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SR-820209-8A~- i4 fEB 9198° CA:RMM:r City Council Meeting 2-9-82 T0: FROM: SUBJECT: STAFF REPORT Mayor and City Council City Attorney Santa Monica, California Housing Incentive and Development Agreement Between Harris Toibb and the City of Santa Monica On October 27, 1981, the City Council granted Harris Toibb a hardship exemption under the Emergency Building Moratorium to proceed with a development located at 1034-1050 Fourth Street. The hardship exemption was granted subject to the condition that. Harris Toibb enter into an agreement with the City implementing the terms and conditions of the hard- ship approval. In response to this action, the accompanying housing incentive and development agreement has been negoti- ated and is now presented to the City Council for approval. Mr. Toibb's development was initially presented to the City Council as a six-story, 42 unit condominium project on a development site currently occupied by controlled rental units. As a condition of securing a removal permit from the Santa Monica Rent Control Board, Mr. Toibb's initial proposal included the development of a 10 unit apartment building on the same site and adjacent to the condominiums. In response to concerns from and direction of the City fEB 9 19 Council, the development was substantially redesigned. The housing incentive and dev~=].opment agreement contains the following principal features: Fourth Street 1. The property will be developed with a four-story 42 unit building. The building will consist of 27 condominiums on the second, third, and fourth floors and 15 rental units on the first floor. 2. The building height shall be no more than 50 feet measured three feet above the highest grade level on the property. The front yard set back shall be a minimum of 20 feet, the side yard set backs a minimum of 8 feet, and rear yard set back a minimum of 5 feet. Lot coverage shall be no more than 668. There shall be a minimum of 82 subterranean parking spaces. (The denisity incentives are obviously necessary when a six-story, 42 unit building is reduced to a four-story building with the same number of units.) 3. The 15 rental units shall consist of four two-bed- room units and eleven one-bedroom units. Eight of the units shall be affordable to low-income households and seven of the units shall be affordable to moderate income households. The units shall be provided for 40 years or the life of the pro- ject, whichever is greater. The 15 units, but not the condo- miniums, are exempted from certain specified City fees and assessments in order to contribute to the economic feasibil- ity of the project. 4. Before demolition of the existing units, an appro- -2- priate deed restriction will be recorded restricting the use of the 15 rental units as provided for in the agreement. '5. Construction must commencA within 180 days of demo- lition of the existing units. 6. The Santa Monica Rent Control Board conditions governing relocation of existing tenants have been incorpor- ated into the agreement and strengthened by requiring a mini- mum $ 300.00 moving allowance. 7. The 15-units shall be subject to the Santa Monica Rent Control Charter Amendment. Sixth Street 1. The property owned by Mr. Toibb located at 2616 Sixth Street must be developed with an eight-unit apartment building. 2. The building will contain all one-bedroom units, two of which will be affordable to low-income households and six of which will be affordable to moderate-income house- holds. (Note. The City Council's concern about two-bedroom units was addressed by providing an additional two-bedroom unit on Fourth Street.) 3. The apartment building must be made available for 40 years or the life of the project, whichever is greater. 4. Before demolition of the Fourth Street units, an appropriate deed restriction must be recorded restricing the use of the property as provided for in the agreement. 5. Construction must commenced within two years of the -3- commencement of construction of the Fourth Street property. This two year period can be extended for thF_ period of time that Mr. Toibb has not sold 85~ of the Fourth Street Condo- miniums after an initial two month sales program. (This extension recognizes any hardship that Mr. Toibb might experience if the condominiums are not promptly sold.) b. Certain specified fees and assessments are waived in order to contribute to the economic feasibility of the project. 7. The Santa Monica Rent Control Board conditions governing relocation of the existing tenants have been incorporated into the agreement and strengthened by requiring a minimum $ 300.00 moving allowance. 8. The eight-units shall be subject to the Santa Monica Rent Control Charter Amendment. As can be seen, the housing incentive and development agreement provides for a project consisting of 27 condo- miniums and 23 low and moderate income rental units. The various provisions of the agreement ensure that if Mr. Toibb proceeds with the project, the low and moderate income housing will be provided. -4- RECOMMENDATION It is respectfully recommended that the accompanying ordinance approving the housing incentive and development agreement be introduced for first reading. PREPARED BY: Robert M. Myers, City Attorney -5- CA:RMM:r City Council Meeting 2-9-82 Santa Monica, California ORDINANCE NUMBER (City Council Series) AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF SANTA MONICA APPROVING HOUSING INCENTIVE AND DEVELOPMENT AGREEMENT BETWEEN HARRIS TOIBB AND THE CITY OF SANTA MONICA THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS FOLLOWS: SECTION 1. The housing incentive and development agreement attached hereto and incorporated by reference between Harris Toibb and the City of Santa Monica, a munic- ipal corporation, is hereby approved. SECTION 2. Each and every term and condition of the housing incentive and development agreement approved in Section 1 of this ordinance shall be and is made a part of the Santa Monica Municipal Code and any appendices thereto. The City Council of the City of Santa Monica finds that the public necessity, public convenience, and general welfare require that any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this housing incentive and development agreement, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to make fully effective the provisions of this housing incentive and devel- opment•agreement. SECTION 3. Any provision of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this ordinance, to the extent of such inconsistencies and no further, is hereby repealed or modified to that extent necessary to affect the provisions of this ordinance. SECTION 4. If any section, subsection, sentence, clause, or phrase of this ordinance is for any reason held to be invalid or unconstitutional by a decision of any court of competent jurisdiction, such decision shall not affect the validity of the remaining portions of the ordinance. The City Council hereby declares that it would have passed this ordinance and each and every section, subsection, sentence, clause, or phrase not declared invalid or unconstitutional without regard to whether any portion of the ordinance would be subsequently declared invalid or unconstitutional. SECTION 5. The Mayor shall sign and the City Clerk shall attest to the passage of this ordinance. The City Clerk shall cause the same to be published once in the official newspaper within 15 days after its adoption. The ordinance shall become effective 30 days from its adoption. APPROVED AS TO FORM: ROBERT M. MYERS City Attorney -2- HOUSING INCENTIVE AND DEVELOPMENT AGREEMENT between HARRIS TOIBB and THE CITY OF SANTA MONICA, CALIFORNIA TABLE OF CONTENTS RECITALS- Page A. Parties .......................................1 B. Description of Real Property ..................1 C. Interest of Owner .............................2 D. Description of Project ........................2 E. City's Prior Proceedings ......................3 F. Development Agreements ........................3 G. Housing Incentive Agreements ..................4 H. Incentives ....................................4 I. Public Interest ...............................5 J. Council Authorization .........................5 AGREEMENT 1. The Project ...................................5 2. City Approval of Project ......................6 A. Height ....................................6 B. Yards .....................................7 C. Lot Coverage (Density) ....................7 D. Condominium Units .........................8 E. Subterranean Parking .....................13 F. Accessibility ............................13 G. No Dedications ...........................14 H. Completion ...............................14 (i) 3. Bonuses and .Incentives .......................14 4. Expedited Processing .......................17 5. Sixth Street Development .....................19 6. Events of Default ............................25 7. Procedure Upon Default .......................28 8. Changes in City Regulations ..................28 9. Hold Harmless ................................29 10. Attorneys Fees ...............................30 11. Mutual Release and Dismissal of Lawsuit ......30 12. Amendment of Agreement .......................31 13. General Provisions ...........................31 A. Waiver ...................................31 B. Binding Effect ...........................32 C. Assignment ...............................32 D. Relationship of Parties ..................32 E. Execute other Documents ..................32 F. Counterparts .............................33 G. Notices .............:....................33 14. Duration of Agreement ........................34 15. Recording of Agreement .......................34 (ii) ' CONTRACT NO. (CCS) HOUSING INCENTIVE AND _ DEVELOPMENT AGREEMENT This Development Agreement is made, entered into and is effective on this date, _, 1982, at Santa Monica, California. RECITALS This Agreement is made with reference to the following facts: A. Parties. The parties to this Agreement are: 1. The City of Santa Monica, a municipal cor- poration (hereinafter the "CITY") by and through its duly elected and serving Santa Monica City Council (hereinafter referred to as_the "COUNCIL"); and 2. Harris Toibb, a resident of the City of Santa Monica (hereinafter referred to as the "OWNER"), and his successors in interest. B. Description of Real Propert . The owner of the real property which is the subject of this .Agreement is situated in the City of Santa Monica, County ,of Los Angeles, California, commonly known as 1034-1050 4th Street, Santa Monica, California (hereinafter referred to as the "4TH STREET PROPERTY" or the "SITE"), is described as Tract No. 33579, and is more .particularly described as: Lots G, H, I and J in Block 73 of Santa Monica, as per map recorded in Sook 3, Page 80 and in Book 39, Page 45 of Miscellaneous Records of the County of Los Angeles, State of California. The SITE is located at the easterly border of the Coastal Zone within an R-4 Multiple Residential District, which permits condominium use. C. Interest of OWNER. OWNER represents that he has legal and equitable interests in the 4TH STREET PROPERTY, and that all other persons holding legal or equitable interests in the 4TH STREET PROPERTY, if any, are to be bound by this Agreement. D. Description of Pro'ect. OWNER has proposed to COUNCIL a development plan (the DEVELOPMENT PLAN) for the 4TH STREET PROPERTY, providing for the demolition and/or removal of existing structures, and the construction of a new four-story, 42-unit condominium building, of which fifteen (15) [36°s of the PROJECT) will be apartment units having rents set to be affordable to low- and moderate-income households. The improvement of the 4TH STREET PROPERTY as provided in the DEVELOPMENT PLAN is referred to in this Agreement as the "4TH STREET PROJECT", and is dQSCribed below more fully. E. CITY's Prior Proceedin s Affectin PROJECT. On or about September 18, 1978, the CITY approved and issued to OWNER Tentative Tract Map number 33579, for a six-story, 42-unit condominium building on the 4TH STREET PROPERTY. On April 9, 1981, the Santa Monica Rent Control Board granted Removal Permit Number 074R, permitting the demolition of existing structures on the 4TH STREET PROP- ERTY, in accordance with several conditions. Said proceed- ings are described in the Rent Control Board files, to which reference is made for further particulars. On October 27, 1981, the COUNCIL approved OWNER's DEVELOPMENT PLAN, and authorized the City Attorney to negotiate this Agreement, in connection with the COUNCIL granting OWNER's Claim Number M-071 [an Application for Hardship Determination, and Claim for Vested Rights and Exemption Status]. Said Council proceedings are described in the files of the COUNCIL, to which reference is made for further particulars. F. Development Agreements. CITY intends to enter into binding Development Agreements, pursuant to the provisions of State law, including Government Code Section 65864 et seq., and pursuant to the CITY's Charter. G. Housing Incentive Agreements. Government Code Sections 65915-65918 authorize the CITY to enter into binding Housing Incentive Agreements with persons having legal or equitable interest in real property, where the owner agrees to construct at least 25$ of the total units of the housing development affordable to house- holds of low- or moderate-income. Pursuant to said Code Sections, the CITY is empowered to grant OWNER incentives £or the 4TH STREET PROJECT, including but not limited to: 1. A "density bonus" by way of a density in- crease of at least 25$ over the otherwise allowable residential density under applicable zoning ordinance; 2. Exemption of the development "from any pro- vision of local ordinances which may cause an indirect increase in the cost of the housing units to be devel- oped"; and 3. The CITY may otherwise "contribute signifi- cantly to the economic feasibility of low- and moderate-income housing in the proposed housing devel- opments." H. Incentives. The CITY wishes to comply with the intent of Government Code Sections 65582 and 65583, by encouraging cooperative participation of government and the private sector in an effort to expand housing opportunities and accommodate the housing needs of all economic levels, and to assist in the ~ 3 development of adequate housing to meet the needs of low- and moderate-income households by way of "provision of regulatory concessions and incentives." I. Public Interest. The COUNCIL confirms its findings and .determinations that this AGREEMENT with OWNER is consistent with the general plan, is in the best interest of the CITY, and will promote the public peace, health and safety. J. Council Authorization. On 1982, the COUNCIL adopted Ordinance Number (CCS), approving this Agreement with OWNER, and authorized the City Manager to execute same on behalf of the CITY. AGREEMENT IN WITNESS WHEREOF, and in consideration of the performance of the mutual covenants herein contained, and delivery of each and all of the considerations hereinbelow set forth, the parties agree as follows: 1. The Project. OWNER proposes to cause the following works of improvement on the 4TH STREET PROPERTY (hereinafter referred to as the "4TH STREET PROJECT"): A. Remove from the rental market all existing rental units on the SITE, in accordance with Removal Permit No. 074R; 5 B. Demolish and/or remove all existing struc- tures on the SITE; and C. Construct a single four-story building on the SITE, complying with Tentative Tract Map No. 33579, consisting of forty-two (42) condominium units and a subterranean parking garage in the approximate config- uration of the "footprint" attached as Exhibt "A", and as is more fully described hereinbelow. 2. CITY Approval of PROJECT. Notwithstanding present, changed or new CITY Charter provisions, Codes, Ordinances, General Plans, Housing Elements, Local Coastal Plan, Zoning, Planning, Subdivision, Building Regulations and Standards, and/or other enactments (hereinafter collectively referred to as "Property Development Standards"), the CITY hereby approves the subject condominium 4TH STREET PROJECT pursuant to Tentative Tract Map No. 33579 (as it may from time to time be amended by OWNER) as follows:- A. Height. (1) The subject building shall have no more than four (4) stories; (2) The building height limit shall be fifty (50) feet, except as otherwise provided herein; (3) The fifty (50) foot height limit shall be measured from three (3) feet above the highest grade level on the SITE, up to the ceiling of the fourth floor penthouse; 6 (4) The fifty (50) foot height limit shall exclude all penthouse or roof structures fox the housing of elevators, stairways, tanks, venti- lating fans or similar equipment required to operate and maintain the building, and fire or parapet walls, mansards, skylights, steeples, roof signs, flag poles, chimneys, smoke stacks, or other similar structures and rooftop patios which may be erected above said height limit; (5) The height of subterranean garage may extend to three (3) feet above the highest grade level. B. Yards. (1) The front yard shall have a minimum depth (set back) of twenty (20) feet; (2) The rear yard shall have a minimum depth (set back) of five (5) feet, measured from the mid-line of the existing rear alleyway; (3) The northerly side yard shall have a minimum width of eight (8) feet; and (4) The southerly side yard shall have a minimum width of eight (8) feet. C. Lot Coverage (Density). The area occupied by buildings and structures may exceed fifty percent (50%) of, and shall not exceed sixty-six percent (66%) of the total lot area. The following areas not part of the dwelling units may 7 project into the front, rear and side yards, and in calculating such lot coverage, the following areas shall be excluded: (1) the subterranean garage; (2) the width up to six (6) feet of all exterior, unen- closed walkways, stairways, balconies, patios, porches, and platforms; (3) any eave, canopy or roof covering same; and (4) fireplace flues, ventilation ducts, and greenhouse windows. D. Condominium Units. (1) The Building shall contain a total of no more than forty-two (42) residential condominium units; (2) The first story shall contain no less than fifteen (15) rental units ("FIRST FLOOR UNITS"); (3) The second, third and fourth stories shall contain the remaining twenty-seven (27) units; (4) With regard to the 15 FIRST FLOOR UNITS: a. There will be four (4) two-bedroom units, and eleven (11) one-bedroom units; b. Eight (8) units will have base rents set to be affordable for low-income households, consisting of two (2) two-bedroom units and six (6) one-bedroom units; 8 c. Seven (7} units will have base rents set to be affordable for moderate- income households, consisting of two (2) two-bedroom units and five (5) one-bedroom units; d. For purposes of this Agreement: (i) Median income means the median income for the County of Los Angeles as determined by the United States Department of Housing and Urban Development, as may be adjusted or revised from time to time; (ii) Low income household means a household with an annual income of less than 80$ of median income; (iii) Moderate income household means a household with an annual income of less than-120$ of median income. (iv) A unit referred to herein is affordable if the annual rent does not exceed 25$ of annual income. e. All 15 units will not be exempt from the provisions of §1801(c} of the Rent Control Charter Amendment; A f. The 15 FIRST FLOOR UNITS shall be provided as affordable rental units for forty (40) years or the life of the 4TH STREET PROJECT, whichever is greater. g. OWNER shall maintain such records as are required by CITY to verify eligibility for housing provided hereunder. The records shall be open for inspection and copying by CITY upon five (5) days' advance notice by CITY. (5) OWNER shall record a Declaration of Restrictions (Deed Restrictions} to be recorded in the chain of title of the 4TH STREET PROPERTY, which will contain the provisions of Paragraphs 2D(1) -2D(4), inclusive. If "existing tenants" do not qualify as low-income households, and the "existing tenants" accept occupancy in the FIRST FLOOR UNITS, this condition shall be waived until such time as sufficient units are vacated by "existing tenants". Said Deed Restrictions shall be in a form approved by the City Attorney of CITY and shall be recorded prior to demolition of existing structures on the SITE. 10 (6) The following named "existing tenants" shall each have a right of first refusal to rent a FIRST FLOOR UNIT, provided such person complies with the Notice to Quit described in subparagraph D(11) below: (a) Patty Callucutt, 1034 4th Street, Santa Monica, California 90403; (b) Michael Morales, 1034-1/2 4th Street, Santa Monica, California 90403; (c) Mrs. Meeks, 1038 4th Street, Santa Monica, California 90403; (d) Joe Spano, 1048-A 4th Street, Santa Monica, California 90403; (e) Dale Miller, 1048-B 4th Street, Santa Monica, California 90403; (f) Mary Flynn Francis, 1048-C 4th Street, Santa Monica, California 90403; (g) Joan Boyd, 1048-D 4th Street, Santa Monica, California 90403; (h) Sharron Gerringer, 1050-A 4th Street, Santa Monica, California 90403; (i) Diane Glasser, 1050-C 4th Street, Santa Monica, California 90403; (j) Perry Morey, 1050-D 4th Street, Santa Monica, California 90403.. 11 The right of first refusal shall be personal _ to each such tenant, and not subject to assignment or transfer. (7) Construction of the new units will commence within one-hundred eighty (180) days of the date of demolition of all existing units on the SITE. (8) The OWNER will reimburse existing tenants a minimum of Three Hundred Dollars ($300.00) for reasonable expenses incurred in moving out of the existing units and back into the new units; (9) The OWNER shall pay to the existing tenants a sum of money equal to the difference between their present rent and a reasonable rent paid by the tenants for comparable units during the period of construction of the new units, for a period not to exceed one year; (10) As an alternative to the provisions in subparagraphs (8) and (9) above, the OWNER may pay one or more of the existing tenants a sum agree- able to each of said tenants; (11) Pursuant to Rent Control Charter Amendment §1806(1), tenants of the existing units on the SITE may not be given notice to quit the premises until all necessary permits and approvals have been obtained for demolition of the existing 12 units and construction of new units on the SITE. . This includes all permits and approvals required by the City of Santa Monica and the California Coastal Commission. Notice to quit shall be subject to the requirements of California Civil Code §1946, and the landlord shall specifically provide tenants with such notice no less than thirty (30) days prior to the date of required vacation of premises. E. Subterranean Parkinq. The 4TH STREET PROJECT shall include a subterranean parking garage: (1) There shall be a minimum of eighty-two (82) off-street parking spaces; (2) The ownership of FIRST FLOOR UNITS shall include one (1) parking space for each such unit, or more at OWNER's election; (3) All units other than the FIRST FLOOR UNITS shall include ownership of at least two (2) spaces per unit. F. Accessibility. The 4TH STREET PROJECT shall be accessible to handicapped persons. iz G. No Dedications. The OWNER shall not be required to provide, and the-PROJECT need not include or contain any reservation or dedication of land for public or private purposes except as otherwise provided in this Agreement. H. Completion. OWNER agrees to diligently prosecute to completion the construction of the 4TH STREET PROJECT. 3. Bonuses and Incentives. Pursuant to Government Code Section 65915, CITY hereby grants OWNER the following bonuses and incentives for the 4TH STREET PROJECT, notwithstanding any present, changed or new CITY Charter provisions, Codes, Ordinances,. General Plans, Specific Plans, Housing Elements, Local Coastal Plan, Zoning, Planning, Subdivision, Permits, Building Regulations and Standards, and/or other enactments ("Property Develop- ment Standards") to the contrary: A. The CITY shall not impose any new or additional requirements or conditions on the 4TH STREET PROJECT'S Final Tract Map, which are not already set forth in Tentative Tract Map No. 33579; B. The 4TH STREET PROJECT shall have up to four (4) stories, and up to fifty (50) feet in height, and as set forth in Paragraph 2A above; C. The front yard set back shall be a minimum of twenty (20) feet; the rear yard set back shall be a minimum of five (5) feet; the northerly side yard shall is have a minimum set back of eight (8) feet, and the southerly side yard shall have a minimum set back of eight (8) feet, and as set forth in Paragraph 2B above; D. The area occupied by buildings and structures on the 4TH STREET PROJECT may exceed present lot coverage standards up to and including sixty-six percent (66$) of the lot area, and as is set forth in Paragraph 2C above; E. The CITY shall exempt the 4TH STREET PROJECT from minimum parking space requirements applicable to the FIRST FLOOR UNITS, so that said units shall include ownership of no less than one (1) parking space per unit; F. The CITY shall use its best efforts to encourage financial institutions and potential lenders to provide OWNER with construction and permanent financing for the 4TH STREET PROJECT; G. The CITY agrees to expedite and streamline the processing of permit applications for the PROJECT, as set forth hereinbelow; H. The CITY shall exempt the 4TH STREET PROJECT from any and all requirements that bathrooms, laundry rooms and similar rooms be provided with natural ventilation by means of an op enable exterior opening, and in lieu thereof, a mechanical ventilating system may be provided. 15 I. The CITY shall permit all lofts and mezzanines of the top floor as two-thirds (2/3) of the floor area of the room it is located in (said "room" to include the area of adjoining bathrooms, closets, stairways and other utility areas). J. Pursuant to Government Code §65915(d), the CITY hereby exempts each and all of the FIRST FLOOR UNITS from the following provisions of local ordinance which may cause an indirect increase in the cost of the housing units to be developed; OWNER shall not. be required to pay to CITY any portion of the following assessments, fees and charges directly attributable to the FIRST FLOOR UNITS, and OWNER shall be charged only a pro-rata amount [27/42] of any such assessment, fee or charge that is not directly attributable or chargeable to the FIRST FLOOR UNITS: (1) The Condominium Permit Fee for each of the FIRST FLOOR UNITS; (2) The Recreation and Parks Assessment; (3) The Trees and Parkways Assessment; (4) The Water Construction and Connection Fee; (5) The Sewer Connection Assessment; (6) The Sewer Conection Fee per unit; (7) The Plumbing, Electrical, and Mechanical Permit Fees; lh (8) Any required fee for street or sidewalk Resurfacing Permits or Use of Public Proprty Permits; (9) Fees for filing by Tentative Tract Map, Final Tract Map, and amendments and modifications thereto; (10) Other charges similar to those set forth above, which would otherwise cause an indirect increase in the cost of the FIRST FLOOR UNITS. Nothing herein shall preclude the CITY from taking any additional action or actions to assist OWNER to construct and finance the 4TH STREET PROJECT. 4. Expedited Processing. In order to expedite and streamline the processing of permit applications for the 4TH STREET PROJECT (pursuant to Government Code §65913 et seq.), the CITY hereby agrees: A. The Director of Planning is hereby authorized and .designated to act as a central administrator for processing any and all permits required for the development; B. The Director of Planning, and the Santa Monica Planning Department shall consult with OWNER and its representatives, from time to time as necessary, and assist OWNER in making all development and permit applications; ,~ C. The Director of Planning shall cooperate with OWNER in making readily available by referral, all staff that has expertise in all areas in which permits are required from the CITY, and in providing informa- tion on all permit requirements and standards; D. The CITY agrees to consolidate hearings, whenever possible or practicable, for the purpose of minimizing the time required for OWNER to process permit applications and obtain permits necessary for the PROJECT; E. The CITY will accept for filing the Final Tract Map and/or modifications to Tentative Tract Map No. 33579; the CITY will conditionally approve such map or maps, on condition that OWNER obtain an appropriate Coastal Permit. F. The CITY will approve, conditionally approve, or disapprove any: (1) Final Tract Map, or (2) modifications thereto or (3) modifications to the Tentative Tract Map concerning the 4TH STREET PROJECT within sixty (60) days of the date on which completed applications for such have been received; and G. The CITY shall approve, conditionally approve, or disapprove all development and permit applications concerning the 4TH STREET PROJECT within sixty (60) days from the date on which each such permit application has been received. 18 H. Failure of the CITY to act upon such respec- tive maps and application within such sixty (60) day period shall be deemed an approval thereof. 5. Sixth Street Development. OWNER is also the owner of that certain real property situated in the City of Santa Monica, County of Los Angeles, California, commonly known as 2616, 2616-A and 2616-1/2 6th Street, Santa Monica, California (hereinafter referred to as the "6TH STREET PROPERTY"), and more particularly described as: Lot 22 of Block B of Vawter's 4th Street Tract, in the City of Santa Monica, as per map recorded in Book 3, Page 92 of Maps, in the office of the County Recorder of said County. Said PROPERTY is located inside the Coastal Zone within an R-4 Multiple Residential District. The 6TH STREET PROPERTY presently consists of a three (3) unit apartment building. On October 22, 1981, the Santa Monica Rent Control Board granted Removal Permit No. 080R, permitting the demolition of existing structures on the 6TH STREET PROPERTY, in accordance with several conditions. Said proceedings are described in the Rent Control Board files, to which reference is made for further particulars. As a condition to CITY's approval of the 4TH STREET PROJECT end the granting of bonuses and incentives for said PROJECT on the 4TH STREET PROPERTY, the CITY hereby requires and OWNER hereby agrees to the following terms: A. OWNER may remove from the rental market all existing rental units on the 6TH STREET PROPERTY, in accordance with Removal Permit No. 080R, and demolish and/or remove all existing structures thereon; B. OWNER shall construct, or cause to be constructed, an 8 unit apartment building on the 6TH STREET PROPERTY pursuant to the plans (attached hereto as Exhibit "B"), comprised. as follows: (1) There will be eight (8) one-bedroom units; (2) Two (2) units will have base rents set to be affordable for low-income households; (3) The remaining 6 units will have base rents set to be affordable for moderate-income households; (4) All 8 units will not be exempt from the provisions of §1801(c) of the Rent Control Charter Amendments; (5) The terms "median income", "low income", "moderate income", and "affordable" shall have the same meanings as set forth in Paragraphs 2D(4) and (5) above. ~n (6) The units shall be provided as afford- . able rental units for forty (40) years or the life of the 6TH STREET PROJECT, whichever is greater. (7) OWNER shall maintain such records as are required by CITY to verify eligibility for housing provided hereunder. The records shall be open for inspection and copying by CITY upon five (5) days' advance notice by CITY. (8) OWNER shall record a Declaration of Restrictions (Deed Restrictions) to be recorded in the claim of title of the 6TH STREET PROPERTY, which will contain the provisions of Paragraphs SB(1) - SB(7), inclusive. If existing tenants do not qualify as low-income households, and the existing tenants accept occupancy in one of said units, this condition shall be waived until such time as sufficient units are vacated by existing tenants. Said Deed Restrictions shall be in a form approved by the City Attorney of CITY and shall be recorded prior to demolition of the existing structures on the 4TH STREET PROPERTY. (9) The following named "existing tenants" shall each have a right of first refusal to rent one of the new units, provided such person complies with the Notice to Quit described in Subparagraph G below: 2i (a) Fran Shapiro, 2616 6th Street, Santa Monica, California 90403; (b) Billy Larson, 2616-A 6th Street, Santa Monica, California 90403; and (c) Mary Beth McCarthy, 2616-1/2 6th Street, Santa Monica, California 90403. The right of first refusal to rent shall be personal to each such tenant, and shall not be subject to assignment or transfer. (10) Construction of the new units will commence within one-hundred eighty (180} days of the date of the demolition of all existing units. C. Pursuant to ^vovernment Code Section 65915, CITY hereby grants to OWNER the following bonuses and incentives for the 6TH STREET PROPERTY, notwithstanding any present, changed or new CITY "Property Development Standards" to the contrary: (1) Each of the eight apartment units is and shall be exempt from a Building Permit Fee; (2) The area occupied by buildings and structures may exceed present lot coverage standards up to and including sixty-six percent (66$) of the lot area; (3) The CITY shall exempt and/or grant a variance from minimum parking space requirements, so as to permit eight (8) parking spaces (one per unit); 22 (4) The CITY shall exempt and/or grant a variance from maximum unit limits, so as to permit eight (8) one-bedroom, one-bath apartment units of approximately 635 square feet each. D. The OWNER will reimburse existing tenants a minimum of Three Hundred Dollars ($300.00) for reasonable expenses incurred in moving out of the existing units and back into the new units; E. The OWNER shall pay to the existing tenants a sum of money equal to the difference between their present rent and a reasonable rent paid by the tenants for comparable units during the period of construction of the new units, for a period not to exceed one year; F. The OWNER may, as an alternative to the provisions in subparagraphs (D) and (E) above, pay existing tenants a sum agreeable to said tenants; G. Pursuant to Rent Control Charter Amendment §1806(1) tenants of existing units on the 6TH STREET PROPERTY may not be given notice to quit the premises until all necessary permits and approvals have been obtained for demolition of the existing units and construction of new units on the 6TH STREET PROPERTY. This includes all permits and approvals required by the City of Santa Monica and the California Coastal ~~ Commission. Notice to quit shall be subject to the requirements of California Coastal Commission. Notice to~quit shall be subject to the requirements of California Civil Code §1946, and the landlord shall specifically provide tenants with such notice no less than thirty (30) days prior to the date of required vacation of the premises. H. OWNER shall be required to commence construc- tion of said 8 unit apartment building within two (2) years from the date construction commences on the 4TH STREET PROJECT. In the event OWNER defaults as to this provision, then OWNER shall forthwith quit-claim and dedicate title to the 6TH STREET PROPERTY to the CITY and shall transfer to CITY all plans for the apartment building to be built on the 6TH STREET PROPERTY. Prior to the execution of this Agreement, OWNER shall deliver to CITY a Preliminary Title Report on the 6TH STREET PROPERTY in a form satisfactory to the City Attorney of CITY. I. The CITY agrees that all necessary and appropriate variances, density bonuses, demolition and building permits, and other permits and approvals, will be promptly issued by the CITY for the above-described project on the 6TH STREET PROPERTY, as provided in Paragraph 4 herein. ~a J. The CITY will use its best efforts to exempt thfl 6TH STREET PROPERTY from any ordinance, fee or requirement that would create an indirect expense in the cost of this housing development [pursuant to Government Code §65915, and other applicable law], as set forth in Paragraph 3J above. 6. Events of Default. A. OWNER shall be in default under this Agreement upon the happening of one or both of the following events or conditions: (1) If a warranty, representation or statement made or furnished by OWNER to the CITY is false or proves to be false in any material respect when it was made; (2) OWNER has not complied with one or more of the terms or conditions of this Agreement. B. OWNER may, at :its option, and without liability, terminate this Agreement by serving written notice of termination on CITY, in the event: (1) The COUNCIL fails or refuses to approve any tentative or final subdivision map, or modifications thereto, submitted in accordance with this Agreement, for any portion of the 4TH STREET PROJECT, within sixty (60) days after such map has been submitted to such governing body; 25 (2) The CITY, through its appropriate respective departments, fails or refuses to • approve any variances, demolition permits, building permits, or other permits required for the 4TH STREET PROJECT described herein, within sixty (60) days after such respective application for permit has been submitted to the appropriate governing body; (3) The 4TH STREET PROJECT is not approved by the California Coastal Commission. (4) There are changes in the economic conditions prior to the demolition of existing units on the 4TH STREET PROPERTY, which render, in the opinion of OWNER, further development of the subject properties unprofitable to OWNER. (5) Prior to the demolition of existing units on the 4TH STREET PROJECT, OWNER is unable to secure adequate and/or reasonable financing for the development of the 4TH STREET PROJECT; C. Upon the occurrence of any material breach of this Agreement by CITY, OWNER shall give written notice thereof to the CITY, and CITY shall have thirty (30) days to cure said default. In the event such default is not timely cured, OWNER may, at its option, and without liability, terminate this Agreement by serving written notice on CITY. 26 D. The two (2) year time period for commencing construction on the 6TH STREET PROPERTY shall be excused and extended for that additional period of time equal to the time during which: (1) OWNER, after the first two months of its marketing and/or sales program, has not sold and closed escrows on at least eighty-five percent (85% or 23 units) of the 27 condominium units which are not FIRST FLOOR UNITS [it being the calculation of OWNER that his "break even" point on the 4TH STREET PROJECT will be upon the sale of all FIRST FLOOR UNITS and 85% of the remaining condominium units7; (2) OWNER is prevented, delayed or unable to proceed with the 4TH STREET PROJECT by reason of any of the following forces reasonably beyond the control of OWNER: (a) war, insurrection, riot, acts of a public enemy, theft, vandalism, accident, or casualty; (b) fire, flood, severe weather, earthquake or other acts of God; (c) governmental restriction, litiga- tion, or acts or failures to act of any governmental agency or entity. 27 (3) OWNER is prevented, delayed, or unable to proceed with the 4TH STREET PROJECT by reason of a problem in securing necessary labor, materials or tools, strikes, lockouts, delays of any contractor, subcontractor or supplier. 7. Procedure Upon Default. A. Upon the occurrence of an event of default by OWNER, CITY may declare OWNER to be in default, and may enforce or terminate this Agreement. Prior to any declaration of default, written notice must be given to OWNER of the nature of such default, and OWNER shall have thirty (30) days to cure said default; B. Upon any termination of this Agreement, the parties hereto shall execute an appropriate notice of termination and record same in the official records of Los Angeles County. 8. Changes in City Regulations. The CITY agrees that, except as otherwise provided in this Agreement, the "Property Development Standards" in force at the time of the effective date of this Agreement, shall be those rules, regulations and official policies applicable to the 4TH STREET PROJECT and the 6TH STREET PROPERTY, notwithstanding any change in Property Development Standards adopted by the CITY which would otherwise affect the 4TH STREET PROJECT or the 6TH STREET PROPERTY, or conflict with this Agreement. The parties agree the foregoing: A. Shall not apply to any changes in fire or safety standards for erection or construction o£ the subject building; and B. Shall not prevent the CITY from denying or conditionally approving any subsequent development project application by a third party, on the basis of this Agreement, or on the basis of such existing or new rules, regulations and policies. Any provisions of the Santa Monica Municipal Code or appendices thereto inconsistent with the provisions of this Agreement, to the extent of such inconsistencies and no further, are hereby repealed or modified to that extent necessary to effect the provisions of this Agreement. 9. Hold Harmless. OWNER agrees to and-shall hold the CITY, its officers, agents, employees and other representatives harmless from liability for damage or claims for damage for personal injury including death and claims for property damage which may arise from the direct or indirect opera- tions of the OWNER or those of its contractor, subcontrac- tor, agent, employee or other person acting on its behalf, which relate to the 4TH STREET PROJECT and the 6TH STREET 29 PROPERTY. OWNER agrees to and shall defend the CITY and its officers, agents, employees and representatives from actions £or damages as described above caused or alleged to have been caused by reason of OWNER's activities in connection with the 4TH STREET PROJECT or the 6TH STREET PROPERTY, regardless of whether or not the CITY prepared, supplied or approved plans or specifications or both for the 4TH STREET PROJECT or the 6TH STREET PROPERTY. 10. Attorneys' Fees. In the event OWNER is required to commence litigation or other proceedings to enforce any of the provisions of this Agreement, and OWNER is the prevailing party, in addition to such other relief as may be granted, OWNER shall be entitled to a reasonable sum as and for his attorneys' fees in such litigation which shall be determined by the Court in such litigation, or in a separate action brought for that purpose. 11. Mutual Release and Dismissal of Lawsuits. ' A. Within 30 days after the execution of this Agreement by CITY, OWNER shall cause to be filed a dismissal with prejudice in each and every lawsuit filed by OWNER in which CITY or the SANTA MONICA RENT CONTROL BOARD is named as a party. B. OWNER and the CITY each does hereby release and discharge the other, their respective heirs, executors, assigns, agents, employees, representatives ~~ and all other persons of and from all claims, demands an$ causes of action o£ every kind and nature each may now know or expect to exist either in favor or against the other by reason of any matter or issue as of the date of this Agreement. C. Each of the parties hereby waives any and all rights which each of them may have under the provisions of Section 1542 of the Civil Code of the State of California, which section provides as follows: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known to him must have materially affected his settlement with the debtor." 12. Amendment of Agreement. This Agreement may be amended or modified in whole or in part only by mutual written consent of the parties. 13. General Provisions. A. Waiver. The waiver by any party of a breach of any provision of this Ageement by any other party shall not operate or be construed as a waiver of any subsequent breach of any type. 31 B. Binding Effect. All of the terms of this Agreement shall be binding upon, and inure to the benefit of, and be enforceable by, the parties hereto and their spouses, families, heirs, executors, administrators, employees, agents, officers, directors, transferees, predecessors, successors in interest, assignors and/or assigns, and all persons claiming by or through such respective parties. C. Assignment. This Agreement shall not be severable from OWNER's interest in the 4TH STREET PROJECT. Any transfer of the 4TH STREET PROJECT shall automatically operate to transfer the benefits and burdens of this Agreement. OWNER may freely sell, transfer, exchange, encumber, or otherwise dispose of his interests in the 4TH STREET PROJECT andfor the 6TH STREET PROPERTY without the consent of the CITY. D. Relationship Of Parties. It is understood the contractual relationship between the CITY and OWNER is such that OWNER is an independent contractor, and not the agent of the CITY. E. Execute Other Documents. Each of the parties hereto specifically agrees to execute and deliver such other and further instruments, documents and things as may reasonably be required to effectuate the terms, conditions and objectives of this Agreement. ~~ F. Counterparts. This Agreement may be executed in ,two or more counterparts, each of which shall be deemed to be a duplicate original, but all of which, together, shall constitute one and the same instrument. G. Notices. Any notices to be given hereunder by either party to the other may be effected by personal delivery, in writing, or by registered or certified mail, postage prepaid, with return receipt requested. Mailed notices shall be addressed as follows: NAME ADDRESS OWNER Harris Toibb 307 21st Street Santa Monica, CA 90401 CITY OF SANTA MONICA ATTN: City Attorney City Hall 1685 Main Street Santa Monica, CA 90401 Each party hereto may change its address by giving written notice to every other party in accordance with the terms of this Paragraph. Notices delivered personally shall be deemed communicated as of the date of actual receipt; notices delivered by mail shall be deemed .communicated as of the date of the first attempted delivery thereof by the Post Office. 33 14. Duration of Agreement. This Agreement shall expire forty (40) years from the date_of COUNCIL approval. 15. Recording of Agreement. The parties hereto shall cause this Agreement, or a Memorandum thereof, to be recorded in the official records of Los Angeles County. IN WITNESS WHEREOF, this Agreement has been executed by the parties on the day and year first above written. OWNER CITY OF SANTA MONICA, a Municipal Corporation HARRIS TOIBB Attest: By ANN M. SHORE, City Clerk Approved as to Form: ROBERT M. MYERS, City Attorney, City of Santa Monica By JOHN ALSCHULER, City Manager SANTA MONICA CITY COUNCIL By RUTH YANNATTA GOLDWAY, Mayor 34 't-F `y~' F h y~=f-o it •3~-e~