HomeMy WebLinkAbout2020-02-11; City Council; ; Acquisition of real property commonly known as Aura Circle.~ CITY COUNCIL
~ Staff Report
Meeting Date:
To:
From:
Staff Contact:
Feb. 11,2020
Mayor and City Council
Scott Chadwick, city manager
Curtis M. Jackson, real estate manager
curtis.jackson@carlsbadca.gov or 760-434-2836
CA Review~
Subject: Acquisition of real property commonly known as Aura Circle.
Recommended Action
Adopt a resolution authorizing the mayor to execute all appropriate acquisition documents, and
the city clerk to execute the Certificate of Acceptance of the Grant Deed for the acquisition of
real property commonly known as Aura Circle from Pacific Legacy Homes, Inc. to the City of
Carlsbad.
Executive Summary
On Jan. 14, 2019, the City Council authorized the real estate manager to negotiate the
acquisition of the Aura Circle property (Subject Property) [APN 207-100-48]. Pursuant to this
direction, staff is recommending that the City Council authorize the mayor to execute all
appropriate acquisition documents, and the city clerk to execute the Certificate of Acceptance
of the Grant Deed on behalf of the city for the acquisition of the Subject Property for the
purchase price of $2,070,000 (plus half of the closing costs).
Discussion
On March 14, 2017, the City Council approved the General Plan Lawsuit Settlement Agreement
(Agreement) between City of Carlsbad and North County Advocates (NCA). Section 4.3.15 of the
Agreement requires the city to continue to consider and evaluate properties for potential
acquisition of open space and use good faith efforts to acquire those properties.
Property History
On Jan. 14, 2020, the City Council adopted a resolution (Resolution No. 2020-012) authorizing
the city's real estate manager to negotiate with the agent for Pacific Legacy Homes, Inc. (Seller)
to acquire the Aura Circle property located at the northern terminus of Aura Circle, north of the
intersection of Aura Circle and Hillside Drive.
The Subject Property is 15.02 acres and is zoned R-1-8000 (2.66 acres), which allows for single
family res idential homes, and OS, Open Space (12.32 acres). During initial discussions with staff,
the Seller indicated a general willingness to sell this property. The city's appraisal report,
authored by Arens Group, Inc. dated Dec. 5, 2019, estimated the market value of the Subject
Property at $2,070,000. The Seller reviewed the appraisal report and subsequently expressed
Feb. 11, 2020 Item #5 Page 1 of 36
an interest in entering negotiations for acquisition of the Subject Property by the city at the
estimated fair market value of $2,070,000.
General Plan Consistency
The Jan. 14, 2020 staff report provides analysis of the Subject Property characteristics and
opportunities for permanent open space. Acquisition of the Subject Property is consistent with
the Carlsbad General Plan in that the acquisition will add 2.66 acres of additional Category 1
Open Space for Preservation of Natural Resources. The acquisition supports and implements
several goals and policies in the General Plan Open Space, Conservation, and Recreation
Element, including:
• 4-G.1 Develop a balanced and integrated open space system reflecting a variety of
considerations-resource conservation, production of resources, recreation, and
aesthetic and community identity-and ensuring synergies between various open space
components and compatibility with land use planning.
• 4-G.3 Protect environmentally sensitive lands, wildlife habitats, and rare, threatened or
endangered plant and animal communities.
• 4-G.4 Promote conservation of hillsides and ridgelines.
• 4-P.1 Maintain an integrated open space classification system that accommodates
conservation, resource production, recreation, and aesthetic needs.
• 4-P.8 Utilize the criteria developed by the Proposition C Open Space and Trails Ad Hoc
Citizens Advisory Committee (approved by City Council Resolution No. 2006-294,
10/10/06) to evaluate potential future open space property acquisitions by the city.
• 4-P.2 Designate for preservation as open space those areas that provide unique visual
amenities within the urban form, such as agriculture, hillsides, ridges, valleys, canyons,
beaches, lagoons, creeks, lakes and other unique resources that provide visual and
physical relief to the cityscape by creating natural contrasts to the built-up, man made
scene.
• Policy 4-P.17 Seek partnering opportunities with other governmental agencies, private
land owners and non-profit organizations to acquire open space; utilize grants, bonds
and other funding sources to leverage local funds and reduce cost to Carlsbad taxpayers.
• 4-P.43 Obtain an irrevocable offer to dedicate or a permanent easement for multi-use
trails on privately owned property where feasible, and where trails are proposed as part
of the Carlsbad trail system.
Housing Element Compliance
If the Subject Property were to be acquired by the city, in order for the 2.66 acre residential
portion of the site to be considered as part of the city's Open Space inventory, a Carlsbad
General Plan Amendment would ultimately be required to change the General Plan Land use
designation for the 2.66 acre residential portion of the property from Residential 0-4 dwelling
units per acre (R-4) to Open Space (OS). Pursuant to Government Code Section 65863, the city
may not reduce the residential density on any parcel below that which was used by the
California Department of Housing and Community Development in determining compliance
Feb. 11, 2020 Item #5 Page 2 of 36
with Housing Element law, unless the city makes the finding that the reduction of residential
density is consistent with the adopted General Plan, including the Housing Element, and the
remaining sites identified in the Housing Element are adequate to accommodate the city's
share of the regional housing need pursuant to Government Code Section 65584.
Consistent with Program 3.2 of the certified Housing Element and City Council Policy No. 43, all
the dwelling units which were anticipated toward achieving the city's share of the regional
housing needs that are not utilized by developers in approved projects will be deposited into
the city's Excess Dwelling Unit Bank. As demonstrated in Housing Element Section 10.3, these
banked units are then utilized to enable density transfers, density increases and bonuses, and
General Plan amendments to increase allowed density at other sites. The proposal to change
the General Plan Land Use designation from R-4 to OS would deposit nine excess dwelling units
into the Excess Dwelling Unit Bank. These excess dwelling units would then be available for
allocation to other projects. Accordingly, there would be no net loss of residential unit capacity,
The R-4 Land Use designation has been identified in the Housing Element as appropriate to
accommodate the city's regional share of above-moderate income housing needs. The 2018
Annual Housing Element Progress Report documented that the city has exceeded its Regional
Housing Needs Assessment (RHNA) share of new above-moderate income housing units by 512
units, 1 and further there remains adequate capacity to accommodate additional above-
moderate income housing. Accordingly, changing the General Plan land use designation to OS
would not result in a net loss in residential unit capacity under Government Code Section 65584.
Senate Bill 330 Compliance
Similarly, effective Jan. 1, 2020, new Government Code section 66300, which was enacted as
part of Senate Bill 330, provides:
(b}{l) [W]ith respect to land where housing is an allowable use, ... an affected city shall not
enact a development policy, standard, or condition that would have any of the follow effects:
[fl] (A) Changing the general plan land use designation ... or zoning of a parcel ... of property to a
less intensive use ... "[L]ess intensive use" includes ... increased open space ... requirements ... or
anything that would lessen the intensity of housing. [fl] ... [fl] (i) This section does not prohibit ...
an affected city from changing a land use designation or zoning ordinance to a less intensive use
if the city ... concurrently changes the development standards, policies, and conditions
applicable to other parcels within the jurisdiction to ensure that there is no net loss in residential
capacity.
The city will also need to address these provisions when the city changes the General Plan Land
Use designation for the residential portion of the Subject Property to open space.
On Feb. 6, 2020, city staff met with staff from the California State Department of Housing and
Community Development (HCD) in Sacramento to discuss, among other things, how SB 330 and
the associated new Accessory Dwelling Unit laws will impact the city's Housing Element and
City Council Policy No. 43. As of the public release of this staff report, there was no information
1 The 2013-2021 Housing Element above-moderate Income RHNA share is 2,332 dwelling units. Through the end of
2018, the city issued building permits for 2,844 above-moderate income dwelling units.
Feb. 11, 2020 Item #5 Page 3 of 36
to report to City Council. However, staff will provide a verbal update as appropriate as a part of
the staff presentation of the item at the Feb. 11, 2020 City Council meeting.
Encroachments into Aura Circle
The Subject Property is currently encumbered with existing encroachments such as fences and
other improvements made along the west property line of the Subject Property by
approximately seven of the adjacent homes located on the east side of Avila Avenue (Exhibit 3).
As part of the Seller's existing tentative map approval, Planning Commission Resolution No.
6290 included a condition requiring the property owner to remove all of the existing structures
and improvements on the Subject Property; as such, in February 2018, the Seller notified all
encroaching property owners that they would be required to remove their encroachments.
Through this process, the seller did receive verbal acknowledgement from some, but not all of
the encroaching properties. Upon acquisition of the Subject Property by the city, the tentative
map approval will ultimately expire in May 2020 and the Planning Commission condition of
approval will be null and void. However, the encroachments will still exist and the city will be
the responsible party for ensuring that the encroachments are removed.
Staff recommends that the City Council adopt a resolution authorizing the mayor to execute all
appropriate acquisition documents for the purchase of the Subject Property for $2,070,000
(plus closing costs), and for the city clerk to prepare and execute the Certificate of Acceptance
of the Grant Deed for the acquisition of the Subject Property.
Fiscal Analysis
As part of the Agreement, per Section 4.3.15, the city agreed there would be "no maximum
funding limit on the amount of city funds made available to acquire property for open space
preservation in perpetuity, and the minimum funding amount the city shall make available to
acquire property for open space preservation in perpetuity would be $4,000,000."
The. negotiated price for the Property is $2,070,000 plus half the estimated total closing costs of
$10,000. Funds to acquire the Subject Property shall be appropriated from the General
Construction Fund. With this purchase, approximately $1,790,000 remains to be spent on
acquiring property for open space preservation in perpetuity to reach the $4,000,000 minimum.
Next Steps
Within three days of the City Council approval of the acquisition, the city and Seller will open
escrow, and shall close the sale of the Subject Property no later than thirty days after opening
escrow. Prior to the close of escrow, the Grant Deed conveying the Subject Property to the city
shall be executed to facilitate completion of the transaction.
Environmental Evaluation (CEQA)
The proposed property transaction does not qualify as a 'project' under the California
Environmental Quality Act (CEQA) per Public Resources Code Section 21065 and State CEQA
Guidelines Section 15378 in that it has no potential to cause either a direct physical change in
the environment or a reasonably foreseeable indirect physical change in the environment and
therefore does not require environmental review.
Feb. 11, 2020 Item #5 Page 4 of 36
Public Notification
This item was noticed in accordance with the Ralph M. Brown Act and was available for public
viewing and review at least 72 hours prior to the scheduled meeting date.
Exhibits
1. City Council resolution
2. Location map
3. Encroachment map
Feb. 11, 2020 Item #5 Page 5 of 36
RESOLUTION NO. 2020-034
A RESOLUTION AUTHORIZING THE MAYOR TO EXECUTE ALL
APPROPRIATE ACQUISITION DOCUMENTS, AND FOR THE CITY CLERK
TO EXECUTE THE CERTIFICATE OF ACCEPTANCE OF THE GRANT
DEED FOR THE ACQUISITION OF REAL PROPERTY COMMONLY
KNOWN AS THE AURA CIRCLE FROM PACIFIC LEGACY HOMES, INC.
FOR THE PURCHASE PRICE OF $2,070,000, PLUS HALF OF THE
CLOSING COSTS (ESTIMATED AT $10,000).
WHEREAS, on March 14, 2017, the City Council approved the General Plan Lawsuit
Settlement Agreement between the City of Carlsbad and North County Advocates (Agreement);
and
WHEREAS, The Agreement directed the city to consider and acquire property for open
space preservation in perpetuity; and
WHEREAS, on Jan. 14, 2020, the City Council authorized the real estate manager to
negotiate the acquisition of the Aura Circle property (Subject Property) by Resolution No. 2020-
012;and
WHEREAS, the Subject Property is owned by Pacific Legacy Homes, Inc. (Seller); and
WHEREAS, the Subject Property is 15.02 acres and is a located at the northern terminus
of Aura Circle, Carlsbad CA 92008 (APN 207-100-48-00) and is mapped for nine single family
residential homes (R-1-8000) and Open Space (OS); and
WHEREAS, the city and Seller have agreed to the purchase price of $2,070,000, which is
the appraised fair market value of the property; and
WHEREAS, the acquisition of the Subject Property does not qualify as a 'project' under
the State CEQA Guidelines pursuant to Section 21065 and 15378 in that it has no potential to
cause either a direct physical change in the environment or a reasonably foreseeable indirect
physical change in the environment and therefore does not require environmental review; and
Feb. 11, 2020 Item #5 Page 6 of 36
WHEREAS, acquisition of the subject property is consistent with the Carlsbad General
Plan in that the acquisition will add 2.66 acres of additional Category 1 Open Space for
Preservation of Natural Resources.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Carlsbad, California,
as follows:
1. The above recitations are true and correct.
2. The City Council approves the acquisition of the Subject Property located at the
northern terminus of Aura Circle (APN 207-100-48-00) from Pacific Legacy Homes, Inc. in an
amount of $2,070,000, plus half of the closing cost (estimated at $10,000).
3. The acquisition of the Subject Property is consistent with the Carlsbad General for the
following reasons:
a) The acquisition supports and implements several goals and policies in the General
Plan Open Space, Conservation, and Recreation Element, including:
i) 4-G.1 Develop a balanced and integrated open space system reflecting a
variety of considerations-resource conservation, production of resources,
recreation, and aesthetic and community identity-and ensuring synergies
between various open space components and compatibility with land use
planning.
ii) 4-G.3 Protect environmentally sensitive lands, wildlife habitats, and rare,
threatened or endangered plant and animal communities.
iii) 4-G.4 Promote conservation of hillsides and ridgelines.
Feb. 11, 2020 Item #5 Page 7 of 36
iv) 4-P.1 Maintain an integrated open space classification system that
accommodates conservation, resource production, recreation, and aesthetic
needs.
v) 4-P.8 Utilize the criteria developed by the Proposition C Open Space and Trails
Ad Hoc Citizens Advisory Committee (approved by City Council Resolution No.
2006-294, 10/10/06) to evaluate potential future open space property
acquisitions by the city.
vi) 4-P.2 Designate for preservation as open space those areas that provide
unique visual amenities within the urban form, such as agriculture, hillsides,
ridges, valleys, canyons, beaches, lagoons, creeks, lakes and other unique
resources that provide visual and physical relief to the cityscape by creating
natural contrasts to the built-up, man made scene.
vii) Policy 4-P.17 Seek partnering opportunities with other governmental
agencies, private land owners and non-profit organizations to acquire open
space; utilize grants, bonds and other funding sources to leverage local funds
and reduce cost to Carlsbad taxpayers.
viii)4-P.43 Obtain an irrevocable offer to dedicate or a permanent easement for
multi-use trails on privately owned property where feasible, and where trails
are proposed as part of the Carlsbad trail system.
b) The acquisition is consistent with the certified Carlsbad Housing Element and in
compliance with Government Code Sections 65863 and 65584 in that:
Feb. 11, 2020 Item #5 Page 8 of 36
i) Program 3.2 of the certified Housing Element and City Council Policy No. 43,
all the dwelling units which were anticipated toward achieving the city's share
of the regional housing needs that are not utilized by developers in approved
projects will be deposited into the city's Excess Dwelling Unit Bank. As
demonstrated in Housing Element Section 10.3, these banked units are then
utilized to enable density transfers, density increases and bonuses, and
General Plan amendments to increase allowed density at other sites. The
proposal to change the General Plan Land Use designation of the Subject
Property from R-4 to OS would deposit nine excess dwelling units into the
Excess Dwelling Unit Bank. These excess dwelling units would then be
available for allocation to other projects. Accordingly, there would be no net
loss of residential unit capacity.
ii) The R-4 Land Use designation has been identified in the Housing Element as
appropriate to accommodate the city's regional share of above-moderate
income housing needs. The 2018 Annual Housing Element Progress Report
documented that the city has exceeded its Regional Housing Needs
Assessment {RHNA) share of new above-moderate income housing units by
512 units, 1 and further there remains adequate capacity to accommodate
additional above-moderate income housing. Accordingly, changing the
General Plan land use designation to OS would not result in a net loss in
residential unit capacity under Government Code Section 65584.
Feb. 11, 2020 Item #5 Page 9 of 36
4. The mayor is authorized to execute the attached purchase and sale agreement
(Attachment A) between the City of Carlsbad and Pacific Legacy Homes, Inc.
5. The city clerk is authorized to prepare and execute a Certificate of Acceptance of the
Grant Deed for the Subject Property on behalf of the City of Carlsbad.
6. The deputy city manager, administrative services branch, is authorized to appropriate
$2,080,000 from the General Capital Construction Fund for purchase of the Subject Property and
closing fees.
7. The city manager, or his designee, is authorized to act on behalf of the City of Carlsbad
in all future decisions and actions necessary to implement the purchase and sale agreement with
Pacific Legacy Homes. Inc. for the property located at APN 207-100-48-00, and to do so in full
compliance with the terms and conditions expressed in the agreement.
PASSED, APPROVED AND ADOPTED at a Regular Meeting of the City Council ofthe City of
Carlsbad on the 11th day of February 2020, by the following vote to wit:
AYES: Hall, Blackburn, Bhat-Patel, Schumacher
NAYS: None.
ABSENT: None.
Gomez PtpuJ.Ji f .~ ..J
1 The 2013-2021 Housing Element above-moderate Income RHNA shar;g'tsi,wiill'21~welling units. Through
the end of 2018, the city issued building permits for 2,844 above-moderate income dwelling units.
Ct-fj
l/t1J.r
Feb. 11, 2020 Item #5 Page 10 of 36
AGREEMENT FOR PURCHASE AND SALE
OF
REAL PROPERTY
BY AND BETWEEN
THE CITY OF CARLSBAD,
A CALIFORNIA MUNICIPAL CORPORATION
AS BUYER
AND
PACIFIC LEGACY HOMES, INC.,
A CALIFORNIA CORPORATION
AS SELLER
PROPERTY:
AURA CIRCLE
CARLSBAD, CA 92008
-1-
Feb. 11, 2020 Item #5 Page 11 of 36
AGREEMENT FOR
PURCHASE AND SALE AGREEMENT
OF REAL PROPERTY
This PURCHASE AND SALE AGREEMENT ("Agreement") is made and entered into as of
Fe br"N;j J3ih . 2020 ("Effective Date") by and between PACIFIC LEGACY
HOMES, INC., a California corporation ("Seller") and CITY OF CARLSBAD, a California municipal
corporation ("Buyer"). This Agreement shall be effective as of the date this Agreement is
approved by the City of Carlsbad City Council and has been signed by both parties hereto (the
"Effective Date").
WHEREAS, Seller desires to sell the Property described below to Buyer; and
WHEREAS, Buyer desires to purchase the Property and has determined that buying the
Property for open space acquisition would be a benefit to the public and is consistent with the
City of Carlsbad's general plan;
NOW THEREFORE, in consideration of the mutual covenants hereinafter contained and
for other good and valuable consideration, the receipt and adequacy of which are
acknowledged, the parties hereto agree as follows:
ARTICLE 1
RECITALS
1.1 Description of Property. Seller is the owner of a fee interest in that certain real
property commonly referred to as Aura Circle, consisting of approximately 15.04 gross acres in
the City of Carlsbad (the "City"), County of San Diego (the "County"), State of California (the
"State"), and more particularly described in Exhibit A attached hereto, and approximately
shown on Exhibit B attached hereto. For the purposes of this Agreement such real property and
the improvements thereon (if any) are collectively referred to herein as the "Property."
1.2 Purpose of Agreement. Buyer desires to purchase the Property from Seller and
Seller desires to sell the Property to Buyer on the terms and conditions as set forth in this
Agreement.
1.3 Public Benefit. This Agreement is for the benefit of the public and is in the
furtherance of the public purposes of Buyer.
- 2 -
Feb. 11, 2020 Item #5 Page 12 of 36
ARTICLE 2
GENERAL PROVISIONS
2.1 Rules of Construction. Words of the masculine gender shall be deemed and
construed to include correlative words of the feminine and neuter genders. Unless the context
otherwise indicates, words importing the singular number shall include the plural number and vice
versa, and words importing persons shall include corporations and associations, including public
bodies, as well as natural persons. The terms "hereby", "hereof", "hereto", "herein", "hereunder"
and any similar terms, as used in this Agreement, shall refer to this Agreement.
2.2 Business Days. In any case where a date for performance by either party shall
fall on a day that is not a business day, the time for performance shall automatically extend to
the next regular business day. As used in this Agreement, "business day" means any day that is
not a Saturday or Sunday and is not a federal or state holiday recognized by the Title Company or
Escrow Agent.
ARTICLE 3
PURCHASE AND SALE OF PROPERTY
3.1 Sale of Property. Seller agrees to sell and Buyer agrees to purchase the Property
on the terms and conditions in this Agreement.
3.2 Purchase Price. The purchase price of the Property is Two Million and Seventy
Thousand Dollars ($2,070,000.00) ("Purchase Price").
ARTICLE 4
CONDITIONS PRECEDENT
4.1 Conditions Precedent to Closing. Buyer's obligation to purchase the Property
from Seller is subject to the following conditions precedent set forth in this Article 4
("Conditions Precedent"). If any of the Conditions Precedent have not been fulfilled within the
applicable time periods or if Buyer disapproves, pursuant to this Article 4, any matter or
matters for which Buyer's approval is required, Buyer may:
(a) Waive the condition or disapproval and close escrow with respect to the
Property in accordance with this Agreement, without adjustment or rebate in the Purchase
Price;
(b) Cure the failure of the condition or representation and reduce the
Purchase Price by the amount equal to the cost to cure; or
(c) Terminate this Agreement by written notice to Seller;
If Buyer conditionally approves a Condition Precedent, Buyer's conditional approval shall
constitute disapproval, unless provision is made by the Seller within the time specified by the
Buyer in such conditional approval or by this Agreement, whichever is later, for the satisfaction
- 3 -
Feb. 11, 2020 Item #5 Page 13 of 36
of the condition for approval imposed by the Buyer. Escrow Agent shall promptly provide all
Parties with copies of any written disapproval or conditional approval Escrow Agent receives.
4.2 Inspection and Feasibility Period.
(a) Seller hereby consents to entry upon the Property by Buyer or its officers,
employees, contractors and agents for the purpose of conducting physical inspections and tests
from the Effective Date of this Agreement to the Close of Escrow. Buyer shall have twenty one
(21) calendar days from the Effective Date of this Agreement ("Feasibility Period") in which to
complete its inspections, testing and feasibility studies of the Property, including but not limited
to, inspection and examination of soils, environmental factor, Hazardous Substances, if any, and
archeological information relating to the Property, and a review and investigation of the effect
of any zoning, map, permits, reports, engineering data, regulations, ordinances, and laws
effecting the Property. If Buyer disapproves of the results of the inspection and review, Buyer
may elect to terminate this Agreement by giving Seller written notification on or before the last
day of the Feasibility Period. If Buyer approved of the results of the inspection and review, then
Buyer shall notify Seller of approval of all inspection, testing, and feasibility studies of the
Property and waive the applicable contingency or cancellation of this Agreement prior to the
termination of the Feasibility Period. If Buyer fails to properly notify Seller of the intent to
terminate this Agreement, Buyer shall be deemed to be satisfied with the results of the
inspection and shall be deemed to have waived the right to terminate this Agreement pursuant
to this provision.
(b) Buyer agrees to defend, indemnify and hold Seller harmless from all
liabilities, costs and expenses resulting directly from Buyer's or its officers', employees',
contractors' or agents' inspections and tests, including for any and all injuries to persons or
property occurring during Buyer's inspections, except to the extent relating to Seller's negligent
acts or omissions or willful misconduct or the mere discovery of an existing condition with respect
to the Property. Buyer shall keep the Property free and clear of liens related to Buyer's
inspections, and shall repair any and all damage resulting from Buyer's inspections. The foregoing
obligations of Buyer shall survive the Closing or termination of this Agreement. If Buyer alters the
physical conditions of the Property and Escrow does not close, Buyer shall restore the Property
to the condition existing before Buyer's inspections or tests.
4.3 Preliminary Title Report.
(a) Upon ordering the Escrow, Seller shall cause North American Title or
another title insurance company mutually approved by Seller and Buyer ("Title Company") to
issue and deliver to Buyer a preliminary title report for the Property, containing such exceptions
as the Title Company would specify in a ALTA extended owner's policy of title insurance
(collectively, the "Preliminary Report"), together with copies of all exceptions and plotted
easements and the documents supporting the exceptions (collectively, the "Supporting
Documents").
- 4 -
Feb. 11, 2020 Item #5 Page 14 of 36
(b) Within fifteen (15) days after receipt of legible copies of the Preliminary
Report and Supporting Documents, Buyer shall give written notice to Seller of any disapproval
of the Preliminary Report or any part thereof, or of any exceptions, or of the condition of title
reflected in the Preliminary Report or the Supporting Documents ("Buyer's Title Notice"). If
Buyer gives written notice of disapproval as provided in this paragraph, Seller shall remove or
otherwise cure, in a manner reasonably satisfactory to Buyer, the disapproved item or items at
or before the Close of Escrow, except that Seller may elect not to remove or cure any
disapproved item or items by delivering written notice thereof to Buyer within ten (10) days
following the date of written notification of the disapproval. If Seller elects not to remove or
cure any disapproved item or items, Buyer may terminate this Agreement by delivering a
written notice of termination to Seller within ten (10) days after the date that Buyer actually
receives notice of Seller's election not to remove or cure any disapproved item.
(c) Buyer shall receive title free and clear of liens and encumbrances, except
as otherwise provided in this Agreement. Seller shall be obligated to pay any property taxes
and assessments to the date of the Close of Escrow. The parties recognize that certain
encumbrances such as existing deeds of trust, tax liens, assessment liens, and the like will be
discharged through Escrow as provided in this Agreement. Notwithstanding the giving of any
notice or any failure to give any notice with respect to these items, they shall be discharged
through Escrow as provided in this Agreement.
(d) From and after the effective date of the Preliminary Report, Seller shall
not alter the condition of title without the express written consent of Buyer. If the Title
Company issues any supplemental or amended title commitment or title report, or any
modification of any proforma title policy negotiated between Buyer and Title Company,
identifying any additional exceptions to title on or after delivery of Buyer's Title Notice, Buyer
shall have five (5) days to notify Seller in writing of any objections to such additional exceptions,
and if Seller does not elect, within (5) days thereafter, to remove or cure any disapproved item
or items, Buyer may terminate this Agreement by delivering a written notice of termination to
Seller within fifteen (15) days after the date that Buyer notified Seller of the disapproved item.
4.4 Title Policies. Prior to the Close of Escrow, Buyer shall have received evidence
that Title Company is ready, willing and able to issue, upon payment of the Title Company's
regularly scheduled premium, an ALTA extended coverage owner's policy of title insurance, in
the amount of the Purchase Price, showing fee title to the Property vested in Buyer, subject
only to the exceptions approved by Buyer, including any endorsements requested by Buyer,
and dated as of the date of Closing (collectively, the "Title Policy"), provided that if Buyer fails
to obtain a new or updated ALTA Survey for the Property, the Title Policy may include an
exception for any matters that would appear on an accurate, current ALTA Survey (that aren't
shown on the most recent existing ALTA Survey for the Property, if any). Prior to Closing, Seller
shall execute and deliver to the Title Company such affidavits, indemnities, resolutions,
authorizations, and other company documents or agreements relating to Seller and/or the
Property as are reasonably required by the Title Company to issue the Title Policy.
- 5 -
Feb. 11, 2020 Item #5 Page 15 of 36
4.5 Condition of the Property.
(a) Within the Feasibility Period, Buyer shall review and approve or
disapprove of the physical condition of the Property pursuant to Section 4.2 above. Seller shall
not cause the physical condition of the Property to deteriorate or change after the date of
Buyer's inspection, normal wear and tear excepted, without the prior written consent of Buyer.
Buyer agrees that the Property is being sold in its "As-ls" and "Where-ls" condition, except as
expressly provided for elsewhere herein. Buyer is obligated to investigate, inspect and analyze
the condition of the Property and the condition of title to the Property to its own satisfaction
and expressly agrees that in entering into the Agreement, it is relying on its own investigation
as to the physical condition of the Property, condition of title to the Property, and the suitability
of the Property for Buyer, except as expressly provided herein. Buyer is not relying on any
representations by Seller regarding the Property except as set forth in this Agreement or any
closing document executed by Seller.
(b) If, subsequent to the Effective Date and prior to Closing, all or part of the
Property is damaged and the cost of repair or cure is $10,000.00 or less, Seller shall repair or
cure the damage prior to the Closing. Buyer may elect, within 10 days after receiving written
notice of damage costing more than $10,000.00 to repair or cure, either terminate this
Agreement or purchase the Property notwithstanding the damage, but without deduction or
offset against the Purchase Price. If Buyer does not elect to terminate this Agreement, Buyer
shall be entitled to any applicable insurance proceeds. Unless otherwise notified in writing,
Escrow Agent shall assume no such damage has occurred prior to Closing.
(c) Seller must notify Buyer in writing within three (3) business days of a
Material Change in the condition of the Property. Buyer shall have ten (10) business days after
receipt of the written notice to determine whether to terminate this Agreement or purchase
the Property notwithstanding the Material Change. "Material Change" shall mean a substantial
adverse change in the use, occupancy, tenants, title, or condition of the Property that occurs
after the Effective Date and prior to the Closing. Unless otherwise notified in writing, Escrow
Agent shall assume no Material Change has occurred prior to the Closing.
4.6 Property Documents. Within seven (7) calendar days after the date of this
Agreement, Seller shall deliver to Buyer current copies of all permits, soils tests, hazardous or
toxic waste reports, geological studies, environmental impact studies, topographical maps,
architectural plans, surveys, specifications, licenses, maintenance contracts, service contracts,
utility contracts, operating contracts, leases, and other documents in Seller's possession or
control pertaining to the Property (collectively, the "Property Documents"). During the
Feasibility Period, Buyer shall review each Property Document which may be disapproved by
Buyer pursuant to Section 4.2 above. On or before the Close of Escrow, Seller shall assign to
Buyer all of Seller's rights and remedies under the Property Documents, to the extent
assignable, pursuant to an assignment of contracts, warranties, guarantees, and other
intangible property in form and substance satisfactory to Buyer (the "General Assignment"). At
the request of Buyer, the General Assignment shall exclude any Property Documents
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Feb. 11, 2020 Item #5 Page 16 of 36
designated by Buyer. At the request of Buyer, Seller shall use its best good faith efforts to
obtain the consent to assignment of any other parties to the Property Documents as specified
by Buyer. At the request of Buyer, Seller shall terminate any Property Document designated by
Buyer (to the extent such Property Document may be terminated}, by delivering notices to the
other party under the Property Document in sufficient time to terminate the Property
Document prior to the Close of Escrow.
4.7 Seller's Obligations. Prior to the Close of Escrow, Seller shall have performed
every material covenant, agreement and promise to be performed by Seller pursuant to this
Agreement and the related documents executed or to be executed by Seller.
4.8 Seller's Representations. Seller's representations and warranties as set forth in
this Agreement and in documents provided by Seller under this Agreement shall remain true
and accurate as of the Close of Escrow.
ARTICLE 5
SELLER'S REPRESENTATIONS AND WARRANTIES
The representations and warranties by Seller in this Article are made as of the Effective
Date and as of the Close of Escrow and will survive the Close of Escrow and the recording of the
Grant Deed. Seller represents and warrants to Buyer that:
5.1 Title. As of the date of this Agreement and the Close of Escrow, Seller is and will
be the legal and equitable owner of the Property, with full right to convey, except as otherwise
provided in this Agreement. Seller has not previously conveyed title to the Property to any
other person. Seller has not granted any options or rights of first refusal or rights of first offer to
third parties to purchase or otherwise acquire an interest in the Property. The Property is free
and clear of all liens, encumbrances, claims, demands, easements, leases, agreements,
covenants, conditions, or restrictions of any kind, except for the exceptions set forth in the
Preliminary Report. Seller has obtained (or will obtain as of Close of Escrow) all required
consents, permissions or releases to convey good and marketable title to Buyer.
5.2 Hazardous Substances.
(a) To the best of Seller's knowledge the Property is free and has always
been free from Hazardous Substances and is not and has never been in violation of any
Environmental Laws. Seller has received no notice, warning, notice of violation, administrative
complaint, judicial complaint, or other formal or informal notice alleging that the Property is or
has been in violation of any Environmental Law, or informing Seller that the Property is subject
to investigation or inquiry regarding Hazardous Substances on the Property or the potential
violation of any Environmental Law.
(b) As used herein, the term "Environmental Laws" means all federal, state,
local, or municipal laws, rules, orders, regulations, statutes, ordinances, codes, decrees, or
requirements of any government authority regulating, relating to, or imposing liability or
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Feb. 11, 2020 Item #5 Page 17 of 36
standards of conduct concerning any Hazardous Substance, or pertaining to occupational health
or industrial hygiene, to the extent that such relate to matters on, under, or about the Property,
occupational or environmental conditions on, under, or about the Property, as now or may at
any later time be in effect, including without limitation, the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 (CERCLA) [42 USC § 9601 et seq.]; the
Resource Conservation and Recovery Act of 1976 (RCRA) [42 USC § 6901 et seq.]; the Clean
Water Act, also known as the Federal Water Pollution control Act (FWPCA) [33 USC § 1251 et
seq.]; the Hazardous Materials Transportation Act (HMTA) [49 USC § 1801 et seq.]; the
Insecticide, Fungicide, Rodenticide Act [7 USC § 136 et seq.]; the Superfund Amendments and
Reauthorization Act [42 USC§ 6901 et seq.]; the Clean Air Act [42 USC§ 7401 et seq.]; the Safe
Drinking Water Act [42 USC§ 300f et seq.]; the Surface Mining Control and Reclamation Act [30
USC § 1201 et seq.]; the Emergency Planning and Community Right to Know Act [42 USC §
11001 et seq.]; the Occupational Safety and Health Act [29 USC § 655 and 657]; the California
Underground Storage of Hazardous Substances Act [Health and Safety Code § 25280 et seq.];
the California Hazardous Substances Account Act [Health and Safety Code § 25300 et seq.]; the
California Safe Drinking Water and Toxic Enforcement Act [Health and Safety Code § 24249.5 et
seq.]; the Porter-Cologne Water Qualify Act [Water Code § 13000 et seq.] together with any
amendments of or regulations promulgated under the statutes cited above and any other
federal, state, or local law, statute, ordinance, or regulation now in effect or later enacted that
pertains to the protection of the environment as such apply to matters on, under, or about the
Property.
(c) As used herein, the term "Hazardous Substances" means: (i) those
substances included within the definitions of "hazardous substance," "hazardous waste,"
"hazardous material," "toxic substance," "solid waste." or "pollutant or contaminant" in any
Environmental Law; (ii) those substances listed in the United States Department of
Transportation Table [49 CFR 172.101], or by the Environmental Protection Agency, or any
successor agency, as hazardous substances [40 CFR Part 302]; (iii) any other substances,
materials, and wastes that are or become regulated or classified as hazardous or toxic under
federal, state, or local laws or regulations; and (iv) any material, waste, or substance that is a
petroleum or refined petroleum product, asbestos, polychlorinated biphenyl, designated as a
hazardous substance pursuant to 33 USC § 1321 or listed pursuant to 33 USC § 1317, a
hazardous substance or toxic material designated pursuant to any State Statute, a flammable
explosive or a radioactive material.
5.3 Violation of Law. To the best of Seller's knowledge, no condition on the Property
violates any health, safety, fire, environments, building, zoning or other federal, state, or local
law, code, ordinance, or regulation.
5.4 Litigation. There is no pending or threatened litigation, administrative
proceeding, or other legal or governmental action or condemnation with respect to the
Property or which may adversely affect Seller's ability to fulfill the obligations of this
Agreement.
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Feb. 11, 2020 Item #5 Page 18 of 36
5.5 Bankruptcy. No filing or petition under the United States Bankruptcy Law or any
insolvency laws, or any laws for composition of indebtedness or for the reorganization of
debtors has been filed with regard to Seller.
5.6 No Defaults. Seller is not in default of Seller's obligations or liabilities pertaining
to the Property. There are no facts, circumstances, conditions or events, which after notice or
lapse of time would constitute default. Seller has not received any notice of any default and
has no reason to believe that there is likely to be any breach or default of any of Seller's
obligations or liabilities pertaining to the Property.
5.7 Special Studies Zone. The Property is not within a special studies zone under the
Alquist-Priolo Geologic Hazard Act [Pub. Res. Code §§ 2621.9 et seq.] (which generally requires
sellers to inform purchasers if property is within a special studies zone, which zones are
generally near potentially or recently active earthquake faults).
5.8 Foreign Investment Real Property Tax Act. Seller is not a "foreign person" within
the meaning of 42 USC § 1445(f}{3). Seller understands and agrees that the certification made
in this section may be disclosed to the Internal Revenue Service and that any false statement
contained herein could be punished by fine, imprisonment or both. This certification is made
under penalty of perjury under the laws of the State of California.
5.9 Disclosure. Any information that Seller has delivered to Buyer either directly or
through Seller's agents or employees, is complete and accurate. Seller has disclosed to Buyer all
material facts with respect to the Property to which Seller has access.
5.10 Status of Seller. Seller is a limited liability company duly organized and validly
existing and in good standing under the laws of the State of California.
5.11 Authority of Seller. Seller is duly authorized to enter into this Agreement, to sell
the Property to Buyer and to perform the actions and duties of the Seller more particularly
described in this Agreement. The provisions of this Agreement are and will be the valid and
legally enforceable obligations of Seller in accordance with their terms and the terms of this
Agreement.
5.12 No Violation of Other Agreements. Neither the execution and delivery of this
Agreement, nor the fulfillment of and compliance with the terms and conditions hereof, nor the
consummation of the transactions contemplated hereby, conflicts with or results in a breach of
terms or violation of any other agreement to which Seller is a party or by which Seller is bound,
or constitutes a default under any of the foregoing.
5.13 Brokers. Each Party acknowledges receiving a Disclosure Regarding Real Estate
Agency Relationship and confirms and consents to the following agency relationships in this
transaction with the following real estate brokers ("Broker(s)") and/or their agents ("Agent(s)"):
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Feb. 11, 2020 Item #5 Page 19 of 36
(a) Seller's Brokerage Firm: Lee & Associates Commercial Real Estate
Services, Inc -North San Diego County; License No. 01096996
(b) Seller's Agent: Al Apuzzo/Matt Weaver; License Nos.
01367183/01323215.
(c) Seller to pay Seller's broker a commission of 4% of the closing sale price,
paid through escrow, upon the close of escrow.
(d) Buyer has not retained the services of any broker, finder or real estate
licensee and owes no person or entity any finder's or broker's fee, commission or payment of
any kind whatsoever.
(e) The Parties acknowledge that other than the Brokers and Agents listed
above, there are no other brokers or agents representing the Parties or due any fees and/or
commissions under this Agreement.
(f) The Parties each represent and warrant to the other that he/she/it has
had no dealings with any person, firm, broker, agent or finder in connection with the
negotiations of this Agreement and/or the consummation of the purchase and sale
contemplated herein, other than the Brokers and Agents named in paragraph 5.13(a) and
5.13(b), and no broker, agent or other person, firm or entity, other than said Brokers and
Agents is/are entitled to any commission or finder's fee in connection with this transaction as
the result of any dealings or acts of such Party. Buyer and Seller do each hereby agree to
indemnify, defend, protect and hold the other harmless from and against any costs, expenses
or liability for compensation, commission or charges which may be claimed by any broker,
agent, finder or other similar party, other than said named Brokers and Agents by reason of any
dealings or act of the indemnifying Party.
ARTICLE 6
BUYER'S REPRESENTATIONS AND WARRANTIES
The representations and warranties by Buyer in this Article are made as of the Effective
Date and as of the Close of Escrow and will survive the Close of Escrow and the recording of the
Grant Deed. Buyer represents and warrants to Seller that:
6.1 Status of Buyer. Buyer is a municipal corporation duly organized, validly existing
and in good standing under the laws of the State of California.
6.2 Authority of Buyer. Buyer is duly authorized to enter into this Agreement. The
provisions of this Agreement are and will be the valid and legally enforceable obligations of
Buyer in accordance with their terms and the terms of this Agreement.
6.3 No Violation of Other Agreements. Buyer hereby represents that neither the
execution and delivery of this Agreement, nor the fulfillment of and compliance with the terms
and conditions hereof, nor the consummation of the transactions contemplated hereby,
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Feb. 11, 2020 Item #5 Page 20 of 36
conflicts with or results in a breach of terms or violation of any other agreement to which Buyer
is a party or by which Buyer is bound, or constitutes a default under any of the foregoing.
6.4 Brokers. Buyer has not retained the services of or had any dealings with any
broker, finder or real estate licensee and owes no person or entity any finder's or broker's fee,
commission or payment of any kind whatsoever. Buyer shall indemnify, defend and hold
harmless Seller from and against all claims for any such compensation claimed by any broker,
real estate agent or other third party claiming through Buyer.
ARTICLE 7
COVENANTS
7.1 Payment of Seller's Obligations. To the extent Seller is authorized by the
Property Documents, Seller shall discharge all obligations and liabilities under the Property
Documents before the Close of Escrow with respect to the Property.
7.2 Litigation. Seller shall immediately notify Buyer of any lawsuits, condemnation
proceedings, rezoning, or other governmental order or action, or any threat thereof, of which
Seller has actual knowledge, which might affect the Property or any interest of Buyer with
respect to the Property.
7.3 Indemnification.
(a) Seller shall indemnify, defend and hold harmless Buyer from all causes of
action, claims, demands, losses, liabilities, costs or expenses (including reasonable attorneys'
fees and expenses (collectively, "Claims"), arising from (i) any breach by Seller of this
Agreement or any related document, (ii) Seller's false representations under this Agreement or
in any related document, or (iii) any transactions or occurrences relating to the Property prior
to the Closing Date; except to the extent of resulting from the sole or active negligence or
willful misconduct of Buyer or Buyer's officers or employees.
(b) Buyer shall indemnify, defend and hold Seller harmless from all Claims
arising from (i) any breach by Buyer of this Agreement or any related document, or (ii) Buyer's
false representations under this Agreement or in any related document; except to the extent
resulting from the sole or active negligence or willful misconduct of Seller or Seller's officers or
employees.
(c) The provisions of this Section 7.3 shall survive the Close of Escrow with
respect to the Property.
7.4 At Closing, Seller shall convey title to the Property to Buyer by Grant Deed, free
and clear of all liens and encumbrances, except as otherwise provided in this Agreement.
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Feb. 11, 2020 Item #5 Page 21 of 36
ARTICLE 8
ESCROW
8.1 Establishment of Escrow. Within three (3} business days after the Effective Date,
Buyer and Seller shall establish an Escrow for the close of the sale of the Property with the
escrow department of the Title Company ("Escrow Agent"}. Escrow Agent shall notify both
parties in writing of the specific date on which the Escrow has opened. This Agreement shall
constitute Escrow Instructions, provided however, that Escrow Agent shall prepare general
instructions as may be deemed necessary by the Escrow Agent for the fulfillment of this
Agreement and deliver those general instructions to Seller and Buyer. Buyer and Seller shall
each execute the general instructions, or propose changes thereto, within the time reasonably
required by Escrow Agent. If there is any conflict between the terms of the general instructions
and this Agreement, the provisions of this Agreement shall prevail unless the conflicting
provision is specifically identified as an amendment to this Agreement.
8.1 Opening Deposits. Within three (3} business days after both Parties have
executed this Agreement and the executed Agreement has been delivered to Escrow Agent,
Buyer shall deliver to Escrow Agent a check in the sum of Fifty Thousand Dollars ($50,000.00}. If
said check is not received by Escrow Agent within said time period then Seller may elect to
unilaterally terminate this transaction by giving written notice of such election to Escrow Agent
whereupon neither Party shall have any further liability to the other under this Agreement.
Should Buyer and Seller not enter into an agreement for purchase and sale, Buyer's check or
funds shall, upon request by Buyer, be promptly returned to Buyer.
(a} Notwithstanding the foregoing, within 5 days after Escrow Agent receives
the monies described in paragraph 8.l(a} , Escrow Agent shall release $100 of said monies to
Seller as and for independent consideration for Seller's execution of this Agreement and the
granting of the contingency period to Buyer as herein provided. Such independent
consideration is nonrefundable to Buyer but shall be credited to the Purchase Price in the event
that the purchase of the Property is completed.
(b} Upon waiver of all of Buyer's contingencies all the Deposit shall be
released to Seller become nonrefundable but applicable to the Purchase Price except in the
event of a Seller breach, or in the event that the Escrow is terminated pursuant to destruction,
damage or loss (Section 4.l(d}(i}} or a material change (Section 4.l(d}(ii)).
8.2 Additional Deposits. Within three (3) business after the contingencies discussed
in Section 4.2(a) are approved or waived, Buyer shall deposit with Escrow Agent the additional
sum of Fifty Thousand Dollars ($50,000), which shall be applied to the purchase price and shall
be released to Seller, becoming non-refundable to Buyer.
8.3 Closing. Subject to the conditions to Closing stated in this Agreement, the Grant
Deed shall be recorded and the Property transferred from Seller to Buyer ("Close of Escrow" or
"Closing") on the date that is thirty (30) days after the Effective Date ("Closing Deadline").
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Feb. 11, 2020 Item #5 Page 22 of 36
8.4 Closing Deposits. On or before the Close of Escrow, Seller and Buyer shall
deposit with Escrow Agent the following documents and shall close Escrow as follows:
(a) Seller shall deposit with Escrow Agent the following at least one business
day prior to the Closing Deadline:
(i) An original executed and acknowledged grant deed conveying the Property from
Seller to Buyer, in the form attached hereto as Exhibit C (the "Grant Deed");
(ii) The original Non-Foreign Affidavit executed by Seller;
(iii) The originals of all Property Documents, except for those documents that, by
law, Seller must keep in its custody;
(iv) An original certificate of non-foreign status in the form attached hereto as
Exhibit D ("FIRPTA Certificate"), duly executed by Transferor (as defined therein), and a
California form 593-C (California Real Estate Withholding Certificate);
(v) An estimated closing statement in form and content satisfactory to Buyer and
Seller (the "Closing Statement") duly executed by Seller; and
(vi) Any other documents or funds required of Seller to close Escrow in accordance
with this Agreement.
(vii) Seller to pay broker a commission of 4% of closing sale price, paid through
escrow, upon the close of escrow.
(b) Buyer shall deposit with Escrow Agent the following at least one business
day prior to the Closing Deadline:
(i) The balance of the Purchase Price for the Property in cash;
(ii) Additional cash in the amount necessary to pay Buyer's share of closing costs as
set forth in this Agreement or the escrow instructions and that portion of the Title Policy in
excess of the premium for a CLTA Standard Policy of Title Insurance in an amount covering the
Purchase Price;
(iii) The Closing Statement, duly executed by Buyer; and
(iv) Any other document or funds required of Buyer to close Escrow in accordance
with this Agreement.
8.5 Closing Costs. Seller shall pay the premium for a CLTA Standard Policy of Title
Insurance in an amount covering the Purchase Price, all of the real property transfer taxes and
documentary transfer taxes (if any) and recording fees payable upon recordation of the Grant
Deed for the Property, and any sales, use or ad valorem taxes connected with the Close of
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Feb. 11, 2020 Item #5 Page 23 of 36
Escrow for the Property. Buyer shall pay that portion of the premium for the Title Policy in
excess of the premium for a CLTA Standard Policy of Title Insurance in an amount covering the
Purchase Price. Buyer and Seller shall each pay one-half of the Escrow Agent's charges and
fees.
8.6 Property Taxes and Prorations. Seller shall be solely responsible for bringing the
Property's real property taxes current as of the Close of Escrow and Buyer shall have no liability
for payment of taxes accrued prior to the Close of Escrow. It is recognized that Seller is a tax-
exempt governmental agency.
8. 7 Possession. Right to possession of the Property, or the applicable parcel, shall
transfer at Close of Escrow free of all tenancies.
8.8 Closing Escrow. Upon the Closing, Escrow Agent shall: (i) cause the Grant Deed
to be recorded in the Official Records of the County and deliver a conformed copy of the
recorded Grant Deed to Buyer; (ii) deliver an original (or copy if an original is not available) of
each closing document to each of Buyer and Seller; (iii) cause the Title Company to issue the
Title Policy to Buyer; and (iv) deliver to Seller the Purchase Price less applicable prorations and
charges, pursuant to the Closing Statements approved by Buyer and Seller.
ARTICLE 9
MISCELLANEOUS AND ADMINISTRATIVE PROVISIONS
9.1 Further Assurances. Whenever requested by the other party, each party shall
execute, acknowledge, and deliver any further conveyances, assignments, confirmations,
satisfactions, releases, instruments of further assurance, approvals, consents and any other
instrument or document as may be necessary, expedient or proper to complete the transaction
contemplated by this Agreement, and to do any other acts and to execute, acknowledge, and
deliver any requested document to carry out the intent and purpose of this Agreement.
9.2 Assignment. Seller shall have no right, power, or authority to assign or mortgage
this Agreement or any portion of this Agreement, or to delegate any duties or obligations
arising under this Agreement, voluntarily, involuntarily, or by operation of law, without the
prior written consent of Buyer. Buyer shall have no right, power, or authority to assign this
Agreement or any portion of this Agreement or to delegate any duties or obligations arising
under this Agreement, voluntarily, involuntarily or by operation of law without Seller's prior
written approval except to an entity owned or controlled by Buyer. Neither party shall
unreasonably withhold approval to any assignment.
9.3 Preservation and Inspection of Documents. Documents received by Seller or
Buyer under the provisions of this Agreement shall be retained in their respective possessions
and shall be subject at all reasonable times to the inspection of the other party hereto and its
assigns, agents and representatives, any of whom may make copies thereof.
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Feb. 11, 2020 Item #5 Page 24 of 36
9.4 Parties of Interest. Nothing in this Agreement, expressed or implied, is intended
to or shall be construed to confer upon or to give to any person or party other than Seller and
Buyer any rights, remedies or claims under or by reason of this Agreement or any covenant,
condition or stipulation hereof; and all covenants, stipulations, promises and agreements in this
Agreement made by or on behalf of Seller or Buyer shall be for the sole and exclusive benefit of
Seller and Buyer.
9.5 No Recourse under Agreement. All covenants, stipulations, promises,
agreements and obligations of the parties hereto contained in this Agreement shall be deemed
to be the covenants, stipulations, promises, agreements and obligations of the parties hereto,
respectively, and not of any member, officer, employee or agent of the parties hereto in an
individual capacity, and no recourse shall be had for any claim based on or under this
Agreement against any member, officer, employee or agent of the parties hereto.
9.6 Notices. All notices, certificates or other communications hereunder shall be
personally delivered or delivered by United States registered or certified mail postage prepaid,
return receipt requested, or by a nationally-recognized overnight delivery courier, addressed to
the applicable address set forth below. Notice shall be deemed to have been given (a) on the
delivery date indicated by the United States Postal Service on the return receipt or by the
courier or on the date such delivery is refused or deemed "undeliverable," or (b) on the date of
personal delivery. Either party may change its address for notices by providing written notice
as specified herein; provided, however, that all addresses provided must be an actual street
address located in the United States of America.
If to Buyer:
City of Carlsbad
Real Estate Manager
ATTN: Curtis M. Jackson
3096 Harding Street
Carlsbad, CA 92008
If to Seller:
Pacific Legacy Homes, Inc.
Attn: Michael Graham
Copy to:
16870 W. Bernardo Dr., Suite 400
San Diego, CA 92127
City of Carlsbad
City Attorney's Office
ATTN: Celia Brewer
1200 Carlsbad Village Drive
Carlsbad, CA 92008
9.7 Binding Effect. Without waiver of Section 9.2, this Agreement shall inure to the
benefit of and shall be binding upon Seller, Buyer, and their respective successors and assigns.
9.8 Severability. If any one or more of the covenants, stipulations, promises,
agreements or obligations provided in this Agreement on the part of Seller or Buyer to be
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Feb. 11, 2020 Item #5 Page 25 of 36
performed should be determined by a court of competent jurisdiction to be contrary to law,
then such covenant, stipulation, promise, agreement or obligation shall be deemed and
construed to be severable from the remaining covenants, stipulations, promises, agreements
and obligations herein contained and shall in no way affect the validity of the other provisions
of this Agreement.
9.9 Headings. Any headings preceding the text of the several Articles and Sections
hereof, and any table of contents or marginal notes appended to copies hereof, shall be solely
for convenience or reference and shall not constitute a part of this Agreement, nor shall they
affect its meaning, construction or effect.
9.10 Applicable Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of California.
9.11 Seller and Buyer Representatives. Whenever under the provrsrons of this
Agreement the approval of Seller or Buyer is required, or Seller or Buyer is required to take
some action at the request of the other, such approval of such request may be given for Seller
by an Authorized Officer/Representative of Seller and for Buyer by an Authorized
Officer/Representative of Buyer, and any party hereto shall be authorized to rely upon any such
approval or request. As used herein, the term "Authorized Officer", means (a) when used with
respect to Seller, the President of Seller or any other officer of Seller which is designated by its
President as an Authorized Officer, or (b) when used with respect to Buyer, the City Manager or
any employee designated by the City Manager as an Authorized Officer.
9.12 Amendment. This Agreement may be amended, modified, or changed only in
writing as mutually agreed to and duly executed by the parties hereto.
9.13 Counterpart. This Agreement may be executed in any number of counterparts,
each of which shall be deemed to be an original, but all of which, taken together, shall
constitute one and the same instrument.
9.14 Time of the Essence. Time is of the essence in this Agreement and every
provision contained in this Agreement.
9.15 Integration. This Agreement, and all attachments and exhibits hereto constitute
the entire agreement of the parties. There are no oral or parol agreements, which are not
expressly set forth in the Agreement or the related documents being executed in connection
with this Agreement.
9.16 Waivers. No waiver or breach of any provision shall be deemed a waiver of any
other provision, and no waiver shall be valid unless it is in writing and executed by the waiving
party. No extension of time for performance of any obligation or act shall be deemed an
extension of time for any other obligation or act.
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Feb. 11, 2020 Item #5 Page 26 of 36
9.17 Attorney Fees. Litigation Costs and Related Matters. If any legal action or other
proceeding, including arbitration or an action for declaratory relief, is brought to enforce this
Agreement or because of a dispute, breach, default, or misrepresentation in connection with
this Agreement, the prevailing party shall be entitled to recover reasonable attorney fees and
other costs in addition to any other relief. Venue for enforcement of this Agreement shall be in
the Superior Court of San Diego County, North County Branch. The parties agree that before
either party commences any legal or equitable action, action for declaratory relief, suit,
proceeding, or arbitration that the parties shall first submit the dispute to non-binding
mediation through a mutually acceptable professional mediator in San Diego County, or if a
mediator cannot be agreed upon by a mediator appointed by the Judicial Arbitration and
Mediation Service in San Diego County. The cost of mediation shall be shared equally by the
parties.
9.18 Exhibits. All exhibits referred to in this Agreement and attached hereto are
made a part hereof and are incorporated herein by this reference.
9.19 Survival. All representations and warranties, all covenants and obligations to be
performed at a time or times after close of Escrow, and all indemnities in this Agreement shall
survive the close of Escrow and delivery and recordation of the Grant Deed.
ARTICLE 10
SPECIAL PROVISIONS
10.1 Liquidated Damages. THE PARTIES AGREE THAT IT WOULD BE IMPRACTICABLE
OR EXTREMELY DIFFICULT TO FIX, PRIOR TO SIGNING THIS AGREEMENT, THE ACTUAL
DAMAGES WHICH WOULD BE SUFFERED BY SELLER IF BUYER FAILS TO PERFORM ITS
OBLIGATIONS UNDER THIS AGREEMENT. THEREFORE, IF, AFTER THE SATISFACTION OR
WAIVER OF ALL CONTINGENCIES PROVIDED FOR THE BUYER'S BENEFIT, BUYER BREACHES
THIS AGREEMENT, SELLER SHALL BE ENTITLED TO LIQUIDATED DAMAGES IN THE AMOUNT OF
ONE HUNDRED THOUSAND DOLLARS ($100,000.00). UPON PAYMENT OF SAID SUM TO
SELLER, BUYER SHALL BE RELEASED FROM ANY FURTHER LIABILITY TO SELLER, IF ANY. THIS
LIQUIDATED DAMAGES PARAGRAPH IS APPLICABLE ONLY IF INITIALED BY BOTH PARTIES.
,i:j H /~ [Initials of Buyer and Seller]
10.2 Seller Default. Buyer and Seller acknowledge that, pursuant to the terms of this
Agreement, Seller is obligated to perform, and in the event Escrow fails to close by reason of
default by Seller, Buyer shall be entitled to all remedies available at law or in equity, including
(without limitation) specific performance of Seller. Notwithstanding Seller's obligation herein,
in the event Seller is prevented from closing the Escrow pursuant to the happening of an event,
requirement or other impediment beyond the control of Seller (other than a Buyer default),
Buyer shall be entitled to the return of any deposits, and all accrued interest, if any,
notwithstanding any provision to the contrary.
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Feb. 11, 2020 Item #5 Page 27 of 36
10.3 Notice of Default. Neither party shall be entitled to pursue remedies for default
under this Agreement unless such default has continued for more than five (5) days after
delivery of written notice of such default to the defaulting party.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed in
their respective names by their duly authorized officers as of the date first above written.
Buyer:
CITY OF CARLSBAD,
_,
By:--~~_,_,_._~----
Date: _fe~b_f~UOl~v-~/3~t_h..~~· 2020
Approved as to Form:
City Attorney's Office
By:~l<M~
/J-SJ /-. City Attorney
, 2020
Seller:
PACIFIC LEGACY HOMES, INC.,
a California corporation By:W~
By:
Name: Michael Graham
Title: President
Name:
Title:
BUYER'S SIGNATURE(S) MUST BE NOTARIZED.
NOTARY USE APPROPRIATE ACKNOWLEDGEMENT
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,2020
Feb. 11, 2020 Item #5 Page 28 of 36
EXHIBIT A
LEGAL DESCRIPTION OF PROPERTY
APN NO. 207-100-48-00
Real Property in the City of Carlsbad, County of San Diego, State of California, described as follows:
THAT PORTION OF LOT "I" OF RANCHO AGUA HEDIONDA, IN THE CITY OF CARLSBAD, COUNTY OF
SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 823, FILED IN THE OFFICE
OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, NOVEMBER 16, 1896, DESCRIBED. AS
FOLLOWS:
BEGINNING AT THE NORTHWEST CORNER OF LOT 17, OF LAGUNA RIVIERA UNIT NO. 1, IN THE
CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP
THEREOF NO. 5871, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY,
APRIL 21, 1967; THENCE ALONG THE WESTERLY BOUNDARY OF SAID MAP NO. 5871 TO THE
NORTHEAST CORNER OF LOT 37 OF LAGUNA RIVIERA UNIT NO. 2, IN THE CITY OF CARLSBAD,
COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 6165, FILED IN
THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, AUGUST 8, 1968; THENCE
ALONG THE NORTHERLY BOUNDARY OF SAID MAP NO. 6165 TO THE SOUTHEAST CORNER OF LOT
298 OF LAGUNA RIVIERA UNIT NO. 9, IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE
OF CALIFORNIA, ACCORDING TO MAP THEREOF NO. 7516, FILED IN THE OFFICE OF THE COUNTY
RECORDER OF SAN DIEGO COUNTY, DECEMBER 29, 1972; THENCE ALONG THE EASTERLY
BOUNDARY OF SAID MAP NO. 7516 TO THE MOST NORTHERLY CORNER OF LOT 286 OF SAID MAP
NO. 7516, BEING ON THE SOUTHERLY LINE OF LOT 131 OF CARLSBAD TRACT NO. 76-15, UNIT 3
(PALISADES POINT), IN THE CITY OF CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA,
ACCORDING TO MAP THEREOF NO. 10579, FILED IN THE OFFICE OF THE COUNTY RECORDER OF
SAN DIEGO COUNTY, JANUARY 31, 1983; THENCE EASTERLY ALONG THE SOUTHERLY AND
SOUTHEASTERLY LINES OF LOTS 131 AND 130 OF SAID MAP NO. 10579 TO THE MOST SOUTHERLY
CORNER OF CARLSBAD TRACT NO. 73-8 (CARLSBAD PALISADES) UNIT NO. 1, IN THE CITY OF
CARLSBAD, COUNTY OF SAN DIEGO, STATE OF CALIFORNIA, ACCORDING TO MAP THEREOF NO.
8039, FILED IN THE OFFICE OF THE COUNTY RECORDER OF SAN DIEGO COUNTY, NOVEMBER 6,
1974; THENCE NORTHEASTERLY ALONG SAID SOUTHEASTERLY LINE OF SAID MAP NO. 8039 TO
THE POINT OF BEGINNING.
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Feb. 11, 2020 Item #5 Page 29 of 36
EXHIBIT B
SUBJECT PROPERTY
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Feb. 11, 2020 Item #5 Page 30 of 36
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2• • OPEN SPACE
SUBJECT PROPERTY
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CHANGES
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MAP10870-CARLSBAD TCT NO.B2-21
MAP 823 -RHO AGUA HEO!ONDA
POR LOT I -MM-231
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ROS 3786. 4484. 4852. 5289. 5414, 11507 , 12164
Feb. 11, 2020 Item #5 Page 31 of 36
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
CITY OF CARLSBAD
CITY CLERK
1200 CARLSBAD VILLAGE DRIVE
CARLSBAD, CA 92008
AND MAIL TAX STATEMENTS TO:
CITY OF CARLSBAD
1200 CARLSBAD VILLAGE DRIVE
CARLSBAD, CA 92008
APN: 207-100-48-00_
EXHIBIT C
FORM OF GRANT DEED
(Space Above For Recorder's Use)
GRANT DEED
The undersigned declares that the documentary transfer tax is $ ____ and is
[ ] computed on the full value of the interest or property conveyed; or
[ ] computed on the full value less the value of liens or encumbrances remaining thereon
at the time of sale.
For valuable consideration, receipt of which is hereby acknowledged, PACIFIC LEGACY HOMES, INC., a
California corporation ("Grantor''), hereby GRANTS, BARGAINS, SELLS and CONVEYS to CITY OF
CARLSBAD, a California municipal corporation ("Grantee"), that certain real property situated in the City
of Carlsbad, County of San Diego, State of California, and more particularly described on Exhibit A
attached hereto.
IN WITNESS WHEREOF, Grantor has caused this Grant Deed to be executed as of
_______ , 2020.
GRANTOR: PACIFIC LEGACY HOMES, INC.
a California corporation
By:
Name:
Title:
By:
Name:
Title:
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Feb. 11, 2020 Item #5 Page 32 of 36
ACKNOWLEDGMENT
A Notary Public or other officer completing this certificate verifies only the identity of the individual who
signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity
of that document.
STATE OF CALIFORNIA
ss:
COUNTY OF
On _______ , 20_, before me, __________ , Notary Public, personally
appeared ______________ , who proved to me on the basis of satisfactory
evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and
acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and
that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the
person(s) acted, executed the instrument.
I certify under PENAL TY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
WITNESS my hand and official seal.
Notary Public (SEAL)
[EXHIBIT A TO BE ATTACHED]
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Feb. 11, 2020 Item #5 Page 33 of 36
EXHIBIT D
FORM OF FIRPTA CERTIFICATE
TRANSFEROR'S CERTIFICATION OF NON-FOREIGN STATUS
Section 1445 of the Internal Revenue Code of 1986, as amended ("Code") provides that a
transferee of a real property interest in the United States must withhold tax if the transferor is a foreign
person. To inform CITY OF CARLSBAD, a California municipal corporation ("Transferee"), that
withholding of tax under Section 1445 of the Code will not be required upon the transfer of certain real
property commonly known as the Aura Circle Property to Transferee by PACIFIC LEGACY HOMES, INC.
, a California corporation ("Transferor''), the undersigned hereby certifies the following on behalf of
Transferor:
1. Transferor is not a foreign corporation, foreign partnership, foreign trust, or foreign estate
(as those terms are defined in the Code and the Income Tax Regulations promulgated thereunder).
2.
3.
4.
2(b )(2)(iii).
Transferor's U.S. employer identification number is _____ _
Transferor's office address is __________________ _
Transferor is not a disregarded entity as defined in Code of Federal Section 1.1445-
Transferor understands that this Certification may be disclosed to the Internal Revenue Service
by Transferee and that any false statement contained herein could be punished by fine, imprisonment, or
both.
Under penalty of perjury under the laws of the State of California and the United States I declare
that I have examined this Certification and to the best of my knowledge and belief the foregoing is true,
correct and complete, and I further declare that I have authority to sign this document on behalf of
Transferor.
Date: _______ , 2020
"Transferor"
PACIFIC LEGACY HOMES, INC.,
a California corporation
By:
Name:
Title:
By:
Name:
Title:
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Feb. 11, 2020 Item #5 Page 34 of 36
Hector Gomez
From:
Sent:
To:
Subject:
Council Internet Email
Wednesday, February 12, 2020 8:18 AM
City Clerk
FW: Aura cir property
FYI-This was sent to staff and council, but just making sure you have it also.
From: suepr56
Sent: Monday, February 10, 2020 7:13 PM
To: Council Internet Email <CityCouncil@carlsbadca.gov>
Subject: Aura cir property
Dear Mayor and Carlsbad City Council members,
All Receive -Agenda Item # 5
For the Information of the~
CITY COUNCIL
Date~2/~~1CA ){_CCX
CM~coo X-ocM(3)X
I write to you to encourage your support of the resolution to aquire the property at "Aura Circle". I live at
, just down the hill from the eastern portion of said property. Considering the enormous negative
impacts of traffic, noise, Kelly Elementary school population Uust to name a few) has already had on our
neighborhood, i hope you will see your way clear to aquire this property and maintian it as permanent open
space. The Marja Acres project will negatively impact our community as well.
Let's please allow the 15+ acres to remain as natural as possible. We love hearing the coyotes yap at night
and the hawks screech during the day. Save our open space!
Respectfully,
Sudan Blosch
Carlsbad. 92008
Sent from my Verizon, Samsung Galaxy smartphone
CAUTION: Do not open attachments or click on links unless you recognize the sender and know the content
is safe.
1
Aura Circle Property Acquisition
Feb. 11, 2020
Curtis M. Jackson, Real Estate Manager
Gary Barberio, Deputy City Manager, Community Services
•Adopt a Resolution authorizing the mayor to execute all appropriate acquisition documents, and the city clerk to execute the Certificate of Acceptance of the Grant Deed for the acquisition of real property commonly known as Aura Circle from Pacific Legacy Homes, Inc. to the City of Carlsbad.
Recommended Action
Property Information
•Lot: 15.02 acres
•Zoned:
•One Family Residential: R-1-8000 (2.66 acres)
•Open Space: OS (12.32 acres)
•General Plan: Residential (R-4) 0-4 du/ac & Open Space
•Approved Tentative Map to subdivide property into nine single family residential lots and one open space lot, which expires in May.
Property Background
•Listed for sale at $2.6 million
•Listing expired; owner contacted
•City OS committee evaluated property for OS
acquisition utilizing CC adopted evaluation criteria
Prior City Council Actions
•March 14, 2017, City Council approved the General Plan
Lawsuit Settlement Agreement between the City and North
County Advocates (NCA).
•Jan. 14, 2020, City Council authorized the real estate manager
to negotiate with the Seller.
General Plan Consistency
•Acquisition is consistent with the Carlsbad General Plan:
•Will add 2.66 acres of additional Category 1 Open Space forPreservation of Natural Resources.
•Supports and implements several goals and policies in theGeneral Plan Open Space,Conservation,and RecreationElement.
Housing Element Compliance
•Gov Code 65863 –may not reduce the density on a parcel below that whichwasidentified in adopted Housing Element (no net loss).
•Per CC Policy No.43,nine above-moderate units will be deposited intotheExcessDwellingUnit Bank and made available for allocation toother projects.
•The city has already exceeded it RHNA share of 512 above-moderateunits.
•Therefore,no net loss of residential unit capacity under Gov Code 65863.
Senate Bill 330 Compliance•Effective Jan.1, 2020,Gov Code section 66300,provides:
•(b)(1)[W]ith respect to land where housing is an allowable use,…an affected cityshall not enact a development policy,standard,or condition that would have any ofthefolloweffects:[¶](A) Changing the general plan land use designation … orzoningof a parcel … of property to a less intensive use …“[L]ess intensive use”includes …increased open space …requirements ...or anything that would lessen theintensityofhousing.[¶]…[¶](i)This section does not prohibit …an affected cityfromchangingaland use designation or zoning ordinance to a less intensive use ifthecity…concurrently changes the development standards,policies,and conditionsapplicabletootherparcelswithinthejurisdictiontoensurethatthereisnonetlossinresidentialcapacity.
Senate Bill 330 Compliance
•On Feb. 6, 2020, city staff met with CA Dept of Housing and Community Development (HCD) regarding compliance with
SB 330.
Encroachments into Aura Circle
•Seven lots along the west property line currently encroach upon theProperty.
•In February 2018,the Seller notified all encroaching property owners.
•If acquired,the city will be responsible for ensuring that the encroachmentsareaddressed.
Essential Terms of Purchase and Sale Agreement•Purchase price of $2,070,000.
•“As -is” condition.
•Open Escrow within three (3) business days; 30 day Escrow Period; 21
day Feasibility Period.
•Closing costs split evenly between city and buyer (Approximately
$10,000 total)
•Total expense to city anticipated to be approximately $2,080,000.
•Open escrow within three (3) days;
•21 day contingency period; and,
•30 day escrow.
Next Steps
Recommended Action
•Adopt a resolution authorizing the mayor to execute allappropriateacquisitiondocuments,and the city clerk toexecutetheCertificateof Acceptance of the Grant Deed fortheacquisitionofrealproperty commonly known as AuraCirclefromPacific Legacy Homes,Inc.to the City of Carlsbad.
Encroachments
Encroachments