Loading...
HomeMy WebLinkAbout17-17 CC Resolution RESOLUTION NO. 17-17 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF TEMECULA APPROVING THAT CERTAIN AGREEMENT ENTITLED PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS BETWEEN THE CITY OF TEMECULA AND LANCE PETO, TRUSTEE OF THE K. LANCE PETO TRUST DATED 11/25/96 FOR PURCHASE OF 42061 MAIN STREET, TEMECULA (APNS 922-036-039 AND 922-036-040) THE CITY COUNCIL OF THE CITY OF TEMECULA DOES HEREBY RESOLVE AS FOLLOWS: Section 1. Findings. A. The City seeks to purchase in fee the real property commonly known as 42061 Main Street in the City of Temecula, and identified as Riverside County Tax Assessor's Parcel Numbers 922-036-039 and 922-036-040 (Property). The Property is owned by Lance Peto, Trustee of the K. Lance Peto Trust Dated 11/25/96 (Owner). The Property is located between the Temecula Children's Museum owned by the City and the historic Mercantile Building that is part of the Old Town Temecula Theater. The Property is within the historic Old Town Temecula. While the City has no present plans for the development of the Property, the City's acquisition of the Property for a public use enables the City to preserve it as part of the historic Mercantile Building and the historic Old Town. B. The Owner and the City have negotiated the City's purchase of the Property in fee and have reached an agreement, subject to approval by the City Council. C. Pursuant to the Purchase and Sale Agreement (Agreement), the total purchase price that the City will pay to the Owner for the Property is the sum of One Million Four Hundred Fifty Thousand Dollars ($1,450,000) for the fair market value of the Property. The escrow period is 90 calendar days. Pursuant to the Agreement, the City's purchase of the Property is contingent on an appraisal of the fair market value of the Property prepared by an appraiser jointly selected by the parties. D. The Owner has informed the City that the Owner wishes to purchase a replacement property for a tax-deferred exchange under 26 U.S.C. Section 1031. Accordingly, the Agreement provides that the Owner may, at the Owner's sole option, extend the Close of Escrow by an additional 90 calendar days, to provide additional time for the Owner to locate said replacement property. If the Owner exercises the right to extend the Close of Escrow by an additional 90 calendar days, Owner will provide ' written notice to the City and to the Escrow Holder under the Agreement 15 calendar days before the Close of Escrow. Further, in consideration for the option to extend the Close of Escrow by an additional 90 calendar days, Owner agrees that if the Owner Resos 17-17 1 determines to extend the Close of Escrow by an additional 90 calendar days, the Purchase Price will be reduced by Fifty Thousand Dollars ($50,000) to One Million Four Hundred Thousand Dollars ($1,400,000). Section 2. Approval of Purchase and Sale Agreement. The City Council of the City of Temecula hereby approves that certain agreement entitled "Purchase and Sale Agreement and Joint Escrow Instructions Between the City of Temecula and Lance Peto, Trustee of the K. Lance Peto Trust Dated 11/25/96 for Purchase of 42061 Main Street, Temecula (APNS 922-036-039 AND 922-036-040)", with such changes in the Purchase and Sale Agreement as may be mutually agreed upon by the Owner and the City Manager as are in substantial conformance with the form of the Purchase and Sale Agreement on file in the Office of the City Clerk. The Mayor is hereby authorized to execute the Agreement on behalf of the City. A copy of the final Agreement when executed by the Mayor shall be placed on file in the Office of the City Clerk. 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 Purchase and Sale Agreement, and to administer the City's obligations, responsibilities and duties to be performed under the Purchase and Sale Agreement, including but not limited to, approval and execution on behalf of the City of the Grant Deed, Certificate of Acceptance, any rights of entry for due diligence, escrow instructions, certificates, and other similar agreements and documents as contemplated by or described in the Purchase and Sale Agreement or as necessary and convenient to implement the Purchase and Sale Agreement and to effectuate the transfer of the Property contemplated therein. Section 4. Environmental Analysis. The approval of the acquisition of the Property is not a "project" under the California Environmental Quality Act because the acquisition does not involve a commitment to a specific project on the Property that may result in a potentially significant physical impact on the environment, as contemplated by Title 14, California Code of Regulations, Section 15378(b)(4). The proposed acquisition is exempt from the requirements of the California Environmental Quality Act (CEQA) and the City's CEQA Guidelines pursuant to CEQA Guidelines Section 15061(b)(3) because it can be seen with certainty that there is no possibility that this acquisition of public property will have a significant effect on the environment. The acquisition is exempt from CEQA under CEQA Guidelines Section 15325 as a Class 25 Categorical Exemption because it involves the transfer of ownership of interests in land in order to preserve historical resources. The City is merely acquiring property located between the Temecula Children's Museum owned by the City and the historic Mercantile Building that is part of the Old Town Temecula Theater. The Property is within the historic Old Town Temecula. While the City has no present plans for the development of the Property, the acquisition of the Property by City enables the City to preserve it as part of the historic Mercantile Building and the historic Old Town. Section 5. Certification. The City Clerk shall certify the adoption of this resolution. Resos 17-17 2 PASSED, APPROVED, AND ADOPTED by the City Council of the City of Temecula this 14th day of March, 2017. �.� Maryann Edwards, Mayor ATTES Randi Johl, City Clerk [SEAL] Resos 17-17 3 STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss CITY OF TEMECULA ) I, Randi Johl, City Clerk of the City of Temecula, do hereby certify that the foregoing Resolution No. 17-17 was duly and regularly adopted by the City Council of the City of Temecula at a meeting thereof held on the 14th day of March, 2017, by the following vote: AYES: 5 COUNCIL MEMBERS: Comerchero, Naggar, Rahn, Stewart, Edwards NOES: 0 COUNCIL MEMBERS: None ABSTAIN: 0 COUNCIL MEMBERS: None ABSENT: 0 COUNCIL MEMBERS: None Randi Johl, City Clerk Resos 17-17 4 PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS BETWEEN THE CITY OF TEMECULA AND LANCE PETO, TRUSTEE OF THE K. LANCE PETO TRUST DATED 11/25/96 FOR PURCHASE OF 42061 MAIN STREET, TEMECULA (APNS 922-036-039 & 922-036-040) This Purchase and Sale Agreement and Joint Escrow Instructions (Agreement) is entered into by and between Lance Peto, Trustee of the K. Lance Peto Trust Dated 11/25/96 (Seller) and the City of Temecula, a municipal corporation (Buyer or City), and constitutes an agreement to purchase and sell real property between the parties and the parties' joint escrow instructions directed to First American Title Insurance Company (Escrow Holder). The Agreement is effective as of the date that it is fully executed by the parties (effective date). RECITALS A. Seller is the record fee owner of the real property commonly known as 42061 Main Street in the City of Temecula, and identified as Riverside County Tax Assessor's Parcel Numbers 922-036-039 and 922-036-040 (Property). The Property includes all of the interests of Seller in and to the Property and all rights and appurtenances pertaining to said real property, including any improvements and landscaping, all rights, title, interest of Seller in and to adjacent streets, alleys or rights of way. The Property is more particularly described on Exhibit"A" hereto and depicted roughly on Exhibit "B" hereto. B. The Property is located between the Temecula Children's Museum owned by the City and the historic Mercantile Building that is part of the Old Town Temecula Theater. The Property is within the historic Old Town Temecula. While the City has no present plans for the development of the Property, the City's acquisition of the Property for a public use enables the City to preserve it as part of the historic Mercantile Building and the historic Old Town. C. The Seller and the City have negotiated the City's purchase of the Property in fee. Seller desires to sell, and the City desires to buy, the Property in fee, including all improvements thereon and all of Seller's interest in and to the Property, on the terms and conditions set forth herein. NOW THEREFORE, in consideration of the above Recitals, which are incorporated herein by this reference, and for other valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the City and Seller agree to the following: 1. Purchase and Sale. On the Close of Escrow, as defined in Section 2 below, Seller agrees to sell the Property in fee to the City and City agrees to purchase the Property in fee from Seller on the terms and conditions set forth in this Agreement. 2. Opening and Close of Escrow. Within five business days after the effective date of this Agreement, the City will deliver a copy of the fully-executed Agreement to Escrow Holder. For purposes of the Agreement, Opening of Escrow means the date on which Escrow Holder receives a copy of the fully-executed Agreement from the City and Seller. The parties can execute the Agreement in counterparts as set forth in Section 22.f. below. Close of Escrow will occur on the date that is 90 calendar days from the Opening of Escrow and the Close of Escrow means the date on which the Grant Deed is delivered and recorded in the Official -1- 111 Records of the County of Riverside. Except as provided in Section 3.b. below, the Close of Escrow will occur on the date that is 90 calendar days after the Opening of Escrow after the performance of all duties and obligations under this Escrow that are required to take place prior to Close of Escrow. Before the Close of Escrow, Seller will solely bear all risk of loss and damage to the Property from any source whatsoever. 3. Purchase Price and Seller's Option to Extend Close of Escrow. a. Purchase Price. The total purchase price that the City will pay to Seller for the Property is the sum of One Million Four Hundred Fifty Thousand Dollars ($1,450,000) for the fair market value of the Property (referred to below as the Purchase Price). No attempt has been made to assign value to the lesser interest in the Property. Thus, the Purchase Price is the total price for the Property without distinction or separation for various interests that may be held in the Property. Seller is responsible for any apportionment or allocation of the Purchase Price if required for any separately held interests that may exist in the Property. The Purchase Price is subject to an appraisal of the fair market value of the Property discussed in Section 14.d. below. b. Extension of Close of Escrow and Reduction in Purchase Price. Seller has informed the City that it wishes to purchase a replacement property for a tax-deferred exchange under 26 U.S.C. Section 1031. Accordingly, the City and Seller agree that Seller may, at Seller's sole option, extend the Close of Escrow by an additional 90 calendar days, to provide additional time for Seller to locate said replacement property. The parties agree that if Seller exercises Seller's right to extend the Close of Escrow by an additional 90 calendar days, Seller will provide written notice to the City and Escrow Holder 15 calendar days before the Close of Escrow. Further, in consideration for the option to extend the Close of Escrow by an additional 90 calendar days, Seller agrees that if Seller determines to extend the Close of Escrow by an additional 90 calendar days, the Purchase Price will be reduced by Fifty Thousand Dollars ($50,000) to One Million Four Hundred Thousand Dollars ($1,400,000). 4. Title and Title Insurance. Upon the Opening of Escrow, Escrow Holder will obtain and issue a title commitment for the Property. Escrow Holder will also request two copies each of all instruments identified as exceptions on said title commitment. Upon receipt of the foregoing, Escrow Holder will deliver these instruments and the title commitment to the City and Seller. Escrow Holder will insure the City's interest in the Property, which is described in Recital A above and on Exhibits "A" and "B" to this Agreement at the Close of Escrow by a CLTA Owner's Standard Coverage Policy of Title Insurance (or an ALTA Extended Coverage Form of Title Policy if the City elects such coverage as provided in Section 4.b. below) in the amount of the Purchase Price (Policy). The City will pay for the cost of the Policy. a. The Policy provided for pursuant to this Section will insure the City's interest in the Property free and clear of all liens, encumbrances, restrictions, and rights-of-way of record, subject only to the following permitted conditions of title (Permitted Title Exceptions): General and special real property taxes for the then current tax fiscal year that are a lien not then due and payable. ii. The applicable zoning, building and development regulations of any municipality, county, state or federal jurisdiction affecting the Property; and -2- Those non-monetary exceptions approved by the City within 15 business days after the date the City receives the title commitment and legible copies of all instruments noted as exceptions therein. If the City unconditionally disapproves any such exceptions, Escrow will thereupon terminate, all funds deposited therein will be refunded to the City (less City's share of escrow cancellation charges), and this Agreement will have no further force or effect. If the City conditionally disapproves any such exceptions, then Seller will use Seller's best efforts to cause such exceptions to be removed by the Close of Escrow. If such conditionally disapproved non-monetary exceptions are not removed by the Close of Escrow, the City may, at its option, either accept the Property subject to such encumbrances, or terminate the Escrow and receive a refund of all funds deposited into Escrow (less City's share of escrow cancellation charges), if any, and this Agreement will thereupon be of no further force or effect. At the Close of Escrow, the City's interest in the Property will be free and clear of all monetary encumbrances. b. The City will have the option of obtaining an ALTA Extended Coverage Form Policy of Title Insurance (ALTA Extended Policy) or a CLTA Standard Coverage Form Owners Policy of Title Insurance. If the City, in its sole discretion, determines to obtain an ALTA Extended Policy, the City will, at its expense, procure an ALTA survey. The City will also pay the cost of any such ALTA Extended Policy. 5. Deposit of Funds in Escrow. The City covenants and agrees to deposit into Escrow the $1,450,000 Purchase Price and escrow-related costs or charges within five business days of receiving written notice from Escrow Holder regarding the confirmation of the completion of the conditions required herein for the Close of Escrow. 6. Deposit of Documents in Escrow by Seller. a. Grant Deed. Seller will, within 15 business days after the date this Agreement is fully executed by the parties, deposit with Escrow Holder the Grant Deed granting to the City the Property in fee (Grant Deed) duly executed and acknowledged by Seller. The form of the Grant Deed is attached as Exhibit "C" to this Agreement and is incorporated in this Agreement by this reference. Buyer will accept said executed Grant Deed prior to recording. b. Certification of Non-Foreign Status. Seller will deliver to Escrow Holder, prior to the Close of Escrow, a certification of Non-Foreign Status in accordance with I.R.C. Section 1445. c. Withholding Exemption Certificate. Seller will deliver to Escrow Holder, prior to the Close of Escrow, a Withholding Exemption Certificate 593-C as contemplated by California Revenue and Taxation Code Section 18862. d. Certification of Trust. Seller will deliver to Escrow the following items: A certification pursuant to Section 18100.5 of the California Probate Code in a form satisfactory to Escrow Holder demonstrating that Lance Peto is duly authorized to legally bind the K. Lance Peto Trust Dated 11/25/96. ii. Copies of any excerpts from the original K. Lance Peto Trust Dated 11/25/96, and any amendments thereto that Escrow Holder may require that designate ' the Trustee and confer upon the Trustee the power to act in this transaction. -3- e. Proof of Seller's Authorization. Seller will deliver to Escrow such proof of Seller's authorization to enter into this transaction as Escrow Holder may reasonably require to issue the Policy. 7. Authorization to Record Documents and Disburse Funds. Escrow Holder is hereby authorized to record the documents and disburse the funds and documents called for hereunder upon the Close of Escrow, provided each of the following conditions has then been fulfilled: a. Escrow Holder can issue in favor of Buyer the Policy, showing the City's fee interest in the Property in favor of the City, subject only to the Permitted Title Exceptions. Escrow Holder will use the proceeds of the Purchase Price to obtain a full reconveyance of any monetary liens encumbering the Property, so that the Property is free and clear of monetary liens and encumbrances at the Close of Escrow. Escrow Holder will obtain final approval from Seller regarding the disbursement of the proceeds prior to disbursing any such proceeds to the holder(s) of the monetary liens encumbering the Property. b. City will have deposited with Escrow Holder the Purchase Price and escrow-related costs or charges. c. Escrow Holder will have received the City's notice of approval or satisfaction or waiver of all of the City's contingencies as provided for below in Section 14; and d. Seller will have deposited in Escrow the executed Grant Deed and other ' documents as required by Section 6. Unless otherwise instructed in writing, Escrow Holder is authorized to record at the Close of Escrow any instrument delivered through this Escrow if necessary or proper for issuance of the Policy, including the Grant Deed. 8. Escrow Charqes and Prorations. a. The City will pay for the cost of the CLTA Owner's Standard Coverage Policy of Title Insurance (or at City's option the cost of the ALTA Extended Policy), Escrow costs and Escrow Holder's customary out-of-pocket expenses for messenger services, long distance telephone, etc. The City will pay for recording the Grant Deed, any documentary or other local transfer taxes, and any other recording fees. If the Escrow fails to close through no fault of either party, the City will pay all escrow cancellation charges. b. Any installment of taxes or assessments for the current year paid at or prior to the Close of Escrow shall be prorated based upon the amounts actually paid. If taxes and assessments for the current year have not been paid before the Close of Escrow, Seller shall be charged at the Close of Escrow an amount equal to that portion of such taxes and assessments that relates to the period before the Close of Escrow and the City will pay the taxes and assessments prior to their becoming delinquent. Any such apportionment made with respect to a tax year for which the tax rate or assessed valuation, or both, have not yet been fixed will be based upon the tax rate and/or assessed valuation last fixed. To the extent that the actual taxes and assessments for the current year differ from the amount apportioned at the Close of Escrow, the parties will make all necessary adjustments by appropriate payments between themselves following the Close of Escrow. Seller will pay all delinquent taxes and -4- assessments (and any penalties therein) for periods prior to the Close of Escrow, if any, affecting the Property. c. All prorations will be determined on the basis of a 365-day year. The provisions of this Section 8 will survive the Close of Escrow. 9. Due Diligence Period and Right of Entry and Access Agreement. During the period commencing on the effective date of the Agreement and ending at 5:00 p.m. 30 calendar days after the effective date (Due Diligence Period), the City may inspect the Property as necessary for the purpose of making inspections and other examinations of the Property, including, but not limited to, the right to perform soil and geological tests of the Property and an environmental site assessment thereof. The City will give Seller ten hours' written notice before going on the Property. The City's physical inspection of the Property will be conducted during normal business hours. The City will not conduct any invasive testing or boring without the prior written notification to Seller and Seller's written permission of the same, which permission will not be unreasonably withheld. Seller warrants that no other person or entity has the right to occupy the Property, or any portion thereof, and that this right to enter the Property for due diligence testing during the Due Diligence Period does not require the consent of any party not a signatory thereto. 10. Warranties and Representations of Seller; Indemnity. Seller hereby represents and warrants to the City the following, it being expressly understood and agreed that all such representations and warranties are to be true and correct in all material respects as of the effective date of this Agreement. If Seller acquires additional knowledge regarding the matters that are the subject of the warranties or representations contained in this Section 10 that would cause any of such warranties or representations to be incorrect in any material respect prior to the Close of Escrow, Seller will give prompt written notice thereof to the City. Within ten business days following receipt of such notice, the City may elect to cancel this Agreement and receive a refund of the funds deposited in escrow, except for any escrow cancellation charges. As of the Close of Escrow, the warranties and representations contained in this Section 10 shall be true and correct in all material respects, subject to any matters disclosed in writing by Seller to the City as provided in this Section and will survive the Close of Escrow: a. Seller is the fee owner of the Property and no other party has a fee interest in any portion of the Property. b. To the best of Seller's knowledge, that (i) on the Close of Escrow the Property will be free and clear of any and all hazardous or toxic substances, materials, and waste, including, but not limited to, asbestos and (ii) Seller has no notice of any pending or threatened action or proceeding arising out of the condition of the Property or alleged violation of environmental, health or safety statutes, ordinance or regulations. Seller will indemnify and hold the City harmless for a breach of this warranty and representations. Hazardous Substances are defined below in Section 17. c. To the best of Seller's knowledge, Seller has not received any written notice, warning, notice of violation, administrative complaint, judicial complaint, or other formal or informal notice alleging that conditions on the Property are or have been in violation of any Environmental Law as described below in Section 17, or informing Seller that the Property is subject to investigation or inquiry regarding Hazardous Substances (as defined in Section 17) on the Property or the potential violation of any Environmental Law. -5- 111d. Neither this Agreement nor anything provided to be done hereunder, including the transfer of the Property to the City, violates or will violate any contract, agreement or instrument to which Seller is a party, or which affects the Property, and the Seller's grant of the fee interest in the Property to the City pursuant to this Agreement does not require the consent of any party not a signatory hereto. e. To Seller's actual knowledge, there is no pending, threatened or potential litigation, action or proceeding against Seller or any other party before any court or administrative tribunal that involves the Property or any portion thereof. f. Except as disclosed in the title commitment referred to in Section 4, there are no claims or liens presently claimed or which will be claimed against the Property for work performed or commenced by contractors, subcontractors, suppliers, engineers and/or architects and surveyors who might have lien rights prior to the date of this Agreement. Seller agrees to hold the City harmless from all costs, expenses, liabilities, losses, charges, fees, including attorney fees, arising from or relating to any such lien or any similar lien claimed against the Property and arising from work performed or commenced prior to the Close of Escrow. g. Seller has the full right and power to execute, deliver and perform Seller's obligations under this Agreement, and when executed and delivered, Seller will be lawfully bound by the terms of the Agreement. Seller is the sole owner of the Property free and clear of all liens, claims, encumbrances, easements, encroachments from adjacent properties, encroachments by improvements or vegetation on the Property onto adjacent property, or rights of way of any nature, other than those that may appear on the title commitment. Seller will not ' further encumber the Property or allow the Property to be further encumbered prior to the Close of Escrow. h. Seller is not a "foreign person" within the meaning of Section 1445(f)(3) of the Internal Revenue Code. There are no (i) assignable contracts and agreements relating to or affecting the Property to which Seller is a party or is obligated and pertaining to the upkeep, repair, maintenance, operation, or remediation of the Property that will survive the Close of Escrow or (iii) other contracts or agreements, such as maintenance, service or utility contracts relating to or affecting the Property to which Seller is a party or is obligated that will survive the Close of Escrow. j. There are no leases, licenses, occupancy agreements, or other agreements or arrangements, oral or written, demising space in, providing for the use, possession, or occupancy of, or otherwise similarly affecting or relating to the Property or any portion thereof. k. To the fullest extent permitted by law, Seller will indemnify, defend and hold harmless the City, and its councilmembers, officials, officers, boards, commissions, consultants, agents and employees, and attorneys from and against any and all claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs, and expenses (including, without limitation, reasonable attorneys' fees, expert witness fees, disbursements and court costs) of every kind and nature whatsoever (collectively Claims) that may arise out of, result from, or in any matter be related (directly or indirectly) to the failure of the warranties or representations of Seller contained in this Section 10 to be true and correct in all material respects. The indemnification provisions of this Section 10 • -6- ' shall survive the Close of Escrow for the longest period permitted by law and shall not be deemed merged or extinguished upon the recordation of the Grant Deed. 11. Representations and Warranties of the City. The City hereby represents and warrants to Seller the following, it being expressly understood and agreed that all such representations and warranties are to be true and correct as of the Close of Escrow and shall survive the Close of Escrow: a. The City has taken all required action to permit it to execute, deliver, and perform its obligations under this Agreement. b. The City has the power and authority to execute and deliver this Agreement and carry out its obligations hereunder and consummate the transaction contemplated herein. c. Neither this Agreement nor anything to be provided to be done hereunder, including acquisition of the Property by the City, violates or shall violate, any contract, instrument, partnership agreement, trust agreement, or any other agreement to which the City is a party, and which affects the Property or any part thereof, and the purchase of the Property herein contemplated does not require the consent of any party not a signatory hereto. 12. City's Full Payment of Purchase Price. It is understood and agreed between Seller and the City that the City's payment to Seller of the Purchase Price is an all-inclusive settlement and constitutes the full and complete consideration and payment of just ' compensation for the City's acquisition of the Property in fee. The Purchase Price is also full and complete consideration for all claims arising in connection with or out of the City's acquisition of the Property for the City's proposed public use, claims for severance and other damages, inverse condemnation, precondemnation damages, attorneys' fees, interest, loss of rents, relocation assistance under the Uniform Relocation Assistance and Real Property Acquisition Policies Act of 1070 (42 U.S.C. 4601 et seq.), if applicable, or under Title 1, Division 7, Chapter 1 of the Government Code of the State of California (Section 7260 et seq.), loss of business goodwill pursuant to Code of Civil Procedure Section 1263.510, and any other damages of every kind and nature suffered by Seller by reason of the City's acquisition of the Property or the public use for which the City is acquiring the Property in fee, and all costs and expenses whatever in connection therewith. 13. Releases. This Agreement is a voluntary agreement and Seller, on the Close of Escrow, on behalf of Seller and Seller's successors and assigns, fully releases the City, its councilmembers, officials, counsel, employees, and agents, from all claims and causes of action by reason of any damage that has been sustained, or may be sustained, as a result of the City's efforts to acquire the Property in fee or any preliminary steps thereto and from any and all claims, demands, causes of action, obligations, liabilities or claims for further compensation relating to the City's purchase of the Property. Seller acknowledges that Seller may have sustained damage, loss, costs or expenses that are presently unknown and unsuspected, and such damage, loss, costs or expenses which may have been sustained, may give rise to additional damages, loss, costs or expenses in the future. Nevertheless, Seller hereby acknowledges that this Agreement has been negotiated and agreed upon in light of that situation, and hereby expressly waives any and all rights that Seller may have under California Civil Code Section 1542, or under any statute or common law or equitable principle of similar effect as these may relate to releases described in this Section 13. California Civil Code Section 1542 provides as follows: -7- 111 "A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR." The City and Seller acknowledge this Section by placing their initials below: Seller's Initials: City's Initials: This Section 13 will survive the Close of Escrow. 14. Citv's Contingencies. For the benefd of the City, the Close of Escrow and the City's obligation to consummate the purchase of the Property will be contingent upon and subject to the occurrence of all of the following (or City's written waiver thereof, it being agreed that the City can waive any or all such contingencies) on or before the Close of Escrow: a. That as of the Close of Escrow the representations and warranties of Seller contained in this Agreement are all true and correct. b. The delivery to Escrow Holder of all documents pursuant to Section 6 of this Agreement. c. First American Title Insurance Company's commitment to issue in favor of the City a CLTA Standard Coverage Owner's Policy of Title Insurance (or at Buyer's Option an ALTA Extended Policy) with liability equal to the Purchase Price showing the City's fee interest in the Property, subject only to the Permitted Title Exceptions. d. Appraisal Contingency. This Agreement is contingent upon an appraisal of the fair market value of the Property at no less than the Purchase Price set forth in Section 3 above. The parties agree that Robert Perdue, MAI and Dick Russell of Perdue, Russell and Matthies Real Estate Appraisal will prepare the fair market value appraisal of the Property and that the appraisers will use the fair market value definition set forth in Code of Civil Procedure Section 1263.320. e. The City's approval prior to the Close of Escrow of any environmental site assessment, soils or geological reports, or other physical inspections of the Property that the City might perform prior to the Close of Escrow. 15. Right of Termination. Notwithstanding anything to the contrary contained herein, and without limiting any other right of termination for the benefit of the City contained herein, the City shall have the right, in the exercise of its sole and absolute discretion and upon written notice to the Seller and Escrow Holder, to terminate this Agreement (a) at any time prior to the expiration of the Due Diligence Period for any reason or no reason whatsoever, and (b) at any time prior to the Close of Escrow upon the failure of any of the City's contingencies described in Section 14. Upon such termination, all documents and monies deposited with Escrow Holder, less any escrow cancellation charges, shall be immediately returned to the City. 16. Remedies in the Event of Default. In the event of a breach or a default under this Agreement by either the City or Seller, the non-defaulting party shall have the right to -8- terminate this Agreement by providing ten calendar days written notice thereof to the defaulting party or, if the City is the non-defaulting party, the City as permitted by law may specifically enforce the provisions of this Agreement. If such breach or default is not cured within such ten day period (other than a failure by the Seller to convey the Property at the Close of Escrow, for which there shall be no cure period), this Agreement and the Escrow for the purchase and sale of the Property shall terminate, and if the City is the non-defaulting party, the City shall thereupon promptly receive a refund of any funds deposited with Escrow Holder. Except as herein otherwise expressly provided, such termination of the Escrow by a non-defaulting party shall be without prejudice to the non-defaulting party's rights and remedies against the defaulting party at law or equity. 17. Certain Definitions. a. The term "Hazardous Materials" or "Hazardous Substances" will mean and include the following, including mixtures thereof: any hazardous substance, pollutant, contaminant, waste, by-product or constituent regulated under the Comprehensive Environmental Response, Compensation and Liability Act, 42 U.S.C. Section 9601 et seq.; oil and petroleum products and natural gas, natural gas liquids, liquefied natural gas and synthetic gas usable for fuel; pesticides regulated under the Federal Insecticide, Fungicide, and Rodenticide Act, 7 U.S.C. Section 136 et seq.; asbestos and asbestos-containing materials, PCBs and other substances regulated under the Toxic Substances Control Act, 15 U.S.C. Section 2601 et seq.; source material, special nuclear material, by-product material and any other radioactive materials or radioactive wastes, however produced, regulated under the Atomic Energy Act or the Nuclear Waste Policy Act of 1982; chemicals subject to the OSHA 111 Hazard Communication Standard, 29 C.F.R. Section 1910.1200 et seq.; industrial process and pollution control wastes, whether or not hazardous within the meaning of the Resource Conservation and Recovery Act, 42 U.S.C. Section 6901 et seq.; any substance defined as a "hazardous substance" in California Civil Code Section 2929.5(e)(2) or California Code of Civil Procedure Section 736(0(3); and any other substance or material regulated by any Environmental Laws. b. The term "Environmental Laws" shall mean and include all federal, state and local statutes, ordinances, regulations and rules in effect on or prior to the date hereof relating to environmental quality, health, safety, contamination and clean-up, including, without limitation, the Clean Air Act, 42 U.S.C. Section 7401 et seq.; the Clean Water Act, 33 U.S.C. Section 1251 et seq.; and the Water Quality Act of 1987; the Federal Insecticide, Fungicide, and Rodenticide Act 7 U.S.C. Section 136 et seq.; the Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. Section 1401 et seq.; the National Environmental Policy Act, 42 U.S.C. Section 4321 et seq.; the Noise Control Act, 42 U.S.C. Section 4901 et seq.; the Occupational Safety and Health Act, 29 U.S.C. Section 651 et seq.; the Resource Conservation and Recovery Act 42 U.S.C. Section 6901 et seq.; as amended by the Hazardous and Solid Waste Amendments of 1984; the Safe Drinking Water Act, 42 U.S.C. Section 300f et seq.; the Comprehensive Environmental Response, Compensation and Liability Act 42 U.S.C. Section 9601 et seq. as amended by the Superfund Amendments and Reauthorization Act, the Emergency Planning and Community Right-to-Know Act and the Radon Gas and Indoor Air Quality Research Act; the Toxic Substances Control Act 15 U.S.C. Section 2601 et seq.; the Atomic Energy Act, 42 U.S.C. Section 2011 et seq.; and the Nuclear Waste Policy Act of 1982, 42 U.S.C. Section 10101 et seq.; and state and local environmental statutes and ordinances, with implementing regulations and rules in effect on or prior to the date hereof. 111 -9- 18. Evidence in Court Proceeding. The parties agree that the total Purchase Price of $1,450,000 or any inference of per square foot value of the fee value of the Property based on said Purchase Price will not be admissible as evidence of the fair market value of the Property, or any portion thereof, in any eminent domain or other proceeding or litigation concerning the Property. 19. Notices. All notices and demands will be given in writing by certified or registered mail, postage prepaid, and return receipt requested, or by overnight carrier. 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 an overnight carrier service. The parties will address such notices as provided below or as may be amended by written notice: BUYER: 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 SELLER Lance Peto ' 1043 Coast Boulevard South La Jolla, California 92037 ESCROW First American Title Insurance Company HOLDER: 3400 Central Avenue, Suite 100 Riverside, California 92506 Telephone No. (951) 787-1757 Fax No. (866) 558-2890 20. Further Documents. Each party will, wherever and as often as it shall be requested by the other party, execute, acknowledge, and deliver, or cause to be executed, acknowledged, and delivered, such further instruments and documents, including further escrow instructions, as may reasonably be necessary in order to complete the sale, conveyance, and transfer herein provided and to do any and all other acts and to execute, acknowledge, and deliver any and all documents as may be requested in order to carry out the intent and purpose of this Agreement. 21. Brokers Commissions. No brokers represented the parties in connection with this transaction. Seller shall be solely responsible for the payment of any and all broker's commissions or similar compensation due to any broker representing Seller, if any, and Seller shall defend, indemnify and hold the City harmless from and against any and all claims for any broker's commission or similar compensation that may be payable to any broker claiming it represented Seller in connection with this transaction. Each party shall defend, indemnify and hold the other party harmless from and against any and all claims for any broker's commission or similar compensation that may be payable to any other broker, finder or other person or entity (other than those described above) based upon such party's own acts. The provisions of this 111 Section 21 shall survive the Close of Escrow. -10- 22. Miscellaneous. a. Amendments. Any amendments to this Agreement will be effective only when duly executed by both the City and Seller and deposited with Escrow Holder. b. Applicable Law. This Agreement will be construed and interpreted under, and governed and enforced according to the laws of the State of California. c. Entire Agreement. This Agreement supersedes any prior agreement, oral or written, and together with the Exhibits hereto and any agreements delivered pursuant hereto, contains the entire agreement between the City and Seller on the subject matter of this Agreement. No subsequent agreement, representation or promise made by either party hereto, or by or to any employee, officer, agent or representative of either party, will be of any effect unless it is in writing and executed by the party to be bound thereby. No person is authorized to make, and by execution hereof Seller and the City acknowledge that no person has made, any representation, warranty, guaranty or promise except as set forth herein; and no such agreement, statement, representation or promise that is not contained herein will be valid or binding on Seller or the City. d. Successors and Assigns. This Agreement will be binding upon and inure to the benefit of the heirs, executors, administrators, successors and assigns of the parties hereto. e. Time of Essence. The parties acknowledge that time is of the essence in this Agreement, notwithstanding anything to the contrary in the Escrow Holder's general Escrow instructions. f. Counterparts and Facsimile and Electronic Signatures. This Agreement may be executed simultaneously in one or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. For purposes of this Agreement, facsimile and electronic signatures will be deemed to be original signatures. g. Remedies Not Exclusive and Waivers. No remedy conferred by any of the specific provisions of this Agreement is intended to be exclusive of any other remedy and each and every remedy will be cumulative and will be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. The election of any one or more remedies will not constitute a waiver of the right to pursue other available remedies. h. Interpretation and Construction. Each party has reviewed this Agreement and each has had the opportunity to have its respective counsel and real estate advisors review and revise this Agreement and that any rule of construction to the effect that ambiguities are to be resolved against the drafting party will not apply in the interpretation of this Agreement or any amendments or exhibits thereto. In this Agreement the neuter gender includes the feminine and masculine, and singular number includes the plural, and the words "person" and "party" include corporation, partnership, firm, trust, or association wherever the context so requires. The Recitals and captions of the Sections and Subsections of this Agreement are for convenience and reference only, and the words contained therein will in no way be held to explain, modify, amplify or aid in the interpretation, construction or meaning of the provisions of this Agreement. -11- Attorneys' Fees. If either party hereto incurs attorneys' fees in order to enforce, defend or interpret any of the terms, provisions or conditions of this Agreement or because of a breach of this Agreement by the other party, the prevailing party, whether by suit, negotiation, arbitration or settlement will be entitled to recover reasonable attorneys' fees from the other party. j. Severability. If any part, term or provision of this Agreement is held by a court of competent jurisdiction to be illegal or in conflict with any law, the validity of the remaining provisions will not be affected, and the rights and obligations of the parties will be construed and enforced as if this Agreement did not contain the particular part, term or provision held to be invalid. k. Exhibits. The exhibits and schedules attached hereto are incorporated in this Agreement by reference herein. IN WITNESS WHEREOF, this Agreement is effective as of the date it is fully executed by the parties. SELLER LANCE PETO, TRUSTEE OF THE K. ' LANCE PETO TRUST DATED 11/25/96 Dated: By. Lance Peto, Trustee of the K. Lance Peto Trust Dated 11/25/96 _12_ I BUYER CITY OF TEMECULA, a municipal corporation Dated: By: Maryann Edwards, Mayor ATTEST: Randi Johl, City Clerk Approved as to form: RICHARDS, WATSON & GERSHON IPeter M. Thorson, City Attorney , I -13- ' Exhibit"A" Legal Description of Property EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF TEMECULATEMECULA,COUNTY OF RIVERSIDE,STATE OF CALIFORNIA.AND IS DESCRIBED AS FOLLOWS: PARCEL I LOT"A" LOT 3 IN BLOCK 27,IN TIlE CITY OF TEMECULA,COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,AS PER MAP OF THE TOWN OF TEMECULA ON FILE IN BOOK 15, PAGE 726, RECORDS OF SAN DIEGO COUNTY, TOGETHER WITH THAT PORTION OF AN ALLEY AS ABANDONED BY A RESOLUTION OF THE BOARD OF SUPERVISORS,COUNTY OF RIVERSIDE,RECORDED APRIL 23, 1979 AS INSTRUMENT NUMBER 1979-80863, OF OFFICIAL RECORDS OF SAID COUNTY AND THAT PORTION OF THE NORTHWEST 10 FEET OF MAIN STREET AS ABANDONED BY RESOLUTION NUMBER 75-104. RECORDED APRIL 23, 1975 AS INSTRUMENT NUMBER 1975-16491,OF OFFICIAL RECORDS OF SAID COUNTY. EXCEPTING THEREFROM'HIE SOUTHWESTERLY 0.22 FEET OF SAID LOT 3. CONTAINING:3,965 SQUARE FEET,0.09 ACRES MORE OR LESS. PARCEI.2 LOT"B" THE SOUTHWESTERLY 22.30 FEET OF LOT 4 IN BLOCK 27 OF THE TOWN OF TEMECULA AS SHOWN BY MAP ON FILE IN BOOK 15,PAGE 726,RECORDS OF SAN DIEGO COUNTY,TOGETHER WITH THAT PORTION OF AN ALLEY AS ABANDONED BY A RESOLUTION OF THE BOARD OF SUPERVISORS, COUNTY OF RIVERSIDE, RECORDED APRIL 23, 1979 AS INSTRUMENT NUMBER 1979-80863,OF OFFICIAL RECORDS OF SAID COUNTY AND THAT PORTION OF THE NORTHWEST 10 FEET OF MAIN STREET AS ABANDONED BY RESOLUTION NUMBER 75-104,RECORDED APRIL 23. 1975 AS INSTRUMENT NUMBER 197546491,OF OFFICIAL RECORDS OF SAID COUNTY. CONTAINING:3,568 SQUARE FEET,0.08 ACRES MORE OR LESS. APN:922-036-039-6&922-036-040-6 Exhibit A 11086-0001\2048721v1 Exhibit "B" Depiction of Property T1IJl1o, TEMECULA ME army • • IFS -1116"\ a • PJ• 41: .. '11 • 1 925 0 154 2 0 77p8 154?Fed Trym map is a usar pao•ratod Aalc output torn an Mere rruppnci Om And is lo<rnYraoq only Oso WHYS IAA appy an Mir map TO ray filly not b• RIO$ 1064 atee_Yerroar/liana Ste• ataVi.amn or°t ere..nYabl! +w•a immerser.r Gra-up L THIS LW IS NOT TO EE USED FOR NfMGATgN Exhibit B 11086-0001\2048721v1 Exhibit "C" Form of Grant Deed RECORDING REQUESTED BY: City of Temecula, a municipal corporation AND WHEN RECORDED RETURN TO: City of Temecula Attention: Office of the City Clerk 41000 Main Street Temecula, California 92590 [SPACE ABOVE FOR RECORDER'S USE ONLY] [X] All of Assessor's Parcel Numbers 922-036-039 & 922-036-040 Documentary Transfer Tax $0.00 This Instrument is for the benefit of the City of Temecula and is exempt from Recording Fees (Govt. Code § 27383), Filing Fees (Govt. Code § 6103), and Documentary Transfer Tax (Rev& Tax Code § 11922). GRANT DEED The undersigned Grantor declares: FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, Lance Peto, Trustee of the K. Lance Peto Trust Dated 11/25/96 hereby grants in fee to the City of Temecula, a municipal corporation, that real property located in the City of Temecula, County of Riverside, California commonly known as 42061 Main Street, Temecula California 92590, and identified as Riverside County Tax Assessor's Parcel Numbers 922-036-039 and 922-036-040 (Property). The Property includes all of the interests of Grantor in and to the Property and all rights and appurtenances pertaining to said real property, including any improvements and landscaping, all rights, title, interest of Grantor in and to adjacent streets, alleys or rights of way. The Property is more particularly described on Exhibit "A" hereto and depicted roughly on Exhibit "B" hereto. Exhibits "A" and "B" are incorporated herein by this reference. IN WITNESS WHEREOF, Grantor has executed this Grant Deed on , 2017. GRANTOR: LANCE PETO, TRUSTEE OF THE K. LANCE PETO TRUST DATED 11/25/96 • Dated: By: Lance Peto, Trustee of the K. Lance Peto Trust Dated 11/25/96 Exhibit C-I 11086-0001\2048721v1 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. ALL-PURPOSE ACKNOWLEDGMENT State of California County of Riverside On , before me, _ (insert name and title of the officer) Notary Public, personally appeared who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) Exhibit C-2 11086-0001\2048721v1 Exhibit"A" EXHIBIT A LEGAL DESCRIPTION THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF TEMECULATEMECULA,COUNTY OF RIVERSIDE,STATE OF CALIFORNIA.AND IS DESCRIBED AS FOLLOWS: PARCEL I LOT"A" LOT 3 IN BLOCK 27,IN TIIE CITY OF TEMECULA.COUNTY OF RIVERSIDE, STATE OF CALIFORNIA,AS PER MAP OF THE TOWN OF TEMECULA ON FILE IN 1300K 15, PAGE 726, RECORDS OF.SAN DIEGO COUNTY, TOGETHER WITH THAT PORTION OF AN ALLEY AS ABANDONED BY A RESOLUTION OF THE BOARD OF SUPERVISORS,COUNTY OF RIVERSIDE, RECORDED APRIL 23, 1979 AS INSTRUMENT NUMBER 1979-80863, OF OFFICIAL RECORDS OF SAID COUNTY AND THAT PORTION OF THE NORTHWEST 10 FEET OF MAIN STREET AS ABANDONED BY RESOLUTION NUMBER 75-104, RECORDED APRIL 23, 1975 AS INSTRUMENT NUMBER 1975-46491,OF OFFICIAL RECORDS OF SAID COUNTY. EXCEPTING THEREFROM'HIE SOUTHWESTERLY 0.22 FEET OF SAID LOT 3. CONTAINING:3,965 SQUARE FEET,0.09 ACRES MORE OR LESS. PARCEL 2 LOT 13" THE SOUTHWESTERLY 22.30 FEET OF LOT 4 IN BLOCK 27 OF THE TOWN OF TEMECULA AS SHOWN BY MAP 111 ON FILE IN BOOK 15,PAGE 726,RECORDS OF SAN DIEGO COUNTY,TOGETHER WITH THAT PORTION OF AN ALLEY AS ABANDONED BY A RESOLUTION OF THE BOARD OF SUPERVISORS, COUNTY OF RIVERSIDE, RECORDED APRIL 23, 1979 AS INSTRUMENT NUMBER 1979-80863,OF OFFICIAL RECORDS OF SAID COUNTY AND THAT PORTION OF THE NORTHWEST 10 FEET OF MAIN STREET AS ABANDONED BY RESOLUTION NUMBER 75.104, RECORDED APRIL 23, 1975 AS INSTRUMENT NUMBER 1975-46491,OF OFFICIAL RECORDS OF SAID COUNTY. CONTAINING:3,568 SQUARE FEET,0.08 ACRES MORE OR LESS. APN:922-036-039-6&922-036-040-6 Exhibit C-3 11086-000112048721v1 EXHIBIT "B" [DEPICTION OF PROPERTY] nu un » TEM C( 111. L. le t • .0e \: L ek Yi:Nd 1 925 0 1$4 2 4 77,00 154 2Feet The nW 4 a um.ipp rsn0 xua ouePk+an r.Moyne rnapp V yr RIO n tor n*nnat oNs Oats eaears Wl+VNamay m ref rwe ba WO l$4 lwcala_*. Wry_Sphin rtcaurar*.ammo.r ahw.w isMOM ®t. da Gaopaowcr C. W TICS YM IS NOT TO IIE USED FOR NRWOAT bN 111 Exhibit C-4 11086-000112048721v1 CITY OF TEMECULA • Office of the City Clerk 41000 Main Street Temecula, CA 92590 CERTIFICATE OF ACCEPTANCE OF GRANT DEED (Govt. Code§27281) (42061 Main Street—Assessor's Parcel Numbers 922-036439 &922-036-040) This is to certify that the attached Grant Deed, which conveys in fee to the City of Temecula that certain real property located in the City of Temecula, County of Riverside commonly known as 42061 Main Street, Temecula California 92590, and identified as Riverside County Tax Assessor's Parcel Numbers 922-036-039 and 922-036-040 (Property), including all of the interests of Grantor in and to the Property and all rights and appurtenances pertaining to said real property, any improvements and landscaping, all rights, title, interest of Grantor in and to adjacent streets, alleys or rights of way, is hereby accepted under the authority of the City Council of the City of Temecula and the City of Temecula consents to the recordation thereof by its duly authorized officer. Dated: , 2017 CITY OF TEMECULA, a municipal corporation By: Aaron Adams, City Manager ATTEST: By: Randi Johl, City Clerk APPROVED AS TO FORM: By: Peter M. Thorson, City Attorney Exhibit C-5 11086-0001\2048721v1