MASTER DISPOSITION AND DEVELOPMENT AGREEMENT
by and between
SOUTH TAHOE REDEVELOPMENT AGENCY
THE CITY OF SOUTH LAKE TAHOE
and
AMERICAN SKIING COMPANY RESORT PROPERTIES, INC.
HEAVENLY RESORT PROPERTIES, LLC
HEAVENLY VALLEY LIMITED PARTNERSHIP
TRANS-SIERRA INVESTMENTS, INC.
and
CECIL'S MARKET, INC.
TABLE OF CONTENTS
Page
ARTICLE 1.DEFINITIONS AND EXHIBITS............................................3
1.01 Definitions.....................................................3
1.02 Exhibits........................................................10
ARTICLE 2.CONDITIONS PRECEDENT TO AGENCY ISSUANCE OF BANS AND PARKING REVENUE
BONDS.................................................................11
2.01 Conditions Precedent to Agency Performance......................11
2.02 Issuance of BANS................................................13
2.03 Conditions Precedent to the Agency Issuance of Parking Garage
Revenue Bonds...................................................13
ARTICLE 3.CONDITIONS PRECEDENT TO AGENCY ACQUISITION..........................16
3.01 Conditions Precedent to Agency Acquisition......................16
ARTICLE 4.AGENCY ACQUISITION ACTIVITIES.......................................18
4.01 Agency Offers to Purchase.......................................18
4.02 Condemnation of Properties......................................18
4.03 Acknowledgement of Agency and City Discretion...................19
4.04 Eminent Domain Actions; Orders for Possession...................19
4.05 TAUs, Sewer Units and CFA.......................................19
ARTICLE 5.AGENCY CONDITIONS PRECEDENT TO DISPOSITION OF PROPERTY TO DEVELOPER.19
5.01 Conditions Precedent to Transfer of Phase 1 Development Site to
Developers......................................................19
5.02 Conditions Precedent to Transfer of Phase 2 Development Site to
Developers......................................................21
ARTICLE 6.DEVELOPERS' CONDITIONS PRECEDENT TO TRANSFER OF DEVELOPMENT SITE....23
6.01 Conditions Precedent to Transfer of Phase 1 Property to
Developers......................................................23
6.02 Conditions Precedent to Transfer of Phase 2 Development Site to
Developers......................................................26
ARTICLE 7.DISPOSITION OF PROPERTY.............................................29
7.01 Sale of Property................................................29
7.02 Consideration...................................................29
7.03 Orders of Possession............................................30
7.04 Closing Condition...............................................30
7.05 Closing Event...................................................30
7.06 Condition of Title..............................................30
7.07 Condition of the Property.......................................31
7.08 Real Estate Commissions.........................................31
7.09 Transfer of Units of Use........................................32
ARTICLE 8.CONSTRUCTION........................................................32
8.01 Commencement of Construction....................................32
8.02 Completion of Construction......................................33
8.03 Construction Pursuant to Plans..................................33
8.04 Compliance with Applicable Law..................................33
8.05 Non-Discrimination During Construction; Equal Opportunity.......34
8.06 Preference for Local Labor......................................34
8.07 Supplies and Materials..........................................35
8.08 Certificate of Completion.......................................35
8.09 Progress Reports................................................35
8.10 Entry by the Agency.............................................35
8.11 Taxes...........................................................36
8.12 Insurance Requirements..........................................36
8.13 Hazardous Materials.............................................38
8.14 Non-Discrimination..............................................39
8.15 Mitigation Monitoring Plan......................................39
8.16 Use of Paul Kennedy Steakhouse Site.............................39
8.17 Right of Entry for Parking Garage Site..........................40
8.18 Public Art Plan.................................................40
ARTICLE 9.CONSTRUCTION OF THE PUBLIC IMPROVEMENTS.............................40
9.01 Construction of the Public Improvements.........................40
9.02 Progress Reports................................................41
9.03 Mitigation Monitoring Plan......................................41
9.04 Right to Access to Site.........................................41
9.05 Mello-Roos District.............................................41
9.06 Hazardous Materials.............................................43
ARTICLE 10.OBLIGATIONS WHICH CONTINUE THROUGH AND BEYOND THE COMPLETION OF
CONSTRUCTION.......................................................45
10.01 Maintenance....................................................45
10.02 Childcare Obligations..........................................46
10.03 Mechanics' Liens...............................................46
10.04 Developers to Indemnify Agency.................................46
10.05 Agency To Indemnify Developers.................................47
10.06 Non-Discrimination.............................................47
10.07 Mandatory Language in All Subsequent Deeds Leases and
Contracts......................................................47
10.08 Employment Opportunity.........................................48
10.09 Owner Participation............................................48
10.10 Lift Ticket Sales Within City..................................48
10.11 Marketing of Quarter Share Intervals...........................49
10.12 Compliance with Permits........................................49
10.13 EIR/EIS Reimbursement by Agency................................49
10.14 Parking Garage Operations......................................49
10.15 Continuing Disclosure..........................................49
10.16 Ice Rink Operations............................................49
10.17 Retail Operations..............................................49
10.18 Agency Use of BANS Proceeds, Parking Garage Revenue Bond Proceeds
and Mello-Roos Bond Proceeds...................................49
ARTICLE 11.ASSIGNMENTS AND TRANSFERS..........................................49
11.01 Definitions....................................................49
11.02 Purpose of Restrictions on Transfer............................50
11.03 Prohibited Transfers...........................................51
11.04 Permitted Transfers............................................51
11.05 Effectuation of Certain Permitted Transfers....................51
11.06 Other Transfers with Agency Consent............................52
ARTICLE 12.REMEDIES...........................................................52
12.01 Application of Remedies........................................52
12.02 Consensual Termination.........................................52
12.03 Effect of Consensual Termination...............................53
12.04 Agency and City Performance....................................53
12.05 Developer Performance..........................................53
12.06 Right of Reverter..............................................55
12.07 Survival.......................................................56
12.08 Modification of Terms and Conditions and Extensions of Time....56
12.09 Scope of Termination Rights....................................57
ARTICLE 13.SECURITY FINANCING AND RIGHTS OF HOLDERS...........................57
13.01 No Encumbrances Except for Development Purposes................57
13.02 Holder Not Obligated to Construct..............................57
13.03 Notice of Default and Right to Cure............................58
13.04 Failure of Holder to Complete Improvements.....................58
13.05 Right of Agency to Cure........................................59
13.06 Right of Agency to Satisfy Other Liens.........................59
13.07 Additional Mortgagee Protections...............................59
ARTICLE 14.REPRESENTATIONS AND WARRANTIES.....................................59
14.01 Representations and Warranties of Developers...................60
14.02 Representations and Warranties of Agency.......................60
ARTICLE 15.GENERAL PROVISIONS.................................................61
15.01 Notices Demands and Communications.............................61
15.02 Non-Liability of Officials Employees and Agents................63
15.03 Time of the Essence............................................63
15.04 Inspection of Books and Records................................63
15.05 Title of Parts and Sections....................................63
15.06 Applicable Law.................................................63
15.07 Severability...................................................63
15.08 Legal Actions..................................................63
15.09 Binding Upon Successors; Covenants to Run with Land............63
15.10 Parties Not Co-Venturers.......................................63
15.11 Provisions Not Merged With Grant Deed..........................63
15.12 Entire Understanding of the Parties............................64
15.13 Approvals......................................................64
15.14 Amendments.....................................................64
15.15 Force Majeure..................................................64
15.16 Estoppel Certificates..........................................64
15.17 Multiple Originals Counterparts................................64
Exhibit A.........Financial Plan
Exhibit B.........Gondola Right-of-Way Legal Description
Exhibit C.........Draft Tentative Subdivision Map
Exhibit D.........Project Executive Summary
Exhibit E.........Scope of Development
Exhibit F.........Site Plan
Exhibit G.........Schedule of Performance
Exhibit H.........Form of Grant Deed
Exhibit I.........Environmental Assessment Reports and Natural Hazard Disclosure
Exhibit J.........Motel Room Retirement Schedule
Exhibit K.........Mello-Roos Rate and Method
Exhibit L.........Sources and Uses CFA
MASTER DISPOSITION AND DEVELOPMENT AGREEMENT
This Master Disposition and Development Agreement is entered into as of
this _____ day of _________________________ 1999, by and among the South Tahoe
Redevelopment Agency, a public body, corporate and politic ("Agency"), the City
of South Lake Tahoe, a municipal corporation ("City") and American Skiing
Company Resort Properties, Inc., a Maine corporation ("ASCRP"), Heavenly Resort
Properties, LLC, a Nevada limited liability company ("Heavenly Resort
Properties"), Heavenly Valley, Limited Partnership, a Delaware limited
partnership ("Heavenly Valley"), Trans-Sierra Investments, a Nevada Corporation
("TSI"), and Cecil's Market, Inc., a California corporation ("Cecil's Market"),
(collectively, ASCRP, Heavenly Resort Properties, Heavenly Valley, TSI and
Cecil's Market, Inc. shall be referred to as the "Developers").
RECITALS
(a) All initially capitalized terms used and not defined in this Agreement
shall have the meaning ascribed to them in Article 1.
(b) The Agency is responsible for the implementation of the Redevelopment
Plan for the South Lake Tahoe Redevelopment Project No. 1 adopted by
the City Council on June 28, 1988 pursuant to ordinance number 746, as
amended by ordinance number 854 adopted by the City Council on December
6, 1994 and as further amended by ordinance number 905 adopted by the
City Council on July 20, 1999.
(c) The Redevelopment Plan calls for the development of visitor serving
facilities on the Development Site, including the development of
certain infrastructure improvements necessary for the development of
the Development Site.
(d) The Agency and the Developers have entered into a Memorandum of
Understanding dated November, 1991 whereby the Agency and the
Developers agreed in good faith to negotiate the terms and conditions
of Disposition and Development Agreement providing for the development
of the Development Site in a manner consistent with the Redevelopment
Plan.
(e) The Developers and the Agency have proposed the development on the
Development Site of the Project. The Project will be developed in two
phases in accordance with this Agreement. The portions of Phase 1 to be
developed by the Developers will consist of the Grand Summit Hotel and
the Grand Summit Resort Hotel Annex to be developed by Heavenly Resort
Properties; the Gondola and Gondola Park to be developed by Heavenly
Valley, a public ice rink to be developed by TSI, and a public parking
structure, the Park Avenue detention basin, the improvement of Van
Sickle Street to a public street, the realignment of Park Avenue
including the relocation of all utilities and the construction of
streetscape therein, and the construction of a right turn lane between
Pioneer Trail and Park Avenue all of which are to be developed by the
Agency and the City. Phase 2 will consist of the development of a
quarter-share condominium hotel resort development at the Lake Tahoe
Inn site to be developed by ASCRP, Cecil's Market to be developed by
Cecil's Market, Inc. and the construction of the Intermodal Transit
Facility, and appropriate streetscape all of which will be developed by
the Agency and the City. As part of the Grand Summit Hotel, certain
visitor serving amenities will be developed including a cinema and
retail space. The Agency has received approval from the California
Transportation Commission for the receipt of Proposition 116 funds for
the development of the Intermodal Transit Center.
(f) The City of South Lake Tahoe City Council has certified the EIR/EIS for
the Project on June 25, 1996 and issued Special Use Permit NO. 96-49.
(g) The Tahoe Regional Planning Agency certified the EIR/EIS as complete
and adequate and issued its permit for the Project.
(h) Tahoe Regional Planning Agency has prepared an Environmental Assessment
for the Gondola, which Environmental Assessment has been accepted by
TRPA and TRPA has issued its permit for the Gondola.
(i) The City and the Agency have prepared an Addendum to the EIR/EIS to
reflect insubstantial changes to the Project since certification of the
EIR/EIS. The EIR/EIS with the Addendum have served as the Agency's
environmental documentation pursuant to the California Environmental
Quality Act ("CEQA") for consideration and approval of this Agreement
and the development of the Project contemplated herein. The physical
development contemplated by this Agreement is within the scope of the
program evaluated in the EIR/EIS and none of the events requiring a
subsequent or supplemental EIR pursuant to CEQA have occurred with
respect to the EIR/EIS and the Project contemplated by this Agreement.
(j) The Agency selected the Developers to develop the Project based on the
Developers' experience and qualifications and in accordance with the
Agency Rule for Owner Participation. The Agency has determined that the
Developers have the necessary experience, skill and ability to carry
out the commitments contained in this Agreement.
(k) Heavenly Resort Properties has applied to the California Department of
Real Estate for a preliminary public report approving acceptance of
reservations to purchase quarter-share interest in the Grand Summit
Hotel, and pursuant to this preliminary public report, Heavenly Resort
Properties has begun accepting deposits for reservations to purchase
quarter-share interests in the Grand Summit Hotel. Heavenly Resort
Properties acknowledges that the acceptance of reservations to purchase
in the Grand Summit Hotel is being done solely by Heavenly Resort
Properties and the Agency has not approved or consented to the presale
of units in the Grand Summit Hotel and the presale of units in the
Grand Summit Hotel shall in no way obligate the Agency to acquire any
property required by the Developers for the development of the Grand
Summit Hotel.
NOW, THEREFORE, in consideration of the covenants and conditions
contained herein, the Agency and the Developers hereby agree as follows:
ARTICLE 1. DEFINITIONS AND EXHIBITS
Definitions. When used in this Agreement, the following terms shall
have the meanings set forth below:
" Agency" means the South Tahoe Redevelopment Agency, a public body,
corporate and politic.
"Agreement" means this Master Disposition and Development Agreement.
(a)"Approved Plans" means the approved elevations, plans and sections
of the project, dated September 15, 1996, as amended from time to time.
(d) "ASC Affiliates" means American Skiing Company, a _______________
Corporation and any affiliate or subsidiary of American Skiing Company that is
now or at some time in the future becomes a guarantor of those certain Series A
and Series B 12% Senior Subordinated Notes Due 2006 issued by American Skiing
Company.
(b)"Association" means that certain Quarter Ownership owners
association to be formed with respect to the Grand Summit Hotel component of the
Park Avenue Project.
"Bankruptcy/Dissolution Event" means any of the following events:
(1) Any Developer shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
the Developer or of all or a substantial part of the property of the Developer,
(ii) commence a voluntary case under the Bankruptcy Code (as now or hereafter in
effect), or (iii) file a petition with respect to itself seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts;
(2) A proceeding or case shall be commenced without the application or
consent of the Developers as the case may be, in any court of competent
jurisdiction, seeking the liquidation, reorganization, dissolution, winding-up
or the composition or adjustment of debts of the Developer, (ii) the appointment
of a trustee, receiver, custodian or liquidator of the Developer or of all or
any substantial part of the assets of the Developer, or (iii) similar relief in
respect of the Developer under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts; provided,
however, that it shall not be a Bankruptcy/Dissolution Event under this
subparagraph if the case or proceeding is dismissed by an order of a court of
competent jurisdiction filed within 60 days of the commencement of the case or
proceeding; provided further that it shall not be a Bankruptcy/Dissolution Event
under this subparagraph if the appointment of a trustee, receiver, custodian or
liquidator shall be vacated by the filing of an order of a court of competent
jurisdiction no later than 60 days after such appointment.
For the purposes of this Agreement, a Bankruptcy/Dissolution Event
shall be deemed dismissed only if (i) the petition is dismissed by order of a
court of competent jurisdiction and no further rights exist from such order, and
(ii) the Developer or Developers, as the case may be, notifies the Agency that
such a dismissal has occurred.
(g) "BANS" means those certain Series A Bond Anticipation Notes
described in the financial plan to be issued by STJPFA, the proceeds of which
are to be used in whole or in part to finance certain Phase 1 and Phase 2
Development site acquisition costs, and the Phase 1 and Phase 2 Public
Improvements.
(h) "BANS Proceeds" means the proceeds (net of closing costs and fees
and amounts required to fund a reserve and a capitalized interest account) from
the sale of the BANS.
(i) "CEQA" means the California Environmental Quality Act
(j) "CFA" means square footage of improvements previously used as
commercial real estate which is allocated to the Project and new square footage
allocated to the Project by the Community Plan and the Special Projects
allocation awarded by TRPA pursuant to Chapter 33 of TRPA's Code of Ordinances
and commercial square footage transferred to the Project by TSI.
(k) "City" means the City of South Lake Tahoe, a municipal corporation.
(l)"Close of Escrow" is the date Agency conveys the land acquired by
Agency to the Developers for each phase of the Project.
(m)"Community Plan" means that certain Stateline/Ski Run Community Plan
adopted by TRPA on March 23, 1994, and by the City on May 3, 1994.
(n) "Developers" means each of American Skiing Company Resort
Properties, a Maine Corporation, Heavenly Resort Properties, LLC, a Nevada
limited liability company, Heavenly Valley Limited Partnership, a Delaware
limited partnership, Trans-Sierra Investments, a Nevada corporation, and Cecil's
Market Inc., a California corporation.
(o) "Development Site" means the 17 acres bounded by Embassy Suites
Hotel to the north, Van Sickle Road to the east, Park Avenue to the south, and
Highway 50 to the west.
(p) "Draft Tentative Subdivision Plan" means that August 19, 1999,
preliminary subdivision plan prepared by Turner and Associates, designating the
following preliminary parcels:
Project Component Parcel No.
Cecil's Market 1
Intermodal Transit Center 2, 12
Lake Tahoe Inn 4
Grand Summit Hotel 5
Ice Rink 6
Cinema 7
Public Parking Structure 10
Grand Summit Annex 8, 9
Public Circulation Parcels 3, 12
Gondola Park 13
Cresent V 14
The Draft Tentative Subdivision Map will be amended to provide that
Parcel No. 4 will extend underground under Parcel 2 and that Parcel 2 will only
be a surface parcel, and to provide that the loading dock area now included in
Parcel 10 will be included in Parcel 9.
(q) "Drainage Basin Property" means that property upon which the Agency
intends to construct, or cause to be constructed, the Drainage Basins.
(r) "Drainage Basins" means those certain drainage basins to be
constructed adjacent to Park Avenue, upon land currently occupied by the
Stateline Lodge, Park Avenue Motel, La Bella Motel, Meadowood Lodge and a
residential four-plex.
(s) "EIR/EIS" means that certain EIR/EIS prepared for the Project and
certified by the City on June 25, 1996, and approved by the TRPA on June 26,
1996
(t) "Escrow" means the escrow to be established with the Escrow Holder
for the conveyance of the Phase 1 and Phase 2 Development Sites to the
Developers.
(u) "Escrow Holder" means First American Title Company.
(v) "Excess Revenues" means any TOT or tax increment revenues in excess
of those projected in the Financial Plan which are received by Agency from the
Project and which the Agency does not require to make debt service payments on
any bonds or BANS issued by the Agency in accordance with the Agreement or prior
to the date of this Agreement; and is not required to fund the Agency's
obligations pursuant to this Agreement, all as further described in the
Financial Plan.
(w) "Final Construction Plans" means those drawings and other documents
that fix and describe the size and character of the project as to the
architectural, structural, mechanical and electrical systems, materials and
interior and exterior finishes.
(x) "Financial Plan" means the Financial Plan attached hereto as
Exhibit A.
(y) "General Contractor" means the general contractor or general
contractors selected by the Developers to construct the Project.
(z) "Gondola Right-of-Way" means a sixty-foot right-of-way commencing
at the Gondola base station and terminating approximately 13,500 feet to the
southeast, as generally described in Exhibit B, and shall include any easements
necessary for access to the gondola and rights of entry or temporary
construction easements necessary to facilitate the construction of the Gondola.
(aa) "Grand Summit Annex" means that portion of the Grant Summit Resort
Hotel and commercial space adjacent to the Parking Garage, including 38,000
square feet of CFA as more particularly described in the Approved Plans.
"Grand Summit Hotel" means the quarter ownership hotel to be
constructed by Heavenly Resort Properties. The Grand Summit Hotel site was
previously known as the Park Plaza Resort. The Grand Summit Hotel site includes
approximately 72,000 square feet of CFA.
(cc) "Holder" means the holder of any mortgage, deed of trust or other
security instrument approved by the Agency pursuant to Section 2.01(f).
(dd) "Intermodal Transit Facility" means the 4,610 square foot transit
facility to be developed by the Agency using Proposition 116 funds.
(ee) "Lahontan" means the California Regional Water Quality Control
BoardLahontan Region.
(ff) "Lake Tahoe Inn Site" means the property located at 4104 Lake
Tahoe Boulevard, South Lake Tahoe, California. -------------------
(gg) "Land Coverage Square Footage" means impervious coverage of land
as verified by TRPA.
(hh) "Lock-Off Unit" means that portion of a Quarter Ownership Unit
comprising a 1-bedroom/1-bathroom configuration with separate entry directly
from the interior corridor and with one connecting door to the primary unit
portion of a Quarter Ownership Unit.
(ii) "Mello-Roos Bond Proceeds" means the proceeds from the sale of the
Mello-Roos Bonds (net of closing costs and fees and amounts required to fund a
reserve and a capitalized interest account) which are to be sold as contemplated
under the Financial Plan and the Mello-Roos Rate and Method.
(jj) "Mello-Roos Bonds" means those bonds to be issued by the Agency to
be supported by the Mello-Roos Special Tax as set forth in the Financial Plan
and the Mello-Roos Rate and Method.
(kk) "Mello-Roos Special Tax" means an annual Mello-Roos special tax
which property owners within the Project shall be obligated to pay on the terms
and for the uses set forth in the Financial Plan and the Mello-Roos Rate and
Method.
(ll) "Motel Room Retirement Schedule" means the schedule of retirement
of TAUs, residential units and sewer units to be transferred in each Phase of
the Development as property is acquired by the Agency as set forth in Exhibit J.
(mm) "Parcel Map" means that certain parcel map to be prepared by the
Developers and recorded in the official records of El Dorado County and which,
upon recordation, among other things will merge and reconfigure the Development
Site.
(nn) "Parking Garage" means the 521 space parking garage to be
constructed pursuant to Section 2.03 by the Agency or the Developers as part of
Phase 1.
(oo) "Parking Garage Revenue Bonds" means the revenue bonds to be
issued by or caused to be issued by the Agency in an amount sufficient to pay
the costs to construct the Parking Garage.
(pp) "Parking Garage Revenue Bond Proceeds" means the proceeds of the
Parking Garage Revenue Bonds (net of closing costs and fees and amounts required
to fund a reserve and a capitalized interest account).
(qq) "Parking Management Agreement" means the agreement to be entered
into by and among the Agency, the City, ASCRP, Heavenly Resort Properties,
Heavenly Valley, TSI and Tahoe Crescent Partner governing the management and
operations of parking in and around the Development Site. The Parking Management
Agreement will govern management and maintenance of the parking facilities,
including restrictions on parking, if any.
(rr) "Paul Kennedy Steakhouse Site" means that certain property
located at 4118 Lake Tahoe Boulevard, South Lake Tahoe, California.
(ss) "Permit Conditions" means those certain conditions to the approval
of the Project set forth in the Use Permit and the Project Permit.
(tt) "Phase" means a certain phase of development of the Project (which
is currently contemplated to be developed in two phases).
(uu)"Phase 1" means the Phase 1 Public Improvements, the Parking
Garage, construction of the Gondola and Gondola park, the Grand Summit Hotel,
including retail space, and the Grand Summit Annex, including the multi-plex
cinema and the ice rink.
(vv) "Phase 1 Development Site" means the land to be assembled by
Agency and conveyed to Developers pursuant to Section 7.01 for construction of
the Phase 1 Project components as indicated in Exhibit J.
(ww) "Phase 1 Public Improvements" means the portions of the Project to
be constructed by the Agency and the City as part of Phase 1, which include the
realignment of Park Avenue and the relocation of utilities located under Park
Avenue, the construction of a right turn lane between Pioneer Trail and Park
Avenue, the reconstruction of Van Sickle Avenue, the Drainage Basins,
improvements to Fern Avenue to create a cul-de-sac, and appropriate streetscape
improvements to serve Phase 1.
(xx) "Phase 2" means the Project elements to be constructed subsequent
to the construction of Phase 1. These components consist of the Phase 2 Public
Improvements, Cecil's Market, and the Lake Tahoe Inn.
(yy) "Phase 2 Development Site" means the land to be assembled by
Agency and conveyed to Developers pursuant to Section 7.01 for construction of
the Phase 2 Project components as indicated in Exhibit J.
(zz) "Phase 2 Public Improvements" means the portions of the Project to
be constructed by the Agency and the City as part of Phase 2, which include the
Intermodal Transit Center, the SEZ Restoration and Transit Lane, and appropriate
streetscape improvements.
(aaa) "Plans and Specifications" means all plans and specifications for
the Project submitted by the Developers and approved by the City and/or TRPA, as
applicable.
(bbb) "Plaza Maintenance Agreement" means the agreement to be entered
into by and among the Agency, the City, TSI, ASCRP, Heavenly Resort Properties
and Heavenly Valley, Cecil's Market, Inc., governing the operation, maintenance,
security, and uses, including the type of vendors allowed in the public plazas
located on the Development Site.
(ccc) "Project" means that certain project to be developed as generally
described in the Executive Summary attached hereto as Exhibit D.
(ddd) "Project Documents" means the TRPA Code of Ordinances (including,
but not limited to, Amended Chapter 20 and Amended Chapter 22 thereof), the
EIR/EIS, the Community Plan, the 1996 EIR/EIS certified for the Project, the
Project Permit, the Use Permit and any other document affecting the development
of the Project which contains conditions to be fulfilled by the Developers, the
Agency or the City prior to the construction, occupancy or operation of the
Project imposed by the City, TRPA, Lahontan, STPUD, or other governmental
agency.
(eee) "Project Permit" means that certain Permit for the Project
granted by TRPA in November, 1996, and reissued on August 25, 1999.
(ffff) "Public Improvements" means, collectively, the Phase 1 Public
Improvements and the Phase 2 Public Improvements.
(gggg) "Quarter Owners" means the owners of the Quarter Ownership
Units.
(hhhh) "Quarter Ownership Unit" means an undivided one-quarter
ownership interest in a residential condominium unit within the Grand Summit
Hotel and/or the Lake Tahoe Inn Site.
(iii) "Reasonable Discretion" means the discretion of the Developers or
the Agency exercised in good faith utilizing those standards which would be
applied by the Developers or the Agency using prudent business practices under a
same or similar circumstance.
(jjj) "Redevelopment Plan Area" means the linear district stretching
along Lake Tahoe Boulevard between Ski Run Boulevard and the California/Nevada
state line in the City of South Lake Tahoe, and more particularly described in
Figure 1 of the Redevelopment Plan.
(kkk) "Regional Plan" means the TRPA Regional Plan for the Lake Tahoe
Basin (which consists of (i) The Goals and Policies (1986); (ii) The Code of
Ordinances (1987); (iii) The Plan Area Statements (1987); and (iv) The Revised
Environmental Thresholds (1991)).
(lll) "Residential Units" means those residential units which are to be
transferred to the Developers in place of TAUs under the terms and conditions of
this Agreement.
(mmm) "Scope of Development" means the list of materials for and colors
of the exterior finishes (as referenced on the color board contained in the
Scope of Development) of the Project (which are consistent with the Approved
Plans), which list has been accepted and approved by the Agency and the City. A
copy of such list is attached hereto as Exhibit E.
(nnn) "Schedule of Performance" means the schedule for the performance
by the parties of the actions required to take place pursuant to this Agreement
attached as Exhibit G.
(ooo) "Sewer Units" means the sewer units to be acquired by the Agency
as part of the acquisition of the Development Site and the Drainage Basin sites
and transferred to the Developers.
(ppp) "Site Plan" means the site plan for the Project, a copy of which
is attached hereto as Exhibit F.
(qqq) "Split Use" means the use of any multi-bedroom unit in the
Project Area as two or more separate units with two or more separate keys
issued.
(rrr) "State" means the State of California.
(sss) "STJPFA" means the South Tahoe Joint Powers Financing Authority.
(ttt) "STPUD" means the South Tahoe Public Utility District.
(uuu) "Tahoe Crescent Partners" means the Tahoe Crescent Partners
Limited Partnership, beneficial owner of the 17-acre Crescent V Shopping Center
site, a component of the Project. Tahoe Crescent Partners is not a party to this
Master Disposition and Development Agreement.
(vvv) "TAU" means Tourist Accommodation Units which must be retired by
the Agency in accordance with terms and conditions of this Agreement and the
Project Documents.
(www) "TCP Parcel" means the 17-acre parcel of land the Crescent V
Shopping Center is located upon.
(xxx) "TOT" means the City's Transient Occupancy Tax, which, for the
privilege of occupancy in any transient lodging facility within the City, each
transient is subject to and which consists of twelve percent (12%) of rent
charged on all newly constructed visitor accommodations within any redevelopment
project area and those existing properties within any redevelopment project area
which undergo substantial renovation, or ten percent (10%) of the rent charged
on all other transient lodging facilities within the City.
(yyy) "TRPA" means the Tahoe Regional Planning Agency.
(zzz) "TRPA Code of Ordinances" means the Tahoe Regional Planning
Agency Code of Ordinances (which is a component of the Regional Plan).
(aaaa) "TRPA Governing Board" means the Governing Board of the TRPA.
(bbbb) "Use Permit" means that certain Use Permit of the Project
previously issued by the City, SU 96-49.
Any term not defined in the body of this Agreement shall have the
meaning set forth in the Financial Plan.
Exhibits. The following exhibits are attached to and incorporated into
this Agreement:
Exhibit A Financial Plan
Exhibit B Gondola Right-of-Way Description
Exhibit C Draft Tentative Subdivision Map
Exhibit D Project Executive Summary
Exhibit E Scope of Development
Exhibit F Site Plan
Exhibit G Schedule of Performance
Exhibit H Form of Grant Deed
Exhibit I Environmental Assessment Reports
and Natural Hazard Disclosure
Exhibit J Motel Room Retirement Schedule
Exhibit K Mello-Roos Rate and Method
Exhibit L Sources and Uses of Commercial Floor Area
ARTICLE 2. CONDITIONS PRECEDENT TO AGENCY ISSUANCE
OF BANS AND PARKING REVENUE BONDS
2.01 Conditions Precedent to Agency Performance. As conditions
precedent to the Agency's obligation to cause the issuance of the BANS, the
conditions set forth in this Section 2.01 must first be met or waived by the
Agency by the times specified in the Schedule of Performance or such other date
as may be agreed upon by the Parties.
(a) No Default. There exists no Developer Event of Default as defined
in Section 12.05.
(b) Letter of Credit. ASCRP shall cause to be delivered a letter of
credit at least five days prior to the sale of the BANS in a form and in an
amount of Five Million Dollars ($5,000,000) meeting the requirements set forth
below, or such other form of security satisfactory to the Agency in its sole
discretion.
The letter of credit must meet the following minimum requirements:
(1) The letter of credit shall be from a nationally recognized bank,
savings and loan association, investment bank, retirement fund, insurance
company, or other institutional lender with long-term debt rating of A or better
from Standard and Poors.
(2) The letter of credit shall be irrevocable.
(3) The letter of credit shall provide that the Agency may draw upon
the letter of credit to pay costs associated with the acquisition of the Phase 1
Development Site, in the event Heavenly Resort Properties fails to deliver to
the Agency performance and payments bonds for the construction of the Grand
Summit Hotel and fully executed construction contracts for the Grand Summit
Hotel on or before April 28, 2000. In the event Heavenly Resort Properties
delivers payment and performance bonds and fully executed construction contracts
for the Grand Summit Hotel on or before April 28, 2000 and at the time of such
delivery, the amount of the Letter of Credit may be reduced to Three Hundred
Thousand Dollars ($300,000). The $300,000 Letter of Credit may be drawn upon by
the Agency to pay Development Site acquisition costs, maintenance and holding
costs associated with the Agency's ownership of the Phase 2 Development Site,
lost tax revenues to the City and the Agency resulting from the removal from the
Development Site of the improvements currently on the Development Site and the
payment of interest on the BANS in the event ASCRP fails to perform any
conditions of this Agreement. The letter of credit may be released completely at
such time as Performance and Payment Bonds are posted for the full amount of the
construction contract for Phase 2. In the event the Agency draws on the letter
of credit because Heavenly Resort Properties fails to deliver a performance and
payment bond on or before April 28, 2000 but Heavenly Resort Properties delivers
a performance and payment bond on or before September 15, 2000, the Agency shall
reimburse Heavenly Resort Properties, or the party posting the letter of credit,
the amount drawn down on the letter of credit at the time the Agency conveys the
Phase 1 Development Site to the Developers. In the event Heavenly Resort
Properties does not deliver performance and payment bonds on or before September
15, 2000, the Agency shall have no obligation to repay any funds drawn on the
letter of credit to the party posting the letter of credit and this Agreement
shall terminate with respect to Heavenly Resort Properties pursuant to Section
12.05 and the Agency shall be entitled to any remedies pursuant to Section
12.05.
(c) Approval of Bonds. The City, the Agency and the STJPFA have taken
the necessary action to approve the issuance of the BANS.
(d) Bond Counsel Opinion. The STJPFA has received a bond
counsel opinion opining to the tax-exempt nature of the BANS given the intended
use of the proceeds, in a form and substance satisfactory to the STJPFA in its
sole discretion.
(e) Other Requirements. The Developers, the Agency, the City and the
STJPFA have met all other legal requirements for the issuance of the BANS and
the use of proceeds to maintain the tax-exempt nature of the bonds.
(f) Evidence of Financing. Heavenly Resort Properties, Heavenly Valley,
and TSI shall jointly present evidence in a form reasonably satisfactory to the
Agency that Heavenly Resort Properties, Heavenly Valley, and TSI have financial
commitments and equity sufficient to fund the portions of the Project for which
Heavenly Resort Properties, Heavenly Valley, and TSI are responsible. The Agency
shall either approve or disapprove Heavenly Resort Properties', Heavenly
Valley's, and TSI's evidence of commitment of sufficient funds within ten (10)
days of receipt of such evidence; provided, however, if Heavenly Resort
Properties, Heavenly Valley, and TSI present to the Agency evidence of
sufficient equity or firm commitments for financing from reputable lenders with
only such conditions to funding as are typical for the funding source and are
commercially reasonable in amounts at least equal to the estimated total cost of
construction for each Phase of the Development, the Agency shall approve
Heavenly Resort Properties', Heavenly Valley's, and TSI's evidence of financing.
If the Agency disapproves Heavenly Resort Properties', Heavenly Valley's, or
TSI's evidence of funds, then Heavenly Resort Properties, Heavenly Valley, or
TSI, as applicable, shall have fifteen (15) days to submit revised evidence. The
periods for submission of evidence, review and approval or disapproval shall
continue to apply until evidence of financing has been approved by the Agency
for all portions of the Project in each Phase; however, evidence of financing
must be approved by the Agency no later than forty-five (45) days following
execution of this Agreement, or this Agreement may be terminated by either Party
pursuant to Section 12.02.
(g) Contract to Purchase Gondola Machinery. Heavenly Valley shall
provide the Agency with the opportunity to review evidence of its commitment to
purchase Gondola machinery, cabins, and lift towers necessary to construct the
Gondola portion of the Project. Such evidence shall take the form of a fully
executed purchase contract.
(h) Representation and Warranties. The representations and warranties
of the Developers as set forth in Section 14.01 of this Agreement remain true
and correct.
(i) No Litigation Concerning DDA. There is no existing pending
litigation, suit, action or proceeding before any court or administrative agency
affecting the Developers or any of them or the Development Site that would, if
adversely determined, adversely affect the Developers or the Development Site or
the Developers' ability to perform their obligations under this Agreement or to
develop and operate the Project.
(j) No Litigation Concerning Bonds. There is no action existing or
pending or threatened litigation, suit, action or proceeding before any court or
administrative agency affecting the BANS or the STJPFA's ability to issue the
BANS.
(k) Phase 1 Site Acquisition. At least five days prior to the sale of
the BANS the Agency shall have executed purchase and sale agreements for
portions of the Phase 1 Development Site which have a total purchase price of at
least Five Million Dollars ($5,000,000).
(l) Approval of Disbursement Plan. The Developers and the Agency have
agreed on the disbursement plan for the disbursement and use of the BANS
Proceeds and Mello-Roos Bond Proceeds.
(m) No Bankruptcy/Dissolution Event. No Bankruptcy/Dissolution Event
shall have occurred with respect to any of the Developers or an ASC Affiliate.
(n) Execution of the DDA. The Agency shall have received from each of
the Developers executed copies of the DDA by no later than October 15, 1999.
Issuance of BANS. Upon satisfaction of the conditions set forth in
Section 2.01, the Agency and the City shall cause the STJPFA to issue the BANS
in the amounts set forth in the Financial Plan in accordance with the Schedule
of Performance.
Conditions Precedent to the Agency Issuance of Parking Garage Revenue
Bonds. As conditions precedent to the Agency's obligations to cause the issuance
of the Parking Garage Revenue Bonds, the conditions set forth in this Section
2.03 must first be met or waived by the Agency by the times specified in the
Schedule of Performance or such other dates as may be agreed upon by the
Parties.
(a) Retail Space Under Construction. The Grand Summit and the retail
space to be constructed as part of the Grand Summit Resort shall be under
construction and proceeding in accordance with the Schedule of Performance.
(b) Parking Study. The Agency shall have received and approved a
Parking Study which shows that projected net revenues of the Parking Garage
exceed projected maximum annual debt services by a margin of at least 50%.
(c) Default. There exists no Developer Event of Default as defined in
Section 12.05.
(d) Parking Rate Schedule. The City shall have approved a Parking Rate
Schedule which is acceptable to the Developers.
(e) Approval of Bonds. The City, the Agency and the STJPFA have taken
the necessary action to approve the issuance of the Parking Garage Revenue
Bonds.
(f) Bond Counsel Opinion. The STJPFA has received a bond counsel
opinion opining to the tax-exempt nature of the Parking Garage Revenue Bonds
given the intended use of the proceeds, in a form and substance satisfactory to
the STJPFA in its sole discretion.
(g) Other Requirements. The Developers, the Agency, the City and the
STJPFA have met all other legal requirements for the issuance of the Parking
Garage Revenue Bonds and the use of proceeds to maintain the tax-exempt nature
of the bonds.
(h) Representation and Warranties. The representations and warranties
of the Developers as set forth in Section 14.01 of this Agreement remain true
and correct.
(i) No Litigation Concerning DDA. There is no existing pending
litigation, suit, action or proceeding before any court or administrative agency
affecting the Developers or any of them or the Development Site that would, if
adversely determined, adversely affect the Developers or the Development Site or
the Developers' ability to perform their obligations under this Agreement or to
develop and operate the Project.
(j) No Litigation Concerning Bonds. There is no action existing or
pending or threatened litigation, suit, action or proceeding before any court or
administrative agency affecting the Parking Revenue Bonds or the STJPFA's
ability to issue the Parking Revenue Bonds.
(k) No Bankruptcy/Dissolution Event. No Bankruptcy/Dissolution Event
shall have occurred with respect to any of the Developers or ASC Affiliate.
In the event any of the conditions precedent set forth in this Section
2.03 are not met and the Agency is unable to cause the issuance of the Parking
Garage Revenue Bonds, the Agency shall offer to the Developers the right to buy
the Parking Garage Site for development of the Parking Garage. In the event the
Developers elect to acquire the Parking Garage Site pursuant to this Section
2.03, Developers shall pay to the Agency the reuse value of the Parking Garage
Site assuming its development as a parking garage and the development of the
Project. The Agency shall only transfer the Parking Garage Site to the
Developers if the Developers demonstrate to the Agency's reasonable satisfaction
that they are prepared to construct the Parking Garage and they have sufficient
funds available to construct the Parking Garage. If the Developers do not elect
to buy the Parking Garage Site within twelve (12) months of the Agency offering
it to the Developers, the Agency shall have the option to retain the Parking
Garage Site and develop it with the Parking Garage; provided, however, the
Agency and the City shall not be required to obtain the Developers' approval of
the Parking Rate Schedule.
ARTICLE 3. CONDITIONS PRECEDENT
TO AGENCY ACQUISITION
3.01. Conditions Precedent to Agency Acquisition. The following
conditions shall be required to be complete prior to the Agency acquiring the
Phase 1 Development Site and the Phase 2 Development Site:
(a) Sale of Bonds. The Agency shall have sold the BANS and received
BANS Proceeds as projected in the Financial Plan.
(b)Agency Appraisals. Within the time specified in the Schedule of
Performance, the Agency shall cause to be completed an appraisal for each of the
properties in the Phase 1 Development Site and the Phase 2 Development Site to
be acquired by the Agency, including any goodwill and fixtures and equipment
appraisals, if required in the judgement of the Agency.
(c) Financial Plan. Attached as Exhibit A to this Agreement is a
Financial Plan which sets forth a general cost breakdown for the construction of
the Project, including the portions to be developed by the Agency, a sources and
uses for all funds to be expended on costs associated with the development of
the Project and a schedule of uses for the BANS Proceeds. Execution of this
Agreement by the Developers and the Agency shall be deemed approved by all
parties of the Financial Plan. Neither party may amend the Financial Plan
without the consent of the other party in writing. Subject to the terms of this
Agreement, each party shall be responsible for ensuring the completion of those
activities necessary for the implementation of the Financial Plan set forth in
the Financial Plan as an obligation of any Party.
(d) Lake Tahoe Inn Development Site. In addition to the above
conditions precedent to the Agency acquisition of the Phase 2 Property, ASCRP
shall provide to the Agency, at least ninety (90) days prior to the date on
which the Developer gives the Agency a notice of intent to construct Phase 2
pursuant to Section 3.01(e), a development plan for the Lake Tahoe Inn Site
which at a minimum shall provide the number of tourist accommodation units
projected to be constructed on the Lake Tahoe Inn Site, the type of TAUs to be
constructed, the amount of meeting space included in the development, the
operator of the resort and financial information on the rental rates for the
TAUs, the sales prices for any multiple ownership units, and such other
information as is necessary for the Agency to determine the revenue generation
capacity of the proposed development. The Agency shall approve or disapprove the
development plan for the Lake Tahoe Inn within thirty (30) days of receipt of
the development plan. The Agency shall approve the development plan if the
development plan provides for the development of 325 units to be sold as quarter
share interests, and the financial information presented by ASCRP, or at the
Agency's discretion, financial information and projections generated by the
Agency's consultants, demonstrate that the revenue generating capacity of the
development plan is equal to the Phase 2 revenue projections as set forth in the
Financing Plan, the number of TAUs required to be transferred by the Agency is
not greater than 409, the development design component conforms to the Agency
and City design guidelines and is consistent with the Phase 1 design elements,
there is at least 9,000 square feet of meeting space within the development (the
9,000 square feet of meeting space may include meeting space elsewhere on the
Development Site, including meeting space at the Gondola top station), and the
operation plan for the resort is consistent with a four star resort. The Agency
will not approve the development plan for the Lake Tahoe Inn Development Site if
the plan proposes operating the development as a Grand Summit Resort. If the
Agency disapproves the development plan, the Agency shall notify ASCRP of the
reasons for such disapproval in writing. ASCRP shall have thirty (30) days from
receipt of the Agency disapproval to resubmit a revised development plan. In the
event ASCRP proposes to sell any of the units at the site as single ownership
units, ASCRP shall consult with the Agency regarding whether such a sale will
trigger the Agency's housing production requirements pursuant to Health and
Safety Code Section 33413. In the event the sale of single ownership units
triggers the housing production requirement ASCRP will be required to make an
in-lieu payment to the Agency in an amount to be determined by the Agency to
assist the Agency in meeting its housing production requirement.
(e) Phase 2 Acquisitions. The Agency shall not begin acquisition of
the Phase 2 Development Site until such time as ASCRP has provided the Agency
with a notice in writing of its intent to construct Phase 2. ASCRP must give a
notice of intent to construct Phase 2 no later than September 1, 2001; provided,
however, if ASCRP desires to begin construction of Phase 2 during the year 2001
building season, ASCRP must give the Agency a notice of intent to build Phase 2
no later than September 1, 2000. If ASCRP fails to give the Agency a notice of
intent to build on or before September 1, 2001, the Agency may terminate this
Agreement pursuant to Section 12.05 and exercise any remedies the Agency may
have pursuant to Article 12, unless on or before September 1, 2001, ASCRP
delivers to the Agency a letter of credit meeting all of the requirements set
forth in Section 2.01(b)(1) and (2) in the amount of One Million Six Hundred
Sixty-Three Thousand Dollars ($1,663,000). The letter of credit may be drawn on
by the Agency to cover costs associated with Phase 2 Site Acquisition at any
time after the Letter of Credit is posted.
(f) Evidence of Financing. At the time ASCRP provides the Agency with
a notice of its intent to construct Phase 2, ASCRP and Cecil's Market, Inc.
shall also present evidence in a form reasonably satisfactory to the Agency that
ASCRP and Cecil's Market, Inc. have financial commitments and equity sufficient
to fund the portions of the Project for which ASCRP and Cecil's Market, Inc. are
responsible. The Agency shall either approve or disapprove ASCRP's and Cecil's
Market, Inc.' evidence of sufficient funds within ten (10) days of receipt of
such evidence; provided, however, if ASCRP and Cecil's Market, Inc. present to
the Agency evidence of sufficient equity or firm commitments for financing from
reputable lenders with only such conditions to funding as are typical for the
funding source and are commercially reasonable in amounts at least equal to the
estimated total cost of construction of Phase 2, the Agency shall approve
ASCRP's and Cecil's Market, Inc.' evidence of financing. If the Agency
disapproves ASCRP's or Cecil's Market, Inc.' evidence of funds, ASCRP or Cecil's
Market, Inc., as applicable, shall have fifteen (15) days to submit revised
evidence. The periods of submission of evidence, review and approval or
disapproval shall continue to apply until evidence of financing has been
approved by the Agency for all portions of Phase 2; however, evidence of
financing must be approved by the Agency no later than forty-five (45) days
following submission of the original evidence of financing pursuant to this
Section, or this Agreement may be terminated pursuant to Section 12.02.
ARTICLE 4. AGENCY ACQUISITION ACTIVITIES
4.01 Agency Offers to Purchase. Provided the preconditions in Sections
2.01 and 3.01 have been met and subject to the provisions of this Article 4, the
Agency shall, in accordance with the provisions of Government Code Sections 7267
through 7267.9, make offers to purchase the Phase 1 Development Site and the
Phase 2 Development Site in accordance with the terms and conditions set forth
in the Schedule of Performance. Provided the preconditions in Sections 2.01 and
3.01 have been met and subject to the provisions of this Article 4, the City
shall, in accordance with the provisions of Government Code Sections 7267
through 7267.9, make offers to purchase the property required for the Drainage
Basins in accordance with the times set forth in the Schedule of Performance.
Prior to making the initial offer for any property in the Phase 1 Development
Site or the Phase 2 Development Site, the Agency, in consultation with the
Developers, shall prepare an acquisition budget estimating the costs for the
purchase of each of the parcels in the Phase 1 Development Site or the Phase 2
Development Site, as applicable, including any relocation expenses. The
acquisition budget shall include a reasonable contingency amount. The Agency
shall not be required to make any offer to purchase any portion of the Phase 2
Development Site unless ASCRP has provided the Agency with a notice of intent to
construct Phase 2 and the Agency has approved a development plan for the Lake
Tahoe Inn pursuant to Section 3.01(d) above.
The Agency shall be solely responsible for the payment of all costs
associated with the acquisition of the Phase 1 Development Site (exclusive of
the commercial property currently owned by Cecil's Market, Inc., subject to the
provisions of Section 6.01(m) and the Gondola Right-of-Way) and the Phase 2
Development Site (exclusive of the leasehold interest in the Lake Tahoe Inn);
provided, however, in the event that, at any time, the Developers determine that
the Agency or the City is unable to timely fund the acquisition of the property
necessary for the development of the Project (including the acquisition of the
property necessary for the Drainage Basins) within the time frame required by
this Agreement, the Developers may, at their option, loan to the Agency and/or
the City, on an unsecured basis, up to whatever amounts of funds are necessary
to acquire the Development Site, and Agency and/or the City agree to borrow such
funds and use such funds exclusively for the purposes of acquiring the necessary
property. In the event the Developers loan funds to the Agency and/or the City,
the Agency and/or the City shall repay such funds immediately upon Agency's
receipt of any, and to the extent of all available Excess Revenues.
4.02 Condemnation of Properties. To the extent that the Agency or the
City is unable to acquire any of the property comprising the Development Site,
including the Gondola Right-of-Way, and the Drainage Basin Property through
negotiation, the Agency and/or the City agree to make a good faith effort to
schedule a hearing within the time set forth in the Schedule of Performance for
the purpose of considering a resolution of necessity authorizing the use of the
Agency's or the City's eminent domain authority pursuant to California Code of
Civil Procedure Section 1230.010 et seq. in order to acquire such parcel through
the exercise of the Agency's or the City's power of eminent domain. The Agency
and the City shall take all steps necessary to schedule a hearing for
consideration of a resolution of necessity by the County of El Dorado
authorizing the use of the County's eminent domain authority for those portions
of the Gondola Right-of-Way outside city limits, if necessary.
4.03 Acknowledgement of Agency and City Discretion. The Developers
acknowledge that the Agency and the City have absolute discretion in determining
whether or not they should adopt a resolution of necessity with regard to the
property included in the Development Site, the Gondola Right-of-Way and the
Drainage Basin Property or any portion thereof, and therefore agree that nothing
in this Agreement shall obligate the Agency or the City to adopt a resolution of
necessity with respect to any portion of the Development Site, the Gondola
Right-of-Way and the Drainage Basin Property or subject the Agency or the City
to liability for the failure of the Agency or the City to adopt such resolution.
4.04 Eminent Domain Actions; Orders for Possession. If the Agency, the
County and/or the City adopt resolutions authorizing the Agency or the City to
proceed with condemnation proceedings to acquire any or all of the Development
Site, the Gondola Right-of-Way or the Drainage Basin Property, the Agency or the
City, as applicable, shall promptly commence such proceedings for such portions
of the Development Site, make the deposit of compensation required by law and
seek orders for possession of the portion of the Development Site that is the
subject of the condemnation actions; provided, however, the Agency or the City
may delay obtaining orders of possession for the Drainage Basin Property until
May 15, 2000. If the Agency has not executed voluntary agreements for
acquisition of the Phase 1 Development Site (except for the Drainage Basin
Property) or obtained orders of possession for those properties that the Agency
is unable to reach voluntary agreement by December 15, 1999, prior to obtaining
orders of possession the Agency and Developers shall meet and confer about
changes to the Schedule of Performance. Only after the Agency and Developers
have agreed upon a revised Schedule of Performance shall the Agency proceed with
obtaining orders of possession for the Phase 1 Development Site.
4.05 TAUs, Sewer Units and CFA. When acquiring the properties
comprising the Development Site and the Drainage Basin Property, the Agency
and/or the City shall retain all TAUs, Residential Units, square feet of CFA,
the Land Coverage Square Footage and Sewer Units located on the properties for
transfer to the Developers pursuant to Article 7. In addition to the above,
Agency shall retain for Project use the Land Coverage Square Footage from APNs
29-095-011, 29-095-21 and 29-095-041.
ARTICLE 5. AGENCY CONDITIONS PRECEDENT
TO DISPOSITION OF PROPERTY TO DEVELOPER
5.01 Conditions Precedent to Transfer of Phase 1 Development Site to
Developers. In addition to the completion of the activities set forth in
Articles 2, 3 and 4, as conditions precedent to Heavenly Valley's, Heavenly
Resort Properties' and TSI's obligation to acquire the Phase 1 Development Site,
the conditions set forth in this Section 5.01 must first be met by the Agency
and/or the City or waived by Heavenly Valley, Heavenly Resort Properties and TSI
by the time specified in the Schedule of Performance or such other dates as may
be agreed upon by the Parties.
(a) Acquisition of Phase 1 Development Site. The Agency or the City
shall have acquired all of the property comprising the Phase 1 Development Site,
including the Gondola Right-of-Way as well as the Paul Kennedy Steakhouse Site,
in fee or the Agency or the City shall have valid orders of possession for those
properties that the Agency or the City has been unable to acquire voluntarily.
(b) Agency Acquisition of Units of Use. The Agency shall have obtained
or shall have possession of 294 TAUs, 50,246 CFA and 518 Sewer Units and 18
Residential Units.
(c) Hazardous Materials Clean-up. The Agency shall have prepared an
environmental site assessment for the Phase 1 Development Site, including a
hazardous materials removal plan, and the Agency shall have carried out any
activities recommended in the site assessment as necessary for the removal of
any hazardous materials located on the Phase 1 Development Site. The Agency
hereby agrees to indemnify, protect, hold harmless and defend (by counsel
reasonably satisfactory to Heavenly Valley, Heavenly Resort Properties and TSI)
Heavenly Valley, Heavenly Resort Properties and TSI, their officers, directors,
agents and employees and their successors and assigns from and against all
claims, losses, damages, liabilities, fines, penalties, charges, administrative
and judicial proceedings and orders, judgments, remedial action requirements,
enforcement actions of any kind and all costs and expenses incurred in
connection therewith (including, but not limited to, attorneys' fees and
expenses) arising directly or indirectly in whole or in part from hazardous
materials on the Phase 1 Development Site which were on the Phase 1 Development
Site prior to Heavenly Valley, Heavenly Resort Properties and TSI acquiring the
Phase 1 Development Site or from the Agency's activities related to the removal
of any hazardous materials including any costs or expenses incurred by the
Developers as a result of the Agency failing to deliver to Heavenly Valley,
Heavenly Resort Properties and TSI the Phase 1 Development Site in accordance
with the Schedule of Performance as a result of delays in the removal of any
hazardous materials. Upon completion of any removal of hazardous material on the
Phase 1 Development Site, the Agency shall provide Heavenly Valley, Heavenly
Resort Properties and TSI with copies of any certificates or closure letters
received by the Agency from any regulatory bodies indicating that the hazardous
materials have been removed and properly disposed of. The provisions of this
subsection shall survive expiration of this Agreement or other termination of
this Agreement, and shall remain in full force and effect.
(d) Demolition of Existing Improvements. The Agency shall have
demolished and removed any improvements, structures or debris currently located
on the Phase 1 Development Site and shall have placed the property in a
condition to begin construction; provided, however, prior to demolition of the
portion of the Lake Tahoe Inn in the Phase 1 Development Site, ASCRP shall have
granted the Agency a right of entry to the Lake Tahoe Inn, including the right
to demolish the improvements located on the Phase 1 Development Site. In the
event the Agency is unable to deliver the Phase 1 Development Site to Heavenly
Valley, Heavenly Resort Properties and TSI in the time set forth in the Schedule
of Performance as a result of delays related to the demolition of improvements
on the Phase 1 Development Site, the Agency shall pay to the Developers any
costs associated with such a delay, including costs related to maintaining the
Letter of Credit required pursuant to Section 2.01(b) and costs associated with
keeping the construction contract in effect.
(e) Construction Manager. In the event there will be multiple
contractors working simultaneously at or near the Phase 1 Development Site, the
Agency shall have entered into a contract with a construction manager acceptable
to both Developers and the Agency which provides for the construction manager to
coordinate construction of the Public Improvements.
(f) Contracts for Public Improvements. The Agency shall have taken all
steps necessary to award contracts for the Phase 1 Public Improvements.
(g) Parking Management Agreement. The Agency, the City, Heavenly
Valley, Heavenly Resort Properties, TSI and Tahoe Crescent Partners shall have
approved a Parking Management Agreement.
(h) Plaza Maintenance Agreement. The Agency, the City, ASCRP, Heavenly
Valley, Heavenly Resort Properties, Cecil's Market, Inc., and TSI shall have
approved the Plaza Maintenance Agreement. The Plaza Maintenance Agreement shall
include provisions regulating advertising signs in the Plaza, the operations of
the Plaza, reserve funding for the Plaza operations and such other provisions as
the parties may agree.
(i) Mello-Roos District Formation. The Agency shall have caused to be
formed a Mello-Roos District to cover the Phase 1 Development Site in accordance
with Section 9.05 below.
5.02 Conditions Precedent to Transfer of Phase 2 Development Site to
Developers. In addition to the completion of the activities set forth in
Articles 2, 3 and 4, as conditions precedent to the Developers' obligation to
acquire the Phase 2 Development Site, the conditions set forth in this Section
5.02 must first be met by the Agency or waived by ASCRP and Cecil's Market, Inc.
by the time specified in the Schedule of Performance or such other dates as may
be agreed upon by the Parties.
(a) Acquisition of Phase 2 Development Site. The Agency shall have
acquired all of the property comprising the Phase 2 Development Site in fee,
including a fee interest in the Lake Tahoe Inn Site, or the Agency shall have
valid orders of possession for those properties that the Agency has been unable
to acquire voluntarily.
(b) Agency Acquisition of Units of Use. The Agency shall have obtained
or shall have possession of 456 TAUs, 17,610 CFA, 537 Sewer Units, and 1
Residential Unit.
(c) Hazardous Materials Clean-up. The Agency shall have prepared an
environmental site assessment for the Phase 2 Development Site, including a
hazardous materials removal plan, and the Agency shall have carried out any
activities recommended in the site assessment as necessary for the removal of
any hazardous materials located on the Phase 2 Development Site. The Agency
hereby agrees to indemnify, protect, hold harmless and defend (by counsel
reasonably satisfactory to ASCRP and Cecil's Market, Inc.) ASCRP and Cecil's
Market, Inc., their officers, directors, agents and employees and their
successors and assigns from and against all claims, losses, damages,
liabilities, fines, penalties, charges, administrative and judicial proceedings
and orders, judgments, remedial action requirements, enforcement actions of any
kind and all costs and expenses incurred in connection therewith (including, but
not limited to, attorneys' fees and expenses) arising directly or indirectly in
whole or in part from hazardous materials on the Phase 2 Development Site which
were on the Phase 2 Development Site prior to ASCRP and Cecil's Market, Inc.
acquiring the Phase 2 Development Site or from the Agency's activities related
to the removal of any hazardous materials, including any costs incurred by ASCRP
and Cecil's Market, Inc. as a result of the Agency failing to deliver to ASCRP
and Cecil's Market, Inc. the Phase 2 Development Site in accordance with the
Schedule of Performance as a result of delays in the removal of any hazardous
materials; provided, however, this indemnity shall not cover any hazardous
materials located on the portions of the Phase 2 Development Site owned by the
Developers prior to the Close of Escrow, except that the Agency shall be
responsible for the removal of asbestos from the Lake Tahoe Inn. Upon completion
of any removal of hazardous material on the Phase 2 Development Site, the Agency
shall provide ASCRP and Cecil's Market, Inc. with copies of any certificates or
closure letters received by the Agency from any regulatory bodies indicating
that the hazardous materials have been removed and properly disposed of. The
provisions of this subsection shall survive expiration or other termination of
this Agreement, and shall remain in full force and effect.
(d) Subdivision Map. The Developers shall have recorded a final
subdivision map for the Phase 2 Development Site that is consistent with the
tentative subdivision map.
(e) Demolition of Existing Improvements. The Agency shall have
demolished and removed any improvements, structures or debris currently located
on the Phase 2 Development Site and shall have placed the property in a
condition to begin construction; provided, however, prior to demolition of the
Lake Tahoe Inn, ASCRP shall have granted the Agency a right of entry to the Lake
Tahoe Inn, including the right to demolish the improvements located thereon, and
Cecil's Market, Inc. shall have granted the Agency a right of entry to the Paul
Kennedy Steakhouse Site, including the right to demolish the improvements
located thereon. In the event the Agency is unable to deliver the Phase 2
Development Site to ASCRP and Cecil's Market, Inc. in the time set forth in the
Schedule of Performance as a result of delays related to the demolition of
improvements on the Phase 2 Development Site, the Agency shall pay to ASCRP and
Cecil's Market, Inc. any costs associated with such a delay, including costs
related to maintaining the Letter of Credit required pursuant to Section 2.01(b)
and costs associated with keeping the construction contract in effect.
(f) Contracts for Public Improvements. The Agency or the City shall
have taken all steps necessary to award contracts for the Phase 2 Public
Improvements.
(g) Annexation of County Property. The City shall have completed
annexation of the portion of property currently located in El Dorado County's
jurisdiction adjacent to the site where the Intermodal Transit Center is to be
developed.
(h) Mello-Roos District. The Agency shall have caused the Phase 2
Development Site to be annexed to the Mello-Roos District formed pursuant to
Section 9.05, below. The Developer shall consent to the annexation of the Phase
2 Development Site to the Mello-Roos District.
ARTICLE 6. DEVELOPERS' CONDITIONS
PRECEDENT TO TRANSFER OF DEVELOPMENT SITE
6.01 Conditions Precedent to Transfer of Phase 1 Property to
Developers. In addition to the completion of the activities set forth in
Articles 2, 3 and 4, as conditions precedent to the Agency's obligation to
transfer the Phase 1 Development Site to Heavenly Resort Properties, Heavenly
Valley and TSI, the conditions set forth in this Section 6.01 must first be met
by Heavenly Resort Properties, Heavenly Valley and TSI or waived by the Agency
by the time specified in the Schedule of Performance or such other dates as may
be agreed upon by the Parties; provided, however, if Heavenly Resort Properties
and Heavenly Valley have met all the conditions set forth in this Section 6.01
but TSI has not met all the conditions set forth in this Section 6.01, the
conditions precedent for the transfer of the portions of the Phase 1 Development
Site to be transferred to Heavenly Resort Properties and Heavenly Valley shall
be deemed to have been met.
(a) Parking Management Agreement. ASCRP, Heavenly Resort Properties,
Heavenly Valley, TSI, Cecil's Market, Inc., the Agency and Tahoe Crescent
Partners shall have approved a Parking Management Agreement.
(b)Plaza Maintenance Agreement. Heavenly Resort Properties, Heavenly
Valley, TSI and the Agency shall have approved a Plaza Maintenance Agreement.
(c) Permits and Approvals. Heavenly Resort Properties, Heavenly Valley
and TSI shall have obtained and acknowledged all permits and approvals necessary
for the construction of Phase 1 from any federal, state and local agencies
having jurisdiction over the construction of the Project and shall be in
compliance with all such permits.
(d) Final Construction Plans. Within the time set forth in the
Schedule of Performance, Heavenly Resort Properties, Heavenly Valley and TSI
shall complete or cause to be completed and submit to the Agency the Final
Construction Plans for Phase 1 and simultaneously cause applications to be
submitted to the City for a building permit for construction of Phase 1. The
final construction plans shall include detailed information about interior
finishes and design elements. The Agency may, at its option, review the Final
Construction Plans for consistency with the Approved Plans and the Site Plan,
and if the Agency notifies the Developers in writing within fifteen (15) days
after receipt of the Final Construction Plans of an inconsistency with this
Agreement, then Heavenly Resort Properties, Heavenly Valley and TSI shall
promptly revise the Final Construction Plans and cause the City building permit
applications to be revised to eliminate such inconsistency; provided, however,
if the Agency disapproves of the Final Construction Plans because of the
interior finishes or design elements, the Agency and the Developers shall meet
and confer regarding appropriate changes to the interior finishes. After causing
such applications to be made for a building permit, Heavenly Resort Properties,
Heavenly Valley and TSI shall diligently pursue and obtain a building permit. No
later than ninety (90) days following application to the City for a building
permit (subject to extensions of time reasonably granted by the Agency Executive
Director or his or her designee pursuant to Section 12.08 if issuance of a
building permit is delayed through no fault of the Developers) Heavenly Resort
Properties, Heavenly Valley and TSI shall deliver evidence to the Agency that
Heavenly Resort Properties, Heavenly Valley and TSI are entitled to issuance of
a building permit for Phase 1 upon payment of permit fees.
(e) Evidence of Financing. Heavenly Resort Properties, Heavenly Valley
and TSI shall have provided the Agency with evidence satisfactory to the Agency
in its Reasonable Discretion of a binding construction loan or other financing
commitments for the Grand Summit Hotel, the Grand Summit Annex, the Gondola and
the Ice Rink in an amount sufficient to construct the Grant Summit Hotel, the
Grand Summit Annex, the Gondola and the Ice Rink in accordance with the
Financing Plan. In addition, Heavenly Valley shall provide the Agency with
evidence satisfactory to the Agency in its Reasonable Discretion that the terms
of the agreement for the purchase of Gondola equipment have been fully met and
the purchase agreement is still in full force and effect.
(f) Subdivision Map. The Developers, in consultation with the Agency,
shall have prepared a subdivision map for the Development Site consistent with
the Draft Tentative Subdivision Plan and the City shall have approved and the
Developers or the Agency shall have recorded a final subdivision map for the
Phase 1 Development Site.
(g) Department of Real Estate Approval. Heavenly Resort Properties
shall provide the Agency with evidence of receipt of Public Report from the
California Department of Real Estate.
(h) Water Permits. Heavenly Resort Properties, Heavenly Valley and TSI
shall have applied for and obtained binding commitment from STPUD for adequate
domestic and fire sprinkler water supplies for the operation of Phase 1 of the
Project.
(i) Waste Discharge Permit. Heavenly Resort Properties, Heavenly
Valley and TSI shall have obtained waste discharge permits from Lahontan for
Phase 1 of the Project.
(j) Construction Contract. Heavenly Resort Properties, Heavenly Valley
and TSI shall provide the Agency with an opportunity to review an executed
construction contract for Phase 1 of the Project in form and substance
acceptable to the Agency in its Reasonable Discretion from a general contractor
of sufficiently strong financial condition to qualify as a surety to issue a
payment and performance bond and with a level of contracting experience
acceptable to the Agency in its Reasonable Discretion. The Agency shall approve
the construction contract if the contract is for an amount not to exceed the
amount of the construction financing commitments pursuant to Section 6.01(d)
above and the contract includes the requirements of Section 8.06 and 8.07
regarding local hiring and local supplies.
(k) Performance and Payment Bonds. Heavenly Resort Properties and TSI
shall deliver to the Agency performance and payment bonds in form and substance
reasonably satisfactory to the Agency in the full amount of the construction
contract. The performance and payment bonds shall name the Agency as the
co-obligee.
Said bonds should be issued by an insurance company which is licensed
to do business in California and named in the current list of "Surety Companies
Acceptable on Federal Bonds" as published in the Federal Register by the Audit
Staff Bureau of Accounts, U.S. Treasury Department and for amounts which are not
in excess of the acceptable amount set forth on such list for the respective
surety. The insurance company shall have a rating equivalent to a Best rating of
A or FSC rating of 9.
(l) Contract for the Acquisition of the Lake Tahoe Inn. ASCRP has
submitted to the Agency a fully executed and binding entitlement to acquire the
Lake Tahoe Inn ("Option Agreement"). The Option Agreement shall be in full force
and effect until the close of escrow on the Phase 2 Development Site. Any
changes or amendments to the Option Agreement shall be subject to the Agency's
approval.
(m) Transfer of CFA. TSI shall have transferred 26,920 square feet of
CFA to the Grand Summit Hotel site.
(n) Grant Deed for Cecil's Market. John and Camilla Jovicich shall
deposit to Escrow a Grant Deed granting the property commonly known as Cecil's
Market, located at 4020 U.S. Highway 50 and the Big and Tall Store located at
1019 Park Avenue ("Jovicich Property") to the Agency.
(o) Insurance. The Developers shall furnish the Agency with evidence
of insurance in the amounts and types specified in Section 8.12 naming the
Agency and the City as additional insured.
(p) No Default. There exists no Developer Event of Default as defined
in Section 12.05.
(q) Representations and Warranties. The representations and warranties
of the Developers as set forth in Section 14.01 of the Agreement remain true and
correct.
(r) No Litigation Concerning DDA. There is no existing pending
litigation, suit, action or proceeding before any court or administrative agency
affecting the Developers or any of them or Development Site, that would, if
adversely determined, adversely affect the Developers or the Development Site or
the Developers' ability to perform their obligations under this Agreement or to
develop or operate the Project.
(s) Retail Tenant Selection. Prior to beginning leasing efforts for
the retail space in the Development, TSI and Heavenly Resort Properties shall
provide to the Agency for its approval or disapproval, leasing plans showing the
desired tenant mix and expected lease rate. Approval of the leasing plans shall
be in the Agency's Reasonable Discretion. Subsequent to approval of the leasing
plan, TSI and Heavenly Resort Properties shall provide the Agency with biannual
reports of leasing efforts.
(t) Agency's Satisfaction with Developer. Heavenly Resort Properties
has provided the Agency with evidence reasonably satisfactory to the Agency that
Heavenly Resort Properties is a single purpose entity whose sole assets are such
portion of the Phase I Development Site that Heavenly Resort Properties is to
take title of and any related assets and whose sole liabilities are:
(a) those approved by the Agency pursuant to Section 2.01 (f) or
3.01 (f), as applicable; or
(b) contingent unsecured liabilities which are fully subordinated
to liabilities approved by the Agency and which would neither
render Heavenly Resort Properties "insolvent" as that term is
defined in the United States Bankruptcy Code or New York law,
nor leave Heavenly Resort Properties with unreasonably small
capital.
TSI has provided the Agency with evidence reasonably satisfactory to
the Agency that TSI is a single purpose entity whose sole assets are the portion
of the Phase I Development Site that TSI is to take title of and any related
assets and whose sole liabilities are related to development of the portion of
the Phase I Development Site TSI is developing.
(u) No Bankruptcy/Dissolution Event. No Bankruptcy/Dissolution Event
shall have occurred with respect to any of the Developers or an ASC Affiliate.
6.02 Conditions Precedent to Transfer of Phase 2 Development Site to
Developers. In addition to the completion of the activities set forth in
Articles 2, 3 and 4, as conditions precedent to the Agency's obligation to
transfer the Phase 2 Development Site to ASCRP and Cecil's Market, Inc. the
conditions set forth in this Section 6.02 must first be met by ASCRP and Cecil's
Market, Inc. or waived by the Agency by the time specified in the Schedule of
Performance or such other dates as may be agreed upon by the Parties; provided,
however, if ASCRP has met all the conditions set forth in this Section 6.02 but
Cecil's Market, Inc. have not met all the conditions set forth in this Section
6.02, the conditions precedent for the transfer of the portions of the Phase 2
Development Site to be transferred to ASCRP shall be deemed to have been met.
(a) Permits and Approvals. ASCRP and Cecil's Market, Inc. shall have
obtained all permits and approvals necessary for the construction of Phase 2
from any federal, state and local agencies having jurisdiction over the
construction of the Project, and ASCRP and Cecil's Market, Inc. are in
compliance with such permits.
(b) Evidence of Financing. ASCRP and Cecil's Market, Inc. shall have
provided the Agency with evidence satisfactory to the Agency in its Reasonable
Discretion of a binding construction loan commitment for Phase 2, in amounts
sufficient to construct Phase 2 in accordance with the Financing Plan.
(c) Final Construction Plans. Within the time set forth in the
Schedule of Performance, ASCRP and Cecil's Market, Inc. shall complete or cause
to be completed and submit to the Agency the Final Construction Plans for Phase
2 and simultaneously cause applications to be submitted to the City for a
building permit for construction of Phase 2. The final Construction Plans shall
include detailed information about interior finishes and design elements. The
Agency may, at its option, review the Final Construction Plans for consistency
with the Approved Plans and the Site Plan, and if the Agency notifies ASCRP and
Cecil's Market, Inc. in writing within fifteen (15) days after receipt of the
Final Construction Plans of an inconsistency with this Agreement, then ASCRP and
Cecil's Market, Inc. shall promptly revise the Final Construction Plans and
cause the City building permit applications to be revised to eliminate such
inconsistency. If the Agency disapproves of the Final Constructions Plans
because of the interior finishes or design elements, the Agency and the
Developers shall meet and confer on appropriate changes to the interior finishes
and/or design elements. After causing such applications to be made for a
building permit, ASCRP and Cecil's Market, Inc. shall diligently pursue and
obtain a building permit. No later than ninety (90) days following application
to the City for a building permit (subject to extensions of time reasonably
granted by the Agency Executive Director or his or her designee pursuant to
Section 12.08 if issuance of a building permit is delayed through no fault of
the Developers), ASCRP and Cecil's Market, Inc. shall deliver evidence to the
Agency that the ASCRP and Cecil's Market, Inc. are entitled to issuance of a
building permit for the second Phase upon payment of permit fees.
(d) Department of Real Estate Approval. ASCRP shall provide the Agency
with evidence of receipt of Public Report for the sale of units in Phase 2 from
the California Department of Real Estate if required by the Department of Real
Estate.
(e) Water Permits. ASCRP and Cecil's Market, Inc. shall have applied
for and obtained binding commitment from STPUD for adequate domestic and fire
sprinkler water supplies for the operation of Phase 2.
(f) Waste Discharge Permit. ASCRP and Cecil's Market, Inc. shall have
obtained a waste discharge permit from Lahontan for Phase 2 of the Project.
(g) Construction Contract. ASCRP and Cecil's Market, Inc. shall
provide the Agency with an opportunity to review an executed construction
contract or contracts for Phase 2 of the Project in form and substance
acceptable to the Agency in its Reasonable Discretion from a general contractor
of sufficiently strong financial condition to qualify as a surety to issue a
payment and performance bond and with a level of contracting experience
acceptable to the Agency in its Reasonable Discretion. The Agency shall approve
the construction contract if the contract is for an amount not to exceed the
amount of the construction financing commitments and equity commitments pursuant
to Section 6.02(b) above and the contract includes the requirements of Sections
8.07 and 8.08 regarding local hiring and local supplies.
(h) Performance and Payment Bonds. ASCRP and Cecil's Market, Inc.
shall deliver to the Agency performance and payment bonds in form and substance
reasonably satisfactory to the Agency in the full amount of the construction
contract. Said bonds should be issued by an insurance company which is licensed
to do business in California and named in the current list of "Surety Companies
Acceptable on Federal Bonds" as published in the Federal Register by the Audit
Staff Bureau of Accounts, U.S. Treasury Department and for amounts which are not
in excess of the acceptable amount set forth on such list for the respective
surety. The insurance company shall have a rating equivalent to a Best rating of
A or FSC rating of 9. The performance and payment bonds shall name the Agency as
the co-obligee.
(i) No Default. No Developer Event of Default as defined in Section
12.05 has occurred.
(j) Representations and Warranties. The representations and warranties
of the Developers as set forth in Section 14.01 of the Agreement remain true and
correct.
(k) No Litigation Concerning DDA. There is no existing pending
litigation, suit, action or proceeding before any court or administrative agency
affecting the Developers or Development Site that would, if adversely
determined, adversely affect the Developers or the Development Site or the
Developers' ability to perform their obligations under this Agreement or to
develop or operate the Project.
(l) Insurance. ASCRP and Cecil's Market, Inc. shall furnish the Agency
with evidence of insurance in the amounts and types specified in Section 8.12
naming the Agency and the City as additional insureds.
(m) Jovicichs' Grant Deed for Paul Kennedy Steakhouse Site. Cecil's
Market, Inc. shall have deposited into Escrow a Grant Deed granting title to the
Paul Kennedy Steakhouse Site to the Agency.
(n) Agency's Satisfaction with Developer. The ASCRP has provided the
Agency with evidence reasonably satisfactory to the Agency that the entity to
develop the Lake Tahoe Inn Site is a single purpose entity whose sole assets
will be the Lake Tahoe Inn Site Development Site the Developer is to take title
of and any related assets and whose sole liabilities are:
(a) those approved by the Agency pursuant to Section 2.01 (f) or
3.01(f), as applicable; or
(b) contingent, unsecured liabilities which are fully subordinated
to liabilities approved by the Agency and which would neither
render the development entity "insolvent" as that term is
defined in the United States Bankruptcy Code or New York law,
nor leave the development entity with unreasonably small
capital.
(o) No Bankruptcy/Dissolution Event. No Bankruptcy/Dissolution Event
shall have occurred with respect to any of the Developers or an ASC Affiliate.
ARTICLE 7. DISPOSITION OF PROPERTY
7.01 Sale of Property. Within thirty (30) days following the date that
all the conditions set forth in Section 5.01 and 6.01 have been met or waived,
the Agency shall sell and convey Parcels 5, 8 and 9 (as shown on the Preliminary
Subdivision Map) to Heavenly Resort Properties for construction of the Grand
Summit Hotel and the Grand Summit Annex; Parcel 13 and the Gondola Right-of-Way
to Heavenly Valley for construction of the Gondola; and the Gondola Park and
Parcels 6 and 7 to TSI for construction of the Ice Rink and the multi-plex
cinema. In addition to conveying the parcels as designated the Agency shall
convey to each Developer easements over Parcel 3 for ingress, egress and public
use. In addition, the Agency shall grant the Paul Kennedy Steakhouse Site to
Cecil's Market, Inc. in exchange for Cecil's Market, Inc.' conveyance of the
Jovicich Property to the Agency. Within thirty (30) days following the date that
all the conditions set forth in Sections 5.02 and 6.02 have been met or waived,
the Agency shall sell and convey Parcel No. 1 to Cecil's Market, Inc. and Parcel
4 to ASCRP. The conveyance of Parcel 1 to Cecil's Market, Inc. shall include the
rights, granted by ASCRP to Cecil's Market, Inc.', to the use of five parking
spaces in the underground parking garage developed as part of the Lake Tahoe
Inn, provided the parking garage is developed as contemplated in the Site Plan
and provided, further, Cecil's Market, Inc. reimburse ASCRP for the full cost of
developing the five parking spaces. Cecil's Market, Inc. shall also have the
right to construct access from Parcel 1 to the designated parking spaces. To
accomplish the conveyance of each Phase of the Development Site from the Agency
to the Developers, the Parties shall establish an Escrow with the Escrow Holder
and shall execute and deliver to the Escrow Holder written instructions that are
consistent with this Agreement.
7.02 Consideration. In consideration to the Agency for the conveyance
of the Phase 1 Development Site to the Developers, and as a condition to the
conveyance of the Phase 1 Development Site to the Developers, Heavenly Resort
Properties shall pay to the Agency Two Million Dollars ($2,000,000), plus
Heavenly Valley shall reimburse the Agency for all costs associated with the
acquisition of the Gondola Right-of-Way, including legal fees and any severance
damages or special benefits awarded any property owners as a result of a partial
condemnation of property for the Gondola Right-of-Way. In consideration to the
Agency for the conveyance of the Phase 2 Development Site to the Developers,
ASCRP shall deposit into Escrow of a grant deed conveying to the Agency any
right, title or interest ASCRP has in the Lake Tahoe Inn Site. In addition, in
consideration of the conveyance of the Paul Kennedy Steakhouse Site to Cecil's
Market, Inc. at the time of conveyance of the Phase 1 Development Site, Cecil's
Market, Inc. shall grant to the Agency the Jovicich Property and waive any
relocation benefits and loss of goodwill associated with Agency acquisition of
the Jovicich Property. In consideration of the conveyance of Parcel 1 to Cecil's
Market, Inc. at the time of conveyance of the Phase 2 Development Site, Cecil's
Market, Inc. shall convey to the Agency the Paul Kennedy Steakhouse Site and
waive any relocation and loss of goodwill associated with the Agency's
acquisition of the Paul Kennedy Steakhouse Site from Cecil's Market, Inc..
7.03 Orders of Possession. If the Agency has not obtained fee title to
any portion of the Development Site at the time set forth for conveyance to the
Developers herein, but has obtained a judicial order for its possession, the
Agency may deposit a copy of the order into Escrow, as an interim alternative to
acquiring title and depositing the deed for such parcel into Escrow. Provided
the conditions set forth in Section 7.05 have been satisfied, the Escrow for
that parcel shall close within thirty (30) days following the date the Agency
obtains possession of the parcel. At the close of the Escrow the Agency shall
convey its right of possession to Developers by instrument reasonably acceptable
to the Agency and Developers. Following the deposit of such an order into
Escrow, the Agency shall diligently proceed with its eminent domain action until
a final judgment is rendered or settlement reached. Provided the final judgment
results in the Agency obtaining fee title to the parcel, the Agency thereafter
shall forthwith deposit the Grant Deed (or such other instrument as is ordered
by the court) for such parcel into Escrow. In the event there is any additional
title insurance premium costs associated with conveyance of property subject to
an order of possession the Agency shall bear the additional premium.
7.04 Closing Condition. The Agency shall not be required to convey to
the Developers any portion of the Development Site if a Developer's Default has
occurred and is continuing.
7.05 Closing Event. At each closing, the Parties shall undertake to do
or cause the following:
(a) Conveyance. Except as provided in Section 7.03, the Agency shall
convey the Development Site in question to the Developers by Grant Deed, the
form of which is attached hereto as Exhibit H, or by instrument reasonably
acceptable to the Agency and Developers.
(b) Agreement. The Parties shall execute and deliver such documents as
are necessary to make the Development Site subject to this Agreement.
7.06 Condition of Title. The Agency shall convey each portion of the
Development Site to the Developers free of all liens, encumbrances, clouds,
conditions, and rights of occupancy and possession except:
(a) applicable building and zoning laws and regulations;
(b) the provisions of the Agency Grant Deed;
(c) the provisions of this Agreement;
(d) the provisions of the Redevelopment Plan; and
(e) such other encumbrances as approved by the Developers.
7.07 Condition of the Property.
(a) "As Is" Conveyance. The Agency shall convey the Development Site
to the Developers free of improvements, including subsurface improvements. In
addition the Agency shall have completed any hazardous materials remediation
recommended in the environmental site assessments as set forth in Sections
5.01(c) and 5.02(c) and shall have completed demolition of existing structures
as provided for in Section 5.01(d) and 5.02(e). Except as provided for in
Sections 5.01(c), 5.02(c), 5.01(d) and 5.02(e) the Agency shall have no
responsibility for the suitability of the Development Site or portions thereof
for the development of the Project, and if the conditions of the Development
Site or portions thereof are not entirely suitable for the development of the
Development, then the Developers shall put the Development Site in a condition
suitable for the improvements to be constructed. Except as provided for in
Section 5.01(c) and 5.02(c) the Developers waive any right of reimbursement or
indemnification from the Agency for the Developers' costs related to any
physical conditions on the Development Site unless such condition was known to
Agency and not disclosed to the Developers and such condition was not readily
discoverable by the Developers upon reasonable inspection of the Development
Site. This waiver shall survive termination of this Agreement.
(b) Disclosure. In anticipation of acquiring the Development Site and
in fulfillment of the requirements of Health and Safety Code Section 25359.7(a),
the Agency has no knowledge of any hazardous materials or substances in or on
the Development Site other than the information to be provided by the Agency to
the Developers in the environmental assessments to be prepared by the Agency
pursuant to Section 5.01(c) and 5.02(c), which reports shall be attached to this
Agreement as Exhibit I when completed. In compliance with California Civil Code
Section 1102.6c, the Agency shall provide the Developers with a natural hazard
disclosure statement prior to the close of Escrow, which disclosure shall be
attached to this Agreement as Exhibit I when completed.
(c) Costs of Escrow and Closing. The Agency shall pay the premium for
a CLTA Owners Policy of insurance. The Developers shall pay the costs of any
endorsements requested by any Developer. All other costs of Escrow (including,
without limitation, any Escrow Holder's fee, costs of title company document
preparation, recording fees, and transfer tax) shall be divided evenly between
the Developers and the Agency.
7.08 Real Estate Commissions. Neither party has obtained or engaged
the services of a real estate broker in this transaction. If a real estate
commission is claimed through either Party in connection with the transaction
contemplated by this Agreement, then the Party through whom the commission is
claimed shall indemnify, defend and hold the other Party harmless from any
liability related to such commission. The provisions of this section shall
survive termination of this Agreement.
7.09 Transfer of Units of Use. Upon transfer of the Phase 1
Development Site to the Developers, the Agency shall also transfer to Heavenly
Resort Properties a maximum of 294 TAUs, 43,712 square feet of CFA and the Sewer
Units the Agency acquired when the Agency acquired the Phase 1 Development Site.
Upon the transfer of the Phase 2 Development Site to the Developers, the Agency
shall also transfer to ASCRP a maximum of 456 TAUs, 8,154 square feet of CFA and
the Sewer Units the Agency acquired when the Agency acquired the Phase 2
Development Site, and 15,990 CFA to Cecil's Market, Inc.. In the event the
Developers do not require the full number of TAUs set forth above to develop the
Project in accordance with approved plans and permits, the number of TAUs to be
transferred by the Agency shall be reduced to the number actually required and
any unneeded TAUs shall be retained by the Agency. With respect to each Phase,
the Agency shall transfer the Sewer Units to the Developers at no cost to the
Developers; provided, however, if the STPUD charges any fees for the transfer of
the Sewer Units, the Developers shall be responsible for the payment of any such
fees. The Agency shall cooperate with the Developers in all efforts to minimize
or eliminate any fees associated with the transfer of Sewer Units.
(f) In addition to the CFA to be transferred above, the City shall
transfer to Heavenly Resort Properties 20,000 square feet of CFA, which square
footage is made available in accordance with the Stateline-Ski Run Community
Plan. The City shall also transfer whatever portion of the TRPA Special Projects
Allocation of CFA is not used by the TCP Parcel, which such balance shall at a
minimum be 4,462 square feet of CFA.
(g) Notwithstanding the above, the Agency may desire to substitute
Residential Units that they own for TAUs that are required in accordance with
the Financial Plan and the Motel Room Retirement Schedule. Residential Units may
be substituted for TAUs on a one-for-one basis, subject to the approval of TRPA
and any other governing agencies.
ARTICLE 8. CONSTRUCTION
8.01 Commencement of Construction. The Developers shall commence or
cause to be commenced construction of Phase 1 of the Project within thirty (30)
days of Close of Escrow for the Phase 1 Development Site; provided, however, if
Escrow for the Phase 1 Development Site does not close prior to July 1, 2000, as
a result of delays that are not within the control of the Developers, the
Developers may delay commencement of construction until the year 2001 building
season without being in default of this Agreement. If the delay in Close of
Escrow is a result of failure of the Agency to meet the conditions to conveyance
that the Agency is responsible for, then costs incurred by the Developers as a
result of the delay, including but not limited to interest on any letters of
credit, shall be paid by the Agency.. If Escrow for the Phase 1 Development Site
closes on or before June 30, 2000 and the Developers fail to start construction
of the portions of Phase 1 to be constructed by the Developers on or before
September 30, 2000, the Developers shall pay to the Agency any interest owed on
the BANS from the date the Agency notifies Developers that all conditions to
conveyance of the Phase 1 Development Site have been satisfied or waived until
the Developers commence construction of Phase 1. The Developers shall commence
or cause to be commenced construction of Phase 2 of the Project within thirty
(30) days of the close of Escrow for the Phase 2 Development Site. Commencement
of construction for purposes of this Section shall mean excavation of the
Development Site.
8.02 Completion of Construction. The Developers shall diligently
prosecute or cause to be prosecuted to completion the construction of each Phase
of the Project, and shall complete or cause to be completed the construction of
each Phase of the Project no later than the time specified in the Schedule of
Performance. In the event ASCRP and Heavenly Resort Properties fail to complete
construction of each Phase of the Project within the time specified in the
Schedule of Performance for completion of construction and such failure is not
the result of the Agency failing to convey each Phase Development Site to the
Developers in a timely fashion, ASCRP and/or Heavenly Resort Properties, as
applicable, shall pay to the Agency the daily interest cost incurred by the
Agency on the BANS for each day that construction continues after the date of
completion set forth in the Schedule of Performance.
8.03 Construction Pursuant to Plans.
(a) The Developers shall construct, or cause to be constructed, each
Phase of the Project substantially in accordance with the Final Construction
Plans, the Project Permits, the Use Permit and the terms and conditions of all
City and other governmental approvals.
(b) The Developers shall submit or cause to be submitted for Agency
approval any proposed change in the Final Construction Plans which materially
changes any portion of the Project and which would require an amendment to any
approval or permits obtained from the City or other governmental agencies. The
Agency shall approve or disapprove a proposed change within fifteen (15) days
after receipt by the Agency. Failure to approve or disapprove within fifteen
(15) days shall be deemed to be approval of such change. If the Agency rejects
the proposed change, then the Agency shall provide the Developers with the
specific reasons therefor, in writing, and the approved Final Construction Plans
shall continue to control.
(c) No change which is required for compliance with building codes or
other government health and safety regulation shall be deemed material. However,
the Developers must submit or cause to be submitted to the Agency, in writing,
any change that is required for such compliance within ten (10) days after
making such change, and such change shall become a part of the approved Final
Construction Plans, binding on the Developers.
8.04 Compliance with Applicable Law. The Developers shall cause all
work performed in connection with the Property to be performed in compliance
with (a) all applicable laws, ordinances, rules and regulations of federal,
state, county or municipal governments or agencies now in force or that may be
enacted hereafter (including, without limitation, the prevailing wage provisions
of Sections 1770 et seq. of the California Labor Code, but only to the extent
applicable), and (b) all directions, rules and regulations of any fire marshal,
health officer, building inspector, or other officer of every governmental
agency now having or hereafter acquiring jurisdiction. The work shall proceed
only after procurement of each permit, license, or other authorization that may
be required by any governmental agency having jurisdiction, and the Developers
shall be responsible to the Agency for the procurement and maintenance thereof,
as may be required of the Developers and all entities engaged in work on the
Development Site.
8.05 Non-Discrimination During Construction; Equal Opportunity. The
Developers, for themselves and their successors, assigns, and transferees agree
that in the construction of the Project provided for in this Agreement:
(a) They will not discriminate against any employee or applicant for
employment because of race, color, religion, creed, national origin, ancestry,
disability, medical condition, age, marital status, sex, sexual
preference/orientation, Acquired Immune Deficiency Syndrome (AIDS) acquired or
perceived, or retaliation for having filed a discrimination complaint
(nondiscrimination factors). The Developers will take affirmative action to
ensure that applicants are employed, and that employees are treated without
regard to the nondiscrimination factors during employment including, but not
limited to, activities of upgrading, demotion or transfer; recruitment or
recruitment advertising, layoff or termination; rates of pay or other forms of
compensation; and selection for training, including apprenticeship. The
Developers agree to post in conspicuous places, available to employees and
applicants for employment, the applicable nondiscrimination clause set forth
herein:
(b) They will ensure that its solicitations or advertisements for
employment are in compliance with the aforementioned nondiscrimination factors;
and
(c) They will cause the foregoing provisions to be inserted in all
contracts for the construction of the Project entered into after the effective
date of this Agreement; provided, however, that the foregoing provisions shall
not apply to contracts or subcontracts for standard commercial supplies or raw
materials.
8.06 Preference for Local Labor. The Developers recognize the
importance of local labor having an opportunity, based on merit, to be involved
in the Project. The Developers shall, in letting bids for the construction of
improvements under this Agreement, require their General Contractor(s) to
provide reasonable notice to and, in response thereto, receive bids from, any
local contractors and/or subcontractors qualified to bid as subcontractors on
such construction. In order to be considered by the General Contractor(s) to be
a subcontractor on the Project, each such bid shall be submitted in compliance
with the requirements of the General Contractor(s) which are consistently
applied to all bidders. General Contractor(s) shall create a program providing
for notice of work and opportunity to bid as set forth in this Section 8.06 and
the means of documenting the effectiveness of the process in ensuring work for
qualified local labor. For these purposes, local labor shall be defined as
persons whose residence is within the portions of Douglas and El Dorado Counties
that are within the Tahoe Basin. If no bids are received from local contractors,
this requirement does not apply and the contract may be awarded without
reference to this Section 8.06; provided, however, on work where there is no
local bidder, the Developers shall document their attempts to solicit local
contractors and shall provide such documentation to the Agency upon request.
Notwithstanding the above, the Developers shall not be required to require the
General Contractor(s) and the General Contractor(s) shall not be required to
require its subcontractors or suppliers to hire local labor if either the
General Contractor(s) or its subcontractors or suppliers determines that, in any
such instance, such local labor either is unavailable, unqualified, would
increase the cost of or slow down the progress of construction of the Project or
would otherwise adversely affect the Project. The Developers shall have complied
with this provision if the Developers use commercially reasonable efforts to
achieve the objective outlined herein.
8.07 Supplies and Materials. In securing supplies and materials for
use on the Project, the Developers agree to direct their General Contractor(s),
to the extent commercially practicable, to utilize local sources of supplies;
provided, however, that their General Contractor(s) is not thereby required (i)
to contract with local suppliers at a higher price than is available elsewhere;
(ii) to use multiple suppliers (because local suppliers are not able to supply
all supplies necessary with respect to any particular scope of work); (iii) to
use local suppliers if the provisions of such supplies by the local suppliers
would slow the progress of or otherwise adversely affect the Project; or (iv) to
refrain from entering into a subcontract with the most qualified subcontractor
in the business judgment of the General Contractor(s) where such qualified
subcontractor is not procuring its supplies from local suppliers. The Developers
shall have complied with this provision if Developers use their commercially
reasonable efforts to achieve the objectives outlined herein.
8.08 Certificate of Completion. When the Agency has determined that
the obligations of the Developers under this Article 8 have been met with
respect to any Phase of the Project, the Developers may request that the Agency
issue a certificate to such effect (a "Certificate of Completion"), which the
Agency shall execute and deliver within thirty (30) days of such a request. Such
certification shall not be deemed a notice of completion under the California
Civil Code, nor shall it constitute evidence of compliance with or satisfaction
of any obligation of the Developers to any holder of a deed of trust securing
money loaned to finance the Project. If the Developers request issuance of a
Certificate of Completion but the Agency refuses, then the Agency shall provide
the Developers with a written explanation of its refusal within thirty (30) days
of the Developers' initial request. A Certificate of Completion may be
requested, and if the requirements hereof with respect to such Phase have been
met, issued for one or more Phase of the Project.
8.09 Progress Reports. Until such time as the Developers are entitled
to issuance of a Certificate of Completion, the Developers shall provide the
Agency with progress reports regarding the status of the construction of the
Development, including reports on the number of local contractors and local
laborers working on the Project and reports on the sources of supplies and
materials used in the construction of the Project.
8.10 Entry by the Agency. The Developers shall permit the Agency,
through its officers, agents, or employees, to enter the Property at all
reasonable times and in a safe, unobtrusive manner to review the work of
construction to determine that such work is in conformity with the approved
Final Construction Plans or to inspect the Property for compliance with this
Agreement. The Developers and the Agency shall schedule regular inspections to
the extent reasonable once interior finishing work commences for the Agency to
insure that the interior finishes conform to the approved Final Construction
Plans. The Agency is under no obligation to (a) supervise construction, (b)
inspect the Property, or (c) inform the Developers of information obtained by
the Agency during any review or inspection, and the Developers shall not rely
upon the Agency for any supervision, inspection, or information.
8.11 Taxes. At all times the Developers shall pay when due all real
property taxes and assessments assessed and levied on the Development Site after
the Developers take title to the Development Site or portions thereof and shall
remove any levy or attachment made on the Development Site. The Developers may,
however, contest the validity or amount of any tax, assessment, or lien on the
Development Site; provided, however, prior to contesting any tax or lien the
Developers shall meet and confer with the City and the Agency, and provided
further the Developers will not contest any assessment on the Development Site
that is less than or equal to the assessments shown on the Financial Plan.
8.12 Insurance Requirements.
(a) Required Coverage. ASCRP, Heavenly Resort Properties, Heavenly
Valley, TSI and Cecil's Market, Inc. shall maintain or cause to be maintained
and keep in force, at no cost to the Agency, the following insurance applicable
to the Project at all times prior to the issuance of a Certificate of Completion
by the Agency, or if Certificates of Completion are issued for each Phase, until
a Certificate of Completion has been issued for each Phase:
(1) Worker's Compensation insurance, including Employer's Liability
coverage, with limits not less than $1,000,000 each accident, if such insurance
is required by law.
(2)Comprehensive General Liability insurance with limits not less than
$2,000,000 each occurrence combined single limit for Bodily Injury and Property
Damage, including coverages for Contractual Liability, Personal Injury,
Broadform Property Damage, Products and Completed Operations.
(3) Comprehensive Automobile Liability insurance with limits not less
than $1,000,000 each occurrence combined single limit for Bodily Injury and
Property Damage, including coverages for owned, non-owned and hired vehicles, as
applicable; provided, however, that if the Developers do not own or lease
vehicles for purposes of this Agreement, then no automobile insurance shall be
required.
(4) Property insurance covering the Project covering all risks of loss
including earthquake (but only if it is commercially available at a reasonable
price and with a reasonable deductible, which the Parties acknowledge is not
available as of the date of the execution of this Agreement) and flood if the
Development Site is in a FEMA designated flood zone, for 100% of the replacement
value, with deductible not exceeding $50,000, and prior to the issuance of a
Certificate of Completion, naming the Agency as a Loss Payee, as its interest
may appear.
(b) Contractor's Insurance. ASCRP, Heavenly Resort Properties,
Heavenly Valley, TSI and Cecil's Market, Inc. shall each cause any general
contractor working on the Project under direct contract with the applicable
Developer to maintain insurance of the types and in at least the minimum amounts
described in subsections (a)(l), (a)(2), and (a)(3) above, and shall require
that such insurance shall meet all of the general requirements of subsection (c)
below. Each Developer shall require its contractor to require that
subcontractors working on the Project under direct contract with the contractor
maintain the insurance described in subsections (a)(1), (a)(2) and (a)(3) above;
provided that subcontractors with subcontracts under $250,000 which do not
involve a significant risk of bodily injury or property damage shall be
permitted to maintain insurance with limits of $500,000.
(c) Other Insurance Provisions. The general liability policies carried
by each Developer are to contain, or be endorsed to contain, the following
provisions and each of the Developers shall use its reasonable efforts to cause
the general liability and automobile policies carried by the contractor (which
in turn shall cause its subcontractors policies to contain), or be endorsed to
contain, the following provisions:
(1) The Agency, its elected or appointed officials, employees, and
agents are covered as insureds with respect to liability arising out of
automobiles owned, leased, hired or borrowed by each Developer, its contractors
or subcontractors, respectively, and with respect to liability arising out of
work or operations performed including materials, parts or equipment furnished
in connection with such work or operations.
(2) For any claims related to the Project, the Agency insurance
coverage shall be primary insurance as respects to the Agency, its officers,
officials and employees. Any insurance or self-insurance maintained by the
Agency, its officers, officials and employees shall be excess of the insurance
and shall not contribute to it.
(3) The insurance provided by this policy shall not be suspended,
voided, canceled, reduced in coverage or in limits except after thirty days
written notice has been provided to the Agency.
(4) The Worker's Compensation insurance required above shall also
contain language through which the insurance company agrees to waive all rights
of subrogation against the Agency, its elected or appointed officials, officers,
agents, employees for losses paid under the terms of this policy which arise
from the work performed by each Developer for the Agency.
(d) Acceptability of Insurers. Insurance is to be placed with insurers
with a current Best's rating of no less than A.VII.
(e) Verification of Coverage. Each Developer shall use reasonable
efforts to furnish the Agency with original certificates and amendatory
endorsements effecting coverage required by this clause. All certificates and
endorsements are to be received and approved by the Agency before work
commences.
8.13 Hazardous Materials.
(a) Certain Covenants and Agreements. ASCRP, Heavenly Resort
Properties, Heavenly Valley, TSI and Cecil's Market, Inc. hereby each covenant
and agree that:
(1) They shall not knowingly permit the Project or any portion thereof
to be a site for the use, generation, treatment, manufacture, storage, disposal
or transportation of Hazardous Materials or otherwise knowingly permit the
presence of Hazardous Materials in, on or under the Project;
(2) They shall keep and maintain the Project and each portion thereof
in compliance with, and shall not cause or permit the Project or any portion
thereof to be in violation of, any Hazardous Materials Laws;
(3) Upon receiving actual knowledge of the same they shall immediately
advise the Agency in writing of: (A) any and all enforcement, cleanup, removal
or other governmental or regulatory actions instituted, completed or threatened
against any of the Developers or the Project pursuant to any applicable
Hazardous Materials Laws; (B) any and all claims made or threatened by any third
party against any Developer or the Project relating to damage, contribution,
cost recovery, compensation, loss or injury resulting from any Hazardous
Materials (the matters set forth in the foregoing clause (A) and this clause (B)
are hereinafter referred to as "Hazardous Materials Claims"); (C) the presence
of any Hazardous Materials in, on or under the Project; or (D) their discovery
of any occurrence or condition on any real property adjoining or in the vicinity
of the Project classified as "borderzone property" under the provisions of
California Health and Safety Code, Sections 25220 et seq., or any regulation
adopted in accordance therewith, or to be otherwise subject to any restrictions
on the ownership, occupancy, transferability or use of the Project under any
Hazardous Materials Laws. The Agency shall have the right to join and
participate in, as a party if it so elects, any legal proceedings or actions
initiated in connection with any Hazardous Materials Claims and to have its
reasonable attorney's fees in connection therewith paid by the Developer or
Developers that are a party to any such proceeding or action.
(4) Without the Agency's prior written consent, which shall not be
unreasonably withheld, ASCRP, Heavenly Resort Properties, Heavenly Valley, TSI
and Cecil's Market, Inc. shall not take any remedial action in response to the
presence of any Hazardous Materials on under, or about the Project (other than
in emergency situations or as required by governmental agencies having
jurisdiction), nor enter into any settlement agreement, consent decree or other
compromise in respect to any Hazardous Materials Claims.
(b) Indemnity. Without limiting the generality of the indemnification
set forth in Section 10.04 below, ASCRP, Heavenly Resort Properties, Heavenly
Valley, TSI and Cecil's Market, Inc. hereby agree to indemnify, protect, hold
harmless and defend (by counsel reasonably satisfactory to the Agency) the
Agency, its boardmembers, officers, agents and employees from and against any
and all claims, losses, damages, liabilities, fines, penalties, charges,
administrative and judicial proceedings and orders, judgements, remedial action
requirements; enforcement actions of any kind, and all costs and expenses
incurred in connection therewith (including, but not limited to, attorney's fees
and expenses), arising directly or indirectly, in whole or in part, out of: (1)
the failure of the Developers or any other person or entity to comply with any
Hazardous Materials Law relating in any way whatsoever to the handling,
treatment, presence, removal, storage, decontamination, cleanup, transportation
or disposal of Hazardous Materials into, on, under or from the Project; (2) the
presence in, on or under the Project of any Hazardous Materials or any releases
or discharges of any Hazardous Materials into, on, under or from the Project
that are brought to the Project or released or discharged at the Project after
the Close of Escrow; or (3) any activity carried on or undertaken on or off the
Project, after the Close of Escrow, and whether by the Developers or any
successor in title or any employees, agents, contractors or subcontractors of
the Developers or any successor in title, or any third persons at any time
occupying or present on the Project after Close of Escrow, in connection with
the handling, treatment, removal, storage, decontamination, cleanup, transport
or disposal of any Hazardous Materials at any time located or present on or
under the Project. The foregoing indemnity shall further apply to any
contamination of any property or natural resources arising in connection with
the generation, use, handling, treatment, storage, transport or disposal of any
such Hazardous Materials by any of the Developers or their officer, directors,
employees or agents occurring after the Close of Escrow, and irrespective of
whether any of such activities were or will be undertaken in accordance with
Hazardous Materials Laws. The provisions of this subsection shall survive
expiration of the Term or other termination of this Agreement, and shall remain
in full force and effect. Each of ASCRP, Heavenly Resort Properties, Heavenly
Valley, TSI and Cecil's Market, Inc. indemnification herein shall be limited to
the Project Component each entity is responsible for herein and each Developer's
own actions.
8.14 Non-Discrimination. The Developers covenant by and for themselves
and their successors and assigns that there shall be no discrimination against
or segregation of a person or of a group of persons on account of race, color,
religion, creed, sex, sexual orientation, marital status, ancestry or national
origin in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Development Site, nor shall the Developers or any person
claiming under or through the Developers establish or permit any such practice
or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees
or vendees in the Development Site.
8.15 Mitigation Monitoring Plan. The Developers shall comply with the
mitigation monitoring plan incorporated in the EIR/EIS and adopted by the Agency
concurrently with its approval of this Agreement as that program may be amended
from time to time.
8.16 Use of Paul Kennedy Steakhouse Site. During construction of Phase
1, Cecil's Market, Inc. shall be entitled to use the Paul Kennedy Steakhouse
Site for retail uses. Cecil's Market, Inc. may also sublet the Paul Kennedy
Steakhouse Site to another party to this Agreement provided the Agency approves
the sublease and the sublease contains provisions acceptable to the Agency
waiving relocation and goodwill benefits upon Agency acquisition of the Paul
Kennedy Steakhouse Site for Phase 2.
8.17 Right of Entry for Parking Garage Site. During the year 2000
building season Heavenly Resort Properties, Heavenly Valley and TSI shall have
the right, at their sole risk and expense, to enter the Parking Garage Site for
the use as a construction staging area provided that Heavenly Resort Properties,
Heavenly Valley and TSI (i) provide reasonable written notice to the Agency and
the City of such contemplated entry; and (ii) indemnify and hold the Agency and
the City harmless from and against all liability, loss, damage, costs or
expenses (including reasonable attorneys' fees and court costs) arising from or
as a result of the death or any person or any accident, injury, loss or damage
whatsoever caused to any person or to the property which shall occur on or
adjacent to the Parking Garage Site and which shall be directly or indirectly
caused by any acts done on the Parking Garage Site or any errors or omissions of
Heavenly Resort Properties, Heavenly Valley or TSI or their agents, servants,
employees or contractors in the course of using the Parking Garage Site (except
that caused by the intentional misconduct or negligence of the Agency or the
City). Any damage or injury to the Parking Garage Site resulting from Heavenly
Resort Properties', Heavenly Valley's or TSI's entry under this Section 8.17
shall be promptly repaired by Heavenly Resort Properties, Heavenly Valley and
TSI at Heavenly Resort Properties', Heavenly Valley's and TSI's sole cost and
expense. In the event Heavenly Resort Properties, Heavenly Valley and/or TSI
fail to promptly repair any such damage, the Agency and the City may do so at
Heavenly Resort Properties', Heavenly Valley's and TSI's expense.
8.18 Public Art Plan. Upon commencement of construction, the Agency
shall prepare, with the Developers approval, a request for proposal to artists
for installation of a major art piece at Park Avenue and Highway 50. Upon
receipt of proposals, the proposals shall be submitted to an Art Jury composed
of six members. Three members shall be appointed by the Developers, by mutual
agreement among the Developers. Three members shall be appointed by the Agency.
The Art Jury shall select a proposal for the public art piece.
ARTICLE 9. CONSTRUCTION
OF THE PUBLIC IMPROVEMENTS
9.01 Construction of the Public Improvements. Within thirty (30) days
of conveyance of the Phase 1 Property to the Developers, the Agency shall
commence construction of the public improvements to be constructed as part of
Phase 1, including the realignment of Park Avenue and shall diligently prosecute
the same to completion; provided, however, the Agency or the City shall not
commence construction of the Parking Garage until the 2001 building season and
only then if the conditions to sale of the Parking Revenue Bonds have been met
as set forth in Section 2.03 above. The Agency and the City shall complete
construction of the Phase 1 Public Improvements within 24 months of commencement
of construction, provided, however if the Agency or the City is to construct the
Parking Garage pursuant to Section 2.03, the Parking Garage shall be ready for
occupancy within 9 months of commencement of constructions, although additional
construction may be required after occupancy. The specific schedule of
completion of the various components of the Public Improvements shall be as set
forth in the Schedule of Performance. The Agency and the Developers shall
coordinate construction schedules to insure that neither party's construction
activities interfere with the other party's.
Within thirty (30) days of conveyance of the Phase 2 Property to ASCRP,
the Agency shall commence construction of the Phase 2 Public Improvements,
including the Intermodal Transit Facility, and shall diligently prosecute the
same to completion. The Agency and the City shall complete construction of the
Phase 2 Public Improvements within 24 months of commencement of construction of
the Phase 2 Public Improvements. The Agency and ASCRP shall coordinate
construction schedules to insure that neither party's construction activities
interfere with the other party's.
The Agency shall diligently prosecute or cause to be prosecuted to
completion the construction of each Phase of the Public Improvements and the
Parking Garage. The Agency shall construct or cause to be constructed each Phase
of the Public Improvements substantially in accordance with the final
construction plans for the Public Improvements and the terms and conditions of
all governmental approvals. The Agency shall consult with the Developers prior
to making any material changes in the construction plans for the Public
Improvements.
9.02 Progress Reports. Until such time as the Public Improvements are
complete, the Agency shall provide the Developers with periodic progress
reports, as reasonably requested in writing by the Developers, regarding the
status of the construction of the Public Improvements.
9.03 Mitigation Monitoring Plan. The Agency shall comply with the
mitigation monitoring plan incorporated in the EIR/EIS and adopted by the Agency
concurrently with its approval of this Agreement as that program may be amended
from time to time.
9.04 Right to Access to Site. The Agency and or the City shall have
the right, at its sole risk and expense, to enter the Development Site for the
purposes of the construction, reconstruction, maintenance, repair or services of
any of the proposed Public Improvements to be located on the Development Site
provided that the Agency and/or the City (i) provide reasonable prior written
notice to the Developers of such contemplated entry and improvements; (ii)
coordinates the construction of such improvements with the Developers'
construction of the Project so as to minimize any additional cost or delay to
the Developers in connection therewith; and (iii) indemnifies and holds the
Developers harmless from and against all liability, loss, damage, costs or
expense (including reasonable attorneys' fees and court costs) arising from or
as a result of the death of any person or any accident, injury, loss or damage
whatsoever caused to any person or to the property of any person which shall
occur on or adjacent to the Development Site and which shall be directly or
indirectly caused by any acts done on the Site by the Agency and/or the City or
any errors or omissions of the Agency and/or the City or their agents, servants,
employees or contractors in the course of performing the obligations of the
Agency and the City under this Agreement (except that caused by the intentional
misconduct or negligence of the Developers). Any damage or injury to the
Development Site resulting from the Agency's or the City's entry under this
Section 9.04 shall be promptly repaired by the Agency or the City at the
Agency's or City's sole cost and expense. In the event the Agency or the City
fails to promptly repair any such damage, the Developers may do so at the
Agency's or City's sole cost and expense.
9.05 Mello-Roos District.
(a) Prior to conveyance of the Phase I Property, Agency will cause to
be formed, and the Developers will facilitate the formation of, a community
facilities district pursuant to the Mello-Roos Community Facilities Act
(California Government Code Section 5334 and following) (the "Mello-Roos
District") to encompass the Phase 1 Property which will levy a Mello-Roos
Special Tax in accordance with this Section 9.05.
(b) Prior to conveyance of the Phase 2 Property, Agency will take such
steps as are necessary to annex the Phase 2 Property to the Mello-Roos
District..
(c) The Mello-Roos Special Tax will not be levied upon the Quarter
Ownership Units which are being held in inventory pending initial sale to third
party purchasers; provided, however, the Mello-Roos Special Tax shall be levied
upon any unsold Quarter Ownership Units which remain unsold four (4) years after
the date construction commences on each Phase.
(d) The amount and components of the Mello-Roos Special Tax shall be
as set forth in the Mello-Roos Rate and Method attached hereto as Exhibit K;
provided, however, the Developers shall not be obligated to accept title to the
Phase 1 Property subject to the Mello-Roos Special Tax if the total amount of
the assessment exceeds Five Million Dollars ($5,000,000) in Mello-Roos Bond
Proceeds plus the option for the Agency to levy an additional Mello-Roos Special
Tax in an amount not to exceed Two Million Dollars ($2,000,000) in Mello-Roos
Bond Proceeds if either of the following occur: (i) Phase 2 is not constructed,
or (ii) at the time the Agency issues long-term bonds to pay off the BANS, the
debt coverage ratio on the bonds is less than 1.25. The Agency shall use its
best efforts to obtain the consent of Tahoe Crescent Partners in the Mello-Roos
District. If the TCP Parcel is included in the Mello-Roos District, its
allocation shall be included in the portion of the Mello-Roos Special Tax
allocated to the retail portions of the Project. Prior to the annexation of the
Phase 2 Development Site to the Mello-Roos District, the full amount of the
Mello-Roos Special Tax shall attach to the Phase 2 Development Site.
(e)The Mello-Roos Special Tax shall be allocated among the project
components as follows prior to the commencement of construction of Phase 2:
Grand Summit Hotel and Annex
(excluding retail space) 60%
Gondola 20%
Retail portion 20%
The Mello-Roos Special Tax shall be allocated among the project
components as follows after commencement of construction of Phase 2 and
annexation of Phase 2 to the Mello-Roos District:
Grand Summit Hotel and Annex
(exclusive of Retail Space) 30%
Lake Tahoe Inn Site 30%
Gondola 20%
Retail portion 20%
(f) The Mello-Roos Bonds shall be issued in the time set forth in the
Schedule of Performance provided the following conditions are met:
(1) There exists no Developer's Default under the Agreement and there
is no default under any other agreement to which the Developers are a party
related to the Project.
(2) The Developers have provided to the Agency financial disclosure
information necessary for the sale of the Mello-Roos Bonds and such disclosure
satisfies the Agency's underwriters.
(3) There is pending litigation, suit, action or proceeding before any
court or administrative agency affecting the Developers or the Project, that
would, if adversely determined, adversely affect the Developers or the Project
or the Developers ability to perform their obligations under this Agreement or
to develop and operate the Project.
(4) The Grand Summit Hotel, the Grand Summit Annex, the Gondola and
the retail space in the Grand Summit are under construction.
(5) No Bankruptcy/Dissolution Event shall have occurred with respect
to any of the Developers.
(6) The conditions set forth in the Financial Plan are satisfied.
(g) The Developers and Heavenly Resort Properties in particular shall
have no liability for the failure of Quarter Owners to pay the Mello-Roos
Special Tax; provided, however, that this provision does not alter the liability
of individual Quarter Owners and of the Association for any failure to pay the
Mello-Roos Special Tax; and provided further, the Developers agree to collect
the first year's Mello-Roos Special Tax from the Quarter Owners at the time the
Developers close escrow on each Quarter Ownership interest and to direct any
escrow holders to pay such amounts to the Agency immediately upon close of each
escrow;
(h) The Mello-Roos Proceeds shall be used exclusively for the Public
Improvements (including property acquisition), payment of the Developer's
obligations to fund Public Art and the Developer's contribution to public
circulation areas owned by the City.
9.06 Hazardous Materials.
(a) Certain Covenants and Agreements. The Agency and the City hereby
covenant and agree that:
(1) They shall not knowingly permit the Parking Garage or any portion
thereof to be a site for the use, generation, treatment, manufacture, storage,
disposal or transportation of Hazardous Materials or otherwise knowingly permit
the presence of Hazardous Materials in, on or under the Parking Garage;
(2) They shall keep and maintain the Parking Garage and each portion
thereof in compliance with, and shall not cause or permit the Parking Garage or
any portion thereof to be in violation of, any Hazardous Materials Laws;
(3) Upon receiving actual knowledge of the same they shall immediately
advise the Developers in writing of: (A) any and all enforcement, cleanup,
removal or other governmental or regulatory actions instituted, completed or
threatened against the Agency or the City related to the Parking Garage pursuant
to any applicable Hazardous Materials Laws; (B) any and all claims made or
threatened by any third party against the Agency or the City related to the
Parking Garage relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from any Hazardous Materials (the matters set forth in
the foregoing clause (A) and this clause (B) are hereinafter referred to as
"Hazardous Materials Claims"); (C) the presence of any Hazardous Materials in,
on or under the Parking Garage; or (D) their discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the Parking
Garage classified as "borderzone property" under the provisions of California
Health and Safety Code, Sections 25220 et seq., or any regulation adopted in
accordance therewith, or to be otherwise subject to any restrictions on the
ownership, occupancy, transferability or use of the Parking Garage under any
Hazardous Materials Laws. The Developers shall have the right to join and
participate in, as a party if they so elect, any legal proceedings or actions
initiated in connection with any Hazardous Materials Claims and to have their
reasonable attorney's fees in connection therewith paid by the Agency and/or the
City.
(4) Without the Developers' prior written consent, which shall not be
unreasonably withheld, the Agency and the City shall not take any remedial
action in response to the presence of any Hazardous Materials on, under, or
about the Parking Garage (other than in emergency situations or as required by
governmental agencies having jurisdiction), nor enter into any settlement
agreement, consent decree, or other compromise in respect to any Hazardous
Materials Claims.
(b) Indemnity. Without limiting the general indemnification set forth
in Section 10.04 below, the Agency and the City hereby agree to indemnify,
protect, hold harmless and defend (by counsel reasonably satisfactory to the
Developers) the Developers, their boardmembers, officers, agents and employees
from and against any and all claims, losses, damages, liabilities, fines,
penalties, charges, administrative and judicial proceedings and orders,
judgements, remedial action requirements, enforcement actions of any kind, and
all costs and expenses incurred in connection therewith (including, but not
limited to, attorney's fees and expenses), arising directly or indirectly, in
whole or in part, out of: (1) the failure of the Agency or any other person or
entity to comply with any Hazardous Materials Law relating in any way whatsoever
to the handling, treatment, presence, removal, storage, decontamination,
cleanup, transportation or disposal of Hazardous Materials into, on, under or
from the Parking Garage; (2) the presence in, on or under the Parking Garage of
any Hazardous Materials or any releases or discharges of any Hazardous Materials
into, on, under or from the Parking Garage; or (3) any activity carried on or
undertaken on or off the Parking Garage and whether by the Agency or the City or
any successor in title or any employees, agents, contractors or subcontractors
of the Agency or the City or any successor in title, or any third persons at any
time occupying or present on the Parking Garage, in connection with the
handling, treatment, removal, storage, decontamination, cleanup, transport or
disposal of any Hazardous Materials at any time located or present on or under
the Parking Garage. The foregoing indemnity shall further apply to any
contamination of any property or natural resources arising in connection with
the generation, use, handling, treatment, storage, transport or disposal of any
such Hazardous Materials by the Agency or the City or their officers, directors,
employees or agents, and irrespective of whether any of such activities were or
will be undertaken in accordance with Hazardous Materials Laws. The provisions
of this subsection shall survive expiration of the Term or other termination of
this Agreement, and shall remain in full force and effect.
ARTICLE 10. OBLIGATIONS WHICH
CONTINUE THROUGH AND BEYOND
THE COMPLETION OF CONSTRUCTION
10.01 Maintenance. The Developers hereby agree that, prior to
completion of any phase of the Project, the portions of the Development Site
undergoing construction shall be maintained in a neat and orderly condition to
the extent practicable and in accordance with industry health and safety
standards, and that, once the Project or any Phase thereof is completed the
Project shall be well maintained as to both external and internal appearance of
the buildings, the common areas, and the parking areas. The Developers shall
maintain or cause to be maintained the Project in good repair and working order,
and in a neat, clean and orderly condition, including the walkways, driveways,
parking areas and landscaping, and from time to time make all necessary and
proper repairs, renewals, and replacements. In the event that there arises at
any time prior to the expiration of the term of the Redevelopment Plan a
condition in contravention of the above maintenance standard, then the Agency
shall notify the Developers in writing of such condition, giving the Developers
thirty (30) days from receipt of such notice to commence and thereafter
diligently to proceed to cure said condition. In the event the Developers fail
to cure or commence to cure the condition within the time allowed, the Agency
shall have the right to perform all acts necessary to cure such a condition. or
to take other recourse at law or equity the Agency may then have and to receive
from the Developers, the Agency's cost in taking such action. The parties hereto
further mutually understand and agree that the rights conferred upon the Agency
expressly include the right to enforce or establish a lien or other encumbrance
against any of the parcels comprising the Development Site not complying with
this Agreement, including without limitation parcels subdivided after the date
of this Agreement but such lien shall be subject to previously recorded liens
and encumbrances. The foregoing provisions shall be a covenant running with the
land until expiration of the term of this Agreement, enforceable by the Agency,
its successors and assigns.
The Agency and/or the City hereby agree that, prior to completion of
the Parking Garage, the portions of the Development Site undergoing construction
shall be maintained in a neat and orderly condition to the extent practicable
and in accordance with industry health and safety standards, and that, once the
Parking Garage is completed the Parking Garage shall be well maintained as to
both external and internal appearance of the buildings and the common areas. In
the event the Agency and the City grant to Heavenly Resort Properties and
Heavenly Valley a right of entry to the Parking Garage Site in order to use the
Parking Garage site for a construction staging area, Heavenly Resort Properties
and Heavenly Valley shall assume the Agency's and City's maintenance obligations
with regards to the Parking Garage during the term of any such right of entry.
The Agency and the City shall maintain or cause to be maintained the Parking
Garage in good repair and working order, and in a neat, clean and orderly
condition, including the walkways, driveways, parking areas and landscaping, and
from time to time make all necessary and proper repairs, renewals, and
replacements. In the event that there arises at any time prior to the expiration
of the term of the Redevelopment Plan a condition in contravention of the above
maintenance standard, then the Developers shall notify the Agency and the City
in writing of such condition, giving the Agency and the City thirty (30) days
from receipt of such notice to commence and thereafter diligently to proceed to
cure said condition. In the event the Agency and/or the City fail to cure or
commence to cure the condition within the time allowed, the Developers shall
have the right to perform all acts necessary to cure such a condition, or to
take other recourse at law or equity the Developers may then have and to receive
from the Agency and the City, the Developers' cost in taking such action. The
parties hereto further mutually understand and agree that the rights conferred
upon the Developers expressly include the right to attach the revenues from the
Parking Garage provided such right shall be subordinate to the lien on the
revenues for the Parking Revenue Bonds.
10.02 Childcare Obligations. The Developers recognize the importance
of childcare to South Lake Tahoe. In order to assure adequate childcare for
employees of the Developers, Heavenly Valley agrees that it will make its
childcare facility currently operated at Heavenly Ski Resort available, on a
space available basis, to employees of the Developers at the applicable rate.
10.03 Mechanics' Liens. The Developers shall indemnify the Agency and
the City and hold the Agency and City harmless against and defend the Agency and
the City in any proceeding related to any mechanic's lien, stop notice or other
claim brought by a subcontractor, laborer or material supplier who alleges
having supplied labor or materials in the course of the construction of the
portions of the Project construction of which the Developer is responsible. This
indemnity obligation shall survive the issuance of a Certificate of Completion
by the Agency and the termination of this Agreement.
10.04 Developers to Indemnify Agency. The Developers shall indemnify,
defend, and hold the Agency and the City, their directors, officers, employees,
agents, and their successors and assigns harmless against all claims for bodily
injury, death or property damage which arise out of or in connection with entry
onto, ownership of, occupancy in, or construction on the Development Site by the
Developers or their contractors, subcontractors, agents, employees or tenants.
This indemnity obligation shall not extend to any claim arising solely from the
Agency's or the City's gross negligence or the Agency's or City's failure to
perform its obligations under this Agreement, and shall survive both the
issuance of a Certificate of Completion by the Agency and termination of this
Agreement. In addition to the above indemnity, Heavenly Resort Properties shall
indemnify the Agency, the City and their directors, officers, employees, agents
and successors and assigns against any claims that may arise as a result of
Heavenly Resort Properties preselling quarter-share interests in the Grand
Summit Hotel, including, but not limited to, any claims of inverse condemnation
or claims from prospective purchasers.
10.05 Agency To Indemnify Developers. The Agency shall indemnify,
defend and hold the Developers and each of them and their directors, officers,
employees, agents, and their successors and assigns harmless against all claims
for bodily injury, death or property damage which arise out of or in connection
with entry onto, ownership Of occupancy in, or construction on the Development
Site by the Agency or its contractors, subcontractors, agents, employees or
tenants. This indemnity obligation shall not extend to any claim arising solely
from a Developer's gross negligence or a Developer's failure to perform its
obligations under this Agreement, and shall survive both the issuance of a
Certificate of Completion by the Agency and termination of this Agreement.
10.06 Non-Discrimination. The Developers covenant by and for
themselves and their successors and assigns that there shall be no
discrimination against or segregation of a person or of a group of persons on
account of race, color, religion, creed, sex, sexual orientation, marital
status, ancestry or national origin in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Development Site by the Developers, nor
shall the Developers or any person claiming under or through the Developers
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, subleases or vendees of the Development Site.
10.07 Mandatory Language in All Subsequent Deeds Leases and Contracts.
All deeds, leases or contracts entered into by the Developers on or after the
date of execution of this Agreement as to any portion of the Development Site
shall contain the following language:
(a) In Deeds:
"Grantee herein covenants by and for itself its successors and assigns
that there shall be no discrimination against or segregation of a person or of a
group of persons on account of race, color, religion, creed, sex, sexual
orientation, marital status, ancestry or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the property herein
conveyed nor shall the grantee or any person claiming under or through the
grantee establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, subleases or vendees in the property herein
conveyed. The foregoing covenant shall run with the land."
(b) In Leases:
"The lessee herein covenants by and for the lessee and lessee's heirs,
personal representatives and assigns and all persons claiming under the lessee
or through the lessee that his lease is made subject to the condition that there
shall be no discrimination against or segregation of any person or of a group of
persons on account of race, color, religion, creed, sex, sexual orientation,
marital status, ancestry or national origin in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the land herein leased nor
shall the lessee or any person claiming under or through the lessee establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants,
lessees, subleases, subtenants, or vendees in the land herein leased."
(c) In Contracts:
"There shall be no discrimination against or segregation of any person
or group of persons on account of race, color, religion, creed, sex, sexual
orientation, marital status, ancestry or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the property nor
shall the transferee or any person claiming under or through the transferee
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, subleases, or vendees of the land."
10.08 Employment Opportunity. During the operation of the Project,
there shall be no discrimination by the Developers on the basis of race, color,
creed, religion, sex, sexual orientation, marital status, national origin,
ancestry, or handicap in the hiring, firing, promoting, or demoting of any
person engaged in the operation of the Development. To the extent practicable,
preference for employment shall be given to persons residing in the Project
Area.
10.09 Owner Participation. Pursuant to the Agency's rules governing
re-entry preferences for businesses displaced within the Project Area (the
"Participation Rules"), the Developers shall give reasonable preferences (over
other potential tenants or lessees) in the leasing and renting of the Project to
business occupants who were displaced from their place of businesses as a result
of the Project.
10.10 Lift Ticket Sales Within City. The Agency acknowledges that
Heavenly Ski Resort's historic lift ticket sales occur beyond the City limits.
Lift ticket sales have not been subject to tax within the jurisdictions where
the sale of Heavenly lift tickets occurs. In consideration of offering lift
ticket sales within the City limits, the Agency and the City covenant and agree
that the sale of lift tickets within the Redevelopment Project Area shall not be
subject to any City imposed tax or assessment for so long as the Agency has
long-term debt related to the Project outstanding without the consent of
Heavenly Valley, which may be withheld for any reason whatsoever. Upon repayment
of any long term debt associated with the Development, the Agency and the City
may, subject to compliance with normal procedures for imposing taxes, impose a
lift ticket tax without Heavenly Valley's consent.
10.11 Marketing of Quarter Share Intervals. Heavenly Resort
Properties, shall use its best efforts in the marketing and sale of the Quarter
Ownership Units and the rental of the Units to achieve the revenues set forth in
the Financial Plan. Developers agree that any marketing outside the
redevelopment project area shall comply with all applicable regulations, rules
and ordinances. This Section shall not in any way limit the right of Heavenly
Resort Properties to exercise its Reasonable Discretion in connection with
marketing and sales decisions.
10.12 Compliance with Permits. The Developers shall operate the
Project in compliance with any and all permits issued for the Project, at all
times.
10.13 EIR/EIS Reimbursement by Agency. The Agency shall reimburse the
Developers for the Developers' actual expenses related to the preparation of the
EIR/EIS up to an amount of $297,000 as and when Excess Revenues exist; provided,
however, in any single year the Developers shall not receive more than $100,000
in Excess Revenues.
10.14 Parking Garage Operations. The Agency or the City shall operate
the Parking Garage in accordance with the Parking Management Agreement.
10.15 Continuing Disclosure. The Developers shall provide the Agency
with information necessary for the Agency to comply with the continuing
disclosure requirements of the BANS and to refinance all BANS with long-term
debt.
10.16 Ice Rink Operations. Upon completion of construction of Phase 1,
TSI shall be responsible for the operation of the ice rink located on Lot 6. The
ice rink shall operate as an ice rink during the winter season and as a public
plaza and performing arts space during the summer season. TSI cannot change the
use of the Ice Rink without the Agency's consent.
10.17 Retail Operations. Upon completion of construction of Phase 1,
the Developers shall not change the mix of retail tenants or the type of retail
uses in the Project without the Agency's consent. Approval of changes to the mix
or type of retail uses shall be in the Agency's Reasonable Discretion.
10.18 Agency Use of BANS Proceeds, Parking Garage Revenue Bond
Proceeds and Mello-Roos Bond Proceeds. So long as no Developer Event of Default
has occurred, the Agency shall only use the BANS Proceeds, Parking Garage
Revenue Bond Proceeds and Mello-Roos Bond Proceeds for the uses set forth in
this Agreement and such other uses as the Developers may approve.
ARTICLE 11. ASSIGNMENTS AND TRANSFERS
11.01 Definitions. As used in this Article 11, the term "Transfer"
means:
(a) Any total or partial sale, assignment or conveyance, or any trust
or power, or any transfer in any other mode or form, of or with respect to this
Agreement or of the Project or any part thereof or any interest therein or any
contract or agreement to do any of the same excluding any sale of the Quarter
Ownership Units; or
(b) Any sale, assignment or conveyance, or any trust or power, or any
transfer in any other mode or form, of or with respect to a controlling interest
in Developers or any contract or agreement to do any of the same; or
(c) Any merger, consolidation, sale or lease of all or substantially
all of the assets of a Developer; or
(d) The leasing of part or all of the Development Site or the
improvements thereon other than the leasing of retail space at the Development
Site in accordance with the approved Leasing Plan.
11.02 Purpose of Restrictions on Transfer. This Agreement is entered
into solely for the purpose of development and operation of the Project and its
subsequent use in accordance with the terms hereof. The Developers recognize
that the qualifications and identity of Developers are of particular concern to
the Agency, in view of:
(a) The importance of the redevelopment of the Development Site to the
general welfare of the community; and
(b) The land acquisition assistance and other public aids that have
been made available by law and by the government for the purpose of making such
redevelopment possible; and
(c) The reliance by the Agency upon the unique qualifications and
ability of the Developers to serve as the catalyst for development of the
Development Site and upon the continuing interest which the Developers will have
in the Development Site to assure the quality of the use, operation and
maintenance deemed critical by the Agency in the development of the Development
Site; and
(d) The fact that a change in ownership or control of the owner of the
Development Site, or of a substantial part thereof, or any other act or
transaction involving or resulting in a significant change in ownership or with
respect to the identity of the parties in control of the Developers or the
degree thereof is for practical purposes a transfer or disposition of the
Development Site; and
(e) The fact that the Development Site is not to be acquired or used
for speculation, but only for development and operation by the Developers in
accordance with the Agreement; and
(f) The importance to the Agency and the community of the standards of
use, operation and maintenance of the Development Site.
The Developers further recognize that it is because of such
qualifications and identity that the Agency is entering into this Agreement with
the Developers and that Transfers are permitted only as provided in this
Agreement.
11.03 Prohibited Transfers. The limitations on Transfers set forth in
this Section shall apply until a Certificate of Completion is issued for each
Phase of the Project. Except as expressly permitted in this Agreement, the
Developers represent and agree that the Developers have not made or created, and
will not make or create or suffer to be made or created, any Transfer either
voluntarily or by operation of law without the prior written approval of the
Agency which approval shall not be unreasonably withheld.
Any Transfer made in contravention of this Section 11.03 shall be void
and shall be deemed to be a default under this Agreement whether or not the
Developers knew of or participated in such Transfer.
11.04 Permitted Transfers. Notwithstanding the provisions of Section
11.03, the following Transfers shall be permitted and are hereby approved by the
Agency, subject to satisfaction of the requirements of Section 11.05:
(a) Any Transfer creating a Security Financing Interest.
(b) Any Transfer directly resulting from the foreclosure of a Security
Financing Interest or the granting of a deed in lieu of foreclosure of a
Security Financing Interest or as otherwise permitted under Article 13; or
(c) Any Transfer solely and directly resulting from the death or
incapacity of an individual.
(d) The Transfer of 65,500 square feet of commercial space in the
Grand Summit Resort Hotel to TSI.
(e) Any transfer by ASCRP, Heavenly Resort Properties, Heavenly Valley
or TSI, to another wholly-owned subsidiary of the transferring Developer made
for the purpose of facilitating financing, licensing, or other requirements that
will not have an adverse impact on the Redevelopment Plan or this Agreement.
(f) Any transfer of the Lake Tahoe Inn Site, provided the Agency has
approved the Transferee, the Transferee has demonstrated the financial capacity
to complete the development of the Lake Tahoe Inn Site in accordance with this
Agreement, the Transferee has demonstrated experience operating a resort complex
such as that proposed for the Lake Tahoe Inn Site, and the Transferee has
assumed all of the Developer's obligations with respect to the development of
the Lake Tahoe Inn Site.
11.05 Effectuation of Certain Permitted Transfers. No Transfer of this
Agreement permitted pursuant to Section 11.04 (other than a Transfer pursuant to
a Security Financing Interest under Section 11.04(a) or (b)) or Section 11.06
shall be effective unless, at the time of the Transfer, the person or entity to
which such Transfer is made, by an instrument in writing reasonably satisfactory
to the Agency and in form recordable among the land records, shall expressly
assume the obligations of the transferring Developer under this Agreement and
agree to be subject to the conditions and restrictions to which the Developers
are subject under this Agreement, to the fullest extent that such obligations
are applicable to the particular portion of or interest in the Development
conveyed in such Transfer. Anything to the contrary notwithstanding, the holder
of a Security Financing Interest whose interest shall have been acquired by,
through or under a Security Financing Interest or shall have been derived
immediately from any holder thereof shall not be required to give to Agency such
written assumption until such holder or other person is in possession of the
Property or entitled to possession thereof pursuant to enforcement of the
Security Financing Interest.
In the absence of specific written agreement by the Agency, no such
Transfer pursuant to Section 11.04, assignment or approval by the Agency other
than transfers pursuant to Sections 11.04(d), (e) or (f), shall be deemed to
relieve the Developers or any other party from any obligations under this
Agreement.
11.06 Other Transfers with Agency Consent. The Agency may, in its sole
discretion, approve in writing other Transfers as requested by the Developers.
In connection with such request, there shall be submitted to the Agency for
review all instruments and other legal documents proposed to effect any such
Transfer. If a requested Transfer is approved by the Agency such approval shall
be indicated to the Developers in writing. Such approval shall be granted or
denied by the Agency within thirty (30) days of receipt by the Agency of
Developers' request for approval of a Transfer.
ARTICLE 12. REMEDIES
12.01 Application of Remedies. This Article 12 shall govern the
Parties' remedies for breach or failure under this Agreement.
12.02 Consensual Termination. Any of the following events constitutes
a basis for a party to terminate this Agreement without fault of the other:
(a) The Developers, despite good faith and diligent efforts, fail to
submit satisfactory evidence of the availability of finances to the Agency
within the time set forth in Section 2.01(f).
(b) The Agency, despite good faith and diligent efforts, is unable to
cause the issuance of the BANS.
(c) The Agency, the City or the County fails to adopt resolutions of
necessity authorizing the filing of an eminent domain action to acquire any of
the Development Site that the Agency is unable to acquire voluntarily.
12.03 Effect of Consensual Termination. After a termination pursuant
to Section 12.02, the Developers shall be solely responsible for any costs
incurred by the Developers in performing the terms and conditions of this
Agreement, and neither party shall have any rights against or liability to the
other except for those provisions of this Agreement that recite that they
survive termination of this Agreement.
12.04 Agency and City Performance.
(a) Except as to events constituting a basis for termination under
Section 12.02, the breach by the Agency or the City of any material provision of
this Agreement if uncured after expiration of applicable cure periods, shall
constitute an "Agency Event of Default."
(b) Upon the breach of any material provision of this Agreement by the
Agency or the City, the Developers or any one of them shall first notify the
Agency or the City in writing of its purported breach or failure, and the Agency
or the City shall have thirty (30) days from receipt of such notice to cure such
breach or failure except if by the nature of such default more than thirty (30)
days is needed to cure such breach or failure, in which event, the Agency or the
City shall not be in default if such cure is commenced within thirty (30) days
and diligently prosecuted to completion in all events within one hundred eighty
(180) days thereafter. If the Agency or the City does not cure within such
period, then the event shall constitute an "Agency Event of Default" and the
Developers shall be entitled to any rights afforded them in law or in equity.
Prior to the Developers declaring a Agency Event of Default, the Developers
shall provide the Agency or the City with a notice of their intention to declare
an Agency Event of Default and shall schedule a meet and confer meeting no
earlier than seven (7) or later than ten (10) days from the date of receipt of
said notice. The Parties shall meet and confer in good faith for a period of ten
(10) days in a process that may include other persons or agencies, for the
purpose of attempting to resolve any dispute before the declaration of an Event
of Default. If the Parties are unable to resolve the dispute, the Developers
shall be entitled to declare an Agency Event of Default and shall be entitled to
exercise any rights afforded it in law and equity.
12.05 Developer Performance.
(a) Except as to events constituting a basis for termination under
Section 12.02, each of the following events, if uncured after expiration of the
applicable cure period, shall constitute a "Developer's Default":
(1) The Developers or any one of the Developers do not attempt
diligently and in good faith to cause satisfaction of all conditions in Article
6.
(2) Heavenly Resort Properties fails to deliver performance and
payment bonds on or before April 28, 2000.
(3) The Developers or any one of the Developers fails to acquire
either the Phase 1 Development Site or the Phase 2 Development Site from the
Agency despite the Agency's fulfillment of all conditions precedent to the
transfer of the Development Site.
(4) ASCRP fails to give the Agency a notice of intent to construct
Phase 2 on or before September 1, 2001.
(5) ASCRP fails to give the Agency a Notice of intent to construct
Phase 2 on or before September 1, 2002
(6) The Developers or any one of them fails to construct the Project
in the manner and by the deadline set forth in Article 8.
(7)The Developers or any one of them fails to construct the Project in
the manner and by the deadline set forth in Article 8.
(8) The Developers or any one of them completes a Transfer except as
permitted under Article 11.
(9) The Developers or any one of them breaches any other material
provision of this Agreement.
(10)A Bankruptcy/Dissolution Event occurs with respect to any
Developer.
(b) Upon the happening of any event described in Section 12.05(a);
except for 12.05(a)(2) and 12.05(a)(4), the Agency shall first notify each of
the Developers in writing of the purported breach or failure, and the defaulting
Developer shall have thirty (30) days from receipt of such notice to cure such
breach or failure except if by the nature of such default more than thirty (30)
days is needed to cure such breach or failure, in which event, the defaulting
Developer shall not be in default if such cure is commenced within thirty (30)
days and diligently prosecuted to completion within one hundred eighty (180)
days of receipt of notice. If the defaulting Developer does not cure within such
period, a nondefaulting Developer may cure such breach or failure within sixty
(60) days of receipt of the notice of default. If the defaulting Developer or a
non-defaulting Developer does not cure within such period, then the event shall
constitute a "Developer Event of Default." If the defaulting Developer or a
non-defaulting Developer does not cure within the period set forth above the
Agency shall be entitled to exercise any rights and remedies permitted by law,
including, but not limited to terminating this Agreement and including those
rights set forth in Section 12.06 below. Prior to the Agency declaring a
Developer Event of Default, the Agency shall provide the Developers with a
notice of its intention to declare a Developer Event of Default and shall
schedule a meet and confer meeting no earlier than seven (7) or later than ten
(10) days from the date of receipt of said notice. The Parties shall meet and
confer in good faith for a period of ten (10) days in a process that may include
other persons or agencies, for the purpose of attempting to resolve any dispute
before the declaration of an Event of Default. If the Parties are unable to
resolve the dispute, the Agency shall be entitled to declare a Developer Event
of Default and shall be entitled to exercise any rights afforded it in law and
equity. Upon the happening of the event described in Section 12.05(a)(2) the
Agency shall be entitled to immediately draw on the letter of credit pursuant to
Section 2.01(b). Upon the happening of the event described in Section
12.05(a)(4), if ASCRP posts a letter of credit in the amount of $1,663,000 as
set forth in Section 3.01(e), the Agency shall not be entitled to declare an
Event of Default and this Agreement shall continue in full force and effect.
If the Agency terminates this Agreement pursuant to this Section 12.05
in addition to any other remedies the Agency may have, the Agency shall be
entitled to all plans, permits and approvals obtained or prepared by the
breaching Developer in connection with the Project and all applications for
permits and approvals not yet obtained but needed in connection with the Project
to the extent then prepared. In addition, if applicable, the breaching
Developers shall assign to the Agency any pre-sale subscription agreements the
breaching Developers have entered into for the sale of the Quarter Ownership
Units. Agency shall be entitled, pursuant to this Section 12.05 to assign such
permits, plans and approvals and the presale subscription agreements to a new
developer. Any such reuse will be at sole risk of such new developer and without
liability or legal exposure to the Developers or the Developers' architect, and
any use by such new developer or any sale of such materials to any such third
party shall be conditioned upon such new developer's and such third party's
agreement to indemnify and hold harmless the Developers and the Developers'
architect against any loss, cost, damage or expense incurred by such third party
in connection with its use of such materials.
12.06 Right of Reverter.
(a) In the event that, following Close of Escrow on Phase 1 or Phase
2, this Agreement is terminated pursuant to Section 12.05 and such termination
occurs prior to issuance of a Certificate of Completion for any Phase of the
Project the Agency shall have the right subject to the provisions of Article 13
below, to re-enter and take possession of those portions of the Development Site
for which a Certificate of Completion has not been issued and all improvements
thereon and to revest in the Agency the estate of the Developers in the
Development Site or such portion thereof, provided, however, if the Agency
terminates this Agreement with respect to only some of the Developers and this
Agreement remains in effect with respect to other Developers, the Agency can
only exercise the right of reverter granted hereto with respect to property
conveyed to the Developers subject to termination of this Agreement.
(b)Upon revesting in the Agency of title to the Development Site, or
portion thereof, the Agency shall promptly use its best efforts to resell it
consistent with its obligations under state law; provided, however, in order to
encourage Heavenly Valley to build the Gondola, the Agency shall not sell or
attempt to develop the Gondola Site for a period of four years after a Developer
Event of Default has occurred with respect to Heavenly Valley, during which time
Heavenly Valley may continue its efforts to develop the Gondola. Upon any sale
or contract for development the proceeds shall be applied as follows:
(1) First, to reimburse the holder of any Security Financing Interest
of such portion or portions of the Development Site, in the manner set forth in
Section 13.04(a) through (e) hereof.
(2) Second, to the Agency for any costs it reasonably incurs in
acquiring, managing or selling the Development Site or portion thereof (after
exercising its right of reverter), including but not limited to amounts to
discharge or prevent liens or encumbrances arising from any acts or omissions of
the Developers;
(3) Third, in the event that the portion of the Development Site was
controlled by a defaulting Developer, to reimburse the Agency for damages to
which it is entitled under this Agreement by reason of the Developer Event of
Default;
(4) Fourth, to the affected Developer up to the sum of the amount of
the purchase price paid to the Agency by the Developer pursuant to Section 7.02
for the portion of the Development Site which has reverted to the Agency as well
as the amount of the purchase price paid by the Developer for the Lake Tahoe Inn
leasehold if the title to the Lake Tahoe Inn Site revests in the Agency and the
reasonable cost of the improvements the Developer has placed on such portion of
the Development Site and such other reasonable costs Developer has incurred
directly in connection with acquisition and development of the Development Site
and any other portions of the Development Site reclaimed hereunder; and
(5) Fifth, the remaining balance to the Agency.
(c) Upon request from the Developers, the Agency shall enter into
Attornment and Nondisturbance Agreements with the Developers' tenants providing
that in the event the Agency exercises its right of reverter, the tenants'
leases will remain in full force and effect.
12.07 Survival. Upon termination of this Agreement under this Article
12, the following provisions of this Agreement shall survive: the
indemnification obligations in Sections 5.01(c), 5.02(c), 8.13, 10.04, and
10.05. This Section 12.07 exists for reference purposes only, and does not alter
the scope or nature of the surviving provisions.
12.08 Modification of Terms and Conditions and Extensions of Time. The
Agency's Executive Director with the approval of the Agency Chair and the Agency
Vice-Chair, may agree to modification of the development schedule set forth in
the Schedule of Performance as long as such modifications do not alter the
Financial Plan. The Agency may delegate the approval of waivers or modifications
as appropriate. No waiver of any default or breach by the Developers or the
Agency or the City, as applicable, hereunder shall be implied from any omission
by the Agency, the City or the Developers, as applicable, to take action on
account of such default if such default persists or is repeated, and no express
waiver shall affect any default other than the default specified in the waiver,
and such waiver shall be operative only for the time and to the extent therein
stated. Waivers of any covenant, term, or condition contained herein shall not
be construed as a waiver of any subsequent breach of the same covenant, term, or
condition. The consent or approval by the Agency and the City to or of any act
by the Developers requiring further consent or approval shall not be deemed to
waive or render unnecessary the consent or approval to or of any subsequent
similar act. The exercise of any right, power, or remedy shall in no event
constitute a cure or a waiver of any default under this Agreement, nor shall it
invalidate any act done pursuant to notice of default, or prejudice the Agency
or the City in the exercise of any right, power, or remedy hereunder, unless in
the exercise of any such right, power, or remedy all obligations of the
Developers to Agency and the City are paid and discharged in full.
12.09 Scope of Termination Rights. Notwithstanding anything to the
contrary contained herein, (a) no Developer's Default with respect to any Phase
2 obligations shall trigger rights of the Agency under this Article 12 with
respect to any Phase 1 Projects; and (b) with respect to any Developer's Default
which occurs after the conveyance of any portion of the Development Site to the
Developers and cure of the default requires possession of the portion of the
Development Site owned by the defaulting Developer, any nondefaulting Developer
shall not be obligated to cure the default, and any remedies exercised by the
Agency shall only be enforced against the defaulting Developer and, in the case
of either (a) or (b), this Agreement shall continue in full force and effect
with respect to the nondefaulting Developers.
ARTICLE 13. SECURITY FINANCING
AND RIGHTS OF HOLDERS
13.01 No Encumbrances Except for Development Purposes. Notwithstanding
any other provision of this Agreement, mortgages and deeds of trust, or any
other reasonable method of security, are permitted to be placed upon the
Development Site prior to issuance of a Certificate of Completion but only for
the purpose of securing loans pursuant to the evidence of financing approved by
the Agency pursuant to Section 2.01(f) above. Mortgages, deeds of trust, or
other reasonable security instruments securing loans approved by the Agency
pursuant to Section 2.01(f) are each referred to as a "Security Financing
Interest." The words "mortgage" and "deed of trust" as used in this Agreement
include all other appropriate modes of financing real estate acquisition,
construction, and land development, including any such other modes used pursuant
to the approved evidence of financing pursuant to Section 2.01(f).
13.02 Holder Not Obligated to Construct. The holder of any Security
Financing Interest (a "Holder") authorized by this Agreement is not obligated to
construct or complete any improvements or to guarantee such construction or
completion; nor shall any covenant or any other provision in this Agreement or
in conveyances from the Agency to the Developers evidencing the realty
comprising the Development Site or any part thereof be construed so to obligate
such Holder. Any Holder which succeeds to the interest of a Developer through
sale, foreclosure or deed and assignment in lieu thereof occurring following
issuance of a Certificate of Completion for the Project shall not be deemed to
be the successor in interest to the Developer with respect to any obligation or
liability of the Developer under this Agreement. However, nothing in this
Agreement shall be deemed to permit or authorize any such Holder to devote the
Development Site or any portion thereof to any uses, or to construct any
improvements thereon, other than those uses or improvements provided for or
authorized by this Agreement.
13.03 Notice of Default and Right to Cure. Whenever the Agency
pursuant to its rights set forth in Article 12 of this Agreement delivers any
notice or demand to the Developers (or any of them), the Agency shall at the
same time deliver to each Holder of record a copy of such notice or demand;
provided, however, that the Agency shall have no liability to any Holder for any
failure by the Agency to provide notice to such Holder (provided further that
the Agency shall not be entitled to exercise its rights under Section 12.06
hereof until such notice has been delivered and the cure period set forth in the
following sentence has expired). Each such Holder shall (insofar as the rights
of the Agency are concerned) have the right, but not the obligation, at its
option, within the same time period as is afforded Developers plus the greater
of ninety (90) days or such longer period as reasonably may be necessary for the
Holder to obtain the right of possession through foreclosure, deed-in-lieu or
appointment of a receiver provided that within such ninety (90)-day period the
Holder commences and thereafter proceeds in good faith to obtain the right of
possession and to cure or remedy or commence to cure or remedy any such default
or breach. Nothing contained in this Agreement shall be deemed to permit or
authorize such Holder to undertake or continue the construction or completion of
the Project (beyond the extent necessary to conserve or protect the Project or
construction already made) without first having expressly assumed in writing the
obligations of the Developer responsible for the Project to complete, in the
manner provided in this Agreement, the Phase of the Project to which the lien or
title of such Holder relates. Any such Holder properly completing such Phase of
the Project pursuant to this paragraph shall be entitled, upon written request
made to the Agency, to a Certificate of Completion from the Agency.
In the event of the declaration by the Agency of a Developer's
Default, the Agency shall schedule a meeting with any Holder not earlier than
seven (7) or later than fifteen (15) days from the date of declaration of a
Developer's Default. The Agency and the Holders of interests relating to any
portion of the Development Site subject to the Developer's Default shall meet
and confer in good faith to plan the disposition and continued construction of
the Project subject to the Developer's Default.
13.04 Failure of Holder to Complete Improvements. In any case where
six months after exercising its option to construct a Project under this
Agreement, the Holder of record, has not proceeded diligently with construction,
the Agency shall be afforded the same rights against the holder as it would have
against the Developers to the extent of the obligations of the Developers which
accrue during the period the Holder has had possession of the Development Site.
In the alternative, the Agency may purchase the mortgage or deed of trust by
payment to the Holder of the amount of the unpaid mortgage or deed of trust
debt, including principal and interest and all other sums due to such Holder and
secured by the mortgage or deed of trust. If the ownership of the Development
Site or any part thereof has vested in the Holder, the Agency, if it so desires,
shall be entitled to a conveyance from the Holder to the Agency upon payment to
the Holder of an amount equal to the sum of the following:
(a) The unpaid mortgage or deed of trust debt at the time title became
vested in the Holder (less all appropriate credits, including those resulting
from collection and application of rentals and other income derived by the
lender from operations conducted on the Property or other income received during
foreclosure proceedings);
(b) All expenses with respect to foreclosure;
(c) The net expenses, if any (exclusive of general overhead), incurred
by the Holder as a direct result of the subsequent management of the Property or
part thereof;
(d) The costs of any improvements made by such Holder; and
(e) An amount equivalent to the interest that would have accrued on
the aggregate of such amounts had all such amounts become part of the mortgage
or deed of trust debt and such debt had continued in existence to the date of
payment by the Agency.
13.05 Right of Agency to Cure. In the event of a default or breach by
the Developers of a Security Financing Interest prior to the completion of any
Phase of the Project, and the Holder of such Security Financing Interest has not
waived or exercised its option to complete the Development called for on the
Development Site, the Agency may cure the default, prior to the completion of
any foreclosure. In such event the Agency shall be entitled to reimbursement
from whichever of the Developers is the party to the defaulted loan of all costs
and expenses incurred by the Agency in curing the default.
13.06 Right of Agency to Satisfy Other Liens. After the conveyance of
title to the Development Site or any portion thereof and after the Developers
have a reasonable time following notice from Agency to challenge, cure or
satisfy any liens or encumbrances on the Development Site or any portion thereof
which are not otherwise permitted under this Agreement, the Agency shall have
the right to satisfy any such liens or encumbrances and receive immediate
reimbursement of the cost incurred in satisfying such liens or encumbrances from
the Developers; provided, however, that nothing in this Agreement shall require
the Developers to pay or make provision for the payment of any tax, assessment,
lien or charge so long as the Developers in good faith shall contest the
validity or amount therein and so long as such delay in payment shall not
subject the Development Site or any portion thereof to forfeiture or sale.
13.07 Additional Mortgagee Protections. The Agency agrees to make
amendments to this Agreement or enter into an intercreditor agreement as
reasonably requested by any Holder to provide any reasonably required assurances
to such Holder and the Agency's Executive Director, with the approval of the
Agency Chair and the Agency Vice-Chair, is hereby authorized to enter into such
amendments or intercreditor agreements without further action by the Agency
provided such amendments do not adversely impact the Financial Plan.
ARTICLE 14. REPRESENTATIONS AND WARRANTIES
14.01 Representations and Warranties of Developers. Each of the
entities comprising the Developers represents and warrants to the Agency as of
the Effective Date, as follows:
(a) Organization. Each of the entities comprising the Developers is
duly organized, validly existing and in good standing under the laws of the
State of California, with full power and authority to conduct its business as
presently conducted and to execute, deliver and perform its obligations under
this Agreement. John and Camilla Jovicich are husband and wife and have full
power and authority to transact their portion of the Project.
(b) Authorization. The Developers have taken all necessary action to
authorize their execution, delivery and, subject to any conditions set forth in
this Agreement, performance of the Agreement. Upon the execution of this
Agreement, this Agreement shall constitute a legal, valid and binding obligation
of the Developers, enforceable against them in accordance with its terms.
(c) No Conflict. The execution, delivery and performance of this
Agreement and Related Agreements by the Developers does not and will not
conflict with, or constitute a violation or breach of, or constitute a default
under (i) the charter or incorporation documents of the Developers, (ii) any
applicable law, rule or regulation binding upon or applicable to the Developers,
or (iii) any material agreements to which the Developers are a party.
(d) No Litigation. Unless otherwise disclosed in writing to the Agency
prior to the Effective Date, there is no existing or, to the Developers'
knowledge, pending or threatened litigation, suit, action or proceeding before
any court or administrative agency affecting the Developers or the Project that
would, if adversely determined, adversely affect the Developers or the Property
or the Developers' ability to perform their obligations under this Agreement or
to develop and operate the Project.
14.02 Representations and Warranties of Agency. The Agency represents
and warrants to the Developers, as of the Effective Date, as follows:
(a) Organization. The Agency is a redevelopment agency, duly
organized, validly existing and in good standing under the laws of the State of
California, with full power and authority to conduct its business as presently
conducted and to execute, deliver and perform its obligations under this
Agreement and Other Agreements.
(b) Authorization. The Agency has taken all necessary action to
authorize its execution, delivery and, subject to any conditions set forth in
this Agreement, performance of this Agreement. Upon the execution of this
Agreement, this Agreement shall constitute a legal, valid and binding obligation
of the Agency, enforceable against it in accordance with its terms.
(c) No Conflict. The execution, delivery and performance of this
Agreement by the Agency does not and will not conflict with, or constitute a
violation or breach of, or constitute a default under (a) the charter documents
of the Agency, (b) any applicable law, rule or regulation binding upon or
applicable to the Agency, or (c) any material agreements to which the Agency is
a party.
(d) No Litigation. Unless otherwise disclosed in writing to the
Developers prior to the Effective Date, there is no existing or, to the Agency's
knowledge, pending or threatened litigation, suit, action or proceeding before
any court or administrative agency affecting the Agency or the Property that
would, if adversely determined, adversely affect the Agency's ability to perform
its obligations under this Agreement.
ARTICLE 15. GENERAL PROVISIONS
15.01 Notices Demands and Communications. Formal notices, demands, and
communications between the Agency and the Developers shall be sufficiently given
if, in writing and delivered personally, or dispatched by certified mail, return
receipt requested, or by facsimile transmission or reputable overnight delivery
service with a receipt showing date of delivery, to the principal offices of the
Agency and the Developers as follows:
The Developers: American Skiing Company Resort Properties
P.O. Box 450
Bethel, Maine 04217
Attention: Chris Howard, Executive Vice President/CAO
Fax Number: (207) 824-5158
Heavenly Resort Properties, LLC
P.O. Box 2180
Stateline, Nevada 89449
Attention: Stanley W. Hansen, Senior Vice President,
Real Estate
Gary Casteel
Trans-Sierra Investments
581 Green Acres Drive
Gardnerville, Nevada 89410
Heavenly Valley, LP
P.O. Box 2180
Stateline, Nevada 89449
Attention: Dennis Harmon, Managing Director
Fax Number: (702) 586-7056
John and Camilla Jovicich
4020 Lake Tahoe Boulevard
South Lake Tahoe, California 96150
Fax Number: (530) 544-7637
With an information
copy to: Lewis S. Feldman, Esq.
Feldman, Shaw & DeVore
2311 Lake Tahoe Boulevard
South Lake Tahoe, California 96150
Fax Number: (530) 541-5242
Agency: South Tahoe Redevelopment Agency
1052 Tata Lane
South Lake Tahoe, California 96150
Attention: Executive Director
Fax Number: (530) 542-4054
With an information
copy to: Goldfarb & Lipman
One Montgomery Street
Telesis Tower, 23rd Floor
San Francisco, California 94104
Attention: Karen M. Tiedemann
Fax Number: (415) 788-0999
City: City of South Lake Tahoe
1052 Tata Lane
South Lake Tahoe, California 96150
Attention: City Manager
Fax Number: (530) 542-4054
With an information
copy to: Catherine De Camillo
City Attorney
City of South Lake Tahoe
1052 Tata Lane
South Lake Tahoe, California 96150
Fax Number: (530) 542-4054
Such written notices, demands and communications may be sent in the
same manner to such other addresses as the affected Party may from time to time
designate as provided in this Section 15.01. Delivery shall be deemed to have
occurred at the time indicated on the receipt for delivery or refusal of
delivery.
15.02 Non-Liability of Officials Employees and Agents. No member,
official, employee or agent of the Agency or the City shall be personally liable
to the Developers or any successor in interest, in the event of an Agency Event
of Default.
15.03 Time of the Essence. Time is of the essence in this Agreement.
15.04 Inspection of Books and Records. The Agency has the right at all
reasonable times to inspect and copy the books, records and all other
documentation of the Developers pertaining to the Project until one year after
issuance of the bonds refinancing the BANS.
15.05 Title of Parts and Sections. Any titles of the sections or
subsections of this Agreement are inserted for convenience of reference only and
shall be disregarded in interpreting any of its provisions.
15.06 Applicable Law. This Agreement shall be interpreted under the
laws of the State of California.
15.07 Severability. If any term of this Agreement is held in a final
disposition by a court of competent jurisdiction to be invalid, then the
remaining terms shall continue in full force unless the rights and obligations
of the Parties have been materially altered by such holding of invalidity.
15.08 Legal Actions. If any legal action is commenced to interpret or
to enforce the terms of this Agreement or to collect damages as a result of any
breach of this Agreement, then the Party prevailing in any such action shall be
entitled to recover against the Party not prevailing all reasonable attorneys'
fees and costs incurred in such action (and any appeal or subsequent action or
proceeding to enforce any judgment entered pursuant to an action on this
Agreement).
15.09 Binding Upon Successors; Covenants to Run with Land. This
Agreement shall be binding upon and inure to the benefit of the heirs,
administrators, executors, successors in interest, and assigns of each of the
Parties. However, there shall be no Transfer by the Developers except as
permitted in Article 11. Any reference in this Agreement to a specifically named
Party shall be deemed to apply to any successor, heir, administrator, executor,
successor, or assign of such Party who has acquired an interest in compliance
with the terms of this Agreement or under law.
15.10 Parties Not Co-Venturers. Nothing in this Agreement is intended
to or does establish the Parties as partners, co-venturers, or principal and
agent with one another.
15.11 Provisions Not Merged With Grant Deed. None of the provisions of
this Agreement shall be merged by the Grant Deed or any other instrument
transferring title to any portion of the Property, and neither the Grant Deed
nor any other instrument transferring title to any portion of the Property shall
affect this Agreement.
15.12 Entire Understanding of the Parties. This Agreement (including
the exhibits to this Agreement) constitutes the entire understanding and
agreement of the Parties with respect to the conveyance of the Property and the
development of the Development.
15.13 Approvals.
(a) Whenever this Agreement calls for Agency approval, consent, or
waiver, the written approval, consent, or waiver of the Agency's Executive
Director or his or her designee shall constitute the approval, consent, or
waiver of the Agency, without further authorization required from the Agency
Board. The Agency hereby authorizes the Agency's Executive Director or his or
her designee to deliver such approvals or consents as are required by this
Agreement; provided, however, any changes to the proposed financing for the
Project must be approved by the Agency Board. Any such action shall be in
writing.
(b) All approvals under this Agreement shall be subject to a
reasonableness standard, except where a sole discretion standard is specifically
provided.
15.14 Amendments. The Parties can amend this Agreement only by means
of a writing signed by both Parties.
15.15 Force Majeure. In addition to specific provisions of this
Agreement, performance by either party shall not be deemed to be in default and
an extension of time shall be granted to any affected time period or date
provided in this Agreement where delays or defaults are due to war;
insurrection; strikes; lock-outs; riots; floods; earthquakes; inclement weather;
fires; quarantine restrictions; freight embargoes; lack of transportation; the
commencement of litigation challenging the validity or legality of any action
taken by Agency or City in connection with the Project or this Agreement; or
court order; the failure of a governmental entity or agency other than the
Agency and the City to take an action required in order to implement the
Development within a reasonable time; or any other causes (other than lack of
funds of the Developers or financing) beyond the control or without the fault of
the party claiming an extension of time to perform. An extension of time for any
cause will be deemed granted if the party claiming such extension sends notice
to the other party within sixty (60) days of the event causing the need for an
extension. Times of performance under this Agreement may also be extended by
written agreement of the Agency and the Developers.
15.16 Estoppel Certificates. Within ten (10) days following the
request of either party (the "Requesting Party") the other party shall execute
and deliver a statement concerning the status of the performance by the
Requesting Party under this Agreement, of conditions of payments due and made
and such other relevant matters as the Requesting Party may request. Such
statement may be relied upon by the Requesting Party, its members, lenders, and
prospective members, transferees and grantees.
15.17 Multiple Originals Counterparts. This Agreement may be executed
in multiple originals, each of which is deemed to be an original, and may be
signed in counterparts.
AS OF THE DATE FIRST WRITTEN ABOVE, the Parties evidence their
agreement to the terms of this Agreement by signing below:
Approved As To Form: AGENCY:
By: /s/ illegible SOUTH TAHOE REDEVELOPMENT AGENCY,
Agency Counsel a public body, corporate and politic
By: illegible
------------------------------------------
Its: /s/ Chairman
----------------------------------------
Dated: 10/28/99
--------------------------------------
Approved As To Form: CITY:
By: /s/ Catherine L. DiCamillo CITY OF SOUTH LAKE TAHOE,
City Attorney a municipal corporation
By: /s/ Judy Brown
------------------------------------------
Its: Mayor
-----------------------------------------
Dated: 10/28/99
--------------------------------------
DEVELOPER:
AMERICAN SKIING COMPANY RESORT PROPERTIES,
a Maine corporation
By: /s/ Leslie B. Otten
------------------------------------------
Its: Chairman
---------------------------------------
Dated: 10/29/99
--------------------------------------
HEAVENLY RESORT PROPERTIES, LLC,
a Nevada limited liability company
By: /s/ Stan Hansen
------------------------------------------
Its: Manager
-----------------------------------------
Dated: 10/28/99
--------------------------------------
HEAVENLY VALLEY, Limited Partnership,
a Nevada limited partnership
By: /s/ Dennis Harmon
------------------------------------------
Its: Managing Director
-----------------------------------------
Dated: 10/28/99
--------------------------------------
TRANS-SIERRA INVESTMENTS,
a Nevada corporation
By: /s/ Gary B. Casteel
------------------------------------------
Its: President
-----------------------------------------
Dated: 10/28/99
--------------------------------------
CECIL'S MARKET, INC.,
a California corporation
By:
------------------------------------------
John Jovicich
Its:-----------------------------------------
Dated: --------------------------------------
Exhibit A
Financial Plan
Exhibit B
Gondola Right-of-Way Legal Description
Exhibit C
Draft Tentative Subdivision Plan
Exhibit D
Project Executive Summary
Exhibit E
Scope of Development
Exhibit F
Site Plan
Exhibit G
Schedule of Performance
Exhibit H
Form of Grant Deed
Exhibit I
Environmental Assessment Reports
and Natural Hazard Disclosure
Exhibit J
Motel Room Retirement Schedule
Exhibit K
Mello-Roos Rate and Method