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 located along Santiago Canyon Road with the Assessor’s parcel numbers of 370-011-08, 370-041-12, 370- 01118, 370-011-22, 370-041-25, 093-280-07, 093-280-27, 093-280-29, 093-280-30, and 093-280-07 (the “Property” or “Creekside Village site”). 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 may result in a park project on the Property, in addition to other Milan 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.
2 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
√
3 EXHIBIT “A”
AGREEMENT DATED FEBRUARY 23, 2024
[Beneath this sheet]
AGAR-7 b 6(0
TOLLING AGREEMENT
This TOLLING AGREEMENT (" Agreement") effective F "'`"' 7 23 2024 Effective Date") is madeby andbetweenMilanREI X, LLC, a Californialimitedliability company (" Milan") and the City of Orange, a municipal corporation ( the" City"). Milan and the Cityaresometimesreferredtohereineachasa"Party"andtogetherasthe"Parties".
RECITALS
A. Milan owns the real property locatedalong SantiagoCanyonRoad with the Assessor's parcel numbers of 370-011-08, 370-041-12, 370-011-18, 370-011-22, 370-041-25, 093-280-07, 093-280-27, 093-280-29, 093-280-30, and 093-280-07( the" CreeksideVillage site") in the City ( the "Property").
B. On or aboutOctober3,2023,Milan submittedto theCity apreliminaryapplication pursuant to Senate Bill 330(" SB 330") for ahousingdevelopmentprojectontheCreeksideVillage site(" Project").
C. The October 3, 2023, application ( the " Application" for the " Project") replaced a previouslyfiledapplicationforahousingdevelopmentprojectontheProperty.
D. On November17,2023,theCity sentaletterto Milan statingthat,while it wasnot requiredunderthe law to give notice, the City believedtheApplication did not includecertain statutorily required information.
E. The City and Milan currently have different interpretations of relevant statelaw, in part,concerningtheprocessingof theApplication,includingthescopeof thematerialsMilan must provide to the City and the City' s duty to process and approve the Project. For example, Milan assertsthat the Application must be processedpursuant to California Government Code section 65589.5, subdivision (d), theso-called`Builders Remedy" provision, andthattheApplicationis not subjectto anytime limits imposedby SB330. In this case, in part,theCity assertsthatanSB 330applicationdoesnotpreservethe`Builders Remedy"if suchremedyappliesto theProject.In contrast,Milan assertsthat,pursuantto thelegalpositionof theCaliforniaDepartmentof 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, recreationaland sport uses, usesby an educational institution,acquisitionby theCity or a third party, or otherpaths. that maybeacceptableto both Parties. In the absenceof the time providedby this Agreement, the Parties (andin particular, Milan) may beforced to seekrelief through the courts. ThePartiesbelieve 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 Partieswish to toll the applicabletime 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,butnotlimitedto,waivingtherightto assertthatacompleteApplicationis or is not requiredor waiving anyclaimsrelatedto the City's processingof the Application (the Tolled Application Period").
H. Second, thePartieswishto preserveanyrightsthatmayexistasof thedateof this Agreementfor the Partiesto commencelegal action at a future date concerningthe City's processing of the Application and/or the Project, which, but for this Agreement, might otherwise betime-barredby any applicablestatuteof limitations, laches, andotherpossibletime-barsand defensesbasedin whole or in parton thetime which mayelapsefrom theeffectivedateof this Agreementto thefiling of anaction(all of which time-barsanddefenses, including,thestatuteof 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, andfor goodandvaluableconsideration,thereceiptandsufficiencyof which arehereby acknowledged, the Parties hereby agreeasfollows:
AGREED TERMS AND CONDITIONS
1. Recitals. The aboveRecitals form a material part of this Agreement, aretrue and correct, and are incorporated herein by this reference andmade 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) monthsaftertheEffectiveDate, or until cancelledby eithertheCity 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 suchtermination.
Forexample,if sixty( 60)daysof aonehundredeighty(180)periodin whichto submitacomplete 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 andall applicablestatutesof limitation shallresumerunning, andanyremainingperiodsof time with the applicable statutes of 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. CovenantNot to ChallengeLegitimacyof EitherTolling Period. Nothing in this Agreementnor the circumstancesthat gave rise to this Agreementshall be construedas an acknowledgment by any Party that any claim was or wasnot barred, or was or was not about to be barred,byanyTimeDefensesorotherdefensebasedonthelapseofpassageoftime,asoftheend of the day immediately preceding the start of the Tolled Application Period and/or the Tolled Litigation Period( collectively" Tolled Periods").
5. CovenantNot toCommenceLitigation During TolledPeriods. Partiesagreethat theywill not commencelitigation concerninganyclaimsreferencedin this Agreementduringthe Tolled Periods, andMilan will not file or join with anyotherparty in litigation concerningany otherso-called"Builder'sRemedy"applicationcurrentlyonfile with theCity or thatmaybefiled by anyparty, includingMilanoranyonedoingsoonMilan'sbehalf, duringtheTolledPeriods.
6. Extension of Tolled Periods. In the Parties' discretion, prior to termination of the Tolled Periods,thisAgreementmaybemutuallyextendedin writing for anadditionalperiod(s)of time.
7. No Waiver. Nothingin thisagreementshalloperateasawaiverof and/orprejudice eitherParty's right to assertthatthe statuteof limitationsor anyotherTime Defenseshavebeen tolled or have not yet run for reasonsother than the statedin this Agreement.
8. No Admission. This Agreementdoesnot constituteanadmissionof anyliability or wrongdoingby eitherPartyto this AgreementnorregardingeitherParty'sviewsof thefacts,or thelaw, astheypertainto theTolledPeriodsand/or anytolled claimsthatmayexist.
9. Notice. EachParty shall deliver anynotice underthis Agreement( each,a" Notice") in writing andaddressedto theotherPartyatits addresssetoutbelow(or to anyotheraddressthat thereceivingPartymay designatefrom time to time in accordancewith this section). EachParty shalldeliverall Noticesby personaldelivery,nationallyrecognizedovernightcourier(with all fees prepaid), email, or certified or registeredmail (in eachcase, returnreceipt requested, postage prepaid). A Notice is effectiveonly (a) uponreceiptby the receivingParty; and (b) if the Party givingtheNoticehascompliedwith therequirementsof this Section. EitherPartymayatanytime, by giving ten (10) days' writtennoticeto the otherPartyhereto, designateanyotherpersonor addressin substitutionof theaddressto which suchnoticeshallbegiven.
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 Partiesand supersedesall prior negotiationsand/oral agreements, proposedor otherwise, written or oral, concerningthe subjectmatterhereof Each Partyacknowledgesthat in enteringinto this Agreement, she/it hasnot relied on anypromise, representation, or warranty not contained in this Agreement.
11. Modification. No modificationof thisAgreementshallbebindingunlessin writing and signed by each of the Partieshereto.
12. Successors. ThePartiesintendthisAgreementto belegallybindinguponandshall inure to the benefit of each of them and their respectiveparents, subsidiaries, affiliates, predecessors, successors, assigns, executors, administrators, heirs, and estates. Such successors include any entity or entities that may purchaseor have transferred to them title to or someform of ownershipinterestin thePropertyorpartof theProperty.
13. Interpretation, Severability. and Enforcement.
a. Interpretation. The headings in this Agreement are purely for 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 Partyas the author or 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 unenforceablepart, term, or provision shallbe deemednot 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. The signatoriesto this Agreementrepresentand warrant that they have the authorization and power to bind the Party on whosebehalf they are signing. and that no other individuals or parties arenecessaryto join herein in order to toll the statuteof limitations andother 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 andthe sameinstrument. Facsimilesignaturesand signaturepagessent by email shall be binding as though they are originals.
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
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ame: Christopher Nichelson
Its: President 0 4- } s /`^ — s ', 43- c- 4-- Dated: " Fe w.- r.. , LT, LcZL1
CITY OF ORANGE
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f/' /
Name: Thomas C. Kisela
Its: City Manager
Dated:
APPROVED AS TO FORM:
Mike Vigliotta, City Attorney