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NON- BINDING LETTER OF INTENT
CHULA VISTA ENTERTAINMENT COMPLEX
This Non-Binding Letter of Intent (" LOI") is for the proposed development of the state- of- the-art Chula Vista Entertainment Complex ( the " Project" or " CVEC") to be developed at 1775 Millenia Avenue (APN 643-060-57-00) and1730 Millenia Avenue (APN 643-066-15-00) in Chula Vista, California ( the “Primary Project Site”), and is dated for reference purposes only December 3, 2024 (the " Effective Date"), by and between Chula Vista Entertainment Complex, LLC, a California limited liability company ( the " Buyer") and the City of Chula Vista, a California charter city and municipal corporation ( the "Seller" or the “City”) ( also collectively referred to herein collectively as the “Parties”), with reference to the following facts:
A. City is party to that certain Millenia Parcel Map 22000 Parcel 1 Option, Purchase Agreement and Escrow Instructions between Millenia 2022, LLC, a Delaware limited liability company as Seller and City of Chula Vista as Buyer, dated as of March 30, 2023 (the “Lot 1 Agreement”).
B. City owns 383.8 acres located southeastof the intersection of Eastlake Parkway and Hunte Parkway, Chula Vista, California ( the “University Innovation District”).
C. The Project represents a visionary project aimed at creating a state-of-the-art entertainment facility that harmonizes creativity, sustainability, and technological innovation. The CVEC will unfold acrossthreekey phases, eachcontributing to the realization of a comprehensive symbiotic ecosystem between the film, creative, and small business sectors, allowing them to reach their full potential in the City and San Diego County.
D. The Project is anticipated to be developed in three ( 3) phases, generally described as (i) the leaseof spacefor, and the development of, coworking space, professional-standardvideo editing bays and SFX facilities, audio post- production studios and associated office space at 1775 Millenia Avenue ( referred to herein as “Phase 1”), ( ii) construction and development of an approximately 89,600 square foot virtual production studio campus at 1730 Millenia Avenue referred to herein as “Phase 2”), and (iii) improvements and usessupporting Phase1 and Phase 2, which may include film/ arts/entertainment- themed commercial, retail and/or hotel space, and/or parking facilities, or, if there is sufficient demandtherefor, additional virtual production studios at 1730 Millenia Avenue ( referred to herein as “Phase 3”), all as more specifically described in Exhibit “ A” attachedhereto.
E. Both Buyer and Seller recognize and acknowledge the benefit to each arising from the location, development, andoperation of the Project within the City, andsynergy with the City’s University Innovation District.
F. Accordingly, Buyer and Seller desire to enter into this LOI to establish the framework, terms and conditions upon which the Parties intend to negotiate in good faith the Definitive Agreements (defined in Section 5.1 below), the purchase of the Phase 2 Property defined in Section 2.1 below), and development of the Project upon the terms set forth in this LOI.
ACN No. 2024-316
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G. Notwithstanding any other provision to the contrary in this LOI, this LOI is not intended to constitute a binding agreement, but rather to serve as the basis for negotiating and drafting definitive agreementsbetween the parties containing the terms statedin this LOI as well as other terms and conditions to be determined. Neither party will rely on this LOI as binding on the other; any such reliance would be imprudent and unreasonable. Neither party will be bound unless and until a definitive agreement has been executed and delivered by both parties and approved by the Chula Vista City Attorney. It is understoodthat this LOI doesnot contain all the essential terms that the parties expect will be part of an agreement. Further negotiations between the parties are contemplated before a binding agreementwill be prepared.
1. Phase 1 - Lease of Office Space.
1.1 Phase 1 Property. The leased premises for Phase1 consists of approximately 75,000 rentable square feet located on and being the entirety of the third and fourth floors ( the Phase 1 Property") of the building located at 1775 Millenia Avenue, Chula Vista, California.
The Building is currently under construction by the City and is anticipated to be completed in the Fall of 2025.
1.2 Lease Option Period. Seller, as landlord, and Buyer, as tenant, will negotiate an exclusive twelve (12) month (“Lease Option Period”) option and right ( the "Lease Option") to lease the Phase 1 Property on the following terms and conditions provided herein. Buyer shall have the right to exercise the Lease Option by delivering written notice thereof to Seller ( the Lease Option Exercise Notice") at any time during the Lease Option Period. In the event Buyer fails to timely deliver the Lease Option Exercise Notice, then Buyer shall be deemed to have waived the Lease Option, the Lease Option shall thereafter terminate and be of no further force or effect, and Buyer shall execute and deliver such reasonabledocumentation as is necessaryto confirm such waiver. Notwithstanding anything herein to the contrary, the Lease Option shall immediately terminate and be of no further force or effect the upon the expiration of the Lease Option Period if ( i) the Lease Option Exercise Notice is not delivered by Buyer prior thereto , or ii) the Partiesdo not enter into the Lease (defined in Section 1.3 below) during the LeaseOption Period.
1.3 Lease Form and Terms. Buyer and Seller shall usereasonableefforts to agreein writing upon the material terms and upon the actual form of a " Lease” during the Lease Option Period. The Leasewill address, without limitation, the following:
a. Term. The Lease Term shall be for a minimum of ten ( 10) years following completion of Buyer’s tenant improvements or occupancy, plus additional option periods to be negotiated in good faith between the Parties.
b. Base Rent. The Base Rent for the Phase1 Property shall be below fair market value for the first three ( 3) years of the Lease Term and shall be abated during the initial nine (9) month construction period of the LeaseTerm.
c. Maintenance and Utility Expenses. Buyer shall pay Seller, as Additional Rent, Buyer’s pro rata shareof the common areamaintenanceexpensesand utilities. Buyer shall be solely responsible for cost of utilities delivered directly to and serving the Phase 1 Property.
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d. Tenant Improvements. Buyer shall perform tenant improvements, at Buyer’s sole expense, to the Phase1 Property for the uses described in Recital B above. Any major changesto the usesgenerally describedin Recital D above shall be approved by Seller, as landlord, in writing.
2. Phase 2 - Approximately 4.96 Acre Parcel within Lot 1 at 1730 Millenia Avenue.
2.1 Phase 2 Property. Phase 2 is to be developed on an approximately 4.96 acre portion of the approximately 8.64 acre parcel located at 1730 Millenia Avenue, Chula Vista, California ( such portion being referred to herein as the " Phase 2 Property"), and as described or depicted on Exhibit " A" attached hereto. As of the date of this LOI, Seller has an option to purchase Lot 1 pursuant to and as provided in that certain Option, Purchase Agreement and Escrow Instructions dated as of March 30, 2023 (the “Millenia Option Agreement”), by and between Seller, as buyer, and Millenia 2022 (“ Millenia Owner”), as seller. If Seller grants Buyer the Lease Option, Buyer and Seller will negotiate terms applicable during the Lot 1 Option Period, whereby Seller will agree it ( i) shall enforce all of its rights and remedies relative to Lot 1 under the Millenia Option Agreement, and (ii) shall not ( a) modify or terminate the Millenia Option Agreement relative to Seller’s rights in and to Lot 1, ( b) sell Lot 1 and/or any right, title or interest that Seller hastherein or thereto (including, without limitation, the right to acquire the samepursuant to the Millenia Option Agreement) to a third party, or ( c) acquire fee title to Lot 1 without prior written notice to Buyer.
2.2 Grant of Exclusive Option to Purchase Lot 1. Seller and Buyer will negotiate an exclusive eighteen (18) month ("Lot 1 Option Period") option andright to purchaseall of Seller’s right, title and interest in and to Lot 1 (which shall mean and include for all purposes of this Section 2 all of Seller’s rights, title and interest with respectto Lot 1 under and pursuant to the Millenia Option Agreement) at a price to be agreed upon between the Parties during the Lot 1 Option Period asmore fully provided below, and on the following generalterms and conditions provided herein the " Lot 1 Purchase Option"). Buyer shall have the right to exercise the Lot 1 Purchase Option by delivering written notice thereof to Seller (the "Lot 1 Purchase Option Exercise Notice") at any time during the Lot 1 Option Period. In the event Buyer fails to timely deliver the Lot 1 PurchaseOption Exercise Notice during the Lot 1 Option Period, then Buyer shall be deemedto have waived the Lot 1 Purchase Option, the Lot 1 Purchase Option shall thereafter terminate and beof no further force or effect, and Buyer shall executeanddeliver suchreasonabledocumentation as is necessary to confirm such waiver. Notwithstanding anything herein to the contrary, the Lot 1 PurchaseOption shall immediately terminate and be of no further force or effect upon the upon the expiration of the Lot 1 Option Period if ( i) the Lot 1 Purchase Option Exercise Notice is not delivered by Buyer prior thereto, or (ii) the Partiesdo not agreeupon the form of the Development Agreement ( defined in Section 2.4 below) and/or enter into the Lot 1 Purchase Agreement ( defined in Section 2.3 below) during the Lot 1 Option Period.
2.3 Lot 1 Purchase Agreement and Terms; Lot 1 Due Diligence. Buyer and Seller shall use reasonableefforts to agreein writing upon the material terms and upon the actual form of a disposition and development agreement for all of Seller’s right, title and interest in and to Lot 1, including therein, or as a stand-alone document, the assignment of Seller’s rights, title and interest in and to the Millenia Option Agreement to Buyer as a “Permitted Assignee” under and in form satisfying the requirements of the Millenia Option Agreement ( collectively the " Lot 1 Docusign Envelope ID: B4878BD7- BD4B- 4506- BAAA- B11EEAE25811 4-
Purchase Agreement”) during the Lot 1 Option Period. The Lot 1 Purchase Agreement will address, without limitation, the following:
a. PurchasePrice. Buyer shall be responsiblefor directly paying the purchase price payable to Millenia Owner for Lot 1 under the Millenia Option Agreement. Buyer and Seller shall negotiateany additional the purchaseprice payable by Buyer to Seller for Lot 1 in good faith during the Lot 1 Option Period. Seller agrees to assign all of its right, title and interest in and to Lot 1 to Buyer pursuantto section 3.4 of the Lot 1 Agreement below market value in consideration for Buyer’ s significant investment in the Project and the public benefits that the Project will provide to the City and its residents (the “Lot 1 Purchase Price”). b. Lot 1 Purchase Agreement and Escrow. The Parties agree to execute the Lot 1 PurchaseAgreement for the purchaseof all of Seller’s right, title and interest in and to Lot 1 using First American Title Company, which also is the escrow agent under the Millenia Option Agreement, or any other mutually acceptable licensed escrow company (the " Escrow Agent") containing the following terms of sale: ( i) the assignment to Buyer as a “Permitted Assignee”, immediately effective upon theexecution of the Lot 1 PurchaseAgreement, of Seller’srights under the Millenia Option Agreement to acquire Lot 1, ( ii) the Parties shall open escrow for the Lot 1 PurchaseAgreement and Buyer shall exercise the option to purchase Lot 1 under the Millenia Option Agreement at the earlier of: a) five ( 5) business days following Buyer’ s delivery of the Lot 1 PurchaseOption ExerciseNotice, or b) upon full execution of the Lot 1 PurchaseAgreement; iii) escrow shall be for a period of not less than seventy- five ( 75) days and not more than one hundred five ( 105) days, as determined by Buyer pursuant to the terms of the Millenia Option Agreement; ( iv) the purchase price shall be paid by Buyer in cash or by wire- transfer upon the close of escrow (the "Lot 1 Option Closing"); ( v) concurrent with the Lot 1 Option Closing, the Escrow Agent shall provide and deliver to Buyer, an owner’s title insurance policy in the amount of the purchaseprice showing title in the condition approved by Buyer as the “Buyer” under and pursuant to the Millenia Option Agreement ( the " Title Insurance Policy"); ( vi) Buyer shall pay one-half of the escrow fee, recording fees, and notary fees payable under the Lot 1 Purchase Agreement and any amounts payable by the “Buyer” under the Millenia Option Agreement; ( vii) Seller shall pay one-half of the escrow fee payable under the Lot 1 PurchaseAgreement; (viii) all other escrow costs and charges payable under or with respect to the Lot 1 Purchase Agreement shall be borne one-half by Buyer and one-half by Seller; and (ix) the close of escrow under the Lot 1 Purchase Agreement shall be conditioned upon satisfaction of all of the conditions precedent to closing under the Millenia Option Agreement for the benefit of the “Buyer” thereunder, receipt of an estoppel certificate from Millenia Owner as to the then- current status and non- existence of a breach of the obligations of the owner of Lot 1 under the Millenia Option Agreement, and the occurrence of the closing thereunder. If Buyer timely elects the Lot 1 Purchase Option, then Seller agreesto take suchaction asis necessary, if any, to assignthe Millenia Option Agreement to Buyer as a permitted assignee thereunder.
c. Repurchaseand Assignment Option. Buyer and Seller shall agree, in the Lot 1 Purchase Agreement, upon a period of time during which Buyer shall be restricted from selling Lot 1 to a third party after the Lot 1 Option Closing ( the “Restricted Resale Period”).
During this period, City shall retain the right to repurchase the property for an amount not to exceed the Lot 1 PurchasePrice, or to assignsuch right to any individual or entity designatedby the City.
If any such sale, conveyance, or transfer occurs after the Restricted Resale Period but prior to the end of calendar year 2040, then within thirty ( 30) days after the consummation of such sale, Docusign Envelope ID: B4878BD7- BD4B- 4506- BAAA- B11EEAE25811 5-
conveyance, or transfer, Buyer shall pay to City a percentage of the gross proceeds received from such sale, conveyance, or transfer in accordancewith a schedule, to be agreed to in the Lot 1 PurchaseAgreement.
d. Due Diligence Period. Buyer shall have until 5:00 p.m. ( Pacific Time) on the datethat is the last day of the Lot 1 Option Period (the "Due Diligence Period") to review and approve or disapprove all matters relating to Lot 1. To the extent in Seller' s possession, Seller agreesto deliver to Buyer, within ten (10) businessdaysfollowing receipt of written requestfrom Buyer or promptly thereafter for new and additional information, all documents, written information and materials provided by Millenia Owner to Seller pursuant to the Millenia Option Agreement and all other material and relevant documents that would be binding upon Lot 1 after the Lot 1 Option Closing. Buyer shall be solely responsiblefor the cost of any Buyer inspections, investigations and studies.
e. Entry by Buyer. If requestedby Buyer, Seller shall request approval of Millenia Owner for Buyer and Buyer' s representatives, prior to the execution of the Lot 1 Purchase Agreement, to have a right of entry onto Lot 1 for the purpose of conducting inspections, investigations and studies, including, but not limited to, a Phase I environmental study. Buyer shall indemnify Seller and Millenia Owner from and against any and all liabilities arising out of such entry by Buyer or its representatives onto Lot 1 (except such indemnification shall not apply to Buyer's mere discovery of any pre-existing adversephysical condition at Lot 1 and Buyer shall not be liable for consequential, punitive or special damages), and Buyer further agrees to promptly restoreLot 1 substantially to its original condition at Buyer's sole cost and expense.
2.4 Development Agreement; Phase 2 Obligations. To the extent that these terms and provisions are not addressedin the Lot 1 PurchaseAgreement, Buyer and Seller shall use reasonable efforts to agree in writing upon the material terms and upon the actual form of a Development Agreement" during the Lot 1 Option Period and to be enteredinto by the Parties at the Lot 1 Option Closing. The obligations contemplated in this Section 2.4 shall be a condition precedent to the Lot 1 Purchase Agreement. The Development Agreement ( and/or the Lot 1 Purchase Agreement) will address, without limitation, the following with respect to Phase 2:
a. Buyer’s obligation to construct all onsite improvements for Phase2 on Lot 1 consistent with the " Phase 2 Project Description and Site Plan" attached hereto as Exhibit A". Buyer will be obligated to complete all such improvements at Buyer's sole expense, using materials and methods consistent with state-of- the- art production studios. Seller hereby approves the Phase2 Project Description and Site Plan. Buyer shall be allowed to make minor changesto the Phase 2 Project Description and Site Plan without further consent. Any major changes to the Phase2 Project Description (including any useof Phase2 that is not consistentwith the approved uses described therein) and Site Plan shall be approved by Seller in writing. b. Buyer will be responsiblefor the preparationandprocessingof construction plans and drawings and securing required permits for construction of Phase 2 required by the City to commenceconstruction of Phase2, suchthat, subject to force majeure delays, Buyer shall have such approvals as are required for Buyer to commence, and Buyer shall commence, construction of Phase 2 within six ( 6) months of the Lot 1 Option Closing (" Phase 2 Construction Commencement Date"), provided that Buyer shall have the right to extend the Phase 2 Construction CommencementDate for up to six (6) months provided the following requirements Docusign Envelope ID: B4878BD7- BD4B- 4506- BAAA- B11EEAE25811 6-
are met: ( i) Buyer notifies Seller of the extension no less than one hundred twenty ( 120) days prior to the originally- scheduledPhase2 Construction CommencementDate of its desireto exercisethe extension and (ii) Buyer has completed its final construction plans and is in plan check with the City prior to the originally- scheduled Phase 2 Construction Commencement Date. Buyer' s obligations within such six-month period will include, without limitation, the timely submission of all necessary construction documents, securing all necessary approvals, permits, and clearances for construction of Phase 2, and ensuring compliance with applicable local, state, and federal regulations. Buyer and Seller will coordinate with each other to ensure that all construction plans meet the requirements and specifications in accordancewith the terms of this LOI and Phase2 Project Description and Site Plan.
c. Subject to force majeure delays, Buyer shall be obligated to complete construction of Phase 2 within thirty- six ( 36) months of the commencement of the Phase 2 construction work (" Phase 2 Construction Completion Date"). The Development Agreement will include customary remedies in favor of Seller in the event that Buyer fails to commence construction of Phase2 on or before the Phase2 Construction Commencement Date and/or to complete construction of Phase 2 on or before the Phase 2 Construction Completion Date.
3. Phase 3 - Approximately 25,000 Square Foot and 42,000 Square Foot Parcels within Lot 1 at 1730 Millenia Avenue
3.1 Phase 3 Property. Phase3 is to be developed on approximately 25,000 square foot and 42,000 square foot portions of the remainder of Lot 1, adjacent to the Phase 2 Property Lot 1 exclusive of the Phase2 Property being referred to herein asthe "Phase 3 Property"), and as described or depicted on Exhibit " A" attached hereto. The Phase 2 Property and the Phase 3 Property each may be referred to herein individually as a “Property” or collectively as the Properties”.
3.2 Development Agreement Phase 3 Obligations. The obligations contemplated in this Section 3.2 shall be a condition precedent to the Lot 1 Purchase Agreement. The Development Agreement (and/or the Lot 1 PurchaseAgreement) will address, without limitation, the following with respect to Phase 3:
a. Buyer’s obligation to construct all onsite improvements for Phase3 on the Phase 3 Property consistent with the " Phase 3 Project Description and Site Plan" attached hereto as Exhibit " A". Buyer will be obligated to complete all such improvements at Buyer's sole expense, using materials and methods consistent with state-of- the- art production studios. Seller hereby approves the Phase3 Project Description and Site Plan. Buyer shall be allowed to make minor non- structural changes to the Phase 3 Project Description and Site Plan without further consent. Any other changesto the Phase3 Project Description and Site Plan shall be approvedby Seller in writing.
b. Buyer will be responsiblefor the preparationandprocessingof construction plans and drawings and securing required permits for construction of Phase 3 required by the City to commenceconstruction of Phase3, suchthat, subject to force majeure delays, Buyer shall have such approvals as are required for Buyer to commence, and Buyer shall commence, construction of Phase3 within sixty ( 60) months following completion of construction of Phase2 (" Phase 3 Construction Commencement Date"), provided that Buyer shall have the right to extend the Docusign Envelope ID: B4878BD7- BD4B- 4506- BAAA- B11EEAE25811 7-
Phase 3 Construction Commencement Date for up to six ( 6) months provided the following requirements are met: (i) Buyer notifies Seller of the extension no less than one hundred twenty 120) days prior to the originally- scheduled Phase3 Construction Commencement Date of its desire to exercise the extension and ( ii) Buyer has completed its final construction plans and is in plan check with the City prior to the originally- scheduledPhase3 Construction Commencement Date. Buyer' s obligations within such sixty- month period will include, without limitation, the timely submission of all necessaryconstruction documents, securing all necessaryapprovals, permits, and clearances for construction of Phase 3, and ensuring compliance with applicable local, state, and federal regulations. Buyer and Seller will coordinate with each other to ensurethat all construction plans meet the requirements and specifications in accordance with the terms of this LOI and Phase3 Project Description and Site Plan.
c. Subject to force majeure delays, Buyer shall be obligated to complete construction of Phase 3 within thirty- six ( 36) months of the commencement of the Phase 3 construction work (" Phase 3 Construction Completion Date"). The Development Agreement will include customary remedies in favor of Seller in the event that Buyer fails to commence construction of Phase 3 on or before the Phase 3 Construction Commencement Date and/or to complete construction of Phase3 on or before the Phase3 Construction Completion Date.
4. Brokerage Commissions. Buyer represents and warrants to Seller and Seller represents and warrants to Buyer, that no broker or finder hasbeenengagedby it, respectively, in connection with the transaction contemplated by the Purchase Agreement, or to its knowledge is in any way connectedwith such transaction In the event of any claims for such other brokers' or finders' fees or commissions in connection with the negotiation, execution or consummation of the Purchase Agreement, then Buyer shall protect, indemnify, saveharmlessand defend Seller from and against such claims if they shall be based upon any statement or representation or agreement by Buyer, and Seller shall protect, indemnify, saveharmless, and defend Buyer if such claims shall be based upon any statement, representation or agreement made by Seller.
5. Definitive Agreements.
5.1 Preparation. Promptly following Seller’s execution of this LOI, or upon Buyer’ s exerciseof any of the option rights discussedherein, Buyer shall causeits legal counselto prepare the initial draft of the Lot 1 Purchase Agreement, Development Agreement, and Lease (" Definitive Agreements").
5.2 Other Terms. Buyer and Seller acknowledge that the terms and conditions containedherein arenot exhaustivebut shall serveasthe basisfor the preparationof the Definitive Agreements, which shall contain such additional customary and market terms and conditions as agreedto between the Parties, including representationsand warranties, closing documents and conditions and default provisions.
6. Compliance with Laws. Compliance with all applicable federal, state, and local laws and regulations will be Buyer' s sole responsibility with respect to the Project. The Parties shall negotiate indemnities aspart of the negotiation of the Definitive Agreements.
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7. Tax Incentives. Buyer and Seller agree to use best efforts to jointly pursue and collaborate on promoting andsecuring available tax incentives within SanDiego County to support the Project and film product within the region.
8. Confidentiality. Each Buyer and Seller acknowledge that this LOI, along with all other communication and information related thereto (collectively, the "Confidential Information"), shall be kept strictly confidential and shall not be disclosed to any other party; provided, however, that each Buyer and Seller shall have the limited right to disclose Confidential Information i) pursuant to any law, regulation or similar legal process, and ( ii) as necessary, to its directors, officers, employees, financial institutions, existing or potential partners, legal counsel, consultants and advisors, provided such parties are obligated to maintain the confidentiality of such Confidential Information.
9. Ongoing Evaluation of Legal Restrictions. Implementation of this LOI is subject to all applicable laws and the Parties will continue to evaluate the impact of applicable laws to the transactions contemplated by this LOI and in the event such applicable laws limit, make impractical or unlawful any of the provisions contemplated by this LOI the Partieswill negotiate in good faith alternate terms. Any Definitive Agreement is intended to address the terms of this LOI in light of applicable legal requirements and restrictions.
10. Notices. All notices or other communications required or permitted hereunder shall be in writing, and shall be ( i) personally delivered ( including by means of professional messenger service or reputable air express service utilizing receipts) or ( ii) sent by email ( provided that if sent by email, a copy of such notice is sent pursuant to clause (i) above within one (1) Business Day thereafter). Notices shall be deemed delivered upon the date of receipt thereof if received prior to 5:00 p.m. Pacific time, and if not so received, shall be deemed received upon the following Business Day. Refusal of notice shall be deemed delivery.
To Buyer: Chula Vista Entertainment Complex, LLC
9936 Scripps Westview Way, # 255
SanDiego, California 92131
Attn: Aaron David Roberts, CEO
Email: [email protected]
and: Crosbie Gliner Schiffman Southard & Swanson LLP
12750 High Bluff Drive, Suite 250
San Diego, California 92130
Attn: Tom Crosbie
Email: tcrosbie@cgs3. com
To Seller: City Manager
City of Chula Vista
276 Fourth Avenue
Chula Vista, California 91910
Email: CityManager@chulavistaca. gov
and: City Attorney
City of Chula Vista
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276 Fourth Avenue
Chula Vista, California 91910
Email: [email protected]
Notice of change of address shall be given by written notice in the manner detailed in this Section
12. 11. Miscellaneous. This LOI:
11.1 Contains all of the terms agreedupon betweenthe Partiesheretowith respectto the proposed Project, and all prior agreements, understandings, representations and statements, oral or written, betweenthe Partieshereto are merged into this LOI;
11.2 May not be modified, amended, or terminated, nor any of its provisions be waived, except in writing and signedby eachof the Partiesheretoor their respectivesuccessorsor assigns;
11.3 May be executed in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the sameagreement, and may be executedby a party's signature transmitted electronically, which shall have the same force and effect as copies hereof executedand delivered with original wet signatures;
11.4 May be held to be invalid, or any provision thereof to be invalid, by any court of competentjurisdiction, but the invalidity of suchprovision shall not affect the validity of any other provisions hereof and all of such other provisions shall continue unimpaired in full force and effect;
11.5 Shall be governed by and construed in accordancewith the laws of the State of California without regard to its conflicts of laws provisions; and
11.6 In the event of any dispute hereunder, or of any action to interpret or enforce this LOI, any provision hereof or any matter arising herefrom, the prevailing party shall be entitled to recover its reasonablecosts, feesand expenses, including, but not limited to, reasonableattorneys’ fees, witness fees, expert fees and other professional fees, costs and expenses, whether suit be brought or not, and whether in settlement, in any declaratory action, in any bankruptcy action, at trial or on appeal.
If the foregoing terms and conditions are state your understandingof the terms on which we will proceed with negotiations for the preparation of the definitive agreements, please execute and return a fully executedcopy of this LOI to my attention. As noted above, this LOI is not intended to be contractually binding on either party. It will act merely as a basis to proceed with further Docusign Envelope ID: B4878BD7- BD4B- 4506- BAAA- B11EEAE25811 10-
negotiations. This offer shall expire at 5:00 p.m. ( Pacific Time) on January 31, 2025. We very much appreciatethe opportunity to work together on bringing this Project to life.
Very truly yours,
CHULA VISTA ENTERTAINMENT COMPLEX,
LLC, a California limited liability company
By:
Name: Aaron David Roberts
Title: Chief Executive Officer
AGREED AND ACCEPTED:
This 3rd day of December, 2024
SELLER"
CITY OF CHULA VISTA
By:
Name: John McCann
Title: Mayor
ATTEST
Name: Kerry K. Bigelow, MMC
Title: City Clerk
APPROVED AS TO FORM
By:
Name: Marco A. Verdugo
Title: City Attorney
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EXHIBIT " A"
Project Description and Site Plan
Phase 1 Project Description and Site Plan: 1775 Millenia Avenue, Floors 3 and 4. Creative Co-Work & State of the Art Production Offices
Buyer to overseetenant improvements to build out the coworking space, professional-standard video editing bays and SFX facilities, audio post- production studios, and associated office spaces on floors 3 and 4.
Phase 2 Project Description and Site Plan: 1730 Millenia Avenue ( CVEC Studios 1-3) The total footprint of Phase2 is roughly 4.96 acresof the 8.64 acreson Lot B.
Construction of a standalone 89,600 square foot virtual production studio campus, housing three virtual production studios and a warehouse, including soundproofing, and installation of specializedvideo production technology. Intend to break ground between Q2 2025 and Q1 2026.
Development of loading docks for commercial vehicles/tour buses/semi-trucks etc. with a dedicatedloading roll- up door for eachstudio and the warehouse.
Installation of fiber optic business line internet throughout the complex along with a server room and any other communications equipment.
Implementation of sustainable technologies such as solar power generation, water recycling systems, and energy managementsystems.
Parking Lot or Parking Garage construction for between 150 and 600 vehicles on between 50,000- 60,000 square feet, depending on site plans.
Phase 3 Project Description and Site Plan: Commercial Development at 1730 Millenia Avenue ( proposed)
Development of two different lots of ~ 25,000 square feet and ~42,000 square feet respectively surrounding the initial CVEC building on the 8.64- acre Lot B.
The spacescould be usedto build exclusive film/ arts/entertainment-themedcommercial, retail, or hotel space or to build a multi- purpose space combining all three.
If a parking garageis not constructedin Phase2 and more parking is needed, one of the two lots could become additional parking.
Alternatively, depending on the demandof CVEC Studios 1-3, one of the two lots could be used to construct more virtual production stages instead of multi- use commercial space.
EXHIBIT “ A”
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EXHIBIT “ A”
Docusign Envelope ID: B4878BD7- BD4B- 4506- BAAA- B11EEAE25811