Ontario City Council
June 3, 2025

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Conflicts of Interest.

Advance Waiver. Stoel Rives represents companies, individuals, and government agencies in many matters throughout many jurisdictions. During the time we are representing you, we may represent other clients (“Firm clients”) in disputes or transactions adverse to you that are not substantially related to the Engagement and do not materially limit our ability to represent you.

By signing this letter, you consent to our present and future representation of these Firm clients and other adversaries/competitors. This consent, if provided, also allows Stoel Rives to take positions adverse to either you, or any of your affiliates, in any matters (whether involving the same substantive areas of law for which you have retained the Firm or some other unrelated areas of law, and whether involving transactional, litigation, or advisory matters), so long as two conditions are met: (1) the representation does not involve any work that we have done for you; and (2) the representation would not place us in a position to use your confidential information adversely to you.

Because the work that we have been asked to perform on the Engagement is unrelated to any present matter we are handling adverse to you and under the terms of our agreement would be unrelated to any future matters we may take on adverse to you, we do not believe that there is a material risk that your confidential information will be used adversely to you. Similarly, the lack of a relationship between our work for you under the Engagement and our work for other clients – current and future – suggests to us that there is little risk that our efforts on your behalf will be affected. Although we do not believe that these factors would affect your representation, you should review this yourself.

To ensure that any consent you provide is fully informed, I welcome any questions you have and recommend that you review the issue of consent with independent counsel. Whether you actually do, however, is up to you.

Principal Attorneys Handling Your Matter(s). Mike Brown, Christopher Pooser, Whitney Brown and I will be the attorneys principally responsible for the Engagement. However, as our representation progresses and issues arise, other attorneys at Stoel Rives may become responsible for and handle certain aspects of our work for you. If you ever have any questions or concerns about how we staff matters, please do not hesitate to let me know. Otherwise, we will use our judgment to determine how to staff matters in the most cost-effective manner possible.

We are pleased to offer the City of Ontario the following rates for the lawyers and professional staff we currently expect to work on this matter. The hourly rates represent a very significant discount from our regular rates and are applicable only to this matter through FY 2025/26. If the matter continues beyond FY 2025/26 both parties agree to negotiate the rates and pricing arrangement to ensure it is mutually beneficial for both parties.

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Mr. Scott Burton
City of Ontario
April 30, 2025

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Elizabeth Ewens - $485
Michael Brown - $595
Christopher Pooser - $570
Whitney Brown - $375.50
Ha Nguyen (paralegal) - $295

If other timekeepers work on this matter, we will bill them at a discount which approximates the discount being offered on the timekeepers listed above. Unless the Client agrees in writing in advance, fees under this Engagement incurred during FY 2025/26 shall not exceed $60,000, and for FY 2026/27 also shall not exceed $60,000. In the event that the Client does not authorize fees to exceed this amount, and incurred legal fees exceed $120,000 for FY 2025/26 and FY 2026/27 then the Client agrees that it will not oppose any request or motion by the Firm to withdraw as counsel.

Independent Contractor Status. In the performance of legal services under this Agreement, Firm shall be, and acknowledges that Law Firm is, in fact and under law, an independent contractor and not an agent or employee of the Client. Law Firm has and retains the right to exercise full supervision and control of the manner and methods of providing services to Client under this Agreement.

Insurance. Firm maintains errors and omissions insurance coverage that would apply to the services to be rendered under this agreement. The policy limits of the errors and omissions insurance coverage are $50,000,000.00 per claim, and $100,000,000.00 aggregate. Additionally, Firm shall maintain these various forms of insurance:

(1) Professional Liability: $50 million per claim; $100 million aggregate, (2) Workers’ Compensation: $1 million policy limit,
(3) Commercial Liability: $2 million per occurrence; $4 million aggregate, (4) Automobile: $2 million, combined single limit,
(5) Umbrella Policy: $5 million policy limit.

Promptly following the Effective Date of this Agreement, but in no event before Firm commences any services under this Agreement, Firm shall provide evidence satisfactory to the Client that it has the above insurance coverage. The Client, its directors, officials, officers, employees, agents, and volunteers shall be covered as additional insured with respect to the above insurance coverage.

Billing and Payment. Unless otherwise agreed, we will send invoices for our legal fees and expenses on a monthly basis. Our invoices include narratives of the legal services performed and itemize expenses incurred by Stoel Rives in connection with the Engagement. If you would like additional information about any of our invoices, please let me know. Payment is due within 30 days after the date of the invoice. The enclosed Standard Terms of Representation contains additional information regarding our billing processes and payment terms. 567

Mr. Scott Burton
City of Ontario
April 30, 2025

120550880.7 0077104-00001
Publicity. In connection with our representation of you, Stoel Rives requests, and you consent, for us to use certain information about the Engagement for the sole purpose of describing our expertise in marketing materials. Your consent here is only with respect to information about the Engagement that you have disclosed to the public.

In-Firm Communications. From time to time, issues may arise relating to our duties under the professional conduct rules that apply to lawyers. These issues may involve conflict of interest questions or even a dispute between Stoel Rives and a client over how we have handled a client matter. When such issues arise, we may seek the advice of our Firm Counsel and loss prevention partners. We consider such consultations to be attorney-client privileged communications. We believe that it is in our clients’ interests, as well as Stoel Rives’ interest, that when legal ethics or related issues arise during a representation, we obtain expert analysis of our obligations.

Accordingly, you agree that if we determine in our own discretion during the course of the representation that it is either necessary or appropriate to consult with our internal or outside counsel, we have your consent to do so and that our representation of you shall not waive any attorney-client privilege Stoel Rives may have regarding the confidentiality of our communications with counsel.

Protected Health Information. We do not believe that this Engagement will require us to access, create, receive, use, maintain, disclose, or transmit Protected Health Information (“PHI”) as that term is defined in the privacy and security rules issued under the Health Insurance Portability and Accountability Act of 1996, as amended. In the event you believe that we need to review information that constitutes PHI, we request that you communicate with us in advance of sending the information so that we can confirm that such review is necessary and, if so, sign a business associate agreement and arrange for an appropriately secure method of transmission. We request that you do not email us PHI unless you are using an email encryption program.

Governing Law & Venue. This Agreement shall be interpreted, construed, and governed according to the laws of the State of California. In the event of litigation between the Parties, venue in state trial courts shall lie exclusively in the County of Los Angeles.

If the Terms of Engagement meet with your approval, please promptly sign the letter in the space below and return a copy to me with the security deposit so that we may begin work. Please call or email me if you have any questions. Once again, let me say how pleased we are that you have entrusted Stoel Rives to represent you in the Engagement. We look forward to working with you.

Very truly yours,

Elizabeth P. Ewens

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Mr. Scott Burton
City of Ontario
April 30, 2025

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THE UNDERSIGNED ACKNOWLEDGES AND ACCEPTS THE TERMS OF
ENGAGEMENT, AND CONSENTS TO STOEL RIVES’ REPRESENTATION NOTWITHSTANDING THE CONFLICTS OF INTEREST DESCRIBED ABOVE.

CITY OF ONTARIO
By:

Title:

Date:

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Mr. Scott Burton
City of Ontario
April 30, 2025

120550880.7 0077104-00001

STANDARD TERMS OF REPRESENTATION
Fees. Unless otherwise agreed to in writing by the Client and Stoel Rives, the principal basis for computing our fees for the legal services we provide will be the amount of time spent on the matter by various lawyers and legal assistants multiplied by their individual hourly billing rates. Other factors we may consider in setting our fee include the novelty and difficulty of the questions involved; the skill required to perform the services properly; the experience, reputation, and ability of those performing the services; the time limitations imposed by the Client or the circumstances; the amount involved; and the results obtained.

Costs. We will include in our statements separate charges for services such as copying, messenger and delivery service, travel, international telephone, and filing fees. Unless otherwise agreed to in writing, the Client authorizes us to retain any investigators, consultants, or experts necessary in our judgment to represent the Client’s interests in the specified matter. Their fees and expenses generally will not be paid by us, but will be billed directly to the Client.

Estimates. We are often requested to estimate the amount of fees and costs likely to be incurred in connection with a particular matter. Because fees and costs are usually not predictable, we generally make no commitment to the Client concerning the maximum fees and costs that will be necessary to resolve or complete the matter. Any mention by us of fees and costs is only an estimate. It is also expressly understood that your obligation to pay our fees and costs is in no way contingent on the ultimate outcome of the matter.

Client Responsibilities. You agree to pay our statements for services and expenses as agreed in the Terms of Engagement. In addition, you agree to be candid and cooperative with us and keep us informed with complete and accurate factual information, documents, communications, and other material relevant to the subject matter of our representation or otherwise reasonably requested by us. You also agree to make any necessary business and strategy decisions in a timely manner. Because we need to be able to communicate with you regarding the representation, you agree to keep us advised of name, address, telephone number, contact person, or email address changes.

Advice about Possible Outcomes. From time to time, we may express opinions or beliefs concerning the matter or various courses of action and the results that might be anticipated. Any such statement made by any of our lawyers is an expression of opinion only, based on information available to us at the time, and should not be construed by you as a promise or guarantee.

Electronic Communications. It is likely that, during the course of this engagement, you and Stoel Rives will use electronic devices and internet services (which may include unencrypted email, mobile phones, voice over Internet, electronic data/document websites, and other technology) to communicate and transfer documents. Although the use of this technology involves some degree of risk that third parties may access confidential communications, we believe and, by signing the engagement letter, you agree that the benefits of using this technology outweigh the risk of accidental disclosure. Nevertheless, just as we have policies and systems in place designed to make our electronic communications with you reasonably secure, it is equally important that you communicate with us in a manner that reasonably protects the confidentiality of information we share and any attorney-client privilege that may apply to our communications. This means that you should not use any computers or other electronic devices, networks, or internet addresses that are owned, controlled, or may be accessed by others to send or receive confidential information to or from us. Any device you use should be password protected and not accessible for use by any third party. 570

Mr. Scott Burton
City of Ontario
April 30, 2025

120550880.7 0077104-00001
Responding to Subpoenas and Other Requests for Information. If we are required to respond to a subpoena or other formal request from a third party or a governmental agency for our records or other information relating to services we have performed for you, or to testify by deposition or otherwise concerning such services, we will first consult with you as to whether you wish to provide the information demanded or assert the attorney-client privilege to the extent you may properly do so. In such circumstances, you agree that you will reimburse us for our time and expense incurred in responding to any such demand, including, but not limited to, time and expense incurred in searching for information and photocopying costs, reviewing documents, appearing at depositions or hearings, and otherwise litigating issues raised by the request.

Termination of Engagement. You may, at any time, terminate our representation upon written notice to us. We reserve the right to withdraw from our representation as required or permitted by the applicable rules of professional conduct upon written notice to you. Your termination or our withdrawal will not relieve you of your obligation to pay for services already rendered, including work in progress and incomplete at the time of termination, and to pay for all expenses incurred on your behalf by us through the termination or withdrawal date.

Conclusion of Representation; Retention and Disposition of Documents. Unless previously terminated or otherwise agreed, our representation will conclude and the attorney-client relationship will terminate automatically upon the occurrence of either of the following: first, 30 days following the date on which we send you a final statement for services rendered in the matter(s); or second, in the event a final statement for services is not sent, when 12 months have elapsed with no meaningful billable services provided to the Client. Thereafter, should you reengage us to represent you, you agree that the terms of this letter shall apply to any matters that we handle for you unless a new engagement letter has been signed. At your request, client documents and property will be returned to you upon receipt of payment for outstanding fees and costs, although we reserve the right to copy any documents we deem appropriate.

Our files and documents pertaining to the matter will be retained by us for ten years after the termination of a matter, without further notice to the Client.

Post-engagement Matters. The Client is engaging us to provide legal services in connection with a specific matter.

After completion of the matter, changes may occur in the applicable laws or regulations that could impact the Client’s future rights and liabilities. Unless the Client engages us after the completion of the matter to provide additional legal advice or services on issues arising from the matter, we have no continuing obligation to advise the Client on such issues or on future legal developments, including docketing milestones, making additional or continuation filings, monitoring renewal or notice dates or similar deadlines that may arise with respect to the matter, pursuing appeals, or taking other steps on the Client’s behalf to protect its interests.

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Department: Development Administration
Prepared By: Pablo De Lara
Staff Member Presenting: Rudy Zeledon,
Executive Director Community Development
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 21
SUBJECT:

AN ORDINANCE APPROVING A DEVELOPMENT AGREEMENT (FILE NO. PDA23- 006) BETWEEN THE CITY OF ONTARIO, LEGACY LAND PARTNERS, LLC, JAB MILL CREEK, LLC, AND RICHLAND ONTARIO DEVELOPERS, LLC.

CITY OF ONTARIO
Agenda Report
June
3, 2025
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council adopt an Ordinance Approving a Development Agreement (File No. PDA23-006) between the City of Ontario, Legacy Land Partners, LLC, JAB Mill Creek, LLC, and Richland Ontario Developers, LLC.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the Growth and Evolution of the City's Economy Operate in a Businesslike Manner
Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
Ensure the Development of a Well Planned, Balanced, and Self-Sustaining Community in Ontario Ranch
FISCAL IMPACT:

There is not a direct fiscal impact associated with this action. The Development Agreement will provide funding from the formation of a Community Facilities District (CFD) for City services and facilities required to support the Rich Haven Specific Plan (Specific Plan) development, thereby mitigating the increased costs associated with such services. In addition, the City will receive development impact, compliance processing, licensing, and permitting fees.

BACKGROUND & ANALYSIS:

On May 20, 2025, the City Council held a public hearing to introduce and waive further reading of an Ordinance Approving the Development Agreement (File No. PDA23- 006).

The Ontario Ranch Financial commitments required for construction of properties within a specific plan are substantial. Therefore, to adequately forecast these costs and gain assurance that the Project may proceed under the existing policies, rules, and regulations, Legacy Land Partners, LLC, JAB Mill Creek, LLC, and Richland Ontario Developers, LLC (collectively the "Applicant" or "Owner"), has requested that the City enter into negotiations to create a Development Agreement (Agreement).
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The Agreement proposes to include 32.67 gross acres of land within Planning Areas 3C, 5A and 5C (Light Industrial District and Open Space - Non-Recreation) of the Rich Haven Specific Plan, the Agreement grants the Applicant a vested right to develop Tentative Parcel Map 20685 (File No.

PMTT23-004), provided the Owner complies with the terms and conditions of the Specific Plan and related EIR.

The Tentative Parcel Map proposes to subdivide 32.67 gross acres of land into 8 lots and the associated Development Plan is for the construction of one industrial building totaling 460,000 square feet located at the northwest corner of Ontario Ranch Road and Mill Creek Avenue within Planning Areas 3C, 5A and 5C (Light Industrial District and Open Space - Non-Recreation) of the Rich Haven Specific Plan, as shown on the attached Exhibit B.

The term of the Agreement is for 10 years, with a 5-year option to renew. The main points of the Agreement address funding for all new City expenses created by the project, which includes:

Development Impact Fees (DIF) for construction of public improvements (i.e. streets and bridges, sewer, water, storm drain and fiber); and the creation of a Community Facilities District (CFD) for the maintenance of public facilities. Additionally, the Owner shall pay in lieu-fees to the City for the future construction and completion of Ontario Ranch Regional Water and Storm Drain improvements.

In considering the Agreement at their meeting on April 22, 2025, the Planning Commission found the Agreement to be consistent with State law, The Ontario Plan, and the City's Development Agreement policies. As a result, the Planning Commission adopted Resolution No. PC25-016 with a 6 to 0 vote, recommending City Council approval of the Agreement.

ENVIRONMENTAL REVIEW:

The environmental impacts of this Project were previously reviewed in conjunction with the Rich Haven Specific Plan Amendment (File No. PSPA22-001), for which an Environmental Impact Report (State Clearinghouse No. 2022100425) was adopted by the City Council on June 20, 2023. This Application introduces no new significant environmental impacts. All previously adopted mitigation measures are a condition of Project approval and are incorporated herein by this reference.
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Exhibit A: RICH-HAVEN SPECIFIC PLAN LAND USE MAP

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Exhibit B: TENATIVE PARCEL MAP

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ORDINANCE NO. ________

AN ORDINANCE OF THE C ITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, RECOMMEN DING CITY COUNCIL AP PROVE FILE NO.

PDA23-006, A DEVELOPMENT AGREEMENT BETWEEN THE CITY OF

ONTARIO AND LEGACY LAND PARTNERS, LLC, JAB MILL CREEK, LLC,

AND RICHLAND ONTARIO DE VELOPERS, LLC , TO ESTABLISH THE

TERMS AND CONDITIONS ASSOCIATED WITH TENTATIVE PARCEL
MAP 20685 (FILE NO. PMTT 23-004), LOCATED AT THE NORTHWEST

CORNER OF ONTARIO RA NCH ROAD AND MILL CR EEK AVENUE
WITHIN PLANNING AREA S 3C, 5A AND 5C (LIG HT INDUSTRIAL DISTRICT AND OPEN SP ACE – NON RECREATION ) OF THE RICH

HAVEN SPECIFIC PLAN , AND MAKING FINDING S IN SUPPORT
THEREOF—APNS: 218-016-22 AND 218-211-42

WHEREAS, RICHLAND ONTARIO DEVELOPERS, LLC ("Applicant") has filed an Application for the approv al of a Development Agreement , File No. PDA 23-006, as described in the title of this Resolution (hereinafter referred to as "Application" or "Project"); and

WHEREAS, the property to the north of the Project site is within Planning Area 3C (Light Industrial) of the Rich Haven Specific Plan and is vacant. The properties to the east are within the Specific Plan Agricultural Overlay zoning district and Planning Areas 6A and 6B (Light Industrial and Regional Commercial) of the Rich Haven Specific Plan, and are developed with SCE Mira Loma Substation, an industrial building and vacant land.

The property to the south is within Planning Area 5B (Regional Commercial and Stand - alone residential overlay) of the Rich Haven Specific Plan and is vacant. The property to the west is within Planning Area 4A (Stand -alone residential overlay) of the Rich Haven Specific Plan, and is developed with a residential community; and

WHEREAS, the Application applies to 32.67 gross acres of land , located at the northwest corner of Onta rio Ranch Road and Mill Creek Avenue within Planning Areas 3C, 5A and 5C (Light Industrial District and Open Space – Non-Recreation) of the Rich Haven Specific Plan; and

WHEREAS, the Applicant submitted Tentative Parcel Map No. 20685 (File No.

PMTT23-004), to subdivide 32.67 gross acres of land into 2 numbered lots and 6 lettered lots in conjunction with a Development Plan to construct one industrial building totaling 460,000 square feet on the Project site; and

WHEREAS, t he term of the Agreement is for 10 years, with a 5 -year option to renew. The main points of the Agreement address funding for all new City expenses created by the project, which includes: Development Impact Fees (“DIF”) for construction of public improvements (i.e. streets, sewer, water, storm drain and fiber); and the creation of a Community Facilities District (“CFD”) for the maintenance of public facilities; and

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WHEREAS, the environmental impacts of this Project were previously reviewed in conjunction with File No. PSPA22 -001, the Ric h Haven Specific Plan Amendment for which an Environmental Impact Report (State Clearinghouse No. 2022100425) was adopted by the City Council on June 20, 2023, and this Application introduces no new significant environmental impacts; and

WHEREAS, the City 's "Local Guidelines for the Implementation of the California Environmental Quality Act (CEQA) " provide for the use of a single environmental assessment in situations where the impacts of subsequent projects are adequately analyzed; and

WHEREAS, Ontario Development Code Table 2.02-1 (Review Matrix) grants the City Council the responsibility and authority to review and make recommendations to the City Council on the subject Application; and

WHEREAS, the Project has been reviewed for consistency with the Ho using Element of the Policy Plan component of The Ontario Plan, as State Housing Element law (as prescribed in Government Code Sections 65580 through 65589.8) requires that development projects must be consistent with the Housing Element, if upon consideration of all its aspects, it is found to further the purposes, principals, goals, and policies of the Housing Element; and

WHEREAS, the Project is located within the Airport Influence Area of Ontario International Airport, which encompasses lands within parts of San Bernardino, Riverside, and Los Angeles Counties, and is subject to, and must be consistent with, the policies and criteria set forth in the Ontario International Airport Land Use Compatibility Plan (hereinafter referred to as "ALUCP"), which a pplies only to jurisdictions within San Bernardino County, and addresses the noise, safety, airspace protection, and overflight impacts of current and future airport activity; and

WHEREAS, City of Ontario Development Code Division 2.03 (Public Hearings) prescribes the manner in which public notification shall be provided and hearing procedures to be followed, and all such notifications and procedures have been completed; and

WHEREAS, on April 22, 2025, the Planning Commission of the City of Ontario conducted a hearing to consider the Project, and concluded said hearing on that date, voting to issue Resolution No. PC25-016 recommending the City Council approve the Application; and

WHEREAS, on May 20, 2025, the City Council of the City of Ontario conducted a hearing to consider the Project, and concluded said hearing on that date; and

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

NOW, THEREFORE, IT IS HEREBY FOUND, DETERMINED, AND RESOLVED by the City Council of the City of Ontario, as follows:

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SECTION 1: Environmental Determination and Findings. As the recommending body for the Project, the City Council has reviewed and considered the information contained in the previous Certified EIR and supporting documentation. Based upon the facts and information contained in the previous Certified EIR and supporting documentation, the City Council finds as follows:

(1) The environmental impacts of this Project were previously reviewed in conjunction with File No. PSPA22-001, the Rich Haven Specific Plan Amendment for which an Environmental Impact Report (State Clearinghouse No. 2022100425) was adopted by the City Council on June 20, 2023; and

(2) The previous Certified EIR contains a complete and accurate reporting of the environmental impacts associated with the Project; and

(3) The previous Certified EIR was completed in compliance with CEQA and the Guidelines promulgated thereunder; and

(4) The previous Certified EIR reflects the independent judgment of the City Council; and

(5) The proposed project will introduce no new significant environmental impacts beyond those previously analyzed in the previous Certified EIR, and all mitigation measures previously adopted with the Certified EIR, are incorporated herein by this reference.

SECTION 2: Subsequent or Supplemental Environmental Review Not Required. Based on the information presented to the City Council , and the specific findings set forth in Section 1 , above, the City Council finds that the preparation of a subsequent or supplemental Certified EIR is not required for the Project, as the Project:

(1) Does not constitute substantial changes to the Certified EIR that will require major revisions to the Certified EIR due to the involvement of new significant environmental effects or a s ubstantial increase in the severity of previously identified significant effects; and

(2) Does not constitute substantial changes with respect to the circumstances under which the Certified EIR was prepared, that will require major revisions to the Certified EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of the previously identified significant effects; and

(3) Does not contain new information of substantial importance that was not known and could not have been known with the exercise of reasonable diligence at the time the Certified EIR was certified/adopted, that shows any of the following:

(a) The project will have one or more significant effects not discussed in the Certified EIR; or

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(b) Significant effects previously examined will be substantially more severe than shown in the Certified EIR; or

(c) Mitigation measures or alternatives previously found not to be feasible would in fact be feasible and would substantially reduce one or more sign ificant effects of the Project, but the City declined to adopt such measures; or

(d) Mitigation measures or alternatives considerably different from those analyzed in the Certified EIR would substantially reduce one or more significant effects on the environment, but which the City declined to adopt.

SECTION 3: Housing Element Compliance. Pursuant to the requirements of California Government Code Chapter 3, Article 10.6, commencing with Section 65580, as the recommending body for the Project, the City Council finds that based on the facts and information contained in the Application and supporting documentation, at the time of Project implementation, the Project is consistent with the Housing Element of the Policy Plan (General Plan) component of The Ontario Plan 2050, as the Project site is not one of the properties in the Housing Element Sites Inventory contained in Tables B-1 and B- 2 of the Housing Element Technical Report.

SECTION 4: Airport Land Use Compatibility Plan ("ALUCP") Compliance.

The California State Aeronautics Act (Public Utilities Code Section 21670 et seq.) requires that an Airport Land Use Compatibility Plan be prepared for all public use airports in the State; and requires that local land use plans and individual development proposals must be consistent with the policies set forth in the adopted Airport Land Use Compatibility Plan.

(1) On April 19, 2011, the City Council of the City of Ontario approved and adopted the Ontario International Airport Land use Compatibility Plan, establishing the Airport Influence Area for Ontario International Airport, which encompasses lands within parts of San Bernardino, Riverside, and Los Angeles Counties, and limits future land uses and development within the Airport Influence Area , as they relate to nois e, safety, airspace protection, and overflight impacts of current and future airport activity. A s the recommending body for the Project, the City Council has reviewed and considered the facts and information contained in the Application and supporting documentation against the ONT ALUCP compatibility factors, including [ 1] Safety Criteria ( ONT ALUCP Table 2 -2) and Safety Zones (ONT ALUCP Map 2 -2), [2] Noise Criteria ( ONT ALUCP Table 2-3) and Noise Impact Zones (ONT ALUCP Map 2-3), [3] Airspace protection Zones (ONT ALUCP Map 2-4), and [4] Overflight Notification Zones (ONT ALUCP Map 2-5). As a result, the CITY COUNCIL, therefore, finds and determines that the Project will be consistent with the policies and criteria set forth within the ONT ALUCP; and

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SECTION 5: Concluding Facts and Reasons. Based upon the substantial evidence presented to the City Council during the above -referenced hearing, and upon the specific findings set forth i n Section 1 through 4, above, the City Council hereby concludes as follows:

(1) The provisions of the development agreement are consistent with the goals, policies, plans, and exhibits of the Vision, Policy Plan (General Plan), and City Council Priorities com ponents of The Ontario Plan 2050, and any applicable specific plans.

(a) The Development Agreement applies to approximately 32.67 gross acres of land located at the northwest corner of Ontario Ranch Road and Mill Creek Avenue within Planning Areas 3C, 5A and 5C (Light Industrial District and Open Space – Non-Recreation) of the Rich Haven Specific Plan; and

(b) The Development Agreement establishes parameters for the development of land within the Rich -Haven Specific Plan. The Development Agreement also grants the Applicant, the right to develop, the ability to quantify the fees; and establish the terms and conditions that apply to those projects. These terms and conditions are consistent with The Ontario Plan Policy Plan ( General Plan), design guidelines and development standards for the Rich Haven Specific Plan; and

(c) The Development Agreement grants the Applicant a vested right to develop Tentative Parcel Map 20685 (File No. PMTT23-004) as long as the Applicant complies with the terms and conditions of the Rich Haven Specific Plan and EIR; and

(d) The Development Agreement has been prepared in conformance with the goals and policies of The Ontario Plan Policy Plan (General Plan); and

(e) The Development Agreement does not confli ct with the Land Use Policies of The Ontario Plan Policy Plan (General Plan) and will provide for development, within the district, in a manner consistent with the Policy Plan and with related development; and

(f) This Development Agreement will promote the goals and objectives of the Land Use Element of the Policy Plan; and

SECTION 6: City Council Action. Based upon the findings and conclusions set forth in Sections 1 through 5, above, the City Council hereby RECOMMENDS THE CITY COUNCIL APPROVE the herein d escribed Application, subject to each and every condition set forth in the Development Agreement (File No. PDA23-006 attached hereto as "Attachment A," and incorporated herein by this reference.

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SECTION 7: City Manager Administrative Authority. The City Council acknowledges that refinements and further development of the Ontario Ranch development area may demonstrate that changes are appropriate with respect to the details and performance of the parties under the Development Agreement. The City Council desires to retain a certain degree of flexibility with respect to the details of the Ontario Ranch developments, and with respect to those items covered in general terms under the Development Agreement. If and when the City Manager (or designee) and the Developer mutually find that changes, adjustments, or clarifications are appropriate to further the intended purposes of the Development Agreement, and such are not materially inconsistent with the Development Agreement, they may, unless otherwise required by law, effectuate such changes, adjustments, or clarifications by written amendment to this Agreement, or through one or more memoranda which are mutually approved by the City Manager on behalf of the City and by the Developer, and, after execution, shall be attached to the Development Agreement and become a part thereof. Unless otherwise required by law, no such changes, adjustments, or clarifications shall require prior notice or hearing before the City Council. The City Manager, with the approval of the Ci ty Attorney, shall have the authority but not the obligation to execute amendments, memoranda or other documents, and may take any action necessary to implement the Development Agreement.

SECTION 8: Indemnification. The Applicant shall agree to defend, indemnify and hold harmless, the City of Ontario or its agents, officers, and employees from any claim, action or proceeding against the City of Ontario or its agents, officers or employees to attack, set aside, void, or annul this approval. The City of Ontario shall promptly notify the applicant of any such claim, action, or proceeding, and the City of Ontario shall cooperate fully in the defense.

SECTION 9: Custodian of Records. The documents and materials that constitute the record of proceedings on which these findings have been based are located at the City of Ontario City Hall, 303 East "B" Street, Ontario, California 91764. The custodian for these records is the City Clerk of the City of Ontario.

SECTION 10: Severability. If any section, sentence, clause or phrase of this Ordinance or the application thereof to any entity, person or circumstance is held for any reason to be invalid or unconstitutional, such invalidity or unconstitutionality shall not affect other provisions or applications of this Ordinance which can be given effect without the invalid provision or application, and to this end the provisions of this Ordinance are severable. The People of the City of Ontario hereby declare that they would have adopted this Ordinance and each section, sentence, clause or phrase thereof, irrespective of the fact that any one or more section, subsections, sentences, clauses or phrases be declared invalid or unconstitutional.

SECTION 11: Effective Date. This Ordinance shall become effective 30 days following its adoption.

SECTION 12: Publication and Posting. The Mayor shall sign this Ordinance and the City Clerk shall certify as to the adoption and shall cause a summary thereof to be published at least once, in a newspaper of general circulation in the City of Ontario, California within fifteen 581

(15) days of the adoption. The City Clerk shall post a certified copy of this ordinance, including the vote for and against the same, in the Office of the City Clerk, in accordance with Government Code Section 36933.

PASSED, APPROVED, AND ADOPTED this 3rd day of June, 2025.

_____________________________________
PAUL S. LEON, MAYOR

ATTEST:

_________________________________

SHEILA MAUTZ, CITY CLERK

APPROVED AS TO FORM:

_______________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY

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STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )

I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Ordinance No. _______ was duly introduced at a regular meeting of the City Council of the City of Ontario held May 20, 2025 and adopted at the regular meeting held June 3, 2025 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

_________________________________

SHEILA MAUTZ, CITY CLERK

(SEAL)

I hereby certify that the foregoing is the original of Ordinance No. _______ duly passed and adopted by the Ontario City Council at their regular meeting held June 3, 2025 and that Summaries of the Ordinance were published on ___________ and _____________, in the Inland Valley Daily Bulletin newspaper.

__________________________________

SHEILA MAUTZ, CITY CLERK

(SEAL)
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ATTACHMENT A:

FILE NO. PDA23-006

DEVELOPMENT AGREEMENT

By and Between

City of Ontario
a California municipal corporation,

and

Legacy Land Partners LLC, a Florida limited liability
company,

and

JAB Mill Creek LLC, a Florida limited liability company

and

Richland Ontario Developers, LLC

(Development Agreement to follow this page)
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RECORDING REQUESTED BY AND
WHEN RECORDED RETURN TO:

CITY OF ONTARIO

CITY CLERK / RECORDS MANAGEMENT
303 EAST “B” STREET
ONTARIO, CA 91764-4196
Exempt from Fees Per Gov. Code § 6103
______________________________________________________________________ Space above this line for Recorder’s Use Only
FILE NO. PDA23-006

DEVELOPMENT AGREEMENT
By and Between
City of Ontario
a California municipal corporation,
and
Legacy Land Partners LLC, a Florida limited liability
company,
and
JAB Mill Creek LLC, a Florida limited liability company and
Richland Ontario Developers, LLC
_________________, 2025
San Bernardino County, California
585
DEVELOPMENT AGREEMENT PDA23-006
This Development Agreement (hereinafter “Agreement”) is entered into effective as of the ____ day of ____________, 2025 by and among the City of Ontario, a California municipal corporation (hereinafter “CITY”), and Legacy Land Partners LLC, a Florida limited liability company, JAB Mill Creek LLC, a Florida limited liability company, and Richland Ontario Developers, LLC (hereinafter “OWNER”):

RECITALS
WHEREAS, CITY is authorized to enter into binding development agreements with persons having legal or equitable interests in real property for the development of such property, pursuant to Section 65864, et seq. of the Government Code and Section

4.01.015 of the Ontario Development Code; and
WHEREAS, OWNER has requested CITY to enter into a development agreement and proceedings have been taken in accordance with the rules and regulations of CITY; and
WHEREAS, by electing to enter into this Agreement, CITY shall bind future City Councils of CITY by the obligations specified herein and limit the future exercise of certain governmental and proprietary powers of CITY; and
WHEREAS, the terms and conditions of this Agreement have undergone extensive review by CITY and the City Council and have been found to be fair, just and reasonable; and
WHEREAS, the best interests of the citizens of the CITY and the public health, safety and welfare will be served by entering into this Agreement; and WHEREAS, all of the procedures of the California Environmental Quality Act have been met with respect to the Project and the Agreement in the Rich Haven Specific Plan Environmental Impact Report (State Clearinghouse No. 2006051081) (the “FEIR”). The City Council found and determined that the FEIR was prepared in accordance with the requirements of the California Environmental Quality Act and adequately describes the impacts of the project described in the FEIR, which included consideration of this Agreement; and
WHEREAS, this Agreement and the Project are consistent with the CITY’s Comprehensive General Plan and the Rich Haven Specific Plan; and WHEREAS, all actions taken and approvals given by CITY have been duly taken or approved in accordance with all applicable legal requirements for notice, public hearings, findings, votes, and other procedural matters; and WHEREAS, development of the Property in accordance with this Agreement will provide substantial benefits to CITY and will further important policies and goals of CITY; and
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WHEREAS, this Agreement will eliminate uncertainty in planning and provide for the orderly development of the Property, ensure progressive installation of necessary improvements, provide for public services appropriate to the development of the Project, and generally serve the purposes for which development agreements under Sections 65864 et seq. of the Government Code are intended; and
WHEREAS, OWNER has incurred and will in the future incur substantial costs in order to assure development of the Property in accordance with this Agreement; and WHEREAS, OWNER has incurred and will in the future incur substantial costs in excess of the generally applicable requirements in order to assure vesting of legal rights to develop the Property in accordance with this Agreement.

WHEREAS, the Property is located in an area of the City of Ontario that has been known as the “New Model Colony” area and the New Model Colony area has now been renamed as “Ontario Ranch.

WHEREAS, Owner’s Property is within the boundaries defined in Exhibit A of the Construction Agreement between the CITY and NMC Builders and the Property covered by this Agreement is what is known as a “Phase 2 Water Property” as such, shall be required to provide funding for CITY’s future construction of the “Phase 2 Water Improvements” which will result in the availability of additional Net MDD Water Availability required for the development as shown on Exhibit “I-1”..

WHEREAS, the property developer/owner is made aware of the South Archibald Trichloroethylene (TCE) Plume “Disclosure Letter” (Exhibit “J”). Property owner may wish to provide the attached Letter as part of the Real Estate Transfer Disclosure requirements under California Civil Code Section 1102 et seq. This may include notifications in the Covenants, Conditions and Restrictions (CC&Rs) or other documents related to property transfer and disclosures. Additional information on the plume is available from the Santa Ana Regional Water Quality Control Board
at http://geotracker.waterboards.ca.gov/profile_report.asp?global_id=T10000004658.

COVENANTS
NOW, THEREFORE, in consideration of the above recitals and of the mutual covenants hereinafter contained and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties agree as follows:

1. DEFINITIONS AND EXHIBITS.

1.1 Definitions. The following terms when used in this Agreement shall be defined as follows:

1.1.1 “Agreement” means this Development Agreement.

1.1.2 “CITY” means the City of Ontario, California, a California municipal corporation.
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1.1.3 “Construction Agreement” means that certain Agreement for the Financing and Construction of Phases I and II Infrastructure Improvements to Serve an Easterly Portion of the New Model Colony, entered into between the CITY and NMC Builders as of the 4th day of October, 2005, and all future amendments thereto and including the First Amended and Restated Agreement for the Financing and Construction of Limited Infrastructure Improvements to Serve an Easterly Portion of the New Model Colony entered into between the CITY and NMC Builders as of the 21st day of August, 2012 and the Amendment to the First Amended and Restated Agreement for the Financing and Construction of Limited Infrastructure Improvements to Serve and Easterly Portion of the New Model Colony entered into between the CITY and NMC Builders as of the 19 th day of September 2017.

1.1.4 “Development” means the improvement of the Property for the purposes of completing the structures, improvements and facilities comprising the Project including, but not limited to: grading; the construction of public infrastructure and public facilities related to the Project whether located within or outside the Property; the construction of buildings and structures; and the installation of landscaping. “Development” does not include the maintenance, repair, reconstruction or redevelopment of any building, structure, improvement or facility after the construction and completion thereof.

1.1.5 “Development Approvals” means all permits and other entitlements for use subject to approval or issuance by CITY in connection with development of the Property including, but not limited to:
(a) specific plans and specific plan amendments;
(b) tentative and final subdivision and parcel maps;
(c) development plan review.

1.1.6 “Development Exaction” means any requirement of CITY in connection with or pursuant to any Land Use Regulation or Development Approval for the dedication of land, the construction of improvements or public facilities, or the payment of fees in order to lessen, offset, mitigate or compensate for the impacts of development on the environment or other public interests.

1.1.7 “Development Impact Fee” means a monetary exaction, other than a tax or special assessment, whether characterized as a fee or a tax and whether established for a broad class of projects by legislation of general applicability or imposed on a specific project on an ad hoc basis, that is charged by a local agency to the applicant in connection with approval of a development project for the purpose of defraying all or a portion of the cost of public facilities related to the development project, and, for purposes of this Agreement only, includes fees collected under development agreements adopted pursuant to Article 2.5 of the Government Code (commencing with Section 65864) of Chapter 4. For purposes of this Agreement only, "Development Impact Fee" shall not include processing fees and charges imposed by CITY to cover the estimated actual costs to CITY of processing applications for Development Approvals or for monitoring 588
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compliance with any Development Approvals granted or issued, including, without limitation, fees for zoning variances; zoning changes; use permits; building inspections; building permits; filing and processing applications and petitions filed with the local agency formation commission or conducting preliminary proceedings or proceedings under the Cortese-Knox-Hertzberg Local Government Reorganization Act of 2000, Division 3 (commencing with Section 56000) of Title 5 of the Government Code; the processing of maps under the provisions of the Subdivision Map Act, Division 2 (commencing with Section 66410) of Title 7 of the Government Code; or planning services under the authority of Chapter 3 (commencing with Section 65100) of Division 1 of Title 7 of the Government Code, fees and charges as described in Sections 51287, 56383, 57004, 65104, 65456, 65863.7, 65909.5, 66013, 66014, and 66451.2 of the Government Code, Sections 17951, 19132.3, and 19852 of the Health and Safety Code, Section 41901 of the Public Resources Code, and Section 21671.5 of the Public Utilities Code, as such codes may be amended or superseded, including by amendment or replacement.

1.1.8 “Development Plan” means the Existing Development Approvals and the Existing Land Use Regulations applicable to development of the Property.

1.1.9 “Effective Date” means the date that the ordinance approving this Agreement goes into effect.

1.1.10 “Existing Development Approvals” means all Development Approvals approved or issued on or prior to the Effective Date. Existing Development Approvals includes the Approvals incorporated herein as Exhibit “C” and all other Approvals which are a matter of public record on the Effective Date.

1.1.11 “Existing Land Use Regulations” means all Land Use Regulations in effect on the date of the first reading of the Ordinance adopting and approving this Agreement.

Existing Land Use Regulations includes the Regulations incorporated herein as Exhibit “D” and all other Land Use Regulations that are in effect and a matter of public record on such date.

1.1.12 “General Plan” means the Ontario Plan adopted on August 16, 2022.

1.1.13 “Improvement” or “Improvements” means those public improvements required to support the development of the Project as described in the Parcel Map conditions for Parcel Map 20685 as further described in Exhibit “E” and depicted in Exhibit “F” (the “Infrastructure Improvements Exhibit”).

1.1.14 “Land Use Regulations” means all ordinances, resolutions, codes, rules, regulations and official policies of CITY governing the development and use of land, including, without limitation, the permitted use of land, the density or intensity of use, subdivision requirements, timing and phasing of development, the maximum height and size of buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction standards and specifications applicable to the development of the Property. “Land Use Regulations” does not include any CITY ordinance, resolution, code, rule, regulation or official policy, governing:
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(a) the conduct of businesses, professions, and occupations; (b) taxes and assessments;
(c) the control and abatement of nuisances;
(d) the granting of encroachment permits and the conveyance of similar rights and interests that provide for the use of or the entry upon public property; (e) the exercise of the power of eminent domain.

1.1.15 “Mortgagee” means a mortgagee of a mortgage, a beneficiary under a deed of trust or any other security-device lender, and their successors and assigns.

1.1.16 “Net MDD” means net maximum daily water demand.

1.1.17 “NMC Builders” means the consortium of investors and developers responsible for the construction of infrastructure within the New Model Colony incorporated as NMC Builders, LLC.

1.1.18 “OWNER” means the persons and entities listed as owner on page 1 of this Agreement and their permitted successors in interest to all or any part of the Property.

1.1.19 “Phase 2 Water EDUs” means the number of equivalent dwelling units or non-residential square footage assigned to OWNER upon payment to City of the Phase 2 Water Participation Fee for the Project and evidenced by the issuance by CITY of a Certificate of Phase 2 Net MDD Availability in the form attached as Exhibit G.

1.1.20 “Phase 2 Water Improvements” means the future water infrastructure Improvements required for the issuance by CITY of the “Water Availability Equivalents” (WAE) for the Project.

1.1.21 “Phase 2 Water Participation Fee” means the fee paid to City upon City approval of the first Development Entitlement for the Project, to fund the Property’s respective share of the projected costs of the design and construction of the Phase 2 Water Improvements by City. The Phase 2 Water Participation Fee shall be the calculated amount of the Regional Water DIF for the Project based upon the number of units, and land use category for residential units or the number of square feet, and land use category for non-residential square footage of the Project.

1.1.22 “Project” means the development of the Property contemplated by the Development Plan, as such Plan may be further defined, enhanced or modified pursuant to the provisions of this Agreement.

1.1.23 “Property” means the real property described on Exhibit “A” and shown on Exhibit “B” to this Agreement.
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1.1.24 “Reservations of Authority” means the rights and authority excepted from the assurances and rights provided to OWNER under this Agreement and reserved to CITY under Section 3.6 of this Agreement.

1.1.25 “Amendment to the Construction Agreement” means the amendment to the Construction Agreement modifying the boundaries of the property in Exhibit A of such Construction Agreement to include the Property covered by this Agreement and to provide for the additional funds required for CITY’s future construction of the “Phase 2 Water Improvements” described in a modification to Exhibit C-3 of the Construction Agreement.

1.1.26 “Specific Plan” means that certain specific plan adopted by the City Council, and entitled, “Rich Haven Specific Plan.”

1.1.27 “Subsequent Development Approvals” means all discretionary Development Approvals required subsequent to the Effective Date in connection with development of the Property.

1.1.28 “Subsequent Land Use Regulations” means any discretionary Land Use Regulations adopted and effective after the Effective Date of this Agreement.

1.1.29 “Water Availability Equivalent (WAE)” means a designated portion of the total Net MDD made available through the construction of each Phase described in the Water Phasing Plan of the Construction Agreement. The number of Water Availability Equivalents (of portions thereof) required for the approval of a Tract or Subdivision Map shall be based upon water demand factors and assumptions listed in the Construction Agreement and shown in Exhibit “I-2”.

1.2 Exhibits. The following documents are attached to, and by this reference made a part of, this Agreement:

Exhibit “A” — Legal Description of the Property.

Exhibit “B” — Map showing Property and its location.

Exhibit “C” — Existing Development Approvals.

Exhibit “D” — Existing Land Use Regulations.

Exhibit “E” — Description of Required Infrastructure Improvements Exhibit “F” — Infrastructure Improvements Exhibit
Exhibit “G” – Form of Certificate of Net MDD to be issued by CITY Exhibit “H” – Form of Certificate of DIF Credit to be issued by CITY Exhibit “I-1” – Ontario Ranch Water Supply Phasing Plan 591
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Exhibit “I-2” – Water Demand Equivalents by Land Use
Exhibit “J” - Form of Disclosure letter

2. GENERAL PROVISIONS.

2.1 Binding Effect of Agreement. The Property is hereby made subject to this Agreement. Development of the Property is hereby authorized and shall be carried out only in accordance with the terms of this Agreement.

2.1 Ownership of Property. OWNER represents and covenants that it is the owner of the fee simple title to the Property or a portion thereof, or has the right to acquire fee simple title to the Property or a portion thereof from the current owner(s) thereof. To the extent OWNER does not own fee simple title to the Property, OWNER shall obtain written consent from the current fee owner of the Property agreeing to the terms of this Agreement and the recordation thereof.

2.2 Term. The term of this Agreement shall commence on the Effective Date and shall continue for an initial term of ten (10) years thereafter unless this term is modified or extended pursuant to the provisions of this Agreement. The term of this Agreement may be extended for an additional five (5) years following expiration of the initial ten (10) year term, provided the following have occurred:
(a) OWNER provides at least 180 days written notice to CITY prior to expiration of the initial term; and
(b) OWNER is not then in uncured default of this Agreement.

2.3 Assignment.

2.3.1 Right to Assign. OWNER shall have the right to sell, transfer or assign the Property in whole or in part (provided that no such partial transfer shall violate the Subdivision Map Act, Government Code Section 66410, et seq.), to any person, partnership, limited liability company, joint venture, firm or corporation at any time during the term of this Agreement; provided, however, that any such sale, transfer or assignment shall include the assignment and assumption of the rights, duties and obligations arising under or from this Agreement with respect to the portion of the Property sold and be made in strict compliance with the following:
(a) No sale, transfer or assignment of any right or interest under this Agreement shall be made unless made together with the sale, transfer or assignment of all or a part of the Property. OWNER may be required to provide disclosure that the Property is within the South Archibald Trichloroethylene (TCE) Plume (Exhibit “J”). OWNER may wish to provide the attached Disclosure Letter (Exhibit I) as part of the Real Estate Transfer Disclosure requirements under California Civil Code Section 1102 et seq. (b) Concurrent with any such sale, transfer or assignment, or within fifteen (15) business days thereafter, OWNER shall notify CITY’s City Manager, in writing, of such 592
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sale, transfer or assignment and shall provide CITY with: (1) an executed agreement, in a form reasonably acceptable to CITY, by the purchaser, transferee or assignee and providing therein that the purchaser, transferee or assignee expressly and unconditionally assumes all the duties and obligations of OWNER under this Agreement with respect to the portion of the Property so sold, transferred or assigned. (c) Any sale, transfer or assignment not made in strict compliance with the foregoing conditions shall constitute a default by OWNER under this Agreement.

Notwithstanding the failure of any purchaser, transferee or assignee to execute the agreement required by Paragraph (b) of this Subsection 2.4.1, the burdens of this Agreement shall be binding upon such purchaser, transferee or assignee, but the benefits of this Agreement shall not inure to such purchaser, transferee or assignee until and unless such agreement is executed. The City Manager shall have the authority to review, consider and either approve, conditionally approve, or deny any proposed sale, transfer or assignment that is not made in compliance with this section 2.4.

2.3.2 Release of Transferring Owner. Notwithstanding any sale, transfer or assignment, a transferring OWNER shall continue to be obligated under this Agreement unless such transferring owner is given a release in writing by CITY, which release shall be provided by CITY upon the full satisfaction by such transferring owner of the following conditions:
(a) OWNER no longer has a legal or equitable interest in all or any part of the portion of the Property sold, transferred or assigned.
(b) OWNER is not then in default under this Agreement.
(c) OWNER has provided CITY with the notice and executed an agreement as required under Paragraph (b) of Subsection 2.4.1 above. (d) The purchaser, transferee or assignee provides CITY with security equivalent to any security previously provided by OWNER (if any) to secure performance of its obligations hereunder which are to be performed upon portion of the Property sold, transferred or assigned .

2.3.3 Effect of Assignment and Release of Obligations. In the event of a sale, transfer or assignment pursuant to the provisions of Section 2.4.2 above:
(a) The assignee shall be liable for the performance of all obligations of OWNER with respect to transferred property but shall have no obligations with respect to the portions of the Property, if any, not transferred (the “Retained Property”). (b) The owner of the Retained Property shall be liable for the performance of all obligations of OWNER with respect to Retained Property but shall have no further obligations with respect to the transferred property.
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(c) The assignee’s exercise, use and enjoyment of the Property or portion thereof shall be subject to the terms of this Agreement to the same extent as if the assignee were the OWNER.

2.3.4 Subsequent Assignment. Any subsequent sale, transfer or assignment after an initial sale, transfer or assignment shall be made only in accordance with and subject to the terms and conditions of this Section 2.4.

2.3.5 Termination of Agreement With Respect to Individual Lots Upon Sale to Public and Completion of Construction. The provisions of Subsection 2.4.1 shall not apply to the sale or lease (for a period longer than one year) of any parcel which has been finally subdivided and is individually (and not in “bulk”) sold or leased to a member of the public or other ultimate user of the parcel. Notwithstanding any other provisions of this Agreement, this Agreement shall terminate with respect to any lot and such lot shall be released and no longer be subject to this Agreement without the execution or recordation of any further document upon satisfaction of both of the following conditions:
(a) The lot has been finally subdivided and individually (and not in “bulk”) sold or leased (for a period longer than one year) to a member of the public or other ultimate user; and,
(b) A certificate of occupancy has been issued for a building on the parcel, and the fees set forth under Section 4 of this Agreement have been paid.

2.4.6 Partial Assignment and Assumption. CITY and OWNER agree OWNER may partially assign its obligations and rights under this Agreement, and all amendments hereto, to a purchaser, transferee or assignee of a lot, which has been subdivided subject to provisions of a partial assignment and assumption agreement in a form approved by CITY. Any such complete and executed partial assignment and assumption of this Agreement shall be submitted to CITY for approval pursuant to Section 2.4.1 of this Agreement. CITY shall review, and if the above conditions, including but not limited to, those conditions in Section 2.4.2, are satisfied, CITY may approve the partial assignment and release and notify the purchaser, transferee or assignee in writing thereof. No such release approved pursuant to this Subsection 2.4.6 shall cause, or otherwise affect, a release of OWNER from the duties and obligations under this Agreement that are retained by OWNER and excluded from the transfer or assignment.

2.4 Amendment or Cancellation of Agreement. This Agreement may be amended or cancelled in whole or in part only in the manner provided for in Government Code Section 65868.1. Any amendment of this Agreement, which amendment has been requested by OWNER, shall be considered by the CITY only upon the payment of the applicable processing charge. This provision shall not limit any remedy of CITY or OWNER as provided by this Agreement. Either Party or successor in interest, may propose an amendment to or cancellation, in whole or in part, of this Agreement. Any amendment or cancellation shall be by mutual consent of the parties or their successors in interest except as provided otherwise in this Agreement or in Government Code Section 65865.1. For purposes of this section, the term “successor in interest” shall mean 594
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any person having a legal or equitable interest in the whole of the Property, or any portion thereof as to which such person wishes to amend or cancel this Agreement. The procedure for proposing and adopting an amendment to, or cancellation of, in whole or in part, this Agreement shall be the same as the procedure for adopting and entering into this Agreement in the first instance. Notwithstanding the foregoing sentence, if the CITY initiates the proposed amendment to, or cancellation of, in whole or in part, this Agreement, CITY shall first give notice to the OWNER of its intention to initiate such proceedings at least sixty (60) days in advance of the giving the public notice of intention to consider the amendment or cancellation.

2.5.1 Minor Modification. Upon the written application of OWNER, minor modifications and changes to the Development Plan including modifications to building design or footprint (not affecting minimum setbacks), parking layout and design, and landscape area design may be approved by the Director of the Planning Department without the need to amend this Development Agreement. Other changes in the Development Plan shall be processed pursuant to the City Zoning Ordinance. It is also contemplated by CITY and OWNER that OWNER may, from time to time, seek amendments to one or more of the Development Approvals. Any such amendments are contemplated by CITY and OWNER as being within the scope of this Agreement as long as they are consistent with the Land Use Regulations and shall, upon approval by CITY, continue to constitute the Development Approvals as referenced herein. The parties agree that any such modifications or amendments shall not constitute an amendment to this Agreement nor require an amendment to this Agreement.

2.5 Termination. This Agreement shall be deemed terminated and of no further effect upon the occurrence of any of the following events:
(a) Expiration of the stated term of this Agreement as set forth in Section 2.3. (b) Entry of a final judgment setting aside, voiding or annulling the adoption of the ordinance approving this Agreement.
(c) The adoption of a referendum measure overriding or repealing the ordinance approving this Agreement.
(d) Completion of the Project in accordance with the terms of this Agreement including issuance of all required occupancy permits and acceptance by CITY or applicable public agency of all required dedications.

Termination of this Agreement shall not constitute termination of any other land use entitlements approved for the Property. Upon the termination of this Agreement, no party shall have any further right or obligation hereunder except with respect to any obligation to have been performed prior to such termination or with respect to any default in the performance of the provisions of this Agreement which has occurred prior to such termination or with respect to any obligations which are specifically set forth as surviving this Agreement. Upon such termination, any public facilities and services mitigation fees 595
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paid pursuant to Section 4.2 of this Agreement by OWNER to CITY on which construction has not yet begun shall be refunded to OWNER by CITY within ten (10) business days.

2.6 Notices.
(a) As used in this Agreement, “notice” includes, but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment or other communication required or permitted hereunder. (b) All notices shall be in writing and shall be considered given either: (i) when delivered in person, including, without limitation, by courier, to the recipient named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United States mail in a sealed envelope as either registered or certified mail with return receipt requested, and postage and postal charges prepaid, and addressed to the recipient named below. All notices shall be addressed as follows:

If to CITY:

Scott Ochoa, City Manager
City of Ontario
303 East "B" Street
Ontario, CA 91764
If to OWNER:

Craig Cristina
Richland
3161 Michelson, Suite 425
Irvine, CA 92612
[email protected]
with a copy to:

Ruben Duran, City Attorney
Best Best & Krieger, LLP
2855 E Guasti Road
Ontario, CA 91761
With a copy to:

Richland Legal Dept.
c/o John Troutman
3161 Michelson, Suite 425
Irvine, CA 92612
[email protected]
(c) Either party may, by notice given at any time, require subsequent notices to be given to another person or entity, whether a party or an officer or representative of a party, or to a different address, or both. Notices given before actual receipt of notice of change shall not be invalidated by the change.

3. DEVELOPMENT OF THE PROPERTY.

3.1 Rights to Develop. Subject to the terms of this Agreement including the Reservations of Authority in Section 3.4, OWNER shall have a vested right to develop the Property in accordance with, and to the extent of, the Development Plan. The Project shall remain subject to all Subsequent Development Approvals required to complete the Project as contemplated by the Development Plan. Except as otherwise provided in this Agreement, the permitted uses of the Property, the density and intensity of use, the maximum height and size of proposed buildings, and provisions for reservation and dedication of land for public purposes shall be those set forth in the Development Plan. 596
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3.2 Effect of Agreement on Land Use Regulations. Except as otherwise provided under the terms of this Agreement including the Reservations of Authority in Section 3.4, the rules, regulations and official policies governing permitted uses of the Property, the density and intensity of use of the Property, the maximum height and size of proposed buildings, and the design, improvement and construction standards and specifications applicable to development of the Property shall be the Existing Land Use Regulations. In connection with any Subsequent Development Approval, CITY shall exercise discretion in accordance with the same manner as it exercises its discretion under its police powers, including the Reservations of Authority set forth herein; provided however, that such discretion shall not prevent development of the Property for the uses and to the density or intensity of development set forth in this Agreement.

3.3 Timing of Development. The parties acknowledge that OWNER cannot at this time predict when or the rate at which phases of the Property will be developed. Such decisions depend upon numerous factors which are not within the control of OWNER, such as market orientation and demand, interest rates, absorption, completion and other similar factors. Since the California Supreme Court held in Pardee Construction Co. v.

City of Camarillo (1984) 37 Cal. 3d 465, that the failure of the parties therein to provide for the timing of development resulted in a later adopted initiative restricting the timing of development to prevail over such parties’ agreement, it is the parties’ intent to cure that deficiency by acknowledging and providing that OWNER shall have the right to develop the Property in such order and at such rate and at such times as OWNER deems appropriate within the exercise of its subjective business judgment.

3.3.1 Infrastructure Improvement Exhibit. Attached hereto as Exhibit “F” are a description of the Infrastructure Improvements needed for the development of the Property (“the Infrastructure Improvement Exhibits”).

3.4 Reservations of Authority.

3.4.1 Limitations, Reservations and Exceptions. Notwithstanding any other provision of this Agreement, the CITY shall not be prevented from applying new rules, regulations and policies upon the OWNER, nor shall a development agreement prevent the CITY from denying or conditionally approving any subsequent development project application on the basis of such new rules, regulations and policies where the new rules, regulations and policies consist of the following:
(a) Processing fees by CITY to cover costs of processing applications for development approvals or for monitoring compliance with any development approvals; (b) Procedural regulations relating to hearing bodies, petitions, applications, notices, findings, records and any other matter of procedure; (c) Regulations, policies and rules governing engineering and construction standards and specifications applicable to public and private improvements, including all uniform codes adopted by the CITY and any local amendments to those codes adopted by the CITY; provided however that, OWNER shall have a vested right to develop the 597
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Property in accordance with, and to the extent of, the standards and specifications that are expressly identified in the Specific Plan and the building codes in effect as of the Effective Date;
(d) Regulations that may conflict with this Agreement and the Development Plan but that are reasonably necessary to protect the occupants of the Project and/or of the immediate community from a condition perilous to their health or safety; (e) Regulations that do not conflict with those rules, regulations and policies set forth in this Agreement or the Development Plan and which do not impose additional obligations, costs, and expenses on Owner or the Project; (f) Regulations that may conflict but to which the OWNER consents.

3.4.2 Subsequent Development Approvals. This Agreement shall not prevent CITY, in acting on Subsequent Development Approvals, from applying Subsequent Land Use Regulations that do not conflict with the Development Plan and/or the Existing Development Approvals, nor shall this Agreement prevent CITY from denying or conditionally approving any Subsequent Development Approval on the basis of the Existing Land Use Regulations or any Subsequent Land Use Regulation not in conflict with the Development Plan and/or the Existing Development Approvals.

3.4.3 Modification or Suspension by State or Federal Law. In the event that State or Federal laws or regulations, enacted after the Effective Date of this Agreement, prevent or preclude compliance with one or more of the provisions of this Agreement, such provisions of this Agreement shall be modified or suspended as may be necessary to comply with such State or Federal laws or regulations, provided, however, that this Agreement shall remain in full force and effect to the extent it is not inconsistent with such laws or regulations and to the extent such laws or regulations do not render such remaining provisions impractical to enforce. In the event OWNER alleges that such State or Federal laws or regulations preclude or prevent compliance with one or more provisions of this Agreement, and the CITY does not agree, the OWNER may, at its sole cost and expense, seek declaratory relief (or other similar non-monetary remedies); provided however, that nothing contained in this Section 3.6.3 shall impose on CITY any monetary liability for contesting such declaratory relief (or other similar non-monetary relief).

3.4.4 Intent. The parties acknowledge and agree that CITY is restricted in its authority to limit its police power by contract and that the foregoing limitations, reservations and exceptions are intended to reserve to CITY all of its police power which cannot be so limited. This Agreement shall be construed, contrary to its stated terms if necessary, to reserve to CITY all such power and authority which cannot be restricted by contract.
(INSERT SPECIFIC INFRASTRUCUTRE IMPROVEMENTS)

3.5 Public Works; Utilities. If OWNER is required by this Agreement or a condition of project approval to construct any public works facilities which will be dedicated to CITY or 598
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any other public agency upon completion, and if required by applicable laws to do so, OWNER shall perform such work in the same manner and subject to the same requirements as would be applicable to CITY or such other public agency should it have undertaken such construction. As a condition of development approval, OWNER shall connect the Project to all utilities necessary to provide adequate water, recycled water, sewer, gas, electric, and other utility service to the Project. As a further condition of development approval, OWNER shall to the extent possible contract with the CITY for CITY-owned or operated utilities for this purpose, for such price and on such terms as may be available to similarly situated customers in the CITY.

3.5.1 OWNER agrees that development of the Project shall require the construction of storm drain Improvements from the Property to the connection with the Cucamonga Creek Channel as described in Exhibit E and depicted in Exhibit F. OWNER shall be responsible for the construction of the necessary extension of storm drain facilities, as described in Exhibit E and depicted in Exhibit F. OWNER and CITY agree that CITY may issue grading, building permits and other required permits for OWNER to initiate construction of structures for the Property according to plans approved by CITY and OWNER agrees that OWNER shall not request, and CITY shall not issue a final occupancy permit for any buildings prior to completion of the storm drain Improvements described in Exhibit E and depicted in Exhibit F. CITY agrees that OWNER may request that CITY issue temporary certificates of occupancy on a building-by-building basis prior to completion of the storm drain improvements.

3.5.2 OWNER agrees that development of the Project shall require the construction of street improvements as described in Exhibit E and depicted in Exhibit F.

OWNER and CITY agree that CITY may issue grading, building permits and other required permits for OWNER to initiate construction of structures for the Property according to plans approved by CITY and OWNER agrees that OWNER shall not request and CITY shall not issue a final occupancy permit for any buildings on the Property prior to Substantial Completion of the street Improvements as described in Exhibit E and depicted in Exhibit F. For purposes of the foregoing, street improvements shall be deemed Substantially Complete even if the final lift of pavement has not been completed (i.e., Owner may install the final lift after completion of all other construction). CITY agrees that OWNER may request that CITY issue temporary certificates of occupancy on a building-by-building basis prior to completion and subject to final acceptance by CITY of the street improvements. OWNER agrees that the street improvements shall be completed and subject to final acceptance by CITY prior to the release of any security for the construction of the street improvements.

3.5.3 OWNER agrees that development of the Property shall require the extension of permanent water utility Improvements as described in Exhibit E and depicted in Exhibit F consisting generally of the construction of the extension of permanent water utility Improvements from two (2) points of connection to serve the Property. OWNER and CITY agree that CITY may issue grading, building and other required permits for OWNER to initiate construction of structures for the Property according to plans approved by CITY upon completion of sufficient water and recycled water improvements to serve the Property from at least one point of connection and sufficient fire protection and 599
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OWNER agrees that OWNER shall not request and CITY shall not issue a final occupancy permit for any buildings on the Property until the completion of permanent water and recycled water Improvements described in Exhibit E and depicted in Exhibit F. City agrees that OWNER may request that CITY issue temporary certificates of occupancy on a building-by-building basis prior to completion of the water and recycled water improvements if there is available water service from a minimum of two (2) points of connection and sufficient water is available for water quality purposes and fire protection purposes for any buildings while under construction.

3.6 Acquisition of Offsite Provision of Real Property Interests. In any instance where OWNER is required by any Development Approval or Land Use Regulation and the Construction Agreement to construct any public improvement on land not owned by OWNER (“Offsite Improvements”), the CITY and OWNER shall cooperate in acquiring the necessary legal interest (“Offsite Property”) in accordance with the procedures set forth in Section 2.4 of the Construction Agreement. This section 3.6 is not intended by the parties to impose upon the OWNER an enforceable duty to acquire land or construct any public improvements on land not owned by OWNER, except to the extent that the OWNER elects to proceed with the development of the Project, and then only in accordance with valid conditions imposed by the CITY upon the development of the Project under the Subdivision Map Act or other legal authority.

3.6.1 CITY Acquisition of Non-Construction Agreement Offsite Property. In the event OWNER is required to construct any public improvements on land not owned by OWNER, but such requirement is not based upon the Construction Agreement, Sections

3.6.1 and 3.6.2 shall control the acquisition of the necessary property interest(s) (“Non- Construction Agreement Offsite Property”). If the OWNER is unable to acquire such Non- Construction Agreement Offsite Property and following the written request from the OWNER to CITY, CITY agrees to use reasonable and diligent good faith efforts to acquire the Non-Construction Agreement Offsite Property from the owner or owners of record by negotiation to the extent permitted by law and consistent with this Agreement. If CITY is unable to acquire the Non-Construction Agreement Offsite Property by negotiation within thirty (30) days after OWNER’S written request, CITY shall, initiate proceedings utilizing its power of eminent domain to acquire that Non-Construction Agreement Subject Property at a public hearing noticed and conducted in accordance with California Code of Civil Procedure Section 1245.235 for the purpose of considering the adoption of a resolution of necessity concerning the Non-Construction Agreement Offsite Property, subject to the conditions set forth in this Section 3.6.1 The CITY and OWNER acknowledge that the timelines set forth in this Section 3.6.1 represent the maximum time periods which CITY and OWNER reasonably believe will be necessary to complete the acquisition of any Non-Construction Agreement Offsite Property. CITY agrees to use reasonably good faith efforts to complete the actions described within lesser time periods, to the extent that it is reasonably able to do so, consistent with the legal constraints imposed upon CITY.

3.6.2 Owner’s Option to Terminate Proceedings. CITY shall provide written notice to OWNER no later than fifteen (15) days prior to making an offer to the owner of the Non-Construction Agreement Offsite Property. At any time within that fifteen (15) day 600
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period, OWNER may, at its option, notify CITY that it wants CITY to cease all acquisition proceedings with respect to that Non-Construction Agreement Offsite Property, whereupon CITY shall cease such proceedings. CITY shall provide written notice to OWNER no later than fifteen (15) days prior to the date of the hearing on CITY’S intent to consider the adoption of a resolution of necessity as to any Non-Construction Agreement Offsite Property. At any time within that fifteen (15) day period, OWNER may, at its option, notify CITY that it wants CITY to cease condemnation proceedings, whereupon CITY shall cease such proceedings. If OWNER does not notify CITY to cease condemnation proceedings within said fifteen (15) day period, then the CITY may proceed to consider and act upon the Non-Construction Agreement Offsite Property resolution of necessity. If CITY adopts such resolution of necessity, then CITY shall diligently institute condemnation proceedings and file a complaint in condemnation and seek an order of immediate possession with respect to the Non-Construction Agreement Offsite Property.

3.7 Regulation by Other Public Agencies. It is acknowledged by the parties that other public agencies not within the control of CITY possess authority to regulate aspects of the development of the Property separately from or jointly with CITY and this Agreement does not limit the authority of such other public agencies. CITY agrees to cooperate fully, at no cost to CITY, with OWNER in obtaining any required permits or compliance with the regulations of other public agencies provided such cooperation is not in conflict with any laws, regulations or policies of the CITY.

3.8 Tentative Parcel Maps; Extension. With respect to applications by OWNER for tentative parcel maps for portions of the Property, CITY agrees that OWNER may file and process tentative maps in accordance with Chapter 4.5 (commencing with Section 66498.1) of Division 2 of Title 7 of the California Government Code and the applicable provisions of CITY’s subdivision ordinance, as the same may be amended from time to time. In accordance with the provisions of Section 66452.6 of the Government Code, each tentative subdivision map or tentative parcel map, heretofore or hereafter approved in connection with development of the Property, shall be deemed to have been granted an extension of time to and until the date that is five (5) years following the Effective Date of this Agreement. The CITY’s City Council may, in its discretion, extend any such map for an additional period of up to five (5) years beyond its original term, so long as the subdivider files a written request for an extension with the City prior to the expiration of the initial five (5) year term.

4. PUBLIC BENEFITS.

4.1 Intent. The parties acknowledge and agree that development of the Property will result in substantial public needs that will not be fully met by the Development Plan and further acknowledge and agree that this Agreement confers substantial private benefits on OWNER that should be balanced by commensurate public benefits. Accordingly, the parties intend to provide consideration to the public to balance the private benefits conferred on OWNER by providing more fully for the satisfaction of the public needs resulting from the Project.
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4.2 Development Impact Fees.

4.2.1 Amount of Development Impact Fee. Development Impact Fees (DIF) shall be paid by OWNER. The Development Impact Fee amounts to be paid by OWNER shall be the amounts that are in effect at the time such amounts are due. Nothing contained in this Agreement shall affect the ability of the CITY to impose new Development Impact Fees or amend the amounts of existing Development Impact Fees. Additionally, nothing contained in this Agreement shall affect the ability of other public agencies that are not controlled by CITY to impose and amend, from time to time, Development Impact Fees established or imposed by such other public agencies, even though such Development Impact Fees may be collected by CITY.

4.2.2 Time of Payment. The Development Impact Fees required pursuant to Subsection 4.2.1 shall be paid to CITY prior to the issuance of building permit for each applicable building (subject to the application/use of available fee deferrals or credits), except for the Open Space and Habitat Acquisition Development Impact fee, which shall be paid by OWNER to CITY prior to the issuance of a grading permit

4.3 Responsibility for Construction of Public Improvements.

4.3.1 Timely Construction of Public Infrastructure. The phasing of the area wide infrastructure construction within the Ontario Ranch area shall be as approved by the CITY. OWNER shall be responsible for the timely construction and completion of all public infrastructure required for the Project as shown on the attached Exhibit “F” and any and all parcel map conditions. Unless otherwise specified in the Parcel Map conditions, and subject to the provisions of Section 3.5 and 3.6, all other required Improvements for each Parcel Map, shall be completed and operational prior to, and as a condition precedent to, OWNER requesting and CITY’s granting of a final occupancy permit for any buildings to be constructed on the Property. All Infrastructure and Improvements shall be completed as required by the Subdivision Agreement/Parcel Map conditions for Parcel Map No.20685.

4.3.2 Availability and Use of Recycled Water. OWNER agrees that recycled water shall be available and utilized by OWNER for all construction-related water uses including prior to, and during, any grading of the Property

4.3.3. Construction of DIF Program Infrastructure. To the extent OWNER is required to construct and complete construction of public improvements that are included in CITY’s Development Impact Fee Program CITY agrees that CITY shall issue DIF Credit and DIF Reimbursement in accordance with the provisions of a separate Fee Credit Agreement between CITY and OWNER. Limitations on the use of DIF Credit issued to OWNER to offset OWNER’s DIF payment obligations shall also be subject to the provisions of a separate Fee Credit Agreement. OWNER may also be eligible to receive reimbursement from DIF collected by CITY and paid by other development that benefits from OWNER’s construction of DIF Program Infrastructure. Any such DIF Reimbursement shall be subject to a Fee Credit Agreement between CITY and OWNER. 602
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CITY and OWNER agree that the Fee Credit Agreement between CITY and OWNER shall comply with CITY’s adopted policies applicable to such agreements.

4.4 Net MDD/Water Availability Equivalents.

4.4.1 Effectiveness of Agreement. Notwithstanding anything else set forth in this Agreement, CITY and OWNER each acknowledge, confirm, and agree, that (i) the City approval of this Agreement and (ii) the effectiveness of this Agreement, in each case, is conditioned upon OWNER’s admission to NMC Builders as a “Member” thereof pursuant to the terms and conditions of the operating agreement of NMC Builders. OWNER and CITY agree that OWNER shall become a Member of NMC Builders within 30 days of the effective date of this Agreement.

4.4.2 Assigned Net MDD/Water Availability Equivalents. OWNER acknowledges that the City has agreed with NMC Builders to reserve exclusively for Members of NMC Builders, including OWNER, Net MDD made available through the construction of water system improvements funded by NMC Builders and/or OWNER. OWNER acknowledges that the provisions of the Construction Agreement Amendment require that the City shall not issue building permits or certificates of occupancy for the area of development within the New Model Colony served by the water system improvements funded by NMC Builders, except to the bearer of a Certificate of Net MDD Water Availability.

4.4.3 Requirement for NMC Builders LLC Membership as a Phase 2 Water Member. OWNER and CITY agree that OWNER’s’ payment to CITY required by Section

4.5.3 below represents OWNER’s contribution to the funding required for the future construction of the Phase 2 Water Improvements and the availability of additional Net MDD Water Availability required for the development of the Property described in Exhibit A of this Agreement.

4.4.4 CITY issuance of Water Availability Equivalents. Within 30 days after the effectiveness of this Development Agreement OWNER shall pay or have paid to City the applicable Phase 2 Water Participation Fee. The Phase 2 Water Participation Fee shall be calculated based on the amount of the Regional Water DIF for the applicable land use category and the square footage of the applicable buildings. The calculated amount of the Phase 2 Water Participation Fee shall be paid to City within 30 days after the effective date of this Agreement or, at OWNER’s option, the Phase 2 Water Participation Fee may be paid to City in two (2) installments. The first installment shall be fifty percent (50%) of the total Phase 2 Water Participation Fee and such first installment shall be due and payable to City within 30 days after the effective date of this Development Agreement.

The second installment shall be the remaining amount of the Phase 2 Water Participation Fee and such second installment shall be due and payable to City within one (1) year after the payment of the first installment, or prior to, and as a condition precedent to, the recording of any final Parcel Map for the Project, whichever occurs first. Upon OWNER’s complete payment to CITY of the Phase 2 Water Participation Fee CITY shall issue a Certificate of Water Availability Equivalents in the form attached hereto as Exhibit G.

Such Water Availability Equivalents Certificate shall be issued by CITY within thirty (30) days of the receipt of such required payment. CITY and OWNER agree that the amount 603
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of Water Availability Equivalents issued to OWNER shall be based on the maximum projected need for Water Availability Equivalents required for the Property based upon water demand factors and assumptions listed in Exhibit C-2R of the Phase 2 Water Amendment to the Construction Agreement “Water Demand Equivalents by Land Use” for each land use category. Additionally, within five (5) business days of CITY’s receipt of OWNER’s payment as required under this Section 4.5.2, CITY shall issue a certificate of DIF Credit against OWNER’s DIF obligations in the Regional Water DIF Category.

4.4.5 Requirement for other Water System Improvements. A Certificate of Net MDD Availability is evidence only of available water capacity and does not satisfy any other conditions applicable to OWNER’s Project, including those relating to design and construction of master-planned potable water and recycled water transmission and distribution system for the respective pressure zone and other public infrastructure requirements.

4.5 Requirement for other Water System Improvements. A Certificate of Net MDD Availability is evidence only of available water capacity and does not satisfy any other conditions applicable to OWNER’s Project, including those relating to design and construction of master-planned potable water and recycled water transmission and distribution system for the respective pressure zone and other public infrastructure requirements.

4.6 Compliance with Public Benefits Requirements.

4.6.1 Failure to Provide Public Benefits. In the event OWNER fails or refuses to comply with any condition referenced in Section 4.1 through 4.6, or challenges (whether administratively or through legal proceedings) the imposition of such conditions, OWNER shall be deemed in default of this Agreement pursuant to Section 8 hereof, thereby entitling the City to any and all remedies available to it, including, without limitation, the right of the City to withhold OWNER’s Project-related building permits, certificates of occupancy, or discretionary approvals, without liability. Nothing herein shall waive Owner’s right to assert a default (or failure to perform) by the City has excused Owner’s performance under this Agreement.

5. FINANCING OF PUBLIC IMPROVEMENTS.

5.1 Financing Mechanism(s). OWNER agrees that, prior to the recordation of any Parcel Map, the property subject to such Parcel Map shall be included in a CFD to finance City services through annual special taxes that will initially be $.25 per square foot for non-residential buildings. These amounts shall be subject to an automatic increase at a rate not to exceed four (4%) percent per year, unless otherwise modified by CITY.

Depending on the fiscal year that the CFD is formed and the CFD tax is levied, the annual special taxes may be higher. CITY shall be the sole and exclusive lead agency in the formation of any CFD, assessment district or other public financing mechanism within the Property; provided however, that the proceeds of any such CFD, assessment district, or financing mechanism may be used, subject to restrictions that may be imposed by applicable law, for the purposes of acquiring, constructing or maintaining public facilities 604
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to be owned or operated by other public agencies, including, without limitation those facilities owned or operated by a school district. In addition to the rights of the CITY pursuant to section 5.1 hereof, CITY shall have the right, but not the obligation, to condition the formation of any CFD, assessment district or other public financing mechanism within the Property on the OWNER mitigating all Project-related impacts to the applicable school district(s) as required by such school district(s). Written evidence by such school district(s) may be required by the CITY as the condition to the formation of any CFD, assessment district or other public financing mechanism within the Property, or any steps preliminary thereto, including, without limitation, the adoption of any resolution of intention to form such CFD, assessment district or other public financing mechanism within the Property. It is not the intent of the parties hereto, by this provision, to prohibit or otherwise limit the City’s ability to take any and all necessary steps requisite to the formation of the CFD to finance City services through annual special taxes as set forth in this Section 5.1. Formation of any CFD, assessment district or other public financing mechanism within the Property, shall be subject to CITY’s ability to make all findings required by applicable law and complying with all applicable legal procedures and requirements including, without limitation, CITY’s public financing district policies as such policies may be amended from time to time. Notwithstanding the foregoing, it is acknowledged and agreed by the parties that nothing contained in this Agreement shall be construed as requiring CITY or the City Council to form any such district.

6. REVIEW FOR COMPLIANCE.

6.1 Periodic and Special Reviews.

6.1.1 Time for and Initiation of Periodic Review. The CITY shall review this Agreement every twelve (12) months from the Effective Date in order to ascertain the good faith compliance by the OWNER with the terms of this Agreement. The OWNER shall submit an Annual Monitoring Report to CITY, in a form acceptable to the City Manager, along with any applicable processing charge within ten (10) days after each anniversary date of the Effective Date of this Agreement. Within fifteen (15) days after the receipt of the Annual Monitoring Report, CITY shall review the Annual Monitoring Report. Prior to the expiration of the fifteen (15) day review period, CITY shall either issue a notice of continuing compliance or a notice of non-compliance and a notice of CITY’s intent to conduct a Special Review pursuant to Sections 6.1.2 through 6.1.6. Issuance of a notice of continuing compliance may be issued by the City Manager or his designee.

6.1.2 Initiation of Special Review. A special review may be called either by agreement between the parties or by initiation in one or more of the following ways:
(a) Recommendation of the Planning staff;
(b) Affirmative vote of at least four (4) members of the Planning Commission; or (c) Affirmative vote of at least three (3) members of the City Council.

6.1.3 Notice of Special Review. The City Manager shall begin the special review proceeding by giving notice that the CITY intends to undertake a special review of this 605
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Agreement to the OWNER. Such notice shall be given at least ten (10) days in advance of the time at which the matter will be considered by the Planning Commission.

6.1.4 Public Hearing. The Planning Commission shall conduct a hearing at which the OWNER must demonstrate good faith compliance with the terms of this Agreement.

The burden of proof on this issue is upon the OWNER.

6.1.5 Findings Upon Public Hearing. The Planning Commission shall determine upon the basis of substantial evidence whether or not the OWNER has, for the period under review, complied in good faith with the terms and conditions of this Agreement.

6.1.6 Procedure Upon Findings.
(a) If the Planning Commission finds and determines on the basis of substantial evidence that the OWNER has complied in good faith with the terms and conditions of this Agreement during the period under review, the review for that period is concluded. (b) If the Planning Commission finds and determines on the basis of substantial evidence that the OWNER has not complied in good faith with the terms and conditions of this Agreement during the period under review, the Planning Commission may recommend to the City Council to modify or terminate this Agreement. (c) The OWNER may appeal a determination pursuant to paragraph (b) to the City Council in accordance with the CITY's rule for consideration of appeals in zoning matters generally.

6.2 Proceedings Upon Modification or Termination. If, upon a finding under Section

6.1.6(b), the CITY determines to proceed with modification or termination of this Agreement, the CITY shall give notice to the property OWNER of its intention so to do.

The notice shall contain:
(a) The time and place of the hearing;
(b) A statement as to whether or not the CITY proposes to terminate or to modify this Agreement; and
(c) Other information that the CITY considers necessary to inform the OWNER of the nature of the proceeding.

6.3 Hearing on Modification or Termination. At the time and place set for the hearing on modification or termination, the OWNER shall be given an opportunity to be heard.

The OWNER shall be required to demonstrate good faith compliance with the terms and conditions of this Agreement. The burden of proof on this issue shall be on the OWNER.

If the City Council finds, based upon substantial evidence in the administrative record, that the OWNER has not complied in good faith with the terms and conditions of the agreement, the City Council may terminate this Agreement or modify this Agreement and impose those conditions to the action it takes as it considers necessary to protect the 606
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interests of the CITY. The decision of the City Council shall be final, subject only to judicial review pursuant to Section 1094.5 of the Code of Civil Procedure.

6.4 Certificate of Agreement Compliance. If, at the conclusion of a Periodic or Special Review, OWNER is found to be in compliance with this Agreement, CITY shall, upon written request by OWNER, issue a Certificate of Agreement Compliance (“Certificate”) to OWNER stating that after the most recent Periodic or Special Review and based upon the information known or made known to the Planning Director and City Council that (1) this Agreement remains in effect and (2) OWNER is not in default. The Certificate shall be in recordable form, shall contain information necessary to communicate constructive record notice of the finding of compliance, shall state whether the Certificate is issued after a Periodic or Special Review and shall state the anticipated date of commencement of the next Periodic Review. OWNER may record the Certificate with the County Recorder. Whether or not the Certificate is relied upon by assignees or other transferees or OWNER, CITY shall not be bound by a Certificate if a default existed at the time of the Periodic or Special Review, but was concealed from or otherwise not known to the Planning Director or City Council.

7. [OMITTED]

8. DEFAULT AND REMEDIES.

8.1 Remedies in General. It is acknowledged by the parties that CITY would not have entered into this Agreement if it were to be liable in damages under this Agreement, or with respect to this Agreement or the application thereof. In general, each of the parties hereto may pursue any remedy at law or equity available for the breach of any provision of this Agreement, except that CITY shall not be liable in damages to OWNER, or to any successor in interest of OWNER, or to any other person, and OWNER covenants not to sue for damages or claim any damages:
(a) For any breach of this Agreement or for any cause of action which arises out of this Agreement; or
(b) For the taking, impairment or restriction of any right or interest conveyed or provided under or pursuant to this Agreement; or
(c) Arising out of or connected with any dispute, controversy or issue regarding the application or interpretation or effect of the provisions of this Agreement.

8.2 Specific Performance. The parties acknowledge that money damages and remedies at law generally are inadequate and specific performance and other non- monetary relief are particularly appropriate remedies for the enforcement of this Agreement and should be available to all parties for the following reasons:
(a) Money damages are unavailable against CITY as provided in Section 8.1 above.
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(b) Due to the size, nature and scope of the project, it may not be practical or possible to restore the Property to its natural condition once implementation of this Agreement has begun. After such implementation, OWNER may be foreclosed from other choices it may have had to utilize the Property or portions thereof. OWNER has invested significant time and resources and performed extensive planning and processing of the Project in agreeing to the terms of this Agreement and will be investing even more significant time and resources in implementing the Project in reliance upon the terms of this Agreement, and it is not possible to determine the sum of money which would adequately compensate OWNER for such efforts.

8.3 Release. Except for nondamage remedies, including the remedy of specific performance and judicial review as provided for in Section 6.5, OWNER, for itself, its successors and assignees, hereby releases the CITY, its officers, agents and employees from any and all claims, demands, actions, or suits of any kind or nature arising out of any liability, known or unknown, present or future, including, but not limited to, any claim or liability, based or asserted, pursuant to Article I, Section 19 of the California Constitution, the Fifth Amendment of the United States Constitution, or any other law or ordinance which seeks to impose any other liability or damage, whatsoever, upon the CITY because it entered into this Agreement or because of the terms of this Agreement.

8.4 Termination or Modification of Agreement for Default of OWNER. Subject to the provisions contained in Subsection 6.3 herein, CITY may terminate or modify this Agreement for any failure of OWNER to perform any material duty or obligation of OWNER under this Agreement, or to comply in good faith with the terms of this Agreement (hereinafter referred to as “default”); provided, however, CITY may terminate or modify this Agreement pursuant to this Section only after providing written notice to OWNER of default setting forth the nature of the default and the actions, if any, required by OWNER to cure such default and, where the default can be cured, OWNER has failed to take such actions and cure such default within 60 days after the effective date of such notice or, in the event that such default cannot be cured within such 60 day period but can be cured within a longer time, has failed to commence the actions necessary to cure such default within such 60 day period and to diligently proceed to complete such actions and cure such default.

8.5 Termination of Agreement for Default of CITY. OWNER may terminate this Agreement only in the event of a default by CITY in the performance of a material term of this Agreement and only after providing written notice to CITY of default setting forth the nature of the default and the actions, if any, required by CITY to cure such default and, where the default can be cured, CITY has failed to take such actions and cure such default within 60 days after the effective date of such notice or, in the event that such default cannot be cured within such 60 day period but can be cured within a longer time, has failed to commence the actions necessary to cure such default within such 60 day period and to diligently proceed to complete such actions and cure such default.

9. THIRD PARTY LITIGATION.
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9.1 General Plan Litigation. CITY has determined that this Agreement is consistent with its Comprehensive General Plan, as such General Plan exists as of the Effective Date (“General Plan”), and that the General Plan meets all requirements of law. OWNER has reviewed the General Plan and concurs with CITY’s determination. CITY shall have no liability in damages under this Agreement for any failure of CITY to perform under this Agreement or the inability of OWNER to develop the Property as contemplated by the Development Plan of this Agreement as the result of a judicial determination that on the Effective Date, or at any time thereafter, the General Plan, or portions thereof, are invalid or inadequate or not in compliance with law.

9.2 Third Party Litigation Concerning Agreement. OWNER shall defend, at its expense, including attorneys’ fees, indemnify, and hold harmless CITY, its agents, officers and employees from any claim, action or proceeding against CITY, its agents, officers, or employees to attack, set aside, void, or annul the approval of this Agreement or the approval of any permit granted pursuant to this Agreement. CITY shall promptly notify OWNER of any such claim, action or proceeding, and CITY shall cooperate in the defense. If CITY fails to promptly notify OWNER of any such claim, action or proceeding, or if CITY fails to cooperate in the defense, OWNER shall not thereafter be responsible to defend, indemnify, or hold harmless CITY. CITY may in its discretion participate in the defense of any such claim, action or proceeding.

9.3 Indemnity. In addition to the provisions of 9.2 above, OWNER shall indemnify and hold CITY, its officers, agents, employees and independent contractors free and harmless from any liability whatsoever, based or asserted upon any act or omission of OWNER, its officers, agents, employees, subcontractors and independent contractors, for property damage, bodily injury, or death (OWNER’s employees included) or any other element of damage of any kind or nature, to the extent relating to or in any way connected with or arising from the activities contemplated hereunder, including, but not limited to, the study, design, engineering, construction, completion, failure and conveyance of the public improvements, save and except claims for damages arising through the sole active negligence or sole willful misconduct of CITY. OWNER shall defend, at its expense, including attorneys’ fees, CITY, its officers, agents, employees and independent contractors in any legal action based upon such alleged acts or omissions. CITY may in its discretion participate in the defense of any such legal action.

9.4 Environment Assurances. OWNER shall indemnify and hold CITY, its officers, agents, and employees free and harmless from any liability, to the extent based or asserted, upon any act or omission of OWNER, its officers, agents, employees, subcontractors, predecessors in interest, successors, assigns and independent contractors for any violation of any federal, state or local law, ordinance or regulation relating to industrial hygiene or to environmental conditions on, under or about the Property during OWNER’S period of ownership of the Property, including, but not limited to, soil and groundwater conditions caused by OWNER, and OWNER shall defend, at its expense, including attorneys’ fees, CITY, its officers, agents and employees in any action based or asserted upon any such alleged act or omission. CITY may in its discretion participate in the defense of any such action.
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9.5 Reservation of Rights. With respect to Sections 9.2, 9.3 and 9.4 herein, CITY reserves the right to either (1) approve the attorney(s) which OWNER selects, hires or otherwise engages to defend CITY hereunder, which approval shall not be unreasonably withheld, or (2) conduct its own defense, provided, however, that OWNER shall reimburse CITY forthwith for any and all reasonable expenses incurred for such defense, including attorneys’ fees, upon billing and accounting therefor.

9.6 Survival. The provisions of this Sections 9.1 through 9.6, inclusive, shall survive the termination of this Agreement.

10. MORTGAGEE PROTECTION.

10.1 Mortgagee Protection. The parties hereto agree that this Agreement shall not prevent or limit OWNER, in any manner, at OWNER’s sole discretion, from encumbering the Property or any portion thereof or any improvement thereon by any mortgage, deed of trust or other security device securing financing with respect to the Property. CITY acknowledges that the lenders providing such financing may require certain Agreement interpretations and modifications and agrees upon request, from time to time, to meet with OWNER and representatives of such lenders to negotiate in good faith any such request for interpretation or modification. CITY will not unreasonably withhold its consent to any such requested interpretation or modification provided such interpretation or modification is consistent with the intent and purposes of this Agreement. Any Mortgagee of the Property shall be entitled to the following rights and privileges:
(a) Neither entering into this Agreement nor a breach of this Agreement shall defeat, render invalid, diminish or impair the lien of any mortgage on the Property made in good faith and for value, unless otherwise required by law.
(b) The Mortgagee of any mortgage or deed of trust encumbering the Property, or any part thereof, which Mortgagee, has submitted a request in writing to the CITY in the manner specified herein for giving notices, shall be entitled to receive written notification from CITY of any default by OWNER in the performance of OWNER’s obligations under this Agreement.
(c) If CITY timely receives a request from a Mortgagee requesting a copy of any notice of default given to OWNER under the terms of this Agreement, CITY shall provide a copy of that notice to the Mortgagee within ten (10) days of sending the notice of default to OWNER. The Mortgagee shall have the right, but not the obligation, to cure the default during the remaining cure period allowed such party under this Agreement. (d) Any Mortgagee who comes into possession of the Property, or any part thereof, pursuant to foreclosure of the mortgage or deed of trust, or deed in lieu of such foreclosure, shall take the Property, or part thereof, subject to the terms of this Agreement.

Notwithstanding any other provision of this Agreement to the contrary, no Mortgagee shall have an obligation or duty under this Agreement to perform any of OWNER’s obligations or other affirmative covenants of OWNER hereunder, or to guarantee such performance; provided, however, that to the extent that any covenant to be performed by OWNER is a 610
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condition precedent to the performance of a covenant by CITY, the performance thereof shall continue to be a condition precedent to CITY’s performance hereunder, and further provided that any sale, transfer or assignment by any Mortgagee in possession shall be subject to the provisions of Section 2.4 of this Agreement (e) In the event of a default by Owner, any Mortgagee shall have the right to remedy, or cause to be remedied, such default within sixty (60) days following the later to occur of (i) the date of Mortgagee's receipt of the notice referred to in Section 10.1(b) above, or (ii) the expiration of the period provided herein for Owner to remedy or cure such default, and City shall accept such performance by or at the insistence of the Mortgagee as if the same had been timely made by Owner; provided, however, that (i) if such default is not capable of being cured within the timeframes set forth in this Section and Mortgagee commences to cure the default within such timeframes, then Mortgagee shall have such additional time as is required to cure the default so long as Mortgagee diligently prosecutes the cure to completion and (ii) if possession of the Property (or portion thereof) is required to effectuate such cure or remedy, the Mortgagee shall be deemed to have timely cured or remedied if it commences the proceedings necessary to obtain possession thereof within sixty (60) days after receipt of the copy of the notice, diligently pursues such proceedings to completion, and, after obtaining possession, diligently completes such cure or remedy.

11. MISCELLANEOUS PROVISIONS.

11.1 Recordation of Agreement. This Agreement and any amendment or cancellation thereof shall be recorded with the San Bernardino County Recorder by the City Clerk within the ten (10) days after the CITY executes this Agreement, as required by Section 65868.5 of the Government Code. If the parties to this Agreement or their successors in interest amend or cancel this Agreement as provided for herein and in Government Code Section 65868, or if the CITY terminates or modifies the agreement as provided for herein and in Government Code Section 65865.1 for failure of the applicant to comply in good faith with the terms or conditions of this Agreement, the City Clerk shall have notice of such action recorded with the San Bernardino County Recorder.

11.2 Entire Agreement. This Agreement sets forth and contains the entire understanding and agreement of the parties, and there are no oral or written representations, understandings or ancillary covenants, undertakings or agreements which are not contained or expressly referred to herein. No testimony or evidence of any such representations, understandings or covenants shall be admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions of this Agreement.

11.3 Severability. If any term, provision, covenant or condition of this Agreement shall be determined invalid, void or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this Agreement. Notwithstanding the foregoing, the provision of the Public Benefits set forth in Section 4 of this Agreement, including the payment of the fees set forth therein, are essential elements of this Agreement and CITY would not have entered into this Agreement but for such provisions, 611
-27-
and therefore in the event such provisions are determined to be invalid, void or unenforceable, this entire Agreement shall be null and void and of no force and effect whatsoever.

11.4 Interpretation and Governing Law. This Agreement and any dispute arising hereunder shall be governed and interpreted in accordance with the laws of the State of California. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and purposes of the parties hereto, and the rule of construction to the effect that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement, all parties having been represented by counsel in the negotiation and preparation hereof.

11.5 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement.

11.6 Singular and Plural. As used herein, the singular of any word includes the plural.

11.7 Joint and Several Obligations. Subject to Section 2.4, if at any time during the term of this Agreement the Property is owned, in whole or in part, by more than one owner, all obligations of such owners under this Agreement shall be joint and several, and the default of any such owner shall be the default of all such owners. Notwithstanding the foregoing, no owner of a single lot which has been finally subdivided and sold to such owner as a member of the general public or otherwise as an ultimate user shall have any obligation under this Agreement except as provided under Section 4 hereof.

11.8 Time of Essence. Time is of the essence in the performance of .the provisions of this Agreement as to which time is an element.

11.9 Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by the other party, or the failure by a party to exercise its rights upon the default of the other party, shall not constitute a waiver of such party’s right to insist and demand strict compliance by the other party with the terms of this Agreement thereafter.

11.10 No Third-Party Beneficiaries. This Agreement is made and entered into for the sole protection and benefit of the parties and their successors and assigns. No other person shall have any right of action based upon any provision of this Agreement.

11.11 Force Majeure. Neither party shall be deemed to be in default where failure or delay in performance of any of its obligations under this Agreement is caused by floods, earthquakes, other Acts of God, fires, wars, riots or similar hostilities, strikes and other labor difficulties beyond the party’s control, (including the party’s employment force), government regulations, court actions (such as restraining orders or injunctions), or other causes beyond the party’s control. If any such events shall occur, the term of this Agreement and the time for performance by either party of any of its obligations hereunder may be extended by the written agreement of the parties for the period of time that such events prevented such performance, provided that the term of this Agreement shall not be extended under any circumstances for more than five (5) years. 612
-28-

11.12 Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the party benefited thereby of the covenants to be performed hereunder by such benefited party.

11.13 Successors in Interest. The burdens of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, all successors in interest to the parties to this Agreement. All provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land. Each covenant to do or refrain from doing some act hereunder with regard to development of the Property: (a) is for the benefit of and is a burden upon every portion of the Property; (b) runs with the Property and each portion thereof; and, (c) is binding upon each party and each successor in interest during ownership of the Property or any portion thereof.

11.14 Counterparts. This Agreement may be executed by the parties in counterparts, which counterparts shall be construed together and have the same effect as if all of the parties had executed the same instrument.

11.15 Jurisdiction and Venue. Any action at law or in equity arising under this Agreement or brought by a party hereto for the purpose of enforcing, construing or determining the validity of any provision of this Agreement shall be filed and tried in the Superior Court of the County of San Bernardino, State of California, and the parties hereto waive all provisions of law providing for the filing, removal or change of venue to any other court.

11.16 Project as a Private Undertaking. It is specifically understood and agreed by and between the parties hereto that the development of the Project is a private development, that neither party is acting as the agent of the other in any respect hereunder, and that each party is an independent contracting entity with respect to the terms, covenants and conditions contained in this Agreement. No partnership, joint venture or other association of any kind is formed by this Agreement. The only relationship between CITY and OWNER is that of a government entity regulating the development of private property and the owner of such property.

11.17 Further Actions and Instruments. Each of the parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of either party at any time, the other party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. The City Manager may delegate his powers and duties under this Agreement to an Assistant City Manager or other management level employee of the CITY.

11.18 Eminent Domain. No provision of this Agreement shall be construed to limit or restrict the exercise by CITY of its power of eminent domain. 613
-29-

11.19 Agent for Service of Process. In the event OWNER is not a resident of the State of California or it is an association, partnership or joint venture without a member, partner or joint venturer resident of the State of California, or it is a foreign corporation, then in any such event, OWNER shall file with the Planning Director, upon its execution of this Agreement, a designation of a natural person residing in the State of California, giving his or her name, residence and business addresses, as its agent for the purpose of service of process in any court action arising out of or based upon this Agreement, and the delivery to such agent of a copy of any process in any such action shall constitute valid service upon OWNER. If for any reason service of such process upon such agent is not feasible, then in such event OWNER may be personally served with such process out of this County and such service shall constitute valid service upon OWNER. OWNER is amenable to the process so served, submits to the jurisdiction of the Court so obtained and waives any and all objections and protests thereto.

11.20 Estoppel Certificate. Within thirty (30) business days following a written request by any of the parties, the other party shall execute and deliver to the requesting party a statement certifying that (i) either this Agreement is unmodified and in full force and effect or there have been specified (date and nature) modifications to the Agreement, but it remains in full force and effect as modified; and (ii) either there are no known current uncured defaults under this Agreement or that the responding party alleges that specified (date and nature) defaults exist. The statement shall also provide any other reasonable information requested. The failure to timely deliver this statement shall constitute a conclusive presumption that this Agreement is in full force and effect without modification except as may be represented by the requesting party and that there are no uncured defaults in the performance of the requesting party, except as may be represented by the requesting party. OWNER shall pay to CITY all costs incurred by CITY in connection with the issuance of estoppel certificates requested by Owner under this Section 11.20 prior to CITY’s issuance of such certificates.

11.21 Authority to Execute. The person or persons executing this Agreement on behalf of OWNER warrants and represents that he or she/they have the authority to execute this Agreement on behalf of his or her/their corporation, partnership or business entity and warrants and represents that he or she/they has/have the authority to bind OWNER to the performance of its obligations hereunder.

11.22 Prevailing Wage. OWNER, for itself, its successors, and assigns, agrees, covenants, and warrants that the development of the Property, if any, shall comply with all applicable federal and state labor laws (including, without limitation, the requirement under California law to pay prevailing wages and hire apprentices), and all obligations as set forth herein.

11.22.1 CITY makes no representations concerning prevailing wages in compliance with California Labor Code Section 1770 et seq.

11.22.2 OWNER acknowledges and agrees that it shall be independently responsible for reviewing the applicable laws and regulations with respect to the payment of prevailing wages and complying therewith. OWNER shall bear all risks of payment or 614
-30-
non-payment of prevailing wages under California law and/or the implementation of Labor Code Section 1781, as the same may be amended from time to time, and/or any other similar law.

11.22.3 The foregoing indemnity shall survive termination of this Agreement and shall continue after completion of the construction and development of the Property by OWNER, its successors or assigns. OWNER shall be solely responsible for determining and effectuating compliance with such laws.

11.22.4 OWNER, ON BEHALF OF ITSELF, ITS SUCCESSORS, AND ASSIGNS,

WAIVES AND RELEASES CITY FROM ANY RIGHT OF ACTION THAT MAY BE AVAILABLE TO OWNER PURSUANT TO LABOR CODE SECTION 1781 OR THE DAVIS BACON ACT. RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS SECTION 11.22, OWNER ACKNOWLEDGES THE PROTECTIONS OF CIVIL CODE SECTION 1542, WHICH READS AS FOLLOWS: A GENERAL RELEASE DOES

NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT

KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF

EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE

MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.

INITIALS. BY INITIALING BELOW, OWNER KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY WITH THE MATTERS WHICH ARE THE SUBJECT OF THE FOREGOING WAIVERS AND RELEASES:
_______________
(Owner's Initials)
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the day and year set forth below.
[SIGNATURES CONTAINED ON FOLLOWING PAGE]
615
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SIGNATURE PAGE
TO DEVELOPMENT AGREEMENT PDA23-006
“OWNER”
LEGACY LAND PARTNERS LLC, a
Florida limited liability company

By: ________________________
Name:

Its: ______________________
Date: ___________________
JAB MILL CREEK LLC, a Florida limited
liability company

By: ________________________
Name:

Its: ______________________
Date: ___________________
“CITY”

CITY OF ONTARIO
By:

Scott Ochoa
City Manager
Date: ___________________
ATTEST:

City Clerk, Ontario
APPROVED AS TO FORM:

BEST BEST KRIEGER, LLP
City Attorney
616

ACKNOWLEDGEMENT

STATE OF CALIFORNIA )
COUNTY OF _______________________ )
On _________________, 20_____, before me,______________________________________, Date Insert Name and Title of the Officer
personally appeared ___________________________________________________________ Name(s) of Signer(s)
____________________________________________________________________________, who proved to me on the basis of satisfactory evidence to be the person whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature________________________________
Signature of Notary Public
Place Notary Seal Above
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 617
A-1

ACKNOWLEDGEMENT

STATE OF CALIFORNIA )
COUNTY OF _______________________ )
On _________________, 20_____, before
me,______________________________________,
Date Insert Name and Title of the Officer
personally appeared
___________________________________________________________ Name(s) of Signer(s)
______________________________________________________________________ ______, who proved to me on the basis of satisfactory evidence to be the person whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity, and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument.

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

WITNESS my hand and official seal.

Signature________________________________
Signature of Notary Public
Place Notary Seal Above
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. 618
A-1
EXHIBIT "A"

TO DEVELOPMENT AGREEMENT
Legal Description of Property
619
B-1
EXHIBIT "B"

TO DEVELOPMENT AGREEMENT
Map showing Property and its location
620
C-1
EXHIBIT "C"

TO DEVELOPMENT AGREEMENT
Existing Development Approvals
On October 23, 2007 the Planning Commission:
a) Issued Resolution No. PC07-125 recommending City Council certification of the Rich-Haven Specific Plan EIR (SCH#2006051081).
b) Issued Resolution No. PC07-127 recommending to City Council approval of the Rich-Haven Specific Plan (File No. PSP05-004).

On December 4, 2007, the City Council:
a) Issued Resolution No. 2007-145 certifying the Rich-Haven Specific Plan EIR (SCH#2006051081).
b) Adopted Ordinance No. 2884 approving the Rich-Haven Specific Plan.

On February 23, 2016, the Planning Commission:
a) Issued Resolution No. PC16-003 recommending City Council adoption of an Addendum to the Rich-Haven EIR.
b) Issued Resolution PC16-004 recommending approval of the Rich-Haven Specific Plan Amendment (File No. PSPA16-001).

On March 15, 2016, the City Council:
a) Issued Resolution No. 2016-024 for the adoption of an Addendum (File No. PSPA16-001) to the Rich-Haven Specific Plan EIR.
b) Issued Resolution No. 2016-025 approving an Amendment (File No.

PSPA16-001) to the Rich-Haven Specific Plan.

On January 23, 2018, the Planning Commission:
a) Issued Resolution No. PC18-014 recommending City Council adoption of an Addendum to the Rich-haven EIR.
b) Issued Resolution No. PC18-015 recommending to City Council adoption of the Rich-Haven Specific Plan Amendment (File No. PSPA16-005).

On February 20, 2018, the City Council:
a) Issued Resolution No. 2018-017 for the adoption of an Addendum (File No. PSPA16-005) to the Rich-Haven Specific Plan EIR.
b) Issued Resolution No. 2018-018 approving an Amendment (File No.

PSPA16-005) to the Rich-Haven Specific Plan.
621
D-1
EXHIBIT "D"

TO DEVELOPMENT AGREEMENT
Existing Land Use Regulations
These documents are listed for reference only:

1. The Rich-Haven Specific Plan (File No. PSP05-004) Environmental Impact Report, Resolution No. 2007-145.

2. The Rich-Haven Specific Plan (File No. PSP05-004), Ordinance No. 2884.

3. Addendum to the Rich-Haven Specific Plan (File No. PSPA16-001) Environmental Impact Report, Resolution No. 2016-024.

4. Amendment to the Rich-Haven Specific Plan (File No. PSPA16-001), Resolution No. 2016-025.

5. Addendum to the Rich-Haven Specific Plan (File No. PSPA16-005) Environmental Impact Report, Resolution No. 2018-017.

6. Amendment to the Rich-Haven Specific Plan (File No. PSPA16-005), Resolution No. 2018-018.

7. City of Ontario Municipal Code
a. Six – Sanitation & Health
b. Seven – Public Works
c. Eight – Building Regulations
d. Nine – Development Code
e. Ten – Parks & Recreation
622
E-1
EXHIBIT "E"

TO DEVELOPMENT AGREEMENT
Description of Required Infrastructure Improvements
OWNER shall design, construct, and complete the following Street, Storm Drain (SD), Potable Water (PW), Recycled Water (RW), and Fiber Optic (FO) improvements, prior to OWNER’s request for any final certificate of occupancy permit for any building within the Property.

Street (ST) Improvements
a. ST improvements on Mill Creek Avenue, between the northerly project limits to Ontario Ranch Road.
b. ST improvements on Ontario Ranch Road, between the Sunrise Avenue and Mill Creek Avenue.
c. Modify Traffic Signal at Mill Creek Avenue and Ontario Ranch Road.

Potable Water (PW) Improvements
a. PW on Mill Creek Avenue, between Chino Avenue and Ontario Ranch Road.

Recycled Water (RW) Improvements
a. RW on Mill Creek Avenue, between Chino Avenue and Ontario Ranch Road.
b. RW on Chino Avenue, between Haven Avenue and Mill Creek Avenue.

Fiber Optic (FO) Improvements
a. FO on Mill Creek Avenue, between the northerly project limits and Ontario Ranch Road.
a. FO on South Twinkle Avenue along the SCE corridor connecting existing FO.

Trail Improvements
a. SCE corridor improvements, between Twinkle Avenue and Mill Creek Avenue.
623
G-1
EXHIBIT “F”

TO DEVELOPMENT AGREEMENT
Required Infrastructure Improvements
624
G-1
625
G-1
EXHIBIT "G"

TO DEVELOPMENT AGREEMENT

FORM OF CERTIFICATE OF NET MDD AVAILABILITY
Pursuant to Section ___ of this Agreement between the City of Ontario, a California municipal corporation, and ________________, a __________________ company, hereinafter called "OWNER", the terms and definitions of which are hereby incorporated herein by this reference and hereinafter called "Agreement", the City of Ontario hereby certifies based on CITY receipt of payment of OWNER’s share of the funding for the Phase 2 Water Improvements, that OWNER is entitled to the following Net MDD Water Availability.

Amount of Net MDD _________________________ gpm
________________________________________
Scott Ochoa, City Manager
Dated:_________________________________
626
J
EXHIBIT “H”

TO DEVELOPMENT AGREEMENT

FORM OF CERTIFICATE OF REGIONAL DIF CREDIT
Pursuant to Section 4.5.2 of this Agreement by and between the City of Ontario and ____________________, dated _______________, 201_, the terms and definitions of which are hereby incorporated herein by this reference and hereinafter called the “Development Agreement’, the City of Ontario hereby certifies that OWNER is entitled to the following amount and nature of DIF Credits in the Regional Water DIF Infrastructure Category:

Amount of Credit: $
Scott Ochoa, City Manager
Dated:
627
J
EXHIBIT“I-1”

TO DEVELOPMENT AGREEMENT

ONTARIO RANCH

WATER SUPPLY PHASING PLAN
Phase 2 Water
Availability
Equivalency
Estimated
Net MDD Available1
Phase 2 A
Supply & Storage

1. 1 - Additional Ground Water Well and Collection lines - Design and Construction
8,250 gpm2 7,750 gpm2
Pipelines (Transmission & Distribution)2

2. 925 Zone Transmission lines – Design and Construction

3. Temporary Pressure Reducing Station 3 – Design and
Construction
Phase 2B
Supply & Storage

4. 1 – Additional Ground Water Well and Collection lines – Design and Construction

5. 1 – 6 million gallon Reservoir – 925 Zone – Design and Construction
10,500 gpm2 9,860 gpm2
(1) Upon Completion of the construction of all of the improvements described for each Phase a Certificate of Net MDD Availability shall be issued to Developer for the corresponding amount of Net MDD. Net MDD means the maximum daily demand on the potable water supply, net of the water requirements for public schools and parks. The Water Availability Equivalency includes the estimated requirements for public schools and parks. The amount of Net MDD specified is the cumulative amount for which building permits may be issued upon funding of the corresponding and all preceding Phases of improvements.
(2) The ability of a particular development to utilize Net MDD assigned to it by the Developer will require the completion of design and construction of Master-planned potable and recycled water transmission and distribution pipelines for the respective pressure zone. Other factors may include its location, the particular land use and Water Availability Equivalents assigned to it as specified in Exhibit C-2.
(3) Pressure reducing stations are a component of the pipeline transmission and distribution system.
628
J
EXHIBIT “I-2”
317129390.1
Available Water Supply - See Exhibit C-1R for Net MDD Available Table A - Water Demand Equivalents By Land Use
Water
Demand
Equivalents
(WDE)2
Recycled
Water
Demand
Factor1
(ADD)
Recycled
Water
Demand Of
Total Water
Demand
(gpd/du) (gpd/ac) (gpm/unit) (gpd/ac) (%)
Detached Dwellings (less than 5 units per acre) 544 0.57 900 28% Detached or Attached Dwellings (between 5 and 11 units per acre) 464 0.48 1,000 21% Attached Dwellings (between 11 and 25 units per acre) 323 0.34 1,500 18% High Density Dwellings (25+ units per acre) 152 0.16 1,500 27% Commercial Lodging 150 0.16 1,700 50%
Retail/Serv ices Uses 2,200 2.29 2,300 51%
Office Uses 3,400 3.54 2,300 40%
Business Park Uses 2,200 2.29 2,200 50%
Industrial Uses 2,000 2.08 2,200 52%
Institutional Use 2,200 2.29 1,600 42%
Parks 1,000 1.04 1,400 58%
Schools 3,500 3.65 1,600 31%
Table B - Example Water Supply Calculation
Land Use Residential
Units
WDE Factor
(gpm)
Potable
MDD
(gpm)
Development
Detached Dwellings (less than 5 units per acre) 5,061 0.57 2,868 Detached or Attached Dw ellings (betw een 5 and 11 units per acre) 2,530 0.48 1,223 Attached Dwellings (between 11 and 25 units per acre) 3,410 0.34 1,147 Retail/Serv ices Uses (per acre)2 2.29 239
TOTAL 11,001 5,477
Three (3) Wells Are required to Support this example, assuming each w ell produces 2,000 gpm and connection to the Recycled Water System maximizing Recycled Water Use. 1 Residential Acres are estimated based on the w eighted average derived from the average number of units per land use category. 2 Commercial acreage is calculated from a total square footage of 1,361,000 SF w ith an average Floor to Area Ratio (FAR) of 0.30 for commercial services in The Ontario Plan. 1Recycled Water Demands include irrigation for right-of-w ay (medians and parkw ays), neighborhood edge, pocket parks, and common areas.

Potable WaterThe Ontario Plan Recycled Water
Land Use
1,428
166
194 202
1,950
1,284
Acres1
(gross)
104
369
803
Recycled
Water ADD
(gpm)
Water Demand Factor
(ADD)
256
2 The WDE is based on the Maximum Day Demand (MDD) w ith a peaking factor of 1.5 in the NMC for all land use categories. 629
J
Exhibit “JI”

FORM OF PLUME DISCLOSURE LETTER
630
Department: Utilities
Prepared By: Courtney Jones
Staff Member Presenting: Scott Burton, Utilities
General Manager
Reviewed By: Dennice Raygoza, Albert G
Gastelum, Michael Sigsbee
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 22
SUBJECT:

AUTHORIZATION TO ISSUE A REQUEST FOR QUALIFICATIONS FOR

PROFESSIONAL SERVICES TO EVALUATE THE FEASIBILITY OF WASTEWATER AND

RECYCLED WATER SERVICE ALTERNATIVES

CITY OF ONTARIO
Agenda Report
June
3, 2025
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council authorize the City Manager, or designee, to issue a Request for Qualifications (RFQ) to solicit proposals from qualified firms to evaluate the feasibility of wastewater and recycled water service alternatives.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
Invest in the Growth and Evolution of the City's Economy Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
FISCAL IMPACT:

There is not a direct fiscal impact associated with this action. Award for services and funding for the proposed professional services will be brought back for City Council approval as needed.

BACKGROUND & ANALYSIS:

At its May 6, 2025 meeting, City Council directed Staff to prepare an agenda item to evaluate alternatives to the Inland Empire Utilities Agency (IEUA) for wastewater and recycled water services.

For over 50 years, the City of Ontario has maintained a Regional Sewer Service Contract with the Inland Empire Utilities Agency (IEUA) for wastewater treatment services and recycled water supply based on the City’s contractual entitlement. During the parties’ efforts to renew this longstanding agreement, IEUA adopted Ordinance Nos. 111, 112, 114, and 115, which impose new terms and conditions of service without honoring the contractual renegotiation process. The City believes these unilateral actions are unconstitutional and unlawful and undermine the parties’ historically collaborative efforts to steward the region’s water resources to meet future needs. Ontario, in cooperation with other agencies, has initiated litigation against IEUA concerning this and other related matters.
631
IEUA’s unilateral actions have introduced significant uncertainty regarding the long-term future of local wastewater and recycled water services and resources. In response, the City is taking proactive steps to evaluate alternative service models to ensure long-term stability and community benefit.

As a part of this effort, the City will issue an RFQ to identify qualified firms to assist in evaluating alternatives. This evaluation will consider but not be limited to the following: compliance with Local Agency Formation Commission requirements, regulatory and environmental review processes, property acquisition needs, financial feasibility, and infrastructure concepts, including the possibility of a Joint Powers Authority formation. This effort represents a critical step towards developing a long-term, self-reliant options and solutions for wastewater and recycled water services. While this evaluation proceeds, the City will continue to assess potential partnerships with neighboring agencies, including IEUA.

The scope of work will include an assessment of specific alternatives, such as the feasibility of constructing satellite treatment facilities in areas of continued development or redirecting existing sewer flows to support the City’s recycled water system. As part of this effort, the City will explore infrastructure strategies to address potential service gaps and ensure reliable long-term capacity.

Establishing wastewater treatment facilities is a complex, multi-phase undertaking that requires careful planning, environmental review, community engagement, and regulatory coordination. The RFQ will allow the City to identify and engage firms with the necessary expertise to guide the City through this critical planning effort and ensure long-term service resilience. 632
Department: Information Technology
Prepared By: Samantha Robles
Staff Member Presenting: Colin Fernandes,
Executive Director Information Technology
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 23
SUBJECT:

AUTHORIZE THE RENEWAL OF THE CITY'S ENTERPRISE RESOURCE PLANNING SOFTWARE, WORKDAY, INC.

CITY OF ONTARIO
Agenda Report
June
3, 2025
SECTION:

CONSENT CALENDAR

RECOMMENDATION:

That the City Council authorize the City Manager, or his designee, to execute the renewal to the Master Subscription Agreement (MSA) with Workday, Inc. of Pleasanton, CA, for licensing and maintenance, for a total amount of $12,931,493. Additionally, authorize a 15%
contingency amount of $1,939,724 to accommodate annual renewals for two testing and development environments, as well as any unforeseen modules. The total authorization for this
agreement amounts to $14,871,217 over a ten-year term.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Operate in a Businesslike Manner
FISCAL IMPACT:

The Fiscal Year 2024-25 Adopted Budget includes appropriations from the Information Technology Fund for annual subscription licensing and maintenance for Workday software. The proposed ten year MSA has a total contract not-to-exceed amount of $14,871,217, which includes $1,038,220 for FY2025/26, $1,087,787 for FY2026/27, $1,139,788 for FY2027/28, $1,194,341 for FY2028/29, $1,251,573 for FY2029/30, $1,311,616 for FY2030/31, $1,374,611 for FY2031/32, $1,440,703 for FY2032/33, $1,510,047 for FY2033/34, $1,582,807 for FY2034/35 and a 15% contingency amount of $1,939,724 which includes $800,000 for the annual renewals for two testing and development environments, and $1,139,724 for additional unforeseen modules. The fixed billing rates specified in the current MSA will determine the amount charged for services and reflect the actual services provided. If approved, appropriations will be added to the future years’ budgets consistent with the annual budget adoption process.

BACKGROUND & ANALYSIS:

The City of Ontario has strategically invested in modernizing its operations by adopting Workday software solutions. Starting with the Human Resources (HR) and Payroll Software Solution using Workday's platform in May 2015, the City Council approved expansions to the system. Workday's Financial Enterprise Resource Planning (ERP), Timekeeping, and Absence modules were added in July 2020 and August 2021, respectively.

Implementing Workday's comprehensive suite of solutions enables the City to optimize its business processes, streamline workflows, and deliver enhanced services to our constituents. Workday 633
integrates Accounting, Accounts Payable, Purchasing, Payroll, Human Capital Management (HCM), Timekeeping and Absence modules, and a centralized cashiering system, and has proven instrumental in driving efficiency and modernizing our operations.

The City's collaboration with Workday signifies a commitment to embracing innovative technologies that empower its workforce and elevate service delivery. Workday remains a strategic ally in the City's pursuit of operational excellence and sustained success as it evolves and grows.

To that end, the proposed order form represents an opportunity for the City to facilitate growth and expansion. In addition to the listed modules, it adds the Learning module that will allow the City to centralize training and development management and tracking. This new module enables improvements in compliance, performance, and employee development. Additionally, the order form is a ten-year commitment that reduces the average annual costs and provides contingency funding for additional user licensing to ensure that the City remains well-equipped to support and empower its employees with modern, user-friendly tools and resources. Staff requests City Council approval for a contract not-to-exceed amount of $14,871,217 over ten years to continue and expand the use of Workday with the Learning module.
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ORDER FORM 00495054.0
and MSA AMENDMENT
Customer Name City of Ontario
Workday Entity
Workday, Inc.
6110 Stoneridge Mall Road
Pleasanton, CA 94588
MSA Effective Date May 11, 2015
MSA Amendment
This Order Form is subject to and governed by the referenced MSA, as amended, including the UMSA Amendment attached
hereto.

Product Terms
Service SKUs are subject to the applicable Product Terms available at https://www.workday.com/en-us/legal/universal- contract-terms-and-conditions/index.html, which are incorporated herein by reference.

MSA Amendment Effective Date July 8, 2025
Order Form Effective Date July 8, 2025
Order Term July 8, 2025 through July 7, 2035
Currency USD
Total Fees 12,931,493

Payment Schedule Table
Payment # Payment Due Date

Payment Amount
1 Due in accordance with the MSA, invoiced upon Order Form Effective Date
1,038,220
2 Due on First anniversary of the Order Term start date 1,087,787 3 Due on Second anniversary of the Order Term start date 1,139,788 4 Due on Third anniversary of the Order Term start date 1,194,341 5 Due on Fourth anniversary of the Order Term start date 1,251,573 6 Due on Fifth anniversary of the Order Term start date 1,311,616 7 Due on Sixth anniversary of the Order Term start date 1,374,611 8 Due on Seventh anniversary of the Order Term start date 1,440,703 9 Due on Eighth anniversary of the Order Term start date 1,510,047 10 Due on Ninth anniversary of the Order Term start date 1,582,807 Total Payment Amount 12,931,493
For the avoidance of doubt, the Payment Schedule Table will be used for invoicing purposes.

Subscription Fees Table
Subscription
Period
Date Range Subscription Fee
1 July 8, 2025 through July 7, 2026 1,038,220
2 July 8, 2026 through July 7, 2027 1,087,787
3 July 8, 2027 through July 7, 2028 1,139,788
4 July 8, 2028 through July 7, 2029 1,194,341
5 July 8, 2029 through July 7, 2030 1,251,573
6 July 8, 2030 through July 7, 2031 1,311,616
7 July 8, 2031 through July 7, 2032 1,374,611
8 July 8, 2032 through July 7, 2033 1,440,703
9 July 8, 2033 through July 7, 2034 1,510,047
10 July 8, 2034 through July 7, 2035 1,582,807
Total Subscription Fee 12,931,493

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Subscription Rights Table
SKU Service Pricing
Metric
Annual Subscription Rights
HCM Human Capital Management FSE* Full Enterprise (incl. Former Workers with Access)
CCB Cloud Connect for Benefits FSE* Full Enterprise
USP** Payroll for United States FSE* United States-based Employees only
LRN Learning FSE* Full Enterprise
CCLRN Cloud Connect for Learning FSE* Full Enterprise
FIN Core Financials FSE* Full Enterprise
GM Grants Management FSE* Full Enterprise
PLNF Financial Planning FSE* Full Enterprise
PRA Prism Analytics FSE* Full Enterprise
PRJT Projects FSE* Full Enterprise
TT Time Tracking FSE* Full Enterprise
EXP Expenses FSE* Full Enterprise
PRO Procurement FSE* Full Enterprise
INV Inventory FSE* Full Enterprise
*For Pricing Metric details see the Full-Service Equivalent (“FSE”) Count Table below. **Customer agrees that the number of FSE Workers for all Payroll Services and any Workday payroll connector will always be equal to the total number of FSE Workers for HCM.

Full-Service Equivalent (“FSE”) Count Table
FSE Population Category Baseline FSE Count
Full Enterprise (incl. Former Workers with Access) 1,553 Full Enterprise 1,552
United States-based Employees only 1,552

Customer Contact Information
Billing, In Care of Subscriptions Contact
Contact Name Toni McNaughton Toni McNaughton
Street Address
City/Town, State/Region/County,
Zip/Post Code, Country
303 East "B" St
Ontario
California
91764
United States
303 East "B" St
Ontario
California
91764
United States
Phone/Fax # (909) 395-2064 (909) 395-2064
Email (required) [email protected] [email protected]

For customers based in the U.S., certain portions of the Service included in this Order Form can be used with optional downloadable software components (“ Downloadable Components”). Any applicable tax for Downloadable Components will be separately presented on the invoice based on a valuation attributed to the Downloadable Components. As of the Order Form Effective Date, there is no value attributed to any of the Downloadable Components.

Customer agrees that any product SKUs subscribed to by Customer under this or other active or future order forms shall be subject to the MSA referenced herein and to the applicable Product Line(s) and Product Terms rather than the Product Addenda attached to any other Order Forms . T his Order Form is the Signature Document and incorporates all documents linked and/or attached, including the UMSA Amendment attached hereto. Customer may not withhold, reduce, or set -off fees owed under this Order Form. All purchase order forms, tax exemption certificates and FST/VAT/business registration, supplier setup requests, and invoice inquiries shall be submitted to [email protected].

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IN WITNESS WHEREOF, this Order Form is entered into as of the Order Form Effective Date.

City of Ontario Workday, Inc.

Signature Signature

Name Name

Title Title

Date Signed Date Signed

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ADDITIONAL ORDER FORM TERMS ADDENDUM

1. General.

Unless otherwise defined herein, capitalized terms used in this Order Form have the same meaning as set forth in the MSA. The Total Subscription Fee is based on the maximum indicated in the Subscription Rights Table and any use in excess of such maximum(s) indicated will be subject to the Growth and Expansion section herein. Annual Subscription Rights limits may not be decreased during the Order Term.

2. FSE Metric Calculation and Worker Category Definitions.

The total FSE Count is calculated by categorizing each Worker to one of the Worker Categories below, multiplying the applicable number of Workers by the Applicable Percentage, and then adding the FSE Count for each Worker Category.

FSE Calculation Table:

Worker Category Total Workers Applicable
Percentage
FSE Count
Full Time Employees 1,430 100.0% 1,430
Part-Time Employees 477 25.0% 120
Associates 11 12.5% 2
Former Workers with Access 4 2.5% 1
Total FSE Count: 1,922 1,553
The Service may be used by Customer only for the Worker Categories listed above and as defined below.

“Full-Time Employee” is an employee of Customer regularly scheduled for more than twenty hours per week regardless of the method of payment or actual hours worked, whether or not such employee is eligible to receive employee benefits in accordance with Customer’s internal st andard practices. A Full -Time Employee will be considered non-temporary if they are hired to work for a period of more than 3 months in a given year.

“Part-Time Employee” is an employee of Customer regularly scheduled for twenty hours per week or less regardless of the method of payment or actual hours worked, whether or not such employee is eligible to receive employee benefits in accordance with Customer’s internal stan dard practices. A Part -Time Employee will be considered non-temporary if they are hired to work for a period of more than 3 months in a given year.

"Associate” is an individual not counted as a Full -Time or Part-Time Employee but in one of the following categories: temporary employees, independent contractors and affiliated non-employees including, but not limited to, volunteers and vendors whose Active Records are in the Service.

“Former Worker with Access” is a former worker that continues to have access to the Service through the Employee Self-Service features. Former Workers with Access are only included in the Subscription Rights for the Human Capital Management Service.

Former Workers with Static Records shall be excluded from the FSE calculation but may continue to be maintained in the Service. “ Static Records” are records in the Service for workers with whom Customer has no further relationship and to whom Customer does not provide self -service access. Static Records include former worker records used solely for historical reference. All other worker records a re “Active Records”.

3. Growth and Expansion.

A. Annual Reporting Obligation.

Customer will report to [email protected] no earlier than 90 days and no later than 60 days (“Annual Reporting Period”) based on the number of Active FSE Worker Records and Additional Metrics provided below, as applicable, as of 90 days (“ Count Date”) prior to each anniversary of the Order Term start date. Customer agrees to pay fees for any excess Subscription Rights at the Expansion Rates 638
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described below to cover the period from the anniversary of the Order Term start date immediately following the Annual Reporting Period through the subsequent anniversary date (each a “ Reporting Cycle ”).

Customer understands that an order form will be required to document any annual fees due pursuant to this section in its entirety. Such order form must be executed no later than 30 days prior to each anniversary of the Order Term start date until the R enewal (as defined below), at which time the Annual Repo rting Obligation will be incorporated into the Renewal Term.

a. FSE Metric Reporting.

Reporting for Active FSE Worker Records is based on the additional FSE Workers which are defined as any Active FSE Worker records exceeding the Baseline FSE Count.

FSE Expansion Table
SKU Annual FSE Expansion Rate
All Service SKU(s) with the FSE Pricing Metric in
the Subscription Rights Table unless stated
otherwise within this table
804.88
USP 153.45
CCB 61.38

B. Growth Event Reporting Obligation.

In addition to the Annual Reporting Obligation, if Customer exceeds any Subscription Rights by 5% or more (“Growth Event”) as a result of any one -time addition of Workers (e.g., M&A), Customer must report the excess Subscription Rights to [email protected] within 30 days of the Growth Event. Customer agrees to pay the applicable annual fees from the start date of the Growth Event through the subsequent anniversary date which will be documented under a separate order form.

4. Renewal.

Customer may renew its subscription for the Service by notifying Workday prior to the end of the Order Term and Workday will generate a new Order Form for a single three-year renewal term (“Renewal Term”) at the below pricing. Such order form must be executed no later than 30 days prior to the end of this Order Term.

Renewal Table
Renewal Term Years Annual Renewal Subscription Fees
1st year of Renewal Term Base Subscription Fee x (1+ (5% Innovation Index + Renewal Term CPI)) 2nd year of Renewal Term Previous Year Subscription Fee x (1+ (5% Innovation Index + Renewal Term CPI))
3rd year of Renewal Term Previous Year Subscription Fee x (1+ (5% Innovation Index + Renewal Term CPI))

The “Base Subscription Fee ” means the Subscription Fee for the final Subscription Period listed in the Subscription Fees Table. If the final Subscription Period is a partial year, the Base Subscription Fee is the annualized value of the final Subscription Period. The Expansion Rates for the Renewal Term shall be increased by the same percentage as the Annual Renewal Subscription Fees per year in the Renewal Table. Annual Renewal Subscription Fees are valid only if Customer’s Base Subscription Fee is equal to or greater than the Base Subscription Fee defined herein. Fees for the Renewal Term are due by the first day of each corresponding year of the Renewal Term. Individual payments shall match the Annual Renewal Subscription Fee as defined in the Renewal Table above. If Customer wishes to procure any additional SKUs or Subscription Rights for a Renewal Term that are not included in the Base Subscription Fee, fees for those items will be in addition to the fees anticipated under this section.

5. Additional Definitions (as applicable).
“CPI” means the consumer price index established by the United States Department of Labor for All Urban Consumers, US City Average, All Items (change in annual average). 639
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“Renewal Term CPI ” means CPI established for the calendar year prior to the most recent February 1 preceding the Renewal Term, if a positive number.

“Innovation Index ” means the fixed annual rate of increase in Subscription Fees based on improved Service functionality and performance that is a result of Workday’s efforts and investment in product development and infrastructure.

6. Additional Scope of Use Terms.

Prism Analytics.

1. Calculation of Usage.

Customer’s subscription to PRA herein permits Customer to use PRA up to 100M of Published Data Rows for each applicable Instance (implementation and production). “Published Data Rows” are the number of data rows in total datasets designated as “published” (and therefore capable of being reported upon) in the Customer’s PRA data catalog. Published Data Rows are measured separately for each Instance. Workday shall provide Customer with detailed instructions on how to monitor Customer’s own usage in PRA and how to manage Published Data Rows. Customer may monitor its own usage in PRA and manage Pub lished Data Rows by unpublishing, filtering and republishing, or deleting data in order to keep its usage of PRA below the Published Data Rows limits set forth above, or Customer may purchase additional capacity (PRACUs, as defined below) for use in Custom er’s applicable Instance which expands the allowable Published Data Rows. Customer’s “Data Limit” for each Instance is the sum of the limit set forth above and all current applicable Capacity Unit subscriptions purchased by Customer for such Instance. Work day reserves the right to monitor the number of Published Data Rows by Instance used by Customer, and if at any time Customer exceeds its Data Limit applicable to Published Data Rows for a particular Instance, then Customer may experience reduced performance of the Instance. If Customer continues to exceed its Data Limit for more than thirty (30) days after receiving a notification from Workday of such overage, through Workday’s customer care offering or other reasonable means, then Workday will (i) require Customer to enter into a new Order Form at a prorated amount based on the fees per PRACU set forth in this Order Form, for the applicable number of additional PRACUs necessary to cover the difference between the measured usage and Customer’s current Data Limit for that Instance, or (ii) limit the addition of data to the applicable Instance and the number of data rows that may be published. A Capacity Unit will increase Customer’s current Data Limit for the applicable Instance for the entirety of the remainder of the applicable Order Term. Pricing of Capacity Units is dictated by the terms set forth herein.

2. Workday Prism Analytics Capacity Units (“PRACU”).

Each PRACU will increase the allowable Published Data Rows for a particular Instance by an additional 100M of Published Data Rows with an annual fee of $40,000 per PRACU for each Year (fees for any partial Year of the Order Term will be prorated, on a monthly basis, based on such annual fee). A PRACU term begins on the PRACU Order Form Effective Date and ends on the last day of the then-current Order Term for Prism Analytics. PRACU charges will be invoiced in accordance with the MSA. An Order Form will be required for the purchase of any PRACUs.

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WORKDAY SERVICE SKU DESCRIPTIONS ADDENDUM
Customer may only use the Service SKUs subscribed to as indicated in the body of this Order Form.

Service Product Line Description
Human Capital
Management
Human Capital
Management
Workday HCM supports an organization in organizing,
staffing, paying, and developing its global workforce.

Workday HCM includes Global Human Resources
Management (Workforce Lifecycle Management,
Organization Management, Compensation, Business
Asset Tracking, Absence, and Employee Benefits
Administration) and Global Talent Management (Goal
Management, Performance Management, Succession
Planning, and Career and Development Planning).

Workday HCM includes connectors that facilitate
integration to select Workday partners that provide
capabilities including: recruiting, learning, time and
attendance, and user account provisioning (LDAP/Active
Directory).

Cloud Connect for
Benefits
Human Capital
Management
Cloud Connect for Benefits extends Workday HCM by
providing integration to a growing catalog of benefits
providers, including: health insurance, health and flexible spending accounts, retirement savings plans, life
insurance, AD&D insurance, and COBRA administrators.

Payroll for United
States
Payroll Workday Payroll for US supports the creation and management of Payroll for U.S. employees. Configure
earnings, deductions, accumulations, and balances.

Identify tax authorities each company wishes to withhold for. Manage worker tax data, payment elections,
involuntary withholding orders, and payroll input.

Calculate, review/audit, and complete payrolls and
settlement runs. Configure and calculate payroll
commitments. Workday Payroll includes connectors that
facilitate integration to select Workday partners that
provide capabilities, including: time and attendance, tax filing, check printing, and direct deposit.

Learning Talent Management Workday Learning supports an organization in training and developing its workforce. This includes the ability to manage, organize and deliver learning content using
Media Cloud, and to leverage Workday HCM data to
create targeted learning campaigns. A variety of learning content is supported - including but not limited to video, packaged third-party content, and user-generated content.

Workday Learning also offers the ability to manage
certifications and instructor-led course enrollments, and to gather feedback and analytics relating to the learning
experience.
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Cloud Connect for
Learning
Talent Management Cloud Connect for Learning extends Workday Learning by providing integrations to third party content providers. This includes the ability to search third party learning course information, access learning courses, and, if and when
available, track and retain records. This SKU requires an active subscription to Workday Learning.

Core Financials Financial
Management
Core Financials provides traditional financial management and accounting functionality, including financial
management, accounting and reporting, financial
consolidation, supplier accounts, customer accounts,
business assets, cash management, budgets, contracts,
billing, revenue recognition, capital projects and project tracking. Core Financials includes connectors that
facilitate integration to select Workday partners that
provide capabilities, including customer relationship
management, electronic payments and customer
payments via credit card.

Grants
Management
Financial
Management
Workday Grants Management enables organizations to
administer and report on awards from the federal
government, foundations, or other funding institutions.

Workday Grants Management includes functionality to
track and manage sponsors, awards, grants, and grant
hierarchies. It also includes capabilities to calculate facilities and administration costs, and to bill and report to sponsors.

Financial Planning Adaptive Planning Financial Planning provides the ability for Customer to create financial planning models for the purpose of
supporting the financial planning process. Workers may
interact with the financial planning model for the purposes of data entry, forecasting, reporting, and analysis.

Prism Analytics Analytics and
Reporting
Workday Prism Analytics is an analytics application that provides Workday customers the ability to blend and
analyze Workday data and non-Workday data from
multiple sources. Workday Prism Analytics includes a data repository for storage and management of data, data
preparation tools for transformation and blending of data from various sources, and tools to explore and analyze
the data.

Projects Financial
Management
Projects enables organizations to create and manage
projects, initiatives, and other types of work. This includes the ability to build project plans and utilize project
breakdown structures that include phases, tasks, and
milestones as well as plan, staff, and track projects,
capital projects, initiatives, and work efforts.

Time Tracking Workforce
Management
Workday Time Tracking supports an organization in
collecting, processing, and distributing time data for its global workforce. The Workday Time Tracking module
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includes the following capabilities: basic time scheduling, time entry (hourly, time in/time out), approvals,
configurable time calculation rules, project tracking and reporting.

Expenses Financial
Management
Workday Expenses supports employee expense
processing. Workday Expenses includes self-service and
administrative functions to support employee expense
reporting and reimbursement, including expense reports, global expense rules, approvals, reimbursement, credit
card integration, spend analytics and project tracking.

Workday Expenses also includes connectors that facilitate integration to partners that provide capabilities, including corporate card transactions and support for 'punchout' to suppliers.

Procurement Spend Management Workday Procurement includes procure to pay functionality to address spend for goods and services.

Manage suppliers, supplier contracts, requisitions,
purchase and change orders, receipts, and goods and
services sourcing. Maintain purchase items, catalogs, and a supplier portal. Create receipt accruals for approved, but not yet invoiced receipts. Workday Procurement includes connectors that facilitate integration to partners that provide capabilities, including: corporate card
transactions, and support for 'punchout' to suppliers.

Inventory Spend Management Workday Inventory provides basic functionality for goods procured, stored, consumed and replenished within an
organization. Workday Inventory includes the ability to define and place inventory in storage locations, count
physical inventory and make necessary adjustments,
value items in inventory, assign and manage different
units of measure and replenish inventory using automatic re-order points. Workday Inventory is designed for
tracking of internally used goods only and does not
support use cases for external distribution (e.g., to
customers or distributors).

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WORKDAY MSA AMENDMENT

UNIVERSAL TERMS

The purpose of this amendment (“ Universal MSA Amendment ”) is to incorporate general terms and conditions from product addenda incorporated via link or attached to Customer’s Prior Subscription Order Forms into the main subscription agreement (or similarly titled subscription agreement) between the Customer and Workday (“MSA”) to serve as the universal terms to be applicable across all Workday Service SKUs. This Universal MSA Amendment supersedes and replaces certain MSA terms, including prior amendments, related to Workday’s delivery of the Service, as further set out below. This Universal MSA Amendment is entered into as of the Order Term start date of the Order Form, into which this Universal MSA Amendment is incor porated by reference, or to which it is attached, (“ Amendment Effective Date”) and will remain in effect during the Term of the Agreement. Unless otherwise defined herein, capitalized terms used in this Universal MSA Amendment will have the same meaning as set forth in the Agreement.

1. Definitions.

The following definitions in the MSA are amended as follows:

“Audit Reports” means the most recently issued security audit reports prepared by Workday’s independent third party auditor and other security relevant assessment reports for the applicable Service as identified in the Product Terms, which may be updated by Workday from time to time, with no update materially decreasing the protections provided by the controls set forth in the applicable Audit Report during the Term.

“Agreement” means this MSA, including the SLA, Security Exhibit, Data Processing Exhibit, Business Associate Exhibit (if applicable), any other exhibits, addenda, or attachments hereto, and any fully executed Order Form (including Product Terms).

“Improvements” means all improvements (including verification of such improvements), updates, enhancements (including Enhanced Features), error corrections, bug fixes, prevention of or addressing service or technical problems, release notes, upgrades and changes to the Service and Documentation, as developed by Workday and made generally available for Production use without a separate charge to Customers.

“Order Form” means the fully executed ordering document (including Product Terms) under which Customer subscribes to Service application(s) or other services. Order Forms do not include any of the preprinted terms on a Customer purchase order or other terms on a purchase order that are additional or inconsistent with the terms of this Agreement.

“Production” means the Customer’s use of, or Workday’s written verification of the availability of, the Service (a) to administer its users (as identified in the applicable subscription Order Form); (b) to generate data for Customer’s books/records; or (c) in any decision support capacity. Production does not include any sandbox, preview, or implementation Instance.

“Service'' means the applicable Workday software-as-a-service application and Improvements, as described in the Documentation and Product Terms , and subscribed to under an Order Form. For purposes of clarification, Service excludes professional services, support services, training services, and Non-Workday Content.

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“SLA” means the Production support and service level availability policy for the Service application(s) identified in the applicable Product Terms, which may be updated by Workday from time to time, with no update materially decreasing Workday’s responsibilities under the SLA during the applicable Order Term.

The following definitions are hereby added to the MSA:

“AUP” means the acceptable use policy for the applicable Service located at https://www.workday.com/en-us/legal/universal-contract-terms-and-conditions/index.html, which may also incorporate by reference acceptable use policies of applicable Workday Subprocessors.

“Customer Content” means electronic data or information submitted to the Service by Customer or Authorized Parties.

“Enhanced Features” will have the same meaning as set forth in the applicable Product Terms.

“Instance” means a unique instance of the Service, with a separate set of Customer Content held by Workday in a logically separated database (i.e., a database segregated through password- controlled access).

“Loss” means reasonable attorney’s fees and any damages or costs finally awarded or entered into in settlement of a Claim.

“Non-Workday Content” means a third-party product, web-based, offline, mobile, or other software application functionality or other content that is provided by Customer or a third party and interoperates with a Workday Service application.

“Prior Subscription Order Forms” means subscription Order Form(s) executed by Customer and Workday before the Amendment Effective Date and which are still active as of the Amendment Effective Date.

“Product Terms ” means the product terms for a specific Service application available at https://www.workday.com/en-us/legal/universal-contract-terms-and-conditions/index.html or
attached to the subscription Order Form (for reference only), which may be updated by Workday from time to time; provided that no update will materially decrease the applicable security and privacy commitments and any such changes will not become effective until 30 days after publication of the updated Product Terms.

2. Instance. The term “Tenant” (or such equivalent term) is deleted and replaced by the term “Instance”.

Any Customer Tenant or data center location terms in the Agreement are hereby deleted. Workday Data Center locations are currently available on Workday Community at Workday Data Centers (https://community-content.workday.com/content/workday-community/en- us/reference/learn/resources/data-center-locations-by-workday-product-offering.html) or a successor site made available to Workday’s customers.

3. Customer Content. The term “Customer Data” (or such equivalent term in the MSA) is deleted and replaced with the term “Customer Content”. Workday will have the right to use Customer Content only to provide the Service, subject to this Agreement.

4. Customer Obligations. The section in the MSA titled “Customer Obligations” or other similarly titled section is deleted and replaced with the following section:
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“Customer Obligations. Customer will have sole responsibility for (a) obtaining and verifying it has all authorizations, consents, and rights necessary to use the Service; (b) any Non-Workday Content it installs, uses, or enables; (c) obtaining and verifying it has all authorizations, consents, and rights necessary to use the Service; (d) ensuring compliance with this Agreement and the AUP by its Affiliates and Authorized Parties, and any breach by its Affiliates or Authorized Parties will be deemed a breac h by Customer. Customer will take reasonable efforts to prevent unauthorized access to, or use of, the Service, and will notify Workday promptly of any unauthorized access or use. Customer will be responsible for any third-party claim against Workday arising from violations by Customer, its Affiliates or Authorized Parties of the AUP,. Customer will not: (1) use the Service in violation of Laws or the Documentation; (2) in connection with the Service, send or store infringing, obscene, threatening, or other wise unlawful or tortious material, including material that violates privacy rights; (3) knowingly send or store Malicious Code in connection with the Service; (4) knowingly interfere with or disrupt performance of the Service or the data contained therein; or (5) attempt to gain access to the Service or its related systems or networks in a manner not set forth in the Documentation. During the applicable subscription Term, Workday reserves the right to suspend Customer’s access to an applicable Service in the event Workday reasonably determines such action is necessary to preserve the integrity and/or security of such Service or Workday in good faith reasonably determines that Customer has violated the AUP; however, Workday will use commercially reasonable efforts under the circumstances to provide Customer with notice and an opportunity to remedy such violation or threat prior to such suspension. Workday will use commercially reasonable efforts to minimize the length and scope of suspension in light of the circumstances. Customer agrees that it is not relying on delivery of future service features or product roadmaps in obtaining subscriptions to any Service.”

5. Universal Security Exhibit & Universal Data Processing Exhibit. a. Universal Security Exhibit . If the MSA is not already subject to the Universal Security Exhibit (“Security Exhibit ”), then the Security Exhibit currently located at https://www.workday.com/en-
us/legal/universal-contract-terms-and-conditions/index.html will supersede and replace all prior versions of security exhibits. All references in the Agreement (including in any Order Form) to “Workday Security Exhibit”, “Security Exhibit”, “Workday Universal Security Exhibit”, or “Universal Security Exhibit” will be deemed to be references to the Security Exhibit. The Security Exhibit may be updated by Workday from time to time. No update will materially decrease the protections provided by the controls set forth in the Security Exhibit during the Term.

b. Universal Data Processing Exhibit.
(i) If the MSA is already subject to the Universal Data Processing Exhibit (“ Data Processing Exhibit” or “DPE”) then that DPE will continue to apply, except that the term “Covered Service” (as defined in the DPE) will mean (i) any Service provided under the MSA as amended by this Universal MSA Amendment, and/or (ii) any Professional Services.
(ii) If the MSA is not already subject to the DPE, then the DPE currently located at https://www.workday.com/en-us/legal/universal-contract-terms-and-conditions/index.htm (the “ DPE”) will supersede and replace all existing terms in the MSA or separate addenda, exhibit or amendment governing Workday’s processing of personal data as a data processor on behalf of Customer, including but not limited to any references in the Customer's A greement to a Data Processing Exhibit or Data Processing Agreement. All references in the Agreement (including in an Order Form) to a Data Processing Exhibit, Data Processing Agreement, or similar terms, will be deemed to be references to the Data Processi ng Exhibit. The DPE may be updated by Workday from time to time to comply with applicable Data Protection Laws applicable to Workday as a Data Processor. No update will materially decrease Workday’s Data Processor obligations under the DPE.

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Universal MSA Amendment - City of Ontario

6. Protection and Security of Customer Content. The section in the MSA titled “Protection and Security” or other similarly titled section is deleted and replaced with the following section:

“Security Program and Audit Reports . Workday maintains a security program that conforms to the Security Exhibit and Audit Reports (as set forth in the applicable Product Terms). Through Workday’s customer self-service systems or upon Customer’s written request, Workday will make available to Customer Workday’s then-current Audit Reports for the applicable Service application to enable Customer to verify Workday’s compliance with its obligations under this Agreement. Audit Reports constitute Workday’s Confidential Information and are subject to the confidentiality terms in this Agreement or separate confidentiality agreement terms (as applicable).

Privacy. Personal Data will only be processed in accordance with the DPE.”

7. Retrieval of Customer Content. The section in the MSA titled “Retrieval of Customer Content” or other similarly titled section is deleted and replaced with the following section:

“Retrieval of Customer Content. Upon Customer’s written request made on or prior to expiration or termination of this Agreement (including any Transition Period), Workday will give Customer limited access to the Service for a period of up to 60 days, at no additional cost, solely for purposes of retrieving Customer Content (“Retrieval Period”). After such Retrieval Period (or if no Retrieval Period, after termination or expiration of this Agreement or applicable Order Form) and subject to Workday’s legal obligations, Workday has no obligation to maintain or provide any Customer Content and will, unless legally prohibited, delete Customer Content by deleting Customer’s applicable Instance; provided, however, that Workday will not be required to remove copies of the Customer Content from its backup media and servers until such time as the backup copies are scheduled to be deleted, provided further that in all cases Workday will continue to protect the Customer Content in accordance with this Agreement. Customer Content will be made available for extract in a machine-readable format as described in the Documentation.”

8. Product Terms. Upon the Amendment Effective Date, any product-specific terms attached to or linked from Customer’s Prior Subscription Order Forms (e.g. the Innovation Services Addendum and the Media Cloud Addendum), or other separate product-specific terms, will be terminated and will have no further force or effect, and all Prior Subscription Order Forms, or other separate product -specific terms, are hereby amended to be subject to the Product Terms for the applicable Product Line (as identified in an Order Form) available at
https://www.workday.com/en-us/legal/universal-contract-terms-and- conditions/index.html, which are incorporated herein by reference. Workday is not required to escrow third-party source code used in providing the Service.

9. [RESERVED].

10. [RESERVED].

11. Service Credit Exhibit. Customer must request the Service Credit no later than 60 days after the applicable failure occurs. To the extent that the MSA contains a termination right for missed Service Availability or Service Response minimums, such termination right will only apply for the applicable Service application (and Customer must serve notice of such termination no later than 30 days after the applicable failure occurs).

12. Confidentiality. The following language is hereby added to the section in the MSA titled “Confidentiality” or other similarly titled section.
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“For purposes of clarification, the parties’ confidentiality obligations also apply to Confidential Information either party (or its Affiliates) shares with the other party (or its Affiliates) related to potential future subscription services. The parties agree that (a) the Recipient’s or its Representatives’ online portal terms conflicting with the Confidentiality terms of this MSA will not be binding on the Discloser submitting its Confidential Information to the Recipient through the Recipient (or its Representative’s) online portal; and (b) the Confidentiality terms of this MSA apply to all such Confidential Information disclosed to the Recipient through such online portals; and (c) the Recipient’s or its Representatives’ online portal terms conflicting with the Confidentiality terms of this MSA are superseded by this Agreement with respect to confidentiality obligations. “Representatives” means a party’s Affiliates, officers, directors, agents, employees, contractors, consultants, financial and legal adv isors, and service providers, including providers of third party submission tools or online portals.”

13. Additional Amendments:

(a) Section 3.6 of the MSA shall be deleted in its entirety.

14. Miscellaneous. In the event of any conflict, the following order of precedence will control: (i) the applicable Product Terms, which will apply exclusively to the delivery of the Service SKUs and related features (including Enhanced Features) of an applicable Product Line; (ii) this Universal MSA Amendment; (iii) the Order Form, and (iv) the MSA.
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Department: Economic Development
Prepared By: Karen Khukoyan
Department:

Prepared By: Karen Khukoyan
Staff Member Presenting: Jennifer McLain
Hiramoto, Economic Development Director
Reviewed By: Charity Hernandez
Approved By:

Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 24
SUBJECT:

A RESOLUTION APPROVING PURSUANT TO CEQA FINDINGS AS TO THE CERTIFIED

FINAL ENVIRONMENTAL IMPACT REPORT FOR THE DOWNTOWN CIVIC CENTER PLANNED UNIT DEVELOPMENT (SCH NO. 2004051155) AS PREVIOUSLY

AMENDED, A DISPOSITION AND DEVELOPMENT AGREEMENT AND LOAN

AGREEMENT BETWEEN THE CITY OF ONTARIO AND A BLOCK, LLC FOR THE

ADAPTIVE REUSE OF HISTORIC PROPERTY AND NEW DEVELOPMENT LOCATED AT THE 100 BLOCK OF NORTH EUCLID AVENUE; ACCEPTING THE ECONOMIC OPPORTUNITY STATUTE (GOVT CODE SECTION 52220 ET. SEQ) REPORT AND

MAKING RELATED FINDINGS AUTHORIZING THE SALE OF THE PROPERTIES

CITY OF ONTARIO
Agenda Report
June
3, 2025
SECTION:

PUBLIC HEARINGS

RECOMMENDATION:

A
.

That the City Council adopt a Resolution approving the Disposition and Development Agreement ("DDA") between the City of Ontario ("City") and A Block, LLC ("Developer"); approving a Construction Loan Agreement (“Loan Agreement”) between the City of Ontario ("Lender") and A Block, LLC ("Borrower"); approving, as amended, the certified Downtown Civic Center Planned Unit Development Environmental Impact Report (SCH No. 2004051155) findings; and
B
.

Authorize the City Manager, or his designee, to sign all documents necessary to implement the Disposition and Development Agreement and Loan Agreement.

THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:

Invest in the Growth and Evolution of the City's Economy Operate in a Businesslike Manner
Focus Resources in Ontario's Commercial and Residential Neighborhoods FISCAL IMPACT:

The proposed purchase price is One Dollar ($1.00) subject to the terms and conditions contained in the Disposition and Development Agreement. The City will issue a Construction Loan to the Developer in an amount not-to-exceed $19,000,000 with an annual interest rate equal to the prime rate, with a ceiling of 8% and a floor of 5%. The Loan will be funded 649
from the available City funds, excluding General Fund, and will be repaid within five years from the initial draw.

BACKGROUND & ANALYSIS:

The City continues to invest significant resources in revitalizing the historic downtown into a vibrant, 18-hour destination. It is doing this in several ways, including but not limited to:

Acquiring underutilized or dilapidated buildings, with an emphasis on restoring historic properties;
Partnering with experienced developers capable of infusing new apartments, offices and/or retail space into downtown;
Investing in strategic infrastructure projects, such as improving sewer, water, lighting, wayfinding and parking; and
Offering incentives and loan programs to qualifying business and property owners for restaurant equipment and facade improvements.

Prior to the Great Recession, a portion of property on the northeast corner of Euclid Avenue and Holt Boulevard (also known as the 100 Block of North Euclid Avenue and Block A1 in reference to the EIR) was acquired as part of a redevelopment initiative in downtown. The vision was to incorporate historic buildings, referred to as the Yangtze/Commercial Hotel, Lerch Building, Citizen Business Bank, and The Old Bridal Shop, into a mixed-use development that would include high- density residential, retail spaces, commercial services, and a public commons area. This adaptive reuse was intended to enable the occupancy of businesses such as restaurants or other retail establishments that would serve local workers, shoppers, and residents, thereby contributing to the City's broader goal of revitalizing and enhancing the downtown area both economically and aesthetically. In 2016, the City bought the remaining parcels to perfect the acquisition of the block.

The Property encompasses Assessor Parcel No.'s 1048-553-01 through 1048-553-17 (“Property"), as depicted in Exhibit "A" attached hereto.

The City and Developer have negotiated a Disposition and Development Agreement that provides for the conveyance of the Property to the Developer for One Dollar ($1.00). In exchange, the Developer will deliver an adaptive reuse Project consisting of the rehabilitation of existing historic structures and construction of additional multi-story, mixed-use residential and commercial/retail components on the Property. The proposed Project will consist of approximately 156 multi-family residential dwelling units and nearly 35,000 square feet of ground floor commercial/retail/restaurant space fronting on Euclid Avenue, B Street, Lemon Avenue, and Holt Boulevard in addition to the required parking (“Project").

The Developer will be required to preserve and retain the historic context of the historic buildings by obtaining a Certificate of Appropriateness under the Adaptive Reuse Ordinance adopted on December 17, 2024, which is intended to streamline the entitlement process. This will allow the Developer to swiftly complete an Adaptive Reuse Plan and other entitlements required for the proposed uses.

The Project will be phased over a five-year period with the adaptive reuse of the historic structures being completed in Phases 1 and 2. Phases 1 and 2 will include 22 residential units and approximately 25,000 square feet of retail and commercial uses. Phases 3 and 4 include new 650
construction of up to 134 multi-family market rate units and just roughly 10,000 square feet of commercial and retail space.

The Loan Agreement is intended to finance the construction of Phase 1 which includes rehabilitation of two of the City's Local Historic Landmarks Designated by City Council on January 20, 1998, Landmark no. 18 (Lerch Building), No. 19 (Yangtze/Commercial Hotel), and The Old Bridal Shop (which is not a local landmark but eligible for local landmark designation). The Developer will be required to provide proof of financing for Phases 2 through 4 which is estimated to be an investment of over $70,000,000.

The Property was appraised by R.P. Laurain and Associates in May of 2025 with the appraiser arriving at a negative Opinion of Value. The negative value was derived from recent comparable land and building values coupled with the Developer's overall Project costs supported by a Historic Structures Report ("HSR") prepared by a state certified architect. The HSR included an analysis of the historic nature of the buildings as well as the structural integrity of the buildings and an engineer's cost estimate to retrofit the buildings to allow for the Developer's proposed use. The proposed rehabilitation/historic preservation and new improvement costs exceed the current market value of the Property, by approximately $10,760,000. The renovation costs include, but are not limited to: seismic retrofitting, hazardous material abatement, a new elevator, new plumbing, mechanical, and electrical systems, fire sprinklers, facade improvements, interior finishes, and restaurant furnishing, fixtures, and equipment.

The proposed Project will effectuate restoration of the historic fabric of the 100 Block of North Euclid Avenue, add much-needed quality dining and entertainment options, new high quality multi- family residential, and would serve as an impetus for additional redevelopment opportunities in downtown. It would also result in the creation of economic opportunity by an increase in new revenues to the City in the form of both sales tax and property tax, as well as creation of temporary construction jobs and permanent full-time jobs.

ENVIRONMENTAL REVIEW:

On November 16, 2004, the City Council Certified an Environmental Impact Report (SCH No. 2004051155) for the Downtown Civic Center Planned Unit Development ("DCCPUD EIR” or “EIR”). Additionally, the City Council approved file PUD08-001, an amendment to the DCCPUD for which an Addendum to the Certified EIR was adopted in June 2011, allowing an increase in the density range within the Commercial/Residential Mixed-Use District of the DCCPUD, which the Project site is within. Further, the City Council approved file PUD20-002, an amendment to the DCCPUD for which an Addendum to the Certified EIR was adopted on April 6, 2021, allowing ground floor residential land uses and options for parking structures. As amended, the DCCPUD established a density range of 45-65 units per acre, resulting in a maximum residential buildout of 163 units, and established a maximum Floor Area Ratio of 0.40, resulting in a maximum non- residential buildout of roughly 43,000 square feet across the roughly 3-acre site.

Pursuant to CEQA, when taking subsequent discretionary actions in furtherance of a project for which an EIR has been certified, the lead agency is required to review any changed circumstances to determine whether any of the circumstances under Public Resources Code section 21166 and State CEQA Guidelines Section 15162 require additional environmental review. Here, staff has evaluated the Project in light of the standards for subsequent environmental review outlined in Public 651
Resources Code section 21166, State CEQA Guidelines section 15162.

The Project will provide approximately 156 units and approximately 35,000 square feet of non- residential uses (commercial and retail/restaurant), which is consistent with, and within the scope of, the anticipated buildout of the 100 Block of North Euclid (also known as Block A1), evaluated in the certified EIR and permitted under the DCCPUD. Further Project, which includes the adaptive reuse of existing historic structures and the construction of new residential and commercial development, as described above, has been considered by the DCCPUD and subsequent amendments, and is within the density and intensity anticipated by the DCCPUD. As such, staff has concluded that the EIR, as amended, fully analyzed and mitigated, where feasible, all potentially significant environmental impacts, if any, that would result from the Project, and therefore, no subsequent EIR or mitigated negative declaration is required. The Project introduces no new significant environmental impacts and all previously adopted mitigation measures from the DCCPUD EIR can be made a condition of Project approval.

Furthermore, the HSR identified significant features, structural retrofit requirements, and other recommendations for the restoration and reuse of the historic structures to help support and facilitate the Project as anticipated by the DCCPUD.
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Exhibit “A”
100 Block N Euclid Avenue
653

RESOLUTION NO. ________

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,

CALIFORNIA, APPROVIN G, PURSUANT TO CEQA FINDINGS AS TO

THE CERTIFIED FINAL ENVIRONMENTAL IMPACT REPORT FOR THE

DOWNTOWN CIVIC CENTE R PLANNED UNIT DEVEL OPMENT (SCH
NO. 2004051155) AS PREVIOUSLY AMEND ED, THE DISPOSITION

AND DEVELOPMENT AGRE EMENT AND LOAN AGREE MENT

BETWEEN THE CITY OF ONTARIO AND A BLOCK, LLC FOR THE

ADAPTIVE REUSE OF HI STORIC PROPERTY AND NEW
DEVELOPMENT LOCATED AT THE 100 BLOCK OF NORTH EUCLID
AVENUE; ACCEPTING THE ECONOM IC OPPORTUNITY STATU TE
(GOVT CODE SECTION 5 2220 ET. SEQ) REPORT AND MAKING
RELATED FINDINGS AUTHORIZING THE SALE OF THE PROPERTIES.

WHEREAS, the City owns that certain real property located at the 100 block of North Euclid which includes what is commonly known as the Lerch Building, Yangtze Building, the Old Bridal Shop and surrounding parcels more specifically described as:
120 North Euclid Avenue (APN 1048-553-15 ), 122 and 126 North Euclid Avenue, (APN 1048-553-16 and APN 1048 -553-17), 116 E. B Street, ( APN 1048 -553-02), 0 North Euclid Avenue (APN 1048 -553-01), 0 E. B Street (APN 1048 -553-03); 127 N. Lemon Avenue (APN 1048 -553-04), 115 N. Lemon Avenue (APN 1048 -553-05), 127 E. Holt Boulevard (APN 1048-553-06), 123 E. Holt Boulevard (APN 1048-553-07), 117 E. Holt Boulevard (APN 1048-553-08), 115 E. Holt Boulevard (APN 1048-553-09), 0 N. Euclid Avenue, (APN 1048-553-10), 110 N. Euclid Avenue (APN 1048-553-11), 110 N. Euclid Avenue, Ontario (APN 1048 -553-12), 114 N. Euclid Avenue (APN 1048 -553-13) also known as Parcel 13 , 118 N. Euclid Avenue (APN 1048-553-14) (“Properties”); and

WHEREAS, A Block LLC (“ Developer”) proposes to purchase the Properties for the development of a 4 Phase project including adaptive reuse of the Lerch building, the Yangtze building, and the Old Bridal Shop building and Parcel 13 . The adaptive reuse portion of the project will rehabilitate, structurally retrofit for adaptive re -use, and construct a multi-story, mixed -use residential and retail commercial development project. The Yangtze Property, a three-story building, will include a 10,000-sf. ground level restaurant and a total of 2 2 residential units on the second and third floors. The Lerch Property, a two-story building, will be developed with retail on the first floor and a spa and gym on the second floor. Further, included as part of the development associated with the purchase of the Properties and covered by this Agreement is the development of the Old Bridal Shop Property with 2,000 sf. of restaurant space and 2,700 sf. of industrial space for a proposed brewery, all as specifically described as Block A1 in the Downtown Civic Center Planned Unit Development; and

WHEREAS, the Developer pro poses to purchase Parcel 13 for adaptive re -use that will consist of 7,000 square feet of retail on the ground floor and 6,000 square feet of community room, and a roof patio on the second floor, including all required or associated on -site and off -site improvements, all hardscape and all landscaping, all a s 654

specifically described as Block A1 in the Downtown Civic Center Planned Unit Development; and

WHEREAS, the Developer proposes to purchase the remaining properties to construct multifamily housing, ground level parking, and a variety of restaurant and commercial uses; and

WHEREAS the City obtained appraisal s for the Properties showing that overall the Properties have a negative value based upon the onsite remediation and rehabilitation required to develop the buildings while complying with the adaptive reuse requirements; and

WHEREAS, the City’s Planning Commission has found pursuant to Government Code Section 65402, that the Project , which consists of approximately 156 multi -family residential dwelling units and nearly 35,000 square feet of ground floor commercial/retail/restaurant space fronting on Euclid Avenue, B Street, Lemon Avenue, and Holt Boulevard in addition to the required parking (“Project") is consistent with the City’s General Plan, and has taken the necessary actions to comply with CE QA; and

WHEREAS, the City has prepared a report pursuant to Government Code Section 52200 et. seq. (“Report”) which includes a copy of the proposed Disposition and Development Agreement (“DDA”), a summary of the proposed transaction including the cost of the agreement to the City with land acquisition costs, clearance costs, relocation costs, the costs of any impr ovements to be provided by the C ity and the expected interest on any loans or bonds to finance the agreements; the estimated value of the interest to be conveyed determined at the highest and best uses permitted under the general plan or zoning ; the estimated value of the interest to be conveyed , determined at the use and with the conditions, covenants, and develop ment costs required by the sale; and the purchase price; and

WHEREAS, the Report includes a n explanation of why the sale will assist in the creation of economic opportunity, with reference to the supporting facts and materials relied upon; and

WHEREAS, the adaptive reuse of these buildings and the redevelopment of the Properties will protect and promote the sound development of economic opportunity in Ontario and the general welfare of the Ontario’s residents through the employment of all appropriate mea ns; and

WHEREAS, the creation of economic opportunity in Ontario cannot be accomplished by private enterprise alone, without public participation and assistance in the acquisition of land, in planning and in the financing of land assembly, in the work of clearance, and in the making of improvements necessary therefor, it is in the public interest to advance or expend public funds for these purposes, and to provide a means by which economic opportunity can be created ; and

WHEREAS the creation of economic opportunity and the provisions for appropriate continuing land use and construction policies with respect to property 655

acquired, in whole or in part, for economic opportunity constitute public uses and purposes for which public money may be advanced or expe nded and are governmental functions of state concern in the interest of health, safety, and welfare of the people of the state and the City of Ontario; and

WHEREAS, pursuant to Government Code Section 52200.6, the authority granted to create economic opp ortunity and to sell property for economic development is an alternative to any other procedure or process found in the Constitution, state law, local ordinance, or charter ; and

WHEREAS, pursuant to the California Environmental Qua lity Act (Public Resource Code § 21000 et seq.) ("CEQA"), and the State CEQA Guidelines (14 Cal.

Code Regs. §§ 15000 et seq.) the City previously determined that an Environmental Impact Report ("EIR") be prepared pursuant to CEQA in order to analyze all po tential adverse environmental impacts of the Downtown Civic Center Planned Unit Development (“DCCPUD”) (SCH NO. 2004051155) which was certified by the City Council on November 16, 2004; and

WHEREAS, the City Council approved file PUD08 -001, an amendment to the DCCPUD for which an Addendum to the Certified EIR was adopted in June 2011, allowing an increase in the density range within the Commercial/Residential Mixed -Use District of the DCCPUD, which the Project site , Block A1, is within; and

WHEREAS, the City Council approved file PUD20 -002, an amendment to the DCCPUD for which an Addendum to the Certified EIR was adopted on April 6, 2021, allowing ground floor residential land uses and options for parking structures ; and

WHEREAS, pursuant to CEQA, w hen taking subsequent discretionary actions in furtherance of a project for which an EIR has been certified, the lead agency is required to review any changed circumstances to determine whether any of the circumstances under Public Resources Code section 2 1166 and State CEQA Guidelines Section 15162 require additional environmental review; and

WHEREAS, staff evaluated the project in light of the standards for subsequent environmental review outlined in Public Resources Code section 21166, State CEQA Guidelines section 15162; and WHEREAS, the DCCPUD established a density range of 45-65 units per acre, resulting in a maximum residential buildout of 163 units, and established a maximum Floor Area Ratio of 0.40, resulting in a maximum non-residential buildout of roughly 43,000 square feet across Block A1; and

WHEREAS, t he proposed Project will provide approximately 1 56 units and approximately 35,000 square feet of non -residential uses (commercial and retail/restaurant), which is consistent with , within the sc ope of, the anticipated buildout of the 100 Block of north Euclid evaluated in the certified EIR and permitted under the DCCPUD; and

656

WHEREAS, as anticipated by the DCCPUD, the HSR identified significant features, structural retrofit requirements, and other recommendations for the restoration and reuse of the historic structures to help support and facilitate the Project; and

WHEREAS, the proposed Project, which includes the adaptive reuse of existing historic structures and the construction of new residential and commercial development, as described above, was evaluated in the certified DCCPUD EIR and adopted addenda, and is within the density and intensity anticipated by th e DCCPUD as amended.

WHEREAS, based on staff’s evaluation, staff concluded that the EIR, as amended, fully analyzed and mitigated, where feasible, all potentially significant environmental impacts, if any, that would result from the Project, and therefo re, no subsequent EIR or mitigated negative declaration is required, as the Project introduces no new significant environmental impacts and all previously adopted mitigation measures from the DCCPUD Environmental Impact Report are considered a condition of the Project approval and are incorporated herein by this reference ; and

WHEREAS, t he City desires to sell the Properties to the Developer for the rehabilitation of the Properties and completion of the Project and the Developer desires to purchase the Properties from the City for the same purpose.

WHEREAS, the City and Developer have negotiated a Disposition and Development Agreement (the "Agreement"), a copy of which is attached to this Resolution as Exhibit A and which provides for the sale of the Pr operty to Developer at consideration which is not less than the fair reuse value at the use and with the covenants and conditions and development costs authorized by the sale , and binds Developer to construct the Project, subject to all required approvals and environmental compliance, in a timely manner, and in accordance with the terms therein; and

WHEREAS, the Developer's proposed acquisition of the Property and subsequent construction and completion of the Project on the Property pursuant to the terms of this Agreement is in the best interest of the City and the health, safety and welfare of the City's taxpayers and residents and is in accordance with the public purposes set forth in applicable law. Implementation of this Agreement will further the goals and objectives of the City's general plan by: (i) strengthening the City's land use and social structure, (ii) alleviating economic and physical blight on the Property and in the surrounding community, (iii) generate property tax revenue, (iv) produce ne w jobs, (v) stimulate economic vitality and (vi) continue to inspire additional investment within the Downtown Civic Center corridor creating much needed redevelopment.

NOW, THEREFORE, THE CITY COUNCIL FOR THE CITY OF ONTARIO DOES HEREBY RESOLVE AND DECL ARE AS FOLLOWS:

SECTION 1. Recitals. The Recitals set forth above are true and correct and are incorporated into this Resolution by this reference.

SECTION 2. CEQA. As the decision -making body for the Agreement, City Council has reviewed and considered t he previously certified FEIR, the two addenda, 657

any oral or written comments received, and the administrative record prior to making any decision on the Agreement. The Council finds that the FEIR contains a complete and accurate reporting of all of the environmental impacts associated with the Agreement.

SECTION 3. Findings on the Necessity for a Subsequent or Supplemental Environmental Impact Report. Based on the substantial evidence set forth in the record, including but not limited to, the previ ously certified FEIR, the two addenda, and all related information presented to the City Council, the Council finds, pursuant to State CEQA Guidelines Section 15164 that the preparation of a subsequent or supplemental EIR is not required for the Agreement.

SECTION 4. Findings on Environmental Impacts. Having considered the administrative record, the previously certified FEIR and all written and oral evidence presented to the City Council, the Council finds that all environmental impacts of the Agreement ha ve been addressed within the FEIR and the two addenda , and the Agreement will be subject to the adopted Mitigation Measure and Reporting Requirement. The City Council finds that no new or additional mitigation measures or alternatives are required. The Council further finds that there is no substantial evidence in the administrative record that the Agreement may result in any significant environmental impacts beyond those analyzed in the FEIR.

SECTION 5. Economic Opportunity Report and Findings. The City Council approves and adopts the Economic Opportunity Report , attached hereto as Exhibit B, prepared pursuant to Government Code Section 52200 et. seq. As part of that adoption the City Council finds that

5.1 The sale and development of the Property pursuant to the Agreement will further the goals and purposes of the City, and is in the common interest of the City and its residents.

5.2 The City Council has reviewed the fiscal analysis prepared by the City’s tax consultant, HdL Enterprises, and finds that the sale of the property will assist in the creation of economic opportunity through the generation of tax revenue, the creation of jobs, the elimination of dilapidated buildings in the core of the downtown area , and will act as a catalyst to future redevelopment in the surrounding area which will, ideally, reactivate the downtown which has suffered since the last recession and the Covid -19 pandemic. The fiscal analysis demonstrates that the DDA and associated Lo an Agreement will increase property tax revenues to all property tax collecting entities by at least 15% of the total property tax resulting from the project at full implementation when compared to the year prior to the property being acquired by the City.

5.3 The consideration is not less than the f air reuse value at the use and with the covenants and conditions and development costs authorized by the sale .

The property is being conveyed to the Developer as a negative value due to the substantial improvement costs to restore the building to current b uilding codes.

With improvement costs estimated at $19,000,000 for the adaptive re -use of 658

three existing structures and approximately $70,000,000 for the balance of the Project, the estimated reuse value of the interests to be conveyed are significantly hi gher than present fair market value.

5.4 The City loan of $19,000,000 is for the purpose of rehabilitating commercial buildings or structures and based upon the high cost to restore the buildings to current building code standards the assistance is necessary for the economic feasibility of the development and the assistance cannot be obtained on economically feasibl e terms in the private market. The City has looked to redevelop these buildings for many years and based upon the risk associated with the rehabilitation of these historic structures and the requirements imposed by the City’s zoning code and the City’s desires for the area, the City has been unable to find a developer or private lending ins titution will ing to underwrite the project.

5.5 Based upon the information provided in the staff report and at the public hearing the Council does hereby find that the sale of the Properties serves the public purpose of economic development by creating jobs, increasing tax revenues, improving infrastru cture in the downtown, reducing blight, and creating a catalyst for other development in the Downtown area.

SECTION 6. Approval of Agreement. The City Council hereby approves the Agreement in substantially the form attached hereto as Exhibit A subject to any non - substantive revisions which do not increase the City's liability and are approved by the City Attorney, and authorizes the City Manager to sign and enter into the Agreement and perform the obligations of the City under the Agreement.

SECTION 7. Notice of Determination. The Executive Director, or designee, is hereby directed to file a Notice of Determination for the Agreement under CEQA.

SECTION 8. Severability. If any provision of this Resolution or the application of any such provision to any person or circumstance is held invalid, such invalidity shall not affect other provisions or applications of this Resolution that can be given effect without the invalid p rovision or application, and to this end the provisions of this Resolution are severable. The City declares that the City would have adopted this Resolution irrespective of the invalidity of any particular portion of this Resolution.

SECTION 9. Effective Date. This Resolution shall become effective immediately upon its adoption.

The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.

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PASSED, APPROVED, AND ADOPTED this 3rd day of June, 2025.

_____________________________________
PAUL S. LEON, MAYOR

ATTEST:

____________________________________

SHEILA MAUTZ, CITY CLERK

APPROVED AS TO FORM:

____________________________________

BEST BEST & KRIEGER LLP

CITY ATTORNEY

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STATE OF CALIFORNIA )

COUNTY OF SAN BERNARDINO )

CITY OF ONTARIO )

I, SHEILA MAUTZ, City Clerk of the City of Ontario, DO HEREBY CERTIFY that foregoing Resolution No. 2025- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held June 3, 2025 by the following roll call vote, to wit:

AYES: COUNCIL MEMBERS:

NOES: COUNCIL MEMBERS:

ABSENT: COUNCIL MEMBERS:

____________________________________

SHEILA MAUTZ, CITY CLERK

(SEAL)

The foregoing is the original of Resolution No. 2025 - duly passed and adopted by the Ontario City Council at their regular meeting held June 3, 2025.

_____________________________________

SHEILA MAUTZ, CITY CLERK

(SEAL)
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EXHIBIT A

DISPOSITION AND DEVELOPMENT AGREEMENT

662

EXHIBIT B

ECONOMIC OPPORTUNITY REPORT
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REQUEST OF

CLERK, CITY COUNCIL CITY OF ONTARIO

WHEN RECORDED RETURN TO:

City of Ontario
303 East “B” Street
Ontario, CA 91764-4196
Attention: City Clerk/ Records Management

Exempt from Filing Fees Gov. Code Sections 27383, 6103

DISPOSITION AND DEVELOPMENT AGREEMENT
by and between the

CITY OF ONTARIO,
a California Municipal Corporation,
and

A BLOCK, LLC
a California limited liability company
[Dated as of June 6, 2025, for reference purposes only] 664
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CITY OF ONTARIO

DISPOSITION AND DEVELOPMENT AGREEMENT
(CITY OF ONTARIO AND A BLOCK, LLC)

THIS DISPOSITION AND DEVELOPMENT AGREEMENT (this “ Agreement”) is dated as of June 3, 2025 for reference purposes only, and is entered into by and between the City of Ontario, a California municipal corporation (the “City”), and A Block LLC a California Limited Liability Company (the “ Developer”) (collectively, the “Parties,” and each a “ Party”). The Parties enter into this Agreement with reference to the following recited facts (collectively, the “Recitals,” and each a “Recital”).

RECITALS
A. The City owns that certain real property commonly called the Lerch Buildi ng generally located at 120 North Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “A” and depicted as APN 1048-553-15 (the “Lerch Property”).

B. The City owns th at certain real property commonly called the Yangtze Building generally located at 122 and 126 North Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “B” and depicted as APN 1048-553-16 and APN 1048-553-17 (the “Yangtze Property”).

C. The City owns that certain real property commonly called the Old Bridal Shop generally located at 116 E. B Street, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “C” and depicted as APN 1048- 553-02 (the “Old Bridal Shop Property”)
D. The City owns that certain real property generally located at 0 North Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “D” and depicted as APN 1048-553-01 (“Parcel 1”).

E. The City owns that certain real property generally located at 0 E. B Street, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “E” and depicted as APN 1048-553-03 (“Parcel 3”).

F. The City owns that certain real property generally located at 127 N. Lemon Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “F” and depicted as APN 1048-553-04 (“Parcel 4”).

G. City owns that certain real property generally located at 115 N. Lemon Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “G” and depicted as APN 1048-553-05 (“Parcel 5”) 665
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H. City owns that certain real property generally located at 127 E. Holt Boulevard , Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “H” and depicted as APN 1048-553-06 (“Parcel 6”) I. City owns that certain real property generally located at 123 E. Holt Boulev ard, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “I” and depicted as APN 1048-553-07 (“Parcel 7”) J. City owns that certain real property generally located at 117 E. Holt B oulevard, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “J” and depicted as APN 1048-553-08 (“Parcel 8”) K. City owns that certain real property generally located at 115 E. H olt Boulevard, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “K” and depicted as APN 1048-553-09 (“Parcel 9”) L. City owns that certain real property generally located at 0 N . Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “L” and depicted as APN 1048-553-10 (“Parcel 10”) M. City owns that certain real property generally located at 110 N. Euclid Avenue , Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “M” and depicted as APN 1048-553-11 (“Parcel 11”) N. City owns that certain real property generally located at 110 N. Euclid Avenue , Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “N” and depicted as APN 1048-553-12 (“Parcel 12”) O. City owns that certain real property generally located at 114 N. Euclid Avenue , Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “O” and depicted as APN 1048-553-13 (“Parcel 13”) P. City owns that certain real property generally located at 118 N. Euclid Avenue , Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “P” and depicted as APN 1048-553-14 (“Parcel 14”) Q. The Developer proposes to purchase the Lerch Property, the Yangtze Property and the Old Bridal Shop Property (together shall be referred to as “Phase 1 Properties”) from the City as part of “Phase 1” of a larger four phase Downtown Civic Center Planned Unit Development, for the specific purposes to rehabilitate, structurally retrofit for adaptive re -use, and construct of an additional multi-story, mixed-use residential and retail commercial development project. The Yangtze Property, a three-story building, will include a 10 ,000 sf. ground level restaurant and a total of 24 residential units on the second and third floors. The Lerch Property, a two-story building, will be developed with retail on the first floor and a spa and gym on the second flo or.

Further, included as part of the development associated with the purchase of the Properties and covered by this Agreement are the development of t he Old Bridal Shop Property for 2,000 sf. of restaurant space and 2,700 sf. of industrial space for a prop osed brewery , all as specifically described as Block A1 in the Downtown Civic Center Planned Unit Development. (Resolution 666
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No. 2004-139, Final Environmental Impact Report for Ontario Downtown Civic Center Project, and related documents, all to be develo ped in accordance with the Plans and Specifications to be approved by the City, and any conditions imposed by the City in its approval of the Plans and Specifications and the Historic Properties in accordance with the Secretary of the Interior Standards (collectively the “Phase 1 Project” or “Phase 1”).

R The Developer proposes to purchase Parcel 13 from the City as Phase 2 (“Phase 2 Property”) of the Downtown Civic Center Planned Unit Development. Phase 2 shall follow the Downtown Civic Center Planned Unit Development to rehabilitate, structurally retrofit for adaptive re-use and will consist of 7,000 square feet of retail on the ground floor and 6,000 square feet of community room, and a roof patio on the second floor, including all required or associated on-site and off-site improvements, all hardscape and all landscaping, all as specifically described as Block A1 in the Downtown Civic Center Planned Unit Development. (Resolution No. 2004 - 139, Final Environmental Impact Report for Ontario Downtown Civic Center Project, and related documents, all to be developed in accordance with the Plans and Specifications to be approved by the City, and any conditions imposed by the City in its approval of the Plans and Specifications and the Historic Properties in accordance with the Secretary of the Interior Standards (collectively the “Phase 2 Project” or “Phase 2”)
S. The Developer proposes to purchase Parcel 3, Parcel 4, Parcel 5, Parcel 6, Parcel 7, Parcel 8, Parcel 9 from the City as Phase 3 (together shall be referred to as “Phase 3 Properties”) of the Downtown Civic Cen ter Planned Unit Development. Phase 3 shall consist of Phase 3 of 4 of the Downtown Civic Center Planned Unit Development to construct two buildings, one building, will include ground level parking and 5,200 square feet of restaurant with 500 square feet of commercial space. The building will have 24 residential units on the 2nd, 3rd, and 4th story and one building will include ground level parking, 70 residential units on the 2nd, 3rd, and 4th story and a roof deck/pool, including all required or associated on-site and off-site improvements, all hardscape and all landscaping, all as specifically described as Block A1 in the Downtown Civic Center Planned Unit Development, Resolution No. 2004-139, Final Environmental Impact Report for Ontario Downtown Civic Center Project, and related documents, all to be develop ed in accordance with the Plans and Specifications to be approved by the City, and any conditions imposed by the City in its approval of the Plans and Specifications .(collectively the “ Phase 3 Project” or “Phase 3”).

T. The Developer proposes to purchase Parcel 1, Parcel 12, Parcel 11, Parcel 10 from the City as Phase 4 (together shall be referred to as “Phase 4 Properties”) of the Downtown Civic Center Planned Unit Development. Phase 4 shall consist of Phase 4 of 4 of the Downtown Civic Center Planned Un it Development to construct two buildings, one building will include 6,500 square feet of retail on the ground level and 15 residential units on the 2nd and 3rd floor and one building will include 5,500 square feet of retail on the ground floor and 12 residential units on the 2nd and 3rd floor, including all required or associated on -site and off -site improvements, all hardscape and all landscaping, all as specifically described as Block A1 in the Downtown Civic Center Planned Unit Development, Resolution No. 2004-139, Final Environmental Impact Report for Ontario Downtown Civic Center Project, and related documents, all to be developed in accordance with the Plans and Specifications to be approved by the City, and any conditions imposed by the City in its a pproval of the Plans and Specifications .(collectively the “ Phase 4 Project” or “Phase 4”)
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U. Phase 1 Project, Phase 2 Project, Phase 3 Project and Phase 4 Project shall together constitute the Downtown Civic Center Planned Unit Development (the “Project”).

V. The City obtained an appraisal dated May 16, 2022 for the Lerch Property, which appraised the Lerch Property as having a negative value of One Million, Nine Hundred Forty Thousand Dollars (-$2,185,000.00).

W. The City obtained an appraisal dated May 16, 2022 for the Yangtze Property, which appraised the Yangtze Property as having a negative value of Five Million, Four Hundred Twenty Thousand Dollars (-$5,875,000.00)
X. The City obtained an appraisal dated May 16, 2022 for the Old Bridal Shop Property, which appraised the Old Bridal Shop as having a negative value of Eight Hundred Forty Thousand Dollars (-$1,065,000.00)
Y. The City obtained an appraisal dated May 16, 2022 for Parcel 1, Parcels 3 through 12 and Parcel 14 which appraised Parcel 1, Parcels 3 through 12 and Parcel 14 as having a positive value of Two Million Five Hundred Seventy Thousand Dollars ($2,440,000.00) Z. JJ. The City obtained an appraisal dated May 16, 2022 for Parcel 13, which appraised Parcel 13 as having a negative value of Two Million Nine Hundred Sixty Thousand Dollars (-$4,075,000.00).

LL. The Developer’s proposed acquisition of the Properties and subsequent rehabilitation, construction, and completion of Properties and Project pursuant to the terms of this Agreement is i n the best interest of the City and the health, safety and welfare of the City’s taxpayers and residents and is in accordance with the public purposes set forth in applicable law.

Implementation of this Agreement will further the goals and objectives of t he City’s general plan by: (i) strengthening the City’s land use and social structure, and (ii) alleviating economic and physical blight on the Properties and in the surrounding community.

MM. The City’s Planning Commission has found pursuant to Governmen t Code Section 65402, that the Project is consistent with the City’s General Plan, and has taken the necessary actions to comply with CEQA;
NN. The City desires to sell the Properties to the Developer for the rehabilitation of the Properties and completion of the Project and the Developer desires to purchase the Properties from the City for the same purpose.

NOW, THEREFORE, FOR GOOD AND VALUABLE CONSIDERATION, THE

RECEIPT AND SUFFICIENCY OF WHICH THE PARTIES ACKNOWLEDGE, AND

PURSUANT TO THE PROMISES AND COVENANTS SET FORTH IN THIS AGREEMENT, THE PARTIES AGREE, AS FOLLOWS:

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TERMS AND CONDITIONS

ARTICLE I

DEFINITIONS; REPRESENTATIONS AND WARRANTIES;

EFFECTIVE DATE

1.1 Definitions. All initially capitalized terms not otherwise defined in this Agreement shall have the following meanings:

1.1.1 “Additional Insureds” has the meaning ascribed to such term in Section 5.9.

1.1.2 “Affiliate” means and refers to any person or entity, directly or indirectly, Controlling or Controlled by or under common Control with the Developer, whether by direct or indirect ownership of equity interests, by contract or otherwise.

1.1.3 “CEQA” means the California Environmental
Quality Act, Public Resources Code Sections 21000, et seq and California Code of Regulations Section 15000 et seq.

1.1.4 “Certificate of Completion ” means the written
certification of City that the construction of the Project has been completed in compliance with the terms and conditions of this Agreement, substantially in the form of Exhibit “V” attached to this Agreement.

1.1.5 “City” means the City of Ontario, California, a
California municipal corporation.

1.1.6 “City Loan ” means the amount loaned to the
Developer on a reimbursement basis from the City as defined and limited by the Total Development Costs for Phase 1. The City Loan is made by the City to assis t the Developer to finance construction and rehabilitation of Phase 1 and is evidenced by the City Loan Agreement for the Properties entered into by the Parties prior to the close of Escrow.

1.1.7 “City Loan Commencement Date” means the date
the City Loan Documents are approved by City Council. .

1.1.8 “City Loan Documents ” means collectively the
City Loan Agreement, and the City Note.

1.1.9 “City Loan Principal ” means the total dollar
number, not to exceed Nineteen Million Dollars ($19,000,000.00), determined by the City to be the Total Development Costs for Phase 1.

1.1.10 “City Manager ” means the City Manager of the
City or his or her designee or successor in function.
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1.1.11 “City Note” means the promissory notes made by
Developer in favor of City for the City Loan in form approved by the City Attorney, which shall be recorded against the Properties at the Close of Escrow.

1.1.12 “City Requirements” has the meaning ascribed to
the term in Section 2.5.2.

1.1.13 “City’s Title Notice Response ” means the written response of the City to the Developer’s Title Notice, in which the City either (i) elects to cause the removal from the Preliminary Report of any matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that were objected to in the Developer’s Title Notice, or (ii) elects not to cause the removal from the Preliminary Report of any matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy that were objected to in the Developer’s Title Notice.

1.1.14 “Close of Escrow ” or “Closing” means the
recording of the Grant Deed and Loan Documents for the Properties in the Official Records of the Recorder of the County, and completion of each of the actions set forth in ARTICLE III by the Escrow Holder for the City to sell the Properties to the Developer and the Developer to purchase the Properties from the City.

1.1.15 “Closing Date ” means the date that the Closing
occurs.

1.1.16 “Completion of Construction” means the issuance
of a Certificate of Completion confirming that the final certificate of occupancy for the Phase of the Project, based on the plans submitted by the Developer to the City, has been issued.

1.1.17 “Construction Commencement Date ” means the
date that is thirty (30) days from the Permit Issuance Date.

1.1.18 “Construction Costs” means the total cost incurred by Developer for constructing the Phases of the Project in accordance with this Agreement.

1.1.19 “Construction Drawings ” means plans or
blueprints detailing design, dimensions, materials, and methods required to build the Project.

1.1.20 “Construction Drawings Submittal Date ” means
the date when Developer submits to the City its Plans and Specifications for each Phase , which shall be in compliance with the Schedule of Performance.

1.1.21 “Construction Lender” means a Lender(s) that
provide(s) a Construction Loan to the Developer to pay the Construction Costs of all or a portion of the Project.

1.1.22 “Construction Loan ” means a Loan obtained by
Developer from a Construction Lender to finance all or part of the Construction Costs in conformity with the Financing Plan.
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1.1.23 “Construction Loan Deed of Trust(s) ” means the
Lien(s) required by a Construction Lender to secure the Developer ’s performance under the associated Construction Loan.

1.1.24 “Control” means and refers to possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a person or entity, whether by ownership of equity interests, by contract or otherwise.

1.1.25 “Controlling” and “Controlled” mean and refer to exercising or having Control.

1.1.26 “County” means the County of San Bernardino ,
California.

1.1.27 “Developer” means A Block, LLC , a California
limited liability Company.

1.1.28 “Developer’s Title Notice” means a written notice from the Developer to the City indicating the Developer’s acceptance of the state of the title to the Properties, as described in the Preliminary Report, or the Developer’s objection to specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy for the Properties, describing in suitable detail the actions that the Developer reasonably believes are indicated to cure or correct each of the Developer’s objections.

1.1.29 “Developer’s Title Notice Waiver ” means a
written notice from the Developer to the City waiving the Developer ’s previous objection in the Developer’s Title Notice to specific matters shown in Schedule B of the Preliminary Report as exceptions to coverage under the proposed Title Policy for the Properties.

1.1.30 “Due Diligence Investigations ” means the
Developer’s due diligence investigations of the Properties to determine the suitability of the Properties for development and operation of the Project, including, without limi tation, investigations of the environmental and geotechnical suitability of the Properties, as deemed appropriate in the reasonable discretion of the Developer, all at the sole cost and expense of the Developer.

1.1.31 “Effective Date ” has the meaning ascribed to the term in Section 1.3.

1.1.32 “Environmental Claims” has the meaning ascribed
to the term in Section 5.8.

1.1.33 “Environmental Laws ” means all federal, state,
local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct concerni ng any hazardous substance (as later defined), or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the 671
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Properties, occupational or environmental conditions on, under, or about the Properties, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (“CERCLA”) [42 USC Section 9601 et seq.]; the Resource Conservation and Recovery Act of 1976 (“RCRA”) [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act (“FWPCA”) [33 USC Section 1251 et seq.]; the Toxic Substances Control Act (“TSCA”) [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ( “HMTA”) [49 USC Section 5101 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 1201 et seq.] the Emergency Planning and Community Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardous Substances Act [California Health & Safety Code Section 25288 et seq.]; the California Hazardo us Substances Account Recodification Act [California Health & Safety Code Section 78000 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [California Health & Safety Code Section 24249.5 et seq.] the Porter - Cologne Water Quality Act [C alifornia Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Properties, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use.

1.1.34 “Environmental Matters ” has the meaning
ascribed to the term in Section 5.8.

1.1.35 “Escrow” has the meaning ascribed to the term in Section 2.1.

1.1.36 “Escrow Closing Date ” has the meaning ascribed
to the term in Section 3.6.

1.1.37 “Escrow Holder ” means Fidelity Title Insurance
Company.

1.1.38 “Escrow Opening Date” has the meaning ascribed
to the term in Section 3.1.

1.1.39 “Event of Default” has the meaning ascribed to the term in Section 7.1.

1.1.40 “Financing Commitment” means (a) one or more
commitment(s) from one or more Construction Lender(s) agreeing to provide sufficient funds which, when combined with the Developer’s equity contribution and the financial assistance to be provided by the City pursuant to this Agreement, is sufficient, as determined by the City in its reasonable discretion, to fully fund the Project ’s Construction Costs, or (b) a letter from one or 672
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more Construction Lender(s) indicating approval of a loan to the Developer for the development of the Properties.

1.1.41 “FIRPTA Affidavit ” means an affidavit
complying with Section 1445 of the United States Internal Revenue Code.

1.1.42 “Grant Deed” means a deed in the form of Exhibit “S” to this Agreement, conveying all of the City’s interest in the Properties to the Developer.

1.1.43 “Governmental Agency” means any and all courts,
boards, agencies, commissions, offices, or authorities of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city, public utility or otherwise) whether now or later in existence. These include, but are not limited to, City Planning Department, Building Department, Fire Department, Engineering Department, Police Department, affiliates of the City, Ontario Municipal Utility Company, Inland Empire Utilities Agency, Southern California Edison, Southern Califor nia Gas Company, San Bernardino County Health Department, and/or consultants of the City.

1.1.44 “Governmental Requirements” means all codes,
statutes, ordinances, laws, permits, orders, and any rules and regulations promulgated thereunder of any Governmental Agency.

1.1.45 “Hazardous Substances” means, without implied
limitation, substances defined as “hazardous substances,” “hazardous material,” “toxic substance,” “solid waste, ” or “pollutant or contaminate ” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C. Sections 9601, et seq.; the Toxic Substances Control Act ( “TSCA”) [15 U.S.C. Sections 2601, et seq.]; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 5101, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq.; those substances listed in the United States Department of Transportation (DOT) Table [49 CFR 172.101], or by the EPA, or any successor authority, as hazardous substances [40 CFR Part 302]; and those substanc es defined as “hazardous waste” in Section 78075 of the California Health and Safety Code or, as “hazardous substances” in Section 25316 of the California Health and Safety Code; other substances, materials, and wastes that are, or become, regulated or classified as hazardous or toxic under federal, state, or local laws or regulations and in the regulations adopted pursuan t to said laws, and shall also include manure, asbestos, polychlorinated biphenyl, flammable explosives, radioactive material, petroleum products, and substances designated as a hazardous substance pursuant to 33 USC Section 1321 or listed pursuant to 33 USC Section 1317.

1.1.46 “Historic Properties ” mean s the Lerch Property the Yangtze Property, and Parcel 13.

1.1.47 “Indemnified Parties” has the meaning ascribed to the term in Section 5.8.

1.1.48 “Lender” means any state or federally chartered
bank, savings and loan, capital investment group, or other third party financial institution which 673
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routinely makes Loans to developments and developers such as the Project and th e Developer in the normal course of business and which has been approved by the City pursuant to Section 6.3.

1.1.49 “Lerch Property ” means the real property
commonly called the Lerch Building generally located at 120 North Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “A” and depicted as APN 1048-553-15.

1.1.50 “Lien” means any mortgage, deed of trust, or other security instrument encumbering Developer’s fee interest in the Properties and/or Project, or any part thereof, or any pledge or other agreement given as security for the repayment of a Lo an and by which a Lender would be able to acquire any interest in the Developer upon the Developer ’s breach of any obligation under the Lender’s Loan Documents.

1.1.51 “Loan” means any loan or third-party equity/capital contribution (e.g. mezzanine financing) for the Project excluding the City Loan.

1.1.52 “Loan Documents” means the various documents
and instruments made by and between the Developer and a Lender that evidence a Loan and the security for repayment of such Loan.

1.1.53 “Maintenance Deficiency ” has the meaning
ascribed to the term in Section 5.3.1.

1.1.54 “Normal Business Hours ” means the normal
business hours of the City. As of the Effective Date, the City’s normal business hours are Monday through Thursday, between the hours of 7:30 a.m. a nd 5:30 p.m. Pacific Time and Friday from 8:00 a.m. and 4:30 p.m. Pacific Time.

1.1.55 “Notice of Agreement ” means the notice in the
form of Exhibit “T” to this Agreement to be recorded against the Properties at the Close of Escrow to provide constructive record notice of the existence and application of this Agreement to the Properties.

1.1.56 “Official Records” means the Official Records of San Bernardino County.

1.1.57 “Old Bridal Shop ” means the real property
commonly called the Old Bridal Shop generally located at 116 E B Street, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “C” and depicted as APN 1048-553-02.

1.1.58 “Party” means, individually, the City or the
Developer, as applicable.

1.1.59 “Parties” means, collectively, the City and the
Developer.
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1.1.60 “PCO Statement” means a preliminary change of
ownership statement provided for in California Revenue and Taxation Code Section 480.3.

1.1.61 “Permit Issuance Date” means the date when the
City issues the first bui lding permit to Developer, which date shall be in compliance with the Schedule of Performance for each Phase.

1.1.62 “Permitted Transfer” means and refers to any of
the following types of Transfers by the Developer, where the person or entity to which such Transfer is made expressly assumes the obligations of the Developer under this Agreement in a written instrument satisfactory to the City.

1.1.62.1 Any Transfer of stock or equity of the Developer that does not change management or operational Control of the Properties or the Project;

1.1.62.2 Any Transfer of any interest in the Developer or the Properties or Project or any portion thereof irrespective of the percentage of ownership (i) to any other owner of any interest in the Developer; or (ii) to any Affiliate, or (iii) to an y other person or entity in which any holder of an interest (including any beneficial interest) in the Developer is a manager, officer or partner or in which any of the aforementioned is a shareholder, member or partner (including a beneficial owner); and

1.1.62.3 Any Lien given to Lender in connection with a Loan approved by the City pursuant to Section 6.3.

1.1.63 “Phase” means one or more of the four (4)
development phases of the Project as shown on Exhibit W.

1.1.64 “Phase 1 Project” and “Phase 1 ” means only
Phase 1 of 4 of the Downtown Civic Center Planned Unit Development to rehabilitate, structurally retrofit for adaptive re-use and construct an additional multi-story, mixed-use residential and retail commercial development project, including all required or associated on -site and off -site improvements, all hardscape and all landscaping, all as specifically described as Block A1 in the Downtown Civic Center Planned Unit Development, Resolution No. 2004 -139, Final Environmental Impact Report for Ontario Downtown Civic Center Project, and related documents, all to be developed in accordance with Plans and Specifications to be app roved by the City, and any conditions imposed by the City in its approval of the Plans and Specifications and the Historic Properties in accordance with the Secretary of the Interior Standards.

1.1.65 “Phase 1 Properties ” means that certain real
property commonly called the Lerch Building generally located at 120 North Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit A and depicted as APN 1048-553-15 (the “Lerch Property” ); that certain real property commonly called the Yangtze Building generally located at 122 and 126 North Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit B and d epicted as APN s 1048-553-16 and 1048-553-17 (the “ Yangtze Property”) and the that certain real property commonly called the Old Bridal Shop generally located at 116 E. B Street , Ontario, California 91762, and as more 675
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particularly described in the legal d escription(s) attached to this Agreement as Exhibit C and depicted as APN 1048-553-02 (the “Old Bridal Shop Property”) the that real property, and all current and future improvements thereon (including, without implied limitation, the Project and Phase 1 Project), legally described in Exhibit A, Exhibit B and Exhibit C.

1.1.66 “Phase 2 Project” and “Phase 2 ” means only
Phase 2 of 4 of the Downtown Civic Center Planned Unit Development to rehabilitate, structurally retrofit for adaptive re-use and construct 7,000 square feet of retail on the ground floor and 6,000 square feet of community room, and a roof patio on the second floor, including all required or associated on-site and off-site improvements, all hardscape and all landscaping, all as specifically described as Block A1 in the Downtown Civic Center Planned Unit Development, Resolution No. 2004-139, Final Environmental Impact Report for Ontario Downtown Civic Center Project, and related documents, all to be developed in accordance with , Plans and Specifications to be approved by the City, and any conditions imposed by the City in its approval of the Plans and Specifications and the Historic Properties in accordance with the Secretary of the Interior Standards.

1.1.67 “Phase 2 Propert y” means that certain real
property generally located at 114 N. Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “ O” and depicted as APN 1048 -553-13 (“Parcel 13”) the that real prope rty, and all current and future improvements thereon (including, without implied limitation, the Project and Phase 2 Project ), legally described in Exhibit O.

1.1.68 “Phase 3 Project” and “Phase 3 ” means only
Phase 3 of 4 of the Downtown Civic Center Planned Unit Development to construct two buildings, one building, will include ground level parking and 5,200 square feet of restaurant with 500 square feet of commercial space. The building will have 24 residential units on the 2nd, 3rd, and 4th story and one building will include ground level parking, 70 residential units on the 2nd, 3rd, and 4th story and a roof deck/pool, including all required or associated on-site and off-site improvements, all hardscape and all landscaping, all as specifically described as Block A1 in the Downtown Civic Center Planned Unit Development, Resolution No. 2004-139, Final Environmental Impact Report for Ontario Downtown Civic Center Project, and related documents, all to be developed in accordance with , Plans and Specifications to be approved by the City, and any conditions imposed by the City in its approval of the Plans and Specifications.

1.1.69 “Phase 3 Properties ” means that certain real
property generally located at 0 E. B Street, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “ E” and depicted as APN 1048 -553-03 (“Parcel 3”); that certain real property generally located at 127 N. Lemon Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “ F” and depicted as APN 1048 -553-04 (“Parcel 4”) ; that certain real property generally located at 115 N. Lemon Avenue, Ontario, California 91762, and as more particularly described in the lega l description(s) attached to this Agreement as Exhibit “G” and depicted as APN 1048-553-05 (“Parcel 5”); that certain real property generally located at 127 E. Holt Boulevard, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “ H” and depicted as APN 1048 -553-06 (“Parcel 6”); that certain real property generally located at 123 E. Holt Boulevard, Ontario, 676
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California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “I” and depicted as APN 1048-553-07 (“Parcel 7”);that certain real property generally located at 117 E. Holt Boulevard, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “J” and depicted as APN 1048-553-08 (“Parcel 8”); that certain real property generally located at 115 E. Holt Boulevard, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “K” and depicted as APN 1048-553-09 (“Parcel 9”) that real property, and all current and future improvements thereon (including, without implied limitation, the Project and Phase 3 Project), legally described in Exhibit E, Exhibit F, Exhibit G, Exhibit H, Exhibit I, Exhibit J, and Exhibit K.

1.1.70 “Phase 4 Project” and “Phase 4 ” means only
Phase 4 of 4 of the Downtown Civic Center Planned Unit Development to construct two buildings, one building will include 6,500 square feet of retail on the ground level and 15 residential units on the 2nd and 3rd floor and one building will include 5,500 square feet of retail on the ground floor and 12 residential units on the 2nd and 3rd floor, including all required or associated on -site and off-site improvements, all hardscape and all landscaping, all as specifically described as Block A1 in the Downtown Civic Center Planned Unit Development, Resolution No. 2004 -139, Final Environmental Impact Report for Ontario Downtown Civic Center Project, and related documents, all to be developed in accordance with , Plans and Specifications to be approved by the City, and any conditions imposed by the City in its approval of the Plans and Specifications.

1.1.71 “Phase 4 Properties ” means that that certain real property generally located at 0 North Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “D” and depicted as APN 1048 -553-01 (“Parcel 1”); that certain real property generally located at 0 N.

Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “ L” and depicted as APN 1048 -553-10 (“Parcel 10”); that certain rea l property generally located at 110 N. Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “ M” and depicted as APN 1048 -553-11 (“Parcel 11”); that certain real property generally located at 110 N. Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attached to this Agreement as Exhibit “ N” and depicted as APN 1048 -553-12 (“Parcel 12”) that real property, and all cur rent and future improvements thereon (including, without implied limitation, the Project and Phase 4 Project), legally described in Exhibit D, Exhibit L, Exhibit M and Exhibit N.

1.1.72 “Plans and Specifications ” has the meaning
ascribed to the term in Section 2.5.1.

1.1.73 “Preliminary Report” means a preliminary report
issued by the Title Company in contemplation of the issuance of the Title Policy, accompanied by legible copies of all documents listed in Schedule B of the report as exceptions to coverage under the proposed Title Policy. The Parties acknowledge that they may prepare one (1) or more Preliminary Reports for each parcel, or group of parcels, comprising the Properties. In such case, all reports, notices, and objection letters which pertain to the Preliminary Report for the entirety 677
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of the Properties shall apply separately to each Preliminary Report associated with a parcel or a group of parcels.

1.1.74 “Prevailing Wages” and “Prevailing Wage Law”
means compliance, to the extent applicable to the Project, with California Labor Code Section 1720, et seq., and 1770, et seq., as well as California Code of Regulations, Title 8, Section 16000, et seq.

1.1.75 “Project” means any and all of the following: Phase 1 Project, Phase 2 Project, Phase 3 Project, and Phase 4 Project.

1.1.76 “Project Completion Date ” means that date set
forth therefor by which a Certificate of Completion shall be issued for the Project, as more particularly provided i n the Schedule of Performance. The Project Completion Date shall be no later than Five (5) years from City Council approval of Agreement.

1.1.77 “Properties” means any and all of the following :

Phase 1 Properties, Phase 2 Properties, Phase 3 Properties and Phase 4 Properties.

1.1.78 “Properties Transfer” means and refers to any
“change in ownership,” as defined in Revenue and Taxation Code Sections 60, et seq., of all or any portion of the Properties.

1.1.79 “Purchase Price” means the amount of One Dollar
($1.00), in cash or immediately available funds.

1.1.80 “Record”, “recorded”, “recording” or “recordation” each mean and refer to recordation of the referenced document in the official records of the Recorder of the County of San Bernardino, California.

1.1.81 “Schedule of Performance” means the schedule for the performance of certain actions by the Parties pursuant to this Agreement, attached to this Agreement as Exhibit “R”.

1.1.82 “Scope of Development” means the detailed description of the Project attached to this Agreement as Exhibit “Q”.

1.1.83 “Secretary of the Interior's Standards” means the Secretary of the Interior’s Standards for the Treatment of Historic Properties (36 CFR Part 68, 1995).

1.1.84 “Title Company” means Fidelity Title Company.

1.1.85 “Title Policy ” means a standard CLTA owners ’
policy of t itle insurance issued by the Title Company, with coverage in the full amount of the Purchase Price and insuring fee title to the Properties, subject only to the Permitted Exceptions.

However, at Developer’s option, Developer may acquire an ALTA extended coverage policy. City 678
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shall pay for the standard CLTA policy. Developer shall pay for any additional or ALTA extended coverage policy.

1.1.86 “Total Development Costs for Phase 1” means the
total amount necessary to complete Phase 1. The City Loan to Developer shall be used exclusively to reimburse Developer for the actual reasonable costs incurred by Developer for the development and construction of Phase 1 up to Nineteen Million Dollars ($19,000,000.00). Any development cost for Phase I in excess of the City Loan amount shall be borne exclusively by Developer.

1.1.87 “Transfer” means any of the following:

1.1.87.1 Any total or partial sale, assignment, conveyance, trust, power, or transfer in any other mode or form, by the Developer of more than a 49% interest in the Developer’s interest in this Agreement, the Propert ies, or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest in the Developer’s interest in this Agreement, the Properties or the Project; or

1.1.87.2 Any total or partial sale, assignment, conveyance, or transfer in any other mode or form, of or with respect to any interest in the Developer or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest in any interest in the Developer; or

1.1.87.3 Any merger, consolidation, sale, or lease of all or substantially all of the assets of the Developer or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a 49% interest of all or substantially all of the assets of the Developer; or

1.1.87.4 Any Properties Transfer; or

1.1.87.5 The recordation of any deed of trust, mortgage, Lien or similar encumbrance against all or any portion of the Properties or the Project.

1.1.87.6 Transfer shall not include the sale, transfer, assignment, or conveyance in any form of shares, interest, membership, affiliation, or stock in Developer, so long as original members, stock/share/interest holder(s) in Developer retain management and control of Developer.

1.1.88 “Unavoidable Delay ” means any delay that is
caused by the exclusively by the other party or that is beyond the control of the City or the Developer, including delay caused by Unforeseen Site Conditions, strikes, acts of God, weather, inability to obtain labor or materials , inspections or approvals, governmental restriction and/or action of Governmental Agency , civil commotion, fire or similar causes, but excluding circumstances subject to Section 8.11.2.

1.1.89 “Unforeseen Site Conditions ” means any
condition of the Property and/or Project that are concealed or latent physical conditions or subsurface conditions that (a) materially differ from the conditions encountered or anticipated by Developer while preparing Plans and Specifications, or (b) are of an unusual nature, differing 679
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materially from the conditions ordinarily encountered, or generally recognized as inherent, in Developers work.

1.1.90 “Yangtze Property” means the real property
commonly called the Yangtze Building generally located at 122 and 126 North Euclid Avenue, Ontario, California 91762, and as more particularly described in the legal description(s) attache d to this Agreement as Exhibit B and depicted as APNs 1048-553-16 and 1048-553-17.

1.2 Representations and Warranties.

1.2.1 City Representations and Warranties . The
representations and warranties of City contained in this Section 1.2.1 shall be based upon the actual knowledge of the City Manager as of the Effective Date , without any duty of investigation or inquiry. All representations and warranties conta ined in this Section 1.2.1 are true and correct as of the Effective Date. City’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. City hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by Developer has been made in material reliance by Developer on such covenants, representations and warranties:

1.2.1.1 City is a California municipal corporation, duly formed and operating under the laws of the State of California. City has the le gal power, right and authority to enter into this Agreement and to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby.

1.2.1.2 The persons executing any instruments for or on behalf of City have been authorized to act on behalf of City and this Agreement is valid and enforceable against City in accordance with its terms and each instrument to be executed by City pursuant hereto or in connection therewith will, when executed, shall be valid and enforceable against City in accordance with its terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of and compliance with this Agreement by City.

1.2.1.3 City has taken all requisite action and obtained all requisite consents for agreements or matters to which City is a party in connection with entering into this Agreement and the instruments and documents referenced herein and in connection with the consummation of the transactions contemplated hereby. Execution hereon by the City requires no further votes, resolutions or approvals of this Agreement.

1.2.1.4 If the City becomes aware of any act or circumstance that would change or render incorrect, in whole or in p art, any representation or warranty made by the City under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the City’s knowledge and/or belief as of a certain date, the City will give immediate written notice of such changed fact or circumstance to the Developer.

1.2.2 Developer Representations and Warranties. The
representations and warranties of Developer contained in this Section 1.2.2 shall be based upon the actual knowledge of Alex Baroian as of the Effective Date. All representations and warranties 680
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contained in this Section 1.2.2 are true and correct as of the Effective Date. Developer ’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the execution and delivery of this Agreement and the Closing. Developer hereby makes the following representations, covenants and warranties and acknowledges that the execution of this Agreement by City has been made in material reliance by City on such covenants, representations and warranties:

1.2.2.1 Developer is a California limited liability company any, lawfully entitled to do business in the State of California and the City. Developer has the legal right, power and authority to enter into this Agre ement and the instruments and documents referenced herein and to consummate the transactions contemplated hereby. The persons executing this Agreement and the instruments referenced herein on behalf of Developer hereby represent and warrant that such persons have the power, right and authority to bind Developer.

1.2.2.2 Developer has taken all requisite action and obtained all requisite consents in connection with entering into this Agreement and the instruments and documents referenced herein and the consummation of the transactions contemplated hereby, and no consent of any other party is required for Developer’s authorization to enter into Agreement.

1.2.2.3 Neither the execution of this Agreement nor the consummation of the transactions contemplated hereby shall result in a breach of or constitute a default under any other agreement, document, instrument or other obligation to which Developer is a party or by which Developer may be bound, or under law, statute, ordinance, rule, governmental regulation or any writ, injunction, order or decree of any court or governmental body applicable to Developer or to the Properties.

1.2.2.4 This Agreement is, and all agreements, instruments and documents to be executed by Developer pursuant to this Agreement shall be, duly executed by and shall be valid and legally binding upon Developer and enforceable in accordance with their respective terms. No approval, consent, order or authorization of, or designation or declaration of any other person, is required in connection with the valid execution and delivery of in compliance with this Agreement by Developer.

1.2.2.5 If the Developer becomes aware of any act or circumstance that would change or render incorrect, in whole or in part, any representation or warranty made by the Developer under this Agreement, whether as of the date given or any time thereafter, whether or not such representation or warranty was based upon the Developer ’s knowledge and/or belief as of a certain date, the Developer will give immediate written notice of such changed fact or circumstance to the City.

1.3 Effective Date. This Agreement is dated June 6, 2025 for reference purposes only.

This Agreement shall not become effective until the date on which all of the following are true (the “Effective Date”): (i) this Agreement is approved and executed by the appropriate authorities of Developer and delivered to City; (ii) Developer has delivered to City a certified copy of the official action taken by all of the members of the Developer approving this Agreement, in the form attached to this Agreement as Exhibit “U”; (iii) following all legally required notices and hearings, 681
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this Agreement is approved by the City Council; and (iv) this Agreement is executed by the authorized representatives of City.

1.4 Exhibit List. The following is a list o f the Exhibits attached to this Agreement.

Each of the Exhibits is incorporated by this reference into the text of this Agreement.

Exhibit A Legal Description of Lerch Property
Exhibit B Legal Description of Yangtze Property
Exhibit C Legal Description of Old Bridal Shop Property Exhibit D Legal Description of Parcel 1
Exhibit E Legal Description of Parcel 3
Exhibit F Legal Description of Parcel 4
Exhibit G Legal Description of Parcel 5
Exhibit H Legal Description of Parcel 6
Exhibit I Legal Description of Parcel 7
Exhibit J Legal Description of Parcel 8
Exhibit K Legal Description of Parcel 9
Exhibit L Legal Description of Parcel 10
Exhibit M Legal Description of Parcel 11
Exhibit N Legal Description of Parcel 12
Exhibit O Legal Description of Parcel 13
Exhibit P Legal Description of Parcel 14
Exhibit Q Scope of Development
Exhibit R Schedule of Performance
Exhibit S Form of Grant Deed
Exhibit T Form of Notice of Agreement
Exhibit U Form of Official Action of Developer
Exhibit V Form of Certificate of Completion
Exhibit W Development Phases

ARTICLE II

PROPERTY DISPOSITION

2.1 Purchase and Sale. In exchange for the Purchase Price and the Developer’s other covenants and undertakings set forth in this Agreement, the City shall sell the Propert ies to the Developer and the Developer shall purchase the Properties from the City pursuant to the terms and conditions of this Agreement. For the purposes of exchanging funds and documents to complete the sale from the City to the Developer and the purchase by the Developer from the City of the Properties pursuant to the terms of this Agreement, the City and the Developer agree to open an escrow (“Escrow”) with the Escrow Holder. ARTICLE III of this Agreement constitutes the joint escrow instructions of the Parties to the Escrow Holder for completion of the Escrow for the sale of the Properties, as contemplated by this Agreement. The Developer and th e City shall execute such further escrow instructions, consistent with the provisions of this Agreement, as may be reasonably requested by the Escrow Holder. In the event of any conflict between the provisions of this Agreement and any other escrow instru ctions requested by the Escrow Holder, the provisions of this Agreement shall control.
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2.2 Payment of Purchase Price. The Developer shall deposit the Purchase Price into Escrow.

2.3 Title. Developer has reviewed and hereby agrees to accept the title to and conveyance of the Properties “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition.

2.4 Developer Investigations. Prior to entering into this Agreement, Developer has completed all of its Due Diligence Investigations w ith respect to the entirety of the Propert ies at its sole cost and expense. The Developer shall rely solely and exclusively upon the results of its Due Diligence Investigations of the Propert ies, including, without limitation, investigations regarding geotechnical soil conditions, compliance with applicable laws pertaining to the use of the Properties by the Developer and any other matters relevant to the condition or suitability of the Properties for the Project, as the Developer deemed necessary or approp riate. City makes no representation or warranty to the Developer relating to the condition of the Properties or suitability of the Properties for any intended use or development by the Developer. The Developer hereby accepts all conditions of the Propert ies in its existing “AS IS,” “WHERE IS” and “SUBJECT TO ALL FAULTS” condition, as of the date the City Council approved this Agreement, without any liability of the City whatsoever.

2.5 Developer to Obtain all Project Entitlements.

2.5.1 Developer has developed and presented to City staff and the City Council, for review, in accordance with the Schedule of Performance or will develop and present to the City for review in accordance with the Schedule of Performance, the following (collectively, the “Plans and Specifications”):

2.5.1.1 The Adaptive Reuse Ordinance (ARO) package for
Phase 1 and Phase 2.

2.5.1.2 A proposed complete conceptual development plan for the Project on the Properties that describes and depicts: (1) the location and placement of proposed buildings; (2) the architectural and elevations of the proposed buildings; (3) the complete rehabilitation of the Properties; in accordance with all local, state and federal laws as well as the Historic Properties in compliance with the Secretary of the Interior Standards;

2.5.1.3 A list of potential users or tenants and anticipated lease rates for the Properties, as developed with the Project;

2.5.1.4 A proposed time schedule and cost estimates for the development of the Project on the Properties;

2.5.1.5 A proposed financing plan identifying financing sources for all private and public improvements proposed for Phase 2, Phase 3 and Phase 4 of the Project; and

2.5.1.6 Developer will, pursuant to the Schedule of Performance as necessary, develop and present to the City, for review, the New Development Entitlement Package (the “New Development Entitlement Package”) for Phase 3 and Phase 4. 683
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2.5.2 The Secretary of the Interior Standards, City’s
zoning, building and land use regulations (whether contained in ordinances, the City’s municipal code, conditions of approval, policies, practice or elsewhere) (collectively, the “City Requirements”), shall be applicable to the use and development of the Project on the Properties by the Developer. The Developer acknowledges that all Plans and Specifications and any changes to the Plans and Specifications shall be subject to the City Requirements. No action by the City with reference to this Agreement or any related documents shall be deemed to constitute a waiver of any City Requirements regarding the Properties, the Project, the Developer, any successor -in- interest of the Developer or any successor -in-interest to the Properties. The City Requirements may only be changed or waived by modification or variance approve d by the City and consistent with this Agreement. No entitlement, permit or other approval from the City for development of the Project on the Properties shall attach to any portion of the Properties or otherwise become effective to allow the Developer to develop the Project on the Properties until after the Developer owns fee title to that portion of the Properties to which such entitlement, permit or other approval pertains. Under no circumstances shall the Developer commence development of any portion of the Project on the Properties prior to the Developer owning fee title to the Properties.

2.5.3 The approval of the Scope of Development shall not be binding on the City Council or the Planning Commission of the City regarding any approvals of the Project required by such bodies. The Developer obtains no right to develop the Project on the Properties or any portion of the Properties by virtue of this Agreement, except that following the Close of Escrow, the Developer shall possess the same rights as any other owner of property within the Properties that desires to develop its property in a manner consistent with the City ’s General Plan. If any revisions of the Scope of Development are required by a Govern mental Agency (other than the City) having jurisdiction over the Properties or the Project, the Developer shall promptly make any such revisions that are generally consistent with the Scope of Development. Should any revisions be required by any such Gover nment Agency, any timeline contemplated herein shall be extended to enable Developer to submit and obtain approval from that Government Agency.

2.5.4 Notwithstanding any provision to the contrary in
this Agreement, following the Close of Escrow, the Developer agrees to accept and comply fully with any and all conditions of approval applicable to all approvals, permits and other governmental actions regarding the development or operation of the Project on the Properties, so long as such conditions of approval are consistent with the Scope of Development and this Agreement in all material respects.

2.5.5 Developer to Pay All Costs and Expenses . The
Parties agree that the City shall not provide any financial assistance to the Developer in connection with the Project except as may be expressly set forth in this Agreement. The Developer shall be solely responsible for paying for the costs of all design work, construction, labor, materials, fees and permit expenses associated with the Project. The Developer shall pay any and all fees pertaining to the review and approval of the Project by the City, any other Governmental Agency and utility service providers, including the costs of preparation of all required construction, planning and other documents reasonably required b y a Governmental Agency pertinent to the development or operation of the Project on the Properties, including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning 684
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applications, environmental review and disclosure documents and design review documents. The Developer shall pay for any and all costs, including, but not limited to, the costs of design, construction, relocation and securing of permits for sewer or utility improvements and connections, that may be required in development of the Project, whether located on or off of the Properties. The Developer shall obtain any and all necessary approvals, prior to the commencement of applicable portions of construction, and the Developer shall take reaso nable precautions to ensure the safety and stability of surrounding properties during said construction.

In accordance with this Section 2.5.5, Developer shall be responsible for the costs, or immediate reimbursement to the City upon delivery of an invoice for the costs, of the following:

2.5.5.1 all fees or expenses of engineers, architects,
financial consultants, legal, planning or other consultants or contractors, retained by the Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications or other activity or matter relating to the Properties or the Projec t or the development or negotiation of this Agreement that may be undertaken by the Developer;

2.5.5.2 all fees, charges and costs, make all deposits and provide all bonds or other security associated with the submission to and processing by the City of any and all applications and other documents and information to be submitted to the City by the Developer pursuant to this Agreement or otherwise associated with the Project; and

2.5.6 The Developer shall obtain all entitlements, permits and other approvals for use and de velopment of the Project on the Properties from each Governmental Agency, within the time period for such actions specifically set forth in the Schedule of Performance, subject to any extensions of time authorized by this Agreement upon the occurrence of an Unavoidable Delay.

ARTICLE III

ESCROW INSTRUCTIONS

3.1 Opening of Escrow. For purposes of this Agreement, the opening of Escrow shall be the first date on which a fully executed copy of this Agreement and Purchase Price are deposited with Escrow Holder ( “Escrow Opening Date”). The Developer shall cause the Escrow to be opened within five (5) days following the Effective Date. Escrow Holder shall promptly confirm in writing to each of the Parties the date of the Escrow Opening Date. This ARTICLE III shall constitute the joint escrow instructions of the City and the Developer to Escrow Holder for conduct of the Escrow to complete the purchase and sale of the Properties between them, as contemplated in this Agreement.

3.2 Conditions to Close of Escrow. The conditions set forth below shall be satisfied or waived in writing by the respective benefited Party on or before the Escrow Closing Date or the Party benefited by any unsatisfied condition shall not be required to proceed to close Escrow.

3.2.1 Developer’s Conditions to Close of Escrow . The
Developer’s obligation to purchase the Properties from the City on the Escrow Closing Date shall 685
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be subject to the satisfactio n of the following conditions precedent, each of which can only be waived in writing by the Developer:

3.2.1.1 The Developer has executed and delivered to the City wet signature copies of all City Loan Documents;

3.2.1.2 The Title Company is unconditionally committed to i ssue the Title Policy for the Properties, subject to any Permitted Exceptions, to the Developer;

3.2.1.3 The City deposits the items into the Escrow required by Section

3.4;

3.2.1.4 The representations, warranties and covenants of the City set forth in Section 1.2.1 are true and correct in all material respects on the Effective Date and on the Escrow Closing Date;

3.2.1.5 The City has completed all of their material obligations required by this Agreement to be completed prior to the Close of Escrow.

3.2.2 City’s Conditions to Close of Escrow. The City’s obligation to sell the Properties to the Developer on or before the Escrow Closing Date shall be subject to the satisfaction of the following conditions precedent, wh ich can only be waived in writing by the City:

3.2.2.1 The Developer has deposited the Purchase Price into Escrow;

3.2.2.2 The Developer agrees to accept the title to and conveyance of the Properties, pursuant to Section 2.2;

3.2.2.3 The Title Company is unconditionally committed to issue the Title Policy for the Properties, subject to any Permitted Exceptions, to the Developer;

3.2.2.4 The Developer has completed all of its material obligations required by this Agreement to be completed prior to the Close of Escrow including the execution of all of the City Loan Documents;

3.2.2.5 The representations, warranties and covenants of the Developer set forth in Section 1.2.2 are true and correct in all material respects on the Effective Date and on the Escrow Closing Date; and

3.2.2.6 The Developer deposits the funds and items into the Esc row required by Section 3.3 for the Escrow.

3.3 Developer’s Escrow Deposits . Following satisfaction or waiver of each of the Developer’s conditions to Close of Escrow set forth in Sections 3.2.1, as applicable, the Developer shall deposit the following funds and documents into Escrow at least two (2) business days prior to the Escrow Closing Date in a writing delivered to the Parties:
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3.3.1 Purchase Price and Other Funds. Purchase Price,
plus any additional funds required to be deposited into Escrow by the Developer under the terms of this Agreement to close the Escrow, all in immediately available funds.

3.3.2 PCO Statement . A PCO Statement executed by
the authorized representative(s) of the Developer.

3.3.3 Executed City Loan Documents . The City Loan
Documents executed by the authorized representative(s) of the Developer in recordable form.

3.3.4 Acceptance of Grant Deed s. The Certificate of
Acceptance of the Deeds for Phase 1 Properties, Phase 2 Property, Phase 3 Properties and Phase 4 Properties, in the form attached to the Grant Deed, executed by the authorized representative(s) of the Developer in recordable form.

3.3.5 Notice of Agreement . The Notice of Agreement
executed by the authorized representative(s) of the Developer in recordable form.

3.4 City’s Escrow Deposits . Following satisfaction or waiver of each of the City ’s conditions to Close of Escrow set forth in Sections 3.2.2, as applicable, the City shall deposit the following documents into Escrow at least two (2) business days prior to the Escrow Closing Date:

3.4.1 Executed City Loan Documents . The City Loan
Documents executed by the authorized representative(s) of the City in recordable form.

3.4.2 Grant Deed s. The Grant Deed s executed by the
authorized representative(s) of the City in recordable form.

3.4.3 FIRPTA Affidavit (City). The FIRPTA Affidavit
completed and executed by the authorized representative(s) of the City.

3.4.4 Notice of Agreement . The Notice of Agreement
executed by the authorized representative(s) of the City in recordable form.

3.5 Closing Procedure. When each of the Developer ’s Escrow required deposits, as set forth in Section 3.3, and each of the City ’s Escrow required deposits, as set forth in Section

3.4, are deposited into Escrow, Escrow Holder shall request confirmation in writing from both the City and the Developer that each of their respective conditions to the Close of Escrow, as set forth in Section 3.2, are satisfied or waived. Upon Escrow Holder ’s receipt of written confirmation from both the City and the Developer that each of their respective conditions to the Close of Escrow are either satisfied or waived, Escrow Holder shall close the Escrow for the Properties by doing all of the following:

3.5.1 Recordation of Documents . File the following
with the Office of the Recorder of the County, for recordation in the order set forth in Section 3.7 (i) the Grant Deed s, with the Developer ’s certificate of accept ance attached, (ii) the Notice of Agreement, (iii) the City Note , and (iv) other documents as determined necessary for recordation by the City.
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3.5.2 Distribution of Recorded Documents. Distribute
each recorded document to the Party or person designated for such distribution in Section 3.7.

3.5.3 PCO Statement. File the PCO Statement with the
Office of the Recorder of the County.

3.5.4 FIRPTA Affidavit . File the FIRPTA Affidavit
with the United States Internal Revenue Service.

3.5.5 Title Policy. Obtain and deliver the Title Policy to the Developer.

3.5.6 Purchase Price. Deliver the Purchase Price to the City, and less any other charges to the account of the City, and return any remaining funds held by Escrow Holder for the account of the Developer to the Developer, less the Developer ’s share of Escrow closing costs, and less any other charges to the account of the Developer.

3.6 Close of Escrow. Close of Escrow shall occur no later seven (7) days following the Effective Date of this Agreement. If for any reason the Close of Escrow has not occurred by the Escrow Closing Date, then any Party not then in default of this Agreement may cancel the Escrow and terminate this Agreement, subject to the notice and cure provisions of Section 7.1 (to the extent applicable), without liability to any other Party or any other person for such termination and cancellation, by delivering written notice of termination to the other Party(ies) and Escrow Holder and, thereafter, the Parties shall proceed pursuant to Section 3.10 if the non -terminating Party is not in default or pursuant to Section 7.2 or 7.3 (as applicable) if the non-terminating Party is in default. Without limiting the right of any Party to terminate this Agreement, pursuant to the preceding sentence, if Escrow does not close on or before the Escrow Closing Date, and no Par ty has exercised its contractual right to cancel Escrow and terminate this Agreement before such time, then Escrow shall close as soon as reasonably possible following the first date on which Escrow Holder is in a position to close the Escrow pursuant to the terms and conditions of this Agreement.

3.7 Recordation and Distribution of Documents . As applicable, Escrow Holder shall cause the following documents to be recorded in the official records of the Recorder of the County in the following order of priority at the Close of Escrow: (i) the Grant Deeds, with the Developer’s certificate of acceptance attached , (ii) the Notice of Agreement ; (iii) any other documents to be recorded through Escrow upon the joint instructions of the Parties. All recorded documents shall provide that they are to be returned to Escrow Holder after recordation. When originals of such recorded documents are returned to Escrow Holder, Escrow Holder shall deliver: (i) the original Grant Deed, with the Developer’s original certificate of acceptance attached, to the Developer and copies to the City, each showing all recording information, (ii) the original of the Notice of Agreement to the City, with copies to the Developer, each showing all recording information, and (iii) the Original of the City Note to the City, with copies to the Developer, each showing all recording information, and (iv) the original of any other document recorded at the close of Escrow to the Party or other person designated in the joint escrow instructions of the Parties for such recordation and a copy of each such document to the other Party or Parties, each showing all recording information.
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