JOINT MEETING OF THE CITY COUNCIL, THE CITY OF FRESNO IN ITS CAPACITY
AS HOUSING SUCCESSOR TO THE REDEVELOPMENT AGENCY OF THE CITY OF
FRESNO, THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE
CITY OF FRESNO, AND FRESNO REVITALIZATION CORPORATION
FROM: MARLENE MURPHEY , Executive Director
SUBJECT
..Title
Actions pertaining to property located at 887 Fulton Street (APN 468-282-21T) (Berkeley Building):
1. Adopt a finding of Categorical Exemption pursuant to Section 15332 (Infill) of the California Environmental Quality Act (CEQA) Guidelines
2. ***RESOLUTION - Finding substantial community benefits to justify a sales price less than fair market value and finding good cause and clear and convincing benefit to the public to allow close of escrow on the property to extend beyond 12 months of Council approval pursuant to Fresno Municipal Code Section 4- 204 relating to the disposition of real property commonly known as 887 Fulton Street (Subject to Mayor’s veto) (Requires 5 affirmative votes)
3. Approve a Disposition and Development Agreement b etween the City in its capacity as Housing Successor and the Fresno Area Hispanic Foundation, a California non-profit corporation
..Body
RECOMMENDATION
It is recommended that the City of Fresno in its capacity as Housing Successor to the Redevelopment Agency (FHS) adopt a categorical exemption pursuant to Section 15332 of CEQA Guidelines, approve a resolution finding substantial community benefit resulting from the disposition of property to the Fresno Area Hispanic Foundation and approve a Disposition and Development Agreement (DDA) to dispose of 887 Fulton Street for retail and office development.
EXECUTIVE SUMMARY
The Fresno Area Hispanic Foundation (FAHF) is proposing to revitalize 887 Fulton Street for office uses as an expansion of its mission to incubate and provide support services to small business. The revitalization funding is expected from a $3,000,000 US Economic Development Program Grant, an in- kind match of $750,000 and FAHF equity. The contribution of property by FHS at less than fair market value is critical to project feasibility and is expected to result in substantial community benefit as described in the attached Resolution.
BACKGROUND
The property, owned by the City in its capacity as Housing Successor, is located at 887 Fulton Street at the southwest corner of Kern and Futon S treets (Property). The parcel consists of a two -story commercial building and basement with each level containing about 11,250 sf. Built in 1960, the building has been long vacant and suffers extensive water damage to the roof and interior.
The Property was declared Surplus Land on May 12, 2022, and no response was received to the sixty-day notice of availability. An RFP issued in June 2023 received one response that was rejected in March 2024. The S urplus Land Act provides that if 10 or more residential units are developed on the Property, not less than 15 percent of the total number of residential units developed on the property shall be sold or rented at affordable housing cost. This requirement shall be memorialized through an affordable housing covenant recorded on the Property.
FAHF seeks to enter into a DDA to redevelop the Property for reuse consistent with goals for downtown revitalization. In furtherance of its mission, FAHF aims to introduce a new project, “887 Fulton” to expand support for local small businesses and to advance economic development.
FAHF, established in 2004, purchased and subsequently renovated its 13,000- sf headquarters at 144 4 Fulton Street into the Downtown Business Hub financed in part through successful grant application to the US Department of Commerce, Economic Development Administration (PWEAP). In terms of program services, FAHF has over 15 years of extensive experience in the successful pursuit, management, and administration of grant funds from various government and private sources related to program delivery and serves as a Community Development Financial Institution (CDFI).
FAHF plans to rehabilitate the Property into ground floor retail and second story office use (Project). The ground floor is conceptually planned for potential repurpose as a food hub for small restaurants and related businesses. The second floor is planned for rehabilitation and reuse as office space to incubate and grow small businesses in office related services such as finance and accounting. During due diligence, FAHF plans to assess the feasibility for potential housing.
FAHF intends to fund the Project through a $3 million EDA Public Works and Economic Adjustment Program ( PWEAP) grant for design and construction costs. FAHF is positioned to meet the grant required in-kind match of $750,000 and contribute developer equity. The EDA requires site control for approval of the PWEAP grant award.
Predevelopment expenses incurred after grant approval are deemed eligible for reimbursement.
FAHF is prepared for operational startup costs and is pursuing multiyear operational funds from various public and private sources. As with its current longstanding program at 1444 Fulton Street, rent will serve as a program income source.
FAHF proposes to purchase the Property “AS IS” for $1.00 to enable financial feasibility for the P roject resulting in substantial community benefit. The Property has been appraised at eighty-one thousand dollars. The contribution of property by FHS at less than fair market value is critical to project feasibility and is expected to result in substantial community benefit.
The DDA provides for closing of escrow upon proof of financing and approval of plans and building permits. The performance schedule time periods provide for: six-month due diligence; 18-month plan submission and approval ; and, 24-month construction to certification of occupancy approval.
The DDA further provides for FHS to: (1) work with the city to provide Developer a point of contact (Liaison) through the City Planning and Development Depart ment Liaison Program; (2) work with the city to allocate, subject to availability, fifty to seventy parking stalls in the spiral City Garage located at 801 Van Ness pursuant to a parking agreement using the City’s Master Fee Schedule bulk parking rate; and; (3) subject to council approval as necessary, work with the City to consider and negotiate in good faith with developer to determine applicable and available contributions, reimbursements or off-sets for which developer may be eligible regarding on-site or off-site improvements.
ENVIRONMENTAL FINDINGS
Staff has performed a preliminary environmental assessment and determined that it falls within the categorical Exemption set forth in CEQA Guidelines section 15332 as I nfill Development because the project is consistent with applicable general plan and zoning designations, occurs within city limits on a site of les s than five acres and is surrounded by urban uses, has no value as a habitat for endangered or threatened species, can be adequately serviced by all utilities and services and approval of the project would not result in any significant effects relating to traffic noise air quality or ate quality.
Furthermore, staff has determined that none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines Section 15300.2 apply to this project.
LOCAL PREFERENCE
Local preference was not considered because this agreement does not include a bid for or award of a construction or services contract.
FISCAL IMPACT
There is no adverse impact upon the Fresno Housing Successor Budget.
Attachments:
Resolution
RECORDED AT THE REQUEST OF
AND WHEN RECORDED RETURN TO:
CITY OF FRESNO IN ITS CAPACITY
AS HOUSING SUCCESSOR TO THE
REDEVELOPMENT AGENCY OF THE
CITY OF FRESNO
848 M Street, Third Floor
Fresno, CA 93721
Attn: Executive Director
WHEN RECORDED RETURN TO:
City of Fresno in its capacity as Housing
Successor to the Redevelopment Agency
of the City of Fresno
848 M Street, Third Floor
Fresno, CA 93721
Attn: Marlene Murphey
______________________________________________________________________ (SPACE ABOVE THIS LINE FOR RECORDER'S USE)
This Agreement is recorded at the request and for the benefit of the City of Fresno and is exempt from the payment of a recording fee pursuant to Government Code Section 6103.
CITY OF FRESNO,
A California municipal corporation, in its
capacity as Housing Successor to the
Redevelopment Agency of the City of
Fresno
By: __________________________
Marlene Murphey, Executive Director
Dated:
DISPOSITION AND DEVELOPMENT AGREEMENT
By and Between
THE CITY OF FRESNO
a municipal corporation, in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno
and
FRESNO AREA HISPANIC FOUNDATION, a California non-profit corporation
887 Fulton Street (APN 468-282-21T)
Fresno, California 93721
DISPOSITION AND DEVELOPMENT AGREEMENT
By and Between
THE CITY OF FRESNO
a municipal corporation, in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno
and
FRESNO AREA HISPANIC FOUNDATION, a California non-profit corporation
887 Fulton Street (APN 468-282-21T)
Fresno, California 93721
______________________________________________________________________
ATTACHMENTS
Exhibit A Site Map
Exhibit A-1 Legal Description
Exhibit B Scope of Development and Basic Design
Exhibit C Performance Schedule
Exhibit D Certificate of Completion
Exhibit E Grant Deed
Exhibit F Affordable Housing Covenant
1 DISPOSITION AND DEVELOPMENT AGREEMENT
This Disposition and Development Agreement (DDA or Agreement) is entered into as of the Effective Date (defined below), between CITY OF FRESNO , a municipal corporation, in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno (FHS) and FRESNO AREA HISPANIC FOUNDATION, a California non-profit corporation (the Developer).
RECITALS
The parties enter this Agreement based on the following facts, understandings, and intentions:
A. FHS currently owns certain real property at 877 Fulton Street, located at the southwest corner Kern and Fulton Street, Fresno, California (APN 468-282-21T), more particularly described in Exhibits A (Site Map) and A-1, (legal description) attached (the Property).
B. The Property was declared Surplus Land on May 12, 2022, and no response was received to the sixty-day notice of availability. An RFP issued in June 2023 received one response that was rejected in March 2024. The Surplus Land Act provides that if 10 or more residential units are developed on the Property, not less than 15 percent of the total number of residential units developed on the property shall be sold or rented at affordable housing cost. This requirement shall be memorialized through an affordable housing covenant, attached as Exhibit F, and recorded on the Property.
C. Developer desires to acquire the Property from FHS to revitalize and privately redevelop the Property as mixed-use combination of retail and office space as an expansion of its mission to incubate and provide support to small businesses , as more particularly described in the Scope of Development, attached as Exhibit B and Section
1.19, (collectively, the Project).
D. Developer agrees to undertake improvements in accordanc e with the combined Performance Schedule described in Exhibit C attached hereto and incorporated herein (the Performance Schedule).
E. This project has been environmentally assessed under the California Environmental Quality Act ( CEQA) and found to be categorically exempt pursuant to Section 15332 (Class 32/Infill Development) of CEQA.
AGREEMENT
In consideration of the mutual promises and covenants and upon the terms and conditions set forth in this Agreement, the parties agree as follows:
1. D efinitions. Besides definitions contained elsewhere in this Agreement, the following definitions will govern the construction, meaning, application and interpretation of the defined terms, as used in this Agreement.
1.1 A
DA . “ADA” means the Americans with Disabilities Act of 1990.
1.2 Agreement. “Agreement” means this Disposition and Development Agreement between FHS and Developer.
2 1.3 Certificate of Completion. “ Certificate of Completion” means that Certificate issued in the form attached as Exhibit D to Developer by FHS evidencing completion of the Project for purposes of this Agreement.
1.4 Cit y . “City” means the City of Fresno, a municipal corporation, having its offices at 2600 Fresno Street, Fresno, California 93721- 3605, and operating through its Council and its various departments.
1.5 Clo sing, Close or Close of Escrow . “ Closing,” “Close” or “Close of Escrow” means the closing of the escrow in which the City conveys a fee interest in the Property to Developer.
1.6 Da y. “Day,” whether or not capitalized, means a calendar day, unless otherwise stated.
1.7 D efault . “Default” means a party’s failure to timely perform any action or covenant required by this Agreement following notice and opportunity to cure.
1.8 D eveloper. “Developer” means Fresno Area Hispanic Foundation, a California non-profit corporation.
1.9 E ffective Date . “Effective Date” means the date that FHS signs this Agreement (including attestation by the Clerk), after Developer signs it.
1.10 E nvironmental Laws . “Environmental Laws” means any federal, state, or local law, statute, ordinance or regulation concerning environmental regulation, contamination or cleanup of any Hazardous Materials or Waste including, without limitation, any state or federal lien or “ superlien” law, any environmental cleanup statute or regulation, or any governmentally required permit, approval, authorization, license, variance or permission.
1.11 E
scrow. “Escrow” means the escrow opened with Escrow Holder for FHS to convey a fee interest in the Property to Developer.
1.12 E scrow Holder . “Escrow Holder” means Fidelity Title Company, 7485 N. Palm Avenue, Fresno, California 93711, Attn: Bernadette Watson, Escrow office, or another title company mutually satisfactory to both parties.
1.13 F HS. “FHS” means the City of Fresno, in its capacity as Fresno Housing Successor, having its offices at 848 M Street, Third Floor, Fresno, California 93721.
1.14 H az
ardous Materials. “Hazardous Materials” means any substance, material, or waste, which is or becomes regulated by any local governmental authority, the State of California, or the United States Government including, without limitation, any material or substance, which is: (a) defined as a “hazardous waste,” “extremely hazardous waste, ” or “restricted hazardous waste” under Sections 25115, 25117, or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, (b) defined as a “ hazardous substance” under Section 25316 of the California Health and Safety Code, (c) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, (d) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, (e) petroleum, (f) friable asbestos, (g) polychlorinated biphenyl , (h) listed under Article 9 or defined as 3 “hazardous” or “extremely hazardous ” under Article 11 of Title 22, California Administrative Code, (i) designated as “hazardous substances” pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317), (j) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act (42 U.S.C. §6901 et seq., or (k) defined as “hazardous substances” pursuant to Section of the Comprehensive Environmental Response, Compensation, and Liability Act (42 U.S.C. §9601, et seq. ); provided, however, hazardous materials shall not include: (1) construction materials, gardening materials, household products, office supply products or janitorial supply products customarily used in the construction, maintenance, rehabilitation, or management of residential rental housing, mixed- use, or commercial developments or associated buildings or grounds, or typically used in household activities in a manner typical of other residential, mixed- use or commercial developments which are comparable to the Improvements; and (2) certain substances which may contain chemicals listed by the State of California pursuant to Health and Safety Code Section 25249, et seq., which substances are commonly used by a significant portion of the population living within the region of the Property, including, but not limited to, alcoholic beverages, aspirin, tobacco products, NutraSweet, and saccharine.
1.15 Improvements. “Improvements” means the construction of the Project on the Property as set forth in the Scope of Work in Exhibit B.
1.16 Ou tside Date . “Outside Date” means June 1, 2026, the last date on which the parties are willing to Close the Escrow.
1.17 P erformance Schedule. “Performance Schedule” means the schedule attached as Exhibit C, setting forth the dates and times by which the parties must accomplish certain obligations under this Agreement. The parties may revise the Schedule from time to time on mutual written agreement of Developer and FHS, but any delay or extension of the completion date is subject to the requirements in this Agreement.
1.18 P
hase. “Phase” means a stage or portion of the Project designated by Developer for construction. A Phase may not consist of less than an entire residential, mixed-use, or commercial structure.
1.19 P roject . “ Project” means the development that Developer is to complete on the Property and any off-site improvements, as generally described in the Scope of Development, attached as Exhibit B . The Project includes, without limitation, the redevelopment and revitalization of the Property into a mixed- use combination of retail and office space. The Project may be developed and constructed in one or more Phases. Developer shall develop the Project substantially in the form and manner presented herein. Any changes, revisions, amendments, or alternations to the Project (including, but not limited to the additional or reduction in the amount of commercial or office space and configuration or layout of the same) desired by Developer shall be subject to approval of the Executive Director, which approval shall not be unreasonably withheld. In such event, Developer shall provide Executive Director with a written request for a change to the Project accompanied by any supporting documentation the Developer deems necessary . The Executive Director shall respond to the written request within forty-five days. If no action is taken by the Executive Director 4 within the forty -five-day period, the request shall be deemed approved. If 10 or more residential units are ever developed on the Property, not less than 15 percent of the total number of residential units developed on the P roperty shall be sold or rented at affordable housing cost. This requirement shall be memorialized through an affordable housing covenant, attached as Exhibit F, and recorded on the Property.
1.20 Project Completion Date. “Project Completion Date” means the date that FHS shall have determined the Project has reached completion in accordance with the plans and specifications in the Development Schedule, as evidenced by FHS’s issuance of a Certificate of Completion.
1.21 P roperty . “Property” means the real property described in Exhibits A and A-1.
1.22 S ecurity Financing Interest . “Security Financing Interest ” means a security interest, which Developer grants in its interest in the Property, before FHS issues and records a Release of Construction Covenants, to secure a debt, the proceeds of which Developer uses to construct the Project.
2. C
ONVEYANCE OF THE PROPERTY. FHS will convey the Property to Developer for the purchase price and on the conditions set forth herein.
2.1 P urchase Price. Developer shall pay $1 for the Property.
2.2 Escrow . Within ten days following the Effective Date of this Agreement, FHS and the Developer will open an Escrow with the Escrow Holder, and deposit a signed copy of this Agreement as their initial joint escrow instructions.
FHS and the Developer will sign any supplemental escrow instructions, consistent with this Agreement that the Escrow Holder or either party hereto deems necessary or appropriate. This Agreement will control any inconsistency that may exist between this Agreement and the supplemental escrow instructions. The parties authorize the Escrow Holder to act under the escrow instructions and, after the Escrow Holder accepts the instructions in writing, it will carry out its duties as Escrow Holder under this Agreement.
2.3 C
onditi ons Precedent to Closing Escrow. The following are conditions precedent to FHS’s obligations to close the Escrow and convey the Property to the Developer and the Developer’s obligation to purchase and accept conveyance of the Property from FHS. These conditions must be satisfied or waived by the time stated or, if no time is stated, then by the Outside Date set for the Closing.
2.3.1 F HS Conditions. The Closing is subject to the fulfillment of each of the conditions precedent described below, which are solely for the benefit of FHS and which shall be fulfilled consistent with Exhibit C (Performance Schedule), or waived prior to close of escrow:
A. Developer has delivered to FHS, and FHS has approved the form and content of, certificates of insurance for all insurance that this Agreement requires Developer to obtain and maintain.
B. Developer has given written notice to FHS that it has inspected the Property and accepts the Property in AS IS condition. If the Developer, after its inspection of the Property and review of any 5 environmental reports, disapproves the Property’s environmental or other condition, and FHS is either unwilling or unable to cure the condition to which the Developer objects, then the Developer or FHS may terminate this Agreement by written notice to the other party and without liability for breach or otherwise.
C. Developer has entered into and provided FHS copies of agreements with any and all funding sources and the general contractor for the Project. All such funding source agreements shall contain a provision whereby the party(ies) to such agreement, other than Developer, agree to make reasonable efforts to (i) notify FHS immediately of any event of default by Developer under such agreement; (ii) notify FHS immediately of termination or cancellation of such agreement; and (iii) provide FHS , upon FHS ’s request, an estoppel certificate certifying that such agreement is in full force and effect and Developer is not in default under such agreement.
D. Developer has submitted evidence that the combined
monies from the funding sources are not less than the greater total of development cost of $3,750,000 or the amount which FHS determines is necessary to complete the Project, including evidence of any/all loan or grant commitments for such funding sources acceptable to FHS. Currently, Developer intends to fund the Project through a $3 million EDA Public Works and Economic Adjustment Program (PWEAP) grant, and Developer’s required $750,000 in-kind match. If Developer fails to obtain full funding of the Project in an amount not less than the greater total of development cost of $3,750,000 or the amount which FHS determines is necessary to complete the Project within the timeframe set forth in this Agreement, and in no event later than June 1, 2026, then this Agreement will automatically terminate. If FHS determines that said funds are not sufficient to complete the Project, Developer may satisfy this condition as agreed to by Developer and FHS in writing.
E. Developer shall submit and obtain approval of all land use and other entitlements, permits, and approvals that FHS, City or any other governmental agency with jurisdiction over the Project requires for construction of the Project.
F. Developer is not in default of this Agreement and all representations and warranties of Developer contained herein are true and correct in all material respects.
2.3.2 Developer Conditions. The Closing is subject to the fulfillment or waiver by the Developer of each of the conditions precedent described below, which are solely for the benefit of the Developer and which shall be fulfilled consistent with the Exhibit C Performance Schedule, or waived prior to close of escrow.
A. Developer has approved the condition of title to the Property pursuant to this paragraph A. FHS shall obtain a preliminary title report and transmit a copy to Developer not later than fifteen days 6 following the Effective Date. Developer shall notify FHS in writing within fifteen days after receipt of a copy of the preliminary title report whether it approves the condition of title. Developer’s failure to give such notice within fifteen days will be deemed approval of the condition of title. If Developer notifies FHS that it disapproves any title exception, FHS may, but is not obligated to, remove that title exception within fifteen days after receipt of Developer’s written notice. If FHS cannot or does not elect to remove any disapproved title exception or give assurance of removal satisfactory to Developer within that period, Developer will have ten business days after the expiration of such fifteen-day period to either give FHS written notice that Developer elects to purchase the Property subject to the disapproved title exceptions or to terminate this Agreement. The exceptions to title approved by Developer as provided herein shall be referred to as the “Condition of Title.” The Developer shall have the right to approve or disapprove any further exceptions reported by the title company after the Developer has approved the Condition of Title for the Property (which are not created by the Developer). FHS shall not voluntarily create any new exceptions to title following the date of this Agreement and prior to the Closing.
B. Inspection. Because FHS will convey fee title of the Property to Developer “AS IS,” with all faults, for a period of 180 days after the Effective Date of this Agreement (the Review Period), Developer or its designated representatives may conduct tests, investigations and inspections of the Property in all matters relating to the Property, including, but not limited to, the physical condition or state of the Property and improvements thereon, environmental conditions, including Phase I and Phase II environmental assessments, and all other matters relating to the Property or any improvements thereon or affecting Developer or the feasibility of the Property for the Project (Due Diligence Investigation). If, for any reason, Developer is dissatisfied, in Developer’s sole and absolute discretion, with the results of the Due Diligence Investigation, Developer shall provide written notice of disapproval of the Due Diligence Investigation to FHS and Escrow Holder. Such written notice of disapproval shall be provided prior to the expiration of the Review Period, and will constitute Developer’s notice to terminate pursuant to Section 2.3.3, below.
Developer has the right to enter the Property to conduct the Due Diligence Investigation on the following conditions: (a) the tests, investigations and inspections are conducted by the Developer without cost or expense to FHS , (b) the tests, investigations and inspections do not unreasonably interfere with FHS ’s possession or use of the Property, and (c) Developer will assume responsibility for any loss or liability and for any damage to the Property to the extent resulting from conducting the tests, investigations or inspections. 7 Within ten days from the Effective Date, FHS shall deliver to Developer any and all then- existing plans, engineering reports, surveys, maps, soil or seismic reports, grading plans, environmental reports and assessments, and other studies, reports, correspondence or materials concerning the Property or any improvements thereon (the Materials). The Materials may include, without limitation, the following: (i) copies of any environmental reports or environmental site assessments or any other report relating to toxic or hazardous materials or the environmental condition of the Property or improvements; (ii) engineering studies, maps and cost reports (sewer, water, hydrology, storm drain, flood control, FEMA, utilities, traffic and noise); (iii) soils, geology and seismic reports; (iv) covenants, conditions and restrictions, if any, regarding the Property; (v) archaeological studies and reports; (vi) to the extent not described above, grading, erosion control, water, sewer, storm drain, street improvement, landscape and utility improvement plans; (vii) any other documents or materials which FHS possesses or which are reasonably available to FHS and which Developer requests in writing or FHS determines, in its reasonable judgment, are significant to the evaluation or use of the Property.
FHS makes no representation or warranty concerning, and will have no liability or responsibility for, the Materials or the information contained therein.
C. FHS shall not be in default of any provision of this Agreement and all representations and warranties of FHS contained herein are true and correct in all material aspects.
D. There shall be no litigation pending with respect to this Agreement, any land use, zoning, development or building permits or entitlements for the development contemplated by this Agreement or encumbering title to the Property, the outcome of which could materially interfere with the development of the Property as set forth herein.
2.3.3 Termination for Failure of Condition. In the event there is a failure of one or more conditions described in Section 2.3.1 or 2.3.2 that are not waived, the party for whose benefit the condition is established may terminate this Agreement by written notice to the other party prior to the Closing, in which event this Agreement shall terminate and no party shall have any further rights or liability to the other under this Agreement.
2.4 E
scrow and Title Costs . The Developer and FHS shall each pay 50% of escrow fees, recording fees, and documentary stamp taxes, if any, to convey the Property to Developer. FHS shall pay the portion of the premium for a n ALTA standard owner’s policy of title insurance with coverage not exceeding the Purchase Price, insuring the title to the Property as described herein. The Developer shall pay the portion of the premium for an ALTA extended owner’s policy of title insurance or any special endorsements required by Developer. Any other costs associated with 8 the Escrow shall be paid by FHS or the Developer according to the custom and practice in Fresno County, as declared by the Escrow Holder.
2.5 Prorations. The Escrow Holder will prorate all ad valorem taxes and assessments, if any, as of the Closing, between FHS and the Developer. If the then- current taxes and assessments are not ascertainable, the Escrow Agent will apportion the taxes and assessments based on the most recent statement of taxes and assessments. Escrow Holder will adjust the proration, if necessary, within thirty days after the actual taxes and assessments are available. Developer will be solely responsible for ad valorem taxes or assessments on the Property, or any taxes on this Agreement or any rights hereunder, which may be levied, assessed or imposed for any period after the Closing.
2.6 F
orm of Deed. FHS will convey the Property to the Developer by a Grant Deed, substantially in the form attached hereto as Exhibit E. The conveyance and Developer’s title will be subject to all conditions, covenants, restrictions and requirements set forth in this Agreement, and the Grant Deed.
2.7 N
onmerger . Prior to the issuance of a Certificate of Completion, the provisions of this Agreement will not merge with the Grant Deed. The Grant Deed will not affect, impair or limit the provisions, covenants, conditions or agreements of this Agreement.
2.8 P
ossession . FHS will deliver exclusive possession of the Property to Developer at or immediately following the Closing.
2.9 S ale “AS IS” – No Warranties. FHS will convey the Property “AS IS” with all faults, including, without limitation, the conditions disclosed in any toxics reports delivered to Developer, any conditions disclosed in the files of the regulators such as, but not limited to, the Fresno County Health Department, and the Regional Water Quality Control Board, and any environmental or other physical conditions on or under the Property, buried debris or structures, and soil compaction, presence of Hazardous Materials or the condition of the soil, its geology, the presence of known or unknown seismic faults, and the suitability of the Property for the development purposes intended hereunder.
2.10 C
lose of Escrow . The Escrow will close within thirty days after the parties satisfy all the conditions precedent to Closing as set forth in this Agreement, but not later than the “Outside Date,” unless the parties mutually agree to extend the time for Closing.
2.11 A uthority of Escrow Holder. The parties authorize the Escrow Holder to, and the Escrow Holder will do the following:
A. T itle Policy Premium. Pay and charge FHS and Developer, respectively, for the title insurance premiums described in Section 2.4 of this Agreement.
B. P
ay F ees. Pay and charge the Developer and FHS equal 50% share of the escrow fees and closing costs, excluding any costs to correct title exceptions or cure property conditions. FHS and Developer must agree in separate writing or instructions to the Escrow Holder to the allocation of costs to cure title exceptions or property conditions.
9 C. Record Grant Deed and Disburse Funds. Disburse funds from the Purchase Price, and record and deliver the Grant Deed to the appropriate party when the conditions precedent to Closing are satisfied or waived.
D. A ctions to F ulfill Obligations. Take any other action necessary to fulfill its obligations under this Agreement.
E. FI RPTA, and M ore. Direct the parties to deliver any instrument, or to perform any act, necessary to comply with FIRPTA or any similar state act and regulation promulgated thereunder. FHS will sign a Certificate of Non-foreign Status, or a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act as the Escrow Holder may require.
F. C
losing and O ther Statements. Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including, without limitation, an IRS 1099-S form, and be responsible for withholding taxes, if the law so requires.
G. C
losing Statements . Escrow Holder will forward to both Developer and FHS a separate accounting of all funds received and disbursed for each party, and copies of all signed and recorded documents deposited into Escrow, with the recording and filing date and information endorsed thereon.
H. T
ermination Without Close. If the Escrow is not in condition to close by the Outside Date, then any party that is not in default of this Agreement may demand the return of money or property and terminate this Agreement and the Escrow. If either party makes a written demand for return of documents or properties, this Agreement will not terminate until five days after Escrow Holder has delivered copies of the demand to the other party at the respective addresses shown in this Agreement. If the other party objects within the five-day period, the parties authorize the Escrow Holder to hold all papers and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties. Termination of this Agreement will be without prejudice to whatever legal rights either party may have against the other arising from this Agreement. If no party demands that the Escrow terminate, the Escrow Holder will proceed to Closing as soon as possible.
2.12 F
HS’s Authority to Sign Instructions and Documents. The Executive Director or h er designee is authorized to execute any supplemental escrow instructions for FHS that are not a material change hereto. The Executive Director or her designee may make minor modifications, not constituting a material change, to this Agreement, Exhibits and the documents referenced herein, to effect the opening and Close of the Escrow.
2.13 A
ccess Prior to Conveyance. Prior to the conveyance of title from FHS, representatives of Developer shall have the right of access to the Property at all reasonable times for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement. The Developer shall hold FHS harmless for 10 any injury or damages arising out of any activity pursuant to this Section. The Developer shall have access to all data and information on the Property available to FHS, but without warranty or representation by FHS as to the completeness, correctness or validity of such data and information. Any preliminary work, other than work in connection with Developer’s Due Diligence Investigation, undertaken on the Property by the Developer prior to conveyance of title thereto shall be done only after written consent of FHS, satisfaction of FHS imposed conditions including without limitation evidence of reasonably required insurance coverage(s), all at the sole expense of the Developer. The Developer shall save and protect FHS against any claims or liens resulting from such preliminary work, access or use of the Property. Copies of the data, surveys and tests obtained or made by the Developer on the Property shall be filed with FHS. Any preliminary work by the Developer shall be undertaken only after securing any necessary permits from the appropriate governmental agencies.
3. PROJECT DEVELOPMENT
3.1 Private Development Project ; Revision of Project . Developer will complete the Project as described in the Scope of Development using contractors licensed to do business in California. Except as set forth in this Agreement, before Developer begins constructing the Improvements or undertakes any other work of improvements on the Property, Developer, at its own cost and expense, will independently secure all land use and other entitlements, permits, and approvals that City or any other governmental agency with jurisdiction over the Project requires for construction of the Project. Except as may be expressly provided herein, Developer shall not begin construction or perform any other work on the Property until after Closing. However, the parties agree that in the event that Developer shall fail to receive all or any material portion of loans or grants as contemplated by Developer, then the Project and Scope of Development contemplated by this Agreement shall be renegotiated and redefined in a manner consistent with a scaled down Project and Scope of Development (and the related Performance Schedule) taking into account the amount of the loan funds not received by Developer . Any such change shall be set forth in a written amendment to this Agreement. If the parties cannot agree on a revised Project and Scope of Development within a reasonable period of time not to exceed 180 days under such circumstances, the purchase and sale of the real property shall be rescinded and this Agreement shall be cancelled and the real property shall be reconveyed to the FHS and all funds previously paid by Developer to FHS or otherwise related to this Agreement or the Project shall concurrently be refunded to Developer such that the parties shall be restored to their original positions prior to the execution of this Agreement to the greatest extent possible. If 10 or more residential units are ever developed on the Property, not less than 15 percent of the total number of residential units developed on the Property shall be sold or rented at affordable housing cost. This requirement shall be memorialized through an affordable housing covenant, attached as Exhibit F, and recorded on the Property.
3.2 T
ime for C ompletion of the Project. FHS will convey the Property to Developer for construction of the Project, and not for speculation in real estate.
Therefore, the Developer will begin construction by the date provided in the Performance Schedule and will diligently complete the Project according to the 11 Performance Schedule, or by any other date as the parties may agree in a written extension signed by the parties and subject to any extension of time provided for in Section 3.3.
In the event Developer does not perform and complete work pursuant to the Performance Schedule as set forth in Exhibit C or is otherwise unable to deliver a completed project, the purchase and sale of the real property shall be rescinded and this Agreement shall be cancelled and the real property shall be reconveyed to the FHS and all funds previously paid by Developer to FHS or otherwise related to this Agreement or the Project shall concurrently be refunded to Developer such that the parties shall be restored to their original positions prior to the execution of this Agreement to the greatest extent possible.
3.3 Extension of Time for C ompletion. In addition to the specific provisions of this Agreement, performance by any party hereunder shall not be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; lack of transportation; governmental restrictions or priority; litigation; unusually severe weather; inability to secure necessary labor, materials or tools; delays of any contractor, subcontractor or supplier; acts of another party; acts or the failure to act of any public or governmental agency or entity or any other causes beyond the control or without the fault of the party claiming an extension of time to perform. An extension of time for any such cause shall only be for the period of the enforced delay, which period shall commence to run from the time of the commencement of the cause. If, however, notice by the party claiming such extension is sent to the other party more than thirty days after the commencement of the cause, the period shall commence to run only thirty days prior to the giving of such notice. In the event on- or off- site plans have been timely submitted by Developer and approval cannot be obtained by the date set forth herein, the milestones occurring on and after said dates shall be extended by the number of days equal to the duration of the delay. Executive Director, on behalf of FHS, may grant extension(s) which cumulatively do not exceed 180 days, any additional extension shall require City Council approval. Notwithstanding the foregoing, the times of performance under this Agreement may also be extended in writing by FHS and the Developer, subject to Council approval.
3.4 C
ertificate of Completion. After Developer has satisfactorily completed a Phase of the Project according to this Agreement and after the completion of the final Phase of the Project , Developer may ask FHS to record a Certificate of Completion indicating that a Phase or that all Phases are complete, substantially in the form attached as Exhibit D. For purposes of this section, Developer’s submission of a “Safe to Occupy ” Certificate or Certificate of Occupancy for the Improvements within the subject Phase of the Project shall be conclusive evidence that Developer has satisfactorily completed those Improvements. Subject to the satisfaction of the conditions to its issuance (see next subsection) and within ten days of such request , FHS shall provide an instrument certifying Developer’s completion of the Project, or any Phase thereof, by preparing and recording the Certificate of Completion. This release, when recorded, will evidence FHS ’s conclusive determination that Developer has satisfied the construction covenants in 12 this Agreement as to the subject Phase of the Project. The release will not be evidence that Developer has complied with or satisfied any obligation to any person holding a deed of trust or Security Financing Interest. The release shall not terminate Developer’s indemnification or other obligations, which by their nature are intended to survive Project completion. After the release is recorded in the Official Records of Fresno County, any party then owning or after that purchasing, leasing or otherwise acquiring any interest in the applicable portion of the Property shall not (because of such ownership, purchase, lease or acquisition) incur any obligation or liability under this Agreement regarding the construction requirements or Project development of the completed Project.
3.5 Conditions to Issuing the Certificate of Completion. The following are all conditions precedent to FHS issuing the Certificate of Completion for the Project, or any Phase thereof, and each submission will be in a form and substance satisfactory to FHS:
A. Evidence that all mechanics’ liens or material men’s liens and claims recorded against the Property, or any Phase thereof, and the Project Improvements that are the subject of the Certificate of Completion have been unconditionally and finally released or, if not released, sufficiently bonded against as required by law.
3.6 Liens and Stop Notices. If a claim of lien or bonded stop notice is recorded against the Property or any Project improvements, the Developer, within ninety-one days after that, or within five days after FHS’s demand, whichever last occurs, will do the following:
A. Pay or discharge the same; or
B. Effect the release of it by recording and delivering to FHS a surety’s release bond in sufficient form and amount, or otherwise; or C. Give FHS other assurance that FHS, in its sole discretion, deems satisfactory to protect FHS from the effect of the lien, claim , or bonded stop notice.
3.7 Annual Proof of Insurance. Annually, beginning with commencement of construction of the Project, and continuing until the issuance of a Certificate of Completion for the Project, Developer shall submit proof of insurance as required by this Agreement.
3.8 T
axes and Assessments. The Developer will pay before delinquency all ad valorem real estate taxes and assessments on the Property, subject to the Developer’s right to contest any taxes or assessments in good faith. The Developer will remove any levy or attachment on the Property or any part of it or assure the satisfaction of the levy or attachment within a reasonable time. Except as to property in public use and subject to the following sentence, Developer and those tenants/others holding or using the Property under Developer by lease or otherwise, shall not apply for or take advantage of or otherwise enable any exemption from property/possessory taxes. The Developer shall not allow a use, transfer or sale of the Property/portion thereof, whether prior to or following completion of the Improvements hereunder, to an entity that is exempt from property/possessory tax 13 and/or which would allow a removal from the tax roll, absent prior notice to and written consent of FHS.
3.9 Compliance with L aws. In performing its obligations hereunder, Developer shall comply with all applicable laws, regulations, and rules of the governmental agencies having jurisdiction, including, without limitation, applicable federal and state labor standards and environmental laws and regulations.
Developer, not FHS, is responsible for determining applicability of and compliance with all local, state and federal laws including, without limitation, the California Labor Code, Public Contract Code, Public Resources Code, Health & Safety Code, Government Code, the City Charter, and Fresno Municipal Code. FHS makes no representations regarding the applicability of any such laws to this Agreement, the Project, or the parties’ respective rights or obligations hereunder including, without limitation, payment of prevailing wages, competitive bidding, subcontractor listing, or other matters. FHS shall not be liable or responsible, in law or equity, to any person for Developer’s failure to comply with any such laws, whether FHS knew or should have known of the need for Developer to comply, or whether FHS failed to notify Developer of the need to comply.
3.10 FHS Cooperation with Developer. The Parties agree the Project is Developer’s private development project. To cooperate with Developer, FHS shall endeavor to use best efforts to assist Developer with the following upon execution of the Agreement:
3.10.1 Notwithstanding Developer’s requirement to
independently secure all land use and other entitlements, permits, and approvals as set forth in Section 3.1, FHS shall work with City to p rovide Developer with a point of contact (Liaison) in the City’s Planning Department to assist Developer in effective and efficient pursuit of entitlements and permits.
3.10.2 Subject to availability, FHS shall work with City and FHS to allocate 50-70 parking stalls for buyer, tenants, employees and vendors in the Parking Garage 7 located at 801 Van Ness, pursuant to a Parking Agreement using the City’s Master Fee Schedule bulk parking rate.
3.10.3 Notwithstanding anything to the contrary, FHS shall, subject to Council approval when necessary, work with City to consider and negotiate in good faith with Developer to determine applicable and available contributions, reimbursements, or off -sets in favor of Developer, for which Developer may be eligible, regarding on-site or off-site improvements, utilities connections or impact fees required or incurred by Developer as a result of entitling or constructing the Project.
4. INDEMNITY; INSURANCE.
4.1 To the furthest extent allowed by law, including California Civil Code section 2782, DEVELOPER shall indemnify, defend and hold harmless FHS and each of its officers, officials, employees, agents, and volunteers from any and all claims, demands, actions in law or equity, loss, liability, fines, penalties, forfeitures, interest, costs including legal fees, and damages (whether in contract, tort, or strict liability, including but not limited to personal injury, death at any time, property 14 damage, or loss of any type) arising or alleged to have arisen directly or indirectly out of (1) any voluntary or involuntary act or omission, (2) error, omission or negligence, or (3) the performance or non- performance of this Contract .
DEVELOPER'S obligations as set forth in this section shall apply regardless of whether FHS or any of its officers, officials, employees, agents, or volunteers are passively negligent, but shall not apply to any loss, liability, fines, penalties, forfeitures, costs or damages caused by the active or sole negligence, or the willful misconduct, of FHS or any of its officers, officials, employees, agents or volunteers.
To the fullest extent allowed by law, and in addition to the express duty to indemnify, DEVELOPER, whenever there is any causal connection between the DEVELOPER’s performance or non-performance of the work or services required under this Contract and any claim or loss, injury or damage of any type, DEVELOPER expressly agrees to undertake a duty to defend FHS and any of its officers, officials, employees, agents, or volunteers, as a separate duty, independent of and broader that the duty to indemnify. The duty to defend as herein agreed to by DEVELOPER expressly includes all costs of litigation, attorneys fees, settlement costs and expenses in connection with claims or litigation, whether or not the claims are valid, false or groundless, as long as the claims could be in any manner be causally connected to DEVELOPER as reasonably determined by FHS.
Upon the tender by FHS to DEVELOPER, DEVELOPER shall be bound and obligated to assume the defense of FHS and any of its officers, officials, employees, agents, or volunteers, including the a duty to settle and otherwise pursue settlement negotiations, and shall pay, liquidate, discharge and satisfy any and all settlements, judgments, awards, or expenses resulting from or arising out of the claims without reimbursement from FHS or any of its officers, officials, employees, agents, or volunteers.
It is further understood and agreed by DEVELOPER that if FHS tenders a defense of a claim on behalf of FHS or any of its officers, officials, employees, agents, or volunteers and DEVELOPER fails, refuses or neglects to assume the defense thereof, FHS and its officers, officials, employees, agents, or volunteers may agree to compromise and settle or defend any such claim or action and DEVELOPER shall be bound and obligated to reimburse FHS and its officers, officials, employees, agents, or volunteers for the amounts expended by each in defending or settling such claim, or in the amount required to pay any judgment rendered therein.
The defense and indemnity obligations set forth above shall be direct obligations and shall be separate from and shall not be limited in any manner by any insurance procured in accordance with the insurance requirements set forth in this Contract. In addition, such obligations remain in force regardless of whether FHS provided approval for, or did not review or object to, any insurance DEVELOPER may have procured in a accordance with the insurance requirements set forth in this Contract. The defense and indemnity obligations shall arise at such time that any claim is made, or loss, injury or damage of any type has been incurred by FHS, and the entry of judgment, arbitration, or litigation of any claim shall not be a condition precedent to these obligations.
The defense and indemnity obligations set forth in this section shall survive 15 termination or expiration of this Contract.
If DEVELOPER should subcontract all or any portion of the work to be performed under this Contract, DEVELOPER shall require each subcontractor to Indemnify, hold harmless and defend FHS and each of its officers, officials, employees, agents and volunteers in accordance with the terms as set forth above.
This indemnity shall also cover, without limitation the following: (i) any act, error or omission of Developer as to the FHS or any of their officers, employees, contractors, subcontractors, invitees, agents or representatives in connection with this Agreement, the Project or the Property; (ii) any use of the Property, the Project by Developer or any of its officers, employees, contractors, subcontractors, invitees, agents or representatives, successors or assigns; (iii) the design, construction, operation or maintenance of the Project; or (iv) failure of Developer or any of its officers, employees, contractors, subcontractors, invitees, agents or representatives to comply with any Federal, State or local law, code, ordinance or regulation applicable to this Agreement or the Project, including, but not limited to, claims based upon failure to comply fully with prevailing wage laws as may be determined by any court or agency of the State of California or United States Government; with respect to any and all claims related to prevailing wage, Developer, as provided herein and otherwise in this Agreement, assumes all responsibility for payment of prevailing wage and complying with prevailing wage laws, if required, and specifically waives any and all rights against the City or FHS, as well as City and FHS agents, employees, agencies, and consultants, pursuant to California Labor Code section 1726(c) and analogous federal law, if any, and agrees to defend and fully indemnify the City and FHS, as well as City and FHS agents, employees, agencies, and consultants, for any claims based upon failure to pay prevailing wage, including, without limitation, claims for damages, fines, penalties, litigation expenses, costs, attorneys’ fees, and interest. Developer and/or FHS have the right to contest or challenge any finding that prevailing wage applies. Notwithstanding the forgoing, FHS shall fully cooperate with Developer as reasonable necessary in order to determine the applicability and compliance with prevailing wage laws.
This section shall survive termination or expiration of this Agreement and the potential recordation of the Grant Deed.
4.1.1 Action Arising Out of Approval of This Agreement. The Developer shall indemnify, defend and hold the FHS and each of their respective officers, officials, employees, agents, boards and volunteers harmless from any judicial action filed against the FHS by any third party arising out of the FHS’s approval of this Agreement or any permit, entitlement or other action required to implement this Agreement, including without limitation approvals under the Law, CEQA or the City’s Municipal Code. The FHS will promptly notify the Developer of the action. Within fifteen days after receipt of the notice, the Developer shall take all steps necessary and appropriate to assume defense of the action. The FHS will cooperate with the Developer in the defense of the action (at no cost to the FHS). Neither the Developer nor the FHS will compromise the defense of such action or permit a default judgment to be taken against the FHS without the prior written approval of the other party(ies).
16 4.1.2 Survival of Indemnification Provisions. Except as otherwise specifically stated herein, the indemnification provisions in this subsection and every other indemnification in this Agreement will survive any termination of this Agreement, will survive any Closing, will survive the expiration of any covenant herein and will not merge with any other document evidencing an interest in real property.
4.2 I
nsurance.
(a) Throughout the life of this Agreement, DEVELOPER shall pay for and maintain in full force and effect all insurance as required herein with an insurance company(ies) either (i) admitted by the California Insurance Commissioner to do business in the State of California and rated no less than “A-VII” in the Best’s Insurance Rating Guide, or (ii) as may be authorized in writing by City'S Risk Manager or his/her designee at any time and in his/her sole discretion. The required policies of insurance as stated herein shall maintain limits of liability of not less than those amounts stated therein.
However, the insurance limits available to FHS , its officers, officials, employees, agents and volunteers as additional insureds, shall be the greater of the minimum limits specified therein or the full limit of any insurance proceeds to the named insured.
(b) If at any time during the life of the Agreement or any extension, DEVELOPER or any of its subcontractors fail to maintain any required insurance in full force and effect, all services and work under this Agreement shall be discontinued immediately until notice is received by FHS that the required insurance has been restored to full force and effect and that the premiums therefore have been paid for a period satisfactory to FHS . Any failure to maintain the required insurance shall be sufficient cause for FHS to terminate this Agreement. No action taken by FHS pursuant to this section shall in any way relieve DEVELOPER of its responsibilities under this Agreement. The phrase “fail to maintain any required insurance” shall include, without limitation, notification received by FHS that an insurer has commenced proceedings, or has had proceedings commenced against it, indicating that the insurer is insolvent.
(c) The fact that insurance is obtained by DEVELOPER shall not be deemed to release or diminish the liability of DEVELOPER, including, without limitation, liability under the indemnity provisions of this Agreement.
The duty to indemnify FHS shall apply to all claims and liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by DEVELOPER. Approval or purchase of any insurance contracts or policies shall in no way relieve from liability nor limit the liability of DEVELOPER, vendors, suppliers, invitees, contractors, sub-contractors, subcontractors, or anyone employed directly or indirectly by any of them.
Coverage shall be at least as broad as:
(i) COMMERCIAL GENERAL LIABILITY insurance which shall be at least as broad as the most current version of Insurance Services Office (ISO) Commercial General Liability 17 Coverage Form CG 00 01 and include insurance for “bodily injury,” “property damage” and “personal and advertising injury” with coverage for premises and operations (including the use of owned and non- owned equipment), products and completed operations, and contractual liability (including, without limitation, indemnity obligations under the Agreement) with limits of liability of not less than the following:
$2,000,000 per occurrence for bodily injury and property damage $2,000,000 per occurrence for personal and advertising injury $4,000,000 aggregate for products and completed operations $4,000,000 general aggregate applying separately to work performed under the Agreement
(ii) COMMERCIAL AUTOMOBILE LIABILITY insurance which shall be at least as broad as the most current version of Insurance Service Office (ISO) Business Auto Coverage Form CA 00 01, and include coverage for all owned, hired, and non-owned automobiles or other licensed vehicles (Code 1-Any Auto) with limits of liability of not less than $1,000,000 per accident for bodily injury and property damage.
(iii) WORKERS’ COMPENSATION insurance as required under the California Labor Code. (iv) EMPLOYEE LIABILITY insurance with limits of liability of not less than $1,000,000 each accident, $1,000,000 disease policy limit and $1,000,000 diseased each employee. (v) BUILDERS RISK (Course of Construction) insurance, obtained by the DEVELOPER or subcontractor in an amount equal to the completion value of the Project with no coinsurance penalty provisions. (Only required if the project includes new construction of a building; or renovation of, or addition to, an existing building.) (vi) CONTRACTOR POLLUTION with coverage for bodily injury, property damage or pollution clean-up costs that could result from of pollution condition, both sudden and gradual. Including a discharge of pollutants brought to the work site, a release of pre- existing pollutants at the site, or other pollution conditions with limits of liability of not less than the following:
$1,000,000 per occurrence
$2,000,000 general aggregate per annual policy period
In the event the work involves any lead- based, mold or asbestos environmental hazard, either the Automobile Liability insurance policy or the Pollution Liability insurance policy shall be endorsed to include Transportation Pollution Liability insurance covering materials to be transported by the DEVELOPER pursuant to the SLFRF Agreement.
In the event the work involves any lead- based environmental hazard (e.g., lead- based paint), the DEVELOPER’s Pollution Liability insurance policy shall be endorsed to include coverage for lead based environmental hazards. In the event the DEVELOPER involves any asbestos environmental hazard (e.g., asbestos remediation), the DEVELOPER’s Pollution Liability insurance policy shall be endorsed to include coverage for asbestos environmental hazards. In the event the SLFRF Agreement involves any mold environmental hazard (e.g., mold remediation), the Pollution Liability insurance policy shall be endorsed to include coverage for mold environmental hazards and “microbial matter including mold” within the definition of “Pollution” under the policy.
UMBRELLA OR EXCESS INSURANCE
18 In the event DEVELOPER purchases an Umbrella or Excess insurance policy(ies) to meet the “Minimum Limits of Insurance,” this insurance policy(ies) shall “follow form” and afford no less coverage than the primary insurance policy(ies). In addition, such Umbrella or Excess insurance policy(ies) shall also apply on a primary and non-contributory basis for the benefit of the FHS, its officers, officials, employees, agents and volunteers.
DEDUCTIBLES AND SELF-INSURED RETENTIONS
DEVELOPER shall be responsible for payment of any deductibles contained in any insurance policy(ies) required herein and DEVELOPER shall also be responsible for payment of any self-insured retentions.
OTHER INSURANCE PROVISIONS/ENDORSEMENTS
All policies of insurance required hereunder shall be endorsed to provide that the coverage shall not be cancelled, non-renewed, reduced in coverage or in limits except after thirty (30) calendar day written notice has been given to the FHS . Upon issuance by the insurer, broker, or agent of a notice of cancellation, non- renewal, or reduction in coverage or in limits, the DEVELOPER shall furnish the FHS with a new certificate and applicable endorsements for such policy(ies). In the event any policy is due to expire during the work to be performed for the FHS , the DEVELOPER shall provide a new certificate, and applicable endorsements, evidencing renewal of such policy not less than fifteen (15) calendar days prior to the expiration date of the expiring policy.
The General Liability, Pollution and Automobile Liability insurance policies shall be written on an occurrence form.
The General Liability, Automobile Liability and Pollution Liability insurance policies shall name the FHS, its officers, officials, agents, employees, and volunteers as an additional insured for ongoing and completed operations. All such policies of insurance shall be endorsed so the DEVELOPER’s insurance shall be primary and no contribution shall be required of the FHS.
The coverage shall contain no special limitations on the scope of protection afforded to the FHS, its officers, officials, employees, agents, and volunteers.
If the DEVELOPER maintains higher limits of liability than the minimums shown above, the FHS requires and shall be entitled to coverage for the higher limits of liability maintained by the DEVELOPER.
The Builders Risk (Course of Construction) insurance policy shall be endorsed to name the FHS as loss payee.
All insurance policies required including the Workers’ Compensation insurance policy shall contain a waiver of subrogation as to the FHS, its officers, officials, agents, employees, and volunteers.
The DEVELOPER shall furnish the FHS with all certificate(s) and applicable endorsements effecting coverage required hereunder. All certificates and applicable endorsements are to be received and approved by the CITY’s Risk Manager or his/her designee before work commences. Upon request of the FHS , the DEVELOPER shall immediately furnish the FHS with a complete copy of any insurance policy required under this Agreement, including all endorsements, with said copy certified by the underwriter to be a true and correct copy of the original policy. This requirement shall survive expiration or termination of this 19 Agreement.
In the event of a partial or total destruction by the perils insured against of any or all of the work and/or materials herein provided for at any time prior to the final completion of the Agreement and the final acceptance by the FHS of the work or materials to be performed or supplied thereunder, the DEVELOPER shall promptly reconstruct, repair, replace, or restore all work or materials so destroyed or injured at his/her sole cost and expense.
Nothing herein provided for shall in any way excuse the DEVELOPER or his/her insurance company from the obligation of furnishing all the required materials and completing the work in full compliance with the terms of this Agreement.
SUBCONTRACTORS
If DEVELOPER subcontracts any or all of the services to be performed under this Agreement, DEVELOPER shall require, at the discretion of the FHS Risk Manager or designee, subcontractor(s) to enter into a separate Side Agreement with the FHS to provide required indemnification and insurance protection. Any required Side Agreement(s) and associated insurance documents for the subcontractor must be reviewed and preapproved by FHS Risk Manager or designee. If no Side Agreement is required, DEVELOPER will be solely responsible for ensuring that its subcontractors maintain insurance coverage at levels no less than those required by applicable law and is customary in the relevant industry.
4.3 Property Insurance. The DEVELOPER shall maintain in full force and effect, throughout the remaining life of this Agreement, a policy or policies of property insurance acceptable to the FHS, covering the Project premises, with limits reflective of the value of the Project premises upon issuance of the Certificate of Completion or substantial completion of the project referenced in this agreement, including fire and Extended Comprehensive Exposure (ECE) coverage in an amount, form, substance, and quality as acceptable to the City’s Risk Manager. The FHS shall be added by endorsement as a loss payee thereon.
4.4 I
nsurance for Project Design Work . Developer shall maintain for its Project design work, or if Developer subcontracts any of the Project design work Developer shall require each design subcontractor to maintain, professional liability insurance (errors and omissions) with a limit of not less than one million dollars ($1,000,000) per occurrence/claim, two million dollars (2,000,000) aggregate . If claims made forms are used for any Professional Liability Coverage, either (i) the policy shall be endorsed to provide not less than a five-year discovery period, or (ii) the coverage shall be maintained for a minimum of five years after the Release of Construction Covenants is recorded. The requirements of this section relating to such coverage shall survive termination or expiration of this Agreement.
4.5 P
erformance and Payment Bonds . Developer will obtain and deliver labor and material bonds, payment, and performance bonds, issued by an insurance company meeting the criteria for Developer’s other insurance under this Agreement. The bonds will each contain a penal sum at least equal to 40% of Developer’s estimated construction costs of any particular Phase of the Project then under construction and shall remain in full force until the issuance of a “Safe to Occupy” Certificate or Certificate of Occupancy, or the recording of a Certificate of Completion for that Phase, whichever is earlier. The bonds will name FHS as co- 20 obligee. Instead of requiring performance and payment bonds, FHS may consider and accept other evidence of Developer's ability to complete the Project.
5. SECURITY FINANCING INTERESTS AND RIGHTS OF HOLDERS.
5.1 Prohibition Against Transfer of Property, the Buildings or Structures Thereon and Assignment of Agreement. After conveyance of title and prior to the issuance by FHS of a Certificate of Completion for the Project, the Developer shall not, except as expressly permitted by this Agreement, sell, transfer, convey, assign, or lease the whole or any part of the Property or the buildings or improvements thereon without the prior written approval of FHS . This prohibition shall not be deemed to prevent the granting of easements or permits to facilitate the development of the Property or to prohibit or restrict the leasing of any part or parts of a building or structure when said improvements are completed.
5.1.1 P
ermitted Transfers. Notwithstanding the foregoing, the following events (Permitted Transfers) shall not be deemed a transfer for the purposes of requiring FHS’s consent:
A. Creation of Security Financing Interests;
B. A sale, conveyance, or transfer of the Property at
foreclosure (or a deed in lieu of foreclosure) resulting from a Security Financing Interest;
C. The conveyance or dedication of parts of the Property to the FHS or the grant of easements or permits solely to facilitate the development of the Property before the Certificate of Completion is recorded;
D. Sale or rental of Project units/space in accordance with this Agreement;
E. Sale or assignment to an entity controlled by or in common control with Developer;
F. Assignments resulting from the death or mental or
physical incapacity of an individual;
G. Assignments in trust for the benefit of a partner’s
spouse, children, grandchildren or other family members.
5.2 Approval or C onsent of FHS . When a request for transfer or assignment is submitted to FHS for consideration, approval will be conditioned on the following:
A. F inancial Strength and Business E xperience. The
proposed transferee will demonstrate to FHS’s reasonable satisfaction that the proposed transferee has sufficient financial strength and the business experience in planning, financing, development, ownership, and operation of similar projects to complete the Project, or portion thereof, competently.
B. A
ssumption Agreement. Any transferee, by recordable
instrument acceptable to FHS , shall expressly assume all the 21 unfulfilled or ongoing obligations of the Developer under this Agreement, and agree to be subject to all the conditions and restrictions to which the Developer is subject with respect to the Property or applicable portion thereof.
C. Transfer Documents. The Developer or its successors shall submit all documents, proposed to effect any transfer or assignment, to FHS for review and approval.
D. Oth
er Information. Developer or its successors shall
deliver all information to FHS that FHS may reasonably request to enable it to evaluate the proposed transfer or assignment. FHS shall approve, conditionally approve, or disapprove a request for assignment within fifteen days after receiving the request and all supporting documentation.
E. D
eveloper’s Release. FHS’s approval of any transfer,
assignment, or sale will not relieve the Developer or any successor from any unfulfilled or ongoing obligations of Developer under this Agreement with respect to any portion of the Property not transferred.
The provisions of this subsection are intended to discourage land speculation, and these provisions shall be liberally interpreted to accomplish that end.
5.3 S
ecurity Financing; Rights of Holders.
5.3.1 No Encumbrances Except Mortgages, Deeds of Trust, Sales and Lease- Back or Other Financing for Development .
Notwithstanding Section 5.1 of this Agreement, mortgages, deeds of trust, sales and leases-back or any other form of conveyance required for any reasonable method of financing are permitted before issuance of a Certificate of Completion but only for the purpose of securing loans of funds to be used for financing the acquisition of the Property, the construction of improvements on the Property and any other expenditures necessary and appropriate to develop the Property under this Agreement. To this end, if the Developer and the Developer’s construction lender provide a written request to the Executive Director for FHS to subordinate its interests in this Agreement to the interests of the construction lender, and the lender provides a written proposed subordination agreement, then the Executive Director, or her designee, shall consider and approve the subordination agreement if the following conditions are met: (1) the lender states in writing a necessity for the requested subordination; (2) the terms of the requested subordination are commercially reasonable under the circumstances; (3) the Developer provides to the Executive Director a statement of all material terms of the sources of equity and loans for construction of the project and that information demonstrates continued financial viability of the project through completion of construction; (4) the funds disbursed from each construction loan shall 22 be used only for costs and charges associated with the loan and construction of the Improvements; (5) the interest on each construction loan shall be at a reasonable rate based on all the facts and circumstances; (6) Developer shall provide FHS with evidence of Developer’s ability to satisfy any equity requirements of each construction loan; and ( 7) the City Attorney approves the subordination as to form. Any requested subordination shall deemed approved by the Executive Director if the above conditions have been met and the Executive Director or her designee has not approved or rejected the terms of the subordination within thirty days of the conditions having been met. The Developer shall promptly notify FHS of any mortgage, deed of trust, sale and lease-back or other financing conveyance, encumbrance or lien that has been created or attached thereto prior to completion of the construction of the improvements on the Property whether by voluntary act of the Developer or otherwise.
The words “mortgage” and “deed of trust,” as used herein, include all other appropriate modes of financing real estate acquisition, construction and land development.
5.3.2 Holder Not Obligated To Construct Improvements. The holder of any mortgage, deed of trust or other security interest authorized by this Agreement shall in no way be obligated by the provisions of this Agreement to construct or complete the improvements or to guarantee such construction or completion, nor shall any covenant or any other provision in the grant deed for the Property be construed so to obligate such holder. Nothing in this Agreement shall be deemed to construe, permit or authorize any such holder to devote the Property to any uses or to construct any improvements thereon other than those uses or improvements provided for or authorized by this Agreement.
5.3.3 No
tice of Default to Mortgage, Deed of Trust, or Other
Security Interest Holders; Right to Cure. Whenever FHS shall deliver any notice or demand to the Developer with respect to any breach or default by the Developer in completion of construction of the Improvements, FHS shall at the same time deliver a copy of such notice or demand to each holder of record of any mortgage, deed of trust, or other security interest authorized by this Agreement who has previously made a written request to FHS therefor default of the Developer under this Section 5 .3.3. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Improvements (beyond the extent necessary to conserve or protect the Improvements or construction already made) without first having expressly assumed the Developer’s obligations to FHS by written agreement reasonably satisfactory to FHS. The holder in that event must agree to complete, in the manner provided in this Agreement, the Improvements to which the lien or title of such holder relates and submit evidence reasonably satisfactory to FHS that it has the 23 qualifications and financial responsibility necessary to perform such obligations. Any such holder properly completing such Improvements shall be entitled, upon written request made to FHS, to a Certificate of Completion from FHS.
5.3.4 Failure of Holder to C omplete Improvements. In any case where, six months after default by the Developer in completion of construction of Improvements under this Agreement, the holder of any mortgage, deed of trust , or other security interest creating a lien or encumbrance upon the Property has not exercised the option to construct, or if it has exercised the option and has not proceeded diligently with construction, FHS may purchase the mortgage, deed of trust, or other security interest by payment to the holder of the amount of the unpaid debt, plus any accrued and unpaid interest. If the ownership of the Property has vested in the holder, FHS , if it so desires, shall be entitled to a conveyance of the Property from the holder to FHS upon payment to the holder of an amount equal to the sum of the following:
A. The unpaid mortgage, deed of trust, or other
security interest debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings);
B. All expenses with respect to foreclosure;
C. The net expenses, if any (exclusive of general
overhead), incurred by the holder as a direct result of the subsequent management of the Property;
D. The costs of any authorized improvements made
by such holder; and
E. An amount equivalent to the interest that would
have accrued on the aggregate of such amounts had all such amounts become part of the mortgage or deed of trust debt and such debt had continued in existence to the date of payment by FHS.
5.3.5 Right of FHS to Cure Mortgage, Deed of Trust or Other Security Interest Default. In the event of a default or breach by the Developer on a mortgage, deed of trust or other security interest with respect to the Property prior to the completion of the Project, and the holder has not exercised its option to complete the Project, FHS may cure the default prior to completion of any foreclosure. In any such event, FHS shall be entitled to reimbursement from Developer of all costs and expenses incurred by FHS in curing the default. FHS shall also be entitled to a lien upon the Property to the extent of such costs and disbursements. Any such lien shall be subject to mortgages, deeds of trust or other security interests executed for the sole purpose 24 of obtaining funds to purchase and develop the Property as authorized herein.
6. REPRESENTATIONS AND WARRANTIES.
6.1 Developer Representations and Warranties.
A. Representations and Warranties of Developer. Developer represents and warrants that:
1. Developer is a California nonprofit corporation duly formed and existing under the laws of the State of California, in good standing, and authorized to do business in the State of California, County of Fresno, and City of Fresno.
2. Developer has all requisite power and authority to carry out its business as now and hereafter conducted and to enter and perform its obligations under this Agreement.
3. The person or persons signing this Agreement for Developer have been duly authorized to execute and deliver this Agreement and to legally bind Developer to its terms and conditions.
4. Developer’s execution and performance of this Agreement does not violate any provision of any other agreement to which Developer is a party.
5. Except as may be specifically set forth in this Agreement, no approvals or consents not heretofore obtained by Developer are necessary to Developer’s execution of this Agreement.
6. Developer has or will have sufficient funds available to fund the Project and to pay all costs assumed by Developer hereunder.
7. This Agreement is valid, binding, and enforceable against Developer in accordance with its terms, except as such enforceability may be limited by principals of public policy and subject to the laws of general application relating to bankruptcy, insolvency and the relief of debtors, and rules of law governing specific performance, injunctive relief or other equitable remedies.
6.2. Survival of Representations and Warranties. The parties are relying upon the above representations and warranties in entering this DDA. The foregoing representations are and shall be continuing in nature and shall remain in full force and effect until all obligations under this DDA are met or this DDA is terminated in a manner provided herein.
25 7. DEFAULT, REMEDIES AND TERMINATION.
7.1 Default. Failure or delay by either party to perform any term of this Agreement shall be a default under this Agreement if not cured within the time set forth herein. Any failure or delay by a party in asserting any right or remedy will not constitute a waiver, and will not deprive the party of its right to institute and maintain any action or proceeding necessary to protect or enforce any right or remedy.
7.2 Leg
al Actions. A party may institute a legal action to cure, correct or remedy any default, to recover damages for any default, or to obtain any other remedy consistent with the purposes of this Agreement. Such legal action shall be brought in the Fresno County Courts, or the Fresno Division of the Federal District Court for the Eastern District of California.
7.3 R
ights and Remedies are Cumulative. Except as may be expressly stated otherwise in this Agreement, the rights and remedies of the parties are cumulative. The exercise by either party of one or more of its rights or remedies shall not preclude the exercise by it, at the same or a different time, of any other rights or remedies for the same default or any other default. In addition to the specific rights and remedies herein, the parties may resort to any other rights or remedies available at law or in equity, including, without limitation, specific performance.
7.4 N
otice and Cure Periods . If either party fails to perform under any provision of this Agreement including documents incorporated herein, the non- defaulting party shall serve written notice of the default on the defaulting party, describing the default, and the actions necessary to cure the default. A defaulting party will have thirty days from the date of the notice to cure the breach or failure unless a different time period is provided in this Agreement in which case the latter shall apply. If the default is not susceptible to cure within the thirty days, the defaulting party shall begin to cure the default within the thirty days and after that diligently prosecute the cure to completion. Failure of the defaulting party to cure within these times shall entitle the non- defaulting party to enforce any right or remedy provided in this Agreement , at law, or in equity. This provision is not intended to modify or extend any other notice or cure period specifically provided for in this Agreement. Failure or delay in giving such notice shall not constitute a waiver of any default, nor shall it change the time of default.
7.5 Rig
ht of Re -entry (Power of Termination) and Reverter. FHS may reenter and take possession of the Property, or part of it, and all improvements on it, terminate the estate conveyed to Developer by the Grant Deed and revest the estate in FHS if, after the Closing, but before recording a Certificate of Completion, if any of the following occurs:
7.5.1. Developer does not begin and complete construction of the Project within the time specified in the Performance Schedule or this Agreement unless otherwise extended by the terms herein; or
7.5.2 Developer abandons or substantially suspends construction of the Project for 30 days after FHS gives written notice of the abandonment or suspension; or
26 7.5.3. Developer assigns or transfers, or suffers an involuntary transfer of, any rights or obligations under this Agreement, or in the Property, in violation of the assignment provision of this Agreement.
7.6 Effect on Security Holders. FHS’s right to reenter, repossess, terminate, and revest shall be included within the Grant Deed included as Exhibit E. Such right to reenter, repossess, terminate, and revest shall be subject to, limited by, and shall not defeat, render invalid, or limit: (i) any Security Financing Interest permitted by this Agreement; or (ii) any provision of this Agreement protecting the holder’s Security Financing Interest.
The provisions of Sections 7.5 and 7 .6 shall automatically terminate on the recordation of a Certificate of Completion for the Project (or applicable phase).
8. GENERAL PROVISIONS.
8.1 Notice, Demands and Communication. All notices, elections, requests, acceptances, demands, instructions or other communications (notice or notices) to be given to any party under this Agreement shall be in writing and shall be deemed to have been duly given (i) on the date of service if personally served on the party to whom notice is to be given; (ii) within forty-eight hours after mailing, if mailed to the party to whom notice is to be given, by first class mail which is either registered or certified, postage prepaid, return receipt requested; (iii) within twenty -four hours after being deposited with a recognized private courier service ( e.g., Federal Express), if delivered by a private courier service to the party to whom notice is to be given, all charges prepaid; or (iv) when sent, if given by electronic format that provides verification of successful transmission. All notices shall be properly addressed to the party receiving notice as follows:
FHS:
Fresno Housing Successor City of Fresno
Attention: Executive Director
848 M Street, Third Floor
Fresno, CA 93721
WITH COPIES TO:
City Attorney
2600 Fresno Street
Fresno CA 93721-3602
DEVELOPER:
Fresno Area Hispanic Foundation
Attn: Dora Westerlund, CEO & President
1444 Fulton Street
Fresno, CA 93721
WITH COPIES TO:
Coleman & Horowitt, LLP
Attention: Darryl J. Horowitt, Esq.
499 West Shaw Avenue, Suite 116
27 Fresno, California 93704
A party may change its address by notice given according to this subsection.
8.2 Conflict of Interests. No member, official, officer or employee of the Developer or FHS shall have any direct or indirect interest in this Agreement, or shall participate in any decision relating to this Agreement where such interest or participation is prohibited by law. No officer, employee, or agent of FHS who exercises any function or responsibility concerning the planning and carrying out of the Project, or any other person who exercises any function or responsibility concerning any aspect of this Agreement or the Project, shall have any personal financial interest, direct or indirect, in this Agreement or the Project. Developer represents and warrants that it has not paid or given, and will not pay or give, to any third party any money or other consideration for obtaining this Agreement, other than normal costs of conducting business and costs of professional services such as architects, consultants, engineers and attorneys.
8.2.1 No contractor, subcontractor, mechanic, material man, laborer, vendor or other person hired or retained by Developer shall be, nor shall any of them be deemed to be, third-party beneficiaries of this Agreement, rather each such person shall be deemed to have agreed (a) that they shall look to Developer as their sole source of recovery if not paid; and (b) except as otherwise agreed to by FHS and any such person in writing, they may not enter any claim or bring any such action against FHS under any circumstances. Except as provided by law, or as otherwise agreed to in writing between FHS and any such person, each such person shall be deemed to have waived in writing all right to seek redress from FHS under any circumstances whatsoever.
8.3 Nonliability of Officials, Employees and Agents. No member, official, officer, employee or agent of FHS shall be personally liable to the Developer, or any successor in interest, for any default or breach by FHS.
8.4 C ounterparts . This Agreement may be executed in counterparts, and together each executed counterpart shall constitute one Agreement.
8.5 W aiver . A party’s waiver of the other’s breach of any provision of this Agreement shall not constitute a continuing waiver or a waiver of any subsequent breach of the same or a different provision of this Agreement. No provision of this Agreement may be waived except in a writing signed by all the parties. Waiver of any one provision shall not be deemed to be a waiver of any other provision herein.
8.6 A
ttorneys’ F ees. If a party initiates or defends litigation or any legal proceeding regarding the enforcement of this Agreement, the prevailing party in such litigation or proceeding, in addition to any other relief that may be granted, shall be entitled to reasonable attorneys’ fees. Attorneys’ fees shall include attorneys’ fees on any appeal. A party entitled to attorneys’ fees shall be entitled to all other reasonable costs for investigating the action, retaining expert witnesses, taking depositions and discovery, and all other necessary costs incurred with respect to the action. All such fees shall be deemed to have accrued on commencement of the action and shall be enforceable whether or not such action is prosecuted to judgment.
28 8.7 Governing Law. This Agreement shall be interpreted and enforced, and the rights and duties of the parties under this Agreement (both procedural and substantive) shall be determined according to California law.
8.8 F urther Assurances. Each party will take any further acts and will sign and deliver any further instruments required to carry out the intent and purposes of this Agreement.
8.9 E ntire Understanding of the Parties. The exhibits referenced as attached are by such references incorporated into this Agreement. This Agreement, including exhibits, is the entire understanding and agreement of the parties. All prior discussions, understandings, and written agreements are superseded by this Agreement. This Agreement shall not be modified except by written instrument duly approved as required by law and executed by authorized representatives of the parties. Should the terms of any exhibit conflict with the body of this Agreement, the body of this Agreement shall govern.
8.10 C
onsent, Reasonableness. Unless this Agreement specifically authorizes a party to withhold its approval, consent or satisfaction in its sole discretion, any consent, or approval, or satisfaction to be requested or required of a party, shall not be unreasonably withheld, conditioned or delayed.
8.11 P
artial Invalidity. If any part of this Agreement is held to be invalid, void or unenforceable in any legal, equitable or arbitration proceeding, the remainder of the Agreement shall continue in effect, unless not giving effect to the invalid or unenforceable part would prevent effecting the purposes of the Project and this Agreement.
8.12 A
mbiguity . This Agreement is the result of the combined efforts of the parties. Should any provision of this Agreement be found ambiguous, the ambiguity shall not be resolved by construing this Agreement in favor of or against any party, but by construing the terms according to their generally accepted meaning, considering the objective of the Agreement.
8.13 N
umber and Gender . Masculine, feminine or neuter gender terms and singular or plural numbers will include others when the context so indicates.
8.14 H eadings . All headings are for convenience only, are not a part of this Agreement, and are not to be used in construing this Agreement.
8.15 B inding Upon Successors. This Agreement shall bind and inure to the benefit of the successors in interest, personal representatives, and assigns of each party, subject to the limitation on transfer and assignment contained in this Agreement. Any reference in this Agreement to a specifically named party shall be deemed to apply to any successor, heir, administrator, executor, representative, or assign of the party who has acquired an interest in compliance with the terms of this Agreement, or under law.
8.16 R
elationship of the Parties. Nothing in this Agreement, the Grant Deed, or any other document executed in connection with this Agreement shall be construed as creating a partnership, joint venture, agency, employment relationship, or similar relationship between FHS and the Developer or any of the Developer’s contractors, subcontractors, employees, agents, representatives, transferees, 29 successors-in-interest or assigns. Nothing in this Agreement establishes a principal and agent relationship between the parties.
8.17 N ature of the P roject. The Project is a private undertaking of the Developer. After FHS conveys title or possession of the property to Developer, the Developer shall have exclusive control over the Property, subject to the terms of this Agreement and all applicable Federal, State and local laws, ordinances, codes, regulations, standards and policies.
8.18 Time of Essence.
Time is of the essence of each term, condition, and
covenant contained in this Agreement.
8.19 Survival of Provisions. Those provisions expressly surviving ex piration or earlier termination, including each indemnification provision, shall survive the Closing and expiration or earlier termination of this Agreement, and shall not merge with the Grant Deed or other document evidencing any interest in real property. [SI
GNATURES APPEAR ON NEXT PAGE]
E
XHIBIT “A”
SITE MAP
EXHIBIT “A-1”
LEGAL DESCRIPTION
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
Lots 1, 2 and 3 in Block 74 of the TOWN (now City) of Fresno, according to the map thereof recorded December 10, 1888 in Book 4, Page 2 of Plats, records of said County.
EXCEPTING THEREFROM the Southeasterly 4.32 inches of Lot 3 in Block 74. es of Lot 3 in Block 74.
APN: 468-282-21T
EXHIBIT “B”
SCOPE OF DEVELOPMENT
AND BASIC DESIGN
The parcel consists of a two- story commercial building and basement with each level containing about 11, 250 square feet. The Fresno Area Hispanic Foundation (FAHF) proposes to redevelop and revitalize the two-story property into a mixed-use combination of retail and office space.
The ground floor is conceptually planned for repurpose as a food hub for small restaurants and related businesses. The second floor is planned for rehabilitation and reuse as office space. Both first and second floor space are planned to incubate and grow small businesses. The basement will be rehabilitated to keep its original purpose for office storage, mechanical and related uses.
**Except as set forth in this Agreement, before Developer begins constructing the Improvements or undertakes any other work of improvements on the Property, Developer, at its own cost and expense, will independently secure all land use and other entitlements, permits, and approvals that City or any other governmental agency with jurisdiction over the Project requires for construction of the Project.
EX
HIBIT “C”
PERFORMANCE SCHEDULE*
Items Completed Time for Performance Outside Date
City of Fresno in its capacity as
Housing Successor (FHS)
consideration of Disposition and
Development Agreement (DDA)
May 2024
Execution of DDA Within fifteen days after approval
of DDA by FHS and receipt and
approval of insurance certificates
and receipt of executed
documents from Developer.
May 2024
Escrow Opens Within ten days following the
effective date of the DDA
Due diligence November 1, 2024
Submission of Building Plans for
Planning and Building Review
September 1, 2025
Approval of Building Plans May 2026
Escrow Closes Within thirty days of approval of
all land use and other
entitlements, permits, and
approvals that City or any other
governmental agency with
jurisdiction over the Project
requires for construction of the
Project.
June 2026
Commencement of Construction
of Developer’s Improvements.
Within thirty days after receipt of
building permits by the
Developer, construction shall
commence on the improvements
to be constructed on the Project
Site.
June 2026
Completion of Construction of
Developer’s Improvements. The
Developer shall complete
construction of the improvements
to be constructed on the Project
Site.
June 2028
Issuance – Certificate of
Completion. City shall furnish
the Developer with a Certificate
of Completion on the Project.
Promptly after completion of all
construction and upon written
request thereof by the Developer.
July 2028
* T
hese dates are subject to any extension based upon the extension terms expressly provided in the DDA. In the event On/Off Site Plans have been timely submitted by Developer and approval cannot be obtained by the date set forth herein, the milestones occurring on and after said dates shall be extended by the number of days equal to the duration of the delay.
EXHIBIT “D”
CERTIFICATE OF COMPLETION
RECORDED AT THE REQUEST OF:
City of Fresno in its capacity as
Housing Successor to the
Redevelopment Agency of the
City of Fresno
848 M Street, Third Floor
Fresno, CA 93721
WHEN RECORDED RETURN TO:
City of Fresno in its capacity as
Housing Successor to the
Redevelopment Agency of the
City of Fresno
848 M Street, Third Floor
Fresno, CA 93721
Attn: Marlene Murphey
No Fee-Govt. Code Sections 6103-27383
APN: 468-282-21T
(SPACE ABOVE THIS LINE FOR RECORDER'S USE)
This Release of Construction Covenants and Certificate of Completion is recorded at the request and for the benefit of the City of Fresno in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno.
A. As agreed in a Disposition and Development Agreement including covenants, conditions and restrictions, (DDA) dated [___, 20__] entered by the CITY OF FRESNO, a municipal corporation, in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno (FHS), and FRESNO AREA HISPANIC FOUNDATION, a California nonprofit corporation (DEVELOPER). FHS conveyed certain real property to DEVELOPER under a Grant Deed, dated [______________], recorded in the Official Records of Fresno County on [ ] as Document No. [ ] (the DEED), and the DEVELOPER agreed to complete/cause the completion of the of construction of certain improvements described therein (the “Project”) upon the premises described therein as the “Property” according to the terms and conditions of the DDA and the documents and instruments referenced therein, incorporated herein.
B. The DDA or a memorandum of it was recorded [_______ 20__] as Instrument No. [_________] in the Official Records of Fresno County, California.
C. U
nder the terms of the DDA, after DEVELOPER completes/causes completion of construction of a Phase of the Project on the Property/portion thereof, DEVELOPER may ask FHS to record an instrument certifying that DEVELOPER has completed the required improvements for such Phase of development in the form of a Release of Construction Covenants and Certificate of Completion.
D. DEVELOPER has asked FHS to furnish DEVELOPER with a recordable Release of Construction Covenants and Certificate of Completion for a Phase of development.
E. FHS’S issuance of this Release of Construction Covenants and Certificate of Completion is conclusive evidence that DEVELOPER has completed the construction on a Phase of development of the Property to terminate and release DEVELOPER from the construction/improvement covenants in the DDA pertaining to such Phase.
NOW THEREFORE:
1. As provided in Section 3.4 of the DDA, FHS does hereby certify that construction of all of the improvements required by the DDA on the portion of the Property described in Attachment A, attached hereto and incorporated herein by this reference, has been satisfactorily completed.
2. This Release of Construction Covenants and Certificate of Completion shall not be deemed or construed to constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage, securing money loaned to finance the construction of the improvements on the Property. This Release of Construction Covenants and Certificate of Completion is not a notice of completion as referred to in Section 3093 of the California Civil Code.
IN WITNESS WHEREOF, FHS has executed this Release of Construction Covenants and Certificate of Completion as of this ____ day of [___________, 20__.] [S
IGNATURE PAGE TO FOLLOW]
IN
WITNESS WHEREOF, FHS has executed this Release of Construction Covenants and Certificate of Completion as of this ____ day of ___________, 20___.
CITY OF FRESNO,
A municipal corporation, in its capacity as
Housing Successor to the Redevelopment
Agency of the City of Fresno
B
y:______________________________
Name: Marlene Murphey
Its: Executive Director
O
wner hereby consents to recording this Certificate of Completion against the Property described herein.
D
ated: ________________, 202___
F
RESNO AREA HISPANIC FOUNDATION
By: __ _______________________
Name: ______________________
T
itle: ______________________
T
HE ABOVE PARTIES ARE TO SIGN THIS INSTRUMENT BEFORE A NOTARY PUBLIC.
A
TTEST: APPROVED AS TO FORM:
TODD STERMER, CMC ANDREW JANZ
City Clerk City Attorney
By: By:
T racy N. Parvanian
Deputy Assistant City Attorney
D
ated: ______________________ Dated:_____________________ 1 E
XHIBIT “E”
GRANT DEED
F
REE RECORDING REQUESTED BY AND
AFTER RECORDATION RETURN TO:
City of Fresno, in its capacity as
Housing Successor to the Redevelopment
Agency of the City of Fresno
Attn: Executive Director
848 M Street, Third Floor
Fresno, CA 93721
(Space Above This Line For Recorder's Office Use Only)
GRANT DEED
For valuable consideration, the receipt of which is hereby acknowledged, CITY OF FRESNO, a m unicipal corporation (Grantor), hereby grants to FRESNO AREA HISPANIC FOUNDATION (Grantee), the real property (Property) legally described in Attachment No. 1 attached hereto and incorporated herein by this reference.
Consistent with the Disposition and Development Agreement including covenants, conditions and restrictions, (DDA) dated ________________, 20___, entered by Grantor and Grantee, all incorporated herein by this reference, the Grantee herein covenants by and for itself and its successors, transferees, vendees, administrators, and assigns, and all persons claiming under or through it that:
1. There shall be no discrimination against or segregation of, any person or group of persons on account of any bases listed in subdivision (a) or (d) of Section 12995 of the Government Code, as those bases are defined in Section 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955 and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall Developer or any person claiming under or through him or her, establish or permit any practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees, or vendees in the Property.
a. Grantee will take all commercially reasonable precautions to prevent the release into the environment of any Hazardous Materials (as defined in the DDA) in, on or under the Property. Grantee will comply with all governmental requirements with respect to Hazardous Materials.
b. Until a Certificate of Completion is recorded as to the Property/portion thereof, Grantee will notify Grantor and give Grantor a copy or copies of all environmental permits, disclosures, applications, entitlements or inquiries relating to the Property 2 i
ncluding, without limitation, notices of violation, notices to comply, citations, inquiries, clean-up or abatement orders, cease and desist orders, reports filed pursuant to self - reporting requirements, and reports filed or applications made pursuant to any governmental requirement relating to Hazardous Materials and underground tanks.
Immediately after each incident, Grantee will report any unusual or potentially important incidents respecting the environmental condition of the Property to Grantor. c. If a release of any Hazardous Materials into the environment occurs, Grantee will, as soon as possible after the release, furnish Grantor with a copy of any reports relating thereto and copies of all correspondence with governmental agencies relating to the release. Upon request, Grantee will furnish Grantor with a copy of any other environmental entitlements or inquiries relating to or affecting the Property, including, without limitation, all permit applications, permits and reports, including reports and other matters, which may be characterized as confidential.
d. Grantee will indemnify, defend, and hold Grantor harmless from any claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage or expense (including, without limitation, attorneys’ fees), arising out of (i) the presence, release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about the Property, or the transportation of any Hazardous Materials to or from the Property, or (ii) the violation, or alleged violation of any statute, ordinance, order, rule, regulation, permit judgment or license relating to any use, generation, release, discharge, storage, disposal, or transportation of Hazardous Materials on, under, in or about, to or from the Property. This indemnity will include, without limitation, any damage, liability, fine, penalty, parallel or cross indemnity occurring after conveyance, cost or expense arising from or out of any claim, action, suit or proceeding for personal injury (including sickness, disease or death) tangible or intangible property damage, compensation for lost wages, business income, profits or other economic loss, damage to the natural resource or the environment, nuisance, contamination lease, spill, release or other adverse effect on the environment. The indemnity covers, without limitation, (a) all foreseeable and unforeseeable consequential damages, (b) the cost of any required or necessary repair, clean-up, or detoxification and the preparation of any closure or other required plans, and (c) costs of legal proceedings and attorneys’ fees. e. Grantee releases Grantor from all claims Grantee may have against, resulting from, or connected with the environmental condition of the Property. Such claims include, without limitation, all claims Grantee may have against Grantor under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ( “CERCLA”), or any other federal, state or local law, whether statutory or common law, ordinance, or regulation concerning the release of Hazardous Materials or substances into the environment from or at the Property, and the presence of such materials in, on, under or about the Property. Grantee expressly waives the benefits of Civil Code section 1542, which reads as follows:
A general release does not extend to claims which
the creditor does not know or expect to exist in his
favor at the time of executing the release which if
3 kn
own by him must have materially affected
settlement with the debtor.
2. Grantor is the beneficiary of the covenants running with the land for itself and for protecting the interest of the community and other parties, public or private, in whose favor and for whose benefit the covenants are provided, without regard to whether Grantor has been, remains, or is in ownership of any land on the Property/portion thereof. Grantor may exercise all rights and remedies, and maintain any actions or suits at law or in equity or other proceedings to enforce the covenants for itself or any other beneficiaries. The provisions of the DDA which by their terms or nature are intended to survive completion of the Project are fully enforceable under and shall not merge with this Deed.
3. If a conflict exists or arises between the provisions of this Deed and the DDA, the DDA shall control.
The obligations of the Grantee hereunder are covenants or conditions running with the land enforceable by Grantor through a reserved right to re-entry and reverter as set forth in the DDA.
IN WITNESS WHEREOF, the Grantor has caused this instrument to be executed on its behalf by its respective officers thereunto duly authorized, this _____________ day of _______________, 2024.
“GRANTOR”
CI
TY OF FRESNO
a municipal corporation in its capacity
as Housing Successor to the
Redevelopment Agency of the City of
Fresno
_______________________________
By: Marlene Murphey
Its: Executive Director
Date: ___________________________
4 AT
TACHMENT NO. 1 GRANT DEED
FRESNO AREA HISPANIC FOUNDATION
L
EGAL DESCRIPTION OF THE PROPERTIES
T
HE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
T
HE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
Lots 1, 2 and 3 in Block 74 of the TOWN (now City) of Fresno, according to the map thereof recorded December 10, 1888 in Book 4, Page 2 of Plats, records of said County.
EXCEPTING THEREFROM the Southeasterly 4.32 inches of Lot 3 in Block 74. f Plats, records of said County. EXCEPTING THEREFROM the Southeasterly 4.32 inches of Lot 3 in Block 74.
APN
: 468-282-21T
5 EXHIBIT F
C
ITY OF FRESNO IN ITS CAPACITY
AS HOUSING SUCCESSOR TO THE
REDEVELOPMENT AGENCY OF THE
CITY OF FRESNO
848 M Street, Third Floor
Fresno, CA 93721
Attn: Executive Director
W
HEN RECORDED RETURN TO:
C
ity of Fresno in its capacity as Housing
Successor to the Redevelopment Agency
of the City of Fresno
848 M Street, Third Floor
Fresno, CA 93721
Attn: Marlene Murphey
APN 468-282-21T (Space Above This Line for Recorder's Office Use Only)
AFFORDABLE HOUSING COVENANT
T
HIS AFFORDABLE HOUSING COVENANT (Covenant) is made and entered into this, by and between the CITY OF FRESNO, in its capacity as Housing Successor to the Redevelopment Agency of the City of Fresno, a public body, corporate and politic, and Fresno Area Hispanic Foundation, a California non- profit corporation (Buyer), and all successors and assigns, in accordance with the purchase of real property more particularly described in Exhibit "A" attached hereto and incorporated herein by reference (the Property) in accordance with the California Surplus Land Act. (Government Code Sections 54220, et seq.)
RECITALS:
WHEREAS, if ten (10) or more residential units are developed on the Property, not less than 15 percent of the total number of residential units developed on the property shall be sold or rented at affordable housing cost, as defined in Section 50052.5 of the California Health and Safety Code, or affordable rent, as defined in Section 50053 of the California Health and Safety Code, to lower income households, as defined in Section 50079.5 of the California Health and Safety Code. Rental units shall remain affordable to and occupied by lower income households for a period of 55 years for rental housing and 45 years for ownership housing. The initial occupants of all ownership units shall be lower income households, and the units shall be subject to an equity sharing agreement consistent with the provisions of paragraph (2) of subdivision (c) of 65915 of the California Government Code. These requirements shall be covenants or restrictions running with the land and shall be enforceable against any owner who violates a covenant or restriction and each successor -in-interest who continues the violation by any of the entities described in subdivisions (a) to (f), inclusive, of Section 54222.5 of the California Government Code. [SIGNATURES ON NEXT PAGE]
CI
TY OF FRESNO,
A municipal corporation,
in its capacity as Housing Successor to the
Redevelopment Agency of the City of Fresno
By:
Marlene Murphey, Executive Director Date
BU
YER
FRESNO AREA HISPANIC FOUNDATION,
a California non-profit corporation
By: _________________
Da
te: ____________________________
By:
_____________________________
Da
te: ____________________________
APPR
OVED AS TO FORM:
ANDREW JANZ
City Attorney
By: ______________________________
Tracy N. Parvanian Date
Assistant City Attorney
A
TTEST:
TODD STERMER, CMC
City Clerk
By:
D eputy
Da te
A
ttachments:
1. Exhibit A: Legal Description of Property
2. Exhibit B: Property Map
Exhibit A:
Legal Description of Property
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF FRESNO, COUNTY OF FRESNO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS:
Lots 1, 2 and 3 in Block 74 of the TOWN (now City) of Fresno, according to the map thereof recorded December 10, 1888 in Book 4, Page 2 of Plats, records of said County.
EXCEPTING THEREFROM the Southeasterly 4.32 inches of Lot 3 in Block 74.
APN
: 468-282-21T
Exhibit B: Property Map
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
On ,2024, before me, , a notary
public, personally appeared , who proved to
me on the basis of satisfactory evidence to be the person(s) whose name(s) 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 signatures 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. (Seal)
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.