Agenda — Garden Grove City Council, September 13, 2022 (part 3 of 4)

4828-8136-9456v32/022046-0046

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 t he laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature of Notary Public

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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
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4828-8136-9456v32/022046-0046

EXHIBIT D

DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS

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.

DECLARATION OF CONDITIONS, COVENANTS

AND RESTRICTIONS
THIS DECLARATION OF CONDITIONS, COVENANTS AND RESTRICTIONS (this “Declaration”) is made this day of , 20___ 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 (the “City”), and NEWAGE GARDEN GROVE II LLC, a California limited liability company (the “Developer”) with reference to the following:

A. Palm Court Lodging, LLC, a California limited liability company (“Palm Court”) and the Garden Grove Agency forCommunity Development(the “Former Agency” now succeeded by the “Successor Agency” to the Former Agency) entered into tha t certain Disposition and De velopment Agreement by and between the Garden Grove Agency for Community Development 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 property for and development of a second hotel (the “Agency Property”) has not occurred. 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 not less than __________ square feet of leasable area of high -quality restaurants and __________ square feet gross leasable area of high-quality retail), the hotel portion of which shall meet not less than the AAA Four Diamond Hotel Requirements (as defined below) and of equal or greater (i) quality of exterior construction and Furniture, Fixtures, and Equipment, (ii) quality and scope of amenities, and (iii) service level, as that found in the Nickelodeon Hotel & Resort located in Punta EXHIBIT D-1
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Cana, Dominican Republic or, as an alternative to a Nickelodeon Hotel & Resort, another AAA Four Diamond Hotel and, in either case, construction and operating scope and quality shall be not less than the Minimum Development Standards and construction costs should be not less than the Minimum Construction Costs (the “Conforming Hotel”) to be constructed, opened and operated on the Agency Property, property owned by the City (“City Property”), and additional land owned by third parties.

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 have concurrently herewith entered into the City DDA (this “Agreement”) pursuant to which the Developer will construct and operate the Conforming Hotel on the Site through the implementation of both the Agency DDA and this Agreement. All capitalized terms not defined herein shall have the meaning set forth in the City DDA.

D. The City DDA provides for, among other things, restrictions and obligations regarding the use, maintenance and operation of the Conforming Hotel on the Site by the Developer and the Developer’s successors and assigns.

NOW, THEREFORE, the Developer hereby covenants, agrees and declares by and for itself and its successors and assigns that all of the Site shall be held, sold, conveyed, hypothecated, encumbered, used, occupied and improved, subject to the following covenants, conditions, restrictions and easements (sometimes collectively, “Covenants”) which are hereby declared to be for the benefit of the whole Site. These covenants, conditions, restrictions and easements shall run with the Site and shall be binding on all parties having or acquiring any right, title or interest in the Site or any part thereof (including each parcel thereof) and shall inure to the benefit of each owner thereof and its successors and assigns, and are imposed upon the Site and every part thereof (including each parcel thereof) as a servitude in favor of each and every parcel as the dominant tenement or tenements.

1. Use and Operation. The Developer covenants and agrees to devote, use, operate, and maintain the Site as a Conforming Hotel (as defined in the City DDA). All uses conducted on the Site, including, without limitation, all activities undertaken by the Developer pursuant to the Agreement, shall conform to all applicable Governmental Requirements (as defined in the City DDA), and the recorded documents pertaining to and running with the Site.

2. 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:

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(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 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 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 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 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 o r vendees of the premises.”

3. Nondiscrimination in Employment. Developer covenants 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 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.

4. Maintenance of the Site. The Developer shall maintain the Site and the Conforming Hotel, and all improvements thereon, including all landscaping, in compliance with all applicable provisions of the Garden Grove Municipal Code.

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(a) Developer shall maintain the Conforming Hotel, in a condition equal to the quality and level of services and amenities existing for the Conforming Hotel as of the date of the issuance of the Release of Construction Covenants and in accordance with the Maintenance Standards, as hereinafter defined, the improvements and landscaping on the Site. Said improvements shall include, but not be limited to, buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping, architectural elements identifying the Site and any and all other improvements on the Site. (b) To accomplish the maintenance, Developer shall either staff or contract with and hire licensed and qualified personnel to perform the maintenance work, including the provision of labor, equipment, materials, support facilities, and any and all other items necessary to comply with the requirements of this Agreement.
(c) The following standards (“Maintenance Standards”) shall becomplied with by Developer and its maintenance staff, contractors or subcontractors:
(i) Landscape maintenance shall include, but not be limited to:
watering/irrigation; fertilization; mowing; edging; trimming of grass; tree and shrub pruning; trimming and shaping of trees and shrubs to maintain a healthy, natural appearance and safe road conditions and visibility, and irrigation coverage; replacement, as needed, of all plant materials; control of weeds in all planters, shrubs, lawns, ground covers, or other planted areas; and staking for support of trees. (ii) Clean-up maintenance shall include, but not be limited to: maintenance of all sidewalks, paths and other paved areas in clean and weed-free condition; maintenance of all such areas clear of dirt, mud, trash, debris or other matter which is unsafe or unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the maintenance operations are performed to ensure that all cuttings, weeds, leaves and other debris are properly disposed of by maintenance workers.
(iii) All maintenance work shall conform to all applicable federal and state Occupational Safety and Health Act standards and regulations for the performance of maintenance.
(iv) Any and all chemicals, unhealthful substances, and pesticides used in and during maintenance shall be applied in strict accordance with all governing regulations.

Precautionary measures shall be employed recognizing that all areas are open to public access. (v) The Conforming Hotel (as the term is defined in the City DDA) shall be maintained in conformance and in compliance with the approved Site construction and architectural plans and design scheme, as the same may be amended from time to time with the approval of the City and reasonable commercial development maintenance standards for similar projects, including but not limited to: painting and cleaning of all exterior surfaces and other exterior facades comprising all private improvements.
(vi) The Conforming Hotel shall be maintained as required by this Section 4 in good condition and in accordance with the custom and practice generally applicable, to comparable first-class Hotel facilities located within Orange County, California. In the event Developer does not maintain the Conforming Hotel on the Site in the manner set forth herein and in EXHIBIT D-4
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accordance with the Maintenance Standards, City shall notify Developer in writing if the condition of said improvements do not meet with the Maintenance Standards specifying the deficiencies and the actions required to be taken by Developer to cure the deficiencies. Upon notification of any maintenance deficiency, Developer shall have thirty (30) days within which to correct, remedy or cure the deficiency. If the written notification states the problem is urgent relating to the public health and safety of the City or the City, then Developer shall have forty-eight (48) hours to rectify the problem.

5. Hotel Operators. City acknowledges that it has pre-approved Kam Sang Company, Inc. or any Affiliate as Hotel Operator. City shall have the sole and absolute discretion to approve any other Hotel Operator, except in the event that the Conforming Hotel is operated by a national brand operator with at least twenty-five hundred (2,500) hotel rooms or at least five (5) hotels in the AAA Four Diamond or higher rating category, in which case no such approval shall be required.

6. Compliance with Law. Developer shall comply with all local, state and federal laws relating to the development, operation, and use of the conforming Hotel and/or the condition of the Site. Local laws for the purposes of this section shall include only those ordinances which are nondiscriminatory in nature and applicable to the public welfare, health, safety and aesthetics. If any new local laws relating to uses of or condition of the improvements create a condition or situation that constitutes a lawful nonconforming use as defined by local ordinance with respect to the Site or any portion thereof, then so long as the lawful nonconforming use status remains in effect (i.e., until such lawful status is properly terminated by amortization as provided for in the new local law or otherwise), Developer shall be entitled to enjoy the benefits of such lawful nonconforming use pursuant to the lawful nonconforming uses ordinance. 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 (as defined in the City DDA) issued by the City for the portion of the Conforming Hotel to be constructed on the Site, the Developer shall not appeal any assessed valuation of the Site, except that Developer may appeal the amount by which any increase in such assessed valuation is in excess of the increase, over the same period of time, in the CPI. For purposes of this Section, “CPI ” shall mean th e Consumer Pric e Index-Urban 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.

7. Environmental Requirements.
(a) Developer Precautions. From and after Date of Agreement, the Developer shall use commercially reasonable efforts to prevent the release into the environment of any Hazardous Materials which are located in, on or under the Site. Such precautions shall include compliance with all Governmental Requirements with respect to Hazardous Materials. (b) Required Disclosures. From and after 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 Site, 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 Site including, but not limited to, all permit applications, permits and reports.

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(c) Developer Indemnity. Except as to the representations, warranties and covenants of the City in the Agency DDA and City DDA to the contrary, Developer agrees to indemnify, defend and hold City and its 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 (i) 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 after the date hereof, or (ii) the violation, or alleged violation, of any statute, ordinance, order, rule, regulation, permit, judgment or license relating to the use, generation, release, discharge, storage, disposal or transportation of Hazardous Materials on, under, in or about, to or from, the Site which occurs after the date hereof. At the request of the Developer, the City shall cooperate with and assist the Developer in its defense of any such claim, action, suit, proceeding, loss, cost, damage, liability, deficiency, fine, penalty, punitive damage, or expense; provided that the City shall not be obligated to incur any expense in connection with such cooperation or assistance.

8. 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 attorney ’s fees and costs), which may be caused by any acts or omissions of the Developer under this Declaration, 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 Declaration, 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 in the Agency DDA and/or City DDA (except to the extent the invalidity of such covenant, representation, or warranty has been 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 the Agreement, or the approval of any environmental analysis with respect to the Conforming Hotel and the Agreement (an “Action”).and (c) any Action brought with respect to the obligations set forth in Section 407 of the DDA. The Developer shall not be liable for property damage or bodily injury occasioned by the negligence of the City or its agents or employees. 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 this regard, Developer’s obligation and right to defend shall include the right to hire (subject to written approval by the City) 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 Develop er’s consent shall not constitute a default by City but shall release Developer’s obligations under this Section 9 with respect to such settled claim.

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9. Effect of Violation of the Terms and Provisions of this Declaration. The covenants established in this Declaration shall, without regard to technical classification and designation, be binding for the benefit and in favor of the City, its successors and assigns. The covenants contained in this Declaration shall remain in effect for the periods of time specified herein.

The City and its successors and assigns are deemed the sole beneficiaries of the terms and provisions of this Declaration and of the covenants running with the land, for and in the City’s own right and for the purposes of protecting the interests of the community and other parties, public or private. The Declaration and the covenants shall run in favor of the City, without regard to whether the City has been, remains or is an owner of any land or interest therein in the Property. The City shall have the sole right, if the Declaration or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches.

10. 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 shall not be unreasonably withheld, conditioned, or delayed, but only for the purpose of securing loans of 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 the Agreement. In no event, however, shall the amount or amounts of indebtedness secured by mortgages 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 sets 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.

11. Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure. With respect to any mortgage or deed of trust approved by the City pursuant to Section 11 above and granted by Developer as provided therein, whenever the City may deliver any notice or demand to Developer with respect to any breach or default by the Developer of any term or provision of this Declaration, the City shall at the same time deliver to each Holder of record of any mortgage or deed of trust authorized under this Declaration which the City has either approved or of which it has Actual Knowledge (each, a “Holder” or “Lender”) a copy of such notice or demand.

City shall not commence the exercise of its remedies under this Declaration 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 be performed under this Declaration , this Agency DDA and/or the City DDA, 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 EXHIBIT D-7
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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, the Agreement.
(c) Nothing contained in this Declaration or the 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 the Agreement, or any portion thereof (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly 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 the 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 the Agreement, to a Release of Construction Covenants.

12. 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 payment of any unpaid principal amount of, plus accrued and unpaid interest thereon.

13. 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 ofdefault. If the holder of any mortgage or deed of trust has not exercised its option to construct pursuant to Section 12 above, 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 permitted pursuant to this Declaration.

14. Tolling of Time Periods . During such time as a Holder is seeking to obtain possession or convey the Site to an approved third party in conformity with Section 12(b), any deadlines for performance of Developer’s obligations set forth in this Agreement, except as to the performance of any obligation to pay money, shall be deemed to be tolled. Immediately upon such Holder obtaining possession and/or conveying the Site to a third party reasonably acceptable to the City pursuant to (and within the time frame set forth in) Section 12 hereof, such tolling shall cease, and the deadlines for performance of such obligations shall be deemed to have been extended by a period equal to the time EXHIBIT D-8
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between the date on which the Holder has given notice to the City pursuant to Section 12(b) and the date on which the Holder obtains possession of and/or conveys the Site to a third party reasonably acceptable to the City pursuant to Section 12.

15. Miscellaneous Provisions.
a. If any provision of this Declaration or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative or unenforceable, the remainder of this Declaration, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; it shall not be deemed that any such invalid provision affects the consideration for this Declaration; and each provision of this Declaration shall be valid and enforceable to the fullest extent permitted by law. b. This Declaration shall be construed in accordance with the laws of the State of California.
c. This Declaration shall be binding upon and inure to the benefit of the successors and assigns of the Developer.
d. In the event action is instituted to enforce any of the provisions of this Declaration, the prevailing party in such action shall be entitled to recover from the other party thereto as part of the judgment, reasonable attorney’s fees and costs.

16. Effect of Declaration. The covenants and agreements established in this Declaration shall, without regard to technical classification and designation, be binding on Developer and any successor in interest to the Site, or any part thereof (including each parcel thereof), for the benefit of and in favor of the City, its successors and assigns regardless of whether such benefited parties have or had any interest in or to the Site, except with regard to enforcement of the provisions of this Declaration, including all Covenants, which shall be solely the right of the City. No violation or breach of the covenants, conditions, restrictions, provisions or limitations contained in this Grant Deed shall defeat or render invalid or in any way impair the lien or charge of any mortgage or deed of trust or security interest permitted by the City DDA ; provided, however, that any subsequent owner of the Site shall be bound by such covenants, conditions, restrictions, limitations and provisions, whether such owner’s title was acquired by foreclosure, deed in lieu of foreclosure, trustee’ssale or otherwise.

17. Term of Declaration. The Covenants set forth in this Declaration shall remain in effect for the term set forth herein. The nondiscrimination Covenants set forth in Section 2 shall remain in effect in perpetuity. The use and operating Covenants set forth in Sections 1, 5, and 6 shall commence upon the issuance of a Release of Construction Covenants and terminate on the thirtieth (30
th) anniversary date thereof. The Covenants contained in Sections 6, 7, and 8 shall be effective for a period beginning upon the date that the Declaration is recorded against the Site and terminating on the thirtieth (30
th) anniversary date of such recordation. The Maintenance Covenants set forth in Section 4 shall remain in effect for the duration of the City’s Municipal Code. The Covenants set forth in Sections 10, 11, and 12 and the provisions of Sections 13 and 14 shall remain in effect until the City issues a Release of Construction Covenants.

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IN WITNESS WHEREOF, the parties hereto have executed this instrument the day and year first hereinabove written.

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:

EXHIBIT D-10
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ATTACHMENT NO. 1 TO EXHIBIT D

LEGAL DESCRIPTION OF SITE
(Insert legal description of City Property and Agency Property at time of Recordation) ATTACHMENT NO. 1 TO EXHIBIT D
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STATE OF CALIFORNIA )
) ss.

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.

STATE OF CALIFORNIA )
) ss.

I certify under PENALTY OF PERJURY under t he 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.

EXHIBIT E

PRELIMINARY CAPITAL COST BUDGET
Rounded
Land Cost $3,100,000
Site Work $6,700,000
Building Shell $125,000,000
Water Experience $36,300,000
FF&E Costs $22,500,000
Parking Garage $13,900,000
Construction Contingency $10,300,000
Soft Costs $29,800,000
Predevelopment Costs $29,400,000
Total $277,000,000
EXHIBIT E-1
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EXHIBIT F

RELEASE OF CONSTRUCTION COVENANTS

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
(Space above for Recorder’s Use.)

RELEASE OF CONSTRUCTION COVENANTS
THIS RELEASE OF CONSTRUCTION COVENANTS (the “Release”) is made by the CITY OF GARDEN GROVE, a municipal corporation duly organized and existing under the Constitution and laws of the State of California (the “City”), and NEWAGE GARDEN GROVE II, LLC, a California limited liability company (the “Developer”), as of ___________________, 20__.

R E C I T A L S
A. The City and the Developer have entered into that certain Disposition and Development Agreement (the “DDA”) dated as of ___________ 2022, concerning the development of certain real property situated in the City of Garden Grove, California as more fully described in Attachment No. 1 attached hereto and made a part hereof.

B. As referenced in Section 310 of the DDA, the City is required to furnish the Developer or its successors with a Release of Construction Covenants upon completion of the Conforming Hotel (as defined in the DDA), which Release is required to be in such form as to permit it to be recorded in the Orange County Clerk-Recorder’s offic e for the County of Orange, California. This Release is conclusive determination of satisfactory completion of the construction and development required by the DDA.

C. The City has conclusively determined that such construction and development has been satisfactorily completed for the Conforming Hotel described herein.

NOW THEREFORE:

1. As provided in the DDA, the City does hereby certify that the construction of the Conforming Hotel described in the DDA has been satisfactorily performed and completed, and that such development and construction work complies in all respects with the DDA.

2. This Release does not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage or any insurer of a mortgage securing money loaned to finance improvements and/or development of the Conforming Hotel, or any part thereof.

This Release is not a notice of completion as referred to in Section 3093 of the California Civil Code.

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IN WITNESS WHEREOF, the City has executed this Certificate as of the date set forth above.

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
APPROVED BY DEVELOPER:

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

Its:

By:

Its:

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ATTACHMENT NO. 1 TO EXHIBIT F

LEGAL DESCRIPTION
(to be inserted at time of recordation)
ATTACHMENT NO. 1 TO EXHIBIT F
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STATE OF CALIFORNIA )
) ss.

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.

EXHIBIT G

SCHEDULE OF PERFORMANCE

PERFORMANCE ITEMS DATE
Preclosing Obligations

1. City to deliver to Developer a standard
preliminary title report
Prior to or concurrently with Date of
Agreement

2. Execution of DDA by City and Developer Within ten (10) business days following City approval of DDA

3. Developer obtain Land Use Approvals with
exception of Parcel map. Concurrently until approval of the DDA

4. City and Developer Open Escrow Within thirty (30) days following the Date of Agreement

5. Develop shall enter into an agreement with a
licensed architect to prepare design
specifications, and licensed engineer to prepare a
Map in compliance with the California
Subdivision Map Act.

On or before October 14, 2022

6. Developer shall approve or disapprove title
Exceptions.

Within thirty (30) days of the receipt of the
preliminary title report

7. Developer shall approve or disapprove of the
Property Condition. Within (30) days of the Date of Agreement

8. Developer shall provide evidence of
Predevelopment Financing
On or before November 30, 2022

9. City Shall Approve the Hotel Operator and Hotel
Operating Agreement.

On or before November 30, 2022 (already
approved Kam Sang. Do we need this
condition?)

10. Developer submit completed application for
tentative Subdivision Map, Development
Agreement, and other necessary or desired Land
Use Approvals.

On or before November 30, 2022
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PERFORMANCE ITEMS DATE

11. Developer has obtained insurance. On or before close of Escrow

12. Developer to Close Escrow. On or before December 31, 2022 Post Closing Obligations

1. Developer shall provide evidence to the City that
it has begun processing Final Map(s). On or before January 30, 2023

2. Developer shall begin processing Final Map(s)
with the County of Orange. On or before April 30, 2023

3. City shall have approved the Final Site Plan and
the Developer shall have cause to be prepared
the Schematic Design for the Conforming Hotel.

On or before May 30, 2023

4. Developer shall have submitted the Design
Development Drawings (exterior Designs and
Specifications only) to the City for initial review
as detailed below:

A. Developer submits on site civil and
grading for Conforming Hotel for City
approval.

B. Developer submits shoring & excavation
plans for Conforming Hotel for City
approval.

On or before September 30, 2023

5. Developer shall have provided City with
evidence of Construction Financing to fund
construction of the Conforming Hotel in
accordance with the Capital Cost Budget.

On or before June 30, 2024

6. Developer submits foundation construction
document package for Conforming Hotel for
City approval. January 1, 2024
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PERFORMANCE ITEMS DATE

7..Developer submits Construction Drawings for
Parking Structure, core and shell of Hotels, and
exterior of Conforming Hotel for City approval.

May 1, 2024

8. City to approve or disapprove Construction
Financing.

Within thirty (30) days after receipt of
submittal of construction documents.

9. Developer shall have received Building Permits
and recorded and funded its Construction
Financing.

On or before August 1, 2024.

10. Developer shall provide cuts with the
Construction Contract. On or before September 30, 2024.

11. Site excavation begins. On or before November 1, 2024.

12. Developer to Commence Construction of
Conforming Hotel. On or before February 1, 2025.

13. Developer to complete Construction of the
Conforming Hotel.

Twenty-four (24) Months following
commencement of construction.

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EXHIBIT H

RIGHT OF ENTRY AGREEMENT
(Due Diligence)
This RIGHT OF ENTRY AND LICENSE AGREEMENT (Due Diligence) (this “Agreement”), dated for purposes of identification only this day of ____, 2022 (the “Date of Agreement”), i s entered 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 (the “City”), and NEWAGE GARDEN GROVE II LLC, a California limited liability company (the “Developer”).

RECITALS:

A. The City is the owner of certain real property located in the City of Garden Grove, California (the “City Property”). The City Property is (i) depicted on th e “Map” and (ii) lega lly described in the “Legal Description,” each of which is attached hereto as Attachment No. 1 and Attachment No. 2, respectively, and incorporated herein by this reference.

B. Pursuant to that certain Disposition and Development Agreement dated as of __________ __, 20___ by and between the City and the Developer, (the “DDA”), the City has agreed to convey (the “Conveyance”) the City Property to the Developer. Capitalized Terms not defined herein shall have the meaning set forth in the DDA.

C. Pursuant to Section 206 of the DDA, representatives of the Developer will have the right of access to all portions of the City Property at all reasonable times for the purpose of obtaining data, making surveys and conducting tests, including the investigation of the environmental and physical condition of the City Property.

D. The Developer desires to enter the City Property for those purposes set forth above, and the City desires to accommodate the Developer’s desire to commence such actions by granting a right of entry as provided herein.

NOW, THEREFORE, in consideration of the mutual promises, covenants and agreements herein contained, and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto agree as follows:

Section 1. Right of Entry. Provided that all of the terms and conditions of Section 2 of this Agreement are fully satisfied, the City hereby grants to the Developer and its agents and contractors, the exclusive right to enter upon, in and below the City Property for the purpose of inspection and investigation (the “License”) and for no other purpose s without the prior written approval of the City. The License shall include, without limitation, the right to generally inspect, examine and test in, on and beneath the City Property in a manner as is generally conducted in a Phase II environmental audit or survey and/or a soils test, including the drilling of boring holes and the removal of test samples from the City Property. This Agreement shall automatically terminate and expire on the later of (i) the “Closing” or (ii) the “Outside Closing Date” (as such term is defined in the DDA); in the event of the latter, the Developer shall promptly return the City Property to EXHIBIT H-1
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substantially the same condition as existed prior to the Date of Agreement (as hereinafter defined in Section 11.19 hereof).

Section 2. Conditions to Entry. Prior to Developer entering the City Property, the following conditions must be satisfied (the “Conditions Precedent”):

2.1 Insurance. Developer shall secure, prior to commencing any activities under this Agreement, and maintain during the term of this Agreement, insurance coverage as follows:
a. Workers’ Compensation Insurance as required by California statutes; b. Comprehensive General Liability Insurance, or Commercial General Liability Insurance, including coverage for Contractual Liability, Personal Injury Liability, Products/Completed Operations Liability, Broad-Form Property Damage and Independent Contractor ’s Liability, in an amount of not less than Two Million Dollars ($2,000,000.00) per occurrence, combined single limit, written on an occurrence form; and
c. Comprehensive Automobile Liability coverage, including – as applicable – owned, non-owned and hired autos, in an amount of not less than One Million Dollars ($1,000,000.00) per occurrence, combined single limit, written on an occurrence form.

The City Manager, with the consent of the City’s Risk Manager, is hereby authorized to reduce the requirements set forth above in the event the City Manager determines that such reduction is in the City’s best interest.

Each insurance policy required by this Agreement shall contain the following clauses:
“This insurance shall not be canceled, limited in scope or coverage, or nonrenewed until after thirty (30) days ’ prior written notice has been given to the City Clerk, 11222 Acacia Parkway, Garden Grove, California 92840.”
“It is agreed that any insurance maintained by the City ofGarden Grove shall apply in excess of and not contribute with insurance provided by this policy.”
Each insurance policy required by this Agreement, excepting policies for workers ’ compensation, shall contain the following clause:
“The City of Garden Grove, its officials, agents, employees, representatives, and volunteers are added as additional insureds as respects operations and activities of, or on behalf of the named insured, performed under contract with the City of Garden Grove.” As one of the Conditions Precedent under this Agreement, Developer shall deliver to the City (i) insurance certificates confirming the existence of the insurance required by this Agreement, and including the applicable clauses referenced above and (ii) endorsements to the above-required policies, which add to these policies the applicable clauses referenced above. Such endorsements shall be signed by an authorized representative of the insurance company and shall include the signatory ’s company affiliation and title. Should i t be deemed necessary by the City, it shall be Developer’s responsibility EXHIBIT H-2
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to see that the City receives documentation, acceptable to the City, which sustains that the individual signing such endorsements is indeed authorized to do so by the insurance company. Also, the City has the right to demand, and to receive within a reasonable time period, copies of any insurance policies required under this Agreement.

In addition to any other remedies the City may have if Developer fails to provide or maintain any insurance policies or policy endorsements to the extent and within the time herein required, the City may, at its sole option:
(a) Obtain such insurance and charge the Developer for the amount of the premium for such insurance; or
(b) Terminate this Agreement.

Exercise of any of the above remedies, however, is an alternative to other remedies the City may have and is not the exclusive remedy for Developer’s failure to maintain insuranc e or secure appropriate endorsements.

Nothing herein contained shall be construed as limiting in any way the extent to which Developer may be held responsible for payment of damages to persons or property resulting from Developer’s or its subcontractor’s performance under this Agreement.

2.2 Permits. Prior to commencing any activities under this Agreement, Developer shall secure all permits needed to carry out the actions to be performed on the Premises pursuant to this Agreement.

2.3 Security. Prior to commencing any activities under this Agreement, Developer shall deliver to the City an instrument securing Developer’s performance hereunder in a form reasonably satisfactory to the City. The City shall be entitled to draw upon such instrument, in whole or in part, without prior notice or demand, in the event that this Agreement is terminated upon the termination of the DDA for any reason other than a Default of City under the DDA. In such event, the City shall be entitled to draw upon such instrument to the extent of the costs incurred by the City in returning the City Property to substantially the same condition as existed prior to the Date of Agreement.

Section 3. Liens. With regard to actions performed on the City Property under this Agreement, Developer shall not permit to be placed against the City Property, or any part thereof, any design professional’s, mechanic’s, materialmen’s, contractor’s, or subcontractor’s liens (collectively, “Liens”), or shall post a bond or other security in form and amount acceptable to the City in its sole discretion to discharge the effect of any such Lien on title. Developer shall indemnify, defend and hold harmless City from all liability for any and all liens, claims and demands, together with Costs of defense and reasonable attorneys’ fees, arising from any Liens. City reserves the right, at its sole cost and expense, at any time and from time to time, to post and maintain on the City Property, or any portion thereof, or on the improvements on the City Property, any notices of non-responsibility or other notice as may be desirable to protect City against liability. In addition to, and not as a limitation of City’s other rights and remedies under this Agreement, should the Developer fail, within ten (10) days of written request from City, either to discharge any Lien or to bond for any Lien, or to defend, indemnify, and hold harmless City from and against any loss, damage, injury, liability or claim arising out of a Lien, then City, at its option, may elect to pay such Lien, or settle or discharge such Lien and EXHIBIT H-3
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any action or judgment related thereto and all costs, expenses and attorneys’ fees incurred in doing so shall be paid to City by the Developer upon written demand.

Section 4. Certain Definitions. For the purposes of this Agreement, the following terms shall have the meanings herein specified:
“Environmental Law” means (i) Sections 25115, 25117, 25122.7 or 25140 of the California Health and Safety Code, Division 20, Chapter

6.5 (Hazardous Waste Control Law)), (ii) Section 25316 of the California Health and Safety Code, Division 20, Chapter 6.8 (Carpenter-Presley-Tanner Hazardous Substance Account Act), (iii) Section 25501 of the California Health and Safety Code, Division 20, Chapter 6.95 (Hazardous Materials Release Response Plans and Inventory), (iv) Section 25281 of the California Health and Safety Code, Division 20, Chapter 6.7 (Underground Storage of Hazardous Substances), (v) Article 9 or Article 11 of Title 22 of the California Administrative Code, Division 4, Chapter 20, (vi) Section 311 of the Clean Water Act (33 U.S.C. §1317), (vii) Section 1004 of the Resource Conservation and Recovery Act, 42 U.S.C. §6901 et seq. (42 U.S.C. §6903) or (viii) Section 101 of the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. §6901 et seq. “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 i s (i) defined a s a “hazardous waste,” “extremely hazardous waste,” 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 a s 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 defi ned a s “hazardous” or “extremely hazardous. Pursuant to Article 11 of Title 22 of the California Administrative Code, Division 4, 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) or (xi) defined as “hazardous substances” pursuant to Section 101 of the Comprehensive EXHIBIT H-4
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Environmental Response, Compensation and Liability Act, 42 U.S.C. §6901 et seq.

Section 5. Compliance With Laws/Permits. The Developer shall, in all activities undertaken pursuant to this Agreement, comply and cause its contractors, agents and employees to comply with all federal, state and local laws, statutes, orders, ordinances, rules, regulations, plans, policies and decrees, including, but not limited to, all Environmental Laws. Without limiting the generality of the foregoing, the Developer, at its sole cost and expense, shall obtain any and all permits which may be required by any Environmental Law or other law for any activities the Developer desires to conduct or have conducted pursuant to this Agreement. City shall provide reasonable assistance to Developer in obtaining such permits. In the event the Developer or its agents or employees discover any substance on the City Property which they suspect might be Hazardous Materials, Developer shall immediately notify or cause notice to be given to City, and the Developer and its agents and employees shall immediately stop all grading and other work upon the City Property until notified by City that work may be resumed.

Section 6. Indemnification. The Developer hereby agrees to indemnify, defend, assume all liability for and hold harmless City and its officers, employees, agents and representatives from all actions, claims, suits, penalties, obligations, liabilities, damages to property, environmental claims or injuries to persons (collectively “Claims”) arising out of or in connection with Developer’s activities pursuant to this Agreement. Developer ’s indemnity given under this Section 6 shall apply whether such activities are by the Developer or anyone directly or indirectly employed or under contract with Developer, and whether such Claims shall accrue or be discovered before or after the termination of this Agreement. The indemnity and other rights afforded City by this Section 6 shall survive after the revocation or termination of this Agreement. Notwithstanding the foregoing, Developer ’s indemnity shall not apply to the extent claims are caused by, arise out of, or in connection with, any breach of City’s representations or covenants in Section 14 hereof, or the negligence or willful misconduct of the City, or to the extent City has indemnified Developer pursuant to the terms of this Agreement.

Section 7. Inspection. City and its representatives, employees, agents or independent contractors may enter and inspect the City Property or any portion thereof or any improvements thereon at any time and from time to time at reasonable times to verify the Developer ’s compliance with the terms and conditions of this Agreement, and to conduct environmental testing and remediation upon receipt of the notice required pursuant to Section 5 hereof.

Section 8. No Real Property Interest. It is expressly understood that this Agreement does not in any way whatsoever grant or convey any permanent easement, lease, fee or other interest in the City Property to Developer.

Section 9. Notices. Any notices, requests or approvals given under this Agreement from one party to another shall be in writing and shall be personally delivered or deposited with the United States Postal Service for mailing, postage prepaid, by certified mail, return receipt requested, to the addresses of the other party as stated in this Section, and shall be deemed to have been received at the time of personal delivery or three (3) days after the date of deposit for mailing. Notices shall be sent to:

EXHIBIT H-5
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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]
Section 10. Governing Law. This Agreement shall be governed by the laws of the State of California. Any legal action brought under this Agreement must be instituted in the Superior Court of Orange County, State of California, in an appropriate court in that county, or in the Federal District Court in the Central District of California.

Section 11. Interpretation. This Agreement shall be interpreted as a whole and in accordance with its fair meaning and as if each party participated in its drafting. Captions are for reference only and are not to be used in construing meaning.

Section 12. Amendment of Agreement. No modification, rescission, waiver, release or amendment of any provision of this Agreement shall be made except by a written agreement executed by City and the Developer.

Section 13. Attorneys ’ Fees. In the event of a dispute between the parties with respect to the terms or conditions of this Agreement, the prevailing party shall be entitled to collect from the other its reasonable attorneys’ fees as established by the judge or arbitrator presiding over such dispute.

Section 14. City Representations, Indemnities and Covenants. City hereby represents and warrants to the Developer that Garden Grove has not received any written notice or communication from any government agency having jurisdiction over the City Property, notifying Garden Grove or any third party of, and Garden Grove has no actual knowledge of, the presence of surface or subsurface zone Hazardous Materials in, on, or under the City Property, or any portion thereof. “Actua l knowledge,” as used herein, shall not impose a duty of investigation, and shall be limited to the actual knowledge of the Executive Director of the Convention, Sports and Entertainment Department of the City. City represents and warrants that it has no further information regarding the presence of Hazardous Materials on City Property, the location of underground tanks, pipelines, utilities or other lines or facilities which may have been installed at, in, on, under or over the City Property. City shall, if necessary, assist Developer in obtaining the assistance of the applicable public utility companies in locating underground lines. City agrees to indemnify, protect, defend and hold Developer, its officers, employees and agents harmless from any claims that arise directly or indirectly from or in connection EXHIBIT H-6
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with the presence of Hazardous Material in the air, soil, surface, water, groundwater, or soil vapor at, on, about, under, within from or with respect to the City Property and existing on the City Property as of the date Developer first enters the City Property; provided, however, this indemnity shall not apply to the extent a release of such Hazardous Material is caused by the negligence or willful misconduct of Developer or its agents or contractors.

Section 15. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall constitute an original, but all of which, when taken together, shall constitute one and the same instrument.

EXHIBIT H-7
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the respective dates set forth below.

DEVELOPER:

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

Its:

Dated: By:

Its:

ATTEST:

City Clerk
APPROVED AS TO FORM:

City Attorney
CITY:

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

Its:

EXHIBIT H-8
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ATTACHMENT NO. 1
TO

EXHIBIT H

MAP OF CITY PROPERTY
ATTACHMENT NO. 1 TO EXHIBIT H
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ATTACHMENT NO. 2
TO

EXHIBIT H

LEGAL DESCRIPTION OF CITY PROPERTY
ATTACHMENT NO. 2 TO EXHIBIT H
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EXHIBIT I

SCOPE OF DEVELOPMENT
Developer shall construct and operate the Conforming Hotel in accordance with the Land Use Approvals.

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EXHIBIT J

MINIMUM DEVELOPMENT STANDARDS
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EXHIBIT J-43
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EXHIBIT J-44
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EXHIBIT J-45
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EXHIBIT J-46
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EXHIBIT K

GUARANTY AGREEMENT
Dated as of ___________, 20___
In order to induce the CITY OF GARDEN GROVE, a Municipal corporation (“City”), to enter into the Disposition and Development Agreement with NEWAGE GARDEN GROVE II LLC, a California limited liability company (“Developer”) dated __________, 2022 (the “DDA”), and in consideration thereof Kam Sang Company, Inc a California Corporation (hereinafter referred to as the “Guarantor”) executed this Guaranty (“Guaranty”) in favor of the City. Thi s Guaranty is made, in part, with reference to the following relevant facts:

R E C I T A L S
A. Pursuant to the terms of the DDA, Developer acquired certain real property as defined in the DDA. All capitalized terms not defined herein shall have the meaning set forth in the DDA unless the context dictates otherwise.

B. Pursuant to the terms of the DDA, Developer has agreed to be bound by the terms of Section 208.1 of the DDA.

The obligations of Developer under Section 208.1 of the DDA are hereafter referred to as the “Guaranty Obligations.”In the event of any conflict between the terms of the DDA and the description thereof in this Recital B, the terms of the DDA shall prevail.

NOW, THEREFORE, in consideration of the covenants exchanged herein, and as part of the consideration for the City to enter into the DDA with Developer, and other good and valuable consideration, the receipt and sufficiency of which are hereby mutually acknowledged, the parties agree as follows:

Guarantor, jointly and severally, absolutely, unconditionally, and irrevocably guarantee and promise to fully, completely and punctually satisfy the Guaranty Obligations in accordance with the terms of this Guaranty.

Notwithstanding any contrary provision in this Guaranty, the City shall not have the right to enforce this Guaranty against Guarantor, unless Developer is in Default of its obligations under Section 208.1 of the DDA.

This Guaranty is an absolute guaranty of performance and not of collection and shall survive termination of the DDA. Guarantor expressly agrees that until the Guaranty Obligations are performed in full, Guarantor shall not be released by or because of any waiver, extension, modification, forbearance, delay, or other act or omission o f the City, or City’s failure to proceed promptly against Developer or Guarantor.

Guarantor agrees that (i) it is directly and primarily liable to the City, (ii) the Guaranty Obligations are independent of the obligations of Developer, (iii) the obligations of the Guarantor are joint and several; and (iv) a separate action or actions may be brought and prosecuted against Guarantor whether or not Developer is joined in any such action or actions. Guarantor agrees that the liability of EXHIBIT K-1
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Guarantor under this Guaranty shall in no way be limited by (a) the release or discharge of Developer in any creditor proceeding, receivership, bankruptcy or other similar proceeding, (b) the impairment, limitations or modification of the liability of Developer or of any remedy for the enforcement of Developer’s liability, resulting from the operation of any present or future provision of Title 11 of the United States Code, as amended, or any other statute or proceeding affecting creditors’ rights generally, (c) the rejection or disaffirmance of the any Guaranty Obligations or any portion thereof in any such proceeding, or (d) the cessation, from any cause whatsoever, whether consensual or by operation of law, of the liability of Developer to the City. In the event that bankruptcy, insolvency, receivership or similar creditors rights proceedings are instituted against Developer, Guarantor hereby waives any rights of indemnification and/or subrogation it may have against Developer, except in regard to a filing required to be made by Guarantor in any Developer’s bankruptcy, as set forth below.

In the event of a breach by Developer in the performance of the Guaranty Obligations, City shall give written notice of such breach to Guarantor and Guarantor shall commence to cure such breach within five (5) business days of the receipt of the notice of breach. If Guarantor fails to satisfactorily commence to cure the breach with such five (5) business day business day period, Guarantor shall be in default.

In the event of such default, and if Developer has not conveyed the City Property and the Agency Property to City under Section 208.1 of the DDA, Guarantor shall cure such default by the payment of Twenty Million Dollars ($20,000,000), in full accord and satisfaction of this Guaranty provided that, in the event the parties mutually agree to allow the Developer to retain the Agency Property for development pursuant to the Agency DDA, then the amount to be paid to the City in full accord and satisfaction of the Guaranty shall be $_______.

Guarantor hereby waives any right to assert against the City as a defense, counterclaim, set-off or cross-claim any defense (legal or equitable), set-off, counterclaim, and/or claim which Guarantor may now or at any time hereafter have against Developer.

Guarantor hereby waives all presentments, demands for payment and/or performance, notices of non-performance, protests, notices of protest, notices of dishonor, notices of default, notice of acceptance of this Guaranty, diligence in connection with, and all other notices or formalities to which Guarantor may be entitled or notices which may be required in order to charge Guarantor with liability hereunder.

Without the generality of any of the foregoing waivers or any other provisions of this Guaranty, Guarantor further waives any waiver by City of any of City’s rights under California Civil Code Section 2822. Guarantor further waives any rights, defenses and benefits which might otherwise be available to Guarantor under California Civil Code Sections 2787 to 2855, inclusive, (including, without limitation, California Civil Code Sections 2809, 2810, 2819, 2839, 2845, 2848, 2849 and 2850) 2899 and 3433, and any successor sections. Guarantor acknowledges and agrees that all waivers of defenses arising from a ny impairment of Guarantor’s right s of subrogation, reimbursement , contribution and indemnification and waivers of any other rights, privileges, defenses or protections available to Guarantor by reason of Sections 2787 to 2855, inclusive, of the California Civil Code are intended by Guarantor to be effective to the maximum extent permitted by applicable law.

Guarantor agrees that it shall file all claims against Developer in any bankruptcy or other similar proceeding in which the filing of claims is required by law on any indebtedness of Developer to Guarantor, and will assign to the City, all rights of Guarantor, if the City has not been EXHIBIT K-2
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paid hereunder. If Guarantor do es not file such claim, and the City has not been paid hereunder, the City, as attorney-in-fact for Guarantor, is authorized to do so in the name of Guarantor to the extent of amounts guaranteed hereunder or, in the City’s discretion, to assign the claim to a third party and to file a proof of claim in the name of the City or the City’s nominee. In all such cases, whether in bankruptcy or otherwise, the person or persons authorized to pay such claim shall pay to the City the full amount of any such claim, and, to the full extent necessary for that purpose, Guarantor assigns to the City all of Guarantor’s rights to any such payments or distributions to which Guarantor woul d otherwise be entitled.

Guarantor is presently informed of the financial condition of Developer and of all other circumstances which a diligent inquiry would reveal and which bear upon the risk of nonpayment or nonperformance of the Guaranty Obligations. Guarantor hereby covenants that it will continue to keep itself informed of Developer’s financial condition and ofall other circumstances which bear upon the risk of nonpayment or nonperformance of the Indemnity Obligation. Guarantor hereby waives its rights, if any, to require, and the City is relieved of any obligation or duty to disclose to Guarantor any information which the City may now or hereafter acquire concerning such condition or circumstances.

This Guaranty shall continue in full force and effect until the Guaranty Obligations are fully paid, performed, and discharged.

This Guaranty shall be binding upon the successors and assigns of Guarantor and shall inure to the benefit of the City’ssuccessors and assigns.

No modification of this Guaranty shall be effective for any purpose unless it is in writing and executed by an officer of the City authorized to do so.

If (a) this Guaranty is placed in the hands of an attorney for collection or its collected through any legal proceeding; (b) an attorney is retained to represent City in any bankruptcy, reorganization, receivership, or othe r proceedings affecting creditors’ right s and involving a claim under this Guaranty; (c) an attorney is retained to provide advice or other representation with respect to this Guaranty; or (d) an attorney is retained to represent City in any proceedings whatsoever in connection with this Guaranty, then Guarantor shall pay to City upon demand all reasonable attorney’s fees, costs and expenses incurred in connection therewith (all of which are referred to herein as “Enforcement Costs”), in addition to all other reasonable amounts due hereunder, regardless of whether all or a portion of such Enforcement Costs are incurred in a single proceeding or multiple proceedings brought to enforce this Guaranty.

The parties hereto intend and believe that each provision in this Guaranty comports with all applicable local, state and federal laws and judicial decisions. However, if any provision or provisions, or if any portion of any provision or provisions in this Guaranty is found by a court of law to be in violation of any applicable local, state or federal ordinance, statute, law, administrative or judicial decision, or public policy, and if such court should declare such portion, provision or provisions of this Guaranty to be illegal, invalid, unlawful, void or unenforceable as written, then it is the intent of all parties hereto that the remainder of this Guaranty shall be construed as if such illegal, invalid, unlawful, void or unenforceable portion, provision or provisions were not contained therein, and that the rights, obligations and interest of City under the remainder of this Guaranty shall continue in full force and effect.

EXHIBIT K-3
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TO THE GREATEST EXTENT PERMITTED BY LAW, GUARANTOR HEREBY

WAIVES ANY AND ALL RIGHTS TO REQUIRE MARSHALLING OF ASSETS BY CITY, WITH

RESPECT TO ANY SUIT, ACTION OR PROCEEDINGS RELATING TO THIS GUARANTY (EACH, A “PROCEEDING”), CITY AND GUARANTOR IRREVOCABLY (A) SUBMIT TO THE

NON-EXCLUSIVE JURISDICTION OF THE STATE AND FEDERAL COURTS HAVING

JURISDICTION IN THE CITY OF GARDEN GROVE, COUNTY OF ORANGE AND STATE OF

CALIFORNIA, AND (B) WAIVE ANY OBJECTION WHICH EACH MAY HAVE AT ANY TIME

TO THE LAYING OF VENUE OF ANY PROCEEDING BROUGHT IN ANY SUCH COURT,

WAIVE ANY CLAIM THAT ANY PROCEEDING HAS BEEN BROUGHT IN AN

INCONVENIENT FORUM AND FURTHER WAIVE THE RIGHT TO OBJECT, WITH RESPECT

TO SUCH PROCEEDING, THAT SUCH COURT DOES NOT HAVE JURISDICTION OVER SUCH PARTY. CITY AND GUARANTOR FURTHER AGREE AND CONSENT THAT, IN

ADDITION TO ANY METHODS OF SERVICE OF PROCESS PROVIDED FOR UNDER

APPLICABLE LAW, ALL SERVICE OF PROCESS IN ANY PROCEEDING IN ANY

CALIFORNIA STATE OR UNITED STATES COURT SITTING IN THE CITY OF GARDEN

GROVE OR COUNTY OF ORANGE AND MAY BE MADE BY CERTIFIED OR REGISTERED

MAIL, RETURN RECEIPT REQUESTED, DIRECTED TO THE APPLICABLE PARTY AT THE

ADDRESS INDICATED BELOW, AND SERVICE SO MADE SHALL BE COMPLETE UPON RECEIPT; EXCEPT THAT IF SUCH PARTY SHALL REFUSE TO ACCEPT DELIVERY, SERVICE SHALL BE DEEMED COMPLETE FIVE (5) DAYS AFTER THE SAME SHALL HAVE BEEN SO MAILED.

All acts and transactions hereunder and the rights and obligations of the parties hereto shall be governed, construed and interpreted in accordance with the laws of the State of California.

Guarantor consent to the jurisdiction of the State of California and consents to service of process by any means authorized by California law, including, without limitation, service of process by mail.

Guarantor herein warrants and represents that (i) as of the date hereof, it has combined net assets of at least Fifty Million Dollars ($50,000,000) and not less than Fifteen Million Dollars ($15,000,000) shall be cash and/or marketable securities exclusive of any other contingent obligations, and (ii) will maintain such financial condition until Completion of the Project. Guarantor further warrants and represents that the Guarantor will not intentionally cause a material change in its financial condition during the term of the Guaranty and shall provide City with updated financial statements on each anniversary date of this Guaranty.

Any notice, demand, request or other communication which any party hereto may be required or may desire to give hereunder shall be in writing and shall be deemed to have been properly given (a) if hand delivered, when delivered; (b) if mailed by United States Certified Mail (postage prepaid, return receipt requested), three Business Days after mailing; (c) if by Federal Express or other reliable overnight courier service on the next Business Day after delivered to such courier service or (d) if by telecopier on the day of transmission so long as copy is sent on the same day by overnight courier as set forth below:

EXHIBIT K-4
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Guarantor: Kam Sang Company, Inc
411 E. Huntington Drive, #305
Arcadia, CA 91006
Attention: Ronnie Lam
Phone No.: (626)446-2988 (ext. 15)
Facsimile:

Email: [email protected]
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)
Facsimile:

Email: [email protected]
To City: City of Garden Grove
11222 Acacia Parkway
Garden Grove, California 92840
Attention: Scott C. Stiles
Phone No.: (714) 741-5100
Facsimile:

Email: [email protected]
Cc: City Manager
Official Economic Development
City Attorney
With a copy to:

Stradling Yocca Carlson & Rauth
660 Newport Center Drive, Suite 1600
Newport Beach, California 92660
Attn: Thomas P. Clark, Jr.

Telephone: (949) 725-4140
Facsimile: (949) 823-5140
or at such other address as the party to be served with notice may have furnished in writing to the party seeking or desiring to serve notice as a place for the service of notice. (SIGNATURE PAGE CONTINUES ON FOLLOWING PAGE)
EXHIBIT K-5
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IN WITNESS WHEREOF, Guarantor has duly executed this Guaranty as of the date first above written.

GUARANTOR
KAM SANG COMPANY, INC, Inc a California
Corporation
Dated: By:

Its:

DEVELOPER:

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

Its:

ATTEST:

City Clerk
APPROVED AS TO FORM:

City Attorney
EXHIBIT K-6
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CITY:

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

Its:

APPROVED AS TO FORM:

Developer’s Legal Counsel
EXHIBIT K-7
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EXHIBIT L

CONCEPTUAL SITE PLAN
EXHIBIT L-1
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EXHIBIT M

LIST OF AAA FOUR DIAMOND HOTELS
Qualifying AAA Four Diamond Hotels
Conrad Hilton Hotels
Curio Hilton Hotels
Fairmont Hotels & Resorts
Hyatt Regency Hotels
InterContinental Hotels
JW Marriott
Kimpton Hotels
Le Meridien Hotels
Luxury Collection Hotels
Leading Hotels
Loews Hotels & Resorts
Oberoi Hotel & Resorts
Omni Hotels & Resorts
Pendry Hotels
Preferred Hotels
SLS Hotels
Sofitel
Tribute Hotels
W Hotels
Westin Hotels & Resorts
EXHIBIT M-1
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EXHIBIT N
“Local Residents” is defined as those residents qualified in the respective trades, residing in the following zip codes. Priority in hiring preference shall be given in order of the Tiers below. (TIER 1 – City of Garden Grove)
92840 92843 92846
92841 92844
92842 92845
(TIER 2 – Cities adjacent to the City of Garden Grove)
90680 92728 92816
90721 92735 92817
92683 92799 92825
92684 92801 92850
92685 92802 92856
92701 92803 92857
92702 92804 92859
92703 92805 92863
92704 92806 92864
92705 92807 92865
92706 92809 92866
92707 92812 92867
92708 92814 92868
92711 92815 92869
92712
(TIER 3 - The Remaining Zip Codes in Orange County, California) (TIER 4 - All other zip codes outside Orange County, California) EXHIBIT N-1
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City of Garden Grove

ECONOMIC DEVELOPMENT REPORT & ANALYSIS
DEVELOPER - NewAge Garden Grove ll, LLC
PROJECT – ‘Nickelodeon Resort Hotel’
Prepared Pursuant to Government Code Sections §53083
and §52201
August 28, 2022

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Table of Contents
INTRODUCTION ....................................................................................................................................................................... 4 PROJECT DESCRIPTION........................................................................................................................................................ 4 REPORTING REQUIREMENTS OF GOVERNMENT CODE SECTION 53083 ...................................................... 5 REQUIREMENTS- GOVERNMENT CODE SECTION 53083...................................................................................... 7 BENEFICIARIES - 1.................................................................................................................................................................. 7 EFFECTIVE DATES AND SCHEDULE -2 .......................................................................................................................... 7 ECONOMIC DEVELOPMENT SUBSIDY DESCRIPTION – 3....................................................................................... 7 STATEMENT OF PUBLIC PURPOSES -4.......................................................................................................................... 9 30-YEAR CITY TAX REVENUE PROJECTION - 5........................................................................................................ 10 ESTIMATED NUMBER OF JOBS CREATED - 6............................................................................................................ 10 ....................................................................................................................................................................................................... 10 REQUIREMENTS- GOVERNMENT CODE SECTION §52201 ................................................................................. 12 COPY OF THE PROPOSED ACQUISTION, SALE OR LEASE – 1............................................................................. 12 SUMMARIES THAT DESCRIBE AND ADDRESS THE FOLLOWING 5 PROJECT AREAS - 2.......................13 2a) ................................................................................................................................................................................................ 13 The cost of the agreement to the city, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the City plus the expected interest on any loans or bonds to finance the agreements. ................................................................................................................. 13 CONCLUSIONS FOR ECONOMIC DEVELOPMENT REPORT FOR - AB 562- §53083 and AB 806 - §52201 ....................................................................................................................................................................................... 21 The proposed AAA Four Diamond Nickelodeon Resort Hotel will provide a significant financial revenue generator and job creation for the City. ..................................................................................................... 21 3 | P a g ePage 483 of 640

CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’

INTRODUCTION
In 2013, Assembly Bill 562 (“AB 562”) added Section §53083 to the Government Code. This law requires cities and counties to post a report on their website before approving an economic development subsidy of $100,000 or more to a business entity on or after January 1, 2014. The law specifies that the report must be posted on the lo cal agency’ s website for the entire ter m of the subsidy.

In furtherance of the encouragement of economic development, Assembly Bill 806, adopted in 2016, amended Section §52201 to the Government Code. This law, like Section §53083, requires that public agencies who dispose of properties to create economic benefit for the community may do so, provided the legislative body approves the action and certain findings are completed.

The Legislature intended that both §53083 and §52201 promote economic development for local communities while also promoting transparency and accountability in economic development subsidies, like annual financial reporting and local fiscal decisions.

This report includes summary information for the proposed project and project public assistance .

The information is consistent as required by AB 562- §53083 and AB 806 - §52201 which include a fiscal review and estimated reuse value as necessary to determine the projected revenue generated to benefit the City as well as the cost as part of the economic development plan for the Nickelodeon Resort Hotel Development Project (“Project”). Therefore, this report is intended to address the requirements of Government Codes §53083 and §52201 and is being made available to the public prior to consideration of the proposed Agreement and authorization of the economic development subsidy.

PROJECT DESCRIPTION
In 2016, the City of Garden Grove entered into an Exclusive Negotiation Agreement (ENA) between the City and NewAge Garden Grove, LLC (“Developer”) for the development of approximately 3.72 acres of real property in the City. The ENA provided for the Developer to reduce site acreage, redesign the project, complete the environmental review of the Project, and determine the economic feasibility of the project. The Developer encountered a number of development constraints, including rising costs due to worldwide demand for construction materials and associated commodities, then complication due Covid pandemic related impacts . It concluded that the most feasible site for development is a 3.72-acre parcel of the original 10 acre anticipated development site. The 3.72-acre site is comprised of approximately 2.22 acres (“Agency Property”) being conveyed to the Developer pursuant to the Agency Disposition and Development Agreement (DDA) and approximately 1.5 acres owned by the City (“City Property”) being conveyed to the Developer pursuant to the City DDA. The Agency Property and City Property are collectively referred to as the “Site” for this Report.

The proposed AAA Four Diamond Hotel Project is anticipated to include 500 guest suites with balconies; themed pool experience with lazy river; event space with a 600-person 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 22,296 square 4 | P a g ePage 484 of 640

CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ feet; themed amenities totaling 13,238 square feet; 7,000-square foot arcade; and a spa and fitness center at 8,532 square feet. The project is estimated to welcome approximately 750,000 hotel patrons and resort guests per year.

REPORTING REQUIREMENTS OF GOVERNMENT CODE SECTION 53083 Government Code Section 53083 requires that economic development programs involving public revenue sharing assistance include the following information:

1. The name and address of all business entities, except for sole proprietorships, which are beneficiaries of the subsidy, if applicable.

2. The start and end dates and schedule for the subsidy, if applicable.

3. A description of the subsidy, including the estimated total amount of the expenditure of public funds by, or of revenue lost to, the local agency because of the subsidy.

4. A statement of the public purposes for the subsidy.

5. Projected tax revenue to the local agency because of the subsidy.

6. Estimated number of jobs created by the subsidy, broken down by full-time, part-time, and temporary positions.

REPORTING REQUIREMENTS OF GOVERNMENT CODE SECTION 52201 Government Code Section 52201 requires that economic development programs involving public revenue sharing assistance include the following information:

1. A copy of the proposed acquisition, sale, or lease

2. A summary that describes and specifies all the following:
a. The cost of the agreement to the city, county, or city and county, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the city, county, or city and county, plus the expected interest on any loans or bonds to finance the agreements.
b. For the sale or lease of property, the estimated value of the interest to be conveyed or leased, determined at the highest and best uses permitted under the general plan or zoning.
c. For the sale or lease of property, the estimated value of the interest to be conveyed or leased, determined by the use and with the conditions, covenants, and development costs required by the sale or lease. The purchase price or present value of the lease payments which the lessor will be required to make during the term of the lease. If the sale price or total rental amount is less than the fair market value of the interest to be conveyed or leased, determined at the highest and best use, then the city, county, or city and county shall provide as part of the summary an explanation of the reasons for the difference.
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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ d. An explanation of why the acquisition, sale, or lease of the property will assist in the creation of economic opportunity, with reference to all supporting facts and materials relied upon in making this explanation.
e. The resolution approving the acquisition, sale, or lease shall be adopted by a majority vote unless the legislative body has provided by ordinance for a two-thirds vote for that purpose and shall contain a finding that the acquisition, sale, or lease of the property will assist in the creation of economic opportunity. For the sale or lease of property, the resolution shall also contain one of the following findings:
i. The consideration is not less than the fair market value at its highest and best use.
ii. The consideration is not less than the fair reuse value at the use and with the covenants and conditions and development costs authorized by the sale or lease.
iii. The provisions of this section are an alternative to any other authority granted by law to cities to dispose of city-owned property. 6 | P a g e

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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ REQUIREMENTS- GOVERNMENT CODE SECTION 53083
BENEFICIARIES - 1
The business entit y that would be a beneficiary of the Economic Development Subsidy is NewAge Garden Grove ll, LLC . (“Developer”) and Kam Sang Company, Inc. as the Developer’s Managing Partner. The company’s headquarters is located at 411 East Huntington Drive, Suite 305, Arcadia, CA 91006.

EFFECTIVE DATES AND SCHEDULE -2
The B-2 development project has been part of the City’s planning effort over the past 20 years. Over time the size of the project area and scope of development has evolved and resulted in the proposed Nickelodeon Resort Hotel Project on approximately a 3.72-acre site. The resort project is designed to accommodate a AAA Four Diamond Hotel as compared to the previous projects that included designs and accommodations of a standard 2-star hotel project. The current DDA outlines a transient occupancy tax (TOT) revenue sharing agreement that assume project commencement and development in mid-year 2023 and will be ready for occupancy in 2026 . The DDA is anticipated to commence the year of Project opening in 2026 and will be in place for up to thirty (30) years, at which time the DDA will end.

ECONOMIC DEVELOPMENT SUBSIDY DESCRIPTION – 3
The proposed Economic Development assistance is based solely on the completion of the Nickelodeon Resort Hotel on a site that is currently vacant and undeveloped. The assistance of public revenues for the project is based on those tax revenues not currently being generated or available to the City and will materialize only after the completion of the Nickelodeon Resort Hotel Project.

It is important to note that the proposed public assistance is based strictly on two key components:
1) project completion, and 2) project generated transient occupancy tax (TOT) collected by the City.

It is important to note , the TOT revenue source , and other revenue sources such as sales tax and property tax, are NOT currently being generated from the Site, which has been vacant for over a decade.

All revenue sharing assistance amounts will be solely generated by Site development. If approved, the terms for sharing the Transient Occupancy Tax (TOT) generated public revenue is documented in the DDA and include a covenant that address the detail of the public revenue sharing terms. 7 | P a g e

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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ The Developer has proposed, that in order to make the Development feasible and a reality, the City provide a public revenue sharing program based on TOT tax generation . Generally, tax sharing programs allow public agencies to reinvest a portion of public revenues generated from Site development into an identified project that requires assistance. Public reinvestment and assistance provide for a sustainable and feasible new community asset, such as the resort hotel proposed in the City. The Developer has identified a public revenue sharing amount of up to a maximum of $93 million which will account for a feasible development.

Over thirty (30) years the Project is estimated to generate in Transient Occupancy Tax, Sales Tax, Measure O Tax, and Project Property T ax of approximately $329.4 million. This public revenue would not be otherwise generated if the Nickelodeon Resort Hotel Project is not developed.

In order for the Developer to achieve a financially feasible project, including Developer equity and third (3
rd) party financing, the Project requires a public revenue sharing agreement that allows up to a maximum of $93 million in project assistance over a term not to exceed thirty (30) years.

A summary of Project total public revenue generated, proposed public assistance to the Project, and Project net public revenue generated (approximately $236.4 million retained by the City) is provided in Table 1 below. The precise terms of the assistance are addressed in the DDA that is attached to this report.

Table 1
Property Tax $7,769,801
Sales Tax & Measure O $62,147,092
Transient Occupancy
Tax (TOT) $259,433,489
Gross Estimated
Tax Collected $329,350,382
Property Tax $0.00
Sales Tax & Measure O $0.00
Transient Occupancy
Tax (TOT) $93,000,000
Gross Economic
Assistance $93,000,000
Property Tax $7,769,801
Sales Tax & Measure O $62,147,092
Transient Occupancy
Tax (TOT) $166,433,489
Gross Estimated
Tax - General Fund
Revenue
$236,350,382
Project Generated Gross Tax Revenues Over 30 Year Term:

City Net Revenue & General Fund Reciepts Retention
Project Generated Gross Tax Revenues Over 30 Year Term:

City Reciepts/Total
Project Economic Development Subsidy Over 30 Year Term:

Developer Assistance
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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ STATEMENT OF PUBLIC PURPOSES -4
The loss of redevelopment has left the City of Garden Grove, as well as all cities statewide, with a loss of local resources to encourage economic development and maintain City services. The California Legislature and Governor Brown made the decision to terminate redevelopment which removed the single largest economic tool available to local agencies. Following the decision to terminate statewide redevelopment, the Governor and Legislature recognized the necessity of cities, counties and the State to encourage employment, retain jobs and companies in California.

With the adoption of Assembly Bill 562 in 2013, and codified as California Government Code Section §53083, the California Legislature recognized the authority of local officials to use their regulatory powers, direct spending, and tax policies to influence where, when, and how the private sector invests capital and improves real property.

The City has concluded that the Project would serve as a continued catalyst for the City hotel corridor and provide a significant net positive financial impact on the entire local economy. It is estimated that the total permanent direct, indirect and induced economic output of the Project during the 30-year public assistance program will provide approximately $3.75 billion in direct and indirect project generated financial contribution to the City and region. Additionally, the City and region will realize an estimated 2,800 jobs.

The adopted Planned Unit Development and the DDA provide a comprehensive set of plans, design guidelines, regulatory standards, and administrative and implementation programs which act as a regulatory ‘bridge’ between the City of Garden Grove’s General Plan and project level development within the DDA.

The Nickelodeon Resort Hotel Project design guidelines within the DDA provide for and requires a high-quality AAA Four Diamond Resort Hotel to be constructed on the identified Site. The resort will contain 500 guest suites with balconies, themed pool experience with lazy river, 600-person theater, grand ballroom, meeting rooms, variety of food and beverage opportunities, themed amenities, 7,000-square foot arcade, and a spa and fitness center.

The City has concluded that the Development and its adjacency to the Disneyland resort and hotels that welcomes over 17 million visitors a year, the Great Wolf Lodge Waterpark Resort hotel and adjacency to two (2) major Freeways, I-5 and 22, will serve as a catalyst for future City developments that will continue to provide a net positive impact on the local economy. The City estimates that the total estimated direct economic output of the Project will exceed $1.75 billion within City limits over the 30-year term. These financial amounts will be produced through expenditures at the Resort and other spin-off sales within the City limits during the public assistance agreement. 9 | P a g e

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CITY OF GARDEN GR OVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’

CITY OF LOS ANGELES
:

Use Development
Additionally, the total direct economic output generated by construction of the Project is expected to exceed $277 million within the City limits.
30-YEAR CITY TAX REVENUE PROJECTION - 5
Throughout the construction period and the first 30 years of operation, the Nickelodeon Resort Hotel Development Project is expected to generate approximately $236 .4 million in City net tax revenue.

Of this, $166.4 million (70.4%) is TOT, $7.8 million (3.3%) is property tax, and $62.1 million (26.3%) is sales tax. The table on the following page summarizes the City’s projected tax revenues generated by the Project through the 30th year of operation.

Property Tax $7,769,801
Sales Tax & Measure O $62,147,092
Transient Occupancy
Tax (TOT) $166,433,489
Gross Estimated
Tax - General Fund
Revenue
$236,350,382
Project Generated Gross Tax Revenues Over 30 Year Term:

City Net Revenue & General Fund Reciepts Retention
ESTIMATED NUMBER OF JOBS CREATED - 6
The Nickelodeon Resort Hotel Development is both a local and regional catalytic project. Over a 30- year period, the completed Nickelodeon Resort Hotel Development will have a financial impact within the City and region in excess of $3.75 billion dollars. Benefits attributable to the Project will include jobs created and revenues generated from Project hotel stays, retail sales, spin off 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, many which will be local.

Project construction is estimated to exceed $277 million dollars. The Development 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 Project, indirect and induced jobs generated for the community, area, and region are expected to support another 1,800 jobs.

This innovative project will ignite other development within the local and regional vicinity. This spin off effect will create further investment, local jobs, and amenities for residents and public revenues.
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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ The Development is estimated to generate the following number of direct full-time equivalent jobs as well as indirect and induced jobs because of the development which is directly dependent upon the City’s Economic Development assistance program:

Full Time Equivalent (fte)
Project
Construction Jobs 600
Hotel Jobs
Full Time 380
Project Total 980
Local Community &
Region
Local Spin-Off/
Multiplier Effect 1,790
Project Related Total
Estimated Job
Creation
2,770
*EPI - estimated job creation - 10 jobs per $1 million expended Job Creation Estimation
(direct, indirect, and induced jobs)
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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ REQUIREMENTS- GOVERNMENT CODE SECTION §52201
COPY OF THE PROPOSED ACQUISTION, SALE OR LEASE – 1
The Disposition and Development Agreement (DDA) is between The City of Garden Grove and the NewAge Garden Grove II, LLC. The DDA is included as Attachment A.

The business entity that would be the beneficiary of the Economic Development Subsidy is NewAge Garden Grove ll, LLC. (“Developer”) with Kam Sang Company, Inc., as its Managing Partner. The company’s headquarters is located at 411 East Huntington Drive, Suite 305, Arcadia, CA 91006.

A summary of the DDA is as follows:
 The DDA includes the purchase price, indemnity and insurance provisions, and other provisions customary to disposition and development of property as entered by the City.  City shall contribute to the Developer, based on the Covenant in the DDA, public assistance consideration payments 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 and City TOT collection, with respect to the Proposed Project. The DDA and covenant provides for a public assistance amount of up to $93 million with a term not to exceed 30 years. The public assistance amount could be achieved in less than 30 years. Conversely, if the 30-year tax sharing term expires and the $93 million has not been achieved by the project, the amount of public assistance will be less.  The Developer’s submittal indicates the costs to develop the hotel rooms will meet or exceed the minimum requirements of $250,000 per key for shell costs and $45,000 per key for FF&E costs.
 Developer shall comply with the Prevailing Wage Statutes and use not less than 60% for union labor.
 The Developer shall pay $920,000 for the 3.72-acre site.  It is estimated that the total resort costs will be approximately $277 million dollars for land, soft costs, and construction of resort hotel, parking and associated resort attractions. 
See Attachment A for the Complete DDA.
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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ SUMMARIES THAT DESCRIBE AND ADDRESS THE FOLLOWING 5 PROJECT AREAS - 2 2a)
The cost of the agreement to the city, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the City plus the expected interest on any loans or bonds to finance the agreements.

The Site being developed contains 19 parcels that have been acquired over the past 2 decades.

The common addresses of the parcels involved in the DDA are: 12241, 12261, 12271, 12291, 12311, and 12323 Harbor Boulevard and 12246, 12252, 12262, 12282, 12292, 12312, 12322, 12251, 12261, 12281, 12291, 12311, and 12321 Thackery Drive. The combined parcels are approximately 3.72 acres.

The acquisition costs related to the 19 parcels, including parcel acquisition purchase prices, relocation, demolition, and associated costs are approximately $9.7 million (excluding interest and other financial costs) as documented by the City.

Acquisition costs
Appraisal
Relocation
Demoltion /Site Clearance
TOTAL
$528,472
$9,694,454

CITY RELATED ACQUISITION COSTS
$8,349,384
$81,800
$734,798
The City and Developer have agreed as part of the terms of the DDA and the feasibility of the Resort Hotel development, that the Developer will pay the City $920,000 for the 3.72-acre site.

Acquisition costs

DEVELOPER LAND PURCHASE PRICE

DISPOSTION AND DEVELOPMENT AGREEMENT
$920,000
The price being paid by the Developer for the site to achieve project feasibility indicates that the City will provide a net land contribution of approximately $8,774, 454 or $10,000,000 with all costs incurred by the City to assemble the 3.72 Acre Site.
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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ Net Land Cost to City

CITY PROJECT LAND COST BASED

ON DISPOSITION AND DEVELOPMENT

AGREEMENT
$8,774,454
The DDA also provides that City and Developer will enter a covenant that provides public assistance payments that are derived from TOT generated by the AAA Four Diamond Resort Hotel Project to the Developer. The sharing of a Transient Occupancy Tax (TOT) generated by the resort hotel is regarded as public assistance under both Government Code §53083 and §52201.

The terms of the DDA and public assistance formula is based on 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. The public assistance is based on the applicable TOT rate and City TOT collection, which will vary from year to year of the Project subject to hotel occupancy and TOT rate charged by the City.

The DDA and covenant provides for a public assistance amount of up to $93 million. The assistance is limited to TOT collected from the resort hotel over 30 years. The public assistance amount could be achieved in less than 30 years. Conversely, if the 30-year tax sharing term expires and the $93 million has not been achieved by the project, the amount of public assistance will be less than the projected $93 million.

Based on the land costs incurred by the City and the amount of public assistance in the form of TOT sharing covenant in the DDA, the Developer is expected to receive up to $103 million in public assistance over a 30-year period. Based upon the net present value (NPV) of the public assistance provided to the Developer for the Project, the land contribution and TOT public assistance has an approximate NPV of $56.3 million. The public assistance NPV value of $56.3 million is representative of the estimated assistance in today’s values.

The City does not anticipate that it will incur any loans, interest, or bonds associated with the DDA and public assistance.
2b)
For the sale of property, the estimated value of the interest to be conveyed, determined at the highest and best uses permitted under the general plan or zoning.

In July 2022, the City commissioned multiple appraisals by RP Laurain & Associates (RPLA). RPLA was tasked to assist the City in estimating the value for the interest to be conveyed pursuant to the DDA and Government Code §53083 and §52201. Based on the information provided by RPLA, the estimated Site value is $10.6 million.

As noted above in 2a, the Developer is purchasing the 3.72-acre development site for $920,000.

Therefore the amount of net value of the interest being conveyed is the difference between $10.6 million and the $920,000. The interest being conveyed to the Developer is $9.7 million. The DDA, as 14 | P a g e

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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ part of the public assistance is conveying the development Site for approximately 8.7% of the value of the site as estimated through the valuations presented by RPLA. 2c)
For the sale of property, the estimated value of the interest to be conveyed, determined by the use and with the conditions, covenants, and development costs required by the sale. The purchase price to be made as part of the agreement. If the sale price is less than the fair market value of the interest to be conveyed, determined at the highest and best use, then the city, county, or city and county shall provide as part of the summary an explanation of the reasons for the difference.

The DDA and related covenants require that the Developer construct a AAA Four Diamond Hotel, full service, N ickelodeon Resort Hotel that is a significantly higher quality project than was initially envisioned in the B- 2 Planned Unit Development area and original DDA. The cost differential between the AAA Four Diamond Resort Hotel and a standard 2-star hotel, with the amenities addressed in the Nickelodeon DDA, is expected to have total project costs that are a minimum of double the cost to two-thirds more to provide the described resort hotel and associated amenities.

The full service AAA Four Diamond Nickelodeon Resort Hotel as defined in the DDA will include 500 upscale guest suites with balconies, themed pool experience with lazy river, a 600-person maximum occupancy theater, a grand ballroom, meeting rooms, a variety of food and beverage opportunities to be placed throughout the hotel, themed amenities, game arcade, and a spa and fitness center. The project is estimated to welcome approximately 750,000 hotel patrons and resort guests per year.

The DDA anticipates that the site will be transferred to the Developer at $920,000 which i s approximately 8.7% of the fair market value of the Site based upon RPLA appraisals, which indicate an estimated fair market of $10.6 million.

The DDA terms and covenants require that the Developer deliver a AAA Four Diamond Resort Hotel quality project. The fair market value for the land cannot be realized due to the development requirements and cost of construction. Tierra West Advisors has estimated that the AAA Four Diamond full-service Resort Hotel project costs required in the DDA, as compared to a standard 2 - star limited service hotel, is approximately 45% to 65% more in development costs. The development costs are attributable to the finishes provided in lobby, individual rooms, meeting areas, water park features, resort attractions, and provisions required to provide a AAA Four Diamond Resort.

The following is a brief comparison between the estimated cost to construct the AAA Four Diamond Nickelodeon Resort Hotel and a 2-star limited-service standard hotel as determined through Tierra West Advisors’ research.
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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ Land Value $10,600,000 $10,600,000
construction costs
FFE/contingency $214,700,000 $96,615,000
Soft Costs $29,300,000 $10,255,000
PreDev/Fin costs $22,400,000 $11,200,000
Total Project Costs $277,000,000 $128,670,000
Cost Per Room - 500 $554,000 $257,340
4 STAR RESORT HOTEL VS 2 STAR HOTEL

COMPARISON
As noted, land value remains constant, but the impact to construction costs and soft costs, especially in the area of design related to attractions, water features, amenities, rooms and general upgrades required for AAA Four Diamond rated resort hotel projects impact development costs significantly. 2d)
An explanation of why the sale of the property will assist in the creation of economic opportunity, with reference to all supporting facts and materials relied upon in making this explanation.

The Site has been assembled over the past 2 decades and during the time the parcels have been vacant and not generating any form of revenue. The City has actively pursued development of these parcels. However, impediments, such as Developer failure to proceed, recession , and loss of Redevelopment have made the development of these parcels infeasible. Following the decision to terminate Redevelopment Agencies, the Legislature recognized the necessity of cities, counties and the State to encourage employment, and retain jobs and companies in California.

The adoption of Government Code Sections §53083 and §52201 by the California Legislature recognized the authority of local officials to use their regulatory powers, direct spending, and tax policies to influence where, when, and how the private sector invests capital and improves real property.

The City has concluded that the Project would serve as a continued catalyst for the City hotel corridor and provide a significant net positive financial impact on the entire local economy. It is estimated that the total permanent direct, indirect and induced economic output of the Project during the 30- year public assistance program will provide approximately $1.75 billion of expenditures in the City and another $2 billion in project generated indirect financial contribution to the region. Additionally, the City and region will realize an estimated 2,800 jobs. 16 | P a g e

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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ Full Time Equivalent (fte)
Project
Construction Jobs 600
Hotel Jobs
Full Time 380
Project Total 980
Local Community &
Region
Local Spin-Off/
Multiplier Effect 1,790
Project Related Total
Estimated Job
Creation
2,770
*EPI - estimated job creation - 10 jobs per $1 million expended Job Creation Estimation
(direct, indirect, and induced jobs)
The adopted Planned Unit Development and the DDA provide a comprehensive set of plans, design guidelines, regulatory standards, and administrative and implementation programs which will serve as the development plan to complete the resort hotel on a site that has been vacant for over a decade.

The Nickelodeon Resort Hotel Project design guidelines within the DDA provide for and require a high-quality AAA Four Diamond Resort Hotel to be constructed on the identified Site. The resort will contain 500 guest suites with balconies, themed pool experience with lazy river, 600-person theater, grand ballroom, meeting rooms, variety of food and beverage opportunities, themed amenities, 7,000-square foot arcade, and a spa and fitness center.

The City has concluded that the Development and its adjacency to the Disneyland resort and hotels that welcomes over 17 million visitors a year, the Great Wolf Lodge Waterpark Resort hotel and adjacency to two (2) major Freeways, I-5 and 22, will serve as a catalyst for future City developments that will continue to provide a net positive impact on the local economy. The City estimates that the total estimated direct economic output of the Project will exceed $1.75 billion, produced by expenditures at the Resort and other spin-off sales within the City limits through the 30 years of the public assistance agreement.

Additionally, the total direct, economic output generated by the Project development is expected to exceed $277 million within the City limits.

The Site is currently undeveloped and not currently providing any economic impact to the City or region. The AAA Four Diamond Nickelodeon Resort Hotel Project is anticipated to provide net revenues to the City as noted below:
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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ Property Tax $7,769,801
Sales Tax & Measure O $62,147,092
Transient Occupancy
Tax (TOT) $166,433,489
Gross Estimated
Tax - General Fund
Revenue
$236,350,382
Project Generated Gross Tax Revenues Over 30 Year Term:

City Net Revenue & General Fund Reciepts Retention
2e)
The resolution approving the acquisition, sale, shall be adopted by a majority vote unless the legislative body has provided by ordinance for a two-thirds vote for that purpose and shall contain a finding that the sale of the property will assist in the creation of economic opportunity. For the sale or lease of property, the resolution shall also contain one of the following findings:
i. The consideration is not less than the fair market value at its highest and best use. ii. The consideration is not less than the fair reuse value at the use and with the covenants and conditions and development costs authorized by the sale or lease. iii. The provisions of this section are an alternative to any other authority granted by law to cities to dispose of city-owned property.

The total project development costs and financial returns are such that the fair reuse value of the land is less than the fair market value of the land . The City’s consultant, HTL HospitalityAdvisors reviewed the costs for the Nickelodeon Resort Hotel development as presented by the Developer and prepared an independent development cost analysis as described by the terms of the DDA. The Developer and HTL have indicated that the total project costs for the Nickelodeon Resort Hotel Project is $277 million, which assumes a contingency to accommodate the unique project development aspects of the proposed Resort . The unusual designs, custom fabrication, amenities, fixturization, equipment for all aspects of the Resort will most likely lead to development cost increases that may exceed the estimated developments costs to construct the AAA Four Diamond Nickelodeon Resort Hotel as defined in the DDA and Developer presentations. $10,600,000
$254,200,000
$12,200,000
$277,000,000
estimate per key - 500 $554,000

PROJECTED NICKELODEON RESORT HOTEL

DEVELOPMENT COSTS
Project Development Cost
Land Value - FMV
Total Project Costs
contingency
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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ For the purposes of this reuse analysis, Tierra West Advisors has assumed that the Developer, based on its strong successful track record in the hotel industry and other special use developments, will be successful in maintaining and managing project and development costs at $266.4 million. Total project costs with land at fair market value and construction is estimated at $277 million.

HTL developed a detailed operating pro forma for the Nickelodeon Resort Hotel to provide and independent review of the operations of the resort over a 10-year period. The cash flow analysis was designed to compare the information provided by the Developer as well as to determine a value of the resort project based on net cash flow derived from the project to determine Project value . Net cash flow used to determine values of operating business is traditionally based on earnings before interest, tax and amortization (EBITA).

The Developer and HTL, as is typical of most financial operating pro forma analyses developed by investors, advisors, banks and other financial institutions, assumes that a business will require a few years for ramp up of the operation to allow for stabilization of the operations of the business. HTL developed its standard 10 year operating pro forma that calculated the present value, applying a 13% discount rate and assumed sale of the project in the 10th year (standard financial assumption applied by investors, developers, lending institutions and consultants to determine value and calculate reuse value). The operating pro forma resulted in a present value of $162.3 million of net receipts.

As noted, total development costs of the Resort and fair market value of the land involved is projected to be $277 million. The operating pro formas prepared by HTL and the Developer indicate that the total present value of net operating cash flow, EBITA, over a 10-year analyses provides $162.3 million in net receipts.

The differential between the total cost of development of $265.3 (exclud es land value and reduced contingencies) less the present value of net cash flow over 10 years of operations of $162.3 million is the development gap or need for public assistance. The difference between total project costs and net cash flow from operations is approximately $103 million. $265,300,000
$162,300,000
$103,000,000
estimate per key - 500 $206,000

PROJECT FEASIBILITY

FINANCIAL GAP OR SHORTFALL
Total Project Costs
(excluding land)
Less - Present Value of 10
Year Net Cash Flow
Project Shortfall
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CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ To develop the Nickelodeon Resort Hotel development, the Project must be financially feasible. The Project development costs less the present value of the Project in the 10 th year, indicates that the
Project is not feasible without public assistance . The financial shortfall of $103 million, as demonstrated in the chart above, must be addressed to make the project a reality.

The City and Developer have agreed to address the Project financial shortfall in the terms of the DDA.

The DDA provides that the project cost shortfall be addressed through 2 primary public economic development assistance components:
1) provide the land required to develop the resort project at less than fair market value of $10.6 million, but at a fair reuse value of $920,000 to allow for project feasibility and financeability; and,
2) provide public assistance based on the operation of the hotel through a TOT sharing agreement that would provide up to $93 million dollars over a term not to exceed 30 years.

The public assistance in the form of offering the site at its fair reuse value based on the covenants and conditions and development costs and the proposed TOT public assistance revenue sharing program provide the necessary financial support to make the Nickelodeon Resort Hotel a feasible project and future reality.
$10,000,000
$93,000,000
$103,000,000
estimate per key - 500 $206,000
*(includes portion of costs incurred by City for assemblage)

PROJECT FEASIBILITY PUBLIC ASSISTANCE

PROVIDE FAIR MARKET LAND VALUE

CONTRIBUTION & TOT PUBLIC ASSISTANCE
Land Value Contribution*
TOT Sharing over 30 Years
Total Warranted Project
Public Assistance
Therefore, the consideration for the Site is not less that than the fair reuse value based at the use and with the covenants and conditions and development costs authorized by the sale or lease. 20 | P a g ePage 500 of 640

CITY OF GARDEN GROVE
Economic Development Report: New Age Garden Grove ll, LLC – Project ‘Nickelodeon Resort Hotel’ CONCLUSIONS FOR ECONOMIC DEVELOPMENT REPORT FOR - AB 562- §53083 and AB 806 - §52201
The proposed AAA Four Diamond Nickelodeon Resort Hotel Project will provide a significant financial revenue generator and job creation for the City.  Over the 30-year study period the City is anticipated to receive over $236.4 million in related tax revenues from TOT, Sales, and Property Taxes.  During this period the Project will provide 1,000 jobs through construction and direct jobs at the Resort.
o Indirect and induced jobs because of the Resort Hotel 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 TOT sharing agreement in the DDA is appropriate for this project and consistent with public agencies and hotel developments.  The proposed public assistance to financially support the Project is based on and subject to the Developer and Project completion
 Public Assistance in these formats is common practice, especially involving full-Service AAA Four Diamond resort hotels such as the proposed Nickelodeon Resort Hotel in Garden Grove.
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See Proof on Next Page
The Orange County Register
1920 Main Street, Suite 209
Irvine, California 92614
(714) 796-7000
0011557128
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
Econ Dev Subsidy_New Age GG (5194707) - Page 1 of 2Page 503 of 640 Econ Dev Subsidy_New Age GG (5194707) - Page 2 of 2Page 504 of 640

Agenda Item - 4.a.

City of Garden Grove

INTER-DEPARTMEN T MEMORANDU M
To: Scott C. Stiles From: Willia m E. Murray
Dept.: City Manager Dept.: Public Works
Subject: Authorize issuance of a
purchase order to National
Auto Fleet Group for eight
(8) new Police Department
vehicles.
(Cost: $358,597.69) (A ctio n
Item)
Date: 9/13/2022

OBJECTIV E
To secure City Council authorization to purchase eight (8) new Police Department vehicles from National Auto Fleet Group through the Sourcewell competitive bid program, Contract #091521-NAF.

BACKGROUN D
The Public Works Department has eight (8) Police Department vehicles that currently meet the City’s guidelines for replacement and were approved through the FY-22/23 budget process. The vehicles being replaced are from the Gang Unit, Community Liaiso n Division , and from Admin at the Police Department. Experience has shown that the City’s buying power is enhanced through joining with other public agencies to purchase fleet vehicles and equipment.

DISCUSSIO N
Sourcewell nationally solicits , evaluates and awards contracts through a competitive bid process. As a member of Sourcewell , the City is able to utilize bid awards for equipment purchases. Staff recommends piggybacking on the results of a recent Sourcewell competitive bid program, Contract #091521-NAF. The results deemed National Auto Fleet Group as the lowest responsive bid.

National Auto Fleet Group
(3 Gang units)
$48,542.48*
National Auto Fleet Group
(2 Admin units)
$48,555.53*

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National Auto Fleet Group $38,619.74*
(3 Community Liaiso n units)
* This price includes all applicable tax and destination charges.

FINANCIA L IMPAC T
There is no impact to the General Fund. The financial impact is $358,597.69 to the Fleet Management Fund. The surplus equipment will be sold at public auction.

RECOMMENDATIO N
It is recommended that the City Council :

Authorize the Finance Director to issue a purchase order in the amount of $358,597.69 to National Auto Fleet Group for the purchase of eight (8) new Police Department vehicles.

By: Steve Sudduth, Equipment Maintenance Supervisor
ATTACHMENTS:

Description Upload Date Type File Name
Nation Auto Fleet
Group Quote 8/25/2022 Backup Material NAFG_quote_Gang_units.pd f Nation Auto Fleet
Group Quote 8/25/2022 Backup Material NAFG_quote_Police_Admin_units.pdf Nation Auto Fleet
Group Quote 8/25/2022 Backup Material NAFG_quote_Community_Liaison_vehicles.pdf Vehicle replacement list 8/25/2022 Backup Material Vehicle_replacement_list_9.13.22.xlsx

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Year Make Model VIN # Mileage Veh #
2008 Ford Crown Victoria 2FAHP7 V58X 0 572 47,974 764
2009 Ford Crown Victoria 2FAHP7 V92X 45207 66,719 832
2011 Ford Crown Victoria 2FABP7BV3BX 80347 67,732 857
2007 Ford Crown Victoria 2FAHP7 W 7X 32504 65,099 748
2007 Ford Crown Victoria 2FAFP73W57X 33 57 130,302 708
2007 Ford Crown Victoria 2FAHP7 W67X 39500 47,231 747
2007 Ford Crown Victoria 2FAFP73W37X 33 56 117,808 707
2002 Ford Crown Victoria 2FAFP73W42X 59466 73,518 548

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Agenda Item - 4.b.

City of Garden Grove

INTER-DEPARTMEN T MEMORANDU M
To: Scott C. Stiles From: Willia m E. Murray
Dept.: City Manager Dept.: Public Works
Subject: Authorize issuance of
purchase orders to National
Auto Fleet Group for the
purchase of seven (7) new
Police Patrol vehicles and
two (2) new Police K-9
Units. (Cost: $450,299.85)
(A ctio n Item)
Date: 9/13/2022

OBJECTIV E
To secure City Council authorization to purchase seven (7) new Police patrol vehicles and two (2) new Police K-9 units from National Auto Fleet Group through the Sourcewell competitive bid process, Contract #091521-NAF.

BACKGROUN D
The Police Department has several patrol vehicles that will meet the City’s guidelines for replacement and were approved through the FY 22/23 budget process. These vehicles will be held in reserve and will replace Police patrol vehicles that have reached the end of their useful life. Experience has shown that the City’s buying power is enhanced through joining with other public agencies to purchase police fleet vehicles.

DISCUSSIO N
Efforts to obtain a quote from a local Ford dealer were unsuccessful, as there are no Ford dealers within the city limits. City staff recommends piggybacking on the results of a recent Sourcewell competitive bid program for police patrol vehicles, Contract #091521-NAF. The results of this bid process deemed National Auto Fleet Group as the lowest responsive bid.

National Auto Fleet Group
(7 Police patrol vehicles)
$49,901.85 each*
National Auto Fleet Group
(2 Police K-9 units)
$50,493.45 each*

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* This price includes all applicable tax and destination charges.

FINANCIA L IMPAC T
The financial impact is $450,299.85 to the Fleet Management Fund. There is no impact to the General Fund. The surplus vehicles will be sold at public auction.

RECOMMENDATIO N
It is recommended that City Council :

Authorize the Finance Director to issue a purchase order in the amount of $450,299.85 to National Auto Fleet Group for the purchase of seven (7) new Police patrol vehicles and two (2) new Police K-9 units.

By: Steve Sudduth, Equipment Maintenance Supervisor
ATTACHMENTS:

Description Upload Date Type File Name
Nation Auto Fleet Group 8/23/2022Quote Backup Material NAFG_quote_Police_patrol_vehicles.pdf Nation Auto Fleet Group 8/23/2022Quote Backup Material NAFG_quote_Police_K-9_units.pd f

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Agenda Item - 4.c.

City of Garden Grove

INTER-DEPARTMEN T MEMORANDU M
To: Scott C. Stiles From: Willia m E. Murray
Dept.: City Manager Dept.: Public Works
Subject: Award contracts to Cannon
Corporation and to NV5 to
provide on-call professional
land surveying and related
services. (Cost: $400,000
each contract) (A ctio n Item)
Date: 9/13/2022

OBJECTIV E
For the City Council to award contracts for professional land surveying and related services to Cannon Corporation and to NV5.

BACKGROUN D
The City of Garden Grove does not have a surveyor on staff, therefore the City needs to engage the services of a consultant to meet the various surveying needs of City projects.

DISCUSSIO N
The City of Garden Grove has various division s requiring survey services: Streets & Storms Drains, Water, Sanitary District, Real Property and Community Development.

Historically, the primary demand comes from the capital projects that need design and construction staking surveys. However, there is also a need for reviewing tract and parcel maps, reviewing right-of-way acquisitio n maps and preparing legal descriptions.

Staff sent out five (5) requests for proposal to survey firms for on-call survey services and received four (4) proposals. A panel consisting of four (4) staff members rated the proposals on the basis of qualifications , work plan and references. Based on the evaluation results, Cannon Corporation and NV5 were rated the highest. The followin g is a summary of the rating.

Cannon NV5 D. Woolley CL Survey
RATE R A 145 145 142 127
RATE R B 157 158 151.5 130

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RATE R C 160 153 141 134
RATE R D 164 152 162 156
TOTAL S 626 608 596.5 547

FINANCIA L IMPAC T
There is no negative financial impact to the General Fund. The services will be funded by the various projects requiring survey services. It is anticipated that the contract will be established for an amount of $400,000 and services shall be provided until the contract amount is reached. There will be an option to extend the contract by increasing the contract amount by $300,000 with a performance period of two (2) years.

RECOMMENDATIO N
It is recommended that the City Council :

Award contracts for on-call land surveying and related services on an as-needed basis to Cannon Corporation and NV5;
Authorize the City Manager to execute the contracts in the amount for $400,000.00 per contract, on behalf of the City; and
Authorize the City Manager to execute the optional extensions in the amount of $300,000, with a performance period of two years.

By: Nick Hsieh, P.E. Associate Engineer
ATTACHMENTS:

Description Upload Date Type File Name
Consultant Agreement No.
1 8/31/2022 Agreement Cnsltnt_Agmt_2022_ -
_Cannon.docx
Consultant Agreement No.
2 8/31/2022 Agreement Cnsltnt_Agmt_2022_ -
_NV5.docx
Cannon Fee schedule 8/31/2022 Backup Material Cannon_Fee_Schedule.pdf NV5 Fee Schedule 8/31/2022 Backup Material NV5_Fee_Schedule.pdf

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CONSULTANT AGREEMENT
THIS AGREEMENT is made this 13th day of September 2022, by the CITY OF GARDEN GROVE , a municipal corporation, (“CITY”), and Cannon Corporation , a California Corporation (‘‘CONSULTANT”).

RECITALS
The following recitals are a substantive part of this Agreement:

1. This Agreement is entered into pursuant to Garden Grove Council authorization dated September 13, 2022.

2. CITY desires to utilize the services of CONSULTANT to provide On-Call Land Survey Services.

3. CONSULTANT is qualified by virtue of experience, training, education and expertise to accomplish services.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

1. Term of Agreement: This Agreement shall cover services rendered from date of this Agreement until compensation reaches the not to exceed amount or sooner terminated per Section 3.5 . There shall be an option to extend the performance period of this Agreement by an additional two years, including the increase in compensation by $300,000 (three hundred thousand dollars). This two-year extension shall be executed at the sole discretion of the CITY.

2. Services to be Provided: The services to be performed by CONSULTANT shall consist of the services as further specified in CONSULTANT’S proposal attached hereto as Exhibit “A” and incorporated herein by reference. CONSULTANT agrees that is provision of Services under this agreement shall be within accepted accordance with customary and usual practices in CONSULTANT’S profession. By executing this Agreement, CONSULTANT warrants that it has carefully considered how the work should be performed and fully understands the facilities, difficulties, and restrictions attending performance of the work under this agreement.

3. Compensation. CONSULTANT shall be compensated as follows:

3.1 Amount. Compensation under this Agreement shall be per fee schedule included in the Proposal.

3.2 Not to Exceed. Compensation under this Agreement shall not exceed $400,000.

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3.3 Payment. For work under this Agreement, payment shall be made per monthly invoice. For extra work not a part of this Agreement, a written authorization by CITY will be required.

3.4 Records of Expenses. CONSULTANT shall keep c omplete and accurate records of payroll costs, travel and incidental expenses. These records will be made available at reasonable times to CITY.

3.5 Termination. CITY and CONSULTANT shall each have the right to terminate this Agreement, without cause, by giving thirty -(30) days written notice of termination to the other party. If CITY terminates the project, then the provisions of paragraph 3 shall apply to that portion of the work completed.

4. Insurance Requirements

4.1 Commencement of Work CONSULTANT shall not commence work under this Agreement until all certificates and endorsements have been received and approved by the CITY. All insurance required by this Agreement shall contain a Statement of Obligation on the part of the carrier to notify the CITY of any material change, cancellation, or termination at least thirty (30) days in advance. All subcontractors shall be responsible to provide the same insu rance as required of CONSULTANT. CONSULTANT shall be responsible to collect and maintain all insurance from all contractors and subcontractors and shall provide insurance CITY upon request.

4.2 Workers Compensation Insurance For the duration of this Agreement, CONSULTANT and all subcontractors shall maintain Workers Compensation Insurance in the amount and type required by law, if applicable. The insurer shall waive its rights of subrogation against the CITY, its officers, officials, agents, employees, and volunteers.

4.3 Insurance Amounts CONSULTANT shall maintain the following insurance for the duration of this Agreement:
a) Commercial general liability in the amount of $1,000,000 per occurrence; (claims made and modified occ urrence policies are not acceptable); Insurance companies must be admitted and licensed in California and have a Best’s Guide Rating of A-, Class VII or better, as approved by the CITY;
b) Automobile liability in the amount of $1,000,000 per occurrence; (claims made and modified occurrence policies are not
acceptable) Insurance companies must be admitted and licensed in California and have a Best’s Guide Rating of A-, Class VII or better, as approved by the CITY.
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c) Professional liability in the amount of $1,000,000 per occurrence; Insurance companies must be acceptable to CITY and have an AM Best’s Guide Rating of A-, Class VII or better, as approved by the CITY. If the policy is written on a “claims made” basis, the policy shall be continued in full forc e and effect at all times during the term of the agreement, and for a period of three (3) years from the date of the completion of services provided. In the event of termination, cancellation, or material change in the policy, professional/consultant shal l obtain continuing insurance coverage for the prior acts or omissions of professional/consultant during the course of performing services under the term of the agreement. The coverage shall be evidenced by either a new policy evidencing no gap in coverag e, or by obtaining separate extended “tail” coverage with the present or new carrier.

An Additional Insured Endorsement, ongoing and completed operations, for the policy under section 4.3 (a) shall designate CITY, its officers, officials, employees, age nts, and volunteers as additional insureds for liability arising out of work or operations performed by or on behalf of the CONSULTANT. CONSULTANT shall provide to CITY proof of insurance an d endorsement forms that conform to city’s requirements, as approved by the CITY.

An Additional Insured Endorsement for the policy under section 4.3 (b) shall designate CITY, its officers, officials, employees, agents, and volunteers as additional insureds for automobiles owned, lease, hired, or borrowed by CONSULTANT. CONSULTANT shall provide to CITY proof of insurance an d endorsement forms that conform to CITY’s requirements, as approved by the CITY.

For an y claims related to thi s Agreement, CONSULTANT’s insurance coverage shall be primary insurance as respects to CITY, its officers, officials, employees, agents, and volunteers. Any insurance or self - insurance maintained by the CITY, its officers, officials, employees, agents, or volunteers shall be excess of the CONSULTANT’s insurance and shall not contribute with it.

If CONSULTANT maintains higher insurance limits than the minimums shown above, CONSULTANT shall provide coverage for the higher insurance limits otherwise maintained by the CONSULTANT.

5. Non-Liability of Officials and Employees of the CITY . No official or employee of CITY shall be personally liable to CONSULTANT in the event of any default or breach by CITY, or for any amount, which may become due to CONSULTANT.

6. Non-Discrimination. CONSULTANT covenants there shall be no discrimination against any person or group due to race, color, creed, religion, 3 Page 569 of 640

sex, marital status, age, handicap, national origin or ancestry, in any activity pursuant to this Agreement.

7. Independent Contractor. It is understood and agreed that CONSULTANT, including CONSULTANT’s employees, shall act and be independent contractor(s) and not agent(s) or employee(s) of CITY, and that no relationship of employer-employee exists between the parties. CONSULTANT’s assigned personnel shall not obtain or be entitled to an y rights or benefits that accrue to, or are payable to, CITY employees, and CONSULTANT shall so inform each employee organization and each employee who is hired or retained under this Agreement. CITY is not required to make any deductions or withholdings from the compensation payable to CONSULTANT under the provisions of this Agreement, and is not required to issue W -2 Forms for income and employment tax purposes for any of CONSULTANT’s assigned personnel .

CONSULTANT hereby expressly assumes all responsibility and liability for the payment of wages and benefits to its assigned personnel, and all related reporting and withholding obligations. CONSULTANT hereby agrees to indemnify and hold CITY harmless from any and all claims or liabilities that CITY may incur arising from any contention by any third party, including, but not limited to, any employee of CONSULTANT or any federal or state agency or other entity, that an employer -employee relationship exists by reason of this Agreement, including, without limitation, claims that CITY is responsible for retirement or other benefits allegedly accruing to CONSULTANT’s assigned personnel.

8. Compliance With Law. CONSULTANT shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local government.

CONSULTANT shall comply with, and shall be responsible for causing all contractors and subcontractors performing any of the work pursuant to this Agreement, if any, to comply with, all applicable federal and state labor standards, including, to the extent applicable, the prevailing wage requirements promulgated by the Director of Industrial Relations of the State of California Depa rtment of Labor. The City makes no warranty or representation concerning whether any of the work performed pursuant to this Agreement constitutes public works subject to the prevailing wage requirements.

9. Disclosure of Documents. All documents or other information developed or received by CONSULTANT are confidential and shall not be disclosed without authorization by CITY, unless disclosure is required by law.

10. Ownership of Work Product. All documents or other information developed or received by CONSULTANT shall be the property of CITY. CONSULTANT shall provide CITY with copies of these items upon demand or upon termination of this Agreement.

11. Conflict of Interest and Reporting . CONSULTANT shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement.
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12. Notices. All notices shall be personally delivered or mailed to the below listed addresses, or to such other addresses as may be designated by written notice.

These addresses shall be used for delivery of service of process. (a) Address of CONSULTANT is as follows:

Cannon Corporation
16842 Von Karman Avenue, Suite 150
Irvine, CA 92606
(b) Address of CITY is as follows (with a copy to):

Engineering: City Attorney
City of Garden Grove City of Garden Grove
P.O. Box 3070 P.O. Box 3070
Garden Grove, CA 92840 Garden Grove, CA 92840

13. CONSULTANT’S Proposal. This Agreemen t shall include CONSULTANT’ S proposal, Exhibit “A” hereto, which shall be incorporated herein. In the event of any inconsistency between the terms of the proposal and this Agreement, this Agreement shall govern.

14. Licenses, Permits and Fees. At its sole expense, CONSULTANT shall obtain a Garden Grove Business License , all permits and licenses as may be required by this Agreement.

15. Familiarity With Work . By executing this Agreement, CONSULTANT warrants that: (1) it has investigated the work to be performed ; (2) it has investigated the site of the work and is aware of all conditions there; and (3) it understands the facilities, difficulties and restrictions of the work under this Agreement. Should CONSULTANT discover any latent or unknown conditions materially differing from those inherent in the work or as represented by CITY, it shall immediately in form CITY of this and shall not proceed, except at CONSULTANT’S risk, until written instructions are received from CITY.

16. Time of Essence . Time is of the essence in the performance of this Agreement.

17. Limitations Upon Subcontracting and Assignme nt. The experience, knowledge, capability and reputation of CONSULTANT, its principals and employees were a substantial inducement for CITY to enter into this Agreement. CONSULTANT shall not contract with any other entity to perform the services required without written approval of the CITY. This Agreement may not be assigned voluntarily or by operation of law, without the prior written approval of CITY. If CONSULTANT is permitted to subcontract any part of this Agreement, CONSULTANT shall be responsible to CITY for the acts and omissions of its subcontractor as it is for persons directly employed. Nothing contained in this Agreement shall create any contractual relationship between any subcontractor and CITY. All persons engaged in the work will be 5 Page 571 of 640

considered employees of CONSULTANT. CITY will deal directly with and will make all payments to CONSULTANT.

18. Authority to Execute. The persons executing this Agreement on behalf of the parties warrant that they are duly authorized to execute this Agreement and that by executing this Agreement, the parties are formally bound.

19. Indemnification. To the fullest extent permitted by law, CONSULTANT agrees to protect, defend, and hold harmless CITY and its elective or appointive boards, officers, agents, and emplo yees from any and all claims, liabilities, expenses, or damages of any nature, including attorneys' fees, for injury or death of any person, or damages of any nature, including interference with use of property, arising out of, or in any way connected with the negligence, recklessness and/or intentional wrongful conduct of CONSULTANT, CONSULTANT'S agents, officers, employees, subcontractors, or independent contractors hired by CONSULTANT in the performance of the Agreement. The only exception to CONSULTANT 'S responsibility to protect, defend, and hold harmless CITY, is due to the negligence, recklessness and/or wrongful conduct of CITY, or any of its elective or appointive boards, officers, agents, or employees.

This hold harmless agreement shall apply to all liability regardless of whether any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by CONSULTANT.

20. Modification. This Agreement constitutes the entire agreement between the parties and supersedes any previous agreements, oral or written. This Agreement may be modified only by subsequent mutual written agreement executed by CITY and CONSULTANT.

21. Waiver. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the CITY and CONSULTANT.

22. California Law. This Agreement shall be construed in accordance with the laws of the State of California. Any action commenced about this Agreement shall be filed in the central branch of the Orange County Superior Court.

23. Interpretation. This Agreement shall be interpreted as though prepared by both parties

24. Preservation of Agreement . Should any provision of this Agreement be found invalid or unenforceable, the dec ision shall affect only the provision interpreted, and all remaining provisions shall remain enforceable. [SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS THEREOF, these parties hereto have caused this Agreement to be executed as of the date set forth opposite the respective signatures. “CITY”

CITY OF GARDEN GROVE
Dated: , 2022 By:

City Manager
ATTEST "CONSULTANT"
By:

City Clerk Title:

Dated: , 2022 Dated: , 2022
APPROVED AS TO FORM:

If CONSULTANT/CONTRACTOR is a
corporation, a Corporate Resolution
and/or Corporate Seal is required. If
a partnership, Statement of
Partnership must be submitted to
CITY
Garden Grove City Attorney
Dated: , 2022
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CONSULTANT AGREEMENT
THIS AGREEMENT is made this 13th day of September 2022, by the CITY OF GARDEN GROVE , a municipal corporation , (“CITY”), and NV5, Inc. , a Calif ornia Corporation (‘‘CONSULTANT”).

RECITALS
The following recitals are a substantive part of this Agreement:

1. This Agreement is entered into pursuant to Garden Grove Council authorization dated September 13, 2022.

2. CITY desires to utilize the servi ces of CONSULTANT to provide On-Call Land Survey Services.

3. CONSULTANT is qualified by virtue of experience, training, education and expertise to accomplish services.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

3. Compensation. CONSULTANT shall be compensated as follows:

3.1 Amount. Compensation under this Agreement shall be per fee schedule included in the Proposal.

3.2 Not to Exceed. Compensation under this Agreement shall not exceed $400,000.

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3.3 Payment. For work under this Agreement, payment shall be made per monthly invoice. For extra work not a part of this Agreement, a written authorization by CITY will be required.

3.4 Records of Expenses. CONSULTANT shall keep complete a nd accurate records of payroll costs, travel and incidental expenses. These records will be made available at reasonable times to CITY.

4. Insurance Requirements

If CONSULTANT maintains higher insurance limits than the minimums shown above, CONSULTANT shall provide coverage for the higher insurance limits otherwise maintained by the CONSULTANT.

6. Non-Discrimination. CONSULTANT covenants there shall be no discrimination against any person or group due to race, color, creed, religion, 3 Page 576 of 640

sex, marital status, age, handicap, national origin or ancestry, in any activity pursuant to this Agreement.

7. Independent Contractor. It is understood and agreed that CONSULTANT, including CONSULTANT’s employees, shall act and be independent contractor(s) and not agent(s) or employee(s) of CITY, and that no relationship of employer-employee exists between the parties. CONSULTANT’s a ssigned personnel shall not obtain or be entitled to any rights or benefits that accrue to, or are payable to, CITY employees, and CONSULTANT shall so inform each employee organization and each employee who is hired or retained under this Agreement. CITY is not required to make any deductions or withholdings from the compensation payable to CONSULTANT under the provisions of this Agreement, and is not required to issue W -2 Forms for income and employment tax purposes for any of CONSULTANT’s assigned person nel.

CONSULTANT hereby expressly assumes all responsibility and liability for the payment of wages and benefits to its assigned personnel, and all related reporting and withholding obligations. CONSULTANT hereby agrees to indemnify and hold CITY harmles s from any and all claims or liabilities that CITY may incur arising from any contention by any third party, including, but not limited to, any employee of CONSULTANT or any federal or state agency or other entity, that an employer -employee relationship exists by reason of this Agreement, including, without limitation, claims that CITY is responsible for retirement or other benefits allegedly accruing to CONSULTANT’s assigned personnel.

8. Compliance With Law. CONSULTANT shall comply with all applicable laws, ordinances, codes and regulations of the federal, state and local government.

11. Conflict of Interest and Reporting . CONSULTANT shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement.
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12. Notices. All notices shall be personally delivered or mailed to the below listed addresses, or to such other addresses as may be designated by written notice.

These addresses shall be used for delivery of service of process. (a) Address of CONSULTANT is as follows:

NV5, Inc.
163 Technology Drive, Suite 100
Irvine, CA 92618
(b) Address of CITY is as follows (with a copy to):

Engineering: City Attorney
City of Garden Grove City of Garden Grove
P.O. Box 3070 P.O. Box 3070
Garden Grove, CA 92840 Garden Grove, CA 92840

14. Licenses, Permits and Fees. At its sole expense, CONSULTANT shall obtain a Garden Grove Business License , all permits and licenses as may be required by this Agreement.

15. Familiarity With Work . By executing this Agreement, CONSULTANT warrants that: (1) it has investigated the work to be performed ; (2) it has investigated the site of the work and is aware of all conditions there; and (3) it understands the facilities, difficulties and restrictions of the work under this Agreement. Should CONSULTANT discover any latent or unknown conditions materially differing from those inherent in the work or as represented by CITY, it shall immediately inform CITY of this and shall not proceed, except at CONSULTANT’S risk, until written instructions are received from CITY.

16. Time of Essence . Time is of the essence in the performance of this Agreement.

17. Limitations Upon Subcontracting and Assignment . The exp erience, knowledge, capability and reputation of CONSULTANT, its principals and employees were a substantial inducement for CITY to enter into this Agreement. CONSULTANT shall not contract with any other entity to perform the services required without wri tten approval of the CITY. This Agreement may not be assigned voluntarily or by operation of law, without the prior written approval of CITY. If CONSULTANT is permitted to subcontract any part of this Agreement, CONSULTANT shall be responsible to CITY for the acts and omissions of its subcontractor as it is for persons directly employed. Nothing contained in this Agreement shall create any contractual relationship between any subcontractor and CITY. All persons engaged in the work will be 5 Page 578 of 640

considered employees of CONSULTANT. CITY will deal directly with and will make all payments to CONSULTANT.

19. Indemnification. To the fullest extent permitted by law, CONSULTANT agrees to protect, defend, and hold harmless CITY and its elective or appointive boards, officers, agents, and employees from an y and all claims, liabilities, expenses, or damages of any nature, including attorneys' fees, for injury or death of any person, or damages of any nature, including interference with use of property, arising out of, or in any way connected with the neglige nce, recklessness and/or intentional wrongful conduct of CONSULTANT, CONSULTANT'S agents, officers, employees, subcontractors, or independent contractors hired by CONSULTANT in the performance of the Agreement. The only exception to CONSULTANT'S responsib ility to protect, defend, and hold harmless CITY, is due to the negligence, recklessness and/or wrongful conduct of CITY, or any of its elective or appointive boards, officers, agents, or employees.

21. Waiver. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the CITY and CONSULTANT.

23. Interpretation. This Agreement shall be interpreted as though prepared by both parties

24. Preservation of Agreement . Should any provision of this Agreement be found invalid or unenforceable, the decisio n shall affect only the provision interpreted, and all remaining provisions shall remain enforceable. [SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS THEREOF, these parties hereto have caused this Agreement to be executed as of the date set forth opposite the respective signatures. “CITY”

CITY OF GARDEN GROVE
Dated: , 2022 By:

City Manager
ATTEST "CONSULTANT"
By:

City Clerk Title:

Dated: , 2022 Dated: , 2022
APPROVED AS TO FORM:

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Agenda Item - 4.d.

City of Garden Grove

INTER-DEPARTMEN T MEMORANDU M
To: Scott C. Stiles From: Willia m E. Murray
Dept.: City Manager Dept.: Public Works
Subject: Award a contract to R.J. Date:

Noble Company, for
Chapman Avenue Resurfacing
and 5-Year Landscape and
Irrigation
M
aintenance. (Cost:
$4,185,570.00) (A ctio n Item)
9/13/2022

OBJECTIV E
For City Council to award a contract to R.J. Noble Company for Chapman Avenue Resurfacing from Springdale Street to Western Avenue (CP1341000) and 5-Year Landscape and Irrigation Maintenance (CP1341278).

BACKGROUN D
The Chapman Avenue project will be split into two (2) phases. The first phase consists of the resurfacing of Chapman Avenue by removal and replacement ("dig outs") of failed pavement areas, cold milling , installation of ARAM , asphalt paving, repair of damaged sidewalk, curb & gutter, cross gutter, bus pads, upgrade of access ramps, catch basin CPS Screens, adjustment of utility covers to finish grade, restoration of traffic signing, striping, & pavement markings, landscaping and irrigation, and reestablishment of centerline ties and monuments. The second phase will consist of landscaping and irrigation maintenance for five (5) years.

As referenced, Phase 1 will include landscape and irrigation improvements from Wild Goose Street to Santa Catalina Avenue. On April 28, 2022, staff conducted a neighborhoo d meeting to solici t feedback about these improvements. Residents unanimously selected one of the three concepts designed by the City's consultant.

DISCUSSIO N
Staff solicited bids for this project pursuant to Municipal Code Section 2.50.100. Two (2) qualified bids were received at the City Clerk's office by 11:00 a.m. on August 30, 2022. The lowest qualified contractor was RJ Noble Company, with a total bid of $4,185,570. This bid amount is within the current project budget. The licenses and references of the contractor have been reviewed and verified by staff, and all other

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documentation is in order.

The anticipated contract schedule is as follows :

Award Contract September 13, 2022
Begin Construction (estimated) October 17, 2022
Complete Construction (estimated) March, 2023
Begin 5 yr maint. period
(estimated)
May, 2023
End 5 yr maint. period (estimated) April, 2023

FINANCIA L IMPAC T
There is no impact to the General Fund. These improvements were included in the Fiscal Year 2022-23 Capital Improvement Plan budget and are funded by Measure "M2 Local Fair Share," and Gas Tax.

RECOMMENDATIO N
It is recommended that the City Council :

Award a contract to R.J. Noble Company in the amount of $4,185,570 for Chapman Avenue Resurfacing from Springdale Street to Western Avenue (CP1341000) and 5-Year Landscape and Irrigation Maintenance (CP1341278); and
Authorize the City Manager to execute an agreement with R.J. Noble Company, and make minor modification s as appropriate thereto, on behalf of the City.

By: Nick Hsieh, P.E. Associate Engineer
ATTACHMENTS:

Description Upload Date Type File Name
BID SUMMARY 9/2/2022 Backup Material bidsummary_9-13-22.pd f AGREEMENT 9/2/2022 Agreement RJNOBLE_Construction_Agreement.pd f

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CITY OF GARDEN GROVE

PUBLIC WORKS DEPARTMENT
Engineering Division

BID SUMMARY SHEET
FOR
CHAPMAN AVENUE RESURFACING AND 5-YEAR LANDSCAPE AND

IRRIGATION MAINTENANCE
BID OPENING: DATE: August 30, 2022 TIME: 11 :00 A.M.

ENGINEER’S ESTIMATE: $ 4,200,200.00
Bidder’s Name Total Bid
% Under/Over
Engrs. Est
RJ Noble Company $4,185,570.00 0.35% Under
Hardy and Harper $4,375,000.00 4.16% Over

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C O N S T R U C T I O N A G R E E M E N T

RJ NOBLE COMPANY
THIS AGREEMENT is made this 13th da y of September , 2022 by the CITY OF GARDEN GROVE, a municipal corporation, ("CITY"), and RJ Noble Company , hereinafter referred to as ("CONTRACTOR").

RECITALS:

The following recitals are a substantive part of this Agreement:

1. This Agreement is entered into pursuant to Garden Grove City Council Authorization dated September 13, 2022.

2. CITY desires to utilize the services of CONTRACTOR to furnish material, equipment, and labor for the CHAPMAN AVENUE RESURFACING FROM SPRINGDALE STREET TO WESTERN AVENUE, CITY PROJECT NO. 1341000 and 5-YEAR LANDSCAPE AND IRRIGATION MAINTENANCE, CITY PROJECT NO. 1341278.

3. CONTRACTOR is qualified by virtue of experience, training, education, and expertise to accomplish services.

AGREEMENT
THE PARTIES MUTUALLY AGREE AS FOLLOWS:

5.1 General Conditions. CONTRACTOR certifies and agrees that all the terms, condition s and obligations of the Contract Documents as hereinafter defined, the location of the job site, and the conditions under which the work is to be performed have been thoroughly reviewed, and enters into this Contract based upon CONTRACTOR'S investigation of all such matters and is in no way relying upon any opinions o r representations of CITY. It i s agreed that this Contract represents the entire agreement. It is furthe r agreed that the Contract Documents including the Notice Inviting Bids, Special Instructions to Bidders, i f any, Plans, Specifications, and CONTRACTOR's Proposal, are inco rporated in this Contract by reference, with the same force and effect as if thesame were set forth at length herein, and that CONTRACTOR and its subcontractors, if any, will be and are bound b y any and all of said Contract Documents insofar as they relat e in any part or in any way, directly or indirectly, to the work covered by this Contract. "Project" as used herein defines the entire scope of the work covered by all the Contrac t Documents. Anything mentioned in the Specifications and not indicated in the Plans, or indicated in the Plans and not mentioned i n the Specifications, shall be of like effec t as if indicated and mentioned in both. In case of discrepancy in the Plans or Specifications, the matter shall be immediately submitted to CITY’S Engineer, witho ut whose decision CONTRACTOR shall not adjust said discrepancy save only at CONTRACTOR'S own risk and expense. The decision of the Engineer shall be final. - 41 – Page 586 of 640

SECTION 5 - AGREEMENT (Continued)

5.2 Materials and Labor. CONTRACTOR shall furnish, under the conditions expressed in the Plans and Specifications, at CONTRACTOR'S own expense, all labo r and materials necessary, except such as are mentioned in the Specifications to be furnished by the CITY, to construct and complete the project, in good workmanlike and substantial order. I f CONTRACTOR fails to pay for labor or materials when due, CITY may settle such claims by making demand upon the surety to this Agreement. In the event of the failure or refusal of the surety to satisfy said claims, CITY may settle them directly and deduct the amount o f payments from the Contract pric e and any amounts due to CONTRAC TOR. In the even t CITY receives a stop notice from any laborer or material suppli er alleging non-payment by CONTRACTOR, CITY shall be entitled to deduct all of its costs a nd expenses incurre d relating thereto, including but not limited to administrative and legal fees.

5.3 Project. The PROJECT is described as: CHAPMAN AVENUE RESURFACIN G FROM SPRINGDALE STREET TO WESTERN AVENUE, CITY PROJECT NO. 1341000 and 5- YEAR LANDSCAPE AND IRRIGATION MAINTENANCE, CITY PROJECT NO. 1341278.

5.4 Plans and Specifications. The work to be done is shown in a set of detailed Plans and Specifications entitled: CHAPMAN AVENU E RESURFACING FROM SPRINGDAL E STREET TO WESTERN AVENUE, CITY PROJECT NO. 1341000 and 5-YEAR LANDSCAPE AND IRRIGATION MAINTEN ANCE, CITY PROJECT NO. 1341278. Said Plans and Specifications and any revision, amendments or addenda thereto are attached hereto and incorporated herein as part of this Contract and referred to by reference. Th e work to be done must also be in accordance with the General Provisions, Standard Specifications and Standard Plans of the CITY, which are also i ncorporated herein and referred to by, reference.

5.5 Time of Commencement and Completion. CONTRACTOR shall have ten (10) working days from the award of the Contract to execute the Contract and supply the CITY with all the documents and information required b y the Instructions to B idders and th e other Contract Documents, including but not limited to, the necessary bonds and insuranc e certificates and endorsements. Once the CITY receives the executed contract and all of the other properly drafted and executed documents and information, i t m a y i s s ue a N o t i c e to Proceed to the CONTRACTOR. If CONTRACTOR refuses or fails to p rovide the required documents and information within the ten (10) city working days, the CITY may then rescind the award of the Contract and then award the Contract to the ne xt lowest responsive and responsible bidder.

The Contract time shall commence on the fifteenth (15 th) calendar day following the Notice to Proceed issued b y the City and the CONTRACTOR agrees to submit shop drawings within fourteen (14) calendar days . Further, upon receipt of the Notice to Proceed, the CONTRACTOR shall diligently prosecute the work wit hin 95 (Ninety-Five) working days for phase 1 and within 5 (Five) years for phase 2 to completion as required per the plans and specifications excluding delays caused or aut horized by the CITY as set forth in Sections 5.7, 5.8 and 5.9 hereof.

5.6 Time is of the Essence. Time is of the essenceof this Contract.

Contractor shall have fourteen (14) calendar day s from the award o f the Contract t o execute the Contract and supply CITY with all of the documents and information required by the Instruction to Bidders and the other ContractDocuments, including but not limited to, the necessary bonds and insurance certificatesand endorsements. Once the CITY receives the executed Contract and all of the other properly drafted and execute d documents and information, it may issue a Notice to Proceed t o the CONTRACTOR. If CONTRACTOR - 42 - Page 587 of 640

SECTION 5 - AGREEMENT (Continued)
refuses or fails to execute the Contract or refuses or fails to provide the required documents and information withi n the fourteen (14) calendar days, th e CITY may then rescind the award of th e Contract and the n award the Contract to the next l owest responsible and responsive bidder.

As required by the Contract Documents, CONTRACTOR shall prepare and obtain approval of all shop drawings, details and samples, and do all other things necessary and incidental to the prosecution of CONTRACTOR'S work in conformance with an approved construction progress schedule. CONTRACTOR shall coordinate the work covered by this Contract with that of all other CONTRACTORs, subcontractors and o f the CITY, in a manner that will facilitate the efficient complet ion of the entire work in accor dance with Section 5.5 herein.

CITY shall have complete control of the premises on which the work is to be performed and shall have the right to decide the timeor order in which the various portions of the work shall be installed or the priorit y of the work of other subcontractor s, and, in general, all matters representing the timely and orderly conductof the work of CONTRACTOR on the premises.

5.7 Excusable Delays. CONTRACTOR shall be excused for any dela y in the prosecution or completion of the Project caused b y acts of God; inclement weather; damages caused b y fire or other casualty for which CONTRACTOR is not responsible; any act of negligence or default of CITY; failure of CITY to make timely payments to CONTRACTOR; late delivery of materials required b y this CONTRACT to b e furnished by CITY; combined action of th e workers in no way caused b y or resulting fro m default or collusion on the part of CONTRACTOR; a lockout by CITY; or any other delays unforeseen by CONTRACTOR and beyond CONTRACTOR'S reasonable control.

CITY shall extend the time fixed in Section 5.5 herein for completion of the Project by the number of days CONTRACTOR has thus been delayed, provided that CONTRACTOR presents a written request to CITY for such time extensio n within fifteen (15) days of th e commencement of such delay and CITY finds that the delay is justified. CITY'S decision will be conclusive on the parties to this Contract. Failure to file such request within the time allowed shall be deemed a waiver of the claim by CONTRACTOR.

No claims b y CONTRACTOR for additional compensation or damages for delays will be allowed unless CONTRACTOR satisfies CIT Y that such delays were unavoidable and not the result o f any action or inaction of CONTRACTOR and that CON TRACTOR took all available measures to mitigate such damages. Extensions of tim e and extra compensation as a result of incurrin g undisclosed utilities would be determi ned i n accordance with SPECIAL PROVISIONS and Section 3-3 of the Standard Specification s f o r P u b l i c W o r ks Construction 2006 Edition (GREEN BOOK). Th e CITY’S decision will be conclusive on all parties to this Contract.

5.8 Extra Work. The Contract pric e includes compensation for all work perform ed b y CONTRACTOR, unless CONTRACTOR obtain s a written change order si gned by a designated representative of CIT Y specifying the exact nature of the extra work and th e amount of extra compensation t o be paid all as more particularly set forth in Section 5.9 hereof.

CITY shall extend the time fixed in Section 5.5 for completion of the Project by the number of days reasonably required for CONTRACTOR to perform the extra work, as determined by CITY’S Engineer. The decision of the Engineer shall be final. - 43 -

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SECTION 5 - AGREEMENT (Continued)

5.9 Changes in Project.

5.9.1 CITY may at any time, without notice to any surety, by written order designated or indicated to be a change order, make any change in the work within the general scope of the Contract, including but not limited to changes:
a. In the Specifications (including drawings and designs); b. In the time, method or manner of performance of the work; c. In the CITY -furnished facilities, equipment, materials, services or site; or d. Directing acceleration in the performance of the work.

If CONTRACTOR believes that the written order issued as part of this Section 5.9.1 has caused an increase in costs or time, the CONTRACTOR shall s ubmit a written request for equitable adjustment to the CITY that includes a detailed cost breakdown and time impact analysis in sufficient detail to allow the CITY to analyze the request.

Said notice shall be submitted via certified mail within twent y (20) days of the CONTRACTOR’S receipt of the written order. CONTRACTOR’S failur e to submit the written request for equitable adjustment within the required twenty (20) days shall constitute a waiver of any potential change order or clai m for said alleged change.

The CITY shall revie w CONTRACTOR’S request and shall provide a written response within thirty (30) days of receipt of the request either approving or denying the request.

5.9.2 A change may also be any other conflict , difficulty or issue which the CONTRACTOR believes caused any change t o the CONTRACTOR’S costs o r project schedule, provided CONTRACTOR gives th e CITY written no tice and a request for equitable adjustment that includes a detailed cost breakdown and time impact analysis in sufficient detail t o allow the CIT Y to analyze the request. Th e notice shall also state the date the CONTRACTOR became aware of the issue, circumstances and source of the issue and that CONTRACTOR regards the issue as a change order. Said written notice shall be delivered to the CITY via certified mail within twenty (20) days of CONTRACTOR’S first notice of th e issue.

CONTRACTOR’S failure to submit the notice, which includes the written request for equitable adjustment within the required twenty (20) days s hall constitute a waiver of ant potential change order or claim for said alleged change. The CITY shall review CONTRACTOR’S request and shall provide a written r esponse within thirty (30) days of receipt of the request either approving or denying the request.

5.9.3 Except as provided in this Section 5.9, no order, statement o r conduct of the CITY or its representatives shall be treated as a change under this Section 5.9 or entitle CONTRACTOR to an equitable adjustment.

5.9.4 Except for claims based on defective specifications, no claim for any change under paragraph 5.9.1 or 5.9.2 above shall be allowed for any work performed more than 20 days before the CONTRACTOR gives written notice as required in paragraphs

5.9.1 and 5.9.2. In the case of defectiv e specifications for w h i c h t h e C I TY is responsible, the equitable adjustment shall include any increas ed direct cost CONTRACTOR reasonably incurred in attempting to comply with tho se defective specifications.
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SECTION 5 - AGREEMENT (Continued)

5.9.5 If CONTRACTOR intends to assert a claim for an equitable adjustment under this Section 5.9, it must, within thirty (30) days after receipt of a denial of a request for equitable adjustmentunder paragraphs 5.9.1 and5.9.2, submit a written statement to the CIT Y setting forth the general nature and monetary exten t of such claim.

The CITY may extend the 30-day period. CONTRACTOR’S failure to submit the notice of a claim, within the required thirty (30) days shall constitute a waiver of the claim by the CONTRACTOR.

5.9.6 No claim by CONTRACTOR for an equitable adjustment shall be allowed if made after final payment under this Agreement.

5.9.7 CONTRACTOR hereby agrees to make any and all changes, furnish the materials and perform the work that CIT Y may require without nullifying this Contract.

CONTRACTOR shall adhere strictl y to the Plans and Specification s unless a change there from is authorized in writing by the CITY. Under no condition shall CONTRACTOR make any changes to the Project, either in additions o r deductions, without the written order of th e CITY and the CIT Y shall not pay for any extra charges mad e by CONTRACTOR that have no t been agreed upon in advance in writing by the CITY. CONTRACTOR shall submit immediately to the CITY written copies of its firm's cost or credit proposal fo r change in the work.

Disputed work shall be performed as ordered in writing by the CITY and the proper cost or credit breakdowns therefore shall be submitted without delay by CONTRACTOR to CITY.

5.10 Liquidated Damages for Delay . The parties agree that if the total work called for under this Contract, in all parts and requirements, is not completed within the time specified i n Section 5.5 herein, plus the allowance made for delays o r extensions authorized under Sections 5.7, 5.8 and 5.9 herein, the CITY will sustain damage which would be extremely difficult and impractical to ascertain. The parties therefore agree that CONTRACTOR will pay to CITY the sum of Fifteen Hundred Dollars ($1,500.00) per day for each and every calendar day during which completion of the Project is so delay ed. CONTRACTOR agrees to pay such liquidated damages and further agrees that CIT Y may offset the amount of liquidated damages from any monies due o r that may become due C ONTRACTOR under the Contract.

5.11 Contract Price and Method of Payment. CITY agrees to pay and the CONTRACTOR agrees to accept as full consideration for the faithful performance of this Contract, subject to any subsequent additions or deductions as provided inapproved change orders, the sum of Four Million, One Hundred and Eighty Five Thousand, Five Hundr ed and Seventy Dollars and Zero Cents ($ 4,185,570.00) as itemized in the bid proposal.

Progress payments shall be made to the CONTRACTOR on a monthly basis for each successive month as the work progresses. The CONTRACTOR shall be paid such sum as will bring the total payments received since the commencement of the work up to ninety-five percent (95%) of the value of the work completed, less all previous payments, provided that the CONTRACTOR submits the request for payment prior to the end of the day required to meet the payment schedule. The CIT Y will retain five percent (5%) of the amount of each such progress estimate and material cost until 30 days after the recordation of the Notice of Completion.

Payments shall be made on demands drawn in the manner required by law, accompanied by a certificate signed by the CITY’ S Engineer, stating that the work for which payment is demanded has been performed in accordance with the terms of th e Contract. Partial - 45 - Page 590 of 640

SECTION 5 - AGREEMENT (Continued)
payments of the Contract price shall not be considered as an acceptance of any part of the work.

5.12 Substitution of Securities in Lieu of Retentio n of Funds. Pursuant to California Public Works Contract Code § 22300, th e CONTRACTOR wil l be entitled to post approve d securities with the CIT Y or an approved financial institution in order to have the CIT Y release funds retained by the CITY to ensure performance of the Contract. CONTRACTOR shall be required to execute an addendum to this Contract together with escrow instructions and any other documents in order toeffect this substitution.

5.13 Completion. Within 10 days after the contract completion dat e of the Proj ect, CONTRACTOR shall file with the CITY’S Engineer its affidavit stating that all workers and persons employed, all firms supplying materials, and all subcontractors upon the Project have been paid in full, and that there are no claims outstanding against the Project for either labor or material, except those certain items, if any, to be set forth in an affidavit covering disputed claims, or items in connection with Stop Notices which have been filed under the provisions of the statutes of the State of California. CIT Y may require affidavits or certificates of payment and/or releases from any subcontractor, laborer or material supplier.

5.14 CONTRACTOR 's Employees Compensation

5.14.1 General Prevailing Rate. CITY ha s ascertained CONTRACTOR shall comply with all applicable requirements of Division 2, Part 7, Chapter 1 of the California Labor Code and all applicable federal requirements r especting the payment of prevailing wages. If there is a difference between the minimum wage rates predetermined by the Secretary of Labor and the prevailing wage rates determined by the Director of the Department of Industrial Rela tions (DIR) for similar classifications of labor, the CONTRACTOR and its Subcontractors shall pay not less than the higher wage rate. The DIR will not accept lower State wage rates not specifically included in the Federal minimum wage determinations. This includes "helper" (or other classifications based on hours of e xperience) or any other classification not appearing in the Federal Wage determinations. Wher e Federal wage determinations do not contain the State wage rate determination otherwise available for use by th e CONTRACTOR and Subcontractors, the CONTRACTOR and its Subcontractors shall pay not less than the Federal Minimum wage rate which most closely approximates the duties of the employees in question."

5.14.2 Forfeiture for Violation. CONTRACTOR shall, as a penalty to the CITY, forfeit one hundred dollars ($100.00) for each calendar day or portion thereof for each worker paid (either by the CONTRACTOR or any subcontractor under it) less than the prevailing rate of per diem wages as set by th e Director of Industrial Relations, in accordance with Sections 1770-1780 of the California Labor Code for the work provided for in this Contract, all in accordance with Section 1775 of the Labor Code of the State of California.

5.14.3 Apprentices. Section 1777.5, 1777.6 and 1777.7 of the Labor Code of the State of California, regarding the employmen t of apprentices is applicable to this Contract and the CONTRACTOR shall comply therewith; provided, however, that this requirement shall not apply if and/or to the exten t that t he Contract of th e general CONTRACTOR, or the contracts of specialt y contractors not bidding for work through a general or prime contractor involve less thanthirty thousand dollars ($30,000.00).
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SECTION 5 - AGREEMENT (Continued)

5.14.4 Workday. In the performance of this Contract, not more than eight (8) hours shall constitute a day's work, and CONTRACTOR shall not r equire more than eight (8) hours of labor in a day from any person employed by him hereunder except as provided in paragraph (5.14.2) above. CONTRACTOR shall conform to Article 3, Chapter 1, Part 7 (Sections 1810 et seq.) of the Labor Code of the State of California and shall forfeit to the CITY as a penalty, the s um of twenty-fiv e Dollars ($25.00) for each worker employed in the execution of t his Contract by CONTRACTOR or any subcontractor for each calendar day during wh ich any worker is required or permitted t o labor more than eight (8) ho urs in any one calendar day and forty (40) hours in any one week in violation of said Article .

CONTRACTOR shall keep an accurate record showing the name and actual hours worked each calendar day and each calendar week by each worker employed by CONTRACTOR in connection with the Project.

5.14.5 Record of Wages: Inspection. CONTRACTOR agrees to maintain accurate payroll records showing the name, address, social security number, work classification, straight-time and overtime hours worked each day and week, and the actual per diem wages paid to each journeyman, apprentice, worker or other employee employed by it in connection with the Project and agrees to require that each o f its subcontractors does th e same. The applicable CONTR ACTOR or subcontractor or its agent having authority over such matters shall certify all payroll records as accurate. CONTRACTOR further agrees that its payroll records and those of its subcontractors shall b e available to the employee or employee' s representative, the Division of Labor Standards Enforcement, and the Division of Apprenticeship Standards and shall comply with all of the provisions of Labor Code Section 1776, in general. CONTRACTOR shall comply with all of the provisions of Labor Cod e Section 1776, and shall submi t payroll records to th e Labor Commissioner pursuant to Labor Code section 1771.4(a)(3). The CONTRACTOR shall submit copies of certified payroll reports and cancelled checks f or l a bo r s, every tw o weeks to the Engineer. Certified payroll and cancel led checks submittals are due one month afte r start of construction and every two weeks thereafter. If the certified payroll and cancelle d checks are not submitted, the CONTRACTOR will be notified that compliance is required within five (5) working days or contract work must cease. The CITY will not be responsible for any delay or acceleration charges or any incurred costs or damages as a result of the work stoppage due to CONTRACTOR’s failure to comply. Work shall be ceased in an orderly, safe fashion with all vehicle access restored. Shoul d this not occur, CITY will correc t the deficiencies and deduct the cost from funds due to the CONTRACTOR. In addition, no progress payment shall be made until the copies of certified payroll reports and cancelled checks are submitted.

5.14.6 Contractor Registration . CONTRACTOR and its subcontractors must b e registered with the California Department of Industrial Relations pursuant to Labor Code Section 1725.5. This Agreement shall not be effective until CONTRACTOR provides proof ofregistration to the CITY.

5.14.7 Posting of Job Site Notices. CONTRACTOR shall compl y with the job site notices posting requirements established by the Labor Commissioner pursuant to Title 8, California Cod e of Regulations Section 16461(e ) or oth er regulation promulgated pursuant to Labor CodeSection 1771.4(a) (2). - 47 -

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SECTION 5 - AGREEMENT (Continued)

5.14.8 Notice of DIR Compliance Monitoring and Enforcement. Pursuant to Labor Code Section 1771.4, this Project is subject to compliance monitoring and enforcement by the CaliforniaDepartment of Industrial Relations.

5.15 Surety Bonds. CONTRACTOR shall, prio r to entering into performance of this Agreement, furnish a performance bond, on the CITY's bond form in th e amount of one hundred percent (100%) of the Contract price, to guarantee the faithful performance of the work, and a payment bond, on the CITY's form in the amount of o ne hundred percent (100%) of the Contract price, to guarantee payment of all claim s for labor and materials furnished. Bonds submitted on any form other than the CITY's f orm will be rejected. The required bonds shall be from a surety licensed to do business in the State of California and with a current A.M. Best's rating of A-, VII. This Contract sh all not become effective until such bonds are supplied and approved by the CITY."

5.16 Insurance.

5.16.1 COMMENCEMENT OF WORK. CONTRACTOR shall not commenc e work under this Agreement until all certificates and endorsemen ts have bee n received and approved by the CITY. All insurance required by this Agreement shall contain a statement of obligation on the part of the carr ier to notify the city of any material change, cancellation, or termination at least thirty (30) days in advance. A waiver of subrogation shall be provided by the insurer for each policy waiving subrogation against CITY, its officers, officials, emp loyees, agents, and volunteers for this contract and all public agencie s fro m whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY, Claims made and modified occurrence policies shall not be accepted for any policy, unless otherwise indicated. All Subcontractor s shall be required to provide and maintain the same insurances as required of CONTRACTOR under this contract. CONTRACTOR shall be required t o collect and maintain all required insurances from all Subcontractors.

5.16.2 CONTRACTOR is aware of the provisions of Section 3700 of the Labor Code, which requires ever
y employer to be insured against liability for Workers’ Compensation or undertake self-insurance in accordance with the provisions of that Code, and will compl y with such provisions before commenci ng the performance of the work of this Contract.

5.16.3 CONTRACTOR and all Subcontractors shall carry workers' compensation insurance for the protection of its employees during the progress of the work. The insurer shall waive its rights of subrogation against the CITY, its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY, and shall issue a waiver of subrogation.

5.16.4 Before CONTRACTOR performs any work at, or prepares or delivers materials to, the site of construction, CONTRACTOR shall furnish:

Additional Insured Endorsements, ongoing and products-completed operations, for the Commercial General Liability policy, including mobile equipment and not excluding XCU and on the Contractors’ Pollution Liability policy, if available. Endorsements shall designate CITY, its officer s, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and - 48 - Page 593 of 640

SECTION 5 - AGREEMENT (Continued)
employees, as determined by the CITY, as additional insureds for liability arising out of work or operations performed by or on behalf of the CONT RACTOR.

CONTRACTOR shall provide to CITY proof of insurance and endorsement forms that conform to CITY’s requirements, as approve d by the CITY (at least as broad as ISO Form CG 20 10, CG 11 8 5 or both CG 20 10, CG 20 26, CG 20 33, or CG 20 28; and CG 20 37 forms if later revisions used). Insurance companies must be acceptable to CITY and have a minimum A.M. Best Guide r ating of A-, class VII or better, as approved by CITY.

Contractor’s Pollution Legal Liability : Insurance companies must b e acceptable to City and have a Best’s Guide Rating of A- Class V II or better, as approved by Authority. If policy is written on a claims-made form:
1) The retroactive date must be shown , and must be before the date of the contract or the beginning of contract work.
2) Insurance must be maintained and evidence of insurance must be provided for at least three (3) years after completion of th e contract work.
3) If coverage is canceled or non-renewed, and not replaced with another claims-made policy with a retroactive date prior to the contract effective date, the CONTRACTOR must purchase an extended period coverage for a minimum of three (3) years after completion of the contract work. 4) A copy of the claims reporting requirements mus t be submitted t o the CITY for review.

Automobile Liability policy and shall designate CITY, its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY, as additional insureds fo r automobiles owned, leased, hired, or borrowed by the CONTRACTOR. CONTRACTO R shall provide to CITY proof of insurance and endorsement forms that c onform t o CITY’s requirements, as approved by the CITY. Insurance compani es must be acceptable to CITY and have a minimum A.M. Best Guide rating of A-, class VII or better, as approved by CITY).

A Loss Payee Endorsement for the Course of Construction policy designating the City of Garden Grove as Loss Payee. Insurance companies mus t be acceptable to CITY and have a minimum A.M. Best Guide rating of A-, class VII or better, as approved by CITY.

In the event any of CONTRACTOR’S underlying policies do not mee t policy limits as required here in, CONTRACTOR shall provide the schedu le of underlying polices for a follows form excess liability p o l i c y , s t a t e t h a t t he excess policy follows form on the insurance certificate, and a n additional insured endorsement for the excess liability policy designating CITY , its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY, as additional insureds. I nsurance companies must be acceptable to CITY and have a minimum A.M. Be st Guide rating of A-, class VII or better, as approved by CITY. - 49 -

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SECTION 5 - AGREEMENT (Continued)
For any claims related to this Project, the CONTRACTOR’s insurance coverage shall be primary insurance at least as broad as ISO CG 20 01 04 13 as respects CITY, its officers, officials, employees, agents, and volunteers for this contract and all publi c agencies from whom permits will be obtained and their directors, officers, agents, and employees, as determined by the CITY . Any insurance or self-insurance maintained by the CITY, its officers, officials, employees, agents, and volunteers for this contract and all public agencies from whom permits will be obtained and their directors, officers, agents, an d employees, as determined by the CITY, shall be excess of the CONTRACTOR’s insurance and not contribute with it.

5.16.5 Before CONTRACTOR performs any work at, o r prepares o r delivers materials to, the site of construction, CONTRACTOR shall furnish:

CONTRACTOR shall maintain all of the foregoing insurance cove rage in force until the work under this Contract is fully completed. The req uirement for carrying the foregoing insurance shall not derogate from the provisions for indemnification of CITY by CONTRACTOR under Section 5.17 of this Contract. Not withstanding nor diminishing the obligations of CONTRACTOR with respect to t he foregoing, CONTRACTOR shall subscribe for and maintain in full force and e ffect during the life of this Contract, the following insurance in amounts not less than the amounts specified and issued by a company admitted and licensed in California and having a Best's Guide Rating of A-Class VIIor better:

Workers’ Compensation As required by theState of
California.

Employer’s Liability Not less than $1,000,000 per
accident for bodily injury or disease.

Commercial General Liability Not less than $5,000,000 per (including on-going operations, products occurrence for bodily injury, - completed operations, and mobile personal injury and property equipment, and not excluding XCU) damage.

Contractor’s Pollution Legal Liability Not less than $1,000,000 per occurrence
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SECTION 5 - AGREEMENT (Continued)
Automobile Liability, for all automobiles Not less than $2,000,000 combined including non-owned and hired vehicles single limit for bodily injury and property damage.

Follows Form Excess Liability Required for any underlying policy that does not meet the underlying
policy limits required herein.

If contracto r maintains higher insurance limits than the minimums shown above, CONTRACTOR shall provide coverage for the higher limits otherwi se maintained by th e CONTRACTOR.

CITY or its representatives shall at all times have the right to inspect and receive a certified copy of all said policies of insurance, including certificates and endorsements at CONTRACTORS sole cost and expense. CONTRACTOR shall pay the pr emiums on the insurance hereinabove required.

5.17 Risk and Indemnification. All work covered by this Contract done at the site of construction or in preparing or delivering materialsto the site shall be at the risk of CONTRACTOR alone.

CONTRACTOR agrees to save, indemnify and keep the CITY, its Officers, Agents, Employees, Engineers, and Consultants for this Contract, and all public agencies from whom permits will be obtained and their directors, Officers, Agents and Employees harmles s against an y and all liability, claims , judgments, costs and demands, includin g demands arising fro m injuries or death of persons (CONTRACTOR'S employees included) an d damage to property, arising directly or indirectly out of the o bligations herein undertaken or out of the operations conducted b y CONTRACTOR, save and except claims or litigation arising through the sole negligence or sole willful misconduct of CITY and will make good to reimburse CITY for any expenditures, including reasonable attorneys' fees CITY may incur by reason of such matters, and if requested by CITY, will defend any such suits at the sole cost and expense of CONTRACTOR.

5.18 Termination.

5.18.1 This Contract may be terminated in whole or in part in writing by the CITY for its convenience, provided that the CONTRACTOR is given (1) not less than ten (10) calendar days written notice (delivered b y certified mail , return receipt requested) of intent to terminate, and (2) an opportunity for consultation with the terminating party prior to termination.

5.18.2 If termination for default or convenience is effected by the C ITY, an equitable adjustment in the price provided for in this Contract shall b e made, bu t (1) no amount shall be allowed for anticipated profi t on unperformed services or other work, and (2) any payment due to the CONTRACTOR at the time of termination may b e adjusted to cove r any additional costs to the CIT Y because of the CONTRACTOR'S default.

5.18.3 Upon receipt of a termination action under paragraph (5.18.1) or (5.18.2) above, the CONTRACTOR shall (1) promptly discontinue all affected work (unless the notice directs otherwise), and (2) deliver or otherwise make available to the CITY all data, drawings, specifications, reports, estimates, summari es and such other - 51 - Page 596 of 640

SECTION 5 - AGREEMENT (Continued)
information and materials as may have been accumulated by the CONTRACTOR in performing this Contract whether completed or in process.

5.18.4 Upon termination under paragraphs (5.18.1) and (5.18.2 ) above, the CITY may take over the work and may award another party an agreement to complete the work under this Contract.

5.19 Warranty. The CONTRACTOR agrees to perform all work under this Contract i n accordance with theCITY’s designs, drawings and specifications.

The CONTRACTOR guarantees for a period of one (1) yea r from the date of the notice of completion of th e work that the completed work is fre e from all defects du e to faulty materials, equipment or workmanship an d that he shall promptl y make whatever adjustments or corrections which may be necessary to cure any defects, including repairs or any damag e to other parts of the system resulting from such def ects. The CIT Y shall promptly give notice to the CONTRACTOR of observed defects. I n the event that the CONTRACTOR fails to make adjustments , repairs, corrections or o ther work made necessary by such defects, the CITY may do so and charge the CONTRACTOR the cost incurred. The performance bond shall remain in full force and effect through the guarantee period.

The CONTRACTOR'S obligations under this clause are in additionto the CONTRACTOR'S other express or implied assurances of this Contract or state law and in no way diminish any other rights that the CITY may have against the CONTRACTOR fo r faulty materials, equipment or work.

5.20 Attorneys' Fees. If any action at law or in equity is necessary to enforce or interpret the terms of this Contract, each shall bear its own attorneys' fees , costs and necessary disbursements. Notwithstanding the foregoing, if an y action is brought against the CONTRACTOR or any subcontractor to enforce a Stop Notice or Notice to Withhold, which named the CITY as a party to said action,the CITY shall be entitled to reasonable attorneys' fees, costs and necessary disbursements arising out of the defense of such action by the CITY. The CITY shall be entitled to deduct its costs for any Stop Notice filed, whether court action is involved or not.

5.21 Notices. Any notice required or permitted under this Contract ma y be given by ordinary mail at the address set forth below. Any party whose address changes shall notify the other party in writing.

TO CITY: TO CONTRACTOR:

City of Garden Grove. RJ Noble Company
Public Works Department Attention: Steven L. Mendoza
Attention: Nick Hsieh 15505 E. Lincoln Ave.
11222 Acacia Parkway Orange, CA 92865
Garden Grove, CA 92842 (714) 637-1550
(714) 741-5190 (714) 637-6321 Fax
(714) 741-5578 Fax
[SIGNATURES ON NEXT PAGE]
- 52 - Page 597 of 640

SECTION 5 - AGREEMENT (Continued)
IN WITNESS THEREOF, these parties have executed this Construction Agreement on the day and year shown below.

Date: "CITY"

CITY OF GARDEN GROVE
ATTEST:

B y:

Scott C. Stiles
City Manager
City Clerk
Date:
"CONTRACTOR"

RJ NOBLE COMPANY
CONTRACTOR'S State License No. 782908 Class A & C12
(Expiration Date: 08/31/2024
CONTRACTOR'S DIR No.1000004235
Attached Copy of your DIR Certificate.

By: Steven L. Mendoza_________________________
Title: Secretary
Date: 08/30/2022
APPROVED AS TO FORM:
______________________________ If CONTRACTOR is a corporation, a Corporate Garden Grove City Attorney Resolution and/or Corporate Seal is required.

Date___________________________
- 53 - Page 598 of 640

Agenda Item - 4.e.

City of Garden Grove

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

Subject:

City Manager
Adoption of a Resolution
approving a Purchase
Agreement and Escrow
Instructions with West St
Investment LLC for property
located at 13871 West
Street, and award a contract
to Borders Architect for
architectural services. (Cost:
$5,650,000) (Cost:
$
304,000) (A ctio n Item)
Dept.:

Date:

Community and Economic
Development Department
9/13/2022

OBJECTIV E
For the City Council to adopt a Resolution to authorize approval and execution of Purchase Agreement and Escrow Instructions with West St Investment LLC for property located at 13871 West Street; and, approve an exemption to the bidding process, and authorize the City Manager to execute an agreement with Borders Architects for architectural services related to advancing a future navigation center.

BACKGROUN D
Resources have been implemented since adoption of the City’s 2021 Comprehensive Strategic Plan to Address Homelessness (CSPAH) , which serves as a five-year roadmap to identify pathways to connect homeless individual s to resources and programs. A few notable action items are summarized below:
1 Website
Development a comprehensive website portal.
https://ggcity.org/endhomelessnes s
2 Data
Dashboard
Activated a Homeless Data Dashboard conveys the number
of homeless and at-risk individual s assisted on a quarterly basis, as well as the funds expended to administer the six (6) eligibl e activities (Street Outreach, Emergency Shelter, Rapid Rehousing, Homelessness Prevention, and Workforce Development).
h
ttps://ggcity.org/endhomelessness/dashboard

Page 599 of 640 ends

3 Outreach
Provide Street Outreach services in coordinatio n with the Garden Grove Police Department - Special Resource Team
(SRT) and a local non-profi t to support individual s who are homeless.
https://ggcity.org/endhomelessness/street-outreac h
4 Be Well OC
Deployment of an 18-month Mobil e Response Team
program address certain mental health calls for service. https://ggcity.org/be-well-oc-garden-grov e
5 Webinar(s)
Collaborated with United Way through their United to End Homelessness Initiative to facilitate informational webinars about Homelessness 101 and Navigation Center 101.
https://ggcity.org/endhomelessnes s
6 Tri-cities
MOU
Approval of the Memorandum of Understanding (MOU ) with the cities of Fountain Valley and Westminster to jointly collaborate, develop and contribute funding for a future navigation center.
https://ggcity.org/navigation-cente r
7 Navigation
C
enter
Webpage
Added a new future Navigation Center resource webpage
along with an FAQ summary.
https://ggcity.org/navigation-center.
8 Community
E
ngagement
Hosted two (2) community meetings on August 17, and 30, 2022 to share information about the future navigation
center.
https://ggcity.org/navigation-cente r
9 Funding
Secured initial funding commitment from the County of
Orange in the amount of $11.3M (A ttachmen t No. 1)
In furthering implementation of the CSAPH , staff has been actively identifying possibl e sites within the City’s homeless shelter overlay zone for development of a navigation center.

DISCUSSIO N
In recent months, efforts to identify a suitable property for a future navigation center has been significantl y challenged due to limited real estate inventory. After extensive brokerage engagement, an off-market property located at 13871 West Street and

Page 600 of 640 ends

within the City’s homeless shelter overlay zone was identified. The property sits on a

0.41 acre or approximately 18,166 square foot lot. It is developed with two adjoining industrial structures totaling 11,363 square feet. The primary buildin g is 9,653 square feet and recently rehabilitated. An adjacent smaller buildin g is 1,774 square feet. Per the Assessor’s mapping, the Assessor Parcel Number is 100-591-08.

Staff received Council direction to proceed with negotiations towards property acquisitio n of 13871 West Street at the August 9, 2022 meeting. To that end, property acquisitio n negotiations initiated with Ashwil l Associates, on behalf of the property owner (West St Investments LLC). The terms of the Purchase Agreement and Escrow Instructions (A ttachmen t No. 2) outlines the negotiated purchase price of $5,600,000. This purchase price has been confirmed by a Fair Market Value appraisal prepared by Vanguard Realty Advisors. The escrow period is anticipated to be approximately six (6) months upon execution date of the Purchase Agreement and Escrow Instructions. Staff will be working through a number of due diligenc e items including : further site assessment, final schematic design, project scope development, architectural plans, along with finalizin g funding commitments with the cities of Fountain Valley and Westminster.

Provided is a general overview of additional action items to be completed:

Project Scope: Further refinement of the Project Scope for the Central Cities Navigation Center will be undertaken in the next 60 days. A preliminary schematic plan has been developed. (A ttachmen t No. 3) In concept, the proposed navigation center is anticipated to support 80-100 individual s experiencing homelessness within the participating Central SPA cities. The navigation center will be a referral-only based facility with managed and controlled (transportation) access in and out.

Service Provider: A formal Request for Proposals (RFP) will be released in mid- S
eptember 2022 for solicitatio n of a service provider for the Central Cities Navigation Center operations. Selection of a preferred service provider for the Navigation Center prior to construction is recommended.

Professional Architectural and Engineering Plans: Given priority of advancing the navigation center is in the best interest of public, health and safety, initiating work associated with design development plans and construction documents is critical to project delivery. Borders Architect brings extensive experience in providing architectural services for municipalities , and has successfull y completed several navigation center projects includin g delivery of design development and construction documents for cities of Costa Mesa (Costa Mesa Bridge Shelter/70-bed site), Fullerton (Fullerto n Navigation Center/90-bed site) and Santa Ana (Carnegie Navigation Center/200-bed site). It is recommended that City Council find that it is in the best interest of the City to waive the bidding requirements per GGM C 2.50.060.G and approve an award of contract to Borders Architects in the amount of $304,000 to complete the design development plans and construction documents for Central Cities Navigation Center. (A ttachmen t No. 4)
Project Funding: Concurrently with funding commitment by the County of Orange, staff is finalizin g terms to the Tri-Cities MOU Memorandum of Understanding (MOU ) with the cities of Fountain Valley and Westminster for operation and funding of the Central Cities Navigation Center.

Page 601 of 640 ends

In closing, it is recommended that the City Council approve the Purchase Agreement and Escrow Instructions with West St Investment LLC for acquisitio n of 13871 West Street by the City in the amount of $5,600,000, and further direct staff to advance implementation of the Central Cities Navigation Center project.

FINANCIA L IMPAC T
Funds have been budgeted in the Biennial Budget for FY 2021-2022 and FY 2022- 2023 for the Navigation Center project.

RECOMMENDATIO N
It is recommended that the City Council :

Adopt a Resolution to authorize approval and execution of the Purchase Agreement and Escrow Instructions with West St Investment LLC for acquisitio n of 13871 West Street by the City in the amount of $5,600,000, and an amount of $50,000 for escrow, title and broker related costs; (A ttachmen t No. 5) Authorize the City Manager to execute a Professional Services Agreement with Borders Architect in the amount of $304,000, and make minor modification s thereto as needed; and,
Direct staff to accelerate advancement of the Central Cities Navigation Center, as appropriate.

ATTACHMENTS:

Description Upload Date Type File Name
County Commitment
L
etter 9/8/2022 Letter 9-13-22_-_Letter_from_the_County.pd f Purchase and Sales
Agreement 9/6/2022 Agreement Attachment_No._2_-
_Purchase_and_Sale_Agreement.pdf
Schematic Plan 9/6/2022 Exhibit Attachment_No._3_-_Schematic_Plan.pdf Professional Services
Agreement- Borders
Architect
9/6/2022 Agreement Borders_Architects_Agreement._CC_9.13.22.pd f Resolution 9/6/2022 Resolution Attachment_No._5_-
_CC_RESOLUTION_(11871_WEST_STREET).pd f

Page 602 of 640 ends

County of Orange
County Executive Office
September 6, 2022
Scott Stiles
City Manager, City of Garden Grove
11222 Acacia Parkway
Garden Grove, CA 92840
RE: Homeless Navigation Center
Dear Mr. Stiles:

This letter is to affirm my commitment to bring before my Board of Supervisors (Board), a recommendation to contribute a one-time allocation of $5.3 million with an annual contribution of $625,000, for ten years, to support a regional navigation center located in the City of Garden Grove.

Per our discussion, the navigation center , with capacity to serve up to 100 individuals, will be used to support the needs of Garden Grove, Fountain Valley and Westminster, with an agreement in place for the cities to jointly fund the remaining acquisition, tenant improvements and the operating costs. We have also discussed the requirement for the navigation center to operate in compliance with the County’s Standards of Care.

Once the City has a plan for site co ntrol, please contact me to discuss next steps, which will involve the negotiation of a Memorandum of Understanding (MOU) with the County. I want to ensure that I don’t get ahead of you or the other cities as you discuss the matter with your councils. Th e MOU will require approval by each city then the Board of Supervisors.

Throughout this process, Doug Becht, Director of Care Coordination, and I are available to support you.

We look forward to this collaboration. Please do not hesitate to contact me or D oug with any questions or concerns.

Sincerely,
Frank Kim
County Executive Officer
cc: Doug Becht, Director of Care Coordination
Lilly Simmering, Deputy County Executive Officer
400 West Civic Center Drive, 5th Floor, Santa Ana, CA 92701 •County Administration North •Phone (714) 834-2345 •www.ocgov.com

Page 603 of 640 ends

________ ________
________ ________

STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS

FOR PURCHASE OF REAL ESTATE
(Non-ResidenƟal)
Dated: August 15, 2022

1. Buyer.

1.1 City of Garden Grove, and/or assignee , ("Buyer") hereby oﬀersto purchase the real property, hereinaŌer described, from the owner thereof ("Seller") (collecƟvely,the "ParƟes" or individually, a "Party"), through an escrow ("Escrow") to close 30 or See Paragraph

26.2 days aŌer the waiver or saƟsfacƟonof the Buyer's ConƟngencies, ("Expected Closing Date") to be held by First American Title - Michael Williams ("Escrow Holder") whose address is 18500 Von Karman Ave., Suite 600, Irvine, CA 92612 , Phone No. (949) 885-2400 , Facsimile No. (877) 478-3007 upon the terms and condiƟons set forth in this agreement ("Agreement").

Buyer shall have the right to assign Buyer's rights hereunder, but any such assignment shall not relieve Buyer of Buyer's obligaƟons herein unless Seller expressly releases Buyer.

1.2 The term "Date of Agreement" as used herein shall be the date when by execuƟon and delivery (as deﬁnedin paragraph 20.2) of this document or a subsequent counteroﬀer thereto, Buyer and Seller have reached agreement in wriƟng whereby Seller agrees to sell, and Buyer agrees to purchase, the Property upon terms accepted by both ParƟes.

2. Property.

2.1 The real property ("Property") that is the subject of this oﬀerconsists of (insert a brief physical descripƟon) An approximate 11,376 sf
industrial building on an approximate 0.43 acre lot is located in the County of Orange , is commonly known as (street address, city, state, zip) 13871 West St. Garden Grove, CA 92843 and is legally described as: to be confirmed by Title (APN: 100-591-08; to be confirmed by Title ).

2.2 If the legal descripƟonof the Property is not complete or is inaccurate, this Agreement shall not be invalid and the legal descripƟonshall be completed or corrected to meet the requirements of First American Title ("Title Company"), which shall issue the Ɵtle policy hereinaŌer described.

2.3 The Property includes, at no addiƟonalcost to Buyer, the permanent improvements thereon, including those items which pursuant to applicable law are a part of the property, as well as the following items, if any, owned by Seller and at present located on the Property: electrical distribuƟon systems (power panel, bus ducƟng,conduits, disconnects, lighƟng ﬁxtures);telephone distribuƟon systems (lines, jacks and connecƟonsonly); space heaters; heaƟng, venƟlaƟng,air condiƟoningequipment ("HVAC"); air lines; ﬁresprinkler systems; security and ﬁre detecƟonsystems; carpets; window coverings; wall coverings; and (collecƟvely,the "Improvements").

2.4 The ﬁresprinkler monitor: is owned by Seller and included in the Purchase Price, is leased by Seller, and Buyer will need to negoƟatea new lease with the ﬁremonitoring company, ownership will be determined during Escrow, or there is no ﬁre sprinkler monitor.

2.5 Except as provided in Paragraph 2.3, the Purchase Price does not include Seller's personal property, furniture and furnishings, and all of which shall be removed by Seller prior to Closing.

3. Purchase Price.

3.1 The purchase price ("Purchase Price") to be paid by Buyer to Seller for the Property shall be $5,600,000.00 , subject to completion of a Fair Market Appraisal (see paragraph 26.5), payable as follows:
(Strike any not applicable)
(a) Cash down payment, including the Deposit as deﬁned in paragraph 4.3 (or if an all cash transacƟon,the Purchase Price):
$5,600,000.00
(b) Amount of "New Loan" as deﬁnedin paragraph 5.1, if any:
(c) Buyer shall take Ɵtle to the Property subject to and/or assume the following exisƟng deed(s) of trust ("ExisƟngDeed(s) of Trust") securing the exisƟng promissory note(s) ("ExisƟng Note(s)"):
(i) An ExisƟng Note ("First Note") with an unpaid principal balance as of the Closing of approximately:

Said First Note is payable at per month, including interest at the rate of % per annum unƟlpaid (and/or the enƟreunpaid balance is due on ).
(ii) An ExisƟngNote ("Second Note") with an unpaid principal balance as of the Closing of approximately:

Said Second Note is payable at per month, including interest at the rate of % per annum unƟlpaid (and/or the enƟreunpaid balance is due on ).
(d) Buyer shall give Seller a deed of trust ("Purchase Money Deed of Trust") on the property, to secure the promissory note of Buyer to Seller described in paragraph 6 ("Purchase Money Note") in the amount of:

Total Purchase Price: $5,600,000.00

3.2 If Buyer is taking Ɵtleto the Property subject to, or assuming, an ExisƟngDeed of Trust and such deed of trust permits the beneﬁciary to demand payment of fees including, but not limited to, points, processing fees, and appraisal fees as a condiƟon to the transfer of the Property, Buyer agrees to pay such fees up to a maximum of 1.5% of the unpaid principal balance of the applicable ExisƟngNote.

4. Deposits.

4.1 Buyer has delivered to Broker a check in the sum of $15,000.00 , payable to Escrow Holder, to be delivered by Broker to Escrow Holder within 2 or business days aŌer both ParƟes have executed this Agreement and the executed Agreement has been delivered to Escrow Holder, or within 2 or business days aŌer both ParƟes have executed this Agreement and the executed Agreement has been delivered to Escrow Holder Buyer shall deliver to Escrow Holder a check in the sum of . If said check is not received by Escrow Holder within said Ɵmeperiod then Seller may elect to unilaterally terminate this transacƟon by giving wriƩen noƟceof such elecƟon to Escrow Holder whereupon neither Party shall have any further liability to the other under this Agreement. Should Buyer and Seller not enter into an agreement for purchase and sale, Buyer's check or funds shall, upon request by Buyer, be promptly returned to Buyer.

4.2 AddiƟonal deposits:
(a) Within 5 business days aŌerthe Date of Agreement, Buyer shall deposit with Escrow Holder the addiƟonalsum of to be applied to the Purchase Price at the Closing.
(b) Within 5 business days aŌer the conƟngencies discussed in paragraph 9.1 (a) through (m) are approved or waived, Buyer shall deposit with Escrow Holder the addiƟonalsum of $185,000.00 to be applied to the Purchase Price at the Closing. (c) If an AddiƟonalDeposit is not received by Escrow Holder within the Ɵmeperiod provided then Seller may noƟfyBuyer, Escrow Holder, and Brokers, in wriƟngthat, unless the AddiƟonalDeposit is received by Escrow Holder within 2 business days following said noƟce,the Escrow shall be deemed terminated without further noƟce or instrucƟons.

4.3 Escrow Holder shall deposit the funds deposited with it by Buyer pursuant to paragraphs 4.1 and 4.2 (collecƟvely the "Deposit"), in a State or Federally chartered bank in an interest bearing account whose term is appropriate and consistent with the Ɵming requirements of this transacƟon. The interest therefrom shall accrue to the beneﬁt of Buyer, who hereby acknowledges that there may be penalƟes or interest forfeitures if the applicable instrument is redeemed prior to its speciﬁedmaturity. Buyer's Federal Tax IdenƟﬁcaƟon Number is . NOTE: Such interest bearing account cannot be opened unƟlBuyer's Federal Tax IdenƟﬁcaƟonNumber is provided.

4.4 Notwithstanding the foregoing, within 5 days aŌerEscrow Holder receives the monies described in paragraph 4.1 above, Escrow Holder shall release $100 of said monies to Seller as and for independent consideraƟonfor Seller's' execuƟonof this Agreement and the granƟng of the conƟngencyperiod to Buyer as herein provided. Such independent consideraƟonis non-refundable to Buyer but shall be credited to the Purchase Price in the event that the purchase of the Property is completed.

4.5 Upon waiver of all of Buyer's conƟngenciesthe Deposit shall become non-refundable but applicable to the Purchase Price except in the event of a Seller breach, or in the event that the Escrow is terminated pursuant to the provisions of Paragraph 9.1(n) (DestrucƟon,Damage or Loss) or 9.1(o) (Material Change).

5. Financing ConƟngency. (Strike if not applicable)

5.1 This oﬀeris conƟngentupon Buyer obtaining from an insurance company, ﬁnancial insƟtuƟon or other lender, a commitment to lend to Buyer a sum equal to at least % of the Purchase Price, on terms acceptable to Buyer. Such loan ("New Loan") shall be secured by a ﬁrstdeed of trust or mortgage on the Property. If this Agreement provides for Seller to carry back junior ﬁnancing,then Seller shall have the right to approve the terms of the New Loan. Seller shall have 7 days following receipt of the commitment seƫng forth the proposed terms of the New Loan to approve or disapprove of such proposed terms. If Seller fails to noƟfy Escrow Holder, in wriƟng, of the disapproval within said 7 days it shall be conclusively presumed that Seller has approved the terms of the New Loan.

5.2 If Buyer shall fail to noƟfy its Broker, Escrow Holder and Seller, in wriƟngwithin days following the Date of Agreement, that the New Loan has not been obtained, it shall be conclusively presumed that Buyer has either obtained said New Loan or has waived this New Loan conƟngency.

5.3 If Buyer shall noƟfyits Broker, Escrow Holder and Seller, in wriƟng,within the Ɵme speciﬁedin paragraph 5.2 hereof, that Buyer has not obtained said New Loan, this Agreement shall be terminated, and Buyer shall be enƟtled to the prompt return of the Deposit, plus any interest earned thereon, less only Escrow Holder and Title Company cancellaƟon fees and costs, which Buyer shall pay.

6. Seller Financing. (Purchase Money Note). (Strike if not applicable)

6.1 If Seller approves Buyer's ﬁnancials(see paragraph 6.5) the Purchase Money Note shall provide for interest on unpaid principal at the rate of % per annum, with principal and interest paid as follows: . The Purchase Money Note and Purchase Money Deed of Trust shall be on the current forms commonly used by Escrow Holder, and be junior and subordinate only to the ExisƟng Note(s) and/or the New Loan expressly called for by this Agreement.

6.2 The Purchase Money Note and/or the Purchase Money Deed of Trust shall contain provisions regarding the following (see also paragraph 10.3 (b)):
(a) Prepayment. Principal may be prepaid in whole or in part at any Ɵmewithout penalty, at the opƟonof the Buyer. (b) Late Charge. A late charge of 6% shall be payable with respect to any payment of principal, interest, or other charges, not made within 10 days aŌer it is due.
(c) Due On Sale. In the event the Buyer sells or transfers Ɵtleto the Property or any porƟon thereof, then the Seller may, at Seller's opƟon,require the enƟreunpaid balance of said Note to be paid in full.

6.3 If the Purchase Money Deed of Trust is to be subordinate to other ﬁnancing,Escrow Holder shall, at Buyer's expense prepare and record on Seller's behalf a request for noƟceof default and/or sale with regard to each mortgage or deed of trust to which it will be subordinate.

6.4 WARNING: CALIFORNIA LAW DOES NOT ALLOW DEFICIENCY JUDGEMENTS ON SELLER FINANCING. IF BUYER ULTIMATELY DEFAULTS ON THE LOAN, SELLER'S SOLE REMEDY IS TO FORECLOSE ON THE PROPERTY.

6.5 Seller's obligaƟonto provide ﬁnancingis conƟngentupon Seller's reasonable approval of Buyer's ﬁnancial condiƟon. Buyer to provide a current ﬁnancial statement and copies of its Federal tax returns for the last 3 years to Seller within 10 days following the Date of Agreement. Seller has 10 days following receipt of such documentaƟon to saƟsfy itself with regard to Buyer's ﬁnancial condiƟon and to noƟfy Escrow Holder as to whether or not Buyer's ﬁnancial condiƟon is acceptable. If Seller fails to noƟfy Escrow Holder, in wriƟng, of the disapproval of this conƟngency within said Ɵmeperiod, it shall be conclusively presumed that Seller has approved Buyer's ﬁnancial condiƟon. If Seller is not saƟsﬁed with Buyer's ﬁnancial condiƟon or if Buyer fails to deliver the required documentaƟon then Seller may noƟfy Escrow Holder in wriƟngthat Seller Financing will not be available, and Buyer shall have the opƟon, within 10 days of the receipt of such noƟce, to either terminate this transacƟonor to purchase the Property without Seller ﬁnancing. If Buyer fails to noƟfyEscrow Holder within said Ɵmeperiod of its elecƟon to terminate this transacƟonthen Buyer shall be conclusively presumed to have elected to purchase the Property without Seller ﬁnancing. If Buyer elects to terminate, Buyer's Deposit shall be refunded less Title Company and Escrow Holder cancellaƟonfees and costs, all of which shall be Buyer's obligaƟon.

7. Real Estate Brokers.

7.1 Each Party acknowledges receiving a Disclosure Regarding Real Estate Agency RelaƟonship, conﬁrms and consents to the following agency relaƟonshipsin this transacƟon with the following real estate broker(s) ("Brokers") and/or their agents (“Agent(s)”):

Seller's Brokerage Firm
Ashwill Associates Commercial Real Estate License No. 01291393 is the broker of (check one): the Seller; or both the Buyer and Seller (dual agent).

Seller's Agent Kyle Williams License No. 02015940 is (check one): the Seller's Agent (salesperson or broker associate); or both the Seller's Agent and the Buyer's Agent (dual agent).

Buyer's Brokerage Firm Ashwill Associates Commercial Real Estate License No. 01291393 is the broker of (check one): the Buyer; or both the Buyer and Seller (dual agent).

Buyer's Agent Kyle Williams License No. 02015940 is (check one): the Buyer's Agent (salesperson or broker associate); or both the Buyer's Agent and the Seller's Agent (dual agent).

The ParƟes acknowledge that other than the Brokers and Agents listed above, there are no other brokers or agents represenƟngthe ParƟesor due any fees and/or commissions under this Agreement. Buyer shall use the services of Buyer's Broker exclusively in connecƟon with any and all negoƟaƟons and oﬀerswith respect to the Property for a period of 1 year from the date inserted for reference purposes at the top of page 1.

7.2 Buyer and Seller each represent and warrant to the other that he/she/it has had no dealings with any person, ﬁrm, broker, agent or ﬁnderin connecƟon with the negoƟaƟonof this Agreement and/or the consummaƟon of the purchase and sale contemplated herein, other than the Brokers and Agents named in paragraph 7.1, and no broker, agent or other person, ﬁrmor enƟty,other than said Brokers and Agents is/are enƟtledto any commission or ﬁnder'sfee in connecƟon with this transacƟonas the result of any dealings or acts of such Party. Buyer and Seller do each hereby agree to indemnify, defend, protect and hold the other harmless from and against any costs, expenses or liability for compensaƟon, commission or charges which may be claimed by any broker, agent, ﬁnderor other similar party, other than said named Brokers and Agents by reason of any dealings or act of the indemnifying Party.

8. Escrow and Closing.

8.1 Upon acceptance hereof by Seller, this Agreement, including any counteroﬀers incorporated herein by the ParƟes, shall consƟtutenot only the agreement of purchase and sale between Buyer and Seller, but also instrucƟons to Escrow Holder for the consummaƟonof the Agreement through the Escrow. Escrow Holder shall not prepare any further escrow instrucƟons restaƟngor amending the Agreement unless speciﬁcally so instructed by the ParƟes or a Broker herein. Subject to the reasonable approval of the ParƟes,Escrow Holder may, however, include its standard general escrow provisions. In the event that there is any conﬂictbetween the provisions of the Agreement and the provisions of any addiƟonal escrow instrucƟonsthe provisions of the Agreement shall prevail as to the ParƟes and the Escrow Holder.

8.2 As soon as pracƟcal aŌer the receipt of this Agreement and any relevant counteroﬀers,Escrow Holder shall ascertain the Date of Agreement as deﬁnedin paragraphs 1.2 and 20.2 and advise the ParƟesand Brokers, in wriƟng,of the date ascertained.

8.3 Escrow Holder is hereby authorized and instructed to conduct the Escrow in accordance with this Agreement, applicable law and custom and pracƟce of the community in which Escrow Holder is located, including any reporƟng requirements of the Internal Revenue Code. In the event of a conﬂict between the law of the state where the Property is located and the law of the state where the Escrow Holder is located, the law of the state where the Property is located shall prevail.

8.4 Subject to saƟsfacƟon of the conƟngenciesherein described, Escrow Holder shall close this escrow (the "Closing") by recording a general warranty deed (a grant deed in California) and the other documents required to be recorded, and by disbursing the funds and documents in accordance with this Agreement.

8.5 Buyer and Seller shall each pay one-half of the Escrow Holder's charges and Seller shall pay the usual recording fees and any required documentary transfer taxes. Seller shall pay the premium for a standard coverage owner's or joint protecƟonpolicy of Ɵtle insurance. (See also paragraph 11.)

8.6 Escrow Holder shall verify that all of Buyer's conƟngencieshave been saƟsﬁedor waived prior to Closing. The maƩers contained in paragraphs 9.1 subparagraphs (b), (c), (d), (e), (g), (i), (n), and (o), 9.4, 12, 13, 14, 16, 18, 20, 21, 22, and 24 are, however, maƩers of agreement between the ParƟesonly and are not instrucƟonsto Escrow Holder.

8.7 If this transacƟon is terminated for non-saƟsfacƟonand non-waiver of a Buyer's ConƟngency, as deﬁned in paragraph 9.2 or disapproval of any other maƩersubject to Buyer's approval, then neither of the ParƟesshall thereaŌerhave any liability to the other under this Agreement, except to the extent of a breach of any aﬃrmaƟve covenant or warranty in this Agreement. In the event of such terminaƟon,Buyer shall, subject to the provisions of paragraph 8.10, be promptly refunded all funds deposited by Buyer with Escrow Holder, less only the $100 provided for in paragraph 4.4 and the Title Company and Escrow Holder cancellaƟon fees and costs, all of which shall be Buyer's obligaƟon. If this transacƟon is terminated as a result of Seller's breach of this Agreement then Seller shall pay the Title Company and Escrow Holder cancellaƟonfees and costs.

8.8 The Closing shall occur on the Expected Closing Date, or as soon thereaŌer as the Escrow is in condiƟonfor Closing; provided, however, that if the Closing does not occur by the Expected Closing Date and said Date is not extended by mutual instrucƟonsof the ParƟes,a Party not then in default under this Agreement may noƟfythe other Party, Escrow Holder, and Brokers, in wriƟngthat, unless the Closing occurs within 5 business days following said noƟce,the Escrow shall be deemed terminated without further noƟce or instrucƟons.

8.9 Except as otherwise provided herein, the terminaƟonof Escrow shall not relieve or release either Party from any obligaƟonto pay Escrow Holder's fees and costs or consƟtutea waiver, release or discharge of any breach or default that has occurred in the performance of the obligaƟons,agreements, covenants or warranƟescontained therein.

8.10 If this Escrow is terminated for any reason other than Seller's breach or default, then as a condiƟonto the return of Buyer's deposit, Buyer shall within 5 days aŌer wriƩenrequest deliver to Seller, at no charge, copies of all surveys, engineering studies, soil reports, maps, master plans, feasibility studies and other similar items prepared by or for Buyer that pertain to the Property.

9. ConƟngenciesto Closing.

9.1 The Closing of this transacƟon is conƟngentupon the saƟsfacƟon or waiver of the following conƟngencies. IF BUYER FAILS TO NOTIFY ESCROW HOLDER,

IN WRITING, OF THE DISAPPROVAL OF ANY OF SAID CONTINGENCIES WITHIN THE TIME SPECIFIED THEREIN, IT SHALL BE CONCLUSIVELY PRESUMED THAT BUYER HAS APPROVED SUCH ITEM, MATTER OR DOCUMENT. Buyer's condiƟonalapproval shall consƟtutedisapproval, unless provision is made by the Seller within the Ɵme speciﬁed therefore by the Buyer in such condiƟonal approval or by this Agreement, whichever is later, for the saƟsfacƟonof the condiƟonimposed by the Buyer.

Escrow Holder shall promptly provide all ParƟes with copies of any wriƩendisapproval or condiƟonal approval which it receives. With regard to subparagraphs (a) through (m) the pre-printed Ɵmeperiods shall control unless a diﬀerent number of days is inserted in the spaces provided. (a) Disclosure. Seller shall make to Buyer, through Escrow, all of the applicable disclosures required by law (See AIR CRE ("AIR") standard form enƟtled "Seller's Mandatory Disclosure Statement") and provide Buyer with a completed Property InformaƟonSheet ("Property InformaƟonSheet") concerning the Property, duly executed by or on behalf of Seller in the current form or equivalent to that published by the AIR within 10 or 60 days following the Date of Agreement of this PSA. Buyer has 10 days from the receipt of said disclosures to approve or disapprove the maƩersdisclosed. (b) Physical InspecƟon. Buyer has 10 or 60 days following the receipt of the Property InformaƟon Sheet or the Date of Agreement of this PSA, whichever is later, to saƟsfy itself with regard to the physical aspects and size of the Property. (c) Hazardous Substance CondiƟonsReport. Buyer has 30 or 60 days following the receipt of the Property InformaƟon Sheet or the Date of Agreement of this PSA, whichever is later, to saƟsfy itself with regard to the environmental aspects of the Property. Seller recommends that Buyer obtain a Hazardous Substance CondiƟonsReport concerning the Property and relevant adjoining properƟes. Any such report shall be paid for by Buyer. A "Hazardous Substance" for purposes of this Agreement is deﬁnedas any substance whose nature and/or quanƟtyof existence, use, manufacture, disposal or eﬀect,render it subject to Federal, state or local regulaƟon, invesƟgaƟon, remediaƟon or removal as potenƟally injurious to public health or welfare. A "Hazardous Substance CondiƟon" for purposes of this Agreement is deﬁnedas the existence on, under or relevantly adjacent to the Property of a Hazardous Substance that would require remediaƟonand/or removal under applicable Federal, state or local law. (d) Soil InspecƟon. Buyer has 30 or 60 days following the receipt of the Property InformaƟon Sheet or the Date of Agreement of this PSA, whichever is later, to saƟsfyitself with regard to the condiƟon of the soils on the Property. Seller recommends that Buyer obtain a soil test report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any soils report that Seller may have within 10 days following the Date of Agreement. (e) Governmental Approvals. Buyer has 30 or 60 days following the Date of Agreement of this PSA to saƟsfyitself with regard to approvals and permits from governmental agencies or departments which have or may have jurisdicƟonover the Property and which Buyer deems necessary or desirable in connecƟonwith its intended use of the Property, including, but not limited to, permits and approvals required with respect to zoning, planning, building and safety, ﬁre,police, handicapped and Americans with DisabiliƟes Act requirements, transportaƟonand environmental maƩers. (f) CondiƟons of Title. Escrow Holder shall cause a current commitment for Ɵtleinsurance ("Title Commitment") concerning the Property issued by the Title Company, as well as legible copies of all documents referred to in the Title Commitment ("Underlying Documents"), and a scaled and dimensioned plot showing the locaƟon of any easements to be delivered to Buyer within 10 or days following the Date of Agreement of this PSA. Buyer has 10 days from the receipt of the Title Commitment, the Underlying Documents and the plot plan to saƟsfy itself with regard to the condiƟonof Ɵtle. The disapproval by Buyer of any monetary encumbrance, which by the terms of this Agreement is not to remain against the Property aŌer the Closing, shall not be considered a failure of this conƟngency,as Seller shall have the obligaƟon, at Seller's expense, to saƟsfyand remove such disapproved monetary encumbrance at or before the Closing. (g) Survey. Buyer has 30 or 30 days following the receipt of the Title Commitment and Underlying Documents to saƟsfy itself with regard to any ALTA Ɵtlesupplement based upon a survey prepared to American Land Title AssociaƟon ("ALTA") standards for an owner's policy by a licensed surveyor, showing the legal descripƟonand boundary lines of the Property, any easements of record, and any improvements, poles, structures and things located within 10 feet of either side of the Property boundary lines. Any such survey shall be prepared at Buyer's direcƟon and expense. If Buyer has obtained a survey and approved the ALTA Ɵtle supplement, Buyer may elect within the period allowed for Buyer's approval of a survey to have an ALTA extended coverage owner's form of Ɵtle policy, in which event Buyer shall pay any addiƟonalpremium aƩributable thereto. (h) ExisƟngLeases and Tenancy Statements. Seller shall within 10 or days following the Date of Agreement provide both Buyer and Escrow Holder with legible copies of all leases, subleases or rental arrangements (collecƟvely,"ExisƟng Leases") aﬀecƟngthe Property, and with a tenancy statement ("Estoppel CerƟﬁcate") in the latest form or equivalent to that published by the AIR, executed by Seller and/or each tenant and subtenant of the Property. Seller shall use its best eﬀorts to have each tenant complete and execute an Estoppel CerƟﬁcate. If any tenant fails or refuses to provide an Estoppel CerƟﬁcate then Seller shall complete and execute an Estoppel CerƟﬁcatefor that tenancy. Buyer has 10 days from the receipt of said ExisƟngLeases and Estoppel CerƟﬁcates to saƟsfy itself with regard to the ExisƟng Leases and any other tenancy issues. (i) Owner's AssociaƟon. Seller shall within 10 or days following the Date of Agreement provide Buyer with a statement and transfer package from any owner's associaƟonservicing the Property. Such transfer package shall at a minimum include: copies of the associaƟon's bylaws, arƟclesof incorporaƟon,current budget and ﬁnancialstatement. Buyer has 10 days from the receipt of such documents to saƟsfy itself with regard to the associaƟon. (j) Other Agreements. Seller shall within 10 or days following the Date of Agreement of this PSA provide Buyer with legible copies of all other agreements ("Other Agreements") known to Seller that will aﬀectthe Property aŌerClosing. Buyer has 10 days from the receipt of said Other Agreements to saƟsfyitself with regard to such Agreements.
(k) Financing. If paragraph 5 hereof dealing with a ﬁnancing conƟngencyhas not been stricken, the saƟsfacƟon or waiver of such New Loan conƟngency. (l) ExisƟngNotes. If paragraph 3.1(c) has not been stricken, Seller shall within 10 or days following the Date of Agreement provide Buyer with legible copies of the ExisƟngNotes, ExisƟngDeeds of Trust and related agreements (collecƟvely, "Loan Documents") to which the Property will remain subject aŌerthe Closing. Escrow Holder shall promptly request from the holders of the ExisƟngNotes a beneﬁciarystatement ("BeneﬁciaryStatement") conﬁrming: (1) the amount of the unpaid principal balance, the current interest rate, and the date to which interest is paid, and (2) the nature and amount of any impounds held by the beneﬁciaryin connecƟonwith such loan. Buyer has 10 or days following the receipt of the Loan Documents and BeneﬁciaryStatements to saƟsfy itself with regard to such ﬁnancing. Buyer's obligaƟonto close is condiƟonedupon Buyer being able to purchase the Property without acceleraƟonor change in the terms of any ExisƟngNotes or charges to Buyer except as otherwise provided in this Agreement or approved by Buyer, provided, however, Buyer shall pay the transfer fee referred to in paragraph 3.2 hereof. Likewise if Seller is to carry back a Purchase Money Note then Seller shall within 10 or days following the Date of Agreement provide Buyer with a copy of the proposed Purchase Money Note and Purchase Money Deed of Trust. Buyer has 10 or days following the receipt of such documents to saƟsfyitself with regard to the form and content thereof. (m) Personal Property. In the event that any personal property is included in the Purchase Price, Buyer has 10 or days following the Date of Agreement of this PSA to saƟsfyitself with regard to the Ɵtle condiƟonof such personal property. Seller recommends that Buyer obtain a UCC-1 report. Any such report shall be paid for by Buyer. Seller shall provide Buyer copies of any liens or encumbrances aﬀecƟng such personal property that it is aware of within 10 or days following the Date of Agreement of this PSA.
(n) DestrucƟon,Damage or Loss. Subsequent to the Date of Agreement and prior to Closing there shall not have occurred a destrucƟonof, or damage or loss to, the Property or any porƟon thereof, from any cause whatsoever, which would cost more than $10,000.00 to repair or cure. If the cost of repair or cure is $10,000.00 or less, Seller shall repair or cure the loss prior to the Closing. Buyer shall have the opƟon,within 10 days aŌer receipt of wriƩen noƟce of a loss cosƟng more than $10,000.00 to repair or cure, to either terminate this Agreement or to purchase the Property notwithstanding such loss, but without deducƟonor oﬀset

INITIALS INITIALS
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against the Purchase Price. If the cost to repair or cure is more than $10,000.00, and Buyer does not elect to terminate this Agreement, Buyer shall be enƟtledto any insurance proceeds applicable to such loss. Unless otherwise noƟﬁedin wriƟng,Escrow Holder shall assume no such destrucƟon, damage or loss has occurred prior to Closing.
(o) Material Change. Buyer shall have 10 days following receipt of wriƩen noƟceof a Material Change within which to saƟsfy itself with regard to such change. "Material Change" shall mean a substanƟaladverse change in the use, occupancy, tenants, Ɵtle, or condiƟonof the Property that occurs aŌer the date of this oﬀerand prior to the Closing. Unless otherwise noƟﬁedin wriƟng,Escrow Holder shall assume that no Material Change has occurred prior to the Closing. (p) Seller Performance. The delivery of all documents and the due performance by Seller of each and every undertaking and agreement to be performed by Seller under this Agreement.
(q) Brokerage Fee. Payment at the Closing of such brokerage fee as is speciﬁed in this Agreement or later wriƩen instrucƟons to Escrow Holder executed by Seller and Brokers ("Brokerage Fee"). It is agreed by the ParƟesand Escrow Holder that Brokers are a third party beneﬁciaryof this Agreement insofar as the Brokerage Fee is concerned, and that no change shall be made with respect to the payment of the Brokerage Fee speciﬁed in this Agreement, without the wriƩen consent of Brokers.

9.2 All of the conƟngencies speciﬁed in subparagraphs (a) through (m) of paragraph 9.1 are for the beneﬁtof, and may be waived by, Buyer, and may be elsewhere herein referred to as "Buyer's ConƟngencies."

9.3 If any of Buyer's ConƟngencies or any other maƩersubject to Buyer's approval is disapproved as provided for herein in a Ɵmely manner ("Disapproved Item"), Seller shall have the right within 10 days following the receipt of noƟce of Buyer's disapproval to elect to cure such Disapproved Item prior to the Expected Closing Date ("Seller's ElecƟon"). Seller's failure to give to Buyer within such period, wriƩen noƟce of Seller's commitment to cure such Disapproved Item on or before the Expected Closing Date shall be conclusively presumed to be Seller's ElecƟonnot to cure such Disapproved Item. If Seller elects, either by wriƩen noƟceor failure to give wriƩen noƟce,not to cure a Disapproved Item, Buyer shall have the right, within 10 days aŌerSeller's ElecƟonto either accept Ɵtle to the Property subject to such Disapproved Item, or to terminate this Agreement. Buyer's failure to noƟfySeller in wriƟngof Buyer's elecƟon to accept Ɵtle to the Property subject to the Disapproved Item without deducƟonor oﬀsetshall consƟtuteBuyer's elecƟonto terminate this Agreement. The above Ɵmeperiods only apply once for each Disapproved Item. Unless expressly provided otherwise herein, Seller's right to cure shall not apply to the remediaƟonof Hazardous Substance CondiƟonsor to the Financing ConƟngency. Unless the ParƟesmutually instruct otherwise, if the Ɵmeperiods for the saƟsfacƟon of conƟngenciesor for Seller's and Buyer's elecƟons would expire on a date aŌerthe Expected Closing Date, the Expected Closing Date shall be deemed extended for 3 business days following the expiraƟonof: (a) the applicable conƟngency period(s), (b) the period within which the Seller may elect to cure the Disapproved Item, or (c) if Seller elects not to cure, the period within which Buyer may elect to proceed with this transacƟon, whichever is later.

9.4 The ParƟesacknowledge that extensive local, state and Federal legislaƟon establish broad liability upon owners and/or users of real property for the invesƟgaƟonand remediaƟonof Hazardous Substances. The determinaƟon of the existence of a Hazardous Substance CondiƟonand the evaluaƟonof the impact of such a condiƟonare highly technical and beyond the experƟseof Brokers. The ParƟesacknowledge that they have been advised by Brokers to consult their own technical and legal experts with respect to the possible presence of Hazardous Substances on the Property or adjoining properƟes, and Buyer and Seller are not relying upon any invesƟgaƟon by or statement of Brokers with respect thereto. The ParƟeshereby assume all responsibility for the impact of such Hazardous Substances upon their respecƟve interests herein.

10. Documents and Other Items Required at or Before Closing.

10.1 Five days prior to the Closing date Escrow Holder shall obtain an updated Title Commitment concerning the Property from the Title Company and provide copies thereof to each of the ParƟes.

10.2 Seller shall deliver to Escrow Holder in Ɵmefor delivery to Buyer at the Closing:
(a) Grant or general warranty deed, duly executed and in recordable form, conveying fee Ɵtleto the Property to Buyer. (b) If applicable, the Beneﬁciary Statements concerning ExisƟng Note(s). (c) If applicable, the ExisƟng Leases and Other Agreements together with duly executed assignments thereof by Seller and Buyer. The assignment of ExisƟngLeases shall be on the most recent Assignment and AssumpƟon of Lessor's Interest in Lease form published by the AIR or its equivalent. (d) An aﬃdavit executed by Seller to the eﬀectthat Seller is not a "foreign person" within the meaning of Internal Revenue Code SecƟon1445 or successor statutes. If Seller does not provide such aﬃdavitin form reasonably saƟsfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Internal Revenue Service such sum as is required by applicable Federal law with respect to purchases from foreign sellers.
(e) If the Property is located in California, an aﬃdavitexecuted by Seller to the eﬀectthat Seller is not a ''nonresident" within the meaning of California Revenue and Tax Code SecƟon18662 or successor statutes. If Seller does not provide such aﬃdavitin form reasonably saƟsfactory to Buyer at least 3 business days prior to the Closing, Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to the Franchise Tax Board such sum as is required by such statute. (f) If applicable, a bill of sale, duly executed, conveying Ɵtleto any included personal property to Buyer. (g) If the Seller is a corporaƟon,a duly executed corporate resoluƟonauthorizing the execuƟonof this Agreement and the sale of the Property.

10.3 Buyer shall deliver to Seller through Escrow:
(a) The cash porƟon of the Purchase Price and such addiƟonal sums as are required of Buyer under this Agreement shall be deposited by Buyer with Escrow Holder, by federal funds wire transfer, or any other method acceptable to Escrow Holder in immediately collectable funds, no later than 2:00 P.M. on the business day prior to the Expected Closing Date provided, however, that Buyer shall not be required to deposit such monies into Escrow if at the Ɵme set for the deposit of such monies Seller is in default or has indicated that it will not perform any of its obligaƟonshereunder. Instead, in such circumstances in order to reserve its rights to proceed Buyer need only provide Escrow with evidence establishing that the required monies were available. (b) If a Purchase Money Note and Purchase Money Deed of Trust are called for by this Agreement, the duly executed originals of those documents, the Purchase Money Deed of Trust being in recordable form, together with evidence of ﬁre insurance on the improvements in the amount of the full replacement cost naming Seller as a mortgage loss payee, and a real estate tax service contract (at Buyer's expense), assuring Seller of noƟce of the status of payment of real property taxes during the life of the Purchase Money Note.
(c) The Assignment and AssumpƟon of Lessor's Interest in Lease form speciﬁed in paragraph 10.2(c) above, duly executed by Buyer. (d) AssumpƟonsduly executed by Buyer of the obligaƟonsof Seller that accrue aŌerClosing under any Other Agreements. (e) If applicable, a wriƩen assumpƟonduly executed by Buyer of the loan documents with respect to ExisƟngNotes. (f) If the Buyer is a corporaƟon, a duly executed corporate resoluƟon authorizing the execuƟon of this Agreement and the purchase of the Property.

10.4 At Closing, Escrow Holder shall cause to be issued to Buyer a standard coverage (or ALTA extended, if elected pursuant to 9.1(g)) owner's form policy of Ɵtle insurance eﬀecƟve as of the Closing, issued by the Title Company in the full amount of the Purchase Price, insuring Ɵtle to the Property vested in Buyer, subject only to the excepƟons approved by Buyer. In the event there is a Purchase Money Deed of Trust in this transacƟon,the policy of Ɵtle insurance shall be a joint protecƟon policy insuring both Buyer and Seller.

IMPORTANT: IN A PURCHASE OR EXCHANGE OF REAL PROPERTY, IT MAY BE ADVISABLE TO OBTAIN TITLE INSURANCE IN CONNECTION WITH THE CLOSE OF ESCROW SINCE THERE MAY BE PRIOR RECORDED LIENS AND ENCUMBRANCES WHICH AFFECT YOUR INTEREST IN THE PROPERTY BEING ACQUIRED. A NEW POLICY OF TITLE INSURANCE SHOULD BE OBTAINED IN ORDER TO ENSURE YOUR INTEREST IN THE PROPERTY THAT YOU ARE ACQUIRING.

11. ProraƟons and Adjustments.

11.1 Taxes. Applicable real property taxes and special assessment bonds shall be prorated through Escrow as of the date of the Closing, based upon the latest tax bill available. The ParƟesagree to prorate as of the Closing any taxes assessed against the Property by supplemental bill levied by reason of events occurring prior to the Closing. Payment of the prorated amount shall be made promptly in cash upon receipt of a copy of any supplemental bill.

11.2 Insurance. WARNING: Any insurance which Seller may have maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property.

11.3 Rentals, Interest and Expenses. Scheduled rentals, interest on ExisƟngNotes, uƟliƟes,and operaƟng expenses shall be prorated as of the date of Closing.

The ParƟes agree to promptly adjust between themselves outside of Escrow any rents received aŌerthe Closing.

11.4 Security Deposit. Security Deposits held by Seller shall be given to Buyer as a credit to the cash required of Buyer at the Closing.

11.5 Post Closing MaƩers. Any item to be prorated that is not determined or determinable at the Closing shall be promptly adjusted by the ParƟesby appropriate cash payment outside of the Escrow when the amount due is determined.

11.6 VariaƟons in ExisƟngNote Balances. In the event that Buyer is purchasing the Property subject to an ExisƟng Deed of Trust(s), and in the event that a BeneﬁciaryStatement as to the applicable ExisƟng Note(s) discloses that the unpaid principal balance of such ExisƟngNote(s) at the closing will be more or less than the amount set forth in paragraph 3.1(c) hereof ("ExisƟng Note VariaƟon"), then the Purchase Money Note(s) shall be reduced or increased by an amount equal to such ExisƟng Note VariaƟon. If there is to be no Purchase Money Note, the cash required at the Closing per paragraph 3.1(a) shall be reduced or increased by the amount of such ExisƟng Note VariaƟon.

11.7 VariaƟons in New Loan Balance. In the event Buyer is obtaining a New Loan and the amount ulƟmately obtained exceeds the amount set forth in paragraph 5.1, then the amount of the Purchase Money Note, if any, shall be reduced by the amount of such excess.

11.8 Owner's AssociaƟonFees. Escrow Holder shall: (i) bring Seller's account with the associaƟon current and pay any delinquencies or transfer fees from Seller's proceeds, and (ii) pay any up front fees required by the associaƟonfrom Buyer's funds.

12. RepresentaƟons and WarranƟes of Seller and Disclaimers.

12.1 Seller's warranƟesand representaƟons shall survive the Closing and delivery of the deed for a period of 3 years, and any lawsuit or acƟonbased upon them must be commenced within such Ɵmeperiod. Seller's warranƟesand representaƟonsare true, material and relied upon by Buyer and Brokers in all respects. Seller hereby makes the following warranƟesand representaƟons to Buyer and Brokers:
(a) Authority of Seller. Seller is the owner of the Property and/or has the full right, power and authority to sell, convey and transfer the Property to Buyer as provided herein, and to perform Seller's obligaƟonshereunder. (b) Maintenance During Escrow and Equipment CondiƟonAt Closing. Except as otherwise provided in paragraph 9.1(n) hereof, Seller shall maintain the Property unƟl the Closing in its present condiƟon,ordinary wear and tear excepted. (c) Hazardous Substances/Storage Tanks. Seller has no knowledge, except as otherwise disclosed to Buyer in wriƟng, of the existence or prior existence on the Property of any Hazardous Substance, nor of the existence or prior existence of any above or below ground storage tank. (d) Compliance. Except as otherwise disclosed in wriƟng,Seller has no knowledge of any aspect or condiƟonof the Property which violates applicable laws, rules, regulaƟons,codes or covenants, condiƟons or restricƟons, or of improvements or alteraƟons made to the Property without a permit where one was required, or of any unfulﬁlledorder or direcƟveof any applicable governmental agency or casualty insurance company requiring any invesƟgaƟon, remediaƟon, repair, maintenance or improvement be performed on the Property. (e) Changes in Agreements. Prior to the Closing, Seller will not violate or modify any ExisƟng Lease or Other Agreement, or create any new leases or other agreements aﬀecƟngthe Property, without Buyer's wriƩenapproval, which approval will not be unreasonably withheld. (f) Possessory Rights. Seller has no knowledge that anyone will, at the Closing, have any right to possession of the Property, except as disclosed by this Agreement or otherwise in wriƟngto Buyer.
(g) Mechanics' Liens. There are no unsaƟsﬁedmechanics' or materialmens' lien rights concerning the Property. (h) AcƟons,Suits or Proceedings. Seller has no knowledge of any acƟons, suits or proceedings pending or threatened before any commission, board, bureau, agency, arbitrator, court or tribunal that would aﬀect the Property or the right to occupy or uƟlizesame. (i) NoƟceof Changes. Seller will promptly noƟfyBuyer and Brokers in wriƟngof any Material Change (see paragraph 9.1(o)) aﬀecƟng the Property that becomes known to Seller prior to the Closing.
(j) No Tenant Bankruptcy Proceedings. Seller has no noƟceor knowledge that any tenant of the Property is the subject of a bankruptcy or insolvency proceeding.
(k) No Seller Bankruptcy Proceedings. Seller is not the subject of a bankruptcy, insolvency or probate proceeding. (l) Personal Property. Seller has no knowledge that anyone will, at the Closing, have any right to possession of any personal property included in the Purchase Price nor knowledge of any liens or encumbrances aﬀecƟngsuch personal property, except as disclosed by this Agreement or otherwise in wriƟngto Buyer.

12.2 Buyer hereby acknowledges that, except as otherwise stated in this Agreement, Buyer is purchasing the Property in its exisƟng condiƟonand will, by the Ɵmecalled for herein, make or have waived all inspecƟonsof the Property Buyer believes are necessary to protect its own interest in, and its contemplated use of, the Property. The ParƟes acknowledge that, except as otherwise stated in this Agreement, no representaƟons,inducements, promises, agreements, assurances, oral or wriƩen,concerning the Property, or any aspect of the occupaƟonalsafety and health laws, Hazardous Substance laws, or any other act, ordinance or law, have been made by either Party or Brokers, or relied upon by either Party hereto.

12.3 In the event that Buyer learns that a Seller representaƟonor warranty might be untrue prior to the Closing, and Buyer elects to purchase the Property anyway then, and in that event, Buyer waives any right that it may have to bring an acƟonor proceeding against Seller or Brokers regarding said representaƟonor warranty.

12.4 Any environmental reports, soils reports, surveys, and other similar documents which were prepared by third party consultants and provided to Buyer by Seller or Seller's representaƟves, have been delivered as an accommodaƟonto Buyer and without any representaƟon or warranty as to the suﬃciency,accuracy, completeness, and/or validity of said documents, all of which Buyer relies on at its own risk. Seller believes said documents to be accurate, but Buyer is advised to retain appropriate consultants to review said documents and invesƟgate the Property.

13. Possession.

Possession of the Property shall be given to Buyer at the Closing subject to the rights of tenants under ExisƟngLeases.

14. Buyer's Entry.

At any Ɵmeduring the Escrow period, Buyer, and its agents and representaƟves,shall have the right at reasonable Ɵmesand subject to rights of tenants, to enter upon the Property for the purpose of making inspecƟonsand tests speciﬁed in this Agreement. No destrucƟve tesƟngshall be conducted, however, without Seller's prior approval which shall not be unreasonably withheld. Following any such entry or work, unless otherwise directed in wriƟng by Seller, Buyer shall return the Property to the condiƟon it was in prior to such entry or work, including the re-compacƟon or removal of any disrupted soil or material as Seller may reasonably direct. All such inspecƟonsand tests and any other work conducted or materials furnished with respect to the Property by or for Buyer shall be paid for by Buyer as and when due and Buyer shall indemnify, defend, protect and hold harmless Seller and the Property of and from any and all claims, liabiliƟes, losses, expenses (including reasonable aƩorneys'fees), damages, including those for injury to person or property, arising out of or relaƟng to any such work or materials or the acts or omissions of Buyer, its agents or employees in connecƟontherewith.

15. Further Documents and Assurances.

The ParƟes shall each, diligently and in good faith, undertake all acƟonsand procedures reasonably required to place the Escrow in condiƟonfor Closing as and when required by this Agreement. The ParƟes agree to provide all further informaƟon,and to execute and deliver all further documents, reasonably required by Escrow Holder or the Title Company.

16. AƩorneys' Fees.

If any Party or Broker brings an acƟonor proceeding (including arbitraƟon)involving the Property whether founded in tort, contract or equity, or to declare rights hereunder, the Prevailing Party (as hereaŌer deﬁned) in any such proceeding, acƟon,or appeal thereon, shall be enƟtledto reasonable aƩorneys' fees and costs. Such fees may be awarded in the same suit or recovered in a separate suit, whether or not such acƟon or proceeding is pursued to decision or judgment. The term "Prevailing Party" shall include, without limitaƟon,a Party or Broker who substanƟallyobtains or defeats the relief sought, as the case may be, whether by compromise, seƩlement, judgment, or the abandonment by the other Party or Broker of its claim or defense. The aƩorneys'fees award shall not be computed in accordance with any court fee schedule, but shall be such as to fully reimburse all aƩorneys' fees reasonably incurred.

17. Prior Agreements/Amendments.

17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property.

17.2 Amendments to this Agreement are eﬀecƟve only if made in wriƟng and executed by Buyer and Seller.

18. Broker's Rights.

18.1 If this sale is not consummated due to the default of either the Buyer or Seller, the defaulƟng Party shall be liable to and shall pay to Brokers the Brokerage Fee that Brokers would have received had the sale been consummated. If Buyer is the defaulƟngparty, payment of said Brokerage Fee is in addiƟon to any obligaƟon with respect to liquidated or other damages.

18.2 Upon the Closing, Brokers are authorized to publicize the facts of this transacƟon.

19. NoƟces.

19.1 Whenever any Party, Escrow Holder or Brokers herein shall desire to give or serve any noƟce, demand, request, approval, disapproval or other communicaƟon,each such communicaƟon shall be in wriƟngand shall be delivered personally, by messenger, or by mail, postage prepaid, to the address set forth in this agreement or by facsimile transmission, electronic signature, digital signature, or email.

19.2 Service of any such communicaƟonshall be deemed made on the date of actual receipt if personally delivered, or transmiƩedby facsimile transmission, electronic signature, digital signature, or email. Any such communicaƟonsent by regular mail shall be deemed given 48 hours aŌer the same is mailed.

CommunicaƟonssent by United States Express Mail or overnight courier that guarantee next day delivery shall be deemed delivered 24 hours aŌerdelivery of the same to the Postal Service or courier. If such communicaƟon is received on a Saturday, Sunday or legal holiday, it shall be deemed received on the next business day.

19.3 Any Party or Broker hereto may from Ɵmeto Ɵme,by noƟcein wriƟng, designate a diﬀerentaddress to which, or a diﬀerent person or addiƟonal persons to whom, all communicaƟons are thereaŌerto be made.

20. DuraƟon of Oﬀer.

20.1 If this oﬀeris not accepted by Seller on or before 5:00 P.M. according to the Ɵmestandard applicable to the city of Garden Grove, CA on the date of September 14, 2022 , it shall be deemed automaƟcally revoked.

20.2 The acceptance of this oﬀer,or of any subsequent counteroﬀerhereto, that creates an agreement between the ParƟesas described in paragraph 1.2, shall be deemed made upon delivery to the other Party or either Broker herein of a duly executed wriƟnguncondiƟonally accepƟngthe last outstanding oﬀer or counteroﬀer.

21. LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicable only if iniƟaledby both ParƟes).

THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR WAIVER

OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE

AMOUNT OF
$200,000.00 . UPON PAYMENT OF SAID SUM TO SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, AND ANY ESCROW CANCELLATION FEES AND TITLE COMPANY CHARGES SHALL BE PAID BY SELLER.

Buyer's IniƟals Seller's IniƟals

22. ARBITRATION OF DISPUTES. (This ArbitraƟon of Disputes paragraph is applicable only if iniƟaled by both ParƟes.)

22.1 ANY CONTROVERSY AS TO WHETHER SELLER IS ENTITLED TO LIQUIDATED DAMAGES AND/OR BUYER IS ENTITLED TO THE RETURN OF THE DEPOSIT SHALL BE DETERMINED BY BINDING ARBITRATION ADMINISTERED BY THE JUDICIAL ARBITRATION & MEDIATION SERVICES, INC. ("JAMS") IN ACCORDANCE WITH ITS COMMERCIAL ARBITRATION RULES ("COMMERCIAL RULES"). ARBITRATION HEARINGS SHALL BE HELD IN THE COUNTY WHERE THE PROPERTY IS LOCATED.

SUCH CONTROVERSY SHALL BE ARBITRATED BY A SINGLE ARBITRATOR, APPOINTED UNDER THE COMMERCIAL RULES WHO HAS HAD AT LEAST 5 YEARS OF
EXPERIENCE IN THE TYPE OF REAL ESTATE THAT IS THE SUBJECT OF THIS AGREEMENT. THE ARBITRATOR SHALL HEAR AND DETERMINE SAID CONTROVERSY IN

ACCORDANCE WITH APPLICABLE LAW OF THE JURISDICTION WHERE THE PROPERTY IS LOCATED, THE INTENTION OF THE PARTIES AS EXPRESSED IN THIS AGREEMENT AND ANY AMENDMENTS THERETO, AND UPON THE EVIDENCE PRODUCED AT AN ARBITRATION HEARING. PRE-ARBITRATION DISCOVERY SHALL BE PERMITTED IN ACCORDANCE WITH THE COMMERCIAL RULES OR STATE LAW APPLICABLE TO ARBITRATION PROCEEDINGS. THE ARBITRATOR SHALL RENDER AN AWARD WITHIN 30 DAYS AFTER THE CONCLUSION OF THE HEARING, WHICH MAY INCLUDE ATTORNEYS' FEES AND COSTS TO THE PREVAILING PARTY PER PARAGRAPH 16 HEREOF AND SHALL BE ACCOMPANIED BY A REASONED OPINION. THE FAILURE OR REFUSAL OF A PARTY TO PAY SUCH PARTY’S REQUIRED SHARE

OF THE DEPOSITS FOR ARBITRATOR COMPENSATION OR ADMINISTRATIVE CHARGES SHALL CONSTITUTE A WAIVER BY SUCH PARTY TO PRESENT EVIDENCE OR

CROSS-EXAMINE WITNESSES, BUT SUCH WAIVER SHALL NOT ALLOW FOR A DEFAULT JUDGMENT AGAINST THE NON-PAYING PARTY IN THE ABSENCE OF EVIDENCE AND LEGAL ARGUMENT AS THE ARBITRATOR MAY REQUIRE FOR MAKING AN AWARD. JUDGMENT MAY BE ENTERED ON THE AWARD IN ANY COURT OF COMPETENT JURISDICTION NOTWITHSTANDING THE FAILURE OF A PARTY DULY NOTIFIED OF THE ARBITRATION HEARING TO APPEAR THEREAT.

22.2 BUYER'S RESORT TO OR PARTICIPATION IN SUCH ARBITRATION PROCEEDINGS SHALL NOT BAR SUIT IN A COURT OF COMPETENT JURISDICTION BY THE

BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE UNLESS AND UNTIL THE ARBITRATION RESULTS IN AN AWARD TO THE SELLER OF LIQUIDATED DAMAGES, IN WHICH EVENT SUCH AWARD SHALL ACT AS A BAR AGAINST ANY ACTION BY BUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE.

22.3 NOTICE: BY INITIALING IN THE SPACE BELOW YOU ARE AGREEING TO HAVE ANY DISPUTE ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION DECIDED BY NEUTRAL ARBITRATION 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 SUCH RIGHTS ARE SPECIFICALLY INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION. IF YOU REFUSE TO SUBMIT TO ARBITRATION AFTER AGREEING TO THIS PROVISION, YOU MAY BE COMPELLED TO ARBITRATE UNDER THE AUTHORITY OF THE CALIFORNIA CODE OF CIVIL PROCEDURE. YOUR

AGREEMENT
TO THIS ARBITRATION PROVISION IS VOLUNTARY.

WE HAVE READ AND UNDERSTAND THE FOREGOING AND AGREE TO SUBMIT DISPUTES ARISING OUT OF THE MATTERS INCLUDED IN THE "ARBITRATION OF DISPUTES" PROVISION TO NEUTRAL ARBITRATION.

Buyer's IniƟals Seller's IniƟals

23. Miscellaneous.

23.1 Binding Eﬀect. This Agreement shall be binding on the ParƟes without regard to whether or not paragraphs 21 and 22 are iniƟaled by both of the ParƟes.

Paragraphs 21 and 22 are each incorporated into this Agreement only if iniƟaledby both ParƟes at the Ɵme that the Agreement is executed. Signatures to this Agreement accomplished by means of electronic signature or similar technology shall be legal and binding.

23.2 Applicable Law. This Agreement shall be governed by, and paragraph 22.3 is amended to refer to, the laws of the state in which the Property is located.

Any liƟgaƟon or arbitraƟon between the ParƟes hereto concerning this Agreement shall be iniƟated in the county in which the Property is located.

23.3 Time of Essence. Time is of the essence of this Agreement.

23.4 Counterparts. This Agreement may be executed by Buyer and Seller in counterparts, each of which shall be deemed an original, and all of which together shall consƟtute one and the same instrument. Escrow Holder, aŌer verifying that the counterparts are idenƟcalexcept for the signatures, is authorized and instructed to combine the signed signature pages on one of the counterparts, which shall then consƟtutethe Agreement.

23.5 Waiver of Jury Trial. THE PARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTS TO TRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVING THE PROPERTY OR ARISING OUT OF THIS AGREEMENT.

23.6 Conﬂict. Any conﬂict between the printed provisions of this Agreement and the typewriƩen or handwriƩen provisions shall be controlled by the typewriƩenor handwriƩenprovisions. Seller and Buyer must iniƟalany and all handwriƩen provisions .

23.7 1031 Exchange. Both Seller and Buyer agree to cooperate with each other in the event that either or both wish to parƟcipate in a 1031 exchange. Any party iniƟaƟng an exchange shall bear all costs of such exchange. The cooperaƟng Party shall not have any liability (special or otherwise) for damages to the exchanging Party in the event that the sale is delayed and/or that the sale otherwise fails to qualify as a 1031 exchange.

23.8 Days. Unless otherwise speciﬁcallyindicated to the contrary, the word "days" as used in this Agreement shall mean and refer to calendar days.

24. Disclosures Regarding The Nature of a Real Estate Agency RelaƟonship.

24.1 The ParƟesand Brokers agree that their relaƟonship(s)shall be governed by the principles set forth in the applicable secƟonsof the California Civil Code, as summarized in paragraph 24.2.

24.2 When entering into a discussion with a real estate agent regarding a real estate transacƟon,a Buyer or Seller should from the outset understand what type of agency relaƟonshipor representaƟonit has with the agent or agents in the transacƟon. Buyer and Seller acknowledge being advised by the Brokers in this transacƟon,as follows:
(a) Seller's Agent. A Seller's agent under a lisƟngagreement with the Seller acts as the agent for the Seller only. A Seller's agent or subagent has the following aﬃrmaƟve obligaƟons:(1) To the Seller: A ﬁduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Seller. (2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and care in performance of the agent's duƟes. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially aﬀecƟngthe value or desirability of the property that are not known to, or within the diligent aƩenƟonand observaƟonof, the ParƟes. An agent is not obligated to reveal to either Party any conﬁdenƟal informaƟonobtained from the other Party which does not involve the aﬃrmaƟve duƟesset forth above.
(b) Buyer's Agent. A selling agent can, with a Buyer's consent, agree to act as agent for the Buyer only. In these situaƟons, the agent is not the Seller's agent, even if by agreement the agent may receive compensaƟonfor services rendered, either in full or in part from the Seller. An agent acƟng only for a Buyer has the following aﬃrmaƟve obligaƟons. (1) To the Buyer: A ﬁduciary duty of utmost care, integrity, honesty, and loyalty in dealings with the Buyer. (2) To the Buyer and the Seller: a. Diligent exercise of reasonable skills and care in performance of the agent's duƟes. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts known to the agent materially aﬀecƟng the value or desirability of the property that are not known to, or within the diligent aƩenƟon and observaƟonof, the ParƟes. An agent is not obligated to reveal to either Party any conﬁdenƟal informaƟonobtained from the other Party which does not involve the aﬃrmaƟve duƟes set forth above.
(c) Agent RepresenƟng Both Seller and Buyer. A real estate agent, either acƟngdirectly or through one or more associate licensees, can legally be the agent of both the Seller and the Buyer in a transacƟon, but only with the knowledge and consent of both the Seller and the Buyer. (1) In a dual agency situaƟon,the agent has the following aﬃrmaƟve obligaƟonsto both the Seller and the Buyer: a. A ﬁduciary duty of utmost care, integrity, honesty and loyalty in the dealings with ________ ________
________

OFA-20.20, Revised 10-22-2020
________

INITIALS
Last Edited: 9/2/2022 8:06 AM

Page 6 of 8 ends

Garden Grove City CouncilSeptember 13, 2022

Garden Grove City Council
September 13, 2022