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HomeMy WebLinkAbout2003-01-21; City Council; 17050; Lennar Bressi Ranch Venture AgreementCITY OF CARLSBAD -AGENDA BILL ,B# 1TG. 1/21/03 INCLUDING SEWER, WATER AND TRAIL FACILITIES IEPT. ENG CITY ATTY. CONSTRUCTION AND FINANCING OF IMPROVEMENTS TO 17,050 TITLE: AGREEMENT WITH TWO DEVELOPERS FOR ACQUISITION, POINSETTIA LANE, EL FUERTE STREET AND EL CAMINO REAL RECOMMENDED ACTION: Adopt Resolution No. 2003-023 approving agreement with Lennar Bressi Ranch Venture LLC, a California limited liability company, and Real Estate Collateral Management Company, a Delaware corporation, for acquisition, construction and financing of improvements to Poinsettia Lane, El Fuerte Street and El Camino Real including sewer, water and trail facilities for Financing District No. 2001-01. ITEM EXPLANATION: On July 10, 2001, City Council authorized staff to work on the formation of a financing district to fund the construction of certain major road improvements including portions of Poinsettia Lane, El Fuerte Street and El Camino Real. On October 3, 2001 Council approved Resolution No. 2001-318 approving the Villages of La Costa project and on July 9, 2002, Council approved Resolution No. 2002-205 approving the Bressi Ranch project. As conditions of approval for the Villages of La Costa and Bressi Ranch projects, the developers, Real Estate Collateral Management Company (RECMC), a Delaware corporation and Lennar Bressi Ranch Venture LLC (Bressi), a California limited liability company, respectively, are required to financially guarantee and to construct portions of Poinsettia Lane, El Fuerte Street and El Camino Real including appurtenant sewer and water utilities and adjacent citywide trail facilities. The limits of the road improvements proposed for inclusion in the financing district are as follows: o Poinsettia Lane to full major arterial road standards from El Camino Real to the existing westerly terminus of Poinsettia Lane located just east of the future El Fuerte Street. o El Fuerte Street to full secondary arterial road standards from Palomar Airport Road to the existing northerly terminus of El Fuerte Street located just north of Rancho Pancho. o El Camino Real northbound frontage lane including curb and gutter, sidewalk and median improvements from Palomar Airport Road to just south of Camino Vida Roble, from Poinsettia lane to a few hundred feet north of Poinsettia Lane and along few hundred feet of frontage at a location half way between Cassia Road and Camino Vida Roble. In addition to the road improvements, the developer is requesting to include, within the system located within and/or adjacent to the dedicated rights-of-way for these roads. The improvements to be acquired, certain sewer and water utilities and a portion of the citywide trail developers are required to install the utility and trail improvements as a condition of their project approvals. Since the sewer and water utility improvements are subject to reimbursement from sewer and water connection fees, only those costs, incurred by the developers in constructing these utility improvements, in excess of the sewer and water reimbursement will be eligible for reimbursement from the proposed special financing district. Due to the time it takes to create a special financing district, the developers have expressed a need to proceed with construction of the specified public improvements proposed for inclusion 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(s) and public entity sponsoring the financing district enter into an acquisition agreement that specifies the conditions under which the property owner(s) may proceed with the construction of the designated facilities and expect to receive reimbursement for the cost of eligible improvements. The City entered into Page 2 of Agenda Bill No. similar agreements with the developers of Calavera Hills Phase 11, Carrillo Ranch, Carlsbad Ranch and Aviara for the construction of portions of Alga Road, Poinsettia Lane, College Boulevard, Cannon Road and Melrose Drive. City staff, working in concert with City bond counsel and the developers, Bressi and RECMC, developed the attached acquisition agreement allowing Bressi and RECMC to proceed with construction of the public facilities included within the financing district scheduled for formation in which the City will acquire qualifying improvements subject to the approval of the Deputy Public 2003. Under the agreement, the developers must construct the improvements to City standards after Works Director for Engineering Services. The terms of the agreement were reviewed and approved by the Special District Review Committee (Policy 33) and found to comply with all applicable City policies. 17,050 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 though 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 issuance are subject to Council approval in the future, the agreement does provide the following limits according to current Council policies: 1, The value to lien ratio for the total project and on a village by village basis must be 4:l (lower 2. Assessments, taxes and special taxes on a residential property tax bill shall not exceed 1.8% ratio is acceptable at City's discretion if appropriate credit enhancement is provided) of the sales price of the newly developed properties. These limits provide assurance that the assessments on the future property owners will not be excessive in comparison to other developments within Carlsbad and in comparison to other cities. The agreement also states that the developer assumes all risk for financing of the improvements to be acquired. 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 also clearly states that the decision of the City Council to form the District future City Council to approve formation of the District. is a legislative action and that approval of this agreement does not commit the City Council or any ENVIRONMENTAL IMPACTS: The City Council, at their meetings on October 3, 2001 and July 9, 2002 passed Resolution No.% 2001-318 and 2002-205 certifying EIR No. 98-07 and 98-05, respectively. These EIRs cover the construction of the designated portions of Poinsettia Lane, El Fuerte Street and El Camino Real that are subject to the proposed improvement acquisition agreement including the appurtenant sewer and water utilities and citywide trail improvements. 2 Page 3 of Agenda Bill No. 17,050 EXHIBITS: 1. Location Map 2. Resolution No. 2003-023 approving agreement with Lennar Bressi Ranch Venture LLC, a California limited liability company, and Real Estate Collateral Management Company, a Delaware corporation, for acquisition, construction and financing of improvements to Poinsettia Lane, El Fuerte Street and El Camino Real including sewer, water and trail facilities for Financing District No. 2001-01. 3. Acquisition/Financing Agreement 3 - PROPOSED FINANCING DISTRICTBOUNDARY @~pfl PROPOSED DISTRICTIMPROVEMENTS 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 RESOLUTION NO. 2003-023 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARLSBAD, CALIFORNIA, APPROVING AGREEMENT WITH LENNAR BRESSI RANCH VENTURE LLC, A CALIFORNIA LIMITED LIABILITY COMPANY, A DELAWARE CORPORATION, FOR ACQUISITION, COMPANY, AND REAL ESTATE COLLATERAL MANAGEMENT CONSTRUCTION AND FINANCING OF IMPROVEMENTS TO POINSETTIA LANE, EL FUERTE STREET AND EL CAMINO REAL INCLUDING SEWER, WATER AND TRAIL FACILITIES FOR FINANCING DISTRICT NO. 2001-01 WHEREAS, the City Council of the City of Carlsbad, California (“City”) has been petitioned by Lennar Bressi Ranch Venture LLC, a California limited liability company (“Bressi“), and Real Estate Collateral Management Company, a Delaware corporation (RECMC), (collectively “the Developers”), 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 Poinsettia Lane, El Fuerte Street and El Camino Real, including appurtenant sewer and water and trail facility improvements (“Improvements”); and, WHEREAS, the Developers in order to proceed in a timely way with development of their properties, known as Bressi Ranch and La Costa Villages Greens, desire 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; and, WHEREAS, the parties to this Agreement acknowledge that the decision of the City Council to form the 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 District. 11 NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Carlsbad. II 3 4 ! f 1 E IC I1 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 :alifornia, as follows: 1. That the above recitations are true and correct. 2. That the Agreement between the City of Carlsbad and the Developers for the gcquisition, construction and financing of said Improvements is hereby approved and the Mayor is authorized and directed to execute said agreement. PASSED, APPROVED AND ADOPTED at a regular meeting of the Carlsbad City Council leld on the Zlst day of January ,2003 by the following vote, to wit: AYES: Council Members Lewis, Finnila, Kulchin, Hall and pacbrd. NOES: None. hTTEST: ORwNE M. WOOD, City Clerk Page 2 of 2 of Resolution No. 2002-023. 6 Execution Copy ACQUISITION/FINANCING AGREEMENT THIS AGREEMENT is made and entered into this 21st day of January, 2003 (the “Effective Date”) , by and among 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 Lennar Bressi Ranch Venture, LLC, a California limited liability company ( “Lennar”) and Real Estate Collateral Management Company, a Delaware corporation (“RECMC”). Lennar, GA and RECMC may be referred to herein separately as a “Developer” and collectively as the “Developers”. WHEREAS, in order to fmance the acquisition of certain public improvements, together with appurtenances and appurtenant work within the jurisdictional limits of said City, the Developers have requested that the City initiate proceedings to consider the formation of a land secured financing district (the “Financing District”) as permitted pursuant to 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”); and, WHEREAS, Developers, in order to proceed in a timely way with development of their respective properties known as Bressi Ranch (a portion of which is owned by General American and depicted as Assessment No. 1 in Exhibit A-1 hereto and a portion of which is owned by Lennar and depicted as Assessment No. 2 in Exhibit A-1 hereto) (the “Bressi Ranch Property”) and the property known as La Costa Greens (owned by RECMC and depicted in Exhibit A-2 hereto) (the “La Costa Greens Property” and, together with the Bressi Ranch Property, the “Property”), desire to construct certain public improvements 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 Developers agree that the Improvements may, upon the completion of the construction thereof, be acquired by the City &om the proceeds of bonds issued for or on behalf of the Financing District 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 astrict 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 Developers 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 Developers 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 ofbonds by the City for the Financing District; and, 1 Execution Copy WHEREAS, the Financing District may consist of separate benefit areas or improvement areas corresponding to the Bressi Ranch Property and La Costa Greens 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 &om Developers subject to the requirements of the Financing District Law, the City Financing District Policies in effect at the time of the formation of the Financing District and this Agreement and Developers desire 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. RECMC covenants and agrees that each Improvement to be constructed by and acquired from RECMC pursuant to this Agreement shall be designed and constructed pursuant to the terms and conditions set forth in a Subdivision Improvement Agreement or Subdivision Improvement Agreements (each, a “RECMC Subdivision Improvement Agreement”) by and between the City and the RECMC prior to the commencement of the construction by RECMC of any such Improvements. Wherever the terms and conditions of a RECMC Subdivision Improvement Agreement and this Agreement may conflict, the terms and conditions of such RECMC Subdivision Improvement Agreement shall prevail. Letmar covenants and agrees that each Improvement to be constructed by and acquired from Lennar pursuant to this Agreement shall be designed and constructed pursuant to the terms and conditions to be set forth in a Subdwision Improvement Agreement or Subdivision Improvement Agreements (each, a “Lennar Subdivision Improvement Agreement”) to be entered into by and between the City and the Lennar prior to the commencement of the construction by Lennar of any such Improvements. Wherever the terms and conditions of a Lennar Subdivision Improvement Agreement and this Agreement may conflict, the terms and conditions of such Lennar Subdivision Improvement Agreement shall prevail. SECTION 3. Bid and Award of the Contract or Contracts for the Construction of the Improvements. A Developer shall solicit bids for the construction of any Improvement 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. 2 Execution Copy 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 applicable 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 sole judgment of the city engineer of the City or his or her designee (the "City Engineer") so that the Improvement is opened 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 may be deemed by the City Engineer to be "substantially complete" pursuant to the preceding sentence even though such Improvement is subject to the completion of a punch list of items before such Improvement would be eligible for acceptance 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 such Improvement by the City pursuant to the applicable Subdivision Improvement Agreement and the City's municipal code; and B. The Notice of Completion for such 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, the applicable 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. Such Developer shall cause its contractors to provide unconditional lien releases for such Improvement in accordance with Section 3262 of the Civil Code. 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 a Developer (the "Purchase Price") shall, as to each such Improvement constructed by such Developer, be determined by City in accordance with the provisions of this Section. The Purchase Price shall equal the lesser of the cost or the value of the Improvement; provided, however, in the case of an assessment district, the value of an Improvement shall not exceed the aggregate special benefit received by the Property from such Improvement as determined by the assessment engineer retained by the City for such assessment district and set forth in the final assessment engineer's report (the "Final Engineer's Report") for the Financing District as such Final Engineer's 3 Execution Copy Report may be amended prior to the issuance of Bonds for the Financing District to reflect adjustments to assessment lien amounts on specific properties made pursuant to Section 29 hereto. The estimated costs of the Improvements are shown in Exhibit B. The cost of an Improvement shall also include all costs of construction thereof and all incidental costs of the construction of such Improvement eligible under the Financing District Law and City Policies, including the following: (1) 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, together with such additional public agency fees related to the construction of such Improvements as may be identified in the Final Engineer's Report. (2) Costs of acquisition of off-site rights-of-way and/or easements located on properties not owned by such 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; and d. Legal fees and costs approved by the City Attorney related to (i) the negotiated acquisition of such rights-of-way or easements, e.g., preparation of a purchase agreement and related escrow instructions, or (ii) acquisition through eminent domain proceedings. (3) Costs of environmental review, permitting and habitat mitigation related to the Improvement. (4) 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 (l), (2) and (3), for such Developer's construction management and supervision including all on-site supervision. (5) 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 (l), (2) and (3), for costs of premiums paid for improvement and/or performance bonds relating to construction of the Improvements. (6) 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 4 Execution Copy subparagraphs (I), (2) and (3), to reimburse such Developer for the allocable portion of premiums paid by such Developer for blanket liability insurance coverage. In no event shall the cost of the construction of the Improvements be deemed to exceed the total of (i) the construction contract prices set forth in the contracts, (ii) change orders approved in accordance with the Administrative Procedures and (iii) the additional items in (1) through (6) above. B. Incremental Pavment 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 lesser of (1) the costs incurred to the date of the substantial completion (as such term is defined in Section 5 above) of such Improvement or (2) the value of 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 subsection A. above upon completion of the Improvement. C. Reauisition for Incremental Pavment of Purchase Price. (1) Base Increment. A Developer may submit a written request or written requests to the City Engineer for the payment of the Base Increment for an Improvement constructed by such Developer when the relevant portion of such Improvement is substantially complete as such term is defined in Section 5 above. It is the intention of the parties that payment requests for relevant portions of an Improvement may be submitted and processed even though payment will not be made until the entire Improvement for which such requests have been submitted is substantially complete. 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: (a) a list including the name of each applicable contractor, subcontractor and materialman for the Improvement, (b) each applicable construction contract (unless submitted with a prior payment request in which case reference shall be made to such contract and the applicable prior payment request), (c) each applicable change order (unless submitted with a prior payment request in which case reference shall be made to such contract and the applicable prior payment request), (d) each applicable invoice submitted pursuant to such construction contracts, (e) copies of the front and back of cancelled checks or other evidence of payment of each invoice satisfactory to the City Engineer and (0 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. The amounts in 7A(4), (5) and (6) are straight percentage amounts and the Developer need not provide separate cost and payment justifications for those amounts. (2) Petained Increment. A Developer may submit a written request or written requests to the City Engineer for the payment of the Retained Increment for an Improvement constructed by such Developer in the form attached hereto as Exhibit C. 5 Execution Copy (3) ?Ifan 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 irust 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 Pavment Reauest. The City Engineer or his designee shall review each payment request and the supporting documentation accompanying such payment request. If the City Engineer fmds that any such payment request is incomplete, improper or otherwise not suitable for approval, the City Engineer shall inform the applicable Developer in writing within sixty (60) calendar days after receipt thereof, the reasons for his or her finding. Such Developer shall have the right to respond to this finding by submitting further documentation andor to resubmit the payment request. The City Engineer shall review any further documentation received from such Developer in support of apayment request and inform such Developer of his or her approval or denial of the payment request as supplemented in accordance with this Section within twenty (20) calendar 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 notifjmg 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. (1) 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. (2) Timing of the Payment of the Purchase Price for an Improvement. Subject to the limitations contained in (3) and (4) below, the increment of the Purchase Price for each Improvement shall be paid to the Developer constructing such Improvement 6 Execution Copy within thirty (30) calendar 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 tlurty-five (35) calendar days after the recording of a Notice of Completion for the Improvement. (3) 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 constructing such Improvement 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, if any, to the redemption fund, bond service fund or the equivalent thereof and the initial deposit to the reserve fund have been made. (4) 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 the Developer constructing such Improvement (a) is delinquent in the payment of (i) any assessment installments or special taxes, as applicable, levied by the City and/or (ii) ad valorem taxes levied on properties then owned by such Developer within the Financing District or (b) is not then, in the reasonable judgment of the City Engineer, in substantial compliance with all applicable conditions and obligations imposed upon such Developer hereunder or under the applicable Subdivision Improvement Agreement, 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, within 15 calendar days of the determination to withhold any such payment, provide written notice to such Developer of the decision to withhold 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 such 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 such Developer has substantially complied with the subject condition or obligation, the Finance Director shall within 30 calendar days cause any payment which has been withheld pursuant to the provisions of this paragraph to be made. F. Time Periods. The inability of City or any Developer to perform within each time period set forth in this Section 7, notwithstanding its best efforts, shall not constitute a breach of this Agreement by such party. 7 Execution Copy SECTION 8. Audit. The authorized representatives of City shall have the right, upon five working (5) days, i.e., days on which the City offices are open for business, prior written notice to a Developer and during normal business hours, to review all books and records of such Developer pertaining to costs and expenses incurred by such Developer in construction of the Improvements. SECTION 9. Indemnification by Developer. Each Developer shall defend, indemnify and hold harmless the City, its officers, directors, employees and agents fiom and against any and all claims, losses, liabilities, damages, including court costs and reasonable attorneys' fees by reason of, or resulting kom, or arising directly or indirectly out of (a) the failure of any Improvements constructed following the adoption of the resolution of intention to form an assessment district or the resolution of formation of a community facilities district to be constructed under the direction and supervision, or under the authority, of the City, (b) the solicitation by any Developer, its contractors, officers, directors, employees and agents of bids for the construction of the Improvements, (c) the award and administration by any Developer, its contractors, officers, directors, employees or assigns of contracts for the construction of the Improvements, (d) the supervision by any Developer, its contractors, officers, directors, employees or assigns of the construction of the Improvements, (e) the design and construction of the Improvements and (f) the proceedings to form the Financing District. Notwithstanding the foregoing, the Developers shall have no obligation to defend, indemnify or hold harmless the City, its officers, directors, employees and agents fiom 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 offkers, 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 Developers, and the obligations of the City are limited to the acquisition of the Improvements pursuant to the provisions of this Agreement. SECTION 11. Failure by Developers 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 applicable Subdivision Improvement Agreement, the City shall give written notice of such failure of performance to the applicable Developer, with a copy to each of the other Developers. Such Developer shall have sixty (60) calendar days fiom 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 ability to complete the construction of such Improvement in accordance with the applicable Subdivision Improvement Agreement or (ii) reasonably demonstrate that such failure of performance is due to circumstances or conditions beyond the applicable Developer's reasonable control ("Force Majeure") including, without limitation, the City's actions, omissions or inaction which result in a delay of performance by the applicable 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 the applicable 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 8 Execution Copy Price for the acquisition of such Improvement pursuant to this Agreement may be terminated by the City by providing ten (IO) calendar days written notice to the applicable Developer, with a copy to each of the other Developers. 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 the applicable 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 by 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 Financing 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 11 shall constitute a cumulative remedy for the failure of a Developer to complete the construction of an Improvement by the deadline date set forth in the applicable Subdivision Improvement Agreement. Exercise by the City of its rights provided by this Section 11 shall not constitute a waiver of any remedy that the City may have under the applicable 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 period within which the first series of Bonds must be sold can be extended by request of the Developers 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 or declaring unenforceable this Agreement, the Financing District proceedings or the issuance of the Bonds, the City may, at its option, terminate this Agreement by giving thirty (30) calendar days advance written notice of such termination to the Developers. SECTION 13. Notice of Assessment or Special Tax. Developers, or the successor or assigns of the Developers, shall provide written notice of the assessment or special tax, as applicable, as required by the Financing District Law and/or the City Financing District Policies to all potential purchasers of lots as required under a disclosure program and in a form or forms approved by the City Council prior to the sale of Bonds. 9 Execution Copy 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, a Developer is an independent contractor and not the agent of City. City shall have no responsibility for payment to any contractor or supplier of such Developer. SECTION IS. 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. A. Issuance of Bonds: Reauired Value to Debt Ratio. 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, 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, for each of the Bressi Ranch Property and the La Costa Greens Property in the Financing District (the “Bonds”) to be issued pursuant to the Financing District Law. Each series of the Bonds shall be sized so that, as of the date of issuance of the applicable series of the Bonds, (i ) the aggregate appraised value of all properties within the Bressi Ranch Property or the La Costa Greens Property, as applicable, shall be at least four (4) times the Land Secured Debt (defined below) allocable to the properties within each such benefit or improvement area and (ii) the aggregate appraised value of all properties within each discrete development area designated by the Finance Director within the Bressi Ranch Property or the La Costa Greens Property, as applicable, shall also be at least four (4) times the Land Secured Debt (defined below) allocable to the properties within each such discrete development area. “Land Secured Debt” means as to any taxable property, 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. B. Ageregate Taxes and Assessments. In addition to and as a separate requirement, the total of the following taxes, assessments and special taxes appearing on the property tax bill for residential dwelling units, shall not exceed one uoint eight oercent (1.8%) of the sales price of newly developed properties subject to the assessment or special tax lien, as applicable, of the Financing District for the initial sale of any residential dwelling unit to such residential homeowner: (1) Ad valorem property taxes. 10 Execution Copy (2) Voter approved ad valorem property taxes in excess of one percent (1%) of the assessed value of the subject property. (3) The estimated annual special taxes levied by all community facilities &stricts under consideration and any other community facilities district or other public agency. (4) The annual assessment installments, including 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. C. Funds and Accounts. 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) fund 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 Bressi Ranch Property or the La Costa Greens Property, as applicable, for which such series of the Bonds is being issued, including reimbursement of advances of funds to the City by Developers 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 Bressi Ranch Property or the La Costa Greens Properly, as applicable, for which such series of the 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. D. Conditions of the Sale of 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. Notwithstanding the foregoing, the City shall not issue and sell any series of Bonds without first meeting and consulting with the applicable Developer or Developers regarding the timing, terms and conditions and method of sale of such Bonds. 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 15~2-12 of the Securities and Exchange Commission (the “Rule”). Each Developer, on behalf of itself, any affiliates of each such Developer and any successor or assign of each such 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 continuing disclosure pertaining to the Financing District, the development thereof and each such Developer as necessary to ensure ongoing compliance with the 11 Execution Copy 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 the Developers 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 Office in California, registered or certified, postage prepaid, addressed as follows: Developers: Morrow Development, Inc. 1903 Wright Place, Suite 180 Carlsbad, CA 92008 Attention: Fred Arbuckle Lennar Bressi Ranch Ventures, LLC 24800 Christianta Drive Mission Viejo, CA 92691 Attention: Graham Jones City: City of Carlsbad 1635 Faraday Avenue Carlsbad, CA 92008 Attn: City Engineer Each party may change its address for delivery of notice by delivering written notice of such change of address to the other party. 12 Execution Copy SECTION 21. 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. 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. Neither Developer may 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 a Developer arising under or from this Agreement, such Developer shall be released by City from all future duties or obligations rising under or from this Agreement. Notwithstanding the preceding sentence, a 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 such 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 Developers and shall be deemed for all purposes to have been jointly drafied by the City and the Developers. 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. Developers acknowledge 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 13 Execution Copy formation of the Financing District. In no event shall the Financing District be formed prior to the dedication or receipt by the City of an irrevocable offer of dedication of all rights of way necessary for the construction of Improvement No. 1 (Poinsettia Lane fiom El Camino Real easterly to connect with the easterly terminus of Poinsettia Lane at the westerly boundary of Rancho Canillo). SECTION 29. Adjustment of Lien Amount. The parties acknowledge that the presence of assessment or special tax liens on certain properties could adversely affect the feasibility of the use of such properties for certain purposes. Each Developer shall have one (1) opportunity to discharge the lien amount for any such property or properties as such Developer may elect by agreeing to a reduction in the Purchase Price for the Improvements for which such property or properties are being assessed or taxed. Any discharge of a lien pursuant to this Section 29 must be completed not less than 120 calendar days prior to the estimated date of issuance of the Bonds that would otherwise be secured by such lien. Nothing in this section shall prohibit any property owner f?om prepaying the assessment on such owner’s property within the Financing District pursuant to the applicable Financing District Law. SECTION 30. Recitals; Exhibits. Any recitals set forth above and any attached exhibits are incorporated by reference into this Agreement. SECTION 31. 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 hm its principal to enter into this Agreement, and that all resolutions andor 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 EXECUTION COPY Signature Page to AcquisitiodFinancing Agreement by and between the City of Carlsbad, Lennar Bressi Ranch Venture, LLC, and Real Estate Collateral Management Company EXECUTED by and between the parties hereto on the day and year first hereinabove written. “CITY” h MAYOR ATTEST: / APPROVED AS TO FORM: RONALD R. BALL, CITY ATTORNEY LO puty City Attorney CLE “DEVELO RS” LENNAR BRESSI RANCH VENTURE, LLC A California limited liability company By: Lennar Bressi Carlsbad, LLC A California limited liability company Its: Managing Member By: Lennar Homes of California, Inc. A California corporation Its: Man- Its: Vice President s- 1 STATE OF CALIFORNIA ) COUNTY OF ORANGE ) On Januarv 13,2003 , before me, Shanna Joy Awender the undersigned, a Notary Public in and for said State, personally appeared Graham Jones personally known to me (h) to be the person(*) whose name(*) is/- subscribed to the within instrument and acknowledged to me that he/&&hey executed the same in his- authorized capacity(%), and that by hisk&.k& signature(*) on the instrument the person(*), or the entity upon the behalf ofwhich the person(s) acted , executed the instrument. ) ss. WITNESS my hand and official seal. EXECUTION COPY REAL ESTATE COLLATERAL MANAGEMENT COMPANY, a Delaware corporation By: David A. Watts Its: Vice President Proper notarial acknowledgment of execution by Developers must be attached to this document. President or vice-president AND secretary, or assistant secretary must sign for corporations. If only one officer signs, the corporation must attach a resolution certified by the secretary or assistant secretary under corporate seal empowering that officer to bind the corporation with his or her signature alone. s-2 SATE OF Illinois COUNTY OF Cook ss. On January 13,2003, before me, Diana C. Moreno, Notary public PERSONALLY APPEARED, David A. Watts personally known to me to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity and that by his signature on the instrument the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal EXECUTION COPY Exhibit “A - 1” Map of the Bressi Ranch Property A-1-1 ASSESSMENT DIAGRAM OF ASSESSMENT DISTRICT NO. 2002-01 (POINSETTIA LANE EAST) OF THE CrrY OF CARLSBAD CWNW OF SAN DIEGO, STATE OF CAUFORNlA LEGEND BENEFIT AREA NO. 1 SCALE: I " = 500 GRlPHlCIl SCALE .. . . EXECUTION COPY Exhibit “A-2” Map of the La Costa Greens Properties A-2-1 .. .. ." .... EXECUTION COPY Exhibit "B" Improvement Description and Estimated Costs October 3,2002 ~______~~ Improvement' Poinsettia Lane from El Camino Real easterly to connect to the existing terminus of Poinsettia Lane at the westerly boundary of Rancho Carrillo including transition pavement lanes and appurtenances on El Camino Real as shown on Drawing No. 397-21. way in future developed areas), erosion control landscaping and irrigation (located within an Full width grading to major arterial standards (but not to include grading outside of the right-of- easement granted to the City), parkway landscaping and irrigation (located within an easement granted to the City), asphalt pavement to major arterial standard width on either side of a raised median, median curb, median hardscaping and landscaping with irrigation, curb and gutter, sidewalk, meandering regional trail for bicycles and pedestrians in a public trail easement which is a part of the City-wide trail system, storm drain facilities within the right-of-way (excluding any Master Drainage Plan facilities subject to reimbursement from Local Drainage Area Fees), sewer, water and reclaimed water lines and appurtenances within the right-of-way (excluding any portion of such costs reimbursable from sewer and/or water connection fees), dry utilities which are non-refundable or non-reimbursable by the utility agency and which are located within the right-of-way3, street lights, three new traffic signals and a modification of an existing traffic signal at El Camino Real (excluding those portions reimbursed from Traffic Impact Fees and Public Facilities Fees). relocation of existing utilities, environmental mitigation3 and incidental costs of construction tdthe extent permitted in the AcquisitionlFinancing Agreement. El Fuerte Street from Palomar Airport Road southerly to connect to the existing terminus of El Fuerte Street at the southerly boundary of Bressi Ranch as shown on Drawing No. 400-8E. Full width grading to secondary arterial standards (but not to include grading outside of the right-of-way in future developed areas), erosion control landscaping and irrigation (located within an easement granted to the City), parkway landscaping and irrigation (located within an easement granted to the City), asphalt pavement to secondary arterial standard width, curb and which is a part of the City-wide trail system, storm drain facilities within the right-of-way gutter, sidewalk, meandering regional trail for bicycles and pedestrians in a public trail easement (excluding any Master Drainage Plan facilities subject to reimbursement from Local Drainage Area Fees), sewer, water and reclaimed water lines and appurtenances within the right-of-way utilities which are non-refundable or non-reimbursable by the utility agency and which are located (excluding any portion of such costs reimbursable from sewer and/or water connection fees), dry within the right-of-way3, street lights, three new traffic signals and a modification of an existing traffic signal at Palomar Airport Road (excluding those portions reimbursed from Traffic Impact Fees and Public Facilities Fees), relocation of existing utilities, environmental mitigation3 and incidental costs of construction to the extent permitted in the AcquisitionlFinancing Agreement. Estimated Cost? $21.181.866 $10,806,889 B-1 EXENTION COPY Widening of the east side of El Camino Real from Palomar Airport Road to the southerly boundary of Bressi Ranch as shown on Drawing No. 400-8G (Bressi Ranch portion). Grading to prime arterial standards (but not to include grading outside of the right-of-way in future developed areas), erosion control landscaping and irrigation (located within an easement granted to the City), parkway landscaping and inigation (located within an easement granted to the City), asphalt pavement to prime arterial standard width (including transitions lanes outside of developer's ownership), raised median in certain areas, median curb, median hardscaping and landscaping with irrigation, curb and gutter, sidewalk, dry utilities which are non-refundable or non- reimbursable by the utility agency and which are located within the right-of-way3, modification of an existing traffic signal at Street "A" (excluding those portions reimbursed from Traffic Impact Fees and Public Facilities Fees), relocation of existing utilities, environmental mitigation3 and incidental costs of construction to the extent permitted in the AcquisitionlFinancing Agreement. Widening of the east side of El Camino Real from the southerly boundary of Bressi Ranch southerly as shown on Drawing No. 397-2R (Greens portion). Grading to prime arterial standards (but not to include grading outside of the right-of-way in future developed areas), erosion control landscaping and irrigation (located within an easement granted to the City), parkway landscaping and irrigation (located within an easement granted to the City), asphalt pavement to prime arterial standard width (including transitions lanes outside of developer's ownership), raised median in certain areas, median curb, median hardscaping and landscaping with irrigation, curb and gutter, sidewalk, dry utilities which are non-refundable or non- reimbursable by the utility agency and which are located within the right-of-way3, street lights, modification of an existing traffic signal at Camlno Vida Roble (excluding those portions reimbursed from Traffic Impact Fees and Public Facilities Fees), relocation of existing utilities, AcquisitionlFinancing Agreement. environmental mitigation3 and incidental costs of construction to the extent permitted in the Total $1,213,195 $1,720,526 $34,922,476 Notes: - 11 The description of the Improvements set forth in this Exhibit "B" is preliminary and general. The final list of improvements shall be as approved by the City Council at time of district formation. Cost estimates are preliminary. In the event that the Financing District is an assessment district, 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 the State of California or the United States Government. The actual value of any Improvement upon is or will be owned by any Agency as such term is defined in Government Code Section 53570(a), 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 construction of the Improvements that represents (a) the general benefit to be received from the Benefit"). The Confirmed Assessed Special Benefit shall be net of any portion of the cost of Improvements and (b) the special benefit to be received by the portion of the Property that is or will of the cost shall be born solely by the Developers as a Developer contribution in the form of a be owned by any Agency, the State of California or the United States Government. Any such portion 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" or a designated "501(c)3 corporation" as such terms are used in the Internal Revenue Code and regulations of the Internal Revenue Service which may be financed B-2 EXECUTION COPY 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 EXECUTION COPY EXHIBIT “C“ The undersigned (the “Developer”) hereby requests payment in the total amount of $ for the Base and/or Retained Increment of the Purchase Price of the Improvements (as 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: 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 by 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 andlor 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 EXECUTION COPY 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 City Engineer Dated: c- 5 EXECUTION COPY 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 ~ I I I I [List here all Improvements for which payment is requested, and attach supporting documentation] c- 1