Garden Grove City Council
September 13, 2022

NEIGHBORHOOD ENVIRONMENT (Continued)
PRICE TREND: (Continued) Note that while there was a decrease in appreciation rates in 2020, residential property
values have not been negatively affected by
the COVID-19 pandemic and resultant “Stay -
at-home” orders (lockdown), which began in
March 2020. While the number of sale
transactions decreased at the start of the
lockdown, after some limited activity,
residential buying activity surged, with many
residential property listings receiving multiple
offers, sometimes at “above asking” prices. In
the first to mid portion of 2021, there was a
significant increase in single family residential
property values. As of the first portion of 2022
the year over year increase in single family
residential property values, as ranged in excess
of 20% to 25% per year, in the subject area
and many nearby communities. Said increases,
which have continued through the present
time, are due to historically low mortgage
interest rates, as well as a lack of current
inventory. While interest rates have risen in
recent months, there remains significant
demand and value increases in many
residential markets.

AGE RANGE: The age range of residential buildings in the immediate and general subject market area is
generally from 25 to 70 years. Single family
residential properties within the immediate
subject market area range from effectively new
to 70 years.

OTHER: The availability and adequacy of public
facilities, transportation, schools, commercial
facilities, recreational opportunities, and
residential housing are rated fair-average.

The City of Garden Grove provides police
protection and fire protection.

Refer to the the Orange County Regional Data,
in the Addenda Section.

R. P. LAURAIN
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APPRAISERS - ANALYST S

R. P. LAURAIN
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APPRAISERS - ANALYSTS

VALUATION ANALYSIS

VALUATION ANALYSIS
The purpose of this valuation study is the estimation of market value of the subject property, as of the date of value set forth herein. Prior to the application of the appraisal process, which in this case employs the Sales Comparison Approach, it is necessary to consider and analyze the highest and best use of the subject property.

HIGHEST AND BEST USE ANALYSIS:

The 14th Edition of The Appraisal of Real Estate, by the Appraisal Institute, defines highest and best use on Page 332, as follows:
"The reasonably probable use of property that results in the highest value.”
In the process of forming an opinion of highest and best use, consideration must be given to various environmental and political factors such as zoning restrictions, probability of zone change, private deed restrictions, location, land size and configuration, topography, and the character/quality of land uses in the immediate and general subject market area.

There are four basic criteria utilized in the highest and best use analysis of a property as if vacant, as well as pres ently improved. The four criteria are summarized as follows:

1. Physically possible.

2. Legally permissible.

3. Financially feasible.

4. Maximally productive.

The foregoing are typically considered sequentially; for example, a specific use may prove to be maximally productive, however, if it is not legally permissible, or physically possible, the productivity is irrelevant.

The subject property is located at the west side of Thackery Drive beginning 150± feet north of Twintree Avenue, in the City of Garden Grove. The subject property contains 7,200 square feet of land area, per Orange County Assessor’s mapping. The site has an interior location on a secondary street, however, only the westerly portion of the street (Tha ckery Drive) is paved at the subject property frontage; the easterly portion of the street has gravel surfacing.

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VALUATION ANALYSIS (Continued)
HIGHEST AND BEST USE ANALYSIS: (Continued)
The site has an effectively rectangular land configuration. The subject property is rated average with respect to overall access.

All public utilities including water, gas, electric power, telephone, as well as sanitary sewer are available to the site. The physical characteristics of the subject parcel are considered adequate to accommodate legally permissible uses.

The subject property is located in the R-1-7 (Single-Family Residential) zone district of the City of Garden Grove. The “R-1” zone district “is intended to provide for the establishment and promotion of single family detached residences on individual lots and compatible associated activities.” The minimum lot size is 7,200 square feet. The maximum building height is 35 feet.

The front yard setback is 20 feet. The rear yard setback is 20% of the lot depth not to exceed 25 feet. The interior side yard setback is 5 feet; however, the street side yard setback is 10 feet.

Note, however, the land use designation is International West Mixed Use (IW).

The IW land use is “intended to provide for a mix of uses, including resort, entertainment, retail, hotel, and some higher density residential.” The density for residential development is 42.1 to 60 dwelling units per acre. Due to the relatively small land size, and considering on-site parking requirements, setbacks, landscaped areas, etc., it is reasonable to assume the subject site could accommodate a low to medium density multiple family residential development.

The foregoing IW land use, and potential development density, however, is considered somewhat offset by (1) the relatively small lot size, and (2) the existing covenant which may have an impact on development of the site as a single entity. Note, however, even single family lots are permitted a second Accessory Dwelling Unit (ADU) under current State standards.

After considering (1) the physical characteristics of the subject property, (2) the existing R-1-7 zoning and the IW (Inter national West Mixed Use) General Plan land use designation allowing for a higher density multiple family residential development, and (3) the financially feasible uses, the maximally productive use, and therefore, the highest and best use of the subject property is low to medium density residential development, given the relatively small lot size.

Many single family lots are sold, marketed and/or developed with two units, inclusive of an ADU. The subject property has been appraised accordingly.

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VALUATION ANALYSIS (Continued)
VALUATION METHODS:

There are three conventional methods (approaches) which can be used to estimate value. They are the Sales Comparison Approach, Cost-Summation Approach, and Income Capitalization Approach. The Sales Comparison Approach is the only valuation method considered reliable as an indicator of land value.

The reader is referred to the last portion of the Preface Section, following the heading "Terms and Definitions," for a brief description of each approach to value.

SALES COMPARISON APPROACH:

The Sales Comparison Approach takes into account properties which have sold in the open market. This approach, whether applied to vacant or improved property, is based on the Principle of Substitution which states, "The maximum value of a property tends to be set by the cost of acquiring an equally desirable substitute property, assuming no costly delay is encountered in making the substitution." Thus, the Sales Comparison Approach attempts to equate the subject property with sale properties by reviewing and weighing the various elements of comparability.

The Sales Comparison Approach has been applied to the subject property after an investigation was conducted of reasonably comparable multiple family residential land having recently sold within the immediate and general subject market area. The reader is referred to the Market Data Section for detailed information pertaining to each sale property. Refer also to the Market Data Map in the Market Data Section, for an illustration of the location of each sale property.

The reader is referred to the summary of Land Value Indicators on the following page. The sale properties surveyed cons ist of effectively vacant land parcels, and improved parcels acquired for redeve lopment, ranging in size from 4,356 to 68,936 square feet. The purchase prices per square foot of land area range from $41.81 to $70.02. The sales are set forth in chronological order and took place between January 2020 and May 2022. Data 8 represents a current listing.

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LAND VALUE INDICATORS:

Data
Sale Date
Address Zoning Land Size Corner/Alley Sale Price $ Per SF 1 1-20 R-1-7 6,369 s f
11831 Trask Ave., Garden Grove
no/no $310,000 $48.67
2 5-20 R2 22,500 s f
7072 Spruce St., Westminster
no/no $1,205,000 $53.56
3 12-20 GGMU-2 4,356 s f
13052 Nelson St., Garden Grove
no/no $305,000 $70.02
4 2-21 RL
10761 Rose St., Stanton
6,885 sf no/yes $375,000 $54.47
5 9-21 RS-6 6,911 s f
5891 Stanton Ave., Buena Park
no/no $470,000 $68.01
6 9 - 2 1 R 2 1 4 ,350 sf
4622 Watkins Way, Santa Ana
no/no $600,000 $41.81
7 5-22 R2/R-1-7 68,936 s f no/no $3,100,000
12701 Buaro St. and 12722 Dungan Ln., Garden Grove
$44.97
8 a s k i ng R-1-7 36,270 s f
8671 Orangewood Ave., Garden Grove
no/no $2,100,000 $57.90
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VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Financing and Cash Equivalency Adjustments:

Sale properties are adjusted for financing arrangements involved in transactions which are not market-typical. A cash equivalency adjustment is generally made in those cases where the cash down payment is generally less than 10% of the purchase price and the financing is other than conventional. The less-than- typical cash down payment, combined with other than conventional financing (such as seller financing), could influence a higher purchase price.

All of the sale properties involved all cash transactions or conventional financing.

A cash equivalency adjustment, therefore, has not been applied to any of the sale transactions.

Market Conditions:

An adjustment for market conditions (date of sale) is appropriate when certain sales occur during a rising or declining market. The adjustments are based upon observations of the real estate market and value appreciation/declining cycles dating back more than 15 years.

Real estate trends affecting residential properties in the subject market area experienced an upward value trend from 2003 through the first portion of 2007, after which property values generally stabilized. In the first portion of 2008, the residential real estate market experienced a significant decrease in price levels and development activity, which decrease accelerated in the latter portion of 2008 and continued through the latter portion of 2011.

Per discussions with various brokers, a review of various published reports and a review of numerous sale transactions, residential property values generally stabilized in 2012. In the latter part of 2012, the number of sale transactions began to increase, which led to nominal price increases beginning in the first portion of 2013. The rate of increase accelerated in 2015 through 2017. In 2018 and 2019 there was some stabilization in pricing, however, the upward trend in began to increase in 2020, despite the COVID-19 pandemic. The rate of increase accelerated in the mid to later portion of 2021, through the present time.

The reader is referred to the following Zillow graph pertaining to the median sale price of single family residences in the City of Garden Grove.

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VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
While there has been a significant increa se in value of improved single family residences, the rate of increase for the overall land market is considered to be somewhat less, given the limited number of developers/buyers of vacant land, and greater difficulty in obtaining constr uction financing, as compared to the predominantly owner-user single family residential market. Based on the foregoing, the market conditions adjustment applied to the sale properties is based on the following schedule:

January-December 2020: + 6.0% per year, or + 0.5% per month January-June 2021: + 12.0% per year, or + 1.0% per month July-December 2021: + 18.0% per year, or + 1.5% per month January-June 2022: + 18.0% per year, or + 1.5% per month Elements of Comparability:

All of the sales employed herein conveyed title to the fee simple interest, and represent arms-length transactions. After viewing all of the land sale properties, an analysis was made of the various elements of comparability. Some of those elements include, but are not limited to, the following:

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VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
General location. Traffic/noise pollution
Best use/zoning. Topography.

Land size. Improvements/demolition
Land configuration and utility. Plans or entitlements.

Corner location/access. Easements/site utility.

Off-site improvements.

As stated, the marketability of each sale property was considered. Marketability is the practical aspect of selling a property in view of all the elements constituting value, and certain economic and financing conditions prevailing as of the date of sale.

It should be noted that the above elements of comparability were not assigned equal weight in making the analysis of each property. The general location, best use/zoning, land size, land configuration, traffic/noise pollution, plans or entitlements, and off-site improvements were considered the most important factors when analyzing the various sale properties, in the subject case.

The reader is referred to the Land Sales Comparison Grid on the following page.

As stated, quantitative adjustments have been applied to the various sale properties for market conditions (date of sale). The elements of comparability have been considered on a qualitative basis due to the lack of direct market evidence regarding quantitative adjustments in the subject market. Note that the various elements of comparability were not assigned similar weight; the overall comparability of each sale property is set forth on the bottom of the Comparison Grid.

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MARKET ANALYSIS COMPARISON GRID
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3-8
Data 1 2 3 4 5 6 7 8
Subject Site
Purchase price: -- -- - -- $310,000 $1,205,000 $305,000 $375,000 $470,000 $600,000 $3,100,000 $2,100,000 Rate per sq. ft.: -- -- - -- $48.67 $53.56 $70.02 $54.47 $68.01 $41.81 $44.97 $57.90 Transactional adjustments
Property rights conveyed: fee simple 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Financing: - - - - - - - 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Conditions of sale: -- - - - - - 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Expenditures after sale: -- - - - - - 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Date of sale: 6-22 1-20 5-20 12-20 2-21 9-21 9-21 5-22 asking Market conditions: -- -- - -- 29.5% 27.5% 24.0% 22.0% 13.5% 13.5% 1.5% 0.0% Adjusted unit rates: -- -- - -- $63.03 $68.29 $86.82 $66.45 $77.19 $47.45 $45.64 $57.90 Comparability adjustments Subject Site
Location: average similar superior similar inferior similar inferior similar similar Land size: 7,200 sf similar inferior superior similar similar similar inferior inferior Zoning/best use: R-1-7 (IW) similar superior superior similar similar superior superior similar Topography: effect. level similar similar similar similar similar similar similar similar Land configuration: average inferior similar similar similar similar similar inferior similar Corner/access: average similar similar similar superior similar inferior inferior similar Traffic/noise pollution: average inferior similar similar inferior similar similar similar similar Buildings/on-site improvements: vacant similar similar similar similar similar similar similar similar Plans/entitlements: none superior similar similar similar superior similar similar similar Easements/site utility: average similar similar similar similar similar similar similar similar Utilities available: average similar similar similar similar similar similar similar similar Street/off-site improvements: below average superior superior superior superior superior similar superior superior Data 1 2 3 4 5 6 7 8
slightly slightly
Overall comparability: inferior superior superior superior superior inferior inferior inferior

VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
Data 2, located in Westminster, is deemed superior to the subject property regarding general location, while Data 4 and 6, located in Stanton and Santa Ana, respectively, are deemed inferior regarding location. All other sales are considered generally similar with respect to location.

Note that larger properties, whether improved or vacant land, sometimes sell at overall lower rates per square foot in accordance with general economic principals. As such, Data 2, 7 and 8, being larger land parcels, are deemed inferior regarding land size, when considered on a rate per square foot basis.

Conversely, Data 3, representing a rela tively small lot, is deemed superior regarding land size, on a rate per square foot basis.

The subject property is zoned R-1-7, however the General Plan Land Use is IW, having a development density of 42 units per acre, or one unit per 1,037 square feet of land area. Given the relatively small lot size, and considering the existing covenant, a high density residential site is not considered feasible, though the subject site could support more than one unit, especially considering an Accessory Dwelling Unit (ADU) allowance. Note, that the other sale properties zoned for single family residential use would likewise support a second ADU.

Data 2, 3, 6 and 7 are considered having superior zoning, allowing slightly higher densities, and are deemed superior accordingly. The remaining sale properties are considered generally similar with respect to zoning.

Data 1 and 7 have irregular land configurations and are deemed inferior accordingly.

Data 1 backs to a freeway and Data 4 is near an active railroad; said sales are considered inferior with respect to traffic/noise pollution.

Data 1 and 5 sold with plans/entitlements and are deemed superior accordingly.

As noted, the subject site fronts on a pu blic street, however, only a portion of Thackery Drive is improved; the east portion of the street is unimproved (gravel). Data 6 is located on a relatively narrow alley, and is similar regarding overall off-site improvements. The remaining sale properties are located on fully paved streets and are deemed superior with respect to off-site improvements.

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VALUATION ANALYSIS (Continued)
SALES COMPARISON APPROACH: (Continued)
No other adjustments were warranted in the subject case.

The reader is referred to the following array of the land sale properties utilized herein. The sales are placed in order within the array by rating with respect to overall comparability, i.e. superior, similar, inferior. Based on the foregoing, the market conditions adjusted unit rates applicable to the land sale properties range from $45.64 to $86.82 per square foot of land area, as follows:

Adjusted
Overall Rate Per
Data Comparability SF Land
3 superior $86.82
5 superior $77.19
2 superior $68.29
4 slightly superior $66.45
Subject - - - $64.00
1 slightly inferior $63.03
6 inferior $47.45
7 inferior $45.64
All of the sale properties were considered helpful in the analysis. While Data 4, at $65.64 per square foot is deemed sl ightly superior, Data 1 at $62.30 is deemed slightly inferior. As stated, Data 8, at an indicated rate of $57.90 per square foot, is deemed inferior to the subject site, however, Data 8 represents a current listing and is included herein for informational purposes only.

Based on the foregoing, the unit rate considered applicable to the subject property is estimated at $64.00 per square foot of land area, as follows:

Land value:
7,200 SF @ $64.00 = $460,800.

Adjusted: $460,000.

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VALUATION ANALYSIS (Continued)
FINAL ESTIMATE OF VALUE:

Based on the foregoing valuation, the fee simple market value of the subject property, as of July 14, 2022, is estimated as follows:

FOUR HUNDRED SIXTY THOUSAND DOLLARS
$460,000
MARKETING EXPOSURE:

The marketing exposure of a particular property is a direct function of supply and demand within a particular market segment. Generally, a higher demand results in a shorter marketing period. During the course of market research for the subject valuations, interviews were conducted with parties involved in the transactions employed in the Sales Comparison Approach. Based on said interviews, as well interviews with real estate brokers specializing in the subject market area, the marketing exposure estimated for the subject property, assuming an aggressive and comprehe nsive marketing program, is approxi- mately 3 to 9 months.

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MARKET DATA

MARKET DATA SUMMARY
RESIDENTIAL LAND SALE PROPERTIES:

Sale Date
Data Address Zoning Land Size Corner/Alley Sale Price $ Per SF 1 1-20 R-1-7 6,369 sf no/no $310,000 $48.67
11831 Trask Ave., Garden Grove
2 5-20 R2 22,500 sf no/no $1,205,000 $53.56
7072 Spruce St., Westminster
3 12-20 GGMU-2 4,356 sf no/no $305,000 $70.02
13052 Nelson St., Garden Grove
4 2-21 RL 6,885 sf no/yes $375,000 $54.47
10761 Rose St., Stanton
5 9-21 RS-6 6,911 sf no/no $470,000 $68.01
5891 Stanton Ave., Buena Park
6 9 - 2 1 R 2 1 4,350 sf no/no $600,000 $41.81
4622 Watkins Way, Santa Ana
7 5-22 R2/R-1-7 68,936 sf no/no $3,100,000 $44.97
12701 Buaro St. and 12722 Dungan Ln., Garden Grove
8 a s k i ng R-1-7 36,270 sf no/no $2,100,000 $57.90
8671 Orangewood Ave., Garden Grove
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MARKET DATA #1
11831 Trask Avenue (formerly 11831 Sorrell Drive), Garden Grove GRANTOR: George & Beverly Paras APN: 100-352-33 (former APNs 28 & 31)
GRANTEE: Property Group, LLC LAND SIZE: 6,369 square feet SALE DATE: January 24, 2020 ZONING: R1-7
DOC. NO.: 32204 TOPOGRAPHY: Effectively level
SALE PRICE: $310,000 PRESENT USE: Vacant land
TERMS: All cash UNIT RATE: $48.67 per SF
CONFIRMED BY: George Paras, seller
COMMENT: The property is a vacant land parcel that backs to the Garden Grove (22) Freeway. The sale included building plans for a single family residence containing 3,266 square feet. The property previously sold in June 2018 for $349,000, which equates to $54.80 per square foot. The seller, George Paras, indicated that he purchased the site with the intent of developing the site, but then decided to sell the property, at a loss. It appears that Mr. Paras paid an above-market price to acquire the property (in 2018).

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APN: 100-352-33

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MARKET DATA #2
7072 Spruce Street, Westminster
GRANTOR: T. T. & T. Nomiyama APN: 096-102-03
Living Trust
GRANTEE: Tony Nguyen LAND SIZE: 22,500 square feet

0.517 acres
SALE DATE: May 29, 2020 ZONING: R2
DOC. NO.: 244862 TOPOGRAPHY: Effectively level
SALE PRICE: $1,205,000 PRESENT USE: Vacant land
TERMS: All cash UNIT RATE: $53.56 per SF land
CONFIRMED BY: Oanh Nguyen, subsequent listing agent
COMMENT: The property is improved with a single family residence containing 1,494 square feet, built in 1958, in poor condition; the property sold based on the value of the underlying land (site could support development of six multi-family units). The property was purchased by an investor who renovated the existing dwelling and leased it to a tenant, with plans to develop the site in the next year or two. The owner subsequently relisted the property for $1,818,000 ($80.80/sf), but received no offers on the listing.

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APN: 096-102-03

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MARKET DATA #3
13052 Nelson Street, Garden Grove
GRANTOR: Justin Hoang and APN: 099-081-28
Jackie Hoang
GRANTEE: Buchanan Family Trust LAND SIZE: 4,356 square feet SALE DATE: December 17, 2020 ZONING: GGMU-2 (Garden
Grove Mixed Use-2)
DOC. NO.: 747263 TOPOGRAPHY: Effectively level
SALE PRICE: $305,000 PRESENT USE: Vacant land
TERMS: $251,000 conventional UNIT RATE: $70.02 per SF land CONFIRMED BY: Tim Smith, broker
COMMENT: The property is a vacant land parcel and was marketed as a mixed commercial and residential site, allowing the development of two residential units. The buyer’s plans are unknown
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APN: 099-081-28

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MARKET DATA #4
10761 Rose Street, Stanton
GRANTOR: Crisostomo Z. Rodriguez APN: 079-351-02
GRANTEE: Long Nguyen and LAND SIZE: 6,885 square feet
Linh Truong
SALE DATE: February 4, 2021 ZONING: RL
DOC. NO.: 80323 TOPOGRAPHY: Effectively level
SALE PRICE: $375,000 PRESENT USE: Construction phase
TERMS: All cash UNIT RATE: $54.47 per SF land
CONFIRMED BY: Long Van Nguyen, buyer
COMMENT: The property was improved with a “red-tagged” single family residence in dilapidated condition, which the buyer demolished, in order to make way for a new single family residence. Note that the property is located 100± feet away from an active railroad corridor.

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APN: 079-351-02

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MARKET DATA #5
5891 Stanton Avenue, Buena Park
GRANTOR: Hung Hoang APN: 066-184-26, 27
GRANTEE: Hussein Abbood LAND SIZE: 6,911 square feet
SALE DATE: September 7, 2021 ZONING: RS-6
DOC. NO.: 557946 TOPOGRAPHY: Effectively level
SALE PRICE: $470,000 PRESENT USE: Vacant land
TERMS: All cash UNIT RATE: $68.01 per SF land
CONFIRMED BY: Tien Nguyen, listing agent
COMMENT: The property is a vacant land parcel. The property includes approved building plans to develop a single family residence containing 2,770 square feet, plus a three-car garage. The property previously sold for $308,000, in January 2021, as unentitled land.

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APN: 066-184-26, 27

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MARKET DATA #6
4622 Watkins Way, Santa Ana
GRANTOR: Michelle Mai APN: 108-131-35
GRANTEE: Hai T. Hoang LAND SIZE: 14,350 square feet
SALE DATE: September 9, 2021 ZONING: R2
DOC. NO.: 564983 TOPOGRAPHY: Effectively level
SALE PRICE: $600,000 PRESENT USE: Vacant SFR
TERMS: All cash UNIT RATE: $41.81 per SF land
CONFIRMED BY: Richard Mohr, listing agent
COMMENT: The property is improved with an older single family residence in poor- dilapidated condition, which is current vacated. The property sold based on the underlying land value. Access is via Watkins Way, which is an effective alley.

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APN: 108-131-35

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MARKET DATA #7
12701 Buaro St. and 12722 Dungan Lane, Garden Grove
GRANTOR: James and Elaine Eads APN: 231-383-36,48
GRANTEE: N.A. LAND SIZE: 68,936 square feet
SALE DATE: May 27, 2022 ZONING: R2/R-1-7
DOC. NO.: N.A. TOPOGRAPHY: Level
SALE PRICE: $$3,100,000 PRESENT USE: Vacant land
TERMS: All cash to seller UNIT RATE: $44.97 per SF land CONFIRMED BY: Woody Harper, listing agent
COMMENT: APN 231-383-36 is improved with a single family residence in fair condition, is zoned R-1-7, and contains 7,560 square feet of land area. APN 231-383-48 is improved with an older single family residence, is zoned R2, has a long and narrow access drive which is also utilized as ingress/egress easement serving adjacent parcels, and contains 61,376 square feet. The site was acquired by a developer. The sale date was confirmed with the broker, however recorded documents are not available through market data resources as of the date of the report.

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APN: 231-383-36,48

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MARKET DATA #8
8671 Orangewood Ave., Garden Grove
GRANTOR: Lac Doc Duong APN: 132-242-42
GRANTEE: N.A. LAND SIZE: 36,270 square feet
SALE DATE: N.A. ZONING: R-1-7
DOC. NO.: N.A. TOPOGRAPHY: Level
ASKING PRICE: $2,100,000 PRESENT USE: Vacant land
TERMS: N.A. UNIT RATE: $57.90 per SF land
CONFIRMED BY: My Dam, listing agent
COMMENT: The property is unentitled vacant land and is currently listed for sale. The listing agent indicated that an offer had been received for around $2,000,000, however, the seller is seeking the full listing price of $2,100,000, and did not accept the offer.

The seller acquired the property in April 2018 for $1,050,000.

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APN: 132-242-42

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DeLorme Street Atlas USA® 2015

MARKET DATA MAP
TN Scale 1 : 75,000Data use subject to license.
0 ½ 1 1½ 2 mi
km© DeLorme. DeLorme Street Atlas USA® 2015. MN (11.4°E) 0 1 2 3

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ADDENDA

See Photo No. 1 on first page of Subject Property Description Section.

PHOTO NO. 2: View looking north along Thackery Drive.

PHOTO NO. 3: View looking east along Twintree Avenue.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

R. P. LAURAIN
& ASSOCIATES
PHOTO NO. 4: View looking west along Twintree Avenue.

APPRAISERS - ANALYST S

S

ORANGE COUNTY

REGIONAL DATA
R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST

REGIONAL DATA
The value of real property is influenced by the attributes and utility of land and physical improvements, as well as inter-relationships of markets, demographic forces, transportation, government, environmental influences and other factors. Said factors influence the locat ion and density of population distribu- tion and activities in certain areas and regions over others.

ORANGE COUNTY REGION:

The County of Orange is located generally along the California coastline, between Los Angeles County and San Dieg o County. It occupies 798 square miles and has 42 miles of oceanfront. There are 33 cities and 13 unincorpo- rated communities in the County. The climate is mild throughout the year with an average rainfall of 15 inches. The coas tal region is subject to early morning fog, and as a result, sunshine is recorded about 60% of the year while farther inland this percentage increases to 80%. Mean temperatures range from 48 o
to 76
o
Fahrenheit.

The Orange County population has grown from 61,375 in 1920 to 216,224 in 1950, 487,701 in 1960, 1,420,386 in 1970, 1,932,700 in 1980, 2,410,556 in 1990, and 2,846,289 in 2000. According to the 2010 census, Orange County's population totaled 3,010,232. This was an increase of 163,943 or 4.76% over the County's 2000 census figure. The County's growth rate has averaged approximately 2% annually during the entire period.

The City of Santa Ana serves as the county seat and is the largest city in Orange County with a population of 334,227. The City of Anaheim rates as the second largest city with a population of 336,265. The race/ethnic make-up of Orange County is 60.8% white; 33.7% Hispanic; 18.2% Asian and Pacific Island;

1.7% black; 0.6% native American; 15.0% remainder.

Transportation in Orange County is provided for by a variety of means. John Wayne (Orange County) Airport, located in Newport Beach, is the county's only major airport; Long Beach Airport and Los Angeles International Airport, in Los Angeles County, are also frequent ly used by Orange County residents.

Commercial seaport terminals are available in San Diego County, and Long Beach/Los Angeles harbors. Railroad services are provided by Atchison, Topeka and Santa Fe, National Amtrak, and Southern Pacific. There are approximately 600 trucking lines which operate in Southern California and that serve Orange County. Orange County is intersected by eight freeways and R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYSTS

REGIONAL DATA (Continued)
ORANGE COUNTY REGION: (Continued)
numerous state highways. Bus transporta tion is provided for by Greyhound Lines, Southern California Rapid Transit District, and the Orange County Transit District.

Per the State of California Employment Development Department, please note the following:

The unemployment rate in the Orange County was approximately 2.6% in May of 2018, unchanged from the revised 2.6% in April of 2018, and below the year- ago estimate of 3.2 percent. This compares with an unadjusted unemployment rate of 3.7% for California and 3.6% for the nation during the same period.

Refer to the January 2018 metrics pertaining to the breakdown of employment, by industry, on the following page.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYSTS

REGIONAL DATA (Continued)
ORANGE COUNTY REGION: (Continued)
Orange County Industry Employment Comparisons
This indicator breaks down Orange County’s employment by industry for the current month, comparing changes in employment levels since the previous month and the previous year.

Source: California Employment Development Department
R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYSTS

REGIONAL DATA (Continued)
ORANGE COUNTY REGION: (Continued)
Per Zillow, in May 2018, the county's median sales price of existing homes (resale activity) was $700,000. Condominium, duplex or townhouse style housing generally range in value from $450,000 to $550,000. Sales of condo- minium and townhouse development proj ects were extremely strong during the 1980s and early 1990s, especially in the first-time buyer market. There was a substantial decline in value of all types of properties within the greater Southern California region between 1991 and 1996. Overall housing prices declined between 20% and 40% betw een 1991 and 1997, depending primarily on location and value range.

Beginning in 1998, there was evidence of increased real estate market activity.

There was a general upward value trend a ffecting residential properties within the immediate and general subject market area, from 2003 through the mid portion of 2006, after which property valu es generally stabilized. Beginning in 2007, residential property values began to decrease significantly. The decrease in residential sales activity and pricing continued through the latter portion of 2008, due primarily to the subprime credit and housing crisis, multi- billion dollar write-downs of mortgage-backed securities by regional and national banks, and a lack of available fi nancing. In the mid to latter portion of 2009 residential values abruptly stabilized, due primarily to fiscal stimulus programs and first time home buyer tax credits. In 2010, certain markets began to experience an increase in sales, as well as a nominal increase in property values (5%-10%). Any brief increases in residential property values in the mid portion of 2010 subsequently su bsided and were considered to be attributed to the first time home buyers tax credit. In 2013 residential property values resumed and upward trend with a slight increase in pricing and sales activity. The upward trend generally continued through 2017 and appears to have stabilized in recent months.

Orange County has experienced high levels of development within the past 25 years. Most of the acreage and undeveloped land parcels are located within the eastern and northeastern portion of the County. There are 143,915 acres dedicated for residential use, 25,115 acres dedicated for commercial use, and 112,112 acres of open space. Development intensity has increased near the coastline in southern Orange County, and parts of northern San Diego County. Development, however, between 1991 and 1997, and again between 2007 and 2010, was limited due to the lack of demand and construction financing; recent development is proceeding cautiously. The megalopolis predicted 35 years ago, be tween Los Angeles and San Diego, is in the developing stages.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYSTS

S

QUALIFICATIONS
OF

APPRAISER
R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST

BACKGROUND AND QUALIFICATIONS
John P. Laurain, MAI, ASA
Certified General Real Estate Appraiser
California Certification No. AG 025754
PRESIDENT:

R. P. Laurain & Associates, Inc.
3353 Linden Avenue, Suite 200
Long Beach, California 90807
Office: (562) 426-0477 - Fax: (562) 988-2927
[email protected]
PROFESSIONAL ORGANIZATION AFFILIATIONS:

The Appraisal Institute
MAI Designated Member
American Society of Appraisers
Senior member; hold professional endorsement and
designation “ASA” in urban real estate.

American Arbitration Association
Associate arbitrator in title insurance matter.

Certified General Real Estate Appraiser by the
Office of Real Estate Appraisers, State of California.

Certification No. AG 025754.

APPRAISAL BACKGROUND:

Real estate appraisal and valuation consultation services conducted for public purposes include eminent domain studies, street widening and grade separation (bridge) projects, public school and university expansion projects, relocation studies, housing and public loan programs, Navy housing, senior housing, public bond measures, leasing of publicly-owned properties, Quimby Act park fee studies, Fair Political Practices Commission analyses, budgetary studies, and transfers (exchanges) of properties between public agencies. Private real estate appraisal services have been conducted for lending institutions, insurance companies, attorneys, estates for tax and donation purposes, private subdivision development studies, and other private uses.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

BACKGROUND AND QUALIFICATIONS (Continued)
APPRAISAL BACKGROUND: (Continued)
Residential Property:

Residential properties appraised incl ude single family, condominiums, own- your-own, townhouse, low and medium density multiple family, 100+ unit apartment complexes, waterfront properties, boat docks, mobile home parks, vacant single-family lot and acreage parcels, and low to high density vacant land parcels.

Commercial and Industrial Property:

Commercial property appraisal studies have included single and multi-tenant retail, strip centers, shopping centers, low-rise and high-rise office buildings, medical offices, restaurants and fast -food developments, nightclubs, con- venience stores, theaters, automobile repair and service facilities, service stations, truck fueling and washing stations, car wash facilities, automobile sales, mixed-use properties including single resident occupancy (SRO) developments, as well as hotel and motel properties, and vacant land.

Industrial property appraisals have included warehouses, light and heavy manufacturing, distribution and transit facilities, food processing, cold storage, lumber yards, recycling centers, open storage, vacant land, remnant and landlocked parcels, properties encumbered with oil and water injection wells, sites with soil contamination and land fill properties.

Special Purpose and Special Use Properties:

Appraisal services and valuation studies of public, quasi-public, special use, and nonprofit facilities include, among others, seaport properties, airport properties (FBO, hangars, warehouse, office, land, etc.), submerged land, river rights-of- way, reservoirs, agricultural land, conservation/mitigation and wetland properties, utility and railroad rights-o f-way, flood control channels, city hall buildings and civic center complexes, courthouses, libraries, fire and police stations, post offices, public parking structures, parks, public and private schools, adult learning centers, athletic facilities and gyms, bowling alleys, tennis centers, youth homes, after school facilities, daycare facilities, hospitals, skilled nursing facilities, churches, meeting halls and veteran facilities.

Valuation Methodologies:

In addition to the three conventional valuation methods (Sales Comparison Approach, Cost-Summation Approach, and Income Capitalization Approach), valuation methodologies have included discounted cash flow analyses, leased fee, and leasehold analyses, absorption discounts, deferred maintenance, cost- to-cure, bonus value, excess rent, acro ss-the-fence, value-in-use, fractional interests, hypothetical valuations, and reuse studies.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

BACKGROUND AND QUALIFICATIONS (Continued)
APPRAISAL BACKGROUND: (Continued)
Property interests appraised for eminen t domain purposes include full and partial takings, as well as severance damage and project benefit studies.

Valuation of various types of easements have included permanent surface, street, temporary construction, slope, utility, pipeline and subsurface, aerial, bridge structure, signal light, exclusive and nonexclusive surface rights, multi- layered, battered pilings, tie-back, railr oad, drainage ditch, and flood control easements.

Clients:

Real estate research, analysis and appraisal services performed on projects for various public agencies and private corporations while associated with R. P. Laurain & Associates, Inc., since 1986. Following is a partial list of public agencies for which appraisal services have been provided:

Cities:

City of Alhambra City of Downey City of Norwalk
City of Anaheim City of El Monte City of Oceanside
City of Artesia City of El Segundo City of Ontario
City of Arvin City of Garden Grove City of Palmdale
City of Azusa City of Glendale City of Palm Springs
City of Baldwin Park City of Hawaiian Gardens City of Paramount City of Bell City of Huntington Beach City of Pasadena
City of Bell Gardens City of Huntington Park City of Perris City of Bellflower City of Industry City of Redondo Beach City of Beverly Hills City of Inglewood City of Riverside City of Brea City of Irwindale City of Rosemead
City of Buena Park City of Laguna Beach City of San Juan Capistrano City of Burbank City of Laguna Woods City of San Marino City of Carson City of Lakewood City of Santa Ana
City of Cathedral City City of La Mirada City of Santa Fe Springs City of Chino City of Lawndale City of Seal Beach
City of Chino Hills City of Long Beach City of Signal Hill City of Compton City of Los Alamitos City of South El Monte City of Corona City of Los Angeles City of South Gate
City of Covina City of Monrovia City of Tustin
City of Cudahy City of Montebello City of Upland
City of Cypress City of Monterey Park City of West Hollywood City of Diamond Bar City of Newport Beach City of Whittier R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

BACKGROUND AND QUALIFICATIONS (Continued)
APPRAISAL BACKGROUND: (Continued)
Other Public and Quasi-Public Agencies:

Alameda Corridor Engineering Team
Alameda Corridor Transportation Authority
California High Speed Rail Authority
Caltrans
Castaic Lake Water Agency
Hawthorne School District
Kern County
Long Beach Community College District
Long Beach Airport
Long Beach Unified School District
Long Beach Water Department
Los Angeles County Department of Beaches and Harbors
Los Angeles County Chief Executive Office
Los Angeles County Internal Services Department
Los Angeles County Metropolitan Transportation Authority Los Angeles County Public Works
Los Angeles Unified School District
Los Angeles World Airports
Lynwood Unified School District
Orange County Transportation Authority
Orange County Public Works
Orange County Counsel
Port of Hueneme
Port of Long Beach
Port of Los Angeles
Riverside County Transportation Commission
San Bernardino County
Southern California Edison
State of California, Santa Monica Mountains Conservancy U. S. Department of the Navy
U. S. Postal Service
Other:

Various attorneys, corporations, lending institutions, and private individuals.

Gold Coast Appraisals, Inc.:

Associate appraiser, as independent contractor, during portions of 1991 and 1992, specializing in appraisal of single family residential through four-unit residential properties.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

BACKGROUND AND QUALIFICATIONS (Continued)
EXPERT WITNESS:

Qualified as an expert witness in the Los Angeles County Superior Court, Central District.

Qualified as an expert witness Orange County Superior Court.

Qualified as an expert witness in an arbitration matter before Judicial Arbitration and Mediation Services in the Counties of Los Angeles and Orange.

Provided testimony as an expert witness in conjunction with eminent domain matters before the San Bernardino and Riverside County Superior Courts.

ACADEMIC BACKGROUND:

Cypress Community College - Basic curriculum.

Long Beach Community College - Basic curriculum.

Real estate and related courses taken through and at various Community Colleges, Universities, the Appraisal Institute, and business schools, in accordance with the Continuing Educ ation Requirements of the State of California, as follows:

Fundamentals of Real Estate Appraisal
Appraisal Principles and Techniques
California Real Estate Principles
Real Estate Appraisal: Residential
California Real Estate Economics
Basic Income Capitalization Approach
Advanced Income Capitalization Approach
Advanced Market Analysis and Highest & Best Use
Advanced Applications
Advanced Concepts and Case Studies
Quantitative Analysis
Eminent Domain and Condemnation
Complex Properties
Real Estate Escrow
California Real Estate Law
Uniform Standards of Professional Appraisal Practice
Federal and State Laws and Regulations
Uniform Appraisal Standards for Federal Land Acquisitions (Yellow Book) Valuation of Conservation Easements
R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

See Proof on Next Page
The Orange County Register
1920 Main Street, Suite 209
Irvine, California 92614
(714) 796-7000
0011557129
City of Garden Grove
11222 Acacia , PO Box 3070
Garden Grove, California 92840

PROOF OF PUBLICATION
(2015.5 C.C.P.)

STATE OF CALIFORNIA
County of Orange
I am a citizen of the United States and a resident of the County aforesaid; I am over the age of eighteen years, and not party to or interested in the above-entitled matter. I am the principal clerk of the printer of The Orange County Register, a
newspaper of general circulation, printed and published in the City of Irvine*, County of Orange, and which newspaper has been adjudged a newspaper of general circulation by the Superior Court of County of Orange, State of California, under the date of November 19, 1905, Case No.A-21046. The notice, of which the annexed is a printed copy (set in type not smaller than nonpareil), has been published in each regular and entire issue of said newspaper and not in any supplement thereof on the following dates, to wit:
08/30/2022, 09/06/2022
I certify (or declare) under the penalty of perjury that the foregoing is true and correct.

Dated at Irvine, California
On this 6th day of September, 2022.
______________________________
Signature
Joint PH_HA_Property Sale -Thackery (5194707) - Page 1 of 2Page 228 of 640 Joint PH_HA_Property Sale -Thackery (5194707) - Page 2 of 2Page 229 of 640

Agenda Item - 3.b.

City of Garden Grove

INTER-DEPARTMEN T MEMORANDU M
To: Scott C. Stiles From: Lisa L. Kim
Dept.:

Subject:

City Manager/Directo r
Approval of the sale and
transfer of real property
l
ocated 12311 Thackery
D
rive, Garden Grove.
(Amount: $460,000)
(J oin t Action Item with the
Successor Agency.)
Dept.:

Date:

Community and Economic
Development
9/13/2022

OBJECTIV E
For the City Council and Successor Agency to consider and take action to approve the sale and transfer of certain real property located 12311 Thackery Drive. If approved, the Successor Agency will dispose of the Property at its fair market value to Developer as described in the proposed Dispositio n and Development Agreement between the City and Newage Garden Grove II LLC. The sale of the Property will facilitate the Successor Agency in winding down the affairs of the Former Agency and continue implementation of the approved Long Range Property Management Plan (LRPMP) .

BACKGROUN D
Followin g dissolutio n of all Californi a redevelopment agencies on February 1, 2012 and in furtherance of winding down the affairs of the former Garden Grove Agency for Community Development (Former Agency), the Successor Agency has undertaken steps to dispose of the real property assets of the Former Agency through implementation of theLRPM P approved by the State of California , Department of Finance (DOF) . The LRPM P governs the procedural and legal process for the Successor Agency to dispose of the Former Agency’s real property assets all subject to Parts 1.8 and 1.85 of Divisio n 24 of the Health and Safety Code (Dissolutio n Law). This agenda report focuses on the proposed sale and dispositio n of real property located at 12311 Thackery Drive, Assessor Parcel No. 231-471-23 and listed as Property Number 55 in the LRPM P (herein, Property). The Property is vacant and unimproved; the shape and size of the parcel is rectangular and approximately 7200 square feet (.165 ac), and is located west of Harbor Boulevard and north of Twintree Avenue, as depicted on Exhibit B. On July 12, 2022, the Successor Agency directed staff to commence the dispositio n process for sale of the Property at fair market value as determined by an independent appraiser. On July 19, 2022, the

Oversight Board directed staff to commence the dispositio n process at the appraised value. An independent appraisal was prepared by a professional appraiser, which concluded the Fair Market Value of the Property is $460,000.00. The appraisal report is attached as Exhibit C.

DISCUSSIO N
Pursuant to statutory requirements, staff caused publicatio n of a Notice of Joint Public Hearing about the proposed sale of the Property. At this September 13, 2022, joint meeting, the Mayor and Successor Agency Chair will conduct the public hearing and receive testimony from the public whether in favor, opposed or neutral to the proposed sale and disposition . Staff’s recommended action is to approve the sale and dispositio n of the Property in implementation of the proposed Dispositio n and Development Agreement between the City and Newage Garden Grove II LLC (Developer) in connection with development of a new resort hotel project. Staff has returned the action item to the Successor Agency for consideration and action on a Resolution (Exhibi t A) to approve the sale of the Property to the Developer.

Followin g consideration by the Successor Agency, the sale and dispositio n will require review and approval by the Oversight Board and then the State Department of Finance.

FINANCIA L IMPAC T
There is no cost to sell the Property to Developer. If the sale is approved and proceeds, the Developer will pay the purchase price of $460,000 to acquire the Property, which will result in the appropriation of the sale proceeds to the County for distribution as property tax to the taxing entities pursuant to the Dissolutio n Law and the LRPMP.

RECOMMENDATIO N
It is recommended that City Council and Successor Agency:

Conduct a public hearing jointly with the Successor Agency; Adopt the attached Resolution approving the sale and dispositio n of the Property by the Successor Agency to the Developer; and
The Successor Agency authorize the Director and Secretary to execute and attest the Resolution, Grant Deed, and related implementing documents necessary to effectuate the sale of the Property, includin g making minor modification s on behalf of the Successor Agency.

By: Paul Guerrero, Sr. Real Property Agent
ATTACHMENTS:

Description Upload Date Type File Name

Exhibit A - Resolution 9/1/2022 Resolution 9-13-22_Sale_of_Thackery_property.pd f Exhibit B - Parcel Map 8/30/2022 Backup Material Exhibit_B_-_Parcel_Map.pdf Exhibit C - Appraisal 8/30/2022 Backup Material Exhibit_C_-_Appraisal.pdf Exhibit D - Grant
Deed to Developer 8/30/2022 Backup Material Exhibit_D_-_Grant_Deed_to_Developer.do c Exhibit E - Long
Range Property
M
anagement Plan
8/30/2022 Backup Material Exhibit_E_-
_Long_Range_Property_Management_Plan.pdf
Exhibit F - Public
Hearing Notice 9/7/2022 Notice DOC-20220907-11_08_25.pd f

GARDEN GROVE SUCCESSOR AGENCY
RESOLUTION NO.

A RESOLUTION OF THE SUCCESSOR AGENCY TO THE GARDEN GROVE AGENCY FOR

COMMUNITY DEVELOPMENT APPROVING THE SALE AND DISPOSITION OF CERTAIN

REAL PROPERTY IN ACCORDANCE WITH THE LONG RANGE PROPERTY MANAGEMENT

PLAN AND DISSOLUTION LAW
WHEREAS, the Successor Agency to the Garden Grove Agency for Community Development (“Successor Agency”) is a public body corporate and politic, organized and operating under Parts 1.8 and 1.85 of Division 24 of the California Health and Safety Code (“HSC”), and the successor to the former Garden Grove Agency for Community Development (“Former Agency”) that was previousl y a community redevelopment agency organized and existing pursuant to the Community Redevelopment Law, Health and Safety Code Section 33000, et seq. (“CRL”); WHEREAS, Assembly Bill x1 26 to Part 1.8 Section 34160, et seq. and Part 1.85 Section 34170, et seq. to Division 24 of the HSC, which laws as enacted and thereafter amended caused the dissolution of all redevelopment agencies and winding down of the affairs of former redevelopment agencies (together, as amended, “Dissolution Law”); and
WHEREAS, as of February 1, 2012 the Former Agency was dissolved pursuant to the Dissolution Laws and as a separate public entity, corporate and politic the Successor Agency administers the enforceable obligations and otherwise unwinds the Former Agency’s affairs, all subject to the review and approval by the oversight board (“Oversight Board”) and review and approval of actions by the State of California, Department of Finance (“DOF”); and
WHEREAS, HSC Section 34191.5(b) required the Successor Agency to prepare a “long-range property management plan” (“LRPMP”) addressing the future disposition and use of all real property assets of th e Former Agency no later than six months following the issuance to the Successor Agency of a finding of completion by DOF pursuant to HSC Section 34179.7; and
WHEREAS, DOF issued a finding of completion to the Successor Agency on May 15, 2013; and
WHEREAS, the Successor Agency prepared the LRPMP that was approved by the Successor Agency, the Oversight Board, and the DOF; and WHEREAS, in the LRPMP that certain real property listed on line 55 of the matrix attached to the LRPMP is located at 12311 Thackery Drive, and identified as Assessor Parcel No. 231-471-23 (“Property”); and
WHEREAS, the Property is designated in the LRPMP as real property to be sold by the Successor Agency; and
4874-0688-8238v2/022046-0046 Page 233 of 640

Garden Grove Successor Agency
Resolution No.

WHEREAS, the Successor Agency desires to sell and transfer the Property to Newage Garden Grove II LLC (“Developer”) for the purchase price of the appraised value of $460,000; and
WHEREAS, the sale and disposition of the Property by the Successor Agency to the Developer complies with the Dissolution Law, LRPMP, CRL, and other applicable provisions of the law; and

NOW, THEREFORE, BE IT RESOLVED THAT THE SUCCESSOR AGENCY TO GARDEN GROVE AGENCY FOR COMMUNITY DEVELOPMENT does hereby resolve as follows:

Section 1. The foregoing recitals are true and correct and constitute a substantive part of this Resolution.

Section 2. The Successor Agency approves and authorizes the sale and disposition of the Property in accordance with the approved LRPMP for the purchase price of $460,000.00, which is the appraised fair market value of the Property.

Section 3. The Executive Director and Secretary of the Successor Agency are authorized to prepare and sign all documents necessary to implement the sale and disposition of the Property to the Developer, subject to Section 5 below.

Section 4. The Executive Director of the Successor Agency shall sign the passage and adoption of this Resolution and thereupon the same shall take effect and be in force.

Section 5. The Successor Agency Director is hereby directed to transmit this Resolution to the DOF.
4874-0688-8238v2/022046-0046 Page 234 of 640
N

EXHIBIT

PARCEL MAP
12311 Thackery Drive
Garden Grove, CA

APPRAISA L REPOR T

VACAN T LAN D PARCE L
1231 1 THACKER Y DRIV E

GARDE N GROVE , CALIFORNI A
APN : 23 1-47 1-2 3
R . P . L A U R A I N
& A S S O C I A T E S

I N C O R P O R A T E D

APPRAISA L REPOR T

VACANT LAND PARCEL
12311 THACKERY DRIVE

GARDEN GROVE, CALIFORNIA
APN: 231-471-23
Effective Date
of
Market Value Study
June 6, 2022
Prepared for

CITY OF GARDEN GROVE

ECONOMIC AND COMMUNITY DEVELOPMENT DEPARTMENT
11222 Acacia Parkway
Garden Grove, CA 92842
Prepared by
R. P. LAURAIN & ASSOCIATES, INC.
3353 Linden Avenue, Suite 200
Long Beach, California 90807
Date of Report
June 8, 2022
R . P . L A U R A I N
& A S S O C I A T E S

A P P R A I S E RS - A N A L Y S TS

R . P . L A U R A IN
& A S S O C I A T ES
I N C O R P O R A T ED 335 3 LINDE N AVENUE , SUIT E 20 0 LON G BEACH , CALIFORNI A 9080 7
TELEPHON E (562 ) 42 6-047 7
June 8, 2022
FACSIMIL E (562 ) 98 8-292 7
[email protected] M
City of Garden Grove
Economic and Community Development Department
11222 Acacia Parkway
Garden Grove, CA 92842
Attention: Paul Guerrer o
Real Property
Subject: Vacan t Land Parcel
12311 Thackery Drive
Garden Grove, California
APN: 231-471-23
In accordance with your request and authorization, I have personally inspected and appraised th e above-referenced property . The appraisal study included (1) an inspection of the subject property, (2) a review o f market data, and (3) the valuation analysis.

The subject property is located o n the west side of Thackery Drive, beginning 78± feet north of Twintree Avenue, in the City of Garden Grove. The subject property contains 7,200 square feet of land area. The site has an interior location on a secondary street. The subject property is an effectively vacant land parcel. The subject property is located in the R-1-7 (Single-Family Residential) zone district of the City of Garden Grove. The underlying land use designation, however, is International West Mixed Use (IW).

It will be demonstrated in the accompanying report that th e maximally productive use, and therefore, the highest and best use of the subject property is low density residential development. The subject property has been appraised accordingly.

After considering the various factors which influence value, the fee simple market value of the subject property, as of June 6, 2022, is estimated at:

FOUR HUNDRED SIXTY THOUSAND DOLLARS
$460,000.

A P P R A I S E RS - A N A L Y S TS Page 238 of 640

City of Garden Grove
Attention: Paul Guerrer o
June 8, 2022

The foregoing value is subject to the assumptions and limiting condition s set forth in the Preface Section, and the valuation study in the Valuation Analysis Section. No portion of this report shall be amended or deleted.

This appraisal complies with the reporting requirements set forth in the Uniform Standards of Professional Appraisal Practice, under Standard Rule 2-2(a), for an Appraisal Report. This report has been submitted as an electronic (PDF) document; a file copy has been retained.

If you have any questions regarding the report, please contact the undersigned at your convenience.

Very truly yours,
R. P. LAURAIN & ASSOCIATES, INC.

John P. Laurain, MAI, ASA
Certified General Real Estate Appraiser
California Certification No. AG 025754
JPL:jlr
R . P . L A U R A I N
& A S S O C I A T E SPage 239 of 640I N C O R P O R A T ED

TABL E OF CONTENT S
Title Page
Letter of Transmittal
Table of Contents

PREFACE
Location Map
Date of Value
Purpose of the Appraisal
Property Rights Appraised
Intended User of Appraisal
Intended Use of Appraisal
Appraiser’s Certification
Scope of the Appraisal
Assumptions and Limiting Conditions
Terms and Definitions

SUBJECT PROPERTY DESCRIPTION
Apparent Vestee
Property Address
Legal Description
Site Description
Plat Map
Improvements
Ownership History
Assessment Data
Neighborhood Environment

VALUATION
Highest and Best Use Analysis
Valuation Methods
Sales Comparison Approach
Final Estimate of Value
Marketing Exposure
R . P . L A U R A I N
& A S S O C I A T E S

A P P R A I S E RS - A N A L Y S TS

TABL E OF CONTENT S (Continued)

MARKET DATA
Summary of Land Value Indicators
Land Sales Data and Photographs
Market Data Map

ADDENDA
Additional Photographs
Orange County Regional Data
Qualifications of Appraisers
R . P . L A U R A I N
& A S S O C I A T E S

A P P R A I S E RS - A N A L Y S TS

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYSTS

PREFACE

DeLorme Street Atlas USA® 2015

LOCATION MAP
Data use subject to license. TN Scale 1 : 81,250
© DeLorme. DeLorme Street Atlas USA® 2015. MN (11.6°E)
www.delorme.com
0 ½ 1 1½ 2 mi
km0 1 2 3

1" = 1.28 mi Data Zoom 12-0

DAT E OF VALU E
The date of value (effective date) employed in this report, and all opinions and computations expressed herein, are based on June 6, 2022. Said date being generally concurrent with the inspection of the subject property, and th e valuation analysis process.

PURPOS E OF TH E APPRAISA L
The purpose of this appraisal report is to express an estimate of market value, in fee simple, for the subject property, absent an y liens, leases, or other encumbrances, as of the date of value set forth above. The definition of market value is set forth in the following portion of this section following the heading “Terms and Definitions.”
Further, it is the purpose of this appraisal report t o describe the subject property, and to render an opinion of the highest and best use based on (1) the character of potential development o f the property appraised, (2) th e requirements of local governmental authorities affecting the subject property, (3) the reasonable demand in the open market for properties similar to the subject property, and (4) the location of the subject property considered with respect to other existing and competitive districts within the immediate and general subject market area.

Further, it is the purpose of this appraisal report to provide an outline of certain factual an d inferential informatio n which was compiled and analyzed in the process of completing this appraisal study.

PROPERT Y RIGHT S APPRAISE D
The property rights appraised herein are those of the fee simple interest. Fee simple is defined as, "An absolute fee; a fee without limitations to any particular class of heirs, or restrictions, but subject to the limitations of eminent domain, escheat, police power, and taxation. An inheritable estate." R . P . L A U R A I N
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INTENDE D USE R OF APPRAISA L
It is understood that the intended user of the appraisal will be the client, the City of Garden Grove, and specific representatives thereof.

INTENDE D US E OF APPRAISA L
It is understood that this appraisal will be utilized by the City of Garden Grove and specific representatives thereof to establish the market value of the subject property for the possible acquisition (purchase) of the property appraised.

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CERTIFICATIO N
The undersigned does hereby certify that:

I have personally inspected the subject property; I have no present or contemplated future interest in the real estate which is the subject of this appraisal report. Also, I have no personal interest or bias with respect to the subject matter of this appraisal report, or the parties involved in this assignment.

My engagement in this assignment and the amount of compensation are not contingent upon the reporting or development of a predetermined value or direction in value that favor s the cause of the client, the amount of the value opinion, the attainment of a predetermined or stipulated result, or the occurrence of a subsequent event directly related to the intended use of this appraisal. Also, to the best of my knowledge and belief the statements of fact contained in this appraisal report, upon which the analyses, opinions, and conclusions expressed herein are based, are true and correct.

This appraisal report sets forth all o f the assumptions and limiting conditions (imposed by the terms of this assignment or by the undersigned), affecting my personal, impartial, and unbiased professional analyses , opinions, and conclusions.

The reported analyses, opinions, and conclusions were developed, and this report has been prepared, in conformity with the Code of Professional Ethic s and Standards of Professional Appraisal Practice of the Appraisal Institutes, and the Uniform Standards of Professional Appraisal Practice. As of the date of this report I have completed the continuing education program for Designated Member of the Appraisal Institute, the State of California and the American Society of Appraisers; note that duly authorized representatives of said organizations have the right to review this report. The use of this report is subject to the requirements of the Appraisal Institute relating to review by its duly authorized representatives.

No one other than the undersigned prepared the analyses, conclusions, and opinions for this appraisal study. No other person provided significant professional assistance.
the client, the City of Garden Grove.

Renewal Date: April 16, 2023
I have appraised the subject property within the last three years, for ______________________________
John P. Laurain,MAI, ASA
Certified General Real Estate Appraiser
California Certification No. AG 025754
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SCOP E OF TH E APPRAISA L
The appraiser, in connection with the following appraisal study, has:

1. Been retained, and has accepted the assignment, to make an objective analysis and valuation study of the subject property and to report, without bias, the estimate of fair market value.

The subject property is particularly described in the following portion of this report in the section entitled Subject Property Description.

2. Toured the general area by automobile to become acquainted with the extent, condition, and quality of nearby developments, sales and offerings in the area, density and type of
development, topographical features , economic conditions, trends toward change, etc.

3. Walked within the subject property, and some of the nearby neighborhood, to become acquainted with the current partic- ular attributes, or shortcomings, of the subject property.

4. Completed a n inspection of the subject property for the purpose of becoming familiar with certain physical charac - teristics.

5. Made a visual observation concerning public streets, access, drainage, and topography of the subject property.

6. Obtained informatio n regarding publi c utilities and sanitar y sewer available at the subject site.

7. Made, or obtained from other qualified sources, calculations on the area of land contained within the subject property. Has made, or caused to be made, plats and plot plan drawings of the subject property, and has checked such plats and plot plan drawings for accuracy and fair representation.

8. Taken photographs of the subject property , together with photographs of the immediate environs.

9. Made, or caused to be made, a search of public records for factual informatio n regarding recent sale s of the subject property.

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SCOP E OF TH E APPRAISA L (Continued)

10. Reviewed current maps, zoning ordinances, and other material for additional background information pertaining to the subject property, and sale properties.

11. Attempted to visualize the subject property as it would be viewed by a willing and informed buyer, as well as a willing and informed seller.

12. Interviewed various persons, in both public and private life, for factual an d inferential informatio n helpful in this appraisal study.

13. Formed an opinion of the highest and best use applicable to the subject property appraised herein.

14. Made, or caused to be made, a search for recent sales of comparable properties. Has viewed, confirmed the sale price, and obtained certain other information pertaining to each sale property contained in this report.

15. Formed an estimate of market value of the subject property, as of the date of value expressed herein, by application the Sales Comparison Approach; th e Cost and Incom e
Capitalization Approaches were not considered applicabl e in the subject case.

16. Prepared and delivered thisappraisal report in accordance with the Uniform Standards of Professional Appraisal Practice, and in summation of all the activities outlined above.

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ASSUMPTION S AN D LIMITIN G CONDITION S
This appraisal is made with the following understanding a s set forth in items No. 1 through 17, inclusive:

1. That this narrative Appraisal Report is intended to comply with reporting requirements set forth in the Uniform Standards of Professional Appraisal Practice, under Standard Rule 2-2(a), for an Appraisal Report. The information contained in this appraisal report is specific to the needs of the client; n o responsibility is assumed fo r the unauthorized us e of this report.

2. That title to the subject property is assumed to be good and merchantable. Liens and encumbrances, if any, have not been deducted fro m the final estimate of value. The subject property has been appraised as though under responsible ownership. The legal description is assumed accurate.

3. That the appraiser assumes there are no hidden or unapparent conditions of the subject property, subsoil, structures, or other improvements, if any, which would render them more or less valuable, unless otherwise stated. Further, the appraiser assumes no responsibility for such conditions or for the engineering whic h might be required to discover such
conditions. That mechanical an d electrical systems and equipment, if any, except as otherwise may be noted in this report, are assumed to be in good working order. The property appraised is assumed to meet all governmental codes, require- ments, and restrictions, unless otherwise stated.

4. That no soils report of the subject property was provided to the appraiser; therefore information, if any, provided by other qualified source s pertaining to these matters is believed accurate, but no liability is assumed for such matters. Further, information, estimates and opinions furnished by others and contained in this report pertaining to the subject property and market data were obtained from sources considered reliable and ar e believed to be true and correct. No responsibility, however, for the accuracy of such items can be assumed by the appraiser.

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ASSUMPTION S AN D LIMITIN G CONDITION S (Continued)

5. That unless otherwise stated herein, it is assumed there are no encroachments, easements, soil toxics/contaminants, or other physical conditions adversely affecting the value of the subject property.

6. That no report(s) pertaining t o mold, organic toxins, or chemical substances at the subject property was provided to the appraiser; therefore, information, if any, provided by other qualified source s pertaining to these matters is believed accurate, but no liability is assumed by the appraiser for such matters. That unless otherwise stated herein, the subject property has been appraised assuming the absence of mold, organic toxins, the presence of asbestos, or other organic and/or chemical substances which may adversely affect the value of the subject property.

7. That no opinion is expressed regarding matters which are legal in nature or which require specialized investigatio n or knowledge ordinarily not employed by real estate appraisers, even though such matters may be mentioned in the report.

8. That no oil rights have been included in the opinion of value expressed herein . Further, that oil rights , if existing, are assumed to be at least 500 feet below the surface of the land, without the right of surface entry.

9. That the distribution of the total valuation in this report between land and improvements, if any, applies only under the existing program of utilization. The separate valuations for land and improvements must not be used in conjunction with any other appraisal and are invalid if so used.

10. That th e valuation of the property appraised i s based upo n economic and financing conditions prevailing as of the date of value set forth herein. Further, the valuation assumes good, competent, and aggressiv e management o f the subject
property.

11. That the appraiser has conducted a visual inspection of the subject property and the market data properties. Should subsequent information be provided relativ e to changes or differences in (1) the quality of title, (2) physical condition or characteristics of the property, and/or (3) governmental R . P . L A U R A I N
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ASSUMPTION S AN D LIMITIN G CONDITION S (Continued)
restrictions and regulations, which would increase or decrease the value of the subject property, the appraiser reserves the right to amend the final estimate of value.

12. That the appraiser, by reason of this appraisal, is not required to give testimony in court or at any governmental or quasi- governmental hearing with reference to the property
appraised, unless contractual arrangements have been previ- ously made therefor.

13. That drawings, plats, maps, and other exhibits contained inthis report are for illustration purposes only and are not necessarily prepared to standard engineering or architectural scale.

14. That this report is effective only when considered in its entire form, as delivered to the client. No portion of this report will be considered binding if taken out of context.

15. That possession of this report, or a copy thereof, does not carry with it the right of publication, nor shall the contents of this report be copied or conveyed to the public through advertising, public relations, sales, news, or other media, without th e written consent and approval of the appraiser, particularly with regard to the valuation of the property appraised and the identity of the appraiser, or the firm with which he is connected, or any reference to the Appraisal Institute, or the American Society of Appraisers, or designations conferred by said organizations.

16. That the form, format, and phraseology utilized in this report, except the Certification, and Terms and Definitions, shall not be provided to , copied, or used by , any other real estate appraiser, real estate economist, real estate broker, real estate salesperson, property manager, valuation consultant,
investment counselor, or others, without the written consent and approval of Ronald P. Laurain.

17. That this appraisal study is considered completely confidential and will not be disclosed or discussed, in whole or in part, with anyone other than the client, or persons designated by the client.

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TERM S AN D DEFINITION S
Certain technical terms have been used in the following report which are defined, herein, for the benefit of those who may not be fully familiar with said terms.

MARKET VALUE (or Fair Market Value):

Market value is sometimes referred to as Fair Market Value; the latter is a legal term and a common synonym of Market Value. Market value as defined in Title XI of the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) is defined as follows:
"The most probable price which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and selle r each acting prudently and
knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby:

1. Buyer and seller are typically motivated;

2. Both parties are well informed or well advised, and acting in what they consider their own best interests;

3. A reasonable time is allowed for exposure in the open market;

4. Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and

5. The price represents the normal consideration for the property sold unaffected by special o r creative financing, or sales concessions granted by anyone associated with the sale." SALES COMPARISON APPROACH:

One of the three accepted methods of estimating Market Value. This approach consists of the investigation of recent sales of similar properties to determine the price at which said properties sold. The information so gathered is judged and considered by the appraiser as to its comparability to the subject properties.

Recent comparable sales are the basis for the Sales Comparison Approach.

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TERM S AN D DEFINITION S (Continued)
COST-SUMMATION APPROACH:

Another accepted method of estimating Market Value. This approach consists of estimating the new construction cost of the building and yard improvements and making allowances for appropriate amount of depreciation. The depreciated reconstruction value of the improvements is then added t o the Land Valu e estimate gained from the Sales Comparison Approach. The sum of these two figures is the value indicated by the Cost-Summation Approach.

INCOME CAPITALIZATION APPROACH:

The Income Capitalization Approach consists of capitalizing the net income of the property under study. The capitalization method studies the income stream, allows for (1) vacancy and credit loss , (2) fixed expenses , (3) operating expenses, and (4) reserves for replacement, and estimate s the amount o f money which would be paid by a prudent investor to obtain the net income. The capitalization rate is usually commensurate with the risk, and is adjusted for future depreciation or appreciation in value.

DEPRECIATION:

Used in this appraisal to indicate a lessening in value from any one or more of several causes. Depreciation is not based on age alone, but can result from a combination of age, condition or repair, functional utility, neighborhood influ- ences, or any of several outside economic causes. Depreciation applies only to improvements. The amount of depreciation is a matter for the judgment of the appraiser.

HIGHEST AND BEST USE:

Used i n this appraisal to describe that private use which will (1 ) yield th e greatest net return on the investment, (2) be permitted or have the reasonable probability of being permitted under applicable laws and ordinances, and (3) be appropriate and feasibl e under a reasonable planning, zoning, and land use concept.

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R. P. LAURAIN
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APPRAISERS - ANALYSTS

SUBJECT PROPERTY DESCRIPTION

SUBJEC T PROPERT Y
View looking northwesterly at the subject property from intersection of Thackery Drive and Twintree Avenue. See additional photographs in the Addenda Section.

VESTEE: Garden Grove
Development
Agency for Community
ADDRESS: 12311 Thackery Drive
Garden Grove, CA 92840
LEGAL DESCRIPTION: Lot 36, Tract No. 2148, per map recorded in Book 58, Pages 46, 47, and 48 of Miscellaneous
Maps, in the office of the County Recorder,
County of Orange, California.

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SITE DESCR IPT ION
LOCATION: The subject property is located on the west side of Thackery Drive, beginning 78± feet north of
Twintree Avenue, in the City of Garden Grove.

LAND SHAPE: Effectively rectangular land configuration.

DIMENSIONS: 72’ x 100’.

LAND AREA: 7,200 square feet.

TOPOGRAPHY: Effectively level.

DRAINAGE: Appears to be adequate.

FLOOD HAZARD: The subject property is located on FEMA Flood Zone Map 06059C0141J, dated Decembe r 3,
2009; per said map, the subject site is located
in Flood Zone X with a reduced flood risk due
to levee. Flood insurance (for improved
properties) is not federally required by lenders
for loans on properties in Flood Zone X.

SOIL STABILITY: Appears to be adequate based on the subject development, as well as developments in the
immediate area. A soils report, however, was
not provided for review.

SOIL CONTAMINATION: None known or observed, however, an environ- mental assessment report was not provided for
review. The subject site has been appraised as
though free of soil contaminants requiring
remediation.

OIL/MINERAL RIGHTS: The subject appraisal specifically excludes any existing oil o r mineral rights . Further, oil o r
mineral rights, if existing, are assumed to be at
least 500 feet below th e surface of the land,
without the right of surface entry.

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APN: 231-471-23
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SIT E IMPROVEMENT S (Continued)
EARTHQUAKE FAULT: While the greater Southern California area is prone to earthquakes, no seismic or geological
studies were provided for review. No responsi-
bility is assumed fo r the possible impact o f
seismic activity or earthquakes.

FRONTAGE: The subject property has 72 feet of frontage on Thackery Drive.

RIGHT OF WAY WIDTH: Thackery Drive: 50 feet.

STREET SURFACING: Asphalt paving at west portio n of Thackery Drive; gravel surfacing at east portion.

CURB, GUTTER, SIDEWALK: Concrete curbs and gutters on both sides of the street (no sidewalks).

STREETLIGHTS: Ornamental standards; street light fixtures have been removed as of the date of value.

UTILITIES: Water, gas, electric power, telephone service, and sanitar y sewer are available in the
immediate area.

ENCROACHMENTS: None apparent, however, a survey pertaining to the subject property was not provided fo r
review.

EASEMENTS: A Preliminary Title Report prepared by First American Title, dated May 18, 2021, pertaining
to multiple parcels, inclusive of the subject site,
was provided fo r review. The subject site
appears to be impacted by easements for
public road purposes , assumed to be the
existing Thackery Drive, as well as utility pole
line easements. Said easements are deemed
typical o f the subject are a and ar e not
considered to have an impact on the existing
or future highest and best use.

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SITE IMPROVEME NTS (Continued)
EASEMENTS: (Continued) Other easements, if existing, are assumed to be located along th e property boundaries
and/or not interfering with the existing or any
future highest and best use development. It is
assumed there are no “cross-lot” or “blanket”
easements which will preclude a highest and
best use development.

The title report also identifies a Declaration of
Protective Covenants which initially limited the
use of sites in the subject larger Tract No. 2148
to single family residential dwellings . The
covenant was originally established in 1954,
with a 25 year term, renewed automatically
every ten years unless an agreement is signed
by a majority of the lot owners terminating the
covenant. While it is understood tha t the
covenant has not been terminated, certain lots
have been developed with buildings other than
single family residences. It is also understood
that the subject site may be joined with other
adjacent parcels in the same tract for a hotel
development.

ILLEGAL USES: None observed.

PRESENT USE: Effectively vacant land.

ZONING: The subject property is located in the R-1-7
(Single-Family Residential) zone district of the
City of Garden Grove.

The “R-1” zone district “is intended to provide
for the establishment and promotion of single
family detached residences on individual lots
and compatible associated activities.”
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SITE IMPROVEME NTS (Continued)
ZONING: (Continued) The minimum lot size is 7,200 square feet. The maximum building height is 35 feet. The front
yard setback is 20 feet. The rear yard setback
is 20% of the lot depth not to exceed 25 feet.

The interior side yard setbac k is 5 feet,
however, the street side yard setbac k is
10 feet.

Note, however, the land us e designation is
International West Mixed Us e (IW). The IW
land use is “intended to provide for a mix of
uses, including resort, entertainment, retail,
hotel, and som e higher density residential.”
The density for residential development is 42.1
to 60 dwelling units per acre.

HIGHEST AND BEST USE: The reader is referred to the first portion of the Valuation Analysis Section for a discussion
regarding the highest and best us e of the
subject site.

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OWNERSHI P HISTOR Y
COMMENT: Information regarding the date of acquisition
by the Garden Grove Agency for Community
Development was not provided to the
appraiser. Orange County Assessor’s records
indicate the subject property has been vested
with the current owne r for more than five
years. The acquisition of the property by a
public agency, however, may not be reflective
of, or relevant to, the current fair market value.

ASSESSMEN T DAT A
ASSESSOR'S PARCEL NO.: 231-471-2 3
ASSESSED VALUATIONS: Land: $428,349
Improvements: $43,465
TAX RATE AREA: 18055
TAX YEAR: 2021-2022
REAL ESTATE TAXES: $349.88*
* Real estate taxes will be adjusted in the event the subject property is sold to a private party. The adjusted real estate taxes will be 1.02±% of the sale price, or Assessor’s “cash value.” In the absence of a sale, transfer, or capital improvements, the maximum allowable increase in the assessed valuations is 2% pe r year, per Real Estate Tax Initiative of 1978 (Proposition 13).

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NEIGHBORHOO D ENVIRONMEN T
LOCATION: The subject property is located in the northeast portion of the City of Garden Grove. The City of
Garden Grove encompasses 18 square miles
populated by just unde r 175,000 residents
within the corporate limits of the City. The
predominant land use in the City is residential
(51%), followed by commercial and industrial
(14%). Office use make up less than 1% of the
land within the city limits. The remaining land
area is open space, institutional/government,
vacant land parcels , and stree t and railroad
rights of way.

ACCESS: Major north-south thoroughfares in the subject
area include Fairview Street, Harbor Boulevard,
and Euclid Street . Major east-west thorough-
fares include Garden Grove Boulevard,
Chapman Avenue, and Lampson Avenue. The
Santa Ana (5) Freeway is located approx -
imately one and one half miles to the northeast
and the Garden Grove (22) Freeway is located
approximately one mile to the south of the
subject property. Said freeways are part of the
greater freeway network serving the Southern
California region.

LAND USES: The immediate neighborhood is zoned R-1-7
(single family). The majority of secondary
streets in the immediate subject are a are
developed with low density single family
residential developments. As stated, primary
streets are predominantly developed with
commercial uses. The Orange County Outlets is
located one and one quarter miles to the east
of the subject property . Disneyland an d
Downtown Disney are located approximately
two miles northerly. A hotel development is
located within one block north of the subject
property.

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NEIGHBORHOO D ENVIRONMEN T (Continued)
BUILT-UP: The subject neighborhood i s effectively 95%
built-up, including publicparks, public facilities,
parking lots, and school sites.

PRICE RANGE: Single family residential propertie s generally range from $800,000 to exceeding $1,200,000
exclusive of condominium developments.

The indicated price range is dependent upo n
the various elements of comparability which
include location, building size, building
condition, design, number of bedrooms and
baths, and the overall land size.

PRICE TREND: There was an upward valu e trend affecting residential properties in the general subjec t
market area , from the first portio n of 2000
through the mid portion of 2006, after which
property values generally stabilized.

Beginning in 2007, residential property values
began to decrease significantly. The decrease
in residential sale s activity and pricing
continued through the mid to latter portion of
2009, due primarily to the subprime credit and
housing crisis, and a lack of available financing.

In the latter portion of 2009 residential values
abruptly stabilized, due primarily to fiscal
stimulus programs and first-time home buyer
tax credits. The residential real estate market
remained largely flat from the latter portion of
2009 through the mid portion of 2012.

Residential property values in the greater
subject market area began to increase in the
first part of 2013, due largely to the continued
availability of relatively low mortgage interest
rates. Said price increase continued throug h
the latter portion of 2019, however, the rate of
increase slowed in 2019 as compared to prior
years.

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NEIGHBORHOO D ENVIRONMEN T (Continued)
PRICE TREND: (Continued) Not e that while there was a decrease in appreciation rates in 2020, residential property
values have not been negatively affected by
the COVID-19 pandemic and resultant “Stay-
at-home” orders (lockdown), which began in
March 2020. While the number of sale
transactions decreased at th e start o f the
lockdown, after some limited activity ,
residential buying activity surged, with many
residential property listings receiving multiple
offers, sometimes at “above asking” prices. In
the first to mid portion of 2021, there was a
significant increase in single family residential
property values. As of the first portion of 2022
the year over year increase in single family
residential property values, as ranged in excess
of 20% to 25% per year, in the subject area
and many nearby communities. Said increases,
which have continued through the present
time, are due to historically low mortgage
interest rates , as well as a lack of current
inventory. While interest rate s have risen in
recent months, there remains significant
demand and valu e increases in many
residential markets.

AGE RANGE: The age range of residential buildings in the immediate and general subject market area is
generally from 25 to 70 years. Single family
residential properties within the immediate
subject market area range from effectively new
to 70 years.

OTHER: The availability and adequac y of public
facilities, transportation, schools, commercial
facilities, recreational opportunities , and
residential housing are rated fair-average.

The City of Garden Grove provides police
protection and fire protection.

Refer to the the Orange County Regional Data,
in the Addenda Section.

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APPRAISERS - ANALYSTS

VALUATION ANALYSIS

VALUATIO N ANALYSI S
The purpose of this valuation study is the estimation of market value of the subject property, as of the date of value set forth herein. Prior to the application of the appraisal process , which in this case employs the Sales Comparison Approach, it is necessary to consider and analyze the highest and best use of the subject property.

HIGHES T AN D BES T US E ANALYSIS :

The 14th Edition of The Appraisal of Real Estate, by the Appraisal Institute, defines highest and best use on Page 332, as follows:
"The reasonably probable use of property that resultsin the highest value.”
In the process of forming an opinion of highest and best use, consideration must be given to various environmental and political factor s such as zoning restrictions, probability of zone change, private deed restrictions, location, land size and configuration, topography, and the character/quality of land uses in the immediate and general subject market area.

There are four basic criteria utilized in the highest and best us e analysis of a property as if vacant, as well as presently improved. The four criteria are summarized as follows:

1. Physically possible.

2. Legally permissible.

3. Financially feasible.

4. Maximally productive.

The foregoing are typically considered sequentially; for example, a specific use may prove to be maximally productive, however, if it is not legally permissible, or physically possible, the productivity is irrelevant.

The subject property is located at the west side of Thackery Drive beginning 78± feet north of Twintree Avenue, in the City of Garden Grove. The subject property contains 7,200 square feet of land area, per Orange County Assessor’s mapping. The site has an interior location on a secondary street, however, only the westerly portion of the street (Thackery Drive) is paved at th e subject property frontage; the easterly portion of the street has gravel surfacing.

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VALUATIO N ANALYSI S (Continued)
HIGHES T AN D BES T US E ANALYSIS : (Continued)
The site has an effectively rectangular land configuration. The subject property is rated average with respect to overall access.

All public utilities including water, gas, electric power, telephone, as well as sanitary sewer are available to the site. The physical characteristics of the subject parce l are considered adequate to accommodate legally permissible uses.

The subject property is located in the R-1-7 (Single-Family Residential) zone district o f the City of Garden Grove. The “R-1” zone district “is intended to provide for the establishment and promotio n of single family detached residences on individual lots and compatible associated activities. ” The minimum lot size is 7,200 square feet. The maximum building height is 35 feet.

The front yard setback is 20 feet. The rear yard setback is 20% of the lot depth not to exceed 25 feet. The interior side yard setback is 5 feet; however, the street side yard setback is 10 feet.

Note, however, the land use designation is International West Mixed Use (IW).

The IW land use is “intended to provide for a mix of uses, including resort, entertainment, retail, hotel, and some higher density residential.” The density for residential development is 42.1 to 60 dwelling units per acre. Due to the relatively small land size , and considering on-site parking requirements, setbacks, landscaped areas, etc., it is reasonable to assume the subject site could accommodate a low to medium density multiple family residential development.

The foregoing I W land use, and potential development density , however, is considered somewhat offset by (1) the relatively small lot size, and (2) the existing covenant which may have an impact on development of the site as a single entity. Note, however, even single family lots are permitted a second Accessory Dwelling Unit (ADU) under current State standards.

After considering (1) the physical characteristics of the subject property, (2) the existing R-1-7 zoning and the IW (International West Mixed Use) General Plan land use designation allowing for a higher density multiple family residential development, and (3) the financially feasible uses, the maximally productive use, and therefore, the highest and best use of the subject property is low to medium density residential development, given the relatively small lot size .

Many single family lots are sold, marketed and/or developed with two units, inclusive of an ADU. The subject property has been appraised accordingly.

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VALUATIO N ANALYSI S (Continued)
VALUATIO N METHODS :

There are three conventional methods (approaches) whic h can be used t o estimate value. They are the Sales Comparison Approach, Cost-Summation Approach, and Income Capitalization Approach. The Sales Comparison Approach is the only valuation method considered reliable as an indicator of land value.

The reader is referred to the last portion of the Preface Section, following the heading "Terms and Definitions," for a brief description of each approach to value.

SALE S COMPARISO N APPROACH :

The Sales Comparison Approach takes into account properties which have sold in the open market. This approach, whether applied to vacant or improved property, is based on the Principle of Substitution which states, "The maximum value of a property tends to be set by the cost of acquiring an equally desirable substitute property, assuming n o costly delay is encountered in making th e substitution." Thus, the Sales Comparison Approach attempts to equate the subject property with sale properties by reviewing and weighing the various elements of comparability.

The Sales Comparison Approach has been applied to the subject property after an investigation was conducted of reasonably comparable multiple family residential land having recently sold within the immediate and general subject market area. The reader is referred to the Market Data Section for detailed information pertaining to each sale property. Refer also to the Market Data Map in the Market Data Section, for an illustration of the location of each sale property.

The reader is referred to the summary of Land Value Indicators on the following page. The sale properties surveyed consist of effectively vacant land parcels, and improved parcels acquired for redevelopment, ranging in size from 4,356 to 68,936 square feet. The purchase prices per square foot of land area range from $41.81 to $70.02. The sales are set forth in chronological order and took place between January 2020 and May 2022. Data 8 represents a current listing.

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LAND VALU E IND ICATORS :

Data
Sale Date
Address Zoning Land Size Corner/Alley Sale Price $ Per SF 1 1-20 R-1-7 6,369 sf
11831 Trask Ave., Garden Grove
no/no $310,000 $48.67
2 5-20 R2 22,500 sf
7072 Spruce St., Westminster
no/no $1,205,000 $53.56
3 12-20 GGMU-2 4,356 sf
13052 Nelson St., Garden Grove
no/no $305,000 $70.02
4 2-21 RL
10761 Rose St., Stanton
6,885 sf no/yes $375,000 $54.47
5 9-21 RS-6 6,911 sf
5891 Stanton Ave., Buena Park
no/no $470,000 $68.01
6 9-21 R2 14,350 sf
4622 Watkins Way, Santa Ana
no/no $600,000 $41.81
7 5-22 R2/R-1-7 68,936 sf no/no $3,100,000
12701 Buaro St. and 12722 Dungan Ln., Garden Grove
$44.97
8 asking R-1-7 36,270 sf
8671 Orangewood Ave., Garden Grove
no/no $2,100,000 $57.90
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VALUATIO N ANALYSI S (Continued)
SALE S COMPARISO N APPROACH : (Continued)
Financing and Cash Equivalency Adjustments:

Sale properties are adjusted for financing arrangements involved in transactions which are not market-typical. A cash equivalency adjustment is generally made in those cases where the cash down payment is generally less than 10% of the purchase price and the financing is other than conventional. The less-than- typical cash down payment, combined with other than conventional financing (such as seller financing), could influence a higher purchase price.

All of the sale properties involved all cash transactions or conventional financing.

A cash equivalency adjustment, therefore, has not been applied to any of the sale transactions.

Market Conditions:

An adjustment for market conditions (date of sale) is appropriate when certain sales occur during a rising or declining market. The adjustments are based upon observations of the real estate market and value appreciation/declining cycles dating back more than 15 years.

Real estate trends affecting residential properties in the subject market are a experienced an upward value trend from 2003 through the first portion of 2007, after which property values generally stabilized. In the first portion of 2008, the residential real estate market experienced a significant decrease in price levels and development activity , which decrease accelerated in the latter portion of 2008 and continued through the latter portion of 2011.

Per discussions with various brokers, a review of various published reports and a review of numerous sale transactions, residential property values generally stabilized in 2012. In the latter part of 2012, the number of sale transactions began to increase, which led to nominal price increases beginning in the first portion of 2013. The rate of increase accelerated in 2015 through 2017. In 2018 and 2019 there was some stabilization in pricing, however, the upward trend in began to increase in 2020, despite the COVID-19 pandemic. The rate of increase accelerated in the mid to later portion of 2021, through the present time.

The reader is referred to the following Zillow graph pertaining to the median sale price of single family residences in the City of Garden Grove.

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VALUATIO N ANALYSI S (Continued)
SALE S COMPARISO N APPROACH : (Continued)
While there has been a significant increase in value of improved single family residences, the rate of increase for the overall land market is considered to be somewhat less, given the limited number of developers/buyers of vacant land, and greater difficulty in obtaining construction financing, as compared to the predominantly owner-user single family residential market. Based o n the foregoing, the market conditions adjustment applied to the sale properties is based on the following schedule:

January-December 2020: + 6.0% per year, or + 0.5% per month January-June 2021: + 12.0% per year, or + 1.0% per month July-December 2021: + 18.0% per year, or + 1.5% per month January-May 2022: + 18.0% per year, or + 1.5% per month Elements of Comparability:

All of the sales employed herein conveyed title to the fee simple interest, and represent arms-length transactions. After viewing all of the land sale properties, an analysis was made of the various elements of comparability. Some of those elements include, but are not limited to, the following:

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VALUATIO N ANALYSI S (Continued)
SALE S COMPARISO N APPROACH : (Continued)
General location. Traffic/noise pollution
Best use/zoning. Topography.

Land size. Improvements/demolition
Land configuration and utility. Plans or entitlements.

Corner location/access. Easements/site utility.

Off-site improvements.

As stated, the marketability of each sale property was considered. Marketability is the practical aspect o f selling a property in view o f all the elements constituting value, and certain economic and financing conditions prevailing as of the date of sale.

It should be noted that the above elements of comparability were not assigned equal weight in making the analysis of each property. The general location, best use/zoning, land size, land configuration, traffic/noise pollution, plans or entitlements, and off-site improvements were considered the most important factors when analyzing the various sale properties, in the subject case.

The reader is referred to the Land Sales Comparison Grid on the following page.

As stated, quantitative adjustments have been applied to the various sale properties for market conditions (date of sale). The elements of comparability have been considered on a qualitative basis due to the lack of direct market evidence regarding quantitative adjustments in the subject market. Note that the various elements of comparability were not assigned similar weight; the overall comparability of each sale property is set forth on the bottom of the Comparison Grid.

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MARKET ANALYSIS COMPARISON GRID
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3-8
Data 1 2 3 4 5 6 7 8
Subject Site
Purchase price: - - - - - -- $310,000 $1,205,000 $305,000 $375,000 $470,000 $600,000 $3,100,000 $2,100,000 Rate per sq. ft.: - - - - - -- $48.67 $53.56 $70.02 $54.47 $68.01 $41.81 $44.97 $57.90 Transactional adjustments
Property rights conveyed: fee simple 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Financing: - - - - - -- 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Conditions of sale: - - - - - -- 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Expenditures after sale: - - - - - -- 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% Date of sale: 22-May 1-20 5-20 12-20 2-21 9-21 9-21 5-22 asking Market conditions: - - - - - -- 28.0% 26.0% 22.5% 20.5% 12.0% 12.0% 0.0% 0.0% Adjusted unit rates: - - - - - -- $62.30 $67.49 $85.77 $65.64 $76.17 $46.83 $44.97 $57.90 Comparability adjustments Subject Site
Location: average similar superior similar inferior similar inferior similar similar Land size: 7,200 sf similar inferior superior similar similar similar inferior inferior Zoning/best use: R-1-7 (IW) similar superior superior similar similar superior superior similar Topography: effect. level similar similar similar similar similar similar similar similar Land configuration: average inferior similar similar similar similar similar inferior similar Corner/access: average similar similar similar superior similar inferior inferior similar Traffic/noise pollution: average inferior similar similar inferior similar similar similar similar Buildings/on-site improvements: vacant similar similar similar similar similar similar similar similar Plans/entitlements: none superior similar similar similar superior similar similar similar Easements/site utility: average similar similar similar similar similar similar similar similar Utilities available: average similar similar similar similar similar similar similar similar Street/off-site improvements: below average superior superior superior superior superior similar superior superior Data 1 2 3 4 5 6 7 8
slightly slightly
Overall comparability: inferior superior superior superior superior inferior inferior inferior

VALUATIO N ANALYSI S (Continued)
SALE S COMPARISO N APPROACH : (Continued)
Data 2, located in Westminster, is deemed superior to the subject propert y regarding general location, while Data 4 and 6, located in Stanton and Santa Ana, respectively, are deemed inferior regarding location. All other sales are considered generally similar with respect to location.

Note that larger properties, whether improved or vacant land, sometimes sell at overall lower rates per square foot in accordance with general economic principals. As such, Data 2, 7 and 8, being larger land parcels, are deemed inferior regarding land size, when considered on a rate per square foot basis.

Conversely, Data 3, representing a relatively small lot, is deemed superio r regarding land size, on a rate per square foot basis.

The subject property is zoned R-1-7, however the General Plan Land Use is IW, having a development density of 42 units per acre, or one unit per 1,037 square feet of land area. Given the relatively small lot size, and considering the existing covenant, a high density residential site is not considered feasible, though the subject site could support mor e than one unit, especially considering a n Accessory Dwelling Unit (ADU) allowance. Note, that the other sale properties zoned for single family residential use would likewise support a second ADU.

Data 2, 3, 6 and 7 are considered having superior zoning, allowing slightly higher densities, and are deemed superio r accordingly. The remaining sal e properties are considered generally similar with respect to zoning.

Data 1 and 7 have irregular land configuration s and ar e deemed inferio r accordingly.

Data 1 backs to a freeway and Data 4 is near an active railroad; said sales are considered inferior with respect to traffic/noise pollution.

Data 1 and 5 sold with plans/entitlements and are deemed superior accordingly.

As noted, the subject site fronts on a public street, however, only a portion of Thackery Drive is improved; the east portio n of the street is unimproved (gravel). Data 6 is located on a relatively narrow alley, and is similar regarding overall off-site improvements. The remaining sale properties are located on fully paved streets and are deemed superior with respect to off-site improvements.

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VALUATIO N ANALYSI S (Continued)
SALE S COMPARISO N APPROACH : (Continued)
No other adjustments were warranted in the subject case.

The reader is referred to the following array of the land sale properties utilized herein. The sales are placed in order within the array by rating with respect to overall comparability, i.e. superior, similar, inferior. Based on the foregoing, the market conditions adjusted unit rates applicable to the land sale properties range from $46.83 to $85.77 per square foot of land area, as follows:

Adjusted
Overall Rate Per
Data Comparability SF Land
3 superior $85.77
5 superior $76.17
2 superior $67.49
4 slightly superior $65.64
Subject - - - $64.00
1 slightly inferior $62.30
6 inferior $46.83
7 inferior $44.97
All of the sale properties were considered helpful in the analysis. While Data 4, at $65.6 4 per square foot i s deemed slightly superior, Data 1 at $62.30 is deemed slightly inferior. As stated, Data 8, at an indicated rate of $57.90 per square foot, is deemed inferior to the subject site, however, Data 8 represents a current listing and is included herein for informational purposes only.

Based o n the foregoing, the unit rate considered applicabl e to the subject property is estimated at $64.00 per square foot of land area, as follows:

Land value:
7,200 SF @ $64.0 0 = $460,800 .

Adjusted: $460,000.

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VALUATIO N ANALYSI S (Continued)
FINA L ESTIMAT E OF VALUE :

Based on the foregoing valuation, the fee simple market value of the subject property, as of June 6, 2022, is estimated as follows:

FOUR HUNDRED SIXTY THOUSAND DOLLARS
$460,000
MARKETIN G EXPOSURE :

The marketing exposure of a particular property is a direct function of supply and demand within a particular market segment. Generally, a higher demand results in a shorter marketing period. During the course of market research for the subject valuations, interviews were conducted with parties involved in the transactions employed in the Sales Comparison Approach. Based on said interviews, as well interviews with real estate brokers specializing in the subject market area , the marketing exposure estimated fo r the subject property , assuming an aggressive and comprehensiv e marketing program, is approxi- mately 3 to 9 months.

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& ASSOCIATES

APPRAISERS - ANALYSTS

MARKET DATA

MARKE T DAT A SUMMAR Y
RESIDENTIAL LAND SALE PROPERTIES:

Sale Date
Data Address Zoning Land Size Corner/Alley Sale Price $ Per SF 1 1-20 R-1-7 6,369 sf no/no $310,000 $48.67
11831 Trask Ave., Garden Grove
2 5-20 R2 22,500 sf no/no $1,205,000 $53.56
7072 Spruce St., Westminster
3 12-20 GGMU-2 4,356 sf no/no $305,000 $70.02
13052 Nelson St., Garden Grove
4 2-21 RL 6,885 sf no/yes $375,000 $54.47
10761 Rose St., Stanton
5 9-21 RS-6 6,911 sf no/no $470,000 $68.01
5891 Stanton Ave., Buena Park
6 9-21 R2 14,350 sf no/no $600,000 $41.81
4622 Watkins Way, Santa Ana
7 5-22 R2/R-1-7 68,936 sf no/no $3,100,000 $44.97
12701 Buaro St. and 12722 Dungan Ln., Garden Grove
8 asking R-1-7 36,270 sf no/no $2,100,000 $57.90
8671 Orangewood Ave., Garden Grove
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MARKET DATA # 1
11831 Trask Avenue (formerly 11831 Sorrell Drive), Garden Grove & A S S O C I A T E S
GRANTOR: George & Beverly Paras APN: 100-352-33 (former APNs 28 & 31)
GRANTEE: Property Group, LLC LAND SIZE: 6,369 square feet SALE DATE: January 24, 2020 ZONING: R1-7
DOC. NO.: 32204 TOPOGRAPHY: Effectively level
SALE PRICE: $310,000 PRESENT USE: Vacant land
TERMS: All cash UNIT RATE: $48.67 per SF
CONFIRMED BY: George Paras, seller
COMMENT: The property is a vacant land parcel that backs to the Garden Grove (22) Freeway. The sale included building plans for a single family residence containing 3,266 square feet. The property previously sold in June 2018 for $349,000, which equates to $54.80 per square foot. The seller, George Paras, indicated that he purchased the site with the intent of developing the site, but then decided to sell the property, at a loss. It appears that Mr. Paras paid an above-market price to acquire the property (in 2018).

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APN: 100-352-33
& A S S O C I A T E S
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MARKET DATA # 2
7072 Spruce Street, Westminster
GRANTOR: T. T. & T. Nomiyama
Living Trust
APN: 096-102-03
GRANTEE: Tony Nguyen LAND SIZE: 22,500 square feet

0.517 acres
SALE DATE: May 29, 2020 ZONING: R2
DOC. NO.: 244862 TOPOGRAPHY: Effectively level
SALE PRICE: $1,205,000 PRESENT USE: Vacant land
TERMS: All cash UNIT RATE: $53.56 per SF land
CONFIRMED BY: Oanh Nguyen, subsequent listing agent
COMMENT: The property is improved with a single family residence containing 1,494 square feet, built in 1958, in poor condition; the property sold based on the value of the underlying land (site could support development of six multi-family units). The property was purchased by an investor who renovated the existing dwelling and leased it to a tenant, with plans to develop the site in the next year or two. The owner subsequently relisted the property for $1,818,000 ($80.80/sf), but received no offers on the listing.

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APN: 096-102-03
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MARKET DATA # 3
13052 Nelson Street, Garden Grove
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GRANTOR: Justin Hoang and APN: 099-081-28
Jackie Hoang
GRANTEE: Buchanan Family Trust LAND SIZE: 4,356 square feet SALE DATE: December 17, 2020 ZONING: GGMU-2 (Garden
Grove Mixed Use-2)
DOC. NO.: 747263 TOPOGRAPHY: Effectively level
SALE PRICE: $305,000 PRESENT USE: Vacant land
TERMS: $251,000 conventional UNIT RATE: $70.02 per SF land CONFIRMED BY: Tim Smith, broker
COMMENT: The property is a vacant land parcel and was marketed as a mixed commercial and residential site, allowing the development of two residential units. The buyer’s plans are unknown
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APN: 099-081-28
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MARKET DATA # 4
10761 Rose Street, Stanton
GRANTOR: Crisostomo Z. Rodriguez APN: 079-351-02
GRANTEE: Long Nguyen and LAND SIZE: 6,885 square feet
Linh Truong
SALE DATE: February 4, 2021 ZONING: RL
DOC. NO.: 80323 TOPOGRAPHY: Effectively level
SALE PRICE: $375,000 PRESENT USE: Construction phase
TERMS: All cash UNIT RATE: $54.47 per SF land
CONFIRMED BY: Long Van Nguyen, buyer
COMMENT: The property was improved with a “red-tagged” single family residence in dilapidated condition, which the buyer demolished, in order to make way for a new single family residence. Note that the property is located 100± feet away from an active railroad corridor.

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APN: 079-351-02
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MARKET DATA # 5
5891 Stanton Avenue, Buena Park
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GRANTOR: Hung Hoang APN: 066-184-26, 27
GRANTEE: Hussein Abbood LAND SIZE: 6,911 square feet
SALE DATE: September 7, 2021 ZONING: RS-6
DOC. NO.: 557946 TOPOGRAPHY: Effectively level
SALE PRICE: $470,000 PRESENT USE: Vacant land
TERMS: All cash UNIT RATE: $68.01 per SF land
CONFIRMED BY: Tien Nguyen, listing agent
COMMENT: The property is a vacant land parcel. The property includes approved building plans to develop a single family residence containing 2,770 square feet, plus a three-car garage. The property previously sold for $308,000, in January 2021, as unentitled land.

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APN: 066-184-26, 27
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MARKET DATA # 6
4622 Watkins Way, Santa Ana
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GRANTOR: Michelle Mai APN: 108-131-35
GRANTEE: Hai T. Hoang LAND SIZE: 14,350 square feet
SALE DATE: September 9, 2021 ZONING: R2
DOC. NO.: 564983 TOPOGRAPHY: Effectively level
SALE PRICE: $600,000 PRESENT USE: Vacant SFR
TERMS: All cash UNIT RATE: $41.81 per SF land
CONFIRMED BY: Richard Mohr, listing agent
COMMENT: The property is improved with an older single family residence in poor- dilapidated condition, which is current vacated. The property sold based on the underlying land value. Access is via Watkins Way, which is an effective alley.

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APN: 108-131-35
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MARKET DATA # 7
12701 Buaro St. and 12722 Dungan Lane, Garden Grove
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GRANTOR: James and Elaine Eads APN: 231-383-36,48
GRANTEE: N.A. LAND SIZE: 68,936 square feet
SALE DATE: May 27, 2022 ZONING: R2/R-1-7
DOC. NO.: N.A. TOPOGRAPHY: Level
SALE PRICE: $$3,100,000 PRESENT USE: Vacant land
TERMS: All cash to seller UNIT RATE: $44.97 per SF land CONFIRMED BY: Woody Harper, listing agent
COMMENT: APN 231-383-36 is improved with a single family residence in fair condition, is zoned R-1-7, and contains 7,560 square feet of land area. APN 231-383-48 is improved with an older single family residence, is zoned R2, has a long and narrow access drive which is also utilized as ingress/egress easement serving adjacent parcels, and contains 61,376 square feet. The site was acquired by a developer. The sale date was confirmed with the broker, however recorded documents are not available through market data resources as of the date of the report.

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APN: 231-383-36,48
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MARKET DATA # 8
8671 Orangewood Ave., Garden Grove
& A S S O C I A T E S
GRANTOR: Lac Doc Duong APN: 132-242-42
GRANTEE: N.A. LAND SIZE: 36,270 square feet
SALE DATE: N.A. ZONING: R-1-7
DOC. NO.: N.A. TOPOGRAPHY: Level
ASKING PRICE: $2,100,000 PRESENT USE: Vacant land
TERMS: N.A. UNIT RATE: $57.90 per SF land
CONFIRMED BY: My Dam, listing agent
COMMENT: The property is unentitled vacant land and is currently listed for sale. The listing agent indicated that an offer had been received for around $2,000,000, however, the seller is seeking the full listing price of $2,100,000, and did not accept the offer.

The seller acquired the property in April 2018 for $1,050,000.

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APN: 132-242-42
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DeLorme Street Atlas USA® 2015

MARKET DATA MAP
TN Scale 1 : 75,000Data use subject to license.
0 ½ 1 1½ 2 mi
km© DeLorme. DeLorme Street Atlas USA® 2015. MN (11.4°E) 0 1 2 3

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& ASSOCIATES

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ADDENDA

See Photo No. 1 on first page of Subject Property Description Section.

PHOTO NO. 2: View looking north along Thackery Drive.

PHOTO NO. 3: View looking east along Twintre e Avenue.

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PHOTO NO. 4: View looking west along Twintree Avenue.

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S

ORANGE COUNTY

REGIONAL DATA
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REGIONAL DATA
The value of real property is influenced by the attributes and utility of land and physical improvements, as well as inter-relationships of markets, demographic forces, transportation, government, environmental influences and other factors. Said factors influence the locat ion and density of population distribu- tion and activities in certain areas and regions over others.

ORANGE COUNTY REGION:

The County of Orange is located generally along the California coastline, between Los Angeles County and San Dieg o County. It occupies 798 square miles and has 42 miles of oceanfront. There are 33 cities and 13 unincorpo- rated communities in the County. The climate is mild throughout the year with an average rainfall of 15 inches. The coas tal region is subject to early morning fog, and as a result, sunshine is recorded about 60% of the year while farther inland this percentage increases to 80%. Mean temperatures range from 48 o
to 76
o
Fahrenheit.

The Orange County population has grown from 61,375 in 1920 to 216,224 in 1950, 487,701 in 1960, 1,420,386 in 1970, 1,932,700 in 1980, 2,410,556 in 1990, and 2,846,289 in 2000. According to the 2010 census, Orange County's population totaled 3,010,232. This was an increase of 163,943 or 4.76% over the County's 2000 census figure. The County's growth rate has averaged approximately 2% annually during the entire period.

The City of Santa Ana serves as the county seat and is the largest city in Orange County with a population of 334,227. The City of Anaheim rates as the second largest city with a population of 336,265. The race/ethnic make-up of Orange County is 60.8% white; 33.7% Hispanic; 18.2% Asian and Pacific Island;

1.7% black; 0.6% native American; 15.0% remainder.

Transportation in Orange County is provided for by a variety of means. John Wayne (Orange County) Airport, located in Newport Beach, is the county's only major airport; Long Beach Airport and Los Angeles International Airport, in Los Angeles County, are also frequent ly used by Orange County residents.

Commercial seaport terminals are available in San Diego County, and Long Beach/Los Angeles harbors. Railroad services are provided by Atchison, Topeka and Santa Fe, National Amtrak, and Southern Pacific. There are approximately 600 trucking lines which operate in Southern California and that serve Orange County. Orange County is intersected by eight freeways and R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYSTS

REGIONAL DATA (Continued)
ORANGE COUNTY REGION: (Continued)
numerous state highways. Bus transporta tion is provided for by Greyhound Lines, Southern California Rapid Transit District, and the Orange County Transit District.

Per the State of California Employment Development Department, please note the following:

The unemployment rate in the Orange County was approximately 2.6% in May of 2018, unchanged from the revised 2.6% in April of 2018, and below the year- ago estimate of 3.2 percent. This compares with an unadjusted unemployment rate of 3.7% for California and 3.6% for the nation during the same period.

Refer to the January 2018 metrics pertaining to the breakdown of employment, by industry, on the following page.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYSTS

REGIONAL DATA (Continued)
ORANGE COUNTY REGION: (Continued)
Orange County Industry Employment Comparisons
This indicator breaks down Orange County’s employment by industry for the current month, comparing changes in employment levels since the previous month and the previous year.

Source: California Employment Development Department
R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYSTS

REGIONAL DATA (Continued)
ORANGE COUNTY REGION: (Continued)
Per Zillow, in May 2018, the county's median sales price of existing homes (resale activity) was $700,000. Condominium, duplex or townhouse style housing generally range in value from $450,000 to $550,000. Sales of condo- minium and townhouse development proj ects were extremely strong during the 1980s and early 1990s, especially in the first-time buyer market. There was a substantial decline in value of all types of properties within the greater Southern California region between 1991 and 1996. Overall housing prices declined between 20% and 40% betw een 1991 and 1997, depending primarily on location and value range.

Beginning in 1998, there was evidence of increased real estate market activity.

There was a general upward value trend affecting residential properties within the immediate and general subject market area, from 2003 through the mid portion of 2006, after which property valu es generally stabilized. Beginning in 2007, residential property values began to decrease significantly. The decrease in residential sales activity and pricing continued through the latter portion of 2008, due primarily to the subprime credit and housing crisis, multi- billion dollar write-downs of mortgage-backed securities by regional and national banks, and a lack of available financing. In the mid to latter portion of 2009 residential values abruptly stabilized, due primarily to fiscal stimulus programs and first time home buyer tax credits. In 2010, certain markets began to experience an increase in sales, as well as a nominal increase in property values (5%-10%). Any brief increases in residential property values in the mid portion of 2010 subsequently su bsided and were considered to be attributed to the first time home buyers tax credit. In 2013 residential property values resumed and upward trend with a slight increase in pricing and sales activity. The upward trend generally continued through 2017 and appears to have stabilized in recent months.

Orange County has experienced high levels of development within the past 25 years. Most of the acreage and undeveloped land parcels are located within the eastern and northeastern portion of the County. There are 143,915 acres dedicated for residential use, 25,115 acres dedicated for commercial use, and 112,112 acres of open space. Development intensity has increased near the coastline in southern Orange County, and parts of northern San Diego County. Development, however, between 1991 and 1997, and again between 2007 and 2010, was limited due to the lack of demand and construction financing; recent development is proceeding cautiously. The megalopolis predicted 35 years ago, be tween Los Angeles and San Diego, is in the developing stages.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYSTS

S

QUALIFICATIONS
OF

APPRAISER
R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST

BACKGROUND AND QUALIFICATIONS
John P. Laurain, MAI, ASA
Certified General Real Estate Appraiser
California Certification No. AG 025754
PRESIDENT:

R. P. Laurain & Associates, Inc.
3353 Linden Avenue, Suite 200
Long Beach, California 90807
Office: (562) 426-0477 - Fax: (562) 988-2927
[email protected]
PROFESSIONAL ORGANIZATION AFFILIATIONS:

The Appraisal Institute
MAI Designated Member
American Society of Appraisers
Senior member; hold professional endorsement and
designation “ASA” in urban real estate.

American Arbitration Association
Associate arbitrator in title insurance matter.

Certified General Real Estate Appraiser by the
Office of Real Estate Appraisers, State of California.

Certification No. AG 025754.

APPRAISAL BACKGROUND:

Real estate appraisal and valuation consultation services conducted for public purposes include eminent domain studies, street widening and grade separation (bridge) projects, public school and university expansion projects, relocation studies, housing and public loan programs, Navy housing, senior housing, public bond measures, leasing of publicly-owned properties, Quimby Act park fee studies, Fair Political Practices Commission analyses, budgetary studies, and transfers (exchanges) of properties between public agencies. Private real estate appraisal services have been conducted for lending institutions, insurance companies, attorneys, estates for tax and donation purposes, private subdivision development studies, and other private uses.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

BACKGROUND AND QUALIFICATIONS (Continued)
APPRAISAL BACKGROUND: (Continued)
Residential Property:

Residential properties appraised incl ude single family, condominiums, own- your-own, townhouse, low and medium density multiple family, 100+ unit apartment complexes, waterfront properties, boat docks, mobile home parks, vacant single-family lot and acreage parcels, and low to high density vacant land parcels.

Commercial and Industrial Property:

Commercial property appraisal studies have included single and multi-tenant retail, strip centers, shopping centers, low-rise and high-rise office buildings, medical offices, restaurants and fast -food developments, nightclubs, con- venience stores, theaters, automobile repair and service facilities, service stations, truck fueling and washing stations, car wash facilities, automobile sales, mixed-use properties including single resident occupancy (SRO) developments, as well as hotel and motel properties, and vacant land.

Industrial property appraisals have included warehouses, light and heavy manufacturing, distribution and transit facilities, food processing, cold storage, lumber yards, recycling centers, open storage, vacant land, remnant and landlocked parcels, properties encumbered with oil and water injection wells, sites with soil contamination and land fill properties.

Special Purpose and Special Use Properties:

Appraisal services and valuation studies of public, quasi-public, special use, and nonprofit facilities include, among others, seaport properties, airport properties (FBO, hangars, warehouse, office, land, etc.), submerged land, river rights-of- way, reservoirs, agricultural land, conservation/mitigation and wetland properties, utility and railroad rights-o f-way, flood control channels, city hall buildings and civic center complexes, courthouses, libraries, fire and police stations, post offices, public parking structures, parks, public and private schools, adult learning centers, athletic facilities and gyms, bowling alleys, tennis centers, youth homes, after school facilities, daycare facilities, hospitals, skilled nursing facilities, churches, meeting halls and veteran facilities.

Valuation Methodologies:

In addition to the three conventional valuation methods (Sales Comparison Approach, Cost-Summation Approach, and Income Capitalization Approach), valuation methodologies have included discounted cash flow analyses, leased fee, and leasehold analyses, absorption discounts, deferred maintenance, cost- to-cure, bonus value, excess rent, acro ss-the-fence, value-in-use, fractional interests, hypothetical valuations, and reuse studies.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

BACKGROUND AND QUALIFICATIONS (Continued)
APPRAISAL BACKGROUND: (Continued)
Property interests appraised for eminen t domain purposes include full and partial takings, as well as severance damage and project benefit studies.

Valuation of various types of easements have included permanent surface, street, temporary construction, slope, utility, pipeline and subsurface, aerial, bridge structure, signal light, exclusive and nonexclusive surface rights, multi- layered, battered pilings, tie-back, railr oad, drainage ditch, and flood control easements.

Clients:

Real estate research, analysis and appraisal services performed on projects for various public agencies and private corporations while associated with R. P. Laurain & Associates, Inc., since 1986. Following is a partial list of public agencies for which appraisal services have been provided:

Cities:

City of Alhambra City of Downey City of Norwalk
City of Anaheim City of El Monte City of Oceanside
City of Artesia City of El Segundo City of Ontario
City of Arvin City of Garden Grove City of Palmdale
City of Azusa City of Glendale City of Palm Springs
City of Baldwin Park City of Hawaiian Gardens City of Paramount City of Bell City of Huntington Beach City of Pasadena
City of Bell Gardens City of Huntington Park City of Perris City of Bellflower City of Industry City of Redondo Beach City of Beverly Hills City of Inglewood City of Riverside City of Brea City of Irwindale City of Rosemead
City of Buena Park City of Laguna Beach City of San Juan Capistrano City of Burbank City of Laguna Woods City of San Marino City of Carson City of Lakewood City of Santa Ana
City of Cathedral City City of La Mirada City of Santa Fe Springs City of Chino City of Lawndale City of Seal Beach
City of Chino Hills City of Long Beach City of Signal Hill City of Compton City of Los Alamitos City of South El Monte City of Corona City of Los Angeles City of South Gate
City of Covina City of Monrovia City of Tustin
City of Cudahy City of Montebello City of Upland
City of Cypress City of Monterey Park City of West Hollywood City of Diamond Bar City of Newport Beach City of Whittier R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

BACKGROUND AND QUALIFICATIONS (Continued)
APPRAISAL BACKGROUND: (Continued)
Other Public and Quasi-Public Agencies:

Alameda Corridor Engineering Team
Alameda Corridor Transportation Authority
California High Speed Rail Authority
Caltrans
Castaic Lake Water Agency
Hawthorne School District
Kern County
Long Beach Community College District
Long Beach Airport
Long Beach Unified School District
Long Beach Water Department
Los Angeles County Department of Beaches and Harbors
Los Angeles County Chief Executive Office
Los Angeles County Internal Services Department
Los Angeles County Metropolitan Transportation Authority Los Angeles County Public Works
Los Angeles Unified School District
Los Angeles World Airports
Lynwood Unified School District
Orange County Transportation Authority
Orange County Public Works
Orange County Counsel
Port of Hueneme
Port of Long Beach
Port of Los Angeles
Riverside County Transportation Commission
San Bernardino County
Southern California Edison
State of California, Santa Monica Mountains Conservancy U. S. Department of the Navy
U. S. Postal Service
Other:

Various attorneys, corporations, lending institutions, and private individuals.

Gold Coast Appraisals, Inc.:

Associate appraiser, as independent contractor, during portions of 1991 and 1992, specializing in appraisal of single family residential through four-unit residential properties.

R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

BACKGROUND AND QUALIFICATIONS (Continued)
EXPERT WITNESS:

Qualified as an expert witness in the Los Angeles County Superior Court, Central District.

Qualified as an expert witness Orange County Superior Court.

Qualified as an expert witness in an arbitration matter before Judicial Arbitration and Mediation Services in the Counties of Los Angeles and Orange.

Provided testimony as an expert witness in conjunction with eminent domain matters before the San Bernardino and Riverside County Superior Courts.

ACADEMIC BACKGROUND:

Cypress Community College - Basic curriculum.

Long Beach Community College - Basic curriculum.

Real estate and related courses taken through and at various Community Colleges, Universities, the Appraisal Institute, and business schools, in accordance with the Continuing Educ ation Requirements of the State of California, as follows:

Fundamentals of Real Estate Appraisal
Appraisal Principles and Techniques
California Real Estate Principles
Real Estate Appraisal: Residential
California Real Estate Economics
Basic Income Capitalization Approach
Advanced Income Capitalization Approach
Advanced Market Analysis and Highest & Best Use
Advanced Applications
Advanced Concepts and Case Studies
Quantitative Analysis
Eminent Domain and Condemnation
Complex Properties
Real Estate Escrow
California Real Estate Law
Uniform Standards of Professional Appraisal Practice
Federal and State Laws and Regulations
Uniform Appraisal Standards for Federal Land Acquisitions (Yellow Book) Valuation of Conservation Easements
R. P. LAURAIN
& ASSOCIATES

APPRAISERS - ANALYST S

_______________________________________

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

Successor Agency to Garden Grove Agency for
Community Development
11222 Acacia Parkway
Garden Grove, California 92840
Attn: Secretary/City Clerk’s Office
APN: 231-471-23 This Instrument to be exempt from Recording Fees (Govt. Code 27383)

DOCUMENTARY TRANSFER TAX
$
(computed value of property conveyed)
Signature of Declarant or Agent determining tax

GRANT DEED
FOR A VALUABLE CONSIDERATION , receipt of which is hereby acknowledged, the

SUCCESSOR AGENCY TO THE GARDEN GROVE AGENCY FOR COMMUNIT Y DEVELOPMENT, a public body corporate and politic, organized and operating under Parts 1.8 and

1.85 of Division 24 of the California Health and Safety Code, (“Successor Agency” or “Grantor”), hereby GRANTS to NEWAGE GARDEN GROVE II LLC (“Developer” or “Grantee”), the real property in the County of Orange, State of California, described in the legal description attached hereto as Attachment No. 1 and incorporated herein.

The Grantee herein covenants by and for itself, its successors and assigns, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 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 the Grantee 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, lessee s, subtenants, sublessees, or vendees in the Property. The foregoing covenants shall run with the land.

The Grantee further covenants that all deeds, leases and contracts relating to the Property shall contain the following prohibition against discrimination:
(a) In deeds: “The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 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 premises herein conveyed, nor shall the grantee or any Grant Deed

4885-1510-2254v2/022046-0046 Page 310 of 640

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 premises herein conveyed . The foregoing covenants shall run with the land.”
(b) In Leases: “The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
“That there shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 129 26.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himse lf or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased.” (c) In Contracts: “There shall be no discrimination agains t or segregation of, any person or group of persons on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 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 premises which are the subject of this Agreement, nor shall the grantee 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 premises herein conveyed . The foregoing covenants shall run with the land.”
[Signatures appear on following page.]
Grant Deed

4885-1510-2254v2/022046-0046 Page 311 of 640

______________________________
IN WITNESS WHEREOF, Grantor and Grantee have executed this Grant Deed the day and year first set forth herein above.

GRANTOR

SUCCESSOR AGENCY TO THE GARDEN

GROVE AGENCY FOR COMMUNITY

DEVELOPMENT,
a public body, corporate and politic
By:

Scott C. Stiles, Director
or Authorized Designee
ATTEST:

TERESA POMEROY, CMC
Grantee Hereby Accepts this Grant Deed:

GRANTEE:

NEWAGE GARDEN GROVE II, LLC
Ronnie Lam, President
APPROVED AS TO FORM:

Counsel to Grantee
Grant Deed

4885-1510-2254v2/022046-0046 Page 312 of 640

EXHIBIT A TO GRANT DEED

LEGAL DESCRIPTION

THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF

GARDEN GROVE IN THE COUNTY OF ORANGE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:

LOT 36, TRACT NO. 2148, AS SHOWN PER MAP FILED IN BOOK 58, PAGES 46, 47, AND 48

OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER, COUNTY OF ORANGE, STATE OF CALIFORNIA.

APN: 231-471-23
Legal Description
Grant Deed Former Agency to Developer

4885-1510-2254v2/022046-0046 Page 313 of 640

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

STATE OF CALIFORNIA )
) ss.

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

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

WITNESS my hand and official seal

SIGNATURE OF NOTARY PUBLIC
Certificate of Acceptance
Grant Deed
Former Agency to Developer

4885-1510-2254v2/022046-0046 Page 314 of 640

Agenda Item - 3.c.

City of Garden Grove

INTER-DEPARTMEN T MEMORANDU M
To: Scott C. Stiles From: Lisa L. Kim
Dept.:

Subject:

City Manager
Adoption of Resolution
approving Street Vacation
N
o. SV-000-2022 for a
portion of Thackery Drive
a
nd Alley north of Twintree
Avenue, west of Harbor
Boulevard, Garden Grove.
(A ctio n Item)
Dept.:

Date:

Community and Economic
Development
9/13/2022

OBJECTIV E
For the City Council to hold a public hearing and to adopt a Resolution approving Street Vacation No. SV-000-2022 vacating Thackery Drive and Alley, north of Twintree Avenue, west of Harbor Boulevard.

BACKGROUN D
Thackery Drive and Alley north of Twintree Avenue previously served as the access to single-famil y homes and businesses. Those homes and businesses were purchased and demolished by either the City and/or former Garden Grove Agency for Community Development (Former Agency) as part of a project to facilitate the development of a hotel project.

Streets and Highways Code 8312 authorizes the City Council to vacate all or a portion of a street within the City pursuant to Divisio n 9, Part 3, Chapter 3 of the Californi a Streets and Highways Code (§§ 8320-8325). Said Chapter 3 authorizes the City Council to initiate proceedings to vacate the public street when it is no longer necessary for current or prospective public street purposes.

On July 7, 2022, the Planning Commissio n adopted Resolution No. 6042-22 finding and reporting to the City Council , pursuant to Government Code Section 65402, that the proposed vacation and dispositio n of the portion of Thackery Drive and Alley, north of Twintree Avenue conforms with the City’s General Plan. On August 9, 2022, the City Council adopted Resolution No. 9750-22 declaring its intention to vacate and abandon the portion of Thackery Drive and Alley, north of Twintree Avenue and to set a public hearing date of September 13, 2022. On August 14, 2022, Thackery Drive and Alley, north of Twintree Avenue was posted with Resolution No. 9750-22 in

accordance with Chapter 3 of part 3 of Divisio n 9 of the Streets and Highway Code, Sections 8320 et seq. On August 17 and 24, 2022, the City Clerk published the notice of the public hearing in the Orange County News, a newspaper of general circulation in the City.

The July 7, 2022 Planning Commissio n action was appealed to the City Council . At the August 23, 2022, City Council meeting, the City Council adopted Resolution No. 9767-22 denying the appeal.

The City Council further adopted Resolution No. 9768-22 adopting a Mitigated Negative Declaration and Mitigation Monitoring and Reporting Program for the proposed hotel project in compliance with the California Environmental Quality Act.

Easements for all existing utility facilities located in Thackery Drive and Alley, north of Twintree Avenue to be vacated will be sewer, water, electricity, gas, and communications. The vacation will eliminate the City’s obligatio n to maintain the street and release the City of any liabilit y for the public street.

DISCUSSIO N
The area to be vacated was a remnant street and alley that provided access to single- f
amily homes and businesses and the street provided no continuous vehicular circulation as it terminates at the Sheraton Hotel. Staff has determined that the approximately 33,000 square feet of street is no longer needed for present or prospective public street use.

State law requires that prior to vacating any right-of-way, the legislative body must determine that the area to be vacated would not be useful as a non-motorized transportation facility. Staff issued letters to the affected utility companies regarding their utility easements. Staff did not receive any notificatio n indicated that associated facilities are needed.

FINANCIA L IMPAC T
The financial impact to the General Fund was the cost of publicatio n and posting of the public hearing notice. The future dispositio n of the vacated portion of the street to the adjacent property owner will generate income to the City.

RECOMMENDATIO N
It is recommended that the City Council :

Conduct a public hearing;
Adopt the Resolution approving Street Vacation No. SV-000-2022, vacating the portion of Thackery Drive and Alley north of Twintree Avenue, west of Harbor Boulevard; and
Authorize the City Clerk to record the Resolution with the County Recorder.

By: Paul Guerrero, Sr. Real Property Agent
ATTACHMENTS:

Description Upload Date Type File Name
Exhibit A -
Resolution 8/30/2022 Resolution Exhibit_A_-
_Resolution_Approving_Street_Vacation.pd f
Exhibit B -
Thackery Drive
Ex
hibit
8/30/2022 Exhibit Exhibit_B_-_Thackery_Drive_Exhibit.pdf Exhibit C - Alley
Exhibit 8/30/2022 Exhibit Exhibit_C_-_Alley_Exhibit.pdf Exhibit D - Affidavit
of Posting
R
esolution
8/30/2022 Notice Exhibit_D_-_Affidavit_of_Posting_Resolution.pd f Exhibit E - Affidavit 9-13-22_Res_No._9750 -
of Posting
R
esolution
9/6/2022 Notice 22_Vacating_Thackery_Ave_Setting_PH_Date_Affidavit- OCN_GG_121867-8.pd f

GARDEN GROVE CITY COUNCIL
RESOLUTION NO. ___

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GARDEN GROVE, CALIFORNIA, APPROVING STREET VACATION NO. SV-000-2022 AND ORDERING VACATION AND

ABANDOMENT OF A PORTION OF THACKERY DRIVE AND ALLEY NORTH OF TWINTREE AVENUE
The City Council of the City of Garden Grove hereby finds, determines, declares, and resolves as follows:

WHEREAS, Thackery Drive and Alley, a public street commencing on Twintree Avenue to the south and terminating in a cul-de-sac on the north end, approximately 450 linear feet away previously served as the access to single-family homes and businesses; WHEREAS, those homes and businesses were purchased and demolished by either the City and/or former Garden Grove Agency for Community Development as part of a project to develop a hotel development;
WHEREAS, pursuant to the development agreement, the Former Agency was obligated to fund and demolish the alley and Thackery Drive;
WHEREAS, this street area, described in the legal description in Exhibit “A” and depicted in Exhibit “B” hereto, is no longer necessary for current or prospective public street purposes, or as a non-motorized transportation facility;
WHEREAS, pursuant to Chapter 3 of Part 3 of Division 9 of the Streets and Highways Code, Sections 8320 et seq., the City Council is authorized on its own initiative to initiate proceedings for vacation of public streets that are no longer necessary for current or prospective public street purposes or as a non-motorized transportation facility; WHEREAS, pursuant to Streets and Highway Code Section 8312, the City Council is authorized to vacate all or a portion of a public street within the City; and WHEREAS, on July 7, 2022, the Planning Commission of the City of Garden Grove adopted Resolution No. 6046-22 pursuant to Government Code 65402 and found that the proposed vacation of Thackery Drive and Alley commencing on Twintree Avenue to the south and terminating in a cul-de-sac on the north end, is consistent with the General Plan of the City of Garden Grove.

WHEREAS, on August 9, 2022, the City Council adopted Resolution No. 9750-22 declaring its intention to vacate and abandon the portion of Thackery Drive and Alley commencing on Twintree Avenue to the south and terminating in a cul-de-sac on the north end and set a public hearing date for September 13, 2022, at 6:30 p.m. in the Community Meeting Center, 11300 Stanford Avenue, Garden Grove;
WHEREAS, at the public hearing on September 13, 2022, at 6:30 p.m. in the Community Meeting Center the City Council heard all persons interested in or objecting to the proposed vacation, and received and considered all evidence submitted; and

Garden Grove City Council
Resolution No. _____

WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF GARDEN GROVE, CALIFORNIA, DOES RESOLVE, DECLARE, DETERMINE, AND ORDER AS FOLLOWS:

SECTION 1. Incorporation of Recitals. The foregoing recitals are true and correct and are incorporated by reference herein.

SECTION 2. Finding. The City Council finds that the portion of Thackery Drive and Alley commencing on Twintree Avenue to the south and terminating in a cul-de-sac on the north end and described on Exhibit “A” and depicted on Exhibit “B” hereto is unnecessary for present or prospective public street purposes, or as a non-motorized transportation facility.

SECTION 3. CEQA Determination. The City Council finds that this vacation action is not subject to the California Environmental Quality Act (CEQA) pursuant to Section 14304 (Class 4 categorical exemption-minor alternation of land), Section 15060(c)(2) (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment), and results 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical changes to the environment, directly or indirectly.

SECTION 4. Vacation. Pursuant to the provisions of Chapter 3, Part 3, Division 9 (Section 8320 et seq.) of the California Streets and Highway Code, the City Council hereby orders the vacation and abandonment of Thackery Drive and Alley commencing on Twintree Avenue to the south and terminating in a cul- de-sac on the north end, as more particularly described on Exhibit “A” and depicted on Exhibit “B” hereto and incorporated herein by reference.

EXHIBIT “A”

LEGAL DESCRIPTION

PUBLIC STREET VACATION

THACKERY DRIVE, IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP OF TRACT NO. 2148 FILED IN BOOK 58, PAGES 46, 47 AND 48 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXHIBIT “B” ATTACHED HERETO AND BY THIS REFERENCE MADE A PART HEREOF.

THIS DESCRIPTION WAS PREPARE
D
BY ME OR UNDER MY DIRECTION:
_______________________________
KENT COOPER, P.L.S. 9322
EXPIRES 3‐31‐23

EXHIBIT “A”

LEGAL DESCRIPTION

PUBLIC ALLEY VACATION
THAT CERTAIN ALLEY ADJOINING LOTS 19 THROUGH 30, INCLUSIVE OF TRACT NO. 2148, IN THE

CITY OF GARDEN GROVE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A MAP THEREOF FILED IN BOOK 58, PAGES 46, 47 AND 48 OF MISCELLANEOUS MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.

EXHIBIT “B” ATTACHED HERETO AND BY THIS
REFERENCE MADE A PART HEREOF.

THIS DESCRIPTION WAS PREPARED
BY ME OR UNDER MY DIRECTION:
_______________________________
KENT COOPER, P.L.S. 9322
EXPIRES 3‐31‐23

CITY OF GARDEN GROVE

AFFIDAVIT OF POSTING RESOLUTION OF INTENT
RESOLUTION NO. 9750-22
Pursuant to the procedures established in Chapter 3, Part 3, Division 9 of the Streets and Highways Code (§§ 8320 et seq.), a Notice of Vacation must be posted conspicuously along the easements proposed to be vacated no later than at least two (2) weeks before the date of the Public Hearing, September 13, 2022, at 6:30 p.m., or as soon hereafter as possible, in the Community Meeting Center, located at 11300 Stanford Avenue, Garden Grove, CA 92840. The notice shall be posted no more than 300 feet apart. A t least three (3) notices shall be posted.

I, Paul Guerrero, posted six (6) notice copies of Resolution 9750- 22 along the Thackery Drive and Alley, commencing on Twintree Avenue to the South and terminating in a cul- de-sac on the north end to be vacated on September 13, 2022.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

No. Description

1. North end of Thackery Drive, resolution stapled onto two wooden stakes.

2. Midway of Thackery Drive, resolution stapled onto two wooden stakes.

3. South end of Thackery Drive, resolution fasten onto the existing chain link fence.

4. North end of the Alley, resolution stapled onto two wooden stakes.

5. Midway of Alley, resolution stapled onto two wooden stakes.

6. South end of Alley, resolution fasten onto the existing chain link fence.

Paul Guerrero August 24, 2022
Signature Date

PHOTOGRAPHS

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ttugust 17 .2fr22. August 24.2A22
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A T.ASAJJTNT'| *T THE CiTY C{f UNC|L CT THE CIT\ A{: AARDF.N {}?A\IE. aA1..'1,::t.)ft.NlA, Ur{lLARING ITS llll'ENTi{}F, Tii 'll|ilArq At:t* A.*1t N'l{3i1i THACK, EF,Y A:N*4UE AND ALLEY NORTT,I OF TNI?{TRI€ AVEIIIJE. WEST OF HARBOR 3LVD. ,J1ND SETTII\.IG A FUBLIC iI[ARiNG TilTELCII
1he i:it,j {)rrrlt:il at i:he air.y oi Ga."len Gt4ae hereby frads, delerm}n€;, ceclafr-q, and resgives as io,lov{s:
'll{-iEREA$, \he pulslic righ\-ol-way knowri as Ti}acLery Avenue and Aiiey. a pubiic s'ireei oDrnftenrifrg on -fwiri.ee Avenue to the souih and lerftinatiirg in a cill-de-sac or',lhe r\q{lh e{\d. apvoxifiat-el'! 450 linsar feet alvay; anai WiifREAS, fhaLkety Avenue a,1.J A11ey tlteviryusly se,ved as ihe ac,jess io sirigie- lamily h0mes rnd busirecs, ard
WHF"lltA.S, lhose hor'€s and businesses were piirchasecj and demolished by eiiher the C,i-\ atldlot lotfllsr Qaraen Gro/e Agenry fcr Ccrrnnurliiy Developme,:i as part of a proiect to d?veiop a hcle! oeyeiglnenl: and
WHEREAS, pursuafli to lhe CevBbpnrent agreem€nt, rhe Fomer Agsncy wa5 cblig- aied io fund anri derrolisii t?,,e alLy and a parli){t .l Tha.:,r.e{y Av-anue e*4 V,lllERE.6,5, the suirject gublit: iight"-af-.Na'-i, described in ihe legal descripiicn in Ex hibit "A" anri iiepicted ir l:xhibit "B" hereic. is no longsr necessary for curefit rr pro- stective public slree! pt:rpsa?3, ,{ as a *ofi-frfiia{ize{j i{at\$pa{lazi}n lactiiLy. ;-fid i#HEREAS, puBUani is *l&?le{ 3 6i Part 3 of Division I .f the Sireets and iiigh- says Code . gecliaas A;72i.i et "ieq., iht aily Couflcil is auihcrizeij on its owf; initieii!,e ia initiate proceedings iili lacaii{:,il 6f public sireets that aie no ionger fiecessary ior tlirrenl or prospecli,ie publir: slrr:et purposes or a,c a f,on-mclorized trenspoi-teiicn ia- cil;ty; and
VTHERfAS, pursila,rl to Sirceis and Higlruay Code Seclioa8.312, the Ciry Counci; is ailthorired l.D \jeaa\e all ar a ?oLicln of a public sirsst vr'it.hifi ihe Cily. '..JOW,

THTREFORE, THE
'iry
CCUNCIL OF THE CITY CF G,ARi]EII GRCVE
CALIFORNIA, DOES RESOLVE, DECLARE, DETTRifiINE, AND ORDER AS 'CL1..o"{s:

SICT iON 1 The fr,roqoirc tecitalt are t-{rs afrri ca$ect and a{e iacarDo€ted bv refer- gncg hereifi.

GEgIiQts li is the lnientiril cf the i,ily Couflcil to vacate and abandon Thackery Avenue afld Ailey cornmercing of; '.ivrintree Avsnue to the south and ierminating in a t:i:t-de-sac an the noi-t\ eiid.
$gGIlANi. it is the iniention o{ ihe C,ty Council tc find thai Thackery Avenue ae i Al- Iey cGmmeficing ,f; Twintre, Averun is lhe south and ierflinatiflg in a cu!-de-sac on

1.1\e nbrih end and CescriL,ed ifr Exhibits A and "8" heieto i$ ilnnecessary for present or prospective pubiic street purposes. or as a non-motorizeci iransporiaiion faciliiy. !fCTlCN 4 fhe! CiL'- Lrrnt il heicbv sets a oublic hearino o ir. heirl on SeuLrmber

13. 2822. al 6:3D pt1t, c{ as $oon herea,ler as possiille, in i?\e Caur,cll Chafi}lle$ ol lhe Cii.! Ct )ncil ot the City ol i)arden Grcve loca*)d at 1 1300 Stantcrd Arenue, Qarden ercve,, Calilornia. S2840. At lhis headng, all interested persors may inlrc- d\'ce evidrrlce are iectinrqrly p1rlalning io the proposed vacalicn. At ih+ conclulion $f *E l\ea{w|) lle City C,}utlctl shall delermine. frorr all e!idefice sublnitted, whelher ot fr(i. ihe p{ap$sed vaoatlon is in the public interest. lirlic" of lhe Puhlic Hsariilg shall be publ;sheij, {',rcle4. ana mailed in at:urdan{+ uill\ lhe requirerrel-tc al Slyeer. a"d llighy{ays Code Seriicfls 8320. et seq., aa tullcw..
iai Tlfi C,try C'erk is directed io caus? a r.:apy al lhi:, Resclution .c be publishec in a $eekl.j t'efisptspet, ,ilblisireC arl,J !:ic;uiatel in Garden Grove ior at leasi i$o suc- ,{.a,ive vrt eks Friat ia ihe irme set herein for ihe ,ublic hearing. (b) The Direclor of puLrlir V,€rks i,q direcied i, prsi, Lr. cause'io be posied, notice ol vaoatioii coilspicrousl:t alorg ihe line of ihe pcdiofls ct the slreel io lle vacaied. ,ol more ihai 3fr4 bei apaf., bui at least ei thrr* isceliors iherern.

SfrT IOI'I 6. Th€ City elects to prcceec unijer ihe p,o,/isicn at Chapier 3, Parl 3 li?r sion 9 (Sectior 3320 et seq.) of the Caiifornia Strets ar. highwa,l CoCe.

A{japiei} lhi1 9ll. 'la'! aI Augusl 2022.

ATTEST: isl $TEVr JCNES
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/sl LIZABETH V?SOLjEZ
DEPUTY *ITY C|,EIIK
!iIATE OT: CAI,,IFO{iNIA )
COUI.ITY OF ORAi\.JGE ) $,::

CITY OF GARDEI'I GBOIII ]
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AYES; COUtICIL ?AEM*EF1U: l7i BRiETlGAlvl. Q',tiEiLL, BUl, i4LCPFEl.leTElri.

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City of Garden Grove

INTER-DEPARTMEN T MEMORANDU M
Agenda Item - 3.d.

To: Scott C. Stiles From: Lisa L. Kim
Dept.:

Subject:

City Manager
Adoption of a Resolution
approving the Dispositio n and
Development Agreement
b
etween the City of Garden
Grove and Newage Garden
Grove II, LLC. (A ctio n Item)
Dept.:

Date:

Community & Economic
D
evelopment
9/13/2022

OBJECTIV E
For the City Council to conduct a public hearing and to adopt a resolution approving a Dispositio n and Development Agreement (City DDA ) between the City of Garden Grove and Newage Garden Grove II, LLC for the construction of a Nickelodeo n Resort. The proposed project is located on 3.72 acres at the northwest corner of Harbor Boulevard and Twintree Avenue, Garden Grove.

BACKGROUN D
The Garden Grove Agency for Community Development (Former Agency) and Palm Court Lodging , LLC, a Californi a limited liabilit y company (Palm Court) entered into a Dispositio n and Development Agreement on June 26, 2001 (Agency DDA ) pursuant to which Palm Court was to acquire land from the Former Agency and develop two hotels.

One hotel was completed. The dispositio n of land for, and the development of, a second hotel as provided for under the Agency DDA , has not yet occurred. Developer is the assignee of Palm Court with regard to the acquisitio n of land and development of the second hotel under the Agency DDA . The Agency DDA agreement has been delayed due to an enforced delay. In May 2016, the City entered into an Exclusive Negotiation Agreement (ENA ) between the City and Newage Garden Grove, LLC (as successor to Palm Court Lodging ) (“Developer” ) for the development of approximately 10-acres of real property in Garden Grove. Newage Garden Grove, LLC assigned its rights and obligation s under the ENA to Newage Garden Grove II, LLC. The ENA has allowed the Developer to further analyze the Proposed Project and undertake completion of the environmental review of the Project, and determine the economic feasibilit y of the Project. The Developer concluded that the most feasible site is now the 3.72 acres comprised of approximately 2.25 acres (Agency Property) being conveyed to the Developer pursuant to the Agency DDA , and approximately 1.5 acres owned by the City (City Property) being conveyed to the Developer pursuant to the City DDA (See Attachment No. 2). The Agency Property and City Property are referred to herein as the “Site.” A public hearing notice was published for the September 13, 2022, Garden Grove City Council Meeting on August 30 2022 and on September 6 2022 for the

Grove City Council Meeting on August 30, 2022, and on September 6, 2022 for the Economic Development Subsidy and Dispositio n and Development Agreement with Newage Garden Grove II LLC.

The Kam Sang Company, managing member of the Developer, owns and manages over one billio n dollars in assets, and has developed and acquired significan t retail and hospitality projects includin g major hotel brands, such as Marriott, Sheraton, Embassy Suites, Starwood, and Hilton.

Kam Sang's recent developments include: Garden Grove Brookhurst Triangle Phase I, acquisitio n of the Puente Hills Mall in the City of Industry, and construction of the Ritz Carlton in Rancho Mirage. The Developer has selected Nickelodeo n as the preferred hotel brand for the Site, and has finalized brand standards for the development, the amenities, and the attractions. The Nickelodeo n brand is iconic and its programming is aimed at children and adolescents ages 8-17. Nickelodeo n programming consists of original first-run television series, along with occasional broadcasts of released and original made-for-cable movies. The development will benefit from the marketing power of the Nickelodeo n name which reaches 500 millio n households.

DISCUSSIO N
Proposed Project Development Scope - The Developer is proposing to construct a full-service Nickelodeon hotel or an equivalent AAA Four-Diamond resort hotel with hotel program entertainment/pool deck (height of approximately 61 feet) on a 3.72-acre site (Proposed Project). The Proposed Project would include 500 guest suites with balconies; a themed pool experience with a lazy river; an event space that includes a 600-person maximum occupancy theater; a grand ballroom at 9,490 square feet; two meeting rooms at 4,194 square feet and 4,031 square feet; a variety of food and beverage opportunities to be placed throughout the hotel totaling a maximum area of 22,296 square feet; themed amenities totaling 13,238 square feet; a 7,000-square foot arcade; and a spa and fitness center at 8,532 square feet.

The Proposed Project will include specific entertainment amenities unique to the Nickelodeo n Hotel Resort, includin g a Nick Studio, a Studio Hall, a Kid’s Lounge, and The Odeon, a fine dining restaurant. The Proposed Project will include a pool deck area that will be themed to the Nickelodeo n animated characters, and will feature a pool, a lazy river that traverses along the pool deck, and a pool slide. The Proposed Project includes a total of 23 stories with the main hotel tower at a height of 335 feet. The hotel tower will feature a unique serpentine shape with a transparent glass facade. The Proposed Project will also provide a total of 528 parking spaces within a five-level parking structure (four levels above-grade and one level below-grade). Californi a Environmental Quality Act Compliance (CEQA ) The Developer has processed approval of a Planned Unit Development (PUD ) and Site Plan to authorize the construction of the Proposed Project. The build-ou t of the Site will be based on the submitted concept plan and environmental document that is the basis for setting the development standards for the Proposed Project.

The Proposed Project was reviewed and an Initial Study and Mitigated Negative Declaration (IS/MND ) was prepared pursuant to the Californi a Environmental Quality Act (CEQA) , Public Resources Code Section 21000 et seq. and the CEQA Guideline s (Californi a Code of Regulations, Title 14, Sections 15000 et seq.). Based on the Initial Study and supporting technical analyses, it was determined that all potentially significan t impacts can be mitigated to a level of less than significance . A copy of the Initial

p g g py
Study/Mitigated Negative Declaration is available for review at www.ggcity.org/planning/environmental-documents . The 20-day public comment period on the IS/MN D occurred from June 9, 2022 to June 28, 2022. Comment letters were received on the environmental analysis, and the City has prepared responses to each of the comment letters which are incorporated into the Final IS/MN D and are attached to this report and available for review at the above referenced webpage.

At the August 23, 2022, City Council meeting, the followin g actions were taken: Adoption of Resolution No. 9767-22 denying the appeal of PUD-141-01(A) , Site Plan No. SP-107-2022, and Street Vacation No. SV-002-2022; adoption of Resolution No. 9768-22 adopting a Mitigated Negative Declaration and Mitigation Monitorin g and Reporting Program for the Project; introduction and first reading of Ordinance No. 2938 approving an amendment to Planned Unit Development No. PUD-141-0 1 to create a sub- area, PUD-141-01(A) , establishing development standards and performance standards for the Project; and adoption of Resolution No. 9769-22 approving Site Plan No. SP- 107-2022 to facilitate development of the Project.

Proposed Dispositio n and Development Agreement (DDA ) - Provided below are the salient points of the DDA :

1. The Developer will acquire the Agency Property pursuant to the Agency DDA .

2. The Developer will acquire the City Property for the purchase price of $920,000.

3. The Developer will construct and operate a AAA Four Diamond Hotel (the "Conformin g Hotel," as defined in the DDA ) on the Site.

4. The costs to develop the Conforming Hotel will meet or exceed the minimum requirements of $250,000 per key for shell costs and $45,000 per key for FF&E costs.

5. Subject to the Developer fulfillin g its obligation s under the DDA includin g without limitation, the construction and operation of a Conforming Hotel, the DDA provides for Covenant Consideration payments to the Developer in an amount equal to sixty percent (60%) of the Transient Occupancy Tax ("TOT" ) collected and remitted to the City during the 30-year Operating Period based on the applicable TOT rate with respect to the Proposed Project, up to a maximum amount of Ninety-Three Millio n Dollars ($93,000,000).

6. The DDA includes, indemnity and insurance provisions , and other provision s customary to comprehensive documents for the dispositio n and development of property as entered into by the City from time to time.

7. The Developer shall comply with the Prevailing Wage Statutes, use not less than 60% for union labor, and provide a preference for local workers. 2021 Economic Development Strategic Plan - The Proposed Project is in alignment with the City’s 2021 Economic Development Strategic Plan including:

Goal 1: Promote Community based Development that attract businesses and complements the culturally diverse character of Garden Grove including attracting national/international hospitality and commercial investment.

Goal 2: Leverage financial tools available through the Federal, State, and County levels and explore creative incentive financing as an alternative method for project financing to attract new quality investments including utilizing Ab 562 as economic subsidy to entice business.

Goal 3: Develop methods and strategies to expand and enhance the City’s tax revenue base that will ensure a high level of service to its residents and business owners by support major tax generating uses so the economy grows in a healthy and solid direction.

G l 4: T h G Di t i ti j i d l t i f t h Cit f

Goal 4: The Grove District is a major economic development engine for the City of Garden Grove revenue. New hotel developments in the Grove District area collectively represent a source of significant new revenue and employment generator for the city.

FINANCIA L IMPAC T
The completion of the Proposed Project will provide for significan t revenue and job creation to the City. City revenues will be achieved through property tax, transient occupancy tax, and sales tax generated from Proposed Project activity and operations.

An Economic Development Report & Analysis was prepared by the City's consultant, Tierra West Advisors pursuant to Government Code Sections 53083 and 52201.

The estimated net project revenue to the City generated at year 3 is estimated to be approximately $3.5 Million . The financial impact to the city is expected to generate approximately $236.4 millio n in City net tax revenue over 30 years. The breakdown of these revenues includes; $166.4 millio n (70.4%) is TOT, $7.8 millio n (3.3%) is property tax, and $62.1 millio n (26.3%) is sales tax. (See Tierra West Report Attachment No. 3).

Over a 30-year period, the Proposed Project is projected to have a financial impact within the City and region in excess of $3.75 billio n dollars. Benefits attributable to the Proposed Project will include jobs created and revenues generated from project hotel stays, retail sales, spin off of jobs, and tourism expenditures for services such as dining, fuel, attractions, and other visitor demands. The Development is expected to create and support over 2,800 jobs, many of which will be local. Project construction is estimated to exceed $277 millio n dollars. The Proposed Project is expected to create approximately 1,000 jobs through construction and permanent full time equivalent positions . In addition to the direct jobs created by the Proposed Project, indirect and induced jobs generated for the community, area, and region are expected to support another 1,800 jobs.

The Economic Development Report concluded the Proposed Project will provide a significan t financial revenue generator and job creation for the City including :

During the term of the DDA , the City is anticipated to receive over $236.4 millio n net in related tax revenues from TOT, Sales, and Property Taxes.

During this period the Project will provide 1,000 new jobs through construction and direct jobs at the Resort.

Indirect and induced jobs as a result of the Proposed Project is anticipated to exceed 1,800 jobs in the region.

The City is receiving the fair reuse value for the land involved in the transaction due to the gap in development and operational costs.

The public assistance provided through the DDA is appropriate for this project and consistent with public agencies and hotel developments.

The Proposed Project will generate increased property taxes when compared to the year prior to acquisitio n of the Property by the City, thereby vastly exceeding the 15% threshold identified as a measure of “economic opportunity” in Government Code 52200.2(b). The City has concluded that the Proposed Project would serve as a continued catalyst for the City’s Tourism Corridor and provide a significan t net positive financial impact on the entire local economy.

RECOMMENDATIO N

It is recommended that the City Council :

Conduct a Public Hearing;
Adopt a Resolution approving the Dispositio n and Development Agreement between the City and Newage Garden Grove II, LLC.; and
Authorize the City Manager to execute the Dispositio n and Development Agreement, includin g any pertinent related documents, and make minor modification s as needed.

By: Greg Blodgett, Divisio n Manager
ATTACHMENTS:

Description Upload Type File NameDate
Attachment Resolution_of_City_of_Garden_Grove_ -1 - 9/2/202 2 Resolution _Disposition_and_Development_Agreement_with_Newage_Garden_Grove_II_LLC.pd fResolution Attachment
2 -
Disposition
a
nd
Development
A
greement 9/2/2022 Agreement Disposition_and_Development_Agreement_with_Newage_Garden_Grove_II_LLC.pdfbetween the City and
Newage
Ga
rden
Grove II,
LLC
Attachment
3 - Tierra
West Report
9/6/2022 Backup
M
aterial
Tierra_West_Report_ -
Economic_Development_Report___Analysis_Nickelodeon_Resort_Hotel.pd f Attachment
4 - Public
Hearing
N
otice and
9/6/2022 Notice 9-13-22_Affidavit__for_Subsidy_and_DDA_without_costs.pd f Affidavit

RESOLUTION NO. __________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GARDEN

GROVE, CALIFORNIA, APPROVING A DISPOSITION AND

DEVELOPMENT AGREEMENT BY AND BETWEEN THE CITY OF

GARDEN GROVE AND NEWAGE GARDEN GROVE II LLC, A
CALIFORNIA LIMITED LIABILITY COMPANY; AUTHORIZING THE

CITY MANAGER TO EXECUTE SUCH DISPOSITION AND
DEVELOPMENT AGREEMENT; AUTHORIZING THE CITY MANAGER

TO IMPLEMENT SUCH DISPOSITION AND DEVELOPMENT
AGREEMENT; AND MAKING CERTAIN OTHER FINDINGS IN

CONNECTION THEREWITH
WHEREAS, the City of Garden Grove (the “City”) is a California municipal corporation; WHEREAS, the City Council (“City Council”) for the City is authorized and empowered pursuant to the laws of the State of California to enter into agreements for the acquisition, disposition and development of real property, and to make and execute contracts and other instruments necessary or convenient to exercise its powers; WHEREAS, the City is the owner of certain real property containing approximately 1.5 acres (the “City Property”). The Successor Agency to the Garden Grove Agency for Economic Development (“Successor Agency”) is the owner of an approximatel y 2.25 acre parcel (the “Agency Property”), which is being acquired by the Developer by separate agreement; WHEREAS, the Developer has proposed to the City that Developer and City enter into a an agreement entitled “Disposition and Development Agreement” substantiall y in the form submitted herewith (the “DDA”);
WHEREAS, under the DDA, subject to satisfaction of conditions precedent set forth therein, Developer would acquire the City Property and develop on the City Property and the Agency Property a Conforming Hotel, as defined in the DDA. The DDA also includes the purchase price, indemnity and insurance provisions, and other provisions customary to comprehensive documents for the disposition and development of property as entered into by the City from time to time;
WHEREAS, pursuant to and in accordance with the provisions of the California Environmental Quality Act (Public Resources Code Section 21000 et seq.; herein referred to as “CEQA”), and the State of California Guidelines for the Implementation of the California Environmental Quality Act (commencing with Section 15000 of Title 14 of the California Code of Regulations; herein referred to as the "CEQA Guidelines"), the City is the "lead agency" for the preparation and consideration of environmental documents for the Proposed Project; WHEREAS, in conformance with CEQA and the CEQA Guidelines, on August 23, 2022, the City Council adopted Resolution No. 9768-22 approving a Mitigated Negative Declaration and Mitigation Monitoring Program, which evaluates and analyses the anticipated physical 4880-4469-4831v2/022046-0046 Page 337 of 640

Garden Grove City Council
Resolution No.

environmental impacts of the Proposed Project and provides for specified mitigation measures.

The Mitigated Negative Declaration and Mitigation Monitoring Program is available for review on the City's website at https://ggcity.org/planning/evironmental-documents. A complete copy of the Mitigated Negative Declaration and Mitigation Monitoring Program is on file and can be viewed in the Planning and Building Department of the City located at 11222 Acacia Pkwy, Garden Grove, CA 92840;
WHEREAS, in accordance with California Government Code Section 52201, the City held a noticed public hearing regarding the DDA;
WHEREAS, the City prepared a report summarizing the details of the DDA in accordance with Section 52201 of the California Government Code (the “Report”) and made such Report available for public inspection prior to the public hearing on the DDA; WHEREAS, the City has duly considered all terms and conditions of the presently drafted DDA and has determined that the DDA is in the vital and best interest of the City and the health, safety, morals and welfare of its residents, and in accord with the goals, objectives and public purposes and provisions of applicable state and local laws.

NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE CITY OF GARDEN GROVE AS FOLLOWS:

Section 1. The City Council hereby finds and determines that the foregoing recitals are true and correct and are a substantive part of this Resolution.

Section 2. The City Council hereby finds and determines, based on all documentation, testimony and other evidence in the record before it, that (a) the proposed sale and development of the City Property, and the development of the Agency Project, will assist in the creation of economic opportunity, as defined in California Government Code Section 52200.2; and (b) the consideration being paid to the City for the City Project is not less than the fair re-use value of at the use and with the covenants and development costs authorized by the sale pursuant to the DDA.

Section 3. The City Council hereby finds that the DDA will result in an increase of at least 15% of total property tax resulting from the Conforming Hotel at full implementation when compared to the year prior to the City Property being acquired by the City.

Section 4. The City Council hereby finds that the Mitigated Negative Declaration and Mitigation Monitoring Program prepared for the Proposed Project, serves as the appropriate environmental documentation for the DDA.

Section 5. The City Council hereby approves the DDA, with such changes as may be mutually agreed upon by the Developer, the City Attorney and the City Manager (the “City Manager”) (or his duly authorized representative), respectively, as are minor and in substantial conformance with the form of the DDA submitted herewith. The City Manager and the City Clerk 4880-4469-4831v2/022046-0046 Page 338 of 640

Garden Grove City Council
Resolution No.

are hereby authorized to execute and attest the DDA, including any related attachments, on behalf of City. In such regard, the City Manager (or his duly authorized representative) is authorized to sign the final version of the DDA after completion of any such non-substantive, minor revisions.

Copies of the final form of the DDA, when duly executed and attested, shall be placed on file in the office of the City Clerk. Further, the City Manager (or his duly authorized representative) is authorized to implement the DDA and take all further actions and execute all documents referenced therein and/or necessary and appropriate to carry out the transaction contemplated by the DDA, including all exhibits thereto. The City Manager (or his duly authorized representative) is hereby authorized to the extent necessary during the implementation of the DDA to make technical or minor changes and interpretations of the DDA after execution, as necessary to properly implement and carry out the DDA, including all exhibits thereto, provided any and all such changes shall not in any manner materially affect the rights and obligations of the City under the DDA.

Section 6. In addition to the authorization of Section 5 above, the City Manager is hereby authorized, on behalf of the City, to sign all other documents necessary or appropriate to carry out and implement the DDA, including all exhibits thereto and including causing the issuance of warrants in implementation th ereto, and to administer the City’s obligations, responsibilities and duties to be performed under the DDA, including all exhibits thereto.

Section 7. The City Clerk shall certify to the adoption of this Resolution. 4880-4469-4831v2/022046-0046 Page 339 of 640

____________________________________
Garden Grove City Council
Resolution No.

THE FOREGOING RESOLUTION is approved and adopted by the City Council of the City of Garden Grove this _______ day of _____________, 2022, by the following roll call vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

CITY OF GARDEN GROVE
By: ________________________________

MAYOR OF THE CITY OF GARDEN
GROVE
ATTEST:

CITY CLERK OF THE CITY OF GARDEN GROVE
137764/LM
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_______________________________________
Garden Grove City Council
Resolution No.

CLERK’S CERTIFICATE

STATE OF CALIFORNIA )
COUNTY OF ORANGE ) ss

CITY OF GARDEN GROVE )
I, __________________________, City Clerk of the City of Garden Grove, do hereby certify that the foregoing is the original Resolution No. __________ adopted at a regular meeting provided by law, of the Garden Grove City Council held on the ______ day of _______, 2022 by the following vote of the members thereof:

AYES:

NOES:

ABSTAIN:

ABSENT:

IN WITNESS WHEREOF, I have hereunto set my hand this _____ day of ________, 2020.

CITY CLERK OF THE CITY OF GARDEN GROVE
(SEAL)
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DISPOSITION AND DEVELOPMENT AGREEMENT
By and Between

THE CITY OF GARDEN GROVE
and

NEWAGE GARDEN GROVE II LLC
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Table of Contents
Page
100. DEFINITIONS .......................................................................................................................... 1 200. ACQUISITION AND CONVEYANCE ................................................................................... 9 201. Conveyance of City Property and Agency Property..................................................... 9 202. Review of Title ........................................................................................................... 12 203. Title Insurance ............................................................................................................ 12 204. Conditions of Closing ................................................................................................. 13 205. Representations and Warranties.................................................................................. 15 206. Studies and Reports; Right of Entry ........................................................................... 16 207. Property Condition; Release of City as to City Property ............................................ 17 208. Post Closing Conditions and Obligations ................................................................... 18 300. DEVELOPMENT OF THE SITE ........................................................................................... 19 301. Scope of Development................................................................................................ 19 302. Design Review ............................................................................................................ 20 303. Land Use Approvals ................................................................................................... 21 304. Schedule of Performance ............................................................................................ 21 305. Cost of Construction ................................................................................................... 22 306. Insurance Requirements.............................................................................................. 22 307. Indemnification ........................................................................................................... 22 308. Rights of Access ......................................................................................................... 23 309. Financing of the Conforming Hotel............................................................................ 23 310. Release of Construction Covenants ............................................................................ 25 311. Compliance With Laws............................................................................................... 26 312. Taxes and Assessments............................................................................................... 26 313. Construction Contract ................................................................................................. 26 400. COVENANTS AND RESTRICTIONS .................................................................................. 26 401. Uses and Operation ..................................................................................................... 26 402. Nondiscrimination Covenants..................................................................................... 27 403. Nondiscrimination in Employment............................................................................. 27 404. Maintenance of the Site .............................................................................................. 28 405. Retail Users................................................................................................................. 28 406. Conforming Hotel Operators, Conforming Hotel Operating Agreement and Conforming Hotel Franchise Agreement.................................................................... 28 407. Compliance With Laws............................................................................................... 28 408. Term of Covenants...................................................................................................... 28 409. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction........................................................................................ 29 500. COVENANT CONSIDERATION.......................................................................................... 29 501. Confirmation that the Conforming Hotel has been Constructed and is Operating in Accordance with this Agreement........................................................... 29 502. Covenant Consideration for the Conforming Hotel.................................................... 29 503. Covenant Consideration Period .................................................................................. 29 504. No Pledge.................................................................................................................... 29 505. City Disbursement Conditions.................................................................................... 30 600. DEFAULTS, REMEDIES AND TERMINATION ................................................................ 30 601. Defaults....................................................................................................................... 30 602. Right to Cure Following a Breach/Default ................................................................. 30 i
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Table of Contents
(continued)
Page
603. Notice of Breach ......................................................................................................... 30 604. Waiver of Breach or Default....................................................................................... 31 605. Legal Actions and Remedies....................................................................................... 31 606. Termination by Developer .......................................................................................... 31 607. Termination by City.................................................................................................... 32 608. Acceptance of Service of Process ............................................................................... 32 609. Rights and Remedies Are Cumulative........................................................................ 33 610. Inaction Not a Waiver of Default................................................................................ 33 611. Attorneys’ Fees ........................................................................................................... 33 700. MISCELLANEOUS................................................................................................................ 33 701. Notices, Demands and Communications Between the Parties ................................... 33 702. Enforced Delay; Extension of Times of Performance ................................................ 34 703. Transfers of Interest .................................................................................................... 34 704. Applicable Law........................................................................................................... 36 705. Police Power ............................................................................................................... 36 706. Non-Liability of Officials and Employees of City...................................................... 36 707. Relationship Between City and Developer ................................................................. 36 708. City Approvals and Actions........................................................................................ 37 709. Counterparts................................................................................................................ 37 710. Integration ................................................................................................................... 37 711. Real Estate Brokerage Commission............................................................................ 37 712. Titles and Captions ..................................................................................................... 37 713. Interpretation............................................................................................................... 37 714. No Waiver................................................................................................................... 37 715. Modifications .............................................................................................................. 38 716. Severability ................................................................................................................. 38 717. Computation of Time.................................................................................................. 38 718. Legal Advice............................................................................................................... 38 719. Time of Essence.......................................................................................................... 38 720. Cooperation................................................................................................................. 38 721. Conflicts of Interest..................................................................................................... 38 722. Time for Acceptance of Agreement by City............................................................... 38 ii
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Table of Contents
(continued)

EXHIBITS
Exhibit A Site Map
Exhibit B Legal Description
Exhibit C Grant Deed
Exhibit D Declaration of Conditions, Covenants and Restrictions Exhibit E Preliminary Capital Cost Budget
Exhibit F Release of Construction Covenants
Exhibit G Schedule of Performance
Exhibit H Right of Entry Agreement
Exhibit I Scope of Development
Exhibit J Minimum Development Standards
Exhibit K Guaranty
Exhibit L Conceptual Site Plan
Exhibit M List of AAA Four Diamond Hotels
Exhibit N Local Residents/Hiring Preference
iv
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DISPOSITION AND DEVELOPMENT AGREEMENT
THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this “Agreement”) dated for purposes of identification only as of _________________, 20___ (the “Date of Agreement”), is entered into by and between the CITY OF GARDEN GROVE , a municipal corporation duly organized and existing under the Constitution and laws of the State of California (“City”, or “Successor Agency”), and NEWAGE GARDEN GROVE II LLC, a California limited liability company (the “Developer”) (individually a “party” and collectively, “Parties”).

R E C I T A L S
A. Palm Court Lodging, LLC, a California limited liability company (“Palm Court”) and the Garden Grove Agency for Community Development (the “Former Agency”, now succeeded by the Successor Agency”) entered into that certain Disposition and Development Agreement by and between the Former Agency and Palm Court dated as of June 26, 2001 (the “Agency DDA”). Under the Agency DDA, Palm Court was to acquire certain real property from the Former Agency and develop two hotels.

Although one hotel was built, the disposition of the remaining property for and development of a second hotel (the “Agency Property ”), has not occurred. Under that certain Assignment and Assumption Agreemen t dated Apri l 27, 2004 (“Assignment”) incorporated herein by reference, Developer is the assignee of Palm Court with regard to the acquisition of land and development of the second hotel on the Agency Property under the Agency DDA.

B. Developer has proposed an approximately 500 room Nickelodeon Hotel & Resort (including a maximum of 22,296 square feet of leasable area of high-quality restaurants and 5,480 square feet gross leasable area of high -quality retail), and of equal or greater ( i) quality of exterior construction and Furniture, Fixtures, and Equipment, (i i) quality and scope of amenities, and (iii) service level, as that found in the Nickelodeon Hotel & Resort located in Punta Cana, Dominican Republic or, as an alternative to a Nickelodeon Hotel & Resort, a resort hotel, which is, at a minimum, a AAA Four Diamond Hotel, and in either case, the construction and operating scope and quality shall be not less than the Minimum Development Standards (as defined below) and construction costs shall be not less than the Minimum Construction Costs (as defined below), (such hotel hereafter, the “Conforming ”) to be constructed, opened and operated on the Agency Property and additional, real property owned by the City and conveyed hereunder by the City to the Developer (the “City Property”), The Agency Property and City Property are collectively referred to herein a s the “Site” as shown on the Site Map attached hereto as Exhibit A and described in the Legal Description attached hereto as Exhibit B.

C. The Parties now intend to enter into th is Agreement pursuant to which, following Developer’s acquisition of the Site, Developer will construct and operate the Conforming Hotel on the Site through the implementation of both the Agency DDA and this Agreement.

NOW, THEREFORE, in consideration of the mutual covenants and undertakings set forth herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Developer hereby agree as follows:
100. DEFINITIONS
“AAA Fou r Diamond Hotel ” means a Hotel(s) which provides the physical features and operational services which meet or exceed the rating criteria established by the American Automobile 4828-8136-9456v32/022046-0046 Page 346 of 640

Association (“AAA”) for AAA Four Diamond Hotels or higher. By way of guidance, the Minimum Development Standards for AAA Four Diamond Hotels, which traditionally qualify for AAA Four Diamond Hotel status are shown in Exhibit J.
“AAA Four Diamond Requirements” means those requirements for a AAA Four Diamond Hotel rating as described listed in the definition of AAA Four Diamond Hotel. “Actual Knowledge” is defined in Section 205.1 (e) hereof. “Affiliate” means any Person directly controlling, controlled by or under common control with another Person, which, in the case of a limited liability company, shall include each of the managing members thereof. T he term “control”, as used in the immediately preceding sentence, means the possession directly or indirectly, of the power to direct or cause the direction of the management or policies of the controlled Person.
“Agency Assistance Payments” means the amounts payable by the City to the Developer under Section 311.7 of the Agency DDA, as modified by the Assignment, with a remaining total balance of $2,750,000.
“Agency Property” is defined in Recital A.
“Agreement” means this Disposition and Development Agreement between City and Developer.
“Applicable Transient Occupancy Tax Rate” means the lesser of the current rate of Transient Occupancy Tax, as applicable from time to time, or fourteen and one-half percent (14.5%). The Applicable Transient Occupancy Tax Rate shall apply for the calculation of any and all Covenant Consideration without regard to any increases, at any time, in the rate of the Transient Occupancy Tax. “Brand” means the entity whose Flag is used to identify the Conforming Hotel. A list of typical AAA Four Diamond brands is attached hereto as Exhibit M and incorporated herein by reference.
“Breach” is defined in Section 601.
“Building Permits” shall mean building permits issued by the City in accordance with the Uniform Building Code and all other permits required by any governmental entity as a condition to the construction of the Conforming Hotel.
“Capital Cost Budget” is defined in Section 301.1 hereof. “CEQA” means the California Environmental Quality Act.
“City” means the City of Garden Grove, California.
“City Entities” is defined in Section 705.
“City Disbursement Conditions” is defined in Section 505. “City Manager” means the City Manager of the City or his/her designee. 2 4828-8136-9456v32/022046-0046 Page 347 of 640

“City Property” is shown on the Site Map as the “City Property” and described in the Legal Description.
“City Rules and Powers” is defined in Section 705.
“City’s Condition(s) Precedent” means the condition(s) precedent to the Closing to the benefit of City, as set forth in Section 204.1 hereof.
“Closing” or “Close” or “Close of Escrow” is defined in Section 201.8 hereof. “Closing Date” is defined in Section 201.8 hereof.
“Commenced construction” or “commencement of construction” means the commencement of vertical construction of for the Conforming Hotel.
“Complete” or “Completion” means the last to occur of (i) completion of construction of the Conforming Hotel in substantial compliance with this Agreement, (ii) issuance of a final certificate of occupancy by the City with respect to the Conforming Hotel, or (iii) the opening of all guestrooms and facilities for use and occupancy by the general public. “Conceptual Site Plan” means the Site Plan attached hereto as Exhibit L and incorporated by reference depicting the Conforming Hotel.
“Condition of Title” is defined in Section 202(b) hereof. “Conforming Hotel” is defined in Recital B.
“Conforming Hotel Franchise Agreement” means an agreement between the Developer and the Brand authorizing the Developer to construct and operate a particular Flag. “Conforming Hote l Operating Agreement ” means the operating agreement between the Developer and the Hotel Operator.
“Construction Contract(s)” means all contract(s) between Contractor and Developer pursuant to which the Constructor is obligated to construct the Conforming Hotel. “Construction Financing” means debt and/or equity necessary to fund construction of the Conforming Hotel in accordance with the Capital Cost Budget. “Contractor” means the general contractor engaged by the Developer to construct the Conforming Hotel pursuant to the Construction Contract(s). “Conveyance” means the conveyance of the City Property to the Developer. “County” means the County of Orange, California.
“Covenant Consideration” is defined in Section 502.
“Covenant Consideration Period” is defined in Section 503. 3 4828-8136-9456v32/022046-0046 Page 348 of 640

“CPI” means the Consumer Price Index-All Urban Consumers for the Los Angeles-Orange- Riverside County Average, Subgroup “All Items” (1982-1984 = 100) as established by the Bureau of Labor Statistics of the U.S. Department of Labor.
“Date of Agreement” means the date in the first paragraph hereof, which shall be the date on which the City Council approves this Agreement.
“Declaration” means the Declaration of Covenants, Conditions and Restrictions, substantially in the form of Exhibit D attached hereto and incorporated herein. “Default(s)” is defined in Section 601.
“Design and Specifications” is defined in Section 301.1 hereof. “Design Development Drawings” means those plans and drawings to be submitted to City for its approval, pursuant to Section 302.1 hereof.
“Developer” means Newage Garden Grove II LLC, a California limited liability company, and its permitted successors and assigns.
“Developer’s Conditions Precedent” means the conditions precedent to the Closing to the benefit of Developer, as set forth in Section 204.2.
“Development Agreement” means that certain statutory Development Agreement entered into concurrently herewith between City and Developer pursuant to Governmental Code Section 65814. “Eligible Expenses” means those costs on which federal funds may be expended. “Escrow” is defined in Section 201.3 hereof.
“Escrow Agent” is defined in Section 201.3 hereof.
“Exceptions” is defined in Section 202 hereof.
“Final Map” means a final subdivision map, parcel map, or lot line adjustment, as applicable, prepared in accordance with the California Subdivision Map Act and shall include, at a minimum, grading, drainage and water quality plans.
“Final Site Plan” is defined in Section 301.1.
“Fiscal Year” means a year beginning on July 1 and ending the following June 30. “Flag” means the distinctive name of the Conforming Hotel that, by virtue of its distinctive name, is identified by specific physical and operational features so that guests are assured that they will receive a specified level of service and amenities wherever the property is located. “Force Majeure Delay” means delays caused by third party litigation (whether or not a temporary restraining order, preliminary injunction, or other similar equitable relief has been granted), delays caused by actions or omissions of City or any public or governmental entity (provided that the acts of, or failure to act by, City shall not excuse performance by City), delays caused by the time taken 4 4828-8136-9456v32/022046-0046 Page 349 of 640

to remediate Hazardous Materials located upon the Site, delays caused by the acts or omissions of any contractor or subcontractor, strikes, lockouts, or labor disruption, any governmental entity actions (including, but not limited to, any stop-work orders, reduction in hours of operation or capacity, quarantine or other employee restrictions, or similar requirements) resulting from a pandemic, freight embargoes, the unavailability of materials or supplies, unusually inclement weather, fires, floods, earthquakes, or other casualty losses or supernatural causes, war, insurrection, riots, acts of terrorism or the public enemy, epidemics, and/or quarantine restrictions. A Force Majeure Delay shall extend only for the period that any such circumstance continues to exist. “Furniture, Fixtures and Equipment” means movable furniture, fixtures or other equipment that have no permanent connection to the structure of a building or utilities within the Conforming Hotel, as well as operational supplies. More specifically, furniture, fixtures and/or equipment would include decorative items, case goods (including headboards, bureaus, chairs, desks, and other room furniture), soft goods (including wall coverings, floor coverings, window treatments, carpeting, bedspreads, lamps, artwork, pictures, wall decorations, upholstery, textile, fabric, and vinyl items).

Operating supplies and equipment (including towels, bed linen, crockery and glassware, irons, hairdryers, uniforms, office equipment and cleaning equipment), mirrors, lighting, safes, refrigerators, televisions and coffee makers. Furniture, Fixtures and Equipment shall also include, for purposes of “Furniture, Fixtures and Equipment Costs,” taxes, freight, warehous e expense, installation fee s and purchasing agent fees.
“Furniture, Fixtures and Equipment Costs” or “FF&E Costs” means the actual and direct third-party costs of all Furniture, Fixtures and Equipment. For the purpose of determining Minimum FF&E Costs (as initially set in Section 301.1, below), for each successive calendar year after the Closing Date, the Minimum FF&E Costs shall be adjusted annually, using a starting 2022 baseline of the CPI in effect in the month of the Closing Date. The first adjustment shall be on January 1, 2023 to reflect any increase in the CPI between the month of the Closing Date and December, 2022. Each successive annual adjustment shall be on January 1 of each year to reflect any increase in CPI between January and December of the immediately preceding year. “Governmental Requirements” means all applicable laws, ordinances, statutes, codes, rules, regulations, orders and decrees of the United States, the State, the County, the City, or any other political subdivision in which the Site is located, and of any other political subdivision, agency or instrumentality exercising jurisdiction over the City, the Owner or the Site, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City’s Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation, all governmental requirements applicable to public works, including without limitation the payment of prevailing wages in compliance with Labor Code Section 1770, et seq., keeping of all records required pursuant to Labor Code Section 1776, complying with the maximum hours requirements of Labor Code Sections 1810 through 1815, and complying with all regulations and statutory requirements pertaining thereto (“Public Works Statutes”), the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Sections 51, et seq.
“Guaranty” means the guaranty of Kam Sang as to the Developer’s obligations under Section 208 in the form attached hereto Exhibit K and incorporated herein by reference. 5 4828-8136-9456v32/022046-0046 Page 350 of 640

“Grant Deed” means either the grant deed for the Conveyance of the City Property to Developer, in substantially the form of Exhibit C attached hereto and incorporated herein. “Hazardous Materials” means any substance, material or waste which is or becomes, prior to the Closing, regulated by any local governmental authority, the State of California or the United States Government, including, but not limited to, any material or substance which is (i) defined as a “hazardous waste,” “acutely hazardouswaste,” “extremely hazardouswaste,” or “restricted hazardous waste” under Section 25115, 25117 or 25122.7, or listed pursuant to Section 25140 of the California Health and Safety Code, Division 20, Chapter 6.5 (Hazardous Waste Control Law)), (ii) defined as a “hazardous substance” under Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) defined as a “hazardous material,” “hazardous substance,” or “hazardous waste” under Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) defined as a “hazardous substance” under Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) petroleum, (vi) friable asbestos, (vii) polychlorinated biphenyls, (viii) listed under Article 9 or defined as “hazardous” or “extremely hazardous” pursuant to Article 11 of Title 22 of the California Code of Regulations, Chapter 20, (ix) designated as “hazardous substances” pursuant to Section 311 of the Clean Water Act (33 U.S.C. §1317), (x) defined as a “hazardous waste” pursuant to Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903), (xi) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §9601 et seq. (42 U.S.C. Section 9601), (xii) Methyl-Tertiary Butyl Ether, or (xiii) any other substance, whether in the form of a solid, liquid, gas or any other form whatsoever, which by any Governmental Requirements either requires special handling in its use, transportation, generation, collection, storage, handling, treatment or disposal. “Hotel Operator” means the franchisee, manager, lessee, or licensee with whom the Developer has a contract to operate the Conforming Hotel pursuant to a franchise, management, lease, or license arrangement.
“Hotel Operating Agreement ” means the Agreement between the Hotel Operator and the Developer governing the operation of the Conforming Hotel. “Kam Sang Company, Inc” or “Kam Sang” is a California Corporation and is the managing member of Developer.
“Land Use Approvals” is defined in Section 303.
“Legal Description” means the description of the Agency Property and City Property which is attached hereto as Exhibit B and incorporated herein by reference. “Local Residents” is described in Section 407 relating to hiring preferences and is defined in Exhibit N attached hereto and incorporated herein by reference. “Losses and Liabilities” as used herein shall mean and include all claims, causes of action, liabilities, losses, damages (including, without limitation, penalties, fines and monetary sanctions), injuries, expenses, charges, penalties or costs of whatsoever character, nature and kind, including reasonable attorney’s fees and costs incurred by the indemnified party with respect to counsel of its
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choice, whether to property or to person, whether by direct or derivative action, and whether known or unknown, suspected or unsuspected, latent or patent.
“Minimum Construction Costs” means the sum of the Minimum FF&E Costs and the Minimum Shell Costs.
“Minimum Development Standards” are shown in Exhibit J attached hereto and incorporated herein by reference.
“Minimum FF&E Costs” is defined in Section 301.1.
“Minimum Shell Costs” is defined in Section 301.1.
“Notice” means a notice in the form prescribed by Section 701 hereof. “Notice of Breach” is defined in Section 603.
“Open(s)(ing)(ed) for Business” or “Opening” means the day on which the Conforming Hotel opens for business to the general public.
“Operating Period” is the period commencing on the Opening of the Conforming Hotel and terminating on the thirtieth (30th) anniversary date of the Opening. “Outside Closing Date” is defined in Section 201.8.
“Preliminary Capital Cost Budget” means that certain capital cost budget attached hereto as Exhibit E, as further described in Section 301.1 hereof. “Prevailing Wage Statutes” means Labor Code Section 1720, et seq. and applicable federal prevailing wage laws.
“Property Condition” is defined in Section 207.1.
“Purchase Price” means the Purchase Price for the City Property as defined in Section 201.2. “Records” means all books and records of the Developer and its contractors to the extent necessary to confirm construction costs.
“Release of Construction Covenants” is defined in Section 310 hereof and means that certain Release of Construction Covenants substantially in the form of Exhibit F attached hereto. “Report” is defined in Section 202 hereof.
“Right of Entr y Agreement” is attached hereto as Exhibit H and incorporated herein by reference.
“Schematic Design” means a basic layout of locations of all building code elements, such as the heating/ventilation/air conditioning (HVAC), plumbing, and electrical systems, equivalent to approximately 25% of completed construction documents.
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“Schedule of Performance” means the schedule for development of the Conforming Hotel attached hereto as Exhibit G and incorporated herein by reference. “Scope of Development” means the scope of development for the Conforming Hotel attached hereto as Exhibit I, and incorporated herein by reference. “Section 208 Escrow Instructions” are defined in Section 208. “Shell Costs” mean actual and direct third -party costs of all materials, labor, and equipment associated with the construction of the Conforming Hotel as determined by the City Manager, acting in his/her sole and absolute discretion. Items excluded from Shell Costs include, without limitation, site costs, parking costs, FF&E Costs, architectural, engineering, permits and fees, legal, accounting, taxes, sale or lease commissions, marketing expenses, initial operating capital and other indirect costs, as well as the developer overhead.
“Site” means the Agency Property and the City Property, as described in Exhibit A. “Site Map” means the map of the Site which is attached hereto as Exhibit A and incorporated herein by reference.
“Substantial Conformity” is defined in Section 301.1.
“Temporary Closure” means a period of time, no longer than reasonably necessary for repairs, reconstruction or resolution, of maintenance issues, Force Majeure Delay notwithstanding, in no event longer than two hundred (200) days.
“Third Party Audit” is defined in Section 501.
“Title Company” is defined in Section 202 hereof.
“Title Policy” is defined in Section 203.1 hereof.
“Transfer” as used herein shall mean and include any direct or indirect conveyance, transfer, sale, assignment, lease, sublease, license, concession, franchise, gift, management agreement, operating agreement, hypothecation, mortgage, pledge, encumbrance, or the like of this Agreement, the Site, the Conforming Hotel and/or ownership and/or control of Developer. “Transferee” shall refer to the person or entity receiving any Transfer.
“Transient Occupancy” means an uninterrupted stay of no more than twenty-nine consecutive calendar days.
“Transient Occupancy Tax” means the transient occupancy tax levied and collected pursuant to Chapter 3.12 of the Garden Grove Municipal Code, as it may be amended from time to time and held in the City’s general fund for unrestricted use. Chapter 3.12 of the Garden Grove Municipal Code, as it may be amended from time to time, is referred to therein and herein as the “Transient Occupancy Tax Code,” provided, that, in no event, shal l an amendment of the Transient Occupancy Tax Code after the Effective Date result in an increase in the Applicable Transient Occupancy Tax Rate for purposes of calculating Covenant Consideration.
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200. ACQUISITION AND CONVEYANCE
201. Conveyance of City Property and Agency Property.
201.1 Conveyance of the Agency Property . The parties anticipate that the Successor Agency will cause the Conveyance of the Agency Property to the Developer pursuant to the Agency DDA concurrently with the Closing hereunder.
201.2 Conveyance of the City Property . Subject to the satisfaction of the Conditions Precedent set forth hereinbelow, on or before the date set forth in the Schedule of Performance, but in no event later than the Outside Date, the City shall cause the Conveyance of the City Property and Developer shall accept Conveyance in accordance with the terms hereof. The purchase price for the City Property shall be Nine Hundred Twenty Thousand Dollars ($920,000) (the “Purchase Price”) payable all cash, at Closing.
201.3 Escrow. Within thirty (30) days of the Date of Agreement, the parties shall open escrows for the Conveyance of the City Property and Agency Property (the “Escrow”) with First American Title Company or another escrow company mutually satisfactory to both parties (the “Escrow Agent”) by depositing a fully executed copy of this Agreement and the Agency DDA with Escrow Agent. Escrow shall establish a separate escrow for the implementation of the Agency DDA which shall be governed by the terms of the Agency DDA and a separate escrow for the City Property which will be governed by the terms of this Agreement.
201.4 Payment of the Purchase Price . Within two (2) days prior to the scheduled Closing Date the Developer shall deposit the Purchase Price, in good and immediately available funds, into Escrow.
201.5 Costs of Escrow. City and Developer shall pay their respective portions of the premium for the Title Policy as provided in Section 203.1 hereof; the City shall pay for the documentary transfer taxes, if any, due with respect to the Conveyance of the City Property, and except in the event the Escrow is earlier cancelled (in which instance the cancellation provisions described below shall apply), Developer and City each shall pay one-half of all other usual fees, charges, and costs which arise from the Escrow.
201.6 Escrow Instructions. This Agreement shall constitute the joint escrow instructions of Developer and City for the Conveyance of the City Property and the Escrow Agent to whom these instructions are delivered is hereby empowered to act under this Agreement. The parties hereto agree to do all acts reasonably necessary to close Escrow within thirty (30) days after the fulfillment and/or waiver of the City’s Conditions Precedent and the Developer’s Condition s Precedent. Insurance policies for fire or casualty are not to be transferred, and City will cancel its own policies after the Closing. All funds received in Escrow shall be deposited with other escrow funds in a separate interest-earning escrow trust account in a bank doing business in the State of California which is acceptable to the Developer and City. All disbursements shall be made by check from such account.

If in the opinion of either party or the Escrow Agent, it is necessary or convenient in order to accomplish the Closing of the Conveyance of the City Property, such party may require that the parties sign supplemental escrow instructions; provided that if there is any inconsistency between this Agreement and the supplemental escrow instructions, then the provisions of this Agreement shall 9 4828-8136-9456v32/022046-0046 Page 354 of 640

control. The supplemental escrow instructions and any amendment of these escrow instructions or the supplemental escrow instructions shall be in writing and shall be signed by both the City and the Developer. At the time of any amendment, the Escrow Agent shall agree to carry out its duties as Escrow Agent under such amendment. All communications from the Escrow Agent to the City or the Developer shall be directed to the addresses and in the manner established in Section 701 of this Agreement for notices, demands and communications between the City and the Developer. The parties agree to execute such other and further documents as may be reasonably necessary, helpful or appropriate to effectuate the provisions of this Agreement. The Closing shall take place when all of the City’s Conditions Precedent and the Developer’s Conditions Precedent to the Closing of the Conveyance of the City Property, as set forth in Section 204, have been satisfied (and/or waived by the appropriate party). Escrow Agent is instructed to releas e City’s escrow closing statements and Developer’s escrow closing statements to the respective parties. 201.7 Authority of Escrow Agent. Escrow Agent is authorized to, and shall:
(a) Pay and charge Developer and City for their respective shares of the premium of the Title Policy as set forth in Section 203.1 and pay and charge each party respectively for any amount agreed to by such party in order to place title to the City Property in the condition necessary to satisfy Section 202 of this Agreement.
(b) Pay and charge Developer and City for their respective shares of any escrow fees, charges, and costs payable under Section 201.5 of this Agreement. (c) Disburse funds, and deliver and record the Grant Deed and the Declaration when all of the Developer’s Conditions Precedent and theCity’s Conditions Precedent to the Closing of the Conveyance have been fulfilled, or waived, in writing, by the party for whose benefit such condition is imposed. Unless the parties mutually direct otherwise, the sales proceeds shall not be disbursed by the Escrow Agent unless and until the Escrow Agent has recorded the Grant Deed for the Agency Property and City Property and the Title Company is irrevocably committed to deliver to the Developer the Title Policy conforming to the requirements of this Agreement. (d) Do such other actions as necessary, including obtaining the Title Policy, to fulfill its obligations under this Agreement. (e) Within the discretion of Escrow Agent, direct City and Developer to execute and deliver any instrument, affidavit, and statement, and to perform any act reasonably necessary to comply with the provisions of FIRPTA and any similar state act and regulation promulgated thereunder. City agrees to execute a Certificate of Non-Foreign Status by individual transferor, a Certification of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act and/or a California Franchise Tax Board Form 590 or similar form to assure Developer that there exists no withholding requirements imposed by application of law as may be required by Escrow Agent, on the forms to be supplied by Escrow Agent. (f) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms including an IRS 1099-S form, if necessary, and be responsible for withholding taxes, if any such forms are provided for or required by law.
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(g) Provide to each party all information which it receives with respect to the condition and acquisition of the City Property.
201.8 Closing. The Conveyance of the City Property shall occur within thirty (30) days of the written satisfaction or written waiver of all of City’s Conditions Precedent and Developer’s Conditions Precedent to Closing of the Conveyance, as set forth in Section 204 hereof, but in no event later than December 31, 2022 (the “Outside Closing Date”). The Closing of the City Property shall occur at a location within Orange County at a time and place reasonably agreed on by the parties. The “Close” or “Closing” of the City Property shall mean the time and day that Escrow Agent (i) holds all documents and funds necessary to effect the Conveyance of the City Property, and (ii) receives written confirmation that all conditions precedent have been satisfied or waived . The “Closing Date” shall mean the day upon which Escrow Agent causes the Grant Deed and any related documents requiring recordation under this Agreement to be recorded by the Orange County Recorder. 201.9 Termination. If Escrow is not in condition to close by the Outside Closing Date, then either party which has fully performed under this Agreement may, in writing, demand the return of money or property and terminate the Escrow. If either party makes a written demand for return of documents or properties, the Escrow shall not terminate until five (5) days after Escrow Agent shall have delivered copies of such demand to the other party at the address shown in this Agreement.

If any objections are raised within said five (5) day period, Escrow Agent is authorized to hold all funds and documents until instructed by a court of competent jurisdiction or by mutual written instructions of the parties. If no such objections are timely raised, the Escrow Agent shall immediately return the demanded money and/or documents, and the escrow cancellation charges shall be paid by the party in Default, or if no party or both parties are in Default half of the escrow cancellation charges shall be paid by each party. Termination of the Escrow shall be without prejudice as to whatever legal rights either party may have against the other arising from this Agreement. If no demands are made for return of documents or properties, the Escrow Agent shall proceed with the Closing as soon as possible. Nothing in this Section 201.9 shall be construed to impair or affect the rights of the Developer to specific performance. If the Escrow for the Conveyance of the City Property is terminated pursuant to this Section 201.9, then this Agreement shall terminate, and Developer shall have no further right to purchase the City Property. The foregoing paragraph shall not be deemed to limit any other right of the City to terminate this Agreement or seek remedies for Developer’s default set forth elsewhere in this Agreement.
201.10 Close of Escrow. Escrow Agent shall close Escrow for the Conveyance of the City Property as follows:
(a) Record the Grant Deed, with instructions for the Recorder of Orange County, California to deliver the recorded Grant Deed to Developer; (b) Record the Declaration against the City Property with instructions for the Recorder of Orange County, California to deliver the recorded Declaration to the City and a conformed copy to Developer.
(c) File any informational reports required by Internal Revenue Code Section 6045I, as amended, and any other applicable requirements; (d) Deliver the FIRPTA Certificate, if any, to Developer; 11 4828-8136-9456v32/022046-0046 Page 356 of 640

(e) Forward to both Developer and City a separate accounting of all funds received and disbursed for each party and copies of all executed and recorded or filed documents deposited into Escrow, with such recording and filing date and information endorsed thereon. 202. Review of Title. The City shall cause First American Title Company or another title company mutually agreeable to both parties (the “Title Company”), to deliver to Developer a standard preliminary title report (the “Report”) with respect to the title to the City Property, together with legible copies of the documents underlying the exceptions (“Exceptions”) set forth in the Report, within five (5) days following the Date of Agreement. The Developer may, at its own expense, also obtain a survey of the Site (the “Survey”) within thirty (30) days of receipt of the Report. The Developer shall have the right to reasonably approve or disapprove the Exceptions and the Survey; provided, however, that the Developer hereby approves the following Exceptions:
(a) The lien of any non-delinquent property taxes and assessments (to be prorated at close of Escrow); and
(b) The provisions set forth in the Grant Deed and the Declaration to be recorded concurrently with the Closing.

Developer shall have thirty (30) days from the date of its receipt of the Report (or sixty (60) days if Developer seeks to obtain a Survey) to give written Notice to City and Escrow Agent of Developer’s approval or disapproval ofany ofsuch Exceptions and the items shown on the Survey. If Developer notifies City of its disapproval of any Exceptions in the Report and/or Survey items, City shall have the right, but not the obligation, to remove any disapproved Exceptions and/or Survey items, after receiving written notic e of Developer’s disapproval or provide assurances satisfactory to Developer that such Exception(s) and/or Survey items will be removed within thirty (30) days. If City cannot or does not elect to remove any of the disapproved Exceptions and/or Survey items within that thirty (30) day period, Developer shall have ten (10) business days after the expiration of such thirty (30) day period to either give the City written notice that Developer elects to proceed with the purchase of the City Property subject to the disapproved Exceptions and/or Survey items or to give the City written notice that the Developer elects to terminate this Agreement or that Developer will remove such disapproved Exceptions at Developer’s sole cost and expense. The Exceptions to title and Survey items approved by Developer or subject to which Developer agrees to take title to the City Property as provided herein shall hereinafter be referred to as the “Condition of Title.” Developer shall have the right to approve or disapprove any Exceptions reported by the Title Company and/or new Survey items (which are not created by Developer) after Developer has approved the Condition of Title for the City Property. Notwithstanding the above, City shall remove any new Exception to title which is voluntarily created by City following the Date of Agreement. Notwithstanding the foregoing, it shall be the responsibility, but not the obligation of the Developer, to remove any restrictions on title which prohibits or limit the construction of the Conforming Hotel. 203. Title Insurance.
203.1 Title Policy for Conveyance of City Property. Concurrently with recordation of the Grant Deed conveying title to the City Property to Developer, City will cause Title Company to issue to Developer a CLTA (1970 Form B) Standard Coverage owner’s policy of title insurance, issued by the Title Company insuring that the title to the City Property is vested in Developer in the condition required by this Section 203.1 with insurance coverage in the amount of ________________ Dollars ($____________) (the “Title Policy”). The Title Company shall provide the City with a copy of the 12 4828-8136-9456v32/022046-0046 Page 357 of 640

Title Policy. The City shall pay the portion of the premium for the Title Policy equal to the cost of a CLTA standard coverage title policy. Any additional costs, including the incremental cost of an ALTA policy extended coverage above the cost of a CLTA policy in the same policy amount, the costs of any required survey, or any endorsements requested by the Developer, shall be borne by the Developer.

Exclusive possession of the City Property shall be delivered to the Developer at the Closing unless Developer specifies otherwise in its sole and absolute discretion. 204. Conditions of Closing. The Closing for the Conveyance of the City Property is conditioned upon the satisfaction of the following terms and conditions within the times designated below:
204.1 City’s Conditions Precedent. City’s obligation to proceed with the Closing of the Conveyance of the City Property is subject to the fulfillment by Developer (or written waiver by City) of each and every one of the conditions precedent (a) through (l) inclusive, described below (“City’s Conditions Precedent”), which are solely for the benefit of City, and which shall be fulfilled or waived by the Outside Closing Date (or such other time periods provided for herein):
(a) Execution of Documents. The Developer shall have executed and acknowledged the Grant Deed, the Declaration, and any other documents required hereunder and delivered such documents into Escrow. Developer shall have delivered into Escrow organizational documents evidencing Developer’s organization and good standing within the State of California. (b) Agency Property. The Partie s shall be in a position to close concurrently on the Agency Property.
(c) Environmental. The Developer shall not have elected to cancel Escrow and terminate this Agreement due to the environmental condition of the City Property pursuant to and within the time frame set forth in Section 207.1 hereof. (d) Land Use Approvals. All land use approvals required pursuant to Section 303 hereof shall have been obtained, except a Final Map; provided that a completed application for a tentative map shall have been submitted for processing. (e) Insurance. The Developer shall have provided proof of insurance (or self-insurance) as required by Section 306 hereof.
(f) Predevelopment Financing. The Developer shall have provided evidence reasonably satisfactory to the City that the Developer has sufficient internal funds and/or has obtained a loan or financing for the preparation, submitt al, and approval by the City of Design and Specifications and such other plans and permits as may be necessary to secure Building Permits to construct the Conforming Hotel pursuant to Section 309 hereof (“Predevelopment Financing”), and such Predevelopment Financing shall close and/or be available to the Developer upon the Closing. (g) Project Architect and Project Engineer. Developer shall have entered into an agreement with a licensed architect to prepare the Design and Specifications and with a duly licensed engineer to prepare and process a Final Map. (h) No Litigation. No litigation, administrative or adjudicative proceeding, including without limitation an application for a writ of mandate, shall be pending or 13 4828-8136-9456v32/022046-0046 Page 358 of 640

threatened which seeks to challenge or enjoin the Conveyance or any portion of the Conforming Hotel then being developed in conjunction with the Closing or the transactions covered by this Agreement, or, except to the extent Developer provides adequate security therefor in the reasonable discretion of the City, to obtain damages in connection therewith.
(i) No Default. Prior to the Close of Escrow, Developer shall not be in Default in any of its obligations under the terms of this Agreement and all representations and warranties of Developer contained herein shall be true and correct in all material respects. (j) Conforming Hotel Franchise Agreement and Conforming Hotel Operating Agreement. Developer shall have entered into a Conforming Hotel Franchise Agreement and a Conforming Hotel Operating Agreement, each of which shall have been approved by the City acting in its reasonable discretion to determine conformity with this Agreement. (k) Hotel Operator. City shall have approved the Hotel Operator. (l) Section 208 Escrow Instructions. The parties shall have agreed upon terms of the escrow instructions required in regard to D eveloper’s deposit of the grant deeds for the Agency Property, City Property pursuant to Section the 208 Escrow Instructions. 204.2 Developer’s Conditions Precedent. Developer’s obligation to proceed with the purchase of the City Property is subject to the fulfillment or waiver by Developer of each and all of the conditions precedent (a) through (j) inclusive, describe d below (“Developer’s Conditions Precedent”), which are solely for the benefit of Developer, and which shall be fulfilled or waived by the Outside Closing Date (or such other time periods provided for herein):
(a) No Default. Prior to the Close of Escrow, City shall not be in Default in any of its obligations under the terms of this Agreement and all representations and warranties of City contained herein shall be true and correct in all material respects. (b) Execution of Document s. The City shall have executed and acknowledged the Grant Deed, the Declaration, and any other documents required hereunder, and delivered such documents into Escrow.
(c) Agency Property. The Parties shall be in a position to close concurrently on the Agency Property.
(d) Title Policy. Developer shall have reviewed and approved the Condition of Title of the City Property, as provided in Section 202 hereof, and the Title Company shall, conditioned only upon payment of Title Company’s regularly scheduled premium, have irrevocably committed to provide the Title Policy for the City Property upon the Close of Escrow, in accordance with Section 203 hereof.
(e) Property Condition. The Developer shall not have elected to cancel Escrow and terminate this Agreement due to the Property Condition pursuant to Section 207.1 hereof. (f) Land Use Approvals. All land use approvals required pursuant to Section 303 hereof shall have been obtained, except a Final Map; provided that a completed application for a tentative map shall have been submitted for processing. 14 4828-8136-9456v32/022046-0046 Page 359 of 640

(g) No Litigation. No litigation, administrative or adjudicative proceeding, including without limitation an application for a writ of mandate, shall be pending or threatened which seeks to challenge or enjoin the Conveyance or any portion of the Conforming Hotel then being developed in conjunction with the Closing, or the transactions covered by this Agreement or, except to the extent Developer provides adequate security therefor in the reasonable discretion of the City, to obtain damages in connection therewith.
(h) Conforming Hotel Franchise Agreement and Conforming Hotel Operating Agreement. Developer shall have entered into a Conforming Hotel Franchise Agreement and a Conforming Hotel Operating Agreement, each of which sh all have been approved by the City acting in its reasonable discretion to determine conformity with this Agreement. (i) Hotel Operator. City shall have approved the Hotel Operator. City hereby approves Kam Sang as the operator.
(j) Section 208 Escrow Instructions. The parties shall have agreed upon terms of the escrow instructions required in regard to Developer’s deposit of the grant deeds for the Agency Property, City Property, and Housing Authority Property pursuant to Section 208 Escrow Instructions.
205. Representations and Warranties.
205.1 City Representations. City represents and warrants to Developer as follows:
(a) City is a municipal corporation organized under the Constitution and laws of the State of California.
(b) The execution and delivery of this Agreement by City has been fully authorized by all requisite actions on the part of City. (c) City’s execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which City is a party or by which it is bound.
(d) City shall have, as of the Closing, provided Developer access to all written materials regarding the City Property that the City has Actual Knowledge of and which are in its possession, and City has no actual knowledge of any other such written materials. (e) The City has no Actual Knowledge, and has not received any notice or communication from any governmental agency having jurisdiction over the City Property notifying the City of the presence of surface or subsurface zone Hazardous Materials in, on or under the City Property or any portion thereof.
“Actual Knowledge,” as used herein, shall not impose a duty of investigation, and shall mean the actual knowledge of the City’semployees and agents who have participated in the preparation of this Agreement and the acquisition of the City Property.

Until the Closing, City shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 205.1 not to be true as of Closing, immediately give written Notice of such fact or condition to Developer. Such exception(s) to a 15 4828-8136-9456v32/022046-0046 Page 360 of 640

representation shall not be deemed a breach by City hereunder, but shall constitute an exception which Developer shall have a right to approve or disapprove if such exception would have a material effect on the value and/or operation of the Conforming Hotel. If Developer elects to close Escrow following disclosure of such information, City’s representations and warranties contained herein shall be deemed to have been made as of the Closing, subject to such exception(s). If, following the disclosure of such information, Developer elects to not close Escrow, then the Escrow shall automatically terminate, and the provisions of Section 201.9 shall apply. The representations and warranties set forth in this Section 205.1 shall survive the Closing.
205.2 Developer’s Representations. Developer represents and warrants to City as follows:
(a) Authority. Developer is a duly organized limited liability company within and in good standing under the laws of the State of California. The copies of the documents evidencing the organization of the Developer that have been delivered to the City through Escrow are true and complete copies of the originals, as amended to the Date of Agreement. The execution, performance and delivery of this Agreement by Developer has been fully authorized by all requisite actions on the part of the Developer.
(b) No Conflict. Developer’s execution, delivery and performance of its obligations under this Agreement will not constitute a default or a breach under any contract, agreement or order to which the Developer is a party or by which it is bound. (c) No Developer Bankruptcy. Developer is not the subject of a current or pending bankruptcy proceeding.

Until the Closing, Developer shall, upon learning of any fact or condition which would cause any of the warranties and representations in this Section 205.2 not to be true as of Closing, immediately give written Notice of such fact or condition to City. Such exception(s) to a representation shall not be deemed a breach by Developer hereunder, but shall constitute an exception which City shall have a right to approve or disapprove if such exception would have an effect on the value and/or operation of the Conforming Hotel. If City elects to close Escrow following disclosure of such information, Developer’s representations and warranties contained herein shall be deemed to have been made as of the Closing, subject to such exception(s). If, following the disclosure of such information, City elects to not close Escrow, then the Escrow shall automatically terminate, and the provisions of Section 201.9 shall apply. The representations and warranties set forth in this Section 205.2 shall survive the Closing. 206. Studies and Reports; Right of Entry. The Developer shall have access to all written reports, documents, data and information on the City Property available to and in the possession of the City, but without warranty or representation by the City as to the completeness, correctness or validity of such written materials. City shall warrant as of the Closing that it has provided access to all such written materials that the City has Actual Knowledge of and which are in its possession or reasonably available to it and that the City has no Actual Knowledge of any other such written materials.

For a period of one hundred twenty (120) days after the Date of Agreement, Developer shall, upon (a) execution by the Developer of a right of entry agreement in the form of Exhibit H attached hereto, and (b) giving at least twenty-four (24) hours ’ notice to the City, have access to the City Property for the purpose of obtaining data and making surveys and tests necessary to carry out this Agreement. The Developer shall hold harmless, indemnify, and release the City and its officers, 16 4828-8136-9456v32/022046-0046 Page 361 of 640

employees, and representatives from and against any injury or damages arising out of any activity pursuant to this Section 206. A t the City’s request, copies of data, surveys and tests obtained or made by the Developer on the City Property shall be filed with the City, without warranty or representation by the Developer as to the completeness, correctness or validity of such data and information. Any preliminary work by the Developer shall be undertaken only when any necessary permits have been secured from the appropriate governmental agencies.
207. Property Condition; Release of City as to City Property. 207.1 Approval of Property Condition. Developer shall be entitled to reasonably approve or disapprove the condition of the City Property as it relates to Hazardous Materials, soils, geology, seismic conditions, suitability for the intended purpose and land use (the “Property Condition”) by notice to the City within thirty (30) days following the Date of Agreement. In the event that the Developer disapproves the Property Condition, this Agreement shall be terminated as provided in Section 606 hereof.
207.2 No Further Warranties As To City Property; Delivery of City Property “as is”; Release of City. Except for representations, warranties and covenants of the City in this Agreement to the contrary, which have not otherwise been disavowed to the Developer pursuant to Section 205.1, the physical condition of the City Property is and shall be delivered to Developer in an “as-is” condition, with no warrant y expressed or implied by City, including without limitation, regarding the presence of Hazardous Materials or the condition of the soil, its geology, the presence of known or unknown seismic faults, or the suitability of the City Property for the development purposes intended hereunder.

Except for representations, warranties, and other covenants of the City in this Agreement to the contrary, which have not otherwise been disavowed to the Developer pursuant to Section 205.1, the Developer hereby waives, releases and discharges forever the City, and its employees, officers, agents and representatives, from all present and future claims, demands, suits, legal and administrative proceedings and from all liability for damages, losses, costs, liabilities, fees and expenses, present and future, arising out of or in any way connected with the City’s or the Developer’s use, maintenance, ownership or operation of theCity Property, any HazardousMaterials on the City Property, or the existence of Hazardous Materials Contamination in any state on the City Property, however they came to be placed there.

The Developer acknowledges that it is aware of and familiar with the provisions of Section 1542 of the California Civil Code which provides as follows:
“A general release does not extend to claims that the creditor or releasing party does not know or suspect to exist in his or her favor at the time of executing the release and that, if known by him or her, would have materially affected his or her settlement with the debtor or released party.” Except for representations, warranties and covenants of the City in this Agreement to the contrary, which have not otherwise been disavowed to the Developer pursuant to Section 205.1, as such provision relates to this Section 207.2, the Developer hereby waives and relinquishes all rights and benefits which it may have under Section 1542 of the California Civil Code. 207.3 Developer Precautions. From and after the Date of Agreement, the Developer shall use commercially reasonable efforts to prevent the release into the environment of any Hazardous 17 4828-8136-9456v32/022046-0046 Page 362 of 640

Materials that are located in, on or under the City Property. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. 207.4 Required Disclosures. From and after the Date of Agreement, the Developer shall notify the City, and provide to the City a copy or copies, of all environmental permits, disclosures, applications, entitlements or inquiries relating to the City Property, including 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. Upon request, the Developer shall furnish to the City a copy or copies of any and all other environmental entitlements or inquiries relating to or affecting the City Property including, but not limited to, all permit applications, permits and reports.
207.5 Developer Indemnity. Except as to the representations, warranties and covenants of the City in this Agreement to the contrary which have not otherwise been disavowed to the Developer pursuant to Section 207.2, Developer agrees to indemnify, defend and hold City and their respective officers, employees, agents, representatives and volunteers harmless from and against any claim, action, suit, proceeding, damage, liability, deficiency, fine, penalty, or punitive damage (including, without limitation, reasonable attorneys’ fees), resulting from, arising out of, or based upon the presence, release, use, generation, discharge, storage or disposal of any Hazardous Materials on, under, in or about, or the transportation of any such Hazardous Materials to or from, the Site which occurs from and after the Date of Agreement.
208. Post-Closing Conditions and Obligations. The Developer shall fulfill the following post-closing conditions within the timeframe set forth herein. (a) On or before January 30, 2023, Developer shall provide evidence to the City that it has begun processing Final Maps.
(b) On or before April 30, 2023, Developer shall begin processing Final Maps with the County of Orange.
(c) On or before May 30, 2023, the City shall have approved the Final Site Plan and the Developer shall have cause to be prepared the Schematic Design for the Conforming Hotel.
(d) On or before September 30, 2023, the Developer shall have caused the Design Development Drawings (with exterior Designs and Specifications only) to be submitted to the City for initial review.
(e) On or before June 30, 2024, Developer shall have provided City with evidence of Construction Financing.
(f) On or before August 1, 2024, Developer shall have received Building Permits for foundation and superstructure, and recorded and funded its Construction Financing. (g) On or before November 1, 2024, Developer shall commence excavation.
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(h) On or before February 1, 2025, Developer shall have commenced Construction.

In the event that any of these conditions are not fulfilled within the prescribed timeframes, City will have the right to declare such failure of condition a Breach and following notice and an opportunity to cure, as described in Section 602, such Breach and failure to cure, shall become a Default. 208.1 Return of Agency Property and City Property. Upon such Default, Developer shall convey or cause the conveyance of the City Property and Agency Property to the City, with the property condition and title condition as when each was conveyed and the City shall then return Developer the Purchase Price for the City Property ($920,000.00); provided, however the parties may jointly agree to allow the Developer to retain the Agency Property for purposes of development in accordance with the Agency DDA.

In furtherance of the requirements of this Section 208.1, Developer shall, concurrently with the Closing, deposit grant deeds for the Agency Property, City Property and Housing Authority Property with Escrow Agent together with escrow instructions mutually agreed to by the Developer and City, consistent with the terms of this Section 208.1 (“208 Escrow Instructions”).

Kam Sang hereby guaranties the performance of Developer under this Section 208.1 pursuant to the Guaranty.
300. DEVELOPMENT OF THE SITE
301. Scope of Development.
301.1 Conforming Hotel. Developer shall develop the Site in substantial conformance with the Conceptual Site Plan, Land Use Approvals and the Scope of Development, within the time periods set forth in the Schedule of Performance. The physical quality of the Conforming Hotel, including, without limitation, construction quality, finish material, lighting, landscaping and site amenities shall be comparable to (i) that achieved at the Nickelodeon Hotel & Resort located in Punta Cana, Dominican Republic or (ii) another resort hotel which, at a minimum meets the AAA Four Diamond Requirements. In addition to the foregoing, and in either case, the actual and direct third-party construction costs for the Conforming Hotel shall not be less than Two Hundred Fifty Thousand Dollars ($250,000) per room computed by dividing the total actual and direct third -party construction costs by the number of rooms (“Minimum Shell Costs”). The actual and direct third -party costs per room for Furniture, Fixtures, and Equipment shall be not less than Forty-Five Thousand Dollars ($45,000) (“Minimum FF&E Costs”). Following the issuance of the Release of Construction Covenants for the Conforming Hotel and thereafter until the expiration or termination of the Covenant Consideration Period, the Conforming Hotel and repair and maintenance thereof shall remain comparable in terms of quality and level of amenities existing for the Conforming Hotel as of the date of issuance of the Release of Construction Covenants. In order to ensure that these quality expectations of each party for the Conforming Hotel are met, Developer hereby agrees to construct the Conforming Hotel in accordance with the Minimum Development Standards and the Preliminary Capital Cost Budget. The architectural and interior designs and specifications (the “Design and Specifications”) for the buildings in the Conforming Hotel will be prepared in conformity with such Minimum Development Standards and Preliminary Capital Cost Budget. The Developer shall submit 19 4828-8136-9456v32/022046-0046 Page 364 of 640

the Design and Specifications for the Conforming Hotel for review by the City as part of the submittal of the Design Development Drawings set forth in Section 302.1 below. The Design and Specifications shall include a detailed budget for the construction, furnishing and equipping of the Conforming Hotel, exclusive of land co sts (the “Capital Cost Budget” for the Conforming Hotel), which Capital Cost Budget shall be at least equal to the Preliminary Capital Cost Budget for the Conforming Hotel, as adjusted pursuant to the third paragraph of this Section 301.1, if applicable.

In addition to the requirement that such Design and Specifications must be in compliance with the Land Use Approvals, the City shall review the Capital Cost Budget submitted with such Design and Specifications to assure that it: (a) represents a reasonable estimate of the cost required to construct, furnish and equip those portions of the Conforming Hotel proposed to be constructed; and (b) reflects a total square footage and a total cost at least equal to the Preliminary Capital Cost Budget for the Conforming Hotel as adjusted pursuant to the third paragraph of this Section 301.1, if applicable. The City shall also review the Design and Specifications to assure that the Design and Specifications is in conformity with the Minimum Development Standards. The Design and Specifications shall be deemed to be in conformity with the Minimum Development Standards, and the associated Capital Cost Budget shall be deemed to be a reasonable estimate of the cost required to construct, furnish and equip the portions of the Conforming Hotel proposed to be constructed if a registered California architect delivers a certification to the City to such effect. If the Capital Cost Budget does not fulfill the aforementioned conditions, or the Design and Specifications are not in conformity with the Minimum Development Standards, the City shall have the right, but not the obligation, to reject the Design and Specifications (including the Capital Cost Budget) for the Conforming Hotel until Developer corrects such matters to the reasonable satisfaction of City. Provided that Developer is not otherwise in Default and subject to the right to terminate as a result of the expiration of the term of this Agreement, the foregoing process shall be repeated as many times as necessary until the Design and Specifications and associated Capital Cost Budget are ascertained to have met the standards set forth above, or the City, in its sole discretion, approves such Design and Specifications (including the Capital Cost Budget) irrespective of such requirement. Once the Design and Specifications (including the Capital Cost Budget) are approved in the foregoing manner, such Design and Specifications (including the Capital Cost Budget) shall be referred to as the “Final Site Plan ” for the Conforming Hotel.

Developer shall file such Design and Specifications (including the Capital Cost Budget) with respect to the Conforming Hotel Design and Specifications (including the Capital Cost Budget) shall be submitted on or before three (3) months prior to the proposed date for commencement of construction.

The Conforming Hotel will be constructed in Substantial Conformity with the Final Site Plan.

If a Development Area is not constructed in substantial conformity with the Final Site Plan, then the City shall not be obligated to pay Covenant Considerations. The Conforming Hotel shall be deemed to have been developed in conformity with its Final Site Plan if a registered California architect delivers a certification to the City stating that the Conforming Hotel has been constructed in Substantial Conformity with the Final Site Plan for the Conforming Hotel. “Substantial Conformity” for purposes of this Section means that the final cost of constructing the Conforming Hotel excluding land costs shall be within ten percent (10%) of the approved Capital Cost Budget including any in lieu payments, the materials shall be of like quality and appearance, and the Conforming Hotel shall be otherwise built in accordance with the Final Site Plan.
302. Design Review.
302.1 Developer Submissions. Before commencement of construction of the Conforming Hotel or other works of improvement upon the Site, the Developer shall submit to the City 20 4828-8136-9456v32/022046-0046 Page 365 of 640

any plans and drawings (collectively, the “Design Development Drawings”) which may be required by the City with respect to any permits and entitlements which are required to be obtained to develop the Site.
302.2 City Review and Approval. The City shall have all rights to review and approve or disapprove all Design Development Drawings and other required submittals in accordance with the City Municipal Code, and nothingset forth in this Agreement shall beconstrued as the City’s approval of any or all of the Design Development Drawings. City shall retain discretionary approval over the quality and appearance of those elements of the Conforming Hotel having a material visual impact on the exterior portions of the Conforming Hotel through the process set forth in Section 301.1 for Developer to obtain an Approved Final Site Plan (as set forth in Section 301.1 above). Following approval of the Approved Final Site Plan for the Conforming Hotel, City shall have no further discretionary approval rights over such exterior portions of the Conforming Hotel except to the extent the Developer does not adhere to such Approved Final Site Plan in construction of the Conforming Hotel.
302.3 Revisions. Any and all change orders or revisions required by the City and its inspectors which are required under the Municipal Code and all other applicable Uniform Codes (e. g.

Building, Plumbing, Fire, Electrical, etc.) and under other Governmental Requirements shall be included by the Developer in its Design Development Drawings and other required submittals and shall be completed during the construction of the Conforming Hotel. 302.4 Defects in Plans. The City shall not be responsible either to the Developer or to third parties in any way for any defects in the Design Development Drawings, nor for any structural or other defects in any work done according to the approved Design Development Drawings, nor for any delays reasonably caused by the review and approval processes established by this Section 302. 303. Land Use Approvals. Before commencement of construction of the Conforming Hotel or other works of improvement upon the Site, the Developer shall secure or cause to be secured, at the expense of the Developer, any and all land use and other entitlements, permits and approvals which may be required for the Conforming Hotel by the City or any other governmental agency affected by such construction or work, including without limitation, the Development Agreement and compliance with CEQA (“Land Use Approvals”).
303.1 Developer to Pay Costs. City and Developer shall, without limitation, apply for and secure the following, and Developer shall pay all costs, charges and fees associated therewith:
(a) All permits and fees required by the City, County and other governmental agencies with jurisdiction over the Conforming Hotel:
(b) All approvals for a final subdivision map, parcel map or lot line adjustment necessary to consolidate and re-subdivide the parcels within the Site pursuant to the California Subdivision Map Act.
304. Schedule of Performance. The Developer shall submit all applications for Land Approvals and commence and complete construction of the Conforming Hotel and otherwise comply with its obligations under this Agreement in accordance with the Schedule of Performance, as such dates therein may be extended by the parties or by operation of law. 21 4828-8136-9456v32/022046-0046 Page 366 of 640

305. Cost of Construction. All of the cost of planning, designing, developing and constructing the Conforming Hotel shall be borne solely by Developer. 306. Insurance Requirements. On or before the date of commencement of construction of the Conforming Hotel or any portion thereof, the Developer shall take out and maintain or shall cause its contractor to take out and maintain until the issuance of the final Release of Construction Covenants pursuant to Section 310 of this Agreement, a comprehensive general liability policy with a policy limit in the amount of Three Million Dollars ($3,000,000) combined single limit policy, with limits of One Million Dollars ($1,000,000) per occurrence, including contractual liability, as shall protect the Developer and City from claims for such damages, and which policy shall be issued by a reputable insurance carrier licensed to do business in the State of California. Such policy or policies shall be written on an occurrence basis. The Developer shall also furnish or cause to be furnished to the City evidence satisfactory to the City that Developer and any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to thi s Agreement carries workers’ compensation insurance as required by law. The Developer shall furnish a certificate of insurance countersigned by an authorized agent of the insurance carrier setting forth the general provisions of the insurance coverage. This countersigned certificate shall name the City and its respective officers, employees, agents, representatives and volunteers as additionally insured parties under the policy, and the certificate shall be accompanied by a duly executed endorsement evidencing such additional insured status. The certificate and endorsement by the insurance carrier shall contain a statement of obligation on the part of the carrier to notify City of any material change, cancellation or termination of the coverage at least thirty (30) days in advance of the effective date of any such material change, cancellation or termination. Coverage provided hereunder by the Developer shall be primary insurance and not be contributing with any insurance maintained by the City, and the policy shall contain such an endorsement. The insurance policy or the endorsement shall contain a waiver of subrogation for the benefit of the City. The required certificate shall be furnished by the Developer prior to the commencement of construction of the Conforming Hotel or any portion thereof. 307. Indemnification. The Developer shall defend, indemnify, assume all responsibility for, and hold the City, and its officers, employees, agents, representatives and volunteers, harmless from all claims, demands, damages, defense costs or liability of any kind or nature relating to (a) any damages to property or injuries to persons, including accidental death (including attorneys ’ fees and costs), which may be caused by any acts or omissions of the Developer under this Agreement, whether such activities or performance thereof be by the Developer or by anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement, except to the extent such matters are caused by the negligence or willful misconduct of the City, or its officers, employees, agents, representatives or volunteers, its own Default under this Agreement, or the invalidity of any covenants, representations or warranties of the City (except to the extent the invalidity of such covenant, representation, or warranty has bee n previously disclosed to and approved by Developer), as to which Developer shall not be liable, and (b) any litigation, administrative or adjudicative challenge by third parties to the validity, applicability, interpretation or implementation of this Agreement, or the approval of any environmental analysis with respect to the Conforming Hotel and this Agreement and/or Governmental Requirements (“Action”).

The Developer shall have the obligation to defend any such action; provided, however, that this obligation to defend shall not be effective if and to the extent that Developer determines in its reasonable discretion that such Action is meritorious or that the interests of the parties justify a compromise or a settlement of such Action, in which case Developer shall compromise or settle such Action in a way that fully protects City from any liability or obligation. In thi s regard, Developer’s obligation and right to defend shall include the right to hire (subject to written approval by the City) 22 4828-8136-9456v32/022046-0046 Page 367 of 640

attorneys and experts necessary to defend, the right to process and settle reasonable claims, the right to enter into reasonable settlement agreements and pay amounts as required by the terms of such settlement, and the right to pay any judgments assessed against Developer or City. If Developer defends any such Action, as set forth above, (i) Developer shall indemnify and hold harmless City and its officers, employees, representatives, agents and volunteers from and against any claims, losses, liabilities, or damages assessed or awarded against either of them by way of judgment, settlement, or stipulation; (ii) City shall be entitled to settle any such claim only with the written consent of the Developer; and (iii) any settlement without Developer’s consent shall not constitute a default by City but shall release Developer’s obligations under this Section 307 with respect to such settled claim. 308. Rights of Access. Representatives of City shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including but not limited to, the inspection of the work being performed in constructing the Conforming Hotel, so long as City representatives comply with all safety rules and do not interfere with, dela y or interrup t Developer’s construction activities. A t the option of the Developer, such City representatives shall be escorted by a representative of the Developer. The City shall indemnify the Developer and hold it harmless from any damage caused or liability arising out of the exercise of the foregoing right of access.
309. Financing of the Conforming Hotel.
309.1 Approval of Financing. As required in §204 (f) and §208 (e), Developer shall submit to City evidence that Developer has obtained sufficient equity capital and/or has obtained firm and binding commitments for Predevelopment and Construction Financing necessary to undertake the development of the Conforming Hotel in accordance with this Agreement. The City shall approve or disapprove such evidence of financing commitments within thirty (30) days of receipt of a complete submission. Approval shall not be unreasonably withheld, delayed or conditioned. If City shall disapprove any such evidence of financing, City shall do so by Notice to Developer stating the reasons for such disapproval and Developer shall promptly obtain and submit to City new evidence of financing. City shall approve or disapprove such new evidence of financing in the same manner and within the same times established in this Section 309.1 for the approval or disapproval of the evidence of financing as initially submitted to City. Developer shall close the approved Construction Financing, if any, prior to or concurrently with the Closing. Such evidence of financing shall include the following: (a) a copy of a legally binding, firm and enforceable loan commitment(s), if any, obtained by Developer from one or more financial institutions for the mortgage loan or loans for construction and permanent financing for the Conforming Hotel, subject to such lenders’ reasonable, customary and normal conditions and terms, and/or (b) other documentation satisfactory to the City as evidence of other sources of capital sufficient to demonstrate that Developer has adequate funds to cover the difference between the total cost of the construction and completion, less financing authorized by those loans set forth above.
309.2 No Encumbrances Except Mortgages, Deeds of Trust, or Sale and Lease-Back for Development. Mortgages, deeds of trust and sales and leases-back shall be permitted before completion of the Conforming Hotel only with the City’s prior written approval, which shal l not be unreasonably withheld, conditioned or delayed, but only for the purpose of securing loans o f funds to be used for financing the construction of the Conforming Hotel (including architecture, engineering, legal, and related direct costs as well as indirect costs) on or in connection with the Site, and any other purposes necessary and appropriate in connection with development under this Agreement. In no event, however, shall the amount or amounts of indebtedness secured by mortgages 23 4828-8136-9456v32/022046-0046 Page 368 of 640

or deeds of trust exceed the sum of the fair market value of the Site and the projected cost of constructing, furnishing, equipping and leasing the Conforming Hotel, as evidenced by a pro forma and a construction contract which set forth such construction costs. The Developer shall notify the City in advance of any mortgage, deed of trust or sale and leaseback financing, if the Developer proposes to enter into the same before completion of the construction of the Conforming Hotel. The words “mortgage” and “trust deed” as used hereinafter shall include sale and lease-back. 309.3 Holder Not Obligated to Construct the Conforming Hotel. The holder of any mortgage or deed of trust authorized by this Agreement (a “Holder” or “Lender”) shall not be obligated by the provisions of this Agreement to construct or complete the Conforming Hotel or any portion thereof, or to guarantee such construction or completion; nor shall any covenant or any other provision in this Agreement 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 Site to any uses or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement.
309.4 Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure.

With respect to any mortgage or deed of trust granted by Developer as permitted herein, whenever the City may deliver any notice or demand to Developer with respect to any default by the Developer of any provision of this Agreement, the City shall at the same time deliver to each Holder of record of any mortgage or deed of trust authorized by this Agreement which City has approved or of which City has knowledge a copy of such notice or demand. City shall not commence the exercise of its remedies under Section 600 of this Agreement by reason of such default, if and so long as, within thirty (30) days after the receipt of the notice:
(a) Lender shall cure or remedy, or commence to cure or remedy and thereafter to pursue with due diligence the cure or remedy, of any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage; or (b) In case of a default by the Developer in the performance or observance of any term, covenant, condition or agreement on Developer’s part to b e performed under thi s Agreement, other than a term, covenant, condition or agreement requiring the payment of a sum of money, if such default is of such a nature that the same cannot practicably be cured by Lender without taking possession of the Site, or if such default is of such a nature that the same cannot be cured by Lender within thirty (30) days of receipt of such notice, Lender shall deliver to City a written instrument reasonably acceptable to the City wherein Lender agrees that it will seek to obtain possession of the Site and upon obtaining such possession will cure such default, and thereafter Lender commences and diligently proceeds to obtain possession of the Site as mortgagee (through the appointment of a receiver, foreclosure or otherwise), and (i) within one hundred eighty (180) days following the delivery of the aforementioned written instrument to the City, obtains possession and/or conveys the Site to a third party reasonably acceptable to the City, and (ii) upon obtaining possession or conveying to an approved third party, Lender or such approved third party promptly commences and duly prosecutes to completion within thirty (30) days thereafter such action as may be necessary to cure such default and assumes, by execution of a form acceptable to the City, this Agreement. (c) Nothing contained in this Agreement shall be deemed to permit or authorize any Holder to undertake or continue the construction or completion of the Conforming Hotel or avail itself of the benefits of this Agreement, or any portion thereof (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly 24 4828-8136-9456v32/022046-0046 Page 369 of 640

assumed the Developer’s obligations to the City by written agreement reasonably satisfactory to the City. 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. Any such Holder properly completing such improvement shall be entitled, upon compliance with the requirements of Section 310 of this Agreement, to a Release of Construction Covenants. 309.5 Failure of Holder to Complete the Conforming Hotel. In any case where, thirty (30) days after the Holder of any mortgage or deed of trust creating a lien or encumbrance upon the Site or any part thereof receives a notice from City of a default by the Developer in completion of construction of any portion of the Conforming Hotel under this Agreement, and such Holder has not notified the City that it has elected to cure the default or seek possession of the Site as set forth above, or if it has exercised the option but has defaulted thereunder and failed to timely cure such default, the City may purchase the mortgage or deed of trust from the Holder of the mortgage or deed of trust, by the payment of any unpaid principal, plus accrued interest thereon. 309.6 Right of the City to Cure Mortgage or Deed of Trust Default. In the event of a mortgage or deed of trust default or breach by the Developer prior to the completion of the construction of the Conforming Hotel or any part thereof, Developer shall immediately deliver to City a copy of any mortgage Holder’s notice of default. If the Holder of any mortgage or deed of trust has not exercised its option to construct, the City shall have the right but no obligation to cure the default.

In such event, the City shall be entitled to reimbursement from the Developer of all proper costs and expenses incurred by the City in curing such default. To the extent permitted by law, the City shall also be entitled to a lien upon the Site to the extent of such costs and disbursements. Any such lien shall be junior and subordinate to the mortgages or deeds of trust pursuant to this Section 309.6. 309.7 Priority of Lender’s or Holder’s Lien. Nothing herein shall preclude such lender from taking any action under the loan documents related to the loan secured by the such deed of trust, including extensions, renewals, modifications (including further advances), compromising and collecting. Any lender or transferee acquiring title to the Site shall not be liable to City for acts or omissions of any prior owner or developer, including any obligation for any of the indemnitees that accrued before said acquisition.
310. Release of Construction Covenants. Promptly after completion of the Conforming Hotel, in Substantial Conformity with the Approved Final Site Plan therefor, the City shall furnish Developer with a Release of Construction Covenants as to the Conforming Hotel, upon written request therefor by Developer. The City shall not unreasonably withhold such Release of Construction Covenants. Such Release of Construction Covenants shall be a conclusive determination of satisfactory completion of the construction of the Conforming Hotel, and the Release of Construction Covenants shall so state. The Release of Construction Covenants shall be in such form as to permit it to be recorded in th e Recorder’s Office of Orange County. If the City refuses or fails to furnish a Release of Construction Covenants after written request from City, the City shall, within ten (10) days of written request therefor, provide Developer with a written statement of the reasons the City refused or failed to furnish a Release of Construction Covenants. The statement shall also contain City’s opinion of the actions Developer must take to obtain a Release of Construction Covenants. If the reason for such refusal is confined to the immediate unavailability of specific items of materials for landscaping or other minor “punch list ” items, the City shall issue its Release of Construction Covenants upon the posting of a bond or other security acceptable to City in City’ssole discretion in an amount representing the fair value of the work not yet completed. Such Release of Construction Covenants shall not constitute evidence of compliance with or satisfaction of any obligation of 25 4828-8136-9456v32/022046-0046 Page 370 of 640

Developer to any Holder of any mortgage, or any insurer of a mortgage securing money loaned to finance the improvements, or any part thereof. Such Release of Construction Covenants is not a notice of completion as referred to in the California Civil Code Section 3093. 311. Compliance With Laws. The Developer shall carry out the design, construction and operation of the Conforming Hotel in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation (to the extent applicable) the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq.(“Governmental Requirements”).
312. Taxes and Assessments. From and after the Date of Agreement, the Developer shall pay prior to delinquency all ad valorem real estate taxes and assessments on the Site. For a period of twenty (20) years from the date of the Release of Construction Covenants issued by the City for the Site and/or the Conforming Hotel, the Developer shall not appeal any assessed valuation of the Site and/or the Conforming Hotel, except that Developer may appeal the amount by which any increase in such assessed valuation is in excess of either (a) the increase, over the same period of time, in the CPI, or (b) the limitations on such increases in valuation imposed by Proposition 13 or its implementing statutes.
313. Construction Contract . A draft of the Construction Contract(s) to be executed between Developer and the Contractor for the construction of the Conforming Hotel, certified by Developer to be true and correct copies thereof, and which shall include reference to this Agreement and suc h Contractor’s specifi c obligation to carry out the construction and completion of the Conforming Hotel in conformity with the applicable federal, state, and local laws and regulations. 400. COVENANTS AND RESTRICTIONS
In consideration for the City entering into this Agreement and other consideration set forth herein, the Developer has agreed to certain covenants, conditions and restrictions applicable to the use and operation of the Site, as set forth below, and has executed and acknowledged and delivered to the City the Declaration containing these covenants, conditions and restrictions (collectively, “Covenants”) along with other provisions of this Agreement applicable to the Site. The Developer further hereby agrees and authorizes the City to record the Declaration against the Site at the Closing.

Developer therefore hereby covenants and agrees for itself, its successors, assigns, and every successor in interest to the Site or any portion thereof or leasehold interest therein, which covenants shall run with the land, and shall be enforceable by the City against Developer and all successors in interest to all or any portion of the Site or leasehold interest therein with respect to the portion of the Site owned or leased by such party during such party’s period of ownership thereof or term of leasehold interest therein, as follows:
401. Uses and Operation. The Developer covenants and agrees to use and operate, and maintain the Site as the Conforming Hotel for a period of not less than thirty (30) years, in accordance with the Grant Deed, the Declaration, and this Agreement. All uses conducted on the Site, including, without limitation, all activities undertaken by the Developer pursuant to this Agreement, shall conform to all applicable Governmental Requirements and the recorded documents pertaining to and running with the Site.
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402. Nondiscrimination Covenants. The Developer covenants by and for itself and any successors in interest, that there shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer itself or any person claiming under or through it establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. The foregoing covenants shall run with the land.

The Developer shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, religion, sex, marital status, ancestry or national origin of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses:
(a) In deeds: “The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee or any person claiming under or through him or her, establish or permit any such 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 land herein conveyed. The foregoing covenants shall run with the land.”
(b) In leases: “The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators, and assigns, and all persons claiming under or through him or her, and this lease is made and accepted upon and subject to the following conditions:
“That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy of tenants, lessees, sublessees, subtenants, or vendees in the premises herein leased.”
(c) In contracts: “There shall beno discrimination against or segregation of, any person, or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises.”
403. Nondiscrimination in Employment . Developer covenants, by itself and any successor in interest, that all persons employed or applying for employment by it, its affiliates, subsidiaries, or holding companies, and all subcontractors, bidders and vendors, are and will be treated 27 4828-8136-9456v32/022046-0046 Page 372 of 640

equally by it without regard to, or because of race, color, religion, ancestry, national origin, sex, age, pregnancy, childbirth or related medical condition, medical condition (cancer related) or physical or mental disability, and in compliance with Title VII of the Civil Rights Act of 1964, 42 U.S.C. Section 2000, et seq., the Federal Equal Pay Act of 1963, 29 U.S.C. Section 206(d), the Age Discrimination in Employment Act of 1967, 29 U.S.C. Section 621, et seq., the Immigration Reform and Control Act of 1986, 8 U.S.C. Section 1324b, et seq., 42 U.S.C. Section 1981, the California Fair Employment and Housing Act, Cal. Government Code Section 12900, et seq., the California Equal Pay Law, Cal. Labor Code Section 1197.5, Cal. Government Code Section 11135, the Americans with Disabilities Act, 42 U.S.C. Section 12101, et seq., and all other anti-discrimination laws and regulations of the United States and the State of California as they now exist or may hereafter be amended. 404. Maintenance of the Site. The Developer shall maintain the Site and all improvements thereon, including all landscaping, in compliance with all applicable provisions of the City Municipal Code and the Declaration.
405. Retail Users. The retail element of the Conforming Hotel shall contain internationally, nationally or regionally recognized tenants and the total gross leasable area of the retail component shall contain not less than seventy (70%) percent of such tenancies. 406. Conforming Hotel Operators, Conforming Hotel Operating Agreement and Conforming Hotel Franchise Agreement. City acknowledges that it has pre-approved Kam Sang Company, Inc. or any Affiliate as Hotel Operator City shall approve all other Hotel Operators, Conforming Hotel Operating Agreements, and Conforming Hotel Franchise Agreements in its reasonable discretion to insure conformity with this Agreement. 407. Compliance With Laws. The Developer shall carry out the design, construction and operation of the Conforming Hotel in conformity with all applicable laws, including all applicable state labor standards, the City zoning and development standards, building, plumbing, mechanical and electrical codes, and all other provisions of the City Municipal Code, and all applicable disabled and handicapped access requirements, including without limitation the Americans With Disabilities Act, 42 U.S.C. Section 12101, et seq., Government Code Section 4450, et seq., Government Code Section 11135, et seq., and the Unruh Civil Rights Act, Civil Code Section 51, et seq. The Developer shall ascertain and comply with all applicable labor laws, including Prevailing Wage Statutes in the construction of the Conforming Hotel including, where applicable, prevailing wage laws. Developer shall provide documentation reasonably acceptable to the City, on a quarterly basis, to verify Developer’s complianc e with thi s provision. Developer shall defend, indemnify, and hold City harmless with respect to compliance with this Section 407.

In addition, Developer shall utilize union labor for a minimum of sixty percent (60%) of the total costs attributed to all subcontractors used in constructing the Conforming Hotel, as evidenced by the Construction Contract with its general contractor. Developer shall also provide preferences in hiring to Local Residents in the tiered order of priority described in Exhibit N. 408. Term of Covenants. As further set forth in the Grant Deed and Declaration, the Covenants set forth in this Section 400 shall remain in effect for the term set forth herein. The nondiscrimination Covenants set forth in Sections 402 and 403 shall remain in effect in perpetuity.

The use and operating Covenants set forth in Sections 401, 405, and 406 and the hiring preference set forth in Section 407 shall be effective for a period beginning upon the date that the Declaration is recorded against the Conforming Hotel, and terminating upon the thirtieth (30 th) anniversary thereof
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or earlier termination of the Covenant Considerations Period. The Maintenance Covenant set forth in Section 404 shall remain in effect for the duration of the City’s Municipal Code. The requirements of Section 407, shall remain in effect until a Release of Construction Covenants is issued. 409. Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction. The Covenants established in this Agreement and the Declaration shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City, its successors and assigns except as to enforcement of the Covenants set forth in the Declaration which shall be solely the right of the City.
500. COVENANT CONSIDERATION
In order to induce the Developer to construct and operate the Conforming Hotel, and as consideration for the Developer Constructing and operating the Conforming Hotel, the City has agreed to provide to Developer the Covenant Consideration described in Section 502 upon the terms set forth herein.
501. Confirmation that the Conforming Hotel has been Constructed and is Operating in Accordance with this Agreement. Upon completion of the Conforming Hotel, the Developer shall provide to the City, at Developer’s sole cost and expense, an independen t third-party audit, by an auditor approved by the City confirming that the Conforming Hotel has been constructed and is operating as the Conforming Hotel (the “Third-Party Audit”). Th e City shall approve or reject the results of the Third-Party Audit acting in its reasonable discretion. 502. Covenant Consideration for the Conforming Hotel. Except as set forth in Section 503, upon the fulfillment of the City Disbursement Conditions described in Section 505, the City shall pay to the Developer an amount equal to sixty percent (60%) of the Transient Occupancy Tax collected and remitted to the City during the Operating Period based on the Applicable Transient Occupancy Tax Rate with respect to the Conforming Hotel (“Covenant Consideration”). Covenant Consideration shall commence within ninety (90) days after the Construction Cost Verification is received and accepted by the City and shall be made annually thereafter no later than sixty (60) days after the applicable annual period.
503. Covenant Consideration Period. Covenant Consideration shall terminate upon the earlier to occur of (i) expiration of the applicable Operating Period, (ii) receipt of a total of Ninety Three Million Dollars ($93,000,000) in Covenant Consideration, or at such time as the Conforming Hotel ceases to operate for reasons other than Temporary Closure; provided that the Covenant Consideration shall terminate upon any closure unless the Developer notifies the City, in writing, of any Temporary Closure within ten (10) days of the initial occurrence of the onset of such condition or conditions that cause such a Temporary Closure; provided, further that the Agency Assistance Payments shall be a credit against the obligation of the City to pay Covenant Consideration. The period during which Covenant Consideration is paid, as described above, is the “Covenant Consideration Period.”
504. No Pledge. The making of Covenant Considerations pursuant to this Agreement shall not be deemed to constitute a pledge of any particular funds by the City, but instead an obligation contingent upon the construction and operation of the Conforming Hotel in accordance with this Agreement.
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505. City Disbursement Conditions. Notwithstanding anything in this Agreement which is or appears to be to the contrary, in no event will City pay any Covenant Consideration to Developer unless all of the following conditions precedent (collectively, the “City Disbursement Conditions”) are satisfied on the date of the applicable disbursement: (i) there shall be no Breach or Default by Developer hereunder, (ii) this Agreement shall remain in full force and effect and not have been terminated, and (iii) there shall be no default by the Developer under the Conforming Hotel Franchise Agreement and/or the Conforming Hotel Operating Agreement which remains uncured on the date such Covenant Considerations would otherwise be made to the Developer, including, without limitation, failure to Complete the Conforming Hotel prior to the time set forth in the Schedule of Performance and/or failure to operate the Conforming Hotel. 600. DEFAULTS, REMEDIES AND TERMINATION
601. Defaults. Occurrenc e of any of the following (a “Breach”) shall, after the giving of the notice required by Section 701, constitute a default (“Default(s)”) under this Agreement by the non performing Party:
(i) failure or delay in the due, timely and complete observance and performance of each and every condition, restriction, covenant or obligation applicable to the non-performing Party including, without limitation, the failure of a Party to accomplish one or more of the matters to be accepted as set forth on the Schedule of Performance by the respective times set forth therefor in the Schedule of Performance; or
(ii) failure or delay in the due, timely and complete observance and performance of each and every condition, restriction, covenant or obligation to be observed or performed by Developer under this Agreement; or
(iii) a default under any Construction Loan or any Hotel Operating Agreement which is not cured within the applicable cure period, if any, provided therein. 602. Right to Cure Following a Breach/Default . Unless a different cure period is expressly provided elsewhere in this Agreement, the Party whose acts or omissions to act give rise to a Breach as defined in Section 601 shall be entitled to cure, correct, or remedy such Breach, if (i) such defaulting Party commences curing said Breach within thirty (30) days of receipt of the Notice of Breach, as defined in Section 603, and (ii) such defaulting Party thereafter diligently and continuously pursues the curing of said Breach, and (iii) such defaulting Party fully completes such cure, correction or remedy within sixty (60) days of receipt of said Notice of Breach, or, if such Breach cannot reasonably be cured within said 60-day period, within such additional time as is reasonably necessary to cure such Breach, but in no event more than one hundred and fifty (150) days; provided, that (A) in the event the Breach is a failure to pay or discharge any monetary obligation hereunder when due (i.e., a monetary default), the defaulting Party shall fully complete such cure, correction or remedy within ten (10) days of receipt of the Notice of Breach and (B) in the event of a Breach under Section 701 (iii) above, there shall be no additional cure period under this Agreement. If a Breach is not cured within the applicable period provided above, it shall thereafter constitute a “Default”. 603. Notice of Breach . The non-breaching Party shall give written notice of default (“Notice of Breach ”) to th e non-performing Party, specifying the breach of this Agreement complained of by the non-breaching Party. Failure or delay in giving such notice shall not constitute a waiver of any breach of this Agreement.
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604. Waiver of Breach or Default . Except as otherwise expressly provided in this Agreement, any failure or delay by either Party in asserting any of its rights or remedies as to any Breach or Default shall not operate as a waiver of any Breach or Default or of any rights or remedies in connection therewith or of any other rights and remedies provided by this Agreement or by law, or deprive such Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 605. Legal Actions and Remedies.
605.1 Institution of Legal Actions; Judicial Reference . Any of the Parties may institute legal action to enforce the provisions of Section 606. All actions arising under this Agreement or relating to its interpretation shall be heard by a referee of the Orange County Superior Court pursuant to Code of Civil Procedure Sections 638, et seq. With respect to all judicial reference proceedings under this Agreement, Developer and City shall agree upon a single referee who shall then try all issues, whether of fact or law, and report a finding and judgment thereon and issue all legal and equitable relief appropriate under the circumstances of the controversy. If Developer and the City are unable to agree on a referee within ten (10) days of a written request to do so by either Party, either Party may seek to have one appointed pursuant to Code of Civil Procedure Section 640. The cost of such proceeding shall initially be borne equally by Developer and the City, but shall ultimately be borne by the Party who does not prevail. Any referee selected pursuant to this Section shall be considered a temporary judge appointed pursuant to Article 6, Section 21 of the California Constitution.

NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY

DISPUTE ARISING OUT OF THE MATTERS INCLUDED WITHIN THE SCOPE OF THE

JUDICIAL REFERENCE PROVISION ABOVE DECIDED BY A NEUTRAL REFEREE AS

PROVIDED BY CALIFORNIA LAW AND YOU ARE GIVING UP ANY RIGHTS YOU MIGHT POSSESS TO HAVE THE DISPUTE LITIGATED IN A COURT OR JURY TRIAL. BY

INITIALING IN THE SPACE BELOW, YOU ARE GIVING UP YOUR JUDICIAL RIGHTS TO

DISCOVERY AND APPEAL, UNLESS THOSE RIGHTS ARE SPECIFICALLY INCLUDED IN

THE JUDICIAL REFERENCE PROVISION OR THE STATUTES INCORPORATED THEREIN BY REFERENCE. IF YOU REFUSE TO SUBMIT TO JUDICIAL REFERENCE AFTER

AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO SUBMIT UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS JUDICIAL REFERENCE PROVISION IS VOLUNTARY. WE HAVE READ AND

UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF

MATTERS INCLUDED IN THE JUDICIAL REFERENCE PROVISION TO A NEUTRAL REFEREE.

Developer’s Initials City’s Initials
605.2 Applicable Law. The laws of the State of California applicable to agreements executed and to be performed in this state shall govern the interpretation and enforcement of this Agreement.
606. Termination by Developer. In the event that Developer is not in Default under this Agreement and prior to the Closing,
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(a) in the event of any Default of City prior to the Closing, or (b) one or more of Developer’s Conditions Precedent to the Closing is not satisfied on or before the Outside Closing Date and such failure is not due to the Default of Developer; or
(c) Developer disapproves the Property Condition,
then this Agreement may, at the option of Developer, be terminated by written Notice thereof to City pursuant to Section 207.1 and Section 701. From the date of the written Notice of termination of this Agreement by Developer to City because of the failure of a condition as described in subparagraph (a), (b) and/or (c), above this Agreement shall be deemed terminated and neither party shall have any further rights or obligations between the parties. In the event of termination pursuant to subparagraph (a) above, Developer may pursue any remedies it has hereunder, including without limitation specific performance. Upon such termination of this Agreement by the Developer, all monies or documents deposited by any party into a then-unclosed escrow shall be returned to the party making such deposit.

In the event that the Agreement is terminated due to an uncured Default of the City, the City shall pay all escrow cancellation costs. If the Agreement is terminated due to any other reason, the parties shall each pay one-half of the escrow termination costs.
607. Termination by City. In the event that City is not in Default under this Agreement and prior to the Closing:
(a) One or more of City’s Conditions Precedent to the Closing is not satisfied on or before the time set forth in the Schedule of Performance and such failure is not caused by City; or
(b) Closing does not occur on or before December 31, 2022; (c) Developer is otherwise in Default of this Agreement; then this Agreement and any rights of Developer or any assignee or transferee with respect to or arising out of this Agreement or the City Property, shall, at the option of City, be terminated by City by written Notice thereof to Developer. From the date of the written Notice of termination of this Agreement by City to Developer by virtue of the application of (a) and/or (b) above this Agreement shall be deemed terminated and there shall be no further rights or obligations between the parties. In the case of termination by virtue of (c), above, if the City may pursue any remedies it has hereunder subject to any restrictions or limitations upon such remedies set forth herein. Upon such termination of this Agreement by the City, all monies or documents deposited by any party into a then-unclosed escrow shall be returned to the party making such deposit, and any other funds of the Developer held by the City shall be returned to the Developer. In the event that the Agreement is terminated due to an uncured Default of the Developer, the Developer shall pay all escrow cancellation costs. If the Agreement is terminated due to any other reason, the parties shall each pay one-half of the escrow termination costs. 608. Acceptance of Service of Process. In the event that any legal action is commenced by Developer against City, service of process on City shall be made by personal service upon the City Manager of City with a copy to the City Attorney or in such other manner as may be provided by law.

In the event that any legal action is commenced by City against Developer, service of process on 32 4828-8136-9456v32/022046-0046 Page 377 of 640

Developer shall be made by personal service upon the managing member of the Developer, or in such other manner as may be provided by law.
609. Rights and Remedies Are Cumulative. Except as otherwise expressly stated in this Agreement to the contrary, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same Default or any other matter, which by the passage of time may become a Default by the other party. 610. Inaction Not a Waiver of Default. Any failures or delays by either party in asserting any of its rights and remedies as to any Default shall not operate as a waiver of any Default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. 611. Attorneys’ Fees . In any action between the parties to interpret, enforce, reform, modify, rescind or otherwise in connection with any of the terms or provisions of this Agreement, the prevailing party in the action shall be entitled, in addition to damages, injunctive relief or any other relief to which it might be entitled, reasonable costs and expenses including, without limitation, litigation costs and reasonable attorneys’ fees.
700. MISCELLANEOUS
701. Notices, Demands and Communications Between the Parties. Any approval, disapproval, demand, document or other notice (“Notice”) which either party may desireto give to the other party under this Agreement must be in writing and may be given by registered or certified U.S.

Mail, personal service, reliable overnight courier service, or by any commercially acceptable means to the party to whom the Notice is directed at the address of the party as set forth below, or at any other address as that party may later designate by Notice.

To City: City of Garden Grove
11222 Acacia Parkway
Garden Grove, California 92840
Attention: Scott C. Stiles
Phone No.: (714) 741-5100
Email: [email protected]
Cc: City Manager
Office of Economic Development
City Attorney
To Developer: Newage Garden Grove II, LLC
c/o Kam Sang Company, Inc.
411 E. Huntington Drive, #305
Arcadia, CA 91006
Attention: Ronnie Lam
Phone No.: (626)446-2988 (ext. 15)
Email: [email protected]
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Any written notice, demand or communication shall be deemed received (a) immediately if delivered by hand, (b) on the third day from the date it is postmarked if delivered by registered or certified mail, (c) on the next business day if sent by reliable overnight courier service, facsimile, or email.
702. Enforced Delay; Extension of Times of Performance. Notwithstanding anything to the contrary herein contained, performance by either party hereunder shall not be deemed to be in Default, and all performance and other dates specified in this Agreement shall be extended, where delays or Defaults are proximately caused by causes beyond the control or without the fault of the party claiming an extension of time to perform, which may include the following: war or acts of terrorism; insurrection; strikes; lockouts; 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; unusually severe weather; acts or omissions of the other party; any litigation, administrative or adjudicative challenge by third parties to the validity, applicability, interpretation or implementation of this Agreement, or the approval of the environmental analyses with respect to the Conforming Hotel and/or this Agreement, or acts or failures to act of any public or governmental agency or entity other than the City (which acts or failures to act of City shall not excuse performance by City). Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if notice by the party claiming such extension is sent to the other party within thirty (30) days of the commencement of the cause, or from the date of the notice thereof, if notice by the party claiming such extension is sent to the other party later than thirty (30) days after the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of City and Developer. The parties agree to reasonably consider requests for such extensions in good faith. Notwithstanding any provision of this Agreement to the contrary, the lack of funding to complete the Conforming Hotel shall not constitute grounds of enforced delay pursuant to this Section 702.
703. Transfers of Interest.
703.1 Prohibition. The qualifications and identity of Developer are very important and of particular concern to City. It is because of those qualifications and identity that City has entered into this Agreement with Developer. Except as provided in Section 703.2 below, no voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement, nor shall Developer nor any successor in interest thereto (i) make any total or partial sale, transfer, conveyance, assignment, subdivision, refinancing or lease of the whole or any part of the Site or the improvements thereon, or (ii) assign this Agreement, without the prior written approval of the City, except as expressly set forth herein. Any transfer or attempted transfer by Developer or any permitted successor of its rights under this Agreement or its interest in the Site in violation of this Section shall terminate this Agreement and all of the City’s obligations hereunder. 703.2 Permitted Transfers. Notwithstanding any other provision of this Agreement to the contrary, City approval of an assignment by the Developer of this Agreement or conveyance by the Developer of the Conforming Hotel or the Site or such portion thereof or interest therein, shall not be required in connection with any of the following:
(a) Any transfers to an entity or entities in which Developer retains a minimum of fifty-one percent (51%) of the ownership or beneficial interest and retains management and control of the transferee entity or entities.
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(b) The conveyance or dedication of any portion of the Site to the City or other appropriate governmental or public agency, or the granting of easements or permits to facilitate construction of the Conforming Hotel.
(c) Any requested assignment for financing purposes (subject to such financing being considered and approved by City pursuant to Section 309 herein), including the grant of a deed of trust to secure the funds necessary for land acquisition, construction and permanent financing of the Conforming Hotel (and under the terms of such deed of trust, the exercise by the Holder of any rights thereunder including, without limitation, exercise of the power of sale or foreclosure of the lien created thereby, or the acceptance of a conveyance in lieu of the exercise of such rights by such lender or any affiliate of such lender, and the Transfer by such lender or any of its affiliates acquiring the Site or Project).
(d) Any retail to an entity that is on a potential tenant list submitted by Developer to City or a retail lease with any other entity for a space that is less than 5,000 square feet. (e) Any transfer to Kam Sang and its Affiliate(s).
(f) Any transfer to a Hotel Operator that fulfills the conditions set forth in Section 406 hereof.

In the event of an assignment by Developer under subparagraph (a) above not requiring City’s prior approval, Developer nevertheless agrees that at least ten (10) days prior to such assignment Developer shall give written notice to City of such assignment and satisfactory evidence that the assignee has assumed jointly with Developer the obligations of this Agreement. 703.3 City Consideration of Requested Transfer. City agrees that it will not unreasonably withhold, condition, or delay approval of a request made pursuant to this Section 703, provided Developer delivers written notice to City requesting such approval. Such notice shall be accompanied by sufficient evidence regarding the proposed as signee’s or purchaser’s developmen t and/or operational qualifications and experience, its financial commitments and resources and its ability to comply with the covenants set forth herein, in sufficient detail to enable City to evaluate the proposed assignee or purchaser pursuant to the criteria set forth in this Section 703 and as reasonably determined by City. City shall evaluate each proposed transferee or assignee on the basis of its development experience and/or qualifications and experience in the operation of facilities similar to the Conforming Hotel, its financial commitments and resources and its ability to comply with those covenants set forth herein, and may reasonably disapprove any proposed transferee or assignee, during the period for which this Section 703 applies, which City determines does not possess equal or better qualifications than the transferring Developer, as applicable. An assignment and assumption agreement in form reasonably satisfactory to City’s legal counsel shall also be required for al l such proposed assignments. Within thirty (30) days af ter the receipt of Developer’s written notic e requesting City approval of an assignment or transfer pursuant to this Section 703, City shall either approve or disapprove such proposed assignment or shall respond in writing by stating what further information, if any, City reasonably requires in order to determine the request complete and determine whether or not to grant the requested approval. Upon receipt of such a response, Developer shall promptly furnish to City such further information as may be reasonably requested. 703.4 Successors and Assigns. All of the terms, covenants and conditions of this Agreement shall be binding upon Developer and its permitted successors and assigns. Whenever the 35 4828-8136-9456v32/022046-0046 Page 380 of 640

term “Developer” is used in this Agreement, such term shall include any other permitted successors and assigns as herein provided.
703.5 Assignment by City. City may assign or transfer any of its rights or obligations under this Agreement with the approval of Developer, which approval shall not be unreasonably withheld, conditioned, or delayed; provided, however, that City may assign or transfer any of its interests hereunder to a governmental agency or authority of the City at any time without the consent of Developer; provided further that any such assignee of City shall assume all of the obligations of City hereunder.
704. Applicable Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California applicable to persons and/or transactions having contacts only in the State of California.
705. Police Power. Nothing contained in this Agreement shall be deemed to limit, restrict, amend or modify, nor to constitute a waiver or release of, any ordinances, notices, orders, rules, regulations or requirements (now or hereafter enacted or adopted and/or as amended from time to time) of the City, its departments, commissions, agencies and boards and the officers thereof (for the purposes of this Section 705, collectively referred to as “City Entities”), including, without limitation, any precise or general plan or any zoning ordinances, or any duties, obligations, rights or remedies thereunder or pursuant thereto or the general police powers, rights, privileges and discretion of any City Bodies in the furtherance of the public health, welfare and safety of the inhabitants thereof, including, without limitation, the right under law to make and implement independent judgments, decisions and/or acts with respect to planning, environmental, and development (including, without limitation, approval or disapproval of plans and/or withholding of Building Permits) whether or not consistent with the provisions of this Agreement, any Exhibit attached hereto or any other documents contemplated hereby (collectively, “Cit y Rules and Powers”). In the event of any conflict, inconsistency or contradiction between any terms, conditions or provisions of this Agreement, the Exhibits or such other documents, on the one hand, and any such City Rules and Powers providing additional or broader rights to the City, on the other hand, the latter shall prevail and govern in each case. Notwithstanding the foregoing, however, nothing in this Section 705 is intended to limit or restrict Developer’s rights set forth in this Agreement. 706. Non-Liability of Officials and Employees of City. No member, official or employee of City or the City shall be personally liable to Developer or any successor in interest, in the event of any Default or breach by City or for any amount which may become due to Developer or its successors, or on any obligations under the terms of this Agreement. 707. Relationship Between City and Developer. It is hereby acknowledged that the relationship between City and Developer is not that of a partnership or joint venture and that City and Developer shall not be deemed or construed for any purpose to be the agent of the other. Accordingly, except as expressly provided herein or in the Attachments hereto, City shall have no rights, powers, duties or obligations with respect to the development, operation, maintenance or management of the Conforming Hotel. Developer agrees to indemnify, hold harmless and defend City from any claim made against City arising from a claimed relationship of partnership or joint venture between City and Developer with respect to development, operation, maintenance or management of the Site or the Conforming Hotel or any portion thereof, which claim arises from or is based upon actions by Developer.
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708. City Approvals and Actions. This Agreement shall be administered by the City Manager, or his designated representative, following approval of this Agreement by the City. The City Manager (or his authorized representative) shall have the authority to issue interpretations, waive provisions and enter into amendments of this Agreement on behalf of the City, including approving Developer’s fulfillmen t of the requirements of Section 301.1, so long as such actions do not substantially change the uses or development permitted on the Site, or substantially add to the costs of the City as specified herein as agreed to by the City Council, unless the City Manager elects at his discretion to refer such matter to the City Council and such amendments may include for purposes of this Agreement, extensions of time specified in the Schedule of Performance of up to ninety (90) days in each instance. All other interpretations, waivers, amendments or extensions of time shall require the written consent of the City Council. If there is no time specified in this Agreement for City action on plans, drawings or other documents submitted to it, the City shall approve or disapprove such documents within thirty (30) days of submission of those documents to the City. Whenever the City’s approval is required under the terms of this Agreement, such approval shall not be unreasonably withheld, conditioned, or delayed, unless specified otherwise herein. 709. Counterparts. This Agreement may be signed in multiple counterparts which, when signed by all parties, shall constitute a binding agreement. This Agreement is executed in three (3) originals, each of which is deemed to be an original.
710. Integration. This Agreement contains the entire understanding between the parties relating to the transaction contemplated by this Agreement. All prior or contemporaneous agreements, understandings, representations and statements, oral or written, are merged in this Agreement and shall be of no further force or effect. Each party is entering this Agreement based solely upon the representations set forth herein and upon each party’s own independent investigation of any and all facts such party deems material. This Agreement includes Exhibits A through L, all of which are incorporated herein as if set forth herein in full, and which together with the Agreement constitute the entire understanding and agreement of the parties, notwithstanding any previous negotiations or agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof.
711. Real Estate Brokerage Commission. City and Developer each represent and warrant to the other that no broker or finder is entitled to any commission or finder’s fee in connection with the Conveyance of the City Property or any other aspect of this transaction, and Developer and City agree to defend and hold harmless the each other from any claim to any such commission or fee resulting from any action on its part.
712. Titles and Captions. Titles and captions are for convenience of reference only and do not define, describe or limit the scope or the intent of this Agreement or of any of its terms. Reference to section numbers are to sections in this Agreement, unless expressly stated otherwise. 713. Interpretation. As used in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall each be deemed to include the others where and when the context so dictates. Th e word “including” shall beconstrued as if followed by thewords “without limitation.” This Agreement shall be interpreted as though prepared jointly by both parties. 714. No Waiver. No delay or omission by any Party in exercising any right or power accruing upon non-compliance or failure to perform by any other Party under any of the provisions of this Agreement shall impair such right or power or be construed as a waiver thereof. A waiver by any 37 4828-8136-9456v32/022046-0046 Page 382 of 640

Party of any of the covenants or conditions to be performed by any other Party shall not be effective unless in writing and shall not be construed as a waiver of any succeeding breach or non-performance of the same or other covenants and conditions hereof.
715. Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made in writing and in each instance signed on behalf of each party. 716. Severability. If any term, provision, condition or covenant of this Agreement or its application to any party or circumstances shall be held, to any extent, invalid or unenforceable, the remainder of this Agreement, or the application of the term, provision, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected, and shall be valid and enforceable to the fullest extent permitted by law. In the event a material term or provision of this Agreement is rendered invalid, void and/or unenforceable, or due to changes in the law such term or provision would materially alter the terms of the transactions contemplated herein, the parties agree to meet and negotiate in good faith to attempt to reform this Agreement to accomplish the intent of the parties.
717. Computation of Time. The time in which any act is to be done under this Agreement is computed by excluding the first day (such as the day escrow opens) and including the last day, unless the last day is a holiday or Saturday or Sunday, and then that day is also excluded. The term “holiday” shall mean all holidays as specified in Section 6700 and 6701 of the California Government Code. If any act is to be done by a particular time during a day, that time shall be Pacific Time Zone time. 718. Legal Advice. Each party represents and warrants to the other the following: they have carefully read this Agreement, and in signing this Agreement, they do so with full knowledge of any right which they may have; they have received independent legal advice from their respective legal counsel as to the matters set forth in this Agreement, or have knowingly chosen not to consult legal counsel as to the matters set forth in this Agreement; and, they have freely signed this Agreement without any reliance upon any agreement, promise, statement or representation by or on behalf of the other party, or their respective agents, employees or attorneys, except as specifically set forth in this Agreement, and without duress or coercion, whether economic or otherwise. 719. Time of Essence. Time is expressly made of the essence with respect to the performance by City and Developer of each and every obligation and condition of this Agreement. 720. Cooperation. Each party agrees to cooperate with the other in this transaction and, in that regard, to sign any and all documents which may be reasonably necessary, helpful or appropriate to carry out the purposes and intent of this Agreement including, but not limited to, releases or additional agreements. The Developer and the City shall mutually consider reasonable requests for amendments to this Agreement made by any of the parties hereto, provided such requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. 721. Conflicts of Interest. No member, official or employee of City shall have any personal interest, direct or indirect, in this Agreement, nor shall any such member, official or employee participate in any decision relating to the Agreement which affects his personal interests or the interests of any corporation, partnership or association in which he is directly or indirectly interested. 722. Time for Acceptance of Agreement by City . This Agreement, when executed by Developer and delivered to City, must be authorized, executed and delivered by City on or before 38 4828-8136-9456v32/022046-0046 Page 383 of 640

forty-five (45) days after signing and delivery of this Agreement by Developer or this Agreement shall be void, except to the extent that City shall consent in writing to a further extension of time for th e authorization, execution and delivery of this Agreement. [signature page follows]
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IN WITNESS WHEREOF, the parties hereto have signed this Agreement as of the date set forth above.

CITY:

CITY OF GARDEN GROVE, a municipal
corporation duly organized and existing under the
Constitution and laws of the State of California
By:

Its:

ATTEST:

City Clerk
APPROVED AS TO FORM:

City Attorney
Stradling Yocca, Carlson & Rauth
City Special Counsel
DEVELOPER:

NEWAGE GARDEN GROVE II LLC, a California
limited liability company
By:

Its:

By:

Its:
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EXHIBIT A

SITE MAP
EXHIBIT A-1
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EXHIBIT B

LEGAL DESCRIPTION
EXHIBIT B-1
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EXHIBIT C

GRANT DEED

RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:

City of Garden Grove
11222 Acacia Parkway
Garden Grove, California 92842
Attention: Scott C. Stiles, City Manager
This document is exempt from payment of a recording fee pursuant to Government Code Section 27383.

GRANT DEED
For valuable consideration, receipt of which is hereby acknowledged, CITY OF GARDEN GROVE, a municipal corporation duly organized and existing under the Constitution and laws of the State of California (the “City”), as of _________________________, 20__, hereby grants to NEWAGE GARDEN GROVE II LLC, a California limited liability company (the “Developer”), the real property hereinafter referred to a s the “Property”, described in Exhibit A attached hereto and incorporated herein, subject to the existing easements, restrictions and covenants of record described there.

IN WITNESS WHEREOF, the parties hereto have executed this Grant Deed on the respective dates set forth below.

CITY:

EXHIBIT C-1
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CITY OF GARDEN GROVE,
a municipal corporation
By:

Its:

APPROVED AS TO FORM:

Stradling Yocca Carlson & Rauth PC
Special Counsel to City
ACCEPTED BY DEVELOPER:

NEWAGE GARDEN GROVE II, LLC,
a California limited liability company
By:

Its:

By:

Its:

EXHIBIT C-2
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ATTACHMENT NO. 1

LEGAL DESCRIPTION OF CITY PROPERTY
ATTACHMENT NO. 1 TO EXHIBIT C
4828-8136-9456v32/022046-0046 Page 390 of 640

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

STATE OF CALIFORNIA )
) ss.

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

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

WITNESS my hand and official seal.

Signature of Notary Public

OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent reattachment of this form.

CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT Individual
Corporate Officer
________________________________ ___________________________ ________________________________ ___________________________ Title Or Type Of Document Title(s)
Partner(s) Limited General
Attorney-In-Fact ________________________________ ___________________________ Trustee(s) Number Of Pages
Guardian/Conservator
Other:________________________________ _____
________________________________ ___________________________Signer is representing: Date Of Documents Name Of Person(s) Or Entity(ies) ________________________________ ___________________________ ________________________________ ___________________________ ________________________________ ___________________________ Signer(s) Other Than Named Above