Palm Springs City Council
March 11, 2026

(Revised 05/16/19)

PUBLIC INTEGRITY DISCLOSURE

APPLICANT DISCLOSURE FORM

1. Name of Entity

2. Address of Entity (Principle Place of Business)

3. Local or California Address (if different than #2)

4. State where Entity is Registered with Secretary of State

If other than California, is the Entity also registered in California?  Yes  No

5. Type of Entity

 Corporation  Limited Liability Company  Partnership  Trust  Other (please specify)

6. Officers, Directors, Members, Managers , Trustees, Other Fiduc iaries (please specify) Note: If any response is not a natural person, please identify all officers, directors, members, managers and other fiduciaries for the member, manager, trust or other entity

_________________________________________________  Officer  Director  Member  Manager [name]
 General Partner  Limited Partner

 Other ____________________________________

_________________________________________________  Officer  Director  Member  Manager [name]
 General Partner  Limited Partner

 Other ____________________________________

_________________________________________________  Officer  Director  Member  Manager [name]
 General Partner  Limited Partner

 Other ____________________________________

Wakeland Housing and Development Corporation
1230 Columbia Street, Ste 950, San Diego, CA 92101
California
■
Rebecca Louie
■
Peter Armstrong
■
Joan Edelman
■

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CITY OF PALM SPRINGS – PUBLIC INTEGRITY DISCLOSURE

APPLICANT DISCLOSURE FORM

(Revised 05/16/19)

7. Owners/Investors with a 5% beneficial interest in the Applicant Entity or a related entity

EXAMPLE

JANE DOE
[name of owner/investor]
50%, ABC COMPANY, Inc.
[percentage of beneficial interest in entity
and name of entity]
A.
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]
B.
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]
C.
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]
D.
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]
E.
[name of owner/investor] [percentage of beneficial interest in entity and name of entity]

I DECLARE UNDER PENALTY OF PERJURY UNDER THE LAWS OF THE STATE OF CALIFORNIA THAT THE FOREGOING IS TRUE AND CORRECT.

Signature of Disclosing Party, Printed Name, Title Date

PENALTIES
Falsification of information or failure to report information required to be reported may subject you to administrative action by the City.

Joan Edelman, CFO, Wakeland Housing and Development Corporation N/A- nonprofit corporation
2/12/2026

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ATTACHMENT D

Resolution Number 24654 – Affordable and Multi-Family
Housing Incentive Program

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RESOLUTION NO. 24654

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF

PALM SPRINGS, CALIFORNIA, ESTABLISHING THE

AFFORDABLE AND MULTI - FAMILY HOUSING INCENTIVE
PROGRAM," A PROGRAM TO ESTABLISH REDUCED

DEVELOPMENT IMPACT FEES AND DEVELOPER FEES

RELATED TO RESIDENTIAL PROJECTS CONSTRUCTING

NEW AFFORDABLE DWELLING UNITS, OR

CONSTRUCTING NEW MULTI - FAMILY RESIDENTIAL
UNITS.

WHEREAS, on June 19, 2019, the City Council of the City of Palm Springs, hereinafter " City Council"), directed staff to develop a policy to establish reduced development impact fees, application fees, and permit fees related to residential projects that construct new affordable residential dwelling units, and WHEREAS, development impact fees are monetary exactions established and imposed according to various sections of the Palm Springs Municipal Code and the California Government Code, and collected as fees at rates established by Resolution to finance the design, construction, installation, and acquisition of public infrastructure or to recover the costs of adding capacity in existing public infrastructure; and WHEREAS, the City has established the following development impact fees applicable to residential projects: a Drainage Fee to implement the City' s Master Plan of Drainage; the Public Art Fee to establish public art throughout the City; the Park Fee in accordance with Ordinance No. 1632 pursuant to the Quimby Act; and the Sewer Connection Fee, ( the " Development Impact Fees"); and
WHEREAS, developer fees are specific fees imposed on certain applications or permits associated with the Building, Engineering, Fire, and Planning Services Departments ( the " Developer Fees"), established and imposed according to various sections of the Palm Springs Municipal Code and the California Government Code, and collected as fees at rates established by Resolution to adequately recover the City' s costs to provide services in those Departments; and
WHEREAS, funding for the construction of new affordable dwelling units has significantly decreased since the state of California' s decision to completely dissolve and eliminate all of the Redevelopment Agencies existing throughout the state, including the City of Palm Springs Redevelopment Agency, and
WHEREAS, production of new affordable dwelling units has stalled due to increased construction costs and an overall decline in Federal and State funding for affordable housing; and

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Resolution No. 24654

WHEREAS, on March 6, 2019, the City Council adopted Ordinance No. 1981, as a means of creating Accessory Dwelling Units (" ADUs") in accordance with California Government Code ( CGC) Section 65852. 2, recognizing ADUs as an important source of housing that contributes to the character and diversity of housing opportunities in the City, and as providing workforce housing, housing for family members, students, elderly, in - home health care providers, the disabled, and others; and WHEREAS, Section 93.23. 14(D)(4)(a) of the Palm Springs Zoning Code adopted by Ordinance No. 1981 set forth a requirement that the owner of an ADU may live within the primary dwelling unit or the ADU, and may rent the other unit, provided rentals shall be for periods of twenty- eight ( 28) days or more, or may rent both the primary dwelling unit and ADU concurrently for periods of twenty- eight ( 28) days or more; and WHEREAS, in accordance with Section 93. 23. 14( D)( 4)( a) of the Palm Springs Zoning Code, new ADUs may not be constructed with the intent purpose of being operated as a "Vacation Rental" as that term is defined in and pursuant to Chapter 5.25 of the Palm Springs Municipal Code; and
WHEREAS, the City Council' s adoption of Ordinance No. 1981 was in compliance with the State' s mandate regarding ADUs wet forth in CGC Sections 65852. 1 and 65852. 2, as a response to the State' s severe housing crisis, with the intention of providing for the creation of more ADUs; and
WHEREAS, payment of Development Impact Fees and Developer Fees constitutes a barrier for the construction of affordable dwelling units and ADUs; and WHEREAS, the City Council desires to establish a policy of incentivizing the construction of new affordable dwelling units, multiple - unit and ADUs through the establishment of lower Development Impact Fees and/ or Developer Fees, as a way of addressing the City' s and State' s housing crisis; and WHEREAS, nothing herein constitutes the City' s approval of any applications, development project entitlements and/ or permits, and such, to the extent required in the future, are subject to and contingent upon City Council approval following, to the extent applicable, environmental review in compliance with the California Environmental Quality Act (" CEQA").

THE CITY COUNCIL OF THE CITY OF PALM SPRINGS, CALIFORNIA, HEREBY RESOLVES, DETERMINES AND APPROVES AF FOLLOWS:

SECTION 1. Factual Findings:

A. The true and correct recitals above are incorporated by this reference herein as the basis and foundation for the City' s adoption of this Resolution.

B. The City Council has determined that waiving or reducing certain Development Impact Fees and Developer Fees established by previous Resolutions for new residential

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Resolution No. 24654

projects that construct affordable and/ or multi -family residential dwelling units or ADUs would not significantly alter the City' s ability to finance the design, construction, installation, and acquisition of public infrastructure or significantly impact existing finance plans.

C. The establishment of lower Development Impact Fees and Developer Fees to incentivize construction of new affordable and/ or multi -family residential dwelling units and ADUs is consistent with the City of Palm Springs General Plan Housing Element, in furtherance of:

Goal HS1: Facilitate a broad range of housing types, prices, and opportunities to address current and future housing needs; and
Action HS1. 3: Continue to Offer Financial Incentives. Whereas the City of Palm Springs has designated sufficient vacant land to support the production of housing affordable to all economic segments of the community, affordable housing typically requires publicly and privately funded financial assistance to make projects feasible.

To that end, the City grants financial incentives ( e.g., fee waivers for parks), to support the production of affordable housing to be built during the present housing element planning period. The continuation of financial incentives will further City housing goals. 5- Year Objectives:

Continue to approve fee reductions and waivers, General funds, and make available other financial assistance, where possible, for extremely low, very low and low income housing projects.

Consider waiving the Multiple Species Habitat Conservation Plan fee ( e.g., fee to acquire sensitive habitat) for extremely low, very low and low income affordable housing projects.

Promote financial and development assistance programs to the building community on an annual basis.

D. The City Council has considered the effects of the reduced Development Impact Fees and Developer Fees to incentivize construction of new affordable and/ or multi -family residential dwelling units and ADUs with respect to the City' s and region' s housing needs.

SECTION 2. Affordable and Multi -Family Housing Incentive Program Established.
1) The City Council hereby establishes the " Affordable and Multi -Family Housing Incentive Program" applicable to new residential projects that construct affordable dwelling units for sale or rent, or for construction of new multi -family dwelling units for sale or rent, or construction of new ADUs, ( hereafter the " Program"). The Program shall provide relief from payment of applicable Development Impact Fees and/ or Developer Fees, or deferral of the payment of these fees, as further specified herein.

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Resolution No. 24654

2) Purpose: The City Council hereby establishes the Program to encourage the construction of residential projects that will provide units with affordable rents or affordablehousingcostsfor lowandvery low-incomehouseholdsin the Cityof Palm Springs. Additionally, the City Council establishes the Program to encourage construction of new housing affordable to middle income households. The City Council finds that payment of certain fees for residential development may create a barrier to such development and desires, by the adoption of this Resolution, to ease such barrierby eliminatingthe requirementto pay the full cost of certainfees, or to allow deferral of the payment of certain fees. To create further incentive to construct residentialprojectswith affordabledwelling units, the City Councilalso desires to reduce certain Developer Fees or a portion of such fees as set forth in this Resolution.

TheCityCouncilfindsthatthis Programis consistentwiththe policiesandgoalsof the HousingElementof the GeneralPlanof the Cityof PalmSprings, andnecessary for the health and welfare of the City' s residents.
3) Definitions
a) " Affordabilitycovenant" meansa covenantrestrictingall low incomeandvery low- income units to remain affordable to low income and very low- income households for not less than 55 years for rental units and not less than 45 years for owner - occupied units.
b) " Affordabledwellingunits" meansa residentialunit (single family homeor multi- familycondominiumunit) for sale, or a residentialapartmentunitfor rent, that are restricted for occupancy by low-income and very low-income households. c) " Affordable housing cost" refers to the definition contained in California Health & SafetyCodesection50052.5, including, but not limitedto, cost limitsfor low and very low-income households in owner -occupied housing, as further defined in Volume 25 of the California Code of Regulations.
d) " Affordable housing project" means new residential projects that include construction of affordable dwelling units for sale at an affordable housing cost, or for rent at an affordable rent.
e) " Affordable rent" refers to the definition contained in California Health & Safety Code section 50023, including but not limited to cost limits for low and very low- income households in rental housing, as further defined in Volume 25 of the California Code of Regulations.
f) " Applicant" means the owner or owners of record of the real property who request a reduced fee amount pursuant to the Program.
g) " Area Median Income" means the median household income as provided in Section 50093( c) of the California Government Code, as it is currently enacted or hereinafter amended.

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Resolution No. 24654

h) " Developer Fees" refers to development processing and administrative fees including, but not limited to, application, processing, plan check and inspection fees required by code, ordinance, resolution or other law to be paid as a condition of, or prerequisite to, development of residential uses, as those codes, ordinances, resolutions or other laws may be amended from time to time. i) " Development Impact Fees" refers to city fees imposed for the purpose of defraying all or a portion of the cost of public facilities related to a development project as required by code, ordinance, resolution or other law to be paid as a condition of, or prerequisite to, development of residential uses, as those codes, ordinances, resolutions or other laws may be amended from time to time. Only Development Impact Fees imposed by the City are subject to this Program. All Development Impact Fees imposed by other entities or agencies are excluded from the Program, and shall be paid by the applicant in accordance with applicable statutes, resolutions, ordinances, and regulations.
j) " Director" means the Director of Planning Services, or his or her designee. k) " Fee Program Participation Agreement' refers to the agreement by and between the applicant and the City of Palm Springs that is required for approval of participation in this Program.
1) " Household" means one person living alone or two or more persons sharing residency whose income is considered for housing payments. m) " Inclusionary Unit' means a new multi -family residential condominium unit offered for purchase to middle -income households at a sales price according to requirements specified in the Program.
n) " Low- income households" refers to the definition contained in California Health & Safety Code section 50079. 5, including but not limited to an income limit of 80 percent of area median income, adjusted for family size and revised annually. o) " Middle - income households" refers to household whose income is between 120 percent and 160 percent of the Area Median Income, adjusted for household size. p) " Penalties" means an amount equal to one hundred dollars ($ 100) per unit per month computed from the date deferred fees are due and payable or the date units are required to be constructed.
q) " Very low- income households" refers to the definition contained in California Health Safety Code section 50105, including but not limited to an income limit of 50% of area median income, adjusted for family size and revised annually. 4) Affordable Housing Projects:

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Resolution No. 24654

Affordablehousingprojectsshallbe eligiblefor reducedDevelopmentImpactFees and Developer Fees as follows:
a) For affordable housing projects proposing construction of 100% affordable dwellingunits, the applicableDevelopmentImpactFeesand DeveloperFeesare herebyestablishedata ratethat is reducedby 100%.
b) For affordable housing projects proposing construction of less than 100% affordabledwellingunits, the applicableDevelopmentImpactFeesandDeveloper Fees are hereby established as follows:
i) 90% - 100% affordable dwelling units = reduced by 90% ii) 80% - 89% affordable dwelling units = reduced by 80% iii) 70% - 79% affordable dwelling units = reduced by 70% iv) 60% - 69% affordable dwelling units = reduced by 60% v) 50% - 59% affordable dwelling units = reduced by 50% vi) 40% - 49% affordable dwelling units = reduced by 40% vii) 30% - 39% affordable dwelling units = reduced by 30% viii) 20% - 29% affordable dwelling units = reduced by 20% ix) 10% - 19% affordable dwelling units = reduced by 10% x) 5% - 9% affordable dwelling units = reduced by 5%
xi) 1 % - 4% affordable dwelling units = reduced by 1 % c) An applicantproposingan affordablehousingprojectmay file a requestwith the Director at the time the applicant files applications for related land use entitlements orotherapprovalswiththe City. Therequestshallclearlyidentifythenatureof the request, the type of affordable housing project, the number of units, and the requested reduction of applicable Development Impact Fees and Developer Fees pursuant to the Program.
d) As a condition of the City's acceptance of an applicant's land use entitlement applications, the applicant shall be required to enter into a Fee Program Participation Agreement in a legal form satisfactory to the City Attorney and approvedbythe CityManager. The FeeProgramParticipationAgreementshall:
i) Be site and project specific;
ii) Require applicant to enter into required affordability covenants for proposed affordabledwellingunitsasa conditionof receivingthe benefitofthe Program pursuant to the Fee Program Participation Agreement.
iii) Allow for the deferral of payment of required Developer Fees and Development Impact Fees until, and immediately prior to, the City's issuance of a Certificate of Occupancy for the affordable dwelling units subject to the Fee Program Participation Agreement. If construction of the affordable

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Resolution No. 24654

dwelling units is phased, or consolidated into separate buildings, the payment of required Developer Fees and Development Impact Fees will be required at the time a final inspection and Certificate of Occupancy is requested by the applicant for each phase of the affordable housing project, or each building constructed with affordable dwelling units.
iv) Provide for reimbursement to the City of all applicable Developer Fee reductions provided by the Program if, following twenty- four ( 24) months from the City' s approval of all discretionary land use entitlements associated with the affordable housing project, the applicant fails to: ( 1) enter into required affordability covenants, or ( 2) obtain a building permit from the City to construct the affordable dwelling units. Extensions of time associated with land use entitlements granted by the City shall automatically extend the time limit required herein.
v) Provide for reimbursement to the City of a portion of applicable Developer Fees and/or Development Impact Fees reduced by the Program if the applicant fails to construct the number or percentage of affordable units specified in the Fee Program Participation Agreement.
vi) Provide for the enforcement of the provisions of the Program; vii) Bind applicant' s successors in interest;
viii) Provide that the project applicant shall defend, indemnify and hold harmless the City and its officials and employees for any claim or action arising from the Agreement, including, without limitation, any claim or action regarding the applicability of prevailing wages; and
ix) Be recorded with the Riverside County Recorder' s Office. e) The applicant shall be responsible for any recording fees of the Fee Program Participation Agreement.
5) Multi -Family Apartment Projects:

Multi -family apartment projects not constructing affordable dwelling units shall be eligible for reduced Developer Fees and Development Impact Fees as follows:
a) An applicant constructing a multi -family apartment project with new apartment units for lease to the public at market rental rates shall be eligible for a 50% reduction of applicable Developer Fees and Development Impact Fees. b) As a condition of the City' s acceptance of an applicant' s land use entitlement or building permit applications, the applicant shall be required to enter into Fee Program Participation Agreement in a legal form satisfactory to the City Attorney and approved by the City Manager. The Fee Program Participation Agreement shall:
i) Be site and project specific;

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Resolution No. 24654

ii) Allow for the deferral of payment of required Developer Fees and Development Impact Fees until, and immediately prior to, the City's issuance of a Certificate of Occupancy for the apartment units subject to the Fee Program Participation Agreement. If construction of apartment units is phased, or consolidatedinto separatebuildings, the deferralof paymentof required Developer Fees and Development Impact Fees will be required at the time a final inspection and Certificate of Occupancy is requested by the applicant for each phase of the multi -family apartment project, or each building constructed with apartment units.
iii) Provide for reimbursement to the City of all applicable Developer Fees reduced by the City pursuant to the Program if, following twenty-four ( 24) months from the City's approval of all discretionary land use entitlements associated with the multi -family apartment project, the applicant fails to obtain a building permit from the City to construct the apartment units. Extensions of time associated with land use entitlements granted by the City shall automatically extend the time limit required herein.
iv) Provide for reimbursement to the City of a portion of applicable Developer Fees and Development Impact Fees reduced by the City pursuant to the Program if the applicant fails to construct the total number of apartment units specified in the Fee Program Participation Agreement.
v) Provide for reimbursement to the City of all applicable Developer Fees and Development Impact Fees reduced by the City pursuant to the Program if any or all of the apartment units are converted to another use, or cease to be made available for lease to the public;
vi) Bind applicant' s successors in interest;
vii) Provide that the project applicant shall defend, indemnify and hold harmless the City and its officials and employees for any claim or action arising from the Agreement, including, without limitation, any claim or action regardingthe applicability of prevailing wages; and
viii) Be recorded with the Riverside County Recorder' s Office. c) The applicant shall be responsible for any recording fees of the Fee Program Participation Agreement.

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Resolution No. 24654

6) Accessory Dwelling Units ( ADUs):

ADUs shall be eligible for reduced Developer Fees as follows:
a) The applicable Developer Fees for an ADU that is constructed for the purpose of providing a rental unit to a third party, at an affordable rent pursuant to an affordability covenant, is hereby established at a rate that is reduced by 100% of the otherwise applicable amount of the subject Developer Fee( s). b) The applicable Developer Fees for an ADU constructed for the purpose of providing a rental unit to a third party, at market rental rates, or for use by a member of the applicant' s family, is hereby established at a rate that is reduced by 50% of the otherwise applicable amount of the subject Developer Fee( s). c) As a condition of the City' s acceptance of an applicant' s land use entitlement or building permit applications, the applicant shall be required to enter into Fee Program Participation Agreement in a legal form satisfactory to the City Attorney and approved by the City Manager. When required, the Fee Program Participation Agreement shall require execution of an affordability covenant. 7) Multi -Family Residential Condominium Projects:

Multi -family residential condominium projects not constructing affordable dwelling units shall be eligible for reduced Developer Fees and Development Impact Fees as follows:
a) Developer Fees for new multi -family residential condominium projects where 100% of the units will be sold as Inclusionary Units are hereby established at a rate that is reduced by 100% of the otherwise applicable amount of such Developer Fee( s).
b) An applicant proposing a new residential condominium project where less than 100% of the units will be sold as Inclusionary Units shall be eligible for a reduction of applicable Developer Fees as follows:
i) 90% 100% Inclusionary Units = reduced by 90%
ii) 80% 89% Inclusionary Units = reduced by 80%
iii) 70% 79% Inclusionary Units = reduced by 70%
iv) 60% 69% Inclusionary Units = reduced by 60%
v) 50% 59% Inclusionary Units = reduced by 50%
vi) 40% 49% Inclusionary Units = reduced by 40%
vii) 30% 39% Inclusionary Units = reduced by 30%
viii) 20% 29% Inclusionary Units = reduced by 20%
ix) 10% 19% Inclusionary Units = reduced by 10%
x) 5% - 9% Inclusionary Units = reduced by 5%

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Resolution No. 24654

xi) 1 % - 4% Inclusionary Units = reduced by 1 %
c) Price limits established for Inclusionary Units: Inclusionary Units must be restricted to and sold at prices at which middle -income households can qualify for the purchase. Qualification shall be based on not more than 35% of median family income being applied to housing expenses (mortgage principal and interest, taxes, insurance, and assessments). The determination of an acceptable sales price shall be determined in accordance with the following methodology:

1. Determine Current Median Family Income
a) Obtain most recent Mean Household Income for a family (" MHI") for Riverside - Ontario -San Bernardino found in the Census ACS 1-Year Survey Survey") published by the U.S. Census Bureau (or if such survey is no longer published, a comparable source). The Survey can currently be obtained using the following link:
https:// www. census. gov/ programs- surveys/ acs/
b) Increase the MHI by the change in the California Consumer Price Index CCPI") since the date of the Survey using information obtained from the State of California Department of Industrial Relations CCPI calculator for California, Urban Wage Earners and Clerical Workers ( or Riverside if available), currently found at:
https:// www. dir.ca. gov/ OPRL/ CAPricelndex. htm.

2. Determine Affordable Sales Price
a) Divide MHI by 12
b) Multiply result of ( a) by 35%
c) Divide result of (b) by 0.005 (0.005 represents mortgage interest rate of 6%)

3. Determine Maximum Sales Price
The maximum home price for any residential unit proposed by the applicant cannot exceed 120% of the Affordable Condominium Price determined in Step 2.

Example:
2017 Survey = $ 76, 530
CCPI Change between December 2017 and June 2019 = 5. 8% MHI = $ 76, 530 x 1. 058 = $ 80, 969

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Resolution No. 24654

MHI / 12 = $ 80, 969 / 12 = $ 6, 747
Affordable Mortgage = $ 6, 747 x 35% _ $ 2, 362
Affordable Sales Price = $ 2, 362 / 0. 005 = $ 472, 319 Maximum Sales Price = $ 472, 319 x 120% _ $ 566, 783
The City Manager is authorized to modify the method of calculating price limits for Inclusionary Units, as may be required to update the effects of changing interest rates on home affordability. The City Manager shall publish any modification of this policy in an administrative regulation approved by the City Manager and filed with the City Clerk. Further, the City Council, in its sole discretion, may authorize participation in the Program for a multi -family residential condominium project with sales prices that exceed the maximum sales price determined above dependent upon other direct benefits provided to the community by the multi -family residential project, or if the applicant sets aside a specified amount of the condominium units as affordable dwelling units, as required by the City Council.
d) As a condition of the City' s acceptance of an applicant' s land use entitlement applications, the applicant shall be required to enter into Fee Program Participation Agreement in a legal form satisfactory to the City Attorney and approved by the City Manager. The Fee Program Participation Agreement shall:

Be site and project specific.
ii) Restrict the sales price for the proposed Inclusionary Units as a condition of receiving the benefit of the Program pursuant to the Fee Program Participation Agreement.
iii) Allow for the deferral of payment of required Developer Fees and Development Impact Fees until, and immediately prior to, the City' s issuance of a Certificate of Occupancy for the Inclusionary Units subject to the Fee Program Participation Agreement. If construction of Inclusionary Units is phased, or consolidated into separate buildings, the payment of required Developer Fees and Development Impact Fees will be required at the time a final inspection and Certificate of Occupancy is requested by the applicant for each phase of the multi -family residential condominium project, or each building constructed with Inclusionary Units.
iv) Provide for reimbursement to the City of all applicable Developer Fees reduced by the City pursuant to the Program if, following twenty- four ( 24) months from the City' s approval of all discretionary land use entitlements associated with the multi -family residential condominium project, the applicant fails to obtain a building permit from the City to construct the inclusionary units. Extensions of time associated with land use entitlements granted by the City shall automatically extend the time limit required herein.

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Resolution No. 24654

v) Provide for reimbursement to the City of a portion of applicable Developer Fees reducedby the City pursuantto the Programif the applicantfails to constructthe numberor percentageof InclusionaryUnitsspecifiedinthe Fee Program Participation Agreement.
vi) Provide for the enforcement of the provisions of the Program; vii) Bind applicant' s successors in interest;
viii) Provide that the project applicant shall defend, indemnify and hold harmless the City and its officialsand employeesfor any claimor action arisingfrom the Agreement, including, without limitation, any claim or action regarding the applicability of prevailing wages; and
ix) Be recorded with the Riverside County Recorder' s Office. e) The applicant shall be responsible for any recording fees of the Fee Program Participation Agreement.

SECTION 3. Severability.

Each component of the fees and all portions of this Resolution are severable. Should any individual component of the fee or other provision of this Resolution be adjudicated to be invalid and unenforceable, the remainingprovisionsshall be and continueto be fully effective, andthefee shallbefullyeffectiveexceptas to that portionthat hasbeenjudged to be invalid.

SECTION 4. Effective Date.

This Resolution will become effective immediately upon adoption and remain effective unless superseded by a subsequent resolution.

SECTION 5. CEQA.

Adoption of this Resolution is not considered a " Project" as defined by the California Environmental Quality Act ( CEQA). Pursuant to Section 15378( a), a " Project" means the wholeof anaction, whichhasa potentialfor resultingin eithera directphysicalchangein the environment, or a reasonably foreseeable indirect physical change in the environment. Adoption of this Resolution establishes a policy to establish reduced City fees, and is considered exempt from CEQA pursuant to Section 15378(b), in that a Project" does not include: ( 5) Organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment.

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Resolution No. 24654

PASSED, APPROVED, AND ADOPTED BY THE PALM SPRINGS CITY
COUNCIL THIS 2" d DAY OF OCTOBER, 2019.

DAVID H. READY, ESQ

CITY MANAGER
ATTEST:

THONY M ,

CITY CLE K

CERTIFICATION

STATE OF CALIFORNIA )
COUNTY OF RIVERSIDE ) ss.

CITY OF PALM SPRINGS)
I, ANTHONY J. MEJIA, MMC, City Clerk of the City of Palm Springs, hereby certify that Resolution No. 24654 is a full, true and correct copy as was duly adopted at a regular meeting of the City Council of the City of Palm Springs on the 2" d
day of October, 2019,
by the following vote:

AYES: Councilmembers Holstege, Middleton, Roberts, Mayor Pro Tern Kors, and Mayor Moon
NOES: None
ABSENT: None
ABSTAIN: None
IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Palm Springs, California, this day ofyckobcf , NTHON

MEJ A, C CITY
CLEARK

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CITY COUNCIL STAFF REPORT
DATE: March 11, 2026 BUSINESS & LEGISLATIVE
SUBJECT: AMENDMENT TO SETTLEMENT/DEVELOPMENT AGREEMENT BY

AND BETWEEN CITY OF PALM SPRINGS AND SELENE PALM

SPRINGS, LLC
FROM: Scott C. Stiles, City Manager
BY: Economic Development
SUMMARY:

This staff report provides the City Council with an update on the status of the Dream Hotel Project located at the northwest corner of Avenida Caballeros and East Amado Road, and requests Council consideration of the First Amendment to the Settlement and Development Agreement between the City of Palm Springs and Selene Palm Springs, LLC (“Developer”). The proposed amendment updates the project’s schedule of performance, memorializes additional community mitigation commitments, and clarifies ongoing site oversight obligations while preserving the City’s core economic development objectives and previously approved entitlements.

The Dream Hotel Project has a long history of City Council review and approval dating back as far as the late 1990’s, including multiple amendments to the Planned Development District, Purchase and Sale Agreement, Operations Covenant, and subsequent architectural and site plan approvals. Since the most recent City Council action approving amendments to the project in June 2023, the Developer has continued pre-construction work, site monitoring, and community coordination, while advancing design refinement, value engineering, and financing efforts.

The proposed Amendment reflects an updated and more detailed performance schedule extending through construction commencement and hotel opening, formalizes neighborhood communication protocols, and reinforces site maintenance and mitigation measures during the pre-construction period. Approval of the amendment will provide clarity and accountability regarding near-term milestones while maintaining the City’s protections and the overall framework previously approved by the City Council.

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City Council Staff Report
March 11, 2026 -- Page 2
Amendment to Settlement/Development Agreement with Selene, Inc. 7 6
0 RECOMMENDATION:

1. Approve the First Amendment to the 2023 Dream Hotel Settlement and Development Agreement with Selene, Inc.; and,

2. Authorize the City Manager and City Attorney to make any non-substantive changes as needed and to execute the Amendment.

BACKGROUND:

The Dream Hotel Project has been subject to extensive City review and public process over nearly two decades, reflecting both its scale and its location adjacent to the Convention Center and established residential neighborhoods.

In July 2007, the City Council approved Planned Development District (PDD) 333 for the property, authorizing a mixed-use project consisting of a hotel and residential condominium development. Subsequent actions in 2009 and 2013 modified site layout, elevations, and phasing, while preserving the fundamental land use concept.

In March 2013, the City and the Developer entered into a Purchase and Sale Agreement and related Services Agreement governing conveyance of the City-owned property, performance milestones, and obligations related to public parking replacement.

Between 2014 and 2017, the City Council approved multiple amendments to these agreements adjusting entitlement deadlines, construction timing, and financing structure in response to market conditions and project redesign.

In June 2017, the City Council approved a significant amendment to PDD 333, transitioning the project to a Dream-branded hotel concept, including a 170-room hotel and 35 residential condominium units, with associated parking and amenities.

In November 2017, the Council approved an Amended and Restated Hotel Operations Covenant, extending the project’s participation in the City’s Hotel Operations Incentive Program and revising performance benchmarks.

Between 2018 and 2019, the City approved further amendments to the Purchase and Sale Agreement and Final Development Plans, including adjustments to the hotel-to- condominium unit mix, relocation of residential buildings, and extensions to construction and opening milestones. These actions preserved the project’s eligibility for incentive participation while responding to evolving design, financing, and construction realities.

In June 2023, following continued public hearings and Planning Commission review, the City Council approved amendments to the Final Development Plans and Tentative Tract Map, together with a Settlement and Development Agreement intended to facilitate completion of the project. As part of that action, the Council directed additional

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0 architectural review of the North and South Villas and requested heightened attention to neighborhood interface, site security, and project timing.

In 2024, the Architectural Review Committee conducted multiple hearings on the residential components of the project, resulting in further refinements to building massing, materials, solar control, and perimeter treatments. These reviews did not alter the overall entitlements but ensured consistency with Council direction and neighborhood compatibility.

Following the 2024 approvals and subsequent architectural reviews, the Developer has continued pre-construction activities while coordinating closely with City staff. These efforts focused on maintenance of the site including landscape and fence conditions, completed $80M in value engineering, secured administerial entitlements, refined construction sequencing, and advanced financing discussions.

The Developer has also undertaken steps to improve transparency and responsiveness to community concerns, including preparing materials for neighborhood meetings, developing a project webpage framework, and coordinating with staff regarding site maintenance and security issues raised by nearby residents. Neighborhood meetings are held the second Thursday of every month at the Palm Springs Convention Center and can be found here: www.PalmSpringsDream.com
Staff notes that while construction has not yet commenced, the proposed First Amendment reflects a more robust and structured approach to project oversight, communication, and milestone tracking than prior agreements. Approval of the amendment will allow the City to formalize these commitments and provide a clearer basis for ongoing monitoring as the project moves toward construction.

STAFF ANALYSIS:

Proposed First Amendment – Key Terms
The proposed First Amendment to the Settlement and Development Agreement is informed by 2025 activity including recent project status reviews, visits by City officials to the Dream Headquarters and ownership in New York, correspondence between the City and Developer in 2025, and discussions focused on addressing schedule compliance, site conditions, and community concerns. The amendment is narrowly tailored to update performance milestones and formalize commitments that have been the subject of ongoing coordination.

Updated Schedule of Performance The amendment establishes a revised and detailed schedule extending from late 2025 through hotel opening, including interim benchmarks for construction document completion, site remediation, financing completion, construction commencement, and project delivery. These milestones provide clearer

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0 accountability than prior schedules and allow the City to monitor progress at defined intervals. This schedule extends the terms of the Covenant.

Community Outreach and Communication Commitments The amendment significantly strengthens and formalizes the Developer’s obligations related to community engagement. Specifically, the Developer commits to:
- Hosting an initial neighborhood meeting beginning in November 2025, followed by monthly in-person meetings thereafter through project completion, at the Developer’s sole expense;
- Establishing and maintaining a dedicated project webpage and project email address, updated at least monthly with schedule updates, construction notices, and upcoming meeting information;
- Providing opportunities for residents to sign up for project updates and notifications;
- Coordinating with City staff on meeting logistics, agendas, and follow-up responses to community questions; and
- Continuing good-faith cooperation with the City to implement additional mitigation measures as may be mutually agreed upon prior to and during construction.

These commitments are intended to ensure consistent, transparent communication with nearby residents and stakeholders and to provide predictable forums for addressing issues as the project advances.

Ongoing Site Oversight and Maintenance The amendment also memorializes the Developer’s obligation to maintain the site during the pre-construction period, including regular monitoring, fence repairs, landscape maintenance, and timely response to site conditions upon awareness. These measures respond directly to prior Council concerns regarding aesthetics, security, and neighborhood impacts while construction is pending.

ALIGNMENT WITH STRATEGIC PLANNING:

This action directly advances the City Council-adopted Economic Development Strategic Framework, Principle B (Reinvigorate the Business Climate); Principle C (Bolster Core Industries); and Principle E (Strengthen Community Assets and Infrastructure).

FISCAL IMPACT:

Approval of the proposed First Amendment has no immediate General Fund impact. The amendment does not increase the City’s financial obligations or modify the previously approved Hotel Operations Incentive Program terms. Upon completion and operation, the project is anticipated to generate significant ongoing TOT, sales tax, and property tax revenues consistent with prior analyses presented to the City Council.

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Amendment to Settlement/Development Agreement with Selene, Inc. 7 6
0 REVIEWED BY:

Department Director: Wayne Olson
City Attorney: Jeffrey S. Ballinger
City Manager: Scott Stiles

ATTACHMENTS:

A. 2023 Draft Agreement with Selene Palm Springs, LLC approved on June 5, 2023 B. Dream Hotel First Amendment to the Settlement and Development Agreement by and between the City of Palm Springs and Selene Palm Springs, LLC C. Covenant Agreement and between the City of Palm Springs and Selene Palm Springs, LLC

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ATTACHMENT A
(2023 Draft Agreement with
Selene Palm Springs, LLC
approved on June 5, 2023)

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SETTLEMENT AND DEVELOPMENT AGREEMENT
by and between

THE CITY OF PALM SPRINGS
and

SELENE PALM SPRINGS, LLC

Dated _____________, 2023

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TABLE OF CONTENTS
Page
i

ARTICLE I SETTLEMENT AGREEMENT ............................................................................ 2 Section 1.1. Settlement, No Admissions by Parties ....................................................... 2 Section 1.2. Mutual General Releases ........................................................................... 2 Section 1.3. California Civil Code Section 1542 ........................................................... 2 ARTICLE II DEVELOPMENT AGREEMENT ........................................................................ 3 Section 2.1. Representations and Warranties ................................................................. 3 Section 2.2. Effective Date ............................................................................................ 6 ARTICLE III PROJECT FINANCING ........................................................................................ 6 Section 3.1. Evidence of Financing .............................. Error! Bookmark not defined.

Section 3.2. Unauthorized Liens .................................................................................... 6 Section 3.3. Rights of Lenders and City Regarding Permitted Loans and Liens .. Error! Bookmark not defined.

Section 3.4. Developer Covenants ............................................................................... 14 Section 3.5. Insurance .................................................................................................. 20 Section 3.6. Workers’ Compensation Insurance Requirement .................................... 20 Section 3.7. Liability and Permanent Insurance Requirements ................................... 21 Section 3.8. Defaults - General .................................................................................... 23 Section 3.9. Events of Default………………………………………………………...23 Section 3.10. Repurchase Option ................................................................................... 24 ARTICLE IV MISCELLANEOUS ............................................................................................ 25 Section 4.1. No Third-Party Beneficiaries; No Assignment ........................................ 25 Section 4.2. Enforcement of Agreement ...................................................................... 25 Section 4.3. Damages ................................................................................................... 26 Section 4.4. Limits ....................................................................................................... 26 Section 4.5. No Waiver ................................................................................................ 26 Section 4.6. Notices ..................................................................................................... 26 Section 4.7. Entire Agreement ..................................................................................... 26 Section 4.8. Amendments and Modifications .............................................................. 27 Section 4.9. Rights of Lender to Modify Agreement................................................... 27 Section 4.10. Choice of Law and Arbitration ................................................................ 27 Section 4.11. Authorized Signatory ............................................................................... 27 Section 4.12. Severability .............................................................................................. 27 Section 4.13. Counterparts; Electronic Signatures ........................................................ 27

- ATTACHMENT A - LEGAL DESCRIPTION
- ATTACHMENT B - BENCHMARK SCHEDULE
- ATTACHMENT C - SCOPE OF DEVELOPMENT/ENTITLEMENT PACKAGE

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1 SETTLEMENT AGREEMENT

This Settlement and Development Agreement (“Agreement”), dated as of May 1, 2023, is entered into by and between the City of Palm Springs ( “City”) and Selene Palm Springs, LLC, a California limited liability company (“Developer”). City and Developer may be referred to herein individually as a “Party” or collectively as the “Parties.”

RECITALS
A. Developer acquired that certain approximately 7.8 acre parcel located at the northeast corner of Calle Alvarado and East Amado Road ( “Property”), more fully described in Attachment A, from the City under that certain Grant Deed recorded as Document No. 2016 - 0367646 ( “Grant Deed ”) pursuant to the previously entered Purchase and Sale Agreement (A6329), as amended by eleven amendments dated between March of 2014 and April of 2020 (“PSA”); the related Services Agreement, as amended by three amendments dated between March of 2014 and December of 2018 ( “SA”); and the Amended and Restated Operations Covenant Agreement No. 6642, recorded as Document No. 2017 -0544662 (“Covenants”, together with the PSA and SA, the “Original Development Agreement”) between the City and Developer for the purpose of developing and maintaining a hotel project (“Original Project”) located on the Property.

B. The Parties have agreed to use thi s Agreement to achieve and establish the terms for a full and complete resolution of all claims and actions that, as of the date hereof, have been or could be asserted in connection with the Original Development Agreement, and to set forth terms for the development of the Project (as defined below) going forward.

C. In 2022, Developer submitted a revised project to the City for entitlement. The Revised Project (“Project”) includes the following and is described in greater detail in Scope of Development, Attachment C attached hereto and incorporated herein, and the Dream Hotel and Condominium Application as approved by the City Council on May 11, 2023:
• Between 150-160 Transit Occupancy Tax (“TOT”) generating hotel rooms. • No less than 28 residential units in the hotel tower which will be short term rental eligible. These units shall also be subject to the same TOT benefit as the hotel rooms set forth above.
• No less than 12 luxury residential units in the North Villas which will not be short term rental eligible.
• No less than 24 residential units in the South Villas which will not be short term rental eligible.

D. Developer and City agree that, in the interest of purs uing the Project, setting forth a new schedule of performance and obligations of the Parties is desirable.

E. The Developer intends to construct the Project in accordance with Attachment B.

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2 TERMS
NOW THEREFORE , in consideration of the mutual covenants, agreements, representations, and warranties contained in this Agreement, an d other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

A. Recitals. The foregoing Recitals are incorporated into and are hereby made a part of this Agreement.

ARTICLE I

SETTLEMENT AGREEMENT
Section 1.1. Settlement, No Admissions by Parties . Each of the Parties acknowledges that this Agreement is for settlement purposes and relates to the avoidance of the fees, costs, expenses, and risks associated with the litigation of potential claims and defenses and the preclusion of any potential actions described herein. Therefore, the Parties agree that this Agreement is not to be treated or construed, at any time or in any manner whatsoever, as an admission by any Party of wrongdoing, fault, violation of law, or liability of any kind, as of the Effective Date, of any allegations or claims arising out of or connected to the Property, the Original Project or the Original Development Agreement.

Section 1.2. Mutual General Releases.

1.2.1 Except for the requirements and terms set forth in this Agreement, Developer releases City, and its council members, officials, officers, employees, attorneys, contractors, agents, and representatives, from any and all claims, demands, liabilities, obligations, costs, expenses, fees, actions, or cau ses of action that Developer has or had, as of or prior to the Effective Date, arising out of or connected to the Property, the Original Project or the Original Development Agreement, whether known, unknown, or suspected.

1.2.2 Except for the requirements and te rms set forth in this Agreement, City releases Developer, its managers, members, officers, directors, employees, contractors, attorneys, agents, and representatives, from any and all claims, demands, liabilities, obligations, costs, expenses, fees, actions, or causes of action that City has or had, as of or prior to the Effective Date, arising out of or connected to the Property, the Original Project or the Original Development Agreement, whether known, unknown, or suspected.

Section 1.3. California Civil Code Section 1542.

1.3.1 Contingent upon the full completion of the terms of this Agreement, to the maximum extent provided by law, each Party hereby fully and forever releases the other Party from any claims, debts, or obligations, as of or prior to the Effective Date, ar ising from the Property, the Original Project, the Original Development Agreement, or actions of a Party in connection therewith. Each Party acknowledges it has had the opportunity to receive independent legal advice with respect to the advisability of mak ing this Agreement and with respect to the

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3 meaning of Section 1542 of the California Civil Code, and that they are freely and voluntarily entering in this Agreement and understand this Agreement in its entirety.

1.3.2 Contingent upon the full completion of the terms of this Agreement, it is the intention of the Parties that the mutual release entered into as part of this Agreement shall be effective as a bar to all actions, causes of action, obligations, costs, expenses, attorney ’s fees, damages, losses, claims, liabilities and demands of any character, nature and kind, known or unknown, suspected or unsuspected, as of or prior to the Effective Date, related to the Property, the Original Project, the Original Development Agreement to be so barred; in furtherance of which intention the Parties expressly waive any and all right and benefit conferred upon them by the provisions of Section 1542 of the California Civil Code, which reads as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT

THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR

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

EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR

HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
______________________ ______________________
City Selene Palm Springs, LLC

1.3.3 The Parties hereby acknowledge that the foregoing waiver of the provisions of Section 1542 of the California Civil Code was bargained for separately. The Parties expressly agree that the release provision h erein contained shall be given full force and effect in accordance with each and all of the express terms and provisions herein, including but not limited to those terms and provisions relating to unknown or unsuspected claims, demands and causes of action hereinabove specified. The Parties specifically agree to assume the risk of the subsequent discovery or understanding of any matter, fact, or law which if now known or understood would in any respect have affected this Agreement.

ARTICLE II

DEVELOPMENT AGREEMENT
Section 2.1. Representations and Warranties.

2.1.1 City Representations and Warranties . The representations and warranties of City contained in this section shall be based upon the actual knowledge of the City Manager as of the Effective Date (hereinafter defined). All re presentations and warranties contained in this section are true and correct as of the Effective Date. City’s liability for misrepresentation or breach of warranty, representation or covenant, wherever contained in this Agreement, shall survive the executi on and delivery of this Agreement. City hereby makes the following representations, covenants, and warranties and acknowledges that the execution of this Agreement by Developer has been made in material reliance by Developer on such covenants, representations, and warranties:

A. City is a California municipal corporation, duly formed and operating under the laws of the State of California. City has the legal power, right, and authority

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4 to enter into this Agreement and to execute the instruments and documents referenced herein, and to consummate the transactions contemplated hereby.

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

C. City has taken all requisite action and obtained all requisite consents for agreements or matters to which City is a party in connection with entering into this Agreement and the instruments and documents referenced herein and in connection with the consummation of the transactions contemplated hereby.

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

E. City agrees that the TOT grant to Developer was effective as of the date it was granted and remains effective.

2.1.2 Developer Representations and Warranties. The representations and warranties of Developer contained in this section shall be based upon the actual knowledge of Rabinder Pal Singh, as agent for the Developer, as of the Effective Date. All representations and warranties contained in this section are true and correct as of the Effective Date. Developer’s liability for misrepresentation or breach of warranty, representation, or covenant, wherever contained in this Ag reement, shall survive the execution and delivery of this Agreement.

Developer hereby makes the following representations, covenants, and warranties and acknowledges that the execution of this Agreement by City has been made in material reliance by City on such covenants, representations and warranties:

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

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

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

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

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

2.1.3 Restrictions on Assignment or Transfer.

A. The Developer acknowledges that the qualifications and identity of Developer is of particular importance to the City and therefore Transfer s are permitted only as provided in this Agreement. Except as set forth in this Section or other provisions of this Agreement, prior to the Project Completion Date as set forth in Attachment B (“Project Completion Date”), the Developer shall not sell, assign, convey, create any trust estate with respect to or otherwise transfer any of its interests in this Agreement and/or the Project (collectively, “Transfers”; individually, a “Transfer,”) if such Transfer will constitute a change in control of the Project or Developer without the prior written approval of the City Manager, which approval shall not be unreasonably withheld, conditioned or delayed . For the avoidance of doubt and notwithstanding anything to the contrary in this Agreement, without the consent or approval of City, Developer may collaterally assign this Agreement to a mortgage lender and the Property or any portion thereof may be conveyed by foreclosure or deed in lieu of foreclosure.

B. At least 30 days prior to any such change, the Developer shall notify the City in writing of an y and all changes whatsoever in the identity of the business entities or individuals either comprising or in control of the Developer, as well as any and all changes in the interest or the degree of control of the Developer by any such person, of which inf ormation the Developer or any of its partners, members or officers are notified or may otherwise have knowledge or information. The City shall either approve or disapprove of such change within 15 days of receipt of such written notice , which approval shall not be unreasonably withheld . This Agreement may be terminated by the City or the City may exercise any other remedy available to the City under the terms of this Agreement, prior to the Project Completion Date, if there is any Transfer, whether voluntary or involuntary, in membership, ownership, management or control of the Developer (other than such changes occasioned by the death or incapacity of any individual)

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6 that has not been approved in writing by the City, prior to the time of such Transfer pr ovided, however, that (i) the City shall first notify the Developer in writing of its intention to terminate this Agreement or to exercise any other remedy, and (ii) the Developer shall have thirty (30) calendar days following its actual receipt of such wr itten notice to commence and, thereafter, diligently and continuously proceed to cure the default of the Developer and submit evidence of the initiation and satisfactory completion of such cure to the City, in a form and substance reasonably satisfactory to the City. Except as expressly permitted in this Agreement, the Developer represents and agrees that it has not made and will not create or suffer to be made or created, any Transfer, either voluntarily, involuntarily or by operation of law, without the prior written approval of the City, until after the Project Completion Date. Any Transfer made in contravention of this Section shall be voidable at the election of the City and, if voided, shall be deemed to be an event of default by the Developer, whether or not the Developer knew of or participated in such Transfer.

Section 2.2. Effective Date. This Agreement is dated as first written above for reference purposes only. This Agreement shall not become effective until the date on which all of the following are true (“Effective Date”): (i) this Agreement is approved and executed by the appropriate authorities of Developer and delivered to City; (ii) Developer has delivered to City a certified copy of the official action taken by all of the managers or members of the Developer approving this Agreement, in a form satisfactory to City; (iii) following all legally required notices and hearings, this Agreement is approved by the City Council; and (iv) this Agreement is executed by the authorized representatives of City.

ARTICLE III

PROJECT FINANCING
Section 3.1. Evidence of Financing . Developer shall submit sufficient evidence of financing or self-financing for the civil work on the Project within 60 days of the Effective Date of this Agreement . The evidence shall be in a form reasonably acceptable to the City Attorney.

Thereafter, Developer commits to providing sufficient evidence of financing or self-financing for each of the phases, as more fully set forth in Attachment B, within one hundred and twenty (120) days of a Building Permit “ready to issue” letter being issued by the City for a particular phase referenced herein. The City shall issue a Building Permit upon Developer obtaining financing or self-financing based upon a Building Permit “ready to issue” letter, paying the associated fees and any satisfaction of any other conditions identified in the “ready to issue” letter.

Section 3.2. Unauthorized Liens. Except as provided above, until recordation of the Certificate of Completion, the Developer shall not record, and shall not allow to be re corded, against the Property, or any portion thereof, any liens not expressly authorized by this Agreement.

Until recordation of the Certificate of Completion, the Developer shall bond, remove, or shall have removed, any unauthorized lien made or recorde d against the Property or any portion of the Property, or shall assure the satisfaction thereof to the satisfaction of the City. After one hundred twenty (120) calendar days prior written notice to the Developer, the City shall have the right, but not the obligation, to satisfy any unauthorized lien made or recorded prior to recordation of the Certificate of Completion and receive reimbursement from the Developer for any amounts paid or incurred in satisfying any such lien, upon demand. Nothing in this Sec tion shall require the Developer to pay or make provisions for the payment of any tax, assessment, lien, or charge that the Developer is in the process of contesting the validity or amount thereof, in good faith, and so

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7 long as such contest shall not subje ct the Property, or any portion thereof, to forfeiture or sale.

Moreover, so long as Developer provides a bond if an unauthorized lien is filed, Developer shall not be in default of this Agreement. For the avoidance of any doubt, as of the Effective Date, there are no mechanics liens on the Property. However, Developer anticipates deeds of trust being recorded to secure financing.

Section 3.3. Rights of Lenders and City Regarding Permitted Loans and Liens. The City shall have the right of reasonable review and approval of any Letter of Intent (“LOI”) with any Lender from which the Developer proposes to obtain any Loan to be secured by a Lien against the Property or any portion thereof. The review of the LOI must occur within fifteen (15) days of receipt by the City of the LOI and any reasonably requested information the City reasonably deems necessary to evaluate the LOI and City shall communicate its approval, disapproval, or conditional approval by email to Developer or the condition is waived by th e City. The City shall not unreasonably withhold, condition or delay its approval of any proposed Lender or Loan. In deciding whether to give, condition or withhold such approval, the City may consider, among other matters, whether or not the proposed Len der is a state or federally chartered bank, savings and loan, or other financial institution which routinely provides construction financing to development projects such as the Project, whether the terms of the Loan as reflected in the LOI are reasonable and customary when compared to the financing terms of similar development projects in the County, the size and financial strength of the proposed Lender, and what effect, if any, any changes requested by the Lender to either this Agreement or any of the attachments to this Agreement may have upon the City’s rights and remedies hereunder. In connection therewith, in any notice requesting approval of a proposed Lender and Loan, the Developer shall include a statement identifying any amendments, modifications, or other changes to this Agreement or its attachments which the proposed Lender will request in connection with the Developer’s obtaining of the Loan.

The City agrees to reasonably consider, but shall not be obligated to accept, any amendment, modification, or other change to this Agreement or any of the attachments to this Agreement which materially restricts, diminishes, or burdens the City’s rights and remedies. If the terms of the LOI are materially changed following the City’s approval of the LOI, De veloper shall submit the new deal terms to the City and City shall have seven (7) days to review and approve the materially different terms. .

3.3.1 Entitlements. Developer has presented to City staff and the City Council for review and entitlement the Project (collectively, the “Plans and Specifications”). The approval of the Plans and Specifications in accordance with the Schedule of Performance , Attachment B, requires approval of City Council . Such required approvals include appropriate analysis required under California Environmental Quality Act, Public Resources Code Sections 21000, et seq. (“CEQA”) for any and all Project entitlements. The Developer obtains no right to develop the Project on the Property or any portion of the Property by virtue of this Agreement alone. If any revisions of the Scope of Development are required by a Governmental Agency (other than the City) having jurisdiction over the Property or the Project, the Developer shall promptly make any such revisions that are generally consistent with the Scope of Development. Developer will construct the Project in Phases as described in detail in the Scope of Development.

3.3.2 Developer Covenant to Undertake Project . The Developer covenants, for itself, its successors, and assigns, that , subjec t to Unavoidable Delays (as hereinafter defined) the Developer shall commence construction of the Project in accordance with

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8 the Schedule of Performance, attached hereto as Attachment B and incorporated herein for all purposes ( “Schedule of Performance ”), and thereafter shall diligently proceed to complete construction of each Phase of the Project in a good and workmanlike manner in substantial conformity with the approved Plans and Specifications, except for such changes not constituting minor field revisions (defined below) as may be mutually agreed upon in writing by and among the Parties, and in compliance with all applicable laws, regulations, orders and conditions of any and all courts, boards, agencies, commissions, offices, or authorities of any nature whatsoever for any governmental unit (federal, state, county, district, municipal, city, or otherwise) whether now or later in existence (“Governmental Agency”) with jurisdiction over the Property or the Project.

After commencement of the work on the Project, the Developer shall not permit such work to cease or be suspended for a time period in excess of forty-five (45) consecutive calendar days, subject to Unavoidable Delays. The Parties agree that time is of the essence in the performance of this Agreement, including, without limitation, the Schedule of Performance, and the satisfaction of conditions precedent considering the large investment of resources that all Parties recognize will be required for the development of the Project.

The developer will, promptly upon substantial completion of construction of each Phase of the Project, cause the Project to be inspected by each Governmental Agency with jurisdiction over that portion of the Project and shall correct any defects and deficiencies that may be disclosed by any such inspection and shall cause to be duly issued all occupancy certificates and other licenses, permits, and authorizations necessary for the operation and occupancy of the completed Project.

The Developer shall do and perform all of the foregoing acts and things and cause to be issued and executed all such occupancy certificates, licenses, and authorizations for the Project on or before the date set forth in the Sche dule of Performance as the completion date for each Phase of the Project, subject to Unavoidable Delays. The Developer shall obtain a Certificate of Completion (as hereinafter defined) on or before the date for each Phase completion established by the Schedule of Performance set forth in Attachment B.

Failure to comply with the time periods for each item on the Schedule of Performance, unless justified by Unavoidable Delays or an extension of time as provided for in this Agreement, shall be an event of Default under this Agreement.

The covenants of this Section shall run with the land of the Property until the earlier of the date of recordation of the final Certificate of Completion for the entire Project or the twenty-first (21st) anniversary of the date of the Effective Date and shall be incorporated in the Notice of Agreement (Attachment D) to be recorded against the Property immediately following the Effective Date of this Agreement.

3.3.3 Developer Attendance at City Meetings . The Developer agrees to have one or more of its employees or consultants who are knowledgeable regarding this Agreement and the development of the Project, such that such person(s) can meaningfully respond to Ci ty questions regarding the progress of the Project, attend City Council meetings, when requested to do so on not less than ten (10) days prior written notice by City staff.

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9 3.3.4 Developer Changes to Plans and Specifications or Schedule of Performance During Course of Construction.

A. The Developer shall have the right during the course of construction of the Project to make “minor field revisions.” “Minor field revisions” shall be defined as detail changes from the approved Plans and Specifications that have no material impact on the Project or are made in order to expedite the work of construction in response to field conditions such as structural detail revisions or interior finish revisions. “Minor field revisions ” exclude material modifications to the Project, including the site plan and arc hitecture previously approved by the City pursuant to the Original Development Agreement. All “ minor field revisions ” must be documented and stamped by the licensed architect or licensed enginee r and/or other design professional as deemed necessary. Nothing contained in this Section shall be deemed to constitute a waiver of or change in any codes, statutes, ordinances, laws, permits, orders, and any rules and regulations promulgated thereunder of any Governmental Agency (“Governmental Requirements”) governing any such “minor field revisions” or in any approvals by any Governmental Agency otherwise required for any such “minor field revisions.” B. All work that does not meet the definition of a “minor field revision” shall be resubmitted as an amended set of construction documents to the City for its review and approval no less than fifteen (15) business days prior to the date that the Developer intends to implement such changes. The City shall have t welve (12) business days from its receipt of such proposed changes to review the same and advise the Developer in writing whether such changes are acceptable to the City in its reasonable discretion, or such changes will be deemed unacceptable to City; provided, however, any major changes, as determined by City in its reasonable discretion, may be subject to a rehearing for reapproval of the City Council, in its sole and absolute discretion.

C. Nothing contained in this section shall be deemed to constitute a waiver of or change in the City’s zoning, building, and land use regulations (whether contained in ordinances, the City ’s municipal code, conditions of approval, policies, practice or elsewhere) (collectively, the “City Requirements ”) governing “minor fi eld revisions” or other changes.

However, the Parties acknowledge that, based upon the date of completion of the application for the hotel tower and residential tower over the existing foundation it shall be subject to the 2016 building codes. The Parties have also acknowledged that, based upon the date of completion of the application for the residential units outside of the hotel tower and residential tower , the other residential units shall be subject to the 2022 building codes.

D. Any modification of a time or date for performance or satisfaction of a condition as set out in the Schedule of Performance that does not result in a change of more than ninety (90) days may be approved on behalf of the City by the City Manager, in his or her reasonable discretion. A modification of a time or date for performance or satisfaction of a condition of the Schedule of Performance (or a series of such modifications) that results in an aggregate change of more than ninety (90) days shall be subject to the approval of the City Council, in its sole and absolute discretion. If performance of a task or satisfaction of a condition in the Schedule of Performance is prevented or delayed by Unavoidable Delays, the deadline for completion of such task or satisfacti on of such condition shall be extended by the period of such Unavoidable Delays.

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10 3.3.5 City’s Right to Inspect Project and Property . Officers, officials, employees, consultants, contractors, agents, and representatives of the City who are designated by the City Manager (“City Designees”) shall have the right of reasonable access to the Property, without the payment of charges or fees, during normal construction hours during the period of construction of the Project upon providing two business day prior written notice unless there is a health and safety issue. Any and all City Designees who enter the Property s hall identify themselves at the Developer’s construction management office on the Property upon City Designee’s entrance on to the Property and may, at Developer’s election, be accompanied by a representative of the Developer while on the Property. The Developer shall make a representative of the Developer available for this purpose at all times during normal construction hours, upon prior written notice from the City as provided for above. The City shall indemnify and hold the Developer harmless from injury, property damage , or liability arising out of the exercise by the City of the right of access to the Property provided in this section, other than injury, property damage, or liability arising from the negligence or willful misconduct of the Developer or its officers, employees, consultants, contractors, agents, representatives, or other parties engaged on its behalf. The City shall inspect re levant portions of the Property prior to issuing any written statements reflecting adversely on the Developer ’s compliance with the terms and conditions of this Agreement pertaining to development of the Project. If in the City ’s reasonable judgment it is necessary, the City shall have the further right, from time to time, to retain a consultant or consultants to inspect the Project and verify compliance by the Developer with the provisions of this Agreement. The Developer acknowledges and agrees that any such inspections are for the sole purpose of protecting the City ’s rights under this Agreement, are made solely for the City ’s benefit, that the inspections may be superficial and general in nature, and are for the purposes of informing the City of the progress of the Project and the conformity of the Project with the terms and conditions of this Agreement, and that the Developer shall not be entitled to rely on any such inspection(s) as constituting an approval, satisfaction or acceptance of any materials , workmanship, or conformity of the Project with this Agreement or otherwise. The Developer agrees to make its own regular inspections of the work during construction of the Project to determine that the quality of the Project and all other requirements of the work for the Project are being performed in a manner satisfactory to the Developer. The Developer also agrees to promptly notify the City in writing should the Developer ’s inspections show any matters that will prevent the entire Project from being c ompleted by the date for Project Completion set forth therefore in the Schedule of Performance. The Developer will use commercially reasonable efforts to cause all contractors, subcontractors , and materialmen to cooperate with the City to enable such examination.

3.3.6 Developer to Pay All Costs and Expenses . The Parties agree that the City shall not provide any financial assistance to the Developer in connection with the Project except as may be expressly set forth in this Agreement (e.g., the TOT rebate as set forth in Recital C infra.) The Developer shall be solely responsible for paying for any and all (i) costs of design work, construction, inspection, plan check, impact fees, labor, materials, and fees and permit expenses associated with the Project; (ii) fees pertaining to the review and approval of the Project by the City, any other Governmental Agency and utility service providers, including the costs of obtaining entitlements and the preparation of all required construction, planning, and other documents reasonably required by a Governmental Agency pertinent to the development or operation of the Project on the Property, including, but not limited to, specifications, drawings, plans, maps, permit applications, land use applications, zoning applications, environmental review

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11 and disclosure documents and design review documents; and (iii) costs of design, construction, relocation, and securing of permits for sewer or utility improvements and connections that may be required in development of the Project, whether located on or off of the Property. The Developer shall obtain any and all necessary approvals, prior to the commencement of applicable portions of construction, and the Developer shall take reasonable precautions to ensure the safety and stability of surrounding properties during said construction.

Developer shall be responsible for its costs, including the following:

A. All reasonable fees or expenses of engineers, architects, financial consultants, legal, planning, or other consultants or contractors retained by the Developer for any study, analysis, evaluation, report, schedule, estimate, environmental review, planning and/or design activities, drawings, specifications, or other activity or matter relating to the Property or the Project, including the negotiation and drafting of this Agreement, that may be undertaken by the Developer; and
B. All reasonable fees, charges, and costs related to and making all deposits and providing all bonds or other security associated with the submission to and processing by the City of any and all applications and other documents and information to be submitted to the City by the Developer pursuant to this Agreement or otherwise associated with the Project.

The Developer shall obtain all entitlements, permits, and other approvals for use and development of the Project on the Property from each Governmental Agency, within the time period for such action s specifically set forth in the Schedule of Performance , subject to any extensions of time authorized by this Agreement upon the occurrence of an Unavoidable Delay (hereinafter defined).

Notwithstanding the foregoing, provided Developer constructs the Project in compliance with the approved Entitlements and the Schedule of Performance, subject to any Unavoidable Delays and as may be amended as provided herein, Developer shall be entitled to participate in the City’s Hotel Operation Incentive Program pursuant to the Amended and Restated Operation Covenant Agreement No. 6642, dated November 15, 2017.

3.3.7 Prevailing Wages.

A. The Developer acknowledges that th e City has not made any representation, express or implied, to the Developer or any person associated with the Developer regarding whether or not laborers employed relative to the construction of the Project must be paid the prevailing per diem wage rate f or their labor classification, as determined by the State of California, pursuant to Labor Code Sections 1720, et seq. The Developer agrees it shall assume the responsibility and be solely responsible for determining whether or not laborers employed relative to the construction of the Project must be paid the prevailing per diem wage rate for their labor classification. If construction of certain improvements related to the Project are considered a public work for purposes of State law, Developer shall be required to (i) pay and cause its contractor and subcontractors to pay prevailing wages for construction of the improvements as those wages are determined pursuant to Labor Code Section 1720 et seq.; (ii) implement

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12 regulations of the Department of Industr ial Relations; and (iii) comply with the other applicable provision s of Labor Code Section 1720 et seq.

B. The Developer, on behalf of itself, its successors, and assigns, hereby waives and releases the City from any right of action that may be available to it pursuant to Labor Code Sections 1726 and 1781. The Developer acknowledges the protections of Civil Code Section 1542 relative to the waiver and release contained in this Section 3.3.7, which reads as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT

THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR

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

EXECUTING THE RELEASE AND THAT, IF KNOW N BY HIM OR

HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER
SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”

BY INITIALING BELOW, THE DEVELOPER KNOWINGLY AND
VOLUNTARILY WAIVES THE PROVISIONS OF SECTION 1542 SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION. _________________
Developer’s Initials
C. Additionally, the Developer shall indemnify, defend with counsel acceptable to the City, and hold the City harmless against any claims pursuant to Labor Code Sections 1726 and 1781 arising from this Agreement or the construction or operation of all or any portion of the Project.

3.3.8 Certificate of Completion.

A. Following the substantial completion of construction of each Phase of the Project as reflected in Attachment B , and upon written request from the Developer for certification of City that the construction of the Project has been substantially completed in compliance with the terms and conditions of this Agreement (“Certificate of Completion”), the City shall promptly inspect the Phase to determine whether or not the Project has been substantially completed in compliance with this Agreement. If the City determines that the Project is substantially complete and in substantial compliance with this Agreement, the City Manager shall promptly furnish the Developer with a Certificate of Completion for the Phase. If the City determines that the Phase is not in substantial compliance with this Agreement, the City Manager shall send written notice of each substantial non-conformity to the Developer. U pon issuance of the final certificate of occupancy for the development of the Project, based on the plans submitted by the Developer to the City, the City shall, upon written request of Developer, furnish the Developer with a Certificate of Completion for the Project.

B. The City shall not unreasonably withhold the issuance of a Certificate of Completion. A Certificate of Completion shall be evidence of the City’s conclusive determination of satisfactory completion of the Phase to which it pertains pursuant to the terms of this Agreement. Such Certificate of Completion shall be in such form as to permit it to be recorded

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13 in the Office of the County Recorder of Riverside County. After the recordation of a Certificate of Completion for the Phase, any person then owning or thereafter purchasing, leasing, or otherwise acquiring any interest in the Property improved with the Phase shall not (because of such ownership, purchase, lease, or acquisition) incur any obligation or liability under this Agreement regarding construction or installation of the Project except that such person shall be bound by any reservations, covenants, conditions, restrictions, and other interests recorded against the Property pursuant to this Agreement.

C. If the City fails or refuses to issue a Certificate of Completion following written request from the Developer, the City shall, within ten (10) calendar days of the Developer’s written request or within three (3) calendar days after the next regular meeting of the City Council, whichever date occurs later, provide the Developer with a written statement setting forth the reasons for the City’s failure or refusal to issue a Certificate of Completion. The statement shall also contain the City’s opinion of the action(s) the Developer must take to obtain a Certificate of Completion from the City. If the City shall have failed to provide such written statement within said period, the Developer shall issue a second written request to the City to issue a Certificate of Completion. If the City shall have failed to provide such written statement within five (5) calendar days of the Developer’s second written request, the Developer shall be deemed entitled to the Certificate of Completion. If the reason for the Developer’s failure to complete the Phase is confined to the immediate unavailability of specific items or materials for construction or landscaping at a price reasonably acceptable to the Developer or other minor building “punch-list” items, the City may issue its Certificate of Completion upon the posting of a bond or irrevocable standby letter of credit by the Developer in a form reasonably acceptable to the City in an amount representing the mutually agreed upon fair value of the work on the Phase remaining to be completed..

D. A Certificate of Completion shal l not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of a mortgage, or any insurer of a mortgage securing money loaned to finance the Phase or Project, or any parts thereof. A Certificate of Complet ion shall not be deemed to constitute a notice of completion under Sections 8182 or 9204 of the California Civil Code, nor shall it act to terminate the continuing covenants, restrictions, or conditions contained of any instruments recorded against the Property pursuant to this Agreement. A Certificate of Completion is not evidence of the compliance of the Phase or Project with any City Requirements or any building code, conditions of approval, land use, zoning, or other requirements of the City or any Governmental Agency with jurisdiction over the Property, other than the City

3.3.9 Unavoidable Delays. P erformance by any Party under thi s Agreement shall not be deemed or considered to be in default where any such default is due to any delay that is caused by an event that is beyond the reasonable control of the City or the Developer, including, but not limited to, delay caused by strikes, acts of God (including, without limitation, tornadoes, floods, hurricanes, earthquakes) , war, weather, inability to obtain labor or materials, inability to obtain governmental permits or approvals, governmental restrictions, civil commotion, acts or campaigns of terrorism or sabotage, embargoes, interruptions to financial markets or to domestic or internation al transportation to/from the United States for one month or longer, epidemics, pandemics, riots, fire or similar causes, but excluding general economic conditions or changes in the economic assumptions of either Party that may have provided a basis for en tering

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14 into this Agreement and that occur at any time after the execution of this Agreement (“Unavoidable Delays”). Each Party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such Party under this Agreement and such economic conditions or assumptions do not constitute an Unavoidable Delay and do not provide any Party with grounds for asserting the existence of an Unavoidable Delay in the performance of any covenant or undertaking arising under this Agreement.

An extension of time for any Unavoidable Delay shall be for the period of the Unavoidable Delay and shall commenc e from the date of occurrence of the Unavoidable Delay .

The Party asserting the existence of the Unavoidable Delay shall provide the other Part y with written notice of the occu rrence of the Unavoidable Delay within thirty (30) days of the commencement of such asserted Unavoidable Delay , but the extension of time shall commence from the date identified as to the occurrence of the Unavoidable Delay and not the date of the notice. If the notice is not received within the thirty (30) days then the extension of time shall commence on the date of receipt of the written notice.

The Parties agree and acknowledge that there is no existing Unavoidable Delay as of the Effective Date of this Agreement.

Section 3.4. Developer Covenants.

3.4.1 Covenant to Maintain Property on Tax Rolls. The Developer , for itself, its successors, and assigns, as to all or any part or portion of the Property and/or the Project, covenants and agrees that:

A. The entire Property shall remain on the County of Riverside, California (“County”) secured real property tax rolls for the thirty (30) calendar years following the issuance of any certificate of occupancy for the Project.

B. The Developer shall pay all property tax bills with respect to the Property and all improvements thereon on or before the last day for the timely payment of each property tax installment on each December 10 and April 10 during such time period and to timely pay all supplemental tax bills regarding the Property issued by the County until such time as any residential portion of the Property is sold. The Developer further covenants and agrees to provide to the City, on or before July 31 of each year, commencing in the calendar year following the calendar year in which a Certificate of Completion for the Project is recorded and in each calendar year, thereafter, for the full thirty (30) year term of this covenant: (i) a true and correct copy of all property tax assessment notices, property tax bills and property tax assessment correspondence by and between the Developer and the County regarding the Property and all improvements thereon, with respect to the preceding fiscal year of the County, and (ii) cancelled checks issued by the Developer in payment of all property tax payments that are made to the County regarding the Property and all improvements thereon (or other reasonably acceptable evidence of such payment), with respect to the preceding fiscal year of the County. As noted above, upon the sale of any portion of the Property, e.g. , to future condominium owners, the Developer’s obli gation to pay property taxes shall cease. Upon the sale of the Hotel Tower property, this covenant shall remain in full force and effect and be binding on the successor in interest or assignee.

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15 The covenants of this Section shall run with the land of the Property, shall be enforceable against the Developer and its successors and assigns.

3.4.2 Sales Tax and Transient Occupancy Tax.

A. Developer and City anticipate that Developer shall be open for business and generating sales tax collected pursuant to the Bradley -Burns Uniform Local Sales and Use Ta x Law (Revenue and Taxation Code Section 7200, et seq.) (“Sales Tax Law”) and Transient Occupancy Tax (“TOT”) upon the opening for occupancy by revenue paying guests of the Project. As set forth, it is anticipated that there will be between 150-160 TOT generating hotel rooms that are subject to TOT rebates and no less than 28 residential units in the hotel tower which will be short term rental eligible , TOT generating, and subject t o TOT rebates in the Project . If Developer has not commenced generating Sales Tax and TOT 90 days following the completion of all phases of the Project as fully set forth on Attachment B, Developer, its successors or assigns shall pay to the City, in lieu of payment of such taxes, $1000 per day until such time as the hotel is opened for occupancy.

B. The covenants of this Section shall run with the land of the Property and shall be enforceable against the Developer and its successors and assigns.

3.4.3 Maintenance Condition of the Property . The Developer for itself, its successors, and assigns, as to all or any part or portion of the Property and/or the Project, covenants, and agrees that:

A. The areas of the Property that are subject to public view (including all exis ting and future improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean, and orderly condition, ordinary wear and tear excepted. To that end, Developer is committed to do the following, among other things: (1) maintenance of the perimeter fence; (2) maintenance of a decorative fence cover upon completion of the site work; (3) installation of temporary sensor lighting upon completion of the site work and installation of electricit y to the site; (4) installation of CCTV cameras and monitoring on the site , completion of the site work and installation of electricity on the site ; (5) explore the feasibility and constructability of landscaping the area immediately in front of the fence on East Amado Road; and (6) operate a phone line that is available to the public to contact if there are security or other issues associated with the development which will be staffed during normal business hours and any message will be returned within twe nty-four hours . If there is an occurrence of an adverse condition on any area of the Property that is subject to public view in contravention of the general maintenance standard described above (a “Maintenance Deficiency”), then the City shall notify the Developer in writin g of such Maintenance Deficiency. If the Developer fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within thirty (30) days of Developer’s receipt of notice of the Maintenance Deficiency, the City shall have the right to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that may then be available to the City to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the City for the abatement of a Maintenance Deficiency on the Property pursuant to this Section shall become a lien on the Property, as applicable. If the amount of the lien is not paid within thirty (30) days

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16 after written demand for payment from the City to the Developer, the City shall have the right to enforce the lien in the manner provided in Section 3.5.3.

B. Graffiti, as this term is defined in Government Code Section 38772, that has been applied to any exterior surface of a structure or improvement on the Property that is visible from any public right-of-way adjacent or contiguous to the Property, shall be removed by the Developer by either painting over the evidence of such vandalism with a paint that has been color-matched to the surface on which the pa int is applied, or graffiti may be removed with solvents, detergents or water, as appropriate. If any such graffiti is not removed within five (5) business days following the time of the discovery of the graffiti, the City shall have the right to enter the Property and remove the graffiti, without notice to the Developer. Any sum reasonably expended by the City for the removal of graffiti from the Property pursuant to this Section 3.5.3, shall be a lien on the Property. If the amount of the lien is not p aid within thirty (30) days after written demand to the Developer from the City, the City shall have the right to enforce its lien in the manner provided below.

C. The Parties further mutually understand and agree that the rights conferred upon the City under this Section expressly include a grant by the Developer of a security interest in the Property with the power to establish and enforce a lien or other encumbrance against the Property or any portion thereof, in the manner provided under Civil Code Section s 2924, including particularly Sections 2924b and 2924c, to secure the obligations of the Developer and it successors under this Section 3.5.3(A) and (B). above, including the reasonable attorneys’ fees and costs of the City associated with the abatement of a Maintenance Deficiency or removal of graffiti.

For the purposes of the preceding sentence the words “reasonable attorneys’ fees and costs of the City” mean and include the hourly rate charged by the City Attorney to the City, and costs of the City Attorney, and the lawyers employed in the Office of the City Attorney and the costs and expenses for any outside counsel retained by City.

D. The provisions of this Section shall run with the land of the Property and shall be enforceable against the Developer an d its successors and assigns. Nothing in the foregoing provisions of this Section shall be deemed to preclude the Developer from making any alteration, addition, or other change to any structure or improvement or landscaping on the Property, provided that any such changes comply with the Plans and Specifications and any applicable zoning and building regulations of the City.

3.4.4 No Discrimination or Segregation. The Developer covenants by and for itself, its successors, and assigns, as to all or any part or p ortion of the Property and/or the Project, covenants, and agrees that:

A. There shall be no discrimination against or segregation of any person or group of persons, on account of any basis listed in subdivision (a) or (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of th e Property nor shall the Developer, itself, or any Person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, subtenants, sublessees, or vendees in the Property.

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17 B. Notwithstanding the foregoing Subsection A Error! Reference source not found., with respect to familial status, Subsection A above shall not be construed to apply to housing for older persons, as defined in Section 12955.9 of the Government Code and shall not be construed to affect Sections 51.2, 51.3, 51.4, 51.10, 51.11, and 799.5 of the Civil Code, relating to housing for senior citizens. Subdivision (d) of Section 51 and Section 1360 of the Civil Code and subdivisions (n), (o), and (p) of Section 12955 of the Government Code shall apply to Subsection A above.

C. The covenant of this Section shall run with the land of the Property in perpetuity and shall be enforceable against the Developer and its successors and assigns.

3.4.5 Covenant to Maintain Project. The Developer shall cause the Hotel to be operated pursuant to an operating and/or management agreement with an operator qualified to operate a Dream -branded hotel or any other nationally -recognized qualified operator or management company. City approves Hyatt Hotels Corporation which through a wholly -owned subsidiary owns the “Dream” b rand and will manage the Hotel. The Developer covenants to the City that the Project shall continuously be operated as a hotel for the thirty (30) years immediately following the date of issuance of a final certificate of occupancy by the City for the Project. The Developer may submit a written request to the City for approval to change the name, flag, or brand of the Project to another national hotel franchise name, flag, or brand. Any such request to change the name, flag, or brand of the Project shall be accompanied by a detailed statement of the reasons for the proposed change and a hotel franchise agreement executed by both the Developer and the proposed new national hotel franchisor, contingent upon the City ’s approval of the Developer ’s request. The City may approve or disapprove any request from the Developer to change the name, flag, or brand of the Hotel in the City ’s reasonable discretion. However, the City’s approval of a change in the name, flag, or brand of the Hotel shall not be unreasonably delayed, conditioned or withheld if the new name, flag, or brand of the Hotel is that of a nationally-recognized name, flag or brand of a comparable or better quality Hotel. Any approval or disapproval of a change in the name, flag, or brand of the Hotel by the City shall be in writing. The covenant of this Section shall run with the land of the Property and shall be enforceable against the Developer and its successors and assigns.

3.4.6 Developer Covenant to Defend this Agreement . The Developer acknowledges that the City is a “public entity” and/or “public agency” as defined under applicable California law. Therefore, the City must satisfy the requirements of certain California statutes relating to the actions of public entities and public agencies including, without limitation, CEQA.

Also, as a public body, the City ’s action in approving this Agreement may be subject to proceedings to invalidate this Agreement or mandamus. The Developer assumes the risk of delays and damages tha t may result to the Developer from any third -party legal actions related to the City’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the event that an error, omission, or abuse of discretion by the City is determined to have occurred. If a third-party files a legal action regarding the City’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement, the City may terminate this Agreement on thirty (30) days written notice to the Developer of the City’s intent to terminate this Agreement, referencing this Section 3.5.6, without any further obligation to perform the terms of this Agreement and without any liability to the Developer resulting from such termination, unless the Developer unconditionally agrees to indemnify and defend the City, with legal counsel chosen by

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18 Developer and acceptable to the City, against such third -party legal action, as provided below. If the City elects to terminate this Agreement, the Purchase and Sale Agreement between City and CDI Ventures, LLC and all amendments thereto shall remain in full force and effect. Within thirty (30) days of receipt of the City’s notice of intent to termin ate this Agreement, as provided in the preceding sentence, the Developer may offer to defe nd the City, with legal counsel acceptable to the City, in the third -party legal action and pay all of the court costs, attorney fees, monetary awards, sanctions, att orney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action.

Any such offer from the Developer must be in writing and reasonably acceptable t o the City in both form and substance. Nothing contained in this Section shall be deemed or construed to be an express or implied admission that the City is liable to the Developer or any other person or entity for damages alleged from any alleged or established failure of the City to comply with any statute, including, without limitation, CEQA. The covenants of this Section shall run with the land of the Property and shall be enforceable against the Developer and its successors and assigns.

3.4.7 Environmental Indemnity of the City by the Developer . The Developer agrees, at its sole cost and expense, to fully indemnify, protect, hold harmless, and defend (with counsel selected by the Developer and approved by the City , in its reasonable discretion) the City and its official, officers , attorneys, employees, agents, and authorized representatives (collectively, the “Indemnified Parties ”), from and against any and all claims, demands, damages, losses, liabilities, obligations, penalties, fines, actions, causes of a ction, judgments, suits, proceedings, costs, disbursements and expenses, including, without limitation, reasonable attorney fees, disbursements and costs of attorneys, environmental consultants , and other experts, and all foreseeable and unforeseeable damages or costs of any kind or of any nature whatsoever (collectively, “Environmental Claims ”) that may, at any time, be imposed upon, incurred, or suffered by, or claimed, asserted, or awarded against the Indemnified Parties, directly or indirectly relating to or arising from any of the following “Environmental Matters” existing or occurring during or arising from the Developer ’s ownership of the Property or construction or operation of the Project:

A. The presence of Hazardous Materials (hereinafter defined) on, in, under, from, or affecting all or any portion of the Property or the Project.

B. The storage, holding, handling, release, threatened release, discharge, generation, leak, abatement, removal, or transportation of any Hazardous Materials on, in, under, from or affecting the Property or the Project.

C. The violation of any law, rule, regulation, judgment, order, permit, license, agreement, covenant, restriction, requirement , or the like by the Developer, its agents , representatives, contractors, or other parties engaged on its behalf relating to or governing in any way Hazardous Materials on, in, under, from, or affecting the Property or the Project.

D. The failure of the Developer, its agents, representatives, contractors, or other parties engaged on its behalf, to properly complete, obtain, submit and/or file any and all notices, permits, licenses, authorizations, covenants , and the like in connection with the Developer’s activities on the Property or regarding the Project relating to Hazardous Materials.

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19 E. The implementation and enforcement by the Developer, its agents , representatives, contractors, or other parties engaged on its behalf of any monitoring, notification, or other precautionary measures that may, at any time, become necessary to protect against the release, potential release, or discharge of Hazardous Materials on, in, under, from, or affecting the Property or the Project.

F. The failure of the Developer, its agents, representatives, contractors, or other parties engaged on its behalf , in compliance with all applicable Environmental Laws (hereinafter defined) , to lawfully remove, contain, transport , or dispose of any Hazardous Materials existing, stored or generated on, in, under, or from the Property or the Project.

G. Any investigation, inquiry, order, hearing, action , or other proceeding by or before any governmental agency in connection with any Hazardous Materials on, in, under, from, or affecting the Property or the Project or the violation of any Environmental Law relating to the Property or the Project.

H. The Developer shall pay to the Indemnified Parties all costs and expenses including, without limitation, reasonable attorneys ’ fees and costs, incurred by the Indemnified Parties in connection with enforcement of the aforementioned environmental indemnity.

I. “Hazardous Materials” as used in this Agreement shall mean and refer to, without limitation, substances defined as a “hazardous substance,” “hazardous material,” “toxic substance, ” “solid waste, ” or “pollutant o r contaminate ” in the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended, 42 U.S.C.

Sections 9601, et seq.; the Toxic Substances Control Act ( “TSCA”) [15 U.S.C. Sections 2601, et seq.]; the Hazardous Materials Transportation Act, 49 U.S.C. Sections 1801, et seq.; the Resource Conservation and Recovery Act, 42 U.S.C. Sections 6901, et seq.; those substances listed in the United States Department of Transportation (DOT)Table [49 CFR 172.101], or by the EPA, or any successor authority, as a Hazardous Substance [40 CFR Part 302]; and those substances defined as “hazardous waste ” in Section 25117 of the California Health and Safety Code or, as a “Hazardous Substance ” in Section 25316 of the California Health and Safety Code; other substances, materials, and wastes that are, or become, regulated or classified as hazardous or toxic under federal, state, or local laws or regulations and in the regulations adopted pursuant to said laws, and shal l also include manure, asbestos, polychlorinated biphenyl, flammable explosives, radioactive material, petroleum products, and substances designated as a hazardous substance pursuant to 33 U.S.C. Section 1321 or listed pursuant to 33 U.S.C. Section 1317.

J. “Environmental Laws ” as used in this Agreement shall mean all federal, state, local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or requirements of any government authority regulating, relating to, or imposing liability of standards of conduct con cerning any Hazardous Material, or pertaining to occupational health or industrial hygiene (and only to the extent that the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substa nces on, under, or about the Property, occupational or environmental conditions on, under, or about the Property, as now or may at any later time be in effect, including without limitation, the Comprehensive Environmental Response, Compensation and Liabili ty Act of 1980 ( “CERCLA”) [42 USC Section 9601 et seq.]; the - --

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20 Resource Conservation and Recovery Act of 1976 (“RCRA”) [42 USC Section 6901 et seq.]; the Clean Water Act, also known as the Federal Water Pollution Control Act ( “FWPCA”) [33 USC Section 1251 et seq.]; the Toxic Substances Control Act (“TSCA”) [15 USC Section 2601 et seq.]; the Hazardous Materials Transportation Act ( “HMTA”) [49 USC Section 1801 et seq.]; the Insecticide, Fungicide, Rodenticide Act [7 USC Section 6901 et seq.] the Clean Air Act [42 USC Section 7401 et seq.]; the Safe Drinking Water Act [42 USC Section 300f et seq.]; the Solid Waste Disposal Act [42 USC Section 6901 et seq.]; the Surface Mining Control and Reclamation Act [30 USC Section 101 et seq.] the Emergency Planning and Comm unity Right to Know Act [42 USC Section 11001 et seq.]; the Occupational Safety and Health Act [29 USC Section 655 and 657]; the California Underground Storage of Hazardo us Substances Act [California Health & Safety Code Section 25288 et seq.]; the California Hazardous Substances Account Act [California Health & Safety Code Section 25300 et seq.]; the California Safe Drinking Water and Toxic Enforcement Act [California Health & Safety Code Section 24249.5 et seq.] the Porter-Cologne Water Quality Act [California Water Code Section 13000 et seq.] together with any amendments of or regulations promulgated under the statutes cited above and any other federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted th at pertains to occupational health or industrial hygiene, and only to the extent the occupational health or industrial hygiene laws, ordinances, or regulations relate to hazardous substances on, under, or about the Property, or the regulation or protection of the environment, including ambient air, soil, soil vapor, groundwater, surface water, or land use.

Section 3.5. Insurance. In order to protect the City and its council members, officials, officers, employees, attorneys, contractors, agents, and authorized representatives (collectively, “Additional Insureds”) against any and all claims and liability for death, injury, loss , and damage resulting from the Developer ’s actions in connection with this Agreement, the Property, and the Project, the Developer shall secure and maintain the insurance coverage, described in and required by this Section. The City shall not have any obligation under this Agreement until the Developer provides the required policies and/or certificates evidencing the insurance required by this Section to the City and the City approves such evidence of insurance. The Developer shall pay any deductibles and self -insured retentions under all insurance policies issued in satisfaction of the terms of this Agreement. Developer shall retain all insuran ce policies as set forth in this Section until issuance of the Certificate of Completion.

Section 3.6. Workers’ Compensation Insurance Requirement . The Developer shall submit written proof that the Developer is insured against liability for workers ’ compensation in accordance with the provisions of Section 3700 of the Labor Code. By executing this Agreement, the Developer makes the following certification, required by Section 1861 of the Labor Code:
“I am aware of the provisions of Section 3700 of the Labor Code whic h require every employer to be insured against liability for workers ’ compensation or to undertake self -insurance in accordance with the provisions of that code, and I will comply with such provisions before commencing the performance of the work of this contract.” The Developer shall require each contractor and sub -contractor performing work on the Project to provide workers’ compensation coverage for all of such contractor’s or sub-contractor’s employees, unless the contractor ’s or sub-contractor’s employees are covered by workers ’

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21 compensation insurance provided by the Developer. If any class of employees engaged in work or services performed in connection with the Project is not covered by Labor Code Section 3700, the Developer shall provide and/or require each contractor or sub -contractor to provide adequate workers’ compensation insurance covering such employees. Each workers’ compensation policy procured pursuant to this section shall contain a full waiver of subrogation clause in favor of the Additional Insureds.

Section 3.7. Liability and Permanent Insurance Requirements.

A. The Developer shall maintain in full force and effect, until the issuance of the Certificate of Completion the following insurance coverage:

1. Commercial General Liabili ty Insurance coverage,
including, but not limited to, Premises -Operations, Contractual Liability Insurance (specifically covering all indemnity obligations of the Developer pursuant to this Agreement), Products - Completed Operations Hazards, Personal Injury (including bodily injury and death), and Property Damage for liability arising out of the construction of the Project and/or the Developer’s operations concerning the Property or the Project. The commercial general liability insurance coverage shall have minimum limits for Bodily Injury and Property Damage liability of TWO MILLION DOLLARS ($2,000,000) each occurrence and FOUR MILLION DOLLARS ($4,000,000) aggregate.

2. Automobile Liability Insurance against claims of Personal Injury (including bodily injury and death) and Property Damage covering all owned, leased, hired and non -owned vehicles used by the Developer with minimum limits for Bodily Injury and Property Damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such insurance shall be provided by a business or commercial vehicle policy.

3. If the Developer hires a consultant to provide design services, such as architectural or engineering services in connection with the Project, or any portion of the Project, the Developer shall require each such consultant to provide Professional Liability (Errors and Omissions) Insurance, for liability arising out of, or in connection with, the performance of such design services, with limits of not less than ONE MILLION DOLLARS ($1,000,000).

4. Upon acceptance of the Project or any portion thereof, from each contractor, the Developer shall maintain All Risk Property Insurance on the Project on a blanket basis or with an agreed amount clause in amounts not less than 100% of the replacement value of all portions of the Project so accepted. Such coverage shall name the City as a loss payee as their interests may appear.

B. During the construction of the Project, the Developer shall require that each contractor performing work on the Project maintain the following insurance coverage at all times during the performance of said work:

1. The Developer shall maintain Builder ’s Risk (Course of Construction) Insurance to be written on an All Risk Completed Value form, in an aggregat e

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22 amount equal to 100% of the completed insurable value of the Project or portion of the Project on which such contractor is performing work. Such coverage shall name the City as a loss payee as their interests may appear.

2. Each general contractor and each sub-contractor shall maintain Commercial General Liability Insurance with limits of not less than ONE MILLION DOLLARS ($1,000,000) per occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate to protect the Developer during the construction of the Project from claims involving bodily injury and/or death and damage to the property of others.

3. Each general contractor and each sub -contractor shall maintain Automobile Liability Insurance against claims of personal injury (including bodily injury and death) and property damage covering all owned, leased, hired and non -owned vehicles used in the performance of the contractor ’s obligations with minimum limits for bodily injury and property damage of ONE MILLION DOLLARS ($1,000,000) each occurrence and TWO MILLION DOLLARS ($2,000,000) aggregate. Such automobile liability insurance shall be provided by a business or commercial vehicle policy.

C. The required insurance described above shall include endorsements naming the Additional Insureds as additional insured for l iability arising out of this Agreement and any operation related to this Agreement.

D. Any insurance coverage required under this Agreement shall not be written on a “claims made” basis. The applicable certificate of insurance must clearly provide that the coverage is on an “occurrence” basis. The requirements of this Section shall survive any expiration or termination of this Agreement and any Certificate of Completion.

E. Receipt by the City of evidence of insurance that does not comply with the above requirements shall not constitute a waiver of the insurance requirements of t his Agreement.

F. All of the insurance coverage required under this Section shall be maintained by the Developer or its contractors or sub-contractors of any tier , as required by the terms of this Agreement, until the issuance of the Certificate of Completion and shall not be reduced, modified, or canceled without at least thirty (30) days prior written notice to the City.

Also, phrases such as “endeavor to” and “but failure to mail such notice shall impose no obligation or liability of any kind upon the company” shall not be included in the cancellation wording of any certificates of insurance or any coverage for the Additional Insureds. The Developer shall immediately obtain replacement coverage for any insurance policy that is terminated, canceled, non-renewed, or whose policy limits are exhausted or upon insolvency of the insurer that issued the policy.

G. All insurance to be obtained and maintained by the Developer under this section shall be issued by a company or companies listed in the then current “Best’s Key Rating Guide ” publication with a minimum of an “A:VII” rating and be admitted to conduct business in the State of California by the State of California Department of Insurance.

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23 H. The City will not accept self -insurance in satisfaction of the insurance requirements of this Section.

I. All insurance obtained and maintained by the Developer in satisfaction of the requirements of this Agreement shall be primary to and not contributing to any insurance maintained by the Additional Insureds.

J. Insurance coverage in the minimum amounts set forth in this Section shall not be construed to relieve the Developer of any liability, whether within, outside, or in excess of such coverage, and regardless of solvency or insolvency of the insurer that issues the coverage; nor shall it preclude the Additional Insureds from taking such other actions as are available to them under any other provision of this Agreement or otherwise at law.

K. Failure by the Developer to maintain all insurance coverage required by this Section in effect shall constitute a default of this Agreement by the Developer. The City, at its sole option, may exercise any remedy available to it in connection with such default.

Alternatively, the City may, at its sole option, purchase any such required insurance coverage and the City shall be entitled to immediate payment from the Developer for any premiums and associated costs paid by the City for such insurance coverage. Any election by the City to purchase or not to purchase insurance otherwise required to be carried by the Developer shall not relieve the Developer of its obligation to obtain and maintain the insurance coverage required by this Agreement.

Section 3.8. Defaults - General.

3.8.1 Subject to Unavoidable Delays and any other extensions of time provided for in this Agreement and this Section 3.9, failure or delay by either Party to perform any term or provision of this Agreement shall constitute a default under this Agreement. The injured Party shall give written notice of default to the Party in default, specifying the default complained of by the non -defaulting Party. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default.

3.8.2 If a Party otherwise in default commences to cure, correct or remedy such default, within thirty (30) calendar days after receipt of written notice from the injured Party specifying such default, and diligently and continuously prosecute s such cure, correction or remedy to completion (and where any time limits for the completion of such cure, correction or remedy are specifically set forth in this Agreement, then within said time limits), such Party shall not be deemed to be in default under this Agreement.

3.8.3 Any failure or delays by either Party in asserting any of their rights and/or remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies. Delays by either Party in asserting any of their rights and/or remedies shall not deprive either Party of its right to institute and maintain any actions or p roceedings that it may deem necessary to protect, assert or enforce any such rights or remedies.

Section 3.9. Events of Default. In addition to other acts or omissions of the Developer that may legally or equitably constitute a default or breach of this Agreement, the occurrence of any of the following specific events shall constitute an “Event of Default” under this Agreement,

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24 and, if they occur prior to the issuance of a Certificate of Completion for the Project, they shall not be subject to the provisions of Section 3.10:

3.9.1 Any default by the Developer under any construction loan documents for any purpose or reason which is declared in writing by the lender and which materially impacts the Project. So long as the construction continues on the Project, no default or Event of Default will be declared.

3.9.2 Any breach by the Developer of any of the non-monetary covenants and conditions of this Agreement that is not cured within thirty (30) days following written notice of the breach to the Developer from the City or the expiration of an applicable shorter cure period set forth in this Agreement.

3.9.3 Any representation, warranty or disclosure ma de to the City by the Developer regarding this Agreement or the Project is materially false or misleading when made.

3.9.4 The Developer fails to make any payment or deposit of funds required under this Agreement or to pay any other charge set forth in this Agre ement, following ten (10) days’ written notice to the Developer from the City of such failure.

3.9.5 Any material deviation in the work of improvement of the Project from the approved Scope of Development, without the prior written approval of the City, or the appearance of defective workmanship or materials and such defects are not corrected or substantially corrected, within thirty (30) days after receipt of written notice thereof from the City to the Developer.

3.9.6 Subject to the extensions of time or excuses for performance in this Agreement, the construction of the Project is delayed or suspended for a period in excess of that permitted under this Agreement , subject to the occurrence of Unavoidable Delays ; or the development of the Project does not proceed with d ue diligence, pursuant to the Schedule of Performance, subject to the occurrence of an Unavoidable Delay; or the Project is not completed by the Project Completion Date, subject to the occurrence of Unavoidable Delays.

3.9.7 There occurs any event of dissolution, reorganization or termination of the Developer that adversely and materially affects the operation or value of the Property, and such event is not corrected within twenty days following written notice of such event from the City to the Developer.

3.9.8 The Developer sells, Transfers, hypothecates, encumbers or assigns its interest in this Agreement, the Property, or Project, or any portion thereof, whether voluntarily or involuntarily or by operation of law, in violation of the terms and conditions of this Agreement.

3.9.9 The Developer becomes insolvent or a receiver is appointed to conduct the affairs of the Developer under state or federal law;

3.9.10 The Developer’s legal status as a California limited liability company authorized by the Secretary of State of the State of California to transact business in California is suspended or terminated.

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25 Section 3.10. Repurchase Option.

3.10.1 Option to Repurchase Upon Failure to Commence or Complete Construction of the Hotel. In the event the construction of the Project is delayed or suspended for a period in excess of that permitted under this Agreement, subject to the occurrence of Unavoidable Delays; or the development of the Project does not proceed with due diligence, pursuant to the Schedule of Performance, subject to the occurrence of an Unavoidable Delay; or the Project is not completed by the Project Completion Date, subject to the occurrence of Unavoidable Delays. City shall have the option to repurchase the Property from Developer at City’s election by written notice to Developer given within six (6) months after the occurrence of any such event, time being of the essence (“Repurchase Election Notice”). In the event City fails to give the Repurchase Election Notice within such six (6) month period, the City shall not have the Repurchase Option under this Section 3.10 in respect of the event giving rise thereto.

In the event City exercises its Repurchase Option, the purchase price (“Repurchase Price”) payable by City to Developer with respect to the Property shall be an amount equal to the original purchase price paid by Developer to City for the Property; plus any cash (including but not limited to check, wire, ACH or any other form of payment) payments previously paid by the Developer for the development of the Property for the improvements thereon, financed costs associated with design and entitlements, amount financed inclusive of all “hard” and “soft” costs related to the site and the improvements to be constructed thereon, including without limitation, arch itectural, engineering, and legal fees paid to government entities, and cost of all on-site labor and materials for the construction of the improvements existing on the Property at the time of repurchase (but not including any payment under the Services Agreement between the City and Developer for the construction of any parking facilities), or the fair market value of the Property, including any improvements thereon, as determined through an appraisal of the Property as of the date of the Repurchase Notice performed by an appraiser hired by the City and the Developer, whichever is lower.

Closing for repurchase of the Property pursuant to Repurchase Option shall occur on the date specified in Repurchase Election Notice, which shall be no earlier than sixty (60) days and no later than one hundred and eighty (180) days after the date of the City ’s service on Developer of Repurchase Election Notice. Developer and City shall each pay one-half (1/2) of the escrow fees, and Developer shall pay for (i) any documentary tax stamps and (ii) an ALTA standard Owner’s Policy of Title Insurance in the full amount of the Repurchase Price showing fee title vested in the City. The City shall pay the recording fee for any other instruments which are recorded through such escrow.

ARTICLE IV

MISCELLANEOUS
Section 4.1. No Third-Party Beneficiaries; No Assignment . Developer represents and warrants, except as expressly set forth herein, there are no express or implied third -party beneficiaries to this Agreement, and no person or entity not a signatory hereto shall have any rights or causes of action against the City arising from or in connection with this Agreement or the Development Agreement. Developer represents and warrants it has not sold, assigned, or otherwise transferred, or purported to, a nd shall not hereafter, sell, assign, or otherwise transfer any of the

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26 obligations, liabilities, demands, claims, costs, expenses, debts, controversies, damages, rights, actions, or causes of action released pursuant to the Original Development Agreement o r this Agreement. This Agreement shall not be assignable without the prior written consent of City, which may be withheld by City in its sole discretion, and any assignment or other transfer in contravention of this Section shall be voidable at the election of the City or the City may elect, in its sole discretion, to terminate this Agreement or pursue any remedy available to City herein, at law, or in equity.

Section 4.2. Enforcement of Agreement. Except as otherwise expressly set forth in this Agreement, no action shall be brought or maintained until: (a) the non -breaching Party provides written notice to the breaching Party which explains with particularity the nature of the claimed breach and (b) within thirty (30) days after receipt of said notice, the breaching Party fails to cure the claimed breach or, in the case of a claimed breach which cannot be reasonably remedied within a thirty (30) day period, the breaching Party fails to commence to cure the claimed breach within such thirty (30) day period and thereafte r diligently complete the activities reasonably necessary to remedy the claimed breach.

Section 4.3. Damages. In the event any action or proceeding is brought to enforce this Agreement, the prevailing Party shall be entitled to the reasonable fees, out -of-pocket expenses, and costs of attorneys and experts against the non-prevailing Party, in addition to all other relief to which that Party may be entitled.

Section 4.4. Limits. This Agreement shall not be construed as creating any right or benefit, substantive or procedural, enforceable at law or in equity, by any Party against any person, agency or entity other than those set forth herein.

Section 4.5. No Waiver. The failure to insist on any one occasion upon strict compliance with any of the covenants or conditions hereof s hall not be deemed a waiver of such term, covenant, or condition, nor shall any waiver or relinquishment of any rights or powers hereunder at any one time or more times be deemed a waiver or relinquishment of any rights or powers hereunder at any other time or times.

Section 4.6. Notices. Any notice, request, or communication required to be given to either Party under this Agreement shall be given in writing and shall be personally delivered or mailed, by prepaid registered or certified mail, to the addresses below:

Party to be Noticed: Selene Palm Springs, LLC
Attn.: Rabinder Pal Singh
200 West 55th Street
New York, NY 10019_________________________
City of Palm Springs
Attn.: Flynn Fagg
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262

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27 With Copy to: Boren, Osher & Luftman, LLP
Attn.: Stephen Z. Boren
222 N. Pacific Coast Hwy, Ste. 2222
El Segundo, CA 90245

Best Best & Krieger
Attn.: Elizabeth Hull
18101 Von Karman Avenue
Irvine, CA 92612 _________________________
Section 4.7. Entire Agreement. This Agreement, including the true and correct Recitals above, which are incorporated by reference herein as operative covenants and specifically relied upon by the Parties in executing this Agreement, constitutes the entire agre ement and understanding among and between the Parties and supersedes any and all other prior and contemporaneous agreements whether oral or written between the Parties.

Section 4.8. Amendments and Modifications. This Agreement may only be modified or amended by writ ten instrument duly approved and executed by each of the Parties hereto, following all necessary approvals and authorizations for such execution.

Section 4.9. Rights of Lender to Modify Agreement. Developer’s lender or lenders may seek a mo dification of this Agreement in connect ion with a loan or refinance. In connection therewith, in any notice requesting a modification by Developer’s lender or lenders, the Developer shall include a statement to the City identifying any amendments, modifications, or other changes to this Agreement or its attachments which the lender or lenders is requesting in connection with the Developer obtaining or refinancing a loan. The City agrees to reasonably consider and not unreasonably withhold its consent to the requested amendme nt or modification , but shall not be obligated to accept, any amendment, modification, or other change to this Agreement or any of the attachments to this Agreement which materially restricts, diminishes or burdens the City’s rights and remedies.

Section 4.10. Choice of Law. This Agreement shall be deemed to have been executed and delivered within the State of California; the rights and obligations of the Parties hereunder shall be governed, construed, and enforced in accordance with the laws of the State of California.

The venue for any dispute arising from or related to this Agreement, its performance, and its interpretation shall be the Superior Court of California, County of Riverside, California . This Agreement is to be construed fairly and not in favor of or agains t any Party regardless of which Party or Parties drafted or participated in the drafting of its terms. The parties agree to mediate, in good faith, any claim arising hereunder and to refrain from filing a lawsuit relating to the terms and conditions of this Agreement until the parties have met with a mediator. The parties agree to select and mediate any claim or controversy within thirty (30) days of the date the claim or controversy accrues or first arises. The prevailing party pertaining to a dispute concerning this Agreement shall be entitled to reasonable attorneys’ fees and costs. However, any party who fails to comply with the mediation requirements of this section shall not be entitled to recover attorney’s fees.

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28 Section 4.11. Authorized Signatory. Each Party represents and warrants that it has the full right and power to enter into this Agreement and to execute and bind the Party on whose behalf it/he/she is signing to the releases and other provisions contained herein, and further agrees to the extent it is in breach of its warranties to defend and indemnify each other Party in the event any claim is made which is contrary to the representations and warranties contained herein.

Section 4.12. Severability. If one or more provisions of this Agreement are hel d to be unenforceable under applicable law, such provision will be excluded from this Agreement and the balance of the Agreement will be interpreted as if such provision were so excluded and will be enforceable in accordance with its terms.

Section 4.13. Counterparts and Electronic Signatures. This Agreement may be executed in counterparts and, when so executed by the Parties, shall become binding upon them and each such counterpart will be an original document. Electronic signatures shall be as valid and have the same force and effect as original signatures.

[Signatures on following page]

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S-1

IN WITNESS WHEREOF, each Party has executed this Agreement on the date which appears next to the corresponding signature.

I have read the foregoing Settlement and Development Agreement , understand it, and I accept and agree to the provisions it contains and hereby execute it voluntarily wit h full understanding of its consequences and to be bound by its terms.

Date

SELENE PALM SPRINGS, LLC
By: Calsprings Properties, LLC, Managing
Member

By: Rabinder Pal Singh, Manager

Date

CITY OF PALM SPRINGS

__________________, City Manager
Approved as to form:

Date:
__________________, City Attorneyr

[Signature Page to Settlement and Development Agreement]

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A-1

ATTACHMENT A

LEGAL DESCRIPTION

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A-2

ATTACHMENT B

SCHEDULE OF PERFORMANCE
[summarized below and attached]

PHASE 1: North Villas and all associated improvements. Developer shall obtain a building permit for Phase 1 by August 7, 2023 in accordance with Attachment B and shall substantially complete construction of Phase 1 by December 24, 2026.

PHASE 2: Hotel and Residential Towers and all associated improvements. Developer shall obtain a building permit for Phase 2 by September 9, 2024 in accordance with Attachment B and shall substantially complete construction of Phase 3 by December 25, 2026.

PHASE 3: South Villas and all associated improvements. Developer shall obtain a building permit for Phase 3 by October 30, 2023 in accordance with Attachment B and shall substantially complete construction of Phase 3 by December 25, 2026.

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A-3

ATTACHMENT C

SCOPE OF DEVELOPMENT/ENTITLEMENT PACKAGE
[attached]

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A-4

Scope of Development
The Revised Project (“Project”) includes the following and is described in greater detail in the Dream Hotel and Condominium Application as approved by the City Council on May 11, 2023:
• Between 150-160 Transit Occupancy Tax (“TOT”) generating hotel rooms. • No less than 28 residential units in the hotel tower which will be short term rental eligible. These units shall also be subject to the same TOT benefit as the hotel rooms set forth above.
• No less than 12 luxury residential units in the North Villas which will not be short term rental eligible.
• No less than 24 residential units in the South Villas which will not be short term rental eligible.

Once constructed, the site will operate as a 4 star or better hotel and shall include the following amenities at a minimum:
• Staffed front desk with multiple guest service capability and uniformed staff • Concierge services
• Valet service
• Bell services (luggage service)
• Full-service restaurant that serves breakfast/lunch/dinner with bar/lounge (separate or adjoining restaurant)
• Room service available for breakfast/lunch/dinner
• Gift shop or sundries available for purchase
• Swimming pool and separate whirlpool/hot tub
• Food and beverage service available poolside
• Desk or similar worktable in each guest room with enhanced desk chair • Multiple electrical outlets and USB ports near desk/worktable • Superior internet speed and capacity available throughout the property (multiple routers with consistent signal strength).
• Safe in each guest room.

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A-5

• Laundry/dry cleaning service available to guests

C – Page 845 of 925

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C – Page 846 of 925

55575.10036\44644106.3

FIRST AMENDMENT TO THE

SETTLEMENT AND DEVELOPMENT AGREEMENT
by and between

THE CITY OF PALM SPRINGS
and

SELENE PALM SPRINGS, LLC
Dated _____________, 2026

C – Page 847 of 925

55575.10036\44644106.3
1 FIRST AMENDMENT TO THE

SETTLEMENT AND DEVELOPMENT AGREEMENT
This First Amendment to the Settlement and Development Agreement (“Agreement”), dated as of ____2026, is entered into by and between the City of Palm Springs (“City”) and Selene Palm Springs, LLC, a California limited liability company (“Developer”). City and Developer may be referred to herein individually as a “Party” or collectively as the “Parties.”

RECITALS
A. Developer acquired that certain approximately 7.8 acre parcel located at the northeast corner of Calle Alvarado and East Amado Road (“Property”), more fully described in Attachment A, from the City under that certain Grant Deed recorded as Document No. 2016- 0367646 (“Grant Deed”) pursuant to the previously entered Purchase and Sale Agreement (A6329), as amended by eleven amendments dated between March of 2014 and April of 2020 (“PSA”); the related Services Agreement, as amended by three amendments dated between March of 2014 and December of 2018 (“SA”); and the Amended and Restated Operations Covenant Agreement No. 6642, recorded as Document No. 2017-0544662 (“Covenants”, together with the PSA and SA, the “Original Development Agreement”) between the City and Developer for the purpose of developing and maintaining a hotel project (“Original Project”) located on the Property.

B.

In 2022, Developer submitted a revised project to the City for entitlement. The Revised Project (“Project”) included the following and is described in greater detail in Scope of Development, Attachment C attached to the Original Settlement Agreement, as defined below, and the Dream Hotel and Condominium Application as approved by the City Council on May 11, 2023:

Between 150-160 Transit Occupancy Tax (“TOT”)
generating hotel rooms.

No less than 28 residential units in the hotel tower which will be short term rental eligible.

These units shall also be subject to the same TOT benefit as the hotel rooms set forth above.

No less than 12 luxury residential units in the North Villas which will not be short term rental eligible.

No less than 24 residential units in the South Villas which will not be short term rental eligible.

C. On May 1, 2023 Parties entered into the Settlement and Development Agreement (“Original Settlement Agreement”) to settle all previous disputes between the Parties and provide a path forward for the development of the Project.

D. Developer has now proposed a revised project (“Revised Project”) of the site which is described in detail in Exhibit “B” and generally includes:

Between 150 – 160 Transit Occupancy Tax (“TOT”) generating hotel rooms.

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55575.10036\44644106.3
2 No less than 40 residential units in the hotel tower which will be short term rental eligible. These units shall also be subject to the same TOT benefit as the hotel rooms set forth above.

No less than 12 luxury residential units in the North Villas which will not be short term rental eligible.

No less than 24 residential units in the South Villas which will not be short term rental eligible.

E. Developer has also requested modifications to certain obligations and timing in the Original Settlement Agreement including the Schedule of Performance. The revised Schedule of Performance is attached hereto as Exhibit “C”.

F. In exchange for agreeing to these Project modifications the City requires additional assurances regarding the financing of the Revised Project and other minor modifications to the Original Settlement Agreement.

G. The Parties desire to enter into this First Amendment to the Settlement and Development Agreement to reflect these changes to the Schedule of Performance and obligations of the Parties.

TERMS
NOW THEREFORE, in consideration of the mutual covenants, agreements, representations, and warranties contained in this First Amendment, and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows:

Section 1. Recitals. The foregoing Recitals are incorporated into and are hereby made a part of this Agreement.

Section 2. Article III, Project Financing, of the Original Settlement Agreement is modified as follows:

Section 3.1 is deleted in its entirety and replaced with:

3.1 Developer shall submit evidence of a finalized financing partnership within 60 days of the Effective Date of this First Amendment. It is acknowledged that Developer has provided confirmation of an engagement with its Financing Advisor who has been engaged to source financing for Project. Developer shall provide written updates to the City every 90 days which shall include, but are limited to 1) status of financing and 2) updated schedule of financing closing; and 3) all relevant information necessary to demonstrate that the financing for the Project is on track to ensure each aspect of the Project will have sufficient funds to satisfy the development Schedule of Performance. Developer shall notify City of the loss of financing or delay in financing that will result in the Schedule of Performance not being attained. Loss of financing or delay in financing that will result in the Schedule of Performance not being attained shall be a Default under this Agreement.

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55575.10036\44644106.3
3 Section 3.3.1, Entitlements, is modified as follows:

3.3.1. Developer presented to City staff and the City Council for review and entitlement the Project (collectively, the “Plans and Specifications”) , approved May 11, 2023. Subsequently, Developer submitted the Revised Project and staff approved that on January 14, 2026. Any further amendments of the Plans and Specifications shall require approval of City Council or relevant City decision-making body. The administrative minor amendment approved by staff in January 2026 was consistent with the previously approved Mitigated Negative Declaration and no additional review under the California Environmental Quality Act, Public Resources Code Sections 21000, et seq. was required. The Developer obtains no right to develop the Project on the Property or any portion of the Property by virtue of this Agreement alone. If any revisions of the Scope of Development are required by a Governmental Agency (other than the City) having jurisdic tion over the Property or the Project, the Developer shall promptly make any such r evisions that are generally consistent with the Scope of Development. Developer will construct the Project in one Phase as described in detail in the Scope of Development.

Section 3.4.3, A, Maintenance Condition of the Property is hereby revised to read::

The Developer for itself, its successors, and assigns, as to all or any part or portion of the Property and/or the Project, covenants, and agrees that:

A. The areas of the Property that are subject to public view (including all existing and future improvements, paving, walkways, landscaping, exterior signage and ornamentation) shall be maintained in good repair and a neat, clean, and orderly condition, ordin ary wear and tear excepted. To that end, Developer is committed to do the following, among other things:
(1) maintenance of the perimeter fence; (2) maintenance of a decorative fence cover throughout the term of preconstruction. Thereafter the maintenance of the fence will be maintained as appropriate for an active construction site consistent with City requirements . ; (3) installation of temporary sensor lighting upon completion of the site work and installation of electricity to the site; (4) installation of CCTV cameras and monitoring on the site, completion of the site work and installation of electricity on the site; (5) explore the feasibility and constructability of landscaping the area immediately in front of the fence on East Amado Road; and (6) operate and maintain a website with informative updates regarding the status of the project including email contact for submitting questions or concerns if there are security or other issues associated with the development which will be staffed during normal business hours. If there is an occurrence of an adverse condition on any area of the exterior of the Property including the fence that is subject to public view in contravention of the general maintenance standard described above, such as graffiti removal, fence covering maintenance, landscape clean -up, and repair of fencing materials (a “Maintenance Deficiency”), then the City shall notify the Developer in writing of such Maintenance Deficiency. If the Developer fails to cure or commence and diligently pursue to cure the Maintenance Deficiency within twenty three (23) days of Developer’s receipt of notice of the Maintenance

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55575.10036\44644106.3
4 Deficiency, the City shall provide seven (7) day notice of their intent to enter the Property and perform all acts necessary to cure the Maintenance Deficiency, or to take any other action at law or in equity that may then be available to the City to accomplish the abatement of the Maintenance Deficiency. Any sum expended by the City for the abatement of a Maintenance Deficiency on the Property pursuant to this Section shall become a lien on the Property, as applicable. If the amount of the lien is not paid within thirty (30) days after written demand for payment from the City to the Developer, the City shall have the right to enforce the lien in the manner provided in Section 3.5.3.

Section 3. Effective Date: This First Amendment is dated as first written above for reference purposes only. This First Amendment shall not become effective until the date on which all of the following are true (“Effective Date”): (i) this First Amendment is approved and executed by the appropriate authorities of Developer and delivered to City; (ii) Developer has delivered to City a certified copy of the official action taken by all of the managers or members of the Developer approving this First Amendment, in a form satisfactory to City; (iii) following all legally required notices and hearings, this First Amendment is approved by the City Council; and (iv) this First Amendment is executed by the authorized representatives of City.

Section 4. All other provisions of the Original Settlement Agreement shall remain in full force and effect.
[Signatures on following page]

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55575.10036\44644106.3
S-1

IN WITNESS WHEREOF, each Party has executed this First Amendment to the Settlement and Development Agreement on the date which appears next to the corresponding signature.

I have read the foregoing First Amendment to the Settlement and Development Agreement, understand it, and I accept and agree to the provisions it contains and hereby execute it voluntarily with full understanding of its consequences and to be bound by its terms.

Date

SELENE PALM SPRINGS, LLC
By: Calsprings Properties, LLC, Managing
Member
By: Rabinder Pal Singh, Manager
Date

CITY OF PALM SPRINGS
__________________, City Manager
Approved as to form:

Date:
__________________, City Attorney
[Signature Page to Settlement and Development Agreement] 3/2/26

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55575.10036\44644106.3
A-1

ATTACHMENT A

LEGAL DESCRIPTION

C – Page 853 of 925

55575.10036\44644106.3
A-2

ATTACHMENT B

REVISED SCOPE OF DEVELOPMENT
The Revised Project (“Project”) includes the following and is described in greater detail in the Dream Hotel and Condominium Application as approved by the City Council on May 11, 2023 and amended by the Director of Planning Services on January 14, 2026:

Between 150-160 Transit Occupancy Tax (“TOT”) generating hotel rooms.

No less than 40 residential units in the hotel tower which will be short term rental eligible. These units shall also be subject to the same TOT benefit as the hotel rooms set forth above.

No less than 12 luxury residential units in the North Villas which will not be short term rental eligible.

No less than 24 residential units in the South Villas which will not be short term rental eligible.

Once constructed, the site will operate as a 4 star or better hotel and shall include the following amenities at a minimum:

Staffed front desk with multiple guest service capability Concierge services
Valet service
Bell services (luggage service)
Provide for breakfast/lunch/dinner service as between 3-4 restaurants. Provide for a bar/lounge (separate or adjoining restaurant)
Room service
Gift shop or sundries available for purchase
Swimming pool and separate whirlpool/hot tub
Food and beverage service available poolside
Desk or similar worktable in each guest room
Multiple electrical outlets and USB ports as appropriate to room design Superior internet speed and capacity available throughout the property (multiple routers with consistent signal strength).

C – Page 854 of 925

55575.10036\44644106.3
A-3

Safe in each guest room.

Laundry/dry cleaning service available to guests

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55575.10036\44644106.3

A-4
ATTACHMENT C SCHEDULE OF PERFORMANCE [summarized below and attached] Action Date Action to be Completed By Site monitoring1 Daily until start of construction Complete Value Engineering COMPLETE First Community Meeting & Webpage23 COMPLETE Financing Partnership Notification to City COMPLETE Site clean up4 ONGOING Tree Removal COMPLETE Fence improvements Daily until start of construction Construction Drawings Submitted to City at 80% March 31, 2026 Site Investigative Work Begins March 30, 2026 Complete Model Room April 30, 20265 Site Remediation Start April 30, 2026 1 Ongoing site oversight and monitoring; fence repairs and site landscape maintenance to occur perpetually and with seven days of notification or awareness. 2 Developer shall host neighborhood in-person meeting starting November 13 and thereafter once every month until start of construction at the Developer’s sole expense. 3 Developer shall create project webpage that links to a project webpage that provides periodic updates and includes community notification of the next community meeting as well as an email for use in future communications including a project newsletter. 4 Developer commits to continued ongoing cooperation with the City in adding community mitigation efforts as mutually agreed upon prior to construction 5 The Model Room will be offsite in a warehouse.

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55575.10036\44644106.3

A-5
GMP Guaranteed Maximum Price July 30, 2026 Financing Complete September 30, 2026 Construction Start October 1, 2026 Construction Complete December 30, 2028 Opening December 31, 2028

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CITY COUNCIL STAFF REPORT
DATE: March 11, 2026 BUSINESS & LEGISLATIVE
SUBJECT: ORCHID TREE HOTEL PROJECT COVENANT AGREEMENT

MILESTONE UPDATE
FROM: Scott C. Stiles, City Manager
BY: Economic Development & Planning Services
SUMMARY:

The Weintraub Group, applicant for the Orchid Tree Hotel project located at 284 Baristo Rd, has submitted the required materials to meet the extended milestone of its Covenant Agreement, which was approved by Council on April 23, 2025 (Attachment A).

RECOMMENDATION:

Receive and file.

BUSINESS DISCLOSURE:

The property is owned by NEW CHURCH II, LLC, a Nevada limited liability company, ARENAS BELARDO PS, LLC, a Nevada limited liability company, and CAHUILLA CHURCH, LLC, a Nevada limited liability company. (See Attachment A).

BACKGROUND:

Several years have transpired in the development of this project. The City’s first action was taken in November of 2015. This staff report is a status report regarding the Covenant Agreement by and between the City of Palm Springs and New Church II, LLC (etc.). The Covenant Agreement set forth a series of milestones that the Developer was required to accomplish.

STAFF ANALYSIS:

Following what the City believed was an insufficient submittal by Developer, the original planning application milestone date of August 23, 2025 was extended to February 14, 2026. As of the date of this report, the City’s Planning Services Department confirms that

D – Page 880 of 925

City Council Staff Report
March 11, 2026 -- Page 2
Orchid Tree Hotel Project Covenant Agreement Milestone Update the Developer has generally provided the required materials to substantially comply with the milestone. Under normal Planning Services procedures, the City has until March 14, 2026 to issue a letter to the Developer.

The next milestone occurs eight months from the date of the application submittal which requires the Developer to have secured the required entitlements by October 11, 2026.

All other dates shift accordingly and will be memorialized between the parties.

This report makes no assertion as to the quality or nature of the planning application other than to report the required documentation has been submitted to meet the extended milestone. The City’s Planning Services Department may well seek additional information or reports, and only after further processing of the application can it be determined whether and to what extent the application complies with the City’s Planning and Zoning requirements.

ENVIRONMENTAL ASSESSMENT:

The City finds that no further environmental review is required in connection with this status report.

ALIGNMENT WITH STRATEGIC PLANNING:

Economic Development – Support a vibrant economy, including tourism, and new and existing businesses.

FISCAL IMPACT:

The Fiscal Impact section remains unchanged from the previous staff report (Attachment A) other than the date of opening will occur slightly later than originally stated thereby potentially delaying the receipt of TOT and other taxes.

REVIEWED BY:

Department Director: Wayne Olson
City Attorney: Jeff Ballinger
City Manager: Scott Stiles

ATTACHMENTS:

A. Staff report of April 23, 2025 with Business Disclosure and Covenant Agreement

D – Page 881 of 925

ATTACHMENT A
April 23, 2025 Staff Report

D – Page 882 of 925

CITY COUNCIL STAFF REPORT

DATE: APRIL 23, 2025 PUBLIC HEARING

SUBJECT: CONDUCT A PUBLIC HEARING UNDER SECTION 53083 OF THE CALIFORNIA GOVERNMENT CODE AND UNDER CHAPTER 5.26 OF
THE CITY’S HOTEL OPERATIONS INCENTIVE PROGRAM, APPROVE A

HOTEL OPERATIONS COVENANT BETWEEN THE CITY OF PALM

SPRINGS AND NEW CHURCH II, LLC, A NEVADA LIMITED LIABILITY

COMPANY, AND ARENAS BELARDO PS, LLC, A NEVADA LIMITED

LIABILITY COMPANY, AND CAHUILLA CHURCH, LLC, A NEVADA

LIMITED LIABILITY COMPANY, COLLECTIVELY THE OWNER

FROM: Scott C. Stiles, City Manager

BY: Wayne Olson, Office of Economic Development Department

SUMMARY:

This action seeks to satisfy the conditions of a public hearing and seeks approval of the economic development subsidy in the form of a TOT Operations Covenant Agreement (“Agreement”) in the form of Attachment A . The Agreement is with the Owner , Mr.

Richard Weintraub (and as described above) who is the General Manager for each of the LLCs. The Agreement is for the proposed new construction of a hospitality project (“The Orchid Tree Hotel ” or “Project”) which includes the rehabilitation of several historic buildings all located near downtown Palm Springs on property commonly known as 2845 Cahuilla Road (and described in the Agreement).

RECOMMENDATION:

1. Open the public hearing and receive public testimony; and,

2. Approve a Hotel Operations Covenant Agreement with The Orchid Tree Hotel and Owner; and,

3. Authorize the City Manager and City Attorney to make non-substantive changes and execute all necessary documents related to the subsidy.

BUSINESS PRINCIPAL DISCLOSURE:

The property is owned by NEW CHURCH II, LLC, a Nevada limited liability company, ARENAS BELARDO PS, LLC, a Nevada limited liability company, and CAHUILLA CHURCH, LLC, a Nevada limited liability company. A business disclosure letter from the Item 2B - Page 1

D – Page 883 of 925

City Council Staff Report
April 23, 2025 -- Page 2
The Orchid Tree Hotel - Operations Covenant

Owner’s attorney accompanies this report in the form of Attachment B.

BACKGROUND:

Several years have transpired in the development of this project. The City’s first action was taken in November of 2015. Recitals in the attached Agreement document the years between then and the most recent actions between the City and the Developer.

This staff report is a result of actions tak en on October 24, 2022, when the Owner provided the City with a feasibility report, prepared by CBRE, which concluded that market conditions at the time precluded Owner from obtaining project financing, despite the Owner’s best effort, and as such, Owner sought an additional one (1) year extension to the various project development milestones.

Thereafter, on July 13, 2023, the City and Owner entered into that certain Amendment No. 2 to the Amended and Restated Operations Covenant Agreement No. 8449. As a result of that agreement, the Developer supplied a planning application for the Project as it was modeled in the agreement at that time in October of 2023. The application was deemed insufficient and notice was sent to the Developer in November of 2023.

The City then met with the Developer in February of 2024 to discuss alterations to the application, and it was at that time the City notified the Developer of its intent to place the Developer in default of that agreement and cancelled Agreement No. 8449. However, the City then entered into a tolling agreement with the Owner which is a legal document which allows for a period of time to negotiate a resolution or gather further information.

The City and Owner spent the next several months negotiating the terms of The Agreement being reviewed in this report and attached herein.

STAFF ANALYSIS:

Owner has recently proposed further revisions to the project, including the construction of a three story, approximately 72- room luxury hotel; restoration of eight (8) existing historic single-story bungalows into eight (8) new guest rooms; restoration of an existing historic two -story church into hotel services and restaurant; sixteen (16) residential condominium (for-sale) units; gym and spa facilities; event space, administration support and back of house building, one (1) new pool and exterior café/bar, with new landscaping throughout the Site (the “Project”), which would necessitate review and approval of revised land use entitlements, which the City is willing to consider in good faith.

The Agreement is predicated on the Developer’s delivery of a “Luxury Hotel” as recognized by the CBRE Hospitality Division as of the Effective Date of the Agreement, or hotels considered “luxury boutique”, such as the following: Auberge Resorts, 1 Hotel, Leading Hotels of the World, or Relais & Chateaux, or similarly sized hotels operated as such that are available as of the Effective Date of the Agreement. In the event that, at any Item 2B - Page 2

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time during the Term of the Agreement, the Developer cannot deliver any of the above brand conditions, the City and Developer will meet and confer on more hotel brands that are the equivalent of those brands.

The Developer is required to submit a new planning application by August 15 , 202 5 wherein updated site plans, floor plans, exterior elevations, pool and patio design, landscaping design, signage design as payment of applicable fees and other items as required by the rules and regulations of the City’s code. Several other milestones are included as an exhibit to the attached Agreement. It should be noted that the Developer will be required to post a bond equal to the total construction costs of the project prior to issuance of a building permit. The reason for this is, if for any reason the Developer cannot complete the Project after the start of Construction, the beneficiary of the surety (the City) could step in to complete the Project.

Since this is a new construction project, before and after photos are not required, however, the Developer has provided conceptual drawings of the Project provided and are included in Attachment C.

Per State Law and City Ordinance, the following information is provided regarding the Orchid Tree Hotel Palm Springs:

1. The name and address of all corporations or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy, if applicable.

The Agent for service of process to Operator is Paracorp Incorporated. Operator is a single purpose entity domiciled in the State of California doing business from PO Box 6528, Malibu, CA 90264. The beneficiary of the subsidy will be New Church II, LLC, a Nevada limited liability company, Arenas Belardo PS, LLC , a Nevada limited liability company, and Ca huilla Church, LLC , a Nevada limited liability company,

2. The start and end dates, and schedule, if applicable, for the economic development subsidy.

If approved, first TOT reimbursements are anticipated by 2028, and continue for thirty (30) years until 2058, or until the totality of payments totaling fifty million dollars ($50,000,000.00) have been completed, whichever occurs first.

3. A description of the economic development subsidy, including the estimated total amount of the expenditure of public funds by, or of revenue lost to, the local agency as a result of the economic development subsidy.

A. Per the Program, the existing hotel project planned by Operator is rebated 75% of Adjusted TOT for thirty (30) years or until the rebate totals fifty million dollars Item 2B - Page 3

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($50,000,000), whichever comes first. The renovation project must commence no more than twenty -four months after the City’s execution of the Operation Covenant Agreement and be completed no later than December 31, 2027.

B. The public funds to be spent if the City approves this Covenant will be the staff costs of administration, and statutorily mandated reporting through the term of the Program rebate/subsidy

4. A statement of the public purposes for the economic development subsidy.

A. The City Council established the incentive program for the operation and maintenance of quality and first-class hotel facilities which enhance the tourist and travel experience for visitors to the City of Palm Springs, maximize the use of the City’s convention center, provide attractive and desirable visitor serving facilities and experiences, and assist the City in achieving its tourism goals. In the implementation of this program, the City Council determined: (1) The general welfare and material wellbeing of the residents of the City of Palm Springs depend in large measure upon the growth and expansion of the tourism and travel industries in the City; (2) The operation, maintenance, and expansion of the inventory of quality hotels and first class hotels in the City of Palm Springs will create desirable visitor serving facilities that will contribute to the growth and expansion of tourism and travel opportunities in the City, ensure utilization of the City’s convention center, provide employment opportunities for the residents of the City, and promote and enhance the economy of the City; (3) It is in the best interest of the City of Palm Springs to induce and encourage the operation and maintenance of hotel facilities that would not otherwise exist, thereby creating new sources of tax revenues for the City’s general fund which supports the public services that the City provides its residents; and (4) The authority granted and the purposes to be accomplished are properly local governmental and public purposes for which public funds can be expended and that the operation, maintenance, and expansion of the inventory of quality and first class hotels is of paramount importance to the City of Palm Springs, its residents, and businesses. (Ord. 1730 § 2, 2008)
B. No less than five thousand dollars ($5,000) per room, or if the project includes any common area or amenity, or any other area for guest use at the hotel, the amount of the investment shall not be less than the amount, if any, invested in rooms, added to the total number of rooms at the hotel that will exist at the end of the project multiplied by five thousand dollars ($5,000).

C. The Project would help beautify the neighborhood through and implement energy saving and sustainable components as well as stabilize and re- use a Class 1 historic site.

5. Projected tax revenue to the local agency as a result of the economic development subsidy.

Item 2B - Page 4

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Per the Program, the City will receive 25% of Adjusted TOT for thirty (30) years or until the rebate to the Operator totals fifty million dollars ($50,000,000) whichever comes first. After thirty (30) years the City will receive 100% of the TOT revenue (Adjusted TOT plus Unadjusted TOT). In addition, the City will receive approximately $326,000 of its portion of sales tax over the same time period.

6. Estimated number of jobs created by the economic development subsidy, broken down by full-time, part-time, and temporary positions.

The Operator anticipates increasing employment by 60 full -time positions and 10 part-time positions, for a total of 96 FTEs. The estimated annual payroll for employees and contracted maintenance services is estimated to be one million five hundred thousand ($1,500,000.).

ENVIRONMENTAL ASSESSMENT:

The City finds that no further environmental review is required in connection with the approval of the Agreement in that in connection with the City’s approval of entitlements related to the Project on September 1, 2022, the City Council found that the Project is exempt from further review under the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) and State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) as the Project meets criteria under CEQA Guidelines Section 15331 (Historic Resource Restoration/Rehabilitation), Section 15302 (Replacement or Reconstruction), and Section 15332 (Infill Development). These exemptions will apply to the Project, and apply to those projects that are consistent with the applicable general plan and zoning designations, occur within City limits on a project site of no more than five acres, occur on a site with no value as habitat, can be adequately served by utilities and public services, and where project approval would not result in any sig nificant effects relating to traffic, noise, air quality, or water quality. (State CEQA Guidelines, § 15352.) Further, given that there is no change of use proposed here, this Agreement is merely a funding Agreement, which does not have any attendant envi ronmental impacts. This action is also exempt pursuant to State CEQA Guidelines, section 15061(b)(3), which exempts actions for which it can be seen with certainty that there is no possibility of a significant environmental impact.

ALIGNMENT WITH STRATEGIC PLANNING:

Economic Development – Support a vibrant economy, including tourism, and new and existing businesses.

FISCAL IMPACT:

An amount equal to 75 % of transient occupancy tax increment derived from the Orchid Tree Hotel over the annual base amount (in this case equal to 0.00) , will be paid to the Operator for a t hirty-year period. The maximum pay -out to the recipient cannot exceed Item 2B - Page 5

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fifty million dollars $ 50,000,000 over the 30- year period. The a pproximated sales tax revenue is projected to be $326,000 over the same time period.

REVIEWED BY:

Department Director: Wayne Olson
City Attorney: Elizabeth Hull
City Manager: Scott Stiles

ATTACHMENTS:

A. Hotel Operations Covenant Agreement – The Orchid Tree Hotel B. Public Integrity Disclosure Letter
C. Illustrative drawings

Item 2B - Page 6

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ATTACHMENT A

Item 2B - Page 7

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OPERATIONS COVENANT

FOR HOTEL INCENTIVE PROGRAM

AMENDED & RESTATED COVENANT
NO. ____
PAGE 1 OF 22

FREE RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

THE CITY OF PALM SPRINGS
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attention: City Clerk

(Space Above This Line for Recorder’s Office Use Only)

SECOND AMENDED AND RESTATED OPERATIONS COVENANT
AGREEMENT NO. ____

THIS SECOND AMENDED AND RESTATED OPERATIONS COVENANT
AGREEMENT (“ Agreement”) is made and entered into this ___ day of ________________________, 2025, by and between on the one hand, NEW CHURCH II, LLC, a Nevada limited liability company , ARENAS BELARDO PS, LLC, a Nevada limited liability company , and CAHUILLA CHURCH, LLC, a Nevada limited liability company, (collectively, “Owner”); and, on the other hand, the CITY OF PALM SPRINGS, a California municipal corporation and charter city (“City”).

RECITALS:

A. The City of Palm Springs adopted Chapter 5.26 of its Municipal Code to provide a Hotel Operations Incentive Program (“Program”) for the operation, maintenance and expansion of the inventory of quality and first class hotels within the City that enhance the tourist and travel experience for visitors to the City, maximize the use of the City’s Convention Center, provide attractive and desirable visitor serving facilities and experiences, and assist the City in achieving its tourism goals. Chapter 5.26 of the Municipal Code is incorporated herein by reference and defined terms therein shall, unless otherwise indicated in this Agreement, have the same meanings herein.

B. Owner holds fee title to certain real property (the “Site”), which is depicted on the Site Plan attached hereto as Exhibit “A”, and legally described on the Legal Description attached hereto as Exhibit “B” . Owner has requested that the City enter into this Agreement in accordance with the Program to facilitate development of a new hotel located on the Site, pursuant to the covenants and restrictions identified in this Agreement.

C. On November 18, 2015, the City of Palm Springs Planning Commission adopted Resolution No. 6539, approving Major Architectural Application Case No. 3.0678 to renovate, modify and reconstruct existing buildings and construct a new three- story building with 52 hotel rooms on the Site. Accordingly, pursuant to this action, Owner Item 2B - Page 8

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satisfied the extended Program deadline for entitlement of a new hotel project on the Site by December 31, 2015.

D. On November 9, 2016, the Planning Commission adopted Resolution No. 6595, approving an Amendment to Conditional Use Permit Case No. 5.1345 CUP, Major Architectural Application Case No. 3.0678, HSPB 23 and HSPB 72 for the adaptive re-use of existing historic structures, and construction of new hotel buildings with not more than 64 hotel rooms, and accessory commercial uses including a spa, meeting space, and bar/lounge area on the Site.

E. On July 26, 2017, the City Council approved extending the Program deadline of December 31, 2017, by which Owner must commence construction of the City - approved project, to May 31, 2019, on the condition that Owner shall construct, operate and maintain that project as an Auberge Resorts Collection brand hotel.

F. On November 9, 2018, the Planning Commission adopted Resolution No. 6716, approving a one (1) year extension of time for the project subject to certain conditions.

On December 5, 2018, the City Council reviewed the November 8, 2018, decision of the Planning Commission, and adopted Resolution No. 24522 approving a one year extension of time for the project subject to certain conditions.

G. In early 2019, Owner advised City it would be unable to construct the Auberge Hotel project given the Auberge Resort Hotels’ amenity, service, and parking standards without financial incentives in excess of those provided by the Program. Accordingly, Owner requested relief from the requirement that the Auberge Hotel Project be a part of the Auberge Resorts Collection, and in the alternative, be considered a “Luxury Hotel”.

H. On April 17, 2019, the City Council held a noticed public hearing pursuant to California Government Code section 53083, and approved a Hotel Operating Covenant with Owner for the project (the “Original Covenant”). Pursuant to the Original Covenant, the City Council extended the Program deadline of May 31, 2019, by which Owner must commence construction of the project, to November 9, 2019.

I. On October 23, 2019, the City Council received an update on the status of the project.

At that time, Owner advised City Council that Owner had acquired additional properties located at 200 S. Cahuilla Road, 239 W. Arenas Road, and 205 S. Belardo Road, and intended to incorporate those properties into t he p roject. As part of the status update given to City Council on October 23, 2019, Owner requested the Original Covenant to be transferred to a revised l uxury hotel project, which would include those additional properties. City Council agreed, subject to certain conditions relating to Owner’s commitment to perform in accordance with a milestone schedule to be incorporated into the Original Covenant. Thereafter, on January 13, 2020, the City and Owner entered into that certain Amended and Restated Operations Covenant Item 2B - Page 9

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AMENDED & RESTATED COVENANT
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Agreement No. 8449, which included the additional properties as well as a schedule of performance.

J. On March 25, 2020, the Planning Commission reviewed land use entitlements necessary for the revised luxury h otel project, including a Major Architectural Application, a Conditional Use Permit and a General Plan Amendment (Circulation Element), and recommended that the City Council approve such entitlements . On May 7, 2020, the City Council conducted a duly noticed public hearing and approved a Major Architectural Application, Conditional Use Permit, General Plan Amendment (Circulation Element), and Variance for the project.

K. On July 13, 2022, the Planning Commission heard and considered a two (2) year extension of time for the land use entitlements for the project, specifically, the Major Architectural Application and Conditional Use Permit. The Planning Commission denied such extension. On September 1, 2022, the City Council conducted a duly noticed public hearing on said extension request and voted to extend the land use entitlements for one (1) year, from May 8, 2022 to May 7, 2023. At that same hearing, the City Council also granted Owner a forty five (45) day extension to Milestones #10 through 14 of the Performance Schedule of Amendment No. 1 to the Amended and Restated Operations Covenant Agreement No. 8449.

L. On October 24, 2022, Owner provided the City with a feasibility report, prepared by CBRE, which concluded that market conditions at the time precluded Owner from obtaining project financing, despite the Owner’s best effort, and as such, Owner sought an additional one (1) year extension to the various project development milestones. Thereafter, on July 13, 2023, the City and Owner entered into that certain Amendment No. 2 to the Amended and Rest ated Operations Covenant Agreement No. 8449.

M. Owner has recently proposed further revisions to the p roject, including the construction of a three story, [_____] room luxury hotel; restoration of eight (8) existing historic single- story bungalows into eight (8) new guest rooms; restoration of an existing historic two -story church into hotel services and restaurant; sixteen (16) residential condominium (for -sale) units; gym and spa facilities; event space, administration support and back of house building, one (1) new pool and exterior café/bar, wi th new landscaping throughout the Site (the “Project”), which would necessitate review and approval of revised land use entitlements, which the City is willing to consider in good faith.

N. City and Owner desire to place restrictions upon the use and operation of the Project, in order to ensure that it shall be operated continuously as a Luxury Hotel as defined in Section 1.2.1 below, available for short-term rental for the term of this Agreement.

O. City and Owner also agree that in return for participation in the Program, Owner shall agree to operate the Project as a hotel ; participate in the Palm Springs Convention Item 2B - Page 10

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Center’s Committable Rooms Program; and provide City with a minimum of two (2) room-nights per month for official City use; and, City agrees to share a percentage of Transient Occupancy Tax with Owner pursuant to the Program guidelines.

P. The City finds that no further environmental review is required in connection with the approval of this Agreement in that in connection with the City’s approval of entitlements related to the Project on September 1, 2022, the City Council found that the Project is exempt from further review under the California Environmental Quality Act (Pub. Resources Code, § 21000 et seq.) and State CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) as the Project meets criteria under CEQA Guidelines Section 15331 (Historic Resource Restoration/Rehabilitation), Section 15302 (Replacement or Reconstruction), and Section 15332 ( Infill Development). These exemptions will apply to the Project , and apply to those projects that are consistent with the applicable general plan and zoning designations, occur within City limits on a project site of no more than five acres, occur on a site with no value as habitat, can be adequately served by utilities and public services, and where project approval would not result in any significant effects relating to traffic, noise, air quality, or water quality. (State CEQA Guidelines, § 15352.) Further, given that there is no change of use proposed here, this Agreement is merely a funding Agreement , which does not have any attendant environmental impacts. This action is also exempt pursuant to State CEQA Guidelines, section 15061(b)(3), which exempts actions for which it can be seen with certainty that there is no possibility of a significant environmental impact.

Q. Each reimbursement payment contemplated under this Agreement shall be within the annual appropriations limit of the City for that fiscal year established in accordance with California Constitution Article XIIIB.

NOW, THEREFORE , for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Owner hereby conveys to the City the Operating Covenants described herein, and City hereby agrees to provide Owner with funds as provided under the Program and as set forth hereinafter.

ARTICLE 1

STATEMENT OF OPERATING COVENANTS

1.1 OPERATION AND USE COVENANT. Upon occupancy, Owner covenants to operate, maintain, and use the Project as a Luxury H otel certified by the Hotel Consultant as further defined in Section 1.2.1 and in accordance with this Agreement. All uses conducted on the Site, including, without limitation, all activities undertaken by the Owner pursuant to this Agreement shall, in all material respects, conform to requirements of this Agreement and Palm Springs Municipal Code. In accordance with Section 7.13 of this Agreement, the Owner m ay request City’s formal approval of an alternative Hotel Operator, and that in the event of City ’s approval of such an amendment to this Agreement, a hotel identified by Owner with a flag or brand equal or superior to the Luxury Item 2B - Page 11

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AMENDED & RESTATED COVENANT
NO. ____
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Hotel (as defined in Section 1.2.1) and certified by the Hotel Consultant, may serve to fulfill Owner’s duties hereunder. Absent City’s approval of an alternative Hotel Operator pursuant to an amendment to this Agreement, Owner’s operation, maintenance and use of the Luxury Hotel meeting the definition set forth in Section 1.2.1 throughout the term of this Agreement shall be a condition precedent to Owner’s receipt of any and all consideration or benefit under the Program and hereunder.

1.2 HOTEL USE. The Owner hereby agrees that the Project is to be owned, managed, and operated as a Luxury Hotel in a first -class manner, and the Project ’s participation in the Program shall continue in accordance with the terms of the Program, for a term equal to thirty (30) years commencing upon the date Owner first receives from the City the Owner’s share of transient occupancy tax revenues pursuant to the Program, or until Owner has received from the City the total sum of fifty million dollars ($50,000,000) if that occurs prior to the expiration of said thirty (30) years, unless Owner’s participation in the Program is terminated prior thereto in accordance with this Agreement (the “Term”).

Subject to Palm Springs Municipal Codes Section 5.26.040(a) and applicable provisions of this Agreement, during the Term, City shall pay to Owner, within thirty (30) days after receipt from Owner of twelve monthly payments made by Owner to the tax administrator per Section 3.24.080 of the Municipal Code, an amount equal to seventy -five percent (75%) of the adjusted tax rate of those payments made to the City.

1.2.1 “LUXURY HOTEL” BRAND PARTNER. The term ‘Luxury Hotel’ standard shall mean a hotel brand that satisfies the conditions of, and that is recognized as, Luxury by the CBRE Hospitality Division as of the Effective Date of this Agreement, or hotels considered “luxury boutique”, such as the following:

Auberge Resorts, 1 Hotel, Leading Hotels of the World, or Relais & Chateaux, or similarly sized hotels operated as such that are available as of the Effective Date of this Agreement. In the event that, at any time during the Term of the Agreement, none of the above brand conditions can be met, the Parties shall meet and confer and shall select one or more hotel brands that are the equivalent of those brands, as those brands exist and operate as of the Effective Date of this Agreement. City shall not require the Owner to pay for a hotel consultant to evaluate the luxury standard of the Project pursuant to this section 1.2.1 this Agreement.

Notwithstanding the prior sentence, City may enforce the Luxury Hotel standard by means of the City’s architectural review process as required by City code prior to plan check submittal, by the City’s plan check process prior to construction, by the City’s right to approve the hotel operator and any replacement operator under Section 7.13 of this Agreement, and by the ongoing requirement that Owner uphold and maintain the Luxury Hotel standard as a condition to receiving a share of transient occupancy tax revenues pursuant to this Agreement, as provided in Sections 1.2 and 7.13 hereof. In connection therewith, the City may, at any time, and at the City’s sole cost and expense, engage the services of one or more nationally recognized consultant(s), such as CBRE or HVS, to assist the City in the City’s evaluation of the “Luxury Hotel” standard.

Item 2B - Page 12

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1.2.2 Except as otherwise allowed pursuant to Section 7.13 of this Agreement, Owner understands and agrees that, to the extent Owner does not construct a Luxury Hotel as defined in Section 1.2.1, and pursues construction of, or operates an alternatively branded hotel, such alternatively branded hotel will not qualify as a new First Class Hotel pursuant to the Program, and shall not be entitled to any benefits thereof under or pursuant to the provisions of Chapter 5.26 of the Municipal Code and this Agreement. Accordingly, this Agreement will be of no further effect, and City shall have no obligations hereunder.

1.2.3 Owner shall notify City of its selection of its Brand Partner, at the time set forth in Exhibit “C”.

1.3 HOUSING USES PROHIBITED. None of the rooms in the Project will at any time be utilized as a non- transient residential property including dormitory, fraternity or sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park without the City ’s prior consent which consent may be given or withheld in its sole and absolute discretion.

1.3.1 LIMITED NUMBER OF RESIDENTIAL CONDOMINIUMS .

Notwithstanding the preceding paragraph, the City Council shall reasonably consider the incorporation of up to sixteen ( 16) residential condominiums into the Project. Such residential condominiums shall not be subject to the City’s transient occupancy tax (PSMC Ch. 3.24) or time- share occupancy tax (PSMC Ch. 3.28) , provided that those units are not occupied as a transient or time- share use, respectively.

1.4 CONVERSION OF PROJECT. Except as provided in Section 1.3.1 above, no part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Owner take any steps in connection with the conversion of the hotel rooms to such ownership or uses to condominiums, or to any other form of ownership that would reduce the amount of TOT the City received from the Project , without the prior written approval of the City Council which approval may be given or withheld in its sole and absolute discretion.

ARTICLE 2

WARRANTIES AND COVENANTS

2. WARRANTIES AND COVENANTS . For the Term of this Agreement , the Owner hereby represents, covenants, warrants and agrees as follows:

2.1. Owner has completed the City’s application for the Hotel Operations Incentive Program. Since t he Project will be considered a new hotel, City has determined the Transient Occupancy Tax Base to be used to calculate the Item 2B - Page 13

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Transient Occupancy Tax Increment shall be zero dollars ($0.00), and the Owner accepts such Transient Occupancy Tax Base.

2.2. Owner hereby agrees to subscribe to the Palm Springs Convention Center’s Committable Rooms Program or any similar successor program as identified by the City Manager without being obligated to incur any additional costs or expenses.

2.3. Upon City’s prior request, Owner shall provide the City at no cost two (2) rooms for one (1) night (or 1 room for 2 nights) other than Friday or Saturday nights each month for use for City purposes as approved or designated by the City Manager, provided that such use by the City shall be subject to the rooms being available at the time of the City’s request. Such accommodations shall include all services and amenities for which the Owner would normally collect transient occupancy taxes but will not include services and amenities that are optional to the transient and for which the transient is not required to pay a transient occupancy tax. City shall be responsible for any transient occupancy taxes for any occupancy provided to City under the provisions of this paragraph, with such transient occupancy taxes subject to rebate to Owner pursuant to the Program .

Notwithstanding anything in this Agreement to the contrary, if the City does not use rooms during any month, then its right to use rooms with respect to that month shall expire at the end of that month and shall not accrue; provided, however, if the City was unable to use rooms solely because Owner ’s Hotel had no rooms available when the City requested a room in accordance with this Section 2.3, then, the City’s right to use rooms shall not expire and may be used by the City in a subsequent month.

ARTICLE 3

MAINTENANCE

3. MAINTENANCE.

3.1. MAINTENANCE OBLIGATION. Owner, for itself and its successors and assigns, hereby covenants and agrees to maintain and repair or cause to be maintained and repaired the Site, and all related on- site improvements and landscaping thereon, including, without limitation, buildings, parking areas, lighting, signs and walls in a first class condition and repair, free of rubbish, debris and other hazards to persons using the same, an d in accordance with all applicable laws, rules, ordinances and regulations of all federal, state, and l ocal bodies and agencies having jurisdiction, at Owner’s sole cost and expense. Such maintenance and repair shall include, but not be limited to, the following: (i) sweeping and trash removal; (ii) the care and replacement of all shrubbery, plantings, and other landscaping in a healthy condition; and (iii) the repair, replacement and restriping of asphalt or concrete paving using the same type of Item 2B - Page 14

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material originally installed, to the end that such paving at all times be kept in a level and smooth condition. In addition, Owner shall be required to maintain the Project in such a manner as to avoid the reasonable determination of a duly authorized official of the City that a public nuisance has been created by the absence of adequate maintenance such as to be detrimental to the public health, safety or general welfare or that such a condition of deterioration or disrepair causes appreciable harm or is materially detrimental to property or improvements within one thousand (1,000) feet of such portion of the Site. Notwithstanding the foregoing, prior to the start of construction , prior to start of construction, Owner shall implement the practices set forth in Exhibit “D”.

3.2. [INTENTIONALLY LEFT BLANK].

3.3. RIGHT OF ENTRY . In the event Owner fails to maintain the Site pursuant to Section 3.1, and satisfactory progress is not made in correcting the condition within thirty (30) days from the date of written notice from City (such notice shall reasonably identify the required maintenance), City may, at City ’s option, and without further notice to Owner, declare the unperformed maintenance to constitute a public nuisance. Thereafter, either City or its employees, contractors, or agents, may cure Owner ’s default by entering upon the Site , and performing the necessary landscaping and/or maintenance in accordance with Section 3.1 above. The City shall give Owner, its representative, or the residential manager reasonable notice of the time and manner of entry, and entry shall only be at such times and in such manner as is reasonably necessary to carry out this Agreement. Owner shall pay such costs as are reasonably incurred by City for such maintenance, including attorneys’ fees and costs.

3.4. LIEN. If any costs incurred by City under Section 3. 3 above are not reimbursed within thirty (30) days after Owner’s receipt of City’s written request for reimbursement, the same shall be deemed delinquent, and the amount thereof shall bear interest thereafter at a rate of the lower of ten percent (10%) per annum or the legal maximum until paid. Any and all delinquent amounts, together with said interest, costs and reasonable attorney’s fees, shall be an obligation of Owner as well as a lien and charge, with power of sale, upon the property interests of Owner, and the rents, issues and profits of such property. City may bring an action at law against Owner obligated to pay any such sums or foreclose the lien against Owner’s property interests. Any such lien may be enforced by sale by the City following recordation of a Notice of Default of Sale given in the manner and time required by law as in the case of a deed of trust; such sale to be conducted in accordance with the pr ovisions of Section 2924, et seq., of the California Civil Code, applicable to the exercise of powers of sale in mortgages and deeds of trust, or in any other manner permitted by law.

Any monetary lien provided for herein shall be subordinate to any bona fide mortgage or deed of trust covering an ownership interest or leasehold or Item 2B - Page 15

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subleasehold estate in and to any portion of the Site, and any purchaser at any foreclosure or trustee ’s sale (as well as any deed or assignment in lieu of foreclosure or trustee’s sale) under any such mortgage or deed of trust shall take title free from any such monetary lien, but otherwise subject to the provisions hereof; provided that, after the foreclosure of any such mortgage and/or deed of trust, all other assessments provided for herein to the extent they relate to the expenses incurred subsequent to such foreclosure, assessed hereunder to the purchaser at the foreclosure sale, as owner of the subject Site after the date of such foreclosure sale, shall become a lien upon such upon recordation of a Notice of Assessment or Notice of Claim of Lien as herein provided.

ARTICLE 4

COMPLIANCE WITH LAWS

4.1. COMPLIANCE WITH LAWS . Owner shall comply with all ordinances, regulations and standards of the City and City applicable to the Site. Owner shall comply with all rules and regulations of any assessment district of the City with jurisdiction over the Site.

ARTICLE 5

NONDISCRIMINATION

5.1. NON-LIABILITY OF CITY OFFICERS AND EMPLOYEES . No officer or employee of the City shall be personally liable to the Owner, or any successor-in-interest, in the event of any default or breach by the City or for any amount which may become due to the Owner or to its successor, or for breach of any obligation of the terms of this Agreement.

5.2 CONFLICT OF INTEREST . Owner acknowledges that , during the term of this Covenant, no officer or employee of the City has or shall have any direct or indirect financial interest in this Agreement nor shall Owner, during the term of this Covenant, enter into any contract of any kind with any officer or employee of the City, or any person who was a City officer or employee within the twelve (12) months preceding such contracting by Owner. Owner warrants that Owner has not paid or given, and will not pay or give, any third party any money or other consideration in exchange for obtaining t his Agreement.

5.3. COVENANT AGAINST DISCRIMINATION.
a. In connection with its performance under this Agreement , Owner shall not discriminate against any employee or applicant for employment because of actual or perceived race, religion, color, sex, age, marital status, ancestry, national origin ( i.e., place of origin, immigration status, cultural or linguistic characteristics, or ethnicity), Item 2B - Page 16

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sexual orientation, gender identity, gender expression, physical or mental disability, or medical condition (each a “prohibited basis”). Owner shall ensure that applicants are employed, and that employees are treated during their employment, without regard to any prohibited basis. As a condition precedent to City’s lawful capacity to enter this Agreement, and in executing this Agreement , Owner certifies that its actions and omissions hereunder shall not incorporate any discrimination arising from or related to any prohibited basis in any Owner activity, including but not limited to the following:
employment, upgrading, demotion or transfer; recruitment or recruitment advertising; layoff or termination; rates of pay or other forms of compensation; and selecti on for training, including apprenticeship; and further, that Owner is in full compliance with the provisions of Palm Springs Municipal Code Section 7.09.040, including without limitation the provision of benefits, relating to non-discrimination in city contracting. b. Owner shall not discriminate against or segregate any person, or group of persons, on account of actual or perceived race, religion, color, sex, age, marital status, ancestry, national origin ( i.e., place of origin, immigration status, cultural or linguistic characteristics, or ethnicity), sexual orientation, gender identity, gender expression, physical or mental disability, or medical condition in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Owner, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of guests or vendees of the Site, or any part thereof.

ARTICLE 6

COVENANTS TO RUN WITH THE LAND

6.1. COVENANTS TO RUN WITH THE LAND. Owner hereby subjects the Site to the covenants, reservations, and restrictions set forth in this Agreement (collectively, the “Operating Covenants”). City and Owner hereby declare their express intent that all such covenants, reservations, and restrictions, along with the benefits of this Agreement, shall be deemed covenants running with the land and shall pass to and be binding upon and benefit the Owner ’s successors in title to the Site; provided, however, that on the termination of this Agreement said covenants, reservations and restrictions shall expire.

All covenants without regard to technical classification or designation shall be binding for the benefit of the City, and such covenants shall run in favor of the City for the entire term of this Agreement, without regard to whether the City is or remains an owner of any land or interest therein to which such covenants relate. Each and every contract, deed or other instrument hereafter executed covering or conveying the Site or any portion thereof shall conclusively be held to have been executed, delivered and accepted subject to such covenants, reservations, and restrictions, regardless of whether such covenants, reservations, and restrictions are set forth in such contract, deed or other instrument.

City and Owner hereby declare their understanding and intent that the burden of the covenants set forth herein touch and concern the land in that Owner ’s legal interest Item 2B - Page 17

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in the Site is rendered less valuable thereby. City and Owner hereby further declare their understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Project by the intended beneficiaries of such covenants, reservations, and restrictions, and by furthering the public purposes for which the City was formed.

Owner, in exchange for the City entering into this Agreement , hereby agrees to hold, sell, and convey the Site subject to the terms of this Agreement. Owner also grants to the City the right and power to enforce the terms of this Agreement against the Owner and all persons having any right, title or interest in the Site, or any part thereof while such party owns the Site. No party shall have any liability or obligation in connection with any breach occurring while such party is not the owner of the Site.

Within fifteen (15) business days after request of Owner, City shall execute and provide to Owner an estoppel certificate, in the form approved by the City Attorney of the City, confirming whether or not Owner is in breach of any obligations under this Agreement and identifying any required cure.

ARTICLE 7

INDEMNIFICATION

7.1. INDEMNIFICATION. Owner agrees for itself and its successors and assigns to indemnify, defend with counsel acceptable to the City, and hold harmless City and its respective officers, members, officials, employees, agents, volunteers, and representatives from and against any loss, liability, claim, or judgment to or by any third party relating to development and/or operation of the Project by Owner, excepting only any such loss, liability, claim, or judgment arising solely out of the intentional wrongdoing or gross negligence of City or its respective officers, officials, employees, members, agents, volunteers, or representatives. Owner further agrees for itself, and its successors and assigns to indemnify, defend with counsel acceptable to the City, and hold harmless the City, its respective officers, members, officials, employees, agents, volunteers, and representatives from and against any loss, liability, claims, damages, penalties, losses, costs, expenses, injuries and/or liabilities arising from or related to Owner’s participation in the Program , including, without limitation, any claim that such participation creates a public work for prevailing wage purposes thereby requiring the payment of prevailing wages and this obligation shall apply regardless of whether or not the claim, damage, penalty, loss, cost, expense, injury and/or liability complained of arises out of or relates in any way to any negligence on the part of City. Owner, while in possession of the Site, and each successor or assign of Owner while in possession of the Site, shall remain fully obligated for the payment of property taxes and assessments in connection with the Site.

The foregoing indemnification, defense, and hold harmless agreement shall only be applicable to and binding upon the party then owning the Site or applicable portion thereof.

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7.2. PREVAILING WAGE . In accordance with California Labor Code section 1781(a)(2), the Owner acknowledges that the City has expressly indicated to the Owner and persons associated with the Owner that laborers employed relative to the construction of the Project must be paid the prevailing per diem wage rate for their labor classification, as determined by the State of California, pursuant to Labor Code Sections 1720, et seq. and Palm Springs Municipal Code Section 7.06.030(1). The Owner agrees with the City that the Owner shall assume the responsibility and be solely responsible for payment of the prevailing per diem wage rate for their labor classification.

The Owner , on behalf of itself, its successors, and assigns, waives and releases the City from any right of action that may be available to it pursuant to California Labor Code Sections 1726 and 1781. The Owner acknowledges the protections of Civil Code Section 1542 relative to the waiver and release contained in this section 7.2, which reads as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS

THAT THE CREDITOR OR RELEASING PARTY DOES NOT

KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT

THE TIME OF EXECUTING THE RELEASE AND THAT, IF

KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY

AFFECTED HIS OR HER SETTLEM ENT WITH THE
DEBTOR OR RELEASED PARTY.”

BY INITIALING BELOW, THE OWNER KNOWINGLY AND

VOLUNTARILY WAIVES THE PROVISIONS OF SECTION
1542 SOLELY IN CONNECTION WITH THE WAIVERS AND
RELEASES OF THIS SECTION.

Owner’s Initials
Additionally, in accordance with this section 7.2, the Owner shall indemnify, defend with counsel acceptable to the City, and hold the City harmless against any claims pursuant to California Labor Code Sections 1726 and 1781 arising from this Agreement or the construction or operation of the Project.

7.3 ATTORNEYS’ FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other reasonable expert witness fees, and its reasonable attorney ’s fees and costs. Attorney ’s fees shall include attorney’s fees on any appeal, and in addition a party entitled to attorney ’s fees shall be entitled to all other reasonable costs for investigating such action, including the conducting of discovery.

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7.4. AMENDMENTS. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Riverside.

7.5. NOTICE. Any notice required to be given hereunder shall be made in writing and shall be given by personal delivery, certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto:

City: City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attn: City Manager
Copy to: City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attn: City Attorney
Owner: New Church II, LLC
c/o Weintraub Real Estate Group
P.O. Box 6528
Malibu, CA 90264
The notice shall be deemed given three (3) business days after the date of mailing, or, if personally delivered, when received.

7.6. SEVERABILITY/WAIVER/INTEGRATION

7.6.1. SEVERABILITY. If any provision of this Agreement or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of the provisions, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; provided, that if any material terms or provisions of these Operating Covenants are rendered invalid, void and/or unenforceable, or due to changes in the law such terms or provisions would materially alter the terms of the transactions contemplated herein, the parties agree to meet and negotiate in good faith to attempt to reform these Operating Covenants to accomplish the intent of the parties.

7.6.2. WAIVER. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right.

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7.6.3. INTEGRATION. This Agreement contains the entire Agreement between the parties and neither party relies on any warranty or representation not contained in this Agreement.

7.6.4. THIRD PARTIES. No third party beneficiaries are intended, and the only parties who are entitled to enforce the provisions of these Operating Covenants are the City, Mortgagees, Owner and their respective successors and assigns.

7.7. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California and is subject to the provisions of Government Code Section 53083.

7.8. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument.

7.9. TERMINATION. This Agreement may be terminated only (i) by and upon expiration of the Term, (ii) by mutual written agreement of the parties, and (iii) by and pursuant to the provisions of Section 7.10, 7.11 or 7.15.2 below. In addition, Owner may unilaterally terminate this Agreement at any time prior to , or after, opening the Hotel, by giving written notice to the City that it is renouncing its participation in the Program and terminating this Agreement. In the event of any termination of this Agreement, City and Owner shall sign and record a notice of termination evidencing release and termination of this Agreement as an encumbrance of record on the Site, City shall not be obligated to refund any TOT remitted after the date of termination to Owner pursuant to this Agreement, and Owner shall not be obligated to return any amounts previously paid to it by the City pursuant to the Program. In the event of any termination pursuant to the provisions of Section 7.15.2, City shall sign and record a notice of termination, and Owner hereby authorizes City’s execution without Owner’s signature, by evidencing Owner’s agreement pursuant to Section 7.15.2 herein.

7.10 DEFAULT BY OWNER. If at any time during the Term, City contends that Owner has committed a material default with respect this Agreement , for example (and not by way of limitation), by failing to operate the Hotel as a “Luxury Hotel” as defined above, by failing to meet any performance milestone, or any other material covenant of this Agreement, City shall deliver to Owner written notice of default , which specifies in detail all facts alleged by City to constitute such default. For a period of thirty (30) days thereafter, Owner will have the right to commence and complete cure of the alleged default; provided, however, if the alleged default is of such a nature as to reasonably require more than thirty (30) days to cure, and the Parties so agree, Owner will have such additional time as is reasonably necessary to complete such cure. Subject to Section

7.12 below, if Owner fails to timely cure such default, City shall then have the right to terminate this Agreement as the City’s sole and exclusive remedy . Prior to such termination, City shall afford Owner the opportunity to address the City Council, in open session, in order to dispute City’s allegation of default of this Agreement.

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7.10.1 LIMITED CURE FOR PERFORMANCE MILESTONES .

Notwithstanding the foregoing, Owner shall be entitled to only one cure opportunity for any and all defaults consisting of failure to meet performance milestones under Exhibit “C” to this Agreement for reasons other than Force Majeure or Excused Delay under 7.16 below (“Missed Milestone Default”). After City has given Owner a cure opportunity for one Missed Milestone Default, then Owner shall have no further right to any cure opportunity for a subsequent Missed Milestone Default relating to the same performance milestone or any other performance milestone. For purposes of this section 7.10.1, a cure opportunity shall mean that for a period of thirty (30) days after a written notice of default, Owner will have the right to commence and complete cure of the alleged default; provided, however, if the alleged default is of such a nature as to reasonably require more than thirty (30) days to cure, and the Parties so agree, Owner will have such addition time as is reasonably necessary to complete such cure.

7.11 DEFAULT BY CITY. If at any time during the Term, Owner contends that City has committed a material default with respect this Agreement, Owner may deliver to City written notice of default which specifies in detail all facts alleged by Owner to constitute such default. For a period of thirty (30) days thereafter, City will have the right to commence and complete cure of the alleged default; provided, however, if the alleged default is of such a nature as to reasonably require more than thirty (30) days to cure, and the Parties so agree, City will have such additional time as is reasonably necessary to complete such cure. Subject to Section 7.12 , if City fails to timely cure such default, Owner shall then have the right to terminate this Agreement or exercise any and all other rights and remedies available at law and in equity, and each of such rights and remedies shall be cumulative and not exclusive.

7.12 MORTGAGE PROVISIONS. Anything in this Agreement to the contrary notwithstanding, with respect to any recorded mortgage or deed of trust given in good faith and for value and encumbering the Project (“Mortgage”), any holder thereof that has delivered to City a copy of such recorded Mortgage and current contact information (“Mortgagee”) will be entitled rights and benefits in accordance with the following:

7.12.1. City acknowledges and agrees that the rights and obligations of Owner under this Agreement may, with or without approval by City, be conditionally assigned by Owner to any Mortgagee as security for performance of Mortgage obligations.

7.12.2. While any Mortgage remains in effect, City will not amend or modify this Agreement in any material respect without receiving prior written approval from Mortgagee, which approval may not be unreasonably withheld, delayed or conditioned; provided, however, failure by Mortgagee to provide written approval or disapproval (and if disapproval the reasons therefor) within thirty (30) days of delivery of request therefor shall be deemed to constitute approval by Mortgagee.

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7.12.3. While any Mortgage remains in effect, in the event City delivers to Owner of any notice of default as referenced in either Section 3.1 or 7.10 above, City shall concurrently deliver a copy thereof to Mortgagee.

7.12.4. Delivery of any such notice of default notwithstanding, City will not terminate or initiate or pursue any action to terminate this Agreement as long as Mortgagee diligently (i) declares a default by Owner under the Mortgage, (ii) pursues foreclosure and/or other appropriate actions under the Mortgage, (iii) pays to City all amounts that would otherwise have been payable by Owner to City, and (iv) cures non-monetary defaults.

7.13 OPERATOR PROVISIONS . City acknowledges and agrees that operational obligations of Owner may, with or without consent of City, be assigned by Owner to any entity owned or wholly controlled by Owner or its Members or Hotel Operator of Owner’s choice, and, in connection therewith, such Hotel Operator may assume all or part of Owner’s Hotel operation obligations under this Agreement; provided, however, Owner shall retain ultimate responsibility for such Hotel operation obligations, and further, that the Project remains a Luxury Hotel meeting the “Luxury Hotel” definition pursuant to Section 1.21.

Subject to Sections 7.10 and 7.16, in the event that the Project to be developed hereunder ceases to operate as a Luxury Hotel, Owner’s benefits accruing pursuant to the Program will terminate, effective immediately. Owner acknowledges that the identity of the brand or “flag” that the hotel is marketed under and/or managed by (the “Hotel Operator”) is of material importance to the City, and Owner’s selection of the initial Hotel Operator and any subsequent replacement of the Hotel Operator shall be subjec t to the City’s review and approval to confirm that the Hotel Operator has the experience and reputation necessary to operate the Project as a Luxury Hotel. Such approval by the City shall not be unreasonably withheld.

Owner shall have the duty to provide the City with written notice of any actual or potential change of Hotel Operator immediately upon Owner’s determination that a change of Hotel Operator has taken place or is reasonably likely to take place. That notice shall include without limitation Owner’s identification of the flag or brand of an actual or potential replacement Hotel Operator, and relevant data to assist the City in determining whether the replacement hotel is consistent with the Luxury Hotel quality standard defined in Section 1.2.1, and as further required by this Agreement.

Upon City’s approval of a successor Hotel Operator, the successor shall be deemed an “Approved Hotel Operator ”, and in connection therewith, such alternative Hotel Operator may assume all or part of Owner’s Hotel operation obligations under this Agreement; provided, however, Owner shall retain ultimate responsibility for such h otel operation obligations. City agrees that while any operating agreement is in effect between Owner and the Approved Hotel Operator, and provided that City has been put on notice of such operating agreement and received contact information for such Approved Hotel Item 2B - Page 23

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Operator, in the event City delivers to Owner of any notice of default as referenced in either Section 3.1 or 7. 10 above, City shall concurrently deliver a copy thereof to the Approved Hotel Operator. Notwithstanding any other provision of this Agreement , following completion and opening for business of the Luxury Hotel, Owner may assign its right to payments under this Agreement to any person or entity. Owner shall provide written notice to City of its assignment and authorization to send subsequent payments to the assignee.

7.14 CONTINGENT PAYMENT . Owner acknowledges and agrees that any payments hereunder from transient occupancy taxes paid to City by Owner is contingent on Owner’s compliance with all of the following conditions:

7.14.1 Notwithstanding any other provision herein, the City shall only make the payments required hereunder from transient occupancy taxes paid to City by Owner in exchange for consideration received from the Owner to the City during that same period.

7.14.2 In the event of a breach by the City with respect to the payments provided for under this Agreement , Owner agrees to waive (1) any right to acceleration of all future payments, and (2) collecting the full repayment obligation of the City under the Agreement. The Owner shall only be able to pursue collection of payments on an individual payment period, as such payments became due.

7.14.3 Owner shall develop the Project pursuant to the provisions of Section

7.15 herein.

7.15 TIMING OF PROJECT CONSTRUCTION AND COMPLETION. As a material inducement to City’s approval of this Agreement , the Owner hereby agrees to the following conditions. The Parties agree that the Project, once it is fully entitled and approved by the City , will qualify as a new First Class Hotel pursuant to Chapter 5.26, and further, the Parties hereby agree that pursuant to the terms of this Agreement , the obligation to commence construction of the Project prior to November 9, 2019, in accordance with Chapter 5.26 shall be extended to the date consistent with the Performance Schedule referenced herein, and that if completed and opened consistent with the Performance Schedule referenced herein, and continuously operated as a Luxury Hotel as stated herein this Agreement, the Project will qualify as a First Class Hotel and be entitled to benefits thereof under and pursuant to the provisions of Chapter 5.26 of the Municipal Code and this Agreement.

7.15.1 PERFORMANCE SCHEDULE. Owner shall use its best efforts to meet the agreed schedule attached hereto, and incorporated by this reference herein as Exhibit “C”, (the “Performance Schedule”). Owner acknowledges that City is relying upon Owner’s representations that it can proceed with development, construction, and completion of the Project pursuant to the Performance Schedule. Owner understands and agrees that any deviation from the Performance Schedule in the Item 2B - Page 24

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absence of the mutually agreed- upon occurrence of a force majeure event or excusable delay pursuant to Section 7.16, shall be considered by City as a material default by Owner . Specifically, the Owner acknowledges that time is of the essence in this Covenant. To that end, but subject to the Force Majeure/Excusable Delay provisions of Section 7.16 and the one- time cure opportunity in Section

7.10.1, in the event Owner fails to meet more than one of the scheduled events in the Performance Schedule, such failure shall constitute a material default and the City may exercise the City’s right to terminate this Covenant, without an opportunity to cure. In addition, the Owner agrees that any existing or future land use entitlement(s) for the Site as a Luxury Hotel shall include in such land use entitlement(s) the same right, but not the obligation, of the City as an additional remedy following a termination of this Covenant pursuant to the preceding sentence, to terminate such land use entitlement(s) , at any time prior to the occurrence of both of the following: (a) the issuance of the last discretionary entitlement for the Project; and (b) the Owner has incurred substantial costs in the construction of vertical improvements related to the Project.

7.15.2 REVISED PERFORMANCE SCHEDULE . In the event Owner’s performance to develop, construct, and complete the Project is delayed due to the occurrence of a force majeure event or excusable delay pursuant to Section 7.16, Owner shall submit to City a written request to revise the Performance Schedule, citing the legal basis and facts supporting a determination of a force majeure event or excusable delay . Force majeure events or excusable delays as defined in Section 7.16 below (hereinafter a “Pre-Approved Delay”) shall be communicated, reviewed, and approved/disapproved pursuant to Section 7.16 below, and the Performance Schedule may be revised in the City’s reasonable discretion.

7.15.3 SECURITY FOR PERFORMANCE. In order to ensure the completion of the Project, Owner shall, at the time set forth in Exhibit “C”, provide a performance bond. To guarantee the faithful construction of the Project and to protect City if Owner is in default as set forth in this Agreement, Owner shall, at the time set forth in Exhibit “C” , provide City security in the amount of all costs and expenses to construct and install the Project, including contractor, subcontractor and material costs, but excluding therefrom any design or permi tting costs (“Total Project Cost”). City may, in its sole and absolute discretion, partially release a portion or portions of the security provided under this section as the Project is completed and inspected by City, provided that Owner is not then in default on any provision of this Agreement , and the total remaining security is not less than twenty-five percent (25%) of the Total Project Costs . All security provided under this section shall be released at the time set forth in Exhibit “C” , provided tha t Owner is not then in default of any provision of this Agreement. Such performance bond shall be issued by a surety that is licensed and admitted to provide surety service within the State of California.

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7.16 FORCE MAJEURE AND EXCUSABLE DELAY . In addition to specific provisions of this Agreement, neither party shall be deemed to be in default where delays in performance or failures to perform are due to, and a necessary outcome of, war, insurrection, riots, floods, earthquakes, fires, explosions, casualties, unexpected subsurface conditions, construction defects, bankruptcy or default of the Hotel Operator or a key contractor or subcontractor, criminal vandalism, release of hazardous materials, disease epidemic, acts of God, restrictions imposed or mandated by other governmental entities (including new or supplemental environmental regulations), enactment of conflicting state or federal laws or regulations, judicial decisions, or any other similar cause beyond the reasonable control of the party claiming an extension of time (collectively and each a “Force Majeure” event), provided also, that to the extent that any one or more of the foregoing list of events is caused by, or the fault of, the party claiming an extension of time to perform, such event(s) shall not be a Force Majeure entitling the party to an extension of time. The illness or death of a principal or other person associated with either party shall be deemed to not be a force majeure. Strikes, walk outs or other labor disturbances shall constitute a force majeure only if (i) they materially disrupt Owner’s access to materials or equipment necessary for the construction, such as a major dockworker’s strike that shuts down transport and supplies; or (ii) if they directly involve key trades working at the Project jobsite an d Owner enters into, and maintains, a labor peace agreement. A force majeure will be deemed to exist under this Agreement only if such event was truly and reasonably beyond the control of the party claiming an extension of time to perform. In addition, a force majeure will be deemed to exist under this Agreement, only where, under the particular circumstances, there is such an insuperable interference occurring without the party’s intervention as could not have been prevented by the exercise of prudence, diligence and care. In addition, an event that has no material effect on the cost or difficulty of performance and is wholly immaterial shall not be a Force Majeure event. Litigation challenging the validity of this Agreement or any of the City’s approvals of the Project, or any permit, ordinance, entitlement or other action of a governmental agency other than City necessary for the development of the Project pursuant to this Agreement , shall also be deemed to create an excusable delay as to Owner (collectively “Excusable Delay”). The party whose performance is prevented or delayed by such event of Force Majeure or Excusable Delay shall give written notice thereof to the other party within no more than seven (7) business days and both parties shall have reasonably agreed that performance is appropriately excused or delayed pursuant to this Section 7.16. In the event of Force Majeure or Excusable Delay, the parties shall memorialize in writing the extension of time for the performance of any obligation whose performance has been so prevented or delayed. The term of any such extension shall be equal to the period of the Excusable Delay or Force Majeure event, or such other period as may be mutually and reasonably agreed upon by both parties.

Specifically and without limiting the generality of the foregoing, Owner’s covenant to continuously operate and maintain the Project as a Luxury Hotel pursuant to the definition identified in Section 1.2.1 shall be suspended to the extent such operations and maintenance are from time to time interrupted by renovations, repair and reconstruction Item 2B - Page 26

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work undertaken by Owner whether by necessity to restore the Project to a Luxury Hotel condition, or by choice in order to enhance the guest experience at the Project.

Notwithstanding the foregoing, any suspension of time in the Owner’s operation of the Project pursuant to this Section 7.16 shall not exceed a time period that is mutually and reasonably agreed upon by both Parties.

However, the City shall be under no obligation (express or implied) to extend any of Owner’s deadline(s) for performance above due to any inability of the Owner to obtain or maintain financing for the construction and/or operation of the Project , except to the extent Owner can demonstrate that such inability was caused by a Force Majeure event as described in the preceding two paragraphs.

SUBJECT TO THE FOREGOING PROVISIONS OF THIS SECTION 7.16, I. THE OWNER EXPRESSLY ASSUMES THE RISK OF

UNFORESEEABLE CHANGES IN ECONOMIC CIRCUMSTANCES OR MARKET

DEMAND/CONDITIONS, OR BOTH, AND WAIVES ANY DEFENSE, CLAIM (INCLUDING ANY CLAIM OF FORCE MAJEURE OR EXCUSED DELAY), OR CAUSE

OF ACTION BASED IN WHOLE OR IN PART ON ECONOMIC NECESSITY,

IMPRACTICABILITY, CHANGED ECONOMIC CIRCUMSTANCES, FRUSTRATION OF PURPOSE, OR SIMILAR THEORIES.

II. THE OWNER EXPRESSLY AGREES THAT ADVERSE CHANGES

IN ECONOMIC CONDITIONS, EITHER OF THE OWNER SPECIFICALLY , ANY

CONTRACTOR, SUBCONTRACTOR, SUPPLIER OF MATERIAL, OR THE ECONOMY

GENERALLY, OR CHANGES IN MARKET CONDITIONS OR DEMANDS, SHALL NOT

OPERATE TO EXCUSE OR DELAY THE STRICT OBSERVANCE OF EACH AND

EVERY OF THE OBLIGATIONS, COVENANTS, CONDITIONS AND REQUIREMENTS OF THIS AGREEMENT. THE OWNER EXPRESSLY ASSUMES T HE RISK OF SUCH

ADVERSE ECONOMIC OR MARKET CHANGES, WHETHER OR NOT FORESEEABLE AS OF THE OWNER'S EXECUTION OF THIS AGREEMENT.

OWNER'S INITIALS _____

7.17 COOPERATION. Each party agrees to and shall do and perform such other and further acts and properly execute and deliver such other and further documents as may be reasonably necessary, expedient or convenient to implement and/or effectuate the intents and purposes hereof. City and Owner agree t o cooperate with each other and/or with any Mortgagee or proposed Mortgagee, in a manner consistent with concepts and principles of good faith, fair dealing and commercial reasonableness, with respect to consideration, implementation and execution of any modification(s) to this Agreement reasonably requested by the City, Owner, Mortgagee or proposed Mortgagee. Owner shall notify the City, in writing, of any legal claim (notice, lien, lawsuit, etc.) or any force majeure event upon which Owner may rely, within seven (7) two (2) business days Item 2B - Page 27

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OPERATIONS COVENANT

FOR HOTEL INCENTIVE PROGRAM

AMENDED & RESTATED COVENANT
NO. ____
PAGE 21 OF 22

following Owner’s receipt of such claim, and failure to do so shall constitute a material default hereunder and a loss of Owner’s opportunity to claim a force majeure delay.

7.18 REASONABLE APPROVALS. Whenever this Agreement requires or calls for the approval or consent of any party hereto, such approval shall not be unreasonably withheld, delayed or conditioned.

7.19 BINDING ARBITRATION. In the event of any dispute or controversy arising out of or relating to this Agreement, or the breach or performance of it, the parties shall reasonably attempt to resolve such dispute or controversy without resort to third party review or resolution. The parties shall first meet and confer on any such dispute or controversy. Such meeting(s) shall include any principal of the Owner and, at the discretion of the City, may include the City Manager and/or the City Council, either as a whole or through an ad hoc subcommittee designated by the City Council. Upon a determination by the parties that they are or will be unable to resolve the dispute or controversy on their own, then the parties shall, within sixty (60) days following the first meet and confer date, submit the dispute, controversy or any remaining unresolved matter to binding arbitration, to be held in the Coachella Valley, and be conducted pursuant to the Commercial Arbitration Rules of the American Arbitration Association.

7.20 INCORPORATION OF RECITALS AND EXHIBITS . Each of the recitals set forth above and each of the exhibits attached hereto are agreed to and made part of this Agreement.

7.21 AUTHORITY. Each party represents and warrants to the other that such party has full right, power and authority to sign, execute and enter into this Agreement.

[SIGNATURES ON NEXT PAGE]

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OPERATIONS COVENANT

FOR HOTEL INCENTIVE PROGRAM

AMENDED & RESTATED COVENANT
NO. ____
PAGE 22 OF 22

IN WITNESS WHEREOF, the City and Owner have executed this Agreement by duly authorized representatives on the date first written hereinabove. “CITY”

THE CITY OF PALM SPRINGS,
a California municipal corporation,
and charter city
By:

Scott Stiles, City Manager
ATTEST:

Brenda Pree, City Clerk
APPROVED AS TO FORM:

Jeff Ballinger, City Attorney

“OWNER”

NEW CHURCH II, LLC,
a Nevada limited liability company

By:_____________________________
Richard Weintraub, General Manager

ARENAS BELARDO PS, LLC, a Nevada
limited liability company

CAHUILLA CHURCH, LLC
a Nevada limited liability company

By:____________________________
Richard Weintraub, General Manager

By:_____________________________
Richard Weintraub, General Manager
[END OF SIGNATURES]
Item 2B - Page 29

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OPERATIONS COVENANT

FOR HOTEL INCENTIVE PROGRAM
AMENDED & RESTATED COVENANT NO. ____
EXHIBIT “A”

EXHIBIT “A”

SITE PLAN

Item 2B - Page 30

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OPERATIONS COVENANT

FOR HOTEL INCENTIVE PROGRAM
AMENDED & RESTATED COVENANT NO. ____
EXHIBIT “B”

EXHIBIT “B”

SITE LEGAL DESCRIPTION

All of that certain real property conveyed by Grant Deed dated January 20, 2010, recorded as Document No. 2010- 0046920, records of Riverside County, located in the City of Palm Springs, County of Riverside, State of California, identified by Assessor’s Parcel Number 513-151-037, and more particularly described as:

Lot 9 of Tract No. 31877 in the City of Palm Springs, County of Riverside, State of California as shown on said Tract Map filed in Book 364, Pages 66 through 69, inclusive, of Miscellaneous Maps and as amended by a Certificate of Correction recorded May 8, 2008, as Instrument No. 2008- 0244658 of Official Records, in the Office of the County Recorder of said County.

All of that certain real property conveyed by Trustee’s Deed Upon Sale dated March 9, 2010, recorded as Document No. 2010-0126950, records of Riverside County, located in the City of Palm Springs, County of Riverside, State of California, identified by Assessor’s Parcel Numbers 513-151-041, 513-151-042, 513-151-043, and 513-151-044, and more particularly described as:

Lots 7, 8, 9, 10, 11, 12, 13, 14, 15, of Block 16, of Palm Springs, in the City of Palm Springs, County of Riverside, State of California, as shown by Map on file in Book 9, Page 432, of San Diego County records.

Lots 20, 21, 22, 23, 24, and the south 10 feet of Lot 1, and the south 10.00 feet of the west half of Lot 2, together with that portion of the east 8.00 feet of Cahuilla Road (formerly known as Orange Street), adjoining the above described land on the west, as vacated and closed to public use by order recorded March 27, 1926, in Book 665, Page 532 of Deeds, records of Riverside County, California.

All of that certain real property conveyed by Grant Deed dated September 5, 2017, recorded as Document No. 2017- 0409254, records of Riverside County, located in the City of Palm Springs, County of Riverside, State of California, identified by Assessor’s Parcel Number 513-151-039, and more particularly described as:

Easterly rectangular ½ of Lot 2; all of Lots 3 and 4 and the Westerly 8.55 feet of Lot 5, all in Block 16, of Palm Springs, in the City of Palm Springs, County of Riverside, State of California, as shown by Map on file in Book 9,

Item 2B - Page 31

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EXHIBIT “B”

SITE LEGAL DESCRIPTION
(CONTINUED)

OPERATIONS COVENANT

FOR HOTEL INCENTIVE PROGRAM
AMENDED & RESTATED COVENANT NO. ____
EXHIBIT “B”

All of that certain real property conveyed by Grant Deed dated August 6, 2018, recorded as Document No. 201 8-0327297, records of Riverside County, located in the City of Palm Springs, County of Riverside, State of California, identified by Assessor’s Parcel Number 513-151-040, and more particularly described as:

The easterly rectangular 34.35 feet of Lot 5 and all of Lot 6 in Block 16, of Palm Springs, in the City of Palm Springs, County of Riverside, State of California, as shown by Map on file in Book 9, Page 432, of San Diego County records.

Excepting therefrom that portion as conveyed to the City of Palm Springs by grant of right -of-way, recorded February 4, 1972, as Instrument No. 14975, of official records of Riverside County, California.

All of that certain real property conveyed by Grant Deed dated January 31, 2019, recorded as Document No. 201 9-0094151, records of Riverside County, located in the City of Palm Springs, County of Riverside, State of California, identified by Assessor’s Parcel Number 513-151-038, and more particularly described as:

Lot 1 and the West half of Lot 2 in Block 16, of Town of Palm Springs, in the City of Palm Springs, County of Riverside, State of California, as shown by Map on file in Book 9, Page 432, of San Diego County records.

Together with the Easterly 8.00 feet or Orange Street adjoining, as vacated by the board of supervisors of Riverside County on March 22, 1926.

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OPERATIONS COVENANT

FOR HOTEL INCENTIVE PROGRAM
AMENDED & RESTATED COVENANT NO. ____
EXHIBIT “C”

EXHIBIT “C”

PERFORMANCE SCHEDULE

Duration

Milestone Surety Not Later Than
A Covenant Agreement Approved

Covenant
Agreement
April 23, 2025
B + 4
months
from A
Deadline
Planning Application:
• Submit full planning
application and fees
• Stabilize extant structures

1. Review
delay with
City Council

2.Forfeit TOT
Agreement
August 23, 2025

C Public
schedule
Full entitlements granted (includes
appeals):
• HSPB (if needed)
• Planning Commission
• ARC

1. Review
delay with
City Council

2.Forfeit TOT
Agreement
TBD – estimated 8
months from
submittal (April
2026)

D +8 months
from C
Approvals
Developer submits building
application:
• Submit complete set of plans
for code review
• Evidence of Prelim Brand
Commitment of Upper
Upscale or Luxury partner
• DD/CD cost estimate from
licensed estimator or general
contractor
• Preliminary evidence of
financing of DD/CD cost

1. Review
delay with
City Council

2.Forfeit TOT
Agreement
December 30, 2026*

E +5 months
from D
Deadline
City reviews building application:
• City Review of CD’s/Plan
Check Completed
City shall process the submittals
diligently and in good faith.

May 30, 2027*

F +1 months
from E
deadline
City issues building permit(s):
• Evidence of final commitment
of Upper Upscale or Luxury
Brand partner
• Submit Guaranteed
Maximum Price or Total
Project Cost
Completion
Bond
concurrent
with Building
Permit

June 30, 2027*
Item 2B - Page 33

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OPERATIONS COVENANT

FOR HOTEL INCENTIVE PROGRAM
AMENDED & RESTATED COVENANT NO. ____
EXHIBIT “C”

• Evidence of Financing of
Guaranteed Maximum Price
or Total Project Cost
G +2 weeks
from F
deadline
Developer begins construction:
• Commence Construction

Completion
Bond
Jul 15, 2027*

H Grey shell complete % reduction
Completion
Bond
TBD*
I 30 months
from H
Satisfy conditions for issuance of
100% CoC
Full release
of remaining
surety
December 30, 2029*

* Deadlines for Milestones D through I shall be administratively adjusted by the City Manager if the City entitlement process under Milestone C takes more than the estimated 8 months, provided the delay is not due to a lack of reasonable diligence by Owner.

Item 2B - Page 34

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OPERATIONS COVENANT

FOR HOTEL INCENTIVE PROGRAM
AMENDED & RESTATED COVENANT NO. ____
EXHIBIT “C”

EXHIBIT “D”

PRE-CONSTRUCTION MAINTENANCE PROGRAM

Remove all dead vegetation, including dead trees and bushes

Provide daily on- site, in -person security 7:00 p.m. through 7:00 a.m., plus daily maintenance check and trash collection. Such security shall be licensed in accordance with the Private Security Services Act (Bus. & Prof. Code, 7580 et seq.) The property shall be secured with perimeter fencing/screening as approved by the City’s Development Services Director. Such fencing/screening must be maintained in a clean and presentable fashion, and graffiti shall be removed within 48 hours of notification to Owner. If the fencing/screening becomes faded, Owner shall replace or re- surface the fencing/screening, so as to not be faded.

Keep the site clear of trash, debris, and branches/palm fronds, whether on the ground or on rooftops of buildings.

Post “No trespassing” signage at intervals no more than 150’ apart. The signage must reference Penal Code Section 602(l). The property shall also contain signage that indicates the property is under video surveillance. Each side of the property shall also display a sign, which provides management contact information. The property shall be posted with the name and 24- hour contact phone number of the local property management company and security company. The posting shall be no less than 18” X 24”, shall be of a font that is legible from a distance of forty-five (45) feet, and shall contain the following verbiage: “THIS PROPERTY MANAGED BY __________“ and “TO REPORT PROBLEMS OR CONCERNS CALL (name and phone number)”.

There shall be at least two designated entry points on the Cahuilla and Belardo sides of the property and at least one on the Baristo side. Designated entry points to the property shall be locked. Access keys/codes shall be made available to law enforcement and fire personnel by means of Knox Box security containers keyed to match the keys utilized by Palm Springs Fire and Palm Springs Police personnel. The security boxes shall be marked with reflective tape.

Item 2B - Page 35

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OPERATIONS COVENANT

FOR HOTEL INCENTIVE PROGRAM
AMENDED & RESTATED COVENANT NO. ____
EXHIBIT “C”

All structures on said property shall be secure from access by trespassers. Any breach or attempted breach to a structure and/or perimeter fence shall be repaired to the City’s satisfaction within two (2) business days.

Install lighting at pedestrian access points. Lighting activated by motion sensors shall be installed along walkways of the property and other areas designated by the Chief of Police or his designee. All lighting shall comply with section 93.21.00 of the Palm Springs Zoning Code (PSZC).

Install and maintain a video surveillance system as approved by the Chief of Police or the Chief’s designee. Use of the surveillance system shall provide twenty -four (24) hour coverage of the property in the form of video and/or still images triggered by motion. Any data captured on the remote cameras shall be evaluated weekly by Owner. In the event there is evidence of a trespass or damage caused by an unknown party, the surveillance footage will be evaluated. This system shall, at a minimum, monitor any points of ingress or egress through the property as well as any large open space areas, the back sides of buildings and the narrow alleys and spaces between the buildings. Images captured by this surveillance system shall be maintained for a period of no less than thirty (30) d.

Copies of footage shall be made available to the Chief of Police or his designee no later than two (2) business days after a request for the footage is made.

The property landscape shall be maintained in compliance with PSZC section 93.19.00, subsection 1, and with PSMC section 11.72.170(b)(1), both of which read as follows - All properties, including vacant properties, shall be kept free of trash, building materials or the storage of other goods which are visible from the street or adjacent properties.

Properties shall also be kept free of excessive vegetative undergrowth.

At such time as the property is sold or otherwise changes, management and the person named below is no longer responsible for the property, they shall notify the City immediately.

Item 2B - Page 36

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ATTACHMENT B

Item 2B - Page 37

D – Page 919 of 925

Item 2B - Page 38
LAW OFFICE OF MARC P. JACOBS
12424 WILSHIRE BLVD., SUITE 900
LOS ANGELES, CALIFORN]A 90025
CELL: (310)346-6905
[email protected]
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs , CA 92262
Re: 2845 Cahui lla Road
Gent lemen:

April 8, 2025
This office is legal counse l to New Church II, LLC, Cahuilla Church, LLC, and Arenas Belardo PS, LLC. As a group, these three entities own contiguous parcels of land commonly known as 2845 Cahu illa Road as to which we unders tand there are pending before the City applications for redevelopment of these parcels into a hotel. The APNs for the parcels are identified as follows:

New Church II, LLC, a Nevada LLC
513-151-04 1
042-043-044
Cahu illla Church , LLC, a Nevada LLC
513-151-037
Arenas Belardo PS, LLC, a Nevada LLC
513-151-038
038-039-040
The forego ing entities are owned and managed by severa l affiliated intermediaries, however, those intermediaries are all ultimately owned by the follow ing entities:

The REW I Trust
Trustee - Alliance Trust Company of Nevada
Settlor - Richard Weintraub
Investment Advisor - Richard Weintraub
Beneficiaries - Liane Weintraub , Ava Weintraub , and Coleman Weintraub The LCMW II Trust
Trustee - the National Alliance Company of Nevada
Settlor - Liane Weintraub
Investment Advisor- Richard Weintraub
Beneficiaries - Richard Weintraub , Ava Weintraub , and Coleman Weintraub

D – Page 920 of 925

Item 2B - Page 39
The Weintraub Descendents Trust of 2009
Trustee - Richard Weintraub
Settlors - Richard and Liane Weintraub
Beneficiaries -Ava Weintraub and Coleman Weintraub
Each of the operatin LLCs are essentially and ultimately managed by Richard Weintraub.

If you have any questions, pie e do not hesitate to contact me.

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ATTACHMENT C

Item 2B - Page 40

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Item 2B - Page 41

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Item 2B - Page 42

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*These time frames are for internal agenda management purposes only. It should not be relied on by any third party for purposes of establishing when an agenda item may actually be heard.

TENTATIVE UPCOMING MEETING SCHEDULE
Updated Wednesday, March 4, 2026

March 25 – Regular Meeting

• Visit Greater Palm Springs Annual Update – Presentation (10 minutes) • Historic Designation, 1752 Ridge Road – Public Hearing (10 minutes) • Hotel Incentive Agreement, Cactia Hotel – Public Hearing (10 minutes) • Hotel Incentive Agreement, Terra Palm Springs – Public Hearing (10 minutes) • Report of Employee Vacancies (AB 2561) – Business & Legislative (10 minutes) • Review of Prescott Preserve Fire – Business & Legislative (45 minutes) Total time: 1.5 hours

April 8 – Regular Meeting

• Hotel Incentive Agreement, Alcazar Palm Springs – Public Hearing (10 minutes) • Discussion of City Mayoral Position – Business & Legislative (60 minutes)

April 22 – Regular Meeting

• CDBG Annual Action Plan, Hearing #2 – Public Hearing (15 minutes)

A – Page 925 of 925