THIRD EXTENSION OF TOLLING AGREEMENT
On February 23, 202 4 (the “Effective Date”), Milan REI X, LLC, a California limited liability company, (“Milan”) and the City of Orange, a municipal corporation (the “City”) (collectively, the “Parties”), entered into a tolling agreement (“Agreement”) concerning Milan’s application for a housing development project in the City on the real property located at 6146 Santiago Canyon Road (the “Property”). The executed Agreement is attached as Exhibit “A”.
RECITALS
A. The Parties are engaged in discussions regarding a memorandum of understanding (“MOU”) concerning uses of the Property and other properties owned by Milan that would result in Milan moving forward with a residential project on the Property, among other projects, and wish to extend the Agreement to provide the Parties time to finalize and execute the MOU.
B. The Agreement in recital “G”, noted the Parties agreed to a Tolled Application Period as defined in therein and as stated in the Agreement paragraph 2. The Agreement in recital “H”, noted the parties agreed to a Tolled Litigation Period as defined therein and as further defined in the Agreement paragraph 3. The Tolled Application Period and the Tolled Litigation Period are collectively referred to at the Tolled Periods in the Agreement paragraph 4.
C. The Agreement paragraph 6 provides that in the Parties’ discretion, prior to the termination of the Tolled Periods, the Agreement may be mutually extended in writing for an additional period(s) of time.
D. As of the date of this Extension Agreement, the Parties agree that the Tolled Periods have not expired.
E. The Parties previously agreed to extend the Agreement until May 28, 2025.
NOW, THEREFORE, in consideration of the terms and conditions of this Extension, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agree as follows:
AGREED TERMS AND CONDITIONS:
1. Material Terms of Agreement. All material terms of the Agreement remain in force and effect and are incorporated herein by this reference and made a part hereof.
2. Extension of Tolling Agreement. The Tolling Agreement is hereby extended for an additional ninety (90) days until August 27, 2025, at which time the Parties will further extend the Agreement consistent with the terms of the MOU.
IN WITNESS WHEREOF , and intending to be legally bound, each Party hereto has caused this Extension to be executed as of the date(s) set forth below.
MILAN REI X, LLC,
a Delaware limited liability company
Name: Christopher Nichelson
Its: President of its Managing Agent
Dated:
CITY OF ORANGE,
a municipal corporation
Name: Thomas C. Kisela
Its: City Manager
Dated:
ATTEST:
Pamela Coleman, City Clerk
APPROVED AS TO FORM:
Kirsten Shea, Senior Assistant City Attorney
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2 EXHIBIT “A”
AGREEMENT DATED FEBRUARY 23, 2024
[Beneath this sheet]
AGcoLL7
TOLLING AGREEMENT
This TOLLING AGREEMENT (" Agreement") effective e 1' '""' 7 , 2024 Effective Date") is made by and between Milan REI X, LLC, a California limited liability company (" Milan") and the City of Orange, a municipal corporation( the " City"). Milan and the City aresometimesreferredto hereineachasa" Party"andtogetherasthe" Parties".
RECITALS
A. Milan owns the real property commonly known as 6146 Santiago Canyon Road the" Brandman site") in the City( the" Property").
B. Onor aboutOctober3,2023,Milan submittedto theCity apreliminaryapplication pursuant to Senate Bill 330 (" SB 330") for a housing development project on the Brandman site Project").
C. The October 3, 2023, application ( the " Application" for the " Project") replaced a previouslyfiled applicationfor ahousingdevelopmentprojectontheProperty.
D. On November 17, 2023, the City senta letter to Milan stating that, while it was not required under the law to give notice, the City believed the Application did not include certain statutorily required information.
E. The City and Milan currently have different interpretations of relevant statelaw, in part, concerning the processingof the Application, including the scopeof the materials Milan must provide to the City and the City' s duty to process and approve the Project. For example, Milan 6 assertsthat the Application must be processedpursuant to California Government Code section 65589.5, subdivision( d), the so-called` Builders Remedy" provision, and that the Application is not subject to any time limits imposed by SB 330. In this case,in part, the City assertsthat an SB 330 application doesnot preservethe" Builders Remedy" if suchremedy applies to the Project. In contrast, Milan assertsthat, pursuantto the legal position of the California Department of Housing and Community Development, an SB 330 application does vest an application for a Builder' s Remedy project.
F. The Parties wish to have time to further evaluate non- residential uses for the Property, including, but not limited to, recreational and sport uses, uses by an educational institution,acquisitionby theCity or athird party,or otherpaths. that maybeacceptableto both Parties. In the absenceof the time provided by this Agreement, the Parties (and in particular, Milan) may beforced to seekrelief through the courts.The Partiesbelieve it is in their bestinterests to avoid the time, expense, and risk of such litigation for the period identified by this Agreement.
G. First, the Parties wish to toll the applicable time period( s) in which Milan must submit a complete Application for the Project ( the " Application Period"), without Milan or the City waiving any rights or arguments related to their respective obligations, limitations or protections, including, but not limited to, waiving the right to assertthat a complete Application is or is not required or waiving any claims related to the City' s processing of the Application ( the Tolled Application Period").
H. Second, the Partieswish to preserveany rights that may exist as of the date of this Agreement for the Parties to commence legal action at a future date concerning the City' s processing of the Application and/or the Project, which, but for this Agreement, might otherwise be time-barred by any applicable statuteof limitations, laches, and other possible time-bars and defensesbased in whole or in part on the time which may elapsefrom the effective date of this Agreement to the filing of an action( all of which time-bars anddefenses, including, the statuteof limitations and laches, are referred to as " Time Defenses" ( the" Tolled Litigation Period").
NOW, THEREFORE, in consideration of the terms and conditions of this Agreement, and for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties hereby agreeasfollows:
AGREED TERMS AND CONDITIONS
1. Recitals. The aboveRecitals form a material part of this Agreement, are true and correct, and are incorporated herein by this reference and made a part hereof.
2. Tolled Application Period. As to the Tolled Application Period, this Agreement shall become effective as of the Effective Date, and shall remain in effect, unless further extended, until six ( 6) months after the Effective Date, or until cancelled by either the City or Milan hereto upon thirty ( 30) days advance written notice. Upon the termination of the Tolled Application Period, the Application Period shall resumerunning, and any remaining periods of time within the Application Period shall be preservedduring the Tolled Application Period until such termination.
For example, if sixty( 60) days of aone hundred eighty( 180) period in which to submit a complete application had run as of the Effective Date, then, at the termination of the Tolled Application Period, one hundred twenty( 120) days would remain until the Application Period deadline.
3. Tolled Litigation Period. As to the Tolled Litigation Period, this Agreement shall become effective as of the Effective Date, and shall remain in effect, unless further extended, until six (6) months after the Effective Date, or until cancelled by either the City or Milan hereto upon thirty ( 30) days advancewritten notice. Upon the termination of the Tolled Litigation Period, any and all applicable statutes of limitation shall resume running, and any remaining periods of time with the applicable statutesof limitation shall be preservedduring the Tolled Litigation Period.
For example, if sixty ( 60) days of a one year period in which to file litigation had run as of the Effective Date, then, at the termination of the Tolled Litigation Period, three hundred and five 305) days would remain under the relevant statute of limitation.
4. Covenant Not to Challenge Legitimacy of Either Tolling Period. Nothing in this Agreement nor the circumstances that gave rise to this Agreement shall be construed as an acknowledgment by any Party that any claim was or was not barred, or was or was not aboutto be barred, by any Time Defenses or other defense based on the lapse of passage of time, as of the end of the day immediately preceding the start of the Tolled Application Period and/or the Tolled Litigation Period( collectively " Tolled Periods").
5. Covenant Not to Commence Litigation During Tolled Periods. Parties agree that theywill notcommencelitigation concerninganyclaimsreferencedin thisAgreementduringthe Tolled Periods, andMilan will notfile orjoin with anyotherparty in litigation concerningany other so-called" Builder' s Remedy" application currently on file with the City or that may be filed by any party, including Milan or anyonedoing so on Milan' s behalf, during the Tolled Periods.
6. Extension of Tolled Periods. In the Parties' discretion, prior to termination of the TolledPeriods,this Agreementmaybemutuallyextendedin writing for anadditionalperiod(s)of time.
7. No Waiver. Nothing in this agreementshall operateasa waiver of and/or prejudice eitherParty's right to assertthatthestatuteof limitationsor anyotherTime Defenseshavebeen tolled or have not yet run for reasonsother than the statedin this Agreement.
8. No Admission. This Agreement doesnot constitute an admission of any liability or wrongdoing by either Party to this Agreement nor regarding either Party's views of the facts, or the law, asthey pertain to the Tolled Periods and/or any tolled claims that may exist.
9. Notice. EachParty shall deliver any notice underthis Agreement( each,a" Notice") in writing and addressedto the other Party at its addresssetout below( or to any other addressthat the receiving Party may designatefrom time to time in accordancewith this section). Each Party shall deliver all Notices by personaldelivery, nationally recognizedovernight courier( with all fees prepaid), email, or certified or registered mail ( in each case, return receipt requested, postage prepaid). A Notice is effectiveonly (a) uponreceiptby thereceivingParty; and (b) if the Party giving the Notice hascomplied with the requirementsof this Section.Either Party may at any time, by giving ten ( 10) days' written notice to the other Party hereto, designate any other person or addressin substitution of the addressto which such notice shall be given.
If to City: City of Orange
300 E. Chapman Avenue
Orange, CA 92866
Attn: City Manager
with a copy to: Mike Vigliotta
300 E. Chapman Avenue
Orange, CA 92866
Email: mvigliotta@cityoforange. org
If to Milan: Milan Capital Management
701 South Parker Street, Suite 5200
Orange, CA 92868
Attn: Christopher Nichelson, President
with a copy to: Alex DeGood
Cox, Castle& Nicholson LLP
2029 Century Park East, Suite 2100
Los Angeles, CA 90067
Email: adegood@coxcastle. com
10. Entire Agreement. This Agreement, including the recitals, constitutes the entire agreementand understandingof the Parties and supersedesall prior negotiationsand/oral agreements, proposedor otherwise, written or oral, concerningthe subjectmatterhereof. Each Partyacknowledgesthatin enteringintothisAgreement, she/it hasnotreliedonanypromise, representation, or warranty not contained in this Agreement.
11. Modification. Nomodificationof thisAgreementshallbebindingunlessin writing and signed by each of the Partieshereto.
12. Successors. ThePartiesintendthisAgreementtobelegallybindinguponandshall inure to the benefit of each of them and their respectiveparents, subsidiaries, affiliates, predecessors, successors, assigns, executors, administrators, heirs, and estates. Such successors includeanyentity or entitiesthatmaypurchaseor havetransferredto themtitle to or someform of ownershipinterestin thePropertyor partof theProperty.
13. Interpretation, Severability, andEnforcement.
a. Interpretation. Theheadingsin thisAgreementarepurelyfor convenience and are not to be usedas an aid in interpretingits terms. The Partiesagreethat they participated equally in drafting and negotiating the terms of this Agreement and that this Agreementshall not be construedagainsteither Party as the authoror drafter of the Agreement.
b. Severability. Should any provision of this Agreement be declared or be determinedby any court to be illegal, invalid, or unenforceable, the validity of the remaining parts, terms, or provisions shall not be affected thereby and the illegal, invalid, or unenforceable part, term, or provision shall be deemed not to be apart of this Agreement. c. Enforcement. Nothing in this Agreement shall be construed as, or constitute, a release of any Party's right to enforce the terms of this Agreement. This Agreement shall be construed and interpreted in accordance with the laws of the State of California.
14. Authority. Thesignatoriesto thisAgreementrepresentandwarrantthattheyhave the authorization and power to bind the Party on whosebehalf they are signing, and that no other individualsor partiesarenecessarytojoin hereinin orderto toll thestatuteof limitationsandother Time Defenses for the Tolled Claims.
15. Counterparts and Copies. This Agreement may be executed by the Parties in counterparts, each of which shall be deemed an original, but all of which together shall constitute one and the sameinstrument. Facsimilesignaturesand signaturepagessentby email shallbe binding asthough they areoriginals.
IN WITNESS WHEREOF, and intending to be legally bound. each Party hereto has caused this Agreement to be executed as of the date(s) set forth below.
MILAN
Name: Christopher Nichelson
Its: President o A 1% 3 M --^ " 3=-$ c
Dated: Fu••_- 1. 3 , 2 n 2 t
CITY OF ORANGE
Name: Thomas C. Kisela
Its: City ag r
cDated: _, 2//Z 7'
APPROVED AS TO FORM:
e Vigliotta, City Attorney