Docusign Envelope ID: 6BE8268Q- 7159- 4CAo- AD26- F79DEAQ3B4A9 Initial
AGR- 7850 L
MEMORANDUM OF UNDERSTANDING
This MEMORANDUM OF UNDERSTANDING ( this " MOU") is entered into as of July 22 2025( the" Reference Date") by MILAN REI X, LLC, a California limited liability company (" Developer"), and the CITY OF ORANGE, a California municipal corporation (" City").
Developer and City are sometimesreferred to herein, individually, as a "Party" and, collectively, as the Parties".
RECITALS
A. Developer owns the following real property located in the City and identified as: ( i) TTM 0050- 20 property( the" TTM Property"); ( ii) Sully Miller property( the" Sully Miller Property"); and( iii) 6146 E. Santiago Canyon Road( the" Residential Property").
B. Among other things, the Partiesdesireto work toward the eventual developmentof the Sully-Miller Property aspublic open space,providing a substantialenvironmentaland land usebenefit to City residentsandsurroundingcommunities.
C. In August 2020, the City approveda tract map for the developmentof 22 single family homes on the TTM Property( the" TTM Project"). The Developeris currently pursuing ministerial permits for the TTM Project.
D. In 2023,the Developersubmittedapplicationsfor" Builder' sRemedy"residentialprojects on the Sully Miller and Residential properties ( the " Builder' s Remedy Applications"). Due to disagreementsregarding the Builder' s Remedy Applications and a desire to work toward a potential agreementregardingdevelopmentof the Sully Miller andResidentialproperties,theCity andtheDeveloper entered into tolling agreements( the" Tolling Agreements") regarding the Builder' s Remedy Applications, which tolling agreementsarestill in effect.
E. The Parties desire to set forth the terms of an agreement that would address development of the Sully Miller andResidentialpropertieswhile Milan movesforward with the ministerial development of the TTM Property.The Partiesacknowledgethat all componentsof the agreementarenecessaryfor the Developer to move forward, and that absent development of the TTM, Sully Miller, and Residential propertiesassetforth below, the Developerwill pursuethe Builder' s RemedyApplications.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
1. 1 ResidentialProperty Project SubmissionandApproval. Developerplans to submit plans to the City for a 30- unit residential project on the Residential Property ( the " Residential Project"). The ResidentialProjectshall consistof the necessaryapplicationsfor the 30-unit project, utilizing stateDensity Bonus law, anapplication for a tract map underthe Subdivision Map Act, and any submissionsnecessary for theCity to undertakeCEQAreviewof thetractmapapplication. Developershallsubmitall necessary applicationsfor the ResidentialProjectby August 1,2025,andCity commitsto review the applicationsfor the ResidentialProject and,if appropriateunder relevantcode,useits bestefforts to approvethemby July 1,2026.In the eventDeveloperdoesnot submitrequiredapplicationsfor theResidentialProjectby August 1, 2025, the City' s time to approvethe submitted applicationsshall be extendedby the number of days 1 Docusign Envelope ID: 6BE82680- 7 1 59- 4CAO- AD26- F79DEA63B4A9 beyondAugust 1,2025,that Developersubmitsthe requiredapplications.During the City review process, the City commits to expeditiously review Developer submissions, and Developer commits to expeditiously respondto City application comments. Specifically, Developer commits to respondto City comments within 30 days of receipt.
1. 2 Sully Miller Property Utilization. Developer anticipatesentering into accessagreements with Landify, a companythatpossessesthe capacityto developthe Sully Miller site into public openspace the" Open Space Project"). Upon completiontheseagreementswill allow Landify to conductsuchstudies and investigationsasmay be necessaryto developan appropriateopen spacevision for the Sully-Miller Propertyanda feasibleplan for achievingthat vision. Developerandthe City understandthat Landify will needthe City' s full cooperationin this planning and implementationprocess. City commits to providing suchcooperation,including expeditiousreview and,if appropriateunderrelevantcode,approvalof any of the required applications for the Open Space Project.
1. 3 Divestment of Sully Miller Property. The Parties agree that the objective of the Open Space Project,whetherundertakenby Landify or a comparablethird party, is to put Milan in a position to divest itself of the Sully Miller Property. Milan hasindicatedthat it may engagea third party to developthe open spaceproject andoncecompletetransferownershipto the City for a nominal sum.Milan intendsto divest itself of the property either through the saleof theproperty to the City for a nominal sumor, alternatively, to Landify or a third party for a nominal sum,with the neededrestorationthen completedand ownership can be transferredto the City. The Partiesrecognizethat Milan' s ability to executesuch divestmentis a material term of this agreementfor Milan, andthat prior to divestment, Milan will obtain any required clearance of the Sully Miller Property from applicable regulatory agencies. The City' s acceptance of the property is contingentupon the property's clearancefrom all applicableregulatoryagencies.
1.4 Tolling Agreement Extension. The City and Developer agree to extend the Builder' s Remedy Tolling Agreementsfor one year from the ReferenceDate, subjectto the timing of approval of ministerial TTM Projectpermits, discussedbelow. If the City issuesthe ministerial permits for the TTM Project by August 1, 2025, and approves ( i) the Residential Project, and ( ii) the Open Space Project collectively, the " Required Developer Approvals") by July 1, 2026, Developer shall withdraw the Builder' s RemedyApplications, provided Developerhasobtainedany requiredregulatory clearanceof the Sully Miller Property. In the eventthe City hasnot issuedthe ministerial permits for the TTM Project by August 1,2025,or if the City is still reviewing/processingthe RequiredDeveloperApprovals beyondJuly 1,2026,Developerreservestheright to move forward with theBuilder' sRemedyApplications. In theevent Developer moves forward with the Builder' s Remedy Applications due to the City not issuing the ministerial TTM Project permits by August 1, 2025, or not issuing the Required Developer Approvals by July 1, 2026, any extension of the Builder' s Remedy Tolling Agreements still in effect shall terminate.
Developer also reserves the right to extend the Tolling Agreements, and the City, upon finding that extension of the Tolling Agreements is in the City' s best interest, shall extend the Tolling Agreements for at least six months ( the" Tolling Agreements Extension"). During the Tolling Agreements Extension, the City shall continueto expeditiously processtheRequiredDeveloperApprovals.
1. 5 Ministerial TTM ProjectPermits.Developerhasandwill submit ministerial plansfor the TTM Project, including but not limited to gradingandhaul routepermit applications.In the event Developerdoesnot makeall necessarysubmissionsfor the ministerial TTM Projectby June1,2025,the August 1,2025,datefor City approvalof the permits for the TTM Project shallbe extendedbeyond August 1,2025,by the numberof daysbeyondJune1,2025,the Developermakesall necessary submissions.
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MISCELLANEOUS
1. 6 RepresentationsandWarranties. EachParty representsandwarrantsto the otherParty as of the ReferenceDate that (i) the execution and delivery of this MOU and the consummation of the transactionscontemplatedhereby have been duly authorizedby such Party, including by obtaining all required internal consentsand approvals, and do not violate the formation documentsof such Party, any agreementby which suchPartyis boundor applicablelaw and(ii) suchPartyis duly organizedandexisting in good standingunderthe laws of the stateof its incorporationandauthorizedto do businessin California.
1. 7 Assignment. Neither Partyshallassignor otherwisetransferall or anyinterestin this MOU without the prior written consentof the otherParty.
1. 8 Further Assurances. In addition to the actions recited herein and contemplated to be performed, executedand/or delivered by the Parties, the Partiesshall perform, executeand/or deliver any andall suchfurther acts,instruments,deedsandassurancesasmay be reasonablyrequiredto effectuatethe purposesof this MOU andthe transactionscontemplatedhereby. Unlessotherwiseexpresslystatedin this MOU, eachPartyshall actreasonablyin carrying out its rights andobligationsunderandtaking any actions in connectionwith this MOU. Unless otherwiseexpresslystatedin this MOU, any notice delivered by a Partyhereundershallbereasonableprior notice andnoapprovalor consentby aParty to amatterpresented hereunder shall be unreasonably withheld, conditioned or delayed.
1. 9 Notices. Any notice required or authorizedby this MOU shall be in writing andmay be delivered personally, by registeredmail, return receipt requested, or by reputable air or ground courier service, and shall be deemedto havebeengiven and receivedupon the actualreceipt by the person(s) to whom notices are to be sent at the addresses set forth below, which may be changed by a Party from time to time upon noticethereof to the other Party given in accordanceherewith:
Milan Representative:
Christopher Nichelson, President
Milan Capital Management, Inc.
701 S. Parker Street, Suite 5200
Orange, CA 92868
For Legal Notice Copy to:
Alexander M. DeGood
Cox, Castle& Nicholson LLP
2029 Century ParkEast, Suite2100
Los Angeles, CA 90067
adegood@coxcastle. com
City Representative:
City of Orange
City Manager
300 E. Chapman Avenue
Orange, CA 92866
For Legal Notice Copy to:
City of Orange
City Attorney
300 E. Chapman Avenue
Orange, CA 92866
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1. 10 Entire Agreement; Severability. This MOU, including all Exhibits attached hereto, containsthe entire agreementbetweenthe Partieswith respectto the subject matter hereof, and all prior communications or agreements between the Parties or their respective representatives with respect to the subject matter hereof, whether oral or written, are merged into this MOU and extinguished. No modification of this MOU shall be effective unless in writing and signed by the Parties. If any term or provision of this MOU or any application thereof is held unenforceable, the remainderof this MOU and any other application of such term or provision shall not be affected thereby, and eachprovision of this MOU shall be valid and enforceable to the fullest extent permitted by law.
1. 11 No Waiver. Neither Party may waive any condition or breach of any term of this MOU except in a signed writing, and no such waiver shall be deemed a waiver of any other condition or any subsequentbreachof the sameor of any otherterm of this MOU.
1. 12 Governing Law. This MOU is made under and shall be governed and construed in accordancewith the laws of the Stateof California without regardto its conflict of law principles.
1. 13 Time. Time is of the essencewith respectto eachprovision of this MOU in which time is a factor.
1. 14 Interpretation. The sectionheadingsof this MOU arefor convenienceof referenceonly and shall not be usedto explain or otherwiseaffect the meaningof any provision hereof. Wheneverthe singular number is usedthe sameincludesthe plural if requiredby the context, andthe masculinegender includes the feminine and neuter genders. All referencesherein to " Section" or" Exhibit" referencethe applicable Section of this MOU or Exhibit attached hereto; and all Exhibits attached hereto are incorporated into this MOU and made a part hereof. The Parties acknowledge and agree that this MOU represents a negotiated agreement, having been drafted, negotiated and agreed upon by the Parties and their respective legal counsel. Therefore, the Parties agree that the fact that a Party may have been primarily responsible for drafting or editing this MOU shall not, in any disputeover the terms of this MOU, causethis MOU to be interpretedagainstsuchParty.
1. 15 Counterparts; Electronic Signatures. This MOU may be executed in any number of counterparts, each of which shall be deemed an original, and all of which taken together shall constitute one and the same instrument. Electronic signatures shall have the same legal effect as original signatures.
Signatures appear on following page]
4 Docusign Envelope ID: 6BE82680- 7159- 4CAO- AD26- F79DEA63B4A9 Docusign Envelope ID: 4BEFF81D- 69CC- 437C- 84C4- 9DEFBE4292D8 IN WITNESS WHEREOF, this MOU is hereby entered into by the Parties as of the Reference Date.
MILAN REI X, LLC, A California limited liability company CDocuSigned
by: DS
OA.riS h(aul stm, O'By.
ChristopueLi
sb 4U ..
ner`Nlceleson
President of its Managing Agent
CITY OF ORANGE, a municipal corporation
DocuSigned by:
By: t thVIVAS C. t-&..a.
f4b44 § eele1a, Interim City Manager
ATTEST;
by:
By:
Pai4Nd1t61lih; City Clerk
APPROVED AS TO FORM:
Signed by:
By: fi4n— IV l u`G+-`ea
Wt WIttthers
Interim City Attorney
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