Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372
ESTOPPEL, AMENDMENT, AND PARTIAL ASSIGNMENT OF SALES AND
DISPOSITION AGREEMENT
This ESTOPPEL, AMENDMENT, AND PARTIAL ASSIGNMENT OF
SALES AND DISPOSITION AGREEMENT (this “Agreement”) is entered into as of June 1, 2026, by and between VERNON PROPERTY GROUP, LLC, a California limited liability (the “Assignor”), SANTA MARIA NORTH BROADWAY, LP, a California limited partnership (the “Assignee”), and the CITY OF SAN TA MARIA , a California municipal corpor ation (the “City”).
RECITALS
A. WHEREAS, Assignor and City entered into that certain Sales and Disposition Agreement, dated September 17, 2024 (“SDA”), providing for the purchase of certain City-owned land for the development of a multi-phase development project (the “Downtown Project”) on several parcels of land located in downtown Santa Maria (the “Downtown Project Property”).
All capitalized terms used but not otherwise defined herein shall have the meanings ascribed to them in the SDA.
B. WHEREAS, Assignor and Danco Communities (an affiliate of the Assignee) have entered into that certain Joint Development Agreement pursuant to which Assignor has agreed to sell Lot 2 to Assignee immediately upon its acquisition from the City, and Assignee has agreed to purchase Lot 2 from Assignor and develop the Lot 2 Project on Lot 2 pursuant to the terms of the SDA.
C. WHEREAS, Assignor and the City wish to assign the right and obligation to develop, own, and operate the Lot 2 Project on Lot 2 to Assignee, Assignee wishes to assume such rights and obligations of Assignor under the SDA, and Assignee and Assignor which to make certain amendments to the SDA as partially assigned to the Assignee.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:
1. Assignment. Effective as of the date hereof, Assignor hereby assigns, transfers, and conveys all of its right, title, interest, and obligations under the SDA in connection with the development of only the Lot 2 Project to Assignee , and Assignor shall retain all rights and obligations in the SDA with respect to the remainder of the Downtown Project and the Downtown Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372 Project Property. This assignment is not a novation. Assignor shall remain responsible for completion of the required development of Lot 2 in the event of a failure to perform by Assignee.
2. Acceptance. Assignee hereby accepts the foregoing assignment as of the date hereof, and assumes all of the right, title , interest, and obligations of the Assignor i n the SDA in connection with the development of the Lot 2 Project only and agrees to perform all of the obligations of the Assignor under the SDA with respect thereto . Assignee acknowledges that the affordability component of Lot 2 is essential to the Cali fornia Department of Housing and Community Development’s acceptance and approval of the project
3. City Acknowledgment and Consent. The City understands, acknowledges, and agrees that the close of escrow for Lot 2 will occur as a double-escrow whereby Lot 2 will be sold by the City to Assignor pursuant to the SDA , then immediately sold by Assignor to Assignee in accordance with that certain Purchase Option Agreement between Assignor and Assignee. The City hereby consents to such sale, and the assignment from Assignor to Assignee contemplated herein , and acknowledges that the “Developer” under the SDA with respect to Lot 2 shall be the Assignee.
4. Amendments. The SDA is amended by the following provisions solely as between Assignee and City and solely as to Lot 2.
(a) Clause (e) of Section 7.3 .1 of the SDA is hereby amended and restated in its entirety to read as follows:
“(e) assignments creating security interests for the purpose of financing the acquisition of the City Property or the construction or permanent financing of the Downtown Project, as may be approved by the City, and subject to the requirements of Article VIII, or Transfers directly resulting from the foreclosure or, or granting of a deed in lieu of foreclosure of, such a security interest, or the first subsequent transfer thereafter (or assignments creating a security interest for the purpose of financing such first subsequent transfer);”
(b) Section 8.2 of the SDA is hereby amended and restated in its entirety to read as follows:
“8.2 Holder Not Obligated to Construct. Neither the holder of any mortgage or deed of trust authorized by this Agreement , nor any holder (or its designee) foreclosing upon its deed of trust, or accepting a deed in lieu thereof (a ‘Foreclosing Entity’), shall be obligated to complete construction of any portion of the Downtown Project or to guarantee such completion. Nothing in this Agreement shall be deemed to permit or authorize any such holder or Foreclosing Entity to devote the City Property or any portion thereof to any uses, or to construct Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372 any improvements thereon, other than those uses, or improvements provided for or authorized by this Agreement.”
(c) The third sentence of Section 8.3 of the SDA is hereby amended and restated in its entirety to read as follows:
“Each such holder shall have the right, but not the obligation, at its option, to cure or remedy any such default or breach within the cure period provided to Developer, which cure period for such holder shall not commence until the cure period for Developer has expired without cure.”
(d) Section 8.4 of the SDA is hereby amended and restated in its entirety to read as follows:
“8.4 Failure of Holder to Complete Improvements . In any case where, six (6) months after the holder receives notice of default by Develo per in completion of construction of any phase of the Downtown Project, such holder of record of any mortgage or deed of trust has not exercised its option to construct that portion of the Downtown Project, or having first exercised such option, has not pr oceeded diligently with such work, City shall be afforded those rights against such holder that it would otherwise have against Developer under this Agreement ; provided, however, that if it is necessary for such holder to obtain possession of the Project in order to effect such cure, such six (6)-month period will be extended by the amount of time required for such holder to obtain possession, provided such holder commences foreclosure proceeding within such six (6) -month period and diligently prosecutes such proceeding thereafter . In addition, notwithstanding anything to the contrary contained herein, neither a Foreclosing Entity nor the first transferee thereafter shall be obligated to complete construction on the timeline provided for in Section 5.1(a); rather, such party and City shall agree upon a new completion date.” (e) The following is hereby added as new Section 8.9 of the SDA as assigned to the Assignee:
“Investor Cure Rights. RBC Community Investments, LLC, an Illinois limited liability company, and/or RBC Community Investments Manager II, Inc., a Delaware corporation, and their successors and/or assigns ( collectively, the “Limited Partner”) or any other successor entity in such entity’s capacity as a limited partner of the Developer, shall have the right, but not the obligation, to cure any defaults hereunder on the same terms as Developer . Any default cure tendered by the Limited Partner shall be accepted or rejected as if tendered by the Developer.”
Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372 (f) Exhibit A-6: Developer’s Representation and Project Description – Lot 2 is hereby deleted in its entirety and replaced with Exhibit A-6, Amendment 1 hereto.
(g) Exhibit B-2: Performance Schedule and Incentives is hereby deleted in its entirety and replaced with Exhibit B-2, Amendment 1 hereto.
(h) Notwithstanding anything to the contrary contained in the SDA or in any other document relating to the Downtown Project, a default or Event of Developer Default under the SDA with respect to one Lot shall not constitute a default or Event of Developer Default with respect to any other Lot.
5. Estoppel. City declares and certifies that (i) the SDA is in full force and effect and has not been modified or amended except as set forth herein, (ii) to the best of City’s knowledge, no event of default exists under the SDA and no state of facts exists which, but for notice and/or passage of time, or both, would constitute an event of default under the SDA, and (iii) to the best of City’s knowledge, no action, suit or not ice or threat of any action or suit exists that could prevent Assignee’s ability to construct and develop the Lot 2 Project on Lot 2 within the parameters and timeframe set forth the SDA and its exhibits.
6. Permitted Transfers. Transfers of Limited Partner interests, removal of general partners by the Limited Partner due to performance defaults, and/or the exercise of the purchase option by a general partner of Assignee in accordance with the Assignee’s Amended and Restated Partnership Agreement are expressly permitted by the City and will not require City consent.
7. Notices. Notices required to be given to Developer pursuant to Section 11.3 of the SDA shall also be delivered as follows:
If to Developer: Santa Maria North Broadway LP
5251 Ericson Way
Arcata, CA 95521
Attention: Chris Dart
With a copy to: RBC Community Investments, LLC
600 Superior Avenue, Suite 2300
Cleveland, Ohio 44114
Attention: President and General Counsel
And a copy to: Bocarsly Emden Cowan Esmail & Arndt LLP 633 West Fifth Street, Suite 5880
Los Angeles, CA 90071
Attention: Kyle Arndt
8. Original Agreement. Except as modified hereby, the SDA remains in full force and effect.
Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372
9. Counterparts. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors or assigns. This Agreement may be executed in one or more counterparts, each of which shall be deemed an original. This Agreement may be validly executed and delivered by facsimile , electronic mail and/or portable document format (collectively, “Electronic Copy”). Any signer who executes this document and transmits this document by Electronic Copy intends that the Electronic Copy of their signature is to be deemed an original signature for all purposes. Any such Electronic Copy printout and any complete photocopy of such Electronic Copy printout is deemed to be an original counterpart of this document.
10. Governing Law. This Agreement shall be governed by, and construed and enfor ced in accordance with, the laws of the State of California.
[SIGNATURES ON FOLLOWING PAGE]
Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372 IN WITNESS WHEREOF, the parties have executed this Agreement as of the date stated above.
ASSIGNOR:
VERNON PROPERTY GROUP, LLC,
a California limited liability company
By: _______________________
Name: ____________________
Title: _____________________
ASSIGNEE:
SANTA MARIA NORTH BROADWAY LP,
a California limited partnership
By: Santa Maria North Broadway LLC,
a California limited liability company,
its Administrative General Partner
By: Danco Communities,
a California corporation,
its Manager
By:
Daniel Johnson
President
By: Community Revitalization and Development
Corporation, a California nonprofit public
benefit corporation, its Managing General Partner
By:
David Rutledge
President
Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372
CITY:
CITY OF SANTA MARIA, a
Municipal Corporation
By:
Name:_______________________________
Title: _______________________________
APPROVED AS TO FORM:
____________________________
City Attorney
Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372 Exhibit A-6
Developers Representation and Project Description - Lot 2
[Changes shown for review purposes.]
Lot 2 - Perlman Apartments
Project Shall Provide:
Number of Units and Square Footage
• Up to 160 apartments
Architecture/Massing
• Six-story building with five floors of apartments over raised podium parking and lobby Plazas/Gathering spaces
• Pedestrian connections along the north and east frontages of the proposed building, from Central Plaza park to the intersection of Main and Broadway • Minimum 5,000 sq. ft. in landscaped courtyards for tenants • Vernon Group will contribute to and participate in future Downtown Property and Business Improvement District or other district for maintaining enhancements and improvements that benefit the Perlman Apartments project.
Parking Concession
• 78 on-site parking spaces
• City to provide remaining parking spaces in Santa Maria Town Center at a rate consistent with the Downtown Specific Plan minus the 78 on-site spaces • Vernon Group will engage in negotiations and be party to a new negotiated Reciprocal Easement and Access Agreement (REA) for parking and access that will govern Town Center
• Use of parking at Town Center remains non-exclusive unless otherwise established through a new REA with all relevant parties
Affordability
(Consistent with the City's authority and privileges in the Reciprocal Easement Agreement (REA) for Town Center)
• Overall affordability of 60 percent of Area Median Income (AMI), and may include housing units at 80, 60, 50 and 30 percent AMI
Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372 • All residential units, except for the manager's unit, shall be income-restricted by deed for a minimum of 55 years
In order to facilitate the complexities and nuances associated with affordable housing finance, the City Manager is hereby empowered to authorize and approve a separate but related development agreement. This authorization is contingent upon the determination by both the developers and affordable housing partners that such an agreement is necessary. The purpose of this provision is to ensure that all financial and logistical aspects of affordable housing projects are comprehensively addressed, enabling the successful and timely completion of these projects.
Conditions for Authorization:
The City Manager's authority to approve a related development agreement is subject to the following conditions:
1. Necessity: The developers and affordable housing partners must jointly determine that a separate agreement is essential to address specific financial or operational needs related to the affordable housing project.
2. Consistency: The proposed related development agreement must be consistent with the goals and objectives of the primary development agreement.
3. Transparency: All parties must ensure that the terms and conditions of the related development agreement are transparent and do not conflict with the primary agreement.
4. Approval Process: The related development agreement must undergo a thorough review process, including but not limited to legal, financial, and operational assessments, to ensure its viability and compliance with applicable regulations.
By including this provision, the parties acknowledge the importance of flexibility in addressing the unique challenges of affordable housing finance and commit to working collaboratively to achieve the project's success.
Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372
Exhibit B-2: Amendment 1
Performance Schedule and Incentives - Lot 2
[Changes shown for review purposes.]
Action Performance Target Incentive with Target Met
1. Submission of
Downtown Permit
application.
Within 30 days after execution
of Development Agreement.
2. Approval of Downtown
Permit application.
Within 6 months of submittal
and determination of
complete Downtown Permit
application. This time period
shall be tolled at any time that
the application has been
submitted to the City until
such time as the application is
returned by the City to the
Developer.
3. Opening of escrow for
property.
Within 30 days of approval of
Downtown Permit application.
Payment of $50,000 deposit
to the City for the property by
Vernon Property Group,
LLC.
4. Submission of
construction
drawings, including
grading, landscaping,
and construction
plans.
Within 12 months after
Downtown Permit approval.
Attachment B
Perlman – SDA Assignment 4920-5773-5331v.2 0061257-000372
5. Approval of
construction
drawings, including
grading, landscaping,
and construction
plans for first phase
and issuance of
building permits.
Within 6 months after receipt
by the City. Developer's
deadline to perform shall be
tolled at any time that the
application has been
submitted to the City until
such time as the application is
returned by the City to the
Developer.
6. Submission of
evidence documenting
equity capital and
financing.
30 days prior to the close of
escrow.
7. Acceptance of
evidence documenting
equity capital and
financing.
30 days prior to the close of
escrow.
8. Close of escrow for
property.
Upon completion of all
conditions to close escrow.
Payment of remaining
$70,000 of purchase price by
Vernon Property Group, LLC. .
9. Commencement of
construction.
Within 30 days after
conveyance of the property by
the City to the Developer.
10. Completion of
construction and
issuance of
certification of
occupancy.
Within 42 months after
building permit issuance.