1834974.1
SUBDIVISION IMPROVEMENT AGREEMENT
SUBDIVIDER: INVESTEL GARDEN RESORT, LLC.
TRACT MAP NO. 17455
THIS AGREEMENT is made this ____th day of ____ 2024, by the CITY OF GARDEN GROVE, a municipal corporation ("CITY") on the one hand, and INVESTEL GARDEN RESORTS, LLC, a Delaware limited liability company ("SUBDIVIDER"). CITY and SUBDIVIDER are sometime referred to herein individually as the “Party” or collectively as the “Parties.”
RECITALS:
The following recitals are a substantive part of this Agreement:
1. SUBDIVIDER and CITY are parties to (a ) that certain Grove District Resort Hotel Development Agreement, dated April 9, 2013, as assigned to SUBDIVIDER and amended (the “RDDA”), and (b) that certain Development Agreement No. DA -008-2017, dated January 12, 2018 (the “DA”).
2. SUBDIVIDER has obtained initial CITY approval of a subdivision map for Tentative Tract Map No. 17455 (“Project”), subject to certain conditions of approval for the development of the Project (“Conditions of Approval”).
3. As a condition precedent to the approval of the Final Map by CITY, SUBDIVIDER is required to construct, install and/or offer for dedication to CITY certain streets, highways, easements, infrastructure improvements and/or parcels of land intended for public use.
4. SUBDIVIDER, by the Final Map, has offered for dedication to CITY certain streets, easements, property, and infrastructure improvements.
5. CITY desires to accept the dedication s of such streets, easements, property, and other improvements as shown on the Final Map, and certain other improvements described in this Agreement.
6. SUBDIVIDER has delivered to CITY and CITY has approved plans and specifications and related documents for certain “Improvements” (as hereinafter defined), which are required to be constructed and installed in order to accommodate the development of the Project.
7. SUBDIVIDER has requested approval of the Final Map prior to completion of all of the Improvements required by CITY.
8. To assure CITY that SUBDIVIDER will complete construction and installation of all required Improvements, the Parties have entered into this Agreement. 1834974.1
9. SUBDIVIDER’s agreement to construct and install the Improvements pursuant to this Agreement and its offer of dedication of the streets, easements, and other improvements, as shown on the Final Map, are a material consideration to CITY in approving the Final Map and permitting development of the Project to proceed.
SUBDIVIDER has agreed to perform, the construction and installment of the Improvements.
10. This Agreement is entered into in accordance with the Subdivision Map Act (Government Code sections 66410 et seq.) and the ordinances, rules, regulations, and determinations of the CITY.
AGREEMENT
NOW THEREFORE, based on the foregoing Recitals, which are incorporated herein by reference, and in consideration of the CITY’s approving the Final Map and permitting development of the Project to proceed, CITY’s acceptance of the streets, easement, and other improvements offered for dedication by SUBDIVIDER, and the mutual promises contained herein, the Parties mutually agree as follows:
1. Improvements. Subject to the RHDA, SUBDIVIDER, at his or her sole expense, agrees to construct and install, as applicable, the street, sidewalks, drainage, domestic water, sanitary sewer, and other improvements (herein sometimes collectively referred to as the “Improvements”) required to be constructed or agreed to be constructed as a condition precedent to the approval of the Final Map and acceptance of such streets and easements, as expressly shown on (1) the Improvement Lists attached hereto at Exhibit “A” and incorporated herein by reference, and/or (2) the approved Project Improvement Plans on file with CITY and/or subsequently approved or revised by CITY and SUBDIVIDER (the “Improvement Plans”). The estimated construction cost for the Improvements is $5,295,839.
2. Security. To secure the faithful performance of each improvement required under this Agreement and to ensure full payment to all persons furnishing or supplying labor or materials for each improvement required, SUBDIVIDER shall provide CITY with the following bonds (or a cash deposit or instrument of credit in lieu of bonds):
Improvement Type of Bond Amount
100% of total estimate for Off-Site
Improvements and On
-Site
Grading & Drainage
Improvements as shown on
Grading Plan No. G
-1372 and
Street Improvement Plan No. A-
1927
Faithful
Performance
$5,295,839
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50% of total estimate for Off-Site
Improvements and On-Site
Grading & Drainage
Improvements as shown on
Grading Plan No. G
-1372 and
Street Improvement Plan No. A-
1927
Labor &
Material
$2,647,920
100% total estimate for Survey
Monument Bond for setting
required survey monuments and
filing all documentation and
records as described and required
by the Final Tract Map on file with
the CITY
Monument
Bond
$13,000
The bonds shall be executed on CITY forms by a surety authorized to do business in the State of California and shall be subject to approval by the City Attorney. Any instrument of credit provided in lieu of bonds shall be from a qualified financial institution, and in a form, acceptable to CITY.
3. Time for Completion. SUBDIVIDER shall complete construction and installation of the Improvements within time period(s) provided for in the schedule of performance set forth in the RHDA and/or DA or approved by the CITY in writing.
4. CITY Inspection and Acceptance. The City Engineer or his or her duly authorized representative, upon request of SUBDIVIDER, shall inspect the improvements herein agreed to be constructed or installed by SUBDIVIDER, and, if determined to be in accordance with the applicable CITY standards, as set forth in the Garden Grove Municipal Code, Conditions of Approval and Improvement Plans, shall recommend the acceptance of such improvements by the CITY.
5. Changes or Alterations. SUBDIVIDER shall perform changes or alterations in the construction and installation of the improvements required by CITY, to the extent such changes or alterations are needed to cause the improvements to comply with the applicable CITY standards, as set forth in the Garden Grove Municipal Code, Conditions of Approval and Improvement Plans.
6. Guarantee. SUBDIVIDER shall guarantee such improvements for a period of one (1) year following the completion by SUBDIVIDER and acceptance by CITY against any defective work or labor done, or defective materials furnished, in the performance of work pursuant to this Agreement.
7. Insurance and Indemnification Requirements.
7.1 Commencement of Work. Unless expressly waived in writing by CITY, insurance meeting the requirements set forth in this Agreement and covering the acts and 1834974.1
omissions of SUBDIVIDER, and all other contractors and subcontractors engaged in any way in the construction and installation of the Improvements must be provided to CITY, and SUBDIVIDER, all contractors, and subcontractors shall not commence work under this Agreement until all required insurance certificates and endorsements have been received and approved by the CITY.
7.2 Contractors and Subcontractors . SUBDIVIDER acknowledges and agrees that the insurance requirements set forth in Section 306 of the RHDA apply to the construction of the Improvements in accordance with this Agreement, and such insurance requirements are hereby incorporated by reference as if fully set forth herein. SUBDIVIDER shall require all co ntractors and subcontractors engaged in construction and installation of the Improvements to obtain and maintain the same insurance as required of SUBDIVIDER herein and shall require such contractors and subcontractors to agree to comply with the insurance requirements herein, including providing the endorsements naming the CITY as an additional insured.
SUBDIVIDER shall be responsible to collect and maintain all insurance from all such contractors and subcontractors. Should the insurance carrier for any such contractor or subcontractor require an agr eement with the CITY prior to providing effective additional insured coverage, then such contractor or subcontractor shall be required to execute an agreement with the CITY, in a form approved by the City Attorney, agreeing to perform the pertinent work and stipulating to indemnify and provide insurance under the terms of the Insurance and Indemnification Requirements of this Agreement.
7.3 Indemnification.
A. SUBDIVIDER agrees to protect, defend, and hold harmless CITY and its officials, officers, employees and agents from any and all claims, liabilities, expenses or damages of any nature, including attorneys’ fees, for injury to or death of any person, damage to property, interference with use of property, and monetary damages of any nature resulting from, arising out of, or in any way connected with performance of the Agreement by SUBDIVIDER and its agents, officers, employees, subcontractors, or independent contractors hired by SUBDIVIDER. The only exception to SUBDIVIDER’S responsibility to protect, defend, indemnify and hold harmless CITY, is due to the negligence or willful misconduct of CITY, or any of its officials, officers, employees or agents.
B. SUBDIVIDER agrees to protect, defend, and hold harmless CITY and its officials, officers, employees and agents from any and all claims, liabilities, expenses or damages of any nature, including attorneys’ fees, for injury to or death of any person, damage to property, interference with use of property, and monetary damages of any nature resulting from, arising out of, or in any way connected with the construction and installation of the Improvements and performance of the Agreement by SUBDIVIDER and its agents, officers, employees, subcontractors, or independent contractors hired by SUBDIVDER. 1834974.1
The only exception to SUBDIVIDER’S responsibility to protect, defend, indemnify and hold harmless CITY, is due to the negligence or willful misconduct of CITY, or any of its officials, officers, employees or agents.
C. CITY does not, and shall not waive any rights against SUBDIVIDER which it may have by reason of this hold harmless agreement. This hold harmless agreement shall apply to all liability regardless of whether or not any insurance policies are applicable. The policy limits do not act as a limitation upon the amount of indemnification to be provided by SUBDIVIDER in the event of loss, claim, damage, or expense. The indemnification obligations of SUBDIVIDER shall survive the termination of this Agreement until all such obligations are fully and finally resolved.
8. Default.
8.1 Remedies Not Exclusive. In any case where this Agreement provides a specific remedy to CITY for a default by SUBDIVIDER hereunder, such remedy shall be in addition to, and not exclusive of, CITY’s right to pursue any other administrative, legal, or equitable remedy to which it may be entitled.
8.2 CITY Right to Perform Work. In the event SUBDIVIDER fails to perform any obligations under this Agreement, SUBDIVIDER hereby authorizes CITY to perform such obligations twenty (20) days after mailing written Notice of Default to SUBDIVIDER at the address given below, and agrees to pay the entire cost of such performance by CITY, unless SUBDIVIDER cures such default in such twenty (20) day period, or such additional time as CITY deems reasonable in its sole discretion.
8.3 Costs and Attorney’s Fees. In the event SUBDIVIDER fails to perform any obligations under this Agreement, SUBDIVIDER agrees to pay all costs and expenses reasonably incurred by CITY in securing performance of such obligations, including costs of suit and reasonable attorney’s fees. In the event of any dispute arising out of SUBDIVIDER's performance of its obligations under this Agreement or under any of the Security Instruments referenced herein, the prevailing party in such action, in addition to any other relief which may be granted, shall be entitled to recover its reasonable attorney's fees and costs. Such attorney's fees and cost shall include fees and costs on any appeal, and in addition a party entitled to attorney's fees and costs shall be entitled to all other reasonable costs incurred in investigating such action, taking depositions and discovery, retaining expert witnesses, and all other necessary and related costs with respect to the litigation. All such fees and costs shall be deemed to have accrued on commencement of the action and shall be enforceable whether or not the action is prosecuted to judgment.
9. Non-Liability of Officials and Employees of CITY. No member, official or employee of CITY shall be personally liable to SUBDIVIDER, or any successor in interest, in the event of any default or breach by CITY, or for any amount which may become due from CITY or its successor, or any obligation under the terms of this Agreement. 1834974.1
10. Labor.
10.1 Labor Standards. SUBDIVIDER shall be responsible for causing itself and all contractors and subcontractors constructing or installing any of the Improvements 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 Department of Labor. CITY has advised SUBDIVIDER and SUBDIVIDER acknowledges that said prevailing wage requirements and the prevailing wage provisions of the RHDA apply to construction of the Improvements. Prior to construction of the Improvements CITY will ascertain from the State of California Director of Industrial Relations, the general prevailing rate of per diem wages and the general prevailing rate for legal holiday and overtime work in the locality in which the work is to be performed for each craft or type of work needed to execute this Agreement, and make copies of the same available to SUBDIVIDER.
SUBDIVIDER’s contractor and its subcontractors must be registered with the California Department of Industrial Relations pursuant to Labor Code Section 1725.5 and must provide proof of registration to CITY prior to commencing construction of any Improvements. SUBDIVIDER shall be responsible for its contractors’ compliance in all respects with the Prevailing Wage Law, including the payment of the prevailing wage rates to all the laborers involved, and with California Labor Code Section 1770 et seq., including the keeping of all records required by the provisions of Labor Code Section 1776 and the implementing administrative regulations. SUBDIVIDER shall submit payroll records to the Labor Commissioner pursuant to Labor Code section 1771.4(a)(3) and shall comply with the job site notices posting requirements established by the Labor Commissioner pursuant to Title 8, California Code of Regulations Section 16461(e) or other regulation promulgated pursuant to Labor Code Section 1771.4(a)(2). Pursuant to Labor Code Section 1771.4, the Improvements will be subject to compliance monitoring and enforcement by the California Department of Industrial Relations. CITY shall be a third-party beneficiary of the forgoing covenant with rights to enforce the same as against SUBDIVIDER.
10.2 Non-Discrimination. SUBDIVIDER covenants and agrees that there shall be no discrimination against or segregation of any person, group, or employee due to race, color, creed, religion, sex, marital status, age, handicap, national origin or ancestry, in any action or activity undertaken pursuant to this Agreement.
10.3 Licensed Contractors. SUBDIVIDER shall cause all of the Improvements to be constructed and/or installed by contractors and subcontractors with valid California Contractors’ licenses for the type of work being performed.
11. Change of Subdivider. If SUBDIVIDER ceases to have legal interest in the Project, then a notice to that effect shall be filed with CITY by SUBDIVIDER. The notice shall include the name and address of the new subdivider. SUBDIVIDER shall require as a condition of the transfer of the legal interest in the Project, that the new subdivider shall (1) submit new bonds in accordance with this Agreement (at which time the original 1834974.1
bonds shall be released); (2) submit to CITY a certified copy of the recorded deed referencing the transfer of the legal interest; and (iii) require that, upon transfer, the successor subdivider undertake all of the obligations under this Agreement in lieu and in place of SUBDIVIDER. Thereafter, SUBDIVIDER shall have no further obligations to CITY under this Agreement except for any liability, obligations, acts or omissions incurred prior to such transfer. SUBDIVIDER’s responsibility for such liability, obligations, acts or omissions shall survive until such liability or obligations are fully and finally resolved,
12. General Provisions. It is mutually agreed as follows:
12.1 Assignment or Delegation. Neither CITY nor SUBDIVIDER shall assign this Agreement without the consent of the other. SUBDIVIDER shall not delegate its obligations under this Agreement to another.
12.2 Independent Contractor. It is understood and agreed that, in connection with the performance of SUBDIVIDER’s obligations under this Agreement, SUBDIVIDER, its employees, agents, contractors, and any subcontractors acting on behalf of SUBDIVIDER shall act and be independent contractors and shall not be agents or employees of the CITY, and as independent contractors, shall obtain no rights to retirement benefits, or other benefits which accrue to CITY employees, and SUBDIVIDER, on behalf of itself, its employees, agents, contractors, and any subcontractors acting on behalf of SUBDIVIDER, hereby expressly waives any claim it may have to any such rights.
12.3 Compliance with Law. SUBDIVIDER shall comply with, and require all those acting on SUBDIVIDER’s behalf to comply with, all applicable laws, ordinances, codes, and regulations of the federal, state, and local government.
12.4 Conflict of Interest and Reporting. SUBDIVIDER shall at all times avoid conflict of interest or appearance of conflict of interest in performance of this Agreement.
12.5 Notices. All notices shall be personally delivered or mailed, postage prepaid, to the below-listed address, or to such other address as may be designated by written notice.
These addresses shall be used for delivery of service of process.
If to SUBDIVIDER:
INVESTEL GARDEN RESORTS, LLC
Attn: Weifeng Zhang
12966 Euclid Street, Suite 300
Garden Grove, Ca 992840
If to CITY:
City of Garden Grove
Attention: Public Works Director
11222 Acacia Parkway
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Garden Grove, California 92840
12.6 Licenses, Permits, Fees, and Assessments . At its sole cost and expense, SUBDIVIDER shall obtain such license, permits, and approvals as may be required by law for the performance of SUBDIVIDER’s obligations under this Agreement.
SUBDIVIDER, and not CITY, shall have the sole obligation to pay for any fees, assessments, and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the performance of the obligations required under this Agreement.
12.7 Time of Essence. Time is of the essence in the performance of this Agreement.
12.8 Heirs, Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the heirs, successors and assigns of the Parties, including all successors and assigns to SUBDIVIDER’s right, title, and interest in the property covered by the Project and any portion thereof.
12.9 Corporate Authority. The persons executing this Agreement on behalf of the Parties hereto warrant that they are duly authorized to execute this Agreement on behalf of said Parties and that by so executing this Agreement the parties hereto are formally bound to the provisions of this Agreement.
12.10 Modification. This Agreement constitutes the entire agreement between the Parties.
This Agreement may be modified only by subsequent mutual written agreement executed by CITY and SUBDIVIDER.
12.11 Waiver. All waivers of the provisions of this Agreement must be in writing by the appropriate authorities of the CITY, SUBDIVIDER. SUBDIVIDER agrees that waiver by CITY of any one or more of the conditions of performance under this Agreement shall not be construed as waiver of any other condition of performance under this Agreement.
12.12 California Law. This Agreement shall be construed in accordance with the laws of the State of California. Any action commenced pursuant to this Agreement shall be initiated in the central or main branch of the Orange County Superior Court.
12.13 Interpretation. This Agreement shall be interpreted as though prepared by all Parties.
12.14 Preservation of Agreement. Should any paragraph, clause, provision or word of this Agreement be found invalid or unenforceable, such decision shall affect only the paragraph, clause, provision or word so construed and interpreted, and all remaining provisions shall remain valid and enforceable.
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13. Relationship to RHDA. Nothing in this Agreement is intended by the Parties to, and this Agreement shall not be interpreted to, amend or alter the respective rights and obligations of the Parties pursuant to the RHDA.
14. Mutual Agreement. The Parties hereto do mutually covenant and agree to the full and faithful performance of their respective obligations under this Agreement.
[SIGNATURES ON FOLLOWING PAGES]
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IN WITNESS THEREOF, these parties have executed this Agreement on the day and year shown below.
Date: _______________________________
“CITY”
CITY OF GARDEN GROVE, A
MUNICIPAL CORPORATION
BY: _____________________________
City Manager
ATTEST:
City Clerk
Date: ______________________________
Date: ______________________________
“SUBDIVIDER
”
INVESTEL
GARDEN RESORTS, LLC,
a Delaware limited liability company
By: INVESTEL RESORTS
MANAGEMENT, LLC, a Delaware
limited liability company
Its: Manager
By: _____________________________
Weifeng Zhang
Its: Manager
APPROVED AS TO FORM:
Garden Grove City
Attorney
Date: _______________________________
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INSTRUCTIONS: If SUBDIVIDER is a corporation or limited liability company, the Agreement must be executed in the corporate/LLC name and signed by the President or a Vice-President and the Secretary or Assistant Secretary. If SUBDIVIDER is a limited liability company with designated centralized management (i.e., those that specifically designate in their articles of organization that they will be managed by a manager or managers), the Agreement must be executed in the LLC’s name and signed by at least two managers (or by one manager in the case of an LLC whose articles of organization state that it is managed by only one manager). If SUBDIVIDER is a partnership, it must be signed by all general partners. If SUBDIVIDER is an individual doing business under a fictitious name, it must be signed by all persons having an interest in the business, and the fictitious name must be included.
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EXHIBIT A