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HomeMy WebLinkAbout14-010 CC ResolutionRESOLUTION NO. 14 -10 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING THAT CERTAIN AGREEMENT ENTITLED POSSESSION AND USE AGREEMENT BETWEEN THE CITY OF TEMECULA AND MARK MCMILLIN, LLC IN CONNECTION WITH THE MURRIETA CREEK BRIDGE AND OVERLAND DRIVE EXTENSION TO DIAZ ROAD, PROJECT NUMBER PW00 -26 THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Findings. A. The Murrieta Creek Bridge and Overland Drive Extension to Diaz Road, PW00 -26 ( "Project ") is identified in the City's Capital Improvement Program for Fiscal Years 2014 -2018. The Project would extend Overland Drive from Commerce Center Drive to Diaz Road with a bridge over Murrieta Creek. The purpose of the Project is to improve safety and traffic circulation in the area. The City proposes to construct the Project in two phases. The first phase would extend Overland Drive from Commerce Center Drive to Enterprise Circle West ( "Phase I "). The second phase would extend Overland Drive from Enterprise Circle West to Diaz Road with a bridge over Murrieta Creek. On June 11, 2013, the City Council approved funding for the proposed construction of Phase I of the Project as part of its approval of the Capital Improvement Program and Budget. B. The Project would require the acquisition of certain real property interests from six parcels. Phase I of the Project would require the acquisition of an approximate 840 square foot permanent easement and an approximate 2,445 square foot temporary construction easement with a term of 18 months (collectively "subject property interests ") on the real property commonly known as 27511 Commerce Center Drive in the City of Temecula, California, and identified as Riverside County Tax Assessor's Parcel Number 921 - 480 -032 ( "Property ") for public street purposes and all uses necessary or convenient thereto. C. Pursuant to Government Code section 7267.2, on March 22, 2011, the City Council set just compensation for the subject property interests and the Property at the fair market value as determined by the City's independent appraiser based on a February 7, 2011 date of value. The City Council also authorized the Director of Public Works /City Engineer to make offers and negotiate the acquisition of the subject property interests. D. On May 11, 2011, the City sent a written offer to the record owner, Mark McMillin, LLC, a California Limited Liability Company, ( "McMillin ") to purchase the ' subject property interests at the fair market value established by the City's independent appraiser. Resos 14 -10 1 E. The City and McMillin have engaged in good faith negotiations for the City's acquisition of the subject property interests. McMillin has not accepted the City's offer to purchase the subject property interests. McMillin, however, has agreed to grant to the City and its contractors, agents, representatives, employees and others reasonably deemed necessary by the City, the irrevocable right to exclusive possession, use and occupancy of the subject property interests, including, but not limited to, the right to conduct any hazardous materials testing required by the City; the right to remove and dispose of any and all improvements within and or straddling the right of way; and the right to construct Phase I of the Project in the area of the subject property interests in accordance with the attached Possession and Use Agreement. The City believes that any delay in construction of Phase I of the Project is contrary to public interest. F. Pursuant to the Possession and Use Agreement, the City will open an escrow with First American Title Company and deposit the sum of $91,847 ( "Compensation Amount ") for the benefit of McMillin within five business days of the effective date of the Possession and Use Agreement. The Compensation Amount represents the fair market value estimate for the subject property interests as set forth in the City's independent appraisal that used a date of value of February 7, 2011. G. McMillin has informed the City that it wishes to defer the continuance of the good faith negotiations for the City's purchase of the subject property interests until the construction of Phase I of the Project is completed because McMillin wishes to determine whether the construction of the Project results in damages to the remainder parcel. H. Pursuant to the Possession and Use Agreement, the parties have agreed to continue their good faith negotiations after the construction of Phase I is completed. The Possession and Use Agreement also provides that if the parties do not reach a negotiated agreement within 180 days of the completion of construction of Phase I in the area of the subject property interests, the City may commence an eminent domain proceeding. The Possession and Use Agreement acknowledges that the City Council of the City of Temecula, as the City's governing body, has sole discretion to make the findings required by Code of Civil Procedure section 1240.030 for the adoption of a resolution of necessity pursuant to the Eminent Domain Law. It also provides that McMillin may file an inverse condemnation proceeding if the parties do not reach a negotiated agreement and the City does not file an eminent domain proceeding within 360 days of the effective date of the Possession and Use Agreement. The parties have agreed that McMillin would not challenge the City's adoption of a resolution of necessity or the City's right to take the subject property interests and that the only issue in any such eminent domain or inverse condemnation proceeding regarding the subject property interests would be the issue of the amount of just compensation. Pursuant to the Possession and Use Agreement, the City's final offer prior to trial will not be less than the Compensation Amount plus statutory interest and costs authorized by the Eminent Domain Law, Code of Civil Procedure section 1230.010 et seq. Resos 14 -10 2 I. At its meeting of February 27, 2001, the City Council approved the Negative Declaration for Environmental Assessment No. 75 for the temporary low flow crossing at Murrieta Creek and the proposed permanent crossing at Murrieta Creek. J. Further, at its meeting of September 10, 2013, the City Council approved the Mitigated Negative Declaration and Mitigation Monitoring Program for the Murrieta Creek Bridge and Overland Drive Extension, PW00 -26 (SCH No. 2013051091). In approving the Mitigated Negative Declaration and Mitigation Monitoring Program for the Murrieta Creek Bridge and Overland Drive Extension, PW00 -26, the City Council found that based on the record before it (1) the Mitigated Negative Declaration and Mitigation Monitoring Program for the Murrieta Creek Bridge and Overland Drive Extension, PW00 -26 was prepared in compliance with CEQA; (2) there is no substantial evidence that the Project will have a significant effect on the environment that cannot be adequately and feasibly mitigated; and (3) the Mitigated Negative Declaration and Mitigation Monitoring Program for the Murrieta Creek Bridge and Overland Drive Extension, PW00 -26 reflects the independent judgment and analysis of the City Council. On October 29, 2013, the City duly filed a Notice of Determination in connection with the Mitigated Negative Declaration and Mitigation Monitoring Program for the Murrieta Creek Bridge and Overland Drive Extension, PW00 -26 in accordance with CEQA. Section 2. Approval of Possession and Use Agreement. The City Council of the City of Temecula hereby approves that certain agreement entitled "Possession and Use Agreement between the City of Temecula and Mark McMillin, LLC in Connection with the Murrieta Creek Bridge and Overland Drive Extension to Diaz Road (PW00 -26) ", with such changes in the Possession and Use Agreement as may be mutually agreed upon by Mark McMillin, LLC and the City Manager as are in substantial conformance with the form of the Possession and Use Agreement on file in the Office of the City Clerk. The Mayor is hereby authorized to execute the Possession and Use Agreement on behalf of the City. A copy of the final Possession and Use Agreement when executed by the Mayor shall be placed on file in the Office of the City Clerk. This approval of the Possession and Use Agreement is not an announcement of the City's intent to acquire any other real property interests for the Project and does not commit the City to acquire any other real property interests for the Project. Section 3. City Manager's Authority. The City Manager (or his designee), is hereby authorized, on behalf of the City, to take all actions necessary and convenient to carry out and implement the Possession and Use Agreement, and to administer the City's obligations, responsibilities and duties to be performed under the Possession and Use Agreement, including but not limited to, escrow instructions and other similar agreements and documents as contemplated by or described in the Possession and Use Agreement or as necessary and convenient to implement the Possession and Use Agreement and to effectuate the City's use, occupancy and possession of the subject property interests contemplated therein. Section 4. Environmental Analysis. The environmental effects of the acquisition of the real property interests the City needs for the Project, including the Resos 14 -10 3 subject property interests, were studied as an integral part of the Negative Declaration for Environmental Assessment No. 75 approved for the Project. The City further analyzed the environmental effects of the Project in 2013 when it prepared an Initial Study for the Project pursuant to the California Environmental Quality Act ( "CEQA "). Based on the findings contained in the Initial Study, City staff determined that environmental impacts for the Project are less than significant with the mitigation proposed. Accordingly, the City prepared a Mitigated Negative Declaration and Mitigation Monitoring Plan. The Initial Study and Mitigated Negative Declaration were distributed and made available for public review on June 3, 2012 in accordance with CEQA. During the review period, the City received several minor comments that were addressed in the final document. These comments were deemed insignificant to the entire Project. The City Council approved the Mitigated Negative Declaration and Mitigation Monitoring Program for the Murrieta Creek Bridge and Overland Drive Extension, PW00 -26 on September 10, 2013 and duly filed a Notice of Determination on October 29, 2013 in accordance with CEQA. The findings made by the City Council at its meeting on February 27, 2001 in approving the Negative Declaration for Environmental Assessment No. 75 and at its meeting on September 10, 2013 approving the Mitigated Negative Declaration and Mitigation Monitoring Program for the Murrieta Creek Bridge and Overland Drive Extension, PW00 -26 (SCH No. 2013051091) are the appropriate findings for the acquisition and /or use of the subject property interests for the construction of the Project. In connection with the attached Possession and Use Agreement, City staff reviewed all of the environmental documentation prepared in connection with the Project, including, the above - referenced documents and relevant staff reports. Pursuant to the criteria of section 15162 of the CEQA Guidelines and section 21166 of the Public Resources Code, City staff concluded that no substantial changes have occurred in the Project, no substantial changes have occurred in the circumstances under which the Project is undertaken, and that the City has obtained no new information of substantial importance that would require further environmental analysis, including the fact that no mitigation measures previously found not to be feasible would in fact be feasible. These environmental findings are the appropriate findings with respect to the acquisition and /or use of the subject property interests for the construction of the Project. Section 5. Certification. The City Clerk shall certify the adoption of this resolution. Resos 14 -10 4 1 1 PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 11th day of February, 2014. ATTEST: Gwyn R. F16fes, GMC Acting City Clerk [SEAL] Resos 14 -10 4P-irvyann Edwards, Mayor I STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Gwyn R. Flores, CMC, Acting City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 14 -10 was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 11th day of February, 2014, by the following vote: AYES: 5 COUNCIL MEMBERS: Comerchero, Naggar, Roberts, Washington, Edwards NOES: 0 COUNCIL MEMBERS: None ABSENT: 0 COUNCIL MEMBERS: None ABSTAIN: 0 COUNCIL MEMBERS: None Resos 14 -10 6 wyn R. Flores, CMC Acting City Clerk ' Possession and Use Agreement between City of Temecula and Mark McMillin, LLC in Connection with the Murrieta Creek Bridge and Overland Drive Extension to Diaz Road Project (PW00 -26) This Possession and Use Agreement ( "Agreement") is made on February 11, 2014 ("Effective Date ") by and between the City of Temecula, a municipal corporation ("City') and Mark McMillin LLC, a California Limited Liability Company ( "Owner "). The City and Owner are referred to below collectively as the "Parties." RECITALS A. On May 11, 2011, the City made a written offer to Mark McMillin LLC, a California Limited Liability Company, to purchase certain real property interests from the real property commonly known as 27511 Commerce Center Drive in the City of Temecula, and identified as Riverside County Tax Assessor's Parcel Number 921480 -032 (referred to below as the "larger parcel ") in connection with the City's construction of the proposed Murrieta Creek Bridge and Overland Drive Extension to Diaz Road Project (PW00 -26) (referred to below as the "Project "). Mark McMillin LLC, a California Limited Liability Company is the record fee owner of the larger parcel. B. The Project would extend Overland Drive from Commerce Center to Diaz Road with a bridge over Murrieta Creek. The purpose of the Project is to improve safety and traffic circulation in the area. ' C. The City proposes to construct the Project in two phases. The first phase would extend Overland Drive from Commerce Center Drive to Enterprise Circle West (referred to below as "Phase I of the Project "). The second phase would extend Overland Drive from Enterprise Circle West to Diaz Road with a bridge over Murrieta Creek. On June 12, 2012, the City Council approved funding for the proposed construction of Phase I of the Project as part of its approval of the Capital Improvement Program and Budget. D. Specifically, the City seeks to purchase the following real property interests on the larger parcel (these real property interests are referred to below collectively as the "subject property interests ") to construct Phase I of the Project: • An approximate 840 square foot permanent easement for public street purposes and all uses necessary or convenient thereto described on Exhibit "A" labeled "Legal Description Easement for Road Purposes" and depicted on Exhibit `B" labeled "Easement for Road Purposes — Lot 16 ". • An approximate 2,445 square foot temporary construction easement with a term of 18 (eighteen) months to facilitate the construction of Phase I of the Project. The temporary construction easement is described more particularly on Exhibit "A" labeled "Legal Description Temporary Construction Easement" and depicted on Exhibit `B" labeled "Temp. Construction Easement — Lot 16 ". E. The City has extended to Owner a written offer to purchase the subject property interests based on an independent appraisal prepared on behalf of the City by Robert Perdue, MAI and Richard Russell of Perdue and Roth Real Estate Appraisal ( "City's independent appraisal "). The City offered to purchase the subject property interests for the $91,847 fair market value opinion of the City's appraisers based on a date of value of February 7, 2011. This amount does not include compensation for any loss of business goodwill, precondemnation damages, loss of rent or any other claims for just compensation except for the City's appraised fair market value of the subject property interests, including site improvements and severance damages. The City's summary appraisal statement is attached as Exhibit "C" hereto and incorporated herein by this reference. This amount does not include reimbursement for relocation benefits. F. As of the date of this Agreement, the Owner has not accepted the City's offer to purchase the subject property interests. G. The City's position is that any delay in the start of construction of Phase I of the Project is contrary to public interest. H. Accordingly, the parties have agreed to enter into this Agreement to allow the City to proceed with construction of Phase I of the Project and to authorize the City's possession and use of the subject property interests as provided herein. OPERATIVE PROVISIONS Now, therefore, in consideration of the City's payment to Owner as set forth in this ' Agreement and in consideration of the foregoing recitals and mutual promises, covenants and other conditions set forth herein, the City and Owner agree as follows: 1. Right to Possession of Subject Property Interests. a. Owner grants to the City and its contractors, agents, representatives, employees and all others reasonably deemed necessary by the City, the irrevocable right to exclusive possession, use and occupancy of the subject property interests, including but not limited to, the right to conduct any hazardous materials testing required by the City; the right to remove and dispose of any and all improvements within and /or straddling the right of way; and the right to construct Phase I of the Project in the area of the subject property interests. b. The City shall have the right to possess, occupy and use the subject property interests 14 calendar days after it mails written notice to the Owner of the City's intent to possess and use the subject property interests for the construction of Phase I of the Project ( "Commencement Date "). The 14th calendar day after the City mails the written notice to the Owner of the City's intent to possess and use the subject property interests is referred to below as the "Effective Date of Possession." 2. Just Compensation and Appraisal. Owner acknowledges that the City extended to Owner a written offer to purchase the subject property interests for the sum of $91,847 ( "Compensation Amount "), which is the total compensation set forth in the City's independent appraisal. The Parties agree that the deposit of the Compensation Amount into an escrow account pursuant to this Agreement shall be equivalent to a deposit and payment under California Code of Civil Procedure section 1255.010 and that the basis for such deposit and ' -2 ' payment, including but not limited to any appraisal, shall be governed by Code of Civil Procedure section 1255.060. Accordingly, the Parties agree that the Compensation Amount may not be admissible as evidence in any trial on the issue of compensation and further agree that any appraiser who prepared the City's independent appraisal report or any statement concerning the deposit of the Compensation Amount into escrow may not be called to testify at any such trial on the issue of compensation unless the City designates said appraiser as its expert witness. 3. Deposit and Withdrawal of Just Compensation in Escrow. a. The City agrees to open an escrow with First American Title Company ( "Subject Escrow ") in connection with the City's proposed purchase of the subject property interests within five business days of the Effective Date of this Agreement. The City will provide to Owner the escrow number as soon as it is available. The City shall deposit the Compensation Amount into the Subject Escrow within 15 business days of the Effective Date of this Agreement. b. In consideration for Owner's irrevocable grant to the City of possession and use of the subject property interests, the City will consent to the Owner's withdrawal and release of the Compensation Amount from the Subject Escrow as set forth in this Agreement. Owner agrees to provide written notice to the City when it requests the withdrawal of the Compensation Amount from the Subject Escrow. Owner's withdrawal from the Subject Escrow of any portion of the Compensation Amount shall constitute the Owner's waiver, by operation of law, of all claims and defenses in any eminent domain proceeding for the acquisition of the ' subject property interests, except for a claim for greater compensation, consistent with Code of Civil Procedure section 1255.260. The payment and withdrawal from the Subject Escrow of any portion of the Compensation Amount shall be credited to the City in relation to the final compensation amount that the City pays pursuant to any negotiated agreement or settlement between the Parties for the City's acquisition of the subject property interests, or stipulated judgment, award or verdict of just compensation in an eminent domain proceeding filed by the City to acquire the subject property interests. 4. Liens and Encumbrances. Owner represents that title to the approximate 840 square foot permanent easement portion of the subject property interests is free and clear of all liens and encumbrances or that Owner will obtain proper releases from parties that have an interest in the subject property interests before Owner withdraws any portion of the Compensation Amount from the Subject Escrow. If Owner is not able to obtain such releases, Owner will cooperate with the City to obtain through Escrow proper releases from parties that have an interest in the subject property interests. a. Partial Reconveyance or Subordination of Deed(s) of Trust. Owner agrees to obtain a partial reconveyance or subordination of deed(s) of trust from the beneficiary or beneficiaries of any deed(s) of trust recorded against the larger parcel so that the City's interest in the approximate 840 square foot permanent easement is free and clear of any monetary encumbrances. (i) Consents to Possession and Use Agreement by Lessees of Larger Parcel. Owner covenants and agrees that within fifteen (15) business days of the Effective Date -3- of this Agreement, Owner will either (i) warr ant that pursuant to the terms of the leases between Owner and lessees of the larger parcel, the lessees have no interest in the subject property interests or a right to compensation for the subject property interests and in such case Owner will indemnify City up to the amount of Compensation Amount provided by the City pursuant to this Agreement, or (ii) obtain in writing a consent from the lessees of the larger parcel to the City's use and possession of the City's subject property interests in substantially the form attached as Exhibit "D" hereto. 5. Payment of Reasonable Costs of an Independent Anoraisal Pursuant to Code of Civil Procedure section 1263.025. Pursuant to Code of Civil Procedure section 1263.025, the City agrees to pay Owner's reasonable costs, up to $5,000, for an independent appraisal of the subject property interests. By law, an appraiser licensed by the Office of Real Estate Appraisers must prepare the independent appraisal. The City will issue a warrant payable to Mark McMillin LLC for the reasonable costs, up to $5,000, for an independent appraisal within ten calendar days of (i) receipt of an invoice from the appraiser identifying the property that is the subject of the appraisal and the fee charged for the appraisal, or (ii) a declaration by the Owner providing the relevant information under penalty of perjury. The form of the Owner's declaration is attached as Exhibit "E" to this Agreement. 6. Temporary Construction Easement. a. Term. The City's use of the approximate 2,445 square foot temporary construction easement will commence on the Effective Date of Possession as defined above in ' operative provision Lb. The term of the temporary construction easement is for 18 months from the Effective Date of Possession. The temporary construction easement will expire on the earlier of (i) 18 months from the Effective Date of Possession, or (ii) the date on which the City records a Notice of Termination of the temporary construction easement in the Official Records of the County of Riverside and provides written notice to Owner of same if a Grant of Temporary Construction Easement was previously recorded against the larger parcel by the Parties in the Official Records of the County of Riverside. Upon the expiration of the temporary construction easement as provided above, the City agrees to take such actions as reasonably required to evidence and give effect to the extinguishment of the temporary construction easement and the relinquishment of the City's rights and interests in the temporary construction easement pursuant to this Agreement. b. Damage to Improvements in Area of Temporary Construction Easement. The City agrees that any work done in the area comprising the approximate 2,445 square foot temporary construction easement will be performed in a good and workmanlike manner. The City further agrees that it will replace with material of like kind and quality any improvements, landscaping or irrigation located in the area of the approximate 2,445 square foot temporary construction easement damaged in connection with the City's construction of Phase I of the Project. 7. Indemnification. Waiver and Insurance. a. The City, to the maximum extent allowed by law, will indemnify, defend and hold Owner harmless from and against any and all claims, liabilities, damages, losses, costs -4- and expenses of any kind or nature whatsoever (including, without limitation, attorneys' fees and expenses and court costs) suffered, incurred or sustained by Owner as a result of the City's use of the subject property interests for the construction of Phase I of the Project. b. Upon receipt of a written request from Owner, the City will provide Owner with lien waivers following completion of the construction of Phase I of the Project from each and every contractor, subcontractor, supplier, engineer, architect and surveyor who might have lien rights as a result of the City's use and possession of the subject property interests. Such lien waivers will be in the form and substance reasonably satisfactory to Owner and its counsel. To the extent permitted by applicable law, the City hereby indemnifies Owner from and against any claims or demands for payment, or any liens or lien claims made against Owner or the larger parcel as a result of the City's use of the subject property interests for Phase I of the Project. C. Prior to entry onto the subject property interests, the City shall and shall cause the City's contractors or agents constructing Phase I of the Project to procure or maintain a policy of commercial general liability insurance issued by an insurer reasonably satisfactory to the City covering the construction of Phase I of the Project on the subject property interests with a single limit of liability (per occurrence and aggregate) of not less than $1,000,000.00, and to deliver to Owner a certificate of insurance and copy of additional insured endorsement naming Owner as a named additional insured, evidencing that such insurance is in force and effect, and evidencing that Owner has been named as an additional insured under said policy with respect to ' the construction activities on the subject property interests in connection with Phase I of the Project. Such insurance shall be maintained in force throughout the term of this Agreement. 8. Sale or Assignment of Subiect Prooertv Interests. From and after the Effective Date, any sale, assignment, encumbrance or other transfer of all or any portion of the subject property interests shall be subject to this Agreement. Owner agrees that any agreement to sell, assign, encumber or transfer all or any portion of the subject property interests to a third -party will include that such sale, assignment, encumbrance or transfer is subject to this Agreement. Owner agrees that it shall notify the City within 15 business days of any sale, assignment, encumbrance or transfer and confirm that Owner has complied with this Operative Provision 8. 9. Negotiated Acquisition. Owners have informed the City that they wish to defer the continuance of the good faith negotiations for the City's purchase of the subject property interests until the construction of Phase I of the Project is completed because they wish to determine the damages, if any, to the remainder parcel after the construction is completed. The Parties agree and acknowledge, however, that they will negotiate in good faith to reach a negotiated agreement for the City's purchase of the subject property interests prior to the completion of the construction of Phase I of the Project if the Owners determine that they would like to continue the negotiations prior to said completion of construction. If the Parties reach a negotiated agreement for the City's purchase of the subject property interests, the Parties would enter into a Purchase and Sale Agreement or Settlement Agreement to memorialize the terms of said agreement. In such case, the Owner would execute a Grant of Easement granting to the City the approximate 840 square foot permanent easement for public purposes and a Grant of Temporary Construction Easement granting to the City the approximate 2,445 square foot -5- ' temporary construction easement with a term of 18 months in the forms attached hereto as Exhibits "F" and "G ". 10. Eminent Domain. a. The Parties acknowledge that the City is authorized to acquire real property by eminent domain for a public use, including public street purposes and all uses necessary or convenient thereto, pursuant to the authority conferred upon the City of Temecula by California Constitution Article 1, Section 19, California Government Code sections 37350, 37350.5, 37351, 40401 and 40404 and California Code of Civil Procedure section 1230.010 et seq. (Eminent Domain Law). The parties also acknowledge that the Project, including Phase I of the Project, is a public use for which the City has the authority to exercise the power of eminent domain. The parties further acknowledge that the City Council of the City of Temecula, as the City's governing body, has sole discretion to make the findings required by Code of Civil Procedure section 1240.030 for the adoption of a resolution of necessity pursuant to the Eminent Domain Law. (Code of Civil Procedure section 1245.220). If Owner and the City do not reach a negotiated agreement for the City's purchase of the subject property interests, City staff will recommend to the City Council that it consider the adoption of a resolution of necessity authorizing the initiation of eminent domain proceedings to acquire the subject property interests in accordance with the Eminent Domain Law. Under the Eminent Domain Law, the City Council has the exclusive and sole discretion to adopt a resolution of necessity. The adoption of any such resolution of necessity would require the City's compliance with applicable law, including Government Code section 7260 et seq. and the Eminent Domain Law. ' b. This Agreement is made with the understanding that City and Owner will continue to negotiate in good faith to reach an agreement on the City's acquisition of the subject property interests by negotiated acquisition. This Agreement shall continue in effect until either a settlement is reached or a Final Order of Condemnation under section 1268.030 of the California Code of Civil Procedure is entered by the court and recorded by the City. C. The Parties agree and acknowledge that in the event the City and Owner do not reach a negotiated settlement in connection with the City's acquisition of the subject property interests within 180 days of the completion of the construction of the Project in the area of the subject property interests, the City may commence an eminent domain proceeding. Owner reserves all of its rights regarding the payment of just compensation in any such eminent domain proceeding. Owner, however, agrees not to object to the City's filing of any such eminent domain proceeding to acquire the subject property interests by eminent domain. In any such proceeding, Owner will not challenge the City's right to take or assert that the City's use of the subject property interests for the construction of the Project is an unlawful taking. The Owner agrees that the only issue in any such proceeding will be the amount of just compensation that the City will pay for the subject property interests, including, but not limited to any claims for mitigation, costs to cure, precondemnation damages, and the fair market value of the subject property interests. d. If the City fails to file an eminent domain proceeding within 360 days of completion of the construction of the Project in the area of the subject property interests, then Owner shall be entitled to file an inverse condemnation proceeding. City agrees that in any such M inverse condemnation proceeding, the only issue shall be the amount of just compensation owed by the City to Owner and City shall not challenge liability. This provision, however, does not impact the City's rights on the issue of liability for precondemnation damages or to dispute Owner's entitlement to such damages in any such inverse condemnation proceeding. e. The Parties agree that if the City files an eminent domain proceeding to acquire the subject property interests, the City's final offer prior to trial will not be less than the Compensation Amount plus statutory interest and costs authorized by the Eminent Domain Law. The Parties acknowledge that Owner requested this provision as consideration for its grant to the City of the right to possess and use the subject property interests pursuant to the terms of this Agreement. 11. Date of Valuation. The parties agree that in any eminent domain proceeding filed by the City to acquire the subject property interests, the date of valuation for determining the amount of just compensation for the subject property interests would be the date on which the City files the Complaint in Eminent Domain. 12. Interest. If the City files an eminent domain proceeding to acquire the subject property interests, any compensation awarded in an eminent domain proceeding shall draw interest as prescribed by California Code of Civil Procedure section 1268.310, et seq. The Owner would be entitled to receive interest on any sum received as just compensation whether pursuant to this Agreement, a subsequent settlement or court judgment, beginning on the Effective Date of Possession described above in operative provision I.b. and ending on the ' earliest of the dates as provided in Code of Civil Procedure section 1268.320. The Parties, agree and acknowledge, however, that the interest on any portion of the Compensation Amount that is withdrawn by Owner will end on the date on which Owner withdraws such portion of the Compensation Amount from the Subject Escrow because Owner is entitled to use said funds on the date of withdrawal. Interest shall accrue on the Compensation Amount from the date of deposit to the date of withdrawal as prescribed by California Code of Civil Procedure section 1268.310, et seq. 13. Notices. All notices and demands will be given in writing by certified mail, postage prepaid, and return receipt requested or by Federal Express. Notices will be considered given upon the earlier of (a) two business days following deposit in the United States mail, postage prepaid, certified or registered, return receipt requested, or (b) one business day following deposit with Federal Express. The Parties will address such notices as provided below or as may be amended by written notice: City: City of Temecula 41000 Main Street Temecula, California 92590 Attention: Aaron Adams, City Manager Copy to: Richards, Watson & Gershon Attention: Peter M. Thorson, City Attorney 355 South Grand Avenue, 40th Floor Los Angeles, California 90071 -3101 7- Grantor: Mark McMillin LLC 509 Avon Street Anaheim, California 92804 Copy to: Palmieri, Tyler, Wiener, Wilhelm & Waldron LLP Attention: Michael 1. Kehoe 2603 Main Street, # 1300 Irvine, California 92614 14. Miscellaneous. a. Authority to Execute and Bind. Each party represents and warrants that each of the persons executing this Agreement has full and complete legal authority to do so and thereby binds the party to this Agreement. b. Entire Agreement. This Agreement reflects the entire agreement between the City and Owner regarding the City's proposed acquisition of the subject property interests, and shall supersede all prior or contemporaneous oral or written understandings, statements, representations or promises between the City and Owner concerning the matters contained herein. C. Governing Law. This Agreement is deemed to have been prepared by ' each of the Parties hereto, and any uncertainty or ambiguity herein shall not be interpreted against the drafter, but rather, if such uncertainty or ambiguity exists, shall be interpreted according to the applicable rules of interpretation of contracts under the laws of the State of California, and not the substantive law of another state or the United States or federal common law. This Agreement shall be deemed to have been executed and delivered within the State of California, and the rights and obligations of the Parties shall be governed by, and construed and enforced in accordance with the laws of the State of California. d. Legal Representation. The Parties, and each of them, acknowledge that in connection with the negotiation and execution of this Agreement, they have each been represented by independent counsel of their own choosing and the Parties executed the Agreement after review by such independent counsel, or, if they were not so represented, said non - representation is and was the voluntary, intelligent and informed decision and election of any of the Parties not so represented; and, prior to executing this Agreement, each of the Parties has had an adequate opportunity to conduct an independent investigation of all the facts and circumstances with respect to the matters which are the subject of this Agreement. e. Successors in Interest and Assigns. This Agreement will extend to, bind and inure to the benefit of the heirs, devisees, executors, administrators, legal representatives, successors and assigns of the Parties. E Understanding ojAgreement. This Agreement has been negotiated in good faith and each party warrants and represents that in executing this Agreement, it is not -8- trelying on any representation, promise, inducement or statement made in negotiation that is not included in the terms of this Agreement. g. Fees and Costs. Except as set forth in operative provision 5 above, each party shall bear its own costs, including, but not limited to attorney and expert fees, arising out of negotiating this Agreement. This provision does not limit or waive in any way Owner's right to payment of litigation expenses in connection with any eminent domain proceeding brought by the City for the subject property interests to the extent that Owner establishes entitlement as otherwise provided by law to such litigation expenses, including but not limited to attorney's fees, experts' fees, costs and other allowable expenses or in connection with any inverse condemnation proceeding brought by Owner. It also does not impact the City's rights, if any, under Code of Civil Procedure section 1250.410 to present evidence to establish that any defendant in an eminent proceeding filed by the City regarding the subject property interests has not met the criteria for obtaining litigation expenses. h. Partial Invalidity/Severability. Each provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. If any provision of this Agreement or the application of such provision to any person or circumstance is, to any extent, deemed to be invalid or enforceable, the remainder of the Agreement, or the application of such provision to persons or circumstances other than those as to which it is held invalid or enforceable, shall not be affected by such invalidity or unenforceability, unless such provision or such application of such provision is essential to this Agreement. ' i. Amendment to Agreement. This Agreement may only be amended by written agreement, executed by all Parties. j. Counterparts, Facsimile & Electronic Signatures. This Agreement may be executed in whole or in counterparts, which together shall constitute the entire Agreement. Facsimile or electronic signaturestcounterparts to this Agreement shall be effective as if the original signed counterpart were delivered. 0 k. Memorandum of Agreement. The City shall record in the official records of the Riverside County Recorder's Office a Memorandum of this Agreement in the form attached as Exhibit "H" hereto. SIGNATURES ON NEXT PAGE -9- ' Mark McMillin LLC, a California Limited Liability Company Dated:/ 0=1I Approved as to form: PALMTERI, TYLER, WIENER WILHELM & WALDRON LLP ",/ , 01'� Michael I. Keh ' eys for Mark McMillin LLC CITY OF Temecula, a municipal corporation ATTEST: Gwyn R. Flores, Acting City Clerk Approved as to form: RICHARDS, WATSON & GERSHON Peter M. Thorson, City Attomey n -la By: Title: jBy: Maryann Edwards, Mayor