Loading...
HomeMy WebLinkAboutContracts & Agreements_10-2025RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City Clerk City of Redlands P. 0. Box 3005 Redlands, CA 92373 A PN: 0167-171-15-0000 Electronically Recorded in Official Records San Bernardino County Assessor -Recorder County Clerk DOC# 2025-0014937 01/23/2025 Titles:1 Pages:21 08:45 AM SAN Fees $0.00 Taxes $0.00 14311 CA SB2 Fee $0.00 Tota 1 $0.00 SPACE ABOVE LINE FOR RECORDE'R'S USE ONLY i x13\•IPT FRONT RECORDING FEES (GOVT. CODE § 27383) NO DOCUMEWARY TRANSFER TAX (RRT CODE § 1 1922) CITY OF REDLANDS DENSITY BONUS AGREEMENT (TENNESSEE VILLAGE) This Density Bonus Agreement Tennessee Village) ("Agreement") is entered into as of --- this I. day of DE�� 2024, by and between the City of Redlands, a California municipal corporation ("City"), and Lugonia Park Associates, LLC, a California limited liability company ("Owner"). City and Owner are each sometimes individually referred to herein as a "Party" and, together, as the "Parties." RECITALS A. Owner is the owner of approximately 13.48 acres of real property, comprising of one parcel located northeast of the intersection at Tennessee Street and Lugonia Avenue (APN: 0167-171-15-0000), in Redlands, California, which is more particularly described in the legal description attached hereto as Exhibit "A" and incorporated herein by reference ("Property"). B. Owner is constructing a mixed -use, multi -family residential housing project on the Property, comprising of four hundred sixty (460) apartment units, and approximately 17,899 square feet of commercial space, as more particularly described in Commission Review and Approval No. 956 (collectively, the "Project Applications"). C. In connection with the Project, Owner proposes to restrict a total of five percent (5%) of the total units in the Project to Very Low Income Households for an Affordable Rent to be eligible for the benefits of this Agreement, as further specified herein. D. This Density Bonus Agreement is entered into pursuant to the requirements of the California Density Bonus Law (Government Code section 65915 et seq.) and the City's implementing ordinance set forth Chapter 18.228 of the Redlands Municipal Code, under which Owner is eligible to obtain a density bonus, incentives and concessions, or waivers, as authorized by law. Accordingly, City desires to enter into this Agreement in accordance with California law and the Redlands Municipal Code. 179,12.00155k12688948.1 DOC #2025-0014937 Page 2 of 21 E. For purposes of complying with the Density Bonus Law, and the Redlands Municipal Code, and facilitating development of affordable housing kvithin the City, City agrees to the terms and conditions set forth herein. NOW, THEREFORE, in consideration of tlhe mutual promises contained herein, the Parties agree as follows: AGREEMENT 1. Recitals. The foregoing recitals are true and correct, and are incorporated herein as a substantive part of this Agreement. 2. Definitions. The following terms when used in this Agreement shall have the meanings ascribed to them: 2.1 "Adjusted for family size appropriate to the unit" means a household of one person in the case of a studio unit, a household of two persons in the case of a one -bedroom unit, a household of three persons in the case of a two -bedroom unit, and a household of four persons in the case of a three -bedroom unit, or as determined in accordance with California Health and Safety Code Section 50052.5 or implementing regulations. 2.2 "Affordable Rent" means for a Very Low Income Household the maximum Monthly Rent that does not exceed the amount of rent for a -Very Low Income Household authorized pursuant to Health and Safety Code Section 50053 as such statute exists on the date hereof, which is the product of thirty percent (30%) times fifty percent (50%) of Median Income, adjusted for household size appropriate to the unit. Affordable Rent shall be determined in accordance with any applicable regulations implementing Health and Safety Code Section 50053 and the amounts published by the California Department of Housing and Community Development applicable to the City. 2.3 "Affordable Unit" means a unit restricted for occupancy by a Qualifying Household at an Affordable Rent. The Affordable Units are the same as the Affordable Units, as defined in the hhclusionary Housing Regulatory Agreement. 2.4 "Density Bonus Law" means California Government Code section 65915 et seq. 2.5 "Qualifying Household(s)" means a Household who complies with all income verification requirements ofthis Agreement and, for Affordable Units designated for rental to and occupancy by Very Low Income Households, a Household that qualifies as a Very Low Income Household as defined herein. 2.6 "Home Office" means a separate area or room in an Affordable Unit used for business purposes and claimed as a business expense pursuant to federal and state income tax 2 17942.001 55\42698948. i DOC #2025-0014937 Page 3 of 21 laws. Any room used for business purposes shall not reduce the number of bedrooms that are required to be within an Affordable Unit pursuant to this Agreement and the lnclusionary Agreement. 2.7 "Household" means all persons residing in a Unit. 2.8 "Housing Related Expenses" means any costs other than rent that are required to be borne by a tenant in an Affordable Unit. These costs include, but are not limited to, a Utility Allowance, any costs that are imposed by the Owner on a mandatory basis, and any mandatory costs that are charged by the Owner for amenities included in the Project. Owner may charge tenants in an Affordable Unit optional costs related to elective amenities requiring an optional service fee such as classes, room rentals, food service, or special events, but is prohibited from charging a tenant in an Affordable Unit any fee for equal access to common areas or project amenities such as pools, gyms, community rooms and outdoor areas. In addition, Owner is prohibited from charging any optional amenity fees to a tenant in an Affordable Unit that is higher than optional amenity fees charged to tenants in Market Rate Units. 2.9 "Inclusionary Housing Regulatory Agreement" means the Affordable Housing Agreement With Declarations of Covenants and Restrictions, executed and recorded substantially herewith, in accordance with the lnclusionary Housing Ordinance. 2.10 "Inclusionary Housing Ordinance" means the provisions of Chapter 18.230 of the Redlands Municipal Code. 2.11 "Median Income" means the San Bernardino County, California San Bernardino County area median income, adjusted for household size, as established by the United States Department of Housing and Urban Development, and as published periodically by the California Department of Housing and Community Development in Section 6932 of Title 25 of the California Code of Regulations, or successor regulation. 2.12 "Monthly Rent" means the total of monthly payments for use and occupancy of each Affordable Unit and land and facilities associated therewith minus any Housing Related Expenses. 2.13 "Project" means that certain affordable residential development as more particularly described in Recital B and Section 3 of this Agreement. 2.14 "Qualifying Household" means a household whose income does not exceed the maximum income allowable for a Very Low income Household and qualifies as an Eligible Tenant under the lnclusionary Housing Regulatory Agreement. 2.15 "Site Plan" shall mean the drawings, maps, and depictions set forth in Exhibit B, and approved by the City, which is attached hereto and incorporated herein by reference. 3 17942.00155\42689948.1 DOC #2025-0014937 Page 4 of 21 2.16 "Substitute Affordable Unit' means an equivalent Unit in terms of level of affordability restriction (i.e., Very Low Income Households) and number of bedrooms to a previously designated Affordable Unit, that is substituted for that previously designated Affordable Unit; provided, however, that Units may be designated as Substitute Affordable Units to the extent all the Affordable Units remain reasonably dispersed throughout the entire Project and do not result in Affordable Units and Substitute Affordable Units being clustered in one area or building. 2.17 "Utility Allowance" means a reasonable allowance for an adequate level of service of utilities, including garbage collection, sewer, water, electricity, gas and other Beating, cooking and refrigeration fuels, if such utilities are paid for separately by the tenant and which allowance shall be based on the schedules determined by the San Bernardino County Development Authority; but not including telephone, internet or cable service. In the event that all utility charges are paid by the landlord rather than the tenant, no utility allowance shall be deducted from the rent. 2.18 "Very -Low Income Household" means a household with income that meets the standards of California Health and Safety Code Section 50105. The maximum household income for Very Low Income Households shall be the amount published annually by the California Department of Housing and Community Development for San Bernardino County, as adjusted to reflect the Household size of the tenant in a particular Affordable Unit. Affordable Housing Requirements. 3.1 Project. Owner shall develop, or cause to be developed, the Affordable Units in accordance with the approvals of the Project Applications (the "Entitlements") and this Agreement. 3.2 Use of Affordable Units. The Affordable Units shall not at any time be utilized on a transient basis or rented for a period of less than thirty (30) consecutive days, nor shall they be used as a hotel, motel, dormitory, fraternity house, sorority house, rooming house, nursing home, hospital, sanitarium, rest home day care facilities, or non-residential uses (other than to maintain a Home Office); provided that the use of the Affordable Units for guests on an intermittent basis shall not be considered transient use for purposes of this Agreement. All of the Affordable Units shall be available for rental on a continuous basis to members of the general public, and Owner shall not give preference to any particular class or group in renting the Affordable Units, except to the extent that Affordable Units are required to be rented to Qualifying Households. A vacated Affordable Unit shall be held vacant until re -leased to a Qualifying I-IOLlsehold or until another Unit at the Property with the same number of bedrooms is leased to a Qualifying Household and therefore becomes a Substitute Affordable Unit hereunder. Owner shall exercise diligent efforts to lease any such vacated Affordable Unit to a Qualifying I-lousehold in an expeditious manner. 4 17942.00155%42688948.1 DOC #2025-0014937 Page 5 of 21 3.3 Affordable Units. Owner covenants and agrees that it shall rent not less than twenty (20) units in the Project as Affordable Units in accordance with this Agreement. The rental restrictions and conditions described in this Agreement shall run with the land and shall be binding on all successor owners of the Property. City is given the express authority by Owner to enforce the restrictions and conditions described in this Agreement. Except as provided herein, the Affordable Units shall be rented, marketed, managed, maintained, and treated in the same manner as all other units on the Property. 3.4 Affordable Rent. The rent for the Affordable Units shall not exceed the limits for Affordable Rent, including an Utility Allowance. Prior to renting any Units, Owner shall advise City, in writing, of any utilities that are not provided by Owner and that will be paid by tenants at the Project. Within thirty (30) days following such advisement, City shall calculate and determine, and provide to Owner a chart of the Affordable Rent for the Project. On an annual basis following any increase in the Median Income, City shall prepare and provide to Owner an updated chart of the Affordable Rent for the Project. Owner shall promptly notify City, in writing, of any changes to the utilities that are paid by tenants at the Project. 3.5 Minimum Development Standards For Affordable Units. The Affordable Units shall be constructed with the same exterior appearance and interior features, fixtures, and amenities, and shall use the same type and quality of materials as provided for the other units in the Project. The location of the Affordable Units shall be reasonably dispersed throughout the Project. 3.6 Unit Mix for Affordable Units. The Affordable Units shall comprise of the following minimum number of units: Unit Type Number of Affordable Units for Very Low Income Households I Bedroom I I 2 Bedroom 8 3 Bedroom 1 3.7 Income Certification. The Affordable Units are to be rented to and occupied only by Qualifying Households. Prior to any occupancy of an Affordable Unit, Owner shall obtain from each applicant for the Affordable Unit and submit to City for review and approval a Tenant Income Certification Form and Questionnaire, certifying the Income of the applicant based upon the current income of each member of the Household. The Tenant Income Certification Form and Questionnaire shall be dated immediately prior to the date submitted to City. Owner shall use diligent efforts to verify that the income provided by an applicant is accurate by obtaining the following as a part of the verification process: (a) three (3) pay stubs for the most recent pay periods; (b) three most recent statements for all asset accounts, including checking, savings, 5 17942.001 i5\42688948.1 DOC #2025-0014937 Page 6 of 21 retirement, 401 K, etc. for all household members; (c) copies of the federal and state income tax returns if filed by the applicant for the prior two (2) calendar years; (d) a written verification of income and employment from the applicant's current employer if the applicant is employed; (e) an income verification form from the Social Security Administration and/or California Department of Social Services if the applicant receives assistance from either agency; (f) a certification as to the income and household size of the applicant; (g) if an applicant is unemployed or did not file an income tax return for the previous calendar year, such other information as reasonably necessary to verify the applicant's income; and (g) any other information that City may reasonable require to verify the income of the proposed tenant. City shall review and approve or disapprove each applicant within ten (10) business days after City's receipt of a complete submittal. Owner shall maintain on file a copy of each Tenant Income Certification Form and Questionnaire along with the information obtained to verify the applicant's income for a period of five (5) years. An Affordable Unit occupied by a tenant who qualifies as a Qualifying Household at the commencement of the occupancy shall be treated as occupied by a Qualifying Household until a recertification of such Qualifying Household's income demonstrates that such tenant no longer qualifies as a Qualifying Household, as further set forth in Section 3.8 below. 3.8 Recertification. Annually, during the term hereof, on or before the anniversary of the move -in date for each Qualifying Household with respect to an Affordable Unit, Owner shall recertify the income of each Qualifying Household by obtaining a completed Tenant Income Certification Form and Questionnaire based upon the current income of each member of the Household of the Affordable Unit. hi the event that recertification demonstrates that a Household's income exceeds the income permitted for Qualifying Household status, Owner shall perform either of the following: (i) to the extent permitted by applicable law, the occupants' lease shall not be renewed and said occupants shall be required to vacate the unit within one hundred eighty (180) days after the recertification; or (ii) the next available Market Rate Unit in the Project with the same number of bedrooms shall be leased as an Affordable Unit at Affordable Rent to a Qualifying Household so that the Project will be in compliance with the covenants and conditions of this Agreement, and the previous Affordable Unit shall be re -designated as a Market Rate Unit and the occupants thereof may be charged the amount of rent for a Market Rate Unit. 3.9 Selection of Tenants. The Affordable Units shall be available for rental on a continuous basis and Owner shall not give preference to any particular class or group in renting Affordable Units, except to the extent that Affordable Units are required to be rented to Qualifying Households. Owner shall market the Affordable Units to persons who live and/or work in the City of Redlands on a nonexclusive basis. 3.10 Lottery System. The initial lease -up of the Affordable Units shall be done pursuant to a lottery system. Prior to commencing any marketing activities for the Affordable Units, Owner shall submit to City for City's review and approval Owner's proposed marketing plan, and procedures for conducting the interest list and subscquent lottery. A representative of City shall have the right, but not the obligation, to attend the lottery. 6 17942.00 i 55W2GS8948. i DOC #2025-0014937 Page 7 of 21 3.11 Waiting, List. Following the initial lease -up of the Affordable Units, Owner shall maintain a waiting list of persons interested in renting an Affordable Unit. At such time as an Affordable Unit becomes available for rental, Owner shall rent such Affordable Unit to the first person on the waiting list that qualifies as a Qualifying Household to rent the Affordable Unit. Owner shall use commercially reasonable efforts to lease Affordable Units that become available as quickly as possible. . 3.12 Occupancy Levels. The number of persons permitted to occupy each Affordable Unit shall not exceed the occupancy permitted pursuant to the requirements of the United States Department of Housing and Urban Development which, as of the Effective Date, is two persons per bedroom, plus one person (e.g., for a two bedroom unit the maximum number of persons residing in the unit can be five persons). The lease f-or each Affordable Unit shall include a provision limiting the number of persons permitted to occupy each Affordable Unit in accordance with the preceding sentence and Owner shall enforce such occupancy restrictions. Further, the minimum household size permitted for the lease of all Affordable Unit shall be one (I) person per bedroom, such as, for example, that a two (2) bedroom Affordable Unit may not be leased to a household consisting of less than two (2) persons. 3.13 Principal Residence. The lease for each Affordable Unit shall provide that the Affordable Unit shall be used as the principal residence of the Affordable Unit's Qualifying Household and for no other purpose. A Qualifying Household shall be considered as occupying the Unit if the Qualifying Household is living in the Unit for at least ten (10) months out of each calendar year. Upon receipt of a written request, City may grant a temporary waiver of this occupancy requirement for good cause in its sole discretion The lease for an Affordable Unit may allow the Qualifying Household to have a Home Office so long as the Affordable Unit is the Qualifying Household's principal residence. The lease shall further provide that the Qualifying Household shall not lease or sublease its Affordable Unit or its right of occupancy. Owner shall enforce such restrictions. 3.14 City Right of First Refusal. Owner hereby grants to City a right of first refusal to lease any or all of the Affordable Units at the fair market value. 4. Density Bonus; Concessions; Waivers; Parking. In exchange for the agreement to the construct the Affordable Units on the terms and conditions set forth herein, and subject to the requirements of the Density Bonus Law, the City has agreed to the following: 4.1 Density Bonus. The Project may have a total of four hundred sixty (460) units. The base density for the Property under the City's zoning allows for three hundred eighty four (384) dwelling units. This Agreement provides for a density bonus of seventy six (76) units based upon Owner's agreement to provide the Affordable Units. 4.2 Concession. 'file City grants a concession relieving the Project from the City's requirements for parking stalls. Tile parking stalls for the Project may measure a length of seventeen (17) feet, plus a two (2) foot overhang, for a total of nineteen (19) feet. 7 17942.001 55\42688948.1 DOC #2025-0014937 Page 8 of 21 4.3 Waivers. Owner is not requesting waivers and therefore this Agreement does not provide for waivers. 4.4 Parking; Allowance Pursuant to Density Bonus Law. The Project shall comply with the parking requirements set forth in the Density Bonus Law, including the use of uncovered parking. The Project shall provide parking spaces in accordance with the following ratios: Unit Tyne Number oi' Units Ratio of Parking(# of Units Quantity of Parking I Bedroom 239 1 239 2 Bedroom 195 1.5 293 3 Bedroom 26 1.5 39 Total 460 571 4.5 No Further Concessions, Incentives, or Waivers. Owner acknowledges and agrees that no other incentives, concessions, waivers or other request has been made or is required by the City in connection with the request for a Density Bonus, and that City has fully satisfied any duty the City may have under the Redlands Municipal Code, the Density Bonus Law, or any other law or regulation applicable to the Project, to provide any development incentive, concession, or waiver as it relates to the Project, including the waiver or reduction of any building, zoning, or other requirement. By this Agreement, Owner releases any and all claims Owner may have against the City related to or arising from, in any way, City's obligation to waive requirements of or provide development incentives or concessions pursuant to any state, federal, or local law, rule, or regulation applicable to the Project. Permits and Processing; Compliance with Laws. 5.1 Owner, at its sole cost and expense, shall secure or cause to be secured any and all permits that may be required by City or any other federal, state, or local government entity having or claiming jurisdiction over the Property or Project. Upon securing any and all permits, Owner shall carry out and perform the development, construction, management, maintenance and rental of the Project in conformity with all applicable federal, state, and local laws and regulations, and al I conditions of approval issued for the Project. 5.2 City shall have no responsibility for the construction, installation, management, operation or maintenance of the Project. 5.3 Owner acknowledges and understands that, except as specifically provided for herein, this Agreement shall not constitute an amendment, modification, enlargement or other 17942.00155\426889,18.1 DOC #2025-0014937 Page 9 of 21 change to the Entitlements. Owner shall be obligated and solely responsible for applying lor, obtaining, and complying with any further approvals or permits necessary. 5.4 Nothing contained in this Agreement shall require Owner or City to do anything contrary to or refrain from doing anything required by federal or state law, or regulations promulgated thereunder, which are applicable to the construction, management, maintenance, and rental of the Affordable Units and the Project. 5.5 Owner agrees that this Agreement requires compliance with the Density Bonus Law. Unless specifically prohibited by law, in the event of a conflict between the Density Bonus Law and the lnclusionary Housing Ordinance, the provisions which require a lower amount of Affordable [lent or additional protections for renters ol'Affordable Units shall apply. 6. No Discrimination. In addition to any other nondiscrimination provisions applicable to the Property under federal, state or local law, Owner by and for itself and any successor in interest covenants that there shall be no discrimination against, or segregation of, any persons, or group of persons, on account of any basis listed in subdivision (a) and (d) of Section 12955 of the Government Code, as those bases are defined in Sections 12926, 12926.1, subdivision (m) and paragraph (1) of subdivision (p) of Section 12955, and Section 12955.2 of the Government Code, in the enjoyment, sale, lease or development of the Property, nor shall Owner itself, or any person claiming under or through it, establish or permit any such practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property or any portion thereof. The foregoing covenants shall run with the land. 7. Term. The Term of this Agreement shall be fifty-five (55) years commencing upon the date of the City's issuance of the first certificate of occupancy for the Project. 8. Termination. This Agreement shall become null and void shall: (i) the City deny the Project entitlements, or (ii) the Project entitlements are voided, cancelled, terminated, expire or new entitlements, not related to the Project, are approved for the Property; provided, however, this Agreement shall apply to any units constructed for the Project under the entitlements. Owner shall notify City, in writing, of Owner's intent to terminate this Agreement under this Section 8. 9. Indemnification. Owner shall defend (with counsel of City's choosing and the reasonable consent of Owner, which may be joint defense counsel upon City's and Owner's consent, in each of their sole and absolute discretion), indemnify and hold harmless City and City's officers, officials, agents, employees, representatives, and volunteers (each, an "Indernnitee") from and against any loss, damage, costs, expenses, liability, claim, or judgment (collectively, "claims") relating in any manner to the Property or the Project, or the approval of or perforinance this this Agreement, except to the extent any such claims are caused by the gross negligence or willful misconduct of an Indemnitee. 9 17942.00 i 55\42688948. i DOC #2025-0014937 Pagel 0 of 21 10. City's Right to Inspect Affordable Units and Documents. Tile City may inspect the Affordable Units at any reasonable time for so long as this Agreement remains in effect, to determine Owner's compliance with this Agreement. 11. Assignment and Transfer by Owner. With the exception of individual leases entered into between Owner and Qualifying Households that comply with the terms of this Agreement, Owner shall: (i) notify City in writing of any proposed sale, transfer, or assignment of all or any portion of the Property, and (ii) deliver to City an assignment and assumption agreement (or other agreement) executed by Owner and its transferee/assignee pursuant to which Owner's transferee/assignee has agreed to assume all of Owner's covenants and obligations set forth herein in such form as reasonably approved by City. Any deed transferring the Project, or any interest in the Affordable Units, shall contain a covenant stating that the Owner, or its successors or assigns, shall not sell, rent, lease, sublet, assign or otherwise transfer any interests for the same without the written approval of the City confirming that the sale or rental price of the Affordable Unit(s) is consistent with the limits established for Very Low income Households. 12. Defaults and Remedies. The Parties shall have the right to specifically enforce each and every covenant, condition, restriction, and provision in this Agreement and the Parties hereby agrees and acknowledges that money damages are an inadequate remedy for any default under this Agreement. 12.1 Default. A party shall be in default of this Agreement if it breaches any term or provision of this Agreement, and fails to correct the violation within thirty (36) days after receipt of notice from the other party; provided, however, if a longer period to cure the violation is reasonably necessary, and the party in breach of the Agreement is diligently pursuing a cure, then it shall have a reasonable time necessary to cure the breach, but not to exceed ninety (90) days. 12.2 Remedies. Upon a default of this Agreement, either Party may institute any appropriate legal actions or proceedings necessary to enforce this Agreement, including but not limited to actions for injunctive relief or damages. The remedies allowed under this Agreement include enforcement of all requirements of Owner to comply with the Redlands Municipal Code, and any and all remedies allowed under the Redlands Municipal Code for violations of its provisions. 12.3 Institution of Legal Actions, Attorney's Fees and Costs. Any legal actions must be instituted in the Superior Court of the County of San Bernardino, State of California, or in any other court in that county. In the event of any litigation between the Parties hereto, the prevailing Party shall be entitled to receive, in addition to the relief granted, its reasonable attorney's fees (provided, however, that the attorneys' fees awarded pursuant to this Section shall not exceed the hourly rate paid by the City for legal services multiplied by the reasonable number of hours spent by the prevailing Party in the conduct of the litigation) and costs and such other H 17942.001 i5\42698943.1 DOC #2025-0014937 Page 11 of 21 costs incurred in investigating the action and prosecuting the same, including Costs for eXI)crt witnesses, costs on appeal, and for discovery. 13. Miscellaneous. 13.1 Entire Agreement. This Agreement and all of the exhibits and attachments hereto and thereto set forth and contain the entire understanding and agreement of the Parties, and there are no oral or written representations, understandings or ancillary covenants, undertakings or agreements which are not contained or expressly referred to herein or therein. No testimony or evidence of any such representations, understandings or covenants shall be admissible in any proceeding of any kind or nature to interpret or determine the terms or conditions of this Agreement. 13.2 Assignment by City. City shall have the right, in its sole and absolute discretion, to assign its interests in this Agreement without Owner's approval to a non-profit organization of its choosing. City shall provide notice to Owner of any such assignment. 13.3 Severability. If any term, provision, covenant or condition of this Agreement shall be determined invalid, void or unenforceable, the remainder of this Agreement shall not be affected thereby to the extent such remaining provisions are not rendered impractical to perform taking into consideration the purposes of this Agreement. 13.4 Notices. As used in this Agreement, "notice" includes, but is not limited to, the communication of notice, request, demand, approval, statement, report, acceptance, consent, waiver, appointment or other communication required or permitted hereunder. All notices shalt be in writing and shall be considered given either: (i) when delivered in person to the recipient named below; or (ii) on the date of delivery shown on the return receipt, after deposit in the United States mail in a sealed envelope as either registered or certified mail with return receipt requested, and postage and postal charges prepaid, and addressed to the recipient named below; or (iii) two (2) days after deposit in the United States mail in a sealed envelope, first class mail and postage prepaid, and addressed to the recipient named below; or (iv) one (1) day after deposit with a known and reliable next -day document delivery service (such as FedEx), charges prepaid and delivery scheduled next -day to the recipient named below, provided that the sending Party receives a confirmation of delivery from the delivery service provider. All notices shall be addressed as follows: Owner: Lugonia Park Associates, LLC City: 35 Cajon Street P.O. Box 542 Redlands, California 92373 Loma Linda, CA 92354 Attention: City Clerk Attention: Daniel Kunihira City of Redlands Such addresses may be changed by notice to the other party given in the same manner as provided above. 179,12.00155\42688948.1 DOC #2025-0014937 Page 12 of 21 13.5 Section Headings. All section headings and subheadings are inserted for convenience only and shall not affect any construction or interpretation of this Agreement. 13.6 Sinf,ular and Plural. As used herein, the Singular of any word includes the Plural, and vice versa, as context so dictates. Masculine, feminine, and neuter forms of any word include the other as context so dictates. 13.7 Joint and Several Obligations. if at any time during the term of this Agreement the Property and/or Project is owned, In whole or in part, by more than one Owner, all obligations of such Owner under this Agreement shall be joint and several, and the default of any such Owner shall be the default of all such Owners. 13.8 Computation of Days. Unless otherwise specified in this Agreement, the term "clays" shall mean calendar days. 13.9 Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Agreement by the other Party, or the failure by a Party to exercise its rights upon the default of t11e other Party, shall not constitute a waiver of such Party's right to insist and demand strict compliance by the other Party with the terms of this Agreement thereafter. 13.10 Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the Party benefited thereby of the covenants to be performed hereunder by such benefited Party. 13.11 Proiect as Private Undertaking. It is specifically understood and agreed by and between the Parties hereto that the development of the Project is a private development, that neither Party is acting as the agent of the other in any respect hereunder, and that each Party is an independent contracting entity with respect to the terms, covenants, and conditions contained in this Agreement. No partnership, joint venture, or other association of any kind is formed by this Agreement. The only relationship between City and Owner is that of a government entity regulating the development of private property and the Owner of such property. 13.12 Successors in Interest. The burdens of this Agreement shall be binding upon, and the benefits of this Agreement shall inure to, al I successors in interest to the Parties to this Agreement. All provisions of this Agreement shall be enforceable as equitable servitudes and constitute covenants running with the land. Each covenant to do or refrain from doing some act hereunder with regard to development of the Property: (a) is for the benefit of and is a burden upon every portion of the Property and the Project; (b) runs with the Property and the Project and each portion thereof; and, (c) is binding upon each Party and each successor in interest during ownership of the Property and the Project or any portion thereof. 13.13 Covenants Run with tilt Land. The Property shall be held, sold, conveyed, hypothecated, encumbered, used, occupied and improved subject to the covenants, conditions, and restrictions set forth herein. The covenants, conditions, restrictions, reservations, equitable servitudes, liens and charges set forth ill this Agreement shall run with the Properly and shall be lea 17942.00155W 268894 8.1 DOC #2025-0014937 Page 13 of 21 binding upon Owner and all persons having any right, title or interest in the Property, or any part thereof, their heirs, and successive owners and assigns, shall inure to the benefit of City and its successors and assigns, and may be enforced by City and its successors and assigns. The covenants established In this Agreement shall, without regard to technical classification and designation, be binding for the benefit and in favor ofCity and its successors and assigns, and the Parties hereto expressly agree that this Agreement and the covenants herein shall run in favor of City, without regard to whether City is or remains an owner of any land or interest therein to which such covenants relate. However, all such covenants and restrictions shall be deemed to run in favor of all real property owned by City which real property shall be deemed the benefited property of such covenants and this Agreement shall create equitable servitudes and covenants appurtenant to all real property owned by City and running With the Property in accordance with the provisions of Civil Code Section 1468. Furthermore, all of the covenants, conditions, and restrictions contained herein shall also constitute easements in gross running in favor of City. City is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own right and for the purposes of protecting the interests of the community and other parties, public or private, in whose favor and for whose benefit this Agreement and the covenants running with the land have been provided. Owner hereby declares its understanding and intent that the burden of the covenants set forth herein touch and concern the land and that the Owner's interest in the Property is rendered less valuable thereby. Owner hereby further declares its understanding and intent that the benefit of such covenants touch and concern the land by enhancing and increasing the enjoyment and use of the Property..by the residents of City and by furthering the health, safety, and welfare of the residents of City. Owner hereby further declares its understanding that the covenants set forth in this Agreement are required by Chapter 18.230 of the Redlands Municipal Code to run with the land and the Property and Project for the duration of the Term. 13.14 No Subordination. City's approval of the necessary land use entitlements that authorize Owner to develop, operate, and maintain the Project was based upon Owner's obligation to provide no less than twenty (20) Affordable Units pursuant to the terms and conditions of this Agreement. During the Term, this Agreement shall have priority over any and all mortgages, deeds of trust, and other similar forms of secured financing recorded against the Property or any portion thereof. 13.15 Further Actions and Instruments. Each of the Parties shall cooperate with and provide reasonable assistance to the other to the extent contemplated hereunder in the performance of all obligations under this Agreement and the satisfaction of the conditions of this Agreement. Upon the request of either Party at any time, the other Party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary under the terms of this Agreement to carry out the intent and to fulfill the provisions of this Agreement or to evidence or consummate the transactions contemplated by this Agreement. City hereby authorizes City Manager to take such other actions and negotiate and execute any additional agreements as may be necessary or proper to fulfill the City's obligations under this Agreement. 13 17942.00155\42 G 8 8948.1 DOC #2025-0014937 Page 14 of 21 The City Manager may delegate her or his powers and duties under this Agreement to an authorized management level employee of the City. 13.16 Third Party Beneficiaries. The Parties acknowledge and agree there are no third party beneficiaries of this Agreement. City shall have frill right and ability to enforce each and every covenant and restriction in this Agreement. No other person or entities shall have any right of action hereunder. 13.17 Interpretation and Governing Law. This Agreement shall be construed as a whole according to its fair language and common meaning to achieve the objectives and Purpose of the Parties hereto, and the rule of construction that ambiguities are to be resolved against the drafting party shall not be employed in interpreting this Agreement. This Agreement and any dispute arising hereunder shall be governed and interpreted in accordance with the laws of the State of California. 13.18 Amendment. Any amendment, change, or modification of this Agreement must be executed in writing and is subject to approval by the City Council, except to the extent the City Manager, or other designee, is authorized to execute any such amendment, change or modification. 13.19 Time of Essence. Time is of the essence in the performance of the provisions of this Agreement as to which time is an element. 13.20 Authority to Execute. The person or persons executing this Agreement on behalf of Owner warrants and represents that lie or she/they have the authority to execute this Agreement on behalf of his or her/their corporation, partnership or business entity and warrants and represents that he or she/they has/have the authority to bind Owner to the performance of its obligations hereunder 13.21 Counterparts. '['his Agreement may be executed in two or more separate counterparts, each of which, when so executed, shall be deemed to be an original. Such counterparts shall, together, constitute and shall be one and the same instrument. This Agreement shall not be effective until the execution and delivery by the Parties of at least one set Of counterparts. The Parties hereunder authorize each other to detach and combine original signature pages and consolidate them into a single identical original. Any one of such completely executed counterparts steal I be sufficient proof of this Agreement. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date and year first set forth above. [-,Signalures can Following Page] 14 1794 2.0015 5\42688948.1 DOC #2025-0014937 Page 15 of 21 APPROVED AS TO FORM: 4-- Vvette Abich Garcia, 6ty Attorney ATTEST: City Clerk 15 "CITY" CITY OF REDLANDS, a California municipal corporation By: dkL P4 Cghtles M. pu .7 , i Manager "OWNER" Lugonia Park Associates, LLC, a California limited liability company ti By: Da#f Kunihira Its: Manager 17942 00155\42659948.1 DOC #2025-0014937 Page 16 of 21 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'Cali{ornia County ol•San Bernardino On py , 2024 before me, A- IGIG\ Notary Public, personally , ppea •ed DU n'\ e k Y-U \ hi rA , who proved to me on the basis of satisfactory evidence to be the person(s� ,hose name(s) is/q,& subscribed to the within instrument and acknowledged to me that he/sKe/they executed the same in his/lrJth,Oir authorized capacity(c{s), and that by his/112r/t�(eir 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 PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNFSS my hand and official seal. Signature (Seal) ALICIA DIAZ Notary Public - California San Bernardino County Commission M 2417756 - My Comm. Expires Sep 23, 2026 DOC #2025-0014937 Page 17 of 21 CALIFORNIA ACKNOWLEDGEMENT CIVIL CODE § 1189 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 County of San Bernardino On Wednesday, December 4, 2024 before me, Jennifer Macias, Notary Public, personally appeared Charles M. Duggan, Jr., and Jeanne Donaldson, who proved to me on the basis of satisfactory evidence to be the persons whose names are subscribed to the within instrument and acknowledged to me that they executed the same in their authorized capacity, and that by their signatures on the instrument the persons, or the entity upon behalf of which the persons acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Sign 17�1 Si natur of Notary Public *MY JENNIFER MACIASNotary Public - CaliforniaSan Bernardino CountyCommission # 2388813 Comm. Expires Dec 31, 2025 (Seal) Copyright © 2018 NotaryAcknowledgement.com. All Rights Reserved. DOC #2025-0014937 Page 18 of 21 EXHIBIT A DESCRIPTION OF SUBJECT PROPERTY Description For APN/Parcel ID(s): 0167-171-15-0-000 THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS: PARCEL]: BEING A PORTION OFTHE HE SOUTH HALF OF T1-1E NORTHEAST QUARTER OF SECTION 21, TOWNSHIP 1 SOUTH, RANGE 3, WEST SAN BERNARDINO MERIDIAN, IN THE CITY OF REDLANDS, COUNTY OF SAN BERNARDINO, STATE OF CALIFORNIA, ACCORDING TO THE OFFICIAL PLAT THEREOF, SAID PORTIONS BEING DESCRIBED AS PARCELS 1 AND 2 OF THAT CERTAIN DEED TO LUGONIA PARK ASSOCIATES, A CALIFORNIA LIMITED LIABILITY COMPANY, RECORDED APRIL 11,1984 AS INSTRUMENT NO. 84-083715, OFFICIAL RECORDS OF SAID COUNTY, DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHWEST CORNER OF SAID PARCEL 2, SAID CORNER BEING A POINT OF INTERSECTION BETWEEN THE NORTHWEST CORNER OF THE SOUTH HALF OF THE NORTHEAST QUARTER OF SAID SECTION 21, AND THE EASTERLY LINE OF THAT CERTAIN PARCEL OF LAND CONVEYED TO THE STATE OF CALIFORNIA BY DEED RECORDED AUGUST 08, 1975 IN BOOK 9745, PAGE 592 AND RE RECORDED AUGUST 08, 1979 IN BOOK 9745, PAGE 595, OFFICIAL RECORDS OF SAID COUNTY, SAID POINT BEING DISTANT SOUTH 89°47'47" EAST 8.23 FEET (8.22 FEET PER SAID DEEDS); THENCE CONTINUING ALONG THE NORTHERLY LINE OF SAID SOUTH HALF AND SAID PARCELS 1 AND 2 SOUTH 89047'47" EAST 816.41 FEET TO THE NORTHEAST CORNER OF SAID PARCEL 1; THENCE LEAVING THE NORTHERLY LINE OF SAID SOUTH HALF AND ALONG THE EASTERLY LINE OF SAID PARCEL I SOUTH 00018'33" EAST 717.50 FEET; THENCE LEAVING SAID EASTERLY LINE AT RIGHT ANGLES SOUTH 89041'27" WEST 770.55 FEET TO A POINT ON THE WESTERLY LINE OF SAID PARCEL 2, SAID WESTERLY LINE ALSO BEING THE EASTERLY LINE OF SAID STATE OF CALIFORNIA PARCELS, SAID WESTERLY AND EASTERLY LINES ALSO BEING THE BEGINNING OF A NON -TANGENT CURVE CONCAVE EASTERLY, AND HAVING A RADIUS OF 1200.00 FEET, A RADIAL LINE TO SAID POINTTHAT BEARS NORTH 72019'31" EAST; THENCE ALONG THE WESTERLY LINE OF SAID PARCEL 2 AND SAID EASTERLY LINE STATE OF CALIFORNIA PARCELTHE FOLLOWING TWO (2) COURSES: 1.) THENCE NORTHERLY ALONG THE ARC OF SAID 1200.00 FOOT RADIUS CURVE TH[ROUGII A CENTRAL ANGLE OF 18048'40", AN ARC DISTACNE OF 393.98 FEET; 17942.00155\4268894 8.1 DOC #2025-0014937 Page 19 of 21 2.) THENCE-' TANGENT TO SAID CURVE' NORTI1 01.08'1 1" EAST 336.47 FELTTO THE POINT OF BEGINNING. SUBJEC'I "I'O All, COVENANTS, RIGHTS, DEDICATIONS, RIGHTS -OF -WAY AND EASEMENTS OF RECORD. THE ABOVE DESCRIBED PARCEL OF LAND CONTAINS 13.48 ACRES, MORE OR LESS PURSUANT TO CERTIFICATE OI' COM 19, 2023 AS INSTRUMENT NO. 2023-0013742 OF OFFICIAL RECORDS. Fa DOC #2025-0014937 Page 20 of 21 EXHIBIT B SITE PLAN 17942,00155\42688948, I DOC #2025-0014937 Page 21 of 21 m -o D z TENNESSEE ST. 3 - Oc • W ' r w �c o I1 N I pc ' 1 ;0 Z_ II 3~ oG)-_ w L 1 r ' 1 � II 00 w — OZ - - 11 we Az w Oc it �~ 3� � N _ I `- c II 1 - ' 1 ' � Z 70 r r Az 1 W cn i 1 I co 1 G) II cz 0 oro w 'pc We We 1 Z z H r D Z D D m