Rancho Cordova City Council
April 17, 2023

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 8 is approved by ordinance, it is subject to referendum, which allows the electorate to overturn approval of the agreement. (Ibid.) While, as a legislative act, a development agreement can be disapproved by referendum, an unchallenged
development agreement is an enforceable contract between the municipality and the developer. Depending on its terms, it may create vested rights in the Developer with respect to land use. (See SMART, supra, 84 Cal.App.4th at p.
230, 100 Cal.Rptr.2d 740 [development agreement creates commitments to developers].)
*443 After approval by ordinance, the development
agreement is enforceable despite subsequent changes in the municipality's land use laws. (Gov.Code, § 65865.4.) The development agreement may be amended or cancelled only
by mutual consent of the parties to the agreement. (Gov.Code, § 65868.)
The Legislature enacted the development agreement statutes in response to the California Supreme Court's jurisprudence on vested rights.

Before 1976, developers in California faced changes in
land use laws and policies during the course of longterm development of property. When a change in the land use laws and policies interfered with development already initiated, some developers argued that they had a “vested right” to complete the development despite the changes in the land use laws and policies. It was “the rule in this state and in other jurisdictions that if a property owner has performed substantial work and incurred substantial liabilities in good faith reliance upon a permit issued by the government, he acquires a vested right to complete
construction in accordance with the terms of the permit. [Citations.]” ( Avco Community Developers, Inc. v. South Coast Regional Com. (1976) 17 Cal.3d 785, 791, 132
Cal.Rptr. 386, 553 P.2d 546 (Avco ).)
In 1976, the California Supreme Court, in Avco, decided that no right to complete the work vested until the developer obtained a building permit, even if the developer had already performed substantial work and incurred substantial liabilities on the project. ( Avco, supra, 17 Cal.3d at p. 793, 132 Cal.Rptr. 386, 553 P.2d 546.) The court noted that any change in this common law principle would have to come from the Legislature. ( Id. at p. 796, 132 Cal.Rptr. 386, 553 P.2d 546.)
In 1979, the Legislature's enactment of the development agreement statutes provided a way for the municipality and developer to depart from the common law rule of vested
rights. The Legislature declared that “[t]he lack of certainty in the approval of development projects can result in a waste of resources, escalate the cost of housing and other development to the consumer, and discourage investment in and commitment to comprehensive planning **805 which
would make maximum efficient utilization of resources at the least economic cost to the public.” (Gov.Code, § 65864, subd. (a).)
[2] The Legislature recognized that the newly-authorized development agreements would provide benefits for both
municipality and developer. The agreements allowed the
developer to proceed with a project with the assurance that the project would be approved based on rules, regulations, and policies existing at the time the development agreement was approved, even if those rules, regulations, and policies changed over the course of the development project.
(Gov.Code, § 65864, subd. (b).) In 1984, the Legislature added a declaration that development agreements would
also allow *444 municipalities to extract promises from the developers concerning financing and construction of necessary infrastructure. (Gov.Code, § 65864, subd. (c); Stats.1984, ch. 143, § 1, p. 431.) This declaration makes it clear that the scope of development agreements need not be limited to freezing land use rules, regulations, and policies but can include other promises between the municipality and the developer. Thus, a legislatively-approved development agreement gives both parties vested contractual rights.

FACTS1
The Town's Acquisition of Airport and FAA Funding
The Town took over operation of the Mammoth Lakes Airport (later known as the Mammoth–Yosemite Airport) in 1991 and annexed the property in 1995. The Town desired to improve the airport to host commercial air service to enhance the Town's appeal as a destination for visitors.

Beginning in 1992, the Town received grants from the FAA under the Airport Improvement Program. As a condition for receiving these federal funds, the Town made assurances to the FAA that it would meet any conditions placed on the funding by the FAA. These grant assurances were made part of the funding agreements. One of the assurances made by the Town to the FAA was that the Town would not sell or ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 9 lease any part of the airport property without approval from the FAA.

Proposed Development Agreement
In 1997, the Town proposed to enter into a Development
Agreement with Terrence Ballas, who had experience in
airport development.

The recitals at the beginning of the proposed Development Agreement stated the Town's purposes and goals: “[The]
Town has determined that a first-class Airport operation, including an efficient fixed base operation, increased hangar space, modern fuel facilities, a hotel or condominium or residential condominium and related amenities, and space for recreational *445 vehicles, will benefit the economy of the Mammoth Lakes area and promote the goals set **806
forth in the applicable vision statements, adopted by the Town, including the goal of becoming a year around [sic ] destination resort.” The recitals also stated: “[The] Town has further determined that the interests of its tax paying [sic ] citizenry can best be served by providing for the funding of Airport operations and development through private capital rather than taxpayer funds, where reasonably possible, and through the privatization of certain services provided at or in connection with the Airport.”
The Development Agreement addressed the procedure upon
default of one of the parties. It stated: “Failure by either party to perform any material term or provision of this Agreement for a period of thirty (30) days after delivery of written notice of default from the other party shall constitute a default under this Agreement.” Upon the offending party's failure to cure the default, the Development Agreement allowed the offended party to “institute legal action against the party in default....”
Under the Development Agreement, Ballas agreed to make
improvements to the airport at his own expense, including construction of hangars, a gas storage building, and a
terminal, as well as remodeling of an existing terminal. These improvements were designated as Phase I. In Phase II of the airport development, Ballas would, again at his own expense, build a restaurant building, a gasoline station, and a recreational vehicle park.

As part of Phase I, the Development Agreement allowed
Ballas to build a hotel or condominium project (which came to be known as the Hot Creek Project), described in the Development Agreement as “time share or similar units,
hotel or residential condominium, or a commercial lodging facility for transient guests of a minimum stay of sixty (60) units to be constructed by Developer.” In later phases of the development, Ballas would be allowed to build additional hotel or condominium facilities to a maximum of 250
total hotel or condominium units. The hotel/condominium project was to be built on a 26–acre parcel, adjacent to the aeronautical services. In 2027, Ballas would have an option to purchase that parcel. The construction and operation of the hotel/condominium project was a material part of the consideration for the Development Agreement.

The option to purchase the parcel made the Development
Agreement economically feasible for Ballas. He would make the improvements and build the hotel or condominiums,
initially leasing the land from the Town, then exercising the option to purchase the land.

The Development Agreement required the Town to act
reasonably in moving the project along. It stated: “Town and its agents, employees and *446 contractors shall
exercise any discretionary approvals applicable to the Project reasonably, in good faith, and in a timely manner.”
The Development Agreement incorporated other documents, such as a commercial development plan and leases. In the lease of the land for the hotel/condominium project, the Town warranted that “it has title to the premises free and clear of liens and encumbrances, that it has the right and power to enter into this lease, and that this lease is made pursuant to the powers vested in [the Town] by laws of the State of California.”
Events Leading to Signing of Development Agreement
Before the Town entered into the Development Agreement
with Ballas, it sought approval from the FAA for the
agreement. William Manning, the Town's airport director, **807 sent correspondence to the FAA with details of the Development Agreement and the accompanying leases. The
FAA responded by fax: “We need to review ‘options'; 55 yr lease creates problems with FAA policy....” The response also stated: “Under current FAA policy and procedure guidance a release of all federal obligations which encumber the property must be obtained from the FAA prior to the notice to sell/ purchase the property. The FAA should be given a copy of the option contract for review and comment prior to recording the document.”
ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 10 The town council approved the Development Agreement by
ordinance. After the town council's approval, Ballas and the Town's mayor pro tem signed the Development Agreement on August 21, 1997, just nine days after the FAA made known to the Town its reservations concerning the Development Agreement.

While the Town claimed that the Town's airport director discussed the FAA's concerns with Ballas, Ballas testified that the Town did not disclose to him the FAA's concerns about the Development Agreement until seven years later. On appeal, the jury is deemed to have credited Ballas's testimony in this regard. ( Garlock Sealing Technologies, LLC v. NAK Sealing Technologies Corp. (2007) 148 Cal.App.4th 937, 951, 56 Cal.Rptr.3d 177.)
The Town also did not contact the FAA to discuss its concerns.

The Town's airport manager testified: “I believed that [the FAA representative's] form of correspondence was ridiculous.

If he had issues or comments that he wanted me to deal
with, I believe he would have sent me a formal FAA letter.

We correspond regularly with the FAA. This—the fax notes were highly irregular. I just felt like it wasn't an official correspondence and I wasn't obligated to respond to it.” After signing the Development Agreement, Ballas assigned his interest in the Development Agreement to various other entities. He assigned his right to *447 develop, market, and sell the hotel/condominium project to Mammoth Lakes Land Acquisition, LLC, the plaintiff in this case. Ballas retained a substantial interest in the limited liability company.

The plaintiff, Mammoth Lakes Land Acquisition, LLC, is also known as the Hot Creek Developer. We refer to the plaintiff in this opinion as the Developer.

Phase I Improvements
As part of Phase I of the Development Agreement and
within three years of signing the Development Agreement, the Developer spent $15 million to $17 million on improvements to the airport. It built hangars, renovated an existing terminal, and installed a new fueling system and water supply system.

The Developer also took over the airport's general aviation operations.

Hotel/Condominium Complex
In 2000, after the airport improvements had been made
and were in operation, the Developer formulated and
submitted to the Town an application with a plan for the hotel/condominium project. The plan included residential condominiums. In 2002, Town staff raised objections to the plan because it reflected a residential orientation instead of one promoting services to visitors. Town staff urged the Developer to withdraw the application, which the Developer refused to do.

The Developer's application was placed on the agenda for a Town planning commission meeting with a recommendation
from staff to deny the application. Even though the
Development Agreement allowed residential condominiums, Town **808 staff stated that the plan was “inconsisten[t] with entitlements that have been granted to the applicant under the terms of a Development Agreement, and with
zoning regulations applicable to the property.” In light of the negative recommendation from Town staff and an assurance from staff that they would negotiate with the Developer concerning the hotel/condominium project, the Developer agreed to withdraw the application from consideration at the planning commission meeting.

After the Developer's application had been withdrawn from consideration at the planning commission meeting, the
Town's community development director sent Ballas a letter on April 1, 2002, about five years after the signing of the Development Agreement, apologizing for the delay in processing the application and recognizing the Developer's right to construct a residential condominium project under the Development Agreement. The letter continued: “Since signing the Development Agreement in 1997, major changes in *448 the Town's economic climate have occurred;
commercial air service is on the horizon, housing prices have increased significantly, and the village is under construction with commercial tenants selected. With these factors in mind, the Town believes that an opportunity exists in
a modified plan for a centralized hotel or condominium
facility for transient guests surrounded by uses such as residential condominiums which are designed and located to conveniently utilize the resorts [sic ] amenities and to participate in a visitor rental program at the individual owner's desire. We believe that this type of project will be beneficial financially to both the Town and the developer.”
At the suggestion of Town staff, the Developer worked with Town staff to revamp the plan to have multiple owners of each condominium with a hospitality company to manage the joint ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 11 ownership and rent out the units when the owners were not occupying them. In 2004, the Developer submitted a revised plan to Town staff for informal review. The plan, however, was never submitted formally to the Town for approval.

FAA Objections and Town's Change of Priorities
In 1999, the Town began working to get commercial air
service into the airport. The FAA approved an environmental assessment in 2000, which concluded that the commercial air service, and the associated improvements to the airport, would not have significant environmental impacts. However, this assessment was overturned by a federal court. (California v. U.S. Dept. of Transp. (N.D.Cal.2003) 260 F.Supp.2d 969.) In response to this loss in federal court, the FAA reevaluated the hotel/condominium project and concluded that it had not been adequately subjected to environmental review.

In 2004, the FAA took the position that the grant assurances given by the Town required the Town to obtain the consent of the FAA before executing a lease to use airport property for anything other than an aeronautical use. The FAA asserted that it had not given consent for the nonaeronautical use of the airport property to build a hotel/condominium project. The Town resisted this position, stating that the FAA had approved the entire project, including the nonaeronautical uses, in 1998.

Nonetheless, the FAA informed the Town that it could either have expanded air service or the hotel/condominium project, but not both.

Soon after this exchange between the FAA and the Town,
the Town changed its position with respect to the hotel/ condominium project. In early May 2004, deputy town
manager Charles Long told the **809 Developer that
the hotel/condominium project was the Town's top priority.

However, later the same month, Long stated that expanded air service had become the Town's top priority. Robert Clark, who was hired as town manager in June 2004, *449 testified that the town council “shared [the] sentiment” that expanded air service was a higher priority than the hotel/condominium project.

In light of the change in the Town's position, the Developer began to feel less secure in its relationship with the Town.

The Developer informed the Town that it was taking a
“time-out” from the discussion of issues arising from the Development Agreement and would not be attending any
meetings concerning the issues. The proposed length of the “time-out” was not stated.

On June 28, 2004, Town officials, including deputy town manager Long, met with officials of the FAA. Long told the FAA officials that the Developer's option to purchase the hotel/condominium project was inconsistent with the Town's goals. Long said that the hotel/condominium project might never be built. He asked the FAA to help the Town “get rid of Hot Creek,” referring to the hotel/condominium project, because it interfered with expanded air service. To obtain the FAA's assistance in stopping the hotel/condominium project, Long asked the FAA to put in writing its objections based upon the grant assurances given to the FAA by the Town.

On June 29, 2004, the day after the meeting with the FAA, deputy town manager Long sent an e-mail to the Developer.

Because the Developer relies heavily on the e-mail to support its repudiation argument, we quote the pertinent part of the email here:
“The FAA is primarily concerned about two issues for
your project: First, the compliance issues remain paramount.

They are concerned that the airport will run out of land for aeronautical purposes as a result of the land used by the non-aeronautical uses your project represents. They are also concerned about the purchase option. And finally they are concerned about whether the airport has enough land to accommodate competing FBOs [fixed base operators]....

The FAA intends to send us a specific itemization of these compliance concerns in the next few weeks. Until these issues are resolved, we will be unable to move forward with your project.
“Second, the FAA is concerned that your currently
proposed development plan differs significantly from the specifications in the [Development Agreement] and needs NEPA [National Environmental Policy Act] review since it occurs coterminously with the EIS [environmental impact statement] on the airport expansion. This difference in project scope applies to CEQA [California Environmental Quality Act], as the attached CEQA analysis makes clear. For the Town to move forward with your project we will need to
conduct an Initial Study and to work with you to bring your project within the parameters of a possible Mitigated Negative Declaration.
“On both issues we are ready to work with you when you reenter the process.” *450 The Developer, through Ray Johnson, one of the
principals, responded on July 1, 2004, with a letter to ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 12 Robert Clark, the town manager, seeking clarification of Long's e-mail and requesting assurances that the Town would proceed with the Development Agreement. Clark responded that the Town and the Developer “need to resolve the
FAA compliance issues as a pre-requisite to ... knowing whether [the hotel/condominium project] complies with FAA regulations. The need for the project **810 to comply with FAA review requirements is specifically noted in Section 26 of the lease. The Town is ready to proceed working with you and the FAA to resolve the compliance concerns that exist at FAA on your project.”
Through counsel, the Developer replied to Clark's letter on August 10, 2004. Counsel stated that “Clark and Long as authorized agents of the Town, now appear to believe that the Town may freely disregard the express terms of the Development Agreement and withhold approvals and
other cooperation required by that Agreement to enable
Hot Creek to proceed with its entitled development. As
is more fully discussed hereafter, it is also apparent that the Town has affirmatively taken actions which threaten to directly undermine Hot Creek's prior contractual and statutory rights and promote other, more recent interests, such as the proposed expansion of commercial air service operations at the Airport.”
On October 4, 2004, the FAA sent the Town a letter
stating its concerns about grant assurances and raising objections to the residential nature of the hotel/condominium project. The letter stated: “We are concerned that the
Town may be in violation of various [Airport Improvement Program] Grant Assurances, a situation that resulted from the Town executing a Development Agreement with Hot
Creek Aviation. This situation will further aggravate if the Town proceeds to execute leases with Hot Creek Aviation for certain planned nonaeronautical development [at the airport].” (Internal fn. omitted.) The FAA informed the Town:
“The Town has an obligation to act in accordance with
the Airport Improvement Program (AIP) Grant Assurances.

The Town needs to determine whether the proposed Hot
Creek development is consistent with the Town initiative to extend the runway and expand the airfield infrastructure to accommodate commercial service by Boeing 757 type
aircraft.” (Internal fn. omitted.) The FAA informed the Town that its federal funding was in jeopardy.

In correspondence with the Developer, Town officials
professed willingness to work with the Developer to resolve the FAA issues. However, in private, the mood was not
cooperative. Taking notes in a meeting of town officials discussing the October 4 FAA letter, an assistant town
manager wrote: “Hammer Hot Creek—we will not approve
an inconsistent project and we will renegotiate land disposal.” *451 Town's Default
On February 7, 2005, the Developer served the Town with a notice of default under the Development Agreement. The notice demanded that the Town terminate its efforts to
obtain federal funding for expansion inconsistent with the Development Agreement. The Town and Developer agreed
to toll the notice of default while further negotiations were held. Although some progress was made, the FAA continued to insist that (1) the hotel/condominium project could not be used for permanent residences and (2) the purchase option was unacceptable because it might hinder future airport use of the land.

Town manager Clark said to the FAA in a September 2005 email: “Our lease contains an option for Hot Creek to purchase land under their condo hotel. I have advised them of the FAA's objection to the clause and asked to renegotiate. They indicate a very reluctant willingness to do so, but only when they have certainty as to their development rights and timing (which neither you nor I can deliver at this stage). I believe that the FAA and Town need to jointly investigate (with our respective legal counsels) what means we **811 have to unilaterally eliminate this clause, along with the legal and financial implications of doing so.” (Underscoring in original.)
Also in September 2005, town manager Clark sent an e-mail to other town staff discussing “alternatives to eliminate the Hot Creek option.” Two of the alternatives presented were to (1) seek declaratory relief in state or federal court or (2) condemn the purchase option and compensate the Developer.

Concerning the value of the hotel/condominium purchase
option, Clark stated: “Hot Creek estimates the market value of their project at $400 million, which is $1.6 million per unit based on fractional ownership, and the value of the option at 5% of sales price [$20 million]. Even if the value is half that amount it would cost $10 million to acquire the option through negotiation. They offered to have a mutually agreeable expert determine the value. [¶] Since we don't have $10 to $20 million in spare change I am trying to come up with some other way to compensate Hot Creek.” The Town
did not pursue the eminent domain option.

ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 13 In August 2006, town manager Clark informed the Developer that the town council's position was that the hotel/
condominium project could not move forward until the
FAA issues were resolved. The Developer's representative suggested that the Town could go forward with the hotel/ condominium project under the Development Agreement
and deal later with any FAA fallout, such as termination of funding from the FAA. Clark responded that the town
council would not do that because it might derail approval of the expanded air service, which was very important to the council.
*452 From the time Clark became the town manager in
2004, through 2006, Clark met in closed sessions many times with the town council concerning the issues arising from the Development Agreement. No councilmember ever told
Clark that his actions or Long's actions were not authorized by the town council. Clark believed that all actions he took concerning the issues arising from the Development Agreement were either within his authority as town manager or with the authorization of the town council.

PROCEDURE
The Developer filed a civil claim with the Town on September 1, 2006, for breach of the Development Agreement, asserting it had been damaged “in an amount not less than $150
million.” After the Town rejected the claim, the Developer sued the Town, alleging a breach of contract cause of
action. As remedies, the Developer sought damages, specific performance, and injunctive relief. Later, the Developer added a prayer for declaratory relief.

The Town demurred to the Developer's complaint. It asserted that, among other things, the Developer failed to exhaust administrative and judicial remedies pursuant to Code of Civil Procedure section 1094.5. The trial court overruled the demurrer.

The Town filed a motion for summary judgment. It argued, among other things, that the grant assurances made by the Town to the FAA were rules and regulations of the FAA as a matter of law and, therefore, the Development Agreement required compliance with the grant assurances. The trial court rejected this reasoning and concluded that whether the grant assurances were rules and regulations of the FAA was a
factual matter to be submitted to the jury.

The Developer abandoned its prayers for specific
performance and declaratory relief, so the action went to a jury trial on the Developer's claim for damages as a **812 result of the Town's anticipatory breach of the Development Agreement.

The trial court instructed the jury concerning the breach of contract cause of action as follows:
“This case involves a dispute between the Town and the Hot Creek Developers. This is a breach of contract case arising out of a Development Agreement and a series of leases between the Town and the Hot Creek Developers that were executed in August of 1997. Generally speaking, the contract required the Hot Creek Developers to construct a series of improvements at the Mammoth–Yosemite Airport. In return, the Hot Creek *453 Developers received among other things the right to build and operate a hotel and residential condominium project on approximately 25 acres of land at the Airport and an option to purchase those 25 acres.
“The dispute in this case centers around whether the Town has breached the contract by refusing to allow the Hot Creek Developers to actually construct the hotel and residential condominium project. The Town denies that it has breached the agreement and maintains it stands ready to perform the contract. Your job as the jury is to resolve various factual disputes between the Hot Creek Developers and the Town
as to what the parties intended when they agreed to certain contractual provisions, and various factual disputes as to whether a breach of contract has in fact occurred. In doing so, you will reach a conclusion as to whether or not the Town has breached the contract.”
By special verdict, the jury found that (1) the Town and the Developer entered into a contract, (2) the Developer met all, or substantially all, its obligations under the contract, (3) the Town failed to perform under the contract or added extracontractual conditions to its performance, (4) the Developer did not waive the Town's failure to perform, and (5) the Town's failure to perform damaged the Developer. The jury set the amount of damages at $30 million.

On the Developer's motion, the trial court awarded the
Developer $2,361,130 in attorney fees.

DISCUSSION
ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 14 I
Availability of Contract Action
The Town contends that the trial court erred by allowing the Developer to proceed with a contract action. The Town argues that the Developer was required to engage and exhaust the Town's administrative process before seeking judicial remedies. Based on this argument, the Town asserts that (1) the Developer's action is unripe because the Developer has not engaged and exhausted the available administrative process and (2), when the claim ripens, a petition for writ of administrative mandamus will be the exclusive judicial remedy.

The Town attempts to narrow the issue in its favor.

Quoting selectively from the complaint, it states that the Developer's allegation is that “the Town ‘failed and refused to ... approve’ the Developer's application for a *454
conditional use permit and subdivision map for the hotel/ condominium project.” If the dispute is simply about the failure to approve a conditional use permit and subdivision map, then it would appear that administrative mandamus is the remedy. However, the very paragraph of the complaint from which the quote is taken also contains six other
allegations supporting the breach of contract **813 cause of action. 2 As the Developer notes in response to the
Town's argument, the theory presented to the jury was
whether the Town breached the Development Agreement
by refusing to proceed with the hotel/condominium project despite the FAA's objections to the project. Accordingly, we consider whether the anticipatory breach of the Development Agreement by the Town's refusal to proceed with the hotel/ condominium project is unripe for judicial review because the Developer failed to exhaust administrative remedies.

The Town contends that the Developer could not file
a complaint in court and thereby avoid the Town's
administrative process for approving or rejecting land use applications. The contention is without merit because there was nothing for the Town's administrative process to
adjudicate.
[3] “This is the doctrine of ‘exhaustion of administrative remedies.’ In brief, the rule is that where an administrative remedy is provided by statute, relief must be sought
from the administrative body and this remedy exhausted
before the courts will act.” ( Abelleira v. District Court of Appeal (1941) 17 Cal.2d 280, 292, 109 P.2d 942.)
“[E]xhaustion of the administrative remedy is a jurisdictional prerequisite to resort to the courts.” ( Id. at p. 293, 109 P.2d 942.) However, “[t]he exhaustion of administrative remedies doctrine has never applied where there is no
available administrative remedy. [Citations.]” ( Tahoe
Vista Concerned Citizens v. County of Placer (2000) 81
Cal.App.4th 577, 590, 96 Cal.Rptr.2d 880.)
[4] *455 Here, there was no remedy available to the
Developer in the administrative process. The Town concedes that relief pursuant to administrative mandamus would have been limited to a writ vacating a final decision by the town council on a land use application and that damages would not be available in such an action. However, once the Developer gave notice of default and the Town failed to cure the
default, there was no longer a proposed land use to adjudicate in the Town's quasi-judicial administrative process. At that point, all that remained was to determine whether the Town breached the Development Agreement and, if it did, what was the remedy. No administrative remedy would have sufficed. ( Tahoe Vista Concerned Citizens v. County of Placer,
supra, 81 Cal.App.4th at p. 590, 96 Cal.Rptr.2d 880.)
The Town cites two cases in support of its contention that the Developer failed to **814 exhaust administrative remedies.

Both are distinguishable.

The first case cited by the Town is Legacy Group v.

City of Wasco (2003) 106 Cal.App.4th 1305, 131 Cal.Rptr.2d 460 (Legacy Group ). In Legacy Group, a developer and a municipality entered into development agreements, as well as an agreement for the municipality to purchase infrastructure constructed by the developer. When the municipality stopped purchasing the infrastructure, the developer sued, asserting breach of contract, among other causes of action. The trial court entered judgment in favor of the municipality, finding that the action was barred by the statute of limitations applicable to actions implicating the Subdivision Map Act. ( Id. at pp. 1307–1310, 131 Cal.Rptr.2d 460.) In the
published portion of the opinion on appeal, the court
concluded that most of the allegations in the complaint did not implicate the Subdivision Map Act; therefore, the longer statute of limitations for contracts was applicable. The court stated: “[W]e are reluctant to extend [the Subdivision Map Act statute of limitations] to breach of contract claims unless ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 15 the gravamen of the claim concerns acts that could have been challenged as a violation of the [Subdivision Map
Act].” ( Id. at p. 1313, 131 Cal.Rptr.2d 460.) Applying this holding, the court found that only one of the developer's breach of contract claims was subject to the shorter limitations period because the acts complained of “could have been
challenged under the [Subdivision Map Act]....” ( Id. at p. 1314, 131 Cal.Rptr.2d 460.)
Citing Legacy Group, the Town states: “The Developer's
challenge to the Town's alleged failure and refusal to grant such discretionary approvals, even though pled as breach of contract, remained subject to the administrative exhaustion requirement and other restrictions on judicial relief applicable to such challenges.”
The Town's argument relying on Legacy Group is unavailing for two reasons. First, it is premised upon the suggestion that the Developer's action *456 is all about the Town's failure to approve the Developer's land use application. We have already rejected that suggestion; therefore, attacking it does not show error as to the actual breach of contract allegations tried to the jury. And second, the Town's argument does not explain how the Developer, through the administrative process, could obtain the damages sought for the Town's breach of contract. Instead, as noted, the Town argues that those damages are unavailable.

The second case cited by the Town is Subriar v. City
of Bakersfield (1976) 59 Cal.App.3d 175, 130 Cal.Rptr.
853 (Subriar ). In Subriar, the plaintiff claimed that the municipality's requirements for obtaining a permit to operate an ambulance business were unconstitutional. The trial
court agreed and granted a permanent injunction against enforcement of the ordinance. ( Id. at pp. 180–181, 130 Cal.Rptr. 853.) The appellate court, however, concluded that the plaintiff failed to exhaust his administrative remedies because, after the city manager failed to act on the permit, the plaintiff did not appeal to the city council to overturn the city manager's action. ( Id. at p. 191, 130 Cal.Rptr. 853.)
Subriar is distinguishable because an appeal to the town council could have resulted in issuance of the permit that the plaintiff sought. Here, engaging and exhausting the administrative process promised no prospect of obtaining damages for the Town's breach of the Development
Agreement.

As tried to the jury, the Developer's complaint is not that the Town denied an application to build the hotel/condominium **815 project. Instead, the complaint is that the Town
refused to move forward on the hotel/condominium project, refused to cooperate, until the FAA's concerns were resolved, which was not a condition in the Development Agreement.

The administrative process for approving or rejecting land use applications was not designed to address this breach by the Town. Furthermore, having given the Town a notice of default, as allowed by the Development Agreement,
the Developer elected not to pursue an application but
instead to pursue damages for anticipatory breach. The
administrative process could not give these damages. (See Tahoe Vista Concerned Citizens v. County of Placer, supra, 81 Cal.App.4th at p. 590, 96 Cal.Rptr.2d 880 [exhaustion not required when process cannot provide requested relief].) Under these circumstances, the Developer was not required to submit a land use application to the Town and pursue the application through to denial by the town council. 3
*457 Availability of Contract Remedies
The Town contends that, if the trial court had required the Developer to pursue administrative remedies, the Developer's exclusive judicial remedy would have been a petition for administrative mandamus under Code of Civil Procedure
section 1094.5. While this contention is theoretically correct, it is inapt and unhelpful to the Town because the Developer was legally entitled to go forward with a breach of contract action, as the trial court found.

Quasi-judicial determinations of a town council are reviewed judicially by administrative mandamus proceedings.
( Code Civ. Proc., § 1094.5; Mola Development Corp.
v. City of Seal Beach (1997) 57 Cal.App.4th 405, 410,
67 Cal.Rptr.2d 103.) Although, as the Town asserts, the Development Agreement preserved the Town's discretion
to make quasi-judicial determinations with respect to
applications submitted by the Developer as part of the
development plan, the Town's refusal to move forward
with the hotel/condominium aspect of the Development
Agreement was not a quasi-judicial determination. Instead, it was an executive decision on the part of the Town
to refuse to comply with the terms of the Development
Agreement, ostensibly in order to preserve its funding from the FAA. Since the Developer did not challenge a quasiITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 16 judicial determination, administrative mandamus is not the exclusive remedy.

This is not to say that an action for contract damages
is the only remedy for a municipality's breach of a
development agreement. We are not faced, in this case, with an administrative mandamus challenge to a quasi-judicial determination of the town council. Instead, we conclude only that administrative mandamus is not the exclusive remedy, under the circumstances of this case, where there has been an anticipatory breach of the Development Agreement not involving a quasi-judicial determination. 4
**816 II
Contract Defenses
The Town contends that three clauses of the Development Agreement, each independently, provide a complete defense to the Developer's breach of *458 contract action. We
conclude that the three clauses do not provide a defense to the Town's breach of the Development Agreement.

Before we consider the three clauses, we summarize the law regarding interpretation of contracts.
“The fundamental goal of contractual interpretation is to give effect to the mutual intention of the parties.” ( Bank of the West v. Superior Court (1992) 2 Cal.4th 1254, 1264, 10 Cal.Rptr.2d 538, 833 P.2d 545.) “A contract must be so interpreted as to give effect to the mutual intention of the parties as it existed at the time of contracting, so far as the same is ascertainable and lawful.” (Civ.Code, § 1636.) “The words of a contract are to be understood in their ordinary and popular sense, rather than according to their strict legal meaning; unless used by the parties in a technical sense, or unless a special meaning is given to them by usage, in which case the latter must be followed.” (Civ.Code, § 1644.)
[5] [6] [7] “The interpretation of a written instrument, even though it involves what might properly be called
questions of fact [citation], is essentially a judicial function to be exercised according to the generally accepted canons of interpretation so that the purposes of the instrument may be given effect. [Citations.] Extrinsic evidence is ‘admissible to interpret the instrument, but not to give it meaning to which it is not reasonably susceptible’ [citations], and it is the instrument itself that must be given effect. [Citations.] It is therefore solely a judicial function to interpret a written instrument unless the interpretation turns upon the credibility of extrinsic evidence.” ( Parsons v. Bristol Development Co. (1965) 62 Cal.2d 861, 865, 44 Cal.Rptr. 767, 402 P.2d 839.)
A. Excuse Provision (Clause E)
[8] Section XVII(e) of the Development Agreement (clause E) stated that neither party would be in default for a
cause beyond the reasonable control of the parties. It
stated: “Neither party shall be in default of this Agreement for delays in or failures of performance due to war,
insurrection, strikes, floods, earthquakes, fires, casualties, acts of God, governmental restrictions imposed or mandated by governmental entities other than Town, enactment of
conflicting State or Federal laws or regulations, judicial decisions, or similar bases beyond the reasonable control of the party excused.” (Italics added.)
The Town asserts that, as a matter of law, the emphasized portion of clause E excused it from performing on the
Development Agreement because both *459 the Town
and the Developer were required to comply with the FAA
restrictions. This assertion is without merit because the FAA's restrictions were within the control of the Town.

The Town made grant assurances to the FAA in exchange
for funding for the airport. And the FAA cited the grant assurances in insisting that the hotel/condominium project, with its residential character and option to purchase,
was inconsistent with preserving the airport property for aeronautical purposes. If the Town had not made grant
assurances in the first place and later encouraged the FAA to **817 help the Town “get rid of” the hotel/condominium
project, there would have been no impediment to the
Town's performance of the Development Agreement with
the Developer. The Town's own actions caused the FAA
to express reservations concerning the hotel/condominium project. In other words, the FAA's restrictions were within the reasonable control of the Town. Therefore, the Town cannot rely on clause E to justify its nonperformance.

B. Rules and Regulations of the FAA (Clause N)
Section XVIII(n) of the Development Agreement (clause N) required the parties to comply with FAA rules and regulations.

It stated: “In carrying out this Agreement and otherwise ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 17 operating the Airport in accordance with the terms of the leases, the parties shall comply with all applicable rules and regulations of the FAA.”
[9] In the trial court, the Town asserted that the grant assurances given to the FAA were FAA “rules” and, therefore, the Town's compliance with the grant assurances could not constitute a breach of the Development Agreement because the Development Agreement required compliance with FAA
rules. The trial court rejected this assertion, concluding that there was a question of fact concerning the parties' intent with regard to clause N. It therefore submitted the question to the jury with the following instruction:
“The Court has found, as a matter of law, that the grant assurances made by the Town to the FAA are not rules or regulations of the FAA. They are contractual promises made by the Town to the United States government in exchange for the federal funds the Town has received. However, a question of fact remains as to whether the parties intended the provision to include the Town's grant assurances.”
On appeal, the Town contends that the grant assurances were FAA rules for the purpose of interpreting the Development Agreement and, therefore, the trial court improperly found otherwise, as a matter of law. We conclude that, *460 while grant assurances made by the Town to the FAA may be
considered “rules” of the FAA by reference to federal statutes, the parties did not consider that definition when entering into the Development Agreement. The trial court properly instructed the jury to determine the parties' intent concerning the definition of FAA “rules.”
Instead of focusing on the parties' intent as to the
interpretation of clause N, the Town focuses solely on
federal law with respect to whether grant assurances, in a technical sense, are “rules” of the FAA. The Town cites the broad definition of a “rule” in the federal Administrative Procedures Act, which includes “an agency statement of
general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy....” ( 5 U.S.C. § 551(4).) The Town then notes that grant assurances (1) are “ ‘agency statements of general or particular
applicability,’ ” (2) have “ ‘future effect,’ ” and (3) “ ‘implement, interpret [and] prescribe law.’ ” The Town also notes that federal law requires that, before the FAA can modify assurances or require compliance with additional assurances, it must give notice in the Federal Register and provide an opportunity for comment on the proposed change. ( 49 U.S.C. § 47107(h).)
Even if the grant assurances fall within the broad definition of a “rule” under the federal Administrative Procedures Act, the task of interpretation requires inquiry into the parties' intent, not into a proposed technical interpretation of the term. (Civ.Code, §§ 1636, 1644.) Because the court's task in interpreting a contract is to ascertain the intent of the parties, federal law **818 concerning whether a grant assurance
is technically a rule of the FAA is relevant only if the parties considered such federal law when they entered into the contract. There is no evidence that this was the case. Instead, the only evidence concerning the parties' intent in this regard came from the testimony of Terrence Ballas. He stated that the Town inserted the provision concerning FAA rules and regulations into the Development Agreement. When Ballas asked town officials what the provision meant, they stated that it was boilerplate applicable only to the “air-side operations of the airport.” Ballas was hesitant to agree to clause N because he did not know what it included, so the parties went through the specific FAA rules applicable and included references to those rules in the various leases executed along with the Development Agreement. The Town never mentioned its
grant assurances in this discussion. Thus, there is no evidence the parties intended to include the Town's grant assurances in the term “rules” in clause N of the contract.

Arguing against this interpretation, the Town states that (1) the FAA expressed the opinion that the grant assurances were FAA “rules” and the FAA's opinion is entitled to
deference and (2) we should apply canons of *461
statutory interpretation, not contract interpretation, because the Development Agreement was a legislative act. The Town is wrong on both points.

In one of the letters to the Town concerning the Town's compliance with the grant assurances, an FAA official stated:
“We view the Town's ability to take corrective action to be fully within the scope of paragraph N of Section XVIII of the Development Agreement, which clarifies the Town's obligation to comply with FAA rules and regulations.”
Citing authority that courts give deference to an agency's interpretation of a statute if that statute governs the agency's powers and responsibilities (Ste. Marie v. Riverside County Regional Park & Open–Space Dist. (2009) 46 Cal.4th 282, 292, 93 Cal.Rptr.3d 369, 206 P.3d 739), the Town claims that we should give deference to this opinion. To the contrary, the ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 18 FAA has no authority over development agreements and no special expertise in contract interpretation.
[10] The Town also argues that, because adoption of the Development Agreement was a legislative act (Gov.Code,
§ 65867.5, subd. (a)), we are required to apply canons
of statutory interpretation. This argument misconstrues the “legislative act” language of the development agreement statutes, which applies to the authority of the municipality to enter into the agreement and the power of the electorate to challenge the agreement by referendum.
“A development agreement is a legislative act that
shall be approved by ordinance and is subject to
referendum.” (Gov.Code, § 65867.5, subd. (a).) A
development agreement is treated as a legislative act for the purpose of a challenge to the agreement either (1) by referendum or (2) an action concerning the municipality's authority to enter into the agreement. In SMART, supra, 84 Cal.App.4th at pages 227 and 228, 100 Cal.Rptr.2d 740, the court summarized the effect of the “legislative act” language.

It said: “A development agreement is a legislative act ( [Gov.Code,] § 65867.5) and the County's board of supervisors has the discretion to determine what legislation is necessary and appropriate. A reviewing court will not set aside a legislative act unless it is arbitrary, capricious, or unlawful.” Here, the question does not concern the validity of
the Development Agreement as a legislative act of the
Town. Instead, this is an action between the parties
of the Development Agreement concerning the **819
interpretation of the agreement. As to that question, the Development Agreement is a contract between the parties.

Therefore, canons of statutory interpretation do not apply.

C. Acknowledgement of FAA Funding (Clause B)
Section XVI(b) of the Development Agreement (clause B)
required the Developer to match FAA funding. It stated:
“[The] Town has received tentative *462 commitments from the FAA for grant funds ... for the purpose of constructing improvements at the Airport.... The terms of the grant require that matching funds in the approximate amount of ten percent (10%) of the grant funds be put up by [the] Town. As further consideration for this Agreement, Developer agrees to and shall provide such matching funds....” Within one month after adoption of the Development Agreement, the Developer supplied $80,000 in matching funds.
[11] “A voluntary acceptance of the benefit of a transaction is equivalent to a consent to all the obligations arising from it, so far as the facts are known, or ought to be
known, to the person accepting.” (Civ.Code, § 1589.) The Town argues that the Developer's acknowledgement of FAA funding and participation in matching the funding amounted to a consent to the FAA's restrictions. This argument fails because there is no evidence that, when entering into
the Development Agreement, or even when supplying the
matching funds, the Developer knew or ought to have known of the grant assurances. Instead, the evidence showed that the Town withheld from the Developer knowledge of the
FAA's reservations concerning the Development Agreement.

Under these facts, the Developer did not consent to the grant assurances.

III
Proof of Breach
The Town contends that the Developer failed, as a matter of law, to establish that the Town breached the Development Agreement. Stated differently, the Town contends that there is no substantial evidence to sustain the jury's verdict. The Town asserts: (A) the Developer failed to establish a breach attributable to the Town; (B) the evidence was insufficient to establish repudiation; (C) the option was a unilateral contract not yet ripe for breach; and (D) the Town retracted any repudiation. After summarizing the law regarding substantial evidence to sustain the verdict finding anticipatory breach of contract, we discuss the Town's four arguments and conclude that each is without merit.
[12] [13] [14] When we consider whether the evidence
was sufficient to support the jury's verdict, we review the entire record in the light most favorable to the judgment to determine whether there are sufficient facts, contradicted or uncontradicted, to support the judgment. ( Campbell v.

Southern Pacific Co. (1978) 22 Cal.3d 51, 60, 148 Cal.Rptr. 596, 583 P.2d 121.) Substantial evidence is evidence that is reasonable and credible. In evaluating the *463 evidence, we accept reasonable inferences in support of the judgment and do not consider whether contrary inferences may be made from the evidence. ( Kuhn v. Department of General Servs. (1994) 22 Cal.App.4th 1627, 1632–1633, 29 Cal.Rptr.2d
191.)
ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 19 [15] To recover on a cause of action for breach of contract, the plaintiff must establish: (1) the existence of a contract, (2) plaintiff's performance or excuse for nonperformance, (3) defendant's breach, and (4) damage to plaintiff as a result of defendant's breach. ( **820 Regan Roofing
Co. v. Superior Court (1994) 24 Cal.App.4th 425, 434–
435, 29 Cal.Rptr.2d 413, disapproved on another ground in Crawford v. Weather Shield Mfg., Inc. (2008) 44 Cal.4th 541, 565, 79 Cal.Rptr.3d 721, 187 P.3d 424.)
[16] [17] “Anticipatory breach occurs when one of
the parties to a bilateral contract repudiates the contract.

The repudiation may be express or implied. An express
repudiation is a clear, positive, unequivocal refusal to perform [citations]; an implied repudiation results from conduct where the promisor puts it out of his power to perform so as to make substantial performance of his promise impossible [citations]. [18] “When a promisor repudiates a contract, the injured party faces an election of remedies: he can treat the
repudiation as an anticipatory breach and immediately seek damages for breach of contract, thereby terminating the contractual relation between the parties, or he can treat the repudiation as an empty threat, wait until the time for performance arrives and exercise his remedies for actual breach if a breach does in fact occur at such time. [Citation.] However, if the injured party disregards the repudiation and treats the contract as still in force, and the repudiation is retracted prior to the time of performance, then the repudiation is nullified and the injured party is left with his remedies, if any, invocable at the time of performance. [Citations.]” ( Taylor v. Johnston (1975) 15 Cal.3d 130, 137–138, 123 Cal.Rptr. 641, 539 P.2d 425.)
[19] As the jury was instructed in this case, “[a] party can breach, or break, a contract before performance is required by clearly and positively indicating, by words or conduct, that they [sic ] will not or cannot meet a requirement of the contract, or that they [sic ] will not perform until additional conditions not in the contract are met. [¶] If the Hot Creek Developers prove that they would have been able to fulfill the terms of the contract and that the Town clearly and positively indicated, by words or conduct, that it would not or could not meet a requirement in the contract, then the Town breached the contract.”
*464 The Developer's theory of breach, upon which it
prevailed at trial, was that the Town expressly repudiated the Development Agreement by refusing to move forward on the contract without resolving the FAA's objections to the Hot Creek project. 5
A. Breach Attributable to Town
A 1989 resolution of the Mammoth Lakes town council states that “no oral or written communications or comments ... by any member of the Town Council or any other person
constitutes an action of the Town Council or an act legally attributable to the Town.” 6 Based on this resolution, **821 the Town claims that the actions of town officials in
repudiating the Development Agreement cannot be attributed to the Town. To the contrary, the actions of town officials were an actionable repudiation of the Development Agreement.

The Developer presented evidence that deputy town manager Long and, later, town manager Clark stated, unequivocally, that the Town would not proceed with the hotel/condominium project until the FAA's objections to the project were resolved.

Long informed the Developer that, until the FAA's objections were resolved, “we will be unable to move forward with
your project.” Later, Clark again informed the Developer that the project would not move forward without resolution of the FAA's objections. When the Developer requested that the Town proceed under the Development Agreement and
deal with the FAA's objections later, Clark said that the town council would not agree to proceeding that way because it might derail FAA approval of expanded air service. The Town offered no evidence to counter the Developer's evidence that the town council authorized the position taken by Long and Clark.

Despite this evidence, the Town maintains that any
repudiation by town officials was without force because the town council did not vote on it. We disagree. Neither the Town's resolution nor case law concerning the authority *465 of municipal officials absolves the Town of liability for its repudiation, even if accomplished through its officials rather than by a vote of the town council.
[20] [21] “No government, whether state or local, is bound to any extent by an officer's acts in excess of his authority. [Citation.] [¶] One who deals with the public officer stands presumptively charged with a full knowledge of that officer's powers, and is bound at his peril to ascertain the extent of his powers to bind the government for which he is an officer, and any act of an officer to be valid must find express authority in the law or be necessarily incidental to a power expressly ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 20 granted. [Citation.]” ( Horsemen's Benevolent & Protective Assn. v. Valley Racing Assn. (1992) 4 Cal.App.4th 1538, 1563–1564, 6 Cal.Rptr.2d 698.)
[22] Citing the town council's 1989 resolution, the Town asserts that the town officials had no authority to act on behalf of the Town. The Town states: “This Resolution
could not be more plain: Individual town officials, including then-Deputy Town Manager Long, have no authority to
take final action on behalf of the Town, and their written communications, including Mr. Long's June 29 Email, are not legally attributable to the Town.” This assertion reads too much into the resolution. Taken to its logical extreme, this assertion would mean that town officials cannot buy paper clips on behalf of the Town without a vote of the town council.

We must presume the town council did not intend an absurd result. (California School Employees Assn. v. Governing Board (1994) 8 Cal.4th 333, 340, 33 Cal.Rptr.2d 109, 878 P.2d 1321 [legislation interpreted to avoid absurd results].) A more reasonable interpretation of the resolution is that consistent with case law, which holds that the legislative and quasi-judicial powers of a municipality's governing council cannot be undermined by statements of municipal officials. (See, e.g., Katsura v. City of San Buenaventura (2007)
155 Cal.App.4th 104, 109, 65 Cal.Rptr.3d 762 [oral contract made by city employee not binding on city]; **822
Burchett v. City of Newport Beach (1995) 33 Cal.App.4th 1472, 1479, 40 Cal.Rptr.2d 1 [statement of city official that owners could obtain permit not binding on city].) The town council adopted the Development Agreement by ordinance.

Logically and legally, the fulfillment of the Town's duties under the Development Agreement was left, for the most
part, to town officials. Any other conclusion would allow a municipality to repudiate any contract by the actions of its officials and suffer no consequences unless the governing council voted to repudiate.

In any event, the Town's municipal code gives further
guidance concerning the authority of town officials and supports a finding here that the town officials acted within their authority. The executive functions of the *466 Town, including cooperation with parties that have contracted with the Town, are within the authority of the town manager.

According to the Town's municipal code, the town manager is an executive officer, charged with the duty to “see
that all franchises, contracts, permits and privileges granted by the town council are faithfully observed.” (Mammoth
Lakes Municipal Code, § 2.08.060, subd. (A).) Therefore, compliance with the Town's duty to cooperate under the
Development Agreement was within the explicit authority of the town manager. And the refusal of the town manager and deputy town manager to cooperate without resolution of the FAA's objections was a repudiation of the contract.

Again raising the argument that this was a land use decision instead of a matter of complying with the terms of the
Development Agreement, the Town asserts that a town
official cannot bind the Town by representations concerning land use applications. While the proposition may be true as a theoretical statement of law (see Burchett v. City of Newport Beach, supra, 33 Cal.App.4th at p. 1479, 40
Cal.Rptr.2d 1), it is inapplicable here. The repudiation of the contract did not result from a quasi-judicial decision on a land use application. As noted above, the repudiation occurred when the Town refused to comply with the terms of the
Development Agreement to cooperate with the Developer to achieve the ends of the Development Agreement. While it is true that quasi-judicial decisions on land use applications remained to be made before the hotel/condominium project could be completed, the Town's position, related through town officials, was that the Town would not cooperate with the Developer in moving along the hotel/condominium project without resolution of the FAA's objections. That refusal constituted the breach, not the exercise of any quasi-judicial decisionmaking power. 7
B. Evidence of Repudiation
The Town contends that the Town's actions did not constitute a repudiation of the Development Agreement. To the contrary, when viewed in the light most favorable to the judgment, the evidence was sufficient to establish an express repudiation.

While claiming a willingness to move *467 forward with the hotel/condominium project, town officials actually refused to move forward and actively sought to undermine **823 the Developer's rights under the contract.
[23] [24] [25] “[I]f a party to a contract expressly or by implication repudiates the contract before the time for his or her performance has arrived, an anticipatory breach is said to have occurred. [Citations.] The rationale for this rule is that the promisor has engaged not only to perform under the contract, but also not to repudiate his or her promise. [Citation.]” ( Romano v. Rockwell Internat., Inc. (1996) 14 Cal.4th 479, 489, 59 Cal.Rptr.2d 20, 926 P.2d 1114.) “An ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 21 express repudiation is a clear, positive, unequivocal refusal to perform. [Citations.]” ( Taylor v. Johnston, supra, 15 Cal.3d at p. 137, 123 Cal.Rptr. 641, 539 P.2d 425.) “Annexing an unwarranted condition to an offer of performance is a refusal to perform. [Citation.]” ( Steelduct Co. v. Henger– Seltzer Co. (1945) 26 Cal.2d 634, 646, 160 P.2d 804.)
Here, the Town refused to perform the Development
Agreement without prior satisfaction of an unwarranted
condition. But the Town asserts that the way it responded to the Developer's demands to perform the Development
Agreement did not amount to a repudiation for three reasons:
(1) compliance with FAA rules and regulations was mandated by the Development Agreement in clause N, (2) the Town
offered to perform the Development Agreement according
to its own good faith interpretation of the agreement, and (3) the Town demonstrated its intention to be bound by the Development Agreement. In connection with this argument, the Town also claims that (4) the trial court erred by allowing the jury to find that the Town repudiated the Development Agreement by entering into inconsistent contracts.

1. Compliance with FAA Rules and Regulations
We have already rejected the Town's first argument. Clause N, relating to FAA rules and regulations, was inapplicable to the grant assurances the Town made to the FAA.

2. Good Faith Interpretation of Contract
The Town's second argument fails because the theory was not proffered to the jury and the evidence, properly viewed on appeal, does not support it. The Town cites a federal court opinion for the proposition that, as long as a party to a contract offers to perform a contract according to its own good-faith understanding of the contract, there is no repudiation, even if the party's understanding is incorrect. ( Pacific Coast Engineering Co. v. Merritt–Chapman & Scott Corp. (9th
Cir.1969) 411 F.2d 889, 894.) Citing other federal authority, the federal court stated: “Generally, when there is a *468 disagreement as to the meaning of terms in a contract, one party's offer to perform in accordance with his interpretation is not itself an anticipatory breach. Lowenstein v. Federal Rubber Co., 85 F.2d 129 (8 Cir.1936). If the offer appears to be made in the good faith belief that the offeror's interpretation is correct, that will be evidence of his continued adherence to the agreement. Mobley v. New York Life Insurance
Co., 295 U.S. 632, 638, 55 S.Ct. 876, 79 L.Ed. 1621
(1935); Kimel v. Missouri State Life Insurance Co., 71 F.2d 921, 923 (10 Cir.1934); Milton v. H.C. Stone Lumber Co., 36 F.2d 583, 588 (S.D.Ill.1928), affirmed 36 F.2d 589 (7 Cir.1929).” ( Pacific Coast Engineering Co. v. Merritt– Chapman & Scott Corp., supra, 411 F.2d at p. 894.)
[26] [27] We reject the Town's reliance on this defense of good-faith contract interpretation because the Town did not proffer this theory to the jury. (See Panopulos v. Maderis (1956) 47 Cal.2d 337, 340–341, 303 P.2d 738 [party may not raise **824 new theory on appeal]; Durkee v. Chino Land & Water Co. (1907) 151 Cal. 561, 569, 91 P. 389 [defendant cannot raise new theory of defense on appeal].) In any event, the evidence does not support the Town's claim that it desired to comply with the Development Agreement in good faith.

While asserting that the Town was willing to abide by the terms of the Development Agreement, town officials were actively working with the FAA to terminate the Developer's right under the Development Agreement to build the hotel/ condominium project.

3. Intent to be Bound by Contract
[28] Likewise, the Town's third argument also fails because it is not supported by the evidence, properly viewed. The Town demonstrated its intention not to be bound by the
Development Agreement. It actively refused to cooperate and sought to have the Developer's rights terminated.

4. Repudiation Based on Inconsistent Contracts
The related argument that the trial court erred by allowing the jury to find that the Town repudiated the Development Agreement by entering into inconsistent contracts finds no support in the record.

The Town states: “The trial court committed prejudicial error for a number of reasons when it directed the jury to make a finding on an inapposite theory of ‘inconsistent contracts,’ under which the Town could be found liable for repudiating the [Development Agreement] by virtue of having accepted ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 22 federal airport funding and thereby subjected itself to FAA's grant assurance requirements.”
[29] *469 A more careful reading of the jury instruction at issue reveals that the court did not allow the jury to base a finding of repudiation on the Town's formation of inconsistent contracts. Instead, the instruction merely informed the jury that a party cannot rely on its assent to one contract to justify breach of another, inconsistent contract. 8 That is not a theory of liability; instead, it is a limitation on a defense. Therefore, contrary to the Town's assertion, the jury was not directed to base a finding of repudiation on a theory of inconsistent contracts.

C. Breach of Unilateral Contract
The Town contends that the Developer's argument that the Town repudiated the purchase option for the land on which the hotel/condominium project would be built fails as a matter of law because a purchase option is a unilateral contract to which the theory of anticipatory breach does not apply. (See Diamond v. University of So. California (1970) 11
Cal.App.3d 49, 53, 89 Cal.Rptr. 302 [anticipatory repudiation does not apply to unilateral contracts.] ) This is simply an attempt by the Town to recharacterize the action as one for breach of the purchase option rather than breach of the Development Agreement—a red herring designed to divert
attention away from the applicable theory of recovery. The attempt is unsuccessful. The theory proffered to the jury was that the Town repudiated the Development Agreement, not just the purchase option. And the Town makes no attempt to establish that the Development Agreement was a unilateral contract.
**825 D. Evidence of Retraction of Repudiation
[30] The Town argues that, even if deputy town manager
Long's June 29, 2004 e-mail can be considered a repudiation of the Development Agreement, town manager Clark's letter two weeks later retracted the repudiation. (See Sackett v.

Spindler (1967) 248 Cal.App.2d 220, 231–232, 56 Cal.Rptr. 435 [repudiation nullified if timely retracted].) However, Clark's letter is not a clear retraction. While it professes the Town's willingness to work with the Developer on FAA compliance issues, it does not offer to move forward with the hotel/condominium project without first resolving FAA compliance issues.
[31] [32] Halfway through the single paragraph in the
Town's opening brief arguing that it retracted any repudiation of the Development Agreement, the *470 Town claims
that the trial court also erred by not instructing the jury on retraction. We need not consider this separate argument appended as it is to another argument. (Cal. Rules of Court, rule 8.204(a)(1)(B).) In any event, the Town fails to provide a citation to the record where the Town requested what it contends would have been a proper instruction on retraction. ( Null v. City of Los Angeles (1988) 206 Cal.App.3d 1528, 1535, 254 Cal.Rptr. 492 [to complain of failure to instruct, party must have requested proper instruction].) Therefore, the Town forfeited review of this issue on appeal.

IV
Damages Award
After obtaining many benefits from the Development
Agreement, including the Developer's airport improvements, the Town repudiated the Development Agreement. The jury awarded the Developer $30 million for the breach. On
appeal, the Town contends that evidence of damages was too speculative to support the jury's award. We conclude that the evidence was not too speculative to support the jury's award. [33] [34] “ ‘Where the prospective profits are the natural and direct consequences of the breach of the contract they may be recovered. Profits are part and parcel of the contract itself, entering into and constituting a portion of its very element; something stipulated for, the right to the enjoyment of which is just as clear and plain as to the fulfillment of any other stipulation. They are presumed to have been taken into consideration and deliberated upon before the contract was made, and formed, perhaps, the only inducement to the arrangement. [Citation.] Damages consisting of the loss of anticipated profits need not be established with certainty. It is sufficient that it be shown as a reasonable probability that the profits would have been earned except for the breach of the contract. [Citations.]’ ” ( Nelson v. Reisner (1958) 51 Cal.2d 161, 171–172, 331 P.2d 17, quoting James v.

Herbert (1957) 149 Cal.App.2d 741, 749, 309 P.2d 91.)
Under this standard, we must determine whether the
Developer presented evidence sufficient to establish a
reasonable probability that it would have realized a $30 ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 23 million profit on the hotel/condominium project if the Town had not breached the Development Agreement. In this inquiry, we construe the evidence in the light most favorable to the judgment. We draw every reasonable inference and resolve every conflict in support of the judgment. ( Campbell v.

Southern Pacific Co., supra, 22 Cal.3d at p. 60, 148 Cal.Rptr. 596, 583 P.2d 121.)
*471 A. Evidence of Damages

1. Town Manager's Estimate of Value of Purchase Option
As noted in the facts above, town manager Clark wrote
an e-mail to town staff in **826 which he noted that
the Developer valued the purchase option at about $20
million. Even with the prospect of litigation over the Town's breach of the Development Agreement, Clark appears to have rejected the alternatives of eminent domain proceedings or negotiations with the Developer because the Town, in Clark's words, didn't have “$10 to $20 million in spare change.” In testimony at trial, Clark said that town officials “didn't know how much it would cost, but we speculated it would be in that range.”

2. Part-owner's Estimate of Value
During the trial, Mark Rosenthal, one of the investors
in the Developer, testified. Rosenthal was president of a company that participated in various real estate ventures, including as developer, manager, and owner. His experience included development or redevelopment of several hotels.

When determining whether to purchase an interest in the hotel/condominium project, Rosenthal considered strategies to eventually exit the investment. He believed that the hotel/condominium project could be sold for $30 million to $40 million if the uncertainties with the Town and the Development Agreement were cleared up.

3. Expert Evidence Concerning Value of
the Hotel/Condominium Project in 2004
The bulk of the evidence concerning damages came from
Richard Maurice Robinson, an expert retained by the
Developer. Robinson is a certified general real estate
appraiser and has 20 years of experience in appraising hotels and resorts. He consults with municipalities to bring in highend hotels. In this process, he customarily makes projections concerning the cost and profit of such hotels. He teaches complex valuation techniques at the University of California, Berkeley.

Based on the plans for the hotel/condominium project and the bids from architectural and construction companies, Robinson assumed that it would cost about $168 million
to build the hotel/condominium project. In addition to the architectural and construction costs, Robinson estimated that the Developer would incur costs of about $45 million for sales and about $9 million for financing. Thus, his estimate for the total cost of the project was about $220 million.
*472 Robinson also estimated the amount of income to
be generated by the project. After studying other similar projects, he calculated a likely price at which the individual units would sell if marketed, as the Developer intended, as a residential development. He added a premium to the price for the advantages of this particular property, but then he discounted the price by 30 percent because of its location at the airport. After taking into account other characteristics of the project, such as the fractional (timeshare) nature of the sales, the intent to associate with a major brand, and the pace at which the units would sell, Robinson estimated a total selling price of $350 million for the entire project.

Subtracting the cost of the project from the income to be generated from the sale of the condominium units, Robinson projected a total of about $130 million in profit over the life of the project.

In addition to this projected net profit from the sale of the condominium units, Robinson estimated that, once the project was fully built and stabilized, it would generate $2.2 million net income per year from the Developer's management of the property, including renting units out when the owners were not occupying them. He arrived at this number using industry standards and guidelines for this type of valuation and rental conditions specific to the Mammoth area.
**827 Robinson concluded that, over the life of the project, the hotel/condominium would result in about $160 million in total profits for the Developer. To arrive at a current (“current” meaning 2004, when the Town breached the
Development Agreement) value of the hotel/condominium
project, Robinson factored in the risks of eventually realizing that profit from a project that had not yet been built. Having ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 24 done so, Robinson estimated that the 2004 value of the hotel/ condominium project was $37 million to $48 million.

4. Order Denying Motion for New Trial
After the jury's verdict awarding $30 million to the Developer, the Town moved for a new trial, asserting, among other things, that the evidence did not support the damages award. The trial court denied the motion. However, in doing so, the court stated: “[W]ere the question of damages predicated solely on the testimony of Mr. Robinson, I would grant a motion for new trial based on the issue of damages, not only for the issues outlined by [counsel for the Town] but also other concerns I had at the time as the testimony came in. However, as is pointed out by [counsel for the Developer], an owner of the property can opine a value of property, and although Mr. Rosenthal did insert a caveat in his discussion of the sale on the order of $30 [million] to *473 $40 million, there was enough basis with that and the various and sundry assessments made by the Town itself as to a condemnation value to justify a jury verdict. So although I would have reached a different verdict, that is not the standard I use, and I do not find there was a basis, therefore, for setting aside the damages award. So the motion for new trial will be denied.” B. Analysis

1. Sufficiency of Evidence
[35] Before we consider the Town's contention that the
evidence of lost profits was too speculative, we must address an argument by the Town concerning the presumption that the verdict is correct. The Town asserts that the trial court's comments on the evidence of damages made during the
hearing on the motion for new trial are significant on appeal.

The court stated that it would have granted the motion for new trial had Robinson's testimony been the only evidence of damages. The Town claims that the court's comments are entitled to “substantial deference.” That is incorrect. We defer to the trial court's factual determination when the court grants a motion for new trial, not when the court denies such a motion. When the court denies the motion, we presume the jury's verdict is correct. (See Lane v. Hughes Aircraft Co. (2000) 22 Cal.4th 405, 412, 93 Cal.Rptr.2d 60, 993 P.2d 388 [presumption of verdict's correctness replaced by deference to trial court's factual determinations when court grants motion for new trial].)
The Town asserts that the evidence does not support a $30 million damages award. 9 Concerning the expert testimony from Robinson, the Town contends that his opinion of
the 2004 value of the hotel/condominium project was too speculative and fails to support the jury's $30 million damages verdict because Robinson's calculations involved too many assumptions and contingencies. To the contrary, despite the assumptions and contingencies stated in Robinson's
testimony, the evidence was **828 sufficient to show a
reasonable probability that the profits would have been realized except for the breach of the Development Agreement. (See Nelson v. Reisner, supra, 51 Cal.2d at pp. 171–172, 331 P.2d 17.)
The Town argues that Robinson made the following
assumptions: (1) all necessary permits would be obtained, (2) environmental review would be completed, (3) estimated construction costs provided by the Developer were accurate, (4) the project would be built within the estimates, (5) the *474 Developer would successfully obtain financing, (6) the Developer would successfully associate with a major brand, and (7) the mix of project units could be sold within the time frame and at projected prices.

The assumptions used by Robinson were intentionally
conservative. They were reasonable, based on Robinson's knowledge of the industry and experience in valuing hotel projects. (1 & 2) The necessary permits and environmental review were simply a matter of forging onward with the
project. There is no evidence that the Developer could not obtain the permits and review. (3 & 4) The estimated costs of construction were based on actual bids submitted to the Developer. (5) There was evidence that the Developer was in the process of successfully obtaining the required financing. (6) Robinson testified that associating with a major brand would not be hard, saying “[b]rands love these projects.” And (7), concerning the time frame for selling all the units, Robinson looked at the rate at which similar properties sold and then reduced it to give a conservative estimate of seven years. This evidence, though predictive, was not speculative.

The Town attacks the discounting of the total estimated profits ($160 million) to determine a current (2004) value of the project ($37 million to $48 million). It contends that this process merely “applied additional speculative assumptions on top of Robinson's flawed lost profits
projections.” (Original italics, fn. omitted.) The Town cites ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 25 Parlour Enterprises, Inc. v. Kirin Group, Inc. (2007) 152 Cal.App.4th 281, 61 Cal.Rptr.3d 243 (Parlour Enterprises ) to support this contention. Neither the contention nor the citation to Parlour Enterprises is persuasive.

Robinson applied accepted valuation principles, factoring in the risks associated with a project yet to be undertaken and reducing the profits projected to be earned over the life of the project to arrive at a current value. The Town's labeling of the accepted practice as including “speculative assumptions” is insufficient to establish that Robinson's estimate of current value was unreasonable.

In Parlour Enterprises, the appellate court reversed the bulk of damages awarded in favor of a franchisor who sued a
franchisee for failure to open ice cream parlors as required by their agreement. ( 152 Cal.App.4th at pp. 283–284, 61 Cal.Rptr.3d 243.) The court's opinion does not reveal the extent of the experience and expertise of the franchisor's damages expert. In any event, the appellate court noted that the franchisor's profit projections formed the basis for the expert's analysis. ( Id. at p. 285, 61 Cal.Rptr.3d 243.) Those projections, however, were unsupported by the evidence.

There was no evidence that whoever made the projections had experience or expertise in predicting income, expenses, or profits. ( Id. at pp. 289–290, 61 Cal.Rptr.3d 243.)
*475 Here, unlike in Parlour Enterprises, there was
evidence to support the projections given to and the
assumptions made by Robinson. The costs to build the project were based on bids and standard costs. And the potential sales were based on comparable developments, with the **829
sales adjusted down because of the specific characteristics of this project. Therefore, Parlour Enterprises is distinguishable because Robinson's testimony was based on professional
expertise developed over two decades of hotel and resort valuation, as well as reliable evidence and assumptions. [36] The Town also argues that Robinson's testimony
concerning the current value of the project is insufficient to support the verdict because there was no evidence
that a willing buyer existed. Such evidence, however, is unnecessary to support a damages award in this context. Lost profits may be proved by means other than the value given by a willing buyer. Expert testimony, alone, may be sufficient if it is supported by substantial evidence and is not speculative. ( Kids' Universe v. In2Labs (2002) 95 Cal.App.4th 870,
885, 116 Cal.Rptr.2d 158.)
Robinson testified at length concerning the discount of the lost profits to estimate a current value. In order to induce a buyer to take on the risks of an unfinished project—risks such as cost overruns, slow sales, or a drop in prices—it would be necessary to set a current value well below the amount of lost profits over the life of the project. Robinson testified concerning the risks and discounts associated with those risks.

While he did not testify that there was a ready and willing buyer, he confirmed that the discounted price was a price, in his experience, that “somebody would pay.”
[37] Therefore, Robinson's testimony, giving the project a current value of $37 million to $48 million, was sufficient to sustain the $30 million damages award. But his was not the only testimony concerning damages.

As did the trial court, we recognize that evidence concerning the amount of damages came from the town manager and one of the Developer's investors. However, the Town asserts that the evidence from those sources also does not support the $30 million damages award. We disagree. The testimony from the investor supports the award, and the evidence of the town manager's statement supports the award to the extent of the statement ($20 million).
[38] An owner of property is generally considered
competent to estimate or offer a lay opinion of the property's value. (Evid.Code, § 813, subd. (a)(2); Sacramento & San Joaquin Drainage Dist. v. Goehring (1970) 13 Cal.App.3d 58, 64, 91 Cal.Rptr. 375.) “In stating an opinion as to the value of his property, an owner is bound by the
same rules of admissibility as is any *476 other witness. [Citation.]” ( Sacramento & San Joaquin Drainage Dist., supra, at p. 65, 91 Cal.Rptr. 375.)
Rosenthal was experienced in developing, managing, and
owning real estate and had developed and redeveloped hotels.

As a part-owner of the Developer, he expressed his opinion that, based on his experience and his review of the hotel/ condominium project, the project could be sold for $30
million to $40 million. This evidence supported the jury's verdict.

Finally, the town manager apparently agreed with a statement that the purchase option, alone, was worth $10 million to ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 26 $20 million. This was also evidence that had a tendency to prove the value of the project. Although it may not have been sufficient by itself to support the damages award, it helped to establish the reasonableness of the rest of the evidence concerning the value of the project.

Accordingly, we conclude that there was substantial,
nonspeculative evidence that the Developer sustained $30 million in damages as a result of the Town's breach of the Development Agreement.
**830 2. Forfeiture of Taxpayer Funds
[39] In an argument raised for the first time in its reply brief, the Town claims that the damage award amounts to an invalid forfeiture of taxpayer funds. The Town forfeited this argument by failing to raise it in a timely manner. (Murray Co. v. Occupational Safety & Health Appeals Bd. (2009) 180 Cal.App.4th 43, 54, fn. 54, 102 Cal.Rptr.3d 513.)
V
Attorney Fees
After judgment was entered, the trial court ordered the Town to pay the Developer $2,361,130 in attorney fees based on a provision of the Development Agreement providing for
attorney fees to the prevailing party in a legal action. The Town separately appealed the attorney fees award.

The Town states that, if we reverse the judgment in favor of the Developer, we must also reverse the attorney fee award, which was based on the Developer's status as the prevailing party. Because we affirm the judgment, and the Town makes no argument for reversing the attorney fees award other than reliance on reversal of the judgment, we also affirm the award of attorney fees.
*477 DISPOSITION
The judgment and the order awarding attorney fees are
affirmed. The Developer (plaintiff) is awarded its costs on appeal. (Cal. Rules of Court, rule 8.278(a)(1).)
We concur: RAYE, P.J., and SCOTLAND, J. **
Opinion
All Citations
191 Cal.App.4th 435, 120 Cal.Rptr.3d 797, 10 Cal. Daily Op.

Serv. 56, 2011 Daily Journal D.A.R. 92
Footnotes
* Retired judge of the Kern County Superior Court, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.
1 The Town cites to documents in the appellant's appendix to support many of its statements of fact in its briefs. However, the Town does not indicate whether and when the documents in the appellant's appendix were admitted as evidence at trial. This presents a problem on appellate review because some of the Town's contentions of error, such as the contention that the Developer failed to establish a breach of the Development Agreement, challenge the effect of evidence introduced at trial. Although the Town fails to identify properly the evidence introduced at trial, we conclude that we may ignore this defect in the briefing because (1) there is no serious dispute concerning the facts and (2) the Town's contentions are without merit, even when viewing them in the light of the facts stated in the Town's briefing. (See Cal. Rules of Court, rule 8.204(e) [allowing court to disregard defects in briefing].)
2 The paragraph states: “The Town has breached the [Development Agreement] and Hotel/Condo Lease[ ] by[,] among other things, (1) failing and refusing to act on, or approve, the Hot Creek Developers [sic ] ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 27 development plans submitted to the Town in October 2000 and again in 2004; (2) taking actions to pursue other Airport expansion projects that could have the effect of depriving the Hot Creek Developers of the benefits of the [Development Agreement] and Hotel/Condo Lease; (3) misrepresenting and failing to disclose material facts to the Hot Creek Developers concerning FAA approval of the Hot Creek Project; (4) seeking the assistance of the FAA to create a pretext for the Town not to approve the Hot Creek Project; (5) breaching the [Development Agreement]'s express and implied covenants of good faith and fair dealing; (6) writing to the Hot Creek Developers on June 29, 2004, stating that the Town ‘will be unable to move forward with your project,’ and insisting on the performance of conditions by the Hot Creek Developers that are inconsistent with the [Development Agreement] and Hotel/Condo Lease; and (7) telling the Hot Creek Developers in 2005 and 2006 that the Town would not allow the project to move forward without conditions and continuing to require the Hot Creek Developers to give up valuable contract rights (including their purchase option) as a condition of moving forward with the project.”
3 The Town also contends that the Developer failed, as a matter of law, to establish futility of administrative review. Because we conclude that a breach of contract action was proper and administrative review could not provide an appropriate remedy, we need not consider further the contention that the Developer failed to establish futility.
4 In a footnote, the Town states as an alternative argument that the Developer was required to file a petition for traditional mandate because town officials refused to perform their ministerial duties under the contract. This argument was not raised below and is barely noted and undeveloped here. We need not consider this newlyconceived footnote contention. (See People v. Freeman (1994) 8 Cal.4th 450, 482, fn. 2, 34 Cal.Rptr.2d 558, 882 P.2d 249 [issues mentioned but not developed as discrete contentions of error not properly raised]; Cal. Rules of Court, rule 8.204(a)(1)(B) [requiring appellant to state each point under a separate heading or subheading].)
5 The Developer asserts that the Town breached the contract when it failed to provide requested assurances that it would meet its obligations under the contract. The Developer claims it is “hornbook law that the failure to provide reasonably requested assurances is a repudiation. [Citations.]” This assertion fails on appeal, however, because this theory was not presented to the jury by instructions at trial. ( Daniels v.

San Francisco (1953) 40 Cal.2d 614, 623, 255 P.2d 785 [appellate court cannot affirm based on theory not presented to jury].)
6 Section four of Resolution 89–41 of the town council of Mammoth Lakes states: “The Town Council acts on behalf of the Town of Mammoth Lakes only by motion, resolution or ordinance duly adopted at a duly noticed meeting of the Town Council. Except for such a motion, resolution or ordinance, no oral or written communication or comments during the course of any Town Council meeting or at any other time by any member of the Town Council or any other person constitutes an action of the Town Council or an act legally attributable to the Town of Mammoth Lakes.”
7 At the end of its opening brief argument that the Developer failed to establish a breach attributable to the Town, the Town appends a two-sentence assertion that the trial court “compounded its prejudicial error” by not instructing the jury using a Town-proposed jury instruction modeled after Resolution 89–41. This assertion makes no sense because the error of which the Town complains is lack of sufficient evidence, not some prejudicially erroneous action of the trial court. Because the Town makes no separate contention, supported by authority and analysis, that the jury was misinstructed, we need not consider further this statement in the opening brief. (See People v. Freeman, supra, 8 Cal.4th at p. 482, fn. 2, 34 Cal.Rptr.2d 558, 882 P.2d 249; Cal. Rules of Court, rule 8.204(a)(1)(B).)
ITEM 18.2. ATTACHMENT 3

Mammoth Lakes Land Acquisition, LLC v. Town of..., 191 Cal.App.4th 435... 120 Cal.Rptr.3d 797, 10 Cal. Daily Op. Serv. 56, 2011 Daily Journal D.A.R. 92 © 2023 Thomson Reuters. No claim to original U.S. Government Works. 28 8 The court instructed: “There are times when a party enters into two inconsistent or mutually exclusive contracts. This occurs when performance of one contract will by necessity require a breach of the other contract. In those circumstances, it is not an excuse to performance of one contract that the party chose to perform the other contract.”
9 The Town attacks the Developer for mentioning that the Developer spent $15 million to $17 million on airport improvements. The Town asserts that the Developer has been able to profit from those improvements. To be clear, the Developer is not claiming the $15 million to $17 million expended on airport improvements as damages in this case.
** Retired Presiding Justice of the Court of Appeal, Third Appellate District, assigned by the Chief Justice pursuant to article VI, section 6 of the California Constitution.

End of Document © 2023 Thomson Reuters. No claim to original U.S. Government Works.

ITEM 18.2. ATTACHMENT 3

Filed 07/03/12 Case 12-32463 Doc 1
ITEM 18.2. ATTACHMENT 3

Filed 07/03/12 Case 12-32463 Doc 1
ITEM 18.2. ATTACHMENT 3

Filed 07/03/12 Case 12-32463 Doc 1
ITEM 18.2. ATTACHMENT 3

1 Stonecreek Industrial Center
Major Design Review
Amendment
CityOfRanchoCordova.org
Darcy Goulart, Planning Manager
April 17, 2023
ITEM 18.2. ATTACHMENT 4

2 Purpose of Tonight’s Meeting
• Present project changes since the April 18, 2022 City Council meeting.
• Receive testimony, continue the public hearing to May 15th, potentially appoint an ad hoc City Council subcommittee (two members), ask any questions, deliberate, and provide staff sufficiently detailed direction to return with final hearing documents and/or plan revisions at the May 15th City Council meeting.

ITEM 18.2. ATTACHMENT 4

3 The applicant is requesting the following:
• A Major Design Review Amendment for development of four light industrial warehouse with office accessory buildings totaling 602,004 square feet that includes parking, lighting, and landscaping located within the Villages of Zinfandel Special Planning Area.

ITEM 18.2.

Project Request
ATTACHMENT 4

4 Site Location within Villages of Zinfandel SPA
Douglas 98
Cordova
Community Pool
Project Site
ITEM 18.2. ATTACHMENT 4

5 Stonecreek Industrial Center History
April 2006 Tentative Parcel Map that included the light industrial zoned area to the west and south.

Divided 3 parcels into 93 parcels.

Feb 2009 Tentative Parcel Map Amendment and Design
Review for the project site into 10 parcels with
10 buildings.
2017 The 2006 Tentative Map expired
June 2019 Tentative Parcel Map and Major Design
Approved for 603,830 sq ft light industrial
buildings
ITEM 18.2. ATTACHMENT 4

6 ITEM 18.2.

Approved 2019 Site Plan
ATTACHMENT 4

7 ITEM 18.2.

Approved 2019 Elevations
ATTACHMENT 4

8 ITEM 18.2.

Proposed Site Plan
ATTACHMENT 4

9 ITEM 18.2.

Proposed Building Elevations April 2022
ATTACHMENT 4

10 ITEM 18.2.

Proposed Elevations
ATTACHMENT 4

11 ITEM 18.2.

Proposed Elevations - Renderings
ATTACHMENT 4

12 ITEM 18.2.

Proposed Landscaping and Screening
ATTACHMENT 4

13 Proposed Vehicle Access
• Access on Baroque is gated -
Emergency services only (eg Fire or
Police)
• North and middle driveway right
in/out only.
• South driveway proposed signal.
• Rerouted trail – 200 feet.

Staff/applicant evaluating options.
• Trucks will use middle and south
access
ITEM 18.2. ATTACHMENT 4

14 Proposed Pedestrian and Bike Trail Connections
SITE
• New 7-foot sidewalk on Zinfandel frontage
• Ped connections to Baroque
• Rerouted Zinfandel trail crossing
Frontage Improvements Area Connections
ITEM 18.2. ATTACHMENT 4

15 ITEM 18.2.

Proposed Trailer Parking
ATTACHMENT 4

16 Project Comparisons: Site Plan
2019 Approved Proposed
ITEM 18.2. ATTACHMENT 4

17 Project Comparisons: Elevations
2019 Approved Proposed
ITEM 18.2. ATTACHMENT 4

18 Project Comparisons: Landscape Plan
2019 Approved Proposed
ITEM 18.2. ATTACHMENT 4

19 Project Comparisons – Approved 2019 vs. Proposed
2019 Approved Project Proposed Project
# of Parcels 18 4
# of Buildings 10 (18 lease or for sale
spaces)
4 Square Footage 603,830 sq. ft. 602,004 sq. ft.

Height 30 ft. – 35 ft. 42 ft. – 45 ft.

Loading Docks 152 144
Parking Spaces 716 stalls 605 stalls
Truck Parking
Spaces
No designated trucks
stalls
85 stalls
Distance of closest
building to
residential
neighborhood
188 ft 306 ft.

ITEM 18.2. ATTACHMENT 4

20 Additional Conditions of Approval
• Truck movements into, out of, and around the loading docks and truck parking area of the project site, shall be prohibited between 10:00PM and 6:00AM. • A new sound/screen wall will be installed at the end of Debina Court and applicant will pay fair share contribution.
• Project will include skylights as well as a roof that is designed to carry solar panels. • Short and long term bicycle parking on-site.
• EV charging infrastructure upon construction and be EV ready as required by the California Building Code.
• Should the building, or a portion of the building, be leased to a use that requires refrigerated trucks, loading dock plugs shall be installed to minimize truck idling.

ITEM 18.2. ATTACHMENT 4

Additional Conditions of Approval
• Provide adequate parking for trucks on stand-by
outside of loading and unloading at the loading
docks.
• To provide adequate infrastructure and electrical
capacity to prepare for future zero-emission future
goods movement including EV charging for future
zero-emission vehicles as well as electrical plugs
at every dock station for refrigerated trucks.
• Provide amenities for truck drivers with restrooms,
vending machines, and air conditioning.
• Provide EV chargers for employee vehicles as well
as design rideshare and public transportation
programs for on-site employees.
• Ensure on-site public address systems are located
and controlled so that noise levels do not exceed
45 dba at property line.
• Project is required to utilize the use of electric tools to the extent feasible including heavy equipment tools and
vehicles.
• Heavy equipment tools and vehicles not powered by
electricity are limited in the amount of time they are able to idle.
• Daily sweeping required of streets during construction along with the enforcement of CA fugitive dust
requirements for construction sites.
• Adopt a formal truck routing plan designed to ensure safe routes to school
• Designate specific spots for on-site employee pick up and drop off.

ITEM 18.2. ATTACHMENT 4

Additional Infrastructure Associated COAs
• Install sidewalk on Zinfandel project frontage.
• Install new signal at south entrance.
• Stripe Zinfandel Drive to six lanes from Spoto Drive to south City limit including transitions.
• Non-passenger and commercial vehicles shall not be permitted to use Baroque Drive or other residential neighborhood roads. • Truck right-out movements to Zinfandel shall be contained in outside lane.
• Separate from this application, staff have begun the design process for traffic calming on Baroque.

ITEM 18.2. ATTACHMENT 4

23 The project is exempt from the California Environmental Quality Act (CEQA) pursuant the Guidelines Section 15183, consistent with Community Plan, General Plan and Zoning. In addition, the project will comply with the Villages of Zinfandel mitigation monitoring plan.

Environmental
ITEM 18.2. ATTACHMENT 4

24 Staff requests that the Council receive testimony,
continue the public hearing to May 15th, potentially
appoint an ad hoc City Council subcommittee (two
members), ask any questions, deliberate, and provide
staff sufficiently detailed direction to return with final hearing documents and plan revisions at the May 15th
City Council meeting.

Recommended Motion
Thank you!
Questions?
ITEM 18.2. ATTACHMENT 4

MEMORANDUM
City Council Staff Report - Page 1 of 2

ITEM 19.1.

DATE: April 17, 2023
TO: Honorable Mayor and Council Members
FROM: Micah Runner, City Manager
SUBJECT: A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO

CORDOVA APPROVING A PURCHASE AND SALE AGREEMENT BY

AND BETWEEN THE CITY OF RANCHO CORDOVA AND ELLIOTT

HOMES FOR THE PURCHASE OF PROPERTIES WITHIN THE
STONE CREEK SPECIFIC PLAN AREA (ASSESSOR’S PARCEL
NUMBERS 072-2360-028, 029 AND 030, AND 072-2860-024, 015, 016, 017 AND 018), PURSUANT TO CEQA GUIDELINE 15061(B)(3)

RECOMMENDATION
Adopt the Resolution.

RESULT OF RECOMMENDED ACTION
Adoption of the Resolution would allow the City Manager to proceed with the execution of documents necessary to purchase and take possession of eight parcels in the Stone Creek Specific Plan Area for a future determined use for an amount not to exceed $14,953,276.

BACKGROUND
The subject properties, consisting of approximately 42.91 acres, are within the Villages of Zinfandel Specific Plan Area Business Professional zone (BP ZSPA) near the Stone Creek Community Park. Although no specified use is projected for the site at this time, the BP ZSPA zone is primarily intended to provide an area of business and professional office uses, and compatible related uses, with adjacent commercial or residential development.

The City and Elliott Homes have been negotiating to resolve issues and disputes concerning the potential development of portions of the property. The issues are detailed in a letter dated April 12, 2023 from Elliott's attorney Chad Roberts notifying the City of aleged default of the Development Agreement. This Purchase and Sale Agreement is part of the City's effort to resolve those disputes.

FISCAL IMPACT AND FUNDING SOURCE
The purchase price for the land is $14,953,276.00. It is anticipated that additional funds, not exceeding $50,000, will be needed for closing costs, including legal and environmental review.

The City’s General Fund reserves will be used to pay for the acquisition costs; specifically, the City's $20 Million General Fund Assigned Fund Balance for Mills Crossing project. Any proceeds from the future disposition of this property will be used to replenish the Mills Crossing

City Council Staff Report - Page 2 of 2

set-aside or other reserve funds.

If purchased, this property will require annual property maintenance and security costs not expected to exceed $65,000 per year ($1,500 per acre per year) until it is developed or disposed of in some other way. A funding source for future improvements to this property has not been identified at this time.

ATTACHMENT(S)

1. Resolution

2. Exhibit A to the Resolution - Rancho Cordova -Purchase and Sale Agreement with Elliott Homes

3. Draft Elliott Notice of Exemption 4.5.23

4. Site Diagram - Elliott Properties

ITEM 19.1. ATTACHMENT 1
Resolution No. XX-2023 Page 1 of 2

CITY OF RANCHO CORDOVA
RESOLUTION NO. XX-2023

A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF RANCHO CORDOVA

APPROVING A PURCHASE AND SALE AGREEMENT BY AND BETWEEN THE CITY OF RANCHO CORDOVA AND ELLIOTT HOMES, INC., FOR THE PURCHASE OF PROPERTY

WITHIN STONE CREEK SPECIFIC PLAN AREA IN THE CITY OF RANCHO CORDOVA (ASSESSOR’S PARCEL NUMBERS: 072-2360-028, 029, 030 AND 072-2860-15, 16, 17, 18, 24), PURSUANT TO CEQA GUIDELINE 15061(b)(3)
WHEREAS, Elliott Homes, Inc. (“Elliott”) owns that certain real property in the City of Rancho Cordova known as Assessor’s Parcel Numbers 072-2360-028, 029, 030, and 072- 2860-15, 16, 17, 18, 24 (“Elliott Property”); and
WHEREAS, the City and Elliott are entering into a Purchase and Sale Agreement (“Purchase and Sale Agreement”) substantially in the form attached as Exhibit A, setting forth the terms and conditions under which the City agrees to purchase the Elliott Property as a condition to that certain Settlement Agreement approved by the City Council on April 17, 2023 to resolve disputes between the City and Elliott concerning the Elliott Property; and WHEREAS, the City has agreed to pay Elliott Fourteen Million Nine Hundred Fifty-Three Thousand Two Hundred Seventy-Six Dollars ($14,953,276) to purchase the Elliott Property; and
WHEREAS, the General Plan land use designations, Villages of Zinfandel Specific Plan requirements and zoning on the Elliott Property, both prior to and after expiration of the Villages of Zinfandel Development Agreement, will provide for a variety of different potential land uses for the Elliott Property; and
WHEREAS, the City has deemed it necessary to unassign the $20 Million Assigned Fund Balance for Mills Crossing to make funds available to purchase the Elliott Property; and WHEREAS, the City has not yet determined how it will use the Elliott Property; and WHEREAS, the City Council finds that the purchase of the Elliott Property is consistent with the City’s current adopted General Plan, Villages of Zinfandel Specific Plan and zoning, irrespective of the expiration or continuation of rights associated with the Villages of Zinfandel Development Agreement and the 2003 Sacramento County Zoning Code; and WHEREAS, the Purchase and Sale Agreement is not a project subject to the California Environmental Quality Act (CEQA) because there is no possibility that the transfer in ownership of the Property may have a significant effect on the environment. (CEQA Guidelines sec. 15061(b)(3).) There are no particular development plans by the City known at this time that would allow for meaningful CEQA review. Any future development plans for the Property will be subject to CEQA review as applicable; and
WHEREAS, the City Council hereby finds that entering into this Purchase and Sale Agreement will benefit the community and is in the best interest of the health, welfare, and

ITEM 19.1. ATTACHMENT 1
Resolution No. XX-2023 Page 2 of 2
safety of the City and its residents due to the facts, among other things, that it will avoid litigation with Elliott Homes, allow for a variety of different potential uses of the property, and increase the ability of the City to approve a mix of more desirable or acceptable uses and development on the property.

NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF RANCHO
CORDOVA DOES RESOLVE AS FOLLOWS:

SECTION 1. The City Council finds and determines that the recitals are true and correct and incorporated herein by this reference.

SECTION 2. The City Council hereby approves the Purchase and Sale Agreement, substantially in the form on file with the City Clerk and attached hereto as Exhibit A.

SECTION 3. The City Manager (or his designee) is hereby authorized to make revisions to the Purchase and Sale Agreement, in consultation with the City Attorney, that do not materially or substantially increase the City obligations thereunder, to execute the Purchase and Sale Agreement, to record a grant deed and to make all approvals, take all actions, and execute all other documents that may be necessary to carry out the intent of this Resolution.

PASSED AND ADOPTED by the City Council of the City of Rancho Cordova on the 17th day of April 2023 by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

ATTEST:

Linda Budge, Mayor
Stacy Leitner, CMC
City Clerk

1 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution

REAL ESTATE PURCHASE AND SALE AGREEMENT
This Real Estate Purchase and Sale Agreement (this “Agreement”) is entered into as of April 18, 2023, by and between Elliott Homes, Inc., an Arizona corporation (“Seller”), and the City of Rancho Cordova, a California municipal corporation (the “City”). The City and the Seller are collectively referred to herein as the “Parties.” Recitals
A. Seller owns that certain real property known as Assessors Parcel Numbers 072- 2360-028, 029, 030 and 072-2860-15, 16, 17, 18, 24 in Rancho Cordova, Sacramento County (the “County”), California, as more particularly described and depicted Exhibit A attached hereto and incorporated herein by this reference (the “Real Property”); B. The City and Seller are entering into this Agreement pursuant to that certain Settlement Agreement entered into between the Parties as of April ___, 2023 (the “Settlement Agreement”); and
C. The City has agreed to pay Seller Fourteen Million Nine Hundred Fifty-Three Thousand Two Hundred Seventy-Six Dollars ($14,953,276) to purchase the Property (defined below) representing Eight Dollars ($8) per square foot of land (the “Purchase Price”); and D. The City Council hereby finds that entering into this Agreement will benefit the community and is in the best interest of the health, welfare and safety of the City.

NOW, THEREFORE, in consideration of the mutual covenants and agreements set forth in this Agreement, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and Seller hereby agree as follows:

Agreement

1. Purchase and Sale. Subject to the terms and conditions set forth in this Agreement, Seller agrees to sell to City, and City agrees to purchase from Seller, the following (collectively, the “Property”):
(a) The Real Property, including all easements, rights (air, water, etc.) and appurtenances thereto, mineral, oil gas and other hydrocarbon substances on or under the Real Property;
(b) Any existing improvements on the Real Property (the “Improvements”); (c) The interest of Seller in and to any and all of the following: governmental licenses, permits, approvals, applications, subdivision maps, entitlements, certificates, rights under development agreements, school fee mitigation agreements, utility and other reimbursement rights, building permit and development allocations, and any other development rights or entitlements relating to the Real Property, and all utility permits (including “will serve” letters) relating to the Real Property (collectively, the “Licenses and Permits”); and (d) The right to use in connection with its development of the Real Property all

2 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
surveys, plans, specifications, engineering, geotechnical, soil and other tests, studies and reports, environmental studies, title policies, and all other intangible rights pertaining to the ownership and/or operation of the Real Property, relating to the Real Property and the Improvements (collectively the “Documents”).

2. Purchase Price. The purchase price for the Property (the “Purchase Price”) is Fourteen Million Nine Hundred Fifty-Three Thousand Two Hundred Seventy-Six Dollars ($14,953,276).

3. Term of Agreement. This Agreement will commence and be effective upon the parties’ execution hereof (the “Effective Date”). This Agreement will remain in full force and effect until the earlier to occur of the following: (i) City, pursuant to Section 5(a) notifies Seller before the Feasibility Period expires, that City will not purchase the Property; (ii) the deadline for Close of Escrow set forth in Section 7(b), or (iii) termination prior to Close of Escrow in accordance with the terms hereof (the “Agreement Term”).

4. Payment of Purchase Price. City shall pay the Purchase Price for the Property as follows:
(a) Within three (3) business days after the Effective Date, City shall deposit into the Escrow established pursuant to Section 6(a) Two Hundred Thousand Dollars ($200,000) (the “Deposit”), plus the full amount of Independent Consideration (as defined in Section 4(b) below). The Escrow Agent shall release to Seller the Independent Consideration in accordance with Section 4(b) below and, upon City’s request, hold the Deposit for City’s benefit in a market-rate interest bearing account. The Deposit shall be fully refundable to City during the Feasibility Period as set forth in Section 5(a). (b) Along with the Deposit, City shall deposit into Escrow the amount of One Hundred Dollars ($100) (the “Independent Consideration”) as independent consideration for Seller’s performance during the Feasibility Period under this Agreement and which shall be retained by Seller in all instances. The Independent Consideration shall be non- refundable to City as independent consideration for the right and option to conduct due diligence extended to City under this Agreement, including, without limitation, the right and option to terminate the Agreement before the Feasibility Period expires. The Independent Consideration shall be released to Seller immediately following City’s deposit of such funds into Escrow. In all instances under this Agreement in which City elects to terminate or is deemed to have terminated the Agreement and any portion of the Deposit is returned to City, Seller shall retain the Independent Consideration when the Deposit or any portion thereof is returned to City. The Independent Consideration shall not be applicable towards the Purchase Price or treated as consideration given by City for any purpose other than stated in this Section 4(b). (c) The full amount of the Deposit shall be applicable to the Purchase Price at Closing. City shall pay the full remaining amount of the Purchase Price in immediately available funds at Close of Escrow.
(d) LIQUIDATED DAMAGES. FROM AND AFTER THE EFFECTIVE

DATE, IF THE SALE OF THE PROPERTY UNDER THE TERMS OF THIS AGREEMENT

IS NOT CONSUMMATED DUE TO A DEFAULT OF BUYER (SUBJECT TO ANY

3 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
APPLICABLE NOTICE AND CURE RIGHTS UNDER SECTION 13(a)), SELLER MAY

INSTRUCT ESCROW AGENT TO CANCEL THE ESCROW AND SELLER WILL THEREUPON BE RELEASED FROM SELLER’S OBLIGATIONS HEREUNDER WITH

RESPECT TO THE PROPERTY (EXCEPT FOR THOSE OBLIGATIONS THAT THIS

AGREEMENT STATES SURVIVE TERMINATION) AND THE DEPOSITS, INCLUDING

ALL DEPOSITS RELEASED TO SELLER AS WELL AS ANY PORTION OF THE

DEPOSITS IN ESCROW AT THE TIME OF THE DEFAULT (INCLUDING ANY INTEREST

EARNED FROM THE INVESTMENT OF THE DEPOSITS) SHALL BE PAID TO AND RETAINED BY SELLER AS LIQUIDATED DAMAGES. BUYER AND SELLER AGREE

THAT, BASED UPON THE CIRCUMSTANCES NOW EXISTING, KNOWN AND

UNKNOWN, IT WOULD BE IMPRACTICAL OR EXTREMELY DIFFICULT TO ESTABLISH SELLER’S DAMAGES IN THE EVENT THE SALE IS NOT CONSUMMATED BY REASON OF BUYER’S DEFAULT. ACCORDINGLY, BUYER AND SELLER AGREE

THAT, IN THE EVENT THE SALE OF THE PROPERTY DOES NOT OCCUR DUE TO A

DEFAULT OF BUYER UNDER THIS AGREEMENT (SUBJECT TO ANY APPLICABLE NOTICE AND CURE RIGHTS UNDER SECTION 13(a)), IT WOULD BE REASONABLE

AT SUCH TIME TO AWARD SELLER LIQUIDATED DAMAGES EQUAL TO THE AMOUNT OF THE DEPOSITS MADE BY BUYER AS OF THE DATE OF BUYER’S

DEFAULT, INCLUDING ALL DEPOSITS RELEASED TO SELLER AS WELL AS ANY PORTION OF THE DEPOSITS IN ESCROW AT THE TIME OF THE DEFAULT. SUCH

RECOVERY OF THE DEPOSITS BY SELLER IS INTENDED TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO SECTIONS 1671, 1676 AND 1677

OF THE CALIFORNIA CIVIL CODE, AND SHALL NOT BE DEEMED TO CONSTITUTE A FORFEITURE OR PENALTY WITHIN THE MEANING OF SECTION 3275 OR SECTION 3369 OF THE CALIFORNIA CIVIL CODE OR ANY SIMILAR PROVISION. IN

ADDITION, BUYER SHALL PAY ALL TITLE AND ESCROW CANCELLATION CHARGES. SELLER’S RETENTION OF THE DEPOSITS IS NOT INTENDED AS A

FORFEITURE OR PENALTY UNDER CALIFORNIA LAW, BUT INSTEAD IS INTENDED

TO CONSTITUTE LIQUIDATED DAMAGES TO SELLER PURSUANT TO THE CALIFORNIA CIVIL CODE. SELLER HEREBY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 3389. SELLER AGREES THAT THESE

LIQUIDATED DAMAGES ARE IN LIEU OF ANY OTHER MONETARY RELIEF OR

OTHER REMEDY, INCLUDING WITHOUT LIMITATION SPECIFIC PERFORMANCE, TO

WHICH SELLER OTHERWISE MIGHT BE ENTITLED UNDER THIS AGREEMENT, AT LAW OR IN EQUITY, RELATING TO BUYER’S BREACH OF THIS AGREEMENT.

NOTWITHSTANDING THE FOREGOING, IN NO EVENT SHALL THIS SECTION 4(d)

LIMIT THE DAMAGES RECOVERABLE BY EITHER PARTY AGAINST THE OTHER

PARTY DUE TO (A) THE OTHER PARTY'S OBLIGATION TO INDEMNIFY SUCH PARTY IN ACCORDANCE WITH THIS AGREEMENT, OR (B) THIRD PARTY CLAIMS.

BY THEIR SEPARATELY EXECUTING THIS SECTION 4(d) BELOW, BUYER AND

SELLER ACKNOWLEDGE THAT THEY HAVE READ AND UNDERSTOOD THE ABOVE

PROVISION COVERING LIQUIDATED DAMAGES, AND THAT EACH PARTY WAS

REPRESENTED BY COUNSEL WHO EXPLAINED THE CONSEQUENCES OF THIS

LIQUIDATED DAMAGES PROVISION AT THE TIME THIS AGREEMENT WAS EXECUTED. BOTH PARTIES ACKNOWLEDGE AND AGREE THAT SAID AMOUNT IS

PRESENTLY A REASONABLE SUM CONSIDERING ALL OF THE CIRCUMSTANCES

EXISTING ON THE DATE OF THIS AGREEMENT, INCLUDING THE RELATIONSHIP

OF THE SUM TO THE RANGE OF HARM TO SELLER THAT REASONABLY COULD BE

4 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution

ANTICIPATED, AND THAT PROOF OF ACTUAL DAMAGES WOULD BE COSTLY AND EXTREMELY DIFFICULT OR IMPRACTICABLE.

Seller’s Initials City’s Initials

5. City’s Decision to Purchase or Not Purchase the Property. (a) City may, in its sole and absolute discretion, without any reason or cause, at any time before the Feasibility Period expires, decide that City will not purchase the Property. If City notifies Seller at any time before the Feasibility Period expires that City will not purchase the Property or if City fails to give Seller a Notice to Proceed (as defined in Section 5(b) below) prior to the expiration of the Feasibility Period, then (i) the Escrow Agent shall promptly return to City the full amount of the Deposit and any interest accrued thereon, (ii) this Agreement shall immediately terminate, and (iii) the parties hereto will have no further obligations to each other (except for those obligations that this Agreement states shall survive termination).
(b) If City, before the Feasibility Period expires, elects to proceed with the transaction hereunder, then City shall issue to Seller a written notice specifying that City elects to proceed with the transaction contemplated by this Agreement (the “Notice to Proceed”). The Notice to Proceed will specifically state (i) that it is “a Notice to Proceed pursuant to Section 5(b) of the Real Estate Purchase and Sale Agreement dated April 18, 2023 between City and Seller.” City’s failure to deliver the Notice to Proceed in accordance with the preceding provisions of this subsection on or before the date the Feasibility Period expires is not a default by City under this Agreement, but such failure will be deemed City’s determination not to proceed with the purchase of the Property and will terminate this Agreement (other than the obligations of City and Seller that expressly survive termination pursuant to another provision hereof).
(c) If City gives the Notice to Proceed at any time prior to the expiration of the Feasibility Period, and if (i) City then fails to timely make, or to instruct Escrow Agent to release to Seller, the Deposit as provided herein, or (ii) for any reason other than Seller’s default or breach of its obligations under this Agreement, Escrow does not close, then, except in the event of Seller’s default or breach, or any other event that entitles City to a refund of the Deposit as specifically set forth in this Agreement, Seller may retain the amount of the Deposit, including the Deposit that has been released from Escrow to Seller, if any, and any portion of the Deposit in Escrow, as of the date of termination. In such event, the parties hereto will have no further obligations to each other, except for those obligations that this Agreement states survive termination.

6. City’s Feasibility/Title Review.
(a) City, without incurring any obligation to purchase the Property, may conduct due diligence regarding the Property for a period beginning on the Effective Date and continuing through 5:00 PM Pacific Time on the date that is ten (10) days after the Effective Date (the “Feasibility Period”). City may extend the Feasibility Period by an additional five

5 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
(5) days with 2 days written notice to Seller. Seller has delivered, or shall within five (5) days after the Effective Date deliver to City or provide City with access to, either through hard copies or through addresses to websites (for publicly available documents), complete copies of all of the following documents and materials to the extent they exist and are in Seller’s possession or control concerning the Real Property, the Improvements, and the improvement, development, remediation, and operation thereof (collectively, the “Reports”): surveys, including boundary, topographic and tree surveys; subdivision reports; covenants, conditions and restrictions; correspondence or other materials; existing title policies; maps; soils reports; environmental, natural resource and biological studies and reports; engineering and architectural studies; tentative subdivision map application and materials, including designs and improvement plans; government zoning letters; specific plans and conditions of approval; “will-serve” letters; development agreements; grading, improvement and landscape plans and similar data; all material relating to earthquake faults and flood zones; any leases and subleases; all service, maintenance, management, brokerage, consulting, advertising and other agreements; all licenses, permits, certificates, entitlements and approvals; property tax bills, utility bills and similar records; any other existing contractual obligations; and all feasibility studies; provided, however, that Seller shall have no obligation hereunder to provide City with any of the following which are collectively referred to herein as “Proprietary Information”: budgets or financial projections, any materials related to the Property that are proprietary to Seller, and any attorney/client communications, except to the extent that the foregoing would reveal a material adverse fact regarding the condition of the Real Property or the Improvements, or the ability to redevelop the Real Property that was not otherwise revealed by the Reports. City shall have the right to contact any governmental and public entities, and any of Seller’s consultants (at City’s cost), regarding the Property. At all times after the Effective Date and throughout the Agreement Term, City, and its employees, representatives, consultants, and agents, will have the right to enter the Real Property during reasonable business hours for all purposes in connection with its due diligence; provided, however, that City shall give Seller at least forty eight (48) hours prior notice of any entry onto the Real Property or any of the Improvements by City or its employees, representatives, consultants, and agents and Seller shall have the right to have a representative present during City’s due diligence activities on the Real Property. City shall keep the Real Property free and clear of any mechanic’s or other liens arising out of City’s entry of the Real Property for due diligence purposes. City may undertake any testing, surveying, drilling, or other analysis of the Real Property that City deems necessary during the Feasibility Period and throughout the Agreement Term, including the right to conduct any subsurface testing of the Real Property; provided that, for any subsurface testing, City shall provide Seller with at least three (3) business days prior written notice, which notice shall include a proposal from the engineer who will perform the invasive testing, outlining the scope of such tests and studies.

Upon the completion or abandonment of any inspection or test, City shall restore the Property to its condition prior to such inspection or test. Seller shall have the right to have a representative present during any such testing; provided, however, that Seller’s inability or failure to have a representative present shall not require City to re-schedule or postpone the testing. City shall not disclose to any third party any results or reports regarding environmental testing performed by City on the Real Property, except as required by applicable law and except for City’s disclosure to its employees, representatives, consultants, agents, and source of capital. Any and all inspections and testing will be at City’s sole cost and expense.

If Escrow does not close as provided in this Agreement or this Agreement is terminated prior to Closing for any reason other than Seller’s breach that Seller does not timely cure, then City

6 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
shall promptly return the Reports to Seller.
(b) Within five (5) business days after the Effective Date, City and Seller shall cause Stewart Title Company (the “Title Company”) to issue and deliver to City a preliminary American Land Title Association title report (“Title Report”) and legible copies of all exceptions to title referred to in the Title Report. By no later than two (2) days before the expiration of the Feasibility Period, City shall notify Seller in writing of any objection to any exception therein (other than current non-delinquent taxes or assessments) or as disclosed in a current ALTA-ACSM Urban Survey of the Real Property (the “Survey”), which Survey City, at City’s sole cost and expense, may cause to be prepared in connection with City’s review of title to the Real Property (collectively, “Title Defects”). City’s failure to provide notice of the Title Defects to Seller on or before such date shall constitute City’s approval of the Title Report. If City timely notifies Seller of its Title Defects, then Seller may notify City in writing within fifteen (15) days thereafter that: (i) Seller will remove the Title Defects on or before the Close of Escrow, or (ii) Seller will not remove any or certain specified Title Defects. Seller’s failure to address any Title Defects in any notice, or failure to give a timely notice as to any Title Defects, shall constitute Seller’s election not to remove such Title Defects. If Seller elects to cure any of the Title Defects, they shall be removed from record title by Seller at Seller’s expense (or otherwise rendered acceptable to City) prior to or at Closing and such Title Defects will not appear on the title insurance policy issued to City by Title Company. If Seller does not provide City with timely written notice that Seller shall remove all Title Defects, then City may, as its sole and exclusive remedy, decline to deliver a Notice to Proceed and this Agreement shall terminate in accordance with Section 5(a) above. If City waives (or is deemed to have waived) any Title Defect, Seller shall have no obligation to remove or otherwise address such Title Defect, and such Title Defect shall be deemed approved. Except for Title Defects Seller removes or is obligated to remove, the exceptions shown on the preliminary title report, and any encumbrances arising from the acts of City or City’s Agents, will be deemed “Permitted Exceptions.” Notwithstanding any of the above, Seller shall remove at or before Closing all monetary liens and monetary encumbrances on the Real Property (that were not caused by City or City’s Agents and except those expressly assumed by City), other than current, nondelinquent taxes or assessments, and City has no obligation hereunder to object to such items in order to obligate Seller to remove such items. Seller shall not after the Effective Date cause or consent to any new encumbrance or exception to title, including any easement, mortgage, or lien, that will remain in effect after the Closing, to be placed on the Real Property without City’s prior written consent.
(i) After the expiration of the Feasibility Period, but prior to the Close of Escrow, City may, at or prior to Close of Escrow, notify Seller in writing (the “Subsequent Title Defects Notice”) of any objection(s) to title exceptions (i) raised by the Title Company after the expiration of the Feasibility Period and prior to the Close of Escrow and (ii) not otherwise known to or caused City prior to the expiration of the Feasibility Period, provided that City must notify Seller of such objection(s) to title within five (5) business days of being made aware of the existence of such exception (each, a “Title Report Update Review Period”). Should City fail to provide a Subsequent Title Defects Notice to Seller prior to the expiration of the Title Report Update Review Period, City shall be deemed to have approved such matters which shall then be considered Permitted Exceptions as defined above. If, however, City timely objects to such new exception, then Seller shall have until 5:00 p.m.

Pacific Time on the next business day after Seller’s receipt of City’s objection in which to

7 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
notify City, in Seller’s sole discretion, either that Seller will remove or will not remove the disapproved exception(s) prior to the Close of Escrow. Seller failure to timely respond to the Subsequent Title Defects Notice means Seller will not remove any exception(s) disapproved by City. If Seller elects not to remove any disapproved exception(s), then City may elect (I) to terminate this Agreement by written notice to Seller or (II) to waive in writing City’s previous disapproval of (and thereby accept) any items that Seller does not elect to remove, in which case such exceptions shall be Permitted Exceptions. If City fails to timely respond to Seller’s election not to remove such items, City shall have waived it objection thereto. If City gives Seller timely written notice of termination, then this Agreement shall thereupon terminate without further action by the parties. If this Agreement is terminated in accordance with this subsection, then, notwithstanding anything to the contrary contained in this Agreement, the Reports shall be returned to Seller, the Termination (defined in Section 14 below) may be recorded, all of the Deposit shall be returned promptly to City and the parties shall have no further obligation to one another hereunder except to the extent any such obligation expressly survives the termination of this Agreement; provided, however, if the termination is due to Seller’s breach, then, in addition to matters set forth in the foregoing sentence, Seller shall reimburse City for all of City’s Costs (as defined in Section 8(c) below) incurred by City through the date of termination. Notwithstanding any of the foregoing, Seller must remove any new exception that violates Seller’s obligations in the last sentence of Section 7(b) above. (c) City shall defend, indemnify and hold harmless Seller from and against any and all losses, expenses, claims, damages and injuries to person or property to the extent caused by the acts or omissions of City, its employees, consultants, contractors and subcontractors on the Real Property in connection with such entry on the Real Property as contemplated herein, including against any mechanic’s, workers’ or other liens on the Property, by reason of the work or activities conducted on the Real Property by or for City; provided, however, City shall not be responsible or liable for any act or omission of Seller or any of Seller’s, agents, representatives, employees, contractors, subcontractors, invitees, or consultants, or for any adverse condition or defect on or affecting the Property not caused by City, its employees, consultants, contractors or subcontractors, but discovered during such inspections.

7. Escrow/Closing.
(a) Immediately upon the parties’ execution of this Agreement, the parties shall open an escrow (the “Escrow”) with Stewart Title Company, 555 Capital Mall Suite 545, Sacramento, CA 95814 (Attn.: Antigone Vaccaro) telephone (916) 441-4950, [email protected] (“Escrow Agent”) for the purpose of facilitating City’s purchase of the Property.
(b) The Escrow will close (“Closing” or “Close of Escrow”) on the date (the “Closing Date”) that is the date that is twenty (20) days after City delivers the Notice to Proceed. (c) Notwithstanding any provision herein to the contrary, the Close of Escrow, and City’s obligations under this Agreement, shall be subject to the satisfaction of the following conditions at or prior to the time prescribed herein (collectively, “City’s Closing Conditions”). Except as specifically set forth below, City has the right to waive any of City’s Closing Conditions in City’s sole discretion.

8 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
(i) At Close of Escrow, the Title Company shall issue and deliver to City a policy of title insurance (the “Title Policy”) for the Real Property, together with the endorsements requested by City, insuring City’s fee simple title to the Real Property in the amount of the Purchase Price, subject only to the Permitted Exceptions, or the Title Company shall have irrevocably committed in writing to issue such Title Policy. City shall have the right to obtain an ALTA extended coverage owner’s Title Policy, provided that (a) City shall bear all costs associated with the issuance of the Title Policy in excess of the cost of a standard coverage owner’s title policy with the endorsements referred to herein, and (b) the Closing shall not be delayed by reason of the issuance of the Title Policy in the extended coverage form rather than in the standard coverage form. At the Closing, Seller shall execute and deliver an owner’s affidavit in the Title Company’s standard form if and to the extent required by the Title Company as a condition to the issuance of the Title Policy in the extended coverage form; (ii) Seller shall have performed, observed and complied with all covenants, agreements, and conditions required by this Agreement to be performed, observed, and complied with on its part, in sufficient time to permit the Close of Escrow; (iii) All representations and warranties of Seller shall be true and correct as of the date hereof and as of the Close of Escrow; (iv) There shall have occurred no material adverse change affecting the physical condition of the Real Property since the end of the Feasibility Period (unless such material adverse change arose from any action or omission of City or its employees, consultants, contractors and subcontractors); and
(v) Seller shall have delivered into the Escrow all of the executed documents required under Section 8(e) below. Each of the foregoing conditions is for City’s sole benefit. If any conditions precedent to City’s obligations set forth above are not satisfied or waived in writing by City at or prior to the times prescribed therein, then, City may delay the Close of Escrow, at no cost to City, for a period of up to thirty (30) days, to allow the parties to cooperate to satisfy the unsatisfied condition, which the parties covenant to cooperate in good faith to accomplish. If such condition(s) remain unsatisfied after such delay, or if City declines to exercise its delay right, the City may either (i) decline to proceed with Close of Escrow and terminate this Agreement, or (ii) if the failed condition is due to a breach or default by Seller, City shall have the rights and remedies set forth below. If City declines to proceed with Close of Escrow, then all rights, obligations and liabilities of Seller and City under this Agreement will terminate (except for any obligations or liabilities under this Agreement which specifically set forth that such obligations or liabilities survive the termination of this Agreement) and Seller shall promptly return all of the Deposit (except the Independent Consideration) to City. If due to Seller’s default under or breach of this Agreement that Seller does not timely cure in accordance with Section 13(a) below, the Close of Escrow does not timely occur or this Agreement is terminated prior to the Closing, then City shall have the right to elect to: (A) terminate this Agreement upon written notice to Seller and Escrow Agent, in which event, (I) Escrow Agent shall automatically return all sums deposited by City and then held by Escrow Agent, (II) Seller shall promptly return to City the full amount of the Deposit previously released to Seller (except the Independent Consideration).
(d) Notwithstanding any provision herein to the contrary, the Close of

9 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
Escrow, and Seller’s obligations under this Agreement, shall be subject to the satisfaction of the following conditions at or prior to the time prescribed herein. Except as specifically set forth below, Seller has the right to waive any of the following conditions in Seller’s sole discretion. (i) City shall have performed, observed and complied with all covenants, agreements, and conditions required by this Agreement to be performed, observed, and complied with on its part, in sufficient time to permit the Close of Escrow; (ii) All representations and warranties of City shall be true and correct as of the date hereof and as of the Close of Escrow; and (iii) City shall have delivered into the Escrow all of the executed documents required under Section 7(f) below.

Each of the foregoing conditions is for Seller’s sole benefit. If any conditions precedent to Seller’s obligations set forth above are not satisfied or waived in writing by Seller at or prior to the times prescribed therein (subject to City’s notice and cure rights under Section 13(a) below), then Seller may decline to proceed with Close of Escrow and terminate this Agreement.

If Seller declines to proceed with Close of Escrow, then all rights, obligations and liabilities of Seller and City under this Agreement will terminate (except for any obligations or liabilities under this Agreement which specifically set forth that such obligations or liabilities survive the termination of this Agreement) and, if the failure to satisfy any condition is due to a breach by City that City does not timely cure in accordance with Section 13(a) below, then Seller shall be entitled to the release of and to retain all of the Deposit as liquidated damages in accordance with Section 4(d).
(e) At or before Closing, Seller shall execute and deliver to the Escrow Agent the following:
(i) A grant deed (the “Deed”) in the form attached hereto as Exhibit C;
(ii) If required by the Title Company, an appropriate mechanic’s lien affidavit;
(iii) A certification as to the non-foreign status of Seller in the form reasonably required by Escrow Agent and City, and a Withholding Exemption Certificate on California Franchise Tax Board Form 593W, both duly executed by Seller; (iv) As applicable, appropriate evidence of Seller’s formation, existence and authority to sell and convey the Property; and (v) Such other documents that the Title Company may reasonably require in connection with issuance of the owner’s policy to City. (f) At or before Closing, City shall execute and deliver to the Escrow Agent the following:

10 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
(i) The balance of the Purchase Price and any additional sums necessary to pay City’s share of the closing costs (subject to probations and adjustments, and a credit for the Deposit);
(ii) City’s authorizing Resolution to purchase the Property. (g) At or before Closing, Seller and City shall each execute counterpart closing statements in a customary form, and such other documents that are reasonably necessary to consummate Closing.

8. Closing Costs/Prorations.
(a) At Closing, personal property taxes, real property taxes and any other assessments against the Property, assessments, and any other items of income and expense with respect to the Real Property, shall be prorated between the parties as of the Closing by the Escrow Agent on the basis of 30-day months.
(b) City shall pay all City and County transfer taxes and recording fees. City shall pay the full premium for the Title Policy, any endorsements thereto, and all Escrow fees and charges. Seller shall pay any delinquent property taxes and other charges/fees collected with the delinquent property taxes. Each party shall be responsible for its own attorneys’ fees and consulting costs.

9. Seller’s Representations and Warranties. Seller makes the following representations and warranties, each of which shall be continuing and shall survive the Closing for a period of six (6) months after the Closing (the “Survival Period”). Whenever a representation or warranty is being made “to Seller’s knowledge,” such qualification indicates that the warranty is being made to the current actual knowledge of , without any implied, imputed or constructive knowledge and without any independent investigation having been made or any implied duty to investigate. No claim for a breach of any representation or warranty of Seller shall be actionable or payable if the breach in question results from or is based on a condition, state of facts or other matter of which City has actual knowledge prior to Closing and City closed Escrow despite such knowledge. Nothing in the foregoing sentence shall preclude City from its remedies for termination of this Agreement before the Closing due to a Seller breach or default that Seller does not timely cure. Seller shall have no liability to City for a breach of any representation or warranty unless written notice containing a description of the specific nature of such breach shall have been given by City to Seller prior to the expiration of the Survival Period and any court action or other legal proceeding shall have been commenced by City against Seller within the Survival Period.

Except as expressly set forth in this Agreement, Seller has not made any warranty or representation, express or implied, written or oral, concerning the Real Property or the Property. (a) Seller has the full right and authority and has obtained any and all consents required to enter into this Agreement and to consummate or cause to be consummated the transactions contemplated hereby. This Agreement has been, and all of the documents to be delivered by Seller at the Closing will be, authorized and properly executed and constitutes, or will constitute, as appropriate, the valid and binding obligation of Seller. Except as disclosed in

11 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
the Title Report, Seller has not entered into any contracts, agreements or understandings, verbal or written, for the sale, transfer or lease of any portion of the Property and no party has a right or option to purchase the Property.
(b) Except to the extent disclosed in any reports or information provided by Seller to City, or otherwise disclosed to City, Seller has no knowledge of, nor has Seller, to Seller’s knowledge, received written notice of any lawsuits, condemnation or eminent domain proceedings, or litigation pending, threatened or which have been filed against Seller that would materially affect the Property or use thereof, or Seller’s ability to perform hereunder. Except to the extent disclosed in any reports or information provided to City, and except for this Agreement, and other documents related to this Agreement, Seller has not entered, and throughout the Agreement Term will not enter, into any agreements that will affect City or the Property after the Closing unless City provides consent to Seller to do so, which consent City may withhold, condition or delay in its sole discretion. (c) Except to the extent disclosed in any reports or information provided by Seller to City or disclosed to City through any physical testing or inspection of the Property, to Seller’s knowledge, (i) there are no Hazardous Substances on, in or under the Real Property in violation of any applicable Environmental Laws relating thereto, (ii) neither Seller nor any prior tenants of Seller have generated, produced, used, reused, sold, stored, transported or disposed of Hazardous Substances on, in or under the Real Property in violation of any applicable Environmental Laws relating thereto, and (iii) there are not currently and have not been in the past any underground or other above-ground storage tanks situated on the Real Property. All capitalized terms used in this Section 9(c) are defined in Exhibit C. (d) Except to the extent disclosed in any reports or information provided by Seller to City or disclosed to City through any physical testing or inspection of the Property, to Seller’s knowledge, Seller is not aware of, nor has Seller received, any notice from any governmental authority that any condition at the Property violates any material provision of applicable building codes, zoning or land use laws, other local, state or federal laws and regulations, or restrictive easements or covenants affecting the Property. (e) Seller is not a “foreign person” within the meaning of Section 1445(f) of the Internal Revenue Code and Seller is not, nor is any person who owns a controlling interest in or otherwise controls Seller, (a) listed on the Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control (“OFAC”), Department of the Treasury, and/or on any other similar list maintained by the OFAC pursuant to any authorizing statute, Executive Order or regulation (collectively, “OFAC Laws and Regulations”); or (b) a person either (i) included within the term “designated national” as defined in the Cuban Assets Control Regulations, 31 C.F.R. Part 515, or (ii) designated under Sections 1(a), 1(b), 1(c) or 1(d) of Executive Order No. 13224, 66 Fed. Reg. 49079 (published September 25, 2001) or similarly designated under any related enabling legislation or any other similar Executive Orders (collectively, the “Executive Orders”). Neither Seller nor any of its principals is (x) a person or entity with which City is prohibited from dealing or otherwise engaging in any transaction by any Anti-Terrorism Law, or that commits, threatens or conspires to commit or supports “terrorism” as defined in the Executive Orders, or (y) is affiliated or associated with a person or entity listed in the preceding clause (x). To Seller’s knowledge, neither Seller nor any of its principals or affiliates, (I) deals in, or otherwise engages in any transaction relating to,

12 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
any property or interests in property blocked pursuant to the Executive Orders or (II) engages in or conspires to engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism Law.

As used in this Agreement, “Anti-Terrorism Law” means the OFAC Laws and Regulations, the Executive Orders and the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat. 272 (2001), as amended.
(g) The entering into this Agreement and the sale of the Property to City does not constitute a violation or breach by Seller of: (i) any contract, agreement, understanding or instrument to which it is a party by which Seller or the Property is subject or bound; or (ii) any judgment, order, writ, injunction or decree issued against or imposed upon them. Seller’s Initials (h) There are no real property leases affecting the Real Property. Except to the extent disclosed in the Preliminary Title Report or any other reports or information provided by Seller to City, to Seller’s knowledge there are no parties in possession or occupancy of any of the Property or any parts thereof other than Seller, nor are there any parties who have any leasehold or other possessory rights with respect to any of the Property or any part thereof other than Seller.
(i) Seller has provided to City all materials and Reports set forth in Section 6(a) in Seller’s possession or control or Seller has made such materials and Reports available to City through either hard copies or website addresses and to Seller’s knowledge all such Reports are complete and do not contain any materially false or misleading information. Seller shall promptly deliver to City any new versions of the Reports and other documents or materials prepared by third parties and provided to Seller (excluding Proprietary Information) that come into Seller’s possession following the date of this Agreement that Seller would have provided to City initially as part of the production from Section 6(a).

10. City’s Purchase “As-Is”. As of the date of the expiration of the Feasibility Period, City will have examined and inspected the Property and will know and be satisfied with the physical condition, quality, quantity, and state of repair of the Real Property in all respects and shall have determined that the same is acceptable to City “AS-IS.” City acknowledges that, except for Seller’s representations, warranties and covenants set forth in this Agreement, City is acquiring the Property in “AS-IS” condition solely in reliance on its own inspections and examination and its own evaluation of the Property. City agrees that, other than as set forth in this Agreement or in any document provided to City by Seller, no representations, statements or warranties have at any time been made by Seller or Seller’s agents as to the physical condition, quality, quantity, or state of repair of the Real Property or related to the operation or prospects for the Real Property. City acknowledges and agrees that during the Feasibility Period: (i) City will review all instruments, records, and documents which City deems appropriate and advisable to review in connection with this transaction, including but not limited to any of the entitlements, architectural drawings, plans, specifications, surveys, building and occupancy permits, and any licenses, contracts, warranties and guarantees relating to the Real Property, and City, by proceeding with this transaction following the expiration of the Feasibility Period, will be deemed to have determined that the same and information and data contained therein and evidenced thereby are satisfactory to City; (ii) City will review all

13 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
applicable laws, ordinances, and governmental regulations (including but not limited to those relative to building, zoning, and land use) affecting the development use, occupancy, or enjoyment of the Real Property; (iii) City will, at its own cost and expense, make its own independent investigation respecting the Real Property and is relying thereon and on the advice of its consultants in entering into this Agreement and, by proceeding with this transaction following the expiration of the Feasibility Period, will be deemed to have determined that the same are satisfactory to City; and (iv) except for Seller’s representations, warranties and covenants herein, City expressly waives and relinquishes any rights it may have under, and specifically releases Seller from any liability with respect to, any laws or regulations requiring disclosure of natural hazards affecting the Real Property except as expressly provided herein.

11. Risk of Loss. Seller shall bear all risk of loss related to the Property prior to Closing. If, at any time prior to Closing, the Property or any substantial and material portion thereof is destroyed or damaged (a “Damage”), or if any governmental entity or agency takes, attempts to take, or commences any proceeding or procedure to take the Real Property, or any substantial and material portion thereof, by eminent domain (a “Taking”), Seller shall promptly notify City. Within fifteen (15) days of receipt of Seller’s notice, City may either (i) terminate this Agreement by delivery of written notice to Seller, whereupon both parties will be relieved of all further obligations under this Agreement (except for those that this Agreement states shall survive termination), the entire amount of the Deposit (except for the Independent Consideration) shall be returned promptly to City, whether or not previously released to Seller; or (ii) continue this Agreement in full force and effect, in which event there shall be no adjustment to the Purchase Price and no return of the Deposit due to such Damage or Taking, but Seller shall assign to City all of Seller’s rights, if any, to any condemnation award and/or insurance proceeds with respect to such Taking or Damage.

12. Brokers/Commissions. City and Seller each represent and warrant to the other that, there are no other real estate brokers, salesman or finders involved in this transaction. If a claim for brokerage fees or commissions in connection with this transaction is made by any broker, salesman or finder claiming to have dealt by, through or on behalf of one of the parties hereto, such party (the “Indemnitor”) shall indemnify, defend and hold harmless the other party hereto (the “Indemnitee”), and Indemnitee’s officers, directors, agents and representatives, from and against any and all liabilities, damages, claims, costs, fees, and expenses whatsoever, including reasonable attorneys’ fees and court costs through all trial and all appellate levels, with respect to said claim for brokerage.

13. Default/Remedies.
(a) Notwithstanding any other provision of this Agreement, a Party shall not be in default or breach of this Agreement or have waived any right hereunder unless (i) as to a failure to timely perform an obligation, such party fails to cure any failure to timely perform such obligation within ten (10) business days after such party receives written notice of same from the other party; provided, however, that with respect to any obligation of either party to timely pay money (including timely making Deposit) or to either party’s obligations to timely deposit into Escrow the documents and other items required for the Close of Escrow, the cure period shall be five (5) business days; and (ii) with respect to any party’s right to exercise or give notice of exercise of any right hereunder, the cure period shall be three (3) business days.

14 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
(b) For any Seller breach of Seller’s representations or warranties first occurring or discovered by City after the Close of Escrow, City shall have the right to pursue recovery from Seller of City’s damages as a result of such breach but only if City files any such claim prior to the expiration of the Survival Period.

14. Miscellaneous.
(a) Assignment. City, without Seller’s prior consent, may assign this Agreement and its rights and obligations hereunder to an entity of which City, or a combination of City and any of City’s owners or shareholders, own an equity interest, or of which City, or any combination of City and any of City’s owners or shareholders, control the management and operations. City shall give Seller written notice of any such assignment and any such assignee shall assume all obligations of City under this Agreement. Neither party may otherwise assign this Agreement, unless such party first obtains the written consent of the other party, which consent such other party shall not unreasonably withhold, condition, or delay. Any assignment of this Agreement by City with Seller’s consent shall release City from the obligations of the City hereunder.
(b) Notices. All notices or other communication provided for under this Agreement shall be in writing, shall be effective upon receipt or refusal to accept delivery (provided that if any such notice is delivered on a Saturday, Sunday or state or national holiday, then such notice shall not be deemed received until the next business day), and shall be (i) delivered personally, (ii) sent by registered or certified mail, return receipt requested, postage prepaid, or by private overnight courier service, addressed to the person to receive such notice or communication at the following address, or (iii) sent via email to the email address set forth below, with a copy of such notice concurrently sent by either of the methods set forth in the preceding clauses (i) or (ii). The address of any party for purposes of notices shall be the address set forth below; provided that any party may change its address by giving notice to the other parties hereto in accordance herewith.

Notice to Seller must be addressed as follows:

Elliott Homes, Inc.

Attn.: Price Walker
Elliott Homes, Inc.
2390 East Bidwell Street
Folsom, CA 95630
Attn.: Chad E. Roberts

HEFNER LAW
2150 River Plaza Drive, #450
Sacramento, CA 95833-4136
T: 916-925-6620
F: 916-925-1127
[email protected]

15 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
Notices to Escrow Officer shall be addressed as follows:
, CA 9
Email:

Notice to City must be addressed as follows:

City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova 95670
Attn: City Manager
Phone: _________________
(c) Entire Agreement/Binding Effect. This instrument and the attached Exhibits constitute the entire agreement between the parties relating to the Agreement. Any prior agreements, promises, negotiations, or representations not expressly set forth in this Agreement are of no force and effect. Any amendment to this Agreement will be of no force and effect unless it is in writing and signed by all parties. This Agreement shall bind and inure to the benefit of the parties to this Agreement and their employees, agents, representatives, heirs, personal representatives, successors, and assigns, except as otherwise provided in this Agreement.
(d) Governing Law/Venue and Jurisdiction/Interpretation. Any litigation arising under this Agreement will be prosecuted in the Superior Court of California, County of Sacramento. The laws of the State of California govern all matters arising out of this Agreement.

All of the parties to this Agreement have participated fully in negotiating and drafting this Agreement, so if any ambiguity or a question of intent or interpretation arises, this Agreement is to be construed as if the parties had drafted it jointly, as opposed to being construed against a party because it was responsible for drafting one or more provisions of this Agreement. In construing this Agreement, the singular forms of nouns and pronouns include the plural, and vice versa and the use of any gender shall include every other gender and all captions and Section headings are to be discarded.
(e) Severability. In the event any interpretation of a provision of this Agreement is determined by appropriate judicial authority to be illegal or otherwise invalid, such provision will be given its nearest legal meaning or reconstrued as deleted as such authority determines and the remainder of this Agreement will continue in full force and effect. (f) Exhibits. All of the Exhibits to this Agreement are incorporated in and made a part of this Agreement.

16 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
(g) Time of Essence. The parties hereby agree that time is of the essence with respect to performance of each of the parties’ obligations under this Agreement. Except as expressly provided otherwise herein, the expiration of any period of time prescribed in this Agreement shall occur at 11:59 p.m. Pacific Time of the last day of the period. The parties agree that in the event that any date on which performance is to occur falls on a Saturday, Sunday or state or national holiday, then the time for such performance will be extended to 11:59 p.m. on the next business day thereafter occurring. (h) Execution. This Agreement may be executed in any number of counterparts, each of which, when executed, will be deemed to be an original, and all of which will be deemed to be one and the same instrument. Seller and City each (i) has agreed to permit the use from time to time, where appropriate, of emailed pdf signatures in order to expedite the transaction contemplated by this Agreement, (ii) intends to be bound by its respective emailed pdf signature, (iii) is aware that the other will rely on the emailed pdf signature, and (iv) acknowledges such reliance and waives any defenses to the enforcement of this Agreement and the documents affecting the transaction contemplated by this Agreement based on the fact that a signature was sent by emailed pdf only. (i) Confidentiality. The parties agree that the terms set forth in this Agreement, and all information exchanged with respect to the Property, are to remain confidential and are not to be revealed or disclosed to any person or party whatsoever, except: (i) with the consent of the other parties; (ii) as may be disclosed to a party’s attorneys, accountants, and other representatives that are involved in connection with the consummation of this transaction; (iii) each party’s investors and/or lenders; (iv) in accordance with the provisions of this Agreement; (v) as may be required by applicable law or court order; (vi) as may be necessary for City to obtain Final Approval of any of the Entitlements or any other necessary or appropriate governmental approvals; (vii) in connection with any litigation between the parties; and (viii) with respect to the information exchanged about the Property, City may disclose same in its sole discretion after the Closing.
(j) Exclusivity. At no time during the Agreement Term shall Seller or any agent or representative of Seller accept any other offer for the purchase and sale of the Property, or any part thereof, nor will they show the Property to any third party for such purposes and at no time after City provides Seller with a Notice to Proceed shall Seller or any agent or representative of Seller solicit, negotiate, encourage, or accept any other offer for the purchase and sale of the Property, or any part thereof.
(k) 1031 Exchange. Notwithstanding anything to the contrary set forth in this Agreement, City acknowledges and agrees that Seller may assign its interest in this Agreement to an exchange facilitator for the purpose of accomplishing an exchange of the Property in a transaction which will qualify for treatment as a tax deferred exchange pursuant to the provisions of Section 1031 of the Internal Revenue Code of 1986 and applicable state revenue and taxation code sections (a “1031 Exchange”). City agrees to cooperate reasonably with Seller in implementing any such assignment and 1031 Exchange, including the execution of any necessary documentation in connection therewith, provided that such cooperation shall not entail any additional expense or liability to City beyond its existing obligations under this Agreement, nor shall City be required to take title to any other property. No such assignment by Seller shall relieve Seller from any of its obligations hereunder, nor shall Seller’s ability to consummate a tax

17 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
deferred exchange be a condition to the performance of Seller’s obligations under this Agreement. The Closing is not predicated or conditioned upon the completion of any 1031 Exchange
(l) No Waiver. Except as otherwise expressly provided in this Agreement, no waiver by any party of the performance or satisfaction of any covenant or condition shall be valid unless in writing and shall not be considered to be a waiver by such party of any other covenant or condition hereunder.
(m) Survival. The provisions of this Agreement shall not merge with the delivery of the Deed but shall, except as otherwise provided in this Agreement, survive the Closing. The Settlement Agreement survives the Closing and the termination of this Agreement.
(n) Captions. Section titles or captions contained in this Agreement are inserted as a matter of convenience only and for reference, and in no way define, limit, extend or describe the scope of this Agreement.
(o) Force Majeure. If either City or Seller cannot perform any of its obligations under this Agreement due to events beyond its control, the time provided for performing such obligations shall be extended by a period of time equal to the duration of such events. Events beyond City’s or Seller’s control include acts of God, pandemics and epidemics, war, civil commotion, terrorism, labor disputes, strikes, earthquakes, fire, flood or other casualty, shortages of labor or material, government regulation or restriction, and weather conditions, but do not include financial inability to perform.

Executed on the date first indicated above.

SELLER:

Elliott Homes, Inc.
an Arizona corporation
By:

Name:

Its:

BUYER:

City of Rancho Cordova,
a California municipal
corporation
By:

18 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
Name:

Its:

LIST OF EXHIBITS
Exhibit A Legal Description/Depiction of Real Property
Exhibit B Form of Deed
Exhibit C Environmental Definitions

19 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution

EXHIBIT A
Legal Description/Depiction of the Real Property
[to be inserted]

20 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution

EXHIBIT B
Form of Deed

RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:

GRANT DEED
The undersigned Grantor declares:

Documentary transfer tax is Exempt under Rev. & Tax Code Section 11922 – Transfer to public entity
FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Elliott Homes, an Arizona corporation (“Grantor”) hereby grants to the City of Rancho Cordova, that certain property (the “Property”) located in the City of Rancho Cordova, County of Sacramento, State of California, as more particularly described on Schedule 1 attached hereto. Together with all and singular the tenements, hereditaments and appurtenances thereunto belonging or in anywise appertaining.

IN WITNESS WHEREOF, the undersigned have executed this Grant Deed dated as of , 20 .

GRANTOR:

Elliott Homes
an Arizona corporation
By:

Name:

Its:

21 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.

ACKNOWLEDGMENT

STATE OF CALIFORNIA )
)

COUNTY OF )
On before me, ,
Notary Public, personally appeared ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument.

I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct.

WITNESS my hand and official seal.

Signature

22 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution
Exhibit 1 to Grant Deed
[insert legal description]

23 ITEM 19.1. ATTACHMENT 2
Exhibit A to the Resolution

EXHIBIT C
Environmental Definitions
As used in Section 10(c) of this Agreement, the following terms have the meanings set forth below:
“Contamination” – the Release or presence of Hazardous Substances in, on, underlying or surrounding the Property (including soils and groundwater), including migration of or depositing of Hazardous Substances onto or under adjoining or neighboring properties or the release or presence of Hazardous Substances from or associated with the Property at any other offsite location.
“Environmental Laws” – any and all federal, state, or local laws (including common law), rules, regulations, orders, ordinances, permits, authorizations, writs, judgments, injunctions, decrees or determinations, whether issued by a court or government agency, in effect during the period of this Agreement relating to the protection of the environment, the Release of any Hazardous Substances into the environment, the generation, management, transportation, storage, treatment and disposal of Hazardous Substances, or the pollution of air, soil, groundwater or surface water (including, without limitation, the Clean Air Act, the Toxic Substance Control Act, the Clean Water Act, the Comprehensive Environmental Response Compensation and Liability Act, and the Resource Conservation and Recovery Act, all as amended, including similar state or local laws).
“Hazardous Substance” – any toxic or hazardous substance, material or waste, pollutant, hazardous substance or wastes, petroleum or petroleum derived substance or waste, radioactive substance, material or waste, asbestos containing materials, or any constituent of any such substance or waste regulated under or defined by or pursuant to any Environmental Law. “Release” – any release, spill, emission, leaking, pumping, injection, deposit, disposal, discharge, dispersal, leaching or migration into the environment or into or out of the Property, including the movement of Hazardous Substances through or in the air, soil, surface water or groundwater of the Property or adjoining properties. 5340662.5

ITEM 19.1. ATTACHMENT 3
1 NOTICE OF EXEMPTION
To: Office of Planning and Research From: City of Rancho Cordova 1400 Tenth Street Community Development Department
Sacramento, CA 95814 2729 Prospect Park Drive
Rancho Cordova, CA 95670
County Clerk-Recorder
Sacramento County
600 8th Street
Sacramento, CA 95814
Project Title: ACQUISITION OF PROPERTY LOCATED WITHIN THE ZINFANDEL

SPECIFIC PLAN AREA
Project Location: Bear Hollow Dr. and North Mather Blvd.

Assessor’s Parcel Number(s): 072-2360-028-0000, 072-2360-029-0000 and 072-2360-030-0000, 072-2860- 024-0000, 072-2860-015-0000, 072-2860-016-0000, 072-2860-017-0000 and 072-2860-018-0000.

Project Description: The City of Rancho Cordova proposes to purchase a vacant, approximately

42.91-acre property located along Bear Hollow Dr. and North Mather Blvd. No construction is proposed for the site and a specific use has not been identified for the site at this time.

Lead Agency: City of Rancho Cordova
Applicant: City of Rancho Cordova
2729 Prospect Park Drive
Rancho Cordova, CA 95670
Exemption Status: Ministerial [Section 21080(b); 15268]; Declared Emergency [Section 21080(b)(3); 15269(a)];
Emergency Project [Section 21080(b)(4); 15269(b)(c)];
General Rule [Section 15061(b)(3)];
Categorical Exemption [Section 15301(a), Existing Facilities]; Approval of Rates, Tolls, Fares, and Charges [Section 21080(b)(8)(D)]; Statutory Exemption [Section 15273(a)(4)].

REASONS WHY THIS PROJECT IS EXEMPT OR DOES NOT REQUIRE FURTHER ENVIRONMENTAL DOCUMENTATION:

The project is exempt under State CEQA Guidelines [Section 15061(b)(3)], which states:
(b) A project is exempt from CEQA if:
(3) The activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA.

ITEM 19.1. ATTACHMENT 3
2 The California Environmental Quality Act (Section 21000, et. seq. of the California Public Resources Code, hereafter CEQA) requires analysis of agency approvals of discretionary “projects.” A “project,” under CEQA, is defined as “the whole of an action, which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment.” The acquisition of property by a public agency is a project as defined by CEQA. Pursuant to CEQA Guidelines Section 15061(b)(3), an activity is covered by the general rule that CEQA applies only to projects which have the potential for causing a significant effect on the environment. The activity is not subject to CEQA where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment.

The City is currently purchasing the property. While future development of the property is assumed, the type and intensity of development cannot be determined, and it would be speculative to identify the type and level of development that would ultimately be constructed on site and the potential effects of that development.

Pursuant to CEQA Guidelines Section 15145, if an impact is too speculative for evaluation the agency not required to, nor should it, engage in speculation and should terminate the discussion. It should be noted that, at such time as development is proposed for the site, a project-level analysis can and will be prepared to disclose potential environmental impacts of that development. However, because the current action would only result in the change of ownership of the property and no physical changes would occur on the site that could result in physical environmental effects, the activity is not subject to CEQA pursuant to CEQA Guidelines section 15061(b)(3).

By __________________________________
Stefan Heisler, Environmental Coordinator
City of Rancho Cordova
(916) 851-8757
April 5, 2023

Site Diagram
Zinfandel Specific Plan Area Parcels Under Consideration N
Parcels under consideration
ITEM 19.1. ATTACHMENT 4