Covina City Council
October 21, 2025

EXHIBIT C

PERFORMANCE BOND
KNOW ALL PERSONS BY THESE PRESENTS that:

WHEREAS the City of Covina (“City”), has awarded to -
_______________________________________________. (“Principal”) (Name and address of Contractor)
a contract (the “Contract”) for the Work described as follows:
401 N. Citrus Avenue Tenant Improvements
(Project Description/ Name)
WHEREAS, Principal is required under the terms of the Contract to furnish a Bond for the faithful performance of the Contract.

NOW, THEREFORE, we, the undersigned Principal, and

(Name and address of Surety)
(“Surety”) a duly admitted surety insurer under the laws of the State of California, as Surety, are held and firmly bound unto the City in the penal sum of Dollars ($ ), this
amount being not less than the total Contract Price, in lawful money of the United States of America, for the payment of which sum well and truly to be made, we bind ourselves, our heirs, successors executors and administrators, jointly and severally, firmly by these presents.

THE CONDITION OF THIS OBLIGATION IS SUCH THAT, if the hereby bounded Principal, his, her or its heirs, executors, administrators, successors or assigns, shall in all things stand to and abide by, and well and truly keep and perform the covenants, conditions and provisions in the Contract and any alteration thereof made as therein provided, on the Principal’s part, to be kept and performed at the time and in the manner therein specified, and in all respects according to their true intent and meaning, and shall indemnify and save harmless the City, its officers, agents and employees, as therein stipulated, then this obligation shall become null and void; otherwise, it shall be and remain in full force and effect.

As a part of the obligation secured hereby and in addition to the face amount specified therefor, there shall be included costs and reasonable expenses and fees, including reasonable attorneys’ fees, incurred by City in successfully enforcing such obligation, all to be taxed as costs and included in any judgment rendered. Surety hereby waives any statute of limitations as it applies to an action on this Bond.

The Surety hereby stipulates and agrees that no change, extension of time, alteration or addition to the terms of the Contract or of the Work to be performed thereunder or the specifications

accompanying the same shall in anywise affect its obligations under this Bond, and it does hereby waive notice of any such change, extension of time, alteration or addition to the terms of the Contract or to the Work or to the specifications. Surety hereby waives the provisions of California Civil Code Sections 2845 and 2849. The City is the principal beneficiary of this Bond and has all rights of a party hereto.

IN WITNESS WHEREOF, two (2) identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Principal and Surety, on the date set forth below, the name of each corporate party being hereto affixed and these presents duly signed by its undersigned representative(s) pursuant to authority of its governing body.

Dated:
“Principal”
By:

Its
By:

Its
(Seal)

“Surety”
By:

Its
By:

Its
(Seal)
Note: This Bond must be executed in duplicate and dated, all signatures must be notarized, and evidence of the authority of any person signing as attorney-in-fact must be attached. DATE OF BOND MUST NOT BE BEFORE DATE OF CONTRACT. IF CONTRACTOR IS A PARTNERSHIP, ALL PARTNERS MUST EXECUTE BOND. DATE OF BOND MUST NOT BE PRIOR TO DATE OF CONTRACT. Surety companies executing Bonds must appear on the Treasury Department’s most current list (Circular 570 as amended) and be authorized to transact business in the State where the project is located.

EXHIBIT D

PAYMENT BOND
(LABOR AND MATERIALS)
KNOW ALL PERSONS BY THESE PRESENTS that:

WHEREAS the City of Covina (“City”), State of California, has awarded to (“Principal”)
(Name and address of Contractor)
a contract (the “Contract”) for the Work described as follows:
401 N. Citrus Avenue Tenant Improvements
(Project Description/Name)
WHEREAS, under the terms of the Contract, the Principal is required before entering upon the performance of the Work, to file a good and sufficient payment Bond with the City to secure the claims to which reference is made in Title 3 (commencing with Section 9000) of Part 6 of Division 4 of the Civil Code.

NOW, THEREFORE, we, the undersigned Principal, and

(Name and address of Surety)
(“Surety”) a duly admitted surety insurer under the laws of the State of California, as Surety, are held and firmly bound unto the City and all contractors, subcontractors, laborers, material suppliers, and other persons employed in the performance of the Contract and referred to in Title 3 (commencing with Section 9000) of Part 6 of Division 4 of the Civil Code in the penal sum of Dollars
($ ), for materials furnished or labor thereon of any kind, or for amounts due under the Unemployment Insurance Act with respect to this Work or labor, that the Surety will pay the same in an amount not exceeding the amount hereinabove set forth, and also in case suit is brought upon this Bond, will pay, in addition to the face amount thereof, costs and reasonable expenses and fees, including reasonable attorneys’ fees, incurred by City in successfully enforcing this obligation, to be awarded and fixed by the court, and to be taxed as costs and to be included in the judgment therein rendered.

It is hereby expressly stipulated and agreed that this Bond shall inure to the benefit of any and all persons, companies, and corporations entitled to file claims under Title 3 (commencing with Section 9000) of Part 6 of Division 4 of the Civil Code, so as to give a right of action to them or their assigns in any suit brought upon this Bond.

Upon expiration of the time within which the California Labor Commissioner may serve a civil wage and penalty assessment against the principal, any of its subcontractors, or both the principal and its subcontractors pursuant to Labor Code Section 1741, and upon expiration of the time within which a joint labor management committee may commence an action against the principal, any of its subcontractors, or both the principal and its subcontractors pursuant to Labor Code Section

1771.2, if the condition of this Bond be fully performed, then this obligation shall become null and void, otherwise it shall be and remain in full force and effect.

The Surety hereby stipulates and agrees that no change, extension of time, alteration, or addition to the terms of the Contract or the Specifications accompanying the same shall in any manner affect its obligations on this Bond, and it does hereby waive notice of any such change, extension, alteration or addition.

IN WITNESS WHEREOF, two (2) identical counterparts of this instrument, each of which shall for all purposes be deemed an original hereof, have been duly executed by Principal and Surety, on the date set forth below, the name of each corporate party being hereto affixed and these presents duly signed by its undersigned representative(s) pursuant to authority of its governing body.

Dated:
“Principal”
By:

Its
By:

Its
(Seal)

“Surety”
By:

Its
By:

Its
(Seal)

Note: This Bond must be executed in duplicate and dated, all signatures must be notarized, and evidence of the authority of any person signing as attorney-in-fact must be attached. DATE OF BOND MUST NOT BE BEFORE DATE OF CONTRACT. IF CONTRACTOR IS A PARTNERSHIP, ALL PARTNERS MUST EXECUTE BOND. DATE OF BOND MUST NOT BE PRIOR TO DATE OF CONTRACT. Surety companies executing Bonds must appear on the Treasury Department’s most current list (Circular 570 as amended) and be authorized to transact business in the State where the project is located.

1 12923/0001/1924106-1

FIRST AMENDMENT TO AGREEMENT BETWEEN THE CITY OF COVINA AND SITEREP CONSTRUCTION SERVICES, INC.
401 N. CITRUS AVENUE
THIS FIRST AMENDMENT is made and entered into as of October 21, 2025 by and between the City of Covina, a California municipal corporation (hereinafter referred to as “City”), and SiteRep Construction Services, Inc., a California corporation (hereinafter referred to as "Consultant"). In consideration of the mutual covenants and conditions set forth herein, the parties agree as follows:

1. This FIRST Amendment is made with the respect to the following facts and purposes:
a. On February 20, 2024 the City and Consultant entered into that certain Minor Construction Agreement for tenant improvements in the amount of One Hundred Eighty Thousand Dollars ($180,000).
b. The parties now desire to add additional work to the scope and thus increase the total compensation in the amount of Thirty-Nine Thousand Six Hundred Thirty-One Dollars ($39,631), and to extend the term of the agreement to June 30, 2026, for a new total agreement amount not to exceed Two Hundred Nineteen Thousand Six Hundred Thirty-One Dollars ($219,631) and to amend the Agreement as set forth in this Amendment.

2. Section 1 of the Agreement entitled “TERM OF AGREEMENT” is hereby amended to read as follows:
“The term of this Agreement shall be from the Effective Date through June 30, 2026, unless sooner terminated as provided in Section 14 of this Agreement. The City may, upon mutual agreement, extend the contract for one (1) additional one-year term. In no event shall the contract be extended beyond June 30, 2027.

3. Paragraph A of Section 2 of the Agreement entitled “COMPENSATION” is hereby amended to read as follows:

A. Compensation. For the Work described in Section 3 of this Agreement, Contractor shall receive the sum not to exceed Two Hundred Nineteen Thousand Six Hundred Thirty-One Dollars ($219,631) payable in accordance with the Schedule of Payments, attached hereto and incorporated herein as Exhibit A (Scope of Work). Any terms other than a description of the work to be performed and costs of the work contained in Exhibit A is null and void and not a part of this Agreement.

4. Except for the changes specifically set forth herein, all other terms and conditions of the Agreement shall remain in full force and effect.

ATTACHMENT B

2 12923/0001/1924106-1
The parties, through their duly authorized representatives, are signing this FIRST Amendment on the date stated in the introductory clause.

City:

City of Covina,
a California municipal corporation
By:

Name: Chris Marcarello
Title: City Manager
ATTEST:

By:

Name: Fabian Velez
Title: Chief Deputy City Clerk
Consultant:

SiteRep Construction Services, Inc.
a California corporation
By:

Name: Andre Ortiz
Title: President
(Two signatures of corporate officers required
for corporations under Corporations Code
Section 313, unless corporate documents
authorize only one person to sign this
Agreement on behalf of the corporation.)

3 12923/0001/1924106-1

ATTACHMENT A
Attached hereto and incorporated herein is the additional scope of work and associated cost as provided by the Consultant.

September 24, 2025
City of Covina
Brian Lee
125 East College St.

Covina, CA 91723
RE: 401 Citrus CO #1
Dear Mr. Lee,
Per your request, please see attached CO #1 for the 401 Citrus Ave. Project. It includes the changes to the plans from the original contract (mostly added electrical scope) as well as the additional concrete polishing and carpet tiles. I broke out the polished concrete per area so that you can decide if you want to do each area independently from the others.

Plan Revisions:

Scope Deletion Credit: -$20,196.41
Electrical Scope Add: $54,462.80
SUB TOTAL: $34,266.39
Polished Concrete Floor Additions:

SUB TOTAL: $4,474.80
Carpet Tiles in Elevator Lobby: 75 SF @11.86/SF = $889.50 SUB TOTAL: $889.50
TOTAL CHANGE ORDER: $39,630.69
Thank you for your consideration.

Sincerely,
Andre Ortiz
President
Siterep Construction Services, Inc.

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 16
Meeting: October 21, 2025
Title: Confirm and Approve City Council’s Revisions to Various Boards and Commissions Appointments
Presented by: Chris Marcarello, City Manager
Fabian Velez, Chief Deputy City Clerk
Recommendation: Approve the City Council’s appointments to various boards and commissions.

EXECUTIVE SUMMARY:

Public involvement is crucial to the City’s decision-making process, and appointed advisory bodies are an important and valued part of City government. There are particular areas of decision-making which benefit from the advice and counsel of qualified residents. By advising the City Council and staff, bringing new ideas to the table, and representing all of the diverse elements of our community, advisory bodies assist the City Council in making the best, most informed decisions possible, for the benefit of the entire Covina community. The Covina Municipal Code provides for the establishment of advisory bodies including commissions, committees, and boards to advise the City Council and provide ongoing citizen input into policies and issues affecting the Covina community.

DISCUSSION:

Appointed members of boards and commissions are appointed by and serve at the pleasure of the City Council, pursuant to Government Code Section 36506. The City Council shall have the authority to appoint, reappoint, and/or make changes to existing positions.

The following actions are being considered for approval:
 Mayor Linares: Appointment of Jessie Castro to the Finance Advisory Commission for an unexpired 4- year term ending June 30, 2026.
 Councilmember Cortez: Appointment of M’Lee Munoz to the Library Board of Trustees for an unexpired 3-year term ending June 30, 2027.

FISCAL IMPACT:

None.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not applicable.

Respectfully submitted,

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 17
Meeting: October 21, 2025
Title: Authorization to Establish an Account Clerk I/II Position to Enhance Operational Efficiency Within the Water Utility Billing Department
Presented by: Theresa Franke, Director of Finance
Charles Russom, Sr. Management Analyst
Recommendation: That the City Council authorize the addition of an Account Clerk I/II classification in the Finance Department for water utility billing customer service functions.

EXECUTIVE SUMMARY:

Following the abrupt closure of the City’s former third-party water billing provider in 2019, the City transitioned to a hybrid utility billing model that combines in-house staff resources and third-party service providers. As part of this model, the City utilizes a utility billing provider to provide electronic billing services/online customer portal, a utility meter reading provider to track consumption/transmit data for billing purposes and three (3) inhouse full-time team members to provide customer service functions and manage in-person payments/paper billing services. Over time, service demands have increased and the City has recently relied on temporary staffing resources to provide ongoing support for customer service needs. Based on this ongoing need, it is recommended that the City Council consider authorizing the addition of an Account Clerk I/II classification to assist with these functions, thereby reducing the need for temporary staffing support.

DISCUSSION:

Historically, water utility billing services in the City were managed entirely by a third-party water billing provider that handled all customer service, automated meter reading, billing and collection services for the City’s water utility. In 2019, the former third-party utility billing provider – Fathom Water Billing – abruptly announced its bankruptcy and shuttered operations. Following this announcement, the City quickly transitioned to a hybrid utility billing model that combines in-house staff resources and third-party consultants as follows:
 Electronic Billing (online customer portal, online billing statement processing, online payment processing, backend meter reading interface with water meters to create customer bills) is managed by a third-party provider, AVR Utility Billing.
 Automated Meter Reading (water meter maintenance, electronic reading of water meters, back-end platform to store/transfer water meter data) is managed by a third-party provider, Aclara Technology.  Customer Service Functions (account administration, in-person payments, service questions) are managed inhouse, by the City’s Department of Finance.

Over the last three months, the City has begun to experience difficulties with the electronic billing functions that are handled by AVR Utility Billing. As such, a Request for Proposals is being developed to identify alternatives for future services and recommendations will be presented for the Council’s further consideration in winter 2026.

Water Utility Customer Service Functions
The City’s Department of Finance (“Department”) utilizes three (3) full-time team members, a part-time team member and temporary staffing resources to support customer service for approximately 9,000 water utility customer accounts. Over time, the Department has increasingly relied on temporary staffing resources to meet customer demand, including phone and in-person requests for service, payment processing and administering

billing payment cycles. Based on this ongoing need, the Department has requested that the Council consider authorizing an additional Water Account Clerk I/II classification to minimize the need for temporary staff resources. This request is cost neutral, funded entirely by the City’s Water Fund and will provide a more reliable staffing structure to provide frontline customer assistance.

FISCAL IMPACT:

There is no impact to the General Fund. The proposed Account Clerk I/II position will be funded entirely from the Water Utility Fund (Fund 6010-0500). The department has analyzed its existing budget allocations and determined that this expansion can be accommodated within the current fiscal year 2025-2026 budget.

Respectfully submitted,

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 18
Meeting: October 21, 2025
Title: Approval of Part-Time Salary Range Adjustments Subject to Minimum Wage and Revised Paid Sick Leave Policy for Part-Time Employees
Presented by: Joanna Espinosa, Human Resources Manager
Recommendation: Approve salary range adjustments for classifications affected by the State mandated minimum wage increases effective January 1, 2026, as per Labor Code Section 1182.12(c)(3)(A).

EXECUTIVE SUMMARY:

California law mandates that the minimum wage be increased when certain inflation-related events occur.

Specifically, California Labor Code section 1182.12 delegates authority to California’s Director of Finance to annually determine and certify to the Governor and State Legislature whether an adjustment to the minimum wage is appropriate. On August 1, 2025, the Director of Finance published a letter stating it was necessary for the minimum wage to rise by 2.49% to account for an inflation adjustment effective January 1, 2026. Accordingly, the new minimum wage in the State of California will be $16.90 per hour effective January 1, 2026.

The City Council will consider authorizing wage adjustments for certain classifications impacted by these mandates, effective January 1, 2026 (per Labor Code section 1182.12(c)(3)(A)). Additionally, these changes will impact salaries for other part-time classifications in related job families. As a result, it is requested that the City Council authorize salary adjustments to the other job classifications in the related job families to avoid salary compaction issues.

Human Resources is requesting City Council approval to increase the minimum wage for affected City job classifications as of January 1, 2026, as per Labor Code section 1182.12(c)(3)(A) and provide authority going forward to the City Manager to increase the minimum wage as necessary when mandated by law. The new minimum wage increase affects salaries for part-time positions that are currently under $16.90 per hour and also salaries for part-time positions in an identified job family that will be affected by compaction issues when the new minimum wage amount is implemented.

BACKGROUND:

On December 17, 2024, City Council approved a minimum wage salary adjustment to $16.50 an hour as per Labor Code section 1182.12(c)(3)(A), effective January 1, 2025, which was based on the annual inflation rate from July 1, 2023, through June 30, 2024.

This year, the state’s Department of Finance calculated that an adjustment of 2.49% to $16.90 per hour must be implemented by January 1, 2026. Increases to California’s minimum wage are expected to continue each calendar year based on the inflation rate of the U.S. Consumer Price Index (CPI), under Labor Code section 1182.12 or other legislation. The revised Part-Time Salary Schedule is included as Exhibit A.

DISCUSSION:

The City has seven (7) part time job classifications subject to the 2026 minimum wage increase, wherein Step One of the respective salary range is currently below $16.90 per hour. Step One of the classifications of Administrative Intern, Community Resources Aide, Custodian, Engineering Intern, Library Page Shelver, Police

Cadet, and Student Aide is currently at $16.50 per hour. The proposed new ranges for the salary steps for these classifications to meet the State’s new minimum wage increase as of January 1, 2026 are as follows:

Classification Salary Steps
1 2 3 4 5
Administrative
Intern $16.90 $17.75 $18.63 $19.56 $20.54
Community
Resources Aide ‘’ ‘’ ‘’ ‘’ ‘’
Custodian ‘’ ‘’ ‘’ ‘’ ‘’
Engineering
Intern ‘’ ‘’ ‘’ ‘’ ‘’
Library Page
Shelver ‘’ ‘’ ‘’ ‘’ ‘’
Police Cadet ‘’ ‘’ ‘’ ‘’ ‘’
Student Aide ‘’ ‘’ ‘’ ‘’ ‘’
Additionally, the City has four (4) other part-time classifications within the same job family that will be affected by these increases, causing a salary compaction issue: Community Resources Assistant I (Step 1 is currently $17.33), Community Resources Assistant II (Step 1 is currently $18.19), Community Resources Specialist (Step 1 is currently $20.40), Library Clerk (Step 1 is currently $17.57). In order to provide a consistent salary variance between classifications within this same job family, staff recommends that the following the salary ranges be adjusted:

Classification Salary Steps
1 2 3 4 5
Community
Resources
Assistant I
$17.75 $18.63 $19.56 $20.54 $21.57
Community
Resources
Assistant II $18.63 $19.56 $20.54 $21.57 $22.65
Community
Resources
Specialist
$20.81 $21.85 $22.94 $24.09 $25.29
Library Clerk $18.00 $18.90 $19.84 $20.84 $21.88
Similarly, the Reserve Police Officer classification was analyzed and a compensation survey was completed to ensure that the compensation remains competitive and in alignment with the market. The existing pay rate of $20.00 per hour has remained unchanged for over a decade, despite Reserve Police Officers performing essential law enforcement duties similar to those of full-time officers – without the benefits and incentives afforded to fulltime personnel. In order to be within the 60th percentile of the market, recognize the critical contributions of

Reserve Officer, reduce overtime costs, improve recruitment and retention, and to remain competitive, staff recommends creating the new following salary ranges:

Classification Salary Steps
1 2 3 4 5
Reserve Police
Officer I $44.25 $46.46 $48.79 $51.22 $53.79
Reserve Police
Officer II/III $40.00 $42.00 $44.10 $46.31 $48.62
FISCAL IMPACT:

The proposed wage adjustments will directly impact six (6) budgeted positions in the City. Additionally, fiftyfour (54) employees will be impacted due to salary compaction issues in related job families. Related expense increases are expected to be offset by staff vacancies and other budget savings.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not applicable.

Respectfully submitted,

CITY OF COVINA

PART-TIME SALARY SCHEDULE
EFFECTIVE JANUARY 1, 2026

DESCRIPTION STEP HOURLY
9040 ADMINISTRATIVE INTERN 1 $ 16.90
2 $ 17.75
3 $ 18.63
4 $ 19.56
5 $ 20.54
9054 BACKGROUND INVESTIGATOR 1 $ 27.47
2 $ 28.84
3 $ 30.29
4 $ 31.80
5 $ 33.39
9130 CITY RESOURCE SPECIALIST $ 25.00
-
$ 105.00
9090 COMMUNITY RESOURCES AIDE 1 $ 16.90
2 $ 17.75
3 $ 18.63
4 $ 19.56
5 $ 20.54
9100 COMMUNITY RESOURCES ASSISTANT I 1 $ 17.75
2 $ 18.63
3 $ 19.56
4 $ 20.54
5 $ 21.57
9110 COMMUNITY RESOURCES ASSISTANT II 1 $ 18.63
2 $ 19.56
3 $ 20.54
4 $ 21.57
5 $ 22.65
9120 COMMUNITY RESOURCES SPECIALIST 1 $ 20.81
2 $ 21.85
3 $ 22.94
4 $ 24.09
5 $ 25.29
9355 CUSTODIAN 1 $ 16.90
2 $ 17.75
3 $ 18.63
4 $ 19.56
5 $ 20.54
9150 ENGINEERING INTERN 1 $ 16.90
2 $ 17.75
3 $ 18.63
4 $ 19.56
5 $ 20.54

ATTACHMENT A

CITY OF COVINA

PART-TIME SALARY SCHEDULE
EFFECTIVE JANUARY 1, 2026

DESCRIPTION STEP HOURLY
9180 LIBRARY CLERK 1 $ 18.00
2 $ 18.90
3 $ 19.84
4 $ 20.84
5 $ 21.88
9091 LIBRARY PAGE SHELVER 1 $ 16.90
2 $ 17.75
3 $ 18.63
4 $ 19.56
5 $ 20.54
9220 OVERNIGHT ENFORCEMENT OFFICER 1 $ 18.99
2 $ 19.94
3 $ 20.94
4 $ 21.98
5 $ 23.08
9230 PARK MAINTENANCE ASSISTANT 1 $ 17.42
2 $ 18.29
3 $ 19.21
4 $ 20.17
5 $ 21.18
9265 POLICE CADET 1 $ 16.90
2 $ 17.75
3 $ 18.63
4 $ 19.56
5 $ 20.54
9261 RESERVE POLICE OFFICER I 1 $ 44.25
2 $ 46.46
3 $ 48.79
4 $ 51.22
5 $ 53.79
9260 RESERVE POLICE OFFICER II/III 1 $ 40.00
2 $ 42.00
3 $ 44.10
4 $ 46.31
5 $ 48.62
9340 STUDENT AIDE 1 $ 16.90
2 $ 17.75
3 $ 18.63
4 $ 19.56
5 $ 20.54

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 19
Meeting: October 21, 2025
Title: Allocating Unallocated FY 25-26 Community Development Block Grant (CDBG) Funds to the "Residential Rehabilitation Program", “Downtown Neighborhood Business Workforce Augmentation Program”, and “Microenterprise Co-Work Scholarship Program”
Presented by: Brian K. Lee, AICP, Deputy City Manager/Director of Community Development Alice Leung, Management Analyst
Recommendation: 1. Adopt Resolution CC 2025-113, Authorizing and Increase to the FY 25-26 Community Development Block Grant for the "Residential Rehabilitation Program" Project D96164- 25, “Downtown Neighborhood Business Workforce Augmentation Program” Project 602621-25, and “Microenterprise Co-Work Scholarship Program” Project 602620-24, and Amending the FY 2025-2026 Community Development Budget to reflect these changes; and

2. Authorize the City Manager or his designee to execute documents related to the FY 2025-2026 CDBG funds.

EXECUTIVE SUMMARY:

In July 2023, the City entered into a three-year participation agreement with the Los Angeles County Development Authority (LACDA), effective July 1, 2024. This agreement will remain in effect through June 30, 2027. At that time, the City of Covina (City) was a municipality with a population below 50,000, and the City was ineligible to receive CDBG funding directly from United States Department of Housing and Urban Development (HUD). Instead, the City receives CDBG funds from LACDA through the Urban County Program.

Under this program, LACDA applies to HUD for CDBG funding, and then divides the funding amongst its subrecipients such as the City of Covina. The City’s CDBG funding is accounted for under the Community Development Department budget. All changes approved by the City Council are presented to the LACDA for approval and processing.

It is proposed that $271,394 of unallocated CDBG funds be allocated amongst three existing CDBG Projects, “Residential Rehabilitation”, “Downtown Neighborhood Business Workforce Augmentation Program”, and the “Microenterprise Co-Work Scholarship Program”. This change does not constitute a substantial amendment as the programs are existing and the funds are unallocated.

BACKGROUND:

On January 21, 2025, the Covina City Council approved the CDBG FY 25-26 program budget, as memorialized in Resolution CC 2025-06. At that time, the City was projected to receive $293,058 in New Year Funds for FY 25-26 for our annual HUD CDBG allocation. The final number allocated slightly increased to $296,629.

Currently, there is $271,394 in unallocated CDBG funding available. Should Council approve Staff's recommendations, these funds will be distributed among three existing CDBG Projects:
 Residential Rehabilitation Program (Project D96164-25)  Downtown Neighborhood Business Workforce Augmentation Program (Project 602621-25)  Microenterprise Co-Work Scholarship Program (Project 602620-24)

The Microenterprise Co-Work Scholarship Program was an approved allocation from FY 24-25 and is eligible to be carried over for up to three years. On September 16, 2025, the Covina City Council approved the carryover of unspent appropriation into FY 25-26.

DISCUSSION:

There are two general pools of CDBG funding which make up the available fund balance. Each year, the City is provided with New Year Funds from HUD via LACDA, as discussed above. These funds are programmed annually in January to be spent beginning July 1 of that same year. How this funding is spent must be determined in advance. Each year, however, it is common that some allocated funds go unspent for a variety of reasons. Since CDBG funding decisions are made annually, any allocated funds not spent in their programmed year are returned to our funding pool after the end of the fiscal year on June 30. These are referred to as “unallocated funds”.

There are exceptions to certain programs that may eligible to carryover and amendment for a three-year extension.

The Microenterprise Co-Work Scholarship Program was eligible for the extension and was amended for a threeyear extension. However, other programs, such as the Residential Rehabilitation Program, are not eligible for this action. Therefore, unspent FY 24-25 CDBG funds previously allocated to this program have been returned to the unallocated CDBG fund. Unallocated CDBG funds must be programmed within the same fiscal year in which they will be spent. That is why we are requesting to allocate these unallocated funds to existing projects as an amendment to the CDBG annual budget.

The Residential Rehabilitation Program provides up to $30,000 as a grant-loan combination to eligible homeowners and up to $8,000 in grants to eligible mobile-home owners for necessary home repairs, such as roof replacement and plumbing repairs. The grant-loan amount has remained at $30,000 since 2009. Since that time, the costs of building materials have increased. Staff is presenting as a separate item on tonight’s Council agenda to increase the current loan amount by $10,000, for total allowable grant-loan combination of $40,000. Cosmetic upgrades are not eligible for this program. The demand for this program is high. As it stands, there is enough funding to assist one family with one small project. If increasing the grant-loan amount to $40,000 is approved tonight by Council on a separate agenda, the addition of $101,394 to the program budget can assist three additional single-family homes this fiscal year.

The Microenterprise Co-Work Scholarship Program is program that was allocated in FY 24-25 and was amended for a three-year extension. This program will assist low- to moderate-income Covina residents who are seeking an entrepreneurial opportunity to develop their own business or need the support and proper work environment to do their work by funding a one-year membership for access to the City-controlled co-working facility. This program will be overseen by City of Covina staff through the Community Development Department, Special Projects Division. This project will be able to fund additional scholarships with the addition of $70,000 in unallocated funding. The exact scholarship amount and guidelines have not yet been developed, but will be brought to the Council for review when available.

The Downtown Neighborhood Business Workforce Augmentation Program is a continuing program which assists businesses within the Town Center Specific Plan (TCSP) in creating jobs for those who are low-and moderateincome. This program also assists eligible businesses by offset staffing costs of these hires by providing a forgivable loan. The loans will be forgiven after one year of successfully hiring a full-time equivalent employee(s) from a low to moderate income household. This program is run by City of Covina staff through the Community Development Department, Special Projects Division. Due to the growth in new businesses within the City, allocating an additional $100,000 in unallocated funds to this program will allow four more businesses to receive grants.

The table below shows the funding allocated with FY 25-26 New Year Funds, the unallocated funding amount being requested to add to each project, and the proposed total budgets for each program.

Project Name Approved Funds Requested
Unallocated Funding
Proposed Program
Budget
Residential Rehabilitation .Program
Project D96164-25
$23,412 $101,394 $124,806
Downtown Neighborhood Business
Workforce Augmentation Program
Project 602621-25
$50,000 $100,000 $150,000
Microenterprise Co-Work
Scholarship Program
Project 602620-24
$10,000 $70,000 $80,000
FISCAL IMPACT:
$271,394 in unallocated CDBG funds is available for programming under fund 2100, as detailed in attached Resolution CC 2025-113. This action does not impact the General Fund.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not applicable.

Respectfully submitted,

ATTACHMENT A
RESOLUTION CC 2025-113

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, AUTHORIZING AN INCREASE TO THE FY 2025-2026

COMMUNITY DEVELOPMENT BLOCK GRANT RESIDENTIAL
REHABILITATION PROGRAM, PROJECT D96164-25, THE

DOWNTOWN NEIGHBORHOOD BUSINESS WORKFORCE
AUGMENTATION PROGRAM, PROJECT 602621-25, AND
MICROENTERPRISE CO-WORK SCHOLARSHIP PROGRAM 602620-24

AND AMENDING THE COMMUNITY DEVELOPMENT BUDGET FOR
FISCAL YEAR 2025-2026
WHEREAS, the Community Development Block Grant (CDBG) Program has operated since 1974 to provide local governments with the resources necessary to meet the needs of persons of low-and moderate-income; and
WHEREAS, the City of Covina contracts with the Los Angeles County Development Authority (LACDA) for the disbursement of Community Development Block Grant Funds, through the Urban County Program; and
WHEREAS, the budget for the City of Covina for fiscal year commending July 1, 2025, and ending June 30, 2026, was approved on May 6, 2025; and WHEREAS, the approved budget is in accordance with all applicable ordinances of the City and all applicable statutes of the State; and
WHEREAS, the allocation of the appropriations between departmental activities may be made by the City Manager and amendments (increases/decreases) to the adopted budget shall be by approval and Resolution of the City Council; and
WHEREAS, the City of Covina wishes to allocate $271,394 of unallocated funding to three existing programs; Project D96164-25 - Residential Rehabilitation, Project 602621-25 - Downtown Neighborhood Business Workforce Augmentation Program, and Project 602620-24 Microenterprise Co-Work Scholarship Program.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. The City Council approves an increase to Project D96164-25, “Residential Rehabilitation” in the amount of $101,394, an increase to Project 602621-25, “Downtown Neighborhood Business Workforce Augmentation Program” in the amount of $100,000, and an increase to Project 602620-24, “Microenterprise Co-Work Scholarship Program” in the amount of $70,000 and instructs staff to submit the necessary documentation to the Los Angeles County Development Authority.

SECTION 2. The City Council authorizes City staff to amend the FY 2025-2026 City of Covina operating budget and establish and amend the necessary accounts as follows:

Resolution CC 2025-113
Account
Number
Description Project Name Original
Budget
Increase/
Decrease
Amended
Amount
2100-4850-
42050-85000
Intergovernmental/
CDBG
Residential
Rehabilitation
$23,412 Increase
$101,394
$124,806
2100-4850-
53750-85000
Grant Award Residential
Rehabilitation
$10,000 Increase
$28,000
$38,000
2100-4850-
53760-85000
Loan Award Residential
Rehabilitation
$13,412 Increase
$73,394
$86,806
2100-4750-
42050-20298
Intergovernmental/
CDBG
Downtown
Neighborhood
Business Workforce
Augmentation
Program
$50,000 Increase
$100,000
$150,000
2100-4750-
53750-20298
Grant Award Downtown
Neighborhood
Business Workforce
Augmentation
Program
$50,000 Increase
$100,000
$150,000
2100-4750-
42050-23620
Intergovernmental/
CDBG
Microenterprise CoWork Scholarship
Program
$10,000 Increase
$70,000
$80,000
02100-4750-
53750-23620
Grant Award Microenterprise CoWork Scholarship
Program
$10,000 Increase
$70,000
$80,000
SECTION 3. The City Manager or his designee is authorized to execute documents related to the Fiscal Year 2025-2026 CDBG program.

SECTION 4. The City Clerk shall certify to the passage and adoption of this resolution and shall enter the same in the Book of Original Resolutions.

APPROVED and PASSED this 21st day of October, 2025.

City of Covina, California
BY:

VICTOR LINARES, Mayor

Resolution CC 2025-113
ATTEST:

FABIAN VELEZ, Chief Deputy City Clerk

CERTIFICATION
I, Fabian Velez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2025-113 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 21st day of October 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
_______________________________________
FABIAN VELEZ, Chief Deputy City Clerk

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. CC 20
Meeting: October 21, 2025
Title: Second Amendment to the Exchange Agreement between Bently Real Estate, LLC and the City of Covina for the Exchange of City Right-of-Way and for the Lease of 401 N. Citrus Avenue
Presented by: Brian K. Lee, AICP, Deputy City Manager/Director of Community Development Recommendation: Authorize the City Manager to execute a Second Amendment to the Exchange Agreement and make any minor, non-substantive changes to the amendment as needed prior to execution.

BACKGROUND/EXECUTIVE SUMMARY:

On June 16, 2020, the City Council approved a mixed-use project located on the former Clippinger Chevrolet dealership site on the northwest corner of San Bernardino Road and Citrus Avenue. The project will consist of the development of 105 residential “flats”, approximately 15,000 square feet of commercial space, 56 townhomes, and garage parking for 434 vehicles. The approved project also included the incorporation of approximately 416.9 lineal feet of the Geneva Place right-of-way (between 3rd Street and west of Citrus Avenue) into the mixed-use project as open space.

On April 19, 2022, the City Council approved an exchange agreement (Attachment A) with Bently Real Estate to secure an eight (8) year, five (5) month lease for the subject property. In exchange, Bently Real Estate will receive approximately 416.9 lineal feet of Geneva Place for use as a part of a larger mixed-use development project (with adjacent properties).

On August 1, 2023, the City Council approved a Management Agreement between the City and FoundrSpace LLC for their operation of a co-working facility within the subject property. At the end of the lease term, FoundrSpace will have the option to continue leasing the space directly from the property owner.

On September 5, 2023, the City Council approved a First Amendment to the Agreement (Attachment B), which added language to the Agreement which had been inadvertently left out of the original and extended the closing date of the exchange agreement to February 29, 2024.

A proposed Second Amendment to the Exchange Agreement (Attachment C) establishes two separate closings to clarify the timing and conditions of property transfers and related obligations. The first closing, to occur by November 10, 2025, will include execution of the Lease and recordation of the Memorandum of Lease, while the second closing will include execution and recordation of the Deed for the Geneva Place right of way following completion of specified project milestones. These changes are proposed in response to delays on the part of the developer and are intended to help expedite completion of the building so that it can be occupied and used by the operator, Foundrspace. The amendment also revises the commencement of the Lease term so that it will begin only after Bently completes the bathroom and elevator improvements identified in Exhibit A; however, the City will have the right of possession of the leased premises upon the first closing. This structure provides the City with early access to the property while maintaining accountability for completion of key facility and accessibility improvements.

DISCUSSION:

The developer’s delays in delivering a “warm shell”, which is required for execution of the Lease and Exchange Agreements, have resulted in significant project delays and have prevented the City from fulfilling its tenant improvement obligations under its contract with FoundrSpace. The Exchange Agreement was originally drafted to require completion of the full warm shell build-out prior to execution of the Lease and Exchange Agreements; however, due to delays by the developer, the proposed amendment separates the two closings, allowing the City to proceed with its tenant improvements while still holding the developer accountable for completion of the remaining work.

As proposed, the first closing will consist of the execution and delivery of the Lease and the recordation of the Memorandum of Lease. This first closing is required to occur on or before November 10, 2025. This closing would enable the City to commence on-site tenant improvement work concurrently with the developer’s completion of the warm shell requirements, advancing FoundrSpace toward the start of operations. This first closing action would not provide the developer with the Grant Deed to Geneva Place.

The amendment also modifies the commencement of the Lease term. Under the revised language, the term of the Lease will not commence until Bently has completed Item 4 (bathrooms) and Item 5 (elevator) of the work described in Exhibit A to the amendment. Notwithstanding this, the City will have the right of possession of the leased premises upon the first closing, even if Bently has not yet completed the specified improvements or other work described in Exhibit A. This change allows the City to take possession of the premises earlier, while ensuring that the formal commencement of the Lease term remains contingent upon completion of key accessibility and facility improvements.

The second closing will consist of the execution and recordation of the Grant Deed. This will only occur once Bently has completed the “warm shell” and other work described in Exhibit A to the Second Amendment of the Exchange Agreement, which Bently is required to diligently prosecute to completion. This amendment provides greater clarity regarding the timing, sequencing, and conditions associated with each closing and aligns the parties’ respective obligations with project completion milestones.

FISCAL IMPACT:

None.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

Not applicable.

Respectfully submitted,

EXCHANGE AGREEMENT
between the

CITY OF COVINA
and

BENTLY REAL ESTATE, LLC
April 19, 2022
1507577. 3
12923- 0001\ 2641052v2. doc

ATTACHMENT A

EXCHANGE AGREEMENT
THIS EXCHANGE AGREEMENT (" Agreement") is dated as of April 19, 2022 and is entered into by and between BENTLY REAL ESTATE, LLC, a California limited liability company Bently") and the CITY OF COVINA, a California municipal corporation (" City"), which are sometimes hereinafter referred to individually as a" Party" and collectively as the " Parties".

RECITALS
A. The City is the owner of the land in the City of Covina described on Exhibit " A" City Property"), which is used as a public street.

B. Bently owns the land and building/improvements at 401 N. Citrus Avenue, the land being described on Exhibit " B" ( the ` Gently Citrus Property") in the City of Covina, California, which Bently has proposed to lease to the City on the terms of the lease attached hereto as Exhibit C" for a term of eight( 8) years and two ( 2) months for no rent( the" Lease").

C. The Parties desire to effectuate an exchange of the City Property for the Lease, which will include: ( a) the City vacating the public street on the City Property( with the exception of the easterly 241. 5 feet terminating at Citrus Avenue); ( b) the conveyance of the City Property by the City to Bently by quitclaim deed; ( c) the execution and delivery of the Lease; and ( d) Bently' s improvement of the Bently Citrus Property with the improvements described on Exhibit D" (" Landlord Improvements"), which shall be a condition to the closing ofthe exchange.

D. Bently also owns the land described on Exhibit " E" and improvements thereon Bently' s Clippinger Site", which together with the City Property to be conveyed to Bently, is hereinafter collectively referred to as the " Clippinger Project Land").

AGREEMENT
In consideration ofthe foregoing Recitals, and other consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows:

1. AGREEMENT TO EXCHANGE PROPERTIES.

1. 1 Closing. Prior to the date hereof, Bently and City have made arrangements with First American Title Insurance Company, 1250 Corona Pointe Ct., Suite 200, Corona, CA 92879, Attn: Terrell Crutchfield, Title Officer( the" Title Company") for the transactions contemplated in this Agreement. Upon the approval and execution of this Agreement, the Parties shall promptly deliver a
copy to the Title Company. Subject to all the terms and conditions of this Agreement, the Parties agree to simultaneously exchange the Lease and City Property through the Title Officer.

As set forth in Section 4. 1. 4 and Section 4. 2. 4 below, it shall be a condition to the Close of the transactions herein ( the " Closing") that the Title Company be irrevocably committed to issue a leasehold owner' s title insurance policy to the City as to the Lease in the amount of$ 1, 303, 160. 00 and an owner' s title policy to Bently as to the City Property in the amount of$ 1, 300, 000.00, and in form required in Section 4. 1. 4 and Section 4. 2. 3 below, as applicable, effective as ofthe Closing.

1. 2 Total Consideration. The City and Bently hereby stipulate and agree that the fair market value of the City Property is $ 1, 300, 000. 00 ( based on an appraisal dated March 8, 2022) and the fair market value of the Lease is $ 1, 388, 460. 00 ( based on an appraisal dated March 7, 2022), less$ 85, 300. 00 for improvements as set forth in the Lease. The Parties agree that the total value of consideration received by the City in connection with the Lease equals or exceeds the value of the City Property so that City shall not be deemed to have given any financial assistance to Bently or the " Clippinger Project".

1. 3 Closing Date. The exchange transaction shall close on or before the date which is July 31, 2022 ( the " Outside Date"). The City Manager of the City shall have the authority to extend such July 31, 2022 date for reasonable cause, provided the extension is in writing, but shall have no obligation to do so.

2. DUE DILIGENCE.

2. 1 Delivery of Due Diligence Materials. Within ten ( 10) business days after the date of this Agreement, City shall deliver to Bently, and Bently shall deliver to City, without representation or warranty, express or implied, copies the following documents in their possession collectively, the " Due Diligence Materials") relating to, as to the City, the City Property, and as to Bently, the Bently Citrus Property ( each Parties' respective property is sometimes referred to herein as an" Exchange Property/ Interest"): ( i) all licenses, leases, and permits affecting or relating to the ownership, subdivision, possession or development of their respective Exchange Property/Interest or the construction of improvements thereon, and all amendments and modifications thereto; ( ii) applications and correspondence or other written communications to or from any governmental entity, department or agency ( regarding any permit, approval, consent or authorization; ( iii) the most recent survey, if any; and ( iv) any soils reports, engineering data, environmental reports, and other data or studies provided to or otherwise in the possession of such Party. Any Due Diligence Materials shall be provided to the other Party without any recourse or liability of any type or nature, and each Party assumes all risk of any kind with regard to the use of and reliance upon any of the Due Diligence Materials provided by the other Party.

2.2 Title Review; Inspections. Each Party shall cause the Title Company to deliver to the other Party by email ( to BLee@covinaca. gov for City, and tarif@alhassen. com for Bently) a preliminary report ( the " Title Report") reporting on the condition of title for their respective Exchange Property/Interest( with hyperlinks to the title exception documents). All title exceptions and other matters disclosed in either Title Report shall be deemed approved " Permitted Exceptions" as to the applicable Exchange Property/ Interest unless the Party to whom the Exchange Property/ Interest is to be conveyed provides written notice to the other Party of an objection to such title matter and the other Party agrees in writing to cure such title objection on or before the Closing. Upon written request and reasonable notice, each Party and each Party' s representatives, agents, engineers, consultants, contractors, and designees shall have the right to enter onto the other Party' s Exchange Property/ Interest commencing upon mutual execution of this Agreement and continuing until the date that is ninety( 90) days thereafter( the" Due Diligence Period") for purposes of conducting a survey, and examining, inspecting and investigating the title, soil, subsurface soils, drainage, seismic and other geological and topographical matters, location of asbestos, toxic substances, hazardous materials or wastes. Each Party shall, in a timely manner, repair any and all damage to the Exchange Property/ Interest entered into by such Party or 12923- 0001\ 2641052v2.doc Page 379 of 476
representatives, agents, engineers, consultants, contractors, and designees caused by any such inspection or investigation described herein, to a condition substantially the same as the condition of Such Exchange Property/ Interest prior to such inspection or investigation. Each Party shall hold harmless, defend and indemnify the other Party and all of the principals, members, agents and partners of the other Party from any claim, loss, expense ( including attorney' s fees), liability or cost which arises due to or out of any inspection by said Party or any of its representatives, agents, engineers, consultants, contractors, and designees. The foregoing indemnity shall survive the close or the termination of this transaction.

Except as set forth herein, and based on the inspection rights set forth in the preceding paragraph and in reliance on their due diligence, but subject to their obligations to disclose all material facts, Bently and City acknowledge and agree that each Party' s exchange of the Exchange/ Property Interest is made solely on an " AS- IS WHERE- IS" BASIS, WITH NO REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED.

Except as set forth herein and as set forth in the Lease, effective as of the Closing each Party( a" Releasing Party") hereby releases and waives all claims of any kind the Releasing Party may have against the other Party( the" Released Party") relating to the Exchange Property/ Interest conveyed to the Releasing Party regardless of whether such claim or claims arise prior to or after the Closing. The foregoing release shall not apply to any representations or warranties made by the Releasing Party( or obligations of the Releasing Party) under this Agreement. THE PARTIES

ACKNOWLEDGE THAT THEY HAVE BEEN ADVISED OF AND ARE FAMILIAR WITH THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542, WHICH PROVIDES AS FOLLOWS: " A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE

CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS

OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN

BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY." EACH OF THE PARTIES BEING AWARE

OF SAID CODE SECTION, HEREBY EXPRESSLY WAIVES ANY RIGHT THEY MAY

HAVE THEREUNDER, AS WELL AS UNDER ANY OTHER STATUTE OR COMMON LAW

PRINCIPLE OF SIMILAR EFFECT

2. 3 Disapproval/ Termination. If either Party disapproves of any of the Due Diligence Documents or title for, or condition of, the Exchange/ Property interest it is acquiring, it may terminate this Agreement by written notice given prior to the end of the Due Diligence Period.

Neither party shall have the right to terminate this Agreement following the expiration of the Due Diligence Period other than due to a default of the other Party' s obligations in accordance with the terms hereof, which continues for five ( 5) business days after notice of default.

3. CLOSING; RECORDING.

3. 1 Instructions. This Agreement, together with any separate written instructions of a Party, shall constitute the recording instructions of the Parties to the Title Officer.

3. 2 Deliveries by City. No later than 1: 00 p. m. on the business day preceding the Closing Date, City shall deliver to the Title Officer:
a) a quitclaim deed in the form of Exhibit" F" attached to this Agreement( the City Property Deed") conveying to the City Property to Bently, duly executed by City and acknowledged;
b) a counterpart original of a Memorandum of Lease in the form attached to the Lease, duly executed by City and acknowledged;
c) a counterpart original of the Lease, executed by City; and d) any and all reasonable documents and funds required by Title Company to carry out and close the exchange transaction pursuant to this Agreement.

3. 3 Deliveries by Bently. On or before the business day preceding the Closing, Bently shall deliver to the Title Officer:
a) A counterpart original of a Memorandum of Lease in the form attached to the Lease, duly executed by Bently and acknowledged;
b) A counterpart original of the Lease, executed by Bently; c) Any additional sums necessary to pay Bently' s share of costs; and d) Any and all other reasonable documents and funds required by the Title Officer to carry out and close the exchange transaction pursuant to this Agreement.

3. 4 Closing, Recording and Disbursements. On or before the Closing, and when all of the conditions precedent set forth in Section 4 below have been satisfied or waived in writing, the Title Officer shall cause the following actions set forth in this Section 3. 4 to be taken.

3. 4. 1 Recording. Title Company shall cause the City Property Deed and the Memorandum of Lease to be recorded in the Official Records of Los Angeles County, California.

3. 4. 2 Title Policies. Title Company shall issue ( or be irrevocably committed to issue) to each Party the Title Policy for the Exchange Property/ Interest being conveyed to such Party, as described in Section 4. 1. 2 and 4. 2. 4 below.

3. 5 Payment of Costs. Bently shall pay all title insurance premiums for the standard coverage Title Policy in favor of Bently( exclusive of extended coverage and/ or endorsement costs unless required to cure a title objection), and Bently shall be responsible for ensuring payment of all title insurance premiums for a standard coverage Title Policy in favor of City ( exclusive of extended coverage and/ or endorsement costs unless required to cure a title objection). Bently shall pay any documentary transfer taxes applicable to the City Property Deed. Bently shall pay any and all recording charges. Title Officer shall prepare a preliminary settlement statement of costs and prorations and it shall be subject to approval by City and Bently as a condition to Closing.

4. CONDITIONS PRECEDENT TO CLOSING.

4. 1 Conditions to BentIv' s Obligations. Bently' s obligation to exchange shall be subject to the satisfaction or written waiver by Bently of each of the conditions precedent set forth in this Section 4. 1.

4. 1. 1 City' s Performance. City is not in default of any term or condition of this Agreement.

4. 1. 2 Vacation of Right of Way. The City shall have vacated the public right of way on the City Property.

4. 1. 3 City Deliveries Made. City has deposited with the Title Officer all documents and funds required of City by this Agreement.

4. 1. 4 Title Policy. It shall be a condition to closing that Title Company commit to issue to Bently a CLTA standard, or at Bently' s choice, an ALTA extended coverage owner' s policy of title insurance (" Title Policy"), with liability in an amount equal to the appraised value ofthe City Property( or such other value as may be reasonably requested by Bently provided Bently shall be responsible for any additional premiums for coverage in excess of the appraised value of the City Property), showing fee title to the City Property vested in Bently subject only to:
a) the standard printed exceptions and exclusions contained in the form of the Title Policy commonly used by Title Company;
b) any other Permitted Exceptions approved ( or deemed approved) by Bently pursuant to Section 2. 4 of this Agreement;
c) any other exceptions created or approved in writing by Bently.

The terms of sub- sections ( a) through ( c), inclusive, being herein collectively referred to as the " Permitted Exceptions".

4. 2 Conditions to City' s Obligations. City' s obligation to exchange shall be subject to the satisfaction or written waiver by City of each of the conditions precedent set forth in this Section 4. 2.

4. 2. 1 Bently Performance. Bently is not in default of any term or condition of this Agreement.

4. 2. 2 Landlord Improvements. Bently shall have completed the Landlord Improvements in compliance with all applicable laws.

4. 2. 3 Bently Deliveries Made. Bently has deposited with the Title Officer all documents required of Bently by this Agreement.

4. 2. 4 Title Policy. It shall be a condition to closing that Title Company commit to issue to City a CLTA standard, or at City' s choice, an ALTA extended coverage owner' s policy

of title insurance (" Title Policy"), with liability in the amount reasonably required by the City, showing fee title to the Bently Property vested in City, subject only to:
a) the standard printed exceptions and exclusions contained in the form of the Title Policy commonly used by Title Company;
b) any Permitted Exceptions approved( or deemed approved) by City pursuant to Section 2. 2 of this Agreement;
c) any other exceptions created or approved in writing by City.

The exceptions described in sub- sections( a) through( c), above, inclusive, are collectively referred to herein as " Permitted Exceptions".

4. 3 Satisfaction of Conditions. Where satisfaction of any of the foregoing conditions requires action by a Party, each Party shall use its good faith efforts at its own cost to satisfy such condition.

4. 4 Waiver. A Party may at any time or times, at its election, waive any of the conditions set forth in Sections 4. 1 or 4.2 above to its obligations hereunder, but any such waiver shall be effective only if contained in a writing signed by such Party and delivered to the other Party.

4. 5 Termination. In the event each of the conditions set forth in Section 4. 1 are not fulfilled within the time provided by the terms of this Agreement or waived pursuant to Section

4.4, any Party may, at its option, terminate this Agreement upon written notice delivered to the other Party as provided for herein. Nothing in this Section 4. 5 shall be construed as releasing any Party from liability for any default of its obligations hereunder or breach occurring prior to the termination of this Agreement.

5. MISCELLANEOUS.

5. 1 Attorneys' Fees. The Parties shall each bear their own attorneys' fees and costs associated with the negotiation and drafting of this Agreement. In the event of any controversy or dispute arising from this Agreement, the prevailing party ( as determined by the trier of fact) shall be entitled to recover from the non- prevailing party reasonable attorneys' fees and costs incurred in connection with the controversy or dispute.

5. 2 Notices. Unless otherwise expressly and specifically stated herein, all notices required to be delivered under this Agreement to the other Party must be in writing and shall be delivered by certified mail, return receipt requested, or sent by overnight service using a reputable overnight delivery service, and addressed to the respective Parties as set forth below or to such other address and to such other persons as the Parties may hereafter designate by written notice to the other Party hereunder:

To Bently: Bently Real Estate, LLC
1932 E. Garvey Ave South
West Covina, CA 91791

Attn: Tarif Alhassan
To City: City of Covina
125 E. College Street
Covina, CA 91723
Attn: City Manager
Notices shall be deemed received on the date of delivery or attempted delivery shown on the return receipt ( if sent by certified mail), or the following business day ( if sent by reputable overnight messenger).

5. 3 Execution in Counterparts; Electronic Delivery. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on all Parties hereto, notwithstanding that all Parties are not signatories to the original or the same counterpart.

Executed counterparts of this Agreement may be delivered by email/PDF to [email protected] for the City) and tarif@alhassen. com ( for Bently), as applicable.

5. 4 Time of the Essence. Time is of the essence with respect to each of the terms, covenants, and conditions of this Agreement.

5. 5 Entire Agreement. Except as to the Lease and the matters stated therein, this Agreement and any written agreement entered into by the Parties with respect to the subject matters hereof, supersedes all negotiations and previous agreements between the Parties with respect to all or part of the subject matter thereof.

5. 6 Waivers and Amendments. All waivers of the provisions of this Agreement must be in writing and signed by the appropriate authorities of the Party to be charged. Any amendment or modification to this Agreement must be in writing and executed by both Parties.

5. 7 Severability. If any provision in this Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the remaining provisions will nevertheless continue in full force without being impaired or invalidated in any way.

5. 8 Interpretation: Governing Law. This Agreement shall be construed in accordance with the laws of the State of California.

5. 9 Rights and Remedies are Cumulative. Except as may be otherwise expressly stated in this Agreement, the rights and remedies of the Parties are cumulative, and the exercise by any Party of one or more of its right or remedies shall not preclude the exercise by it, at the same time or at different times, of any other rights or remedies for the same default or any other default by another Party.

5. 10 Authority. The City Manager of City shall have the authority to issue consents, approvals and amendments ( including extensions of time) on behalf of City provided they are in writing, and shall have the authority to execute all documents contemplated by this Agreement on behalf of City.

5. 11 Indemnification of City; Prevailing Wages. Bently shall defend, indemnify and hold City harmless from and against any and all claims, liabilities, losses, damages, costs and expenses incurred or suffered by City in connection with the Landlord Improvements and Clippinger Project, including without limitation claims and liabilities for prevailing wages.

IN WITNESS WHEREOF, the Parties hereto have caused this Agreement to be executed by their respective duly authorized officers as of the respective dates set forth below.

BENTLY: BENTLY REAL ESTATE, LLC,
a California limited liability company
By:

Mo ammed Tari Alhassen, Manager
CITY: CITY OF COVINA
By:

Chris Marcarello, City Manager
ATTEST:
dr_
Ge a Nicole Afar z,
ief Deputy City Clerk
APPR D AS T FORM:

Candice Lee, City Attorney

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

State of California
County of Las Kloyt le)
On Murch 30/ 2c>2 L before me, K4rtesm T • I kSS1h
insert name and title of the officer)
Notary Public, personally appeared M c kc wiy 1? a T r . f , .SS t who proved to me on the basis of satisfactory evidence to be the person whose nameW is/ Ve subscribed to the within instrument and acknowledged to me that he/ s lfe/ tl ey executed the same in his/ l1kr/ tyeir authorized capacity( i Es), and that by his/ hfir/thOr signature) on the instrument the personas), or the entity upon behalf of which the
person
acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal. e4 KAREEM T. ALHASSEN U:
c
COMM.# 2263639
o .= s.: 0,y NOTARY PUBLIC- CALIFORNIA iv
N ,, LOS ANGELES COUNTY n
Signature i --%"`" Seal) COMM. EXPIRES NOV. 17, 2022
12923- 0001\ 2619709v2. doc

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

State of California
County of
On before me,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/they executed the same in his/ her/ their authorized capacity( ies), and that by his/ her/their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws ofthe State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature Seal)
12923- 0001\ 2619709v2. doc

EXHIBIT " A"

LEGAL DESCRIPTION OF CITY PROPERTY
PROPERTY AS TO WHICH STREET IS TO BE VACATED; SEE ATTACHED DESCRIPTION]

LEGAL DESCRIPTION

PARTIAL STREET AND ALLEY VACATION

LEGAL DESCRIPTION OF PARTIAL STREET AND ALLEY VACATION
THAT PORTION OF GENEVA PLACE( 60' WIDE) IN THE CITY OF COVINA, AS SHOWN ON TRACT 8354 ON MAP RECORDED IN BOOK 104 PAGES 93 AND 94 OF MAPS, IN THE COUNTY RECORDER' S OFFICE OF LOS ANGELES COUNTY, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS;
BEGINNING AT THE NORTHEAST CORNER OF LOT 17 OF SAID TRACT 8354, THENCE EASTERLY ALONG THE SOUTHERLY RIGHT- OF- WAY OF GENEVA PL( 60' WIDE), WEST, 201. 62 FEET TO THE TRUE POINT OF BEGINNINGS THENCE WEST ALONG SAID GENEVA PL SOUTH RIGHT- OF- WAY, 416. 94 FEET TO THE EASTERLY RIGHT- OFWAY OF THIRD ST( 50' WIDE); THENCE ALONG SAID THIRD ST EASTERLY RIGHT- OF- WAY, N00° 00' 10" W, 60 FEET; THENCE EAST ALONG SAID GENEVA PL NORTH RIGHT- OF- WAY 396. 94 FEET; THENCE N00°00' 02" E, 157. 24' FEET;
THENCE S89° 46' 57" E, 20' FEET TO THE EAST LOT LINE OF LOT 2 OF SAID TRACT 8354; THENCE S00° 00' 02" W, 157. 16' FEET TO THE SOUTHEAST CORNER OF LOT 2 OF SAID TRACT 8354; THENCE S00° 00'00" E, 60 FEET TO THE TRUE POINT OF BEGINNING.

RESERVING THEREFROM EASEMENTS FOR PUBLIC UTILITIES AND INCIDENTAL PURPOSES THERETO OVER THE ABOVE DESCRIBED PORTION OF SAID STREET.

EXHIBIT" B" ATTACHED HERETO AND MADE A PART HEREOF.

CONTAINING APPROXIMATELY 28,160 SF
REPARED BY:

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Assessor' s Parcel Numbers 8431-015
Date Exhibit Prepared: 10- 13- 2021

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ALLEY VACATION ELIE G FARAH, PLS. 8258 DATE 10- 13- 2021 UC. EXP. 12/ 31/ 21
1507577. 3

EXHIBIT " B"

LEGAL DESCRIPTION OF BENTLY CITRUS PROPERTY
Real property in the City of Covina, County of Los Angeles, State of California, described as follows:

LOT 6 OF TRACT NO. 1224, IN THE CITY OF COVINA, AS PER MAP RECORDED IN BOOK 18, PAGES 50
AND 51 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN: 8431- 028- 006 ( Old APN); 8431- 028- 111 ( New APN)

EXHIBIT " C"

FORM OF LEASE
Attached.)

LEASE
THIS LEASE (" Lease") is dated 2022 [ TO BE DATED AS OF THE DATE OF THE CLOSING OF THE EXCHANGE UNDER THE EXCHANGE AGREEMENT] the " Effective Date") and is entered into by and between BENTLY REAL ESTATE, LLC, a California limited liability company (" Landlord"), and the CITY OF COVINA, a California municipal corporation (" Tenant"). Landlord and Tenant are sometimes individually referred to as Party" and collectively as the " Parties."

RECITAL
Landlord is the owner of the land described on Exhibit" A" and all improvements thereon collectively, the " Premises"), which have a street address of 401 N. Citrus Avenue, Covina, California, and as described in that certain Exchange Agreement between Landlord and Tenant dated of even date herewith, Landlord desires to lease the Premises to Tenant and Tenant desires to Lease the Premises from Landlord upon and subject to the terms hereinafter set forth.

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

1. TERM

1. 1 Demise. Landlord hereby leases the Premises to Tenant and Tenant hereby leases the Premises from Landlord on the terms and conditions hereinafter set forth in this Lease.

1. 2 Term; Extension Options. The initial term( the" Initial Term" and collectively with the Extension Terms, if exercised, the" Term") of this Lease shall commence on the Effective Date the " Term Commencement Date") and shall expire at 11: 59 pm on the last day immediately preceding the first day of the ninety- ninth ( 99th) month after the Term Commencement Date, provided that if and to the extent that Landlord shall fail to substantially complete the work on certain property described in the Exchange Agreement as the Bently' s Clippinger Site, which work is described on Exhibit" B" attached hereto( the" Landlord Clippinger Project Work") on or before December 31, 2027 ( the " Clippinger Target Date"), as extended by delays in completion caused by Force Majeure ( as defined in Section 6. 13 below), then the expiration date of the Initial Term shall be extended by one day for each day after Clippinger Target Date ( as so extended by Force Majeure delays) that the Landlord Clippinger Project Work is not substantially completed.

Tenant shall have two ( 2) options to extend the term for a period of five ( 5) years each ( each, an " Extension Term"), on the same terms and conditions, with the exception of Rent which shall be determined in accordance with Section 1. 3 below. Tenant shall exercise such options by written notice given at least nine( 9) months prior to the end of the Initial Term or first Extension Term, as applicable.

1. 3 Rent. No rent shall be payable by Tenant during the Initial Term.

The monthly rent during each Extension Term shall be the " Fair Market Rent" for the Premises, which shall be defined and determined as follows.

As used herein, the term " Fair Market Rent" shall mean the fair market rent for the use of the Premises for office purposes ( based on fair market rental for comparable space for a new lease with a term equal to the extension and considering market free rent periods, allowances and other concessions, brokerage commissions and all other relevant factors) as of the commencement of the extension based on office lease transactions in the City of Covina and adjacent areas, and shall be determined as follows. Within the later ofthirty( 30) days of Tenant' s notice to Landlord exercising the extension and the date which is five ( 5) months prior to the expiration of the Initial Term, Landlord shall notify Tenant in writing of Landlord' s determination of Fair Market Rent. If Tenant objects to Landlord' s determination, Tenant shall, within fifteen 15) days after delivery of Landlord' s notice to Tenant, notify Landlord in writing of the reasons for Tenant' s disagreement, whereupon Landlord and Tenant shall meet and attempt to resolve such disagreement. If Landlord and Tenant are unable to agree on the Fair Market Rent within twenty 20) days following Tenant' s notice to Landlord, then the Fair Market Rent shall be determined by an independent realtor in the manner provided below, and until the Fair Market Rent determination is completed, Tenant shall continue to pay to Landlord the Base Rent in effect immediately prior to the extension. After such fair market determination is completed, Tenant shall promptly make payment to Landlord for any underpayments owing for prior months or Landlord shall promptly reimburse Tenant for any overpayments owing for prior months, as the case may be.

The process for determining the Fair Market Rent in the event of an aforesaid unresolved disagreement shall be as follows. An independent realtor with no less than seven ( 7) years ofexperience representing landlords and tenants in office leasing transactions in Los Angeles County, California chosen by Landlord shall, in good faith, determine the Fair Market Rent for the Premises based on premises in the City of Covina and adjacent areas leased for office purposes First FMR Determination"), and Landlord shall forward the resulting fair market determination to Tenant.

If said First FMR Determination is unacceptable to Tenant, then Tenant shall so advise Landlord in writing within ten ( 10) business days after the First FMR Determination is delivered to Tenant, and Tenant shall then have the right to engage an independent realtor with no less than seven ( 7) years of experience representing landlords and tenants in office leasing transactions in Los Angeles County to similarly determine, in good faith, the Fair Market Rent for the Premises, and the resulting fair market determination shall be delivered to Landlord.

Ifthe Second FMR Determination is unacceptable to Landlord, then Landlord shall so advise Tenant within ten ( 10) business days after receipt of the Second FMR Determination, and the first independent realtor and second independent realtor shall then together choose a third independent realtor with no less than seven ( 7) years of significant experience representing landlords and tenants in office leasing transactions in Los Angeles County who shall choose either the First FMR Determination or the Second FMR Determination as the Fair Market Rent.

The cost of the First FMR Determination shall be borne by Landlord. The cost of the Second FMR Determination shall be borne by Tenant. The cost ofthe third independent realtor shall be shared equally between Landlord and Tenant.

1. 4 Utilities. Tenant shall be solely responsible for all utilities and establishing utility service to the Premises with all utility providers. Tenant shall pay directly to utility providers, on or before the due date, all amounts for electricity, gas, water, sewer, trash disposal, cable, telephone and other utility services used on or for the Premises. Tenant shall pay all initial utility deposits and fees, and all monthly service charges for electricity, gas, water, sewer, trash disposal, cable, telephone and any other utility services furnished to the Premises and the improvements on the Premises during the entire Term ofthis Lease.

1. 5 Property Taxes and Assessments. During the Initial Term and each Extension Term, if exercised, Tenant shall reimburse Landlord within ten ( 10) business days after written demand, enclosing a copy ofthe applicable tax/ assessment bill and evidence of Landlord' s payment thereof, for property taxes and assessments paid by Landlord for the Premises.

1. 6 Tenant Refurbishment of North Citrus Avenue; Required Additional Improvements. _On or before July 1, 2023, as may be extended by Force Majeure delays, Tenant shall refurbish and improve North Citrus Avenue at the Geneva Place intersection and as part thereof Tenant shall provide/ install, at Tenant' s cost, a cross gutter and high point break improvements ( in order to attempt to divert existing stormwater flow to southbound Citrus Avenue) as described in Exhibit " C" attached hereto ( the " Tenant Road Improvements").

Landlord shall have the right to approve any changes to such plans to the extent such changes could reasonably be expected to materially and adversely affect the Premises, provided such approval shall not be unreasonably withheld, conditioned or delayed. Tenant shall indemnify, defend and hold Landlord harmless from and against any and all claims, losses, damages, liabilities, costs and expenses ( including attorneys' fees) arising in connection with the Tenant Road Improvements except to the extent the same are caused by the negligence or willful misconduct of Landlord or its contractors.

1. 7 Permitted Uses. Tenant may use the Premises for office, retail, adult educational and/ or training purposes ( including for participants in Tenant' s programs), all to the extent permitted in accordance with applicable Regulations ( as defined in Section 1. 9). Tenant shall not use or permit any other person to use the Premises or any part thereof, for any use which constitutes a waste or nuisance to the public. Tenant shall not use, nor shall Tenant permit any other person to use, the Premises for disposal or storage of any hazardous or noxious product, by-product or waste product which is regulated as toxic or hazardous or exposure to which is prohibited, limited or regulated by any governmental authority.

1. 8 Landlord Representations and Warranties. Landlord represents and warrants to Tenant that( i) it has no actual knowledge of any presence or release of hazardous materials on the Premises; ( ii) no deeds of trust or other liens which if foreclosed would extinguish this Lease encumber the Premises; ( iii) the Premises are a separate property tax parcel; and ( iv) Landlord has otherwise expressly disclosed to Tenant in writing all facts actually known to Landlord regarding the condition of Premises that could materially adversely affect Tenant' s use and occupancy ofthe Premises.

1. 9 Compliance with Laws. Tenant shall at all times comply with the requirements of local, state and federal laws, rules, codes, orders and regulations( including, without limitation, the Americans with Disabilities Act and any federal, state or local accessibility or discrimination law)

now in force or which may hereinafter be in force (" Regulations") with respect to the Premises and Tenant' s use and occupancy thereof. At all times during the Lease Term, Tenant, at Tenant's own cost and expense, shall make or cause to be made all alterations, additions, repairs, improvements and upgrades to the Premises and every part thereof, required by any Regulation except for alterations, additions, repairs and improvements required in order for the improvements on the Premises to be in compliance with applicable Regulations as ofthe Effective Date ( it being understood that Landlord is not responsible for installing or constructing any of Tenant' s initial improvements contemplated by this Lease).

1. 10 Repairs and Maintenance; Replacements. Prior to the Term Commencement Date, Landlord has completed the work described on Exhibit " B- 1" attached hereto ( the " Landlord' s Work"). On the Term Commencement Date, Landlord shall obtain and deliver to Tenant one year warranties from its contractors with respect to the Landlord' s Work and including standard manufacturer' s warranties with respect to installed equipment which installation is included in Landlord' s Work. Subject to the foregoing warranties ( repairs and replacements covered by such warranties being the responsibility of the issuer of the warranty), Tenant shall maintain the Premises in good condition and repair and shall surrender the same at termination hereof in as good condition as received, normal wear and tear excepted. Tenant shall obtain and maintain throughout the Term customary preventative maintenance and repair contracts for the HVAC systems, the grease interceptor and the elevator. Tenant shall not, however, be responsible for making any material repairs or replacements to the structural beams or structural walls of the Premises unless damage is caused by the active negligence or willful misconduct of Tenant or its contractors or invitees, and in the event that any material repair or replacement of the structural beams or structural walls of the Premises is required, Landlord shall make such repairs and replacements the same at Landlord' s cost promptly after written notice from Tenant and confirmation of the need for such repair or replacement. Landlord shall reasonably schedule and coordinate access for such repairs with Tenant.

If Landlord fails to make such repairs/replacements within a reasonable period following written notice from Tenant that the same is required and such failure continues for more than thirty 30) days after written notice of such failure or such longer period as Landlord informs Tenant will be required due to delays in obtaining materials or labor or other matters outside of Landlord' s control, then Tenant may do so and Landlord shall reimburse Tenant for the reasonable out of pocket cost thereof within thirty ( 30) days after written demand ( together with supporting documentation).

1. 11 Accessibility Report; Required Improvements.

The subject Premises have not been inspected by a Certified Access Specialist( CASp). A Certified Access Specialist ( CASp) can inspect the subject premises and determine whether the subject premises comply with all of the applicable construction- related accessibility standards under state law. Although state law does not require a CASp inspection of the subject premises, the commercial property owner or lessor may not prohibit the lessee or tenant from obtaining a CASp inspection of the subject premises for the occupancy or potential occupancy; of the lessee or tenant, if requested by the lessee or tenant. The parties shall mutually agree on the arrangements for the time and manner of the CASp inspection, the payment of the fee for the CASp inspection,

and the cost of making any repairs necessary to correct violations of construction- related accessibility standards within the premises.

In that regard, the parties agree that Tenant may obtain such inspection and report and that Tenant shall pay for any such inspection and report obtained by Tenant, and that Tenant shall make all repairs/ improvements required or recommended by such report at Tenant' s sole cost and expense.

1. 12 Possession. Landlord shall deliver possession of the Premises to Tenant upon the Term Commencement Date. Tenant may install an access system as part of its initial improvements, and if Tenant does so, Tenant will promptly provide a means to Landlord to use the system for access.

1. 13 Damage or Destruction of Premises. If the Premises should be damaged or destroyed by fire or other peril, Tenant shall give written notice to Landlord promptly upon Tenant' s knowledge thereof. If as a result of such fire or other cause, twenty percent ( 20%) or more ofthe Premises is rendered untenable, the obligations of Tenant under this Lease to pay rent with respect to such portion shall be suspended while such portion of the Premises remains untenable. In the event of such damage, Tenant shall promptly restore the Premises to the condition existing prior to such damage; provided, however, if such damage occurs during the last twelve 12) months of the Initial Term or any Extension Term, Tenant may elect, in its sole discretion, whether to repair the Premises or to terminate this Lease; provided that no termination of this Lease by Tenant shall result in any increased cost, expense or liability of Landlord in connection with the Exchange Agreement, the City Property or the Clippinger Project Land.

1. 14 Alterations and Additions. Tenant shall not make any alterations, additions or improvements to the Premises without the prior written consent of Landlord, which consent shall not be unreasonably withheld, conditioned or delayed. Notwithstanding anything to the contrary contained in this Section 1. 14, Tenant shall have the right to make Permitted Alterations hereinafter defined) in the Premises without Landlord' s consent( but with ten 10 days prior written notice (" Permitted Alterations Notice"), which notice shall contain a description of the Permitted Alterations proposed to be undertaken by Tenant and state that such Alterations are Permitted Alterations. A "Permitted Alteration" shall mean any Alteration in the Demised Premises which is consistent with alterations normally and customarily untaken by office tenants in comparable buildings, is permitted by applicable Regulations, and that will not( 1) affect the structure or safety of the Building; ( 2) affect the electrical, plumbing, mechanical or other base Building systems or the functioning thereof; ( 3) cost more than One Hundred Thousand Dollars ($ 100, 000. 00). All alterations, installations, removals and restoration shall be performed in compliance with applicable Regulations and in a good and workmanlike manner so as not to damage or alter the primary structure or structural qualities of the building and other improvements situated on the Premises. Landlord agrees that Tenant may make the alterations and improvements to the Premises described on Exhibit" D"; subject to Landlord' s approval of the plans and specifications therefor to the extent the same are not Permitted Alterations.

1. 15 Entry and Inspection. Tenant shall permit Landlord or Landlord' s agents to enter the Premises at all times upon reasonable prior written notice( or without notice, in the event of an emergency) for the purpose of inspecting the Premises, for maintaining and making necessary

repairs, restorations and replacements to the Premises as set forth above, and for otherwise determining Tenant' s compliance with this Lease, and to address any emergency( but shall not be obligated to do so).

1. 16 Assignment and Subletting. Tenant shall not assign or encumber this Lease or sublet the Premises without the prior written approval of Landlord, which shall not be unreasonably withheld, conditioned or delayed; provided, however, in no event shall Tenant have any right to assign this Lease or any interest herein or sublease all or any portion of the Premises during the Initial Term of this Lease. Notwithstanding the foregoing, Landlord' s prior approval shall not be required for Tenant to allow use of the Premises by participants in Tenant' s programs including business incubator programs and low/ mod educational programs) or for an operator/ manager under an operating/ management agreement, provided that ( a) any such occupancy shall be subject to all requirements of this Lease and to applicable Regulations, ( b) any use ofthe Premises by such persons shall be in accordance with the permitted use ofthe Premises, c) any such arrangement shall terminate automatically with, and each such occupant shall vacate the Premises on or prior to, the earlier of( i) the date on which such occupant ceases being so engaged in business with Tenant and ( ii) expiration or earlier termination of the Term, ( d) no such occupancy shall create or be deemed to create any right, title or interest in or to the Premises for any such occupant ( other than a license to occupy the applicable portion of the Premises, which shall be subordinate to this Lease), ( e) no portion ofthe Premises shall be separately demised and all parts ofthe Premises shall remain accessible through a common entrance, and( f) such occupant shall not pay any rent for such use or occupancy of the Premises ( but may pay program fees and costs). Tenant shall, upon Landlord' s reasonable request, provide a list of the persons occupying the Premises at any given time and such other information as Landlord may reasonably request, including, without limitation, the nature of the business of any such person and the names of contact persons. In addition to, and not by way of limitation of any other provision ofthis Lease, Tenant shall indemnify Landlord and hold Landlord harmless from any damages and any claim of tenancy arising out of any such arrangement.

1. 17 Indemnification. Tenant shall defend, indemnify and hold harmless Landlord from and against any and all claims, losses, damages, liabilities, costs and expenses( including attorneys' fees) arising by reason of the negligence or willful misconduct of Tenant or its sublessees or licensees or contractors or the use and occupancy ofthe Premises or any accident, damage or injury occurring therein or any breach of this Lease by Tenant or any of Tenant' s sublessees, licensees or contractors, except to the extent the same is caused by the negligence, willful misconduct or breach ofthis Lease by Landlord or its contractors, agents or employees.

2. INSURANCE

2. 1 Time for Compliance. Prior to entering the Premises, Tenant shall provide reasonable evidence ( such as insurance certificates) to the Landlord that Tenant has obtained all insurance required under this Section.

2. 2 Insurance Requirements. Tenant shall, at its expense, procure and maintain for the duration ofthis Lease insurance against claims for injuries to persons or damages to property which may arise from or in connection with the possession, use, occupancy, management, operation,

repair, maintenance or control ofthe Premises by the Tenant and/ or its officers, officials, agents, representatives, volunteers or employees.

2. 2. 1 Minimum Scope of and Limits of Coverage. Coverage shall be at least as broad as the latest version of the following: ( A) General Liability: Insurance Services Office Commercial General Liability coverage ( occurrence form CG 0001); ( B) Proof of Automobile Liability: Insurance business or personal auto coverage and ( C) Workers' Compensation and Employer' s Liability: Workers' Compensation insurance as required by the State of California and Employer' s Liability Insurance. Tenant shall maintain limits no less than: ( A) General Liability, 2, 000, 000 per occurrence for bodily injury, personal injury and property damage( if Commercial General Liability Insurance or other form with general aggregate limit is used, either the general aggregate limit shall apply separately to this Lease/ location or the general aggregate limit shall be twice the required occurrence limit); ( B) Proof of business or personal Automobile Liability coverage for bodily injury and property damage; and( C) Workers' Compensation and Employer' s Liability: Workers' compensation limits as required by the Labor Code of the State of California.

Employers Liability limits of$2, 000, 000 per accident for bodily injury or disease.

2. 2. 2 Fire Legal Liability and Extended Coverage. Tenant shall also procure and maintain, at its own expense, for the duration of this Lease, an all perils Premises insurance policy covering 100% of the replacement cost of all improvements on the Premises. If Tenant does not obtain this policy then Landlord will obtain and charge Tenant for the annual premium which Tenant will reimburse within Ten ( 10) business days of presenting a copy of the Insurance premium invoice to Tenant. This policy will have an annual deductible: of five thousand dollars 5, 000)..

2. 2. 3 Insurance Endorsements. The insurance policies shall contain the following provisions, or Tenant or the primary insured shall provide endorsements to add the following provisions to the insurance policies:
a) General Liability. The general liability policy shall be endorsed to state that: (A) the Landlord, its directors, officials, officers, employees, volunteers and agents shall be covered as additional insurers with respect to the possession, use, occupancy, management, operation, repair, maintenance or control ofthe Premises by the Tenant and its officers, officials, agents, representatives, volunteers or employees; and( B) the insurance coverage shall be primary insurance with respect to the Landlord, its officials, officers, employees, volunteers and agents, or if excess, shall stand in an unbroken chain of coverage excess ofthe Tenant' s scheduled underlying coverage. Any insurance or self-insurance maintained by the Landlord, its directors, officials, officers, employees, volunteers and agents shall be excess of the Tenant' s insurance and shall not be called upon to contribute with it.

2. 2. 4 Waiver of Subrogation. Tenant hereby releases Landlord from liability ( to Tenant or anyone claiming through or under Tenant by way of subrogation or otherwise) for any loss of, or damage to, property that is or would be covered by any insurance policies maintained or required to be maintained by Tenant pursuant to this Lease, even if such loss or damage is caused by the fault or negligence of Landlord. Tenant will include in its property insurance policy( ies) a waiver of the insurer' s right of subrogation against Landlord as set forth below, regardless of fault or negligence. Landlord hereby releases Tenant from liability (to Landlord or 12923- 0001\ 2619709v2. doc Page 398 of 476
anyone claiming through or under Landlord by way of subrogation or otherwise) for any loss of, or damage to, property that is or would be covered by any insurance policies maintained, or required to be maintained, by Landlord pursuant to this Lease, even if such loss or damage is caused by the fault or negligence of Tenant. Landlord will include in its property insurance policy( ies) a waiver of the insurer' s right of subrogation against Tenant as set forth below, regardless of fault or negligence. Tenant shall cause its insurer to waive all rights of subrogation against the Landlord and its officials, officers, employees, volunteers and agents for property damage covered by the applicable insurance policy.

2. 2. 5 Additional Requirements. If possible, the General Liability coverage required by this Lease shall be endorsed to state that: ( A) coverage shall not be suspended, voided, reduced or canceled except after thirty ( 30) days prior written notice by certified mail, return receipt requested, has been given to the Landlord; and( B) any failure to comply with reporting or other provisions of the policies, including breaches of warranties, shall not affect coverage provided to the Landlord and its officials, officers, employees, volunteers and agents. All insurance required by this Section shall contain standard separation of insureds provisions. In addition, such insurance shall not contain any special limitations on the scope of protection afforded to the Landlord and its officials, officers, employees, volunteers and agents. Insurance is to be placed with insurers with a current A.M. Best' s rating no less than A:IV, licensed and admitted to do business in California.

3. DEFAULT; TERMINATION.

3. 1 Tenant Default. Landlord may pursue, cumulatively or in the alternative as Landlord so elects, the remedies set forth in Section 3. 2 as well as any one or more other remedies provided by Law or equity terminate this Lease and all of its obligations hereunder, at its option, upon the occurrence of any ofthe following ( each, a" Default"):

3. 1. 1 Tenant' s breach of any of its non- monetary obligations under this Lease and failure to cure such breach within thirty ( 30) days after delivery of written notice from Landlord or, if such cure cannot reasonably be completed within thirty ( 30) days, Tenant' s failure to commence such cure promptly within the thirty( 30) days after delivery of written notice or failure to thereafter diligently prosecute such cure to completion; or

3. 1. 2 Tenant' s failure to pay any sum required to be paid by Tenant under this Lease and failure to cure such breach within five ( 5) business days after delivery of written notice from Landlord.

3. 2 Remedies. Upon the occurrence of a Default, Landlord may, at Landlord' s election, exercise any of the following remedies, in addition to other remedies provided by Law or equity:

3. 2. 1 Landlord may terminate this Lease by giving Tenant written notice of termination. On the giving of the notice, all of Tenant' s rights in the Premises and every part thereof shall terminate. Landlord shall not be deemed to have terminated this Lease unless Landlord shall have so declared in writing to Tenant, nor shall Landlord be deemed to have accepted or consented to an abandonment by Tenant by performing acts intended to maintain or preserve the Leased Land or the Project Improvements, making efforts to re- let the Leased Land

or appointing a receiver to protect Landlord' s interest under the Lease. Immediately after notice of termination, Tenant shall surrender and vacate the Leased Land and all Project Improvements in a broom- clean condition, and Landlord may reenter and take possession ofthe Leased Land and all improvements and eject all parties in possession or eject some and not others or eject none.

Termination under Section 3. 2. 1 shall not relieve Tenant from the payment of any sum then due to Landlord.

3. 2. 2 If any default by Tenant shall continue uncured for the period applicable to the default under the applicable provision ofthis Lease following notice of default( where required by this Lease), Landlord may, at Landlord' s election, reenter the Leased Land and, without terminating this Lease, at any time and from time to time re- let the Leased Land and Project Improvements or any part or parts ofthem for the account and in the name of Tenant or otherwise.

Landlord may, at Landlord' s election, eject all persons or eject some and not others or eject none; provided, however, no subtenants, who are not then in default and who agree to attorn to Landlord, shall be ejected. Any re- letting may be for the remainder of the Lease Term or for a longer or shorter period. No act by or on behalf of Landlord under this provision shall constitute a termination of this Lease unless Landlord gives Tenant written notice of termination. Landlord' s re- entry without termination under Section 3. 2.2 shall not relieve Tenant from payment to Landlord on the due dates specified in this Lease the equivalent of all sums required of Tenant under this Lease, plus Landlord' s expenses, less the proceeds of any re- letting or attainment.

3. 2. 3 Landlord shall be entitled, at Landlord' s election, to damages equal to the amount necessary to compensate Landlord for all the detriment directly caused by Tenant' s failure to perform Tenant' s obligations under this Lease. Such amount shall include, but not be limited to, such reasonable expenses( including reasonable attorneys' fees and costs) as Landlord may have paid, assumed, or incurred in recovering possession of the Leased Land, placing the Leased Land in good order and condition, preparing or altering the Premises for re- letting ( including rental commissions and advertising). Should Landlord elect to terminate this Lease under the provisions of Section 3. 2. 1 above, Landlord may recover from Tenant as damages: ( i) the worth at the time of award of any unpaid rent which had been earned at the time of such termination; plus ( ii) the worth at the time of award ofthe amount by which the unpaid rent which would have been earned after termination until the time of award exceeds the amount of such rental loss which could have been reasonably avoided; plus ( iii) the worth at the time of award of the amount by which the unpaid rent for the balance of the Lease Term after the time of award exceeds the amount of such rental loss that could be reasonably avoided; provided, however, that notwithstanding anything to the contrary contained herein and any remedies that may be permitted currently or in the future under California Law, Landlord shall be required to take all reasonable efforts to mitigate its damages following an Event of Default by Tenant. As used in subparagraphs( i) and( ii) above, the worth at the time of award" is computed by allowing interest at the Interest Rate. As used in subparagraph ( iii) above, the " worth at the time of award" is computed by discounting such amount at the discount rate of the Federal Reserve Bank situated nearest to the location of the Premises at the time of award plus one percent( 1%).

3. 3 Landlord Right to Cure. Ifthere shall exist an uncured Default, Landlord shall have the right, but not the obligation, but at the cost of and for the account of Tenant ( along with a management fee payable to Landlord, as set forth below), to make such payment or perform such act which Tenant is obligated to perform under this Lease in such manner and to such extent as

may be necessary to cure such Default, and, in exercising any such rights, pay any necessary and incidental costs and expenses, employ counsel and incur and pay reasonable attorneys' fees. Tenant shall pay to Landlord within ten ( 10) business days after written demand any sum expended by Landlord under this Section 3. 3 provided Landlord' s notice has reasonable evidence of the costs, plus interest on the total of such amounts at the lesser of( i) eight percent 8%) per year or( ii) the maximum interest rate permitted by applicable Law. Nothing contained in this Section 3. 3 shall impair the rights of Landlord with regard to defaults under Section 3. 1.

3. 4 Landlord. Tenant may terminate this Lease upon Landlord' s breach of any of its obligations under this Lease and Landlord' s failure to cure such breach within thirty ( 30) days after delivery of written notice from the Tenant or, if such cure cannot be completed within thirty 30) days, Landlord' s failure to commence such cure within thirty ( 30) days after delivery of written notice and thereafter diligently prosecute such cure to completion.

4. ENFORCEMENT OF LEASE

4. 1 Governing Law and Venue. This Lease shall be governed by the laws ofthe State of California without regard to conflicts of laws principles. Any litigation or other legal proceedings that arise under or in connection with this Lease shall be conducted in a federal or state court located within or for the County of Los Angeles, California.

4. 2 Waiver. No delay or omission in the exercise of any right or remedy of a nondefaulting party on any default shall impair such right or remedy or be construed as a waiver.

4. 3 Rights and Remedies are Cumulative. Subject to applicable law, the rights and remedies ofthe parties are cumulative and the exercise by any party of one or more of such rights or remedies shall not preclude the exercise by that party, at the same or different times, of any other rights or remedies for the same default or any other default by the other party.

4. 4 Legal Action. In addition to any other rights or remedies, any party may take legal action, at law or at equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Lease, to obtain injunctive relief, or to obtain any other remedy consistent with the purposes ofthis Lease.

4. 5 Attorneys' Fees. If any party commences an action against the other party arising out of or in connection with this Lease, the prevailing party shall be entitled to recover reasonable attorneys' fees and costs of suit from the losing party.

5. SURRENDER; HOLD OVER:
5_ 1 Surrender. Tenant shall deliver possession of the Premises to Landlord, cure all defaults, and shall leave the surrendered Premises ( i) in good operating condition and in broomclean condition, ( ii) in a condition that complies with then- applicable Law, ( iii) free from all hazardous materials, except to the extent the same were present when the Premises were delivered to Tenant, and except for items normally or routinely used in the operation, repair, maintenance, and use of office and retail projects, such as fuels, solvents, cleaning materials, paint and printing materials, which have been used in a manner that complies with applicable Regulations, and ( iv)

free from damage by condemnation and casualty, normal wear and tear excepted. All property that Tenant fails to remove within the period set forth in Section 8. 2 shall, at Landlord' s election, become Landlord' s property upon termination of this Lease. The obligations of Tenant under this Section 5. 1 shall survive the expiration or earlier termination of this Lease.

5. 2 Holding Over. This Lease shall expire without further notice at the expiration of the Lease Term, and no holding over shall be permitted. Any holding over by Tenant after expiration shall not constitute a renewal or extension, nor shall it give Tenant any rights in or to the Premises, or any part thereof. If Tenant shall hold the Premises or any portion thereof after the expiration of the Lease Term, such holding over shall, in the absence of written agreement of Landlord on the subject, be deemed to have created a tenancy from month- to- month terminable on thirty ( 30) days' written notice by either party to the other, at a monthly rental equal to 150% of the average monthly Rent payable during the last year ofthe Lease Term. If Landlord subsequently terminates the aforementioned month-to- month tenancy by providing not less than thirty( 30) days' prior written notice of such termination to Tenant, and Tenant does not vacate the Premises by the required date, then such holdover by Tenant shall thereafter constitute a tenancy at sufferance and Tenant shall be in default under this Lease.

5. 3 Failure to Surrender. If Tenant fails to surrender the Premises, or any part thereof, as required hereunder, Tenant shall defend, protect, indemnify, and hold harmless Landlord, its affiliates, and their respective officers, directors, board members, employees, agents, and contractors harmless from any claims, liabilities, losses, damages, costs and expenses, including but not limited to attorneys' fees, including but not limited to claims made by any succeeding Tenant, founded on or resulting from Tenant's failure to surrender on or before such date. Tenant's obligations under this Section 5 shall survive the expiration or earlier termination of this Lease.

6. MISCELLANEOUS PROVISIONS

6. 1 Construction. Since the parties or their agents have reviewed this Lease, the language ofthis Lease shall be construed simply, according to its fair meaning, and not strictly for or against any party.

6. 2 Notices. Any notice, demand, request, consent, approval, communication either party desires or is required to give the other party or any other person shall be in writing, addressed as specified below, and sent by prepaid, first-class certified mail or reputable overnight delivery service to the address set forth below. Either party may change its address by notifying the other party of the change of address in writing. Notice sent in accordance with this Section 5. 2 shall be deemed communicated upon receipt or first refusal of delivery To Tenant: To Landlord:

CITY OF COVINA Bently Real Estate, LLC
125 E. College Street 1932 E. Garvey Ave South
Covina, CA 91723 West Covina, CA 91791
Attention: City Manager Attn: Tarif Alhassen

6. 3 No Other Agreements. This Lease contains all of the Leases of the parties with respect to the subject matter hereof, and all previous and contemporaneous discussions, negotiations and oral agreements are integrated into and superseded by this Lease.

6. 4 Counterparts. This Lease may be signed in counterparts, each of which shall constitute an original.

6. 5 Severability. In the event that any one or more ofthe phrases, sentences, clauses, paragraphs, or sections contained in this Lease shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity or unenforceability shall not affect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Lease which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder.

6. 6 Authority. The persons executing this Lease on behalf of the parties hereto warrant that they are duly authorized to execute this Lease on behalf of said parties and that by so executing this Lease the parties hereto are formally bound to the provisions of this Lease.

6. 7 Binding Effect. This Lease shall bind and inure to the benefit of the parties and their successors and assigns and successors- in- interest.

6. 8 Reservation of Governmental Rights. Nothing in this Lease is intended to or shall waive or alter any city ordinances or any ofthe Tenant' s rights or powers as a governmental entity; except that, Tenant acknowledges and agrees that, as material consideration to Landlord without which Landlord would not be willing to enter into this Lease, ( i) Tenant shall not have the right to exercise any such powers in a manner which increases Landlord' s obligations or decreases Landlord' s rights hereunder or decreases Tenant' s obligations or increases Tenant' s rights hereunder, and( ii) Tenant shall not terminate this Lease during the Initial Term or modify Tenant' s obligations hereunder, and that it shall be a condition precedent to any termination of this Lease by Tenant during the Initial Term that ( i) Landlord shall not incur any cost, expense, liability or obligation as a result of such termination or modification, ( ii) such termination shall have no effect with respect to the Exchange Agreement and/ or the conveyances which occur pursuant thereto or the parties' rights thereunder, and that Tenant shall indemnify, defend and hold Landlord harmless from and against any and all claims, losses, damages, liabilities, costs and expenses ( including attorneys' fees) arising in connection with any such termination or modification.

6. 9 Memorandum of Lease. Concurrently with its execution ofthis Lease, Tenant shall execute and deliver to Landlord, duly acknowledged, ( i) a counterpart of a Memorandum of Lease for this Lease in the form attached hereto as Exhibit " E" ( the " Memorandum"), and ( ii) a counterpart of a Termination of Memorandum of Lease in the form attached hereto as Exhibit" Ev1" ( the " Termination Memorandum"). Landlord shall be entitled to record the Memorandum among the public records, provided that Landlord shall not record the Termination Memorandum prior to the expiration or other termination of this Lease. Tenant shall not record this Lease, or a short form memorandum, without Landlord' s written consent and any such recording without Landlord' s written consent shall constitute an Event of Default.

6. 10 Time ofthe Essence. Time is ofthe essence of every provision hereof in which time is a factor.

6. 11 Limitation of Liability. Notwithstanding anything contained to the contrary in this Lease, whether express or implied, it is agreed that Tenant will look only to Landlord' s interest in and to the Premises for the collection of any judgment ( or other judicial process) requiring the payment of money by Landlord in the event of a breach or default under this Lease by Landlord and no other property or assets of Landlord, its directors, officers, shareholders, members, partners or other principals ( disclosed or undisclosed) shall be subject to levy, execution or other enforcement procedures for the satisfaction of any such judgment ( or other judicial process). In confirmation of the foregoing, if Tenant acquires a lien on such other property or assets, by judgment or otherwise, it shall promptly release such lien by executing, acknowledging and delivering an instrument in recordable form to that effect prepared by Landlord, but such instrument of release shall not release any such lien on the interest of Landlord in the Premises.

6. 12 Covenant Against Encumbrances. Except as expressly provided in this Lease, without the prior written consent of Landlord, which may be withheld in Landlord' s sole discretion, Tenant shall not and shall not cause or allow any other person to ( i) grant any easement, license or other recorded right in the Premises or any portion thereof, ( ii) make application for or take any action to effect any change in zoning or any entitlements ofthe Premises,( iii) make any application for or record any tract map, parcel map, condominium plan, condominium declaration, or plat of subdivision that would affect the Premises, or ( iv) otherwise record or execute any documents or instruments which may be recorded affecting the Premises. Notwithstanding the foregoing but subject to the provisions of Section 6. 8, the foregoing shall not be deemed to limit Tenant' s right to exercise its powers as a governmental entity in a manner that effects properties generally, as opposed to any action which affects the Premises specifically.

6. 13 Force Majeure. In the event that either party hereto shall be delayed or hindered in or prevented from the performance of any act required hereunder by reason of strikes, lock- outs, labor troubles, inability to procure materials, failure of power, restrictive governmental laws or Regulations, governmental order, shutdown or similar mandate in connection with a current or future pandemic ( including the coronavirus disease ( COVID- 19)), riots, insurrection, war, acts of terrorism, sabotage, material fire or other material casualty, pandemic, epidemics, diseases, or an extraordinary and material act of God( such as a tornado, hurricane or earthquake), or other reason of a like nature not the fault or within the control ofthe party delayed ( each, an" Force Majeure") in performing work or doing acts required under the terms of this Lease, then performance of such act shall be excused for the period of the delay and the period for the performance of any such act shall be extended for a period equivalent to the period of such delay. The provisions ofthis Section shall not operate to excuse prompt payment of any Rent and/ or other payments to be made by Tenant pursuant to this Lease.
signatures appear on following page]
Exhibit" C"

IN WITNESS WHEREOF, Landlord and Tenant have executed this Lease as of the date first written above.

LANDLORD: TENANT:

BENTLY REAL ESTATE, LLC CITY OF COVINA,
a California municipal corporation
By:

Tarif Alhassen, Manager By:

Chris Marcarello, City Manager
ATTEST:

By:

Nicole Alvarez, City Clerk
APPROVED AS TO FORM:

By:

Candice Lee, City Attorney

EXHIBIT " A"

DESCRIPTION OF LAND
Real property in the City of Covina, County of Los Angeles, State of California, described as follows:

LOT 6 OF TRACT NO. 1224, IN THE CITY OF COVINA, AS PER MAP RECORDED IN BOOK 18, PAGES 50 AND 51 OF MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

APN: 8431- 028- 006 ( Old APN); 8431- 028- 111 ( New APN)

EXHIBIT " B"

DESCRIPTION OF LANDLORD CLIPPINGER PROJECT WORK
The Clippinger site project( the" Project") is located on the northwest corner of Citrus Avenue and San Bernardino Road and consists of a" mixed- use" development comprising 161 residential units 105 units " stacked" above the ground floor commercial space and 56 3- story townhouses) and 15, 000 square feet of commercial space. The Project entitlements were approved by the Covina City Council on June 16, 2020 pursuant to Covina City Council Resolution CC 2020- 54 and Resolution CC 2020- 55 which approved the following entitlements:

1. Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program; and,

2. Tentative Tract Map( TTM) 73661 and Site Plan Review ( SPR) 16- 028. 1292 3- 0001\ 2619709v2. doc

EXHIBIT " B- 1"

DESCRIPTION OF LANDLORD' S WORK
401 N. Citrus Avenue
Commercial Development
Warm Shell" deliverable expectations
June 2022

1. The " Warm Shell" ( Building BA and BB) shall be delivered to the tenant pursuant to the Construction plans approved by the City of Covina Building and Safety Division, identified as Permits:
a. # 10676 ( BA) 3280sf 2 story Mixed use building Permit Issued( PI): 8/ 1/ 2019, b. # 10679 ( BB) 1900sf 1 story Commercial building Permit Issued ( PI): 8/ 21/ 2019, c. # 10825 Finish Grading Permit Issued ( PI): 05/ 23/ 19 d. Pending permits: LA County Fire sprinklers and LA County Fire Alarm

2. All HVAC/Mechanical Equipment shall be installed and functional;

3. All fire/life safety features required of buildings in order to receive a determination of Substantially Complete" by the City of Covina Building Official shall be installed and functional;

4. An ADA- accessible restroom shall be installed in Building BABB;

5. Installation and certification of the Elevator;

6. Prior to the delivery of the" Warm Shell" and before the determination by the Covina Building Official of a" Substantially Complete" status, a set of" as- built" plans shall be prepared by the Landlord and delivered to the Covina Building and Safety Division that accurately illustrates all alterations and/or modifications in the completed structures versus the improvements that were approved in the Construction plans( example: the Construction plans indicate a pedestrian door exiting from the southerly façade of Building BA onto the Orange Street sidewalk. The aforementioned pedestrian door has been eliminated.);

7. The grease inceptor shall remain in its location with the outflow piped in a southerly manner to connect to the sewer in the Orange Street right-of-way;

8. Pay outstanding balances on SPR, CUP, Engineering and permit fees, impact fees of all associated applications to property. ( Invoices to be provided prior to final inspection); and,

9. The exterior of the 401 N. Citrus Avenue " Warm Shell" shall be fully completed pursuant to Site Plan Review ( SPR) 15- 043, including all Conditions of Approval 12923- 0001\ 2619709v2. doc

EXHIBIT " C"

DESCRIPTION OF TENANT ROAD IMPROVEMENTS
Description of Citrus Avenue Improvements
To be Performed by the City of Covina
Construction work for Citrus Avenue(" Street Rehabilitation"):

The project consists in a street rehabilitation of 2 inches" Cold Mill" and 2 inches Asphalt Concrete AC") rubber overlay, construction of new curb ramps per ADA compliance, removal and replacement of sidewalk, curb and gutter and cross gutter, installation of" in- pavement" flashing cross walk at midblock cross walks, installation of new landscape at the existing center median between the Metrolink Station and Cypress Avenue, installation of new striping and signage including Type II Bike Lane and other miscellaneous improvements.

The construction limits of the project are from Workman Avenue to Badillo Street and from San Bernardino Road to Covina Boulevard. The Citrus Avenue Street Rehabilitation project will be completed by July 2023.

Construction work for Citrus Avenue/ Geneva Place(" Cross Gutter/ High Point"):

The Cross Gutter/ High Point work consists of the following:

The construction of a north/ south " ribbon gutter" connecting the existing gutter plate on the west side of Citrus Avenue, north and south of Geneva Place( crossing Geneva Place).

Construction of a " high point", running in a north/ south orientation, immediately west of the Geneva Place cross gutter. A " high point" is a configuration within the Geneva Place street, where a portion of the street has a slight " rise" or " hump" where the " crest" of the high point" is a higher elevation grade than the street surface immediately east and west of the " high point" feature. The purpose of a " high point" feature is to redirect surface water flow to stay on the easterly side of the " high point" and be redirected to be captured by the cross gutter.

The cross gutter/ high point construction will require improvements and/ or reconfiguration to existing curb and gutter on the north and south sides of Geneva Place and Citrus Avenue.

The area of construction is indicated on the attached exhibit and indicated in the " yellow" highlight.
12923- 0001\ 2619709v2. doc

Image Showing Area of Citrus Avenue Improvements
To be Performed by the City of Covina
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12923- 0001\ 2619709v2. doc

EXHIBIT " D"

TENANT INITIAL ALTERATIONS
Tenant Initial Alterations

1. Installation of Broadband Internet Infrastructure;

2. Installation of" IT" equipment within a constructed" IT" closet;

3. Installation of a" kitchenette", including sink( water and sewer connection)), tile backsplash and cabinets ( floor and wall mounted);

4. Interior electrical outlets ( wall mounted and " drop- down" ceiling);

5. Floor coverings;

6. Interior wall finishing( Painting, art" wrap", wall art, etc.);

7. Lighting fixture installation;

8. Installation of security systems ( alarm and CCTV);

9. Electronic keypad and/ or" fob" entry system;

10. Installation of exterior wall mounted identification signage ( illuminated);

11. Installation of exterior wall mounted informational signage;

12. Installation of service counter( s);

13. Installation of modular office furnishings and privacy panels, such as:
a. Enclosed private work- stations;
b. Enclosed conference/ meetings rooms; and,
c. Semi private work- stations.
12923- 0001\ 2619709v2. doc

401 N. CITRUS AVENUE FIRST AND SECOND LEVELS
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12923- 0001\ 2619709v2. doc

EXHIBIT " E"

FORM OF MEMORANDUM OF LEASE
Attached.)
12923- 0001\ 2619709v2. doc

RECORDING REQUESTED BY, AND WHEN
RECORDED MAIL TO:

City of Covina
125 E. College Street
Covina, CA 91723
Attn: City Clerk
Space Above For Recorder' s Use Only]
The undersigned Landlord declares that this Memorandum of Lease is exempt from Recording Fees pursuant to California Government Code Section 27383.

MEMORANDUM OF LEASE
THIS MEMORANDUM OF LEASE( this " Memorandum") is dated as of 2022 and is entered into by and between BENTLY REAL ESTATE, LLC, a California limited liability company(" Landlord") and the CITY OF COVINA, a California municipal corporation (" Tenant").

RECITALS
A. Landlord and Tenant have entered into that certain Lease dated 2022 for premises at 401 N. Citrus Avenue in Covina, California owned by Landlord Premises").

B. Landlord and Tenant now desire to record this Memorandum in order to enable Tenant to obtain leasehold title insurance for the Lease.

AGREEMENT
NOW, THEREFORE, in consideration ofthe foregoing recitals, and the covenants and conditions contained in the Lease, and for other consideration, the sufficiency of which are hereby acknowledged, Landlord and Tenant hereby agree as follows:

1. Lease of Premises. Landlord has leased the Premises to Tenant, and Tenant has leased the Premises from Landlord, upon and subject to the terms and conditions set forth in the Lease. The Lease is hereby incorporated herein by this reference.

2. Term. The term of the Lease shall commence on 2022 (" Term Commencement Date"), and shall expire at 11: 59 pm on the last day immediately preceding the first day ofthe ninety- ninth ( 99th) month after the Term Commencement Date, subject to extension by Tenant as provided in the Lease.
12923- 000 l\ 2619709v2. doc

IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of the date and year first above written.

LANDLORD:

BENTLY REAL ESTATE, LLC
By:

Print Name:

Title:

TENANT:

CITY OF COVINA
By:

Print Name:

Title:
12923- 0001\ 2619709v2. doc

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

State of California
County of
On before me,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/ her/ their authorized capacity( ies), and that by his/ her/their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws ofthe State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature Seal)
12923- 0001\ 2619709v2. doc

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

State of California
County of
On before me,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/ her/ their authorized capacity( ies), and that by his/ her/their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws ofthe State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature Seal)
12923- 0001\ 2619709v2 doe

EXHIBIT " E- 1"

FORM OF TERMINATION OF MEMORANDUM OF LEASE
Attached.)
12923- 0001\ 2619709v2. doc

RECORDING REQUESTED BY, AND WHEN
RECORDED MAIL TO:

City of Covina
125 E. College Street
Covina, CA 91723
Attn: City Clerk
with a copy to:

Bently Real Estate, LLC
Space Above For Recorder' s Use Only]
The undersigned Landlord declares that this Termination of Memorandum of Lease is exempt from Recording Fees pursuant to California Government Code Section 27383.

TERMINATION OF MEMORANDUM OF LEASE
THIS TERMINATION OF MEMORANDUM OF LEASE ( this " Termination") is dated as of 20 and is entered into by and between BENTLY REAL ESTATE, LLC, a California limited liability company(" Landlord") and the CITY OF COVINA, a California municipal corporation (" Tenant").

RECITALS
A. Landlord and Tenant entered into that certain Lease dated 2022 for premises at 401 N. Citrus Avenue in Covina, California owned by Landlord (" Premises").

B. Landlord and Tenant recorded a Memorandum of Lease dated 2022 on 2022 as Document No. in the Official Records of Los
Angeles County, California (the" Memorandum").

C. The Lease has expired or been terminated, and Landlord and Tenant now desire to record this Memorandum in order to terminate the Memorandum of record.

TERMINATION
NOW, THEREFORE, in consideration of the foregoing recitals, and other consideration, the sufficiency of which is hereby acknowledged, Landlord and Tenant hereby terminate the Memorandum.

IN WITNESS WHEREOF, Landlord and Tenant have executed this Memorandum as of the date and year first above written.
12923- 0001\ 2619709v2. doc

LANDLORD:

BENTLY REAL ESTATE, LLC
By:

Print Name:

Title:

TENANT:

CITY OF COVINA
By:

Print Name:

Title:
12923- 0001\ 2619709v2. doc

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

State of California
County of
On before me,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/her/their authorized capacity( ies), and that by his/ her/their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature Seal)
12923- 0001\ 2619709v2. doc

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

State of California
County of
On before me,
insert name and title of the officer)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/her/their authorized capacity( ies), and that by his/ her/their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws ofthe State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature Seal)
1507577. 3

EXHIBIT " D"

DESCRIPTION OF LANDLORD' S WORK
401 N. Citrus Avenue
Commercial Development
Warm Shell" deliverable expectations
June 2022

1. The " Warm Shell" ( Building BA and BB) shall be delivered to the tenant pursuant to the Construction plans approved by the City of Covina Building and Safety Division, identified as Permits:
a. # 10676 ( BA) 3280sf 2 story Mixed use building Permit Issued( PI): 8/ 1/ 2019, b. # 10679 ( BB) 1900sf 1 story Commercial building Permit Issued ( PI): 8/ 21/ 2019, c. # 10825 Finish Grading Permit Issued ( PI): 05/ 23/ 19 d. Pending permits: LA County Fire sprinklers and LA County Fire Alarm

2. All HVAC/ Mechanical Equipment shall be installed and functional;

3. All fire/ life safety features required of buildings in order to receive a determination of Substantially Complete" by the City of Covina Building Official shall be installed and functional;

4. An ADA-accessible restroom shall be installed in Building BA/BB;

5. Installation and certification of the Elevator;

6. Prior to the delivery of the" Warm Shell" and before the determination by the Covina Building Official of a" Substantially Complete" status, a set of" as- built" plans shall be prepared by the Landlord and delivered to the Covina Building and Safety Division that accurately illustrates all alterations and/ or modifications in the completed structures versus the improvements that were approved in the Construction plans( example: the Construction plans indicate a pedestrian door exiting from the southerly façade of Building BA onto the Orange Street sidewalk. The aforementioned pedestrian door has been eliminated.);

7. The grease inceptor shall remain in its location with the outflow piped in a southerly manner to connect to the sewer in the Orange Street right- of-way;

8. Pay outstanding balances on SPR, CUP, Engineering and permit fees, impact fees of all associated applications to property. ( Invoices to be provided prior to final inspection); and,

9. The exterior ofthe 401 N. Citrus Avenue " Warm Shell" shall be fully completed pursuant to Site Plan Review ( SPR) 15- 043, including all Conditions of Approval 12923- 0001\ 2619709v2.doc

EXHIBIT " E"

DESCRIPTION OF CLIPPINGER SITE
The Clippinger site project( the" Project") is located on the northwest corner of Citrus Avenue and San Bernardino Road and consists of a" mixed- use" development comprising 161 residential units 105 units " stacked" above the ground floor commercial space and 56 3- story townhouses) and 15, 000 square feet of commercial space. The Project entitlements were approved by the Covina City Council on June 16, 2020 pursuant to Covina City Council Resolution CC 2020- 54 and Resolution CC 2020- 55 which approved the following entitlements:

1. Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program; and,

2. Tentative Tract Map ( TTM) 73661 and Site Plan Review( SPR) 16- 028.

EXHIBIT " F"

FORM OF CITY PROPERTY DEED

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

Bently Real Estate, LLC
1932 E. Garvey Ave South
West Covina, CA 91791
Attn: Tarif Hassan
APNs:

Space Above For Recorder' s Use)
The undersigned grantor declares:

DOCUMENTARY TRANSFER TAX$
computed on full value of property conveyed, or
computed on full value less liens and encumbrances remaining at time of sale.

Unincorporated Area _ X City of Covina

QUITCLAIM DEED
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the CITY OF COVINA (" City"), hereby conveys to BENTLY REAL ESTATE, LLC, a California limited liability company, all right, title and interest, if any, in that certain real property which is more particularly described on Exhibit A attached hereto ( collectively, the " Property"), together with all improvements thereon, that City may have( without representation or warranty, express or implied), and subject to all matters of record and all matters visible upon inspection.

IN WITNESS WHEREOF, Grantor has executed this Quitclaim Deed on the day and year hereafter written.

Dated: 202

CITY OF COVINA
By:

Name:

Title:
12923- 0001\ 2641052v2. doc

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

State of California
County of
On before me,
insert name of notary)
Notary Public, personally appeared
who proved to me on the basis of satisfactory evidence to be the person( s) whose name( s) is/ are subscribed to the within instrument and acknowledged to me that he/ she/ they executed the same in his/ her/ their authorized capacity( ies), and that by his/ her/their signature( s) on the instrument the person( s), or the entity upon behalf of which the person( s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature Seal)

ATTACHMENT B

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ATTACHMENT C

SECOND AMENDMENT TO EXCHANGE AGREEMENT
This SECOND AMENDMENT TO EXCHANGE AGREEMENT (“Second
Amendment”) is dated as of October 21, 2025 and is entered into by and between BENTLY REAL ESTATE, LLC, a California limited liability company (“Bently”), and the CITY OF COVINA, a California general law city (“City”).

RECITALS
A. Bently and City entered into an Exchange Agreement dated April 19, 2022 and amended it by a First Amendment to Exchange Agreement dated September 5, 2023 (the “Agreement”).

B. Bently and City desire to further amend the Agreement.

NOW, THEREFORE, in consideration of the foregoing recitals, the mutual terms and agreements set forth in this Second Amendment and other consideration, the sufficiency of which is hereby acknowledged, Bently and City hereby agree as follows:

AMENDMENTS

1. Two Closings; Deliveries; Conditions. The text of Section 1.3 of the Agreement is deleted and is replaced by the following (and which shall prevail in the event of conflict with any other section of the Agreement):
“There shall be two closings.

The first closing shall consist of the execution and delivery of counterparts of the Lease and the recording of the Memorandum of Lease, and shall occur on or before October 28, 2025. The deliveries by City in connection with such first closing shall consist of 3.2(b), (c), and (d); the deliveries by Bently shall consist of all items in Section 3.3. The conditions to Bently’s obligation to close on the first closing shall be those in Sections 4.1.1 and 4.1.3, and the conditions to the City’s obligation to close on the first closing shall be those in Sections 4.2.1 and 4.2.3. .

The second closing shall consist of the execution and recording of the Deed. The deliveries by City in connection with such second closing shall consist of those in Sections 3.2(a) and (d); the deliveries by Bently shall consist of all items in Section 3.3. The conditions to Bently’s obligation to close such second closing shall consist of Sections 4.1.1, 4.1.2, 4.1.3 and 4.1.4. The conditions to City’s obligation to close such second closing shall consist of Section 4.2.1, 4.2.3 and 4.2.4, and the completion by Bently of the work described on Exhibit A to the Second Amendment of Exchange Agreement, which Bently shall diligently prosecute to completion”

2. Term of Lease. The term of the Lease shall not commence until Bently shall have completed Items 4 (bathrooms) and 5 (elevator) of the list of work described on Exhibit A hereto; however, City shall nevertheless have right of possession of the leased property upon the first

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12923-0001\3166044v3.doc
closing prior to and without Bently having completed Item 4 (bathrooms), Item 5 (elevators) or the other work described on Exhibit A hereto.

3. Effect on Agreement. All terms and conditions of the Agreement that are not modified by this Second Amendment shall remain unmodified, in full force and effect and binding on the parties.

4. Conflict. In the event of a conflict between the terms and conditions of this Second Amendment and the terms and conditions of the Agreement, the terms and conditions of this Second Amendment shall control.

5. Counterparts. This Second Amendment may be signed in counterparts (including electronic counterparts), each of which shall be deemed an original, and all such counterparts, when taken together, shall constitute one agreement.

6. Entire Agreement. The Agreement, as amended by this Second Amendment, represents the entire understanding between the parties as to the subject matter of the Agreement, as so amended.

IN WITNESS WHEREOF, Bently and City have executed this Second Amendment as of the date first set forth above.

CITY:

CITY OF COVINA,
a municipal corporation
By:

Chris Marcarello
City Manager
BENTLY:

BENTLY REAL ESTATE, LLC,
a California limited liability company
By: ____________________________
Mohammed Tarif Alhassen, Manager
ATTEST:

By:

Fabian Velez,
Chief Deputy City Clerk
APPROVED AS TO FORM:

By:

Kevin Ennis, City Attorney

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12923-0001\3166044v3.doc

EXHIBIT A

SECOND CLOSING BENTLY WORK
DESCRIPTION OF LANDLORD’S WORK
401 N. Citrus Avenue
Commercial Development
“Warm Shell” Deliverable Expectations

1. The “Warm Shell” (Building BA and BB) shall be delivered to the tenant pursuant to the Approved Construction Documents on file at the City of Covina Building & Safety Division, and identified as the following issued Building Permits:
a. Permit # 10676 (for Building BA) – 3,280 square foot 2-story “Mixed Use” Building Permit Issued (PI): 8/1/2019;
b. Permit # 10679 (for Building BB) – 1,900 square foot single-story “Commercial” Building Permit Issued (PI): 8/21/2019;
c. Permit # 1825 – Finish Grading Permit Issued (PI): 5/23/2019; and, d. Pending permits: Los Angeles County Fire Sprinklers and Los Angeles County Fire Alarm.

2. All HVAC/Mechanical Equipment shall be installed and functional and energized, with the exception of interior ducting/venting and system control electronics. Landlord certifies that said work has been completed at time of execution of this Second Amendment;

3. All Fire/Life Safety features required of buildings in order to receive a determination of “Substantially Complete” by the City of Covina Building Official shall be installed and functional;

4. An ADA-Accessible restroom shall be installed in Building BA & BB;

5. Installation and certification of a fully-functional Elevator to serve the public, which requires the completion of tasks as follows:
a. Complete the installation of the Elevator, which requires FINAL inspection and certification by the State of California. (NOTE: the elevator was indicated to be a “deferred submittal” on the original Construction Plans, but the elevator plans have not been received by the Covina Building & Safety Division). To facilitate the certification of said elevator, Landlord shall grant Tenant and Tenant’s contractor access to the building to install carpet tiles within said elevator. The installation of the carpet tiles will be paid for by the Tenant.

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12923-0001\3166044v3.doc
b. STATE OF CALIFORNIA INSPECTION AND CERTIFICTION (PENDING) - including fiber communication line inter-connection;

6. Within sixty-days (60-days) from Prior to the delivery of the “Warm Shell”, and before the determination by the Covina Building Official, of a “Substantially Complete building status, a set of “as-built” plans shall be prepared by the Landlord and delivered to the Covina Building & Safety Division that accurately illustrates all alterations and/or modifications in the completed structures versus the improvements that were approved in the Construction Plans (example: the Construction Plans indicate a pedestrian door exiting from the southerly façade Building BA onto the Orange Street sidewalk. The aforementioned pedestrian door has been eliminated during construction);

7. Fire Alarm System: - Los Angeles County Fire Department Requirement. No permit on file.

WAITING ON SUBMITTAL BY LANDLORD;

8. The grease interceptor shall remain in its present location with the outflow piped in a southerly manner to connect to the sewer in the Orange Street right-of-way (Completed);

9. The Landlord has paid all outstanding balances on SPR, CUP, Engineering and other permit fees, impact fees of all associated applications to the property (invoices to be provided prior to final inspection), with the exception of any outstanding and future invoices from the City’s stormwater consultant; and,

10. The exterior of the 401 N. Citrus Avenue “Warm Shell” shall be fully completed pursuant to Site Plan Review (SPR) 15-043, including all Conditions of Approval. As of October 21, 2025, the required installation of exterior landscaping and handrails are outstanding and have not been completed, though they are required to be prior to the City’s acceptance of the full scope of work to be delivered by Bently.

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. PH 1
Meeting: October 21, 2025
Title: Adoption of Urgency Ordinance 25-11
Presented by: Brian K. Lee, Deputy City Manager/Community Development Director Recommendation: Request the City Council adopt Ordinance 25-11, an urgency ordinance, establishing a moratorium on “Short-Term Rentals” and “Home Experience Sharing” Uses within the City, for a period of 45 days, expiring December 5, 2025.

EXECUTIVE SUMMARY:

In recent years, the rental of residential properties for thirty (30) days or less, known as “Short-Term Rentals,” has become increasingly popular. While these rentals offer financial benefits to property owners and provide visitors with affordable accommodation options in the City, they also have adverse effects on residential neighborhoods. These issues include disturbances from parties and late-night activities, illegally parked vehicles, and insufficient parking spaces.

Additionally, the rise of “Home Experience Sharing” provides unique lodging and recreation options, featuring amenities such as pool rentals, playgrounds (including basketball, tennis, and pickleball courts), and spacious yards. While these features may enhance the guest experience and positively impact the local economy, the rapid growth of such activities in single-family residential areas has raised several concerns. These concerns include issues related to safety, property maintenance, and the overall effect on local communities, as quiet single-family homes transform into part-time temporary rentals and event spaces.

BACKGROUND & DISCUSSION:

The City of Covina has experienced an increase in the number of dwelling units—whether single-family homes, multi-family residences, guest houses, accessory dwelling units, or junior accessory dwelling units—used as Short-Term Rentals and/or for Home Experience Sharing. With the growth of home experience sharing, the City is concerned about the negative impacts this transient use may have on neighboring properties. Therefore, it is essential to balance the City’s desire to encourage economic development and tourism with its obligation to address the adverse effects often associated with home experience sharing.

On September 2, 2025, the City Council held a public meeting to consider the Urgency Ordinance. However, the meeting was continued to October 21, 2025, due to a lack of a four-fifths vote, per California Government Code Section 65858.

On August 24, 2024, the Planning Commission held a study session to discuss a draft proposal for a Short-Term Rental Ordinance. This session was publicized across all City of Covina social media platforms, inviting residents to engage, learn, and comment on the draft ordinance. A copy of the Planning Commission minutes from August 27, 2024, and the staff report packet are attached as “Attachment A.” Short-Term Rentals (STRs) refer to the rental of a habitable portion of a dwelling or specific areas or amenities of a dwelling, including swimming pools, backyards, etc. The Short-Term Rental or Rental Business can be rented by the owner to another person or group for occupancy, lodging, or sleeping purposes for a period not exceeding

30 consecutive calendar days. These rentals are often advertised on platforms like Airbnb, Vrbo, and others, providing travelers with a flexible and often more spacious alternative to traditional hotels.

A rising trend is the rental of recreational amenities (e.g., swimming pools; playgrounds; barbeques and grills; pickleball courts, tennis courts, and other sports areas; and other exterior portions of real properties) separate and apart from the rental of the residential dwelling – a use that is commonly known as “Home Experience Sharing”.

Recreational amenities as part of a Home Experience Sharing are generally rented by the hour; however, they are generally rented for multiple hours at a time, and some property owners provide “monthly passes” allowing for extended hours throughout the month. Moreover, Home Experience Sharing is often used for hosting parties and other social events, resulting in large gatherings of non-residents within residential properties. Similar to ShortTerm Rentals, the rapid growth of Home Experience Sharing also creates or contributes to a number of adverse impacts upon residential neighborhoods – including, but not limited to, increased noise, disorderly conduct, and lack of adequate off-street parking for residents, which, in turn, would result in potential conflicts between Home Sharing Experience guests and neighbors – and an increased expenditure of City resources in responding to complaints. Additionally, Home Experience Sharing raises health and safety concerns as there are currently no regulations pertaining to minimum standards for maintenance of the recreational amenities, sanitation facilities (especially since the recreational facilities are not rented in conjunction with a residential building), and insurance coverage to cover accidents or injuries suffered by these social guests.

The purpose of establishing this Interim Ordinance is to promote public peace, health, and safety by prohibiting the use or residential property for Short Term Rentals and Home Experience Sharing uses until the City has time to study and adopt adequate regulations on the location, standards, occupancy, and operations of such uses. This will help protect residential neighborhoods from:
 Undue noise
 Overcrowding
 Disturbances caused by parties and the resulting police responses  Excessive litter and trash
 Public drug use
 Reduction of street parking
 Increased vehicular violations
 Disruptions to safe traffic flow
 The frequent arrival and departure of transient guests unfamiliar with the neighborhood, which can affect local quality of life
There is a need for the City to establish operational requirements, regulations, and restrictions on the use of privately-owned residential dwellings for Short-Term Rentals (STRs) and Home Experience Sharing. The goal is to minimize the negative secondary effects on residential neighborhoods, ensuring the health, safety, welfare, and quality of life for residents. Our primary focus is to mitigate the rapid growth of such activities in single-family residential neighborhoods, address their impacts on local communities, and prevent the transformation of quiet single-family neighborhoods into part-time rental and event spaces.

Additionally, the emergence of Home Experience Sharing services has raised concerns within the community.

This includes private backyard pool rentals through apps like "Swimply" as well as large private events at homes with amenities like basketball courts, pools, and gazebos. Recently, a property owner in Covina notified nearby residents about their plans to modify their property for use as a Home Experience Sharing venue. Complaints received by city staff have led to a request for more time to conduct further research and refine the draft ordinance.

Regular events that occur throughout the week, including holidays and late-night activities, can significantly impact the neighborhood, especially when they become commonplace. Addressing these issues is crucial for maintaining neighborhood harmony and ensuring that the benefits of home-sharing experiences do not come at the cost of community well-being.

The City is committed to maximizing the benefits of home-sharing but recognizes the need for additional time to research and develop regulations that balance the interests of all parties involved. The current regulations are inadequate for managing the wide range of amenities being offered. A temporary moratorium will enable the City to create comprehensive and equitable regulations that address safety, maintenance, and community integration, ensuring that Short-Term Rental and Home Experience Sharing can coexist with the needs of residents.

PUBLIC NOTICING:

California Government Code Section 65858 provides that, without following the procedures otherwise required prior to the adoption of a zoning ordinance, an urgency measure in the form of an interim ordinance may be adopted by a four-fifth vote of the City Council to protect the public from a current and immediate threat to the public health, safety, or welfare resulting from a contemplated zoning proposal.

Upon the 45-day expiration date of December 5, 2025, city staff will request to extend the moratorium an additional 10 months and 15 days, and a public hearing notice will be published and noticed for City Council consideration and action.

URGENCY ORDINANCE:

Section 65858 further provides that such an urgency measure shall expire 45 days following its adoption; however, such a measure may be extended beyond the initial 45-day period, following compliance with Government Code Section 65868, for either (i) an additional 10 months and 15 days, and subsequently for an additional 12 months, or (ii) for a period of 22 months and 15 days to provide the City with additional time to study the potential impacts of Short Term Rental and Home Experience Sharing Uses and measures for mitigating the public safety, health and welfare concerns described above.

Government Code Section 65858(d) requires the City to issue a written report describing the measures taken to alleviate the condition that led to the adoption of the initial interim ordinance 10 days prior to expiration for purposes of extending the urgency ordinance.

With the adoption of Urgency Ordinance 25-11, the City Council would effectively prohibit Short-Term Rental and Home Experience Sharing Uses within the city limits, for a period 45 days, expiring December 5, 2025, which may be extended. This would allow time for the City to research best practices to further refine and improve the city’s current draft Short-Term Rental and Home Experience Sharing Ordinance, before bringing the draft ordinance to the City Council consideration.

FISCAL IMPACT:

No direct fiscal costs are associated with the adoption of this urgency ordinance.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

The ordinance was reviewed in accordance with the California Environmental Quality Act (CEQA) (Public Resources Code Section 21000 et seq.) and the Guidelines (Cal. Code Regs., tit. 14, §15000 et seq.) The interim ordinance is not subject to CEQA as it prohibits the use Home Experience Sharing (Short-Term Rental) uses in the City while the City studies appropriate regulations and is therefore not expected to lead to any direct or reasonably foreseeable indirect physical changes in the environment. CEQA Guidelines Section 15060(c)(2).

Furthermore, this Interim Ordinance exempt from CEQA pursuant to CEQA Guidelines Sections 15061(b)(3) because it can be seen with certainty that there is no possibility the activity in question may have a significant effect on the environment. This ordinance addresses a clear and imminent danger, precluding specified ShortTerm Rental and Home Experience Sharing uses in the City to protect life, health, property, and essential public services until appropriate regulations are adopted.

Respectfully submitted,

CITY OF COVINA

PLANNING COMMISSION AGENDA REPORT
ITEM NUMBER NB 2
AUGUST 27, 2024
TO: Chainnan and Members of the Planning Commission
FROM: Brian K. Lee, AICP, Director of Community Development SUBJECT: Study Session on Draft Short-Term Rental Regulations

BACKGROUND
The City of Covina has seen a substantial increase in the number of dwelling units, whether they be single-family residences, multiple-family residences, guest houses, accessory dwelling units, or junior accessory dwelling units, being used as short-term rentals. With the rise in the number of short-term rentals, the City is concerned over the adverse impacts caused by this transient use on adjacent properties. Accordingly, there is a need to balance the City's desire to promote economic development and tourism with the City's obligation to mitigate the adverse impacts often associated with short-term rentals.

The purpose and intent of this Ordinance is to promote the public peace, morals, health and safety by regulating the location, occupancy and operations of short-term rentals to protect residential neighborhoods against:
• Undue noise
• Overcrowding
• Disturbances caused by parties and the accompanying police response • Excessive litter and trash
• Public drug use
• Reduction of street parking
• Increased vehicular violations
• Disruptions of safe traffic flow
• The frequent coming, going and transient occupation of residential homes by strangers not known to or invested in the nei.ghborhood quality of life.

This Ordinance will establish and impose operational requirements and regulations for the use of privately--,owned residential dwellings as short--,term rentals in order to reduce the burden on City services; minimize the negative secondary effects of such use on residential neighborhoods; ensure the health, safety and welfare of persons residing in residential neighborhoods and 1

ATTACHMENT A

patronizing short---.term rentals; and ensure the City is collecting required transient occupancy taxes.

PUBLIC PARTICIPATION AND COMUNITY ENGAGEMENT
Public participation is an important aspect of the planning process for the adoption of new regulations that impact the community. City staff will develop strategies to engage the community through workshops and social media. The purpose of the community engagement is to infonn and obtain community feedback to ensure their concerns are understood and considered.

RECOMMENDATION
Staff recommends that the Planning Commission provide input and receive public comments on the proposed Short-Term Rental Draft Ordinance. The Planning Commission is not required to take any action.

Prepared by:

Mercenia Lugo
Planning Manager
ATTACHMENTS:

Exhibit A - Draft Short-Term Rental Ordinance
Approved by:

Exhibit B- STR Study Session Notice to City Social Media Platfonns 2

Exhibit A
Draft Short-Term Rental Ordinance

SHORT-TERM RENTAL ORDINANCE

CITY OF COVINA
Purpose and Intent
Definitions
Section--
Section--
Section--
Section--
Section--
Section--
Section--
Section--
Section--
Section--
Short-Term Rental Regulations
Permitted locations for Short-Term Rentals
Short-Term Rental limitations
Short-Term Rental Hosting Platforms
Required Permits, licenses, and Approvals
Enforcement
Violations
Revocations of Short-Term Rental Approvals

PURPOSE AND INTENT
The City of Covina has seen a substantial increase in the number of dwelling units, whether they be single-family residences, multiple-family residences, guest houses, accessory dwelling units, or junior accessory dwelling units, being used as short-term rentals. With the rise in the number of short-term rentals, the City is concerned over the adverse impacts caused by this transient use on adjacent properties. Accordingly, there is a need to balance the City's desire to promote economic development and tourism with the City's obligation to mitigate the adverse impacts often associated with short-term rentals.

The purpose and intent of this Ordinance is to promote the public peace, morals, health and safety by regulating the location, occupancy and operations of short-term rentals to protect residential neighborhoods against:

1. Undue noise

2. Overcrowding

3. Disturbances caused by parties and the accompanying police response

4. Excessive litter and trash

5. Public drug use

6. Reduction of street parking

7. Increased vehicular violations

8. Disruptions of safe traffic flow

9. The frequent coming, going and transient occupation of residential homes by strangers not known to or invested in the neighborhood quality of life.

This Ordinance will establish and impose operational requirements and regulations for the use of privately-owned residential dwellings as short-term rentals in order to reduce the burden on City services; minimize the negative secondary effects of such use on residential neighborhoods; ensure the health, safety and welfare of persons residing in residential neighborhoods and patronizing short-term rentals; and ensure the City is collecting required transient occupancy taxes.
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DEFINITIONS
"Applicant" is the person applying for a Short-Term Rental Permit and all other City approvals, licenses, and permits.
"Booking services" are reservation or payment services that facilitate a short-term rental transaction between a prospective renter and a host.
"City" is City of Covina.
"Co-Living" is a form of communal living in which occupants get a private bedroom in a furnished home with shared common areas such as kitchens, living rooms, laundries, and other similar rooms. Co-Living arrangements cannot exceed 30 days.
"Days" are calendar days, which are all days including Saturdays, Sundays, and holidays, unless otherwise specified.
"Good Cause" for the purposes of -denial, suspension, revocation, imposition of conditions, renewal, and reinstatement of a Short-Term Rental Permit, means {1) the host has failed to comply with any of the terms, conditions, or provisions of this Ordinance or any relevant provision of the Covina Municipal Code, State Law, or any City rule or regulation; (2) the host has failed to comply with any special conditions that were placed upon the Short-Term Rental Permit by City's Code Enforcement; or {3) the short-term rental has been operated in a manner that adversely affects the public health or welfare or the safe~y of the immedi~te neighborhood. "Good Neighbor Brochure" is a document prepared by the registered host that summarizes general rul~s of conduct, consideration, and respect, including provisions ofthe Covina Municipal Code applicable to or expected of guests of the short-term rental. "Guest" is the person renting a short-term rental for transient occupancy and includes all persons identified in the booking or reservation.
"Hearing Officer" is the City person responsible for conducting the public meeting for appeals of Short-Term Rental Permit denials, conditions, modifications, suspensions, and/or revocations. "Hosted Stay" is a home-sharing activity whereby the host (owner) remains on-site throughout the guest's stay (except during daytime and or work hours). "Un-Hosted Stay" is if the owner does not remain on-site at the residence during the guest's stay. "House Parties" are individual events where people gather at the residence of the party's host.

These house parties are typically associated with teenage or young adult crowds, loud music, dancing, and the consumption of alcohol, marijuana or other recreational drugs. Tickets could also be sold to attend these house parties.
"Listing" is an advertisement on a hosting platform that offers a short-term rental. 2

"Primary Residence" is a host's permanent residence or usual place of return for housing as documented by at least two ofthe following and in the host's name: motor vehicle registration, driver's license, voter registration, tax documents showing the residential unit as the host's residence; or a utility or cellular phone bill. A person may have only one primary residence and must reside there for a minimum of 9 months per year.
"Property Manager" is the owner, host, or other individual designated by the owner or host, who must be reachable by telephone at all times during all short-term rental stays to respond to timely and take remedial action regarding short-term rental complaints. "Registered Host" or "Owner" is a person who: (1) is an owner and permanent occupant of a dwelling unit; (2) has applied for and holds a valid registration for the dwelling unit pursuant to this Ordinance; (3) is an occupier of a dwelling unit who rents his/her primary residence for homesharing under this Ordinance; and (4) is also the person or persons who is/are the owner of record of the Property.
"Renewal" is when a registrant completes and submits an application annually, with the required fee payment for approval of a subsequent Short-Term Rental Permit. "Short-Term Rental" or "Short-Term Rental Business" shall mean the rental of a dwelling unit, a habitable portion of a dwelling, or specific areas or amenities of a dwelling including swimming pools, backyards, etc. The Short-Term Rental or Rental Business can be rented by the owner to another person or group of persons for occupancy, dwelling, lodging or sleeping purposes for a period no longer than 30 consecutive calendar days. Note that unit rentals within City-approved hotels, motels, or bed and breakfasts shall not be considered a short-term rental. ~ "Short-Term Rental Hosting Platform" is a person or business that provides a means through which a short-term rental host may offer a residence, a habitable portion of the residence, or specific areas, including swimming pools, backyards, etc. for purposes of a short-term rental, and from which the person or business financially benefits. The following services could be provided:
(1) Provides one or more online, computer or application-based platforms; (2) List or advertise offers for short-term rentals; (3) Either accept the offers, or reserve or pay for the rentals; and/or (4) Charges, collects or receives a fee for the use of the platform or for provision of any service in connection with a short-term rental.
"Short-Term Rental Neighborhood Percentage" is a percentage that is calculated by dividing the total number of residential dwelling units within a particular neighborhood that have been issued a Short-Term Rental Permit by the total number of residential dwelling units within that same neighborhood.
"Short-Term Rental Neighborhood Percentage Cap" is the maximum Short-Term Neighborhood Percentage allowed in a particular neighborhood. The Short-Term Rental Neighborhood Percentage Cap is set at twenty percent (20%). This Short-Term Rental Neighborhood Percentage Cap may be adjusted by the City Council by Ordinance or Resolution. 3

"Short-Term Rental Property" is a parcel of real property, as shown on the latest equalized tax assessment roll maintained by the Los Angeles County Assessor, upon which a short term rental residence is maintained.
"Short-Term Rental Residence" is a dwelling, or any portion, or a habitable accessory structure associated with a dwelling, which is being rented, or is intended to be rented, as a short-term rental to a person or group of persons.
"Transient Occupancy Tax (TOT)" is a tax that vacation rental hosts in California are required to charge their guests. The proceeds from the tax go towards funding local public services such as police, fire, and parks and recreation. The tax rate varies depending on the location of the rental but is typically between 10 to 12 percent. (City of Covina's current tax rate is 10%)

SHORT-TERM RENTAL REGULATIONS

1. Ownership: Short-term rentals shall only be allowed on properties owned by an individual or a personal trust.

2. Occupancy Restrictions: The occupancy limit shall be two persons per bedroom, plus an additional two persons. No more than eight persons total will be allowed. Children under the age of two shall not be counted toward the occupancy limit. The number of bedrooms in a shall be verified by the City using County Assessor and/or City Building records and/or a physical inspection of the property, prior to the issuance of a Short-Term Rental Permit.

3. Length of Stay: A minimum two-night and maximum 30-day stay for any booking.

4. The owner or registered host shall use prudent business property ownership and management practices to ensure that the guests do not create unreasonable noise disturbances, engage in disorderly conduct, or violate provisions of the Municipal Code or any State law. Short-term rentals must not adversely affect the residential character of the neighborhood by causing nuisance activities, including, but not limited to, illegal parking, disturbing the peace, excessive noise, vibration, glare, light, odors, littering, or other effects that unreasonably interfere with a community, neighborhood, or any persons' reasonable enjoyment of their residence.

5. Noise: There shall be no outdoor activity that could disturb the peace and quiet of the neighborhood adjacent to a short-term rental property or cause discomfort or annoyance to any person of normal sensitivity residing in the area between the hours of 10:00 PM and 9:00 AM. Any radio receiver, musical instrument, phonograph, loudspeaker, sound amplifier, or any machine or device for the producing or reproducing of any sound shall be conducted within the fully enclosed short-term rental residence and shall not be audible at the property line of the short-term rental property.

6. Trash and refuse shall not be left stored within public view, except in proper containers for the purpose of collection by the collectors and between the hours of 5:00AM and 8:00PM on scheduled trash collection days.
4

7. Short-term rentals must not be used to host any parties or events causing a nuisance that disrupts surrounding neighborhoods, including, but not limited to, open invite gatherings or parties advertised on social media, commercial events, commercial parties, commercial group gatherings, banquets, corporate events, or any event where an admission fee is charged.

8. Short-term rentals with on-site parking must make the on-site parking available for guests. If on-site parking includes an area with a shared easement, written consent must be secured from all easement holders by the host.

9. Good Neighbor Policies: To ensure that neighbors are aware of short-term rental bookings the following Good Neighbor Policies shall be satisfied:

A. The owner or registered host of a short-terrn rental shall notify each adjacent and facing property owner and each adult resident of said property, of the existence of the shortterm rental business and provide a written list of the rules and restrictions and up-to-date property manager contact information.

B. All guests of the short-term rental over the age of 14 years shall receive and sign a list of the rules and restrictions imposed on the short-term rental, as published by the City. A copy of said list of rules and restrictions shall be posted in a prominent location in the short-term rental at all times occupants are present. The list of rules and restrictions signed by occupants shall be made available to the City upon reasonable request.

10. Good Neighbor Brochure: A document prepared by the registered host or owner that summarizes general rules of conduct, consideration, and respect, including provisions of the Covina M1,.micipal Code applicable to and exp~cted of guests of the short-term rental. The Good Neighbor Brochure, which will be provided to the guests of the short-term rental, shall contain, at a minimum, ~he following information:

A. The name and telephone number of the property owner, managing agency, and Property Manager, at which each may be reached within 24 hours.

B. The maximum number of occupants permitted to stay in the short-term rental residence.

C. The trash pick-up day and applicable rules and regulations pertaining to leaving or storing trash or refuse on the exterior of the property.

D. Notification that any radio receiver, musical instrument, phonograph, loudspeaker, sound amplifier, or any machine or device for the producing or reproducing of any sound shall only be operated within a fully enclosed short-term rental residence and shall not be audible at the property line of the short-term rental.

E. Notification that the guest may be cited or fined by the City and/or immediately evicted by the owner or registered host pursuant to State law, in addition to any other remedies available by law, for creating a disturbance or for violating any provision of this Ordinance. 5

F. Notification that failure to conform to the occupancy requirements of the short-term rental residence is a violation of this Ordinance.

G. A copy ofthis Ordinance, as may be amended from time to time.

11. Property Manager: The owner or a registered host of a short-term rental shall provide each adult guest with the name and telephone number of the Property Manager who can arrive at the short-term rental location within thirty (30) minutes. This information shall also be provided as part of the Good Neighbor Brochure and shall be provided to the City's Business license Division.

During the rental term for the short-term rental, the owner, registered host, or property manager, after being contacted by the City, shall be available 24 hours per day, seven days per week, for the purpose of:

A. Responding by telephone within 15 minutes of complaints from or through the City phone line.

B. Responding in-person within 30 minutes to any additional or successive complaints regarding the condition, operation, or conduct of g~ests of the short-term rental.

12. Parking: At least one off-street parking space per bedroom of the short-term rental residence shall be required. All vehicles of short-term rental guests shall be parked only in an approved driveway or garage on the short-term rental property.

13. Lease or Rental Agreements: Short-term rentals that are located within a residence or property that are subject to a lease or rental agreement or the rules of a homeowners' or condominium association, must first comply with the provisions of these agreements and be granted permission to operate as a short-term rental.

14. Insurance: The owner of the short-term rental property shall maintain liability insurance of not less than $1,000,000 general aggregate. Proof in the form of a certificate of insurance shall be provided to the City upon submittal ofthe Short-Term Rental Permit application.

15. Required Safety Improvements and Equipment: The owner shall ensure that the short-term rental property complies with all appliable codes regarding fire, building and safety, health and safety, and all other relevant laws, and must provide and maintain in good working condition smoke detectors, carbon monoxide detectors, flashlights, double-keyed dead bolt locks, adequate and readily accessible fire extinguishers with tags showing the most recent inspection date, information and map related to emergency exit routes and emergency contact, and exterior lighting.

PERMITTED LOCATIONS FOR SHORT-TERM RENTALS
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1. Zones: Short-term rentals will only be allowed within the residential zones that permit detached single-family residential units and t he Mixed-Use Overlay Zone (Chapter 17.59 of the Zoning Code).

2. Distance Separation: Permitted short-term rentals shall be located at least 300 feet from any other permitted short-term rental, as measured from the closest property line by linear block frontage.

The following short-term rental businesses are exempt from and not considered in this distance separation requirement:

A. Short-term rentals in existence as of the effective date of this Ordinance, with an active Short-Term Rental Permit.

B. Short-term rental businesses at an owner-occupied residence in the form of an individual room rental or the rental of a habitable accessory structure.

3. The Short-Term Rental Neighborhood Percentage Cap for any residential neighborhood which defines the total allowable number of short-term rentals is 20 percent. This is a percentage that is calculated by dividing the total number of residences within a particular neighborhood that have been issued a Short-Term Rental Permit by the total number of residential units located within the same neighborhood. This Short-Term Neighborhood Percentage Cap may be adjusted by the City Council by Ordinance or Resolution.

INELIGLBLE SHORT-TERM RENTALS

1. Short-term rentals are prohibited in accessory dwelling units (ADUs); recreational vehicles; trailers; and/or City-approved hotels, motels, or bed and breakfasts.

2. Renting for profit of portions of residences to stage single-day events are prohibited, such as house parties, weddings, rehearsal dinners, dances, photo-shoots, recording activities, etc. if the residence is un-hosted, whereby, the owner does not remain on-site. If the residence is hosted, whereby, the owner remains on-site, these types of activities may be conducted as allowed by the City.

3. Events that require tickets for attendance are prohibited.

4. Any improvements to t he home that are required for the short-term rental are prohibited unless proper building permits are issued.

5. Affordable and Section 8 units are prohibited as short-term rentals.

6. Co-living arrangements (i.e., homeowners that rent bedrooms in the primary residence and share common rooms such as the kitchen, living room, etc.) t hat exceed 30 days are prohibited.
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SHORT-TERM RENTAL HOSTING PLATFORMS
Hosting rental platforms that provide booking services that list and/or advertise short-term rentals shall comply with the following:

1. Require that all property owners and/or registered hosts using the platform include a City Business License number in any listing for a short-term rental on the platform.

2. Provide the following information in an electronic format to the City on a quarterly basis.

These reports shall include:

A. The total number of short-term rentals listed on the platform during the applicable reporting period.

B. The total number of nights all short-term rental units were rented through the platform during the applicable reporting period.

3. If the City has not issued a Short-Term Rental Permit, but the hosting platform continues to advertise the listing, the hosting platform shall be required to discontinue and remove the listing or advertisement within ten (10) calendar days from the transmittal date of the City notification. The hosting platform shall not list or advertise the short-term rental without written certification from the City that the required Short-Term Rental Permit has been issued. In addition, the hosting platform will be required to pay a monetary fine as established by the City.

REQUIRED PERMITS, LICENSES, AND APPROVALS
The following describes those permits, licenses1 and approvals that are required for any shortterm rental in the City:

1. Requirements of Short-Term Rental Permits
A. General Provisions for Short-Term Rental Permits. All short-term rental activities are required to obtain a Short-Term Rental Permit and comply with the following requirements and provisions:
1) Short-Term Rental Permits shall be issued on a first come first served basis, with priority as determined by the Community Development Director or designee. 2) The maximum number of active Short-Term Rental Permits shall be established by resolution of the City Council.
3) Any approved Short-Term Rental Permit: (a) shall not constitute a vest ed right, (b) shall not run with the land, and (c) shall be personal and limited to the owner listed on the application.
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4) Short-Term Rental Permits are non-assignable, non-transferable, and will be null and void immediately upon any change of ownership, lease, or sub-lease of the registered property.
5) Any Short-Term Rental Permit shall expire one year from the date of issuance and can be renewed annually.
6) Short-Term Rental Permits may be renewed annually. If the renewal application is submitted prior to the expiration date of the current Short-Term Rental Permit, no late fees will be charged. If the Short-Term Rental Permit expires, then a new application and fees will be required to extend the short-term rental. 7) Short-Term Rentals must be reserved and paid for by an applicant at least 21 years old. 8) The City Community Development Director or designee shall have the authority to approve the Short-Term Rental Permit within 30 days after deeming the application complete (including receipt of required fees).
9) Denial By Community Development Director. If the Director does not approve the Short-Term Rental Permit application, a written notice of denial shall be mailed to the applicant and the reasons for denial within 30 calendar days after the Director's decision. The notice of denial shall also advise the applicant of their appeal rights (including method and timeline for requesting an appeal) as set forth in Section ---- of this Ordinance.
10) Short-Term Rental Permits shall not be issued to a corporation, a limited liability company, or any form of business trust.
11) Only two (2) Short-Term Rental Permits maximum shall be issued to the same individual or personal trust annually.
12) Any applicant with a suspended Short-Term Rental Permit is prohibited from advertising or renting the short-term rental property during the duration of the suspension. In addition, any applicant with a revoked or lapsed Short-Term Rental Permit may not advertise or rent the short-term rental property unless and until a new Short-Term Rental Permit is approved and issued by the City.

B. Applications for Short-Term Rental Permits. The application for any Short-Term Rental Permit shall contain all of the following:
1) The name, address and telephone number of the owner of the short-term rental, the name and address of the person to whom any notice pursuant to this Ordinance should be given, and the name and contact information of the responsible person for the short-term rental. Only the owner may apply for a Short-Term Rental Permit. 9

2) The list of all hosting platforms to be used, and whether un-hosted stays will be offered.
3) The location of the short-term rental property, including a diagram or photographs identifying the location of the short-term rental residence or portion of the residence on the property and the location of the required parking. 4) A copy of the guests' drivers license and/or identification card, and registered vehicle information upon request by the Police Department.
5) The applicant shall agree to indemnify and hold harmless the City, its officers, employees and agents from any claim, demand or judgment in favor of any person, arising out of activities or in-activities of the applicant with respect to the operations of the short-term rental.

C. Short-Term Rental Permit Fee. Each application shall include a permit fee as established by resolution of the City Council.

D. A completed Business License application as described in Chapter 5.04 of the City Municipal Code.

E. A completed Uniform Transient Occupancy Tax Registration Form as described in Chapter

3.16 ofthe City Municipal-Code.

F. Proof of liability insurance as described in Section--- ofthis Ordinance.

G. Approval, Findings, Conditions, and Denial of Short-Term Rental Permit The City Community Development Director or designee shall have the authority to approve the Short-Term Rental Permit within 30 days after deeming the application complete (including receipt of required fees), in accordance with the following findings and subject to the following conditions.
1) Findings For Short-Term Rental Permit Approval
a. The applicant has acquired all other required permits and licenses ofthe City, and has paid all required fees.
b. Issuance ofthe Short-Term Rental Permit and conduct of the short-term rental at the proposed location is consistent with Federal, State, and/or City laws, rules, regulations, and/or any existing permit or land-use entitlement. c. Issuance of the Short-Term Rental Permit at the proposed location will not adversely affect the residential character of the neighborhood by causing nuisance 10

activities, including, but not limited to, illegal parking, disturbing the peace, excessive noise, vibration, glare, light, odors, littering, or other effects that unreasonably interfere with a community, neighborhood, or any person's reasonable enjoyment of their residence.
d. Issuance of the Short-Term Rental Permit at the proposed location will comply with the requirements and provisions contained in the "Short-Term Rental Regulations" and "Permitted Locations for Short-Term Rentals'' sections of this Ordinance. e. The applicant or any other person for whom information is required has not, within the past seven years, been convicted of any felony or of any misdemeanor crime involving moral turpitude or which is substantially related to the qualifications, functions, or duties of a proprietor, manager, or other responsible person for a short-term rental property.
f. The applicant or any other person for whom information is required has not had a history of committing, permitting, or failing to prevent significant violations of Federal, State, or City law, or of any license or permit, in connection with a shortterm rental property in any jurisdiction for which he or she was an owner, operator, or otherwise responsible person.
g. Based upon the submitted information, the applicant or any other person for whom information is required has not knowingly provided false or misleading information, or has otherwise omitted information in the application or in any amendment or report required to be made under this Ordinance. h. The applicant or any other person for whom information is required has not had a Short-Term Rental Permit denied or revoked within the 12 months preceding the current application.
i. The applicant or any other person for whom information is required does not owe the City of Covina any outstanding fees or payments, any administrative penalty resulting from a violation of any provision of this Ordinance or of a condition of any other Short-Term Rental Permit issued pursuant to this Ordinance, or any other fee related to the short-term rental property {including, but not limited to, false alarm fines, fees, or later charges.
j. The application is otherwise complete.
2) Conditions For Short-Term Rental Permit Approval
The Short-Term Rental Permit approval shall be subject to the following conditions in order to ensure compliance with this Ordinance, applicable Federal, State, and City laws, and otherwise to protect the public health, safety, and welfare. 11

a. If the applicant or any person for whom information was required has been issued a conditional use permit, other special permit, or land-use entitlement applicable to the short-term rental property, conditions placed thereon shall constitute additional conditions of the Short-Term Rental Permit issued under authority of this Ordinance.
b. The operating standards set forth in this Ordinance shall constitute conditions of the Short-Term Rental Permit issued pursuant to the provisions of this Ordinance. c. The applicant is required to comply with the provisions and requirements described in the "Short-Term Rental Regulations" section in this Ordinance, including compliance with Good Neighbor Policies and preparation of the Good Neighbor Brochure.
d. The acquisition of any permit required under CMC Title 14 for the construction, alteration, repair, improvement, modification, or demolition of any building, structure, electrical system, mechanical system, or plumbing system, or any part(s) thereof, that facilitates the short-term rental activities being authorized under the Short-Term Rental Permit shall be a condition of approval pursuant to the provisions of this Ordinance.
e. The Chief of Police may, based upon specific and articulable facts reasonably related to ensuring the public health, safety, and welfare, impose conditions upon a Short-Term Rental Permit relating to the operation of the short-term rental including, but not limited to:
i. Restrictions designed to prevent minors from obtaining alcoholic beverages.

The number and age of persons allowed on the premises.
iii. Specific measures the applicant must undertake to control the conduct of persons at the short-term rental property so as to prevent or minimize disorderly conduct within the property, residence, and adjacent public rights-of-way.
iv. Specific measures the applicant must undertake to remove trash attributable to the short-term rental activities in and around the property, the surrounding neighborhood, and the adjacent public rights-of-way. v. Specific measures the applicant must undertake to prevent the short-term rental activities and its guests from disturbing the peace and quiet of the surrounding neighborhood.
vi. Specific measures the applicant must undertake to prevent its guests from engaging in disorderly conduct in the surrounding neighborhood. 12

vii. Whether the Chief of Police must receive advance notice of the duration of the short-term rental.
viii. Other matters related to the public health, safety, and welfare. f. Nothing in this Ordinance shall be construed to limit the authority of the Chief of Police to place additional conditions upon the Short-Term Rental Permit that are more restrictive than the conditions of any other applicable City permit and/or approval, or of any applicable operating standard.
g. No condition may be imposed upon any Short-Term Rental Permit that conflicts with Federal, State or City law, or that conflicts with the applicant's other City permits and/or licenses. However, nothing in this Ordinance is intended to prevent the Chief of Police from imposing any condition related to curfew violations and other criminal activity.
h. Conditions shall be listed on, or attached to, the Short-Term Permit. i. The imposition of any conditions other than those imposed by this Ordinance is subject to appeal in accorda11ce with the time constraints and provisions set forth in the following section of this Ordinance.
j. The City Manager shall have the authority to establish additional administrative rules and regulations, which may include, but are not limited to, registration conditions, reporting requirements, inspection frequencies, enforcement procedures, advertising restrictions, disclosure requirements, or insurance requirements, consistent with the provisions of this Ordinance, for the purpose of implementing, interpreting, clarifying, carrying out, furthering, and enforcing the requirements and the provisions of this Ordinance. No person shall fail to comply with any such regulation. A copy of such administrative rules and regulations shall be on file in the Office of the City Clerk.
k. The owner of a short-term rental shall secure a building and fire and safety inspection prior to allowing guests to occupy the short-term rental property. 3) Appeal of Short-Term Rental Permit Denials, Conditions, Modifications, Suspensions, or Revocations
Any applicant for a Short-Term Rental Permit that has received a notice of denial, or has received Permit approval but with conditions of approval that are deemed unacceptable, or has received an order of modification, suspension, and/or revocation of a Short-Term Rental Permit pursuant to the provisions of this Ordinance may appeal said notice or order by filing a request for an appeal with the City Clerk, and submitting a filing and processing fee as set by Resolution of the City Council, within 10 calendar days of service of the notice, order, or conditions of approval. The 13

request for an appeal must be made in writing and must contain, at a minimum, the following information:
a. Request for Appeal. The request for an appeal must be made in writing and must contain, at a minimum, the following information:
i. The name of all appellants and the address of the applicable short-term rental property.
ii. The date of the imposition of conditions, or of denial, modification, suspension, or revocation.
iii. A statement as to all grounds for appeal in sufficient detail to enable a hearing officer to understand the nature ofthe controversy. The appellant may only appeal a summary modification, suspension, or revocation based upon the grounds for the modification, suspension, or revocation and not the City's determination that such grounds existed to the extent or degree that it creates an imminent peril or threat to the public health, safety, or welfare of the short-term rental guests or general public. iv. The signature of each appellant under penalty of perjury as to the contents of the request for appeal.
b. Failure of the City Clerk to receive a timely appeal and payment of the appeal fee(s) constitutes a waiver of the right to contest the imposition of conditions, a notice of denial or order of modification, suspension, and/or revocation, and such conditions, notice and/or order shall be deemed final and binding. c. Stay of Modification, Suspension, and/or Revocation. Where a request for an appeal has been timely filed (and all fees submitted), any modification, suspension, or revocation of a Short-Term Rental Permit imposed pursuant to this Ordinance shall be stayed pending the resolution of the appeal by the hearing officer pursuant to the provisions of this Ordinance. However, the filing of an appeal shall not stay any summary modification, suspension, or revocation of a Short-Term Rental Permit.
d. Upon timely receipt of a request for an appeal and applicable fees, the City Clerk shall set this matter for consideration before the hearing officer no later than 30 calendar days from receipt of the request and payment of applicable fees. The City Clerk shall issue written notice to the appellant(s) of the date, time, and location of the appeal hearing at least 10 calendar days prior to the hearing.

If the request for an appeal seeks to challenge a summary modification, suspension, or revocation of a Short-Term Rental Permit, the City Clerk shall set the matter for consideration before the hearing officer no later than 10 business days from receipt of the request and payment of applicable fees. The City Clerk 14

shall issue written notice to the appellant(s) of the date, time and location of the appeal hearing at least five calendar days prior to the hearing. e. Any request by an appellant to continue an appeal hearing must be submitted to the City Clerk in writing no later than two business days before the date scheduled for the hearing. The hearing officer may continue a hearing for good cause or on his/her own motion. However, in no event may the hearing be continued for more than 30 calendar days without stipulation by all parties.

If the appeal seeks to challenge a summary modification, suspension, or revocation of a Short-Term Rental Permit, the hearing officer may not continue the hearing on his/her own motion for more than five business days without stipulation by all parties.
f. Appeal Hearing. Appeal hearings conducted pursuant to the provisions of this Ordinance shall comply with the following:
i. The appeal hearing shall proceed solely on those issues or defenses raised in the request for an appeal filed by the appellant(s), and all matters not contested in said request shall be deemed admitted into evidence. ii. The City shall have the burden to establish the grounds for the imposition of conditions, denial, modification, suspension, or revocation that has been contested by the appellan~ by a preponderance of the evidence. The notice of denjal and/or the orders of modification, suspension, and/or revocation (and all documents or reports relied upon and/or prepared in relatl(>A to the notice or order) shall be admitted into evidence and shall constitute prima facie evidence of the grounds for the imposition of conditions., denial, modification, suspension, or revocation. The City will have the right to present additional written and/or oral evidence in support of the imposition of conditions, denial, modification, suspension, and/or revocation subject to the appeal.
iii. The appellant(s) may appear at the hearing in person or by written declaration executed under penalty of perjury. Said declaration and any documents in support thereof shall be tendered to and received by the office of the city clerk at least three business days prior to the hearing. If the appellant(s) elects to appear at the hearing by written declaration, the City shall not be required to attend or participate at the hearing, and may instead submit a written response to the hearing officer to be considered at the time of the hearing.
iv. The appellant, if present at the hearing, shall be given an opportunity to testify and to present written and/or oral evidence relating to the matters raised in the appellant's request for an appeal, and shall have the right to examine and cross-examine any documents and witnesses presented by 15

the City in support of the imposition of conditions, denial, modification, suspension, and/or revocation subject to the appeal. The City will also have the right to examine and cross-examine any documents and witnesses presented by the appellant(s). The hearing officer may question any person who presents evidence or who testifies at any hearing. If additional evidence is presented at the hearing by any party, the hearing officer may continue a hearing on his or her own motion if additional time is required for the review or presentation of evidence, or to otherwise ensure due process to all parties.
v. The City, at its discretion, may record the hearing by stenographer or court reporter, audio recording, or video recording.
vi. If the appellant(s) fails to appear, or to otherwise submit a written declaration or any admissible evidence contesting the existence of all grounds for the imposition of conditions, denial, modification, suspension, or revocation subject to the appeal, the hearing officer shall cancel the hearing and send a notice thereof to the appellant(s) by first class mail to the address(es) stated on the appeal form. A cancellation of a hearing due to nonappearance of the appellant shall constitute the appellant's waiver of the right to appeal. In such instances, the initial conditions of approval, notice, or order is deemed final and binding.
vii. After exhaustion of all administrative remedies, judicial review of a final administrative action is subjecrt to the provisions and time limits set forth in California Code of Civil Procedure Section 1094.6 et seq. (Ord. 15-2046 § 3, 2015.)

2. Business License Required
A. All short-term rental owners, short-term rental platform owners and hosts, and other related businesses shall acquire a Business license as described in Chapter 5.04 of the City Municipal Code.

B. All short-term rental businesses and/or owners that cease operations shall obtain, complete, and submit a Business license Closing form terminating its Business License within thirty (30) days after ceasing operations.

3. Payment of Transient Occupancy Tax Required
All short-term rental owners shall complete the Uniform Transient Occupancy Tax Registration Form and pay the required Transient Occupancy Tax as described in Chapter 3.16 of the City Municipal Code.

4. Liability Insurance Required
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The owner or registered host of a short-term rental property is required to acquire and carry liability insurance. Proof of said liability insurance shall be provided with the Short-Term Rental Permit application.

5. The host shall keep and preserve~ for a period of five years all records as may be necessary to determine the amount of such tax as he/she may have been liable for the collection of and payment to the City~ including the number and length of each short-term rental stay~ and the price paid for each stay. The Planning and Community Development Department and/or Finance Department shall have the right to inspect these records al all reasonable times.

Hosts shall provide a copy of the records from the last year to the Planning and Community Development Department at the time of renewing the Short-Term Rental Permit.

AUDITING OF SHORT-TERM RENTALS

1. Each owner or host of a short-term rental property shall cooperate in any inspections of the short-term rental property, as may be reasonably requested by the Director or designee~ to determine that the objectives and conditions of this Ordinance have been met.

2. Each owner or host of a short-term rental property shall provide the City with access to each short-term rental property and the books, records~ documents, papers, tax returns, and bank accounts at any time during normal business hours as the City may determine are necessary or convenient for the purpose of inspection or audit to determine that the objectives and conditions of this Ordinance have been met.

ENFORCEMENT
A. Inspections. The City shall have the authority to conduct random inspections of the shortterm rental property as deemed necessary or prudent to ensure compliance with the provisions of this Ordinance, including without limitation, inspections based upon any complaints or violations that occur, and inspections prior to issuance or renewal of a Short-Term Rental Permit. All inspections shall be conducted in accordance with an individual's Fourth Amendment rights under the United States Constitution or otherwise in violation of rights guaranteed by law.

B. Additional Conditions. The Director can at any time impose additional conditions on the use of any short-term rental property to ensure that any potential secondary effects unique to the subject short-term rental property are avoided or adequately mitigated. The expectation of the City is that the short-term rental residence and property are in good maintenance and condition.

C. The Chief of Police shall be the first responder and has primary responsibility for the enforcement of this Ordinance. Within 30 minutes, the Chief of Police shall notify the short-term rental owner or Property Manager that guests of the short-term rental property has created unreasonable noise or disturbances, engaged in disorderly conduct, or committed violations of provisions of this Ordinance, the Municipal Code, or any State 17

law, and may evict one or more of the guests to prevent a recurrence of such misconduct by those guests.

Failure of the owner or the Property Manager to respond to calls or complaints regarding the condition, operation, or conduct of the guests in a timely and appropriate manner shall be grounds for imposition of penalties as set forth in this Ordinance.

D. Three violations against the same property being used for short-term rental may result in the automatic suspension or revocation of the Short-Term Rental Permit. Appeal of the any Short-Term Rental Permit revocation is subject to those provisions and procedures described in Section --- of this Ordinance. If a Short-Term Rental Permit is revoked, the host must wait at least one year before he/she can apply and register for another shortterm rental again.

E. Any person convicted of violating any provision of this section in a criminal case or found to be in violation of this Ordinance in a civil case brought by a law enforcement agency, shall be ordered to reimburse the City and other participating law enforcement agencies of their full investigative costs, pay all back Transient Occupancy Taxes, and remit all illegally obtained rental revenue to the City. Acquired revenue may be returned to the short-term rental guests or used to compensate victims of illegal short-term rental activities.

VIOLATIONS

1. Any person who violates any provision oft his Ordinance, or fails to comply with any obligation or requirement of this Ordinance, or who fails to comply with any order or notice issued pursuant to the provisions of this Ordinance, is guilty of a misdemeanor offense punishable in accordance with Chapter 1.16 ofthe CMC, and shall also be subject to administrative fines and penalties.

2. Any person who defaces, alters, or removes any notice or order posted as required in this Ordinance is guilty of a misdemeanor offense punishable in accordance with Chapter 1.16 of the CMC.

3. Nothing in this Ordinance shall prevent the City Attorney or City Prosecutor from prosecuting a violation of this Ordinance as an infraction, at his/her discretion, as set forth in Chapter 1.16 of the CMC.

4. Nothing in this Ordinance shall prevent the City Attorney or City Prosecutor from bringing a civil action, at his/her discretion, to seek the abatement of any violation of t his Ordinance or any nuisance activity at a short-term rental property.

5. Nothing in this Ordinance shall prevent any City enforcement officer from issuing an administrative citation for violations of the provisions of this Ordinance, as set forth in Chapter 1.26 of the CMC.
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6. Each person shall be guilty of a separate offense for each and every day, or part thereof, during which a violation of this Ordinance, or of any law or regulation referenced herein, is allowed, committed, continued, maintained or permitted by such person, and shall be punishabl,e accordingly.

7. Public Nuisance. In addition to the penalties provided by this Ordinance, any condition or activity caused or permitted to exist in violation of any provision, restriction, or requirement of this Ordinance or any notice, order, or permit issued pursuant to this Ordinance shall be deemed a public nuisance and may be summarily abated by the City by any and all means (civil, administrative, and/or equitable) as provided by law or in equity. (Ord. 15-2046 § 3, 2015.)

8. Any person found in violation of the provisions of this Ordinance and found guilty of a misdemeanor shall be issued an administrative citation for the first violation of $500.00. Each subsequent violation shall be $1,000.00. Each administrative citation for a violation of any provision of this Ordinance shall be levied or assessed against the owner of the short-term rental.

9. Upon the third violation in any twelve-month period, the City shall suspend the Short-Term Rental Permit for two years.

10. Any person who operates or advertises a short-term rental property without a Short-Term Rental Permit, Business License, or other City approvals, and payment of Transient Occupancy Taxes, or other City fees, shall be issued an administrative fine in the amount of $5,000.00, and permanent ineligibility to operate a short-term rental io the City.

11. Any person who fails to pay any fee or charge provided in this Ordinance within the time required, shall pay a penalty in the amounts established by the City Council by resolution.

Such penalty may also include interest from the date on which the fee or charge became due and payable to the City until the date of payment.

MODIFICATION, SUSPENSION, OR REVOCATION OF SHORT-TERM RENTAL PERMIT

1. General. The City may modify the conditions or may suspend or revoke any Short-Term Rental Permit issued pursuant to this Ordinance, if the City makes any of the following findings and/or determinations:

A. There exists any ground for denial of the Short-Term Rental Permit. pursuant to this Ordinance.

B. The applicant or other responsible person has knowingly made any false, misleading, or fraudulent statement of material fact or has knowingly omitted a material fact in the application for the Short-Term Rental Permit or any report or records required to be filed by law.
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C. Activities have been conducted at the short-term rental property in a manner contrary to the Short-Term Rental Permit and/or conditions thereof.

D. The applicant or other responsible person has failed to comply with one or more conditions of the Short-Term Rental Permit, or any other entitlement granted by the City or other government agency.

E. The applicant or other responsible person has violated or is violating any Ordinance, law, rule, or regulation of the City, County of Los Angeles, State of California, or the United States of America, in the course of exercising any rights under the Short-Term Rental Permit.

F. The applicant or other responsible person has operated a short-term rental property or otherwise caused or allowed short-term rental activities in violation of any notice of denial, order of suspension, or order of revocation issued pursuant to this Ordinance.

G. The applicant or other responsible person has been held liable for, or has been convicted of, any offense involving the maintenance of a nuisance resulting from any act performed in exercising any rights under the Short-Term Rental Permit.

H. The continued operation under tne Short-Term Rental Permit (and any applicable conditions) would endanger, disrupt, or otherwise be detrimental to the public peace, health, safety, morals, or general welfare of tbe City, its residents or guests, and/or the general publi~, or would otherwise constitute a pubJic nuisance.

I. In addition to, and not in lieu of, any other remedy allowed by law, all remedies prescribed under this Ordinance are cumulative and the election of one or more remedies does not prevent the City from the pursuit of any oth~r remedy, criminal, civil, or administrative which may be pursued by the City to enforce this Ordinance and/or address any violation ofthis Ordinance orto remedy any other public nuisance.

2. Order of Modification, Suspension, and/or Revocation. Where the City has determined that the conditions of a Short-Term Rental Permit shall be modified or that a Short-Term Rental Permit shall be suspended or revoked, the City shall provide written notice of his or her decision to the applicant.

A. Order of Modification. The City shall serve a written order of modification upon the applicant stating the grounds for the modification, the specific modifications being imposed upon the Short-Term Rental Permit, the effective date of the modified conditions, and the applicant's appeal rights (including method and timeline for requesting an appeal in accordance with this Ordinance).

B. Order of Suspension. The City shall serve a written order of suspension upon the applicant stating the grounds for the suspension, the length of the suspension, the effective date of the suspension, and the applicant's appeal rights (including method and timeline for 20

requesting an appeal). A Short-Term Rental Permit may be suspended for a period not to exceed 30 calendar days per violation, and no more than 90 calendar days per suspension.

C. Order of Revocation. The City shall serve a written order of revocation upon the applicant stating the grounds for the revocation, the effective date of the revocation, and the applicant's appeal rights (including method and timeline for requesting an appeal).

3. Effective Date of Modification, Suspension, and/or Revocation.

A. General. Any order of modification, suspension, or revocation issued pursuant to the provisions ofthis Ordinance shall become effective, and the applicant shall adhere to such order, after the expiration of 10 calendar days following service of the order of modification, suspension, and/or revocation. Every person to whom a Short-Term Rental Permit has been issued under this Ordinance shall immediately surrender his or her Permit to the City Police Chief or Community.Development. Director upon the effective date of its revocation.

B. Summary Modification, Suspension, or Revocation. The City may summarily and immediately modify, suspend, or revoke a Short-Term Rental Permit issued pursuant to the provisions ofthis Ordin~nce if the City determines that any ground for modification, suspension, or revocation exists to the extent or degree that it creates an imminent peril or threat to the public health, safety, or: w.elfare of the guests or general public. Any modification, suspension, or revocation pursuant to this Ordinance shall be effective immediately; however., a written order of modification, suspension, and/or revocation as set forth in this Ordinance must be served·upon the permittee within three business days of the summary action.
1) Where the City ha~ taken summary action pursuant to this Ordinance, he or she may also require·the immediate termination of activities at the short-term rental. 2) It i$ unlawful and a misdemeanor for any person to fail to comply with any directive issued by the City under authority of this Ordinance.
3) A summary modification, suspension, or revocation of a Short-Term Rental Permit pursuant to this Ordinance is not stayed pending an appeal. (Ord. 15-2046 § 3, 2015.) 21

Exhibit B
STR Study Session Notice to
City Social Media Platforms

COVINA
Please join us for a Study
Session on Draft Short-Term
Rental Regulations in Covina
Learn about Proposed operational
requirements and regulations for
short term rentals
Tell us your thoughts, concerns,
questions, and comments regarding
proposed requirements and
regulations for short term rentals
How to participate
Attend in person and fill a speaker card,
speakers are limited to 5 minutes
Access the Draft Regulations
Draft Regulations are located on the
Planning Commission Agenda Package
for August 27, 2024. You can find them
at www.covinaca.gov, or ask for a link
at [email protected]

Date&Time
Planning Commission Meeting
Tuesday, August 27, 2024
7:00PM
Covina Council Chamber
125 E. College Street

ATTACHMENT B
ORDINANCE 25-11

AN URGENCY ORDINANCE OF THE CITY COUNCIL OF THE CITY OF

COVINA, CALIFORNIA, ESTABLISHING A MORATORIUM ON THE

USE OF RESIDENTIAL PROPERTY FOR SHORT TERM RENTAL AND

HOME EXPERIENCE SHARING, DECLARING THE URGENCY

THEREOF, AND MAKING A DETERMINATION OF EXEMPTION

UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT
WHEREAS, the City of Covina, California (“City”) is a municipal corporation, duly organized under the constitution and laws of the State of California; and WHEREAS, on August 21, 2025, a public notice was published for the September 2, 2025, City Council meeting to consider the Urgency Ordinance and was continued to October 21, 2025 due to lack of a four-fifths vote of the City Council, per California Government Code Section 65858; and
WHEREAS, the City does not have land use policies or standards in place to regulate Short-Term Rentals and Home Experience Sharing Uses within the City limits, which would address compatibility with surrounding uses and safety, among other issues; and WHEREAS, Short-Term Rental and Home Experience Sharing are not defined within the Covina Municipal Code; and
WHEREAS, Over the past several years, the rental of residential properties for periods of thirty (30) days or less (“Short-Term Rentals”) has surged in popularity. While providing a financial advantage to property owners and simultaneously providing an affordable way to visit the City, Short-Term Rentals also create or contribute to a number of adverse impacts upon a residential neighborhood – including, but not limited to, disturbances of the peace resulting from parties and other late-night activities, illegally parked vehicles, and a lack of adequate parking; and
WHEREAS, A rising trend is the rental of recreational amenities (e.g., swimming pools; playgrounds; barbeques and grills; pickleball courts, tennis courts, and other sports areas; and other exterior portions of real properties) separate and apart from the rental of the residential dwelling – a use that is commonly known as “Home Experience Sharing”. Recreational amenities as part of a Home Experience Sharing are generally rented by the hour; however, they are generally rented for multiple hours at a time, and some property owners provide “monthly passes” allowing for extended hours throughout the month. Moreover, Home Experience Sharing is often used for hosting parties and other social events, resulting in large gatherings of non-residents within residential properties. Similar to Short-Term Rentals, the rapid growth of Home Experience Sharing also creates or contributes to a number of adverse impacts upon residential neighborhoods – including, but not limited to, increased noise, disorderly conduct, and lack of adequate off-street parking for residents, which, in turn, would result in potential conflicts between Home Experience Sharing guests and neighbors – and an increased expenditure of City resources in responding to complaints. Additionally, Home Experience Sharing raises health and safety concerns as there are currently no regulations pertaining to minimum standards for maintenance of the recreational

Ordinance 25-11 Page 2 of 6
amenities, sanitation facilities (especially since the recreational facilities are not rented in conjunction with a residential building), insurance coverage to cover accidents or injuries suffered by these social guests; and
WHEREAS, The City’s Code Enforcement Division has confirmed through listings on platforms like Airbnb, Vrbo, and other sites, that habitable portions of a dwelling, single family dwellings and/or specific areas or amenities of a dwelling including swimming pools, and backyards, are being rented in the City of Covina as Short-Term Rentals and/or Home Experience Sharing; and
WHEREAS, Based upon the foregoing adverse impacts and concerns raised by ShortTerm Rentals and Home Experience Sharing, the lack of adequate safeguards to protect the health, safety, and welfare of the guests participating in Home Experience Sharing and neighboring residential neighborhood, and the current use of residential properties within the City of Covina for Short-Term Rentals and Home Experience Sharing, the City Council therefore finds there is a current and immediate threat to the public health, safety, and welfare, and that a moratorium is necessary; and
WHEREAS, The City Council finds that the time provided by the moratorium will allow for a comprehensive analysis on how best to regulate Short-Term Rentals and Home Experience Sharing to minimize or eliminate the adverse impacts upon the health, safety, and welfare of not only the property owner who is providing the Short-Term Rental and/or Home Experience Sharing, but also the guests and the surrounding neighborhood; and WHEREAS, California Government Code Section 65858 provides that, without following the procedures otherwise required prior to the adoption of a zoning ordinance, an urgency measure in the form of an interim ordinance may be adopted by a four-fifths vote of the City Council to protect the public from a current and immediate threat to the public health, safety, or welfare resulting from a contemplated zoning proposal. Government Code Section 65858 further provides that such an urgency measure shall be effective for only 45 days following its adoption, but may be extended beyond the initial 45-day period, following compliance with that Section, for up to an additional 22 months and 15 days. Furthermore, Government Code Section 36937(b) provides that an ordinance shall take effect immediately if it is adopted for the immediate preservation of the public peace, health or safety, contains a declaration of the facts constituting the urgency, and is passed by a four-fifths vote of the city council.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY ORDAIN AS FOLLOWS:

SECTION 1. Incorporation of Recitals. The City Council of the City of Covina finds that all Recitals are true and correct and incorporated herein by reference.

SECTION 2. Compliance with the California Environmental Quality Act (CEQA). This Ordinance was reviewed in accordance with the California Environmental Quality Act (CEQA) (Public Resources Code Section 21000 et seq.) and the Guidelines (Cal. Code Regs., tit. 14, §15000 et seq.) This Ordinance is not subject to CEQA as it prohibits Short-Term Rentals and Home Experience Sharing uses in the City while the City studies appropriate regulations and is therefore not expected to lead to any direct or reasonably foreseeable indirect physical changes in the

Ordinance 25-11 Page 3 of 6
environment. CEQA Guidelines Section 15060(c)(2). Furthermore, this Ordinance is exempt from CEQA pursuant to CEQA Guidelines Sections 15061(b)(3) as it can be seen with certainty that there is no possibility the activity in question may have a significant effect on the environment.

This Ordinance addresses a clear and imminent danger that poses several adverse effects on residential neighborhoods. These include increased noise, disorderly conduct, and insufficient offstreet parking for residents.

SECTION 3. Urgency findings. The City Council of Covina hereby finds that there is a current and immediate threat to the public health, safety, and/or welfare and a need for immediate preservation of the public peace, health, or safety that warrants this urgency measure, which finding is based upon the facts stated in the Recitals above, in the staff report dated October 21, 2025, as well as any oral and written testimony at the October 21, 2025, City Council meeting and further detailed below:

A. Home Experience Sharing threatens the health, safety, and welfare of the community through adverse impacts that include, but are not limited to, increased noise, disturbances of the peace and disorderly conduct, and lack of required parking, without adequate safeguards in place to address minimum standards for maintenance of the recreational amenities, sanitation facilities (especially since the recreational facilities are not rented in conjunction with a residential building), and insurance coverage to cover accidents or injuries suffered by these social guests.

B. Without adequate regulation, Short-Term Rentals impact the character of neighborhoods, causing negative impacts including trash and litter, excessive noise, parking problems, and neighborhood degradation, and reduce much-needed housing supplies.

C. The City’s Municipal Code does not currently regulate or provide an entitlement process specifically for Short-Term Rentals or Home Experience Sharing. The use of residential property for Short-Term Rentals and Home Experience Sharing has intensified. In recent years, social media has increased exponentially the popularity and demand for Short-Term Rentals or Home Experience Sharing. Short-Term Rentals and Home Experience Sharing have become a substantial threat to the public health, safety and welfare of the City’s residents, and particularly residential neighborhoods. It is well documented in the media and various code and law enforcement complaints that events hosted at Short-Term Rentals or Home Experience Sharing have attracted crowds, loud parties, littering, over-parked street conditions, openly disorderly conduct and unsafe vehicle use that have led to multiple arrests and complaints to law enforcement.

D. City staff require a period of study to determine the appropriate scope of regulations that may be developed for inclusion into the City’s Municipal Code, which is anticipated, among other measures, to provide for the public health, safety and welfare, relating to Short-Term Rentals and Home Experience Sharing.

E. Allowing any proliferation of Short-Term Rentals and Home Experience Sharing uses, without adequate regulations, could lead to property owners making investments and improvements to their properties that may not be permitted to be used for Short Term Rentals or Home Experience Sharing uses and thereby creating potentially nonconforming land uses that could defeat the purpose and intent of any later adopted Short-Term Rentals and Home Experience Sharing ordinance and pose a further threat to the public health, safety and welfare.

Ordinance 25-11 Page 4 of 6
F. Based on the foregoing, it is urgent the City temporarily prohibit the advertising, use and operation of Short-Term Rentals and Home Experience Sharing while it undertakes a review of its current Municipal Code provisions to determine whether additional regulations are needed to ensure the public health, safety and welfare remain protected.

SECTION 4. Definitions. For purposes of this Ordinance, the following definitions apply.

A. “Home Experience Sharing” means the rental or lease of a recreational amenity or recreational amenities located on real property zoned for residential uses, property developed for residential use, or both zoned and used for residential uses, within the City, and which amenity or amenities are used separate from or otherwise not in conjunction with the rental of a residential dwelling unit.

B. “Recreational amenity” or “recreational amenities” include any swimming pool, barbeque, gazebo, grill, pickleball court, basketball court, tennis court, playground, yard area, or other portion of a residentially zoned or developed property that has a residential dwelling unit and which portion of the property is designed or used for passive or active recreational activities.

C. “Residential dwelling” means a private structure designed and available, pursuant to applicable law, for use and occupancy as a residence by one or more individuals. “Residential dwelling” does not include a commercially operated hotel, motel, bed and breakfast inn, or time-share property.

D. “Short-Term Rental” means the rental of a residential dwelling, or any portion of a residential dwelling, for 30 consecutive days or less.

SECTION 5. Moratorium. Based on the facts and findings set forth in this Ordinance, and notwithstanding any other ordinance or provision of the Covina Municipal Code, the City Council hereby establishes a moratorium for a period of 45 days, expiring December 5, 2025, subject to any duly adopted extension(s) pursuant to Government Code Section 65858, providing for the following:

A. Short-Term Rentals and Home Experience Sharing are prohibited. It shall be unlawful and a public nuisance for any person or entity to offer or make available for rent or to rent (by way of a rental agreement, lease, license, or any other means, whether oral or written), for compensation or any consideration, a residential dwelling, or portion thereof, or recreational amenity for Short-Term Rental or Home Experience Sharing uses or activities.

B. No Short-Term Rental or Home Experience Sharing uses or activities shall be established or continued, if previously established, in any zone within the City.

C. No application for zoning approval, home occupation permit, or other permit, license, or land use entitlement shall be approved for a Short-Term Rental or Home Experience Sharing.

D. It shall be unlawful for any person or entity to place or maintain any advertisement for a Short-Term Rental of Home Experience Sharing prohibited by this Ordinance.

SECTION 6. Severability. If any sections, subsections, sentences, clauses, phrases, or portions of this Ordinance are for any reason held invalid or unconstitutional, such decision shall

Ordinance 25-11 Page 5 of 6
not affect the validity of the remaining portions of this Ordinance. The City Council hereby declares that it would have passed this and each section, subsection, phrase, or clause of this Ordinance whether or not any one or more sections, subsections, phrases, or clauses may be declared invalid or unconstitutional on their face as applied.

SECTION 7. Term and Effect. This Ordinance is needed for the immediate preservation of the public health, safety, or welfare. It shall become effective immediately upon its adoption by a four-fifths vote of the City Council. The moratorium shall expire on December 5, 2025, unless extended.

SECTION 8. Publication and Posting. The City Clerk shall certify to the passage and adoption of this Urgency Ordinance and shall cause the same or a summary thereof to be published and posted in the manner required by law.

PASSED, APPROVED and ADOPTED this 21
st day of October, 2025.

City of Covina, California
BY:

VICTOR LINARES, Mayor
ATTEST:
___________________________________________
FABIAN VELEZ, Chief Deputy City Clerk
APPROVED AS TO FORM:

____________________________________
KEVIN ENNIS, City Attorney

Ordinance 25-11 Page 6 of 6

CERTIFICATION
I, Fabian Velez, Chief Deputy City Clerk of the City of Covina, California, do hereby certify that Urgency Ordinance 25-11 was duly approved and adopted at a regular meeting of the City Council on the 21
st day of October, 2025, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
___________________________________________
FABIAN VELEZ, Chief Deputy City Clerk

CC Regular Meeting

AGENDA ITEM REPORT
ITEM NO. NB 1
Meeting: October 21, 2025
Title: Code Cares Pilot Program
Presented by: Jennifer McDowell, Neighborhood Preservation Manager Brian K. Lee, AICP, Deputy City Manager/Director of Community Development Recommendation: Adopt Resolution CC 2025-112 authorizing an overgrown vegetation pilot program managed by the Code Enforcement Division.

EXECUTIVE SUMMARY:

As proposed, the City’s Community Development Department has developed a pilot program to proactively assist residents that may face challenges with addressing common municipal code violations relating to property maintenance. The “Code Cares” Program would seek to organize two community cleanup events per year, foster collaboration and engage local service organizations and volunteer groups in efforts to enhance neighborhood aesthetics throughout the community. Resolution CC 2025-112 would authorize the Department’s Code Enforcement Division to initiate efforts to move forward with this pilot program.

BACKGROUND/ DISCUSSION:

Overgrown vegetation remains one of the most frequently reported property maintenance concerns in residential neighborhoods across the City of Covina. Excessive growth of weeds, brush, and unmaintained landscaping can obstruct sidewalks, limit visibility, block signage, and contribute to a neglected appearance in otherwise wellmaintained neighborhoods. In response, the Code Enforcement Division proposes a community-based program to engage in a more service-oriented and preventative approach to this ongoing issue. Rather than focusing solely on enforcement, this program aims to proactively support homeowners who may be struggling to maintain their property due to circumstances such as age, health issues, financial hardship, or other personal challenges, and encourages residents to take pride in their homes while fostering a stronger community.

The Code Cares Overgrown Vegetation program concept extends beyond traditional code enforcement by offering meaningful support to residents in need. If authorized, the program will be held twice annually, aligning with peak seasonal vegetation growth. To be considered, residents may self-nominate or nominate a neighbor.

Nominations are followed by a review process by Code Enforcement staff members. Code Enforcement officers will then conduct inspections to assess vegetation overgrowth and contact property owners to determine their eligibility and willingness to participate. Community volunteers would be recruited to assist with vegetation removal under staff supervision. Teams would be assigned to a specific property and supported with the necessary tools and resources. During the events, photos will be taken to document the transformations of each property, and participants will receive certificates of appreciation for their contributions.

This program draws inspiration from successful models in nearby cities, such as Pomona’s “Pomona Beautiful” program, where collaborative efforts between code enforcement and volunteers have significantly improved neighborhood aesthetics. By providing compassionate, hands-on support to residents in need, the program will address aesthetic concerns, promote pride, and reinforce Covina’s commitment to being a clean and welcoming community.

FISCAL IMPACT:

At this time, there is no anticipated direct fiscal impact associated with launching the Overgrown Vegetation Program. The initial rollout is structured around donations, contributions from local organizations and businesses, and volunteer labor to execute the work. However, to support the program’s sustainability and growth, the Division will explore grant funding, partnerships, and other funding mechanisms.

CEQA (CALIFORNIA ENVIRONMENTAL QUALITY ACT):

This item is not a project within the meaning of Section 15378 of the State of California Environmental Quality Act (“CEQA”) Guidelines, because it has no potential for resulting in a physical change in the environment, directly or indirectly.

Respectfully submitted,

ATTACHMENT A
RESOLUTION CC 2025-112

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, APPROVING THE “CODE CARES” OVERGROWN

VEGETATION PILOT PROGRAM, ESTABLISHING A COMMUNITY

PARTNERSHIP INITIATIVE TO ADDRESS AND RESOLVE

OVERGROWN VEGETATION CODE VIOLATIONS THROUGH

ORGANIZED CLEAN UP EFFORTS
WHEREAS, the City of Covina is a municipal corporation duly organized and existing pursuant to the Constitution and laws of the State of California; and WHEREAS, the City of Covina is committed to maintaining safe, clean, and attractive neighborhoods that promote community pride and quality of life; and WHEREAS, the “Code Cares” Overgrown Vegetation Pilot Program is designed to address vegetation related municipal code violations through a coordinated community cleanup initiative, offering assistance to residents who may face challenges in correcting violations independently; and
WHEREAS, the Covina City Council finds that this pilot program demonstrates the City’s commitment to enhancing the quality of life for all residents while also fostering community pride.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF COVINA, CALIFORNIA, DOES HEREBY RESOLVE AS FOLLOWS:

SECTION 1. The City Council hereby approves the “C.O.D.E CARES” Overgrown Vegetation Pilot Program.

SECTION 2. City staff are directed to implement the program as a community partnership initiative to support the continued beautification efforts of the city.

SECTION 3. The City Clerk shall certify to the adoption of this resolution.

APPROVED and PASSED this 21st day of October, 2025
City of Covina, California
BY:

VICTOR LINARES, Mayor
ATTEST:
___________________________________________
FABIAN VELEZ, Chief Deputy City Clerk

Resolution CC 2025-112 Page 2 of 2

CERTIFICATION
I, Fabian Velez, Chief Deputy City Clerk of the City of Covina, do hereby certify that Resolution CC 2025-112 was duly adopted by the City Council of the City of Covina at a regular meeting held on the 21st day of October, by the following vote:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSTAIN: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

Dated:
_________________________________________
FABIAN VELEZ, Chief Deputy City Clerk