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HomeMy WebLinkAboutResolution No. 5902pOINN RESOLUTION NO. 5902 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF DOWNEY APPROVING THAT CERTAIN AGREEMENT ENTITLED "DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY AND KRIKORIAN PREMIERE THEATRES, INC., A CALIFORNIA CORPORATION, DATED SEPTEMBER 12, 1995" FOR THE REDEVELOPMENT OF CERTAIN PROPERTY WITHIN THE DOWNEY REDEVELOPMENT PROJECT AREA GENERALLY BOUNDED BY LA REINA AVENUE, THIRD STREET, NEW STREET AND SECOND STREET. THE CITY COUNC . OF THE CITY OF DOWNEY DOES HEREBY RESOLVE AS FOLLOWS: SECTION 1. The City Council of the City of Downey hereby finds, determines, and declares that: A. The project proposed by KRIKORIAN PREMIERE THEATRES, INC., a California corporation, ( "Developer ") pertains to property bounded by La Reina Avenue, Third Street, New Street, and Second Street in the City of Downey ( "Site ") which is within the boundaries of the Downey Redevelopment Project Area ( "Project Area "). B. The project is to be developed on the Site pursuant to the proposed Disposition and Development Agreement by and between the Community Development Commission of the City of Downey and Krikorian Premiere Theatres, Inc., a California Corporation, dated September 12, 1995 (the "Disposition and Development Agreement "). The project consists of a 1700 seat, approximately 31,000 square foot multi-plea motion picture theater and an approximately 6,500 square foot restaurant. C. Pursuant to the provisions of Health & Safety Code Sections 33430, 33431 and 33433, the Commission duly noticed and held a joint public hearing before the City Council and the Board of Directors of the Community Development Commission of the City of Downey on September 12, 1995, concerning the approval of the proposed Disposition and Development Agreement. D. Pursuant to Health & Safety Code Section 33433, a report summarizing and analyzing the proposed Disposition and Development Agreement has been prepared. The report contains the information required by Section 33433 and has been prepared within the time limit set forth therein. E. The sale of the Site to Developer, as proposed by the Disposition and Development Agreement, will assist in the elimination of blight and is consistent with the Implementation Plan (the "Plan ") adopted by the Commission on December 13, 1994. F. The sale of the Site to Developer as proposed by the Disposition and Development Agreement is in excess of fair market value based on the highest and best use of the Site in accordance with the Plan. G. The Commission is specifically authorized by Health & Safety Code Sections 33432, 33437 and 33438, and other applicable law, to enter into the Disposition and Development Agreement. H. Completing the redevelopment on the Site pursuant to the Disposition and Development Agreement is in the vital and best interest of the City of Downey and the health, safety and welfare of its residents and is in accordance with the public purposes and provisions of applicable state and local laws. I The proposed Disposition and Development Agreement pertains to and affects the ability of both parties to finance and carry out their rightful purposes and to accomplish the goals of the Plan and is intended to be a contract within the meaning of Government Code Section 53511. SECTION 2. An initial study of the environmental impact (the "Initial Study ") and a mitigated negative declaration (the "Mitigated Negative Declaration") have been prepared for this Disposition and Development Agreement in accordance with the provisions of the California Environmental Quality Act (CEQA), the State CEQA Guidelines, and the City of Downey's Revised Environmental Guidelines. The City Council has considered the proposed Mitigated Negative Declaration together with any comments that have been received on the Mitigated Negative Declaration during the public review process and at the September 12 public hearing. On the basis of the Initial Study and any comments received, the City Council hereby finds that there is no substantial evidence that the project as set forth in the Disposition and Development Agreement will have a significant adverse effect on the environment and approve the Mitigated Negative Declaration. SECTION 3. The City Council hereby approves that certain Disposition and Development Agreement by and between the Community Development Commission of the City of Downey and Krikorian Premiere Theatres, Inc., a California Corporation, dated September 12, 1995 and authorizes the Chairperson of the Commission to execute said Agreement for and on behalf of the Commission in substantially the form attached hereto as Exhibit A, and the Secretary is hereby authorized to attest the same and affix the seal of the Commission thereto. ATTEST: PASSED, APPROVED AND ADOPTED this 12th day of September, 1995. ,l‘au 5'.W.07.7tte( ith E. McDonnell ITY CLERK Gary P McCaughan, M MAYOR ATTACHMENT TO RESOLUTION NO. 5902 SUMMARY OF COSTS PERTAINING TO THE DISPOSITION AND DEVELOPMENT AGREEMENT (the "AGREEMENT ") BY AND BETWEEN THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY ( "COM.MISSION ") AND KRIKORIAN PREMIERE THEATRES, INC., A CALIFORNIA CORPORATION ( "DEVELOPER ") This report has been prepared in compliance with Section 33433 of the California Community Redevelopment Law (Health and Safety Code Section 33000 et sea.) which provides in part: "Before any property of the agency acquired in whole or in part, directly or indirectly, with tax increment moneys is sold or leased for development pursuant to the redevelopment plan, the sale or lease shall first be approved by the legislative body by resolution after public hearing. Notice of the time and place of the hearing shall be published in a newspaper cf general circulation in the community for at least once per week for at least two successive weeks,as specified in Section 6066 of the Government Code, prior to the hearing. The Agency shall make available for public inspection and copying at a cos: not to exceed the cost of duplication: a. A copy of the proposed sale or lease; b. A summary which describes and specifies: 1. The cost of the agreement to the agency, including land acquisition costs, clearance costs, relocation costs, the costs of any improvements to be provided by the agency, plus the expected interest on any loans or bonds to finance the agreements. 2. The estimated value of the interest to be conveyed or leased, determined at the highest and best uses permitted under the plan 3. The estimated value of the interest to be conveyed or leased, determined at the use and with the conditions, covenants, and development costs required by the sale or lease. The purchase price or present value of the lease payments which the lessor will be required to make during the term of the lease. If the sale price or total rental amount is less than the fair market value of the interest to be conveyed or leased, determined at the highest and best use consistent with the redevelopment plan, then the agency shall provide as part of the summary, an explanation of the reasons for the difference." 4. An explanation of why the sale or lease of the property will assist in the elimination of blight, with reference to all supporting facts and materials relied upon in making this explanation. 33433 Report pg. 2 A. PROPOSED AGREEMENT A copy of the proposed Disposition and Development Agreement with Krikorian Premiere Theaters, Inc., is attached for public review. The Disposition and Development Agreement sets forth the terms that will govern the sale and development of the property to be sold to the Developer. B. SUMMARY OF THE AGREEMENT The proposed Agreement between the Commission and the Developer concerns the sale of certain real property located east of La Reina Avenue between Second Street and Third Street (the "Site "). The Site consists of one parcel: 45,300 square feet in size, acquired from the County of Los Angeles (Exhibit No.l) pursuant to a purchase and sale agreement dated January 17, 1992. This property is specifically described and illustrated on Exhibit No. 1, attached to the DDA. The DDA provides for the Developer to purchase an alternative site (shown as Exhibit No. lA in the DDA) in lieu of Site, provided the Commission acquires the alternative site. Should Commission acquire the alternative site, said acquisition shall be an exchange of fee simple title to the Site for fee simple title to the alternative site. The sale of the aforementioned Site or alternative site is conditioned upon the Developer agreeing to and being in a position to construct a theater complex of approximately 31,000 square feet and containing not more than 1,700 seats. Additionally, the Agreement requires the Developer to construct a restaurant not to exceed 6,500 square feet in size. The Developer will also be required to contribute a total of $480,000 for the construction of a two (2) level public parking structure. The purpose of the proposed project is to bring additional activity to downtown Downey. The proposed project will replace the vacant lot which was not contributing to the vitality of downtown, add public parking suitable for the use of business entities in the area during normal business hours, increase pedestrian and vehicular traffic in off -peak hours and provide entertainment opportunities for the community. C. FINANCIAL SUMMARY 1. The cost of the Agreement to the Commission consists of property acquisition, demolition, public improvement costs, interest expense and annual assistance costs as set forth below: a. Property Acauisition The Commission purchased the Site from the County of 1 1 33433 Report pg. 3 Los Angeles for $1,130,000 plus approximately $5,000 in miscellaneous closing costs. b. Property Demolition Costs The cost of demolishing and removing the County building on the Site was approximately $200,000. No other demolition activities were required. c. Interest Expense The funds utilized by the Commission for the acquisition and demolition of the Site were not the proceeds of a bond issue and therefore the Commission did not incur any bond interest expense. The Commission did borrow $1,135,000 from the City of Downey to acquire the Site. This loan was structured on the basis of a 12% annual interest rate with an unspecified repayment term. The annual interest expense to the Commission to be paid to the City of Downey is $136,200 per year. The anticipated principal repayment date is unknown, therefore, the interest expense over the life of the loan is indeterminate. d. Relocation Costs The Commission has not and will not incur any relocation expenses in delivering the Site or the alternative site. D. VALUE OF INTEREST TO BE CONVEYED The subject Agreement causes the transfer of the Site to the Developer for $600,000. The Site was appraised on April 23, 1995 for $11 per square foot or at $500,000 for the 1.04 acre site base upon its highest and best use. The estimated value of the Site is also $500,000 based upon the project use and with the conditions, covenants, and development cost required by the Disposition and Development Agreement. The Subject Agreement provides for the Developer to purchase an alternative site in lieu of the Site, provided the Commission acquires the alternative site. The alternative site includes parking lot No.9 within Parking Area No. 1 within a parking district. Should Commission acquire the alternative site, said acquisition shall be an exchange of fee simple title to the Site for fee simple title to the alternative site. Should the Commission purchase the alternative site, said exchange would require that portion of the Site become parking replacing all of the parking spaces and all of the land area of the alternative site. The alternative site was appraised as of April 23, 1995 for $11 per square foot or $500,000 for a 1.04 acre parcel exchange of fee simple title. I, HEREBY CERTIFY that the foregoing Resolution was duly and regularly passed and adopted by the City Council of the City of Downey at a regular meeting thereof held on the 12th day of September, 1995, by the following vote, to wit AYES: 5 COUNCIL MENBETS: BOGGS, LAWRENCE, RILEY, BRAZELTtN, McCAUGHAN NOES: 0 COUNCIL M MBERS: NONE ABSENT: 0 COUNCIL MEMBERS: . NONE ABSTAI'�ii ED: 0 COUNCIL MEMBERS: NONE Judith E. McDonnell CITY CLERK LAX2:124909.20 RECORDED AT REQUEST OF AND WHEN RECORDED RETURN TO: Gerald M. Caton Executive Director Downey Community Development Commission 11111 Brookshire Avenue Downey, California 90241 AUGUST 28, 1995 DISPOSITION AND DEVELOPMENT AGREEMENT by and between the COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY and KRIKORIAN PREMIERE THEATRES, INC. A California Corporation Dated September 12, 1995 DOWNEY REDEVELOPMENT PROJECT AREA LAx2e12 4909.20 TABLE OF CONTENTS AUGUST 28. 1995 PAGE ARTICLE I SUBJECT OF AGREEMENT 1 Section 1.1 Purpose of Agreement 1 Section 1.2 The Redevelopment Plan 2 Section 1.3 The Site 2 Section 1.4 Parties to the Agreement 2 A. The Commission 2 B. The Developer 3 Section 1.5 Prohibition Against Change in Ownership, Management and Control of Developer 3 Section 1.6 Contract Documents 4 fl ARTICLE U SALE OF SITE TO DEVELOPER 4 Section 2.1 Sale and Purchase 4 Section 2.2 Conditions Precedent to Commission and Developer Obligations 5 Section 2.3 Evidence of Financing 6 Section 2.4 Condition of Property 6 Section 2.5 Escrow 6 Section 2.6 Conveyance of Title 7 Section 2.7 Environmental Investigations 7 Section 2.8 Demolition of Improvements; Removal of Hazardous Materials 8 i 1 LA82:124909.20 AUGUST 28. 1995 ARTICLE III DEVELOPMENT OF THE SITE 9 Section 3.1 Scope of Development 9 Section 3.2 Construction Drawings and Related Documents 10 Section 3.3 Quality of Construction 10 Section 3.4 Construction Schedule 10 Section 3.5 Parking for the Project 10 Section 3.6 Indemnity and Insurance 12 Section 3.7 City and Other Governmental Permits 13 Section 3.8 Rights of Access 13 ,—. Section 3.9 Local, State and Federal Laws 13 Section 3.10 Antidiscrimination During Construction 14 Section 3.11 Encumbrances and Liens 14 Section 3.12 Prohibition Against Transfer of the Site, the Buildings or Structures Therein and Assignment of Agreement 14 Section 3.13 Financing; Rights of Holders 14 A. Financing 14 B. Notice of Default to Mortgagee or Deed of Trust Holders; Right to Cure 15 Section 3.14 Certificate of Completion 15 ARTICLE IV USE OF THE SITE 16 Section 4.1 Uses 16 Section 4.2 Covenants for Non - Discrimination 17 Section 4.3 Maintenance Covenants 18 LAX2:124909.20 AUGUST 28. 1995 Section 4.4 Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction 18 Section 4.5 Continuation of Covenants 19 ARTICLE V GENERAL PROVISIONS 19 Section 5.1 Notices, Demands and Communications Among the Parties 19 Section 5.2 Conflicts of Interest 19 Section 5.3 Enforced Delay; Extension of Times of Performance 20 Section 5.4 Non - liability of Officials and Employees of the Commission 20 Section 5.5 Inspection of Books and Records 20 ARTICLE VI DEFAULTS AND REMEDIES 21 Section 6.1 Defaults - General 21 Section 6.2 Legal Actions 21 A. Institution of Legal Actions 21 B. Applicable Law 22 Section 6.3 Rights and Remedies Are Cumulative 22 Section 6.4 Inaction Not a Waiver of Default 22 Section 6.5 Damages 22 Section 6.6 Specific Performance 22 Section 6.7 Termination Prior to the Commission Conveyance 23 A. Termination by the Developer 23 B. Termination by the Commission 23 C. Procedure for Termination 24 Section 7.1 ARTICLE VIII Section 8.1 Section 8.2 Section 8.3 Section 8.4 Section 8.5 EXHIBIT NO. 1 EXHIBIT NO. 1A EXHIBIT NO. 2 EXHIBIT NO. 2A EXHIBIT NO. 3 EXHIBIT NO. 4 EXHIBIT NO. 5 EXHIBIT NO. 6 t. 2:i249O9.2o AUGUST 28. 1995 D. Consequences of Termination 24 E. Full Termination of Developers Rights and Interests as of May 22, 1996 25 ARTICLE VII REVESTING OF TITLE IN AGENCY 25 Power of Termination and Right of Reentry and Revesting of Title in the Commission After Commission Conveyance 25 SPECIAL PROVISIONS 27 Submission of Documents to the Commission for Approval 27 Amendments to this Agreement 27 Real Estate Commission 27 Entire Agreement, Waivers & General 28 Time For Acceptance Of Agreement By Commission 28 Map of Site Map of Alternative Site Legal Description of Site Legal Description of Alternative Site Schedule of Performance Escrow Instructions Grant Deed Guaranty LAX2:124909.20 ARTICLE I SUBJECT OF AGREEMENT Section 1.1 Purpose of Agreement AUGUST 28. 1995 DISPOSITION AND DEVELOPMENT AGREEMENT THIS DISPOSITION AND DEVELOPMENT AGREEMENT is entered into by and between the DOWNEY COMMUNITY DEVELOPMENT COMMISSION ( "Commission ") and KRIKORIAN PREMIERE THEATRES, INC., a California corporation (the "Developer ") and is dated as of September 12, 1995. In consideration of the mutual covenants and agreements contained herein, the Commission and the Developer hereby agree as follows: A. The purpose of this Agreement is to effectuate the Downey Redevelopment Plan (hereinafter "Plan") for the Downey Redevelopment Project Area (hereafter "Project Area ") by providing for the redevelopment of certain property, hereafter described, located in the Project Area, in accordance with the Plan. B. The real property to be conveyed and redeveloped pursuant to this Agreement is depicted as the Site on the Site Map, which is attached hereto as Exhibit No. 1. C. This Agreement is entered into for the purpose of redeveloping the Site and not for speculation in land holding. D. Completing the redevelopment of this Site pursuant to this Agreement will assist in the elimination of blight in the Project Area. The addition of a motion picture theater complex and restaurant will draw retail customers to the Downtown Area and generate the need for new and additional retail facilities in the Downtown Area. Completing the redevelopment of the Site as proposed will, therefore, also assist in eliminating blight in the Project Area by generating new employment opportunities and development opportunities in the Project Area. The Project is consistent with the Implementation Plan adopted by the Commission on December 13, 1994. E. Completing the redevelopment on the Site pursuant to this Agreement is in the vital and best interest of the City of Downey, California (the "City"), enhances the health, safety, and welfare of its residents, benefits the Project Area, and is in accord with the public purposes and provisions of applicable state and local laws. -1- The Site consists of the real property shown on the Site Map and described in the Legal Description of Site, which is attached hereto as Exhibit No. 2. The Site is approximately 1.04 acres located on the southeast comer of Third Street between La Reina Street in the City of Downey. LAZ2:124909.20 F. This Agreement pertains to and affects the ability of all parties to fmance and carry out the project and the statutory purposes and the goals of the Plan. It is intended to be a Contract within the meaning of Government Code Section 53511. Section 1.2 The Redevelopment Plan The Plan, as approved and adopted by the City Council of the City on August 8, 1978 by Ordinance No. 553, and amended by the Council on August 14, 1979 by Ordinance No. 603, October 28, 1980 by Ordinance No. 633, July 20, 1987 by Ordinance No. 856, July 7, 1991 by Ordinance Nos. 930 and 931, and December 13, 1994 by Ordinance No. 990, is incorporated herein by this reference. Notice of the Plan, as amended, and the legal description of the Project Area affected thereby are on record in the Office of the County Recorder for the County of Los Angeles in the Official Records of the County of Los Angeles. Section 1.3 The Site Section L4 Parties to the Agreement A. The Commission AUGUST 28. 1995 The Commission is a public body, corporate and politic, organized and existing under the Community Development Commission law of the State of California (Health and Safety Code Sections 34110 et sue,.) and exercising governmental functions and powers pursuant to the Community Redevelopment Law of the State of California (Health and Safety Code 33000 et seg.). The principal office of the Commission is located at 11111 Brookshire Avenue, Downey, California 90241 -0607. B. The Developer The Developer is a California corporation duly organized and existing under the laws of the State of California. The principal office and mailing address of the Developer is: Krikorian Premiere Theatres, Inc; 119 West Torrance Boulevard, Suite 1, Redondo Beach, California 90277. George Krikorian is the sole shareholder in, and President of, Developer Krikorian Premiere Theatres, Inc. Krikorian Premiere Theatres, Inc. has operated motion picture theaters since 1987 and presently operates multi-plex motion picture theaters in -2- LAX :124909.20 AUGUST 28. 1995 Diamond Bar, La Habra, La Mirada, Palos Verdes, San Pedro and Whittier as well as other communities in Southern California. Section 1.5 Prohibition Against Change in Ownership. Management and Control of Developer A. The qualifications and identity of Developer is of particular concern to the Commission. It is because of its qualifications and identity that the Commission has entered into this Agreement with the Developer. Therefore, no voluntary or involuntary successor in interest of the Developer shall acquire any rights or powers under this Agreement except as expressly set forth herein. B. The Developer shall not assign all or any of its rights or duties under this Agreement or to any portion of the Site, including any transfer of ownership or change of control of the Developer, without the prior written approval of the Commission, which approval the Commission shall not unreasonably withhold, provided the Commission determines that the successor is similarly qualified and has specifically agreed in writing to be bound by the provisions of this Agreement and, in the event the assignment effects only a portion of the Site, that the Commission additionally determines that the portion is the restaurant pad depicted on the Map of Site. C. Notwithstanding any other provision of this Agreement to the contrary, the Commission hereby approves the assignment of this Agreement and the conveyance of the Site by Krikorian Premiere Theatres, Inc. to a subsidiary corporation of Krikorian Premiere Theatres, Inc. or any entity with which said parent or subsidiary corporation may merge or consolidate, provided that George Krikorian holds not less than fifty one percent (51%) of the voting shares of such subsidiary or entity and such subsidiary or entity specifically agrees to be bound by the terms of this Agreement and provided further that Krikorian Premiere Theatres, Inc. shall remain secondarily liable in the event such subsidiary or entity fails to fnlfill the obligations of Developer pursuant to this Agreement. D. All of the terms, covenants and conditions of this Agreement shall be binding upon and shall inure to the benefit of the Developer and only to those permitted successors and assigns of the Developer. Whenever the term "Developer" is used herein, such term shall include any other lawful successors in interest of Developer as may be permitted by the Commission. -3- Exhibit No. 6 Guaranty LAX2:124909.20 Section 1.6 Contract Documents The Contract Documents which are part of this Agreement, and each of which are incorporated herein by this reference, are as follows: Exhibit No. 1 Map of Site Exhibit No. 1A Map of Alternative Site Exhibit No. 2 Legal Description of Site Exhibit No. 2A Legal Description of Alternative Site Exhibit No. 3 Schedule of Performance Exhibit No. 4 Escrow Instructions Exhibit No. 5 Grant Deed ARTICLE 11 SALE OF SITE TO DEVELOPER Section 2.1 Sale and Purchase -4- AUGUST 28. 1995 A. In accordance with and subject to all terms, covenants and conditions of this Agreement, the Commission agrees to sell the Site to Developer and Developer agrees to purchase the Site and redevelop the Site within the times, for the consideration, and subject to the terms, conditions and provisions as hereinafter provided. B. Notwithstanding any other provision of this Agreement to the contrary, Developer shall have the right to purchase the real property depicted as the Alternative Site on the Site Map and described in the Legal Description of Alternative Site, which is attached hereto as Exhibit No. 2A, in lieu of the Site, provided that such purchase shall be in accordance with and subject to all terms, covenants and conditions of this subsection. Developer acknowledges and agrees that the Commission does not have any interest in the Alternative Site as of the date first written above. In the event that Developer elects to purchase the Alternative Site, it shall give the Commission written notice thereof on or before November 30, 1995, which notice shall be accompanied by a Financing Progress Report. LAX 2:124909.20 AUGUST 28. 1995 The Financing Progress Report shall provide evidence, satisfactory to the Commission, of a preliminary commitment from a financial institution to financing the Project on both the Site and the Alternative Site. Developer further acknowledges and agrees that the Commission shall be under no obligation to acquire the Alternative Site by any means other than an exchange of fee simple title to the Site for fee simple tide to the Alternative Site. In the event that the Commission acquires such title to the Alternative Site by such exchange on or before March 30, 1996, Developer covenants and agrees to purchase the Alternative Site in accordance with and subject to all terms, covenants and conditions of this Agreement relative to the Site. In the event that the Commission does not acquire such title to the Alternative Site by such exchange on or before March 30, 1996, Developer covenants and agrees to purchase the Site in accordance with and subject to all terms, covenants and conditions of this Agreement relative to the Site and to hold the Commission harmless from any claim, liability, demand, damage, cost or expense arising from or connected with the Commission's failure to so acquire tide to the Alternative Site. C. The Purchase Price for the Site shall be Six Hundred Thousand Dollars and No Cents (5 600,000.00). Within five (5) days after the execution of this Agreement by the Commission pursuant to Section 8.5, Developer shall deliver a good faith deposit of Ten Thousand Dollars and No Cents (5 10,000.00) to the Commission. The good faith deposit shall be applied to the Purchase Price, which shall be paid in full upon the close of escrow. In the event that this Agreement is terminated by Developer pursuant to Section 6.7.A, the Commission shall forthwith return the good faith deposit to the Developer; in the event that this Agreement is terminated for any other reason, the Commission shall retain the good faith deposit. Section 2.2 Conditions Precedent to Commission and Developer Obligations Commission shall not be obligated to convey the Site to Developer and Developer shall not be obligated to accept conveyance of the Site from the Commission until each of the following conditions precedent has been satisfied: A. Developer has obtained from the City and from all other governmental bodies approval of shared use parking and the payment of an in lieu parking fee pursuant to Sections 9150.18 and 9150.25 of the Downey Municipal Code, as provided in Section 3.5 of this Agreement, all land use entitlements, including building permits, and all other discretionary approvals that are necessary for development of the Site pursuant to this Agreement; B. Developer has obtained financing from a financial institution upon terms and conditions satisfactory to Developer and with the loan closing concurrent with conveyance to finance Developer's development of the Site pursuant to this Agreement; ••• -5- palm, Wl2:124909.20 C. Developer has executed and entered into a valid and binding agreement with a general contractor for the construction of the improvements described in this Agreement, has approved the condition of tide pursuant to Section 2.6 of this Agreement and has approved the Environmental Report pursuant to Section 2.7 of this Agreement; and D. City has entered into a contract for the construction of a parking garage adjacent to the Site as described in the Resolution referenced in Exhibit No. 6 hereto with the anticipated completion date not later than the date the Developer anticipates completion of the construction of the multi-plex movie theater. Section 2.3 Evidence of Financing On or before May 1, 1996, Developer shall submit evidence to the Commission that Developer has obtained a binding commitment from a financial institution subject to reasonable and customary terms and conditions for development of the Site pursuant to this Agreement and evidence of the equity required by the lender and shall maintain such a commitment during the term of this Agreement prior to close of escrow. Developer agrees to notify Commission of any change in the status of the financing commitment, or any revised financing commitment. Section 2.4 Condition of Property Developer acknowledges that it is sophisticated and knowledgeable with regard to evaluating. buying and selling real property in the area and that prior to the close of escrow, pursuant to this Agreement, will have had sufficient opportunity to enter the Site and make any and all tests and inspections as Developer deems necessary to satisfy itself as to the condition of the Site for the uses set forth in this Agreement. DEVELOPER IS ACQUIRING THE SITE "AS IS" WITHOUT ANY REPRESENTATIONS OR WARRANTY OF ANY KIND WHATSOEVER AS TO ITS CONDITION (LATENT, PATENT, OR OTHERWISE), EXCEPT FOR THE WARRANTIES DIPLIED IN THE DELIVERY OF A GRANT DEED AND AS EXPRESSLY SET FORTH IN THIS AGREEMENT Section 2.5 Escrow AUGUST 23. 1995 The Parties hereto shall enter into Escrow for the conveyance of the Site in accordance with the Schedule of Performance. Prior to entering escrow the Executive Director on behalf of the Commission and the Developer shall agree upon an Escrow Agent and shall execute Escrow Instructions as necessary to effectuate and implement this Agreement. The Escrow -6- LA82:124909.20 Instructions shall be substantially in the form of Escrow Instructions attached hereto as Exhibit 4 and may be amended as necessary. Section 2.6 Conveyance of Title A. Commission agrees to convey marketable fee simple title to the Site by Grant Deed to Developer free and clear of all recorded and unrecorded liens, encumbrances, assessments, easements, leases and taxes EXCEPT such items as may be agreed upon between the parties pursuant to subparagraphs B and C of this Section. B. As soon as practicable following the date of this Agreement, and not later than sixty (60) days thereafter, Commission shall obtain a Preliminary Title Report on the Site from Chicago Title Insurance Company and shall deliver to Developer a copy of the Preliminary Title Report together with copies of all documents and instruments referred to in the Preliminary Title Report. Developer shall have ten business days after the receipt of the Preliminary Title Report to approve or disapprove the same. Developer shall be deemed to have approved the Preliminary Title Report unless it delivers to Commission written notice of its disapproval within the ten -day period specified. Developer's written notice of disapproval shall specify the specific items on the Preliminary Report which it disapproves. In the event Developer disapproves the Preliminary Title Report, Commission (at its option) will have thirty (30) days following the date of delivery to Commission of Developer's disapproval of the Preliminary Title Report within which to agree to remove any item on the Preliminary Report to which the Developer objected iri its notice of disapproval. In the event Commission elects not to agree to remove any such item, either party will have the right to terminate the Agreement pursuant to Section 6.7, provided, however, that prior to the Commission terminating the Agreement on such grounds, Developer shall have ten (10) working days following notice from the Commission to elect to remove the item disapproved by the Commission at Developer's sole cost and expense. Following Developer's election to remove the item, Commission shall have no obligation to proceed with its obligations pursuant to this Agreement until such time as the item is in fact removed. C. Escrow Agent shall, following recording of deed to Developer, provide Developer with CLTA Standard Coverage Policy of Title Insurance in the amount of the purchase price of the Site issued by Chicago Title Insurance Company showing title to the property vested in Developer, subject only to the exceptions agreed to by the parties. Developer agrees to pay the premium charge thereof. Section 2.7 Environmental Investigations -7- AUGUST 28. 1995 A. Developer shall perform such tests and investigations as it deems necessary in order to determine if contaminated materials and toxic and hazardous waste are present on the • AUGUST 28. 1995 LAX2:124909.20 Site. Within ten (10) days of a written request by Developer, the Executive Director on behalf of the Commission shall approve, in writing, the testing and investigation to be performed and the consultants who will perform the testing. B. The costs of such tests and investigations shall be shared equally between the Commission and Developer. Prior to proceeding with the testing and investigations, the Commission shall deposit with Developer its anticipated share of such costs and expenses. C. The results of any such tests and investigations shall be set forth in an Environmental Report, which Report shall be provided to the Commission when received by Developer. The Environmental Report shall be subject to approval by Developer and the Executive Director on behalf of the Commission. If Developer or Commission fails to approve the Environmental Report within thirty (30) days after Commission and Developer have received the Report, such Report shall be deemed approved by each party which fails to give notice of approval or disapproval within such time period. D. Developer agrees to provide the Commission, upon the request of the Executive Director of the Commission, with copies of any data, surveys and tests conducted, obtained or ,.� performed by or under the direction of Developer pursuant to this Section. Neither Commission nor Developer shall not be responsible for the accuracy of any surveys or tests conducted pursuant to this Section. E. Developer assumes all responsibility for grading the Site and performing all soils and geologic investigations and tests other than that which the Commission will perform pursuant to this Section. Section 2.8 Demolition of Improvements: Removal of Hazardous Materials A. Commission shall at its sole cost and expense, (i) remove from the Site all subsurface structures and underground storage tanks, if any, (ii) remove from the Site all debris of such improvements or subsurface structures and underground storage tanks, if any, and (iii) remove from the Site or remediate any known contaminated materials or toxic or hazardous waste, if any, as required by law, up to the amount of Twenty Five Thousand Dollars ($25,000.00). In the event the cost of removal or remediation of known contaminated materials or toxic or hazardous wastes exceeds $25,000.00, Developer may elect to pay the additional costs of removal or remediation or terminate this Agreement pursuant to Section 6.7. Developer assumes all responsibility for grading the Site and performing all soils work other than that which the Commission specifically agrees to perform pursuant to this Section. -8- LAX2:124909.20 AUGUST 28. 1995 B. Developer shall not be obligated to accept the Site until such items described in subparagraph A are removed and Developer has accepted the condition of the soil on the Site. Upon conveyance of the Site to Developer, however, Commission's obligations under this Section shall be limited to such contaminated material or toxic or hazardous waste as was present on the Site at the time of conveyance. Developer shall be solely responsible for contaminated materials or toxic or hazardous waste placed on the Site after the date of conveyance. C. Nothing in this Section shall be construed to preclude the Commission or Developer from pursuing its remedies against any party who may be responsible for the placement or deposit of any contaminated material or toxic or hazardous substances on the Site. ARTICLE III DEVELOPMENT OF THE SITE Section 3.1 Scone of Develoament A. Developer shall develop a multi-plex motion picture theater and a separate restaurant on the Site in accordance with the approvals of the Commission described herein and the land use entitlements of the City. The multi-plex motion picture theater shall be approximately 31,000 square feet with a total of not more than 1700 seats. The restaurant shall not exceed 6,500 square feet. The motion picture theater and the restaurant shall be housed in separate buildings and the entrance to neither building shall be through the other building. B. Developer, its architect, engineer, and contractor shall work closely with the Commission's staff and the City's planning staff to coordinate design, color, and landscaping details of the development. C. The development shall be of high architectural quality, and the motion picture theater shall reflect the state of the art in architectural design of motion picture theaters in both aesthetics and function. The Developer shall prepare and submit color architectural renderings for all elevations of at least the theater building together with a site plan and a landscape plan for the entire Site within the time specified in Item 2 of the Schedule of Performance. D. Developer shall grant and permit or cause the granting and permission of all necessary and appropriate easements and rights for the development of the Site, including but not limited to temporary construction easements and easements and rights of vehicular access, pedestrian access, parldng, structural support, sanitary sewers, storm drains, water, electrical -9- f AUGUST 28. 1995 power, telephone, natural gas, as are necessary for and consistent with the development as contemplated herein. Section 3.2 Construction Drawines and Related Documents The Developer shall prepare and submit final construction drawings, specifications and related documents for at least the motion picture theater to the City of Downey for review within the time specified in Item 4 of the Schedule of Performance. Section 3.3 Oualitv of Construction The cost of developing the-Site and constructing all improvements on the Site shall be borne entirely by the Developer. In order to assure the quality of the Project as demanded by the Commission, Developer agrees that the multi -plex motion picture theater building, including all interior improvements and equipment shall be of a quality comparable to the Krikorian La Mirada in La Mirada, California and the restaurant building, including all interior improvements, shall be of a quality acceptable to the Executive Director of the Commission in his sole discretion. Section 3.4 Construction Schedule A. After the conveyance of title or possession to the Site, the Developer shall promptly begin and thereafter diligently prosecute to completion the construction of the improvements and the development upon the Site in accordance with the Schedule of Performance. The Developer shall begin and complete all construction and development within the times specified in Items 8 and 9 of the Schedule of Performance or such reasonable extension of said dates as may be granted by the Executive Director of the Commission in writing. B. During the period of construction, the Developer shall submit to the Commission written reports of the progress of the construction. The reports shall be in the same form and in the same detail as normally prepared for internal reports of Developer or for reports from Developer's general contractor to Developer. Section 3.5 Parking for the Proiect A. Developer shall provide parking for the multi-plex motion picture theater in a ratio of not less than one (1) parking space per five (5) theater seats. For a 1700 seat theater, the required parking would be three hundred forty (340) parking spaces. Developer shall provide parking for the restaurant in a ratio of not less than one (1) parking space for every one hundred (100) square feet of gross floor area of the building area of the restaurant. For a LAX2:124909.20 -10- LAX2:124909.20 AUGUST 28. 1995 6,500 square foot restaurant, the required parking is presently estimated to be sixty-five (65) parking spaces. The required parking shall be provided pursuant to Sections 9150.18 and 9150.25 of the Downey Municipal Code. B. Developer hereby acknowledges and agrees that as prerequisites to the issuance of the building permits referenced in Section 2.2.A of this Agreement, Developer shall provide parking pursuant to this subsection and shall deliver to City a written guaranty executed by George Krikorian and Krikorian Premiere Theatres, Inc. (the "Guaranty"). Pursuant to the Guaranty, which shall be in substantially the form attached hereto as Exhibit No. 6, George Krikorian and Krikorian Premiere Theatres, Inc. shall jointly and severally guarantee all payments due and owing to the City pursuant to Section 9150.18 of the Downey Municipal Code; the amount of the guarantee shall never exceed the unpaid balance of said payments. Notwithstanding any other provision of this Agreement to the contrary, Krikorian Premiere Theatres shall not assign its obligation to provide the Guaranty without the express written approval of the Commission, which approval Commission may withhold in its sole discretion. C. The guaranty provided by Krikorian Premiere Theatres, Inc. and the guaranty provided by George Krikorian shall remain in full force and effect until all payments due and owning to the City pursuant to Section 9150.18 of the Downey Municipal Code have been paid in full, except as expressly provided in this subsection. Upon the assignment of the rights and dudes of Krikorian Premiere Theatres, Inc. to the entire Site pursuant to Section 1.5.B, the guaranty provided by Krikorian Premiere Theatres, Inc. and by George Krikorian shall cease upon the written consent of the City Council. The City Council shall not unreasonably withhold its consent, provided that if the City Council determines, in its sole discretion, to require a replacement guaranty or replacement guaranties, the City Council is satisfied that the guarantor or guarantors are financially qualified to replace Krikorian Premiere Theatres, Inc. and George Krikorian, as evidenced by an audited financial statement, dated not more than three (3) months prior to the date that the consent is to become effect, for each guarantor. On or after the fifth anniversary of the date on which the first payment was made to the City pursuant to said Section 9150.18, the guaranty provided by George Krikorian shall cease upon the written consent of the City Council. The City Council shall not unreasonably withhold its consent, provided that (i) Krikorian Premiere Theatres, Inc. has a net worth of not less than One Million Five Hundred Thousand Dollars ($1,500,000), as evidenced by an audited financial statement dated not more than three (3) months prior to the date that the consent is to become effective, and (ii) the City Council is satisfied that the multi-plex motion picture theater has operated at a profit during the prior twelve (12) month period, as evidenced by an audited financial statement dated not more than three (3) months prior to the date that the consent is to become effective. AUGUST 28. 1995 Section 3.6 Indemnity and Insurance A. The Developer shall defend, indemnify, assume all responsibility for and hold the Commission and the City, and their respective elected and appointed officers and employees, harmless from all costs (including attomeys fees and costs), claims, demands or liabilities judgments for injury or damage to property and injuries to persons, including death, which may be caused by any of the Developer's actions or failures to act under this Agreement, including but not limited to the existence and operation of the theater, whether such activities or performance thereof be by the Developer or anyone directly or indirectly employed or contracted with by the Developer and whether such damage shall accrue or be discovered before or after termination of this Agreement. This indemnity includes, but is not limited to, any repair, cleanup, remediation, detoxification, or preparation and implementation of any removal, remedial, response, closure or other plan (regardless of whether undertaken due to governmental action) concerning any hazardous substance or hazardous wastes including petroleum and its fractions as defined in the Comprehensive Environmental Response, Compensation and Liability Act [ "CERCLA "; 42 U.S.C. Section 9601, et seg.], the Resource Conservation and Recovery Act [ "RCRA "; 42 U.S.C. Section 6901 et m..] and California Health and Safety Code Section Code Section 25280 et p. at any place where Developer owns or has control of real property pursuant to any of Developer's activities under this Agreement. The foregoing indemnity is intended to operate as an agreement pursuant to Section 107 (e) of CERCLA and California Health and Safety Code Section 25364 to assure, protect, hold harmless and indemnify Agency from liability. The foregoing indemnity shall not apply to any action or failure to act that occurred prior to the date that the Commission conveyed possession and/or title to the Site to Developer. B. Not in derogation of the indemnity provisions of subsection A. of this Section, the Developer shall take out and maintain during the period set forth in Subsection E, a comprehensive liability policy in the amount of at least Two Million Dollars ($2,000,000.00) for any person, Five Million Dollars ($5,000,000.00) for any occurrence, and One Million Dollars ($1,000,000.00) property damage naming the City and Commission as additional insureds. C. The Developer shall furnish a certificate of insurance signed by an authorized agent of the insurance carrier setting forth the general provisions of the insurance coverage. This certificate of insurance shall name the City and the Commission and their respective officers, agents, and employees as additional insureds under the policy. The insurer shall be approved by the Executive Director of the Commission. The certificate of insurance shall contain a statement of obligation on the part of the carrier to notify the Commission by certified mail of any modification, cancellation or termination of the coverage at least thirty .-. (30) days in advance of the effective date of any such modification, cancellation or termination. Coverage provided hereunder by the Developer shall be primary insurance and :1X2:124909.20 -12- LAX2:124909.20 not contributing with any insurance maintained by the Commission or City, and the policy shall contain such an endorsement. The required certificate shall be filed with the Commission prior to commencement of construction. D. The Developer shall also furnish or cause to be furnished to the Commission evidence satisfactory to the Commission that any contractor with whom it has contracted for the performance of work on the Site or otherwise pursuant to this Agreement carries workers' compensation insurance as required by law. E. The insurance obligations set forth in this Section shall remain in effect until the Certificate of Completion is issued by the Commission. Section 3.7 City and Other Governmental Permits AUGUST 28. 1995 Before commencement of construction or development of any buildings, structures or other work of improvement the Developer shall, at its own expense, secure or cause to be secured any and all permits which may be required by the City and any other governmental agency having jurisdiction as to such construction, development or work. The Commission shall provide all proper assistance to the Developer in securing these permits. Section 3.8 Rights of Access A. For the purpose of assuring compliance with this Agreement, representatives of the Commission shall have the right of access to the Site, without charges or fees, at normal construction hours during the period of construction for the purposes of this Agreement, including, but not limited to, the inspection of the work being performed in constructing the improvements, so long as they comply with all safety rules. Such representatives of the Commission shall be those who are so identified in writing by the Executive Director of the Commission. B. The Developer and the Commission agree to cooperate in placing and maintaining on the Site one sign during construction indicating the respective roles of the Developer and the Commission in the Project. The cost of the sign shall be borne solely by the Developer. Section 3.9 Local. State and Federal Laws The Developer shall carry out the provisions of this Agreement in conformity with all applicable local, state and federal laws and regulations. -13- AUGUST 28. 1995 LAX2.124909.20 Section 3.10 Antidiscrimination During Construction The Developer, for itself and its successors and assigns, agrees that in the construction of the improvements provided for in this Agreement, the Developer shall not discriminate against any employee or applicant for employment because of race, color, creed, religion, age, sex, marital status, handicap, national origin or ancestry. Section 3.11 Encumbrances and Liens Prior to issuance of a Certificate of Completion pursuant to this Agreement, the Developer shall not place or allow to be placed on the Site or any part thereof any mortgage, trust deed, encumbrance or lien other than as expressly allowed by this Agreement. The Developer shall remove or have removed any levy or attachment made on any of the Site or any part thereof, or assure the satisfaction thereof within a reasonable time but in any event prior to a sale thereunder. Section 3.12 Prohibition Against Transfer of the Site. the Buildin!S or Structures Therein and Assignment of Agreement Prior to the issuance of a Certificate of Completion pursuant to this Agreement, the Developer shall not, without prior approval of the Commission, make any total or partial sale, transfer, conveyance, assignment or lease of the whole or any part of the Site or of the buildings or structures on the Site except as permitted by this Agreement. This prohibition shall not be deemed to prevent the granting of temporary or permanent easements or permits to facilitate the development of the Site. Section 3.13 Financing: Rights of Holders A. Financing Notwithstanding any other provision of this Agreement, deeds of trust are permitted before completion of the construction of the improvements, but only for the purpose of securing loans of funds to be directly used for the acquisition of the Site, the construction of improvements on the Site, and any other purposes necessary for the construction required by this Agreement. The Developer shall notify the Commission in advance of any mortgage, deed of trust or sale and leaseback financing permitted by this Agreement, if the Developer proposes to enter into the same before completion of the construction of the improvements on the Site. Express written approval of the Executive Director of the Commission shall be required for any other financing. -14- LAX2:124909.20 B. Notice of Default to Morteaeee or Deed of Trust Holders: Richt to Cure With respect to any mortgage or deed of trust granted by Developer as provided herein, whenever the Agency shall deliver any notice or demand to Developer with respect to any breach or default by the Developer in completion of construction of the improvements or otherwise pursuant to this agreement, the Agency shall at the same time deliver to each holder of record of any mortgage or deed of trust authorized by this Agreement, which has requested in writing to be so notified, a copy of such notice or demand. All holders of record of such mortgages or deeds of trust shall notify the Agency of any default of Developer or foreclosure proceedings against Developer. Subject to the further provisions of Section 6.1, each such holder shall (insofar as the rights of the Agency are concerned) have the right, at its option, within thirty (30) days after the receipt of the notice, to cure or remedy or commence to cure or remedy and pursue such cure or remedy with diligence, any such default and to add the cost thereof to the mortgage debt and the lien of its mortgage. Nothing contained in this Agreement shall be deemed to permit or authorize such holder to undertake or continue the construction or completion of the improvements (beyond the extent necessary to conserve or protect the improvements or construction already made) without first having expressly assumed the Developer's obligations to the Agency by written agreement satisfactory to and with the Agency. Section 3.14 Certificate of Completion AUGUST 28. 1995 A. Promptly after completion of all construction and development of the Site in the manner required by this Agreement, the Commission shall furnish the Developer with a Certificate of Completion upon written request therefor by the Developer. The Commission shall not unreasonably withhold the Certificate of Completion. Such Certificate of Completion shall be a conclusive determination of satisfactory completion of the construction required by this Agreement upon the Site and the Certificate of Completion shall so state. The Certificate of Completion shall be in such form as to permit it to be recorded in the Recorder's Office of Los Angeles County. After recordation of the Certificate of Completion, any party then owning or thereafter purchasing, leasing or otherwise acquiring any interest therein shall not (because of such ownership, purchase, lease or acquisition), incur any obligation pursuant to this Agreement for the initial construction of the improvements. B. Notwithstanding any other provision of this Agreement to the contrary, Developer may lease the restaurant pad prior to the time that the Commission furnishes the Developer with the Certificate of Completion, provided that (i) the lessee has been approved by the Commission pursuant to Section 1.5 and (ii) the Developer has complied with the Subdivision Map Act and the ordinances of the City adopted pursuant thereto as the same apply to the division of the Site. -15- LAX2e124909.20 AUGUST 28. 1995 C. If the Commission refuses or fails to furnish the Certificate of Completion for the Site, or part thereof, after written request from the Developer, the Commission shall, within fifteen (15) days of written request therefor, provide the Developer with a written statement of the reasons the Commission refused or failed to furnish a Certificate of Completion. The statement shall also contain Commission's opinion of the actions the Developer must take to obtain a Certificate of Completion. If the reason for such refusal is confined to the immediate availability of specific items of materials for landscaping, the Commission shall issue its Certificate of Completion upon the posting of a bond by the Developer with the Commission in an amount representing a fair value of the work not yet completed. If the Commission shall have failed to provide such written statement within said fifteen (15) day period, the Developer shall be deemed entitled to the Certificate of Completion. D. Such Certificate of Completion shall not constitute evidence of compliance with or satisfaction of any obligation of the Developer to any holder of any deed of trust securing money loaned to finance the improvements, or any part thereof. Such Certificate of Completion is not a notice of completion as referred to in the California Civil Code, Section 3093. Section 4.1 Uses ARTICLE IV USE OF THE SITE A. The Developer covenants and agrees for itself, its successors, its assigns, and every successor in interest to the Site or any part thereof, that during construction and thereafter for a period of ten (10) years from the date of the issuance of the certificate of occupancy for the multi-plex movie theater by the City, the Developer, and such successors and such assignees, shall use, and devote the Site to use, as a multi-plex motion picture theater, as described in Section 3.1, which shows quality motion pictures and a separate restaurant, as described in Section 3.1. Uses incidental to the motion picture theater, consisting of (i)) the sale of confections, soft drinks, and other concession stand food items as are customarily sold in a motion picture theater, (ii) the sale of video tapes and movie memorabilia, and (iii) the operation of coin or token operated amusement machines, shall also be permitted. B. Developer further covenants and agrees for itself, its successors, its assigns, and every successor in interest to the multi-plex motion picture theater, that the theater shall be operated in such a manner as to provide the broadest appeal to the public and therefore agrees not to show motion pictures which (i) are or would be rated "X" by the Academy of Motion -16- LAX2:124909.20 AUGUST 28. 1995 Picture Arts and Sciences under its current rating system, or (ii) whose primary content is the depiction of acts of sexual intercourse or oral copulation. Section 4.2 Covenants for Non - Discrimination A. The Developer covenants by and for itself and any successors in interest 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, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Developer 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, sublessees or vendees of the Site. B. The Developer shall refrain from restricting the rental, sale or lease of the Site on the basis of race, color, creed, religion, sex, marital status, handicap, national origin or ancestry of any person. All such deeds, leases or contracts shall contain or be subject to substantially the following nondiscrimination or nonsegregation clauses: 1. In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators 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, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." 2. In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: "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, age, handicap, ancestry or national origin in the leasing, subleasing, transferring, use, occupancy, tenure or enjoyment of the premises herein leased nor shall the lessee himself or herself, or any person claiming under or through -17- LA.'C2:124909.20 Section 4.3 Maintenance Covenants -18- AUGUST 28. 1995 him or her, 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, sublessees, subtenants or vendees in the premises herein leased." 3. 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, age, handicap, ancestry or national origin in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the premises." C. The covenants established in this Section and the deeds shall, without regard to technical classification and designation, be binding for the benefit and in favor of the Commission, its successors and assigns, the City and any successor in interest to the Site or any part thereof. The covenants, contained in this Section and the Grant Deed relating thereto shall remain in perpetuity. Subsequent to the issuance of a Certificate of Completion, the Developer, and all successors and assigns in interest to the Site, or any part thereof, shall be obligated to maintain the Site, and all improvements and landscaping situated thereon, in accordance with approved plans, in a clean and neat condition and in a continuous state of good repair. In the event the Developer fails to maintain the Site as required by this Agreement, Commission shall notify Developer in writing of such failure and specify the work necessary to meet the maintenance obligation. In the event the work specified is not completed within thirty (30) days of the date of said notice, Commission may enter the Site, complete the work, and bill Developer for the cost of said work. Section 4.4 Effect of Violation of the Terms and Provisions of this Agreement After Completion of Construction The Commission is deemed the beneficiary of the terms and provisions of this Agreement and of the covenants running with the land, for and in its own rights, for the purpose of fulfilling its statutory obligations and for the purposes of protecting the interests of the community. The Agreement and the covenants shall run in favor of the Commission, without regard to whether the Commission has been, remains or is an owner of any land or LAX2:124909.20 AUGUST 28. 1995 interest therein in the Site or in the Project Area. The Commission shall have the right, if the Agreement or covenants are breached, to exercise all rights and remedies, and to maintain any actions or suits at law or in equity or other proper proceedings to enforce the curing of such breaches to which it or any other beneficiaries of this Agreement and covenants may be entitled. Section 4.5 Continuation of Covenants Of the covenants which have been established pursuant to this Agreement, the same shall be deemed to be covenants running with the land for the benefit of the Project Area. Covenants relating to construction of improvements on the property shall expire upon the issuance by Commission of a Certificate of Completion or Certificates of Completion as to the entire Site. Covenants relating to the use of the Site shall expire ten (10) years after the date of the issuance of the certificate of occupancy for the multi-plex movie theater by the City. Covenants relating to maintenance of the Site and improvements thereon and the covenants against discrimination contained in Section 4.2 shall remain in perpetuity. ARTICLE V GENERAL PROVISIONS Section 5.1 Notices. Demands and Communications Amone the Parties Written notices, demands and communications among the Commission and the Developer, shall be sufficiently given by personal service or dispatched by registered or certified mail, postage prepaid, return receipt requested, to the principal offices of the Commission or the Developer described in Section 1.4. Such written notices, demands and communications may be sent in the same manner to such other addresses as either party may from time to time designate by mail as provided in this Section. Notwithstanding anything to the contrary contained herein, notice personally served shall be deemed to have been received as of the date of such services. Section 5.2 Conflicts of Interest The Developer warrants that it has not paid or given and will not pay or give any officer, employee or agent of the City or Commission any money or other consideration for obtaining this Agreement. -19- r-, T.AX2:124909.20 AUGUST 28. 1995 Section 5.3 Enforced Delay: Extension of Times of Performance In addition to specific provisions of this Agreement, performance by either party hereunder shall not be deemed to be in default, and all performance and other dates specified in this Agreement shall be extended, where party seeking the extension has acted diligently and delays or defaults are due to events beyond the control of the party such as but not limited to: war, insurrection; strikes; lockouts; riots; floods; earthquakes; fires; casualties; acts of God; acts of the public enemy; epidemics; quarantine restrictions; freight embargoes; intergalactic invasion; litigation not initiated by parties to this Agreement; unusually severe weather or other causes beyond the control and without the fault of the party claiming an extension of time to perform. Notwithstanding anything to the contrary in this Agreement, an extension of time for any such cause shall be for the period of the enforced delay and shall commence to run from the time of the commencement of the cause, if written notice by the party claiming such extension is sent to the other party within ten (10) days of the commencement of the cause. Times of performance under this Agreement may also be extended in writing by the mutual agreement of Executive Director of Commission and the Developer. The parties agree that this Section shall not excuse, prevent, delay or otherwise affect the termination date set forth in Section 6.7.E. and that said termination date shall apply regardless of the reasons for delay and regardless of the good faith efforts of the parties to meet this deadline. Section 5.4 Non - liability of Officials and Employees of the Commission No member, official or employee of the Commission or the City shall be personally liable to the Developer, or any successor in interest, pursuant to the provisions of this Agreement, nor for any default or breach by the Commission (or the City). Section 5.5 Inspection of Books and Records Each party has the right to inspect, at reasonable times and upon reasonable notice, the books and records of the other pertaining to the Site as pertinent to the purposes of this Agreement. Such inspections shall only be undertaken if necessary to enforce rights under this Agreement. The scope of such inspections shall be limited to what is necessary and shall be done, if at all, no more than twice annually before the Certificate of Completion is issued and no more than once annually after the Certificate of Completion is issued. -20- LAX2e124909.20 ARTICLE VI DEFAULTS AND REMEDIES Section 6.1 Defaults - General AUGUST 28. 1995 A. Subject to the extensions of time set forth in Section 5.3, failure or delay by either party to perform any term or provision of this Agreement constitutes a default under this Agreement. A party claiming a default (claimant) shall give written notice of default to the other party, specifying the default complained of. B. The claimant shall not ter inate this Agreement pursuant to Section 6.7, institute proceedings against the other party nor be entitled to damages or specific performance if the other party within fourteen (14) days from receipt of such notice immediately, with due diligence, commences to cure, correct or remedy such failure or delay and shall complete such cure, correction or remedy within thirty (30) days from the date of receipt of such notice, unless the Executive Director of the Commission agrees to extend such date of compliance. Such cure, correction and remedy shall include payment of any costs, expenses (including attomey fees) or damages incurred by the non - defaulting party resulting from the default or during the period of default. C. In the event the notice of default is served upon Developer during the time foreclosure proceedings with respect to the Site are pending against the Developer with regard to a mortgage or deed of trust authorized by this Agreement, Agency agrees not to terminate this Agreement pursuant to Section 6.7, institute proceedings against the Developer or holders of any mortgage or deed of trust, nor be entitled to damages or specific performance for a period of six (6) months after the date of such notice in order to allow the holder of the mortgage or deed of trust an adequate opportunity to cure the default or to sell the Site to a qualified purchaser, provided, however that the holder of the mortgage or deed of trust is proceeding in a diligent and reasonable manner to cure the default or find a qualified purchaser for the Site in accordance with the terms of this Agreement. Section 6.2 gal Actions A. Institution of Leval Actions Any legal actions related to or arising out of this Agreement must be instituted in the Superior Court of the County of Los Angeles, State of California, in an appropriate municipal court in that county, or, if federal jurisdiction exists, in the Federal District Court in the Central District of California. In the event such litigation is filed by one party against the other to enforce its rights under this Agreement, the prevailing party, as determined by the -21- n 1 LAX2:124909.20 AUGUST 28. 1995 Court's judgment, shall be entitled to reasonable attorney fees and litigation expenses for the relief granted. B. Anolicable Law The laws of the State of California shall govern the interpretation and enforcement of this Agreement, except where superseded or preempted by Federal Law. Section 6.3 Rights and Remedies Are Cumulative Except as otherwise expressly stated in this Agreement, the rights and remedies of the parties are cumulative, and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. Section 6.4 Inaction Not a Waiver of Default Any failures or delays by either party in asserting any of its rights and remedies as to any default shall not operate as a waiver of any default or of any such rights or remedies, or deprive either such party of its right to institute and maintain any actions or proceedings which it may deem necessary to protect, assert or enforce any such rights or remedies. Section 6.5 Damages If a default is not fully cured by the defaulting party as provided in Section 6.1 after the close of escrow for the Site, the defaulting party shall be liable to the claimant for any damages caused by such default, and the claimant may thereafter (but not before) commence an action for damages against the other party with respect to such default. Prior to the close of escrow for the Site neither party shall be entitled to damages for a default of the other. Section 6.6 Specific Performance If a default under this Agreement is not fully cured by the defaulting party as provided in Section 6.1, the nondefaulting party at its option may thereafter (but not before) commence an action for specific performance of terms of this Agreement. -22- LAX2:124909.20 Section 6.7 Termination Prior to the Commission Conveyance A. Termination bv the Developer AUGUST 28. 1995 Prior to the conveyance of the Site to Developer, the Developer may terminate this Agreement and its obligations thereunder (subject to Paragraph D below) for any of the following reasons: 1. the Commission does not convey title and possession of Site in the manner and condition and by the date provided in this Agreement 2. the Commission defaults in the performance of any material obligation hereunder and such failure is not cured within the time required by this Agreement 3. Commission does not agree to remove title exceptions subject to Developer's right to remove such exceptions as provided in Section 2.6; 4. Developer disapproves the results of the environmental investigation as provided in Section 2.7; 5. the conditions precedent to conveyance of the Site pursuant to Section 2.2 have not been fulfilled by May 1, 1996; or 6. the Developer elects not to pay the costs of removal or remediation of contaminated materials or toxic or hazardous wastes in excess of $25,000.00 as provided in Section 2.8.A. B. Termination bv the Commission Prior to the conveyance of the Site to Developer, the Commission may terminate this Agreement and its obligations thereunder (subject to Paragraph D below) for any of the following reasons: 1. prior to the conveyance of the Site the Developer (or any successor in interest) assigns or attempts to assign the Agreement or any rights therein or in the Site in violation of this Agreement; 2. prior to conveyance of the Site there is a change in the ownership or management of the Developer contrary to the provisions of Section 1.7 hereof; i -23- LAX2:124909.20 3. Commission disapproves the results of the environmental investigation as provided in Section 2.7 if remediation of the Site exceeds the amount of Twenty Five Thousand Dollars ($25,000.00) for such remediation; 4. the Developer does not submit certificates of insurance, construction plans, drawings or related documents as required by this Agreement, in the manner and by the dates respectively provided in this Agreement; 5. the Developer does not take title to Site under tender of conveyance by the Commission pursuant to this Agreement; 6. the conditions precedent to conveyance of the Site pursuant to Section 2.2 have not been fulfilled by May 1, 1996; 7. Developer is unable to obtain evidence of financing as required by Section 2.3; or 8. the Developer elects not to pay the costs of removal or remediation of contaminated materials or toxic or hazardous wastes in excess of $25,000.00 as provided in Section 2.8.A. C. Procedure for Termination In order to terminate this Agreement prior to conveyance of the Site to Developer for any reason set forth in Paragraph A or B above, the party proposing to terminate shall deliver written notice of its intent to do at least fifteen (15) days prior to the proposed date of termination and stating the reasons for termination. The party proposing to terminate the Agreement may withdraw the proposed termination or extend the effective date at any time prior to the effective date of the termination. D. Conseauences of Termination In the event of termination of this Agreement in accordance with this Section, neither party shall have any rights or recourse against the other, except in the case of termination pursuant to Paragraph A.1, A.2., B.1, B.2, or B.5, in which event the terminating party shall be entitled to such legal remedies as are available under this Agreement. E. Full Termination of Develoners Rights and Interests as of Mav 22, 1996. '", In the event that on or before May 22, 1996 Developer has not accepted conveyance of the Site from the Commission, then all Developer's rights and interests in the Project, this -24- AUGUST 28. 1995 LAX2:124909.20 AUGUST 28. 1995 Agreement shall terminate and be of no further force and effect. The parties agree that Section 5.3, Enforced Delay, shall not excuse, prevent, delay or otherwise affect this termination date and that this termination date shall apply regardless of the reasons for delay and regardless of the good faith efforts of the parties to meet this deadline ARTICLE VII REVESTING OF TITLE IN AGENCY Section 7.1 Power of Termination and Right of Reentry and Revesting. Title in the Commission After Commission Conveyance A. The Commission has the additional right of termination, at its option, to reenter and take possession of the Site, with all improvements thereon, and terminate and revest in the Commission the estate conveyed to the Developer if prior to the issuance of the Certificate of Completion, the Developer shall: 1. fail to start the construction of the improvements as required by this Agreement or 2. abandon or substantially suspend construction of the improvements required by this Agreement for a period of thirty (30) days; or 3. transfer or suffer any involuntary transfer of the Site or any part thereof in violation of this Agreement; or 4. commit any other material default pursuant to this Agreement which is not cured as required by this Agreement. B. Such power of termination and the right to reenter, terminate and revest shall not be exercised, unless the Executive Director of the Commission has given Developer thirty (30) days written notice of the material default and Developer has failed to cure such default within the 30 day period. C. Such power of termination and the right to reenter, terminate and revest shall not be exercised with respect to any portion of the Site as to which a Certificate of Completion has been issued for all improvements to be constructed on such portion of the Site pursuant to this Agreement. D. Such power of termination and the right to reenter, terminate and revest shall further be subject to and be limited by and shall not defeat, render invalid or limit: -25- 1 1 LAX2:124909.20 -26- AUGUST 28. 1995 1. any mortgage or deed of trust permitted by this Agreement; or 2. any rights or interests provided in this Agreement for the protection of the holders of such mortgages or deed of trust. E. In the event the notice of termination and reentry is served upon Developer during the time foreclosure proceedings with respect to the Site are pending against the Developer with regard to a mortgage or deed of trust authorized by this Agreement, Agency agrees not to proceed with the termination and reentry for a period of six (6) months after the date of such notice in order to allow the holder of the mortgage or deed of trust an adequate opportunity to cure the default or to sell the Site to a qualified purchaser, provided, however that the holder of the mortgage or deed of trust is proceeding in a diligent and reasonable manner to cure the default or find a qualified purchaser for the Site in accordance with the terms of this Agreement. F. The Grant Deed (Exhibit No. 5) shall contain appropriate reference and provision to give effect to the Commission's right as set forth in this Section, under specified circumstances prior to recordation of the Certificate of Completion, to reenter and take possession of the Site, with all improvements thereon, and to terminate and revest in the Commission the estate conveyed to the Developer. G. Upon the revesting in the Commission of title to the Site as provided in this Section, the Commission shall, pursuant to its responsibilities under state law, use its best efforts to resell the Site in such manner as the Commission shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it may be amended, to a qualified and responsible party or parties (as determined by the Commission) who will assume the obligation of making or completing the improvements, or such other improvements in their stead as shall be satisfactory to the Commission and in accordance with the uses specified for such Site or part thereof in the Redevelopment Plan. Upon such resale of the Site, the proceeds thereof shall be applied: 1. First, any encumbrances or liens permitted by this Agreement existing on the Site at the time of revesting of title thereto in the Commission; and 2. Second, to reimburse the Commission, for all costs and expenses incurred by the Commission, including, but not limited to, any expenditures by the Commission or the City in connection with the recapture, management and resale of the Site or part thereof (but less any income derived by the Commission from the Site or part thereof in connection with such management); all taxes, assessments and water or LAR2:124909.20 ARTICLE VIII SPECIAL PROVISIONS AUGUST 28. 1995 sewer charges with respect to the Site or part thereof which the Developer has not paid (or, in the event the Site is exempt from taxation or assessment or such charges during the period of ownership thereof by the Commission, an amount, if paid, equal to such taxes, assessments, or charges as would have been payable if the Site were not so exempt); any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Site, or part thereof; and any amounts otherwise owing the Commission; 3. Third, to pay to the Developer, or its successor or transferee, the balance then remaining. Section 8.1 Submission of Documents to the Commission for Anoroval Whenever this Agreement requires the Developer to submit plans, drawings or other documents to the Commission for approval, which shall be deemed approved if not acted on by the Commission within the specified time, said plans, drawings or other documents shall be accompanied by a letter stating that they are being submitted and will be deemed approved unless rejected by the Commission within the stated time. If there is no time specified herein for such Commission action, the Developer may submit a letter requiring Commission approval or rejection of documents within thirty (30) days after submission to the Commission or such documents shall be deemed approved. Section 8.2 Amendments to this Agreement The Developer and the Commission agree to mutually consider and to negotiate in good faith such reasonable requests for amendments to this Agreement which may be made by lending institutions, or Commission's counsel or financial consultants, provided said requests are consistent with this Agreement and would not substantially alter the basic business terms included herein. -27- LAX2:124909.20 Section 8.3 Real Estate Commission Commission has not engaged any brokers, agents or finders with respect to this transaction or the Site. Developer has retained Kristoff - Manarino in connection with the Site and the project described herein and agrees to be solely responsible for and to pay the commission for Kristoff- Manarino. Developer shall pay all other claims of brokers, agents or finders, licensed or unlicensed, and all claims of real estate or other consultants Developer has or is alleged to have retained for the Site or the project which exist or may arise with respect to the Site or project. Commission shall not be liable for any such fees and Developer shall indemnify Commission, its officers, employees and agents, from any and all costs, liabilities or judgments, including attorneys' fees, incurred in defending or paying any such claims. Section 8.4 Entire Agreement. Waivers & General AUGUST 28. 1995 A. This Agreement is executed in three (3) duplicate originals, each of which is deemed to be an original. This Agreement includes pages 1 through 29 and Exhibits 1 through 6, which constitutes the entire understanding and agreement of the parties. B. This Agreement integrates all of the terms and conditions mentioned herein or incidental hereto, and supersedes all negotiations or previous agreements between the parties or their predecessors in interest with respect to all or any part of the subject matter hereof. The parties acknowledge and agree that prior agreement between the parties dated November 10, 1992, terminated by its terms and that said agreement is of no further force and effect. C. All amendments hereto must be in writing executed by the appropriate authorities of the Commission and the Developer. D. In any circumstance where under this Agreement either party is required to approve or disapprove any matter, approval shall not be unreasonably withheld. E. Both Parties are sophisticated buyers and sellers of real property and have participated in the drafting of this Agreement. Section 8.5 Time For Acceptance Of Agreement By Commission This Agreement, when executed by the Developer and delivered to the Commission, must be authorized, executed and delivered by the Commission on or before thirty (30) days after signing and delivery of this Agreement by Developer or this Agreement shall be void, except to the extent that the Developer shall consent in writing to a further extension of time for the authorization, execution and delivery of this Agreement. The date of this Agreement shall be the date when it shall have been signed by the Commission. -28- LWX2:124909.20 IN WITNESS WHEREOF, the Commission and the Developer have signed this Agreement as of the date first written above. COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY By: Gary P. McCaughan, M.D., Chairperson ATTEST: Judith E. McDonnell, Secretary APPROVED AS TO FORM: Cheryl J. Kane, General Counsel KRIKORIAN PREMIERE THEATRES, INC. By. George Krikorian, President By: George Krikorian, Secretary -29- AUGUST 28. 1995 1 1 1 LJX2:124909.20 AUGUST 28. 1995 CERTIFICATE OF ACKNOWLEDGMENT State of California ) County of Los Angeles ) On , 1995, before me, , personally appeared personally known to me (or 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. WITNESS my hand and official seal. SIGNATURE OF NOTARY State of California ) County of Los Angeles ) CERTIFICATE OF ACKNOWLEDGMENT On , 1995, before me, , personally appeared personally known to me (or 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. WITNESS my hand and official seal. SIGNATURE OF NOTARY CERTIFICATE OF ACKNOWLEDGMENT LAX2:124909.20 State of California County of Los Angeles On , 1995, before me, , personally appeared personally known to me (or 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. .._. _ WITNESS my hand and official seal. SIGNATURE OF NOTARY State of California County of Los Angeles CERTIFICATE OF ACKNOWLEDGMENT WITNESS my hand and official seal. SIGNATURE OF NOTARY AUGUST 28. 1995 On , 1995, before me, , personally appeared personally known to me (or 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. 1 LAX2:124909.20 EXHIBIT NO. 1 MAP OF SITE AUGUST 28. 1995 EXHIBIT NO. 1 1761.d t .® 0 _Dtbd AREA sac= t rr . . Too saww & 1 • � ' .K•••••8' ar MAP OF SITE EXHIBIT No.. 1 SCHEMATIC PLAN 3NL0 STR EST • t-- o • o wammo P421G1 NJ a 2 N0 STt e 0 o 0 k e a •L MIa y ® • Soa PAD .V 80 W . at40 5T. 4 • 1•6141 STET t0v.u.1Y. �'�aorarsri r.lNasr ■ AUGUST 28. 1995 LAX3: 124909.20 EXHIBIT NO. 1A MAP OF ALTERNATIVE SITE EXHIBIT NO. 1A MAP OF ALTERNATIVE SITE EXHIBIT No. lA SCHEMATIC PLAN 579 =_E7 PQR F<1i�iG V:+tbr I fci > N L 7 1 ! f i ( i!!''I r1 - gin . 7 - iT( i .:1 �1— 1 1 :, < L r ' ' 3Y ° G' 34-L' - r(ol 1 're 33' 33' iiZ I j 1 J q� u y S - W. Q z o = _n _ri la f i / rT_ "fl h -s %. " tl 1 _ ( - - � - . 1 TaN1K : 4 1.___.: ca a w 1 9 11 i� 'i» I •o11 • 1i & v • j . { ' : l :raPW1 users . i•� 1 (s i 1-.111-1 1 1 s i 1 1 4. 1.4.- •'? ..�. i . �a . s• , , t . f 1� ,l:.f•• 1 ii*' i Lu b i 7 So• "4/ sirs ►� ii-,..4 - _6/30/..15 . 0, -Q: • . . _ • . e�� .i 163 - P�O� .�.D::9PL�.T�Rt:- CDRIA�.�.4T"�5 RRE SO, COO =t 0 s' �o� •�T!- -1 At. R INA AV= e-a.b0 5 .Mw.KY,.CA. = sA.eAG.Tn 1 5aAj5 =. u.FJ �'•r :.T_ES -QK =S mA' ::;)222-14x5 I •- 1W- 574Y =;' -'4 ' soL e 1 LAX2:124909.20 EXHIBIT NO. 2 LEGAL DESCRIPTION OF SITE AUGUST 28. 1995 EXHIBIT NO. 2 EXHIBIT NO. 2 LEGAL DESCRIPTION OF SITE That portion of Block 14, Tract of the Downey land Associa- tion, in the City of Downey, County of Los Angeles, State of California, as shown on map recorded in Book 2, page 434, of Miscellaneous Records, in the office of the Registrar- Recorder of said County, which lies within Lot 138, as shown on map filed in Book 4, pages 76, 77, and 78, of Official Maps, in the office of said Registrar- Recorder. Excepting therefrom those portions thereof which lie within those certain parcels of land described as Parcels A and B in a resolution of the Board of Supervisors of said County, a certi- fied copy of which was recorded as Document No. 4051, on April 20, 1965, in Book D2875, page 245, in the office of said Regis- trar- Recorder. r-, AUGUST 28. 1995 LAX2,124909.20 EXHIBIT NO. 2A LEGAL DESCRIPTION OF ALTERNATIVE SITE EXHIBIT NO. 2A EXHIBIT NO. 2A LEGAL DESCRIPTION OF ALTERNATIVE SITE Parcel 1 That portion of block 14 of the tract of the Downey Land Associa- tion, in the city of Downey, county of Los Angeles, state of California, as per map recorded in book 2 page 434 of Miscella- neous Records, in the office of the county recorder of said coun- ty, it appearing that said block 14 is divided into lots in the same relative positions and sizes as shown on block 10 of the above mentioned map by recital in a deed of a portion of said block 14 from John G. Downey, recorded on June 2, 1887, as In- strument No. 267 -1, in book 218 page 531 of Deeds, records of said county, described as follows: Beginning at a point in the northeasterly line of 2nd Street, 60 feet wide, distant southeasterly along said northeasterly line 215.00 feet from the southeasterly line of La Reina Avenue, 60 feet wide (formerly Depot Street) said point being the most west- erly corner of land described in deed to Zella H. Buck, recorded on January 23, 1917, as Instrument No. 26, in book 6351 page 239 of Deeds, records of said county; thence along said northeasterly line of 2nd Street South 57° 09' 30 East 40.00 feet to the most southerly corner of said land described in said deed; thence along the southeasterly line of said land described in said deed North 32° 50' 30" East 125.00 feet to the most easterly corner of land described in said deed; thence along the northeasterly line of said land described in said deed North 57° 09' 30" West 40.00 feet to the most northerly corner of said land described in said -1- ,..� AUGUST 28. 1995 1. Execution of Agreement Agreement shall be authorized, executed and delivered by Developer to Commission. 2. Anoroval - Renderings and Plans Commission shall approve, conditionally approve, or disapprove the renderings and plans submitted by the Developer, which renderings shall be for at least the motion picture theater and which plans shall be for the entire Site. 3. Final Drawings and Specifications Developer shall submit final construction drawings, specifications and related documents to the City for issuance of building permits for at least the motion picture theater. 4. Financing Progress Report Developer shall submit a Financing Progress Report to the Commission which provides evidence of commitments from lenders for financing of the Project and evidence of Developer's sources of equity for the financing, as well as the Developer's progress in securing financing for the Project. 5. Financing Commitments Developer shall obtain a commitment for financing the Project pursuant to Section 2.4. L1}? :124909.20 EXHIBIT NO. 3 SCHEDULE OF PERFORMANCE On or before September 26, 1995 On or before December 30, 1995 On or before January 30, 1996 On or before March 15, 1996 On or before May 1, 1996 EXHIBIT NO. 3 6. Issuance of Buildins Permits Subject to fulfillment of this Agreement, and subject to all applicable City Codes, City shall issue building permits with respect to the Project as shown on the final drawings and specifications submitted pursuant to Item 4. AUGUST 28. 1995 On or before May 1, 1996 7. Conveyance of Title or Possessory On or before May 1, 1996 Interest Commission shall convey possession and/or tide to Developer of the Site. 8. Commencement of Construction On or before May 22, 1996 Developer shall commence construction of the Project as shown on the final drawings and specifications submitted pursuant to Item 4. 9. Completion of Construction On or before November 22, 1996 Developer shall complete the construction of the Project as shown on the final drawings and specifications submitted pursuant to Item 4. w2:124909.20 EXHIBIT NO. 3 LAX2:124909.20 EXHIBIT NO. 4 ESCROW INSTRUCTIONS AUGUST 28. 1995 The Disposition and Development Agreement ( "Agreement ") by and between the Community Development Commission of the City of Downey ( "Seller ") and Krikorian Premiere Theatres, Inc., a California corporation, ( "Buyer ") and these Escrow Instructions are to be considered as escrow instructions to the Escrow Agent, and Escrow Agent is authorized to act hereunder insofar as closing escrow is concerned. 1. The Closing Date for escrow on the property to be conveyed shall be mutually agreed by the parties at the opening of escrow for that property. 2. As soon as possible after opening of escrow, Buyer will deposit an executed deed, in substantially the form attached to the Agreement as Exhibit No. 5, with Escrow Agent on Seller's behalf. Buyer agrees to deposit the purchase price upon demand of Escrow Agent. Buyer and Seller agree to deposit with Escrow Agent any additional instruments as may be necessary to complete this transaction. 3. Insurance policies for fire or casualty are not to be transferred, and Seller shall cancel its own policies after close of escrow. 4. All funds received in this escrow shall be deposited with other escrow funds in a general escrow trust account(s) and may be transferred to any other such escrow trust account in any State or National Bank doing business in the State of California. All disbursements shall be made by check for such accounts. 5. Escrow agent is authorized and instructed to comply with the following tax adjustment procedure: (i) Pay and charge Seller for any unpaid delinquent taxes and/or any penalties and interest thereon, and for any delinquent or non - delinquent assessments or bonds against the property; (ii) Escrow is not to be concerned with proration of Seller's taxes for current fiscal year if this escrow closes between July 1 and November 1 unless current tax information is available for title insurer. In the event said tax information is available, Seller's taxes shall be prorated in accordance with Paragraph (iii) below. ,., From July 1 and the ensuing period, when tax information is not available, Seller's prorata portion of taxes due to close of escrow, shall be cleared and paid by Seller, EXHIBIT NO. 4 WX2:124909.20 AUGUST 28. 1995 outside of escrow pursuant to provisions of Section 5082 through 5090 of the Revenue and Taxation Code of the State of California. If Escrow Agent and/or Title Insurer is unwilling to insure the title free and clear of such taxes as a result of that procedure, then in lieu thereof, taxes shall be prorated based on the latest available tax statement. (iii) From the date that tax information is available, as per Paragraph (ii) above, up to and including June 30, Seller's current taxes, if unpaid, shall be prorated to date of close of escrow on the basis of a 365 -day year in accordance with Tax Collector's proration requirements together with penalties and interest if said current taxes are unpaid after December 10 and April 10. (iv) Any taxes which have been paid by Seller, prior to the opening of this escrow, shall not be prorated between Buyer and Seller, but Seller shall have the sole right, after close of escrow to apply to the County Tax Collector of said County for refund of such taxes which may be due Seller for the period after Buyer's acquisition pursuant to Revenue and Taxation Code Section 5096.7. 6. Escrow agent is authorized to, and shall: (i) Pay and charge Seller for any amount necessary to place title in the condition necessary to satisfy Agreement; (ii) Pay and charge Buyer and Seller for any escrow fees, charges and costs payable under this Agreement; (iii) Disburse funds and deliver deed when conditions of this escrow have been fulfilled by Buyer and Seller. (iv) Obtain the necessary certification or withhold the necessary funds from the purchase price pursuant to Internal Revenue Code Section 1445. (v) Obtain all necessary certifications or other documents required by State or Federal law. 7. Recordation of instruments delivered through this escrow is authorized if necessary or proper in the issuance of said policy of title insurance. All time limits within which any matter herein specified is to be performed may be extended by mutual agreement of parties hereto. Any amendment of, or supplement to, any instructions must be in writing. EXHIBIT NO. 4 1 L2X2:1249O9.20 AUGUST 28. 1995 8. Time is of the essence in these instructions and escrow is to close as soon as possible in accordance with this Agreement. 9. A. If Escrow Agent receives notice of termination of this escrow from either party as provided in the Agreement, Escrow Agent shall promptly notify in writing the party not terminating the escrow of Escrow Agent's receipt of the notice to terminate. After the expiration of ten (10) business days from the date Escrow Agent delivers such notice, Escrow Agent shall return to each of the parties the funds and documents deposited in escrow unless Escrow Agent receives written objection from the party not terminating the escrow. B. In the event of such an objection, Escrow Agent shall retain all funds and documents until it receives written instructions from both parties as to the disposition of the funds or documents or a certified copy of a final judgment or order of a court of competent jurisdiction resolving the rights of the parties. A judgment or order shall be deemed final when all time for appeal, rehearing or other comparable procedure has expired without any such proceeding having been commenced. C. Any termination of the escrow shall be without prejudice to the rights either party may have against the other for any breach of covenant or warranty or any misrepresentation under the Agreement. 10. Each party shall share equally all usual fees, charges and costs which arise in this escrow. EXHIBTT NO. 4 LAX2:124909.20 11. The parties shall execute such additional instructions as requested by the Escrow Agent not inconsistent with the provisions of the Agreement and these Escrow Instructions and which are necessary or convenient to carry out the intent of the Agreement. COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY (SELLER) KRIKORIAN PREMIERE THEATRES, INC. (BUYER) By Gerald M. Caton Executive Director George Krikorian President AUGUST 28. 1995 EXHIBIT NO. 4 LAX2:124909.20 Recording Requested By: And After Recordation Mail To: EXHIBIT NO. 5 GRANT DEED Executive Director Downey Community Development Commission 11111 Brookshire Avenue Downey, California 90241 GRANT DEED AUGUST 2S. 1995 For valuable consideration, the receipt of which is hereby acknowledged, The COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY, a public body, corporate and politic, of the State of California, (the "Grantor ") acting to carry out the Redevelopment Plan (the "Redevelopment Plan") for the Downey Redevelopment Project under the Community Redevelopment Law of the State of California, hereby grants to , a California corporation, (the "Grantee") the real property (the "Site") legally described in the document attached hereto as Exhibit A and incorporated herein by this reference, subject to the following covenants, conditions and restrictions: 1. Conveyance Subiect to Redevelonment Plan and Disposition and Development Agreement The Site is conveyed subject to the Redevelopment Plan and that certain Disposition and Development Agreement entered into by and between the Grantor and Krikorian Premiere Theatres, Inc. and dated , 1995 (the "DDA "). The DDA is incorporated herein by reference and supersedes any conflicting provisions in this Grant Deed. EXHIBIT NO. 5 LAX2:124909.20 2. Use Restrictions (b) Grantee further covenants and agrees for itself and every successor in interest to the multi -plex motion picture theater, that the theater shall be operated in such a manner as to provide the broadest appeal to the public and therefore agrees not to show motion pictures which (i) are or would be rated "X" by the Academy of Motion Picture Arts and Sciences under its current rating system, or (ii) whose primary content is the depiction of acts of sexual intercourse or oral copulation. AUGUST 28. 1995 (a) The Grantee covenants and agrees for itself and every successor in interest to the Site, or any part thereof, that during construction of the Project as described in the DDA and thereafter for a period of ten (10) years from the date of the issuance of the certificate of occupancy for the multi-plex movie theater by the City of Downey, Grantee, and such successors, shall use, and devote the Site to use, as a multi-plex motion picture theater, as described in Section 3.1 of the DDA, which shows quality motion pictures and a separate restaurant, as described in Section 3.1. Uses incidental to the motion picture theater, consisting of (i)) the sale of confections, soft drinks, and other concession stand food items as are customarily sold in a motion picture theater, (ii) the sale of video tapes and movie memorabilia, and (iii) the operation of coin or token operated amusement machines, shall also be permitted. 3. Maintenance Covenants Subsequent to the issuance of a Certificate of Completion pursuant to the DDA, the Grantee and all successors in interest to the Site, or any part thereof, shall be obligated to maintain the Site, and all improvements and landscaping situated thereon, in accordance with approved plans, in a clean and neat condition and in a continuous state of good repair. In the event the Grantee fails to maintain the Site as required by this Grant Deed, the Grantor shall notify Grantee in writing of such failure and specify the work necessary to meet the maintenance obligation. In the event the work specified is not completed within thirty (30) days of the date of said notice, the Grantor may enter the Site, complete the work, and bill Grantee for the cost of said work. 4. Prohibition on Discrimination (a) The Grantee covenants by and for itself and any successors in interest 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, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall the Grantee 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, EXHIBIT NO. 5 .-, AUGUST 28. 1995 LAX2:124909.20 location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees of the Site. (b) All deeds, leases or contracts made relative to the Site shall contain or be subject to substantially the following nondiscrimination and nonsegregation clauses: (1) In deeds: "The grantee herein covenants by and for himself or herself, his or her heirs, executors, administrators 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, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants, sublessees or vendees in the land herein conveyed. The foregoing covenants shall run with the land." (2) In leases: "The lessee herein covenants by and for himself or herself, his or her heirs, executors, administrators and assigns, and all persons claiming under or through them, and this lease is made and accepted upon and subject to the following conditions: (3) "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, age, handicap, national origin or ancestry in the leasing, subleasing, transferring, use, occupancy, tenure, or enjoyment of the premises herein leased, nor shall the lessee himself or herself, or any person claiming under or through him or her, 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, sublessees, subtenants or vendees in the premises herein leased." 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, age, handicap, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the premises, nor shall the transferee himself or herself, or any person claiming under or through him or her, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or EXHIBIT NO. 5 L3X2:1249O9.2O AUGUST 28. 1995 occupancy of tenants, lessees, sublessees, subtenants or vendees in the premises." 5. Restriction on Transfer and Sale of Site (a) The qualifications and identity of Grantee is of particular concern to the Grantor. It is because of its qualifications and identity that the Grantor hereby conveys the Site to Grantee. Therefore, no voluntary or involuntary successor in interest of the Grantee shall acquire any rights or powers under this Grant Deed, except as expressly set forth herein. (b) The Grantee shall not assign all or any of its rights or duties under this Grant Deed or to any portion of the Site, including any transfer of ownership or change of control of the Grantee, without the prior written approval of the Grantor, which approval the Grantor shall not unreasonably withhold, provided the Grantor determines that the successor is similarly qualified and has specifically agreed in writing to be bound by the provisions of this Grant Deed and, in the event the assignment effects only a portion of the Site, that the Grantor additionally determines that the portion is the restaurant pad depicted on the Site Map that is incorporated into the DDA. 6. Grantor's Power of Termination and Richt to Reenter Site (a) This conveyance is made by Grantor and accepted by Grantee, subject to the Grantor's power of tennination and right, at its option, to reenter and take possession of the Site, with all improvements thereon, and terminate and revest in the Grantor the estate conveyed to the Grantee if prior to the issuance of the Certificate of Completion, the Grantee shall: (1) Fail to start the construction of the improvements as required by the DDA; or (2) Abandon or substantially suspend construction of the improvements required by the DDA for a period of thirty (30) days; or (3) Transfer or suffer any involuntary transfer of the Site or any part thereof in violation of the DDA; or (4) Commit any other material default pursuant to the DDA which is not cured as required by the DDA. (b) Such power of termination and the right to reenter, terminate and revest shall not be exercised, unless the Executive Director of the Grantor has given Grantee thirty (30) EXHIBIT NO. 5 1 ,..� AUGUST 28. 1995 LAX2 :126909.20 days written notice of the material default and Grantee has failed to cure such default within the 30 day period. (c) Such power of termination and the right to reenter, terminate and revest shall not be exercised with respect to any portion of the Site as to which a Certificate of Completion has issued for all improvements to be constructed on such portion of the Site pursuant to the DDA. (d) Such power of termination and the right to reenter, terminate and revest shall further be subject to and be limited by and shall not defeat, render invalid or limit: (1) Any mortgage or deed of trust permitted by the DDA; or (2) Any rights or interests provided in the DDA for the protection of the holders of such mortgages or deed of trust. (e) In the event the notice of termination and reentry is served upon Grantee during the time foreclosure proceedings with respect to the Site are pending against the Grantee with regard to a mortgage or deed of trust authorized by the DDA, Grantor agrees not to proceed with the termination and reentry for a period of six (6) months after the date of such notice in order to allow the holder of the mortgage or deed of trust an adequate opportunity to cure the default or to sell the Site to a qualified purchaser, provided, however that the holder of the mortgage or deed of trust is proceeding in a diligent and reasonable manner to cure the default or find a qualified purchaser for the Site in accordance with the terms of the DDA. (f) Upon the revesting in the Grantor of title to the Site as provided in this Section, the Grantor shall, pursuant to its responsibilities under state law, use its best efforts to resell the Site in such manner as the Grantor shall find feasible and consistent with the objectives of such law and of the Redevelopment Plan, as it may be amended, to a qualified and responsible party or parties (as determined by the Grantor) who will assume the obligation of making or completing the improvements, or such other improvements in their stead as shall be satisfactory to the Grantor and in accordance with the uses specified for such Site or part thereof in the Redevelopment Plan. Upon such resale of the Site, the proceeds thereof shall be applied: (1) First, any encumbrances or liens permitted by the DDA existing on the Site at the time of revesting of title thereto in the Grantor and (2) Second, to reimburse the Grantor, for all costs and expenses incurred by the Grantor, including, but not limited to, any expenditures by the Grantor or the EXHIBIT NO. 5 LIX2:12 4909.20 (3) City in connection with the recapture, management and resale of the Site or part thereof (but less any income derived by the Grantor from the Site or part thereof in connection with such management); all taxes, assessments and water or sewer charges with respect to the Site or part thereof which the Grantee has not paid (or, in the event the Site is exempt from taxation or assessment or such charges during the period of ownership thereof by the Grantor, an amount, if paid, equal to such taxes, assessments, or charges as would have been payable if the Site were not so exempt); any expenditures made or obligations incurred with respect to the making or completion of the improvements or any part thereof on the Site, or part thereof; and any amounts otherwise owing the Grantor, and Third, to pay to the Grantee, or its successor or transferee, the balance then remaining. 7. Term and Enforcement of Covenants AUGUST 28. 1995 (a) Of the covenants which have been established pursuant to this Grant Deed in Paragraphs 2, 3, and 4, the same shall be deemed to be covenants running with the land for the benefit of the Project Area and the Grantor in carrying out its statutory responsibilities under California Redevelopment Law (Health and Safety Code Sections 33000 et seg.) to implement the Redevelopment Plan. Such covenants shall run in favor of the Grantor for the entire period during which such covenants shall be in force and effect, without regard to whether the Grantor is or remains an owner of any land or interest therein to which such covenants relate. (b) Covenants relating to construction of improvements on the property shall expire upon the issuance by Grantor of a Certificate of Completion as to the Site. Covenants relating to the use of the Site shall expire ten (10) years after the date of the issuance of the certificate of occupancy for the multi-plex movie theater by the City of Downey. The covenants relating to maintenance in this Grant Deed and covenants against discrimination contained in this Grant Deed shall remain in perpetuity. (c) The Grantor, in the event of any breach of any such covenants, shall have the right to exercise all of the rights and remedies provided by law or in equity, and to maintain any actions at law or suits in equity or other proper proceedings to enforce the curing of such breach. The covenants contained in this Grant Deed shall be for the benefit of and shall be enforceable only by the Grantor and its successors. EXHIBIT NO. 5 1 LAX2:124909.20 AUGUST 28. 1995 IN WITNESS WHEREOF, the Grantor and Grantee have caused this instrument to be executed on their behalf by their respective officers thereunto duly authorized, this day of , 1996. GRANTOR COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF DOWNEY By: Gary P. McCaughan, M.D. Chairperson ATTEST: Judith E. McDonnell Secretary APPROVED AS TO FORM: Cheryl J. Kane General Counsel EXHIBIT NO. 5 LAX2:124909.20 AUGUST 28. 1995 The provisions of this Grant Deed are hereby approved and accepted. GRANTEE B By: George Krikorian President George Krikorian Secretary EXHIBIT NO. 5 1 n 1 .•. AUGUST 28. 1995 L71X2:124909.20 . EXHIBIT A Leval Description [to be inserted prior to close of escrow] EXHIBIT NO. 5 LAX2:124909.20 AUGUST 28. 1995 CERTIFICATE OF ACKNOWLEDGMENT State of California ) County of Los Angeles ) On , 1996, before me, , personally appeared personally known to me (or 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. WITNESS my hand and official seal. SIGNATURE OF NOTARY State of California County of Los Angeles CERTIFICATE OF ACKNOWLEDGMENT On , 1996, before me, , personally appeared personally known to me (or 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 signatures) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. WITNESS my hand and official seal. SIGNATURE OF NOTARY EXHIBIT NO. 5 r—. .�. AUGUST 28. 1995 LAX2:124909.20 State of California ) County of Los Angeles ) CERTIFICATE OF ACKNOWLEDGMENT On , 1996, before me, , personally appeared personally known to me (or 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. WITNESS my hand and official seal. SIGNATURE OF NOTARY State of California County of Los Angeles CERTIFICATE OF ACKNOWLEDGMENT On , 1996, before me, , personally appeared personally known to me (or 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. WITNESS my hand and official seal. SIGNATURE OF NOTARY EXHIBIT NO. 5 LAX2 :124909.20 EXHIBIT NO. 6 GUARANTY AUGUST 28. 1995 In consideration of the approval of Resolution No. (the "Resolution ") by the City Council of the City of Downey (the "City Council "), whereby the fee simple owner of the property described in the Resolution (the "Owner ") is obligated to make regular payments in lieu of providing certain off -street parking for the Project described in that certain Disposition and Development Agreement dated , 1995 by and between the Community Development Commission of the City of Downey and Krikorian Premiere Theatres, Inc. (the "DDA "), George Krikorian and Krikorian Premiere Theatres, Inc. (collectively Guarantor) jointly and severally guarantee to the City of Downey (the "City") said payments as provided herein. Guarantor agrees to pay on demand any sum that may become due the City pursuant to the Resolution whenever the Owner fails to make timely payment. Guarantor further agrees that the City may proceed against Guarantor directly and independently of the Owner and that the cessation of the liability of the Owner for any reason, other than full payment of all sums due and owning the City pursuant to the Resolution, shall not in any way affect the liability of Guarantor hereunder. It is understood that the liability of Guarantor is subject to the following terms and conditions: 1. The amount of the guarantee shall never exceed the unpaid balance of the payments due and owning the City pursuant to the Resolution. 2. Upon the assignment of the rights and duties of Krikorian Premiere Theatres, Inc. to the entire Site, as provided in Section 1.5.B of the DDA, whether the Site is the Third Street Parcel or the Second Street Parcel as the same are described in the DDA, the guarantee provided by Krikorian Premiere Theatres, Inc. and the guarantee provided by George Krikorian shall cease upon the written consent of the City Council and thereafter this guaranty shall be of no further force and effect. The City Council shall not unreasonably withhold its consent, provided that if the City Council determines, in its sole discretion, to require a replacement guaranty or replacement guaranties, the City Council is satisfied that the guarantor is, or guarantors are, financially qualified to replace Krikorian Premiere Theatres, Inc. and George Krikorian, as evidenced by an audited financial statement, dated not more than three (3) months prior to the date that the consent is to become effect, for each guarantor. EXHIBIT NO. 6 �1 LAX2:124909.20 By: 3. On or after the fifth anniversary of the date on which the first payment was made to the City pursuant to the Resolution, the guarantee provided by George Krikorian shall cease upon the written consent of the City Council and thereafter this guaranty shall be of no further force and effect as to George Krikorian. The City Council shall not unreasonably withhold its consent, provided that (i) Krikorian Premiere Theatres, Inc. has a net worth of not less than One Million Five Hundred Thousand Dollars ($1,500,000), as evidenced by an audited financial statement dated not more than three (3) months prior to the date that the consent is to become effective, and (ii) the City Council is satisfied that the multi-plex motion picture theater component of the Project has operated at a profit during the prior twelve (12) month period, as evidenced by an audited financial statement dated not more than three (3) months prior to the date that the consent is to become effective. It is understood that the assignment of the DDA pursuant to Section 1.5.0 thereof is a condition precedent to the liability of Krikorian Premiere Theatres, Inc. as provided herein. Executed this _ day of , 1995. GEORGE KRIKORIAN KRIKORIAN PREMIERE THEATRES, INC. George Krikorian By: George Krikorian President By: George Krikorian Secretary AUGUST 28. 1995 EXHIBIT NO. 6 LAY2 =124909.20 The provisions of this Guaranty are hereby approved and accepted. Executed this _ day of , 1995. COMMUNITY DEVELOPMENT COMMISSION OF THE C1TY OF DOWNEY By: Gary P. McCaughan, M.D. Chairperson ATTEST: Judith E. McDonnell Secretary AUGUST 28. 1995 EXHIBIT NO. 6 This serves as the City of Downey's Notice of Intention to adopt the following mitigated Negative Declaration for the actions noted below. The City Planning Division will receive comments on this document from August 23 through September 11, 1995. The City Council and Community Development Commission are scheduled to hold public hearings to consider the proposed DDA, In -Lieu Parking Fee and Shared Parking on September 12, 1995 at 7:15 p.m. in the council chambers of Downey City Hall, 11111 Brookshire Avenue, Downey. BACKGROUND Proponents' Names, Addresses, Phone #s: 2. Date of Checklist: 3. Name of Proposal & Application Numbers: 4. Location: CITY OF DOWNEY INITIAL STUDY OF ENVIRONMENTAL IMPACTS City of Downey 11111 Brookshire Av. Downey, CA 90241 (310) 904-7289 August 18, 1995 Krikorian Theatres Disposition & Development Agreement (Krikorian DDA); Resolution for In -Lieu Parking Fee/Resolution for Shared Parking The 11000 block of La Reina Ave. bounded by La Reina, Third Street, New Street, and Second Street, in the City of Downey, Los Angeles Co- unty. LOCATION WITHIN DOWNEY 1 Krikorian Premiere Theatres, Inc. Pier Plaza Business Park 119 W. Torrance Blvd., Suite 1 Redondo Beach, CA 90277 (310) 318 -3363 THIRD ST. SECOND ST. r DOWNTOWN LOCATION w Z INITIAL STUDY OF ENVIRONMENTAL IMPACTS FOR THE DISPOSITION AND DEVELOPMENT AGREEMENT falilliE DOWNTOWN MULTIPLEX THEATER & RESTAURANT I. INTRODUCTION A. Introduction This Initial Study of Environmental Impacts evaluates the anticipated environmental consequenc- es of constructing and operating the three development components that comprise the Disposi- tion and Development Agreement (DDA) for the Downtown Multiplex Theater & Restaurant (also referred to throughout this document as the Project). The DDA is an agreement entered into between the Community Development Commission of the City of Downey (Commission) and Krikorian Premiere Theaters, Inc, the Developer. The three development components are a motion picture multiplex theater, a restaurant and a parking structure. A description of each is provided below in subsection "B ". According to the terms of the DDA, the Commission will convey the Project Site to the developer who in turn, will build a multiplex theater complex and restaurant on the northern portion of the Project site, approximately 1.04 acres, while the City of Downey will build a parking structure on the southern part. The lot slated for the parking structure contains approximately .74 acres. In addition to evaluating the construction impacts and the long -term effects of operating the three Project components, the Initial Study assesses the potential impacts of implementing two other related requests that are an integral part of the proposed Project. The first involves a request by the Developer to pay a fee in -lieu of providing certain required on -site parking. That is, the Project site is located in Parking Assessment District No. 66; according to Munici- pal Code Section 9150.18., the City Council may waive a portion of the required on -site park- ing for any parcel within the boundaries of a parking assessment district, provided the property owner pays to the City an amount to be determined by the City Council for each parking space waived. The second request is a proposal to consider the shared -use of a parking lot on proper- ty next to the Project site, and this parking lot will be shared between both parties. The Initial Study is organized into three sections. Section I briefly describes the terms of the DDA and its development components, identifies the location of the Project Site and describes the improvements that occupy neighboring properties. In addition, it outlines the environmental review process that staff conducted for this project, in accordance with the California Environ- mental Quality Act. Section II includes both the completed Environmental Checklist and the analysis for the items on the checklist marked "Yes ", "Maybe" and "No ". Section III or Appendix A contains the complete traffic impact analysis that assesses the effects of project - generated traffic. The Initial Study was prepared in accordance with Section 15063 of the Guidelines of the California Environmental Quality Act (CEQA). It's a preliminary analysis prepared by the City of Downey, also known as the Lead Agency, to determine whether a negative declaration or environmental impact report (EIR) is necessary to assess the potential environmental conse- quences of implementing the proposed Project. 2 The purpose of the Initial Study is to inform Downey's decision - makers, City staff, other public agencies and interested members of the public of the potential environmental impacts associated ,••• with the construction and long -term operation of the multiplex theater, the restaurant and park- ing structure. After completing the Initial Study, City staff determines whether the Project will or will not create any significant adverse environmental effects. If staff concludes project implementation will produce impacts that are considered less than significant or they can be reduced to less than significant levels by implementing mitigation measures, staff prepares a negative declaration. Conversely, if staff determines Project implementation will produce a significant adverse im- pact(s), an EIR will need to be prepared to assess the extent of the potential impacts and recom- mend mitigation measures to reduce them to a level of insignificance. The environmental analysis prepared for the proposed Project concluded its potential adverse effects can be reduced to levels of insignificance by implementing the suggested mitigation measures. As a result, City staff is preparing a proposed mitigated negative declaration for approval by the Community Development Commission and City Council. The Initial Study and proposed mitigated negative declaration will undergo a 20-day public review period. The review period will extend from August 23, 1995 to September 11, 1995. During that period, comments about the draft negative declaration relative to environmental issues or the proposed Project itself should be addressed to the Planning Division, 11111 Brook- shire Avenue, Downey, Ca 90241. The City in accordance with CEQA's Guidelines, will consider comments received as part of the Project's environmental review, and include them with the environmental documents for consideration by the Community Development Commis- sion and City Council. Both decision - making bodies are scheduled to conduct joint public hearings on the DDA, as well as the request to provide for the payment of a fee hi -lieu of certain on -site parking and for the approval of shared -use parking on September 12, 1995. The Community Development Commission and City Council will meet in the Council Chamber of Downey City Hall, which is located at 11111 Brookshire Avenue. The hearings are scheduled to be at 7:15 PM. B. Project Location/Descrintion The Project Site is located in Downtown Downey; it encompasses a city block comprised of two (2) parcels in the center of Downtown and contains 1.78 acres. The streets that border the Project site are: Third Street on the north, New Street on the east, Second Street on the south and La Reina Avenue on the west (See Cover Sheet). The multiplex theater will contain approximately 31,000 sq. ft. with a capacity of 1,700 seats. The restaurant will contain up to 6,500 sq. ft. The multiplex theater and restaurant will be developed next to each other in the northerly portion of the Project site, while the parking structure will occupy the southerly part. Exhibit #1 shows the location of the Project's three components. As the exhibit illustrates, the proposed restaurant will face New Street, while the entrance to the theater will be at the southwest corner of New and Third Streets. The proposed parking structure will have two levels and provide between 210 and 220 spaces. It will front on New Street, Third Street and La Reina Avenue; vehicles will be able to access the structure from both New Street and La Reina Avenue. 3 wq 1 I ~` o • • s • a @ 4 @ . _ e li 71„, 4.* Her m. s.1.: -abuses ARak 31 o=,,b sr ..GVi estr y7ocmut . 34t0 672E3 ll Qa.Sii4t14 G •1410 ZiPga Exhibit 1: Downtown Multiplex Theater & Restaurant Site Plan Si. IeSuriurANT PAD .1 or ap t k n X01" Td=ATM 9taD S. ; ma 'Eri* OO■1JEr CA A • f i fi r'r nre umlos" 1 In addition to the parking structure, parking for the multiplex theater and restaurant is proposed for the surface -level lot on the south side of Second Street. Specifically, the 189 -space lot on the property at the northwest corner of Firestone Boulevard and Downey Avenue which pro - vides parking for that property's 5 -story office building. These parking spaces would be avail- able for theater and restaurant patrons after 6:00 PM, Mondays through Fridays, after 1:00 PM on Saturdays and at any time on Sundays and holidays. The proposed parking structure, togeth- er with the 189 -space lot will provide a total range of 399 to 409 parking spaces during week- day evening hours and weekends. C. Summary of Initial Study Staff concluded after completing the Initial Study that by implementing the recommended mitigation measures in the traffic impact analysis (see Appendix A), developing and operating the Project is not anticipated to create any significant adverse effects. D. Existing Environmental Setting As noted previously, the Project site consists of 1.78 acres. It has two parcels: the northerly lot contains 1.04 acres (45,300 sq ft), while the southerly property contains .74 acres, or 32,030 sq ft. The site is located in Downtown Downey and bounded by La Reina Avenue, New Street, and Second and Third Streets. It is zoned C -3, which is the City's Central Busi- ness District zone; the C -3 zoning district permits a wide variety of service commercial and retail uses, such as the Project's multiplex theater and restaurant. The area is designated in the Land Use Chapter of General Plan for Mixed Use which includes both commercial and residen- tial uses. Moreover, the site is part of the Downey Redevelopment Project Amendment Area No. 4, adopted in 1987. The site's northern parcel to date is unimproved. It was, however, the former site of the Downey Municipal Court. Operations at the court ceased in 1989 when it relocated to a new, larger facility on Imperial Highway. Then, in 1991 the courthouse building was demolished. Presently, the southerly lot is used as a public parking lot; the City acquired it in 1964 as part of Parking Assessment District No. 66.. The lot has 102 spaces 27 of which are reserved during business hours for parking permit holders. Physically, the Project site is nearly level with no distinguishing natural features. The southerly lot has several small landscape planters that serve the parking lot, and mature trees exist in the public right -of -way along the north side of Second Street. In terms of neighboring properties, the parcels along the south side of Second Street are developed as parking lots. A 6 -story building with a bank as the major tenant occupies one of the properties to the west across La Reina Avenue. Two small residences occupy the other parcels that front on the west side of La Reina Avenue. Medical offices and a 4 -story office building lie to the north across Third Street, while several smaller businesses lie to the east, across New Street. 4 II. ENVIRONMENTAL IMPACTS AND DISCUSSION 1. Earth. Will the proposal result in: a. Unstable earth conditions or in changes in geologic substructures? 5 I ILlg Maybe No X b. Disruptions, displacements, compaction or overcovering of the soil? X c. Change in topography or ground surface relief features? _ _ X d. The destruction, covering or modification of any unique geologic or physi- cal feature? _ _ X e. Any increase in wind or water erosion of soils, either on or off the site? f. Changes in deposition or erosion of beach sands, or changes in siltation, deposition or erosion which may modify the channel of a river, stream, or bed of the ocean or any bay, inlet or lake? _ _ X g. Exposure of people or property to geologic hazards such as earthquakes, landslides, mudslides, ground failure, or similar hazards? _ X a. The proposed theater, restaurant and parking structure would not create unstable geologic conditions or impact any geologic substructures. b. Soils will be disrupted or displaced only during new construction on the property. Minor grading and recompaction of soil may be necessary to accommodate the new development. Because such disruption would occur only for a limited period of time and would be subject to the City's requirements regarding dust suppression, impacts would not be significant. c /d/e Because the site is flat, development would not result in changes to the property's physical features. The site has no geologic or physical features of a unique character; with the proposed improvements, no impact from wind or water erosion will occur. f. The site is a significant distance from the ocean within a developed community and has been previously improved. Further development would not be capable of eroding or silting natural watercourses. g. The proposed project will induce more people to visit the site, exposing them to the geologic hazards of the properties. No unusual hazards are known, however, and no identified faults traverse Downtown Downey. Also, new construction would be built to current earthquake safety standards. No additional geologic hazards would occur as a result of this development. 1 i� 2. Air. Will the proposal result in: a. Substantial air emissions or deterioration of ambient air quality? b. The creation of objectionable odors? c. Alteration of air movement, moisture, or temperature, or any change in climate, either locally or regionally? a. The proposed Project is not expected to produce air pollutants that would have a significant negative effect on ambient air quality. The Project's proposed components will generate an estimated total of 4,395 vehicle trips on Saturdays. Most of the Project's air pollutants will result from vehicular emissions of customers' and employees' automobiles. According to currently adopted CEQA implementation Guidelines of the South Coast Air Quality Management District (1987) and state CEQA Guidelines Section 15206, the proposed Project is not considered to be a project of statewide, regional or areawide significance. That is, it is a commercial development that will employ less than 1,000 persons and encompass far less than 250,000 sq ft of floor space. Operation of commercial developments, including multiplex theaters and restaurants, produces three pollut- ants that exceed both the federal and state ambient air quality standards in the South Coast Air Basin, which Downey is a part: 1) reactive organic compounds (ROC), 2) oxides of nitrogen (NOx), 3) and carbon monoxide (CO). The 1993 South Coast Air Quality Management District (SCAQMD) Handbook for analyzing and mitigating proposed projects' air quality impacts advises local governments that projects emitting more than 55 lbs /day of ROC, 55 lbs /day of NOx, and 550 lbs /day of CO exceed the significance thresholds for air quality impacts recommended by the SCAQMD. The Project site was previously developed with a courthouse of approximately 21,700 sq ft. As a govern- ment office complex, the daily volume of traffic it generated emitted approximately 15.6 Ibs /day of ROC, 9.8 lbs /day of NOx and 158.2 lbs /day of CO. Actual emissions, however, were probably higher because the courthouse attracted not only employees, but the vehicles of jurors, traffic code violators and other visitors. The Air District's CEQA Handbook includes calculations to estimate the daily amounts of ROC, NOx and CO that project -types such as the proposed Project will emit. In applying them, Project - generated traffic is estimated to emit 73.1 lbs /day of ROC, 18.9 lbs /day of NOx, and 470.1 lbs /day of CO —all of which are below the Air District's suggested levels of significance, except for NOx. However, when the level of ROC that courthouse - generated traffic emitted is subtracted from the Project's estimated amount, the level falls to 57.5 lbs /day. This estimated amount is 2.5 lbs /day above the Air District's significance threshold. However, it must be remembered that the Air District's thresholds for determining a significant air quality impact are recommended thresholds; ultimately, the determination of significance is made by the lead agency, which for this Project is the City of Downey's decision makers. After reviewing the daily amount of reactive organic compounds that the Project is estimated to exceed the recommended threshold, Staff concluded the exceedance is less than significant for two reasons. Firstly, the exceedance, 2.5 lbs /day above the recommended threshold, is minimal. Secondly, staff factored in the vehicle trip reduction benefits that the proposed Project will provide the community. The Project will result in a reduction of vehicles miles travelled (VMT), which in turn, will result in a commensurate reduction in vehicle emis- sions. Specifically, the City of Downey is a community of approximately 94,500 residents, served by one single- screen cinema showing films that have been in release for several weeks, after their initial draw has diminished. To exercise choice in film viewing, or to view the most recently released films, Downey 6 I li g Matt& �TQ _x_ _X_ -X- residents to date must travel to theaters in neighboring communities, the closest being in Lakewood, Cerritos, La Mirada, Commerce, Santa Fe Springs, and Norwalk. The proposed project will be located in the central part of Downey, a maximum of approximately 2 -1/2 miles from any point within the city. The multiple screens will provide a range of cinematic choices. Although the reduction in pollutants would be difficult to quantify, the availability of the Project in Downey will reduce the total VMT by Downey residents for theater entertainment, which will consequently reduce emissions. Finally, emission reduction requirements established by the California Clean Air Act and 1990 federal Clean Air Act mandate vehicles manufactured in the future produce less pollutants. Thus, because most Project - emissions are auto- generated, the Project's total emissions will decrease over time. b. Project implementation and its accompanying activities will not produce objectionable odors. Vehicles using the parking structure may produce odors, particularly within the structure, but the proposed facility will be well ventilated, and resulting auto odors should be significantly less than those produced by the 48,500 cars that daily travel Firestone Boulevard, only 400 feet away. Further, more stringent emission standards will reduce vehicle- related odors in the future. c. This development would not be of the scope or magnitude to affect the regional or local climate or air temperatures. 3. Water. Will the proposal result in: a. Changes in currents, or the course of direction of water movements, in either marine or fresh waters? _ — b. Changes in absorption rates, drainage patterns, or the rate and amount of surface runoff? — — c. Alterations to the course or flow of flood waters? — — d. Change in the amount of surface water in any water body? — — e. Discharge into surface waters, or in any alteration of surface water quality, including but not limited to temperature, dissolved oxygen or turbidity? f. Alterations of the direction or rate of flow of ground waters? g. Change in the quantity of ground waters, either through direct additions or withdrawals, or through interception of aquifer by cuts or excavations? — — h. Substantial reduction in the amount of water otherwise available for public water supplies? — _ _X. i. Exposure of people or property to water - related hazards such as flooding or tidal waves? a. No marine or fresh waters are located on this site or neighboring sites. Yes Maybe ........ _.. • b. This development would not increase coverage of this land more than the previous municipal courthouse building, and the neighboring parking lot, therefore there is no changes to run -off or absorption rates. P Further, all drainage of the property shall comply with the National Pollution Discharge Elimination Syster (NPDES). c. The proposed development would not be of the magnitude to alter the course or flow rate of flood waters. Further, no bodies of water exist on these or neighboring properties. d /e /f Because of the location and small area of this site, and because of the drainage requirements of the Engineering Division, runoff will not impact surface water quality, nor will the proposed development cause surface water quality to change. All storm water discharge shall conform with NPDES require- ments. There will be no be direct discharge into surface waters or a change in the rate of flow to ground water. g/h The project's activities would place greater demand than the currently vacant land on existing groundwater supplies and delivery systems. However, the City's Water /Sanitation Superintendent has determined that the proposed development would not have a significant impact on the City's existing water distribution system or supplies. There are existing water mains in all streets adjacent to the site, and no improvements are recommended. Water available for public use would not be greatly reduced. New construction would be built to current Fire Department and Engineering Division standards. Development of this block would not intercept any subsurface water body for withdrawal or discharge. The site is located away from natural and constructed water bodies and water courses. Should the final Flood Insurance Rate Map (FIRM) under FEMA, be adopted prior to issuance of building permits, the .-� project will be required to meet any adopted regulations to floodproof structures and related utilities so that customers and employees are not exposed to 100 -year storm floodwaters. The project will not expose people to tidal wave hazard. 4. Plant Life. Will the proposal result in: a. Change in the diversity of species, or number of any species of plants (m- cluding trees, shrubs, grass, crops, and aquatic plants)? * * X b. Reduction in the numbers of any unique, rare or endangered species of plants? a. The existing plant life on the site is limited to planters in the public parking lot and street trees in the ■• parkway adjacent to Second Street. The landscaping of the project will likely introduce new plant species to the site. These will be consistent with species found elsewhere in Downey. The Design Review Board reviews the landscaping plans and plant palettes for new commercial developments for appropriateness. 8 Xga NM : ybe �1 c. Introduction of new species of plants into an area, or in a barrier to the nor- mal replenishment of existing species? d. Reduction in acreage of any agricultural crop? _ _ X_ * Will the loss of existing vegetation be adequately compensated for by conventional project landscaping? Yes b. No unique or endangered plant species exist on the site. c. New plant species may be introduced to the site, but they will not differ from species used in Downey for conventional landscaping projects. d. There are no agricultural uses on these or neighboring properties. 5. Animal Life. Will the proposal result in: a. Change in the diversity of species, or numbers of any species of animals (birds, land animals including reptiles, fish and shellfish, benthic organisms or insects)? b. Reduction of the numbers of any unique, rare or endangered species of ani- mals? c. Introduction of new species of animals into an area or result in a barrier to the migration or movement of animals? d. Deterioration to existing fish or wildlife habitats? 6. Noise. Will the proposal result in: a. Increase in existing noise levels? b. Exposure of people to severe noise levels? 7. Light and Glare. Will the proposal produce new light or glare? 9 Ysl Maybe Ns a./b. This project would not affect the presence or numbers of any animal species, fish, or game on the site. Further, no unique or endangered species are known to inhabit Downey. c. No new species of animals, including fish and game, would be introduced to this site as a result of this project. The site is part of a built, urban environment and is not part of an animal migration route. d. No fish or wildlife habitats exist on these or neighboring properties, nor would the proposed development in Downey's central business district affect fish or wildlife habitats elsewhere. Noise a. Increased noise level is not a function of the number of trips to one activity. Noise levels are affected by the type of noise and its frequency. Therefore, even though the proposed project will generate vehicle trips to this site, ambient noise levels are not expected to increase. b. Multiplex theater complexes and restaurants and the vehicles attracted to them do not typically produce or expose people to severe or objectionable noise levels outside of theater auditoriums and the restaurant buildings. Short-term noise and vibration impacts may occur during construction if pile drivers are used. If used, pile drivers should be vibratory-type, where feasible. The Downey Municipal Code exempts such short-term impacts from the City's noise regulations. Further, the Downey Municipal Code restricts hours of construction, such that pile driving activity would not affect residents of nearby areas at night. Lieht and Glatt The new structures will produce light including: signs, light produced from within the building, security lighting •within the parking structure, and decorative lighting. Further, these structures may have some reflective surfaces. Such lighting will be similar to that produced by other commercial developments within Downey's commercial zones and within the Downtown and would not negatively affect surrounding uses. The Design Review Board's evaluation will safeguard against excessive light and glare. 8. Land Use. Will the proposal result in: a. Substantial alteration of the present or planned land use of an area? b. Will the project have a substantial impact on surrounding land uses? * Is the project consistent with the General Plan Land Use designation and zoning requirements? Yes 9. Natural Resources. Will the proposal result in increase in the rate of use of any natural resources? 10 Yom£ Mavbe No * a. Commercial businesses, a church, and public uses such as a courthouse, public library, and parking lot have existed on this site for decades. The Downtown has been developed with motion picture theaters and restaurants in the past, and they continue to operate there today. The proposed development is consistent with previous, existing, and planned development in the Downtown. b. The project will not impact surrounding uses, which are commercial to the east and south, office to the north and west, and two small nonconforming residential structures to the northwest. The peak periods of activity for the proposed theaters and restaurant differ from the peak periods of activity for most of the surrounding uses. Moreover, the proposal's uses will complement these uses. in Mavbe Na _- The project may result in an increase in the rate of use of water. Because this site is part of an urban, devel- oped, environment, however, and has been previously improved with water- consuming uses, such increase is not expected to be significant. More information about water is given in Section 3 of this initial study. No addi- tional natural resources are expected to be affected significantly. The City has planned for commercial uses to exist on this site for many years. Maybe Ns 10. Risk of Upset. Will the proposal involve: a. A risk of an explosion or the release of hazardous substances (including, but not limited to oil, pesticides, chemicals or radiation) in the event of an acci- dent or upset conditions? — — _x_ b. Possible interference with an emergency response plan or an emergency evacuation plan? — — 1. The development is not expected to foster a risk of upset because of the generally non - hazardous nature of the proposed uses. Use of hazardous materials that may be employed by commercial businesses is gov- erned by Downey Fire Department regulations. b. The proposed project would not result in an increase in the need for emergency services. The nature and scope of the land uses would not interfere with emergency response or evacuation plans. New development will be required to comply with all Fire Safety requirements of the Downey Fire Department. 11. Population. Will the proposal alter the location, distribution, density, or growth rate of the human population of an area? * Estimated population displaced: 0 * Population Anticipated: 0 No persons reside at this site. Therefore, this action will not affect the location, distribution, density, or growth rate of Downey's population. 12. Housing. Will the proposal affect existing housing, or create a demand for additional housing? * Housing units lost: 0 * Housing units proposed: 0 No residential units exist on the site, and residences are not permitted under the existing zoning. The develop- ment would create jobs that may increase housing demand in the City, but such an increase would not be significant from a project of this type or size. 13. Transportation /Circulation. Will the proposal result in: a. Generation of substantial additional vehicular movement? b. Effects on existing parking facilities, or demand for new parking? c. Substantial impact upon existing transportation systems? d. Alterations to present patterns of circulation or movement of people and/or goods? e. Alterations to waterborne, rail, or air traffic? f. Increase in traffic hazards to motor vehicles, bicyclists, or pedestrians? — _X * Anticipated traffic generation: 344 weekday PM peak hours /4.395 Saturday ADT Based on a traffic impact analysis completed by Robert Bein, William Frost & Associates in August, 1995, (See Appendix RA" for the complete analysis), the uses permitted by the DDA are estimated to generate 4,395 Saturday average daily vehicle trips and 344 weekday PM peak period trips. The analysis concluded only two intersections were identified as having a significant impact due to the project: Firestone Boulevard/Paramount Boulevard and Firestone Boulevard/Downey Avenue. However, the analysis also indicated these traffic impacts can be fully mitigated by restripping the eastbound dedicated right turn lane to a shared through /right turn lane. These actions will be reflected as required mitigation measures. ka Mavbe Ns IYu Maybe h.Q • * _X_ 1 Mak i * _20 _X- — — b. The traffic impact also indicated that the parking structure as proposed will provide between 210 -220 parking spaces, plus an additional 189 spaces shared with an adjacent property is adequate for the proposed .•-■ Project. The analysis assumes a conservative worst -case scenario for the proposed project since it assumes the multiplex theater and restaurant operate as separate, unrelated land uses, with no shared parking occur- ring between the two compatible uses. In reality, some motorists will park in the parking structure and utilize both the restaurant and multiplex theater in the form of one inbound trip needing to be parked only once. When factoring in this phenomena of interaction occuring between the two complementary project site uses, the parking required per the City parking ordinance is a conservative, worst -case scenario and will provide more than adequate parking for the proposed Project. c. No impacts are anticipated to existing transportation systems, since it is anticipated most patrons will arrive by automobile or by foot traffic. d. The streets surrounding the site are not primary routes for the movement of vehicles, people or goods. Therefore, the project will not require any mitigation measures relating to patterns of circulation or move- ment of people and /or goods. e. No waterborne, rail, or air traffic uses this site. f. Since these actions will increase traffic at the site, traffic hazards to motor vehicles, bicycles, or pedestrians could may increase. The site and the adjoining /adjacent properties are fully improved with sidewalks and street lights to include handicapped ramps on all corners. This will reduce the need for wheelchair -bound theater patrons to maneuver in that portion of the roadway used by motor vehicles. Yet Mavbe n 14. Public Services. Will the proposal have an effect upon, or result in a need for new or altered governmental services in any of the following areas: a. Fire Protection? X _ b. Police Protection? c. Schools? _ _ X d. Parks or other recreational facilities? _ _ X e. Maintenance of public facilities, including roads? X _ f. Other governmental services? — — X a./b. The proposed development will require police and fire protection. This service need, however, should not be significantly greater than that of other commercial developments in Downey. In addition, any new structures would be built to current fire safety standards. The proposed development is located less than one -half mile from Downey Police Department headquarters. c. /d. As no new dwelling units will be built on this site, this action will not likely impact existing school facilities. Similarly, it will not significantly increase the need for parks or other recreational facilities. In fact, the theaters may be considered a private recreational facility increasing recreational opportunities within Downey. 12 eJf. The proposed development is a commercial use in an area long planned for such use. Therefore, this action would not significantly impact government services and maintenance of public facilities such as roads. 15. Energy. Will the proposal result in a substantial increase in the use of an energy source or require the development of new sources of energy? 16. Utilities. Will the proposal result in a need for new systems, or substantial alterations to existing utilities? Energy The new development will use additional electricity, natural gas, and water. Given the small size of the area (1.04 acres) and its development in a manner consistent with other commercial development in Downey, the effect on existing supplies and any increases in demand would not be significant. No new energy sources would be required. Utilities Existing communication, water, sewer, storm drain, natural gas, and solid waste disposal systems and facilities served the previous development of this site, and impacts from the proposed development are expected to be insignificant. b. Exposure of people to potential health hazards? — _X_ a./b. This development will not create unique or unusual health hazards or potential health risks. The typical- ly non - hazardous nature of motion picture theaters, parking structures, and commercial land in general would not expose people to additional hazards. 17. Human Health. Will the proposal result in: a. Creation of any health hazard or potential health hazard (excluding mental health)? — — 18. Aesthetics. Will the proposal result in the obstruction of any scenic vista or view open to the public, or will the proposal result in the creation of an aes- thetically offensive site open to public view? I Mavbe N4 13 XII Maybe yits Maybe Na �- 1 This site is not within a scenic vista or view corridor. Further, architecture and landscaping of new commercial development will require Design Review Board approval. The proposed modern structure will improve the aesthetics of the site. n As a multi-plex motion picture theater, the proposed project will increase the quantity of recreational opportuni- ties in Downey. 19. Recreation. Will the proposal result in an impact upon the quantity of existing recreational opportunities? 20. Cultural Resources. a. Will the proposal result in the alteration of or the destruction of a prehistor- ic or historic archaeological site? c. Does the proposal have the potential to cause a physical change which would affect unique ethnic cultural values? 14 I Maybe Q X Maybe L2 b. Will the proposal result in adverse physical or aesthetic effects to a prehis- toric or historic building, structure, or object? X d. Will the proposal restrict existing religious or sacred uses within the poten- tial impact area? _ — X a/b /c /d. There are no known prehistoric or celebrated historic sites on the acreage affected by this project. ,.� Although this project will occupy a site in Downey's historic Downtown, there are no existing historic structures, trees, physical features, or monuments on the site. The Downey Historical Society shall be given the opportunity to inspect and catalog historic artifacts that may be discovered during the grading and excavation for development. This development would not harm any ethnic groups or cultural values. Further, no religious or sacred uses exist on or adjacent to this property. Therefore, no impacts are anticipated. MANDATORY FINDINGS OF SIGNIFICANCE 1. Does the project have the potential to degrade the quality of the environment, substantially reduce the habitat of a fish or wildlife species, cause a fish or wildlife population to drop below self- sustaining levels, threaten to eliminate a plant or animal community, reduce the number or restrict the range of a rare or endangered plant or animal or eliminate important examples of the major periods of California history or prehistory? _ _ 2. Does the project have the potential to achieve short -term, to the disadvantage of long -term, environmental goals? (A short-term impact on the environment is one which occurs in a relatively brief, definitive period of time while long- term impacts will endure into the future.) r ._ . _.._ _ _ .._ _ 3. Does the project have impacts which are individually limited, but cumulatively considerable? (A project may impact two or more separate resources where the impact on each resource is relatively small, but where the effect of the total of those impacts on the environment is significant.) _ 4. Does the project have environmental effects which will cause substantial ad- verse effects on human beings, either directly or indirectly? _ _ 15 I Les Maybe Ns DETERMINATION On the basis of this Initial Study: - I fmd that the proposed project COULD NOT have a significant effect on the environment, and a NEGATIVE DECLARATION will be prepared. • I fmd that although the proposed project could have a significant effect on the environment, there will not be a significant effect in this case because the mitigation measures described on an attached sheet have been added to the project. A NEGATIVE DECLARATION WILL BE PREPARED. I find the proposed project MAY have a significant effect on the environment and an EN- VIRONMENTAL IMPACT REPORT IS REQUIRED. ,, 4,,371 9-r- Date eim Principal Planner V. OTHER AGENCIES AND /OR PERSONS CONSULTED: Downtown Downey Multinlex Theater and Restaurant Traffic Impact and Parking Demand Analysis, August, 21, 1995 Prepared Robert Bein, William Frost & Associates Erik Zandvliet, Traffic Engineer Robert Brace, City Engineer Greg Mayfield, Water /Sanitation Supt. CEQA Air Quality Handbook, SCAQMD, 1993 16 L N ▪ eT• 02 O 0 O 0 I1 2 m v O 2 0 O D 2 r --1 _Z r0 rn XL 0 rn 0 73 • E m 0) D Z