Loading...
HomeMy WebLinkAboutRES NO 61-87NO. ~1-87 RESOLUTION OF THE COUNCIL OF THE CITY OF BAKERSFIELD AMENDING THE PARTICIPATION AGREEMENT FOR THE CITY CENTER PROJECT BETWEEN MOSESIAN DEVELOPMENT CORPORATION AND THE BAKERSFIELD REDEVELOPMENT AGENCY WHEREAS, the Bakersfield Redevelopment Agency (the Agency) and Mosesian Development Corporation (the Participant) have heretofore entered into a Participation Agreement (hereinafter the "PA"), dated October 24, 1986, pursuant to which the Agency agreed to sell, and Participant agreed to purchase and develop, certain real property (the "Sales Property") together with property already owned by the Participant (the "Participating Property"). The Sales Property and the participating Property are located within the boundaries of the Downtown Bakersfield Redevelopment Project (the "Project") and are collectively referred to as the "Site"; and WHEREAS, the Agency and the participant now desire to make cer- tain amendments to the PA in light of current Economic conditions. NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF BAKERSFIELD DOES HEREBY RESOLVE AS FOLLOWS: Section 1. The City Council finds and determines that the pur- pose of this Agreement is to implement the PA by making certain amend- ments thereto in light of current conditions and the further planning decisions of the parties. Section 2. The City Council hereby finds and determines that the Method of Financing (Attachment No. 3) is hereby revised and attached hereto as "Attachment No. 3, Revised Method of Financing," and incor- porated herein by reference, and is hereby substituted for the origi- nal Attachment No. 3 and made a part of the PA. Section 3. The City Council hereby finds and determines that the Schedule of Performance (Attachment No. 4 of the PA) is hereby revised and attached hereto as "Attachment No. 4, Revised Schedule of Performance," and incorporated herein by reference, and is hereby sub- stituted for the original Attachment No. 4 and made a part of the PA. Section 4. The City Council hereby finds and determines that except as modified and amended in this Amendment of the Participation Agreement, all other shall remain in full provisions of the PA not inconsistent herewith force and effect. .......... o0o .......... I HEREBY CERTIFY that the foregoing Resolution was passed and adopted by the Council of the City of Bakersfield at a special meeting thereof held on 22nd day of April, 1987, by the following roll call vote: AYES: COUNCILMEMBERS: CHILDS, CHRISTENSEN, SMITH,~; MOORE, DICKERSOI'J,'SALVAGGIO NOES: COUNC~LF, IEr~4BERS: ~. ABSENT: COUNCILM EM?-Br~: ABSTAINING. COUNCILMEMG~HS: CITY CLERK and Ex Officio Clerk of the Council of the City of Bakersfield APPROVED April 22, 15~7 MAYOR of the City of B/~kersfield CIT~ ~T~RNEY of the City Bakersfield 041587 ATTACHMENT NO. 3 REVISED METHOD OF FINANCING I. PARTICIPANT'S OBLIGATIONS A. Purchase Price 1. Amount of Purchase Price. The Purchase Price to be paid by the Participant to the Agency for the Sales Property under this Agreement shall be in an amount equal to thirty-five percent (35%) of the net fair market value (the "NFMV") of the Site and all improvements thereon (the "Office Project") as set forth herein. NFMV means "Fair Market Value," as defined herein, less (i) "Allowable Dew~lopment Costs," as defined herein; (ii) a Participant's Profit equal to fifteen percent (15%) of Fair Market Value (as defined herein); and (iii) a cost of sale equal to three percent (3%) of Fair Market Value. "Fair Market Value" means an amount to be determined through an appraisal process. Within the time set forth in the Schedule of Performance (Attachment No. 4), each party shall at its own cost select an M.A.I. appraiser to make an independent fair market evaluation of the Site and all improvements thereon. The Fair Market Value of the Office Project shall be equivalent to the value of the Office Project as if it were for sale on the open market without consideration for any financing which may exist for the Office Project. If the two appraisers are in dispute as to the value of the Office Project, they shall meet and confer and attempt to establish an agreed value. If the difference between the two appraisals is ten percent (10%) or less of the amount of the higher appraisal, the Fair Market Value shall be the average of the two appraisals. If the difference between the two appraisals is more than ten percent (10%) of the amount of the higher appraisal, the appraisers shall select ~ third M.A.I. appraiser to make an independent fair market evaluation. The Fair Market Value shall be the average of the values determined by the three appraisers. The cost of the third appraiser shall be borne equally by the parties. During such appraisal procedure, the parties shall continue to attempt to agree on a Fair Market Value. Attachment No. 3 Page 1 of 13 "Allowable Development Costs" shall be determined as of the "Break-Even Date" (as defined herein), and shall mean the total "Development Costs" (as defined herein), relating to the office building and parking improvements less the A§ency's Reimbursement as set forth in Section II.B. hereof. The Break-Even Date means the earlier of (i) twenty-four (24) months from the date the Certificate of Completion for the Developer's improvements on the Site is issued, or (ii) the month that Gross Income (as defined in subsection d.(1), below) first equals or exceeds Permitted Expenses (as defined in subsection d.(2), below). "Development Costs" shall include: a o All Hard Costs ("Hard Costs" are all direct costs of labor, materials and subcontract performance that are incorporated into the improvements, and all acquisition costs for the Participating Property) including but not limited to land acquisition costs, construction costs, tenant improvements costs to the extent not paid for by tenants, and other capital improvements costs; All Soft Costs ("Soft Costs" are all indirect costs of the improvements that are properly categorized ~s capital expenditures in accordance with generally accepted accounting principles and any other item of actual expenditure customarily incurred in the development of office buildings with parking facilities) actually expended for the development of the Office Project commencing with the date of the Agreement to Negotiate Exclusively between the Participant and the Agency through the construction period, including but not limited to fees paid to attorneys, architects, engineers, accountants, consultants and other professionals; appraisal costs; title costs; required letters of credit costs; construction testing costs; construction performance bond costs; reasonable employee salaries, if any, not included in a., above, and only to the extent directly allocable to the development of the Office Project; insurance premiums and commissions; advertising and marketing costs and Attachment No. 3 Page 2 of 13 d o leasing commissions up to the Break-Even Date including Site signage, brochures, models, and real estate brokerage promotional costs; real estate taxes; financing costs and other charges; points and commissions on loans; any payments to governmental bodies (other than federal, state and local income taxes) relating to or arising out of the project for taxes, assessments or otherwise; and subdivision costs. Payments to non-third parties will be restricted in situations where the Participant is its own development manager in an amount not to exceed four percent (4%) of its Hard Costs, or where the Participant is its own leasing agent in an amount not to exceed twenty-five percent (25%) of the first year's Gross Income or market leasing commission rate, whichever is less. Any other such situations shall also be restricted to costs and fees which are reasonable and customary. Interest paid by Participant during the construction period on all net disbursements. Any accumulated amount of "negative cash flow," as defined herein, that may be generated from the Office Project from the date the Certificate of Completion is recorded to the Break-Even Date. For the purpose of this Section I.A., the net cash flow or, if the cash flow is negative, the "negative cash flow" shall be calculated as follows: The Gross Income of the Office Project which means all revenue of any kind or nature received by or payable to Participant from the Office Project, including, without limitation, all revenue from the office and parking tenants (but excluding any security deposits paid to the Participant which must be returned to tenants) during the period from the date the Certificate of Completion is Attachment No. 3 Page 3 of 13 (2) recorded to the Break-Even Date. The Agency shall have the right to review and approve in advance all leases with tenants in the Office Project for the limited purpose of ascertaining that the rental terms applicable through the Break-Even Date are reasonable in light of the rental terms for the remainder of the lease term; less Permitted Expenses which means normal and reasonable operating expenses not reimbursed by tenants, including building insurance, janitorial, exterior and interior maintenance, heating, ventilating and air conditioning maintenance, general cleaning and elevator maintenance; leasing and refitting expenses associated with each lease within the Office Project, which expenses shall be amortized over the term of their respective leases; management expenses, which shall not exceed 4% of the Gross Income of the Office Project; a reserve allowance for capital replacements, which shall not exceed eight cents per gross square foot of the Office Project; repair costs, except to the extent they are properly chargeable against the accrued reserve allowance and are not reimbursed or paid for by insurance proceeds; and debt service, which shall be equivalent to the sum of the Office Project's total[ original development costs plus the amount of each year's negative cash flow, if any, multiplied by the debt service constant, as defined herein. In the event debt is not amortized over the term of the loan by equal payments of principal and interest, debt service for purposes of this subsection (2) shall be the amount necessary to amortize the principal and interest Attachment NO. 3 Page 4 of 13 payments due over a term of thirty (30) years. The debt service constant is the rate which will amortize both the principal and interest due on the debt. Within 90 days after the end of each calendar year until the Purchase Price has been fully paid, the Participant shall submit to the Agency an annual audited financial statement of the Office Project's audited development costs, gross income, gross effective income, operating expenses and debt service. Additionally, the Participant shall submit to the Agency a certificate of an independent certified public accountant to be mutually agreed upon by the Participant and the Agency, which certificate shall be addressed to the Agency and shall state that the accountant is familiar with the terms of this Agreement and attesting to the accuracy of the Participant's operational income and costs as reported in the audited financial statement. 2. ~ime for Pa~-ment of Purchase Price Prior to the ninth anniversary of the date of conveyance of the Sales Property by the Agency to the Participant, the Participant shall either pay to the Agency the Purchase Price in full or shall elect to commence paying the Purchase Price to the Agency in installments as described herein. In the event that the Participant desires to pay the Purchase Price in installments, commencing on the ninth anniversary of the date of conveyance of the Sales Property by the Agency to the Participant, the Purchase Price and interest on the unpaid balance will be repaid in the form of montlhly payInents equal to sixty percent (60%) of the Project's net cash flow, however, the Participant shall make a minimum annual payment of $52,000. Therefore, if at the end of each year the twelve (12) monthly payments of sixty percent (60%) of the Project's net cash flow has not equaled at least $52,000, within 30 days after the end of the year the Participant shall pay the difference between the amount paid to the Agency in that year and $52,000. Interest on the unpaid balance of the Purchase Price shall accrue at a rate equal to two percent (2%) above the prime interest rate. The prime interest rate shall be established each year based on the Bank of America prime interest rate in existence on the anniversary date of the payment of tlhe first installment of the Purchase Price. In the event the Participant wishes to refinance, or sell, transfer, convey, assign or lease (except for leases for occupancy) the Site after issuance Attachment No. 3 Page 5 of 13 of the Certificate of Completion but prior to the time established for payment of the Purchase Price as set forth herein, the Participant shall with the approval and at the sole discretion of the Agency pay the Agency early (the "Early Sale") for the Sales Property ("the Early Purchase Price") in an amount equal to the greater of (a) $650,000 (the fair market value of the Sales Property at the time of execution of this Agreement), plus an amount equal to any increase in the CPI (as defined herein) for every year after the time of execution of this Agreement until payment of the Early Purchase Price; or (b) the fair market value, which shall be determined through the same process set forth in Section I.A.1. hereof, of the land only within the Sales Property as determined at the time of Early Sale. In such event, the Agency shall reconvey or cause to be reconveyed the Deed of Trust. The CPI shall mean the 1978 Revised United States Department of Labor's Bureau of Labor Statistics Consumer Price Index for Urban Wage Earners and Clerical Workers, Los Angeles - Long Beach - Anaheim, California, All Items Series A (1967=100). If the Participant wishes to refinance, or sell, transfer, convey, assign or lease (except for leases for occupancy) the Site after both issuance of the Certificate of Completion and commencement of the payment of the installments of the Purchase Price as set forth hereinabove but prior to payment in full of the Purchase Price, the unpaid balance of the principal of the Purchase Price and the accrued interest thereon must be paid to the Agency before the time of such refinancing, sale, transfer, conveyance, assignment or lease. Security for Purchase Price and Additional ?ayments Prior to the close of escrow, the Participant shall execute and submit to the Agency (1) a Promissory Note, as evidence of the Participant's obligation to pay the Purchase Price, and (2) a Deed of Trust on the Site to secure the Promissory Note. Both documents shall be approved by Agency counsel in conformance with all the terms of this Section I.A.3. The Agency will agree to subordinate its interest in the Site secured by the Deed of Trust to the original construction loa~n and to the original permanent loan if the amount of the loan does not exceed $10,650,000. This agreement to subordinate the Agency's interest in the Site secured by a Deed of Trust shall not include the Agency's interest in the Parking Lease described in Section III of this Method of Financing. Attachment No. 3 Page 6 of 13 The Agency shall not subordinate its interest in the Site secured by a Deed of Trust to any other financing including but limited to a refinancing, sale, transfer, conveyance, assignment or lease and in the event any of these actions occur, the provisions of Section I.A.2. shall govern. Except for the Agency's agreement to subordinate as set forth in Section B herein, any agreement to subordinate the Agency's interest in the property secured by a Deed of Trust shall only' take place if all the following conditions are satisfied: (a) In accordance with Section 214 the Agency shall approve the original construction and permanent financing commitment which shall contain the following conditions: <i) A requirement that 44,000 square feet (40%) of the building be preleased prior to the allocation of the loan proceeds; and (ii) A requirement that the general partners will guarantee repayment of the indebtedness. (b) All financing documents containing the subordination of the Agency's interest in the Site secured by a Deed of Trust shall be subject to review and approval by the Agency. These financing documents shall provide that: (i) Any insurance proceeds from fire and extended coverage or other coverage shall be used for repairk, reconstruction or restitution of the office project and not to repay any part of the outstanding indebtedness secured by the m_~rtgage, deed of trust or other security interest. Copies of all notices of default shall be sent to the Agency and shall give the Agency the right, but not the obligation, sixty (60) days to cure, or commence to cure, within sixty days (60) any default after the time for the Participant to cure has expired (including any extensions of time). Neither the Agency's right to cure any such default nor the exercise of such right by the Agency shall constitute or be construed as an assumption of the Participant's liability under the financing documents. Attachment No. 3 Page 7 of 13 If the Agency agrees to subordinate its interest in the Site secured by a Deed of Trust in conformance with this Section I.A.3. then in the years prior to commencement of the payment of the Purchase Price, and in addition to any other payments required by this Agreement, including the Purchase Price, the Participant shall make the following payments to the Agency from the Net Cash Flow from the Office Project. For the purpose of this Section I.A.3. Net Cash Flow shall be calculated according to Section I.A.d except that Permitted Expenses in I.A.d.(2) shall not include "debt service"· Until commencement of the payment of the Purchase Price by the Participant, the Net Cash Flow shall be allocated according to the following priorities: First, the Participant shall receive an 11% preferred cumulative return on a total project cost of $11,500,000 from which debt service will be made· Second, from the remaining Net Cash Flow, the Agency shall be paid the greater of (a) or (b) below: (a) The following Guaranteed Minimum Payments: Time After Conveyance of Sales Property Amount 30 months 0 3 years 10,000 4 years 20,000 5 years 30,000 6 years 40,000 7 years 52,000 8 years 52,000 9 years 52,000 (b) 35% of the Net Cash Flow from 30 months until 9 years after conveyance of the Sales Property. Third, Participant shall receive the remaining Net Cash Flow. If in any year the Agency does not receive the Guaranteed Minimum Payment according to the schedule above then the difference between the Guaranteed Minimum Payment and the amount paid by the Participant to the Agency shall be paid by the Participant to the Agency with interest Attachment No. 3 Page 8 of 13 calculated according to the provisions of paragraph 2 of Section I.A.2. at the time the Participant pays the Purchase Price. This obligation shall be in addition to the Purchase Price and shall be paid ~rom the Participant's 65% share of the NFMV of the Office Project. If the Agency's interest is subordinated, within 90 days after the end of each calendar year through the calendar year in which the Purchase Price is fully paid, the Participant shall submit the payment to the Agency required by this Section I.A.3. B. Security for Participant's Failure to Fund Fee As a condition to the Participant's receipt of a permanent loan commitment from its financing institution (the "Lender"), the Participant must execute a secured promissory note in the amount of $315,000 to be paid to the Lender in the event the Participant does not subsequently execute the permanent loan documents and draw upon the funds therefrom according to the terms of the permanent loan commitment. This fee is hereinafter referred to as the "Failure to Fund Fee." The Participant wishes to execute a promissory note to be secured by a deed of trust on the Site in favor of the Lender in the amount of the Failure to Fund Fee. The Agency will agree to subordinate its interest in the Site which shall be secured by the Deed of Trust specified in Section A.3 herein to a deed of trust on the Site to secure the promissory note for the Failure to Fund Fee, subject to the following conditions: 1. In consideration of the Agency's agreement to subordinate its interest in the Site, Peter A. Mosesian, a general partner of Mosesian Development Corporation, shall execute a personal unconditional guarantee and promise to pay $315,000 to the Agency, its successors and assigns, on demandj in lawful money of the United States of America, in the event the Lender demands payment of the promissory note or the promissory note becomes payable. The guarantee shall continue until such time as the promissory note is either paid in full or becomes null and void. 2. The promissory note, deed of trust and guarantee shall be consistent with the terms of this Agreement and shall be in a form acceptable to the Agency. In particular, the promissory note shall include provisions requiring payment only if the permanent loan is not drawn down by the Participant and that the effect of the Attachment No. 3 Page 9 of 13 promissory note and deed of trust shall terminate once the permanent loan is drawn down by the Participant. Notwithstanding any provisions in this Agreement to the contrary, this deed of trust shall not be subject to the conditions for deeds of trust as set forth in Section A.3 herein. Site Preparation and Clearance and Improvements Inside Curbline The Participant shall be responsible for all of the site preparation and clearance costs and all of the improvement costs inside the curbline. However, the Agency shall pay for some of these costs as set forth in Section II.B. hereof. II. AGENCY OBLIGATIONS Acquisition of the Sales Property and Relocation of Occupants The Agency agrees to make good faith efforts to acquire all portions of the Sales Property and to relocate occupants therefrom, and shall be responsible for all costs incurred theref¢,r. site Preparation and Clearance and Parkinq Improvements The Agency shall pay for a portion of the Participant's costs for site preparation and clearance and the development of parking improvements, on the Sales Property in an amount not to exceed $600,000 (the Agency's Reimbursement). After the construction lender has been selected by the Participant and prior to approval of the financing by the Agency, the Agency shall c~rtify in a form acceptable to the Participant and the construction lender that the Agency has set aside in an account $600,000 which will be available to pay costs of Site preparation, clearance and development of parking improvements. After the commencement of construction, the Participant shall cause the contractor to separate the costs of Site preparation, clearance and the development of parking improvements from the costs of other improvements, and submit a statement and evidence of these costs to both the Participant and the Executive Director of the Agency. Within twenty (210) days after the Agency's receipt of the statement and evidence of costs, the Executive Director of the Agency shall approve or disapprove of the costs. If approved, the Agency shall pay such costs immediately, up to a maximum total of $600,000 for the costs either Attachment No. 3 Page 10 of 13 directly to the contractor or pursuant to another lawful method which is acceptable to the Agency, the Participant and the construction lender. C. Off-Site Improvements The Agency shall be responsible for constructing all of the off-site improvements curbline. the costs of outside the D. Loan for Rehabilitation The Agency shall use its good faith effort to have the City approve a loan to the Participant for the purpose of rehabilitating the existing office building on the Participating Property. The loan, if made, would be from the City's existing rehabilitation loan program. Failure of the Agency's to obtain City approval of a loan shall not excuse the Participant from obtaining the financing required by this Agreement and is not grounds for terminating this Agreement or not complying with any of its requirements. III. PARKING LEASE In the event the Agency exercises its Parking Option as set forth in Section II.A. of the Scope of Development (Attachment No. 5), within the time set forth in the Schedule of Performance (Attachment No. 4), the Agency and the Participant agree to enter into a lease agreement (the "Parking Lease") whereby the Agency shall lease approximately 1C0 parking spaces (the "Agency Parking Spaces") from tke Participant, in accordance with the following terms and conditions: Leased Premises. The Agency shall lease the Agency Parking Spaces from the Participant to located in the parking structure to be constructed by the Participant on the Sales Property. be Co Lease Term. The term of the Parking Lease shall commence on the first day the Agency Parking Spaces are open and available for use (the "Commencement Date") and shall continue for ninty-nine (99) years. Lease Rate. The Agency shall pay to the Participant a lease amount equal to One Dollar ($1.00) per month plus an annual pro rata share of the operating and maintenance expenses attributable to the Agency Parking Spaces. Attachment No. 3 Page 11 of 13 D. obtained Fo Go Parkinq Revenues. All parking revenues from the Agency Parking Spaces shall be distributed to the Agency. Use, Operation and Location. The Agency shall control the use and operation, including rates, of the Agency Parking Spaces. The Agency Parking Spaces shall be located at a location mutually acceptable to the Agency and the Participant. Maintenance and Repair. The Participant shall be responsible for the maintenance and repair of the Agency Parking Spaces. Insurance/Damage or Destruction. The Participant shall carry fire and extended coverage insurance in an amount equal to 100% of the replacement costs (as defined below) of the Parking Facility to ensure against loss or damage to the Parking Facility resulting from risk ordinarily within the classification of fire and extended coverage, and specifically against the following perils: fire, windstorm, cyclone, tornado, hail, explosion, riot, riot attending strike, civil commotion, malicious mischief, vandalism, aircraft, vehicle, smoke damage and sprinkler leakage. Such insurance shall be carried with financially responsible insurance companies and may be carried under a policy or policies covering other property owned or controlled by the Participant, provided that such policy or policies shall allocate to the Parking Facility an amount not less than 100% of the replacement costs (as defined below) thereof. The term "replacement costs" as used in this Section G. shall mean the actual costs of replacing the Parking Facility including amounts for construction, architectural, engineering, legal and administrative fees and inspection and supervision during construction. Said replac~ment costs shall be determined from time to time (but not less frequently that once in every thirty-six months) either by an appraisal by an insurance company providing insurance covering the destruction of the Parking Facility or by an appraiser selected by the Participant and approved by the Agency. All insurance provided under this Section G. shall be for the benefit of the Participant and the Agency as a named insured. Attachment No. 3 Page 12 of 13 The Participant shall furnish to the Agency on or before the effective date of the Parking Lease evidence that the insurance referred to in this Section G. shall be in force and effect on said effective date and that the premiums therefor have been paid. In the event that during the term of the Parking Lease the Parking Facility shall be damaged or destroyed by fire or other casualty, the Participant shall repair or restore the Parking Facility with all reasonable diligence. In the event the Participant does not repair or restore the damaged or destroyed Parking Facility, the insurance proceeds received on account of any damage to or destruction of the Parking Facility or any part thereof shall be applied as follows: The amount of the insurance proceeds attributable to the Agency Parking Spaces shall be paid to the Agency. The remainder of any insurance proceeds shall be paid to the Participant. ATTACHMENT NO. 5 Attachment No. 3 Page 13 of 13 ATTACHMENT NO. 4 REV__I_S_~D SCHEDULE OF PERFORM~ANCE Action Environmental Assessment. The Agency shall take all necessary actions and shall prepare all necessary documents in order to comply with CEQA. Submission of Basic Concept Drawinus. The Participant shall prepare and submit to the Agency for approval the Basic Concept Drawings and related documents for development of the Site. Approval of Basic ConcePt Drawings. The Agency shall approve or disapprove the Basic Concept Drawings. Acenc¥ Park!no Option. The Agency must exercise the Parking Option if it wishes the Participant to provide the Agency with the additional 100 parking spaces. Submission--Preliminary Construction DrawinGs, Landscabins and Gradinc Plan. The Participant shall prepare and submit to the Agency Preliminary Construction Drawings, outline specifications and Landscaping and Grading Plan for improvements on the Site. Aooroval--Preliminarv Construc- tion Drawincs, L~n~scsDins and Gradins Plan. The Agency shall approve or disapprove the Pre- liminary Construction Drawings, outline specifications and Land- scaping and Grading Plan for improvements on the Site. [)ate Prior to approval of this Agreement. Within 60 days after execution of this Agreement by the Agency. Within 30 days after receipt by the Agency. Within 30 days after approval of the Basic Concept Drawings. Within 90 days after approval by the Agency of the Basic Concept Drawings. Within 30 days after receipt by the Agency. Attachment No. 4 Page 1 of 5 10. 11. 12. Action Submission--Evidence of Financinq Commitments. The Participant shall submit to the Agency satisfactory evidence that the Participant has the equity capital and commitments for mortgage financing necessary to carry out its obligations under this Agreement. Participant Submits Evidence of Additional LandscaoinG & Maintenance Obliqations on Adjacent Abandoned Property. The Participant shall either cause the Adjacent Property Owner to enter inte an Owner Participaticn Agreement with the Agency or submit an agreement between the Adjacent Property Owner and the Participant, which provides for the p]anting, landscaping and maintenance of the Adjacent Abandoned Property. ADproval--Evid- nce of Financing Commitments. %he Agency shall approve or disapprove the Participant's evidence of financing. Commencement of AcQuisition. The Agency shall ccmmence acquisition of the Sales Property. Opening of Escrow· The Agency and the Participant shall open the escrow for conveyance of the Sales Property. Submission--Final Construction Drawings, Landscapin~ and Gradina Plan· The Participant shall prepare and submit to the Agency Final Construction Drawings and specifications and Final Landscaping ~.nd Grading Plan for the Site· Within 6 months after approval of this Agreement by the Agency. Prior to submission of Final Construction Drawings, Landscaping and Grading Plan for the Site. within 30 days after receipt by the Agency. Within 30 days after Agency's approval of Participant's evidence of financing. Within 30 days after commence- ment of acquisition by the Agency. Within 120 days after the approval of the Preliminary Construction Drawings and Landscaping and Grading Plan. Attachment No. 4 Page 2 of 5 13. 15. 16. 17. lS. $ction ADDroYal--Final Construction Drawinca, LandscaDinc and Gradinq Plan. The Agency shall approve or disapprcve the Final Construction Drawings and specifications and Final Landscaping and Grading Plan for the Site. Completion of Accuisition. The Agency shall complete acquisition of the Sales Property and the relocation of all occupants. Parkinc Lease. The Participant and the Agency shall execute the Parking Lease. Parcel MaD. If necessary, the Agency shall prepare and process a Parcel Map for conveyance of the Sales Property. Participant's Submission of Documents. The Participant shall submit to the Agency: - evidence cf fee title to the Participating Property; a copy of the contract for construction of the improvements on the Site; a copy of the construction contractor's performance bond for completion of the construction of t]he improvements on the Site. Deposit of Grant Deed. The Agency shall deposit the grant deed for the Sales Property into escrow. Within 30 days after receipt by the Agency. within one (1) year after the commencement of acquisition. Prior to the close of escrow. Prior to the close of escrow. Prior to the close of escrow. Not later than 3 days prior to the close of escrow. Attachment No. 4 Page 3 of 5 19. 20. 21. 22. 23. 24. 25. Deposit of Deed of Trust and Promissory Note. The Participant shall deposit into escrow the Deed of Trust and Promissory Note. Delivery of Possession of Sales Property to Participant. The Agency shall deliver possession of the Sales Property to the Participant. Close of Escrow. Tine Agency shall convey title to the Participant, and the Participant shall accept conveyance of the Sales Property. Commencement of The Participant construction of on the Site. Improvements. shall commence the improvements Completion of Improvements. The Participant shall complete construction of imp~ovements on the Site. Certificate of Comoletion. The Agency shall file for recordation a Certificate of Completion of the Site. Selection of ADoraisers ~nd Commencement of ADprsisa!s. The Participant and the Agency shall select their appraisers and have the appraisals commenced for determining the Fair Market Value in order to establish the Purchase Price to be paid to the Agency by the Participant. Not later than 3 days prior to the close of esorow. The earlier of (1) the close of escrow for conveyance of the Sales Property by the Agency to the Participant; or (2) if the Agency elects to acquire the property by eminent domain, within 150 days of the Agency approval of the Participant's evidence of financing. Within 10 days after the Agency has completed acquisition and relocation and all previous actions required by this Agreement have been achieved. Within 30 days after convey- ance of the Sales Property to the Participant. Within 13 months after the commencement of construction. Upon completion of construc- tion of all the improvements on the Site satisfactory to the Agency. Prior to the end of the ~02nd month after the close o~ escrow for conveyance of the Sales Property by the Agency to the Participant. Attachment No. 4 Page 4 of 5 26. 27. 28. 29. Action Appraisals Completed. Appraisals shall be completed. Commencement of Third Appraisal. If a third appraisal is required, it shall be commenced. Completion of Third Appraisal and Establishment cf Fair Market Value. The third appraisal is completed and the Fair Market Value is established. Payment of Purchase Price. The Participant shall either pay the Agency the Purchase Price in full or commence paying the Purchase Price in installments for the Sales Property as set forth in the Method of Financing (Attachment No. 3). Prior to the end of the 105th month after the close o~ - escrow for conveyance of the Sales Property by the Agency to the Participant. Prior to the end of the 106th month after the close escrow for conveyance of the Sales Property by the Agency to the Participant. Prior to the end of the t07th month after the close escrow for conveyance of the Sales Property by the Agency to the Participant. Prior to or on the ninth anniversary of the date of conveyance of tlhe Sales Property by the Agency to the Participant. Attachment No. 4 Page 5 of 5 SCOPE OF DEVELOPMENT I. GENERAL The Site shall be designed and developed as an integrated complex in which the structures will have a high quality contemporary architectural design, with harmony and compatibility with adjacent new commercial buildings in the downtown area. The open spaces between the buildings where they exist shall be designed, landscaped and developed with the same degree of quality. The total development shall be in acceptable conformity with the Redevelopment Plan for the Downtown Bakersfield Redevelopment Project and all standards as contained in the adopted Redevelopment Element of the City's General Plan. The Agency and the Participant will cooperate and direct their consultants, architects and/or engineers to cooperate so as to ensure the continuity and coordination vitally necessary for the proper and timely completion of the Project. II. PRIVATE DEVELOPMENT AND SITE CLEARANCE A. Participant's Improvements The Participant shall construct or cause to be constructed on the Site an office building of approximately 100,000 gross square feet, with approximately 30 surface parking spaces and a multi-level parking facility (the "Parking Facility") containing a minimum of approximately 325 parking spaces, of which approximately 100 parking spaces shall be subterranean, landscaping of all open common areas between and among the buildings on the Site, and such other on-site improvements as are necessary for the development, use and maintenance of the Site (the "Participant's Improvements"). In addition, the Agency has the sole option at its discretion to require the Participant to construct an additional level of parking within the Parking Facility for approximately 100 additional parking spaces (the "Parking Option"). In order to exercise the Parking Option, the Agency must nctify the Participant in writing of its desire to exercise it within thirty (30) days after approval of the Basic Concept Drawings for the Parking Facility. In the event the Agency does exercise the Parking Option, the Agency shall be responsible for the costs of construction Attachment No. 5 Page 1 of 4 of the additional parking spaces, and shall enter into an agreement with the Participant for the lease of such additional parking spaces as set forth in Section III. of the Method of Financing (Attachment No. 3). A heliport shall be permitted, subject to all applicable regulations by the City, County or Federal Aviation Agency. All microwave receiving equipment, antennas, transmitting dishes, etc., and environmental systems shall be architecturally integrated with the basic design of the structure. If design, location and treatment of these facilities cannot be addressed during the preliminary construction drawing stage, the treatment of this equipment must be submitted to the Design Review Board for approval. B. Architecture and Desiqn The Participant's Improvements shall be of high architectural quality, shall be well-landscaped, and shall be effectively and esthetically designed. The shape, scale of volume, exterior design and exterior finish of each building must be consonant with, visually related to, physically related to, and an enhancement to each other and to adjacent buildings within the Project Area. The Participant's plans submitted to the Agency for approval shall describe in reasonable detail the architectural character intended for the Participant's Improvements. C. Landsca~inq Landscaping shall embellish all open spaces upon the Site (including setback areas) to integrate the Participant's Improvements on the Site. Landscaping includes but is not limited to such materials as paving, trees, shrubs and other plant materials, landscape containers, plaza furniture, top soil preparation, automatic irrigation, landscape and pedestrian lighting and water elements. In addition to the landscaping required on the Site, the Participant shall be responsible for the planting and landscaping required in the existing area of K Street between 17th and 18th Streets which is to be abandoned by the City pursuant to Section III.E. herein and the mainten- ance thereof (the "Additional Landscaping and Maintenance Obligations"). A portion of this abandoned propertly shall be located on property adjacent to the Site (the "Adjacent Abandoned Property") and shall be owned by an adjacent property owner (the "Adjacent Property Owner"). In order to assure that the Additional Landscaping and Maintenance Attachment No. 5 Page 2 of 4 Obligations pertaining to the Adjacent Abandoned Property are fulfilled within the time set forth in the Schedule of Performance (Attachment No. 4), the Participant shall either cause the Adjacent Property Owner to enter into an owner participation agreement with the Agency requiring the Adjacent Property Owner to comply with the Additional Landscaping and Maintenance Obligations or submit an agreement between the Participant and the Adjacent Property Owner which provides the Participant with access and rights to the Adjacent Abandoned Property for the purposes of complying with the Additional Landscaping and Maintenance Obligations. Landscaping shall carry out the objectives and principles of the Agency's desire to accomplish a high quality aesthetic environment. D. Signs All signs on the exteriors of buildings and structures facing the street developed as a part of the Participant's Improvements are of special concern to the Agency and must be approved by the Agency, which approval shall not be unreasonably withheld, and must comply with applicable City ordinances and codes. The sign program shall be developed in a comprehensive manner and shall be submitted to the Design Review Board as a comprehensive sign program prior to receiving Occupancy permits. The locations, size, style and texture of signs must be clearly defined. E. Demolition, Compaction, Finish Gradinq and Site Work The Participant shall demolish all existing structures on the Site and compact, finish grade and do such site preparation as is necessary for the construction of the Participant's Improvements on the Site. III. PUBLIC PARTICIPATION IN DEVELOPMENT OF THE SITE A. Relocation of Occupants of the Site The Agency shall relocate all occupants of the Site in accordance with state law. B. Off-Sites The Agency shall be responsible for constructing all of the off-site improvements outside of the curbline, and for providing utilities to the property line of the Site. Attachment No. 5 Page 3 of 4 C. Parcel MaD If necessary, the Agency, prior to the date of conveyance of the Sales Property, shall prepare and record, or shall cause to be prepared and recorded, a parcel map with respect to the Sales Property. The Agency shall bear the costs of preparing and filing the parcel map if required for conveyance of the Sales Property to the Participant. D. Environmental Review The Agency, prior to the date of conveyance of the Sales Property, shall prepare and certify the appropriate environmental document required for development of the Site. E. Easements The Agency shall cause the abandonment of (1) the east one-half of "K" Street between 17th and 18th Streets; and (2) the 30-foot east/west easement located in the middle of the Site and relocation of the utilities contained therein, if necessary. The Agency and the Participant shall grant and permit all other necessary and appropriate easements and rights for the development of the Site, including, but not limited to, easements and rights of vehicular access, pedestrian access, parking, all utility services, structural support and ventilation. Attachment No. 5 Page 4 of 4