Notice of Exemption 2024-71
To: Office of Planning and Research
P.O. Box 3044, Room 212
Sacramento, CA 95812-3044
County Clerk
County of Kings
Kings County Government Center
Hanford, CA 93230
From: City of Hanford
317 North Douty Street
Hanford, CA 93230
Project Title: Conditional Use Permit 0038-24
Project Location – 1208 N. Douty Street (APN 010-107-004)
Project Location – City: Hanford Project Location – County: Kings County
Description of Nature, Purpose and Beneficiaries of Project: Conditional Use Permit No. 0038-24: a request by Blue Door Massage and Spa to locate a massage therapy business in the O-R Office Residential zone district.
Name of Public Agency Approving Project: City of Hanford, Planning Division
Name of Person or Agency Carrying Out Project/Project Applicant: Ayla Tidwell Address: 709 N. Irwin St., Hanford, CA 93230
Phone Number: (559) 587-5571
Exempt Status: (check one)
Ministerial (Sec. 21080(b)(1); 15268);
Declared Emergency (Sec. 21080(b)(3); 15269 (a));
Emergency Project (Sec. 21080(b)(4); 15269(b)(c));
Categorical Exemption: State type and section number: 15301 Existing Facilities Statutory Exemption. State code number:
Reasons why project is exempt:
The City of Hanford determined the project to be exempt from environmental review pursuant to Section 15301 of the California Environmental Quality Act (CEQA) Guidelines. Section 15301 states that Class 1 exemptions consist of the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use.
This project involves the permitting of an existing private structure, involving negligible or no expansion.
Lead Agency
Contact Person: Mark Manha Area Code/ Telephone: (559) 585-2583
Signature: Date: October 8, 2024 Title: Associate Planner
Signed by Lead Agency Date received for filing at OPR:
Signed by Applicant
Tim
&
Deene
Souza
1830
W
Manor
Ave
Visalia,
CA
93291
(559)
730-6100
October
3,
2024
City
of
Hanford-
Planning
Division
317
N
Douty
St
Hanford,
CA
93230
Dear
Planning
Commission
members:
I’m
writing
in
opposition
to
granting
a
conditional
use
permit
(No.
0038-24)
for
a
massage
parlor
at
1208
N
Douty
St.
Iown
apartments
on
W
Cameron
St,
that
have
children
as
residents,
that
are
in
the
300
foot
mailing
radius
of
this
proposed
establishment.
Ihave
1question.
Why
would
a
massage
parlor
be
allowed
anywhere
near
where
children
may
be
playing
in
their
front
yards
or
roaming
in
their
neighborhoods?
Please
connect
with
the
Hanford
Police
Department
and
obtain
information
on
crimes
involving
massage
parlors.
In
California,
massage
parlors
are
commonly
charged
with
soliciting
prostitution
and
engaging
in
acts
of
prostitution.
This
business,
which
could
arguably
be
considered
a
legalized
prostitution
establishment
and
coverup
for
sex
trafficking
and
illegal
immigration,
would
be
sharing
a
fence
WITH
HOMES.
This
is
across
the
street
from
a
school.
This
is
not
just
any
school.
This
is
acontinuation
high
school
that
houses
students
at
risk
of
not
completing
their
high
school
education.
Many
of
these
students
are
at
risk
because
of
poor
choices
they’ve
made
that
has
removed
them
from
the
mainstream
classroom.
This
massage
parlor
is
shoving
another
temptation
of
a
potential
bad
decision
in
their
face,
everyday
they
walk
or
drive
by
it.
SURELY
a
higher
and
better
use
for
this
property
can
be
found
rather
than
a
massage
parlor
and
all
the
“great,
wholesome
activities”
one
provides.
It’s
across
the
street
from
a
school,
with
underage
minors.
Let’s
look
at
the
long
range
planning
of
Hanford.
This
is
anice
residential
area.
We
need
housing
in
Hanford
and
all
over
the
state.
Iam
not
suggesting
that
this
massage
parlor
not
be
allowed
to
locate
in
Hanford,
just
not
in
a
predominately
residential
area.
This
business
is
better
suited
to
a
strip
mall
type
setting
where
the
activities
can
be
monitored.
Please
deny
the
massage
parlor
permit
that
would
share
fences
with
homes
on
W
Cameron
St
in
Hanford.
cLQ,&Q
SJUJ.../L-
Deene
Souza
Hanford
property
owner
(559)
730-6100
15.A.
AGENDA
STAFF REPORT
MEETING DATE: 11/5/2024 AGENDA SECTION: GENERAL BUSINESS
SUBJECT:
Approval of Disposition and Development Agreement and Authorization for the Mayor and City Manager to Execute Necessary Documents for the Sale of the County of Kings Courthouse, 113 Court Street, Hanford, California, to Esteem Land Company LLC (DBA Barrelhouse Brewing)
RECOMMENDATION:
Recommendation: Approval of Disposition and Development Agreement and Authorization for the Mayor and City Manager to Execute Necessary Documents for the Sale of the County of Kings Courthouse, 113 Court Street, Hanford, California
Recommended Motion: Approve the Disposition and Development Agreement and authorize the Mayor and City Manager to execute all necessary documents for the sale of the County of Kings Courthouse located at 113 Court Street, Hanford California BACKGROUND:
History
The City of Hanford currently owns, maintains, and manages the historic Kings County Courthouse, located at 113 Court Street. Originally constructed in 1869, the building was expanded in 1914 to support the growing functions of county government. Until 1978, it served as the primary seat for county government activities, before being listed on the National Register of Historic Places that same year.
Current Status
The Kings County Courthouse is largely unoccupied, with most suites vacant due to required repairs and ADA accessibility upgrades, which the City does not have the funding to do. Presently, only one suite is leased to a salon tenant. To maintain and restore the building, extensive improvements are needed, including:
• Roof restoration and replacement
• Electrical upgrades in five suites and electrical room enhancements • Sewer repairs
• HVAC system replacement
• Flooring replacement and interior refinishing
• Seismic study and structural reinforcements
• Fire suppression system upgrades
Currently, revenue from the building’s occupancy covers only electricity expenses; all other costs, including maintenance and capital upgrades, are subsidized through a loan from the City’s General Fund. A 2023 estimate suggests that up to $10,000,000 in private investment would be required to rehabilitate the courthouse. Given prevailing wage requirements and procurement regulations, the City’s costs would significantly exceed this estimate.
Future of the Building
To determine the most viable path forward, the City evaluated several preservation and funding options:
1. Grant Funding: Grant opportunities for historic preservation are generally limited and often insufficient for large-scale projects. The Department of the Interior's Save America’s Treasures Grant offers a maximum award of $750,000 (with most recipients in 2023 receiving under $400,000) and requires a 1:1 match, which would only partially address the building’s needs.
2. City Financing: Due to the extensive nature of the improvements and budget constraints, financing the restoration directly through the City’s General Fund is not feasible at this time.
3. Public-Private Partnership: The City explored various public-private partnership models to identify one that would support the courthouse’s restoration while minimizing City costs. The most viable option involves a private developer acquiring ownership of the building, with the City retaining specific rights to ensure preservation standards are met.
Partnership Opportunity with Esteem Land Company LLC
In 2022, Esteem Land Company LLC expressed interest in acquiring the courthouse under an agreement that would grant ownership to the developer while ensuring the City’s ability to preserve the building’s historic integrity. This partnership requires the developer to have both the capital and expertise to undertake the restoration, along with a commitment to meet the City’s preservation standards and performance expectations.
Agreement Details
Based on the current condition and anticipated restoration costs, the purchase price has been set at one dollar ($1). Key provisions in the agreement with Esteem Land Company LLC include:
1. Preservation Oversight: Developer’s construction plans, Historic Resources Permit, and land use approvals require City approval to ensure all work aligns with the building’s historic character.
2. Historic Integrity: Improvements must preserve and enhance the building’s historic features, adhering to the Secretary of the Interior’s Standards. Any construction, alteration, or rehabilitation affecting historic elements will require prior consultation and approval from the City via the Historic Resources Permit process.
3. Ongoing Maintenance and Restoration: Developer commits to maintaining the building in accordance with its historic specifications and workmanship comparable to the original construction.
4. Disaster Recovery: If damaged, Developer is obligated to restore the building to historic standards, regardless of insurance availability.
5. Identity Preservation: The building must always be publicly identified as the “County of Kings Courthouse.”
6. City's Right of First Refusal: The City retains the first right of refusal to purchase any portion of the property if offered for sale in the future.
7. Financial Responsibility: Developer assumes all costs related to restoration and improvements, including any cost overruns.
8. Schedule of Performance: Developer must complete construction and renovation work within specified timelines, with extensions subject to City approval.
9. Repurchase Rights: In case of default, the City reserves the right to repurchase the property, including all improvements, if the developer fails to remedy the breach as outlined in the agreement.
The terms outlined in this agreement are designed to safeguard the courthouse’s historic character, provide a pathway for necessary improvements, and ensure that restoration efforts proceed at an acceptable pace.
Possible Next Steps
If the sale of the Courthouse is authorized by the City Council, the developer intends to begin drafting plans and initiating cleanup and maintenance efforts early next year. Major improvements are expected to proceed through 2025 and 2026, with a targeted opening in 2026.
FISCAL IMPACT:
Reduction in expenses associated with maintaining and managing the Courthouse, estimated to be over $100k in annual general fund expenses.
ATTACHMENTS:
1. Disposition and Development Agreement
1 DISPOSITION AND DEVELOPMENT AGREEMENT
By and Between
CITY OF HANFORD
and
Esteem Land Company LLC
for the
COUNTY OF KINGS COURTHOUSE
(113 Court Street, Hanford, California)
October 30, 2024
2 I. SUBJECT OF AGREEMENT. ................................................................................................ 7 A. Purpose of the Agreement. ................................................................................................... 7 B. The Property......................................................................................................................... 8 C. Parties to Agreement. ........................................................................................................... 8
1. City. .................................................................................................................................. 8
2. Developer. ........................................................................................................................ 8
3. Prohibition Against Change in Ownership, Management, and Control of Developer. .... 8
4. Summary of Obligations. ................................................................................................. 9
5. Schedule of Performance. ................................................................................................ 9 II. DISPOSITION OF THE PROPERTY. ................................................................................... 9 A. Purchase and Sale. ............................................................................................................. 10 B. Purchase Price. ................................................................................................................... 10 C. Payment of Purchase Price................................................................................................. 10 D. Possession. ......................................................................................................................... 10 E. Condition of Title to Real Property/Permitted Exceptions. ............................................... 10 F. Title Insurance. .................................................................................................................. 11 G. Feasibility Period. .............................................................................................................. 11
1. Feasibility Period Expiration. ......................................................................................... 11
2. Notice of Approval or Disapproval. ............................................................................... 12
3. Developer’s Obligations Regarding Feasibility Efforts. ................................................ 12 H. Condition of Property. ....................................................................................................... 12
1. AS-IS Purchase. ............................................................................................................. 12
2. Representations and Warranties. .................................................................................... 13
3. Developer’s Reliance on Own Investigation. ................................................................. 13
4. Hazardous Substances. ................................................................................................... 13
5. Developer’s Access to Property. .................................................................................... 14
6. Developer’s Duty to Indemnify...................................................................................... 14 I. Existing Surveys and Reports. ........................................................................................... 14 J. Covenants, Warranties and Representations of City. ......................................................... 15 K. Covenants, Warranties and Representations of Developer. ............................................... 15 L. Survival of Warranties. ...................................................................................................... 16 M. Brokerage Commissions. ................................................................................................... 16 N. Conditions Precedent to City’s Obligations to Perform. ................................................... 16
1. Developer’s Timely Performance. ................................................................................. 16
3 2. Developer’s Representations and Warranties. ............................................................... 16
3. No Termination by Developer........................................................................................ 17 O. Conditions Precedent to Developer’s Obligations to Perform. .......................................... 17
1. City Performance............................................................................................................ 17
2. City Representations and Warranties. ............................................................................ 17
3. No Termination by City. ................................................................................................ 18
4. Issuance of Title Policy. ................................................................................................. 18
5. Financing. ........................................................................ Error! Bookmark not defined.
6. City’s Satisfaction of Legal Requirements..................................................................... 19 P. Establishment of Escrow.................................................................................................... 19 Q. Deposits into Escrow. ........................................................................................................ 19
1. Grant Deed. .................................................................................................................... 19
2. Agreement. ..................................................................................................................... 19
3. Funds. ............................................................................................................................. 19
4. Additional Documents.................................................................................................... 19 R. Taxes. ................................................................................................................................. 19 S. Title Insurance. .................................................................................................................. 20 T. Costs and Expenses. ......................................................................................................... 20
1. Title Policy Premium. .................................................................................................... 20
2. Taxes and Costs. ............................................................................................................. 20
3. Recording Fees. .............................................................................................................. 20
4. Escrow Fees. All Escrow fees shall be paid by Developer. .......................................... 20 U. Closing Date....................................................................................................................... 20 V. Procedure for Closing. ....................................................................................................... 21
1. Payment of Claims. ........................................................................................................ 21
2. Payment of Closing Costs. ............................................................................................. 21
3. Record Grant Deed. ........................................................................................................ 21
4. Record Agreement.......................................................................................................... 21
5. Disburse Funds to City. .................................................................................................. 21 W. Failure to Close. ................................................................................................................. 21 X. Indemnification of Escrow Holder..................................................................................... 22 III. IMPROVEMENT OF PROPERTY. ..................................................................................... 22 A. Improvement of Property by Developer. ........................................................................... 22
1. Scope of Improvement Work. ........................................................................................ 22
4 2. Construction Documents. ............................................................................................... 22
3. Construction Contractor. ................................................................................................ 23
4. Land Use Approvals. ...................................................................................................... 23
5. Standards for Improvement Work. ................................................................................. 24 B. Indemnification and Insurance. .......................................................................................... 24
1. Developer’s Duty to Indemnify City. ............................................................................. 24
2. Developer Insurance. ...................................................................................................... 24 C. Local, State, and Federal Laws. ......................................................................................... 25
1. Adherence to Laws. ........................................................................................................ 25
2. City’s Exercise of Police Powers. .................................................................................. 26 D. City and Other Governmental Permits. .............................................................................. 26
1. Permits. ........................................................................................................................... 26
2. Fees and Charges. ........................................................................................................... 26
3. City’s Duty to Process Applications. ............................................................................. 26 E. Rights of Access and Inspection. ....................................................................................... 26
1. City’s Right of Access.................................................................................................... 26
2. City Inspections. ............................................................................................................. 27 F. Liens and Stop Notices. ..................................................................................................... 27
1. Restriction Regarding Liens and Stop Notices. ............................................................. 27
2. Failure to Address Liens and Stop Notices. ................................................................... 27 G. Prohibition Against Transfer.............................................................................................. 27
1. Assignment Prohibition. ................................................................................................. 27
2. Consequences of Prohibited Assignment. ...................................................................... 28
3. City’s Approval of Assignee. ......................................................................................... 28
4. Developer Not Relieved of Responsibilities. ................................................................. 28
5. Allowed Transfers. ......................................................................................................... 29 H. Security Financing: Rights of Holders. ............................................................................. 29
1. No Encumbrances Except Mortgages, Deeds of Trust. ................................................. 29
2. Holder Not Obligated to Construct Improvements. ....................................................... 29
3. Notice of Default to Security Interest Holders; Right to Cure. ...................................... 29
4. Failure of Holder to Complete Improvements. .............................................................. 30
5. Right of City to Cure Mortgage, Deed of Trust, or Other Security Interest Default. .... 31 I. Certificate of Compliance. ................................................................................................. 31
1. City’s Duty to Provide Certificate. ................................................................................. 31
5 2. City’s Non-Issuance of Certificate. ................................................................................ 31
3. Mediation Regarding Non-Issuance of Certificate......................................................... 31
4. Limited Nature of Certificate. ........................................................................................ 32 J. Construction Signage and Project Ceremonies. ................................................................. 32 IV. USE OF THE PROPERTY. .................................................................................................. 32 A. Uses. ................................................................................................................................... 32
1. Developer Covenants - Generally. ................................................................................. 32 B. Effect and Duration of Covenants; Covenants Run with the Land. ................................... 33
1. Covenants Binding. ........................................................................................................ 33
2. Covenants Survive Transfer. .......................................................................................... 33
3. Covenants Run with the Land. ....................................................................................... 33
4. Recording of Agreement. ............................................................................................... 34 C. Effect of Violation of Terms of Agreement. ...................................................................... 34 V. RIGHTS OF FIRST REFUSAL. ........................................................................................... 34 A. Right of Refusal – Generally. ............................................................................................ 36 B. Notice to Non-Transferring Party. ..................................................................................... 36 C. Waiver of Right of First Refusal. ....................................................................................... 36 D. Terms of Purchase.............................................................................................................. 36 VI. DEFAULTS, REMEDIES, AND TERMINATION. ............................................................ 37 A. Defaults – Generally. ......................................................................................................... 37
1. Developer Default. ......................................................................................................... 37
2. City Default. ................................................................................................................... 38
3. Notice of Default. ........................................................................................................... 38
4. No Waiver of Rights or Remedies. ................................................................................ 38 B. Remedies. ........................................................................................................................... 39
1. Institution of Legal or Equitable Action. ....................................................................... 39
2. Termination. ................................................................................................................... 39
3. City Repurchase. ............................................................................................................ 39
4. Rights and Remedies Cumulative and Non-Exclusive. ................................................. 40
5. Attorney’s Fees. .............................................................. Error! Bookmark not defined.
VII. GENERAL PROVISIONS. ................................................................................................... 41 A. Notices. .............................................................................................................................. 41 B. Conflicts of Interest............................................................................................................ 41 C. Warranty Against Payment of Consideration for Agreement. ........................................... 41
6 D. Nonliability of City Officials and Employees. .................................................................. 41 E. Enforced Delay; Extension of Time of Performance. ........................................................ 41 F. Sole and Only Agreement. ................................................................................................. 42 G. Further Action. ................................................................................................................... 42 H. Waiver. ............................................................................................................................... 42 I. Choice of Law. ................................................................................................................... 42 J. Headings; Interpretation..................................................................................................... 43 K. Time. .................................................................................................................................. 43 L. Counterparts. ...................................................................................................................... 44 M. Attorneys’ Fees. ................................................................................................................. 44 N. Relationship. ...................................................................................................................... 44
7 DISPOSITION AND DEVELOPMENT AGREEMENT
* * * * *
This Disposition and Development Agreement (“ Agreement”) is made and entered into on the _____ day of _______________, 2024 (“Effective Date”), by and between the CITY OF HANFORD, a municipal corporation (“City”), and Esteem Land Company LLC (“Developer”), as it pertains to a portion of that real property located at 119 Court Street, Hanford, California.
City and Developer are sometimes collectively referred to herein as “Parties” and individually as a “Party.”
RECITALS
WHEREAS, the former County of Kings Courthouse (“Courthouse”) is located at the City-owned property described above; and
WHEREAS, the Courthouse is listed on the national Register of Historic Places; and
WHEREAS, the Courthouse is largely vacant and is in need of significant improvements; and
WHEREAS, it is Developer’s desire to acquire that portion of the City- owned property (“Property”), including, the Courthouse and surrounding grounds , that is more particularly described in the attached Exhibit “A,” which is incorporated herein by reference, and all improvements, facilities, rights, easements, entitlements and privileges appurtenant to the Property, excepting any facilities that may pass through the Property and which serve other City- owned property; and
WHEREAS, it is Developer’s intent that, following its acquisition of the Property, it will improve the Courthouse and the surrounding grounds to make it a premier mixed-use destination in Downtown Hanford;
WHEREAS, City is willing to sell the Property to Developer on explicit conditions, including, without limitation, that Developer improve the Property in accordance with this Agreement so that it is a premier mixed-use destination.
NOW THEREFORE, CITY AND DEVELOPER AGREE AS FOLLOWS:
I. SUBJECT OF AGREEMENT.
A. Purpose of the Agreement.
The purposes of this Agreement are: (i) transfer ownership of the Property from City to Developer; and (ii) timely rehabilitation of the Property . The development , restoration, rehabilitation, and improvement of the Property pursuant to this Agreement (“ Project”) are
8 generally described in the “ Scope of Development ,” which attached hereto as Exhibit “B” and incorporated herein by reference, and the fulfillment generally of the Agreement, are in the vital and best interest of City and the health, safety, morals, and welfare of its residents.
City and Developer agree that time is of the essence and that completion of the Project at the earliest possible date will result in an enhancement of the quality of life of City’s present and future residents which otherwise might not occur to the same degree or which might not occur at all, or which might occur only at a substantially later date in the absence of this Agreement. Hence, the provisions of this Agreement are acknowledged to be to the mutual benefit of Developer and City. Development of the Property will address dilapidated vacant commercial space and the rehabilitation and reuse of the Property, thereby preventing further deterioration.
B. The Property.
The Property consists of certain real property owned by the City which is to be conveyed to Developer by the City pursuant to this Agreement. The Property is approximately ________________ (________) square feet in area and includes the Courthouse and surrounding grounds and all rights, easements, entitlements and privileges appurtenant to the Property, excepting any facilities that may pass through the Property and which serve other City- owned property.
C. Parties to Agreement.
1. City.
City is a public body, corporate and politic, exercising government functions and powers under the laws of the State of California.
2. Developer.
The principal office of Developer is Esteem Land Company LLC 22841 Grangeville Blvd.
Lemoore, Ca. 93245
3. Prohibition Against Change in Ownership, Management, and Control of Developer.
Developer recognizes that, in view of:
a. The importance of the Project to the general welfare of the community; and
b. For purposes of this Agreement, the qualifications and identity of Developer and its principals are of particular concern to the community and City, and a change in control or majority ownership of Developer is , for practical purposes, a transfer or disposition of the property then owned by Developer. Developer further recognizes that it is because of those qualifications and identity that City is entering into this Agreement with Developer. Prior to the
9 issuance of a Certificate of Compliance, n o voluntary or involuntary successor in interest of Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein.
For the reason cited above, Developer represents and agrees for itself and any successor in interest that prior to the issuance of a Certificate of Compliance by City pursuant to this Agreement, Developer shall not assign all or any part of this Agreement without the prior written approval of City, which may be withheld at City’s sole discretion. Pursuant to the terms of this Agreement, the City may terminate this Agreement and/or pursue any other remedies identified herein if there is any significant chang e (voluntary or involuntary) in Developer prior to the completion of the development of the Property, as evidenced by the issuance by City of a Certificate of Compliance.
4. Summary of Obligations.
a. Developer is subject to numerous obligations hereunder, including, without limitation, the following: (i) to prepare, complete and submit to City for its approval Construction Documents as defined herein; (ii) to submit to City a Project Budget (defined below), updates to the Project Budget, and evidence of financing as required herein and (iii) to commence and complete construction of the Project in the manner and within the times specified in the Schedule of Performance (defined below); (iv) to diligently prosecute and complete leasing of all rentable space in the Courthouse; and (v) and following the completion of the Project, to maintain and preserve the Property as required herein.
b. City is subject to numerous obligations hereunder, including, without limitation, the following: (i) subject to the terms and conditions contained herein, to convey the Property to the Developer; (ii) to timely review and approve or disapprove, pursuant to the terms of this Agreement, matters or items submitted by Developer for approval hereunder ; and (iii) to timely issue the Certificate of Compliance to Developer if applicable requirements have been satisfied.
c. It is expressly understood and acknowledged that any obligation of Developer or City referred to in this Agreement shall be subject to the satisfaction of any conditions precedent to such performance as set forth in this Agreement.
5. Schedule of Performance.
The Parties shall have the obligations identified in the “Schedule of Performance,” attached to this Agreement as Exhibit “C,” which is incorporated herein by reference. The Parties further acknowledge that each has obligations under this Agreement that are not shown in the Schedule of Performance and that the omission or partial omission of these obligations from the Schedule of Performance shall in no way relieve the P arties of their respective obligations nor modify those obligations in any manner.
II. DISPOSITION OF THE PROPERTY.
10 A. Purchase and Sale.
Subject to all of the terms, conditions, and provisions of this Agreement and for the consideration set forth herein, City agrees to sell to Developer and Developer agrees to buy at Closing, as defined in this Agreement, the Property. The sale and purchase of the Property shal l be consummated by means of an escrow (“Escrow”) opened at the offices of STEWART TITLE COMPANY (“Escrow Holder”) located at 329 West 8
th Street, Ste. 105, Hanford, California.
This Agreement shall constitute the instructions for the Escrow upon acceptance by Escrow Holder. The Parties shall also execute such additional escrow instructions as may be required by the Escrow Holder, but the same shall be consistent with this Agreement and not modify the terms hereof unless specifically approved by the Parties, such approval to be given or withheld in their sole discretion.
B. Purchase Price.
The purchase price for the Property shall be One Dollar ($1.00) (“Purchase Price”).
C. Payment of Purchase Price.
Upon execution of this Agreement hereof by both Parties, Developer shall deposit (“Deposit”) the Purchase Price with Escrow Holder.
D. Possession.
City shall deliver possession of the Property to Developer at Closing.
E. Condition of Title to Property/Permitted Exceptions.
It shall be a condition to the Close of Escrow, and a covenant of City, that title to the Property be conveyed to Developer by Grant Deed subject only to the following permitted exceptions of title (the “Permitted Exceptions”):
1. A lien to secure payment of real estate taxes, not yet due or payable;
2. The lien of supplemental taxes, if any, assessed under California law. City shall be responsible for, and hereby indemnifies Developer and the Property against, any supplemental taxes assessed, to the extent that such taxes relate to events (including, without limitation, any changes in ownership and/or new construction) occurring prior to the Close of Escrow;
3. Exceptions which are disclosed by the Title Report and approved in writing by Developer.
Promptly upon the opening of Escrow, City shall cause Escrow Holder to provide Developer with a preliminary title report for the Property (“Title Report”). Not later than seven (7) calendar days following receipt of the Title Report (the “Title Review Date”), Developer shall deliver to City and Escrow Holder written notice of Developer's disapproval, or conditional
11 approval, of the title matters shown in the Title Report ("Buyer's Title Notice"). The failure of Developer to give Developer's Title Notice on or before the Title Review Date shall be deemed to constitute Developer's disapproval of the condition of title. If Developer disapproves, or conditionally approves, any matters shown in the Title Report ("Non-Permitted Exceptions"), City may, within five (5) calendar days after its receipt of Developer's Title Notice, elect to eliminate from title, to Developer's satisfaction, the Non-Permitted Exceptions, and City shall give Developer and Escrow Holder written notice ("City's Title Notice") of the Non-Permitted Exceptions which City covenants and agrees to eliminate from title as of or before the Closing Date. If City fails to deliver City's Title Notice within the five (5) calendar day period, or elects not to remove all Non-Permitted Exceptions prior to the Closing Date, then Developer shall have the right, by a writing delivered to City and Escrow Holder on or before the expiration of the Feasibility Period (defined herein), to:
a. Waive its prior disapproval, in which event the Non-Permitted Exceptions shall be deemed approved; or
b. Terminate this Agreement and the rights and obligations of the parties hereunder shall terminate.
Notwithstanding anything to the contrary herein, if Developer fails to waive its prior disapproval in writing prior to the end of the Feasibility Period, Developer shall be deemed to have disapproved the condition of title and the parties shall have no further rights, duties or obligations hereunder except those that expressly survive termination as provided herein.
Permitted Exceptions shall not include any encumbrances (other than non-delinquent bonds and assessments) reflected by deeds of trust or mortgages, mechanics liens, or monetary encumbrances, which, may at City’s sole discretion, be paid by City and removed from title on or before Close of Escrow.
F. Title Insurance.
At Closing, and as a condition to Developer’s obligation to purchase and City’s obligation to sell the Real Property, Escrow Holder shall commit to issue its standard California Land Title Association standard owner’s policy (provided, however, Developer may elect to obtain extended coverage if Developer so notifies Escrow Holder prior to Closing and such election does not delay the close of Escrow) showing title to the Property vested in Developer, subject only to the Permitted Exceptions as determined in accordance with the preceding Subsection E. (“Title Policy”). The premium for the Title Policy shall be paid as set forth hereinbelow.
G. Feasibility Period.
1. Feasibility Period Expiration.
12 Except as otherwise provided, commencing on the Effective Date and terminating at 5:00 p.m. on the ninetieth (90th) calendar day following the Effective Date (“Feasibility Period ”), Developer shall undertake, at Developer’s expense, including (but not limited to): (i) an inspection of the Property; (ii) a review of the physical condition of the Property, including (but not limited to), inspection and examination of soils, environm ental factors, Hazardous Substances (defined below), if any, and archeological information relating to the Property; and (iii) a review and investigation of the effect of any zoning, maps, permits, reports, engineering data, regulations, ordinances and law affecting the Property.
2. Notice of Approval or Disapproval.
If Developer, in its sole and absolute discretion, and for any reason, approves all, or disapproves the results of any aspect of Developer’s inspection and review, Developer shall give, prior to 5:00 p.m. on the last day of the Feasibility Period, either ( i) its notice of approval, or (ii) its notice of disapproval and termination of this Agreement. If the transaction is disapproved or deemed disapproved, all Parties hereto shall be relieved of all further obligations or liabilities hereunder except as is otherwise specifically provided in herein . If Developer fails to notify City properly and timely of Developer’s approval of this transaction, Developer shall be deemed to be satisfied with the results of the inspection. If Escrow terminates pursuant to this subsection, the Deposit will be released by Escrow Holder to Developer, and Developer will provide to City at no charge, upon cancellation of Escrow, all reports and material regarding the Property that Developer generates or are generated on Developer’s behalf.
3. Developer’s Obligations Regarding Feasibility Efforts.
Developer shall, prior to Closing, indemnify, defend and hold City and City’s officials, officers, employees, representatives and agents and the Property harmless from and against any and all loss, cost, damage, expense, claim or liability, including personal injury, loss of life and/or property damage incurred by: (i) Developer or Developer’s shareholders, directors , officers, employees, representatives, and agents while on or about the Property, which is/are caused by the Property’s condition; or (ii) by any person or entity as a result of the acts or omissions of Developer or its shareholders, directors, officers, employees, representatives, or agents in performing any inspection and/or testing activity on or about the Property. Developer shall promptly pay all costs, fees and expenses incurred as a result of or associated with such inspection work done or caused to be done on the Property as permitted by this s ection. Developer shall keep the Property free from any and all mechanics or similar liens or charges resulting from such inspection work. During the term of this Agreement, Developer shall satisfy the insurance requirements identified in the attached Exhibit “D,” which is incorporated herein by reference.
H. Condition of Property.
Except as otherwise stated in this Agreement:
1. AS-IS Purchase.
13 Developer expressly acknowledges that Developer is buying the Property in an “AS IS AND WHERE AS” condition, and that it has not relied on any warranties, promises, understandings or representations, express or implied, of City or any employee, agent or representative of City, or any document relating to the Property, except as are specifically set forth in this Agreement. Developer acknowledges that any and all environmental assessments, engineering studies and other information of any type that Developer has received or may receive from City or its agents are furnished on the express condition that Developer shall make an independent verification of the accuracy of any and all such information, all such information being furnished without any warranty whatsoever.
2. Representations and Warranties.
Except as otherwise stated herein , Developer acknowledges and agrees that neither City nor any employee, agent or representative of City has made any representation or warranty to Developer concerning the Property, including, without limitation, the suitability of the Property for Developer’s intended use or its compliance with any statutes, ordinances, rules or regulations.
Developer shall perform and rely solely upon its own independent investigation concerning the Property and the Property’s compliance with any applicable law. Developer acknowledges that it is acquiring the Property subject to all existing laws, ordinances, rules and regulations, and that neither City nor any of City’s representatives, agents or employees have made any warranties, representations or statements regarding any laws, ordinances, rules and regulations of any governmental or quasi-governmental body, entity, district or agency having authority with respect to the use, condition or occupancy of the Property.
3. Developer’s Reliance on Own Investigation.
Developer shall perform and rely solely upon its own investigation concerning Developer’s intended use of the Property, the Property’s fitness therefore, and the permissibility of such intended use under applicable statutes, ordinances, rules and regulations.
4. Hazardous Substances.
(a) “Hazardous Substances,” as such term is used in this Agreement, shall include, without limitation, any flammables, explosives, radioactive materials, asbestos, lead, polychlorinated biphenyls, chemicals known to cause cancer or reproductive toxicity, pollutants, contaminants, hazardous wastes, toxic substances or related materials of any kind.
(b) After delivery of title and possession of the Property to Developer, Developer agrees to perform and be solely responsible for the clean- up of any Hazardous Substances on, in, under or within the Property as may be required under law or by a government agency, including City, having jurisdiction over the Hazardous Substances, and to comply with all related provisions of the Scope of Development, at the sole cost, risk, and expense of Developer.
After delivery and title and possession of the Property to Developer , Developer shall assume responsibility for the removal, cleanup and/or remediation for any pre -existing Hazardous Substances on the Property.
14 (c) After delivery of title and possession of the Property to Developer, Developer shall defend, indemnify and hold harmless the City, and its officers, agents, employees, contractors, and consultants (“City Parties”) from any claims, liability, injury, damages, costs and expenses (including, without limiting the generality of the foregoing, the cost of any required clean-up of Hazardous Substances, and the cost of attorneys’ fees) which may be sustained as the result of the presence or clean-up of Hazardous Substances on, in or under the Property and which occurred after delivery of title and possession of the Property to Developer.
5. Developer’s Access to Property.
Prior to the conveyance of title to the Property, representatives of the Developer shall have the right of access to the Property at all reasonable times for the purpose of obtaining data and making surveys and tests necessary to determine the suitability of the Property (including, without limitation, reviews relating to Hazardous Substances) and to carry out this Agreement. The Developer shall indemnify the City and hold the City harmless for any injury or damages arising out of any activity pursuant to this Section, and Developer shall satisfy the insurance requirements identified in the attached Exhibit “D.”
6. Developer’s Duty to Indemnify.
Except as expressly set forth in this Agreement , Developer will indemnify, defend, and will hold City harmless and hereby waives, releases, remises, acquits and forever discharges City and the City Parties of and from any and all suits, causes of action, legal, equitable or administrative proceedings, c laims, demands, actual damages, punitive damages, losses, costs, liabilities, interest, attorneys’ fees and expenses of whatever kind and nature, in law or in equity, known or unknown, arising on the date of Closing or thereafter, and arising out of or in any way connected with, directly or indirectly, or based upon or arising out of the physical or environmental condition, status, quality, nature, or state of the Property existing at and after Closing. It is the intention of this Agreement that any and all responsibilities and obligations of City to Developer, and any and all rights or claims of Developer, its successors and assigns and affiliated entities, with respect to, or as against City arising by virtue of, the physical or environmental condition of the Real Property are by this release provision declared to be, from and after Closing, null and void and of no present or future effect as to such parties. With respect to the matters released by Developer pursuant to this subsection, Developer waives the benefits of Section 1542 of the Civil Code of the State of California, which provides as follows:
“A general release does not extend to claims which the creditor does not know or suspect to exist in his or her favor at the time of executing the release, which if known by him or her must have materially affected his or her settlement with the debtor.”
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Developer Initials
I. Existing Surveys and Reports.
15 Within ten (10) calendar days after City’s execution of this Agreement, City shall furnish Developer with copies of all existing surveys, soil reports, engineering studies, environmental audits or reports, site plans, and other information in City’s possession pertaining to the Property.
J. Covenants, Warranties and Representations of City.
City hereby makes the following covenants, representations, and warranties:
1. Except as otherwise disclosed herein, City’s execution of this Agreement and performance of its obligations hereunder will not violate any agreement, option, covenant, condition, obligation or undertaking of City.
2. City is not a “foreign person” as defined in Section 1445(f) of the Internal Revenue Code of 1986, as amended. At Closing, City shall provide Developer Affidavits of Non- Foreign Status made under penalty of perjury, if required by Escrow Holder.
3. Except as otherwise disclosed herein, there are no liens on title or actions, suits, or proceedings of any kind or nature whatsoever, legal or equitable, pending or to the best of City’s actual knowledge, threatened by or against City, or the Property, and relating to or arising out of the ownership, management, or operation of the Property, in any court or before or by any federal, state, county or municipal department, commission, board, bureau, agency, or other governmental instrumentality.
4. Portions of the Property are leased to third parties, and the City’s rights to said leases shall be assigned to Developer at the Closing. City will provide Developer with true and correct copies of existing leases within fifteen (15) calendar days of the Parties’ execution of this Agreement. No lessees under any of the existing leases are presently in breach nor have any had statutory 3- Day Notices served upon them during the term of their leases. A ny security deposits collected by the City under the leases shall be transferred to the Developer at Closing.
5. Outdoor events held by Developer or Developer’s tenants on the Property, including events utilizing amplified music , shall be subject to and must satisfy then- current City permitting requirements.
6. City shall notify Developer immediately if City becomes aware of any new information or material change concerning the Property that affects the representations and warranties of City under this Agreement.
K. Covenants, Warranties and Representations of Developer.
Developer hereby makes the following covenants, representations, and warranties:
1. Developer has the authority to enter into this Agreement, purchase the Property, and to otherwise perform as set forth herein. The person executing this Agreement on behalf of Developer has the full legal authority and is duly authorized to sign this Agree ment on behalf of Developer and to bind Developer to all of the terms and conditions of this Agreement.
16 2. Developer’s execution of this Agreement and performance of its obligations hereunder will not violate any agreement, option, covenant, condition, obligation or undertaking of Developer.
3. There are no actions, suits, or proceedings of any kind or nature whatsoever, legal or equitable, pending or, to the best of Developer’s actual knowledge, threatened against Developer, in any court or before or by any federal, state, county or municipal department, commission, board, bureau, agency, or other governmental instrumentality seeking to challenge Developer’s ability to purchase the Property.
L. Survival of Warranties.
The satisfaction, truth, accuracy and completeness of each of the representations, warranties and covenants of Developer and City contained in this Section II., as of the date hereof and as of Closing, shall constitute a condition precedent to the obligations of City and Developer, respectively, hereunder. All representations, warranties, covenants, obligations, responsibilities and agreements set forth in this Section II. shall survive Closing, and City and Developer each agree to indemnify, defend and hold the other harmless from any claim, demand, liability, loss or cost (including without limitation, reasonable attorneys’ fees and costs) which the other may sustain arising out of any breach of and provision of this Subsection L.
M. Brokerage Commissions.
Developer and City each represents and warrants to the other that it has not engaged the services of any real estate broker, salesperson, agent , or finder, nor done any other act nor made any statement, promise or undertaking which would result in the imposition of liability for the payment of any real estate brokerage commission, finder’s fee or otherwise in connection with the transaction described in this Agreement. In the event that any person or entity perfects a claim for a brokerage commission, finder’s fee or otherwise, based upon any agreement, statement or act, the Party through whom such person or entity makes such claim shall be responsible therefor and shall defend, indemnify and hold the other Party and the Property harmless from and against such claim and all loss, costs and expense associated therewith, including attorneys’ fees.
N. Conditions Precedent to City’s Obligations to Perform.
City’s obligation to perform as set forth in this Section II. is hereby expressly conditioned on satisfaction of each and every one of the following conditions precedent:
1. Developer’s Timely Performance.
Developer shall have timely performed each of the acts to be performed by it hereunder.
2. Developer’s Representations and Warranties.
Each of Developer’s representations and warranties set forth herein shall be true at Closing as if affirmatively made at that time.
17 3. No Termination by Developer.
Developer shall not have timely exercised any right set forth in this Agreement to cancel the Escrow or terminate this Agreement.
4. Affordability Covenant.
In accordance with Government Code Section 54233, a Covenant must be recorded against the Property at Closing stating that, if ten (10) or more residential units are developed on the Real Property, not less than fifteen percent (15%) of the total number of residential units developed shall be sold or rented at affordable housing cost, as defined in Section 50052.5 of the Health and Safety Code, or affordable rent, as defined in Section 50053 of the Health and Safety Code, to lower income households, as defined in Section 50079.5 of the Health and Safety Code and that rental units shall remain affordable to, and occupied by, lower income households for a period of at least fifty -five (55) years for rental housing and forty- five (45) years for ownership housing. The initial occupants of all ownership units shall be lower income households, and the units shall be subject to an equity sharing agreement consistent with the provisions of paragraph (2) of subdivision (c) of Government Code Section 65915.
5. State Housing and Community Development Approval.
In accordance with the Surplus Land Act (California Government §§ 54220- 24234), the California Department of Housing and Community Development must issue written confirmation that: (i) the City satisfied the requirements of the Surplus Land Act with respe ct to sale of the Property; and (ii) the City is permitted to sell the Property pursuant to the terms of this Agreement.
O. Conditions Precedent to Developer’s Obligations to Perform.
Developer’s obligation to perform as set forth herein is hereby expressly conditioned on satisfaction of each and every one of the following conditions precedents:
1. City Performance.
City shall have timely performed each of the acts to be performed by it hereunder.
2. Necessary City Approvals.
City shall have approved in writing the Design Development Drawings, the Construction Documents, Historic Resources Permit and all Land Use Approvals for the Project.
Developer acknowledges that City will approve the Construction Documents and Historic Resources Permit and grant Land Use Approvals only if they are consistent applicable legal authority, including, without limitation, building codes and the Hanford Municipal Code, and satisfy the requirements thereof.
3. State Housing and Community Development Approval.
18 California Department of Housing and Community Development must issue written approval of sale of Property to Developer.
4. City Representations and Warranties.
Each of City’s representations and warranties set forth herein shall be true at Closing as if affirmatively made at that time.
5. No Termination by City.
City shall not have timely exercised any right set forth in this Agreement to cancel the Escrow or terminate this Agreement.
6. Issuance of Title Policy.
Escrow Holder is committed to issue the Title Policy as set forth herein.
7. Financing.
a. Developer shall have obtained a loan commitment from an institutional lender on loan terms acceptable to Developer to finance construction work required under the Scope of Development. The specific manner and terms of financing of the Project shall be determined by Developer. At least thirty (30) calendar days prior to Closing, Developer shall submit to City for its review a budget detailing all estimated costs for the Project, including, but not limited to, construction permitting and financing costs and a reasonable contingency fund (“Project Budget”) and submit to the City for its approval a budget detailing all estimated costs for the Courthouse Improvements including, but not limited to, construction permitting and financing costs and a reasonable contingency fund and evidence of financing for the costs completion of the Courthouse Improvements. The Project Budget is advisory only. If Developer is able to complete the Project for an amount less than what is stated in the Project Budget, it shall have no effect on the enforceability of this Agreement or Developer’s rights hereunder.
b. All submission of evidence of financing must be consistent with the Project Budget and sufficient to assure City that adequate funds are available to complete the Project.
c. Acceptable evidence of financing shall include: (i) an unconditional, firm and enforceable commitment by a recognized institutional lender, subject only to routine non- discretionary conditions, or other conditions approved by the City; or (ii) a certified financial statement, or other financial statement or form of financial confirmation, in such form reasonably satisfactory to the City. Other evidence may be accepted based on the reasonable discretion of the City.
d. City shall not be required to subordinate this Agreement to any lender’s security interests, including, without limitation, Deeds of Trust. Developer acknowledges that City shall execute this Agreement only under the explicit condition that this Agreement shall be recorded in first (1 st) position against the Property at Closing, and the City’s rights hereunder
19 shall not subordinated under any circumstances.
8. City’s Satisfaction of Legal Requirements.
City has satisfied all legal requirements for the sale of the Property in order to grant clear title to Developer, subject to those conditions and Permitted Exceptions approved by Developer.
P. Establishment of Escrow.
Upon execution of this Agreement by the Parties, a true and correct copy of this Agreement shall be deposited with Escrow Holder. The general provisions of Escrow Holder’s escrow instructions shall not impose any additional obligations or liabilities on the Parties. If any of the general provisions conflict with the provisions of this Agreement, the provisions of this Agreement shall control.
Q. Deposits into Escrow.
The Parties shall make the following deposits into Escrow at or prior to Closing:
1. Grant Deed.
City shall deposit an executed and acknowledged original Grant Deed conveying good and marketable title to the Property, subject to all Permitted Exceptions.
2. Agreement.
The Parties will deposit a true and correct copy of this Agreement.
3. Funds.
Developer shall deposit all funds when and as required hereby (including without limitation, amounts necessary to pay all closing costs), and such other amounts as Developer has agreed to pay under this Agreement, or as required by Escrow Holder, and a preliminary change of ownership report for Kings County.
4. Additional Documents.
Both Parties shall execute and deliver such additional documents as Escrow Holder reasonably may deem necessary in order to effectuate the transaction set forth in this Agreement and to close the Escrow, including but not limited to an Assignment of Leases.
R. Taxes.
City is a tax-exempt entity and proration of real property taxes is unnecessary. Developer shall pay any supplemental taxes assessed pursuant to Chapter 3.5 (Section 75) of the California Revenue and Taxation Code resulting from the sale of the Property to Developer. Escrow Holder
20 is not responsible for utility or insurance costs and premiums, all of which shall be prorated outside of Escrow by the Parties.
S. Title Insurance.
At Closing, Escrow Holder shall issue, effective as of that date, the Title Policy described hereinabove.
T. Costs and Expenses.
Closing costs shall be borne by the Parties as follows:
1. Title Policy Premium.
The Title Policy premium and any endorsements desired by Developer shall be paid by Developer.
2. Taxes and Costs.
Documentary transfer taxes and costs of preparing and recording the Grant Deed shall be paid by Developer.
3. Recording Fees.
All recording fees shall be paid by Developer.
4. Escrow Fees. All Escrow fees shall be paid by Developer.
All other costs of closing, including, without limitation, filing fees, other recording fees and otherwise, shall be paid by Developer . Each Party shall bear its own legal fees and costs associated with the preparation of this Agreement. Developer shall deposit additional funds into Escrow in an amount equal to its share of the closing costs as determined by Escrow Holder.
Escrow Hold er is hereby authorized to withhold City’s share of the closing costs from funds otherwise distributable to City.
U. Closing Date.
Unless otherwise extended by the Parties in writing or as specified herein, the closing of Escrow for the Real Property shall occur on or befor e the date that is two hundred seventy (270) calendar days from the Effective Date, subject to the prior satisfaction (or waiver) of any conditions precedent to Closing (“Closing”). The date on which Closing occurs is referred to herein as the “Closing Date.” If the Escrow is not in a condition to close by the Closing Date, Escrow Holder, except as otherwise provided herein, shall cancel the Escrow upon receipt of written notice from either Party of such cancellation; provided, however, that if Escrow is not in a condition to close by the Closing Date due to the failure of only one (1) Party to perform, and such failure to perform constitutes a default under this Agreement, and the other Party has fully performed all of the obligations required of it in order to close the Escrow, only the performing Party shall be entitled
21 to provide Escrow Holder with written notice of cancellation. In the absence of any written notice of cancellation, Escrow Holder shall proceed to close the Escrow as soon as possible. Time is of the essence in performance of this Agreement.
V. Procedure for Closing.
Escrow Holder shall close the Escrow by doing the following:
1. Payment of Claims.
Pay from funds deposited by City all claims, demands and liens necessary to place title to the Property in the condition set forth in Subsection E. above.
2. Payment of Closing Costs.
Pay all Closing costs from funds deposited by Developer (other than the Purchase Price).
3. Record Grant Deed.
Record City’s Grant Deed and this Agreement in the Official Records of Kings County and direct the County Recorder to affix the transfer tax after recording, return the recorded Grant Deed to Developer with a conformed copy to City, and file Developer’s preliminary change of ownership report in Kings County, as appropriate.
4. Record Agreement.
Record this Agreement in the Official Records of Kings County and return the recorded Agreement to City with a conformed copy to Developer.
5. Disburse Funds to City.
Unless otherwise instructed by City, unilaterally deliver the remaining funds held in Escrow, less payments authorized hereunder, to City by Escrow Holder’s check.
W. Failure to Close.
If Escrow shall fail to close as a result of Developer’s breach of any of its obligations hereunder, then, upon demand of City, Escrow Holder shall terminate the Escrow, immediately deliver all documents that City previously deposited into Escrow (collecti vely “ City’s Documents”) to City, deliver Developer’s Deposit and preliminary change of ownership report to Developer, and charge Developer for any cancellation charges. City’s right to terminate the Escrow would be in addition to all rights and remedies at law, in contract or in equity, including without limitation, specific performance. If the Escrow shall fail to close as a result of City’s breach of any of its obligations hereunder, or upon Developer’s election to terminate in accordance with the provisions of this Agreement, then upon demand of Developer, Escrow Holder shall terminate the Escrow, immediately cause the Deposit to be delivered to Developer, deliver City’s
22 Documents to City, deliver Developer’s preliminary change of ownership report to Developer, and charge City for any cancellation charges. Developer’s right to terminate the E scrow would be in addition to all rights and remedies at law, in contract or in equity, including without limitation, specific performance. If the Escrow fails to close through no fault of either Developer or City, upon the demand of either Party, Escrow Holder shall return Developer’s preliminary change of ownership report to Developer, return City’s Documents to City, return the entire Deposit to Developer, and cancel the Escrow, with all cancellation charges to be borne equally by Developer and City.
X. Indemnification of Escrow Holder.
Escrow Holder shall be indemnified and held harmless by Developer and City against any and all costs, damages, attorneys’ fees, expenses and liabilities which it incurs or sustains in connection with the Escrow, except for such items as may be caused by Es crow Holder’s misconduct or negligence.
III. IMPROVEMENT OF PROPERTY.
A. Improvement of Property by Developer.
1. Scope of Improvement Work.
Developer shall, after Closing, improve the Property in accordance with and within the limitations established in the Scope of Development, the Schedule of Performance and plans and documents approved by City pursuant to this Agreement. For purposes of this Agreement, the terms “construct,” “rehabilitate,” “develop,” “improve”, “construction,” “rehabilitation,” “improvement,” or “development” shall mean and refer to the improvement of the Property as provided in the Scope of Development attached hereto as Exhibit “B.”
2. Design Development Drawings.
Developer shall submit to City “ Design Development Drawings ” for Developer’s improvement of the Property. The commencement of any work to cause improvement of the Property shall be strictly contingent upon City’s approval of the Design Development Drawings.
3. Construction Documents.
Developer shall prepare and submit to City construction documents ( “Construction Documents”) for all improvements required by the Scope of Development. The Construction Documents may be modified as provided herein . Within three (3) calendar days of the City’s determination that the Construction Documents are complete, City shall submit such material for third (3
rd) party review and City shall cause such review to occur in a timely manner. T he Construction Documents shall be approved by City if they are reasonably acceptable to City and are consistent with the applicable legal authority, including, without limitation, building codes, the Hanford Municipal Code, and the terms of this Agreement. The Construction Documents shall include working drawings, specifications, materials boards, and detailed landscaping plans. City may require Developer to provide supplement information and materials not contained in the
23 Construction Documents to allow City to confirm that Developer’s improvements will cause the Property to be consistent with its historic characteristics and which result in a premier mixed -use project within City’s boundaries. The Construction Documents s hall be submitted to the City within the time(s) set forth in the Schedule of Performance. The “Final Construction Documents” shall be the Construction Documents approved in writing by City . Developer will not undertake any work at the Property without first obtaining City’s approval of Construction Documents and all permits required by law.
4. Construction Contractor.
Carvalho Construction, Inc. shall serve as general contractor for the Project.
5. Land Use Approvals.
a. Developer shall develop the Property in accordance with all applicable local land use requirements (“Land Use Approvals ”) and further agrees that any proposed design changes and the Final Construction Documents to be approved by the City in accordance with this Agreement shall comply with the Land Use Approvals. Approvals from the City shall not be unreasonably withheld, conditioned, or delayed. Additionally, nothing in this Agreement shall prohibit Developer or any future owner of the Property from seeking to have the zoning for the Property amended, modified or changed; however, City offers no representations or warranties as to approval of any such request as the City may not, by contract, commit to exercise its legislative authority in a manner that results in a specified outcome.
b. Developer acknowledges that the Courthouse is listed on the National Register of Historic Places and is designated as a historic structure by City. As a result, Chapter 17.48 of the Hanford Municipal Code (“ HMC”), the terms of which are incorporated herein by reference, govern exterior modifications to the Courthouse. No changes to the exterior of the Courthouse may occur unless Developer first applies for and obtains a Historic Resources Permit from City in accordance with HMC Chapter 17.48, which shall not be unreasonably withheld, conditioned, or delayed. If HMC Chapter 17.48 ceases to exist following the Parties’ execution of this Agreement , the last version existing immediately prior to its elimination shall continue to govern the Property for purposes of this Agreement . The Historic Resources Permit requirement shall be in addition to other permits that may be required under law for the modification of the Property.
6. Cost of Construction.
The cost of improving the Property in accordance with this Agreement, including, without limitation, cost overruns, shall be borne solely by Developer.
7. Schedule of Performance and Progress.
a. Developer shall begin and complete all construction and development within the times specified in the Schedule of Performance, or within such extensions of such times as may be granted by City or as provided for herein . The Schedule of Performance is also subject to revision from time to time as mutually agreed upon in writing by and between
24 Developer and City. Any environmental remediation work involving contamination that exists at Closing shall automatically extend the Schedule of Performance or the critical path of the Project and shall be considered excusable delay hereunder.
b. On or before the first (1 st) day of each month, Developer shall deliver to City a financial summary and development status report in a form mutually approved by the Parties. City and Developer shall also meet regularly, but no less than quarterly, during construction to review compliance of construction with the Final Construction Documents and the terms of this Agreement. Necessary changes or alterations in the plans will be discussed along with coordination of approval of the changes and other pertinent matters. City shall have the reasonable right to inspect construction, as well as the right to accept or reject work found not to be in compliance with the Final Construction Documents or applicable law.
8. Standards for Improvement Work.
All work performed at the Property pursuant to this Section III and all maintenance, repair, and improvement work occurring in the future shall be consistent with the standards identified in the latest version of the “Secretary of Interior’s Standards for Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring & Reconstructing Historic Buildings” (“Secretary of Interior’s Standards”), which is incorporated herein by reference, in addition to then-applicable law.
B. Indemnification and Insurance.
1. Developer’s Duty to Indemnify City.
Without limiting the force and effect of any other indemnity provisions in this Agreement and except as otherwise limited herein, Developer agrees to, and shall, indemnify, protect, defend and hold City and its officials, officers, employees, representatives , and agents harmless from and against any and all claims, proceedings, liabilities, losses, damages, fees, costs, and expenses (including attorney’s fees and court costs), which arise after City’s conveyance of the Property to Developer, from or as a result of any post-Closing accident, injury, loss or damage whatsoever caused to any person or to the property of any person, which : (i) is due to the Property’s condition, or (ii) in any way arises out of the construction, development, management and/or operation of the Property, including, but not limited to, claims of negligent or defective design or construction, regardless of whether any such liability occurs before or after the City issues the Certificate of Compliance. These indemnity obligations shall survive the termination of this Agreement. The foregoing indemnity obligations shall not apply to claims, proceedings, liabilities, losses, damages, fees, costs, and/or expenses that in any way relate to matt ers for which the City cannot shift responsibility as a matter of the law.
2. Developer Insurance.
Developer shall have and maintain the insurance policies identified in the Insurance Requirements attached hereto as Exhibit “D”, which is incorporated herein by reference, until the City issues the Certificate of Compliance to Developer. Following the issuance of the Certificate
25 of Compliance, Developer shall maintain the property insurance required identified in Exhibit “D.”
C. Antidiscrimination during Construction; Equal Opportunity.
Developer, for itself and its successors and assigns, agrees as follows.
1. Non-Discrimination.
Developer will not discriminate against any employee or applicant for employment because of race, sex, color, age, religion, sexual orientation, actual or perceived gender identity, disability, ethnicity, or national origin. Developer will take affirmative action to ensure that applicants are employed, and that employees are treated during employment without regard to their race, sex, color, age, religion, sexual orientation, actual or perceived gender identity, disability, ethnicity, or national origin. Such action shall include, but not be limited to, the following: employment, promotion, demotion, or transfer; recruitment or recruitment advertising, layoff , or termination; rates of pay or other forms of compensation; and selection for training, including apprenticeship.
Developer agrees to post in conspicuous places, available to employees and applicants for employment, notices setting forth the provisions of this nondiscrimination clause.
2. Non-Discrimination Statement.
Developer will, in all solicitations or advertisements for employees placed by or on behalf of the Developer, state that all qualified applicants will receive consideration for employment without regard to race, sex, color, age, religion, sexual orientation, actual or perceived gender identity, disability, ethnicity, or national origin.
3. Contractual Provisions.
Developer will cause the foregoing provisions to be inserted in all contracts for any work covered by this Agreement so that such provisions will be binding upon each contractor and subcontractor, provided that the foregoing provisions shall not apply to c ontracts or subcontracts for standard commercial supplies or raw materials.
D. Local, State, and Federal Laws.
1. Adherence to Laws.
Developer shall carry out the construction of improvements and all other work on the Property in conformity with applicable laws, including, without limitation, the Americans with Disabilities Act of 1990 (“ ADA”) and federal and state labor standards , as applicable. Should Developer pursue an exemption with respect to improvements that may be required under the ADA, City shall, in a manner consistent with the ADA, reasonably cooperate with Developer in such efforts.
2. Prevailing Wage.
26 City makes no representations or warranties as to the applicability of prevailing wage requirements of the California Labor Code to the Project. Developer acknowledges that, pursuant Sections 1720 and 1771 of the California Labor Code, prevailing wage may be triggered for a private project if a public agency conveys property to a private party for less than fair market value.
It shall be Developer’s sole responsibility to determine whether prevailing wage requirements apply to the Project, and Developer will indemnify, defend, and hold City and its officials, officers, employees, representatives, and agents with respect to any violation of applicable prevailing wage requirements by Developer.
3. City’s Exercise of Police Powers.
Nothing in this Agreement shall be construed to limit the authority of City in the exercise of its police power or pursuant to federal or state mandate to adopt and apply to Developer and the Project any codes, ordinances, policies, rules, and/or regulations.
E. City and Other Governmental Permits.
1. Permits.
Before commencement of any work at the Property, Developer shall secure or shall cause to be secured all permits which may be required by City and any other governmental agency having jurisdiction over construction, development, or work to be performed. Developer shall pay fees as may be required in connection therewith. Developer acknowledges that the execution of this Agreement by City does not constitute City approval for purposes of the issuance of permits, does not relieve Developer from the obligation to apply for and obtain from City all necessary approvals, entitlements, and permits for the Project, nor does it limit in any manner the discretion of City or any other agency in the approval process,
2. Fees and Charges.
Developer shall be solely responsible for, and shall promptly pay when due, all customary and usual fees and charges of City and other agencies with jurisdiction over the Project, including, without limitation, those related to the processing and consideration of amendments, if any, to the current entitlements, any related approvals and permits, environmental review, historic review, and any subsequent approvals for the Project.
3. City’s Duty to Process Applications.
In consideration of Developer entering into this Agreement, and provided that Developer exercises due diligence and good faith, and files full, accurate, and complete applications with timely payment of all fees therefor, City agrees that it will accept, p rocess, and review, in good faith and in an expeditious manner, all applications in accordance with the terms of this Agreement and applicable law.
F. Rights of Access and Inspection.
1. City’s Right of Access.
27 City shall have the reasonable right of access to the Property without charges or fees during normal business hours during the period of construction, for inspection of the work being performed at the Property as provided in this Agreement and confirmation of Developer’s satisfaction of the requirements of this Agreement . City shall minimize any disruption to any construction work being performed during any inspection.
2. City Inspections.
All City inspections of Project work shall be performed by one (1) inspector selected by City and who shall be familiar with this Agreement, the Scope of Development, and Construction Documents; provided however, City may elect to utilize more than one (1) inspector if the designated inspector is unavailable for a prolonged period or an inspection involves a matter exceeding the scope of the inspector’s expertise.
G. Liens and Stop Notices.
1. Restriction Regarding Liens and Stop Notices.
Prior to the issuance of the Certificate of Compliance, Developer shall not allow to be placed on the Property or any part thereof any lien or stop notice on account of materials supplied to or labor performed on behalf of Developer. If a claim of a lien or stop notice is given or recorded affecting the Project or any part thereof, Developer shall, within twenty (20) calendar days of such recording or service: (i) pay and discharge (or cause to be paid and discharged) the same; or (ii) effect the release thereof by recording and delivering (or causing to be recorded and delivered) to the party entitled ther eto a surety bond in sufficient form and amount; or (iii) provide other assurance satisfactory to City that the claim of lien or stop notice will be paid or discharged.
2. Failure to Address Liens and Stop Notices.
If Developer fails to satisfy or discharge any lien or stop notice on the Property or any part thereof pursuant to and within the time period set forth hereinabove, City shall have the right upon delivery of five (5) calendar days’ written notice to Developer, but not the obligation, to satisfy any such liens or stop notices at Developer’s expense. In such event, Developer shall be liable for and shall immediately reimburse City for such paid lien or stop notice. Alternatively, the City may require Developer to immediately deposit with City the amount necessary to satisfy such lien or claim pending resolution thereof. City may use such deposit to satisfy any clai m or lien that is adversely determined against Developer. Developer shall file a valid notice of cessation or notice of completion upon cessation of construction work on the Property for a continuous period of thirty (30) calendar days or more and shall ta ke all other reasonable steps to forestall the assertion of claims or liens against the Property. City may, but has no obligation to, record any notices of completion or cessation of labor, or any other notice that City deems necessary or desirable to protect its interest in the Property hereunder.
H. Prohibition Against Transfer.
1. Assignment Prohibition.
28 Prior to the recordation of the Certificate of Compliance for the Project, the Developer shall not, except as permitted by this Agreement, assign or attempt to assign this Agreement or any right herein, nor make any total or partial sale, transfer, conveyance or assignment of the whole or any part of the Property or the improvements thereon, without prior written approval of City, which may be withheld in City’s sole discretion. This prohibition shall cease upon the recordation of the Certificate of Compliance. This prohibition shall not be deemed to prevent the granting of easements to facilitate the development of the Property, nor shall it prohibit granting any security interests described in this Agreement for financing the acquisition and development of the Property.
The City shall not assign, attempt to assign, or otherwise transfer its rights and obligations under this Agreement without the prior written approval of Developer, which may be withheld in Developer’s sole and absolute discretion.
2. Consequences of Prohibited Assignment.
If, contrary to the provisions of this Agreement, Developer assigns this Agreement or any of the rights herein, or sell s, transfers , convey s, or assigns any part of the Property or the improvements thereon prior to the completion of the Project as evidenced by a Certificate of Compliance, the City shall, at the City’s discretion, be entitled to: (i) the consideration received by Developer in the sale, transfer, conveyance , or assignment; or (ii) reacquire the Property in accordance with Section VIII.B. below.
3. City’s Approval of Assignee.
Prior to issuance of a Certificate of Compliance, any proposed transferee shall be subject to prior written approval by City, which may be withheld in City’s sole discretion. Any proposed transferee shall have the qualifications and financial capability necessary and adequate, as determined by City, to fulfill the obligations under this Agreement by the Developer. Prior to City’s approval or disapproval of the proposed transfer, Developer and the proposed transferee shall submit to City, for its review and approval, all ins truments and other legal documents proposed to effect any such transfer, and a written instrument in a form recordable against the Property, binding upon the proposed transferee and its successors and assigns and for the benefit of City, by which: (i) the proposed transferee shall expressly assume all of the obligations of the Developer under this Agreement and agree to be subject to all conditions and restrictions to which Developer is subject; and (ii) Developer guarantees the transferee’s performance hereunder.
4. Developer Not Relieved of Responsibilities.
Prior to the issuance of the Certificate of Compliance for the Project , no sale, transfer, conveyance or assignment of the Property , or approval thereof by the City, shall be deemed to relieve Developer or any other party from any obligations under this Agreement, unless such sale, transfer, conveyance or assignment of the Property is an Allowed Transfer (defined below) or it is approved in writing by the City, which approval may be withheld in the City’s sole discretion. The foregoing notwithstanding, upon issuance of the Certificate of Compliance , any subsequent sale,
29 transfer, conveyance or assignment of the Property shall relieve Developer from any remaining obligations of this Agreement.
5. Allowed Transfers.
Notwithstanding the above, Developer shall not be required to seek the approval of City, and this Agreement shall not be terminated in connection with any assignment or transfer of this Agreement (“Transfer”) to the extent: (i) such Transfer is to any entity in which Developer is the managing general partner or the managing member or Developer and the transferee entity share common majority ownership; and (ii) Developer has delivered to City a fully executed Completion Guarantee in a form reasonably satisfactory to City , under which Developer guarantees the transferee’s completion of the Project. Developer shall provide the City with written notice of any such Transfer.
I. Security Financing: Rights of Holders.
1. No Encumbrances Except Mortgages, Deeds of Trust.
Mortgages, deeds of trust, or any other form of conveyance required for financing are permitted to encumber the Property before the recordation of a Certificate of Compliance for the purpose of securing loans to be used for financing the expenditures necessary and appropriate to develop the Property under this Agr eement. Any such conveyance shall be subject to the covenants, conditions, and restrictions applicable to the Property under this Agreement. Developer shall notify City in advance of any mortgage, deed of trust, or other form of conveyance for financing if Developer proposes to enter into the same before the issuance of the Certificate of Compliance. Developer shall not enter into any such conveyance for financing without the prior written approval of the City, which approval the City agrees to give without any unreasonable delay or conditions, if the conveyance complies with this Subsection I. and such conveyance is given to a responsible financial or lending institution or other acceptable person or entity. The words “mortgage” and “deed of trust” as used herein include all other appropriate modes of financing real estate acquisition, construction, and land development.
2. Holder Not Obligated to Construct Improvements.
The holder of any mortgage, deed of trust, or other security interest authorized by this Agreement (“Authorized Lender ”) shall in no way be obligated by the provisions of this Agreement to construct or complete the improvements at the Property or to guarantee such construction or completion. Nothing in this Agreement shall , however, be deemed to permit or authorize any such Authorized Lender to devote the Property to any uses, or to construct any improvements thereon, other than those uses or improvements provided for or authorized by this Agreement or otherwise violate the terms of this Agreement.
3. Notice of Default to Security Interest Holders; Right to Cure.
Whenever City shall deliver any notice or demand to the Developer with respect to any breach or default by Developer in completion of development of the improvements at the Property, City shall, at the same time, deliver to each holder of record of any mor tgage, deed of trust, or
30 other security interest authorized by this Agreement a copy of such notice or demand. Each such holder shall (insofar as the rights of the City are concerned) have the right , at its option , within thirty (30) calendar days after the receipt of the notice to cure or remedy any such default and to add the cost thereof to the security interest debt and the lien on its security interest. If such default shall be a default which can only be remedied or cured by such holder upon obtaining possession, such holder shall seek to obtain possession with diligence and continuity through a receiver or otherwise, and shall remedy or cure such default within thirty (30) calendar days after obtaining possession but no later than one hundred twenty (120) calendar days from its receipt of the notice to cure; provided that in the case of a default which cannot with diligence be remedied or cured, or the remedy or cure of which cannot be commenced, within such thirty (30) calendar day period, such holder shall have such additional time as reasonably necessary to remedy or cure such default of Developer if such party commences cure efforts during the thirty (30) calendar day period and diligently purses the completion of the required work. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the Project (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed D eveloper’s obligations to City by written agreement satisfactory to the City. Prior to entering into such an agreement, the holder shall submit evidence satisfactory to City that such holder has the qualifications and financial capability necessary to perform such obligations. Any such holder that properly completes such improvements shall be entitled, upon written request made to City, to a Certificate of Compliance from City.
4. Failure of Holder to Complete Improvements.
In any case where, six (6) months after default by Developer in the completion of the improvements under this Agreement, the holder of any mortgage, deed of trust, or other security interest creating a lien or encumbrance upon the Property or any portion thereof has not exercised the option to cure such default, or , if it has exercised the option and has not proceeded diligently to cure such default, the City may, but shall not be required to, purchase the mortgage, deed of trust, or other security interest by payment to the holder of the amount of the unpaid debt, plus any accrued and unpaid interest. If the ownership of the Property has vested in the security holder, City, if it so desires, shall be entitled to a conveyance from the holder to City upon payment to the holder of an amount equal to the sum of the following:
a. The unpaid amount secured by the mortgage, deed of trust, or other security interest debt at the time title became vested in the holder (less all appropriate credits, including those resulting from collection and application of rentals and other income received during foreclosure proceedings).
b. All expenses with respect to foreclosure or deed in lieu of foreclosure.
c. The net expenses, if any (exclusive of general overhead), incurred by the holder as a direct result of the subsequent ownership or management of the Property, such as insurance premiums and real estate taxes.
d. The costs of any improvements made by such holder.
31 e. An amount equivalent to the interest that would have accrued on the aggregate of such amounts had all such amounts become part of the secured debt and such debt had continued in existence to the date of payment by City.
5. Right of City to Cure Mortgage, Deed of Trust, or Other Security Interest Default.
In the event of a default or breach by Developer of any secured financing with respect to the Property (or any portion thereof) prior to the issuance of the Certificate of Compliance , and the holder has not entered into an agreement to assume Developer’s obligations, City may, but shall not be required to, cure the default prior to completion of any foreclosure. In such event, City shall be entitled to immediate reimbursement from Developer of all costs and expenses incurred by the City in curing the default. City shall also be entitled to a lien hereunder against the Property to the extent of such costs and disbursements.
J. Certificate of Compliance.
1. City’s Duty to Provide Certificate.
Promptly after completion of the Project, as generally and specifically required by this Agreement and in particular by the Scope of Development and Final Construction Documents approved by City hereunder, City shall furnish Developer with a Certificate of Compliance, the form of which is attached hereto as Exhibit “E,” which is incorporated herein by reference, upon written request therefor by Developer, if City finds that the Project has been constructed in accordance with the terms and conditions of this Agreement and Developer is not in default .
Developer shall include with its request a complete set of as-built drawings for the Project with its request for a Certificate of Compliance. City shall not unreasonably withhold, condition, or delay the issuance of such Certificate of Compliance. Issuance by City of the Certificate of Compliance shall constitute evid ence that Developer has completed the Project; issuance of such Certificate shall not, however, constitute evidence that Developer has satisfied any of its other obligations under this Agreement.
2. City’s Non-Issuance of Certificate.
If City refuses or fails to furnish a Certificate of Compliance after written request from the Developer, City shall, within ten (10) business days of the written request, provide Developer with a written statement of the reasons for City’s withholding of the Certificate of Compliance. The statement shall also identify the action s that Developer must take to obtain a Certificate of Compliance. If the reason for such refusal is confined to the immediate availability of specific items or materials for landscaping, and/or minor items, City will issue its Certificate of Compliance upon the posting of a bond by Developer with City in an amount representing one hundred twenty five percent (125%) of the value of the work not yet completed. If City fails to provide such written statement within said ten (10) business days, Developer shall be deemed entitled to the Certificate of Compliance.
3. Mediation Regarding Non-Issuance of Certificate.
32 If City declines to issue the Certificate of Compliance and, during the ten (10) business days following City’s notice to Developer that City has declined to issue such certificate, the Parties are unable to come to an agreement on the terms upon which a C ertificate of Compliance will be issued, then Developer, upon written notice to the City, may require that the Parties’ dispute regarding the issuance of a Certificate of Compliance shall be brought before a mediator meeting the qualifications set forth below. Mediation regarding the subject dispute shall occur within Sixty (60) calendar days, or thereafter as is reasonably possible, following notice from Developer at a mutually agreed upon location, at a mutually convenient time . The mediator shall be a person mutually selected by City and Developer who shall have at least ten (10) years of mediation experience. The costs and expenses of the mediator shall be borne equally by Developer and City.
To the extent a party does not participate in mediation in good faith, that party shall not be entitled to recover any attorney’s fees or costs in subsequent litigation.
4. Limited Nature of Certificate.
Such Certificate of Compliance shall not constitute evidence of compliance with or satisfaction of any obligation of Developer to any security holder, or any insurer of a security holder. Such Certificate of Compliance is not a notice of completion as referred to in Section 3093 of the California Civil Code nor a certificate of compliance as described in Section 66499.35 of the California Government Code.
K. Construction Signage and Project Ceremonies.
Developer shall provide construction site signage that identify the Project and signage shall reference the Courthouse as the “County of Kings Courthouse .” The design and text of the signs shall be subject to prior review and approval by City through City’s signage permitting process , which shall not be unreasonably withheld, delayed or conditioned. The signs must be erected on the Property on or before commencement of construction. Developer shall be solely responsible for the cost of all Project ceremonies, if any. All such ceremonies shall be closely coordinated with City.
IV. USE OF THE PROPERTY.
A. Uses.
1. Developer Covenants - Generally.
Developer covenants and agrees for itself and its successors and assigns as follows:
a. The Property shall be developed and utilized in accordance with the provisions of this Agreement, the Scope of Development, City’s then-current General Plan, City’s then-current Municipal Code, the permits issued for the Property, and all plans approved by City pursuant to this Agreement. The foregoing notwithstanding, Developer or Developer’s successors in interest may apply to the City for future amendments or modifications to any of the foregoing Plans, Codes, Permits and any other relevant documents pertaining to the Property.
33 b. The Courthouse shall always be identified as the “County of Kings Courthouse” in all manners of signage. The foregoing does not preclude Developer or its tenants from incorporating their own branding into signage as well , subject to the signage regulations of the Hanford Municipal Code.
B. Occupancy.
1. Vacancies and Non-Use.
The Property is a vital component of Downtown Hanford, and, therefore, prolonged vacancies or non -use of a significant portion of the Property following City’s issuance of the Certificate Completion will have a detrimental effect on City and its residents.
2. Default for Intentional Non-Use.
Developer will be deemed in default of this Agreement if, following the one (1) year anniversary of City’s issuance of the Certificate of Compliance, fifty percent (50%) or more of the occupiable floor space within the Courthouse is vacant and/or not utilized for productive operations benefitting the public for any six (6) month period. The Parties hereby agree that there are _____________ (____) square feet of occupiable floor space within the Courthouse.
Developer will, at City’s request, promptly provide documentation to City that demonstrates that space within the Courthouse is occupied and is being utilized for productive operations benefitting the public. Such evidence may include, without limitation, true and correct copies of tenant leases.
3. Developer’s Acknowledgment.
Developer acknowledges that a primary factor for City’s execution of this Agreement is that the Courthouse be put to productive use. Therefore, the provisions of this Subsection B. are of utmost importance, and Developer will be deemed in default of this Agreement if occupancy requirements are not satisfied.
C. Effect and Duration of Covenants; Covenants Run with the Land.
1. Covenants Binding.
The covenants established in this Agreement shall be binding for the benefit and in favor of City, Developer, and their respective successors and assigns.
2. Covenants Survive Transfer.
Unless necessarily implied, the covenants and obligations herein shall not be merged with the Grant Deed and shall survive the transfer of the Property and the recording of the Grant Deed.
3. Covenants Run with the Land.
The covenants and obligations identified in this Agreement shall run with the land.
34 4. Recording of Agreement.
At Closing, this Agreement shall be recorded in the Official Records of Kings County against the Property at Developer’s sole cost.
D. Effect of Violation of Terms of Agreement.
The City is deemed beneficiary of the terms and provisions of this Agreement and the covenants running with the land. The Agreement and the covenants shall run in favor of the City.
The City shall have the right , if the 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 to which it is entitled.
V. PRESERVATION AND MAINTENANCE OF THE PROPERTY.
A. Developer’s Duty.
Developer hereby covenants on behalf of itself and its successor s and assigns at all times to restore, maintain, and preserve the Property: (i) in accordance with the Secretary of Interior’s Standards, which shall include, without limitation, the use by Developer of in- kind materials and colors, applied with workmanship comparable to that which was used in the original construction or application of those materials being repaired or maintained; and (ii) so that it is a premier mixed- use project within City.
B. Historic Resources Permit.
No construction, alteration, or rehabilitation shall be undertaken or permitted to be undertaken that would affect the historic features of the Property without prior consultation with, and express permission of City, which consultation and permission shal l occur through City’s Historic Resources Permit process (see Hanford Municipal Code Chapter 17.48) , as may be amended. If HMC Chapter 17.48 ceases to exist following the Parties’ execution of this Agreement and is not replaced with a substitute process, the last version existing immediately prior to its elimination shall continue to govern the Property.
C. Demolition Prohibited.
Developer shall, under no circumstances, demolish the Courthouse without City’s prior consent, which may be withheld in City’s sole and absolute discretion.
D. Developer’s Duty to Restore.
If the Courthouse is damaged or destroyed by any cause, Developer will expeditiously restore the structure in accordance with the standards identified herein regardless of whether insurance coverage exists for such damage. Developer shall promptly obtain the permits required for restoration efforts, and construction will commence within forty- five (45) calendar days of obtaining such permits or as soon thereafter as reasonably possible . Developer shall diligently prosecute such work through completion. In the event of total destruction, the Courthouse will be
35 fully reconstructed with in thirty-six (36) months of the event causing destruction or as soon thereafter as reasonably possible. Any lesser damage will be addressed in a shorter timeframe consistent with the extent of damage incurred.
E. Notice for Failure to Comply.
City shall notify Developer in writing should Developer fail to satisfy the requirements of this Section V. Developer will complete the necessary work to address all deficiencies and non - compliant conditions within thirty (30) calendar days of Developer’s receipt of City’s written deficiency notice.
F. Developer’s Obligation to Pay Taxes.
Commencing upon Developer’s acquisition of the Property, Developer shall pay all real and personal property taxes, assessments, and charges assessed against the Property at such times and in such manner as to prevent any penalty from accruing, or any lien or charge from attaching to the Property; provided, however, Developer shall have the right to contest in good faith, any such taxes, assessments, or charges. In the event the Developer exercises its right to contest any tax, assessment, or charge, Develop er, on final determination of the proceeding or contest, shall immediately pay or discharge any decision or judgment rendered against it, together with all costs, charges, and interest,
G. Remedies.
1. City’s Right to Cure Breach.
If Developer fails to cure a breach of this Section V. within the specified period, City may address Developer’s breach by remedying any non- compliant condition of the Property. In such case, City will invoice Developer for all costs incurred by City to address Developer’s breach.
Payment in full shall be due within thirty (30) calendar days of the date of the invoice. Any balance that remains unpaid at the end of a thirty (30) calendar day payment period shall accrue interest at the rate of ten percent (10%) per annum. This Agreement shall: (i) secure all amounts that Developer may come to owe City under this Agreement; and (ii) serve as a lien against the Property securing such amounts owed to City.
2. Remedies.
In addition to or in lieu of the remedy identified in the preceding Subsection G.1., City and any resident of City may, after giving the required notice pursuant to Subsection E. above, institute an action for specific performance, injunction, and/or monetary damages. The action for specific performance may include restoration of the Property to the condition required hereunder . The plaintiff in any action brought pursuant to this Section V. shall be entitled to recover its costs and attorneys’ fees if it is deemed to be the prevailing party.
3. Non-Exclusive Remedies.
36 The provisions of this Section V. shall not preclude City from pursuing any other remedy against Developer that may be available at law, in equity, or hereunder.
4. Remedies Cumulative.
The remedies identified in this Agreement, including in this Section V., shall be cumulative and the pursuit of one (1) form of remedy shall not automatically preclude other remedies.
VI. FUNDING.
All development, maintenance, repairs, improvement, and preservation of the Property shall be funded by Developer.
VII. CITY’S RIGHT OF FIRST REFUSAL.
A. Right of Refusal – Generally.
City shall have the first right of refusal to purchase any portion of the Property (“Right of Refusal”).
B. Notice to City.
If, at any time, Developer receives a bona fide offer from a potential purchaser or Developer otherwise seeks to gift or convey all or any portion of the Property and such conveyance would not otherwise be considered an Allowed Transfer or a transfer to one or more owners of Developer (or its successor) and/or their immediate families or trusts (“Third Party Offer”), then, prior to accepting such Third Party Offer, Developer shall transmit all of the terms of such Third Party Offer to City , and City shall have ten (10) business days to notify Developer, in writing (“ROFR Notice”), whether it agrees to acquire the applicable portion of the Property on the terms set forth in the Third Party Offer.
C. City’s Waiver of Right of Refusal.
In the event that City does not provide Developer with a ROFR Notice within the timeframe provided for in the preceding sentence, then City shall be deemed to have elected not to acquire the applicable portion of the Property and Developer shall be free to convey the applicable portion of the Property to the third party for which Developer submitted the Third Party Offer on the terms set forth therein. Developer may not sell or transfer to such third party on any terms other than those set forth in the Third-Party Offer. In the event that City does not exercise its Right of First Refusal, City shall be deemed to have irrevocably waived its Right of First Refusal with respect to the transaction outlined in the corresponding Third Party Offer. Should City waive its Right of First Refusal with respect to a Third Party Offer and Developer fail to sell or convey to such third party on the terms outlined in the Third Party Offer, City’s Right of First Refusal will apply to any new or revised offer received by Developer, including, without limitation, a new or revised offered received from the same third party or a new third party.
D. Terms of Purchase.
37 To the extent that the terms of Section II. above do not directly conflict with the Third Party Offer, the purchase and sale provisions of that section shall govern City’s acquisition of the Property from Developer.
VIII. DEFAULTS, REMEDIES, AND TERMINATION.
A. Defaults – Generally.
1. Developer Default.
In addition to the defaults identified herein, t he following events shall constitute an event of default on the part of Developer (“Event of Developer Default”):
a. Developer fails to commence or complete construction of the Project within the time periods specified herein or abandons or suspends construction of the Project prior to completion for a period of thirty (30) calendar days.
b. Developer transfers or assigns its rights hereunder without City’s prior consent.
c. Developer fails to pay, prior to delinquency, taxes or assessments due on the Property or fails to pay when due any other charge that may result in a lien on the Property, and Developer fails to cure such default within twenty (20) calendar days of the date of delinquency, but in all events prior to the date upon which the holder of any such lien has the right to foreclose thereon.
d. A default arises under any loan secured by a mortgage, deed of trust, or other security instrument recorded against the Property and remains uncured beyond any applicable cure period such that the holder of such security instrument has the right to acceler ate repayment of such loan.
e. Any representation or warranty contained in this Agreement or in any document submitted to City in connection with this Agreement proves to have been incorrect in any material and adverse respect when made.
f. If, pursuant to, or within the meaning of the United States Bankruptcy Code or any other federal or state law relating to insolvency or relief of debtors (“Bankruptcy Law”), Developer: (i) commences a voluntary case or proceeding; (ii) consents to the entry of an order for relief against Developer in an involuntary case; (iii) consents to the appointment of a trustee, receiver, assignee, liquidator or similar official for Developer; (iv) makes an assignment for the benefit of its creditors; or (v) admits in writing its inability to pay its debts as they become due.
g. A court of competent jurisdiction shall have made or entered any decree or order: (i) adjudging Developer to be bankrupt or insolvent; (ii) approving as properly
38 filed a petition seeking reorganization of Developer or seeking any arrangement for Developer under bankruptcy law or any other applicable debtor’s relief law or statute of the United States or any state or other jurisdiction; (iii) appointing a receiver, trustee, liquidator, or assignee of Developer in bankruptcy or insolvency or for any of its properties; or (iv) directing the winding up or liquidation of Developer, in each case if such decree, order, petition, or appointment is not removed or rescinded within sixty (60) calendar days.
h. Developer shall have assigned its assets for the benefit of its creditors (other than pursuant to a mortgage loan) or suffered a sequestration or attachment of or execution on any substantial part of its property, unless the property so assigned, sequester ed, attached or executed upon shall have been returned or released within sixty (60) calendar days after such event (unless a lesser time period is permitted for cure pursuant to Subsections (f) or (g) above or pursuant to any other mortgage on the Propert y, in which event such lesser time period shall apply under this subsection as well) or prior to any sooner sale pursuant to such sequestration, attachment, or execution.
i. Developer shall have voluntarily suspended its business or Developer shall have been dissolved or terminated.
j. Developer defaults in the performance of any term, provision, covenant, or condition contained in this Agreement, and, unless a different cure period is specified for such default, the default continues for thirty (30) calendar days after the date upon which City shall have given written notice of the default to Developer; provided however, if the default is non- monetary in nature and cannot be cured within thirty (30) days, an Event of Developer Default shall not arise hereunder if Developer commences to cure the default within the thirty (30) day cure period and thereafter diligently prosecutes the curing of such default through completion.
2. City Default.
In addition to the defaults identified elsewhere herein, a n event of default on the part of City (“Event of City Default”) shall arise hereunder if City fails to keep, observe, or perform any of its covenants, duties, or obligations under this Agreement, and the default continues for a period of thirty (30) calendar days after written notice thereof from Developer to City, or in the case of a default which cannot with due diligence be cured within thirty (30) calendar days, City fails to commence to cure the default within thirty (30) calendar days of such notice and thereafter diligently prosecutes the curing of such default through completion.
3. Notice of Default.
The non-defaulting Party shall give written notice of default to the Party in default, specifying the default and the actions required to cure the default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.
4. No Waiver of Rights or Remedies.
Any failures or delays by either Party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays
39 by either Party in asserting any of its rights and remedies shall not deprive either Party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert, or enforce any such rights or remedies.
B. Remedies.
1. Institution of Legal or Equitable Action.
In addition to any other rights or remedies available hereunder, either Party may institute legal or equitable action to cure, correct, or remedy any default or recover damages for any default, or to obtain any other remedy consistent with the purpose of this Agreement.
2. Termination.
A non-defaulting Party may, at its option, may terminate this Agreement in the event the other Party is in default of any of the defaulting Party’s obligations hereunder and such default is not cured within the time specified herein.
3. City Repurchase.
a. In addition to the other remedies available under this Agreement, City shall also have the right, at its option, to purchase, enter, and take possession of the Property with all improvements thereon (“Repurchase Option”), if Developer breaches the terms of this Agreement and fails to fully remedy the breach as required herein.
b. If City exercises the Repurchase Option as a result of Developer’s failure to commence or complete the Project, City shall pay to the Developer cash in an amount equal to:
(i) The Purchase Price of One Dollar ($1.00); plus
(ii) Those costs paid by Developer for improvement work performed at the Property, which are necessary, reasonable, and sufficiently documented, plus
(iii) The financing costs and interest paid by Developer on its financing for Project work that is necessary, reasonable, and sufficiently documented, minus
(iv) The value of any liens or encumbrances on the Property which the City assumes or takes subject to; and minus
c. If Developer completes the Project and required under this Agreement and City exercises the Repurpose Option as a result of Developer’s post-completion breach of this Agreement, City shall, upon its election to repurchase the Property, pay to Developer:
(i) The then-current fair market value of the Property; minus
40 (ii) The value of any liens or encumbrances against the Property which City assumes or takes subject to; minus
(iii) Any amounts owed to City by Developer; minus
(iv) All taxes, assessments, and utility charges payable with respect to the Property for the period prior to the date that City acquires title to the Property; minus
(v) The amount of any payments necessary to discharge or prevent from attaching any subsequent encumbrance or liens due to obligations, defaults, or acts of Developer; and minus
(vi) Any damages to which City is entitled under this
Agreement by reason of Developer’s default.
(vii) If the Parties are unable to agree upon the Property’s then- current fair market value, the Parties shall each hire an MAI-certified real property appraiser.
Each Party will be responsible for the fees charged by its respective appraiser. If the Parties’ respective appraisers cannot agree upon the Property’s then-current fair market value, the Parties will jointly hire a third MAI-certified appraiser selected by the Parties’ respective appraisers, and the Property’s then-current fair market value shall be an average of the three (3) appraisals. If the Parties are unable to agree upon a third appraiser, that appraiser shall be selected by the Superior Court for the County of Kings. The Parties will each be responsible for one-half (½) of the fees charged by the third appraiser.
d. City shall give Developer written notice of its intent to exercise the Repurchase Option. T he purchase and escrow terms contained in Section II. above shall , to the greatest extent feasible, govern City’s repurchase the Property.
e. Any rights of the City under this Subsection B.3 . shall not defeat, limit, or render invalid any mortgage or deed of trust permitted by this Agreement or any rights provided for in this Agreement for the protection of holders of such instruments. Any conveyance or return of the Property to City pursuant to this Subsection B.3. shall be subject to mortgages and deeds of trust permitted by this Agreement.
4. Rights and Remedies Cumulative and Non-Exclusive.
Except with respect to rights and remedies expressly declared to be exclusive in this Agreement or if the City elects to exercise its right to repurchase the Property , the rights and remedies of the Parties are cumulative, and the exercise by either Party of one (1) or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.
41 IX. GENERAL PROVISIONS.
A. Notices.
Except as otherwise expressly provided herein, any notice, consent, authorization or other communication to be given hereunder shall be in writing and shall be deemed duly given and received when delivered personally, one (1) business day after being deposited for n ext-day delivery with a nationally recognized overnight delivery service, or five (5) business days after being mailed by certified mail, with return receipt requested, properly addressed to the Party to receive such notice at the last address furnished fo r such purpose by the Party to whom notice is directed and addressed as follows:
To Buyer: Jason Carvalho and Kevin Nickell
_____________
3055 Limestone Way
Paso Robles, CA 93446
To Seller: Mario Cifuentez, City Manager
CITY OF HANFORD
319 N. Douty Street
Hanford, CA 93230
B. Conflicts of Interest.
No officer, official, or employee of City shall have any personal interest, direct or indirect, in this Agreement nor shall any such officer, official or employee participate in any decision relating to the Agreement which affects his or her personal interests or the interests of any corporation, partnership or association in which he, or she is, directly or indirectly, interested.
C. Warranty Against Payment of Consideration for Agreement.
Developer warrants that it has not paid or given, and will not pay or give, any third (3 rd)
party any money or other consideration for obtaining this Agreement.
D. Nonliability of City Officials and Employees.
No officer, official, or employee of the City, including, without limitation, the City Attorney, shall be personally liable to Developer or any successor in interest, in the event of any default or breach by City or for any amount which may become due to Deve loper or to its successor, or on any obligations under the terms of this Agreement.
E. Enforced Delay; Extension of Time of Performance.
Notwithstanding specific provisions of this Agreement, performance by either Party shall
42 not be deemed to be in default where delays or defaults are due forces beyond their control, including but not limited to war; insurrection; strikes; lock -outs; riots; floods; earthquakes; fires; casualties; acts of God; nuclear or natural catastrophes; environmental remediation work occurring pursuant to Section III.A.7. above; acts of the public enemy; epidemics or pandemics; quarantine restrictions; freight embargoes; lack of transportation; breakdown of or damage to buildings, equipment or facilities; interruption or delay in transportation, fuel supplies or electrical power; governmental restrictions or priority; litigation including litigation challenging the validity of this transaction or any element thereof; unusually severe weather; inability to secure necessary labor, materials or tools; acts of the other party; acts or failure to act or delays in acting of City or any other public or governmental agency or entity (other than that acts or failure to act of City shall not excuse performance by City) ; or any other causes beyond the control or without the fault of the Party claiming an extension of time to perform. An extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the City and Developer.
F. Inspection of Books and Records.
City has the right, at all reasonable times, to inspect the records of Developer pertaining to the Property and/or the Project as necessary to confirm compliance with the terms of this Agreement.
G. Sole and Only Agreement.
This Agreement supersedes any and all other agreements, either oral or in writing, between the Parties with respect to the matters set forth herein and contains all of the covenants and agreements between the parties regarding said matters. Except as is otherwise provided herein, each Party to this Agreement acknowledges that no representations, inducements, promises or agreements, orally or in writing, have been made by any Party or anyone acting on behalf of any Party which are not embodied in this Agreement and no other agreement, statement or promise shall be valid or binding.
H. Further Action.
The Parties agree to perform all further acts, and to execute, acknowledge, and deliver any documents that may be reasonably necessary, appropriate or desirable to carry out the purposes of this Agreement.
I. Waiver.
A waiver of any breach of this Agreement by any Party shall not constitute a continuing waiver or a waiver of any subsequent breach of the same or any other provision of this Agreement.
J. Choice of Law.
This Agreement shall be governed by the laws of the State of California and any question arising hereunder shall be construed or determined according to such law.
43 K. Headings; Interpretation.
1. The language in all parts of this Agreement shall in all cases be construed simply, as a whole and in accordance with its fair meaning and not strictly for or against any party.
The Parties acknowledge and agree that this Agreement has been prepared jointl y by the Parties and has been the subject of arm’s length and careful negotiation over a considerable period of time, that each party has been given the opportunity to independently review this Agreement with legal counsel, and that each Party has the requisite experience and sophistication to understand, interpret, and agree to the particular language of the provisions hereof. Accordingly, in the event of an ambiguity in or dispute regarding the interpretation of this Agreement, this Agreement shall not be interpreted or construed against the Party preparing it.
2. If any term or provision of this Agreement, the deletion of which would not adversely affect the receipt of any material benefit by any Party hereunder, shall be held by a court of competent jurisdiction to be invalid or unenforceable, the remainder of this Agreement shall not be affected thereby and each other term and provision of this Agreement shall be valid and enforceable to the fulle st extent permitted by law. It is the intention of the Parties that in lieu of each clause or provision of this Agreement that is illegal, invalid, or unenforceable, there be added as a part of this Agreement an enforceable clause or provision as similar in terms to such illegal, invalid, or unenforceable clause or provision as may be permitted by law.
3. The captions of the sections and subsections herein are inserted solely for convenience and under no circumstances are they or any of them to be treated or construed as part of this instrument.
4. References in this instrument to this “Agreement” mean, refer to and include this instrument as well as any riders, exhibits, addenda, and attachments hereto (which are hereby incorporated herein by this reference) or other documents expressly incorporated by reference in this instrument. Any references to any covenant, condition, obligation, and/or undertaking “herein,” “hereunder,” or “pursuant hereto” (or language of like import) means, refers to, and includes the covenants, obligations, and undertakings existing pursuant to this instrument and any riders, exhibits, addenda, and attachments or other docume nts affixed to or expressly incorporated by reference in this instrument.
5. As used in this Agreement, and as the context may require, the singular includes the plural and vice versa, and the masculine gender includes the feminine and vice versa.
L. Time.
Time is of the essence for each condition, term, obligation and provision of this Agreement.
Unless otherwise specified, in computing any period of time described in this Agreement, the day of the act or event after which the designated period of time begins to run is not to be included and the last day of the period so computed is to be included. The final day of any such period shall be deemed to end at 5:00 p.m., local time at the Property. For purposes of this Agreement, a “business
44 day” means a day that is not a Saturday, Sunday, a federal holiday, or a state holiday under the laws of the State of California.
M. Counterparts.
This Agreement may be signed by the Parties in different counterparts and the signature pages combined to create a document binding on all Parties. This Agreement may be executed in two (2) separate counterparts, each of which, when so executed, shall be deemed to be an original and to constitute the one and same contract. This Agreement may also be signed, and signatures transmitted by facsimile, and any such facsimile copy shall be equivalent to a binding signed original for all purposes. This Agreement additionally may be executed and delivered by way of PDF email, provided the Parties have provided each other with email addresses to accomplish such delivery and the Party sending this Agreement via email either receives an electronic delivery receipt from the Party to whom this Agreement was sent or the recipient acknowledges receipt via email.
N. Attorneys’ Fees and Venue.
In the event of any action between Buyer and Seller seeking enforcement of any of the terms and conditions of this Agreement, the prevailing Party in such action shall be awarded, in addition to damages, injunctive or other relief, its reasonable costs and expenses, including, but not limited to, reasonable costs and reasonable attorneys’ fees. Seller and Buyer agree that any such action shall be venued in Kings County, California or in the Federal District Court in Fresno, California.
O. Relationship.
Nothing in this Agreement is intended to or shall establish the Parties as partners, co- venturers, or principal and agent with one another. The relationship of Developer and City shall not be construed as a joint venture, equity venture, partnership or any other relationship. City neither undertakes nor assumes any responsibility or duty to Developer (except as expressly provided in this Agreement) or to any third party with respect to the Project. Developer and its employees are not employees of City but r ather are, and shall always be, considered independent contractors. Furthermore, Developer and its employees shall at no time hold themselves out as employees or agents of City. Except as City may specify in writing, Developer shall not have any authority to act as an agent of City or to bind City to any obligation.
///
///
///
///
///
45 IN WITNESS WHEREOF, the Parties have executed this Agreement in the City of Hanford, County of Kings, California.
Dated: ___________________, 2023
CITY
CITY OF HANFORD, a municipal
corporation
By:
TRAVIS PADEN
Mayor
Dated: ___________________, 2023
Dated: ___________________, 2023
DEVELOPER
_______________________
By: _________________________________
JASON CARVALHO
President
By: _________________________________
KEVIN NICKELL
Secretary
46 EXHIBIT “A”
Legal Description and Drawing
EXHIBIT A
Parcel C
A portion of Parcels 1 and 4 of that Quitclaim Deed recorded October 30, 2014 as Instrument No. 1415827, of Kings County Records, located in the Southwest quarter of Section 25 and the Northwest quarter of Section 36, Township 18 South, Range 21 East, Mount Diablo Base and Meridian, in the City of Hanford, County of Kings, State of California, described as follows:
Commencing at a Point 40 feet West of the Southeast corner of the Southeast quarter of the Southwest quarter of Section 25, Township 18 South, Range 21 East, Mount Diablo Base and Meridian, said point also being the Northeast corner of said Parcel 1 and the Northeast corner of Block 155 of the City of Hanford, per map recorded in Volume 1, at Page 35, of Tulare County Records, and on the West right of way line of North Douty Street; Thence, North 89°34’04” West, along the South line of said Section 25 and the North line of said Section 36, a distance of 125.91 feet, to the TRUE POINT OF BEGINNING; Thence, South 10°51’18” East, 93.62 feet,
Thence, South 53°55’11” East, 32.37 feet;
Thence, South 10°27’06” East, 5.50 feet, to the South line of Block 155 of the City of Hanford, per map recorded in Volume 1, at Page 35, of Tulare County Records, and the North right of way line of West 8th Street;
Thence South 79°32’54” West, along said North right of way line of West 8th Street, 156.69 feet; Thence northeasterly 60.23 feet, along a non-tangent curve, concave to the Southeast, with a radius of 69.50 feet, a central angle of 49°39’20” , and a beginning radial which bears South 78°06’46” West;
Thence, North 54°24’23” West, 25.07 feet;
Thence northwesterly 9.81 feet, along a non-tangent curve, concave to the Northeast, with a radius of 6.25 feet, a central angle of 89°58’06” , and a beginning radial which bears South 04°32’30”East; Thence, South 79°49’17” West, 8.33 feet;
Thence, North 10°10’43”West, 71.31 feet, to the South line of said Section 25 and the North line of said Section 36;
Thence, continuing North 10°10’43”West, 72.85 feet;
Thence, South 79°49’17” West, 7.73 feet;
Thence, North 00°57’53” East, 11.23 feet;
Thence, North 18°39’06” East, 38.51 feet;
Thence northwesterly 34.56 feet more or less, to the North line of said Parcel 1, along a non-tangent curve, concave to the Northeast, with a radius of 56.50 feet, a central angle of 35°02’54” , and a beginning radial which bears South 53°05’37” West;
Thence, South 89°34’04” East, along said North line, 92.62 feet, more or less; Thence, South 00°25’56” West, 4.57 feet, more or less;
Thence southerly 12.57 feet, along a curve, concave to the Northeast, with a radius of 8.00 feet, and a central angle of 90°00’00”;
Thence, South 89°34’04” East, 20.97 feet;
Thence, South 00°25’56” West, 8.43 feet;
Thence, South 59°36’03” East, 8.68 feet;
Thence, South 00°25’56” West, 50.70 feet;
Thence, North 89°34’04” West, 6.04 feet;
Thence, South 11°10’56” East, 20.88 feet;
Thence, South 88°34’04” East, 2.99 feet;
Thence, South 00°25’56” West, 1.54 feet;
Thence, South 89°34’04” East, 8.67 feet;
Thence, South 00°25’56” West, 6.82 feet;
Thence, South 89°02’49” East, 16.62 feet;
Thence, South 10°51’18” East, 45.88 feet, to the South line of said Section 25 and the North line of said Section 36, and the TRUE POINT OF BEGINNING;
(Consisting of 0.86 acres more or less)
12/31/24
S10° 51' 18"E 93.62'
S89° 02' 49"E 16.62'
S53° 55' 11"E 32.37'S10° 27' 06"E 5.50'S79° 32' 54"W 156.69' L=60.23', R=69.50'D=49°39'20"
N54° 24' 23"W 25.07'L=9.81', R=6.25'D=89°58'06"S79° 49' 17"W 8.33'N10° 10' 43"W 71.31' N10° 10' 43"W 72.85'S79° 49' 17"W 7.73'N0° 57' 53"E 11.23' N18° 39' 06"E 38.51'L=34.56'±, R=56.50'D=35°02'54"
S89° 34' 04"E 92.62'±S0° 25' 56"W 4.57'±L=12.57', R=8.00'D=90°00'00"S89° 34' 04"E 20.97'S0° 25' 56"W 8.43'S59° 36' 03"E 8.68' S0° 25' 56"W 50.70'N89° 34' 04"W 6.04'
S11° 10' 56"E 20.88'S89° 34' 04"E 2.99'S0° 25' 56"W 1.54'S0° 25' 56"W 6.82'S89° 34' 04"E 8.67' N89° 34' 04"W 125.91'N89° 34' 04"W 144.14'
W. 8TH STREET
N. DOUTY STREETS. LINE SECT. 25-18/21N. LINE SECT. 36-18/21TRUE POINT OFBEGINNINGPOINT OFCOMMENCEMENT 12345678 129101113141516BLOCK 155CITY OFHANFORD
S78° 06' 46"W(R)
S53° 05' 37"W(R)
S4° 32' 30"E(R)
S10° 51' 18"E 45.88'
PARCEL CAREA-0.86 AC.
40.00'SE COR., SE14OF SW14 OFSEC. 25-18/21
324 S. SANTA FE, STE. AVISALIA, CA 93292TEL: 559.802.3052FAX: 559.802.3215www.4-creeks.com 240674240674-LEGALS08/21/24EXHIBIT BCOURTHOUSE CENTER-PARCEL CHANFORD, CA NORTH0'60' 60'STATE OF CALIFORNIAPROFESSIONAL LAND SURVEYORRANDY D. WASNICKEXP: 12/31/24PLS 8163
47 EXHIBIT “B”
Scope of Development
Scope of Development
1. Interior Cleanup and Basic Repairs
• Conduct a thorough inspection of the building's interior to identify and remove all accumulated debris and trash.
• Perform necessary basic repairs and addressing cosmetic damages. • Identify faulty electrical and plumbing issues
2. Plan Development and identification of key tenants for the project. • Put together master plan and approach key players in the Hanford area and surrounding areas.
• Identify businesses that are key to the success of the courthouse • Meet with key purveyors within these business segments to entice them to expand into the courthouse project.
3. Utility Identification and Planning
• Coordinate with utility providers to locate all existing utility connections, including water, gas, electricity, and emergency shut-offs.
• Document utility locations to prepare for construction and site improvements.
4. Water Drainage and Roof Repairs
• Inspect the condition of the roof to identify leaks and potential problem areas. • Patch any locations where water intrusion is occurring. • Monitor the effectiveness of repairs during subsequent rain events and make additional improvements as necessary.
• Install submersible pumps for secondary water intrusion measures
5. Elevator Modernization and Accessibility Improvements • Evaluate the existing elevator for necessary upgrades to improve functionality and ensure compliance with accessibility standards.
• Perform repairs and modernize components as needed to enhance safety, reliability, and ADA compliance.
6. Accessibility (ADA) Compliance Enhancements
• Exterior Access: Identify and create an accessible path of travel from the public right-of-way to the building entrance.
• Exterior Slope Adjustments: Repair or replace areas where walkway slopes do not meet ADA requirements.
• Interior Accessibility: Address ADA compliance in interior areas, including doorways, restrooms, and any other access points that do not meet current standards.
7. HVAC System Upgrades
• Upgrade the heating, ventilation, and air conditioning systems on a phased basis, with installations customized to suit tenant requirements as lease agreements are signed.
8. Bathroom Additions and Upgrades
• Construct new ADA-compliant restrooms on the second floor to increase building- wide accessibility.
• Renovate existing bathrooms to improve functionality.
9. Common Area Improvements
• Repair and upgrade all shared interior and exterior common areas, including lobbies, outdoor spaces, and corridors.
• Incorporate aesthetic and functional improvements in common areas.
10. Tenant Space Improvements
• Construct and customize tenant improvements based on the specific requirements and use cases of each tenant as lease agreements are finalized. • Coordinate phased build-outs to align with tenant move-in schedules.
11. Execute marketing campaign for the courthouse
• Advertise conceptual drawings and share key tenants in marketing materials • Utilize social media platforms
• Loopnet and onsite marketing
12. Update lighting and electrical
• Repair non-compliant electrical issues
• Repair faulty lighting as needed
• Update light fixtures and increase lighting throughout
48 EXHIBIT “C”
Schedule of Performance
ID Task
Mode
Task Name Duration Start Finish Predecessors Resource Names 1 Building Purchase 1 day Wed 1/1/25 Wed 1/1/25
2 Draft Plans for Tenant Improvements 60 days Thu 1/2/25 Wed 3/26/25 1 3 Start building clean up, general
maintanence and basic repairs or
upgrades
120 days Thu 1/2/25 Wed 6/18/25 1
4 Market for future tenants/lease spaces
as applicable
90 days Thu 6/19/25 Wed
10/22/25
3 5
Submit plans to building department
for approval process
90 days Thu 3/27/25 Wed 7/30/25 2
6 Submit approved planning dept plan to
building for plan check process
150 days Wed 3/1/23 Tue 9/26/23
7 Obtain building permit 1 day Thu 7/31/25 Thu 7/31/25 5 8 Start Barrelhouse tenant
improvements
180 days Fri 8/1/25 Thu 4/9/26 7
9 Final Inspections and corrections 10 days Fri 4/10/26 Thu 4/23/26 8 10 Complete improvements and open
Barrelhouse
30 days Fri 4/24/26 Thu 6/4/26 9
T W T F S S
Feb 26, '23 Mar 5, '23
Task
Split
Milestone
Summary
Project Summary
External Tasks
External Milestone
Inactive Task
Inactive Milestone
Inactive Summary
Manual Task
Duration-only
Manual Summary Rollup
Manual Summary
Start-only
Finish-only
Deadline
Progress
Hanford Courthouse Schedule 10/16/2024
Project: Courthouse Preliminary S
Date: Wed 10/16/24
49 EXHIBIT “D”
Insurance Requirements
a. Developer, at Developer’s own cost and expense, shall procure and maintain, prior to completion of the Project, the following insurance policies.
i. Workers Compensation Coverage. As required by the State of California, with Statutory Limits, and Employer’s Liability Insurance with a limit of no less than ONE MILLION AND NO/100 DOLLARS ($1,000,000) per accident for bodily injury or disease.
ii. Commercial General Liability (CGL) Coverage. Insurance Services Office (ISO) Form CG 0001, including products and completed operations, with a limit of no less than TWO MILLION AND NO/100 DOLLARS ($2,000,000) per occurrence for bodily injury, personal injury, and property damage, and a general agg regate limit of no less than FOUR MILLION AND NO/100 DOLLARS ($4,000,000).
iii. Automobile Liability Coverage. ISO Form Number CA 0001 covering any auto (Code 1), or if Contractor has no owned autos, Code 8 (hired) and 9 (non-owned),with a limit no less than ONE MILLION AND NO/100 DOLLARS ( $1,000,000) per accident for bodily injury and property damage.
iv. Builder’s Risk . To the extent that damage to the Property is not covered by Developer’s property insurance, Developer shall maintain or cause to be maintained coverage of the type now known as builder’s completed value risk insurance, as delineated on an All-Risk Builder’s Risk 100% Value Non-Reporting Form. Such insurance shall insure against direct physical loss or damage by fire, lightning, wind, storm, explosion, collapse, underground hazards, flood, vandalism, malicious mischief, glass breakage and such other causes as are covered by such form of insurance. Such policy shall include:
(1) an endorsement for broad form property damage, breach of warranty, demolition costs and debris removal; (2) a “Replacement Cost Endorsement” in amount sufficient to prevent Developer from becoming a co-insurer under the terms of the policy, but in any event in an amount not less than one hundred percent (100%) of the then full replacement cost, to be determined at least once annually and subject to approval by Agency; and (3) an endorsement to include coverage for budgeted soft costs. The replacement cost coverage shall be for work performed and equipment, supplies and materials furnished to the Property, or any adjoining sidewalks, streets and passageways, or to any bonded warehouse for storage pending incorporation into the work, without deduction for physical depreciation and with a deductible not exceeding TWENTY-FIVE THOUSAND AND NO/100 DOLLARS ($25,000) per occurrence.
v. Professional Liability. Developer shall cause the Project architect, engineer, and general contractor, to maintain professional liability coverage with limits no less than TWO MILLION AND NO/100 DOLLARS ($2,000,000) per occurrence or claim, and TWO MILLION AND NO/100 DOLLARS ($2,000,000) policy aggregate.
vi. Contractors’ Pollution Legal Liability and/or Asbestos Legal Liability and/or Errors and Omissions (if project involves environmental hazards) with limits no less than ONE MILLION AND NO/100 DOLLARS ($1,000,000) per occurrence, and TWO MILLION AND NO/100 DOLLARS ($2,000,000) policy aggregate. If services will involve lead-based paint or asbestos identification/remediation, the policy shall not contain lead- based paint or asbestos exclusions. If services will involve mold identification/remediation, the Contractors Pollution
50 Liability policy shall not contain a mold exclusion, and the definition of Pollution shall include microbial matter, including mold.
vii. Property. Upon completion of construction of the Project, Developer shall maintain property insurance covering all risks of loss, for one hundred percent (100%) of the replacement value of all structures located at the Property, with deductible, if any, in an amount reasonably acceptable to City.
If Developer maintains higher limits than the minimums shown above, City requires and shall be entitled to coverage for the higher limits maintained by Developer.
Contractor may maintain an Umbrella policy in conjunction with the insurance policies referenced above. In such case, Contractor shall be deemed to have satisfied the insurance requirements of this Agreement as long as: (i) the coverage limits of the Umbrella policy and of the underlying liability policy(ies), when combined, satisfy each of the per occurrence and aggregate requirements identified in this section; and (ii) coverage under the Umbrella policy is as broad as and includes all incidents and events covered by the underlying insurance that it supplements.
b. Any deductibles or self-insured retentions must be declared to and approved by the City.
c. The policies are to contain, or be endorsed to contain, the following provisions:
i. City and its officers, officials, employees, and agents are to be covered as additional insureds on the CGL and automobile liability policies with respect to liability arising out of work or operations performed by or on behalf of Developer including materials, parts, or equipment furnished in connection with such work or operations; products used by Developer; or automobiles owned, leased, hired or borrowed by Developer. General liability coverage can be provided in the form of an endorsement to Devel oper’s insurance at least as broad as ISO Form CG 20 10 11 85 or if not available, through the addition of both CG 20 10, CG 20 26, CG 20 33 or CG 20 38 and CG 20 37 if a later edition is used. The coverage shall contain no special limitations on the scope of protection afforded to City and its officers, officials, employees, or agents.
ii. For any claims related to this Agreement, Developer’s insurance coverage shall be primary coverage at least as broad as ISO CG 20 01 04 13 as to the City and its officers, officials, employees, and agents. Any insurance or self -insurance maintained b y the City and/or its officers, officials, employees, or agents shall be in excess of Developer’s insurance and shall be non-contributory.
iii. Each insurance policy required above shall provide that coverage shall not be canceled or modified, except with fifteen (15) days prior written notice to the City.
Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A:VII.
51 Developer shall furnish City with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause. All certificates and endorsements are to be received and approved by City before wor k commences. However, failure to obtain the required documents prior to the work beginning shall not waive the Developer’s obligation to provide them. City reserves the right to require complete, certified copies of all required insurance policies, inclu ding endorsements required by these specifications, at any time.
d. Developer hereby grants to City and its officers, officials, employees, and agents a waiver of any right to subrogation which any insurer of Developer may acquire against City and/or its officers, officials, employees, and agents by virtue of the payment o f any loss under such insurance. Developer agrees to obtain endorsements necessary to effect this waiver of subrogation, but this provision applies regardless of whether or not City has received a waiver of subrogation endorsement from the insurer.
e. Developer may submit evidence of Builder’s Risk insurance in the form of Course of Construction coverage.
f. Developer’s insurance policies shall be “occurrence” policies and not “claims - made” coverage, except for Professional Liability Coverage. If any coverage required is written on a claims-made coverage form:
i. The retroactive date must be shown, and this date must before the execution date of this contract or the beginning date of contractor work.
ii. Insurance must be maintained and evidence of insurance must be provided for at least five (5) years after completion of contract work.
iii. If coverage is canceled or non -renewed and not replaced without another claims-made policy form with a retroactive date prior to the contract effective date, or start of work date, Contractor must purchase extended reporting period coverage for a minimum of five (5) years after completion of contract work.
iv. A copy of the claims reporting requirements must be submitted to City for review and approval.
52 EXHIBIT “E”
Certificate of Compliance
RECORDATION REQUESTED BY:
City of Hanford
319 N. Douty St.
Hanford, CA 93230
AFTER RECORDATION RETURN TO:
PLEASE RECORD WITHOUT FEE PURSUANT TO GOVERNMENT CODE SECTION 6103
CERTIFICATE OF COMPLIANCE
This certificate is provided pursuant to Section III.J. of that Disposition and Development Agreement dated __________________,2024 (“Agreement”) by and between the CITY OF HANFORD, a municipal corporation, and ____________(“ Developer”). This certificate is not a notice of completion pursuant to Section 3093 of the California Civil Code.
This certificate shall evidence City ’s determination of satisfactory completion by Developer of the construction of required improvements under the Agreement with respect to the Project as described in the Agreement and located in Hanford, California as more particularly described in the legal description attached hereto as Exhibit “1” (“Project”). As of the date that this certificate is recorded, the covenants and obligations imposed upon the Developer regarding construction of the Project pursuant to the Agreement shall be deemed satisfied and the terms and conditions of the Agreement as such terms and conditions relate to construction of the Project shall no longer be applicable except as otherwise provided in the Agreement.
Executed this day of ,202__.
CITY OF HANFORD
By: ______________________________
MARIO A. CIFUENTEZ, II
City Manager
53
Council Future Agenda Items
Originated
Date Item Originator Staff Lead Date Estimate
8/6/2024 Presentation to the City Council
regarding the next steps in the process
for the Hidden Valley Park expansion
and more detail related to the chosen
Concept #5
Council
Direction
Various Staff 12/3/2024
8/14/2024 Council discussion of the celebration
for the 100th Anniversary of the Civic
Auditorium direction regarding the
community events.
City Manager Brad Albert 11/19/2024
10/1/2024 Presentation to the City Council of a
comprehensive needs analysis of the
City’s Historic Buildings and options for
future uses and possible funding
mechanisms
Council
Direction
Various Staff 1/21/2025