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Item 6b. Approve the purchase of 1166 Higuera Street and Authorize the Execution of the Purchase and Sale Agreement
Item 6b Department: Administration Cost Center: 5101 For Agenda of: 11/14/2023 Placement: Business Estimated Time: 30 minutes FROM: Whitney McDonald, Assistant City Manager Prepared By: Rebecca Bernstorff, Business Services and Administrative Manager SUBJECT: APPROVE THE PURCHASE OF 1166 HIGUERA STREET AND AUTHORIZE THE EXECUTION OF THE PURCHASE AND SALE AGREEMENT RECOMMENDATION 1. Approve the purchase of 1166 Higuera Street; and 2. Authorize the execution of the Purchase and Sale Agreement; and 3. Approve a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving an amendment to the 2023-24 Budget Allocation for Fiscal Year 2023-24 for purchase and use of the property located at 1166 Higuera Street,” authorizing an interfund loan to fund the acquisition under the terms and conditions set forth in Exhibit A. REPORT-IN-BRIEF The City has been presented with the opportunity to purchase the property located at 1166 Higuera, which would provide a total of 441 new paid parking spaces, as well as two additional ADA spaces, for use by the public. Purchase and use of this property for public parking would facilitate greater access and economic development in the upper Monterey Street area, as contemplated in the Downtown Concept Plan and other City General Plan policies. The proposed acquisition would also provide additional parking capacity in the downtown area and otherwise partially relieve any real or perceived challenges to both distribution and availability of parking spaces. Staff have completed negotiations with the seller, as authorized by the City Council, and the final Purchase and Sale Agreement is ready for approval. The purchase price is the equivalent of the property’s appraised value of $4,720,000, and it is anticipated that improvement costs of $125,000 will be needed to fully prepare the site for use as paid public parking. It is recommended that the purchase and improvement costs be provided by the City’s Infrastructure Investment Fund, with the Parking Fund repaying the costs through a 30-year loan. 1 44 spaces is the number under the current configuration and may increase as part of efforts to maximize parking yield for the site in conjunction with any improvements. Page 97 of 190 Item 6b POLICY CONTEXT The City’s Financial Management Manual, Section 475 - Real Property Acquisition & Disposal Policy, was adopted by Council on May 18, 2010 (Resolution No.10175) and guides real property acquisitions. The City Council’s role is to authorize and approve the acquisition of real property. The Planning Commission’s role is to review the same for General Plan consistency in compliance with City’s policy and California Government Code Section 65402(a)2. DISCUSSION Background The City Council authorized City staff to initiate real property negotiations for the acquisition of 1166 Higuera Street for use as a public parking lot. The property is a 21,607 SF parcel located on the corner of Toro Street and Higuera Street addressed as 1,166 Higuera Street. Acquiring this property will increase public parking supply in the Upper Monterey area, in conformance with the City’s General Plan Land Use Element. Development of the upper Monterey Street area of the City will support the evolving needs of the community, including build out of the Downtown Concept Plan The lack of public parking has been a hurdle to realizing this long-term vision, which includes more residential and commercial development. The strategic purchase of 1166 Higuera will support this vision by creating better access and parking to the upper Monterey Street area. Pursuant to the authorization provided by City Council on October 17, 2023, the Purchase and Sale Agreement is ready for execution, and escrow is expected to close by the end of December 2023. 2 65402. (a) If a general plan or part thereof has been adopted, no real property shall be acquire d by dedication or otherwise for street, square, park or other public purposes, and no real property shall be disposed of, no street shall be vacated or abandoned, and no public building or structure shall be constructed or authorized, if the adopted general plan or part thereof applies thereto, until the location, purpose and extent of such acquisition or disposition, such street vacation or abandonment, or such public building or structure have been submitted to and reported upon by the planning agency as to conformity with said adopted general plan or part thereof. The planning agency shall render its report as to conformity with said adopted general plan or part thereof within forty (40) days after the matter was submitted to it, or such longer period of time as may be designated by the legislative body. Page 98 of 190 Item 6b General Plan and Zoning Considerations The property is designated as General Retail Commercial in the City’s General Plan Land Use Element and is zoned Retail Commercial (C-R). The Retail Commercial (C-R) zone is intended to accommodate retail, business, personal, and professional services as well as recreation, entertainment, transient lodging, and limited residential uses. The property is located within the Upper Monterey Special Focus Area of the General Plan Land Use Element (LUE Policy 8.2.2). The City of San Luis Obispo General Plan Land Use Element establishes specific guidance on the development/redevelopment of sites in special planning areas. The guidance for sites located in the Upper Monterey Special Focus Area is as follows: Page 99 of 190 Item 6b “In the Upper Monterey area, the emphasis will be on revitalization and enhancement. The area above Johnson shall have an emphasis on land use compatibility and neighborhood preservation. The following actions will be pursued in this area: A. The City shall investigate adding the Upper Monterey area to the Downtown Parking District, thereby allowing in-lieu payment towards common parking facilities. B. The City shall integrate a new Downtown Transit Center in the Upper Monterey area and provide enhanced connectivity to the center from the Upper Monterey area. C. The City will work with hotels in the Upper Monterey area to provide shuttle service to the Downtown and Downtown Transit Center. D. The City will promote restaurant development in the Upper Monterey area, and include outdoor dining opportunities and other public activities oriented toward Monterey Street. North of California, these types of activities shall be prohibited on the creek side of buildings. E. The City will evaluate reconfiguring Monterey Street in this area to enhance bicycle and pedestrian connectivity to Downtown and to Cal Poly. F. The City will work with local hotels and Cal Poly to develop enhanced meeting rooms and conference facilities. These types of facilities would not be located on the east side of Monterey north of California Street, nor is a stand-alone conference center appropriate for this area. G. The City will work with developers to assemble adjacent properties into lots of suitable size for redevelopment limited to areas southwest of California Street. H. The City will develop an Upper Monterey area master plan and design guide that will provide guidance on street enhancements, façade improvement programs, and pedestrian enhancement along Monterey Street. As part of this effort, the City will investigate the ability to apply form-based codes to guide future development and will involve residents in adjoining areas as well as business and property owners along Monterey Street as part of the public review process in development of the master plan/design guide. Particular attention will be given to creek protection, noise, safety, light and glare, and privacy impacts to adjoining neighborhoods”. Per City regulations, parking is an allowed use with a Conditional Use Permit on this property. In addition, the block bounded by Monterey Street, Higuera Street, Toro Street and Santa Rosa Street, and specifically the subject parcel, is shown as public parking in the Downtown Concept Plan (see block number 23 in the excerpt from the Illustrative Downtown Concept Plan below). If Council accepts staff recommendations, the Planning Commission on December 13, 2023will consider a request fora determination of General Plan Conformance per California Government Code Section 65402 and for consideration of approval of a Conditional Use Permit for a public parking lot prior to the close of escrow. Page 100 of 190 Item 6b Results of Due Diligence Process Staff identified initial primary public uses of the property (primarily parking) and estimated costs associated with activating public parking on the property. In order to accommodate the 44 paid parking stalls, two ADA parking stalls, and prepare the site for use as public parking, staff have identified several improvements (total cost estimate of $125,000) that will be necessary: 1. Parking lot improvements including signage, striping, installation of wheel stops, and installation of pay station are estimated to cost $15,000 in total; and 2. Landscape improvements, including reconstructing the planter areas are estimated to cost $10,000; and 3. Demolition of existing structure(s) as at least one of the existing structures will need to be removed as it was determined to be unhabitable and are estimated to cost $100,000. Financing Options Staff have completed a thorough financial analysis to determine the feasib ility of acquiring this real property. The analysis considered the one-time expenses of $125,000, as described above, for site improvements and potential revenue assumptions using data collected from the on-street area surrounding the property, as well as paid citation revenue from the existing surface parking lots. Additionally, the Parking Fund’s Long - Term Forecast (Attachment C) has been revised to include the debt financing assumptions of the Cultural Arts District Parking Structure, following the const ruction contract award in Fall 2023. Furthermore, the Long-Term Forecast includes updated revenue projections for the fund based on the unaudited year -end actuals for Fisal Year 2022-23, as well as revenue impacts of a one-hour free program and free Sunday parking program, as approved by Council on November 7, 2023 , and the removal of a rate increase for on-street parking that was planned for July 1, 2025. Page 101 of 190 Item 6b The City received the appraisal from the seller on October 3, 2023, stating that the appraised value of the property is $4,720,000. The appraised value is identified as the purchase price of the property and included in the Purchase and Sale Agreement (PSA). In order to finance this acquisition, staff recommends that the Infrastructure Investment Fund (IIF) make a loan in the amount of $4,720,000 to the Parking Enterprise Fund to fund the acquisition of the property. The proposed use of funds is consistent with the adopted guidelines for use of the IIF established under Resolution 10603. Most notably, the acquisition is a critical link to the orderly infill development of upper Monterey Street and is the advancement of General Plan policies and objectives. The funding in the IIF is currently programmed for projects noted below. In order to be able to proceed with the planned projects as well as support the loan to the Parking Enterprise, staff would recommend prioritization of unassigned General Fund balance in future years to reimburse the IIF. Over the long-term, repayment of the loan from the Parking Enterprise will reimburse the IIF and General Fund. Staff recommends that the Parking Enterprise pay interest on the loan at a rate of 2.88%. The recommended interest rate represents the average interest earned on the City’s investments with the Local Agency Investment Fund (LAIF) to date in 2023. This interest rate acknowledges the impact that the loan to the Parking Enterpris e will have to the IIF and General Fund, as the funding would otherwise earn interest if not expended. The interest rate also considers the sensitivities of the Parking Enterprise by providing a lower rate than would otherwise be obtained in the market (by comparison, the recent financing of the Cultural Arts District Parking Structure includes repayment with a 4.37% interest rate). To ensure the Parking Enterprise’s ability to fund the debt service while maintaining operations and capital investments in parking facilities, it is recommended that this loan be repaid over a 30-year term. Using these loan terms and the purchase price for the property, the repayment is estimated to be $118,500 in FY 2023-24 and $237,100 annually thereafter. These terms have been incorporated into the Resolution provided in Attachment B, as it is important to reference the policies3 applicable to the interfund loan and the responsibility of the Parking Fund to repay the General Fund in supporting this acquisition. 3 Financial Plan 2023-25 Fiscal Policy Section 3.A. Water, Sewer, and Parking. The City will set fees and rates at levels which fully cover the total direct and indirect costs—including operations, capital outlay, and debt service—of the following enterprise programs: water, sewer, and parking. General Plan Circulation Element 13.1.2. City Parking Programs. Parking programs shall be financially self-supporting. Page 102 of 190 Item 6b The IIF currently has a balance of $12,500,000 to support this request of $4,720,000. With the 2023-25 Financial Plan, the IIF balance was planned to be used to support design services for the Prado Road Interchange Project and portions of the construction costs for the Prado Creek Bridge Project. Due to the current delivery timeframe for both projects, the IIF can support the request for $4,720,000 at this time. Staff intends to recommend a significant portion of unappropriated/unaudited 2022 -2023 funds be appropriated to the IIF to both replenish loaned funds and address the need for other projects consistent with the IIF. Additional alternatives for funding the purchase are described in more detail under the Alternatives section below. Previous Council or Advisory Body Action City staff met with the City Council at the July 18 and October 17, 2023, Closed Sessions to seek authorization to pursue the property negotiations, and to discuss purchase terms. There was no reportable action taken at these meetings. Staff will bring the acquisition of the property to the Planning Commission on December 13, 2023, for a determination of General Plan Conformance per California Government Code Section 65402 and for consideration of approval of a Conditional Use Permit to allow public parking on the property prior to the close of escrow. These two actions are a required step to close escrow and are contingency of the purchase and sales agreement. Public Engagement The community will have an opportunity to engage in public comment at the November 14, 2023, City Council meeting. The project will be reviewed by the Planning Commission on December 13, 2023. CONCURRENCE The coordination of this report has been in partnership with Community Development, Mobility Services, Economic Development, Finance and Capital Improvement Program. ENVIRONMENTAL REVIEW The California Environmental Quality Act (CEQA) does not apply to the recommended actions in this report because the actions do not constitute a “Project” under CEQA Guidelines Sec. 15378. This project is also exempt pursuant to Section 15301 of the CEQA Guidelines, which applies to the operation, repair, maintenance, permitting, leasing, licensing, or minor alteration of existing public or private structures, facilities, mechanical equipment, or topographical features, involving negligible or no expansion of existing or former use. Page 103 of 190 Item 6b FISCAL IMPACT Budgeted: No Budget Year: 2023-24 Funding Identified: Yes Fiscal Analysis: Funding Sources Total Budget Available Current Funding Request Remaining Balance Annual Ongoing Cost Infrastructure Investment Fund $ $4,720,000 $ $ Parking Fund $125,000 State Federal Fees Other: Total $ $4,845,000 $ $ As described in the attached resolution (Attachment B), staff is recommending funding the acquisition of $4,720,000 with an interfund loan by the IIF with a repayment by the Parking Fund at a rate of 2.88% over 30 years. Council may provide direction to fund the purchase differently, in which the resolution will be modified accordingly. ALTERNATIVES 1. Do not execute the Purchase and Sale Agreement and proceed with the property acquisition of 1166 Higuera Street. This is not recommended, as this purchase will develop parking supply in the Upper Monterey area and is consistent with the City’s General Plan goals and allows for the orderly development of upper Monterey. 2. Approve the Purchase and Sale Agreement and provide alternative direction regarding funding the purchase. Additional funding options may include: a. An interfund loan from the IIF that incorporates alternative terms, such as deferral of payments for five years. b. Purchase of the property by the General Fund without any repayment requirement from the Parking Fund. This alternative is not recommended in light of City General Plan Policy Section 13.1.2, which states that “City parking programs shall be financially self‐supporting.” Alternatively, returning revenue from paid parking on this site to the General Fund may lessen concerns regarding consistency with this General Plan policy. ATTACHMENTS A - Final Draft Purchase and Sale Agreement B - Draft Resolution appropriating funding for the purchase of 1166 Higuera C - Parking Fund Long Term Forecast Page 104 of 190 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited:10/31/2023 12:41PM OFA 20.30,Revised10 13 2022 Page 1 of 10 STANDARD OFFER,AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (Non Residen al) Dated:October 31, 2023 1.Buyer. 1.1 City of San Luis Obispo, a Municipal Corporation , ("Buyer")hereby o ersto purchase thereal property, hereina er described, fromthe ownerthereof ("Seller") (collec vely, the "Par es"or individually,a"Party"), throughan escrow("Escrow")to close 30 or on or before December 22, 2023 daysa er thewaiver orsa sfac onof theBuyer's Con ngencies, ("ExpectedClosingDate") tobe heldby Fidelity National Title Company, Attn: Cindy Ioimo ("EscrowHolder") whoseaddress is 2222 S. Broadway, Suite G, Santa Maria, CA 93454 ,Phone No.805-922-8331 ,Facsimile No.805-928-6064 upon the terms and condi ons set forth in this agreement ("Agreement"). Buyer shallhave theright to assign Buyer's rights hereunder,but anysuch assignment shall not relieveBuyer ofBuyer's obliga ons herein unless Seller expressly releases Buyer. 1.2 The term"Date of Agreement" as used herein shallbe thedate when byexecu on and delivery(as dened in paragraph 20.2) ofthis document or a subsequent countero er thereto,Buyer and Seller have reached agreement in wri ng wherebySeller agrees to sell,and Buyer agrees to purchase,theProperty upon terms accepted byboth Par es. 2.Property. 2.1 The realproperty ("Property")that isthesubject ofthis o erconsistsof (inserta briefphysical descrip on)improved real property is locatedin theCounty of San Luis Obispo , is commonlyknown as(street address, city,state, zip)1166 Higuera Street andislegally describedas:per title report (APN:002-436-022 ). 2.2 If thelegal descrip on of thePropertyis not complete or is inaccurate,this Agreement shallnot be invalid and thelegal descrip on shallbe completed or correctedto meetthe requirements of Fidelity National Title Company ("TitleCompany"), whichshall issuethe tle policyhereina er described. 2.3 The Propertyincludes,at no addi onalcost to Buyer,the permanent improvements thereon,including those items which pursuant to applicable law are a part of theproperty,as wellas thefollowing items,if any,owned by Seller and at present located on the Property: electricaldistribu on systems (power panel,bus duc ng,conduits,disconnects,ligh ng xtures);telephone distribu on systems (lines,jacks and connec ons only);space heaters;hea ng,ven la ng,air condi oning equipment ("HVAC");air lines;resprinkler systems;security and re detec on systems;carpets; window coverings; wallcoverings; and (collec vely,the "Improvements"). 2.4 The resprinkler monitor: is ownedbySeller andincluded inthePurchase Price, is leasedby Seller,andBuyer willneed tonego ate a new lease withthe remonitoring company, ownership will be determined duringEscrow, or thereis no re sprinklermonitor. 2.5 Except asprovided inParagraph 2.3, thePurchase Pricedoes notinclude Seller's personal property, furniture andfurnishings, and stored items allof whichshall beremoved by Sellerprior toClosing. 3.PurchasePrice. 3.1 The purchase price ("PurchasePrice") tobepaid byBuyer toSellerfor theProperty shallbe $4,720,000.00 , payableas follows: (Strike any not applicable) (a) Cash down payment,including theDeposit as dened in paragraph 4.3(or if an all cash transac on,the Purchase Price):$4,720,000.00 (b) Amount of "New Loan"as dened in paragraph 5.1, ifany: (c) Buyer shall take tle to theProperty subject to and/or assumethe following exis ng deed(s) of trust ("Exis ng Deed(s) of Trust")securing theexis ng promissorynote(s)("Exis ng Note(s)"): (i) An Exis ng Note("First Note")with an unpaid principal balanceas oftheClosing ofapproximately: SaidFirst Noteis payableat per month,includinginterest atthe rateof %per annum un lpaid (and/orthe en reunpaidbalance isdue on ). (ii) An Exis ng Note ("Second Note") with an unpaid principal balance as of theClosing of approximately: Said SecondNoteis payable at per month,includinginterest atthe rateof %per annum un lpaid (and/orthe en reunpaidbalance isdue on ). (d) Buyer shall giveSeller adeed of trust ("Purchase Money Deed of Trust")on theproperty,to secure the promissorynote ofBuyer to Seller described in paragraph 6("Purchase Money Note") in theamount of: TotalPurchase Price:$4,720,000.00 Page 105 of 190 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited:10/31/2023 12:41PM OFA 20.30,Revised10 13 2022 Page 2 of 10 3.2 If Buyer is taking tleto the Property subject to,or assuming,an Exis ng Deed ofTrust and such deed oftrust permits thebeneciary to demand payment offees including,but not limited to,points,processing fees,and appraisalfees as acondi on to thetransfer ofthe Property,Buyer agrees to pay such fees upto a maximumof 1.5%of theunpaid principal balance of theapplicable Exis ng Note. 4.Deposits. 4.1 Buyerhas deliveredtoBroker acheck inthesum of , payableto EscrowHolder, tobedelivered byBroker toEscrow Holder within2 or businessdays a erboth Par eshaveexecuted thisAgreement andthe executedAgreementhas beendelivered toEscrowHolder, or within 2or businessdays a erboth Par eshaveexecuted thisAgreement andthe executedAgreementhas beendelivered toEscrowHolder Buyershall deliverto EscrowHolder acheck inthe sumof . Ifsaid checkisnot receivedby EscrowHolder within said me periodthenSeller mayelect tounilaterally terminatethis transac on by giving wri en no ce ofsuch elec on to Escrow Holder whereupon neither Party shallhaveany further liability to theother under this Agreement.Should Buyer and Seller not enter into an agreement for purchase and sale,Buyer's checkor funds shall,upon request by Buyer,bepromptly returned to Buyer. 4.2 Addi onal deposits: (a) Within 5business days a erthe Date of Agreement,Buyer shalldepositwith EscrowHolder theaddi onal sum of tobe appliedto the Purchase Price at the Closing. (b) Within 5 business days a er thecon ngencies discussed in paragraph 9.1(a) through (m) areapproved or waived,Buyer shalldeposit with Escrow Holderthe addi onal sum of tobe appliedtothe PurchasePrice attheClosing. (c) Ifan Addi onal Deposit is not received byEscrow Holder within the meperiod provided then Seller may no fyBuyer,Escrow Holder,and Brokers,in wri ng that,unless the Addi onal Deposit is received by Escrow Holder within 2business days following said no ce,the Escrow shall bedeemed terminated without further no ce or instruc ons. 4.3 Escrow Holder shall deposit thefunds deposited with it byBuyer pursuant to paragraphs 4.1 and4.2 (collec velythe "Deposit"),in aState or Federally chartered bank in an interest bearing account whoseterm is appropriate and consistent with the ming requirements ofthis transac on. Theinterest therefrom shall accrueto thebenet ofBuyer,who herebyacknowledges that there maybepenal es or interest forfeitures ifthe applicable instrument is redeemed prior to its speciedmaturity. Buyer's FederalTaxIden ca on Number is . NOTE: Such interestbearingaccount cannot be openedun lBuyer's FederalTax Iden ca on Number is provided. 4.4 Notwithstanding theforegoing,within 5 days a er Escrow Holder receives themonies described in paragraph 4.1above,Escrow Holder shall release$100 ofsaid monies to Seller as and for independent considera on for Seller's'execu on of this Agreement and thegran ng ofthe con ngencyperiod to Buyer as herein provided. Such independent considera on is non refundable to Buyer but shall becredited to thePurchase Pricein the event that thepurchase of theProperty is completed. 4.5 Upon waiver of allof Buyer's con ngencies theDeposit shall becomenon refundable but applicableto thePurchase Priceexcept in theevent ofa Seller breach,or in the event that the Escrow is terminated pursuant to theprovisions ofParagraph 9.1(n)(Destruc on,Damage or Loss) or 9.1(o)(Material Change). 5.Financing Con ngency.(Strike if not applicable) 5.1 This o er is con ngent upon Buyer obtaining from an insurance company,nancial ins tu on or other lender,acommitment to lend to Buyer asumequal toat least % ofthe PurchasePrice, ontermsacceptable toBuyer. Suchloan ("NewLoan") shallbesecured bya rstdeed oftrustor mortgageon the Property. Ifthis Agreement provides for Seller to carry back junior nancing,then Seller shall havetheright to approve theterms of theNew Loan. Seller shallhave 7 days following receipt of thecommitment se ng forth the proposed terms oftheNew Loan to approve or disapprove ofsuch proposed terms. IfSeller fails to no fy Escrow Holder,in wri ng,ofthedisapproval within said 7days it shallbe conclusivelypresumed that Seller has approved the terms ofthe New Loan. 5.2 If Buyershall failto no fy its Broker, EscrowHolder andSeller,in wri ngwithin days followingthe DateofAgreement, thatthe NewLoan hasnot been obtained, it shall be conclusively presumed that Buyer haseither obtained said New Loan or has waived this NewLoan con ngency. 5.3 If Buyer shall no fyits Broker,Escrow Holder and Seller,in wri ng,within the me specied in paragraph 5.2 hereof,that Buyer has not obtained said New Loan,this Agreement shall beterminated,and Buyer shall been tled to the prompt return of theDeposit,plus anyinterest earned thereon,less onlyEscrow Holder and Title Companycancella on fees and costs,which Buyer shallpay. 6.Seller Financing.(Purchase Money Note).(Strike if not applicable) 6.1 If Sellerapproves Buyer's nancials (seeparagraph6.5) thePurchase MoneyNoteshall providefor interest onunpaid principalat therate of %per annum, with principal andinterest paidas follows: . The Purchase Money Note andPurchase MoneyDeedof Trustshall beon thecurrent forms commonlyused byEscrow Holder,and be junior and subordinate only to theExis ng Note(s)and/or theNew Loan expressly called for bythis Agreement. 6.2 The PurchaseMoney Noteand/or thePurchaseMoney Deed of Trust shall contain provisions regarding thefollowing (see also paragraph 10.3(b)): (a)Prepayment. Principal maybeprepaid in whole or in part at any mewithout penalty,at the op on of theBuyer. (b)Late Charge. A latecharge of 6%shall bepayablewith respect to anypayment ofprincipal,interest,or other charges,not made within 10 days a er it is due. (c)Due On Sale. In theevent theBuyer sells or transfers tle to theProperty or anypor on thereof,then theSeller may,at Seller's op on,require the en reunpaid balanceof said Noteto be paid in full. 6.3 If thePurchase MoneyDeed ofTrust is to be subordinate to other nancing,Escrow Holder shall,at Buyer's expense prepare and record on Seller's behalf a request for no ceof default and/or sale with regard to each mortgageor deed oftrust to which it willbe subordinate. 6.4 WARNING: CALIFORNIALAW DOESNOT ALLOW DEFICIENCY JUDGEMENTS ON SELLER FINANCING. IF BUYER ULTIMATELY DEFAULTSON THE LOAN, SELLER'SSOLE REMEDY IS TOFORECLOSEON THEPROPERTY. 6.5 Seller's obliga on to provide nancing is con ngent upon Seller's reasonable approvalofBuyer's nancial condi on. Buyer to provide a current nancial statement and copies of its Federal tax returns for thelast 3years to Seller within 10 days following theDate ofAgreement. Seller has 10 days following receipt of such documenta on to sa sfy itselfwith regard to Buyer's nancial condi on and to no fy Escrow Holder as to whether or not Buyer's nancialcondi on is acceptable. IfSeller fails to no fy Escrow Holder,in wri ng,ofthedisapproval ofthis con ngencywithin said meperiod,it shallbe conclusively presumed that Seller has approved Buyer's nancial condi on. If Seller is not sa sed with Buyer's nancial condi on or ifBuyer fails to deliver therequired documenta on then Seller mayno fy Escrow Holder in wri ng that Seller Financing willnot beavailable,and Buyer shall havetheop on,within 10 days ofthe receipt of such no ce,to either terminatethis transac on or to purchase the Propertywithout Seller nancing. IfBuyer fails to no fy Escrow Holder within said meperiod of its elec on to terminatethis transac on then Buyer shallbe conclusively presumed to have elected to purchase theProperty without Seller nancing. If Buyer elects to terminate, Page 106 of 190 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited:10/31/2023 12:41PM OFA 20.30,Revised10 13 2022 Page 3 of 10 Buyer's Deposit shallbe refunded less Title Companyand Escrow Holder cancella on fees and costs,all ofwhich shall beBuyer's obliga on. 7.Real Estate Brokers.Ifa Party uses abroker, such broker shallnot be considereda Party to theAgreement, allterms between abroker and aParty will be governed by separate agreement, andin no event is Seller responsible for payments of commissions should Buyer use abroker under separate agreement. 7.1 Each Partyacknowledges receiving aDisclosure Regarding Real EstateAgency Rela onship,conrms and consents to thefollowing agency rela onships in this transac on with the following realestate broker(s)("Brokers") and/or their agents (Agent(s)): Seller's BrokerageFirm N/A License No. isthe broker of (checkone): theSeller; or boththe Buyer and Seller (dual agent). Seller'sAgent LicenseNo. is (checkone): theSeller's Agent(salespersonor brokerassociate); or both the Seller's Agent and the Buyer's Agent (dual agent). Buyer'sBrokerage Firm N/A LicenseNo. is thebrokerof (checkone): theBuyer; or boththe Buyerand Seller(dualagent). Buyer'sAgent License No. is(check one): the Buyer'sAgent(salesperson orbroker associate);or both theBuyer's Agent and the Seller's Agent (dualagent). ThePar es acknowledge that other than theBrokers and Agents listed above,there areno other brokers or agents represen ng thePar es or due any fees and/or commissions under this Agreement.Buyer shallusethe services of Buyer's Broker exclusively in connec on with any and allnego a ons and o ers with respect to theProperty for a period of1 year from thedate inserted for reference purposes at thetopof page1. 7.2 Buyer and Seller each represent and warrant to theother that he/she/it has had no dealings with any person,rm,broker,agent or nder in connec on with the nego a on of this Agreement and/or theconsumma on ofthe purchase and sale contemplated herein,other than theBrokers and Agents named in paragraph 7.1,and no broker,agent or other person,rmor en ty,other than said Brokers and Agents is/areen tled to anycommission or nder's feein connec on with this transac on as theresult of anydealings or acts ofsuch Party. Buyer and Seller do each hereby agreeto indemnify,defend,protect and hold theother harmless from and against anycosts,expenses or liability for compensa on,commission or charges which may beclaimed by anybroker,agent,nder or other similar party,other than said named Brokers and Agents by reason of anydealings or act of theindemnifying Party. 8.Escrowand Closing. 8.1 Upon acceptancehereof bySeller,this Agreement,including anycountero ers incorporated herein bythe Par es,shallcons tute not only theagreement ofpurchase and sale between Buyer and Seller,but also instruc ons to Escrow Holder for the consumma on ofthe Agreement through theEscrow. Escrow Holder shall not prepare any further escrow instruc ons resta ng or amending the Agreement unless specically so instructed bythe Par es or a Broker herein. Subject to thereasonable approval of thePar es,Escrow Holder may,however,include its standard general escrow provisions. In the event that thereis any conict between theprovisions ofthe Agreement and the provisions of anyaddi onal escrow instruc ons the provisions of theAgreement shall prevail as to thePar es and the Escrow Holder. 8.2 As soon as prac cala er the receipt of this Agreement and anyrelevant countero ers,Escrow Holder shall ascertain theDate ofAgreement as dened in paragraphs 1.2 and 20.2 and advisethe Par es and Brokers,in wri ng,ofthe date ascertained. 8.3 Escrow Holder is herebyauthorized and instructed to conduct the Escrow in accordance with this Agreement,applicable law and custom and prac ce of the community in which Escrow Holder is located,including anyrepor ng requirements ofthe InternalRevenue Code. In theevent ofaconict between the law of the state where the Propertyis located and the law of thestate where theEscrow Holder is located,thelaw ofthestate wherethe Property is located shallprevail. 8.4 Subject to sa sfac on ofthe con ngencies herein described,Escrow Holder shallclosethis escrow (the "Closing")byrecording a general warrantydeed (a grant deed, substantially inthe formof the grantdeed attachedto the Addendum as AttachmentOne, asmay bemodified to accommodaterequirements of anyexchange accommodator,in California)and theother documents required to be recorded,and bydisbursing thefunds and documents in accordance with this Agreement. 8.5 Buyer and Seller shalleach payone half of theEscrow Holder's charges and Seller Buyer shall paythe usualrecording fees and any required documentary transfer taxes. Seller shallpaythe premium for astandard coverage owner's or joint protec on policyof tle insurance. (Seealso paragraph 11.) 8.6 Escrow Holder shall verify that allofBuyer's con ngencies have been sa sed or waived prior to Closing. Thema ers contained in paragraphs 9.1 subparagraphs (b),(c),(d),(e),(g),(i),(n),and (o),9.4,12,13,14,16,18,20,21,22,and 24 are,however,ma ers ofagreement between the Par es onlyand arenot instruc ons to Escrow Holder. 8.7 If this transac on is terminated for non sa sfac on and non waiver of aBuyer's Con ngency,as dened in paragraph 9.2 or disapproval ofany other ma er subject to Buyer's approval,then neither ofthe Par es shall therea er haveany liabilityto theother under this Agreement,except to the extent of abreach of anya rma ve covenant or warrantyin this Agreement. In the event ofsuch termina on,Buyer shall,subject to theprovisions ofparagraph 8.10,bepromptly refunded all funds deposited by Buyer with Escrow Holder,less only the$100 provided for in paragraph 4.4 and theTitle Companyand Escrow Holder cancella on fees and costs,all ofwhich shall beBuyer's obliga on. Ifthis transac on is terminated as aresult ofSeller's breach ofthis Agreement then Seller shall paytheTitle Companyand Escrow Holder cancella on fees and costs. 8.8 The Closing shall occur on theExpected Closing Date,or as soon therea er as the Escrow is in condi on for Closing;provided,however,that if theClosing does not occur by theExpected Closing Date and said Date is not extended bymutual instruc ons ofthe Par es,a Partynot then in default under this Agreement may no fy the other Party,Escrow Holder,and Brokers,in wri ng that,unless theClosing occurs within 5business days following said no ce,theEscrow shallbe deemed terminated without further no ce or instruc ons. 8.9 Except as otherwise provided herein,thetermina on of Escrow shall not relieveor releaseeither Partyfromany obliga on to pay Escrow Holder's fees and costs or cons tute a waiver,releaseor discharge of anybreach or default that has occurred in theperformance ofthe obliga ons,agreements,covenants or warran es contained therein. 8.10 If this Escrow is terminated for anyreason other than Seller's breach or default,then as acondi on to thereturn ofBuyer's deposit,Buyer shall within 5 days a er wri en request deliver to Seller,at no charge,copies ofallsurveys,engineering studies,soilreports,maps,master plans,feasibilitystudies and other similar items prepared byor for Buyer that pertain to theProperty. 9.Con ngencies to Closing. 9.1 IF, BEFOREEXPIRATION OF THE APPLICABLETIME,BUYER FAILSTO PROVIDEESCROW HOLDER WRITTEN NOTICE OF BUYER'SDISAPPROVAL OF ANY OF BUYER'SCONTINGENCIES OR ANY OTHER MATTER THAT ISSUBJECT TOBUYER'S APPROVAL IN THIS AGREEMENT,THEN BUYER SHALL BE CONCLUSIVELY DEEMED TOHAVE SATISFIEDSUCH BUYER'SCONTINGENCIESAND/OR APPROVEDOF SUCHOTHER MATTERS. If anumber ofdays is completed in anyofthe op onalspaces in subparagraphs 9.1(a) through (m),then such number shallapply and overridethe pre printed number,even ifthe pre printed number is not stricken (collectively, "Buyer's ContingencyPeriod"). TheClosing ofthis transac on is con ngent upon the sa sfac on or waiver ofthe following con ngencies: Page 107 of 190 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited:10/31/2023 12:41PM OFA 20.30,Revised10 13 2022 Page 4 of 10 (a)Disclosure. Seller shallmaketo Buyer,through Escrow,all oftheapplicable disclosures required bylaw (SeeAIR CRE ("AIR")standard formen tled "Seller's Mandatory Disclosure Statement")and provide Buyer with acompleted Property Informa on Sheet ("Property Informa on Sheet")concerning theProperty,duly executedby oron behalfofSeller inthe currentform orequivalentto thatpublished bythe AIR within10 or daysfollowing theDateof Agreement. Buyer has 10 days fromthe receipt ofsaid disclosures to approve or disapprove thema ers disclosed. (b)PhysicalInspec on. Buyer has 10or 30 days followingthe receiptof thePropertyInforma on Sheetor the Date ofAgreement,whichever is later,to sa sfy itselfwith regard to the physical aspects and sizeof theProperty. (c)Hazardous Substance Condi onsReport. Buyerhas 30 or days following the receiptof thePropertyInforma on Sheetor the Date of Agreement,whichever is later,to sa sfy itselfwith regard to the environmentalaspects oftheProperty. Seller recommends that Buyer obtain a Hazardous Substance Condi ons Report concerning the Propertyand relevant adjoining proper es. Any such report shall bepaid for byBuyer. A "HazardousSubstance"for purposes of this Agreement is dened as anysubstance whosenature and/or quan ty ofexistence,use,manufacture,disposal or e ect,render it subject to Federal,state or local regula on,inves ga on,remedia on or removal as poten ally injurious to public health or welfare. A"Hazardous SubstanceCondi on"for purposes of this Agreement is dened as theexistenceon,under or relevantlyadjacent to theProperty ofa Hazardous Substance that would require remedia on and/or removal under applicable Federal,state or local law. (d)SoilInspec on. Buyer has30 or days followingthe receiptof thePropertyInforma on Sheetor the Date ofAgreement,whichever is later,to sa sfyitself with regard to thecondi on ofthe soils on the Property. Seller recommends that Buyer obtain asoil test report. Anysuch report shallbe paid for byBuyer. Seller shallprovide Buyer copies of anysoils report that Seller mayhave within 10 days following the DateofAgreement. (e)Governmental Approvals. Buyer has30 or daysfollowing theDateof Agreementto sa sfyitselfwith regardto approvals andpermits fromgovernmental agencies or departments which have or may havejurisdic on over theProperty and which Buyer deems necessary or desirable in connec on with its intended useof theProperty,including,but not limited to,permits and approvals required with respect to zoning,planning,building and safety,re,police, handicapped and Americans with Disabili es Act requirements,transporta on and environmentalma ers. (f)Condi ons of Title. Escrow Holder shallcausea current commitment for tleinsurance ("TitleCommitment") concerning the Propertyissued by the TitleCompany,as well as legiblecopies ofall documents referred to in the TitleCommitment ("Underlying Documents"),and ascaled and dimensioned plot showing theloca on ofany easementstobe deliveredto Buyerwithin 10or daysfollowing theDateof Agreement. Buyerhas10 daysfrom thereceipt ofthe TitleCommitment,theUnderlying Documents and the plot plan to sa sfy itselfwith regard to the condi on of tle. The disapproval byBuyer ofany monetary encumbrance,which bythe terms ofthis Agreement is not to remain against the Property a er theClosing,shall not be considered afailure ofthis con ngency,as Seller shall havethe obliga on,at Seller's expense,to sa sfyand removesuch disapproved monetary encumbrance at or before theClosing. (g)Survey. Buyer has30 or daysfollowingthe Date of Agreement receipt of the TitleCommitment andUnderlying Documents to sa sfy itselfwith regard to anyALTA tle supplement based upon a surveyprepared to American Land TitleAssocia on ("ALTA") standards for an owner's policy bya licensed surveyor,showing thelegal descrip on and boundary lines of theProperty,anyeasements of record,and anyimprovements,poles,structures and things located within 10 feet of either side of the Property boundary lines. Anysuch surveyshall beprepared at Buyer's direc on and expense. IfBuyer has obtained asurveyand approved the ALTA tle supplement,Buyer may elect within theperiod allowed for Buyer's approval of asurveyto have an ALTAextended coverage owner's form of tlepolicy,in which event Buyer shall payany addi onalpremium a ributable thereto. (h)Exis ngLeases andTenancy Statements. Seller shallwithin 10or daysfollowing theDate ofAgreementprovide bothBuyer andEscrow Holder with legiblecopies ofallleases,subleases or rentalarrangements (collec vely,"Exis ngLeases") a ec ng the Property., and with a tenancystatement ("Estoppel Cer cate") in the latest formor equivalent to that published bytheAIR,executed by Seller and/or each tenant and subtenant ofthe Property. Seller shall useits best e orts to have each tenant complete and execute an Estoppel Cer cate. If anytenantfails or refuses to provide an EstoppelCer cate then Seller shall complete and executean Estoppel Cer catefor that tenancy.Buyer has 10 days from the receipt of said Exis ng Leases and Estoppel Cer cates to sa sfyitselfwith regard to theExis ng Leases and any other tenancy issues.SeeAddendum at Paragraph30. (i)Owner'sAssocia on. Seller shallwithin10 or daysfollowing theDate ofAgreementprovide Buyerwith astatementand transfer packagefrom anyowner's associa on servicing the Property. Such transfer packageshallat aminimum include:copies of theassocia on's bylaws,ar cles of incorpora on,current budget and nancial statement. Buyer has 10 days from the receipt ofsuch documents to sa sfy itselfwith regard to the associa on. (j)OtherAgreements. Sellershall within 10 or 5 daysfollowingthe Dateof AgreementprovideBuyer withlegible copiesof allother agreements ("Other Agreements")known to Seller that willa ect theProperty a er Closing. Buyerhas 10 days from thereceipt ofsaid Other Agreements to sa sfy itselfwith regard to such Agreements. (k)Financing. If paragraph 5 hereof dealing with a nancing con ngencyhas not been stricken,thesa sfac on or waiver of such New Loan con ngency. (l)Exis ngNotes. If paragraph3.1(c) hasnotbeen stricken,Seller shall within10 or daysfollowing theDate ofAgreementprovide Buyer with legible copies of theExis ng Notes,Exis ng Deeds ofTrust and related agreements (collec vely,"Loan Documents")to which theProperty willremain subject a er the Closing. Escrow Holder shall promptlyrequest fromthe holders ofthe Exis ng Notes abeneciary statement ("Beneciary Statement") conrming:(1)the amount of theunpaid principal balance,the current interest rate,and thedate to which interest is paid,and (2)the nature and amount ofany impounds held bythe beneciaryin connec on with suchloan. Buyerhas 10or days followingthereceipt ofthe LoanDocumentsand BeneciaryStatements tosa sfy itself with regard to such nancing. Buyer's obliga on to closeis condi oned upon Buyer being able to purchase the Propertywithout accelera on or change in the terms ofany Exis ng Notes or charges to Buyer except as otherwise provided in this Agreement or approved byBuyer,provided,however,Buyer shallpay thetransfer fee referred to inparagraph 3.2hereof. Likewiseif Selleris tocarryback aPurchase MoneyNotethen Sellershall within10or daysfollowingthe Dateof Agreementprovide Buyerwith acopyof theproposed Purchase Money NoteandPurchase MoneyDeed ofTrust. Buyerhas 10or days followingthe receipt of such documents to sa sfy itself with regard to theformand content thereof. (m)PersonalProperty.Noneincluded.Inthe eventthat anypersonal property isincluded inthe Purchase Price,Buyer has10 or days following the Dateof Agreement to sa sfy itselfwith regard to the tlecondi on ofsuch personalproperty. Seller recommends that Buyer obtain aUCC 1 report. Anysuch report shall bepaid for byBuyer. Seller shallprovide Buyer copies of anyliens or encumbrances a ec ng such personalproperty that it is aware ofwithin 10 or daysfollowing theDate ofAgreement. (n)Destruc on,Damage orLoss. Subsequent to theDate ofAgreement and prior to Closing there shallnot have occurred a destruc on of,or damage or loss to,theProperty or anypor on thereof,from anycause whatsoever,which would cost more than $100,000.0010,000.00 to repair or cure. Ifthe cost of repair or cureis $10,000.00100,000.00 or less,Seller shallrepair or cure theloss prior to the Closing.For repairscosting morethan $100,000 inwhich Seller electsnot to repair,Buyer shall havethe op on,within 10 days a er receipt of wri en no ceof aloss cos ng more than $100,000.0010,000.00 to repair or cure,to either terminatethis Agreement or to purchase the Propertynotwithstanding such loss,but without deduc on or o set against thePurchase Price. Ifthecost to repair or cureis morethan $10,000.00100,000.00,and Buyer does not elect to terminatethis Agreement,Buyer shallbeen tled to any insuranceproceeds applicable to such Page 108 of 190 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited:10/31/2023 12:41PM OFA 20.30,Revised10 13 2022 Page 5 of 10 loss. Unless otherwise no ed in wri ng,Escrow Holder shallassume no such destruc on,damageor loss has occurred prior to Closing. (o)Material Change. Buyer shallhave 10 days following receipt ofwri en no ceof aMaterialChange within which to sa sfy itselfwith regard to such change. "Material Change" shall mean a substan aladverse change in theuse,occupancy,tenants,tle,or condi on of theProperty that occurs a er thedate ofthis o er and prior to theClosing. Unless otherwise no ed in wri ng,Escrow Holder shallassume that no Material Changehas occurred prior to theClosing. (p)SellerPerformance. The deliveryofall documents and thedue performance bySeller ofeach andeveryundertaking and agreement to beperformed bySeller under this Agreement. (q)Brokerage Fee. Payment at theClosing ofsuch brokeragefeeas is specied in this Agreement or later wri en instruc ons to Escrow Holder executed bySeller and Brokers ("BrokerageFee"). It is agreed by the Par es and Escrow Holder that Brokers are athird partybeneciaryof this Agreement insofar as the BrokerageFee is concerned,and that no change shall bemade with respect to thepayment oftheBrokerage Feespecied in this Agreement,without the wri en consent of Brokers. (r)Determinationfrom Planning Commission Regarding Conformance with General Plan and approval of aConditional Use Permit for Public Parking. Buyer's purchase of the property and close of escrow is contingent ona determination by the City of SanLuis Obispo's Planning COmmission that the acquisition of the Property conforms to the General Planand approval of a Conditional Use Permit to allow paid public parking on the Property. (s)Grant Deed. See Paragraph 28 of Addendum to Purchase andSale Agreement regarding soil contamination. 9.2 The con ngencies specied in subparagraphs 9.1(a)through (m) arefor thebenet of,and may bewaived by,Buyer,and arereferred to collec velyas "Buyer'sCon ngencies" and individually as a"Buyer's Con ngency." 9.3 Buyer's melyand wri en disapproval or condi onal approval ofa Buyer's Con ngencyor anyother ma er that is subject to Buyer's approval in this Agreement shall cons tute disapproval thereof ("Disapproved Item(s)"). Concurrent with no ce ofaDisapproved Item,Buyer maymakea request to Seller regarding such Disapproved Item("Buyer's Request"). If Buyer fails to make a melyand wri en Buyer's Request,then this Agreement shall terminatedueto the non sa sfac on and non waiver of acon ngency. Seller may respond to aBuyer's Request within 10 days following Seller's receipt thereof ("Seller'sResponse"). Seller's acceptance ofa Buyer's Request shall amend this Agreement accordingly. IfSeller fails to provide a mely and wri en Seller's Response,then Seller's Response shall bedeemed to be a rejec on of Buyer's Request. Buyer may,within 10 days following the earlier of Buyer's receipt of aSeller's Response (which is not an acceptance ofBuyer's Request) or the dateof Seller's deemed rejec on ofa Buyer's Request ("Buyer's Reply Period"),reply to aSeller's Response ("Buyer's Reply")and elect to (i)terminate this Agreement due to the non sa sfac on and non waiver ofthe applicable con ngency,(ii) accept the Seller's Response in which event this Agreement shall beamended accordingly,or (iii) withdraw Buyer's Request and waive the Disapproved Itemin which event Buyer shallaccept the Property subject to theDisapproved Item. If Buyer fails to provide a melyand wri en Buyer's Reply,thenBuyer shallbe deemed to have elected to terminatethis Agreement as of theend oftheBuyer's ReplyPeriod. The dateBuyer accepts aSeller's Response or withdraws aBuyer's Request and waives aDisapproved Itemshall bethedate ofBuyer's approval of theDisapproved Item. A Partyshall provide to Escrow Holder copy ofallno ces ofa Disapproved Item,Buyer's Request,Seller's Responseand Buyer's Reply and Escrow Holder shall promptly provide copies thereof to theother Party. Unless thePar es in wri ng agree otherwise,ifthe Expected Closing Date is a speciccalendar dateand a Buyer's Reply Period expires a er such specic calendar date,then notwithstanding paragraph 1.1,the Expected Closing Date shallbe extended to be3 business days a er theearlier ofthe dateBuyer withdraws aBuyer's Request and waives theapplicable Disapproved Itemor Buyer accepts the applicable Seller's Response. 9.4 The Par es acknowledge that extensive local,state and Federallegisla on establish broad liability upon owners and/or users of real property for the inves ga on and remedia on of Hazardous Substances. Thedetermina on ofthe existence ofa Hazardous Substance Condi on and the evalua on of theimpact of such a condi on are highlytechnical and beyond the exper seof Brokers. The Par es acknowledge that theyhave been advised byBrokers to consult their own technical and legalexperts with respect to thepossible presence of Hazardous Substances on theProperty or adjoining proper es,and Buyer and Seller are not relying upon anyinves ga on byor statement ofBrokers with respect thereto. The Par es hereby assumeallresponsibility for the impact ofsuch Hazardous Substances upon their respec ve interests herein. 10.Documents and Other ItemsRequired at or Before Closing. 10.1 Five days prior to theClosing dateEscrow Holder shallobtain an updated Title Commitment concerning the Propertyfrom the Title Companyand provide copies thereof to each ofthePar es. 10.2 Seller shalldeliver to Escrow Holder in mefor delivery to Buyer at the Closing: (a) Grant or general warrantydeed,duly executed and in recordable form,conveying fee tleto the Propertyto Buyer. (b) Ifapplicable,theBeneciaryStatements concerning Exis ng Note(s). (c) Ifapplicable,theExis ng Leases and Other Agreements together with duly executed assignmentsthereof by Seller and Buyer. Theassignment of Exis ng Leases shallbe on themost recent Assignment and Assump on ofLessor's Interest in Lease formpublished by the AIR or its equivalent. (d) An a davit executed by Seller to the e ect that Seller is not a"foreign person"within themeaning of InternalRevenue Code Sec on 1445 or successor statutes. If Seller does not provide such a davit in formreasonably sa sfactory to Buyer at least 3 business days prior to the Closing,Escrow Holder shall at theClosing deduct from Seller's proceeds and remit to theInternal Revenue Servicesuch sum as is required by applicable Federal law with respect to purchases from foreign sellers. (e) If thePropertyis located in California,an a davit executed by Seller to thee ect that Seller is not a''nonresident"within the meaning of California Revenue and TaxCode Sec on 18662 or successor statutes. If Seller does not provide such a davit in form reasonably sa sfactory to Buyer at least 3 business days prior to theClosing,Escrow Holder shall at the Closing deduct from Seller's proceeds and remit to theFranchise TaxBoard such sumas is required bysuch statute. (f) Ifapplicable,abill ofsale,duly executed,conveying tleto anyincluded personal propertyto Buyer. (g) If theSeller is acorpora on,aduly executed corporate resolu on authorizing the execu on of this Agreement and thesale oftheProperty. 10.3 Buyer shalldeliver to Seller through Escrow: (a) The cash por on ofthePurchase Priceand such addi onal sums as are required of Buyer under this Agreement shall bedeposited by Buyer with Escrow Holder,byfederal funds wiretransfer,or any other method acceptableto Escrow Holder in immediatelycollectablefunds,no later than 2:00 P.M. on the business day prior to theExpected Closing Date provided,however,that Buyer shallnot be required to deposit such monies into Escrow ifat the me set for the deposit of such monies Seller is in default or has indicated that it will not perform anyofits obliga ons hereunder. Instead,in such circumstances in order to reserve its rights to proceed Buyer need only provide Escrow with evidence establishing that the required monies wereavailable. (b) Ifa PurchaseMoney Note and Purchase MoneyDeed ofTrust are called for bythis Agreement,theduly executed originals of thosedocuments,the Purchase Money Deed of Trust being in recordable form,together with evidence of re insurance on theimprovements in theamount ofthefull replacement cost naming Seller as a mortgageloss payee,and a real estate taxservicecontract (at Buyer's expense),assuring Seller ofno ce ofthe status ofpayment ofreal property taxes during thelife ofthePurchase MoneyNote. (c) TheAssignment and Assump on ofLessor's Interest in Lease formspecied in paragraph 10.2(c) above,duly executed byBuyer. (d) Assump ons duly executed by Buyer ofthe obliga ons of Seller that accrue a er Closing under any Other Agreements. Page 109 of 190 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited:10/31/2023 12:41PM OFA 20.30,Revised10 13 2022 Page 6 of 10 (e) If applicable,awri en assump on duly executed byBuyer ofthe loan documents with respect to Exis ng Notes. (f) If theBuyer is acorpora on,adulyexecuted corporate resolu on authorizing theexecu on ofthis Agreement and thepurchase of the Property. 10.4 At Closing,Escrow Holder shallcause to beissued to Buyer astandard coverage (or ALTA extended,ifelected pursuant to 9.1(g))owner's formpolicyof tle insurance e ec ve as of the Closing,issued bythe TitleCompany in thefull amount of thePurchasePrice,insuring tle to theProperty vested in Buyer,subject onlyto theexcep ons approved by Buyer. In theevent there is aPurchase Money Deed of Trust in this transac on,the policyof tle insurance shall bea joint protec on policyinsuring both Buyer and Seller. IMPORTANT:IN APURCHASE OR EXCHANGEOF REAL PROPERTY, IT MAY BEADVISABLETO OBTAIN TITLE INSURANCEIN CONNECTION WITHTHE CLOSEOF ESCROW SINCE THEREMAY BEPRIOR RECORDED LIENSAND ENCUMBRANCESWHICH AFFECT YOUR INTEREST IN THE PROPERTY BEINGACQUIRED.A NEW POLICY OF TITLE INSURANCESHOULD BEOBTAINEDIN ORDER TO ENSUREYOUR INTEREST IN THE PROPERTY THAT YOUAREACQUIRING. 11.Prora ons and Adjustments. 11.1 Taxes. Applicable real propertytaxes and specialassessment bonds shall beprorated through Escrow as ofthedate ofthe Closing,based upon thelatest taxbill available. The Par es agree to prorate as of theClosing any taxes assessed against theProperty bysupplemental billlevied by reason of events occurring prior to the Closing. Payment ofthe prorated amount shallbe madepromptlyin cash upon receipt ofa copyof anysupplemental bill. 11.2 Insurance.WARNING:Any insurance which Seller mayhave maintained will terminate on the Closing. Buyer is advised to obtain appropriate insurance to cover the Property. 11.3 Rentals,Interest and Expenses. Scheduled rentals,interest on Exis ng Notes,u li es,and opera ng expenses shall beprorated as ofthe dateof Closing. ThePar es agree to promptlyadjust between themselves outside ofEscrow anyrents received a er the Closing. 11.4 Security Deposit. Security Deposits held bySeller shall begiven to Buyer as acredit to thecash required of Buyer at theClosing. 11.5 Post Closing Ma ers. Anyitem to beprorated that is not determined or determinable at theClosing shall bepromptly adjusted by thePar es by appropriate cash payment outside oftheEscrow when the amount due is determined. 11.6 Varia ons in Exis ng Note Balances. In theevent that Buyer is purchasing the Propertysubject to an Exis ng Deed of Trust(s),and in theevent that a BeneciaryStatement as to theapplicable Exis ng Note(s)discloses that the unpaid principal balance ofsuch Exis ng Note(s)at theclosing willbemore or less than theamount set forth in paragraph 3.1(c) hereof("Exis ng NoteVaria on"),then thePurchase MoneyNote(s) shallbereduced or increased byan amount equal to such Exis ng NoteVaria on. Ifthere is to beno Purchase MoneyNote,thecash required at the Closing per paragraph 3.1(a)shall bereduced or increased bythe amount of such Exis ng NoteVaria on. 11.7 Varia ons in New Loan Balance. In theevent Buyer is obtaining aNew Loan and theamount ul mately obtained exceeds theamount set forth in paragraph 5.1, then the amount ofthe Purchase Money Note,if any,shallbe reduced by the amount of such excess. 11.8 Owner's Associa on Fees. Escrow Holder shall:(i)bring Seller's account with theassocia on current and payanydelinquencies or transfer fees from Seller's proceeds,and (ii) payanyup front fees required by theassocia on from Buyer's funds. 12.Representa ons and Warran es of Seller and Disclaimers. 12.1 Seller's warran es and representa ons shallsurvive theClosing and delivery of the deed for aperiod of3years,and any lawsuit or ac on based upon them must be commenced within such meperiod. Seller's warran es and representa ons aretrue,materialand relied upon by Buyer and Brokers in all respects. Seller herebymakes thefollowing warran es and representa ons to Buyer and Brokers: (a)Authority of Seller. Seller is theowner ofthe Propertyand/or has thefull right,power and authority to sell,conveyand transfer the Propertyto Buyer as provided herein,and to performSeller's obliga ons hereunder. (b)Maintenance During Escrow and Equipment Condi on At Closing. Except as otherwise provided in paragraph 9.1(n) hereof,Seller shall maintain the Propertyun l theClosing in its present condi on,ordinary wear and tear excepted. (c)HazardousSubstances/Storage Tanks. Seller has no knowledge,except as otherwise disclosed to Buyer in wri ng,oftheexistence or prior existence on the Property of anyHazardous Substance,nor of theexistence or prior existence ofany aboveor below ground storage tank.SeeAddendum atParagraph 28. (d)Compliance. Except as otherwisedisclosed in wri ng,Seller has no knowledge ofany aspect or condi on ofthe Propertywhich violates applicable laws,rules,regula ons,codes or covenants,condi ons or restric ons,or of improvements or altera ons madeto thePropertywithout apermit where onewas required,or ofany unfullled order or direc veof anyapplicable governmental agencyor casualtyinsurance companyrequiring any inves ga on,remedia on,repair, maintenanceor improvement be performed on the Property. (e)Changes in Agreements. Prior to theClosing,Seller willnot violateor modifyanyExis ng Leaseor Other Agreement,or createany new leases or other agreements a ec ng the Property,without Buyer's wri en approval,which approval willnot be unreasonably withheld. (f)Possessory Rights. Seller has no knowledge that anyone will,at theClosing,have anyright to possession oftheProperty,except as disclosed bythis Agreement or otherwisein wri ng to Buyer. (g)Mechanics'Liens. There are no unsa sed mechanics'or materialmens'lien rights concerning theProperty. (h)Ac ons,Suits orProceedings. Seller has no knowledge ofanyac ons,suits or proceedings pending or threatened before anycommission,board, bureau,agency,arbitrator,court or tribunal that would a ect theProperty or theright to occupy or u lizesame. (i)No ce of Changes. Seller will promptly no fyBuyer and Brokers in wri ng of anyMaterial Change(seeparagraph 9.1(o))a ec ng theProperty that becomes known to Seller prior to the Closing. (j)No Tenant Bankruptcy Proceedings. Seller has no no ceor knowledge that anytenant of theProperty is thesubject ofa bankruptcyor insolvency proceeding. (k)No Seller Bankruptcy Proceedings. Seller is not thesubject ofa bankruptcy,insolvency or probateproceeding. (l)Personal Property. Seller has no knowledge that anyone will,at theClosing,have anyright to possession of anypersonal property included in the Purchase Price nor knowledge ofanyliens or encumbrances a ec ng such personalproperty,except as disclosed bythis Agreement or otherwise in wri ng to Buyer. 12.2 Buyer herebyacknowledges that,except as otherwise stated in this Agreement,Buyer is purchasing theProperty in its exis ng condi on and will,by the mecalled for herein,makeor have waived all inspec ons of thePropertyBuyer believes are necessaryto protect its own interest in,and its contemplated useof,the Property. ThePar es acknowledge that,except as otherwise stated in this Agreement,no representa ons,inducements,promises,agreements,assurances,oralor wri en,concerning the Property,or anyaspect ofthe occupa onalsafety and health laws,Hazardous Substance laws,or any other act,ordinance or law,havebeen madeby either Party or Brokers, or relied upon byeither Partyhereto.See Addendumat Paragraph 29. 12.3 In theevent that Buyer learns is informedin writing that aSeller representa on or warrantymight be untrue prior to theClosing,and Buyer elects to purchase the Propertyanyway then,and in that event,Buyer waives anyright that it may haveto bring an ac on or proceeding against Seller or Brokers regarding said representa on or warranty. 12.4 Any environmentalreports,soils reports,surveys,and other similar documents which wereprepared by third party consultants and provided to Buyer by Page 110 of 190 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited:10/31/2023 12:41PM OFA 20.30,Revised10 13 2022 Page 7 of 10 Seller or Seller's representa ves,have been delivered as an accommoda on to Buyer and without anyrepresenta on or warrantyas to the su ciency,accuracy, completeness,and/or validityof said documents,all ofwhich Buyer relies on at its own risk. Seller believes said documents to beaccurate,but Buyer is advised to retain appropriate consultants to review said documents and inves gate theProperty. 13.Possession. Possession of theProperty shall begiven to Buyer at the Closing subject to therights oftenants under Exis ng Leases.See Paragraph 30of Addendumto Purchase andSale Agreement. 14.Buyer's Entry. At any meduring theEscrow period,Buyer,and its agents and representa ves,shall havethe right at reasonable mes and subject to rights oftenants,to enter upon theProperty for the purpose ofmaking inspec ons and tests specied in this Agreement. No destruc vetes ng shall beconducted,however,without Seller's prior approval which shallnot be unreasonably withheld. Following anysuch entryor work,unless otherwise directed in wri ng bySeller,Buyer shallreturn theProperty to the condi on it was in prior to such entry or work,including there compac on or removal ofanydisrupted soilor materialas Seller mayreasonably direct. Allsuch inspec ons and tests and anyother work conducted or materials furnished with respect to the Property byor for Buyer shall bepaid for byBuyer as and when due and Buyer shallindemnify,defend,protect and hold harmless Seller and thePropertyof and from anyand all claims,liabili es,losses,expenses (including reasonable a orneys'fees),damages,including thosefor injury to person or property,arising out of or rela ng to anysuch workor materials or the acts or omissions of Buyer,its agents or employees in connec on therewith. 15.Further Documentsand Assurances. ThePar es shall each,diligentlyand in good faith,undertake all ac ons and procedures reasonablyrequired to placethe Escrow in condi on for Closing as and when required by this Agreement. ThePar es agreeto provide all further informa on,and to execute and deliver all further documents,reasonably required by Escrow Holder or theTitle Company. 16.A orneys'Fees. Ifany Partyor Broker brings an ac on or proceeding (including arbitra on)involving the Propertywhether founded in tort,contract or equity,or to declarerights hereunder,the Prevailing Party (as herea er dened) in any such proceeding,ac on,or appeal thereon,shall been tled to reasonable a orneys'fees and costs. Such fees may beawarded in thesame suit or recovered in aseparate suit,whether or not such ac on or proceeding is pursued to decision or judgment. Theterm "Prevailing Party" shallinclude,without limita on,a Partyor Broker who substan allyobtains or defeats the reliefsought,as the case maybe,whether by compromise,se lement,judgment,or theabandonment by the other Partyor Broker ofits claimor defense. The a orneys'fees award shallnot becomputed in accordance with anycourt feeschedule,but shallbe such as to fullyreimburse alla orneys'fees reasonably incurred. 17.Prior Agreements/Amendments. 17.1 This Agreement supersedes any and all prior agreements between Seller and Buyer regarding the Property. 17.2 Amendments to this Agreement aree ec ve onlyifmade in wri ng and executed by Buyer and Seller. 18.Broker's Rights. 18.1 If this saleis not consummated dueto the default of either theBuyer or Seller,thedefaul ng Party shallbe liableto and shallpay to Brokers theBrokerage Feethat Brokers would havereceived had thesale been consummated. IfBuyer is the defaul ng party,payment ofsaid BrokerageFeeis in addi on to any obliga on with respect to liquidated or other damages. 18.2 Upon theClosing,Brokers areauthorized to publicizethe facts of this transac on. 19.No ces. 19.1 Whenever anyParty,Escrow Holder or Brokers herein shalldesireto giveor serveanyno ce,demand,request,approval,disapproval or other communica on,each such communica on shallbein wri ng and shallbe delivered personally,by messenger,or bymail,postage prepaid,to theaddress set forth in this agreement or by facsimiletransmission,electronic signature,digital signature,or email. 19.2 Service ofanysuch communica on shall bedeemed made on the date ofactual receipt if personallydelivered,or transmi ed by facsimiletransmission, electronicsignature,digitalsignature,or email. Anysuch communica on sent byregular mail shallbe deemed given 48 hours a er thesameis mailed. Communica ons sent byUnited States Express Mail or overnight courier that guaranteenext day deliveryshall bedeemed delivered 24 hours a er delivery of the sameto thePostal Serviceor courier. If such communica on is received on aSaturday,Sunday or legal holiday,it shallbedeemed received on thenext business day. 19.3 Any Party or Broker hereto may from me to me,by no cein wri ng,designatea di erent address to which,or adi erent person or addi onalpersons to whom,allcommunica ons aretherea er to bemade. 20.Dura on of O er. 20.1 If thiso eris notaccepted bySeller on orbefore 5:00P.M.according tothe mestandard applicable tothe cityof San Luis Obispo onthe dateof November 27, 2023 ,it shallbedeemed automa callyrevoked. 20.2 The acceptanceofthis o er,or ofanysubsequent countero er hereto,that creates an agreement between thePar es as described in paragraph 1.2,shall be deemed madeupon delivery to the other Party or either Broker herein of aduly executed wri ng uncondi onally accep ng the last outstanding o er or countero er. 21.LIQUIDATED DAMAGES. (This Liquidated Damages paragraph is applicableonly if ini aled by bothPar es). THEPARTIES AGREETHAT IT WOULDBE IMPRACTICABLE OR EXTREMELY DIFFICULT TOFIX,PRIOR TOSIGNING THISAGREEMENT, THE ACTUAL DAMAGES WHICH WOULDBE SUFFEREDBY SELLER IF BUYER FAILSTO PERFORM ITS OBLIGATIONSUNDER THIS AGREEMENT. THEREFORE,IF,AFTER THESATISFACTION OR WAIVER OF ALL CONTINGENCIESPROVIDED FOR THEBUYER'S BENEFIT,BUYER BREACHESTHIS AGREEMENT,SELLER SHALL BEENTITLED TOLIQUIDATEDDAMAGES IN THE AMOUNTOF . UPONPAYMENT OFSAID SUMTOSELLER, BUYERSHALL BERELEASEDFROM ANYFURTHER LIABILITY TOSELLER, ANDANY ESCROW CANCELLATION FEES ANDTITLE COMPANY CHARGESSHALL BEPAID BY SELLER. Buyer's Ini als Seller's Ini als Page 111 of 190 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited:10/31/2023 12:41PM OFA 20.30,Revised10 13 2022 Page 8 of 10 22.ARBITRATION OF DISPUTES.N/A (This Arbitra on ofDisputes paragraph is applicable onlyif ini aled by both Par es.) 22.1 ANY CONTROVERSY ASTOWHETHER SELLER IS ENTITLEDTO LIQUIDATEDDAMAGESAND/OR BUYER IS ENTITLEDTOTHE RETURN OF THEDEPOSIT SHALL BE DETERMINEDBY BINDINGARBITRATION ADMINISTERED BY THE JUDICIAL ARBITRATION &MEDIATION SERVICES, INC.("JAMS") IN ACCORDANCEWITH ITSCOMMERCIAL ARBITRATION RULES ("COMMERCIAL RULES"). ARBITRATION HEARINGS SHALL BE HELDIN THE COUNTY WHERE THEPROPERTY IS LOCATED. SUCHCONTROVERSY SHALL BE ARBITRATEDBY A SINGLEARBITRATOR, APPOINTEDUNDER THECOMMERCIAL RULES WHOHAS HADAT LEAST 5YEARS OF EXPERIENCEIN THETYPE OF REAL ESTATE THAT IS THE SUBJECT OF THIS AGREEMENT. THE ARBITRATOR SHALL HEAR AND DETERMINESAID CONTROVERSY IN ACCORDANCEWITH APPLICABLELAW OF THEJURISDICTION WHERETHE PROPERTY IS LOCATED,THE INTENTION OF THE PARTIESASEXPRESSED IN THIS AGREEMENT AND ANY AMENDMENTS THERETO,ANDUPON THEEVIDENCE PRODUCEDAT AN ARBITRATION HEARING. PRE ARBITRATION DISCOVERY SHALL BE PERMITTEDIN ACCORDANCEWITH THECOMMERCIAL RULES OR STATE LAW APPLICABLE TOARBITRATION PROCEEDINGS. THEARBITRATOR SHALL RENDER AN AWARDWITHIN 30DAYS AFTER THECONCLUSION OF THE HEARING,WHICH MAY INCLUDEATTORNEYS'FEESAND COSTSTOTHE PREVAILINGPARTY PER PARAGRAPH16 HEREOF AND SHALL BEACCOMPANIED BY A REASONEDOPINION. THE FAILURE OR REFUSAL OF APARTY TO PAY SUCH PARTY'S REQUIREDSHARE OF THE DEPOSITSFOR ARBITRATOR COMPENSATION OR ADMINISTRATIVECHARGES SHALL CONSTITUTE AWAIVER BY SUCHPARTY TOPRESENT EVIDENCE OR CROSS EXAMINEWITNESSES, BUT SUCH WAIVER SHALL NOT ALLOW FOR ADEFAULT JUDGMENT AGAINST THE NON PAYINGPARTY IN THEABSENCE OF EVIDENCE ANDLEGAL ARGUMENT AS THEARBITRATOR MAY REQUIREFOR MAKINGAN AWARD.JUDGMENT MAY BE ENTERED ON THEAWARD IN ANY COURT OF COMPETENT JURISDICTION NOTWITHSTANDING THE FAILUREOF A PARTY DULY NOTIFIEDOF THE ARBITRATION HEARING TOAPPEAR THEREAT. 22.2 BUYER'S RESORTTO OR PARTICIPATIONIN SUCHARBITRATIONPROCEEDINGS SHALLNOT BAR SUITIN ACOURT OF COMPETENTJURISDICTION BYTHE BUYER FOR DAMAGESAND/OR SPECIFIC PERFORMANCEUNLESS ANDUNTIL THEARBITRATION RESULTSINAN AWARDTO THESELLER OF LIQUIDATEDDAMAGES,IN WHICHEVENT SUCHAWARD SHALLACTAS ABAR AGAINSTANY ACTIONBYBUYER FOR DAMAGES AND/OR SPECIFIC PERFORMANCE. 22.3 NOTICE: BYINITIALING IN THESPACE BELOW YOU ARE AGREEING TO HAVE ANYDISPUTE ARISING OUT OF THEMATTERS INCLUDEDIN THE"ARBITRATION OF DISPUTES"PROVISIONDECIDED BYNEUTRALARBITRATION ASPROVIDED BYCALIFORNIA LAW ANDYOU AREGIVING UPANYRIGHTS YOU MIGHT POSSESSTO HAVE THE DISPUTELITIGATED INACOURT OR JURY TRIAL. BYINITIALING IN THESPACE BELOW YOU ARE GIVINGUP YOUR JUDICIALRIGHTS TO DISCOVERY AND APPEAL,UNLESS SUCHRIGHTS ARESPECIFICALLYINCLUDED INTHE "ARBITRATIONOF DISPUTES"PROVISION. IFYOU REFUSETO SUBMIT TO ARBITRATION AFTER AGREEING TO THISPROVISION,YOU MAYBE COMPELLEDTO ARBITRATEUNDER THEAUTHORITYOF THECALIFORNIA CODE OF CIVIL PROCEDURE. YOUR AGREEMENT TO THIS ARBITRATIONPROVISION ISVOLUNTARY. WEHAVE READAND UNDERSTANDTHEFOREGOING ANDAGREE TO SUBMIT DISPUTESARISING OUT OF THE MATTERSINCLUDEDIN THE"ARBITRATION OF DISPUTES" PROVISIONTO NEUTRALARBITRATION. Buyer's Ini als Seller's Ini als 23.Miscellaneous. 23.1 Binding E ect. This Agreement shall bebinding on thePar es without regard to whether or notparagraphs 21 and 22 areini aled byboth of thePar es. Paragraphs 21 and 22 areeach incorporated into this Agreement only ifini aled by both Par es at the me that the Agreement is executed. Signatures to this Agreement accomplished bymeans ofelectronicsignature or similar technology shall belegaland binding. 23.2 Applicable Law. This Agreement shall begoverned by,and paragraph 22.3is amended to refer to,thelaws ofthe statein which theProperty is located. Anyli ga on or arbitra on between thePar es hereto concerning this Agreement shallbeini ated in the countyin which theProperty is located. 23.3 Time of Essence. Timeis oftheessence ofthis Agreement. 23.4 Counterparts. This Agreement maybe executed byBuyer and Seller in counterparts,each ofwhich shallbedeemed an original,and all ofwhich together shall cons tute oneand thesameinstrument. Escrow Holder,a er verifying that the counterparts are iden calexcept for thesignatures,is authorized and instructed to combine thesigned signaturepages on oneof thecounterparts,which shallthen cons tute the Agreement. 23.5 Waiver of Jury Trial.THEPARTIES HEREBY WAIVE THEIR RESPECTIVE RIGHTSTOTRIAL BY JURY IN ANY ACTION OR PROCEEDING INVOLVINGTHE PROPERTY OR ARISINGOUT OF THIS AGREEMENT. 23.6 Conict. Anyconict between the printed provisions of this Agreement and thetypewri en or handwri en provisions shallbe controlled by the typewri en or handwri en provisions.Seller and Buyer must ini al any and all handwri en provisions. 23.7 1031 Exchange. Both Seller and Buyer agreeto cooperate with each other in theevent that either or both wish to par cipate in a1031 exchange. Any partyini a ng an exchange shallbear all costs of such exchange. Thecoopera ng Partyshall not haveany liability(special or otherwise) for damages to the exchanging Party in the event that the saleis delayed and/or that thesale otherwise fails to qualifyas a1031 exchange. 23.8 Days. Unless otherwise specicallyindicated to thecontrary,theword "days"as used in this Agreement shallmean and refer to calendar days. 24.Disclosures Regarding TheNature of a Real Estate Agency Rela onship. 24.1 The Par es and Brokers agreethat their rela onship(s) shall begoverned bytheprinciples set forth in theapplicable sec ons of theCalifornia CivilCode,as summarized in paragraph 24.2. 24.2 When entering into a discussion with arealestate agent regarding arealestate transac on,a Buyer or Seller should from theoutset understand what type ofagency rela onship or representa on it has with the agent or agents in the transac on. Buyer and Seller acknowledge being advised bythe Brokers in this transac on,as follows: (a)Seller's Agent. ASeller's agent under a lis ng agreement with theSeller acts as theagent for theSeller only. A Seller's agent or subagent has the following a rma ve obliga ons:(1)To the Seller:A duciary duty of utmost care,integrity,honesty,and loyaltyin dealings with the Seller. (2)To the Buyerand the Seller:a.Diligent exerciseofreasonable skills and carein performance ofthe agent's du es. b.A duty of honest and fair dealing and good faith. c.A duty to disclose allfacts known to theagent materially a ec ng the valueor desirabilityofthe property that arenot known to,or within thediligent a en on and observa on of,the Par es. An agent is not obligated to reveal to either Partyanyconden al informa on obtained from theother Partywhich does not involve thea rma ve du es set forth above. (b)Buyer's Agent. A selling agent can,with a Buyer's consent,agree to act as agent for theBuyer only. In thesesitua ons,theagent is not the Seller's agent,even ifby agreement theagent mayreceive compensa on for services rendered,either in full or in part fromthe Seller. An agent ac ng onlyfor aBuyer has thefollowing a rma veobliga ons. (1)To the Buyer:A duciary duty ofutmost care,integrity,honesty,and loyalty in dealings with theBuyer. (2)To the Buyerand the Seller:a.Diligent exerciseofreasonable skills and carein performanceofthe agent's du es. b.A dutyof honest and fair dealing and good faith. c.A duty to discloseall facts known to theagent materiallya ec ng thevalue or desirabilityof theproperty that arenot known to,or within the diligent a en on and Page 112 of 190 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited:10/31/2023 12:41PM OFA 20.30,Revised10 13 2022 Page 9 of 10 observa on of,thePar es. An agent is not obligated to reveal to either Partyany conden alinforma on obtained from the other Partywhich does not involvethe a rma vedu es set forth above. (c)Agent Represen ng BothSeller and Buyer. Areal estateagent,either ac ng directly or through one or more associatelicensees,can legallybe the agent of both the Seller and the Buyer in atransac on,but onlywith theknowledge and consent of both the Seller and the Buyer. (1)In adual agency situa on,the agent has thefollowing a rma veobliga ons to both the Seller and theBuyer:a. A duciary dutyofutmost care,integrity,honestyand loyalty in the dealings with either Seller or the Buyer.b.Other du es to theSeller and theBuyer as stated abovein their respec vesec ons (a)or (b) ofthis paragraph 24.2. (2)In represen ng both Seller and Buyer,theagent may not,without theexpress permission ofthe respec veParty,discloseto the other Party conden alinforma on,including,but not limited to,facts rela ng to either Buyer's or Seller's nancial posi on,mo va ons,bargaining posi on,or other personal informa on that may impact price, including Seller's willingness to accept aprice less than thelis ng priceor Buyer's willingness to payaprice greater than thepriceo ered. (3) Theabove du es ofthe agent in areal estatetransac on do not relieve a Seller or Buyer from theresponsibility to protect their own interests. Buyer and Seller should carefully read all agreements to assurethat they adequately express their understanding ofthe transac on. A realestate agent is a person qualied to adviseabout realestate. If legal or tax adviceis desired,consult a competent professional. Buyer has theduty to exercise reasonablecare to protect Buyer,including as to thosefacts about the Propertywhich areknown to Buyer or within Buyer's diligent a en on and observa on. Both Seller and Buyer should stronglyconsider obtaining taxadvice from a competent professional becausethe federaland state taxconsequences ofa transac on can be complexand subject to change. (d)FurtherDisclosures. Throughout this transac on Buyer and Seller mayreceivemore than one disclosure,depending upon thenumber ofagents assis ng in thetransac on. Buyer and Seller should each read its contents each meit is presented,considering therela onship between themand thereal estate agent in this transac on and that disclosure. Buyer and Seller each acknowledge receipt ofa disclosure ofthe possibilityof mul plerepresenta on by the Broker represen ng that principal. This disclosure may be part ofa lis ng agreement,buyer representa on agreement or separatedocument. Buyer understands that Broker represen ng Buyer may also represent other poten albuyers,who may consider,makeo ers on or ul mately acquire the Property. Seller understands that Broker represen ng Seller may also represent other sellers with compe ng proper es that maybe ofinterest to this Buyer. Brokers have no responsibility with respect to anydefault or breach hereof byeither Party. ThePar es agree that no lawsuit or other legalproceeding involving anybreach ofduty,error or omission rela ng to this transac on maybebrought against Broker morethan oneyear a er theDate ofAgreement and that the liability (including court costs and a orneys' fees),of anyBroker with respect to anybreach ofduty,error or omission rela ng to this Agreement shall not exceed thefeereceived bysuch Broker pursuant to this Agreement;provided,however,that theforegoing limita on on each Broker's liability shall not be applicable to anygross negligence or willful misconduct ofsuch Broker. 24.3 Conden al Informa on. Buyer and Seller agreeto iden fy to Brokers as "Conden al"any communica on or informa on given Brokers that is considered bysuch Partyto beconden al. 25.Construc on of Agreement.In construing this Agreement,allheadings and tles are for the convenience ofthe Par es only and shallnot beconsidered apart ofthis Agreement. Whenever required by thecontext,thesingular shall include the pluraland viceversa. This Agreement shallnot be construed as ifprepared by oneof thePar es,but rather according to its fair meaning as awhole,as if both Par es had prepared it. 26.Addi onal Provisions. Addi onalprovisions ofthis o er,ifany, areas followsor area achedhereto byan addendum oraddenda consis ng of paragraphs 28 through 32 . (If there are noaddi onal provisions write"NONE".) ATTENTION:NO REPRESENTATION OR RECOMMENDATION ISMADE BY AIR CREOR BY ANY BROKER ASTO THE LEGAL SUFFICIENCY, LEGAL EFFECT, OR TAX CONSEQUENCESOF THIS AGREEMENT OR THETRANSACTION TOWHICH IT RELATES.THEPARTIES AREURGED TO: 1.SEEK ADVICE OF COUNSEL AS TOTHE LEGAL ANDTAX CONSEQUENCESOF THISAGREEMENT. 2.RETAIN APPROPRIATE CONSULTANTSTOREVIEW ANDINVESTIGATE THECONDITION OF THEPROPERTY.SAIDINVESTIGATION SHOULDINCLUDEBUT NOT BELIMITED TO:THE POSSIBLEPRESENCEOF HAZARDOUSSUBSTANCES, THEZONING OF THEPROPERTY, THEINTEGRITY ANDCONDITION OF ANY STRUCTURES ANDOPERATING SYSTEMS,AND THE SUITABILITY OF THEPROPERTY FOR BUYER'S INTENDEDUSE. WARNING:IF THEPROPERTY ISLOCATEDIN ASTATE OTHER THAN CALIFORNIA,CERTAIN PROVISIONS OF THIS AGREEMENT MAY NEED TOBE REVISEDTO COMPLY WITH THELAWS OF THESTATE IN WHICH THE PROPERTY ISLOCATED. NOTE: 1.THISFORM IS NOT FOR USEIN CONNECTION WITHTHE SALEOF RESIDENTIAL PROPERTY. 2.IF EITHER PARTY ISA CORPORATION,IT ISRECOMMENDEDTHAT THISAGREEMENT BESIGNED BY TWOCORPORATE OFFICERS. Theundersigned Buyer o ers and agrees to buy the Propertyon theterms and condi ons stated and acknowledges receipt ofa copyhereof. BROKER N/A A n: Title: Address: Phone: Fax: Date: BUYER City of San Luis Obispo, a Municipal Corporation By: NamePrinted: Title: Phone: Fax: Page 113 of 190 ________ ________ ________ ________ INITIALS INITIALS © 2019 AIR CRE. All Rights Reserved. Last Edited:10/31/2023 12:41PM OFA 20.30,Revised10 13 2022 Page 10 of 10 Email: FederalID No.: BrokerDRE License#: AgentDRE License#: Email: By: NamePrinted: Title: Phone: Fax: Email: Address: FederalID No.: 27.Acceptance. 27.1 Seller accepts theforegoing o er to purchase theProperty and hereby agrees to sell theProperty to Buyer on theterms and condi ons therein specied. 27.2 In considera on ofreal estatebrokerage service rendered by Brokers,Seller agrees to pay Brokers a realestateBrokerage Feein asumequal to %ofthe PurchasePrice tobedivided betweenthe Brokersas follows:Seller'sBroker %and Buyer'sBroker %. This Agreement shall serveas an irrevocable instruc on to Escrow Holder to paysuch Brokerage Feeto Brokers out of theproceeds accruing to the account of Seller at the Closing. 27.3 Seller acknowledges receipt of acopyhereof and authorizes Brokers to deliver asigned copyto Buyer. NOTE:A PROPERTY INFORMATION SHEET ISREQUIRED TOBE DELIVEREDTO BUYER BY SELLER UNDER THIS AGREEMENT. BROKER N/A A n: Title: Address: Phone: Fax: Email: FederalID No.: BrokerDRE License#: Agent'sDRE License#: Date: SELLER 1166 Higuera Street, LLC By: NamePrinted:Nicholas Tompkins Title:Manager Phone:805-440-1839 Fax: Email:Paul@nktcommercial.com By: NamePrinted: Title: Phone: Fax: Email: Address: FederalID No.: AIR CRE * h ps://www.aircre.com * 213 687 8777 * contracts@aircre.com NOTICE:Nopart of theseworks may be reproduced in any form without permission in wri ng. Page 114 of 190 ____________ _____________ ADDENDUM TO STANDARD OFFER, AGREEMENT AND ESCROW INSTRUCTIONS FOR PURCHASE OF REAL ESTATE (NON-RESIDENTIAL) DATED OCTOBER 31, 2023 BUYER: CITY OF SAN LUIS OBISPO, A MUNICIPAL CORPORATION SELLER: 1166 HIGUERA STREET, LLC This Addendum, including additional or modified terms in Paragraphs 28-32, is attached to and made part of the above-referenced Agreement (said Agreement and the Addendum are hereinafter collectively referred to as the Agreement ). In the event of any conflict between the provisions of this Addendum and the printed provisions of the Agreement, this provisions in this Addendum shall control. 28. Hazardous Substances. The title report for the Property includes a 1997 grant deed Seller is aware of discovery of lead in the soil from historic origin, but received a Closure Letter For Abatement of Lead Contaminated Soil dated August 7, 2019, from documents. As set forth in the Contingencies to Closing at Paragraph 9(s), the Grant Deed conveying the Property to the City will not include the soil contamination statement contained in the 1997 grant deed. 29. Condition/As Is. (A) No Representations as to Property. There are no representations, agreements, arrangements, or circumstances, oral or written, between the parties relating to the subject matter contained in this Agreement that are not fully expressed in the Agreement, and Seller has not made and does not make any representation or warranty concerning any matter or thing affecting or relating to the Property, including but not limited to its fitness for a particular use, its physical condition or any other matter; (B) -IS representations and warranties contained herein, election to purchase the Property will be based upon and will constitute evidence of independent investigation of the Property, its use, development potential and suitability for intended use, including (without limitation) the following: the feasibility of operating and maintaining the Property in compliance applicable zoning; the size and dimensions of the Property; the availability, cost and adequacy of water, sewerage and any utilities serving or required to serve the Property; the presence and adequacy of current or required infrastructure or other improvements on, near or affecting the Property; any surface, soil, subsoil, fill or other physical conditions of or affecting the Property, such as climate, geological, drainage, air, water or mineral conditions; the condition of title to the Property; the existence of governmental laws, statutes, rules, regulations, ordinances, limitations, restrictions or requirements concerning the use, density, location or suitability of the Property for any existing or proposed development thereof including but not limited to zoning, building, subdivision, environmental or other such regulations; Page 115 of 190 ____________ _____________ the necessity or availability of any general or specific plan amendments, rezoning, zoning variances, conditional use permits, building permits, environmental impact reports, parcel or subdivision maps and public reports, requirements of any improvement agreements; requirements of the California Subdivision Map Act, and any other governmental permits, approvals or acts; the necessity or existence of any dedications, taxes, fees, charges, costs or assessments which may be imposed in connection with any governmental regulations or the obtaining of any required permits; and all of the matters concerning the condition, use, development or sale of the Property. Seller will not be liable for any loss, damage, injury or claim to any person or property arising from or caused by the use of the Property by Buyer. Except with respect to a default by Seller hereunder (including a breach of warranties and representations), Buyer at the Closing expressly waives its rights granted under California Civil Code Section 1542, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, THAT IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY. Initials:___________ (C) Environmental Matters/Release Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the Hazardous Materials Transportation Act (49 U.S.C. Section 1801, et seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901, et seq.), and under the applicable laws of California. The City must rely on its own investigation and not on any representation by Seller regarding Hazardous Materials. Buyer shall rely solely upon its own investigation and inspection of the Property and the improvements thereon and upon the aid and advice of ndependent expert(s) in purchasing the Property, and shall take title to the Property without any warranty, express or implied, by the Seller. Except for any statements contained in the Agreement, Seller makes no representations regarding Hazardous Materials in, on or under the Property. knowledge and disclosures regarding Hazardous Materials are limited to the contents of Accordingly, Buyer hereby expressly waives and relinquishes any and all rights and remedies Buyer may now or hereafter have against Seller, whether known or unknown, with respect to any past present, or future presence of Hazardous Materials on, under or about the Property or with respect to any past, present or future violations of any rules, regulations or laws, now or hereinafter enacted, regulating or governing use, handling, storage or disposable of Hazardous Materials, including, without limitation (i) any and all remedies Buyer may now or hereafter have under the Comprehensive Environmental law, rule or regulation, (ii) any and all rights Buyer may now or hereafter have against Seller under the Carpenter-PresleyTanner Hazardous Substance Account Act (California Health and Safety Page 116 of 190 ____________ _____________ Code, Section 25300 et seq.), as amended and any similar law, rule or regulation, and (iii) any and all claims, whether known or unknown, now or hereafter existing, with respect to the Property under Section 107 of CERCLA (42 U.S. C.A. § 9607). ASSOCIATION HEREBY ACKNOWLEDGES THAT IT HAS READ AND IS FAMILIAR WITH THE PROVISIONS OF BELOW A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS THAT THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, THAT IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELEASED PARTY. Buyer Initials: ______ 30. Existing Lease. Seller is a party to a lease for a portion of the Property with Restorative Any Assumption of the Lease by Buyer will be subject to the execution of a new lease between terms of the Existing Lease. 31. Independent Contract Consideration. The Buyer agrees as a condition of this Agreement contingencies. Notwithstanding any other provision of this Agreement to the contrary, if this Agreement is terminated by either party prior to Closing pursuant to any right to do so in this Agreement, or, if not so terminated, at the Closing, the Independent Consideration, whether paid over or held in escrow, shall be paid to Seller, which amount the parties bargained for and agreed this Agreement and for Seller's execution, delivery and performance of this Agreement. The Independent Contract Consideration is in addition to and independent of any other consideration or payment provided in this Agreement, is nonrefundable, and is fully earned and shall be retained by Seller notwithstanding any other provision of this Agreement, provided, the Independent Contract Consideration shall be applied as a credit to the Purchase Price at Closing. 32. Interpretation (or their representatives) sophisticated and knowledgeable in the matters dealt with in this Agreement. Accordingly, any rule of law (including California Civil Code Section 1654 and any successor statute) or legal decision that would require interpretation of any ambiguities against the party that has drafted it is not applicable and is waived. The provisions of this Agreement shall be interpreted in a reasonable manner to effect the purpose of the parties and this Agreement. Page 117 of 190 ____________ _____________ SELLER: BUYER: 1166 Higuera Street, LLC, City of San Luis Obispo, a California limited liability company a Municipal Corporation By: __________________________ By: _____________________________ Nicholas Tompkins, Manager Name: __________________________ Title: ____________________________ APPROVED AS TO FORM: ___________________________________ City Attorney ATTEST: ___________________________________ City Clerk Page 118 of 190 ____________ _____________ Attachment One Form of Grant Deed (attached) Page 119 of 190 ____________ _____________ RECORDING REQUESTED BY: WHEN RECORDED MAIL DOCUMENT TOGETHER WITH TAX STATEMENTS TO: APN: 002-436-022 GRANT DEED Exempt from recording fees pursuant to Government Code Section 27383 DOCUMENTARY TRANSFER TAX: $0.00. Governmental agency acquiring title. R&T Code 11922. ___ Computed on the consideration or value of property conveyed; OR ___ Computed on the consideration or value less liens or encumbrances remaining at time of sale. ___ Unincorporated area; X City of San Luis Obispo, and BUILDING JOBS AND HOME ACT FEE $ . This conveyance is exempt from fee pursuant to GC §27388.1(a)(2)(D) FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, 1166 HIGUERA STREET, LLC, a California limited liability company, hereby GRANTS to CITY OF SAN LUIS OBISPO, a Municipal Corporation the following described property in the City of San Luis Obispo, County of San Luis Obispo, State of California, commonly referred to as 1166 Higuera Street, San Luis Obispo, CA, and more particularly described as: SEE EXHIBIT A ATTACHED HERETO AND MADE A PART HEREOF BY THIS REFERENCE TOGETHER WITH ALL BUILDINGS AND IMPROVEMENTS LOCATED THEREON AND ANY AND ALL IMPROVEMENTS, EASEMENTS, PRIVILEGES AND RIGHTS APPURTENANT THERETO THE PROPERTY IS CONVEYED TO GRANTEE SUBJECT TO: (a) A lien not yet delinquent for taxes for real property and personal property, and any general or special assessments against the Property; and (b) All liens, encumbrances, easements, covenants, conditions and restrictions of record. Page 120 of 190 ____________ _____________ 1166 Higuera Street, LLC, a California limited liability company Dated: ____________, 2023 By: _______________________________ Nicholas Tompkins, Manager Dated: ____________, 2023 By: ________________________________ Kathleen Tompkins, Manager A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document. STATE OF CALIFORNIA ) )ss. COUNTY OF SAN LUIS OBISPO ) On _____________, 2023, before me, _____________________________________________, Notary Public, personally appeared Nicholas Tompkins and Kathleen Tompkins , who proved to me on the basis of satisfactory evidence to be the person whose name is subscribed to the within instrument and acknowledged to me that he executed the same in his authorized capacity, and that by his signature on the instrument the person, or the entity upon behalf of which the person acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. ________________________________________ (Notary Seal) Signature of Notary Public Page 121 of 190 ____________ _____________ Exhibit A Property Legal THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF SAN LUIS OBISPO, COUNTY OF SAN LUIS OBISPO, STATE OF CALIFORNIA AND IS DESCRIBED AS FOLLOWS : PARCEL 3 OF LOT LINE ADJUSTMENT SLO AL 19-0061, RECORDED MARCH 24,2021 AS INSTRUMENT NO. 2021022406 IN THE OFFICE OF THE COUNTY RECORDER OF SAN LUIS OBISPO COUNTY, DESCRIBED AS FOLLOWS : That real property int he City of San Lus Obispo, County of San Luis Obispo, State of California being a portion of Block 30 according to the official map of said City filed for record in Book A of Maps at Page 46 in the Office of the County Recorder of said County more particularly described as follows : That portion of Block 30 of the City of San Luis Obispo, and of Block 30 of the Buckley Tract, in the City of San Luis Obispo, County of San Luis Obispo, State of California, according to the Maps of said city and said tract, filed in the Office of the County Recorder of said County, described as follows : Beginning at the point of intersection of the Southwesterly line of Toro Street with the Northwesterly line of Higuera Street as said street lines existed on February 16, 1946 ; thence South 53° 40' West along said line of Higuera Street, 197.85 feet; thence North 36° 19' West, 90 feet; thence North 53° 40' East parallel with the Northwesterly line of Higuera Street, 189 feet, more or less, to the Southwesterly line of Toro Street; thence South 42° 58' East along said street line 90 feet, more or less to the True Point of Beginning. The above-described parcel is intended to reflect that certain deed recorded February 26,1946 in Volume 403 at page 115 of Official Records of said County. TOGETHER WITH That portion of Block 30 of the City of San Luis Obispo and of Block 30 of Buckley Tract, in the City of San Luis Obispo, County of San Luis Obispo, State of California, according to the Maps of said city and said tract, filed in the Office of the County Recorder of said County, described as follows: Beginning at a point on the Westerly line of Toro Street, which bears South 40° 43' East, 137 feet, more or less, from the Southerly corner of Monterey and Toro Streets, said point also being the North corner of the property conveyed to Charles J. Russell, by Deed dated April 27, 1889 and recorded May 6, 1889 in Book 4 at page 389 of Deeds; thence South 54° 06' West, along the Northwesterly line of the property so conveyed, 135 .89 feet, more or less, to the East corner of the property conveyed to H .b. Douglas, et ux., by Deed dated March 4, 1946 and recorded March 7, 1946 in Book 403 at page 211 of Official Records; thence North 35° 54' West, along the Northeast line of the property so conveyed, to the South corner of the property conveyed to Al Teimann, by Deed dated January 26, 1950 and recorded January 30, 1950 in Book 550 at page 135 of Official Records; thence North 54° 06' East, along the Southeast line of the property so conveyed, 131 .28 feet to the East corner thereof, being a point on the Westerly line of Toro Street; thence South 40° 43' East, along said Westerly line of Toro Street, to the Point of Beginning . The above described parcel is intended to reflect that certain deed recorded December 15,1971 in Volume 1644 at page 716 Official Records of said County APN: 002-436-022 Page 122 of 190 R ______ RESOLUTION NO. _____ (2023 SERIES) A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN LUIS OBISPO, CALIFORNIA, APPROVING AN AMENDMENT TO THE 2023- 24 BUDGET ALLOCATION FOR FISCAL YEAR 2023-24 FOR PURCHASE AND USE OF THE PROPERTY LOCATED AT 1166 HIGUERA STREET WHEREAS, in accordance with the San Luis Obispo City Charter Section 802, the City Manager submitted the 2023-25 Financial Plan to Council for its review and consideration on June 6, 2023; and WHEREAS, on June 6, 2023, the Council approved and appropriated the 2023-24 budget allocation including operating expenditures, debt service, and capital improvement plan budget (Resolution No. 11429, 2023 Series); and WHEREAS, the City created an Infrastructure Investment Fund to set aside funding for future infrastructure projects that contribute to improved economic development and enhanced quality of life in the City of San Luis Obispo; and WHEREAS, the use of these funds is at the discretion of Council based on the guidelines established; and WHEREAS, acquisition of the property located at 1166 Higuera Street would serve the City’s interests by providing parking supply in the Upper Monterey area , is consistent with the City’s General Plan goals, and could appropriately be used as a public parking lot upon issuance of a conditional use permit; and WHEREAS, parking lot and landscape improvements, in addition to potential demolition of an existing structure, need to be completed to facilitate the City’s use of this property; and WHEREAS, the Infrastructure Investment Fund balance is sufficient to cover costs associated with purchasing the property located at 1166 Higuera Street; and WHEREAS, the City’s Infrastructure Investment Fund will be used to pay for acquisition and improvement costs and will be reimbursed via an interfund loan with a repayment by the Parking Fund at a rate of 2.88% and a repayment term of 30 years. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of San Luis Obispo as follows: Page 123 of 190 Resolution No. ______ (2023 Series) Page 2 R ______ SECTION 1. The 2023-24 budget is hereby amended to appropriate $4,845,000 from the Infrastructure Investment Fund to cover costs associated with the purchase and improvement costs for the property located at 1166 Higuera Street, San Luis Obispo, CA. Upon motion of Council Member ___________, seconded by Council Member ___________, and on the following roll call vote: AYES: NOES: ABSENT: The foregoing resolution was adopted this _____ day of _______________ 2023. ___________________________ Mayor Erica A. Stewart ATTEST: ______________________ Teresa Purrington City Clerk APPROVED AS TO FORM: ______________________ J. Christine Dietrick City Attorney IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of San Luis Obispo, California, on ______________________. ___________________________ Teresa Purrington City Clerk Page 124 of 190 Long Term Forecast With Changes to CIP and No Rate Reductions PARKING FUND LONG‐TERM FORECAST UNAUDITED ACTUAL ADOPTED BUDGET REVISED PROJECTED BUDGET BUDGETED PROJECTED PROJECTED PROJECTED PROJECTED PROJECTED 2022‐23 2023‐24 2023‐24 2024‐25 2025‐26 2026‐27 2027‐28 2028‐29 2029‐30 REVENUES Service Charges Potential Acquisition of Surface Lot ‐ 30,400 60,800 71,100 71,100 71,100 71,100 71,100 First Hour Free ‐ (830,000) (1,420,000) (1,420,000) (1,420,000) (1,420,000) (1,420,000) (1,420,000) Free Parking Sunday (96,000) (163,000) (163,000) (163,000) (163,000) (163,000) (163,000) Other Revenues 829,710 37,800 80,460 85,000 85,000 85,000 85,000 85,000 85,000 TOTAL REVENUES 7,965,182 10,203,324 9,867,163 9,395,434 9,365,334 9,822,287 9,841,606 9,611,401 9,623,640 Proceeds from Debt Financing 46,315,169 47,427,585 TOTAL REVENUES INCL. DEBT FINANCING 7,965,182 56,518,493 57,294,748 9,395,434 9,365,334 9,822,287 9,841,606 9,611,401 9,623,640 EXPENDITURES Staffing 1,690,052 1,922,948 2,088,629 2,197,468 2,262,973 2,332,493 2,429,976 2,532,079 2,638,989 Contract Services 829,932 950,946 950,946 632,861 646,015 659,463 673,210 687,266 701,638 Other Operating Expenditures 733,292 695,046 667,660 694,888 738,601 799,681 867,973 944,469 1,030,308 General Government (CAP) 872,976 1,019,048 1,019,048 1,049,619 1,102,100 1,157,205 1,215,066 1,275,819 1,339,610 Operating Transfers Out 390,646 368,233 368,233 372,223 376,333 380,566 384,926 154,183 158,809 Total Operating Expenditures 4,516,898 4,956,220 5,094,516 4,947,060 5,126,022 5,329,408 5,571,151 5,593,816 5,869,353 Potential Acquisition of Surface Lot Improvements ‐ 125,000 ‐ ‐ ‐ ‐ ‐ ‐ Total Capital Expenditures 1,936,247 48,594,961 58,989,800 882,467 631,665 1,102,292 507,612 998,814 1,209,136 Potential Acquisition of Surface Lot Loan Repayment ‐ ‐ 118,500 237,100 237,100 237,100 237,100 237,100 237,100 Total Debt Service 819,617 4,195,421 2,565,990 3,928,434 3,933,635 3,830,590 3,826,182 3,827,455 3,826,080 TOTAL EXPENDITURES 7,272,762 57,746,602 66,650,306 9,757,960 9,691,322 10,262,290 9,904,944 10,420,085 10,904,570 CHANGES IN FINANCIAL POSITION BEGINNING FUND BALANCE 13,129,005 13,210,257 13,210,257 3,793,696 3,370,167 2,983,176 2,482,170 2,357,829 1,488,142 Revenue Over/(Under) Expenses $692,420 (1,228,109) ($9,355,558) (362,526) (325,988) (440,003) (63,338) (808,684) (1,280,929) ENDING FUND BALANCE W/O CALPERS DOWN PAYMENT 13,821,425 11,982,148 3,854,699 3,431,170 3,044,179 2,543,173 2,418,832 1,549,145 207,213 Cal PERS Additional Discretionary Payment (ADP) 61,003 61,003 61,003 61,003 61,003 61,003 61,003 61,003 ENDING FUND BALANCE 13,210,257 11,921,145 3,793,696 3,370,167 2,983,176 2,482,170 2,357,829 1,488,142 146,210 Policy Reserve Level ‐ 20% 896,927 1,000,202 1,027,900 997,356 1,032,104 1,071,705 1,118,945 1,169,383 1,223,314 CalPERS Trust Fund 64,896 64,896 64,896 64,896 64,896 64,896 64,896 64,896 64,896 UNRESERVED FUND BALANCE 12,248,434 10,856,047 2,700,900 2,307,915 1,886,177 1,345,569 1,173,988 253,864 (1,142,000) 2023‐2025 FINANCIAL PLAN Page 125 of 190 Page 126 of 190 1 APPROVE THE PURCHASE OF 1166 HIGUERA STREET AND AUTHORIZE THE EXECUTION OF THE PURCHASE AND SALE AGREEMENT November 14, 2023 City Council Meeting 2 Recommendation 1.Approve the purchase of 1166 Higuera Street; and 2.Authorize the execution of the Purchase and Sale Agreement; and 3.Approve a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving an amendment to the 2023-24 Budget Allocation for Fiscal Year 2023-24 for purchase and use of the property located at 1166 Higuera Street,” authorizing an interfund loan to fund the acquisition under the terms and conditions set forth in Exhibit A. 3 1166 Higuera Street Property Corner of Higuera Street and Toro Street 21,607 SF 44 Paid Parking Stalls 4 1166 Higuera Parking Layout 5 Purchase and Sale Agreement 1.The City received the appraisal from the seller on October 3, 2023, stating that the appraised value of the property is $4,720,000. The appraised value is identified as the purchase price of the property and included in the Purchase and Sale Agreement (PSA). 2.Staff will bring the acquisition of the property to the Planning Commission on December 13, 2023, for a determination of General Plan Conformance per California Government Code Section 65402 and for consideration of approval of a Conditional Use Permit to allow public parking on the property prior to the close of escrow.These two actions are a required step to close escrow and are contingency of the purchase and sale agreement. 6 General Plan and Zoning Considerations Illustrative Downtown Concept Plan 7 General Plan and Zoning Considerations General Plan Land Use Element - Upper Monterey Special Focus Area “In the Upper Monterey area, the emphasis will be on revitalization and enhancement. The area above Johnson shall have an emphasis on land use compatibility and neighborhood preservation. The following actions will be pursued in this area: A.The City shall investigate adding the Upper Monterey area to the Downtown Parking District, thereby allowing in-lieu payment towards common parking facilities. B.The City shall integrate a new Downtown Transit Center in the Upper Monterey area and provide enhanced connectivity to the center from the Upper Monterey area. … H. The City will develop an Upper Monterey area master plan and design guide that will provide guidance on street enhancements, façade improvement programs, and pedestrian enhancement along Monterey Street. As part of this effort, the City will investigate the ability to apply form-based codes to guide future development and will involve residents in adjoining areas as well as business and property owners along Monterey Street as part of the public review process in development of the master plan/design guide. Particular attention will be given to creek protection, noise, safety, light and glare, and privacy impacts to adjoining neighborhoods” 8 Due Diligence Process In order to accommodate the 44 paid parking stalls,two ADA parking stalls,and prepare the site for use as public parking,several necessary improvements have been identified: Parking lot improvements including signage, striping, installation of wheel stops, and installation of pay station are estimated to cost $15,000 in total; and Landscape improvements, including reconstructing the planter areas are estimated to cost $10,000; and Demolition of existing structure(s) as at least one of the existing structures will need to be removed as it was determined to be unhabitable and are estimated to cost $100,000. 9 Financing 1.Staff is recommending funding the acquisition with an interfund loan by the Infrastructure Investment Fund (IIF) with a repayment by the Parking Fund at a rate of 2.88% over 30 years. 2.Using these loan terms and the purchase price for the property, the repayment is estimated to be $118,500 in FY 2023-24 and $237,100 annually thereafter. 3.The IIF currently has a balance of $12,500,000 to support this request of $4,720,000. With the 2023-25 Financial Plan, the IIF balance was planned to be used to support design services for the Prado Road Interchange Project and portions of the construction costs for the Prado Creek Bridge Project. Due to the current delivery timeframe for both projects, the IIF can support the request for $4,720,000 at this time. 10 Parking Fund Long Term Forecast 11 Recommendation 1.Approve the purchase of 1166 Higuera Street; and 2.Authorize the execution of the Purchase and Sale Agreement; and 3.Approve a Draft Resolution entitled, “A Resolution of the City Council of the City of San Luis Obispo, California, approving an amendment to the 2023-24 Budget Allocation for Fiscal Year 2023-24 for purchase and use of the property located at 1166 Higuera Street,” authorizing an interfund loan to fund the acquisition under the terms and conditions set forth in Exhibit A. 12 13 14 15 Alternatives 1.Do not execute the Purchase and Sale Agreement and proceed with the property acquisition of 1166 Higuera Street.This is not recommended,as this purchase will develop parking supply in the Upper Monterey area and is consistent with the City’s General Plan goals and allows for the orderly development of upper Monterey. 16 Alternatives Cont. 2.Approve the Purchase and Sale Agreement and provide alternative direction regarding funding the purchase.Additional funding options may include: a.An interfund loan from the IIF that incorporates alternative terms,such as deferral of payments for five years. •Revised Resolution with proposed findings needed •This option could include the accrual of interest during the deferral period o Estimated at $135,000 per year if 2.88% LAIF rate used b.Purchase of the property by the General Fund without any repayment requirement from the Parking Fund. •Revised Resolution with proposed findings needed o May account for potential or planned future use that is not specific to public parking •Net revenue (revenue minus operating and up-front improvement costs) from interim public parking use to be returned to General Fund