4. Relationship of Parties. 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, with the only relationship between the Parties being that of a government entity regulating the development and use of real property.
5. Term of Agreement. The term of this Agreement shall commence on the Effective Date and continue in full force and effect for a period of twenty (20) years (“Term”), unless such Term is earlier amended or terminated in the manner set forth in Section 14 of this Agreement .
Notwithstanding the foregoing, s o long as there are no material changes to the Project and Developer is not then in material breach of this Agreement, the Term of this Agreement shall automatically renew and extend for successive terms of five (5) years each without notice of demand by either Party.
6. Development and Use of the Property.
A. Governing Rules. Developer shall have the vested right to develop and use the Property in the manner permitted by the Project Entitlements and the Existing Standards; provided that Developer shall comply with the terms and conditions of the Reciprocal Easement and Maintenance Agreement ; and provided further , that Developer shall obtain any Subsequent Approvals required by governmental entities with jurisdiction over the Property. Subject to City’s exercise of its Reserved Powers, the maximum height and size of the proposed buildings, parking requirements, setbacks, development standards, provisions for reservation or dedication of land for public purposes and location of public i mprovements, and the design, improvement, construction and other guidelines, standards and specifications applicable to the development and use of the Property shall be those set forth in the Project Entitlements . The payment of fees associated with the construction of the Project, including land use approvals, development fees, building permits, shall be pursuant to those fees in effect as of the Effective Date.
B. Existing Standards. Unless expressly provided otherwise in th is Agreement , all substantive and procedural requirements and provisions contained in City’s ordinances, specific plans, rules and regulations, including but not limited to the City’s General Plan, ECSP, Buena Park Municipal Code, or Zoning Code, in effect on the adoption date of the ordinance approving this Agreement shall govern use and development of the Property (“Existing Standards”).
C. Subsequent Approvals. In addition to the Project Entitlements, certain other permits and approvals from City or other governmental agencies with jurisdiction over the Property will be necessary for Developer to construct the Project on the Property including, without limitation:
demolition permits, excavation permits, grading permits, building permits, sewer and water connection permits, utility connections, and/or certificates of occupancy (“Subsequent Approvals”). The conditions, terms, restrictions, and requirements associated with any Subsequent Approval shall be consistent with the Existing Standards except as otherwise specified in the Project Entitlements. City shall in good faith review, consider, and make a final determination on any application from Developer for a Subsequent Approval, and so long as Developer is not then in breach of this Agreement, City shall not unreasonably deny or delay any Subsequent Approvals that are consistent with the Project Entitlements and Existing Standards.
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D. Minor Changes to Project . Upon written application of Developer to City, minor modifications and changes to the Project Entitlements may be approved by the Director of Community and Economic Development pursuant to the interdepartmental review process set forth in of Section 19.128.100 of the Zoning Code , as such minor changes are defined in
19.128.100.B. (“Minor Changes”). Minor Changes shall not be deemed to be an amendment to this Agreement for purposes of Government Code Section 65868.
E. Major Changes to Project. Any changes or modification to the Project other than Minor Changes shall require an amendment to this Agreement in the manner specified by Government Code Section 65868.
F. Changes in Applicable Rules.
1) Non-Application of Changes in Applicable Rules. The adoption of any subsequent applicable general or specific plan, zoning, subdivision, or building regulation after the Effective Date, or any change in, or addition to, the Existing Standards that would, absent this Agreement, be applicable to the Property and that conflicts in any way with or is more restrictive than the Existing Standards shall not be applied to the Property during the Term of this Agreement, unless such changes represent an exercise of the City’s Reserved Powers and do not materially interfere with Developer’s use of the Property.
2) Changes in Uniform Codes . Notwithstanding any provision of this Agreement to the contrary, the Property shall be subject to changes occurring from time to time in the provisions of the City’s building, fire, seismic, mechanical, plumbing electrical, or similar health and safety regulations which become applicable within the City’s jurisdiction, including, but not limited to, the California Building Code and other similar or related uniform codes.
3) Changes Mandated by Federal or California Law . Changes or additions to the Applicable Rules after the Effective Date shall apply to the Property if and to the extent mandated by the applicable California or federal law or regulations to be applied . If either Party believes that such a change or addition exists, then the applicable Party shall provide the other with a copy of such law or regulation and a statement of the nature of the change and any responsive action required. In the event any such changes in law or regulation prevent or preclude compliance with one or more of the provisions of this Agreement, such provisions shall be modified or suspended, or performance thereof delayed, as may be necessary to comply with such changes. In the event that the application to the Project of any of the City’s Reserved Powers, or any change in California or federal law or regulation, materially impact the financial viability of the Project as demonstrated by Developer based upon a showing of s ubstantial evidence, then City and Developer agree to meet and negotiate potential modifications or revisions to this Agreement provided that any amendment (other than a Minor Change) or cancelation of this Agreement shall require compliance with Government Code Section 65868.
4) Future Discretionary Approvals . City shall not require Developer obtain any entitlements, approvals or permits for the Project other than those permits or approvals that are required by the Existing Standards or Reserved Powers. However, any application by Developer for a Minor Change, Major Change, or other change to uses, intensity, density, or building height,
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or decreases the lot area, setbacks, yards, parking or other development standards permitted on the Property by the Project Entitlements, shall be subject to the rules, regulations, ordinances and official policies of City in effect at the time of Developer’s application.
5) Future Consistent Enactments. City may apply any and all new ordinances, rules, or laws and regulations adopted after the Effective Date to the Property so long as such new ordinances, rules and regulations apply jurisdiction-wide and do not conflict with the Existing Standards or Project Entitlements.
G. Project Development Schedule.
1) Construction and Opening . With the exception for Permitted Delays, Developer shall commence and pursue with reasonable diligence and without interruption the completed construction of the Project in accordance with the Schedule of Performance. Notwithstanding the foregoing, the Parties acknowledge that Developer cannot at this time predict when or the rate at which the Project will be developed. Developer may, in Developer’s sole discretion, build the Project in phases, provided doing so is consistent with the Project Entitlements. Decisions about the timing and phasing of construction depend upon numerous factors not all of which are within the control of Developer, such as market orientation and demand, availability of financing and competition. Because the California Supreme Court held in Pardee Construction Co. v. City of Camarillo, 37 Cal.3d 465 (1984), that the failure of the Parties therein to provide for the timing of development permitted a later adopted initiative to restrict the timing of development and control the Parties’ agreement, Developer and City acknowledge and provide for the right of Developer to develop the Project in an order and at a rate and times as Developer deems appropriate within the exercise of its sole and subjective business judgment, subject to the Schedule of Performance and any restrictions that may exist in the Project Entitlements. Developer shall use its best efforts, in accordance with its own business judgment and taking into consideration market conditions and other economic factors influencing its business decision, to promptly commence and timely complete construction of the Project.
2) Permitted Delays. Neither Party shall be deemed in default and performance shall be excused where delays or defaults are caused unavoidably and beyond the reasonable control of the Party seeking the delay by a Force Majeure event. An extension of time for any such cause shall be for the period of the delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause. If notice is se nt after such sixty (60) day period, then the extension shall commence to run no sooner than sixty (60) days prior to the giving of such notice. Times of performance under this Agreement may also be extended in writing by the mutual agreement of the City M anager and Developer. Developer’s inability or failure to obtain financing shall not be deemed to be a cause outside the reasonable control of the Developer and shall not be the basis for a permitted delay.
3) Expiration of Developer’s Vested Rights . This Agreement and Developer’s vested right to proceed with construction and operation of the Project on the Property in accordance with this Agreement shall expire if, subject to Permitted Delays : (a) construction of the Project is not commenced by the deadline established in the Schedule of Performance , or
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within six (6) months of the issuance of building permits, whichever last occurs ; or (b) if construction is commenced but the building permits authorizing such construction work expire before a final certificate of occupancy is issued for all buildings comprising the Project.
H. Access During Construction . For the purposes of assuring compliance with this Agreement during construction, representatives of City shall have the reasonable right of access to the Property. To ensure safety, the City Representative shall request approval for such access with at least twenty-four (24) hours’ notice to Developer, and Developer’s approval shall not be unreasonably delayed, conditioned, or withheld. The right of access described in this subsection shall expire upon the Certificate of Occupancy. The rights of access described in this subsection are in addition to any rights or remedies specified in general laws that City may possess as a governmental or law enforcement agency.
I. Permitted Use of the Property. The uses allowed on the Property, as well as the density and intensity of such uses, the maximum height and size of proposed buildings, and other terms and conditions applicable to the Property shall be those set forth in the Project Entitlements, subject to the terms and conditions of the Reciprocal Easement and Maintenance Agreement.
J. Quality and Character of Project . Developer shall construct, and complete the Project (including all structures, improvements, landscaping, hardscape, signage, and site amenities) to a standard consistent with a first -class tourist attraction and entertainment destination, using new materials, commercially standard workmanship, and finishes appropriate to a regionally significant visitor -serving facility offering similar services or uses . All exterior and interior materials, finishes, colors, and textures used in the Project shall be of a quality consistent with or superior to those used in comparable first -class entertainment destinations offering similar services or uses. The Developer shall use durable, high-quality finish materials including, but not limited to, masonry, stone, architectural concrete, painted or textured stucco, wood, metal, or glass where visible from public areas, and to the extent commercially reasonable in the Developer’s opinion, shall avoid the use of materials that are prone to rapid deterioration, fading, or visual degradation under normal Southern California environmental conditions. The Project shall be constructed in a manner consistent with and in furtherance of the goals of the City of Buena Park Entertainment Corridor Specific Plan (ECSP), which envisions the area as a premier tourist and entertainment destination. In furtherance of that vision, the De veloper acknowledges that the City's intent in approving this Agreement is to ensure that the Project complements and enhances the character of the surrounding entertainment corridor, and that the overall quality of design, materials, and public-facing finishes shall be consistent with a destination of regional and national significance. Provided the Developer completes the Project in accordance with the Plans approved by the City, Developer shall be deemed to be in compliance with such requirements.
K. Maintenance and Operation of the Property. At all times during the Term, Developer shall own, manage, and maintain the Property in accordance with all applicable local, state and federal laws and regulations, except to the extent the Property is exempt by way of this Agreement.
Developer shall not engage or permit any activities or conditions to exist on the Property that at materially detrimental to the subject property or surrounding properties or which would constitute a public nuisance as defined with reference to local or state law. Throughout the term of this Agreement, Developer (or its successor or assignee) shall maintain the Project, all structures,
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improvements, landscaping, hardscape, and site amenities in a clean, safe, and well -maintained condition consistent with the standard of a first -class tourist and entertainment facility.
Maintenance obligations shall include, without limitation: All building exteriors, facades, roofing, and structural elements shall be maintained free from visible deterioration, peeling paint, cracking finishes, damaged cladding, rust, or other conditions inconsistent with the first -class standard described in Section J above, subject to standard wear and tear, all signs and lighting fixtures shall be maintained in good working order and consistent with the approved sign program. Inoperable or visibly damaged signage shall be repaired or replaced promptly following the discovery or notice, all landscaping shall be maintained in a healthy, well-irrigated, and aesthetically pleasing condition, subject to applicable weather conditions which are outside the control of Developer .
All hardscape, paving, walkways, and enhanced paving features shall be kept in good repair and free of cracking, chipping, fading, or deterioration inconsistent with the first -class standard , subject standard wear and tear, all guest-accessible interior areas, including themed environments, finishes, fixtures, and furnishings, shall be maintained at a quality level consistent with a first - class entertainment attraction, subject standard wear and tear.
L. Taxes and Assessments ; Liens. Developer shall pay or cause to be paid when due all real estate taxes and assessments associated with the Property. Developer shall not default of any recorded encumbrance or lien that is secured by the Property, including but not limited to any mortgage, trust deed, tax lien, contractor lien, or other similar recorded instrument, and shall promptly remove or duly satisfy any such recorded lien within a reasonable time but in all instances prior to a sale thereunder. Notwithstanding the foregoing, Developer may in good faith contest the validity or grant of any recorded lien or tax assessment, provided that notice of such intent to contest is provided to the City and any payment due shall be made immediately upon final resolution of any such contest or as may otherwise be required by law.
M. Obligation to Refrain from Discrimination. Developer covenants and agrees that there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, age, handicap, race, color, religion, creed, national origin or ancestry in the sale, transfer, use, occupancy, tenure or enjoyment of the Property, and Developer (itself and any person claiming under or through Developer) shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection , location, number, use or occupancy of vendors of the Project or any portion thereof.
N. Costs of Entitlements and Development. Developer agrees that all costs, expenses, and fees associated with ownership of the Property , and design, development , construction, and operation of the Project, shall be borne by Developer.
7. Cooperation by the Parties . The Parties, and each of them, agrees that the Property is permitted and restricted to the uses, intensity of use and density that are permitted by the Project Entitlements. Neither Party will unreasonably delay, withhold or unreasonably condition any future discretionary action or approval which may be necessary in order for the Project to proceed, provided that the other Party reasonably and satisfactorily complies with all preliminary procedures, actions, payments of fees, and criteria generally required of developers in the City of by this Agreement. City further agrees to cooperate with Developer in Developer’s endeavors to obtain permits and approvals as may be required from other governmental or quasi-governmental
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agencies having jurisdiction over the Property or portions thereof (such as, for example, without limitation, public utilities or utility districts and agencies having jurisdiction over transportation facilities and air quality issues), so long as the cooperation by City will not require City to incur any cost, liability or expense without adequate indemnity against or right of reimbursement therefor from Developer, provided such costs shall be commercially reasonable and Developer shall be informed of such expenses prior to the City incurring such costs.
8. Review of Developer’s Compliance.
A. Annual Reviews. During the Term of this Agreement and upon at least sixty (60) days’ prior written notice, City may conduct annual reviews in accordance with this section to determine whether Developer is acting in good faith compliance with the provisions of this Agreement pursuant to Government Code Section 65865.1.
B. Special Reviews. In addition, upon at least thirty (30) days’ prior written notice, the City Council may order a special periodic review in accordance with this section to determine Developer’s compliance with this Agreement at any time if it believes, on basis of substantial evidence presented to it, that Developer may be in material default of this Agreement.
C. Developer Participation. Developer, at no cost to the Developer, covenants and agrees to cooperate in good faith with the City in connection with any annual or special review, including without limitation by responding to inquiries with reasonable diligent and providing access to documents, records, or other information reasonably necessary for the City to meaningfully evaluate Developer’s compliance with this Agreement.
D. Costs of Reviews. The costs and expenses incurred by the Parties in completing or participating in any review shall be borne by the Party incurring the cost. Notwithstanding the foregoing, if any such annual or special review by the City demonstrates, with reference to documentary or other verifiable evidence, that Developer is in material default under the provisions of this Agreement , and Developer fails to remedy or cure the default in the manner described in subsection F. of this section, then Developer shall reimburse the City for reasonable documented costs incurred in conducting the review, provided such shall not be done by a third - party being compensated on a contingency basis and provided such expense shall not exceed $5,000.00.
E. Procedure for Review . The City Manager, or his or her designee, will conduct the reviews contemplated by this section to ascertain whether Developer has developed, used, and maintained the Property in good faith compliance with this Agreement during the period of time covered by the review. The City Manager shall give Developer written notice that any such review has commenced, and Developer shall have at least thirty (30) days after Developer’s receipt of such notice to provide such information as Developer deems reasonably necessary for City to complete such review. In addition, Developer shall furnish such other documents or information as may be reasonably requested by the City Manager.
F. Result of Review.
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1) Compliance. After completing a review, the City Manager will issue to Developer an executed certificate of compliance covering the period of such review , unless the City finds and determines, on the basis of substantial evidence, that the Developer has not complied in good faith with the terms or conditions of the Agreement.
2) Noncompliance. If, following such a review, City Representative finds and determines, on the basis of documentary or other verifiable evidence , that Developer has not complied in good faith with the terms and conditions of the Agreement, the City Manager shall provide notice to Developer detailing such non -compliance. Upon receipt of such notice, Developer may commence to cure the stated non-compliance in accordance with the terms of this Agreement. If Developer fails to cure the non -compliance within 120 days after receipt of such written notice (or such longer commercially reasonable period provided that Developer has commenced the cure and diligently pursues such cure) pursuant to the terms of this Agreement, the City Manager shall notify the Planning Commission, which may recommend to City Council that the Agreement be modified or terminated pursuant to the terms hereof. Developer shall have the ability to dispute any such claim of non-compliance or failure to cure at a public hearing prior to such termination.
3) Effect on Default Procedures . Nothing in this Section 8 is intended or shall be interpreted to supersede, replace, or prevent City or Developer from pursuant the notice and default procedures of Section 15 hereinbelow, which are in addition to and independent of the review, default, and cure procedures specified in this section.
9. Rights of Lenders Under this Agreement.
A. Lenders’ Rights. Should Developer place or cause to be placed any encumbrance or lien on the Property (“Deed of Trust”), or any part thereof, the City acknowledges the beneficiary ("Lender") of said Deed of Trust shall have the right at any time during the term of this Agreement and the Deed of Trust to:
1) Do any act or thing required of Developer under this Agreement, and any such act or thing done or performed by Lender shall be as effective as if done by Developer;
2) Realize on the security afforded by the Deed of Trust by exercising foreclosure proceedings or power of sale or other remedy afforded in law or in equity or by the security document evidencing the Deed of Trust;
3) Transfer, convey or assign the title of Developer to the Property to any purchaser at any foreclosure sale, whether the foreclosure sale be conducted pursuant to court order or pursuant to a power of sale contained in a Deed of Trust; and
4) Acquire and succeed to the interest of Developer in the Property by virtue of any foreclosure sale, whether the foreclosure sale be conducted pursuant to a court order or pursuant to a power of sale contained in a Deed of Trust.
5) Should any Lender require or request an amendment of this Agreement with
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respect to the rights and remedies granted to a Lender in this Section 10 , City hereby agrees to execute and deliver such an amendment so long as the proposed amendment does not materially and adversely affect the rights, powers, and remedies of City with respect to a default by Developer hereunder.
B. Notice to Lender . If identifiable by City with reference to a title report dated within thirty (30) days before the notice, or as otherwise made known to City by Lender’s delivery of documented notice (via certified or first class mail) to City, City shall give written notice of any default or breach by Developer of this Agreement to Lender and afford Lender the opportunity after service of the notice to:
1) Cure the breach or default within thirty (30) days after service of said notice, where the default can be cured by the payment of money;
2) Cure the breach or default within thirty (30) days after service of said notice where the breach or default can be cured by something other than the payment of money and can be cured within that time; or
3) Cure the breach or default in such reasonable time as may be required where something other than payment of money is required to cure the breach or default and cannot be performed within thirty (30) days after said notice, provided that acts to cure the breach or default are commenced within a thirty (30) day period after service of said notice of default on Lender by City and are thereafter diligently continued by Lender.
C. Action by Lender . Notwithstanding any other provision of this Agreement, a Lender may forestall any action by City for a breach or default by Developer of this Agreement by commencing proceedings to foreclose its encumbrance or lien on the Project. The proceedings so commenced may be for foreclosure of the encumbrance by order of court or for foreclosure of the encumbrance under a power of sale contained in the instrument creating the encumbrance or lien. The proceedings shall not, however, forestall any such action by the City for the default or breach by Developer unless:
1) They are commenced within thirty (30) days after service on Lender of the notice described hereinabove;
2) The proceedings are, after having been commenced, diligently pursued in the manner required by law to completion; and
3) Lender keeps and performs all terms, covenants and conditions of this Agreement that pertain to the payment or expenditure of money by Developer until the foreclosure proceedings are complete or are discharged by redemption, satisfaction or payment.
D. Estoppel. City shall from time to time, within 15 days following the receipt of a request by Developer or a Lender secured by the Property, deliver to Developer or such Lender a written statement executed by City in form and substance reasonably satisfactory to Developer and such Lender, (i) stating that th is Agreement is in full force and effect and has not been modified or
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amended (or if modified or amended, setting forth all modifications and amendments), (ii) stating whether or not to the best knowledge of City, Developer is in default of th is Agreement and if Developer is in default, setting forth the specific nature of all such defaults, and (iii) as to any other matters reasonably requested by Developer or such Lender. City acknowledges that any statement delivered pursuant to this subsection may be relied upon by a Lender or by any assignee of such Lender or anyone claiming by, under or through such Lender.
10. Notices. Any notice required to be given by the terms of this Agreement shall be provided by certified mail, return receipt requested, at the address of the respective parties as specified below or at any other such address as may be later specified by the parties hereto.
To City: City of Buena Park
Buena Park City Hall
ATTN: City Manager
6650 Beach Boulevard
Buena Park CA 90622
With Copy To: City of Buena Park
Buena Park City Hall
ATTN: City Attorney
6650 Beach Boulevard
Buena Park CA 90622
To Developer: Buena Park Boardwalk, LLC
9500 E Via de Ventura, Suite E100
Scottsdale, AZ 85256
Attn: Adi Knishinsky
11. Assignment. Developer acknowledges that the identity, experience, and capacity of Developer are of particular concern to City, and it is because of Developer's identity that City has entered into this Agreement with Developer. Developer’s identity, experience, and capacity to complete the Project are important to City. Except for deeds of trust to secure construction funds, as permitted in the Purchase Agreement, Developer shall not assign or transfer this Agreement or Property, in whole or in part, without the advance written approval of City, which City may grant or deny in the exercise of its sole and independent discretion. Notwithstanding the foregoing: (a) Developer may at any time transfer up to an aggregate of forty-nine percent (49%) of the direct or indirect ownership interests in Developer upon prior written notice to City without need for the Agency's consent or approval, and any such transfer shall be regarded as a permitted transfer and shall not result in any loss of rights or powers under this Agreement, provided that Adi Knishinsky, Amram Knishinsky and Ran Knishinsky, or their estate, remain owners, directly or indirectly, of at least fifty -one percent (51%) of the direct or indirect ownership interest in Developer and retain control of the Developer, as shown by reasonable evidence delivered to City prior to the applicable transfer; (b) Developer may lease retail, commercial, or food and beverage tenant space, which may be outside or within the butterfly atrium or the aquarium, (but not butterfly atrium or aquarium) to tenants for the uses contemplated in this Agreement.
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13. Indemnification. For and in consideration for the rights and privileges granted hereunder, Developer shall, defend, indemnify and hold City and its elected officials, officers, contractors serving as City officials, agents, and employees (“ Indemnitees”) harmless from all 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 under California or federal law for damages caused or alleged to have been caused by reason of or arising from Developer's performance of or exercise of rights arising under this Agreement, or which arise from the direct or indirect actions or inactions of Developer or of Developer’s contractors, agents, employees or other authorized representatives of Developer. This defense and indemnity obligation includes payment of reasonable attorney’s fees and costs of litigation , including but not limited to expert costs and witness fees . City shall have the right to select counsel of its reasonable choice. The Parties hereby agree to cooperate in defending such action. City will not voluntarily assist in any third-party challenge or take any position adverse to the Developer in connection with such third- party challenge. Notwithstanding the foregoing, Developer shall not be liable for, and shall not indemnify any Indemnitee(s) from any liability for damage and/or claims for damage for personal injuries, including death, and claims for property damage, and liabilities for damages to the extent caused by the intentional misconduct or gross negligence of such Indemnitee(s).
14. Termination and Amendments. This Agreement may be amended or canceled, in whole or in part, only by mutual written consent of the parties and then in the manner provided for in California Government Code § 65868, et seq., or successor provisions thereto.
15. Enforcement. In the event of a default under the provisions of this Agreement by Developer or City, the non-defaulting party shall give written notice to defaulting party (or its successor) by registered or certified mail addressed at the address stated in this Agreement. If such violation is not corrected to the reasonable satisfaction of the non-defaulting party within thirty (30) days after such notice is given, or if not corrected within such reasonable time as may be required to cure the breach or default if said breach or default cannot be cured within thirty (30) days (provided that acts to cure the breach or default must be commenced within said thirty (30) days and must thereafter be diligently pursued by the defaulting party), then the non-defaulting party may, without further notice, declare a default under this Agreement and, upon any such declaration of default, the non-defaulting party may bring any action necessary to specifically enforce the obligations of the defaulting party growing out of the operation of this Agreement, apply to any court, state or federal, for injunctive relief against any violation by the defaulting party of any provision of this Agreement, or apply for such other relief as may be appropriate.
Before sending a notice of default in accordance with this, the party asserting that the other party has failed to perform or fulfill its obligations under this Agreement shall first attempt to meet and confer with the other Party to discuss the alleged failure and shall permit such Party a reasonable period, but not less than thirty (30) days, to respond to or cure such alleged failure.
A. Event of Default. Developer is in default under this Agreement upon the happening of one or more of the following events or conditions:
1) If a material warranty, representation or statement is made or furnished by Developer to City and is intentionally false or proved to have been false in any material respect when it was made;
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2) If a finding and determination is made by City following an annual or special review, upon the basis of substantial evidence, that Developer has not complied in good faith with any material terms and conditions of this Agreement, after notice and opportunity to cure as described in this Section 15 above; or
3) A breach by Developer of any of the provisions or terms of this Agreement, after notice and opportunity to cure as provided in this Section 15 above.
B. No Waiver of Remedies . City does not waive any claim of defect in performance b y Developer if on periodic review City does not enforce this Agreement. With the exception of Permitted Delays, nonperformance by Developer shall not be excused because performance by Developer of the obligations herein contained would be unprofitable, difficult or expensive or because of a failure of any third party or entity, other than City. Subject to the limitat ions expressly set forth in this Agreement, all remedies at law or in equity which are not otherwise provided for in this Agreement are available to the Parties to pursue in the event that there is a breach of this Agreement. No waiver by City of any breach or default under this Agreement shall be deemed to be a waiver of any other subsequent breach thereof or default hereunder.
C. City Not Liable For Damages. Under no circumstances shall City be liable in damages to the Developer, or to any assignee, transferee or any other person, unless caused by the intentional misconduct (including a knowing violation of applicable law) or gross negligence of City. Otherwise, the Parties agree that in the event of a breach of this Agreement, each of the Parties hereto may pursue the following: (a) specific performance; (b) suits for declaratory or injunctive relief; (c) suits for mandamus or special writs; or (d) cancellation of this Agreement.
The Parties hereby warrant that each enters into this Agreement with the understanding that if the City defaults on its obligations under this Agreement due to an action taken by the electorate of the City in the exercise of the reserved powers of citizen initiative and referendum, this Agreement shall be modified or suspended to the extent required by California Government Code Section 65869.5 and the Developer’s right to seek specific performance, a writ of mandate, or other mandatory relief shall be lim ited by such force as the action taken by the electorate may have in light of state law as determined by any court of competent jurisdiction, in which case the Developer’s principal remedy shall lie in reformation of this Agreement.
16. Compliance with Local, State and Federal Laws. Developer shall carry out construction and operation of the Project in conformance with all applicable federal, state, and local laws, including all applicable federal and state occupation, employment, safety, and health standards.
17. Miscellaneous Terms.
A. Attorneys' Fees. In any court proceedings arising from the enforcement or to interpret this Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorneys' fees and experts’ fees incurred during the proceeding (including appeals) as may be fixed within the sound discretion of the court.
B. Binding Effect. This Agreement shall bind, and the benefits and burdens hereof shall
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inure to, the respective Parties hereto and their legal representatives, executors, administrators, successors and assigns, wherever the context requires or admits.
C. Applicable Law and Venue. This Agreement shall be construed in accordance with and governed by the laws of the State of California. Venue for any action or litigation brought for breach or to enforce any provision of this Agreement shall be the Superior Court of the County of Orange, California.
D. Partial Invalidity. If any provisions of this Agreement is to be deemed to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. 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.
E. Recordation; Release upon Termination . This Agreement shall be deposited into the escrow established by the Purchase Agreement thirty (30 ) days following adoption of the Ordinance, and as instructed in the Purchase Agreement shall be recorded on the Property at the closing of said escrow as a condition precedent to the closing. Upon the expiration or termination of the terms of this Agreement, upon the request of the Developer, City will execute and deliver to Developer, in recordable form, an instrument confirming that the provisions of this Agreement have expired.
F. Time of Essence . Time is of the essence in every provision hereof in which time is a factor.
G. Integrated Agreement. This Agreement consists of this Agreement together with all Exhibits attached hereto, and referenced documents, and all of the same are hereby incorporated herein by reference. The provisions of this Agreement shall govern over any inconsistent or conflicting provisions set forth in the Exhibits or incorporated documents, or in any other agreement between the parties. No representation or promise, verbal or written, not expressly set forth herein shall be binding or have any force or effect.
H. Time of Essence . Time is of the essence of each and every term, condition, obligation and provision hereof in which time is a factor. If the date for performance of any obligation hereunder or the last day of any time period provided for herein shall fall on a Saturday, Sunday or legal holiday, then said date for performance or time period shall expire on the first day thereafter which is not a Saturday, Sunday or legal holiday in the locality (State of California, City of Buena Park) where the Property is located.
I. Costs and Expenses in Preparing Agreement. Each Party shall be responsible for payment of its costs, including but not limited to attorney’s fees, with respect to negotiation and preparation of this Agreement.
J. Counterparts. This Agreement may be executed in multiple counterparts and delivered as originals, each of which shall be deemed an original, but all of which, together, shall constitute
DEVELOPMENT AGREEMENT NO. DA25-1
one and the same instrument.
K. Captions. Any captions to, or headings of, the paragraphs or subparagraphs of this Agreement are solely for the convenience of the Parties, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agree ment or any provision hereof.
L. No Obligations to Third Parties. The execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the Parties to, any person or entity other than the Parties and, to the extent this Agreement constitutes escrow instructions, the Title Company.
M. Exhibits and Related Documents . The Exhibits attached hereto and specific portions of the Purchase Agreement, and the Reciprocal Easement and Maintenance Agreement, are hereby incorporated herein by this reference.
N. Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof.
O. Construction. This Agreement will be liberally construed to effectuate the intention of the Parties with respect to the transaction described herein. In determining the meaning of, or resolving any ambiguity with respect to, any word, phrase or provision of this Agreement, neither this Agreement nor any uncertainty or ambiguity herein will be construed or resolved against either Party (including the Party primarily responsible for drafting and preparation of this Agreement), under any rule of construction or otherwise, it being expressly understood and agreed that the Parties have participated equally or have had equal opportunity to participate in the drafting thereof.
P. Authorized Signatories. The Parties warrant and represent to each other that each Party has caused this Agreement to be executed by and through their duly authorized representatives set forth below.
DEVELOPMENT AGREEMENT NO. DA25-1
IN WITNESS WHEREOF, this Agreement has been executed by the parties and shall be effective on the Agreement Date set forth hereinabove.
CITY OF BUENA PARK,
a Municipal Corporation
Dated: By:
Mayor
ATTEST:
Adria M. Vicuna, City
Clerk City of Buena Park
Approved as
to form:
_________________
City Attorney
By: Buena Park Boardwalk, LLC
(Developer)
Dated: By:
Dated: By:
DEVELOPMENT AGREEMENT NO. DA25-1
Exhibit A
Property Legal Description
PARCEL 1: (APN 136-203-40):
THAT PORTION OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
THE NORTH 449.50 FEET OF THE SOUTH 62430 FEET OF THAT PORTION OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2.1 TOWNSHIP SOUTH, RANGE 11 WEST, IN THE
RANCHO LOS COYOTES, CITY DE -BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING EASTERLY OF THE EAST LINE OF TRACT NO. 2435, AS PER MAP RECORDED IN BOOK 111, PAGES 13 TO 16 INCLUSIVE OF SAID MISCELLANEOUS MAPS.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO, 89 -375668 OF OFFICIAL RECORDS.
ALSO EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED DECEMBER 26, 1997 AS INSTRUMENT NO. 97-664764 OF OFFICIAL RECORDS.
PARCEL 2: (APN'S: 136-211-57 AND 136-211-64):
THE SOUTH 175 FEET OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO. 89 -375668 OF OFFICIAL RECORDS.
DEVELOPMENT AGREEMENT NO. DA25-1
Exhibit B
Development Plans
RESOLUTION NO. ___
VARIANCE NO. V-25-1
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF BUENA PARK ,
CALIFORNIA, APPROVING A VARIANCE TO REDUCE THE MINIMUM
LANDSCAPE SETBACK IN THE ENTERTAINMENT CORRIDOR SPECIFIC
PLAN (ECSP) FOR THE DEVELOPMENT OF AN AQUARIUM, BUTTERFLY
EXHIBIT AND ASSOCIATED ONSITE IMPROVEMENTS ON PROPERTY
LOCATED AT 7711-7733 BEACH BOULEVARD (APNS: 136-203-40, 136-211- 64 AND 136-211-57), AND MAKING FINDINGS IN SUPPORT THEREOF
A. Recitals.
(i) Buena Park Boardwalk, LLC, 9500 E. Via de Ventura, Suite E100, Scottsdale, AZ 85256 (“BP Boardwalk” or “Applicant”) has filed planning applications to develop real property located at 7711 -7733 Beach Boulevard (“Site”) with an Aquarium (including eatery) at approxima tely 7 5,000 square feet, a Butterfly Exhibit and Conservatory (including eatery) at approximately 4 5,000 square feet and other commercial spaces at approximately 5,500 square feet. Site Improvements include new parking lot, landscaping, utility connections and street frontage improvements (sidewalk, driveways, curb and gutter) (“Project”). BP Boardwalk h as submitted the necessary applications for a Development Agreement (DA25-1) and Variance (V-25-1).
(ii) On May 27, 2026, the Planning Commission conducted a duly noticed public hearing on the application, as required by law, and concluded said hearing prior to adopting a Resolution recommending that the City Council adopt a Resolution approving a variance for a reduction in landscape setback.
(iii) The City has reviewed and analyzed the potential environmental impacts of the Project as required by the California Environmental Quality Act (CEQA), and after considering all evidence presented during the public hearing, the Planning Commission has determined that the Project is exempt from further environmental review pursuant to Public Resources Code section 21083.3 and CEQA Guidelines Section 15183.
(iv) The City Council has reviewed and considered all components of the proposed Variance No. V-25-1 and concluded its public hearing prior to adoption of this Resolution.
(v) All legal prerequisites to the adoption of this Resolution have occurred.
B. Resolution.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BUENA PARK , does hereby find, determine and resolve as follows:
1. The City Council hereby specifically finds that all the facts set forth in the Recitals, Part A, of this Resolution are true and correct and are incorporated herein by this reference.
2. Based upon substantial evidence presented to the City Council during the above-referenced public hearing, including written staff report, verbal testimony, and the Resolution No.
Variance No. V-25-1
July 14, 2026
Variance No. 25-1 Development Plans stamped “RECEIVED JULY 2, 2026 PLANNING DIV.,” this City Council hereby specifically finds, determines, and resolves as follows:
a. FINDING: There are special circumstances applicable to the subject property such as size, shape, topography, location, or
surroundings which result in the strict application of the requirements of this Title depriving the property of privileges enjoyed by other properties in the same zone and vicinity.
FACT: There are special circumstances present in that the subject property includes an existing landscape planter along the western property line which contains approximately 75 mature cypress trees which provide the required screening and visual buffer intended in the Entertainment Corridor Specific Plan landscape setback requirement, however the width of the existing landscape setback is less than the amount required in the ECSP. The removal of the mature trees in order to expand the landscape setback would be contrary to the intent of the requirement and, as a result, the strict adherence to the BPMC will deprive the property and adjacent properties from the screening that currently exists at the site.
b. FINDING: The variance will not grant special privileges to the subject property not enjoyed by other properties in the same zone and vicinity.
FACT: The reduction in landscape setback along the western property line does grant special privileges to the subject property as there are other developed properties within the Entertainment Corridor which do not meet the minimum landscape setback for
properties adjacent to residential zones.
c. FINDING: The variance will not produce results detrimental to the public health, safety, or welfare and will not be injurious to other property in the vicinity.
FACT: The purpose and intent of the ten -foot landscape setback adjacent to residentially zoned properties is to ensure that there is sufficient width for the planting of trees and other screening to provide a buffer between the commercial and residential uses.
The existing mature cypress trees create a nearly fully opaque green screen for the residential properties along the western property line . The granting of a variance for a reduction in landscape setback in order to preserve these trees will not be detrimental to the health, safety or welfare and will not be injurious to other nearby properties.
d. FINDING: The variance will not be contrary to the objectives of the general plan, any applicable specific plan, or the intent of this Title.
Resolution No.
Variance No. V-25-1
July 14, 2026
FACT: The proposed project will implement multiple goals and policies as envisioned in the Tourist-Entertainment General Plan Land Use designation and complies with the permitted uses and development standards in the Entertainment Corridor Specific Plan. The proposed project also meets several goals and polices within the City’s Economic Development Element of the General Plan.
3. The City Council hereby finds and determines that the application, as identified above in this Resolution, is Exempt from further environmental review pursuant to Public Resources Code section 21083.3 and CEQA Guidelines Section 15183.
4. Based upon the findings and conclusions set forth in the above paragraphs, the City Council hereby approves Variance No. V -25-1 development plans stamped “RECEIVED JULY 2, 2026 PLANNING DIV.”
5. The City Clerk shall certify the passage of this Resolution and shall cause the same to be published in the manner required by law.
PASSED AND ADOPTED this 14th day of July by the following called vote:
AYES: COUNCILMEMBERS:
NOES: COUNCILMEMBERS:
ABSENT: COUNCILMEMBERS:
ABSTAINED: COUNCILMEMBERS:
____________________________
Mayor
ATTEST:
___________________________
City Clerk
I, Adria M. Vicuna, City Clerk of the City of Buena Park, California, do hereby certify that the foregoing ordinance was introduced and passed at a regular meeting of the City Council of the City of Buena Park held on the 14th day of July, 2026.
_____________________________
City Clerk
BUENA PARK CITY COUNCIL
AGENDA ITEM NO. 6A – EXHIBIT B
Development Plans
https://cms7.revize.com/revize/buenaparkca/Document_center/City%20Departments/Co mmunity%20development/Planning%20Division/Butterfly%20Palladium/Buena%20Park% 20Boardwalk%20ENTITLEMENT%20SET%202026-07-02.pdf?t=202607071159280
1 AGREEMENT FOR THE PURCHASE, SALE, AND DEVELOPMENT
OF REAL PROPERTY
7711-7733 Beach Boulevard, Buena Park, California
Orange County Assessor Parcel Nos. 136-203-40, 136-211-64 and 136-244-57
This AGREEMENT FOR THE PURCHASE, SALE, AND DEVELOPMENT OF REAL PROPERTY (“Agreement”) is dated as of July __, 2026, and entered into by and between the CITY OF BUENA PARK, a California municipal corporation ( “City”), and BUENA PARK BOARDWALK, LLC, an Arizona limited liability company (“Developer”). At times herein City and Developer are individually referred to as a “Party” and jointly as “Parties.”
RECITALS
(A) City is the owner of certain real property located at 7711-7733 Beach Boulevard, Buena Park, California ( Orange County Assessor Parcel Nos. 136-203-40, 136-211-64 and 136- 244-57), as such real property is legally described in Exhibit “A” hereto (the “Property”);
(B) The Property is located within and subject to the land use regulations prescribed in the Buena Park Entertainment Corridor Specific Plan (“ ECSP”), and is subject to a land use covenant and restriction that requires the Property be used and developed in a manner consistent with the ECSP before any alternative use, as such covenant is set forth in that certain grant deed for the Property recorded on July 22, 2022 (Instrument No. 2022000256176 in the Official Records for the County of Orange, California, and hereinafter the “Deed Restriction”);
(C) City desires to dispose of the Property at fair market value for private development and use consistent with the ECSP and Deed Restriction, and Developer specializes in developing and operating entertainment attractions of the type permitted and desires to acquire the Property for that purpose;
(C) The Parties previously entered into an Exclusive Negotiating Agreement dated January 13, 202 5 (as subsequently extended from time to time ) pursuant to which the y have investigated the feasibility and negotiated the terms and conditions by which Developer might acquire, develop, and operate the Property with mixed-use entertainment attraction; and
(D) The Parties have completed their investigations and negotiations and now desire to enter into this Agreement to memorialize the terms and conditions by which City will sell and Developer will purchase, develop, and use the Property.
NOW THEREFORE, THE PARITES AGREE AS FOLLOWS:
AGREEMENT
1. NATURE OF AGREEMENT . City agrees to sell the Property to Developer, and Developer agrees to purchase the Property from City for development and operation of the Project thereon, subject to and on the terms and conditions set forth in this Agreement.
2 2. DEFINITIONS AND IDENTIFICATION OF TERMS . The capitalized words used throughout this Agreement shall have the meaning given except as the context clearly requires otherwise, including but not limited to the following:
“Additional Instructions” is defined in Section 4.A.
“City Council” means and refers to the City Council for the City of Buena Park
“Closing” means recordation in the Official Records of the Grant Deed, Development Agreement, OPA, REA, SLA Covenants, and the disbursement of funds and distribution or recording of any other documents by the Title Company as described in this Agreement.
“Confidential Information” is defined in Section 11.B.
“Construction Financing” is defined in Section 4.G(5)(e).
“Contingency Date” means the date that is 60 days after the Effective Date .
“Contingency Period” means the period of time between the Effective Date and the Contingency Date.
“Development Agreement” is defined in Section 4.G(4)(a)
“Development Costs” is defined in Section 4.G(5)(a).
“Deposit” is defined in Section 3.A.
“Effective Date ” means the date on which the last of the Parties has executed this Agreement.
“Escrow” and “Escrow Agent” are defined in Section 4.B.
“Extended Policy” is defined in Section 4.G(2).
“Financing Plan” is defined in Section 4.G(5)(c).
“Grant Deed” means the form of grant deed attached in Exhibit “B” conveying the Property from City to Developer.
“Official Records” means the o fficial real property r ecords kept and maintained by the County of Orange, California.
“Outside Closing Date” is defined in Section 4.D.
“Owner Participation Agreement” or “OPA” is defined in Section 4.G(8).
3 “Opening” means the date City opens Escrow by depositing this Agreement with the Escrow Agent as described in Section 4.B.
“Permitted Exceptions” means the following described conditions and exceptions to title or possession:
i. A lien to secure payment of general and special real property taxes and assessments that accrue on or after the Closing.
ii. A lien of supplemental taxes assessed pursuant to Chapter 3.5 (commencing with Section 75) of the California Revenue and Taxation Code accruing on or after the Closing.
iii. The Deed Restriction defined in Recital B above.
iv. Matters affecting the condition of title created by or in accordance with this Agreement or otherwise with consent of Developer.
v. Other exceptions to title disclosed by the Title Report that have been approved in writing by Developer prior to the end of the Contingency Period.
“Project” means and refers to a mixed-use entertainment attraction comprised of a butterfly atrium exhibit, an aquarium exhibit, and associated amenities and supporting commercial or retail establishments described in the Project Entitlements and OPA.
“Project Entitlements” is defined in Section 4.G(4).
“Purchase Note” and “Purchase Note Deed of Trust” are defined in Section 3(b).
“Purchase Price” is defined in Section 3.
“Reciprocal Easement and Maintenance Agreement” or “ REA” is defined in Section
4.G(9).
“Schedule of Performance” is defined in the OPA.
“SLA Covenant” is defined in Section 4.G(3).
“Sources and Uses Summary” is defined in Section 4.G(5)(b).
“Survey” is defined in Section 4.G(2)(a).
“Termination Costs” is defined in Section 9.A.
“Title Company” is defined in Section 4.B.
“Title Policy” is defined in Section 4.G(2).
“Title Report” is defined in Section 4.G(2)(a).
4 3. PURCHASE PRICE. The purchase price to be paid by Developer to City in exchange for the Property is THREE MILLION DOLLARS ($3,000,000.00) (the “Purchase Price”), which shall be paid by Developer to City in the manner specified in this Section 3. The Parties agree the Purchase Price is equal to the fair market value of the Property in its current condition as determined in an independent third -party appraisal, and no discounts, offsets, or subsidies have been provided to Developer to reduce the Purchase Price.
A. Deposit.
1) Within ten (10) days of the Effective Date, Developer shall deliver funds in cash, by cashier’s or certified check, or wire transfer, in the amount of Three Hundred Thousand Dollars ($300,000.00) (USD) to the Title Company to be deposited in an interest-bearing account and held as an earnest money deposit pursuant to the terms of this Agreement (the “Deposit”), with any interest, when received, becoming part of the Deposit for purposes of this Agreement.
2) At the Closing, the Deposit shall be applied to the Purchase Price and used by Escrow to pay City’s transaction and closing costs, with any remaining amounts disbursed by the Escrow Agent to City at the Closing.
3) The Deposit shall be fully refundable to Developer on or before the expiration of the Contingency Period. In the event Developer waives contingencies in writing or does not terminate this Agreement on or prior to the expiration of the Contingency Period, the Deposit shall become immediately non -refundable to Developer except as otherwise specified in this Agreement.
B. Purchase Loan . Conditioned upon Developer satisfying or performing all conditions precedent to the Closing, City will make a loan to Developer at the Closing in the amount of Two Million Seven Hundred Thousand Dollars ($2,700,000.00 ) (the Purchase Price minus the initial Deposit) which shall be evidenced by a promissory note made by Developer in favor of City in substantially the form attached hereto as Exhibit D, and including the following general terms and conditions: (a) the Purchase Note shall have a term of sixty (60) months from the Closing with no charge for prepayment; (b) the principal balance shall bear simple interest at a rate of eight (8%) percent per annum until the principal is paid in full; and (c) monthly payments of principal and interest are due with any outstanding balance and accrued interest due in full on the maturity date. (“Purchase Note”). The Purchase Note shall be secured by a deed of trust recorded on Developer’s fee interest in the Property at the Closing that is senior to any other liens, mortgages, or encumbrances, except as may be subordinated to liens securing Construction Funds as permitted by the OPA, and with the deed of trust securing the Purchase Note including the terms and being substantially in the form attached hereto as Exhibit E (“Purchase Note Deed of Trust ”).
Developer shall pay the balance of the Purchase Price by depositing the Purchase Note and Purchase Note Deed of Trust into Escrow prior to the Closing. The Parties intend for the loan evidenced by the Purchase Note and Purchase Note Deed of Trust to be a market rate loan as opposed to a subsidy, with the Parties having reviewed and identified market terms for debt financing, including a survey of debt financing terms available from institutional lenders to the general public, with the Parties agreeing that the terms of the Purchase Note and Purchase Note
5 Deed of Trust are representative of those available on the open market for substantially similar transactions.
C. Cash to Close . Following the Escrow Agent’s receipt of all approvals and deliverables required for the Closing, Developer shall deposit with Escrow Agent, in cash, by certified check or by wire transfer of immediately available funds, any additional funds needed to pay closing pro- rations, adjustments, and/or other transaction costs allocated to Developer by this Agreement.
City’s transaction and closing costs shall be paid from the Deposit to the extent such costs do not exceed the amount of the Deposit, and shall otherwise be paid by City at Closing by cash, by certified check or by wire transfer of immediately available funds.
4. ESCROW AND CONDTIONS TO CLOSING.
A. Escrow Instructions. This Agreement constitutes the joint basic escrow instructions of the Parties for conveyance of the Property by City to Developer. The Parties shall execute, deliver and be bound by any reasonable or customary supplemental or additional escrow instructions of Title Company or other instruments as may be reasonably required by Title Company in order to consummate the transaction contemplated by t his Agreement (“Additional Instructions”); provided that any conflict between the Additional Instructions and this Agreement must first be approved in writing by the Parties.
B. Opening of Escrow. Within five (5) business days of the Effective Date, City shall open an escrow (“Escrow”) with First American Title Insurance Company (“Title Company,” 18500 Von Karman Avenue, Suite 600, Irvine, CA 92612; Title Officer: Jeanne Gould, Senior Escrow Officer/Escrow Branch Manager ([email protected]) (“Escrow Agent”).
C. Close of Escrow. The Closing shall be conditioned on and occur no sooner than : (i) the date on which all of the conditions precedent to the Closing set forth in Section 4.G. of this Agreement have been satisfied to the mutual satisfaction of each Party or otherwise waived by them; and (ii) no sooner than two (2) days following each Party’s satisfaction or waiver of the following conditions precedent:
1) City Escrow Deliverables . City shall have: (a) taken all actions and delivered all documents necessary and appropriate to enabl e Title Company to issue the Title Policy to Developer subject only to the Permitted Exceptions; and (b) delivered to Escrow the following documents, which may be counterparts, in recordable form as necessary: (i) an original of the Grant Deed executed by City and accompanied by a notary acknowledgement; and (ii) an owner’s affidavit in form and substance acceptable to the Title Company, if required.
2) Developer Escrow Deliverables . Developer shall have : (a) paid the Deposit into Escrow; and (b) delivered to Escrow an original of the Purchase Note Deed of Trust executed by Developer and accompanied by a notary acknowledgement
3) Joint Escrow Deliverables. Each Party (i.e. both Parties) shall have: (a) delivered to Escrow the following documents, which may be counterparts, in recordable form as necessary: (i) the Purchase Note, accompanied by a notary acknowledgment; (ii) the Development Agreement,
6 accompanied by a notary acknowledgement, (ii i) the Owner’s Participation Agreement, accompanied by a notary acknowledgement; (iv) the REA , accompanied by a notary acknowledgement; (v) the Purchase Price Note, accompanied by a notary acknowledgement; and (vi) the SLA Covenant, accompanied by a notary acknowledgement ; (b) completed all of their obligations under this Agreement that are required to be completed prior to the Closing; and ( c) delivered such other documents and funds required of it under this Agreement or reasonably required by Title Company to facilitate the Closing.
4) Validity of Party Representations. All representations and warranties of each Party that were true as of the Effective Date shall be and remain true as of the Closing and shall otherwise continue for the time periods set forth in this Agreement.
D. Outside Closing Date . Unless extended by the prior mutual written agreement of the Parties, the Closing shall occur no later than 11:59 p.m. on the date that is 365 days after the Effective Date , after which date either Party may terminate this Agreement for convenience pursuant to Section 9.A (“Outside Closing Date”). The Parties may mutually agree to extend the Outside Closing prior thereto by executing Additional Instructions or amending this Agreement.
E. Costs of Escrow.
1) City shall pay through Escrow: (i) that portion of the Title Policy premium for standard ALTA owner’s coverage, (ii) all documentary transfer taxes assessed by the County of Orange and the City (except as City may be exempt from payment as a governmental entity), and (iii) one-half (½) of the Title Company’s fee. In addition, City shall pay outside of Escrow all legal and professional fees and costs of attorneys and other consultants and agents retained by City for this transaction.
2) Developer shall pay through Escrow : (i) the balance of the Title Policy premium (including the premium for the ALTA extended coverage and any title endorsements requested by Developer), (ii) all document recording charges, including recording charges for the Grant Deed, (iii) one-half (½) of the Title Company’ fee, and (iv) all charges for the ALTA Survey. In addition, Developer shall pay outside of Escrow all legal and professional fees and costs of attorneys and other consultants and agents retained by Developer for this transaction.
3) All other recording, closing or Escrow costs shall be divided equally (50/50) between the Parties. Title Company shall provide a preliminary closing statement to the Parties prior to the Closing.
F. Tax Prorations. City shall be liable for and shall pay in full all real property taxes and assessments levied on or incurred by the Property prior to the Closing, provided that City is a local government agency that is exempt from real property taxes and accordingly the Parties anticipate that no such taxes are or will be due or owing. Developer shall be solely and exclusively responsible for any real property taxes or assessments levied on the Property after the Closing.
G. Conditions Precedent to the Closing.
7 1) Property Due Diligence
a) Contingency Period. As a condition precedent to the Closing that, on or before the Contingency Date , Developer shall have determined, it its sole discretion, that the Property is suitable for Developer’s intended purpose. City shall deliver copies of all non -privileged documents in City’s possession relating to the Property to Developer within ten (10) business days after the Opening. If Developer determines the Property is not suitable, on or before the Contingency Date Developer may terminate this Agreement for convenience pursuant to Section
9.A. Developer’s failure to object during the Contingency Period shall be deemed a n acceptance of the Property’s condition by Developer.
b) Inspections, Testing and Right of Entry. At any time during the Contingency Period Developer may enter and conduct, at Developer’s sole discretion and expense , such inspections and testing of the Property as Developer may desire or deem appropriate to determine the suitability of the Property, and after the Contingency Date for preconstruction planning, surveying, or similar purposes relating to the Project. In conducting such activities Developer shall endeavor to minimize damage to the Property and any improvements, and in the event Escrow fails to close shall return the Property and any improvements to its condition prior to Developer’s activities; reasonable wear and tear excepted. City grants Developer and its authorized employees, representatives, and agents permission to enter the Property during permitted construction hours for such purpose. City shall make reasonable arrangements to ensure access by Developer pursuant to this section. Developer shall indemnify, protect, defend (with legal counsel reasonably acceptable to City) and hold City harmless from and against any and all claims, liabilities, damages, costs and expenses arising from, related to or caused by, Developer’s entry upon the Property or the performance of any activities on the Property under this subsection. Before entering exercising rights under this subsection, Developer shall provide City with evidence of insurance of the types, amounts, and with the terms reasonably acceptable to City.
2) Title Matters. It is a condition precedent to the Closing that Title Company be committed to issue Developer at the Closing a standard CLTA owner’s policy of title insurance (“Title Policy”) in an amount equal to the Purchase Price, showing fee title to the Property subject only to the Permitted Exceptions. Title Company will issue the Title Policy to Developer upon Closing. Developer may instead elect to obtain an extended coverage ALTA owner’s policy of title insurance (“Extended Policy”) provided that: (1) Developer pays for all additional premiums and any other costs attributable thereto , (2) Developer is solely responsible for any additional requirements for issuing the Extended Policy (such as an ALTA survey), and ( 3) issuance of the Extended Policy does not delay the Closing.
a) Title Report, Review and Approval . Within fifteen (15) days of the Effective Date, City shall obtain and shall provide Developer with a preliminary title report for the Property from the Title Company, together with the underlying documents relating to the Schedule B exceptions set forth in such report (collectively, the “ Title Report”). Developer shall have until the end of the Contingency Period to review and approve the Title Report and any ALTA survey (“Survey”). Developer shall notify City in writing on or before the Contingency Date of any disapproved matters in the Title Report and Survey. Any matters not so disapproved shall be a Permitted Exception; provided that Developer expressly objects to any monetary encumbrances
8 that may appear in the Title Report, all of which shall be removed prior to Closing by City at no cost to Developer. If City fails to remov e any monetary exceptions or obtain affirmative title insurance protection for such exceptions to Developer’s satisfaction within twenty (20) day’s receipt of written notice from Developer , then Developer may proceed with the Closing and advance the cost of removing or satisfying the exception and deduct the cost from the Purchase Price, or alternatively terminate this Agreement for convenience pursuant to Section 9.A with City paying all Termination Costs.
b) Updates Before Closing. If any endorsement or update issued to the Title Report or Survey contains new exceptions other than those initially listed, Developer shall be entitled to object to any such exceptions by a written notice to City within twenty (20) days following Developer’s receipt of such endorsement or update. If Developer fails to object on or before such date, Developer shall be deemed to have waived any objection to the new exceptions appearing on such endorsement or update and they shall be deemed to be Permitted Exceptions. If City fails to remove any new exceptions or obtain affirmative title insurance protection for such exceptions to Developer’s satisfaction within twenty (20) day’s receipt of written notice from Developer, then Developer may proceed with the Closing and advance the cost of removing or satisfying the exception and deduct the cost from the Purchase Price , or alternatively terminate this Agreement for convenience pursuant to Section 9.A with City paying all Termination Costs.
3) Surplus Land Act Compliance . It is a condition precedent to the Closing that City comply with the requirements of the California Surplus Lands Act (Gov’t Code § 54220 et seq., the “SLA”) before disposing of the Property to Developer, as compliance is determined in the sole and absolute discretion of City . Within ten (10) days of the Opening , City shall provide the California Department of Housing and Community Development (“ HCD”) with notice of this Agreement in the manner and form required by law. If, prior to the Closing, HCD issues a determination the transaction contemplated by this Agreement violates the SLA, the Parties will cooperate in good faith in efforts to remedy or correct the grounds for HCD’s determination prior to proceeding with this Agreement, or either Party may elect to terminate this Agreement for convenience pursuant to Section 9.A with the Party electing to terminate paying all Termination Costs. As required by Government Code section 54233, a covenant or restriction in the form set forth in Exhibit E, or as otherwise directed or accepted by HCD, shall be recorded on the Property at the Closing (“SLA Covenant”).
4) Project Entitlements. City’s issuance of the Project Entitlements (defined below) in a form acceptable to Developer is a condition precedent to the Closing . I f this condition is not satisfied on or before the Outside Closing Date, either Party may elect to terminate this Agreement pursuant to Section 9.A with the Party electing to terminate paying all Termination Costs.
a) Identification. Developer’s construction and operation of the Project on the Property requires the following land use approvals from City, acting in its governmental and regulatory capacity (cumulatively the “Project Entitlements”): (1) the Buena Park Entertainment Corridor Specific Plan requires that City and Developer enter into a development agreement pursuant to California Government Code section 65865 et. seq. (“Development Agreement”); (2) a variance under Section 19.132.010 of the Buena Park Zoning Code to deviate from certain development standards pertaining to the Project ; and (3) City’s analysis of the potential
9 environmental impacts of the Project as the “lead agency” under the California Environmental Quality Act (“CEQA”).
b) Application and Consideration. With City’s consent Developer has heretofore submitted applications for the Project Entitlements to City. City covenants and agrees to promptly and in good faith , acting in its governmental and regulatory capacity, review Developer’s applications and exercise lawful discretion to render a final decision to approve, conditionally approve, or deny the Project Entitlements.
c) Vesting of Entitlements. The Closing shall be conditioned on City mak ing a final decision under subsection (b) above to approve the Project Entitlements , and the Closing shall occur not sooner than the date upon which the Project Entitlements are exempt from challenge under Section 1094.6 of the California Code of Civil Procedure (i.e. the 90th day following the date the Project Entitlements are approved).
d) Cost of Entitlements . Developer shall obtain and pay all application, permit, inspection, development impact , processing, or other fees or costs related to the Project Entitlements or Project that are typically required or charged by City , in its governmental or regulatory capacity, or by other governmental entity with jurisdiction over the Property. All such requirements, fees and costs shall be based on the published or applicable fees as of the date of the application for the permit or entitlement.
e) Limitation of Remedies. The Parties’ right to terminate this Agreement pursuant to Section 9(A) shall be the sole and exclusive remedy should City lawfully condition or deny Developer’s application for the Project Entitlements, or if Developer declines to accept the final form of Project Entitlements approved by City.
5) Project Financing. Developer shall secure all equity, capital, debt, and/or other financing that is necessary to pay any and all Development Costs. The requirements of this subsection shall be satisfied to the reasonable satisfaction of both Parties prior to the Closing.
a) Financing Plan. Prior to the Closing Developer shall submit a financing plan for City’s review demonstrating the sufficiency and availability of all funds necessary to develop the Project following the Closing in the amount and at the time due (“Development Costs ”), and including the following information (“Financing Plan”):
i. A line-item description of all Development Costs (including all direct, indirect, and financing costs) for construction and/or development of the Project.
ii. A sources and uses summary that lists all capital, debt, or other financial sources that will be used by Developer to pay Development Costs; and a copy of funding commitments to Developer for financial sources listed.
iv. A description of any joint ventures, partnerships or conveyances Developer proposes in connection with equity funds or other financing listed by Developer.
10 v. A certified financial statement (or alternative equivalent reasonably satisfactory to City) evidencing sources of capital listed in the Financing Plan or demonstrating that Developer has adequate funds available and has unconditionally committed such funds to cover the difference, if any, between the funds or capital provided by third -party or external financing sources listed in the Financing Plan and total Development Costs.
vi. A certification by Developer that the information and supporting documentation included in the Financing Plan are accurate, true and correct.
d) City’s Review of Financing Plan . City shall review and either approve or disapprove of the Financing Plan within 14 days ’ receipt from Developer. City’s review of any commitments from external financing sources will be solely to determine viability, enforceability, amount, and consistency in terms and timing of financing with this Agreement. If the City finds and determines, in good faith and a showing of good cause , that the Financing Plan does not substantially comply with the terms or conditions of the Agreement, City may reject the Financing Plan and notify Developer in writing of the reasons therefor. Developer will thereafter resubmit a revised Financing Plan to City within 30 days after City 's notification of rejection. If Developer’s submission of a Financing Plan is within 14 days of the Outside Closing Date, then the Outside Closing Date will be automatically extended to accommodate the review, rejection, and resubmission process and timelines described in this subsection, as applicable.
e) Availability of Financing at Closing ; Modifications. As a condition precedent to City approving the Financing Plan and authorizing the Closing, a ll financing sources needed to pay Development Costs of the Project (hereinafter referred to “ Construction Financing”) shall close by or be unconditionally committed to Developer prior to or simultaneously with the Closing.
Developer will promptly submit any material changes to the Financing Plan , including but not limited to any material amendments or material modifications to Development Costs or financing sources, to City for review pursuant subsection (d) of this Section.
6) Project Construction Contracts. At the Closing Developer shall have in place all architectural, engineering, design, construction, material or equipment suppliers, and other contractors or contracts that are necessary complete construction of the Project (“Construction Contracts”). Developer shall provide verifiable documentary evidence of such Construction Contracts for City’s review contemporaneously with and on the same terms and conditions as applicable to City’s review of the Financing Plan in Section 4.G.5.d.
7) Building Permits. At the Closing Developer shall have completed applications for and obtained approval by City, acting it its governmental and regulatory capacity, of all permits for demolition, grading, or construction work needed to commence and complete construction of the Project (“Project Permits ”), such that a t the Closing Developer is entitled to issuance of the Project Permits from City subject only to the payment of associated permit fees.
8) Owner Participation Agreement. As a material inducement for City agreeing to sell the Property to Developer and for Developer agreeing to purchase the Property from City, the Parties have negotiated and have agreed to enter into the Owner Participation Agreement in the form attached in Exhibit “E” to this Agreement (“OPA”). Prior and as a condition to the Closing, each
11 Party shall each execute and deliver to Escrow a copy of the OPA and it, or a memorandum thereof, shall be recorded on the Property at the Closing. The terms and conditions of the OPA shall survive the Closing and remain in full force and effect for the duration and pursuant to the terms thereof.
9) Reciprocal Easement and Maintenance Agreement. As a material inducement for City agreeing to sell the Property to Developer and for Developer agreeing to purchase the Property from City, the Parties have negotiated and have agreed to enter into the Reciprocal Easement and Maintenance Agreement in the form attached in Exhibit “F” to this Agreement (“ REA”). Prior and as a condition to the Closing, each Party shall each execute and deliver to Escrow a copy of the REA and it, or a memorandum thereof, shall be recorded on the Property at the Closing. The terms and conditions of the REA shall survive the Closing and remain in full force and effect for the duration and pursuant to the terms thereof.
H. Title Company and Escrow Agent Responsibilities. Subject to satisfaction of the conditions precedent to the Closing set forth in this Agreement , Title Company and Escrow Agent, as applicable, are authorized and instructed to:
1) Use the proceeds of the sale (the funds deposited by Developer representing the Deposit) to cause the satisfaction and removal of all exceptions to title to the Property except for the Permitted Exceptions; provided that before such payments or charges are made, Title Company shall notify City of the terms necessary to satisfy and remove such monetary liens or encumbrances, and City shall approve the disbursement of necessary funds.
2) Pay from the Deposit and charge City for any fees, charges and costs for which City is responsible under this Agreement. Before such payments or charges are made, Title Company shall notify City of the fees, charges and costs necessary to clear title and close Escrow, all of which shall be reflected on the closing statement at Closing.
3) Pay from such other funds that will be deposited into Escrow by Developer, and charge Developer for any fees, charges and costs for which Developer is responsible under this Agreement. Before such payments or charges are made, Title Company shall notify Developer of the fees, charges and costs necessary to clear title and close Escrow, all of which shall be reflected on the closing statement at Closing.
4) Record the Grant Deed, Purchase Note Deed of Trust, Development Agreement, OPA, REA, SLA Covenant, in the order of priority listed so except as otherwise agreed by the Parties, together with any other instruments delivered by the Parties through Escrow for recording; and deliver copies to the Parties of such recorded documents and the Purchase Note to the Parties following the Closing.
5) Deliver to each Party copies of all tax withholding form(s).
6) Disburse such other funds and deliver such other documents to the Parties that are entitled thereto.
12 7) Cause the Title Policy or Extended Policy (as defined below), as applicable, to be issued.
8) Perform and take actions directed in any agreements or escrow instructions between the Parties, if applicable, to the extent not in conflict with this Agreement or otherwise approved by the Parties.
I. Notices. All communications from Title Company and Escrow Agent to Developer or City shall be directed to the addresses and in the manner established in this Agreement for notices, demands and communications between Developer and City, except as may be otherwise directed by the Parties in writing.
5. COVENANT REGARDING DEVELOPMENT AND USE OF THE PROPERTY
From and after the Closing, Developer covenants and agrees to improve, develop and use the Property in the manner described in the OPA and Project Entitlements. Developer’s covenant in this regard is a material part of the consideration flowing to City for its agreement and willingness to sell the Property to Developer. From and after the Closing, Developer covenants, promises and agrees to pursue and complete development, to open and subsequently operate the Project on the Property in the manner specified in the OPA, Schedule of Performance, and Project Entitlements.
Developer’s covenant and commitment in this regard shall survive the Closing.
6. ENVIRONMENTAL RELEASE AND INDEMNITY.
A. Environmental Release . Developer, for itself and its successors and assigns, unconditionally releases City from and against any and all liability to Developer, both known and unknown, present and future, for Environmental Damages to Developer arising out of any violation of Environmental Requirements or the presence of Hazardous Material on, under or about the Property (the “ Environmental Release ”), except to the extent of a breach by City of its representations and warranties set forth in this Agreement. With respect to the Environmental Release, Developer, after consultant with legal counsel and will full knowledge of the consequences of its actions, waives the provisions of California Government Code Section 1542, which provides:
“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 settleme nt with the debtor or released party.”
_______ Developer’s Initials
B. Environmental Indemnity.
1) General. Except for a breach of City’s representations or warranties under this Agreement, Developer shall defend, indemnify, and hold City harmless from and against all Environmental Damages arising from the presence of any Hazardous Materials at, in, on, or under
13 the Property, or migrating off the Property (including groundwater), including without limitation:
(a) all claims, lawsuits, demands, obligations, investigations, damages (including but not limited to diminution in value of property and related stigma dama ges, lost profits and consequential damages), penalties, fines or actions by any federal, state, or local governmental agency (collectively, “Government Claims ”) based on Developer’s or City’s failure to remediate the Property; (b) all claims, lawsuits, demands, obligations, investigations, damages (including but not limited to diminution in value of property and related stigma damages, lost profits and consequential damages), penalties, fines or actions by owners and operators of adjacent and nearby properties or any other persons (collectively, “ Third Party Claims ”); (c) all claims, lawsuits, demands, liabilities, damages, losses, or judgements for personal injury or for injury to real or personal property; all claims, lawsuits, demands, obligations, investigations, damages, penalties, fines or actions by subsequen t owners and operators of the Property or any lenders providing financing with respect to the Property arising from any underlying Government Claims, Third Party Claims, or other claims under (c) above.
2) Defense of Claims. Provided that Developer accepts tender of any reasonable expense or reasonable claim by City without any reservation, Developer shall have the right, in consultation with City, to control on behalf of City any and all negotiations, settlement discussions, investigations, testing, defenses, trials, actions, proceedings, hearings, additional remediation obligations, and other resolutions with all agencies and third parties arising out of, incidental to, or in connection with Developer’s performance of Developer’s obligations under this Section. If Developer does not accept a tender of any reasonable expense or reasonable claim by City without reservation, except for a breach of City’s representation on warranties under this Agreement, City shall be entitled to engage in all such matters described in the preceding sentence on its own account, and shall be entitled to recover from Developer the costs of engaging in such matters (including reasonable consultants’ fees and reasonable attorneys’ fees), provided Developer’s denial of liability is adjudicated to be in violation of the terms hereof. Without limiting Developer’s rights as described above, Developer shall undertake reasonable consultation with City with respect to matters materially involving the Property or City.
C. Definitions. For purposes of Section 6 of this Agreement, the following terms have the meanings indicated.
1) “Environmental Damages” means all claims, judgments, damages, losses, penalties, fines, liabilities (including strict liability), encumbrances, liens, costs, and expenses of investigation and defense of any claim, whether or not such claim is ultimately de feated, and of any good faith settlement of judgment, of whatever kind or nature, contingent or otherwise, matured or unmatured, foreseeable or unforeseeable, including , without limitation , reasonable attorneys’ fees and disbursements and consultants’ fees, any of which are incurred at any time as a result of the existence of Hazardous Material, prior to the Closing, upon, about, beneath the Property or migrating or threatening to migrate to or from the Property, or the existence of a violation of Environmental Requirements pertaining to the Property, regardless of whether the existence of such Hazardous Material or the violation of Environmental Requirements arose prior to the present ownership or operation of the Property, and including without limitation:
14 a) Damages for personal injury, or injury to property or natural resources occurring upon or off the Property, foreseeable or unforeseeable, including, without limitation, lost profits, consequential damages, the cost of demolition and rebuilding of any improvements on real property, interest and penalties;
b) Fees incurred for the services of attorneys, consultants, contractors, experts, laboratories and all other costs incurred in connection with the investigation or remediation of such Hazardous Materials or violation of Environmental Requirements including, but not limited to, the preparation of any feasibility studies or reports or the performance of any cleanup, remediation, removal, response, abatement, containment, closure, restoration or monitoring work required by any federal, state or local government agency or economic use of the Property or any other property in a manner consistent with its current use or otherwise expended in connection with such conditions, and including without limitation any attorneys’ fees, costs and expenses incurred in enforcing this agreement or collecting any sums due hereunder;
c) Liability to any third person or governmental agency to indemnify such person or agency for costs expended in connection with the items referenced in subparagraph ( b) herein; and
d) Diminution in the value of the Property, and damages for the loss of business and restriction on the use of or adverse impact on the marketing of rentable or usable space or of any amenity of the Property.
2) “Environmental Requirements” means all applicable present and future statutes regulations, rules, ordinances, codes, licenses, permits, orders, approvals, plans, authorizations, concessions, franchises, and similar items, of all governmental agencies, depa rtments, commissions, boards, bureaus, or instrumentalities of the United States, states and political subdivisions thereof and all applicable judicial, administrative, and regulatory decrees, judgments, and orders relating to the protection of human healt h or the environment, including, without limitation:
a) All requirements, including, but not limited to, those pertaining to reporting, licensing, permitting, investigation, and remediation of emissions, discharges, releases, or threatened releases of Hazardous Materials, chemical substances, pollutants, contaminants, or hazardous or toxic substances, materials or wastes whether solid, liquid, or gaseous in nature, into the air, surface water, groundwater, or land, or relating to the manufacture, processing, distribution, use, treatment, storage, disposal, transport, or handling of chemical substances, pollut ants, contaminants, or hazardous or toxic substances, materials or wastes, whether solid, liquid, or gaseous in nature; and
b) All requirements pertaining to the protection of the health and safety of employees or the public.
3) “Hazardous Material” means any substance:
15 a) the presence of which requires investigation or remediation under any federal, state or local statute, regulation, ordinance, order, action, policy or common law; or
b) which is or becomes defined as a “hazardous waste,” “hazardous substances,” pollutant or contaminant under any federal, state or local statute, regulation, rule or ordinance or amendments thereto including, without limitation, the Comprehensive Environmental Response, Compensation and Liability Act (42 U.S.C. Section 9601 et seq.); and/or the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et seq.); or
c) which is toxic, explosive, corrosive, flammable, infectious, radioactive, carcinogenic, mutagenic, or otherwise hazardous and is or becomes regulated by any governmental authority, agency, department, commission, board, agency or instrumentality of the United States, the State of California or any political subdivision thereof; or
d) the presence of which on the Property poses or threatens to pose a hazard to the health or safety of persons on or about the Property; or
e) which contains petroleum, petroleum products or other hydrocarbon substances; or
f) which contains polychlorinated biphenyls (PCB’s), asbestos, urea formaldehyde foam insulation or radon gas.
D. Commitments Survive Closing. The waivers, releases, and obligations of the Parties in this section shall survive the Closing.
7. DEVELOPER’S ACKNOWLEDGMENT AND GENERAL RELEASE.
A. “AS-IS” Sale. Developer acknowledges and agrees it is purchasing the Property in its “AS- IS” condition, without representation or warranty, express or implied, except as set forth in this Agreement; provided, however, that the foregoing shall not relieve City from its obligations under applicable law to disclose material facts about the Property known to City.
B. Waivers and Releases . Except with respect to affirmative representations or continuing obligations set forth in this Agreement, the Grant Deed, Purchase Note Deed of Trust, Purchase Note, Development Agreement , or OPA, u pon the Closing the Parties hereby waive to the maximum legal extent any and all claims, remedies and causes of action for damages, liabilities, losses or injuries related to City’s sale of the Property or Developer’s purchase of the Property or development and operation of the Project thereon , whether known or unknown, foreseeable or unforeseeable. Each Party, on behalf of itself and its successors and assigns, hereby fully releases the other Party and each of their respective successors, agents, representatives and assigns from all claims and causes of action by reason of any damage which has been sustained, or may be sustained, as a result of the matters covered by this section.
C. California Civil Code Section 1542. The Parties expressly desire and agree that the waivers and releases covered by this section include a waiver of the protections of Civil Code Section 1542.
16 Each Party hereby acknowledges that it has either consulted with legal counsel, or had an opportunity to consult with legal counsel regarding, and represents and warrants that it is familiar with the provisions of, California Civil Code Section 1542 which provides:
“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.”
Each Party acknowledges that it may have sustained damage, loss, costs or expenses which are presently unknown and unsuspected, and such damage, loss, costs or expenses which may have been sustained, may give rise to additional damage, loss, costs or expenses in the future.
Nevertheless, each Party hereby acknowledges, represents and warrants that this Agreement and corresponding waivers and releases has been negotiated and agreed upon in light of that situation, and hereby waives, to the maximum legal extent, any rights accruing to it under Section 1542 or other statute or judicial decision of similar effect.
___________ ___________
City’s Initials Developer’s Initials
D. Commitments Survive Closing . The waivers, releases, and obligations of the Parties in this section shall survive the Closing.
8. REPRESENTATIONS. Neither Party is relying upon any representations or warranties other than those set out in this Agreement, and the representations and warranties set out in this Agreement constitute all of the representations and warranties of the Parties in regard to this transaction.
A. City’s Representations. City represents and warrants to Developer as follows: (1) Except as otherwise disclosed by City or discovered by Developer during the Contingency Period or prior to the Effective Date hereof , there are no physical or legal facts, circumstances, problems or governmental actions known to City with respect to the Property which, if disclosed to Developer, would materially or adversely impact decisions regarding acquisition and development of the Property; (2) City has no knowledge of any violations of governmental codes, ordinances, regulations or orders with respect to the Property; (3) neither this Agreement nor anything provided to be done hereunder by City violates or shall violate any contract, agreement, or instrument to which City is a party; (4) except as otherwise disclosed to Developer, there is no suit, legal action, administrative arbitration or other proceeding or governmental investigation process which has been served upon City or, which to City’s actual knowledge, is otherwise pending or threatened against City in which any party is making or has made a claim or defense that, if sustained, would materially and adversely affect the performance of City under this Agreement or materially and adversely interfere with the ability of City to consummate the transactions contemplated herein ; and (5) each of the foregoing items ( 1) through ( 4) shall be deemed to be an on -going representation and warranty and shall survive in perpetuity. City shall advise Developer in writing within seven (7) days, if there is any change pertaining to any matters set forth or referenced in the foregoing items (1) through (4).
17 B. Developer’s Representations. Developer represents and warrants to City as follows: (1) upon and after the Effective Date, Developer will pursue applications for Project Entitlements and the design, development, construction, and opening of the Project in accordance with the OPA; (2) Developer has duly authorized, executed and delivered this Agreement and Developer has or will authorize, execute and deliver, within the times set forth therefore in the Schedule of Performance any and all other agreements and documents required to be authorized, executed and delivered by Developer in order to carry out, give effect to and consummate the transaction contemplated by this Agreement ; ( 3) neither this Agreement nor anything provided to be done hereunder by Developer violates or shall violate any contract, agreement, or instrument to which Developer is a party, to Developer ’s actual knowledge; ( 4) Developer has valid and enforceable franchise , licensing, intellectual property, or similar rights to develop the Project contemplated by the Agreement; (5); this Agreement is a valid and binding agreement enforceable against Developer in accordance with its terms, subject to laws relating to bankruptcy and creditor’s rights and generally applicable equitable principles ; ( 6) there is no suit, legal action, administrative arbitration or other proceeding or governmental investigation process which has been served upon Developer or, which to Developer’s actual knowledge, is otherwise pending or threatened against Developer in which any party is making or has made a claim or defense that, if sustained, would materially and adversely affect the performance of Developer under this Agreement or materially and adversely interfere with the ability of Developer to consummate the transactions contemplated herein; (7) upon and after the Effective Date, Developer will pursue obtaining financial resources to acquire the Property and develop the Project thereon as contemplated by this Agreement , including by pursuing the raising of adequate equity, capital, debt, and/or other financing necessary to pay all Development Costs, and Developer will not proceed with the Closing unless and until it has secured commitments for such financing; (8) Developer is entering into this Agreement for the purpose of developing the Property with the Project and not for speculation in land holding or land banking; ( 9) Developer recognizes the fact that the qualifications , experience and identity of Developer are of particular concern to City and that it is because of such qualifications and identity that City is entering into this Agreement with Developer; and (10) each of the foregoing items (1) through (9) shall be deemed to be an on-going representation and warranty. Developer shall advise City in writing with seven (7) days if there is any change pertaining to any matters set forth or referenced in the foregoing items (1) through (9) prior to the Closing.
9. TERMINATION, DEFAULTS AND REMEDIES.
A. Termination for Convenience. Prior to the Closing, and upon thirty (30) days written notice and opportunity for the other Party to cure or perform, either Party may terminate this for convenience on the grounds specified in Sections 4(D) and 4(G). Except as provided otherwise herein, the Party electing to terminate for convenience shall pay any Title Company termination fees and charges, if any (collectively, “ Termination Costs ”) and the Deposit shall be returned to Developer minus any Termination Costs due by Developer. City will pay any Termination Costs due directly to Escrow. Upon such termination, all obligations and liabilities of the Parties under this Agreement, excepting for the obligation to pay Termination Costs as provided herein, shall cease and terminate.
18 B. Termination for Breach . In the event either Party fails or refused to any obligation hereunder which it is obligated to perform prior to the Closing (other than the circumstances upon which termination for convenience is permitted under covered Section 9.A . above), and fails to cure such violation within 30 days after receipt of written notice from the other Party, then, in addition to pursuing any other rights or which the Party may have at law or in equity , including but not limited to an action in specific performance to compel compliance and proceed with the Closing, the Party may terminate this Agreement and the Escrow by giving notice, in writing, of such termination to the defaulting Party and Title Company. In the event City elects to terminate this Agreement pursuant to the foregoing, the Deposit shall be paid to City as liquidated damages for Developer’s breach and Developer shall be liable for Termination Costs which shall be paid directly by Developer into Escrow . In the event Developer elects to terminate this Agreement pursuant to the foregoing, City shall be liable Termination Costs plus the actual, verifiable and documented Development Costs incurred by Developer in furtherance of the Project prior to the effective date of termination , which shall be paid directly by City to Developer with the entire Deposit being returned by Escrow to Developer.
IF CLOSING FAILS TO OCCUR SOLELY BECAUSE OF A PARTY’S DEFAULT, AND
THE NON -DEFAULTING PARTY ELECTS TO TERMINATE THIS AGREEMENT,
THE NON -DEFAULTING PARTY WILL BE DAMAGED AND WILL BE ENTITLED
TO COMPENSATION FOR THOSE DAMAGES, BUT SUCH DAMAGES WILL BE EXTREMELY DIFFICULT AND IMPRACTICAL TO ASCERTAIN. EACH PARTY
DESIRES TO LIMIT THE AMOUNT OF DAMAGES FOR WHICH THEY MIGHT BE LIABLE SHOULD IT BREACH THIS AGREEMENT. BOTH DEVELOPER AND CITY
WISH TO AVOID THE COSTS AND LENGTHY DELAYS THAT WOULD RESULT IF
A PARTY FILED A LAWSUIT TO COLLECT ITS DAMAGES FOR A BREACH OF THIS AGREEMENT. IF THIS AGREEMENT IS TERMINATED BECAUSE OF A PARTY’S DEFAULT, THEN THE DEPOSIT , TERMINATION COSTS, AND/OR
DEVELOPMENT COSTS, EACH AS ALLOCATED ABOVE, SHALL BE DEEMED TO CONSTITUTE A REASONABLE AND FINAL ESTIMATE OF EACH PARTY’S
DAMAGES AND SHALL BE RETAINED BY THE NON -DEFAULTING PARTY AS LIQUIDATED DAMAGES AS THE NON -DEFAULTING PARTY’S SOLE AND
EXCLUSIVE REMEDY FOR BREACHES OF THIS AGREEMENT THAT RESULT IN A FAILURE OF THE CLOSING. CITY AND DEVELOPER 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 NON -DEFAULTING PARTY PURSUANT TO CALIFORNIA CIVIL CODE SECTIONS 1671, 1676 AND 1677.
THIS SECTION SHALL SURVIVE THE TERMINATION OF THIS AGREEMENT.
19 THIS SECTION SHALL APPLY ONLY TO BREACHES OF THIS AGREEMENT THAT
PREVENT OR RESULT IN A FAILURE OF THE CLOSING AND SHALL NOT OPERATE TO LIMIT OR OTHERWISE RESTRICT THE PARTIES’ RIGHTS AND REMEDIES RELATING TO OTHER DISPUTES.
__________________ ___________________
DEVELOPER’S INITIALS CITY’S INITIALS
C. Return of Funds and Documents; Release of Liability as to Title Company . In the event Title Company terminates this Escrow as a result of having received notice, in writing, from Developer or City of its election to terminate the Escrow on grounds permitted herein , then at 5:00 p.m. on the date that is fifteen days after receipt of such notice, Title Company shall terminate the Escrow and return all funds, less Termination Costs as specified in this Agreement ; unless prior to expiration of such time period the other Party provides written notice to the Title Company of its intent to dispute such termination . Any documents in the possession of the Title Company shall be returned to the Party who deposited those documents into Escrow. Further, the Parties hereby release Escrow Holder, and shall hold Escrow Holder free and harmless, from all liabilities associa ted with such termination excepting for Escrow Holder’s obligations to return funds and documents as provided herein.
D. No Consequential Damages. Notwithstanding anything to the contrary elsewhere in this Agreement or provided for under any applicable law, neither Party shall, in any event, be liable to the other Party, either in contract, tort or otherwise, for any consequential , incidental, indirect, special or punitive damages from such other person, including loss of future revenue, income or profits, diminution of value or loss of business reputation or opportunity relating to the default or alleged breach hereof, whether or not the possibility of such damages has been disclosed to the other Party in advance or could have been reasonably foreseen by such other Party.
E. No Liability For Party Officials or Employees. No member, official or employee of either Party shall be personally liable to the other Party, or any successor in interest, in the event of any default or breach of this Agreement or for any amount which may become due to a Party or its successor hereunder.
10. NOTICES AND DEMANDS. All notices or other communications required or permitted between the Parties hereunder shall be in writing, and shall be (i) personally delivered, (ii) sent by United States registered or certified mail, postage prepaid, return receipt requested or (iii) sent by nationally recognized overnight courier service (e.g., Federal Express or United Parcel Service), addressed to the Party to whom the notice is given at the addresses provided below, subject to the right of any Party to designate a different complet e address for itself by notice similarly given.
Any notice so given by registered or certified United States mail shall be deemed to have been given on the third business day after the same is deposited in the United States mail. Any notice not so given by registered or certified mail, such as notices delivered by personal delivery or courier service, shall be deemed given upon receipt, rejection or refusal of the same by the Party to whom the notice is given. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of the notice or other communication sent.
20 To City: City of Buena Park
Buena Park City Hall
ATTN: City Manager
6650 Beach Boulevard
Buena Park CA 90622
With Copy To: City of Buena Park
Buena Park City Hall
ATTN: City Attorney
6650 Beach Boulevard
Buena Park CA 90622
To Developer: Buena Park Boardwalk, LLC
9500 E Via de Ventura, Suite E100
Scottsdale, AZ 85256
Attn: Adi Knishinsky
11. MISCELLANEOUS.
A. Environmental Clearance. Before approving and entering into this Agreement, City analyzed the potential environmental impacts of the Project in accordance with the California Environmental Quality Act (“CEQA”), and after considering all evidence presented the City Council has determined that the Project is exempt from further environmental review pursuant to Public Resources Code section 21083.3 and CEQA Guidelines Section 15183, as set forth fully in the ordinance approving the Development Agreement.
B. Confidentiality of Developer’s Information. The Financing Plan and other proprietary or financial information provided by Developer to City in connection with this Agreement (whether in written, graphic, electronic, or any other form) that is by its nature and substance clearly intended to be confidential or proprietary, or is otherwise clearly marked as “CONFIDENTIAL / PROPRIETARY INFORMATION” by Developer (“Confidential Information”), is and shall be considered by the Parties to be the proprietary and personal financial information of Developer.
The Parties agree that Confidential Information is protected from disclosure to third -parties by applicable law, including but not limited to privacy rights in Cal. Const. art. I, section 1. Subject to City's legal obligations, including under the California Public Records Act, the Confidential Information shall be kept confidential and not be disclosed by City to a third-party except as may be agreed to by Developer or ordered by a court of competent jurisdiction. City’s use and disclosure of Confidential Information shall be limited to administering, ensuring compliance with, and/or enforcing the terms of this Agreement.
C. Prohibition Against Transfer, Change in Ownership, Management and Control of Developer. Developer’s identity, experience, and capacity to complete the Project are important to City. Developer may not assign this Agreement prior to the Closing without the City’s written consent, which will may be approved or denied in the sole and absolute discretion of City , with rights of assignment after the Closing being as specified in the OPA.
21 D. Conflicts of Interest. No member, official or employee of City shall have any personal interest, direct or indirect, in this Agreement, nor shall any member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. No member, official or employee of City shall be personally liable to Developer, or any successor in interest, in the event of any default or breach by City, or for any amount which may become due to Developer or successor or on any obligations under the terms of this Agreement.
Developer warrants that it has not paid or given, and will not pay or give, any third person any money, campaign contribution, or other consideration for obtaining this Agreement, nor provided any gift, contribution, income, or other benefit to an official or employee of City that creates a conflict of interest under California law, except to the extent such conflict was disclosed on the record and avoided (e.g. through the non -participation of the recipient official) in the manner required by law.
E. Brokers and Sales Commissions. City has not engaged any real estate broker or agent with respect to this Agreement. If Developer does engage a real estate broker or agent in connection with marketing or soliciting interest in the Property, Developer shall be responsible for all fees, commissions, costs and expenses of any broker, and shall indemnify, protect, defend and hold harmless City and its successors hereunder from and against any and all claims, liabilities, obligations, losses, damages, costs and expenses, including, without limitation, reasonable attorney’s fees, court costs and litigation expenses, arising from or in connection with any sales or brokerage commissions, finder’s fees or other commissions which are (or are claimed to be) payable in connection with the transaction which is the subject of this Agreement by reason of the actions (or alleged actions) of Developer.
F. Survival of Covenants . Except as otherwise expressly provided herein, the covenants, representations and warranties of each Party set forth in this Agreement, the Grant Deed, Purchase Note, Purchase Note Deed of Trust, Development Agreement, OPA, and REA shall survive this Agreement and the Closing and continue in full force and effect for the term so stated in the applicable agreement or instrument.
G. Required Actions of Parties. Each Party agrees to execute such instruments and documents and to diligently undertake such actions as may be reasonably required and shall use commercially reasonable efforts to effectuate the Closing in accordance with the provisions hereof.
H. Time of Essence. Time is of the essence of each and every term, condition, obligation and provision hereof in which time is a factor. If the date for performance of any obligation hereunder or the last day of any time period provided for herein shall fall on a Saturday, Sunday or legal holiday, then said date for performance or time period shall expire on the first day thereafter which is not a Saturday, Sunday or legal holiday in the locality (State of California, City of Buena Park) where the Property is located.
I. Counterparts. This Agreement may be executed in multiple counterparts and delivered as originals, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.
22 J. Captions. Any captions to, or headings of, the paragraphs or subparagraphs of this Agreement are solely for the convenience of the Parties, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agree ment or any provision hereof.
K. No Obligations to Third Parties. The execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the Parties to, any person or entity other than the Parties and, to the extent this Agreement constitutes escrow instructions, the Title Company.
L. Exhibits and Attachments. The following exhibits attached hereto are hereby incorporated fully into this Agreement by this reference as if set out if full:
Exhibit A – Legal Description of Property
Exhibit B – Grant Deed
Exhibit C – Purchase Note
Exhibit D – Purchase Note Deed of Trust
Exhibit E – Owner Participation Agreement
Exhibit F – Reciprocal Easement and Maintenance Agreement Exhibit G – Surplus Land Act Covenant
M. Waiver. The waiver or failure to enforce any provision of this Agreement shall not operate as a waiver of any future breach of any such provision or any other provision hereof.
N. Applicable Law. All questions with respect to this Agreement, and the rights and liabilities of the Parties and venue hereto, shall be governed by the laws of the State of California. Any and all legal actions sought to enforce the terms and provisions of the Agreement shall be brought in the courts of the County of Orange.
O. Assignment. Neither Party shall assign this Agreement to any party without the prior written consent of the other Party, except as may be permitted in the OPA.
P. Successors and Assigns . This Agreement shall be binding upon and shall inure to the benefit of the successors and assigns of the Parties hereto.
Q. Severability. If any term or provision of this Agreement shall be held invalid or unenforceable, the remainder of this Agreement shall not be affected.
R. Construction. This Agreement will be liberally construed to effectuate the intention of the Parties with respect to the transaction described herein. In determining the meaning of, or resolving any ambiguity with respect to, any word, phrase or provision of this Agree ment, neither this Agreement nor any uncertainty or ambiguity herein will be construed or resolved against either Party (including the Party primarily responsible for drafting and preparation of this Agreement), under any rule of construction or otherwise, it being expressly understood and agreed that the
23 Parties have participated equally or have had equal opportunity to participate in the drafting thereof.
S. Legal Fees. Each Party shall be responsible for payment of its own attorney’s fees with respect to negotiation and preparation of this Agreement and processing of the escrow. However, if either Party to this Agreement shall breach its representations or warranties h ereunder or shall fail to fulfill or perform any of its covenants or obligations in this Agreement and a legal action is commenced, the non-prevailing party shall pay the costs of litigation, including, without limitation, reasonable attorneys' fees and ex pert witness fees, that may be incurred to enforce the terms, covenants, conditions and provisions of this Agreement, or to prove that no breach or misrepresentation occurred.
T. Fees and Other Expenses . Except as otherwise provided herein, each of the Parties shall pay its own fees and expenses in connection with this Agreement.
U. Entire Agreement . This Agreement supersedes any prior agreements, negotiations and communications, oral or written, and contains the entire agreement between Developer and City as to the purchase and sale of the Property. No subsequent agreement, representation, or promise made by either Party hereto, or by or to an employee, officer, agent or representative of either Party, shall be of any effect unless it is in writing and executed by the Party to be bound thereby.
V. Amendments to this Agreement . The terms of this Agreement may not be modified or amended except by an instrument in writing executed by each of the Parties hereto.
W. No Partnership, Third Person . It is not intended by this Agreement to, and nothing contained in this Agreement shall, create any partnership, joint venture or other arrangement between City and Developer except as specifically provided herein. No term or provision of this Agreement is intended to benefit any person, partnership, corporation or other.
NOTARIZED SIGNATURE PAGE TO BE ADDED
24 EXHIBIT “A” - PSDA
LEGAL DESCRIPTION OF THE PROPERTY
PARCEL 1: (APN 136-203-40)
THAT PORTION OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
THE NORTH 449.50 FEET OF THE SOUTH 62430 FEET OF THAT PORTION OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2.1 TOWNSHIP SOUTH, RANGE 11 WEST, IN THE
RANCHO LOS COYOTES, CITY DE -BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING EASTERLY OF THE EAST LINE OF TRACT NO. 2435, AS PER MAP RECORDED IN BOOK 111, PAGES 13 TO 16 INCLUSIVE OF SAID MISCELLANEOUS MAPS.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO, 89 -375668 OF OFFICIAL RECORDS.
ALSO EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED DECEMBER 26, 1997 AS INSTRUMENT NO. 97-664764 OF OFFICIAL RECORDS.
PARCEL 2: (APN'S: 136-211-57 AND 136-211-64)
THE SOUTH 175 FEET OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO. 89 -375668 OF OFFICIAL RECORDS.
25 EXHIBIT “B” - PSDA
GRANT DEED
RECORDING REQUESTED BY
AND WHEN RECORDED, MAIL TO:
City of Buena Park
[TO BE ADDED]
APN:
(Space Above this Line For Recorder’s
Use)
GRANT DEED
FOR VALUABLE CONSIDERATION, the receipt of which is hereby acknowledged, the CITY OF BUENA PARK, a California municipal corporation (“Grantor”), hereby GRANTS to BUENA PARK BOARDWALK, LLC , an Arizona limited liability company, (“Grantee”), that certain real property at 7711-7733 Beach Boulevard, Buena Park, California (Orange County Assessor Parcel Nos. 136-203-40, 136-211-64 and 136-211-57) in the City of Buena Park, County of Orange, State of California, more particularly described on Exhibit “A” attached hereto and incorporated herein by this reference together with all right, title and interest of Grantor in and to all buildings and improvements located thereon (“Property”).
THE PROPERTY IS CONVEYED TO GRANTEE SUBJECT TO:
1) Non-delinquent general and special real property taxes, assessments and supplemental assessments, if any, for the current fiscal year;
2) All covenants, conditions, restrictions, encumbrances, agreements, reservations, rights, rights-of-way, dedications, offers of dedication, easements and other matters of record, apparent, visible from an inspection of the Property, and/or which an accurate survey of the Property would disclose, or known to Grantee.
3) That certain land use covenant and restriction reflected in that certain grant deed for the Property between the City of Buena Park, as “Grantee,” and Proforma77 Corporation, as “Grantor,” recorded on July 22, 2022, as Instrument No. 2022000256176 in the O fficial Records for the County of Orange, California, which is incorporated fully herein and states as follows:
As a condition to Grantor’s agreement to sell the Property to Grantee, Grantee, and Grantee’s successor’s heirs and assigns, and successors-in-interest, shall not develop, improve, use, or otherwise operate the Property for housing or residential purposes (such as, without limitation, single family or multi -family residences, townhomes, apartments, condos, or similar housing units intended for permanent occupancy), and shall instead use the Property only for developments and uses that are consistent with th e provisions of the Buena Park Entertainment Corridor Specific Plan as the same reads on the date hereof. The foregoing
26 covenant and restriction shall run with the land, and shall expire upon the opening of such entertainment, hospitality, and/or tourist-oriented development on the Project. The Grantor, or its successors, heirs, assigns, or successors -in-interest, may speci fically enforce the covenants and restrictions in this section through an injunction or similar relief.
IN WITNESS WHEREOF, Grantor has executed this Grant Deed on this ___ day of ______, 2026, at Buena Park, California.
CITY OF BUENA PARK, a California municipal corporation
By: _________________________
Aaron France, City Manager
Notarized signature required.
27 Exhibit A to Grant Deed
[Legal Description of Property]
PARCEL 1: (APN 136-203-40)
THAT PORTION OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
THE NORTH 449.50 FEET OF THE SOUTH 62430 FEET OF THAT PORTION OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2.1 TOWNSHIP SOUTH, RANGE 11 WEST, IN THE
RANCHO LOS COYOTES, CITY DE -BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING EASTERLY OF THE EAST LINE OF TRACT NO. 2435, AS PER MAP RECORDED IN BOOK 111, PAGES 13 TO 16 INCLUSIVE OF SAID MISCELLANEOUS MAPS.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO, 89 -375668 OF OFFICIAL RECORDS.
ALSO EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED DECEMBER 26, 1997 AS INSTRUMENT NO. 97-664764 OF OFFICIAL RECORDS.
PARCEL 2: (APN'S: 136-211-57 AND 136-211-64)
THE SOUTH 175 FEET OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO. 89 -375668 OF OFFICIAL RECORDS.
28 EXHIBIT “C” - PSDA
PURCHASE PRICE PROMISSORY NOTE
PROMISSORY NOTE
SECURED BY DEED OF TRUST
(Arizona Boardwalk, LLC)
Principal Amount: $2,700,000.00 Date of Note: ______, 202__ Borrower: Buena Park Boardwalk, LLC, an
Arizona limited liability corporation.
Lender: City of Buena Park, a
California is a charter city and a municipal
corporation
Maturity Date: 60 Months from
Commencement Date
Commencement Date: 60 Days from Date of
Note
Interest Rate: 8% simple annual
1. Loan.
FOR VALUE RECEIVED, the undersigned ARIZONA BOARDWALK, LLC, an Arizona limited liability corporation (“Borrower”), with its principal place of business located at 9500 E Via de Ventura, Suite E100, Scottsdale AZ 85256 , promises to pay to the CITY OF BUENA PARK, a California charter city and a municipal corporation (“Lender”) at such place as Lender may, from time to time, designate by written notice to the Borrower, the maximum principal sum of $2,700,000.00, (the “Loan”), together with interest on the unpaid principal balance hereof from time to time outstanding. This Promissory Note (the “Note”) is made and given to evidence the Loan made by Lender to Borrower pursuant to the terms of that certain Agreement for the Purchase, Sale, and Development of Real Property between Borrower and Lender dated July ______, 2026 (“Purchase Agreement”), pursuant to which Borrower purchased from Lender and committed developing that certain real property located at 7711-7733 Beach Boulevard , Buena Park, California, and identified as Orange County Assessor Parcel Nos. 136-203-40, 136-211-64 and 136 -244-57 (the “ Property”), with Borrower’s development commitments being more specifically described in that certain Owner Participation Agreement between Borrower and Lender dated ________________, 2026, recorded on the Property contemporaneously with the Deed of Trust (“OPA”).
2. Definitions. All capitalized terms used but not defined herein shall have the meaning given in the Purchase Agreement or OPA, true and correct cop ies of which are on file and available for inspection or copying in the offices of the Buena Park City Clerk located at 6650 Beach Boulevard Buena Park, CA 90670.
29 3. Term of Loan and Right of Prepayment.
a. Maturity Date. All accrued interest, if any, and unpaid principal will be due and payable in full without any further demand or notice on or before 11:59 p.m. (PST) on the day that is 60 months from the Commencement Date.
b. Prepayment. This Note may be prepaid in whole or in part at any time and from time to time without penalty or premium.
4. Security for Loan.
This Note is secured by a Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) executed by Borrower which encumbers Borrower’s fee simple interest in the Property. This Note and the Deed of Trust securing shall be senior to all other liens, mortgages, or other encumbrances on the Property and shall not be subordinated except for liens securing Construction Funds permitted under the terms of the OPA.
5. Interest. Except in the case of Default as set forth in Section 8 of this Note, interest on the outstanding principal balance of the Loan shall accrue from the Date of Note until the earlier of the Maturity Date (as defined below) or the date paid in full, at rate of eight (8%) calculated annually (the “Interest Rate”). All computations of interest shall be based upon a 365-day year calculated based on the full principal then existing for each year.
6. Monthly Payments. Beginning on first day of the first full calendar month that occurs 60 days after the Date of Note (“Commencement Date”), and on or before the first day of each month thereafter until the Maturity Date, Borrower shall make monthly payments to Lender as set forth in Exhibit “A ” attached hereto and incorporated herein. All outstanding principal accrued interest and other amounts owing under Note shall, if not sooner paid, be due and payable on the Maturity Date. Borrower shall make all payments hereunder in lawful money of the United States and in same day or immediately available funds.
7. Default. Upon the occurrence of any of the following events constituting an event of default, this Note shall become immediately due and payable: (a) failure to make any payment hereunder within thirty (30) business days after written notice of past due; (b) the insolvency of Borrower, or the admission in writing of Borrower’s inability to pay debts as they mature; or (c) institution of bankruptcy, reorganization, insolvency or other similar proceedings by or against Borrower, or the appointment of a receiver, custodian or trustee for Borrower, or any substantial portion of its assets. Upon the occurrence of an event of default, at the option of Lender, the payment of all principal, interest and all other s ums due and owing in accordance with the terms of this Promissory Note will be accelerated and such principal, interest and other amounts shall be immediately due and payable, without notice, demand or presentment to Borrower or any other person or party, and failure to exercise said option shall not constitute a waiver on the part of Lender of the right to exercise said option at any other time. If this Promissory Note is not paid when due (whether by maturity, acceleration or otherwise), Lender shall have all of the rights and remedies provided at law or equity or by agreement, including, without limitation, the right to foreclose on its lien rights under the Deed of Trust or pursue a trustee’s sale against the Property
30 or offset or apply against the indebtedness any account balance or other deposit. Lender shall also have the right to exercise any and all rights, remedies and recourse granted herein now or hereinafter existing, in equity, at law, by virtue of statute or otherwise. All of the remedies of Lender, as provided herein or in any other agreements securing or relating to this Note, shall be cumulative and concurrent, and may be pursued singularly, successively or together, at the sole discretion of Lender, and may be exercised as often as occasion therefor shall arise. No delay by Lender in the exercise of any right or remedy shall operate as a waiver. No single or partial exercise by Lender of any right or remedy shall preclude any future exercise of such righ t or remedy or the exercise of any other right or remedy. No waiver or indulgence by Lender of any default or event of default shall be effective unless in writing and signed by Lender, nor shall a waiver on one occasion be construed as a bar to any right or remedy, or waiver of any default or event of default on any future occasion.
8. Interest on Default . From and after a Default, the entire outstanding principal balance of this Note will automatically bear an annual interest rate equal to the lesser of 10% compounding annually or the maximum interest rate allowed by law.
9. No Recissions of Abatement. This Promissory Note is not subject to any valid right of rescission, set-off, abatement, diminution, counterclaim or defense as against Lender, including the defense of usury, and the operation of any of the terms of the Loan, or the exercise of any right thereunder, will not render this Note unenforceable, in whole or in part, or subject to any right of rescission, set-off, abatement, diminution, counterclaim or defense, including the defense of usury, and Lender has not taken any action which would give rise to the assertion of any of the foregoing and no such right of rescission, set-off, abatement, diminution, counterclaim or defense, including the defense of usury, has been asserted with respect thereto
10. Preferential Payments. If any payment made by Borrower in connection with this Note is, in whole or part, invalidated, declared to be fraudulent or preferential, set aside, required to be repaid by Lender, or paid over to a trustee, receiver or any other entity, whether under any bankruptcy act or otherwise (“Preferential Payment”), then the indebtedness of Borrower under this Note shall continue or shall be reinstated, as the case may be, and the indebtedness intended to be satisfied by such Preferential Payment shall be revived and continued in full force and effect as if the Preferential Payment had not been made.
11. Borrower Liability for Debt . Borrower, if more than one, shall be jointly and severally liable for all obligations under this Note, and the term “Borrower” shall mean any one and all of them.
12. Costs Paid by Borrower. Borrower agrees to pay the following costs, expenses and attorneys’ fees paid or incurred by the, or as adjudged by a court of competent jurisdiction: (a) reasonable costs of collection, costs and expenses and attorneys’ fees paid or incurred in connection with the collection or enforcement of this Note, whether or not suit is filed; and (b) costs of suit in such sum as the court may adjudge reasonable as attorneys’ fees in any action to enforce payment of this instrument.
31 13. Waiver. To the extent permitted by law, Borrower and all persons or entities liable or which may become liable on this Note hereby waive diligence, presentment, protest and demand, notice of protest, dishonor and nonpayment of this instrument, and expressly agree that, without in any way affecting the liability of Borrower hereunder, Lender hereof may extend the Maturity Date or the time for payment of any payment due hereunder or any other term hereof, accept additional security, release any party liable hereunder or release any security now or hereafter securing this Note. Borrower hereby waives, to the fullest extent permitted by law, the right to plead any and all statutes of limitations as a defense to any demand on this instrument or any deed of trust, security agreement, guarantee or other agreement now or hereafter securing this Note.
14. Severability. If any provision of this Note is determined by a court of competent jurisdiction to be void or unenforceable, such determination will not affect any other provision of this instrument, and all other provisions hereof will remain valid and in full force and effect.
15. Non-Waiver. No delay by Lender in demanding or failure to demand performance hereunder will constitute a waiver by Lender of its right to subsequently demand such performance or to exercise any remedies for any Default hereunder. Further, in order to be effective, any waiver of any of Lender’s rights and remedies hereunder must be expressed in a writing signed by a duly appointed representative of Lender. Further, waiver by Lender of any right hereunder will not constitute a waiver of any other right, including, but n ot limited to, the right to exercise any and all remedies for a different or subsequent event of Default hereunder.
16. Amendments. The terms of this Promissory Note may only be changed in writing, executed by Borrower and Lender.
17. Governing Law; Venue for Disputes. This Promissory Note shall be governed by the laws of the State of California, without any reference to conflict of laws principles. With respect to any suit, action or proceeding relating to this Note, Borrower irrevocably: (a) submits to the exercise of personal jurisdiction over Borrower and Lender by any state court having jurisdiction in the State of California, and (b) waives any objection which it may have at any time to the laying of venue of any proceeding brought in any such court, waives any c laim that any proceeding has been brought in an inconvenient forum and further waives the right to object, with respect to such proceeding, that such court does not have jurisdiction over such party.
NOW THEREFORE, Borrower has caused this Note to be executed by the duly authorized representative set forth below:
NORATRIZED SIGNATURES OF PARTIES TO BE ADDED
32 Exhibit A – Promissory Note
Repayment Schedule
Payment # Payment Amount ($) Interest ($) Principal ($) Remaining Principal ($) 1 $54,746.26 $18,000.00 $36,746.26 $2,663,253.74
2 $54,746.26 $17,755.02 $36,991.24 $2,626,262.50
3 $54,746.26 $17,508.42 $37,237.85 $2,589,024.65
4 $54,746.26 $17,260.16 $37,486.10 $2,551,538.55
5 $54,746.26 $17,010.26 $37,736.01 $2,513,802.54
6 $54,746.26 $16,758.68 $37,987.58 $2,475,814.96
7 $54,746.26 $16,505.43 $38,240.83 $2,437,574.13
8 $54,746.26 $16,250.49 $38,495.77 $2,399,078.36
9 $54,746.26 $15,993.86 $38,752.41 $2,360,325.95
10 $54,746.26 $15,735.51 $39,010.76 $2,321,315.19
11 $54,746.26 $15,475.43 $39,270.83 $2,282,044.36
12 $54,746.26 $15,213.63 $39,532.64 $2,242,511.72
13 $54,746.26 $14,950.08 $39,796.19 $2,202,715.54
14 $54,746.26 $14,684.77 $40,061.49 $2,162,654.04
15 $54,746.26 $14,417.69 $40,328.57 $2,122,325.47
16 $54,746.26 $14,148.84 $40,597.43 $2,081,728.04
17 $54,746.26 $13,878.19 $40,868.08 $2,040,859.97
18 $54,746.26 $13,605.73 $41,140.53 $1,999,719.44
19 $54,746.26 $13,331.46 $41,414.80 $1,958,304.63
20 $54,746.26 $13,055.36 $41,690.90 $1,916,613.73
21 $54,746.26 $12,777.42 $41,968.84 $1,874,644.89
22 $54,746.26 $12,497.63 $42,248.63 $1,832,396.26
23 $54,746.26 $12,215.98 $42,530.29 $1,789,865.97
24 $54,746.26 $11,932.44 $42,813.82 $1,747,052.15
25 $54,746.26 $11,647.01 $43,099.25 $1,703,952.90
26 $54,746.26 $11,359.69 $43,386.58 $1,660,566.32
27 $54,746.26 $11,070.44 $43,675.82 $1,616,890.50
28 $54,746.26 $10,779.27 $43,966.99 $1,572,923.50
29 $54,746.26 $10,486.16 $44,260.11 $1,528,663.39
30 $54,746.26 $10,191.09 $44,555.18 $1,484,108.22
31 $54,746.26 $9,894.05 $44,852.21 $1,439,256.01
32 $54,746.26 $9,595.04 $45,151.22 $1,394,104.78
33 $54,746.26 $9,294.03 $45,452.23 $1,348,652.55
34 $54,746.26 $8,991.02 $45,755.25 $1,302,897.30
33 35 $54,746.26 $8,685.98 $46,060.28 $1,256,837.02
36 $54,746.26 $8,378.91 $46,367.35 $1,210,469.67
37 $54,746.26 $8,069.80 $46,676.47 $1,163,793.20
38 $54,746.26 $7,758.62 $46,987.64 $1,116,805.56
39 $54,746.26 $7,445.37 $47,300.89 $1,069,504.67
40 $54,746.26 $7,130.03 $47,616.23 $1,021,888.43
41 $54,746.26 $6,812.59 $47,933.68 $973,954.76
42 $54,746.26 $6,493.03 $48,253.23 $925,701.52
43 $54,746.26 $6,171.34 $48,574.92 $877,126.60
44 $54,746.26 $5,847.51 $48,898.75 $828,227.85
45 $54,746.26 $5,521.52 $49,224.75 $779,003.10
46 $54,746.26 $5,193.35 $49,552.91 $729,450.19
47 $54,746.26 $4,863.00 $49,883.26 $679,566.93
48 $54,746.26 $4,530.45 $50,215.82 $629,351.11
49 $54,746.26 $4,195.67 $50,550.59 $578,800.52
50 $54,746.26 $3,858.67 $50,887.59 $527,912.93
51 $54,746.26 $3,519.42 $51,226.85 $476,686.08
52 $54,746.26 $3,177.91 $51,568.36 $425,117.72
53 $54,746.26 $2,834.12 $51,912.15 $373,205.58
54 $54,746.26 $2,488.04 $52,258.23 $320,947.35
55 $54,746.26 $2,139.65 $52,606.62 $268,340.74
56 $54,746.26 $1,788.94 $52,957.33 $215,383.41
57 $54,746.26 $1,435.89 $53,310.38 $162,073.03
58 $54,746.26 $1,080.49 $53,665.78 $108,407.26
59 $54,746.26 $722.72 $54,023.55 $54,383.71
60 $54,746.26 $362.56 $54,383.71 $0.00
Total $3,284,775.87 $584,775.87 $2,700,000.00
34 EXHIBIT “D” – PSDA
DEED OF TRUST SECURING PROMISSORY NOTE
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
City of Buena Park
6650 Beach Boulevard
Buena Park, California 90622
Attn: City Clerk
APNs: 136-203-40, 136-211-57 & 136-211-64
SPACE ABOVE FOR RECORDER'S USE ONLY
EXEMPT FROM RECORDING FEE PER
GOVERNMENT CODE §27383
DEED OF TRUST, SECURITY AGREEMENT AND FIXTURE FILING
(WITH ASSIGNMENT OF RENTS)
(Buena Park Boardwalk)
This Deed of Trust, Security Agreement and Fixture Filing (with Assignment of Rents) ("Deed of Trust") is dated as of ____________, 2026, by BUENA PARK BOARDWALK, LLC, an Arizona limited liability corporation, with its principal place of business located at 9500 E Via de Ventura, Suite E100, Scottsdale AZ 85256 (“Trustor”), to FIRST AMERICAN TITLE INSURANCE COMPANY, a California corporation (" Trustee"), for the benefit of the CITY OF BUENA PARK, a California charter city and municipal corporation, whose address is 6650 Beach Boulevard, Buena Park, California 90622 ("Beneficiary"), is executed to secure that certain promissory note of a date even herewith in the principal amount of Two Million Seven Hundred Thousand Dollars ($2,700,000.00) (the “Promissory Note ”), executed by Trustor in favor of Beneficiary (as it may from time to time be supplemented, amended extended, renewed or otherwise modified), the provisions of which are incorporated in the Deed of Trust by this reference.
Reference is made to that certain Agreement for the Purchase, Sale, and Development of Real Property between Borrower and Lender dated July ______, 2026 (“ Purchase Agreement ”), pursuant to which Borrower purchased from Lender the Subject Property that is encumbered by this Deed of Trust, and pursuant which Lender agreed to provide the Loan to Trustor that is reflected in the Promissory Note and secured by this Deed of Trust. A true and correct copy of the Purchase Agreement is available from the offices of the Buena Park City Clerk located at 6650 Beach Boulevard Buena Park, CA 90622.
Trustor hereby IRREVOCABLY GRANTS, TRANSFERS AND ASSIGNS to Trustee, its successors and assigns, in Trust, with POWER OF SALE TOGETHER WITH RIGHT OF ENTRY AND POSSESSION, the following property ("Trust Estate"):
(a) All of that certain real property in the City of Buena Park, County of Orange, State of California, more particularly described in Exhibit "A" attached hereto and by this reference made a part hereof ("Subject Property");
(b) All buildings, structures and other improvements now or in the future located or to be constructed on the Subject Property ("Improvements");
(c) All tenements, hereditament, appurtenances, privileges, franchises and other rights and interests now or in the future benefitting or otherwise relating to the Subject Property or the Improvements, including easements, rights -of-way and development rights ("Appurtenances").
35 (Appurtenances, together with the Subject Property and the Improvements, are hereafter collectively referred to as the "Real Property");
(d) Subject to the assignment to Beneficiary set forth in Paragraph 4 below, all rents, issues, income, revenues, royalties and profits now or in the future payable with respect to or otherwise derived from the Trust Estate or the ownership, use, management o peration, leasing or occupancy of the Trust Estate, including those past due and unpaid ("Rents");
(e) All present and future right, title and interest of Trustor in and to all inventory, equipment, fixtures and other goods (as those terms are defined in Division 9 of the California Uniform Commercial Code ("UCC"), whether existing now or in the future) located at, upon or about, or affixed or attached to or installed in, the Real Property, or used or to be used in connection with or otherwise relating to the Real Property or the ownership, use, development, cons truction, maintenance, management, operation, marketing, leasing or occupancy of the Real Property, including furniture, furnishings, machinery, appliances, building materials and supplies, generators, boilers, furnaces, water tanks, heating, ventilating and air conditioning equipment and all other types of tangible personal property of any kind or nature, and all accessories, additions, attachments, parts, proceeds, products, repairs, replacements and substitutions of or to any of such property ("Goods," and together with the Real Property, collectively the "Property"); and
(f) All present and future right, title and interest of Trustor in and to all accounts, general intangibles, chattel paper, deposit accounts, money, instruments and documents (as those terms are defined in the UCC) and all other agreements, obligations, rights and written material (in each case whether existing now or in the future) now or in the future relating to or otherwise arising in connection with or derived from the Property or any other part of the Trust Estate or the ownership, use, development, construction, maintenance, management, operation, marketing, leasing, occupancy, sale or financing of the Property or any other part of the Trust Estate, including (to the extent applicable to the Property or any other portion of the Trust Estate) ( i) permits, approvals and other governmental authorizations, (ii) improvement plans and specifications and architectural drawings, (iii) agreements with contractors, subcontractors, suppliers, project managers, supervisors, designers, architects, engineers, sales agents, leasing agents, consultants and property managers, (iv) takeout, refinancing and permanent loan commitments, (v) warranties, guaranties, indemnities and insurance policies, together with insurance payments and unearned insurance premiums, (vi) claims, demands, awards, settlements, and other payments arising or resulting from or otherwise relating to any insurance or any loss or destruction of, injury or damage to, trespass on or taking, condemnation (or conveyance in lieu of condemnation) or public use of any of the Property, (vii) license agreements, service and maintenance agreements, purchase and sale agreements and purchase options, together with advance payments, security deposits and other amounts paid to or deposited with Trustor under any such agreements, (viii) reserves, deposits, bonds, deferred payments, refunds, rebates, discounts, cost savings, escrow proceeds, sale proceeds and other rights to the payment of money, trade names, trademarks, goodwill and all other types of intangible personal property of any kind or nature, and (ix) all supplements, modifications, amendments, renewals, extensions, proceeds, replacements and substitutions of or to any of such property (collectively, "Intangibles").
Trustor further grants to Trustee and Beneficiary, pursuant to the UCC, a security interest in all present and future right, title and interest of Trustor in and to all Goods and Intangibles and all of the Trust Estates described above in which a security interest may be created under the UCC (collectively, the "Personal Property"). This Deed of Trust constitutes a security agreement under the UCC, conveying a security interest in the Personal Property to Trustee and Beneficiary. Trustee and Beneficiary shall have, in addition to all rights and remedies provided herein, all the rights and remedies of a "secured party" under the UCC and other applicable California law. Trustor covenants and agrees that this Deed of Trust constitutes a fixture filing under Sections 9313 and 9402(6) of the UCC.
36 FOR THE PURPOSE OF SECURING, in such order of priority as Beneficiary may elect, the following: (a) payment of the Promissory Note, and (b) due, prompt and complete observance, performance and discharge of each and every monetary and non-monetary condition, obligation, covenant and agreement contained herein (" Secured Obligations"). The Promissory Note and all of its terms are incorporated herein by reference and this conveyance shall secure any and all extensions, amendments, modifications or renewals thereof, however evidenced.
AND TO PROTECT THE SECURITY OF THIS DEED OF TRUST, TRUSTOR COVENANTS AND AGREES:
1. That Trustor shall perform its obligations as set forth in the Secured Obligations at the time and in the manner respectively provided therein;
2. That Trustor shall not permit or suffer the use of any of the Real Property for any purpose other than the use for which the same was intended at the time this Deed of Trust was executed;
3. That the Secured Obligations are incorporated in and made a part of this Deed of Trust.
Upon default of a Secured Obligation, and after the giving of notice and the expiration of any applicable cure period, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be due and payable. This Deed of Trust shall cover, and the property subject hereto shall include, all property now or hereafter affixed or attached to or incorporated upon the Subject Property in, to or under wh ich Trustor now has or hereafter acquires any right, title or interest, which, to the fullest extent permitted by law, shall be deemed fixtures and a part of the Subject Property. To the extent any of the property subject to this Deed of Trust consists of rights in action or personal property covered by the UCC, this Deed of Trust shall also constitute a security agreement, and Trustor hereby grants to Beneficiary, as secured party, a security interest in such property, including all proceeds thereof, for the purpose of securing the Secured Obligations. In addition, for the purpose of securing the Secured Obligations, Trustor hereby grants to Beneficiary, as secured party, a security interest in all of the property described herein in, to, or under which Trustor now has or hereafter acquires any right, title or interest, whether present, future or contingent, including, but not limited to, all equipment, inventory, accounts, general intangibles, instruments, documents and chattel paper, as those terms are defined in the UCC, and all other personal property of any kind (including, without limitation, money and rights to the payment of money), whether now existing or hereafter created, that are now or at any time hereafter (i) in the possession or control of Beneficiary in any capacity; (ii) erected upon, attached to or appurtenant to the Subject Property; (iii) located or used on the Subject Property or identified for use on the Subject Property (whether stored on the Subjec t Property or elsewhere); or (iv) used in connection with, arising from, related to, or associated with the Subject Property or any of the personal property described herein, the construction of any improvements on the Subject Property, the ownership, development, maintenance, management or operation of the Subject Property, the use or enjoyment of the Subject Property or the operation of any business conducted thereon, including, without limitation, all such property described as the Trust Estate hereinabo ve. The security interests granted in this Paragraph 3 are hereinafter severally and collectively called the "Security Interest". The Security Interest shall be self-operative with respect to the real property described herein but Trustor shall execute a nd deliver on demand such additional security agreements, financing statements and other instruments as may be requested in order to impose the Security Interest more specifically upon the real and personal property encumbered hereby. The Security Interes t, at all times, shall be prior to any other interest in the personal property encumbered hereby. Trustor shall act and perform as necessary and shall execute and file all security agreements, financing statements, continuation statements and other documents requested by Beneficiary to establish, maintain and continue the perfected Security Interest. Trustor, on demand, shall promptly pay all costs and expenses of filing and recordation, to ensure the continued priority of the Security Interest. Trustor shall not sell, transfer, assign or otherwise dispose of any personal property
37 encumbered hereby without obtaining the prior written consent of Beneficiary, except that the Trustor may, sell, purchase, replace or dispose of personal property in the ordinary course of business or this has become obsolescence. Unless Beneficiary then agrees otherwise in writing, all proceeds from any permitted sale or disposition in excess of that required for full replacement shall be paid to Beneficiary to be applied on the Note subject to the rights of any senior lenders. Although proceeds of personal property are covered hereby, this shall not be construed to mean that Beneficiary consents to any sale of such personal property. Upon its recordation in the real property records of Orange County, this Deed of Trust shall be effective as a financing statement filed as a fixture filing. In addition, a carbon, photostatic or other reproduced copy of this Deed of Trust and/or any financing statement relating hereto shall be sufficient for filing and/or recording as a financing statement;
4. That, subject to the rights of holders of any senior deed of trust, all rents, profits and income from the property covered by this Deed of Trust are hereby assigned to the Beneficiary for the purpose of discharging the debt hereby secured. Permission is hereby given to Trustor so long as no default exists hereunder after the giving of notice and the expiration of any applicable cure period, to collect such rents, profits and income for use in accordance with the provisions of the Secured Obligations;
5. That, subject to the rights of holders of any senior deed of trust, upon default hereunder or under the aforementioned agreements, and after the giving of notice and the expiration of any applicable cure period, Beneficiary shall be entitled to the appointment of a receiver by any court having jurisdiction, without notice, to take possession and protect the property described herein and operate same and collect the rents, profits and income therefrom;
6. That Trustor will keep the improvements now existing or hereafter erected on the Subject Property insured against loss by fire and such other hazards, casualties, and contingencies as may be required by applicable provisions of the Secured Obligations, and all such insurance shall be evidenced by standard fire and extended coverage insurance policy or policies. Such policies shall be endorsed with standard mortgage clause with loss payable to the Beneficiary and certificates thereof together with copies of original policies, if requested, shall be deposited with the Beneficiary;
7. To pay before delinquency any taxes and assessments affecting said Property; to pay, when due, all encumbrances, charges and liens, with interest, on said Property or any part thereof which appear to be prior or superior hereto; and to pay all costs, fees, and expenses of this trust. Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be required to pay and discharge any such tax, assessment charge or levy so long as Trustor is contesting the legality thereof in good faith and by appropriate proceedings, and Trustor has adequate funds to pay any liabilities contested pursuant to this Paragraph 7;
8. To keep said property in good condition and repair consistent with the terms and conditions of the Development Agreement and OPA; not to remove or demolish any buildings thereon except as permitted by the Development Agreement and OPA ; to complete or restore promptly and in good and workmanlike manner any building which may be constructed, damaged, or destroyed thereon to the extend provided for in the Development Agreement and OPA, and to pay when due all claims for labor performed and materials furnished therefor; to comply with all laws affecting said property or requiring any alterations or improvements to be made thereon (subject to Trustor's right to contest the validity or appl icability of laws or regulations); not to commit or permit bad faith waste thereof; not to commit, suffer or permit any act upon said property in violation of law and/or covenants, conditions and/or restrictions affecting said property; not to permit or su ffer any material alteration of or addition to the buildings or improvements hereafter constructed in or upon said Subject Property without the consent of the Beneficiary, which consent shall not be unreasonably withheld, conditioned or delayed , or as may be permitted by the Development Agreement or OPA;
38 9. To appear in and defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee, and to pay all costs and expenses, including cost of evidence of title and reasonable attorney's fees in a reasona ble sum, in any such action or proceeding in which Beneficiary or Trustee may appear;
10. Should Trustor fail, after the giving of notice and the expiration of the cure period specified in Section 32 hereof, or as such shorter notice and cure period as may be provided by law , to make any payment or do any act as herein provided, then Beneficiary or Trustee, but without obligation so to do and without notice to or demand upon Trustor and without releasing Trustor from any obligation hereof, may make or do the same in such manner and to such extent as either may deem necessary to protect the security hereof. Following default, after the giving of notice and the expiration of the cure period specified in Section 32 or otherwise applicable at law , Beneficiary or Trustee, being authorized to enter upon said property for such purposes, may commence, appear in and/or defend any action or proceeding purporting to affect the security hereof or the rights or powers of Beneficiary or Trustee; may pay, pu rchase, contest or compromise any encumbrance, charge, or lien which in the judgment of either appears to be prior or superior hereto; and, in exercising any such powers, may pay necessary expenses, employ counsel, and pay his reasonable fees;
11. Beneficiary shall have the right to pay all insurance premiums required by the Secured Obligations when due should Trustor fail to make any required premium payments after the giving of notice and the expiration of any applicable cure period. All such payments made by the Beneficiary shall be added to the sums secured hereby;
12. To pay immediately and without demand all sums so expended by Beneficiary or Trustee, under permission given under this Deed of Trust, with interest from date of expenditure, at the highest rate of interest permitted by law;
13. That the funds to be advanced hereunder are to be used in accordance with applicable provisions of the Secured Obligations; upon the failure of Trustor to do so, after the giving of notice and the expiration of any applicable cure period specified in Section 32, Trustor shall be in default hereunder;
14. Trustor further covenants that it will not voluntarily create, suffer, or permit to be created against the Subject Property subject to this Deed of Trust any lien or liens except as authorized by Beneficiary and/or as provided and/or authorized in the Secu red Obligations and further that it will keep and maintain the property free from the claims of all persons supplying labor or materials which will enter into the construction of any and all buildings now being erected or to be erected on said premises.
Notwithstanding anything to the contrary contained in this Deed of Trust, Trustor shall not be obligated to pay any claims for labor, materials or services which Trustor in good faith disputes and is diligently contesting, provided that Trustor shall, at Be neficiary's written request, within thirty (30) days after the filing of any claim or lien (but in any event, and without any requirement that Beneficiary must first provide a written request prior to foreclosure) record in the Office of the Recorder of Orange County, a surety bond in the amount required by law to protect against a claim of lien, or provide such other security reasonably satisfactory to Beneficiary;
15. That any and all improvements made or about to be made upon the Subject Property covered by this Deed of Trust and all plans and specifications, comply with all applicable municipal ordinances and regulations and all other applicable regulations made or promulgated, now or hereafter, by lawful authority, and that the same will upon completion comply with all such applicable municipal ordinances and regulations and with the rules of the applicable fire rating or inspection organization, bureau, association or office.
39 IT IS MUTUALLY AGREED THAT:
16. Trustor confirms that if Trustor should sell, enter into a contract of sale, convey, or in any way transfer all or any interest of Trustor in the Subject Property encumbered by this Deed of Trust or suffer Trustor's title or any interest therein to be dive sted, whether voluntarily or involuntarily, unless the same is permitted in the Note, without the prior written consent of the Beneficiary being first obtained, then Beneficiary shall have the right, at Beneficiary's sole option, to declare all sums payabl e under the Note secured hereby immediately due and payable in full, irrespective of the maturity date otherwise specified in the Note. No waiver of this right shall be effective unless in writing and signed by the Beneficiary.
Consent by the Beneficiary to any one such transaction shall not be deemed a waiver of the right to require such consent to future or successive transactions. Further, upon default under one of the Secured Obligations, and after the giving of notice and the expiration of any applicable cure period provided therein, the Beneficiary, at its option, may declare the whole of the indebtedness secured hereby to be immediately due and payable in full, irrespective of the maturity date otherwise specified in the Note;
17. As provided more specifically in the Secured Obligations, should the Property or any part thereof be taken or damaged by reason of any public improvement or condemnation proceeding, or damaged by fire, or earthquake, or in any other manner, subject to the rights of any senior lenders, Beneficiary shall be entitled to all compensation, awards, and other payments or relief therefor which are not used to reconstruct, restore or otherwise improve the Property or part thereof that was taken or damaged, and shall be entitled at its option to commence, appear in and prosecute in its own name, any action or proceedings, or to make any compromise or settlement, in connection with such taking or damage subject to the rights of any senior lenders. All such compensation, awards, damages, rights of action and proceeds which are not used to reconstruct, restore or otherwise improve the property or part thereof that was taken or damaged, including the proceeds of any policies of fire and other insura nce affecting said property, are hereby assigned to Beneficiary subject to the rights of any senior lenders;
18. Notwithstanding Sections 16 and 17, in the event that a portion of the Property is taken for a public improvement or pursuant to a condemnation proceeding and the primary uses on the Subject Property remain intact and continue to be owned and operated by Trustor in conformance with the applicable land use entitlements described in the Purchase Agreement, Beneficiary shall not declare all sums due and payable under the Note, nor shall the Beneficiary be entitled to any compensation, awards and other payments therefor, provided that subject to the rights of any senior lenders, such compensation, awards and other payments are used for (1) paying principal and interest owed on any senior loan, (2) making improvements to the Subject Property that are approved by Beneficiary, in its reasonable discretion, or (3) payment of principal owing under the Note. In the event that Trustor receives such compensation, awards or other payments and fails to expend the funds in conformanc e with subsections (1) and (2) this section within thirty (30) days of receipt of such funds, Trustor shall be in default under this Deed of Trust;
19. Upon default by Trustor in taking any action or in making any payments provided for herein, or in the Secured Obligations, if Trustor shall fail to perform any covenant or agreement in this Deed of Trust within thirty (30) days after written demand therefo r by Beneficiary (or, in the event that more than thirty (30) days is reasonably required to cure such default, should Trustor fail to promptly commence such cure, and diligently prosecute same to completion), after the giving of notice and the expiration of any applicable cure period, Beneficiary may declare all sums secured hereby immediately due and payable by delivery to Trustee of written declaration of default and demand for sale, and of written notice of default and of election to cause the property to be sold, which notice Trustee shall cause to be duly filed for record and Beneficiary may foreclose this Deed of Trust. Beneficiary shall also deposit with Trustee this Deed of Trust and all documents evidencing expenditures secured hereby;
40 20. After the lapse of such time as may then be required by law following the recordation of said notice of default, and notice of sale having been given as then required by law, Trustee, without demand on Trustor, shall sell said property at the time and place fixed by it in said notice of sale, either as a whole or in separate parcels, and in such order as it may determine at public auction to the highest bidder for cash in lawful money of the United States, payable at time of sale. Trustee may postpone sale of all or any portion of said property by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time and place of sale, and from time to time thereafter may postpone the sale by public announcement at the time fixed by the preceding postponement. Trustee shall deliver to the purchaser its Deed conveying the property so sold, but without any covenant or warranty, express or implied. The recitals in the Deed of any matters or facts shall be conclusive proof of the truthfulness thereof. Any person, including Trustor, Trustee or Beneficiary, may purchase at the sale. The Trustee shall apply the proceeds of sale to payment of (1) the expenses of such sale, together with the reasonable expenses of this trust including therein reasonable Trustee's fees or attorney's fees for conducting the sale, and the actual cost of publishing, recording, mailing and posting notice of the sale; (2) the cost of any search and/or other evidence of title procured in connection with such sale and revenue stamps on Trustee's Deed; (3) all sums expended under the terms hereof, not then repaid, with accrued interest at the maximum rate allowed by law; (4) all other sums then secured hereby; and (5) the remainder, if any, to the person or persons legally entitled thereto;
21. Beneficiary may from time to time substitute a successor or successors to any Trustee named herein or acting hereunder to execute this Deed of Trust. Upon such appointment, and without conveyance to the successor trustee, the latter shall be vested with a ll title, powers, and duties conferred upon any Trustee herein named or acting hereunder. Each such appointment and substitution shall be made by written instrument executed by Beneficiary, containing reference to this Deed of Trust and its place of record, which, when duly recorded in the proper office of the county or counties in which the property is situated, shall be conclusive proof of proper appointment of the successor trustee;
22. The pleading of any statute of limitations as a defense to any and all obligations secured by this Deed of Trust is hereby waived to the full extent permissible by law;
23. Upon written request of Beneficiary stating that all sums secured hereby have been paid and all obligations secured hereby have been satisfied, and upon surrender of this Deed of Trust to Trustee for cancellation and retention and upon payment of its fees, Trustee shall reconvey, without warranty, the property then held hereunder. The recitals in such reconveyance of any matters of fact shall be conclusive proof of the truthfulness thereof. The grantee in such reconveyance may be described as "the person or persons legally entitled thereto";
24. The trust created hereby is irrevocable by Trustor;
25. This Deed of Trust applies to, inures to the benefit of, and binds all parties hereto, their heirs, legatees, devisees, administrators, executors, successors, and assigns. The term "Beneficiary" shall include not only the original Beneficiary hereunder but also any future successor in interest to Beneficiary.
In this Deed of Trust, whenever the context so requires, the masculine gender includes the feminine and/or neuter, and the singular number includes the plural. All obligations of Trustor hereunder a re joint and several;
26. Trustee accepts this Trust when this Deed of Trust, duly executed and acknowledged, is made public record as provided by law. Except as otherwise provided by law, the Trustee is not obligated to notify any party hereto of pending sale under this Deed of Trust or of any action or proceeding in which Trustor, Beneficiary, or Trustee shall be a party unless brought by Trustee;
41 27. The undersigned Trustor requests that a copy of any notice of default and of any notice of sale hereunder be mailed to it at the address set forth in the Deed of Trust;
28. Trustor agrees at any time and from time to time, upon receipt of a written request from Beneficiary, to furnish to Beneficiary detailed statements in writing of income, rents, profits, and operating expenses of the premises, and the names of the occupants and tenants in possession, together with the expiration dates of their leases and full information regarding all rental and occupancy agreements, and the rents provided for by such leases and rental and occupancy agreements, and such other information regarding the premises and their use as may be requested by Beneficiary;
29. As is provided more specifically in the Secured Obligations, the obligations of Trustor thereunder are nonrecourse obligations of the Trustor. The sole recourse of Beneficiary shall be the exercise of its rights against the Property;
30. Notwithstanding specific provisions of this Deed of Trust, non -monetary performance hereunder shall not be deemed to be in default where delays or defaults are by reason of any event beyond the reasonable control of either Party, including without limitation, by labor disputes, fire, unusual delay in deliveries, weather or acts of God, terrorism, delay in the issuance of permits or approvals, acts of governmental entities, or unavoidable casualties . An extension of time for any such cause (a " Force Majeure Delay") shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause. If, however, notice by the party claiming such extension is sent to the other party more than thirty (30) days after the commencement of the cause, the period shall commence to run only thirty (30) days prior to the giving of such notice. Times of performance under this Deed of Trust may also be extended in writing by the Beneficiary and Trustor;
31. If the rights and liens created by this Deed of Trust shall be held by a court of competent jurisdiction to be invalid or unenforceable as to any part of the obligations described herein, the unsecured portion of such obligations shall be completely performed and paid prior to the performance and payment of the remaining and secured portion of the obligations, and all performance and payments made by Trustor shall be considered to have been performed and paid on and applied first to the complete payment of the unsecured portion of the obligations;
32. (a) Subject to the extensions of time set forth in Paragraph 30, and subject to the further provisions of this Paragraph 32, failure or delay by Trustor to perform any term or provision respectively required to be performed under the Secured Obligations or th is Deed of Trust constitutes a default under this Deed of Trust;
(b) Beneficiary shall give written notice of default to Trustor, specifying the default complained of by the Beneficiary. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default;
(c) Any failures or delays by Beneficiary in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by Beneficiary in asserting any of its rights and remedies shall not deprive Beneficiary of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies;
(d) If an event of default occurs under the terms of this Deed of Trust, prior to exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor written notice of such default. If the default is reasonably capable of being cured within thirty (30) days, Trustor shall have such period to effect a cure prior to exercise of remedies by Beneficiary under this Deed of Trust. If the default
42 is such that it is not reasonably capable of being cured within thirty (30) days, and Trustor (i ) initiates corrective action within said period, and (ii) diligently and in good faith works to effect a cure as soon as reasonably possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default;
(e) If an event of default occurs under the terms of the Secured Obligations, prior to exercising any remedies hereunder or thereunder, Beneficiary shall give Trustor notice of such default. As is provided more specifically in the Secured Obligations, if the default is reasonably capable of being cured within thirty (30) days, Trustor shall have such period to effect a cure prior to exercise of remedies by the Beneficiary under the Secured Obligations, or this Deed of Trust. If the default is such that it is not reasonably capable of being cured within thirty (30) days, and Trustor (i) initiates corrective action within said period, and (ii) diligently and in good faith works to effect a cure as soon as reasonably possible, then Trustor shall have such additional time as is reasonably necessary to cure the default prior to exercise of any remedies by Beneficiary. In no event shall Beneficiary be precluded from exercising remedies if its security becomes or is about to become materially jeopardized by any failure to cure a default.
33. Deed of Trust is a senior encumbrance, and shall be recorded and remain in a senior priority position to any other liens, mortgages, or other encumbrances on Trustor’s simple fee interest in the Subject Property, except as may be subordinated to liens securing Construction Funds under the terms of the OPA, or as may otherwise by authorized in a written subordination agreement executed in the sole and absolute discretion of Beneficiary.
IN WITNESS WHEREOF, Trustor has executed this Deed of Trust as of the day and year first set forth above.
NOTARIZED SIGNATURE OF TRUSTOR TO BE ADDED
43 Exhibit A to Deed of Trust
Legal Description of Subject Properties
PARCEL 1: (APN 136-203-40):
THAT PORTION OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
THE NORTH 449.50 FEET OF THE SOUTH 62430 FEET OF THAT PORTION OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2.1 TOWNSHIP SOUTH, RANGE 11 WEST, IN THE
RANCHO LOS COYOTES, CITY DE -BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING EASTERLY OF THE EAST LINE OF TRACT NO. 2435, AS PER MAP RECORDED IN BOOK 111, PAGES 13 TO 16 INCLUSIVE OF SAID MISCELLANEOUS MAPS.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO, 89 -375668 OF OFFICIAL RECORDS.
ALSO EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED DECEMBER 26, 1997 AS INSTRUMENT NO. 97-664764 OF OFFICIAL RECORDS.
PARCEL 2: (APN'S: 136-211-57 AND 136-211-64):
THE SOUTH 175 FEET OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO. 89 -375668 OF OFFICIAL RECORDS.
44 EXHIBIT “E” - PSDA
OWNER PARTICIPATION AGREEMENT
[ATTACH BEHIND THIS PAGE]
45 EXHIBIT “F” - PSDA
RECIPROCAL MAINTENANCE AND EASEMENT AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO,
AND MAIL TAX STATEMENTS TO:
City of Buena Park
Attn: DIRECTOR OF COMMUNITY
DEVELOPMENT
6650 Beach Boulevard
Buena Park, CA 90622
Assessor’s Parcel Nos.: 136-203-40, 136-211-
64, 136-211-57
RECIPROCAL EASEMENT AND MAINTENANCE AGREEMENT
THIS RECIPROCAL EASEMENT AND MAINTENANCE AGREEMENT (" REA") is dated as of ______, 2026, and is entered into by and among the CITY OF BUENA PARK, a California municipal corporation ("City") and BUENA PARK BOARDWALK, LLC, an Arizona limited liability company ("Developer"), with reference to the following facts:
RECITALS
A. By way of that certain Agreement for the Purchase, Sale, and Development of Real Property dated July ___, 2026, (“Purchase Agreement”), Developer purchased from City that that certain real property located at 7711-7733 Beach Boulevard, Buena Park, California (Orange County Assessor Parcel Nos. 136-203-40, 136-211-64 and 136-211-57), as such real property is legally described in Exhibit “A” hereto (the “ Property”), for purposes of developing and operating a mixed -use entertainment attraction and commercial development (hereinafter the “Project”) that is specifically described in that certain Development Agreement No. DA 25-1 dated July ___, 2026 (and recorded in official county records as Instrument No. ________) (“Development Agreement”); and
B. As a material inducement for the Parties willingness to enter into the Purchase Agreement, and a condition of approval in for the Development Agreement , City and Developer (at times herein individually a “Party” and jointly the “Parties”) have the Parties have entered this REA for purposes of the following:
1. City reserving and/or Developer granting to City, on behalf of the general public, an access easement over and across that the public pedestrian walkway on the Property depicted in Exhibit “B” hereto (“City Path”) that is to be developed as part of the Project and, upon completion, will allow the general public to access Beach Boulevard to and from certain parcel of real property that is used, improved, and maintained by the City as a public parking lot
46 under a license agreement with Southern California Edison (“SCE License Agreement”), as such parcel is legally described in Exhibit “C” hereto (“City Lot”); and
2. City consenting to Developer’s use of the City Lot, on a non-exclusive basis and subject to the terms and conditions of the SCE License Agreement, as overflow parking for employees and patrons of the Project (“Developer Overflow Parking Rights”).
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which is expressly acknowledged, and intending to be legally bound, the Parties agree as follows:
1. Easements and License.
a. City Path Easement. Developer hereby grants to the City, for the use by City and the general public, a public access easement over and across a paved pedestrian walkway with a width of approximately 10 feet, to be located in proximity to and along the southern boundary of the Properties and developed as part of the Project, as such City Path is depicted in Exhibit “B” to this Agreement.
b. Developer Overflow Parking License . City hereby approves and consents to Developer, subject to the terms and conditions of the License Agreement, using the City Lot on a non-exclusive basis for purposes of overflow parking for employees and/or patrons of the Project.
Developer will take reasonable actions and cooperate in good faith with the City in responding to or remediating concerns associated with security, loitering, maintenance, trash, or repairing damages directly arising from Developer’s use of the City Lot hereunder. To the extent feasible, Developer will limit its use of the City Lot to employee parking , or to overflow guest parking when parking for the Project located on the Property is nearing or at capacity. In connection with the foregoing, Developer represents and acknowledges that it has reviewed the SCE License Agreement, including terms and conditions placing restricting City’s use and prohibiting formal assignment or transfer of rights thereunder. Developer’s rights to use and access the City Lot shall be not greater than that of the general public.
2. Rock and Brew Parking Signage. City shall, at City’s cost, install and maintain a sign for/on each of the 25 spaces indicating that only employees or patrons of the owner of the Rock and Brew Property may park in such spaces, and that any other vehicles parked may be towed. Such reserved spaced are excluded from the scope of this REA.
3. Improvements to Easement Areas . Developer and City agree that any improvements, changes, modifications or alterations to the Property or City Lot : (i) shall not unreasonably impair the free flow of vehicular or pedestrian ingress and egress over and across the Property between Beach Boulevard and the City Lot; and (ii) shall be subject to the prior written consent of the other Party, not to be unreasonably withheld , conditioned or delayed . City and Developer shall provide each other with thirty (30) days' advance written notice of any alterations or improvements covered by this section.
4. Maintenance and Repairs. Developer with respect to the Property and City Path, and City with respect to the City Lot, each agree to keep and maintain such areas in good condition
47 and repair , and shall promptly make any improvements thereto as may be required to satisfy obligations arising under this Agreement or comply with applicable local, state, or federal laws or regulations.
5. Property Taxes and Assessments. Developer as to the Property, and City as to the City Lot, shall each pay, or cause to be paid, directly to the appropriate governmental agencies, prior to delinquency, all real property taxes and other special taxes and assessments and/or charges, if any, including taxes, assessments or charges levied in lieu of property taxes, which may be levied or assessed..
6. Liability Insurance. Developer with respect to the Property (inclusive of the City Path) and use of the City lot by Developer’s employees and patrons , and City with respect to use of the City Lot by members of the general public , shall each purchase and maintain reasonable liability insurance (which in the case of the City may be a self -insurance pool) covering personal injury and damages to personal property and naming the other party as additional insured. Upon written request, Developer and City shall deliver to each other certificates of insurance or other reasonable evidence showing compliance with this Section. Each Party shall defend and indemnity the other from any third-party claims or actions relating to or arising from the acts or omissions of a Party in connection with this REA.
7. Term. This Agreement and all rights or privileges hereunder shall expire upon the expiration or earlier termination of the License Agreement, as the same may be extended from time to time by subsequent agreement between City and Southern California Edison. In the event the License Agreement expires or is terminated, City shall not oppose, hinder or impede Developer from obtain its own license agreement for purposes consistent herewith or permitted by applies laws, with or without the City’s active support or involvement.
8. Covenants Shall Run With the Land. All of the agreements, rights, obligations, covenants, and grants of easements contained in this agreement shall run with the Property (as defined in California Civil Code Sections 1460 and 1462) and shall be binding upon or inure to the benefit of (as the case may require) Developer and City, and their successors, assigns and successors-in-interest, for the entire term hereof . The rights granted herein are appurtenant and burden and benefit each parcel for the benefit of the other parcel(s). If City assigns the License Agreement (with the consent of SCE), City shall give a copy of this Agreement to the assignee and shall cause the assignee to agree in the assignment document to comply with this Agreement.
9. Termination and Amendment. This Agreement may not be terminated or amended without the prior written approval of Developer and City, with the City Manager hav ing the authority on behalf of the City to execute amendments and terminations, and give consents and approvals hereunder, provided they are in writing.
10. Enforcement. In the event of a default or breach in the performance of any of the obligations or agreements herein by City or Developer and such is not cured within 30 days from written notice by the non -defaulting party, the non-defaulting party shall have the right, but not the obligation, to cure such default, and the defaulting party shall reimburse the curing party, within thirty (30) days after written demand, for the costs of cure. In addition, in the event of any default,
48 subject to the applicable notice and cure period, the non-defaulting party may pursue any remedies or proceedings available to it at law or in equity against the defaulting party, including damages and injunctive relief.
11. Force Majeure. Each party shall be excused from performing any obligation or undertaking provided in this Agreement, except any obligation to pay any sums of money under the applicable provisions hereof, in the event and so long as the performance of any such obligation is prevented or delayed, retarded or hindered by act of God, fire, earthquake, floods, explosion, actions of the elements, war, invasion, terrorism, insurrection, riot, mob violence, sabotage; inability to procure or general shortage of labor, equipment, facilities, materials or supplies in the ordinary course on the open market; failure of normal transportation; strikes, lockouts, action of labor unions; condemnation, requisition; laws, orders of governmental or civil or military or naval authorities; the inability to obtain governmental approvals or permits despite the exercise of due diligence and best efforts by a party; or any other cause, whether similar or dissimilar to the foregoing, not within the reasonable control of such party.
12. Recording. This Agreement shall be recorded on the Property. Following expiration or termination of this Agreement, either party may request the other party execute a standard form release and reconveyance hereof.
13. Miscellaneous.
a. Notices. All notices, demands or other communications shall be in writing, and a copy thereof shall be sent by certified mail, return receipt requested, postage prepaid and addressed as follows:
City:
City of Buena Park
6650 Beach Boulevard
Buena Park, CA 90622-5009
Attn: City Manager
Developer:
Buena Park Boardwalk, LLC
9500 E Via de Ventura, Suite E100
Scottsdale, AZ 85256
Attn: Adi Knishinsky
Any party may change its address for notices by a written notice to the other parties given pursuant to this Section.
b. No Third -Party Beneficiaries. No person or entity shall have any enforceable rights under this Agreement other than the parties hereto and their respective successors, assigns and successors-in-interest.
49 c. No Waiver. No waiver of any default by any party shall be implied from any omission by any other party to take any action in respect of such default. No express waiver of any default shall affect any default or cover any period of time other than the default and period of time specified in such express waiver. One or more waivers of any default in the performance of any term, provision or covenant contained in this Agreement shall not be deemed a waiver of any subsequent default in the performance of the same term, p rovision or covenant or any other term, provision or covenant contained in this Agreement. The consent or approval by any party to or of any act or request of any other party requiring consent or approval shall not be deemed to waive or render unnecessary the consent or approval to or of any subsequent similar acts or requests.
d. Estoppel Certificates. Each party covenants that upon receipt of written request from another party, it shall, within thirty (30) days after receipt of such request, give to the requesting party or other person specified by the requesting party, an estoppel certificate stating:
(i) whether the party to whom the request has been directed knows of any default under this Agreement, and if there are known defaults, specifying the nature thereof (ii) whether to its knowledge this Agreement has been assigned, modified or amended in any way (and if it has, then stating the nature thereof); (iii) that to such party's knowledge, this Agreement, as of the date of the estoppel certificate, is in full force and effect; and (d) any other information relating to this Agreement as may be reasonably required by the requesting party.
e. Grants Subject to Matters of Record. The rights and privileges granted by this Agreement are subject to all covenants, conditions, restrictions, easements, rights -of-way, liens and encumbrances, and other matters of record as of the date of recordation of this Agreement.
f. Negation of Partnership. None of the terms or provisions hereof shall be deemed to create a partnership between Developer and City , nor shall it cause them to be considered joint venturers, or members of any joint enterprise, in the operation of the areas covered by this Agreement or otherwise.
g. Entire Agreement. This instrument contains the entire agreement of the parties as to the subject matter hereof.
h. Severability. Invalidation of any covenant, condition, or restriction or any other provision contained herein or the application thereof to any person or entity by judgment or court order shall in no way affect any of the other covenants, conditions, restrictions, or provisions hereof, or the application thereof to any other person or entity, and the same shall remain in full force and effect.
i. Attorneys' Fees. In the event any party shall commence any action against any other party relating to this Agreement or for the breach of any obligation contained herein, the prevailing party shall be entitled to recover from the losing party reasonable attorneys' fees, expenses, and court costs.
50 j. Time of Essence. Time is of the essence of every provision hereof in which time is a factor.
NOW THEREFORE, the Parties have caused execution of this REA by and through their authorized representatives below.
ATTACH NOTARIZED SIGNATURE PAGE
51 Exhibit “A” – Reciprocal Easement and Maintenance Agreement
LEGAL DESCRIPTION OF THE PROPERTY
PARCEL 1: (APN 136-203-40):
THAT PORTION OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
THE NORTH 449.50 FEET OF THE SOUTH 62430 FEET OF THAT PORTION OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2.1 TOWNSHIP SOUTH, RANGE 11 WEST, IN THE
RANCHO LOS COYOTES, CITY DE -BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING EASTERLY OF THE EAST LINE OF TRACT NO. 2435, AS PER MAP RECORDED IN BOOK 111, PAGES 13 TO 16 INCLUSIVE OF SAID MISCELLANEOUS MAPS.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO, 89 -375668 OF OFFICIAL RECORDS.
ALSO EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED DECEMBER 26, 1997 AS INSTRUMENT NO. 97-664764 OF OFFICIAL RECORDS.
PARCEL 2: (APN'S: 136-211-57 AND 136-211-64):
THE SOUTH 175 FEET OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO. 89 -375668 OF OFFICIAL RECORDS.
52 Exhibit “B” – Reciprocal Easement and Maintenance Agreement
DEPICTION OF CITY PATH ON PROPERTY
53 Exhibit “C” – Reciprocal Easement and Maintenance Agreement
DEPICTION OF CITY LOT
54 Exhibit “G” - PSDA
SLA COVENANT
DECLARATION OF SURPLUS LAND ACT COVENANTS
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO,
AND MAIL TAX STATEMENTS TO:
City of Buena Park
Attn: DIRECTOR OF COMMUNITY
DEVELOPMENT
6650 Beach Boulevard
Buena Park, CA 90622
Assessor’s Parcel Nos.: 136-203-40, 136-211-
57, 136-211-64
This Declaration of Surplus Land Act Covenants (“Declaration”) is entered into as of this ___ day of _____, 202 6, by and between the CITY OF BUENA PARK, a California municipal corporation (“City”), and Buena Park Boardwalk , LLC, an Arizona limited liability company, (“Developer”), with reference to the following facts:
RECITALS
A. City and Developer have entered into that certain Agreement for the Purchase, Sale and Development of Real Property dated ________ (“Purchase Agreement”), pursuant to which, and subject to the terms and conditions stated therein, City agreed to sell to Developer and Developer agreed to purchase from City that certain real property located at 7711-7733 Beach Boulevard, Buena Park, California (Orange County Assessor Parcel Nos. APN 136-203-40, 136- 211-64 and 136-211-57 and legally described in Exhibit “A” hereto, the “Property”).
B. In compliance with the California Surplus Lands Act (Cal. Gov’t (Gov’t Code § 54220 et seq., the “SLA”), and specifically Section 54233 thereof, Developer and City agree to the terms and conditions of this Declaration and direct it to be recorded on Property as a condition precedent to the Closing under the Purchase Agreement.
NOW THEREFORE, City and Developer (individually hereinafter at times a “Party” and jointly the “Parties”) agree as follows:
1. DEFINITIONS. All capitalized terms not defined herein shall have the meaning set forth in the Purchase Agreement, a copy of which is available for inspection and copying at the City’s offices located 6650 Beach Blvd., Second Floor, Buena Park, California 90621
2. RESTRICTIVE COVENANT. The Property is subject to a restrictive covenant that if ten (10) or more residential units are developed on the Property, not less than 15 percent of the total number of residential units developed on shall be sold or rented at affordable housing cost, as
55 defined in Section 50052.5 of the California Health and Safety Code, or affordable rent, as defined in Section 50053 of the California Health and Safety Code, to lower income households, as defined in Section 50079.5 of the California Health and Safety Code. Rental units shall remain affordable to and occupied by lower income households for a period of 55 years for rental housing and 45 years for ownership housing from the date of recordation of this Grant Deed. The initial occupants of all ownership units shall be lower income households, and the units shall be subject to an equity sharing agreement consistent with the provisions of paragraph (2) of subdivision (c) of Section 65915 of the California Government Code. These requirements shall be covenants or restrictions running with the land and shall be enforceable against any owner who violates a covenant or restriction and each successor -in-interest who continues the violation by any of the entities described in subdivisions (a) to (f), inclusive, of Secti on 54222.5 of the California Government Code.
3. TERM OF DECLARATION. This Declaration shall expire and terminate only upon: (1) the final order of a court of competent jurisdiction; or (2) a future changes or amendments to the SLA or California law that make or render this Declaration unenforceable.
4. MISCELLANEOUS
(a) Recording. This Declaration shall be recorded as a condition of and at the Closing of Escrow for Developer’s purchase of the Property from City and shall be recorded junior only to the grant deed by which Developer takes title except as subordination to construction financing is contemplated in the Agreement.
(b) Binding on Successors . This Declaration shall run with the land and be binding upon and shall inure to the benefit of the Parties and their successors and assigns for the term hereof.
(c) Amendments. This Declaration may be amended or modified only by a written instrument signed by both Parties and recorded in the Official Records of Orange County.
(d) No Waiver. Any waiver by a Party of any term or provision of this Declaration must be in writing. No waiver shall be implied from any delay or failure by a Party to take action on any breach or default hereunder or to pursue any remedy allowed under this Declaration or applicable law. No failure or delay by a Party at any time to require strict performance by the other Party of any provision of the Agreement or this Declaration or to exercise any election contained herein or any right, power or remedy hereunder shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof or a relinquishment for the future of such election.
(e) Notices. All notices or other communications required or permitted between the Parties hereunder shall be in writing, and shall be (i) personally delivered, (ii) sent by United States registered or certified mail, postage prepaid, return receipt requested or (iii) sent by nationally recognized overnight courier service (e.g., Federal Express or United Parcel Service), addressed to the Party to whom the notice is given at the addresses provided below, subject to the right of any Party to designate a different complete address for itself by notice similarly given. Any notice
56 so given by registered or certified United States mail shall be deemed to have been given on the third business day after the same is deposited in the United States mail. Any notice not so given by registered or certified mail, such as notices delivered by personal delivery or courier service, shall be deemed given upon receipt, rejection or refusal of the same by the Party to whom the notice is given. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of the notice or other communication sent.
To City: City of Buena Park
Buena Park City Hall
ATTN: City Manager
6650 Beach Boulevard
Buena Park CA 90622
To Developer: Buena Park Boardwalk, LLC
9500 E Via de Ventura, Suite E100
Scottsdale, AZ 85256
Attn: Adi Knishinsky
(f) Action by City. Except as may be otherwise specifically provided herein or limited by law , whenever any approval, notice, direction, consent or request by City is required or permitted under this Declaration, such action shall be in writing, and such action may be given, made or taken by the City Manager or by any person who shall have been designated by the City Manager, without further approval by the City Council.
(g) Governing Law; Venue. This Declaration shall be construed in accordance with the laws of the State of California without regard to principles of conflicts of law. Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of Orange County, California.
(h) Attorneys’ Fees and Costs . If any legal or administrative action is brought to interpret or enforce the terms of this Declaration, the prevailing party shall be entitled to recover all reasonable attorneys’ fees and costs incurred in such action.
(i) Severability. If any provision of this Declaration is held invalid, illegal, or unenforceable by a court of competent jurisdiction, the validity, legality, and enforceability of the remaining provisions shall not be affected or impaired thereby.
IN WITNESS WHEREOF, the Parties have executed this Agreement and Declaration of Restrictive Covenants as of the date first written above.
ATTACH NOTARIZED SIGNATURE PAGE
57 Exhibit A – SLA Covenant
Legal Description of Property
PARCEL 1: (APN 136-203-40):
THAT PORTION OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
THE NORTH 449.50 FEET OF THE SOUTH 62430 FEET OF THAT PORTION OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2.1 TOWNSHIP SOUTH, RANGE 11 WEST, IN THE
RANCHO LOS COYOTES, CITY DE -BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING EASTERLY OF THE EAST LINE OF TRACT NO. 2435, AS PER MAP RECORDED IN BOOK 111, PAGES 13 TO 16 INCLUSIVE OF SAID MISCELLANEOUS MAPS.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO, 89 -375668 OF OFFICIAL RECORDS.
ALSO EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED DECEMBER 26, 1997 AS INSTRUMENT NO. 97-664764 OF OFFICIAL RECORDS.
PARCEL 2: (APN'S: 136-211-57 AND 136-211-64):
THE SOUTH 175 FEET OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO. 89 -375668 OF OFFICIAL RECORDS.
1 EXHIBIT “C” - PSA
OWNER PARTICIPATION AGREEMENT
RECORDING REQUESTED BY
AND WHEN RECORDED RETURN TO,
AND MAIL TAX STATEMENTS TO:
City of Buena Park
Attn: DIRECTOR OF COMMUNITY
DEVELOPMENT
6650 Beach Boulevard
Buena Park, CA 90622
Assessor’s Parcel No.: 136-203-40, 136-211-
64, 136-211-57
This Owner Participation Agreement (“Agreement”) is entered into as of this ___ day of ________, 202 __, by and between the CITY OF BUENA PARK, a California municipal corporation (“City”), and BUENA PARK BOARDWALK, LLC, an Arizona limited liability company (“Developer”), with reference to the following facts:
RECITALS
A. By way of that certain Agreement for the Purchase, Sale, and Development of Real Property dated July ___, 2026, (“Purchase Agreement”), Developer purchased from City that that certain real property located at 7711-7733 Beach Boulevard , Buena Park, California (Orange County Assessor Parcel Nos. 136-203-40, 136-211-64 and 136-244-57), as such real property is legally described in Exhibit “A” hereto (the “Property”), for purposes of developing and operating a mixed-use entertainment attraction and commercial development (hereinafter the “Project”) that is specifically described in that certain Development Agreement No. DA 25-1 dated July ___, 2026 (and recorded in official county records as Instrument No. ___ _____) (“Development Agreement”); and
B. As a material inducement for the Parties willingness to enter into the Purchase Agreement and as a condition to the Closing thereunder , City and Developer (at times herein individually a “Party” and jointly the “Parties”) have entered this Agreement establishing the terms and conditions by which Develop will develop and operate the Project and the Property, and by which City will support and cooperate in such efforts in consideration for Developer operating the Project in a manner that provides the community and pubic benefits specified herein to members of the general public.
2 AGREEMENT
NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which is expressly acknowledged, and intending to be legally bound, City and Developer (individually hereinafter at times a “Party” and jointly the “Parties”) agree as follows:
1. RECITALS. The foregoing recitals are true, correct, and incorporated as substantive findings and a part of this Agreement.
2. DEFINITIONS. The capitalized terms and phrases used throughout this Agreement shall have the following meaning:
“Agreement” means and refers to this Owner Participation Agreement.
“CEQA Determination” means and refers to the City Council’s determination that the Project is exempt from further environmental review pursuant to Public Resources Code section 21083.3 and CEQA Guidelines Section 15183, as set forth fully in DA25-1, Ordinance No.______.
“City” means and refers to the City of Buena Park, California.
“City Council” means and refers to the City Council for the City.
“Closing of Escrow” shall have the same meaning as the Closing under the Purchase Agreement.
“City Residents” means and refers to persons whose principal address is located in one of the following zip codes: 90620 or 90621
“Community Benefits” is defined in Section 5.J.
“Certificate of Occupancy” means and issuance of a Certificate of Occupancy for Building Permits issued by the City having been accepted as finalized and complete by City, thereby signifying that all permitted work comprising the Project has been completed in accordance with the Plans and Specifications.
“Construction Funds” is defined in Section 4.L(1).
“Deed of Trust” is defined in Section 4.L(1).
“Development Agreement” is defined in Rectal A above.
“Developer” means and refers to Buena Park Boardwalk, LLC.
“ECSP” means and refers to the City of Buena Park Entertainment Corridor Specific Plan.
3 “Effective Date” means the date on which this Agreement is recorded on the Property as a condition precedent to the Closing of Escrow under the Purchase Agreement.
“Force Majeure” means any of the following arising after the Effective Date and to the extent resulting in a demonstrable and material impact on a Party’s performance of this Agreement:
acts of God; unusually severe weather; enemy action; civil disturbance s; wars; terrorist acts; insurrection; riots; fire; floods; earthquakes; casualties; a local, state, or federal declaration of emergency based on an epidemic or pandemic including any quarantine or other health -related orders, directives, regulations, laws or other requirements implemented in response to such epidemic or pandemic; strikes, walkouts lockouts, and other labor difficulties; regional and enduring breakdown in communication facilities, electrical service, or wireless service; failure or inability to secure materials or labor by reason of priority or similar regulations or order of any governmental or regulatory body; or mediati on, arbitration, litigation, or other administrative or judicial proceeding involving the Existing Standards or any of the Project Entitlements.
“Indemnitees” is defined in Section 7.
“Lender” is defined in Section 4.L(1).
“Plans and Specifications” means Developer’s construction-ready plans and specifications for the Project that are approved in the final building permits issued by the City that authorize Developer to proceed with construction of the Project.
“Primary Attractions” mean and refer jointly to the butterfly atrium and aquarium components of the Project, together with associated amenities, landscaping, and other on and off- site improvements necessary to operate the Primary Attractions for business to the general public.
"Project" means and refers to the mixed-use entertainment attraction and commercial development comprised of the two Primary Attractions, together with complementary retail, commercial, and food & beverage establishments, and associated amenities, landscaping, and other on and off-site improvements comprising the development approved in the Project Entitlements and described in the Plans and Specifications.
“Project Entitlements” means and refers cumulatively to the Development Agreement, the Variance, and the CEQA Determination.
“Purchase Agreement” is defined in Recital A, above, a copy of which is on file in the Office of the Buena Park City Clerk, located at 6650 Beach Boulevard, Buena Park, California 90622.
“Purchase Note” and “Purchase Note Deed of Trust” are defined in the Purchase Agreement and dated contemporaneously with this Agreement, with the Purchase Note Deed of Trust being recorded on the Property contemporaneous with this Agreement as a condition of the Closing of Escrow.
4 “Schedule of Performance” is list of milestones and associated deadlines for Developer’s development, construction and opening of the Project that is set forth in Exhibit “ B” to th is Agreement.
“Special Events” is defined in Section 5.D.
“Tenant” is defined in Section 5.F..
“Term” is defined in Section 3.
“Variance” means and refers that Developer’s application under Section 19.132.010 of the Buena Park Zoning Code (Title 19 of the Buena Park Municipal Code) that was recommended for approval by the Buena Park Planning Commission on May 27, 2026, by way of PC Resolution No. ____. A true and correct copy of the Variance is on file in the Office of the Buena Park City Clerk, located at 6650 Beach Boulevard, Buena Park, California 90622.
3. TERM. The term of this Agreement shall commence on the Effective Date and shall continue in full force for a period of twenty (20) years from the date a Certificate of Occupancy is issued for the Project (the “Term”). Following expiration of the Term and upon written request from Developer, City will execute a standard form release and reconveyance, in a form approved by the City Attorney, to provide recorded notice that this Agreement has expired.
4. COVENANT TO DEVELOP THE PROJECT
A. Scope of Development. Commencing on the Effective Date and continuing without interruption until a Certificate of Occupancy is issued for the Project, Developer shall develop the Project on the Property in accordance with the Project Entitlements, Plans and Specifications, Schedule of Performance, applicable terms and conditions of this Agreement, and requirements of any and all applicable federal, state and local laws, rules and regulations. Developer’s covenant to develop the Project shall expire only upon issuance of a Certificate of Occupancy.
B. Quality and Character of Project. Developer shall construct the Project (including all structures, improvements, landscaping, hardscape, signage, and site amenities) to a standard that is consistent with a tourist attraction and entertainment destination, using commercially standard workmanship, and finishes appropriate to a regionally significant visitor-serving facility offering similar services or uses. All exterior and interior materials, finishes, colors, and textures used in the Project shall be of a quality consistent with or super ior to those used in comparable entertainment destinations offering similar services or uses. Developer shall use durable finish materials including, but not limited to, masonry, stone, architectural concrete, painted or textured stucco, wood, metal, or gl ass where visible from public areas, and to the extent commercially reasonable in the Developer’s opinion, shall avoid the use of materials that are prone to rapid deterioration, fading, or visual degradation under normal Southern California environmental conditions. Consistent with the stated goals of the ECSP, which envisions the Property as a premier tourist and entertainment destination, the Project will be constructed in a manner that complements and enhances the character of surrounding properties wit hin the entertainment corridor, with the overall quality of design, materials, and public-facing finishes being consistent 5 with that of similar entertainment destinations of regional and national significance. Provided Developer completes the Project in accordance with the Plans and Specifications, Developer shall be deemed to be in compliance with this paragraph.
C. City’s Right to Review Plans and Specifications. In constructing the Project, Developer will comply in all material respects with the Plans and Specifications. The Planning Director shall have the right to review all Plans and Specifications for the Project, including any material revisions to previously approved Plans and Specifications, prior to their submission to the City’s building department to ensure that the Project is constructed in accordance with the Project Entitlements and other applicable provisions of this Agreement. For purposes of this paragraph, a “material change” shall mean and include any interior or exterior change in design, amenities, finishes, or features that are or will result in physical changes that will be visible to the public.
D. Master Developer Role . Developer shall serve as the master developer for the Project and be responsible for overseeing planning, entitlement, construction, leasing or licensing, and overall coordination of development activities for the Project, including but not limited to coordinating the activities of the general contractor, any other contractors or subcontractors, professional service providers, building officials and utility providers, and others involved in development of or with regulatory authority over the Project.
E. Cost of Development . All costs for or arising from engineering, planning, designing, construction, and/or development of the Project shall be the responsibility of Developer and paid by Developer from Construction Funds.
F. Permits. Before commencing any construction activities on the Property, Developer shall secure or cause to be secured any and all permits that may be required by City , acting in its governmental or regulatory capacity, or other governmental agency having jurisdiction over such construction activities, and pay all costs or fees associated with such permits.
G. Schedule of Performance . Developer covenants and agrees that, commencing on the Effective Date and continuing until a Certificate of Occupancy is issued for the Project, Developer will promptly commence and pursue diligently without interruption construction of the Project no later than the timelines established in the Schedule of Performance, subject to Permitted Delays (defined in Section 12.D) and delays directly caused by acts or omissions of the City .
Developer, in its discretion, may complete construction of the Project in different phases provided doing so is consistent the Project Entitlements and the deadline for substantial completion of the Project specified in the Schedule of Performance. Completion of construction shall be signified by a City’s issuance of a final certificate of occupancy for all buildings or improvements that are part of the Project, plus the City having accepted as final all grading and building permits issued for the Project (thereby signifying that all permitted work comprising the Project has been completed in accordance with this Agreement) (“Certificate of Occupancy”).
H. Extensions of Schedule . The City Manager , in his/her good faith discretion, may grant extension(s) of the Schedule of Performance not exceeding six (6) months in the aggregate, with any longer extensions of time requiring the approval of the City Council following a duly noticed public hearing. Developer may submit a request for an extension of time before expiration 6 of the original deadline, and such extension may be granted by the City Manager or City Council, as applicable, in the exercise of reasonable discretion based upon the following considerations: (i) Developer has made reasonable and good faith progress on completing the Project in the time specified by Schedule of Performance; (ii) the original deadline is found to create an undue hardship despite Developer’s reasonable and good faith efforts; (iii) Developer has otherwise complied with and is not then in violation or breach of this Agreement or Project Entitlements; and (iv) the extension would not be materially detrimental to the public health, safety, and welfare.
The City Council’s consideration and approval or denial of any extension request may be made during any special or regular public meeting of the City Council.
I. Construction Progress Reports . Between the Effective Date and issuance of a Certificate of Occupancy, Developer shall provide City with quarterly progress reports, or more frequent updates if City reasonably requires, regarding the status of the construction of the Project.
In the event development progress is behind the milestones established in the Schedule of Performance, Developer will provide an explanation of the cause(s) in progress reports to City together with the commercially reasonable efforts Developer wi ll be taking to ensure future construction activities progress as scheduled and to avoid additional or compounding delays.
J. City’s Right of Access to Project Site . For the purposes of assuring compliance with this Agreement, representatives of City shall have the reasonable right of access to the Property. To ensure safety, the City Representative will provide at least twenty-four (24) hours advanced notice to Developer. This right of access described in this paragraph shall expire upon the issuance of the Certificate of Occupancy, and is in addition to any rights or remedies City may possess as a governmental or law enforcement agency which shall unaffected by this Agreement.
K. Pre-Opening Obligations. Between the Effective Date and receipt of a Certificate of Occupancy, Developer will take commercially reasonable actions to prepare for the opening and operation of the Project by the deadline established in the Schedule of Performance. Such preopening actions may include, but are not limited to:
1) Hiring, training, and employing all staff and personnel needed to operate and manage the Project;
2) Acquiring all licenses, permits and approvals required by any local, state, or federal law, ordinance, or regulation to operate the Project;
3) Ordering, purchasing, or otherwise acquiring all materials, equipment, or supplies necessary and appropriate to operate the Project;
4) Developing and implement pre -opening advertising, marketing, public relations and promotional programs and supporting materials; and/or
5) Planning and coordinating the dedication or opening ceremonies for the Project, including allowing reasonable participation by the City in such ceremonies if requested.
7 L. Mortgages and Liens Prior to Certificate of Occupancy . Between the Effective Date and the issuance of a Certificate of Occupancy , the following terms and conditions shall apply:
1) No Encumbrance Except for Development Purposes. Mortgages and deeds of trust, or any other reasonable method of security (“Deed of Trust”) for funds used to construct the Project (“Construction Funds”) are permitted to be placed upon Developer’s fee interest in the Property and the City hereby acknowledges and consents to the right of the beneficiary or holder of said Deed of Trust ("Lender"). Developer covenants that Developer will not pledge Property as security for any indebtedness except for Construction Funds.
2) Lender’s Rights in Event of Developer’s Default of Deed of Trust.
a) Lender Option to Construct Improvements. Should the Developer default on the construction covenants in this Agreement prior to City’s issuance of a Certificate of Occupancy, Lender shall have the right, but not the obligation, to construct or complete the Project or to guarantee such construction or completion . Nothing in this Agreement shall be deemed to construe, permit, or authorize Lender to devote the Property or any part thereof to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement. Should Lender desire to exercise its option to construct or complete the Project under this paragraph, Lender must give notice to City within ninety (90) days of the City providing Lender notice of Developer’s default and must execute a written assumption of this Agreement and the Project Entitlements.
b) Notice of Default to Lender; Lender’s Right to Cure. If City delivers any notice or demand to Developer with respect to any breach or default of this Agreement prior to a Certificate of Occupancy , City shall, at the same time, deliver to each Lender who has requested in writing said notices from the City, a copy of such notice or demand. Each such Lender shall (insofar as the rights of City are concerned) have the right, at its option after the receipt of the notice or Developer’s cure period, if any, to cure or remedy any such default if the right to cure is provided under the terms of the Deed of Trust, including the option to complete the Project. The Lender may notify the City of its intent to complete the Project within ninety (90) days of Lender’s receipt of City’s notice. The time for a Lender to cure shall be extended, if the Lender has undertaken steps to cure, in which case such time will be extended for as long as Lender reasonably needs, providing the Lender is acting diligently. Nothing contained in this Agreement shall be deemed to permit or authorize such Lender to undertake or continue the construction or completion of the Project (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed Developer's remaining obligations to City by written agreement.
3) City’s Rights in Event of Developer’s Default of Lender Deed of Trust.
a) Option to Purchase Debt . If Lender does not timely exercise its option to construct the Project, as detailed hereinabove, City may purchase the Deed of Trust from the Lender in the amount of the unpaid debt at any time prior to any auction or foreclosure sale, or any final order in bankruptcy.
8 b) Option to Cure Default . In the event of an uncured default by Developer of any Deed of Trust, and Lender has not timely exercised its option to construct the Project, as detailed above, City may cure the default of the Deed of Trust prior to completion of any foreclosure or bankruptcy proceedings. In such event, City shall be entitled to reimbursement from Developer of all costs and expenses incurred by City in curing the default. City shall also be entitled to a lien upon the Property to the extent of such costs and disbursements. Any such lien shall be subject to mortgages, deeds of trust or other security instruments executed in accordance with this Agreement.
c) Option to Purchase Property. If ownership of the Property has been vested in Lender, City may purchase the Property from the Lender upon payment of an amount equal to the greater of the appraised “as-is” value of the Property, as determined by an independent appraiser mutually selected by City and Lender, or the sum of the following:
i. Unpaid debt secured by the Deed of Trust at the time title became vested in the Lender (less all appropriate credits, including those resulting from collection by Lender and application of rentals and income received during foreclosure proceedings).
ii. Reasonable and documented expenses with respect to
foreclosure.
iii. The net reasonable and documented expenses, if any (exclusive of overhead), incurred by the Lender as a direct result ownership, operation or management of the Property during its period of ownership.
iv. The cost or value, whichever is less, of any City approved improvements made by such Lender.
4) Rights of City to Satisfy Other Liens. After Developer has had reasonable time to challenge, cure or satisfy any defaulted liens or encumbrances on the Property, City shall have the right to satisfy any such liens or encumbrances, provided however, that nothing in this Agreement shall require Developer to pay or make provision for the payment of any tax, assessment, lien or charge as long as the Developer shall in good faith contest the validity or amount thereof, and provided such delay in payment shall not subject the Property, or part thereof, to forfeiture or sale.
M. Prevailing Wage. The Parties intend and agree that, except in connection with the public improvements described in Section 6.A(2), construction of the Project will be paid for exclusively from the private funds of Developer (i.e. the Construction Funds). Notwithstanding the foregoing, to the extent required by law as may be determined in a final decision of the Department of Industrial Relations, or if the DIR’s decision is challenged in final court judgment, Developer shall be responsible for compliance with and carrying out the provisions of California Labor Code Section 1770 et seq. and all regulations adopted pursuant thereto (referred to herein as, “Prevailing Wage Laws”). Except to the extent prevailing wage compliance is mandated by City contrary to the Parties’ agreement above, Developer hereby agrees to, unconditionally 9 indemnify, reimburse, defend, protect and hold harmless City and its elective and appointive boards, commissions, officers, agents, attorneys, consultants and employees, and all of their respective successors and assigns, from and against any and all claims, demands, suits and actions at law or in equity, and losses, liabilities, expenses, penalties, fines, orders, judgments, injunctive or other relief, and costs and damages of every kind, nature and description (including but not limited to attorneys’ fee s and court costs; with counsel reasonably acceptable to City), and administrative, enforcement or judicial proceedings, whether known or unknown, and which directly or indirectly, in whole or in part, are caused by, arise from, or relate to, or are allege d to be caused by, arise from, or relate to, the payment or requirement of payment of prevailing wages in the construction of the Project, the failure to comply with any state or federal labor laws, regulations or standards in connection with the Project, including but not limited to California Labor Code Section 1770 et seq. and the Prevailing Wage Laws, whether or not any insurance policies shall have been determined to be applicable to any such claims, demands, suits, actions, losses, liabilities, expenses, penalties, fines, orders, judgments, injunctive or other relief, c osts, damages, or administrative, enforcement or judicial proceedings.
N. Release of Construction Covenants; Certificate of Occupancy. The development, construction, and related covenants and commitments in this Section 4 shall expire upon issuance of the Certificate of Occupancy Certificate for the Project. Upon the expiration or termination of the terms of this Section 4, and the request of Developer, City will execute and deliver to Developer, in recordable form, an instrument confirming that said construction covenants have been duly performed and expired; provided that the remaining terms and conditions of this Agreement shall remain in full force and effect for the Term hereof.
5. COVENANT TO OPERATE AND MAINTAIN THE PROJECT
A. Use, Operation and Maintenance of the Property. From and after the issuance of a Certificate of Occupancy and for the remaining Term , Developer covenants and agrees to own, use, operate, manage, and maintain the Project and Property in accordance with the applicable terms and conditions of this Agreement (exclusive of any construction covenants that have been previously released under Section 4).
B. Project Name. T he official name of the overall Project (for signage, marketing, ticketing, advertising, and all other material purposes) shall include or refer to “Buena Park” in some form or fashion as may reasonably be acceptable to the City Council, such as for example, “Buena Park Boardwalk,” but the individual attractions shall not be required to include or reference “Buena Park.”
C. Permitted Use. Developer shall restrict and dedicate use of the Property only for the Project and any approved Special Events, except as modifications or changes to the Project are permitted by the Project Entitlements; provided that the primary theme, nature and scop e of the Primary Attractions shall not be changed during the Term without an amendment to the Development Agreement. The allowable uses, as well as the density and intensity of such uses, the maximum height and size of proposed buildings, and other terms and conditions applicable to the Property are those set forth in the Project Entitlements, subject to the added covenants, terms and conditions of this Agreement.
10 D. Special Events. The Parties anticipate the Project will also host a variety of short - term (less than 90 days) entertainment, recreational, educational, or community events or programs, and other temporary special events or uses designed to attract local and regional audiences and to contribute to the Project's status as a destination for entertainment (“Special Events”). Such Special Events shall be permitted on a limited basis and subject to: (1) compliance with generally applicable provisions of the Buena Park Municipal Code, Buena Park Zoning Code, and other applicable laws; (2) necessary permits or approvals from the City or other agencies with jurisdiction; (3) compliance with all safety, security, and regulatory requirements; and (4) Ci ty’s reasonable discretion regarding event frequency and scheduling.
E. Operating Covenant . With the exception of a ny Permitted Closure, Developer shall at all times continuously operate the Project with operating hours being not less than seven hours per day and four days per week. Developer acknowledges and agrees that such covenant of continuous operation is a material inducement to City entering into this Agreement and that City would not enter into this Agreement without such inducement. For purposes of the foregoing, “Permitted Closure” means and refers to: (a) in the case of a Primary Attraction, the period of time reasonably necessary to complete upgrades, repairs, or improvements to the Primary Attraction, provided that the permitted closure shall only impact those portions of a Primary Attraction rendered inoperable, inaccessible or unsafe as a necessary result of the work, and provided that the duration of the permitted closure shall be agreed upon by the Parties as a condition to the City’s issuance of a building permit for t he work; or (b) in the case of any Tenant, on the same grounds as a Primary Attraction (above), or for a period of not more than six (6) months to commence operation of a new Tenant in place of prior Tenant that vacated the space for any reason; (c) weather related closures; (d) Force Majeure; (e) any closure due to a casualty; or ( f) any holiday closures.
F. Nature of Project Tenants . In addition to the Primary Attractions, the Project includes several tenant spaces to be occupied by third-party vendors or retailers as depicted on the Plans and Specifications (“Tenants”). The nature of Tenant’s land use and business operations must be compatible with the entertainment and family-friendly nature of the Primary Attractions, consistent with the ECSP and applicable laws, and shall not include any of the following: tobacco retailers as defined in Chapter 5.60 of the Buena Park Municipal Code, Nitrous -oxide or Kratom as defined in Chapters 8.54 and 8.58 respectively of the Buena Park Municipal Code, and adult- oriented or sexually explicit businesses or activities such as described in Chapter 5.44 of the Buena Park Municipal Code. Developer will be responsible for taking reasonable action(s) to ensue Tenants’ use and occupancy of the Project is consistent with this Agreement and applicable laws.
G. Maintenance Standards . Developer shall maintain the Property, Project, all structures, improvements, landscaping, hardscape, and site amenities in a clean, safe, and well - maintained condition consistent with the standard of a tourist and entertainment facility.
Maintenance obligations shall include, without limitation: All building exteriors, facades, roofing, and structural elements shall be maintained free from visible deterioration, peeling paint, cracking finishes, damaged cladding, rust, or other conditions inconsistent wi th the standard described in the foregoing, subject to standard wear and tear; all signs and lighting fixtures shall be maintained in good working order and consistent with the approved sign program; inoperable or visibly 11 damaged signage shall be repaired or replaced as soon as practicable following the discovery or notice; all landscaping shall be maintained in a healthy, well-irrigated, and aesthetically pleasing condition, subject to applicable weather conditions which are outside the control of Developer; all hardscape, paving, walkways, and enhanced paving features shall be kept in good repair and free of excessive cracking, fading, or deterioration that is inconsistent with the standard maintained generally by properties located within the ECSP , the California Building Code , or International Property Maintenance Code (IPMC) , subject to standard wear and tear; all publicly -accessible interior areas, including themed environments, finishes, fixtures, and furnishings, shall be maintained at a quality level consistent with a quality n entertainment attraction, subject to standard wear and tear.
H. Operational and Management Responsibilities. Developer shall, at its sole cost and expense, exercise prudent, commercially reasonable good faith in managing and operating the Project, including by performing or causing to be performed all services, tasks, functions, or other actions that are reasonably necessary to maintain and operate the Project to a standard of quality that comparable to similar entertainment attractions. Without limiting the generality of the foregoing, and by way of example, Developer shall perform or cause to be performed the following:
1) Manage, operate, and use the Project, Property, and any improvements, property, equipment or assets ancillary thereto in a manner that will ensure the Project is maintained and operated in the condition and manner required by this Agreement;
2) Coordinate, establish and maintain Special Events at the Property, together with calendars and schedules for such Special Events;
3) Conduct advertising, licensing, promotional activities, marketing, and public relations, with a view toward maximizing the visibility and reputation of the Project as an entertainment destination;
4) Provide or cause to be provided the sale of food, beverages, souvenirs, novelties, and special services or programs;
5) Identify, select, employ, train and supervise all staff or personnel, or otherwise contract for all services or work necessary to comply with the management, operation, and maintenance obligations of this Agreement;
6) Implement policies and procedures reasonably necessary to keep the Project in good order and condition, and perform such maintenance or repairs the Project (including all furniture, fixtures, equipment, parking lots, landscaped areas and all other properties and assets that are part of the Project) as may be needed to keep the Project in good operating order and professional condition at all times;
7) Maintain and operate a security force (e.g., through subcontracts or otherwise) to safeguard the Project and users of the Project; and consult, advise and take other 12 appropriate actions with respect to the implementation and operation of a computerized security system for the Project;
8) Staff and operate a full -time ticket office at the Project and develop and implement plans and policies for ticket services systems;
9) Oversee and manage parking areas and vehicular circulation to: (a) restrict parking spaces provided by the Project for use employees or patrons of the Project; (b) prevent queuing on public rights -of-ways and negative traffic or parking impacts to adjacent properties; (c) and prevent loitering, littering, or other nuisance-like activities; and
10) Comply with all conditions of approval in the Project Entitlements.
I. General Manager. Developer will provide written notice to City of the general manager responsible for day-to-day operation and management of the Project, and who will serve as the City’s primary point of contact for immediate or emergency operational needs or concerns of City or members of the public. The identify of the general manager may be changed in the discretion of Developer and notice to City.
J. Community Benefits . Consistent with the goals, objectives, and visions of the ECSP, the City desires for the Project to be operated and managed in a manner that maximizes entertainment, recreational, educational, employment, and similar opportunities for City Residents and members of the community. For and in consideration for the City’s cooperation and assistance described in Section 6, Developer shall operate and manage the Project during the Term in a manner that complies with or provides the following public benefits to the community (cumulatively the “Community Benefits”):
1) Local Source Hiring Preference . Developer will use commercially reasonable efforts to hire qualified employees that are City Residents, to the extent consistent with the law and the demands of Developer’s business. In furtherance of the foregoing, Developer agrees to focus advertising for new employment opportunities associated with the Project to City Residents prior to advertising to the broader public for: (a) at least ten (10) days for the initial hiring of employees upon the opening of the Project; and (b) for at least (3) days for any new or vacant employment opportunities arising from time to time after the opening. Developer agrees to encourage Tenants of the Project to comply with the provisions of this subsection. This subsection does not apply positions requiring unique or specialized training or certifications, or to circumstances where delays associated with compliance would create a hardship or be detrimental to Project operations.
2) Local Vender Preference. Developer will make reasonable efforts, in good faith, legal, and a nondiscriminatory manner, to use local vendors, suppliers, or contractors where possible; and Developer agrees to encourage Tenants of the Project to comply with the foregoing.
So long as Developer makes the reasonable efforts required by this subsection Developer shall not be deemed to be in violation hereof in the event local vendors, suppliers or contractors are not used.
13 3) Cooperation With Public Safey. Developer will maintain a communicative and cooperative relationship with the Buena Park Police Department (“BPPD”) and Orange County Fire Authority (“OCFA”), including but not limited to periodic meetings to review operational concerns, security, cooperation in investigations, and communication to the BPPD of suspicious activities on or in the immediate vicinity of the Project. Developer will provide BPPD with (i ) an immediate automatic or electronic notification alert to an unauthorized breach of security or an alarm or system failure at the Project; (ii) access to the real-time camera footage in case of an emergency; (iii) recordings of the security camera surveillance tapes for a period not to exceed thirty (30) days within twenty-four (24) hours of a written request; and (iv) the name and phone number of a staff person to notify of suspicious activity during or after operating hours.
4) Community Outreach and Education Programs. Developer will establish and maintain community outreach and mentorship programs with local high school students in areas such as leadership, mentorship, and educational initiatives, and admission scholarships to underprivileged children through its proposed 501c3 non -profit foundation. Additionally, Developer will endeavor to offer youth programing through school field trips, summer camps, and attraction programming, and as is commercially reasonable, education assistance programming (e.g., worker certification assistance), school field trips programs, and internship opportunities with local public schools.
5) Resident and Employee Discounts . From time to time, and as may be financially practicable in the exercise of reasonable business practices, Developer will offer discounted or priority ticketing or programs to City Residents.
6) Conference Room Facilities and Event Space . Subject to availability and reasonable advanced notice, Developer will allow City to utilize conference room facilities included in the Project for governmental purposes once per calendar quarter. In addition, from time to time and as deemed appropriate by Developer, Developer will cooperate in good faith with City to facilitate community or City-sponsored or affiliated events in exterior plaza areas of the Project.
7) Donated Tickets. Developer will provide donations of tickets and annual passes, at Developer’s discretion, to neighborhood organizations, community centers, child -care centers, and other non-profits foundation programming for use with fundraisers.
8) Sensory Programming. Developer will make reasonable good faith efforts to provide programming, certifications, and staff training to assist guests with autism and sensory sensitivity.
9) Environmental Consciousness. Developer will act as a community steward regarding environmental conservation and sustainability, including by managing and operating the Project in a manner that meets or exceeds applicable recycling, waste reduction, or waste diversion requirements of applicable local and state laws, and participation, where commercially reasonable, in community recycling, beautification, and environmental clean-up programs.
10) Good Neighbor Policies. Developer will develop, operate, and maintain the 14 Project in a manner that is consistent with the lighting, noise, dust, odors, construction hours, traffic and parking, green space, visual features, and other amenities and features detailed in the Project Entitlements that were/are intended to benefit or minimize impacts to nearby properties.
Developer will adopt and implement appropriate polic ies and procedures for receiving, processing, and resolving complaints or concerns from members of the community.
11) Educational Programing and Exhibits . Developer will incorporate and maintain educational programs, information, exhibits, displays, and materials as part of the Primary Attractions in order to foster knowledge and appreciation for nature among youth and the broader public.
6. CITY COOPERATION AND ASSISTANCE
A. City Reimbursements. In consideration and reimbursement for Developer's operation of the Project and provision of the Community Benefits to the public City agrees to pay to Developer an amount not to exceed Fifteen Million Dollars ($15,000,000.00) during the Term hereof as follows (“City Reimbursements”):
1) An amount not to exceed Ten Million Dollars ($10,000,000.00) in reimbursement for: (a) the purchase and delivery of movable equipment, furniture, personal property, animal species, and similar items of free standing or movable personal property (excluding any furniture, equipment or fixtures intended to bolted or affixed to real property) that are necessary for operation of the Project in the manner required herein; (b) the offsite fabrication and delivery of specialized materials or structures needed for the Project by a contractor from an offsite facility that is open to the general public; and (c) services and costs associated Project operations such as marketing, advertising, hiring, licenses, insurance, commodities, inventory, and similar pre -opening operating expenses. Qualifying costs and expenses exclude installation or construction work completed on the Property. Such qualifying costs and expenses incurred by Developer between the Effective Date and the Certificate of Occupancy will be reimbursed by City upon Developer’s submission of a qualifying third -party invoice and supporting documentation reasonably satisfactory to City.
2) An amount equal to Five Million Dollars ($5,000,000.00) in reimbursement and consideration to Developer for the ongoing Community Benefits to be provided by Developer as part of the Project, to be paid as follows: (a) Two Million Dollars ($2,000,000.00) on the first anniversary of the Certificate of Occupancy ; (b) One Million Dollars ($1,000,000.00) on the second anniversary of the Certificate of Occupancy; (c) One Million Dollars ($1,000,000.00) on the third anniversary of the Certificate of Occupancy; and (d) One Million Dollars ($1,000,000.00) on the fourth anniversary of the Certificate of Occupancy.
3) Limitations / Offsets / Reductions. City Reimbursements are intended to be reimbursements or consideration for the Community Benefits provided by the Project and Developer’s operation thereof consistent with this Agreement , and will not be used to pay or reimburse construction or installation costs incurred by Developer. If a particular parcel of land or building within the Project is not used for a lawful purpose, or if a Primary Attraction is fails to or ceases to operate for a period of six months (6) months, with the exception of Permitted Closures, 15 then any City Reimbursements then-due and owing shall be reduced by a percentage equal to the proportional square footage of the offending area when compared to the aggregate building area of all structures on site . The foregoing shall not apply to the extent performance is hindered or delayed by Force Majeure or the direct acts or omissions of City
4) Condition Precedent to City Payments. City’s obligation to pay or remit the City Reimbursements to Developer, in whole or in part, shall be conditioned upon and subject to each of the following being true at the time the payment is requested or due. A City Reimbursement may be suspended until Developer demonstrates compliance with each of the following, and City Reimbursements will terminate upon any termination of this Agreement for a default of Developer described in Section 11.B or 11.C, subject to notice and cure periods set forth in said sections:
a) Developer is in compliance with all material terms of this Agreement and not in Default , beyond any notice and cure period , including but not limited to terms of this Agreement associated with Community Benefits, and maintenance and operation of the Project;
b) Developer and all applicable Tenants have timely filed required returns and remitted payment of sales and use tax, property tax, possessory interest tax, and/or other applicable taxes, assessments, or any other sources of revenue required to be remitted to a taxing entity with jurisdiction;
c) Developer acknowledges that the City Payments are contingent on actual business operations, compliance with applicable laws, the City’s discretion to not predetermine required findings or pre -commit to legislative acts, and future legislative frameworks; and
d) Developer shall be in compliance with any and all laws applicable to Property or Project, and will promptly take action(s) necessary to become compliance following any notice of noncompliance.
B. Reimbursement for Public Improvements . Consistent with the conditions of approval for the Project Entitlements, Developer will complete certain improvements located in , or directly adjacent to, the City’s public right of way along Beach Boulevard and the eastern boundary of the Property. City agrees to reimburse Developer an amount not to exceed Five Hundred Thousand Dollars ($500,000.00) for the cost of such public improvements upon Developer’s submission of a qualifying third -party invoice and supporting documentation reasonably satisfactory to City, and evidence that such work was completed in accordance with applicable provisions of the California Labor Code (i.e. the Prevailing Wage Laws) governing the completing of public works, including but not limited to the payment of prevailing wages for such work.
C. Zoning and Land Use Support. City will cooperate with Developer in the processing of any required CEQA documentation and land use entitlements for the Project, and reasonably work with Developer to recommend to the City Council, zoning amendments, signage approvals, or municipal code modifications reasonably necessary for the Project, incl uding modifications to 16 noise regulations, signage programs, and similar measures required to allow full realization of the Project; provided that Developer is solely and exclusively responsible for any and all costs or expenses of necessary applications, permits and approvals.
D. Marketing Cooperation. City agrees to support and cooperate on Project name recognition, marketing, and branding by: (1) incorporating the Project into City marketing materials, signage, wayfinding, and official communications; (2) coordinating exclusively with Developer on brand rollout, messaging, and public -facing use; and (3) other reasonable non - monetary requests as may be approved in the reasonable discretion of the City Manager from time to time.
E. No Pre-Commitment by the City . By its execution of this Agreement, the City is not committing itself to or agreeing to undertake any activity requiring the subsequent exercise of discretion by the City, or any department thereof, including but not limited to: any future proposal, amendment, or approval of any land use regulation governing the Project or Property; the provision of any financial assistance for the development of any public or private interest in real property; the City’s future budgets and associated fiscal decisions; the acquisition, conveyance, or sale of real property; or any other such activity.
7. INDEMNIFICATION. For and in consideration for the rights and privileges granted hereunder, Developer shall defend (with counsel selected by the City), indemnify, and hold harmless City and its officials, officers, employees, agents, and volunteers (collectively including City the “Indemnitees”) from and against any and all losses, liability, cla ims, suits, actions, damages, and causes of action arising directly or indirectly out of (i) the construction, operation, or maintenance of the Project or Property; and (ii) any causes of action arising out of any personal injury, bodily injury, loss of life, or damage to property, or any violation of any federal, state, or municipal law or ordinance, caused in whole or in part by the willful misconduct or negligent acts or omissions of Developer or its employees, subcontractors, or agents. The foregoing obligation of Developer shall not apply when the injury, loss of life, damage to property, or violation of law arises wholly from the gross negligence or willful mis conduct of the City or Indemnitees and the Indemnitee(s) shall, defend, indemnify and hold Developer harmless from all 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 under California or federal law for such intentional misconduct and/or gross negligence . It is understood that the duty of Developer to indemnify and hold harmless includes the duty to defend as set forth in Section 2778 of the California Civil Code. Acceptance by City of insurance certificates and endorsements for any Agreements or actions related to the Project do not relieve Developer or Owner from liability under this indemnification and hold harmless clause. This indemnification and hold harmless clause shall apply to any damages or claims for damages whether or not such insurance polici es have been determined to apply. By execution of this Agreement, Developer and City acknowledge and agree to the provisions of this Section and that it is a material element of consideration. The obligations under this Section shall survive the expiration or termination of this Agreement.
8. INSURANCE. In order to protect Indemnitees against any and all claims and liability for death, injury, loss and damage resulting from Developer’s actions in connection with this Agreement, the Property, or the Project, Developer shall secure and maintain the insuranc e 17 coverage in the types and amounts described in this Section. Developer shall pay any deductibles and self-insured retentions under all such insurance policies issued in satisfaction of the terms of this Agreement. Developer shall maintain all such insuran ce policies for the entire Term of this Agreement, with the exception of those policies relating to design and construction of the Project which shall be maintained until issuance of the Certificate of Occupancy. Such liability insurance may be maintained as part of or in conjunction with any other liability insurance coverage carried by the Developer.
A. Workers’ Compensation Insurance . Developer shall submit written proof that Developer is insured against employer’s liability for workers’ compensation in accordance with the provisions of Section 3700 of the Labor Code. Said policy shall provide for indemnification of the employer against direct or contingent loss or liability for damages for bodily and personal injury or disease of an employee. Said policy shall provide coverage in the minimum liability limits of $1,000,000 per accident for bodily injury and disease. To the extent applicable, by executing this Agreement, Developer makes the following certification, required by Section 1861 of the Labor Code:
“I am aware of the provisions of section 3700 of the Labor Code which require every employer to be insured against liability for workers’ compensation or to undertake self - insurance in accordance with the provisions of that code, and I will comply with suc h provisions before commencing the performance of the work of the Project.”
Developer shall require each contractor and sub -contractor performing work on the Project to provide workers’ compensation coverage for all of such contractor’s or sub -contractor’s employees, unless the contractor’s or sub -contractor’s employees are covere d by workers’ compensation insurance provided by Developer. If any class of employees engaged in work or services performed in connection with the Project is not covered by Labor Code Section 3700, Developer shall provide and/or require each contractor or sub-contractor to provide adequate workers’ compensation insurance covering such employees. Each workers’ compensation maintained pursuant to this section shall contain a full waiver of subrogation clause in favor of the Indemnitees.
B. Commercial General Liability Insurance and Property Damage. Commencing upon issuance of the first certificate of occupancy for any building included in the Project and continuing throughout the remaining Term, Developer shall procure and maintain, submit written proof to City upon request, a standard comprehensive general public liability and property damage policy or policies, including general liability, liquor liability, automobile liability, in protection of the Developer and Indemnitees. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the use or operation of the Property. Said policy or policies shall provide coverage in the minimum liability li mits of $10,000,000 for personal injury or damage to property resulting from each accident or event (subject to a deductible of not to exceed $500,000). The general aggregate limit shall be not less than Twenty Million Dollars ($20,000,000) unless a Ten Million Dollars ($10,000,000) per location aggregate limit is provided by separate endorsement. Such public liability and property damage insurance may, however, be in the form of a single limit policy covering all such risks in an amount equal to the aggre gate 18 minimum liability limits set forth herein. The Developer and Indemnitees are to be covered as additional insureds on the policy with respect to use or operation of the Property, including materials, parts, or equipment furnished in connection with such use or operation. General liability coverage can be provided in the form of an endorsement to Developer’s insurance (at least as broad as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10 , CG 20 26, CG 20 33, or CG 20 38; and CG 20 37 if a later edition is used).
C. Architectural / Engineering Services. If Developer hires a consultant to provide design services, such as architectural or engineering services in connection with the Project, or any portion of the Project, Developer shall require each such consultant to provide Professional Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, the performance of such design services, with limits of not less than TWO MILLION DOLLARS ($2,000,000) per incident and not less than TWO MILLION DOLLARS ($2,000,000) aggregate.
D. Hazard Insurance. Commencing upon issuance of the first certificate of occupancy for any building included in the Project and continuing throughout the remaining Term, Developer shall maintain a policy or policies of insurance against loss or damage to the Project resulting from fire, lightning, vandalism, malicious mischief and such perils ordinarily defined as “extended coverage” in the full replacement value of the Project, excluding flood and earthquake; provided, however, that an earthquake and flood rider shall be purchased for the Property if such coverage is available at a reasonable cost. This policy or policies may be in the form of a builder’s risk policy providing coverage in an amount not less than the construction costs expended for the Project until such time as the Project is complete and available for use and occupancy and thereafter shall be maintained in an amount not less than the full replacement value of the Project, subject to a “deductible Clause” of not to exceed $500,000 for any one loss or, in the case of a flood or earthquake rider, ten percent (10%) of the coverage obtained. The term “full replacement value” as used in this section shall mean the actual replacement cost of the improvements located on the Property (including the cost of restoring the surface of the Property, but excluding the cost of restoring trees, plants and shrubs).
E. Contractors and Subcontractor Insurance. During the construction of the Project, Developer shall require that each contractor performing work maintain the following insurance coverage, as specified below, at all times during the performance of said work, or Developer shall provide for such contr actors “wrap” coverage, as specified below, at all times during the performance of said work:
1) Each general contractor and each sub-contractor shall maintain Commercial General Liability Insurance with limits of not less than ONE MILLION DOLLARS ($1,000,000) per occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate to protect Developer during the construction of the Project from claims involving bodily injury and/or death and damage to the property of others; and
2) Each general contractor and each sub-contractor shall maintain Automobile Liability Insurance against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non -owned vehicles used in the performance of the contractor’s obligations with minimum limits for bodily injury and property 19 damage of ONE MILLION DOLLARS ($1,000,000) each occurrence. Such automobile liability insurance shall be provided by a business or commercial vehicle policy.
2) General Insurance Provisions.
1) Any insurance coverage required under this Agreement shall be written on an occurrence basis. The applicable certificate of insurance must clearly provide that the coverage is on an “occurrence” basis. The requirements of this Section shall survive any e xpiration or termination of this Agreement.
2) Receipt by City of evidence of insurance that does not comply with the above requirements shall not constitute a waiver of the insurance requirements of this Agreement.
3) All of the insurance coverage required under this Section shall be maintained by Developer or its contractors, as required by the terms of this Agreement, and shall not be reduced, modified, or canceled without, at least, thirty (30) days prior written notice to City.
Also, phrases such as “endeavor to” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company” shall not be included in the cancellation wording of any certificates of insurance or any coverage for the Additional Insureds. Developer shall immediately obtain replacement coverage for any insurance policy that is terminated, canceled, non -renewed, or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy.
4) All insurance to be obtained and maintained by Developer under this Section shall be issued by a company or companies listed in the then current “Best’s Key Rating Guide” publication with a minimum of an “A -7” rating. Developer will not accept self -insurance in satisfaction of the insurance requirements of this Section.
5) All insurance obtained and maintained by Developer in satisfaction of the requirements of this Agreement shall be primary to and not contributing to any insurance maintained by the Additional Insureds.
6) Insurance coverage in the minimum amounts set forth in this Section shall not be construed to relieve Developer of any liability, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall it preclude the Additional Insureds from taking such other actions as are available to them under any other provision of this Agreement or otherwise at law.
7) Failure by Developer to maintain all insurance coverage required by this Section in effect shall be an event of default by Developer , if such is not cured within thirty (30) days following written notice from the City . City, at its sole option, may exercise any remedy available to them in connection with such an event of default , beyond the applicable notice and cure period(s). Alternatively, City may, at its sole option, purchase any such required insurance coverage and City shall be entitled to immediate payment from Developer for any premiums and associated costs paid by City for such insurance coverage. Any election by Ci ty to purchase or not to purchase insurance otherwise required to be carried by Developer shall not relieve Developer of its obligation to obtain and maintain the insurance coverage required by this Agreement. 20 8) Payment of Insurance Proceeds . Proceeds of any policies of liability insurance required above shall be applied toward extinguishment or satisfaction of the liability with respect to which the insurance proceeds shall have been paid.
9) Cooperation. Each Party shall cooperate with the other Party, each at their own expense, in filing any proof of loss with respect to any insurance policy maintained pursuant to this Section.
3) Waiver of Subrogation. City and Developer hereby release each other from any and all liability for loss, damage or injury to the property of the other in or about the Property or the Project which is caused by or results from a peril or event or happening which is covered by insurance actually carried and in force at the time of the loss by the party sustaining such loss; provided, however, that such waiver shall be effective only to the extent permitted by the insurance covering such loss and to the extent such insurance is not prejudiced.
C. Damage to Project During Term . If, during the Term, the Project is damaged or destroyed by fire, casualty or any cause whatsoever, either in whole or in part, the proceeds of all insurance on the Property required by this Agreement shall be paid and applied to replace or repair the Project or an alternative development consistent and approved in accordance with the ECSP , subject to the provisions of Section 8.B(8) above and the requirements or interests of Developer’s lenders, investors or other financial obligations relating to or arising from the Project or Property at the time of such damage.
9. ASSIGNMENT AND TRANSFERS.
A. Developer acknowledges that the identity of Developer is of particular concern to City, and it is because of Developer's identity that City has entered into this Agreement with Developer. Except for any Assignment expressly permitted in this Section 9 (on the terms and subject to the conditions set forth above), or otherwise expressly approved in writing by City pursuant to this Section 9, no voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement. Documents sha ll be submitted to counsel designated by City.
B. Without City’s prior written consent, which consent may be given or withheld in City’s sole and absolute distraction, Developer shall not sell, assign, transfer, mortgage, lease, hypothecate, encumber or convey (collectively an “Assignment”) the Property, Project, or any portion thereof or interest therein, or any of Developer’s rights or obligations hereunder, at any time prior to expiration of the Term ; except for a Deed of Trust securing Construction Funds as permitted herein, or service contracts relating to Project operations, maintenance, and similar functions.
C. Notwithstanding the foregoing or any other contrary provision in this Agreement , the following Assignments shall not be prohibited and will be permitted on the terms and conditions set forth:
21 1) Upon ten (10) days written notice to City, Developer may, at any time during the Term, transfer direct or indirect ownership interests in Developer upon prior written notice to City, provided that Ran Knishinsky, Adi Knishinsky and/or Amram Knishinsky, or their estate, retain at least majority control of business operations and business decision making authority for the Project, as shown by reasonable evidence delivered to City prior to the applicable transfer.
2) Developer may lease spaces to Tenants or accommodate Special Events for the uses contemplated in this Agreement for the area of the Project so leased or occupied, without need for approval by or prior notice to City , except to the extent permits or approvals may be required from City, acting in its capacity as a governmental or regulatory agency, such as a Temporary Use Permit under Chapter 19.1004 of Title 19 of the Buena Park Municipal Code.
3) Anytime following the seventh anniversary of the Certificate of Occupancy , provided the Purchase Note has first been fully repaid and the Purchase Note Deed of Trust fully released and reconveyed, and so long as Developer is not then in Default of this Agreement, Developer may sell, assign, convey, or otherwise transfer the Property and Project, in their entirety, to any third-party purchaser, successor, or assignee, upon at least thirty (30) days written notice to and consent of City, which may not be unreasonably withheld provided that Developer first demonstrates to City’s reasonable satisfaction that the proposed assignee (by and through its principals, executives, owners, or managers): (a) has at least at ten (10) years’ experience and positive performance record for operating, owning, or managing an entertainment or mixed -use project that is reasonably comparable to the Project in terms of size, purpose, and primary uses; (b) possesses or has the ability to acquire the requisite federal, state, and local permits, licenses, or approvals needed to operate the Project; (c) has sufficient financial assets and capacity (in the form of available cash, loans, credit, or other form of immediately available funds) to own, maintain, and operate the Project consistent with the terms and conditions of this Agreement; and (d) has executed an assumpt ion and assignment, in a form approved by the City Attorney, of all Developer’s obligations under this Agreement, the Development Agreement, and the REA.
10. PARTY REPRESENTATIONS
A. Developer Representations. Developer represents, warrants and covenants to City as follows:
1) Authority. Developer is a Limited Liability Company in the State of Arizona and is now and shall remain for the duration of this Agreement in good standing under the Laws of the State of Arizona and qualified to do business in the State of California. The copies of the documents evidencing the organization of Developer that have been delivered to City are true and complete copies of the originals, as amended to the Effective Date. Developer has f ull right, power and lawful authority to undertake all of its obligations as provided herein, the execution, performance and delivery of this Agreement by Developer has been fully authorized by all requisite actions on the part of Developer, each and all o f the persons signing on behalf of Developer are authorized to do so, and such execution is binding upon Developer.
2) Covenant to Pursue Project. Upon and after the Effective Date, Developer will diligently and without interruption pursue the development, construction, and opening of the 22 Project within the time period specified in the Schedule of Performance, subject to Force Majeure and delays caused by the acts or omissions of City.
3) Reputable Contractor(s). Developer has retained a qualified, responsible, and reputable general contractor to undertake construction of the Project that is: licensed in California and possesses such other licenses and certifications as may be required by law or regulation to dev elop the Project; experienced in constructing the type of improvements constituting the Project; and has entered into a written contract with Developer to undertaken construction of the Project on terms consistent with this Agreement , provided this Section shall not limit the Developer’s right to terminate and replace such general contractor during the Project with a new general contractor that satisfies this Section.
4) Cooperation. Developer has or will authorize, execute and deliver, within the times set forth therefore in the Schedule of Performance any and all other agreements and documents required to be authorized, executed and delivered by Developer in order to carry out and perform Developer’s obligations hereunder , subject to Force Majeure and delays caused by the acts or omissions of City.
5) Miscellaneous Property Rights. Developer has or will secure all franchise, licensing, intellectual property, or similar rights necessary to develop and operate the Project;
6) Capacity. Developer possesses or has secured adequate financial resources and capacity, and has the skill and experience needed to develop and operate the Project. Developer recognizes that the unique qualifications, experience and identity of Developer’s principals are of particular concern to City and that it is because of such qualifications, experience and identity that City is entering into this Agreement with Developer.
7) No Improper Purpose . Developer is entering into this Agreement for the purpose of developing and operating the Project and for no other development or real estate purpose, including but not limited to speculation in land holding, land banking, or other similar purpose.
8) No Conflict. To the Developer’s actual knowledge, Developer's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which Developer is a party or by which it is bound. To the Developer’s actual knowledge, Developer covenants that it and its shareholders or principles are in compliance with and will provide all required disclosures under all conflict of interest laws including, but not limited to, Government Code § 1090, the Political Reform Act (Government Code §81000 et seq.), the Levine Act (Government Code § 84308) and campaign contribution and disclosure laws.
9) No Bankruptcy. Developer is not the subject of a bankruptcy proceeding or in the process of filing for any bankruptcy protection.
23 10) No Litigation. There are no claims, causes of action or other litigation or proceedings pending or threatened against Developer that would affect Developer's ability to undertake and satisfy all of its obligations pursuant to this Agreement.
B. City Representations . City represents, warrants and covenants to Developer as follows:
1. Authority. City is a California municipal corporation in good standing under the Laws of the State of California and qualified to do business in California. City has full right, power and lawful authority to undertake all of its obligations as provided herein, the execution, performance and delivery of this Agreement by City has been fully authorized by all requisite actions on the part of City, each and all of the persons signing on behalf of City are authorized to do so, and such execution is binding upon City.
2. Cooperation. City has or will authorize, execute and deliver, within the times set forth in the Schedule of Performance, any and all other agreements and documents required to be authorized, executed and delivered by City in order to carry out, give effect to this Agreement, or are necessary for Developer to perform its obligations hereunder.
3. No Conflict. City's execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which it is bound.
4. No Bankruptcy. City is not the subject of a bankruptcy proceeding or in the process of filing for any bankruptcy protection.
5. No Litigation. There are no claims, causes of action or other litigation or proceedings pending or threatened against City of which Developer is not aware that would affect City's ability to undertake and satisfy all of its obligations pursuant to this Agreement.
C. Truth of Representations and Warranties . Each Party shall, upon learning of any material fact or condition which would cause any of the warranties and representations made by them in this Section not to be true, give written notice within fourteen (14) days of such fact or condition to the other Party.
11. DISPUTES, DEFAULT AND REMEDIES
A. Dispute Resolution.
1) Good Faith Negotiations. Prior to initiating any legal action, each Party will make reasonable efforts to meet and confer in good faith with the other Party in an attempt to resolve any disputes arising out of or relating to this Agreement. A Party’s meet and confer efforts may commence and expire contemporary with the notice and cure periods associated with the applicable default.
24 2) Mediation. If the Parties are unable to resolve a dispute through direct negotiation, the Parties may voluntarily participate in a non -binding mediation conducted by a mediator mutually selected by the Parties after consultation with their respective legal counsel. Each Party shall bear its own attorneys' fees and costs associated with the mediation, and the Parties shall share equally the mediator's fees.
3) Litigation. If a dispute is not resolved through good faith negotiations or mediation, if and as applicable, either Party may commence litigation.
4) Government Claims Act; Immunities. Nothing in this paragraph is intended or shall be deemed a waiver of any immunities, defenses, or procedural requirements under the California Government Claims Act, Buena Park Municipal Code, or other applicable laws.
B. Developer Breach Prior to Certificate of Occupancy . If, prior to a Certificate of Occupancy, Developer fails or declines to pursue construction, development, and opening of the Project as required by this Agreement, and fails to cure such breach within forty-five (45) days’ written notice from City, or if the cure takes longer than 45 days, if Developer has not commenced the cure within said 45 days and diligently pursues the cure without interruption until complete, then, in addition to pursuing any other rights or remedies which City may have at law or in equity, City may, at City’s option, exercise the right and option to repurchase, reenter, and repossess the Property described hereinbelow by providing written notice to Developer of such exercise. The City’s right and option in this section shall expire upon issuance of a Certificate of Occupancy and may be signified by recording a release of construction covenants as described in Section 4.L.
1) Option to Repurchase; Reenter and Repossess. Upon an uncured default of Developer arising prior to a Certificate of Occupancy , City shall have an option to repurchase, reenter and take possession of any portion of the Property then owned by Developer with the Project and all other improvements then-existing thereon. From and after the issuance of a Certificate of Occupancy for the Project the remedies set forth in this subsection shall no longer be available to City under any circumstance. The issuance of a Certificate of Occupancy or recorded Release of Construction Covenants shall be conclusive evidence that the rights and options under this section have been expired and been terminated.
2) Priority of City Rights . City’s rights and option in this section shall be subordinate, subject to, and limited by, and shall not defeat, render invalid or limit, any D eed of Trust permitted by this Agreement or any rights or interest provided in this Agreement for the protection of a Lender.
3) Cost to Exercise. To exercise its rights and option in this section, City shall pay to Developer by wire or cashier’s check an amount equal to:
(a) The purchase price paid by the Developer for the Property set forth in the Purchase and Sale Agreement; plus
25 (b) The reasonable, documented costs actually expended by Developer in demolishing existing improvements and completing earthwork in preparation for constructing foundations for the Project; less
(c) The reasonable documented costs actually expended by City in demolishing the Project or other improvements, or any portion thereof desired by City to be demolished, made or installed to the Property by Developer after the Effective Date; less
(c) Any gains or income withdrawn or made by Developer from the Property; less
(d) The value of any unpaid liens or encumbrances on the Property which City assumes or takes title subject to said encumbrances.
C. Developer Breach After Certificate of Occupancy. If, after receipt of a Certificate of Occupancy and prior to expiration of the Term, Developer fails or declines to own, use, operate, manage, and maintain the Project and Property in accordance with the applicable terms and conditions of this Agreement , and fails to cure such breach within 45 days’ written notice from City, or if the cure takes longer than 45 days, if Developer has not commenced the cure within said 45 days and diligently pursues the cure without interruption until complete, then, in addition to pursuing any other rights or remedies which City may have at law or in equity, including but not limited to an action for specific performance, City may issue written notice suspending or terminating any or all remaining City Payments that may be due under Section 6, and such action shall have no impact on the continuing enforceability of the remaining provisions of this Agreement nor limit or relieve Developer of its continuing obligation to comply wi th any and all such terms.
D. Breach by City. If, at any time during the Term, City fails or declines to perform any obligation arising under this Agreement, and fails to cure such breach within 45 days’ written notice from Developer , or if the cure takes longer than 45 days, if City has not commenced the cure within said 45 days and diligently pursues the cure without interruption until complete, then, Developer may pursue any and all rights it may have at law or in equity, including but not limited to an action for specific performance.
E. No Consequential Damages. Notwithstanding anything to the contrary elsewhere in this Agreement or provided for under any applicable law, neither Party shall, in any event, be liable to the other Party, either in contract, tort or otherwise, for any consequential, incidental, indirect, special or punitive damages from such other person, including loss of future revenue, income or profits, diminution of value or loss of business reputation or opportunity relating to the default or alleged breach hereof, whether or not the possibility of such damages has been disclosed to the other Party in advance or could have been reasonably foreseen by such other Party.
F. No Liability For Party Officials or Employees . No member, official or employee of either Party shall be personally liable to the other Party, or any successor in interest, in the event of any default or breach of this Agreement or for any amount which may become due to a Party or its successor hereunder.
26 12. MISCELLANEOUS
A. Obligation to Refrain from Discrimination. Throughout the entire Term of this Agreement, Developer covenants and agrees that , in compliance with applicable law, there shall be no discrimination against or segregation of any person, or group of persons, on account of sex, marital status, age, handicap, race, color, religion, creed, national origin or ancestry in the sale, transfer, use, occupancy, tenure or enjoyment of the Project, and Developer (itself and any person claiming under or through Developer) shall not establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of vendors of the Project or any portion thereof.
B. Taxes and Assessments; Liens. During the term of this Agreement, Developer shall pay or cause to be paid when due all real estate taxes and assessments associated with the Property.
Developer shall not default of any recorded encumbrance or lien that is secured by the Property, including but not limited to any mortgage, trust deed, tax lien, contractor lien, or other similar recorded instrument, and shall promptly remove or duly satisfy any such recorded lien within a reasonable time but in all instances prior to a sale thereunder. Notwithstanding the foregoing, Developer may in good faith contest the validity or grant of any recorded lien or tax assessment, provided that notice of such intent to contest is provided to the City and any payment due shall be made immediately upon final resolution of any such contest or as may otherwise be required by law.
C. Compliance With Laws . At all times during the Term, Developer shall own, develop, operate, manage, and maintain the Property and Project in accordance with all applicable local, state and federal laws and regulation. Developer shall obtain all necessary licenses, permits, or other approvals necessary to develop, use, and operate the Property as described herein.
Developer shall not engage or permit any activities or conditions to exist on the Property that are illegal or which constitute a public nuisance as defined with reference to local or state law.
D. Permitted Delays. Neither Party shall be deemed in default and performance shall be excused where delays or defaults are caused unavoidably and beyond the reasonable control of the Party seeking the delay by a Force Majeure event. An extension of time for any such cause shall be for the period of the delay and shall commence to run from the time of the commencement of the cause, if notice by the Party claiming such extension is sent to the other party within sixty (60) days of the commencement of the cause. If notice is sent after such sixty (60) day period, then the extension shall commence to run no sooner than sixty (60) days prior to the giving of such notice. Times of performance under this Agreement may also be extended in writing by the mutual agreement of the City Manager and Developer.
E. Estoppel. City shall from time to time, within 15 days following the receipt of a request by Developer or a Lender with a Deed of Trust secured by the Property, deliver to Developer or such Lender a written statement executed by City in form and substance reasonably satisfactory to Developer and such Lender, (i) stating that this Agreement is in full force and effect and has not been modified or amended (or if modified or amended, setting forth all modifications and amendments), (ii) stating whether or not to the best knowledge of City, Developer is in default 27 under this Agreement and if Developer is in default, setting forth the specific nature of all such defaults, and (iii) as to any other matters reasonably requested by Developer or such Lender. City acknowledges that any statement delivered pursuant to this paragraph may be relied upon by any purchaser or owner of all or a portion of the Property and/or any improvements thereon or by a Lender or by any assignee of such Lender or anyone claiming by, under or through such Lender.
F. No Partnership or "Agency" Relationship Created. In performing this Agreement, each Party is an independent contractor of the other Party and neither Party is the agent or "partner" of the other Party. Neither Party assumes any responsibility or liability for the other Party’s conduct or performance of this Agreement or with respect to the development, operation, maintenance or management of the Project or Property.
G. Cooperation. Each Party agrees to cooperate with the other in this transaction and, in that regard, shall promptly execute any and all documents which may be reasonably necessary, helpful, or appropriate to carry out the purposes and intent of this Agreement. Each Party shall cooperate with and assist the other Party, to the extent legally feasible, to achieve the full purpose and intent of this Agreement. Such cooperation shall extend to all necessary and appropriate utility provider or governmental approvals, consents, or permits. Neither Party will unreasonably delay, withhold or unreasonably condition any future action or approval which may be necessary to develop and operate the Project, provided that the other Party reasonably and satisfactorily complies with all preliminary procedures, actions, payments of fees, and criteria generally required of it as a condition to the other’s performance.
H. Authority to Act. Except as may be otherwise specifically provided herein or limited by law, whenever any approval, notice, direction, consent or request by a Party is required or permitted under this Agreement, such action shall be in writing, and such action may be given, made or taken by the City Manager, if on behalf of City, or by the General Manager, if on behalf of Developer.
I. Notices. All notices or other communications required or permitted between the Parties hereunder shall be in writing, and shall be (i) personally delivered, (ii) sent by United States registered or certified mail, postage prepaid, return receipt requested or (iii) sent by nationally recognized overnight courier service (e.g., Federal Express or United Parcel Service), addressed to the Party to whom the notice is given at the addresses provided below, subject to the right of any Party to designate a different complete address for itself by notice similarly given. Any notice so given by registered or certified United States mail shall be d eemed to have been given on the third business day after the same is deposited in the United States mail. Any notice not so given by registered or certified mail, such as notices delivered by personal delivery or courier service, shall be deemed given upon receipt, rejection or refusal of the same by the Party to whom the notice is given. Rejection or other refusal to accept or the inability to deliver because of changed address of which no notice was given shall be deemed to constitute receipt of the notic e or other communication sent.
To City: City of Buena Park
Buena Park City Hall
ATTN: City Manager
28 6650 Beach Boulevard
Buena Park CA 90622
With Copy To: Buena Park City Attorney
6650 Beach Boulevard
Buena Park CA 90622
To Developer: Buena Park Boardwalk, LLC
9500 E Via de Ventura, Suite E100
Scottsdale, AZ 85256
Attn: Adi Knishinsky
J. Books and Records. Both Parties shall maintain or cause to be maintained complete and accurate books, records, and documents documenting performance of their respective obligations under this Agreement for a period of three (3) years after the Term. Upon reasonable advance notice, each Party shall have the right to review, inspect, or copy such books and records of the other Party at any time during the Term, or three (3) years after the expiration of the Term.
All examinations or inspections shall be conducted during normal business hours.
K. Recording. This Agreement or a memorandum thereof shall be recorded as a condition of and at the Closing of Escrow pursuant to the Purchase Agreement and shall be recorded junior only to the grant deed by which Developer takes title, except as subordination to liens securing Construction Funds as contemplated herein or the Purchase Agreement. Upon the expiration or termination of the terms of this Agreement, upon the request of the Developer, City will execute and deliver to Developer, in recordable form, an instrument confirming that the provisions of this Agreement have expired.
L. Binding on Successors. This Agreement shall run with the Property and shall bind, and the benefits and burdens hereof shall inure to, the respective Parties hereto and their legal representatives, executors, administrators, successors and assigns
M. Amendments. This Agreement may be amended or modified only by a written instrument signed by both Parties and recorded in the Official Records of Orange County.
N. No Waiver. Any waiver by a Party of any term or provision of this Agreement must be in writing. No waiver shall be implied from any delay or failure by a Party to take action on any breach or default hereunder or to pursue any remedy allowed under this Agreement or applicable law. No failure or delay by a Party to require strict performance by the other Party of any provision of this Agreement or to exercise any election contained herein or any right, power or remedy hereunder, shall be construed as a waiver of any other provision or any succeeding breach of the same or any other provision hereof or a relinquishment for the future of such election.
O. Governing Law; Venue . This Agreement shall be interpreted and construed in accordance with the laws of the State of California without regard to principles of conflicts of law.
Any action to enforce or interpret this Agreement shall be filed and heard in the Superior Court of Orange County, California.
29 P. Attorneys' Fees . In any court proceedings arising from the enforcement or to interpret this Agreement, the prevailing party shall be entitled to recover its costs and reasonable attorneys' fees and experts’ fees incurred during the proceeding (including appeals) as may b e fixed within the sound discretion of the court.
Q. Partial Invalidity. If any provisions of this Agreement is to be deemed to be invalid, illegal or unenforceable, the validity, legality or enforceability of the remaining provisions hereof shall not in any way be affected or impaired thereby. 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.
R. Time of Essence. Time is of the essence in every provision hereof in which time is a factor.
S. Integrated Agreement. This Agreement consists of this Agreement together with all Exhibits attached hereto, and referenced documents, and all of the same are hereby incorporated herein by reference. The provisions of this Agreement shall govern over any inconsistent or conflicting provisions set forth in the Exhibits or incorporated documents, or in any other agreement between the parties. No representation or promise, verbal or written, not expressly set forth herein shall be binding or have any force or effect.
T. Costs and Expenses in Preparing Agreement . Each Party shall be responsible for payment of its costs, including but not limited to attorney’s fees, with respect to negotiation and preparation of this Agreement.
U. Counterparts. This Agreement may be executed in multiple counterparts and delivered as originals, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument.
V. Captions. Any captions to, or headings of, the paragraphs or subparagraphs of this Agreement are solely for the convenience of the Parties, are not a part of this Agreement, and shall not be used for the interpretation or determination of the validity of this Agreem ent or any provision hereof.
W. No Obligations to Third Parties. The execution and delivery of this Agreement shall not be deemed to confer any rights upon, nor obligate any of the Parties to, any person or entity other than the Parties and, to the extent this Agreement constitutes escrow instructions, the Title Company.
X. Construction. This Agreement will be liberally construed to effectuate the intention of the Parties with respect to the transaction described herein. In determining the meaning of, or resolving any ambiguity with respect to, any word, phrase or provision of this Agreement, neither this Agreement nor any uncertainty or ambiguity herein will be construed or resolved against either Party (including the Party primarily responsible for drafting and preparation of this Agreement), 30 under any rule of construction or otherwise, it being expressly understood and agreed that the Parties have participated equally or have had equal opportunity to participate in the drafting thereof.
Y. Authorized Signatories. The Parties warrant and represent to each other that each Party has caused this Agreement to be executed by and through their duly authorized representatives set forth below.
IN WITNESS WHEREOF, the Parties have executed this Agreement and Declaration of Restrictive Covenants as of the date first written above.
[NOTARAIZED SIGNATURES TO BE ADDED]
31 Exhibit “A” – OPA
Legal Description of Property
PARCEL 1: (APN 136-203-40)
THAT PORTION OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS:
THE NORTH 449.50 FEET OF THE SOUTH 62430 FEET OF THAT PORTION OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2.1 TOWNSHIP SOUTH, RANGE 11 WEST, IN THE
RANCHO LOS COYOTES, CITY DE -BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN
THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, LYING EASTERLY OF THE EAST LINE OF TRACT NO. 2435, AS PER MAP RECORDED IN BOOK 111, PAGES 13 TO 16 INCLUSIVE OF SAID MISCELLANEOUS MAPS.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO, 89 -375668 OF OFFICIAL RECORDS.
ALSO EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED DECEMBER 26, 1997 AS INSTRUMENT NO. 97-664764 OF OFFICIAL RECORDS.
PARCEL 2: (APN'S: 136-211-57 AND 136-211-64)
THE SOUTH 175 FEET OF THE EAST 1/2 OF THE NORTHWEST 1/4 OF THE SOUTHEAST 1/4 OF SECTION 2, TOWNSHIP 4 SOUTH, RANGE 11 WEST, IN THE RANCHO LOS COYOTES, CITY OF
BUENA PARK, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS PER MAP RECORDED IN BOOK 51, PAGE 11 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM THAT PORTION CONVEYED TO THE STATE OF CALIFORNIA IN A DOCUMENT RECORDED JULY 17, 1989 AS INSTRUMENT NO. 89 -375668 OF OFFICIAL RECORDS.
32 Exhibit B – OPA
EXHIBIT “F” - PSA
SCHEDULE OF PERFORMANCE
Item To Be Performed Time to Perform / Deadline Agreement Reference
1. Closing of Escrow (Outside Closing Date) Effective Date + 365 days 4.D
2. Building Permit Issuance Close of Escrow + 30 days 4.G
3. Construction Start Close of Escrow + 60 days 4.G
4. Construction Complete / Certificate of
Completion Issued
Construction Start + 24 months 4.G
July 14, 2026
STUDY SESSION
Item No. 9A.
City Council Agenda Report
DISCUSS AND PROVIDE DIRECTION REGARDING POLICE DEPARTMENT CRIME DATA AND REPORTING
PREPARED BY PRESENTED BY
Brad Geyer, Interim Police Chief Brad Geyer, Interim Police Chief
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Brad Geyer, Interim Police Chief Aaron France, City Manager
DISCUSSION
City Council Member Ahn requested this study session discussion to provide the City Council with a comprehensive overview of available crime data, trends, performance metrics, and reporting options. The goal is to determine the most effective format and frequency for ongoing Police Department report-outs to the City Council and community.
Crime data allows the Police Department and the public to identify trends, measure departmental performance, ensure compliance with federal and state requirements, and support data-driven deployment of resources to areas of greatest need. Geographic breakdowns by jurisdictional beat, City Council District, and specified neighborhoods also promote transparency and workload equity.
Key elements include:
• Crime Data by City Council District – Officer-initiated activity and Part 1 crimes. • Crime Mapping – Visual tools showing crime locations to assess beat equity and inform residents. • Crime Rate – Part I crimes per 1,000 residents
• Response Times – Priority call performance comparisons, demonstrating improvements, and the importance of adequate staffing.
The meeting presentation will include supporting maps and visuals to illustrate current conditions and trends. Police Department staff is seeking guidance from the City Council on further direction on an upcoming report-out in October 2026 for National Crime Prevention Month.
July 14, 2026
STUDY SESSION
Item No. 9B.
City Council Agenda Report
DISCUSS AND PROVIDE DIRECTION REGARDING A THREE-DAY KOREAN FOOD FESTIVAL IN SPRING OF2027 IN PARTNERSHIP WITH HUGH ENTERTAINMENT
PREPARED BY PRESENTED BY
Jim Box, Director of Community Services Jim Box, Director of Community Services
DEPARTMENT HEAD APPROVAL CITY MANAGER APPROVAL
Jim Box, Director of Community Services Aaron France, City Manager
DISCUSSION
Staff recommends that the City Council review and provide direction regarding a proposed partnership with Hugh Entertainment to host a three-day Korean Food Festival in April or May 2027 at Hope School. Approval would authorize staff to begin event planning, coordination, and agreement negotiations.
In the fall of 2025, Hugh Entertainment approached City staff regarding a potential partnership to host a three-day Korean Food Festival in April or May 2027 at either Boisseranc Park or Peak Park. The proposed event aims to celebrate Korean culture through cuisine, entertainment, and commerce while fostering community engagement and regional tourism.
The festival is designed to blend traditional Korean heritage with California's diverse and vibrant community, promoting cultural exchange and supporting local businesses. The event is expected to feature approximately 150 booths and attract an estimated 60,000 attendees, providing a high-quality, family-friendly experience for residents and visitors alike.
During the study session on April 14, 2026, the City Council directed staff to return with additional information regarding the proposed Korean Food Festival, including a parking assessment, a more detailed budget, and potential community benefits to the City of Buena Park.
Following the City Council's direction, City staff continued discussions with Hugh Entertainment and evaluated alternative venue options to better accommodate the anticipated attendance and operational needs of the event.
The proposed three-day Korean Food Festival is tentatively scheduled for April or May 2027 with operating hours of 10 am to 9 pm.
After further evaluation, staff believes Hope School, located at 7901 Knott Avenue and owned/operated by Anaheim Union High School District (AUHSD), might be a better option than either of the two City parks explored previously.
On June 24, 2026, City staff that included Community Services and Public Works personnel conducted a site visit with Mr. Hugh of Hugh Entertainment and Council Member Ahn to assess the site's suitability for the event.
A key concern expressed by the City Council during previous discussions was the availability of parking, the potential impacts on the surrounding community, and whether the proposed venue could adequately accommodate the anticipated attendance of approximately 60,000 visitors over the three-day event.
Based on staff's site evaluation and discussions with Hugh Entertainment, approximately 900 parking spaces are available in the immediate area through a combination of the Hope School parking lot, the Southern California Edsion (SCE) easement property, the Boys & Girls Club property, Peak Park parking along El Dorado and El Monte, and the Ehlers Event Center. Utilization of the Ehlers Event Center parking lot would require shuttle service to transport attendees to and from the event site. Given the anticipated attendance of approximately 15,000 to 20,000 visitors per day, some impact to surrounding residential street parking would also be expected. Overall, the school site provides ample space for event operations, vendor areas, entertainment venues, pedestrian circulation, and vendor parking.
On July 7, 2026, City staff met with the Orange County Fire Authority (OCFA) to review the proposed event layout and operational plans from a public safety perspective. Based on their preliminary review, OCFA indicated that it does not anticipate any insurmountable safety concerns associated with hosting the event at the school site.
However, OCFA emphasized the importance of ensuring adequate infrastructure and emergency preparedness measures, including sufficient generator capacity, reliable water and power access, multiple emergency access points to safely accommodate the anticipated daily attendance of approximately 15,000 to 20,000 visitors, and temporary fencing to secure the school campus and restrict public access to non-event areas. These considerations will be incorporated into the event operations and site planning process, should the event be approved by Council.
The Hope School site offers several advantages, including:
On-site parking for attendees, vendors and performers.
Additional parking availability across the street on the SCE easement property.
Adequate space to accommodate food vendors, cultural exhibits, entertainment stage.
Reduced operational and community impacts compared to previously considered locations.
Limited noise impacts to surrounding residential neighborhoods. Residential homes are located primarily along the western boundary of the school site, while the remaining perimeter is bordered by non-residential uses. This site configuration provides greater separation between event activities and nearby residences compared to other locations considered.
Existing perimeter fencing surrounding the school campus, which will assist with event security, crowd control, and access management. The existing fencing infrastructure may reduce the amount of temporary fencing required for the event.
As City Council is aware, the Hope School site is currently in transition, with proposals for redevelopment of the school site recently submitted. AUHSD staff have indicated the selection and entitlement process for the redevelopment of the school site will be somewhat lengthy and shouldn't impact an event that occurs during the first half of 2027. However, an event beyond 2027 would likely be in question due to redevelopment opportunities currently being reviewed by the school district, and an uncertain construction start date for the project.
Hugh Entertainment has been made aware of, and has expressed a willingness to assume, the responsibilities and associated costs related to the event, including the following:
Event programming, production, and overall event coordination Vendor recruitment and management, including food and merchandise vendors Entertainment booking, scheduling, and coordination of cultural performances Event marketing, publicity, and promotional efforts
Obtaining all required health permits and approvals
Recruiting and managing food and merchandise vendors
Renting and installing canopies, booths, tables, chairs, and related event infrastructure Securing sponsorship and partnership opportunities to support the event In alignment with the City Council's direction to provide a meaningful community benefit for the City of Buena Park as a result of this three-day festival, Hugh Entertainment has committed to making a charitable donation to a local Buena Park non-profit organization, with the amount of the donation contingent upon the revenue generated from the event.
The City would be responsible for the following services and support related to the event:
Providing the event stage
Securing and reserving the event venue
Connecting Hugh Entertainment with the Orange County Health Care Agency to obtain necessary permits and approvals
Providing public safety services throughout the event
Providing portable restrooms
Providing event security and traffic control
Assisting Hugh Entertainment with local sponsorship and community partnership connections Budget Impact
ITEM ESTIMATED COSTS COMMENTS
Overtime (PD) $60,000 Police personnel and traffic control for all 3 days
Overtime (PW) $60,000
Site preparation before event, stage
set up, restrooms and trash
maintenance during event, post
event clean-up
Community Services Staffing $13,000 Staffing for all parking lots, assist with event coordination, CSD booth
Portable Restrooms $8,000 12 portable restrooms
Light Towers (3) $4,500 Rental of light towers for vendor, stage and food areas
Electrical Needs $10,000 Spider boxes and electrical cords for entire event
Generators (3) $8,000 Generators for vendor, stage and
food areas
Fencing $5,000 Rental of fencing
Misc. Hardware/Event Supplies $10,000 Wood chips, plywood, dirt, tools, etc.
Event Signage $5,000 Directional signage for parking and event signage
ESTIMATED TOTAL: $183,500
If approved, staff will:
1. Initiate formal agreement negotiations with Hugh Entertainment
2. Initiate a formal use agreement with the AUHSD for the Hope School site
3. Initiate a formal agreement with the Boys and Girls Club for parking
4. Initiate a formal agreement with SCE for parking on the easement property
5. Conduct a site analysis
6. Develop a comprehensive event operations plan
7. Coordinate with relevant City departments and agencies to ensure permitting, safety, and logistics alignment
8. Begin collaboration with Hugh Entertainment