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HomeMy WebLinkAbout03. CDC Chrysler-Jeep OPA AGENDA MEMO DATE: June 8, 2010 TO: Chairman and Members of the Community Development Commission FROM: Office of the Executive Director By: Brian Saeki, Director of Community Development SUBJECT: OWNER PARTICIPATION AGREEMENT FOR PROPERTY LOCATED AT 9655 FIRESTONE BOULEVARD (CHAMPION DODGE) RECOMMENDATION Staff recommends that the Community Development Commission approve and authorize the Chairman to execute an Owner Participation Agreement (“OPA”) with Champion Dodge, LLC to secure a new car dealership point (Chrysler/Jeep) within the City of Downey. BACKGROUND Mr. Paul Antepara, owner of Champion Dodge in Downey, recently approached the City with an opportunity to secure a Chrysler/Jeep new car dealership in conjunction with his existing Dodge dealership. Chrysler/Jeep is requiring that he provide $2.9 million in working capital as part of securing the new point. Mr. Antepara has stated that he currently has $1.9 million available and is requesting that the City of Downey fund the $1 million gap. Over the last several weeks, staff has been negotiating with Mr. Antepara regarding the proposed assistance. Based upon those discussions and subsequent financial analysis, staff believes an investment by the Commission is warranted in order to increase the employment and tax revenue base within the City. However, staff believes that this assistance should be provided in two parts over a ten (10) year period. Part One: The Commission would provide a $500,000 lump sum payment towards Mr. Antepara’s working capital shortfall. He would receive these funds from the City within 30 days after he provides adequate evidence that the car manufacturer has approved a Chrysler/Jeep franchise at the Property. If the following criteria is not met/maintained throughout the ten (10) year period, the City may draw upon a personal guarantee secured by Mr. Antepara which would allow the Commission to recoup its investment: 1. At the end of the second year of operation, Mr. Antepara must show that he has created 12 new full-time jobs at the dealership and maintain those jobs over the 10-year period. 2. The cumulative sales tax received by the City must be equal to or greater than $275,000 on an annualized basis throughout the 10-year period; resulting in a minimum of $2,750,000 in sales tax revenue for the City. CITY OF DOWNEY, CALIFORNIA Part Two: The remaining $500,000 in assistance will be earned incrementally based upon the dealerships performance. If the dealership generates a minimum of $350,000 in sales tax annually to the City, any additional sales tax, above the $350,000, will be shared between the City and the dealership based upon the following formula: City Share Dealership Share Year 1 50% 50% Year 2 50% 50% Year 3 60% 40% Year 4 70% 30% Year 5 80% 20% Year 6 90% 10% Year 7 90% 10% Year 8 90% 10% Year 9 90% 10% Year 10 90% 10% Based upon sales tax estimates from Mr. Antepara and using the above formula for reimbursement, the additional $500,000 subsidy could be attained by year 10. It is important to note that the maximum subsidy under the proposed Agreement is $1 million. Therefore, under Part One, the Commission would be required to fund a one time subsidy of $500,000 based upon the previously mentioned conditions. Under Part Two, the maximum subsidy would be $500,000 issued incrementally based upon the schedule above. FISCAL IMPACT The initial $500,000 subsidy will be paid with unencumbered redevelopment funds. The additional $500,000 in assistance will come in the form of a reimbursement from the City to the Commission based upon the dealerships performance as stated in this staff report. The City Council will be asked to consider a Cooperation Agreement with the Community Development Commission to establish the reimbursement mechanism. Attachments – Exhibit A: Owner Participation Agreement Page 2 of 2 OWNER PARTICIPATION AGREEMENT by and between CHAMPION DODGE, LLC, a Limited Liability Company and DOWNEY COMMUNITY DEVELOPMENT COMMISSION, a public body, corporate and politic Page 3 of 2 1. PARTIES AND DATE. 1.1 Date of Agreement. This Agreement is made on the ___ day of June, 2010. 1.2 Parties to Agreement. 1.2.1 The Commission. The Commission is a public body, corporate and politic, exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California. The address of the Commission is: Downey Community Development Commission 11111 Brookshire Avenue Downey, CA 90241 Attention: Community Development Director "Commission", as used in this Agreement, includes the Downey Community Development Commission and any assignee of or successor to its rights, powers and responsibilities. 1.2.2 The Owner. The Owner is Champion Dodge, LLC , a Limited Liability Company. The address of the Owner for the purposes of this Agreement is: Champion Dodge, LLC 9655 Firestone Blvd. Downey, CA 90241 Attention: Mr. Paul A. Antepara, Manager Owner represents and warrants to Commission: that the individuals executing this Agreement are authorized to execute this Agreement on behalf of the Owner, and the Owner has taken all action required by law to approve the execution of this Agreement. All of the terms and conditions of this Agreement shall be binding on and shall inure to the benefit of the Owner and its permitted nominees, successors and assigns. Wherever the term "Owner" is used herein, such term shall include any permitted nominee, assignee or successor of the Owner. The qualifications and identity of the Owner are of particular concern to the Commission, and it is because of such qualifications and identity that the Commission has entered into this Agreement with the Owner. No voluntary or involuntary successor- in-interest of the Owner shall acquire any rights or powers under this Agreement except as expressly set forth herein. The Owner may not assign or transfer all or any part of this Agreement or the Property without the prior written approval of the Commission, which may be given or withheld as provided in Section 4.13. Page 4 of 2 2. RECITALS ABOUT THE PLAN AND PROJECT . 2.1 The Redevelopment Plan and Project Area. The City Council of the City of Downey ("City") has approved and adopted a Redevelopment Plan, as amended, ("Amended Redevelopment Plan") for a redevelopment project known as the Downey Redevelopment Project ("Project Area") by its adoption of Ordinance No. 553 on August 18, 1987, as amended. This Agreement is subject to the provisions of that Redevelopment Plan as it now exists and as it may be subsequently amended. The Redevelopment Plan is hereby incorporated by this reference. The Project Area is located in the City of Downey, California; its boundaries are specifically described in the Redevelopment Plan. 2.2 Purpose of this Agreement. This Agreement implements the Redevelopment Plan for the Project Area by providing for the retention of existing jobs and creation of new jobs, and generation of new tax revenues to the City and Agency by bringing certain commercial development to the property described in Section 3.1 ("Property") with the opening of a Chrysler/Jeep franchise with an existing Dodge new car dealership ("Project"), as set forth in the Scope of Development in Section 3.2. The development of the Property pursuant to this Agreement is in the best interests of the City and the health, safety, morals and welfare of its taxpayers and residents and is in accordance with public purposes set forth in federal, state and local law and regulation. Implementation of this Agreement will further the goals and objectives of the Redevelopment Plan and the City's General Plan by strengthening the City's commercial bases, creating new jobs, and by alleviating economic and physical blight within the Project Area. Owner desires to develop the Property as an owner participant and Commission desires to assist Owner as an owner participant on the terms and conditions set forth in this Agreement. 3. SPECIAL TERMS. 3.1 The Property. The Property is located within the Project Area and is shown on the map and is more particularly designated in Exhibit A. The Property is comprised of approximately Four (4) acres which is owned by The Kent Burns Trust. 3.2 Scope of Development. The Property shall be developed in accordance with the terms of this Agreement and more specifically the following: 3.2.1 Owner shall develop and add a new car Chrysler/Jeep franchise to the existing Dodge dealership on the Property. Owner agrees to use the Property only Page 5 of 2 for the operation of this new-car Dodge/Chrysler/Jeep dealership which shall generate not less than $275,000 of sales tax revenues to the City, attributable to Property (“Operation”) for a period of ten (10) years commencing from the effective date of this Agreement (“Operating Period”). 3.2.2 Owner agrees to create and maintain new employment jobs at the Chrysler/Jeep franchise (“New Jobs”) as follows: a) On or before the end of the second year of the Operating Period, the Owner shall create and maintain a total of not less than twelve (12) new Full-Time Equivalent Employment Positions. b) Owner shall maintain not less than twelve (12) new Full-Time Equivalent Employment Positions from and during the start of the third year through the end of the Operating Period. 3.2.3 The conditions to use the Property only for operation of a new car dealership which generates at least $275,000 in sales tax revenues to the City, and to create and maintain the Full-Time Equivalent Employment Positions, as hereinabove stated, shall be together defined as the “Operating Conditions.” 3.2.4 For purposes of this Agreement, “Full-Time Equivalent Employment Positions” is defined as total annual hours worked (including credit for vacation, sick leave, and holidays) in all counted employment positions at the Operation divided by average annual hours (2080 hours) worked in a full-time job. 3.2.5 Owner shall use good faith efforts to utilize the services of the City for referrals of applicants to fill any such New Jobs. When applicants are equally qualified, hiring preference will be given to residents of the City, provided that such hiring preference is in conformance with all applicable laws. 3.2.6 Owner shall provide a personal guarantee (the “Guarantee”) in the sum of Five Hundred Thousand Dollars ($500,000.00), in a form acceptable to the Commission, for performance of the Operating Conditions by Owner. 3.3 Schedule of Performance. The Owner's obligations shall be started and completed in accordance with the Schedule of Performance set forth below: Page 6 of 2 Commission Approval of OPA June 8, 2010 Owner shall submit evidence, satisfactory to September 1, 2010 Commission, of the commitment by the car manufacturer for a Chrysler/Jeep franchise in Downey Owner shall submit evidence of ability to finance the July 2010 Project Owner shall have obtained all necessary City land December 2010 use entitlements Owner shall obtain a Certificate of Occupancy for the On or before December new Chrysler/Jeep franchise2011 3.4 Conditions of Commission's Assistance Grant. The Commission hereby agrees to acquire the Operating Conditions and Owner hereby agrees to grant and convey to Commission the Operating Conditions in accordance with Section 4.5, subject to Owner meeting all of the conditions, as follows: 3.4.1 City and the Commission shall have approved any permits, under their respective jurisdictions, as necessary and required to allow the Project in accordance with all applicable local, state and federal laws and regulations; 3.4.2 Owner shall furnish to the Commission’s reasonable satisfaction, evidence that the car manufacturer has approved a Chrysler/Jeep franchise at the Property; and 3.4.3 Owner shall furnish to the Commission's reasonable satisfaction evidence of the Owner's ability to finance and operate the Project described in Section 3.2. 4. STANDARD TERMS. 4.1 Commission's Consideration for Operating Conditions. In consideration of Owner agreeing to, granting and conveying the Operating Conditions to Commission, Commission shall pay to Owner a total amount not to exceed One Million Dollars ($1,000,000.00) subject to performance of all conditions in Section 3.4, above, and upon the following conditions: 4.1.1 Commission shall pay to Owner the sum of Five Hundred Thousand Dollars ($500,000.00) within thirty (30) days after Owner has met its obligation to provide the City evidence that the car manufacturer has approved a Chrysler/Jeep franchise at the Property in accordance with Section 3.4.2, above, and is actually operating the Chrysler/Jeep franchise on the Property. Page 7 of 2 4.1.2 Commission shall be obligated to pay to Owner up to, but not to exceed, the total sum of Five Hundred Thousand Dollars ($500,000.00) provided Owner has created the new Full-Time Equivalent Employment Positions related to the Operations as provided in Section 3.2, above, on the following terms and conditions: a) Commencing after the date that gross taxable sales at the Property equals or exceeds $35 million (“Commencement Date”), the City shall retain for payment to the Owner, a prorata percentage of the sales tax revenues attributable to and received by the City from the Property which exceeds $350,000 (referred to herein as the “Available Incremental Revenues”) in accordance with the following schedule: 1. Years 1-2 – 50%-50% split 2. Year 3 – 60% (City) – 40% (Owner) 3. Year 4 – 70% (City) – 30% (Owner) 4. Year 5 – 80% (City) – 20% (Owner) 5. Years 6-10 – 90% (City) – 10% (Owner) For purposes of this Agreement, Available Incremental Revenues means that amount of sales tax revenues received by the City that are: (i) generated by the Operations from and after the date of the issuance of the Certificate of Occupancy; (ii) attributable to the Property; (iii) in excess of the total annual sales tax revenues received by the City in excess of $350,000 in any year; and (iv) apportioned as provided in the schedule above. b) On or before September 1 of each calendar year, the Commission shall pay to the Owner the amount of the Available Incremental Revenues for the immediately preceding twelve (12) months. The Commission shall have no obligation to make such payment in the event there are no Available Incremental Revenues i.e., sales tax revenues attributable to and received by the City from the Property do not equal or are less than $350,000 in the preceding year. c) Notwithstanding any provision to the contrary in this Agreement, the Commission’s obligation pursuant to this Section 4.1.2 shall cease at the end of the th tenth (10) year from the Commencement Date. 4.2 Owner to Defend this Agreement. The Owner acknowledges that the Commission is a “public entity” and/or a “public agency” as defined under applicable California law. Therefore, the Commission must satisfy the requirements of certain California statutes relating to the actions of public entities and redevelopment agencies, including, without limitation, CEQA. Also, as a public body, the Commission's action in approving this Agreement may be subject to proceedings to invalidate this Agreement or mandamus. The Owner assumes the risk of and waives and releases any claims for delays and damages that may result to the Owner from any third-party legal actions related to the Commission's approval of this Agreement or the pursuit of the activities contemplated by this Agreement, even in the event that an error, omission or abuse of discretion by the Commission is determined to have occurred. If a third-party files a Page 8 of 2 legal action regarding the Commission's approval of this Agreement or the pursuit of the activities contemplated by this Agreement, the Commission may terminate this Agreement on thirty (30) calendar days' written notice to the Owner of the Commission's intent to terminate this Agreement, referencing this Section 4.2, without any further obligation to perform the terms of this Agreement and without any liability to the Owner resulting from such termination, unless the Owner unconditionally agrees to indemnify and defend the Commission, with legal counsel acceptable to the Commission, against such third-party legal action within thirty (30) calendar days following receipt of the Commission's notice of intent to terminate this Agreement, and pay all of the court costs, attorney fees, monetary awards, sanctions, attorney fee awards, expert witness and consulting fees, and the expenses of any and all financial or performance obligations resulting from the disposition of the legal action. Any such offer from the Owner must be in writing and reasonably acceptable to the Commission in both form and substance. Nothing contained in this Section 4.2 shall be deemed or construed to be an express or implied admission that the Commission is liable to the Owner or any other person or entity for damages alleged from any alleged or established failure of the Commission to comply with any statute, including, without limitation, CEQA. THE OWNER ACKNOWLEDGES THE PROTECTIONS OF CALIFORNIA CIVIL CODE SECTION 1542 RELATIVE TO THE WAIVER AND RELEASE CONTAINED IN THIS SECTION 4.2, WHICH READS AS FOLLOWS: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED HIS SETTLEMENT WITH THE DEBTOR. BY INITIALING BELOW, THE OWNER KNOWINGLY AND VOLUNTARILY WAIVES THE PROVISIONS OF CALIFORNIA CIVIL CODE SECTION 1542 SOLELY IN CONNECTION WITH THE WAIVERS AND RELEASES OF THIS SECTION 4.2: _________________________ Owner's Initials 4.3 Owner Indemnification and Defense of the Commission. 4.3.1. In addition to any other specific indemnification or defense obligations of the Owner set forth in this Agreement and to the fullest extent permitted by law, the Owner agrees to indemnify, defend (upon written request by the Commission and with counsel reasonably acceptable to the Commission) and hold harmless each and all of the Commission Parties from and against all Claims, as defined in subsection (b), below, that are in any manner directly or indirectly caused, occasioned or contributed to in whole or in part by: a. Any act, omission, fault or negligence, whether active or passive, of the Owner or the Owner's agents, employees, independent contractors or Page 9 of 2 subcontractors of any tier, relating in any manner to this Agreement, any work to be performed by any such person related to this Agreement, the Property, or the Personal Property; or b. Any authority or obligation exercised or undertaken by the Owner under this Agreement; or c. Any breach or default in performance of any obligation of the Owner under this Agreement. 4.3.2 Definition of “Claims.” For purposes of this Agreement, “Claims” means any and all claims, losses, costs, damages, expenses, liabilities, liens, actions, causes of action (whether in tort or contract, at law or in equity, or otherwise), charges, awards, assessments, fines, and penalties of any kind (including consultant and expert expenses, court costs, and reasonable attorneys fees of counsel retained by the Commission Parties, expert fees, costs of staff time, and investigation costs, of whatever kind or nature), and judgments, including, but not limited to, Claims for: (1) injury to any person (including death at any time resulting from that injury); (2) loss of, injury or damage to, or destruction of property (including all loss of use resulting from that loss, injury, damage, or destruction) regardless of where located, including the property of the Commission Parties; (3) any workers' compensation; (4) goods or services provided to the Owner or the Property; and (5) all economic losses and consequential or resulting damage of any kind. 4.3.3 Strict Liability. The indemnification obligation of the Owner shall apply regardless of whether liability without fault or strict liability is imposed or sought to be imposed on one or more of the Commission Parties. The indemnification obligations of the Owner shall not apply to the extent that a final judgment of a court of competent jurisdiction establishes that a Claim against a Commission Party was proximately caused by the negligence or willful misconduct of that Commission Party. In such event, however, the Owner's indemnification obligations to all other Commission Parties shall be unaffected. 4.4 Governmental Permits and Compliance With Laws. Before commencement of construction or development of any buildings, structures or other work of improvement upon the Property, the Owner shall at its own expense secure or cause to be secured any and all permits or approvals which may be required by or from the City or any other governmental agency. The Commission shall provide reasonable assistance to the Owner in securing these permits or approvals. The Owner shall carry out the construction of the Project (including offsite improvements) in conformity with all applicable laws, including all applicable federal and state labor laws and safety standards. 4.5 Obligation to Refrain from Discrimination. The Owner agrees for itself, its successors, its assigns and all persons claiming under or through them to the Property or any part thereof, that there shall be no discrimination against or segregation of any Page 10 of 2 person or group of persons on account of race, color, creed, religion, sex, marital status, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall the Owner itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, or sublessees of the Property. 4.5.1 Form of Non-discrimination and Non-segregation Clauses. The Owner agrees for itself, its successors, its assigns, and all persons claiming under or through them to the Property that the Owner, such successors and such assigns shall refrain from restricting the sale, lease, sublease, rental, transfer, use, occupancy, tenure or enjoyment of the Property on the basis of sex, marital status, race, color, religion, creed, ancestry or national origin of any person. All deeds, leases or contracts pertaining to all or any portion of the Property shall contain or be subject to substantially the following non-discrimination or non-segregation covenants: a. In deeds: “The grantee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the property herein conveyed, nor shall the grantee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, sub- tenants, or sub-lessees in the premises herein conveyed. The foregoing covenants shall run with the land.” b. In leases: “The Lessee herein covenants by and for itself, its successors and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: That there shall be no discrimination against or segregation of any person or group of persons, on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased nor shall the lessee itself, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sub-lessees, or sub-tenants in the premises herein leased.” c. In contracts: “There shall be no discrimination against or segregation of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry, in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of the premises herein conveyed or leased, nor shall the transferee or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use, or occupancy, of tenants, lessees, sub-lessees, or sub-tenants of the premises herein transferred.” The foregoing provision shall be Page 11 of 2 binding upon and shall obligate the contracting party or parties and any subcontracting party or parties, or other transferees under the instrument. 4.6 Rights of Access. For the purpose of assuring compliance with this Agreement, representatives of the Commission and the City shall have reasonable right of access to the Property without charge. 4.7 Prohibition Against Transfer. The Owner acknowledges that the qualifications and identity of the Owner are of particular importance to the Commission and that a Transfer of any of the Owner's interest in this Agreement, or the Property, is for all practical purposes a transfer or disposition of the responsibilities of the Owner with respect to this Agreement and the Property, and, therefore, any Transfer is only allowed pursuant to the written approval of the Commission. The Owner further acknowledges that the Commission has relied and is relying on the specific qualifications and identity of the Owner in entering into this Agreement with the Owner and, as a consequence, Transfers are permitted only as expressly provided in this Agreement. The Owner represents and agrees that it has not made and will not create or suffer to be made or created, any Transfer, either voluntarily, involuntarily or by operation of law, without the prior written approval of the Commission, until after the Completion Date. Any Transfer made in contravention of this Section 4.7 shall be voidable at the election of the Commission and, if voided, shall be deemed to be an Event of Default by the Owner, whether or not the Owner knew of or participated in such Transfer. “Transfer” means and refers to any total or partial sale, assignment, conveyance, trust, power, or transfer in any other mode or form, by the Owner of more than a forty- nine percent (49%) interest (or a series of such sales, assignments and the like that, in the aggregate, result in a disposition of more than a forty-nine percent (49%) interest) in all or any portion of this Agreement or the Property. The sale or other transfer of stock of the Owner corporation by operation of law or otherwise, the creation or issuance of new stock by the Owner corporation, the transfer of an interest in the corporation for estate planning purposes to or for the benefit of one or more immediate family members or lineal descendants of the principals of Owner, or to a trust for the benefit of such persons, or the sale or other transfer of the Owner’s interest in all or any portion of this Agreement or the Property shall not be considered to be a Transfer, provided that, in any event, Paul Anteparra retains and maintains voting and operational control of the transferee Owner. 4.8 Uses. The Owner agrees for itself, its successors, its assigns and every successor in interest to the Property or any part thereof, that during construction and in perpetuity thereafter, the Owner, its successors and assignees, shall devote the Property to the uses specified in the Redevelopment Plan and the City of Downey General Plan and Zoning Ordinance, this Agreement, and any permits which may be required. Page 12 of 2 The Owner agrees that neither it nor its assigns or successors in interest to the Property or the Agreement shall use or otherwise sell, transfer, convey, assign, lease, leaseback or hypothecate the Property or any portion thereof to any entity or party for any use that is partially or wholly exempt from the payment of real property taxes, or which would cause the exemption of the payment of all or any portion of such real property taxes during the time that the Redevelopment Plan (as it exists and as it may be amended) is in effect. 4.9 Specific Performance. If the Owner or the Commission defaults under any of the provisions of this Agreement, the nondefaulting party shall serve written notice of such default upon the defaulting party. If the default is not cured by the defaulting party within thirty (30) days of service of the notice of default, the nondefaulting party, at its option, and in addition to all other legal or equitable remedies available to it, may institute an action for specific performance of the terms of this Agreement, except as may be otherwise expressly provided herein. 4.10 Notices and Demands. All notices or other communications required or permitted hereunder shall be in writing, and may be personally delivered or sent by United States registered or certified mail, postage prepaid, return receipt requested, addressed to parties at the addresses provided in Section 1.2, subject to the right of either party to designate a different address for itself by notice similarly given. Any notice so given by registered or certified United States mail shall be deemed to have been given on the second business day after the same is deposited in the United States mail. Any notice not so given by registered or certified mail shall be deemed given upon receipt of the same by the party to whom the notice is given. 4.11 Nonliability of Commission Officials and Employees. No boardmember, official, consultant or employee of the Commission shall be personally liable to the Owner, or any successor in interest, in the event of any default or breach by the Commission or for any amount which may become due to the Owner or to its successor, or on any obligations arising under this Agreement. 4.12 Time Deadlines Critical; Extensions and Delays. Time is of the essence of this Agreement. In addition to specific provisions of this Agreement, neither party hereunder shall be deemed to be in default where delays or defaults are due to war; insurrection; strikes; lockouts; riots; floods; earthquakes; fires; acts of God; acts of a public enemy; epidemics; quarantine restrictions; and freight embargoes. However, deadlines for performance may not be extended as provided above due to any inability of the Owner to obtain financing for the construction of the Project. 4.13 Attorney's Fees. If either party brings any action or proceeding against the other arising out of this Agreement, then as between the Owner and the Commission, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorney's fees as fixed by the court in such action or Page 13 of 2 proceeding or in a separate action or proceeding brought to recover such attorney's fees. 4.14 Real Estate Commissions. The Commission shall not be liable for any real estate commission, brokerage fees or finders fees which may arise from this Agreement. The Commission and the Owner each represent and warrant to the other that it has engaged no broker, agent, or finder in connection with this transaction. 4.15 Submission of Documents and Other Actions for Approval. Except where such approval is expressly reserved to the sole discretion of the approving party, all approvals required hereunder by either party shall be not be unreasonably withheld. Any requests for approval of documents submitted to the Commission shall contain the following heading in bold type on the first page of the request: ATTENTION EXECUTIVE DIRECTOR: THIS IS A REQUEST FOR COMMISSION OR CITY APPROVAL OF THE ATTACHED DOCUMENT. PLEASE REVIEW THE MATERIAL AND APPROVE OR DISAPPROVE IT IN WRITING WITHIN THE TIME ESTABLISHED THEREFOR IN THE OWNER PARTICIPATION AGREEMENT OR SCHEDULE OF PERFORMANCE. 4.16 Amendments to This Agreement. The Owner and the Commission agree to consider reasonable requests for amendments to this Agreement which may be made by any of the parties hereto, lending institutions, bond counsel or financial consultants. Any amendments to the Agreement must be in writing and signed by the appropriate authorities of both the Commission and the Owner. The Executive Director is authorized to approve and execute minor amendments to this Agreement including but not limited to the granting of extensions of time to the Owner. 4.17 Counterpart Originals; Integration. This Agreement may be executed in duplicate originals, each of which is deemed to be an original. This Agreement and its Exhibits represent the entire understanding of the parties and supersedes all negotiations or previous agreements between the parties with respect to all or any part of the subject matter hereof. 4.18 No Waiver. Failure to insist on any one occasion upon strict compliance with any of the terms or conditions hereof shall not be deemed a waiver of such term or condition, nor shall any waiver or relinquishment of any rights or powers hereunder at any one time or more times be deemed a waiver or relinquishment of such other right or power at any other time or times. Page 14 of 2 IN WITNESS WHEREOF, the parties have entered into this Owner (Tenant) Participation Agreement as of the date first above written. COMMISSIONOWNER DOWNEY COMMUNITY CHAMPION DODGE, LLC, a DEVELOPMENT COMMISSION, California Limited Liability Company a public body corporate and politic By: _____________________________ By: Paul A. Antepara, Manager Anne Bayer Chair ATTEST: Commission Secretary APPROVED AS TO FORM: General Counsel Page 15 of 2