1 of 16
REAL PROPERTY DONATION AGREEMENT AND JOINT ESCROW
INSTRUCTIONS
By and Between
CITY OF MORENO VALLEY,
a California General Law Municipality
and
SOPAC PROPERTY HOLDINGS, LLC,
a Delaware limited liability company
(City of Moreno Valley, County of Riverside, State of California Assessor Parcel Nos. 422-070-029, 422-070-030, and 422-070-031)
2 of 16
REAL PROPERTY DONATION AGREEMENT AND ESCROW INSTRUCTIONS
This REAL PROPERTY DONATION AGREEMENT AND JOINT ESCROW INSTRUCTIONS (“Agreement”), is entered into as of _______________________, 2025 (the “Effective Date” to be inserted by Escrow) by and between the City of Moreno Valley, a California general law municipality (“City” or “Donee”), and SOPAC PROPERTY HOLDINGS, LLC, a Delaware limited liability company ("Donor").
RECITALS
The following recitals are a substantive part of this Agreement:
A. Donor is the record owner of Assessor Parcel Nos. (“APN”) 422-070-029, 422-070- 030, and 422-070-031, located in the City of Moreno Valley, County of Riverside, State of California. Said real property, including improvements thereon, if any, is collecƟvely referred to as the “DonaƟon Property.” The DonaƟon Property is primarily vacant land. APN No. 422-070- 029 is improved with a residence constructed in 1979 which is planned for demoliƟon; and the remaining parcels (422-070-030 and 422-070-031) are unimproved, vacant land. The parƟes further contemplate that approximately ___ acre of APN No. 422-070-031 will be reserved for acquisiƟon by donaƟon by the Eastern Municipal Water District (“EMWD”) for a future booster pump substaƟon site to serve the World LogisƟcs Specific Plan and eastern Moreno Valley.
B. To address the electrical infrastructure needs of the World LogisƟcs Center Specific Plan, the parƟes have idenƟfied a porƟon of the DonaƟon Property to be conveyed to the City by easement for electric uƟlity purposes, including but not limited to baƩery energy storage, substaƟons, transformers, switching equipment, and related faciliƟes (the “Electric UƟlity Easement Area).” Exhibit “C” depicts the locaƟon of the Electric UƟlity Easement Area, along with the approximate minimum dimensions (159,685 square feet/3.66 acres).
C. City desires to acquire from Donor APN Nos. 422-070-029, 422-070-030, and a porƟon of 422-070-031 as more parƟcularly described in Exhibits "A" and "B” aƩached hereto as AƩachment "1" and incorporated herein by reference (the "DonaƟon Property") at no cost to the City. Exhibit “A” is the Grant Deed for the DonaƟon Property, and Exhibit “B” is the Legal DescripƟon and Vicinity Map for the DonaƟon Property. The DonaƟon Property is to be used exclusively for the adopted World LogisƟcs Center Specific Plan’s substaƟon, as contemplated in SecƟon 3.5.5 of the Specific Plan (“Specific Plan”), except for that porƟon of APN No. 422-070- 031 to be acquired by EMWD by separate donaƟon agreement. If, for whatever reason, the DonaƟon Property is not to be constructed and operated as described in this paragraph, City or its designee shall cause the DonaƟon Property to be reconveyed to Donor by grant deed, in a form acceptable to Donor and upon Donor’s wriƩen demand as described below.
C. City's acquisition of the Donation Property, pursuant to the terms of this Agreement, are in the best interests of the City, and in accord with the provisions of applicable state and local laws and requirements. Design, construction, and operation of the substation and the Electric Utility Easement Area, will be through Moreno Valley Utility (“MVU”). MVU is the electricity provider for the World Logistics Center Specific Plan.
3 of 16
D. City and Donor acknowledge that no further permiƫng or compliance with the California Environmental Quality Act (“CEQA”) is required for purposes of this Agreement because Donee has determined that no environmental review is required as approval of this Agreement consƟtutes a subsequent acƟon that is part of the cerƟfied World LogisƟcs Center (“WLC”) project for which the WLC Revised Final Environmental Impact Report (“EIR”) was previously cerƟfied.
AGREEMENT
NOW, THEREFORE, in consideration of the agreements, covenants, and conditions contained herein, and for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, the parties to this Agreement agree as follows:
SECTION 1
DONATION PROPERTY
1.0 CondiƟon of DonaƟon Property. In accordance with and subject to the terms and provisions of this Agreement, Donor will donate the DonaƟon Property to City in its “as-is” condiƟon, with only one excepƟon, namely, that Donor will demolish any exisƟng residenƟal structure(s). Other than as expressly set forth in this Agreement: (a) Donee agrees that Donee is acquiring the DonaƟon Property in its “as is” condiƟon and accepts the DonaƟon Property in that condiƟon with all faults, if any, and without any warranƟes, express or implied; and (b) neither Donor nor any agent, representaƟve, or employee of Donor has made any warranƟes or representaƟons to Donee or its agents, representaƟves, or employees with respect to the DonaƟon Property. The DonaƟon Property will be held and maintained by Donor in the same condiƟon that exists on the EffecƟve Date of this Agreement (except as to demoliƟon of any exisƟng residenƟal structure(s). Donee acknowledges it has been afforded the opportunity to make independent inspecƟons (or have such inspecƟons made by its consultants) as it desires of the DonaƟon Property and to obtain informaƟon regarding all applicable governmental laws and regulaƟons to which the DonaƟon Property is or may be subject to at the Close of Escrow. Donee is relying solely on its own invesƟgaƟons and inspecƟons as to the DonaƟon Property.
1.1 Use of Donation Property. The Donation Property shall be used by City or its designee for the adopted World Logistics Center Specific Plan’s new substation. If, for whatever reason, the Donation Property is not to be constructed and operated as described herein, City or its designee shall cause the Donation Property to be reconveyed to Donor by grant deed, in a form acceptable to Donor and upon Donor’s written demand. Such reconveyance shall be without delay and without any other or additional action required by either Donee or Donor.
Said reconveyance, if any, shall be in fee simple absolute, free and clear of all liens, encumbrances, assessments, leases, and taxes except for Approved Exceptions. Notwithstanding any provision in this Agreement, City shall not use any portion of the Donation Property for any purpose except as contemplated herein. If City uses the Donation Property for any purpose other than as explicitly contemplated herein, such use shall constitute City’s material breach of this Agreement entitling Donor to an interim order compelling City to halt all such use and restore the Donation Property to a broom-clean condition for immediate reconveyance to Donor. Donor may use the Donation Property for temporary use until such time as City needs said property for the substation. City shall issue a temporary use permit for any such use, which permit will
4 of 16
function as a license, pursuant to this Agreement, for Donor’s temporary use. City will provide Donor with ninety (90) days’ written notice of the need for the Donation Property as a substation, at which point, Donor’s temporary use/license shall expire without any further action; and Donor shall remove any temporary uses onsite, and return said property to a broom clean condition where such temporary use(s) had occurred. Consideration for Donor’s temporary usage is contained in this Agreement
1.2 Development of SubstaƟon/BaƩery Storage. The parƟes acknowledge and agree that the design, development, construcƟon, and use of the DonaƟon Property for the new substaƟon, as well as the Electric UƟlity Easement Area area (Exhibit C) shall fully comply with the WLC’s Specific Plan’s building setbacks; landscaping; streetscapes; general design criteria, streetscape planƟng; landscape buffers; water quality; screening (e.g., walls, berms, and/or landscaping); public parkway requirements, miƟgaƟon measures, if any; and other Specific Plan SecƟon 5.0 On-Site Design Standards, as applicable (Specific Plan Requirements). The parƟes further acknowledge and agree that City or its designee shall fully comply with all applicable Specific Plan Requirements with respect to World LogisƟcs Center Parkway (formerly, Theodore Street).
SECTION 2
CONDITION OF TITLE
2.0 Title Review. Within fifteen (15) days of the Effective Date, City shall cause Title Company to deliver to City and Donor an Amended Preliminary Report, effective date of January 13, 2025 (Order No. 00197428-987-OC1-KDJ), or as amended thereafter (“Preliminary Report”), along with all exceptions and a color-coded map depicting each exception, of the Donation Property.
City shall review title to the Donation Property as disclosed in the Preliminary Report and may deliver to Donor any objections City has to the Title and Donor shall, within ten (10) days following such notice, advise City of Donor's intent to remedy any such objections. In the event Donor advises City that Donor is not willing to remedy any of the objections, then City may (i) terminate this Agreement by giving written notice to Donor and Escrow Agent; or (ii) proceed to Closing and in such case, said objections shall become part of the Permitted Exceptions (as herein defined).
Notwithstanding any language herein to the contrary, any monetary lien (including, but not limited to, mechanic's liens or liens for delinquent unpaid taxes and assessments) must be released by Donor prior to Closing. The term "Permitted Exceptions" means (i) standard exceptions contained in the title insurance policy form, (ii) the specific title exceptions contained in the title insurance policy form that the Title Company has not agreed to insure or remove from the Title Commitment and that Donor is unwilling to remove as provided above; (iii) items which would be disclosed by an accurate ALTA survey of the Donation Property; and (iv) real estate taxes not yet due and payable.
5 of 16
In the event the Title Company amends or updates the Title Commitment after expiration of the Due Diligence Period but before the Closing Date (each, a "Title Report Update") and such Title Report Update discloses a new title exception not previously known to City and which was not created or permitted by City, then City as Donee may either (i) terminate this Agreement by giving written notice to Donor within ten (10) business days after its receipt of such Title Report Update, or (ii) require Donor to remove the exception prior to Closing, or (iii) waive the exception and proceed to Closing.
From the Effective Date until the earlier of termination of this Agreement or Close of Escrow, Donor shall not encumber the Donation Property with any additional monetary liens.
Additionally, Donor shall not take any affirmative action from the Effective Date until Close of Escrow that results in the imposition of any additional exceptions to title to the Donation Property, without first obtaining City’s written consent.
SECTION 3
ESCROW INSTRUCTIONS
3.0 Escrow Agent/Title Company. Chicago Title Company, 4911 Birch Street, Newport Beach, California, will act escrow agent and establish an escrow for this transaction.
Chicago Title Company, same Newport Beach location, above, will also act at the title company for this transaction.
3.1 Escrow Instructions. This Agreement, together with any standard instructions of Escrow Agent, shall constitute the joint escrow instructions of Donee and Donor to Escrow Agent, as well as an agreement between Donee and Donor. In the event of any conflict between the provisions of this Agreement and Escrow Agent's standard instructions, this Agreement shall control and prevail unless the parties mutually agree in writing otherwise.
3.2 Close of Escrow. The close of the escrow shall occur on or before February __, 2025 or a date for which the parties agree by written amendment, prepared by Escrow Agent and signed by both Donor and Donee (“Closing Date”), contingent upon City acceptance of the Donation Property ("Close of Escrow").
3.3 Payment of Costs. City shall pay all escrow and title fees (or taxes, if applicable).
City shall pay all title insurance premiums for the City's Title Policy premium. Donor shall pay the costs required to remove any monetary liens and encumbrances affecting the Donation Property and any other title exceptions Donor agreed to remove pursuant to this Agreement. Any other costs or expenses not otherwise provided for in this Agreement shall be paid by the requesting party. Donor and Donee shall each be responsible for all their respective administrative costs and attorneys' fees and costs, if any.
3.4 Commission. Donor and Donee each represent and warrant to the other that no broker or finder is entitled to any commission or finder's fee in connection with this Agreement,
6 of 16
and each agrees to defend and hold harmless the other from any claim to any such commission or fee resulting from any action on its part.
3.5 Proration of Real Property Taxes. Donee is a public entity and is not required to pay property taxes. Donor shall pay all property taxes and assessments which may be assessed during the period of Donor's ownership of the Donation Property. Donor may apply for a refund for any portion of taxes and assessments paid by Donor and are allocated to any period after the Closing Date, in accordance with the applicable provisions of the Revenue and Taxation Code.
3.6 Nature Hazard Disclosure. The parties hereby instruct Escrow Agent to obtain and deliver to Donee within three (3) days after the Effective Date a Natural Disclosure Statement disclosing whether the Donation Property is located within any of the following: (a) a special flood hazard area designated by the Federal Emergency Management Agency; (b) an area of potential flooding; (c) a very high fire hazard severity zone; (d) an earthquake fault or special studies zone; or (e) a seismic hazard zone.
3.7 General Provisions Applicable to Escrow Agent. The following general provisions shall be applicable to the Escrow Agent.
(a) All disbursements shall be made by check or bank wire of the Escrow Agent. All funds received in the Escrow shall be deposited in a separate interest-earning escrow account with any bank doing business in the State of California and approved by Donee.
(b) The parties to the Escrow jointly and severally agree to pay all costs, damages, judgments and expenses, including reasonable attorneys’ fees, suffered or incurred by the Escrow Agent in connection with, or arising out of the Escrow, including, but without limiting the generality of the foregoing, a suit in interpleader brought by the Escrow Agent. In the event that the Escrow Agent files a suit in interpleader, the Escrow Agent shall be fully released and discharged from all obligations imposed upon the Escrow Agent in the Escrow.
(c) All proration's and/or adjustments called for in the Escrow shall be made on a per-day basis using a thirty (30) day month and a three-hundred-sixty- five (365) day year, unless the Escrow Agent is otherwise instructed by the parties in writing.
3.8 Authority of Escrow Agent. The Escrow Agent is authorized to, and shall:
(a) If applicable, pay and charge Donee for any Escrow Costs, charge Donee for the cost of drawing the Grant Deed, recording fees, notary fees, and any state, county or local documentary transfer fees;
7 of 16
(b) Pay and charge Donee for the premium of the Title Policy insured in the amount of $_____________, and, if applicable, pay and charge Donee for any upgrade of the Title Policy or Additional Endorsements to the Title Policy which are requested by City;
(c) Accept Donor’s appraisal of the full appraised market value of the Donation Property to be provided by Donor at its sole expense and distribute appraisal report to both Donor and Donee prior to the Close of Escrow;
(d) Disburse funds and record and deliver to Donee the Grant Deed and Title Policy when both Donee’s Closing Conditions and the Donor’s Closing Conditions to the Closing are satisfied or waived in writing by the party for whom the condition was established;
(e) insert the Effective Date in the introductory paragraph of this Agreement and the appropriate amounts and date of the Closing in documents deposited by the parties in Escrow;
(f) Do such other actions as necessary to fulfill the Escrow Agent’s obligations under this Agreement, including, if applicable, obtaining the Title Policy and recording any instrument delivered through Escrow if necessary and proper in the issuance of the Title Policy, and filing and posting any CEQA- required notice(s) required by City under this Agreement (and any such costs for such filing and posting shall be paid by City);
(g) Within the discretion of the Escrow Agent, direct Donee and Donor to execute and deliver any instrument, affidavit or statement, and to perform any act reasonably necessary and/or applicable to comply with the provisions of FIRPTA and any similar state act or regulation promulgated thereunder. Donor agrees to execute a Certificate of Non-Foreign Status by individual transferor, a Certificate of Compliance with Real Estate Reporting Requirement of the 1986 Tax Reform Act and/or a California Franchise Tax Board Form 590 or similar form, if applicable, to assure Donee that there exist no withholding requirements imposed by application of law as may be required by the Escrow Agent, on forms supplied by the Escrow Agent;
(H) Prepare and file with all appropriate governmental or taxing authorities a uniform settlement statement, closing statement, tax withholding forms, including an IRS 1099-S form, and be responsible for withholding taxes, if any such forms and/or withholding are provided for or required by law; and
8 of 16
(h) Prepare and deliver to Donee and Donor for their review and approval prior to the Closing an estimated settlement statement.
3.9 Submittals into Escrow. The parties shall submit documents and funds into Escrow as set forth in this Section.
(a) Submittals by Donor.
(i) At least two (2) days prior to the Closing, Donor shall provide sufficient funds to cover all Closing costs to be paid by Donor, if any.
(ii) Donor shall provide a non-foreign transferor affidavit in a form acceptable to Escrow Agent, if applicable.
(iii) Within two (2) days prior to the Closing, Donor shall provide Donee and Escrow with the final CEQA Notice of Determination stating that the Donee has approved this Agreement and determined that no environmental review is required because the Agreement and related uses are part of the WLC project for which the Revised Final EIR was previously certified.
(b) Submittals by Donee.
(i) At least two (2) days prior to the Closing, Donee shall submit into Escrow the original Grant Deed duly executed by Donor and the original Certificate of Acceptance of the Grant Deed, duly executed by Donee.
(ii) At least two (2) days prior to the Closing, Donee shall provide sufficient funds to cover all Closing costs to be paid by Donee, if any.
(iii) At least two (2) days prior to the Closing, Donee shall submit into Escrow the Battery Storage Easement executed by Donor.
3.10 Closing Procedure. The Escrow Agent shall close the Escrow as follows:
(a) Record the Grant Deed with the Riverside County Recorder's Office;
(b) Deliver the Title Policy issued by the Title Company to Donee;
(c) File and Post the final Notice of Determination as required by law;
(d) File any informational reports required by Internal Revenue Code Section
9 of 16
6045(e), as amended and any other applicable requirements;
(e) Deliver the FIRPTA Certificate, if any, to Donee; and
(f) Forward to Donee and Donor a separate accounting of all funds received and disbursed for each party and copies of all executed, recorded, or filed documents deposited into Escrow, with such recording and filing date and information endorsed thereon.
SECTION 4
OTHER TERMS AND CONDITIONS
4.0 Representations and Warranties. Donee warrants that this Agreement constitutes a written, binding obligation of the Donee. Donor warrants that the Agreement constitutes a written binding obligation of the Donor. The parties hereto represent that they have full authority to enter into this Agreement on behalf of their respective entity, district, or public agency.
4.1 Other Agreements. Donee agrees to fully cooperate with Donor’s fair market value determinaƟon; however, Donee is under no obligaƟon to agree to such value. Donor will obtain independent counsel and is solely responsible for compliance with any applicable giŌ substanƟaƟon requirements of any tax code. Donee’s obligaƟon will be to acknowledge receipt of a donaƟon of the DonaƟon Property by execuƟng all required tax forms, if any, before Close of Escrow. Donee acknowledges it has not provided Donor with anything of value in exchange for the DonaƟon Property.
4.2 TerminaƟon of Agreement. Donee and Donor mutually agree that this Agreement shall be effecƟve through June 30, 2025, unless further extended in wriƟng by Donee and Donor.
The parƟes hereto mutually agree that if Close of Escrow does not occur on or before June 30, 2025, and if this Agreement is not extended by Donee and Donor, it shall terminate at 5:00 p.m., on June 30, 2025.
4.3 Survival. All of the terms, provisions, representaƟons, warranƟes, and covenants under this Agreement shall survive the assignment, expiraƟon, or terminaƟon of this Agreement and shall not merge in the Grant Deed or other documents following the recordaƟon of such deed or other documents.
4.4 Possession of DonaƟon Property. Possession of the DonaƟon Property shall be delivered to Donee at the Close of Escrow.
4.5 AƩorneys’ Fees. Should either party insƟtute any acƟon or proceed to enforce any provision of this Agreement, the prevailing party shall be enƟtled to receive all costs and expenses, including reasonable aƩorney’s’ fees incurred by such prevailing party in connecƟon with such acƟon or proceeding, at trial or on any appeal.
10 of 16
4.6 Assignments and Successors. This Agreement shall inure to the benefit of and shall be binding upon the ParƟes to this Agreement and their respecƟve heirs, successors, and assigns.
4.7 NoƟces. All noƟces under this Agreement shall be in wriƟng and emailed and/or deposited in the U.S. Mail, by registered or cerƟfied mail, with postage and charges prepaid and addressed to the parƟes below, and deemed to have been effecƟvely delivered to the respecƟve party to whom it is directed, as follows:
Donor: SOPAC Property Holdings, LLC
Iddo Benzeevi
[email protected]
Patrick Revere
[email protected]
Bobby Kohlƞarber
bkohlƞ[email protected]
29000 Eucalyptus Ave.
Moreno Valley, CA 92555
Donee: City of Moreno Valley
Jason Niccoli
[email protected]
Electric UƟlity Division Manager
Public Works
14331 Frederick Street
Moreno Valley, CA 92553
4.8 EnƟre Agreement. The parƟes have herein set forth the whole of their agreement.
Performance of this Agreement consƟtutes the enƟre consideraƟon. Donor has no other right or claim for compensaƟon arising out of or in connecƟon with the acquisiƟon of the DonaƟon Property by City.
4.9 ConstrucƟon. This Agreement shall not be construed as if it had been prepared by one of the parƟes, but rather as if both parƟes had prepared it. The parƟes and their counsel have read and reviewed this Agreement and hereby agree that any rule of construcƟon to the effect that ambiguiƟes are to be resolved against the draŌing party shall not apply in the interpretaƟon of this Agreement. The Recitals, above, are true and correct and shall be enforceable as part of this Agreement.
4.10 Further Assurances. Whenever requested to do so by the other party, each party shall execute, acknowledge, and deliver all further conveyances, assignments confirmaƟons, releases, instruments, approvals, consents, and all further instruments and documents as may be necessary, expedient, proper, or desired in order to complete all such conveyances, et al. and all further instruments and documents under this Agreement, and do all other acts and to execute,
11 of 16
and deliver all documents as requested in order to carry out the intent and purpose of this Agreement.
4.11 Right to Enter Property. Commencing with execuƟon of this Agreement, City or its designee shall be allowed access to the DonaƟon Property prior to the Close of Escrow, at all reasonable Ɵmes for the purpose of obtaining data and making surveys, inspecƟons, and other studies at City’s sole expense necessary to carry out this Agreement or as required by law. City or its designee shall procure and maintain all required insurance policies, including worker’s compensaƟon, commercial liability insurance, and any other appropriate insurance necessary for access to the DonaƟon Property. City or its designee shall, upon compleƟon of data gathering, making surveys, tests, inspecƟons, and other studies, restore the DonaƟon Property to the extent reasonably possible to its condiƟon prior to such data gathering, surveys, tests, inspecƟons, and other studies. City or its designee shall indemnify, defend, and hold harmless Donor from all mechanic’s liens, claims, acƟons, liabiliƟes, costs, expenses, including aƩorneys’ fees, and damages of any type or nature arising out of or in any way related to any use of or entry onto the DonaƟon Property by Donee or any other person on behalf of Donee.
4.12 Dispute ResoluƟon/MediaƟon/ArbitraƟon. The parƟes shall aƩempt in good faith to mediate and resolve any dispute, claim, or controversy arising from or relaƟng to this Agreement by negoƟaƟng promptly and in advance of any noƟce of arbitraƟon. Said mediaƟon shall take place between the parƟes’ senior personnel with authority to seƩle the dispute, claim, or controversy. The mediaƟon process shall not exceed forty-five (45) days from noƟce of mediaƟon by any party. If mediaƟon is unsuccessful, the arbitraƟon provision below shall apply without any further acƟon by any party.
Any dispute, claim, or controversy arising from or related to this Agreement for the breach, terminaƟon, enforcement, interpretaƟon, or validity thereof, including the determinaƟon of the scope or applicability of this Agreement to arbitrate, shall be determined by arbitraƟon in Riverside County before one mutually agreed upon arbitrator. The arbitraƟon shall be administered by JAMS pursuant to JAMS’ Streamlined ArbitraƟon Rules and Procedures.
Judgment on the arbitraƟon award may be entered in Riverside County Superior Court. This arbitraƟon provision shall not preclude the parƟes from seeking provisional remedies in aid of arbitraƟon from Riverside County Superior Court.
4.13 Counterparts. This Agreement and any amendments hereto may be executed in any number of counterparts and by each party in separate counterparts, each of which when so executed and delivered shall be deemed an original and all of which taken together shall consƟtute one and the same instrument.
IN WITNESS WHEREOF, the Parties have executed this Agreement on the respective dates set forth below:
Dated: ______________
"DONOR"
12 of 16
SOPAC PROPERTY HOLDINGS, LLC, a Delaware
limited liability company
By: Highland Fairview Construction, Inc., a
California corporation, and Highland
Fairview Operating Company, a Delaware
general partnership
Its: Agent
By:__________________________________
Iddo Benzeevi, President
Dated: _____________
"DONEE"
City of Moreno Valley
By:_________________________________
Name:______________________________
Its:_________________________________
13 of 16
ATTACHMENT 1
REAL PROPERTY DONATION AGREEMENT AND ESCROW INSTRUCTIONS (City of Moreno Valley, County of Riverside, State of California Portion of Assessor Parcel Number 422-070-031)
14 of 16
EXHIBIT “A”
GRANT DEED
15 of 16
EXHIBIT “B”
LEGAL DESCRIPTION AND VICINITY MAP
16 of 16
EXHIBIT “C”
LEGAL DESCRIPTION AND VICINITY MAP–BATTERY STORAGE
EASEMENT