Operating Covenant 2007-0625813
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I( FIRST AMERICAN TITLE
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Poway Redcvelopment Agency )
\ e,01' 13325 Civic Center Drive ) 111I1111111111111~IIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIIUII!!1111111111111111111111
Poway, California 92064 )
Altn: Executive Director ) 007 -0625813
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This document is exempt from the payment of a recording fee pursuant
10 Govemment Code Section 27383
OPERATING COVENANT
THIS OPERATING COVENANT is made this 'l..1., t- day of SE' '" T , 200],
by and between the POW A Y REDEVELOPMENT AGENCY, a public body corporate and politic
(the "Agency"), and OCEAN PARK HOTELS - PWY, LLC, a California limited liability
company (the "Developer"), with reference to the following:
A. The Agency and the Developer have executed a Disposition and Development
Agreement (the Agreement"), datcd as of February 7, 2006, which providcs for the development of
cel1ain real property located in the City of Po way, County of San Diego, State of California, more
fully deseribcd in Exhibit" A" attached hereto and incorporated herein hy this refercnee (the "Site")
The Agrccment is availahle for public inspection and copying at the office of the City Clerk, Poway
City Hall, 13325 Civic Center Drive, Poway, California. Capitalized tenns used herein and not
otherwisc delined shall have the same meaning as set forth in Scction 100 of the Agreement.
B. The Agrccment provides for, among other things, the Developer's conveyance to the
Agency of an operating covenant with rcspect to the improvements on the Site (the "Hotel Facility").
NOW, THEREFORE, thc Developer hereby conveys to the Agency the following
. Operating Covenant:
I. Operating Covenant. For a tenn commencing upon the date hereof and ending
twenty (20) years li'om thc date orthe City's issuancc of the final ce11ificatc of occupancy for thc
Hotel Facility thc Dcveloper covenants and agrees to devotc thc Hotel Facility on the Siie to hotel
uses only Such use shall qualify as a transient occupancy use under Section 3 16 of the City
Municipal Code. The Hotel Facility shall at all times be operatcd pursuant to a fi'anchise,
management or lease arrangement with a lessee, franchisee, manager or llccnscc operating under the
'Ilag" name of Hampton hm hotels or a similar hotel operation which has a national rcservation
system and hotels of a comparable quality to Hampton Inn hotels, which altcrnate hotel opcration is
approved by the Agency in its rcasonable discretion. The loregoing eovcnants shall run with thc land
lor the tenn of the Operating Covenanl. Except with thc prior written consent ofthc Agency fi.1r each
- Instance, which consent may be granted or withheld in the Ageney's reasonable discrction, thc failure
of the Developer to operate the Hotel Facility on the Site as required herein for ninety (90) or morc
consecutive days shall, at the Agcncy's option, constitute a Default hereunder; provldcd, however,
that the Dcveloper shall for purposes of this Section I be deemed to be operating thc Hotel Facility
during any period that the Devcloper is prevented Ii'om opcrating the Hotel Facility duc to (i)
Attachment No 9-1
DOCSOCIl12.1243v8/022345-0101
O'}/\1j{
, "f' -, '" . .
10060
required or necessary rehabilitation of the Hotel Facility on the Site (provided that the period during
which the Hotel Facility is.not ojJerated as a result of the rehabilitation shall in no event exceed one
hundred and twenty (120) days), or (ii) events of force majeure as set forth in Section 602 of the
Agreement. In no event shall the Hotel Facility be used tor non-transient residential purposes during
the Operating Covenant Tenn.
2. Performance of Maintenanee,
(a) Developer shall maintain the Site and the Hotel Facility in accordance with
the Maintel1ance Standards, as hereinafter defined. Said improvements shall include, but not be
limited to, buildings, sidewalks, pedestrian lighting, landscaping, irrigation of landscaping,
architectural elements identifying the Site and any and all other improvements on the Site.
(b) To accomplish thc maintenance, Developer shall either staff or contract with
and hire licensed and qualified personnel to perfonn the maintenance work, including the provision
of labor, equipment, materials, support facilities, and any and all other items necessary to comply
with the requirements of this Operating Covenant.
(c) The tollowing standards ("Maintenance Standards") shall be complied with
by Developer and its maintenance stall contractors or subcontractors:
I Landscape maintenance shall include, but not be limited to:
watering/irrigation;. fel1ilization; mowing; edging; trimming of grass; tree and shmb pruning;
trimming and shaping of trees and shmbs to maintain a healthy, natural appearance and safe road
conditions and visibility, and irrigation coverage; rcplacement, as needed, of all plant materials;
control of weeds in all planters, shrubs, lawns, ground covers, or other pianted areas; and staking for
supp0l1 of trees.
2. Clean-up maintenance shall include, but not be limited to
maintenance of all sidewalks, paths and other paved areas in clean and weed- free condition,
maintenance of all such areas clear of dil1, mud, trash, debris or other matter which is unsafe or
unsightly; removal of all trash, litter and other debris from improvements and landscaping prior to
mowing; clearance and cleaning of all areas maintained prior to the end of the day on which the
maintenance opcrations are pcrformed to ensure that all cuttings, weeds, leavcs and other debris are
properly disposed of by maintenance workers.
3 All maintenance work shall conform to all applicable federal and state
Occupational Safety and Health Act standards and regulations tor the pertonnance of maintenance.
4 Any and all chemicals, unhealthful substances, and pesticides used in
and during maintenance shall be applied in strict accordance with all goveming regulations.
Precautionary measurcs shall be employed recognizing that all areas are opcn to public access.
5 The Site and Hotel Facility shall be maintallled in conlonnance and in
compliance with the approved Site constmction and architectural plans and design scheme, as the
same may be amended from time to l1me with the approval of the City, and reasonable conuncrcial
developmcnt maintenance standards lor similar projects, including but not limited to painting and
cleaning of all cxtelior surfaccs and other exterior facades comprising all private improvements and
public improvcmentsto,the curbline.
Attachment No 9-2
DOCSOCIlI23243v8/1122345-01 III
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. "',' ,. . .
10061
6. The Site and Hotel Facility shall be maintained as required by this
Section 2 in good condition and in accordance with the custom and practice generally applicable to
comparable business hotels located in San Diego County
3, Failure to Maintain Site and Hotel Facility, In the event Developer does not
maintain the Site or the Hotel Facility in the manner set forth herein and in accordance with the
Maintenance Standards, Agency and/or City shall have the right to maintain such private and/or
public improvements, or to contract for the correction of such deficiencies, after written notice to
Developer and Developer's failure to cure such deficiency within the time provided below
However, prior to taking any stich action, Agency agrees to notify Developer 111 wliting if the
condition of said improvements do not meet with the Maintenance Standards and to specify the
deficiencies and the actions required to be taken by Developer to cure the deficiencies. Upon
notification of any maintenancc deficiency, Developer shall have thirty (30) days within which to
correct, remedy or cure the deficiency, or if such deficiency canilot be reasonably corrected within
that period, within such additional time as is reasonably necessary, providcd Developer is diligently
pursuing such cure. If the written notification states the problem is urgent relating to an inuninent
threat to the public health and safety of the City or the Agency, then Developer shall have forty-eight
(48) hours to rectily the problelTI.
In the event Developer fails to correct, remedy, or cure or has not commenced cOlTecting,
remedying or curing such maintenance delicicncy after notification and after thc period of correction
has lapsed, then City and/or Agency shall have the right to maintain such improvements. Developer
agrees'to pay Agency.such charges and costs. Until so paid, the Agency shall havc a lien on the Site
lorthe amount of such charges or costs, which lien shall be perfected by the recordation of a "Notice
of Claim of Lien" against the Site. Upon rccordation ofa Notice.ofa Claim of Lien against thc Site,
such lien shall constitute a lien on the fee estate in and to the Site prior and supcrior to all other
monetary liens except: (i) all taxes, bonds, asscssments, and other levies which, by law, would bc
superior thereto, (ii) the lien or chargc of any mortgage, dced of trust, or other sccurity interest then
of record made in good faith and for value, it being understood that the priority of any such lien for
costs incuned to comply with this Agreement shall date from the date of the recordation of the
Notice of Claim of Lien, and shall not relate back to any date prior thereto Any such lien shall be
subject and subordinate to any lease or sublease of the interest of Developer in the Site or any portion
thereof and to any easement affecting the Site or any portion thereof cntered into at any time (either
before or after) the date of recordation of such a Notice, Any lien in favor of the Agency created or
elaimed hercunder is expressly made .subject and subordinate to any mortgage or deed of trust made
in good faith and for value, rccordedas "fthe date "fthe recordation of the Notice of Claim of Lien
describing such lien as aloresaid, and no such lien shall in any way defeat, invalidate, or impair the
obligation or priority of any such mortgage or deed of trust, unless the mortgage or beneficiary
thereunder expressly subordinates his interest, of record, to such lien after recordation of the Notice
of ClallTI of Lien. No lien in favor of the Agency creatcd or elaimed hereunder shall in any way
defeat, invalidate, or impair thc.obligation or priority of any lease, sublease or easement unless such
instrument is expressly subordinated to such lien, Upon foreclosure of any mOligage or deed of trust
made in good faith and tor value and recorded ptior to the recordation of any unsatislied Notice of
Claim of Lien, the lorcclosure-purchaser shall take title to the Site li-ec of any lien imposed by the
Agency that has accrued up to the time of the foreclosure sale, and upon taking title to the Site, such
foreclosure-purchaser shall only be obligated to pay costs associated with this Agreement accruing
after the foreclosure-purchaser acquires title to the Site. If the Site is ever legally divided with the
written approval of the Agency and fec title to various portions of the Site is helclunder separate
ownerships, then the burdens of the maintenance obligations set forth herein and in this Agreement
Attachment No, '1-3
DOCSOC' I I 21243vX/1J22345-0 I () I
" 'i' . . 10062
and the charges levied by the Agency to reimburse the Agency for the cost of undertaking such
maintenance obligations of Deveioper and its successors and the lipn for such charges shall be
apportioned among the fee. owners ofiheyarious portions oftheSite under different ownerships
according to the square footage ofthc land contained in the respective portions of the Site owned by
them. Upon apportionment, no separate owner of a portion of the Site shall have any liability for the
apportioned liabilities of any other separate owner of another p01iion of the Site, and the lien shall be
similarly apportioned and shall only constitute a lien against the portion of the Site owned in fee by
the owner who is liable for the apportioned charges levied by the Agency and secured by the
apportioned lien and against no other portion of the Site, Developer acknowledges and agrees City
and Agency may also pursue any and all other remedies available in law or equity with respect to a
breach of the maintcnance covenants set f01ih in paragraph 2 above. Developer shall bc liable for
any and all reasonable attomeys' fees, and other legal costs or fees incurred in collecting said
maintenance costs,
4, Compliance with Law. Developer shall comply with all local, state and federal laws
relating to the uses of or condition of the Site and the Hotel Facility The operation of the Hotel
Facility shall be in compliance with the requircments of the Conditional Use Permit issued by the
City for the Hotel Facility
5, Effect of Violation of the Terms and Provisions of this Operating Covenant, The
covenants established in this Opei'ating Covcnant and the deeds shall, without regard to technical
classification and designation, be hinding for the bene lit and in favor of the Agency, its successors
and assigns, as to those covenants which are for its benetit. The covenants contained in this
Operating Covenant shall remain in etfect for the periods of time specified therein. The Agency is
deemed the beneticiary of the terms and provisions of this Operating Covenant and of the covenants
running with the land, for and in its own rights and for the purposes of protecting the interests of thc
community and other paliies, public or private, in whose favor and for whose bencfit this Operating
Covenant and the covenants IUnning with the land have been provided. The Operating Covenant and
thc covenants shalllUn in favor ofthe Agency, without regard to whethcr the Agency has been,
remains or is an owner of any land or interest therein in the Site or in the Project Area.
Notwithstanding anything hercin to the contrary, ifthe Operating Covenant or any other covenants
set f01ih herein are breached, the.sole and exclusive remedy for such breach shall (except as
otherwise provided in paragraph 3 with respect to the maintenance covenants) be to bting an action
for specific performance of such Operating Covenant or other covenant hereunder, and in no event
shall the City or Agency be entitled to foregone past or tuture tax rcvenues or other monetary relief
or damages as a remedy for Dcveioper's default of this Operating Covenant..
6, Miscellaneous Provisions,
a. If any provision of this Operating Covenant or pOliion thercof, or the
application to any person or circumstances, shall to any extent be heid invalid, inoperative or
unenforceable, the remainder of this Operating Covenant, or thc application of such pi'ovision or
potiion thereof to <lny other persons or circul11stanccs, .shall not be affected thereby; it shall not he
deemed that,any such iiwalid provision atl'ects the consideration for tIllS Opcrating Covenant; and
each provision of this Operating Covenant shall be valid and enforceable to thc fullest extent
permitted by law
b This Operating Covenant shall be constlUed in. accordance with the laws of
the Statc of Califomia.
Attachment No. 9-4
DOCSOC/II2324.1vR/022345-0 I 0 I
. . I ODWS f
c. This Operating Covenant shall be binding upon and inure to the benefit of the
successors and assigns of the Developer
d. In the event action is instituted to enforce any of the provisions of this
Operating Covenant, the prevailing party in such action shall be entitled to recover from the other
party thereto as part of the judgment, reasonable attorney's fees and costs,
7, Effect of Operating Covenant. The covenants and agreements established in this
Operating Covenant shall, without regard to technical classification and designation, run with the
land and be binding on each ownerofthe Site and any successor in interest to the Site, or any part
thereof (including each parcel thereof), for the benefit of and in favor of the Agency, its successor
and assigns, and the City of Poway, for the term specified herein.
8. Addendum. Upon the request of either party, the parties hereto shall record an
addendum to this Operating Covenant which specifies the date of issuance of the certificate of
occupancy for the Hotel Facility, asset forth in Section I hereof. Upon request of the Developer at
any time after the twentieth (20th) anniversary of the City's issuance of the final Certificate of
Occupancy for the Hotel Facility, the Agency and City shall promptly execute, delivcr and record
such instruments as may be necessary to terminate this Operating Covenant and remove it from
record title,
9. Estoppel. Within ten (10) business days ofa request by Developer, the Agency shall
provide to Developer an estoppel certificate, in a form reasonably requested by Developer and
reasonably approved by the Agency, prepared for the benefit of Developer or any prospective lender,
purchaser or other third party requesting such document as part of a transaction involving Developer
or the Site. The estoppel certificate. may include representations that the Agreement and/or this
Operating Covenant are in full force and effect, that the Developer is in compliance with the
Agreement and/or this Operating Covenant, and all documents entered into pursuant thereto, and that
the Agreement and/or this Operating Covenant have not been amended except as referenced in the
estoppel certificate as well as such other representations relating to the Agreement and/or this
Operating Covenant as may be reasonably requested by the Developer and reasonably approved by
the Agency The Developer shall reimburse the Agency for all actual and direct third party costs
incurred by the Agency in connection with the negotiation, preparation and/or review of such
document.
Attachment No. 9-5
. . 10063 If
IN WITNESS WHEREOF, the parties hereto has executed this instrument thc day and year
first hereinabove written.
AGENCY:
POWAY REDEVELOPMENT AGENCY, a public
body,co orate and politic
BY'
ATTEST
~~~~
APPROVED AS TO FORM.
Stradling Y occa Carlson & Rauth
Agency Special Counsel
Attachment No. 9-6
DOCSOC/lI23243vS!022345CO I 0 I
. . .
10064
IN WITNESS WHEREOF, the parties hereto has executed this instrument the.day and year
first hereinabove written.
AGENCY:
POW A Y REDEVELOPMENT AGENCY, a public
body, corporate and politic
By-
Chairperson
ATTEST
Agency Secretary
RM.
Rauth
6
DOCSOC!l243 739vl/022345-01 0 1
. . 10065
DEVELOPER:
OCEAN PARK HOTELS - PWY, LLC, a
California limited liability company
By' d -^-~ ~ ~
James M. Flagg, Manager
Attachment No 9-7
DOCSOCIII23243vXI022345-01 0 I
, ' . .
.
10066
EXHIBIT 'A'
PARCEL A:
PARCEL 2 OF PARCEL MAP NO. 19954, IN THE CITY OF POWAY, COUNTY OF SAN DIEGO,
5TATE OF CALIFORNIA, ACCORDING TO PARCEL MAP THEREOF FILED IN THE OFFICE OF
THE COUNTY RECORDER OF 5AN DIEGO COUNTY, MARCH 21,2006, AS INSTRUMENT
NO, 2006-0192773 OF OFFICIAL RECORDS,
EXCEPTING THEREFROM THAT PORTION OF SAID PARCEL 2 DESCRIBED AS FOLLOWS:
BEGINNING AT SOUTHWEST CORNER OF SAID PARCEL 2, THENCE ALONG WESTERLY
BOUNDARY OF SAID PARCEL ?-,N().~TH 01041'30" EAST, 109,19 FEET; THENCE NORTH
88018'30" WE5T, 6,00 FEET; THENCE NORTH 01041'30" EAST 72.09 FEET; THENCE
NORTH 88024'04" WEST 41;16 FEET; THENCE NORTH 01035'56" EAST 38:92 FEET;
THENCE SOUTH 88024'04" EAST 62.83 FEET; THENCE INTO A NONTANGENT CURVE OF
RADIUS 61.50 FEET WITH A CENTER ATA BEARING SOUTH 21052'41" WEST, A
DISTANCE,OF 12,87 FEET, WIT!:l,A,DELTA OF 11059'12"; THENCE:SOUTH 01035'56"
WEST 215.17 FEET; THENCE NORTH 88019'00" WEST 27,48 FEET TO POINT OF
BEGINNING,
TOGETHER WITH A PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 19954 DESCRIBED
AS FOLLOWS:
BEGIN~ING"AT THE NORTHEAST CORNER OF SAID PARCEL 1, THENCE ALONG THE
EASTERLY BOUNDARY Of'SAIDPARCEL 1, SOUTH 01035'56" WEST 61,08 FEET; THENCE
NORTH 88024'04" WEST FOR 17.00'FHT; THENCE SOUTH 01035'56" WEST 102.92 FEET;
THENCE NORTH 88024'04" WEST 45,09 FEET; THENCE TO NORTHERLY BOUNDARY OF
SAID PARCEL 1, NORTH'01035'56" EA5T 164,00 FEET; THENCE 50UTH 88024'04" EAST
62.09 FEET TO POINT OF BEGINNING,
SAID PROPERTY BEING DESCRIBED,AS "PARCEL B" IN A CERTIFICATE OF COMPLIANCE
RECORDED DECEMBER 26, 2006 AS INSTRUMENT NO. 2006-0913338 OF OFFICIAL
RECORDS.
PARCEL B:
AN EASEMENT AND RIGHT OF WAY FOR ACCESS, INGRESS AND EGRESS AND UTILITY
PURPOSES OVER, UNDER ALONG AND ACROSS THAT PORTION OF PARCEL 1 OF SAID
PARCEL MAI>:~I'l<?' 19954 DELINEATED AND DESIGNATED 'AS "EASEMENT FOR ACCESS,
GENERAL UTILITY AND DRAINAGE PURPOSES FOR PARCEL 2 RESERVED HEREON".
NCS-228675-SD 1 of 1
,
, , . . 10067
STATE OF CALIFORNIA
COUNTY OF ~~
On ?/;g/07 , before me, t-., biCLn L Sh e<L- , Notary Public,
, . (Print Name of Notmy Public)
personally appeared 11'1 Pi' fY7 {t//' a e../ 6kJn~
~ personally known to me
-or-
0 proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to thc within instrument and acknowledged to me that he/shc/they executed the same
in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the
~, pcrson(s), or the entity upon behalf of which the person(s) acted, executed the instrument.
1~ ,-- ;gEt:~
- '" Commlsllon # 1529437
Notary PIIbIIc . CaJf10mIa
San Olego County d
MvComm. &p,e,Nov25; Signature Of Notllry
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could prevent
fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER DESCRIPTION OF ATTACHED DOCUMENT
0 Individuai
0 Corporate OlTicer
Title(s) Title 0.. Type Of Document
0 Partner(s) 0 Limited
0 General
0 Attorney-In~Fact
0 Trustee(s)
0 Guardian/Conservator Numhl.:r or Pages
0 Other'
Signer is representing:
Nallle OfP(XS\lll(.<;) Or Entity(ics)
Date Of Documents
Signel\s) Other Than Named Ahovc
IJOCSOC/l123243vS/Il22345-1I1111
.
,
. . . . 10068
STATE OF CALIFORNIA
COUNTY OF &0 \)1 ~
On ,:)P p-\-em be ( ~ I, {1rxf7 , before me, Sherr> t: l:>, WD ('rell , Notary Public,
(Print Name of Notary Public)
personally appeared ::Tame s f'/l r-I a. 33
D personally known to me
-Of-
rs proved to me on the basis of satisfactory evidence to be the persony() whose name(/) ~are
subscribed to the within instrument and acknowledged to me tha<</lii/sIIg/th~ executed the same
in Gher/tl-leir authorized capacity(~, and that by@;/her/tl-leirsignatur~) on the instrument the
personEs}, or the entity upon behalf of which the personfs:) acted, executed the instrumcnl.
--
Je SHERRIE D, WORRELL 1 WITNESS my hand and official seal.
- CommlUlon . 17637&1
j Notary PublIc. CaIIfomla I ~ ~
J . # &an DIego County
- - - - - _"~I.p~ Signature Of NotalY
OPTIONAL
Though the data below is not required by law it may prove valuable to persons relying on the document and could prevent
fraudulent reattachment of this fornl.
CAPACITY CLAIMED BY SIGNER DESCRII'T10N OF ATTACHE)) ))OCUMENT
,g Individual
D Corporate Officer
~~~
Title(s) Till Or Type Of Document
D Partner(s) D Limited
D General
D Attorney-[n-Fact 10
D Trustee(s)
D Guardian/Conservator Numher or Pages
D Other
Signer i.s representing: Sep\-
N;l1l1c Of Person!s) Or Entity(icsl ,;1l. QC01f
Dale Of Documents
M...ch1e I .p, C Q -fCl:8 ()Ov
Signcr(s) Other Than N' cd Above
DOCSOC/[ [23243v81022345-0[01