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SR-022608-7A~_ ~;,Yp, City Council Report Santa Monica City Council Meeting: February 26, 2008 Agenda Item: To: Mayor and City Council From: Marsha Jones Moutrie, City Attorney Subject: ORDINANCES APPROVING THE DEVELOPMENT AGREEMENT AMENDMENT BETWEEN THE CITY AND MAGUIRE PROPERTIES - 3030 OLYMPIC, LLC, A DELAWARE LIMITED LIABILITY COMPANY FOR LANTANA'S EAST AND THE. DEVELOPMENT AGREEMENT AMENDMENT BETWEEN THE CITY AND MAGUIRE PROPERTIES - 3301 EXPOSITION, LLC, A DELAWARE LIMITED LIABILITY COMPANY FOR LANTANA SOUTH, TO ALLOW A FUNDING ALTERNATIVE TO CONSTRUCTING FACITIES AT EDISON SCHOOL CAMPUS FOR JOINT USE PUBLIC IMPROVEMENTS. Recommended Action Staff recommends that the City Council adopt the attached ordinances. Executive Summary At its meeting on February 12, 2008, the City Council introduced for first reading an ordinance approving the Development Agreement amendment between the City and Maguire Properties - 3030 Olympic, LLC, a Delaware Limited Liability Company for Lantana East; -and it also introduced for first reading an ordinance approving the Development Agreement amendment between the City and Maguire Properties - 3301 Exposition, LLC, a Delaware Limited Liability Company for Lantana South, to allow a funding alternative to construction facilities at Edison School campus for joint use public improvements. The ordinances are now presented to the City Council for adoption. Prepared by: Marsha Jones Moutrie, City Attorney Approved: Forwarded to Council: P Manager EXHIBIT 1 RECORDING REQUESTED BY: CITY OF SANTA MONICA WHEN RECORDED MAIL TO: City of Santa Monica City Attorney's Office 1685 Main Street, Third Floor Santa Monica, CA 90401 Attention: Senior Land Use Attorney Space Above Line For Recorders Use No Recording Fee Required Government Code Section 27383 AMENDMENT NUMBER ONE TO DEVELOPMENT AGREEMENT THIS AMENDMENT NUMBER ONE TO DEVELOPMENT AGREEMENT ("First Amendment") is entered into as of this day of , 2008 ("Effective Date"), by and between THE CITY OF SANTA MONICA, a municipal corporation organized and existing pursuant to the laws of the State of California and the Charter of the City of Santa Monica ("City") and MAGUIRE PROPERTIES - 3030 OLYMPIC, LLC, a Delaware limited liability company ("Maguire") with reference to the following facts: A. Maguire is the owner of that certain real property ("Property") located in the City of Santa Monica, California, which is more particularly described in Exhibit "A" to this First Amendment. Exhibit A is hereby incorporated by reference herein. B. The City and the prior owner of the Property entered into a Development Agreement dated as of October 28, 2004 pursuant to California Government Code Sections 65864 et seq. and Santa Monica Municipal Code Chapter 9.48. The Original Development Agreement was recorded on November 19, 2004 in the Official Records of the Los Angeles County Recorder's Office as Instrument 04 2926418. C. The Original Development Agreement authorized the construction of a three- story, 64,105 square foot entertainment production/post-production studio building with a two-level subterranean parking structure providing parking for the existing building and 200 spaces for the proposed building. D. The Original Development Agreement requires the Developer to construct specified improvements on the Edison Elementary School campus in the City for the City's Playground Partnership Program. However, the school district is preparing plans to completely reconfigure the campus rendering construction of the playground facilities infeasible. E. The purpose of this First Amendment is to allow the developer to pay funds to the City to be used by the City to assist in the development and operation of joint use public improvements at the Edison School in Santa Monica instead of constructing outdoor playground improvements at the school as is currently required by the Original Development Agreement. F. The City's Planning Commission held a duly noticed public hearing on January 16, 2008 with respect to this First Amendment and recommended that the City Council adopt the proposed amendment. G. On February 12, 2008, the City Council held a duly noticed public hearing on this First Amendment. Following completion of the hearing, the"City Council adopted Ordinance No. (CCS) approving thisFirst Amendment and authorizing its execution by the City Manager. H. In taking this action, the City Council has (a) specifically considered and approved the impacts and benefits of the requested First Amendment and has concluded that this First Amendment is consistent with the public health, safety, and welfare of the residents of the City and the surrounding region and promotes the goals, objectives, and policies of the General Plan, (b) determined that the City has complied with all procedures required by the Development Agreement Statutes with respect to this First Amendment, and (c) duly authorized the City to enter into this First Amendment. NOW, THEREFORE, in consideration of the foregoing and the covenants and conditions hereinafter set forth, the City and Maguire hereby agree as follows: 1. Section 2.5.5 of the Original Development Agreement is hereby amended to read as follows: 2.5:5 Development Milestones. On or before the applicable milestone dates set forth below (the "Milestone Dates"), Developer shall achieve the milestones set forth below (the "Milestones"). If Developer fails to achieve any Milestone on or before the applicable Milestone Date (as such date may be extended pursuant to Section 15.8 below), this Agreement shall terminate without any further action of the parties. Upon such termination, Developer's vested rights under this Agreement to develop the Project shall expire, except as provided in Section 11.6 below. Milestone Date Milestone March 31, 2005 Developer shall obtain a building permit for the Project or commence construction of the sidewalk improvements more particularly described in Exhibit "G" attached hereto. Except as provided in Sections 4.4 and 15.8 below, if a building permit is obtained by the milestone date, Developer shall complete construction of the sidewalks prior to issuance of a certificate of occupancy for the Project. Prior to the issuance of a Certificate of Occupancy for the Project (C of O), the Developer shall pay $356,200.00 to the City for the development of Joint Use improvements and programming between the City of Santa Monica and the Santa Monica-Malibu Unified School District (SMMUSD), more particularly described in Exhibit "G" attached hereto. June 30, 2006 Developer shall obtain a building permit for the Project or pay the arts fees more particularly described in Exhibit "G" attached hereto. December 31, Developer shall obtain a certificate of occupancy for the Project. 2009 2. Exhibit G of the Original Development Agreement is hereby amended to read as follows: EXHIBIT "G" PUBLIC BENEFITS 1. New Sidewalks. Developer shall construct new sidewalks along the streets shown on Exhibit "N" attached hereto, a portion of which are located within the City of Los Angeles. If Developer is not permitted by the City of Los Angeles to construct such sidewalks despite Developer's good faith efforts to obtain approval by the City of Los Angeles, Developer shall construct an equivalent amount of square footage of the new sidewalks along Olympic Boulevard in the alternate location shown on Exhibit "N" or in the general Project vicinity in the City of Santa Monica in a location to be determined by the City. Developer shall be responsible for construction of the sidewalks, removing construction related materials, backfilling and restoring the adjacent grade and landscaping that is disturbed by the construction of the sidewalks. For that portion of the sidewalk located in the City of Santa Monica, the City shall be responsible for all utilities, and street trees, including the relocation or preservation of existing specimen trees. Such sidewalks shall be designed and constructed in accordance with applicable laws, policies and regulations of the City of Santa Monica, or City of Los Angeles then in effect for the pertinent jurisdiction and the specifications included in Exhibit "N." Except as provided in Sections 4.4 and 15.8 above, Developer shall commence construction of the sidewalks as set forth in Section2.5.5 above, shall prosecute such construction with reasonable diligence and shall complete construction prior to issuance of a certificate of occupancy for the Project. Developer shall be released from this obligation if the developer of Lantana East constructs such improvements. 2. Childcare Contribution. Following completion of the Project, Developer shall make a childcare contribution to the City in the amount of $133,350. Said contribution shall be payable in five equal installments of $26,670.00, with the first installment due and payable on the first anniversary of the issuance of the certificate of occupancy for the Project-and the four subsequenfinstallments on the second, third, fourth and fifth anniversaries, respectively. The City shall deposit such contributions into a separate trust fund to be used exclusively to provide for childcare in the City. When awarding childcare grants or subsidies, first priority should be given to low-income households with consideration given to family size, income and need. Subject to the foregoing, preference should be given to Pico Neighborhood residents. 3. Arts Fee. On or before issuance of a final certificate of occupancy for the Project, Developer shall pay an arts fee of $60,000 to the City to be deposited into a separate fund for the arts. $25,000 of the arts contribution should support one-time capital or event costs that enhance Virginia Avenue Park programs, including one-time costs associated with the park-based Youth Center (multimedia area) in the event that grant funds are not available or are insufficient for full build-out in this azea of the facility. 4. Edison School Joint Use Imnrovements. Prior to the issuance of a Certificate of Occupancy for the project, the Developer shall pay a fee of $356,200.00 to the City to be deposited into a sepazate fund to be used for Joint Use improvements and programming for these improvements by the City of Santa Monica and The Santa Monica-Malibu Unified School District (SMMUSD) at the Edison School campus (the Edison School Joint Use Improvements). These funds shall be used either for capital or operating costs for the Joint Use Improvements at the school. The specific Edison School Joint Use Improvements shall be subsequently determined by the City and SMMUSD. Developer shall be released from the obligation to pay the fee of $356,200.00 to the extent that the developer of Lantana South has satisfied this requirement. In addition to the above obligation, developer shall pay the City an annual operating subsidy for the Edison School Joint Use Improvements of $35,600.00 per year for five (5) years. The first payment shall be due prior to the issuance of a Certificate of Occupancy for Lantana East (C of O) whether or not the Joint Use Improvements have been constructed and the next four payments shall be due on the first, second, third, and fourth anniversazies of the issuance of the C of O, respectively. Developer shall be released from the obligation to make an annual operating subsidy payment to the extent that the developer of Lantana South has made such a payment. 5. Community. To the extent that Developer determines that there is conference room space available in the Project, or another building in the immediate vicinity of the Project owned or controlled by Developer, Developer shall make such space available at no cost for use by community organizations from time to time. Developer shall have the right to impose reasonable conditions on the use of such space, including but not limited to requiring reasonable advance notice, limiting occupancy and/or duration of use, and keeping the space clean. Notwithstanding anything to the contrary contained herein, Developer shall not be deemed to be in default hereunder if Developer fails to provide such space. 6. Job Fair. Developer shall organize an annual symposium/job fair designed to increase job opportunities in the entertainment industry for at-risk youths and young adults in the vicinity of the Project site. Developer shall solicit and consider in good faith reasonable suggestions from interested community groups in connection with the symposium/job fair. The symposium/job fair shall include at a minimum, (a) members of the entertainment industry participating in seminars and/or roundtable discussions to provide information on career opportunities in the entertainment industry, and advice regarding how to best pursue these opportunities, (b) entertainment businesses that aze interested in mentoring and providing internship programs for at-risk youths who live in the vicinity of the project site, and (c) a jobs fair to match at risk youth and young adults in the neighborhood to job opportunities in the entertainment industry. The first symposium/job fair shall be held on the first anniversary of the issuance of a certificate of occupancy for the Project and each subsequent anniversary of such issuance thereafter through December 31, 2009. Developer may provide a single symposium/job fair per year to satisfy the requirements for both Lantana East and Lantana South. 7. First Source Hiring Policy. Developer shall implement a first source hiring policy ("First Source Hiring Policy") for the Project consistent with the following guidelines: A. Purpose. The purpose ofthe First Source Hiring Policy is to facilitate the employment by Developer and its contractors at the Project oflow-income job applicants who reside in the proximity of the Project ("Targeted Job Applicants"). B. Targeted Jobs Applicants. Targeted Jobs Applicants shall exclusively be low- income individuals ("Low-Income Individuals"). ALow-Income Individual shall mean an individual whose. household income is no greater than 80% of the median income for the Los Angeles Metropolitan Statistical Area. Job referrals under the First Source Hiring Policy shall be made in the order of priority set forth below. First Priority: Low-Income Individuals living within one mile of the Project. Second Priority: Low-Income Individuals living in census tracts throughout the City for which household income is no greater than 80% of the median household. income for the Los Angeles Metropolitan Statistical Area. Developer shall consult with trade unions with apprenticeship and cooperative programs to facilitate the hiring and training of apprentices from the local neighborhood. C. Covera¢e. The First Source Hiring Policy shall apply to hiring for all on-site jobs ("On-Site Jobs") by the Developer and its contractors ("Contractors"). On-Site Jobs shall mean all jobs provided by a Contractor for which at least fifty percent of the work hours occur at the Project, and that arises out of either an employment relationship or an independent contractor relationship. A Contractor shall mean a prime contractor, a subcontractor, or any other business entering into a contract ("Contract") with the Developer or another Contractor. Contractor shall not include any tenant of the Project other than Developer. A Contract shall mean a contract or other agreement that is related to the use, maintenance, or operation of the Project and that will result in On-Site Jobs, directly or indirectly, either under the contract or agreement itself or through one or more subcontracts. D. First-Source Referral System. The First Source Hiring Policy shall be implemented by way of a first source referral system ("First Source Referral System"). The First Source Referral System for the Project may be the same system established for Lantana East. The Developer and City shall engage a mutually agreed upon entity, or individual to at Developer's expense administer and operate the First Source Referral System effectively and efficiently. E. First Source Referral System Responsibilities. The following functions related to the First Source Hiring Policy shall be performed by the First Source Referral System: i) receive Developer or Contractor notification of job openings, promptly initiate recruitment and pre-screening activities, and provide an estimate to employers of the number of qualified applicants it is likely to refer; ii) coordinate with various job-training centers to facilitate access to a pool of qualified applicants from which to draw referrals; iii) screen and refer Targeted Job Applicants according to qualifications and specific selection criteria submitted by employers; iv) maintain contact with Developer and Contractors with respect to their hiring decisions regarding applicants referred by the First Source Referral System; v) assist Developer and Contractor with reporting responsibilities by supplying reporting forms and by other reasonable means; vi) assist the City in monitoring compliance with the First Source Hiring Policy; vii) submit annual aggregate reports for the Developer and .Contractors on the Project site to the- City detailing the employment of Targeted Job Applicants in the Development and the effectiveness of the First Source Hiring Policy; viii) work collaboratively with the Developer, job training centers, Targeted Job Applicants, and governmental entities to administer the First Source Referral System effectively and efficiently. F. Developer's Liaison. The Developer shall designate a liaison ("Developer's Liaison") for issues related to the First Source Hiring Policy. The Developer's Liaison shall work with the First Source Referral System and City officials, as appropriate, to ensure effective implementation of the First Source Hiring Policy. G. Planning. The Developer and the City shall make reasonable efforts to ensure that not later than three (3) months prior to the commencement of construction of the Project, the Developer's Liaison meet with the City and any other appropriate individuals or organizations to design, plan and implement the First Source Referral System in accordance with these guidelines. H. Term. Developer shall implement the First Source Hiring Policy through December 31, 2009. 3. Exhibit K of the Original Development Agreement is deleted in its entirety. 4. Except as amended by this First Amendment, the Original Development Agreement shall remain in full force and effect in accordance with its terms and conditions. 5. The parties hereto shall cause this First Amendment to be recorded in the Official Records of the Los Angeles County Recorder's Office. The cost, if any, of recording this First Amendment shall be borne by Maguire. 6. This First Amendment represents the entire agreement of the parties. This First Amendment integrates all of the terms and conditions mentioned herein or incidental thereto, and supersedes all negotiations or previous agreements between the /// /// parties or their predecessors in interest with respect to all or any part of the subject matter hereof. IN WITNESS WHEREOF; the parties hereto have duly executed this agreement as of the date and year first written above. By: ATTEST: Maria Stewart City Clerk APPROVED AS TO FORM: Marsha Jones Moutrie City Attorney CITY OF SANTA MONICA, a municipal corporation. Lamont Euwell City Manager MAGUIRE PROPERTIES-3030 OLYMPIC, LLC a Delaware limited liability company By: Mazk T. Lammas Secretary EXHIBIT A EXHIBIT "A' LEGAL DESCRIPTION PARCELS 1, 2, 3 AND 4 OF PARCEL MAP NO. 60785, IN THE CITY OF SANTA N1ONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, RECORDED MAY 9; 2007 AND FILED IN BOOK 348, PAGES 17-24 OF PARCEL MAPS, IN THE OFFICIAL RECORDS OF LOS ANGELES COUNTY. Also known as 3030 Olympic Boulevard EXHIBIT 1 a RECORDING REQUESTED BY CITY OF SANTA MONICA WHEN RECORDED MAIL TO City of Santa Monica City Attorney's Office 1685 Main Street, Third Floor Santa Monica, CA 90401 Attention: Senior Land Use Atton No Recording Fee Required Government Code Section 27383 AMENDMENT NUMBER ONE TO DEVELOPMENT AGREEMENT For Recorders Use THIS AMENDMENT NUMBER ONE TO DEVELOPMENT AGREEMENT ("First Amendment") is entered into as of this _ day of , 2008 ("Effective Date"), by and between THE CITY OF SANTA MONICA, a municipal corporation organized and existing pursuant to the laws of the State of California and the Charter of the City of Santa Monica ("City") and MAGUIRE PROPERTIES - 3301 EXPOSITION, LLC, a Delaware limited liability company ("Maguire") with reference to the following facts: A. Maguire is the owner of that certain real property ("Property") located in the City of Santa Monica, California, which is more particularly described in Exhibit "A" to this First Amendment. Exhibit A is hereby incorporated by reference herein. B. The City and the prior owner of the Property entered into a Development Agreement dated as of October 28, 2004 pursuant to California Government Code Sections 65864 et seq. and Santa Monica Municipal Code Chapter 9.48. The Original Development Agreement was recorded on November 19, 2004 in the Official Records of the Los Angeles County Recorder's Office as Instrument 04 3013337. C. The Original Development Agreement authorized the construction of a three- story, 130,000 square foot entertainment production/post-production studio building with a two-level subterranean pazking structure providing pazking for the existing building and 364 spaces for the proposed building. D. The Original Development Agreement requires the Developer to construct specified improvements on the Edison Elementary School campus in the City for the City's Playground Partnership Program. The agreement also requires.that the developer provide an annual operating subsidy for this facility of $35,600 per yeaz for five (5) years. However, the school district is preparing plans to completely reconfigure the campus rendering construction of the playground facilities infeasible. E. The purpose of this First Amendment is to allow the developer to pay funds to the City to be used by the City to assist in the development and operation of joint use public improvements at the Edison School in Santa Monica instead of constructing outdoor playground improvements at the school as is currently required by the Original Development Agreement. F. The City's Planning Commission held a duly noticed public hearing on January 16, 2008 with respect to this First Amendment and recommended that the City Council adopt the proposed amendment. G. On February 12, 2008, the City Council held a duly noticed public hearing on this First Amendment. Following completion of the hearing, the City Council adopted Ordinance No. (CCS) approving this First Amendment and authorizing its execution by the City Manager. H. In taking this action, the City Council has (a) specifically considered and approved the impacts and benefits of the requested First Amendment and has concluded that this First Amendment is consistent with the public health, safety, and welfare of the residents of the City and the surrounding region and promotes the goals, objectives, and policies of the General Plan, (b) determined that the City has complied with all procedures required by the Development Agreement Statutes with respect to this First Amendment, and (c) duly authorized the City to enter into this First Amendment. NOW, THEREFORE, in consideration of the foregoing and the covenants and conditions hereinafter set forth, the City and Maguire hereby agree as follows: 1. Section 2.5.5 of the Original Development Agreement is hereby amended to read as follows: 2.5:5 Development Milestones. On or before the applicable milestone dates set forth below (the "Milestone Dates"), Developer shall achieve the milestones set forth below (the "Milestones"). If Developer fails to achieve any Milestone on or before the applicable Milestone Date (as such date may be extended pursuant to Section 15.8 below), this Agreement shall terminate without any further action of the parties. Upon such termination, Developer's vested rights under this Agreement to develop the Project shall expire, except as provided in Section 11.6 below. For Lantana South Milestone Date Milestone March 31, 2005 Developer shall obtain a building permit for the Project or commence construction of the sidewalk improvements more particularly described in Exhibit "G" attached hereto. Except as ', provided in Sections 4.4 and 15.8 below, if a building permit is obtained by the milestone date, Developer shall complete construction of the sidewalks prior to issuance of a certificate of occupancy for the Project. September 30, Developer shall obtain a building permit for the Project or 2005 commence construction of the improvements to Stewart Park more particularly described in Exhibit "G" attached hereto. Except as provided in Sections 4.4 and 15.8 below, if a building permit is obtained by the milestone date, Developer shall complete construction of the Stewart Park improvements prior to issuance of a certificate of occupancy for the Project. Prior to the issuance of a Certificate of Occupancy for the. Project (C of O), the Developer shall pay $356,200.00 to the City for the development of Joint Use Improvements and programming between the City of Santa Monica and the Santa Monica-Malibu Unified School District (SMMUSD), more particularly described in Exhibit "G" attached hereto. June 30, 2007 Developer shall obtain a building permit for the Project or pay the arts fees more particulazly described in Exhibit "G" attached hereto. December 31, Developer shall obtain a certificate of occupancy for the Project. 2009 2. Exhibit G of the Original Development Agreement is hereby amended to read as follows: EXHIBIT "G" PUBLIC BENEFITS 1. New Sidewalks. Developer shall construct new sidewalks along the streets shown on Exhibit "L" attached hereto, a portion of which are located within the City of Los Angeles. If Developer is not permitted by the City of Los Angeles to construct such sidewalks despite Developer's good faith efforts to obtain approval by the City of Los Angeles, Developer shall construct an equivalent amount of square footage of the new sidewalks along Olympic Boulevazd in the alternate location shown on Exhibit "L" or in the general Project vicinity in the City of Santa Monica in a location to be determined by the City. Developer shall be responsible for construction of the sidewalks, removing construction related materials, backfilling and restoring the adjacent grade and landscaping that is disturbed by the construction of the sidewalks. For that portion of the sidewalk located in the City of Santa Monica, the City shall be responsible for all utilities, and street trees, including the relocation or preservation of existing specimen trees. Such sidewalks shall be designed and constructed in accordance with applicable laws, policies and regulations of the City of Santa Monica, or City of Los Angeles then in effect for the pertinent jurisdiction and the specifications included in Exhibit "L." Except as provided in Sections 4.4 and 15.8 above, Developer shall commence construction of the sidewalks as set forth in Section 2.5.5 above, shall prosecute such construction with reasonable diligence and shall complete construction prior to issuance of a certificate of occupancy for the Project. Developer shall be released from this obligation if the developer of Lantana East constructs such improvements. 2. Stewart Park Improvements. Developer shall construct the new public restroom building at Stewart Park more particularly described in Exhibit "M" and in compliance with the Design and Construction Provisions of Exhibit "P," attached hereto. Developer shall be responsible for any demolition, site preparation and construction, including connecting the improvements to existing utilities or systems (e.g. electrical and plumbing). Developer shall be responsible for stubbing out the utilities or systems to the work. Developer shall repair or replace any landscaping or improvements damaged by Developer in connection with the work. Without limiting the foregoing, Developer shall not be responsible for the repair or upgrade of existing systems, utilities, landscaping or other improvements that are not required for construction of the restroom facility. If the City requests such upgrade or repair, Developer may in its discretion perform such upgrade or repair at the City's expense pursuant to a written change order. Developer shall not be responsible for conditions which are not reasonably foreseeable based on a visual inspection of the work site, including subsurface conditions or conditions within enclosed walls, beneath floors or above ceilings, if the City has knowledge of these conditions and fails to disclose them prior to issuance of the building permits for this public benefit work. Prior to issuance of the building permits for the public benefits work, the City shall use its best efforts to provide Developer with any documents in its control or possession which reveal such conditions. Except as provided in Sections 4.4 and 15.8 above, and shall complete construction prior to issuance of a certificate of occupancy for the Project. Developer shall commence construction of such improvements as set forth in Section 2.5.5 above, shall prosecute such construction with reasonable diligence. Prior to commencing construction, Developer and the City shall enter into a mutually agreeable design build agreement regarding such improvements which shall contain the material terms and conditions set forth on Exhibit "P" attached hereto, and such other terms and conditions as are reasonable and customary for similar public restroom buildings that have been constructed recently in the City of Santa Monica (the "DesignBuild Agreement"). Prior to commencing any work on the Stewart Park restroom improvements (the "Work"), Developer shall submit detailed construction plans and specifications ("Plans") for the City's review and approval for compliance with this Development Agreement and compliance with Technical Codes and issuance of required Technical City Permits (building permits), which shall not be unreasonably withheld, conditioned or delayed. The plans and specifications shall include the materials, colors, finishes, fixtures, lighting and quality of workmanship and materials used in similar public restrooms recently constructed in Douglas Park: All Work will be performed in accordance with the approved plans and pertinent Technical Codes, subject to change orders approved by the Gity; which approval shall not be unreasonably withheld, conditioned or delayed. In addition to the inspections required pursuant to the Technical City Permits, the City may inspect the Work upon reasonable advance notice to ensure that the work is being performed in accordance with the approved Plans and this Development Agreement. Prior to commencement of the Work, Developer and the City shall establish a reasonable construction schedule for the Work. Developer shall perform and complete the work in accordance with such construction schedule subject to customary events of force majure and delays caused by the City. The City shall act reasonably and promptly to avoid delaying the Work. 3. Edison School Joint Use Improvements. Prior to the issuance of a_Certificate of Occupancy for the project, the Developer shall pay a fee of $356,200.00 to the City to be deposited into a separate fund to be used for Joint Use Improvements and programming for these improvements by the City of Santa Monica and The Santa Monica-Malibu Unified School District (SMMUSD) at the Edison School campus (the Edison School Joint Use Improvements). These funds shall be used either for capital or operating costs for the Joint Use Improvements at the school. The specific Edison School Joint Use Improvements shall be subsequently determined by the City and SMMUSD. Developer shall be released from the obligation to pay the fee of $356,200.00 to the extent that the developer of Lantana East has satisfied this requirement: In addition to the above obligation, developer shall pay the City an annual operating subsidy for the Edison School Joint Use. Improvements of $35,600.00 per year for five (5) years. The first payment shall be due prior to the issuance of a Certificate of Occupancy for Lantana South (C of O) whether or not the Joint Use Improvements have been constructed and the next four payments shall be due on the first, second, third and fourth anniversaries of the issuance of the C of O, respectively. Developer shall be released from the obligation to make an annual operating subsidy payment to the extent that the developer of Lantana East has made such a payment. 4. Childcare Contribution. Following completion of the Project, Developer shall make a childcare contribution to the City in the amount of $266,650. Said contribution shall be payable in five equal installments of $53,330.00, with the first installment due and payable on the first anniversary of the issuance of the certificate of occupancy for the Project and the four subsequent installments on the second, third, fourth and fifth anniversaries, respectively. The City shall deposit such contributions into a separate trust fund to be used exclusively to provide for childcare in the City. When awarding childcare grants or subsidies, first priority should be given to low-income households with consideration given to family size, income and need. Subject to the foregoing, preference should be given to Pico Neighborhood residents. 5. Arts Fee. On or before issuance of a final certificate of occupancy for the Project, Developer shall pay an arts fee of $90,000 to the City to be deposited into a separate fund for the arts. $25,000 of the arts contribution should support one-time capital or event costs that enhance Virginia Avenue Park programs, including one-time costs associated with the park-based Youth Center (multimedia area) in the event that grant funds are not available or are insufficient for full. build-out in this area of the facility. 6. Neighborhood Traffic Protection Program. On or before issuance of the certificate of occupancy for the Project (except as provided in Sections 4.4 and 18.8 above), Developer shall complete installation of the Neighborhood Traffic Protection Plan improvements more particularly described on Exhibit "O," attached hereto. Priorto commencement of construction, Developer and the City shall enter into a DesignBuild Agreement regarding such improvements. The Developer's contractor shall construct these improvements pursuant to a City Street Permit which the contractor shall obtain from the Environmental Public Works Management Department 7. Community Room. To the extent that Developer determines that there is conference room space available in the Project, or another building in the immediate vicinity of the Project owned or controlled by Developer, Developer shall make such space available at no cost for use by community organizations from time to time. Developer shall have the right to impose reasonable conditions on the use of such space, including but not limited to requiring reasonable advance notice, limiting occupancy and/or duration of use, and keeping the space clean. Notwithstanding anything to the contrary contained herein, Developer shall not be deemed to be in default hereunder if Developer fails to provide such space. 8. Job Fair. Developer shall organize an annual symposium/job fair designed to increase job opportunities in the entertainment industry for at-risk youths and young adults in the vicinity of the Project site. Developer shall solicit and consider in good faith reasonable suggestions from interested community groups in connection with the symposium/job fair. The symposium/job fair shall include at a minimum, (a) members of the entertainment industry participating in seminars and/or roundtable discussions to provide information on career opportunities in the entertainment industry, and advice regarding how to best pursue these opportunities, (b) entertainment businesses that are interested in mentoring and providing internship programs for at-risk youths who live in the vicinity of the project site, and (c) a jobs fair to match at risk youth and young adults in the neighborhood to job opportunities in the entertainment industry. The first symposium/job fair shall be held on the first anniversary of the issuance of a certificate of occupancy for the Project and each subsequent anniversary of such issuance thereafter throughbecember 31, 2009. Developer may provide a single symposium/job fair per year to satisfy the requirements for both Lantana East and Lantana South. 9. First Source Hiring Policy. Developer shall implement a first source hiring policy ("First Source Hiring Policy") for the Project consistent with the following guidelines: A. Pur ose. The purpose of the First Source Hiring Policy is to facilitate the employment by Developer and its contractors at the Project oflow-income job applicants who reside in the proximity of the Project ("Targeted Job Applicants"). B. Targeted Jobs Ap lin cants. Targeted Jobs Applicants shall exclusively be low- income individuals ("Low-Income Individuals"). ALow-Income Individual shall mean an individual whose household income is no greater than 80% of the median income for the Los Angeles Metropolitan Statistical Area. Job referrals under the First Source Hiring Policy shall be made in the order of priority set forth below. First Priority: Low-Income Individuals living within one mile of the Project. Second Priority: Low-Income Individuals living in census tracts throughout the City for which household income is no greater than 80% of the median household income for the Los Angeles Metropolitan Statistical Area. Developer shall consult with trade unions with apprenticeship and cooperative programs to facilitate the hiring and training of apprentices from the local neighborhood. C. Coverage. The. First Source Hiring Policy shall apply to hiring for all on-site jobs ("On-Site Jobs") by the Developer and its contractors ("Contractors"). On-Site Jobs shall mean all jobs provided by a Contractor for which at least fifty percent of the work hours occur at the Project, and that arises out of either an employment relationship or an independent contractor relationship. A Contractor shall mean a prime contractor, a subcontractor, or any other business entering into a contract ("Contract") with the Developer or another Contractor. Contractor shall not include any tenant of the Project other than Developer. A Contract shall mean a contract or other agreement that is related to the use, maintenance, or operation of the Project and that will result in On-Site Jobs, directly or indirectly, either under the contract or agreement itself or through one or more subcontracts. D. First-Source Referral System. The First Source Hiring Policy shall be implemented by way of a first source referral system ("First Source Referral System"). The First Source Referral System for the Project maybe the same system established for Lantana East. The Developer and City shall engage a mutually agreed upon entity, or individual to at Developer's expense administer and operate the First Source Referral System effectively and efficiently. E. First Source Referral System Responsibilities. The following functions related to the First Source Hiring Policy shall be performed by the First Source Referral System: i) receive Developer or Contractor notification of job openings, promptly initiate recruitment and pre-screening activities, and provide an estimate to employers of the number of qualified applicants it is likely to refer; ii) coordinate with various job-training centers to facilitate access to a pool of qualified applicants from which to draw referrals; iii) screen and refer Targeted Job Applicants according to qualifications and specific selection criteria submitted by employers; iv) maintain contact with Developer and Contractors with respect to their hiring decisions regarding applicants referred by the First Source Referral System; v) assist Developer and Contractor with reporting responsibilities by supplying reporting forms and by other reasonable means; vi) assist the City in monitoring compliance with the First Source Hiring Policy; vii) submit annual aggregate reports for the Developer and Contractors on the Project site to the City detailing the employment of Targeted Job Applicants in the Development and the effectiveness of the First Source Hiring Policy; viii) work collaboratively with the Developer, job training centers, Targeted Job Applicants, and governmental entities to administer the First Source Referral System effectively and efficiently. F. Developer's Liaison. The Developer shall designate a liaison ("Developer's Liaison") for issues related to the First Source Hiring Policy. The Developer's Liaison shall work with the First Source Referral System and City officials, as appropriate, to ensure effective implementation of the First Source Hiring Policy. G. Planning. The Developer and the City shall make reasonable efforts to ensure that not later than three (3) months prior to the commencement of construction of the Project, the Developer's Liaison meet with the City and any other appropriate individuals or organizations to design, plan acid implement the First Source Referral System in accordance with these guidelines. H. Term. Developer shall implement the First Source Hiring Policy through December 31, 2009. 3. Exhibit N to the Original Development Agreement is deleted in its entirety. 4. Except as amended by this First Amendment, the Original Development Agreement shall remain in full force and effect in accordance with its terms and conditions. 5. The parties hereto shall cause this First Amendment to be recorded in the Official Records of the Los Angeles County Recorder's Office. The cost, if any, of recording this First Amendment shall be born by Maguire. 6. This First Amendment represents the entire agreement of the parties. This First Amendment integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. IN WITNESS WHEREOF, the parties hereto have duly executed this agreement as of the date and year first written above CITY OF SANTA MONICA, a municipal corporation By: E. LAMONT EWELL City Manager ATTEST: Maria Stewart City Clerk APPROVED AS TO FORM: Marsha Jones Moutrie City Attorney MAGUIRE PROPERTIES-3301 EXPOSITION, LLC a Delaware limited liability company By: MARK T. LAMMAS Secretary EXHIBIT A EXHIBIT "A' LEGAL DESCRIPTION PARCELS 1, 2 AND 3 OF PARCEL MAP NO. 60786, IN THE CITY OF SANTA MONICA, COUNTY OF LOS ANGELES, STATE OF CALIFORNIA, RECORDED MAY 9, 2007 AND FILED IN BOOK 348, PAGES 11-16 OF PARCEL MAPS, IN THE OFFICIAL RECORDS OF LOS ANGELES COUNTY. Also known as 3301 Exposition Boulevard Reference Ordinance Nos. 2248 (CCS), 2249 (ccs), amendments to Contract Nos. 8396 (CCS), and 8397 (CCS).