Item E-9 Agenda Report — Beverly Hills City Council, November 21, 2023

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AGENDA REPORT
Meeting Date: November 21, 2023
Item Number:

To: Honorable Mayor & City Council
From: Logan Phillippo, Real Property Development Manager Attachment: 1. Resolution

RECOMMENDATION
Staff recommends City Council:

1. Approve Resolution of the Council of the City of Beverly Hills Approving a Purchase and Sale Agreement and Joint Escrow Instructions, in Substantive Form, by and between the City of Beverly Hills (“Buyer”), and EMCAP BHL, LLC, IA GALE, LLC, NEWS 111, LLC, and GSH GALE, LLC (Collectively and Severably, “Seller”), Concerning Real Property Located at 111 North Gale Drive in Beverly Hills (“Resolution”); and

2. Approve an appropriation from General Fund (Fund 001) unassigned reserves in the amount of $8,419,000.

INTRODUCTION
The City has negotiated the acquisition of real property located at 111 N. Gale Dr., which is contiguous with property already owned by the City and composes part of the property often referred to as the Gale Yard (the “Property”). The purchase price is $8,399,000 and Subject: RESOLUTION OF THE COUNCIL OF THE CITY OF BEVERLY HILLS

APPROVING A PURCHASE AND SALE AGREEMENT AND JOINT

ESCROW INSTRUCTIONS, IN SUBSTANTIVE FORM, BY AND

BETWEEN THE CITY OF BEVERLY HILLS AND EMCAP BHL, LLC,
IA GALE, LLC, NES 111, LLC, AND GSH GALE, LLC
CONCERNING REAL PROPERTY LOCATED AT 111 NORTH
GALE DRIVE IN BEVERLY HILLS; AND

APPROVAL OF AN APPROPRIATION FROM THE GENERAL FUND
IN THE AMOUNT OF $8,419,000, WHICH INCLUDES $20,000 FOR

ESCROW FEES AND DUE DILIGENCE ACTIVITIES
Meeting Date: November 21, 2023

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staff estimates an additional $20,000 is necessary for various escrow fees and due diligence activities such as surveys and environmental site assessments.

By approving the Resolution, included as Attachment 1, City Council will: (i) find the acquisition advances goals and objectives of the General Plan and is in conformity with the General Plan, (ii) approve a Purchase and Sale Agreement in substantive form as included in the Resolution, authorizing the City Manager to sign all related documents, and (iii) find that acquisition is exempt from the California Environmental Quality Act (CEQA).

DISCUSSION
According to records from the Los Angeles County Assessor, the Property 111 N. Gale Dr., depicted as Parcel D in the diagram below, contains approximately 6,500 square feet of land area. The City already owns Parcels A, B, and C, most recently purchasing Parcel C at 8401 Wilshire Blvd. in March of this year. The acquisition adds to an assemblage of City-controlled property spanning the block along Wilshire Boulevard from Hamilton Drive to Gale Drive.

Aeriel Diagram of the Property
Parcel Address Sqft Acres Description
A 8423 Wilshire 19,290 0.44 Clock Market Building
B 8421 Wilshire 18,630 0.43 Gale Yard
C 8401 Wilshire 6,150 0.14 Gale Yard
D 111 N. Gale 6,500 0.15 Gale Yard
Total 50,570 1.16
Parcel A at 8423 Wilshire, acquired in 2019, includes the Clock Market historic building and contains approximately 19,290 square feet of land. Parcel B at 8421 Wilshire, Meeting Date: November 21, 2023

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acquired in 2017, is used by Metro for construction purposes under an active temporary construction easement (“TCE”) as part of the larger property often referred to as the Gale Yard and contains 18,630 square feet of land. Parcel C at 8401 Wilshire, acquired in March 2023 is also used by Metro under a TCE and part of the Gale Yard and contains 6,150 square feet of land. The subject property, Parcel D at 111 N. Gale, is similarly used by Metro under a TCE and contains approximately 6,500 square feet of land. The total assemblage is approximately 50,570 square feet of land, or 1.16 acres.

The Property is encumbered by Metro’s TCE through January 1, 2026.

The City has taken and continues to take steps to acquire properties in key areas for future affordable housing, parking, and/or economic development purposes. While there are no specific development plans at this time, upon termination of the TCE the assembled properties could one day be utilized in conjunction with streetscape improvements to provide public amenities, destination retail, and/or residential uses in a mixed use project that meet City objectives to enhance the pedestrian experience and activate southeast area businesses.

The City has been evaluating preliminary options for future use of the property it already owns and has conducted two Gale Yard Public Forums to seek input on future long-term uses of the 8421 Wilshire property (Parcel B). The first public forum took place on May 2, 2022 and the second on October 17, 2022. While the community discussed a broad range of options and uses, there was a general understanding to maintain the historic integrity of the Clock Market and for the city to acquire additional land for the benefit of a future project. Information, presentations, and recordings of both public forums is available online at www.beverlyhills.org/galeyard.

Purchase and Sale Agreement
The Purchase and Sale Agreement includes the following key terms:
• A purchase price of $8,399,000;
• A deposit of $251,970 (3% of the purchase price) to be delivered to escrow within 5 business days after approval of the Agreement, this amount is attributed toward the purchase price;
• Buyer and Seller shall evenly split the cost of escrow fees; • Seller shall pay the premium for a standard title insurance policy and Buyer shall pay the expenses necessary to obtain extended coverage (i.e. an ALTA survey) ; • No brokerage fees are associated with the transaction; • A Buyer contingency period of 30 days to perform due diligence, which may be extended by up to 60 additional days if a Phase II environmental site assessment is recommended by the City’s environmental consultant. During this time, if the City determines that any conditions of the Property are not acceptable as a result of due diligence review and physical inspections (i.e. hazardous substance inspections, soil inspection, conditions of title, surveys, etc.), then the City may terminate the Purchase and Sale Agreement by written notice.

Meeting Date: November 21, 2023

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General Plan Conformity Finding
Before the City can acquire any real property, the City’s designated planning agency must review the proposed transaction for conformity with the General Plan as set forth in California Government Code Section 65402 (a):
“If a general plan or part thereof has been adopted, no real property shall be acquired by dedication or otherwise for street, square, park or other public purposes, and no real property shall be disposed of, no street shall be vacated or abandoned, and no public building or structure shall be constructed or authorized, if the adopted general plan or part thereof applies thereto, until the location, purpose and extent of such acquisition or disposition, such street vacation or abandonment, or such public building or structure have been submitted to and reported upon by the planning agency as to conformity with said adopted general plan or part thereof…” The purpose of the general plan conformance review is to ensure that consideration is given to the policies and goals of a jurisdiction’s general plan when real estate is bought or sold by a government agency. This is meant as a safeguard to prevent jurisdictions from purchasing property that may be in a location, or have characteristics that make it a poor investment of public funds, or disposing of property that could be of future use to the jurisdiction.

Pursuant to Beverly Hills Municipal Code 10-1-102(I.) and as amended by Ordinance 19- O-2792, City Council is designated as the City’s planning agency as set forth in State Planning and Zoning Law for the purposes of reviewing and considering the proposed transaction’s conformity with the General Plan.

The acquisition of property located at 111 N. Gale Dr. is consistent with the City’s General Plan. The project advances the goals and policies of the General Plan as outlined in the table below.

Relevant General Plan Policies
Policy LU 2.1 City Places: Neighborhoods, Districts, and Corridors. Maintain and enhance the character, distribution, built form, scale, and aesthetic qualities of the City's distinctive residential neighborhoods, business districts, corridors, and open spaces.

Policy LU 2.7 City Gateways. Explore opportunities for public improvements and private development to work together to enhance the sense and quality of entry at key gateways into the City.

Policy LU 5.3 Senior Housing. Encourage the development of senior housing that is accessible to commercial services, health and community facilities, and public transit
Policy LU 9.1 Uses for Diverse Customers. Accommodate retail, office, entertainment, dining, hotel, and visitor serving uses that support the needs of local residents, attract customers from the region, and provide a quality experience for national and international tourists.

Meeting Date: November 21, 2023

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Relevant General Plan Policies
Policy LU 9.2 Mitigation of Existing Commercial Residential Conflicts. In those areas where conflicts already exist due to the abrupt change in character or spillover effects of commercial uses onto adjacent residential areas, methods should be sought to mitigate existing problems through appropriate mechanisms such as landscaping and screening, use of selected residential parcels to provide park buffers with the possibility of underground parking to serve the adjacent commercial areas, and the development of consolidated parking facilities to serve commercial areas deficient in parking, or commercial areas which have no alley access to the rear and would require numerous curb cuts if parking were provided on individual parcels.

Policy LU 9.3 Anchor Locations. It is also recommended that certain anchor locations be set aside to permit development of a higher intensity type of development which is not otherwise provided in the community.

These areas should be located so as to be accessible from the City's major shopping areas and close to the City's major streets. These anchor locations should include those large parcels that are located at the gateways to the City, such as the site at 9900 Wilshire Boulevard where additional building height is appropriate. A variety of land uses such as commercial, residential, and mixed use should be considered for the gateway locations. A change of use from commercial to residential or mixed use should be allowed only if such change provides an adequate transition to adjacent single family neighborhoods Policy LU 9.5 Commercial/ Residential Mixed Uses. The feasibility of allowing mixed commercial/residential uses should be analyzed in order to expand the variety of housing types available and in certain areas, to improve commercial/residential transitions
Policy LU 11.5 Retail Streetscapes. Maintain and, where deficient, improve street trees, plantings, furniture, signage, public art, and other amenities that promote pedestrian activity
Policy LU 11.6 Parking. Parking. Explore opportunities to expand the parking supply in underserved commercial districts and residential neighborhoods which may be developed publicly, privately, or by joint public-private partnerships.

Policy LU 11.7 Connectivity to Parking. Require that commercial and office districts be linked to parking areas and garages by well-designed and attractive pedestrian corridors.

Policy LU 13.3 Compatibility of Public Buildings and Sites. Ensure that City-owned buildings, sites, and infrastructure are designed to be compatible in scale, mass, character, architecture, and landscape with the district or neighborhood in which they are located.

Policy LU 16.4 Public Places. Provide plazas, open spaces, and other outdoor improvements that are accessible to and used for public gatherings and activities, either through capital improvement or as a development requirement.

Policy LU 16.10 Affordable Housing. Support the development of affordable housing as required by state law.

Meeting Date: November 21, 2023

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Relevant General Plan Policies
Policy ES 3.3 Multi-modal Transportation. Multi-modal Transportation. Encourage and promote the use of existing public transportation to link these areas with the Triangle while developing alternative means of public transportation to ease congestion and facilitate successful, high-quality development throughout the City.

Policy OS 8.5 Urban Parks. Encourage and allow opportunities for new development to provide small plazas, pocket parks, civic spaces, and other gathering places that are available to the public to help meet recreational demands.

Policy H 2.8 Transit-Oriented Housing. Promote access, where feasible, from residential neighborhoods and new residential development to existing transit stops and to the anticipated subway stations.

Policy H 3.2 Senior Housing. Support provision of a variety of housing options for seniors to foster independence and the ability of seniors to remain in the community as they age.

Policy CIR 2.1 Metro Subway Extension. Support the extension of the Metro subway extension through the City along Wilshire Boulevard with stations at Beverly/Rodeo and La Cienega to enhance transit service and increase transit ridership within the City and the West LA region. Explore other stops as appropriate.

Policy CIR 2.1a Linking Transit and Development. Encourage appropriate development that may include parking for local transit riders, localserving retail, high-end retail, restaurant and supporting uses in and around transit stops and stations.

Policy CIR 4.3 Several detailed plans for expanded parking facilities have been developed over the years. It would be appropriate to update these into a specific program for future acquisition and expansion, as needed. This should include consideration of acquisition and possible leaseback for commercial purposes so that such parcels may be available as long as 25 years before they are needed.

Policy CIR 4.10 Parking Strategies. Examine a variety of parking strategies to maximize City resources, promote economic development, and encourage alternative modes of travel within the City, including congestion pricing programs, Parking Assessment Districts, extension of the In-Lieu Fee Program to commercial districts throughout the City, demand management studies, parking registration and reporting programs, and programs for public education regarding parking programs.

Acquisition of the commercial property is in conformance with the General Plan. In addition to advancing the above General Plan policies, the purchase of the property does not impede the advancement of other General Plan goals and policies. For example, the Property, assembled with the other City-owned Parcels A, B, and C described above:
• Could be utilized to interface with future parking and/or public transportation infrastructure, including the future La Cienega Station, connecting public transportation to commercial uses (LU 11.6, LU 11.7, ES 3.3, CIR 2.1, CIR 2.1a, CIR 4.10);
Meeting Date: November 21, 2023

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• Could be utilized as a public gathering or civic space with on-site retail and restaurant uses with outdoor dining that serves pedestrians and public transit users (LU 2.1, LU 9.1, LU 11.5, LU 13.3, LU 16.4, OS 8.5); and/or • Could be utilized with the neighboring properties as a mixed-use development, providing affordable senior housing with first floor retail and restaurant uses (LU

5.3,LU 9.3, LU 9.5, LU 16.10, H 2.8, H 3.2).

California Environmental Quality Act Review
The project has been assessed in accordance with the authority and criteria contained in the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the environmental regulations of the City. The project appears to qualify for a categorical exemption pursuant to both Section 15061(b)(3) of the Guidelines (common sense exemption) as it can be "seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment" and Section 15301 of the Guidelines (existing facilities exemption) as there is no expansion of an existing or former use in connection with approval of the acquisition. There are no plans for changes of use of the properties at this time, and therefore it can be seen with certainty that the change in ownership will result in no significant effects on the environment. If in the future there are plans to undertake a project involving the properties, that future project will be subject to CEQA review and will be reviewed as appropriate.

FISCAL IMPACT
City Council approval of the Purchase and Sale Agreement would result in a one-time cost of $8,399,000 plus closing costs and other inspections during the due diligence period.

Buyer closing costs are estimated at approximately $5,000, which accounts for 50% of the escrow company’s fee as well as the extended portion of title insurance. Inspection costs are estimated at approximately $15,000, which accounts for necessary environmental site assessments and the cost of a land survey prepared to the standards of the American Land Title Association (“ALTA”) and the American Congress on Surveying and Mapping (“ACSM”). The total cost of the land purchase is $8,419,000.

Land Acquisition is part of the City’s Capital Improvement Program (“CIP”) budget. While the Capital Assets Fund (Fund 405) Land Acquisition CIP currently has an available balance of $6.87 million, approximately $4.60 million has been already set aside for other land acquisitions contemplated by a Memorandum of Agreement with Los Angeles County Metropolitan Transit Authority (“Metro”) and an additional $2.27 million has already been set aside for acquisitions specifically related to green/open space. Therefore, an appropriation of the full $8,419,00 is necessary to complete the acquisition of the subject Property.

For City Council’s information, the tables below summarize additional FY 2023-24 General Fund appropriations activity after budget adoption. With approval of the two items that include appropriations on this evening’s agenda (Gale property purchase and additional unhoused support), additional appropriations will total $15.9 million. Factoring in the estimated $10.1 million increase to unassigned fund balance (based on FY2022-23 results and the projected FY2023-24 surplus), an additional $5.8 million of existing unassigned reserves will be required to support these appropriations. Note, this does not include additional increases for labor increases, which will be brought to the City Council in December 2023.

Meeting Date: November 21, 2023

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Jeff S. Muir
Director of Finance
Ryan Gohlich
Assistant City Manager
Finance Approval Approved By
Fiscal Year 2022-23 Unaudited Increase in Unassigned Fund Balance $ 4,526,780 Fiscal Year 2023-24 Projected Surplus (from Adopted Budget) 5,537,530 Total Combined Two-Year Estimated Increase in Unassigned Fund Balance $ 10,064,310 Less Approved and Proposed Mid-Year Appropriations as of 11/7/2023 (15,888,345) Net Impact on General Fund Unassigned Reserves $ (5,824,035) Date Agenda Item Mid-Year
Appropriations
8/15/2023
Agreement with Step Up on Second to Provide 30 Units of Scattered-Site Permanent Supportive Housing for the Unhoused and 40 Motel Stays $ 1,798,065
9/19/2023 Approval of Salary Schedule and Associated Appropriation 26,700 10/3/2023 JPA Agreement + CCTV Purchases/Installation 4,012,215 11/7/2023 Tourism and Marketing True-Up (from FY 2022-23) 1,117,365 $ 6,954,345
11/21/2023 Nastec International, Inc. Unhoused Support 515,000 11/21/2023 Property Purchase (111 North Gale Drive) 8,419,000 $ 8,934,000
As of 11/7/2023 Total Mid-Year Appropriations (pending Council approval) $ 15,888,345 Forthcoming MOU Increases - Miscellaneous Groups Unknown General Fund Summary
Fiscal Year 2023-24 Mid-Year Appropriations Approved by Council To-Date General Fund Appropriations Pending Direction from Council Attachment 1
1 B0785-0001\2890174v2.doc
RESOLUTION NO. 23-RRESOLUTION OF THE COUNCIL OF THE CITY OF BEVERLY HILLS

APPROVING A PURCHASE AND SALE AGREEMENT AND JOINT

ESCROW INSTRUCTIONS, IN SUBSTANTIVE FORM, BY AND BETWEEN

THE CITY OF BEVERLY HILLS AND EMCAP BHL, LLC, IA GALE, LLC, NES 111, LLC, and GSH GALE, LLC CONCERNING REAL PROPERTY LOCATED AT 111 NORTH GALE DRIVE IN BEVERLY HILLS
The City Council of the City of Beverly Hills (“City”) does resolve as follows:

Section 1. California Government Code Section 65402 (a) requires that if a general plan has been adopted, no real property shall be acquired until the location, purpose and extent of such disposal has been submitted to and reported upon by the planning agency as to conformity with said adopted general plan; Section 10-1-102 of the Beverly Hills Municipal Code specifies that the City Council is the planning agency for the City of Beverly Hills for this purpose. The City Council, in such capacity, hereby finds/resolves that: (i) the proposed purchase advances the goals and objectives of the General Plan, and presents no impediments to achieving the goals and objectives of the General Plan; and (ii) the acquisition of the commercial property is in conformity with the City’s General Plan.

Section 2. The City Council hereby approves that certain “PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS” by and between the City of Beverly Hills (“Buyer”) and EMCAP BHL, LLC and IA GALE, LLC (collectively and severably, “Seller”) in connection with 111 North Gale Drive in Beverly Hills (“Agreement”), in substantially the form attached in Exhibit A, with such changes as the City Manager and Seller may mutually agree to that are approved by the City Attorney’s Office.

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Section 3. This Resolution has been reviewed with respect to the applicability of the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) ("CEQA"). Section 15061 (b)(3) of the CEQA Guidelines (common sense exemption) apply, as it can be "seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment".

Further, Section 15301 of the CEQA Guidelines (existing facilities exemption) applies, as there is no expansion of an existing or former use in connection with approval of the acquisition. The City Council hereby finds that acquisition of the property qualifies for exemption from the California Environmental Quality Act (CEQA) pursuant to Section 15061(b)(3) of the Guidelines (common sense exemption) because it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, and pursuant to Section 15031 of the Guidelines (existing facilities exemption) because there is no expansion of an existing or former use in connection with approval of the acquisition. There are no plans for changes of use of the property at this time, and therefore it can be seen with certainty that the change in ownership will result in no significant effects on the environment. If in the future there are plans to undertake a project involving the property, that future project will be subject to CEQA review and will be reviewed as appropriate.

Section 4. The City Clerk is directed to file a Notice of Exemption pursuant to CEQA Guidelines Section 15062.

Section 5. The City Manager is authorized and directed to execute the Agreement in substantially the form attached, with such changes as the City Manager and the Seller may mutually agree to that are approved by the City Attorney’s Office.

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Section 6. The City Manager or their designee shall administer the terms of the Agreement on behalf of the City, and may enter into non-substantial amendments, including but not limited to extensions of the Buyer due diligence contingency period and other similar agreements and documents as contemplated by or described in the Agreement or as necessary and convenient to effectuate the transaction contemplated therein.

Section 7. The City’s Real Property Development Manager shall furnish a copy of the Agreement, after it has been approved and fully executed by the City, along with a copy of this resolution, to the Seller or its counsel.

Section 8. The City Clerk shall certify to the adoption of this resolution and shall cause this resolution and their certification to be entered in the Book of Resolutions of the City.

Adopted:

JULIAN, A. GOLD, M.D.

Mayor of the City of Beverly Hills
ATTEST:
(SEAL)

HUMA AHMED
City Clerk
APPROVED AS TO FORM: APPROVED AS TO CONTENT:
______________________________ _____________________________ LAURENCE S. WIENER NANCY HUNT-COFFEY
City Attorney City Manager
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Exhibit A
Agreement
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PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS This PURCHASE AND SALE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS (the “Agreement”) is dated as of November 21, 2023 (the “Effective Date”) and is entered into by and between the CITY OF BEVERLY HILLS, a California municipal corporation (“Buyer” or “City”), and EMCAP BHL LLC, a California limited liability company, IA GALE, LLC, a California limited liability company, NES 111, LLC, a California limited liability company, and GSH GALE LLC, a California limited liability company (collectively, and jointly and severally, the “Seller”).

RECITAL
A. Seller owns the land described on Exhibit “A” and all improvements thereon (the “Property”), having a street address of 111 N. Gale Dr., Beverly Hills, California 90211 (APN:
4344-022-063).

B. Buyer desires to acquire the Property from Seller, and Seller desires to convey the Property to Buyer, subject to, among other things, that certain Grant of Temporary Construction Easement by and between Seller and the Los Angeles County Metropolitan Transportation Authority (“MTA”), dated September 21, 2023 (the “TCE”).

C. The Parties acknowledge that the City is authorized to acquire real property by eminent domain for a public use, including public transportation, and other public services in connection with the upcoming metro station located at Wilshire Boulevard and La Cienega Boulevard, and all uses necessary or convenient thereto pursuant to the authority conferred upon the City of Beverly Hills by California Constitution Article 1, Section 19, California Government Code Sections 37350, 37350.5, 37351, 37353, and 40404, California Code of Civil Procedure Section 1230.010 et seq. (Eminent Domain Law) and other provisions of law. The City Council of the City of Beverly Hills, as City’s governing body, has sole discretion to make the findings required by Code of Civil Procedure Section 1240.030 for the adoption of a resolution of necessity pursuant to the Eminent Domain Law. (Code of Civil Procedure Section 1245.220). If Seller and City had not reached agreement for the City’s purchase of the Property, City Staff would have recommended that the City Council consider the adoption of a resolution of necessity authorizing the initiation of eminent domain proceedings to acquire the Property in accordance with the Eminent Domain Law. Seller is solely responsible for consulting its tax advisors or seeking a letter ruling from the Internal Revenue Service regarding the applicability of 26 U.S.C. Section 1033 to Seller’s sale to the City of the Property in fee for the proposed Project, and City makes no express or implied representation regarding the applicability of 26 U.S.C. Section 1033 to this transaction.

NOW, THEREFORE, in consideration of ten dollars ($10), the mutual covenants in this Agreement, and other consideration the sufficiency of which is hereby acknowledged, Buyer and Seller hereby agree as follows:

1. Purchase and Sale. Seller agrees to sell the Property to Buyer, and Buyer agrees to purchase the Property from Seller, subject to and in accordance with the terms and conditions hereinafter set forth. The above Recitals are incorporated herein as part of this Agreement.

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2. Opening and Closing of Escrow. Within five (5) business days after the Effective Date, Buyer and Seller shall deliver a copy of this fully executed Agreement to, and shall open an escrow (the “Escrow”) with, Commerce Escrow, 1055 Wilshire Blvd, Suite 1000, Los Angeles, CA 90017, Attn: Raul Zuniga, Escrow Officer (213/484-0855 x4016). (The “Title Company” shall be Commonwealth Land Title Company, at 601 S. Figueroa St. # 4000, Los Angeles, California 90017.)
The Close of Escrow or Closing shall occur within five (5) business days after the end of the Contingency Period, as defined in Section 6.1 below, provided that Seller may extend the Closing for up to thirty (30) days by written notice to Buyer on or before the end of the Contingency Period (the “Closing Date”). As used herein, the term “Close of Escrow” shall mean that a grant deed for the Property in favor of Buyer in the form attached hereto as Exhibit “B” (with an attached Certificate of Acceptance executed by Buyer and acknowledged) have been recorded in the Official Records of the Los Angeles County Recorder’s Office, in accordance with and subject to the terms hereof.

3. Purchase Price. The purchase price for the Property (“Purchase Price”) is EIGHT MILLION THREE HUNDRED NINETY-NINE THOUSAND AND NO/100 DOLLARS ($8,399,000.00).

4. Deposit. Within five (5) business days following the opening of Escrow, Buyer shall deliver funds, by check, wire transfer or other means, in the amount of TWO HUNDRED FIFTY-ONE THOUSAND NINE HUNDRED SEVENTY AND NO/100 DOLLARS ($251,970.00), to the Escrow Holder to be deposited in an interest-bearing account and held as an earnest money deposit under the Escrow pursuant to the terms and provisions hereof (which earnest money deposit, together with the interest thereon, is herein called the “Deposit”). The Deposit shall be: (i) applicable to the Purchase Price; (ii) refunded to Buyer if the Close of Escrow does not occur due to a failure of a condition to closing or Seller default; and (iii) retained by the Seller as liquidated damages in accordance with the following.

If Buyer breaches any obligation hereunder which Buyer is to perform prior to the Close of Escrow, and Buyer fails to cure such breach within five (5) business days after receipt of written notice from Seller, then Seller may terminate this Agreement and the Escrow by giving written notice of such termination to Buyer and Escrow Holder, and the Deposit shall then be retained by Seller as liquidated damages for Buyer’s uncured default, as Seller’s sole and exclusive remedy for Buyer’s uncured default.

IF CLOSING FAILS TO OCCUR SOLELY BECAUSE OF BUYER’S UNCURED

DEFAULT, SELLER WILL BE DAMAGED AND WILL BE ENTITLED TO

COMPENSATION FOR THOSE DAMAGES, BUT SUCH DAMAGES WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN. BUYER DESIRES

TO LIMIT THE AMOUNT OF DAMAGES FOR WHICH BUYER MIGHT BE LIABLE SHOULD BUYER BREACH THIS AGREEMENT. BOTH BUYER AND SELLER WISH

TO AVOID THE COSTS AND LENGTHY DELAYS THAT WOULD RESULT IF

SELLER FILED A LAWSUIT TO COLLECT ITS DAMAGES FOR A BREACH OF THIS AGREEMENT. IF CLOSING FAILS TO OCCUR BECAUSE OF BUYER’S

UNCURED DEFAULT, THEN THE DEPOSIT SHALL BE DEEMED TO CONSTITUTE DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc
A REASONABLE AND FINAL ESTIMATE OF SELLER’S DAMAGES AND SHALL BE RETAINED BY SELLER AS LIQUIDATED DAMAGES AS SELLER’S SOLE AND EXCLUSIVE REMEDY. SELLER AND BUYER ACKNOWLEDGE THAT THEY

HAVE READ AND UNDERSTAND THE PROVISIONS OF THIS SECTION AND BY THEIR INITIALS IMMEDIATELY BELOW AGREE TO BE BOUND BY ITS TERMS.

THE PARTIES ACKNOWLEDGE THAT THE PAYMENT OF SUCH

LIQUIDATED DAMAGES IS NOT INTENDED AS A FORFEITURE OR PENALTY WITHIN THE MEANING OF CALIFORNIA CIVIL CODE SECTIONS 3275 OR 3369,

BUT IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677. IN NO

EVENT SHALL THIS SECTION LIMIT BUYER'S INDEMNITY OBLIGATIONS

UNDER THIS AGREEMENT, OR SELLER'S RIGHT TO RECOVER ITS

ATTORNEYS' FEES AND COSTS RELATING TO THE ENFORCEMENT OF THE TERMS OF THIS AGREEMENT (INCLUDING THE TERMS OF THIS SECTION 4,

OR ANY OF SELLER'S OTHER RIGHTS AND/OR REMEDIES AT LAW AND/OR IN EQUITY).THIS SECTION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.

BUYER’S INITIALS SELLER’S INITIALS

5. Title.

5.1 Condition of Title; Title Policy. It is a condition to the Close of Escrow that the Title Company be committed to issue to Buyer, upon Close of Escrow, a standard CLTA owner’s policy of title insurance (“Title Policy”) in an amount equal to the Purchase Price, showing the Property subject only to the Permitted Exceptions (as defined in Section 5.2). Buyer may instead elect to obtain an extended coverage ALTA owner’s policy of title insurance (“Extended Policy”) provided: (a) Buyer pays for all additional premiums and any other fees and costs attributable thereto, and (b) Buyer shall be solely responsible for the additional requirements for the issuance of the Extended Policy (such as an ALTA survey).

5.2 Permitted Exceptions. The term “Permitted Exceptions” as used herein shall mean the following described conditions and exceptions to title:

5.2.1 The TCE.

5.2.2 Matters affecting the condition of title created by or with the written consent of Buyer.

5.2.3 applicable laws;

5.2.4 Other exceptions to title disclosed by the Title Report (defined below) that have not been disapproved in writing by Buyer prior to the end of the Contingency Period (as defined in Section 6.1 below).

DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc

5.3 Representations. Seller hereby represents and warrants to Buyer as of the date hereof (which representations and warranties shall survive the Close of Escrow for a period of one (1) calendar year, and are being relied upon by Buyer in entering into this Agreement and purchasing the Property):
(i) Except with respect to the rights and obligations arising from the TCE, no leases affect the Property.
(ii) The Seller is not in default under the TCE, and to Seller’s actual knowledge, without investigation or inquiry, LA Metro is not in default thereunder. (iii) Seller has no actual knowledge (without investigation or inquiry) and has not received any notice from any governmental entity, tenant or other person or entity, that hazardous materials are present on the Property or that the Property does not comply with applicable law.

However, if Buyer becomes aware prior to the Close of Escrow that any of the foregoing representations or warranties is inaccurate, but nevertheless proceeds to close this transaction, then Buyer shall be deemed to have waived its rights with respect to the inaccuracy.

Buyer hereby represents and warrants to Seller as of the date hereof that:
(i) Buyer has authorized and approved this Agreement;
(ii) This Agreement does not violate any other agreements by which Buyer is bound; and
(iii) Under the California State Constitution, the Property is exempt from property taxes once it is acquired by the Buyer as property owned by a municipal corporation that is located within the municipality.

5.4 Title Report, Review and Approval. Promptly following the Effective Date, Buyer shall obtain an update of the preliminary report dated January 31, 2022 and issued under Order No. 92016976 from the Title Company, with hyperlinks to the underlying documents relating to the Schedule B exceptions set forth in such report (collectively, the “Title Report”), and shall deliver it (or cause the Title Company to deliver it) to Seller by email to [email protected]. Buyer shall have until the end of the Contingency Period (defined in Section 6.1) to review and approve the Title Report and the ALTA survey (“Survey”) that will be obtained by Buyer. Buyer shall notify Seller in writing within five (5) days before the end of the Contingency Period (defined in Section 6.1) of any disapproved matters in the Title Report and Survey, and if Seller does not indicate it will remove them by Close of Escrow, Buyer may terminate the Agreement by written notice to Seller prior to the end of the Contingency Period (or if Seller agrees to remove any and they are not removed at Closing, then Buyer may terminate) and the Deposit will be returned to Buyer. Any matters not so disapproved shall be a part of the Permitted Exceptions; however, Buyer hereby objects to any and all monetary encumbrances that may appear in the Title Report (except for the lien for assessments, if any, not yet due), all of which shall be removed therefrom by Seller at no cost to Buyer, and none of DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc
which shall be a Permitted Exception. Notwithstanding anything to the contrary in this Agreement, the Parties agree that the TCE is not a monetary encumbrance and shall be a Permitted Exception, provided it is not extended by Seller without the prior written consent of Buyer.

6. Suitability of Property and Property Documents.

6.1 Contingency Period. It is a condition precedent to the Close of Escrow for Buyer’s benefit that Buyer has determined, on or before the date that is thirty (30) days after the date of this Agreement (extended by sixty (60) days if (i) Buyer’s Phase I hazardous materials report recommends Phase II hazardous materials testing and (ii) Buyer notifies Seller in writing thereof and includes the Phase I with the notice) (the “Contingency Period”) that the Property and documents in Seller’s possession relating to the Property and title to the Property (including any Survey, and all title exceptions) are acceptable to Buyer.

Seller shall deliver copies of (a) the TCE, and (b) current real property assessment invoices if any relating to the Property to Buyer within five (5) business days after the Effective Date, and shall deliver to Buyer a Natural Hazard Disclosure Statement (“NHDS”) as soon as reasonably possible. The foregoing does not affect any obligation of Seller under applicable law to disclose all material facts about the Property known to Seller and not known to Buyer.

If Buyer determines that any such documents or the Property or title to the Property or the NHDS is not acceptable, then Buyer may terminate this Agreement by written notice to Seller on or before the end of the Contingency Period, and the Deposit shall be returned to Buyer.

If Buyer does not terminate this Agreement prior to the end of the Contingency Period, then the Deposit shall become nonrefundable (applied to the Purchase Price at the closing, or upon uncured default by Buyer, retained by Seller as liquidated damages), absent: (i) an uncured default by Seller and Buyer’s election to terminate this Agreement, or (ii) the failure of a condition to the closing to be satisfied or waived in writing by Buyer.

Upon the Close of Escrow and issuance of the Title Policy, Buyer shall rely solely on the Title Policy as to matters affecting title.

6.2 Right of Entry; Inspections, Testing. Prior to the end of the Contingency Period, Buyer may conduct, at Buyer’s sole expense, such inspections and testing of the Property, including the improvements thereon, as Buyer may desire or deem appropriate, in Buyer’s sole and absolute discretion, to determine the suitability of the Property for Buyer’s intended uses; however, Buyer acknowledges that Buyer must coordinate access with MTA.

Buyer shall not conduct any invasive testing at the Property without the prior written consent of Seller which consent shall not be unreasonably withheld or delayed; however: (i) if Seller does not give such consent for any reason, Buyer may terminate this Agreement by written notice to Seller given prior to the end of the Contingency Period, and (ii) if Seller consents, and such consent is not given within three (3) business days after written request of Buyer, then the Contingency Period shall be extended by any additional time (beyond the 3 business days) it takes for Seller to give such consent. Buyer shall reasonably repair and restore areas of the Property affected by Buyer’s inspections so that they are in substantially the same condition as DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc
before such inspections as soon as reasonably possible. Seller hereby grants to Buyer and its authorized employees, representatives, agents and contractors, permission and a license, upon forty-eight (48) hours prior written notice to Seller, to enter upon the Property at all reasonable times prior to the end of the Contingency Period for the purpose of conducting such inspections and testing. In the event the Property is occupied by any person(s) other than Seller, Seller shall make arrangements with such person(s) to ensure access by Seller its authorized employees, representatives, agents and contractors in order to conduct the inspections and testing pursuant to this section, provided, however, Buyer shall coordinate directly with Metro with respect to its entry upon the Property. Notwithstanding the foregoing, any such inspections or testing shall not unreasonably interfere with and shall be conducted in a manner as to minimize disruption of the tenant’s use of the Property. Buyer shall indemnify, protect, defend (with legal counsel reasonably acceptable to Seller) and hold Seller harmless from and against any and all claims, liabilities, damages, costs and expenses arising from, related to or caused by, Buyer’s entry upon the Property or the performance of any inspection or test conducted by or at the request of Buyer or its contractors or agents. To the extent that Buyer engages any third party to enter upon the Property, Buyer shall ensure that such third party obtains and maintains insurance in such amounts reasonably acceptable to Seller and shall name Seller as an additional insured. Buyer shall immediately provide written evidence of such insurance to Seller.

7. Seller’s Acts. Except only as permitted under this Agreement, Seller shall not encumber, sell or transfer, or agree to encumber, sell or transfer, the Property or any portion thereof or interest therein during the period from the Effective Date to the earlier of: (i) the Close of Escrow, or (ii) the date of the termination of this Agreement. Seller shall not extend the term of the TCE without the prior written consent of Buyer in Buyer’s sole and absolute discretion, and in connection therewith, Seller hereby waives any implied covenant of good faith and fair dealing applicable to such exercise of discretion by Buyer.

8. Deposit of Documents and Funds into Escrow. Seller and Buyer shall make the following deliveries to Escrow Holder at least one (1) business day prior to the Close of Escrow:

8.1 Buyer shall deliver a Certificate of Acceptance for the Grant Deed (duly executed by Buyer and acknowledged), the Purchase Price less the Deposit, and any additional funds required to pay costs payable by Buyer under Section 10 below.

8.2 Seller shall deliver the Grant Deed (duly executed by Seller and acknowledged), and federal and state tax withholding certificates so that tax withholding is not required of Escrow or Seller.

9. Authorization to Record Documents and Disburse Funds. Escrow Holder is hereby authorized to record the Grant Deed and Certificate of Acceptance, disburse funds to pay any liens encumbering the Property, apply funds to costs, deliver any remaining funds to Seller, and provide copies of the federal and state tax withholding certificates to Buyer (showing no withholding is required), provided each of the following conditions has then been fulfilled:

9.1 The Title Company can issue the Title Policy in favor of Buyer, with a liability amount equal to the Purchase Price, showing fee title to the Property vested in Buyer, subject only to the Permitted Exceptions.

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9.2 Seller and Buyer shall have deposited in Escrow the documents and funds required pursuant to Section 8 above.

Unless otherwise instructed in writing, Escrow Holder is also authorized to record at the Close of Escrow any instrument delivered through Escrow if necessary or proper for the issuance of the Title Policy.

10. Costs and Prorations.

10.1 Seller shall pay: (i) fifty percent (50%) of the fees and charges of Escrow Holder, and (ii) the cost of the premium for a standard coverage Title Policy (excluding extended coverage, which if applicable shall be paid by Buyer). Buyer shall pay for the other fifty percent (50%) of the fees and charges of Escrow Holder, and the extra/incremental cost for extended title insurance coverage (if required by Buyer).

10.2 If the Escrow shall fail to close due to Buyer’s default, then Buyer shall pay all Escrow and title cancellation charges. If the Escrow shall fail to close due to Seller’s default, Seller will pay all Escrow and title cancellation charges.

10.3 If the Escrow shall fail to close for any reason other than Seller’s or Buyer’s default, Buyer and Seller shall each pay one-half (½) of any applicable Escrow cancellation charges.

10.4 Property taxes shall not be prorated as Buyer is tax-exempt; however, Buyer shall cooperate with Seller in good faith to obtain any refund of property taxes overpaid by Seller (i.e., allocable to the period after the Close of Escrow). Any assessments shall be apportioned and prorated with respect to the Property as of 12:01 a.m., on the day on which the Close of Escrow occurs, as if Buyer were vested with title to the Property during the entire day upon which the Close of Escrow occurs. To the extent that the actual assessments for the current year differ from the amount apportioned at the Close of Escrow, the parties shall make all necessary adjustments by appropriate payments between themselves following the Close of Escrow. All delinquent taxes and assessments (and any penalties therein) for periods prior to the Close of Escrow, if any, affecting the Property shall be paid by Seller.

10.5 All prorations shall be determined on the basis of a 360-day year.

10.6 The provisions of this Section 10 shall survive the Close of Escrow.

11. Buyer’s Conditions. Buyer’s obligations under this Agreement are expressly made subject to the following conditions precedent solely for the benefit of Buyer. The Close of Escrow and Buyer’s obligation to consummate the purchase of Property shall be contingent upon and subject to the occurrence of all of the following (or Buyer’s written waiver thereof, it being agreed that Buyer can waive any or all such contingencies) on or before the Close of Escrow:

11.1 Title Company committing to issue an owner’s title policy in favor of Buyer with a liability amount in the amount of the Purchase Price showing Buyer’s fee interest in the Property subject only to the Permitted Exceptions (the “Title Policy”).

DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc

11.2 Seller’s delivery of all documents and funds required to be delivered by Seller under Section 8.2.

If any of the foregoing conditions precedent has not been either met or expressly waived in writing by Buyer on or prior to the last date for the Close of Escrow, then Buyer may terminate this Agreement upon written notice to Seller.

12. Seller’s Conditions. For the benefit of Seller, the Close of Escrow and Seller’s obligation to consummate the sale of the Property shall be contingent upon and subject to the Buyer delivering all documents and funds required to be delivered by Buyer under Section 8.1 above on or before the Close of Escrow.

13. Seller’s Delivery of Documents. Prior to or upon the Close of Escrow, Seller shall deliver to Buyer all material documents (including warranties) relating to the Property to the extent in the possession of Seller (and not previously delivered to Buyer), and all personal property shall be removed by Seller unless permitted by the TCE to remain. Seller’s obligations hereunder shall survive the Close of Escrow.

14. Condemnation; Destruction. All risk of loss with respect to the Property shall remain with Seller until the Close of Escrow.

15. Waiver of Any Rights Pursuant to Code of Civil Procedure Section 1245.245.

Seller has reviewed Code of Civil Procedure Section 1245.245. Seller expressly waives any rights that it may have pursuant to Code of Civil Procedure Section 1245.245 to re-purchase the Property from Buyer if Buyer has not used the Property in connection with the Project within ten (10) years of the sale of the Property to Buyer.
______________________
Seller’s Initials
The provisions of this Section will survive the Close of Escrow.

16. Relocation Assistance. In consideration for the Purchase Price, Buyer shall have no obligation to Seller under any federal or state relocation laws or regulations, including without limitation, the California Relocation Assistance and Real Property Acquisition statutes and guidelines. Seller waives and forever releases Buyer, including its successors, officers, employees, attorneys, agents, representatives and anyone else acting on Buyer’s behalf, of and from any and all claims, demands, actions or causes of action, obligations, liabilities, or claims for further compensation by or to Seller or its successors-in-interest relating to the matters described in this Section, known or unknown, based upon or relating to the facts or allegations and circumstances arising from Buyer’s acquisition of the Property. By such release, Seller expressly waives its rights, if any, under California Civil Code Section 1542 which provides:
“A General Release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release which if known by him must have materially affected his settlement with the debtor.” DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc
_______________________
Seller’s initials

17. As Is. Buyer acknowledges and agrees that, except only as provided in Section

5.3 above, Seller has not made, does not make and specifically negates and disclaims any representations, warranties, promises, covenants, agreements or guaranties of any kind or character whatsoever, whether express or implied, oral or written, past, present or future, of, as to, concerning or with respect to (a) the value, nature, quality or condition of the Property, (b) the suitability of the Property for any uses which Buyer may conduct thereon, (c) the compliance of the Property with any laws, regulations, codes, or ordinances, (d) the zoning of the Property, (e) any governmental approvals or agreements concerning the Property, (f) the physical, environmental, title, regulatory, financial, or leasing condition of the Property, or (g) any other matter with respect to the Property. Buyer further acknowledges and agrees that having had the opportunity to inspect the Property, Buyer is relying solely on its own investigation of the Property. Buyer further acknowledges and agrees that the sale of the Property as provided for herein is made on an “as is” and “with all faults” basis. Effective upon the Closing Date, Buyer and anyone claiming by, through or under Buyer hereby fully and irrevocably releases Seller, its members, managers, permitted assignees, employees, representatives, and agents (collectively, the “Seller Parties”) from any and all claims that it or they may now have or hereafter acquire against Seller or the Seller Parties for any cost, loss, liability, damage, expense, demand, action or cause of action arising from or related to any matters affecting the Property, except that the foregoing does not affect any obligation of Seller under applicable law to disclose all material facts about the Property known to Seller and not known to Buyer. This release includes claims of which Buyer is presently unaware or which Buyer does not presently suspect to exist in its favor which, if known by Buyer, would materially affect Buyer’s release of Seller, except that the foregoing does not affect any obligation of Seller under applicable law to disclose all material facts about the Property known to Seller and not known to Buyer. Buyer specifically waives the provisions of California Civil Code Section 1542, which provides as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO

EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE

RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE
DEBTOR OR RELEASED PARTY.”
_______________
Initials of Buyer

18. Notices. All notices and demands shall be given in writing by certified mail, postage prepaid, and return receipt requested, or by reputable overnight messenger service, but must also be given by email. Notices shall be considered given upon the earlier of (a) one (1) business day following delivery to a reputable overnight messenger service (such as Federal Express for overnight delivery), or (b) two (2) business days following deposit in the United States mail, postage prepaid, certified or registered, return receipt requested (provided the notice is also given by mail). Notices shall be addressed as provided below for the respective party; DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc
provided that if any party gives notice in writing of a change of name or address, notices to such party shall thereafter be given as demanded in that notice:

Buyer: City of Beverly Hills
455 North Rexford Drive
Beverly Hills, California 90210
Attn: Logan Phillippo
Seller: BHL Gale MGMT, LLC
9454 Wilshire Blvd, Suite 525
Beverly Hills, CA 90211

19. Broker’s Commissions. Each party represents to the other that it has not engaged any broker, finder or salesperson in connection with this transaction. Each party shall defend, indemnify and hold the other party harmless from and against any and all claims for any other broker’s commissions or similar compensation that may be payable to any other broker, finder or other person or entity based upon such party’s agreement, statement or acts. The provisions of this Section shall survive the Close of Escrow.

20. Standard Escrow Instructions. Each party agrees to execute Escrow Holder’s supplemental reasonable standard instructions as may be necessary or proper in order to consummate the transactions contemplated by this Agreement, provided they are consistent with this Agreement.

21. Time is of the Essence. Time is of the essence with respect to each term, condition and covenant hereof in which time is a factor.

22. Successors and Assigns. The provisions of this Agreement are expressly binding upon, and shall inure to the benefit of, the parties hereto and their successors in interest and assigns.

23. Entire Agreement. This Agreement, together with all exhibits hereto, integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof.

24. Severability. Invalidation of any of the terms, conditions, covenants, or other provisions contained herein by judgment or court order shall in no way affect any of the other terms, conditions, covenants, or provisions hereof, and the same shall remain in full force and effect.

25. Attorneys’ Fees. In the event that suit is brought for the enforcement of this Agreement or as the result of any alleged breach thereof, the prevailing party or parties in such suit shall be entitled to recover their reasonable attorneys’ fees, costs, and expenses from the losing party or parties, and any judgment or decree rendered in such proceedings shall include an award thereof.

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26. Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

27. Counterparts; DocuSign. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the same instrument. For purposes of this Agreement, emailed (PDF) signatures shall be deemed to be original signatures, and shall be followed by the prompt overnight delivery of original signature pages. This Agreement may be executed using DocuSign, in which case original signatures need not be provided.

28. Authority of City Manager. The City Manager of Buyer shall have the authority to give all consents, approvals and notices by the Buyer hereunder provided they are in writing.

29. Tax-Deferred Exchange. As a result of Recital C, Seller may, in its sole discretion, utilize a 26 U.S.C. §1033 Exchange for the Closing of the sale, at no cost or expense to Buyer, and in such event, each party shall cooperate with the other in facilitating the §1033 Exchange. For purposes of the Agreement, the term “cooperate” shall include Buyer delivering to Seller a letter, prior to close of escrow, articulating the threat of condemnation from the City of Beverly Hills with respect to this transaction, as described below. Seller may use the proceeds from the sale of the Property to effect one (or more) tax-deferred exchange(s) under §1033.

Seller will have the right, expressly reserved here, to elect such tax-deferred exchange at any time before the Closing Date. Seller and Buyer agree, however, that consummation of the purchase and sale of Property under this Agreement is not conditioned on such exchange and may not be delayed by such exchange. If Seller elects to make a tax-deferred exchange, Buyer agrees to execute such additional escrow instructions, deeds, documents, agreements, letter or letters as described below, or instruments to effect this exchange, provided that Buyer shall incur no additional cost, expense or liability (whether actual or contingent) in this transaction as a result of or in connection with the exchange and shall not be required to take title to any other property, except the Property, as part of such exchange transaction. Seller agrees to hold Buyer harmless from any liability, damages, or costs, including reasonable attorneys’ fees, that may arise in connection with such exchange.

On or before the Closing, Buyer shall deliver to Seller a “Threat of Condemnation Letter” from the City of Beverly Hills signed by Buyer that includes substantially the following language:
“This letter is written with respect to the Property described above. The Property is located within the City of Beverly Hills (“City”). Pursuant to City’s police powers, the City may acquire real property by condemnation for any lawful public purpose, including for public transportation and related public services in connection with the proposed Metro Station at Wilshire and La Cienega, now under construction, and all uses necessary or convenient thereto. City desires to acquire the Property for the purposes of facilitating such transportation-oriented and related uses. Were you, as Seller, unwilling to convey the Property to the City, City staff would have commenced and continued the legally required steps which, assuming the City’s governing body’s ability to make the findings and determinations required by law, would lead to the initiation of an action in DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc
eminent domain for the City’s acquisition by eminent domain of the Property.

The City acknowledges that your entry into the Agreement for the sale of Subject Property to City as Buyer was in lieu of the City’s attempting to acquire the Property by condemnation such that you entered into the Agreement under the threat or imminence of condemnation.”

30. Further Assurances. Buyer and Seller agree to execute such other and further documents and instruments as may be reasonably necessary or appropriate to carry out the purposes of this Agreement and to effectuate the transfer of the Property to Buyer.

31. No Third Party Beneficiaries. There are no third party beneficiaries of this Agreement.

32. Cure Rights for Default. Neither Buyer nor Seller shall be in default hereunder unless it fails to cure the alleged default with five (5) business days after written notice of the default is delivered by the party alleging the default to the party who is alleged to be in default.

IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written.

BUYER/CITY: SELLER:

CITY OF BEVERLY HILLS
By:

Nancy Hunt-Coffey,
City Manager

APPROVED AS TO FORM
By:

Laurence S. Wiener,
City Attorney

APPROVED AS TO CONTENT
By:

Ryan Gohlich,
Assistant City Manager

EMCAP BHL, LLC
a California limited liability company
By: _________________________
Farzin Adam Emrani,
Authorized Signatory

IA GALE, LLC
a California limited liability company
By: _________________________
Isaac Gabai,
Authorized Signatory
NES 111, LLC
a California limited liability company
By: _________________________
Amir Dar, Trustee

DAR LIVING TRUST DATED
8/5/16
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GSH GALE, LLC
a California limited liability company
By: _________________________
Gabriel Halimi, Trustee

THE GSH LIVING TRUST
DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc
EXHIBIT “A”

LEGAL DESCRIPTION OF THE LAND

THE LAND IN THE CITY OF BEVERLY HILLS, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

LOT 438 OF TRACT NO. 4988, IN THE CITY OF BEVERLY HILLS, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 54, PAGES 98 AND 99 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

TOGETHER WITH ALL RIGHT, TITLE AND INTEREST IN AND TO THAT CERTAIN OIL AND GAS LEASE DATED JULY 18, 1979 BY AND BETWEEN CARL FREEDMAN, BEVERLY FREEDMAN AS LESSOR AND CHEVRON U.S.A., INC., A CORPORATION AS LESSEE, RECORDED ON OCTOBER 12, 1979 AS INSTRUMENT NO. 79-1148725, OFFICIAL RECORDS.

DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc
EXHIBIT “B”

FORMS OF GRANT DEED AND CERTIFICATE OF ACCEPTANCE
(Attached.)
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RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO:

CITY OF BEVERLY HILLS
455 North Rexford Drive
Beverly Hills, California 90210
Attn.: City Clerk
APN: 4334-022-063
______________________________________________________________________________ [SPACE ABOVE FOR RECORDER’S USE ONLY]
THE UNDERSIGNED GRANTOR DECLARES AS FOLLOWS:

This transfer is exempt from Documentary Transfer Tax pursuant to Revenue & Taxation Code Section 11922 (conveyance to a public entity). Property is in the City of Beverly Hills, County of Los Angeles.

GRANT DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, EMCAP BHL LLC, LLC, a California limited liability company, IA GALE, LLC, a California limited liability company, NES 111, LLC, a California limited liability company, and GSH GAL LLC, a California limited liability company (collectively, “Grantor”) hereby grant to the CITY OF BEVERLY HILLS, a California municipal corporation (“Grantee”), the land located in the City of Los Angeles, County of Los Angeles, State of California, more particularly described on Exhibit “A”, and all improvements and fixtures thereon (the “Property”), subject to all matters of record and all matters visible upon inspection.

IN WITNESS WHEREOF, Grantor has duly executed this Grant Deed.

EMCAP BHL, LLC,
a California limited liability company
By: _________________________
Farzin Adam Emrani,
Authorized Signatory

IA GALE, LLC,
a California limited liability company
By: _________________________
Isaac Gabai,
Authorized Signatory
DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc
NES 111, LLC,
a California limited liability company
By: _________________________
Amir Dar, Trustee
DAR LIVING TRUST DATED 8/5/16

GSH GALE, LLC,
a California limited liability company
By: _________________________
Gabriel Halimi, Trustee

THE GSH LIVING TRUST
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EXHIBIT “A” TO GRANT DEED

LEGAL DESCRIPTION

THE LAND IN THE CITY OF BEVERLY HILLS, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS:

DocuSign Envelope ID: 2AC58A72-E977-4B5A-89FC-B1463596D378 DocuSign Envelope ID: 915F7841-E6D2-44F7-B6B4-F42FC0FA5FC3 B0785-0001\2880721v5.doc
State of California )
County of Los Angeles )
On _________________________, before me, ,
(insert name and title of the officer)
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.