HomeMy WebLinkAboutPRE 2025-0014; ROOSEVELT 17 - SB 330; Preliminary Review (PRE)C cityof
Carlsbad
Preliminary Housing Development
{SB-330) Pre-Application
Community Development Dept.
Planning Division
1635 Faraday Avenue
{442) 339-2600
www.carlsbadca.gov
Refer to IB-132 for information P-32 MARO 6 2025
[Ifil SUBMITTAL INFORMATION
All forms must be completed, signed, and submitted as a PDF attachment to your submittal. Please refer to info-
bulletin 1B-132 for additional information.
APPLICATION & PAYMENT
Application & Materials
Provide an electronic copy of your application and required documents on a flash drive or a CD. All items,
including additional pages, supporting documents, studies, plans, and reports, must be saved as
individual PDFs and labeled accordingly.
ri Fees
Payment of fees is required for all pre-applications. Payment via check, electronic check, or credit card
is required before project review or processing. Once the application is submitted, city staff will follow
up electronically with an invoice for the total fee amount. Fees may be paid on line, in-person or
dropped off at 1635 Faraday Avenue for processing.
PHOTOGRAPHS
0 Aerial Site Photograph
Provide aerial photographs showing existing site conditions of environmental site features that would be
subject to regulations by a public agency, including creeks and wetlands.
LEGAL DESCRIPTION
Q Legal Description
ri
Include a legal description of the specific location. The best place to find a legal description is usually the
most recent deed to the property.
PLANS
Condensed Site Plan
Provide a site plan showing the location on the property. Show the location of any recorded public
easement, such as easements for storm drains, water lines, and other public rights of way. Indicate
location of any stream or other resource that may be subject to a stream bed alteration agreement
pursuant to Chapter 6 (commencing with Section 1600} of Division 2 of the Fish and Game Code . Please
attach a separate site plan and elevations on a digital sheet size of minimum 8 ½ -inches by 11-inches
and maximum 11-inches by 17-i nches.
Condensed Elevations
Provide elevations showing design, color, and material, the building height and massing, and
approximate square footage of each building.
P-32_Preliminary Housing Development Pre-Application (11/2021) Page 1 of 5
0 PRELIMINAR,!PPLICATION FORM •
APPLICATION TYPE (CHOOSE ONE)
~ Preliminary Housing Development (SB-330) D Affordable Housing Streamlined Approval (SB-35)
PROPERTY INFORMATION
Property Address: 2777 and 2785 Roosevelt St, Carlsbad, CA, 92008
Assessor Parcel Numbers (APN): 203-181-08-00, 203-181-09-00
Project Data # Existing # to be Demolished If so, # Occupied
Residential Units -Number: 0 ... ··-·····-· ··-... -•--·-•-·····-·
Residential Units -Floor Area (Sq . Ft.): 0
Nonresidential -Floor Area (Sq. Ft.): 3,930 3,930
Existing Uses/Site conditions (Describe in detail existing uses/physical conditions on the site.)
A 2 430 s uare feet restaurant and an a proximately 1,500 square feet vacant office building.
PROPOSED PROJECT INFORMATION
Please attach additional pages/supporting documentation that help completely answer the questions listed below.
Proposed Project (Describe in detail scope of the proposed project and major physical alterations to the property)
A proposed Major Site Development Plan will outline the construction of a 35,127 SF, five-storybuilding at 2777 and 2785 Roosevelt St
This development will feature 17 residential condominium units, ranging from two to four bedrooms, along with 850 square feet of street front retail space.
The property, situated on 0.43 acres, will have street access via a drive aisle leading to a ground-level parking garage with 33 sp~~-
Subdivision (any approvals under the Subdivision Map Action being requested and if so, describe) □ YES IV NO
Housing Units Market-Rate lnclusionary Density Bonus1 Below Market2 Project Total
Total number: 14 2 1
Unit size (sf min): 1,125 1,125 1,125
Unit size (sf max): 3,960 1,379 3,960
Affordability level: N/A Very Low Income Market Rate N/A
TOTAL SQ. FT. 31 ,498 2,504 1,125 35,127
1lf Density Bonus being utilized, include completed form P-l{H). Please refer to IB-112 for additional information on requested
incentives, concessions, waivers, or parking reductions; 2Affordbale units in excess of inclusionary standards.
Non-Residential (does the project include non-residential uses and if so, provide use categories
under the city's zoning, floor area and square footage of all structures)
850 square feet of commercial space to be used in accordance with the Village and Barrio Master Plan.
Standard Parking Residential Non-Residential TOTAL
g YES □ NO
33 I Any parking reductions
--------~------~-----~ requested pursuant to Section Stall Count
Electric Vehicle Parking Residential Non-Residential TOTAL 65915[Pl need to be included in ---------------------~--------,r---------,J Form P-l(H). See Gov. Code§
Stall Count _______ __. ______ __. _ ___,l~!~hle 65941.l(a)(ll)
Stalls
P-32_Preliminary Housing Development Pre-Application (11/2021) Page 2 of 5
f) SPECIFIC SIT ~ATURES •
Indicate if any portion of the property includes any of the following environmental, historic, or cultural resources. Submittal
must include supporting documentation, reports and/or analysis.
SITE CONSTRAINTS
Does the site contain any of the following (provide documentation for "yes" responses): YES NO N/A
1. A very high fire hazard severity zone, as determined by the Department of Forestry and □ r/ □ Fire Protection pursuant to Gov. Code Section 51178?
2. Wetlands, as defined in the US Fish and Wildlife Service Manual, Part 660 FW 2? □ v' □
A hazardous waste site that is listed pursuant to Section 65962.5 or a hazardous waste
3. site designated by the Department of Toxic Substances Control pursuant to Section □ 9' □
25356 of the Health and Safety Code?
A special flood hazard area subject to inundation by the 1 percent annual chance flood
4. (100-year flood) as determined by the Federal Emergency Management Agency in any □ ¢ □
official maps published by the Federal Emergency Management Agency?
A delineated earthquake fault zone as determined by the State Geologist in any official
maps published by the State Geologist, unless the development complies with applicable
5. seismic protection building code standards adopted by the CA Building Standards □ 9' □ Commission under the CA Building Standards law (Part 2.5 (commencing with Section
18901) of Division 13 of the Health and Safety Code), and by any local building
department under Chapter 12.2 (Section 8875) of Div. 1 of Title 2?
A stream or other resource that may be subject to a stream bed alteration agreement
6. pursuant to Chapter 6 (Section 1600) of Division 2 of the Fish and Game Code (Attach a □ ~ □
biological technical report prepared by a qualified biologist?
7. Any proposed point sources of air or water pollutants? □ v' □
8. Any species of special concern known to occur on the property? □ 9' □
Any historic or cultural resources known to exist on the property (Attach a cultural and
9. historic resources report prepared by a qualified professional (historian and/or □ ~ □
archaeologist)
COASTAL ZONE
If located within the coastal zone, indicate if the site contains any of the following: YES NO N/A
Wetlands, as defined in subdivision (bl of Section 13577 of Title 14 of the California Code
1. of Regulations. A Wetlands Delineation Report my be required following the filing of the □ 9' □ application requesting approval of a discretionary action in the Coastal Zone if the site
contains a defined wetland.
2. Environmentally sensitive habitat areas, as defined in Section 30240 of the Public □ 9' □ Resources Code
3. A tsunami run-up zone □ QI □
4. Use of the site for public access to or along the coast □ tyl □
P-32_Preliminary Housing Development Pre-Application (11/2021) Page 3 of 5
• PROPERTY of NER/APPLICANT AFFll,VIT
Under penalty of perjury the following declarations are made:
1. I hereby certify, that all statements contained in this pre-application and any accompanying documents are true and
correct, with full knowledge that all statements made in this pre-application are subject to investigation and that any
false or dishonest answer to any question may be grounds for denial or subsequent revocation of the deemed complete
status.
2. I understand this pre-application is not a development application that authorizes an entitlement and is strictly for the
purposes of Senate Bill 330, the Housing Crisis Act of 2019; or Senate Bill 35, the Affordable Housing Streamlined
Approval Process of 2017.
3. I understand and agree that any report, study, map or other information submitted to the city in furtherance of this pre-
application will be treated by the city as public records which may be reviewed by any person and if requested, that a copy
will be provided by the city.
4. I understand that if this pre-application cannot be submitted and deemed complete by staff at the submittal appointment,
t here is no refund of fees paid.
5. I understand and agree to defend, indemnify, and hold harmless, the City of Carlsbad, its officers, agents, employees,
and volunteers (collectively "city"), from any and all legal actions, cla ims, or proceedings (including administrative or
alternative dispute resolution and Public Records Act requests (collectively "actions"), arising out of any city process or
approval prompted by this Action, either in whole or in part. Such actions include but are not limited to: actions to attack,
set aside, void, or otherwise modify, an entitlement approval, environmental review, or subsequent permit decision;
actions for personal or property damage; actions based on an allegation of an unlawful pattern and practice; inverse
condemnation actions; and civil rights or an action based on the protected status of the petitioner or claimant under state
or federal law (e.g. ADA or Unruh Act). I understand and agree to reimburse the city for any and all costs incurred in
defense of such actions. Thi s includes, but it not limited to, the payment of all costs (including litigation costs,
administrative record preparation, public records act responses) and attorneys' fees, all judgments or awards, damages,
and settlement costs. The indemnity language in this paragraph is intended to be interpreted to the broadest extent
permitted by law and shall be in addition to anyother indemnification language agreed to by the applicant.
6. If the applicant is not the Property Owner, both the Property Owner and Applicant must sign this affidavit. By signing
this affidavit, the Property Owner authorizes the Applicant listed in this application to act as the Property Owner's
agent on all matters in connection with this application.
The city requires original signatures below -the signatures do not need to be notarized.
PROPERTY OWNER
Name: Carlsbad Village 80 LLC Email : eruhe@hfc-ca.com
Address: 1903 Wright Place, Carlsbad, CA, 92008 Phone: 760-918-8200
. f5t{11 N. 'Ruhe S1gnatu re: Erin N. Ruhe (Feb 28, 202512:13 PST) Date: Feb 28, 2025
APPLICANT D same as above
Name: McKellar McGowan LLC Email : chris@mckellarmcgowan.com
Address: 5120 Shoreham Pl. #280 Phone: 858-252-2181
Date: Feb 27, 2025
City Staff Only Project No.: • PR f fol--S _ 00/'f n .. velopment No.: D [; V 'fo ?-f-D / }o
App. Vesting Date: 3 /, / '>B 15
Staff Name: ;J'°ciifyµ <'. StaffSignature: Jdf==>--~ Date:J/t/tO ')-5
P-32_Preli minary Housing Development Pre-Application (11/2021) Page 4 of 5
• DISCLOSUREfocuMENTS •
Before the application can be accepted, the owner of each property involved must provide asignature to verify
the pre-application is being filed with their consent. Staff will confirm ownership based on the records of
the city or county assessor. In the case of partnerships, corporations, LLCs or trusts the agent for service of
process or an officer of the ownership entity so authorized may sign as stipulated below.
■ Ownership Disclosure. Include current signature authorization for the person or persons signing the
application. For a corporation, a chairman, president or vice-president AND a secretary, assistant
secretary, CFO or assistant treasurer must sign. Otherwise, the corporation must attach a resolution
certified by the secretary or assistant secretary under corporate seal empowering the officer(s)
signing to bind the corporation. For an LLC, attach an official paper listing the individual as a Member
of the LLC with sole authority to bind the organization. For a partnership, attach an official document
identifying the individual as a general partner with sole authority to execute documents on behalf
of the limited partnership. A letter of authorization, as described below, may be submitted provided
the signatory of the letter is included in the Ownership Disclosure. Include a copy of the current
partnershipagreement, corporate articles, or trust document as applicable.
■ Letter of Authorization (LOA). A LOA from a property owner granting someone else permission to
sign the pre-application form may be provided if the property is owned by a partnership,
corporation, LLC or trust or in rare circumstances when an individual property owner is unable to
sign the pre-application form. To be considered for acceptance, the LOA must indicate the name of
the person being authorized to file, their relationship to the owner or project, the site address, a
general description of the type of application being filed and must also include the language in items
a-c below. In the case of partnerships, corporations, LLCs or trusts the LOA must be signed by the
authorized signatory as shown on the Ownership Disclosure or, in the case of private ownership, by
the property owner. Proof of Ownership for the signatory of the LOA must be submitted with said
letter.
■ Grant Deed. Provide a copy of the Grant Deed if the ownership of the property does not match city or
county assessorrecords. The Deed must correspond exactly with the ownership listed on the
application.
■ Multiple Owners. If the property is owned by more than one individual (e.g. John and Jane Doe or
Mary Smith andMark Jones) signatures are required of all owners.
a. I hereby certify that I am the owner of record of the herein previously described property
located in the City of Carlsbad which is involved in this pre-application or have been empowered
to sign as the owneron behalf of a partnership, corporation, LLC or trust as evidenced by the
documents attached hereto.
b. I hereby consent to the filing of this pre-application on my property for processing by the City
of Carlsbad Planning Division for the sole purpose of vesting the proposed housing project
subject to the zoning ordinances, policies, and standards adopted and in effect on the date
that this pre-application is deemed complete. Further, I understand that this pre-application will
be terminated and vesting will be forfeited if the housing development project is revised such
that the number of residential units or squarefootage of construction increases or decreases by
20 percent or more, exclusive of any increase resulting fromthe receipt of a density bonus,
incentive, concession, waiver, or similar provision, and/or an application requesting approval
of an entitlement is not filed with the City of Carlsbad Planning Division within 180 days ofthe
date that this pre-application is deemed complete.
P-32_Preliminary Housing Development Pre-Application (11/2021) Page 5 of 5
Secretary of State LLC-5 201834810074
Application to Register a Foreign Limited
Liability Company (LLC)
IMPORTANT-Read Instructions before completing this form.
Must be submitted with a current Certificate of Good Standing issued by the
government agency where the LLC was formed. See Instructions.
Filing Fee -$70.00
Copy Fees -First page $1.00; each attachment page $0.50;
Certification Fee -$5.00
FILED
~ecretary of State
State of California
DEC 1 0 2018 ffi\J
Note: Registered LLCs in California may have to pay minimum $800 tax to the
California Franchise Tax Board each year. For more Information, go to
https://1NWw.ftb.ca.gov. This Space For Office Use Only
1 a. LLC Name (Enter the exact name of the LLC as listed en your attached Certificate of Good Standing.)
I CARLSBAD VILLAGE 80, LLC
1 b. California Alternate Name, If Required (See Instructions -Only enter an alternate name ff the LLC name in 1a not available in California.}
2. LLC History (See Instructions -Ensure that the formation date and jurisdiction match the attached Certificate of Good Standing.)
a. Date LLC was formed in home jurisdiction (MM/DD/YYYY) b. Jurisdiction (State, foreign country or place where this LLC is formed.)
11 / 30 / 2018 DELAWARE
c. Authority Statement (Do not alter Authority Statement)
This LLC currently has powers and privileges to conduct business in the state, foreign country or place entered in Item 2b.
3. Business Addresses (Enter the complete business addresses. Items 3a and 3b cannot be a P.O. Box or "in care of' an individual or entity.)
a. Street Address of Principal Executive Office• Do not enter a P.O. Box City (no abbreviations)
1903 WRIGHT PLACE, SUITE 220 CARLSBAD
b. Street Address of Principal Office in California, if any -Do not enter a P.O. Box City (no abbreviations)
1903 WRIGHT PLACE, SUITE 220 CARLSBAD
c. Malling Address of Principal Executive Office, If different than Item 3a City (no abbreviations)
4. Service of Process (Must provide either Individual OR Corporation.)
INDIVIDUAL -Complete Items 4a and 4b only. Must include agent's full name and California street address.
a, California Agent's First Name (If agent is not a corporation) Middle Name
ERIN N.
b. Street Address (if agent is not a corporation) • Do not enter a P.O. Box City (no abbreviations)
1903 WRIGHT PLACE, SUITE 220 CARLSBAD
CORPORATION -Complete Item 4c only. Only include the name of the registered agent Corporation.
c. California Reglstered Corporate Agent's Name (if agen\ Is a corpora\ion} -De no\ comple\e Item 4a or 4b
5. Read and Sign Below (See Instructions. Title not required.)
I am authorized to sign on behalf of the foreign LLC,
Trang Phu
I Last Name
RUHE
Signa:;;ft~ Type or Print Name
LLC•5 (REV 0112017)
State Zip Code
CA 92008
State Zip Code
CA 92008
State Zip Code
I Suffix
I Slate I Zip Code
CA 92008
2017 California Secretary of State
www.sos.ca.gov/business/be
Delaware Page 1
The First State
I, JEFFREY W. BULLOCK, SECRETARY OF STATE OF THE STATE OF
DELAWARE, DO HEREBY CERTIFY "CARLSBAD VILLAGE 80, LLC" IS DULY
FORMED UNDER THE LAWS OF THE STATE OF DELAWARE AND IS IN GOOD
STANDING AND HAS A LEGAL EXISTENCE SO FAR AS THE RECORDS OF THIS
OFFICE SHOW, AS OF THE TENTH DAY OF DECEMBER, A;D, 2018.
AND I DO HEREBY FCJRTHER CERTIFY THAT THE ANNUAL TAXES HA VE BEEN
ASSESSED TO DATE.
7172662 8300
SR# 20188065867
You may verify this certificate on line at corp.delaware.gov/authver.shtml
Authentication: ·204064519
Date: 12-10-18
201834810074
Secretary of State LLC-5
Application to Register a Foreign Limited
Liability Company (LLC) .
201834810069
IMPORTANT-Read Instructions before completing this form.
Must be submitted with a current Certificate of Good Standing issued by the
government agency where the LLC was formed. See Instructions.
Filing Fee -$70.00
Copy Fees -First page $1.00; each attachment page $0.50;
Certification Fee -$5.00
lCL
FILED
Secretary of state
State of California
OEC 1 0 2018 c,5\)
Note: Registered LLCs in California may have to pay minimum $800 tax to the
California Franchise Tax Board each year. For more information, go to
https://www.ftb.ca.gov. This Space For Office Use Only
1 a. LLC Name (Enter the exact name of the LLC as listed on your altached Certificate of Good Standing.)
I._H_F_c_v_s_o_, L_L_c ____ ~ ______________________ ___JI
1 b. California Alternate Name, If Required (See Instructions -Only enter an alternate name if the LLC name In 1a not available in California.)
2. LLC History (See Instructions -Ensure that the formation date and jurisdiction match the attached Certificate of Good Standing.)
a. Date LLC was formed In home jurisdiction (MM/DD/YYYY) b. Jurisdiction (Slate, foreign country or place where this LLC is formed.)
11 / 30 / 2018 DELAWARE
c. Authority Statement (Do not alter Authority Statement)
This LLC currently has powers and privileges to conduct business in the state, foreign country or place entered in Item 2b.
3. Business Addresses (Enter the complete business addresses. Items 3a and 3b cannot be a P.O. Box or "in care of' an Individual or entity.)
a. Street Address of Principal Executive Office, Do not enter a P.O. Box City (no abbreviations)
1903 WRIGHT PLACE, SUITE 220 CARLSBAD
b. Street Address of Principal Office in Californla, If any -Do not ontor a P.O. Box City (no abbreviations)
1903 WRIGHT PLACE, SUITE 220 CARLSBAD
c. Mailing Address of Princlpal Executive Office, If different tha11 Item 3a City (no abbreviations)
4. Service of Process (Must provide either Individual OR Corporation.)
INDIVIDUAL -Complete Items 4a and 4b only. Musi Include agent's full nam(/ and California street address.
a. California Agent's First Name (if agent Is not a corporation) Middle Name
ERIN N.
b. Street Address (if agent is not a corporation) -Do not enter a P.O. Box City (no abbreviations)
1903 WRIGHT PLACE, SUITE 220 CARLSBAD
CORPORATION -Complete Item 4c only. Only include the name of the registered agent Corporation.
c. California Registered Corporate Agent's Name (If agent is a corporation) -Do not complete Item 4a or 4b
5. Read and Sign Below (See Instructions. Title not required.)
I am authorized to sign on behalf of the foreign LLC.
Trang Phu
I ~~t~~me
Sign':fa °1Yfr Type or Print Name
LLC-5 (REV 01/2017)
State Zip Code
CA 92008
Slate Zip Code
CA 92008
State Zip Code
I Suffix
I State I ;i;~;; CA
2017 California Secretary of State
www.sos.ca.gov/buslnesslbe
I '
Delaware Page 1
The First State
I, .JEFF.REY W. BULLOCK, SECRETARY OF STATE OF XHE STATE OF
)
DELAWARE, DO HEREBY CERTIFY "HF CVBO, LLC" IS DULY FORMED UNDER 'I'HE
LAWS OF THE S'I'AT.E OF DELAWARE AND IS IN GOOD STANDING AND HAS A
LEGAL EXISTENCE SO F.AR AS 'I'HE RECORDS OF 'I'HIS OFFICE SHOW, AS OF
THE TENTH DAY OF DECEMBER, A.D. 2018.
AND I DO HEREBY FCJRTHER CERTIFY THAT 'I'HE ANNUAL TAXES HA VE BEEN
ASSESSED TO DAT.E.
7172686 8300
SR# 20188065870
You may verify this certificate online at corp.delaware.gov/authver.shtml
Authentication: 204064520
Date: 12-10-18
201834810069
OPERATING AGREEMENT
OF
CARLSBAD VILLAGE 80, LLC
a Delaware limited liability company
DATED AS OF DECEMBER 4, 2018
THE SECURITIES REPRESENTED BY THIS AGREEMENT HA VE NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933 NOR _REGISTERED OR
QUALIFIED UNDER ANY STATE SECURITIES LAWS. SUCH SECURITIES MAY NOT
BE OFFERED FOR SALp; SOLD, DELIVERED AFTER SALE, TRANSFERRED,
PLEDGED, OR HYPOTHECATED UNLESS QUALIFIED AND REGISTERED UNDER
APPLICABLE STATE AND FEDERAL SECURITIES LAWS OR. UNLESS, IN THE
OPINION OF COUNSEL SA TISF ACTOR Y TO THE COMPANY, SUCH QUALIFICATION
AND REGISTRATION IS NOT .REQUIRED. ANY TRANSFER OF THE SECURITIES
REPRESENTED BY THIS AGREEMENT IS FURTHER SUBJECT TO OTHER
RESTRICTIONS, TERMS AND CONDITIONS WHICH ARE SET FORTH HEREIN.
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE
REGULATORY AUTHORITY HAS PASSED UPON THE ACCURACY OR ADEQUACY
OF THIS OPERA TING AGREEMENT OR THE MEMBERSHIP INTERESTS. ANY
REPRESENTATION TO THE CONTRARY IS UNLAWFUL •
SMRH:488409815,8
TABLE OF CONTENTS
Page
ARTICLE 1 FORMATION OF LIMITED LIABILITY COMPANY; ORGANIZATIONAL
MA TTERS ............ ; .............. · .... :., .. _. .. _.; ... , ............. ·.;o,,.;;,;; •. • .. ;c •• ::·H . .-; ..... ,;: ....... ·01• ... •., ...• : ......... ,,,.-... , ... ,:.,•.,:1
l.1 Formation ..... ,.-... , ........................... .-.................................. , .............................. , ......... ::, .................. ,,. ......... , .. 1
• 1·.2 Name , .. ,,.,,,.,., ..... .., .... , .......... , ............. , .. ,., ......... , ........ ,. ............... ,.,, ............. , .. '. .. , ....... ," ....... '.'···, ................ , ... .1
I .3 Place of Business.; .. ;,,, .... i.; ••. • .. .-.· .. .-•• ;.; ..•• ;, •• • ••.••••••• ..-...... ;.: .• ,·a .. , ..... -..-.. ,;;-, ... ·, •. , .... ,.,. .................. :, ........... 2
f .4 Term,,,., .. ·.,·.,:•:-,•••·,···· .. ••.•··•·•,:••·····•••:•• .. ······••···•··•·•··•··••.•••.•,,••• . ., .• ,,, ........... , .. ,.., .. , .. ,. ••• ,, ....• , •.• "··•.·•·""···•····•····•··•······.,·"··•··:2
1 _.5 Covenants Regarding Organization .. '. ......................... .-..... ;.: ... .-.; ....... ;; .. ,;·;•;-., ..................... ; . .-.. 2
1.6 Formation; Filings, Application of Delaware Act, ... , ..... , ............. , ........ , ....... ,,.,.,., . .,,., .. , ..... 2
ARTICLE 2 DEFINITIONS ,,:••·:t: ._.,..._. .. ,.. .,. .••.•..• ,.. '..'·"• 1 ••••••••• , ••:• •••• :.••:· •/···-:·_··;._; ••• ·.::::: •• :,.: •• '.:.••·, •••• ,· •. :;;:.-t··,.•; .. ,.,,.._,o .. , •.. ,;. 2
ARTICLE 3 BUSINESS PURPOSE·.;,, .• : .. ;;, ..... ·.,, ......... , ......... ,·., ....................... .-.... ,, .... -.. , .. ,; ... , ... , ............. , .................... 9
3 .1 Purpose .. , ... ,, ... ,,.,., ... , .,, ... , ..... , .. ,•.• , .. , ... ,.,, ... ,.,.,,.,.,·/····• .... •.••.,.• , .......... , .. _. ···•···•·· .......... , .. ,, ....... , ........... , ... , ............... , ... ,, .. 9
3 ,2 Waiver of.Right of Partition ............................................ · ............ · .. ;,.,., ...... ·, ... , ..... ;., .................... 10
3.3 Outside Activities and Investments of Members and the Manager., ... , .............. o,, ..... 10
3.4 Outside Employment of Members and the Manager .. -,;.; ..... .-., ... ,, .. ,,; .. :•; ............. ;, ........ 10
ARTICLE 4 CAPITAL AND CONTRIBUTIONS; RIGHTS AND OBLIGATIONS OF
MEMBERS.;;'.,. .. ; ... , ... , .. ; .. ,; .... ., ........ :•.; ......... ; ... •.· •. .-... :, ... , .. ;· ............... ,..;;· . .-...... , ...... , ...... .-.: .. ;·.;c .• .c.-.•. ;;, ...... , .• 11
4.1 Initial Capital Contributions ................................................... ,..,., ...... , .... , ........... _.,._.,:•.•···•"'··•"•-"".11
4.2 Maintenance of Capital Accounts ...... ;_ ........................ ; ......... , ...... ; .. , .. ,,,,.; ........... ; ... ,.,, . .,•; .......... 11
4.3 Additional Capital Contributions ...................... , .•..•.. , .... ,., ...................... , ......... , ................... 11
4.4 No Interest on Co!ltributions ............ , .. , .. , ........... , .......... , ..... _. .. ,, ..... '." .. ,., ...... , ... '. ...... ,:_.-........ _,., ... _. ... ; ... 13
4.5 No Right to ·Withdraw ..... • ... -.................. .,,,.; .... ~ ................ :;, .. •.· ..... .-."·······"·'" .. "·······•··•············' ... , •• -13
4.6 Compensation of Members ... ,. ........... , ... , .......... ,.,,.,,,.,.,,.,,,,,.,: ... , .. , .. •.•.•.,,., ....... ,,,.,.,, .......... , ... '°,_.·•·r.,,.,, .. , ..... 13
ARTICLE 5 DISTRIBUTIONS ., ................................... , ... :-.. ,,.,; .................. ; .. " .. ···; . .-...... : ............... ,;.: .. , ... ,., .•. , .. ,14 .. . :~ -. . • .. -
5. 1 Distributable Cash ............ , ....... , .......... , ......... ·.•; .......... ,; ... ,·.· ................. , .......... ,,, ............. _, .......... ,.:.,., .... , ........... , ,.14
5 .2 Tax Distributions •ht, ....... , .......... , •••. ,, ................ _ ........... .-., ......... :,":• .. :•':"''.-'•····••,'''.:·:-.. ···•·• ...... ,,. .... ,~ ... 14
5.3 Distributions to Holders ofRecord ................. · ........ -............................................................ -14
5 .4 Form of Distribution ....... •.••••., ... , .. , ..... ,, ..... , .. ,., .. ,., ... ,.,,., ... , ..... , .......... , ... '. .. ,.,.,., .. , ..... ,., ..................... , ...... .15
5 .5 Withholding on Distributions .... ; ............ ;:;;,;-: .•... · .. ;,;.o.;.-••.••. ; .• • ....... • •• •,;;·,; .. :.: .. • ............... , ••.••.•••• ,.15
5 .6 Return of Distributions ....... ._. ... :, .......... , ... , .. ,. .... , .. ; .. ,; ........... ,.,, ...... , .. , ................ ,. .... : .. ,,..,,,.,., ..... , ... _. ... ,,., .. ,., .. 15
5. 7 Restriction on Distributions ........... ,, ... !••.•; • .-.. ,,,; ... t .. ,.,; ••.•..•. : . .-..... ·,:-··•••.• ..... ; .. ; ... , .... ,. ......... ,.:• ....... ;-.15
ARTICLE 6 ALLOCATIONS OF NET PROFITS AND NET LOSSES; TAX ELECTIONS .... 15
6.1 Allocation of Net Profits and Net Losses ............ ,, ... , .. ,1., ................ , ... , ............................. 15
6 .2 Transfers .................................................................... ,-.. : .. s ... , .... ,.-••• .c, ............... , •••••••••. : ...... ;·.;· ......... 15
6.3 Tax Classification of the Company , .... "' ........ :., .... ,.,.:•••···,·•·•·• .... •·· .. · ...... 11,_ ••••••• , ... , ••• ,,.,., .. , ..... _..18
6.4 Elections by the Company ....................................................................... ;; .... .-. .-.....•••.. .,,-.. , ........ JS
6.5 Election by' Members ........................................................................ : ......................... , ... ,.,: .. ,., ............ 18
SMRH:488409815.8
ARTICLE 7 MANAGEMENT ..•. -.,.,.,,.,.·:-....•.•... · ...................... ·, ... ,., ... i ..... ,..,,, ............. ;;·.,· •. • ................. -..• ,., ............ 18
7 .1 The Manager.,., ... , .. , ......... ,.,,.,., ....... ,., ......... ,., ... ,,,, ... ,. .. '.."" ............... ,._, .... , .... , ...... , ........... , .... , . ., .. , .... , ........ 18
7 .2 Management Powers, ... , ............ : •.... , .................... ;, ............ , ........ ;' ..... ., ..................... ,.··"·· ... , ............. 18
7.3 Major Decisions ................. , .......... _ .............. , .................. -............ _._.i••····•• ..... , ......... , ... _._.,_ •.. _., •• _ •.•. ,_.._. •• _ .... ,._.,.20
7.4 Authorized Officers , ... , ....... ,: .. :.; •. •., ......... -.:.:.-,-.:: ..... :._.-.•. :.;,.;.-.;:, . .-.;:.; ....... : .... :._.., ....................... , .. .-... 21
7.5 Bank Accounts ................................................................................ _. .. ,.,.: ..... ,, ... _. ..... _ ........ ,., .... 22
7.6 Reliance Upon Advisors .... _,,._.._ •. ,., ............... ,.,, ... , .... , ........ , .. , ........... _ ....... _. ...... _., ... , ..... , .. _. ....................... , .. 22
7 .7 Devotion of Time; Non-Exclusivity ........... ,w ............. , .... ,.,, ............... .-.... .-........ ,, . .-•.•. :.,-... .-; .. 22
7 .8 Reliance by Third Parties .. , ............ : ......... , .. : .. ·• .. •,.•:-:-.•• .. :•,·•···•':•:·I .. ,_ •. , •• , •. ,.•,.•_.·"·'··•--··•··,···•· ....... ,,,., ........ • .. , .... ,._. .. 22
7 .9 Limited Liability .... ~•; ....... ;-................. _;_ ... _.,,,,,_. ........ ,. .. , .. , .. ,-.... .,.'. ................ : .. • .............. :-................... 23
7.10 Limitation on Members' Authority :•-•"·'···•··••.•· .. ··-.. · ... •···· .... • .. :••,· .. ,·· ...... ; ...... ,_,,.,., ....... -, .. _., ..... , .. :,:•23
7.11 Sale Election, ......... _,•.,:_•1 .. , .• , •.• ,. ., ·-·•••·• ..... ,_._._. .•. •,.•,,••.••· •• , ......... :.••.•.••.•·•··"' .,.,.;, ...... , • .-•• _; ... ,/.·.-.· .. .-.~ ... ,~· ...... ,,+•."" 23
7.12 Waiver of Fiduciary Duties . .' ........ -.. : .................... , ...... ,."···.-.... -... : ........ .v.· ............. ;· ••• : .................... 23
ARTICLE 8 BOOKS AND RECORDS; Partnership representative ., .................. , ...................... , .. ,, ...... 24
8.1 Books of Account .................................................... ,.,.-.......... ; .. ,, •• ; ...... "·"···"··········· .. ·•·· .. ·'···•-··· .. •24
8.2 Fiscal Year , .... ,., ..... ,., .. •.•:,.;•.•·····••••·•·•·"·•,•.••··•··•·•·-'•_.:, .. _.,.,._.._ .•... • ... ,_. .... ,.,.,.•.,.•.•-·, .. , .. _., .... ,_, ..... ,,, .. , ... ,., .. ,~••··••.,,.,.•,·••.•.•.•··•·•·r••-••.•••···•·,24
8.3 Partnership Representative ......... ; ..... :, ·:•:t:::_ ..... ;_._-... _,_;._ ................... ; .....• ; .. -.. : ........ , ....... , ... .-:.;., .... ,.; .. 24
ARTICLE 9 TRANSFER OF INTERESTS ........................ : ................ , .. , .......... , ... .,.,,,.,., ...... , .... _.,. .. , ...... _.,. ...... 25
9 .1 Restrictions on Transfer ........... , .. ,,.,, ... ,;••:,··••,• ...... , ........ '._ ............. ;,, .. ,;;;,.,~.+:···.-·,· .. ···::·:·····•:•::• 25
.9.2 Rights of Assignee .............................................................................................................. 25
9.3 Withdrawal of Members ... , .... , .. , ..... ,,, ... ,.,, ... ,.•.·••., .................... ,, .. ., ... ,., ........ ,., ..... , ............... •· .. ,.-............. 25
ARTICLE 10 ADMISSION OF NEW MEMBERS; AMENDMENTS ......... ,,-.... ; ... ;· ........... ; ............. 25
10.1 Admission of Members ..... , ... _._,-...... :•:, ......... , ..... , ....... ,;., ....... :••···•·•··_. ... ,.,, .. , ... , .... 1 •.• ,, ..... ,.,,.,, •. , •. ·:··,.,,, .. ,, •• , •. • •. •,.25
10.2 Amendmentsi.;._. .... _,,._;-... ,.:;.-.. :••!• .. ··,'.·: ... ;.,.; ... : ...... .-; ........ : .... :-.. -.... ; ........... ;.;-........ , ............ ; ................ , ..... 25
ARTICLE 11 INDEMNIFICATION ..................... -.,._ .................................... , .... ,.,., ............. : ............... , .. : .. ..-., .... , ... 25
11.1 Indemnification ................ ,,, ..... ,.,. ........ _'.•.-••.•··.,·, ........................... :_••·"•"·; ........ ..-.. .-... -.:._.: ............ :, ...... _..,,; .•... '.25
11.2 Indemnification ofHomeFed by McKellar McGowan ............................................... 27
ARTICLE 12 DISSOLUTION OF THE COMPANY , ..... :,., ... , ..... , ................ _ ..... ,.: ..... ,_ .. , ................... ,: .. 27
12.1 Events Causing Dissolution ........................ ., ... , .... ;c; ..• ;, .... • .... .; ...... .-•.• , ..... ,;..; ......... , ...... ., ..... ;;27
12.2 Application of Company Assets ........... ,. ... :.,.,:,,,, .......... , ... , .. , .... , ... _,.,., ....... , ... ,,., ........... , .. , .......... _ ...... 27
12.3 Distributions in Kind ......... ::., .. , .. i•\ ... ;•,'.•·•'.,·.···•,,,., .. • ... •.•· .. ,·· ........ • .............. -...... -... , ....... , ..... : .. , ........ 2_8·
12.4 Negative Capital Account Balances ................... , .. .,, ...... ·., ....... , .......... , .... ,.:••···_.,.,.,.,,_., ...... _;: ..... 28,
12.5 No Personal Liability ...... ,., .... , .. _ .... '., ................... '. ....... _., ... , .. , ................... : .. ;,·., .. _; .. _ .. -........... ,.: ..... ,;, .. ,28·
ARTICLE 13 MISCELLANEOUS .......... 1., •• .-........ , ............. ;; ..... ,,.;;·;..-;;.· ............... .-.... : .. -................................. .28
13.1 Counsel to the Company .......................................... ,, ....... , .. ,_., .... , ................. , .... , .... _ .... ,, .... , .. ,.,,., ... _. 28
13.2 Entire AgreemenL, .. '. .. :.:;-;.; ..• .,:· .. ; ......... ;; .... ; ..... ,:.;, .. .-;.;•,,c. .• :;•.:,;; •• ;;-••. ~ .. ·., .................. • .••.• ;c;.;.:• ............ 29
13.3 Parties in Interest .... -..•... ·.•:••·············., .. -... -.. ,.:, .. ,_..,., .. _ .... , .. :;_• ... •···••.•····•··•· .. • .. :•.,•:, ........... ,_.,: ...... , ... ,,. ........ 29
13.4 Governing Law .................................... :, ..... _ .... : ... ,.::,.:.:.-;_.·;·, •.. , .... ..-.. :: ..... :_ ... _ ....... _.: .. ,. ......................... 29
13.5 Jurisdiction; Venue; Enforcement of Award ...................... , ...... , ..................... ,., .. , ... , .... 30
13 .6 Successors and Assigns ...... , ... , ... ,,.,,,, .. ,, ................ , ....... ., ... _ ......... ,~, ....... '.' ...... •.••.•r ............. ,., .. , ......... 30
SMRH:488409815.8 -ii-
13.7
13.8
13.9
13.10
13.11
13.12
13.13
13.14
13.15
13.16
13.17
13.18
Headings; Pronouns .. -:;;' .... , ... : ... , .......... ; .......................... , ... , ... '. ........................... ; .. , .. , ........... , ... , ..... , ... ,.30
Severability ............................................................. : ............................................................. 30
Interpretation ....... ; ............ , ........................................ , ......................................................... ".'.30
Attorneys' Fees ........... , ........... ,,· .. ;--.;· .... ·., ... · .... · ................. i ........................................ , ••.•••. , ..... ,· ......... , 30
Dispute Resolution .... ,, .. ,.,, ...... ,. ... _ ..... , ............. , ................ , ............. , ... , ...................... , .. ·, .............. , .... 31
Exhibits .. , ...... , ................ · .... ;; ... ; ...... : .• ,:;-...• : .................. , ........... .',.; .................... , ........................... ,,.1,.;.31
Counterparts .. ,:;•:• .. ••:.•••; .... : ............... · .. :, .............. :••:••·•.-• ... •····•·:••· .. ·• ...... ,,.,._ ............ _ .... :•,, ... •:•:•_•·• ... ·.•··• ... •••.••.,•.••···,., ... ,, .. 31
Electronic Signatures and Records, ..... } ........ : ........ '. ..................... ,., ........... .' ... ~ .... i .. , ..... ;, ... 31
Investment Representations ................ :, ................ ·,:••...,··· .. · .. , ... : ............................................. , .... : .. 32
Additional Representations ....... •,., .... , ...... , .... ,., ......... , ........ , ......... ; .. ,, .... , ....... , ........ _.• ... ;;_.;-.. _,_ ..... ;,1 •• -,33
Notices ...................................................................................... , ............................................ 35
No Consequential Damages ... , ... ,.,.,,,.,, .... ,., .. ,., ....... , .. , .. , .. :,•.•.•.•· .. ····· .. , .. , ... "',.•.•·."·-.. , ... , ..... 1, •. ·.··:••, ... , .•. • ........ 35
EXHIBIT A -CAPITAL CONTRIBUTION AND ADDRESS OF MEMBERS
EXHIBIT B -INITIAL BUDGET
EXHIBIT C -DEVELOPMENT RESPONSIBILITIES
SMRH:488409815.8 -iii-
OPERATING AGREEMENT
OF
CARLSBAD VILLAGE 80, LLC
a Delaware limited liability company
THIS OPERA TING AGREEMENT (this "Agreement") is entered into as of December
4, 2018 ("Effective Date"), by and between HF CV80, LLC, a Delaware limited liability
company, and JM3 CARLSBAD VILLAGE, L-.P., a California limited partnership (collectively,
the "Members" and, individually, a "Member").
RECITALS
A. A Certificate of Formation ("Certificate") for Carlsbad Village 80, LLC
(the "Company"), a limited liability company under the laws of the State of Delaware, was filed
with the Delaware Secretary of State on November 30, 2018 for the purpose of operating the
business of the Company.
B. The Members desire to appoint HF CV80, LLC, a Delaware limited
liability company, as the sole manager of the Company (the "Manager").
C. The Company is required to be registered with the California Secretary of
State (the "Secretary") to do business in California.
D. The Manager and the Members intend for this Agreement to be the sole
and exclusive operating agreement for the Company that sets forth the complete terms and
conditions governing the operation of the Company and relations between the parties and the
Company and among each other.
AGREEMENT
NOW, THEREFORE, the Manager and the Members by this Agreement set forth
the operating agreement for the Company under the laws of the State of Delaware upon the terms
and subject to the conditions of this Agreement. In consideration of the mutual premises
contained herein, and for good and valuable consideration, the receipt and sufficiency of which
are hereby acknowledged, it is agreed as follows:
ARTICLEl
FORMATION OF LIMITED LIABILITY COMPANY;
ORGANIZATIONAL MATTERS
1.1 Formation. The Certificate was filed with the office of the Secretary of
State of Delaware in acqordance with and pursuant to the Act.
1.2 Name. The business of the Company shall continue to be conducted under
the name "Carlsbad Village 80, LLC" or such other name as the Manager shall hereafter
designate.
SMRH:488409815.8 -1-
1.3 Place of Business. The principal business office of the Company shall be
l9cated at 1903 Wright Place, Suite 220, Carlsbad, CA 92008, or at such other place as may be
designated by the Manager from time to time.
1.4 Term. The term of the Company shall commence on the date hereof and
shall continue in perpetuity, unless sooner terminated as hereinafter provided.
1.5 Covenants Regarding Organization. The Members and Manager shall take
such steps as are necessary to (a) maintain the Company's status as a limited liability company
formed under the laws of the State of Delaware and its qualification to conduct business in any
jurisdiction where the Company does business and is required to be qualified, and (b) ensure that
the Company shall continue to be treated as a partnership for tax purposes.
1.6 Formation; Filings. Application of Delaware Act. The Certificate has
been filed in the Office of the Delaware Secretary of State as required.by the Act. The Manager
may cause to be executed and filed any duly authorized· amendments to the Certificate from time
to time in a form prescribed by the Act. The Manager shall also cause to be made, on behalf of
the Company, such additional filings and recordings as the Manager shall deem necessary or
advisable. The Company is required to be registered to do • business in California.
Section 17708.0l(a) of California Act states that the law of the state of Delaware, which is the
state of formation of the Company, governs: (a) the organization of the Company, (b) the internal
affairs of the Company, (c) the authority of the members and managers of the Company, and
(d) the liability of a member as a member and a manager for the debts, obligations, or other
liabilities of the limited liability company. It is the intention of the Members and the Manager to
have the operations and affairs of the Company governed by the Act and hereby agree that it is
the intention and .agreement that all provisions of this Agreement in fact relate to the internal
affairs of the Company. In furtherance of the intention and agreement of the parties, they each
desire to have the foregoing four concepts listed in clauses (a) -(d) above that are provided in
the California Act to be governed by the Act to be broadly construed to carry out the agreements,
desires and expectations of the parties.
ARTICLE2
DEFINITIONS
· As used in this Agreement, the following terms shall have the following meanings:
"Act" means the Delaware limited Liability Company Act.
"Additional Capital Contributions" is defined in Section 4.3.
"Adjusted Capital Account Deficit" means, with respect to any Member, the deficit
balance, if any, in such Member's Capital Account as of the end of the relevant fiscal year.of the
Company, after such Member's Capital Account has been (a) increased by the amount of such
Member's share of Company Minimum Gain (including Company Minimum Gain attributable to
Member Nonrecourse Deb.t) and (b) decreased by the amount of the items described in
Regulations Sections 1.704-l(b)(2)(ii)(d)(4), (5) and (6).
SMRH:488409815.8 -2-
"Affiliate" means, with reference to a specified Member, any Person controlling,
controlled by, or under the common control of a Member. The term "control," as used in the
immediately preceding sentence, means, with respect to a corporation or limited liability
company, the right to exercise, directly or indirectly, fifty percent (50%) or more of the voting
rights attributable to the controlled corporation or limited liability company, and, with respect to
any individual, partnership, trust or other entity or association, the possession, directly or
indirectly, of the power to direct or cause the direction of the management or policies of the
controlled entity.
"Agreement" means this Operating Agreement, as amended, modified or supplemented
from time to time.
"Applicable Law" means all existing and future federal, state and local laws, orders,
ordinances, governmental rules and regulations and court orders.
"Authorized Officer" is defined in Section 7.4.1.
"California Act" means the California Revised Uniform Limited Liability Company Act,
Title 2.6 of the California Corporations Code, as amended.
"Capital Account" is defined in Section 4.2.
"Capital Contributions" means, with respect to any Member, the amount of money and
the initial Gross Asset Value of any property (other than money) contributed (or deemed
contributed under Regulations Section 1.704-l(b)(2)(iv)(d)) to the capital of the Company with
respect to the Membership Interest held by such Member at the time in question.
"Cause" means gross negligence that results in a material loss to the Company, willful
misconduct or fraud in connection with any obligations set forth in this Agreement and provided
that, in the event of gross negligence or willful misconduct, the Manager was given written
notice specifying the grounds contributing cause and failed to cure. the alleged breach within
thirty (30) days of such notice.
"Certificate" has the meaning set forth in the Recitals.
"Code" means the Internal Revenue Code of 1986, as amended.
"Company" means the limited liability company formed pursuant to this Agreement by
the parties hereto, as said company may frpm time to time be constituted.
"Company Counsel" is defined in Section 13.1.
"Company Minimum Gain" shall have the meaning ascribed to the term "Partnership
Minimum Gain" in Regulations Section 1.704-2(d).
"Construction Phase" means the period commencing upon the commencement of
vertical construction of the Project and ending upon the City's issuance of certificates of
occupancy for the Project.
SMRH:488409815.8 -3-
"Depreciation" means, for each Fiscal Year of the Company, an amount equal to the
depreciation, amortization, or other cost recovery deduction allowable with respect to an asset
for such Fiscal Year, except that if the Gross Asset Value of an asset differs from its adjusted
basis for federal income tax purposes at the beginning of such Fiscal Year, Depreciation shall be
an amount which bears the same ratio to such beginning Gross Asset Value as the federal income
tax depreciation, amortization, or other cost recovery deduction for such Fiscal Year bears to
such beginning adjusted tax basis; provided, however, that if the adjusted basis for federal
income tax purposes of an asset at the beginning of such Fiscal Year is zero, Depreciation shall
be determined with reference to such beginning Gross Asset Value using any reasonable method
selected by a Majority-in-Interest of the Members.
"Development Fee" means a development and overhead fee to McKellar McGowan
equal to three percent (3%) of Project Revenues, to be paid in accordance with and is subject to
adjustment as provided in Section 4.6.
"Development Responsibilities" means the obligations and responsibilities of McKellar
McGowan described in Exhibit C attached hereto.
"Development Phase" means the period commencing on the date hereof and terminating
upon Final Approval of the Entitlements.
"Dispute" is defined in Section 13.4.
"Distributable Cash" means the gross amount of cash from Company operations
(including sales, dispositions and refinancings of any property of the Company, and all principal
and interest payments with respect to any note or other obligation received by the Company in
connection with sales or other dispositions of any property), less the portion thereof used to pay
or establish reserves for all Company expenses, debt payments. (including debt payments in
connection with loans made to the Company by the Members), capital improvements,
replacements and contingencies, all as determined by the Manager. "Distributable Cash" shall
not be reduced by depreciation, amortization, cost recovery deductions or similar allowances
(except to the extent cash is set· aside to pay or establish a reserve for such items), but shall be
increased by any reductions ofreserves previously established under this provision.
"E-Sign" means the Electronic Signatures in the Global and National Commerce Act.
"Economic Interest" means a Person's right to share in the income, gains, losses,
deductions, credit or similar items of, and to receive Distributable Cash from, the Company, but
does not include any other rights of a Member including, without limitation, the right to vote or
to participate in management, or, except to the extent provided by law, any right to information
concerning the business and affairs of the Company.
"Entitlements" means all necessary governmental approvals and permits for the Project,
including a tentative subdivision map, as generally described in Exhibit C.
"Escrow Agent" means any federally chartered bank selected by the Manager to serve as
the escrow agent under ARTICLE 9 of this Agreement.
SMRH:488409815.8 -4-
"Final Approval" means that the City of Carlsbad and other applicable governmental
agencies have approved the Entitlements and all appeal or challenge periods under CEQA have
expired with no appeal or challenge having been made or any appeals or challenges have been
resolved in favor of the approval of the Entitlements.
"Fiscal Year" means the fiscal year of the Company, as set forth in Section 8.2 hereof.
"Funding Cessation Event" means any of the following: (i) Final Approval of the
Entitlements has. not been obtained by the scheduled closing date under either or both of the
Purchase Agreements (as they may be extended), (ii) any appeal or challenge is made with
respect to the Entitlements that will delay Final Approval by more than sixty (60) days, (iii)
McKellar McGowan fails to perform the Development Responsibilities and such failure
continues for more than ten (10) days after HomeFed delivers written notice thereof to McKellar
McGowan or (iv) the total Capital Contributions of the Members would exceed $1,700,000 in the
aggregate.
"Gross Asset Value" means, with respect to any asset, the asset's adjusted basis for
federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of any asset contributed by a Member to the
Company shall be the gross fair market value of such asset, as reasonably determined by the
Majority-in-Interest of the Members and the contributing Member; •
(b) The Gross Asset Values of all Company assets shall be adjusted to equal their
respective gross fair market values, as reasonably determined by a Majority-in-Interest of the
Members, as of the following times: (i) the acquisition of an additional Membership Interest by
any new or existing Member in exchange for more than a de minimis Capital Contribution; (ii)
the distribution by the Company to a Member of more than a de minimis amount of property as
consideration for a Membership Interest; (iii) the issuance of a Membership Interest (other than a
de minimis interest) as consideration for the provision of services to or for the benefit of the
Company by an existing Member acting in a Member capacity or by a new Member acting in a
Member capacity or in anticipation of being a Member; and (iv) the liquidation of the Company
within the meaning of Regulations Section 1.704-l(b)(2)(ii)(g);
(c) The Gross Asset Value of any Company asset distributed to any Member shall be
adjusted to equal the gross fair market value of such asset on the date of distribution, as
reasonably determined by a Majority-in-Interest of the Members and the recipient Member; and
(d) The Gross Asset Values of Company assets sha)lbe increased (or decreased) to
reflect any adjustments to the adjusted basis of such assets pursuant to Section 734(b) of the
Code or Section 743(b) of the Code, but only to the extent that such adjustments are taken into
account in determining Capital Accounts pursuant to Regulations Section l.704-l(b)(2)(iv)(m);
provided, however, that Gross Asset Values shall not be adjusted pursuant to this clause (d) to
the extent a Majority-in-Interest of the Members determine that an adjustment pursuant to clause
(b) hereof is necessary or appropriate in connection with a transaction that would otherwise
result in an adjustment pursuant to this clause (d).
SMRH:488409815.8 -5-
If the Gross Asset Value of an asset has been determined or adjusted pursuant to Section
clause (a), (b) or (d) hereof, such Gross Asset Value shall thereafter be adjusted by the
Depreciation taken into account with respect to such asset for purposes of computing Profits and
Losses.
"HomeFed" means HF CV80, LLC, a Delaware limited liability company,
"Including" (or any variant thereof) means including, without limitation.
"Indemnified Person" is defined in Section 11.l(a). •
"Initial Funding Requirement" means $655,000, which is the amount required to make
additional deposits and opdon payments under the Purchase Agreements in the amount of
$599,000 ("Additional Deposits''), formation costs of the Company and funding of other
approved expenses.
"Interest" means an ownership interest in the Company, which includes a Member's•
Economic Interest and a Member's Membership Interest.
"JAMS" is defined in Section 13.11.
"Major Decisions" has the meaning set forth in Section 7.3.
"Majority-in-Interest" means those Members owning, in the aggregate, more than fifty
percent (50%) of the Percentage Interests, except where otherwise expressly provided in this
Agreement.
"Manager" means a Person s.elected to manage the Company pursuant to the provisions
of this Agreement a:nd the Act, as specified in ARTICLE 7 below.
"McKellar McGowan" means JM3 Carlsbad Village, L.P., a California limited
partnership.
"Member" means a Person wh<;> (i) has been admitted to the Company as a Member in
accordance with this Agreement (including each Person whose name is listed on the signature
page hereof and each Person who hereafter has been admitted to the Company as a member in
accordance with ARTICLE 10) or is a transferee or assignee of a Membership Interest who has
become a member pursuant to ARTICLE 9;. and (ii) has not resigned, withdrawn or been
expelled as a member or, if other than an individual, been dissolved.
"Me~ber Nonrecourse Debt" shall have the meaning ascribed to the term "Partner
Nonrecourse Debt" in Regulations Section l.704-2(b)(4).
"Member Nonrecourse Debt Minimum Gain" means minimum gain attributable to
Member Nonrecourse Debt pursuant to Regulations Section 1.704-2(i)(3).
SMRH:488409815.8 -6-
"Membership Interest" means a Member's rights in the Company, collectively,
including the Member's Economic Interest, any right to vote or participate in management, and
any right to information concerning the business and affairs of the Company.
"Monthly Advances" means the monthly advances of the Development Fee to be paid as
follows: (i) during the Entitlements Phase, Monthly Advances will be in the amount of $35,000
per month up to a maximum amount of $350,000, (ii) during the Pre-Construction Phase,
Monthly Advances will be in the amount of $35,000 per month up to a maximum amount of
$385,000 and (iii) during the Construction Phase, Monthly Advances will be in the amount of
$54,000 per month up to a maximum amount to be agreed to by the Members.
"Net Profits" and "Net Losses" means, for eacq Fiscal Year of the Company, an amount
equal to the Company's taxable net income or net loss for such Fiscal Year, determined in
accordance with Section 703(a) of the Code (and, for this purpose, all items of income, gain,
loss, or deduction required to be stated separately pursuant to Section 703(a)(l) of the Code shall
be included in taxable income or loss), with the following adjustments:
(a) Any income of the Company that is exempt from federal income tax and not
otherwise taken into account in computing Net Profits or Net Losses pursuant to this Section
shall be added to such taxable income or loss;
(b) Any expenditures of the Company <:lescribed in Section 705(a)(2)(B) of the Code
or deemed to be described in Section 705(a)(2)(B) of the Code pursuant to Regulations Sectfon
1.704-1 (b )(2)(iv)(i), and not otherwise taken into account in computing Net Profits or Net Losses
pursuant to this Section, shall be subtracted from such taxable income or loss;
(c) In the event the Gross Asset Value of any Company asset is adjusted pursuant to
clause (b) or ( c) hereof, the amount of such adjustment shall be taken into account as gain or loss
from the disposition of such asset for purposes of computing Net Profits or Net Losses;
(d) Gain or loss resulting from any disposition of property with respect to which gain
or loss is recognized for federal income tax purposes shall be computed by reference to the Gross
Asset Value of the property disposed of, notwithstanding that the adjusted tax basis of such
property differs from its gross asset value;
( e) In lieu of the depreciation, amortization, and other cost recovery deductions taken
into account in computing such taxable income or loss, there shall be taken into account
Depreciation for such Fiscal Year or other period; and
(f) To the extent an adjustment to the adjusted tax basis of any Company asset
pursuant to Section 734(b) of the Code or Section 743(b) of the Code is required pursuant to
Regulations Section 1.'704-l(b)(2)(iv)(m)(4) to be taken into account in determining Capital
Accounts as a result of a distribution other than in liquidation of an Economic Interest, the
amount of such adjustment shall be treated as an item of gain (if the adjustment increases the
basis of the asset) or loss (if the adjustment decreases the basis of the asset) from the disposition
of the asset and shall be taken into account for purposes of computing Net Profits or Net Losses.
SMRH:488409815.8 -7-
"Nonrecourse Liability" shall have the meaning set forth in Regulations Section 1.752-
1 (a)(2).
"OCIP" means an owner-control.led insurance policy acceptable to the Members that will
be obtained at Company expense if the Company proceeds with construction of the Project.
"Partnership Tax Audit Rules" is defined in Section 8.3.
"Percentage Interest" means twenty percent (20%) as to McKellar McGowan and
eighty percent (80%) as to HomeFed.
"Person" means an individual, general partnership, limited partnership, limited liability
company, corporation, trust, estate, real estate investment trust, association or other entity,
whether domestic or foreign.
"Preferred Return" means a preferred return equal to ten percent (10%) per annum,
compounded annually, on the Unrecovered Contribution Account of each Member.
"Pre-Construction Phase" means the period commencing upon Final Approval of the
Entitlements and ending upon recordation of a final subdivision map for the Project and the
City's issuance of a building permit for the Project.
"Pre-Formation Project Expenses" means Project expenses paid by McKellar
McGowan prior to the Effective Date in the amount of $41,959.
"Project" means the project consisting of a subterranean garage with approximately 154
parking spaces and a four-story project containing approximately 67 market rate residences, 11
affordable residential units and approximately 15,000 of ground floor retail space planned for the
Real Property, as generally described in the preliminary design prepared by Robert Hidey
Architects, Project Number 18008, dated 9/24/2018.
"Project Budget" means the current estimated budget for the Project. The initial Project
Budget is attached hereto as Exhibit B, which is subject to any modifications or supplements
thereto approved by the Manager.
"Project Phase(s)" means the Entitlements Phase, the Pre-Construction Phase and/or the
Construction Phase, as applicable.
"Project Revenues" means, for any period, the total gross revenues received by the
Company during such period, including all receipts of the Company from (a) cost, expense and
other recoveries, (b) concessions to the Company which are in the nature of revenues,
(c) proceeds of insurance, (d) all funds withdrawn from the Company's reserve accounts and
deposited into the Company's operating accounts, (e) revenues and the proceeds from the sale or
other disposition of any Property, and (f) all other revenues and receipts realized by the
Company, but excluding Capital Contributions.
"Property" means the Company's interest in (i) the Real Property, (ii) any
improvements thereon and (iii) all other assets and properties of whatever kind (real, personal or
SMRH:488409815.8 -8-
mixed and tangible or intangible, whether or not liquidated or contingent) acquired and held
from time to tiine by the Company.
"Proportionate Share" means ten percent (10%) as to McKellar McGowan and ninety
percent (90%) as to HomeFed.
"Purchase Agreements" means (i) the Option Agreement dated March 1, 2018, as
amended by a First Amendment to ·option Agreement dated as of September 5, 2018, a Second
Amendment to Option Agreement dated as of October 23, 2018, and a Third Amendment to
Option Agreemt:nt dated as of November 15, 2018, between Donald K. Dewhurst and Lael J.
Dewhurst as Trustees of the Dewhurst Family Revocable Trust under Declaration of Trust dated
March 13, 1990 ("Dewhurst Seller"), and McKellar McG9wan, as Buyer, and (ii) the Purchase
Agreement and Escrow Instructions dated March 6, 2018; as amended by a Reinstatement and
First Amendment to Purchase Agreement dated as of September 17, 2018, and a Reinstatement
and Second Amendment to Purchase Agreement dated as of November 15, 2018, between
Carolyn Howard Jones-Curtis and Barbara Diane Howard-Jones as Co-trustee for the Howard-
Jones Marital Trust dated March 3·1, 1981, as Seller ("Howard-Jones Seller" and collectively
with the Dewhurst Seller, the "Seller(s)"), and McKellar McGowan, as Buyer.
"Real Property" means the land consisting of approximately 1.74 acres located between
State Street and Roosevelt Street in the Village area of Carlsbad, California, as described in the
Purchase Agreements.
"Regulations" means the Treasury Regulations promulgated under the Code.
"Rules" is defined in Section 13. L.
"Sale Election" is defined in Section 7.l 1-:
"Selling Member" means a Member that elects to sell its Membership Interests in the
Company pursuant to a transaction under ARTICLE 9 of this Agreement.
"Transfer" means any transfer, sale, assignment, gift, pledge or other disposition or
encumbrance.
"Unrecovered Contribution Account" means, with respect to each Member on any
date, the ex:cess, if any, of (a) the cumulative cash payments by such Member to the Company,
over. (b) the cumulative distributions made to such Member in respect of such Member's
Unrecovered Contribution Account pursuant to Section 5.l(b),
ARTJCLE3
BUSINESS PURPOSE
3 .1 Purpose. The purpose of the Company is to obtain an assignment of the
Purchase Agreements, acquire the Real Property pursuant to the Purchase Agreements, process
and obtain the Entitlements, unless HomeFed makes the. Sale Election, develop the Project on the
Real Property, market and sell the Real Property, and engage in any other lawful activities for
which limited liability companies may be ·organized under the laws of the State of Delaware.
SMRH:488409815.8 -9-
3.2 Waiver of Right of Partition. -Except as expressly provided in this
Agreement, no Member may, either directly or indirectly, take any action to require partition of
the Company or of any of the Property or cause the sale of any of the Property without the
consent of the Manager and a Majority-in-Interest of the Members; and, notwithstanding any
provision of law to the contrary, each Member (and his, her or its legal representative, successor
or assign) hereby irrevocably waives any and all right to maintain any action for partition or to
compel any sale with respect to his, her or its Membership Interest, or with respect to any assets
or properties of the Company.
3.3 Outside Activities and Investments of Members and the Manager. The
Members, the Manager, and their respective Affi_liates, officers, directors, shareholders, partners,
members, managers, agents and employees may engage or invest in, independently or with
others, any business activity of any type or description, including those that might be the same as
or similar to the Company's business and that might be in direct or indirect competition with the
Company. Neither the Company nor any other Member shall have any right in or to such other
ventures or activities or to the income or proceeds derived therefrom as a result of this
Agreement. No Member or Manager shall be obligated to present any investment opportunity or
prospective economic advantage to the Company, even if the opportunity is of the character that,
if presented to the Company, could be taken by the Company. The Members and the Manager
shall have the right to hold any investment opportunity or prospective economic advantage for its
own account or to recommend such opportunity to Persons other than the Company. The
Members acknowledge that each Member and the Manager (and/or their Affiliates) owns and/or
manages other businesses, including businesses that may compete with the Company and, with
respect to the Manager, for the Manager's time. The Members hereby waive any and all rights
and claims which they may otherwise have against any other Member, the Manager and their
respective Affiliates, officers, directors, shareholders, partners, members, managers, agents and
employees as a result of any of such activities. Without limiting the foregoing, the Members
acknowledge that each Member and its Affiliates own, directly or indirectly, other real estate
developments and investments, and the Members agree that each Member and its Affiliates may
own, develop, operate, sell and otherwise deal with su_ch properties in their sole and absolute
discretion without any duty to the Company or the other Members.
3.4 Outside Employment of Members and the Manager. The fact that any
Member, Manager or Affiliate of any Member or Manager is employed by, or is directly or
indirectly interested in or connected with, any Person employed or engaged by the Company to
render or perform a service, or from whom the Company may make any purchase, or to whom
the Company may make any sale, or from or to whom the Company may obtain or make any
loan or enter into any lease, license or other arrangement, shall not prohibit the Company from
engaging in any transaction with such Person, or create any additional duty of legal justification
by such Member, Manager, Affiliate or such Person beyond that of an unrelated party, and
neither the Company nor any other Member shall have any right in or to any revenues or profits
derived from such transaction by such Member, Manager, Affiliate or Person.
SMRH:488409815.8 -10-
ARTICLE4
CAPITAL AND CONTRIBUTIONS;
RIGHTS AND OBLIGATIONS OF MEMBERS
4.1 Initial Capital Contributions. Each Member shall make an initial Capital
Contribution as set forth in this Section 4.1. Except as provided in this Agreement, no Member
may withdraw its Capital Contribution.
(a) :Assigmnenfof·P.urchase Agreemerits; Jnitial Capita!Contdbutions
of McKellar McGowan. Prior to the Effective Date, McKellar McGowan (a) deposited $100,000
in the escrow with the Howard-Jones Seller of which $22,520 has been released to the Howard-
Jones Seller, and (b) released $16,000 to the Dewhurst Seller as non-refundable but applicable
option payments ( collectively, the "Existing Deposits"). McKellar McGowan will concurrently
herewith assign all of its rights, title and interest in and to the Purchase Agreements (including
the Existing Deposits) and all existing consulting contracts, applications and work product
relating to the Project to the Company by written assignment, and the Company will assume any
and all of the duties and obligations of McKellar McGowan arising under the Purchase
Agreements from and after the Effective Date. On Effective Date, McKellar McGowan will be
deemed to have made an initial Capital Contribution to the Company in the amount of .the
Existing Deposits plus the amount of the Pre-Formation Project Expenses. Except as provided in
the prior sentence, the Members agree that the assignment of the Purchase Agreements and such
other rights have a zero value and no amount shall be credited to McKellar McGowan's Capital
Account by reason of the assignment.
(b) Initial Capital Contributions of HomeFed. On Effective Date,
HomeFed will make an initial Capital Contribution to the Company equal to the Initial Funding
Requirement and will receive an initial Capital Account equal to such Capital Contribution.
4.2 Maintenance of Capital Accounts. Capital accounts shall be maintained
for each Member in accordance with Section 704(6) of the Code and the Regulations
promulgated thereunder, including particularly the requirements of Regulations Section 1. 704-
1 (b )(2)(iv), as determined in good faith by the Manager ( each such account referred to herein as
a "Capital Account"). Each Member's Capital Account shall be initially credited with the
Capital Contribution made by such Member under Section 4.1, when made.
4.3 Additional Capital Contributions. • The Members shall make additional
Capital Contributions ("Additional Capital Contributions") to the Company in proportion to
their Proportionate Shares to fund (i) payments required to be made by the Company under the
Purchase Agreements (including option payments and extension payments), (ii) provided that the
Members approve the purchase of the Real Property, the balance of the purchase prices payable
pursuant to the Purchase Agreements, and (iii) Entitlements costs, design costs, development
costs and other Project costs, all in accordance with the Budget. Each Member will make any
required Additional Capital Contribution within ten (10) days after the Manager delivers a
written notice that such Additional Capital Contribution is required. Each Member that makes
an Additional Capital Contribution will receive a credit to its Capital Account in the amount of
its Additional Capital Contribution. Notwithstanding the forgoing, HomeFed will make all
Additional Capital Contributions, and McKellar McGowan will not be required to make any
SMRH:488409815.8 -11-
Additional Capital Contributions, until the total amount of all Capital Contributions exceed
$1,656,540 (i.e., until the time that McKellar McGowan's initial Capital Contribution equals
10% of the total amount of all Capital Contributions).
(a) Failure to Make Capital Contributions. If a Member ("Non-
contributing Member") defaults on its obligation to make a Capital Contribution (to the extent
required by Section 4.1 or this Section 4.3) or if McKellar McGowan fails to indemnify the
Company or another indemnitee as required pursuant to Section 11.2, then the other Member
("Contributing Member") shall (a) have the right to pursue any remedy available at law or in
equity against the Non-Contributing Member for such failure to contribute or such failure to
indemnify, including an action in its own name or in the name of the Company, and (b) have the
right to elect to contribute to the Company, all or any portion of such unpaid Capital
Contribution or required payment pursuant to such indemnity obligation, as applicable (the
"Default Amount") (which amount, together with interest thereon at the rate of fifteen percent
(15%) per annum (based on a 30-day month and 360-day year) compounded monthly, or the
maximum rate allowed by law if lower, shall be referred to as a "Default Contribution"). Such
Default Contribution shall (i) have recourse solely to the Company and its assets, (ii) not be •
treated as a Capital Contribution by the Contributing Member but shall be treated as a Capital
Contribution by the Non-Coptributing Member, and (iii) be paid by the Company from any
payments or distributions that the Company would otherwise make to the Non-Contributing
Member pursuant to Section 4.6, Section 5.1 or Section 12.3 (and must be paid in full before any
payments or distributions • pursuant to such provisions are made to the Non-Contributing
Member) ("Default Contribution Repayments"). Any Default Contribution Repayment made
pursuant to Section 4.6 will be deemed made to the Non-Contributing Member and will reduce
the amounts payable to the Non-Contributing Member under Section 4.6. Any Default
Contribution Repayment made pursuant to Section 5.1 or Section 12.3 will be deemed made to
the Non-Contributing Member and will reduce the Unrecovered Capital Contributions and
Preferred Return of the Non-Contributing Member (to the extent that such amounts if paid to the
Non-Contributing Member would reduce its Unrecovered Capital Contributions and Preferred
Return) and reduce the amounts payable to the Non-Contributing Member under Section 5.1 or
Section 12.3. If the Non-Contributing Member subsequently pays all cir any portion of the
Default Amount to the Company, then such payment of all or any portion of the Default Amount
shall be used to promptly repay the Contributing Member the unreturned portion of the Default
Contribution. This Section shall not apply to an Electing Member that elects not to make any
unfunded Additional Capital Contributions after a Funding Cessation.Event as provided below.
(b) Funding Cessation Event. Notwithstanding anything to the
contrary contained herein, if a Funding Cessation Event occurs, either Member may elect not to
make any unfunded Additional Capital Contributions ("Electing Member") by delivering
writing notice to the Manager and the other Member ("Non-Electing Member") within ten (10)
days after the Manager delivers a written notice that an Additional Capital Contribution is
requ'ired. In such event, the Non~Electing Member may also elect to not make any unfunded
Additional Capital Contributions or may elect to make all unfunded Additional Capital
Contributions. If the Non-Electing Member elects to make the unfunded Additional Capital
Contributions, (i) it may withdraw such election and discontinue Additional Capital
Contributions at any time and (ii) the Non-Electing Member may elect at any time to acquire the
Electing Member's Membership Interest for a cash amount equal to the Electing Member's
SMRH:488409815.8 -12-
unpaid Preferred Return and Unrecovered Contribution: Account, in which case the Electing
Member shall withdraw as a Member of the Company and transfer to the Non-Electing Member
all of its Membership Interest. If the Non-Electing Member does not elect to acquire the
Electing Member's Membership Interest, then the Electing Member will the_reafter have only an
Economic Interest in the Company and will have no other rights of a Member. If HomeFed is
the Electing Member, then McKellar McGowan will have the right to remove HomeFed as the
Manager. If McKellar McGowan is the Electing Member, then HomeFed will have the right to
remove McKellar McGowan from continuing its Development Responsibilities, in which case
McKellar McGowan will not be entitled to any additional payments of the Development Fee.
Notwithstanding the foregoing, all obligations accrued by the Company, or for which the
Company is responsible, in each case in accordance with the Budget, as of the date of the
Funding Cessation Event will be paid by the Company.
(c) Except as provided in Section 4.1 or this Section 4.3, no Member
shall be required to make any Capital Contributions.
(d) Notwithstanding anything to the contrary contained herein, if
McKellar McGowan is required to indemnify the Company pursuant to Section 11.2, any such
indemnification payments made by McKellar McGowan shall not be deemed Capital
Contributions and shall not entitle McKellar McGowan to earn or accrue any return thereon or
otherwise recoup any such payments.
4.4 No Interest on Contributions. Except for the Preferred Return, no Member
shall have the right to receive interest on contributions to the Company.
4.5 No Right to Withdraw. No Member may withdraw or resign from the
Company without the consent of the Manager and a Majority-in-Interest of the Members.
4.6 Compensation of Members. No Member, Manager, or Affiliate thereof is
entitled to remuneration for services rendered or goods provided to the Company except as
provided in this Section.
(a) Development Fee. McKellar McGowan will perform the
applicable Development Responsibilities with respect to each Project Phase and in return the
Company will pay McKellar McGowan the Development Fee. During each Project Phase, the
Company will make the applicable Monthly Advances of the Development Fee to McKellar
McGowan, but in no event more than the maximum amount of the Monthly Advances for each
Project Phase set forth in the definition of Monthly Advances. The Monthly Advances will be
paid on or before the 15th day of each calendar month and will be prorated for any partial
calendar month. Upon the end of the Constructio_n Phase, no further monthly payments of the
Development Fee will be due. If HomeFed does not make the Sale Election and the Company
proceeds with construction of the Project, upon final disposition of the Project, after the return of
Unrecovered Capital Contributions and Preferred Return, McKellar McGowan will receive any
unpaid amount of the Development Fee to the extent ofremaining Distributable Cash as set forth
in Section 5 .1 ( c ), provided that if the Monthly Advances of the Development Fee exceed three
percent (3%) of the Project Revenues, then McKellar McGowan will pay any such excess to the
Company. If HomeFed makes the Sale Election, then no further Monthly Advances shall be
SMRH:488409815.8 -13-
payable, the Development Fee will be limited to the amount of the Monthly Advances earned
through the date HomeFed makes the Sale Election and McKellar McGowan will not be entitled
to any additional payments of the Development Fee.
(b) Reimbursement of Certain Costs .. The Company will reimburse
the Manager or its Affiliates for internal administrative costs of Manager or its Affiliates
reasonably allocated to the Company and for actual third party costs incurred for other Company
costs accordance with the Budget. The Manager, the Members arid their Affiliates shall not be
reimbursed by the Company for the following expenses (i) salaries, compensation or fringe
benefits of the managers, directors, officers or employees of the Manager, the Members or their
Affiliates (except for approved on-site employees during the Construction Phase), (ii) overhead
expenses, including rent and general office expenses or (iii) costs and expenses in connection
with the negotiation of this Agreement or any due diligence analyses and other evaluations in
connection therewith.
ARTICLES
DISTRIBUTIONS
5.1 Distributable Cash. Subject to Applicable Law and to limitations
contained elsewhere in this Agreement (including Section 5.2), the Manager may elect from time
to time to distribute Distributable Cash in the following order of priority:
(a) First, to each Member, an amount in proportion to its accrued and
unpaid Preferred Return until all accrued and unpaid Preferred Return has been paid. -
(b) Second, to all Members with positive balances in their respective
Unrecovered Contribution Accounts in proportion to such positive balances, until all such
balances are reduced to zero;
(c)
Development Fee; and
Third, to McKellar McGowan an amount equal to any unpaid
(d) The balance, if any, to the Members, pro rata, in accordance with
their respective Percentage Interests.
5.2 Tax Distributions. Subject to Applicable Law and to limitations contained
elsewhere in this Agreement, the Manager may from time to time, and in his, her or its sole
discretion, cause the Company to distribute Distributable Cash to each Member so as to assist
such Members in paying their U.S. federal and applicable state income tax liability attributable to
such Members' respective allocable share of the Company's taxable income computed in
accordance with this Agreement (as determined in the case of each Member by the Manager in
his, her or its sole discretion). Any distributions to a Member pursuant to this Section 5.2 shall
be treated for purposes of this Agreement as advances on distributions pursuant to Section 5.1,
and shall reduce, dollar-for-dollar, the amount that such Member would otherwise be entitled to
receive,pursuant to Section 5.1.
5.3 Distributions to Holders of Record. All distributions hereunder shall be
made only to the Persons who, according to the books and records of the Company, are the
SMRH:488409815.8 -14-
holders of record of Interests in respect of which such distributions are made on the actual date
of distribution. Neither the Company nor any· Member, Manager or officer shall incur any
liability for making distributions in accordance with this Section 5.3.
5.4 Form of Distribution. No Member, regardless of the nature of the
Member's Capital Contributions, -shall have the right to demand and receive any distribution
from the Company in any form other than money. Further, no Member may be compelled to
accept from the Company a distribution of any asset in kind in lieu of a proportionate distribution
of money being made to other Members. A Member may be compelled, however, to accept an
in-kind asset distribution if such asset is being distributed proportionately to all Members.
5.5 Withholding on Distributions. Each Member acknowledges and agrees
that the Company may be required to deduct and withhold tax or to fulfill other obligations of
such Member on any amount distributed or allocated by the Company to such Member or to any
assignee of a Member's Interest (or the related Economic Interest), including amounts related to
any imputed underpayment of Taxes. Each Member shall promptly furnish the Partnership
Representative with an Internal Revenue Service Form W-8, Form W-9 or Form 1001, as
applicable. For all purposes of this Agreement, all amounts so withheld with respect to such
Membei:-shall be treated as advances on distributions pursuant to Section 5.1, and shall reduce,
dollar-for-dollar, the amount that such Member would otherwise be entitled to receive pursuant
to Section 5.1.
5.6 Return of Distributions. Except for distributions made in violation of the
Act or this Agreement, no Member shall be obligated to return any distribution to the Company
or pay the amount of any distribution for the account of the Company or to any creditor of the
Company. The amount of any distribution returned to the Company by a Member or paid by a
Member for the account of the Company or to a creditor of the Company shall be added to the
account or accounts from which it was subtracted when it was distributed to such Member.
5.7 Restriction on Distributions. No distribution shall be made if, after giving
effect to the distribution:
(a) The Company would not be able to pay its debts as they become
due in the usual course of business; or
(b) The Company's total assets would be less than the sum of its total
liabilities.
ARTICLE6
ALLOCATIONS OF NET PROFITS AND NET LOSSES; TAX ELECTIONS
6.1 Allocation of Net Profits and Net Losses. Except as otherwise provided in
this Section 6.1, in Section 6.2, in Section 6.3, in Section 6.4, or in Section 6.5, Net Profits and
Net Losses for any taxable year shall be allocated to and between the Members. in a manner that
causes the Capital Account of each Member, as increased by such Member's share of Company
Minimum Gain and Member Nonrecourse Debt Minimum Gain, to equal (as closely as possible)
the amount that would be distributable to such Member on such date if (a) all the assets of the
Company (including intangible assets such as goodwill) were sold for cash equal to their
SMRH:488409815.8 -15-
respective book values as of such date, (b) all liabilities of the Company were paid in full (except
that in the case of a nonrecourse liability, such payment would be limited to the book value of
the asset or assets securing such liability) and (c) all remaining cash were distributed to the
Members pursuant to Section 12.2(d).
6.2 Limitations on Net Losses. Net Losses allocated pursuant to Section 9.1
shall not exceed the maximum amount of Net Losses that can be so allocated without causing
any Member to have an, or to increase an existing, Adjusted Capital Account Deficit at the end
of any fiscal year. In the event some but not all of the Members would have an Adjusted Capital
Account Deficit as a consequence of an allocation of Net Losses pursuant to Section 9 .1, the
limitation set forth in this Section 9.2 shall be applied on a Member-by-Member basis so as to
allocate the maximum permissible Net Losses to each Member under Section 1. 704~ 1 (b )(2)(ii)( d)
of the Regulations. All Net Losses in excess of the limitation set forth in this Section 9.2 shall be
allocated to and among the Members, pro rata, in accordance with their respective Percentage
Interests.
6.3 Special Allocations. Notwithstanding anything to the contrary in
Section 9 .1 :
(a) Minimum Gain Chargeback. If there is a net decrease in Company
Minimum Gain during any fiscal year, each Member shall be specially allocated items of
Company income and gain for such fiscal year (and, if necessary, in subsequent fiscal years) in
an amount equal to the portion of such Member's share of the net decrease in Company
Minimum Gain that is allocable to the disposition of Company property subject to a Nonrecourse
Liability, which share of such net decrease shall be determined in accordance with Regulations
Section 1.704-2(g)(2). Allocations pursuant to this Section 6.3(a) shall be made in proportion to
the amounts required to be allocated to each Member under this Section 6.3(a). The items to be
so allocated shall be determined in accordance with Regulations Section 1.704-2(£). This
Section 6.3(a) is intended to comply with the minimum gain chargeback requirement contained
in Treasury Regulations Section l .704-2(f) and shall be interpreted consistently therewith.
(b) Chargeback of Minimum. _ Gain Attributable to Member
Nonrecourse Debt. If there is a net decrease in Member Nonrecourse Debt Minimum Gain
during any fiscaf year, each Member who has a share of the Member Nonrecourse Debt
Minimum Gain (which share shall be determined in accordance with Regulations Section l.704-
2(i)(5)) shall be specially allocated items of Company income and gain for such fiscal year (and,
if necessary, in subsequent fiscal years) in an amount equal to that portion of such Member's
share of the net decrease in Member Nonrecourse Debt Minimum Gain (which share of such net
decrease shall be determined in accordance with Regulations Section 1.704-2(i)(5)). Allocations
pursuant to this Section 6.3(b) shall be made in proportion to the amounts required to be
allocated to each Member under this Section 6.3(b ). The items to be so allocated shall be
determined in accordance with Regulations Section 1. 704-2(i)( 4). This Section 6.3(b) is
intended to comply with the minimum gain chargeback requirement contained in Regulations
Section l.704-2(i)(4) and shall be interpreted consistently therewith.
SMRH:488409815.8 -16-
(c) Nonrecourse Deductions. Any nonrecourse deductions (as defined
in Regulations Section l.704-2(b)(l)) for any fiscal year or other period shall be specially
allocated to the Members in proportion to their Percentage Interests.
(d) Member Nonrecourse Deductions. Those items of Company loss,
deduction, or Code Section 705(a)(2)(B) expenditures which are attributable to Member
Nonrecourse Debt for any fiscal year or other period shall be specially allocated to the Member
who bears the economic risk of loss with respect to the Member Nonrecourse Debt to which such
items are· attributable in accordance with Regulations Section I. 704-2(i).
(e) Qualified Income Offset. If a Member unexpectedly receives any ,
adjustments, allocations, or distributions described in Regulations Section l .704-
l (b)(2)(ii)(d)(4), (5) or (6), or any other event creates a deficit balance in such Member's Capital
Account in excess of such Member's share of Company Minimum Gain, items of Company
income and gain shall be specially allocated to such Member in an amount and manner sufficient
to eliminate such excess deficit balance as quickly as possible. Any special allocations of items
of income and gain pursuant to this Section 6.3(e) shall be taken into account in computing
subsequent allocations of income and gain pursuant to this ARTICLE 6 so that the net amount of
any item so allocated and the income, gain, and losses allocated to each Member pursuant to this
Section 6.3(e) to the extent possible, shall be equal to the net amount that would have been
allocated to each such Member pursuant to the provisions of this ARTICLE 6 if such unexpected
adjustments, allocations, or distributions had not occurred.
(f) Payments to Members. Payments made pursuant to this
Agreement, to the extent made to Members, may be treated for income tax purposes as payments
to one who is not a Member under Section 707(a) of the Code or as guaranteed payments under
Section 707(c) of the Code, as determined by the Manager after consultation with the Company's
outside accountants or tax counsel.
6.4 Code 704(c) Allocations. Notwithstanding any other provision in this
Article 6, in accordance with Code Section 704(c) and the Regulations promulgated thereunder,
income, gain, loss, and deduction with respect to any property contributed to the capital of the
Compariy, or property that has been revalued pursuant to Section 1. 704-1 (b )(2)(iv)(f) of the
Regulations, shall, solely for tax purposes, be allocated among the Members so as to take
account of any variation between the adjusted basis of such property to the Company for federal
income tax purposes and its fair market value on the date of contribution or revaluation under
any reasonable method selected by the Manager. Allocations pursi.1ant to this Section 6.4 are
solely for purposes of federal, state and local taxes. As such, they shall not affect or in any way
be taken into account in computing a Member's Capital Account or share of profits, losses, or
other items of distributions pursuant to any provision of this Agreement.
6.5 Compliance with Code Section 704(b). It is the intent of the Members that
allocations (including allocations on liquidation) of income, gain and loss (or items thereof) of the
Company shall be made in a manner that complies with provisions of Section 704(6) of the Code
and the Regulations thereunder and that reflects the Members' interests in the Company as
determined under.Regulations Section I.704-1(b)(3). In furtherance of the foregoing, each Member
authorizes and directs the Manager to allocate income, gain; loss or deduction in a manner that is
SMRH:488409815,8 -17-
inconsistent with any of the other provisions of this Agreement to the extent necessary to comply
with Sections 704(b) of the Code and the Regulations thereunder. The Company and each Member
hereby agree to prepare and file their respective federal income tax returns in a manner consistent
with such allocations.
6.6 Transfers. If there is a change in Members or in the respective holdings of
Economic Interests or in the respective rights or obligations appurtenant to Economic Interests
(caused, for example, by an admission of a new Member), allocations under this ARTICLE 6 for
a Fiscal Year among the Persons who are or were Members shall be made in the manner
determined to be required under the Code or applicable Regulations and, if more than one
method is determined to be permitted, then by the method selected as appropriate by the
Partnership Representative, taking into account both the principles of substantial fairness and
convenience of administration.
6.7 Tax Classification of the Company. It is intended thai the Company be
classified as a partnership for United States federal income tax purposes. Except as approved by
all of the Members, the Company shall not file any election pursuant to Regulation Section
301.7701-3(c) to be treated as an entity other than a partnership.
6.8 Elections by the Company. Except as provided in Section 6.3 hereof,
relating to the tax classification of the Company, the Manager may on behalf of the Company
make, or not make, any tax election provided under the Code, or any provision of state, local or
foreign tax law. All decisions and other matters concerning the computation and allocation of
items of income, gain, loss, deduction and credits among the Members, and accounting
procedures not specifically and expressly provided for by the terms of this Agreement, shall be
determined by the Manager. Any determination made pursuant to this Section 6.8 by a Majority-
in-Interest of the Members shall be conclusive and binding on all Members.
6.9 Election by Members. In the event any Member makes any tax election
that requires the Company to furnish information to such Member to enable such Member to
compute his, her or its own tax liability, or requires the Company to file any tax return or report
with any tax authority, in either case that would not be required in the absence of such election
made by such Member, the Manager may, as a condition to furnishing such information or filing
such return or report, require such Member to pay to the Company any incremental expenses
incurred in connection therewith.
ARTICLE?
MANAGEMENT
7.1 The Manager. The business of the Company shall be managed by the
Manager. The initial Manager of the Company shall be HomeFed, who shall serve until
HomeFed resigns, dissolves or is removed for Cause. In the event there is a vacancy in the office
of a Manager, then a successor Manager shall be elected by a Majority-in-Interest of the
Members, to serve at the discretion of the Members.
7.2 Management Powers. The Manager shall have the general supervision,
direction and control of the business of the Company, and the general powers and duties of
SMRH:488409815.8 -18-
management typically vested in the board of directors and president of a corporation, including
the right to enter into and carry out contracts of a,1 kinds; to employ employees, agents,
consultants and advisors on behalf of the Company; to lend or borrow money and to issue
evidences of indebtedness; to bring and defend actions in law or at equity; to buy, own, manage,
sell, lease, mortgage, pledge or otherwise acquire or dispose of the Company property; provided,
howeve_r, that any amendment to this Agreement which would adversely and disproportionately
impact any Member must be approved by such Member and any Major Decisions must be
approved in accordance with Section 7.3. Without limiting the generality of this Section 7.2, the
Manager shall have the power and authority, subject to the limitations of the Act and the
limitations set forth hereinafter:
(a) To acquire, sell, transfer, exchange, lease or dispose of property, or
any portion thereof, from or to any Person as the Manager may determine;
(b) To borrow money for the Company from a bank, any other lending
institution, a Member, a Manager or any other Person on such terms as the Manager deems
appropriate, and in connection therewith, to hypothecate, encumber and grant security interests
in the assets of the Company to secure repayment of the borrowed sums;
(c) To develop the Project, cause the construction of improvements on
the Real Property and obtain any approvals, permits, licenses or entitlements in connection with
the Project;
(d)
name of the Company;
To hold and own any Company real and personal properties in the
(e) To invest any funds of the Company temporarily (by way of
example but not limitation) in time deposits, short-term governmental obligations, commercial
paper or other investments;
(f) To execute on behalf of the Company all instruments and
documents, including checks, drafts, notes and other negotiable instruments, mortgages or deeds
of trust, security agreements, financing statements, documents providing for the acquisition,
mortgage or disposition of property of the Company, assignments, bills of sale, leases,
partnership agreements, and any other instruments or documents necessary or appropriate, in the
opinion of the Manager, to the business of the Company;
(g) To employ service providers (including contractors, designers,
attorneys, accountants, and other professionals) to perform services for the Company and to
compensate them from Company funds;
(h) To cause the Company to indemnify any Person in accordance
with, and to the fullest extent permitted by, applicable law and this Agreement, and to obtain, for
or on behalf of the Company, any and all types of insurance deemed necessary or advisable by
the Manager in its sole and absolute discretion;
SMRH :488409815,8 -19-
(i) To prepare, execute, file, record, publish and deliver any and all
instruments, documents or statements necessary or convenient to effectuate any and all actions
that the Manager is authorized to take on behalf of the Company;
G) To establish and maintain reserves for such purposes and in such
amounts as the Manager deems appropriate from time to time in the Manager's sole and absolute
discretion;
(k) To endorse checks, drafts, and other evidences of indebtedness
made payable to the order of the Company, but only for the purpose of deposit into the
Company's accounts;
(I) To open and maintain bank accounts in the name of the Company;
(m) To negotiate, enter into, perform, modify, extend, terminate,
amend, waive, renegotiate and/or carry out any contracts and agreements of any kind and nature,
including contracts and agreements with any Member as the Manager deems necessary or
advisable in its sole and absolute discretion;
(n) To sue on, defend, or compromise any and all claims or liabilities
in favor of or against the Company;
(o) To pay, collect, compromise, arbitrate or otherwise adjust or settle
any and all claims or demands of or against the Company, in such amounts and upon such terms
and conditions as the Manager shall determine in its sole and absolute discretion;
(p) To cause the Company to pay or reimburse all costs expenses
incurred on behalf of the Company (all checks, drafts, and other instruments obligating the
Company to pay such costs may be signed on behalf of the Company by the Manager, acting
alone); and
(q) To engage in any kind of activity and perform and carry out
contracts of any kind necessary or proper to, or in connection with or incidental to accomplishing
the purposes of the Company, as may be lawfully carried on or performed by the Company.
7.3 Major Decisions. Notwithstanding any other provision contained in this
Agreement to the contrary, no act shall be taken, sum expended or obligation incurred by the
Company or the Manager on behalf of the Company, in each case without the unanimous
approval of the Members, with respect to any of the matters listed below (each, a "Major
Decision"). The Manager may submit to the Members a request to approve a Major Decision
and shall submit with such request information reasonably necessary to evaluate the Major
Decision ("Request for Approval"). If any Member does not approve any such Major Decision,
the disapproving Member(s) shall provide a reasonably detailed written explanation for such lac)<.
of approval ("Disapproval Notice"). If a Disapproval Notice is not provided within seven (7)
Business Days after a Request for Approval is submitted to the Members, then the Manager
submitting the Request for Approval rriay send a written notice the Members that conspicuously
states that the Major Decision that is the subject of the Request for Approval will be deemed
approved pursuant to this Section unless a Disapproval Notice is provided within five (5)
SMRH:488409815.8 -20-
Business Days after delivery of such written notice. If a Disapproval Notice is not provided
within five (5) Business Days after delivery of such written notice, then the Major Decision that
is the subject of the Request for Approval will be deemed approved by the Members.
(a) The acquisition of any additional real property unrelated to the
Project;
(b) The merger, consolidation, dissolution or liquidation of the
Company, the formation of a subsidiary of the Company, or entering into any business
combination, joint venture or partnership involving the Company;
(c) Except as provided in Section 4.6, the payment of fees,
commissions or other compensation to the Manager, any Member or an Affiliate of the Manager
or any Member or entering into or consummating any transaction or arrangement with the
Manager, any Member or any Affiliate of the Manager or any Member (including loans to the
Manager, any Member or any Affiliate) other than fees, commissions or other compensation that
do not exceed the fees, commissions or other compensation that would be payable to an
independent responsible third party that is willing to perform the applicable services or provide
the applicable goods and payments of any Default Contribution;
(d) Except as provided in Article 9, the transfer of a Membership
Interest in the Company; or
(e) Admission of a new Member or a substitute Member pursuant to
Article 10.
7 .4 Authorized Officers.
7.4.1 Appointment of Authorized Officers. The Manager may, in its
sole discretion and at any time, appoint one or more officers of the Company (each, an
"Authorized Officer"). The Authorized Officers will serve at the pleasure of the Manager. Any
individual may hold any number of offices. The Authorized Officers will exercise such powers
and perform such duties as specified in this Agreement and as shall be determined from time to
time by the Manager.
7.4.2 Removal and Resignation of Authorized Officers. Any Authorized
Officer may be removed, either with or without cause, by the Manager, at any time. Any
Authorized Officer may resign at any time by giving written notice to the Manager. Any such
resignation will take effect on the date of the receipt of that notice or at any later time specified
in the notice. Any resignation is without prejudice to the rights, if any, of the Company under
any contract to which the resigning Authorized Officer is a party.
7.4.3 Signing Authority of .Chief Executive Officer and President.
Subject to any restrictions imposed by the Manager, either of the Chief Executive Officer or the
President, acting alone, is authorized to endorse checks, drafts, and other evidences of
indebtedness made payable to the order of the Company, but only for the purpose of deposit into
the Company's accounts. Either of the Chief Executive Officer or President, acting alone, shall
have the authority to make all decisions and perform all acts and activities that such officer
SMRH:48840?815.8 ::-21-
deems necessary or appropriate to the business of the Company, including the execution of
contracts and obligations on behalf of the Company, including contracts relating to the
acquisition or disposition ofreal estate or other investment activities of the Company.
7 .5 Bank Accounts. The funds of the Company shall be deposited in such
bank. account or accounts, or invested in such interest-bearing or non-interest bearing
investments, as shall be designated by the Manager. Company funds shall be separately
identifiable from and not commingled with those of any other Person.
7.6 Reliance Upon Advisors. The Manager may rely and shall be protected in
acting, or refraining from acting, upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, bond, debenture, or other paper or document believed by it
in good faith to be genuine and reasonable and to have been signed or presented by the proper
party or parties. The Manager may consult with legal counsel, accountants~ appraisers,
management consultants, investment bankers, architects, engineers, environmental consultants
and other consultants and advisers selected by it, and any act taken or omitted to be taken in
reliance in good faith upon the opinion of such Persons as to matters that the Manager reasonably
believes to be within such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with such opinion. The
Manager shall have the right, in respect of any of its powers or obligations hereunder, to act
through any of i~s duly authorized officers. Each such authorized officer shall have full power
and authority to do and perform all and every act and duty which is permitted or required to be
done by the Manager hereunder.
7.7 Devotio1i of Tirne; Nd1i.'.'"Exclusivity, Neither the Manager nor any officer
is obligated to devote all of its time or business efforts to the affairs of the Company, but shall
devote such time, effort and skill as it deems appropriate for the operation of the Company. The
Manager and any officer may engage or possess an interest in, or be employed by, any business
venture of any nature or description, including in or by any business, industry or activity similar
to the business in which the Company is in or may be engaged, without any accountability or any
obligation to report the same to the Company.
7.8 Reliance by Third Parties. Notwithstanding anything to the contrary in
this Agreement (but without releasing the Manager for any liability it may have for any breach of
this Agreement), any Person dealing with the Company shall be entitled to assume that the
Manager, acting alone, has full power and authority, without consent or approval of any other
Member or Person, to encumber, sell or otherwise use in any manner any and all asset~ of the
Company and to enter into any contracts on behalf of the Company, and take any and all actions
on behalf of the Company, and such Person shall be entitled to deal with the Manager as if such
Person were the Company's sole party in interest, both legally and beneficially. Each Member
hereby waives' any and all defenses or other remedies which may be available against such
Person to contest, engage or disaffirrr\ any action of the Manager in connection with any such
dealing unless such Person knew at the time the action was taken that the Manager was acting
without requisite authority. In no event shall any Person dealing with the Manager or its
representatives be obligated to ascertain that the terms of this Agreement have been complied
with or to inquire into the necessity or expedience of any act or action of the Manager or its
representatives. Each and every certificate, document or other instrument executed on behalf of
SMRH:488409815.8 -22-
the Company by Manager or its representatives shall be conclusive evidence in favor of any and
every Person relying thereon or claiming thereunder that: (i) at the time of the execution and
delivery of such certificate, document or instrument, this Agreement was in full force and effect;
(ii) the Person executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Company; and (iii) such certificate,
document or instrument was duly executed and delivered in accordance with the terms and
provisions of this Agreement and is binding upon the Company.
7.9 Limited Liability. Neither the Manager nor any officer shall be personally
liable under any judgment of a court, or in any other manner, for any debt, obligation or liability
of the Company, whether that liability or obligation arises in contract, tort or otherwise, solely by
reason of being a Manager or an officer, provided that such Person acted in good faith and in a
manner that was believed to be in the best interests of the Company. Neither the Manager nor
any officer shall be liable to the Company or to any Member for any loss or damage sustained by
the Company or any Member, unless the loss or damage shall have been the result of fraud,
deceit, gross negligence, reckless or intentional misconduct, or a knowing violation of law by the
Manager or officer.
7.10 Limitation on Members' Authority. No Member shall be an agent of the
Company solely by virtue of being a Member; and no Member shall have authority to act for or
on behalf of the Company solely by virtue of being a Member, except as may be otherwise
expressly provided in this Agreement. Except as required by the Act or as expressly set forth in
this Agreement, no Member shall have any right to vote on any matter.
7.11 Sale Election. After Final Approval of the Entitlements is obtained,
HomeFed will have the right to either proceed with development of the Project or elect to sell the
Project to a third party ("Sale Election"). If HomeFed makes the Sale Election, McKellar
McGowan will have the right to submit to HomeFed within twenty (20) days after HomeFed
makes the Sale Election an offer to acquire HomeFed's Membership Interest ("Purchase Offer")
based on McKellar McGowan's assessment of the fair market value of the assets of the Company
net of reasonable and customary costs of sale ("Stated Value"). If HomeFed accepts the
Purchase Offer, then HomeFed will be obligated to sell its Membership Interest to McKellar
McGowan, and McKellar McGowan will be obligated to purchase such Membership Interest
from HomeFed, for a purchase price ("Purchase Price") equal to the amount that would be
distributed to HomeFed pursuant to Section 12.2 based on a sale of all of the assets of the
Company for the Stated Value, less the amount of any Default Amount owed by HomeFed. The
transaction for the purchase and sa.le ofHomeFed's Membership Interest to McKellar McGowan
shall be consummated within ninety (90) days after acceptance of the Purchase Offer. HomeFed
shall thereupon withdraw as a Member of the Company and transfer to McKellar McGowan all
of its Membership Interest. If HomeFed does not elect to accept the Purchase Offer, then
HomeFed will be authorized to cause the Company to sell the assets of the Company on such
terms and conditions as HomeFed determines so long as the purchase price exceeds the Stated
Value.
7.12 Waiver of Fiduciary Duties. It is understood and agreed that the
obligations of Manager under this Agreement does not make the Manager a fiduciary of the
Members and the Manager shall have no implied duties or obligations to the Members
SMRH:488409815.8 -23-
hereunder, including, without limitation, any fiduciary duties or obligations, it being further
understood that the duties and obligations of the Manager to the Members under this Agreement
shall only be those duties and obligations as expressly set forth in this Agreement. The Members
hereby expressly waive any such fiduciary duties to the fuilest extent permitted by law.
ARTICLE 8
BOOKS AND RECORDS; PARTNERSHIP REPRESENTATIVE
8.1 Books of Account. There shall be maintained and kept, at all times during
the continuation of the Company: proper and usual books of account which shall accurately
reflect the condition of the Company and shall account for all matters concerning the
management thereof, which books shall be maintained and kept at the principal office of the
Company or at such other place or places as the Manager may from time to time determine. The
Company's books and records shall be maintained on the basis selected by the Manager.
8.2 Fiscal Year. The fiscal year of the Company shall end on December 31 of
each year.
8.3 Partnership Representative. HomeFed is designated as the "tax matters
partner" for the Company pursuant to Section 6231 (a)(7) of the Code prior to its amendment by
the Partnership Tax Audit Rules for purposes of state and local law that do not conform to the
Partnership Tax Audit Rules, and as the "partnership representative" of the Company (in each
case, the "Partnership Representative") under Section 6223(a) of the Partnership Tax Audit
Rules and in such capacity shall have the right to make such elections as the Partnership
Representative deems appropriate and in the best interest of the Company. The Partnership
Representative shall have the power, authority and discretion, on behalf of the Company, to enter
into any consent order, settlement, negotiation, stipulations or the like with the Internal Revenue
Service in connection with any dispute or controversy concerning the Company's treatment of
items for purposes of federal income tax, including (i) taking any action on behalf of the
Company that must or may be taken by it under the provisions of Subchapter C of Chapter 63 of
the Code as in effect with respect to partnership taxable years beginning on after December 31,
2017, and any corresponding provisions of state, local or foreign law (collectively the
"Partnership Tax Audit Rules"), (ii) filing a request for an administrative adjustment on behalf
of the Company pursuant to Partnership Tax Audit Rules (including pursuant to Section 6227 of
the Partnership Tax Audit Rules), (iii) making any election or taking any other action to exclude
or exempt the Company from application of Partnership Tax Audit Rules (including an election
pursuant to Section 6221(b) of the Partnership Tax Audit Rules or otherwise), (iv) making any
election or taking any other action to exclude or exempt the Company from liability with respect
to any determination of any governmental authority under Partnership Tax Audit Rules
(including electing the application of Section 6226(a) of the Partnership Tax Audit Rules with
respect to any partnership adjustment or imputed underpayment), (v) filing any petition or taking
any similar action and conducting any administrative or judicial review or appeal with respect to
any partnership adjustment or similar determination of any governmental authority with respect
to any tax (including filing a petition pursuant to Section 6234 of the Partnership Tax Audit
Rules), and (vi) taking any action to collect from any Member its liability for any imputed
underpayment or similar liability for tax under this Agreement or any Partnership Tax Audit
Rules (including Sections 6232 and 6233ofthe Partnership Tax Audit Rules).
SMRH:488409815.8 -24-
ARTICLE9
TRANSFER OF INTERESTS
. 9.1 Restrictions.:on Transfer. The Members do not want Membership Interests
to be made generally available to persons other than the present Members. Therefore, the parties
agree that no Member will Transfer any of its Membership Interest except in accordance with the
terms of this ARTICLE 9 or the prior written consent of the Manager. No attempted Transfer of
any Membership Interest not in accordance with the terms of this ARTICLE 9 or with the prior
written consent of the Manager shall be valid or reflected on the Company's books.
9.2 Rights of Assignee. Notwithstanding the provisions of Section 9.1, no
person to whom a Membership Interest is properly transferred, and who is not already a.Member,
shall be substituted as a new Member in place of the transferring Member except as provided
under ARTICLE 10. '
9.3 Withdrawal of Members. A Member may not withdraw from the
Company except upon the approval of the Manager or as provided in Section 4.3(b) or Section
7.11. Withdrawal will not release a Member from any obligations and liabilities under this
Agreement accrued or incurred before the effective date of withdrawal. A withdrawing Member
will divest the Member's entire Membership Interest before the effective date of withdrawal in
accordance with and subject to the provisions of this ARTICLE 9.
ARTICLE 10
ADMISSION OF NEW MEMBERS; AMENDMENTS
IO.I Admission of Members. New members may be admitted to the Company
only upon the unanimous written consent of the Manager and the Members, and shall be
admitted upon such terms and conditions as the Manager may determine, consistent with this
Agreement, the Certificate and any applicable provision of law or rule of a governmental agency
or self-regulating organization which has jurisdiction over the business of the Company.
10.2 Amendments. This Agreement and the Certificate may not be amended in
whole or in part except upon the written consent of the Manager; provided, however, that any
amendment to this Agreement which would adversely and disproportionately impact any
Member must be approved by such Member.
ARTICLE 11
INDEMNIFICATION
11.1 Indemnification.
(a) To the fullest extent permitted by applicable law, the Company
hereby agrees to indemnity, defend and hold harmless any Member and Manager and may
indemnify any Person who was or is a party or is threatened to be made a party to any threatened,
pending or completed action, suit or proceeding by reason of the fact that he, she or it is or was a
Member, Manager, officer, employee or other agent of the Company or that, being or having
been such a Member, Manager, officer, employee or agent, he, she or it is or was serving at the
request of the. Company as a manager, director, officer, employee or other agent of another
SMRH:488409815.8 -25-
limited liability company, corporation, partnership, joint venture, trust or other enterprise to the
fullest extent permitted by Applicable Law in effect on the date hereof and to such greater extent
as Applicable Law may hereafter from time to time permit (each, an "Indemnified Person");
provided, that (unless the Manager otherwise consents) no Indemnified Person shall be
indemnified for any expenses, liabilities and losses to the extent attributable to such Indemnified
Person's or its Affiliates' intentional fraud, intentional misrepresentation, willful misconduct,
gross negligence, misappropriation of funds, or for any present or future breaches of any
representations or warranties by such Indemnified Person or its Affiliates, employees, agents or
representatives contained herein or in any other agreement with the Company. Expenses,
including attorneys' fees and expenses, incurred by any such Indemnified Person in defending a
proceeding shall be paid promptly by the Company in advance of the final disposition of such
proceeding, including any appeal therefrom, upon receipt of an undertaking by or on behalf of
such Indemnified Person to repay such amount if it shall ultimately be determined that such
Indemnified Person is not entitled to be indemnified by the Company. The parties hereto
acknowledge and agree that (i) the preceding sentence runs expressly to the benefit of each
Manager and officer of the Company during and after their terms as such, and shall, except in the
event Applicable Law changes such that the provisions of this Section 11. l(a) are prohibited by
Applicable Law or inconsistent with Applicable Law, in which event they may be amended to
the extent required for them to be consistent with and in conformity with Applicable Law
consistent with the principles set forth in this section, not be amended, waived or modified in a
manner materially adverse to such Persons without the express written consent of such Persons,
including any such Persons who have ceased to be a Manager or officer of the Company, and (ii)
any Person who has served as a Manager or officer of the Company is an express third party
beneficiary of this Agreement for purposes of this Section 11.l(a).
(b) The right to indemnification and the advancement of expenses
conferred in this Section 11.1 shall not be exclusive of any other right which any Person may
have or hereafter acquire under any statute, agreement, law or otherwise.
(c) The Company may maintain insurance, at its expense, to protect
any Indemnified Person against any expense, liability or loss relating to the Company or its
business whether or not the Company would have the power to indemnify such Indemnified
Person against such expense, liability or loss under the provisions of this Section 11. 1.
(d) Notwithstanding· anything contained herein to the contrary
(including in this Section 11.1 ), any indemnity by the Company relating to the matters covered in
this Section 11.1 shall be provided out of and to the extent of Company assets only, and neither
the Manager thereof nor any other Member (unless such Member otherwise agrees in writing or
is found in a final decision by a court of competent jurisdiction to have personal liability on
account thereof) shall have personal liability on account thereof or shall be required to make
additional Capital Contributions to help satisfy such indemnity of the Company (except as
expressly provided herein).
(e) If this Section 11.1 or any portion hereof shall be invalidated on
any ground by any court of competent jurisdiction, then the Company shall nevertheless
indemnify, defend and hold harmless each Indemnified Person -pursuant to this Section 11.1 to
SMRH :488409815.8 -26-
the fullest extent permitted by any applicable portion of this Section 11.1 that shall not have been
invalidated and to the fullest extent permitted by Applicable Law.
11.2 Indemnification of HomeFed by McKellar McGowan. If the Company
proceeds with the construction of the Project, as consideration to HomeFed to proceed with such
construction and consistent with McKellar McGowan's obligations to oversee the construction
and sale of the Project as set forth in the Development Responsibilities, then (i) McKellar
McGowan will arrange for the Company to obtain an OCIP acceptable to the Members and the
Manager, (ii) McKellar McGowan will provide an indemnity acceptable to HomeFed in favor of
the Company, HomeFed and HomeFed 's Affiliates and other related parties for claims relating to
design or construction defects that are not covered by the OCIP ("Indemnification
Obligations") and (iii) the Company will provide for a warranty reserve and warranty program
acceptable to the Members and the Manager.
11.3 Tax Indemnification. Unless otherwise agreed in writing by the Manager,
each Member hereby indemnifies and holds harmless the other Members against any taxes
(including, but not limited to, withholding taxes imposed under Section 1446 of the Code or
otherwise) imposed upon (i) a sale or other transfer by such Member of its Interests or (ii) the
income of or allocations or distributions to such Member, as well as interest, penalties, or
additions to tax with respect thereto and additional losses, claims, damages, or liabilities arising
therefrom or incident thereto. A Member's obligation to pay or indemnify for a tax (and related
interest and penalties) shall survive the Member selling or otherwise disposing of its Interest and
termination, dissolution, liquidation, or winding up of the Company.
ARTICLE 12
DISSOLUTION OF THE COMPANY
12.1 Events Causing Dissolution. The Company shall be dissolved on the
earliest of the following events:
(a) The unanimous agreement of the Members to dissolve;
(b) The entry of a decree of judicial dissolution of the Company under
Section 18-802 of the Act;
(c) The sale or liquidation of substantially all the assets of the
Company; or
( d) As otherwise provided by the Act.
12.2 Application of Company Assets. The assets of the Company on winding-
up shall be applied in the following order:
(a) First, to the expenses of the winding-up, liquidation and dissolu-
tion;
SMRH:488409815.8 -27-
(b) Second, to creditors (including Members, in their capacity as
creditors), in order of priority as provided by law;
(c) Third, to the creation of reserves for any contingent or unforeseen
liabilities or obligations of the Company as determined by the Manager; and
(d) Thereafter, to and among the Members, in accordance with the
provisions of Sections 5.l(a), (b), (c) and (d). Such liquidating distributions to the Members
shall be made by the end ofthe Companis Fiscal Year in which the Company is liquidated or, if
later, within ninety (90) days after the date of such liquidation.
12.3 Distributions in Kind. Any non-cash asset distributed to one or more
Members shall first be valued at its fair market value to determine the Profit or Loss that would
have resulted if such asset were sold for such value. Such Profit or Loss shall then be allocated
pursuant to ARTICLE 6, and the Members' Capital Accounts shall be adjusted to reflect such
allocations.
12.4 Negative Capital Account Balances. If any Member has a deficit balance
in his, her or its Capital Account (after giving effect to all contributions, distributions and
allocations for all Fiscal Years, including the Fiscal Year during which such liquidation occurs),
such Member shall have no obligation to make any contribution to the capital of the Company
with respect to such deficit, and such deficit shall not be considered a debt owed to the Company
or to any other Person for any purpose whats9ever.
12.5 No Personal Liabilib'., No Member shall be personally liable for any
debts, liabilities or obligations of the Company, whether to the Company, any Member or to the
creditors of the Company, beyond the amount contributed by such Member to the capital of the
Company, such Member's share of the accumulated but undistributed profits of the Company, if
any, and the amount of any distribution (including the return of any Capital Contribution) made
to such Member required to be returned to the Company pursuant to this Agreement or under the
Act; and the Manager shall not be personally liable for any debts, liabilities or obligations of the
Company, whether to the Company, any Member or to the creditors of the Company. Each
Member shall look solely to the assets of the Company for all distributions with respect to the
Company and for the return of his, her or its Capital Contributions and shall have no recourse
therefore against any other Member or Manager. The Members shall not have any right to
demand or receive property other than cash upon dissolution and termination of the Company or
to demand the return of their Capital Contributions to the Company prior to dissolution and
termination of the Company.
ARTICLE 13
MISCELLANEOUS
13.1 Counsel to the Company. Counsel to the Company may also be counsel to
any Member or Manager, or any Affiliate of a Member or Manager. Sheppard, Mullin, Richter
& Hampton, LLP ("Company Counsel") was retained by HomeFed, in its capacity as the
Manager and a Member hereof, in connection with the formation and organization of the
Company, including the preparation of this Agreement, and in such capacity Company Counsel
SMRH:488409815.8 -28-
has provided legal services solely to HomeFed and its Affiliates. Company Counsel has not
represented any other Member in connection with the formation or capitalization of the
Company, the management, operations or business of the Company or this Agreement. The
Company has initially selected Company Counsel as legal counsel to the Company following its
formation. McKellar McGowan hereby consents to such representation. The fact that Company
Counsel may or does represent the Company in the future will not create any attorney-client
relationship between any McKellar McGowan or any other Member and Company Counsel, nor
will it create any duties owed by Company Counsel to McKellar McGowan or any other Member
individually. McKellar McGowan and any other Member acknowledges that Company Counsel
does not represent any McKellar McGowan or any other Member in the absence of a clear and
explicit written agreement to such effect between McKellar McGowan or any other Member and
Company Counsel, and that in the absence of any such written agreement Company Counsel
shall owe no duties directly to McKellar McGowan or any other Member. The Manager or any
officer of the Company may execute on behalf of the Company and the Memqers any consent to
the representation of the Company that counsel may request pursuant to the Delaware Rules of
Professional Conduct or similar rules in any other jurisdiction ("Rules"). If any Dispute arises
between any Members and the Company, or between any Members or the Company, on the one
hand, and a Member or Manager (or Affiliate of a Member or Manager) that Company Counsel
represents, on the other hand, then each Member agrees that Company Counsel may represent
either the Company or such Member or Manager (or its Affiliate), or both, in any such dispute or
controversy to the extent permitted by the Rules, and each Member hereby consents to such
representation.
13.2 Entire Agreement. Except as herein provided, this Agreement constitutes
the entire agreement among the parties relating to the subject matter hereo£ It supersedes any
prior agreement or understandings between them relating to the subject matter hereof, and it may
not be modified or amended in any manner other than as set forth herein.
13 .3 Parties in Interest. Except as expressly provided in the Act, nothing in this
Agreement shall confer any rights or remedies under or by reason of this Agreement on any
Persons other than the Members and their respective successors and a~signs nor shall anything in
this Agreement relieve or discharge the obligation or liability of any third person to any party to
this Agreement, nor shall any provision give any third person any right of subrogation or action
over or against any party to this Agreement.
13.4 Governing Law. This Agreement and any claim, controversy or dispute
arising under or related to the Agreement, the relationship of the parties, and/or the interpretation
and enforcement of the rights and duties of the parties, including disputes relating in any way to
(a) the interpretation, validity, enforceability, arbitrability or performance of this Agreement, or
the transactions contemplated hereby; or (b) the governance, operation or business of the
Company, including (i) any derivative action or proceeding brought on behalf of the Company,
(ii) any action asserting a claim arising pursuant to any provision of the Act, (iii) any action
asserting a claim of breach of a fiduciary duty owed by a manager, member, officer or other
employee or agent of the Company to the Company or the Members of the Company, or (iv) any
action asserting a claim governed by the internal affairs doctrine (each a "Dispute") will be
governed by the laws of the State of Delaware as applied to agreements among Delaware
SMRH:488409815.8 -29-
residents entered into and to be performed entirely within Delaware, without regard to any
principles of conflicts of law.
13.5 Jurisdiction; Venue; Enforcement of Award. The parties c_onsent and
submit to the exclusive personal jurisdiction and sole venue of the state or federal courts located
within the state of Delaware to hear and determine any Disputes. Any person or entity signing
this Agreement, purchasing or otherwise acquiring a membership interest or interest held as a
transferee of the Company shall be deemed to have notice of and to consent to the provisions of
this Section 13.5 of this Agreement. .
13.6 Successors and Assigns. Except as herein otherwise specifically provided,
this Agreement shall be binding upon and inure to the benefit of the parties and their legal
representatives, heirs, administrators, executors, successors and assigns.
13.7 Headings; Pronouns. Captions contained in this Agreement are inserted
only as a matter of convenience and in no way define, limit or extend the scope or intent of this
Agreement or any provision thereof. All pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular or plural, as the identity of the Person may require in the context
thereof.
13.8 Severability. Whenever possible, each provision of this Agreement shall
be interpreted in such manner as to be effective and valid under Applicable Law, but if any
provision of this Agreement, or the application of such provision to any Person or circumstances
shall be held invalid, the remainder of this Agreement, or the application of such provision to
Persons or circumstances other than those to which it is held invalid, shall not be affected hereby.
13.9 Interpretation. In the event any claim is made by any Member relating to
any conflict, omission or ambiguity in this Agreement, no presumption or burden of proof or
persuasion shall be implied by virtue of the fact that this Agreement was prepared by or at the
request of a particular Member or its counsel.
13 .10 Attorneys' Fees. In the event that any Dispute between the Company and
the Members or among the Members should result in litigation, judicial reference proceeding or
arbitration, the prevailing party in such Dispute shall be entitled to recover from the other party
all reasonable fees, costs and expenses of enforcing any right of the prevailing party, including
reasonable attorneys' fees and expenses, all of which shall be deemed to have accrued upon the
commencement of such action and shall be paid whether or not such action is prosecuted to
judgment. Any judgment or order entered in such action shall contain a specific provision
providing for the recovery of attorney fees and costs incurred in enforcing such judgment and an
award of prejudgment interest from the date of the breach at the maximum rate allowed by law.
For the purposes of this Section 13.10: (a) "attorney fees" shall include fees incurred in the
following: (1) post judgment motions; (2) contempt proceedings; (3) garnishment, levy, and
debtor and third party examinations; ( 4) discovery; and (5) bankruptcy litigation and
(b) "prevailing party" means the party who is determined in the proceeding to have prevailed or
who prevails by dismissal, default or otherwise. •
SMRH:488409815.8 -30-
13.11 Dispute Resolution.
(a) Any Dispute shall first be referred to the president or chief
executive officer of HomeFed and the manager, president or chief executive officer of McKellar
McGowan who shall, within fifteen (15) business days after receipt of a written referral of a
Dispute, meet to discuss the Dispute and attempt in good faith to resolve it. If such parties are
unable for any reason to resolve a Dispute within twenty (20) business days, then, upon the
written request of any Member (a "Mediation Request"), the Members shall submit the Dispute
to non-binding mediation in accordance with the then-prevailing rules of the Judicial Arbitration
and Mediations Services ("JAMS"). The non-binding mediation shall be held in San Diego,
California. The Members shall have twenty (20) days from receipt of a Mediation Request to
agree on a mediator. If no mediator has been agreed upon within twenty (20) days ofreceipt of a
Mediation Request, then any Member may request (on written notice to the other Member), that
JAMS appoint a mediator in accordance with the rules of JAMS. The mediation shall last no
longer than twenty (20) days following the appointment of the mediator unless otherwise
mutually agreed by the Members. All mediation shall be confidential and shall be treated as
compromise and settlement negotiations, and no oral or documentary representations made by
the Members during such mediation shall be admissible for any purpose in any subsequent
proceedings. Neither Member shall disclose or permit the disclosure of any information about
the evidence adduced or the documents produced by the other Member in the mediation
proceedings or about the existence, contents or results of the mediation award without the prior
written consent of the other Member, except in the course of a judicial or regulatory proceeding
or as may be required by law or requested by a governmental authority. Before making any
disclosure permitted by the preceding sentence, the Member intending to make such disclosure
shall give the other party a reasonable opportunity to protect its interests.
(b) If the Members are unable to resolve the Dispute pursuant to non-
binding mediation as provided in Section 13.1 l(a), then the Dispute shall be determined by
litigation.
(c) Notwithstanding anything else in this Section to the contrary, or
any other provision set forth in this Agreement, in the event of a breach or threatened breach of
this Agreement, any party shall be entitled to pursue such injunctive and other equitable relief as
it deems necessary under the circumstances, including through any court or judicial proceeding.
13.12 Exhibits. Exhibits attached to this Agreement are incorporated and shall
be treated as if set forth herein.
13.13 Counterparts. This Agreement may be executed in multiple counterparts,
each of which shall be deemed an original but all of which shall constitute one and the same
instrument.
13 .14 Electronic Signatures and Records. Each party acknowledges that this
Agreement is an "electronic record'' for purposes of E-Sign and any state law that is not
preempted by E-Sign, and that a manual signature of such party affixed to or contained in this
Agreement transmitted by facsimile or email constitutes an electronic signature for purposes of
E-Sign and any state law that is not preempted by E-Sign. Without limiting the generality of the
SMRH:488409815.8 • -31-
foregoing, each party agrees: (a) not to contest the validity or enforceability of this Agreement
under the provisions of any Applicable Law relating to whether certain agreements are to be in
writing or signed by_ the party to be bound thereby; (b) that this Agreement, if introduced as
evidence on paper in any judicial, arbitration, mediation or administrative proceedings, will be
admissible as between the parties to the same extent and under the same conditions as other
business records originated and maintained in documentary form; and (c) that it will not contest
the admissibility of a copy of this Agreement under either the business records exception to the
hearsay rule or the best evidence rule on the basis that this Agreement was not originated or
maintained in documentary form.
13.15 Investment Representations. Each Member hereby represents and
warrants to and agrees with the other Members and the Company as follows:
(a) Such Member is a corporation or limited liability company duly
incorporated or organized, validly existing and in good standing under the laws of its jurisdiction
of incorporation or organization, as applicable. Such Member has full right, power and authority
to execute and deliver this Agreement and to perform each of its obligations hereunder;
(b) All action, corporate or otherwise, on the part of such Member
necessary to authorize the execution and delivery by such Member of this Agreement and the
performance by such Member of its obligations hereunder has been taken, and no further action
on the part of such Member is necessary for such authorization. This Agreement has been duly
authorized, executed and delivered by such Member and (assuming due authorization, execution
and delivery by the other Members), constitutes a legal, valid and binding obligation of such
Member enforceable against such Member in acco\dance with its terms;
(c) Except as otherwise set forth in or contemplated by this Agreement
with respect to the Company, no consent, approval or authorization of, or filing or registration
with, any governmental authority or any other Person ( other than such as have been obtained or
made by such Member) is required to be made or obtained by such Member in connection with
the execution, delivery and performance of this Agreement and the consummation of the
transactions contemplated by this Agreement;
(d) Neither the execution and delivery of this Agreement by such
Member nor the consummation by such Member of the transactions contemplated hereby, nor
compliance by such Member with any of the terms or provisions hereof, will (i) conflict with or
result in a breach of any provision of the certificate of incorporation, by-laws or similar
governing documents of such Member or (ii) assuming the consents, permits, authorizations,
approvals, filings and registrations previously disclosed in writing by such Member to the other
Members are obtained or made (x) violate any law, judgment, order, writ, decree or injunction
applicable to such Member or any of its properties or assets or (y) violate, conflict with, result in
a breach of any provisions of, constitute a default (or an event which, with notice or lapse of
time, or both, would c'onstitute a default) under, result in the termination of, accelerate the
performance required by, or result in a right of termination or acceleration or the creation of any
encumbrance upon any of the properties or assets of such Member under, any of the terms,
conditions or provisions of any note, bond, mortgage, indenture, deed of trust, license, lease,
agreement or other instrument or obligation to which such Member is a party, or by which its
SMRH:488409815.8 -32-
properties or assets may be bound or affected, except, in the case of clause (ii), for such
violations, conflicts, breaches or defauits which, either individually or in tpe aggregate, would
not prevent or materially hinder or delay such Memb~r's ability to consummate the trarisactions
contemplated hereby or perform its obligations hereunder;
(e) There is no litigation pending, or to the best of such Member's
knowledge threatened; against such Member which would prevent such Member from executing
this Agreement and/or complying with its obligations under the Agreement;
(f) Such Member is acquiring its Membership Interest for its own
account for investment purposes only and not with ~ view to or for sale i.n connection with any
distribution of such Membership Interest;
(g) Such Member understands that the issuance of a Membership
Interest thereto has not· been registered or qualified under any federal and state securities laws, in
part based on representations made by such Member, and such Membership Interest cannot be
resold, transferred or oth~rwise disposed of unless it is registered or qualified under the
Securities Act and ail applicable state statutes, or an exemption from registration or qualification
is available therefrom;
(h) Such Member understands that the Company is not obligated· to
register or qualify the Membership Interest for resale under the Securities Act or applicable
federal or state securities laws and that the Company is· not obligated to supply such Member
with information or assistance in complying with any exemption under the Securities Act or
applicable federal or state securities laws;
(i) Such Member, by reason of its business or financial experience,
has the capacity to protect its own interest in corinectiori with the transaction and to evaluate t.he
merits and risks of the proposed investment;
(j) Such Member is financially able to bear the economic risk of the
investment in a Membership Interest for an indefinite period of time and has ~o need for liquidity
in this investment. Furthermore, the financial capacity of such Member is of such a proportion
that the total costs of such Member's investment in a Membership Iriterest is not material when
compared with such Member's total financial capacity; and •
(k) Such Member (i) has received all information that such Member
deems necessary to make an informed investment decision with respect to an investment in a
Membership Interest; (ii) l].as had the unrestriqted opportunity to make such investigation as such
member desires pertaining to the Company and an investment in a Membership Interest and to
verify any information furnished to such Member; and (iii) has had the opportunity to ask
questions of representatives of the Company concerning the Company and such Member1ihip
Interest.
13.16 Additional Representations. McKellar McGowan represents, warrants and
covenants to the Company and to HomeFed as follows:
SMRH:488409815.8 -33-
(a) McKellar McGowan has provided to HomeFed true, correct and
complete copies of all leases (including all amendments and related documents), estoppel
certificates, surveys, reports, studies, site plans, contracts, due diligence materials arid· other
documents and information relating to the Purchase Agreements, the Real Property and the
Project in McKellar McGowan's possession or reasonable control;
(b) Except as set forth in the Purchase Agreements, McKellar
McGowan has not retained • any broker, finder or any other party who may be entitled· to a
commission or fee, and no such. person has acted on its behalf, in connection with the acquisition
of the Real Property or the execution and.delivery of this Agreement;
(c) To McKellar McGowan's actual knowledge, the ·Purchase
Agreements are in full force and effect. There are no side • agreements, modifications,
amendments. or supplements of any kind between McKellar McGowan and Sellers regarding the
Purchase Agreements or the Real Property, either oral or written. McKellar McGpwan has
provided true, correct and complete copies of the Purchase Agreeqients to HomeFed. To the
actual knowledge of Mc.Kellar McGowan, no default or breach exists under the Purchase
Agreements and no condition or circu.mstance exists, which, with the giving of notice or the
passing of time, would constitute a default by Mc Kellar McGowan· or Sellers under the Purchase
Agreements. McKellar McGowan has not and will not assign, pledge, encumber, transfer or
otherwise d.ispose of its rights or obligations under the Pu.rchase Agreements nor entere<,i into any
agreement to assign, pledge, encumber, transfer or otherwise dispose of its rights or obligations
thereunder to any o'ther person. All of McKellar McGowan's representations and warranties
under the Purchase Agreements r~main true and correct and, to McKellar McGowan.'s actual
knowledge, each of the representations and warranties of Sellers under the Purchase Agreements
remains true and correct. McKellar McGowan shall provide copies of any ancl all written notices
of default and all other written notices, documents, correspondence and reports delivered
pursuant to the Purchase Agreements to HomeFed promptly after receipt thereof;
(<;I) To McKellar McGowan's actual knowledge, there are no pending
or threatened suits; actions, arbitrations, legal, administrative or other proceedings, including
eminent domain, condemnation .or assessment district proceedings that affecrthe Real Property
and could materially adversely affect the Purchase Agreements, the Real Property or the Project;
(e) To McKellar McGow~n's actual knowledge, there are no unc.ured
violations of any federal, state or local zoning, buHding, fire, environmental, health and safety
laws and regulations affecting the Real Property; •
(t) Neither McKellar McGowan nor, to McKellar McGowan's actual
knowledge, Sellers, any previous owner of the Real Property or any other person or entity has
ever used, generated, processed, stored, disposed of, released or discharged any Hazardous
Substance on, under, or about the Real Property or transported it to or from the Property ·except
as disclosed in any environmental reports provide to HomeFed by McKellar McGowan.
"Hazardous Substance" means all hazardous or toxic substances, wastes or materials, any
pollutants or contaminates (including asbestos and i;aw materials which include hazardous
constituents, radon and urea formaldehyde), and any other similar substances or materials which
are included or regulated by any local, state, or Federal law~ rule, or regulation pertaining to
SMRH:488409815.8 -34-
environmental regulation, contamination, clean-up or disclosure, including, without limitation,
the Comprehensive Environmental Response Compensation and Liability Act of 1980, the
Superfund Amendments and Reauthorization Act of 1986, the Resource Conservation and
Recovery Act, the Toxic Substances Control Act, the Federal Insecticide, Fungicide and
Rodenticide Act, as amended (collectively, "Environmental Laws");
(g) To the McKellar McGowan's actual knowledge, there are no
contracts, leases (except for the leases described in the Purchase Agreements to the extent such
leases will remain in effect following the closings under the Purchase Agreements), licenses,
instruments, agreements or other rights affecting the Real Property that will be binding on or
otherwise be enforceable against the Company; and
(h) All contractors, subcontractors, and consultants performing any
work on behalf of McKellar McGowan with respect to the Real Property will be paid in full prior
to the Effective Date, and any such payments shall be considered Pre-Formation Project
Expenses to the extent consistent with the Budget.
13.17 Notices. Any notice to be given or to be served upon the Company or any
party hereto in connection with this Agreement must be in writing (which may include facsimile)
and will be deemed to have been given and received when delivered to the address specified by
the party to receive the notice. Any notices, offers, rejections, acceptances, waivers and other
communications required or desired to be given hereunder shall be in writing and deemed to
have been given and received (a) when personally delivered or sent by email with confirmation
of transmission, (b) one (I) business day after being sent by a nationally recognized overnight
courier with guaranteed next day delivery or (c) upon receipt or refusal of delivery after being
mailed by United States certified mail, return receipt requested, postage prepaid. Such notices
will be given to a Member at the address specified in Exhibit "A" hereto. Any party may, at any
time by giving five (5) days' prior written notice to the other Members, designate any other
address in substitution of the foregoing address to which such notice will be given.
13 .18 No Consequential Damages. Except for McKellar McGowan's
Indemnification Obligations under Section 11.2, none of the Members or the Manager (nor any
of their Affiliates or representatives) shall have any liability for any punitive damages, lost
profits, special damages or consequential damages based on any default or alleged default by any
such Member, the Manager or such Affiliates or representatives under this Agreement.
[Signature Page Follows]
SMRH:488409815.8 -35-
IN WITNESS WHEREOF, the Members and the Manager have executed this
Agreement, effective as of the date written above.
SMRH:488409815.8
MANAGER:
HF CV80, LLC, a Delaware limited liability
::~ny~~
Name: Pa ,J. -err---.._
Its: . • _ -• _ •• all __
MEMBERS:
HF CV80, LLC, a Delaware limited liability
JM3 CARLSBAD VILLAGE, L.P., a California
limited partnership
By: --,-------------Name: -----------Its: ------c-=--------
IN WITNESS WHEREOF, the Members and the Manager have executed this
Agreement, effective as of the date written above.
SMRH=488409815.8
MANAGER:
HF CV80, LLC, a Delaware limited liability
company
By: _________ _
Name: -----------1 ts: -------------
MEMBERS:
HF CV80, LLC, a Delaware limited liability
company
By: ________ ~---
Name: -----------Its: ------------
EXHIBIT A
CAPITAL CONTRIBUTION AND ADDRESS OF MEMBERS
AS OF DECEMBER 4, 2018
HomeFed. Corporation
1903 Wright Place, Suite 220
Carlsbad, CA 92008
Attn: Chris Foulger, President
Email: Cfoulger@hfc-ca.com
Fax: (760) 918-8210
Phone: (760) 918-8200
McKellar McGowan Holdings LLC
Attn: Christopher S. McKellar, CEO
888 Prospect St., Suite 330
La Jolla, California 92037
Email: c;hris@mckellarmcgowan.com
Fax: (858) 799-0908
Phone: (858) 342-9725
SMRH:488409815.8
$655,000 80%
$165,454 20%
100%
-Exhibit A-
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SMRH:488409815.8
EXHIBITB
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Alloid•hio Pi.?\ PiM' ••W11, R;o R'M&II m>,,d UnK Per r,&lot !%)of M,K,ll•r M,Gomm LLC 0tM rwo fhtM II ro .. 1 AYlfevt Sqfl 5alH Co,t
Proddel Mia:
Pr<dJctionl>\;ja " 19 l2 " 7a -I I 2 $qu:a,•FNI l,<15 1,721 1,911 9,000 G,000 IJS--t'"f; 1.t9l
So,,foge.toPrico
R.-wwn»: 20!i,110il 10'17.t«l l,ltlltlOO 1,)74,000 A.i~,DOII &',O,DOO 9).2fAO:,O ,.,ss:,so oea.,~ 92.73" msi,.
lluos.lMR.....,. 21l.lll 1.141.m 1,311)1>) l;i?l,8~ 4,/ti.a,Q l."N;,.l21i 97.0<9,822 l.21J,1Zl 1, ~:z !16-133.11'!1,
I f'Tvn--)l.02< 'l!l.02, n.oi, 02• J'l.lU,( l!l.D.2• 3121,~I 3',1™ 23.05 3,1~ 4-211'1,
-Uporodo RooM,y 5#10 SJ!OO 5.l>OII ~JIQO ~.l!'JO um .f(l(IJ))O ~OCl(I 2Y.; 0-<01< 055,.
I GtoHSalMRe.,..,_ w.sss 1,115.lill 1,3Sli221 ,,.,J,!Wl •.~Aid l. .. 2.l!.Q 100.!i-71731 1.2.'17,0,7 742.l2 10000% 137..951',
Coau:
ADIIIIOd Lot CotlJ:
land 8 ""'""i>n 207,663 207.&63 207.66) 207,66l 207,663 207,1183 16,613,000 201,663 112G4 1652'1< 22.1?!. On-&to Imp (wllo,I,) )l,J76 34.315 34,375 3075 34,371i 34,375 2.750,000 34,376 20.lO 2.73ll 3n-,,
0..-ago 63,000 63,000 63,000 &3,000 63,000 63,000 S.010,000 &3,000 37)1 5D1'11 G.91.% Pruporty , •• 6,877 6,817 6,877 6,817 6,877 6,&77 650,198 6,817 406 0,56'!1, 0.7~
TolalF'riohodlolC..,i 311,916 311,916 J11,91S 311,916 311,911 311,916 2-4,96),198 311,915 18011 2481'11 Jd.:23'1
Starting Onct Cot\slrudk)t1 11&.0fl 271,917 313,IXIJ 341,581 1,6:16,959 l,D91,J06 2~,638,967 .l07,987 181.88 2◄.-33.811'11
C006truct.Jon Cotw.:
Of'IKt CoosinKJIOn 1115.1142 271.917 l1lllll 347.581 1.636.Wi I.C6 1,Xll 24,1138,967 307,987 181,88 2450'4 33.IMI"
~~ltJl.don 9,l'i6 9,156 9,156 9,156 9,156 9,16'; 732.SOO 9,156 S.<1 0.1~ 1,00'l
-Upgmdt 6;2S(I 6.250 6.250 6;2S(I fi,.l50 llJ!I) ~.000 6.2S4 369 0&0'11 0,61l'II
flllMAPlft~• ,,soo 4,500 4,500 •.soo <,SL,/ 4,!l)O 360,000 •.soo 266 1136'11 OA9"
ti..-mHV"p 3,125 J,115 J,125 ),125 ~125 l 1I~ 250.DOO l.125 us 0.2S,. O.:M'lo
l)sur-~ 12;571 12.571 12.571 11571 IU'II 12.S'II 1,1115,717 12.671 742 100% 1.38'1,
-e;y,-.. 5,681 S,681 6,681 5,6111 ua1 ~6'1 "64.516 S,681 3,)6 o:m, 0,U,S
-•swSI~ .... 1.11se 7,1158 1,868 7,ast 1.$ 7,'58 ~.824 7,IISl1 <Gal IU~ D.-r""'e"9"""""11 1,"88 1,<18 1,'88 1,"88 ,,<et 1.•ee 119,000 1,4111 088 0,12% 0.16"
-"II~ 1,225 1,225 1.l25 1.m 1)25 1,225 97,9e8 1,225 0,72 0.111!1 0.1J,1,
Lop&~ ),115 3,275 3,175 3,215 ,,, l,27!, ll&2,000 3,275 UJ D.26" 0,36'!',
i7'»<lf-JS,000 36,000 36,000 36.DOO lS,000 35,000 2,«>0,000 :15,000 20,67 2.78" J,8''11
~lnl.ieuF .. H75 7.!175 7,975 7.975 ,.,m 7.915 638,000 7,975 .C.71 1163'11 ll88'11 ---206 206 2116 206 :,x; JOO 16.500 206 11.12 D.02" D.02"_
e,,,,,..""1°'-'"iC..•-6.250 6,250 6,250 6.250
1t~
~J!j) 500,000 6,250 36!) 050'11 0.&.1'11
o..<1 C...~w,oo Cooli,,gon<y 18,710 18,710 18,710 18,710 t8;7IQ 1,496.~ IS,71D 11.06 1.<9'11 2,0S.. -~ ... -625 625 G2S 625 ('JS e; 50,000 625 0,37 D.05'11 11,07'!1,
s.l.$'M<,dd lftllhoa 616 625 6<6 525 621, 6.!S 41.000 626 QJ1 D,D4% 11.06%
Nf'Offl\alloneo.t, GOD 500 500 500 !OD !Ill ~.000 500 O . .lO •·~" 0.05'11
""4xlofon Oun 2,244 2,2'4 2,2,14 ,~, ;.t;l,U 2.24' 179,600 2.24-' 1,33 0.1ft 0.25% --l!.250 6,251) 6,250 6,251) 6,JS(l 6.250 500,000 6.:250 369 0,50'II D.6'!1'11 Warr.vit'jExpe,u 12,!,71 12,571 12,S71 12,511 IZ571 12.~II 1:005.717 12571 7A2 ,._ 1.36"4
~fN/o-iape, 31,1U 37,71◄ 37,71<1 37.714 1.11< li,Tw 3,017,152 37,11< 12.27 100'II .t.1,,i.
Cons~udicn lDan FNW 7,881 1.881 7.887 1,-rT 1,11111 U117 6Jll,9J5 1,881 H6 0:6.l'II 11.87%
~~ ........ 33,8'5 3l,8'5 33,MS Jl,ll<S l.1615 33,1(, 1.701,627 33,ll<S 1999 ,,.,,. 3.71'11
SMRH:488409815.8 Exhibit B-3
Exhibit B·l
~u<l_gcly ,,go_l __ -----A,,~~ -,~ f'( •• , '"fiLiJi .. ".t;il.-Gnll\,l Ut!,t·------Jt•uil p., 11'1ol C'>ilol ~lcl(•II..-M,Gowa11 LLC 011• Two Thr .. I ft TD4el ·-· Sq Ft $Mn c .. 1
T..,.Connu<ionC.,,., 3'1.475 497,350 ~-'" 573,0JO 1.862.392 1.316.7:1!1 42.673_!,92 SJl.420 315.02 424:1% !ie-
Fmhod Lc1s + Cooswtkln 663,390 809.265 860.311 1184.929 2.174.301 1.628.654 67_6ljj_790 645.335 499.22 672,4'11, 92.76ll
GrouProOt -396,036 376,338 50,t,a.6 588,931 2,555.607 2,2ll,69S 32,94-1,!Ml 411.112 213,2(1 321614 451911 c;..,, Proo1Marg;,,(%) -151:119" 3"171'!1. 37.25'1 39.9G'io 5'1.98!1. 57 61'!1. 3275'11 32.75 .. 32.76'11, 3276'11, 32.76'!1.
Olre,clCotta: -7,736 •1..tOS 47.&!il 5U60 1n.5115 137.766 ),~011 4-1.000 25.98 3.-4.8)'11
Cmolo-.iCcJett 6.216 6,286 6.28& 6.286 6~ 6,2.86 502.11&.1 6.286 3.71 ·--0.6/l% Mad~/A,J'tffllflg 1s.m 15,714 15,714 15,714 15,7l4 1$,71' 1~7.147 15,714 9.21 1.25% 1.72,. --------·---------------Tolallln<IC..b 3,nl! 63,405 66,55.l T.l,8(,(] 1%.&IJ/, 159,766 5,200,015 66,000 38.98 5.25% 124'!1. ---------------------Tob11Co5ta 68).120 872.670 919,!0 958.189 2J6?11191 1.768,420 7290&,""6 911.336 53&20 7249'4 100.C)ll'4
.._,Pront -12S,7T3 312,933 435,2911 515,070 :2.1100,1122 2,0Sl,930 27,56',927 :l-45,812 21M l2 2751% 37.95'11,
-·--·-=,. ... ,.. ••• -·-·--___ ,__ ---__ 'O_ .. _.,,. -·-··-·--· Profil~n(%J -166.4<!1. 26-32.12'1 3496'11. !.0,'3% SH6'11. 2/Sl1' 2761'11, 2751" 27,51!1 2751'11,
Plan Tottla:
PbnS-TOlal 2,830,900 23.712.0!i7 44,72:1,482 20.634,031 4,629,9" 3,842.350 I00,571.7JJ ~~n...i --4,683,50.t li2S<l,6!il ... 364,1145 7.110.9112 2,'6().022 2.ll!il.930 77,664.927
Pl-ofllAe:
(%)OIC.... "'2.33'11, 35.ll61<. ◄7.321' 5.!721' 1lll80'!I. il415!1 ll!!Sl>
CIIJof S.lu -166.•4'11, 2fi 39'4 32 12'!1. 3496'!1. 6093'!1. £,3•6'4 2151'!1.
Doti•• Pe, Sq Ft:
S.-sPl'ic;e •0l.38 79J.05 7117.46 77125 536,66 640,39 7◄2◄2 0..-eaCnwcton 161.88 18188 161.1111 181k88 181.1111 181118 1811111
PfMlW!:iAJ:
\'\)•IT""'11.irll• 1.3.7~ 2500% ◄1.25'1 17.50'I US'I I 25'1 100.00'II, ('\)olTwl--1693'-22,51'!1. 61.-2607ll ··-H2"' 10000'!I.
Ma,buun0el11n<.-t: ,;.,..,eo,,~lnll 63.046l65 788,006 46141 6269% 86ffll. Standu>III, 36,822,146 460,277 771.82 J6.G1% 60.S1'!1. I TQC;I/E'l"'Y 2G'A,<,$l1 327,808 1935'1 261)8'11, 35,97'!1.
841«•Lo.n.:
NI'! Pm.Mt \'O,U. ll!Xl!i,~ 400,115 23619 31~ 4390'11,
lntlwn:IIRat.olR!Nl,n 2J'.lli'!'. LMd-V-<t,612.20$ 6117.Tte 3503 46.]5'11, 6569!1
Alter LMt19: N«P,-,1V.,. 26,610,W 368,163 2111l5 2651'1 J'}.331'
frllmUll'b• _!! n.wrn 30.27'11,
SMRH:488409815.8 Exhibit B-4
Exhibit Bel
ProJoct Summary
PR nan I
~ Pneef =~ MSC Una lct>I SqFI SqFI Purchaso A&D Con,oouct, Totlls FiNlnco ------------· ---------~ ----II 1!)5J)OO 2,2S,ODO 638 321.32 1.1~,t«.1Am1 42,062,JS1
PbnOno :IQ IJl97.000 t,!M0,00:, f,A95 733,78 M.,.8,IOubt 36,822,148 36,822.1◄8
Plan Two 3J 1,l60,000 ~•.seo.ooo 1,721 732.13 Plan nv .. " u1•,ooo l?,236,00:, 1,911 719.00 "-F ... t(IJ 630,935 6J0,935
Rel:Mll I ~.~['.9,000 ~~::: 9,000 511 00 l-f•u('i) 1S0% 1.50%
Rolailll I 3.66(1.000 ,,ooo 60833
lmrtilftotll"'I 600% 600%
Jn1...-.1P>id 2.707,627 2.707.627
Jnttffil llr,,"5 2.707.627 411f/.Q1 Noo➔r< °'~"" 38.903,956 ~::r: -----------Tobi Oriti'! ◄1,611.583 Sld>-Totalo 80 1,165,150 93,;!60,000 f~,A65 68844 , .. o1R"f),lid ◄1,611,583 ,lf,611.G&J
Price-◄7,313 3,7119,822 ltnl«IR~l 7.58'.6 7,5,TV,
PremlYne l!J,!)loi ),121,911 \.oil,,.,.Vol!'I') '182%
Opliol1e 1.wn-... C..1('11,I 57 69'1
Model UPIJG RKOYe,y 6,000 400,000
Mist. Safn ReWllle ----GrotoSoloo-US1.1"7 100,571,rn
Jc~ I ~ Vil1no1A LO.an r.JRH ~ MGK•L.'W MtG'owan ln"#MIOf P'KIW -------------TotalNo<Cashf'°" :12,09'),206 :i,,i;10 . .,u T ot>I Eq,o;iy Ad,on-:od l.5it 125 2l;5,S:U,11
MaxNotC..tOul,bndlng 6Q,465,472 63.~ve;
(!IJo!TOIIIEqlJily s-,01'1(,
lnl«fflll Alie• d R""" (%) 2).)N J0.27!1 (%) o! Taul Cool 2.16!1 3381'11 ,i.,~v.i.. l2,ll09,20!i 2B,670,6-U Maimum Equity llwnc4 I.STl.726 2◄.652,911
Lar<JRelic!u,tV..,_ 4MZ2,100 •s.ie1.~•
R,t,,m"'-'I(~) o;. ..... 1Ra('lro) 0,00.,. ~ 10.00'JI IO!ml. ~'~""' 2.DS RounonEqai!rlb-.d 371.125 ~.190,600
~ ............ -, 2JG1'5
P,ofit~ D,A1J.3JI l!l,68~801 -----PRCI~ f SUMMARY !'Ill ol Pm(l ~ 34.00" 6194
1,lo<l>r)"n...-f•• Roror....,
li.t P11>1il llo,.,. R.itrn, M Equ;ty 27,664,927
(II) of Gr .. , S.'llfl lJ•"'"'• 27.51% «.IP!ttftV•I"" 6,7M,A36 16,880,491
(') of TOW O.,.t, 31.95!1 Di,co.r,i lbl:.rn) 0.00% 0.00,.
lolarn;illb!u Reun('-) 6821!1 2◄01"' 1111 P,nlilo11et n..,.,,,.., 1:qu1, Z!,10),112 E...., ... _, 659 f.77 ts)., C!rosL-R-21.!11!% l\fJSORPIIIJN
l<ll)o!r"""Co>b J0.32%
A-Abto<....,.pe<SaotMonth 31
"""""' O<n1ion ('""'lhsl 56
SMRH:488409815.8 Exhibit B-5
EXHIBIT C
DEVELOPMENT RESPONSIBILITIES
This Exhibit sets forth the general Development Responsibilities of McKellar McGowan
with respect to the entitlement, develop'ment, improvement and sale of the Project. Initially
capitalized terms used and not defined herein shall have the same meaning given them in the
Operating Agreement of the Company.
McKellar McGowan will keep Manager reasonably informed regarding the status of the
Development Responsibilities, including promptly delivering copies of all material notices and
documents relating to the Project, giving Manager reasonable prior notice of and the opportunity
to attend meetings with the City, other governmental agencies and/or Third Parties (as defined
below) regarding the Project and providing such reports and other information regarding the
Project as reasonably requested by Manager. In addition, McKellar McGowan shall provide a
written reports regarding the status of the Project to Manager at least monthly and will meet with
the Manager at least monthly or more often as reasonably requested by Manager. McKellar
McGowan shall promptly notify Manager of any actual or expected material departure from the
Project Budget, any material changes to the Project (including any proposed conditions of
approval to the Entitlements) and/or any delays affecting the Project, including any potential
delays in obtaining Final Approval. McKellar McGowan shall promptly notify Manager if
McKellar McGowan determines that the remaining undisbursed portions of the Project Budget is
or will be insufficient to pay the costs and expenses of the Project or if at any time the
undisbursed portion of the Project Budget with respect to any period is insufficient to pay the
costs and expenses forecasted for such period.
/
Notwithstanding anything to the contrary contained herein, McKellar McGowan may not
enter into any contracts, make any applications or make any other submissions relating to the
Project without Manager's prior written approval and nothing contained herein affects
Manager's rights and authority under the Operating Agreement of the Company. All contracts
with Third Parties, applications for approval, submissions, bond and utility agreements shall be
in the name of the Company.
1. Entitlements Phase.
During the Entitlements Phase, McKellar McGowan agrees to use commercially
reasonable efforts to process with the City and other applicable authorities, and obtain Final
Approval of, the Entitlements within ten ( 10) months after the Effective Date. The anticipated
Entitlements include a tentative subdivision map contemplating the subdivision of the Project
into condominium interests and/or lots ("Tentative Map") and all other discretionary approvals
required for development of the Project.
McKellar McGowan's Development Responsibilities during the Entitlements Phase also
include: (i) making recommendations to Manager regarding consultants, contractors,
subcontractors, vendors, suppliers and other parties providing services or materials to the Project
("Third Parties") to be engaged by the Company in connection with the processing of the
Entitlements, including a civil engineer, architect and landscape architect, (ii) negotiating on
SMRH:488409815.8 -Exhibit C-
behalf of the Company (but not executing) contracts with any Third Parties, (iii) coordinating
with the Third Parties to prepare reports, documents, plans, specifications and other work
product for Project to the extent required to obtain Final Approval, (iv) reviewing and making
recommendations to Manager regarding Third Party applications for payment and requests for
change orders, including submitting to Manager at least monthly a payment request package that
includes invoices, lien waivers and other documentation required by Manager, (v) preparing for
submission all applications for the Entitlements and to obtain commitments for utility services
for the Project (provided that no such submissions may be made without Manager's prior
approval), (vi) negotiating on behalf of the Company (but not executing) any agreements with
utility companies, neighboring owners or other parties required for the Project, (vii) obtaining
estoppel certificates from existing tenants as.reasonably requested by Manager, (viii) obtaining
an ALTA survey of the Property that demonstrates to Manager's reasonably satisfaction that
there are no easements, encroachments or other matters that will materially and adversely affect
development of the Project and (ix) otherwise providing all services necessary to obtain Final
Approval.
2. Pre-Construction Phase
During the Pre-Construction Phase, McKeilar McGowan agrees to use commercially
reasonable efforts to (i) process and, if directed by Manager, obtain approval of and record a
final map in substantial conformance with the Tentative Map ("Final Map"), (ii) process with
the City and any other applicable governmental agencies and utility companies and obtain
approval of improvement plans, construction drawings and other approvals required to record the
Final Map and obtain building permits for construction of the Project, (iii) satisfy all conditions
of approval of the Entitlements that must be satisfied prior to recording the Final Map or
obtaining building permits for construction of the Project, (iv) process applications with the City
for, and, if directed by Manager, obtain building permits for construction of the Project, (v) make
recommendations to Manager regarding any additional Third Parties to be engaged by the
Company during the Pre-Construction Phase, (vi) negotiate on behalf of the Company (but not
execute) contracts with any such Third Parties, (vii) coordinating with Third Parties to prepare
reports, documents, plans, specifications and other work product for Project to the extent
required to perform the Development Responsibilities during the Pre-Construction Phase, (viii)
review and make recommendations to Manager regarding Third Party applications for payment
and requests for change orders and (ix) otherwise providing all services necessary to perform the
Development Responsibilities during the Pre-Construction Phase. McKellar McGowan agrees to
use commercially reasonable efforts to obtain approval of the Final Map and satisfy all
requirements to obtain building permits for construction of the Project within eleven (11) months
after Final Approval of the Entitlements.
3. Construction Phase
If the Company elects to proceed with the Construction Phase, the Members will agree on
the Development Responsibilities during the Construction Phase. In general, McKellar
McGowan will perform, or cause to be performed, all work necessary to develop and improve
the Project, obtain certificates of occupancy for the Project, obtain all necessary governmental
approvals and permits for construction and sale of the residences within the Project, including
public reports issued by the California DRE and provide marketing and sales services.
SMRH :48840981 S.8 -Exhibit C-
LEGAL DESCRIPTION
Order Number: NCS-1089370-SD
Page Number: 7
Real property in the City of Carlsbad, County of San Diego, State of California, described as follows:
Parcel A as shown on Certificate of Compliance, Adjustment Plat No. 190, as evidenced by document
recorded February 19, 1981 as Instrument No. 81-050735 of official records, being more particularly
described as follows:
Lying in that Southeasterly 60.30 feet of the Northeasterly 162.70 feet of Lot# 30, of SEASIDE LANDS,
the Northwesterly line being parallel with and distant Northwesterly 60.30 feet from the Southeasterly
line of said Lot 30 and, the Northwesterly 54.00 feet of Lot 31, of SEASIDE LANDS, in the City of
Carlsbad, County of San Diego, State of California, according to the Map Thereof No. 1722 filed in the
office of the County Recorder of San Diego County, July 28, 1921.
EXCEPTING THEREFROM that portion thereof that lies Southwesterly of a line that begins at a point in
the Northwesterly line of said Lot 31 distance therealong 159.9 feet from the most Westerly corner of
said lot and runs through at right angles to said Northwesterly line to a point in the Southeasterly line of
said lot.
APN: 203-181-08-00 (Affects: Portion of Said Land)
203-181-09-00 (Affects: Portion of Said Land)
First American Title Insurance Company
MARO 6 2025
( City of
Carlsbad
~ENSITY BONUS REPORT
MAR O 6 2025 P-l(H}
Community Development
Planning Division
1635 Faraday Avenue
(442) 339-2600
www.carlsbadca.gov
Informational Bulletin IB-112
This Density Bonus Report (formally known as the Supplemental Checklist) is required to be completed for all residential
development applications being processed under Government Code §65915 (state density bonus law) and must be
submitted with the development permit application. Please attach additional pages and/or documents as necessary to
help staff process your request.
Refer to Carlsbad Municipal Code §21.86.040 for the city's submittal requirements for density bonus applications and
Information Bulletin IB-112 and IB-157 for additional information on density bonus and the city's inclusionary housing
requirements, respectively.
A. PROJECT INFORMATION
Project Name:
Case Nos.:
Applicant:
Project Location:
(Address & APN)
Property
Description:
Project
Description:
P-1(H)
McKellar McGowan LLC
2777 and 2785 Roosevelt St, Carlsbad, CA, 92008
203-181-08-00, 203-181-09-00
See attached Legal
A proposed Major Site Development plan will outline the construction of a 35, 127 SF, five-story building at
2777 and 2785 Roosevelt St. This development will feature 17 residential condominium units, ranging from
two to four bedrooms, along with 850 SF of street front retail space. The property, situated on
o 43 acres wm have street access via a drive aisle leading to a ground-level parking garage with
33 spaces Two of the 17 units representing 12% of the project wm be designated tor very
low-income households in accordance with state density bonus law. All residents will benefit by
accessing an approximately 600 SF partially covered rooftop common area garden.
Page 1 of 6 Revised: 03/2024
B. DENSITY BONUS CALCUL.NS TABLE • 1.
2.
3.
4.
5.
General Plan Designation. What is the underlying General Plan Land Use Designation of the site?
Maximum Density. What is the maximum allowed density under the General Plan designation?
Site Size. What is the total size of the site?
Base Density. What is the maximum number of units allowed at the site? (#B.2 x #B.3, rounded up)
Affordable Housing. What is the type & number of restricted affordable housing units proposed?
Village Barrio
35
0.4356
16
a. Extremely low: b. Very low: 2 c. Low: d. Moderate: e. TOTAL: 2
6.
7.
----------
Percent Affordable. What% of the units are affordable? (#B.S.e + #B.4, rounded up)
Density Bonus Units.
a. What% increase in Base Density is allowed at the site (see Density Bonus Table)?
b. How many Density Bonus units are allowed at the site? (#B.4 x #B.7.a, rounded up)
8. Total Housing Units.
a. What is the total number of units at the site (#B.4 + #B.7.b)?
b. What is the total resulting density at the site (#B.8.a + #B.3, rounded to nearest tenth)?
C. INCLUSIONARY HOUSING CALCULATIONS TABLE
-----
13%
42.5%
7
17
39.5
1. Total Housing Units. What is the total number of units on site? (Insert figure from #B.8.a, or #D.8.a, whichever larger) 17 -----
2. lnclusionary Requirement. How many required inclusionary units? (15% x #C.l, rounded per §21.85.050) 3 -----
3. lnclusionary Housing. What is the type & number of restricted inclusionary housing units proposed?
a. Extremely low: __ _ b. Very low: 2 ---c. Low: ---d. Moderate: ---e. TOTAL: 2 -----
4. Affordable Housing. What is the type & number of affordable housing units proposed? (figures in e.s)
a. Extremely low: ___ b. Very low: 2 c. Low: ___ d. Moderate: ___ e. TOTAL: _2 ____ _
5. Difference. Positive numbers represent inclusionary units required above density bonus (#C.3 -#C.4)
a. Extremely low: ___ b. Very low: ___ c. Low: ___ d. Moderate: ___ e. TOTAL: _0 ____ _
D. SECONDARY DENSITY BONUS CALCULATIONS TABLE
1. Base Density. What is the maximum number of units allowed at the site? (Figure from #B.4) NA -----
2. Affordable Housing(#). What is the type & number of affordable housing units proposed? (Figures from #B.S)
a. Extremely low: ___ b. Very low: ___ c. Low: ___ d. Moderate: ___ e. TOTAL: _N_A ___ _
3. Affordable Housing (%). What is % of affordable housing units proposed? (#0.2 + #0.1, rounded up)
a. Extremely low: b. Very low: c. Low: d. Moderate: e. TOTAL: NA --------------
4. Eligibility. What minimum housing income affordability criteria are you meeting? (select based on #0.3)
a. ~15% extremely/very-low: b. ~24% low: ~44% moderate: ---------
5. Additional Affordable Housing(#). What is the type & number of additional affordable units proposed? (only one category)
a. Very low: __ _ b. Moderate:
6. Additional Affordable Housing(%). What is % of additional affordable units proposed? (#0.S + #0.1, rounded up)
a. Very low: b. Moderate:
P-1(H) Page 2 of 6 Revised: 03/2024
7. Secondary Density Bonus Uni. • a. What% increase in Base Density is allowed at the site (see Density Bonus Table)? NA -----
b. How many Secondary Density Bonus units allowed at the site? (#D.1 x #D.7.a, rounded up)
8. Total Housing Units.
a. What is the total number of units at the site (#B.8.a + #D.7.b)?
b. What is the total resulting density at the site (#D.8.a + #D.l, rounded to nearest tenth)?
9. Total Affordability.
NA
a. What is the total percentage of affordable units at the site? (#B.6 + #D.6.a or #D.6.b-total cannot exceed SO%) NA -----
E. CONCESSION(S). INCENTIVES(S) & WAIVERS1•2
Using the fields below, provide the following information for each requested concession/incentive and/or waiver. Please
attach additional documentation, if necessary, to help explain the request ---the use of exhibits, graphics, site plans, and/or
charts to help explain the need for the deviation and the anticipated effects are strongly encouraged.
• Select whether the requested deviation is a concession/incentive or waiver
• Identify the specific city code/policy number of the development standard requiring deviation
• Specify the code/policy language of the development standard requiring deviation
• Describe how the development standard will be deviated
• Explain the reasons why the development project requires deviation from the standard3•4
CONCESSION/INCENTIVE/WAIVER #1
Select Type:
Code/Policy
Number:
Required
Standard:
Proposed
Deviation:
Reason for
Deviation:
D Concession/Incentive 0 Waiver
Building Height 2. 7 .1 G
Maximum 45 ft and 4 stories.
Proposed building up to 62 ft and 5 stories.
A deviation of 15 feet in height and one story is necessary in order to construct this
density bonus project.
CONCESSION/INCENTIVE/WAIVER #2
Select Type:
Code/Policy
Number:
Required
Standard:
Proposed
Deviation:
Reason for
Deviation :
P-1 (H)
D Concession/Incentive ISZf'waiver
Building Massing 2. 7 .1 H
Maximum wall plane and roofline: No building facade visible from any public street
!excludinrr alleys) shall extend more than 40 ft in length without a 5 ft minimum variation
in the wa plane, as well as, a change m rooflme
Proposed building is 47 ft before a 5 ft variation in the wall plane.
Ibis modest deviation is necessary i□ order to construct this density bonus project The
proposed design maintains the intent of the standard by incorporatina architectural variati ns
across different floors to enhance visual interest and break up the building's massing.
Page 3 of 6 Revised: 03/2024
• • CONCESSION/INCENTIVE/WAIVER #3
Select Type:
Code/Policy
Number:
Required
Standard:
Proposed
Deviation:
Reason for
Deviation:
0 Concession/Incentive [S2f Waiver
Ground Floor Street Frontage Uses 2. 7.1 I (1)
New ground floor street frontage uses permitted within the boundaries of the use restricti n area
identified on Fiffure 2.2 shall occupy more than one-half of the habitable space develope
on the ground oor and shall span at least 80% of the building frontage.
The proposed building complies with the first part of this item. Retail occupies more than
one-half of the habitable space developed by the ground floor. The proposed building
does not comply with the second. Retail spans 66% of the building frontage.
The city setback ceQuireroent resulted in widening the emergency stairway on the building
frontage.This, coupled with the width of the driveway, caused the retail to span 66% of the
building frontage.
CONCESSION/INCENTIVE/WAIVER #4
Select Type:
Code/Policy
Number:
Requ ired
Standard:
Proposed
Deviation:
Reason for
Deviation:
D Concession/Incentive
CONCESSION/INCENTIVE/WAIVER #5
Select Type:
Code/Policy
Number:
Required
Standard:
Proposed
Deviation:
Reason for
Deviation:
P-1 (H)
D Concession/Incentive
Owaiver
D Waiver
Page 4 of 6 Revised: 03/2024
1Cities are required to grant concessions ~tives (referred to as concessions) to a developer that ~d agrees to include affordable units in their
development. One to four concessions .:Hable for each development depending on the perc--~f affordable housing that will be included
within the development. A concession is one of three things (Gov. Code §65915, subd. (k)(l)-(3)):
• A reduction in site development standards or a modification of zoning code requirements or architectural design requirements that exceed
minimum building standards that result in identifiable and actual costs reductions. Development Standard" includes a site or construction condition,
including, but not limited to, a height limitation, a setback requirement, a floor area ratio, an onsite open-space requirement, a minimum lo area
per unit requirement, or a parking ratio that applies to a residential development pursuant to any ordinance, general plan element, specific plan,
charter, or other local condition, law, policy, resolution, or regulation. (Gov. Code §65915, subd. (o)(2)).
• Approval of mixed-use zoning in conjunction with the housing project if commercial, office, industrial, or other land uses will reduce the cost of the
housing development and if such uses are compatible with the housing project and the existing or planned development in the area.
• Other regulatory concessions proposed by the developer or city that result in identifiable and actual cost reductions.
The City shall grant the concession unless one or more of the following written findings can be made, based upon substantial evidence (Gov. Code
§65915, subd. (d)(l)(A)-(C)):
• The concession does not result in identifiable and actual cost reductions to provide for affordable housing costs, or for rents for the targeted units.
• The concession would have a "specific adverse impact [ ... ) upon public health and safety or on any real property that is listed in the California
Register of Historical Resources and for which there is no feasible method to satisfactorily mitigate or avoid the specific, adverse impact without
rendering the development unaffordable to low-income and moderate-income households."
• The concession would be contrary to state and federal law.
2 In addition to concessions, an applicant may submit a proposal for a waiver or reduction (referred to as waiver) of development standards. (Gov. Code
§65915, subd. (e)(l)). In no case may a city apply any development standard that will have the effect of physically precluding the construction of a
development at the density or concessions permitted. The City shall grant the waiver unless one or more of the following written findings can be made
(Gov. Code §65915, subd. (e)(l)):
• The waiver will have a specific adverse impact upon health, safety, or the physical environment and for which there is no feasible method to
satisfactorily mitigate or avoid the specific adverse impact.
• The waiver will have a specific adverse impact on any real property listed in California Register of Historical Resources.
• The waiver would be contrary to state and federal law.
3 Pursuant to the court case Schreiber v. City of Los Angeles, which was later codified as part of the passage of AB 1287, a developer is not required to provide
financial evidence (i.e., proforma) documenting that a requested incentive/concession will result in actual cost reductions. However, applicants still need to
reasonably document "why" the requested incentive/concession will reduce affordable housing development costs. As such, the city requires applicants to
provide reasonable documentation to show that a requested incentive/concession will result in identifiable cost reductions to provide for affordable housing
costs or rents. Please attach additional documents, as appropriate.
4 Sufficient documentation must be provided justifying why the city's established development standard(s) or design regulation(s) physically preclude
construction of the project and why the waiver(s) is necessary. Sufficient documentation may include a written explanation of the physical constraints
accompanied with an exhibit showing the site and developable envelope.
P-1(H) Page 5 of6 Revised: 03/2024
DENSITY B~S TABLE
6%
7% 25%
8% 27.5%
9% 30%
10% 32.5%
11% 35%
12% 38.75%
13% 42.5%
14% 46.25%
15% 50%
16% 50%
17% 50%
18% 50%
19% 50%
20% 50%
21% 50%
22% 50%
23% 50%
24% 50%
25% 50%
26% 50%
27% 50%
28% 50%
29% 50%
30% 50%
31% 50%
32% 50%
33% 50%
34% 50%
35% 50%
36% 50%
37% 50%
38% 50%
39% 50%
40% 50%
41% 50%
42% 50%
43% 50%
44% 50%
20%
21.5%
23%
24.5%
26%
27.5%
29%
30.5%
32%
33.5%
35%
38.75%
42.5%
46.25%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
PRIMARY
DENSITY BONUS
5%
6%
7%
8%
9%
10%
11%
12%
13%
14%
15%
16%
17%
18%
19%
20%
21%
22%
23%
24%
25%
26%
27%
28%
29%
30%
31%
32%
33%
34%
35%
38.75%
42.5%
46.25%
50%
•
20% 27.5%
20% 31.25%
20% 35%
15% 20% 38.75%
16% 20% 38.75%
17% 20% 38.75%
18% 20% 38.75%
19% 20% 38.75%
20% 20% 38.75%
21% 20% 38.75%
22% 20% 38.75%
23% 20% 38.75%
24% 20% 38.75%
25% 20% 38.75%
26% 20% 38.75%
27% 20% 38.75%
28% 20% 38.75%
29% 20% 38.75%
30% 20% 38.75%
31% 20% 38.75%
32% % 38.75%
33% 20% 38.75%
34% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 20% 38.75%
35% 38.75%
25%
27.5%
30%
32.5%
35%
{__ City of
Carlsbad
38.75%
42.5%
46.25%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
50%
1Government Code §65915(/)(2); 2Government Code §65915(/)(1); 3Government Code §65915(/)(4); 4Government Code §65915(g){1);
5Government Code §65915(/)(3) No minimum affordable units are required; 6Government Code §65915(v)(1) & (2), as introduced under
AB 1287, effective January 1, 2024.
P-1(H) Page 6 of6 Revised: 03/2024
APN 203-181-19
2742 STATE STREET
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R H A
ROBERT HIDEY ARCHITECTS
MCKELLAR MCGOWAN
REAL ESTATF DEVELOPMENT
PROJECT NUMBER 23054 02/10/25
CITY Or
MAR O 6 2'.· ')
R H A
ROBERT HIDEY ARCHITECTS
PROJECT LOCATION
THE DEWHURST
CARLSBAD, CALIFORNIA
Preliminary SB330 Planning Departn1e11t S11b111ittal
N
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2'W'A 02/10/25
' I 2
R H A
ROBERT HIDEY ARCHITECTS
PROJECT LOCATION
THE DEWHURST
CARI SBAD, CALIFORNIA
Preliminary SB330 Plc1nninq Oepa1tme11t Subrnirti'll
N
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I I I I MC KE R~A~~A~ O~l~P~N~ w AN I
230S4 02/10/7'.:>
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ROBERT HIDEY ARCHITECTS
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THE DEWHURST
CARLSBAD, CALI FORNIA
r liminacy SB330 ~ Planning Depact,nent Snbmittal
I
A I 1 -H f I
ROOSEVELT
33PARKING
SPACES
A I
RETAIL
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-
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Plan
PLAN 1 (Affordable)
PLAN 1
PLAN 1X (Affordable)
PLAN 2
PLAN 3
PLAN4
PLAN 5
PLAN 5x
PLAN 6
PLAN 7
Grand Total
I
UNIT TABULATION 7
Type
2 BD-2 BA
2 BD-2 BA
3 BD-2 BA
2 BD-2.5 BA
2 BD-2.5 BA
3 BD-2.5 BA
2 BD-2.5 BA
3 BD-2.5 BA
3 BD+OFFICE-3.5 BA
4 BD -4.5 BA
Unit Area Count Total
1,125 SF 1 1,125SF
1,125 SF 1 1,125 SF
1,379 SF 1 1,379 SF
1,813 SF 3 5,439 SF
1,985 SF 3 5,955 SF
1,934 SF 3 5,802 SF
2,040 SF 1 2,040 SF
2,290 SF 2 4,580 SF
3,722 SF 1 3,722 SF
3,960 SF 1 3,960 SF
17 35,127 SF
PARKING PROVIDED:
33 STALLS
FIRST FLOOR
N
® 0 5' 10' 20'
SCALE: 1 "=20'
M _c KER~.~~.~ □~,~P~N~ w AN I
23054 02/10/25
4
R H A
ROBERT HIDEY ARCHITECTS
THE DEWHURST
CARLSBAD, CALIFORNIA
,--------
29'-0"
B------------+--+I -
PLAN 2
1,813SF
2 BED, 2.5 BA
272 SF (DECK)
PLAN 3
1,985 SF
2 BED, 2.5 BA
247 SF (DECK) ....,
Preliminary S6330 Planning Departme11t S11bmittal
I I
-----------------
11·-o·
b I
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---i__ _____ -___ _J
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Plan
PLAN ---tPLAN 1 (Affordable)
1
PLAN --.--1PLAN
1X (Affordable)
PLAN ~-..... PLAN ---tPLAN
2
3
4
5
PLAN 5x ~-..... PLAN
---tPLAN
6
7
Grand Total
PLAN 4
1,934 S F
3 BED, 2
208 SF
.5 BA
(DECK)
X PLAN 1
AFFORD
1,379SF
3 BED, 2
96 SF (D
PLANS
2,040 S F
ABLE
BA
ECK)
.5 BA 2 BED, 2
178 SF (DECK)
I
UNIT TABULATION
Type Unit Area Count Total
2 BD-2 BA 1,125SF 1 1,125 SF
2 BD-2 BA 1,125SF 1 1,125 SF
3 BD-2 BA 1,379 SF 1 1,379 SF
2 BD-2.5 BA 1,813SF 3 5,439 SF
2 BD-2.5 BA 1,985 SF 3 5,955 SF
3 BD-2.5 BA 1,934 SF 3 5,802 SF
2 BD-2.5 BA 2,040 SF 1 2,040 SF
3 BD-2.5 BA 2,290 SF 2 4,580 SF
3 BD+OFFICE-3.5 BA 3,722 SF 1 3,722 SF
4 BD-4.5 BA 3,960 SF 1 3,960 SF
17 35,127 SF
SECOND FLOOR
N ,-,_, I ® 0 5' 10' 20'
SCALE: 1 "=20'
MC KE R~A~~A: o~,~~~N~ WAN I
23054 02/10/25
5
R H A
ROBERT HIDEY ARCHITECTS
THE DEWHURST
CARLSBAD, CALIFORNIA
PLAN 2
1,813 SF
2 BED, 2.5 BA
272 SF {DECK)
PLAN 3
1,985 SF
2 BED, 2.5 BA
247 SF {DECK)
r liminary SB33C Planning Department St1hmittc1I
---------
29'-0'
1,·.1·
I
---------------7
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PLAN 1 (Affordable)
PLAN 1
PLAN 1X (Affordable)
PLAN 2
PLAN 3
PLAN4
PLAN 5
PLAN 5x
PLAN 6
PLAN 7
Grand Total
PLAN 4
1,934 SF
3 BED, 2.5 BA
208 SF {DECK)
PLAN 1
AFFORDABLE
1,125SF
2 BED, 2 BA
96 SF {DECK)
PLAN SX
2,290 SF
3 BED, 2.5 BA
178 SF {DECK)
I
UNIT TABULATION 7
Type Unit Area Count Total
2 BD-2 BA 1,125SF 1 1,125 SF
2 BD-2 BA 1,125SF 1 1,125SF
3 BD-2 BA 1,379 SF 1 1,379 SF
2 BD-2.5 BA 1,813 SF 3 5,439 SF
2 BD-2.5 BA 1,985 SF 3 5,955 SF
3 BD-2.5 BA 1,934 SF 3 5,802 SF
2 BD-2.5 BA 2,040 SF 1 2,040 SF
3 BD-2.5 BA 2,290 SF 2 4,580 SF
3 BD+OFFICE-3.5 BA 3,722 SF 1 3,722 SF
4 BD-4.5 BA 3,960 SF 1 3,960 SF
17 35,127 SF
THIRD FLOOR
N
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SCALE: 1 "=20'
Mc KER~~~-: 0 ~,~P~N~w AN I
23054 02/10/25
6
R H A
ROBERT HIDEY ARCHITECTS
THE DEWHURST
CARLSBAD, CALIFORNIA
PLAN 2
1,813SF
2 BED, 2.5 BA
272 SF (DECK)
PLAN 3
1,985 SF
2 BED, 2.5 BA
247 SF (DECK)
Preliminary SB330 Planning Department Submittal
I I
------
29'-0"
11·-1·
--·----------~ --7
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Plan
PLAN 1 (Affordable)
PLAN 1
PLAN 1X (Affordable)
PLAN 2
PLAN 3
PLAN 4
PLAN 5
PLAN 5x
PLAN 6
PLAN 7
Grand Total
PLAN 4
1,934 SF
3 BED, 2.5 BA
208 SF (DECK)
PLAN 1
1,125 SF
2 BED, 2 BA
96 SF (DECK)
PLAN SX
2,290 SF
3 BED, 2.5 BA
178 SF (DECK)
I
UNIT TABULATION
Type Unit Area Count Total
2 BD-2 BA 1,125 SF 1 1,125 SF
2 BD-2 BA 1,125 SF 1 1,125SF
3 BD-2 BA 1,379 SF 1 1,379 SF
2 BD-2.5 BA 1,813 SF 3 5,439 SF
2 BD-2.5 BA 1,985 SF 3 5,955 SF
3 BD-2.5 BA 1,934 SF 3 5,802 SF
2 BD-2.5 BA 2,040 SF 1 2,040 SF
3 BD-2.5 BA 2,290 SF 2 4,580 SF
3 BD+OFFICE-3.5 BA 3,722 SF 1 3,722 SF
4 BD-4.5 BA 3,960 SF 1 3,960 SF
17 35,1 27 SF
FOURTH FLOOR
N I I I 19\ 0 5' 10' 20'
'6J SCALE: 1 "=20'
MC KE R~A~E~A~ D ~l~P~N~ w AN I
23054 02/10/25
7
R H A
ROBERT HIDEY ARCHITECTS
-----------
4----------+----_____;_
THE DEWHURST
CARLSBAD, CALIFORNIA
PLAN 6
3,722 SF
3 BED + OFFICE, 3.5 BA
905 SF (DECK)
Preliminary SB330 Planning Department Submittal
I
--
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Plan
PLAN 1 (Affordable)
PLAN 1
PLAN 1X (Affordable)
PLAN 2
PLAN 3
PLAN 4
PLAN 5
PLAN 5x
PLAN 6
PLAN 7
Grand Total
PLAN 7
3,960 SF
4 BED, 4.5 BA
720 SF (DECK)
I
UNIT TABULATION ' Type Unit Area Count Total
2 BD-2 BA 1,125 SF 1 1,125 SF
2 BD-2 BA 1,125SF 1 1,125SF
3 BD-2 BA 1,379 SF 1 1,379 SF
2 BD-2.5 BA 1,81 3 SF 3 5,439 SF
2 BD-2.5 BA 1,985 SF 3 5,955 SF
3 BD-2.5 BA 1,934 SF 3 5,802 SF
2 BD-2.5 BA 2,040 SF 1 2,040 SF
3 BD-2.5 BA 2,290 SF 2 4,580 SF
3 BD+OFFICE-3.5 BA 3,722 SF 1 3,722 SF
4 BD -4.5 BA 3,960 SF 1 3,960 SF
17 35,127 SF
FIFTH FLOOR
N
® 0 5' 10' 20'
SCALE: 1"=20'
M _c KER~.~~.: 0 ~~P~N~W AN I
23054 02/10/25
8
R H A
ROBERT HIDEY ARCHITECTS
PL PL PL
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THE DEWHURST
CARLSBAD, CALIFORNIA
Preliminary 5B330 Planning Department Submittal
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23054 02/10/25
9
R H A
ROBERT HIDEY ARCHITECTS
PL
WEST
THE DEWHURST
CARLSBAD, CALI! Ol~NIA
Prelirninarv S8330 Plarrninq Depa1tme11l C:,uhmittal
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