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HomeMy WebLinkAbout2002-12-03; City Council; 16995; Agreement with Calavera Hills II LLCh. CITY OF CARLSBAD - AGENDA BILL zf LB# 16,995 IITG. 12/03/02 DEPT. HD. TITLE: AGREEMENT WITH CALAVERA HILLS II, LLC, FACILITIES BJB AND BJA IEPT. ENG IMPROVEMENTS TO CANNON ROAD EAST AND FOR ACQUISITION, CONSTRUCTION, AND FINANCING OF COLLEGE BOULEVARD AND TO MASTER DRAINAGE PLAN RECOMMENDED ACTION: Adopt Resolution No. 2002-349 approving agreement with Calavera Hills II, a California Limited Liability Company, for acquisition, construction, and financing of improvements to Cannon Road East and College Boulevard and to Master Drainage Plan Facilities BJB and BJA for Financing District No. 01 -02. ITEM EXPLANATION: On December 18, 2001, City Council authorized staff to work on the formation of financing districts for several major road projects including the Cannon Road East and College Boulevard arterial road extensions. On January 15, 2002, Council approved Resolution No. 2002-016 approving the development of Phase II of the Calavera Hills Master Plan project. As a condition of approval for the Calavera Hills Phase II project, the developer, Calavera Hills II, LLC, a California Limited Liability Company, is required to financially guarantee and to construct portions of College Boulevard and Cannon Road, including appurtenant sewer and water utilities, extending from the existing College Boulevard terminus at Carlsbad Village Drive to the existing Cannon Road terminus at El Camino Real. In addition to the road improvements, the developer is requesting to include certain Master Drainage Plan improvements including Retention Basin BJB and Storm Drain BJA. The developer is conditioned to install these Master Drainage Plan improvements as a condition of project approval. Since Master Drainage Plan improvements are subject to reimbursement from Planned Local Drainage Area (PLDA) fees, only those costs incurred by the developer in excess of the PLDA reimbursement will be eligible for reimbursement from the proposed special financing district. Due to the time it takes to create a special financing district, Calavera Hills II, LLC, has expressed a need to proceed with construction of certain public improvements included in the financing district in advance of the creation of the district. This situation is fairly common and can be allowed at the discretion of the City Council. Typically, the property owner and public entity sponsoring the financing district enter into an acquisition agreement which specifies the conditions under which the property owner may proceed with the construction of certain facilities, and when the property owner can expect to receive reimbursement for the cost of eligible improvements. The City entered into similar acquisition agreements with the developers of Carrillo Ranch, Carlsbad Ranch, and Aviara for the construction of portions of Alga Road, Poinsettia Lane, Cannon Road, and Melrose Drive. The City staff, working with bond counsel and Calavera Hills II, has developed the attached acquisition agreement which will allow Calavera Hills II to proceed with construction of the public facilities included within the financing district ("District") scheduled for formation in 2003. Under the agreement, the property owner must construct the improvements to the City's standards, and the City will acquire qualifying improvements subject to the approval of the Deputy Public Works Director for Engineering Services. The terms of the agreement were reviewed and approved by the Special District Review Committee (Policy 33) and comply with City policies. Page 2 of Agenda Bill No. 16,995 FISCAL IMPACT: There will be no long-term costs to the City. There will be some staff time expended during the formation of the district; however, these costs will be recovered from the developer funds placed on deposit with the City in advance of the formation of the district and/or through the bond issuance. The cost of all facilities and infrastructure to be constructed by the district will be funded through the issuance of bonds. The developer is requesting the ability to pass through the costs of the improvements to future property owners. Thus, the bonds are expected to be repaid through assessments placed on the property within the district boundary. While the terms'of any bond issues are subject to Council approval in the future, the agreement does provide the following limits according to Council policies: 1. The value to lien ratio for the total project and on a village-by-village basis must be 4:l (lower ratio is acceptable at City's discretion if appropriate credit enhancement is provided). 2. Assessments, taxes, and special taxes on a residential property tax bill shall not exceed 1.8% of the sales price of the newly developed properties at the close of escrow of the initial sale. These limits provide assurance that the assessments on the future property owners within the District will not be excessive in comparison with the other developments within Carlsbad and in comparison to other cities. The agreement also states that the developer assumes all risk for financing the improvements to be acquired by the City. In the event the district is not formed or the bonds not issued, the City is under no obligation to compensate the developer for the improvements from the General Fund or any other City funding source. In addition, the agreement clearly states that the decision of the City Council to allow formation of the District is a legislative action, and that approval of the acquisition agreement does not commit the City Council, or any future City Council, to approve formation of the district. ENVIRONMENTAL IMPACTS: The City Council, at their meeting on January 2, 2002, passed Resolution No. 2002-016 certifying EIR No. 98-02. This EIR covers the construction of Cannon Road and College Boulevard, together with the construction of Detention Basin BJB and Storm Drain BJA. EXHIBITS: 1. Location Map 2. Resolution No. 2002-349 approving agreement with Calavera Hills II, a California Limited Liability Company, for acquisition, construction, and financing of improvements to Cannon Road East and College Boulevard and to Master Drainage Plan Facilities BJB and BJA for Financing District No. 01 -02. 3. Acquisition, Construction, and Financing Agreement CANNON ROADICOLLEGE BOULEVARD EXTENSION FINANCING DISTRICT NO. 01-02 LOCATION MAP PROPOSED FINANCING DISTRICT BOUNDARY FdT& PROPOSED DISTRICT IMPROVEMENTS $G/'q) ROBERTSON RANCH EAST PROPERTY [-I CALAVERA HILLS PROPERTY 3 1 2 3 4 5 6 7 8 9 10 11 J2 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 i+=- 1, t..”#+f 1 p:\ ( & RESOLUTION NO. 2002-349 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING AGREEMENT WITH CALAVERA HILLS II, A CALIFORNIA LIMITED LIABILITY COMPANY, FOR ACQUISITION, CONSTRUCTION, AND FINANCING OF IMPROVEMENTS TO CANNON ROAD EAST AND COLLEGE BOULEVARD AND TO MASTER DRAINAGE PLAN FACILITIES BJB AND BJA FOR FINANCING DISTRICT NO. 01 -02 WHEREAS, the City Council of the City of Carlsbad, California (“City”) has been petitioned by Calavera Hills 11, LLC, a California Limited Liability Company (“Developer”), to initiate proceedings to consider the formation of a land secured financing district (“District”) to finance the acquisition of certain public improvements, located within the jurisdictional limits of City, for portions of College Boulevard and Cannon Road, including appurtenant sewer and water utility improvements, and Drainage Master Plan Facilities BJB and BJA (“Improvements”); and, WHEREAS, Developer in order to proceed in a timely way with development of its property, known as Calavera Hills Phase II, desires to construct the Improvements in advance of the formation of District and, following completion of the Improvements and formation of the District, have the Improvements acquired by the City from the proceeds of bonds issued for or on behalf of the District; and WHEREAS, at this time, there has been submitted to the City Council for review and approval, an acquisition, construction, and financing agreement (“Agreement“) setting forth certain terms and conditions, as well as estimated costs for work to be installed and financed pursuant to the Agreement. NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Carlsbad, California, as follows: 1. That the above recitations are true and correct. 2. That the Agreement between the City of Carlsbad and Developer for the xquisition, construction, and financing of said Improvements is hereby approved and the Mayor s authorized and directed to execute said agreement. I// 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 .. I 3. That the City Clerk is authorized and directed to forward copies of the signed agreement to Developer. PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City Council held on the 3rd day of DECEMBER ,2002 by the following vote, to wit: AYES: Council Members Lewis, , Finnila, Nygaard, Hall NOES: None ABSENT: Non ATTEST @AlNy. WOOD, City Clerk (SEAL) Page 2 of 2 of Resolution No. 2002-349 11.12.02 ACQUISITIONlFINANCING AGREEMENT THIS AGREEMENT is made and entered into thisll ~ff day ofDHEkm 2002 (the “Effective Date”), by and between the CITY OF CARLSBAD, a municipal corporation duly organized and validly existing under the Constitution and laws of the State of California, (the “City”), and CALAVERA HILLS I1 LLC, a California limited liability company (the “Developer”). WHEREAS, in order to finance the acquisition of certain public improvements, together with appurtenances and appurtenant work within the jurisdictional limits of said City, the Developer has requested that the City initiate proceedings to consider the formation of a land secured financing district (the “Financing District”) pursuant to the applicable laws of the State of California (the “Financing District Law”) and the policies of the City pertaining to the establishment of land secured financing districts (the “City Financing District Policies”) in effect as of the Effective Date; and, WHEREAS, Developer, in order to proceed in a timely way with development of its properties known as Calavera Hills and depicted in Exhibit A hereto (the “Calavera Hills Property”) and the property known as Robertson Ranch East and depicted in Exhibit A hereto (the “Robertson Ranch East Property” and, together with the Calavera Hills Property, the “Property”), desires to construct certain public improvements generally depicted in Exhibit A and described in Exhibit B that will, following the completion of the construction thereof, be acquired, owned, operated and maintained by the City (each an “Improvement” and collectively, the “Improvements”); and, WHEREAS, the City and Developer agree that the Improvements may, upon the completion of the construction thereof, be acquired by the City from the proceeds of bonds issued for or on behalf of the Financing District (the “Bonds”) at prices not to exceed that share of the cost of such Improvements reasonably allocated to the Property if the Financing District is a community facilities district or allocated to the Property based upon the special benefit received by the Property from the Improvements if the Financing District is an assessment district and determined pursuant to and in accordance with the provisions of this Agreement; and, WHEREAS, the City and the Developer further agree that payment by the City for the acquisition of the Improvements shall be funded solely from the proceeds of such bonds which shall be secured by assessment or special tax liens, as applicable, on properties within the Financing District; and, WHEREAS, it is the intent of this Agreement that Developer shall be entitled pursuant to the provisions of this Agreement to be paid for the Improvements at the prices as determined by the City pursuant to this Agreement upon: (i) the completion of the construction of the Improvements as required herein, (ii) the formation of the Financing District and the confirmation of the levy of assessments or special taxes on properties within the Financing District, and (iii) the sale and delivery of bonds by the City for the Financing District; and, WHEREAS, the Financing District may consist of separate benefit areas, in the case in which the Financing District is an assessment district, or improvement areas, in the case in which the Financing District is a community facilities district, corresponding to the Calavera Hills Property and 1 11.12.02 Robertson Ranch East Property for which separate discrete series of bonds could be issued secured by the assessments or special taxes authorized to be levied within each benefit area or improvement area; and WHEREAS, notwithstanding the intent of the parties as set forth in the preceding recital, the parties acknowledge that the decision of the City Council to form the Financing District is a legislative action and that the City Council, by its approval of this Agreement, may not and is not obligating itself or committing itself or any future City Council to approve the formation of the Financing District; and WHEREAS, the City is willing to acquire the Improvements from Developer subject to the requirements, in effect as of the date of formation of the Financing District, of both the Financing District Law and the City Financing District Policies and the terms and conditions of this Agreement and Developer desires that the City so acquire such Improvements. NOW, THEREFORE, IT IS MUTUALLY AGREED between the respective parties as follows: SECTION 1. Recitals. The above recitals are all true and correct. SECTION 2. Design and Construction of Improvements. Developer covenants and agrees that each Improvement to be acquired fiom Developer pursuant to this Agreement shall be designed and constructed pursuant to the terms and conditions set forth in the applicable subdivision improvement agreement (“Subdivision Improvement Agreement”) entered into by and between the City and the Developer as of the Effective Date or to be entered into by and between the City and the Developer after the Effective Date but prior to commencement of the construction of the Improvements to which such Subdivision Improvement Agreement applies. Wherever the terms and conditions of the Subdivision Improvement Agreement and this Agreement may conflict, the terms and conditions of the Subdivision Improvement Agreement shall prevail. SECTION 3. Bid and Award of the Contract or Contracts for the Construction of the Improvements. Except as provided below, the Developer shall solicit bids for the construction of the Improvements to be acquired with the proceeds of the Bonds and shall award the contract or contracts for such construction pursuant to the procedures and requirements as shall be set forth in the City of Carlsbad Engineering Department Administrative Procedures for Reimbursable Public Works Projects (the “Administrative Procedures”) to be established by the City Engineer of the City. City agrees to provide Developer with written notification of the establishment of the Administrative Procedures. As of the Effective Date hereof, the Developer had solicited bids for, awarded and entered into the following contracts, copies of which are on file in the office of the City Engineer: A. Grading contract with Signs & Pennick; B. Storm drain contract with Cass Construction; and C. Surveying contract with Hunsaker & Associates. 2 3 11.12.02 Prior to the solicitation and award of such bids, the City Engineer reviewed the procedures proposed to be used by the Developer in the solicitation and award of such bids and determined that such procedures substantially complied with the proposed Administrative Procedures and, therefore, the solicitation and award of such contracts shall be deemed to comply with the provisions of this Section 3. Notwithstanding the foregoing, such determination of compliance shall not constitute a waiver of any provision of the laws of the State of California that may apply to the solicitation, award or administration of such contracts. Prior to establishment of the Administrative Procedures by the City Engineer, contracts for the construction of the Improvements, other than the contracts identified in the preceding paragraph, shall be bid and awarded pursuant to procedures and requirements approved by the City Engineer. Such approval shall not, however, constitute a waiver of any provision of the laws of the State of California that may apply to the solicitation, award or administration of such contracts. SECTION 4. Inspection and Acceptance of the Improvements. The construction activities relating to the Improvements shall be subject at all reasonable times to inspection by authorized representatives of City pursuant to the terms and conditions of the Subdivision Improvement Agreement. SECTION 5. Eligibility of Payment of the Base Increment or Retained Increment. Once an Improvement is substantially complete, then such Improvement shall be eligible for payment of the Base Increment of the Purchase Price (as defined in Section 7 below). For purposes of this Agreement, an Improvement shall be deemed "substantially complete" when construction or work with respect to the Improvement has progressed to the point where it is sufficiently complete in the judgment of the City Engineer of the City or his or her designee (the "City Engineer") so that the Improvement is open to the public or otherwise could be opened to the public but for the fact that such opening has been withheld or delayed solely by the City An Improvement shall be eligible for payment of the Retained Increment (as defined in Section 7 below) of the Purchase Price for such Improvement upon the determination by the City Engineer that each of the following has occurred: (a) Acceptance of the Improvement by the City pursuant to the Subdivision Improvement Agreement and the City's municipal code; and (b) The Notice of Completion for the Improvement has been recorded as provided for in Section 6 below and a period of at least 35 days has elapsed since the date of such recordation. SECTION 6. Notice of Completion and Lien Releases. Upon completion of the construction of an Improvement, Developer shall notify the City Engineer in writing of such completion and shall prepare and execute a Notice of Completion for such Improvement in the form prescribed by Section 3093 of the California Civil Code and shall record such notice in the Official Records of the County of San Diego. Developer shall cause its contractors to provide unconditional lien releases for such Improvement in accordance with Section 3262 of the Civil Code. 3 11.12.02 SECTION 7. Payment of Purchase Price. (a) Amount of Purchase Price. The amount to be paid by City for the Improvements to be acquired from Developer (the “Purchase Price”) shall, as to each such Improvement, be determined by City in accordance with the provisions of this Section. The Purchase Price shall equal the lesser of the actual cost or the value of the Improvement; provided, however, if the Financing District is an assessment district, the value of an Improvement shall equal the aggregate special benefit received by the Property from the Improvement as determined by the assessment engineer retained by the City and shown in the final assessment engineer’s report as approved by the City Council. . The estimated costs of the Improvements are shown in Exhibit B. The actual cost of an Improvement for purposes of determining the Purchase Price of such Improvement shall include all costs of construction thereof and all incidental costs of the construction of such Improvement eligible under the Financing District Law and the City Financing District Policies, including the following: (i) Usual and customary design and engineering costs including civil engineering, soils engineering, landscape architecture, survey and construction staking, utility engineering and coordination, plan check and inspection fees as they relate to the Improvements only. (ii) Costs of acquisition of off-site rights-of-way and/or easements located on properties not owned by the Developer including the following: a. Appraisal and title insurance costs; b. Costs of preparing acquisition plats; c. The appraised value or actual cost of right-of-way or easement, whichever is less; provided, however, the amount authorized to be included in the cost of acquisition for right-of-way to be acquired from the Carlsbad Unified School District pursuant to this subsection c. shall be subject to determination by the City at a hture date; and d. Legal fees and costs approved by the City Attorney related to (1) the negotiated acquisition of such rights-of-way or easements, e.g., preparation of a purchase agreement and related escrow instructions, or (2) acquisition through eminent domain proceedings. (iii) The cost of the acquisition of the leasehold interest of Parkway Nursery as the lessee of land owned by the Developer within the right-of-way alignment for Cannon Road necessary to enable the Developer to provide the City with clear title to such right-of- way including the following: a. The appraised value of such leasehold interest as determined by an appraisal conducted for the City; and 4 11.12.02 b. Relocation expenses, if any, which are legally required to be provided to such lessee. (iv) Costs of environmental review, permitting and habitat mitigation related to the Improvement, including the value of the land owned by the Developer required for such mitigation and not required to be dedicated to the City or a third party as a condition of approval of the land use entitlements for the development of the property within the District, to the extent authorized to be financed pursuant to the City Financing District Policies and not previously reimbursed. The value of any such land shall be the lesser of (1) the amount paid by the Developer to acquire such land plus the cost, if any, to convert such land to wetlands or habitat, as applicable, or (2) $1 10,000 per acre for wetland mitigation land and $29,693 per acre for other habitat mitigation land. The actual value of any such land that may be included in the Purchase Price of an Improvement may be fbrther limited by the rules of the Internal Revenue Service of the United States government if such land is to be owned by an entity that is not a political subdivision or a qualified 501(c)3 corporation. The mitigation that may be financed shall be limited to the scope of mitigation necessary to mitigate the impacts of such Improvement on existing residences as set forth in the applicable environmental documentation for the Improvements. (v) An amount equal to 4.5% of the direct cost of construction of the Improvement (excluding all incidental costs, including but not limited to, the costs set forth in subparagraphs (i), (ii) and (iii)) for Developer’s overhead, construction management and supervision, including all on-site supervision. (vi) An amount equal to 1.5% of the direct cost of construction of the Improvement, excluding all incidental costs, including but not limited to, the costs set forth in subparagraphs (i), (ii) and (iii), for costs of premiums paid for improvement and/or performance bonds relating to construction of the Improvements. (vii) An amount equal to 1.8% of the direct cost of construction of the Improvement, excluding all incidental costs, including but not limited to, the costs set forth in subparagraphs (i), (ii) and (iii), to reimburse Developer for the allocable portion of premiums paid by Developer for blanket liability insurance coverage. However, in no event shall the actual cost or value of the construction of the Improvements be deemed to exceed the total of (A) the construction contract prices set forth in the contracts and change orders approved in accordance with the Administrative Procedures and (B) the additional items in (i) through (vii) above. (b) Incremental Payment of Purchase Price. The Purchase Price for an Improvement shall be payable in not to exceed two increments: the “Base Increment” which shall be an amount equal to 90% of the Purchase Price for such Improvement and the “Retained Increment” which shall be an amount not to exceed the remaining, unpaid portion of the Purchase Price for an Improvement determined pursuant to the provisions of (a) above upon completion of the Improvement. 5 11.12.02 (c) Requisition for Incremental Payment of Purchase Price. (i) Base Increment. The Developer may submit a written request or written requests to the City Engineer for the payment of 90% of the costs incurred to the date of the request for payment of the Base Increment for an Improvement when such Improvement is substantially complete as such term is described in Section 5 above. Each Base Increment payment request must be in the form attached hereto as Exhibit C, which is incorporated herein by this reference, and shall be properly executed. Each request for payment of the Base Increment for an Improvement shall be accompanied by a copy of the following documents related to the construction of such Improvement and supporting the particular payment request: (1) a list including the name of each applicable contractor, subcontractor and materialman for the Improvement, (2) each applicable construction contract (unless submitted with a prior payment request in which case reference shall be made to such contract and such prior payment request), (3) each applicable change order (unless submitted with a prior payment request in which case reference shall be made to such change order and such prior payment request), (4) each applicable invoice submitted pursuant to such construction contracts, (5) copies of the front and back of cancelled checks or other evidence of payment of each invoice satisfactory to the City Engineer and (6) written conditional lien releases executed by each applicable contractor, subcontractor and materialman in a form satisfactory to the City Attorney of the City (the “City Attorney”) for the Improvement. (ii) Retained Increment. The Developer may submit a written request or written requests to the City Engineer for the payment of the Retained Increment for an Improvement in the form attached hereto as Exhibit Cy which is incorporated herein by this reference. (iii) Improvements Financed from the Proceeds of a Loan Secured by the Property. If an assessment district is formed to finance the acquisition of the Improvements, the Developer constructing any such Improvement must as a precondition to any payment by the City for such Improvement provide a letter to the City Engineer specifying how the construction of such Improvement was financed. If any such Improvement was financed, in whole or in part, from the proceeds of a loan secured by a mortgage or deed of trust upon the Property or any portion thereof, any payment request submitted hereunder must be executed by an authorized representative of such lender acknowledging and agreeing to the payment to the payee as set forth in the payment request or the City Engineer shall have otherwise received written instructions from and executed by an authorized representative of such lender and the Developer with respect to such payment. (d) Review of Payment Request. The City Engineer or his designee shall review each payment request and the supporting documentation accompanying such payment request. If the City Engineer finds that any such payment request is incomplete, improper or otherwise not suitable for approval, the City Engineer shall inform Developer in writing within sixty (60) days after receipt thereof, the reasons for his or her finding. Developer shall have the right to respond to this finding by submitting further documentation and/or to resubmit the payment request. The City Engineer shall review any further documentation received from the Developer in support of a payment request and inform 6 11.12.02 Developer of his or her approval or denial of the payment request as supplemented in accordance with this Section within twenty (20) days after receipt of the supplemental documentation. A resubmittal of a payment request shall be deemed a new payment request for purposes of this Section. Costs incurred under a construction contract for an Improvement entered into pursuant to the requirements of this Agreement and change orders approved in accordance with the Administrative Procedures are deemed to be reasonable and, subject to the other provisions of this Agreement, shall be included in the Purchase Price for such Improvement. The City Engineer shall, after the sale of the Bonds pursuant to Section 16 the proceeds of which are intended to be used to acquire the subject Improvements and after his or her approval of a payment request, immediately forward a request to the Finance Director of the City notifying the Finance Director of his or her approval of the payment request and requesting that such payment be made to the appropriate payee. The Finance Director shall process any such request of the City Engineer pursuant to the applicable procedures of the Finance Department and shall make or authorize such payment pursuant to such procedures and subsection (e) below. (e) Payment. (i) Payment for Improvements. The City and the Developer acknowledge and agree that the aggregate amount to be paid by the City to acquire the Improvements is limited to the aggregate amount of the Bond proceeds that will be available for the payment thereof. (ii) Timing of the Payment of the Purchase Price for an Improvement. Subject to the limitations contained in (iii) and (iv) below, the increment of the Purchase Price for-each Improvement shall be paid to Developer within thirty (30) days after the date of the City Engineer's approval of the payment request for any such increment; provided, however, no Retained Increment may be paid earlier than thirty-five (35) days after the recording of a Notice of Completion for the Improvement. (iii) Source of Payment. Except as provided in the following paragraph, the Purchase Price or any increment thereof for an Improvement shall be payable to the Developer solely from those proceeds of the sale of the Bonds as provided in Section 16 hereof authorized and designated for the payment for such Improvement, after all costs of formation of the Financing District and all costs of issuance of such Bonds have been paid and deposits of accrued and capitalized interest to the redemption fund and the initial deposit to the reserve fund have been made. (iv) Withholding of Payment. In addition to the foregoing, the City shall have the right to withhold payment of the Purchase Price or any increment thereof of any Improvement if (a) the Developer is delinquent in the payment of (1) any assessment installments or special taxes, as applicable, levied by the City andor (2) ad valorem taxes levied on properties then owned by the Developer within the Financing District, (b) the City Engineer reasonably determines that the Developer is not then in substantial compliance with all applicable 7 11.12.02 conditions and obligations imposed upon the Developer hereunder or under the Subdivision Improvement Agreement or upon the Development pursuant to the land use entitlements approved by the City for the Development, including but not limited to, payment of all applicable fees, dedication of all applicable rights-of-way or other property, and construction of all applicable public improvements. The Finance Director shall provide written notice to the Developer of the decision to withhold any such payment and shall specify the reason for such decision. If the payment is withheld as a result of the delinquency in the payment of assessment installments or special taxes, the notice shall identify the delinquent parcels and the amount of such delinquency. If the payment is withheld as a result of substantial non- compliance with a condition or obligation, the notice shall specify such condition or obligation and what action will be necessary by the Developer to substantially comply with such condition or obligation. Upon receipt by the Finance Director of evidence reasonably satisfactory to the Finance Director of the payment of the delinquent assessments or special taxes or upon the determination by the Finance Director that the Developer has substantially complied with the subject condition or obligation, the Finance Director shall forthwith cause any payment which has been withheld pursuant to the provisions of this paragraph to be made. SECTION 8. Audit. The authorized representatives of City shall have the right, upon five (5) days, i.e., days on which the City offkes are open for business, prior written notice to Developer and during normal business hours, to review all books and records of Developer pertaining to costs and expenses incurred by Developer in construction of the Improvements. SECTION 9. Indemnification by Developer. Developer shall defend, indemnify and hold harmless the City, its officers, directors, employees and agents from and against any and all claims, losses, liabilities, damages, including court costs and reasonable attorneys’ fees by reason of, or resulting from, or arising out of the proceedings to form the Financing District. Notwithstanding the foregoing, Developer shall have no obligation to defend, indemnifl or hold harmless the City, its officers, directors, employees and agents from and against any such claims, liabilities, losses or damages (including court costs and attorneys’ fees) which result from or arise out of the sole negligence or willful misconduct of the City, its officers, directors, employees, or agents. SECTION 10. Obligation of City. The City has no legal or financial obligation to construct or finance the actual construction of the Improvements. All costs incurred for actual construction of the Improvements, including all incidentals thereto, shall be borne by Developer, and the obligations of the City are limited to the acquisition of the Improvements pursuant to the provisions of this Agreement. SECTION 1 1. Failure by Developer to Construct Improvements. If the City determines at any time following commencement of the construction of any Improvement that such construction has not been completed prior to the deadline date for completion of such Improvement as set forth in the Subdivision Improvement Agreement, the City may give written notice of such failure of performance to the Developer. Developer shall have sixty (60) days from the date of receipt of such notice to either (i) cure such failure of performance by demonstrating to the satisfaction of the City during such cure period reasonable progress in the construction of the Improvement and a continuing 8 11.12.02 ability to complete the construction of such Improvement in accordance with the Subdivision Improvement Agreement or (ii) reasonably demonstrate that such failure of performance is due to circumstances or conditions beyond Developer's reasonable control ("Force Majeure") including, without limitation, the City's actions, omissions or inaction which result in a delay of performance by Developer, labor disputes, acts of God, war, riots, insurrections, civil commotions, moratoriums, inability to obtain labor or materials or reasonable substitutes for either, fire, unusual delay in transportation, and adverse weather conditions. Should Developer fail to reasonably demonstrate such reasonable progress or such continuing ability to complete the construction of such Improvement or Force Majeure, the obligation of the City to pay the Purchase Price for the acquisition of such Improvement pursuant to this Agreement may be terminated by the City by providing ten (1 0) days written notice to the Developer. Upon termination, the City may in its sole discretion then proceed to advertise and bid the balance of the construction of such Improvement, and except as provided in the following sentence there will be no further obligation on the part of the City for payment of the Purchase Price for such Improvement due to Developer pursuant to this Agreement. If, following the completion of the construction of such Improvement pursuant to a contract awarded by the City, there are surplus Bond proceeds that are eligible and authorized to be used to finance the acquisition of such Improvement, the Developer shall be entitled to payment to the extent of such funds of an amount equal to the costs, as determined the City Engineer, incurred by the Developer prior to such termination for the construction of such Improvement. In the event that the City chooses not to advertise and bid the balance of the construction of any such Improvement following such a termination, any monies remaining in the improvement fund for the District and set aside for the acquisition of such Improvement shall be transferred to the redemption fund for the Bonds and used to call outstanding Bonds. The provisions of this Section 1 1 shall constitute a cumulative remedy for the failure of the Developer to complete the construction of an Improvement by the deadline date set forth in the Subdivision Improvement Agreement. Exercise by the City of its rights provided by this Section 1 1 shall not constitute a waiver of any remedy that the City may have under the Subdivision Improvement Agreement in the event of a default by the Developer thereunder. SECTION 12. Agreement Contingent. This Agreement is contingent upon the formation of the Financing District, the authorization by the owners of property within the Financing District to levy assessments or special taxes therein and the successful sale of Bonds, and it shall be null and void if the first series of Bonds is not sold within a five (5) year period following the date of this Agreement. This time can be extended by request of the Developer and concurrence of the City Council. The City may, at its option, suspend the performance of its obligations under this Agreement if, during the 30-day statute of limitations period following the formation of the Financing District, any legal challenge is filed relating to the validity or enforceability of this Agreement, the Financing District proceedings or the issuance of the Bonds. The obligations of the City hereunder shall be reinstated upon the entry of a final judgment in any such proceedings upholding the validity and enforceability of the Agreement, the Financing District proceedings and the issuance of the Bonds. In the event that a final judgment or other final and non-appealable resolution is entered invalidating 9 11.12.02 or declaring unenforceable this Agreement, the Financing District proceedings or the issuance of the Bonds, the City may, at its option, terminate this Agreement. SECTION 13. Notice of Assessment or Special Tax. Developer, or the successor or assigns of the Developer, shall provide written notice as required by the Financing District Law andor the City Financing District Policies to all potential purchasers of lots in a form approved by the City Council. A copy of all such notices executed by actual purchasers shall be sent to the Finance Director. SECTION 14. Relationship to Public Works. This Agreement is for the acquisition of certain Improvements by City and the sale of the Bonds for the payment of acquisition costs for such Improvements and such other amounts as are herein provided, and is not intended to be a public works contract. In performing its obligations under this Agreement, Developer is an independent contractor and not the agent of City. City shall have no responsibility for payment to any contractor or supplier of Developer. SECTION 15. Assessments or Special Taxes - Compliance with City Financing District Policies. Assessments or special taxes, as applicable, levied within the Financing District shall comply with all applicable provisions of the Financing District Law and the City Financing District Policies unless a specific waiver of policy is approved by the City Council. SECTION 16. Sale of Bonds. If and when the Financing District is successfully formed and authorization for the levy of assessments or special taxes approved by the owners of property within the Financing District and authorization for the issuance of bonds approved, all in accordance with the Financing District Law and City Financing District Policies, the City shall proceed with the issuance and sale of a separate series of Bonds secured by unpaid assessments or special taxes, as applicable, on the properties within each benefit area or improvement area, as applicable, in the Financing District pursuant to the Financing District Law. Each series of the Bonds shall be sized so that as of the date of issuance the aggregate appraised value of all properties within (a) each benefit area or improvement area, (b) each village as designated on the land use entitlements applicable to the Calavera Hills Property and (c) each planning area as designated on the land use entitlements applicable to the Robertson Ranch Property of the Financing District securing the repayment of such Bonds shall be at least four (4) times the Land Secured Debt (defined below) allocable to each such property. “Land Secured Debt” means as to any assessed or taxable property, as applicable, the principal amount of all outstanding Bonds allocable to such property, together with the principal amount of any other indebtedness of any community facilities district secured by the levy of special taxes which is allocable to such parcel and the principal amount of any other fixed lien assessment levied against such property. The appraised value of such property for purposes of this paragraph shall be determined by an independent appraisal undertaken for the City utilizing appraisal assumptions approved by the City. The City may, in its sole discretion, accept a lower ratio of appraised value to Land Secured Debt or accept a form or forms of credit enhancement such as a letter of credit, cash deposit, Bond insurance or the escrow of Bond proceeds to offset a deficiency in the required value-to-debt ratio. In addition to and as a separate requirement, the total of the following taxes, assessments and special taxes appearing on the property tax bill, shall not exceed one point eight percent (1.8%) of 10 11.12.02 the sales price of newly developed properties kubject to the assessment or special tax lien, as applicable, of the Financing District as of the date of the close of escrow of the initial sale of any residential dwelling unit to such residential homeowner: A. Ad valorem property taxes. B. Voter approved ad valorem property takes in excess of one percent (1%) of the assessed value of the subject property. C. The estimated annual special taxes levied by all community facilities districts under consideration and any other community facilities district or other public agency. D. The annual assessment installments, inchding administrative surcharge, for any existing or proposed assessment district whether such assessment installments are utilized to pay debt service on bonds issued for such assessment district or to pay for maintenance or services. The proceeds of each series of the Bonds shall be used in the following priority to (i) fund a reserve fund for the payment of principal and interest with respect to such Bonds; (ii) fimd capitalized interest on such Bonds in an amount approved by the City; (iii) pay for costs of issuance of such Bonds including, without limitation, underwriter’s discount, bond counsel fees, printing, and fiscal agent fees; (iv) pay for that portion of the costs of forming the Financing District allocable to the benefit area or improvement area for which such series of Bonds is being issued, including reimbursement of advances of hnds to the City by Developer to pay costs incurred by the City in the formation of the Financing District and the issuance of the Bonds; and (v) pay the proportionate share of the costs of acquisition of the Improvements allocated to the benefit area or improvement area for which such series of Bonds is being issued pursuant to the provisions of this Agreement and consistent with the priorities set forth herein. The documents providing for the issuance of each series of the Bonds shall provide for the establishment of separate funds and accounts for each such series of the Bonds; provided, however, this requirement shall not apply to any bonds issued to refund any or all series of the Bonds. The timing of the issuance and sale of each series of the Bonds, the terms and conditions upon which such Bonds shall be issued and sold, the method of sale of such Bonds and the pricing thereof shall be determined solely by the City and shall conform to the applicable policies of the City and this Agreement. The sale of each series of the Bonds shall be subject to receipt by the City of a competitively bid or negotiated bond purchase agreement which is acceptable to the City. The sale of each series of the Bonds shall also be conditional upon the preparation of an official statement that is, in the sole judgment of the City, “deemed final” as such term is used in Rule 15c2-12 of the Securities and Exchange Commission (the “Rule”). Developer, on behalf of itself, any affiliates of the Developer and any successor or assign of the Developer, agrees (a) to provide all information regarding the development of its property within the Financing District, including the financing plan for such development, which are necessary to ensure that the official statement for such series of the Bonds secured by such Developer’s property within the Financing District complies with the requirements of the Rule and all other applicable federal and state securities laws; (b) to enter into a continuing disclosure agreement to provide such 11 11.12.02 continuing disclosure pertaining to the Financing District, the development thereof and the Developer as necessary to ensure ongoing compliance with the continuing disclosure requirements of the Rule and (c) to cause its counsel to provide an opinion of such counsel in a form satisfactory to the underwriter of such series of the Bonds and underwriter’s counsel or disclosure counsel, as applicable. SECTION 17. Effect of This Agreement on Other Agreements. Except as specifically provided herein, nothing contained herein shall be construed as releasing Developer from any condition of development or requirement imposed by any other agreement with City. SECTION 18. General Standard of Reasonableness. Any provision of this Agreement which requires the consent, approval, discretion or acceptance of any party hereto or any of their respective employees, officers or agents shall be deemed to require that such consent, approval or acceptance not be unreasonably withheld or delayed, unless such provision expressly incorporates a different standard. SECTION 19. Entire Agreement; Amendment. This Agreement and the agreements expressly referred to herein contains all of the agreements of the parties hereto with respect to the matters contained herein and no prior or contemporaneous agreement or understandings, oral or written, pertaining to any such matters shall be effective for any purpose. No provision of this Agreement may be modified, waived, amended or added to except by a writing signed by the party against which the enforcement of such modification, waiver, amendment or addition is or may be sought. SECTION 20. Notices. Any notice, payment or instrument required or permitted by this Agreement to be given or delivered to either party shall be deemed to have been received when personally delivered or seventy-two (72) hours following deposit of the same in any United States Post Ofice in California, registered or certified, postage prepaid, addressed as follows: Developer: Calavera Hills I1 LLC 2727 Hoover Avenue National City, CA 9 1950 Attn: Brian Milich City: City of Carlsbad 1635 Faraday Avenue Carlsbad, CA 92008 Attn: City EngineerEngineering Services Each party may change its address for delivery of notice by delivering written notice of such change of address to the other party. SECTION 2 1. Severability. If any provision of this Agreement is held to be illegal or unenforceable by a court of competent jurisdiction, the remainder of this Agreement shall be given effect to the fullest extent reasonably possible. 12 11.12.02 SECTION 22. Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the successors and assigns of the parties hereto. Developer may not assign its rights or obligations hereunder except upon written notice to City indicating the name and address of the assignee. Upon such notice and the assumption by the assignee of the rights, duties and obligations of the Developer arising under or from this Agreement, Developer shall be released by City from all future duties or obligations rising under or from this Agreement. Notwithstanding the preceding sentence, Developer may assign its rights and obligations hereunder as security to lenders for the purpose of obtaining loans to finance development within the Financing District, but no such assignment shall release Developer from its obligations hereunder to City. SECTION 23. Governing Law. This Agreement and any dispute arising hereunder shall be governed by and interpreted in accordance with the laws of the State of California. Additionally, this Agreement and the construction of the Improvements shall be subject to all City ordinances and regulations relating to the requirement of improvement agreements, land division, improvement security or other applicable development requirements. SECTION 24. Waiver. Failure by a party to insist upon the strict performance of any of the provisions of this Agreement by any other party, or the failure by a party to exercise its rights under the default of any other party, shall not constitute a waiver of such party's right to insist and demand strict compliance by any other party with the terms of this Agreement thereafter. SECTION 25. Singular and Plural; Gender. As used herein, the singular of any work includes the plural, and terms in the masculine gender shall include the feminine. SECTION 26. Counterparts. This Agreement may be executed in counterparts, each of which shall be deemed an original. SECTION 27. Construction of Agreement. This Agreement has been reviewed by legal counsel for both the City and the Developer and shall be deemed for all purposes to have been jointly drafted by the City and the Developer. No presumption or rule that ambiguities shall be construed against the drafting party shall apply to the interpretation or enforcement of this Agreement. The language in all parts of this Agreement, in all cases, shall be construed as a whole and in accordance with its fair meaning and not strictly for or against any party and consistent with the provisions hereof, in order to achieve the objectives of the parties hereunder. The captions of the sections and subsections of this Agreement are for convenience only and shall not be considered or referred to in resolving questions of construction. SECTION 28. No Obligation to Form Financing District. Developer acknowledges that the decision of the City Council of the City to form the Financing District is a legislative action and the City may not enter into an agreement to obligate the City Council to exercise its legislative discretion in a particular manner or for a particular result. This Agreement does not, therefore, in any way create a contractual, legal or equitable obligation of or commitment by the City to approve the formation of the Financing District. 13 11.12.02 SECTION 29. Recitals; Exhibits. Any recitals set forth above and any attached exhibits are incorporated by reference into this Agreement. SECTION 30. Authority of Signatories. Each signatory and party hereto hereby represents and warrants to the other party that it has legal authority and capacity and direction from its principal to enter into this Agreement, and that all resolutions and/or other actions have been taken so as to enable such party to enter into this Agreement. [End of page. Next page is signature page.] 14 11.12.02 Signature Page to AcquisitiodFinancing Agreement by and between the City of Carlsbad and Calavera Hills 11, LLC EXECUTED by and between the parties hereto on the day and year first hereinabove written. "CITY" BAD, a municipal co MAYOR ATTEST: APPROVED AS TO FORM: - LimJV- $.b6&- OIP'kAINE M. WOOD BALL fw/ CITY OF CARLSBAD F CARLSBAD STATE OF CALIFORNIA OF CALIFORNIA "DEVELOPER, CALAVERA HILLS I1 LLC, a California limited liability company By: McMillin Companies, LLC, a Delaware limited liability company Its Manager By: By: S-I CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California hf€ &)btk&, dof/sty Nhne and fib of Ofticer G., ‘Jane cue. wry Public’) I personally appeared Name($ of Signer@) personally known to me evidence to be the personv whose name(fl id- subscribed to the within instrument and ’ acknowledged to me that he/sW#wyexecuted the same in hislheFUkeiF authorized capacitym and that by his/- signaturw on the instrument the person#, or the entity upon behalf of which the personv acted, executed the instrument. ~2 proved to me on the basis of satisfactory Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer@) Other Than Named Above: Capacity(ies) Claimed by Signer 0 Corporate Officer - Title(s): 0 Partner - 0 Limited 0 General Signer Is Representing: 0 1999 Nallonal Notary Assmiallon - 9350 De Solo Ave , P.0 &x 2402 - Chaisworth. CA 91313-2402 * wwu.nationalnolary.org Rod. NO. 5907 Reorder: Call Toll-Free 1-800-876-5827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California Name($ of Sipnerls) 0 personally known to me evidence Jd ,proved to me on the basis of satisfactory acknowledged to me that helm executed the same in his/he&+ek authorized capacity@$ and that by hishe&ek signature@$ on the instrument the personlsf, or the entity upon behalf of which the personv acted, executed the instrument. Though the information below is not required by law, it may pfove valuable to persons rewing on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer 0 Individual 0 Corporate Officer - Title(s): 0 Partner - 0 Limited 0 General 0 Attorney-in-Fact 0 Guardian or Conservator Signer Is Representing: 0 1999 Nattonal Notary Association - 9350 De Solo Ave.. P.O. Box 2402 - Chalsworlh. CA 91313-2402 . www.nalionalnolary.Mg prod. NO. 5907 Reorder: Call Toll-Free 18Mt876-6827 11.12.02 Exhibit “A” Map of the Property A- 1 CANNON ROADICOLLEGE BOULEVARD EXTENSION -~ FINANCING DISTRICT NO. 01-02 ExnlBlT 'A' &/A ,... I,. PROPOSED DISTRICT IMPROVEMENTS ROBERTSON RANCH EAST PROPERTY [I CALAVERA HILLS PROPERN 11.12.02 Exhibit "B" IMPROVEMENT DESCRIPTION, ESTIMATED COSTS And Allocable Share of the Costs of Construction of Improvements Improvement Description and Estimated Costs 1 Improvement' Improvement No. 1, College Boulevard/Cannon Road connection as follows: College Boulevard from Cannon Road to Carlsbad Village Drive College Boulevard from south end of Calavera Hills II development to Carlsbad Village Drive (Reach C, full width) - full width grading to major arterial standards including slopes not adjacent to development and any surcharge (but not to include grading outside of the right-of-way in future developed areas), additional grading and improvements for meandering regional trail for bicycles and pedestrians in a public trail easement which is a part of the City-wide trail system, asphalt pavement to major arterial standard width on each side of a raised improved (hardscaping, landscaping and irrigation) median, modification of existing median north of Carlsbad Village Drive to provide left turn pocket, non-master plan storm drain facilities ( which excludes any Drainage Master Plan facilities subject to reimbursement from Local Drainage Area Fees), curb, gutter and sidewalk, bus turnout and furniture, street lighting, median curb, sewer, water and reclaimed water lines and appurtenances (excluding any portion of such costs reimbursable from sewer and/or water connection fees), erosion control landscaping and irrigation (located within an easement granted to the City), traffic signal at Carlsbad Village Drive and Cannon Road with College Blvd (excluding those portions reimbursed from Traffic Impact Fees and Public Facilities Fees), striping and signage, protection and relocation of existin utilities as required, dry utilities3 within the right-of-way as well as environmental mitigation costs and incidental costs of construction to the extent permitted in the Acquisition/Financing Agreement. College Boulevard from Cannon Road to south end of Calavera Hills II development (Reach B center lanes) - full width grading to major arterial standards including slopes not adjacent to development and any surcharge (but not to include grading outside of the right-of-way in future developed areas), additional grading for meandering regional trail for bicycles and pedestrians in a public trail easement which is a part of the City-wide trail system, 18 feet of pavement on each side of a raised unimproved (with an AC cap) median, non-master plan storm drain facilities ( which excludes any Drainage Master Plan facilities subject to reimbursement from Local Drainage Area Fees), median curb, sewer, water and reclaimed water lines and appurtenances (excluding any portion of such costs reimbursable from sewer and/or water connection fees), erosion control landscaping and irrigation (located within an easement granted to the City), transition to full improvements at inlet locations, southerly boundary of Calavera Hills and Cannon Road intersection including curb, gutter and additional paving, traffic signal at Carlsbad Village Drive and Cannon Road with College Blvd (excluding those portions reimbursed from Traffic Impact Fees and Public Facilities Fees), striping and signage, protection and relocation of existing utilities as required, as well as environmental mitigation costs3 and incidental costs of construction to the extent permitted in the Acquisition/Financing Agreement. 9 Estimated Cost' $6,707,862 $3,055,128 B- 1 11.12.02 1 Cannon Road from El Camino Real to College Boulevard (Reach 3 center lanes) - full width I ~ grading to major arterial standards including-slopes not adjacent to development and any surcharge (but not to include grading outside of the right-of-way in future developed areas), additional grading for meandering regional trail for bicycles and pedestrians in a public trail easement which is a part of the City-wide trait system, 18 feet of pavement on each side of a raised unimproved (with AC cap) median, any transition improvements needed along El Camino Real, non-master plan storm drain facilities (which excludes any Drainage Master Plan facilities subject to reimbursement from Local Drainage Area Fees), street lighting (partial), median curb, sewer, water and reclaimed lines and appurtenances (excluding any portion of such costs reimbursable from sewer and/or water connection fees), erosion control landscaping and irrigation (located within an easement granted to the City), transition to full improvements at inlet locations and Cannon Road with College Blvd and El Camino Real intersections including curb, gutter and additional paving, signal modification at Cannon Road and El Camino Real (excluding those portions reimbursed from Traffic Impact Fees and Public Facilities Fees), striping and signage, as well as environmental mitigation costs3 and incidental costs of construction to the extent permitted in the AcquisitionlFinancing Agreement. Detention Basin BJB (partial) - grading and construction of a 49 acre-foot Drainage Master Planned storm water retention basin, access road, and outlet structure (excluding any portion of the costs subject to reimbursement from Local Drainage Area Fees), as well as environmental mitigation costs3 and incidental costs of construction to the extent permitted in the AcquisitionlFinancing Agreement. Improvement No. 2. College Boulevard from Cannon Road to south end of Calavera Hills II development (Reach B frontage improvements) - demolition of interim improvements, 12.5 feet of pavement (outside lanes), curb and gutter, sidewalk, meandering trail, street lighting, median hardscape, landscape and irrigation, dry utilities3 within the right-of-way, striping and signage, traffic signals (excluding those portions reimbursed from Traffic Impact Fees and Public Facilities Fees) and appurtenances, sound walls, arterial road setback landscaping and irrigation, as well as environmental mitigation costs' and incidental costs of construction to the extent permitted in the AcquisitionlFinancing Agreement. Improvement No. 3. Cannon Road from El Camino Real to College Boulevard (Reach 3 1 $5,189,620 $1,797,342 frontage improvements) - demolition of interim improvements, 12.5 Get of pavement (outside lanes), curb and gutter, sidewalk, meandering trail, street lighting, median landscape and irrigation and median paving, dry utilities3 within the right-of-way, striping and signage, traffic signals (excluding those portions reimbursed from Traffic Impact Fees and Public Facilities Fees) and appurtenances, sound walls, arterial road setback landscaping and irrigation, as well as environmental mitigation costs3 and incidental costs of construction to the extent permitted in the Acquisition/Financing Agreement. Totals - 1/ The description of the Improvements set forth in this Exhibit "B" is preliminary and general. - 2/ Cost estimates are preliminary. In the event that the Financing District is an assessment district, final list of improvements shall be as approved by the City Council at time of district formation. the cost estimates set forth above have been generally based upon the assessment engineer's preliminary determination of the special benefit from the Improvements to be received by that portion of the Property that will subject to assessment (the "Assessed Special Benefit") and such cost estimates exclude the general benefit to be received from the Improvements. Such cost estimates do not, however, exclude the special benefit, if any, to be received by that portion of the Property that is or will be owned by any Agency as such term is defined in Government Code Section 53570(a), the State of California or the United States Government. The actual value of any Improvement upon which the Purchase Price for such Improvement may be based shall equal the aggregate Assessed Special Benefit for such Improvement as finally determined by the assessment engineer and set forth in the final Engineer's Report and confirmed by the City Council (the "Confirmed Assessed Special Benefit"). The Confirmed Assessed Special Benefit shall be net of any portion of the cost of construction of the Improvements that represents (a) the general benefit to be received from the Improvements and (b) the special benefit to be received $1,653,406 $3,092,568 $21,495,925 The B-2 11.12.02 - 31 by the portion of the Property that is or will be owned by any Agency, the State of California or the United States Government. Any such portion of the cost shall be born solely by the Developers as a Developer contribution in the form of a reduction in the Purchase Price for such Improvements to an amount not to exceed the Confirmed Assessed Special Benefit. The aggregate amount of the cost of dry utilities or mitigation land which are to be owned by an entity other than a “political subdivision” as such term is used in the Internal Revenue Code and regulations of the Internal Revenue Service which may be financed from the proceeds of tax exempt bonds issued for the Financing District shall be limited to 5% of the proceeds of such bonds which are eligible to be used to finance the acquisition of the Improvements. B-3 11.12.02 EXHIBIT “C” PAYMENT REQUEST NO. The undersigned (the “Developer”) hereby requests payment in the total amount of defined in the AcquisitiodFinancing Agreement by and among the City of Carlsbad (the “City”) and Developer and described in Exhibit A to that Agreement), all as more fully described in Attachment 1 hereto. In connection with this Payment Request, the undersigned hereby. certifies, represents and warrants to the City as follows: $ for the Base and/or Retained Increment of the Purchase Price of the Improvements (as 1. 2. 3. 4. 5. 6. He(she) is a duly authorized representative or signatory of Developer, qualified to execute this Payment Request for payment on behalf of Developer and is knowledgeable as to the matters set forth herein. The Improvements for which payment is requested were constructed in accordance with the requirements of the Agreement. If this Payment Request is for payment of all or a portion of the Base Increment include the following sentence: The Improvements that are the subject of this Payment Request for payment of the Base Increment have been opened by the City for use by the public or can be opened for use the public but such opening has been deferred solely by the City. If this Payment Request is for payment of all or a portion of the Retained Increment include the following sentence: The Improvements that are the subject of this Payment Request for payment of the Retained Increment have been accepted by the City Council of the City and the Notice of Completion for such Improvements, a copy of which is attached as Attachment 2 hereto, was recorded in the Office of the County Recorder of the County of San Diego on > 20”. The Purchase Price for the Improvements has been calculated in conformance with the terms of the Agreement. All costs for which payment is requested hereby are eligible costs (as permitted in the Agreement) and have not been inflated in any respect. The Base and/or Retained Increment for which payment is requested has not been the subject of any prior payment request paid by the City. Supporting documentation (such as third party invoices, change orders and checks) is attached with respect to each cost for which payment is requested. No mechanics liens or other encumbrances have attached, or to the best knowledge of Developer, after due inquiry, will attach to the Improvements. c- 4 11.12.02 I hereby declare under penalty of perjury that the above representations and warranties are true and correct. DEVELOPER: Dated: CITY Payment Request Approved for Submission to Finance Director CiGEngineer ~~ Dated: c- 5 11.12.02 ATTACHMENT 1 SUMMARY OF IMPROVEMENTS TO BE ACQUIRED AS PART OF PAYMENT REQUEST NO. Improvement Amount of Payment Amount Previously Paid Towards Purchase Price Requested [List here all Improvements for which payment is requested, and attach supporting documentation] c- 1