Development Agree Park Place II

Exhibit 10.5
Recording Requested By And When Recorded Return To: City of Irvine One Civic Center Plaza Irvine, CA 92606-5208 Attn: City Clerk (Exempt from Recording Fees per Gov't. Code a7 6103) PARK PLACE
DEVELOPMENT AGREEMENT

Dated October 24, 2002

TABLE OF CONTENTS Page RECITALS 1 TERMS AND CONDITIONS 5 1. Definitions 5 1.1 Additional Development Rules 5 1.2 Applicable Land Use Regulations 5 1.3 Development 6 1.4 Effective Date 6 1.5 Exactions 6 1.6 Existing Approvals 7 1.7 IBC Fees 7 1.8 Master Site Plan 7 1.9 Mortgagee 8 1.10 Point System 8 1.11 Processing Fees 8 1.12 Project 8 1.13 Property 9 1.14 Required Fees 9 1.15 Taxes and Assessments 10 1.16 Uniform Construction Codes 10 1.17 Additional Defined Terms 11 2. Term 11 3. Vested Right to Develop the Property and to Complete the Project 11 4. Specific Criteria Applicable to Development of the Project 11 4.1 Applicable Rules, Regulations, and Approvals 11 4.2 Specification of Additional Development Rules 12 4.2.1 Permitted Uses, Densities, Heights, etc. 12 4.2.2 Timing of Development 12 4.2.3 Building Permits and Other Approvals and Permits 13 4.2.4 Procedures; Limitations on Exactions 13 4.2.5 Required Fees; Exemption Period 13 4.2.6 Taxes and Assessments 14 4.2.7 Transfer of Development Rights to Other IBC Sites 15
4.2.8 Amendment of Condition 4 of Density Bonus CUP 15 4.2.9 Amendment of Condition 43 of Density Bonus CUP 16 4.2.10 Continued Permitted Uses for Property 17 4.2.11 Clarification of Minor Modifications Procedures 17 4.2.12 Clarification of "Site" Definition 18 4.2.13 Clarification of Building Setback - Street 18 4.2.14 Method for Calculating Park Fees 18 4.2.15 Future Applications for Land Use Approvals 18 4.2.16 Future Discretionary Reviews 18 4.2.17 Subsequent Actions and Approvals 19 4.2.18 Subsequent Environmental Review 20 4.2.19 State and Federal Laws 20 4.2.20 Later-Enacted Regulations 22 4.3 Superseding Effect of Additional Development Rules 23 5. Public Benefits 23 6. Binding Effect of Agreement 23 6.1 City Bound by Agreement 23 6.2 Enforcement 24 6.3 Initiative or Other Voter-Approved Measures 24 6.4 Appeal 26 7. Annual Review 26 8. Arbitration; Damages 26 9. Estoppel Certificate 29 10. Encumbrances and Mortgage Protection 29 10.1 Discretion to Encumber 29 10.2 Mortgagee Rights and Obligations 29 10.2.1 Subordination 29 10.2.2 No Impairment of Lien 30 10.2.3 Election to Assume Obligations 30 10.2.4 Request to Modify 31 11. Assignment 31


12. Successors and Assigns

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13. Notices

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14. Additional Provisions 34 14.1 Relationship of Parties 34 14.2 Modification or Amendment 34 14.3 No Third Party Benificiaries 34 14.4 Not a Public Dedication 34 14.5 Severability 35 14.6 Exhibits 35 14.7 Entire Agreement 35 14.8 Governing Law; Venue 35 14.9 Consistency with Laws in Force 35 14.10 Justifiable Reliance 36 14.11 Consent 36 14.12 Covenant of Cooperation 36 14.13 Nonliability of City Officers and Employees 36 14.14 Nonliability of Developers' Members, Officers and Employees 37 14.15 Eminent Domain 37 14.16 Termination 37 14.17 Attorneys' Fees 37 14.18 Waiver 38 14.19 Recordation 38 14.20 Time 38 14.21 Construction 38 14.21 Signature Pages 38 Exhibit "A" Legal Description of Property

49 Exhibit "B" Master Site Plan

52 Exhibit "C" List of Documents/Entitlements Constituting the Existing Approvals

53 Exhibit "D" Applicable Land Use Regulations

58 Exhibit "E" Section V.E-736.5 of 1989 Zoning Code

59 Exhibit "F" List of Trip Rates

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PARK PLACE
DEVELOPMENT AGREEMENT

This PARK PLACE DEVELOPMENT AGREEMENT (the "Agreement") is made and entered into as of October 14, 2002, by and between (1) the CITY OF IRVINE, a municipal corporation ("City" or "Irvine") and (2) CROW WINTHROP DEVELOPMENT LIMITED PARTNERSHIP, a Maryland limited partnership ("Crow Development"), SHOPS AT PARK PLACE LLC, a Delaware limited liability company, 3121 MICHELSON DRIVE LLC, a Delaware limited liability company, 3161 MICHELSON DRIVE LLC, a Delaware limited liability company, PARK PLACE PARKING COMPANY LLC, a Delaware limited liability company, PARK PLACE HOTEL COMPANY LLC, a Delaware limited liability company, PARK PLACE RESIDENTIAL HIGHRISE I LLC, a California limited liability company, and PARK PLACE DEVELOPMENT LLC, a Delaware limited liability company (the foregoing limited partnership and all of the foregoing limited liability companies shall be referred to herein collectively as "Developers") [hereinafter, City and Developers are sometimes collectively referred to as the "Party " or " Parties " ].
I. RECITALS This Agreement is entered into on the basis of the following facts, understandings, and intentions of the Parties: Developers represent that (1) they comprise the owners of the Project (as defined in section 1.12 below) and consist of those entities which are the legal owners of, or hold equitable interests in, the Property (as defined in section 1.13 below), and (2) Crow Development is one of the owners of the Project and the managing member of all of the other owners of the Project.
Since 1985, Developers have been in the process of developing a large commercial, retail, and residential project on a 90-acre site, commonly known as "Park Place." Located in the Irvine Business Complex (the "IBC"), the Park Place project (the "Project " as defined in section 1.12 below) is generally bounded by the 405 Freeway on the North, Jamboree Road to the West, Michelson Drive to the South, and the San Diego Creek to the East. 1 C. The Project basically consists of a master planned business park and residential development that includes existing and proposed restaurants, commercial/retail buildings, office towers, a hotel, a health club, a night club, and a day-care center and several hundred residential units to be located in high-rise towers.
D. Over the past 15 years, the City has granted certain land use approvals relating to the Project. Among these approvals was Resolution No. 87-14, dated January 27, 1987, approving Conditional Use Permit No. 86-CP-0727 (the "Original CUP") allowing conversion of the corporate headquarters entitlement for the Property to any use in the mixed-use district.
E. Under the City's Zoning Code which was in effect when the Original CUP was approved in 1987, applicants were required to pay all fees for IBC area-wide circulation improvements ( " IBC Fees") within ten (10) days of the effective date of the conditional use permit for the converted entitlement. In addition, under section V.E-736.5.C.2.e of that Zoning Code, all applicants who complied with this pre-payment obligation automatically obtained a permanent exemption from the normal time limit of three (3) years for CUPs to remain in effect before expiring under section V.E-804.6.B and C of the Zoning Code.
F. On February 5, 1987, in order to comply with the requirements of section V.E-736.5.C.2.e of the Zoning Code, Crow Development paid the City the sum of approximately $10 million in IBC Fees. That same year, Crow Development sought to modify the Original CUP by applying for CUP 87-CP-0829 (the "Master CUP").
G. On August 17, 1989, the City's Planning Commission approved the Master CUP. The Planning Commission specifically provided in its Resolution No. 89-1380 that the Master CUP qualified for the time limit exemption under the prior Zoning Code, and thus would have no expiration date.
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H. On December 13, 1989, the Subdivision Committee of the City adopted Resolution Nos. 89-414 and 89-415, approving Vesting Tentative Parcel Map 88-TP-0110 (the "Vesting Map").

I. Pursuant to sections 66474.2 and 66498.1 of the Government Code, and subject to the terms and conditions of the Vesting Map, Crow Development obtained a vested right to proceed with development in accordance with the Vesting Map and the Master CUP in substantial compliance with the ordinances, policies, standards, and other land use rules and regulations in effect when the City determined that the Vesting Map application was complete, which in no event was later than December 13, 1989.

J. On August 1, 1991, the City's Planning Commission adopted Resolution No. 91-1584, approving Conditional Use Permit 2873-CPS (the "Density Bonus CUP") to authorize the development of 360 residential "density bonus" units to be located on parcels 2, 4, and 15 of the Vesting Map (currently Parcel 1 of Parcel Map 2000-202 and a portion of Parcel l of Lot Line Adjustment 45280-LL), subject to certain conditions.

K. In addition to approving the Original CUP, the Master CUP, the Vesting Map, and the Density Bonus CUP, the City has issued or approved maps, plans, and permits described in Exhibit "C" attached hereto.

L. Without the necessity of listing all of the City's arguments and assertions in this regard, the Parties acknowledge that the City contends that Condition No. 37 of the Density Bonus CUP requires Developers to pay IBC Fees for each of the 360 residential units authorized under the Density Bonus CUP.

M. Without the necessity of listing all of the Developers' arguments and assertions in this regard, the Parties acknowledge that Developers dispute and deny that they are required to pay any IBC Fees for any of the 360 residential units authorized under the Density Bonus CUP in light of the $10 million in area-wide IBC Fees which Crow Development paid to the City in 1987. 3 N. In the interest of resolving the dispute regarding the application of IBC Fees for the 360 residential units authorized by the Density Bonus CUP, and to set forth the nature and extent of Developers' vested rights to proceed with the development of the Project, the City and Developers mutually desire to enter into this Development Agreement. O. Sections 65864 through 65869.5 of the Government Code (the "Development Agreement Legislation") authorize the City to enter into binding development agreements with persons having legal or equitable interests in real property in order to, among other things, (1) provide for the orderly development of that property in accordance with the City's rules, regulations, and policies, (2) ensure maximum efficient utilization of resources within the City, (3) strengthen the public planning process, (4) encourage private participation in comprehensive planning, and (5) reduce the economic costs and uncertainty of development. P. The City recognizes that completion of the Project as a master planned, mixed-use development provides substantial social and economic benefits to the City. These benefits include housing units in the IBC to aid in the City's jobs-to-housing balance with the associated reduction in traffic balance, and reduction in air quality impacts, an increase in sales tax revenue, and an increase in Transient Occupancy Tax revenue. Q. The City has determined that entering into this Agreement will further the goals and objectives of the City's land use planning policies by, among other things, (1) eliminating uncertainty in the planning for, and securing the orderly development of, the Project so that adequate long-term plans regarding the provision of necessary infrastructure can be developed and implemented; and (2) promoting the health, safety and welfare of the residents of the City. R. Pursuant to the authorization set forth in the Development Agreement Legislation, the City adopted Resolution No. 82-68 on July 13, 1982, establishing procedures and requirements for consideration of Development Agreements. In accordance with such rules and regulations, the City has undertaken the necessary proceedings, has found and determined that this Agreement is consistent with the City's General Plan and with the provisions of the Zoning Code which are applicable to the Project.

4 S. Specifically, on August 15, 2002, following a duly noticed public hearing and review of the environmental documents, the City's Planning Commission considered this Agreement and adopted Resolution No. 02-2359 recommending to the City Council of the City ("City Council") the approval and execution of this Agreement. On September 10 & 24 , 2002, following a duly noticed public hearing and consideration of the environmental documents in accordance with the requirements of the California Environmental Quality Act ("CEQA"), the CEQA Guidelines and applicable regulations, the City Council adopted Ordinance No.01-12 approving this Agreement, finding that the Agreement is consistent with the City's General Plan and authorizing the execution of this Agreement. The effective date of Ordinance No.02-12 is October 24, 2002. II. TERMS AND CONDITIONS NOW, THEREFORE, in light of the foregoing Recitals, and in consideration of the representations, assurances, covenants, and promises contained herein, the Parties agree to the following terms and conditions: 1. Definitions. The terms used in this Agreement shall have the following meanings: 1.1 "Additional Development Rules" shall refer to those certain conditions, terms, restrictions, requirements, rules, regulations, policies, or standards
described in section 4.2 below which shall govern the development of the Project in addition to the Applicable Land Use Regulations and the Existing Approvals. 1.2 "Applicable Land Use Regulations" shall mean the City's General Plan, Zoning Code, and all other ordinances, resolutions, codes, rules, regulations, standards, policies, programs, conditions, terms, restrictions, or requirements of the City governing the development and use of the Property and the Project which were in effect as of
5 January 1, 2002, all as more particularly described in Exhibit "D" attached hereto, except that section V.E-736.5 of the Zoning Code in effect at the City as of 1989, a copy of which section is attached as Exhibit "E" hereto (the "1989 Zoning Code Section"), shall also be considered part of the Applicable Land Use Regulations for the purpose of establishing the limits on intensity of the Project. To the extent that the provisions of the 1989 Zoning Code Section that establish the limits on intensity of development permitted for the Property conflict with the provisions of the City's Zoning Ordinance in effect as of January 1, 2002 (the "Existing Zoning Code"), the 1989 Zoning Code Section shall supersede and be controlling. Notwithstanding the foregoing, the City and Developers agree that, in connection with the is suance of building permits for the Project, the most current versions of the Uniform Construction Codes (as defined in section 1.16 below), which are in effect at the time such permits are applied for, shall be applied to the Project and shall be deemed (a) to be part of the Applicable Land Use Regulations and (b) to supersede any earlier versions of such Uniform Codes. 1.3 "Development" or "development" shall mean the improvement of the Property for the purposes of completing and effecting the structures, improvements, and facilities comprising the Project, including, without limitation, grading, the construction of infrastructure and public facilities related to the Project whether located within or outside the Property, the construction of structures and buildings, and the installation of landscaping and park facilities and improvements. Development also includes the maintenance, repair, reconstruction, or redevelopment of any building, structure, improvement, landscaping or facility after the construction and completion thereof. 1.4 "Effective Date" shall mean the effective date of the Ordinance adopted by the City Council of Irvine in approving this Agreement. 1.5 "Exactions" shall mean any requirements or conditions imposed by the City by means of any ordinance, resolution, rule, regulation, policy, or condition of approval for the (a) dedication of land or property, (b) the payment of any money by way of
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fees, taxes, assessments, or other charges, or (c) the improvement, construction, or acquisition of any on-site or off-site public infrastructure, facilities, or property in order to lessen, offset, mitigate, or compensate for the impacts of the Project on environmental or other public concerns or interests. 1.6 "Existing Approvals" shall mean all maps, permits, plans, modifications, agreements, amendments, adjustments, or other land use approvals or entitlements of any kind adopted or approved on or before the Effective Date relating to the development of all or any portion of the Property or the Project which, when taken together with the Applicable Land Use Regulations and the Additional Development Rules, shall set forth (a) the permitted uses of the Property, (b) the maximum height and size of buildings to be constructed on the Property, (c) the density and intensity of use of the Property, (d) the requirements for reservation or dedication of portions of the Property for public purposes, and (e) the timing of the development of the Project. The Existing Approvals shall include (a) all of the maps, permits, plans, modifications, adjustments, and other approvals listed in Exhibit "C" attached hereto and (b) all amendments and additions thereto which are approved prior to the Effective Date of this Agreement. For purposes of this Agreement, the Vesting Map, and all other Existing Approvals, shall be deemed to be extended and shall remain in effect for the term of this Agreement, unless otherwise amended or modified in accordance with the terms of this Agreement; however, the ordinances, policies, and standards which shall be applicable to the Vesting Map within the meaning of section 66498.1 of the Government Code shall be deemed to be the Applicable Land Use Regulations and the Additional Development Rules. 1.7 "IBC Fees" shall mean any and all Irvine Business Complex development fees for circulation improvements as more particularly described in City Council Resolution No. 93-35, adopted by the City on March 9, 1993. 1.8 "Master Site Plan" shall mean the master conceptual site plan for the Property attached as Exhibit "B" to this Agreement.
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1.9 "Mortgagee" shall mean the holder of any mortgage or the beneficiary of any deed of trust covering all or a portion of the Property which is still subject to the provisions of this Agreement and as to which this Agreement has not been terminated under section 12.3 or otherwise. 1.10 "Point System" shall mean the procedures and mechanisms for assigning and adjusting development (entitlement) points to establish limits on intensity of development within the IBC based on types of uses and amount of square footage proposed for such uses, all as more particularly specified in section V.E-736.5 of the 1989 Zoning Code, a copy of which section is attached as Exhibit "E" to this Agreement. The Point System, rather than the "trip budget" system provided for under the City's Existing Zoning Code, shall remain the applicable mechanism for determining the maximum limits on intensity of development permitted for the Project and the Property. 1.11 "Processing Fees " shall mean the usual and customary planning, engineering, and inspection fees and charges imposed by the City on a city-wide basis to cover the direct, indirect and administrative costs required to review, check, and inspect development applications submitted to the City for approval. As of the Effective Date, the Processing Fees are established in City Council Resolution No. 02-29, adopted on February 26, 2002. The Parties acknowledge that the City periodically adopts resolutions amending provisions relating to the Processing Fees, and it is further acknowledged that the Processing Fees as established or amended by the most recent City Council action on the subject shall apply herein. 1.12 "Project" shall mean the high-density, mixed-use office, commercial, and residential development and associated amenities, and on-site and off-site improvements to be constructed on the Property, which are contemplated by or embodied within the Existing Approvals, as the same may hereafter be further refined, enhanced or modified pursuant to the provisions of the Additional Development Rules and this Agreement. The conceptual design of the Project is depicted on the Master Site Plan attached as Exhibit
8 "B" hereto and the master plan components and design parameters of the Project are described in Exhibit "C" hereto. At present, the Project generally consists of (a) existing commercial/retail buildings, restaurants, and parking structures, and an office building under construction, and (b) additional proposed improvements, including five office towers, retail, restaurants, a hotel, a health club, a night club, a child-care facility, 360 density bonus residential units in high-rise towers, and related facilities and amenities. 1.13 " Property" shall mean that certain real property, on which the Project is to be developed, known originally as Parcel 2 of Final Parcel Map 85-142, consisting of approximately 90 acres of land, and that certain airspace parcel over and above a portion of Parcel l of Final Parcel Map 85-142, as more currently described in Exhibit "A" and depicted on Exhibit "B" hereto. 1.14 "Required Fees" shall mean any requirement of the City for the payment of fees in order to lessen, offset, mitigate or compensate for the impacts of the Project on the environment or other public interests, as set forth in section 4.2.5 below. The Required Fees do not include any Processing Fees as defined in section 1.11 above, nor do they include any Taxes and Assessments as defined in section 1.15 below. For a period of fifteen (15) years from the Effective Date of this Agreement, the City shall not impose any new or additional Required Fees that the City had not approved prior to January 1, 2002, with respect to the Project or the Property, nor shall it increase any of the Required Fees above their current levels to the extent that such increases would otherwise apply to the Project or the Prop erty, provided, however, that the preceding limitation on the City's imposition of or increase to Required Fees to the Project or the Property shall not apply to additional or increased Required Fees that are imposed by the City on a City-wide basis. Any such Required Fees imposed by the City on a City-wide basis shall be adopted pursuant to resolutions or ordinances of the City. Developers shall be deemed to have paid all IBC Fees _ applicable to the Project or the Property, except for those IBC Fees to be paid pursuant to
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section 5 Public Benefits below, which IBC Fees shall not be increased or decreased during the term of this Agreement. 1.15 "Taxes and Assessments" shall mean and include any general taxes imposed for general governmental purposes, any special taxes imposed for specific purposes, any levy or charge upon real property for a special benefit conferred upon the real property (including any special assessment, benefit assessment, maintenance assessment, or special assessment tax), and any assessments on businesses to fund property-related improvements or activities. For a period of fifteen (15) years from the Effective Date of this Agreement, the City shall not levy or impose any new or additional Taxes and Assessments that the City had not approved prior to January 1, 2002, with respect to any portion or business component of the Project or the Property, nor shall it increase any of the Taxes or Assessme nts above their current levels to the extent that such increases would otherwise apply to the Project or the Property, provided, however, that the preceding limitation on the City's imposition of Taxes and Assessments to the Project or the Property shall not apply to additional or increased Taxes and Assessments that are levied or imposed by the City on a City-wide basis. Any such Taxes and Assessments levied or imposed by the City on a City-wide basis shall be adopted pursuant to resolutions or ordinances of the City. 1.16 "Uniform Construction Codes" shall mean the 1998 California Building Codes (Vols. 1, 2, and 3), the 1998 California Electric Code, the 1998 California Plumbing Code, the 1998 California Mechanical Code, the 1997 Uniform Solar Energy Code, the 1997 Uniform Swimming Pool, Spa and Hot Tub Code, the 1997 Uniform Housing Code, the Uniform Administrative Code, 1997 Edition, and the 1998 California Fire Code (including amendments thereto by the Orange County Fire Authority), as modified and amended by official action of the City, and any modifications or amendments to any such Code adopted in the future by the City, for general application throughout the City.
10 1.17 Additional Defined Terms. To the extent that any capitalized terms contained in this Agreement are not defined above, such terms shall have the meaning otherwise ascribed to them in this Agreement. 2. Term. This Agreement shall commence on the Effective Date and shall terminate on the twenty (20) year anniversary date of the Effective Date, unless sooner terminated or extended as hereinafter provided. 3. Vested Right to Develop the Property and to Complete the Project. Subject to the terms and conditions of this Agreement, Developers shall have a vested right to proceed with the development of the Property, and to carry out and complete the entire Project, in substantial compliance with the Applicable Land Use Regulations, the Existing Approvals, and the Additional Development Rules which, when taken together as a whole, shall govern the overall design, development, and construction of the Project and all on-site and off-site improvements and appurtenances in connection therewith. 4. Specific Criteria Applicable to Development of the Project. 4.1 Applicable Rules, Regulations, and Approvals. The Applicable Land Use Regulations, the Existing Approvals, and the Additional Development Rules shall govern the development of the Project and the granting or withholding of all subsequent permits or approvals required hereunder to complete the Project; provided, however, that (a) Developers shall be subject to all changes in any Processing Fees applicable to the Project or the Property, provided that such Processing Fees are of general application throughout the City, are not imposed solely with respect to the Project or the Property, and do not constit ute an unauthorized Exaction, (b) Developers shall abide by the Uniform Construction Codes current at the time of application for such subsequent permits or approvals, and (c) the City may, in subsequent actions applicable to the Project or the Property and consistent with the provisions of section 65866 of the Government Code, apply new rules, regulations, and policies which are not inconsistent or in conflict with the Applicable Land Use Regulations, the Existing Approvals, the Additional Development Rules, or the intent or purpose or any of the terms, standards, or conditions of this Agreement, and which do not materially interfere with the development of the Property and the Project for the uses and to the height, density, intensity and timing as provided for in this Agreement.


11 4.2 Specification of Additional Development Rules. Pursuant to section 65865.2 of the Government Code, and in order to supplement and clarify the rules, regulations, policies, and standards embodied in the Applicable Land Use Regulations and the Existing Approvals, the Parties wish to specify a number of additional conditions, terms, restrictions, and requirements to govern subsequent ministerial and discretionary actions relating to the development of the Project (collectively referred to herein as the "Additional Development Rules"). For purposes of this Agreement, the Additional Development Rules shall consist of the following: 4.2.1 Permitted Uses, Densities, Heights, Etc. Except as otherwise provided under the terms and conditions of this Agreement, the rules, regulations and requirements with respect to permitted uses of the Property, the density and intensity of use, the maximum height and size of proposed buildings, the provisions for reservation or dedication of land for public purposes, and the design, improvement and construction standards and specifications applicable to the development of the Project shall be those contained in the Applicable Land Use Regulations, the Existing Approvals, and the Additional Development Rules. 4.2.2 Timing of Development. The Parties acknowledge that Developers cannot at this time predict the time, the rate, or the order in which the various phases or components of the Project will be developed. Such decisions depend upon numerous factors which are not within the control of Developers, such as market orientation and demand, interest rates, absorption, competition, and similar factors. Subject to the terms and conditions of this Agreement, Developers shall have the ...