ER5-4 Transition of Farms.
We protect both existing farms and sensitive uses around them as agricultural areas transition to urban uses.
The Specific Plan requires a minimum 100 ft. wide agricultural buffer be provided by the development between any new
residential structure and any existing animal feed trough, corral/ pen or an existing dairy/feed lot.
SAFETY ELEMENT
GOAL S1: Minimized risk of injury, loss of life, property damage and economic and social disruption caused by earthquake-induced and other geologic hazards.
S1-1 Implementation of Regulations and Standards.
We require that all new habitable structures be designed in accordance with the most recent California Building Code adopted by the City, including provisions regarding lateral forces and grading.
All development within the Specific Plan will be required to comply with the State of California Building Code as adopted and implemented by the City.
GOAL S3: Reduced risk of death, injury, property damage and economic loss due to fires, accidents and normal everyday occurrences through prompt and capable emergency response.
S3-8 Fire Prevention through Environmental Design.
We require new development to incorporate fire prevention consideration in the design of streetscapes, sites, open spaces and buildings.
The Specific Plan requires all new development to be reviewed and approved pursuant to the provisions of the City’s Subdivision Ordinance and Development Plan Review process which
provides for review by the City’s Fire Department which may require the development to incorporate fire prevention design elements in streetscapes, sites, open spaces and buildings. 536
ONTARIO, CALIFORNIA
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general plan consistency
PLAN POLICY SPECIFIC PLAN CONSISTENCY
GOAL S4: An environment where noise does not adversely affect the public’s health, safety and welfare.
S4-1 Noise Mitigation.
We utilize the City’s Noise Ordinance, building codes and subdivision and development codes to mitigate noise impacts.
The Specific Plan requires all new development to comply with the City’s Noise Ordinance, building codes and subdivision and development codes to mitigate noise impacts.
GOAL S5: Minimize the risk of injury, property damage and economic loss resulting from windstorms and wind-related hazards.
S5-2 Dust Control Measures.
We require the implementation of Best Management Practices for dust control at all excavation and grading projects.
Construction within the Specific Plan will comply with a City approved construction management plan and all mitigation measures identified in the project EIR with regard to dust control.
GOAL S6: Reduced potential for hazardous materials exposure and contamination.
S6-9 Remediation of Methane.
We require development to assess and mitigate the presence of methane, per regulatory standards and guidelines.
The project will comply with all mitigation measures identified as part of the project EIR for soil remediation and proper venting to address the potential existence of methane gases within the project.
GOAL S7: Residential neighborhoods, commercial areas and industrial districts that are kept safe through a multi-faceted approach of prevention, suppression and community involvement in public safety.
S7-4 Crime Prevention through Environmental
Design (CPTED).
We require new development to incorporate CPTED in the
design of streetscapes, sites, open spaces and buildings.
The Specific Plan requires all new development to be
reviewed and approved pursuant to the provisions of the City’s Subdivision Ordinance and Development Plan Review process which provides for review by the City’s Police Department which may require the development to incorporate CPTED in the design of streetscapes, sites, open spaces and buildings.
PARKS AND RECREATION ELEMENT
GOAL PR1: A system of safe and accessible parks that meets the needs of the community.
PR1-5 Acreage Standard.
We strive to provide 5 acres of parkland (public and private) per 1,000 residents.
The project will comply with the City requirement for the payment of an in-lieu fee in amount equivalent to 3 acres of parkland per 1,000 residents to fund the development of public parks and the requirement that each new development provide park acreage on-site equivalent to 2 acres per 1,000 residents.
The Specific Plan includes the provision of private pocket parks in each Planning Area.
PR1-6 Private Parks.
We expect development to provide a minimum of 2 acres of developed private park space per 1,000 residents.
The Specific Plan includes the provision of private pocket parks in each Planning Area with a total acreage provided equivalent to 2 acres of developed private park per 1,000 residents. 537
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PLAN POLICY SPECIFIC PLAN CONSISTENCY
PR1-9 Phased Development.
We require parks be built in new communities before a
significant proportion of residents move in.
Development within the Specific Plan is required to be reviewed and approved pursuant to the City’s Subdivision Ordinance which requires the approval of tentative and final subdivision maps for the project. Conditions of approval associated with the City’s approval of tentative subdivision maps will provide for the timing of construction of parks as part of the development.
PR1-11 Environmental Function of Parks.
We require new parks to meet environmental management
objectives.
The Specific Plan requires all new development to be reviewed and approved pursuant to the provisions of the City’s Subdivision Ordinance and Development Plan Review process which
provides for review by the City’s Planning Department which may require the development to incorporate environmental management objectives into the design of parks.
PR1-12 Trails.
We promote connections between parks and local trails
including those managed by other public agencies.
The Specific Plan is designed for bicycle and pedestrian accessibility provided throughout the community through a network of off-street bike and pedestrian trails that are connected to a Class I Bike Path system. Connectivity to this network of off-street trails from all residential Planning Areas is provided through the local street system as well as a Class I Multi-purpose Trail.
PR1-14 Multi-Family Residential Developments.
We require that new multi-family residential developments of 5 or more units provide recreational facilities or open space, in addition to paying adopted impact fees.
The Specific Plan requires that all condominium and multifamily developments within the project provide private recreational areas and/or pocket parks for residents of the development in addition to the payment by the developer of adopted impact fees.
SOCIAL RESOURCES ELEMENT
GOAL SR2: A range of educational and training opportunities for residents and workers of all ages and abilities that improves their life choices and provides a skilled workforce for our businesses.
SR2-4 Access to Schools.
We work with local and regional partners to improve the safety in and around schools and to improve access for citizens of all ages and abilities to schools and community services, such as after school and other programs.
The Specific Plan does not include a parcel dedicated to a school zone. However, safe access and commute to surrounding schools are achieved through the multi-modal circulation systems within the neighborhoods established through the Design Guidelines.
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ONTARIO, CALIFORNIA
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general plan consistency
PLAN POLICY SPECIFIC PLAN CONSISTENCY
COMMUNITY ECONOMICS ELEMENT
GOAL CE1: A complete community that provides for all incomes and stages of life.
CE1-6 Diversity of Housing.
We collaborate with residents, housing providers and the development community to provide housing opportunities for every stage of life.
We plan for a variety of housing types and price points to encourage the development of housing supportive of our efforts to attract business in growing sectors of the community while being respectful of existing viable uses.
The Specific Plan allows for the development of up to 4,293 residential dwelling units comprised of a variety of singlefamily attached and detached homes. Residential land use areas are linked by a network of street-separated sidewalks and Multipurpose Trails connecting all neighborhoods to parks.
Residential development is designed to address a variety of lifestyles and economic segments of the marketplace, such as singles, families, executives and “empty nesters.”
GOAL CE2: A City of distinctive neighborhoods, districts, corridors and centers where people choose to be.
CE2-1 Development Projects.
We require new development and redevelopment to create
unique, high-quality places that add value to the community.
The Specific Plan includes architectural and landscape Design Guidelines.
CE2-2 Development Review.
We require those proposing new development and
redevelopment to demonstrate how their projects will create appropriately unique, functional and sustainable places that will compete well with their competition within the region.
The Specific Plan requires all new development to be
reviewed and approved pursuant to the provisions of the City’s Subdivision Ordinance and Development Plan Review process which provides for review by the City’s Planning Department which may require the development to demonstrate how
the project will create appropriately unique, functional and sustainable places.
CE2-5 Private Maintenance.
We require adequate maintenance, upkeep and investment
in private property because proper maintenance on private property protects property values.
The Specific Plan includes a Maintenance Responsibility Matrix defining the private responsibilities for maintenance of private roadways, parkways, trails, common areas, parks, yards, walls, and monuments within the project.
CE2-6 Public Maintenance.
We require the establishment and operation of maintenance districts or other vehicles to fund the long-term operation and maintenance of the public realm whether on private land, in rights-of-way or on publicly-owned property.
The Specific Plan includes a Maintenance Responsibility Matrix defining the responsible public entities, including special districts, for maintenance of roadways, sidewalks, traffic signals, off-site and on-site public water, sewer and storm drain infrastructure facilities.
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303 East B Street, Ontario, California 91764 Phone: 909.395.2036 / Fax: 909.395.2420
LAND DEVELOPMENT DIVISION
CONDITIONS OF APPROVAL
Date Prepared: 2/11/2026
File No: PSP24-002
Related Files: N/A
Project Description: A public hearing to consider certification of the Focused Environmental Impact Report (SCH#2025060731), including the adoption of a Mitigation Monitoring and Reporting Program and a Statement of Overriding Considerations, in conjunction with a Specific Plan (File No. PSP24-002 – CenterPark Specific Plan) to establish the land use districts, development standards, guidelines, and infrastructure improvements for the potential development of up to 4,293 residential dwelling units, 115,809 square feet of retail land uses, 135,110 square feet of office uses, and 68 acres of open space parkland/non-recreational uses on approximately 258 acres of land generally bounded by the Southern California Edison (SCE) easement roughly 500 feet north of Ontario Ranch Road, Walker Avenue to the east, Campus Avenue to the West, and southern boundary roughly 1,300 feet north of Eucalyptus Avenue within the proposed MDR (Medium Density Residential) and MU (Mixed Use) districts of the proposed CenterPark Specific Plan and a Development Agreement (File No. PDA25-001) between the City of Ontario and Ontario Ranch Venture I, LLC. and Ontario Ranch Venture II, LLC., to establish the terms and conditions for the associated Specific Plan; (APNs: 1053-301-01, -02; 1053-311-01, -02, 1053-321-01, -02, -03; 1053-331- 01, -02, -03, -04; 1053-341-01, -02; 1053-351-01, -02; 1053-361-01, -02, -03; 1053-371-01, -02; 0216-311- 01,-02, -09; 0216-321-03, -08; 0216-322-03, -04, -10); submitted by RCCD, Inc.
Prepared By: Rafael Torres, Assistant Planner
Phone: 909.395.2979 (direct)
Email: [email protected]
The Planning Department, Land Development Section, conditions of approval applicable to the above-described Project, are listed below. The Project shall comply with each condition of approval listed below:
1.0 Standard Conditions of Approval. The project shall comply with the Standard Conditions for New Development, adopted by City Council Resolution No. 2017-027 on April 18, 2017. A copy of the Standard Conditions for New Development may be obtained from the Planning Department or City Clerk/Records Management Department.
2.0 Special Conditions of Approval. In addition to the Standard Conditions for New Development identified in condition no. 1.0, above, the project shall comply with the following special conditions of approval:
2.1 Specific Plan/Specific Plan Amendment. The following shall be submitted to the Planning Department within 30 days following City Council approval of the Specific Plan/Specific Plan Amendment:
Attachment "B"
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Planning Department – Land Development Division
Conditions of Approval
File No.: PSP24-002
(a) Two copies of the final Specific Plan document.
(b) One complete, unbound copy of the final Specific Plan document. (c) One USB drive, or download link, containing a complete Microsoft Word, or editable, copy of the final Specific Plan document, including original figures, images and all required revisions.
2.2 Additional Fees.
(a) Within 5 days following final application approval, the Notice of Determination (“NOD”) filing fee shall be provided to the Planning Department. The fee shall be paid by check, made payable to the "Clerk of the Board of Supervisors", which shall be forwarded to the San Bernardino County Clerk of the Board of Supervisors, along with all applicable environmental forms/notices, pursuant to the requirements of the California Environmental Quality Act (“CEQA”). Failure to provide said fee within the time specified will result in the extension of the statute of limitations for the filing of a CEQA lawsuit from 30 days to 180 days. 541
ORDINANCE NO. ________
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO,
CALIFORNIA, APPROVING, PURSUANT TO THE CERTIFIED FOCUSED ENVIRONMENTAL IMPACT REPORT (STATE CLEARINGHOUSE NO.
2025060731) FOR THE CENTERPARK SPECIFIC PLAN, THE
CENTERPARK SPECIFIC PLAN (FILE NO. PSP24-002), TO ESTABLISH
THE LAND USE DISTRICTS, DEVELOPMENT STANDARDS, DESIGN
GUIDELINES, AND INFRASTRUCTURE IMPROVEMENTS FOR THE
POTENTIAL DEVELOPMENT OF UP TO 4,293 RESIDENTIAL
DWELLING UNITS, 115,809 SQUARE FEET OF RETAIL USES, 135,110 SQUARE FEET OF OFFICE USES, AND 68 ACRES OF OPEN SPACE
(PARKLAND/NON-RECREATIONAL USES) ON APPROXIMATELY 258
ACRES OF LAND, AND MAKING FINDINGS IN SUPPORT THEREOF – APNS: 1053-301-01, -02; 1053-311-01, -02, 1053-321-01, -02, -03; 1053-331-01, -02, -03, -04; 1053-341-01, -02; 1053-351-01, -02; 1053-361-01, -02, -03; 1053-371-01, -02; 0216-311-01,-02, -09; 0216 321 03, -08; 0216-322-03, -04, -10.
WHEREAS, RCCD, INC. ("Applicant") has filed an Application for the approval of the CenterPark Specific Plan (File No. PSP24-002), as described in the title of this Ordinance (hereinafter referred to as “Application” or “Project”); and WHEREAS, the Application applies to 258 acres of land with 29 parcels and is generally bounded to the north by a Southern California Edison (SCE) easement, to the west by Campus Avenue, to the east by Walker Avenue, to the south by Eucalyptus Avenue, and bisected by Ontario Ranch Road, within the SP (Specific Plan) AG (Agricultural Overlay)) zoning district, and is presently improved with agricultural, dairy, recreational vehicle storage, residential and vacant land uses; and WHEREAS, the properties surrounding the project site are generally established with agricultural uses. To the north of the Project site, the area is within the Specific Plan (SP) zoning district and is developed with dairy farms, livestock, a truck terminal, a nursery, and vacant land. The properties to the south of the Project site are within the SP zoning district and include dairy farms, a truck terminal storage and single-family residential uses. The properties to the east of the Project site are within the SP zoning district and are developed with single-family residential uses and dairy farms. The properties to the west of the Project site are within the SP zoning district and are developed with single-family residential uses, dairy farms and vacant land; and WHEREAS, the CenterPark Specific Plan, attached hereto as "Attachment A", establishes a comprehensive set of design guidelines and development regulations to guide and regulate site planning, landscape, and architectural character, and ensuring that excellence in community design is achieved during project development. In addition, the Specific Plan will establish the procedures and requirements to approve new development within the project site to ensure The Ontario Plan 2050 (“TOP 2050”) goals and policies are achieved; and
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WHEREAS, the CenterPark Specific Plan consists of approximately 258 acres of land, which includes potential development of up to 4,293 residential dwelling units, 115,809 square feet of retail uses, 135,110 square feet of office land uses, and 68 acres of open space (parkland/non-recreational uses); and
WHEREAS, the land use intensity of the CenterPark Specific Plan anticipated in 22 planning areas is consistent with TOP 2050. The Specific Plan proposes a potential buildout of up to 4,293 dwelling units with a land use intensity of 22 dwelling units per acre for Medium-Density Residential (MDR) and Mixed-Use (MU) residential designations. The Specific Plan also proposes ten (10) percent of the office uses with a maximum floor area ratio (“FAR”) of 0.70, twenty (20) percent retail uses with a maximum FAR of 0.30, and seventy (70) percent of residential development with a maximum density of 35 dwelling units per acre, within the Mixed-Use land use areas (Planning Areas 4, 5, 10, and 11). Planning Areas 19, 20, 21, and 22 are designated Open Space – NonRecreational land use and no development is planned for these areas; and WHEREAS, the CenterPark Specific Plan has been prepared in conformance with the goals and policies of the City of Ontario Policy Plan (General Plan). The policy (General Plan) analysis in “Section 9. General Plan Consistency” of the Specific Plan describes the manner in which the CenterPark Specific Plan complies with the Policy Plan goals and policies applicable to the CenterPark Specific Plan; and WHEREAS, the Application is a project pursuant to the California Environmental Quality Act (Public Resources Code Section 21000 et seq.) ("CEQA") and an initial study has been prepared to determine possible environmental impacts; and WHEREAS, a Focused Environmental Impact Report (“FEIR”) (State Clearinghouse No. 2025060731), including the adoption of a Mitigation and Monitoring and Reporting Program (“MMRP”), Findings of Fact, and a Statement of Overriding Considerations, have been prepared in accord with CEQA and the State CEQA Guidelines, and the City of Ontario Guidelines to address the environmental effects of the CenterPark Specific Plan; and
WHEREAS, on March 17, 2026, the City adopted Resolution 2026-017 certifying the FEIR, and adopting the Findings of Fact, a Statement of Overriding Considerations and MMRP; and
WHEREAS, Ontario Development Code Table 2.02-1 (Review Matrix) grants the City Council the responsibility and authority to review and act on the subject Application; and
WHEREAS, the Project has been reviewed for consistency with the Housing Element of the Policy Plan component of The Ontario Plan 2050, 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
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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 applies 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, the proposed Project is located within the Airport Influence Area of Chino Airport, within the City of Ontario boundary, and is subject to, and must be consistent with, the policies criteria set forth in Reference I, Chino Airport Land Use Compatibility Plan (CNO ALUCP), which applies only to jurisdictions within City of Ontario, and addresses the 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 February 24, 2026, the Planning Commission of the City of Ontario conducted a hearing to consider the FEIR, MMRP, Statement of Overriding Considerations, and the Project, and concluded said hearing on that date, voting to issue Resolution No. PC26-015 & PC26-016, recommending the City Council approve the Application; and
WHEREAS, on March 17, 2026, the City Council of the City of Ontario conducted a hearing to consider the Final FEIR, MMRP, Statement of Overriding Considerations, and the Project, and concluded said hearing on that date; and WHEREAS, all legal prerequisites to the adoption of this Ordinance have occurred.
NOW, THEREFORE, IT IS HEREBY FOUND, DETERMINED, AND ORDAINED by the City Council of the City of Ontario, as follows:
SECTION 1. Environmental Determination and Findings. Pursuant to Resolution 2026-017, as the decision-making body for the Project, the City Council has reviewed and considered the information contained in the FEIR, including the CEQA Guidelines Section 15183 Consistency Analysis, as well as the Findings of Fact, the MMRP, and the Statement of Overriding Considerations prepared for the Project and supporting documentation. Based upon the facts and information contained in the FEIR (State Clearinghouse No. 2025060731) and the administrative record, including the CEQA Guidelines Section 15183 Consistency Analysis and all written and oral evidence presented to the City Council, it has certified the FEIR, and approved the Findings of Fact, the MMRP, and the Statement of Overriding Considerations for the Project. 544
SECTION 2. Housing Element Compliance. Pursuant to the requirements of California Government Code Chapter 3, Article 10.6, commencing with Section 65580, as the decision-making body for the Project, the City Council finds that based upon 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. The Project site includes properties listed in the Housing Element Sites Inventory contained in Tables B-1 and B-2 of the Housing Element Technical Report, and the proposed Project is consistent with the number of dwelling units (4,293) and densities (22 du/ac for Medium Density Residential and 35 du/ac for Mixed-Use Residential) specified in the Housing Element Sites Inventory.
SECTION 3. 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 noise, safety, airspace protection, and overflight impacts of current and future airport activity. As the decision-making 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, when implemented in conjunction with the conditions of approval, will be consistent with the policies and criteria set forth within the ONT ALUCP; and (2) On August 2, 2022, the City Council of the City of Ontario approved and adopted a Development Code Amendment to establish the Chino Airport (“CNO”) Overlay Zoning District (“OZD”) and Reference I, Chino Airport Land Use Compatibility Plan (“CNO ALUCP”). The CNO OZD and CNO ALUCP established the Airport Influence Area for Chino Airport, solely within the City of Ontario, and limits future land uses and development within the Airport Influence Area, as they relate to safety, airspace protection, and overflight impacts of current and future airport activity. The CNO ALUCP is consistent with policies and criteria set forth within the Caltrans 2011 California Airport Land Use Planning Handbook. The proposed Project is located within the Airport Influence Area of Chino Airport and was evaluated and found to be consistent with the California Airport Land Use Planning Handbook and the CNO ALUCP. As the decisionmaking body for the Project, the City Council has reviewed and considered the facts and information contained in the Application and supporting documentation against the CNO 545
ALUCP compatibility factors, including Safety, Airspace Protection, Overflight. As a result, the City Council, therefore, finds and determines that the Project, when implemented in conjunction with the conditions of approval, will be consistent with the policies and criteria set forth within the California Airport Land Use Planning Handbook and the Chino ALUCP.
SECTION 4. 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 in Sections 1 through 3 above, the City Council hereby concludes as follows:
(1) The proposed Specific Plan, or amendment thereto, is consistent with the goals, policies, plans and exhibits of the Vision, Policy Plan (General Plan), and City Council Priorities components of The Ontario Plan 2050. The approximately 258-acre CenterPark Specific Plan is suitable for residential and mixed-use developments and is consistent with the goals and policies, plans and exhibits of the Vision, Policy Plan (General Plan), and City Council Priorities components of TOP 2050. “Section 9. General Plan Consistency” of the CenterPark Specific Plan describes the manner in which the Specific Plan complies with the Policy Plan goals and policies; and (2) The proposed Specific Plan, or amendment thereto, would not be detrimental to the public interest, health, safety, convenience, or general welfare of the City. The proposed CenterPark Specific Plan is in conformance with the Land Use Policies and Goals of the Policy Plan and will provide standards and guidelines for the harmonious development within the districts, in a manner consistent with the Policy Plan.
The Specific Plan is proposing residential and mixed use (office, retail and residential) development for the approximately 258-acre site, which is what is mandated by the land use plan of the Policy Plan; therefore, the proposed residential and mixed-use land uses will not be detrimental to the public interest, health, safety, convenience, or general welfare of the City because it will provide land uses that are consistent with the existing and future development of the surrounding area; and
(3) In the case of an application affecting specific property(ies), the proposed Specific Plan, or amendment thereto, will not adversely affect the harmonious relationship with adjacent properties and land uses. The proposed Specific Plan will modify the land use from agricultural, dairy farm, recreational vehicle storage, residential and vacant land uses to Residential and Mixed Use, which aligns with surrounding land uses planned in TOP 2050 and allows for similar development intensities under the Residential and Mixed-Use designation; and
(4) In the case of an application affecting specific property(ies), the subject site is physically suitable, including, but not limited to, parcel size, shape, access, and availability of utilities, for the request and anticipated development. The proposed Specific Plan will allow for residential and mixed-use on the subject site. When in conformance with the Specific Plan, the project site is suitable in size and shape, and the project site design allows for sufficient access and availability of utilities to accommodate the anticipated development.
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SECTION 5. City Council Action. Based upon the findings and conclusions set forth in Sections 1 through 3, above, the City Council hereby APPROVES the herein described CenterPark Specific Plan, attached hereto as "Attachment A," and incorporated herein by this reference, and subject to the Conditions of Approval.
SECTION 6. 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 7. 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 8. Notice of Determination. City Council hereby directs staff to file a Notice of Determination with the County Clerk and the State Clearinghouse regarding approval of the Project pursuant to the FEIR.
SECTION 9. 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 10. Effective Date. This Ordinance shall become effective 30 days following its adoption.
SECTION 11. 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 15 days following 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. 547
PASSED, APPROVED, AND ADOPTED this ________ day of _________ 2026. _____________________________________
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 _____________ and adopted at the regular meeting held ___________, 2026 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 ____________ 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. PSP24-002;
CenterPark Specific Plan
(Document follows this page)
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Department: Economic Development
Prepared By: Jennifer Hiramoto
Staff Member Presenting: Jennifer McLain
Hiramoto, Economic Development Director
Approved By:
Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 14
SUBJECT: A REIMBURSEMENT AGREEMENT FOR CERTAIN IMPROVEMENTS BETWEEN THE
CITY OF ONTARIO AND ADEPT DEVELOPMENT LLC
CITY OF ONTARIO
Agenda Report
April 7, 2026
SECTION:
CONSENT CALENDAR
RECOMMENDATION: That the City Council adopt a Resolution authorizing the City Manager or Designee to Negotiate a Reimbursement Agreement ("Agreement") between the City of Ontario ("City") and Adept Development, Inc. ("Developer"), and authorize the City Manager to execute the Agreement and all other documents required for implementation of the Agreement.
THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:
Invest in the City's Infrastructure (Water, Streets, Sewers, Parks, Storm Drains and Public Facilities)
Focus Resources in Ontario's Commercial and Residential Neighborhoods Invest in the Growth and Evolution of the City's Economy FISCAL IMPACT: The Agreement will provide for reimbursement of actual documented infrastructure-related costs up to $3,500,000. If approved, additional appropriations will be included in the Capital Projects Fund at the next quarterly update to City Council as needed.
BACKGROUND & ANALYSIS: The City and Developer entered into a Development Agreement and Ground Lease on July 19, 2022, for the development of an intense urban high density mixed-use project located immediately adjacent to the Toyota Arena. The first phase of a project is currently under construction and includes development of ground floor retail and restaurants, with four levels of residential apartments above. The City is also continuing to enhance infrastructure to support the increasing demands at the Arena, including a public plaza, parking structures, and plans for a future entertainment district.
In order to adequately power this project and surrounding planned improvements near the Toyota Arena and Piemonte Overlay, Southern California Edison is requiring the addition of significant electrical infrastructure upgrades. As a result of the Developer's ability and desire to install the improvements in an expedited manner to ensure that the project area has power upon completion of the first phase, scheduled to be done in December 2026, staff recommends that the Developer undertake the following improvements and be reimbursed for their portion of the cost. This work includes:
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• Underground trenching and conduit installation
• Civil improvements and vault structures
• Electrical duct bank extensions
• Capacity upgrades extending toward the Genamic Substation • Southern California Edison (SCE) design and installation services The total cost of the electrical infrastructure improvements is approximately $3,500,000. A portion of these costs will be reimbursed by SCE upon completion. The net cost is approximately $2,807,000 to the City and $693,606 for the Developer. The Developer will be reimbursed directly for their costs.
552
RESOLUTION NO. ________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,
CALIFORNIA, APPROVING A REIMBURSEMENT AGREEMENT
BETWEEN THE CITY OF ONTARIO AND OTC LOT A OWNER, LLC, FOR
COSTS ASSOCIATED WITH THE CONSTRUCTION OF CERTAIN
PUBLIC IMPROVEMENTS.
WHEREAS the City of Ontario (“City”) and OTC LOT A OWNER LLC, a Delaware limited liability company (“Developer”) have entered into that certain Development Agreement dated as of July 19, 2022, as amended by that certain First Amendment to Development Agreement dated December 27, 2024, collectively “the Development Agreement”; and
WHEREAS the Developer is responsible for ensuring adequate and appropriate public utility service to the mixed-use and entertainment improvements (including parking structures) contemplated under the terms of the Development Agreement; and WHEREAS the project subject to the Development Agreement is situated in a geographical area of the City critical to the City’s overall economic development efforts, and adjacent to an important residential and commercial corridor and larger entertainment complex. The City’s general plan (“The Ontario Plan”) envisions significant development in the area, all of which will require upgraded and new electrical infrastructure; and WHEREAS the Developer has worked closely with Southern California Edison to determine the electrification necessary to service the project and the surrounding area.
The results of that effort are reflected in a letter from the Developer to the City dated March 24, 2026, attached hereto as Exhibit “A”;
WHEREAS the City has a separate, standalone Capital Improvement Program project under which the City intends to upgrade and install public improvements on, in, and under the property subject to the Development Agreement relating to electrical service (“Public Improvements”). These Public Improvements will ultimately benefit the property, as well as the surrounding areas, facilitating development in accordance with The Ontario Plan; and
WHEREAS Developer is willing and able to upgrade and install the Public Improvements faster than City can. Therefore, City and Developer have negotiated a reimbursement agreement to reimburse Developer for an amount not to exceed $3.4 million to offset actual documented infrastructure-related costs associated with construction of the Public Improvements, a copy of which is attached hereto as Exhibit A and incorporated herein by this reference (the "Reimbursement Agreement"); and WHEREAS, based on information provided by City staff, and other such written and oral evidence as presented to the City, the City finds and determines that the allocation of funds to Developer pursuant to the Reimbursement Agreement is reasonably related to a legitimate governmental purpose in that the Public Improvements will assist the City for the reasons set forth above; and
553
WHEREAS, all other legal prerequisites to the adoption of this Resolution have occurred.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Ontario as follows:
SECTION 1. Incorporation of Recitals, the foregoing recitals are true and correct, and are incorporated herein and made an operative part of this Resolution.
SECTION 2. Approval of Reimbursement Agreement, the City Council hereby approves the Reimbursement Agreement, in substantially the form attached to this Resolution as Exhibit "A," and authorizes and directs the City Manager to sign and enter into the Reimbursement Agreement and perform all obligations of the City pursuant to the Reimbursement Agreement.
SECTION 3. Severability, if any provision of this Resolution is held invalid, the remainder of this Resolution shall not be affected by such invalidity, and the provisions of this Resolution are severable.
SECTION 4. 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.
PASSED, APPROVED, AND ADOPTED this 7
th day of April 2026.
PAUL S. LEON, MAYOR
ATTEST:
SHELIA MAUTZ, CITY CLERK
APPROVED AS TO LEGAL FORM:
BEST BEST & KRIEGER LLP
CITY ATTORNEY
554
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. 2026- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held April 7, 2026 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. 2026- duly passed and adopted by the Ontario City Council at their regular meeting held April 7, 2026. _____________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
555
.\44881026.1
REIMBURSEMENT AGREEMENT
(ARENA DISTRICT NORTH ELECTRIFICATION)
This Reimbursement Agreement (“Agreement”) is dated as of April __, 2026 by and between the CITY OF ONTARIO, a California municipal corporation (“City”), and OTC LOT A OWNER LLC, a Delaware limited liability company, having an address at 388 Cordova Street, #280, Pasadena, California 91101 (“DEVELOPER”). City and DEVELOPER are sometimes referred to herein as the “Parties” or individually as a “Party.” City and DEVELOPER enter into this Agreement with reference to the following recitals of fact (each, a “Recital”):
RECITALS
A. City and Developer have entered into that certain Development Agreement dated as of July 19, 2022 by and between Developer and the City and recorded in the Official Records of San Bernardino County on August 12, 2022 as Document No. 2022-0282877, as amended by that certain First Amendment to Development Agreement dated December 27, 2024 and recorded in the Official Records of San Bernardino County on DATE as Document No. __________, collectively “the Development Agreement.”
B. The Developer is responsible for ensuring adequate and appropriate public utility service to the mixed-use and entertainment improvements (including parking structures) contemplated under the terms of the Development Agreement.
C. The project subject to the Development Agreement is situated in a geographical area of the City critical to the City’s overall economic development efforts, and adjacent to an important residential and commercial corridor and larger entertainment complex. The City’s general plan (“The Ontario Plan”) envisions significant development in the area, all of which will require upgraded and new electrical infrastructure.
D. The Developer has worked closely with Southern California Edison to determine the electrification necessary to service the project and the surrounding area. The results of that effort are reflected in a letter from the Developer to the City dated March 24, 2026, attached hereto as Exhibit “A”.
E. The City has a separate, standalone Capital Improvement Program project under which the City intends to upgrade and install public improvements on, in, and under the property subject to the Development Agreement relating to electrical service, which are described in Exhibit “B,” which is attached hereto and incorporated herein by reference (“Public Improvements”).
These Public Improvements will ultimately benefit the property, as well as the surrounding areas, facilitating development in accordance with The Ontario Plan.
F. However, it has come to City’s attention that Developer is willing and able to upgrade and install the Public Improvements faster than City can. Therefore, City and Developer desire to enter into this Agreement in order for Developer to upgrade and install the Public Improvements, and in order for City to reimburse Developer for certain expenses related thereto in accordance with the terms of this Agreement.
556
.\44881026.1
NOW THEREFORE, in consideration of the mutual covenants set forth herein and the mutual benefits to be derived therefrom, the Parties agree as follows:
TERMS
1. Incorporation of Recitals. The Parties agree that the Recitals constitute the factual basis upon which City and Developer have entered into this Agreement. City and Developer each acknowledge the accuracy of the Recitals and agree that the Recitals are incorporated into this Agreement as though fully set forth at length.
2. Reimbursement of Costs. In light of the benefit the Public Improvements will provide to the City, City intends to provide, through this Reimbursement Agreement, total funding of up to $3.4 million (“City Financial Consideration”) to offset actual documented infrastructure-related costs associated with construction of the Public Improvements. Developer warrants that City will be reimbursed approximately $693 thousand, as reflected in Exhibit A, resulting in a total net cost to the City of $2.74 million. The City shall not under any circumstances reimburse Developer for any amount greater than the City Financial Consideration.
2.1 In order to receive the City Financial Consideration Developer shall submit to the City a written request for funds up to the amount of the City Financial Consideration (“Payment Request”). The City shall review the Payment Requests, and if approved, the City shall authorize and pay such Payment Request to Developer within thirty (30) days thereafter. The City’s approval shall be given if the City determines, in the exercise of its judgment, reasonably exercised, that the costs set forth on the Payment Request are reasonable and customary. The City’s obligation to approve a Payment Request shall be contingent upon the City’s receipt and approval, which shall not be unreasonably withheld or delayed, of the following, if applicable:
(a) The Payment Request, which shall include a description of the work performed, material supplied and cost associated therewith; (b) Conditional waivers and releases of mechanics’ liens, stop notice claims or other lien claim rights;
(c) Bills, invoices, vouchers, statements, contracts, bid specifications and responses and all other documents evidencing the amount paid by Developer for the preceding month;
(d) Evidence of inspection and acceptance by the City’s Building Department of the Improvements to which the Payment Request pertains or evidence of approval of all required plans by the City’s Building Department for the Improvements; and (e) Any other document, requirement, evidence or information in Developer’s possession or control that City may reasonably request.
2.2 The City may, at its cost, cause an inspection of the work and a verification of the work completed. Developer shall inspect the Public Improvements regularly and confirm the Payment Request and conditional waivers and releases (described in subsection (b) above) are accurate and submitted timely.
557
.\44881026.1
3. Prevailing Wage Obligation. Developer acknowledges that the use of public funding for the Public Improvements triggers prevailing wage obligations for the construction of the Public Improvements. Developer shall comply with the applicable prevailing wage requirements and indemnify City for any prevailing wage obligations associated with the construction of the Public Improvements.
4. Developer’s Obligation to Construct Public Improvements. In complete satisfaction of Developer’s obligations under the Development Agreement and this Agreement and in consideration for City’s reimbursement obligations under this Agreement, Developer shall, at its sole cost, expense and liability, construct the Public Improvements. Developer shall construct the Public Improvements in accordance with plans and specifications to be approved by the City, in accordance with then-current City standards and policies pursuant to Section 7.1.2 herein.
5. Project Description. City and Developer agree the project is envisioned as set forth in Exhibit A, which is incorporated herein by reference.
6. Property Ownership. The Public Improvements shall be owned by the City of Ontario, and the Parties intend for the City to remain the fee title owner of the underlying Property, unless and until title passes to Developer in accordance with the terms of the Development Agreement.
7. Developer to Obtain all Approvals for the Public Improvements.
7.1.1 California Environmental Quality Act (CEQA) Compliance. The City and Developer acknowledge that the proposed Public Improvements may be subject to CEQA and that this Agreement in no way commits the City to the approval on any project or CEQA determination related to the proposed Public Improvements. Developer agrees that an initial study will be prepared pursuant to CEQA and the appropriate environmental documents shall be prepared prior to project commencement of the proposed Public Improvements. Developer shall be responsible for all costs associated with the preparation of the CEQA documents.
7.1.2 City Reservation of Discretion and Compliance with Applicable Law. It is understood that the City reserves the right to exercise discretion as to all matters, which the City is by law entitled to or required to exercise its discretion. The City’s zoning, building and land use regulations (whether contained in ordinances, the City’s municipal code, conditions of approval or elsewhere), shall be applicable to the construction of the Public Improvements by Developer . In addition, any agreements, amendments or approvals processed for City Council approval will be subject to and brought to City Council for consideration in accordance with applicable legal requirements.
8. Assignability. This Agreement may not be assigned by either Party without the prior and express written consent of the other Party, which consent shall not be unreasonably withheld or delayed. Any attempted assignment of this Agreement not in compliance with the terms of this Agreement shall be null and void and shall confer no rights or benefits upon the assignee.
9. Termination. City may terminate this Agreement for cause or no cause upon thirty (30) days prior written notice. Developer shall only terminate this Agreement for cause.
10. City’s Remedies Upon Developer’s Default. If Developer fails to complete construction of 558
.\44881026.1
the Public Improvements in the manner required by this Agreement, subsequent agreements, and the Development Agreement, then City may send written notice to Developer directing Developer to cure the default. Developer shall have fifteen (15) calendar days following its receipt of the notice to cure or to commence to cure the default under this Agreement. For purposes of this Agreement, “commence to cure” means that Developer begins to cure the default within the 15- day time period and diligently completes cure of the default within a reasonable time, which time shall not exceed sixty (60) calendar days following Developer’s receipt of the notice. If Developer fails to cure or to commence to cure the default as required by this Section 10, City may immediately exercise any right or remedy available to it at law or in equity, including but not limited to Termination pursuant to Section 9 herein. At such time, City shall have no obligation to reimburse Developer for those costs set forth in Section 2 herein and shall recover from Developer the amount of any reimbursements paid to Developer as part of City’s obligations under this Agreement.
11. Notice. Any and all notices submitted by any Party to another Party pursuant to or as required by this Agreement shall be proper, if in writing and dispatched by messenger for immediate personal delivery, nationally recognized overnight (one Business Day) courier (i.e., United Parcel Service, Federal Express, etc.) or by registered or certified United States mail postage prepaid, return receipt requested, to the address of the recipient Party, as designated below.
Notice may be sent in the same manner to such other addresses as either Party may from time to time designate by notice in accordance with this Section 11. Notice shall be deemed received by the addressee, regardless of whether or when any return receipt is received by the sender or the date set forth on such return receipt, on the day that the notice is dispatched by messenger for immediate personal delivery, one Business Day after delivery by a nationally recognized overnight carrier, or two (2) calendar days after the notice is placed in the United States mail, regular or certified, postage prepaid, in accordance with this Section 11. Any attorney representing a Party may give any notice on behalf of such Party.
To Developer : [INSERT]
With courtesy copy to: [INSERT]
To City: City of Ontario
303 East “B” Street
Ontario, California 91764
Attention: City Manager
With courtesy copy to: Best Best & Krieger, LLP
2855 E. Guasti Rd., Suite 400
Ontario, California 91764
Attention: Ruben Duran, Esq.
12. No Oral Modifications. This Agreement may be modified, only in writing signed by the authorized representatives of both City and Developer.
13. Binding Upon Successors. This Agreement and each of its terms shall be binding upon City and Developer and their respective officers, elected officials, employees, agents, contractors, and 559
.\44881026.1
permitted successors and assigns.
14. No Third Party Beneficiaries. This Agreement is entered into solely for the benefit of the Parties. No person or entity has any rights or remedies under this Agreement.
15. Attorneys’ Fees. In the event that any action or proceeding, including arbitration, is commenced by either City or Developer against the other to establish the validity of this Agreement or to enforce any one or more of its terms, the prevailing party in any such action or proceeding shall be entitled to recover from the other, in addition to all other legal and equitable remedies available to it, its reasonable attorneys’ fees and costs of litigation, including, without limitation, filing fees, service fees, deposition costs, arbitration costs and expert witness fees, including actual costs and reasonable attorneys’ fees on appeal.
16. Indemnification. Developer hereby agrees to indemnify, defend and save City harmless from any and all liability, damage, expense, causes of action, suits, claims or judgments of any nature, including attorneys’ fees, arising from injury or death to persons, or damage to property arising out of or in any way connected with the negligent acts, errors or omissions or willful misconduct by Developer or Developer’s officers, agents, employees, independent contractors or subcontractors relating in any manner to this Agreement, except if caused by the sole negligence or willful misconduct of City.
17. Jurisdiction and Venue. This Agreement is executed and is to be performed in San Bernardino County, California, and any action or proceeding brought relative to this Agreement shall be heard in the appropriate court in the County of San Bernardino, California. City and Developer each consent to the personal jurisdiction of the court in any such action or proceeding.
18. Severability. If any term or provision of this Agreement is found to be invalid or unenforceable, City and Developer both agree that they would have executed this Agreement notwithstanding the invalidity of such term or provision. The invalid term or provision may be severed from the Agreement and the remainder of the Agreement may be enforced in its entirety.
19. Headings. The headings of each Section of this Agreement are for the purposes of convenience only and shall not be construed to either expand or limit the express terms and language of each Section.
20. Representations of the Parties. Each person signing this Agreement on behalf of a Party which is not a natural person hereby represents and warrants to the other Party that all necessary legal prerequisites to that Party’s execution of this Agreement have been satisfied and that he or she has been authorized to sign this Agreement and bind the Party on whose behalf he or she signs.
21. Delegation to City Manager. The City Manager is hereby delegated the authority to negotiate and execute any and all necessary modifications to this Agreement or separate agreements and other documentation in accordance with applicable law in order to effectuate the Parties’ intent, provided the City Financial Consideration is not increased and the parameters are set forth in Exhibit A are satisfied.
[Signatures on Following Pages]
560
.
\44881026.1
561
.\44881026.1
Dated:
Dated:
Developer :
OTC OWNER LOT A LLC, a
Delaware limited liability company
By:
Name:
Its:
By:
Name:
Its:
Dated:
CITY:
CITY OF ONTARIO, a California
municipal corporation
By:
Name: Scott Ochoa
Its: City Manager
ATTEST:
By:
City Clerk
APPROVED AS TO FORM:
BEST BEST & KRIEGER LLP
By:
City Attorney
562
.\44881026.1
Exhibit “A”
Public Improvements
563
adept development
388 Cordova Street, Suite 280
Pasadena, CA 91101
o: 626.304.0800
www.adepturban.com
1 of 3
3/24/2026
City of Ontario
303 East B Street
Ontario, CA 91764
Subject: Adept x Ontario Electrical Infrastructure Cost Allocation Dear Mr. Ochoa,
We are writing to provide a formal summary of the Southern California Edison (SCE) utility improvements required to serve the surrounding parcels within the Ontario Arena District, and to outline the proposed cost allocation between the City of Ontario and Adept for Lot A.
Energizing the District requires the completion of SCE Work Orders #1 and #2, along with associated design and installation costs billed directly by Edison. These improvements will create long-term capacity for the broader Arena District, including parcels not currently under development.
Project Overview
The required work includes:
• Underground trenching and conduit installation
• Civil improvements and vault structures
• Electrical duct bank extensions
• Capacity upgrades extending toward the Genamic Substation • Southern California Edison design and installation services Per the attached marked SCE final design for Work Order #1, our utility consultants (SCU Solutions) separated the improvements into two categories:
• District-wide capacity upgrade and infrastructure (highlighted in blue) • Lot A specific infrastructure (highlighted in green)
SCU’s analysis determined that the Work Order #1 scope and associated costs are allocated 91.3% to district infrastructure benefiting surrounding parcels and future Arena District development, and 8.7% attributable solely to Lot A.
Work Order #2, in SCU’s professional opinion, benefits all lots and is therefore considered part of the broader infrastructure system.
Cost Allocation
The total cost of the electrical infrastructure improvements is approximately $3.7M, which includes civil trenching, SCE Work Orders #1 and #2, and associated City engineering fees. A portion of these costs will be reimbursed by SCE upon completion, totaling approximately $732K, and allocated proportionally 564
2 of 3
between the City and Lot A. After applying these reimbursements, the net cost is approximately $2.74M for the City and $257K for Lot A.
Based on SCU’s infrastructure benefit analysis, the costs are allocated between the City of Ontario and Lot A as shown below:
The City Engineering plan check fees relate to easements required for the electrical trenching within City right-of-way. Because the easements facilitate the same district serving electrical infrastructure improvements, the associated plan check costs are allocated consistent with the civil trenching scope described above.
The rational for this allocation is that the majority of the infrastructure being constructed establishes longterm electrical capacity and reliability for the District. While these upgrades are triggered by the initial development, they serve as district-wide improvements rather than single-parcel service connections.
Contractor Bid Summary
Adept solicited competitive bids from qualified contractors for the trenching and conduit installation work associated with Work Orders #1 and #2. Following a review of proposals and a meeting with all teams, 565
3 of 3
Northwest Excavating was selected as the preferred contractor based on their strong team, efficient schedule, competitive pricing, and comprehensive scope coverage. A summary of the bids received to date is provided below:
Public Benefit and District Impact
These improvements:
• Increase substation capacity serving the Arena District • Establish duct bank infrastructure to support future development • Provide long term electrical resiliency
• Reduce the need for redundant future trenching
• Enable coordinated district growth rather than isolated parcel upgrades In short, the majority of the infrastructure investment creates lasting public utility benefit beyond Adept’s development footprint.
Exhibits Included
• SCE Work Order Overview Map, pg. 4
• SCE Work Order #1 Invoice, pg. 5
• SCE Work Order #2 Invoice, pg. 8
• SCE Easement Documents, pg. 11, pg. 18
• Contractor Trenching Bid Proposals, pg. 34
• SCU Solutions Marked Work Order #1 Final Design, pg. 67 • SCE Work Order #2 Final Design, pg. 71
We are happy to walk through the design, cost breakdown, and methodology in detail at your convenience.
Thank you for your continued partnership in advancing the Arena District.
Sincerely,
Patrick Chraghchian
President
Adept
566
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-& .
%
% - &*
%
570
Description Amount
Service Request Number: 4017527 Project:
R15 - ADEPT LOT A - OFFSITE REINFORCEMENT WO2 - APP
DSGN & SCE INSTALL
TR-PM17978 - E 4TH ST TO 6TH ST HM TRCT ONTARIO CA
91764
Install - Billing Option: SCE INSTALL - REFUNDABLE
388 CORDOVA ST
PASADENA CA 91101
Telephone: (714)-895-0614
OTC LOT A OWNER, LLC
SCE Contact: Deandra R Wright
Invoice Date: 03/11/2026
1351 EAST FRANCIS STREET
ONTARIO CA 91761
Southern California Edison Company
Document # 7590699714
Invoice # 617255
Item # 653395
Design #: 1888443 R15 - ADEPT LOT A - OFFSITE REINFORCEMENT WO2 - APP DSGN & SCE
INSTALL
2465333 - LINE EXTENSION
Product: $333,228.95
Previous Payment $0.00
* Effective January 1, 2025 all projects containing Mixed Fuel will be billed as an estimate and then trued up to actual cost once construction is completed.
* Enclosed are two copies of your invoice. Please return one copy of the invoice with your payment to Accounts Receivable in the enclosed return-addressed envelope. The other copy of the invoice is for your records. * ALL PRICES ARE APPLICABLE FOR A PERIOD OF 90 DAYS FROM THIS DATE AND ARE SUBJECT TO CHANGE THEREAFTER.
* All payments must be delivered by mail, an alternate postal method, or one of our electronic payment options.
Walk-in payments are no longer accepted at any SCE location, including Accounts Receivable. * Please complete all applications and/or contracts and return to your planning office, using the enclosed return-addressed envelope.
* For the Refundable and Discount Option appendices, choose only one option. Sign "Has Chosen" on the appropriate option and sign "Has Not Chosen" on the other option. Only sign each form once. Return both forms in the enclosed self-addressed envelope.
* If a street light work order is associated with this project, contracts for that project will be enclosed. * Easement documents will be mailed directly to you from our Right of Way department. Please complete and return them as soon as possible, as we will not be able to proceed with the project without clearance * Call the Edison company at 1-800-655-4555 to make application for electrical service. * An Edison Inspector must approve all underground systems. Please call your designated inspector 48 hours prior to construction to schedule an inspection.
* Final electrical inspection from the local governmental building and safety department must be received before we can energize your service.
* By paying this invoice, customer acknowledges and agrees that if this project is canceled by customer for any reason or customer does not proceed with the project completion. * Any expense incurred by SCE, including, but not limited to, expenses related to engineering, inspection and construction, prior to the project cancellation or completion will be deducted from any applicable refund due to the customer.
* To ensure worker and public safety, please maintain the appropriate clearance distance from utility infrastructure during your construction project to avoid encroachments that may result in serious injury or damage. * If relocation of existing utility infrastructure is pending, please adjust your work around the proposed relocation schedule as appropriate. If you have any questions, please contact the designated SCE representative assigned to your project.
.
$ 333,228.95
COMMENTS:
TOTAL PROJECT INVOICE AMOUNT:
Docusign Envelope ID: 3150F64A-EB5B-494E-BE7E-633BCF800E2F 571
Description Amount
Service Request Number: 4017527 Project:
R15 - ADEPT LOT A - OFFSITE REINFORCEMENT WO2 - APP
DSGN & SCE INSTALL
TR-PM17978 - E 4TH ST TO 6TH ST HM TRCT ONTARIO CA
91764
Install - Billing Option: SCE INSTALL - REFUNDABLE
388 CORDOVA ST
PASADENA CA 91101
Telephone: (714)-895-0614
OTC LOT A OWNER, LLC
SCE Contact: Deandra R Wright
Invoice Date: 03/11/2026
1351 EAST FRANCIS STREET
ONTARIO CA 91761
Southern California Edison Company
Document # 7590699714
Invoice # 617255
Please detach and return payment stub with payment
Payment
Stub
OTC LOT A OWNER, LLC
388 CORDOVA ST
PASADENA CA 91101
Please pay total amount now due:
$ 333,228.95
Thank you for paying promptly
Make check payable to Southern California Edison
Document # 7590699714
ATTN: Remittance Processing
PO Box 800
Rosemead, CA 91771-001
ADDITIONAL PAYMENT INSTRUCTIONS:
If paying by check, please follow instructions on payment stub JP Morgan Chase Bank
New York, NY
ABA#: 021000021 - Acct#: 323-394434
SCE Taxpayer ID No. 95-1240335
Document #: 7590699714
SCE Contact:
Southern California Edison
Attn: Remittance Processing
G.O. 1 Ground Floor, Room G53
2244 Walnut Grove Ave.
Rosemead, CA 91770
Deandra R Wright
Instructions for wire or ACH payments:
*** Failure to properly identify your document number and SCE contact may delay the application of funds and initiation of your project
Special Instructions for overnight delivery methods:
Docusign Envelope ID: 3150F64A-EB5B-494E-BE7E-633BCF800E2F 572
LOC. W.O. A.I.
APPENDIX A - REFUNDABLE OPTION
ELECTRIC LINE EXTENSION AGREEMENT
JOB #
03/17/2026
LINE EXTENSION 2465333
1. SCE RULE 16 COST TO SERVE
(A) SCE RULE 16 COST TO SERVE
(B) LESS APPLICANT ALLOWANCES
(C) EXCESS RULE 16 COST TO (LINE 5. (A))
(D) EXCESS ALLOWANCES TO (LINE 2.)
SCE COST TO SERVE RULE 15
(E) OVERHEAD 0 FEET X $.00 UNIT COST $.00
(F) UNDERGROUND
(G) PROJECT SPECIFIC ( IF 2X UNIT COST OR COMPETITIVE BID ) (H) TOTAL SCE RULE 15 COST TO SERVE
0 FEET X $.00 UNIT COST $.00
2 . APPLICANT ALLOWANCES (FROM LINE 1. (D) )
3 . REFUNDABLE :
(A) SCE RULE 15 COST TO SERVE (LINE 1 . (H) )
(B) PLUS ESTIMATED VALUE OF STRUCTURES
(C) SUBTOTAL ( LINE 3 . (A) + 3 . (B) )
(D) LESS ALLOWANCE ( LINE 2 )
(E) REFUNDABLE AMOUNT ( LINE 3 . (C) - 3 . (D) )
(F) PLUS REFUNDABLE ITCC* ON LINE 3. (E)
(G) TOTAL AMOUNT ( LINE 3 . (E) + 3 . (F) )
4 . PAYMENT OPTION SELECTED : REFUNDABLE HAS CHOSEN : SIGN (A) REFUNDABLE OPTION : LINE 3 . (G)
1 )
2 )
3 )
VALUE OF STRUCTURES :
REFUNDABLE PAYMENT :
AMOUNT SUBJECT TO REFUND/CREDIT
5 . OTHER NON-REFUNDABLE ADVANCES & CREDITS
(A) OTHER NON-REFUNDABLE CHARGES
( RULE 16 , FLAT RATE , INSPECTION , R/W , ETC . )
(B) ITCC* ON OTHER NON-REFUNDABLE
(C) ITCC* ON APPLICANT FURNISHED FACILITIES
(D) INSTALLED COST OF SUBSTRUCTURE BY SCE
(E) LESS APPLICANT DESIGN OR REIMBURSABLE CREDITS
(F) TOTAL NON-REFUNDABLE ( LINE 5 . (A) THRU 5 . (D) - 5 . (E) ) (G) TOTAL CREDITS ( LINE 5 . (E) - 5 . (A) THRU 5 . (D) ) 6 . AMOUNT TO BE PAID BY APPLICANT TO SCE
7 . AMOUNT TO BE REFUNDED TO APPLICANT UPON FULFILLMENT OF ALL
CONTRACTUAL OBLIGATIONS
HAS NOT CHOSEN : SIGN
* INCOME TAX COMPONENT OF CONTRIBUTION
$0.00
$0.00
$0.00
$0.00
$205,844.24
$205,844.24
$0.00
$205,844.24
$114,289.20
$320,133.44
$0.00
$320,133.44
$76,832.00
$396,965.44
$396,965.44
$114,289.20
$282,676.24
$396,965.44
$9,712.60
$2,331.02
$40,041.09
$0.00
$1,532.00
$52,084.71
$0.00
$333,228.95
$0.00
Docusign Envelope ID: 3150F64A-EB5B-494E-BE7E-633BCF800E2F 573
574
575
576
577
578
579
580
581
582
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584
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596
NORTHWEST EXCAVATING INC.
CONTRACTORS
UNDERGROUND UTILITIES / STREET LIGHTING
SINCE 1959
18201 NAPA STREET NORTHRIDGE, CALIFORNIA 91325 (818) 349-5861 FAX: (818) 701-9326 Friday, March 20, 2026
ADEPT
380 Cordova St., Suite 280
Pasadena, CA 91101
Attn: Jasper Joseph
Ref: 4000 Ontario Center Pkwy
We hereby agree to furnish all labor, materials and equipment for the completion in a good and workmanlike manner, of work described below known as 4000 Ontario Center in Ontario, CA per the Final SCE plan #1701312_0.01 (WO#1) last revised on 12/09/25 and the Final SCE plan #1888443_0.01 (WO#2) dated 02/18/26.
Our proposal includes:
Excavation, installation and backfill for the construction of (7) 7’x14’x8’ SCE vaults, (1)5’x10.5’x7’ SCE PME vault, (1) 7’x14’x11’ SCE vault/pad, (4) 10’x12’ SCE slab boxes, (1) 4’x6’ SCE pad and (1) 66”x72” SCE pad.
Excavation, installation and backfill for the construction of SCE conduits per SCE standards (approx. 6,155 linear feet of trench). All required concrete encasement and slurry backfill. Saw cutting, removal, disposal and restoration of existing asphalt/concrete street and concrete sidewalk. Asphalt restoration to be per city of Ontario standards. Concrete restoration to be for removed or damaged panels only.
Traffic control setup and take down per the latest edition of the WATCH manual or approved traffic control plans. Includes engineered traffic control plans.
All necessary steel plates and trench shoring. Includes recessed steel plates on Sixth St and on Fourth St.
597
Our proposal excludes:
Protective bollards around SCE pad.
SCE cable trenches.
Tree trimming or removal if required.
Any work inside electrical room. Conduits will be stubbed outside any building wall.
Any asphalt/concrete restoration outside of the requirements in the city standards.
Recessed steel plates on Cleveland Ave and on Ontario Center Pkwy.
The Owner is to keep all trades clear of all areas to be worked by Northwest Excavating, Inc., including the materials and equipment.
The Owner is to pay for all permits fees.
Material pricing is good for 90 days.
All excess soil generated from work is to be backfilled with or exported out to a dump site.
If any abnormal soil conditions should occur, such as rock trenching that hampers normal digging and backfilling with a John Deere 410 backhoe or equivalent, it shall be considered an extra cost to the contract. When the use of a ripper bucket or hoe-ram is employed, the cost of such items shall be borne by the Owner and billed on a T&M basis, over and above the contract price.
The Owner is to furnish and pay for water, including a water meter.
Our proposal includes two move-ins only. Additional move on’s will be billed as an extra at $1,500.00 per occurrence.
Permanent barricades and retaining walls to be built by other contractors.
All dewatering to be on a T & M basis if groundwater is encountered.
598
Any re-excavating or repair of damaged trenches caused by rain when left open trenches to accommodate the schedule of others will be billed on a T&M basis.
Our proposal is for regular working hours only. Any overtime, night or weekend work will be billed as an extra.
Our proposal is based on prevailing wages.
Our proposal does not include any bonds.
Retention is due 35 days after final acceptance of work contracted to Northwest Excavating, Inc. has been accepted by all applicable agencies.
GRAND TOTAL (WO#1) = $1,320,000.00
GRAND TOTAL (WO#2) = $1,355,000.00
REPLACE (6) TRAFFIC LOOPS = $5,400.00
Thank you,
Oscar Rodriguez
Northwest Excavating, Inc.
Contractor License - 521572
Acceptance, (By Owner, Agent or General Contractor) I/we accept the within proposal/bid. You are authorized to perform the work comprehended hereunder and I/we agree to pay the said amount in accordance with the terms set forth.
Date: ____________________
Name/Title: _________________________________
Signature: ___________________________________
599
Trenchers West Construction Co., Inc.
520 S. Claudina St, Suite A
Anaheim, Ca 92805
714-956-9191 Fax: 714-956-9119
Attn: Jasper Joseph
Adept Urban
388 Cordova st. Ste. 280
Pasadena, CA. 91101
Re: Ontario Arena Distric BB
Ontario
JasperTrenchers West Construction Company, Inc. will provide labor & materials on the above referenced project as follows:
Prevailing Wage
ITEM
NO. DESCRIPTION QUANTITY Unit UNIT PRICE TOTAL
Electric Offsite W.O # 1 & 2 Only
Mobilization 1 Ls $ 4,750.00 $ 4,750.00
Open Cut Ac for Electric Only 5,255 Lf $ 331.40 $ 1,741,507.00 (Inc: sawcut, slurry, steel plates & hot mix. Pavers by others) Trench in dirt 1,115 Lf $ 25.00 $ 27,875.00
Sawcut sidewalk (to be repaired by others) 300 Lf $ 32.50 $ 9,750.00 Encasement Over Electric 6,065 Lf $ 40.50 $ 245,632.50
5" Sch 40 E Conduit 27,880 Lf $ 7.75 $ 216,070.00
4" Sch 40 E Conduit 260 Lf $ 6.85 $ 1,781.00
Cable Trench (16' x 2' x 24") 2 Ea $ 45,500.00 $ 91,000.00 Cable Trench (10' x 2' x 24") 1 Ea $ 28,500.00 $ 28,500.00 5' x 10.5' x 7' Edison PME 1 Ea $ 22,500.00 $ 22,500.00 7' x 14' x 11' Edison PME 1 Ea $ 33,500.00 $ 33,500.00
7' x 14' x 8' Edison Vault 7 Ea $ 38,500.00 $ 269,500.00 10' x 12' Edison SB special order w/cable trench window 3 Ea $ 17,500.00 $ 52,500.00 10' x 12' Edison SB 1 Ea $ 16,750.00 $ 16,750.00
4' x 6' Edison PMH 1 Ea $ 5,200.00 $ 5,200.00
66" x 72" Edison Cap. Pad 1 Ea $ 1,850.00 $ 1,850.00
Bldg serv 4 Ea $ 2,950.00 $ 11,800.00
Edison Tie in to Existing Vault 2 Ea $ 10,500.00 $ 21,000.00 Traffic control (no plans) 1 Ls $ 42,500.00 $ 42,500.00 Dump Truck (5yd) 1 Ls $ 69,000.00 $ 69,000.00
(moving dirt to stock pile on Via Asti/Cleveland Ave)
Total $ 2,912,965.50
ITEM
NO. DESCRIPTION QUANTITY Unit UNIT PRICE TOTAL
Haul-off (if needed)
Haul-off Asphalt 1 Ls $ 77,900.00 $ 77,900.00
March 10, 2026
600
Notes:
Price subject to change when approved plans become available. Based On plans Received on 2/3/26 & 2/6/26.
Trenchers West Work Stops outside of Bulding/Concrete slabs or Utility Closets.
Developer to provide all permits, surveys, compaction tests and construction water.
Quantities listed are for bid purposes only. Actual quantities will be from field measurements.
If curb and gutter is installed prior to trench installation, and slurry is required under the curb and gutter, there will be an additional charge of $180.00 per crossing.
No spoil or landscape, removal included in unit price, to remain at jobsite.
No concrete or landscape replacement included in this proposal, work to be done by others.
Re-excavation, compaction, or sand replacement due to rain damage not included.
Dirt Screening, Rock breaking or removal not included.
Site to be free of obstruction.
Trench plates if requested at cost plus 10%.
If encasement is required or requested, there will be an additional charge of $35.50 a foot per utility.
If a utility requests encasement for sweeps, there will be an additional charge of $150 per sweep.
If a utility requests installation of provided conduit, there will be an additional charge of $3.00 per foot.
Should you have any questions or comments, please contact the undersigned.
Gus Alvarez
601
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616
Please send any inquiries to [email protected] American Boring Company Inc.
17130 Van Buren Blvd PMB 570
Riverside, CA 92504 USA
9095283435
www.americanboring.com
Estimate
ADDRESS
Jasper Joseph
Adept Urban
380 Cordova St.
Suite 280
Pasadena, CA 91101
ESTIMATE # 1282
DATE 02/11/2026
PROJECT JOBSITE LOCATION
WO# 1 Drwg NO 1701312 Ontario Center Parkway
QTY DESCRIPTION RATE AMOUNT
1 Scope Full Turn-Key to install approx. 1308' of (6) 5", 897' of (4) 5", 867' of (2) 5", 1059' of (1) 5" and 47' of (6) 4" conduits. Set (3) 7'x14'x8' Boxes, (3) 10x12 pads with cable trench slot, (1) 5'x10'-6'x7', (1) 4x6, (1) 7x14x11, (1) 10x12 rotate top slab and (1) 66"x72" pad. Per SCE Preliminary drawing attached to estimate.
Work begin at EX Vault V1243. Trench 626' of (6) 5" form V1243 to V4615, include 372' of (1) 5" 372' from V1243 to Cap per plan.
Trench 660' of (6) 5" from V4615 to V4616, include 97' of (1) 5" from V4615 and 193' of (2) 5" from V4616 to Cap per plan.
Trench 597' of (4) 5" from V4616 to V4617, include 18' of (1) 5" form V4617 to POE
Trench 300' of (4) 5" form P4618 to V4617
Trench 470' of (2) 5" from P4622 to P4618, include (1) 5" from P4618 to POE and 245' of (1) 5" from P4622 to POE per plan
Trench 18' of (1) 5" from P4621 to P4623 per plan
Trench 15" of (1) 5" from P4624 to P4622
Trench (1) 5" from P4622 to POE include 204' of (2) 5" from P4622 to Cap per plan
Trench 22' of (6) 4" from P4625 to PNL Per plan
Trench 25' of (6) 4" from P4625 to PNL Per plan
Inclusions:
Private Locate with mapping
Sawcut, removal and disposal of all asphalt
Dig and remove all dirt material approx. 3200' of 20" wide trench approx. 60" deep.
Supply Dig and set (3) 7x14x8 Boxes per plan Call out #2, #3 and #4 Supply Dig and set (3) 10x12 pads with cable trench slot per plan. Call out #6, #7 and #10
Supply Dig and set (1) 5"x10'-6'x7' PM per plan. Call out #5 Supply Dig and set (1) 4'x6' Pad per plan. Call out #9
2,391,507.00 2,391,507.00
617
Please send any inquiries to [email protected]
QTY DESCRIPTION RATE AMOUNT
Supply Dig and set (1) 7x14x11 Pad per plan. Call out #8 Supply Dig and set (1) 10x12 pad rotate top slab per plan. Call out #12 Supply Dig and set (1) 66"x72" Pad per plan. Call out #11 Supply all traffic control Per Watch Manual
Restoration to all trenches (trench width only no spec at time of bidding) Restoration around all Boxes
Lay conduit in all trenching and install all conduit in New Vaults Concrete encase all conduit
Slurry backfill all trenches and boxes
Supply all steel plates (no recessed plates.)
Supply all shoring and shore boxes
Supply all conduit material per plan
Pothole all "marked" utilities that come into conflict with the Trenching operation.
1 Contractor to provide:
Preliminary and Job Information w/signed estimate (Form attached) Provide Ingress & Egress for Drill and Equipment
Survey
SWPPP
0.00 0.00
1 American Boring Company to provide:
All included in Billing line item.
Estimate Valid for 30 days from issue date
Labor and equipment necessary to install conduits
Traffic Control
Construction Water
Pothole & Positive ID of existing utilities to be crossed Daily safety meeting
Certified payroll Note Contractor to provide Must Receive Preliminary & DIR Information upon acceptance of Estimate
Note: Any and all Stand By Time for which is/was out of ABC's Control will be billed by the hour @ $795 per hour
0.00 0.00
1 1. City and Permits fees to be paid by ownership 2. Shop drawings 3.
Arborist / tree trimming 4. Demo of any kind unless otherwise noted 5.
Traffic control plan 6. Hard rock or slurry excavation 7. Trench excavation depth not to exceed 9’ 8. Dewatering 9. Asbestos removal 12. Relocation of conflicting existing utilities 13. Abandonment of existing utilities 14.
Hazardous soils removal 15. Planting / landscaping 16. Survey 17. Night and weekend work 18. Quality control 19. Unsuitable soils conditions 20.
Third Party Testing and Inspection 21. Performance and payment bonding
25. More than one test per utility 26. SWPPP 28. Unforeseen conditions
29. Dust control / water truck 30. Anything not in the itemized scope of work above
0.00 0.00
1 EXCLUSIONS: This Estimate DOES NOT include the following unless specifically set forth in the Estimate: (a) engineering, bonds, any additional COI, additional insurance coverage and or endorsements.etc) surveying, soils testing, special bedding, de-watering, or drilling and blasting; (b) storm water management or erosion control; (c)construction water and metering; (d) traffic control, permits, plans or equipment; (e) restoration of asphalt, concrete, or landscaping; (f) additional cleaning of conduit after installation and verification of cleaning by ABC; (g) excavation, removal, haul, backfill, or restoration of any work or access areas; (h) relocation of utilities or structures; (i) tunnel shoring; (j) identification, investigation, removal, remediation, or disposal of any hazardous or contaminated materials; (k) any additional costs to comply with wage or labor requirements that differ from or exceed requirements of ABC's Local 1184 labor union agreement (such as project labor agreements, disadvantaged workforce programs, apprenticeship
0.00 0.00
618
Please send any inquiries to [email protected]
QTY DESCRIPTION RATE AMOUNT
requirements, etc).
UNDERGROUND STRUCTURES AND UTILITIES: Customer shall locate all underground structures, utilities, or other facilities prior to ABC's arrival on site. Customer agrees to indemnify, defend, and hold ABC and its insurance company harmless from any liability, claim, damage, cost, or expense due to Customer's failure to properly locate all underground structures and utilities, including any costs incurred by ABC as a result of any delays.
CHANGE OF CONDITIONS: This Estimate is based on information provided by Customer relating to the project underground conditions. In the event conditions are encountered that were not anticipated (e.g., rock, cobble, debris, unidentified objects, hazardous waste, etc.) and such conditions cause an increase in the cost or the time required for performance, Customer shall compensate ABC for all additional costs based on time and materials.
ACCEPTANCE-AGREEMENT: Customer's signature on this Estimate OR ABC's commencement of work based upon verbal or written authorization from Customer, whichever occurs first, shall be deemed an effective mode of acceptance of this Estimate, which shall become a binding agreement upon acceptance. Any acceptance of this Estimate is limited to acceptance of the express terms contained herein, and any modifications are rejected.
CHANGES: ABC shall have no duty to perform any changes without a written Extra Work Authorization form, signed by Customer. If any directive by the Customer changes ABC's scope of work; or if any other event outside the control of ABC occurs that changes the circumstances of performance, which directive or change causes an increase in the cost or the time required for performance, Customer shall compensate ABC for all additional costs based on time and materials.
PRELIMINARY NOTICE & LIEN RIGHTS: Customer acknowledges that Contractor may file a Preliminary Notice at the start of the project as required by law to preserve lien rights. Invoices are due per the payment terms stated. Any invoice not paid when due may result in a mechanics lien and/or Stop Notice being recorded against the property in accordance with applicable state law. Customer agrees to be responsible for all costs associated with collection, including lien filing fees, legal fees, and interest where permitted by law.
PAYMENT: Payment for all services shall be made no later than thirty (30) days from the date of invoice. Invoices shall not be subject to retainage unless specifically agreed to in writing by American Boring Company. All delinquent payments shall accrue interest at the rate of 1% per month until paid in full. "Prices have been based on a minimum estimated amount of footages; if the actual work performed is reduced by 20% or more, for whatever reason, ABC reserves the right to increase it's per footage prices."
1 FORCE MAJEURE: ABC may delay or suspend performance occasioned by any causes beyond its control, which causes shall excuse ABC from performance for the duration of the force majeure event.
LIMITED WARRANTY: For a period of one year from substantial completion of the work performed under this agreement, ABC warrants
0.00 0.00
619
Please send any inquiries to [email protected]
QTY DESCRIPTION RATE AMOUNT
that its work shall be free from defects in workmanship only. ABC makes no warranties with respect to materials or products, and Customer shall look to the material or products manufacturer(s) for all damages caused by defects in materials or products. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, ARE DISCLAIMED.
INDEMNIFICATION: Subject to any limitations under applicable law, Customer shall defend, indemnify and hold harmless ABC against all damages, claims or liabilities and expenses (including attorney's fees) arising out of or resulting in any way from any act or omission of Customer, its agents, employees or contractors.
TERMINATION FOR DEFAULT: ABC may terminate this agreement for cause in the event of any default by Customer or if Customer fails to comply with any of the terms and conditions of this agreement, if Customer fails to cure the default within three (3) days' notice from ABC.
Nonpayment shall be considered a material default of the agreement. In the event of termination, ABC shall not be liable to Customer for any amount, Customer shall be liable to ABC for any and all damages sustained by reason of the default.
LIMITATION ON LIABILITY: TO THE MAXIMUM EXTENT PERMITTED
BY LAW, THE LIMITED WARRANTY AND REMEDIES SET FORTH
ABOVE ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, REMEDIES AND CONDITIONS. In no event shall ABC be liable for liquidated damages, loss of anticipated profits, loss of financing, impairment of bonding capacity or for any consequential damages. ABC shall not be liable for penalties of any description.
SEVERABILITY: If any provision hereof shall be found to be inoperable or in violation of any law or regulation, only that provision shall be stricken from this order and the remainder of the order shall be affected.
GOVERNING LAW: The laws of the state of California shall govern this agreement and the right and the obligations of the parties hereunder, and the venue of any action brought hereunder shall be in the Superior Court, County of Riverside, State of California. ABC shall be entitled to recover all costs incurred to collect amounts due under this agreement, including ABC's court costs, attorney's fees and other expenses.
RETENTION:: Under no circumstances is retention to be withheld on contracts less than $30,000.00 To the extent that retention's are withheld, release of retention shall be within ninety (90) days from completion of ABC's work (not to be held for the completion of the overall project) Thank you for your business! We accept credit cards for invoices under $5,000, ACH payments, and checks can
be sent to 17130 Van Buren Blvd Ste 570, Riverside CA
92504 *CHECKS MUST BE MADE OUT TO
AMERICAN BORING COMPANY, INC.*
Please review the attached estimate in its entirety.
Included is the scope of work being estimated (anything not listed is not included). Feel free to contact us if you have any questions.
Scheduling WILL NOT be confirmed until the estimate
TOTAL $2,391,507.00
620
Please send any inquiries to [email protected] has been reviewed and approved using the link
provided and the project's Preliminary information is
received.(Preliminary Sheet attached)
We thank you for the opportunity and look forward to
working with you.
American Boring Company Inc
Accepted By Accepted Date
621
Please send any inquiries to [email protected] American Boring Company Inc.
17130 Van Buren Blvd PMB 570
Riverside, CA 92504 USA
9095283435
www.americanboring.com
Estimate
ADDRESS
Jasper Joseph
Adept Urban
380 Cordova St.
Suite 280
Pasadena, CA 91101
ESTIMATE # 1281
DATE 02/11/2026
PROJECT JOBSITE LOCATION
WO# 2 Job # 188843 Ontario, Ca.
QTY DESCRIPTION RATE AMOUNT
1 Scope Full Turn-Key to install approx. 2700' of (4) 5" conduit and set (4) 7'x14'x8' Boxes. Per SCE Preliminary drawing attached to estimate.
Work Beginning at EX Vault V1243 Trench out 437' with (4) 5" conduit to New Vault V00004. Trench from New V0004 to New vault V0003 678' of (4) 5" conduits. Trench from New V0003 to New Vault V0002 647' of (4) 5" conduits. Trench from New V0002 to New Vault V0001 674' of (4) 5" conduits. Trench from New V0001 to Existing conduits at end of work 567' of (4) 5" conduits
Inclusions:
Private Locate with mapping
Sawcut, removal and disposal of all asphalt
Dig and remove all dirt material 2700' of 20" wide trench approx. 60" deep.
Dig and set (4) 7x14x8 Boxes per plan
Supply (4) 7x14x8 boxes
Supply all traffic control Per Watch Manual
Restoration to all trenches (trench width only no spec at time of bidding) Restoration around all Boxes
Lay conduit in all trenching and install all conduit in New Vaults Concrete encase all conduit
Slurry backfill all trench's and boxes
Supply all steel plates (no recessed plates. Only Intersections.4th and 6th St.)
Supply all shoring and shore boxes
Supply all conduit material per plan
Pothole all "marked" utilities that come into conflict with the Trenching operation.
2,012,567.00 2,012,567.00
1 Contractor to provide:
Preliminary and Job Information w/signed estimate (Form attached) Provide Ingress & Egress for Drill and Equipment
Survey
0.00 0.00
622
Please send any inquiries to [email protected]
QTY DESCRIPTION RATE AMOUNT
SWPPP
1 American Boring Company to provide:
All included in Billing line item.
Estimate Valid for 30 days from issue date
Labor and equipment necessary to install conduits
Traffic Control
Construction Water
Pothole & Positive ID of existing utilities to be crossed Daily safety meeting
Certified payroll Note Contractor to provide Must Receive Preliminary & DIR Information upon acceptance of Estimate
Note: Any and all Stand By Time for which is/was out of ABC's Control will be billed by the hour @ $795 per hour
0.00 0.00
1 1. City and Permits fees to be paid by ownership 2. Shop drawings 3.
Arborist / tree trimming 4. Demo of any kind unless otherwise noted 5.
Traffic control plan 6. Hard rock or slurry excavation 7. Trench excavation depth not to exceed 9’ 8. Dewatering 9. Asbestos removal 12. Relocation of conflicting existing utilities 13. Abandonment of existing utilities 14.
Hazardous soils removal 15. Planting / landscaping 16. Survey 17. Night and weekend work 18. Quality control 19. Unsuitable soils conditions 20.
Third Party Testing and Inspection 21. Performance and payment bonding
25. More than one test per utility 26. SWPPP 28. Unforeseen conditions
29. Dust control / water truck 30. Anything not in the itemized scope of work above
0.00 0.00
1 EXCLUSIONS: This Estimate DOES NOT include the following unless specifically set forth in the Estimate: (a) engineering, bonds, any additional COI, additional insurance coverage and or endorsements.etc) surveying, soils testing, special bedding, de-watering, or drilling and blasting; (b) storm water management or erosion control; (c)construction water and metering; (d) traffic control, permits, plans or equipment; (e) restoration of asphalt, concrete, or landscaping; (f) additional cleaning of conduit after installation and verification of cleaning by ABC; (g) excavation, removal, haul, backfill, or restoration of any work or access areas; (h) relocation of utilities or structures; (i) tunnel shoring; (j) identification, investigation, removal, remediation, or disposal of any hazardous or contaminated materials; (k) any additional costs to comply with wage or labor requirements that differ from or exceed requirements of ABC's Local 1184 labor union agreement (such as project labor agreements, disadvantaged workforce programs, apprenticeship requirements, etc).
UNDERGROUND STRUCTURES AND UTILITIES: Customer shall locate all underground structures, utilities, or other facilities prior to ABC's arrival on site. Customer agrees to indemnify, defend, and hold ABC and its insurance company harmless from any liability, claim, damage, cost, or expense due to Customer's failure to properly locate all underground structures and utilities, including any costs incurred by ABC as a result of any delays.
CHANGE OF CONDITIONS: This Estimate is based on information provided by Customer relating to the project underground conditions. In the event conditions are encountered that were not anticipated (e.g., rock, cobble, debris, unidentified objects, hazardous waste, etc.) and such conditions cause an increase in the cost or the time required for performance, Customer shall compensate ABC for all additional costs based on time and materials.
0.00 0.00
623
Please send any inquiries to [email protected]
QTY DESCRIPTION RATE AMOUNT
ACCEPTANCE-AGREEMENT: Customer's signature on this Estimate OR ABC's commencement of work based upon verbal or written authorization from Customer, whichever occurs first, shall be deemed an effective mode of acceptance of this Estimate, which shall become a binding agreement upon acceptance. Any acceptance of this Estimate is limited to acceptance of the express terms contained herein, and any modifications are rejected.
CHANGES: ABC shall have no duty to perform any changes without a written Extra Work Authorization form, signed by Customer. If any directive by the Customer changes ABC's scope of work; or if any other event outside the control of ABC occurs that changes the circumstances of performance, which directive or change causes an increase in the cost or the time required for performance, Customer shall compensate ABC for all additional costs based on time and materials.
PRELIMINARY NOTICE & LIEN RIGHTS: Customer acknowledges that Contractor may file a Preliminary Notice at the start of the project as required by law to preserve lien rights. Invoices are due per the payment terms stated. Any invoice not paid when due may result in a mechanics lien and/or Stop Notice being recorded against the property in accordance with applicable state law. Customer agrees to be responsible for all costs associated with collection, including lien filing fees, legal fees, and interest where permitted by law.
PAYMENT: Payment for all services shall be made no later than thirty (30) days from the date of invoice. Invoices shall not be subject to retainage unless specifically agreed to in writing by American Boring Company. All delinquent payments shall accrue interest at the rate of 1% per month until paid in full. "Prices have been based on a minimum estimated amount of footages; if the actual work performed is reduced by 20% or more, for whatever reason, ABC reserves the right to increase it's per footage prices."
1 FORCE MAJEURE: ABC may delay or suspend performance occasioned by any causes beyond its control, which causes shall excuse ABC from performance for the duration of the force majeure event.
LIMITED WARRANTY: For a period of one year from substantial completion of the work performed under this agreement, ABC warrants that its work shall be free from defects in workmanship only. ABC makes no warranties with respect to materials or products, and Customer shall look to the material or products manufacturer(s) for all damages caused by defects in materials or products. ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, ARE DISCLAIMED.
INDEMNIFICATION: Subject to any limitations under applicable law, Customer shall defend, indemnify and hold harmless ABC against all damages, claims or liabilities and expenses (including attorney's fees) arising out of or resulting in any way from any act or omission of Customer, its agents, employees or contractors.
TERMINATION FOR DEFAULT: ABC may terminate this agreement for cause in the event of any default by Customer or if Customer fails to comply with any of the terms and conditions of this agreement, if Customer fails to cure the default within three (3) days' notice from ABC.
Nonpayment shall be considered a material default of the agreement. In the event of termination, ABC shall not be liable to Customer for any
0.00 0.00
624
Please send any inquiries to [email protected]
QTY DESCRIPTION RATE AMOUNT
amount, Customer shall be liable to ABC for any and all damages sustained by reason of the default.
LIMITATION ON LIABILITY: TO THE MAXIMUM EXTENT PERMITTED
BY LAW, THE LIMITED WARRANTY AND REMEDIES SET FORTH
ABOVE ARE EXCLUSIVE AND IN LIEU OF ALL OTHER WARRANTIES, REMEDIES AND CONDITIONS. In no event shall ABC be liable for liquidated damages, loss of anticipated profits, loss of financing, impairment of bonding capacity or for any consequential damages. ABC shall not be liable for penalties of any description.
SEVERABILITY: If any provision hereof shall be found to be inoperable or in violation of any law or regulation, only that provision shall be stricken from this order and the remainder of the order shall be affected.
GOVERNING LAW: The laws of the state of California shall govern this agreement and the right and the obligations of the parties hereunder, and the venue of any action brought hereunder shall be in the Superior Court, County of Riverside, State of California. ABC shall be entitled to recover all costs incurred to collect amounts due under this agreement, including ABC's court costs, attorney's fees and other expenses.
RETENTION:: Under no circumstances is retention to be withheld on contracts less than $30,000.00 To the extent that retention's are withheld, release of retention shall be within ninety (90) days from completion of ABC's work (not to be held for the completion of the overall project) Thank you for your business! We accept credit cards for invoices under $5,000, ACH payments, and checks can
be sent to 17130 Van Buren Blvd Ste 570, Riverside CA
92504 *CHECKS MUST BE MADE OUT TO
AMERICAN BORING COMPANY, INC.*
Please review the attached estimate in its entirety.
Included is the scope of work being estimated (anything not listed is not included). Feel free to contact us if you have any questions.
Scheduling WILL NOT be confirmed until the estimate
has been reviewed and approved using the link
provided and the project's Preliminary information is
received.(Preliminary Sheet attached)
We thank you for the opportunity and look forward to
working with you.
American Boring Company Inc
TOTAL $2,012,567.00
Accepted By Accepted Date
625
Qty Price Units Total
1 $2,157,662.00 LS $2,157,662.00
3 $120,000.00 EA $360,000.00
1 $80,000.00 EA $80,000.00
1 $130,000.00 EA $130,000.00
4 $25,000.00 EA $100,000.00
1 $14,000.00 EA $14,000.00
1 $4,900.00 EA $4,900.00
1 $96,000.00 LS $96,000.00
1 $2,606,604.00 LS $2,606,604.00
4 $120,000.00 EA $480,000.00
Includes labor/equipment, conduit, encasement, all structures listed in SOW, aggregate base for backfill compacted in lifts, necessary shoring and steel plates, traffic control, *asphalt restoration, the removal/disposal of all excess debris/spoils from our stated SOW only, and native backfill compacted in lifts for onsite property. 7' x 14' x 8' Vault
PROJECT INCLUSIONS/EXCLUSIONS
WORK ORDER 2 - SCE STRUCTURES
Excavte to place the following SCE structures:
WORK ORDER 2 - 3,003 LF SCE CONDUIT
Provide labor/equipment to excavate and place the following conduit counts, lengths, and sizes:
3,003 LF of 4 - 5" conduits w/encasement
4' x 6' PME -5
66" x 72" Pad
Cable Trenches - 32'
Includes forming, pouring in place cable trenches and diamond plate covers as described in the drawings provided.
7' X 14' X 8' Vault
5' X 10' 6" X 7' Manhole
7' x 14' x 11' Vault
10' x 12' Slab
179 LF of 1 -5" conduit
542 LF of 3 - 5" conduits w/encasement
897 LF of 4 - 5" conduits w/encasement
302 LF of 6 - 5" conduits w/encasement
910 LF of 7 - 5" conduits w/encasement
190 LF of 8 - 5" conduits w/encasement
47 LF of 6 - 4" conduits encasement (secondary)
WORK ORDER 1 - SCE STRUCTURES
Excavate to place the following SCE structures:
306-N West El Norte Pkwy #463 Escondido CA. 92026
858.336.8955 | www.rovalgroup.com
Licence #: 985115 | DUNS: 079456368 | Cage: 75NP5
Project Name: 4131 CONCOURS ST, ONTARIO, CA PROPOSAL Client Information: ADEPT URBAN DEVELOPMENT WORK ORDER 1 - 3,155 LF SCE CONDUIT
Provide labor/equipment to excavate and place the following conduit counts, lengths, and sizes:
88 LF of 2 - 5" conduits
626
Qty Price Units Total
Total $6,029,166.00
306-N West El Norte Pkwy #463 Escondido CA. 92026
858.336.8955 | www.rovalgroup.com
Licence #: 985115 | DUNS: 079456368 | Cage: 75NP5
Project Name: 4131 CONCOURS ST, ONTARIO, CA PROPOSAL Client Information: ADEPT URBAN DEVELOPMENT
PROJECT INCLUSIONS/EXCLUSIONS - CONTINUED
Excludes night/weekend work, cable placement or splicing of any kind, permits/permit fees of any type, compaction testing if required, surveying of any kind, disposal of spoils if deemed contaminated, dewatering, venting for vaults (venting not shown on drawings), onsite property hardscape restoration.
Please note this is a Prevailing Wage project.
627
1. This proposal is valid for (30) days from the above date after which time ROVAL group reserves the right to modify the proposal for any adjustments in materials cost. Any price increase will be passed on to the client. All surcharges/price increases accessed by material suppliers, subcontractors and trucking shall be billed at cost plus 15% contractor's fee.
2. Traffic control includes standard roll-up signs (6 each), set up and take down. If flaggers or a pilot car are required, this will be an additional cost.
Traffic control plan are additional costs and not included unless noted in the Scope of Work.
3. This quotation is based on award of all items as proposed, adding or removing items of work will require a cost adjustment.
4. This proposal is subject to the condition that all its items are to be incorporated into any subsequent contract between Owner, Contractor and be evidenced by a signed contract by the Owner/Contractor.
5. Items not specifically mentioned are to be considered excluded from the scope of Work.
6. This proposal is subject to increase due to fuel and energy volatility based on market values. All surcharges/price increases accessed by material suppliers, subcontractors and trucking shall be billed at cost plus 15% contractor's fee.
7. Proposition 65 Notice: The following applies to California only: products used in the above scope of work contain chemicals known to the State a/California to cause cancer, birth defects or other reproductive harm.
8. Payment in full upon completion of work with monthly progress payments or based upon an agreed schedule of values.
9. The proposal price is subject to review of approved plans.
10. Quotation is based on work shown on the noted drawings unless otherwise stated. In case of a discrepancy between other drawings and noted drawings then the noted shall govern.
11. The earthwork is to balance. No import, export or over-excavation is included. All spoils to remain on site. No re-grading or fine grading to shall be by others.
12. Rock clause: Excavation for underground trenching of soil or rock which cannot be removed with normal equipment is excluded and all such work shall be done on a time and materials basis.
13. All underground work to within 5 LF of building foundations or structures, connection by others.
15. Work shall be accomplished per a mutually agreed upon schedule, weather and ground conditions permitting, during normal daytime working shifts 8-hour days, 40 hours/week (M-F). with conventional equipment and crews. Any special phasing or splitting of work will be at an extra cost.
If overtime is required, then Owner/General Contractor shall compensate the cost-plus contractors fee.
16. Dust control and public safety for our work only while on site.
17. Proposal is based on one move-on to complete the entire quoted operation. Any additional move-on will be at extra cost.
18. If required, overhead and profit markup for any extra work or change orders will be a minimum of 15%. A labor and equipment list will be provided at the beginning of the project upon request.
19. ROVAL Group is not signatory with any labor organization and shall not, by virtue of execution of any subcontract agreement with General Contractor, become bound to any provisions of any collective bargaining agreement with any labor organization for any purpose.
20. The exclusions. special conditions and/or clarifications in this proposal shall apply to all addenda and alternates and shall be included in all contract documents.
1. All fees, permits, permit fees, bonds, engineering, staking/surveying, testing, and inspections, or related inspection fees. Assessments and charges required by public entities.
2. Liquidated or actual damages.
3. No allowance for specialized work or phasing of work required to prosecute work when abnormal conditions exist or result because of weather and/or unknown conditions.
4. De-watering, over-excavation, re-compaction. removal, replacement or processing of soil that is loose, oversaturated, contaminated or otherwise unsuitable for compaction.
5. This proposal excludes all costs and responsibility for permits, surveys, identification, handling and/or remediation of asbestos and/or hazardous materials, known or unknown, identified under the Federal Comprehensive, Environmental Response, Compensation and liability Act of 1980 (CERCLA). This exclusion shall also apply to all other existing and/or proposed federal, state, county or local regulations that apply to hazardous materials. The owner is responsible to ensure the site is free of hazardous materials prior to the start of work by ROVAL Group. Costs resulting from delays, de-mobilization / re-mobilization and/or lost production will be paid as additional work.
6. Removal, relocation and/or demolition of all underground obstructions, pavements or utilities unless otherwise noted in scope of work including but not limited to storm, sewer. water, footings. poles, vaults, boxes, pipe, conduit, tanks, wells, etc. Repair or replacement of any utilities or other objects placed by others at elevations above the excavation or scarifying plane required by the plans and/or specifications.
7. Grading for other's concrete. Fine grading or placement of aggregate for asphalt, concrete walks, slabs or pads unless otherwise noted in scope of work.
8. Temporary fire/construction access roads, lime treatment and hydroseeding unless otherwise stated in scope of work.
9. Handling, hauling and removal of spoils.
10. Finish grading at landscaping, landscape mounds, topsoil and soil amendments.
11. Protection of plant and/or tree growth and/or existing structures. Replacement of landscape or irrigation damaged within the limits of new construction. Tree fencing, hand digging, tree pruning, aeration system, root barrier, header board installment. Employment of an arborist, or any other work associated with protection of existing trees, plants or irrigation systems.
12. SWPPP, QSD, QSP, erosion control installation, monitoring and maintenance.
13. Site fixtures and retaining walls unless otherwise stated in scope of work.
14. All water proofing and/or lining of any type.
15. Seal coat, soil sterilant, prime coat, asphalt handicap ramps or speed bumps, striping, red curb painting and lettering, marking, placement and/or relocation of signage unless otherwise noted.
CLARIFICATIONS
EXCLUSIONS
628
16. Damages to existing asphalt. slurry or concrete.
17. Construction Water.
18. Interior Liners on Manholes
19. Abestos Certified Person and Demo of Abestos Pipe
We appreciate your business and do not hesitate to call with any questions.
Marco Murallo
President
(858) 336-8955
629
Contact USA
Dial 811 or 800-422-4133
www.digalert.org/contact
Work Order #1
630
Contact USA
Dial 811 or 800-422-4133
www.digalert.org/contact
Work Order #1
631
Contact USA
Dial 811 or 800-422-4133
www.digalert.org/contact
Work Order #1
632
Contact USA
Dial 811 or 800-422-4133
www.digalert.org/contact
Work Order #1
633
634
635
636
Department: Utilities
Prepared By: Courtney Jones
Staff Member Presenting: Scott Burton, Utilities
General Manager
Reviewed By: Dennice Raygoza, Courtney
Jones, Michael Sigsbee
Approved By:
Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 15
SUBJECT: A PUBLIC HEARING TO CONSIDER AN ORDINANCE AMENDING CHAPTER 8B OF TITLE 6 OF THE ONTARIO MUNICIPAL CODE RELATED TO WATER SERVICE FEES
CITY OF ONTARIO
Agenda Report
April 7, 2026
SECTION:
PUBLIC HEARINGS
RECOMMENDATION: That City Council introduce and waive further reading of an Ordinance amending Chapter 8B of Title 6 of the Ontario Municipal Code related to water service fees.
THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:
Operate in a Businesslike Manner
Pursue City's Goals and Objectives by Working with Other Governmental Agencies Ensure the Development of a Well Planned, Balanced, and Self-Sustaining Community in Ontario Ranch
FISCAL IMPACT: There is no new fiscal impact anticipated from the proposed updates to Section 6-
8.51 of Chapter 8B of Title 6 relating to water service fees and charges. There are no revisions to the current schedule of fees and charges being proposed at this time. If there are future fiscal impacts, they will be incorporated as part of the City’s next comprehensive Rate Study. There is no impact to the General Fund.
BACKGROUND & ANALYSIS: The City owns and operates a potable water distribution system with over 40,000 service connections, providing high-quality drinking water to over 185,000 Ontario residents. The City also owns and operates a recycled water distribution system containing over 50 miles of pipelines with over 550 service connections, which supports the City’s water conservation efforts by reducing the use of potable water. Recycled water is not approved for drinking and is primarily used for agricultural purposes, landscape irrigation, and commercial and industrial activities. Chapter 8B of the Municipal Code generally includes account services, criteria for water service design, construction, operations, and management of water facilities.
The proposed changes to Section 6-8.51 of Chapter 8B of Title 6 are intended to improve operational efficiency and ensure compliance with updated laws and regulations. These revisions also support public health and safety, and the reliability of the City’s water system. Key proposed changes include:
637
Revisions to ensure compliance with updated laws and regulations governing rates for water service outside the City limits.
Revisions to enhance flexibility in supplying water for agricultural services to support efficient system management, regulatory compliance, and long-term resource sustainability.
The proposed ordinance amendments strengthen legal compliance and promote consistent application citywide. They also provide flexibility to support system optimization and proactive water resource management. Enhancing ordinance flexibility is aligned with the City’s broader strategic goals by enabling adaptive policy implementation, improving operational resilience, supporting responsible growth, and ensuring long-term reliability and sustainability of the water system.
Staff and Legal have reviewed the proposed changes to Section 6-8.51 of Chapter 8B of Title 6 to ensure it meets state requirements. Staff recommends adoption of the proposed changes to the City’s municipal code.
ENVIRONMENTAL REVIEW: The Ordinance is exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15358 (the activity will not result in a direct or reasonably foreseeable indirect physical change in the environment) of the CEQA Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no potential for resulting in physical change to the environment, directly or indirectly. Moreover, the City Council finds that this Ordinance is also exempt under CEQA pursuant to Guidelines Section 15061(b)(3) (there exists no possibility that the activity will have a significant adverse effect on the environment). 638
ORDINANCE NO. ________
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF ONTARIO, CALIFORNIA, AMENDING SECTION 6-8.51 OF CHAPTER 8B OF TITLE 6 OF THE ONTARIO MUNICIPAL CODE PERTAINING TO WATER
SERVICE FEES AND FINDING THAT SUCH ACTION DOES NOT
QUALIFY AS A PROJECT SUBJECT TO THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT UNDER STATE CEQA GUIDELINES
SECTION 15378 AND IS OTHERWISE EXEMPT FROM CEQA UNDER
STATE CEQA GUIDELINES SECTION 15061(b)(3).
WHEREAS, the City of Ontario (the “City”) owns and operates a potable water distribution system that delivers high-quality drinking water to City residents along with a recycled water distribution system that supports the City’s water conservation efforts by offsetting potable water use; and
WHEREAS, the City Council has determined that certain amendments to the City’s Municipal Code are necessary in order to align with current business practices related to potable and recycled water use, and allow for optimization in operational, regulatory, public health and safety, or system reliability considerations; and WHEREAS, the proposed amendments will specifically enhance flexibility in (1) establishing future rates for service outside the City’s limits, supporting regional coordination and enabling the City to respond strategically to opportunities for external water service arrangements, and (2) supplying water for agricultural services to support efficient system management, regulatory compliance, and long-term resource sustainability; and
WHEREAS, the City Council finds the proposed amendments are aligned with the City’s broader strategic goals by enabling adaptive policy implementation, improving operational resilience, supporting responsible growth, and ensuring long-term reliability and sustainability of the water system.
NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF ONTARIO DOES ORDAIN AS FOLLOWS:
SECTION 1. Findings. The above recitals are true and correct and are incorporated herein by this reference.
SECTION 2. Section 6-8.51 (Service fees and charges) of Chapter 8B (Water Services) of Title 6 (Sanitation and Health) of the Ontario Municipal Code is hereby amended in its entirety to read as follows:
“Sec. 6-8.51. Service fees and charges.
(a) Residential, non-residential, and private fire service water fees and charges. In addition to other fees, assessments, or charges provided by the Municipal Code or adopted by the City Council, the owner or occupant of 639
any parcel of property for which no other water service fee or charge is provided, and which parcel of property is connected to the water system of the City, shall pay monthly water service fees and charges as established from time to time by resolution of the City Council.
(b) Turning water supply on and off. No charge shall be made for shutting off and turning on water supply when requested by the customer for the closing of an old account or the beginning of a new one. When service has been discontinued due to non-payment of utility bills or for any infraction of the rules, the charges to restore water service shall be as listed above. The customer shall pay these charges, plus the amount of any outstanding bills, before service can be restored.
(c) Construction water. All construction water shall be metered and charged. (d) Temporary service connection. Temporary service connections shall be subject to the fees and deposits as established from time to time by resolution of the City Council. All water delivered through a temporary service connection shall be metered and charged.
(e) Water meter testing fee. Water meter testing fee shall be based on the actual costs of removal, testing and reinstallation of the meter. (f) Reserved.
(g) Other water service work. This charge is based on actual time, travel and material cost based on the City’s burden of labor and overhead rates in effect at the time service is provided.
(h) Reserved.
(i) Charges for agricultural use. Charges for usage of water for agricultural service, where the agricultural use provides assignment of water production rights to the City, shall be determined by the Utilities General Manager; provided, however, such charges will be consistent with the most recent rate study and current rates charged by the Chino Basin Watermaster for replenishment assessments.
(j) Charges for unmetered service. Unmetered usage of water and charges for unmetered usage of water shall be authorized by the Utilities General Manager prior to such usage; provided, however, such charges shall be reasonably in accordance with the charges established by resolution adopted by the City Council.”
SECTION 3. CEQA. The City Council finds that adoption of this Ordinance is exempt from the California Environmental Quality Act (“CEQA”) pursuant to Section 15378 because the activity is not a “project” subject to CEQA. (Cal. Code Regs. Tit. 14, § 15378). Section 15378 defines a project as an activity that “has a potential for resulting 640
in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” (Cal. Code Regs. Tit. 14, § 15378(a).) These measures are not expected to result in any direct or reasonably foreseeable indirect physical change in the environment, and thus the Ordinance is not a project subject to CEQA. Moreover, the City Council finds that even if this Ordinance is considered a project, it is exempt from CEQA under State CEQA Guidelines Section 15061(b)(3), the “common sense” exemption, because it can be seen with certainty that there is no possibility that the Ordinance will have a significant effect on the environment. (Cal. Code Regs. Tit. 14, §15061(b)(3).)
SECTION 4. Severability. If any section, subsection, subdivision, paragraph, sentence, clause or phrase added by this Ordinance, or any part thereof, is for any reason held to be unconstitutional or invalid or in effective by any court of competent jurisdiction, such decision shall not affect the validity or effectiveness of the remaining portions of this Ordinance or any part thereof. The City Council hereby declares that it would have passed each section, subsection, subdivision, paragraph, sentence, clause or phrase thereof irrespective of the fact that any one or more subsections, subdivisions, paragraphs, sentences, clauses or phrases are declared unconstitutional, invalid or ineffective.
SECTION 5. Effective Date. This Ordinance shall become effective thirty (30) days after its adoption by the City Council.
SECTION 6. Certification. 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 (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.
SECTION 6. 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 (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 ________ day of _________ 2026. _____________________________________
PAUL S. LEON, MAYOR
641
ATTEST:
_________________________________
SHEILA MAUTZ, CITY CLERK
APPROVED AS TO FORM:
_______________________________
BEST BEST & KRIEGER LLP
CITY ATTORNEY
642
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 _____________ and adopted at the regular meeting held ___________, 2026 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 ____________ and that Summaries of the Ordinance were published on ___________ and _____________, in the Inland Valley Daily Bulletin newspaper.
__________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
643
Department: Economic Development
Prepared By: Charity Hernandez
Department:
Prepared By: Charity Hernandez
Staff Member Presenting: Armen Harkalyan,
Executive Director of Finance
Approved By:
Submitted To: Council/OHA
Approved: _______________________________
Continued To: ___________________________
Denied: __________________________________
Item No: 16
SUBJECT: REFINANCING PLAN FOR PROPERTY OWNED BY THE CITY OF ONTARIO LOCATED AT 9155-9381 EAST RIVERSIDE DRIVE AND APPROVAL OF RELATED LEASE
FINANCING OBLIGATION
CITY OF ONTARIO
Agenda Report
April 7, 2026
SECTION:
ADMINISTRATIVE
REPORTS/DISCUSSION/ACTION
RECOMMENDATION: That the City Council authorize the City Manager, or his designee, to execute all documents required for the completion of the lease-leaseback financing within the authorization limits and adopt a Resolution approving:
A. The refinancing of real property owned by the City of Ontario (“City”) located at 9155-9381 East Riverside Drive through the delivery of a lease financing obligation; and B. The Lease Agreement (“Lease Agreement”) between the City and the Ontario Public Finance Authority (“Authority”); and
C. The Site Lease (“Site Lease”) between the City and the Authority; and D. All necessary action and documents required to be delivered pursuant to the Lease Agreement and/or Site Lease, including without limitation the Assignment Agreement (“Assignment Agreement”).
That the Authority authorize the Executive Director or Chief Financial Officer, or their designee, to execute all documents required for the completion of the lease financing within the authorization limits and adopt a Resolution approving:
A. The refinancing of real property owned by the City located at 9155-9381 East Riverside Drive through the delivery of a lease financing obligation; and B. The Lease Agreement between the City and the Authority; and C. The Site Lease between the City and the Authority; and D. The Assignment Agreement among the Authority, the City, and the Purchasing Funds.
THE FOLLOWING COUNCIL GOALS ARE BEING ACHIEVED:
Invest in the Growth and Evolution of the City's Economy Operate in a Businesslike Manner
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FISCAL IMPACT: The aggregate of the principal components of the Lease Payments shall not exceed $84,000,000 and the true interest cost of the interest components of the Lease Payments shall not exceed
3.00%. The term of the lease is five years and will commence upon closing. Appropriations for future years will be included in accordance with the annual Budget adoption process to City Council for approval.
BACKGROUND & ANALYSIS: In March of 2023, the City purchased approximately 115-acres of real property located at 9155-9381 East Riverside Drive from Ronald and Kristine Pietersma Family Trust ("Seller") for site improvements related to the Ontario Sports Empire project, in particular the baseball stadium, parking structure, surface parking, and sports fields. As part of the acquisition, the Seller agreed to repayments from the City over a 10-year period.
The City now wishes to refinance the acquisition costs through the delivery of a lease financing obligation.
The unallocated reserves of certain of the City's funds (Purchasing Funds), as described in the financing documents, may be used to purchase the lease obligation.
The purchase of the lease obligation by the Purchasing Funds will constitute an investment of such funds in that the investment will be the purchase of an obligation of a local agency as described in Section 53601(a) of the California Government Code. Pursuant to the requirements thereof, the obligation is for a term of less than 5 years. The purchase of the lease obligation will not interfere with the cash flow needs of the Purchase Funds for the term of the investment.
The actions taken with respect to the lease financing are as follows: The Purchasing Funds will advance the amount not to exceed of $84,000,000 to the City's Capital Projects Fund, and in return the City will enter into the lease obligation with the Authority. The Authority will assign its right to receive the lease payments to the Purchasing Funds for the term of 5 years in order to repay all of the amount advanced to the General Fund including interest at a rate of 3.00%. This lease agreement will have the same profile as under the current obligation but with a lower interest rate. The City will promise to annually budget and appropriate the amounts equal to the lease payments in order to repay the Purchasing Funds.
In order to refinance the acquisition of property, the documents accomplish the following: On the date of the closing of the refinancing plan, the City will concurrently lease the property to the Authority under the Site Lease as lessee.
Additionally, the Authority will concurrently lease the property under the Lease Agreement, by which the City will make lease payments sufficient to pay the annual lease payment. The Authority will then assign its right to receive the lease payments to the Purchasing Funds under the Assignment Agreement.
The lease property includes the following City-owned facilities:
1333 South Bon View Avenue
208 West Emporia
155 East C Street
331 North Sultana Avenue
Staff recommends approval of the City Council Resolution and the Authority Board Resolution. 645
RESOLUTION NO. _______
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ONTARIO,
CALIFORNIA, AUTHORIZING EXECUTION AND DELIVERY OF A SITE
LEASE, A LEASE AGREEMENT, AND OTHER RELATED DOCUMENTS
IN CONNECTION WITH ENTERING INTO A LEASE OBLIGATION
THROUGH A LEASE FINANCING ARRANGEMENT WITH THE ONTARIO
PUBLIC FINANCING AUTHORITY AND CERTAIN OTHER ACTIONS
RELATING THERETO.
WHEREAS, the City Council (the “City Council”) of the City of Ontario (the “City”) hereby determines that it is in the best interests of the City to refinance existing obligations of the City for the acquisition of real property used in connection with the Sports Empire (the “Project”), through a lease financing arrangement (the “Lease Obligation”) with the Ontario Public Financing Authority (the “Authority”) and certain lending funds of the City; and
WHEREAS, the City, in order to accomplish the refinancing of the Project, wishes to enter into a Site Lease and a Lease Agreement, each between the City and the Authority, hereinafter more particularly described, and that certain other actions be taken and authorized, and that the Lease Payments thereunder will be assigned to the Purchasing Funds under an Assignment Agreement; and
WHEREAS, the City has determined that the unallocated reserves of the City’s Water Operating Fund, Water Capital Fund, Equipment Services Fund, Leave Liability Fund, or such other available funds (together, the “Purchasing Funds”) may be used to purchase the Lease Obligation, as the purchase of the Lease Obligation by the Purchasing Funds will constitute an investment of such funds, in that the investment will be the purchase of an obligation of a local agency as described in Section 53601(a) of the California Government Code, the obligation is for a term of less than 5 years, and the purchase of the obligation will not interfere with the cash flow needs of the Purchasing Funds for the term of the investment. With respect to the City’s prudent investment requirement, the City Council ensures that it fully intends to honor the covenants and obligations under the Lease Obligation; and
WHEREAS, Section 5852.1 of the Government Code of the State of California (“Section 5852.1”) provides that the City Council obtain from an underwriter, financial advisor or private lender and disclose, in a meeting open to the public, prior to authorization of the issuance of the Lease Obligation, good faith estimates of (a) the true interest cost of the Lease Obligation, (b) the finance charge of the Lease Obligation, meaning the sum of all fees and charges paid to third parties, (c) the amount of proceeds of the Lease Obligation received less the finance charge described above and any reserves or capitalized interest paid or funded with proceeds of the Lease Obligation and (d) the sum total of all debt service payments on the Lease Obligation calculated to the final maturity of the Lease Obligation plus the fees and charges paid to third parties not paid with the proceeds of the Lease Obligation; and
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WHEREAS, in accordance with Section 5852.1, the City Council has obtained such good faith estimates from Urban Futures, Inc., the City’s municipal advisor (the “Municipal Advisor”), and such estimates are disclosed in Exhibit A attached hereto; and WHEREAS, this City Council has determined that the financing terms presented to the City by the Purchasing Funds are acceptable and that it is in the best interest of the City that the financing terms be accepted.
NOW, THEREFORE, the City Council of the City of Ontario does hereby resolve and declare as follows:
SECTION 1. Findings and Determinations. (a) The City Council hereby finds and determines that it is in the prudent management of the fiscal affairs of the City that the lease financing be used to cause the refinancing of the obligations issued for the acquisition of the Project.
(b) Pursuant to Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), the City Council hereby finds that the lease financing will result in savings in effective interest rates, underwriting costs and bond issuance costs and thereby result in significant public benefits pursuant to Section 6586 of the Act.
(c) The City Council hereby finds and determines that the fair rental value of the leased premises under the Lease Agreement (the “Leased Premises”), exceeds the present value of Lease Payments to be made under the Lease Agreement.
SECTION 2. Approval of Financing. The City hereby approves the Project subject to the terms and conditions of this Resolution.
SECTION 3. Approval of Financing Documents. The City Council hereby approves each of the following documents in substantially the respective forms on file with the City Clerk, together with any such additions thereto and changes therein as Best Best & Krieger LLP (“Special Counsel”) shall deem necessary, desirable or appropriate, the execution of which by the Mayor, City Manager, or the Executive Director of Finance shall be conclusive evidence of the approval of any such additions and changes:
(1) the Site Lease;
(2) the Lease Agreement; and
(3) the Assignment Agreement.
The Mayor, the City Manager, or the Executive Director of Finance are each hereby authorized and directed to execute, and the City Clerk is hereby authorized and directed to attest to, the final form of each of the foregoing documents and agreements for and in the name and on behalf of the City. The City Council hereby authorizes the delivery and performance of each of the foregoing documents and agreements. 647
SECTION 4. Financing Terms; Investment. The financing terms presented to the City by the Purchasing Funds are approved as follows: the maximum principal amount of the financing is $84,000,000, the maximum interest rate with respect to the financing is 3.000%, and the maximum term for the financing is 5 years.
This City Council hereby finds that the purchase of the financing by the Purchasing Funds complies with the City’s investment policy for the Purchasing Funds and that the City has taken measures to ensure that the investment by the Purchasing Funds will be repaid through the General Fund budget and appropriation process during the next 5 fiscal years.
SECTION 5. Requisitions. The City Manager or the Executive Director of Finance, or any one of them, are hereby authorized and directed to execute one or more requisitions authorizing the payment of costs of issuing the Lease Obligations from the proceeds of payment by the Authority under the Site Lease.
SECTION 6. Other Acts. The City Manager, Executive Director of Finance, and the other officers and staff members of the City are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with the staff and Special Counsel they may deem necessary or advisable in order to consummate the Project, or otherwise to effectuate the purposes of this Resolution, and any such actions previously taken by such officers are hereby ratified and confirmed.
SECTION 7. Effective Date. This Resolution shall take effect upon adoption.
The City Clerk of the City of Ontario shall certify as to the adoption of this Resolution.
PASSED, APPROVED, AND ADOPTED this 7
th day of April 2026.
_____________________________________
PAUL S. LEON, MAYOR
ATTEST:
____________________________________
SHEILA MAUTZ, CITY CLERK
648
APPROVED AS TO FORM:
____________________________________
BEST BEST & KRIEGER LLP
CITY ATTORNEY
649
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. 2026- was duly passed and adopted by the City Council of the City of Ontario at their regular meeting held April 7, 2026 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. 2026- duly passed and adopted by the Ontario City Council at their regular meeting held April 7, 2026. _____________________________________
SHEILA MAUTZ, CITY CLERK
(SEAL)
650
EXHIBIT A
GOOD FAITH ESTIMATES
The good faith estimates set forth herein are provided with respect to the Lease Obligation in accordance with California Government Code Section 5852.1. Such good faith estimates have been provided to the City by the Municipal Advisor in consultation with the Underwriter.
Principal Amount. The Municipal Advisor has informed the City that, based on the financing plan and current market conditions, its good faith estimate of the aggregate principal amount of the Lease Obligation to be sold is $84,000,000 (the “Estimated Principal Amount”).
True Interest Cost of the Lease Obligation. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Lease Obligation is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the true interest cost of the Lease Obligation, which means the rate necessary to discount the amounts payable on the respective principal and interest payment dates to the purchase price received for the Lease Obligation, is
3.00%.
Finance Charge of the Lease Obligation. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Lease Obligation is sold, and based on market interest rates prevailing at the time of preparation of such estimate and no cost attributable to the purchase of a bond insurance or reserve surety policy (which the City would purchase only if the cost of such insurance premiums were less than the interest cost savings attributable thereto), its good faith estimate of the finance charge for the Lease Obligation, which means the sum of all fees and charges paid to third parties (or costs associated with the Lease Obligation), is $0.0.
Amount of Proceeds to be Received. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Lease Obligation is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the amount of proceeds expected to be received by the City for the sale of the Lease Obligation, less the finance charge of the Lease Obligation, as estimated above, and any reserves or capitalized interest paid or funded with proceeds of the Lease Obligation, is $84,000,000.
Total Payment Amount. The Municipal Advisor has informed the City that, assuming that the Estimated Principal Amount of the Lease Obligation is sold, and based on market interest rates prevailing at the time of preparation of such estimate, its good faith estimate of the total payment amount, which means the sum total of all payments the City will make to pay debt service on the Lease Obligation, plus the finance charge for the Lease Obligation, as described above, not paid with the proceeds of the Lease Obligation, calculated to the final maturity of the Lease Obligation, is $94,378,200 (excluding any offsets from reserves or capitalized interest). 651
The foregoing estimates constitute good faith estimates only. The actual principal amount of the Lease Obligation delivered and sold, the true interest cost thereof, the finance charges thereof, the amount of proceeds received therefrom and total payment amount with respect thereto may differ from such good faith estimates due to (a) the actual date of the sale of the Lease Obligation being different than the date assumed for purposes of such estimates, (b) the actual principal amount of the Lease Obligation sold being different from the Estimated Principal Amount, (c) the actual amortization of the Lease Obligation being different than the amortization assumed for purposes of such estimates, (d) the actual market interest rates at the time of sale of the Lease Obligation being different than those estimated for purposes of such estimates, (e) other market conditions, or (f) alterations in the financing plan or finance charges, or a combination of such factors. Market interest rates are affected by economic and other factors beyond the control of the City.
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RESOLUTION NO. ______
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE ONTARIO
PUBLIC FINANCING AUTHORITY, OF THE CITY OF ONTARIO,
CALIFORNIA, AUTHORIZING EXECUTION AND DELIVERY OF A SITE
LEASE, A LEASE AGREEMENT, AND OTHER RELATED DOCUMENTS
IN CONNECTION WITH THE REFINANCING OF EXISTING
OBLIGATIONS OF THE CITY AND CERTAIN FUNDS OF THE CITY
PROVIDING INTERIM FINANCING, AND CERTAIN OTHER ACTIONS
RELATING THERETO.
WHEREAS, the Board of Directors (the “Board”) of the Ontario Public Financing Authority (the “Authority”) hereby determines that it is in the best interests of the Authority and City of Ontario (“City”) to refinance existing obligations of the City for the acquisition of real property used in connection with the Sports Empire (the “Project”), through a lease financing arrangement (the “Lease Obligation”) with the City and the purchasing funds of the City as may be determined by the Water Operating Fund, Water Capital Fund, Equipment Services Fund, and Leave Liability Fund of the City, or other available participating fund (together, the “Purchasing Funds”); and WHEREAS, the Authority, in order to accomplish the refinancing of the Project, wishes to enter into a Site Lease and a Lease Agreement, each between the City and the Authority, hereinafter more particularly described, and desires that certain other actions be taken and authorized and that the Lease Payments thereunder will be assigned to the Purchasing Funds under an Assignment Agreement; and
WHEREAS, the current interest rate environment is favorable to refinance the outstanding obligation and the City and Authority propose to enter into a refunding Lease Obligation which does not exceed $84,000,000 under the provisions of Article 4 (commencing with Section 6584) of Chapter 5 of Division 7 of Title 1 of the Government Code of the State of California (the “Act”), which are proposed to be payable from lease payments to be paid to the Authority by the City pursuant to a Lease Agreement (the “Lease Agreement”) as may be determined by the Authority; and WHEREAS, this Board has determined that the financing terms presented to the Authority by the Purchasing Funds are acceptable and that it is in the best interest of the Authority that the financing terms be accepted.
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE ONTARIO PUBLIC FINANCING AUTHORITY DOES HEREBY RESOLVE AND DECLARE AS FOLLOWS:
SECTION 1. Findings and Determinations. (a) The Authority hereby finds and determines that it is in the prudent management of the fiscal affairs of the City that the proceeds of the Lease Obligation be used to cause the defeasance and prepayment of the outstanding obligation relating to the Project.
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(b) Pursuant to the Act, the Authority hereby finds that the Lease Obligation will result in savings in effective interest rates, underwriting costs and bond issuance costs and thereby result in significant public benefits pursuant to Section 6586 of the Act.
(c) The Authority hereby finds that the fair rental value of the leased premises under the Lease Agreement (the “Leased Premises”), exceeds the present value of Lease Payments to be made under the Lease Agreement.
SECTION 2. Approval of Financing. The Board hereby approves the financing of the Project subject to the terms and conditions of this Resolution.
SECTION 3. Approval of Financing Documents. The Board hereby approves each of the following documents in substantially the respective forms on file with the Secretary, together with such additions thereto and changes therein as Best Best & Krieger LLP (“Special Counsel”) shall deem necessary, desirable or appropriate, the execution of which by the Authority’s Executive Director or Chief Financial Officer shall be conclusive evidence of the approval of any such additions and changes:
(1) the Site Lease;
(2) the Lease Agreement; and
(3) the Assignment Agreement.
The Authority’s President, the Executive Director, or the Chief Financial Officer are each hereby authorized and directed to execute, and the Secretary is hereby authorized and directed to attest to the final form of, each of the foregoing documents and agreements for and in the name and on behalf of the Authority. The Board hereby authorizes the delivery and performance of each of the foregoing documents and agreements.
SECTION 4. Financing Terms. The financing terms presented to the Authority by the Purchasing Funds are hereby approved as follows: the maximum principal amount of financing is $84,000,000, the maximum interest rate with respect to the financing is
3.000%, and the maximum term for the financing is 5 years.
SECTION 5. Other Acts. The Authority’s Executive Director and the Chief Financial Officer and the other officers and staff members of the Authority are hereby authorized and directed, jointly and severally, to do any and all things, to execute and deliver any and all documents, which in consultation with the staff and Special Counsel they may deem necessary or advisable in order to consummate the refinancing of the Project, or otherwise to effectuate the purposes of this Resolution, and any such actions previously taken by such officers are hereby ratified and confirmed.
SECTION 6. Effective Date. This Resolution shall take effect upon adoption.
The Secretary of the Ontario Public Financing Authority shall certify as to the adoption of this Resolution.
654
PASSED, APPROVED, AND ADOPTED this 7
th day of April 2026.
_____________________________________
PAUL S. LEON, CHAIRMAN
ATTEST:
______________________________________
SHEILA MAUTZ, AUTHORITY SECRETARY
APPROVED AS TO FORM:
_______________________________________
AUTHORITY COUNSEL
655
STATE OF CALIFORNIA )
COUNTY OF SAN BERNARDINO )
CITY OF ONTARIO )
I, SHEILA MAUTZ, Secretary of the Ontario Public Financing Authority, DO HEREBY CERTIFY that the foregoing Resolution No. OPFA- was duly passed and adopted by the Board Members of the Ontario Public Financing Authority at their regular meeting held April 7, 2026, by the following roll call vote, to wit:
AYES: BOARD MEMBERS:
NOES: BOARD MEMBERS:
ABSENT: BOARD MEMBERS:
______________________________________
SHEILA MAUTZ, AUTHORITY SECRETARY
(SEAL)
The foregoing is the original of Resolution No. OPFA duly passed and adopted by the Ontario Public Financing Authority at their regular meeting held April 7, 2026. _____________________________________
SHEILA MAUTZ, AUTHORITY SECRETARY
(SEAL)
656
46700.50057\44875956.3
LEASE AGREEMENT
by and between
ONTARIO PUBLIC FINANCING AUTHORITY,
as Sublessor
and
CITY OF ONTARIO, CALIFORNIA,
as Sublessee
Dated as of April 1, 2026
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46700.50057\44875956.3
TABLE OF CONTENTS
Page
ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION
Section 1.01. Definitions........................................................................................................ 1 Section 1.02. Interpretation.................................................................................................... 4
ARTICLE II
COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 2.01. Covenants, Representations and Warranties of the City.................................. 4 Section 2.02. Covenants, Representations and Warranties of the Authority......................... 5
ARTICLE III
DEPOSIT AND APPLICATION OF FUNDS; DRAW DOWN OF FUNDS
Section 3.01. Deposit of and Application of Funds............................................................... 6 Section 3.02. Draw Down Agreement ................................................................................... 6 Section 3.03. Project to Become Property Hereunder ........................................................... 7
ARTICLE IV
LEASE OF PROPERTY; LEASE PAYMENTS
Section 4.01. Sublease of Property by the Authority Back to the City.................................. 7 Section 4.02. Term................................................................................................................. 7 Section 4.03. Lease Payments................................................................................................ 8 Section 4.04. Quiet Enjoyment ............................................................................................ 10 Section 4.05. Title................................................................................................................ 10 Section 4.06. Release of Excess Property............................................................................ 10 Section 4.07. Substitution of Property ................................................................................. 11
ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 5.01. Maintenance, Utilities, Taxes and Assessments............................................ 12 Section 5.02. Modification of Property................................................................................ 13 Section 5.03. Public Liability Insurance .............................................................................. 13 Section 5.04. Casualty Insurance ......................................................................................... 13 Section 5.05. Rental Interruption Insurance ........................................................................ 14 Section 5.06. Workers’ Compensation Insurance................................................................ 14 Section 5.07. Insurance Net Proceeds; Form of Policies..................................................... 14 Section 5.08. Installation of City’s Personal Property......................................................... 14 658
46700.50057\44875956.3
ii
Section 5.09. Liens............................................................................................................... 15 Section 5.10. Advances........................................................................................................ 15 Section 5.11. Environmental Covenants.............................................................................. 15
ARTICLE VI
EMINENT DOMAIN; USE OF NET PROCEEDS
Section 6.01. Eminent Domain ............................................................................................ 16 Section 6.02. Application of Net Proceeds.......................................................................... 16 Section 6.03. Abatement of Lease Payments in the Event of Damage or Destruction........ 18
ARTICLE VII
OTHER COVENANTS OF THE CITY
Section 7.01. Disclaimer of Warranties............................................................................... 18 Section 7.02. Access to the Property; Grant and Conveyance of Right of Entry ................ 19 Section 7.03. Release and Indemnification Covenants........................................................ 19 Section 7.04. Assignment by the Authority......................................................................... 20 Section 7.05. Assignment Agreement and Subleasing by the City...................................... 20 Section 7.06. Amendment of Lease Agreement .................................................................. 20 Section 7.07. Records and Accounts.................................................................................... 20 Section 7.08. Observance of Laws and Regulations............................................................ 20
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default Defined ............................................................................. 21 Section 8.02. Remedies on Default...................................................................................... 22 Section 8.03. No Remedy Exclusive.................................................................................... 23 Section 8.04. Agreement to Pay Attorneys’ Fees and Expenses ......................................... 23 Section 8.05. No Additional Waiver Implied by One Waiver............................................. 24 Section 8.06. Judicial Reference.......................................................................................... 24
ARTICLE IX
PREPAYMENT OF LEASE PAYMENTS
Section 9.01. Security Deposit............................................................................................. 25 Section 9.02. Optional Prepayment ..................................................................................... 26 Section 9.03. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain........................................................................................................... 26 659
46700.50057\44875956.3
iii
ARTICLE X
MISCELLANEOUS
Section 10.01. Notices ........................................................................................................... 26 Section 10.02. Binding Effect................................................................................................ 27 Section 10.03. Severability .................................................................................................... 27 Section 10.04. Net-net-net Lease ........................................................................................... 27 Section 10.05. Further Assurances and Corrective Instruments............................................ 27 Section 10.06. Execution in Counterparts.............................................................................. 27 Section 10.07. Applicable Law.............................................................................................. 27 Section 10.08. Captions ......................................................................................................... 27 EXHIBIT A - DESCRIPTION OF THE SITE......................................................................... A-1 EXHIBIT B - DESCRIPTION OF THE FACILITY ................................................................B-1 EXHIBIT C - SCHEDULE OF LEASE PAYMENTS..............................................................C-1 660
46700.50057\44875956.3
LEASE AGREEMENT
THIS LEASE AGREEMENT (this “Lease Agreement”), dated as of April 1, 2026, is by and between the ONTARIO PUBLIC FINANCING AUTHORITY, a public agency existing under the laws of the State of California, as lessor (the “Authority”), and the CITY OF ONTARIO, a general law city and municipal law corporation, duly organized and existing under and by virtue of the laws of the State of California, as lessee (the “City”).
W I T N E S S E T H :
WHEREAS, pursuant to that certain Site Lease, dated as of April 1, 2026 (the “Site Lease”), the City will acquire certain parcels of real property situated in the City of Ontario, San Bernardino County, State of California, more particularly described in Exhibit A attached hereto and made a part hereof (the “Site” or the “Property”), to the Authority, all for the purpose of enabling the City to refinance existing obligations of the City for the acquisition of real property used in connection with the Sports Empire (the “Project”); and WHEREAS, the Authority proposes to lease the Property back to the City pursuant to this Lease Agreement; and
WHEREAS, in consideration of the right of, possession of, and the continued quiet use and enjoyment of the Property during each Rental Period under this Lease Agreement, the City agrees to make certain Lease Payments (as hereinafter defined); and WHEREAS, the City and the Authority have agreed to enter into this Lease Agreement providing for Lease Payments with an aggregate principal component in the amount of $84,000,000 for the purpose of implementing the financing transactions described above; and WHEREAS, the City and the Authority agree to mutually cooperate now and hereafter, to the extent possible, in order to sustain the intent of this Lease Agreement and the bargain of both parties hereto.
AGREEMENT
NOW, THEREFORE, for and in consideration of the premises and the covenants hereinafter contained, the parties hereto hereby formally covenant, agree and bind themselves as follows:
ARTICLE I
DEFINITIONS; RULES OF INTERPRETATION
Section 1.01. Definitions. All terms defined in this Section 1.01 have the meanings herein specified for all purposes of this Lease Agreement.
“Additional Payments” means the amounts specified as such in Section 4.03(b) of this Lease Agreement.
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46700.50057\44875956.3
2 “Authority” means the Ontario Public Financing Authority. “Bond Counsel” means (a) Best Best & Krieger LLP, or (b) any other attorney or firm of attorneys of nationally recognized expertise with respect to legal matters relating to obligations the interest on which is excludable from gross income under Section 103 of the Tax Code. “Business Day” means a day other than a Saturday, Sunday or legal holiday, on which banking institutions are not closed in the State.
“City” means the City of Ontario, California, a municipal corporation and general law city organized and existing under the laws of the State.
“City Representative” means the Mayor, the City Manager, the Executive Director of Finance or the designee of any such official, or any other person authorized by resolution delivered to the Authority to act on behalf of the City under or with respect to the Site Lease and this Lease Agreement.
“Closing Date” means the date this Lease Agreement or a memorandum thereof is recorded in the office of the County Recorder of the County of San Bernardino. “Contract” means any indenture, trust agreement, contract, agreement (other than this Lease Agreement), other contractual restriction, lease, mortgage or instrument. “Event of Default” means any of the events of default as defined in Section 8.01 hereof. “Federal Securities” means any direct general non-callable obligations of the United States of America (including obligations issued or held in book entry form on the books of the Department of the Treasury of the United States of America), or obligations the timely payment of principal of and interest on which are directly guaranteed by the United States of America. “Fiscal Year” means each twelve-month period during the Term of this Lease Agreement commencing on July 1 in any calendar year and ending on June 30 in the next succeeding calendar year, or any other twelve-month period selected by the City as its fiscal year period. “Lease Agreement” means this Lease Agreement, dated as of April 1, 2026, between the Authority and the City.
“Lease Payment Date” means April 1 in each year, commencing April 1, 2027, and continuing to and including the final date on which the Lease Payments are to be paid hereunder, which shall be April 1, 2031.
“Lease Payments” means all payments required to be paid by the City under Section 4.04 hereof, including any prepayment thereof under Sections 9.02 or 9.03 hereof. “Net Proceeds” means any insurance or eminent domain award (including any proceeds of sale to a governmental entity under threat of the exercise of eminent domain powers), paid with respect to the Property, to the extent remaining after payment therefrom of all expenses incurred in the collection thereof.
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46700.50057\44875956.3
3 “Permitted Encumbrances” means, as of any time, (a) liens for general ad valorem taxes and assessments, if any, not then delinquent, or which the City may permit to remain unpaid under Article VI of this Lease Agreement; (b) the Site Lease and this Lease Agreement; (c) any right or claim of any mechanic, laborer, materialman, supplier or vendor not filed or perfected in the manner prescribed by law; (d) the exceptions disclosed in the title insurance policy issued with respect to the Property as of the Closing Date; and (e) any easements, rights of way, mineral rights, drilling rights and other rights, reservations, covenants, conditions or restrictions which exist of record and which the City certifies in writing will not materially impair the use of the Property for its intended purposes.
“Project” means the Project as described in the recitals of this Lease Agreement. “Property” means, collectively, the Site.
“Purchaser” means, collectively, the Water Operating Fund, Water Capital Fund, Equipment Services Fund, Leave Liability Fund, or such other participating fund of the City. “Rental Period” means each period during the Term of this Lease Agreement commencing on and including April 2 in each year and extending to and including the next succeeding April 1.
The first Rental Period begins on the Closing Date and ends on April 1, 2027. “Site” means that certain real property more particularly described in Exhibit A to the Site Lease and in Exhibit A to this Lease Agreement.
“Site Lease” means the Site Lease, dated as of April 1, 2026, by and between the City, as lessor, and the Authority, as lessee, together with any duly authorized and executed amendments thereto.
“State” means the State of California.
“Term of this Lease Agreement” or “Term” means the time during which this Lease Agreement is in effect, as provided in Section 4.02.
Section 1.02. Interpretation.
(a) Unless the context otherwise indicates, words expressed in the singular include the plural and vice versa and the use of the neuter, masculine, or feminine gender is for convenience only and include the neuter, masculine or feminine gender, as appropriate.
(b) Headings of articles and sections herein and the table of contents hereof are solely for convenience of reference, do not constitute a part hereof and do not affect the meaning, construction or effect hereof.
(c) All references herein to “Articles,” “Sections” and other subdivisions are to the corresponding Articles, Sections or subdivisions of this Lease Agreement; the words “herein,” “hereof,” “hereby,” “hereunder” and other words of similar import refer to this 663
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4 Lease Agreement as a whole and not to any particular Article, Section or subdivision hereof.
ARTICLE II
COVENANTS, REPRESENTATIONS AND WARRANTIES
Section 2.01. Covenants, Representations and Warranties of the City. The City makes the following covenants, representations, and warranties to the Authority as of the date of the execution and delivery of this Lease Agreement:
(a) Due Organization and Existence. The City is a municipal corporation and general law city, duly organized and existing under and by virtue of the laws of the State, has full legal right, power and authority under the laws of the State to enter into the Site Lease and this Lease Agreement and to carry out and consummate all transactions on its part contemplated hereby and thereby, and by proper action the City has duly authorized the execution and delivery by the City of the Site Lease and this Lease Agreement. (b) Due Execution. The representative of the City executing the Site Lease and this Lease Agreement has been fully authorized to execute the same by a resolution duly adopted by the City Council of the City.
(c) Valid, Binding and Enforceable Obligations. The Site Lease and this Lease Agreement have been duly authorized, executed and delivered by the City and constitute the legal, valid and binding agreements of the City enforceable against the City in accordance with their respective terms.
(d) No Conflicts. The execution and delivery of the Site Lease and this Lease Agreement, the consummation of the transactions therein and herein contemplated and the fulfillment of or compliance with the terms and conditions thereof and hereof, do not and will not conflict with or constitute a violation or breach of or default (with due notice or the passage of time or both) under any applicable law or administrative rule or regulation, or any applicable court or administrative decree or order, or any indenture, mortgage, deed of trust, lease, contract or other agreement or instrument to which the City is a party or by which it or its properties are otherwise subject or bound, or result in the creation or imposition of any prohibited lien, charge or encumbrance of any nature whatsoever upon any of the property or assets of the City, which conflict, violation, breach, default, lien, charge or encumbrance would have consequences that would materially and adversely affect the consummation of the transactions contemplated by the Site Lease or this Lease Agreement or the financial condition, assets, properties or operations of the City. (e) Consents and Approvals. No consent or approval of any trustee or holder of any indebtedness of the City or of the voters of the City, and no consent, permission, authorization, order or license of, or filing or registration with, any governmental authority is necessary in connection with the execution and delivery of the Site Lease and this Lease Agreement, or the consummation of any transaction therein and herein contemplated, except as have been obtained or made and as are in full force and effect. 664
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5 (f) Sufficient Funds. The City reasonably believes that sufficient funds can be obtained to make all Lease Payments and all other amounts required to be paid pursuant to this Lease Agreement.
(g) No Defaults. In the last ten years, the City has never non-appropriated or defaulted under any of its payment or performance obligations or covenants, either under any financing lease of the same general nature as this Lease Agreement, or under any of its bonds, notes, or other debt obligations.
(h) Fee Title. The City is, or shall be, the owner in fee of title to the Property.
No lien or encumbrance on the Property materially impairs the City’s use of the Property for the purposes for which it is, or may reasonably be expected to be, held. (i) Use of the Property, Essentiality. During the term of this Lease Agreement, the Property will be used by the City only for the purpose of performing one or more governmental or proprietary functions of the City consistent with the permissible scope of the City’s authority. The Property is essential to the City’s efficient and economic operations and the lease thereof for use by the City is in the best interest of the City. (j) Flooding Risk. The Property is not located in a flood hazard area and has never been subject to material damage from flooding.
(k) Value of Property. The value of the Property (real property replacement cost) is not less than $84,000,000.
Section 2.02. Covenants, Representations and Warranties of the Authority. The Authority makes the following covenants, representations and warranties to the City as of the date of the execution and delivery of this Lease Agreement:
(a) The Authority has been duly organized and is validly existing as a corporation under the laws of the State of California with full corporate power to enter into and undertake its duties and obligations hereunder and has sufficient knowledge and experience in financial and business matters, including purchase and ownership of taxexempt municipal obligations, to be able to evaluate the economic risks and merits of the investment represented by the Lease Agreement;
(b) The execution, delivery and performance of this Lease Agreement and the Site Lease have been duly authorized by all necessary corporate actions on the part of the Authority and do not require any further approvals or consents; (c) The execution, delivery and performance of this Lease Agreement and the Site Lease do not and will not result in any breach of or constitute a default under any indenture, mortgage, contract, agreement or instrument to which the Authority is a party by which it or its property is bound;
(d) There is no pending (for which the Authority has been served) or, to the knowledge of the Authority, threatened action or proceeding before any court or 665
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6 administrative agency which will materially adversely affect the ability of the Authority to perform its obligations under this Lease Agreement and the Site Lease; and (e) The Authority will not mortgage or encumber the Property or the Lease Agreement or assign this Lease Agreement or its rights to receive Lease Payments hereunder, except as expressly permitted herein or in the Site Lease.
ARTICLE III
DEPOSIT AND APPLICATION OF FUNDS
Section 3.01. Deposit of and Application of Funds. On the Closing Date, the Authority shall cause the amount of $84,000,000 to be used to fund the amount of the Project.
ARTICLE IV
LEASE OF PROPERTY; LEASE PAYMENTS
Section 4.01. Sublease of Property by the Authority Back to the City. (a) The Authority shall sublease the Property to the City, and the City shall hereby sublease the Property from the Authority, upon the terms and conditions set forth in this Lease Agreement.
(b) The leasing of the Property by the City to the Authority pursuant to the Site Lease shall not affect or result in a merger of the City’s subleasehold estate pursuant to this Lease Agreement and its fee estate as lessor under the Site Lease.
Section 4.02. Term. The Term of this Lease Agreement commences on the Closing Date and ends on April 1, 2031. Unamortized Lease Payments shall be prepaid on April 1, 2031, via a refinancing or the City may cause such unamortized Lease Payments to be prepaid. If on April 1, 2031 the Lease Payments payable hereunder shall have been abated at any time and for any reason and not otherwise paid from rental interruption insurance or other sources, or the City shall have defaulted in its payment of Lease Payments hereunder or any Event of Default has occurred and continues without cure by the City, then the term of this Lease Agreement shall be extended for the actual period of abatement or for so long as the default remains uncured, as necessary to accommodate the final payment of all Lease Payments due hereunder, not to exceed 5 years. The provisions of this Section 4.02 are subject to the provisions of Section 6.01 hereof relating to the taking in eminent domain of the Property or any portion thereof.
Section 4.03. Lease Payments.
(a) Obligation to Pay. Subject to the provisions of Sections 6.01 and 6.03 hereof and the provisions of Article IX, the City agrees to pay to the Authority, its successors and assigns, the Lease Payments (denominated into components of principal and interest) in the respective amounts specified in Exhibit C attached hereto (including any supplements thereto) and by this reference incorporated herein, to be due and payable in immediately available funds on each of the respective Lease Payment Dates specified in 666
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7 Exhibit C. The Lease Payments payable in any Rental Period with respect to the Property shall be for the use of the Property during such Rental Period. The interest components of the Lease Payments have been calculated based on an interest rate of 3.0% per annum, on the basis of a 360-day year of twelve 30-day months. The City understands that the Authority has assigned its right to receive the Lease Payments to the Purchaser. The Authority, at the request of the City, may defer any Lease Payment to the following Lease Payment Date, at which time the interest component of the Lease Payments shall continue to accrue without penalty at the rate of interest herein stated, provided, however, that the Lease Payments shall not be deferred later than April 1, 2031. (b) Additional Payments. In addition to the Lease Payments set forth herein, the City agrees to pay as Additional Payments all of the following:
(i) all taxes and assessments of any nature whatsoever, including but not limited to excise taxes, ad valorem taxes, ad valorem and specific lien special assessments and gross receipts taxes, if any, levied upon the Property or upon any interest of the Authority therein or in this Lease Agreement; provided, however, the City may, at the City’s expense and in its name, in good faith contest any such taxes and assessments and, in the event of such contest, may permit such taxes and assessments to remain unpaid during the period of such contest and appeal therefrom unless the Authority shall notify the City that, in the opinion of Bond Counsel, by nonpayment of any such items, the interest of the Authority in the Property will be materially endangered or the Property, or any portion thereof, will be subject to loss or forfeiture, in which event the City shall promptly pay such taxes and assessments or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority; (ii) insurance premiums, if any, on all insurance required under the provisions of Article V hereof; and
(iii) any other reasonable fees, costs or expenses incurred by the Authority in connection with the execution, performance or enforcement of this Lease Agreement or any of the transactions contemplated hereby or related to the Property, including, without limitation, any amounts which may become due; provided, however, the City shall not be responsible for any costs incurred by the Authority associated with any assignment of this Lease Agreement.
Amounts constituting Additional Payments payable hereunder shall be paid by the City directly to the person or persons to whom such amounts shall be payable. The City shall pay all such amounts when due or at such later time as such amounts may be paid without penalty or, in any other case, within 30 days after notice in writing from the Authority to the City stating the amount of Additional Payments then due and payable and the purpose thereof. (c) Effect of Prepayment. If the City prepays all Lease Payments in full under Sections 9.02 or 9.03 hereof, the City’s obligations under this Section will thereupon cease and terminate. If the City prepays the Lease Payments in part but not in whole under Section 9.03 hereof, the principal components of the remaining Lease Payments will be 667
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8 reduced on a pro rata basis; and the interest component of each remaining Lease Payment will be reduced on a pro rata basis.
(d) Rate on Overdue Payments. If the City fails to make any of the payments required in this Section 4.03, the payment in default will continue as an obligation of the City until the amount in default has been fully paid, and the City agrees to pay the same with interest thereon, from the date of default to the date of payment at the rate of 4.00% per annum or any lesser maximum legal rate.
(e) Fair Rental Value. The Lease Payments coming due and payable during each Rental Period constitute the total rental for the Property for such Rental Period, and will be paid by the City in each Rental Period for and in consideration of the right of the use and occupancy of, and the continued quiet use and enjoyment of the Property during each Rental Period. The parties hereto have agreed and determined that the total Lease Payments due during each Rental Period are not in excess of the fair rental value of the Property during such Rental Periods. In making this determination, consideration has been given to the estimated fair market value of the Property, the estimated replacement cost of the Property, the uses and purposes which may be served by the Property and the benefits therefrom which will accrue to the City and the general public. (f) Source of Payments; Budget and Appropriation. The Lease Payments are payable from any source of legally available funds of the City, subject to the provisions of Sections 6.01, 6.03 and 9.01. The City covenants to take such action as may be necessary to include all Lease Payments in each of its annual budgets during the Term of this Lease Agreement and to make the necessary annual appropriations for all such Lease Payments.
The covenants on the part of the City herein contained constitute duties imposed by law and it is the duty of each and every public official of the City to take such action and do such things as are required by law in the performance of the official duty of such officials to enable the City to carry out and perform the covenants and agreements in this Lease Agreement agreed to be carried out and performed by the City. (g) Allocation of Lease Payments. All Lease Payments received shall be applied first to the interest components of the Lease Payments due hereunder, then to the principal components of the Lease Payments due hereunder, but no such application of any payments that are less than the total rental due and owing shall be deemed a waiver of any default hereunder.
(h) No Offsets. Notwithstanding any dispute between the Authority and the City, the City shall make all Lease Payments when due without deduction or offset of any kind and shall not withhold any Lease Payments pending the final resolution of such dispute.
(i) Payments under this Lease Agreement. The Authority hereby directs the City, and the City hereby agrees, to pay to the Purchaser (or to its assignees as directed pursuant to Section 7.04 hereof) all payments payable by the City under this Section 4.03 and all amounts payable by the City under Article IX.
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9 Section 4.04. Quiet Enjoyment. Throughout the Term of this Lease Agreement, the Authority will provide the City with quiet use and enjoyment of the Property and the City will peaceably and quietly have and hold and enjoy the Property, without suit, trouble or hindrance from the Authority, except as expressly set forth in this Lease Agreement. The Authority will, at the request of the City and at the City’s cost, join in any legal action in which the City asserts its right to such possession and enjoyment to the extent the Authority may lawfully do so.
Notwithstanding the foregoing, the Authority has the right to inspect the Property as provided in Sections 5.12(c) and 7.02 hereof.
Section 4.05. Title. At all times after the purchase and during the Term of this Lease Agreement, the City shall hold title to the Property, including all additions which comprise fixtures, repairs, replacements or modifications thereto, subject to Permitted Encumbrances and subject to the provisions of Section 7.02 hereof.
Upon the termination of this Lease Agreement (other than under Section 8.02(b) hereof), all right, title and interest of the Authority in and to the Property shall be transferred to and vested in the City. Upon the payment in full of all Lease Payments allocable to the Property, or upon the deposit by the City of security for such Lease Payments as provided in Section 9.01 hereof, all right, title and interest of the Authority in and to the Property shall be transferred to and vested in the City. The Authority agrees to take any and all steps and execute and record any and all documents reasonably required by the City to consummate any such transfer.
Section 4.06. Release of Excess Property. The City may, at any time and from time to time, release any portion of the Property (the “Released Property”) from this Lease Agreement, with the prior written consent of the Authority, which consent shall be at the Authority’s sole discretion, and upon satisfaction of all of the following requirements which are conditions precedent to such release:
(a) The City shall certify to the Authority that no Event of Default has occurred and is continuing, and no event giving rise to an abatement of Lease Payments under Section 6.03 hereof has occurred or is continuing with respect to the Property to be remaining following release of the Released Property;
(b) The City shall file with the Authority, and cause to be recorded in the office of the San Bernardino County Recorder, an amendment to this Lease Agreement which deletes the Released Property from the description of the Property; (c) The City shall file with the Authority a written certificate of the City stating the City’s determination that the estimated fair rental value, for each remaining Rental Period and in the aggregate, of the Property remaining after release of the Released Property is at least equal to the remaining Lease Payments for each remaining Rental Period and in the aggregate; and
(d) The City shall file with the Authority such other information, documents and instruments as the Authority shall reasonably request, including (if requested by the Authority) evidence of the insurable value of the Property to be remaining following release of the Released Property, indicating that such value is in excess of the then unpaid 669
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10 principal component of the Lease Payments and such endorsements to the title policy delivered on the Closing Date.
Upon the satisfaction of all such conditions precedent, the Term of this Lease Agreement will thereupon end as to the Released Property. The City is not entitled to any reduction, diminution, extension or other modification of the Lease Payments whatsoever as a result of such release. The Authority and the City shall execute, deliver and cause to be recorded all documents required to discharge this Lease Agreement of record against the Released Property.
Section 4.07. Substitution of Property.
The City may at any time and from time to time, with the prior written consent of the Authority, substitute other real property (the “Substitute Property”) for the Property, or any portion thereof (the “Former Property”), provided that the City satisfies all of the following requirements which are conditions precedent to such substitution:
(i) No Event of Default shall have occurred and be continuing and no event giving rise to an abatement of Lease Payments under Section 6.3 hereof shall have occurred and be continuing with respect to the Substitute Property; (ii) The City shall file with the Authority, and cause to be recorded in the office of the San Bernardino County Recorder sufficient memorialization of, an amendment of the Lease Agreement which adds to Exhibit B thereto a description of such Substitute Property and deletes therefrom the description of such Former Property; (iii) The City shall certify in writing to the Authority that such Substitute Property serves the municipal purposes of the City and constitutes property which the City is permitted to lease under the Laws of the State of California, and has been determined to be essential to the proper, efficient and economic operation of the City and to serve an essential governmental function of the City;
(iv) The Substitute Property shall not cause the City to violate any of its covenants, representations and warranties made in this Lease Agreement; (v) The City shall file with the Authority an appraisal or other written documentation which establishes that the fair market value and the fair rental value of the Substitute Property are at least equal to the present value of the remaining Lease Payments in the aggregate and for each remaining Rental Period, respectively, and that the useful life of the Substitute Property at least equals the lesser of (i) the useful life of the Former Property; or (ii) the final Lease Payment Date of the Lease Payments allocable thereto; and (vi) In the event of damage or destruction of the Leased Property from earthquake or other uninsured peril, the City shall substitute under this Lease Agreement other unencumbered real property of a value and useful life not less than the outstanding principal component of the Lease Payments and the remaining term of this Lease Agreement.
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11 Upon the satisfaction of all such conditions precedent, the Term of this Lease Agreement shall thereupon end as to the Former Property and shall thereupon commence as to the Substitute Property, and all references to the Former Property shall apply with full force and effect to the Substitute Property. The City shall not be entitled to any reduction, diminution, extension or other modification of the Lease Payments whatsoever as a result of such substitution. The Authority and the City shall execute, deliver and cause to be recorded all documents required to discharge the Lease Agreement of record against the Former Property.
ARTICLE V
MAINTENANCE; TAXES; INSURANCE; AND OTHER MATTERS
Section 5.01. Maintenance, Utilities, Taxes and Assessments. Throughout the Term of this Lease Agreement, as part of the consideration for the rental of the Property, all improvement, repair and maintenance of the Property are the sole responsibility of the City, and the City will pay for or otherwise arrange for the payment of all utility services supplied to the Property, which may include, without limitation, janitor service, security, power, gas, telephone, light, heating, water and all other utility services, and shall pay for or otherwise arrange for the payment of the cost of the repair and replacement of the Property resulting from ordinary wear and tear or want of care on the part of the City or any assignee or sublessee thereof. In exchange for the Lease Payments herein provided, the Authority agrees to provide only the Property, as hereinbefore more specifically set forth. The City waives the benefits of subsections 1 and 2 of Section 1932, Section 1933(4) and Sections 1941 and 1942 of the California Civil Code, but such waiver does not limit any of the rights of the City under the terms of this Lease Agreement.
The City will pay or cause to be paid all taxes and assessments of any type or nature, if any, charged to the Authority or the City affecting the Property or the respective interests or estates therein; provided that with respect to special assessments or other governmental charges that may lawfully be paid in installments over a period of years, the City is obligated to pay only such installments as are required to be paid during the Term of this Lease Agreement as and when the same become due.
The City may, at the City’s expense and in its name, in good faith contest any such taxes, assessments, utility and other charges and, in the event of any such contest, may permit the taxes, assessments or other charges so contested to remain unpaid during the period of such contest and any appeal therefrom unless the Authority shall notify the City that, in its reasonable opinion, by nonpayment of any such items the interest of the Authority in the Property will be materially endangered or the Property or any part thereof will be subject to loss or forfeiture, in which event the City will promptly pay such taxes, assessments or charges or provide the Authority with full security against any loss which may result from nonpayment, in form satisfactory to the Authority.
The City shall promptly notify the Authority of any tax, assessment, utility or other charge it elects to contest.
Section 5.02. Modification of Property. The City has the right, at its own expense, to make additions, modifications and improvements to the Property or any portion thereof. All additions, modifications and improvements to the Property will thereafter comprise part of the Property and become subject to the provisions of this Lease Agreement. Such additions, 671
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12 modifications and improvements may not in any way damage the Property, or cause the Property to be used for purposes other than those authorized under the provisions of state and federal law; and the Property, upon completion of any additions, modifications and improvements made thereto under this Section, must be of a value which is not substantially less than the value thereof immediately prior to the making of such additions, modifications and improvements.
Section 5.03. Public Liability Insurance. The City shall maintain or cause to be maintained throughout the Term of this Lease Agreement a standard comprehensive general liability insurance policy or policies in protection of the City, the Authority and their respective members, officers, agents, employees and assigns. Said policy or policies shall provide for indemnification of said parties against direct or contingent loss or liability for damages for bodily and personal injury, death or property damage occasioned by reason of the operation of the Property. Such policy or policies must provide coverage with limits of at least $1,000,000 per occurrence, $3,000,000 in the aggregate, for bodily injury and property damage coverage, and excess liability umbrella coverage of at least $5,000,000, and in all events in form and amount (including any deductibles) satisfactory to the Authority. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including, with Authority’s prior written consent, a self-insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. The City will apply the proceeds of such liability insurance toward extinguishment or satisfaction of the liability with respect to which such proceeds have been paid.
Section 5.04. Casualty Insurance. The City will procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease Agreement, casualty insurance against loss or damage to all buildings situated on the Property and owned by the City, in an amount at least equal to the greater of the replacement value of the insured buildings and the aggregate principal amount of the Lease Payments outstanding, with a lender’s loss payable endorsement.
Such insurance must, as nearly as practicable, cover loss or damage by all “special form” perils.
Such insurance shall be subject to a deductible of not to exceed $250,000. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including, with the Purchaser’s prior written consent, a self-insurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance. The City will apply the Net Proceeds of such insurance as provided in Section 6.02 hereof.
Section 5.05. Rental Interruption Insurance. The City will procure and maintain, or cause to be procured and maintained, throughout the Term of this Lease Agreement, rental interruption or use and occupancy insurance to cover loss, total or partial, of the use of the Property and the improvements situated thereon as a result of any of the hazards covered in the insurance required by Section 5.04 hereof, in an amount at least equal to the maximum Lease Payments coming due and payable during any future 24-month period. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City, and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance; provided that such rental interruption insurance shall not be self-insured by the City. The City will apply the Net Proceeds of such insurance towards the payment of the Lease Payments allocable to the insured improvements as the same become due and payable.
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13 Section 5.06. Workers’ Compensation Insurance. If required by applicable California law, the City shall carry workers’ compensation insurance covering all employees on, in, near or about the Property and, upon request, shall furnish to the Authority certificates evidencing such coverage throughout the Term of this Lease Agreement. Such insurance may be maintained as part of or in conjunction with any other insurance coverage carried by the City (including a selfinsurance program), and may be maintained in whole or in part in the form of the participation by the City in a joint powers authority or other program providing pooled insurance.
Section 5.07. Insurance Net Proceeds; Form of Policies. All insurance policies (or riders) required by this Article V and provided by third party insurance carriers shall be taken out and maintained with responsible insurance companies organized under the laws of one of the states of the United States and qualified to do business in the State, and shall contain a provision that the insurer shall not cancel or revise coverage thereunder without giving written notice to the insured parties at least ten days before the cancellation or revision becomes effective. Each insurance policy or rider required by Sections 5.03, 5.04 and 5.05 hereof and provided by third party insurance carriers shall name the City and the Authority as insured parties and the Authority as loss payee and shall include a lender’s loss payable endorsement for the benefit of the Authority.
In the case of coverage pursuant to Section 5.03 hereof, the Authority shall be added as an additional insured. Prior to the Closing Date, the City will deposit with the Authority policies (and riders and endorsements, if applicable) evidencing any such insurance procured by it, or a certificate or certificates of the respective insurers stating that such insurance is in full force and effect. Before the expiration of any such policy (or rider), the City will furnish to the Authority evidence that the policy has been renewed or replaced by another policy conforming to the provisions of this Article V unless such insurance is no longer obtainable, in which event the City shall notify the Authority of such fact.
Section 5.08. Installation of City’s Personal Property. The City may at any time and from time to time, in its sole discretion and at its own expense, install or permit to be installed other items of equipment or other personal property in or upon the Property. All such items shall remain the sole property of the City, in which the Authority has no interest, and may be modified or removed by the City at any time. The City must repair and restore any and all damage to the Property resulting from the installation, modification or removal of any such items. Nothing in this Lease Agreement prevents the City from purchasing or leasing items to be installed under this Section under a lease or conditional sale agreement, or subject to a vendor’s lien or security agreement, as security for the unpaid portion of the purchase price thereof, provided that no such lien or security interest may attach to any part of the Property.
Section 5.09. Liens. The City will not, directly or indirectly, create, incur, assume or suffer to exist any mortgage, pledge, lien, charge, encumbrance or claim on or with respect to the Property, other than as herein contemplated and except for such encumbrances as the City certifies in writing to the Authority do not materially and adversely affect the leasehold estate in the Property hereunder and for which the Authority provides its prior written approval, which approval shall be at Authority’s sole discretion. Except as expressly provided in this Article V, the City will promptly, at its own expense, take such action as may be necessary to duly discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim, for which it is responsible, if the same shall arise at any time. The City will reimburse the Authority for any expense incurred 673
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14 by it in order to discharge or remove any such mortgage, pledge, lien, charge, encumbrance or claim.
Section 5.10. Advances. If the City fails to perform any of its obligations under this Article V, the Authority may take such action as may be necessary to cure such failure, including the advancement of money, and the City shall be obligated to repay all such advances as additional rental hereunder, with interest at the rate set forth in Section 4.03(c) hereof.
Section 5.11. Environmental Covenants.
(a) Compliance with Laws; No Hazardous Substances. The City will comply with all Applicable Environmental Laws with respect to the Property and will not use, store, generate, treat, transport, or dispose of any Hazardous Substance thereon or in a manner that would cause any Hazardous Substance to later flow, migrate, leak, leach, or otherwise come to rest on or in the Property.
(b) Notification of Authority. The City will transmit copies of all notices, orders, or statements received from any governmental entity concerning violations or asserted violations of Applicable Environmental Laws with respect to the Property and any operations conducted thereon or any conditions existing thereon to the Authority, and the City will notify the Authority in writing immediately of any release, discharge, spill, or deposit of any Hazardous Substance that has occurred or is occurring that in any way affects or threatens to affect the Property, or the people, structures, or other property thereon, provided that no such notification shall create any liability or obligation on the part of the Authority.
(c) Access for Inspection. The City will permit the Authority, its agents, or any experts designated by the Authority to have full access to the Property during reasonable business hours for purposes of such independent investigation of compliance with all Applicable Environmental Laws, provided that the Authority has no obligation to do so, or any liability for any failure to do so, or any liability should it do so.
ARTICLE VI
EMINENT DOMAIN; USE OF NET PROCEEDS
Section 6.01. Eminent Domain. If all of the Property shall be taken permanently under the power of eminent domain or sold to a governmental entity threatening to exercise the power of eminent domain, the Term of this Lease Agreement shall cease as of the day possession shall be so taken. If less than all of the Property shall be taken permanently, or if all of the Property or any part thereof shall be taken temporarily under the power of eminent domain, (a) this Lease Agreement shall continue in full force and effect and shall not be terminated by virtue of such taking and the parties waive the benefit of any law to the contrary, and (b) there shall be a partial abatement of Lease Payments in an amount equal to the application of the Net Proceeds of any eminent domain award to the prepayment of the Lease Payments hereunder, in an amount to be agreed upon by the City and the Authority such that the resulting Lease Payments represent fair consideration for the use and occupancy of the remaining usable portion of the Property. 674
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15 Section 6.02. Application of Net Proceeds.
(a) From Insurance Award.
(i) Any Net Proceeds of insurance against damage to or destruction of any part of the Property collected by the City in the event of any such damage or destruction shall be deposited by the City promptly upon receipt thereof in a special fund with the Authority designated as the “Insurance and Condemnation Fund.” (ii) Within 90 days following the date of such deposit, the City shall determine and notify the Authority in writing of its determination either (A) that the replacement, repair, restoration, modification or improvement of the Property is not economically feasible or in the best interest of the City and the Net Proceeds, together with other moneys available therefor, are sufficient to cause the prepayment of the principal components of all unpaid Lease Payments pursuant to Section 9.03 hereof, or (B) that all or a portion of such Net Proceeds are to be applied to the prompt replacement, repair, restoration, modification or improvement of the damaged or destroyed portions of the Property and the fair rental value of the Property following such repair, restoration, replacement, modification or improvement will at least equal the unpaid principal component of the Lease Payments.
(iii) In the event the City’s determination is as set forth in clause (A) of subparagraph (ii) above, such Net Proceeds shall be promptly applied to the prepayment of Lease Payments and other amounts pursuant to Section 9.03 hereof; provided, however, that in the event of damage or destruction of the Property in full, such Net Proceeds may be so applied only if sufficient, together with other moneys available therefor, to cause the prepayment of the principal components of all unpaid Lease Payments, all accrued and unpaid interest, Prepayment Premiums described in Section 9.02 hereof, and all other costs related to such prepayments pursuant to Section 9.03 hereof and otherwise such Net Proceeds shall be applied to the prompt replacement, repair, restoration, modification or improvement of the Property; provided further, however, that in the event of damage or destruction of the Property in part, such Net Proceeds may be applied to the prepayment of Lease Payments only if the resulting Lease Payments following such prepayment from Net Proceeds represent fair consideration for the remaining portions of the Property and otherwise such Net Proceeds shall be applied to the prompt replacement, repair, restoration, modification or improvement of the Property, evidenced by a certificate signed by a City Representative.
(iv) In the event the City’s determination is as set forth in clause (B) of subparagraph (ii) above, such Net Proceeds shall be applied to the prompt replacement, repair, restoration, modification or improvement of the damaged or destroyed portions of the Property by the City, and until the Property has been restored to its prior condition, the City shall not place any lien or encumbrance on the Property that is senior to this Lease Agreement without the prior written consent of the Authority, at its sole discretion.
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16 (b) From Eminent Domain Award. If all or any part of the Property shall be taken by eminent domain proceedings (or sold to a government threatening to exercise the power of eminent domain) the Net Proceeds therefrom shall be deposited by the City in the Insurance and Condemnation Fund and shall be applied and disbursed as follows:
(i) If the City has given written notice to the Authority of its determination that (A) such eminent domain proceedings have not materially affected the operation of the Property or the ability of the City to meet any of its obligations with respect to the Property under this Lease Agreement, and (B) such proceeds are not needed for repair or rehabilitation of the Property, the City shall so certify to the Authority and the Authority, and the City shall credit such proceeds towards the prepayment of the Lease Payments pursuant to Section 9.03 hereof. (ii) If the City has given written notice to the Authority and the Authority of its determination that (A) such eminent domain proceedings have not materially affected the operation of the Property or the ability of the City to meet any of its obligations with respect to the Property under this Lease Agreement, and (B) such proceeds are needed for repair, rehabilitation or replacement of the Property, the City shall so certify to the Authority, and the City shall apply such amounts for such repair or rehabilitation.
(iii) If (A) less than all of the Property shall have been taken in such eminent domain proceedings or sold to a government threatening the use of eminent domain powers, and if the City has given written notice to the Authority of its determination that such eminent domain proceedings have materially affected the operation of the Property or the ability of the City to meet any of its obligations with respect to the Property under the Lease Agreement or (B) all of the Property shall have been taken in such eminent domain proceedings, then the City shall credit such proceeds towards the prepayment of the Lease Payments pursuant to Section 9.03 hereof.
(iv) In making any determination under this Section 6.02(b), the City may, but shall not be required to, obtain at its expense, the report of an independent engineer or other independent professional consultant, a copy of which shall be filed with the Authority. Any such determination by the City shall be final. (c) From Title Insurance. The Net Proceeds from a title insurance award shall be deposited by the City in the Insurance and Condemnation Fund and credited towards the prepayment of Lease Payments required to be paid pursuant to Section 9.03 hereof.
Section 6.03. Abatement of Lease Payments in the Event of Damage or Destruction.
Lease Payments shall be abated during any period in which, by reason of damage or destruction, there is substantial interference with the use and occupancy by the City of the Property or any portion thereof to the extent to be agreed upon by the City and the Authority. The parties agree that the amounts of the Lease Payments under such circumstances shall not be less than the amounts of the unpaid Lease Payments as are then set forth in Exhibit C, unless such unpaid amounts are determined to be greater than the fair rental value of the portions of the Property not 676
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17 damaged or destroyed, based upon an appropriate method of valuation, in which event the Lease Payments shall be abated such that they represent said fair rental value. Such abatement shall continue for the period commencing with such damage or destruction and ending with the substantial completion of the work of repair or reconstruction as evidenced by a Certificate of a City Representative to the Authority. In the event of any such damage or destruction, this Lease Agreement shall continue in full force and effect and the City waives any right to terminate this Lease Agreement by virtue of any such damage and destruction. Notwithstanding the foregoing, there shall be no abatement of Lease Payments under this Section 6.03 to the extent that (a) the proceeds of rental interruption insurance or (b) amounts in the Insurance and Condemnation Fund are available to pay Lease Payments which would otherwise be abated under this Section 6.03, it being hereby declared that such proceeds and amounts constitute special funds for the payment of the Lease Payments.
ARTICLE VII
OTHER COVENANTS OF THE CITY
Section 7.01. Disclaimer of Warranties. THE AUTHORITY MAKES NO
AGREEMENT, WARRANTY OR REPRESENTATION, EITHER EXPRESS OR IMPLIED, AS
TO THE VALUE, DESIGN, CONDITION, MERCHANTABILITY OR FITNESS FOR ANY
PARTICULAR PURPOSE OR FITNESS FOR THE USE CONTEMPLATED BY THE CITY OF
THE PROPERTY OR ANY PORTION THEREOF, OR ANY OTHER REPRESENTATION OR WARRANTY WITH RESPECT TO THE PROPERTY OR ANY PORTION THEREOF. THE
CITY ACKNOWLEDGES THAT THE CITY LEASES THE PROPERTY AS-IS, IT BEING
AGREED THAT ALL OF THE AFOREMENTIONED RISKS ARE TO BE BORNE BY THE CITY. In no event is the Authority liable for incidental, indirect, special or consequential damages, in connection with or arising out of this Lease Agreement for the existence, furnishing, functioning or use of the Property by the City.
Section 7.02. Access to the Property; Grant and Conveyance of Right of Entry. The City agrees that the Authority, and the Authority’s successors or assigns, has the right at all reasonable times, following at least 48 hours written notice provided to the City, to enter upon and to examine and inspect (to the extent permitted by law and public policy) the Property or any part thereof. The City further agrees that the Authority, and the Authority’s successors or assigns shall have such rights of access to the Property or any component thereof, following at least 48 hours written notice provided to the City, as may be reasonably necessary to cause the proper maintenance of the Property if the City fails to perform its obligations hereunder. Neither the Authority nor any of its assigns has any obligation to cause such proper maintenance.
The City further grants, conveys and confirms to the Authority, for the use, benefit and enjoyment of the Authority, its successors in interest to the Property, including the Authority, and its sublessees, and their respective employees, invitees, agents, independent contractors, patrons, customers, guests and members of the public visiting the Property, a right of entry which shall be irrevocable for the Term of this Lease Agreement over, across and under the property of the City adjacent to the Property to and from the Property for the purpose of: (a) ingress, egress, passage or access to and from the Property by pedestrian or vehicular traffic; (b) installation, maintenance 677
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18 and replacement of utility wires, cables, conduits and pipes; and (c) other purposes and uses necessary or desirable for access to and from and for operation and maintenance of the Property.
Section 7.03. Release and Indemnification Covenants. To the extent permitted by law, the City hereby indemnifies the Authority, and its directors, officers, agents, employees, successors and assigns against all claims, losses and damages, including legal fees and expenses, arising out of (a) the use, maintenance, condition or management of, or from any work or thing done on the Property by the City or the City’s employees, agents, contractors, invitees or licensees, (b) any breach or default on the part of the City in the performance of any of its obligations under this Lease Agreement, (c) any negligence or willful misconduct of the City or of any of its agents, contractors, servants, employees or licensees with respect to the Property, (d) any intentional misconduct or negligence of any sublessee of the City with respect to the Property, (e) the acquisition, construction, improvement and equipping of the Property, (f) the clean-up of any Hazardous Substances or toxic wastes from the Property, or (g) any claim alleging violation of any Applicable Environmental Laws, or the authorization of payment of the costs thereof. No indemnification is made under this Section 7.03 or elsewhere in this Lease Agreement for willful misconduct or gross negligence under this Lease Agreement by the Authority, or its respective officers, agents, employees, successors or assigns. The indemnification hereunder shall continue in full force and effect notwithstanding the full payment of all obligations under this Lease Agreement or the termination of the Term of this Lease Agreement for any reason. The City and the Authority each agree to promptly give notice to each other and the Authority of any claim or liability hereby indemnified against following learning thereof.
Section 7.04. Assignment by the Authority. The Authority may assign its rights, title and interests herein, but no such assignment will be effective as against the City unless and until the Authority has filed with the City at least five Business Days’ prior written notice thereof and an executed copy of a letter addressed to the City and the Authority substantially in the form of the letter delivered by the Authority on the Closing Date attached hereto as Exhibit D. The City shall pay all Lease Payments hereunder to the Authority, as provided in Section 4.03(h) hereof, or under the written direction of the assignee named in the most recent assignment or notice of assignment filed with the City. During the Term of this Lease Agreement, the City will keep a complete and accurate record of all such notices of assignment.
Section 7.05. Assignment Agreement and Subleasing by the City. This Lease Agreement may not be assigned, mortgaged, pledged or transferred by the City. The City may sublease the Property, or any portion thereof, with the prior written consent of the Authority, at the Authority’s sole discretion, subject to all of the following conditions:
(a) This Lease Agreement and the obligation of the City to make Lease Payments hereunder shall remain obligations of the City, and any sublease shall be subject and subordinate to this Lease Agreement.
(b) The City shall, within 30 days after the delivery thereof, furnish or cause to be furnished to the Authority a true and complete copy of such sublease. (c) No such sublease by the City may cause the Property to be used for a purpose other than as may be authorized under the provisions of the laws of the State. 678
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19 (d) The City shall furnish the Authority with a written opinion of Bond Counsel stating that such sublease does not cause the interest components of the Lease Payments to become includable in gross income for purposes of federal income taxation or to become subject to personal income taxation by the State.
(e) Any such sublease shall be subject and subordinate in all respects to the Site Lease and this Lease Agreement.
Notwithstanding the foregoing, in connection with any sublease entered into for financing purposes, the principal component of the then remaining Lease Payments plus the principal component of the sublease payments shall not exceed the fair market value of the Property.
Section 7.06. Amendment of Lease Agreement. This Lease Agreement may be amended in writing by the parties hereto.
Section 7.07. Records and Accounts. The City covenants and agrees that it shall keep proper books of record and accounts of its operations, in which complete and correct entries shall be made of all transactions relating to the City. Said books and records shall at all reasonable times be subject to the inspection of the Authority upon 72 hours’ prior notice.
Section 7.08. Observance of Laws and Regulations. The City will well and truly keep, observe and perform or cause to be kept, observed and performed all valid and lawful obligations or regulations now or hereafter imposed on it by contract, or prescribed by any law of the United States, or of the State, or by any officer, board or commission having jurisdiction or control, as a condition of the continued enjoyment of any and every right, privilege or franchise now owned or hereafter acquired and enjoyed by the City, including the City’s right to exist and carry on business as a municipal corporation, to the end that such rights, privileges and franchises shall be maintained and preserved, and shall not become abandoned, forfeited or in any manner impaired.
ARTICLE VIII
EVENTS OF DEFAULT AND REMEDIES
Section 8.01. Events of Default Defined. Any one or more of the following events constitutes an Event of Default hereunder:
(a) Failure by the City to pay any Lease Payment or other payment required to be paid hereunder at the time specified herein.
(b) Failure by the City to observe and perform any material covenant, condition or agreement on its part to be observed or performed hereunder, other than as referred to in the preceding clause (a) of this Section, for a period of 30 days after written notice specifying such failure and requesting that it be remedied has been given to the City by the Authority. If, however, in the reasonable opinion of the City the failure stated in the notice can be corrected, but not within such 30-day period, the Authority shall not unreasonably withhold their consent to an extension of such time (for a period not to exceed 60 days) if corrective action is instituted by the City within such 30-day period and diligently pursued until the default is corrected.
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20 (c) The filing by the City of a voluntary petition in bankruptcy, or failure by the City promptly to lift any execution, garnishment or attachment, or adjudication of the City as a bankrupt, or assignment by the City for the benefit of creditors, or the entry by the City into an agreement of composition with creditors, or the approval by a court of competent jurisdiction of a petition applicable to the City in any proceedings instituted under the provisions of the Federal Bankruptcy Code, as amended, or under any similar federal or State act now existing or which may hereafter be enacted. (d) Any statement, representation or warranty made by the City in or pursuant to this Lease Agreement or its execution, delivery or performance shall have been false, incorrect, misleading or breached in any material respect on the date when made. (e) Any default occurs under any other agreement for borrowing money, lease financing of property or otherwise receiving credit under which the City is an obligor, if such default (i) arises under any other agreement for borrowing money, lease financing of property or provision of credit provided by the Authority or any affiliate of the Authority, or (ii) arises under any obligation under which there is outstanding, owing or committed an aggregated amount in excess of $2,000,000.
(f) Any default by the City to observe any material covenant, condition or agreement on its part to be observed or performed under the Site Lease. (g) Any court of competent jurisdiction shall find or rule that the Site Lease or this Lease Agreement is not valid or binding against the City. (h) Any Material Adverse Effect shall exist.
Section 8.02. Remedies on Default. Whenever any Event of Default has happened and is continuing, the Authority may exercise any and all remedies available under law or granted under this Lease Agreement; provided, however, that notwithstanding anything herein to the contrary, there shall be no right under any circumstances to accelerate the Lease Payments or otherwise declare any Lease Payments not then in default to be immediately due and payable.
Each and every covenant hereof to be kept and performed by the City is expressly made a condition and upon the breach thereof the Authority may exercise any and all rights granted hereunder; provided, that no termination of this Lease Agreement shall be effected either by operation of law or acts of the parties hereto, except only in the manner herein expressly provided. Upon the occurrence and during the continuance of any Event of Default, the Authority may exercise any one or more of the following remedies:
(a) Enforcement of Payments Without Termination. If the Authority does not elect to terminate this Lease Agreement in the manner hereinafter provided for in subparagraph (b) hereof, the City agrees to and shall remain liable for the payment of all Lease Payments and the performance of all conditions herein contained and shall reimburse the Authority for any deficiency arising out of the re-leasing of the Property, or, if the Authority is unable to re-lease the Property, then for the full amount of all Lease Payments to the end of the Term of this Lease Agreement, but said Lease Payments and/or deficiency shall be payable only at the same time and in the same manner as hereinabove provided for 680
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21 the payment of Lease Payments hereunder, notwithstanding such entry or re-entry by the Authority or any suit in unlawful detainer, or otherwise, brought by the Authority for the purpose of effecting such re-entry or obtaining possession of the Property or the exercise of any other remedy by the Authority. The City hereby irrevocably appoints the Authority as the agent and attorney-in-fact of the City to enter upon and re-lease the Property upon the occurrence and continuation of an Event of Default and to remove all personal property whatsoever situated upon the Property, to place such property in storage or other suitable place in San Bernardino County for the account of and at the expense of the City, and the City hereby exempts and agrees to save harmless the Authority from any costs, loss or damage whatsoever arising or occasioned by any such entry upon and re-leasing of the Property and the removal and storage of such property by the Authority or its duly authorized agents in accordance with the provisions herein contained. The City agrees that the terms of this Lease Agreement constitute full and sufficient notice of the right of the Authority to re-lease the Property in the event of such re-entry without effecting a surrender of this Lease Agreement, and further agrees that no acts of the Authority in effecting such re-leasing shall constitute a surrender or termination of this Lease Agreement irrespective of the term for which such re-leasing is made or the terms and conditions of such re-leasing, or otherwise, but that, on the contrary, in the event of such default by the City the right to terminate this Lease Agreement shall vest in the Authority to be effected in the sole and exclusive manner hereinafter provided for in subparagraph (b) hereof. The City agrees to surrender and quit possession of the Property upon demand of the Authority for the purpose of enabling the Property to be re-let under this paragraph. Any rental obtained by the Authority in excess of the sum of Lease Payments plus costs and expenses incurred by the Authority for its services in re-leasing the Property shall be paid to the City. (b) Termination of Lease. If an Event of Default occurs and is continuing hereunder, the Authority at its option may terminate this Lease Agreement and re-lease all or any portion of the Property, subject to the Site Lease. If the Authority terminates this Lease Agreement at its option and in the manner hereinafter provided due to a default by the City (and notwithstanding any re-entry upon the Property by the Authority in any manner whatsoever or the re-leasing of the Property), the City nevertheless agrees to pay to the Authority all costs, loss or damages howsoever arising or occurring payable at the same time and in the same manner as is herein provided in the case of payment of Lease Payments and Additional Payments. Any surplus received by the Authority from such releasing shall be applied by the Authority to Lease Payments due under this Lease Agreement. Neither notice to pay rent or to deliver up possession of the premises given under law nor any proceeding in unlawful detainer taken by the Authority shall of itself operate to terminate this Lease Agreement, and no termination of this Lease Agreement on account of default by the City shall be or become effective by operation of law, or otherwise, unless and until the Authority shall have given written notice to the City of the election on the part of the Authority to terminate this Lease Agreement. The City covenants and agrees that no surrender of the Property, or of the remainder of the Term hereof or any termination of this Lease Agreement shall be valid in any manner or for any purpose whatsoever unless stated or accepted by the Authority by such written notice. (c) Proceedings at Law or In Equity. If an Event of Default occurs and continues hereunder, the Authority may take whatever action at law or in equity may appear 681
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22 necessary or desirable to collect the amounts then due and thereafter to become due hereunder or to enforce any other of its rights hereunder. (d) Remedies under the Site Lease. If an Event of Default occurs and continues hereunder, the Authority may exercise its rights under the Site Lease.
Section 8.03. No Remedy Exclusive. No remedy herein conferred upon or reserved to the Authority is intended to be exclusive and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Lease Agreement or now or hereafter existing at law or in equity. No delay or omission to exercise any right or power accruing upon the occurrence of any Event of Default shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient. In order to entitle the Authority to exercise any remedy reserved to it in this Article VIII it shall not be necessary to give any notice, other than such notice as may be required in this Article VIII or by law.
Section 8.04. Agreement to Pay Attorneys’ Fees and Expenses. If either party to this Lease Agreement defaults under any of the provisions hereof and the nondefaulting party should employ attorneys (including in-house legal counsel) or incur other expenses for the collection of moneys or the enforcement or performance or observance of any obligation or agreement on the part of the defaulting party herein contained, the defaulting party agrees that it will on demand therefor pay to the nondefaulting party the reasonable fees of such attorneys (including allocable costs and expenses of in-house legal counsel, if any) and such other expenses so incurred by the nondefaulting party.
Section 8.05. No Additional Waiver Implied by One Waiver. If any agreement contained in this Lease Agreement is breached by either party and thereafter waived by the other party, such waiver is limited to the particular breach so waived and will not be deemed to waive any other breach hereunder.
Section 8.06. Judicial Reference.
(a) Judicial Reference. The Authority and the City hereby agree: (i) each proceeding or hearing based upon or arising out of, directly or indirectly, this Lease Agreement, the Site Lease, the Property or any document related thereto, any dealings between the City and the Authority related to the subject matter of this Lease Agreement, the Site Lease or any related transactions, and/or the relationship that is being established between the City and the Authority (hereinafter, a “Claim”) shall be determined by a consensual general judicial reference (the “Reference”) pursuant to the provisions of Section 638 et seq. of the California Code of Civil Procedure, as such statutes may be amended or modified from time to time; (ii) upon a written request, or upon an appropriate motion by either the Authority or the City, as applicable, any pending action relating to any Claim and every Claim shall be heard by a single Referee (as defined below) who shall then try all issues (including any and all questions of law and questions of fact relating thereto), and issue findings of fact and conclusions of law and report a statement of decision. The Referee’s statement of decision will constitute the conclusive determination of the Claim. The Authority and the City agree that the Referee shall have the power to 682
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23 issue all legal and equitable relief appropriate under the circumstances before the Referee; (iii) the Authority and the City shall promptly and diligently cooperate with one another, as applicable, and the Referee, and shall perform such acts as may be necessary to obtain prompt and expeditious resolution of all Claims in accordance with the terms of this Section 8.7; (iv) either the Authority or the City, as applicable, may file the Referee’s findings, conclusions and statement with the clerk or judge of any appropriate court, file a motion to confirm the Referee’s report and have judgment entered thereon. If the report is deemed incomplete by such court, the Referee may be required to complete the report and resubmit it; (v) the Authority and the City, as applicable, will each have such rights to assert such objections as are set forth in Section 638 et seq. of the California Code of Civil Procedure; and (vi) all proceedings shall be closed to the public and confidential, and all records relating to the Reference shall be permanently sealed when the order thereon becomes final.
(b) Selection of Referee; Powers. The parties to the Reference proceeding shall select a single neutral referee (the “Referee”), who shall be a retired judge or justice of the courts of the State of California, or a federal court judge, in each case, with at least ten (10) years of judicial experience in civil matters. The Referee shall be appointed in accordance with Section 638 of the California Code of Civil Procedure (or pursuant to comparable provisions of federal law if the dispute falls within the exclusive jurisdiction of the federal courts). If within ten (10) days after the request or motion for the Reference, the parties to the Reference proceeding cannot agree upon a Referee, then any party to such proceeding may request or move that the Referee be appointed by the Presiding Judge of the San Bernardino County Superior Court, or of the U.S. District Court for the Southern District of California. The Referee shall determine all issues relating to the applicability, interpretation, legality and enforceability of this Section 8.7. (c) Provisional Remedies and Self Help. No provision of this Section 8.7 shall limit the right of either the Authority or the City, as the case may be, to (i) exercise such self-help remedies as might otherwise be available under applicable law, or (ii) ) obtain or oppose provisional or ancillary remedies, including without limitation injunctive relief, writs of possession, the appointment of a receiver, and/or additional or supplementary remedies from a court of competent jurisdiction before, after, or during the pendency of any Reference. The exercise of, or opposition to, any such remedy does not waive the right of the Authority or the City to the Reference pursuant to this Section 8.7(c). (d) Costs and Fees. Promptly following the selection of the Referee, the parties to such Reference proceeding shall each advance equal portions of the estimated fees and costs of the Referee. In the statement of decision issued by the Referee, the Referee shall award costs, including reasonable attorneys’ fees, to the prevailing party, if any, and may order the Referee’s fees to be paid or shared by the parties to such Reference proceeding in such manner as the Referee deems just.
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24 ARTICLE IX
PREPAYMENT OF LEASE PAYMENTS
Section 9.01. Security Deposit. Notwithstanding any other provision of this Lease Agreement, the City may, on any date, secure the payment of the Lease Payments in whole or in part by depositing with the Authority or a fiduciary reasonably satisfactory to the Authority, in trust, an amount of cash, which shall be held in a segregated trust or escrow fund under a trust or escrow agreement that is in form and content acceptable to the Authority, which cash so held is either (a) sufficient to pay such Lease Payments, including the principal and interest components thereof, in accordance with the Lease Payment schedule set forth in Exhibit C hereto, or (b) invested in whole in non-callable Federal Securities maturing not later than the dates such funds will be required to make Lease Payments or any prepayment in an amount which is sufficient, in the opinion of an independent certified public accountant (which opinion must be in form and substance, and with such an accountant, acceptable to the Authority and addressed and delivered to the Authority), together with interest to accrue thereon and without reinvestment and together with any cash which is so deposited, to pay such Lease Payments when due under Section 4.03(a) hereof or when due on any optional prepayment date under Section 9.02 hereof, as the City instructs at the time of said deposit; provided, however, that at or prior to the date on which any such security deposit is established, the City shall deliver to the Authority an opinion of Bond Counsel (in form and substance acceptable to the Authority) to the effect that any such security deposit will not adversely affect the excludability of the interest component of Lease Payments from gross income of the Authority for federal income tax purposes. In the event of a security deposit under this Section with respect to all unpaid Lease Payments, (i) the Term of this Lease Agreement shall continue, (ii) all obligations of the City under this Lease Agreement, and all security provided by this Lease Agreement for said obligations, shall thereupon cease and terminate, excepting only (A) the obligation of the City to make, or cause to be made, all of the Lease Payments from such security deposit and, to the extent of any deficiency, as rent payable from other legally available funds of the City, and (B) the release and indemnification obligations of the City under subparagraphs (f) and (g) of Section 7.03 hereof, and (iii) under Section 4.05 hereof, the Authority’s leasehold interest in the Property will vest in the City on the date of said deposit automatically and without further action by the City or the Authority. The City hereby grants a first priority security interest in and the lien on said security deposit and all proceeds thereof in favor of the Authority. Said security deposit shall be deemed to be and shall constitute a special fund for the payment of Lease Payments in accordance with the provisions of this Lease Agreement and, notwithstanding anything to the contrary herein, Lease Payments therefrom shall not be subject to abatement under Section 6.03 hereof to the extent payable from the funds held by the Authority or the fiduciary as described in the first sentence of this Section 9.01.
Section 9.02. Optional Prepayment.
The City may prepay the principal component of the Lease Payments in full or in part, in such manner as shall be selected by the City, on any date at an amount equal to the principal amount of Lease Payments to be prepaid, together accrued interest to the date fixed for prepayment, without premium.
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25 Section 9.03. Mandatory Prepayment From Net Proceeds of Insurance or Eminent Domain. The City shall be obligated to prepay the unpaid principal components of the Lease Payments in whole or in part in such order of prepayment as shall be selected by the City on any date, together with any accrued and unpaid interest, from and to the extent of any proceeds of insurance award or condemnation award with respect to the Property to be used for such purpose under Section 6.02 hereof.
ARTICLE X
MISCELLANEOUS
Section 10.01. Notices. Any notice, request, complaint, demand or other communication under this Lease Agreement shall be given by first class mail or personal delivery to the party entitled thereto at its address set forth below, or by facsimile transmission or other form of telecommunication, at its number set forth below. Notice shall be effective either (a) upon transmission by facsimile transmission or other form of telecommunication, (b) 48 hours after deposit in the United States of America first class mail, postage prepaid, or (c) in the case of personal delivery to any person, upon actual receipt. The Authority and the City may, by written notice to the other parties, from time to time modify the address or number to which communications are to be given hereunder.
If to the City: City of Ontario
303 East “B” Street
Ontario, CA 91764
If to the Authority: Ontario Public Financing Authority 303 East “B” Street
Ontario, CA 91764
Section 10.02. Binding Effect. This Lease Agreement inures to the benefit of and is binding upon the Authority, the City and their respective successors and assigns.
Section 10.03. Severability. If any provision of this Lease Agreement is held invalid or unenforceable by any court of competent jurisdiction, such holding will not invalidate or render unenforceable any other provision hereof.
Section 10.04. Net-net-net Lease. This Lease Agreement is a “net-net-net lease” and the City hereby agrees that the Lease Payments are an absolute net return to the Authority, free and clear of any expenses, charges or set-offs whatsoever.
Section 10.05. Further Assurances and Corrective Instruments. The Authority and the City agree that they will, from time to time, execute, acknowledge and deliver, or cause to be executed, acknowledged and delivered, such supplements hereto and such further instruments as may reasonably be required for correcting any inadequate or incorrect description of the Property hereby leased or intended so to be or for carrying out the expressed intention of this Lease Agreement.
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26 Section 10.06. Execution in Counterparts. This Lease Agreement may be executed in several counterparts, each of which is an original and all of which constitutes one and the same instrument.
Section 10.07. Applicable Law. This Lease Agreement is governed by and construed in accordance with the laws of the State.
Section 10.08. Captions. The captions or headings in this Lease Agreement are for convenience only and in no way define, limit or describe the scope or intent of any provisions or section of this Lease Agreement.
(Signature page follows)
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S-1
IN WITNESS WHEREOF, the Authority and the City have caused this Lease Agreement to be executed in their respective names by their duly authorized officers, all as of the date first above written.
ONTARIO PUBLIC FINANCING
AUTHORITY
By
Scott Ochoa, Executive Director
CITY OF ONTARIO
By
Scott Ochoa, City Manager
ATTEST:
Sheila Mautz
City Clerk
-Signature PageLease Agreement
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A-1
EXHIBIT A
DESCRIPTION OF THE SITE
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B-1
EXHIBIT B
DESCRIPTION OF THE FACILITY
1. Refinancing of property purchased from Pietersma Trust and used for the Sports Empire. 689
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C-1
EXHIBIT C
SCHEDULE OF LEASE PAYMENTS
Payment
Date
(April 1) Principal Interest
Total
Payment
Ending
Lease
Balance
2027
2028
2029
2030
2031*
2032
2033
___________
* Final Lease Payment.
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SITE LEASE
by and between
CITY OF ONTARIO, CALIFORNIA
as Lessor
and
ONTARIO PUBLIC FINANCING AUTHORITY,
as Lessee
Dated as of April 1, 2026
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SITE LEASE
THIS SITE LEASE (this “Site Lease”), dated as of April 1, 2026, is by and between the CITY OF ONTARIO, a general law city and municipal corporation, duly organized and existing under and by virtue of the laws of the State of California (the “City”), as lessor, and the ONTARIO PUBLIC FINANCING AUTHORITY, a public agency existing under the laws of the State of California (the “Authority”), as lessee.
W I T N E S S E T H :
WHEREAS, pursuant to this Site Lease, the City proposes to lease those certain parcels of real property situated in the City of Ontario, San Bernardino County, State of California, more particularly described in Exhibit A attached hereto and made a part hereof (the “Site” or, the “Property”), to the Authority, all for the purpose of enabling the City to acquire and assemble for disposition certain real property to increase the availability of industrial and commercial properties in the City (the “Project”), as defined in the Lease Agreement (defined below); and WHEREAS, the Authority proposes to lease the Property back to the City pursuant to that certain Lease Agreement, dated as of April 1, 2026 (the “Lease Agreement”), by and between the City and the Authority; and
WHEREAS, the City possesses statutory authority to lease the Property and its governing body has duly authorized the execution and delivery of the Lease Agreement and this Site Lease; and
NOW THEREFORE, for and in consideration of the premises and covenants and conditions hereinafter contained, the parties agree as follows:
Section 1. Definitions. Capitalized terms used, but not otherwise defined, in this Site Lease shall have the meanings ascribed to them in the Lease Agreement.
Section 2. Site Lease. The City hereby leases to the Authority and the Authority hereby leases from the City, on the terms and conditions hereinafter set forth, the Property.
Section 3. Term. The term of this Site Lease shall commence on the Closing Date, and shall end on April 1, 2031, unless such term is extended or sooner terminated as hereinafter provided. Unamortized Lease Payments shall be prepaid on April 1, 2031, via a refinancing or the City may cause such unamortized Lease Payments to be prepaid. If, on April 1, 2031, any Lease Payments (as defined in and as payable under the Lease Agreement) shall not have been paid by reason of abatement, default or otherwise, or provision shall not have been made for their payment in accordance with the Lease Agreement, then the term of this Site Lease shall be extended until such Lease Payments shall be fully paid or provision made for such payment, but in no event later than April 1, 2036. If, prior to April 1, 2031, all Lease Payments shall be fully paid or provision made for such payment in accordance with the Lease Agreement, the term of this Site Lease shall end and this Site Lease shall automatically terminate.
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2 Section 4. Advance Rental Payment. The City agrees to lease the Property to the Authority in consideration of the payment by the Authority of an advance rental payment of $84,000,000.
Section 5. Purpose. The Authority shall use the Property solely for the purpose of leasing the Property to the City pursuant to the Lease Agreement and for such purposes as may be incidental thereto; provided, however, that in the event of default by the City under the Lease Agreement, the Authority and its assigns may exercise the remedies provided in the Lease Agreement.
Section 6. City’s Interest in the Property. The City covenants that it is the owner in fee of the Property.
Section 7. Assignments and Subleases. Unless the City shall be in default under the Lease Agreement, the Authority may not assign its rights under this Site Lease or sublet the Property, except as provided in the Lease Agreement. If the City is in default under the Lease Agreement, the Authority (including its successors and assigns under the Lease Agreement) may fully and freely assign and sublease the Property or any portion thereof, this Site Lease and the Lease Agreement.
Section 8. Right of Entry. The City reserves the right for any of its duly authorized representatives to enter upon the Property at any reasonable time to inspect the same or to make any repairs, improvements or changes necessary for the preservation thereof.
Section 9. Termination. The Authority agrees, upon the termination of this Site Lease, to quit and surrender the Property in the same good order and condition as the same were in at the time of commencement of the term hereunder, reasonable wear and tear excepted, and agrees that any permanent improvements and structures existing upon the Site at the time of the termination of this Site Lease shall remain thereon and title thereto shall vest in the City.
Section 10. Default. In the event the Authority shall be in default in the performance of any obligation on its part to be performed under the terms of this Site Lease, which default continues for 30 days following notice and demand for correction thereof to the Authority, the City may exercise any and all remedies granted by law, except that no merger of this Site Lease and of the Lease Agreement shall be deemed to occur as a result thereof and the City shall have no right to terminate this Site Lease as a remedy for such default. Notwithstanding the foregoing, so long as the Lease Agreement remains in effect, the City will continue to pay the Lease Payments to the Assignee.
In the event of the occurrence of an Event of Default under the Lease Agreement, the Authority may (a) exercise the remedies provided in the Lease Agreement, (b) use the Property for any lawful purpose, subject to any applicable legal limitations or restrictions, and (c) exercise all options provided herein.
Section 11. Quiet Enjoyment. The Authority, at all times during the term of this Site Lease, shall peaceably and quietly have, hold and enjoy all of the Property subject to the provisions of the Lease Agreement.
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3 Section 12. Waiver of Personal Liability. All liabilities under this Site Lease on the part of the Authority are solely liabilities of the Authority and the City hereby releases each and every director, officer, employee and agent of the Authority of and from any personal or individual liability under this Site Lease. No director, officer, employee or agent of the Authority shall at any time or under any circumstances be individually or personally liable under this Site Lease for anything done or omitted to be done by the Authority hereunder.
Section 13. Taxes. All assessments of any kind or character and all taxes, including possessory interest taxes, levied or assessed upon the Property or the Authority’s interest in the Property created by this Site Lease (including both land and improvements) will be paid by the City in accordance with the Lease Agreement.
Section 14. Eminent Domain. In the event the whole or any part of the Property is taken by eminent domain proceedings, the interest of the Authority shall be recognized and is hereby determined to be the amount of the then unpaid principal component of the Lease Payments, any then unpaid interest component of the Lease Payments and any premium due with respect to the prepayment of Lease Payments to the date such amounts are remitted to the Authority or its assignee, and, subject to the provisions of the Lease Agreement, the balance of the award, if any, shall be paid to the City. The City hereby waives, to the extent permitted by law, any and all rights that it has or may hereafter have to acquire the interest of the Authority in and to the Property through the eminent domain powers of the City. The City hereby agrees, however, to the extent permitted by law, that the compensation to be paid in any condemnation proceedings brought by or on behalf of the City with respect to the Property shall be in an amount not less than the total unpaid principal component of Lease Payments, the interest component of Lease Payments accrued to the date of payment of all Lease Payments and any premium due with respect to the prepayment of Lease Payments under the Lease Agreement.
Section 15. Use of the Proceeds. The City and the Authority hereby agree that the lease to the Authority of the City’s right and interest in the Property pursuant to Section 2 hereof serves the public purposes of the City.
Section 16. Partial Invalidity. If any one or more of the terms, provisions, covenants or conditions of this Site Lease shall, to any extent, be declared invalid, unenforceable, void or voidable for any reason whatsoever by a court of competent jurisdiction, the finding, order or decree of which becomes final, none of the remaining terms, provisions, covenants and conditions of this Site Lease shall be affected thereby, and each provision of this Site Lease shall be valid and enforceable to the fullest extent permitted by law.
Section 17. Notices. All notices, statements, demands, consents, approvals, authorizations, offers, designations, requests or other communications hereunder by either party to the other shall be in writing and shall be sufficiently given and served upon the other party if delivered personally or if mailed by United States registered mail, return receipt requested, postage prepaid, at the addresses set forth in the Lease Agreement, or to such other addresses as the respective parties may from time to time designate by notice in writing. 694
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4 Section 18. Binding Effect. This Site Lease shall inure to the benefit of and shall be binding upon the City and the Authority and their respective successors and assigns. The Assignee is hereby made a third party beneficiary hereunder with all rights of a third party beneficiary.
Section 19. Amendment. This Site Lease may not be amended except as permitted under the Lease Agreement.
Section 20. Section Headings. All section headings contained herein are for convenience of reference only and are not intended to define or limit the scope of any provision of this Site Lease.
Section 21. Applicable Law. This Site Lease shall be governed by and construed in accordance with the laws of the State of California applicable to contracts made and performed in California.
Section 22. No Merger. Neither this Site Lease, the Lease Agreement nor any provisions hereof or thereof shall be construed to effect a merger of the title of the City to the Property under this Site Lease and the City’s leasehold interest therein under the Lease Agreement.
Section 23. Execution in Counterparts. This Site Lease may be executed in any number of counterparts, each of which shall be deemed to be an original but all together shall constitute but one and the same instrument.
(Signature page follows)
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S-1
IN WITNESS WHEREOF, the City and the Authority have caused this Site Lease to be executed by their respective officers thereunto duly authorized, all as of the day and year first above written.
CITY OF ONTARIO
By
Scott Ochoa
City Manager
Attest:
Sheila Mautz
City Clerk
ONTARIO PUBLIC FINANCING
AUTHORITY
By
Scott Ochoa
Executive Director
-Signature PageSite Lease
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A-1
EXHIBIT A
DESCRIPTION OF THE SITE
APN/Parcel ID(s):
697
46700.50057\44876000.3
ASSIGNMENT AGREEMENT
This ASSIGNMENT AGREEMENT, dated as of April 1, 2026 (this “Assignment Agreement”), is by and among the ONTARIO PUBLIC FINANCING AUTHORITY, a joint exercise of powers authority duly organized and existing under the laws of the State of California (the “Authority”), the WATER OPERATING FUND, WATER CAPITAL FUND, THE
EQUIPMENT SERVICES FUND, AND THE LEAVE LIABILITY FUND OF THE CITY OF ONTARIO, and its successors and assigns (in its capacity as assignee, the “Assignee” or “Purchasing Funds”) and the CITY OF ONTARIO (the “City”).
B A C K G R O U N D :
1. In order to provide for the refinancing of existing obligations entered into relating to the purchase of real property for use in the Sports Empire (the “Project”), the City is leasing the real property (the “Leased Property”) more particularly described in that certain Site Lease, dated as of April 1, 2026 (the “Site Lease”), whereby the City is lessor and the Authority is lessee, and the Authority is leasing the Leased Property back to the City pursuant to that certain Lease Agreement, dated as of April 1, 2026 (the “Lease Agreement”), between the Authority as lessor and the City as lessee. Under the Lease Agreement, the City is obligated to pay annual lease payments (the “Lease Payments”) to the Authority in consideration of such lease.
2. The Authority wishes to assign its rights under the Lease Agreement, including but not limited to its right to receive and enforce the Lease Payments, to the Assignee for the purpose of providing the funds required to acquire and assemble real property for the purpose of increasing the industrial and commercial space within the City.
A G R E E M E N T :
In consideration of the material covenants contained in this Assignment Agreement, the parties hereto hereby formally covenant, agree and bind themselves as follows:
SECTION 1. Defined Terms. All capitalized terms not otherwise defined herein have the respective meanings given those terms in the Lease Agreement.
SECTION 2. Assignment. The Authority hereby assigns to the Assignee all of the Authority’s rights under the Lease Agreement (excepting only the Authority’s rights under Sections 5.11, 7.03 and 8.04 of the Lease Agreement) (the “Assigned Rights”), including but not limited to:
(a) the right to receive and collect all of the Lease Payments from the City under the Lease Agreement,
(b) the right to receive and collect any proceeds of any insurance maintained thereunder with respect to the Leased Property, or any eminent domain award (or proceeds of sale under threat of eminent domain) paid with respect to the Leased Property, and (c) the right to exercise such rights and remedies conferred on the Authority under the Lease Agreement as may be necessary or convenient (i) to enforce payment of the 698
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Lease Payments and any amounts required to be applied to the prepayment of the Lease Payments, or (ii) otherwise to protect the interests of the Assignee in the event of a default by the City under the Lease Agreement, which rights and remedies may be exercised by the Assignee.
The assignment made under this Section 2 is absolute and irrevocable, and without recourse to the Authority and serves as notice and security of the obligation to pay on the part of the City and the Authority.
SECTION 3. Acceptance. (a) The Authority hereby acknowledges that the Purchase Price has been paid by the Purchasing Funds.
(b) The Authority, for good and valuable consideration, the receipt of which is hereby acknowledged, does hereby sell, assign and transfer to the Purchasing Funds, irrevocably and absolutely, without recourse, all of its right, title and interest in and to the Lease Agreement, including, without limitation, the right to receive the Lease Payments to be paid by the City under and pursuant to the Lease Agreement; provided, however, that the Authority shall retain the rights under the Lease Agreement to indemnification and payment for any costs and expenses. This assignment is irrevocable and absolute and is immediately effective. (c) The Assignee hereby accepts the assignments made herein for the purpose of securing the payments due under the Lease Agreement to, and the rights under the Lease Agreement of, the Authority.
SECTION 4. Consideration; Deposit of Funds. In consideration of the assignment to the Assignee of the Lease Payments and certain other rights of the Authority under Section 2, the Assignee hereby agrees to deposit the amount of $84,000,000 with the Capital Projects Fund of the City.
SECTION 5. Representations. (a) The Authority represents and warrants to the Assignee as follows:
(i) Enforceability of Assignment Agreement. The Authority has the power, authority, and legal right to execute, deliver and perform this Assignment Agreement, and this Assignment Agreement is a valid, binding, and enforceable obligation of the Authority, except as such enforceability may be limited by bankruptcy, insolvency or other laws affecting creditors’ rights generally and by the application of equitable principles; and (ii) Marketable Title. Good and marketable title to the rights assigned hereunder has been duly vested in the Assignee free and clear of any liens, security interests, encumbrances or other claims other than the rights of the City under the Lease Agreement, and the Authority has not assigned or transferred any of the rights assigned hereunder or any interest in the rights assigned hereunder to any party other than the Assignee.
(iii) Neither the execution and delivery of this Assignment Agreement, nor the fulfillment of or compliance with the terms and conditions hereof, nor the consummation 699
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of the transactions contemplated hereby, conflicts with or results in a breach of the terms, conditions or provisions of any restriction or any agreement or instrument to which the Authority is now a party or by which the Authority is bound. (b) Each of the City and the Authority acknowledges and agrees that the Purchasing Funds is acting and has acted solely as lender for its own loan account and not as a fiduciary for the City or the Authority and is not acting as a broker, dealer, municipal advisor or municipal securities underwriter in connection with the execution or delivery of the Lease Agreement or this Assignment Agreement, or any documents relating thereto.
SECTION 6. Covenants. (a) Nonimpairment of Lease. The Authority agrees that it (i) shall not have any right to amend, modify, compromise, release, terminate or permit prepayment of the Lease Agreement, and (ii) shall not take any action that may impair the payment of Lease Payments or the validity or enforceability of the Lease Agreement. (b) Lease Payments. If the Authority receives any Lease Payments, then the Authority shall receive such payments in trust for the Assignee and shall immediately deliver the same to the Assignee in the form received, duly endorsed by the Authority for deposit by the Assignee.
SECTION 7. Restriction on Transfers. The Assignee shall not have the right to assign, transfer or convey the Lease Agreement or any interest therein or portion thereof.
SECTION 8. Expenses. The fees and disbursements of Special Counsel, the fees and disbursements of the financial advisor to the City or the Authority, fees of Assignee’s Counsel and other miscellaneous expenses of the City or the Authority incurred in connection with the offering and delivery of the Lease Agreement shall all be the obligation of the Authority. The Assignee shall not have any responsibility for any expenses associated with the Lease Agreement, including, but not limited to, the expenses identified above as the obligation of the Authority.
SECTION 9. Release and Indemnification. The City shall, to the extent permitted by law, indemnify and save the Assignee, and its respective officers, agents, directors and employees, harmless from and against all claims, losses, liabilities, costs, expenses and damages, including legal fees and expenses, arising out of (a) the use, maintenance, condition or management or operation of, or from any work or thing done on, the Leased Property by the City, including injury or damages to any persons or property arising therefrom, (b) any breach or default on the part of the City in the performance of any of its obligations under the Lease Agreement, or (c) any act of negligence of the City or the Authority or of any of their agents, contractors, servants, employees or licensees with respect to the Leased Property. No indemnification is made under this Section for willful misconduct or negligence by Assignee or its officers, agents, directors or employees.
The provisions of this Section shall continue in full force and effect, notwithstanding the termination of the Term of the Lease Agreement for any reason.
SECTION 10. Conditions to Assignee Performance. The Assignee hereby enters into this Assignment Agreement in reliance upon its own due diligence and the representations and warranties of the City contained herein and the representations and warranties to be contained in the documents and instruments to be delivered on the Closing Date and upon the performance by the City and the Authority of their respective obligations both on the Closing Date. Accordingly, 700
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the obligations of the Assignee under this Assignment Agreement to purchase and to accept the assignment of the Lease Agreement hereunder shall be subject, at the option of the Assignee, to the accuracy in all material respects of the representations and warranties of the City contained herein as of the date hereof, to the accuracy in all material respects of the statements of the officers and other officials of the City and the Authority made in any certificate or document furnished pursuant to the provisions of the Lease Agreement or hereof, to the performance by the City and the Authority of their respective obligations to be performed hereunder and under the Lease Agreement, at or prior to the Closing Date, and also shall be subject to such additional legal opinions, certificates, proceedings, instruments and other documents as counsel to the Assignee or the Assignee may reasonably request to evidence the truth and accuracy, as of the Closing Date, of the representations contained herein and the due performance or satisfaction by the City at or prior to such time of all agreements then to be performed and all conditions then to be satisfied.
SECTION 11. Execution in Counterparts. This Assignment Agreement may be executed in any number of counterparts, each of which is an original and all together constitute one and the same agreement. Separate counterparts of this Assignment Agreement may be separately executed by the Assignee, the Authority and the City, both with the same force and effect as though the same counterpart had been executed by the Assignee, the Authority and the City.
SECTION 12. Binding Effect. This Assignment Agreement inures to the benefit of and binds the Authority and the Assignee, and their respective successors and assigns, subject, however, to the limitations contained herein.
SECTION 13. Fees and Costs. The Authority agrees to pay, or cause the City to pay all fees and costs relating to this Assignment Agreement, the Lease Agreement and any related transactions including financial advisory fees, Bond Counsel fees, fees of the Assignee’s counsel or any other fees and costs in connection with this transaction.
SECTION 14. Governing Law. This Assignment Agreement is governed by the laws of the State of California.
(Signatures on following page)
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IN WITNESS WHEREOF, the parties have executed this Assignment Agreement by their duly authorized officers as of the day and year first written above.
ONTARIO PUBLIC FINANCING
AUTHORITY
By:
Scott Ochoa, Executive Director
CITY OF ONTARIO PURCHASING
FUNDS, as Assignee
By:
Scott Ochoa, City Manager
CITY OF ONTARIO, as City
By:
Scott Ochoa, City Manager
702