect to its good faith compliance with the terms and conditions of this Agreement and any other matters related to this Agreement and the development of the Property. If the City Council finds, based upon substantial evidence, that Owner has not complied in good faith with the terms or conditions of the Agreement, the Council may terminate this Agreement or modify this Agreement and impose such conditions as are reasonably necessary to protect the interests of the City. The decision of the City Council shall be final, subject only to judicial review pursuant to Section 1094.5 of the Code of Civil Procedure.
7.5 Certificate of Agreement Compliance. If, at the conclusion of an annual or special review, Owner is found to be in compliance with this Agreement, City shall, upon request by Owner, promptly issue a Certificate of Agreement Compliance (“Certificate”) to Owner stating that after the most recent annual or special review and based upon the information known or made known to the Community Development Director and City 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 an annual or a special review and shall state the anticipated date of commencement of the next annual review. Owner may record the Certificate with the County Recorder. If the City shall fail to conduct any annual review, Owner shall be deemed to be in compliance with the requirements of this Agreement.
Whether or not the Certificate is relied upon by transferees or Owner, City 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 Community Development Director or City Council. 1275
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8. DEFAULT AND REMEDIES.
8.1 Remedies in General.
8.1.1 It is acknowledged by the Parties that City would not have entered into this Agreement if it were to be liable in damages under this Agreement, or with respect to this Agreement or the application thereof.
8.1.2 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 City shall not be liable in damages to Owner, or to any successor in interest of Owner, or to any other person, and Owner 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, validity, interpretation or effect of the provisions of this Agreement; or
(d) For any injury to or interference with the rights of Owner, allegedly or actually arising out of, or incurred in connection with, the parties entering this Agreement, or their exercise of any rights under this Agreement.
8.1.3 Notwithstanding the foregoing, Owner is entitled to pursue any claims for damages against City arising out of any breach of City concerning the Reimbursement Agreement or the DIF Credit Agreement. Likewise and notwithstanding anything to the contrary in this Agreement, the City and Owner shall have the right to pursue claims for damages against the other for the non-payment of any monetary amount expressly provided for in this Agreement.
Notwithstanding the foregoing, Owner’s liability to the City and City’s liability to Owner in connection with this Agreement shall be limited to direct damages and shall exclude any other liability, including without limitation liability for special, indirect, punitive, or consequential damages in contract, tort, warranty, strict liability or otherwise. If either City or Owner fail to make a payment due under this Agreement on the date specified in this Agreement, interest shall accrue on such amount at the rate of ten percent (10%) per annum until such amount is paid in accordance with this Agreement. Claims by Owner concerning the TUMF Improvement and Credit Agreement must be brought against WRCOG and not City. Claims by Owner concerning MSHCP implementation must be brought against RCA and not City.
8.2 Specific Performance.
8.2.1 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 the Parties for the following reasons:
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(a) Money damages are unavailable against City except as provided in Section 8.1 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.
8.2.2 Accordingly, it is expressly recognized that injunctive relief and specific enforcement of this Agreement are proper and desirable remedies, and it is agreed that any claim by Owner against City for an alleged breach of this Agreement shall be remedied by injunctive relief or an appropriate action for specific enforcement of this Agreement. It is agreed that specific performance is not available to City against Owner, although City can seek the remedy of injunctive relief against Owner.
8.3 General Release. Except for non-damage remedies, including the remedy of specific performance and judicial review as provided in this Agreement, Owner, for itself, its successors and assignees, hereby releases the City, its officers, agents, employees, and independent contractors from any and all claims, demands, actions, or suits of any kind or nature whatsoever arising out of any liability, known or unknown, present or future, including, but not limited to, any claim or liability, based or asserted, on any law or ordinance which seeks to impose any other monetary liability or damages, upon the City because it entered into this Agreement or because of the terms of this Agreement. Owner hereby waives the provisions of Section 1542 of the Civil Code which provides: “A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.” Notwithstanding the foregoing, this general release is inapplicable to claims that City has breached the TUMF Improvement and Credit Agreement, Reimbursement Agreement or the DIF Credit Agreement.
8.4 Termination or Modification of Agreement for Default of Owner. Subject to the provisions contained in Section 7.4 herein, City 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, City 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. In addition to the remedies specified in this Section, if Owner fails to make any of the payments 1277
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specified in Sections 5.2, 5.5.1, 5.9, 5.9.1, 5.9.3, 5.10.4, 5.10.5 or 5.10.6 after the City's completion of the process specified in this section, it may in its sole discretion withhold issuance of permits sought by Owner until such payments are made by Owner and pursue any other remedies under this Agreement.
8.5 Termination of Agreement for Default of City. Owner may terminate this Agreement only in the event of a default by City in the performance of a material term of this Agreement and only after providing written notice to City of default setting forth the nature of the default and the actions, if any, required by City to cure such default and, where the default can be cured, City 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. During the time when Owner alleges the existence of a City Default and without limiting any of its other available remedies, Owner shall not be obligated to proceed with or complete the Project or any phase of the Project, nor to reserve or dedicate any property pursuant to this Agreement. Upon a City Default, any resulting delays in Owner’s performance shall neither be a default by Owner nor constitute grounds for termination or cancellation of this Agreement by the City.
8.6 Attorneys’ Fees. Should any legal action be brought by either Party against the other for default under this Agreement or to enforce or interpret any provision hereof, the Party prevailing in such action shall be entitled to recover against the non-prevailing Party its reasonable attorneys’ fees and costs incurred in such action.
9. THIRD PARTY LITIGATION.
9.1 To the maximum extent permitted by law, Owner must defend, indemnify, and hold the City and its elected officials, officers, contractors serving as City officials, agents, and employees ("Indemnitees") harmless from liability for damage and/or claims for damage for personal injuries, including death, and claims for property damage, and with respect to all other actions and liabilities for damages caused or alleged to have been caused by reason of Owner's activities in connection with the Development and/or construction of the Project, and which may arise from the direct or indirect operations of Owner or those of Owner's contractors, agents, tenants, employees, or any other persons acting on Owner's behalf, which relate to the Development and/or construction of the Project. This indemnity provision applies to all damages and claims for damage, as described above, regardless of whether or not the City prepared, supplied, or approved the plans, specifications, or other documents for the Project, including any associated public or private improvements.
9.2 Without limiting the generality of Section 9.1, Owner shall also defend, indemnify, and hold the Indemnitees harmless from and against any and all claims, liabilities, losses, damages, costs, and expenses arising from or related to any claims that Owner or Owner's contractors are required to pay prevailing wages pursuant to Labor Code Section 1720 et seq., in connection with the Development of the Project.
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9.3 Without limiting the generality of Section 9.1, in the event of any legal action challenging the validity, applicability, or interpretation of any provision of this Agreement, any of the entitlement documents pertaining to the Project including, without limitation, the City's General Plan, Zoning Code, or any other supporting document relating to the Project, Owner shall also indemnify, defend, and hold harmless the Indemnitees with respect to all liability, costs, and expenses incurred by, and/or awarded against, the City or any of the Indemnitees in relation to such action.
9.4 Without limiting the generality of Section 9.1, Owner shall defend indemnify and hold Indemnitees 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.
9.5 With respect to any legal action or claim falling within Owner's defense, indemnity, and hold harmless obligations under this Agreement:
(a) City shall promptly notify Owner of any such claim, action or proceeding, and City shall cooperate in the defense save and except claims for damages arising through the sole active negligence or sole willful misconduct of City or from breach of this Agreement by City, and if City fails to promptly notify Owner of any such claim, action or proceeding, or if City fails to cooperate in the defense, Owner shall not thereafter be responsible to defend, indemnify, or hold harmless City.
(b) City shall have the right to select counsel of its choice and Owner shall provide, and maintain for the duration of such action or claim, a cash deposit to City in an amount or amounts determined by the City Attorney to be reasonably necessary to cover the City's legal fees, costs, and expenses. The City’s separate counsel billing rates shall be identical to the rates City pays for its typical municipal litigation rates for legal challenges of the variety being defended. The City shall refund to Owner any unexpended funds from the deposit within thirty (30) days of any final disposition or full and complete settlement of the action or claim. (c) In the event of any litigation challenging the effectiveness of this Agreement, or any portion hereof, this Agreement shall remain in full force and effect while such litigation, including any appellate review, is pending, unless otherwise ordered by the court. Absent issuance of an injunction, Owner may elect to continue Development under this Agreement pending completion of the litigation but it shall do so at its sole risk, and the City shall not be liable for any loss suffered as a result thereof.
9.6 In the event any initiative, moratorium, referendum, statute, ordinance, limitation or other measure is enacted by or under authority of City subsequent to the Effective Date that would otherwise modify the development rights vested pursuant to this Agreement, Owner reserves the right to challenge any such enactment in a court of law should it become necessary to 1279
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protect the development rights vested in the Owner pursuant to the terms and conditions of this Development Agreement, and City agrees that (subject to any judicial writ or order to the contrary) Owner shall continue to enjoy such development rights until such time, if ever, as all such challenges to the validity of such measure, or its interpretation or applicability to Owner have been finally resolved (including the expiration of all times for appeal without any appeals having been filed) adversely to Owner. Any exercise by Owner of challenged development rights shall be at Owner’s sole risk and expense, and City will not be liable to Owner if it is determined that Owner was not entitled to exercise such development rights.
9.7 This Section shall survive the expiration or earlier termination of this Agreement.
Notwithstanding the foregoing, Owner’s indemnity obligations specified in this Section 9.7 regarding Owner’s design, construction or dedication of public improvements shall terminate one (1) year after City accepts Owner’s offer of dedication of public improvements.
10. MORTGAGEE PROTECTION.
10.1 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.
10.2 City 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. City 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 City in the manner specified herein for giving notices, shall be entitled to receive written notification from City of any default by Owner in the performance of Owner’s obligations under this Agreement.
(c) If City timely receives a request from a Mortgagee requesting a copy of any notice of default given to Owner under the terms of this Agreement, City 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 1280
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of such foreclosure, shall take the Property, or part thereof, subject to the terms of this Agreement. If the Community Development Director, acting in consultation with the City Manager and City Attorney, provides prior written consent, which consent shall not be unreasonable withheld, a Mortgagee in possession shall not 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 City, the performance thereof shall continue to be a condition precedent to City’s performance hereunder. Any transfer by any Mortgagee in possession shall be subject to the provisions of Section 2.4 of this Agreement.
11. MISCELLANEOUS PROVISIONS.
11.1 Recordation of Agreement. This Agreement and any amendment, modification, termination or cancellation thereof shall be recorded with the County Recorder by the Clerk of the Board of Supervisors within the period required by Section 65868.5 of the Government Code.
11.2 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.
11.3 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, including the payments set forth therein, are essential elements of this Agreement and City 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.
11.4 Preemption or Frustration of Agreement by Changes in Law. In the event that any Party has or acquires actual knowledge that: (i) state or federal law or regulations enacted after the Effective Date preempt this Agreement or City’s authority to perform hereunder, or (ii) the action or inaction of any governmental agency or quasi-public entity arising from or related to this Agreement, apart from City or any instrumentality thereof, frustrates compliance with one or more provisions of this Agreement as a matter of law, such a Party shall:
(a) Provide the other Party with written notice of such state or federal law or regulation, a copy of such law or regulation and a statement identifying how such law regulation conflicts with the provisions of this Agreement. (b) Upon notice by one Party to another as to preemption or frustration of this Agreement by law or regulation, the Parties shall promptly meet and confer 1281
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in good faith and make a reasonable attempt to modify or amend this Agreement to comply with such applicable state or federal law or regulation in a manner that is least disruptive to the purpose and intent of this Agreement. If the Parties cannot agree on a manner or method to comply with such state or federal law or regulation, the Parties shall follow the Dispute Resolution procedures set forth in this in section 8 of this Agreement.
11.5 RESERVED
11.6 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.
11.7 Operating Memoranda. The provisions of this Agreement require a close degree of cooperation between the City and the Owner. It is anticipated due to the term of this Agreement that clarification, interpretation and refinements to the Development Approvals may be appropriate with respect to the details of performance of the City and the Owner. To the extent allowable by law, the Owner shall retain a certain degree of flexibility as provided herein with respect to all matters, items and provisions covered in general under this Agreement and exhibits thereto. When and if the Owner finds it necessary or appropriate to make clarification, interpretation and refinements, the Parties shall effectuate such changes, adjustments or clarifications through operating memoranda (“Operating Memoranda”) approved by the Parties in writing, which reference this Section of the Agreement. Operating Memoranda are not intended to constitute an amendment to this Agreement but mere ministerial clarifications; therefore, public notices and hearings shall not be required. The City Attorney shall be authorized, upon consultation with the Owner, to determine whether a requested clarification may be effectuated pursuant to this Section or whether the requested clarification is of such character to constitute an amendment to the Agreement which requires compliance with the provisions of this Agreement pertaining to amendments. The authority to enter into such Operating Memoranda is hereby delegated to the City Manager, and the City Manager is hereby authorized to execute any Operating Memoranda hereunder without Planning Commission or City Council action and without public hearing.
Although other matters may also fall within the scope of Operating Memoranda, any clarification, interpretation and refinements to this Agreement which does not relate to the Term, permitted uses of the Project, provisions for the reservation or dedication of land, grant of easement, or the conditions, terms, restrictions and requirements relating to Subsequent Development Approvals of City, revisions to Public Benefits (other than to the time for performance of such Public Benefits) or monetary exactions of Owner, shall be considered an “Operating Memoranda”.
Notwithstanding the foregoing, if the City Manager determines that such requested Operating Memorandum must or should be submitted for approval to the Planning Commission or City Council, the City Manager may so submit the requested Operating Memorandum for approval.
11.8 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 1282
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11.9 Gender and Number. As used herein, the neuter gender includes the masculine and feminine, the feminine gender includes the masculine, and the masculine gender includes the feminine. As used herein, the singular of any word includes the plural.
11.10 Rule Against Perpetuities. This Agreement shall be construed by all interested Parties, to the maximum extent possible, to be consistent with, and not in violation of, the Rule against Perpetuities.
11.11 Time of Essence. Time is of the essence in the performance of the provisions of this Agreement as to which time is an element.
11.12 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.
11.13 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.
11.14 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.
11.15 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.
11.16 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.
11.17 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 Riverside Historic Courthouse of the Superior Court, and the Parties hereto waive all provisions of law providing for the filing, removal or change of venue to any other court.
11.18 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 1283
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Agreement. The only relationship between City and Owner is that of a government entity regulating the development of private property and the owner of such property.
11.19 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 acknowledgement 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 Parties further agree to mutually cooperate with one another in carrying out the purposes of this Agreement.
11.20 Eminent Domain. No provision of this Agreement shall be construed to limit or restrict the exercise by City of its power of eminent domain, or to mandate City’s use of eminent domain.
11.21 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, Ownershall file with the Community Development 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).
11.22 Designation of City Officials. Except for functions to be performed by the City Council, City may, at any time and in its sole discretion, substitute any City official to perform any function identified in this Agreement as the designated responsibility of any other official.
City shall provide notice of such substitution pursuant to Section 2.7; provided, however, the failure to give such notice shall not affect the authority of the substitute official in any way.
11.23 Legally Binding Contract; Enforceability.
11.23.1 It is the intent of City and Owner that this Agreement is a legally binding contract which shall prevail over the provisions of any subsequently enacted moratoria, statutes, ordinances, limitations, or other measures, whether or not enacted by City, or under the authority of City by voter initiative or referendum, and whether or not such initiative, moratorium, referendum, statute, ordinance, limitation, or other measure relates, in whole or in part, to the rate, timing, sequence, or phasing of the development or construction of all or part of the Project or the 1284
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improvements or affecting parcel or Subdivision Maps, building permits, occupancy certificates, or other entitlement to use the Property which are issued by City, subject only to the rights and powers reserved to City under the terms of this Agreement and the requirements of California law.
11.23.2 This Agreement shall not become binding and shall have no force and effect whatsoever until such time as it has been approved by the City Council pursuant to a duly enacted ordinance and fully executed by and delivered to all of the Parties hereto.
11.24 Authority to Execute. The person executing this Agreement on behalf of Owner warrants and represents that he has the authority to execute this Agreement on behalf of his corporation, partnership or business entity and warrants and represents that he has the authority to bind Owner to the performance of its obligations hereunder.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement on the day and year set forth below.
[Signatures appear on following pages.]
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CITY OF BANNING
Dated:
By:
Mayor, City of Banning
ATTEST:
Sandra Calderon
Deputy City Clerk
By:
Deputy
(SEAL)
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Owner:
NP BANNING INDUSTRIAL, LLC
By: NPD Management, LLC,
a Missouri limited liability company
By:
Nathaniel Hagedorn, Manager
Dated:
(ALL SIGNATURES SHALL BE ACKNOWLEDGED BEFORE A NOTARY PUBLIC.
EXECUTION ON BEHALF OF ANY CORPORATION SHALL BE BY TWO CORPORATE OFFICERS.)
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CALIFORNIA ALL-PURPOSE 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, ,
Date Here Insert Name and Title of the Officer
personally appeared
Name(s) of Signer(s)
,
who proved to me on the basis of satisfactory evidence
to be the person(s) whose name(s) is/are subscribed to
the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their
authorized capacity(ies), and that by his/her/their
signature(s) on the instrument the person(s), or the
entity upon behalf of which the person(s) acted,
executed the instrument.
I certify under PENALTY OF PERJURY under the
laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Signature
Place Notary Seal Above Signature of Notary Public
[ACKNOWLEDGMENT PAGE TO _________________________]
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EXHIBIT “A-1”
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Development Agreement No.___
EXHIBIT “A-1”
LEGAL DESCRIPTION OF THE NORTHERN PORTION OF THE PROPERTY AND
THE SLB EXTENSION
PARCEL A:
PARCELS 1 THROUGH 4, INCLUSIVE OF MAPS AND LETTERED LOTS A THROUGH J, INCLUSIVE, OF PARCEL MAP NO.
25541, IN THE CITY OF BANNING, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, ON FILE IN BOOK 166 PAGES 27
THROUGH 35, INCLUSIVE, OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
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EXHIBIT “A-2”
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Development Agreement No.___
EXHIBIT “A-2”
LEGAL DESCRIPTION OF THE SOUTHERN PORTION OF THE PROPERTY PARCEL B:
PARCELS 1 THROUGH 9 AND LETTERED LOTS "A" THROUGH "O", ALL INCLUSIVE OF PARCEL MAP 28971, IN THE
COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 198 PAGES 8 THROUGH 10
INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM PARCELS 3 AND 7, THOSE PORTIONS CONVEYED TO THE
CITY OF BANNING BY A DEED
RECORDED JANUARY 15, 1998 AS INSTRUMENT NO. 015506 OFFICIAL RECORDS OF RIVERSIDE COUNTY, CALIFORNIA.
ALSO EXCEPTING THEREFROM PARCEL 3 ALL THAT PORTION CONVEYED TO THE
CITY OF BANNING BY A DEED
RECORDED MARCH 22, 2002 AS INSTRUMENT NO. 2002-146041.
PARCEL C:
PARCELS 1 AND 2 AND LETTERED LOTS A, B, AND C OF PARCEL MAP 13521, IN
THE COUNTY OF RIVERSIDE, STATE OF
CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 83, PAGES 13 THROUGH 15,
INCLUSIVE OF PARCEL MAPS, IN THE
OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPTING THEREFROM THOSE PORTIONS CONVEYED TO THE CITY OF
BANNING, A MUNICIPAL CORPORATION, BY
DEED RECORDED JANUARY 15, 1998, AS INSTRUMENT NO. 98-015506, OFFICIAL RECORDS.
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EXHIBIT “B”
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Development Agreement No.___
EXHIBIT “B”
MAP SHOWING PROPERTY AND ITS LOCATION
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EXHIBIT “C”
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Development Agreement No.___
EXHIBIT “C”
EXISTING DEVELOPMENT APPROVALS
1. certification of the EIR;
2. adoption of a general plan amendment;
3. adoption of a zone change for the Northern Portion of the Property;
4. adoption of a prezoning change for the Southern Portion of the Property;
5. adoption of the Specific Plan to regulate development within the Property;
6. approval of this Agreement; and
7. approval of tentative parcel map No. TPM 38118.
COPIES OF THE EXISTING DEVELOPMENT APPROVALS LISTED ABOVE ARE ON FILE
IN THE CITY OF BANNING PLANNING DEPARTMENT AND ARE INCORPORATED HEREIN BY REFERENCE.
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EXHIBIT “D”
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Development Agreement No.___
EXHIBIT “D”
EXISTING LAND USE REGULATIONS
COPIES OF THE EXISTING LAND USE REGULATIONS LISTED ABOVE ARE ON FILE IN
THE CITY OF BANNING PLANNING DEPARTMENT AND ARE INCORPORATED HEREIN BY REFERENCE.
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EXHIBIT “E-1”
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Development Agreement No.___
EXHIBIT “E-1”
INITIAL PHASING PLAN
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-1”
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EXHIBIT “F”
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Development Agreement No.___
EXHIBIT “F”
IMPROVEMENTS INCLUDED AS CONDITIONS OF
APPROVAL TO THE EXISTING DEVELOPMENT APPROVALS.
Depicted in Exhibit “E-1”, incorporated herein by reference Roadway Improvements, per Specific Plan
• Sunset Avenue (1-10 to Lincoln Street): Arterial Highway (110' R/W) - Full Width Improvements (if not constructed by others)
• Sunset Avenue (Lincoln Street to Sun Lakes Boulevard): Modified Secondary Highway (110' R/W) - Full Width Improvements
• Sunset Avenue (South of Sun Lakes Boulevard): Secondary Highway (88' R/W) - Full Width Improvements (if not constructed by others)
• Lincoln Street: Collector Street (78' R/W) - Full Width Improvements • Bobcat Road: Collector Street (78' R/W) - Half Width Improvements plus 10' of Roadway Improvements
• Highland Home Road (North of Sun Lakes Boulevard): Arterial Highway (110' R/W) – Half Width Improvements plus 10’ of Roadway Improvements • Highland Home Road (South of Sun Lakes Boulevard): Arterial Highway (110' R/W) - Half Width Improvements plus 10’ of Roadway Improvements • Utility Improvements
• Recycled Water (size varies)
• Water (size varies)
• Sanitary Sewer (size varies)
• Storm Drain (size varies)
• 24" Sanitary Sewer Dry Trunk Main (South of Sun Lakes Boulevard) • (2) Concrete Box Culvert Roadway Crossings along Lincoln Street • (1) Concrete Box Culvert Roadway Crossings along Sunset Avenue (South of Sun Lakes Boulevard)
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EXHIBIT “G-1”
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Development Agreement No.___
EXHIBIT “G-1”
Modifications to Project
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Development Agreement No.___
EXHIBIT “G-2”
DIF CREDIT AND REIMBURSEMENT AGREEMENT
DEVELOPMENT IMPACT FEE CREDIT IMPLEMENTATION AGREEMENT
(Sunset Crossroads)
This DEVELOPMENT IMPACT FEE CREDIT IMPLEMENTATION AGREEMENT (“Agreement”) is made and effective this ____ day of __________, 2025, by and between the CITY OF BANNING, a California municipal corporation (“City”), and NP BANNING INDUSTRIAL, LLC, a Missouri limited liability company (“Owner”). City and Owner are sometimes hereinafter referred to individually as a “Party” and collectively as the “Parties.”
RECITALS
A. Owner is the owner and developer of certain real property comprised ___ gross acres of land, more specifically described in the legal description set forth in Exhibit “A,” attached hereto and incorporated herein by this reference (“Property”).
B. Owner has obtained certain entitlements from the City including General Plan Amendment No. __-____, Zone Change No __-____, Pre-zone Change No. __-____, the Sunset Crossroads Specific Plan No. 20-20000002, FEIR (SCH No. __________), Tentative Parcel Map No. _____, a Sign Program, and a Development Agreement, which entitlements together allow for the development of a project currently titled “Sunset Crossroads,” which is intended to include commercial and industrial uses, including, without limitation: (a) up to 268,400 square feet of commercial uses, including Travel Center Retail Uses, a Fueling Facility, and a hotel with approximately 125 rooms; (b) up to 5,545,000 square feet of industrial land uses within a 396.5- acre portion of the Property; (c) related signage; (d) approximately 65.4 acres of land designated for Open Space-Resources (52.8 acres) and Open Space-Parks (approximately 5 acres); and approximately 23.6 acres of internal circulation features (“Project”). The Development Agreement was recorded in the official records of the County of Riverside on __________ __, 2025, as Document No. 2025-________ and became effective on __________ __, 2025 (“Development Agreement”).
C. On September 10, 2019, the Banning City Council adopted Resolution 2019-112, approving updated development impact fees, including fees for General Facilities, Police Facilities, Fire Facilities, Parkland and Park Facilities, General City Facilities, Wastewater Facilities, and Water Facilities additionally the City imposes regional development impact fees pursuant to separate ordinances known as TUMF Fees and MSHCP Fees (collectively “Development Impact Fees” or “DIF”). The final Development Impact Fee Update Study dated August 7, 2019 (“DIF Nexus Study”), is currently on file with the City.
D. The Development Agreement requires Owner to pay Development Impact Fees as set forth in the Development Agreement at Section 5.11 and Exhibit “H” for the purpose of 1298
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defraying all or a portion of the cost of public improvements, public services, and community amenities related to the Project.
E. As a condition of the development approvals for the Project, as more specifically set forth the Development Agreement, City has required, or for some improvements gives the option for, Owner to design, construct, and/or install certain components of public infrastructure, and/or dedicate certain properties, that might otherwise have been funded by DIF (collectively, the “DIF Improvements”, and individually a “DIF Improvement”).
F. The City’s DIF program authorizes the City to provide a credit to project applicants against certain DIF in exchange for the applicant’s construction and dedication of public improvements covered by the nexus study for that DIF. TUMF and MSHCP credits are subject to and Owner shall comply with the rules of the Western Regional Council of Governments and the Western Riverside Regional Conservation Agreement respectively. Accordingly, the Development Agreement contemplates that, in exchange for providing the DIF Improvements, Owner shall be entitled to: (1) fee credits or reimbursements from the City for the public improvements required in Section 5.3 of the Development Agreement (“Public Improvements”), to the extent that such public improvements are included in the City’s DIF program; (2) DIF credits in the amount of Owner’s Deficit, including the portion of the Accelerated Transportation DIF Payment that was not refunded to Owner, related to the future extension of Sun Lakes Boulevard (“SLB Extension”), to the extent there remains any difference between the maximum cost included in each of the TUMF and DIF nexus studies and TUMF or DIF funds already spent on the SLB Extension; (3) a partial DIF credit due to Owner’s constructing or funding the construction of improvements to Sunset Avenue (“Sunset Avenue Improvements”) as set forth in Section 5.6 of the Development Agreement to the extent such improvements are included in City’s DIF program; (4) Parkland and Park Facilities DIF credit for the design and cost of constructing the Specific Plan Park Facilities, as set forth in Section 5.10.3 of the Development Agreement; and (5) DIF credit for Owner’s construction of Oversized Improvements to the extent an improvement is included in the DIF program, as set forth in more detail in Section 5.12 of the Development Agreement.
Sections 5.8.1 through 5.8.24 of the Development Agreement require Owner to dedicate the Fire Station Property, Water Tank Property, Electrical Property and the RO Property (“Dedication Properties”) in exchange for DIF credits, following dedication of said properties. For the sake of clarity and notwithstanding anything to the contrary herein, DIF credits shall only be due with respect to the particular DIF having the corresponding improvement identified in the Nexus Study for the DIF in question.
G. This Agreement shall be interpreted consistently with California Labor Code Section 1720(c)(2) to accomplish the Parties’ intent that the Project is a private development and exempt from payment of prevailing wages to the full extent permitted under California Labor Code Section 1720(c)(2), and any other applicable provisions and City maintains no proprietary interest in the Project; provided, however, that Owner shall pay prevailing wage for the DIF Improvements and as otherwise required by state law.
H. The Parties desire to enter into this Agreement to implement the Project in a manner consistent with the Development Agreement for the following purposes: (1) to provide for the timely delivery of the DIF Improvements; (2) to provide a means by which Owner’s costs for delivery of the DIF Improvements and related right-of-ways are offset against Owner’s DIF 1299
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obligations; and (3) to provide a means for Owner to be reimbursed for DIF Improvements in accordance with the terms of the Development Agreement.
I. It is the intent of this Agreement to implement certain provisions of the Development Agreement related to the City providing credit against Developer’s required payment of DIF for qualifying improvements. If there is any conflict between this Agreement and the Development Agreement, the Development Agreement shall control. Capitalized terms which are used in this Agreement but not defined herein shall be as defined in the Development Agreement.
J. The Parties contemplate that one or more Subdivision Improvement Agreements will be entered into in connection with a final map approved and recorded in connection with the development of the Project. The Subdivision Improvement Agreements will likely include provisions related to required insurance, bonds, warranty, and other provisions related to the construction of improvements to be accepted by the City. It is the intent of this Agreement to not duplicate, contradict, or override the terms of that Subdivision Improvement Agreements, but to have the terms of the Subdivision Improvement Agreements control in the event of a conflict with the terms of this Agreement.
NOW, THEREFORE, for the purposes set forth herein, and for good and valuable consideration, the adequacy of which is hereby acknowledged, the Parties hereby agree as follows:
TERMS
1.0 Incorporation of Recitals. The Parties hereby affirm the facts set forth in the Recitals above and agree to the incorporation of the Recitals as though fully set forth herein.
2.0 Construction of DIF Improvements. Owner shall construct or have constructed at its own cost and expense the DIF Improvements. The DIF Improvements are described and listed in the City’s May 2019 Traffic Fee Study and the DIF Nexus Study that support the imposition of the City’s Development Impact Fees, TUMF and MSHCP, as the same may be amended or added to under the Development Agreement. The DIF Improvements shall thereafter be shown and described more specifically on the plans, profiles, and specifications that will be prepared by or on behalf of Owner and approved by City, as provided by this Agreement and under applicable law.
The DIF Improvements are the public facilities identified in the Nexus Study upon which the applicable DIF Credit (as defined in this Agreement) is calculated. Owner shall be eligible to receive the applicable DIF Credit against payment of the DIF upon the proof of payment under the construction contract for the applicable DIF Improvements. Owner shall provide all equipment, tools, materials, labor, tests, design work, and engineering services necessary to fully and adequately complete the DIF Improvements.
2.1 Pre-Approval of Plans and Specifications. Owner shall obtain City approval of all plans and specifications of the DIF Improvements before starting construction. In preparing the plans and specifications, Owner shall utilize competent design professionals who timely perform design services at a competitive cost. City approval of plans and specifications shall not relieve Owner from ensuring that all DIF Improvements conform with all other requirements and standards set forth in this Agreement and under applicable law. 1300
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2.2 Bidding and Contracting Requirements. Owner shall comply with Exhibit “C” to this Agreement and all state and local laws, ordinances, regulations, codes, standards, and other requirements applicable to the bidding and contracting for the construction of the DIF Improvements including but not limited to Labor Code Section 1720 requiring the payment of prevailing wages.
2.3 Permits and Notices. Before starting any work on the applicable DIF Improvements, the contractor(s) retained by Owner for the work (each, a “Contractor”) shall, at its sole cost and expense, obtain all necessary permits and licenses and give all necessary and incidental notices required for the lawful construction of the applicable DIF Improvements and performance of the Contractor’s obligations under its contract with Owner. The Contractor shall conduct the work in full compliance with the regulations, rules, standard procedures, and other requirements contained in any permit or license issued to the Contractor.
2.4 Insurance and Public Works Requirements. Owner and all of its Contractors shall pay prevailing wages (in accordance with Articles 1 and 2 of Chapter 1, Part 7, Division 2 of the Labor Code) as required by law and otherwise comply with applicable provisions of the Labor Code, the Government Code and the Public Contract Code on work on all DIF Improvements. The Contractors shall be required to provide proof of insurance coverage throughout the term of the construction of the applicable DIF Improvements reasonably acceptable to City. The Contractors shall comply with such other reasonable requirements relating to the construction of the applicable DIF Improvements which Owner, in consultation with City, may impose by written notification delivered to the Contractors at any time. The Contractors shall provide proof to Owner, at such intervals and in such form as Owner may require, that the foregoing requirements have been satisfied.
2.5 Quality of Work/Compliance with Laws. The construction plans and specifications for the DIF Improvements shall be prepared in accordance with all applicable federal, state, and local laws, ordinances, regulations, codes, standards, and other requirements.
The DIF Improvements shall be completed in a good and workmanship like manner in accordance with all approved maps, plans, specifications, standard drawings, and special amendments thereto on file with City, as well as all applicable federal, state, and local laws, ordinances, regulations, codes, standards, and other requirements applicable at the time work is actually commenced.
2.6 Standard of Performance. The DIF Improvements shall be completed in a skillful and workmanlike manner, and consistent with the standards generally recognized as being employed by professionals in the same discipline in the State of California. The Contractors shall be skilled in the professional calling necessary to perform the work and shall have all licenses, permits, qualifications, and approvals of whatever nature legally required to perform the work, and such licenses, permits, qualifications, and approvals shall be maintained throughout the term of this Agreement.
2.7 Alterations to DIF Improvements. All work shall be done, and the applicable DIF Improvements completed, as shown on approved plans and specifications, and any subsequent alterations thereto. If during the course of construction and installation it is reasonably determined that public health and safety interests require alterations in the applicable DIF Improvements, the Contractor shall undertake such design and construction changes as may be 1301
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reasonably required by City and agreed to by Owner. Any and all alterations in the plans and specifications and the applicable DIF Improvements to be completed may be accomplished without first giving prior notice thereof to the Contractor’s surety for this Agreement.
2.8 Coordination of DIF Improvements. Construction of the DIF Improvements shall include any transitions and/or other incidental work deemed necessary for drainage or public safety, as shown more specifically for the applicable DIF Improvements. Owner shall be responsible for the replacement, relocation, or removal of any component of any existing public or private improvement in conflict with the construction or installation of the DIF Improvements, to the extent that Owner is permitted to do so, with such cooperation as may be necessary from the City, including, without limitation, condemnation proceedings. Such replacement, relocation, or removal shall be performed to the satisfaction of City, which shall not be unreasonably withheld, conditioned, or delayed, and Owner shall make commercially reasonable efforts in coordinating with private owners of such improvements, if any.
3.0 Maintenance of DIF Improvements. City shall not be responsible or liable for the maintenance or care of any completed portion of the DIF Improvements until City expressly approves and accepts that portion in writing. City shall exercise no control over completed portions of the DIF Improvements until accepted. Any use by any person of any completed portion of the DIF Improvements, shall be at the sole and exclusive risk of Owner at all times prior to City’s acceptance of completed portions of the DIF Improvements. Owner shall maintain completed portions of the DIF Improvements in a state of good maintenance and repair until they are approved and accepted by City, and until the security for the performance of the completed portion of the DIF Improvements is released. It shall be Owner’s responsibility to initiate all maintenance work, but if it shall fail to do so, it shall promptly perform such maintenance work when notified to do so by City. If Owner fails to properly prosecute its maintenance obligation under this section, following thirty (30) days’ written notice by City, City may do all work necessary for such maintenance and the cost thereof shall be the responsibility of Owner and the surety under this Agreement. City shall not be responsible or liable for any damages or injury of any nature in any way related to or caused by any completed portion of the DIF Improvements or their condition prior to acceptance, except to the extent caused by, relating to, or arising out of the negligent acts or omissions or willful conduct of City or its elected officials, officers, employees, volunteers, or agents. The process and terms for the City accepting a completed DIF Improvement shall be as provided in the applicable Subdivision Improvement Agreement, if any, entered into for that applicable portion of the Project.
4.0 Fees and Charges. Owner shall, at its sole cost and expense, pay all fees, charges, and taxes required by the Development Agreement arising out of the construction of the DIF Improvements, including, without limitation, all plan check, design review, engineering, inspection, sewer treatment connection fees, and other service fees established by City. All of these fees may be included in the DIF Credit subject to the other terms of this Agreement and the Development Agreement.
5.0 City Inspection of DIF Improvements. Owner shall, at its sole cost and expense, and at all times during construction of the DIF Improvements, maintain reasonable and safe facilities and provide safe access for inspection by City of the DIF Improvements and areas where construction of the DIF Improvements is occurring or will occur. 1302
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6.0 Liens. Upon the expiration of the time for the recording of claims of liens as prescribed by Civil Code Sections 8412 and 8414 with respect to the DIF Improvements, Owner shall provide to City such evidence or proof as City shall require that all persons, firms, and corporations supplying work, labor, materials, supplies, and equipment to the construction of the DIF Improvements, have been paid in full, and that no claims of liens have been threatened (with such threats made in writing) or recorded by or on behalf of any such person, firm, or corporation.
7.0 Acceptance of DIF Improvements; As-Built or Record Drawings. As the applicable DIF Improvements are completed by Owner and approved by City, and if they comply with all applicable federal, state, and local laws, ordinances, regulations, codes, standards, and other requirements, City shall be authorized to accept the completed DIF Improvements or any portion thereof as provided herein or in the applicable Subdivision Improvement Agreement, if any. City may, in its reasonable discretion, accept fully completed portions of the applicable DIF Improvements before all of the DIF Improvements for an area are complete, which shall not release or modify Owner’s obligation to complete the remainder of the DIF Improvements. Upon the total or partial acceptance of the applicable DIF Improvements by City, Owner shall file with the Recorder’s Office of the County of Riverside a notice of completion for the accepted DIF Improvements in accordance with California Civil Code Sections 8182, 8184, 9204, and 9208 (“Notice of Completion”), and after the passage of all required periods of time for filing claims, and then resolution of all outstanding claims, DIF Improvements which have been accepted by the City in accordance with this Agreement shall become the sole and exclusive property of City without any payment therefore.. Notwithstanding the foregoing, City may not accept any portion of the applicable DIF Improvements unless and until Owner provides one (1) set of “as-built” or record drawings or plans to the City for all such portions of the applicable DIF Improvements. The drawings shall be certified and shall reflect the condition of the applicable DIF Improvements as constructed, with all changes incorporated therein.
8.0 Warranty and Guarantee. Owner hereby warrants and guarantees all the DIF Improvements against any defective work or labor done, or defective materials furnished in the performance of this Agreement, including the maintenance of the DIF Improvements, for a period of one year following completion of the portion of the applicable DIF Improvements as provided by this Agreement and/or the applicable Subdivision Improvement Agreement between the parties (“Warranty”). During the Warranty, Owner shall repair, replace, or reconstruct any defective portion of the DIF Improvements or portion that is not in substantial compliance with the approved plans, profiles and specifications for the applicable DIF Improvements, in accordance with the applicable ordinances, resolutions, regulations, codes, standards, or other requirements of City. All repairs, replacements, or reconstruction during the Warranty shall be at the sole cost and expense of Owner and the surety, except to the extent caused by, relating to, or arising out of the negligent acts or omissions or willful conduct of City, or its elected officials, officers, employees, volunteers, or agents. Upon completion of such repairs, replacements, or reconstruction required for claims made during the Warranty and after expiration of the Warranty, City shall release the related Warranty bond. As to any portion of DIF Improvements that have been repaired, replaced, or reconstructed pursuant to claims made during the Warranty, Owner agrees to Warranty those portions for an additional one year, but no additional extensions are applicable. Nothing herein shall relieve Owner from any other liability it may have under federal, state, or local law to repair, replace, or reconstruct any DIF Improvement following expiration of the Warranty or any extension thereof. Owner’s Warranty obligation under this Section shall survive the expiration or 1303
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termination of this Agreement, but the survival period shall be limited to the statutory period of limitations for claims under the applicable law. In the event of a conflict among the warranty provisions of this Section and the provisions of the applicable Subdivision Improvement Agreement, the provisions which provide the most protection to City shall control.
9.0 Administrative Costs. If Owner fails to have constructed and installed all or any part of the applicable DIF Improvements, or if Owner fails to comply with any other obligation contained within this Agreement, Owner and the surety shall be jointly and severally liable to City for all administrative expenses, fees, and costs, including reasonable attorney’s fees and costs, incurred in obtaining compliance with this Agreement or in processing any legal action or for any other remedies permitted by law.
10.0 Default; Notice; Remedies.
10.1 Notice. Notice and Defaults under this Agreement shall be as provided for in the Development Agreement.
10.2 City Completion of DIF Improvements. If the Default pertains to the failure of Owner to reasonably and timely prosecute to completion the applicable DIF Improvements, resulting in a demonstrated deficiency of necessary public health and safety services, City may complete all remaining work on the applicable DIF Improvements, arrange for the completion of all remaining work on the applicable DIF Improvements, and/or conduct such remedial activity as in its reasonable discretion it believes is required to remedy the Default. The cost of all such work or remedial activity shall be recoverable by City from Owner. City’s right to take such actions shall in no way be limited by the fact that Owner, the Contractor, or its surety may have constructed any of the DIF Improvements at the time of City’s demand for performance. Provided, however, that the City may not undertake completion of the applicable DIF Improvement until 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. In the event City elects to complete or arrange for completion of the remaining work for the DIF Improvements, City may also require all work by Owner, the Contractor, or its surety on the applicable DIF Improvements to cease in order to allow adequate coordination by City.
10.3 Other Remedies. No action by any Party pursuant to this Section 10.0 et seq. of this Agreement shall prohibit that Party from exercising any other right or pursuing any other legal or equitable remedy available under this Agreement or any federal, state, or local law, except that in no event shall Owner or any of its contractors, subcontractors, or assignees be entitled to seek monetary damages from City. The Parties may exercise their rights and remedies independently or cumulatively, and the Parties may pursue inconsistent remedies. The Parties may institute an action for damages, injunctive relief, or specific performance.
11.0 Security; Surety Bonds. Prior to the commencement of any work on the DIF Improvements, the Contractor shall provide City with surety bonds in the amounts and under the 1304
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terms set forth below (“Security”). The amount of the Security shall be based on the estimated actual costs to construct the applicable DIF Improvements to be constructed by the Contractor for the applicable portion of the work, as determined by City in consultation with Owner after Owner has awarded a contract for construction of the DIF Improvements to the Contractor in accordance with this Agreement (“Estimated Costs”). If City in consultation with Owner determines, in its reasonable discretion, that the Estimated Costs have changed, the Contractor shall adjust the Security in the amount requested by the City. Compliance with this Section 11.0 et seq. of this Agreement shall in no way limit or modify Owner’s indemnification obligation provided in Section
12.0 of this Agreement. In the event of a conflict between the surety bond provisions of this Section and the surety bond provisions of the applicable Subdivision Improvement Agreement, the Subdivision Improvement Agreement shall control.
11.1 Performance Bond. To guarantee the faithful performance of the DIF Improvements, to protect City if Owner is in Default as set forth in Section 10.0 et seq. of this Agreement, and to secure the one-year guarantee and Warranty of the applicable DIF Improvements, the Contractor shall provide City a faithful performance bond in an amount which sum shall be not less than one hundred percent (100%) of the Estimated Costs. City may, in its reasonable discretion, partially release a portion or portions of the Security provided under this Section as the applicable DIF Improvements or portion thereof are accepted by City, provided that the Contractor is not in default on any provision of its contract with Owner and the total remaining security is not less than ten percent (10%) of the Estimated Costs. All security provided under this Section shall be released at the end of the Warranty period, or any extension thereof as provided in Section 8.0 of this Agreement, provided that Owner is not in Default on any provision of this Agreement.
11.2 Labor & Material Bond. To secure payment to the Contractors, subcontractors, laborers, materialmen, and other persons furnishing labor, materials, or equipment for performance of the DIF Improvements, the Contractor shall provide City a labor and materials bond in an amount which sum shall not be less than one hundred percent (100%) of the Estimated Costs. The Security provided under this Section may be released by written authorization of City by passage of time within which claims of lien are required to be recorded under Civil Code sections 8410 et seq. The amount of such security shall be reduced by the total of all stop notice or mechanic’s lien claims of which City is aware, plus an amount equal to ten percent (10%) of such claims for reimbursement of City’s anticipated administrative and legal expenses arising out of such claims.
11.3 Additional Requirements. The surety for any surety bonds provided as Security shall have a current A.M. Best rating of at least “A” and FSC-VIII, shall be licensed to do business in California, and shall be satisfactory to City in its reasonable discretion. As part of the obligation secured by the Security and in addition to the face amount of the Security, Owner, the Contractor, or the surety shall secure the costs and reasonable expenses and fees, including reasonable attorney’s fees and costs, incurred by City in enforcing the obligations of this Agreement. Owner, the Contractor, and the surety shall stipulate and agree that no change, extension of time, alteration, or addition to the terms of this Agreement, the DIF Improvements, or the plans and specifications for the DIF Improvements shall in any way affect its obligation on the Security.
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11.4 Evidence and Incorporation of Security. Evidence of the Security shall be provided on the forms set forth in Exhibit “B” to this Agreement, unless other forms are deemed acceptable by City, and when such forms are completed to the satisfaction of City, the forms and evidence of the Security shall be attached hereto as Exhibit “B” and incorporated herein by this reference.
12.0 Indemnification. Owner shall defend, indemnify, and hold harmless City, its elected officials, employees, and agents from any and all actual or alleged claims, demands, causes of action, liability, loss, damage, or injury to property or persons, including wrongful death, whether imposed by a court of law or by administrative action of any federal, state, or local governmental agency, arising out of, or incident to, any acts, omissions, or willful misconduct of Owner, its employees, contractors, subcontractors, or agents in connection with, or arising out of, or in any way related to, or caused by, the DIF Improvements or their condition prior to City’s approval and acceptance of the DIF Improvements (“Claims”). This indemnification includes, without limitation, the payment of all penalties, fines, judgments, awards, decrees, attorney’s fees, and related costs or expenses, and the reimbursement of City, its elected officials, employees, and/or agents for all legal expenses and costs incurred by each of them. This indemnification excludes only such portion of any Claim that is caused by, related to, or arising out of the negligence or willful misconduct of City or its elected officials, officers, employees, volunteers or agents.
Owner’s obligation to indemnify shall survive the expiration or termination of this Agreement and shall not be limited or restricted to insurance proceeds, if any, received by City, its elected officials, employees, or agents. The City shall provide prompt notice to Owner of any Claims, and City shall have the right to select the counsel representing City with respect to the Claims.
Notwithstanding the foregoing, Owner’s indemnity obligations specified in this Section 12.0 with respect to any given DIF Improvement shall terminate one (1) year after City accepts the DIF Improvement.
13.0 Insurance. The insurance requirement under this Agreement shall be the same as the insurance requirements in any approved Subdivision Improvement Agreements entered into by City and Owner in connection with a final map.
14.0 DIF and other Credits; Reimbursements.
14.1 DIF Credit Offset Against DIF. Under the Development Agreement and in consideration for Owner’s obligation under this Agreement for the delivery of DIF Improvements, Owner shall be entitled to receive a credit for its DIF Improvement Costs against the DIF for the Project. Owner’s Costs for delivery of the DIF Improvements shall include all costs actually and reasonably incurred by Owner, and verified by the City as reasonably incurred, that the Contractor, and third party consultants or subcontractors incurred in the design, permitting, land and right of way, construction, installation, management, and related activities for delivery of the DIF Improvements both before and after the date of execution of this Agreement but after the date of the Development Agreement (“Costs”), except that Costs shall exclude any overhead or debt service. With regard to the SLB Extension, the Costs shall include the portion of the Accelerated Transportation DIF Payment that was not refunded to Owner. Owner shall be entitled to, and the City shall grant to Owner, a credit against the DIF (“DIF Credit”) in an amount equal to the lesser of: (a) the Costs or (ii) the total amount of the DIF to be imposed and levied on the Project. The grant of DIF Credit under this Agreement shall not preclude the financing of the DIF Improvement 1306
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through a Community Facilities District (“CFD”) established for all or any portion of the Project.
The determination of DIF Credit will be determined by the City in good faith with input from Owner on a quarterly or other basis.
14.2 Evidence of Costs of DIF Improvements. Before the City’s issuance of any certificate of occupancy for the Project for which the applicable DIF Improvement is needed, Owner shall provide to City reasonably satisfactory evidence of the Costs of each of the DIF Improvements for that portion of the DIF Improvements under construction that would equal or exceed the applicable DIF fees (“Estimated Costs”). City may consider the following evidence of Costs provided that clearly relate to and are determined by City to be reasonable incurred and related to DIF Improvements in the Project Phase: (a) Owner and/or Contractor’s invoices that verify the work completed and percentage of work performed; (b) invoices from and payments made to design professionals; and (c) invoices or assessments and payments made for permits.
Following substantial completion and before City’s acceptance of the DIF Improvements, Owner may elect to pay to City the total amount of the DIF due to be imposed and levied on the Project in satisfaction of the precondition for issuance of certificates of occupancy, minus the Estimated Costs incurred as of that date. Thereafter, upon acceptance of the DIF Improvements by City and Owner’s provision of evidence of the actual Costs, City shall refund to Owner the amount of DIF paid that should have been covered by the DIF Credit within forty-five (45) calendar days.
14.3 DIF Reimbursement. If the dollar amount of the Costs exceeds the DIF applicable to the Project or a portion of the Project, Owner will be deemed to have fully satisfied the DIF as to that portion and is entitled to a reimbursement from City for the Costs in excess of the applicable DIF (the “Excess Costs”) but only for Costs of a DIF Improvement that is identified in a DIF nexus study (“Qualified Excess Costs”) and only if and to the extent that the City receives development impact fee funds from other developers that are found to have contributed to the need for the DIF Improvement. The obligation of the City to collect and pay Owner Qualified Excess Costs from other developers in the City shall terminate with the Development Agreement.
Notwithstanding any other provision of this Agreement, City’s assistance with reimbursement related to the DIF Improvements is limited to the Qualified Excess Costs which shall, in any event, not exceed the Costs of the DIF Improvements. City shall not under any circumstances be obligated to contribute, and shall not contribute additional assistance to the DIF Improvements, other than as expressly provided for in this Agreement. Under no circumstance shall the City pay any Excess Cost to Owner from the general fund, special funds or other funds of the City, unless the City, in its sole and absolute discretion, chooses to do so. If any audit by the Parties or the California Department of Industrial Relations determines that any excess amount has been credited, reimbursed, or otherwise contributed by City, then Owner shall reimburse City for such excess amount. This paragraph shall be interpreted consistently with California Labor Code Section 1720(c)(2) to accomplish the Parties’ intent that the Project is a private development exempt from payment of prevailing wages to the full extent permitted under California Labor Code Section 1720(c)(2), and any other applicable provisions and City maintains no proprietary interest in the Project; provided, however, that Owner shall pay prevailing wage for the DIF Improvements.
14.4 Oversized Public Improvements; Fair Share Payments; Fee Credits.
14.4.1 Construction of Oversized Public Improvements. The Parties acknowledge that certain of the Public Improvements to be constructed by Owner may, to a greater 1307
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or lesser extent, constitute Oversized Improvements and that owners of other properties will benefit from such Oversized Improvements. For purposes of Section 14.4 of this Agreement, “Oversized Improvements” means any Public Improvement with respect to which the Parties agree that Owner’s direct or indirect financial contribution exceeds its Fair Share of the cost of the Public Improvement or portion thereof reasonably attributable to the Project or phase thereof.
Exhibit “F” of the Development Agreement lists all of the Public Improvements; not all of these Public Improvements are Oversized Improvements. In addition, City agrees that, in recognition of the regional nature of certain street and, possibly, other improvements made to the Property by Owner, City shall use its best efforts subject to limitations on its legal authority to ensure that owners of all property that will reasonably benefit from the Public Improvements, as determined in accordance with Section 14.4.2 of this Agreement (“Benefitted Properties”), will pay their Fair Share for such Public Improvements, either directly or through subdivision, reimbursement, or other agreements, between such owners and City, or between owners of Benefitted Properties.
14.4.2 Fair Share Determination. For purposes of Section 14.4 of this Agreement, “Fair Share” shall mean the amount if any, of Owner’s contribution to the cost of any Public Improvements, and unless otherwise provided in Exhibit “I” of the Development Agreement, shall be calculated for the Project based on the Project’s proportion of the benefit conferred on all Benefitted Properties, as established by a regional benefit study prepared by independent professional consultants experienced in the preparation of “zone of benefit” studies.
The consultants shall be selected by City.. City shall afford Owner, and any other involved developer(s), the opportunity to review and comment on the tentative conclusions, and such comments shall be taken into consideration by City in its review. The costs of any such study shall be deemed to be a part of the cost of the Oversized Improvement to which it pertains. The fees and costs of the consultants shall be paid, initially, by the Owner or if possible from other developers then involved. The Parties recognize, however, that it will not always be possible to implement or achieve such goals, given the size, timing of development and nature of the other Benefitted Properties, and nothing herein shall be deemed to require City to fund or reimburse any portion of the excess costs other than from funds collected expressly for such purpose, or to pay for the cost of any such improvements or any portions thereof out of its general, special or other fund revenues.
14.4.3 Fee Credits. In accordance with Section 5.12.3 of the Development Agreement, to the extent a Public Improvement is included in the DIF Nexus Study, City shall recognize and apply in lieu credit against any and all fees, for and equal to the Costs to provide the Public Improvement and/or dedications made in the development of the Project by Owner, even if such improvement was funded by a CFD or other alternative financing mechanism, and for which the fees would otherwise be imposed in accordance with City ordinances and resolutions; provided, however, that such in lieu credit shall not exceed the amount established by City’s DIF program for construction of such improvements and/or dedications.
14.4.4 Limits on Public Funds. Notwithstanding anything else to the contrary herein, the parties acknowledge and agree that in no event shall the cumulative total of public funds, as defined in California Labor Code Section 1720(b), received by Owner with respect to the Project exceed the amount of the conditioned public improvements imposed on the Project as part of the Development Approvals.
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14.5 Credits and Reimbursements for Dedication Properties.
14.5.1 Dedication of Fire Station Property and Water Tank Property.
Although not needed for the Project, the Parties acknowledge that in the future the City or the County may choose to construct a fire station on the Fire Station Property and a water tank on the Water Tank Property. Owner shall reserve the Fire Station Property and Water Tank Property and shall dedicate such properties to the City.. After acquiring the Fire Station Property and Water Property, the City or County shall not use the Fire Station Property for any use other than a fire station or the Water Tank Property for anything other than a water tank. Under no circumstances shall Owner be obligated to pay for the construction of the fire station or water tank.
15.0 Miscellaneous.
15.1 Assignment. Owner may assign all or any portion of its rights under this Agreement, including any DIF Credits under this Agreement, following notice to City.
15.2 Relationship between the Parties. The Parties hereby mutually agree that this Agreement shall not operate to create the relationship of partnership, joint venture, or agency between City and Owner. Further, the Parties mutually agree that the Contractor is exclusively and solely under the control and dominion of Owner. Nothing herein shall be deemed to make Owner or its Contractor an agent or contractor of City.
15.3 Warranty as to Property Ownership; Authority to Enter Agreement. Owner hereby warrants that it owns fee title to the Property and that it has the legal capacity to enter into this Agreement. Each Party warrants that the individuals who have signed this Agreement have the legal power, right, and authority make this Agreement and bind each respective Party.
15.4 Prohibited Interests. Owner warrants that it has not employed or retained any company or person, other than a bona fide employee working solely for Owner, to solicit or secure this Agreement. Owner also warrants that it has not paid or agreed to pay any company or person, other than a bona fide employee working solely for Owner, any fee, commission, percentage, brokerage fee, gift, or other consideration contingent upon the making of this Agreement. For breach of this warranty, City shall have the right to rescind this Agreement without liability.
15.5 Notices. All notices, demands, invoices, and written communications shall be in writing and delivered to the following addresses or such other addresses as the Parties may designate by written notice:
To City: City of Banning
Attn: Public Works Director
99 E. Ramsey Street
Banning, CA 92220
Fax No. (951) 922-3141
1309
EXHIBIT “G-2”
-14-
To Owner: NP Banning Industrial, LLC
Attn: J.J. Jenkins
12977 N. Outer Forty Rd., Suite 203
St. Louis, MO 63141
Email: [email protected]
Depending upon the method of transmittal, notice shall be deemed received as follows: by facsimile, as of the date and time sent; by messenger, as of the date delivered; and by reputable overnight mail, as of two (2) days after deposit in the overnight mail.
15.6 Cooperation; Further Acts. The Parties shall fully cooperate with one another, and shall take any additional acts or sign any additional documents as may be necessary, appropriate, or convenient to attain the purposes of this Agreement.
15.7 Construction; References; Captions. It being agreed the Parties or their agents have participated in the preparation of this Agreement, the language of this Agreement shall be construed simply, according to its fair meaning, and not strictly for or against any Party. Any term referencing time, days, or period for performance shall be deemed calendar days and not work days. All references to Owner include all personnel, employees, agents, and contractors of Owner, except as otherwise specified in this Agreement. All references to City include its elected officials, officers, employees, agents, and volunteers, except as otherwise specified in this Agreement. The captions of the various articles and paragraphs are for convenience and ease of reference only, and do not define, limit, augment, or describe the scope, content, or intent of this Agreement.
15.8 Amendment; Modification. No supplement, modification, or amendment of this Agreement shall be binding, unless executed in writing and signed by both Parties.
15.9 Waiver. No waiver of any Default shall constitute a waiver of any other Default or breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or service voluntarily given or performed by a Party shall give the other Party any contractual right by custom, estoppel, or otherwise.
15.10 Binding Effect. Each and all of the covenants and conditions shall be binding on and shall inure to the benefit of the Parties, and their successors, heirs, personal representatives, or assigns. This section shall not be construed as an authorization for any Party to assign any right or obligation.
15.11 No Third Party Beneficiaries. There are no intended third party beneficiaries of any right or obligation assumed by the Parties.
15.12 Invalidity; Severability. If any portion of this Agreement is declared invalid, illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions shall continue in full force and effect.
15.13 Governing Law. This Agreement shall be construed in accordance with and governed by the laws of the State of California.
1310
EXHIBIT “G-2”
-15-
15.14 Time is of the Essence. Time is of the essence in this Agreement, and the Parties agree to execute all documents and proceed with due diligence to complete all covenants and conditions.
15.15 Counterparts. This Agreement may be signed in counterparts, each of which shall constitute an original and which collectively shall constitute one instrument.
15.16 Entire Agreement. This Agreement and the Development Agreement contain the entire agreement between City and Owner with respect to DIF Credits and supersede any prior oral or written statements or agreements between City and Owner.
15.17. Exhibits. All Exhibits to this Agreement are hereby incorporated in full by reference as though set forth in full, provided that in the event of any material conflict between any Exhibit or portion thereof and any provision of this Agreement, the provisions of this Agreement shall control.
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day and year first above written.
(Signatures on next page)
1311
EXHIBIT “G-2”
-16-
OWNER
NP Banning Industrial, LLC, a Missouri
Limited Liability Company
____________________________________
By:
Its:
____________________________________
By:
Its:
APPROVED AS TO FORM:
____________________________________
By:
Attorneys for NP Banning Industrial, LLC
CITY OF BANNING
____________________________________
By: Richard Royce, Mayor
ATTEST:
____________________________________
By: Caroline Patton
Administrative City Clerk
APPROVED AS TO FORM:
____________________________________
By: John Pinkney,
City Attorney
1312
EXHIBIT “G-2”
-17-
CERTIFICATE OF ACKNOWLEDGMENT OF NOTARY PUBLIC
State of California )
)ss.
County of ______} )
On before me, , Notary Public, personally
appeared ,who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_________________________________
Signature
(seal)
My commission expires: _____________
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.
1313
EXHIBIT “A”
LEGAL DESCRIPTION OF PROPERTY
[ATTACHED BEHIND THIS PAGE]
1314
EXHIBIT “B”
FORMS FOR SECURITY
[ATTACHED BEHIND THIS PAGE]
1315
BOND NO. _________________
INITIAL PREMIUM: _________________
SUBJECT TO RENEWAL
PERFORMANCE BOND
WHEREAS, the City of Banning (“City”) has executed an agreement with NP Banning Industrial, LLC (hereinafter “Owner”), requiring Owner to perform certain work consisting of, but not limited to, furnishing all labor, materials, tools, equipment, services, and incidentals for the design, construction, and/or installation of public improvements (hereinafter the “Work”);
WHEREAS, the Work to be performed by Owner is more particularly set forth in that certain DIF Credit Implementation Agreement dated _______________, (hereinafter the “Agreement”); and
WHEREAS, the Agreement is hereby referred to and incorporated herein by this reference; and
WHEREAS, Owner or its contractor is required by the Agreement to provide a good and sufficient bond for performance of the Agreement, and to guarantee and warranty the Work constructed thereunder.
NOW, THEREFORE, we the undersigned, , as Principal and , a corporation organized and existing under the laws of the State of and duly authorized to transact business under the laws of the State of California, as Surety, are held and firmly bound unto the CITY in the sum of
($_____________), said sum being not less than one hundred percent (100%) of the total cost of the Work as set forth in the Agreement, we bind ourselves, our heirs, executors and administrators, successors and assigns, jointly and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION is such, that if Owner and its contractors, or their heirs, executors, administrators, successors, or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions, agreements, guarantees, and warranties in the Agreement and any alteration thereof made as therein provided, to be kept and performed at the time and in the manner therein specified and in all respects according to their intent and meaning, and to indemnify and save harmless City, its officers, employees, and agents, as stipulated in the Agreement, then this obligation shall become null and void; otherwise it shall be and remain in full force and effect.
As part of the obligation secured hereby, and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorney’s fees, incurred by City in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered. 1316
The said Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration, or additions to the terms of the said Agreement or to the Work to be performed thereunder or the specification accompanying the same shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration, or addition to the terms of the Agreement or to the Work.
IN WITNESS WHEREOF, we have hereto set our hands and seals this _____ day on ______________________________________, 20___.
Principal
By:____________________________________
President
Surety
By:____________________________________
Attorney-in-Fact
1317
CERTIFICATE OF ACKNOWLEDGMENT OF NOTARY PUBLIC
State of California )
)ss.
County of ______} )
On before me, , Notary Public, personally
appeared ,who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_________________________________
Signature
(seal)
My commission expires: _____________
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.
1318
CERTIFICATE AS TO CORPORATE PRINCIPAL
________________________________________, certify that I am the Secretary of the corporation named as principal in the attached bond, that who signed the said bond on behalf of the principal was then of said corporation; that I know his signature, and his signature thereto is genuine; and that said bond was duly signed, sealed and attested for and in behalf of said corporation by authority of its governing Board.
(Corporate Seal)
Signature:
Date:
NOTE: A copy of the power of attorney to local representatives of the bonding company may be attached hereto.
1319
BOND NO.
INITIAL PREMIUM:
SUBJECT TO RENEWAL
LABOR & MATERIAL BOND
WHEREAS, the City of Banning (“City”) has executed an agreement with NP Banning Industrial, LLC (hereinafter “Owner”), requiring Owner to perform certain work consisting of, but not limited to, furnishing all labor, materials, tools, equipment, services, and incidentals for the design, construction, and/or installation of public improvements (hereinafter “Work”);
WHEREAS, the Work to be performed by Owner is more particularly set forth in that certain DIF Credit Implementation Agreement dated _______________, (hereinafter the “Agreement”); and
WHEREAS, Owner or its contractor is required to furnish a bond in connection with the Agreement providing that if Owner or any of his or its contractors shall fail to pay for any materials, provisions, or other supplies, or terms used in, upon, for or about the performance of the Work contracted to be done, or for any work or labor done thereon of any kind, or for amounts due under the provisions of 3248 of the California Civil Code, with respect to such work or labor, that the Surety on this bond will pay the same together with a reasonable attorney’s fee in case suit is brought on the bond.
NOW, THEREFORE, we the undersigned, as __________________ Principal and __________________, a corporation organized and existing under the laws of the State of_________________ and duly authorized to transact business under the laws of the State of California, as Surety, are held and firmly bound unto the City and to any and all material men, persons, companies or corporations furnishing materials, provisions, and other supplies used in, upon, for or about the performance of the said Work, and all persons, companies or corporations renting or hiring teams, or implements or machinery, for or contributing to said Work to be done, and all persons performing work or labor upon the same and all persons supplying both work and materials as aforesaid, the sum of ($_____________), said sum being not less than one hundred percent (100%) of the total amount payable by Owner under the terms of the Agreement, for which payment well and truly to be made, we bind ourselves, our heirs, executors and administrators, successors and assigns jointly and severally, firmly by these presents.
THE CONDITION OF THIS OBLIGATION IS SUCH that if Owner or its contractors, or their heirs, executors, administrators, successors, or assigns, shall fail to pay for any materials, provisions, or other supplies or machinery used in, upon, for or about the performance of the Work contracted to be done, or for work or labor thereon of any kind, or fail to pay any of the persons named in California Civil Code Section 9100, or amounts due under the Unemployment Insurance Code with respect to work or labor performed by any such claimant, or for any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of the contractor and his subcontractors pursuant to Section 13020 of the Unemployment Insurance Code with respect to such work and labor, and all other applicable laws of the State of California and rules and regulations of its agencies, then said Surety will pay the same in or to,an amount not exceeding the sum specified herein. 1320
In case legal action is required to enforce the provisions of this bond, the prevailing party shall be entitled to recover reasonable attorneys' fees in addition to court costs, necessary disbursements and other consequential damages. In addition to the provisions hereinabove, it is agreed that this bond will inure to the benefit of any and all persons, companies and corporations entitled to make claims under Sections 8024, 8400, 8402, 8404, 8430, 9100 of the California Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this bond.
The said Surety, for value received, hereby stipulates and agrees that no change, extension of time, alteration or additions to the terms of the Agreement or to the Work to be performed thereunder or the specification accompanying the same shall in any way affect its obligations on this bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Agreement or to the Work.
IN WITNESS WHEREOF, we have hereto set our hands and seals this _____ day on ______________________________________, 20___.
Principal
By:____________________________________
President
Surety
By:____________________________________
Attorney-in-Fact
1321
CERTIFICATE OF ACKNOWLEDGMENT OF NOTARY PUBLIC
State of California )
) ss.
County of _______} )
On before me, , Notary Public, personally
appeared ,who proved to me on the
basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
_________________________________
Signature
(seal)
My commission expires: _____________
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.
1322
CERTIFICATE AS TO CORPORATE PRINCIPAL
________________________________________, certify that I am the Secretary of the corporation named as principal in the attached bond, that who signed the said bond on behalf of the principal was then of said corporation; that I know his signature, and his signature thereto is genuine; and that said bond was duly signed, sealed and attested for and in behalf of said corporation by authority of its governing Board.
(Corporate Seal)
Signature:
Date:
NOTE: A copy of the power of attorney to local representatives of the bonding company may be attached hereto.
1323
EXHIBIT “C” to
EXHIBIT “G-2”
-1-
EXHIBIT “C”
BIDDING AND CONTRACTING, REQUIREMENTS FOR DIF IMPROVEMENTS With respect to construction contracts awarded for DIF Improvements after approval of this Agreement, bids for construction shall be solicited from at least three qualified contractors, provided that three qualified contractors are reasonably available. Owner may also directly solicit bids. The bid package may consist of preliminary plans and specifications.
The bidding response time shall be not less than ten (10) business days.
The City’s Public Works Director shall be provided a copy of the tabulation of bid results before the award of the contract.
Contract(s) for the construction of the DIF Improvements shall be awarded to the qualified contractor(s) submitting the lowest bid(s), as determined by Owner.
The contractor to whom a contract is awarded shall be required to pay not less than the prevailing rates of wages pursuant to Labor Code Sections 1770, 1773 and 1773.1. A current copy of applicable wage rates shall be on file in the Office of the City Clerk, as required by Labor Code Section 1773.2
The contractor shall be required to provide certified payrolls to Owner and shall furnish copies of those records to the City upon request. 1324
EXHIBIT “G
-2”
-1-
1325
EXHIBIT “H”
-1-
Development Agreement No.___
EXHIBIT “H”
DEVELOPMENT FEES IN EFFECT AS OF EFFECTIVE DATE
City of Banning Development Impact Fees1
Land Use
Category
Police
Facilities
Fire
Protection
Facilities
Parkland
and
Parks
General
City
Facilities
Wastewater
Facilities
Transportation
DIF
Electric
Facilities
Water
Facilities2
Nonresidential
– (Fee per
Square Foot)
Commercial $ 0.48 $ 0.65 N/A $ 0.47 $ 2.29 $ 10.06 $ 2.36 Office 0.63 0.85 N/A 0.62 0.80 3.29 2.21
Industrial 0.23 0.32 N/A 0.23 0.87 1.60 1.27
¾” $ 6,094
1” 10,156
1-1/2” 20,312
2” 32,500
3” 60,937
4” 101,562
6” 203,123
8” 568745
1 Represents the City of Banning Development Impact Fees per square foot for nonresidential land uses approved by City Council on February 24th, 2026 per Resolution No. 2026-24.
2 Water Facilities fee is now charged based on meter sizes.
City of Banning Development Impact Fees (cont’d.)
Land Use Category TUMF3 MSHCP3
Industrial $2.33 per square foot
$20,191 per acre
Class A/B Office $2.45 per square foot
Retail $7.72 per square foot
Service $4.89 per square foot
3 TUMF and MSHCP subject to annual increases.
1326
EXHIBIT “I”
-1-
Development Agreement No.___
EXHIBIT “I”
FAIR SHARE PAYMENTS
1327
1 1328
i 1329
ii
The City of Banning is at an inflection point. With
the addition of three new council members last
winter, the City Council is essentially a “new”
governing body. With that newness comes a new
set of opinions and experiences and a certain zeal
to make things better.
This is the perfect time to set the direction and
priorities for the entire City. This Council just
finished its one-year anniversary as a team. Thus,
the newer members have a year’s worth of
interacting with the City organization and their
community. They have more informed opinions
about the City organization and how everyone
might move forward in unison to meet the
challenges of today and tomorrow.
Self-Reflection
A Strategic Plan is a powerful tool to do just that! It is structured to be first, self-reflective, where
departments discuss their current Strengths and
Weaknesses. And next, they look externally and list
the future Opportunities and Threats. Taken
together, the strengths and opportunities are
variables that can make things better for serving
their mission. The other two variables are barriers
to mission success, and they may threaten the
entire organization or impact the greater
community. We are calling these four important
variables, the SWOTs. These SWOTs can be found
as a separate Appendix A in this plan.
Setting Future Direction and Priorities For The
Futures
The next step addresses: what is it that we do with
this information? The Council thoroughly listened,
discussed, and decided which SWOT (policy) issues
they wish to tackle and in what (priority) order.
These are articulated in terms of Strategic Initiatives.
The goal is for these Initiatives to be completed, or
at least started in the next five years. And because
these are classified as policy issues, there would be
the appropriate Council involvement in their various
phases of implementation.
And when SWOTs of an administrative nature are
not addressed in a timely manner, sometimes they
become (policy) issues for the Council. As a result,
the Council provided recommendations on these
SWOTs as well; however, the City Manager’s
judgement is deferred to in tackling and adjusting
these priorities. These variables will be addressed as
performance goals between the City Manager (CM)
and department heads and ultimately between the
CM and Council.
Converting Ideas to Action!
As the Council approves this Strategic Plan and
“Policy” Initiatives of the City, the CM has provided
an Implementation Phase. This Phase takes the top
priority (Tier 1) Strategic (Policy) Initiatives and
provides more details on how and when the CM
might complete these initiatives. We call this
document the Strategic Initiative Charter. It is the
first step in converting an idea to actionable steps.
After review by the City Council, the Charter gives
staff the direction and authority to act. As the CM
works into the next priority level (Tier 2), it is
expected a new Charter will be developed and
shared for each Initiative.
Taken together, the Strategic Goals and
Implementation Phase will be Banning’s Strategic
Plan—Banning 2030, Designing our Future TODAY!
FOREWORD
1330
iii
TABLE OF CONTENTS
Page
FOREWORD............................................................................................................................................................ ii BANNING VISION STATEMENT......................................................................................................................1 BANNING MISSION STATEMENT .................................................................................................................2 STRATEGIC PLAN OVERVIEW.......................................................................................................................3 TRANSLATING GOALS TO ACTION............................................................................................................4 STRATEGIC INITIATIVES—POLICY ..............................................................................................................5 STRATEGIC INITIATIVES—ADMINISTRATION........................................................................................9 IMPLEMENTATION PHASE............................................................................................................................. 12 Strategic Initiatives Charters ..................................................................................................15 1a. Emergency Operations Plan (EOP)................................................................15 1b. PD Strategic Excellence Initiative....................................................................18 2a. Animal Shelter and Control Services .......................................................... 21 2b. Address Homelessness .......................................................................................24 2c. Wastewater Treatment & Recycled Water Upgrades....................28 2d. Streets Maintenance Pavement Management Plan (PMP) .......32 3a. New Economic Development Plan (EDP) ................................................36 3b. Inventory and Activate Underutilized Land in the Downtown ..39 4a. Workout Plan to Fiscal Sustainability.........................................................43 4b. Evaluation of Utility Billing Program............................................................46 4c. PD’s Growth Strategy.............................................................................................50 4d. Strategic Plan Implementation .....................................................................52 Strategic Initiatives Dashboard ...........................................................................................54 APPENDIX A - SWOTs...................................................................................................................................55 1331
1 BANNING
VISION
STATEMENT
The City of Banning promotes and supports
a high quality of life that ensures a safe
and friendly environment, fosters new
opportunities and provides responsive, fair
treatment to all and is the pride of its
citizens.
1332
2 BANNING
MISSION
STATEMENT
Our mission is to provide our
residents with a safe,
pleasant, and prosperous
environment in which to live,
work, and play, in a fiscally
responsible, citizen-friendly,
and transparent manner.
1333
3 STRATEGIC
PLAN
OVERVIEW
Vision Statement
Mission Statement
Strategic Goals
Ensuring Public Safety
Protecting and Improving Quality of Life
Strengthen The Local Economy
Maintain Effective and Efficient Services
Strategic Initiatives
Policy
Administration
Priorities
Tier 1—Now!
Tier 2
Tier3
Implementation Phase
Strategic Initiative Charters
1334
4 This Plan of action cannot be a “blue sky” exercise. Rather, it must translate Banning’s broad Vision and Mission
Statements to more specific Strategic Goals and
ultimately to action (i.e., Strategic Initiatives). These planned actions should produce tangible improvements
to the City organization and community.
The background and rationale for these Strategic
Initiatives can be found in Appendix A. This is where the Banning departmental SWOTs are described (the
foundation for Strategic Initiatives).
Given the sheer number, these Policy Initiatives are
categorized by Strategic Goals and also prioritized into Tiers.
TRANSLATING GOALS TO ACTION
TRANSLATING
GOALS TO
ACTION
1335
5 • 1a. Create Banning’s Emergency Operation Plan—City
Manager
• 1b. Provide One-Time Resources and Independently
Evaluate the Police Department—Human Resources and
Police
1st Tier Policy
Related Initiatives
STRATEGIC GOAL 1—ENSURING PUBLIC SAFETY
STRATEGIC
INITIATIVES—
POLICY
1336
6 • 2a. Address The Lack of Animal Control and Shelter—City Manager
• 2b. Address Homelessness—City Manager
• 2c. Complete Wastewater Treatment Plan & Recycled Water Upgrades—Public Works
• 2d. Develop Formal Preventative Maintenance Plan (For Streets)—Public Works1
1st Tier Policy
Related Initiatives
• 2g. Update Engineering Standards. & Specifications for Development—Public Works
• 2h. Seek Additional Funding for Streets Pavement Mgmt.
Plan—Public Works
• 2i. Fund the Updated Parks and Recreation Master Plan— Parks & Recreation
• 2j. Enhance School Partnerships for Parks & Recreation 3rd Tier Policy
Related Initiatives
• 2e. Update Integrated Master Plan (IMP) & Evaluate
Water/Wastewater User Rate Structure—Public Works
• 2f. Develop a Pavement Management. Plan and Policies
(Streets)—Public Works
2nd Tier Policy
Related Initiatives
STRATEGIC GOAL 2—PROTECTING AND IMPROVING
QUALITY OF LIFE
1337
7 • 3a. Develop New Economic Development (ED) Plan—City Manager
• 3b. Inventory & Activate Underutilized Land in Downtown— City Manager & Community Development
1st Tier Policy
Related Initiatives
STRATEGIC GOAL 3—STRENGTHEN LOCAL
ECONOMY
1338
8 STRATEGIC GOAL 4—MAINTAIN EFFECTIVE
& EFFICIENT SERVICES
• 4a. Develop and Implement Banning’s Financial Workout Plan to Sustainability—Finance and City Manager
• 4b. Do In-Depth Evaluation of the City’s Utility Billing Program and Tools—Finance
• 4c. Develop & Implement a Proactive Outreach & Hiring Program For Police—Human Resources and Police
• 4d. Strategic Plan Implementation—City Manager
1st Tier Policy
Related Initiatives
• 4m. Make Cyber Security a Core Priority of the Organization- -Finance 3rd Tier Policy
Related Initiatives
• 4e. Develop New Banning Organizational Culture—City
Manager and Human Resources
• 4f. Assessment of the Risk Management Program—Human
Resources
• 4g. Independent Review of Purchasing Process—Finance
• 4h. Develop More Accessible Purchasing Process for
Small/Local Vendors--Finance
• 4i. Develop/Implement Banning’s IT Strategic Plan—Finance • 4j. Achieve BEU Fiscal Solvency and Sustainability—Public Works and City Manager
• 4k. Streamline Permitting, Bus. Licensing and Customer Svc.
Systems—Community Development
• 4l. Develop Plan to Enhance Staffing Capacity, Stability, and Institutional Knowledge Retention—Human Resources &
Community Development
2nd Tier Policy
Related Initiatives
1339
9 Since the dividing line between Policy related initiatives (within the Council purview) and the Administration
related initiatives (within the City Manager purview) is very grey at times, especially when Administrative issues are not properly managed, some initiatives morph into
acute challenges for the Council.
Thus, these administrative-related solutions or initiatives became “fair play” for Council and this Strategic Plan.
The City Council discussed and recommended priorities
for these Strategic Initiatives as well. While their voice on these matters is noted, it is the City Manager that needs discretion and room to tackle these given the myriad
variables (e.g., staff capacity, the number of competing priorities, complexity, etc.).
STRATEGIC
INITIATIVES—
ADMINISTRATION
1340
10 1st Tier Administrative Initiatives
• 1a. Develop a Community Outreach Process—Police
GOAL 1—ENSURING PUBLIC SAFETY
GOAL 2—PROTECTING AND IMPROVING
QUALITY OF LIFE
1ST Tier Administrative Initiatives
• 2a. Complete Updated Parks and Recreation Master Plan— Parks & Recreation
• 2b. Evaluate Adding More Capacity for Road
Maintenance—Public Works
1st Tier Administrative Initiatives
• 3a. Complete Edison’s Wholesale Distribution Access
Tariff Agreement—Public Works
• 3b. As BEU Becomes Solvent, Ramp Up Capital Needs—
Public Works
• 3c. Develop and Implement Water Conservation
Program—Public Works
GOAL 3—STRENGTHEN LOCAL ECONOMY
1341
11 GOAL 4—MAINTAIN
EFFECTIVE &
EFFICIENT SERVICES 1st Tier Administrative Initiatives
• 4a. Develop a Written Claims and
Litigation Strategy—City Attorney
• 4b. Create a Coordinated Program for
Performance Management—Human
Resources & City Attorney
• 4c. Develop City Employee Transition
Plan For Impending Turnover—Human
Resources
• 4d. Elevate the Utility Billing Function in
Finance—Finance
• 4e. Address the Software Issues and IT
Support That is Behind the Current Utility
Billing Crisis—Finance
• 4f. Aggressively Recruit and Staff
Finance—Accounting with Perm. Staff—
Finance & Human Resources
• 4g. Develop and Implement System for
Monitoring and Managing Cash Flow—
Finance
• 4h. After Completing UB Review (see
above) Buy and Implement New UB
System—Finance and Public Works
2nd Tier Administrative Initiatives
• 4i. Conduct Outreach to Our Insurance
JPAs—Human Resources & City Attorney
• 4j. Develop and Implement Leave
Management Program—Human
Resources & City Attorney
• 4k. Restructure Vendor Onboarding to
Speed the Process—Finance & City
Attorney
• 4l. Hexavalent Chromium Compliance
Plan Implementation—Public Works
3rd Tier Administrative Initiatives
• 4m. Data Cleansing and Migration
Strategy—Finance/IT
• 4n. Consider Changes to the IT Manager
Reporting Relationship—City Manager &
Finance
• 4o. Convene Interdepartmental Team &
Develop a More Responsive Purchasing
Process for Emergencies—Finance
• 4p. Replacement of Small Diameter
Pipelines and New Potable Wells—Public
Works
• 4q. Complete a Facility Condition
Assessment—Public Works
• 4r. Address Facility Deferred Maintenance
Issues—Public Works
• 4s. Seek Greater GIS Integration with
Asset Management Software (AMS)—
Public Works
• 4t. More Help in Implementing Newer
Stormwater Requirements—Public Works
• 4u. Move Landscape Services to
Contractors—Public Works
• 4v. Development of Career Paths—
Parks/Recreation & Human Resources
• 4w. Explore and Implement Surge
Capacity—Community Development
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12 This Implementation Phase of the Plan is to ensure Banning converts this Strategic Plan to ACTION and that the City Council and staff generally agree on HOW and WHEN to roll out the Strategic Initiatives.
Some of the top priority (1st Tier) Strategic (Policy) Initiatives have already begun, and a Charter was developed for each one (see below). The Charter outlines the How and When along with other important variables. Once this Plan is approved by Council (along with these Charters), staff has the authority to move forward on them.
The City Manager will report out progress on these Initiatives every three months for the first year and every six months thereafter. And as the City Manager wishes to initiate a 2nd or 3rd Tier Strategic (Policy) Initiatives, a Charter will be completed and forwarded to Council as well.
IMPLEMENTATION
PHASE
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13 1st Tier Policy Initiatives
• 1a. Create Banning’s Emergency Operation Plan—City Manager • 1b. Provide One-Time Resources and Independently Evaluate the Police Department— Human Resources and Police
STRATEGIC GOAL 1—ENSURING PUBLIC SAFETY
1st Tier Policy Initiatives
• 2a. Address The Lack of Animal Control and Shelter—City Manager • 2b. Address Homelessness—City Manager
• 2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades—Public Works • 2d. Develop Formal Preventative Maintenance Plan (For Streets)—Public Works STRATEGIC GOAL 2—PROTECTING AND IMPROVING QUALITY OF LIFE 1344
14 1st Tier Policy Initiatives
• 3a. Develop New Economic Development (ED) Plan—City Manager • 3b. Inventory & Activate Underutilized Land in Downtown—City Manager & Community Development
STRATEGIC GOAL 3—STRENGTHEN LOCAL ECONOMY
1st Tier Policy Initiatives
• 4a. Develop and Implement Banning’s Financial Workout Plan to Sustainability— Finance and City Manager
• 4b. Do In-Depth Evaluation of the City’s Utility Billing Program and Tools-- Finance • 4c. Develop & Implement a Proactive Outreach & Hiring Program For Police—Human Resources and Police
• 4d. Strategic Plan Implementation—City Manager
STRATEGIC GOAL 4—MAINTAIN EFFECTIVE & EFFICIENT SERVICES 1345
Strategic (Policy) Initiatives Charter
1a. Create Banning’s Emergency Operations Plan (EOP)
15 Which Council Strategic (Policy) Initiative does this Charter address? 1a. Create Banning’s Emergency Operations Plan (EOP)—City Manager What is the short title for this Strategic Goal?
Create Banning’s Emergency Operations Plan (EOP)
What is your proposed strategy to accomplish this Goal? Emergencies and disasters (e.g., fires, earthquakes, floods, prolonged power outage during the summer) take different forms that require different responses from impacted public agencies. Some disasters can be addressed within the confines of Banning’s capabilities while others may require County, State or Federal resource capabilities.
There is a uniform structure and process for how each level of government requests help and interacts with each other. And with this uniformity comes structures for incident response. Much of this is prescribed in the National Incident Management System (NIMS) and Incident Command System (ICS). This uniformity provides scalability and interoperability for Banning vis-à-vis other public agencies.
The City shall develop a Banning EOP that follows NIMS and is well coordinated with the Riverside County Emergency Management Department; thus, coordinated with other public partners. It will provide the framework to guide the City in responding to various emergencies and when to open the Emergency Operations Center (EOC). It will also provide guidance for Banning residents during emergencies.
How does this project address or make a positive impact on the stated SWOTs? How will you know?
This Strategic Initiative was the only one that did not emanate from the detailed discussions in the SWOTs section. Rather, the City Council added this as part of their day-long Strategic Plan Workshop in November 2025.
The Weakness and Threat is apparent. The City does not have an Emergency Operations Plan that guides the entire City’s response through a substantial disaster.
Granted, Police and Fire do have their own incident command systems, but there is Strategic (Policy) Initiatives Charter
1a. Create Banning’s Emergency Operations Plan (EOP)
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Strategic (Policy) Initiatives Charter
1a. Create Banning’s Emergency Operations Plan (EOP)
16 currently nothing that guides the entire City and when to seek help from other public agencies.
Who is the project sponsor?
City Manager
Who is the project lead?
Police or Fire Chief. However, there will likely be a contracted project manager for EOP development and training. One of the two Chiefs will be the City lead given their experience in the incident command system.
Other team members and roles?
The City management team (Directors) will be important team members given they guide their department’s response to an emergency, and they will likely fulfill a role in the EOP/EOC incident command structure.
Finally, once the EOP is understood and approved by the Council, everyone (all City staff and Council) will have an important role in its implementation.
Who are the stakeholders that can determine success or failure? Why? Riverside County, the City Council, all City staff and Banning residents will all have an important stake in this Plan.
Can this be accomplished within the current budget?
No
If not, how much will be needed?
Estimated at $50,000 for development of EOP plus ongoing cost for training.
Funding Source: Cost allocation to all departments.
What are the key milestones with dates leading to completion? Milestones Estimated Dates
1. Acquire EOP expertise through the County or from
other sources—will likely require Council action
May 1, 2026
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Strategic (Policy) Initiatives Charter
1a. Create Banning’s Emergency Operations Plan (EOP)
17 Milestones Estimated Dates
2. Project Commences June 1, 2026
3. Draft EOP is shared with Council September 1, 2026
4. Council adopts Banning’s EOP October 1, 2026
5. At the completion of item 4, City staff is trained,
and the first “tabletop” exercise commences.
February 1, 2027
What are the risks associated with this project? How do we manage these risks?
Because this EOP is designed for incidents that rarely occur, there is risk that this Initiative will constantly take a back seat to the plethora of issues being addressed by Banning right now.
To manage this, someone must be picked as the Champion of this project and it must be brought to the forefront whenever possible.
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Strategic (Policy) Initiatives Charter
1b. The Banning PD Strategic Excellence Initiative
18 Which Council Strategic (Policy) Initiative does this Charter address? 1b. Provide One-Time Resources and Independently Evaluate the Police Department— Human Resources & Police
What is the short title for this Strategic Goal?
The Banning PD Organizational Assessment and Improvement Initiative What is your proposed strategy to accomplish this Goal? To address the systemic issues identified in the Banning Police Department (BPD) SWOT discussion, the City Council has prioritized the allocation of one-time resources for an independent Departmental Assessment. This initiative is designed to provide an objective evaluation of the department’s current culture (e.g. norms for behavior and performance at all levels of the department vs. a uniform department-wide best practice one). It will also provide the Chief with actionable strategies to transition the current department culture to a more positive one. Besides establishing desired behaviors and values, it will establish consistent performance expectations across all ranks. Furthermore, the assessment will involve a collaborative review with the Chief, Human Resources (HR), and the City Attorney’s Office to establish the department as a desired employer but also mitigate future claims and improve the department’s professional environment.
The City has chosen Jacob Green and Associates (JGA), a California-based consulting firm specializing in organizational assessment, executive recruitment, leadership development, facilitated team development, and executive coaching for public sector agencies. JGA was recommended by PERMA the City’s Risk Management Authority for General Liability and Workers’ Compensation. JGA’s work is grounded in a deep understanding of local government and public safety environments, and their approach is guided by a simple principle: Listen First, Design Second. JGA will work collaboratively with BPD and HR to provide objective insight, strengthen organizational alignment, and support informed decision-making.
How does this project address or make a positive impact on the stated SWOTs? How will you know e.g., can you break the Goal down to objectives? Conducting a formal Organizational Assessment is a powerful strategic move for the Banning Police Department because it directly addresses the "stew" of issues outlined in the Police SWOT discussion. They include negative culture and morale in some parts Strategic (Policy) Initiatives Charter
1b. The Banning PD Organizational Assessment and Improvement Initiative 1349
Strategic (Policy) Initiatives Charter
1b. The Banning PD Strategic Excellence Initiative
19 of the department, high staff turnover, difficulty in recruitment and substantial claims filed by employees.
Instead of treating symptoms (like high turnover and large claims), an assessment identifies the root causes.
Who is the Project Sponsor?
City Manager
Who is the project lead?
Collaborative effort between Human Resources Director (lead), the Police Chief and the City Attorney (as appropriate).
Other team members?
Police management and possibly other opinion leaders in the department.
Who are the stakeholders that can determine success or failure? Why? Banning Police Officers Association, Banning Police Management Association, the Council and community.
Can this be accomplished within the current budget?
Yes
If not, how much will be needed?
N/A
What are the key milestones with dates leading to completion? Milestones Estimated Dates
1. City Council approves scope of work and contract
with Jacob Green and Associates
January 13, 2026
2. Conduct Assessment 60 days after project
commenced
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Strategic (Policy) Initiatives Charter
1b. The Banning PD Strategic Excellence Initiative
20 Milestones Estimated Dates
3. Review Assessment Report recommendations and
develop proposed Implementation Plan for Police
Chief and City Manager
90 days after project
commenced
What are the risks associated with this project? How do we manage these risks?
Addressing identified root causes may require accountability, changes in behavior and practices, and broad organizational buy-in to a new direction. Achieving this level of alignment will require commitment from all employees. In some cases, this transition may present challenges and necessitate difficult but necessary organizational changes.
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Strategic (Policy) Initiatives Charter
2a. Re-establish Animal Shelter and Increase Animal Control Services 21 Which Council Strategic (Policy) Initiative does this Charter address? 2a. Address the Lack of Animal Shelter and Animal Control Services—City Manager What is the short title for this Strategic Goal?
Animal Shelter Services - Local Restoration and Regional Solutions What is your proposed strategy to accomplish this Goal? The City will pursue a phased strategy that addresses Animal Shelter & Control restoration needs in the near-term while evaluating long-term regional Shelter & Animal Control service delivery options.
Animal Shelter
Recognizing that the existing animal shelter facility has been closed for an extended period, the City will first complete a Facility Condition Assessment and Operational Feasibility Analysis. These studies will identify required improvements, regulatory compliance needs, capacity constraints, staffing requirements, and associated capital and ongoing operations and maintenance (O&M) costs necessary to safely reopen the facility. Based on the results of these assessments, the City will develop reopening scenarios that align service levels with available resources and budget capacity.
At the same time, the City will continue discussions with neighboring jurisdictions and regional partners to evaluate the feasibility of forming a Joint Powers Authority (JPA) or similar governance structure. A regional JPA could provide a framework for financing, constructing, and operating a regional animal shelter facility, maximizing economies of scale, improving service consistency, and reducing long-term costs and operational risk for participating agencies. However, the regional approach will take much longer, say 3-5 years.
This dual-track approach allows the City to maintain flexibility, ensure informed decision-making, and present City Council with clear options for both near-term shelter operations and long-term regional solutions. Any decision to reopen the existing facility, participate in a JPA, or pursue a regional facility would be subject to City Council policy direction and approval.
Strategic (Policy) Initiatives Charter
2a. Re-establish Animal Shelter and Increase Animal Control Services 1352
Strategic (Policy) Initiatives Charter
2a. Re-establish Animal Shelter and Increase Animal Control Services 22 How does this project address or make a positive impact on the stated SWOTs? How will you know?
The SWOT discussion spoke to the lack of Animal Control and Shelter services. This project will provide an Animal Shelter that improves/increases animal control services provided to the community. These services will be able to mitigate a threat to public health and safety.
Who is the project sponsor?
City Council
Who is the project lead?
City Manager
Other team members and roles?
Director of Public Works (building assessment, capital improvements), Animal Control Officers (operations) and possible JPA participating agencies.
Who are the stakeholders that can determine success or failure? Why? The City Council, Non-Profits, Animal Control officers, the Morongo Band of Mission Indians and Banning residents are all stakeholders.
Council provides authority to invest in the required improvements to the City existing facility and ultimately approve participation in a regional solution. Non-profits will provide cost effective support in finding homes for animals and could aid in supporting Animal Shelter operations. Animal Control Officers will provide input on facility needs and operations. Morongo Band of Mission Indians (MBMI) have expressed interest in utilizing the existing facility. If a regional facility is pursued, other JPA agencies would be stakeholders.
Can this be accomplished within the current budget?
No
If not, how much will be needed?
The Facility Assessment and Feasibility Study was recently awarded and has a contract value of $145,000; $50,000 was committed by the Morongo Band of Mission Indians.
The construction and operating costs will be refined after the completion of the facilities assessment. The City may be able to find one-time funding for the capital 1353
Strategic (Policy) Initiatives Charter
2a. Re-establish Animal Shelter and Increase Animal Control Services 23 portion, but ongoing operations will be more difficult. A rough estimate for operations is $600,000 to $800,000. The Morongo Band of Mission Indians may participate in it too. The cost for a regional JPA option is not known at this time.
Funding Source: General Fund and possible contributions from partnering agencies (e.g. MBMI, etc.)
What are the key milestones with dates leading to completion? Milestones Estimated Dates
1. The Facility Condition & Operational Assessment
was started in January 2026
May 2026
2. Determine City fiscal capacity to re-establish the
Animal Shelter, including operations
June 2026
3. Outreach with potential JPA partners in a regional
solution
Ongoing
4. Assess likelihood and timing of the regional
approach and consider implementing the local
option.
If local option is pursued,
anticipate 18-24 months
of design & construction
activity
5. Consider the regional solution 3-5 years
What are the risks associated with this project? How do we manage these risks?
Funding: Given the City’s General Fund fiscal position, the biggest risk is finding the funds for capital and operations under both scenarios (i.e., local and regional) .
However, there is an unquantifiable risk to the City’s quality of life with a continued void for these services.
Regional Participation: The success of a JPA would be highly dependent on the sustained commitment and alignment of participating regional partners. 1354
Strategic (Policy) Initiatives Charter
2b. Address Homelessness
24 Which Council Strategic (Policy) Initiative does this Charter address? 2b. Address Homelessness
What is the short title for this Strategic Goal?
Responding to Homelessness in the City
What is your proposed strategy to accomplish this Goal? The City will develop and implement a comprehensive Homelessness Response Plan (HRP) informed by best practices from peer agencies that have demonstrated success in managing homelessness through coordinated outreach, services, and enforcement.
The program will be built on strong partnerships with Riverside County (e.g., social services, behavioral health, jail/Sheriff), and local and regional non-profits that provide social services, behavioral health support, housing navigation, and re-entry assistance.
As part of this strategy, the City will review and update its anti-camping ordinance to ensure it is clear, enforceable, and aligned with current legal standards and best practices. Ordinance updates will focus on protecting public health and safety, preserving access to public spaces, and supporting consistent enforcement in coordination with outreach and available services.
The strategy will also include coordinated encampment cleanups in coordination with outreach and service providers, to address health, safety, and sanitation concerns in public spaces. These efforts will help reduce impacts on infrastructure and Police responders, improve cleanliness, and support safe and accessible public areas for residents and businesses.
How does this project address or make a positive impact on the stated SWOTs? How will you know?
Through the implementation of a well-designed and coordinated HRP, the City anticipates a measurable reduction in homelessness-related activity. This will result in fewer homelessness-related calls for service to the Police Department, which currently represent the City’s highest call volume, thereby allowing law enforcement resources to be more effectively allocated to other citizen calls for services. In addition, a reduction in encampments is expected to decrease the number of hours Public Works staff spend on encampment cleanup and related maintenance activities.
Strategic (Policy) Initiatives Charter
2b. Address Homelessness
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Strategic (Policy) Initiatives Charter
2b. Address Homelessness
25 Reduced homelessness activity in the downtown area is also expected to positively influence economic development by improving overall conditions for businesses and increasing investor confidence. A cleaner, safer, and more predictable environment supports private investment, commercial activity, and long-term revitalization efforts.
Finally, decreased homelessness activity in public spaces such as parks, sidewalks, and rights-of-way is expected to reduce community concerns related to health, safety, and accessibility, helping ensure that public spaces remain safe, sanitary, and accessible for all residents and visitors.
Who is the project sponsor?
City Council
Who is the project lead?
City Manager
Other team members and roles?
Director of Public Works (encampment cleanup), Police (Homeless Liaison Officers, Code Enforcement) and Homeless Services Coordinator.
Who are the stakeholders that can determine success or failure? Why? City Council: Will set policy direction, approve changes to applicable ordinance and authorize additional expenditures.
Riverside County: Due to the lack of City resources and programmatic expertise, the City will rely on coordination with County program ( e.g., social services) and additional staff assistance for implementing the City’s plan. Additionally, continued communication with the County Sheriff’s Office will be critical to ensure that the release of inmates is not done in a manner that encourages falling back into homelessness in the City. An MOU with the County, which has now expired, once provided funding resources to the City to fund additional Police Officers, to mitigate the impacts the jail would have on the City. Continued discussions with the goal of renewing the MOU would be significant to the City’s initiative of dealing with the homeless problem.
Non-Profits: Can assist in providing outreach and supportive services.
Can this be accomplished within the current budget?
No
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Strategic (Policy) Initiatives Charter
2b. Address Homelessness
26 Staff resources dedicated to the development and implementation of the HRP are currently limited, which may impact the City’s ability to implement the program as envisioned. Any additional staffing required to support the program would rely on the General Fund, which is anticipated to experience budget reductions as the City works to address its structural deficit.
If not, how much will be needed?
The development of an HRP is likely to range between $75,000 - $100,000.
In the absence of a formal Homelessness Response Plan, it is difficult to accurately estimate the total cost required for successful implementation. However, based on comparable programs and preliminary assumptions, a high-level estimate for additional staffing ranges from approximately $200,000 to $400,000 annually to support Homeless Services Coordinators and Homeless Liaison Officers.
In addition, the annual cost to contract for encampment cleanup services is estimated to range from approximately $350,000 to $500,000 per year, depending on service frequency, scope of work, and site conditions.
Funding Source: General Fund
What are the key milestones with dates leading to completion? Milestones Estimated Dates
1. Procurement of services to develop a HRP July 1, 2026
2. Commence development of HRP September 1, 2026
3. Draft of HRP Presented to Council April 1, 2027
4. Approval of HRP June 1, 2027
What are the risks associated with this project? How do we manage these risks?
Lack of Bandwidth: The City has limited capacity in the City Manager’s Office to convene stakeholders and potential partners to develop a Banning HRP. Hence the recommendation to procure services from a consultant to develop the HRP, which will include outreach to both internal and external stakeholders.
Insufficient Funding: The successful implementation of a comprehensive homelessness response requires sustainable funding for outreach, coordination, enforcement, and cleanup activities. Limited or uncertain funding could delay program implementation or reduce effectiveness. Grants could possibly help fill the funding gap.
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Strategic (Policy) Initiatives Charter
2b. Address Homelessness
27 Lack of coordination or support from Riverside County: The City’s ability to address homelessness effectively depends in part on access to County-provided expertise and bandwidth (e.g., social services, behavioral health resources, and housing programs).
Limited coordination or inconsistent County participation could reduce program effectiveness. Consistent communication with the County would help mitigate this risk.
County Jail Release Practices: The release of inmates from the Riverside County jail can result in individuals returning to homelessness within City limits, undermining local efforts. Consistent communication with the County would help mitigate this risk. 1358
Strategic (Policy) Initiatives Charter
2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades 28 Which Council Strategic (Policy) Initiative does this Charter address? 2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades.
What is the short title for this Strategic Goal?
Complete Wastewater Treatment Plant & Recycled Water Upgrades What is your proposed strategy to accomplish this Goal? Completion of the design and construction of the new Wastewater Treatment Plant (WWTP) will accomplish the following:
• Modernize the Wastewater Treatment Plant (WWTP).
• Meet Regional Water Quality Control Board’s (RWQCB) effluent discharge limits of total nitrogen.
• Produce Title 22–compliant recycled water for irrigation uses. • Diversify City’s water resources.
This initiative represents one of the City’s most complex and resource-intensive infrastructure efforts, involving multiple external agencies, consultants, contractors, and regulatory stakeholders over several years including but not limited to:
• Finish the design and environmental documents prior to construction. • Identify and address any budget shortfalls via raising rates, seeking additional grants, debt service to cover construction costs.
• Obtain RWQCB’s discharge and Title 16 Recycled Water permits. • Complete construction and commission start-up of the new WWTP. • Produce Recycled Water and implement usage.
How does this project address or make a positive impact on the stated SWOTs? How will you know e.g., can you break the Goal down to objectives? Alignment with Water & Wastewater SWOTs:
Strategic (Policy) Initiatives Charter
2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades 1359
Strategic (Policy) Initiatives Charter
2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades 29 • Strengths Utilized: Proactive compliance planning, strong in-house operational capability, effective regulatory partnerships.
• Weaknesses Addressed: Impending RWQCB’s effluent discharge water quality limits, replacement of aging treatment infrastructure.
• Opportunities Advanced: Seek additional grant funds, implementation of recycled water use and future renewable energy (solar panels). • Threats Mitigated: Regulatory enforcement risk, escalating regular and emergency upgrade costs due to end-of-life infrastructure.
Who is the Project Sponsor?
The City Manager.
Who is the project lead?
The Director of Public Works.
Other team members?
The Deputy Director of Water & Wastewater will serve as the principal project manager and will coordinate day-to-day implementation activities. Other members: engineering staff; finance department (budgeting, grants, cash flows); City Attorney; external engineering consultants; construction management team and the WWTP operations staff.
Who are the stakeholders that can determine success or failure? Why? The success of this project depends on coordination with several key stakeholders, including:
• Regional Water Quality Control Board (RWQCB): Permitting authority responsible for approving discharge requirements and compliance.
• State Agencies and Grant Administrators: Provide regulatory alignment and critical external funding.
• City Council: Provides policy direction, budget authorization, and public accountability.
• Ratepayers and Recycled Water Users: Beneficiaries of system reliability, water supply diversification, and cost-effective service delivery. 1360
Strategic (Policy) Initiatives Charter
2c. Complete Wastewater Treatment Plant & Recycled Water Upgrades 30 • WWTP Operations Staff: Essential to successful commissioning, safe operation, and long-term regulatory compliance.