FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (Arrow & Nuevo)
This FIRST AMENDMENT TO DISPOSITION AND DEVELOPMENT AGREEMENT (Arrow & Nuevo) (this “First Amendment”) is entered into as of , 2023 (the “First Amendment Effective Date”), by and between the City of Fontana, a California municipal corporation (“ City”) and New Legacy Development Corp., a California corporation (“Developer”). The City and the Developer are sometimes referred to in this First Amendment, each individually, as a “Party,” or collectively, as the “Parties.”
RECITALS
A. The City and the Developer, entered into that certain Disposition and Development Agreement (Arrow & Nuevo) dated July 28, 2020 (the “ Agreement”) regarding the disposition and development of the “ Property” as such real property is more particularly described in the Agreement.
B. The Parties desire to amend the Agreement in accordance with the terms and conditions herein, and as such, adopts this First Amendment.
C. All capitalized terms not defined herein shall have the meaning set forth in the Agreement.
FIRST AMENDMENT
NOW, THEREFORE, with reference to the facts recited above and in consideration of the mutual promises set forth in this First Amendment and other good and valuable consideration, the receipt and sufficiency of which is acknowledged by the Parties, the Parties agree as follows:
Section 1. Section 5.3. Section 5.3 of the Agreement is hereby deleted in its entirety and replaced with the following:
5.3 Payment in Lieu of Sales Tax.
Within thirty (30) days of receipt of a Certificate of Occupancy for the ground floor restaurant space, Developer shall pay to City an amount equal to twenty thousand dollars ($20,000), which is the amount that the Parties agree is a fair estimate of the sales tax revenue that would have been generated had the schedule of performance set forth in the Original Development Agreement been complied with by the Developer. This presumes that the Certificate of Occupancy will be issued on or before November 14, 2025. Upon the commencement of business operations by the ground floor retail space, sales taxes shall be due and payable in accordance with all applicable laws. The covenant of this Section 5.3 shall run with the land of the Property and shall be enforceable against the Developer and its successors and assigns.
Section 2. Subsection 7.1.1. Subsection 7.1.1 is deleted in its entirety and replaced with the following:
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7.1.1 Subject to any extensions of time provided for in this Agreement, failure or delay by any Party to timely perform any term or provision of this Agreement shall constitute an “Event of Default” under this Agreement; provided, however, that if a Party otherwise in default completely cures such default, within thirty (30) days after receipt of written notice from the injured Party specifying such default, such Party shall not be deemed to be in default under this Agreement and no Event of Default shall be deemed to have occurred.
Section 3. Subsection 7.1.4. Subsection 7.1.4 is deleted in its entirety and replaced with the following:
7.1.4. In addition to other acts or omissions of the Developer that may legally or equitably constitute a default or breach of this Agreement, the occurrence of any of the following specific events, prior to the issuance of a Certificate of Completion for the Pro ject, shall constitute an “Event of Default” under this Agreement and shall not be subject to the notice and cure provisions included above in this Section 7.1:
Section 4. Subsection 7.1.4.9. A new Subsection 7.1.4.9 is hereby added to the Agreement as follows:
7.1.4.9 The Developer fails to complete any of the tasks described on the Schedule of Performance in a complete and competent manner, and within the times set forth on the Schedule of Performance.
Section 5. Subsection 7.4.3. A new Subsection 7.4.3 is hereby added to the Agreement as follows:
7.4.3 If legal proceedings are initiated to en force the rights, duties, or obligations of any of the terms of this Agreement, the prevailing Party in such proceeding shall be entitled to collect its reasonable attorneys’ fees and costs from the other Party in addition to any other damages or relief obtained in such proceedings.
Section 6. Subsection 7.6.1. Subsection 7.6.1 is deleted in its entirety and replaced with the following:
7.6.1 The City hereby reserves a power of termination pursuant to Civil Code Sections 885.010, et seq., exercisable b y the City, in its sole and absolute discretion, upon written notice to the Developer referencing this Section 7.6 , to terminate the fee interest of the Developer in the Property and/or any improvements to the Property and revest such fee title in the City and take possession of all or any portion of such real property and improvements, without compensation to the Developer, upon the occurrence of an Event of Default as defined herein, by the Developer, following the Close of Escrow and prior to the issuance of the Certificate of Completion.
Section 7. Subsection 7.6.2. Subsection 7.6.2 is deleted in its entirety and replaced with the following:
7.6.2 The written notice set forth in Section 7.6.1 shall specify facts which constitute the Event of Default by the Developer triggering the City’s exercise of its power of termination.
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Section 8. Subsection 7.6.5. Subsection 7.6.5 is deleted in its entirety and replaced wit h the following:
7.6.5 Should title to the Property revest in the City, upon any such resale of the Property (or any portion thereof), the proceeds to the City from such sale shall be applied as follows:
Section 9. Subsection 7.6.5.2. Subsection 7.6.5.2 is deleted in its entirety and replaced with the following:
7.6.5.2 Second, to reimburse the City on its own behalf or on behalf of the City for all actual internal and third-party costs and expenses previously or currently incurred by the City related to the Property, the Project, or this Agreement, including, but not limited to, the value of all City Staff time spent on the Project from inception, including but not limited to all legal fees and Staff time incurred in connection with the drafting of the Agreement and any Amendments thereto, the interpretation of the Agreem ent and any Amendments thereto, and the enforcement of the Agreement and any Amendments thereto; customary and reasonable fees or salaries to third-party personnel engaged in such actions as may occur in connection with the recapture, management and resale of the Property or any part thereof; all taxes, assessments and utility charges paid by the City with respect to the Property or portion thereof; any payment made or necessary to be made to discharge or prevent from attaching or being made any subsequent encumbrances or liens due to obligations incurred by the Developer with respect to the acquisition of the Property or the construction of the Project; and amounts otherwise owing to the City by the Developer or its successors or assigns pursuant to the terms of this Agreement; and
Section 10. Subsection 7.6.5.3. Subsection 7.6.5.3 is deleted in its entirety and replaced with the following:
Third, to the extent that any proceeds from such resale are, thereafter, available, taking into account any prior encumbrances with a claim thereto, to reimburse the Developer, or its successors in interest to the equal to the sum of: (1) the Purchase Price; and (2) the third-party costs actually and reasonably incurred and paid by the Developer regarding the development of the Project located on the Property, including, but not limited to, items as set forth in a cost certification to be made by the Developer to the City prior to any such reimbursement, which certification shall be subject to the City’s reasonable approval and shall include back up invoices and receipts for each expense for which the Developer seeks reimbursement; provided, however, that the Developer shall not be entitled to reimbursement for any expenses to the extent that such expenses relate to any loans, Liens or other encumbrances that are paid by the City pursuant to the provisions of sub- sections
7.6.5.1 or 7.6.5.2 above.
Section 11. Subsection 7.6.6. Subsection 7.6.5.2 is deleted in its entirety and replaced with the following:
IMMEDIATELY FOLLOWING DELIVERY OF THE WRITTEN NOTICE SPECIFIED IN SECTION 7.6.1, ABOVE, THE CITY, ITS EMPLOYEES AND AGENTS SHALL HAVE THE
RIGHT TO REENTER AND TAKE POSSESSION OF THE PROPERTY AND ANY
IMPROVEMENTS THEREON, WITHOUT FURTHER NOTICE OR COMPENSATION TO THE DEVELOPER. BY INITI ALING BELOW, THE DEVELOPER HEREBY EXPRESSLY
WAIVES, TO THE MAXIMUM EXTENT ALLOWED BYLAW, ANY AND ALL RIGHTS
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THAT THE DEVELOPER MAY HAVE UNDER CALIFORNIA CIVIL CODE SECTION 791 AND CALIFORNIA CODE OF CIVIL PROCEDURE SECTION 1162, AS THOSE STATUTES
MAY BE AMENDED, REPLACED, RENUMBERED OR SUBSTITUTED, OR UNDER ANY OTHER STATUTES OR COMMON LAW PRINCIPLES OF SIMILAR EFFECT.
DEVELOPER’S INITIALS
Section 12. Exhibit E. Exhibit E to the Agreement is hereby removed and replaced with Revised Exhibit E attached hereto and incorporated herein.
Section 13. Effect of First Amendment. Except as modified herein, all provisions of the Agreement remain in full force and effect.
Section 14. Conflicts with the Agreement. In the event of a conflict between this First Amendment and the Agreement, the terms and provisions of this First Amendment will control.
Section 15. Successors and Assigns. This First Amendment shall be binding on and inure to the benefit of the legal representatives, heirs, successors and assigns of the Parties.
[Signature Pages Follow.]
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IN WITNESS WHEREOF, the City and the Developer executed this First Amendment by duly authorized representatives as of the First Amendment Effective Date.
CITY:
DEVELOPER:
CITY OF FONTANA
NEW LEGACY DEVELOPMENT, CORP.,
a California municipal corporation
a California corporation
By:
By:
Date:
Date:
ATTEST:
By:
APPROVED AS TO FORM
By:
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REVISED EXHIBIT E
TO
DISPOSITION AND DEVELOPMENT AGREEMENT (Arrow & Nuevo),
AS AMENDED BY THE FIRST AMENDMENT
Revised Schedule of Performance
Action Date Action to be
Completed By
1. Effective Date
See Section 1.3
2. Developer to open Escrow and, concurrently, deposit Earnest Money Deposit into Escrow
Within 5 days
following the
Effective Date
3. Due Diligence Period commences The date of the
Escrow Opening
Date
4. City to deliver Preliminary Report to Developer
Within 3 days
following City’s
receipt of the
Preliminary Report
from Title
Company
5. Developer to deliver Developer’s Title Notice to Agency
Within 30 days
following
Developer’s receipt
of the Preliminary
Report
6. City to deliver City’s Title Notice Response to Developer, if appropriate
Within 20 days
following City’s
receipt of
Developer’s Title
Notice
7. Developer to deliver Developer’s Title Notice Waiver, if appropriate
Within 10 days
following
Developer’s receipt
of City’s Title
Notice Response
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8. Developer to deliver its Due Diligence Investigation Conclusion Notice
On or before the
end of the Due
Diligence Period
9. Submit all of the Plans and Specifications items including, but not limited to, the necessary construction plans to City including street improvement, grading, and construction plans
Within 180 days
following the
Effective Date
10. Due Diligence Period ends On the 90th day
following the
Escrow Opening
Date
11. Escrow Closing Date No later than 60
days from the end
of the Due
Diligence Period
12. Record Lot Line Adjustment No. 18-0011 to merge the three (3) parcels as identified in the Legal Description
Within 30 days of
closing escrow
13. Developer to resubmit to City for final plan check
September 14, 2023
14. Developer to obtain City approval of building plans
October 26, 2023
15. Developer to commence site work
November 30, 2023
16. Developer to record development loan
December 25, 2023
17. Developer to commence vertical construction of the Project
February 2, 2024
18. Complete construction of the Project and receive Certificate(s) of Occupancy for all residential and commercial units
November 14, 2025
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