Agenda
PUBLIC FINANCING AUTHORITY, WATER UTILITY AUTHORITY, HOUSING SUCCESSOR, SUCCESSOR AGENCY, AND CITY COUNCIL AUGUST 18, 2026.PDF
Agenda Packet 8/18/2026
AGENDA PACKET - AUGUST 18, 2026.PDF
1. Documents:
1.I.
Documents:
AGENDA
MEETING OF THE PUBLIC FINANCING AUTHORITY, WATER UTILITY AUTHORITY, HOUSING SUCCESSOR,
SUCCESSOR AGENCY, AND CITY COUNCIL
Tuesday, August 18, 2026
AT 5:00 PM
CITY HALL COUNCIL CHAMBERS
11710 TELEGRAPH ROAD
SANTA FE SPRINGS, CA 90670
CITY COUNCIL
Joe Angel Zamora
Annette Rodriguez
Juanita Martin
John M. Mora
William K. Rounds
Mayor
Mayor Pro Tem
Councilmember
Councilmember
Councilmember
CITY MANAGER
René Bobadilla, P.E.
CITY ATTORNEY
Rick Olivarez
CITY STAFF
Assistant City Manager
Deputy City Manager
Fire Chief
Police Chief
Director of Community Development
Director of Finance
Director of Parks & Recreation
Director of Public Works
City Clerk
Nicholas Razo
Arlene Salazar
Michael Kozicki
Paul Espinosa
Cuong Nguyen
Julio Morales
Gus Hernandez
James Enriquez
Maribel Garcia
Notices
This City Council Meeting (“Council”) will be held in person and will meet at City Hall – City Council Chambers, 11710 E. Telegraph Road, Santa Fe Springs, California. The meeting will be live streamed on the City’s YouTube Channel and can be accessed on the City’s website via the following link:
https://santafesprings.gov/city_council/city_council_meetings/index.php Public Comments: The public is encouraged to address City Council on any matter listed on the agenda or on any other matter within its jurisdiction. If you wish to address the City Council on the day of the meeting, please fill out a speaker card provided at the door and submit it to City Clerk staff. You may also submit comments in writing by sending them to the City Clerk's Office at [email protected]. All written comments received by 12:00 p.m. the day of the City Council Meeting will be distributed to the City Council and made a part of the official record of the meeting. Written comments will not be read at the meeting, only the name of the person submitting the comment will be announced. Pursuant to provisions of the Brown Act, no action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances exist. The City Council may direct staff to investigate and/or schedule certain matters for consideration at a future City Council meeting.
Public Access To The Meeting (SB 707)
Members of the public may observe and participate in this meeting remotely using Microsoft Teams.
Join the meeting online:
https://teams.microsoft.com/meet/246714426381931?p=wa5zBRWGPaRMkqH2d1 Meeting ID: 246 714 426 381 931
Passcode: 4Eh2TR26
Dial in by phone:
+1 323-433-2361
Phone Conference ID: 403 375 18#
Members of the public attending remotely will have the same opportunity to observe the meeting and provide public comment as members attending in person. Individuals wishing to address the City Council remotely may us the "Raise Hand" feature within Microsoft Teams. When recognized by the Mayor, please unmute your microphone and state your name for the record before providing your comments.
In-person public comment will continue to be accepted at the Council Chambers during the meeting.
Council Meeting Start Times: If there is a closed session or study session scheduled on the agenda, the regular meeting shall be scheduled to start at 5:00 p.m. and open session shall start at 6:00 p.m. If there is no closed session or study session scheduled on the agenda, the regular meeting shall be scheduled to start at 6:00 p.m.
Please Note: Staff reports and supplemental attachments are available for inspection online and at the office of the City Clerk in City Hall, during regular business hours 7:30 a.m. – 5:30 p.m., Monday – Thursday. Telephone: (562) 868-0511
Americans with Disabilities Act: In compliance with the ADA, if you need special assistance to participate in a City meeting or other services offered by this City, please contact the City Clerk’s Office. Notification of at least 48 hours prior to the meeting or time when services are needed will assist the City staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting or service.
SB 1439: Effective January 1, 2025, City Council Members are subject to SB 1439 and cannot participate in certain decisions for a year before or after accepting campaign contributions of more than $500 from an interested person. The Council Member would need to disclose the donation and abstain from voting.
CALL TO ORDER
ROLL CALL
PUBLIC COMMENTS ON CLOSED SESSION ITEMS
CLOSED SESSION
At this time, the general public may address the City Council on closed session items only. Please be aware that the maximum time allotted for members of the public to speak shall not exceed three (3) minutes per speaker.
State Law prohibits the City Council from taking action or entertaining extended discussion on a topic not listed on the agenda. Please show courtesy to others and direct all of your comments to the City Council.
1. CONFERENCE WITH LEGAL - ANTICIPATED LITIGATION
Pursuant to California Government Code Sections 54956.9(d)(2) and 54569(e)(1)): One Matter
CLOSED SESSION REPORT
REGULAR SESSION - BEGINNING AT 6:00 P.M.
INVOCATION
PLEDGE OF ALLEGIANCE
PRESENTATIONS
2. SANTA FE SPRINGS HOME AND BUSINESS BEAUTIFICATION AWARDS
CHANGES TO AGENDA
PUBLIC COMMENTS ON NON-AGENDA & NON-PUBLIC HEARING AGENDA ITEMS At this time, the general public may address the City Council on both non-agenda and non-public hearing agenda items. Comments relating to public hearing items will be heard during the public hearing. Please be aware that the maximum time allotted for members of the public to speak shall not exceed three (3) minutes per speaker. State Law prohibits the City Council from taking action or entertaining extended discussion on a topic not listed on the agenda. Please show courtesy to others and direct all of your comments to the City Council.
STAFF COMMUNICATIONS ON ITEMS OF COMMUNITY INTEREST
PUBLIC HEARING
3. APPROVAL OF CITY COUNCIL RESOLUTION NO. 10038 APPROVING AN OPERATING COVENANT
AGREEMENT WITH LEGACY SPORTS COMPLEX, LLC FOR THE PROVISION OF ECONOMIC
DEVELOPMENT INCENTIVES IN CONNECTION WITH THE DEVELOPMENT AND OPERATION OF A NEW
INDOOR SPORTS FACILITY
1. Find and determine that adoption of City Council Resolution No. 10038 does not constitute a “project” as defined in CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) Section 15378 and is therefore not subject to environmental review under the California Environmental Quality Act (“CEQA”) (Pub. Res.
Code § 21000 et seq.) pursuant to CEQA Guidelines Section 15060(c)(3); and
2. Adopt City Council Resolution No. 10038 approving an Operating Covenant Agreement between the City of Santa Fe Springs and Legacy Sports Complex, LLC, a California limited liability company ("Legacy"), providing economic development incentives in connection with the development and operation of a new indoor sports facility serving USA Volleyball-sanctioned tournaments and other activities, in consideration of certain covenants and conditions (the “Agreement”); and
3. Authorize the City Manager, in consultation with the City Attorney, to execute the Agreement, including any non-substantive changes necessary to finalize the transaction; and
4. Take such additional, related action that may be desirable.
OLD BUSINESS
REGULAR BUSINESS
4. APPROVAL OF LOAN AGREEMENT AND ACCOMPANYING DOCUMENTS WITH A FOOD PROCESSING COMPANY IN AN AMOUNT UP TO $13,500,000 FOR THE RELOCATION OF ITS FACILITY TO THE CITY OF
SANTA FE SPRINGS
1. Adopt Resolution No. 10037 approving the Loan Agreement between the City of Santa Fe Springs and Juanita's Foods, a California corporation, providing for one or more loans in an aggregate principal amount not to exceed $13,500,000; and
2. Authorize the City Manager, in consultation with the City Attorney and Finance Director, to execute the Loan Agreement, attached Promissory Note, and all other Loan Documents,
3. Further Authorize the City Manager, in consultation with the City Attorney and Finance Director to make any non-substantive changes necessary to finalize the transaction; and
4. Take such additional, related action that may be desirable.
5. RESOLUTION NO. 10034 – ADOPTION OF ANNUAL APPROPRIATION (GANN) LIMIT FOR FISCAL YEAR 2026-2027
The GANN limit establishes the maximum amount of taxes the City is allowed to collect and appropriate.
1. It is recommended that City Council Adopt Resolution No. 10034 setting the appropriation limit for Fiscal Year 2026-2027.
6. HOME OCCUPATION PERMIT APPEAL DECISION - REGARDING A BEAUTY SALON AT 10728 LAKE
CENTER PARK LANE
1. Find and determine that this Project is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines, Section 15061(b)(3) (Common Sense Exemption); and
2. Find and determine that the proposed home occupation meets the criteria set forth in Zoning Code Section 155.635 for the approval of a Home Occupation Permit; and
3. Deny the appeal request and affirm the decision of the Planning Commission to approve the Home Occupation Permit; and
4. Adopt Resolution No. 1035, which incorporates the City Council’s findings and actions regarding this matter; and
5. Take such additional, related action that may be desirable.
CONSENT CALENDAR
All matters listed under the Consent Calendar are considered to be routine. Any items a Councilmember wishes to discuss should be designated at this time. All other items may be approved in a single motion. Such approval will also waive the reading of any Ordinance.
PUBLIC FINANCING AUTHORITY
7. PUBLIC FINANCING AUTHORITY
1. Receive and file the report.
WATER UTILITY AUTHORITY
8. WATER UTILITY MONTHLY REPORT
1. Receive and file the report.
HOUSING SUCCESSOR
SUCCESSOR AGENCY
CITY COUNCIL
9. APPROVAL OF MEETING MINUTES OF THE CITY COUNCIL FOR THE SPECIAL MEETING ON AUGUST 3, 2026
1. Approve the minutes as submitted.
10. APPROVAL OF MEETING MINUTES OF THE HOUSING SUCCESSOR, SUCCESSOR AGENCY AND CITY COUNCIL MEETINGS ON JUNE 2, 2026
1. Approve the minutes as submitted.
11. ADOPTION OF RESOLUTION NO. 10032 SUPPORTING THE NOMINATION OF CENSUS TRACT 06037504200 FOR OPPORTUNITY ZONE DESIGNATION
1. Adopt Resolution No. 10032 supporting the nomination of Census Tract 06037504200 for Opportunity Zone designation under the next phase of the federal opportunity Zone Program; and
2. Authorize the City Manager, or designee, to submit the Opportunity Zones 2.0 – Local Authority Recommendation Form, Resolution No. 10032, and other supporting materials to the California Governor’s Office of Business and Economic Development (“GO-Biz”) for consideration
12. APPROVAL OF AMENDMENT NO. 1 TO THE PROFESSIONAL SERVICES AGREEMENT WITH EKI ENVIRONMENTAL & WATER, INC. FOR GROUNDWATER MONITORING WELL DECOMMISSIONING AND
RELATED ENVIRONMENTAL SERVICES AT THE MC&C IV SITE
1. Find that approval of Amendment No. 1 to the Professional Services Agreement with EKI Environment & Water, Inc. is exempt from the requirements of the California Environmental Quality Act (CEQA) (Pub. Res. Code § 21000 et seq.).
2. Approve Amendment No. 1 to the Professional Services Agreement with EKI Environment & Water, Inc. increasing the contract amount by $25,000, for a revised not-to-exceed amount of $275,000, and authorize the Executive Director to execute the Amendment in substantially the form presented, with such minor modifications as approved by Successor Agency Counsel; and
3. Take such additional, related action as may be desirable.
13. QUARTERLY UPDATE #5 – COMPREHENSIVE ZONING CODE UPDATE PROJECT
1. Receive and file this update on the Comprehensive Zoning Code Update project.
14. APPROVAL OF SECOND AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT WITH PR FIELD SERVICES, INC.
1. Determine that the proposed action is exempt from the California Environmental Quality Act (Pub.
Res. Code § 21000 et seq.) (“CEQA”) pursuant to State CEQA Guidelines (Cal. Code Regs., tit. 14., § 15000 et seq.) Section 15061(b)(3) (Common Sense Exemption); and
2. Approve the final Second Amendment to the Professional Services Agreement with PR Field Services, Inc. for on-call petroleum engineering services (“Second Amendment”), and authorize the City Manager to execute the Second Amendment in substantially the form presented, with such minor modifications as approved by the City Attorney; ando
3. Take such additional, related actions that may be desirable.
15. CALIFORNIA FIXED INCOME TRUST LOCAL GOVERNMENT INVESTMENT POOL
1. Adopt and Approve Resolution authorizing City of Santa Fe Springs to open a Participant account with the California Fixed Income Trust (CalFIT), a joint powers authority (JPA) local government investment pool (LGIP), to invest in shares of the CalFIT Stable Value Pool.
16. POLICE STATION DESIGN AND CONSTRUCTION ADMINISTRATION SERVICES AGREEMENT WITH PBK ARCHITECTS – AWARD OF CONTRACT
1. Find that the procurement of architectural services for the design of a Police Station, Emergency Operation Center, and secured parking lot through the standard Request for Proposal (RFP) solicitation process is impractical because of the need to establish essential police service by March 1, 2028 which requires the design process to start as soon as practicable; and
2. By a 4/5 vote pursuant to Santa Fe Springs Municipal Code Section 34.18(F), dispense with the RFP process and approve the Professional Engineering Services Agreement with PBK Architects at a total fee amount not to exceed $899,000 to provide architectural design and construction administration services for a new Police Station, Emergency Operation Center, and secured police parking lot; and
3. Authorize the City Manager to execute the Agreement with PBK Architects; and
4. Take such additional, related actions that may be desirable to implement the recommended actions.
17. FISCAL YEAR 2024-2025 FINANCIAL STATEMENTS & ANNUAL COMPREHENSIVE FINANCIAL REPORT
1. Receive and file the City’s Annual Comprehensive Financial Report (ACFR) for the Fiscal Year (FY) ending June 20, 2025, and related communications.
APPOINTMENTS TO BOARDS, COMMITTEES, AND COMMISSIONS
COUNCIL COMMENTS/AB1234 COUNCIL CONFERENCE REPORTS
Councilmember announcements; requests for future agenda items; conference/meeting reports. Members of the City Council will provide a brief report on meetings attended at the expense of the local agency as required by Government Code Section 53232.3(d).
ADJOURNMENT
The City Council will adjourn to its next regular meeting on September 1, 2026.
I, Maribel Garcia, City Clerk for the City of Santa Fe Springs hereby certify that a copy of this agenda has been posted no less than 72 hours at the following locations; City’s website at www.santafesprings.gov; Santa Fe Springs City Hall, 11710 Telegraph Road; Santa Fe Springs City Library, 11700 Telegraph Road; and the Town Center Plaza (Kiosk), 11740 Telegraph Road.
Date Posted: August 13, 2026
AGENDA
MEETING OF THE PUBLIC FINANCING AUTHORITY, WATER UTILITY AUTHORITY, HOUSING SUCCESSOR,
SUCCESSOR AGENCY, AND CITY COUNCIL
Tuesday, August 18, 2026
AT 5:00 PM
CITY HALL COUNCIL CHAMBERS
11710 TELEGRAPH ROAD
SANTA FE SPRINGS, CA 90670
CITY COUNCIL
Joe Angel Zamora
Annette Rodriguez
Juanita Martin
John M. Mora
William K. Rounds
Mayor
Mayor Pro Tem
Councilmember
Councilmember
Councilmember
CITY MANAGER
René Bobadilla, P.E.
CITY ATTORNEY
Rick Olivarez
CITY STAFF
Assistant City Manager
Deputy City Manager
Fire Chief
Police Chief
Director of Community Development
Director of Finance
Director of Parks & Recreation
Director of Public Works
City Clerk
Nicholas Razo
Arlene Salazar
Michael Kozicki
Paul Espinosa
Cuong Nguyen
Julio Morales
Gus Hernandez
James Enriquez
Maribel Garcia
Notices
This City Council Meeting (“Council”) will be held in person and will meet at City Hall – City Council Chambers, 11710 E. Telegraph Road, Santa Fe Springs, California. The meeting will be live streamed on the City’s YouTube Channel and can be accessed on the City’s website via the following link:
https://santafesprings.gov/city_council/city_council_meetings/index.php Public Comments: The public is encouraged to address City Council on any matter listed on the agenda or on any other matter within its jurisdiction. If you wish to address the City Council on the day of the meeting, please fill out a speaker card provided at the door and submit it to City Clerk staff. You may also submit comments in writing by sending them to the City Clerk's Office at [email protected]. All written comments received by 12:00 p.m. the day of the City Council Meeting will be distributed to the City Council and made a part of the official record of the meeting. Written comments will not be read at the meeting, only the name of the person submitting the comment will be announced. Pursuant to provisions of the Brown Act, no action may be taken on a matter unless it is listed on the agenda, or unless certain emergency or special circumstances exist. The City Council may direct staff to investigate and/or schedule certain matters for consideration at a future City Council meeting.
Public Access To The Meeting (SB 707)
Members of the public may observe and participate in this meeting remotely using Microsoft Teams.
Join the meeting online:
https://teams.microsoft.com/meet/246714426381931?p=wa5zBRWGPaRMkqH2d1 Meeting ID: 246 714 426 381 931
Passcode: 4Eh2TR26
Dial in by phone:
+1 323-433-2361
Phone Conference ID: 403 375 18#
Members of the public attending remotely will have the same opportunity to observe the meeting and provide public comment as members attending in person. Individuals wishing to address the City Council remotely may us the "Raise Hand" feature within Microsoft Teams. When recognized by the Mayor, please unmute your microphone and state your name for the record before providing your comments.
In-person public comment will continue to be accepted at the Council Chambers during the meeting.
Council Meeting Start Times: If there is a closed session or study session scheduled on the agenda, the regular meeting shall be scheduled to start at 5:00 p.m. and open session shall start at 6:00 p.m. If there is no closed session or study session scheduled on the agenda, the regular meeting shall be scheduled to start at 6:00 p.m.
Please Note: Staff reports and supplemental attachments are available for inspection online and at the office of the City Clerk in City Hall, during regular business hours 7:30 a.m. – 5:30 p.m., Monday – Thursday. Telephone: (562) 868-0511
Americans with Disabilities Act: In compliance with the ADA, if you need special assistance to participate in a City meeting or other services offered by this City, please contact the City Clerk’s Office. Notification of at least 48 hours prior to the meeting or time when services are needed will assist the City staff in assuring that reasonable arrangements can be made to provide accessibility to the meeting or service.
SB 1439: Effective January 1, 2025, City Council Members are subject to SB 1439 and cannot participate in certain decisions for a year before or after accepting campaign contributions of more than $500 from an interested person. The Council Member would need to disclose the donation and abstain from voting.
CALL TO ORDER
ROLL CALL
PUBLIC COMMENTS ON CLOSED SESSION ITEMS
CLOSED SESSION
At this time, the general public may address the City Council on closed session items only. Please be aware that the maximum time allotted for members of the public to speak shall not exceed three (3) minutes per speaker.
State Law prohibits the City Council from taking action or entertaining extended discussion on a topic not listed on the agenda. Please show courtesy to others and direct all of your comments to the City Council.
1. CONFERENCE WITH LEGAL - ANTICIPATED LITIGATION
Pursuant to California Government Code Sections 54956.9(d)(2) and 54569(e)(1)): One Matter
CLOSED SESSION REPORT
REGULAR SESSION - BEGINNING AT 6:00 P.M.
INVOCATION
PLEDGE OF ALLEGIANCE
PRESENTATIONS
2. SANTA FE SPRINGS HOME AND BUSINESS BEAUTIFICATION AWARDS
CHANGES TO AGENDA
PUBLIC COMMENTS ON NON-AGENDA & NON-PUBLIC HEARING AGENDA ITEMS At this time, the general public may address the City Council on both non-agenda and non-public hearing agenda items. Comments relating to public hearing items will be heard during the public hearing. Please be aware that the maximum time allotted for members of the public to speak shall not exceed three (3) minutes per speaker. State Law prohibits the City Council from taking action or entertaining extended discussion on a topic not listed on the agenda. Please show courtesy to others and direct all of your comments to the City Council.
STAFF COMMUNICATIONS ON ITEMS OF COMMUNITY INTEREST
PUBLIC HEARING
3. APPROVAL OF CITY COUNCIL RESOLUTION NO. 10038 APPROVING AN OPERATING COVENANT
AGREEMENT WITH LEGACY SPORTS COMPLEX, LLC FOR THE PROVISION OF ECONOMIC
DEVELOPMENT INCENTIVES IN CONNECTION WITH THE DEVELOPMENT AND OPERATION OF A NEW
INDOOR SPORTS FACILITY
1. Find and determine that adoption of City Council Resolution No. 10038 does not constitute a “project” as defined in CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) Section 15378 and is therefore not subject to environmental review under the California Environmental Quality Act (“CEQA”) (Pub. Res.
Code § 21000 et seq.) pursuant to CEQA Guidelines Section 15060(c)(3); and
2. Adopt City Council Resolution No. 10038 approving an Operating Covenant Agreement between the City of Santa Fe Springs and Legacy Sports Complex, LLC, a California limited liability company ("Legacy"), providing economic development incentives in connection with the development and operation of a new indoor sports facility serving USA Volleyball-sanctioned tournaments and other activities, in consideration of certain covenants and conditions (the “Agreement”); and
3. Authorize the City Manager, in consultation with the City Attorney, to execute the Agreement, including any non-substantive changes necessary to finalize the transaction; and
4. Take such additional, related action that may be desirable.
OLD BUSINESS
REGULAR BUSINESS
4. APPROVAL OF LOAN AGREEMENT AND ACCOMPANYING DOCUMENTS WITH A FOOD PROCESSING COMPANY IN AN AMOUNT UP TO $13,500,000 FOR THE RELOCATION OF ITS FACILITY TO THE CITY OF
SANTA FE SPRINGS
1. Adopt Resolution No. 10037 approving the Loan Agreement between the City of Santa Fe Springs and Juanita's Foods, a California corporation, providing for one or more loans in an aggregate principal amount not to exceed $13,500,000; and
2. Authorize the City Manager, in consultation with the City Attorney and Finance Director, to execute the Loan Agreement, attached Promissory Note, and all other Loan Documents,
3. Further Authorize the City Manager, in consultation with the City Attorney and Finance Director to make any non-substantive changes necessary to finalize the transaction; and
4. Take such additional, related action that may be desirable.
5. RESOLUTION NO. 10034 – ADOPTION OF ANNUAL APPROPRIATION (GANN) LIMIT FOR FISCAL YEAR 2026-2027
The GANN limit establishes the maximum amount of taxes the City is allowed to collect and appropriate.
1. It is recommended that City Council Adopt Resolution No. 10034 setting the appropriation limit for Fiscal Year 2026-2027.
6. HOME OCCUPATION PERMIT APPEAL DECISION - REGARDING A BEAUTY SALON AT 10728 LAKE
CENTER PARK LANE
1. Find and determine that this Project is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines, Section 15061(b)(3) (Common Sense Exemption); and
2. Find and determine that the proposed home occupation meets the criteria set forth in Zoning Code Section 155.635 for the approval of a Home Occupation Permit; and
3. Deny the appeal request and affirm the decision of the Planning Commission to approve the Home Occupation Permit; and
4. Adopt Resolution No. 1035, which incorporates the City Council’s findings and actions regarding this matter; and
5. Take such additional, related action that may be desirable.
CONSENT CALENDAR
All matters listed under the Consent Calendar are considered to be routine. Any items a Councilmember wishes to discuss should be designated at this time. All other items may be approved in a single motion. Such approval will also waive the reading of any Ordinance.
PUBLIC FINANCING AUTHORITY
7. PUBLIC FINANCING AUTHORITY
1. Receive and file the report.
WATER UTILITY AUTHORITY
8. WATER UTILITY MONTHLY REPORT
1. Receive and file the report.
HOUSING SUCCESSOR
SUCCESSOR AGENCY
CITY COUNCIL
9. APPROVAL OF MEETING MINUTES OF THE CITY COUNCIL FOR THE SPECIAL MEETING ON AUGUST 3, 2026
1. Approve the minutes as submitted.
10. APPROVAL OF MEETING MINUTES OF THE HOUSING SUCCESSOR, SUCCESSOR AGENCY AND CITY COUNCIL MEETINGS ON JUNE 2, 2026
1. Approve the minutes as submitted.
11. ADOPTION OF RESOLUTION NO. 10032 SUPPORTING THE NOMINATION OF CENSUS TRACT 06037504200 FOR OPPORTUNITY ZONE DESIGNATION
1. Adopt Resolution No. 10032 supporting the nomination of Census Tract 06037504200 for Opportunity Zone designation under the next phase of the federal opportunity Zone Program; and
2. Authorize the City Manager, or designee, to submit the Opportunity Zones 2.0 – Local Authority Recommendation Form, Resolution No. 10032, and other supporting materials to the California Governor’s Office of Business and Economic Development (“GO-Biz”) for consideration
12. APPROVAL OF AMENDMENT NO. 1 TO THE PROFESSIONAL SERVICES AGREEMENT WITH EKI ENVIRONMENTAL & WATER, INC. FOR GROUNDWATER MONITORING WELL DECOMMISSIONING AND
RELATED ENVIRONMENTAL SERVICES AT THE MC&C IV SITE
1. Find that approval of Amendment No. 1 to the Professional Services Agreement with EKI Environment & Water, Inc. is exempt from the requirements of the California Environmental Quality Act (CEQA) (Pub. Res. Code § 21000 et seq.).
2. Approve Amendment No. 1 to the Professional Services Agreement with EKI Environment & Water, Inc. increasing the contract amount by $25,000, for a revised not-to-exceed amount of $275,000, and authorize the Executive Director to execute the Amendment in substantially the form presented, with such minor modifications as approved by Successor Agency Counsel; and
3. Take such additional, related action as may be desirable.
13. QUARTERLY UPDATE #5 – COMPREHENSIVE ZONING CODE UPDATE PROJECT
1. Receive and file this update on the Comprehensive Zoning Code Update project.
14. APPROVAL OF SECOND AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT WITH PR FIELD SERVICES, INC.
1. Determine that the proposed action is exempt from the California Environmental Quality Act (Pub.
Res. Code § 21000 et seq.) (“CEQA”) pursuant to State CEQA Guidelines (Cal. Code Regs., tit. 14., § 15000 et seq.) Section 15061(b)(3) (Common Sense Exemption); and
2. Approve the final Second Amendment to the Professional Services Agreement with PR Field Services, Inc. for on-call petroleum engineering services (“Second Amendment”), and authorize the City Manager to execute the Second Amendment in substantially the form presented, with such minor modifications as approved by the City Attorney; ando
3. Take such additional, related actions that may be desirable.
15. CALIFORNIA FIXED INCOME TRUST LOCAL GOVERNMENT INVESTMENT POOL
1. Adopt and Approve Resolution authorizing City of Santa Fe Springs to open a Participant account with the California Fixed Income Trust (CalFIT), a joint powers authority (JPA) local government investment pool (LGIP), to invest in shares of the CalFIT Stable Value Pool.
16. POLICE STATION DESIGN AND CONSTRUCTION ADMINISTRATION SERVICES AGREEMENT WITH PBK ARCHITECTS – AWARD OF CONTRACT
1. Find that the procurement of architectural services for the design of a Police Station, Emergency Operation Center, and secured parking lot through the standard Request for Proposal (RFP) solicitation process is impractical because of the need to establish essential police service by March 1, 2028 which requires the design process to start as soon as practicable; and
2. By a 4/5 vote pursuant to Santa Fe Springs Municipal Code Section 34.18(F), dispense with the RFP process and approve the Professional Engineering Services Agreement with PBK Architects at a total fee amount not to exceed $899,000 to provide architectural design and construction administration services for a new Police Station, Emergency Operation Center, and secured police parking lot; and
3. Authorize the City Manager to execute the Agreement with PBK Architects; and
4. Take such additional, related actions that may be desirable to implement the recommended actions.
17. FISCAL YEAR 2024-2025 FINANCIAL STATEMENTS & ANNUAL COMPREHENSIVE FINANCIAL REPORT
1. Receive and file the City’s Annual Comprehensive Financial Report (ACFR) for the Fiscal Year (FY) ending June 20, 2025, and related communications.
APPOINTMENTS TO BOARDS, COMMITTEES, AND COMMISSIONS
COUNCIL COMMENTS/AB1234 COUNCIL CONFERENCE REPORTS
Councilmember announcements; requests for future agenda items; conference/meeting reports. Members of the City Council will provide a brief report on meetings attended at the expense of the local agency as required by Government Code Section 53232.3(d).
ADJOURNMENT
The City Council will adjourn to its next regular meeting on September 1, 2026.
I, Maribel Garcia, City Clerk for the City of Santa Fe Springs hereby certify that a copy of this agenda has been posted no less than 72 hours at the following locations; City’s website at www.santafesprings.gov; Santa Fe Springs City Hall, 11710 Telegraph Road; Santa Fe Springs City Library, 11700 Telegraph Road; and the Town Center Plaza (Kiosk), 11740 Telegraph Road.
Date Posted: August 13, 2026
CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: Maribel Garcia, City Clerk
SUBJECT: CONFERENCE WITH LEGAL - ANTICIPATED LITIGATION DATE: Tuesday, August 18, 2026, 5:00 PM
Pursuant to California Government Code Sections 54956.9(d)(2) and 54569(e)(1)): One Matter
CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: Arlene Salazar, Director of Community Services
SUBJECT: SANTA FE SPRINGS HOME AND BUSINESS BEAUTIFICATION AWARDS DATE: Tuesday, August 18, 2026, 5:00 PM
CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: Cuong Nguyen, Director of Community Development
SUBJECT:
APPROVAL OF CITY COUNCIL RESOLUTION NO. 10038 APPROVING AN OPERATING
COVENANT AGREEMENT WITH LEGACY SPORTS COMPLEX, LLC FOR THE PROVISION OF
ECONOMIC DEVELOPMENT INCENTIVES IN CONNECTION WITH THE DEVELOPMENT AND
OPERATION OF A NEW INDOOR SPORTS FACILITY
DATE: Tuesday, August 18, 2026, 5:00 PM
RECOMMENDATION:
It is recommended that City Council:
1. Find and determine that adoption of City Council Resolution No. 10038 does not constitute a “project” as defined in CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) Section 15378 and is therefore not subject to environmental review under the California Environmental Quality Act (“CEQA”) (Pub. Res. Code § 21000 et seq.) pursuant to CEQA Guidelines Section 15060(c)(3); and
2. Adopt City Council Resolution No. 10038 approving an Operating Covenant Agreement between the City of Santa Fe Springs and Legacy Sports Complex, LLC, a California limited liability company ("Legacy"), providing economic development incentives in connection with the development and operation of a new indoor sports facility serving USA Volleyball-sanctioned tournaments and other activities, in consideration of certain covenants and conditions (the “Agreement”); and
3. Authorize the City Manager, in consultation with the City Attorney, to execute the Agreement, including any non-substantive changes necessary to finalize the transaction; and
4. Take such additional, related action that may be desirable.
FISCAL IMPACT
The Agreement provides Legacy with an incentive package valued at approximately $2,622,000 over the 10-year term, consisting of a $1,500,000 letter of credit backing Legacy's lease obligations to the property owner, a $750,000 upfront payment for eligible tenant improvements, up to $250,000 in youth programming payments over 10 years, and approximately $122,000 in waived permit and related fees. The letter of credit is a contingent City obligation, not a direct cash payment. The City would only be responsible for this amount if Legacy defaults on its lease. Excluding the letter of credit, the City's direct financial subsidy totals approximately $1,122,000. In exchange, the City will receive 25% of all pickleball court revenue collected by Legacy each month for the full term. The project is estimated to generate approximately $3.2 million to $5.7 million in indirect City sales tax revenue over the 10- year term.
BACKGROUND
Legacy is the lessee of property located at 10251 Santa Fe Springs Road, where it is developing a new indoor sports facility that will serve USA Volleyball-sanctioned tournaments and other activities, targeting a Fall 2026 opening. The facility will include more than 20 indoor courts, training and tournament space, a café, and offices, and will also host youth volleyball and basketball tournaments, provide access to pickleball courts on a membership and drop-in basis, and serve as a premier flagship training and practice facility for USA Volleyball's men's and women's national teams in connection with the Los Angeles 2028 Olympic and Paralympic Games.
The project is expected to create approximately 24 temporary construction jobs, 28 full-time permanent jobs, and 41 part-time permanent jobs. The facility is expected to host 40 to 44 tournament weekends per year, drawing approximately 192,000 to 239,000 visitors to the City annually and generating an estimated $600,000 to $725,000 in local spending per tournament weekend. To help capture this spending locally, Legacy will implement a "Stay and Play" policy that requires tournament visitors to book overnight accommodations in hotels located within the City, subject to City Manager approval of the policy's specific terms.
The City Council previously authorized staff to negotiate this incentive package and on July 7, 2026, approved the proposed use of a letter of credit as a component of that package and authorized staff to prepare the final agreements. This item brings forward the complete Operating Covenant Agreement for Council consideration and approval, consistent with that direction. The Agreement provides that the terms and conditions of the letter of credit is subject to subsequent approval by the City Council.
The facility will also provide public benefits beyond tournament activity, including youth clinics, courts for dedicated after-school youth programming, and at least 12 indoor pickleball courts available for use on a club-style membership and drop-in basis. Residents of the City will be provided with free, no-cost pickleball memberships and drop-in reservations with registration.
ANALYSIS
In exchange for the incentive package described above, Legacy commits to a number of operating requirements for a 10-year operating period, which begins once Legacy completes construction and opens the facility.
Throughout the 10-year term, Legacy must continuously operate the facility as planned, maintain its lease on the property, and keep all authorizations needed to serve as a USA Volleyball-sanctioned tournament facility, including without limitation displaying “Team USA” and “USA Volleyball” official branding and logos on the Facility’s interior design elements and keeping office space dedicated to USA Volleyball’s leadership team, coaching staff, and Board of Directors visiting and/or residing in Los Angeles County. The facility cannot be closed for more than 30 days without City Manager approval.
The pickleball courts must remain open on a set schedule (6:00 AM to 1:00 PM on weekdays, with extended hours on weekends without tournaments). The City will receive 25% of all pickleball court revenue collected by Legacy each month. Legacy may operate a club-style paid membership program in connection with the pickleball courts, provided that non-members are still able to utilize the pickleball courts during designated hours on a drop-in basis upon obtaining a reservation and paying any associated fees. City residents will have access to free, no-cost pickleball memberships and drop-in reservations.
Legacy must make good-faith efforts to hire locally for both construction and permanent jobs, and must provide free parking for City staff, City-sponsored events, youth program families, and pickleball members.
If Legacy fails to meet these commitments, the City can require Legacy to correct the default or terminate the Agreement and recover incentive funds already paid. Any recovery is calculated on a prorated basis tied to how many months of the 10-year term Legacy operated in compliance. The longer Legacy operates in good standing, the less the City will recover if a default occurs later in the term. The Agreement also includes standard insurance and liability protections requiring Legacy to carry insurance and indemnify the City against claims related to the facility.
ENVIRONMENTAL
Approval of the Agreement does not itself approve construction of the tenant improvements described above.
Construction of the facility remains subject to the City's standard land use and building permit process, including any required environmental review under the California Environmental Quality Act (CEQA), which will occur separately as part of that process.
Accordingly, approval of the Agreement is not subject to environmental review pursuant to CEQA and CEQA Guidelines because it does not constitute a “project” as defined by CEQA Guidelines Section 15378 and is therefore not subject to CEQA pursuant to CEQA Guidelines Section 15060(c)(3). The Agreement does not approve construction or development or otherwise result in any activity that is reasonably foreseeable to result in an environmental impact. Therefore, no further action is required pursuant to CEQA at this time.
SUMMARY/NEXT STEPS
Upon adoption of the Resolution and associated CEQA findings, staff will finalize and execute the Agreement.
Legacy will have 6 months to complete construction and open the facility, at which point the 10-year operating period and associated incentive payments and covenants will begin. Staff will monitor Legacy's ongoing compliance with the Agreement, including without limitation the pickleball revenue share, youth programming, and Stay and Play requirements, throughout the term.
ATTACHMENTS
1. Attachment 1 - Public Hearing Notice
2. Attachment 2 – City Council Resolution No. 10038
a. Exhibit “A” - Operating Covenant Agreement between the City of Santa Fe Springs and Legacy Sports Complex, LLC
3. Attachment 3 – Government Code Section 53083 Report
Attachments
Attachment No. 1 - Legacy Sports Public Hearing Notice.pdf Attachment No. 2 - Resolution No. 10038 Legacy Operating Covenant Agreement Attachment No. 3 - Government Code 53083 Report.pdf
THE CITY COUNCIL OF THE CITY OF SANTA FE SPRINGS
NOTICE OF PUBLIC HEARING
NOTICE IS HEREBY GIVEN, pursuant to California Government Code Section 53083, that the City Council of the City of Santa Fe Springs will hold a public hearing on Tuesday, August 18, 2026 at 6:00 p.m., or as soon thereafter as the matter can be heard, in the City Council Chambers located at 11710 E. Telegraph Road, Santa Fe Springs, California 90670 to consider an economic development subsidy to be provided under an Operating Covenant Agreement (hereinafter, “Agreement”) between the City of Santa Fe Springs (hereinafter, “City”) and Legacy Sports Complex LLC (hereinafter, “Legacy Sports”).
The City desires to stimulate economic development within the City by entering into an Agreement for the City to provide financial assistance to Legacy Sports for the development and operation of the new USA Volleyball headquarters and indoor sports facility located at 10251 Santa Fe Springs Road (hereinafter, “Facility”). The Facility is expected to include more than 20 indoor volleyball courts, training and tournament space, indoor public pickleball courts, a café, and offices. The Facility will host youth volleyball and basketball tournaments and serve USA Volleyball’s men’s and women’s national teams in connection with the Los Angeles 2028 Olympic and Paralympic Games.
The following information will be posted on the City’s website and remain available for the entire term of the economic development subsidy, in accordance with California Government Code Section 53083.
1. The name and address of all corporations or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy, if applicable.
The beneficiary is Legacy Sports Complex LLC, a California limited liability company, principally located at 8529 Camino Naranjo Road, Corona, California 92883.
2. The start and end dates and schedule, if applicable, for the economic development subsidy.
The economic development subsidy will start when the Agreement is approved by the City Council and executed by the parties and will continue in effect for a term of 10 years.
3. A description of the economic development subsidy, including the estimated total amount of the expenditure of public funds, or of revenue lost to, the local agency, as a result of the economic development subsidy.
The City will provide Legacy Sports financial assistance totaling approximately $2,622,000 in value to develop and operate the Facility, in consideration of certain covenants and restrictions detailed in the Agreement. The Agreement provides for the following economic development subsidies:
• A letter of credit of up to $1.5 million as security for Legacy’s lease obligations to the owner of the Facility, Centris Telegraph Point, LLC. City will be financially backing the letter of credit as guarantor.
• Payment of up to $750,000 for tenant improvements to the Facility. • Payment of up to $25,000 annually during the 10-year term (up to $250,000 total) to support youth programing at the Facility.
• Waiver of applicable permit, plan-check, conditional use permit, and related fees, which is estimated to total approximately $122,000 in value.
In addition to the financial subsidies above, City will also partner with Legacy Sports for marketing and promotion for the Los Angeles 2028 Olympic and Paralympic Games.
4. A statement of the public purposes for the economic development subsidy.
The Facility is anticipated to host approximately 40 to 44 tournament weekends annually, attracting an estimated 4,800 to 5,400 visitors to the City per tournament weekend and approximately 192,000 to 239,000 visitors each year. Tournament visitors are projected to generate approximately $600,000 to $725,000 in local spending per tournament weekend.
This recurring activity would support City lodging, restaurants, retailers, fuel stations, and the overall business community. The Agreement will include a “Stay and Play” requirement, which will further support the local economy by directing tournament-related lodging demand to hotels located in the City when rooms are available.
The Agreement also provides for direct benefits to City residents. The Facility will offer youth programing and public access to indoor pickleball courts. Additionally, Legacy Sports is committed to hiring locally for tenant improvement work and future full-time jobs, to the extent feasible.
Providing the City-backed letter of credit will allow Legacy Sports to preserve capital for construction, equipment, staffing, and operating expenses. The City’s tenant improvement contribution and fee waivers will assist Legacy Sports in completing the improvements necessary to begin operations at the Facility and provide the public pickleball courts. The annual payments for youth programing will support recreational opportunities for children and families in the community.
5. Projected tax revenue to the local agency as a result of the economic development subsidy.
During the 10-year term of the Agreement, the City is projected to receive approximately $3.2 million to $5.7 million in sales tax revenue.
6. Estimated number of jobs created by the economic development subsidy, broken down by full-time, part-time, and temporary positions.
The development and operation of the new Facility is expected to create at least 50 fulltime jobs.
All interested persons are invited to attend this hearing and express opinions on the matter above.
If this matter is subsequently challenged in court, the challenge may be limited to only those issues raised at the public hearing described in this Notice or in written correspondence delivered to the Office of the City Clerk at, or prior to, the public hearing. For additional information, please contact the Community Development Department at (562) 868-0511 ext. 7550 or [email protected].
RESOLUTION NO. 10038
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA FE
SPRINGS APPROVING AN OPERATING COVENANT AGREEMENT
WITH LEGACY SPORTS COMPLEX, LLC FOR THE PROVISION OF
ECONOMIC DEVELOPMENT INCENTIVES IN CONNECTION WITH THE
DEVELOPMENT AND OPERATION OF A NEW 121,000 SQUARE FOOT
INDOOR SPORTS FACILITY IN CONSIDERATION OF CERTAIN
COVENANTS AND CONDITIONS
WHEREAS, Legacy Sports Complex, LLC (“Legacy”) is the lessee of that certain real property located at 10251 Santa Fe Springs Road (the “Property”); and WHEREAS, Legacy, an affiliate of USA Volleyball, is in the process of developing a new indoor sports facility at the Property that will serve as a 121,000-square-foot volleyball tournament facility for USA Volleyball-sanctioned tournament play for all levels, youth through professional/national Teams, and include office space dedicated to USA Volleyball's leadership team, coaching staff, and Board of Directors in Los Angeles County (“Facility”); and
WHEREAS, the Facility will host volleyball and basketball tournaments; support afterschool youth programing; provide indoor pickleball courts, training space, and a café; and serve as a Los Angeles County flagship training and practice facility for USA Volleyball’s men’s and women’s national teams in connection with the Los Angeles 2028 Olympic and Paralympic Games; and
WHEREAS, the development and operation of the Facility is expected to generate significant economic and community benefits to the City, including but not limited to: (i) the creation of local jobs, including approximately 24 temporary construction jobs, 28 fulltime permanent jobs, and 41 part-time permanent jobs; (ii) approximately $3.2 million to $5.7 million in sales tax revenue; (iii) indirect economic activity benefiting nearby businesses; and (iv) enhancement of community amenities that support local quality of life; and
WHEREAS, the Facility is anticipated to host approximately 40 to 44 tournament weekends annually, attracting an estimated 4,800 to 5,400 visitors to the City per tournament weekend and approximately 192,000 to 239,000 visitors each year, which is projected to generate approximately $600,000 to $725,000 in local spending per tournament weekend; and
WHEREAS, recurring tournament visitor activity will support City lodging, restaurants, retailers, fuel stations, and the overall business community; for example, Legacy will implement a “Stay and Play” requirement which will further support the local economy by directing tournament-related lodging demand to hotels located in the City when rooms are available; and
WHEREAS, to support these goals and facilitate the economic development of the City, the City seeks to ensure the construction and continued operation of the Facility over a period of 10 years by entering into the Operating Covenant Agreement (“Agreement”), attached hereto as Exhibit “A”, to provide financial assistance to Legacy through certain incentives totaling approximately $2,622,000 in value, in consideration of certain covenants and conditions detailed therein; and
WHEREAS, the proposed Agreement is not subject to environmental review pursuant to the California Environmental Quality Act (“CEQA”) (Pub. Res. Code § 21000 et seq.) and CEQA Guidelines (Cal. Code Regs., tit. 14, § 15000 et seq.) because it does not constitute a “project” as defined by CEQA Guidelines Section 15378 and is therefore not subject to CEQA pursuant to CEQA Guidelines Section 15060(c)(3) as the Agreement does not approve construction or development or otherwise result in any activity that is reasonably foreseeable to result in an environmental impact; and WHEREAS, the City Council of the City of Santa Fe Springs (“City Council”) finds and determines that operation of the Facility, the generation of new jobs, the anticipated increase in sales tax revenue, provision of community recreational benefits, and stimulation of surrounding commercial activity are vital and in the best interests of City and the health, safety, and welfare of its residents, and are in accord with the public purposes and provisions of applicable federal, state and local laws and requirements, and that the imposition of the operating covenants and use restrictions set forth in the Agreement upon Legacy’s operations at the Facility as consideration for the economic development incentives constitutes a valid public purpose.
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA FE SPRINGS HEREBY FINDS, DETERMINES AND RESOLVES AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated in full, herein.
SECTION 2. The City Council hereby approves the Agreement by and between the City and Legacy for the provision of economic development incentives in connection with the development and operation of a new 121,000 square foot indoor sports facility in consideration of certain covenants and conditions detailed therein.
SECTION 3. The City Manager is hereby authorized to execute the Agreement attached hereto as Exhibit “A”, in substantially the form presented, and to take any and all actions necessary to carry out the purposes of this Resolution, including without limitation authorizing any non-substantive changes to the Agreement necessary to finalize the transaction in consultation with the City Attorney.
SECTION 4. The City Council hereby determines that approval of the Agreement is not subject to environmental review pursuant to CEQA and CEQA Guidelines because it does not constitute a “project” as defined by CEQA Guidelines Section 15378 and is therefore not subject to CEQA pursuant to CEQA Guidelines Section 15060(c)(3). The Agreement does not approve construction or development or otherwise result in any activity that is reasonably foreseeable to result in an environmental impact. Construction of the Facility remains subject to future City approvals and any environmental review required under CEQA will be considered during that future approval process. Therefore, no further action is required pursuant to CEQA at this time.
SECTION 5. lf any section, subsection, phrase or clause of this Resolution is for any reason found to be invalid, such section, subsection, phrase or clause shall be severed from, and shall not affect the validity of, all remaining portions of this Resolution that can be given effect without the severed portion.
SECTION 6. This Resolution shall become effective immediately upon its adoption.
SECTION 7. The City Manager, or designee, are hereby authorized and directed to take all actions necessary or advisable to give effect to the transactions contemplated by this Resolution.
SECTION 8. The City Clerk of the City of Santa Fe Springs shall certify as to the adoption of this Resolution.
ADOPTED and APPROVED this 18TH day of August 2026 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
____________________________________
Joe Angel Zamora, Mayor
ATTEST:
___________________________
Maribel Garcia, City Clerk
EXHIBIT A
(Please see Attached)
1 OPERATING COVENANT AGREEMENT
THIS OPERATING COVENANT AGREEMENT (“Agreement”) is made and entered into this _____ day of _________________, 2026 by and between the CITY OF SANTA FE SPRINGS, a California municipal corporation (“City”) and LEGACY SPORTS COMPLEX, LLC, a California limited liability company (“Legacy”). City and Legacy are sometimes referred to in this Agreement individually as a “Party” or collectively as the “Parties.” City and Legacy enter into this Agreement with reference to the following recited facts (each a “Recital”):
RECITALS
A. Legacy is the lessee of that certain real property located at 10251 Santa Fe Springs Road, as more specifically described in the Legal Description attached hereto and incorporated herein as Exhibit “A” (the “Property”); and
B. Legacy is in the process of developing a new 121,000 square foot indoor sports facility at the Property that will serve as a volleyball tournament facility for USA Volleyballsanctioned tournament play for all levels, youth through professional/national teams, and include office space dedicated to USA Volleyball's leadership team, coaching staff, and Board of Directors in Los Angeles County (the “Facility”); and
C. The Facility will also host youth volleyball and basketball tournaments, provide access to indoor pickleball courts on a membership and drop-in basis, and serve as a Los Angeles County flagship training and practice facility for USA Volleyball’s men’s and women’s national teams in connection with the Los Angeles 2028 Olympic and Paralympic Games (collectively, Legacy’s “Operations”); and
D. Certain improvements to the Facility are necessary to support Legacy’s Operations, including without limitation the construction of indoor volleyball courts, training and tournament space, indoor pickleball courts, a café, and offices (collectively, the “Tenant Improvements”); and
E. The development and operation of the Facility is expected to generate significant economic and community benefits to the City, including but not limited to: (i) the creation of local jobs, including approximately 24 temporary construction jobs, 28 full-time permanent jobs, and 41 part-time permanent jobs; (ii) approximately $3.2 million to $5.7 million in sales tax revenue; (iii) indirect economic activity benefiting nearby businesses; and (iv) enhancement of community amenities that support local quality of life; and
F. The Facility is anticipated to host approximately 40 to 44 tournament weekends annually, attracting an estimated 4,800 to 5,400 visitors to the City per tournament weekend and approximately 192,000 to 239,000 visitors each year, which is projected to generate approximately $600,000 to $725,000 in local spending per tournament weekend; and G. Recurring tournament visitor activity will support City lodging, restaurants, retailers, fuel stations, and the overall business community; for example, Legacy will implement a “Stay and Play” requirement which will further support the local economy by directing tournament-related lodging demand to hotels located in the City when rooms are available; and 2 H. The Facility will also directly support community recreation opportunities by offering youth programing and access to indoor pickleball courts; and I. To support these goals and facilitate the economic development of the City, the City seeks to ensure the construction and continued operation of the Facility over a period of 10 years by providing financial assistance to Legacy through certain incentivestotaling approximately $2,622,000 in value, in consideration of certain covenants and conditions detailed herein; and J. By its approval of this Agreement, the City Council of the City of Santa Fe Springs has found and determined that the operation of the Facility, the generation of new jobs, the anticipated increase in sales tax revenue, provision of community recreational benefits, and stimulation of surrounding commercial activity are vital and in the best interests of City and the health, safety, and welfare of its residents, and are in accord with the public purposes and provisions of applicable federal, state and local laws and requirements, and that the imposition of certain operating covenants and use restrictions upon Legacy’s Operations at the Facility as consideration for the economic development incentives constitutes a valid public purpose.
NOW, THEREFORE, in consideration of the mutual promises and covenants contained herein, and for such other good and valuable consideration, the sufficiency of which is hereby acknowledged, the Parties agree as follows:
AGREEMENT
ARTICLE 1
APPROVALS; COMPLETION DATE; OPERATING PERIOD; TERM
1.1 Governmental Permits and Approvals. The benefits and obligations set forth herein are conditional upon Legacy obtaining and maintaining compliance with all necessary permits and approvals from the City and any other applicable local, state, or federal agencies (collectively, “Governmental Approvals”). Required Governmental Approvals may include, without limitation, plan-check, conditional use permit, and local and State authorizations for the lawful sale and onsite consumption of alcoholic beverages, if applicable. The City shall use good faith efforts to expediate any Governmental Approvals required by City to the extent feasible.
1.2 Completion Date. The “Completion Date” shall be the date that Legacy obtains all required Governmental Approvals and commences the Operations at the Facility. Legacy shall cause the Completion Date to occur within six months after the Effective Date of this Agreement.
If Legacy determines it cannot meet the Completion Date deadline, Legacy shall promptly provide the City with written notice at its earliest opportunity. Such notice shall include a detailed explanation of the delay and a request for a reasonable extension of time. Approval of such extension requests shall be issued by the City Manager in writing and shall not be unreasonably withheld or unreasonably conditioned. For the purpose of clarity, the six-month timeline shall apply to the essential Operations necessary for a volleyball tournament facility, pickleball court access, and youth programming. The café amenity requires approval by the County of Los Angeles and is expected to be completed within the first 12 months after the Effective Date of this Agreement.
3 1.3 Operating Period. The “Operating Period” shall commence on the Completion Date and shall continue in effect for a period of 10 years.
1.4 Term of Agreement. This Agreement shall commence on the Effective Date and continue in effect until the expiration of the Operating Period, unless earlier terminated as provided herein (“Term”).
ARTICLE 2
COMPLIANCE WITH LAWS; INSPECTIONS
2.1 Compliance with Applicable Law. Legacy shall ensure the Facility is constructed and operates in conformity with all applicable federal, state, and local laws and regulations, including, without limitation, all applicable labor and employment laws, procurement of required permits and approvals, all obligations with regard to the payment of prevailing wages (as described in subsection (a), below), sale and consumption of alcoholic beverages, environmental protection, tax, and hazardous materials. If Legacy, or any of Legacy’s officers, agents, employees, or contractors, fail to comply with applicable laws, ordinances, codes, or regulations, including without limitation Prevailing Wage Law (as defined in subsection (a), below) and such failure results in a claim for damage or liability to City, Legacy shall be responsible for defending, indemnifying, and holding the City harmless as provided in this Agreement. (a) Public Work; Prevailing Wage. As provided herein, the Facility will be paid for in part out of public funds and is therefore a “public work” pursuant to California Labor Code Section 1720 et seq. Accordingly, Legacy shall be solely responsible for compliance with all applicable provisions of California Labor Code Section 1720 et seq., related sections of the California Code of Regulations, and official determinations and guidance issued by the California Department of Industrial Relations (“DIR”) (collectively, “Prevailing Wage Law”) and for causing the work on the Property to be performed as a “public work” pursuant to Prevailing Wage Law, inclusive of but not limited to the payment of not less than the prevailing per diem wage rate for their labor classification for laborers employed relative to the construction of the Facility or otherwise for the performance of work on the Property pursuant to California Labor Code Section 1771, the keeping of certified payroll records pursuant to California Labor Code Section 1776, the keeping and posting of copies of the prevailing rate of per diem wages pursuant to California Labor Code Section 1773.2, and notification to DIR pursuant to California Labor Code Section 1773.3.
2.2 City Right to Inspect the Facility. Officers, employees, agents and representatives of City shall have the right of reasonable access to the Facility during the Term, without the payment of charges or fees, during normal business hours, to verify Legacy’s diligent pursuit of the Completion Date and compliance with all other covenants and conditions of this Agreement.
Legacy shall make a representative available to accompany City representatives into the Facility upon reasonable advance notice from City.
2.3 Records Inspection. Legacy shall keep and maintain all records as may reasonably be required by City to enable City to evaluate compliance by Legacy with the terms of this Agreement, including without limitation the lease agreement between Legacy and the owner of the Property and any other agreements related to the Facility, certificates of insurance related to the Property or Facility, and accounting, payroll, maintenance, and youth programming records (“Records”). Legacy shall reasonably cooperate with City to allow City, its agents, and representatives, upon prior notice, at reasonable times, to inspect any such Records for the purpose 4 of assuring compliance with this Agreement. The Records required to be maintained under this Agreement shall be retained for a period of five years, provided, however, in the event any litigation, audit, negotiation, or other action involving the Records is commenced prior to the expiration of the five year retention period, Legacy shall retain such Records until final resolution of judicial proceedings and passage of any applicable appeal periods. Legacy’s obligations under this Section shall survive the expiration or termination of this Agreement.
ARTICLE 3
ECONOMIC DEVELOPMENT INCENTIVES
3.1 Letter of Credit. City shall financially back as guarantor a letter of credit in the amount of $1,500,000 as security for Legacy’s lease obligations to the owner of the Property (“Letter of Credit”). The form of the Letter of Credit and the terms and conditions contained therein shall be subject to the approval of the City Council. Once duly approved and signed by the Parties, a copy of the fully executed Letter of Credit shall be attached to this Agreement as Exhibit “B” and its terms and conditions shall be incorporated into this Agreement by reference.
3.2 Payment for Tenant Improvements. Within 30 days of the Effective Date of this Agreement, City shall issue payment to Legacy in the amount of $750,000 to be used exclusively for the cost of the Tenant Improvements and Facility-essential equipment, fixtures, and furniture.
Payment due for Tenant Improvements under this Section shall be conditioned upon Legacy providing proof to the reasonable satisfaction of City that Legacy holds a current and valid leasehold interest in the Facility and that such lease agreement permits Legacy to make the Tenant Improvements.
3.3 Waiver of City Fees. City shall waive all fees for City-issued Governmental Approvals related to the development and operation of the Facility. City’s waiver of such fees is estimated to save Legacy approximately $122,000.
3.4 Annual Payment for Youth Programming. Within 30 days of the Completion Date, City shall issue payment to Legacy in the amount of $25,000 to be used exclusively for the costs of facilitating youth programming at the Facility. City shall issue annual $25,000 payments for youth programming on each anniversary of the Completion Date, provided that Legacy continues to facilitate youth programming at the Facility to the reasonable satisfaction of the City’s Director of Parks and Recreation throughout the entire Operating Period, and otherwise maintains compliance with this Agreement. Payments due for youth programming under this Section shall not exceed the aggregate total of $250,000.
3.5 Marketing Support. City shall reasonably cooperate with Legacy to support marketing and promotion for the Los Angeles 2028 Olympic and Paralympic Games.
ARTICLE 4
COVENANTS AND COMMUNITY BENEFITS
4.1 Continuous Operations During Operating Period. Legacy shall continuously conduct the Operations at the Facility on the Property pursuant to the requirements of this Agreement during the entire Operating Period, other than Facility closures necessitated due to maintenance and repair work or events of Force Majeure (as defined in Section 8.9, below). 5 Notwithstanding the foregoing, the Facility may not be closed/non-operative for more than 30 days without the prior written approval of the City Manager or designee, which shall be granted in their sole and absolute discretion.
(a) Continuous Maintenance and Repair of Facility. Legacy shall, at its sole cost and expense, maintain the Facility and all courts and equipment therein in good, clean, operational, and safe condition. Legacy shall promptly perform all necessary repairs and maintenance to ensure the Facility remains free of hazards and complies with all applicable safety codes, standards, and regulations and any other applicable laws or Governmental Approvals. (b) Continuous Leasehold Interest. Legacy shall continuously maintain throughout the Operating Period a leasehold interest in the Property that permits Legacy’s Operations at the Facility. Legacy shall forward to the City a copy of any notice of default or breach Legacy receives from or on behalf of the owner of the Property under its lease agreement for the Property within 10 days of receipt.
(c) Continuous USA Volleyball-Sanctioned Activities. Legacy shall continuously maintain throughout the entire Operating Period all applicable authorizations and/or licenses required for the Facility to serve as a USA Volleyball-sanctioned tournament facility, including without limitation displaying “Team USA” and “USA Volleyball” official branding and logos on the Facility’s interior design elements (and exterior signage, if feasible), and keeping office space dedicated to USA Volleyball’s leadership team, coaching staff, and Board of Directors visiting and/or residing in Los Angeles County. In the event that USA Volleyball transfers its national or regional interests to a related entity or governing body, Legacy shall provide the City with prior written notice of such transfer at its earliest opportunity. Upon receiving prior written approval from the City Manager, which may be granted or conditioned in his or her sole and absolute discretion, Legacy shall henceforth continue to operate the Facility to the same or higher standards as required by USA Volleyball, and shall maintain all applicable authorizations, approvals and/or licenses required for the Facility to continue to serve as an affiliate tournament facility sanctioned by the highest and best authority/entity/governing body for the sport of volleyball in the nation or region.
4.2 “Stay and Play” Requirement. For the duration of the Operating Period, Legacy shall implement and maintain a “Stay and Play” policy that requires tournament visitors traveling to the Facility from more than 100 miles away to stay in hotels located in the City, subject to room availability. Such policy shall also require Legacy and/or its tournament operator to deliver alongside official tournament registration confirmation materials a designated digital link containing a list of recommended hotel accommodations located within the City. The City Manager shall approve in writing, in his or her sole and absolute discretion, the terms and conditions of the “Stay and Play” policy required under this Section prior to the implementation of such policy and any amendments thereto.
4.3 Indoor Pickleball Courts. Legacy shall construct and maintain in safe and operational condition throughout the Operating Period no less than 12 convertible indoor pickleball courts at the Facility which shall be available for use on a club-style membership and drop-in basis.
(a) Operating Hours. No less than 12 pickleball courts shall be available for member use from 6:00 a.m. to 1:00 p.m. (PST), Monday through Friday. No less than 6 pickleball 6 courts shall be available for member use from 1:00 p.m. to 8:00 p.m. (PST), Monday through Friday. Pickleball courts shall also be available for member use from 6:00 a.m. to 8:00 p.m. (PST) during any weekends that tournaments will not occur at the Facility. Legacy must also offer designated drop-in hours during which non-members may access the pickleball courts by obtaining a reservation and paying any associated fees. The schedule for drop-in hours must be approved by City’s Director of Parks and Recreation, in his or her reasonable discretion. Modification to pickleball court operating hours, including member and drop-in hours, shall require the prior written approval of City’s Director of Parks and Recreation, which may be granted or conditioned in his or her reasonable discretion. Legacy shall also make pickleball courts available during operating hours for use by City-administered pickleball programs, if requested by City. (b) Fees and Revenue Sharing. Legacy may charge fair market rates for use of the pickleball courts. Legacy may operate a club-style paid membership program in connection with the pickleball courts, provided that non-members are still able to utilize the pickleball courts during designated hours on a drop-in basis upon obtaining a reservation and paying any associated fees. Residents of the City will be provided with free, no-cost pickleball memberships and dropin reservations. Legacy shall pay City 25% of all fee revenues collected by Legacy in connection with the pickleball courts. Legacy shall issue such revenue-share payments to City each month, on or before the fifth day of the following calendar month. Modification of pickleball membership and/or drop-in fees shall require the prior written approval of City’s Director of Parks and Recreation, which may be granted or conditioned in his or her reasonable discretion. (c) Court Closures. If any pickleball court becomes unavailable due to maintenance, repairs, or special events, Legacy shall notify participants and post signage at the Facility at least 72 hours in advance. For unavailability caused by immediate safety hazards, Legacy shall provide such notice and signage at the earliest opportunity. Any closure of the pickleball courts exceeding 48 hours shall require the prior written approval of the City’s Director of Parks and Recreation, which may be granted or conditioned in his or her reasonable discretion.
Legacy shall cooperate with City in good faith to minimize interference with access to the pickleball courts.
(d) Pickleball Tournaments. At least one weekend per year may be reserved in advance (in accordance with subsection (c), above) to host a major pickleball event/tournament utilizing up to 12 pickleball courts, subject to Facility availability outside of volleyball tournament weekends. The “Stay and Play” policy (as described in Section 4.2) shall apply to visitors traveling to the City from more than 100 miles away for pickleball event/tournament weekends.
4.4 Job Creation; Local Hiring Preference. Legacy agrees and acknowledges that the creation of local jobs is a material bargaining aspect of this Agreement. Construction and operation of the Facility is estimated to create approximately 24 temporary construction jobs, 28 full-time permanent jobs, and 41 part-time permanent jobs. Legacy shall use good faith efforts to hire locally for the Tenant Improvement work and permanent new jobs at the Facility. When applicants are equally qualified, hiring preference will be given to residents of the City and businesses located in the City, provided that such hiring preference is in conformance with all applicable laws.
4.5 Complementary Parking. Legacy will provide complementary, no-cost parking at the Facility for: (i) City’s Department of Parks and Recreation youth programming participants and their families (as described in Section 4.6); (ii) City staff visiting the Facility for official City 7 business; (iii) City-sponsored and/or City-hosted events at the Facility; and (iv) pickleball club members (as described in Section 4.3).
4.6 Youth Programming. Legacy agrees to collaborate with City’s Department of Parks and Recreation to provide indoor youth programming consistent with public recreationcenter use, structured around the needs identified by City. Youth programming provided under this Section may include no-cost youth clinics in basketball and volleyball. Legacy shall provide program-building assistance to City’s Department of Parks and Recreation at no charge, and if requested by City, shall provide venue staffing, program directors, and facilitators for an additional cost mutually agreed upon by the Parties. Legacy shall dedicate up to 4 indoor athletic courts to youth after-school programming, Monday through Friday, subject to scheduled blackout dates that will be provided to City in advance at the earliest opportunity. Legacy shall make good faith efforts to integrate youth programming at the Facility with City summer camps, if requested by City.
ARTICLE 5
DEFAULTS; REMEDIES AND TERMINATION
5.1 Defaults; Notice.
(a) Subject to any extensions of time that are provided for in this Agreement or agreed to by the Parties in writing, failure or delay by any Party to perform any term or provision of this Agreement shall constitute an Event of Default (as defined in Section 5.2, below) under this Agreement; provided, however, that if a Party otherwise in default commences to cure, correct, or remedy such default within 10 calendar days after receipt of written notice from the non-defaulting Party specifying such default, and diligently and continuously prosecutes such cure, correction, or remedy to completion, as determined in City’s reasonable satisfaction, within 45 calendar days of receiving such notice, such Party shall not be deemed to be in default under this Agreement. (b) The non-defaulting Party shall give written notice of default to the Party in default, specifying the default complained of by the non-defaulting Party. (c) Any failure or delay by any Party in asserting any of their rights and/or remedies as to any default shall not operate as a waiver of any default or of any rights or remedies of such Party nor shall it change the time of default.
5.2 Events of Default. In addition to other acts or omissions that may legally or equitably constitute a default or breach of this Agreement, the occurrence of any of the following specific events shall constitute an “Event of Default” under this Agreement that is subject to the provisions of this Article 5:
(a) Any default by Legacy of any of the covenants, terms or conditions of this Agreement that is not cured to City’s reasonable satisfaction in accordance with Section 5.1(a). (b) Legacy ceases conducting the Operations at the Facility during the Operating Period, other than permitted and/or approved closures as set forth in Section 4.1. (c) Legacy fails to timely accomplish the Completion Date within six months after the Effective Date of this Agreement, or by any extended deadline approved in accordance with Section 1.2.
8 (d) Except with the prior written consent of City as set forth in Section 8.2, Legacy transfers or assigns all or any portion of its interest in this Agreement, Facility, or the Property, whether voluntarily, involuntarily or by operation of law, in violation of the terms and conditions of this Agreement.
(e) Legacy becomes insolvent or a receiver is appointed to conduct the affairs of Legacy under state or federal law.
5.3 Remedies.
(a) City Remedies. The occurrence of any Event of Default by Legacy that is not cured in accordance with Section 5.1(a) will relieve the City of the obligation to provide any of the economic development incentives set forth in Article 3 that have not yet been provided, and shall give the City the right to proceed with any and all remedies set forth in this Agreement and/or the Letter of Credit, including but not limited to:
(i) Specific Performance. The City shall have the right to suit, action or other proceeding at law or in equity to require Legacy to perform its obligations and covenants under this Agreement and the Letter of Credit, or to enjoin acts or things which may be unlawful or in violation of the provisions of this Agreement and the Letter of Credit. (ii) Termination of Agreement. The City shall have the right to terminate the Agreement, effective upon the date that the City issues written notice to Legacy. (iii) Repayment/Recission of Economic Development Incentives. If City elects to terminate the Agreement under this Section, City shall have the right to repayment and/or recission of the economic development incentives set forth in Article 3, together with any remedies provided in the Letter of Credit. Such remedies may include, without limitation, recission of City’s guarantees under the Letter of Credit; termination of City marketing support; cancellation of future annual youth programing payments; and/or proportional repayment of the Tenant Improvement payment, issued youth programing payments, and/or the value of the City fee waivers. Legacy’s obligations under this Section shall survive the expiration or termination of this Agreement.
(1) With regard to repayment, if Legacy fails to cause the Completion Date to occur within six months after the Effective Date of this Agreement, or by any extended deadline approved in accordance with Section 1.2, City shall have the right to full repayment of the Tenant Improvement payment and the full value of any fee waivers issued. (2) With regard to repayment, if Legacy defaults after the Completion Date, pro-rated repayment amounts due to City for payments and fee waivers issued will be calculated proportionally based on the total number of the months in the 10-year Operating Period (120 months) less the number of months in the Operating Period that Legacy complied with this Agreement (“Pro-Rated Repayment Amount”). By way of example only, if Legacy defaults under this Agreement during the 73rd month of the Operating Period, Legacy will be determined to have complied with the Agreement for 72 months. As of the date of default, Legacy will have received approximately $1,022,000 in incentives under this Agreement ($750,000 for Tenant Improvements + $122,000 in fee waivers + $150,000 in annual youth programing payments). The Prorated Repayment Amount will equal $408,799.76 ($1,022,000 – (72 months x $8,516.67 prorated monthly incentive value)). 9 (3) In addition to the foregoing repayment obligations, City shall also have a right to full repayment of any amounts that the owner of the Property has drawn down from the Letter of Credit, subject to the terms and conditions therein. (4) The deadline for all repayments required under this Section shall be determined by mutual written agreement of the Parties, or by a third-party neutral mediator if the Parties cannot reach such an agreement. In no event shall the deadline for repayment be less than 120 days or more than 365 days from Legacy’s receipt of City’s written demand for repayment.
(b) Legacy Remedies; No Right to Consequential Damages. Upon fault or failure of the City to meet any of its obligations under this Agreement without curing such failure within 45 days after receipt of written notice of such failure from Legacy specifying the nature of the event of deficiency giving rise to the default, Legacy may, as its sole and exclusive remedy, bring an action in equitable relief seeking the specific performance by the City of the terms and conditions of this Agreement or seeking to enjoin any act by the City which is prohibited hereunder. Prior to bringing any action, Legacy shall meet and confer with City in good faith to consider resolving the dispute in mediation, if feasible. Legacy shall in no event be entitled to, and hereby waives, any right to seek indirect or consequential damages of any kind or nature from City and its members, directors, agents, officers, representatives and employees arising out of or in connection with this Agreement. In connection with such waiver, Legacy is familiar with and knowingly and voluntarily hereby waives the provisions of Section 1542 of the California Civil Code which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS
THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO
EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE AND
THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
Legacy Initials:
5.4 Legal Actions.
(a) Except as set forth in Section 5.3, any Party hereto may institute legal action to cure, correct or remedy any default, to recover damages regarding any default, or to obtain any other remedy available to that Party under this Agreement, at law or in equity. Such legal actions must be instituted in the Superior Court or the State of California in and for the County of Los Angeles, California, in any other appropriate court within the County of Los Angeles, California, or in the United States District Court for the Central District of California. (b) The laws of the State of California shall govern the interpretation and enforcement of this Agreement, without regard to conflicts of laws principles. The Parties acknowledge and agree that this Agreement is entered into, is to be fully performed in and relates to real property located in, the City of Santa Fe Springs, County of Los Angeles, California. (c) Prior to bringing any action, either Party shall meet and confer with the other Party in good faith to consider resolving the dispute in mediation, if feasible.
5.5 Rights and Remedies are Cumulative. Except as otherwise expressly stated in this Agreement, the rights and remedies of the Parties set forth in this Article are cumulative and the exercise by either Party of one or more of such rights or remedies shall not preclude the exercise 10 by the same Party, at the same or different times, of any other rights or remedies for the same default or any other default by the other Party.
ARTICLE 6
INDEMNIFICATION; THIRD-PARTY LAWSUITS; LIABILITY WAIVERS
6.1 Indemnification and Defense of City.
(a) Indemnity. In addition to any other specific indemnification or defense obligations of Legacy set forth in this Agreement or any other agreement between the Parties and to the fullest extent permitted by law, Legacy agrees to hold harmless, indemnify, and defend City, its legislative body, officers, officials, members, employees, attorneys, representatives, and agents (the “Indemnified Parties”), with counsel reasonably acceptable to such Indemnified Parties, from and against all Claims (as defined in subsection (b), below) that are in any manner directly or indirectly caused, occasioned or contributed to in whole or in part by:
(i) Any act, omission, fault or negligence, whether active or passive, of Legacy, or its respective agents, employees, independent contractors or subcontractors, relating to or arising from this Agreement, any work to be performed by any such person related to this Agreement, or to the Facility or Property as the same relate to this Agreement; (ii) Any authority or obligation exercised or undertaken by Legacy under this Agreement; or
(iii) Any breach or default in performance of any obligation of Legacy under this Agreement.
(b) Definition of Claims. For purposes of this Agreement, “Claims” means any and all claims, losses, costs, damages, expenses, liabilities, liens, actions, causes of action (whether in tort or contract, at law or in equity, or otherwise), charges, awards, assessments, fines, and penalties of any kind (including consultant and expert expenses, court costs, and reasonable attorneys’ fees of counsel retained by the Indemnified Parties, expert fees, costs of staff time, and investigation costs, of whatever kind or nature), and judgments, including, but not limited to, Claims for: (1) injury to any person (including death at any time resulting from that injury); (2) loss or injury or damage to, or destruction of property (including all loss of use resulting from that loss, injury, damage, or destruction) regardless of where located, including the property of the Indemnified Parties; (3) any workers’ compensation; (4) goods or services provided to Legacy or the Facility/Property; and (5) all economic losses and consequential or resulting damage of any kind.
(c) Strict Liability. The indemnification obligation of Legacy shall apply regardless of whether liability without fault or strict liability is imposed or sought to be imposed on one or more of the Indemnified Parties. Notwithstanding anything to the contrary herein, the indemnification obligations of Legacy shall not apply to the extent that a final judgment of a court of competent jurisdiction establishes that a Claim against an Indemnified Party was proximately caused by the sole negligence or willful misconduct of that Indemnified Party. (d) Independence of Obligations. The indemnification obligations pursuant to this Section shall not be construed or interpreted as in any way restricting, limiting, or modifying 11 the other obligations under this Agreement and is independent of the other obligations under this Agreement. Compliance with obligations under this Agreement shall not in any way restrict, limit, or modify Legacy’s indemnification obligations under this Agreement. (e) Attorney Fees. The Indemnified Parties shall be entitled to recover their reasonable attorney fees and actual costs incurred in enforcing Legacy’s indemnification obligations set forth in this Agreement.
(f) Survival of Indemnification and Defense Obligations. Legacy’s indemnification and defense obligations under this Agreement shall survive the expiration or earlier termination of this Agreement.
(g) Independent Duty to Defend. Legacy’s duty to defend the Indemnified Parties with counsel reasonably acceptable to the Indemnified Parties is separate and independent of Legacy’s duty to indemnify the Indemnified Parties. The duty to defend includes Claims for which the Indemnified Parties may be liable without fault or strictly liable. The duty to defend applies regardless of whether the issues of negligence, liability, fault, default, or other obligations on the part of the Parties have been determined. The duty to defend applies immediately, regardless of whether the Indemnified Parties have paid any sums or incurred any detriment arising out of or relating (directly or indirectly) to any Claims. It is the express intention of Legacy that the Indemnified Parties be entitled to obtain summary adjudication or summary judgment regarding Legacy’s duty to defend the Indemnified Parties at any stage of any Claim or suit within the scope of this Section.
6.2 Third-Party Lawsuits. Legacy acknowledges that City is a “public entity” and/or a “public agency” as defined under applicable California law. Therefore, City must satisfy the requirements of certain California statutes relating to the actions of public entities, including, without limitation, the California Environmental Quality Act (“CEQA”) (Pub. Res. Code § 21000, et seq.); the California Public Records Act (“CPRA”) (Gov. Code § 7920.000, et seq.). Also, as a public entity, the City’s action in approving this Agreement may be subject to proceedings to invalidate this Agreement or mandamus. Legacy (i) assumes the risk of; (ii) agrees to indemnify, defend, and hold harmless the Indemnified Parties from; and (iii) waives and releases any claims for delays and damages that may result to Legacy from any third-party legal actions related to City’s approval of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the event that an error, omission or abuse of discretion by City is determined to have occurred. In connection with the waiver and release contained in this Section, Legacy is familiar with and knowingly and voluntarily hereby waives the provisions of Section 1542 of the California Civil Code which provides as follows: “A GENERAL RELEASE DOES NOT EXTEND TO
CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE
RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.” Legacy Initials:
6.3 Participant Liability Waiver Forms. Legacy shall require all third-party individuals, athletes, participants, groups, leagues, and entities participating in the Operations or other activities at the Facility to sign a release of liability form prior to their utilization of the Facility. For youth activities involving minors under the age of 18 years old, a parent or legal guardian must sign the liability waiver form.
12 ARTICLE 7
INSURANCE
7.1 Duty to Procure and Maintain Insurance. Legacy shall procure and maintain insurance throughout the Term at Legacy’s sole cost and expense, but for the mutual benefit of City and Legacy, in conformance with the requirements set forth below. Legacy acknowledges that the insurance coverage and policy limits set forth in this Article constitute the minimum amount of coverage required. Any insurance proceeds available to Legacy in excess of the limits and coverage identified in this Agreement and which is applicable to a given loss, claim or demand, will be equally available to City.
(a) Required Insurance. Prior to the Effective Date, Legacy shall provide the following types and amounts of insurance:
(i) Commercial General Liability Insurance. Commercial General Liability Insurance, which shall be written on an occurrence form at least as broad as ISO CG 00 01, against claims for personal injury, death or property damage occurring in, or about Property and in, on, or about the sidewalks directly adjacent to the Property and such other areas as Legacy, its officers, agents, employees, contractors, licensees and/or invitees have the right to use. Such insurance shall have a combined single limit of not less than $1,000,000.00 per occurrence, $2,000,000 general aggregate. There shall be no cross-liability exclusion for claims or suits by one insured against another.
(ii) Property Insurance. Special causes of loss Property Insurance (formerly known as all-risk extended coverage insurance) covering all risks of physical loss or damage to Legacy’s leasehold improvements on the Property, all alterations made by Legacy to the Property, and all of Legacy’s personal property with liability limits of not less than 100% of the replacement cost of the same. Such policy shall be broad form and shall include, but shall not be limited to, coverage for fire, extended coverage, sprinkler damages, vandalism and malicious mischief, earthquake, and flood.
(iii) Automobile Liability Insurance. Automobile Liability Insurance covering owned, hired, non-owned, and rented vehicles, with a limit of not less than $1,000,000 combined single limit per accident for bodily injury and property damage. (iv) Workers’ Compensation and Employer’s Liability. Statutory Workers’ Compensation limits as required by the State of California, and Employer’s Liability limits of not less than $1,000,000 per accident, disease, or employee. Coverage shall include a waiver of subrogation endorsement in favor of the City and its officers, officials, employees, and volunteers.
(v) Sexual Abuse and Molestation Coverage. Sexual Abuse and Molestation Liability coverage in an amount not less than $1,000,000 per occurrence, $2,000,000 general aggregate. This coverage may be part of Commercial General Liability coverage, Professional Liability coverage, or a separate policy.
(vi) Umbrella or Excess Liability. Umbrella or Excess Liability insurance may be used to meet the liability limits required under this Section. 13 7.2 Required Carrier Rating. Insurance procured pursuant to this Article shall be written by insurers that are admitted carriers in the state of California and with an A.M. Best’s rating of A- or better and a minimum financial size VII.
7.3 City as Additional Insured; Primary and Non-Contributory. The policies required by City under this Article shall be in a form reasonably satisfactory to City and shall include actual endorsements (CG 20 10 and CG 20 37 or equivalent) listing City and its officials, officers, employees, agents, and volunteers as additional insureds. Insurance coverage required under this Article shall be primary and noncontributory to any insurance or self-insurance maintained by the City.
7.4 Waiver of Subrogation. All insurance coverage provided pursuant to this Agreement will not prohibit Legacy or Legacy’s officers, employees, agents, subcontractors or subconsultants from waiving the right of subrogation prior to a loss. Legacy hereby waives all rights of subrogation against City, its officials, officers, employees, agents, and volunteers.
7.5 Failure to Maintain Coverage. In the event any policy of insurance required under this Agreement does not comply with the specifications stated in this Article or is canceled and not replaced immediately so as to avoid a lapse in the required coverage, City has the right but not the duty to obtain the insurance it deems necessary, and any premium paid by City will be promptly reimbursed by Legacy. In the alternative, City may terminate this Agreement pursuant to the terms herein.
7.6 Special Risks or Circumstances. City reserves the right to modify these requirements, including limits, based on the nature of the risk, prior experience, insurer, coverage, or other special circumstances, in its sole and absolute discretion. Any amendment to the insurance requirements of this Article shall be memorialized and approved in the form of a written amendment to this Agreement, signed by the Parties. The requirement for written amendments, modifications or supplements cannot be waived and any attempted waiver will be void or invalid.
7.7 Certificates of Insurance. Legacy shall provide City with certificates of insurance evidencing the coverage required under this Article within 30 days of the Effective Date, upon policy renewals, and upon the written request of City. Certificates shall reflect that the insurer will provide 30 days’ written notice to City of any cancellation of or material reduction in coverage.
7.8 Third-Party Insurance Requirements. Legacy agrees to ensure that its subconsultants, subcontractors, vendors, and any other third-party involved with conducting the Operations or other activities at the Facility provide the same minimum insurance coverage required of Legacy, including without limitation that such third-parties shall list City and its officials, officers, employees, agents, and volunteers as additional insureds on general liability and automobile liability policies. Legacy agrees to monitor and review all insurance coverage carried by such third-parties and assumes all responsibility for ensuring that coverage is provided in conformity with the requirements of this Article.
14 ARTICLE 8
GENERAL PROVISIONS
8.1 Incorporation of Recitals. The Recitals of fact set forth at the beginning of this Agreement are true and correct and are incorporated into this Agreement in their entirety by this reference.
8.2 Restrictions on Change in Management or Control of Facility; Assignments and Transfers. Legacy acknowledges that Legacy’s brand, qualifications, identity, and status as the affiliate operator of USA Volleyball is of particular importance to City and that a transfer or assignment of any of Legacy’s interest in this Agreement or the Facility and/or changes in the Operations at the Facility are only allowed during the Operating Period pursuant to the terms and conditions of this Section and with the prior written consent of City, which shall be in the form of approval by the City Council, and which consent may be withheld, conditioned or delayed in City’s sole and absolute discretion. No voluntary or involuntary successor in interest of Legacy shall acquire any right or interest in this Agreement without the prior written consent of City pursuant to this Section. Any transfer or assignment made in violation of this Section shall be voidable at the election of City and, if voided, shall be deemed to be an Event of Default by Legacy, whether or not Legacy knew of or participated in such transfer or assignment. When reviewing and deciding upon any proposed transfer or assignment of this Agreement or the Facility, City shall consider the financial capacity of the proposed transferee or assignee to perform the terms and conditions in this Agreement, and Legacy shall deliver or cause to be delivered to City any documentary evidence concerning the proposed transferee’s or assignee’s financial capacity that City may request or need to review in City’s reasonable discretion to evaluate the proposed transfer or assignment. In the event that City approves a transfer or assignment pursuant to this Section, no such transfer or assignment shall be effective unless and until Legacy and the City-approved transferee or assignee executes and delivers to City at least thirty (30) days prior to such transfer or assignment, an assignment and assumption agreement in a form reasonably acceptable to City and the City Attorney, pursuant to which the transferee or assignee shall assume, for City’s benefit, all of Legacy’s obligations hereunder.
8.3 Notices, Demands and Communications Between the Parties. All notices under this Agreement shall be effective upon personal delivery, upon delivery by reputable overnight courier service that provides a receipt with the date and time of delivery, via facsimile so long as the sender receives confirmation of successful transmission from the sending machine, or 3 business days after deposit in the United States mail, postage fully prepaid and addressed to the respective Parties as set forth below or as to such other address as the Parties may from time to time designate in writing:
To Legacy: Legacy Sports Complex LLC
8529 Camino Naranjo Road
Corona, CA 92883
Attn: _______________
Telephone: ______________
To City: City of Santa Fe Springs
11710 Telegraph Road
Santa Fe Springs, CA 90670
15 Attention: City Manager
Telephone: (562) 868-0511
With Courtesy Copy to: Olivarez Madruga Law Organization, LLP 500 S. Grand Ave., Floor 12
Los Angeles, CA 90071
Attention: Rick Olivarez, City Attorney
Telephone: (213) 744-0099
8.4 Governing Law and Venue. This Agreement shall be interpreted and governed according to the laws of the State of California. In the event of litigation between the Parties, venue, without exception, will be in the Los Angeles County Superior Court of the State of California. If, and only if, applicable law requires that all or part of any such litigation be tried exclusively in federal court, venue, without exception, will be in the Central District of California located in the City of Los Angeles, California.
8.5 Conflict of Interest. No member, official or employee of City having any economic interest, direct or indirect, related to this Agreement shall participate in any decision relating to this Agreement. The Parties represent and warrant that they do not have knowledge of the existence of any such conflict of interest.
8.6 Warranty Against Payment of Consideration for Agreement. Legacy warrants that it has not paid or given, and will not pay or give, any third-party any money or other consideration for obtaining this Agreement. Third-parties, for the purposes of this Section shall not include persons to whom fees are paid for professional services, if rendered by attorneys, financial consultants, accountants, engineers, architects and the like when such fees are considered necessary by Legacy.
8.7 Non-liability of City Officials and Employees. No member, official or employee of City shall be personally liable to Legacy, or any successor in interest, in the event of any default or breach by City under this Agreement or for any amount that may become due to Legacy or to its successors, or on any obligations under the terms of this Agreement.
8.8 Relationship of the Parties. City and Legacy hereby renounce the existence of any form of agency, joint venture, or partnership between them and agree that nothing in this Agreement or in any document executed in connection herewith shall be construed as making the City and Legacy agents of one another or as joint venturers or partners.
8.9 Force Majeure; Extension of Time of Performance.
(a) Performance by any Party under this Agreement shall not be deemed to be in default, or considered to be a default, where any delay or default is due to any prevention, delay or stoppage due to strikes, lockouts, labor disputes, acts of God, inability to obtain labor or materials or reasonable substitutes therefor, governmental actions, civil commotions, fire or other casualty, and other non-financial causes beyond the reasonable control of the Party obligated to perform (“Force Majeure”). In the event that a Force Majeure event occurs, and a Party is unable to timely perform any obligation under this Agreement, an extension of time for any Force Majeure event shall be granted for the period of time that the Force Majeure event exists and shall commence to run from the date of occurrence of the Force Majeure event, but only if the Party asserting the existence of 16 the Force Majeure event provides the other Party with written notice of the occurrence of the Force Majeure within 10 calendar days of the commencement of the asserted Force Majeure event. If the Party asserting the existence of the Force Majeure event fails to provide the other Party with timely written notice, then extension of time for such Force Majeure event shall commence to run from the date of written notice of such Force Majeure event. In the event that a Force Majeure event disrupts Operations at the Facility for 90 days or more, Legacy shall deliver to City written notice of an action plan that Legacy will implement so that the Facility may resume Operations within an additional 90 days of delivery of said notice. In the event that the Facility is not used for the Operations within 365 days from the commencement of a particular Force Majeure event, City shall have the right to declare that Legacy has committed an Event of Default and may pursue any rights or remedies against Legacy pursuant to Article 5, above. (b) The Parties expressly acknowledge and agree that changes in either general economic conditions or changes in the economic assumptions of either of them that may have provided a basis for entering into this Agreement and that occur at any time after the execution of this Agreement, do not constitute a Force Majeure event and do not provide any Party with grounds for asserting the existence of a Force Majeure event in the performance of any covenant or undertaking arising under this Agreement. Each Party expressly assumes the risk that changes in general economic conditions or changes in such economic assumptions relating to the terms and covenants of this Agreement could impose an inconvenience or hardship on the continued performance of such Party under this Agreement.
8.10 Binding on Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the Parties and their respective successors and assigns, which shall be duly approved as successors or assigns pursuant to the terms and conditions of this Agreement.
8.11 Waiver; Amendments and Modifications. A waiver of a provision in this Agreement, or amendment or modification of any provision herein contained, shall be effective only if said waiver, amendment, or modification is in writing and signed by all Parties. No waiver of any breach or default by any Party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver.
8.12 Counterpart Originals. This Agreement may be executed in counterparts, originals, each of which is deemed to be an original, but when taken together shall constitute but one and the same instrument.
8.13 Survival ofIndemnity and Other Obligations. All general and specific indemnity and defense obligations of the Parties set forth in this Agreement, and all reimbursement, repayment, and other obligations that may be expressly provided herein, shall survive the expiration of the Operating Period or earlier termination of this Agreement.
8.14 Interpretation. The Parties acknowledge that this Agreement is the product of mutual arms-length negotiation and drafting and that each Party has been represented by legal counsel in the negotiation and drafting of this Agreement. Accordingly, any rule of construction providing that ambiguities in a document shall be construed against the drafter of that document shall have no application to the interpretation or enforcement of this Agreement.
8.15 Entire Agreement. This Agreement, including all attached exhibits, constitutes the entire, complete, final, and exclusive expression of the Parties with respect to the matters addressed herein and supersedes all other agreements or understandings, whether oral or written, 17 which may have been entered into between the Parties prior to the execution of this Agreement.
Any statements, representations, or other agreements, whether oral or written, made by either Party that is not embodied herein will not be valid or binding on the Parties. No amendment, modification or supplement to this Agreement will be valid and binding unless in writing and duly executed by all Parties.
8.16 Severability. If any term, covenant, condition or provision of this Agreement is held by a court of competent jurisdiction to be invalid, void or unenforceable, the remainder of the provisions hereof shall remain in full force and shall not be affected, impaired, or invalidated thereby.
8.17 No Third-Party Beneficiaries. The performance of each Party’s respective obligations under this Agreement are not intended to benefit any Party other than the Parties, except as expressly provided otherwise herein. No person or entity not a signatory to this Agreement shall have any rights or causes of action against any Party to this Agreement as a result of that Party’s performance or non-performance under this Agreement, except as expressly provided otherwise herein.
8.18 City Manager Implementation. City shall implement this Agreement through its City Manager or designee. The City Manager or designee is hereby authorized by City to issue approvals, interpretation, or waivers unless otherwise stated herein, to the extent that any such actions do not materially or substantially alter this Agreement. All other actions shall require the consideration and approval of the City Council, unless expressly provided otherwise. Nothing in this Section shall restrict the submission to the City Council of any matter within the City Manager’s authority under this Section, in the City Manager’s sole and absolute discretion, to obtain the City Council’s express and specific authorization on such matter. The specific intent of this Section is to authorize certain actions on behalf of City by the City Manager, but not to require that such actions be taken by the City Manager, without consideration by the City Council.
8.19 Authority to Execute. The persons executing this Agreement on behalf of the Parties warrant and represent that they have the authority to execute this Agreement on behalf of said Parties and have the authority to bind the Parties to the provisions of this Agreement.
8.20 Electronic Signatures. The Parties acknowledge and agree that execution of the Agreement by electronic signature or electronic transmittal of signatures shall have the same effect as handwritten signatures for the purposes of validity, enforceability, and admissibility. [SIGNATURES ON FOLLOWING PAGE]
18 SIGNATURE PAGE
TO
OPERATING COVENANT AGREEMENT
IN WITNESS WHEREOF, City and Legacy have executed this Operating Covenant Agreement by and through the signatures set forth below.
CITY:
CITY OF SANTA FE SPRINGS
By:_____________________________
René Bobadilla, City Manager
Date:
ATTEST:
By:
Maribel Garcia, City Clerk
Date:
APPROVED AS TO FORM:
By:_____________________________
Rick Olivarez, City Attorney
Date:
LEGACY:
LEGACY SPORTS COMPLEX, LLC
By:_____________________________
Name: __________________________
Title: ___________________________
Date:
19 EXHIBIT “A”
LEGAL DESCRIPTION OF PROPERTY
THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SANTA FE
SPRINGS, IN THE COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS:
PARCEL 3 OF PARCEL MAP NO. 78232, IN THE CITY OF SANTA FE SPRINGS, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, AS PER MAP FILED IN BOOK 405, PAGES 7 TO 13, INCLUSIVE, OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY.
EXCEPT THEREFROM ANY AND ALL OIL, GAS, OR HYDROCARBON SUBSTANCES, OR MINERALS OF ANY KIND IN OR UNDER SAID LAND.
20 EXHIBIT “B”
LETTER OF CREDIT
[TO BE ATTACHED]
CITY OF SANTA FE SPRINGS
GOVERNMENT CODE 53083
ECONOMIC DEVELOPMENT SUBSIDY REPORT
Pursuant to California Government Code Section 53083, the City Council of the City of Santa Fe Springs will hold a public hearing on Tuesday, August 18, 2026 at 6:00 p.m., or as soon thereafter as the matter can be heard, in the City Council Chambers located at 11710 E. Telegraph Road, Santa Fe Springs, California 90670 to consider an economic development subsidy to be provided under an Operating Covenant Agreement (hereinafter, “Agreement”) between the City of Santa Fe Springs (hereinafter, “City”) and Legacy Sports Complex LLC (hereinafter, “Legacy Sports”).
The City desires to stimulate economic development by entering into an Agreement for the City to provide financial assistance to Legacy Sports for the development and operation of a new 121,000 square foot indoor sports facility located at 10251 Santa Fe Springs Road that will serve USA Volleyball-sanctioned tournaments and include office space dedicated to USA Volleyball's leadership team, coaching staff, and Board of Directors in Los Angeles County (hereinafter, “Facility”). The Facility is expected to include more than 20 indoor volleyball courts, training and tournament space, indoor pickleball courts, a café, and offices. The Facility will host youth volleyball and basketball tournaments and serve as a Los Angeles County flagship training and practice facility for USA Volleyball’s men’s and women’s national teams in connection with the Los Angeles 2028 Olympic and Paralympic Games.
The following information will be posted on the City’s website and remain available for the entire term of the economic development subsidy, in accordance with California Government Code Section 53083.
1. The name and address of all corporations or any other business entities, except for sole proprietorships, that are the beneficiary of the economic development subsidy, if applicable.
The beneficiary is Legacy Sports Complex LLC, a California limited liability company, principally located at 8529 Camino Naranjo Road, Corona, California 92883.
2. The start and end dates and schedule, if applicable, for the economic development subsidy.
The economic development subsidy will start when the Agreement is approved by the City Council and executed by the parties and will continue in effect for a term of 10 years after the Facility commences operations.
3. A description of the economic development subsidy, including the estimated total amount of the expenditure of public funds, or of revenue lost to, the local agency, as a result of the economic development subsidy.
The City will provide Legacy Sports financial assistance totaling approximately $2,622,000 in value to develop and operate the Facility, in consideration of certain covenants and restrictions detailed in the Agreement. The Agreement provides for the following economic development subsidies:
• A letter of credit of up to $1.5 million as security for Legacy’s lease obligations to the owner of the Facility, Centris Telegraph Point, LLC. City will be financially backing the letter of credit as guarantor.
• Payment of up to $750,000 for tenant improvements to the Facility. • Payment of up to $25,000 annually during the 10-year term (up to $250,000 total) to support youth programing at the Facility.
• Waiver of applicable permit, plan-check, conditional use permit, and related fees, which is estimated to total approximately $122,000 in value.
In addition to the financial subsidies above, City will also partner with Legacy Sports for marketing and promotion for the Los Angeles 2028 Olympic and Paralympic Games.
4. A statement of the public purposes for the economic development subsidy.
The Facility is anticipated to host approximately 40 to 44 tournament weekends annually, attracting an estimated 4,800 to 5,400 visitors to the City per tournament weekend and approximately 192,000 to 239,000 visitors each year. Tournament visitors are projected to generate approximately $600,000 to $725,000 in local spending per tournament weekend.
This recurring activity would support City lodging, restaurants, retailers, fuel stations, and the overall business community. The Agreement will include a “Stay and Play” requirement, which will further support the local economy by directing tournament-related lodging demand to hotels located in the City when rooms are available. The City will also receive 25% of all pickleball court revenue collected by Legacy each month.
The Agreement also provides for direct benefits to City residents. The Facility will offer youth programing and access to indoor pickleball courts on a membership and drop-in basis. City residents will have access to free, no-cost pickleball memberships and drop-in reservations. Additionally, Legacy Sports is committed to hiring locally for tenant improvement work and future full-time jobs, to the extent feasible. Legacy Sports will also provide free parking for City staff, City-sponsored events, youth program families, and pickleball members.
Providing the City-backed letter of credit will allow Legacy Sports to preserve capital for construction, equipment, staffing, and operating expenses. The City’s tenant improvement contribution and fee waivers will assist Legacy Sports in completing the improvements necessary to begin operations at the Facility and provide the pickleball courts. The annual payments for youth programing will support recreational opportunities for children and families in the community.
5. Projected tax revenue to the local agency as a result of the economic development subsidy.
During the 10-year operating period of the Agreement, the City is projected to receive approximately $3.2 million to $5.7 million in sales tax revenue.
6. Estimated number of jobs created by the economic development subsidy, broken down by full-time, part-time, and temporary positions.
The development and operation of the new Facility is expected to create approximately 24 temporary construction jobs, 28 full-time permanent jobs, and 41 part-time permanent jobs.
CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: Cuong Nguyen, Director of Community Development
SUBJECT:
APPROVAL OF LOAN AGREEMENT AND ACCOMPANYING DOCUMENTS WITH A FOOD PROCESSING COMPANY IN AN AMOUNT UP TO $13,500,000 FOR THE RELOCATION OF ITS
FACILITY TO THE CITY OF SANTA FE SPRINGS
DATE: Tuesday, August 18, 2026, 5:00 PM
RECOMMENDATION:
It is recommended that City Council:
1. Adopt Resolution No. 10037 approving the Loan Agreement between the City of Santa Fe Springs and Juanita's Foods, a California corporation, providing for one or more loans in an aggregate principal amount not to exceed $13,500,000; and
2. Authorize the City Manager, in consultation with the City Attorney and Finance Director, to execute the Loan Agreement, attached Promissory Note, and all other Loan Documents,
3. Further Authorize the City Manager, in consultation with the City Attorney and Finance Director to make any non-substantive changes necessary to finalize the transaction; and
4. Take such additional, related action that may be desirable.
FISCAL IMPACT
Approval of this item authorizes the City to loan Juanita's Foods up to $13,500,000 for relocation and equipment costs associated with the Project. The Loan is not amortized. The Borrower will make quarterly interest-only payments, with a balloon payment of all outstanding principal and interest due at maturity. Interest accrues at the Local Agency Investment Fund (LAIF) Apportionment Rate, as most recently published by the California State Treasurer's Office.
The Loan Agreement provides for a maximum term of five (5) years. At three (3) years and one (1) day, the Borrower is required to notify the City in writing that the City has the right to call the Loan due at the three (3) year, six (6) month mark. If the Borrower wishes to use the full five-year term, it may separately request an extension.
However, that request does not guarantee approval, as any extension remains subject to City approval. If the Borrower does not submit a request, or if the City does not approve a requested extension, the Loan will automatically become due and payable at three (3) years and six (6) months. Amounts not paid when due accrue interest at a 10% Default Rate. The Borrower may prepay all or a portion of the Loan at any time without penalty.
The Loan is backed by an Equity Commitment Letter and Guaranty from Apex Capital, and proof of Apex Capital's available capital, discussed further below.
Given that interest on the loan is based on the LAIF rate, which is effectively the City's cost of capital, there is not an expected net financial impact from the loan to the City.
BACKGROUND
Juanita's Foods is proposing to relocate to an existing food processing facility at 13100 Arctic Circle, Santa Fe Springs (APNs 7005-007-050 and 7005-007-037), consolidating operations currently located approximately 15 miles away in Wilmington, California. The project is proposed in two phases: a Phase I manufacturing facility of approximately 122,000 square feet at the Arctic Circle site, representing an estimated $60 - $70 million investment inclusive of purchase price, equipment, and buildout; and a Phase II warehouse of approximately 50,000 square feet at a satellite location within the City.
The Arctic Circle site offers Juanita's Foods rail access, a faster timeline to occupancy than competing sites, and proximity that supports employee retention through the relocation. Staff was informed the company needed to reach a site decision on an expedited timeline, and that other states, including Kansas and Texas, were separately offering incentive packages.
Securing this relocation preserves jobs associated with Juanita's Foods' operations and keeps the Arctic Circle site in active industrial and manufacturing use, supporting the City's broader goal of maintaining a strong industrial base. As part of the transaction, Juanita's Foods has also agreed to contribute $200,000 annually to the City's Community Benefit Fund for five (5) years.
Initial deal discussions contemplated a combined incentive package consisting of a loan interest subsidy, permitting fee assistance, and a milestone-based relocation payment. Deal terms have been refined and restructured into two components for Council consideration: this Loan Agreement, providing Juanita's Foods up to $13,500,000 in short-term financing for relocation costs and a direct incentive package totaling approximately $1.5 million, consisting of a Permitting Fee Waiver of up to $500,000, a Relocation Incentive of $500,000, and an Employee Training/Retention Incentive of $500,000, the latter two payable directly to Juanita's Foods. The direct incentive package will be brought to Council for separate consideration at a future meeting.
This project also supports the City's participation in the broader "BIG 4" effort, a coordinated push among California's major industrial cities to retain manufacturing and industrial employers that might otherwise relocate out of state, preserving local jobs, tax base, and industrial land use.
ANALYSIS
Juanita's Foods is the sole Borrower under the Loan Agreement and is unconditionally obligated to repay the Loan; the Borrower's obligation to repay is absolute and not subject to offset, defense, or suspension. Loan proceeds may only be used for relocation expenses and purchases related to the Project, and the Borrower must demonstrate use of funds upon City request.
Apex Capital is the equity investor backing Juanita's Foods. As a condition of closing, Apex Capital must deliver an Equity Commitment Letter and Guaranty and demonstrate liquid capital equal to or greater than the Loan amount, which together serve as additional backup security in the event Juanita's Foods fails to repay the Loan.
Closing is also conditioned on other standard safeguards, including confirmation that Juanita's Foods has possession of the site, evidence that the company is actively pursuing its required land use and building permits, consent from the company's other existing lenders, and other standard corporate documentation from both Juanita's Foods and Apex Capital.
The Borrower must complete the Project, meaning it must obtain a certificate of occupancy, no later than twentyfour (24) months following sixty (60) days from the initial Loan disbursement. The City may declare a default if the Borrower fails to pay, fails to meet other loan requirements, becomes insolvent, halts Project operations, or fails to secure the other financing needed for the Project. Upon default, the City may demand immediate repayment of the full outstanding balance, which then accrues interest at the 10% Default Rate, and pursue all other remedies available under the Loan Documents. Any transfer of the Borrower's interest in the site, Project, or Loan Documents, or any change of 51% or more of the Borrower's ownership or control, requires prior City Council approval.
ENVIRONMENTAL
The proposed action is categorically exempt (Class 1) from the provisions of the California Environmental Quality Act (Pub. Res. Code § 21000 et seq.) ("CEQA") pursuant to State CEQA Guidelines Section 15301, because it allows for the operation, maintenance, repair, leasing, permitting and minor alteration of an existing private facility with no expansion of use. Furthermore, the proposed action is exempt pursuant to CEQA Section 15061(b)(3) under the common sense exemption because it approves a financial loan transaction and does not itself authorize any construction or development; and as a result, there is no possibility that this action will have a significant effect on the environment. Entitlements and construction approvals necessary for the Project will be subject to separate environmental review under CEQA as part of the City's standard development review process.
SUMMARY/NEXT STEPS
This item represents the first of two components of an economic incentive package intended to secure the relocation of Juanita's Foods' manufacturing operations to Santa Fe Springs, consistent with the City's participation in the regional BIG 4 effort to retain industrial manufacturing in the four cities. Upon Council approval, staff will finalize and execute the Loan Agreement, Promissory Note, and related Loan Documents, subject to satisfaction of all closing conditions, and Loan proceeds will be disbursed. Staff will return to Council at a future meeting with the second component of the incentive package, the Permitting Fee Waiver, Relocation Incentive, and Employee Training/Retention Incentive, totaling approximately $1.5 million, for separate consideration and approval.
ATTACHMENT(S):
1. Attachment No. 1 - Resolution No. 10037
1. Exhibit A - Loan Agreement between the City of Santa Fe Springs and Juanita's Foods Attachments
1. Attachment No. 1 - Resolution No. 10037
RESOLUTION NO. 10037
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
SANTA FE SPRINGS APPROVING A LOAN AGREEMENT
AND ACCOMPANYING DOCUMENTS WITH A FOOD
PROCESSING COMPANY IN AN AMOUNT UP TO
$13,500,000 FOR THE RELOCATION OF ITS FACILITY TO
THE CITY
WHEREAS, the City of Santa Fe Springs (the “City”) seeks to foster economic activity, stimulate investment, and create jobs in the local economy; and WHEREAS, the City seeks to attract a business to ensure the continued use of a building used for food manufacturing; and
WHEREAS, Juanita’s Foods is a manufacturer of Hispanic foods with nationwide distribution; and
WHEREAS, Juanita’s Foods wishes to relocate its food processing facility within the city; and
WHEREAS, City wishes to make a loan contained in a Loan Agreement with accompanying and related documents (“Agreement”) which include a promissory note, guarantee, and other related documents referenced in the Agreement.
NOW THEREFORE, THE CITY COUNCIL FOR THE CITY OF SANTA FE SPRINGS DOES HEREBY FIND, DETERMINE AND RESOLVE AS FOLLOWS:
SECTION 1. The above recitals are true and correct and are incorporated herein, in their entirety, by this reference.
SECTION 2. The City Manager is authorized and directed to execute the Agreement, attached hereto as Exhibit “A” on behalf of the City and to make any necessary nonmaterial revisions in consultation with the City Attorney.
SECTION 3. The City Manager, in consultation with the Finance Director, is further authorized and directed to approve and sign any related documents referenced in the Agreement and take such further action consistent with this Resolution on behalf of the City as needed to implement this Resolution.
SECTION 4. The proposed action is categorically exempt (Class 1) from the provisions of the California Environmental Quality Act (Pub. Res. Code § 21000 et seq.) ("CEQA") pursuant to State CEQA Guidelines Section 15301, because it allows for the operation, maintenance, repair, leasing, permitting and minor alteration of an existing private facility with no expansion of use. Furthermore, the proposed action is exempt pursuant to CEQA Section 15061(b)(3) under the common sense exemption because it approves a financial loan transaction and does not itself authorize any construction or development; and as a result, there is no possibility that this action will have a significant effect on the environment.
SECTION 5. This Resolution shall take effect upon its adoption. The City Clerk shall certify to the adoption of this Resolution and enter it into the book of original Resolutions.
PASSED, APPROVED, AND ADOPTED by the City Council of the City of Santa Fe Springs, at its regular meeting on this 18th day of August 2026.
Joe Angel Zamora, Mayor
ATTEST:
Maribel Garcia, City Clerk
STATE OF CALIFORNIA )
COUNTY OF LOS ANGELES ) SS:
CITY OF SANTA FE SPRINGS )
I, Maribel Garcia, City Clerk of the City of Santa Fe Springs, do hereby certify that the foregoing Resolution No. ___ was passed, approved, and adopted by the City Council of the City of Santa Fe Springs, signed by the Mayor and attested by the City Clerk at a regular meeting of said Governing Body held on the __ day of August 2026 and that said Resolution was adopted by the following vote, to-wit:
AYES:
NOES:
ABSTAIN:
ABSENT:
Maribel Garcia, City Clerk
EXHIBIT A
(Please see Attached)
LOAN AGREEMENT
by and between the
CITY OF SANTA FE SPRINGS
a public body, corporate and politic
and
JUANITA’S FOODS
a California corporation
for loans up to an aggregate principal amount of
$13,500,000
August 18, 2026
THIS LOAN AGREEMENT (as amended, modified, supplemented, and replaced from time to time, collectively, “Agreement”) is made as of ______________, 2026, for reference purposes only, by and between the CITY OF SANTA FE SPRINGS, a public body, corporate and politic (“CITY” or “LENDER”), and JUANITA’S FOODS, a California corporation (“Borrower”).
The City and Borrower are sometimes referred to collectively herein as the “Parties” and each individually as a “Party.”
R E C I T A L S
A. Borrower proposes to establish a food processing facility in the City located at 13100 Arctic Circle, Santa Fe Springs, CA 90670 (APNs: 7005-007-050; 7005-007-037) (the “Site”) as legally described on Exhibit “A”.
B. Borrower is in the process of obtaining City approval of entitlements to develop, construct and operate a food processing facility (the “Project”).
C. City wishes to offer financial incentives to Borrower to assist in relocation to the City. The financial incentives include offering loans to Borrower.
D. Borrower desires to borrow one or more loans (each, a “Loan” and collectively, the “Loans”) in the aggregate principal amount of up to THIRTEEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($13,500,000) (the “Maximum Amount”) from the City for the purpose of providing short term financing for start-up costs and relocation costs, including equipment purchases in setting up a food processing facility. The Borrower shall be required to have a leasehold interest in the Site.
E. Other sources of financing for the Project are anticipated to include mortgage financing provided by Proterra Finance LLC (the “Other Financing”).
F. WHEREAS, as more particularly provided below, Borrower will deliver to the City, among other items, the Corporate Guaranty and Commitment Letter (as those terms are defined below) to, respectively, guarantee repayment of the Loan by Borrower in accordance with the terms of those instruments and this Agreement.
G. WHEREAS, the City desires to make the Loans to Borrower, on the terms and conditions set forth herein.
NOW, THEREFORE, the Parties agree as follows:
AGREEMENT
1.0 LOANS; EFFECTIVE DATE.
1.1 Loans. The City agrees, subject to the terms and conditions of this Agreement and in consideration of the representations, covenants and obligations of Borrower contained in this Agreement, the Note, the Corporate Guaranty and any other documents or agreements given in connection herewith (collectively such instruments, documents and agreements as amended, modified, supplemented, and replaced from time to time being referred to as the “Loan Documents”) to make the Loans to Borrower, to be used solely for the purposes described herein.
1.2 Effective Date. This Agreement is dated ___________, 2026, for reference purposes only. This Agreement shall not become effective until the date on which all of the following are true (“Effective Date”): (i) this Agreement is approved and executed by the authorized representative(s) of Borrower and delivered to City; (ii) following all legally required notices and hearings, this Agreement is approved by the governing board of City and any other Governmental Agency, including without limitation the City Council of the City of Santa Fe Springs; and (iii) this Agreement is executed by the authorized representative(s) of City and delivered to Borrower. Upon the occurrence of the Effective Date, the Parties shall acknowledge the Effective Date to each other in writing.
2.0 PROMISSORY NOTE; LOAN REPAYMENT.
2.1 Note. As one of the conditions to disbursement of the Loans to Borrower under Section 6 below, Borrower shall execute a Promissory Note (as amended, modified, supplemented, and replaced from time to time, collectively the “Note”) in the form of Exhibit “B”, attached hereto, which Note sets forth terms and conditions for the repayment of the Loans.
2.2 Interest. The disbursed and unpaid principal balance of the Loans shall bear interest commencing on the date on which the applicable Loan proceeds are disbursed for the account of Borrower as provided herein, and ending on the date paid, at a variable rate of interest per annum at the Local Agency Investment Fund (LAIF) Apportionment Rate, for each disbursement at the most recently published rate published by the CA State Treasurer’s Office (the “Interest Rate”).
Such interest shall be computed on the basis of actual number of days elapsed of a three hundred sixty (360) day year. Notwithstanding the foregoing, and without limiting any other remedy of the City, amounts not paid by Borrower when due shall bear interest from the date due to the date paid at the rate of ten percent (10%) per annum (“Default Rate”).
2.3 Payment Dates and Amounts; Term. As set forth in greater detail in the Note, the Loans are not amortized. As set forth in this Section 2.3, interest, if any, will accrue on the outstanding balance until it is paid in full and a balloon payment will be required on the Maturity Date. Borrower shall make quarterly payments of interest on the first calendar day of each calendar quarter following the Effective Date through the Maturity Date.
In no event shall any Loan payment attributable to an Event of Default (as hereafter defined) or acceleration be deferred.
Notwithstanding any other provision of the Note or of this Agreement, unless due sooner, the entire outstanding principal balance of the Loans together with any outstanding interest and any other sums payable under the Note shall be due and payable in full on the date that is forty- two (42) months from the date of this Agreement (the “Maturity Date”); provided, that if Borrower delivers written notice to the City requesting an extension of the Maturity Date, and such notice is received by the City no later than the date that is three (3) years from the date of this Agreement, then, subject to the City's written consent (which may be granted or withheld in the City's reasonable discretion), the Maturity Date shall instead be the date that is five (5) years from the date of this Agreement.
The term of this Agreement (“Term”) shall be from the date of this Agreement through and including the Maturity Date.
3.0 ACCELERATION.
Notwithstanding the payment terms set forth in Section 2 above, upon the occurrence of any Event of Default as set forth in Section 17 below, the entire outstanding principal balance of the Note, together with any outstanding interest and other amounts payable thereunder, shall, at the election of the City and upon notice to Borrower thereof, become immediately due and payable without presentment, demand, protest or other notice of any kind, all of which are hereby waived by Borrower.
4.0 PREPAYMENT; APPLICATION OF PAYMENTS.
At any time after the disbursement of any Loan proceeds, Borrower may prepay all or a portion of the unpaid principal amount of the Loans and accrued interest and any other sums outstanding without penalty. Borrower hereby agrees and understands that the prepayment of the Note shall not relieve Borrower of the duty to comply with the covenants described in Sections 10, 11 and 12 herein, and such obligations and covenants shall remain in full force and effect pursuant to their terms. All payments, including any prepayments or funds received upon acceleration pursuant to Section 3 above, shall be applied first toward any outstanding costs of collection or other amounts (excluding Loan principal or interest thereon) due under the Note or this Agreement, then toward outstanding interest accrued at the Default Rate of ten percent (10%) per annum (simple interest), if any, then toward outstanding interest accrued at the Interest Rate, if any, and finally toward the remaining principal balance under the Note.
5.0 GUARANTEE AND SOURCE OF PAYMENT.
5.1 Reserved.
5.2 As a material inducement for City to make the Loans, as a condition precedent to the disbursement of the Loans, Juanita’s Intermediate, LLC (the “Guarantor”)shall have executed and delivered to City a guaranty of payment and performance ( the “Corporate Guaranty”), and [Apex Capital] (the “Sponsor”) shall have executed and delivered to City the Equity Commitment Letter (as defined below), which shall constitute separate and independent obligations of the Guarantor and the Sponsor.
5.2 As further independent assurance that Borrower will timely repay the Loans, Borrower shall cause the Sponsor to duly execute an equity commitment letter (“Equity Commitment Letter”) in form and substance acceptable to the City in its sole and absolute discretion (as amended, modified, supplemented, and replaced from time to time).
6.0 CONDITIONS FOR LOAN CLOSING AND DISBURSEMENT.
6.1 Reserved
6.2 Closing Conditions. The obligation of the City to disburse the initial Loan proceeds under this Agreement shall be expressly subject to satisfaction of all of the following conditions (collectively, the “Closing Conditions”):
(1) General Conditions.
(a) Execution of this Agreement and all Loan Documents, as applicable, by the City and Borrower, and delivery of a fully executed copy to the City; (b) Borrower’s due execution and delivery of the Note to the City; (c) Guarantor’s due execution of the Corporate Guaranty; in form and substance satisfactory to the City Manager in consultation with the City’s Finance Director; (d) Borrower’s delivery to the City of a fully executed copy of the Equity Commitment Letter in form and substance satisfactory to the City’s Finance Director;
(e) Satisfactory evidence that the Borrower has acquired a leasehold interest (or other similar interest to the City’s approval) in the property located at 13100 Arctic Circle, Santa Fe Springs, CA 90670;
(f) Satisfactory evidence to the Economic Development Director that the Borrower is pursuing in good faith all required land use permits and building permits for the property;
(g) Receipt by the City from Borrower of such other documents, certifications and authorizations as are reasonably required by the City, in form and substance satisfactory to the City, evidencing that (i) this Agreement and the other Loan Documents are duly and validly executed by Borrower and constitute the valid and enforceable obligation of Borrower pursuant to their respective terms, and (ii) execution and delivery of the Loan Documents, and the performances thereunder by Borrower, will not breach or violate any applicable law or governmental regulation nor constitute a default under any material instrument or agreement to which Borrower is a party (and if requested by the City, an opinion of legal counsel acceptable to the City opining as to the issues described in this subsection and such other matters as required by the City’s legal counsel); (h) No Event of Default shall exist under this Agreement and no default or event or circumstances shall exist which, with the giving of notice or passage of time or both would become a default under, any other Loan Document or any other agreement or instrument relating to Other Financing;
(i) Borrower has demonstrated to the satisfaction of the City’s Finance Director (or his or her designee) that all construction and permanent financing sources for development and operation of the Project, including but not limited to Borrower’s equity, are or will be available in sufficient amounts to provide for full and timely completion and ongoing operation of the Project;
(j) Borrower shall have provided to the City, in form satisfactory to the City, copies of (i) Borrower’s governing limited partnership agreement, operating agreement, or articles and bylaws, together with a certification by the managing member, managing general partner, or president that such agreement or articles and bylaws has not been amended or modified except as described in the certification, (ii) a good standing certificate from the California Secretary of State, certifying that Borrower is duly qualified and in good standing, and (iii) all other documents necessary to evidence to the City’s satisfaction that the individuals and entities executing this Agreement and the other Loan Documents, and other entities on whose behalf such documents are executed, are fully authorized to do so and to bind the respective entities, including Borrower, to the terms hereof and thereof (and if Borrower is managed or operated by a corporate, limited liability or partnership entity then such entity shall provide the same information and evidence); (k) Borrower shall have provided to or have caused the provision to the City, in form satisfactory to the City in its sole and absolute discretion, copies of, for the Sponsor and the Guarantor: (i) governing partnership agreement, operating agreement, or articles and bylaws, together with a certification by the managing member, managing general partner, president or other officer that such agreement or articles and bylaws has not been amended or modified except as described in the certification, (ii) a good standing certificate from the Secretary of State of the applicable state, certifying that the respective entity is duly qualified and in good standing, (iii) a letter from the Sponsor’s fund administrator that the Sponsor has adequate liquid capital to fulfill the obligations under the Equity Commitment Letter; and (iv) all other documents necessary to evidence to the City’s satisfaction that the individuals and entities executing this Agreement and the other Loan Documents, and other entities on whose behalf such documents are executed, are fully authorized to do so and to bind the respective entities, to the terms hereof and thereof (and if managed or operated by a corporate, limited liability or partnership entity then such entity shall provide the same information and evidence); (l) Borrower shall have furnished the City with evidence reasonably satisfactory to the City that JPMorgan Chase Bank, N.A., as lender under that the Borrower’s Credit Agreement dated as of April 9, 2025 (as may be amended, amended and restated, modified, supplemented, extended, renewed, restated, refinanced or replaced, the “ABL Credit Agreement”) and Proterra Finance, as administrative agent under the Borrower’s Term Loan Credit Agreement dated as of April 9, 2025 (as may be amended, amended and restated, modified, supplemented, extended, renewed, restated, refinanced or replaced, the “Term Loan Credit Agreement”) each consent to the Loans and that Borrower is not in default under the ABL Credit Agreement or the Term Loan Credit Agreement, as applicable;
(m) City shall have executed and delivered subordination agreements in form and substance reasonably satisfactory to the City in favor of JPMorgan as lender under that the ABL Credit Agreement and Proterra Finance, as administrative agent under the Term Loan Credit Agreement;
(n) Any other due diligence submittals required by the City at the City’s sole discretion; and
(o) Borrower shall have delivered or caused the delivery of such documents, evidence and agreements or taken such actions as required by the City to confirm, secure, or further confirm or secure the transactions contemplated by this Agreement, at the City’s sole discretion.
6.3 Close of Loans. When, and only when, City has confirmed that the applicable Closing Conditions set forth in Section 6.2, above, have been satisfied, and has received written certification from the Finance Director of the City, or his designee, that all other Closing Conditions have been timely satisfied, waived or delayed for satisfaction as outlined in Section 6.6 below, then City shall make available one or more Loans to the Borrower during the Term and shall proceed with disbursing such Loan proceeds in accordance with any Draw Disbursement Request from Borrower as set forth in Section 6.4 below.
6.4 Conditions Precedent to each Disbursement of Funds. The disbursement of each Loan shall not occur prior to satisfaction of all conditions precedent to the enumerated in Section
6.2 hereto, upon satisfaction of which, Borrower may submit to City, if not previously provided, and City shall approve in its sole and absolute discretion, the following:
(1) Disbursement Request/Demand letter with respect to each Loan, which shall be delivered at least fifteen (15) days prior to the proposed date of disbursement and shall include, (i) a certification by Borrower that there are no defaults under the Agreement or any other Loan Documents, Other Financing, or the loan or grant documents pertaining to any other loans or grants related to the Project or the Site, its partnership agreement, or other governing documents, or any agreements with its investors and no event or condition exists which, with the giving of notice, passage of time or both would result in a default thereunder, (ii) reaffirmation that the representations and warranties made by Borrower in the Agreement and the other Loan Documents are true and correct in all material respects as of the date of such request or letter, (iii) a certification by Borrower that all information and materials provided to the City in connection with the request or letter are true and complete and do not omit any material information and (iv) the amount of Loan requested and the proposed date of disbursement of such Loan; and (2) Wiring instructions for such Loan to be disbursed; and (3) A proposed schedule of expenses (which may include inventory costs) for each Disbursement Request.
Collectively these items make up the draw disbursement request (“Draw Disbursement Request”).
6.5 Time is of the Essence. Time is of the essence with respect to the rights and obligations of the Parties under this Agreement. The Borrower may request one or more Loans from the City from time to time during the Term; provided that in no event shall the aggregate amount of Loans at any one time outstanding exceed the Maximum Principal Amount.
7.0 POST-CLOSING CONDITIONS.
As a material term of this Agreement, breach of which shall give the City the right to proceed with any and all remedies set forth in this Agreement and the Loan Documents, the Loans shall be subject to the express condition that Borrower satisfies the following post-closing conditions (“Post-Closing Obligations”) to the satisfaction of City, in its sole and absolute discretion.
(a) Proceed diligently, and achieve Completion of the Project (as defined in Section 10.12 below), no later than twenty-four (24) months following sixty (60) days from the disbursement of the initial Loan.
8.0 RESERVED.
9.0 PURPOSE OF LOAN.
The proceeds of the Loans shall be used by Borrower only for relocation expenses and equipment purchases (including repayment of indebtedness incurred for purposes of financing relocation expenses and equipment purchases) and other general corporate purposes related thereto at the Site. In no event shall Borrower use or otherwise invest the proceeds of the Loans except as expressly provided in this Agreement. Borrower shall, at City’s reasonable request, provide proof acceptable to the City that the Loan proceeds have been used solely for the purposes indicated in this paragraph and in accordance with this Agreement.
10.0 COVENANTS OF BORROWER.
In addition to and without limitation of Borrower’s Post-Closing Obligations as set forth in Section 7.0 hereto, as additional consideration for the making of the Loans by the City, Borrower covenants as follows throughout the Term of the Loans until repayment in full of the Loans:
10.1 Compliance with Laws.
(1) Applicable Governmental Restrictions. Borrower shall comply with all Applicable Governmental Restrictions. As used herein, “Applicable Governmental Restrictions” shall mean and include any and all laws, statutes, ordinances, codes, rules, regulations, directives, writs, injunctions, orders, decrees, rulings, conditions of approval, or authorizations, now in force or which may hereafter be in force, of any governmental entity, agency or political subdivision as they pertain to the Borrower, performance of this Agreement or development or operation of the Project, including specifically but without limitation all code and other requirements of the jurisdiction in which the Project is located; the National Environmental Policy Act of 1969, as amended (“NEPA”), the California Environment Quality Act (“CEQA”) (Pub. Res. Code § 21000 et seq.); the laws specified in Section 13, below; anti discrimination laws including but not limited to the Fair Employment and Housing Act (California Government Code at § 12900 et seq.), prevailing wage laws (e.g. Cal. Labor Code 1720 et seq., and the federal DavisBacon Act (40 U.S.C. 276a)), any other applicable federal, state and local laws. Borrower shall indemnify, defend (with counsel acceptable to the indemnified parties) and hold the City and its elected and appointed officers, officials, representatives, employees, and agents harmless from any suit, cost, attorneys’ fees, claim, administrative proceeding, damage, wage award, fine, penalty or liability arising (whether by negligence, willful act or otherwise) out of or relating to Borrower’s failure to comply with any Applicable Governmental Restrictions, including, without limitation, the nonpayment of any prevailing wages required to be paid, failure to maintain wage records, failure to post prevailing wage schedules, or other acts or omissions, regardless of whether they are the responsibility of the contractor or the party awarding the contract. Borrower is solely responsible for determining the applicability of laws and should not rely on statements by the City.
The Project is subject to California Labor Code Sections 1720 et seq., and Borrower is responsible for compliance and/or causing the compliance therewith, and for the adherence to the certification of compliance with state and any applicable federal prevailing wage law. Borrower acknowledges that the City has not represented that the Project is not a “public work” as defined in Labor Code Section 1720 et seq.; and Borrower shall notify the City and Borrower’s contractors and subcontractors immediately upon learning of any investigation or determination by the California Department of Industrial Relations relating to whether or not the Project is a “public work”.
10.2 Revenue Disclosures. Borrower shall make available for inspection and audit to the City’s representatives, upon seventy-two (72) hours written request, from time to time during the Term, at Borrower’s offices, or, if requested by the City, at another location within Los Angeles County, all of the books and records relating to the operation of the Project and this Agreement.
All such books and records shall be maintained by Borrower for a period of five (5) years following the expiration or earlier termination of the Term; provided that in the event any litigation, claim or audit is started before the expiration of the Term, said books and records shall be retained until all litigation, claims, or audit findings involving said books and records shall have been resolved.
10.3 Other Reports. Upon seventy-two (72) hours written notice, any time during the Term, Borrower shall prepare and submit to the City, any financial, program progress, monitoring, evaluation or other reports (including, but not limited to, documents related to construction and project financing) reasonably required by the City or its representatives as they relate to the Project or this Agreement; provided, however, if such requested reports are not capable of being prepared and submitted to the City within such seventy-two (72) hour period, then within a reasonable time thereafter. Borrower shall ensure that its employees, agents, officers, and board members furnish such information, which in the reasonable judgment of the City representatives, may be relevant to a question of compliance with this Agreement and/or the Loan Documents. Borrower shall retain all existing records and data relating to the Project for five (5) years following the expiration of the Term. In the event any litigation, claims or audit is started during the Term, said books and records shall be retained until all litigation, claims or audit findings involving said books and records have been resolved.
10.4 Inspection. Borrower shall allow the City to inspect its books and records pertaining to the Project, Site, Loans, expenditures, and associated financial condition and use of funds, as applicable, within seventy-two (72) hours of City request.
10.5 Annual Financial Statements. The Borrower shall deliver to the City copies of the annual financial statements of Borrower.
If Borrower provides any material written reports, statements or other documents, regarding the financial conditions, operating conditions, management conditions or projections thereof related to all or any part of the Project to any lenders, creditors, other governmental/regulatory agencies, investors, or credit rating agencies, Borrower shall concurrently provide copies to the City.
10.6 Indemnification. In addition to any other rights or defenses the Public Agencies (defined below) may have under or arising from this Agreement or any applicable laws, Borrower agrees to indemnify, defend (with counsel approved by the City) and hold harmless the City and its elected and appointed officers, officials, representatives, employees, and agents (hereinafter collectively referred to as “Public Agencies”) from and against any and all liability, demands, damages, claims, causes of action, fees (including reasonable attorneys’ fees and costs and expert witness fees), and expenses, including, but not limited to, claims for bodily injury, property damage, and death, that arise (whether by negligence, willful act or otherwise) out of, pertain to, or relate to this Agreement or any of the other Loan Documents, the services and/or materials provided pursuant to this Agreement or any of the other Loan Documents, or Project (hereinafter collectively referred to as “Liabilities”). Borrower shall not be required to indemnify, defend, and hold harmless the Public Agencies from any Liabilities that arise from the sole negligence or willful misconduct of the Public Agencies, Public Agencies’ officers or employees. Such indemnification language shall also be incorporated in Borrower’s contracts with entities that Borrower has contracted with for purposes of this Agreement in favor of the Public Agencies, except for Design Professionals. (“Design Professionals” shall include, but not be limited to, the following: architects, structural engineers, civil engineers, geotechnical engineers and environmental consultants). However Public Agencies may waive this requirement in the event that such contracts were entered into prior to the execution of this Agreement. Borrower waives and releases any rights it may have to any express or implied indemnification from any of the Public Agencies under or arising from this Agreement or the other Loan Documents or any applicable laws.
In the event that Borrower is acting as a Design Professional, Borrower further agrees to indemnify, defend (with counsel approved by Public Agencies) and hold harmless the Public Agencies from and against any and all Liabilities that arise out of, pertain to, or relate to the negligence, recklessness, or willful misconduct of Borrower for the performance of professional services pertaining to this Agreement. Such indemnification language, in favor of the Public Agencies, shall also be incorporated in Borrower’s contracts with any Design Professionals in favor of the Public Agencies, however Public Agencies may waive this requirement in the event that such contracts were entered into prior to the execution of this Agreement.
These indemnification provisions shall remain in full force and effect and survive the termination and/or expiration of this Agreement. Borrower agrees to require, through its contractual language, any entities with which it contracts to agree to and abide by the abovementioned indemnification requirements in favor of the Public Agencies, as applicable to each of them. Borrower waives and releases any rights it may have to any express or implied indemnification from any of the Public Agencies under or arising from this Agreement or any applicable laws.
10.7 Audit by State and Federal Agencies. In the event this Agreement or the Loan is subjected to audit, monitoring or other inspections by appropriate state and federal agencies, during or after the Term of this Agreement, Borrower shall comply with such inspections and pay on behalf of itself and the City the full amount of the cost to the inspecting agency which result from such inspections, if any, unless such inspection and any resulting liability arises solely from the gross negligence or willful misconduct of the City.
10.8 Program Evaluation and Review. Borrower shall allow the City and its authorized representatives to inspect and monitor its facilities and program operations as they relate to the Project or this Agreement, including the interviewing of Borrower’s staff, tenants, and other program participants, as reasonably required by the City during the Term.
10.9 Reserved.
10.10 Reserved
10.11 Reserved
10.12 Construction Requirements. Following the disbursement of the Loans, Borrower shall proceed diligently, and achieve Completion of the Project, as defined below, no later than twenty-four (24) months following sixty (60) days from the first disbursement of any the Loans. “Completion of the Project” shall be deemed to have occurred when the Project has received, a certificate of occupancy.
10.13 Reserved.
10.14 Environmental Conditions. Borrower shall comply with any NEPA or CEQA mitigation measures or other environmental conditions imposed by the City, or any other applicable governmental authority in connection with the Project.
10.15 Reserved.
10.16 Organizational Documents. Borrower’s “Organizational Documents” shall mean the documents and agreements which govern the formation of Borrower, the powers and purpose of Borrower, and which describe how the Borrower will be managed including the limited partnership agreement and certificate of limited partnership; operating agreement and certificate of formation; or bylaws, shareholder agreements, and articles of incorporation; depending on Borrower’s entity type.
(1) Borrower shall not amend or modify in a manner adverse to the City, or terminate, its Organizational Documents without the prior written consent of the City. Borrower shall provide City with its amendments and modifications within 30 days of their occurrence. (2) There shall be no default under the Organizational Documents of Borrower beyond any applicable cure period provided therein. Borrower shall notify the City if there are any defaults and the status of the cure of any such defaults.
10.17 Reserved.
10.18 Design Standards. Borrower agrees to adhere to all applicable City approvals and any other applicable governmental requirements.
10.19 Reserved.
10.20 Reserved.
10.21 Reserved.
10.22 Significant Changes. Borrower will promptly notify the City, if Borrower becomes aware of the occurrence of (each a “Material Adverse Event”): (i) any Event of Default or event or circumstance which with the passage of ten (10) days or less or giving of notice or both would become a default under any of the Loan Documents; (ii) the occurrence of any material adverse change in the financial condition of Borrower from its financial condition reflected in the financial statement provided to the City on or before the date of this Agreement or any subsequent twelve (12) month period; or (iii) the occurrence of any material adverse change in the occupancy or operation of the Site or the Project. A Material Adverse Event shall include (a) one or more judgments for the payment of money in an aggregate amount of one hundred thousand dollars ($100,000) or more is rendered against the Borrower and the same shall remain undischarged for a period of thirty (30) consecutive days; (b) an event of default (or any similar term) under any agreement binding on Borrower evidencing debt for borrowed money in aggregate amount of one hundred thousand dollars ($100,000) or more; (c) the occurrence of any event or circumstance which would cause Borrower to be insolvent, or bankrupt, as such terms are used in the California Code of Civil Procedure Section 493.010, Uniform Commercial Code, or the US Bankruptcy Code; or (d) if a receiver is appointed for Borrower, the Site, Project or any part thereof. The occurrence or existence of a Material Adverse Event is a default under this Agreement.
11.0 OPERATION OF PROJECT. Throughout the Term of the Loans and until repayment in full of the Loans:
11.1 Operation of Project. Borrower hereby agrees that the Borrower shall use the Site solely for the purpose of developing, constructing, equipping and operating the Project as a food processing facility and accompanying Borrower’s offices. Borrower hereby covenants on behalf of itself that Borrower shall use the Site solely for the purpose of operating the Project, ancillary improvements thereon and Borrower’s offices, in accordance with this Agreement.
11.2 Operations and Maintenance.
Borrower shall, at its expense, upon during and after completion of the Project (i) maintain all improvements and landscaping on the Site in good working order, condition, and repair (and, as to landscaping, in a healthy and thriving condition) in accordance with all Applicable Governmental Restrictions, and (ii) manage the Project and Project finances reasonably prudently and in compliance with Applicable Governmental Restrictions.
Borrower shall, prior to development of the Project, ensure the Site is secure, clean and free of debris, graffiti, and adequately maintained, subject to the City’s review and approval.
11.5 Delivery of Copies of Documents. All documents, agreements, certificates, reports, written information and other materials given by Borrower to the City are without further action deemed certified by Borrower as being true and complete copies and unless expressly stated in writing to the contrary and do not omit any material information. If Borrower determines that any materials provided to the City are not true and complete or omit any material information, Borrower shall notify the City and update such information as appropriate.
11.6 Reserved.
12.0 BORROWER'S OBLIGATION TO REFRAIN FROM DISCRIMINATION.
Borrower shall not discriminate against or segregate any person, or group of persons, on account of race, color, national origin, gender, gender identity, gender expression, sex, religion, marital or familial status, disability, sexual orientation, ancestry, age, medical condition, source of income, genetic information, citizenship, primary language, immigration status (except where explicitly prohibited by federal law), arbitrary characteristics, and all other classes of individuals protected from discrimination under federal or state laws or required to be protected from discrimination, individuals perceived to be a member of any of the preceding classes, or any individual or person associated with any of the preceding classes, in the participation in, the benefits of, any program or activity funded in whole or in part by the Loans, or otherwise in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Borrower itself or any person claiming under or through Borrower establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of invitees, licensees, tenants, lessees, subtenants, sublessees, or vendees of the Site or any portion thereof, and shall require deeds, leases, and contracts to contain or be subject to any nondiscrimination and nonsegregation clauses required under applicable law. The nondiscrimination and nonsegregation covenants set forth herein shall remain in effect in perpetuity.
13.0 RESERVED.
14.0 INDEPENDENT CONTRACTOR.
In their performance of this Agreement, all Parties hereto will be acting in an independent capacity and not as agents, employees, partners, joint venturers, or associates of one another. The employees or agents of one Party shall not be deemed or construed to be the agents or employees of the other Party for any purpose whatsoever, including workers' compensation liability.
Borrower shall bear the sole responsibility and liability for furnishing workers’ compensation benefits to any person for injuries arising from or connected with services performed on behalf of Borrower pursuant to this Agreement.
15.0 ASSIGNMENT OF INTEREST IN THE SITE OR THE PROJECT.
15.1 Except as otherwise expressly permitted in this Section 15, without the prior written approval of the City in its sole and absolute discretion Borrower shall not (individually and collectively referred to as a “Transfer”): (i) directly or indirectly, by operation of law, voluntarily or involuntarily, sell, gift, encumber, assign, lease, sublease, license, or otherwise transfer or permit the transfer of or grant an option to transfer (collectively, “Change”) all or any portion of (x) its leasehold interest in the Site, or Property, (y) its operation of the Project or (z) its rights or obligations under the Agreement, or other Loan Documents; (ii) allow the Sponsor and its affiliates to cease to own, directly or indirectly, at least fifty-one percent (51%) of the ownership and/or control of the Borrower, in the aggregate, taking all transfers into account on a cumulative basis; (iii) [reserved]; (iv) change any of Borrower’s rights or obligations under any of the Loan Documents; or (v) wind up, liquidate or dissolve Borrower or its affairs or enter into any transaction of merger, reorganization, or consolidation of Borrower (unless Borrower is the surviving entity). Any Transfer in violation of the provisions of this Agreement shall be a material default under this Agreement entitling the City to pursue the rights and remedies hereunder.
Borrower hereby agrees that any purported Transfer not approved by the City as required herein shall be a material default under this Agreement and all amounts principal, interest, or otherwise outstanding under the Loan Documents may be accelerated and deemed immediately due and owing provided however, City may elect in its sole discretion, to deem such Transfer ipso facto voidable, and no voluntary or involuntary successor to any interest of Borrower under such a proscribed Transfer shall acquire any rights pursuant to this Agreement or any of the other Loan Documents.
15.2 At any time Borrower desires to effect a Transfer hereunder which requires the prior consent of the City, Borrower shall notify the City in writing (the “Transfer Notice”) and shall submit to the City for its prior written approval (i) all proposed agreements and documents (collectively, the “Transfer Documents”) memorializing, facilitating, evidencing and/or relating to the circumstances surrounding such proposed Transfer, and (ii) a certificate setting forth representations and warranties by Borrower and the proposed transferee to the City sufficient to establish and ensure that all requirements of this Section 15 have been and will be met. No Transfer Documents shall be approved by the City unless they expressly provide for the assumption by the proposed transferee of all of Borrowers obligations under the Loan Documents (except in cases where the transferee is not becoming a successor to the Borrower or is not becoming a general partner of Borrower, the transferee shall acknowledge the Loan Documents, all obligations thereunder, and the obligations for the construction, operation, maintenance, and management of the Project as binding upon Borrower). The Transfer Notice shall include a request that the City consent to the proposed Transfer. The City agrees to make its decision on Borrower’s request for consent to such Transfer promptly, and use reasonable efforts to respond not later than forty-five (45) days after the City receives the last of the items required by this Section 15. In the event the City consents to a proposed Transfer, then such Transfer shall not be effective unless and until the City receives copies of all executed and binding Transfer Documents which Transfer Documents shall conform with the proposed Transfer Documents originally submitted by Borrower to the City.
15.3 Reserved.
15.4 Reserved.
15.5 Notwithstanding anything in this Agreement to the contrary, Borrower agrees that it shall not be permitted to make any Transfer, whether or not the City’s consent is required therefore and even if the City has consented thereto without expressly waiving the following requirements, (i) if there exists an outstanding Event of Default under this Agreement or a default under any other Loan Document which has not been cured; (ii) any outstanding amount under the Loan Documents or Other Financing is due or shall become due during the forty-five (45) day period following such Transfer request to the City, unless such amount is prepaid with proof thereof provided to the City; (iii) such Transfer complies with the rules and regulation which pertain to the funding sources used for the Loan and the Project; (iv) if the Transfer results in a change of leasehold interest in the Property, the transferee acknowledges and assumes the obligations of the Borrower under this Agreement and any other applicable governmental requirements, including but not limited to Borrower’s obligation to timely cause the Completion of Construction and to maintain and operate the Project described herein; and (v) any third party guaranty or indemnity given in connection with or in furtherance of the Loan, including but not limited to the Corporate Guaranty and Equity Commitment Letter, shall be reaffirmed by the parties thereto in an agreement that is in form and substance acceptable to the City or a replacement guarantor/indemnitor acceptable to the City shall enter into a replacement guaranty/indemnity in form and substance acceptable to the City, provided that, if the Transfer renders the Corporate Guaranty and Equity Commitment letter invalid or unenforceable, as determined by the City Attorney in its sole and absolute discretion, then the City shall have the right to demand that Borrower cause the provision of a replacement instrument in form and substance acceptable to the City in its sole and absolute discretion, and the City shall not consider the Transfer request until such replacement instrument is received.
15.6 The provisions of this Section 15 shall apply to each and any Transfer and the City’s consent to a given Transfer shall not imply that the City will consent to any subsequent Transfer.
16.0 ASSIGNMENT OF THIS AGREEMENT
This Agreement shall be assignable by Borrower only if Borrower obtains the prior express written consent of the City (which must be granted by the City Council), which consent may be withheld by the City in theirsole and absolute discretion. Notwithstanding anything to the contrary in this Agreement, no purported assignment of this Agreement and the Loans shall be effective if such assignment would violate the terms, conditions and restrictions of this Agreement or any Applicable Governmental Restrictions. The City's consent to such assignment shall be expressly conditioned upon (i) the assignee's execution of such documents as required by the City in its sole discretion including, without limitation, any and all documents deemed necessary by the City to provide for said assignee’s assumption of all of the obligations of Borrower hereunder, under the Loan Documents to the reasonable satisfaction of the City Attorney; (ii) the City’s approval of the financial and credit-worthiness of such proposed assignee and the assignee’s ability to perform all of the Borrower’s obligations under this Agreement and the Note and all of the other Loan Documents; (iii) as set forth in Section 15.5 hereto, if applicable, the provision of a reaffirmation or replacement of any third party guaranty or indemnity given in connection with or in furtherance of the Loans, including but not limited to the Corporate Guaranty and Equity Commitment Letter, in a form and substance acceptable to the City, and if applicable by a replacement guarantor/indemnitor acceptable to the City.
Any attempt by Borrower to assign any performance or benefit under the terms of this Agreement, without the prior written consent of the City as provided herein, shall be null and void and shall constitute a material breach of this Agreement. In accordance with the foregoing, in the event of (i) a sale or transfer of all or any portion of (x) Borrower’s leasehold interest in the Site or the Property, (y) Borrower’s operation of the Project, or (z) its rights or obligations under the Agreement, Loan Documents or any other agreement affecting the control, and rights and obligations to construct, operate, maintain, manage the Project, or (ii) a sale or transfer resulting in the Sponsor and its affiliates to cease to own, directly or indirectly, at least fifty-one percent (51%) of the ownership and/or control of the Borrower, in the aggregate, taking all transfers into account on a cumulative basis, occurring without the written consent of the City, or otherwise as set forth herein, the City may, at its option, by written notice to Borrower, declare Borrower in default under this Agreement.
17.0 EVENTS OF DEFAULT AND REMEDIES
17.1. Borrower Events of Default. The occurrence of any of the following shall, following expiration of any applicable notice and cure periods, constitute an event of default by Borrower hereunder (“Event of Default”), each of which are acknowledged by Borrower to constitute a material default under this Agreement:
(1) The failure of Borrower to pay or perform any monetary covenant or obligation hereunder or under the terms of the Note or any other Loan Document, without curing such failure within ten (10) days after receipt of written notice of such default from the City, as applicable. Notwithstanding anything herein to the contrary, the herein described cure period shall not apply to a failure by Borrower to timely repay the Loans at the Maturity Date of the Note; (2) The failure of Borrower to perform any nonmonetary covenant or obligation hereunder or under the terms of the Note or any other Loan Document, without curing such failure within thirty (30) days after the giving of written notice of such default from the City specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency [NTD: Existing Loans not applicable here.]; and (ii) if any default with respect to a nonmonetary obligation is such that, through no fault of Borrower, it cannot reasonably be cured within a thirty (30) day period, Borrower shall have a further period, as reasonably determined by the City, to cure such default provided Borrower commences the cure within said thirty (30) day period and diligently prosecutes such cure to completion but in no event shall the total cure period including the initial thirty (30) day period be more than one hundred twenty (120) days in total, however, if the default, in the reasonable determination of the City, relates to an immediate health or safety concern for the Project or its occupants then the City shall only be required to provide such notice and cure period as the City considers reasonable under the circumstances.
Notwithstanding anything herein to the contrary, the herein described notice requirements and cure periods shall not apply to any Event of Default described in Sections 17.1(3) through 17.1(10) below; or for nonmonetary covenants or obligations otherwise set forth in the Loan Documents where an express time period is otherwise provided;
(3) The falsity in any material respect of any representation made by Borrower under the terms of or in connection with this Agreement, the Note, or any other Loan Documents (a cure period does not apply to this subsection);
(4) Borrower, the Guarantor or the Sponsor shall (i) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (ii) fail to pay or admit in writing its inability to pay its debts generally as they become due, (iii) make a general assignment for the benefit of creditors, (iv) be adjudicated as bankrupt or insolvent, or (v) commence a voluntary case under the Federal bankruptcy laws of the United States of America or file a voluntary petition that is not withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding;
(5) If without the application, approval or consent of Borrower, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Borrower, Guarantor or Sponsor, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Borrower or of all or any substantial part of Borrower’s assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower, in good faith, the same shall (i) result in the entry of an order for relief or any such adjudication or appointment, or (ii) continue undismissed, or pending and unstayed, for any period of ninety (90) consecutive days; (6) Following initial Completion of the Construction, voluntary cessation of the operation of the Project for a continuous period of more than thirty (30) days or the involuntary cessation of the operation of the Project in accordance with this Agreement for a continuous period of more than sixty (60) days;
(7) Borrower shall be in breach of the provisions of Sections 15 or Section 16, or Section 8 of the Note, or the promissory notes for any other loans made pursuant to this Agreement;
(8) Borrower shall be in default under the Other Financing or any other secured or unsecured obligation relating to the Project, beyond any applicable cure period provided in such agreements, if any;
(9) Borrower shall fail to pay or cause the payment of all real property taxes relating to the Project prior to their delinquency or fail to obtain and maintain the policies of insurance in the form and substance required by the Loan Documents; and (10) The failure of Borrower to obtain the Other Financing contemplated by the Loan Documents.
(11) The failure after two years to acquire entitlements to operate its business at the Site.
17.2 City Remedies. Upon the occurrence of an Event of Default hereunder, the City may, in its sole discretion, take any one or more of the following actions:
(1) By notice to Borrower, declare the entire then unpaid principal balance of the Loans immediately due and payable, and the same shall become due and payable without further demand, protest or further notice of any kind, all of which are hereby expressly waived by Borrower. Upon such declaration, outstanding principal and (to the extent permitted by law) interest and any other sums outstanding in connection with the Loans shall thereafter bear interest at the Default Rate, payable from the date of such declaration until paid in full; (2) Take any and all actions and do any and all things which are allowed, permitted or provided by law, in equity or by statute, in the sole discretion of the City, to collect the amounts then due and thereafter to become due hereunder and under the Note or any other Loan Document, to exercise its rights under any Loan Document, and to enforce performance and observance (by specific performance or otherwise) of any obligation, agreement or covenant of the Borrower under this Agreement or under any other Loan Document; (3) Upon the occurrence of an Event of Default which is occasioned by Borrower's failure to pay money, whether under this Agreement or the Note or any other Loan Document, the City may, but shall not be obligated to, make such payment. If such payment is made by the City, Borrower shall deposit with the City, upon written demand therefor, such sum plus interest at the Default Rate. The Event of Default with respect to which any such payment has been made by the City shall not be deemed cured until such repayment has been made by Borrower. Until repaid, such amounts shall be deemed added to the outstanding principal amount of the Note;
(4) Upon the occurrence of an Event of Default described in Section 17.1(4) or
17.1(5) hereof, the City shall be entitled and empowered by intervention in such proceedings or otherwise to file and prove a claim for the whole amount owing and unpaid on the Loans and, in the case of commencement of any judicial proceedings, to file such proof of claim and other papers or documents as may be necessary or advisable in the judgment of the City and its counsel to protect the interests of the City and to collect and receive any monies or other property in satisfaction of its claim;
(5) If the City has not yet funded all amounts to be loaned or granted to Borrower under this Agreement or any other Loan Document or any other loan or grant agreement from the City or managed thereby, the City may suspend further payments under any such agreements or grants without liability to Borrower.
17.3 No Remedy Exclusive. No remedy herein conferred upon or reserved to the City is intended to be exclusive of any other available remedy or remedies, but each such remedy shall be cumulative and shall be in addition to every other remedy given under this Agreement or now or hereafter existing at law or in equity or by statute; and may be exercised in such number, at such times and in such order as the City may determine in its sole discretion. No delay or omission to exercise any right or power upon the occurrence of any Event of Default hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient by the City. In order to entitle the City to exercise any right or remedy reserved to it under this Agreement, no notice shall be required except as expressly provided herein.
17.4 City Default and Borrower Remedies. Upon fault or failure of the City to meet any of its obligations under this Agreement without curing such failure within thirty (30) days after receipt of written notice of such failure from Borrower specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency, Borrower may, as its sole and exclusive remedies:
(1) Bring an action in equitable relief seeking the specific performance by the City of the terms and conditions of this Agreement or seeking to enjoin any act by the City which is prohibited hereunder; and
(2) Bring an action for declaratory relief seeking judicial determination of the meaning of any provision of this Agreement.
Without limiting the generality of the foregoing, Borrower shall in no event be entitled to, and hereby waives, any right to seek indirect or consequential damages of any kind or nature from the City or any of the other Public Agencies and each of their respective members, directors, agents, officers, representatives and employees arising out of or in connection with this Agreement, and in connection with such waiver Borrower is familiar with and hereby waives the provisions of Section 1542 of the California Civil Code which provides as follows: “A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING
PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME
OF EXECUTING THE RELEASE AND THAT, IF KNOWN BY HIM OR HER, WOULD
HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
18.0 BANKRUPTCY.
Borrower represents and warrants to the City that: Borrower is not insolvent as such term is defined under applicable creditor rights laws including the US Bankruptcy Code and the Uniform Commercial Code; the completion of the transactions contemplated by the Loan Documents shall not cause the insolvency thereof; and the transactions contemplated by the Loan Documents are not being taken by Borrower with the intent to defraud any of its creditors or otherwise constitute a fraudulent conveyance under any applicable laws including a “voidable transfer” under the Uniform Fraudulent Transfer Act (Civil Code §3439 et. seq.).
The City shall have the continuing and exclusive right to apply or reverse and reapply any and all payments by the Borrower to any portion of the Loans, interest or any other monetary obligations arising from the Loan Documents. To the extent the Borrower makes a payment to the City, which is in whole or part subsequently invalidated, declared to be fraudulent or preferential, set aside or required to be repaid to a trustee, receiver or any other party under any bankruptcy law, state or federal law, common law or equitable cause, then such amounts shall be revived and continue in full force and effect, as if such payment or proceeds had not been received by the City.
19.0 JOINT AND SEVERAL LIABILITY.
If, at any time during the Term of this Agreement, Borrower comprises more than one person or entity, all such persons and entities shall be jointly and severally liable for performance of every obligation of Borrower under this Agreement without offset or deduction or allocation of liability and any right of subrogation among such persons or entities shall be suspended unless and until the City has been paid in full for all amounts related to this Agreement and all obligations of Borrower have been performed. It is not the intent of this provision that if Borrower is an entity such as a limited partnership or limited liability company that each of the constituent limited partners or members shall be liable under this provision.
20.0 RIGHT OF ACCESS AND INSPECTION.
The City shall have the right at any time during normal business hours and from time to time to enter upon the Site for purposes of inspection. If the City in its reasonable discretion determines that any work or materials are not in conformity with this Agreement or any Applicable Governmental Restrictions, or the Project is not being operated in conformity with this Agreement or any Applicable Governmental Restrictions, the City may at its election, after notice to and consultation with the Borrower and affording the Borrower thirty (30) days after such notice to cure the matter (or without notice in the case of an emergency) (provided, however, that if such matter cannot be cured within a thirty (30) day period, it shall be deemed cured if Borrower commences the cure within said thirty (30) day period and diligently prosecutes such cure to completion thereafter) and the Borrower fails to cure the matter, itself cure the matter. In addition, during the course of construction, the City may immediately stop the work and order replacement or correction of any work or materials not in conformity with this Agreement or any Applicable Governmental Restrictions. Inspection by the City of the Project or the Site is not to be construed as an acknowledgment, acceptance or representation by the City that there has been compliance with any terms or provisions of this Agreement, or that the work will be free of faulty materials or workmanship.
21.0 CONFLICT OF INTEREST; NO INDIVIDUAL LIABILITY.
No official or employee of the City shall have any personal interest, direct or indirect, in this Agreement or any other Loan Document, nor shall any official or employee of the City participate in any decision relating to this Agreement or any other Loan Document which affects such official’s or employee’s pecuniary interest in any corporation, partnership or association in which such official or employee is directly or indirectly interested. No official or employee of the City shall be personally liable in the event of a breach of this Agreement or any other Loan Document by an official or employee of the City. Borrower shall within not less than ten (10) days after learning of any such conflict of interest or facts which reasonably indicate that a conflict of interest may exist, notify the City Manager of the City.
22.0 AMENDMENTS, CHANGES AND MODIFICATIONS.
This Agreement may not be amended, changed, modified, altered or terminated without the prior written consent of the parties hereto.
23.0 EXECUTION OF COUNTERPARTS.
This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and the same document. The submission of this Agreement, any of the other Loan Documents to Borrower for review or signature does not constitute a commitment by the City to make the Loans to Borrower, and the Loan Documents shall have no binding force or effect unless and until they are executed and delivered by and between Borrower and the City and all of the conditions set forth in this Agreement with regard to the effectiveness of this Agreement have been satisfied.
24.0 NOTICES.
All notices, demands, requests, elections, approvals, disapprovals, consents or other communications given under the Loan Documents shall be in writing and shall be given by personal delivery, facsimile, certified mail (return receipt requested), or overnight guaranteed delivery service, postage and delivery charges pre-paid and addressed or faxed as follows:
If to the City: City of Santa Fe Springs
11710 E. Telegraph Rd.
Santa Fe Springs, CA 90670
Attn: Finance Director
(562) 868-0511
With a copy to: Olivarez Madruga Law Organization, LLP
500 S. Grand Ave., Floor 12
Los Angeles, CA 90071
Attention: Paloma McEvoy
(213) 744-0099
If to Borrower: Juanita’s Foods
, CA 9XXXX
Attn.: Robert Rosales, Chief Executive Officer
(310) XXX-XXXX
Email:
and
Juanita’s Foods
, CA 9XXXX
Attn.:
(310) XXX-XXXX
Email:
With a copy to:
Notices shall be effective upon receipt, if given by personal delivery; upon receipt, if faxed, provided there is written confirmation of receipt (except that if received after 5 p.m., notice shall be deemed received on the next business day); the earlier of (i) three (3) business days after deposit with United States Mail, or (ii) the date of actual receipt as evidenced by the return receipt, if delivered by certified mail; and one (1) day after deposit with the delivery service, if delivered by overnight guaranteed delivery service. Each party shall promptly notify the other party of any change(s) of address or fax to which notice shall be sent pursuant to this Agreement.
Notwithstanding the above, if a notice party refuses to accept notices given by courier or certified mail after two (2) attempts have been made to deliver notice by such means, then such notice shall be deemed received as of the date the first attempt at service of such notice was made. It is intended that notices given under any of the Loan Documents shall be made in the manner set forth in this Agreement, therefore if there is a conflict between the notice provisions of this Agreement and any other Loan Document, notice under such other Loan Document shall be deemed effective if made in accordance with the provisions of this Agreement unless such other Loan Document expressly states that the notice provisions contained therein are intended to prevail over the provisions in this Agreement.
25.0 SEVERABILITY.
Each provision, term, condition, covenant and/or restriction, in whole and in part, in this Agreement shall be considered severable. In the event any provision, term, condition, covenant and/or restriction, in whole and/or in part, in this Agreement is declared invalid, unconstitutional, or void for any reason, such provision or part thereof shall be severed from this Agreement and shall not affect any other provision, term, condition, covenant and/or restriction of this Agreement and the remainder of the Agreement shall continue in full force and effect.
26.0 INTERPRETATION.
Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the paragraphs of this Agreement are for convenience only and do not define or limit any terms or provisions. Time is of the essence in the performance of this Agreement by Borrower. Each Party has been represented by counsel in the negotiation of this Agreement, and it shall not be interpreted in favor of or against any Party on account of relative responsibilities in drafting. As used in this Agreement, the word “includes” or “including” means including without limitation, the word “or” is not exclusive and the words “herein,” “hereof,” “hereto,” and “hereunder” refer to this Agreement as a whole. Unless the context otherwise requires, references herein: (i) to articles, paragraphs, sections and exhibits mean the articles, paragraphs, sections and exhibits which are part of this Agreement, (ii) to an agreement, instrument or other document means such agreement, instrument or other document as amended, supplemented and modified from time to time to the extent permitted by the provisions thereof and by this Agreement, and (iii) to a law includes all regulations, policies, or procedures, adopted by any governmental units or related entities which administer such law and means such law as amended from time to time and includes any successor laws. This Agreement is made solely for the benefit of the City and Borrower and their respective permitted successors and assigns, and no other person or entity shall have or acquire any rights under this Agreement unless expressly stated to the contrary in this Agreement.
The term “business day” shall mean weekdays except such weekdays which are designated as holidays on which banks chartered by the State of California or the federal government are closed to the public. Notwithstanding any other provision of this Agreement, nothing herein or in the Note shall be deemed to require Borrower to pay interest in the amount of any applicable usury law or other legal limitation on interest, and the terms hereof and of the Note shall be interpreted to require in each instance the lesser of (i) the amount stated in the Note; and (ii) the maximum applicable legal limit, and if permitted by applicable law, payments of excess interest shall be considered payments or principal.
27.0 NO WAIVER; CONSENTS.
Any waiver by the City must be in writing and will not: (i) be construed as a continuing waiver, (ii) be deemed to extend to or affect any other provision of this Note or of any Loan Document, (iii) prevent any subsequent enforcement of such term or obligation nor (iv) be deemed a waiver of any subsequent breach. No waiver will be implied from any delay or failure by the City to take action on account of any default of Borrower. Consent by the City to any act or omission by Borrower will not be construed to be a consent to any other or subsequent act or omission or to waive the requirement for the City’s consent to be obtained in any future or other instance.
28.0 GOVERNING LAW AND VENUE
This Agreement shall be governed by the laws of the State of California without application of its conflict of law rules, with venue in Los Angeles County.
29.0 REPRESENTATIONS, WARRANTIES AND ADDITIONAL COVENANTS OF BORROWER.
Borrower hereby represents, warrants and covenants to the City as of the date hereof and at all times throughout the term of this Agreement and any extensions thereof that:
29.1 Organization and Standing. Borrower is a California legal entity, duly formed, qualified to operate in California and validly existing and in good standing under all applicable laws, and has all requisite power and authority to enter into and perform its obligations under this Agreement, the Note, and all other Loan Documents.
29.2 Enforceability. This Agreement, the Note, and all other Loan Documents constitute the legal, valid and binding obligation of Borrower, without joinder of any other party.
29.3 Authorization and Consents. The execution, delivery and performance of this Agreement and all other Loan Documents is consistent with the operating agreement, partnership agreement, or articles and bylaws governing Borrower, and have been duly authorized by all necessary action of Borrower’s members, partners, directors, officers and shareholders.
29.4 Due and Valid Execution. This Agreement and all other Loan Documents, will, as of the date of their execution, have been duly and validly executed by Borrower.
29.5 Licenses. Borrower will obtain and maintain all material licenses, permits, certificates of occupancy, consents and approvals required by all applicable governmental authorities to own and operate the Project.
29.6 Litigation and Compliance. There are no suits, other proceedings or investigations pending or threatened against, or affecting the business or the properties of Borrower or any constituent partners or members or shareholders which could impair its ability to perform its obligations under this Agreement, nor is Borrower or any constituent partners or members or shareholders in violation of any laws or ordinances which could impair Borrower’s ability to perform its obligations under this Agreement or any other Loan Document.
29.7 Default. There are no facts now in existence which would, with the giving of notice or the lapse of time, or both, constitute an Event of Default hereunder, as described in Section 17.
29.8 No Violations. The execution and delivery of this Agreement, the Note or any other Loan Documents, and the performances thereunder by Borrower, as applicable, will not constitute a breach of or default under any instrument or agreement to which Borrower may be a party nor will the same constitute a breach of or violate any law or governmental regulation. There are no pending legal violations pertaining to the Project, the Site or Borrower.
29.9 Prevailing Wage. Borrower agrees that City makes no representations or warranties as to whether any expenditure of funds related to the Project are considered to be public works for purposes of prevailing wages pursuant to Labor Code §1720 et seq. and implementing regulations of the Department of Industrial Relations. Borrower has represented that it intends not to use the Loans for any public works. Should Borrower or any of its predecessors, affiliates, contractors, sub- contractors, or agents or entities fail to pay, fail to cause to be paid, or fail to have paid or caused to have been paid, prevailing wages, or to have complied with the aforementioned prevailing wage laws as to any such expenditure of funds, and it is alleged, contended, or determined that it should have paid prevailing wages, or otherwise fail to comply with the prevailing wage law, Borrower shall indemnify, defend, and hold harmless to the fullest extent permitted by law, the City from and against any and all claims, liability, loss, damage, expense, costs (including without limitation costs and fees of litigation) of every nature arising out of or in connection with the failure to pay prevailing wages or comply with the prevailing wage law. This indemnification obligation shall survive the termination of this Agreement.
29.10 Information Accurate and No Change in Circumstances. All information and materials provided by Borrower or its representatives to the City are true and complete and do not omit to state any material facts. There has been no material adverse change in the conditions or circumstances with regard to the Project, including, its financial feasibility, the Site conditions, other factors which may affect the timeliness of the completion of the Project, its costs, legal requirements applicable to the Project and its construction, community support for the Project or market conditions.
29.11 Attachments / Exhibits. The Exhibits listed in the Table of Exhibits, which follows the signature page of this Agreement, are attached to this Agreement and, by this reference, made a part hereof.
29.12 Patriot Act Compliance. Borrower and its constituent owners are not, nor have they ever been (i) listed on any Government Lists (as defined below), (ii) a person who has been determined by a governmental authority to be subject to the prohibitions contained in Presidential Executive Order No. 13224 (Sept. 23, 2001) or any other similar prohibitions contained in the rules and regulations of OFAC or in any enabling legislation or other Presidential Executive Orders in respect thereof, (iii) indicted for or convicted of any felony involving a crime or crimes of moral turpitude or for any Patriot Act Offense, or (iv) under investigation by any governmental authority for alleged criminal activity. For purposes hereof, the term “Patriot Act Offense” shall mean any violation of the criminal laws of the United States of America or of any of the several states, or that would be a criminal violation if committed within the jurisdiction of the United States of America or any of the several states, relating to terrorism or the laundering of monetary instruments, including any offense under (A) the criminal laws against terrorism; (B) the criminal laws against money laundering, (C) Bank Representative Secrecy Act, as amended, (D) the Money Laundering Control Act of 1986, as amended, or (E) the Patriot Act. Patriot Act Offense also includes the crimes of conspiracy to commit, or aiding and abetting another to commit, a Patriot Act Offense. For purposes hereof, the term “Government Lists” shall mean (1) the Specially Designated Nationals and Blocked Persons Lists maintained by the Office of Foreign Assets Control (“OFAC”), (2) any other list of terrorists, terrorist organizations or narcotics traffickers maintained pursuant to any of the Rules and Regulations of OFAC, or (3) any similar lists maintained by the United States Department of State, the United States Department of Commerce or any other governmental authority or pursuant to any Executive Order of the President of the United States of America.
29.13 Reserved.
29.14 Borrower Cooperation. Borrower shall, at Borrower’s sole cost and expense: (i) execute and deliver to the City such documents, instruments, certificates, assignments and other writings, and do such other acts necessary or desirable, to evidence, preserve, and/or protect the transactions contemplated under and the City’s rights arising with regard to the Loan Documents as the City may reasonably require from time to time; and (ii) deliver such information, documents, certifications, agreements, reports and other materials, including causing third parties to take such actions, as the City may reasonably require from time to time, to confirm compliance with the provisions of the Loan Documents, or in connection with any request for any consent or approval from the City. Any request by the City under this section shall be deemed reasonable if Borrower possesses or controls such information; takes such action or produces such information or materials for any other person or company; or is required to maintain such information or materials or take such actions under Applicable Governmental Restrictions.
30.0 APPROVALS.
Any consent to a transfer under Sections 15 or 16 of this Agreement, and any other consent or approval by City under this Agreement or any of the Loan Documents, must be given by the City Council.
Except with respect to those matters set forth hereinabove providing for the City’s approval, consent or determination to be at the City’s “sole discretion” or “sole and absolute discretion,” the City hereby agrees to act reasonably with regard to any approval, consent, or other determination given by the City hereunder. The City agrees to give Borrower written notice of its approval or disapproval following submission of items to the City for approval, including, in the case of any disapproved item, the reasons for such disapproval. Any review or approval of any matter by the City or any City official or employee under this Agreement shall be solely for the benefit of the City, and neither Borrower nor any other person shall rely upon such review or approval as an indication of the wisdom, soundness, safety, appropriateness, or presence or absence of any matter. Without limiting the generality of the foregoing, Borrower and not the City shall be solely responsible for assuring compliance with laws, and the construction and operation of the Project.
31. SURVIVAL OF INDEMNITY OBLIGATIONS.
All general and specific indemnity and defense obligations of the Parties set forth in this Agreement shall survive the expiration or termination of this Agreement.
32. ENTIRE AGREEMENT.
This Agreement, together with its specific references, attachments, Exhibits incorporated herein and all documents executed pursuant hereto, constitute the entire understanding and agreement of the parties. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all prior negotiations, discussions and previous agreements between the parties concerning all or any part of the subject matter of this Agreement.
Unless set forth herein, no party to this Agreement shall be liable for any representations made, express or implied.
33. FURTHER ASSURANCES.
The Parties agree to reasonably consider such additional actions or the execution of such other documents as may be reasonably necessary or convenient to the performance under this Agreement, although nothing in this Section 32 shall be deemed a representation, guaranty, or commitment by the City to take any action or execute any document that would increase the principal amount of the Loans or incur additional liability on the part of the City. (Remainder of Page Intentionally Left Blank)
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the date and year first above written.
CITY OF SANTA FE SPRINGS
a public body, corporate and politic
__________________________________
City Manager
René Bobadilla
APPROVED AS TO FORM:
_______
Rick Olivarez, City Attorney
(Signatures Continue on Next Page)
BORROWER:
JUANITA’S FOODS
a California Corporation
By:
Robert Rosales,
Chief Executive Officer
TABLE OF EXHIBITS
Exhibit “A” LEGAL DESCRIPTION OF THE SITE
Exhibit “B” FORM OF PROMISSORY NOTE
EXHIBIT “A” TO LOAN AGREEMENT
LEGAL DESCRIPTION OF THE SITE
[separately attached]
EXHIBIT “B” TO LOAN AGREEMENT
FORM OF PROMISSORY NOTE
(Please See Attached)
PROMISSORY NOTE
(Santa Fe Springs Village, LP)
$13,500,000.00 ___________, 2026
For value received, the undersigned, JUANITA’S FOODS, a California corporation (the “Borrower”) whose principal address is set forth herein below, promises to pay to the order of the CITY OF SANTA FE SPRINGS, a public body, corporate and politic (the “City”) located at 11710 East Telegraph Road, Santa Fe Springs, CA 90670 (or to such designee and/or at such other address as the City may from time to time designate in writing), the principal sum of THIRTEEN MILLION FIVE HUNDRED THOUSAND DOLLARS ($13,500,000) (as amended, modified, supplemented, and replaced from time to time, collectively, the "Loan”), or such other amount as may be advanced under the Loan Agreement (as defined below), plus accrued and unpaid interest as provided herein below, and all other charges due hereunder, in accordance with the terms and conditions of that certain Loan Agreement dated as of _______, 2026 for reference purposes only, entered into between Borrower and the City (as amended, modified, and supplemented, and replaced from time to time, collectively, the “Loan Agreement”), and the terms and conditions of this promissory note (as amended, modified, and supplemented, and replaced from time to time, collectively, this “Note”). As set forth in greater detail in the Loan Agreement, the purpose of the Loan is to provide Borrower with financing for relocation expenses and capital equipment purchases (including repayment of indebtedness incurred for purposes of financing relocation expenses and equipment purchases) and other general corporate purposes to allow for the development of a food processing facility, and as more particularly described in the Loan Agreement (“Project”) on a site more particularly described in the Loan Agreement (“Site”).
Unless otherwise defined in this Note, all initially-capitalized terms used herein without definition shall have the meanings given such terms in the Loan Agreement, and references to the Loan Documents shall include the Corporate Guaranty, and any other document, or agreements given in connection with the Loan Agreement. This Note is dated as of ____________, 2026 for reference purposes only and shall not become effective until the Effective Date of the Loan Agreement.
1. Interest.
1.1. Basic Interest. Except as provided in Section 1.3 below, the disbursed and unpaid principal balance of the Loan shall bear interest commencing on the date on which the Loan proceeds are first disbursed for the account of Borrower, and ending on the date paid, at a variable rate of interest per annum at the Local Agency Investment Fund (LAIF) Apportionment Rate, for each disbursement at the most recently published rate published by the CA State Treasurer’s Office (“Interest Rate”). Interest shall be computed on the basis of actual number of days elapsed and a 360-day year.
1.2. Payment Dates and Amounts.
1.2.1. The Loan is not amortized. Interest, if any, will accrue on the funded balance until it is paid in full and a BALLOON PAYMENT will be required on the Maturity Date.
1.2.2. Borrower shall make quarterly payments of interest on the first calendar day of each calendar quarter following the Effective Date through the Maturity Date.
1.2.3. Payments shall first be applied to interest and then to the principal balance.
1.2.4. In no event shall any Loan payment attributable to an Event of Default (as hereafter defined) or acceleration be deferred.
1.2.5. Notwithstanding any other provision of this Note, unless due sooner, the entire outstanding principal balance of the Loan together with any outstanding interest and any other sums payable under this Note shall be due and payable in full on the date that is forty-two (42) months from the date of execution of this Note (the "Maturity Date”); provided, that if Borrower delivers written notice to the City requesting an extension of the Maturity Date, and such notice is received by the City no later than the date that is three (3) years from the date of this Agreement, then, subject to the City's written consent (which may be granted or withheld in the City's reasonable discretion), the Maturity Date shall instead be the date that is five (5) years from the date of this Agreement.
1.3. Default Rate. Any amounts (including but not limited to amounts of principal and interest on the Loan) which Borrower does not pay when due under the terms of the Loan Agreement or this Note shall bear interest at the rate of ten percent (10%) per annum, simple interest (“Default Rate”), from the date due until the date paid.
2. Acceleration.
Notwithstanding anything to the contrary contained herein or any other Loan Documents, upon the occurrence of an Event of Default as defined in this Note, the Loan Agreement, or the Loan Documents, the entire outstanding principal balance of this Note, together with any outstanding interest and other amounts payable hereunder, shall, at the election of the City and upon notice to Borrower thereof become immediately due and payable without presentment, demand, protest or other notices of any kind, all of which are hereby waived by Borrower.
3. Prepayment; Application of Payments.
At any time after the disbursement of the Loan proceeds, Borrower may prepay all or a portion of the unpaid principal amount of the Loan and accrued interest and any other sums outstanding without penalty. All payments, including any prepayments or funds received upon acceleration of the Loan, shall be applied first toward any outstanding costs of collection or other amounts (excluding principal or interest on the Loan) due under this Note or the Loan Agreement, then toward outstanding interest accrued at the Default Rate, if any, then toward outstanding interest accrued at the Interest Rate, if any, and finally toward the remaining principal balance under the Note. If multiple sources of funding are part of the Loan, the City shall in its sole discretion decide on the allocation of any repayments to the various funding sources.
4. Guarantee and Source of Payment.
As a material inducement for City to make the Loans, Juanita’s Intermediate, LLC (the “Guarantor”) shall have executed and delivered to City a guaranty of payment and performance ( the “Corporate Guaranty”), which shall constitute separate and independent obligations of Guarantor.
5. Equity Commitment Letter
In addition, as a material inducement for City to make the Loan, the Apex Capital, a [xxxx] (“Sponsor”) has executed and delivered to City the Equity Commitment Letter which shall constitute separate and independent obligations of the Sponsor.
6. Obligation of Borrower Unconditional.
The obligation of Borrower to repay the Loan and all accrued interest thereon and all other sums due thereunder shall be absolute and unconditional, and until such time as all of the outstanding principal of, interest on and all other sums due under, this Note shall have been fully paid, Borrower agrees that it: (a) will use the funds solely for the purposes set forth herein; and (b) will not terminate or suspend any payment or obligations under this Note, the Loan Agreement, or any other document executed hereunder or in connection herewith for any cause, including without limitation, any acts or circumstances that may constitute failure of consideration, commercial frustration of purpose, or any duty, liability or obligation arising out of or in connection with this Note, the Loan Agreement or any document executed hereunder or in connection herewith.
7. Purpose of Loan.
The Loan proceeds shall be used by Borrower only to pay for relocation expenses and capital equipment purchases for the Site (including repayment of indebtedness incurred for purposes of financing relocation expenses and equipment purchases) and other general corporate purposes related thereto. In no event shall Borrower use or otherwise invest the proceeds of the Loan except as expressly provided in this Note.
8. Covenants of Borrower.
As additional consideration for the making of the Loan by the City, Borrower covenants as follows:
8.1. Compliance with Loan Agreement. Borrower shall comply with all of its obligations under the Loan Agreement, including the Post-Closing Obligations under the Loan Agreement. Any amounts payable by Borrower under the Loan Agreement (other than amounts also payable hereunder) shall be deemed added to the principal amount of the Loan payable hereunder.
8.2. Other Loans. Borrower shall comply with all monetary and nonmonetary covenants associated with any loan of the Borrower secured by an interest in the Site or the Project.
Borrower shall provide to the City a copy of any notice of default within five (5) business days after receiving any notice of a default or alleged default of such covenants under any loan of the
Borrower, including those with an interest in the Site or the Project, and Borrower shall promptly cure, or caused to be cured, any such default and cooperate in permitting the City, to the extent the City in its sole discretion elects to do so, to cure or assist in curing the default. Any cost or expenditure incurred by the City in providing or assisting in such a cure shall be added to the outstanding principal amount of the Loan. Notwithstanding the foregoing, nothing in this Section
7.2 shall obligate the City to cure any such default or alleged default.
8.3. Construction Requirements. Borrower shall comply with the construction requirements set forth in Section 10.12 of the Loan Agreement, including but not limited to, proceeding diligently, and achieving Completion of the Project, as defined below, no later than twenty-four (24) months following sixty (60) days of the date of initial disbursement of the Loan.
9. Assignment of this Note. Borrower’s rights under this Note shall be assignable by Borrower only if Borrower obtains the prior express written consent of the City, which consent may be withheld in the sole and absolute discretion of the City. Notwithstanding anything to the contrary in this Note, no purported assignment of this Note and the Loan shall be effective if such assignment would violate the terms, conditions and restrictions of any Applicable Governmental Restrictions. The City's consent to such assignment shall be expressly conditioned upon (i) the assignee's execution of such documents as required by the City in its sole discretion, including, without limitation, any and all documents deemed necessary by the City to provide for said assignee's assumption of all of the obligations of Borrower hereunder and under the Loan Documents to the reasonable satisfaction of the City Attorney; (ii) the City’s approval of the financial and credit worthiness of such proposed assignee and the assignee’s ability to perform all of the Borrower’s covenants under this Note and the Loan Agreement; and (iii) as set forth in Section 15.5 of the Loan Agreement, if applicable, the provision of a reaffirmation or replacement of any third party guaranty or indemnity given in connection with or in furtherance of the Loan, including but not limited to the Corporate Guaranty and Equity Commitment Letter, in a form and substance acceptable to the City, and if applicable by a replacement guarantor/indemnitor acceptable to the City.
10. Events of Default and Remedies.
10.1. Borrower Events of Default. The occurrence of any of the following shall constitute an event of default by Borrower hereunder ("Event of Default"), each of which are acknowledged by Borrower to constitute a material default under this Note:
10.1.1. The failure of Borrower to pay or perform any monetary covenant or obligation hereunder, or under the terms of any other Loan Document, without curing such failure within ten (10) days after receipt of written notice of such default from the City (or from any party authorized by the City to deliver such notice as identified by the City in writing to Borrower).
Notwithstanding anything herein to the contrary, the herein described cure period shall not apply to a failure by Borrower to timely repay the Loan at the Maturity Date of this Note;
10.1.2. The failure of Borrower to perform any nonmonetary covenant or obligation hereunder or under the terms of any other Loan Document, without curing such failure within thirty (30) days after the giving of written notice of such default from the City (or from any party
authorized by the City to give such notice as identified by the City in writing to Borrower) specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency; and (ii) if any default with respect to a nonmonetary obligation is such that, through no fault of Borrower, it cannot reasonably be cured within a thirty (30) day period, Borrower shall have a further period, as reasonably determined by the City, to cure such default provided Borrower commences the cure within said thirty (30) day period and diligently prosecutes such cure to completion, but in no event shall the total cure period including the initial thirty (30) day period be more than one hundred twenty (120) days in total. Notwithstanding anything herein to the contrary, the herein described notice requirements and cure periods shall not apply to any Event of Default described in Sections 9.1.3 through 9.1.10 or for nonmonetary covenants or obligations otherwise set forth in the Loan Documents where an express time period is otherwise provided;
10.1.3. The falsity in any material respect of any representation made by Borrower under the terms of or in connection with this Note, the Loan Agreement, or any other Loan Documents, or otherwise contained in any materials provided by Borrower to the City (a cure period does not apply to this subsection);
10.1.4. Borrower, Guarantor or the Sponsor shall (a) apply for or consent to the appointment of a receiver, trustee, liquidator or custodian or the like of its property, (b) fail to pay or admit in writing its inability to pay its debts generally as they become due, (c) make a general assignment for the benefit of creditors, (d) be adjudicated as bankrupt or insolvent or (e) commence a voluntary case under the Federal bankruptcy laws of the United States of America or file a voluntary petition that is not withdrawn within ten (10) days of the filing thereof or answer seeking an arrangement with creditors or an order for relief or seeking to take advantage of any insolvency law or file an answer admitting the material allegations of a petition filed against it in any bankruptcy or insolvency proceeding;
10.1.5. If without the application, approval or consent of Borrower, a proceeding shall be instituted in any court of competent jurisdiction, under any law relating to bankruptcy, in respect of Borrower, Guarantor or Sponsor, for an order for relief or an adjudication in bankruptcy, a composition or arrangement with creditors, a readjustment of debts, the appointment of a trustee, receiver, liquidator or custodian or the like of Borrower or of all or any substantial part of Borrower's assets, or other like relief in respect thereof under any bankruptcy or insolvency law, and, if such proceeding is being contested by Borrower, in good faith, the same shall (a) result in the entry of an order for relief or any such adjudication or appointment, or (b) continue undismissed, or pending and unstayed, for any period of ninety (90) consecutive days;
10.1.6. Following initial Completion of the Construction, voluntary cessation of the operation of the Project for a continuous period of more than thirty (30) days or the involuntary cessation of the operation of the Project in accordance with this Note for a continuous period of more than sixty (60) days;
10.1.7. Borrower shall be in breach of the provisions of Section 15 or Section 16 of the Loan Agreement or any restrictions on Transfers under this Note or the promissory notes for any other loans made pursuant to the Loan Agreement;
10.1.8. Borrower shall be in default under Other Financing or any other secured or unsecured obligation relating to the Project, unless the default is cured within the cure period, if any, applicable thereto under the terms of the obligation which is in default;
10.1.9. Borrower shall fail to pay or cause the payment of all real property taxes relating to the Project prior to their delinquency or shall fail to at all times while the Loan and any other amounts due under the Loan Documents are outstanding, fail to obtain and maintain the policies of insurance in the form and substance required by the Loan Documents; and
10.1.10. The failure of Borrower to obtain the Other Financing contemplated by the Loan Documents and the closing of such financing as of the date of the Commencement of Construction or as otherwise approved by the City.
10.2. City Remedies. Upon the occurrence of an Event of Default hereunder, the City may, in its sole discretion, take any one or more of the following actions:
10.2.1. By notice to Borrower, declare the entire then unpaid principal balance of the Loan immediately due and payable, and the same shall become due and payable without further demand, protest or further notice of any kind, all of which are hereby expressly waived by Borrower. Upon such declaration, outstanding principal and (to the extent permitted by law) interest and any other sums outstanding in connection with the Loan shall thereafter bear interest at the Default Rate, payable from the date of such declaration until paid in full;
10.2.2. take any and all actions and do any and all things which are allowed, permitted or provided by law, in equity or by statute, in the sole discretion of the City, to collect the amounts then due and thereafter to become due hereunder and under any other Loan Document, to exercise its rights under any Loan Document, and to enforce performance and observance (by specific performance or otherwise) of any obligation, agreement or covenant of the Borrower under this Note or under any other Loan Document;
10.2.3. upon the occurrence of an Event of Default, which is occasioned by Borrower's failure to pay money, whether under this Note, the Loan Agreement, or any other Loan Document, the City may, but shall not be obligated to, make such payment. If such payment is made by the City, Borrower shall deposit with the City, upon written demand therefor, such sum plus interest at the Default Rate. The Event of Default with respect to which any such payment has been made by the City shall not be deemed cured until such repayment has been made by Borrower. Until repaid, such amounts shall have the security afforded disbursements under this Note;
10.2.4. Upon the occurrence of an Event of Default described in Section 9.1.4 or 9.1.5 hereof, the City shall be entitled and empowered by intervention in such proceedings or otherwise to file and prove a claim for the whole amount owing and unpaid on the Loan and, in the case of commencement of any judicial proceedings, to file such proof of claim and other papers or documents as may be necessary or advisable in the judgment of the City and its counsel to protect the interests of the City and to collect and receive any monies or other property in satisfaction of its claim;
10.2.5. If the City has not yet funded all amounts to be loaned or granted to Borrower under the Note or any other Loan Document or any other loan or grant agreement from the City, the City or managed thereby, the City may suspend further payments under any such agreements or grants without liability to Borrower.
10.3. No Remedy Exclusive. No remedy herein conferred upon or reserved to the City is intended to be exclusive of any other available remedy or remedies, but each such remedy shall be cumulative and shall be in addition to every other remedy given under this Note or now or hereafter existing at law or in equity or by statute; and may be exercised in such number, at such times and in such order as the City may determine in its sole discretion. No delay or omission to exercise any right or power upon the occurrence of any Event of Default hereunder shall impair any such right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient by the City. In order to entitle the City to exercise any right or remedy reserved to it under this Note, no notice shall be required except as expressly provided herein.
10.4. City Default and Borrower Remedies. Upon fault or failure of the City to meet any of its obligations under this Note without curing such failure within thirty (30) days after receipt of written notice of such failure from Borrower specifying the nature of the event or deficiency giving rise to the default and the action required to cure such deficiency, Borrower may, as its sole and exclusive remedies:
(1) Bring an action in equitable relief seeking the specific performance by the City of the terms and conditions of this Note or seeking to enjoin any act by the City which is prohibited hereunder; and
(2) Bring an action for declaratory relief seeking judicial determination of the meaning of any provision of this Note.
Without limiting the generality of the foregoing, Borrower shall in no event be entitled to, and hereby waives, any right to seek indirect or consequential damages of any kind or nature from the City arising out of or in connection with this Note, and in connection with such waiver Borrower is familiar with and hereby waives the provisions of Section 1542 of the California Civil Code which provides as follows: “A GENERAL
RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR
RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER
FAVOR AT THE TIME OF EXECUTING THE RELEASE AND THAT, IF KNOWN
BY HIM OR HER, WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY.”
11. Conflict of Interest; No Individual Liability.
No official or employee of the City shall have any personal interest, direct or indirect, in this Note or any other Loan Document, nor shall any official or employee of the City participate
in any decision relating to this Note or any other Loan Document which affects such official's or employee's pecuniary interest in any corporation, partnership or association in which such official or employee is directly or indirectly interested. No official or employee of the City shall be personally liable in the event of a breach of this Note or any other Loan Document by the City.
Borrower shall, within not less than ten (10) days after learning of any such conflict of interest or facts which reasonably indicate that a conflict of interest may exist, notify the City Manager of the City.
12. Amendments, Changes and Modifications.
This Note may not be amended, changed, modified, or altered without the prior written consent of the parties hereto, which shall require approval by City Council as set forth in the Loan Agreement.
13. Notices.
All notices, demands, requests, elections, approvals, disapprovals, consents or other communications given under this Note shall be in writing and shall be given by personal delivery, facsimile, certified mail (return receipt requested), or overnight guaranteed delivery service and faxed or addressed as follows:
If to the City: City of Santa Fe Springs
11710 E. Telegraph Rd.
Santa Fe Springs, CA 90670
Attn: Finance Director
(562) 868-0511
With a copy to: Olivarez Madruga Law Organization, LLP
500 S. Grand Ave., Floor 12
Los Angeles, CA 90071
Attention: Paloma McEvoy
(213) 744-0099
If to Borrower: Juanita’s Foods
, CA 9XXXX
Attn.: Robert Rosales, Chief Executive Officer
(310) XXX-XXXX
Email:
and
Juanita’s Foods
, CA 9XXXX
Attn.:
(310) XXX-XXXX
Email:
With a copy to:
Notices shall be effective upon receipt, if given by personal delivery; upon receipt, if faxed, provided there is written confirmation of receipt (except that if received after 5 p.m., notice shall be deemed received on the next business day); the earlier of (i) three (3) business days after deposit with United States Mail, or (ii) the date of actual receipt as evidenced by the return receipt, if delivered by certified mail; and one (1) day after deposit with the delivery service, if delivered by overnight guaranteed delivery service. Each party shall promptly notify the other party of any change(s) of address to which notice shall be sent pursuant to this Note.
14. Severability.
Each provision, term, condition, covenant and/or restriction, in whole and in part, in this Agreement shall be considered severable. In the event any provision, term, condition, covenant and/or restriction, in whole and/or in part, in this Agreement is declared invalid, unconstitutional, or void for any reason, such provision or part thereof shall be severed from this Agreement and shall not affect any other provision, term, condition, covenant and/or restriction of this Agreement, and the remainder of the Agreement shall continue in full force and effect.
15. Interpretation.
Whenever the context requires, all words used in the singular will be construed to have been used in the plural, and vice versa, and each gender will include any other gender. The captions of the paragraphs of this Note are for convenience only and do not define or limit any terms or provisions. Time is of the essence in the performance of this Note by Borrower. Each Party has been represented by counsel in the negotiation of this Note, and it shall not be interpreted in favor of or against any Party on account of relative responsibilities in drafting. Notwithstanding any other provision of this Note, nothing herein or in this Note shall be deemed to require Borrower to pay interest in excess of the amount allowed by any applicable usury law or other legal limitation on interest, and the terms hereof and of this Note shall be interpreted to require in each instance the lesser of (i) the amount stated in this Note; and (ii) the maximum applicable legal limit, and if permitted by applicable law, payments of excess interest shall be considered payments of principal.
Defined terms not otherwise defined herein shall have the meaning assigned to them by the Loan Agreement.
16. No Waiver; Consents.
Any waiver by the City must be expressly made in writing and signed by the City and will not: (i) be construed as a continuing waiver, (ii) be deemed to extend to or affect any other provision of this Note or of any Loan Document, (iii) prevent any subsequent enforcement of such term or obligation, nor (iv) be deemed a waiver of any subsequent breach. No waiver will be implied from any delay or failure by the City to take action on account of any default of City.
Consent by the City to any act or omission by the City will not be construed as consent to any other or subsequent act or omission or to waive the requirement for the City's consent to be obtained in any future or other instance.
17. Governing Law and Venue.
This Note shall be governed by the laws of the State of California without application of its conflict of law rules, with venue in Los Angeles County.
18. Representations, Warranties and Additional Covenants of Borrower Borrower hereby represents, warrants and covenants to the City that:
18.1. Organization and Standing. Borrower is a California legal entity as described in the Loan Agreement, duly formed, qualified to operate in California and validly existing and in good standing under all applicable laws, and has all requisite power and authority to enter into and perform its obligations under this Note, the Loan Agreement and all other Loan Documents.
18.2. Enforceability. This Note and all other Loan Documents constitute the legal, valid and binding obligation of Borrower, without joinder of any other party.
18.3. Authorization and Consents. The execution, delivery and performance of this Note and all other Loan Documents is consistent with the operating agreement, partnership agreement or articles and bylaws governing Borrower and have been duly authorized by all necessary action of Borrower's members, partners, directors, officers and shareholders.
18.4. Due and Valid Execution. This Note and all other Loan Documents will, as of the date of their execution, have been duly and validly executed by Borrower.
18.5. Licenses. Borrower will obtain and maintain all material licenses, permits, certificates of occupancy, consents and approvals required by all applicable governmental authorities to own and operate the Project.
18.6. Litigation and Compliance. There are no suits, other proceedings or investigations pending or threatened against, or affecting the business or the properties of Borrower or any constituent partners or members or shareholders which could impair its ability to perform its obligations under this Note, nor is Borrower or any constituent partners or members or
shareholders in violation of any laws or ordinances which could materially impair Borrower's ability to perform its obligations under this Note or any other Loan Document.
18.7. Default. There are no facts now in existence which would, with the giving of notice or the lapse of time, or both, constitute an Event of Default hereunder, as described in Section 9.
18.8. No Violations. The execution and delivery of this Note, the Loan Agreement or any other Loan Documents, and the performances hereunder and thereunder by Borrower, as applicable, will not constitute a breach of or default under any instrument or agreement to which Borrower may be a party, nor will the same constitute a breach of or violate any law or governmental regulation. There are no pending legal violations pertaining to the Project, the Site, or otherwise that are material to Borrower.
18.9. Information Accurate and No Change in Circumstances. All information and materials provided by Borrower or its representatives to the City (including all information provided in connection with the Application) are true and complete in all material respects and do not omit to state any material facts. There has been no material adverse change in the conditions or circumstances with regard to the Project, including its financial feasibility, the Site conditions, other factors which may affect the timeliness of the completion of the Project, its costs, legal requirements applicable to the Project and its construction, community support for the Project or market conditions.
18.10. Reserved.
19. Approvals.
Except with respect to those matters set forth hereinabove providing for the City's approval, consent or determination to be at the City's "sole discretion" or "sole and absolute discretion," the City hereby agrees to act reasonably with regard to any approval, consent, or other determination given by the City hereunder.
Any review or approval of any matter by the City or any City official or employee under this Note shall be solely for the benefit of the City, and neither Borrower nor any other person shall rely upon such review or approval as an indication of the wisdom, soundness, safety, appropriateness, or presence or absence of any matter. Without limiting the generality of the foregoing, Borrower and not the City shall be solely responsible for assuring compliance with laws, the suitability of the Site for the Project, the adequacy of the plans, and the safety of the Project construction site, the completed Project, and the operation thereof.
Any consent to a Transfer under Section 15 or 16 of the Loan Agreement and any other consent or approval by the City under this Note, the Deed of Trust, the Loan Agreement or any of the other documents executed in connection therewith, may be given by the City Council.
With regard to any consent, approval or determination required or requested to be made by the City with regard to this Note and under the Loan Documents, the City may at its sole discretion require the input, consent, or approval of other governmental entities or third parties, as a condition
to making such decisions. The City shall not be responsible for any delays relating to obtaining any input, consent approval, or direction from other governmental entities or third parties.
20. Reserved.
21. Waiver.
Borrower agrees that it will still be liable for repayment of this Note, even if the holder hereof does not follow the procedures of presentment, protest, demand, diligence, notice of dishonor and of nonpayment, which requirements are hereby waived. Failure of the City or other holder hereof to exercise any right or remedy hereunder shall not constitute a waiver of any future or other default. No acceptance of a past due installment or indulgence granted from time to time shall be construed to be a waiver of, or to preclude the exercise of, the right to insist upon prompt payment thereafter or to impose late charges retroactively or prospectively, or to waive or preclude the exercise of any other rights which the City may have.
22. Attachments / Exhibits.
All specific references, attachments, exhibits incorporated herein, and all documents executed pursuant thereto are attached, by this reference and made a part hereof. [Signatures Next Page]
IN WITNESS WHEREOF, Borrower has executed this Note as of the date and year first above written.
BORROWER:
JUANITA’S FOODS
a California corporation
By:
Robert Rosales,
Chief Executive Officer
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.
STATE OF CALIFORNIA )
COUNTY OF )
On _____________________, 20 , 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 ____________________________
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.
STATE OF CALIFORNIA )
COUNTY OF )
On _____________________, 20 , 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 ____________________________
CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: Rene Bobadilla, P.E., City Manager
BY: Julio Morales, Director of Finance
SUBJECT:
RESOLUTION NO. 10034 – ADOPTION OF ANNUAL APPROPRIATION (GANN) LIMIT FOR FISCAL YEAR 2026-2027
DATE: August 18, 2026
RECOMMENDATION:
It is recommended that City Council:
1. Adopt Resolution No. 10034 setting the appropriation limit for Fiscal Year 2026-2027.
FISCAL IMPACT
N/A
BACKGROUND
As required by Article XIII B of the State Constitution, the City Council annually revises the appropriation limit for each upcoming fiscal year. The limit establishes the maximum amount of taxes the City is allowed to collect and appropriate.
ANALYSIS
N/A
ENVIRONMENTAL
N/A
DISCUSSION
We recently received information regarding the various factors that we may use to adjust the appropriations limit for Fiscal Year 2026-27.
The limit is adjusted each year based on the greater of two of the following adjustment categories of adjustments:
The increase in California per capita income (4.95%)
And the greater of:
Los Angeles County population change (decrease of -0.64%).
The City of Santa Fe Springs population change (increase of 1.37%).
The City opted to use calculations based upon its population change for a combined factor of 1.0639.
The City’s appropriation limit for Fiscal Year 2026-27 is calculated to be $4,018,975,881.
Please note the Fiscal Year 2025 – 26 appropriation limit was subsequently adjusted from $3,755,077,240 to $3,777,588,077 upon review, as the City had initially applied the more conservative County of Los Angeles growth factor of 0.30% instead of the City’s growth factor of 0.90%.
The majority of California cities report appropriation limits well in excess of actual appropriations subject to the limit. For the City of Santa Fe Springs, the large excess of the limit over subject appropriations is primarily a result of the fact that the change in local assessment roll due to the addition of non-residential new construction ranged from 7.33% to 33.15% between fiscal years 2006-07 and 2024-25.
The appropriations limit, which seeks to cap increases in government spending, was established by the passage of Proposition 4 in 1979. The limit was put in place one year following the passage of Proposition 13 in 1978, which limited cities’ ability to increase property tax revenue. Proposition 218, passed in November 1996, also limited cities’ ability to implement or raise general-purpose taxes, assessments, and certain property-related fees without voter approval. Although the City has the capacity to increase spending under the appropriations limit restriction, the City’s budget is constrained by limits on increasing revenues.
The appropriation limit calculation and appropriations subject to the limit are detailed in Exhibit A of Resolution No. 10034.
SUMMARY/NEXT STEPS
The GANN appropriation limit will be added to the budget document.
ATTACHMENT(S)
Attachment No. 1 - Resolution 10034
Attachments
Attachment No. 1 - Resolution 10034.pdf
RESOLUTION NO. 10034
A RESOLUTION OF THE CITY COUNCIL OF
THE CITY OF SANTA FE SPRINGS
ADOPTING THE ANNUAL APPROPRIATION
LIMIT FOR FISCAL YEAR 2026-2027
WHEREAS, the City Council must annually adjust the appropriation limit based on either the change in the California per capita personal income or the percentage change in local assessment roll from the preceding year due to the addition of local non-residential construction in the City and either the City’s own population growth or the population growth of the entire county; and
WHEREAS, the decision as to which of the options to select must be done by a recorded vote of the City Council;
NOW, THEREFORE, IT IS HEREBY RESOLVED AS FOLLOWS: that the City Council of the City of Santa Fe Springs does hereby resolve as follows:
SECTION 1. The foregoing recitals are true and correct and incorporated herein by reference.
SECTION 2. In calculating the appropriation limit, the City has utilized the percentage change in the California per capita income applicable to the fiscal year 2026- 27 limit of 4.95%.
SECTION 3. In calculating the appropriation limit, the City has utilized the population growth factor for the City of Santa Fe Springs population from January 1, 2025 to January 1, 2026, of 1.37%.
SECTION 4. The City reserves the right to change or revise any growth factors associated with the calculation of the appropriation limit in the present or future.
SECTION 5. The resolution shall take effect immediately upon its passage by the City Council, and the City Clerk shall attest to and certify the adoption of this Resolution.
PASSED, APPROVED and ADOPTED by the City Council of the City of Santa Fe Springs at a regular meeting on this 18th day of August 2026 by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
RESOLUTION NO. 10034
_____________________________
Joe Angel Zamora, Mayor
ATTEST:
_________________________
Maribel Garcia, City Clerk
EXHIBITА
CALCULATION OF APPROPRIATION LIMIT
FISCAL YEAR 2026-27
Amount
Fiscal Year 2025-26 Appropriation Limit
Adjustment Factor (Rounded to 4 Decimal Places)
Adjustment
Fiscal Year 2026-27 Appropriation Limit
$ 3,777,588,007
1.0639 (A)
241,387,874
$ 4,018,975,881 (В)
Change
Adjustment Factor Calculation: % As a Ratio
Adjustment for increase in California Per Capita Income: 4.95% 1.0495 Adjustment for growth in County of Los Angeles: 1.37% 1.0137 Combined Adjustment Factor 1.0495X 1.0137 1.0639 (A)
Appropriations Subject to the Limit (2026-27 Proposed Budget Figures):
Property Tаx
Utility User's Tax
Sales & Transaction & Use Tax
Transient Occupancу Таx
Business Operations Tax
Property Transfer Taх
Barrel Tax
Vehicle in Lieu Tax
Interest (50% allocated to proceeds from taxes)
$ 7,110,019
8,961,000
62,717,500
155,000
750,000
262,000
118,411
3,078,800
2,000,000
Public Safety Augmentation Fund
Supplemental Law Enforcement Services Fund
Total Appropriations Subject to the Limit $
220,000
100,000
85,472,730
Appropriations Limit
Amount Under the Limit
4,018,975,881 (B)
$ 3,933,503,151
EXHIBIT А
CALCULATION OF APPROPRIATION LIMIT
FISCAL YEAR 2025-26
Amount
Fiscal Year 2024-25 Appropriation Limit
Adjustment Factor (Rounded to 4 Decimal Places)
Adjustment
Fiscal Year 2025-26 Appropriation Limit
$ 3,517,307,269
1.0740 (A)
260,280,738
$ 3,777,588,007 (B)
Change
Adjustment Factor Calculation: % As a Ratio
Adjustment for Increase in California Per Capita Income: 6.44% 1.0644 SFS: 0.90
Adjustment for growth in County of Los Angeles: 0.90% 1.0090 County: 0.30
Combined Adjustment Factor 1.0644 ✗ 1.0090 1.0740 (A)
Appropriations Subject to the Limit (2025-26 Proposed Budget Figures):
Property ax
Utility User's Tax
Sales & Transaction & Use Tax
Transient Occupancy Tax
Business Operations Tax
Property Transfer Tax
Barrel Tаx
Vehicle in Lieu Tax
Interest (50% allocated to proceeds from taxes)
Public Safety Augmentation Fund
Supplemental Law Enforcement Services Fund
Total Appropriations Subject to the Limit
Appropriations Limit
Amount Under the Limit
$ 5,778,508
8,240,000
56,204,735
145.887
701,882
232,733
113,468
2,943,699
1,750,000
245,000
100,000
$
76,455,909
3,777,588,007 (B)
3,701,132,098
EXHIBIT A
CALCULATION OF APPROPRIATION LIMIT
FISCAL YEAR 2025-26
Fiscal Year 2024-25 Appropriation Limit
Adjustment Factor (Rounded to 4 Decimal Places)
Amount
$ 3,493,293,916
1.0740 (A)
Adjustment
Fiscal Year 2025-26 Appropriation Limit $
258,503,750
3,751,797,666 (B)
Change
Adjustment Factor Calculation: % As a Ratio
Adjustment for increase in California Per Capita Income: 6.44% 1.0644 Adjustment for population growth in County of Los Angeles: 0.90% 1.0090.
Combined Adjustment Factor 1.0644 X 1.0090 1.0740 (A)
Appropriations Subject to the Limit (2025-26 Proposed Budget Figures):
Property Tax
Utility User's Tax
Sales & Transaction & Use Tax
Transient Occupancy Tax
Business Operations Tax
Property Transfer Tax
Barrel Tax
Vehicle in Lieu Tax
Interest (50% allocated to proceeds from taxes)
Public Safety Augmentation Fund
Supplemental Law Enforcement Services Fund
Total Appropriations Subject to the Limit
Appropriations Limit
Amount Under the Limit
$ 5,778,508
8,240,000
56,204,735
145,887
701,882
232,733
113,468
2,943,696
1,750,000
245,000
100,000
76,455,909
3,751,797,666 (B)
$ 3,675,341,757
CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: Cuong Nguyen, Director of Community Development
SUBJECT:
HOME OCCUPATION PERMIT APPEAL DECISION - REGARDING A BEAUTY SALON AT 10728
LAKE CENTER PARK LANE
DATE: Tuesday, August 18, 2026, 5:00 PM
RECOMMENDATION:
It is recommended that City Council:
1. Find and determine that this Project is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines, Section 15061(b)(3) (Common Sense Exemption); and
2. Find and determine that the proposed home occupation meets the criteria set forth in Zoning Code Section 155.635 for the approval of a Home Occupation Permit; and
3. Deny the appeal request and affirm the decision of the Planning Commission to approve the Home Occupation Permit; and
4. Adopt Resolution No. 1035, which incorporates the City Council’s findings and actions regarding this matter; and
5. Take such additional, related action that may be desirable.
FISCAL IMPACT
N/A
BACKGROUND
On June 3, 2026, Melody Andrade, on behalf of MC Personal Beauty Services (“Applicant”), applied for a business license and a Home Occupation Permit for a home-based beauty salon at 10728 Lake Center Park Lane. The Applicant proposed an appointment-based salon that provides on-site services for hair extensions to up to two (2) clients per day, four (4) days a week. No harsh chemical processes, such as dyeing or bleaching, were proposed as part of the planned operations.
Following staff review of the application and the requirements of Zoning Code Section 155.635, the Director of Community Development determined that ten of the eleven required findings were satisfied, but because the proposed use did not appear to satisfy one of the eleven required findings for approval of a Home Occupation Permit, denied the application on June 24, 2026.
On July 7, 2026, the Applicant filed a timely appeal of the Director’s decision to deny the Home Occupation Permit, pursuant to Zoning Code Section 155.865.
At its regular meeting on July 13, 2026, the City of Santa Fe Springs Planning Commission heard the Applicant’s appeal and granted the appeal, thereby approving the Home Occupation Permit.
On July 27, 2026, Alejandro and Irma Huitron (“Appellants”) timely appealed the Planning Commission’s decision to approve the Home Occupation Permit, pursuant to Zoning Code Section 155.865.
ANALYSIS
Zoning Code Section 155.635 establishes standards for home occupations conducted within residential neighborhoods. The purpose of these regulations is to allow limited business activity that remains incidental to the residential use of the property and preserves the residential character of the neighborhood.
Prior to approving a Home Occupation Permit, the Planning Commission must be able to make the findings set forth in Zoning Code Section 155.635(B):
1. No employment of help other than members of the resident family.
2. No use of material or mechanical equipment not recognized as being part of reasonable household uses.
3. The use shall not generate pedestrian or vehicular traffic.
4. No storage of materials or supplies outdoors and no use of commercial vehicles for delivery of materials to or from the premises.
5. No signs or advertising shall be permitted on the premises.
6. The appearance of the residence shall not be altered, nor shall the home occupation be conducted in a manner that causes the premises to deviate from its residential character.
7. No use of utilities or community facilities beyond that reasonably associated with residential use.
8. The use shall not constitute a category of industrial homework prohibited by state law.
9. Where applicable, required state industrial homework licenses and permits have been obtained.
10. Where applicable, all required licenses or permits from other public agencies have been obtained.
11. The applicant has signed an affidavit acknowledging and agreeing to comply with all conditions of approval.
The Planning Commission interpreted Finding No. 3 as prohibiting pedestrian or vehicular traffic that is substantial or unreasonable, rather than prohibiting any pedestrian or vehicular traffic associated with the home occupation.
During the July 13, 2026 public meeting, the Applicant orally volunteered the following condition, which the Planning Commission incorporated into its approval:
This Home Occupation Permit shall be limited to two clients per day. All clients who arrive by vehicle shall park in the driveway of the subject property.
Based on the addition of this condition, the Planning Commission determined that Finding No. 3 was satisfied because limiting the use to two clients per day, with clients arriving by vehicle required to parking in the driveway, would not generate pedestrian or vehicular traffic that the Planning Commission considered substantial or unreasonable.
Appellants’ Key Points
The Appellants filed a joint appeal letter (Attachment B) in which they raised eight (8) arguments that have been summarized into the following three (3) key points.
1. The Planning Commission did not have the authority to interpret Finding #3 and approve a Home Occupation Permit that generates any pedestrian or vehicular traffic.
Courts have recognized that a City’s interpretation of its own municipal code is entitled to considerable deference.
See Citizens for Responsible Equitable Environmental Development v. City of San Diego (2010) 184 Cal.App.4th 1032.
2. A change in policy should be accomplished through a Municipal Code amendment, rather than interpretation, to ensure fair and consistent application of the Home Occupation Permit provisions.
Staff are currently preparing a code amendment to codify the Planning Commission’s interpretation regarding the level of pedestrian and vehicular traffic that may be generated by a home occupation.
Until such time as the Municipal Code is amended, applications for Home Occupation Permits remain subject to the existing language of Section 155.635(B), as interpreted and applied by the decision-making body with authority over the application.
3. The administrative record was incomplete at the time the appeal was filed.
The Appellants state that no official resolution, conditions of approval, transcript, approved meeting minutes, or video recording were available.
The Planning Commission’s findings and decision were stated orally on the record. The meeting was recorded, and the video was uploaded to the City’s website on July 14, 2026, the day following the meeting. The recording was also made available on the City’s YouTube channel beginning July 15, 2026. Both the City website recording and the YouTube recording were therefore available before the Appellants filed their appeal.
ENVIRONMENTAL
The proposed action is exempt from CEQA because it falls within the Common Sense Exemption, pursuant to CEQA Guidelines Section 15061(b)(3), which indicates that CEQA only applies to projects that have the potential to have a “significant effect on the environment,” as defined in Public Resources Code Section 21068 and in CEQA Guidelines Section 15382. The activities conducted pursuant to the Home Occupation Permit would not be an activity with the potential to cause a significant effect on the environment, and therefore is exempt from CEQA.
Consequently, no other environmental documents are required by law. The proposed action is exempt from CEQA because it falls within the Existing Facilities Exemption pursuant to CEQA Guidelines Section 15301 because activities conducted pursuant to the Home Occupation Permit would occur in an existing facility and the limitation of two customers per day would involve negligible or no expansion of the existing use.
DISCUSSION
Home-based businesses have continued to evolve in recent years, particularly following the expansion of remote work and changes in state law recognizing certain home-based business models.
SUMMARY/NEXT STEPS
Based on the limited scale and operational characteristics of the proposed Home Occupation Permit, the Planning Commission determined that the use satisfies the requirements of Zoning Code Section 155.635(B), including Finding No. 3 regarding pedestrian and vehicular traffic. Accordingly, staff recommends that the City Council deny the appeal and affirm the Planning Commission's decision to approve the Home Occupation Permit.
ATTACHMENT(S):
Attachment No. 1 - Planning Commission Staff Report and Attachments Attachment No. 2 - Appellants’ Appeal Request Letter
Attachment No. 3 - Resolution No. 323-2026
Attachment No. 4 - Approved Minutes of the Planning Commission’s July 13, 2026, Regular Meeting Attachment No. 5 - Resolution No. 1035
Attachments
Attachment No. 1 - Planning Commission Staff Report and Attachments.pdf Attachment No. 2 - Appellants' Appeal Request Letter.pdf Attachment No. 3 - Resolution No. 323-2026.pdf
Attachment No. 4 - Approved Minutes of the Planning Commission's July 13, 2026, Regular Meeting Attachment No. 5 - Resolution No. 1035.pdf
ITEM #3
PLANNING COMMISSION AGENDA STAFF REPORT
TO: Members of the Planning Commission
FROM: Cuong Nguyen, Director of Community Development
BY: Alejandro De Loera, AICP, Associate Planner
SUBJECT: NEW BUSINESS – HOME OCCUPATION PERMIT APPEAL DECISION – REGARDING A BEAUTY SALON AT 10728 LAKE CENTER PARK LANE
DATE: July 13, 2026
RECOMMENDATION:
It is recommended that the Planning Commission:
1. Find and determine that this Project is exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines, Section 15061(b)(3) (Common Sense Exemption); and
2. Find and determine that the proposed home occupation does not meet the criteria set forth in Zoning Code Section 155.635 for the approval of a Home Occupation Permit; and
3. Affirm the decision of the Director of Community Development to deny the proposed Home Occupation Permit;
4. Adopt Resolution No. 323-2026, which incorporates the Planning Commission’s findings and actions regarding this matter; and
5. Take such additional, related, action that may be desirable.
FISCAL IMPACT
N/A
BACKGROUND
On June 3, 2026, Melody Andrade on behalf of MC Personal Beauty Services (“Applicant”) applied for a business license and a Home Occupation Permit for a home-based beauty salon at 10728 Lake Center Park Lane. The Applicant proposed an appointment-based salon that provides on-site services for hair extensions to up to two (2) clients per day, four (4) days a week. No harsh chemical processes such as dying or bleaching were proposed as part of the planned operations.
PLANNING COMMISSION AGENDA REPORT – MEETING OF JULY 13, 2026
HOME OCCUPATION PERMIT APPEAL DECISION
Following staff review of the application and the requirements of Zoning Code Section 155.635, the Director of Community Development determined that the proposed use did not meet the required findings for approval of a Home Occupation Permit and denied the application on June 24, 2026.
Pursuant to Zoning Code Section 155.865, any decision by the Director of Community Development may be appealed to the Planning Commission within fourteen (14) days from the date of the decision.
As such, on July 7, 2026, the Applicant requested an appeal of the Director’s decision to deny the Home Occupation Permit.
ANALYSIS
Zoning Code Section 155.635 establishes standards for home occupations conducted within residential neighborhoods. The purpose of these regulations is to allow limited business activity that remains incidental to the residential use of the property and preserves the residential character of the neighborhood.
Prior to approving a Home Occupation Permit, the Director of Community Development and/or the Planning Commission must be able to make the findings set forth in Zoning Code Section 155.635(B):
1. No employment of help other than members of the resident family.
2. No use of material or mechanical equipment not recognized as being part of reasonable household uses.
3. The use shall not generate pedestrian or vehicular traffic.
4. No storage of materials or supplies outdoors and no use of commercial vehicles for delivery of materials to or from the premises.
5. No signs or advertising shall be permitted on the premises.
6. The appearance of the residence shall not be altered, nor shall the home occupation be conducted in a manner that causes the premises to deviate from its residential character.
7. No use of utilities or community facilities beyond that reasonably associated with residential use.
8. The use shall not constitute a category of industrial homework prohibited by state law.
9. Where applicable, required state industrial homework licenses and permits have been obtained.
10.Where applicable, all required licenses or permits from other public agencies have been obtained.
11.The applicant has signed an affidavit acknowledging and agreeing to comply with all conditions of approval.
Staff reviewed the proposed Home Occupation for consistency with each of the required findings.
While the proposed use is generally consistent with the majority of the operational standards, staff is unable to make Finding No. 3 because the proposed beauty salon would involve client visits to the residence, thereby generating pedestrian and vehicular traffic. The language of the code is absolute and does not provide for any exemptions or flexibility in the amount of traffic generation. Since all required findings must be made to approve a Home Occupation Permit, the Director of Community Development denied the application.
The Planning Commission's consideration of this appeal is limited to determining whether the proposed Home Occupation complies with the requirements of the Zoning Code. Based on the PLANNING COMMISSION AGENDA REPORT – MEETING OF JULY 13, 2026
HOME OCCUPATION PERMIT APPEAL DECISION
ITEM STATUS:
APPROVED: ☐
DENIED: ☐
TABLED: ☐
DIRECTION GIVEN: ☐
____________________________
Planning Commission
Secretary, Esmeralda Elise
operational characteristics of the proposed use and the standards established in Section 155.635(B), staff recommends that the Planning Commission affirm the Director's decision to deny the Home Occupation Permit.
ENVIRONMENTAL
The proposed determination is exempt from CEQA because it falls within the Common Sense Exemption, pursuant to CEQA Guidelines Section 15061(b)(3), which indicates that CEQA only applies to projects that have the potential to have a “significant effect on the environment,” as defined in Public Resources Code Section 21068 and in CEQA Guidelines Section 15382. An appeal decision regarding a Home Occupation Permit would not be an activity with the potential to cause a significant effect on the environment, and therefore is exempt from CEQA. Consequently, no other environmental documents are required by law.
DISCUSSION
Home-based businesses have continued to evolve in recent years, particularly following the expansion of remote work and changes in state law recognizing certain home-based business models. For example, Cottage Food Operations and Microenterprise Home Kitchen Operations (MEHKOs) may accommodate limited customer activity and traffic as authorized under state law and are exempt from the required findings of the City’s Zoning Code.
Had the intent of the Home Occupation Permit been to permit limited or incidental traffic, Finding No. 3 could have included qualifying language (e.g., "shall not materially increase traffic," "shall not generate significant traffic," or "shall generate only incidental traffic"). Because it does not, the provision must be read as prohibiting any traffic generated by the use.
SUMMARY/NEXT STEPS
Based on the proposed Home Occupation Permit for a home-based beauty salon involving client visits to the residence, staff is unable to make all of the findings required by Section 155.635(B) of the Zoning Code. Accordingly, staff recommends that the Planning Commission affirm the decision of the Director of Community Development to deny the Home Occupation Permit.
ATTACHMENT(S):
A. Resolution No. 323-2026
B. Denial Letter from the Director of Community Development C. Appeal Request by Applicant
CITY OF SANTA FE SPRINGS
RESOLUTION NO. 323-2026
A RESOLUTION OF THE PLANNING COMMISSION OF THE CITY OF SANTA FE
SPRINGS, FOR A HOME OCCUPATION PERMIT APPEAL DECISION REGARDING A BEAUTY SALON AT 10728 LAKE CENTER PARK LANE.
WHEREAS, an application was filed for a Home Occupation Permit and business license for a home-based beauty salon at 10728 Lake Center Park Lane, within the R-1- PD, Single-Family Residential-Planned Development, Zone; and WHEREAS, the Project Site is located at 10728 Lake Center Park Lane, Santa Fe Springs, CA 90670, with Assessor’s Parcel Number of 8008-001-010, as shown in the latest rolls of the Los Angeles County Office of the Assessor; and WHEREAS, the Applicant is Melody Andrade, on behalf of MC Personal Beauty Services, 10728 Lake Center Park Lane, Santa Fe Springs, CA 90670; and WHEREAS, the proposed project, which includes an appeal decision regarding a Home Occupation Permit, is considered a project as defined by the California Environmental Quality Act (CEQA), Article 20, Section 15378(a); and WHEREAS, based on the information received from the applicant and the written and oral reports provided, the Planning Commission found and determined that the proposed project meets the criteria for exemption, pursuant to the California Environmental Quality Act (CEQA), Section 15061(b)(3) (Common Sense Exemption); and
WHEREAS, on June 24, 2026, the Director of Community Development denied the proposed Home Occupation Permit; and
WHEREAS, on July 7, 2026, the Applicant appealed the decision of the Director within the fourteen (14) day appeal period pursuant to Zoning Code Section 155.865; and WHEREAS, Zoning Code Section 155.635(B) requires the Planning Commission to make findings required for the approval of a Home Occupation Permit; and WHEREAS, Zoning Code Section 155.635(B)(3) requires that the Planning Commission find that a Home Occupation Permit use “shall not generate pedestrian or vehicle traffic”; and
WHEREAS, the Planning Commission finds that the proposed home-based business does not meet the criteria set forth in Zoning Code Section 155.635(B); and WHEREAS, the Planning Commission affirms the decision of the Director of Community Development to deny the proposed Home Occupation Permit; and WHEREAS, the City of Santa Fe Springs Planning Commission has considered the application, the written and oral staff report, the General Plan and zoning of the subject site, the testimony, or other materials presented at the Planning Commission meeting on July 13, 2026, concerning the appeal of the decision of the Director of Community Development to deny a Home Occupation Permit for a beauty salon at 10728 Lake Center Park Lane.
NOW, THEREFORE, be it RESOLVED that the PLANNING COMMISSION of the CITY OF SANTA FE SPRINGS does hereby RESOLVE, DETERMINE, and ORDER AS FOLLOWS:
SECTION I. ENVIRONMENTAL FINDINGS AND DETERMINATION
The proposed determination is exempt from CEQA because it falls within the Common Sense Exemption, pursuant to CEQA Guidelines Section 15061(b)(3), which indicates that CEQA only applies to projects that have the potential to have a “significant effect on the environment,” as defined in Public Resources Code Section 21068 and in CEQA Guidelines Section 15382. An appeal decision regarding a Home Occupation Permit would not be an activity with the potential to cause a significant effect on the environment, and therefore is exempt from CEQA. Consequently, no other environmental documents are required by law.
SECTION II. PLANNING COMMISSION ACTION
The Planning Commission hereby adopts Resolution No. 323-2026 to affirm the decision of the Director of Community Development to deny a Home Occupation Permit for a beauty salon at 10728 Lake Center Park Lane.
ADOPTED and APPROVED this 13th day of JULY 2026 BY THE PLANNING COMMISSION OF THE CITY OF SANTA FE SPRINGS.
______________________________
Gabriel Jimenez, Planning Commission Chairperson
ATTEST:
______________________________
Esmeralda Elise, Planning Commission Secretary
Outlook
Re: Appeals submission
From Cuong H. Nguyen <[email protected]>
Date Tue 7/7/2026 1:57 PM
To melody andrade <[email protected]>
Cc Alejandro De Loera <[email protected]> Received. Thank you.
Cuong Nguyen
Director of Community Development
DEPARTMENT OF COMMUNITY DEVELOPMENT
—
11710 Telegraph Road
Santa Fe Springs, CA 90670
Office: (562) 868-0511 ex. 7359
E-mail: [email protected]
—
From: melody andrade <[email protected]>
Sent: Tuesday, July 7, 2026 1:08 PM
To: Cuong H. Nguyen <[email protected]>
Subject: Appeals submission
You don't often get email from [email protected]. Learn why this is important I would formally like to dispute code
155.635 (B)(3) on July 13th 2026. Here is another copy of my prior submission. Thank you.
May 27, 2026
Mr. Cuong Nguyen
Director of Community Development
Community Development Department
City of Santa Fe Springs
11710 Telegraph Road
Santa Fe Springs, CA 90670
RE: Home Occupation Permit Application
10728 Lake Center Park Lane, Santa Fe Springs, CA 90670 Dear Mr. Cuong Nguyen,
Thank you for taking the time to consider my application for a Home Occupation Permit to operate a personal beauty service out of my home at 10728 Lake Center Park Lane. The services I would like to provide would be strictly limited to application of hair extensions.
This would operate as an “invisible business” as no signage will be displayed, and no structural changes will be made to appearance of the home. Also, there will be no employees or help received.
I do understand that Santa Fe Springs Code of Ordinances 155.635(B)(3) (last revised 2017) states, “the use shall not generate pedestrian or vehicle traffic.” Since “pedestrian or vehicle traffic” is not clearly defined, I would like to present the argument that having ONE client vehicle at a time parked in my driveway (1 to 2 times a day, four days a week), and NOT on any street parking, would not be a generation of pedestrian or vehicle traffic. Furthermore, it is my understanding that Lake Center Park Lane has traditionally been used as overflow parking for Lake Center Athletic Park located at 11641 Florence Avenue, Santa Fe Springs, CA 90670, which further supports my argument that one vehicle coming to my home at a time is not an increase in traffic. Additionally, Section 155.635.1(A)(9) (last revised 2017) regarding Cottage Food Operations, allows for customers to come to the home one at a time per hour on a scheduled basis. Although my business is not a Cottage Food Operation, it would operate in a similar manner but with much less, if any, impact on traffic or parking. Lastly, the City of Santa Fe Springs Zoning Map (Revised: July 2023) shows that Lake Center Park Lane is marked with a “Planned Development Overlay” (155.325), which allows for flexible planning. Hopefully, this flexibility would assist in allowing me to have one client at a time park in my driveway. If the planning commission does not recognize these arguments as viable, I would like to propose an alternative where I pick up clients in my own vehicle and bring them to my residence to render services.
In the last few years following the COVID-19 pandemic, many other municipalities have approved similar permits as the trend of working from home has been on the incline. I respectfully hope that the City of Santa Fe Springs takes this into consideration and grants approval of my Home Occupation Permit Application.
Thank you in advance for your consideration.
Sent from my iPhone
APPROVED: August 10, 2026
MINUTES OF THE REGULAR MEETING OF THE
SANTA FE SPRINGS PLANNING COMMISSION
July 13, 2026
1. CALL TO ORDER
Chairperson Jimenez called the meeting to order at 6:06 p.m.
2. ROLL CALL
Members present: Chairperson Jimenez
Vice Chairperson Ayala
Commissioner Cervantes
Commissioner Sarno
Members Absent: Commissioner Flores
Staff: Lloyd Pilchen, Assistant City Attorney
Cuong Nguyen, Director of Community Development
Vince Velasco, Assistant Director
Alejandro De Loera, Associate Planner
James Enriquez, Director of Public Works
Esmeralda Elise, Planning Commission Secretary
3. PLEDGE OF ALLEGIANCE
Chairperson Jimenez called upon Commissioner Cervantes to lead everyone in the Pledge of Allegiance.
4. EX PARTE COMMUNICATIONS
None.
5. PUBLIC COMMENT
We had 10 public speakers on Item #3. Eight speakers expressed support for allowing the proposed at-home business, while two speakers opposed it.
6. CONSENT ITEM
Consent Agenda items are considered routine matters, which may be enacted, by one motion and roll call vote. Any item may be removed from the Consent Agenda and considered separately by the Planning Commission.
1. MINUTES OF THE JUNE 8, 2026 REGULAR MEETING
Chairperson Jimenez requested a motion and a second for Consent Item No 1.
It was moved by Commissioner Cervantes and seconded by Commissioner Sarno to Minutes of the July 13, 2026 Planning Commission Meeting
approve Consent Items No 1 and the recommendations regarding this matter, which passed by the following roll call vote:
Ayes: Ayala, Cervantes, Jimenez, Sarno
Nays: None
Absent: Flores
Chairperson Jimenez read the City's appeal process.
7. OLD BUSINESS
PARKWAY TREE REMOVAL APPEAL DECISION - RESIDENT REQUEST FOR REMOVAL OF PARKWAY TREE AT 10812 FLALLON AVENUE (CONTINUED FROM THE JUNE 8, 2026 PLANNING COMMISSION MEETING)
Chair Jimenez called upon Public Works Director James Enriquez to present this item.
The Commissioners had questions for Staff and the City’s Arborist and determined the tree to be healthy, stable, and not dead, dying, diseased, or otherwise hazardous.
Having no further questions or comments, Chair Jimenez requested a motion.
It was moved by Commissioner Sarno, seconded by Commissioner Cervantes to affirm staff’s recommendation and uphold the Director of Public Works’ denial of the request to remove the parkway tree, which passed by the following roll call vote:
Ayes: Ayala, Cervantes, Jimenez, Sarno
Nays: None
Absent: Flores
6. NEW BUSINESS
HOME OCCUPATION PERMIT APPEAL DECISION – REGARDING A BEAUTY SALON AT 10728 LAKE CENTER PARK LANE
Chair Jimenez called upon Community Development Director Cuong Nguyen to present the item. Staff explained that the Community Development Department had denied the Home Occupation Permit for a beauty salon at 10728 Lake Center Park Lane because the proposed appointment-based business would generate pedestrian and vehicular traffic, which is not permitted under the City’s current home occupation regulations.
The City Attorney explained that the Planning Commission could, if it chose, interpret the code language to prohibit only substantial or unreasonable pedestrian or vehicular traffic, and that such an interpretation could be made orally on the record, with a resolution prepared by staff afterward. The City Attorney also noted that the Commission could separately provide direction to staff regarding a future amendment to the Zoning Code, although no code amendment was before the Commission for consideration.
CITY OF SANTA FE SPRINGS
RESOLUTION NO. 1035
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SANTA FE SPRINGS, DENYING AN APPEAL OF THE PLANNING COMMISSION’S DECISION AND AFFIRMING THE COMMISSION’S APPROVAL OF A HOME OCCUPATION PERMIT FOR A BEAUTY SALON AT 10728 LAKE CENTER PARK LANE.
WHEREAS, an application was filed for a Home Occupation Permit and business license for a home-based beauty salon at 10728 Lake Center Park Lane, within the R-1- PD, Single-Family Residential-Planned Development, Zone; and WHEREAS, the Project Site is located at 10728 Lake Center Park Lane, Santa Fe Springs, CA 90670, with Assessor’s Parcel Number of 8008-001-010, as shown in the latest rolls of the Los Angeles County Office of the Assessor; and WHEREAS, the Applicant is Melody Andrade, on behalf of MC Personal Beauty Services, 10728 Lake Center Park Lane, Santa Fe Springs, CA 90670; and WHEREAS, Home Occupation is listed among accessory uses in the R-1 Zone in accordance with Zoning Code Section 155.635, which provides that they may be approved by the Director of Community Development and “may be conditioned upon any other requirements deemed necessary to preserve the residential character of the area”; and
WHEREAS, on June 24, 2026, the Director of Community Development denied the proposed Home Occupation Permit; and
WHEREAS, on July 7, 2026, the Applicant timely appealed the decision to the Planning Commission pursuant to Zoning Code Section 155.865; and WHEREAS, at its regular meeting on July 13, 2026, the City of Santa Fe Springs Planning Commission heard the Applicant’s appeal of the Director’s decision to deny the requested Home Occupation Permit; and
WHEREAS, the Planning Commission granted the appeal and approved the Home Occupation Permit; and
WHEREAS, the Appellants are Alejandro Huitron and Irma Huitron, who on July 27, 2026, timely appealed the decision to the City Council pursuant to Zoning Code Section 155.865; and
WHEREAS, at its regular meeting on August 18, 2026, the City Council of the City of Santa Fe Springs considered the appeal of the Planning Commission’s decision to approve the Home Occupation Permit; and
WHEREAS, after considering the record, the Planning Commission’s decision, the Appellants’ appeal, and the evidence and testimony presented at the hearing, the City Council determined to deny the appeal and affirm the Planning Commission’s decision to approve the Home Occupation Permit.
NOW, THEREFORE, be it RESOLVED that the CITY COUNCIL of the CITY OF SANTA FE SPRINGS hereby RESOLVE, DETERMINE, and ORDER AS FOLLOWS:
SECTION I. ENVIRONMENTAL FINDINGS AND DETERMINATION
The proposed determination is exempt from CEQA because it falls within the Common Sense Exemption, pursuant to CEQA Guidelines Section 15061(b)(3), which indicates that CEQA only applies to projects that have the potential to have a “significant effect on the environment,” as defined in Public Resources Code Section 21068 and in CEQA Guidelines Section 15382. An appeal decision regarding a Home Occupation Permit would not be an activity with the potential to cause a significant effect on the environment, and therefore is exempt from CEQA. Consequently, no other environmental documents are required by law.
SECTION II. CITY COUNCIL ACTION
The City Council hereby denies the appeal filed by Alejandro Huitron and Irma Huitron and affirms the decision of the Planning Commission to approve a Home Occupation Permit for a beauty salon at 10728 Lake Center Park Lane, pursuant to the findings set forth in the Planning Commission Resolution No. 323-2026 which is incorporated by reference herein.
ADOPTED and APPROVED this 18th day of AUGUST 2026 BY THE PLANNING COMMISSION OF THE CITY OF SANTA FE SPRINGS.
_________________________
Joe Angel Zamora, Mayor
ATTEST:
___________________________
Maribel Garcia, City Clerk
CITY COUNCIL AGENDA STAFF REPORT
TO: Honorable Mayor and City Council Members
FROM: René Bobadilla, P.E., City Manager
BY: Oscar Jimenez, Senior Finance Analyst
SUBJECT: PUBLIC FINANCING AUTHORITY
DATE: Tuesday, August 18, 2026, 5:00 PM
RECOMMENDATION:
It is recommended that the Public Financing Authority:
1. Receive and file the report.
FISCAL IMPACT
N/A
BACKGROUND
The Santa Fe Springs Public Financing Authority (PFA) is a City entity that has periodically issued debt for the benefit of the Santa Fe Springs community. The following is a brief status report on the debt instruments currently outstanding that were issued through the PFA.
Consolidated Redevelopment Project 2006-A Tax Allocation Bonds Financing proceeds available for appropriation at 07/31/26 None Outstanding principal at 07/31/26 $3,108,763
Bond Repayment
The former Community Development Commission (CDC) issued a number of tax allocation bonds before it was dissolved by State law effective February 1, 2012 which are administered by the City acting as Successor Agency under the oversight of the appointed Oversight Board. The Successor Agency no longer receives tax increment.
Instead, distributions from the Redevelopment Property Tax Trust Fund (RPTTF) are received based on approved obligations. It is anticipated that sufficient allocations from the RPTTF will continue to be made to the Successor Agency to meet ongoing debt service obligations.
Unspent Bond Proceeds
Under an approved Bond Expenditure Agreement, unspent bond proceeds of the former CDC in the amount of approximately $19 million were transferred to the City in July 2014. The funds are to be spent in accordance with the original bond documents. The unspent proceeds continue to be a source of funding within the City’s capital improvement program (CIP).
2016 Bond Refunding
In July 2016, the Successor Agency issued its 2016 Tax Allocation Refunding Bonds, which paid off several bond issuances of the former CDC. The bonds were originally issued through the Public Financing Authority and included the 2001 Series A, 2002 Series A, 2003 Series A, the current interest portion of the 2006 Series A, and 2006 Series B bond issuances.
2017 Bond Refunding
In December 2017, the Successor Agency issued its 2017 Tax Allocation Refunding Bonds, which paid off the 2007 Tax Allocation Bonds of the former CDC. The 2007 Bonds were originally issued through the Public Financing Authority.
ANALYSIS
The report is presented for informational purposes only.
ENVIRONMENTAL
N/A
SUMMARY/NEXT STEPS
The Successor Agency will continue to request sufficient distributions from the RPTTF to make required bond payments through maturity on September 1, 2028.
ATTACHMENT(S)
Attachment No. 1 - Report PFA August 2026
Attachments
Attachment No. 1 - Report PFA AUGUST 2026.pdf
ITEM # 6
PUBLIC FINANCING AUTHORITY AGENDA STAFF REPORT
TO: Honorable Chair and Board Members
FROM: René Bobadilla, P.E., Executive Director
BY: Julio Morales, Director of Finance
SUBJECT: MONTHLY REPORT ON THE STATUS OF DEBT INSTRUMENTS ISSUED
THROUGH THE CITY OF SANTA FE SPRINGS PUBLIC FINANCING AUTHORITY (PFA)
DATE: August 18, 2026
RECOMMENDATION:
It is recommended that the Public Financing Authority:
1. Receive and file the report.
FISCAL IMPACT
N/A
BACKGROUND
The Santa Fe Springs Public Financing Authority (PFA) is a City entity that has periodically issued debt for the benefit of the Santa Fe Springs community. The following is a brief status report on the debt instruments currently outstanding that were issued through the PFA.
Consolidated Redevelopment Project 2006-A Tax Allocation Bonds Financing proceeds available for appropriation at 07/31/26 None Outstanding principal at 07/31/26 $3,108,763
Bond Repayment
The former Community Development Commission (CDC) issued a number of tax allocation bonds before it was dissolved by State law effective February 1, 2012 which are administered by the City acting as Successor Agency under the oversight of the appointed Oversight Board. The Successor Agency no longer receives tax increment.
Instead, distributions from the Redevelopment Property Tax Trust Fund (RPTTF) are received based on approved obligations. It is anticipated that sufficient allocations from the RPTTF will continue to be made to the Successor Agency to meet ongoing debt service obligations.
CITY COUNCIL AGENDA REPORT – MEETING OF AUGUST 18, 2026 Monthly Report on the Status of Debt Instruments Issued Through the City of Santa Fe Springs Public Financing Authority (PFA)
ITEM STATUS:
APPROVED: ☐
DENIED: ☐
TABLED: ☐
DIRECTION GIVEN: ☐
____________________________
City Clerk, Maribel Garcia
Unspent Bond Proceeds
Under an approved Bond Expenditure Agreement, unspent bond proceeds of the former CDC in the amount of approximately $19 million were transferred to the City in July 2014. The funds are to be spent in accordance with the original bond documents. The unspent proceeds continue to be a source of funding within the City’s capital improvement program (CIP). 2016 Bond Refunding
In July 2016, the Successor Agency issued its 2016 Tax Allocation Refunding Bonds, which paid off several bond issuances of the former CDC. The bonds were originally issued through the Public Financing Authority and included the 2001 Series A, 2002 Series A, 2003 Series A, the current interest portion of the 2006 Series A, and 2006 Series B bond issuances. 2017 Bond Refunding
In December 2017, the Successor Agency issued its 2017 Tax Allocation Refunding Bonds, which paid off the 2007 Tax Allocation Bonds of the former CDC. The 2007 Bonds were originally issued through the Public Financing Authority.
ANALYSIS
The report is presented for informational purposes only.
ENVIRONMENTAL
N/A
SUMMARY/NEXT STEPS
The Successor Agency will continue to request sufficient distributions from the RPTTF to make required bond payments through maturity on September 1, 2028.
ATTACHMENT(S):
None
WATER UTILITY AUTHORITY AGENDA STAFF REPORT
TO: Honorable Chair and Board Members
FROM: René Bobadilla, P.E., City Manager
BY: Julio Morales, Director of Finance
SUBJECT: WATER UTILITY MONTHLY REPORT
DATE: Tuesday, August 18, 2026, 5:00 PM
RECOMMENDATION:
It is recommended that the Water Utility Authority:
1. Receive and file the report.
FISCAL IMPACT
N/A
BACKGROUND
The Santa Fe Springs Public Financing Authority (WUA) is a city entity that has issued debt for the benefit of the Santa Fe Springs community. The following is a brief status report on the debt instruments currently outstanding that were issued through the WUA.
Water Revenue Bonds 2013
Financing proceeds available for appropriation at 07/31/2026 None Outstanding principal on 07/31/2026 $6,825,000
Water Revenue Bonds 2018
Financing proceeds available for appropriation at 07/31/2026 None The final payment was made on 5/31/2026 - the bonds have matured In May 2013 the Water Utility Authority issued the 2013 Water Revenue Bonds in the amount of $6,890,000. The bonds refunded the existing 2003 Water Revenue Bonds (issued through the Public Financing Authority) and provided additional funds for water improvement projects in the amount of $2,134,339. The funds were restricted for use on water system improvements. In August 2013, the Water Utility Authority Board appropriated the proceeds for the Equipping Water Well No. 12 Project and all proceeds were since used on this project.
In January 2018, the Water Utility Authority issued the 2018 Water Revenue Bonds in the amount of $1,800,000.
The bonds refunded the existing 2005 Water Revenue Bonds (issued through the Public Financing Authority). No additional funds were raised through the issuance of the 2018 Water Revenue Bonds. May 1, 2026 was the final debt service payment on these bonds, which have consequently matured.
The WUA was formed in June of 2009. Water revenue bonds issued prior to this date were issued through the City of Santa Fe Springs Public Financing Authority.
ANALYSIS
The report is presented for informational purposes only.
ENVIRONMENTAL
N/A
SUMMARY/NEXT STEPS
The WUA budget includes sufficient appropriations, and adequate revenues are expected to be collected to meet the debt service obligations associated with the 2013 and 2018 Water Revenue Bonds.
ATTACHMENT(S)
Attachment No. 1 - Report WUA August 2026
Attachments
Attachment No. 1 - Report WUA AUGUST 2026.pdf
ITEM # 8
WATER UTILITY AUTHORITY AGENDA STAFF REPORT
TO: Honorable Chair and Board Members
FROM: René Bobadilla, P.E., Executive Director
BY: Julio Morales, Director of Finance
SUBJECT: MONTHLY REPORT ON THE STATUS OF DEBT INSTRUMENTS ISSUED
THROUGH THE CITY OF SANTA FE SPRINGS WATER UTILITY AUTHORITY (WUA)
DATE: August 18, 2026
RECOMMENDATION:
It is recommended that the Water Utility Authority:
1. Receive and file the report.
FISCAL IMPACT
N/A
BACKGROUND
The Santa Fe Springs Public Financing Authority (WUA) is a city entity that has issued debt for the benefit of the Santa Fe Springs community. The following is a brief status report on the debt instruments currently outstanding that were issued through the WUA.
Water Revenue Bonds 2013
Financing proceeds available for appropriation at 07/31/2026 None Outstanding principal on 07/31/2026 $6,825,000
Water Revenue Bonds 2018
Financing proceeds available for appropriation at 07/31/2026 None The final payment was made on 5/31/2026 - the bonds have matured In May 2013 the Water Utility Authority issued the 2013 Water Revenue Bonds in the amount of $6,890,000. The bonds refunded the existing 2003 Water Revenue Bonds (issued through the Public Financing Authority) and provided additional funds for water improvement projects in the amount of $2,134,339. The funds were restricted for use on water system improvements. In August 2013, the Water Utility Authority Board appropriated the proceeds for the Equipping Water Well No. 12 Project and all proceeds were since used on this project.
CITY COUNCIL AGENDA REPORT – MEETING OF AUGUST 18, 2026 Monthly Report on the Status of Debt Instruments Issued Through the City of Santa Fe Springs Water Utility Authority (WUA)