American Skiing Company and Subsidiaries
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED OCTOBER 24, 1999
--------------------------------
Commission File Number 1-13507
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American Skiing Company
(Exact name of registrant as specified in its charter)
Delaware 04-3373730
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
P.O. Box 450
Bethel, Maine 04217
(Address of principal executive office) (Zip Code)
(207) 824-8100
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by checkmark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes [X] No [ ]
The number of shares outstanding of each of the issuer's classes of
common stock were 14,760,530 shares of Class A common stock, $.01 par value, and
15,642,543 shares of common stock, $.01 par value, as of December 6, 1999.
<PAGE>
Table of Contents
Part I - Financial Information
Item 1. Financial Statements
Condensed Consolidated Statement of Operations (unaudited)
for the three months ended October 24, 1999 and October 25, 1998.....3
Condensed Consolidated Balance Sheet
as of October 24, 1999 (unaudited) and July 25, 1999.................4
Condensed Consolidated Statement of Cash Flows (unaudited) for the
three months ended October 24, 1999 and October 25, 1998.............5
Notes to (unaudited) Condensed Consolidated Financial Statements......6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
General...............................................................9
Liquidity and Capital Resources......................................10
Changes in Results of Operations.....................................17
Changes in Financial Condition.......................................19
Year 2000 Disclosure.................................................20
Forward-Looking Statements...........................................22
Item 3. Quantitative and Qualitative Disclosures
About Market Risk...................................................22
Part II -Other Information
Item 2. Changes in Securities................................................23
Item 4. Submission of Matters to a Vote of Security Holders..................23
Item 6. Exhibits and Reports on Form 8-K.....................................24
<PAGE>
Part I - Financial Information
Item 1 Financial Statements
Condensed Consolidated Statement of Operations
(In thousands, except share and per share amounts)
For the three months ended
October 24, 1999 October 25, 1998
(unaudited)
Net revenues:
Resort $ 20,806 $20,311
Real estate 2,549 4,485
---------------- ---------------
Total net revenues 23,355 24,796
Operating expenses:
Resort 29,015 28,074
Real estate 3,284 4,040
Marketing, general and administrative 10,753 10,826
Depreciation and amortization 3,202 2,708
---------------- ---------------
Total operating expenses 46,254 45,648
---------------- ---------------
Loss from operations (22,899) (20,852)
Interest expense 7,966 8,930
---------------- ---------------
Loss before benefit from income taxes (30,865) (29,782)
Benefit from income taxes (9,052) (10,573)
---------------- ---------------
Loss before extraordinary item and
Accounting change (21,813) (19,209)
Extraordinary loss, net of tax
benefit of $396 621 --
Cumulative effect of change in
accounting principle, net of tax
benefit of $449 704 --
----------------- ---------------
Loss before preferred stock dividends (23,138) (19,209)
Accretion of discount and dividends accrued on
mandatorily redeemable preferred stock 4,816 1,059
----------------- ---------------
Net loss available to common shareholders $ (27,954) $ (20,268)
================= ===============
Accumulated deficit, beginning of period $ (32,311) $ 11
Net loss available to common shareholders (27,954) (20,268)
----------------- ---------------
Accumulated deficit, end of period $ (60,265) $ (20,257)
================= ===============
Basic and fully diluted loss per common share (note 5)
Loss from continuing operations $ (0.88) $ (0.67)
Extraordinary loss, net of taxes (0.02) --
Cumulative effect of change in accounting
principle, net of taxes (0.02) --
----------------- ---------------
Net loss available to common shareholders $ (0.92) $ (0.67)
================= ===============
Weighted average common shares outstanding
- basic and diluted 30,286,773 30,285,552
================= ===============
See accompanying notes to (unaudited)
Condensed Consolidated Financial Statements.
<PAGE>
Condensed Consolidated Balance Sheet
(In thousands, except share and per share amounts)
October 24, 1999 July 25, 1999
(unaudited)
Assets
Current assets
Cash and cash equivalents $ 7,827 $ 9,003
Restricted cash 7,504 5,480
Accounts receivable 8,573 6,474
Inventory 11,977 10,837
Prepaid expenses 6,638 5,309
Deferred financing costs 1,908 1,530
Deferred income taxes 4,273 4,273
---------------- --------------
Total current assets 48,700 42,906
Property and equipment, net 526,506 529,154
Real estate developed for sale 260,261 207,745
Goodwill 76,259 76,672
Intangible assets 22,676 22,987
Deferred financing costs 9,499 7,749
Long-term investments 670 669
Other assets 17,583 18,472
Restricted cash 1,585 1,148
---------------- --------------
Total assets $ 963,739 $ 907,502
================= ==============
Liabilities, Mandatorily Redeemable Preferred
Stock and Shareholders' Equity
Current liabilities
Current portion of long-term debt $ 18,831 $ 61,555
Accounts payable and other current
liabilities 82,962 77,951
Deposits and deferred revenue 38,396 19,710
Demand note, Principal Shareholder -- 1,830
---------------- --------------
Total current liabilities 140,189 161,046
Long-term debt, excluding current portion 286,615 313,844
Subordinated notes and debentures, excluding
current portion 127,125 127,062
Other long-term liabilities 13,466 13,461
Deposits and deferred revenue 1,578 1,140
Deferred income taxes 162 10,062
Minority interest in subsidiary 393 396
---------------- --------------
Total liabilities 569,528 627,011
Mandatorily Redeemable 10 1/2% Preferred
Stock, par value of $1,000 per share; 40,000
shares authorized; 36,626 shares issued and
outstanding; including cumulative dividends
(redemption value of $45,012 and $43,836,
respectively) 45,012 43,836
Mandatorily Redeemable 8 1/2% Series B
Preferred Stock, par value of $1,000 per
share; 150,000 shares authorized, issued
and outstanding; including cumulative
dividends (redemption value of $153,310 and $0,
respectively) 140,372 --
Shareholders' Equity
Common stock, Class A, par value of $.01
per share; 15,000,000 shares authorized;
14,760,530 issued and outstanding 148 148
Common stock, par value of $.01 per share;
100,000,000 shares authorized; 15,526,243
issued and outstanding 155 155
Additional paid-in capital 268,789 268,663
Accumulated deficit 60,265) (32,311)
---------------- --------------
Total shareholders' equity 208,827 236,655
---------------- --------------
Total liabilities, mandatorily redeemable
preferred stock and shareholders' equity $ 963,739 $ 907,502
================ ==============
See accompanying notes to (unaudited)
Condensed Consolidated Financial Statements.
<PAGE>
Condensed Consolidated Statement of Cash Flows
(In thousands)
For the three months ended
October 24, 1999 October 25, 1998
(unaudited)
Cash flows from operating activities
Net loss $ (23,138) $ (19,209)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 3,202 2,708
Amortization of discount on debt 88 68
Deferred income taxes (9,897) (10,573)
Stock compensation charge 126 --
Extraordinary loss 1,017 --
Cumulative effect of change in accounting
principle 1,153 --
Gain from sale of assets (1,402) --
Decrease (increase) in assets:
Restricted cash (2,461) (118)
Accounts receivable (2,099) 1,211
Inventory (1,140) 57
Prepaid expenses (1,645) (398)
Real estate developed for sale (53,251) (12,820)
Other assets 785 (3,558)
Increase (decrease) in liabilities:
Accounts payable and other current
liabilities 5,011 6,451
Deposits and deferred revenue 19,124 16,889
Other long-term liabilities 5 463
Other, net (7) --
---------------- --------------
Net cash used in operating activities (64,529) (18,829)
---------------- --------------
Cash flows from investing activities
Capital expenditures (6,496) (20,017)
Proceeds from sale of assets 9,102 --
Other, net -- 26
---------------- --------------
Net cash provided by (used in) investing
activities 2,606 (19,991)
---------------- --------------
Cash flows from financing activities
Net proceeds from issuance of
mandatorily redeemable securities 136,732 --
Borrowings (repayments) under Senior
Credit Facility (106,186) 9,595
Proceeds from long-term debt 180 4,774
Proceeds from non-recourse real estate
debt 40,826 19,508
Repayment of long-term debt (3,334) (1,204)
Repayment of non-recourse real estate
debt (2,032) --
Deferred financing costs (3,609) (210)
Repayment of demand note, Principal
Shareholder (1,830) --
---------------- --------------
Net cash provided by financing activities 60,747 32,463
---------------- --------------
Net increase (decrease) in cash and cash
equivalents (1,176) (6,357)
Cash and cash equivalents, beginning of period 9,003 15,370
---------------- --------------
Cash and cash equivalents, end of period $ 7,827 $ 9,013
================ ==============
See accompanying notes to (unaudited)
Condensed Consolidated Financial Statements.
<PAGE>
Notes to (unaudited) Condensed Consolidated Financial Statements
1. General. American Skiing Company (the "Parent") is organized as a
holding company and operates through various subsidiaries (collectively, the
"Company"). In the opinion of the Company, the accompanying unaudited condensed
consolidated financial statements contain all adjustments necessary to present
fairly the financial position of the Company as of October 24, 1999 and the
results of operations and the statement of cash flows for the three months ended
October 24, 1999 and October 25, 1998. All adjustments are of a normal recurring
nature. The unaudited condensed consolidated financial statements should be read
in conjunction with the following notes and the Company's consolidated financial
statements in its Form 10-K, filed with the Securities and Exchange Commission
on October 23, 1999.
2. Accounting Change. In the first quarter of fiscal 2000, the Company
changed its method of accounting for start-up costs in accordance with its
adoption of AICPA Statement of Position 98-5, "Reporting on the Costs of
Start-up Activities" ("SOP 98-5"). The change involved expensing all start-up
costs as incurred, rather than capitalizing and subsequently amortizing such
costs. The initial adoption of SOP 98-5 resulted in the write-off of $1.2
million of start-up costs that had previously been capitalized as of July 25,
1999. The net effect of the write-off of $704,000 (which is net of income tax
benefits of $449,000) has been expensed and reflected as a cumulative effect of
a change in accounting principle in the accompanying statement of operations for
the three months ended October 24, 1999.
3. Income Taxes. The benefit from income taxes on loss is based on a
projected annual effective tax rate of 29.3%. The net deferred income tax asset
includes the tax benefit of cumulative net operating losses and other tax
attributes, net of the reduction in current income taxes payable resulting
principally from the excess of depreciation reported for income tax purposes
over that reported for financial reporting purposes. The effective rate includes
a $3.0 million valuation allowance established in the first quarter of fiscal
2000 relating to certain deferred tax assets for prior net operating losses. As
a result of the Series B Preferred Stock Transaction described in footnote 8,
the realization of the tax benefit of certain of the Company's net operating
losses and other tax attributes is dependent upon the occurrence of certain
future events. It is the judgment of the Company that a valuation allowance of
$3.0 million against its deferred tax assets for net operating losses and other
tax attributes is appropriate because it is more likely than not that the
benefit of such losses and attributes will not be realized. Based on facts known
at this time, the Company expects to substantially realize the benefit of the
remainder of its net operating losses and other tax attributes affected by the
Series B Preferred Stock Transaction.
4. Seasonal Business. Results for interim periods are not indicative of
the results expected for the year due to the seasonal nature of the Company's
business.
5. Earnings (loss) per Common Share. Effective January 25, 1998, the
Company adopted the provisions of the Financial Accounting Standards Board's
Statement of Financial Accounting Standards No. 128, "Earnings Per Share" ("SFAS
128"). SFAS 128 specifies the computation, presentation, and disclosure
requirements for earnings per share for public entities. Earnings (loss) per
common share for the three months ending October 24, 1999 and October 25, 1998
were determined based on the following data:
<PAGE>
Three Months Ended
October 24, 1999 October 25, 1998
(unaudited) (unaudited)
---------------- ----------------
Income (loss)
Loss before preferred stock dividends and
accretion and extraordinary items $ (21,813) $ (19,209)
Accretion of discount and dividends
accrued on mandatorily redeemable
preferred stock 4,816 1,059
---------------- ----------------
Loss before extraordinary items (26,629) (20,268)
Extraordinary loss, net of taxes 621 -
Cumulative effect of change in
accounting principle, net of taxes 704 -
---------------- ---------------
Net loss available to common shareholders $ (27,954) $ (20,268)
================ ===============
Shares
Total weighted average shares outstanding
(basic and diluted) 30,287 30,286
================ ===============
The Company currently has outstanding 186,626 shares of convertible
preferred stock (represented by two separate classes) which are convertible into
shares of the Company's common stock. The common stock shares into which these
securities are convertible have not been included in the dilutive share
calculation as the impact of their inclusion would be anti-dilutive. The Company
also has 3,041,844 exercisable options outstanding to purchase shares of its
common stock under the Company's stock option plan as of October 24, 1999. These
shares are also excluded from the dilutive share calculation, as the impact of
their inclusion would also be anti-dilutive.
6. Reclassifications. Certain amounts in the prior year's unaudited
condensed consolidated financial statements and the audited financial statements
as filed with the Securities and Exchange Commission on October 23, 1999 have
been reclassified to conform to the current period presentation.
7.Long Term Debt. The Company established a senior credit facility on
November 12, 1997. On October 7, 1999, this senior credit facility was amended,
restated and consolidated from two sub-facilities totaling $215 million to a
single facility totaling $165 (the "Senior Credit Facility"). The Senior Credit
Facility consists of a revolving credit facility in the amount of $100 million
and a term facility in the amount of $65 million. The revolving portion of the
Senior Credit Facility matures on May 30, 2004, and the term portion matures on
May 31, 2006. In conjunction with the restructuring of the Senior Credit
Facility, the Company wrote-off a pro-rata portion of its existing deferred
financing costs in the amount of $1.0 million, or $0.6 million net of income
taxes, which is included in the accompanying Condensed Consolidated Statement of
Operations as an extraordinary loss.
The Senior Credit Facility contains affirmative, negative and financial
covenants customary for this type of credit facility, including maintenance of
certain financial ratios. The Senior Credit Facility is collateralized by
substantially all the assets of the Company, except its real estate development
subsidiaries, which are not borrowers under the Senior Credit Facility
(collectively, the borrowing subsidiaries are referred to as the "Restricted
Subsidiaries"). The revolving facility is subject to an annual 30-day clean down
requirement to an outstanding balance of not more than $35 million, which clean
down period must include April 30 of each fiscal year.
The Senior Credit Facility contains restrictions on the payment of
dividends by the Company on its common stock. Those restrictions prohibit the
payment of dividends in excess of 50% of the Restricted Subsidiaries'
consolidated net income after April 25, 1999, and further prohibit the payment
of dividends under any circumstances when the effect of such payment would be to
cause the Restricted Subsidiaries' debt to EBITDA ratio (as defined within the
credit agreement) to exceed 4.0 to 1. Based upon these restrictions (as well as
additional restrictions discussed below), the Company does not expect to pay
cash dividends on its common stock, 10.5% Senior Preferred Stock or Series B
Senior Preferred Stock in the foreseeable future.
The maximum availability under the revolving facility will reduce over
the term of the Senior Credit Facility by certain prescribed amounts. The term
facility amortizes at an annual rate of approximately 1.0% of the principal
amount for the first four years with the remaining portion of the principal due
in two substantially equal installments in years five and six. The Senior Credit
Facility requires mandatory prepayment of the term facility and a mandatory
reduction in the availability under the revolving facility of an amount equal to
50% of the Restricted Subsidiaries' excess cash flows during any period in which
the ratio of the Restricted Subsidiaries' total senior debt to EBITDA exceeds
3.50 to 1. In no event, however, will such mandatory prepayments reduce the
revolving facility commitment below $74.8 million. Management does not presently
expect to generate excess cash flows, as defined in the Senior Credit Facility,
during fiscal 2000 or fiscal 2001.
The Senior Credit Facility also places a maximum level of non-real
estate capital expenditures for fiscal 2000 of $23.1 million (exclusive of
certain capital expenditures in connection with the sale of the Series B
Preferred Stock). Following fiscal 2000, annual resort capital expenditures
(exclusive of real estate capital expenditures) are capped at the lesser of (i)
$35 million or (ii) the total of the Restricted Subsidiaries' consolidated
EBITDA (as defined therein) for the four fiscal quarters ended in April of the
previous fiscal year less consolidated debt service for the same period. In
addition to the foregoing amounts, the Company is permitted to and expects to
make capital expenditures of up to $30 million for the purchase and construction
of a new gondola at its Heavenly resort in Lake Tahoe, Nevada, which the Company
currently plans to construct during the 2000 and 2001 fiscal years.
8. Series B Preferred Stock Transaction. Pursuant to a Preferred Stock
Subscription Agreement (the "Series B Agreement") dated July 9, 1999, the
Company sold 150,000 shares of its 8.5% Series B Convertible Participating
Preferred Stock ("Series B Preferred Stock") on August 9, 1999 to Oak Hill
Capital Partners, L.P. and certain related entities ("Oak Hill") for $150
million. The Company used approximately $129 million of the proceeds to reduce
indebtedness under its Senior Credit Facility, approximately $30 million of
which ultimately will be reborrowed and invested in the Company's principal real
estate development subsidiary, American Skiing Company Resort Properties, Inc.,
("Resort Properties"), $9 million of which had been reborrowed and invested in
Resort Properties as of October 24, 1999. The remainder of the proceeds were
used to (1) pay approximately $16 million in fees and expenses in connection
with the Series B Preferred Stock sale (approximately $13 million) and related
transactions (approximately $3 million), and (2) acquire from the Company's
principal shareholder certain strategic assets and to repay a demand note issued
by a subsidiary of the Company to the Company's principal shareholder, in the
aggregate amount of $5.4 million.
The Series B Preferred Stock is convertible into shares of the Company's
common stock at an initial conversion price of $5.25 per share of common stock.
The initial conversion price is subject to an antidilution adjustment. Assuming
all shares of the Series B Preferred Stock are converted into the Company's
common stock at the initial (and current) conversion price, Oak Hill would own
approximately 48.5% of the Company's outstanding common stock and Class A common
stock as of August 9, 1999. Oak Hill is entitled to vote its shares of Series B
Preferred Stock on matters (other than the election of Directors) as if its
shares were converted into the Company's common stock. In addition, Oak Hill as
the holder of Series B Preferred Stock has class voting rights to elect
Directors to the Company's Board of Directors. Furthermore, under the Series B
Agreement, Oak Hill and Mr. Otten have agreed to use best efforts and to vote
their shares in order to ensure that each of them is able to appoint up to four
Directors to the Board (depending on their shareholdings). Therefore, under the
Series B Agreement and the Company's certificate of incorporation, Oak Hill and
Mr. Otten together elect eight of the 11 members of the Company's Board.
Dividends on the Series B Preferred Stock are payable at the rate of 8.5%
per year. For the first five years, the Company may accrete and compound
dividends payable to the liquidation price instead of paying cash dividends, in
which case the dividend rate will increase to 9.5% after January 31, 2001, and
to 10.5% after January 31, 2002. The Series B Agreement requires dividends to be
paid in cash after July 31, 2004. The dividend rate will revert back to 8.5% at
the time the Company begins paying the dividend in cash. If the Company elects
to accrue dividends on the Series B Preferred Stock to the liquidation price for
the first five years, and thereafter pay all dividends in cash when due, the
Series B Preferred Stock would be convertible into 60.4% of the Company's common
stock after the fifth anniversary of its issuance. The Company is currently
accruing dividends on the Series B Preferred Stock at an effective rate of 9.7%,
with the assumption that dividends will not be paid in cash until the fifth
anniversary of the issuance.
Item 2
Management's Discussion and Analysis of Financial
Condition and Results of Operations
General
The following is management's discussion and analysis of financial
condition and results of operations for the three months ended October 24, 1999.
As you read the material below, we urge you to carefully consider our
Consolidated Financial Statements and related notes contained elsewhere in this
report and the audited financial statements and related notes contained in our
Form 10-K filed with the Securities and Exchange Commission on October 23, 1999.
The Oak Hill Transaction. On August 9, 1999, the Company consummated
the sale of 150,000 shares of its Series B Convertible Exchangeable Preferred
Stock (the "Series B Preferred Stock") to Oak Hill Capital Partners, L.P. and
certain related entities ("Oak Hill"). The Company realized gross proceeds of
$150 million on the Series B Preferred Stock sale. The Company used $128.6
million of the proceeds to reduce indebtedness under its Senior Credit Facility
(as described below), approximately $30 million of which ultimately will be
reborrowed and invested in the Company's principal real estate development
subsidiary, American Skiing Company Resort Properties, Inc., ("Resort
Properties"). As of November 22, 1999, $14 million has been reborrowed and
invested in Resort Properties. The remainder of the proceeds were used to (1)
pay approximately $16 million in fees and expenses in connection with the Series
B Preferred Stock sale (approximately $13 million) and related transactions
(approximately $3 million), and (2) acquire from the Company's principal
shareholder certain strategic assets and to repay a demand note issued by a
subsidiary of the Company to the Company's principal shareholder, in the
aggregate amount of $5.4 million. As a result of these transactions, management
believes that its current capital resources are sufficient both to fund
operations at its resorts and to complete those real estate projects which are
currently under construction. As more fully discussed below, the Company's
ability to commence and complete new real estate development projects will be
dependent upon the Company's ability to raise additional capital and Resort
Properties' ability to obtain additional non-recourse financing.
In connection with the Series B Preferred Stock sale, the Company
obtained consents (1) from lenders and creditors of the Company stating that the
Series B Preferred Stock sale would not constitute a "change of control" under
the relevant loan agreements, (2) from the holders of the 10.5% Senior Preferred
Stock of the Company approving the issuance of the Series B Preferred Stock and
the terms of such stock and (3) from noteholders under the Indenture relating to
the 12% Senior Subordinated Notes due 2006 of the Company's subsidiary, ASC East
(the "Indenture"), approving the merger of ASC East into the Company and certain
other amendments to the Indenture.
In connection with the Series B Preferred Stock sale, the Company
simplified its capital structure by merging its two principal subsidiaries, ASC
East and ASC West, with and into the Parent. In connection with the merger, the
Parent assumed all liabilities of ASC East and ASC West and became the primary
obligor under certain credit facilities and under the Indenture. In addition,
the then current subsidiaries of the Parent and ASC West, as well as ASC Utah,
also became additional guarantors under the Indenture. As a result of the
merger: (a) the Company's capital structure has been simplified, which is
expected to make it easier to raise capital in the future and administer the
operations of the Company; (b) the capital and assets of ASC East and its
subsidiaries are available to satisfy the obligations of ASC West and its
subsidiaries under the Company's Senior Credit Facility (described below); (c)
the Parent and its subsidiaries are now subject to the covenants and other
restrictions contained in the Indenture; and (d) ASC East is no longer required
to file annual reports and make other filings under the regulations of the
Securities Exchange Act of 1934.
As a result of the additional guarantee given by certain subsidiaries
of the Company, the noteholders under the Indenture will have priority over the
equity holders of the Company with respect to any claims made on the assets of
those subsidiaries until the obligations under the Indenture have been
satisfied.
Liquidity and Capital Resources
Short-Term. The Company's primary short-term liquidity needs are
funding seasonal working capital requirements, continuing and completing real
estate development projects presently under construction, funding its fiscal
2000 capital improvement program and servicing indebtedness. Cash requirements
for ski-related and real estate development activities are provided by separate
sources. The Company's primary sources of liquidity for ski-related working
capital and ski-related capital improvements are cash flow from operations of
its non-real estate subsidiaries and borrowings under the Senior Credit Facility
(as hereinafter defined). Real estate development and real estate working
capital is funded primarily through (i) construction financing facilities
established for major real estate development projects, (ii) the expected $30
million equity contribution made available from the proceeds of the Series B
Preferred Stock sale and (iii) through a $58 million term loan facility
established through Resort Properties (the "Resort Properties Term Facility").
These construction financing facilities and Resort Properties Term Facility
(collectively, the "Real Estate Facilities") are without recourse to the Company
and its resort operating subsidiaries. The Real Estate Facilities are
collateralized by significant real estate assets of Resort Properties and its
subsidiaries, including, without limitation, the assets and stock of Grand
Summit Resort Properties, Inc. ("GSRP"), the Company's primary hotel development
subsidiary. As of October 24, 1999, the book value of the total assets that
collateralized the Real Estate Facilities, and are included in the accompanying
consolidated balance sheet, were approximately $300.6 million.
Resort Liquidity. The Company established a senior credit facility on
November 12, 1997. On October 7, 1999, this senior credit facility was amended,
restated and consolidated from two sub-facilities totaling $215 million to a
single facility totaling $165 million ($46.0 million of which was available for
borrowings at November 22, 1999, which includes approximately $16 million the
Company intends to transfer to Resort Properties in fiscal 2000) (the "Senior
Credit Facility"). The Senior Credit Facility consists of a revolving credit
facility in the amount of $100 million and a term facility in the amount of $65
million. The revolving portion of the Senior Credit Facility matures on May 30,
2004, and the term portion matures on May 31, 2006.
The Senior Credit Facility contains affirmative, negative and financial
covenants customary for this type of credit facility, including maintenance of
certain financial ratios. The Senior Credit Facility is collateralized by
substantially all the assets of the Company, except its real estate development
subsidiaries (consisting of Resort Properties and its subsidiaries), which are
not borrowers under the Senior Credit Facility (collectively, the borrowing
subsidiaries are referred to as the "Restricted Subsidiaries"). The revolving
facility is subject to an annual 30-day clean down requirement to an outstanding
balance of not more than $35 million, which clean down period must include April
30 of each fiscal year.
The Senior Credit Facility contains restrictions on the payment of
dividends by the Company on its common stock. Those restrictions prohibit the
payment of dividends in excess of 50% of the Restricted Subsidiaries'
consolidated net income after April 25, 1999, and further prohibit the payment
of dividends under any circumstances when the effect of such payment would be to
cause the Restricted Subsidiaries' debt to EBITDA ratio (as defined within the
credit agreement) to exceed 4.0 to 1. Based upon these restrictions (as well as
additional restrictions discussed below), the Company does not expect that it
will be able to pay cash dividends on its common stock, 10.5% Senior Preferred
Stock or Series B Senior Preferred Stock in the foreseeable future.
The maximum availability under the revolving facility will reduce over
the term of the Senior Credit Facility by certain prescribed amounts. The term
facility amortizes at an annual rate of approximately 1.0% of the principal
amount for the first four years with the remaining portion of the principal due
in two substantially equal installments in years five and six. The Senior Credit
Facility requires mandatory prepayment of the term facility and a mandatory
reduction in the availability under the revolving facility of an amount equal to
50% of the Restricted Subsidiaries' excess cash flows during any period in which
the ratio of the Restricted Subsidiaries' total senior debt to EBITDA exceeds
3.50 to 1. In no event, however, will such mandatory prepayments reduce the
revolving facility commitment below $74.8 million. Management does not presently
expect to generate excess cash flows, as defined in the Senior Credit Facility,
during fiscal 2000 or fiscal 2001.
Based upon historical operations, management presently anticipates that
the Company will be able to meet the financial covenants of the Senior Credit
Facility. Failure to meet one or more of these covenants could result in an
event of default under the Senior Credit Facility. In the event that such
default were not waived by the lenders holding a majority of the debt under the
Senior Credit Facility, such default would also constitute defaults under one or
more of the Textron Facility, the Key Facility (each as hereinafter defined),
the Resort Properties Term Facility and the Indenture, the consequences of which
would likely be material and adverse to the Company.
The Senior Credit Facility also places a maximum level of non-real
estate capital expenditures for fiscal 2000 of $23.1 million (exclusive of
certain capital expenditures in connection with the sale of the Series B
Preferred Stock). Following fiscal 2000, annual resort capital expenditures
(exclusive of real estate capital expenditures) are capped at the lesser of (i)
$35 million or (ii) the total of the Restricted Subsidiaries' consolidated
EBITDA (as defined therein) for the four fiscal quarters ended in April of the
previous fiscal year less consolidated debt service for the same period. In
addition to the foregoing amounts, the Company is permitted to and expects to
make capital expenditures of up to $30 million for the purchase and construction
of a new gondola at its Heavenly resort in Lake Tahoe, Nevada, which the Company
currently plans to construct during the 2000 and 2001 fiscal years.
The Company intends to use borrowings under the Senior Credit Facility
for seasonal working capital needs, certain capital improvements and to build
retail and other inventories prior to the start of the 1999-2000 ski season. The
Company expects to maximize borrowings under the Senior Credit Facility sometime
between November and December of 1999. During this period, the Company
historically has had little, if any, borrowing availability under the Senior
Credit Facility. However, as a result of the sale of the Series B Preferred
Stock and the resulting paydown in the balance of the revolving portion of the
Senior Credit Facility, in Fiscal 2000 management expects that the Company will
have significant additional borrowing availability under the Senior Credit
Facility during this period.
The Company's liquidity is significantly affected by its high leverage.
As a result of its leveraged position, the Company will have significant cash
requirements to service interest and principal payments on its debt.
Consequently, cash availability for working capital needs, capital expenditures
and acquisitions is limited, outside of the availability under the Senior Credit
Facility. Furthermore, the Senior Credit Facility and the Indenture each contain
significant restrictions on the ability of the Company and its subsidiaries to
obtain additional sources of capital and may affect the Company's liquidity.
These restrictions include restrictions on the sale of assets, restrictions on
the incurrence of additional indebtedness and restrictions on the issuance of
preferred stock.
Late in fiscal 1999, the Company implemented a plan to sell certain
non-strategic assets in order to improve cash flow due to the effect of adverse
weather conditions many of the Company's resorts experienced in the second
quarter of fiscal 1999. As a result of these sales, the Company realized
proceeds of $6.8 million and $9.1 million in the fourth quarter of fiscal 1999
and the first quarter of fiscal 2000, respectively.
On October 6, 1999, the Parent merged with two of its subsidiaries, ASC
East, Inc. and ASC West, Inc. In connection with this merger, the Parent assumed
the obligations of ASC East, Inc. under the Indenture, and each of the material
subsidiaries of ASC West, Inc. granted guarantees to secure the obligations of
the Parent under the Indenture. Each of the material subsidiaries of ASC East,
Inc. had previously granted guarantees to secure the obligations under the
Indenture. By assuming the obligations of ASC East under the Indenture, the
Company removed a significant impediment to the free flow of cash among its
subsidiaries and allowed for the consolidation of the Senior Credit Facility.
The assumption also subjects the Parent and its subsidiaries, ASC Utah and the
subsidiaries of ASC West, Inc. to the restrictions on dividends, indebtedness,
and other covenants contained in the Indenture. Management believes that the
simplified capital structure, which resulted from the merger and the assumption
of the Indenture obligations, will benefit the Company as it pursues additional
financing or other capital sources.
Under the Indenture, the Company is prohibited from paying cash
dividends or making other distributions to its shareholders, except under
certain circumstances (which are not currently applicable and are not
anticipated to be applicable in the foreseeable future).
Real Estate Liquidity: Funding of working capital for Resort Properties
and its fiscal 2000 real estate development program is provided through (i) a
$30 million equity contribution from the proceeds of the Series B Preferred
Stock sale and (ii) a term loan facility between BankBoston and Resort
Properties in the maximum principal amount of $58 million (the "Resort
Properties Term Facility").
The Resort Properties Term Facility bears interest at a variable rate
equal to BankBoston's base rate plus 8.25%, or a current rate of 16.5% per annum
(payable monthly in arrears), and matures on June 30, 2001. As of November 22,
1999, $52.8 million was outstanding under the Resort Properties Term Facility.
The Resort Properties Term Facility is collateralized by security interests in,
and mortgages on, substantially all of Resort Properties' assets, which
primarily consist of undeveloped real property and the stock of its real estate
development subsidiaries (including GSRP). As of October 24, 1999, the book
value of the total assets that collateralized the Resort Properties Term
Facility, and are included in the accompanying consolidated balance sheet, was
approximately $300.6 million. The Resort Properties Term Facility is
non-recourse to the Company and its resort operating subsidiaries.
In conjunction with the Resort Properties Term Facility, Resort
Properties entered into a syndication letter with BankBoston (the "Syndication
Letter") pursuant to which BankBoston agreed to syndicate up to $43 million of
the Resort Properties Term Facility. Under the terms of the Syndication Letter,
one or more of the terms of the Resort Properties Term Facility (excepting
certain terms such as the maturity date and commitment fee) may be altered
depending on the requirements for syndication of the facility. However, no
alteration of the terms of the facility may occur without the consent of Resort
Properties. Although Resort Properties expects the terms of the Resort
Properties Term Facility to remain substantially similar to those discussed
above, one or more of such terms could be altered in order to syndicate the
facility, and such alterations could be material and adverse to the Company. As
of November 22, 1999, BankBoston was actively engaged in syndicating the Resort
Properties Term Facility. The Syndication Letter also provides that, in the
event that BankBoston is unable to syndicate at least $33 million of the Resort
Properties Term Facility, then BankBoston may at its option, require repayment
of the outstanding balance of the facility within 120 days of its request for
repayment by Resort Properties. If the syndication is unsuccessful and
BankBoston were to require repayment, there can be no assurance that the Company
could secure replacement financing for the Resort Properties Term Facility. The
failure to secure replacement financing on terms similar to those existing under
the Resort Properties Term Facility could result in a material adverse effect on
the liquidity of Resort Properties and its subsidiaries, including GSRP, and
could also result in a default under the Indenture and the Senior Credit
Facility.
The Company runs substantially all of its real estate development
through single purpose subsidiaries, each of which is a wholly owned subsidiary
of Resort Properties. In its fourth fiscal quarter of 1998, the Company
commenced construction on three new hotel projects (two at The Canyons in Utah
and one at Steamboat in Colorado). Two of these new hotel projects are Grand
Summit Hotels that are being constructed by GSRP. The Grand Summit Hotels at The
Canyons and Steamboat are being financed through a $110 million construction
loan facility among GSRP and various lenders, including TFC Textron Financial,
the syndication agent and administrative agent, which closed on September 25,
1998 (the "Textron Facility").
As of November 22, 1999, the amount outstanding under the Textron
Facility was $97.2 million. The Textron Facility matures on September 24, 2002
and bears interest at the rate of prime plus 2.5% per annum. The principal of
the Textron Facility is payable incrementally as quartershare sales are closed
based on a predetermined per unit amount, which approximates between 50% and 80%
of the net proceeds of each closing. The Textron Facility is collateralized by
mortgages against the project sites (including the completed Grand Summit Hotels
at Killington, Mt. Snow, Sunday River and Attitash Bear Peak), and is subject to
covenants, representations and warranties customary for this type of
construction facility. The Textron Facility is non-recourse to the Company and
its resort operating subsidiaries (although it is collateralized by substantial
assets of GSRP, $201.9 million as of October 24, 1999, which comprise
substantial assets of the Company). The Grand Summit Hotel at The Canyons is
expected to be opened during the Company's current fiscal quarter. Approximately
54% of the units in this hotel have been pre-sold and 80% of the proceeds of
those sales will be applied to pay down the Textron Facility. These amounts will
subsequently be available for reborrowing (up to the maximum outstanding amount
of $110 million) and used for the completion of the Grand Summit Hotel at
Steamboat.
The remaining hotel project commenced by the Company in 1998, the
Sundial Lodge project at The Canyons, is being financed through (i) a
construction loan facility between Canyons Resort Properties, Inc., (a wholly
owned subsidiary of Resort Properties) and KeyBank, N.A. (the "Key Facility")
and (ii) an $8 million intercompany loan from Resort Properties. The Key
Facility has a maximum principal amount of $29 million, bears interest at a rate
of prime plus 1/4% per annum (payable monthly in arrears), and matures on June
30, 2000. The Company had $17.2 million in advances outstanding under the Key
Facility as of November 22, 1999. The Sundial Lodge is expected to begin opening
during the Company's current fiscal quarter. This project is fully sold out and
sales proceeds will be applied to repay the Key Facility in full. Management
expects the full repayment to occur in the Company's second or third fiscal
quarter, dependent on the timing of all of the unit closings. The Key Facility
is collateralized by a mortgage and security interest in the Sundial Lodge
project, a $5.8 million payment guaranty of Resort Properties, and a full
completion guaranty of Resort Properties. The Key Facility is non-recourse to
the Company and its resort operating subsidiaries (although it is collateralized
by substantial assets of Resort Properties and its subsidiaries). As of October
24, 1999, the book value of the total assets that collateralized the Real Estate
Facilities, and are included in the accompanying consolidated balance sheet,
were approximately $300.6 million.
The Company's fiscal 2000 business plan anticipates the commencement of
several real estate projects in the Spring of 2000, including a Grand Summit
Hotel at Heavenly, a condominium hotel at The Canyons and townhomes at The
Canyons. The timing and extent of these projects are subject to local and state
permitting requirements which may be beyond the Company's control, as well as
market demand as evidenced by project pre-sales, the Company's cash flow
requirements and availability of external capital.
Long-Term. The Company's primary long-term liquidity needs are to fund
skiing related capital improvements at certain of its resorts and development of
its slope side real estate. The Company has invested over $145.5 million in
skiing related facilities in fiscal years 1998 and 1999 combined. As a result,
the Company expects its resort capital programs for the next several fiscal
years will be more limited in size. The Company's fiscal 2000 resort capital
program is estimated at approximately $23 million, plus such additional amounts
as are expended on the Heavenly Gondola project.
The Company's largest long-term capital needs relate to: (i) certain
resort capital expenditure projects (including the Heavenly gondola for
approximately $25-30 million), (ii) the Company's real estate development
program, and (iii) repayment of the Company's Mandatorily Redeemable 10.5%
Preferred Stock (discussed below). For the next two fiscal years, the Company
anticipates its annual maintenance capital needs to be approximately $12
million. There is a considerable degree of flexibility in the timing and, to a
lesser degree, scope of the Company's growth capital program. Although specific
capital expenditures can be deferred for extended periods, continued growth of
skiervisits, revenues and profitability will require continued capital
investment in on-mountain improvements.
The Company's practice is to finance on-mountain capital improvements
through resort cash flow and its Senior Credit Facility. The size and scope of
the capital improvement program will generally be determined annually depending
upon the strategic importance and expected financial return of certain projects,
future availability of cash flow from each season's resort operations and future
borrowing availability and covenant restrictions under the Senior Credit
Facility. The Senior Credit Facility places a maximum level of non-real estate
capital expenditures for fiscal 2001 and beyond at the lesser of (i) $35 million
or (ii) the total of (a) the Restricted Subsidiaries' consolidated EBITDA (as
defined therein) for the four fiscal quarters ended in April of the previous
fiscal year less (b) consolidated debt service for the same period. In addition
to the foregoing amounts, the Company is permitted to and expects to make
capital expenditures of up to $30 million for the purchase and construction of a
new gondola at its Heavenly resort in Lake Tahoe, Nevada, which the Company
currently plans to construct during the 2000 and 2001 fiscal years. Management
believes that these capital expenditure amounts will be sufficient to meet the
Company's needs for non-real estate capital improvements for the near future.
The Company's business plan anticipates the development of both Grand
Summit hotels and condominium hotels at several resorts, as well as resort
villages at The Canyons, Heavenly, Killington, Steamboat and Sunday River. The
timing and extent of these projects are subject to local and state permitting
requirements which may be beyond the Company's control, as well as to the
Company's cash flow requirements and availability of external capital.
Substantially all of the Company's real estate development is undertaken through
the Company's real estate development subsidiary, Resort Properties. Recourse on
indebtedness incurred to finance this real estate development is limited to
Resort Properties and/or its subsidiaries (including GSRP). Such indebtedness is
generally collateralized by the projects financed under the particular
indebtedness, which, in some cases, constitutes a significant portion of the
assets of the Company. As of October 24, 1999, the total assets that
collateralized the Real Estate Facilities, and are included in the accompanying
consolidated balance sheet, totaled approximately $300.6 million. Resort
Properties' seven existing development projects are currently being funded by
the Resort Properties Term Facility, the Textron Facility and the Key Facility.
The Company expects to undertake future real estate development
projects through special purpose subsidiaries with financing provided
principally on a non-recourse basis to the Company and its resort operating
subsidiaries. Although this financing is expected to be non-recourse to the
Company and its resort subsidiaries, it will likely be collateralized by
existing and future real estate projects of the Company that may constitute
significant assets of the Company. Required equity contributions for these
projects must be generated before those projects can be undertaken, and the
projects are subject to mandatory pre-sale requirements under the Resort
Properties Term Facility. Potential sources of equity contributions include
sales proceeds from existing real estate projects and assets, (to the extent not
applied to the repayment of indebtedness) and potential sales of equity or debt
interests in Resort Properties and/or its real estate development subsidiaries.
Financing commitments for future real estate development do not currently exist,
and no assurance can be given that they will be available on satisfactory terms.
The Company will be required to establish both equity sources and construction
facilities or other financing arrangements for these projects before undertaking
each development.
The Company issued $17.5 million of convertible preferred stock and
$17.5 million of convertible notes in July 1997 to fund development at The
Canyons. These securities were converted on November 12, 1997 into Mandatorily
Redeemable 10 1/2% Preferred Stock of the Company. The Mandatorily Redeemable 10
1/2% Preferred Stock is exchangeable at the option of the holder into shares of
the Company's common stock at a conversion price of $17.10 for each common
share. In the event that the Mandatorily Redeemable 10 1/2% Preferred Stock is
held to its maturity date of November 15, 2002, the Company will be required to
pay the holders the face value of $36.6 million plus dividends in arrears. So
long as the Mandatorily Redeemable 10 1/2% Preferred Stock remains outstanding,
the Company may not pay any cash dividends on its common stock or Series B
Preferred Stock unless accrued and unpaid dividends on the Mandatorily
Redeemable 10 1/2% Preferred Stock have been paid in cash on the most recent due
date. Because the Company has been accruing unpaid dividends on the Mandatorily
Redeemable 10 1/2% Preferred Stock, the Company is not presently able to pay
cash dividends on its common stock or Series B Preferred Stock and management
does not expect that the Company will have this ability in the near future.
<PAGE>
Changes in Results of Operations
First Quarter of Fiscal 2000 compared to First Quarter of Fiscal 1999.
Net loss available to shareholders was $28.0 million, or $0.92 per
share, for the first quarter of fiscal 2000 compared to $20.3 million, or $0.67
per share, for the first quarter of fiscal 1999, representing an increase of
$7.7 million, or 37.9%. The increase in the net loss is mainly the result of (i)
an increase in preferred stock dividends, slightly offset by a decrease in
interest expense, (ii) the write-off of certain deferred tax assets, (iii) an
increase in net operating losses from resort and real estate activities, (iv) an
extraordinary loss resulting from the restructuring of the Company's senior
credit facility, and (v) the cumulative effective of a change in accounting
principle relating to start-up costs at certain of the Company's resorts and
hotels. The net loss before extraordinary items and the cumulative effect of an
accounting change was $21.8 million, or $0.72 per share, for the first quarter
of fiscal 2000 compared to $19.2 million, or $0.67 per share, in the first
quarter of fiscal 1999, representing an increase of $2.6 million, or 13.5%.
Loss from operations increased $2.0 million, or 9.6%, from $20.9
million in the first quarter of fiscal 1999 to $22.9 million in the first
quarter of fiscal 2000. The majority of this increase is attributable to a net
loss from real estate operations in fiscal 2000 of $0.7 million (real estate
revenues of $2.6 million less real estate expenses of $3.3 million) compared to
a net gain in fiscal 1999 of $0.4 million (real estate revenues of $4.5 million
less real estate expenses of $4.1 million). A decrease in sales of quartershare
units at the Company's existing Grand Summit Hotels at its eastern resorts
accounts for $0.4 million of this decrease, and expenses related to the
construction of these existing hotels accounts for an additional $0.4 million of
the decrease. Sales of these units has decreased in the first fiscal quarter of
2000 when compared to the prior year, however, the overall sell-out of these
projects remains strong as both the Jordan Grand at Sunday River and the Grand
Summit at Killington are now over 70% sold-out, with the Grand Summits at
Attitash Bear Peak and Mount Snow over 50% sold-out. Also contributing to the
loss in real estate operations in the first quarter of fiscal 2000 was
approximately $1.3 million in general and administrative expenses related to the
on-going operations of the Company's real estate subsidiaries and its real
estate development activities. The amount of general and administrative expenses
is consistent with the amount recognized in the first quarter of fiscal 1999.
The net loss from resort operations (resort revenues less resort
expenses and marketing general and administrative expenses) increased $0.4
million from $18.6 million in the first quarter of fiscal 1999 to $19.0 million
in the first quarter of fiscal 2000. An increase in resort revenues of $0.5
million includes $1.6 million in net gains from the sale of non-strategic assets
in the first quarter of fiscal 2000. Excluding the net gains from the sale of
assets, resort revenues decreased in the first quarter of fiscal 2000 by $1.1
million when compared to fiscal 1999. This decrease is mainly attributable to
(i) lower golf and summer revenues due to reduced summer marketing programs,
(ii) lower retail revenues due to aggressive pricing to liquidate inventory, and
(iii) the loss of rental income from commercial space that the Company sold
during the third and fourth quarters of fiscal 1999. These decreases were
slightly offset by increases in food and beverage and lodging revenues mainly as
a result of improved hotel operations. Resort operating expenses increased by
$0.9 million in the first quarter of fiscal 2000 when compared to fiscal 1999,
due mainly to increased maintenance costs, food and beverage and lodging costs,
and retail costs of goods sold.
Also contributing to the increase in the loss from operations was a
$0.5 million increase in depreciation and amortization in the first quarter of
fiscal 2000 compared to the same quarter in fiscal 1999. This increase was due
mainly to amortization of (i) additional deferred financing costs incurred to
restructure the Company's senior credit facility and (ii) the consent payment
made to holders of the Company's Senior Subordinated Notes in connection with
the merger of ASC East into the Parent.
Interest expense decreased $0.9 million, or 10.1%, from $8.9 million in
the first quarter of fiscal 1999 to $8.0 million in the first quarter of fiscal
2000. This decrease is primarily attributable to the approximately $120 million
reduction in the Company's senior credit facility from the proceeds of the
Series B Preferred Stock sale offset slightly by an increase in interest expense
related to the Company's non-recourse real estate debt.
Benefit from income taxes decreased by $1.5 million, or 14.2%, from
$10.6 million (an effective rate of 35.5%) in the first quarter of fiscal 1999
to $9.1 million (an effective rate of 29.3%) in the first quarter of fiscal
2000. The decrease in the effective rate is due primarily to a $3.0 million
valuation allowance established in the first quarter of fiscal 2000 relating to
certain deferred tax assets for prior net operating losses. As a result of the
Oak Hill Transaction (see above), the realization of the tax benefit of certain
of the Company's net operating losses and other tax attributes is dependent upon
the occurrence of certain future events. It is the judgment of the Company that
a valuation allowance of $3.0 million against its deferred tax assets for net
operating losses and other tax attributes is appropriate because it is more
likely than not that the benefit of such losses and attributes will not be
realized. Based on facts known at this time, the Company expects to
substantially realize the benefit of the remainder of its net operating losses
and other tax attributes affected by the Oak Hill Transaction.
Extraordinary loss of $0.6 million (net of $0.4 million tax benefits)
in the first quarter of fiscal 2000 results from the pro-rata write-off of
certain existing deferred financing costs related to the Company's senior credit
facility. This write-off was due to the restructuring of the credit facility in
connection with the permanent reduction in the availability of the revolving
portion and the pay down of the term portion of the facility from the proceeds
of the Series B Preferred Stock sale.
Cumulative effect of a change in accounting principle of $0.7 million
(net of $0.4 million tax benefit) in the first quarter of fiscal 2000 results
from the write-off of certain capitalized start-up costs relating to the
Company's hotel and retail operations and the opening of the Canyons resort in
fiscal 1998. The accounting change was due to the Company's adoption of AICPA
Statement of Position 98-5, "Reporting on the Costs of Start-up Activities". SOP
98-5 requires the expensing of all start-up costs as incurred, rather than
capitalizing and subsequently amortizing such costs. Initial adoption of this
SOP should be reported as a cumulative effective of a change in accounting
principles. Current start-up costs are being expensed as incurred and are
reflected in their appropriate expense classifications
Accretion of discount and dividends accrued on mandatorily redeemable
preferred stock increased $3.7 million from $1.1 million for the three months
ended October 25, 1998 to $4.8 million for the three months ended October 24,
1999. This increase is primarily attributable to the additional accrual of
dividends on 150,000 shares of 8 1/2% Series B Preferred Stock issued to Oak
Hill Capital Partners, LP in the first quarter of fiscal 2000.
Changes in Financial Condition
First Quarter of Fiscal 2000 Compared to Fiscal Year End 1999
Cash and cash equivalents decreased $1.2 million, or 13.3%, from a
balance of $9.0 million at July 25, 1999 to a balance of $7.8 million at October
24, 1999. The decrease is primarily attributable to the Company's seasonal
working capital needs.
Restricted cash increased $2.0 million, 36.4%, from a balance of $5.5
million at July 25, 1999 to a balance of $7.5 million at October 24, 1999. The
increase is primarily due to cash deposits received on pre-sales of units at the
western resort real estate projects currently in the pre-sales phase.
Accounts receivable increased $2.1 million, or 32.3%, from a balance of
$6.5 million at July 25, 1999 to a balance of $8.6 million at October 24, 1999.
The increase is primarily attributable to an increase in receivables associated
with seasonal advance hotel bookings.
Prepaid expenses increased $1.2 million, or 24.5%, from a balance of
$5.3 million at July 25, 1999 to a balance of $6.6 million at October 24, 1999.
The increase is mainly attributable to sales commissions on pre-sold real estate
units at the Company's western resorts.
Property, plant and equipment, net decreased $2.7 million, from a
balance of $529.2 million at July 25, 1999 to a balance of $526.5 million at
October 24, 1999. The decrease is attributable to (i) the sale of certain
non-strategic assets, which had a total net book value of $7.3 million upon
disposition, and (ii) a reduced level of capital expenditures during the 2000
fiscal year, which did not keep pace with depreciation expense.
Real estate developed for resale increased $52.6 million, or 25.3%,
from a balance of $207.7 million at July 25, 1999 to a balance of $260.3 million
at October 24, 1999. The increase is primarily attributable to the development
of the Sundial Lodge project at The Canyons and Grand Summit Resort Hotel
projects at The Canyons and Steamboat, slightly offset by sales of the eastern
Grand Summit Hotel inventory.
Other assets decreased $0.9 million, or 4.9%, from a balance of $18.5
million at July 25, 1999 to a balance of $17.6 million at April 25 1999. The
decrease is primarily attributable to the redemption of a note receivable.
Current portion of long-term debt decreased $42.8 million, or 69.4%
from a balance of $61.6 million at July 25, 1999 to a balance of $18.8 million
at October 24, 1999. The decrease is primarily attributable to the net pay down
of the Company's Senior Credit Facility from the proceeds of the Series B
Preferred Stock sale.
Accounts payable and other current liabilities increased $5.0 million,
or 6.4%, from a balance of $78.0 million at July 25, 1999 to a balance of $83.0
million at October 24, 1999. The increase is attributable to the construction
projects at the Company's real estate subsidiaries and an increase in accrued
interest due to the timing of payments on capital leases for ski-related
equipment.
Deposits and deferred revenue increased $18.7 million, or 94.9%, from a
balance of $19.7 million at July 25, 1999 to a balance of $38.4 million at April
26, 1999. The change is attributable to i) an increase of $15.2 million relating
to deferred revenue associated with the Company's season pass sales and prepaid
ticket programs, ii) an increase of $4.5 million relating to deposits received
on lodging at all of the Company's resorts.
Long-term debt, excluding current portion decreased $27.2 million, or
8.7%, from a balance of $313.8 million at July 25, 1999 to a balance of $286.6
million at October 24, 1999. The increase is attributable to the net pay down of
the Company's Senior Credit Facility from the proceeds of its Series B Preferred
Stock sale.
Mandatorily redeemable 10 1/2% preferred stock increased $1.2 million,
or 2.7%, from a balance of $43.8 million at July 25, 1999 to a balance of $45.0
million at October 24, 1999. The increase is attributable to the accretion and
accrual of the dividends payable for the period.
Mandatorily redeemable 8 1/2% series B preferred stock increased $140.4
million due to the issuance of 150,000 shares of mandatorily redeemable
preferred stock to Oakhill Capital Partners, LP during the first quarter of
fiscal 2000.
Accumulated deficit increased $28.0 million from a deficit of $32.3
million at July 25,1999 to $60.3 million at October 24, 1999. The increase is
attributable to the Company's net loss for the period.
Year 2000 Disclosure
Background. The "Year 2000 Problem" is the result of many existing computer
programs and embedded chip technologies containing programming code in which
calendar year data is abbreviated by using only two digits rather than four to
refer to a year. As a result of this, some of these programs fail to operate or
may not properly recognize a year that begins with "20" instead of "19". This
may cause such software to recognize a date using "00" as the year 1900 rather
than the year 2000. Even systems and equipment that are not typically thought of
as computer-related often contain embedded hardware or software that may
improperly understand dates beginning with the year 2000. Inability of systems
to properly recognize the year 2000 could result in system failure or
miscalculations causing disruptions to operations, including temporary inability
to process transactions or engage in normal business activities.
The Company has developed a Year 2000 task force with representation throughout
the organization. The task force has developed a comprehensive strategy to
systematically evaluate and update systems as appropriate. In some cases, no
system changes are necessary or the changes have already been made. In all other
cases, modifications are planned to prepare the Company's systems to be Year
2000 compliant by December 15, 1999. The disclosure below addresses the
Company's Year 2000 Project.
Company's state of readiness. The Year 2000 Project is divided into three
initiatives: (i) Information Technology ("IT") Systems, (ii) Non-IT Systems and
(iii) related third party providers. The Company has identified the following
phases with actual or estimated dates of completion: 1) identify an inventory of
systems, (completed April 30, 1999), 2) gather certificates and warranties from
providers, (completed April 30, 1999), 3) determine required actions and
budgets, (completed April 30, 1999), 4) perform remediation and tests (completed
November 1, 1999) and 5) designing contingency and business continuation plans
for each Company location (plans are complete and implementation is underway.
Implementation is scheduled to be complete by December 15, 1999).
The following is a summary of the different phases and progress to date for each
initiative identified above:
IT Systems: The Company has continuously updated or replaced older technology
with more current technology. As the Company has acquired ski resorts, it
updated certain technology at these resorts. The Company's main IT systems
include an enterprise-wide client server financial system, an enterprise-wide
client server ticketing and direct to lift system, a mid-range enterprise-wide
payroll system, various point of sale and property management systems, upgraded
personal computers, wide area networking and local area networking. Phases 1
through 3 are complete. During phase 1 and 2, the Company determined that its
Sugarloaf and Sugarbush resorts had not yet converted to Year 2000 compliant
lodging systems. The Company has subsequently converted these two resorts to
Year 2000 compliant systems. The Company has developed contingency and business
contingency plans for its crucial IT systems and expects to have these
implemented at each Company location by December 15, 1999.
Non-IT Systems: Internal non-IT systems are comprised of faxes, copiers,
printers, postal systems, security systems, ski lifts, elevators and
telecommunication systems. Phases 1 through 5 are complete for all systems.
Related third party providers: The Company has identified its major related
third party providers as certain utility providers, employee benefits
administrators and supply vendors. Phases 1 through 5 are complete.
Actual and anticipated costs. The total cost associated with required
modifications to become Year 2000 compliant is not expected to be material to
the Company's financial position. The estimated total cost of the Year 2000
Project is approximately $275,000, substantially all of which had been expended
as of November 22, 1999. This estimate includes Information System conversions
for Year 2000 compliant lodging systems at Sugarloaf and Sugarbush. The Company
had planned to update these systems regardless of Year 2000 issues to
standardize systems within the Company's resorts. The anticipated costs related
to non-IT systems are deemed by management to be immaterial.
Risks. The failure to correct a material Year 2000 problem could result in
an interruption in, or a failure of, certain normal business activities or
operations. Such failures could materially and adversely affect the Company's
results of operations, liquidity and financial condition. Due to the general
uncertainty inherent in the Year 2000 problem, resulting in part from the
uncertainty of the Year 2000 readiness of third-party suppliers and customers,
the Company is unable to determine at this time whether the consequences of Year
2000 failures will have a material impact on the Company's results of
operations, liquidity or financial condition. The Year 2000 Project is expected
to significantly reduce the Company's level of uncertainty about the Year 2000
problem. The Company believes that, with the implementation of new business
systems and completion of the Year 2000 Project as scheduled, the possibility of
significant interruptions of normal operations should be reduced. Readers are
cautioned that forward-looking statements contained in the "Year 2000
Disclosures" should be read in conjunction with the Company's disclosures under
the heading "Forward-Looking Statements".
Contingency plans. The Company has completed the development of a
contingency plan related to Year 2000. The Company is actively engaged in
implementing the contingency plan to be prepared for any issues that may arise
on January 1, 2000.
Forward-Looking Statements
Certain information contained herein includes forward-looking
statements, the realization of which may be impacted by the factors discussed
below. The forward-looking statements are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995 (the "Act").
This report contains forward looking statements that are subject to risks and
uncertainties, including, but not limited to, uncertainty as to future financial
results; substantial leverage of the Company; the capital intensive nature of
development of the Company's ski resorts; rapid and substantial growth that
could place a significant strain on the Company's management, employees and
operations; uncertainties associated with fully syndicating the Resort
Properties Term Facility; uncertainties associated with obtaining additional
financing for future real estate projects and to undertake future capital
improvements; demand for and costs associated with real estate development;
changes in market conditions affecting the interval ownership industry;
regulation of marketing and sales of the Company's quartershare interests;
seasonality of resort revenues; fluctuations in operating results; dependence on
favorable weather conditions; the discretionary nature of consumers' spending
for skiing, destination vacations and resort real estate; regional and national
economic conditions; laws and regulations relating to the Company's land use,
development, environmental compliance and permitting obligations; termination,
renewal or extension terms of the Company's leases and United States Forest
Service permits; industry competition; the adequacy of water supply at the
Company's properties; the ability of the Company to make its information
technology assets and systems year 2000 compliant and the costs of any
modifications necessary in that regard; and other risks detailed from time to
time in the Company's filings with the Securities and Exchange Commission. These
risks could cause the Company's actual results for fiscal year 2000 and beyond
to differ materially from those expressed in any forward looking statements made
by, or on behalf of, the Company. The foregoing list of factors should not be
construed as exhaustive or as any admission regarding the adequacy of
disclosures made by the Company prior to the date hereof or the effectiveness of
said Act.
Item 3
Quantitative and Qualitative Disclosures about Market Risk
There have been no material changes in information relating to
market risk since the Company's disclosure included in Item 7A of Form 10-K as
filed with the Securities and Exchange Commission on October 23, 1999.
<PAGE>
Part II - Other Information
Item 2
Changes in Securities
On August 9, 1999, the Company issued to Oak Hill Capital Partners,
L.P. and other Oak Hill entities, all of which are institutional investors, a
total of 150,000 shares of 8.5% Series B Convertible Participating Preferred
Stock, par value $.01 per share, for $150 million. The Series B Preferred Stock
was sold pursuant to the exemption contained in Section 4(2) of the Securities
Act of 1933, as amended. In connection with the Series B Preferred Stock sale,
fees were paid to the Company's investment advisors Donaldson, Lufkin & Jenrette
Securities Corporation ($2.4 million), ING Barings LLC ($2.4 million) and Main
Street Advisors ($1.6 million), as well as to Oak Hill Investments, Inc. ($4.6
million). The Company also paid approximately $2 million in legal and other
professional fees in conjunction with the Series B Preferred Stock sale.
The Series B Preferred Stock is convertible into shares of the
Company's common stock ("Conversion Stock") at an initial conversion price of
$5.25 per share of common stock. The initial conversion price is subject to
anti-dilution adjustment. Assuming all shares of the Series B Preferred Stock
are converted into common stock of the Company at the initial (and current)
conversion price, Oak Hill would own approximately 48.5% of the Company's
outstanding common stock and Class A common stock as of August 9, 1999.
Item 4
Submission of Matters to a Vote of Security Holders
On October 7, 1999, the Company held a Special Meeting of its
shareholders to approve:
o the reincorporation of the Company in the State of Delaware, and
o the issuance of up to 46,124,575 shares of common stock upon the conversion of
the Company's Series B Preferred Stock.
The results of the Special Meeting were as follows:
Delaware Reincorporation:
Voting For Voting Against Abstaining Broker Non-Votes
Common Stock 5,089,822 3,216,624 30,279 0
Class A Common Stock 14,760,530 0 0 0
10.5% Preferred Stock 36,626(1) 0 0 0
---------- ------------ ---------- ----------------
Total All Classes 22,413,851(1) 3,216,624 30,279 0
Issuance of 46,124,575 shares of Common Stock:
Voting For Voting Against Abstaining Broker Non-Votes
Common Stock 7,997,698 300,623 38,404 0
Class A Common Stock 14,760,530 0 0 0
10.5% Preferred Stock 36,626(1) 0 0 0
------------ -------------- ------------ ----------------
Total All Classes 25,321,727(1) 300,623 38,404 0
(1) The 10.5% Preferred Stock votes together with Common Stock on an
"as-if-converted" basis. The 36,626 shares of 10.5% Preferred Stock, together
with accrued and unpaid dividends, have a voting right equal to 2,563,499 shares
of Common Stock. The results set forth in the "Total All Classes" rows are
calculated using this as-if-converted number.
Item 6
Exhibits and Reports on Form 8-K
a) Exhibits
Included herewith is the Financial Data Schedule submitted as Exhibit
27 in accordance with Item 601(c) of Regulation S-K. Also included are the
following material agreements entered into in the Company's first fiscal quarter
of 2000.
Exhibit No. Description
1. Master Disposition and Development Agreement by and between South
Tahoe Redevelopment Agency, The City of South Lake Tahoe and American
Skiing Company Resort Properties, Inc., Heavenly Resort Properties,
LLC, Heavenly Valley Limited Partnership, Trans-Sierra Investments,
Inc. and Cecil's Market, Inc. dated as of October 29, 1999.
2. The Canyons Resort Village Management Agreement dated as of
November 15, 1999.
3. Amended and Restated Development Agreement for The Canyons Specially
Planned Area Snyderville Basin, Summit County, Utah dated as of
November 15, 1999
b) Reports on Form 8-K
The Company filed a report on Form 8-K on October 13, 1999, reporting the
following:
(i) Merger with ASC East, Inc., and ASC West, Inc.
On October 6, 1999, American Skiing Company (NYSE: SKI) merged with two of
its wholly owned subsidiaries, ASC East, Inc. and ASC West, Inc. (the "East/West
Merger"). American Skiing Company was the surviving corporation in the East/West
merger. In conjunction with the East/West Merger, American Skiing Company
entered into a Fourth Supplemental Indenture dated as of October 6, 1999, with
respect to ASC East, Inc.'s $120 million 12% Senior Subordinated Notes (the "12%
Notes"). Under the terms of the Fourth Supplemental Indenture, American Skiing
Company, as successor by merger to ASC East, Inc., became the primary obligor
under the 12% Notes. Certain subsidiaries of American Skiing Company also joined
as guarantors of the 12% Notes.
(ii) Reincorporation in Delaware.
On October 7, 1999, the shareholders of American Skiing Company approved
the reincorporation of American Skiing Company in Delaware. Following that
approval, on October 12, 1999, American Skiing Company was merged with and into
its wholly owned subsidiary, ASC Delaware, Inc. (the "Delaware
Reincorporation"). The surviving entity, also named American Skiing Company, is
a Delaware corporation with a Board of Directors, shareholders and capital
structure identical to that of the former American Skiing Company, which was a
Maine corporation. Certain changes resulting from the reincorporation are
described more fully in the Company's Proxy Statement to Shareholders dated
September 8, 1999, on file with the Securities and Exchange Commission.
Following the Delaware Reincorporation, the Common Stock, par value $.01
per share of American Skiing Company, a Delaware corporation, is deemed to be
registered under Section 12(b) of the Securities Exchange Act of 1934 by virtue
of the operation of Rule 12g-3 of the Securities and Exchange Commission.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Date: December 6, 1999 /s/ Christopher E. Howard
- ------------------------------- -----------------------------
Christopher E. Howard
Executive Vice President
(Duly Authorized Officer)
Date: December 6, 1999 /s/ Mark J. Miller
- ------------------------------- -----------------------------
Mark J. Miller
Senior Vice President
Chief Financial Officer
(Principal Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-30-1999
<PERIOD-END> OCT-24-1999
<CASH> 7,827,000
<SECURITIES> 0
<RECEIVABLES> 8,573,000
<ALLOWANCES> 0
<INVENTORY> 11,977,000
<CURRENT-ASSETS> 48,700,000
<PP&E> 526,506,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 963,739,000
<CURRENT-LIABILITIES> 140,189,000
<BONDS> 127,125,000
185,384,000
0
<COMMON> 303,000
<OTHER-SE> 208,524,000
<TOTAL-LIABILITY-AND-EQUITY> 963,739,000
<SALES> 2,549,000
<TOTAL-REVENUES> 23,355,000
<CGS> 3,284,000
<TOTAL-COSTS> 29,015,000
<OTHER-EXPENSES> 10,753,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,966,000
<INCOME-PRETAX> (30,865,000)
<INCOME-TAX> (9,052,000)
<INCOME-CONTINUING> (21,813,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 621,000
<CHANGES> 704,000
<NET-INCOME> (27,954,000)
<EPS-BASIC> (0.92)
<EPS-DILUTED> (0.92)
</TABLE>
MASTER DISPOSITION AND DEVELOPMENT AGREEMENT
by and between
SOUTH TAHOE REDEVELOPMENT AGENCY
THE CITY OF SOUTH LAKE TAHOE
and
AMERICAN SKIING COMPANY RESORT PROPERTIES, INC.
HEAVENLY RESORT PROPERTIES, LLC
HEAVENLY VALLEY LIMITED PARTNERSHIP
TRANS-SIERRA INVESTMENTS, INC.
and
CECIL'S MARKET, INC.
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1.DEFINITIONS AND EXHIBITS............................................3
1.01 Definitions.....................................................3
1.02 Exhibits........................................................10
ARTICLE 2.CONDITIONS PRECEDENT TO AGENCY ISSUANCE OF BANS AND PARKING REVENUE
BONDS.................................................................11
2.01 Conditions Precedent to Agency Performance......................11
2.02 Issuance of BANS................................................13
2.03 Conditions Precedent to the Agency Issuance of Parking Garage
Revenue Bonds...................................................13
ARTICLE 3.CONDITIONS PRECEDENT TO AGENCY ACQUISITION..........................16
3.01 Conditions Precedent to Agency Acquisition......................16
ARTICLE 4.AGENCY ACQUISITION ACTIVITIES.......................................18
4.01 Agency Offers to Purchase.......................................18
4.02 Condemnation of Properties......................................18
4.03 Acknowledgement of Agency and City Discretion...................19
4.04 Eminent Domain Actions; Orders for Possession...................19
4.05 TAUs, Sewer Units and CFA.......................................19
ARTICLE 5.AGENCY CONDITIONS PRECEDENT TO DISPOSITION OF PROPERTY TO DEVELOPER.19
5.01 Conditions Precedent to Transfer of Phase 1 Development Site to
Developers......................................................19
5.02 Conditions Precedent to Transfer of Phase 2 Development Site to
Developers......................................................21
ARTICLE 6.DEVELOPERS' CONDITIONS PRECEDENT TO TRANSFER OF DEVELOPMENT SITE....23
6.01 Conditions Precedent to Transfer of Phase 1 Property to
Developers......................................................23
6.02 Conditions Precedent to Transfer of Phase 2 Development Site to
Developers......................................................26
ARTICLE 7.DISPOSITION OF PROPERTY.............................................29
7.01 Sale of Property................................................29
7.02 Consideration...................................................29
7.03 Orders of Possession............................................30
7.04 Closing Condition...............................................30
7.05 Closing Event...................................................30
7.06 Condition of Title..............................................30
7.07 Condition of the Property.......................................31
7.08 Real Estate Commissions.........................................31
7.09 Transfer of Units of Use........................................32
<PAGE>
ARTICLE 8.CONSTRUCTION........................................................32
8.01 Commencement of Construction....................................32
8.02 Completion of Construction......................................33
8.03 Construction Pursuant to Plans..................................33
8.04 Compliance with Applicable Law..................................33
8.05 Non-Discrimination During Construction; Equal Opportunity.......34
8.06 Preference for Local Labor......................................34
8.07 Supplies and Materials..........................................35
8.08 Certificate of Completion.......................................35
8.09 Progress Reports................................................35
8.10 Entry by the Agency.............................................35
8.11 Taxes...........................................................36
8.12 Insurance Requirements..........................................36
8.13 Hazardous Materials.............................................38
8.14 Non-Discrimination..............................................39
8.15 Mitigation Monitoring Plan......................................39
8.16 Use of Paul Kennedy Steakhouse Site.............................39
8.17 Right of Entry for Parking Garage Site..........................40
8.18 Public Art Plan.................................................40
ARTICLE 9.CONSTRUCTION OF THE PUBLIC IMPROVEMENTS.............................40
9.01 Construction of the Public Improvements.........................40
9.02 Progress Reports................................................41
9.03 Mitigation Monitoring Plan......................................41
9.04 Right to Access to Site.........................................41
9.05 Mello-Roos District.............................................41
9.06 Hazardous Materials.............................................43
ARTICLE 10.OBLIGATIONS WHICH CONTINUE THROUGH AND BEYOND THE COMPLETION OF
CONSTRUCTION.......................................................45
10.01 Maintenance....................................................45
10.02 Childcare Obligations..........................................46
10.03 Mechanics' Liens...............................................46
10.04 Developers to Indemnify Agency.................................46
10.05 Agency To Indemnify Developers.................................47
10.06 Non-Discrimination.............................................47
10.07 Mandatory Language in All Subsequent Deeds Leases and
Contracts......................................................47
10.08 Employment Opportunity.........................................48
10.09 Owner Participation............................................48
10.10 Lift Ticket Sales Within City..................................48
10.11 Marketing of Quarter Share Intervals...........................49
10.12 Compliance with Permits........................................49
10.13 EIR/EIS Reimbursement by Agency................................49
10.14 Parking Garage Operations......................................49
10.15 Continuing Disclosure..........................................49
<PAGE>
10.16 Ice Rink Operations............................................49
10.17 Retail Operations..............................................49
10.18 Agency Use of BANS Proceeds, Parking Garage Revenue Bond Proceeds
and Mello-Roos Bond Proceeds...................................49
ARTICLE 11.ASSIGNMENTS AND TRANSFERS..........................................49
11.01 Definitions....................................................49
11.02 Purpose of Restrictions on Transfer............................50
11.03 Prohibited Transfers...........................................51
11.04 Permitted Transfers............................................51
11.05 Effectuation of Certain Permitted Transfers....................51
11.06 Other Transfers with Agency Consent............................52
ARTICLE 12.REMEDIES...........................................................52
12.01 Application of Remedies........................................52
12.02 Consensual Termination.........................................52
12.03 Effect of Consensual Termination...............................53
12.04 Agency and City Performance....................................53
12.05 Developer Performance..........................................53
12.06 Right of Reverter..............................................55
12.07 Survival.......................................................56
12.08 Modification of Terms and Conditions and Extensions of Time....56
12.09 Scope of Termination Rights....................................57
ARTICLE 13.SECURITY FINANCING AND RIGHTS OF HOLDERS...........................57
13.01 No Encumbrances Except for Development Purposes................57
13.02 Holder Not Obligated to Construct..............................57
13.03 Notice of Default and Right to Cure............................58
13.04 Failure of Holder to Complete Improvements.....................58
13.05 Right of Agency to Cure........................................59
13.06 Right of Agency to Satisfy Other Liens.........................59
13.07 Additional Mortgagee Protections...............................59
ARTICLE 14.REPRESENTATIONS AND WARRANTIES.....................................59
14.01 Representations and Warranties of Developers...................60
14.02 Representations and Warranties of Agency.......................60
ARTICLE 15.GENERAL PROVISIONS.................................................61
15.01 Notices Demands and Communications.............................61
15.02 Non-Liability of Officials Employees and Agents................63
15.03 Time of the Essence............................................63
15.04 Inspection of Books and Records................................63
15.05 Title of Parts and Sections....................................63
15.06 Applicable Law.................................................63
15.07 Severability...................................................63
15.08 Legal Actions..................................................63
<PAGE>
15.09 Binding Upon Successors; Covenants to Run with Land............63
15.10 Parties Not Co-Venturers.......................................63
15.11 Provisions Not Merged With Grant Deed..........................63
15.12 Entire Understanding of the Parties............................64
15.13 Approvals......................................................64
15.14 Amendments.....................................................64
15.15 Force Majeure..................................................64
15.16 Estoppel Certificates..........................................64
15.17 Multiple Originals Counterparts................................64
Exhibit A.........Financial Plan
Exhibit B.........Gondola Right-of-Way Legal Description
Exhibit C.........Draft Tentative Subdivision Map
Exhibit D.........Project Executive Summary
Exhibit E.........Scope of Development
Exhibit F.........Site Plan
Exhibit G.........Schedule of Performance
Exhibit H.........Form of Grant Deed
Exhibit I.........Environmental Assessment Reports and Natural Hazard Disclosure
Exhibit J.........Motel Room Retirement Schedule
Exhibit K.........Mello-Roos Rate and Method
Exhibit L.........Sources and Uses CFA
<PAGE>
MASTER DISPOSITION AND DEVELOPMENT AGREEMENT
This Master Disposition and Development Agreement is entered into as of
this _____ day of _________________________ 1999, by and among the South Tahoe
Redevelopment Agency, a public body, corporate and politic ("Agency"), the City
of South Lake Tahoe, a municipal corporation ("City") and American Skiing
Company Resort Properties, Inc., a Maine corporation ("ASCRP"), Heavenly Resort
Properties, LLC, a Nevada limited liability company ("Heavenly Resort
Properties"), Heavenly Valley, Limited Partnership, a Delaware limited
partnership ("Heavenly Valley"), Trans-Sierra Investments, a Nevada Corporation
("TSI"), and Cecil's Market, Inc., a California corporation ("Cecil's Market"),
(collectively, ASCRP, Heavenly Resort Properties, Heavenly Valley, TSI and
Cecil's Market, Inc. shall be referred to as the "Developers").
RECITALS
(a) All initially capitalized terms used and not defined in this Agreement
shall have the meaning ascribed to them in Article 1.
(b) The Agency is responsible for the implementation of the Redevelopment
Plan for the South Lake Tahoe Redevelopment Project No. 1 adopted by
the City Council on June 28, 1988 pursuant to ordinance number 746, as
amended by ordinance number 854 adopted by the City Council on December
6, 1994 and as further amended by ordinance number 905 adopted by the
City Council on July 20, 1999.
(c) The Redevelopment Plan calls for the development of visitor serving
facilities on the Development Site, including the development of
certain infrastructure improvements necessary for the development of
the Development Site.
(d) The Agency and the Developers have entered into a Memorandum of
Understanding dated November, 1991 whereby the Agency and the
Developers agreed in good faith to negotiate the terms and conditions
of Disposition and Development Agreement providing for the development
of the Development Site in a manner consistent with the Redevelopment
Plan.
(e) The Developers and the Agency have proposed the development on the
Development Site of the Project. The Project will be developed in two
phases in accordance with this Agreement. The portions of Phase 1 to be
developed by the Developers will consist of the Grand Summit Hotel and
the Grand Summit Resort Hotel Annex to be developed by Heavenly Resort
Properties; the Gondola and Gondola Park to be developed by Heavenly
Valley, a public ice rink to be developed by TSI, and a public parking
structure, the Park Avenue detention basin, the improvement of Van
Sickle Street to a public street, the realignment of Park Avenue
including the relocation of all utilities and the construction of
streetscape therein, and the construction of a right turn lane between
Pioneer Trail and Park Avenue all of which are to be developed by the
Agency and the City. Phase 2 will consist of the development of a
quarter-share condominium hotel resort development at the Lake Tahoe
Inn site to be developed by ASCRP, Cecil's Market to be developed by
Cecil's Market, Inc. and the construction of the Intermodal Transit
Facility, and appropriate streetscape all of which will be developed by
the Agency and the City. As part of the Grand Summit Hotel, certain
visitor serving amenities will be developed including a cinema and
retail space. The Agency has received approval from the California
<PAGE>
Transportation Commission for the receipt of Proposition 116 funds for
the development of the Intermodal Transit Center.
(f) The City of South Lake Tahoe City Council has certified the EIR/EIS for
the Project on June 25, 1996 and issued Special Use Permit NO. 96-49.
(g) The Tahoe Regional Planning Agency certified the EIR/EIS as complete
and adequate and issued its permit for the Project.
(h) Tahoe Regional Planning Agency has prepared an Environmental Assessment
for the Gondola, which Environmental Assessment has been accepted by
TRPA and TRPA has issued its permit for the Gondola.
(i) The City and the Agency have prepared an Addendum to the EIR/EIS to
reflect insubstantial changes to the Project since certification of the
EIR/EIS. The EIR/EIS with the Addendum have served as the Agency's
environmental documentation pursuant to the California Environmental
Quality Act ("CEQA") for consideration and approval of this Agreement
and the development of the Project contemplated herein. The physical
development contemplated by this Agreement is within the scope of the
program evaluated in the EIR/EIS and none of the events requiring a
subsequent or supplemental EIR pursuant to CEQA have occurred with
respect to the EIR/EIS and the Project contemplated by this Agreement.
(j) The Agency selected the Developers to develop the Project based on the
Developers' experience and qualifications and in accordance with the
Agency Rule for Owner Participation. The Agency has determined that the
Developers have the necessary experience, skill and ability to carry
out the commitments contained in this Agreement.
(k) Heavenly Resort Properties has applied to the California Department of
Real Estate for a preliminary public report approving acceptance of
reservations to purchase quarter-share interest in the Grand Summit
Hotel, and pursuant to this preliminary public report, Heavenly Resort
Properties has begun accepting deposits for reservations to purchase
quarter-share interests in the Grand Summit Hotel. Heavenly Resort
Properties acknowledges that the acceptance of reservations to purchase
in the Grand Summit Hotel is being done solely by Heavenly Resort
Properties and the Agency has not approved or consented to the presale
of units in the Grand Summit Hotel and the presale of units in the
Grand Summit Hotel shall in no way obligate the Agency to acquire any
property required by the Developers for the development of the Grand
Summit Hotel.
NOW, THEREFORE, in consideration of the covenants and conditions
contained herein, the Agency and the Developers hereby agree as follows:
<PAGE>
ARTICLE 1. DEFINITIONS AND EXHIBITS
Definitions. When used in this Agreement, the following terms shall
have the meanings set forth below:
" Agency" means the South Tahoe Redevelopment Agency, a public body,
corporate and politic.
"Agreement" means this Master Disposition and Development Agreement.
(a)"Approved Plans" means the approved elevations, plans and sections
of the project, dated September 15, 1996, as amended from time to time.
(d) "ASC Affiliates" means American Skiing Company, a _______________
Corporation and any affiliate or subsidiary of American Skiing Company that is
now or at some time in the future becomes a guarantor of those certain Series A
and Series B 12% Senior Subordinated Notes Due 2006 issued by American Skiing
Company.
(b)"Association" means that certain Quarter Ownership owners
association to be formed with respect to the Grand Summit Hotel component of the
Park Avenue Project.
"Bankruptcy/Dissolution Event" means any of the following events:
(1) Any Developer shall (i) apply for or consent to the appointment of,
or the taking of possession by, a receiver, custodian, trustee or liquidator of
the Developer or of all or a substantial part of the property of the Developer,
(ii) commence a voluntary case under the Bankruptcy Code (as now or hereafter in
effect), or (iii) file a petition with respect to itself seeking to take
advantage of any other law relating to bankruptcy, insolvency, reorganization,
winding-up or composition or adjustment of debts;
(2) A proceeding or case shall be commenced without the application or
consent of the Developers as the case may be, in any court of competent
jurisdiction, seeking the liquidation, reorganization, dissolution, winding-up
or the composition or adjustment of debts of the Developer, (ii) the appointment
of a trustee, receiver, custodian or liquidator of the Developer or of all or
any substantial part of the assets of the Developer, or (iii) similar relief in
respect of the Developer under any law relating to bankruptcy, insolvency,
reorganization, winding-up or composition or adjustment of debts; provided,
however, that it shall not be a Bankruptcy/Dissolution Event under this
subparagraph if the case or proceeding is dismissed by an order of a court of
competent jurisdiction filed within 60 days of the commencement of the case or
proceeding; provided further that it shall not be a Bankruptcy/Dissolution Event
under this subparagraph if the appointment of a trustee, receiver, custodian or
liquidator shall be vacated by the filing of an order of a court of competent
jurisdiction no later than 60 days after such appointment.
<PAGE>
For the purposes of this Agreement, a Bankruptcy/Dissolution Event
shall be deemed dismissed only if (i) the petition is dismissed by order of a
court of competent jurisdiction and no further rights exist from such order, and
(ii) the Developer or Developers, as the case may be, notifies the Agency that
such a dismissal has occurred.
(g) "BANS" means those certain Series A Bond Anticipation Notes
described in the financial plan to be issued by STJPFA, the proceeds of which
are to be used in whole or in part to finance certain Phase 1 and Phase 2
Development site acquisition costs, and the Phase 1 and Phase 2 Public
Improvements.
(h) "BANS Proceeds" means the proceeds (net of closing costs and fees
and amounts required to fund a reserve and a capitalized interest account) from
the sale of the BANS.
(i) "CEQA" means the California Environmental Quality Act
(j) "CFA" means square footage of improvements previously used as
commercial real estate which is allocated to the Project and new square footage
allocated to the Project by the Community Plan and the Special Projects
allocation awarded by TRPA pursuant to Chapter 33 of TRPA's Code of Ordinances
and commercial square footage transferred to the Project by TSI.
(k) "City" means the City of South Lake Tahoe, a municipal corporation.
(l)"Close of Escrow" is the date Agency conveys the land acquired by
Agency to the Developers for each phase of the Project.
(m)"Community Plan" means that certain Stateline/Ski Run Community Plan
adopted by TRPA on March 23, 1994, and by the City on May 3, 1994.
(n) "Developers" means each of American Skiing Company Resort
Properties, a Maine Corporation, Heavenly Resort Properties, LLC, a Nevada
limited liability company, Heavenly Valley Limited Partnership, a Delaware
limited partnership, Trans-Sierra Investments, a Nevada corporation, and Cecil's
Market Inc., a California corporation.
(o) "Development Site" means the 17 acres bounded by Embassy Suites
Hotel to the north, Van Sickle Road to the east, Park Avenue to the south, and
Highway 50 to the west.
(p) "Draft Tentative Subdivision Plan" means that August 19, 1999,
preliminary subdivision plan prepared by Turner and Associates, designating the
following preliminary parcels:
Project Component Parcel No.
Cecil's Market 1
Intermodal Transit Center 2, 12
<PAGE>
Lake Tahoe Inn 4
Grand Summit Hotel 5
Ice Rink 6
Cinema 7
Public Parking Structure 10
Grand Summit Annex 8, 9
Public Circulation Parcels 3, 12
Gondola Park 13
Cresent V 14
The Draft Tentative Subdivision Map will be amended to provide that
Parcel No. 4 will extend underground under Parcel 2 and that Parcel 2 will only
be a surface parcel, and to provide that the loading dock area now included in
Parcel 10 will be included in Parcel 9.
(q) "Drainage Basin Property" means that property upon which the Agency
intends to construct, or cause to be constructed, the Drainage Basins.
(r) "Drainage Basins" means those certain drainage basins to be
constructed adjacent to Park Avenue, upon land currently occupied by the
Stateline Lodge, Park Avenue Motel, La Bella Motel, Meadowood Lodge and a
residential four-plex.
(s) "EIR/EIS" means that certain EIR/EIS prepared for the Project and
certified by the City on June 25, 1996, and approved by the TRPA on June 26,
1996
(t) "Escrow" means the escrow to be established with the Escrow Holder
for the conveyance of the Phase 1 and Phase 2 Development Sites to the
Developers.
(u) "Escrow Holder" means First American Title Company.
(v) "Excess Revenues" means any TOT or tax increment revenues in excess
of those projected in the Financial Plan which are received by Agency from the
Project and which the Agency does not require to make debt service payments on
any bonds or BANS issued by the Agency in accordance with the Agreement or prior
to the date of this Agreement; and is not required to fund the Agency's
obligations pursuant to this Agreement, all as further described in the
Financial Plan.
(w) "Final Construction Plans" means those drawings and other documents
that fix and describe the size and character of the project as to the
architectural, structural, mechanical and electrical systems, materials and
interior and exterior finishes.
(x) "Financial Plan" means the Financial Plan attached hereto as
Exhibit A.
(y) "General Contractor" means the general contractor or general
contractors selected by the Developers to construct the Project.
(z) "Gondola Right-of-Way" means a sixty-foot right-of-way commencing
at the Gondola base station and terminating approximately 13,500 feet to the
southeast, as generally described in Exhibit B, and shall include any easements
<PAGE>
necessary for access to the gondola and rights of entry or temporary
construction easements necessary to facilitate the construction of the Gondola.
(aa) "Grand Summit Annex" means that portion of the Grant Summit Resort
Hotel and commercial space adjacent to the Parking Garage, including 38,000
square feet of CFA as more particularly described in the Approved Plans.
"Grand Summit Hotel" means the quarter ownership hotel to be
constructed by Heavenly Resort Properties. The Grand Summit Hotel site was
previously known as the Park Plaza Resort. The Grand Summit Hotel site includes
approximately 72,000 square feet of CFA.
(cc) "Holder" means the holder of any mortgage, deed of trust or other
security instrument approved by the Agency pursuant to Section 2.01(f).
(dd) "Intermodal Transit Facility" means the 4,610 square foot transit
facility to be developed by the Agency using Proposition 116 funds.
(ee) "Lahontan" means the California Regional Water Quality Control
BoardLahontan Region.
(ff) "Lake Tahoe Inn Site" means the property located at 4104 Lake
Tahoe Boulevard, South Lake Tahoe, California. -------------------
(gg) "Land Coverage Square Footage" means impervious coverage of land
as verified by TRPA.
(hh) "Lock-Off Unit" means that portion of a Quarter Ownership Unit
comprising a 1-bedroom/1-bathroom configuration with separate entry directly
from the interior corridor and with one connecting door to the primary unit
portion of a Quarter Ownership Unit.
(ii) "Mello-Roos Bond Proceeds" means the proceeds from the sale of the
Mello-Roos Bonds (net of closing costs and fees and amounts required to fund a
reserve and a capitalized interest account) which are to be sold as contemplated
under the Financial Plan and the Mello-Roos Rate and Method.
(jj) "Mello-Roos Bonds" means those bonds to be issued by the Agency to
be supported by the Mello-Roos Special Tax as set forth in the Financial Plan
and the Mello-Roos Rate and Method.
(kk) "Mello-Roos Special Tax" means an annual Mello-Roos special tax
which property owners within the Project shall be obligated to pay on the terms
and for the uses set forth in the Financial Plan and the Mello-Roos Rate and
Method.
<PAGE>
(ll) "Motel Room Retirement Schedule" means the schedule of retirement
of TAUs, residential units and sewer units to be transferred in each Phase of
the Development as property is acquired by the Agency as set forth in Exhibit J.
(mm) "Parcel Map" means that certain parcel map to be prepared by the
Developers and recorded in the official records of El Dorado County and which,
upon recordation, among other things will merge and reconfigure the Development
Site.
(nn) "Parking Garage" means the 521 space parking garage to be
constructed pursuant to Section 2.03 by the Agency or the Developers as part of
Phase 1.
(oo) "Parking Garage Revenue Bonds" means the revenue bonds to be
issued by or caused to be issued by the Agency in an amount sufficient to pay
the costs to construct the Parking Garage.
(pp) "Parking Garage Revenue Bond Proceeds" means the proceeds of the
Parking Garage Revenue Bonds (net of closing costs and fees and amounts required
to fund a reserve and a capitalized interest account).
(qq) "Parking Management Agreement" means the agreement to be entered
into by and among the Agency, the City, ASCRP, Heavenly Resort Properties,
Heavenly Valley, TSI and Tahoe Crescent Partner governing the management and
operations of parking in and around the Development Site. The Parking Management
Agreement will govern management and maintenance of the parking facilities,
including restrictions on parking, if any.
(rr) "Paul Kennedy Steakhouse Site" means that certain property
located at 4118 Lake Tahoe Boulevard, South Lake Tahoe, California.
(ss) "Permit Conditions" means those certain conditions to the approval
of the Project set forth in the Use Permit and the Project Permit.
(tt) "Phase" means a certain phase of development of the Project (which
is currently contemplated to be developed in two phases).
(uu)"Phase 1" means the Phase 1 Public Improvements, the Parking
Garage, construction of the Gondola and Gondola park, the Grand Summit Hotel,
including retail space, and the Grand Summit Annex, including the multi-plex
cinema and the ice rink.
(vv) "Phase 1 Development Site" means the land to be assembled by
Agency and conveyed to Developers pursuant to Section 7.01 for construction of
the Phase 1 Project components as indicated in Exhibit J.
(ww) "Phase 1 Public Improvements" means the portions of the Project to
be constructed by the Agency and the City as part of Phase 1, which include the
realignment of Park Avenue and the relocation of utilities located under Park
<PAGE>
Avenue, the construction of a right turn lane between Pioneer Trail and Park
Avenue, the reconstruction of Van Sickle Avenue, the Drainage Basins,
improvements to Fern Avenue to create a cul-de-sac, and appropriate streetscape
improvements to serve Phase 1.
(xx) "Phase 2" means the Project elements to be constructed subsequent
to the construction of Phase 1. These components consist of the Phase 2 Public
Improvements, Cecil's Market, and the Lake Tahoe Inn.
(yy) "Phase 2 Development Site" means the land to be assembled by
Agency and conveyed to Developers pursuant to Section 7.01 for construction of
the Phase 2 Project components as indicated in Exhibit J.
(zz) "Phase 2 Public Improvements" means the portions of the Project to
be constructed by the Agency and the City as part of Phase 2, which include the
Intermodal Transit Center, the SEZ Restoration and Transit Lane, and appropriate
streetscape improvements.
(aaa) "Plans and Specifications" means all plans and specifications for
the Project submitted by the Developers and approved by the City and/or TRPA, as
applicable.
(bbb) "Plaza Maintenance Agreement" means the agreement to be entered
into by and among the Agency, the City, TSI, ASCRP, Heavenly Resort Properties
and Heavenly Valley, Cecil's Market, Inc., governing the operation, maintenance,
security, and uses, including the type of vendors allowed in the public plazas
located on the Development Site.
(ccc) "Project" means that certain project to be developed as generally
described in the Executive Summary attached hereto as Exhibit D.
(ddd) "Project Documents" means the TRPA Code of Ordinances (including,
but not limited to, Amended Chapter 20 and Amended Chapter 22 thereof), the
EIR/EIS, the Community Plan, the 1996 EIR/EIS certified for the Project, the
Project Permit, the Use Permit and any other document affecting the development
of the Project which contains conditions to be fulfilled by the Developers, the
Agency or the City prior to the construction, occupancy or operation of the
Project imposed by the City, TRPA, Lahontan, STPUD, or other governmental
agency.
(eee) "Project Permit" means that certain Permit for the Project
granted by TRPA in November, 1996, and reissued on August 25, 1999.
(ffff) "Public Improvements" means, collectively, the Phase 1 Public
Improvements and the Phase 2 Public Improvements.
(gggg) "Quarter Owners" means the owners of the Quarter Ownership
Units.
(hhhh) "Quarter Ownership Unit" means an undivided one-quarter
ownership interest in a residential condominium unit within the Grand Summit
Hotel and/or the Lake Tahoe Inn Site.
<PAGE>
(iii) "Reasonable Discretion" means the discretion of the Developers or
the Agency exercised in good faith utilizing those standards which would be
applied by the Developers or the Agency using prudent business practices under a
same or similar circumstance.
(jjj) "Redevelopment Plan Area" means the linear district stretching
along Lake Tahoe Boulevard between Ski Run Boulevard and the California/Nevada
state line in the City of South Lake Tahoe, and more particularly described in
Figure 1 of the Redevelopment Plan.
(kkk) "Regional Plan" means the TRPA Regional Plan for the Lake Tahoe
Basin (which consists of (i) The Goals and Policies (1986); (ii) The Code of
Ordinances (1987); (iii) The Plan Area Statements (1987); and (iv) The Revised
Environmental Thresholds (1991)).
(lll) "Residential Units" means those residential units which are to be
transferred to the Developers in place of TAUs under the terms and conditions of
this Agreement.
(mmm) "Scope of Development" means the list of materials for and colors
of the exterior finishes (as referenced on the color board contained in the
Scope of Development) of the Project (which are consistent with the Approved
Plans), which list has been accepted and approved by the Agency and the City. A
copy of such list is attached hereto as Exhibit E.
(nnn) "Schedule of Performance" means the schedule for the performance
by the parties of the actions required to take place pursuant to this Agreement
attached as Exhibit G.
(ooo) "Sewer Units" means the sewer units to be acquired by the Agency
as part of the acquisition of the Development Site and the Drainage Basin sites
and transferred to the Developers.
(ppp) "Site Plan" means the site plan for the Project, a copy of which
is attached hereto as Exhibit F.
(qqq) "Split Use" means the use of any multi-bedroom unit in the
Project Area as two or more separate units with two or more separate keys
issued.
(rrr) "State" means the State of California.
(sss) "STJPFA" means the South Tahoe Joint Powers Financing Authority.
(ttt) "STPUD" means the South Tahoe Public Utility District.
(uuu) "Tahoe Crescent Partners" means the Tahoe Crescent Partners
Limited Partnership, beneficial owner of the 17-acre Crescent V Shopping Center
site, a component of the Project. Tahoe Crescent Partners is not a party to this
Master Disposition and Development Agreement.
<PAGE>
(vvv) "TAU" means Tourist Accommodation Units which must be retired by
the Agency in accordance with terms and conditions of this Agreement and the
Project Documents.
(www) "TCP Parcel" means the 17-acre parcel of land the Crescent V
Shopping Center is located upon.
(xxx) "TOT" means the City's Transient Occupancy Tax, which, for the
privilege of occupancy in any transient lodging facility within the City, each
transient is subject to and which consists of twelve percent (12%) of rent
charged on all newly constructed visitor accommodations within any redevelopment
project area and those existing properties within any redevelopment project area
which undergo substantial renovation, or ten percent (10%) of the rent charged
on all other transient lodging facilities within the City.
(yyy) "TRPA" means the Tahoe Regional Planning Agency.
(zzz) "TRPA Code of Ordinances" means the Tahoe Regional Planning
Agency Code of Ordinances (which is a component of the Regional Plan).
(aaaa) "TRPA Governing Board" means the Governing Board of the TRPA.
(bbbb) "Use Permit" means that certain Use Permit of the Project
previously issued by the City, SU 96-49.
Any term not defined in the body of this Agreement shall have the
meaning set forth in the Financial Plan.
Exhibits. The following exhibits are attached to and incorporated into
this Agreement:
Exhibit A Financial Plan
Exhibit B Gondola Right-of-Way Description
Exhibit C Draft Tentative Subdivision Map
Exhibit D Project Executive Summary
Exhibit E Scope of Development
Exhibit F Site Plan
Exhibit G Schedule of Performance
Exhibit H Form of Grant Deed
Exhibit I Environmental Assessment Reports
and Natural Hazard Disclosure
Exhibit J Motel Room Retirement Schedule
Exhibit K Mello-Roos Rate and Method
Exhibit L Sources and Uses of Commercial Floor Area
<PAGE>
ARTICLE 2. CONDITIONS PRECEDENT TO AGENCY ISSUANCE
OF BANS AND PARKING REVENUE BONDS
2.01 Conditions Precedent to Agency Performance. As conditions
precedent to the Agency's obligation to cause the issuance of the BANS, the
conditions set forth in this Section 2.01 must first be met or waived by the
Agency by the times specified in the Schedule of Performance or such other date
as may be agreed upon by the Parties.
(a) No Default. There exists no Developer Event of Default as defined
in Section 12.05.
(b) Letter of Credit. ASCRP shall cause to be delivered a letter of
credit at least five days prior to the sale of the BANS in a form and in an
amount of Five Million Dollars ($5,000,000) meeting the requirements set forth
below, or such other form of security satisfactory to the Agency in its sole
discretion.
The letter of credit must meet the following minimum requirements:
(1) The letter of credit shall be from a nationally recognized bank,
savings and loan association, investment bank, retirement fund, insurance
company, or other institutional lender with long-term debt rating of A or better
from Standard and Poors.
(2) The letter of credit shall be irrevocable.
(3) The letter of credit shall provide that the Agency may draw upon
the letter of credit to pay costs associated with the acquisition of the Phase 1
Development Site, in the event Heavenly Resort Properties fails to deliver to
the Agency performance and payments bonds for the construction of the Grand
Summit Hotel and fully executed construction contracts for the Grand Summit
Hotel on or before April 28, 2000. In the event Heavenly Resort Properties
delivers payment and performance bonds and fully executed construction contracts
for the Grand Summit Hotel on or before April 28, 2000 and at the time of such
delivery, the amount of the Letter of Credit may be reduced to Three Hundred
Thousand Dollars ($300,000). The $300,000 Letter of Credit may be drawn upon by
the Agency to pay Development Site acquisition costs, maintenance and holding
costs associated with the Agency's ownership of the Phase 2 Development Site,
lost tax revenues to the City and the Agency resulting from the removal from the
Development Site of the improvements currently on the Development Site and the
payment of interest on the BANS in the event ASCRP fails to perform any
conditions of this Agreement. The letter of credit may be released completely at
such time as Performance and Payment Bonds are posted for the full amount of the
construction contract for Phase 2. In the event the Agency draws on the letter
of credit because Heavenly Resort Properties fails to deliver a performance and
payment bond on or before April 28, 2000 but Heavenly Resort Properties delivers
a performance and payment bond on or before September 15, 2000, the Agency shall
reimburse Heavenly Resort Properties, or the party posting the letter of credit,
the amount drawn down on the letter of credit at the time the Agency conveys the
Phase 1 Development Site to the Developers. In the event Heavenly Resort
Properties does not deliver performance and payment bonds on or before September
15, 2000, the Agency shall have no obligation to repay any funds drawn on the
letter of credit to the party posting the letter of credit and this Agreement
shall terminate with respect to Heavenly Resort Properties pursuant to Section
12.05 and the Agency shall be entitled to any remedies pursuant to Section
12.05.
(c) Approval of Bonds. The City, the Agency and the STJPFA have taken
the necessary action to approve the issuance of the BANS.
(d) Bond Counsel Opinion. The STJPFA has received a bond
counsel opinion opining to the tax-exempt nature of the BANS given the intended
use of the proceeds, in a form and substance satisfactory to the STJPFA in its
sole discretion.
(e) Other Requirements. The Developers, the Agency, the City and the
STJPFA have met all other legal requirements for the issuance of the BANS and
the use of proceeds to maintain the tax-exempt nature of the bonds.
(f) Evidence of Financing. Heavenly Resort Properties, Heavenly Valley,
and TSI shall jointly present evidence in a form reasonably satisfactory to the
Agency that Heavenly Resort Properties, Heavenly Valley, and TSI have financial
commitments and equity sufficient to fund the portions of the Project for which
Heavenly Resort Properties, Heavenly Valley, and TSI are responsible. The Agency
shall either approve or disapprove Heavenly Resort Properties', Heavenly
Valley's, and TSI's evidence of commitment of sufficient funds within ten (10)
days of receipt of such evidence; provided, however, if Heavenly Resort
Properties, Heavenly Valley, and TSI present to the Agency evidence of
sufficient equity or firm commitments for financing from reputable lenders with
only such conditions to funding as are typical for the funding source and are
commercially reasonable in amounts at least equal to the estimated total cost of
construction for each Phase of the Development, the Agency shall approve
Heavenly Resort Properties', Heavenly Valley's, and TSI's evidence of financing.
If the Agency disapproves Heavenly Resort Properties', Heavenly Valley's, or
TSI's evidence of funds, then Heavenly Resort Properties, Heavenly Valley, or
TSI, as applicable, shall have fifteen (15) days to submit revised evidence. The
periods for submission of evidence, review and approval or disapproval shall
continue to apply until evidence of financing has been approved by the Agency
for all portions of the Project in each Phase; however, evidence of financing
must be approved by the Agency no later than forty-five (45) days following
execution of this Agreement, or this Agreement may be terminated by either Party
pursuant to Section 12.02.
(g) Contract to Purchase Gondola Machinery. Heavenly Valley shall
provide the Agency with the opportunity to review evidence of its commitment to
purchase Gondola machinery, cabins, and lift towers necessary to construct the
Gondola portion of the Project. Such evidence shall take the form of a fully
executed purchase contract.
(h) Representation and Warranties. The representations and warranties
of the Developers as set forth in Section 14.01 of this Agreement remain true
and correct.
(i) No Litigation Concerning DDA. There is no existing pending
litigation, suit, action or proceeding before any court or administrative agency
affecting the Developers or any of them or the Development Site that would, if
adversely determined, adversely affect the Developers or the Development Site or
the Developers' ability to perform their obligations under this Agreement or to
develop and operate the Project.
(j) No Litigation Concerning Bonds. There is no action existing or
pending or threatened litigation, suit, action or proceeding before any court or
administrative agency affecting the BANS or the STJPFA's ability to issue the
BANS.
(k) Phase 1 Site Acquisition. At least five days prior to the sale of
the BANS the Agency shall have executed purchase and sale agreements for
portions of the Phase 1 Development Site which have a total purchase price of at
least Five Million Dollars ($5,000,000).
(l) Approval of Disbursement Plan. The Developers and the Agency have
agreed on the disbursement plan for the disbursement and use of the BANS
Proceeds and Mello-Roos Bond Proceeds.
(m) No Bankruptcy/Dissolution Event. No Bankruptcy/Dissolution Event
shall have occurred with respect to any of the Developers or an ASC Affiliate.
(n) Execution of the DDA. The Agency shall have received from each of
the Developers executed copies of the DDA by no later than October 15, 1999.
Issuance of BANS. Upon satisfaction of the conditions set forth in
Section 2.01, the Agency and the City shall cause the STJPFA to issue the BANS
in the amounts set forth in the Financial Plan in accordance with the Schedule
of Performance.
Conditions Precedent to the Agency Issuance of Parking Garage Revenue
Bonds. As conditions precedent to the Agency's obligations to cause the issuance
of the Parking Garage Revenue Bonds, the conditions set forth in this Section
2.03 must first be met or waived by the Agency by the times specified in the
Schedule of Performance or such other dates as may be agreed upon by the
Parties.
(a) Retail Space Under Construction. The Grand Summit and the retail
space to be constructed as part of the Grand Summit Resort shall be under
construction and proceeding in accordance with the Schedule of Performance.
(b) Parking Study. The Agency shall have received and approved a
Parking Study which shows that projected net revenues of the Parking Garage
exceed projected maximum annual debt services by a margin of at least 50%.
(c) Default. There exists no Developer Event of Default as defined in
Section 12.05.
(d) Parking Rate Schedule. The City shall have approved a Parking Rate
Schedule which is acceptable to the Developers.
(e) Approval of Bonds. The City, the Agency and the STJPFA have taken
the necessary action to approve the issuance of the Parking Garage Revenue
Bonds.
(f) Bond Counsel Opinion. The STJPFA has received a bond counsel
opinion opining to the tax-exempt nature of the Parking Garage Revenue Bonds
given the intended use of the proceeds, in a form and substance satisfactory to
the STJPFA in its sole discretion.
(g) Other Requirements. The Developers, the Agency, the City and the
STJPFA have met all other legal requirements for the issuance of the Parking
Garage Revenue Bonds and the use of proceeds to maintain the tax-exempt nature
of the bonds.
(h) Representation and Warranties. The representations and warranties
of the Developers as set forth in Section 14.01 of this Agreement remain true
and correct.
(i) No Litigation Concerning DDA. There is no existing pending
litigation, suit, action or proceeding before any court or administrative agency
affecting the Developers or any of them or the Development Site that would, if
adversely determined, adversely affect the Developers or the Development Site or
the Developers' ability to perform their obligations under this Agreement or to
develop and operate the Project.
(j) No Litigation Concerning Bonds. There is no action existing or
pending or threatened litigation, suit, action or proceeding before any court or
administrative agency affecting the Parking Revenue Bonds or the STJPFA's
ability to issue the Parking Revenue Bonds.
(k) No Bankruptcy/Dissolution Event. No Bankruptcy/Dissolution Event
shall have occurred with respect to any of the Developers or ASC Affiliate.
In the event any of the conditions precedent set forth in this Section
2.03 are not met and the Agency is unable to cause the issuance of the Parking
Garage Revenue Bonds, the Agency shall offer to the Developers the right to buy
the Parking Garage Site for development of the Parking Garage. In the event the
Developers elect to acquire the Parking Garage Site pursuant to this Section
2.03, Developers shall pay to the Agency the reuse value of the Parking Garage
Site assuming its development as a parking garage and the development of the
Project. The Agency shall only transfer the Parking Garage Site to the
Developers if the Developers demonstrate to the Agency's reasonable satisfaction
that they are prepared to construct the Parking Garage and they have sufficient
funds available to construct the Parking Garage. If the Developers do not elect
to buy the Parking Garage Site within twelve (12) months of the Agency offering
it to the Developers, the Agency shall have the option to retain the Parking
Garage Site and develop it with the Parking Garage; provided, however, the
Agency and the City shall not be required to obtain the Developers' approval of
the Parking Rate Schedule.
ARTICLE 3. CONDITIONS PRECEDENT
TO AGENCY ACQUISITION
3.01. Conditions Precedent to Agency Acquisition. The following
conditions shall be required to be complete prior to the Agency acquiring the
Phase 1 Development Site and the Phase 2 Development Site:
(a) Sale of Bonds. The Agency shall have sold the BANS and received
BANS Proceeds as projected in the Financial Plan.
(b)Agency Appraisals. Within the time specified in the Schedule of
Performance, the Agency shall cause to be completed an appraisal for each of the
properties in the Phase 1 Development Site and the Phase 2 Development Site to
be acquired by the Agency, including any goodwill and fixtures and equipment
appraisals, if required in the judgement of the Agency.
(c) Financial Plan. Attached as Exhibit A to this Agreement is a
Financial Plan which sets forth a general cost breakdown for the construction of
the Project, including the portions to be developed by the Agency, a sources and
uses for all funds to be expended on costs associated with the development of
the Project and a schedule of uses for the BANS Proceeds. Execution of this
Agreement by the Developers and the Agency shall be deemed approved by all
parties of the Financial Plan. Neither party may amend the Financial Plan
without the consent of the other party in writing. Subject to the terms of this
Agreement, each party shall be responsible for ensuring the completion of those
activities necessary for the implementation of the Financial Plan set forth in
the Financial Plan as an obligation of any Party.
(d) Lake Tahoe Inn Development Site. In addition to the above
conditions precedent to the Agency acquisition of the Phase 2 Property, ASCRP
shall provide to the Agency, at least ninety (90) days prior to the date on
which the Developer gives the Agency a notice of intent to construct Phase 2
pursuant to Section 3.01(e), a development plan for the Lake Tahoe Inn Site
which at a minimum shall provide the number of tourist accommodation units
projected to be constructed on the Lake Tahoe Inn Site, the type of TAUs to be
constructed, the amount of meeting space included in the development, the
operator of the resort and financial information on the rental rates for the
TAUs, the sales prices for any multiple ownership units, and such other
information as is necessary for the Agency to determine the revenue generation
capacity of the proposed development. The Agency shall approve or disapprove the
development plan for the Lake Tahoe Inn within thirty (30) days of receipt of
the development plan. The Agency shall approve the development plan if the
development plan provides for the development of 325 units to be sold as quarter
share interests, and the financial information presented by ASCRP, or at the
Agency's discretion, financial information and projections generated by the
Agency's consultants, demonstrate that the revenue generating capacity of the
development plan is equal to the Phase 2 revenue projections as set forth in the
Financing Plan, the number of TAUs required to be transferred by the Agency is
not greater than 409, the development design component conforms to the Agency
and City design guidelines and is consistent with the Phase 1 design elements,
there is at least 9,000 square feet of meeting space within the development (the
9,000 square feet of meeting space may include meeting space elsewhere on the
Development Site, including meeting space at the Gondola top station), and the
operation plan for the resort is consistent with a four star resort. The Agency
will not approve the development plan for the Lake Tahoe Inn Development Site if
the plan proposes operating the development as a Grand Summit Resort. If the
Agency disapproves the development plan, the Agency shall notify ASCRP of the
reasons for such disapproval in writing. ASCRP shall have thirty (30) days from
receipt of the Agency disapproval to resubmit a revised development plan. In the
event ASCRP proposes to sell any of the units at the site as single ownership
units, ASCRP shall consult with the Agency regarding whether such a sale will
trigger the Agency's housing production requirements pursuant to Health and
Safety Code Section 33413. In the event the sale of single ownership units
triggers the housing production requirement ASCRP will be required to make an
in-lieu payment to the Agency in an amount to be determined by the Agency to
assist the Agency in meeting its housing production requirement.
(e) Phase 2 Acquisitions. The Agency shall not begin acquisition of
the Phase 2 Development Site until such time as ASCRP has provided the Agency
with a notice in writing of its intent to construct Phase 2. ASCRP must give a
notice of intent to construct Phase 2 no later than September 1, 2001; provided,
however, if ASCRP desires to begin construction of Phase 2 during the year 2001
building season, ASCRP must give the Agency a notice of intent to build Phase 2
no later than September 1, 2000. If ASCRP fails to give the Agency a notice of
intent to build on or before September 1, 2001, the Agency may terminate this
Agreement pursuant to Section 12.05 and exercise any remedies the Agency may
have pursuant to Article 12, unless on or before September 1, 2001, ASCRP
delivers to the Agency a letter of credit meeting all of the requirements set
forth in Section 2.01(b)(1) and (2) in the amount of One Million Six Hundred
Sixty-Three Thousand Dollars ($1,663,000). The letter of credit may be drawn on
by the Agency to cover costs associated with Phase 2 Site Acquisition at any
time after the Letter of Credit is posted.
(f) Evidence of Financing. At the time ASCRP provides the Agency with
a notice of its intent to construct Phase 2, ASCRP and Cecil's Market, Inc.
shall also present evidence in a form reasonably satisfactory to the Agency that
ASCRP and Cecil's Market, Inc. have financial commitments and equity sufficient
to fund the portions of the Project for which ASCRP and Cecil's Market, Inc. are
responsible. The Agency shall either approve or disapprove ASCRP's and Cecil's
Market, Inc.' evidence of sufficient funds within ten (10) days of receipt of
such evidence; provided, however, if ASCRP and Cecil's Market, Inc. present to
the Agency evidence of sufficient equity or firm commitments for financing from
reputable lenders with only such conditions to funding as are typical for the
funding source and are commercially reasonable in amounts at least equal to the
estimated total cost of construction of Phase 2, the Agency shall approve
ASCRP's and Cecil's Market, Inc.' evidence of financing. If the Agency
disapproves ASCRP's or Cecil's Market, Inc.' evidence of funds, ASCRP or Cecil's
Market, Inc., as applicable, shall have fifteen (15) days to submit revised
evidence. The periods of submission of evidence, review and approval or
disapproval shall continue to apply until evidence of financing has been
approved by the Agency for all portions of Phase 2; however, evidence of
financing must be approved by the Agency no later than forty-five (45) days
following submission of the original evidence of financing pursuant to this
Section, or this Agreement may be terminated pursuant to Section 12.02.
ARTICLE 4. AGENCY ACQUISITION ACTIVITIES
4.01 Agency Offers to Purchase. Provided the preconditions in Sections
2.01 and 3.01 have been met and subject to the provisions of this Article 4, the
Agency shall, in accordance with the provisions of Government Code Sections 7267
through 7267.9, make offers to purchase the Phase 1 Development Site and the
Phase 2 Development Site in accordance with the terms and conditions set forth
in the Schedule of Performance. Provided the preconditions in Sections 2.01 and
3.01 have been met and subject to the provisions of this Article 4, the City
shall, in accordance with the provisions of Government Code Sections 7267
through 7267.9, make offers to purchase the property required for the Drainage
Basins in accordance with the times set forth in the Schedule of Performance.
Prior to making the initial offer for any property in the Phase 1 Development
Site or the Phase 2 Development Site, the Agency, in consultation with the
Developers, shall prepare an acquisition budget estimating the costs for the
purchase of each of the parcels in the Phase 1 Development Site or the Phase 2
Development Site, as applicable, including any relocation expenses. The
acquisition budget shall include a reasonable contingency amount. The Agency
shall not be required to make any offer to purchase any portion of the Phase 2
Development Site unless ASCRP has provided the Agency with a notice of intent to
construct Phase 2 and the Agency has approved a development plan for the Lake
Tahoe Inn pursuant to Section 3.01(d) above.
The Agency shall be solely responsible for the payment of all costs
associated with the acquisition of the Phase 1 Development Site (exclusive of
the commercial property currently owned by Cecil's Market, Inc., subject to the
provisions of Section 6.01(m) and the Gondola Right-of-Way) and the Phase 2
Development Site (exclusive of the leasehold interest in the Lake Tahoe Inn);
provided, however, in the event that, at any time, the Developers determine that
the Agency or the City is unable to timely fund the acquisition of the property
necessary for the development of the Project (including the acquisition of the
property necessary for the Drainage Basins) within the time frame required by
this Agreement, the Developers may, at their option, loan to the Agency and/or
the City, on an unsecured basis, up to whatever amounts of funds are necessary
to acquire the Development Site, and Agency and/or the City agree to borrow such
funds and use such funds exclusively for the purposes of acquiring the necessary
property. In the event the Developers loan funds to the Agency and/or the City,
the Agency and/or the City shall repay such funds immediately upon Agency's
receipt of any, and to the extent of all available Excess Revenues.
4.02 Condemnation of Properties. To the extent that the Agency or the
City is unable to acquire any of the property comprising the Development Site,
including the Gondola Right-of-Way, and the Drainage Basin Property through
negotiation, the Agency and/or the City agree to make a good faith effort to
schedule a hearing within the time set forth in the Schedule of Performance for
the purpose of considering a resolution of necessity authorizing the use of the
Agency's or the City's eminent domain authority pursuant to California Code of
Civil Procedure Section 1230.010 et seq. in order to acquire such parcel through
the exercise of the Agency's or the City's power of eminent domain. The Agency
and the City shall take all steps necessary to schedule a hearing for
consideration of a resolution of necessity by the County of El Dorado
authorizing the use of the County's eminent domain authority for those portions
of the Gondola Right-of-Way outside city limits, if necessary.
4.03 Acknowledgement of Agency and City Discretion. The Developers
acknowledge that the Agency and the City have absolute discretion in determining
whether or not they should adopt a resolution of necessity with regard to the
property included in the Development Site, the Gondola Right-of-Way and the
Drainage Basin Property or any portion thereof, and therefore agree that nothing
in this Agreement shall obligate the Agency or the City to adopt a resolution of
necessity with respect to any portion of the Development Site, the Gondola
Right-of-Way and the Drainage Basin Property or subject the Agency or the City
to liability for the failure of the Agency or the City to adopt such resolution.
4.04 Eminent Domain Actions; Orders for Possession. If the Agency, the
County and/or the City adopt resolutions authorizing the Agency or the City to
proceed with condemnation proceedings to acquire any or all of the Development
Site, the Gondola Right-of-Way or the Drainage Basin Property, the Agency or the
City, as applicable, shall promptly commence such proceedings for such portions
of the Development Site, make the deposit of compensation required by law and
seek orders for possession of the portion of the Development Site that is the
subject of the condemnation actions; provided, however, the Agency or the City
may delay obtaining orders of possession for the Drainage Basin Property until
May 15, 2000. If the Agency has not executed voluntary agreements for
acquisition of the Phase 1 Development Site (except for the Drainage Basin
Property) or obtained orders of possession for those properties that the Agency
is unable to reach voluntary agreement by December 15, 1999, prior to obtaining
orders of possession the Agency and Developers shall meet and confer about
changes to the Schedule of Performance. Only after the Agency and Developers
have agreed upon a revised Schedule of Performance shall the Agency proceed with
obtaining orders of possession for the Phase 1 Development Site.
4.05 TAUs, Sewer Units and CFA. When acquiring the properties
comprising the Development Site and the Drainage Basin Property, the Agency
and/or the City shall retain all TAUs, Residential Units, square feet of CFA,
the Land Coverage Square Footage and Sewer Units located on the properties for
transfer to the Developers pursuant to Article 7. In addition to the above,
Agency shall retain for Project use the Land Coverage Square Footage from APNs
29-095-011, 29-095-21 and 29-095-041.
ARTICLE 5. AGENCY CONDITIONS PRECEDENT
TO DISPOSITION OF PROPERTY TO DEVELOPER
5.01 Conditions Precedent to Transfer of Phase 1 Development Site to
Developers. In addition to the completion of the activities set forth in
Articles 2, 3 and 4, as conditions precedent to Heavenly Valley's, Heavenly
Resort Properties' and TSI's obligation to acquire the Phase 1 Development Site,
the conditions set forth in this Section 5.01 must first be met by the Agency
and/or the City or waived by Heavenly Valley, Heavenly Resort Properties and TSI
by the time specified in the Schedule of Performance or such other dates as may
be agreed upon by the Parties.
(a) Acquisition of Phase 1 Development Site. The Agency or the City
shall have acquired all of the property comprising the Phase 1 Development Site,
including the Gondola Right-of-Way as well as the Paul Kennedy Steakhouse Site,
in fee or the Agency or the City shall have valid orders of possession for those
properties that the Agency or the City has been unable to acquire voluntarily.
(b) Agency Acquisition of Units of Use. The Agency shall have obtained
or shall have possession of 294 TAUs, 50,246 CFA and 518 Sewer Units and 18
Residential Units.
(c) Hazardous Materials Clean-up. The Agency shall have prepared an
environmental site assessment for the Phase 1 Development Site, including a
hazardous materials removal plan, and the Agency shall have carried out any
activities recommended in the site assessment as necessary for the removal of
any hazardous materials located on the Phase 1 Development Site. The Agency
hereby agrees to indemnify, protect, hold harmless and defend (by counsel
reasonably satisfactory to Heavenly Valley, Heavenly Resort Properties and TSI)
Heavenly Valley, Heavenly Resort Properties and TSI, their officers, directors,
agents and employees and their successors and assigns from and against all
claims, losses, damages, liabilities, fines, penalties, charges, administrative
and judicial proceedings and orders, judgments, remedial action requirements,
enforcement actions of any kind and all costs and expenses incurred in
connection therewith (including, but not limited to, attorneys' fees and
expenses) arising directly or indirectly in whole or in part from hazardous
materials on the Phase 1 Development Site which were on the Phase 1 Development
Site prior to Heavenly Valley, Heavenly Resort Properties and TSI acquiring the
Phase 1 Development Site or from the Agency's activities related to the removal
of any hazardous materials including any costs or expenses incurred by the
Developers as a result of the Agency failing to deliver to Heavenly Valley,
Heavenly Resort Properties and TSI the Phase 1 Development Site in accordance
with the Schedule of Performance as a result of delays in the removal of any
hazardous materials. Upon completion of any removal of hazardous material on the
Phase 1 Development Site, the Agency shall provide Heavenly Valley, Heavenly
Resort Properties and TSI with copies of any certificates or closure letters
received by the Agency from any regulatory bodies indicating that the hazardous
materials have been removed and properly disposed of. The provisions of this
subsection shall survive expiration of this Agreement or other termination of
this Agreement, and shall remain in full force and effect.
(d) Demolition of Existing Improvements. The Agency shall have
demolished and removed any improvements, structures or debris currently located
on the Phase 1 Development Site and shall have placed the property in a
condition to begin construction; provided, however, prior to demolition of the
portion of the Lake Tahoe Inn in the Phase 1 Development Site, ASCRP shall have
granted the Agency a right of entry to the Lake Tahoe Inn, including the right
to demolish the improvements located on the Phase 1 Development Site. In the
event the Agency is unable to deliver the Phase 1 Development Site to Heavenly
Valley, Heavenly Resort Properties and TSI in the time set forth in the Schedule
of Performance as a result of delays related to the demolition of improvements
on the Phase 1 Development Site, the Agency shall pay to the Developers any
costs associated with such a delay, including costs related to maintaining the
Letter of Credit required pursuant to Section 2.01(b) and costs associated with
keeping the construction contract in effect.
(e) Construction Manager. In the event there will be multiple
contractors working simultaneously at or near the Phase 1 Development Site, the
Agency shall have entered into a contract with a construction manager acceptable
to both Developers and the Agency which provides for the construction manager to
coordinate construction of the Public Improvements.
(f) Contracts for Public Improvements. The Agency shall have taken all
steps necessary to award contracts for the Phase 1 Public Improvements.
(g) Parking Management Agreement. The Agency, the City, Heavenly
Valley, Heavenly Resort Properties, TSI and Tahoe Crescent Partners shall have
approved a Parking Management Agreement.
(h) Plaza Maintenance Agreement. The Agency, the City, ASCRP, Heavenly
Valley, Heavenly Resort Properties, Cecil's Market, Inc., and TSI shall have
approved the Plaza Maintenance Agreement. The Plaza Maintenance Agreement shall
include provisions regulating advertising signs in the Plaza, the operations of
the Plaza, reserve funding for the Plaza operations and such other provisions as
the parties may agree.
(i) Mello-Roos District Formation. The Agency shall have caused to be
formed a Mello-Roos District to cover the Phase 1 Development Site in accordance
with Section 9.05 below.
5.02 Conditions Precedent to Transfer of Phase 2 Development Site to
Developers. In addition to the completion of the activities set forth in
Articles 2, 3 and 4, as conditions precedent to the Developers' obligation to
acquire the Phase 2 Development Site, the conditions set forth in this Section
5.02 must first be met by the Agency or waived by ASCRP and Cecil's Market, Inc.
by the time specified in the Schedule of Performance or such other dates as may
be agreed upon by the Parties.
(a) Acquisition of Phase 2 Development Site. The Agency shall have
acquired all of the property comprising the Phase 2 Development Site in fee,
including a fee interest in the Lake Tahoe Inn Site, or the Agency shall have
valid orders of possession for those properties that the Agency has been unable
to acquire voluntarily.
(b) Agency Acquisition of Units of Use. The Agency shall have obtained
or shall have possession of 456 TAUs, 17,610 CFA, 537 Sewer Units, and 1
Residential Unit.
(c) Hazardous Materials Clean-up. The Agency shall have prepared an
environmental site assessment for the Phase 2 Development Site, including a
hazardous materials removal plan, and the Agency shall have carried out any
activities recommended in the site assessment as necessary for the removal of
any hazardous materials located on the Phase 2 Development Site. The Agency
hereby agrees to indemnify, protect, hold harmless and defend (by counsel
reasonably satisfactory to ASCRP and Cecil's Market, Inc.) ASCRP and Cecil's
Market, Inc., their officers, directors, agents and employees and their
successors and assigns from and against all claims, losses, damages,
liabilities, fines, penalties, charges, administrative and judicial proceedings
and orders, judgments, remedial action requirements, enforcement actions of any
kind and all costs and expenses incurred in connection therewith (including, but
not limited to, attorneys' fees and expenses) arising directly or indirectly in
whole or in part from hazardous materials on the Phase 2 Development Site which
were on the Phase 2 Development Site prior to ASCRP and Cecil's Market, Inc.
acquiring the Phase 2 Development Site or from the Agency's activities related
to the removal of any hazardous materials, including any costs incurred by ASCRP
and Cecil's Market, Inc. as a result of the Agency failing to deliver to ASCRP
and Cecil's Market, Inc. the Phase 2 Development Site in accordance with the
Schedule of Performance as a result of delays in the removal of any hazardous
materials; provided, however, this indemnity shall not cover any hazardous
materials located on the portions of the Phase 2 Development Site owned by the
Developers prior to the Close of Escrow, except that the Agency shall be
responsible for the removal of asbestos from the Lake Tahoe Inn. Upon completion
of any removal of hazardous material on the Phase 2 Development Site, the Agency
shall provide ASCRP and Cecil's Market, Inc. with copies of any certificates or
closure letters received by the Agency from any regulatory bodies indicating
that the hazardous materials have been removed and properly disposed of. The
provisions of this subsection shall survive expiration or other termination of
this Agreement, and shall remain in full force and effect.
(d) Subdivision Map. The Developers shall have recorded a final
subdivision map for the Phase 2 Development Site that is consistent with the
tentative subdivision map.
(e) Demolition of Existing Improvements. The Agency shall have
demolished and removed any improvements, structures or debris currently located
on the Phase 2 Development Site and shall have placed the property in a
condition to begin construction; provided, however, prior to demolition of the
Lake Tahoe Inn, ASCRP shall have granted the Agency a right of entry to the Lake
Tahoe Inn, including the right to demolish the improvements located thereon, and
Cecil's Market, Inc. shall have granted the Agency a right of entry to the Paul
Kennedy Steakhouse Site, including the right to demolish the improvements
located thereon. In the event the Agency is unable to deliver the Phase 2
Development Site to ASCRP and Cecil's Market, Inc. in the time set forth in the
Schedule of Performance as a result of delays related to the demolition of
improvements on the Phase 2 Development Site, the Agency shall pay to ASCRP and
Cecil's Market, Inc. any costs associated with such a delay, including costs
related to maintaining the Letter of Credit required pursuant to Section 2.01(b)
and costs associated with keeping the construction contract in effect.
(f) Contracts for Public Improvements. The Agency or the City shall
have taken all steps necessary to award contracts for the Phase 2 Public
Improvements.
(g) Annexation of County Property. The City shall have completed
annexation of the portion of property currently located in El Dorado County's
jurisdiction adjacent to the site where the Intermodal Transit Center is to be
developed.
(h) Mello-Roos District. The Agency shall have caused the Phase 2
Development Site to be annexed to the Mello-Roos District formed pursuant to
Section 9.05, below. The Developer shall consent to the annexation of the Phase
2 Development Site to the Mello-Roos District.
ARTICLE 6. DEVELOPERS' CONDITIONS
PRECEDENT TO TRANSFER OF DEVELOPMENT SITE
6.01 Conditions Precedent to Transfer of Phase 1 Property to
Developers. In addition to the completion of the activities set forth in
Articles 2, 3 and 4, as conditions precedent to the Agency's obligation to
transfer the Phase 1 Development Site to Heavenly Resort Properties, Heavenly
Valley and TSI, the conditions set forth in this Section 6.01 must first be met
by Heavenly Resort Properties, Heavenly Valley and TSI or waived by the Agency
by the time specified in the Schedule of Performance or such other dates as may
be agreed upon by the Parties; provided, however, if Heavenly Resort Properties
and Heavenly Valley have met all the conditions set forth in this Section 6.01
but TSI has not met all the conditions set forth in this Section 6.01, the
conditions precedent for the transfer of the portions of the Phase 1 Development
Site to be transferred to Heavenly Resort Properties and Heavenly Valley shall
be deemed to have been met.
(a) Parking Management Agreement. ASCRP, Heavenly Resort Properties,
Heavenly Valley, TSI, Cecil's Market, Inc., the Agency and Tahoe Crescent
Partners shall have approved a Parking Management Agreement.
(b)Plaza Maintenance Agreement. Heavenly Resort Properties, Heavenly
Valley, TSI and the Agency shall have approved a Plaza Maintenance Agreement.
(c) Permits and Approvals. Heavenly Resort Properties, Heavenly Valley
and TSI shall have obtained and acknowledged all permits and approvals necessary
for the construction of Phase 1 from any federal, state and local agencies
having jurisdiction over the construction of the Project and shall be in
compliance with all such permits.
(d) Final Construction Plans. Within the time set forth in the
Schedule of Performance, Heavenly Resort Properties, Heavenly Valley and TSI
shall complete or cause to be completed and submit to the Agency the Final
Construction Plans for Phase 1 and simultaneously cause applications to be
submitted to the City for a building permit for construction of Phase 1. The
final construction plans shall include detailed information about interior
finishes and design elements. The Agency may, at its option, review the Final
Construction Plans for consistency with the Approved Plans and the Site Plan,
and if the Agency notifies the Developers in writing within fifteen (15) days
after receipt of the Final Construction Plans of an inconsistency with this
Agreement, then Heavenly Resort Properties, Heavenly Valley and TSI shall
promptly revise the Final Construction Plans and cause the City building permit
applications to be revised to eliminate such inconsistency; provided, however,
if the Agency disapproves of the Final Construction Plans because of the
interior finishes or design elements, the Agency and the Developers shall meet
and confer regarding appropriate changes to the interior finishes. After causing
such applications to be made for a building permit, Heavenly Resort Properties,
Heavenly Valley and TSI shall diligently pursue and obtain a building permit. No
later than ninety (90) days following application to the City for a building
permit (subject to extensions of time reasonably granted by the Agency Executive
Director or his or her designee pursuant to Section 12.08 if issuance of a
building permit is delayed through no fault of the Developers) Heavenly Resort
Properties, Heavenly Valley and TSI shall deliver evidence to the Agency that
Heavenly Resort Properties, Heavenly Valley and TSI are entitled to issuance of
a building permit for Phase 1 upon payment of permit fees.
(e) Evidence of Financing. Heavenly Resort Properties, Heavenly Valley
and TSI shall have provided the Agency with evidence satisfactory to the Agency
in its Reasonable Discretion of a binding construction loan or other financing
commitments for the Grand Summit Hotel, the Grand Summit Annex, the Gondola and
the Ice Rink in an amount sufficient to construct the Grant Summit Hotel, the
Grand Summit Annex, the Gondola and the Ice Rink in accordance with the
Financing Plan. In addition, Heavenly Valley shall provide the Agency with
evidence satisfactory to the Agency in its Reasonable Discretion that the terms
of the agreement for the purchase of Gondola equipment have been fully met and
the purchase agreement is still in full force and effect.
(f) Subdivision Map. The Developers, in consultation with the Agency,
shall have prepared a subdivision map for the Development Site consistent with
the Draft Tentative Subdivision Plan and the City shall have approved and the
Developers or the Agency shall have recorded a final subdivision map for the
Phase 1 Development Site.
(g) Department of Real Estate Approval. Heavenly Resort Properties
shall provide the Agency with evidence of receipt of Public Report from the
California Department of Real Estate.
(h) Water Permits. Heavenly Resort Properties, Heavenly Valley and TSI
shall have applied for and obtained binding commitment from STPUD for adequate
domestic and fire sprinkler water supplies for the operation of Phase 1 of the
Project.
(i) Waste Discharge Permit. Heavenly Resort Properties, Heavenly
Valley and TSI shall have obtained waste discharge permits from Lahontan for
Phase 1 of the Project.
(j) Construction Contract. Heavenly Resort Properties, Heavenly Valley
and TSI shall provide the Agency with an opportunity to review an executed
construction contract for Phase 1 of the Project in form and substance
acceptable to the Agency in its Reasonable Discretion from a general contractor
of sufficiently strong financial condition to qualify as a surety to issue a
payment and performance bond and with a level of contracting experience
acceptable to the Agency in its Reasonable Discretion. The Agency shall approve
the construction contract if the contract is for an amount not to exceed the
amount of the construction financing commitments pursuant to Section 6.01(d)
above and the contract includes the requirements of Section 8.06 and 8.07
regarding local hiring and local supplies.
(k) Performance and Payment Bonds. Heavenly Resort Properties and TSI
shall deliver to the Agency performance and payment bonds in form and substance
reasonably satisfactory to the Agency in the full amount of the construction
contract. The performance and payment bonds shall name the Agency as the
co-obligee.
Said bonds should be issued by an insurance company which is licensed
to do business in California and named in the current list of "Surety Companies
Acceptable on Federal Bonds" as published in the Federal Register by the Audit
Staff Bureau of Accounts, U.S. Treasury Department and for amounts which are not
in excess of the acceptable amount set forth on such list for the respective
surety. The insurance company shall have a rating equivalent to a Best rating of
A or FSC rating of 9.
(l) Contract for the Acquisition of the Lake Tahoe Inn. ASCRP has
submitted to the Agency a fully executed and binding entitlement to acquire the
Lake Tahoe Inn ("Option Agreement"). The Option Agreement shall be in full force
and effect until the close of escrow on the Phase 2 Development Site. Any
changes or amendments to the Option Agreement shall be subject to the Agency's
approval.
(m) Transfer of CFA. TSI shall have transferred 26,920 square feet of
CFA to the Grand Summit Hotel site.
(n) Grant Deed for Cecil's Market. John and Camilla Jovicich shall
deposit to Escrow a Grant Deed granting the property commonly known as Cecil's
Market, located at 4020 U.S. Highway 50 and the Big and Tall Store located at
1019 Park Avenue ("Jovicich Property") to the Agency.
(o) Insurance. The Developers shall furnish the Agency with evidence
of insurance in the amounts and types specified in Section 8.12 naming the
Agency and the City as additional insured.
(p) No Default. There exists no Developer Event of Default as defined
in Section 12.05.
(q) Representations and Warranties. The representations and warranties
of the Developers as set forth in Section 14.01 of the Agreement remain true and
correct.
(r) No Litigation Concerning DDA. There is no existing pending
litigation, suit, action or proceeding before any court or administrative agency
affecting the Developers or any of them or Development Site, that would, if
adversely determined, adversely affect the Developers or the Development Site or
the Developers' ability to perform their obligations under this Agreement or to
develop or operate the Project.
(s) Retail Tenant Selection. Prior to beginning leasing efforts for
the retail space in the Development, TSI and Heavenly Resort Properties shall
provide to the Agency for its approval or disapproval, leasing plans showing the
desired tenant mix and expected lease rate. Approval of the leasing plans shall
be in the Agency's Reasonable Discretion. Subsequent to approval of the leasing
plan, TSI and Heavenly Resort Properties shall provide the Agency with biannual
reports of leasing efforts.
(t) Agency's Satisfaction with Developer. Heavenly Resort Properties
has provided the Agency with evidence reasonably satisfactory to the Agency that
Heavenly Resort Properties is a single purpose entity whose sole assets are such
portion of the Phase I Development Site that Heavenly Resort Properties is to
take title of and any related assets and whose sole liabilities are:
(a) those approved by the Agency pursuant to Section 2.01 (f) or
3.01 (f), as applicable; or
(b) contingent unsecured liabilities which are fully subordinated
to liabilities approved by the Agency and which would neither
render Heavenly Resort Properties "insolvent" as that term is
defined in the United States Bankruptcy Code or New York law,
nor leave Heavenly Resort Properties with unreasonably small
capital.
TSI has provided the Agency with evidence reasonably satisfactory to
the Agency that TSI is a single purpose entity whose sole assets are the portion
of the Phase I Development Site that TSI is to take title of and any related
assets and whose sole liabilities are related to development of the portion of
the Phase I Development Site TSI is developing.
(u) No Bankruptcy/Dissolution Event. No Bankruptcy/Dissolution Event
shall have occurred with respect to any of the Developers or an ASC Affiliate.
6.02 Conditions Precedent to Transfer of Phase 2 Development Site to
Developers. In addition to the completion of the activities set forth in
Articles 2, 3 and 4, as conditions precedent to the Agency's obligation to
transfer the Phase 2 Development Site to ASCRP and Cecil's Market, Inc. the
conditions set forth in this Section 6.02 must first be met by ASCRP and Cecil's
Market, Inc. or waived by the Agency by the time specified in the Schedule of
Performance or such other dates as may be agreed upon by the Parties; provided,
however, if ASCRP has met all the conditions set forth in this Section 6.02 but
Cecil's Market, Inc. have not met all the conditions set forth in this Section
6.02, the conditions precedent for the transfer of the portions of the Phase 2
Development Site to be transferred to ASCRP shall be deemed to have been met.
(a) Permits and Approvals. ASCRP and Cecil's Market, Inc. shall have
obtained all permits and approvals necessary for the construction of Phase 2
from any federal, state and local agencies having jurisdiction over the
construction of the Project, and ASCRP and Cecil's Market, Inc. are in
compliance with such permits.
(b) Evidence of Financing. ASCRP and Cecil's Market, Inc. shall have
provided the Agency with evidence satisfactory to the Agency in its Reasonable
Discretion of a binding construction loan commitment for Phase 2, in amounts
sufficient to construct Phase 2 in accordance with the Financing Plan.
(c) Final Construction Plans. Within the time set forth in the
Schedule of Performance, ASCRP and Cecil's Market, Inc. shall complete or cause
to be completed and submit to the Agency the Final Construction Plans for Phase
2 and simultaneously cause applications to be submitted to the City for a
building permit for construction of Phase 2. The final Construction Plans shall
include detailed information about interior finishes and design elements. The
Agency may, at its option, review the Final Construction Plans for consistency
with the Approved Plans and the Site Plan, and if the Agency notifies ASCRP and
Cecil's Market, Inc. in writing within fifteen (15) days after receipt of the
Final Construction Plans of an inconsistency with this Agreement, then ASCRP and
Cecil's Market, Inc. shall promptly revise the Final Construction Plans and
cause the City building permit applications to be revised to eliminate such
inconsistency. If the Agency disapproves of the Final Constructions Plans
because of the interior finishes or design elements, the Agency and the
Developers shall meet and confer on appropriate changes to the interior finishes
and/or design elements. After causing such applications to be made for a
building permit, ASCRP and Cecil's Market, Inc. shall diligently pursue and
obtain a building permit. No later than ninety (90) days following application
to the City for a building permit (subject to extensions of time reasonably
granted by the Agency Executive Director or his or her designee pursuant to
Section 12.08 if issuance of a building permit is delayed through no fault of
the Developers), ASCRP and Cecil's Market, Inc. shall deliver evidence to the
Agency that the ASCRP and Cecil's Market, Inc. are entitled to issuance of a
building permit for the second Phase upon payment of permit fees.
(d) Department of Real Estate Approval. ASCRP shall provide the Agency
with evidence of receipt of Public Report for the sale of units in Phase 2 from
the California Department of Real Estate if required by the Department of Real
Estate.
(e) Water Permits. ASCRP and Cecil's Market, Inc. shall have applied
for and obtained binding commitment from STPUD for adequate domestic and fire
sprinkler water supplies for the operation of Phase 2.
(f) Waste Discharge Permit. ASCRP and Cecil's Market, Inc. shall have
obtained a waste discharge permit from Lahontan for Phase 2 of the Project.
(g) Construction Contract. ASCRP and Cecil's Market, Inc. shall
provide the Agency with an opportunity to review an executed construction
contract or contracts for Phase 2 of the Project in form and substance
acceptable to the Agency in its Reasonable Discretion from a general contractor
of sufficiently strong financial condition to qualify as a surety to issue a
payment and performance bond and with a level of contracting experience
acceptable to the Agency in its Reasonable Discretion. The Agency shall approve
the construction contract if the contract is for an amount not to exceed the
amount of the construction financing commitments and equity commitments pursuant
to Section 6.02(b) above and the contract includes the requirements of Sections
8.07 and 8.08 regarding local hiring and local supplies.
(h) Performance and Payment Bonds. ASCRP and Cecil's Market, Inc.
shall deliver to the Agency performance and payment bonds in form and substance
reasonably satisfactory to the Agency in the full amount of the construction
contract. Said bonds should be issued by an insurance company which is licensed
to do business in California and named in the current list of "Surety Companies
Acceptable on Federal Bonds" as published in the Federal Register by the Audit
Staff Bureau of Accounts, U.S. Treasury Department and for amounts which are not
in excess of the acceptable amount set forth on such list for the respective
surety. The insurance company shall have a rating equivalent to a Best rating of
A or FSC rating of 9. The performance and payment bonds shall name the Agency as
the co-obligee.
(i) No Default. No Developer Event of Default as defined in Section
12.05 has occurred.
(j) Representations and Warranties. The representations and warranties
of the Developers as set forth in Section 14.01 of the Agreement remain true and
correct.
(k) No Litigation Concerning DDA. There is no existing pending
litigation, suit, action or proceeding before any court or administrative agency
affecting the Developers or Development Site that would, if adversely
determined, adversely affect the Developers or the Development Site or the
Developers' ability to perform their obligations under this Agreement or to
develop or operate the Project.
(l) Insurance. ASCRP and Cecil's Market, Inc. shall furnish the Agency
with evidence of insurance in the amounts and types specified in Section 8.12
naming the Agency and the City as additional insureds.
(m) Jovicichs' Grant Deed for Paul Kennedy Steakhouse Site. Cecil's
Market, Inc. shall have deposited into Escrow a Grant Deed granting title to the
Paul Kennedy Steakhouse Site to the Agency.
(n) Agency's Satisfaction with Developer. The ASCRP has provided the
Agency with evidence reasonably satisfactory to the Agency that the entity to
develop the Lake Tahoe Inn Site is a single purpose entity whose sole assets
will be the Lake Tahoe Inn Site Development Site the Developer is to take title
of and any related assets and whose sole liabilities are:
(a) those approved by the Agency pursuant to Section 2.01 (f) or
3.01(f), as applicable; or
(b) contingent, unsecured liabilities which are fully subordinated
to liabilities approved by the Agency and which would neither
render the development entity "insolvent" as that term is
defined in the United States Bankruptcy Code or New York law,
nor leave the development entity with unreasonably small
capital.
(o) No Bankruptcy/Dissolution Event. No Bankruptcy/Dissolution Event
shall have occurred with respect to any of the Developers or an ASC Affiliate.
ARTICLE 7. DISPOSITION OF PROPERTY
7.01 Sale of Property. Within thirty (30) days following the date that
all the conditions set forth in Section 5.01 and 6.01 have been met or waived,
the Agency shall sell and convey Parcels 5, 8 and 9 (as shown on the Preliminary
Subdivision Map) to Heavenly Resort Properties for construction of the Grand
Summit Hotel and the Grand Summit Annex; Parcel 13 and the Gondola Right-of-Way
to Heavenly Valley for construction of the Gondola; and the Gondola Park and
Parcels 6 and 7 to TSI for construction of the Ice Rink and the multi-plex
cinema. In addition to conveying the parcels as designated the Agency shall
convey to each Developer easements over Parcel 3 for ingress, egress and public
use. In addition, the Agency shall grant the Paul Kennedy Steakhouse Site to
Cecil's Market, Inc. in exchange for Cecil's Market, Inc.' conveyance of the
Jovicich Property to the Agency. Within thirty (30) days following the date that
all the conditions set forth in Sections 5.02 and 6.02 have been met or waived,
the Agency shall sell and convey Parcel No. 1 to Cecil's Market, Inc. and Parcel
4 to ASCRP. The conveyance of Parcel 1 to Cecil's Market, Inc. shall include the
rights, granted by ASCRP to Cecil's Market, Inc.', to the use of five parking
spaces in the underground parking garage developed as part of the Lake Tahoe
Inn, provided the parking garage is developed as contemplated in the Site Plan
and provided, further, Cecil's Market, Inc. reimburse ASCRP for the full cost of
developing the five parking spaces. Cecil's Market, Inc. shall also have the
right to construct access from Parcel 1 to the designated parking spaces. To
accomplish the conveyance of each Phase of the Development Site from the Agency
to the Developers, the Parties shall establish an Escrow with the Escrow Holder
and shall execute and deliver to the Escrow Holder written instructions that are
consistent with this Agreement.
7.02 Consideration. In consideration to the Agency for the conveyance
of the Phase 1 Development Site to the Developers, and as a condition to the
conveyance of the Phase 1 Development Site to the Developers, Heavenly Resort
Properties shall pay to the Agency Two Million Dollars ($2,000,000), plus
Heavenly Valley shall reimburse the Agency for all costs associated with the
acquisition of the Gondola Right-of-Way, including legal fees and any severance
damages or special benefits awarded any property owners as a result of a partial
condemnation of property for the Gondola Right-of-Way. In consideration to the
Agency for the conveyance of the Phase 2 Development Site to the Developers,
ASCRP shall deposit into Escrow of a grant deed conveying to the Agency any
right, title or interest ASCRP has in the Lake Tahoe Inn Site. In addition, in
consideration of the conveyance of the Paul Kennedy Steakhouse Site to Cecil's
Market, Inc. at the time of conveyance of the Phase 1 Development Site, Cecil's
Market, Inc. shall grant to the Agency the Jovicich Property and waive any
relocation benefits and loss of goodwill associated with Agency acquisition of
the Jovicich Property. In consideration of the conveyance of Parcel 1 to Cecil's
Market, Inc. at the time of conveyance of the Phase 2 Development Site, Cecil's
Market, Inc. shall convey to the Agency the Paul Kennedy Steakhouse Site and
waive any relocation and loss of goodwill associated with the Agency's
acquisition of the Paul Kennedy Steakhouse Site from Cecil's Market, Inc..
7.03 Orders of Possession. If the Agency has not obtained fee title to
any portion of the Development Site at the time set forth for conveyance to the
Developers herein, but has obtained a judicial order for its possession, the
Agency may deposit a copy of the order into Escrow, as an interim alternative to
acquiring title and depositing the deed for such parcel into Escrow. Provided
the conditions set forth in Section 7.05 have been satisfied, the Escrow for
that parcel shall close within thirty (30) days following the date the Agency
obtains possession of the parcel. At the close of the Escrow the Agency shall
convey its right of possession to Developers by instrument reasonably acceptable
to the Agency and Developers. Following the deposit of such an order into
Escrow, the Agency shall diligently proceed with its eminent domain action until
a final judgment is rendered or settlement reached. Provided the final judgment
results in the Agency obtaining fee title to the parcel, the Agency thereafter
shall forthwith deposit the Grant Deed (or such other instrument as is ordered
by the court) for such parcel into Escrow. In the event there is any additional
title insurance premium costs associated with conveyance of property subject to
an order of possession the Agency shall bear the additional premium.
7.04 Closing Condition. The Agency shall not be required to convey to
the Developers any portion of the Development Site if a Developer's Default has
occurred and is continuing.
7.05 Closing Event. At each closing, the Parties shall undertake to do
or cause the following:
(a) Conveyance. Except as provided in Section 7.03, the Agency shall
convey the Development Site in question to the Developers by Grant Deed, the
form of which is attached hereto as Exhibit H, or by instrument reasonably
acceptable to the Agency and Developers.
(b) Agreement. The Parties shall execute and deliver such documents as
are necessary to make the Development Site subject to this Agreement.
7.06 Condition of Title. The Agency shall convey each portion of the
Development Site to the Developers free of all liens, encumbrances, clouds,
conditions, and rights of occupancy and possession except:
(a) applicable building and zoning laws and regulations;
(b) the provisions of the Agency Grant Deed;
(c) the provisions of this Agreement;
(d) the provisions of the Redevelopment Plan; and
(e) such other encumbrances as approved by the Developers.
7.07 Condition of the Property.
(a) "As Is" Conveyance. The Agency shall convey the Development Site
to the Developers free of improvements, including subsurface improvements. In
addition the Agency shall have completed any hazardous materials remediation
recommended in the environmental site assessments as set forth in Sections
5.01(c) and 5.02(c) and shall have completed demolition of existing structures
as provided for in Section 5.01(d) and 5.02(e). Except as provided for in
Sections 5.01(c), 5.02(c), 5.01(d) and 5.02(e) the Agency shall have no
responsibility for the suitability of the Development Site or portions thereof
for the development of the Project, and if the conditions of the Development
Site or portions thereof are not entirely suitable for the development of the
Development, then the Developers shall put the Development Site in a condition
suitable for the improvements to be constructed. Except as provided for in
Section 5.01(c) and 5.02(c) the Developers waive any right of reimbursement or
indemnification from the Agency for the Developers' costs related to any
physical conditions on the Development Site unless such condition was known to
Agency and not disclosed to the Developers and such condition was not readily
discoverable by the Developers upon reasonable inspection of the Development
Site. This waiver shall survive termination of this Agreement.
(b) Disclosure. In anticipation of acquiring the Development Site and
in fulfillment of the requirements of Health and Safety Code Section 25359.7(a),
the Agency has no knowledge of any hazardous materials or substances in or on
the Development Site other than the information to be provided by the Agency to
the Developers in the environmental assessments to be prepared by the Agency
pursuant to Section 5.01(c) and 5.02(c), which reports shall be attached to this
Agreement as Exhibit I when completed. In compliance with California Civil Code
Section 1102.6c, the Agency shall provide the Developers with a natural hazard
disclosure statement prior to the close of Escrow, which disclosure shall be
attached to this Agreement as Exhibit I when completed.
(c) Costs of Escrow and Closing. The Agency shall pay the premium for
a CLTA Owners Policy of insurance. The Developers shall pay the costs of any
endorsements requested by any Developer. All other costs of Escrow (including,
without limitation, any Escrow Holder's fee, costs of title company document
preparation, recording fees, and transfer tax) shall be divided evenly between
the Developers and the Agency.
7.08 Real Estate Commissions. Neither party has obtained or engaged
the services of a real estate broker in this transaction. If a real estate
commission is claimed through either Party in connection with the transaction
contemplated by this Agreement, then the Party through whom the commission is
claimed shall indemnify, defend and hold the other Party harmless from any
liability related to such commission. The provisions of this section shall
survive termination of this Agreement.
7.09 Transfer of Units of Use. Upon transfer of the Phase 1
Development Site to the Developers, the Agency shall also transfer to Heavenly
Resort Properties a maximum of 294 TAUs, 43,712 square feet of CFA and the Sewer
Units the Agency acquired when the Agency acquired the Phase 1 Development Site.
Upon the transfer of the Phase 2 Development Site to the Developers, the Agency
shall also transfer to ASCRP a maximum of 456 TAUs, 8,154 square feet of CFA and
the Sewer Units the Agency acquired when the Agency acquired the Phase 2
Development Site, and 15,990 CFA to Cecil's Market, Inc.. In the event the
Developers do not require the full number of TAUs set forth above to develop the
Project in accordance with approved plans and permits, the number of TAUs to be
transferred by the Agency shall be reduced to the number actually required and
any unneeded TAUs shall be retained by the Agency. With respect to each Phase,
the Agency shall transfer the Sewer Units to the Developers at no cost to the
Developers; provided, however, if the STPUD charges any fees for the transfer of
the Sewer Units, the Developers shall be responsible for the payment of any such
fees. The Agency shall cooperate with the Developers in all efforts to minimize
or eliminate any fees associated with the transfer of Sewer Units.
(f) In addition to the CFA to be transferred above, the City shall
transfer to Heavenly Resort Properties 20,000 square feet of CFA, which square
footage is made available in accordance with the Stateline-Ski Run Community
Plan. The City shall also transfer whatever portion of the TRPA Special Projects
Allocation of CFA is not used by the TCP Parcel, which such balance shall at a
minimum be 4,462 square feet of CFA.
(g) Notwithstanding the above, the Agency may desire to substitute
Residential Units that they own for TAUs that are required in accordance with
the Financial Plan and the Motel Room Retirement Schedule. Residential Units may
be substituted for TAUs on a one-for-one basis, subject to the approval of TRPA
and any other governing agencies.
ARTICLE 8. CONSTRUCTION
8.01 Commencement of Construction. The Developers shall commence or
cause to be commenced construction of Phase 1 of the Project within thirty (30)
days of Close of Escrow for the Phase 1 Development Site; provided, however, if
Escrow for the Phase 1 Development Site does not close prior to July 1, 2000, as
a result of delays that are not within the control of the Developers, the
Developers may delay commencement of construction until the year 2001 building
season without being in default of this Agreement. If the delay in Close of
Escrow is a result of failure of the Agency to meet the conditions to conveyance
that the Agency is responsible for, then costs incurred by the Developers as a
result of the delay, including but not limited to interest on any letters of
credit, shall be paid by the Agency.. If Escrow for the Phase 1 Development Site
closes on or before June 30, 2000 and the Developers fail to start construction
of the portions of Phase 1 to be constructed by the Developers on or before
September 30, 2000, the Developers shall pay to the Agency any interest owed on
the BANS from the date the Agency notifies Developers that all conditions to
conveyance of the Phase 1 Development Site have been satisfied or waived until
the Developers commence construction of Phase 1. The Developers shall commence
or cause to be commenced construction of Phase 2 of the Project within thirty
(30) days of the close of Escrow for the Phase 2 Development Site. Commencement
of construction for purposes of this Section shall mean excavation of the
Development Site.
8.02 Completion of Construction. The Developers shall diligently
prosecute or cause to be prosecuted to completion the construction of each Phase
of the Project, and shall complete or cause to be completed the construction of
each Phase of the Project no later than the time specified in the Schedule of
Performance. In the event ASCRP and Heavenly Resort Properties fail to complete
construction of each Phase of the Project within the time specified in the
Schedule of Performance for completion of construction and such failure is not
the result of the Agency failing to convey each Phase Development Site to the
Developers in a timely fashion, ASCRP and/or Heavenly Resort Properties, as
applicable, shall pay to the Agency the daily interest cost incurred by the
Agency on the BANS for each day that construction continues after the date of
completion set forth in the Schedule of Performance.
8.03 Construction Pursuant to Plans.
(a) The Developers shall construct, or cause to be constructed, each
Phase of the Project substantially in accordance with the Final Construction
Plans, the Project Permits, the Use Permit and the terms and conditions of all
City and other governmental approvals.
(b) The Developers shall submit or cause to be submitted for Agency
approval any proposed change in the Final Construction Plans which materially
changes any portion of the Project and which would require an amendment to any
approval or permits obtained from the City or other governmental agencies. The
Agency shall approve or disapprove a proposed change within fifteen (15) days
after receipt by the Agency. Failure to approve or disapprove within fifteen
(15) days shall be deemed to be approval of such change. If the Agency rejects
the proposed change, then the Agency shall provide the Developers with the
specific reasons therefor, in writing, and the approved Final Construction Plans
shall continue to control.
(c) No change which is required for compliance with building codes or
other government health and safety regulation shall be deemed material. However,
the Developers must submit or cause to be submitted to the Agency, in writing,
any change that is required for such compliance within ten (10) days after
making such change, and such change shall become a part of the approved Final
Construction Plans, binding on the Developers.
8.04 Compliance with Applicable Law. The Developers shall cause all
work performed in connection with the Property to be performed in compliance
with (a) all applicable laws, ordinances, rules and regulations of federal,
state, county or municipal governments or agencies now in force or that may be
enacted hereafter (including, without limitation, the prevailing wage provisions
of Sections 1770 et seq. of the California Labor Code, but only to the extent
applicable), and (b) all directions, rules and regulations of any fire marshal,
health officer, building inspector, or other officer of every governmental
agency now having or hereafter acquiring jurisdiction. The work shall proceed
only after procurement of each permit, license, or other authorization that may
be required by any governmental agency having jurisdiction, and the Developers
shall be responsible to the Agency for the procurement and maintenance thereof,
as may be required of the Developers and all entities engaged in work on the
Development Site.
8.05 Non-Discrimination During Construction; Equal Opportunity. The
Developers, for themselves and their successors, assigns, and transferees agree
that in the construction of the Project provided for in this Agreement:
(a) They will not discriminate against any employee or applicant for
employment because of race, color, religion, creed, national origin, ancestry,
disability, medical condition, age, marital status, sex, sexual
preference/orientation, Acquired Immune Deficiency Syndrome (AIDS) acquired or
perceived, or retaliation for having filed a discrimination complaint
(nondiscrimination factors). The Developers will take affirmative action to
ensure that applicants are employed, and that employees are treated without
regard to the nondiscrimination factors during employment including, but not
limited to, activities of upgrading, demotion or transfer; recruitment or
recruitment advertising, layoff or termination; rates of pay or other forms of
compensation; and selection for training, including apprenticeship. The
Developers agree to post in conspicuous places, available to employees and
applicants for employment, the applicable nondiscrimination clause set forth
herein:
(b) They will ensure that its solicitations or advertisements for
employment are in compliance with the aforementioned nondiscrimination factors;
and
(c) They will cause the foregoing provisions to be inserted in all
contracts for the construction of the Project entered into after the effective
date of this Agreement; provided, however, that the foregoing provisions shall
not apply to contracts or subcontracts for standard commercial supplies or raw
materials.
8.06 Preference for Local Labor. The Developers recognize the
importance of local labor having an opportunity, based on merit, to be involved
in the Project. The Developers shall, in letting bids for the construction of
improvements under this Agreement, require their General Contractor(s) to
provide reasonable notice to and, in response thereto, receive bids from, any
local contractors and/or subcontractors qualified to bid as subcontractors on
such construction. In order to be considered by the General Contractor(s) to be
a subcontractor on the Project, each such bid shall be submitted in compliance
with the requirements of the General Contractor(s) which are consistently
applied to all bidders. General Contractor(s) shall create a program providing
for notice of work and opportunity to bid as set forth in this Section 8.06 and
the means of documenting the effectiveness of the process in ensuring work for
qualified local labor. For these purposes, local labor shall be defined as
persons whose residence is within the portions of Douglas and El Dorado Counties
that are within the Tahoe Basin. If no bids are received from local contractors,
this requirement does not apply and the contract may be awarded without
reference to this Section 8.06; provided, however, on work where there is no
local bidder, the Developers shall document their attempts to solicit local
contractors and shall provide such documentation to the Agency upon request.
Notwithstanding the above, the Developers shall not be required to require the
General Contractor(s) and the General Contractor(s) shall not be required to
require its subcontractors or suppliers to hire local labor if either the
General Contractor(s) or its subcontractors or suppliers determines that, in any
such instance, such local labor either is unavailable, unqualified, would
increase the cost of or slow down the progress of construction of the Project or
would otherwise adversely affect the Project. The Developers shall have complied
with this provision if the Developers use commercially reasonable efforts to
achieve the objective outlined herein.
8.07 Supplies and Materials. In securing supplies and materials for
use on the Project, the Developers agree to direct their General Contractor(s),
to the extent commercially practicable, to utilize local sources of supplies;
provided, however, that their General Contractor(s) is not thereby required (i)
to contract with local suppliers at a higher price than is available elsewhere;
(ii) to use multiple suppliers (because local suppliers are not able to supply
all supplies necessary with respect to any particular scope of work); (iii) to
use local suppliers if the provisions of such supplies by the local suppliers
would slow the progress of or otherwise adversely affect the Project; or (iv) to
refrain from entering into a subcontract with the most qualified subcontractor
in the business judgment of the General Contractor(s) where such qualified
subcontractor is not procuring its supplies from local suppliers. The Developers
shall have complied with this provision if Developers use their commercially
reasonable efforts to achieve the objectives outlined herein.
8.08 Certificate of Completion. When the Agency has determined that
the obligations of the Developers under this Article 8 have been met with
respect to any Phase of the Project, the Developers may request that the Agency
issue a certificate to such effect (a "Certificate of Completion"), which the
Agency shall execute and deliver within thirty (30) days of such a request. Such
certification shall not be deemed a notice of completion under the California
Civil Code, nor shall it constitute evidence of compliance with or satisfaction
of any obligation of the Developers to any holder of a deed of trust securing
money loaned to finance the Project. If the Developers request issuance of a
Certificate of Completion but the Agency refuses, then the Agency shall provide
the Developers with a written explanation of its refusal within thirty (30) days
of the Developers' initial request. A Certificate of Completion may be
requested, and if the requirements hereof with respect to such Phase have been
met, issued for one or more Phase of the Project.
8.09 Progress Reports. Until such time as the Developers are entitled
to issuance of a Certificate of Completion, the Developers shall provide the
Agency with progress reports regarding the status of the construction of the
Development, including reports on the number of local contractors and local
laborers working on the Project and reports on the sources of supplies and
materials used in the construction of the Project.
8.10 Entry by the Agency. The Developers shall permit the Agency,
through its officers, agents, or employees, to enter the Property at all
reasonable times and in a safe, unobtrusive manner to review the work of
construction to determine that such work is in conformity with the approved
Final Construction Plans or to inspect the Property for compliance with this
Agreement. The Developers and the Agency shall schedule regular inspections to
the extent reasonable once interior finishing work commences for the Agency to
insure that the interior finishes conform to the approved Final Construction
Plans. The Agency is under no obligation to (a) supervise construction, (b)
inspect the Property, or (c) inform the Developers of information obtained by
the Agency during any review or inspection, and the Developers shall not rely
upon the Agency for any supervision, inspection, or information.
8.11 Taxes. At all times the Developers shall pay when due all real
property taxes and assessments assessed and levied on the Development Site after
the Developers take title to the Development Site or portions thereof and shall
remove any levy or attachment made on the Development Site. The Developers may,
however, contest the validity or amount of any tax, assessment, or lien on the
Development Site; provided, however, prior to contesting any tax or lien the
Developers shall meet and confer with the City and the Agency, and provided
further the Developers will not contest any assessment on the Development Site
that is less than or equal to the assessments shown on the Financial Plan.
8.12 Insurance Requirements.
(a) Required Coverage. ASCRP, Heavenly Resort Properties, Heavenly
Valley, TSI and Cecil's Market, Inc. shall maintain or cause to be maintained
and keep in force, at no cost to the Agency, the following insurance applicable
to the Project at all times prior to the issuance of a Certificate of Completion
by the Agency, or if Certificates of Completion are issued for each Phase, until
a Certificate of Completion has been issued for each Phase:
(1) Worker's Compensation insurance, including Employer's Liability
coverage, with limits not less than $1,000,000 each accident, if such insurance
is required by law.
(2)Comprehensive General Liability insurance with limits not less than
$2,000,000 each occurrence combined single limit for Bodily Injury and Property
Damage, including coverages for Contractual Liability, Personal Injury,
Broadform Property Damage, Products and Completed Operations.
(3) Comprehensive Automobile Liability insurance with limits not less
than $1,000,000 each occurrence combined single limit for Bodily Injury and
Property Damage, including coverages for owned, non-owned and hired vehicles, as
applicable; provided, however, that if the Developers do not own or lease
vehicles for purposes of this Agreement, then no automobile insurance shall be
required.
(4) Property insurance covering the Project covering all risks of loss
including earthquake (but only if it is commercially available at a reasonable
price and with a reasonable deductible, which the Parties acknowledge is not
available as of the date of the execution of this Agreement) and flood if the
Development Site is in a FEMA designated flood zone, for 100% of the replacement
value, with deductible not exceeding $50,000, and prior to the issuance of a
Certificate of Completion, naming the Agency as a Loss Payee, as its interest
may appear.
(b) Contractor's Insurance. ASCRP, Heavenly Resort Properties,
Heavenly Valley, TSI and Cecil's Market, Inc. shall each cause any general
contractor working on the Project under direct contract with the applicable
Developer to maintain insurance of the types and in at least the minimum amounts
described in subsections (a)(l), (a)(2), and (a)(3) above, and shall require
that such insurance shall meet all of the general requirements of subsection (c)
below. Each Developer shall require its contractor to require that
subcontractors working on the Project under direct contract with the contractor
maintain the insurance described in subsections (a)(1), (a)(2) and (a)(3) above;
provided that subcontractors with subcontracts under $250,000 which do not
involve a significant risk of bodily injury or property damage shall be
permitted to maintain insurance with limits of $500,000.
(c) Other Insurance Provisions. The general liability policies carried
by each Developer are to contain, or be endorsed to contain, the following
provisions and each of the Developers shall use its reasonable efforts to cause
the general liability and automobile policies carried by the contractor (which
in turn shall cause its subcontractors policies to contain), or be endorsed to
contain, the following provisions:
(1) The Agency, its elected or appointed officials, employees, and
agents are covered as insureds with respect to liability arising out of
automobiles owned, leased, hired or borrowed by each Developer, its contractors
or subcontractors, respectively, and with respect to liability arising out of
work or operations performed including materials, parts or equipment furnished
in connection with such work or operations.
(2) For any claims related to the Project, the Agency insurance
coverage shall be primary insurance as respects to the Agency, its officers,
officials and employees. Any insurance or self-insurance maintained by the
Agency, its officers, officials and employees shall be excess of the insurance
and shall not contribute to it.
(3) The insurance provided by this policy shall not be suspended,
voided, canceled, reduced in coverage or in limits except after thirty days
written notice has been provided to the Agency.
(4) The Worker's Compensation insurance required above shall also
contain language through which the insurance company agrees to waive all rights
of subrogation against the Agency, its elected or appointed officials, officers,
agents, employees for losses paid under the terms of this policy which arise
from the work performed by each Developer for the Agency.
(d) Acceptability of Insurers. Insurance is to be placed with insurers
with a current Best's rating of no less than A.VII.
(e) Verification of Coverage. Each Developer shall use reasonable
efforts to furnish the Agency with original certificates and amendatory
endorsements effecting coverage required by this clause. All certificates and
endorsements are to be received and approved by the Agency before work
commences.
8.13 Hazardous Materials.
(a) Certain Covenants and Agreements. ASCRP, Heavenly Resort
Properties, Heavenly Valley, TSI and Cecil's Market, Inc. hereby each covenant
and agree that:
(1) They shall not knowingly permit the Project or any portion thereof
to be a site for the use, generation, treatment, manufacture, storage, disposal
or transportation of Hazardous Materials or otherwise knowingly permit the
presence of Hazardous Materials in, on or under the Project;
(2) They shall keep and maintain the Project and each portion thereof
in compliance with, and shall not cause or permit the Project or any portion
thereof to be in violation of, any Hazardous Materials Laws;
(3) Upon receiving actual knowledge of the same they shall immediately
advise the Agency in writing of: (A) any and all enforcement, cleanup, removal
or other governmental or regulatory actions instituted, completed or threatened
against any of the Developers or the Project pursuant to any applicable
Hazardous Materials Laws; (B) any and all claims made or threatened by any third
party against any Developer or the Project relating to damage, contribution,
cost recovery, compensation, loss or injury resulting from any Hazardous
Materials (the matters set forth in the foregoing clause (A) and this clause (B)
are hereinafter referred to as "Hazardous Materials Claims"); (C) the presence
of any Hazardous Materials in, on or under the Project; or (D) their discovery
of any occurrence or condition on any real property adjoining or in the vicinity
of the Project classified as "borderzone property" under the provisions of
California Health and Safety Code, Sections 25220 et seq., or any regulation
adopted in accordance therewith, or to be otherwise subject to any restrictions
on the ownership, occupancy, transferability or use of the Project under any
Hazardous Materials Laws. The Agency shall have the right to join and
participate in, as a party if it so elects, any legal proceedings or actions
initiated in connection with any Hazardous Materials Claims and to have its
reasonable attorney's fees in connection therewith paid by the Developer or
Developers that are a party to any such proceeding or action.
(4) Without the Agency's prior written consent, which shall not be
unreasonably withheld, ASCRP, Heavenly Resort Properties, Heavenly Valley, TSI
and Cecil's Market, Inc. shall not take any remedial action in response to the
presence of any Hazardous Materials on under, or about the Project (other than
in emergency situations or as required by governmental agencies having
jurisdiction), nor enter into any settlement agreement, consent decree or other
compromise in respect to any Hazardous Materials Claims.
(b) Indemnity. Without limiting the generality of the indemnification
set forth in Section 10.04 below, ASCRP, Heavenly Resort Properties, Heavenly
Valley, TSI and Cecil's Market, Inc. hereby agree to indemnify, protect, hold
harmless and defend (by counsel reasonably satisfactory to the Agency) the
Agency, its boardmembers, officers, agents and employees from and against any
and all claims, losses, damages, liabilities, fines, penalties, charges,
administrative and judicial proceedings and orders, judgements, remedial action
requirements; enforcement actions of any kind, and all costs and expenses
incurred in connection therewith (including, but not limited to, attorney's fees
and expenses), arising directly or indirectly, in whole or in part, out of: (1)
the failure of the Developers or any other person or entity to comply with any
Hazardous Materials Law relating in any way whatsoever to the handling,
treatment, presence, removal, storage, decontamination, cleanup, transportation
or disposal of Hazardous Materials into, on, under or from the Project; (2) the
presence in, on or under the Project of any Hazardous Materials or any releases
or discharges of any Hazardous Materials into, on, under or from the Project
that are brought to the Project or released or discharged at the Project after
the Close of Escrow; or (3) any activity carried on or undertaken on or off the
Project, after the Close of Escrow, and whether by the Developers or any
successor in title or any employees, agents, contractors or subcontractors of
the Developers or any successor in title, or any third persons at any time
occupying or present on the Project after Close of Escrow, in connection with
the handling, treatment, removal, storage, decontamination, cleanup, transport
or disposal of any Hazardous Materials at any time located or present on or
under the Project. The foregoing indemnity shall further apply to any
contamination of any property or natural resources arising in connection with
the generation, use, handling, treatment, storage, transport or disposal of any
such Hazardous Materials by any of the Developers or their officer, directors,
employees or agents occurring after the Close of Escrow, and irrespective of
whether any of such activities were or will be undertaken in accordance with
Hazardous Materials Laws. The provisions of this subsection shall survive
expiration of the Term or other termination of this Agreement, and shall remain
in full force and effect. Each of ASCRP, Heavenly Resort Properties, Heavenly
Valley, TSI and Cecil's Market, Inc. indemnification herein shall be limited to
the Project Component each entity is responsible for herein and each Developer's
own actions.
8.14 Non-Discrimination. The Developers covenant by and for themselves
and their successors and assigns that there shall be no discrimination against
or segregation of a person or of a group of persons on account of race, color,
religion, creed, sex, sexual orientation, marital status, ancestry or national
origin in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Development Site, nor shall the Developers or any person
claiming under or through the Developers establish or permit any such practice
or practices of discrimination or segregation with reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sublessees
or vendees in the Development Site.
8.15 Mitigation Monitoring Plan. The Developers shall comply with the
mitigation monitoring plan incorporated in the EIR/EIS and adopted by the Agency
concurrently with its approval of this Agreement as that program may be amended
from time to time.
8.16 Use of Paul Kennedy Steakhouse Site. During construction of Phase
1, Cecil's Market, Inc. shall be entitled to use the Paul Kennedy Steakhouse
Site for retail uses. Cecil's Market, Inc. may also sublet the Paul Kennedy
Steakhouse Site to another party to this Agreement provided the Agency approves
the sublease and the sublease contains provisions acceptable to the Agency
waiving relocation and goodwill benefits upon Agency acquisition of the Paul
Kennedy Steakhouse Site for Phase 2.
8.17 Right of Entry for Parking Garage Site. During the year 2000
building season Heavenly Resort Properties, Heavenly Valley and TSI shall have
the right, at their sole risk and expense, to enter the Parking Garage Site for
the use as a construction staging area provided that Heavenly Resort Properties,
Heavenly Valley and TSI (i) provide reasonable written notice to the Agency and
the City of such contemplated entry; and (ii) indemnify and hold the Agency and
the City harmless from and against all liability, loss, damage, costs or
expenses (including reasonable attorneys' fees and court costs) arising from or
as a result of the death or any person or any accident, injury, loss or damage
whatsoever caused to any person or to the property which shall occur on or
adjacent to the Parking Garage Site and which shall be directly or indirectly
caused by any acts done on the Parking Garage Site or any errors or omissions of
Heavenly Resort Properties, Heavenly Valley or TSI or their agents, servants,
employees or contractors in the course of using the Parking Garage Site (except
that caused by the intentional misconduct or negligence of the Agency or the
City). Any damage or injury to the Parking Garage Site resulting from Heavenly
Resort Properties', Heavenly Valley's or TSI's entry under this Section 8.17
shall be promptly repaired by Heavenly Resort Properties, Heavenly Valley and
TSI at Heavenly Resort Properties', Heavenly Valley's and TSI's sole cost and
expense. In the event Heavenly Resort Properties, Heavenly Valley and/or TSI
fail to promptly repair any such damage, the Agency and the City may do so at
Heavenly Resort Properties', Heavenly Valley's and TSI's expense.
8.18 Public Art Plan. Upon commencement of construction, the Agency
shall prepare, with the Developers approval, a request for proposal to artists
for installation of a major art piece at Park Avenue and Highway 50. Upon
receipt of proposals, the proposals shall be submitted to an Art Jury composed
of six members. Three members shall be appointed by the Developers, by mutual
agreement among the Developers. Three members shall be appointed by the Agency.
The Art Jury shall select a proposal for the public art piece.
ARTICLE 9. CONSTRUCTION
OF THE PUBLIC IMPROVEMENTS
9.01 Construction of the Public Improvements. Within thirty (30) days
of conveyance of the Phase 1 Property to the Developers, the Agency shall
commence construction of the public improvements to be constructed as part of
Phase 1, including the realignment of Park Avenue and shall diligently prosecute
the same to completion; provided, however, the Agency or the City shall not
commence construction of the Parking Garage until the 2001 building season and
only then if the conditions to sale of the Parking Revenue Bonds have been met
as set forth in Section 2.03 above. The Agency and the City shall complete
construction of the Phase 1 Public Improvements within 24 months of commencement
of construction, provided, however if the Agency or the City is to construct the
Parking Garage pursuant to Section 2.03, the Parking Garage shall be ready for
occupancy within 9 months of commencement of constructions, although additional
construction may be required after occupancy. The specific schedule of
completion of the various components of the Public Improvements shall be as set
forth in the Schedule of Performance. The Agency and the Developers shall
coordinate construction schedules to insure that neither party's construction
activities interfere with the other party's.
Within thirty (30) days of conveyance of the Phase 2 Property to ASCRP,
the Agency shall commence construction of the Phase 2 Public Improvements,
including the Intermodal Transit Facility, and shall diligently prosecute the
same to completion. The Agency and the City shall complete construction of the
Phase 2 Public Improvements within 24 months of commencement of construction of
the Phase 2 Public Improvements. The Agency and ASCRP shall coordinate
construction schedules to insure that neither party's construction activities
interfere with the other party's.
The Agency shall diligently prosecute or cause to be prosecuted to
completion the construction of each Phase of the Public Improvements and the
Parking Garage. The Agency shall construct or cause to be constructed each Phase
of the Public Improvements substantially in accordance with the final
construction plans for the Public Improvements and the terms and conditions of
all governmental approvals. The Agency shall consult with the Developers prior
to making any material changes in the construction plans for the Public
Improvements.
9.02 Progress Reports. Until such time as the Public Improvements are
complete, the Agency shall provide the Developers with periodic progress
reports, as reasonably requested in writing by the Developers, regarding the
status of the construction of the Public Improvements.
9.03 Mitigation Monitoring Plan. The Agency shall comply with the
mitigation monitoring plan incorporated in the EIR/EIS and adopted by the Agency
concurrently with its approval of this Agreement as that program may be amended
from time to time.
9.04 Right to Access to Site. The Agency and or the City shall have
the right, at its sole risk and expense, to enter the Development Site for the
purposes of the construction, reconstruction, maintenance, repair or services of
any of the proposed Public Improvements to be located on the Development Site
provided that the Agency and/or the City (i) provide reasonable prior written
notice to the Developers of such contemplated entry and improvements; (ii)
coordinates the construction of such improvements with the Developers'
construction of the Project so as to minimize any additional cost or delay to
the Developers in connection therewith; and (iii) indemnifies and holds the
Developers harmless from and against all liability, loss, damage, costs or
expense (including reasonable attorneys' fees and court costs) arising from or
as a result of the death of any person or any accident, injury, loss or damage
whatsoever caused to any person or to the property of any person which shall
occur on or adjacent to the Development Site and which shall be directly or
indirectly caused by any acts done on the Site by the Agency and/or the City or
any errors or omissions of the Agency and/or the City or their agents, servants,
employees or contractors in the course of performing the obligations of the
Agency and the City under this Agreement (except that caused by the intentional
misconduct or negligence of the Developers). Any damage or injury to the
Development Site resulting from the Agency's or the City's entry under this
Section 9.04 shall be promptly repaired by the Agency or the City at the
Agency's or City's sole cost and expense. In the event the Agency or the City
fails to promptly repair any such damage, the Developers may do so at the
Agency's or City's sole cost and expense.
9.05 Mello-Roos District.
(a) Prior to conveyance of the Phase I Property, Agency will cause to
be formed, and the Developers will facilitate the formation of, a community
facilities district pursuant to the Mello-Roos Community Facilities Act
(California Government Code Section 5334 and following) (the "Mello-Roos
District") to encompass the Phase 1 Property which will levy a Mello-Roos
Special Tax in accordance with this Section 9.05.
(b) Prior to conveyance of the Phase 2 Property, Agency will take such
steps as are necessary to annex the Phase 2 Property to the Mello-Roos
District..
(c) The Mello-Roos Special Tax will not be levied upon the Quarter
Ownership Units which are being held in inventory pending initial sale to third
party purchasers; provided, however, the Mello-Roos Special Tax shall be levied
upon any unsold Quarter Ownership Units which remain unsold four (4) years after
the date construction commences on each Phase.
(d) The amount and components of the Mello-Roos Special Tax shall be
as set forth in the Mello-Roos Rate and Method attached hereto as Exhibit K;
provided, however, the Developers shall not be obligated to accept title to the
Phase 1 Property subject to the Mello-Roos Special Tax if the total amount of
the assessment exceeds Five Million Dollars ($5,000,000) in Mello-Roos Bond
Proceeds plus the option for the Agency to levy an additional Mello-Roos Special
Tax in an amount not to exceed Two Million Dollars ($2,000,000) in Mello-Roos
Bond Proceeds if either of the following occur: (i) Phase 2 is not constructed,
or (ii) at the time the Agency issues long-term bonds to pay off the BANS, the
debt coverage ratio on the bonds is less than 1.25. The Agency shall use its
best efforts to obtain the consent of Tahoe Crescent Partners in the Mello-Roos
District. If the TCP Parcel is included in the Mello-Roos District, its
allocation shall be included in the portion of the Mello-Roos Special Tax
allocated to the retail portions of the Project. Prior to the annexation of the
Phase 2 Development Site to the Mello-Roos District, the full amount of the
Mello-Roos Special Tax shall attach to the Phase 2 Development Site.
(e)The Mello-Roos Special Tax shall be allocated among the project
components as follows prior to the commencement of construction of Phase 2:
Grand Summit Hotel and Annex
(excluding retail space) 60%
Gondola 20%
Retail portion 20%
The Mello-Roos Special Tax shall be allocated among the project
components as follows after commencement of construction of Phase 2 and
annexation of Phase 2 to the Mello-Roos District:
Grand Summit Hotel and Annex
(exclusive of Retail Space) 30%
Lake Tahoe Inn Site 30%
Gondola 20%
Retail portion 20%
(f) The Mello-Roos Bonds shall be issued in the time set forth in the
Schedule of Performance provided the following conditions are met:
(1) There exists no Developer's Default under the Agreement and there
is no default under any other agreement to which the Developers are a party
related to the Project.
(2) The Developers have provided to the Agency financial disclosure
information necessary for the sale of the Mello-Roos Bonds and such disclosure
satisfies the Agency's underwriters.
(3) There is pending litigation, suit, action or proceeding before any
court or administrative agency affecting the Developers or the Project, that
would, if adversely determined, adversely affect the Developers or the Project
or the Developers ability to perform their obligations under this Agreement or
to develop and operate the Project.
(4) The Grand Summit Hotel, the Grand Summit Annex, the Gondola and
the retail space in the Grand Summit are under construction.
(5) No Bankruptcy/Dissolution Event shall have occurred with respect
to any of the Developers.
(6) The conditions set forth in the Financial Plan are satisfied.
(g) The Developers and Heavenly Resort Properties in particular shall
have no liability for the failure of Quarter Owners to pay the Mello-Roos
Special Tax; provided, however, that this provision does not alter the liability
of individual Quarter Owners and of the Association for any failure to pay the
Mello-Roos Special Tax; and provided further, the Developers agree to collect
the first year's Mello-Roos Special Tax from the Quarter Owners at the time the
Developers close escrow on each Quarter Ownership interest and to direct any
escrow holders to pay such amounts to the Agency immediately upon close of each
escrow;
(h) The Mello-Roos Proceeds shall be used exclusively for the Public
Improvements (including property acquisition), payment of the Developer's
obligations to fund Public Art and the Developer's contribution to public
circulation areas owned by the City.
9.06 Hazardous Materials.
(a) Certain Covenants and Agreements. The Agency and the City hereby
covenant and agree that:
(1) They shall not knowingly permit the Parking Garage or any portion
thereof to be a site for the use, generation, treatment, manufacture, storage,
disposal or transportation of Hazardous Materials or otherwise knowingly permit
the presence of Hazardous Materials in, on or under the Parking Garage;
(2) They shall keep and maintain the Parking Garage and each portion
thereof in compliance with, and shall not cause or permit the Parking Garage or
any portion thereof to be in violation of, any Hazardous Materials Laws;
(3) Upon receiving actual knowledge of the same they shall immediately
advise the Developers in writing of: (A) any and all enforcement, cleanup,
removal or other governmental or regulatory actions instituted, completed or
threatened against the Agency or the City related to the Parking Garage pursuant
to any applicable Hazardous Materials Laws; (B) any and all claims made or
threatened by any third party against the Agency or the City related to the
Parking Garage relating to damage, contribution, cost recovery, compensation,
loss or injury resulting from any Hazardous Materials (the matters set forth in
the foregoing clause (A) and this clause (B) are hereinafter referred to as
"Hazardous Materials Claims"); (C) the presence of any Hazardous Materials in,
on or under the Parking Garage; or (D) their discovery of any occurrence or
condition on any real property adjoining or in the vicinity of the Parking
Garage classified as "borderzone property" under the provisions of California
Health and Safety Code, Sections 25220 et seq., or any regulation adopted in
accordance therewith, or to be otherwise subject to any restrictions on the
ownership, occupancy, transferability or use of the Parking Garage under any
Hazardous Materials Laws. The Developers shall have the right to join and
participate in, as a party if they so elect, any legal proceedings or actions
initiated in connection with any Hazardous Materials Claims and to have their
reasonable attorney's fees in connection therewith paid by the Agency and/or the
City.
(4) Without the Developers' prior written consent, which shall not be
unreasonably withheld, the Agency and the City shall not take any remedial
action in response to the presence of any Hazardous Materials on, under, or
about the Parking Garage (other than in emergency situations or as required by
governmental agencies having jurisdiction), nor enter into any settlement
agreement, consent decree, or other compromise in respect to any Hazardous
Materials Claims.
(b) Indemnity. Without limiting the general indemnification set forth
in Section 10.04 below, the Agency and the City hereby agree to indemnify,
protect, hold harmless and defend (by counsel reasonably satisfactory to the
Developers) the Developers, their boardmembers, officers, agents and employees
from and against any and all claims, losses, damages, liabilities, fines,
penalties, charges, administrative and judicial proceedings and orders,
judgements, remedial action requirements, enforcement actions of any kind, and
all costs and expenses incurred in connection therewith (including, but not
limited to, attorney's fees and expenses), arising directly or indirectly, in
whole or in part, out of: (1) the failure of the Agency or any other person or
entity to comply with any Hazardous Materials Law relating in any way whatsoever
to the handling, treatment, presence, removal, storage, decontamination,
cleanup, transportation or disposal of Hazardous Materials into, on, under or
from the Parking Garage; (2) the presence in, on or under the Parking Garage of
any Hazardous Materials or any releases or discharges of any Hazardous Materials
into, on, under or from the Parking Garage; or (3) any activity carried on or
undertaken on or off the Parking Garage and whether by the Agency or the City or
any successor in title or any employees, agents, contractors or subcontractors
of the Agency or the City or any successor in title, or any third persons at any
time occupying or present on the Parking Garage, in connection with the
handling, treatment, removal, storage, decontamination, cleanup, transport or
disposal of any Hazardous Materials at any time located or present on or under
the Parking Garage. The foregoing indemnity shall further apply to any
contamination of any property or natural resources arising in connection with
the generation, use, handling, treatment, storage, transport or disposal of any
such Hazardous Materials by the Agency or the City or their officers, directors,
employees or agents, and irrespective of whether any of such activities were or
will be undertaken in accordance with Hazardous Materials Laws. The provisions
of this subsection shall survive expiration of the Term or other termination of
this Agreement, and shall remain in full force and effect.
ARTICLE 10. OBLIGATIONS WHICH
CONTINUE THROUGH AND BEYOND
THE COMPLETION OF CONSTRUCTION
10.01 Maintenance. The Developers hereby agree that, prior to
completion of any phase of the Project, the portions of the Development Site
undergoing construction shall be maintained in a neat and orderly condition to
the extent practicable and in accordance with industry health and safety
standards, and that, once the Project or any Phase thereof is completed the
Project shall be well maintained as to both external and internal appearance of
the buildings, the common areas, and the parking areas. The Developers shall
maintain or cause to be maintained the Project in good repair and working order,
and in a neat, clean and orderly condition, including the walkways, driveways,
parking areas and landscaping, and from time to time make all necessary and
proper repairs, renewals, and replacements. In the event that there arises at
any time prior to the expiration of the term of the Redevelopment Plan a
condition in contravention of the above maintenance standard, then the Agency
shall notify the Developers in writing of such condition, giving the Developers
thirty (30) days from receipt of such notice to commence and thereafter
diligently to proceed to cure said condition. In the event the Developers fail
to cure or commence to cure the condition within the time allowed, the Agency
shall have the right to perform all acts necessary to cure such a condition. or
to take other recourse at law or equity the Agency may then have and to receive
from the Developers, the Agency's cost in taking such action. The parties hereto
further mutually understand and agree that the rights conferred upon the Agency
expressly include the right to enforce or establish a lien or other encumbrance
against any of the parcels comprising the Development Site not complying with
this Agreement, including without limitation parcels subdivided after the date
of this Agreement but such lien shall be subject to previously recorded liens
and encumbrances. The foregoing provisions shall be a covenant running with the
land until expiration of the term of this Agreement, enforceable by the Agency,
its successors and assigns.
The Agency and/or the City hereby agree that, prior to completion of
the Parking Garage, the portions of the Development Site undergoing construction
shall be maintained in a neat and orderly condition to the extent practicable
and in accordance with industry health and safety standards, and that, once the
Parking Garage is completed the Parking Garage shall be well maintained as to
both external and internal appearance of the buildings and the common areas. In
the event the Agency and the City grant to Heavenly Resort Properties and
Heavenly Valley a right of entry to the Parking Garage Site in order to use the
Parking Garage site for a construction staging area, Heavenly Resort Properties
and Heavenly Valley shall assume the Agency's and City's maintenance obligations
with regards to the Parking Garage during the term of any such right of entry.
The Agency and the City shall maintain or cause to be maintained the Parking
Garage in good repair and working order, and in a neat, clean and orderly
condition, including the walkways, driveways, parking areas and landscaping, and
from time to time make all necessary and proper repairs, renewals, and
replacements. In the event that there arises at any time prior to the expiration
of the term of the Redevelopment Plan a condition in contravention of the above
maintenance standard, then the Developers shall notify the Agency and the City
in writing of such condition, giving the Agency and the City thirty (30) days
from receipt of such notice to commence and thereafter diligently to proceed to
cure said condition. In the event the Agency and/or the City fail to cure or
commence to cure the condition within the time allowed, the Developers shall
have the right to perform all acts necessary to cure such a condition, or to
take other recourse at law or equity the Developers may then have and to receive
from the Agency and the City, the Developers' cost in taking such action. The
parties hereto further mutually understand and agree that the rights conferred
upon the Developers expressly include the right to attach the revenues from the
Parking Garage provided such right shall be subordinate to the lien on the
revenues for the Parking Revenue Bonds.
10.02 Childcare Obligations. The Developers recognize the importance
of childcare to South Lake Tahoe. In order to assure adequate childcare for
employees of the Developers, Heavenly Valley agrees that it will make its
childcare facility currently operated at Heavenly Ski Resort available, on a
space available basis, to employees of the Developers at the applicable rate.
10.03 Mechanics' Liens. The Developers shall indemnify the Agency and
the City and hold the Agency and City harmless against and defend the Agency and
the City in any proceeding related to any mechanic's lien, stop notice or other
claim brought by a subcontractor, laborer or material supplier who alleges
having supplied labor or materials in the course of the construction of the
portions of the Project construction of which the Developer is responsible. This
indemnity obligation shall survive the issuance of a Certificate of Completion
by the Agency and the termination of this Agreement.
10.04 Developers to Indemnify Agency. The Developers shall indemnify,
defend, and hold the Agency and the City, their directors, officers, employees,
agents, and their successors and assigns harmless against all claims for bodily
injury, death or property damage which arise out of or in connection with entry
onto, ownership of, occupancy in, or construction on the Development Site by the
Developers or their contractors, subcontractors, agents, employees or tenants.
This indemnity obligation shall not extend to any claim arising solely from the
Agency's or the City's gross negligence or the Agency's or City's failure to
perform its obligations under this Agreement, and shall survive both the
issuance of a Certificate of Completion by the Agency and termination of this
Agreement. In addition to the above indemnity, Heavenly Resort Properties shall
indemnify the Agency, the City and their directors, officers, employees, agents
and successors and assigns against any claims that may arise as a result of
Heavenly Resort Properties preselling quarter-share interests in the Grand
Summit Hotel, including, but not limited to, any claims of inverse condemnation
or claims from prospective purchasers.
10.05 Agency To Indemnify Developers. The Agency shall indemnify,
defend and hold the Developers and each of them and their directors, officers,
employees, agents, and their successors and assigns harmless against all claims
for bodily injury, death or property damage which arise out of or in connection
with entry onto, ownership Of occupancy in, or construction on the Development
Site by the Agency or its contractors, subcontractors, agents, employees or
tenants. This indemnity obligation shall not extend to any claim arising solely
from a Developer's gross negligence or a Developer's failure to perform its
obligations under this Agreement, and shall survive both the issuance of a
Certificate of Completion by the Agency and termination of this Agreement.
10.06 Non-Discrimination. The Developers covenant by and for
themselves and their successors and assigns that there shall be no
discrimination against or segregation of a person or of a group of persons on
account of race, color, religion, creed, sex, sexual orientation, marital
status, ancestry or national origin in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the Development Site by the Developers, nor
shall the Developers or any person claiming under or through the Developers
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, subleases or vendees of the Development Site.
10.07 Mandatory Language in All Subsequent Deeds Leases and Contracts.
All deeds, leases or contracts entered into by the Developers on or after the
date of execution of this Agreement as to any portion of the Development Site
shall contain the following language:
(a) In Deeds:
"Grantee herein covenants by and for itself its successors and assigns
that there shall be no discrimination against or segregation of a person or of a
group of persons on account of race, color, religion, creed, sex, sexual
orientation, marital status, ancestry or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the property herein
conveyed nor shall the grantee or any person claiming under or through the
grantee establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, subleases or vendees in the property herein
conveyed. The foregoing covenant shall run with the land."
(b) In Leases:
"The lessee herein covenants by and for the lessee and lessee's heirs,
personal representatives and assigns and all persons claiming under the lessee
or through the lessee that his lease is made subject to the condition that there
shall be no discrimination against or segregation of any person or of a group of
persons on account of race, color, religion, creed, sex, sexual orientation,
marital status, ancestry or national origin in the leasing, subleasing,
transferring, use, occupancy, tenure or enjoyment of the land herein leased nor
shall the lessee or any person claiming under or through the lessee establish or
permit any such practice or practices of discrimination or segregation with
reference to the selection, location, number, use or occupancy of tenants,
lessees, subleases, subtenants, or vendees in the land herein leased."
(c) In Contracts:
"There shall be no discrimination against or segregation of any person
or group of persons on account of race, color, religion, creed, sex, sexual
orientation, marital status, ancestry or national origin in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the property nor
shall the transferee or any person claiming under or through the transferee
establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy
of tenants, lessees, subtenants, subleases, or vendees of the land."
10.08 Employment Opportunity. During the operation of the Project,
there shall be no discrimination by the Developers on the basis of race, color,
creed, religion, sex, sexual orientation, marital status, national origin,
ancestry, or handicap in the hiring, firing, promoting, or demoting of any
person engaged in the operation of the Development. To the extent practicable,
preference for employment shall be given to persons residing in the Project
Area.
10.09 Owner Participation. Pursuant to the Agency's rules governing
re-entry preferences for businesses displaced within the Project Area (the
"Participation Rules"), the Developers shall give reasonable preferences (over
other potential tenants or lessees) in the leasing and renting of the Project to
business occupants who were displaced from their place of businesses as a result
of the Project.
10.10 Lift Ticket Sales Within City. The Agency acknowledges that
Heavenly Ski Resort's historic lift ticket sales occur beyond the City limits.
Lift ticket sales have not been subject to tax within the jurisdictions where
the sale of Heavenly lift tickets occurs. In consideration of offering lift
ticket sales within the City limits, the Agency and the City covenant and agree
that the sale of lift tickets within the Redevelopment Project Area shall not be
subject to any City imposed tax or assessment for so long as the Agency has
long-term debt related to the Project outstanding without the consent of
Heavenly Valley, which may be withheld for any reason whatsoever. Upon repayment
of any long term debt associated with the Development, the Agency and the City
may, subject to compliance with normal procedures for imposing taxes, impose a
lift ticket tax without Heavenly Valley's consent.
10.11 Marketing of Quarter Share Intervals. Heavenly Resort
Properties, shall use its best efforts in the marketing and sale of the Quarter
Ownership Units and the rental of the Units to achieve the revenues set forth in
the Financial Plan. Developers agree that any marketing outside the
redevelopment project area shall comply with all applicable regulations, rules
and ordinances. This Section shall not in any way limit the right of Heavenly
Resort Properties to exercise its Reasonable Discretion in connection with
marketing and sales decisions.
10.12 Compliance with Permits. The Developers shall operate the
Project in compliance with any and all permits issued for the Project, at all
times.
10.13 EIR/EIS Reimbursement by Agency. The Agency shall reimburse the
Developers for the Developers' actual expenses related to the preparation of the
EIR/EIS up to an amount of $297,000 as and when Excess Revenues exist; provided,
however, in any single year the Developers shall not receive more than $100,000
in Excess Revenues.
10.14 Parking Garage Operations. The Agency or the City shall operate
the Parking Garage in accordance with the Parking Management Agreement.
10.15 Continuing Disclosure. The Developers shall provide the Agency
with information necessary for the Agency to comply with the continuing
disclosure requirements of the BANS and to refinance all BANS with long-term
debt.
10.16 Ice Rink Operations. Upon completion of construction of Phase 1,
TSI shall be responsible for the operation of the ice rink located on Lot 6. The
ice rink shall operate as an ice rink during the winter season and as a public
plaza and performing arts space during the summer season. TSI cannot change the
use of the Ice Rink without the Agency's consent.
10.17 Retail Operations. Upon completion of construction of Phase 1,
the Developers shall not change the mix of retail tenants or the type of retail
uses in the Project without the Agency's consent. Approval of changes to the mix
or type of retail uses shall be in the Agency's Reasonable Discretion.
10.18 Agency Use of BANS Proceeds, Parking Garage Revenue Bond
Proceeds and Mello-Roos Bond Proceeds. So long as no Developer Event of Default
has occurred, the Agency shall only use the BANS Proceeds, Parking Garage
Revenue Bond Proceeds and Mello-Roos Bond Proceeds for the uses set forth in
this Agreement and such other uses as the Developers may approve.
ARTICLE 11. ASSIGNMENTS AND TRANSFERS
11.01 Definitions. As used in this Article 11, the term "Transfer"
means:
(a) Any total or partial sale, assignment or conveyance, or any trust
or power, or any transfer in any other mode or form, of or with respect to this
Agreement or of the Project or any part thereof or any interest therein or any
contract or agreement to do any of the same excluding any sale of the Quarter
Ownership Units; or
(b) Any sale, assignment or conveyance, or any trust or power, or any
transfer in any other mode or form, of or with respect to a controlling interest
in Developers or any contract or agreement to do any of the same; or
(c) Any merger, consolidation, sale or lease of all or substantially
all of the assets of a Developer; or
(d) The leasing of part or all of the Development Site or the
improvements thereon other than the leasing of retail space at the Development
Site in accordance with the approved Leasing Plan.
11.02 Purpose of Restrictions on Transfer. This Agreement is entered
into solely for the purpose of development and operation of the Project and its
subsequent use in accordance with the terms hereof. The Developers recognize
that the qualifications and identity of Developers are of particular concern to
the Agency, in view of:
(a) The importance of the redevelopment of the Development Site to the
general welfare of the community; and
(b) The land acquisition assistance and other public aids that have
been made available by law and by the government for the purpose of making such
redevelopment possible; and
(c) The reliance by the Agency upon the unique qualifications and
ability of the Developers to serve as the catalyst for development of the
Development Site and upon the continuing interest which the Developers will have
in the Development Site to assure the quality of the use, operation and
maintenance deemed critical by the Agency in the development of the Development
Site; and
(d) The fact that a change in ownership or control of the owner of the
Development Site, or of a substantial part thereof, or any other act or
transaction involving or resulting in a significant change in ownership or with
respect to the identity of the parties in control of the Developers or the
degree thereof is for practical purposes a transfer or disposition of the
Development Site; and
(e) The fact that the Development Site is not to be acquired or used
for speculation, but only for development and operation by the Developers in
accordance with the Agreement; and
(f) The importance to the Agency and the community of the standards of
use, operation and maintenance of the Development Site.
The Developers further recognize that it is because of such
qualifications and identity that the Agency is entering into this Agreement with
the Developers and that Transfers are permitted only as provided in this
Agreement.
11.03 Prohibited Transfers. The limitations on Transfers set forth in
this Section shall apply until a Certificate of Completion is issued for each
Phase of the Project. Except as expressly permitted in this Agreement, the
Developers represent and agree that the Developers have not made or created, and
will not make or create or suffer to be made or created, any Transfer either
voluntarily or by operation of law without the prior written approval of the
Agency which approval shall not be unreasonably withheld.
Any Transfer made in contravention of this Section 11.03 shall be void
and shall be deemed to be a default under this Agreement whether or not the
Developers knew of or participated in such Transfer.
11.04 Permitted Transfers. Notwithstanding the provisions of Section
11.03, the following Transfers shall be permitted and are hereby approved by the
Agency, subject to satisfaction of the requirements of Section 11.05:
(a) Any Transfer creating a Security Financing Interest.
(b) Any Transfer directly resulting from the foreclosure of a Security
Financing Interest or the granting of a deed in lieu of foreclosure of a
Security Financing Interest or as otherwise permitted under Article 13; or
(c) Any Transfer solely and directly resulting from the death or
incapacity of an individual.
(d) The Transfer of 65,500 square feet of commercial space in the
Grand Summit Resort Hotel to TSI.
(e) Any transfer by ASCRP, Heavenly Resort Properties, Heavenly Valley
or TSI, to another wholly-owned subsidiary of the transferring Developer made
for the purpose of facilitating financing, licensing, or other requirements that
will not have an adverse impact on the Redevelopment Plan or this Agreement.
(f) Any transfer of the Lake Tahoe Inn Site, provided the Agency has
approved the Transferee, the Transferee has demonstrated the financial capacity
to complete the development of the Lake Tahoe Inn Site in accordance with this
Agreement, the Transferee has demonstrated experience operating a resort complex
such as that proposed for the Lake Tahoe Inn Site, and the Transferee has
assumed all of the Developer's obligations with respect to the development of
the Lake Tahoe Inn Site.
11.05 Effectuation of Certain Permitted Transfers. No Transfer of this
Agreement permitted pursuant to Section 11.04 (other than a Transfer pursuant to
a Security Financing Interest under Section 11.04(a) or (b)) or Section 11.06
shall be effective unless, at the time of the Transfer, the person or entity to
which such Transfer is made, by an instrument in writing reasonably satisfactory
to the Agency and in form recordable among the land records, shall expressly
assume the obligations of the transferring Developer under this Agreement and
agree to be subject to the conditions and restrictions to which the Developers
are subject under this Agreement, to the fullest extent that such obligations
are applicable to the particular portion of or interest in the Development
conveyed in such Transfer. Anything to the contrary notwithstanding, the holder
of a Security Financing Interest whose interest shall have been acquired by,
through or under a Security Financing Interest or shall have been derived
immediately from any holder thereof shall not be required to give to Agency such
written assumption until such holder or other person is in possession of the
Property or entitled to possession thereof pursuant to enforcement of the
Security Financing Interest.
In the absence of specific written agreement by the Agency, no such
Transfer pursuant to Section 11.04, assignment or approval by the Agency other
than transfers pursuant to Sections 11.04(d), (e) or (f), shall be deemed to
relieve the Developers or any other party from any obligations under this
Agreement.
11.06 Other Transfers with Agency Consent. The Agency may, in its sole
discretion, approve in writing other Transfers as requested by the Developers.
In connection with such request, there shall be submitted to the Agency for
review all instruments and other legal documents proposed to effect any such
Transfer. If a requested Transfer is approved by the Agency such approval shall
be indicated to the Developers in writing. Such approval shall be granted or
denied by the Agency within thirty (30) days of receipt by the Agency of
Developers' request for approval of a Transfer.
ARTICLE 12. REMEDIES
12.01 Application of Remedies. This Article 12 shall govern the
Parties' remedies for breach or failure under this Agreement.
12.02 Consensual Termination. Any of the following events constitutes
a basis for a party to terminate this Agreement without fault of the other:
(a) The Developers, despite good faith and diligent efforts, fail to
submit satisfactory evidence of the availability of finances to the Agency
within the time set forth in Section 2.01(f).
(b) The Agency, despite good faith and diligent efforts, is unable to
cause the issuance of the BANS.
(c) The Agency, the City or the County fails to adopt resolutions of
necessity authorizing the filing of an eminent domain action to acquire any of
the Development Site that the Agency is unable to acquire voluntarily.
12.03 Effect of Consensual Termination. After a termination pursuant
to Section 12.02, the Developers shall be solely responsible for any costs
incurred by the Developers in performing the terms and conditions of this
Agreement, and neither party shall have any rights against or liability to the
other except for those provisions of this Agreement that recite that they
survive termination of this Agreement.
12.04 Agency and City Performance.
(a) Except as to events constituting a basis for termination under
Section 12.02, the breach by the Agency or the City of any material provision of
this Agreement if uncured after expiration of applicable cure periods, shall
constitute an "Agency Event of Default."
(b) Upon the breach of any material provision of this Agreement by the
Agency or the City, the Developers or any one of them shall first notify the
Agency or the City in writing of its purported breach or failure, and the Agency
or the City shall have thirty (30) days from receipt of such notice to cure such
breach or failure except if by the nature of such default more than thirty (30)
days is needed to cure such breach or failure, in which event, the Agency or the
City shall not be in default if such cure is commenced within thirty (30) days
and diligently prosecuted to completion in all events within one hundred eighty
(180) days thereafter. If the Agency or the City does not cure within such
period, then the event shall constitute an "Agency Event of Default" and the
Developers shall be entitled to any rights afforded them in law or in equity.
Prior to the Developers declaring a Agency Event of Default, the Developers
shall provide the Agency or the City with a notice of their intention to declare
an Agency Event of Default and shall schedule a meet and confer meeting no
earlier than seven (7) or later than ten (10) days from the date of receipt of
said notice. The Parties shall meet and confer in good faith for a period of ten
(10) days in a process that may include other persons or agencies, for the
purpose of attempting to resolve any dispute before the declaration of an Event
of Default. If the Parties are unable to resolve the dispute, the Developers
shall be entitled to declare an Agency Event of Default and shall be entitled to
exercise any rights afforded it in law and equity.
12.05 Developer Performance.
(a) Except as to events constituting a basis for termination under
Section 12.02, each of the following events, if uncured after expiration of the
applicable cure period, shall constitute a "Developer's Default":
(1) The Developers or any one of the Developers do not attempt
diligently and in good faith to cause satisfaction of all conditions in Article
6.
(2) Heavenly Resort Properties fails to deliver performance and
payment bonds on or before April 28, 2000.
(3) The Developers or any one of the Developers fails to acquire
either the Phase 1 Development Site or the Phase 2 Development Site from the
Agency despite the Agency's fulfillment of all conditions precedent to the
transfer of the Development Site.
(4) ASCRP fails to give the Agency a notice of intent to construct
Phase 2 on or before September 1, 2001.
(5) ASCRP fails to give the Agency a Notice of intent to construct
Phase 2 on or before September 1, 2002
(6) The Developers or any one of them fails to construct the Project
in the manner and by the deadline set forth in Article 8.
(7)The Developers or any one of them fails to construct the Project in
the manner and by the deadline set forth in Article 8.
(8) The Developers or any one of them completes a Transfer except as
permitted under Article 11.
(9) The Developers or any one of them breaches any other material
provision of this Agreement.
(10)A Bankruptcy/Dissolution Event occurs with respect to any
Developer.
(b) Upon the happening of any event described in Section 12.05(a);
except for 12.05(a)(2) and 12.05(a)(4), the Agency shall first notify each of
the Developers in writing of the purported breach or failure, and the defaulting
Developer shall have thirty (30) days from receipt of such notice to cure such
breach or failure except if by the nature of such default more than thirty (30)
days is needed to cure such breach or failure, in which event, the defaulting
Developer shall not be in default if such cure is commenced within thirty (30)
days and diligently prosecuted to completion within one hundred eighty (180)
days of receipt of notice. If the defaulting Developer does not cure within such
period, a nondefaulting Developer may cure such breach or failure within sixty
(60) days of receipt of the notice of default. If the defaulting Developer or a
non-defaulting Developer does not cure within such period, then the event shall
constitute a "Developer Event of Default." If the defaulting Developer or a
non-defaulting Developer does not cure within the period set forth above the
Agency shall be entitled to exercise any rights and remedies permitted by law,
including, but not limited to terminating this Agreement and including those
rights set forth in Section 12.06 below. Prior to the Agency declaring a
Developer Event of Default, the Agency shall provide the Developers with a
notice of its intention to declare a Developer Event of Default and shall
schedule a meet and confer meeting no earlier than seven (7) or later than ten
(10) days from the date of receipt of said notice. The Parties shall meet and
confer in good faith for a period of ten (10) days in a process that may include
other persons or agencies, for the purpose of attempting to resolve any dispute
before the declaration of an Event of Default. If the Parties are unable to
resolve the dispute, the Agency shall be entitled to declare a Developer Event
of Default and shall be entitled to exercise any rights afforded it in law and
equity. Upon the happening of the event described in Section 12.05(a)(2) the
Agency shall be entitled to immediately draw on the letter of credit pursuant to
Section 2.01(b). Upon the happening of the event described in Section
12.05(a)(4), if ASCRP posts a letter of credit in the amount of $1,663,000 as
set forth in Section 3.01(e), the Agency shall not be entitled to declare an
Event of Default and this Agreement shall continue in full force and effect.
If the Agency terminates this Agreement pursuant to this Section 12.05
in addition to any other remedies the Agency may have, the Agency shall be
entitled to all plans, permits and approvals obtained or prepared by the
breaching Developer in connection with the Project and all applications for
permits and approvals not yet obtained but needed in connection with the Project
to the extent then prepared. In addition, if applicable, the breaching
Developers shall assign to the Agency any pre-sale subscription agreements the
breaching Developers have entered into for the sale of the Quarter Ownership
Units. Agency shall be entitled, pursuant to this Section 12.05 to assign such
permits, plans and approvals and the presale subscription agreements to a new
developer. Any such reuse will be at sole risk of such new developer and without
liability or legal exposure to the Developers or the Developers' architect, and
any use by such new developer or any sale of such materials to any such third
party shall be conditioned upon such new developer's and such third party's
agreement to indemnify and hold harmless the Developers and the Developers'
architect against any loss, cost, damage or expense incurred by such third party
in connection with its use of such materials.
12.06 Right of Reverter.
(a) In the event that, following Close of Escrow on Phase 1 or Phase
2, this Agreement is terminated pursuant to Section 12.05 and such termination
occurs prior to issuance of a Certificate of Completion for any Phase of the
Project the Agency shall have the right subject to the provisions of Article 13
below, to re-enter and take possession of those portions of the Development Site
for which a Certificate of Completion has not been issued and all improvements
thereon and to revest in the Agency the estate of the Developers in the
Development Site or such portion thereof, provided, however, if the Agency
terminates this Agreement with respect to only some of the Developers and this
Agreement remains in effect with respect to other Developers, the Agency can
only exercise the right of reverter granted hereto with respect to property
conveyed to the Developers subject to termination of this Agreement.
(b)Upon revesting in the Agency of title to the Development Site, or
portion thereof, the Agency shall promptly use its best efforts to resell it
consistent with its obligations under state law; provided, however, in order to
encourage Heavenly Valley to build the Gondola, the Agency shall not sell or
attempt to develop the Gondola Site for a period of four years after a Developer
Event of Default has occurred with respect to Heavenly Valley, during which time
Heavenly Valley may continue its efforts to develop the Gondola. Upon any sale
or contract for development the proceeds shall be applied as follows:
(1) First, to reimburse the holder of any Security Financing Interest
of such portion or portions of the Development Site, in the manner set forth in
Section 13.04(a) through (e) hereof.
(2) Second, to the Agency for any costs it reasonably incurs in
acquiring, managing or selling the Development Site or portion thereof (after
exercising its right of reverter), including but not limited to amounts to
discharge or prevent liens or encumbrances arising from any acts or omissions of
the Developers;
(3) Third, in the event that the portion of the Development Site was
controlled by a defaulting Developer, to reimburse the Agency for damages to
which it is entitled under this Agreement by reason of the Developer Event of
Default;
(4) Fourth, to the affected Developer up to the sum of the amount of
the purchase price paid to the Agency by the Developer pursuant to Section 7.02
for the portion of the Development Site which has reverted to the Agency as well
as the amount of the purchase price paid by the Developer for the Lake Tahoe Inn
leasehold if the title to the Lake Tahoe Inn Site revests in the Agency and the
reasonable cost of the improvements the Developer has placed on such portion of
the Development Site and such other reasonable costs Developer has incurred
directly in connection with acquisition and development of the Development Site
and any other portions of the Development Site reclaimed hereunder; and
(5) Fifth, the remaining balance to the Agency.
(c) Upon request from the Developers, the Agency shall enter into
Attornment and Nondisturbance Agreements with the Developers' tenants providing
that in the event the Agency exercises its right of reverter, the tenants'
leases will remain in full force and effect.
12.07 Survival. Upon termination of this Agreement under this Article
12, the following provisions of this Agreement shall survive: the
indemnification obligations in Sections 5.01(c), 5.02(c), 8.13, 10.04, and
10.05. This Section 12.07 exists for reference purposes only, and does not alter
the scope or nature of the surviving provisions.
12.08 Modification of Terms and Conditions and Extensions of Time. The
Agency's Executive Director with the approval of the Agency Chair and the Agency
Vice-Chair, may agree to modification of the development schedule set forth in
the Schedule of Performance as long as such modifications do not alter the
Financial Plan. The Agency may delegate the approval of waivers or modifications
as appropriate. No waiver of any default or breach by the Developers or the
Agency or the City, as applicable, hereunder shall be implied from any omission
by the Agency, the City or the Developers, as applicable, to take action on
account of such default if such default persists or is repeated, and no express
waiver shall affect any default other than the default specified in the waiver,
and such waiver shall be operative only for the time and to the extent therein
stated. Waivers of any covenant, term, or condition contained herein shall not
be construed as a waiver of any subsequent breach of the same covenant, term, or
condition. The consent or approval by the Agency and the City to or of any act
by the Developers requiring further consent or approval shall not be deemed to
waive or render unnecessary the consent or approval to or of any subsequent
similar act. The exercise of any right, power, or remedy shall in no event
constitute a cure or a waiver of any default under this Agreement, nor shall it
invalidate any act done pursuant to notice of default, or prejudice the Agency
or the City in the exercise of any right, power, or remedy hereunder, unless in
the exercise of any such right, power, or remedy all obligations of the
Developers to Agency and the City are paid and discharged in full.
12.09 Scope of Termination Rights. Notwithstanding anything to the
contrary contained herein, (a) no Developer's Default with respect to any Phase
2 obligations shall trigger rights of the Agency under this Article 12 with
respect to any Phase 1 Projects; and (b) with respect to any Developer's Default
which occurs after the conveyance of any portion of the Development Site to the
Developers and cure of the default requires possession of the portion of the
Development Site owned by the defaulting Developer, any nondefaulting Developer
shall not be obligated to cure the default, and any remedies exercised by the
Agency shall only be enforced against the defaulting Developer and, in the case
of either (a) or (b), this Agreement shall continue in full force and effect
with respect to the nondefaulting Developers.
ARTICLE 13. SECURITY FINANCING
AND RIGHTS OF HOLDERS
13.01 No Encumbrances Except for Development Purposes. Notwithstanding
any other provision of this Agreement, mortgages and deeds of trust, or any
other reasonable method of security, are permitted to be placed upon the
Development Site prior to issuance of a Certificate of Completion but only for
the purpose of securing loans pursuant to the evidence of financing approved by
the Agency pursuant to Section 2.01(f) above. Mortgages, deeds of trust, or
other reasonable security instruments securing loans approved by the Agency
pursuant to Section 2.01(f) are each referred to as a "Security Financing
Interest." The words "mortgage" and "deed of trust" as used in this Agreement
include all other appropriate modes of financing real estate acquisition,
construction, and land development, including any such other modes used pursuant
to the approved evidence of financing pursuant to Section 2.01(f).
13.02 Holder Not Obligated to Construct. The holder of any Security
Financing Interest (a "Holder") authorized by this Agreement is not obligated to
construct or complete any improvements or to guarantee such construction or
completion; nor shall any covenant or any other provision in this Agreement or
in conveyances from the Agency to the Developers evidencing the realty
comprising the Development Site or any part thereof be construed so to obligate
such Holder. Any Holder which succeeds to the interest of a Developer through
sale, foreclosure or deed and assignment in lieu thereof occurring following
issuance of a Certificate of Completion for the Project shall not be deemed to
be the successor in interest to the Developer with respect to any obligation or
liability of the Developer under this Agreement. However, nothing in this
Agreement shall be deemed to permit or authorize any such Holder to devote the
Development Site or any portion thereof to any uses, or to construct any
improvements thereon, other than those uses or improvements provided for or
authorized by this Agreement.
13.03 Notice of Default and Right to Cure. Whenever the Agency
pursuant to its rights set forth in Article 12 of this Agreement delivers any
notice or demand to the Developers (or any of them), the Agency shall at the
same time deliver to each Holder of record a copy of such notice or demand;
provided, however, that the Agency shall have no liability to any Holder for any
failure by the Agency to provide notice to such Holder (provided further that
the Agency shall not be entitled to exercise its rights under Section 12.06
hereof until such notice has been delivered and the cure period set forth in the
following sentence has expired). Each such Holder shall (insofar as the rights
of the Agency are concerned) have the right, but not the obligation, at its
option, within the same time period as is afforded Developers plus the greater
of ninety (90) days or such longer period as reasonably may be necessary for the
Holder to obtain the right of possession through foreclosure, deed-in-lieu or
appointment of a receiver provided that within such ninety (90)-day period the
Holder commences and thereafter proceeds in good faith to obtain the right of
possession and to cure or remedy or commence to cure or remedy any such default
or breach. Nothing contained in this Agreement shall be deemed to permit or
authorize such Holder to undertake or continue the construction or completion of
the Project (beyond the extent necessary to conserve or protect the Project or
construction already made) without first having expressly assumed in writing the
obligations of the Developer responsible for the Project to complete, in the
manner provided in this Agreement, the Phase of the Project to which the lien or
title of such Holder relates. Any such Holder properly completing such Phase of
the Project pursuant to this paragraph shall be entitled, upon written request
made to the Agency, to a Certificate of Completion from the Agency.
In the event of the declaration by the Agency of a Developer's
Default, the Agency shall schedule a meeting with any Holder not earlier than
seven (7) or later than fifteen (15) days from the date of declaration of a
Developer's Default. The Agency and the Holders of interests relating to any
portion of the Development Site subject to the Developer's Default shall meet
and confer in good faith to plan the disposition and continued construction of
the Project subject to the Developer's Default.
13.04 Failure of Holder to Complete Improvements. In any case where
six months after exercising its option to construct a Project under this
Agreement, the Holder of record, has not proceeded diligently with construction,
the Agency shall be afforded the same rights against the holder as it would have
against the Developers to the extent of the obligations of the Developers which
accrue during the period the Holder has had possession of the Development Site.
In the alternative, the Agency may purchase the mortgage or deed of trust by
payment to the Holder of the amount of the unpaid mortgage or deed of trust
debt, including principal and interest and all other sums due to such Holder and
secured by the mortgage or deed of trust. If the ownership of the Development
Site or any part thereof has vested in the Holder, the Agency, if it so desires,
shall be entitled to a conveyance from the Holder to the Agency upon payment to
the Holder of an amount equal to the sum of the following:
(a) The unpaid mortgage or deed of trust debt at the time title became
vested in the Holder (less all appropriate credits, including those resulting
from collection and application of rentals and other income derived by the
lender from operations conducted on the Property or other income received during
foreclosure proceedings);
(b) All expenses with respect to foreclosure;
(c) The net expenses, if any (exclusive of general overhead), incurred
by the Holder as a direct result of the subsequent management of the Property or
part thereof;
(d) The costs of any improvements made by such Holder; and
(e) An amount equivalent to the interest that would have accrued on
the aggregate of such amounts had all such amounts become part of the mortgage
or deed of trust debt and such debt had continued in existence to the date of
payment by the Agency.
13.05 Right of Agency to Cure. In the event of a default or breach by
the Developers of a Security Financing Interest prior to the completion of any
Phase of the Project, and the Holder of such Security Financing Interest has not
waived or exercised its option to complete the Development called for on the
Development Site, the Agency may cure the default, prior to the completion of
any foreclosure. In such event the Agency shall be entitled to reimbursement
from whichever of the Developers is the party to the defaulted loan of all costs
and expenses incurred by the Agency in curing the default.
13.06 Right of Agency to Satisfy Other Liens. After the conveyance of
title to the Development Site or any portion thereof and after the Developers
have a reasonable time following notice from Agency to challenge, cure or
satisfy any liens or encumbrances on the Development Site or any portion thereof
which are not otherwise permitted under this Agreement, the Agency shall have
the right to satisfy any such liens or encumbrances and receive immediate
reimbursement of the cost incurred in satisfying such liens or encumbrances from
the Developers; provided, however, that nothing in this Agreement shall require
the Developers to pay or make provision for the payment of any tax, assessment,
lien or charge so long as the Developers in good faith shall contest the
validity or amount therein and so long as such delay in payment shall not
subject the Development Site or any portion thereof to forfeiture or sale.
13.07 Additional Mortgagee Protections. The Agency agrees to make
amendments to this Agreement or enter into an intercreditor agreement as
reasonably requested by any Holder to provide any reasonably required assurances
to such Holder and the Agency's Executive Director, with the approval of the
Agency Chair and the Agency Vice-Chair, is hereby authorized to enter into such
amendments or intercreditor agreements without further action by the Agency
provided such amendments do not adversely impact the Financial Plan.
ARTICLE 14. REPRESENTATIONS AND WARRANTIES
14.01 Representations and Warranties of Developers. Each of the
entities comprising the Developers represents and warrants to the Agency as of
the Effective Date, as follows:
(a) Organization. Each of the entities comprising the Developers is
duly organized, validly existing and in good standing under the laws of the
State of California, with full power and authority to conduct its business as
presently conducted and to execute, deliver and perform its obligations under
this Agreement. John and Camilla Jovicich are husband and wife and have full
power and authority to transact their portion of the Project.
(b) Authorization. The Developers have taken all necessary action to
authorize their execution, delivery and, subject to any conditions set forth in
this Agreement, performance of the Agreement. Upon the execution of this
Agreement, this Agreement shall constitute a legal, valid and binding obligation
of the Developers, enforceable against them in accordance with its terms.
(c) No Conflict. The execution, delivery and performance of this
Agreement and Related Agreements by the Developers does not and will not
conflict with, or constitute a violation or breach of, or constitute a default
under (i) the charter or incorporation documents of the Developers, (ii) any
applicable law, rule or regulation binding upon or applicable to the Developers,
or (iii) any material agreements to which the Developers are a party.
(d) No Litigation. Unless otherwise disclosed in writing to the Agency
prior to the Effective Date, there is no existing or, to the Developers'
knowledge, pending or threatened litigation, suit, action or proceeding before
any court or administrative agency affecting the Developers or the Project that
would, if adversely determined, adversely affect the Developers or the Property
or the Developers' ability to perform their obligations under this Agreement or
to develop and operate the Project.
14.02 Representations and Warranties of Agency. The Agency represents
and warrants to the Developers, as of the Effective Date, as follows:
(a) Organization. The Agency is a redevelopment agency, duly
organized, validly existing and in good standing under the laws of the State of
California, with full power and authority to conduct its business as presently
conducted and to execute, deliver and perform its obligations under this
Agreement and Other Agreements.
(b) Authorization. The Agency has taken all necessary action to
authorize its execution, delivery and, subject to any conditions set forth in
this Agreement, performance of this Agreement. Upon the execution of this
Agreement, this Agreement shall constitute a legal, valid and binding obligation
of the Agency, enforceable against it in accordance with its terms.
(c) No Conflict. The execution, delivery and performance of this
Agreement by the Agency does not and will not conflict with, or constitute a
violation or breach of, or constitute a default under (a) the charter documents
of the Agency, (b) any applicable law, rule or regulation binding upon or
applicable to the Agency, or (c) any material agreements to which the Agency is
a party.
(d) No Litigation. Unless otherwise disclosed in writing to the
Developers prior to the Effective Date, there is no existing or, to the Agency's
knowledge, pending or threatened litigation, suit, action or proceeding before
any court or administrative agency affecting the Agency or the Property that
would, if adversely determined, adversely affect the Agency's ability to perform
its obligations under this Agreement.
ARTICLE 15. GENERAL PROVISIONS
15.01 Notices Demands and Communications. Formal notices, demands, and
communications between the Agency and the Developers shall be sufficiently given
if, in writing and delivered personally, or dispatched by certified mail, return
receipt requested, or by facsimile transmission or reputable overnight delivery
service with a receipt showing date of delivery, to the principal offices of the
Agency and the Developers as follows:
The Developers: American Skiing Company Resort Properties
P.O. Box 450
Bethel, Maine 04217
Attention: Chris Howard, Executive Vice President/CAO
Fax Number: (207) 824-5158
Heavenly Resort Properties, LLC
P.O. Box 2180
Stateline, Nevada 89449
Attention: Stanley W. Hansen, Senior Vice President,
Real Estate
Gary Casteel
Trans-Sierra Investments
581 Green Acres Drive
Gardnerville, Nevada 89410
Heavenly Valley, LP
P.O. Box 2180
Stateline, Nevada 89449
Attention: Dennis Harmon, Managing Director
Fax Number: (702) 586-7056
John and Camilla Jovicich
4020 Lake Tahoe Boulevard
South Lake Tahoe, California 96150
Fax Number: (530) 544-7637
With an information
copy to: Lewis S. Feldman, Esq.
Feldman, Shaw & DeVore
2311 Lake Tahoe Boulevard
South Lake Tahoe, California 96150
Fax Number: (530) 541-5242
Agency: South Tahoe Redevelopment Agency
1052 Tata Lane
South Lake Tahoe, California 96150
Attention: Executive Director
Fax Number: (530) 542-4054
With an information
copy to: Goldfarb & Lipman
One Montgomery Street
Telesis Tower, 23rd Floor
San Francisco, California 94104
Attention: Karen M. Tiedemann
Fax Number: (415) 788-0999
City: City of South Lake Tahoe
1052 Tata Lane
South Lake Tahoe, California 96150
Attention: City Manager
Fax Number: (530) 542-4054
With an information
copy to: Catherine De Camillo
City Attorney
City of South Lake Tahoe
1052 Tata Lane
South Lake Tahoe, California 96150
Fax Number: (530) 542-4054
Such written notices, demands and communications may be sent in the
same manner to such other addresses as the affected Party may from time to time
designate as provided in this Section 15.01. Delivery shall be deemed to have
occurred at the time indicated on the receipt for delivery or refusal of
delivery.
15.02 Non-Liability of Officials Employees and Agents. No member,
official, employee or agent of the Agency or the City shall be personally liable
to the Developers or any successor in interest, in the event of an Agency Event
of Default.
15.03 Time of the Essence. Time is of the essence in this Agreement.
15.04 Inspection of Books and Records. The Agency has the right at all
reasonable times to inspect and copy the books, records and all other
documentation of the Developers pertaining to the Project until one year after
issuance of the bonds refinancing the BANS.
15.05 Title of Parts and Sections. Any titles of the sections or
subsections of this Agreement are inserted for convenience of reference only and
shall be disregarded in interpreting any of its provisions.
15.06 Applicable Law. This Agreement shall be interpreted under the
laws of the State of California.
15.07 Severability. If any term of this Agreement is held in a final
disposition by a court of competent jurisdiction to be invalid, then the
remaining terms shall continue in full force unless the rights and obligations
of the Parties have been materially altered by such holding of invalidity.
15.08 Legal Actions. If any legal action is commenced to interpret or
to enforce the terms of this Agreement or to collect damages as a result of any
breach of this Agreement, then the Party prevailing in any such action shall be
entitled to recover against the Party not prevailing all reasonable attorneys'
fees and costs incurred in such action (and any appeal or subsequent action or
proceeding to enforce any judgment entered pursuant to an action on this
Agreement).
15.09 Binding Upon Successors; Covenants to Run with Land. This
Agreement shall be binding upon and inure to the benefit of the heirs,
administrators, executors, successors in interest, and assigns of each of the
Parties. However, there shall be no Transfer by the Developers except as
permitted in Article 11. Any reference in this Agreement to a specifically named
Party shall be deemed to apply to any successor, heir, administrator, executor,
successor, or assign of such Party who has acquired an interest in compliance
with the terms of this Agreement or under law.
15.10 Parties Not Co-Venturers. Nothing in this Agreement is intended
to or does establish the Parties as partners, co-venturers, or principal and
agent with one another.
15.11 Provisions Not Merged With Grant Deed. None of the provisions of
this Agreement shall be merged by the Grant Deed or any other instrument
transferring title to any portion of the Property, and neither the Grant Deed
nor any other instrument transferring title to any portion of the Property shall
affect this Agreement.
15.12 Entire Understanding of the Parties. This Agreement (including
the exhibits to this Agreement) constitutes the entire understanding and
agreement of the Parties with respect to the conveyance of the Property and the
development of the Development.
15.13 Approvals.
(a) Whenever this Agreement calls for Agency approval, consent, or
waiver, the written approval, consent, or waiver of the Agency's Executive
Director or his or her designee shall constitute the approval, consent, or
waiver of the Agency, without further authorization required from the Agency
Board. The Agency hereby authorizes the Agency's Executive Director or his or
her designee to deliver such approvals or consents as are required by this
Agreement; provided, however, any changes to the proposed financing for the
Project must be approved by the Agency Board. Any such action shall be in
writing.
(b) All approvals under this Agreement shall be subject to a
reasonableness standard, except where a sole discretion standard is specifically
provided.
15.14 Amendments. The Parties can amend this Agreement only by means
of a writing signed by both Parties.
15.15 Force Majeure. In addition to specific provisions of this
Agreement, performance by either party shall not be deemed to be in default and
an extension of time shall be granted to any affected time period or date
provided in this Agreement where delays or defaults are due to war;
insurrection; strikes; lock-outs; riots; floods; earthquakes; inclement weather;
fires; quarantine restrictions; freight embargoes; lack of transportation; the
commencement of litigation challenging the validity or legality of any action
taken by Agency or City in connection with the Project or this Agreement; or
court order; the failure of a governmental entity or agency other than the
Agency and the City to take an action required in order to implement the
Development within a reasonable time; or any other causes (other than lack of
funds of the Developers or financing) beyond the control or without the fault of
the party claiming an extension of time to perform. An extension of time for any
cause will be deemed granted if the party claiming such extension sends notice
to the other party within sixty (60) days of the event causing the need for an
extension. Times of performance under this Agreement may also be extended by
written agreement of the Agency and the Developers.
15.16 Estoppel Certificates. Within ten (10) days following the
request of either party (the "Requesting Party") the other party shall execute
and deliver a statement concerning the status of the performance by the
Requesting Party under this Agreement, of conditions of payments due and made
and such other relevant matters as the Requesting Party may request. Such
statement may be relied upon by the Requesting Party, its members, lenders, and
prospective members, transferees and grantees.
15.17 Multiple Originals Counterparts. This Agreement may be executed
in multiple originals, each of which is deemed to be an original, and may be
signed in counterparts.
<PAGE>
AS OF THE DATE FIRST WRITTEN ABOVE, the Parties evidence their
agreement to the terms of this Agreement by signing below:
Approved As To Form: AGENCY:
By: /s/ illegible SOUTH TAHOE REDEVELOPMENT AGENCY,
Agency Counsel a public body, corporate and politic
By: illegible
------------------------------------------
Its: /s/ Chairman
----------------------------------------
Dated: 10/28/99
--------------------------------------
Approved As To Form: CITY:
By: /s/ Catherine L. DiCamillo CITY OF SOUTH LAKE TAHOE,
City Attorney a municipal corporation
By: /s/ Judy Brown
------------------------------------------
Its: Mayor
-----------------------------------------
Dated: 10/28/99
--------------------------------------
DEVELOPER:
AMERICAN SKIING COMPANY RESORT PROPERTIES,
a Maine corporation
By: /s/ Leslie B. Otten
------------------------------------------
Its: Chairman
---------------------------------------
Dated: 10/29/99
--------------------------------------
<PAGE>
HEAVENLY RESORT PROPERTIES, LLC,
a Nevada limited liability company
By: /s/ Stan Hansen
------------------------------------------
Its: Manager
-----------------------------------------
Dated: 10/28/99
--------------------------------------
HEAVENLY VALLEY, Limited Partnership,
a Nevada limited partnership
By: /s/ Dennis Harmon
------------------------------------------
Its: Managing Director
-----------------------------------------
Dated: 10/28/99
--------------------------------------
TRANS-SIERRA INVESTMENTS,
a Nevada corporation
By: /s/ Gary B. Casteel
------------------------------------------
Its: President
-----------------------------------------
Dated: 10/28/99
--------------------------------------
CECIL'S MARKET, INC.,
a California corporation
By:
------------------------------------------
John Jovicich
Its:-----------------------------------------
Dated: --------------------------------------
<PAGE>
Exhibit A
Financial Plan
<PAGE>
Exhibit B
Gondola Right-of-Way Legal Description
<PAGE>
Exhibit C
Draft Tentative Subdivision Plan
<PAGE>
Exhibit D
Project Executive Summary
<PAGE>
Exhibit E
Scope of Development
<PAGE>
Exhibit F
Site Plan
<PAGE>
Exhibit G
Schedule of Performance
<PAGE>
Exhibit H
Form of Grant Deed
<PAGE>
Exhibit I
Environmental Assessment Reports
and Natural Hazard Disclosure
<PAGE>
Exhibit J
Motel Room Retirement Schedule
<PAGE>
Exhibit K
Mello-Roos Rate and Method
<PAGE>
THE CANYONS RESORT VILLAGE
MANAGEMENT AGREEMENT
<PAGE>
THE CANYONS RESORT VILLAGE
MANAGEMENT AGREEMENT
THIS RESORT VILLAGE MANAGEMENT AGREEMENT (the "Agreement") is entered
into to be effective as of this _____ day of __________________, 1999, by and
between ASC Utah, Inc., d.b.a. The Canyons, a Maine corporation with a place of
business at 4000 The Canyons Resort Drive, Park City, Utah 84098 ("ASC Utah" );
American Skiing Company Resort Properties, Inc., a Maine corporation with a
place of business at One Parkway, P.O. Box 450, Bethel, Maine 04217 ("ASCRP");
Wolf Mountain Resorts, L.C., a Utah limited liability company with a mailing
address of P.O. Box 980903, Park City, Utah 84098 ("Lessor"); The Canyons Resort
Village Association, Inc., a Utah nonprofit corporation with a place of business
at 4000 The Canyons Resort Drive, Park City, Utah 84098 (the "Association"); and
each of the property owners listed on Exhibit A hereto (the "Participants").
RECITALS
A. ASC Utah and ASCRP own or lease all of the land shown as Parcel 1 on
the Plan of Land entitled "The Canyons Resort Village - Easement Plan," dated
______________, 1999 (the "Plan"), recorded in the Office of the Recorder for
Summit County as Entry No. _____, in Book _____, beginning at Page _____, and
attached hereto as Exhibit B, as it may be amended from time to time in
accordance with this Agreement.
B. Lessor is the owner of certain premises within Parcel 1, which
premises are leased to ASC Utah under a certain Ground Lease Agreement dated as
of July 3, 1997, and a First Amendment to Ground Lease dated as of August 1,
1998, and a Second Amendment to Ground Lease dated contemporaneously herewith.
C. Participants own or control various parcels of land as shown on the
Plan (the "Participants' Parcels").
D. ASC Utah, ASCRP, the Association, and the Participants wish to
convey certain easements to each other to allow for their joint use of certain
improvements located or to be located on their respective properties and to
enhance the value of each of their properties and the uses contemplated thereon.
E. ASCRP, ASC Utah, and the Participants intend to separately develop
their respective portions of a resort village on Parcel 1 and the Participants'
Parcels, all of which collectively are to be an integral part of the resort
village (the "Resort Village"). The Resort Village development as currently
contemplated is depicted, for illustrative purposes only, on Exhibit C attached
hereto.
<PAGE>
F. ASCRP has incurred certain substantial development cost charges in
the planning and permitting of the Resort Village, and in exchange for the
easements granted herein, the Participants desire that the Association shall
reimburse ASCRP for a fixed portion of their costs.
G. The parties hereto desire to delegate to the Association the right,
obligation, responsibility, and authority for the operation and management of
the Resort Village, as set forth herein.
H. The Resort Village is in The Canyons Specially Planned Area ("SPA")
Zone District, under the Snyderville Basin Development Code, pursuant to Summit
County Ordinance Number 333, as amended by Summit County Ordinance Number 333A,
which is implemented by a Development Agreement among Lessor, ASCRP, ASC Utah,
and others, dated July 6, 1998, as amended November __, 1999, as it may be
amended from time to time (the "Development Agreement").
I. The parties to this Agreement desire to establish mechanisms for
payment of fees and charges necessary to implement the Development Agreement and
carry out the objectives of the Association.
J. The Development Agreement requires that a master association be
maintained over development within certain areas of the SPA, for the purpose of
regulating and maintaining certain standards and levels of maintenance of all
buildings, roads, village infrastructure, and landscaping, and for the purpose
of developing certain community amenities to the extent feasible; the parties
hereto desire the Association to fulfill these obligations; and the parties
desire to delegate to the Association the right, obligation, and authority to
perform such functions as more fully set forth herein.
K. ASC Utah, ASCRP, and the Participants desire for the Participants'
Parcels to be operated as an integral part of the Resort Village for the mutual
benefit of all of the parties.
L. All parties desire that the Association operate the Resort Village
in a manner that treats all parties in a fair and equitable manner.
NOW THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1. Terms Defined in this Agreement. Except as otherwise expressly
provided in this Agreement, the terms used in this Agreement shall be given
their natural, commonly accepted definitions consistent with the Utah
Condominium Ownership Act. In addition to the terms defined elsewhere in this
Agreement, the following terms shall have the following meanings:
1.1 "Assessments" means the Annual Member Assessments, Retail
Assessments, Transient Occupancy Assessments, Real Estate Transfer Assessments,
<PAGE>
and the charges, fines, penalties, and other amounts levied, fixed and collected
pursuant to Article IV.
1.2 "Commercial Resort Property" means any Resort Property
used predominantly for retail businesses or commercial services offered to the
public, or wholesale or office activities, since the latest of:
(a) the date on which it became a Resort Property pursuant to this
Agreement;
(b) the date of Substantial Completion of any Improvement on such
Resort Property; or
(c) the earlier of (i) the date of commencement of the term of
occupancy under a lease with respect to such Resort Property
or (ii) the date of first use of such Resort Property for such
services or activities.
"Retail businesses" shall include without limitation businesses engaged
in the sale or lease of tangible personal property. "Commercial services" shall
include without limitation the offering of professional services (including
without limitation medical, legal, accounting, and engineering services) and
nonprofessional services (including without limitation real estate sales and
management, repair, restaurants, health clubs, and beauty salons); "commercial
services" shall not include businesses engaged in the accommodation of tourists,
transients, or permanent guests for compensation. Property owned or controlled
by ASC Utah shall be considered a Commercial Resort Property only for purposes
of the Retail Assessment and only with respect to the retail businesses or
commercial services owned or leased by ASC Utah in the Resort Core other than
facilities primarily related to the operation and administration of ski ticket
sales, ski lifts, ski patrol, ski school, or skiing or snowboard facilities;
provided, however, that retail businesses or commercial services owned by ASC
Utah in Red Pine Village shall be included within the definition of Commercial
Resort Property at such time as the first certificate of occupancy is issued for
a Lodging Resort Property in Red Pine Village. Excluded from the definition of
"Commercial Resort Property" is the operation of snowmobile tours and horseback
riding operations.
1.3 "Commercial Resort Property Member" means any owner of a Commercial
Resort Property.
1.4 "Facilities" means all real property or interests therein,
improvements on real property, personal property, and equipment, dedicated for
use or used by the Association in operating the Resort Village or any Function
thereof.
1.5 "Function" means any activity, function, or service that may be
undertaken by the Association under this Agreement.
1.6 "Function Cost" means, with respect to a particular Function, the
Association's expense, including administrative costs, to perform such Function
in a fiscal year.
<PAGE>
1.7 "Improvement" means any building, structure or other improvement,
retaining wall, landscaping, roadway, transportation system, pedestrian pathway,
or any similar alteration of the land, whether of a temporary or permanent
nature, developed or constructed on the Resort Lands, whose primary purpose is
to be used, or which is used as either a Commercial Resort Property, a Lodging
Resort Property or a Residential Resort Property.
1.8 "Lodging Resort Property" means any Resort Property which contains
the attributes of a hotel or a facility established for similar purposes and
which is available for short term occupancy by unit owners or others, and which
contains the following attributes:
Central reservation service for all units, including central check-in
with full-time front desk service, bellhops, and concierge, operated by
the owner/operator, a property management company chosen by the owners'
association, or as a function of the owner's association;
Central access to the building, with no private entrances for
individual units or wings, except in structures which include up to but
not to exceed four dwelling units, unless otherwise approved by the
Director;
Pedestrian traffic funneled through a central lobby area, except in
structures which include up to but not to exceed four dwelling units,
unless otherwise approved by the Director;
Utilities centrally controlled, including cable television, telephone,
electricity, gas, and water; and
Limited storage area for owners.
In addition, such Resort Property shall have been made available for such rental
for more than fourteen (14) days in any calendar year since the latest of:
(a) the date on which it became a Resort Property;
(b) the date of Substantial Completion of any Improvement on the
Resort Property; or
(c) the date of first use of such Resort Property for rental to
the transient public.
With respect to condominiums used for rental to the transient public, "Lodging
Resort Property" means the entirety of property included in any declaration of
condominium, except that individual commercial condominium units shall
constitute Commercial Resort Property for purposes of this Agreement.
1.9 "Lodging Resort Property Member" means an individual owner of a
Lodging Resort Property.
1.10 "Member" means any owner of property within The Canyons SPA or any
lessee of property within The Canyons SPA under a lease with a term of 25 years
or longer (not including renewal options), including each of the following:
<PAGE>
(a) Lodging Resort Property Members;
(b) Commercial Resort Property Members;
(c) Residential Resort Property Members;
(d) the Mountain Member; and
(e) all other owners of real estate or fractional or undivided
interest therein.
1.11 "Mortgage" means any mortgage, deed of trust, or other security
instrument (including the seller's rights under a contract for deed) by which
any Resort Land any improvement thereon or any part thereof or interest therein
is encumbered in good faith and for value. A "First Mortgage" is a Mortgage
having priority as to all other Mortgages encumbering any Resort Land, any
improvement thereon, or any part thereof or interest therein.
1.12 "Mortgagee" means any person or entity named as the mortgagee,
beneficiary, or holder of the seller's interest under any Mortgage by which the
interest of any owner of property is encumbered, or any successor to the
interest of such person under such Mortgage. A "First Mortgagee" means any
person or entity holding a First Mortgage including any insurer or guarantor of
a First Mortgage.
1.13 "Mountain Member" means ASC Utah, Inc. d.b.a. The Canyons, or any
successor entity that operates The Canyons Resort.
1.14 "Participant" means each of the property owners within The Canyons
SPA Zone District other than ASCRP, ASC Utah, and the Lessor with respect lands
leased by the Lessor to ASC Utah; provided, however, that the Lessor is a
Participant with respect to any other property owned by Lessor within The
Canyons SPA Zone District and not subject to the Lease described in Recital B
hereof.
1.15 "Person" means any individual or entity, including a corporation,
partnership, limited liability company, trustee or trust, unincorporated
association, public utility, or any municipal or governmental entity or agency.
1.16 "Residential Resort Property" means any Resort Property that is
not a Lodging Resort Property or a Commercial Resort Property, and that has not
been made available for rental to the transient public for more than 14 days in
any calendar year and has been used exclusively for non-commercial purposes, and
that is used predominantly or partially as a single or multi-family residential
accommodation unit since the latest of:
(a) the date on which it became a Resort Property;
(b) the date of Substantial Completion of any Improvement on such
Resort Property; or
<PAGE>
(c) the earlier of (i) the date of a sale with respect to such
Resort Property or (ii) the date of first use of such Resort
Property as a residential accommodation unit;
1.17 "Residential Resort Property Member" means any owner of a
Residential Resort Property.
1.18 "Resort Lands" means the real property described on the Plan.
1.19 "Resort Property" means each parcel of real property located
within the Resort Lands that is, or is capable of being, separately owned or
controlled, including each condominium unit or quarter or other fractional share
or club ownership, including without limitation parcels owned by the
Participants, provided that:
(a) any portion of the Resort Lands shall not be considered a
Resort Property for purposes of the Annual Member Assessment
prior to commencement of construction of any improvement
thereon or use thereof for residential, lodging, rental,
commercial or any retail purposes;
(b) a parcel of property owned, leased, held, or used in its
entirety by the Association, or by any governmental entity
(including without limitation Special Improvement Districts
formed pursuant to Utah law), or for or in connection with the
creation, storage, collection, or distribution of electricity,
gas, water, sewer, telephone, television or other utility
service or for access to any property within or without the
Resort Village shall not be considered a Resort Property;
(c) facilities or portions thereof owned or operated by ASC Utah
or located on Resort Lands that are related primarily to the
operation and administration of ticket sales, ski lifts, ski
patrol, ski school, or skiing or snowboard facilities shall
not be considered a Resort Property, and for the purposes of
this subparagraph:
(i) without restricting the generality of the foregoing,
employee housing and changing areas, maintenance
buildings, snowmaking and grooming facilities, and
the like shall be deemed to be facilities related to
the operation and administration of ticket sales, ski
lifts, ski patrol, ski school, or skiing or snowboard
facilities; and
(ii) buildings used for day skier services shall be deemed
to be facilities related to the operation and
administration of ski lifts, ski patrol, ski school,
or skiing or snowboard facilities, except for
commercial businesses located therein that are not
owned or operated by ASC Utah or ASCRP; or
(d) skiing or snowboarding or other recreational facilities owned
or operated by ASC Utah or ASCRP or their affiliates as an
integral part of the operation of the resort shall not
constitute Resort Property.
1.20. "Resort Village" means all of the Participants' Parcels and
Parcel 1, with the exception of the area on which the Mountain Member operates a
ski resort. .
<PAGE>
1.21 "Square Footage" means the gross square footage of the floor area
of an Improvement as measured and calculated by the Association on a consistent
basis.
1.22 "Substantial Completion" means the date on which any Improvement
on a Resort Property has received a certificate of occupancy from Summit County,
has been substantially completed as certified by an architect or engineer, or if
no certificate is issued, as determined by the Association.
ARTICLE II
GRANT OF EASEMENTS
2.1 Plan. The Plan reflects the approximate location of the easements
granted hereby on a pre-construction basis. Upon completion of construction
during each construction season, as and when reasonably determined by the
Association, the Association shall have prepared, as an amendment to the Plan, a
survey of all easements granted hereunder. The survey shall be approved by ASC
Utah, ASCRP, the Participants, Textron Financial Corporation, as Administrative
Agent ("Textron") under the mortgage dated September 4, 1998, from Textron to
Grand Summit Resort Properties, Inc., recorded in the Office of the Recorder for
Summit County as entry number 526565, in Book 1217, beginning at Page 184;
BankBoston, N.A. under a Fee and Leasehold Deed of Trust, Assignment of leases
and Rents, Fixture Filing and Security Agreement dated 11/12/97 by and amount
ASC Utah and BankBoston, N.A. as Agent filed in Book 01093, Page 23-65; a Deed
of Trust, Assignment of Leases and Rents, Fixture Filing and Security Agreement
dated as of September 4, 1998 between ASCRP and BankBoston, N.A. as Agent
recorded at Book 12108, Pg. 151; and Key Bank N.A. under a deed of trust,
security agreement, and financing statement with power of sale dated December
18, 1998, and recorded in the Office of the Recorder for Summit County in Book
1253, beginning at Page 264. Pursuant to the provisions of Section 7.1, the
survey shall be recorded as an addendum to this Agreement clarifying the exact
location of the easements granted hereunder.
2.2 Access Easement.
(a) Grant. ASC Utah and ASCRP hereby grant to the Association and
the Participants and Participants' tenants, licensees, guests,
and invitees, for the benefit of the Participants' Parcels,
and the Participants hereby grant to the Association, ASC Utah
and ASCRP and their respective tenants, licensees, guests, and
invitees, for the benefit of Parcel 1, the right and easement,
in common with others, to utilize the roadway system shown on
the Plan, as such roadway system may be expanded and amended
from time to time pursuant to an amendment to the Plan, for
all purposes, including without limitation ingress and egress
on foot and by motor vehicle and for the installation,
maintenance, repair, and replacement of roads, medians,
pavement, drainage ditches, sidewalks, culverts, retaining
walls, directional and informational signs, utility lines,
street lights, wires, pipes, poles, grates, conduits, and
<PAGE>
mains, together with the right to alter, excavate, and pave
the surface of the earth for the foregoing purposes
(collectively the "Access Easement"), provided that ASC Utah,
ASCRP, the Participants or the Association, as the case may
be, shall be responsible for obtaining all governmental
approvals for improvements to the Access Easement initially
installed by ASC Utah, ASCRP, such Participants or the
Association, that the surface of the earth and any pavement
and landscaping shall be promptly restored, and any
inconvenience to other parties or disruption of use and
enjoyment by other parties shall be minimized.
(b) Relocation. ASC Utah, ASCRP, and the Association shall have
the right to relocate the roadway system shown on the Plan at
such party's own expense on property owned or controlled by
ASC Utah, ASCRP, or the Association, provided that (i) all
applicable governmental requirements are satisfied, (ii) any
such relocation does not unreasonably interfere with or
disrupt the use of the Access Easement area by the
Participants, (iii) any such relocation does not limit or
restrict the Participants' development of other then-owned or
controlled property, (iv) reasonable prior written notice of
such relocation shall have been given to the Participants and
any mortgagee or holder of a deed of trust of record of the
Participants' Parcels, and (v) the Participants are granted
easements with respect to such relocated roadway system that
are practically equivalent to the easements granted under this
Paragraph.
2.3 Pedestrian Pathways.
(a) Grant. ASC Utah and ASCRP hereby grant to the Association and
the Participants and Participants' tenants, licensees, guests,
and invitees for the benefit of the Participants' Parcels, and
the Participants hereby grant to the Association, ASC Utah,
and ASCRP and their respective tenants, licensees, guests, and
invitees, for the benefit of Parcel 1, the right and easement,
in common with others, to utilize the areas shown as
"Pedestrian Path" on the Plan, as such Pedestrian Path may be
expanded and amended from time to time pursuant to an
<PAGE>
amendment to the Plan, for ingress and egress by foot or such
other means as approved by the Association to and from their
respective parcels, and for the installation, maintenance,
repair, and replacement of pavement, drainage ditches, and
information signs. The parties further agree to provide
additional pedestrian easements as reflected on site plans
approved by Summit County.
(b) Relocation. ASC Utah, ASCRP and/or the Association shall have
the right to relocate the Pedestrian Path shown on the Plan,
at ASC Utah's, ASCRP's and/or the Association's own expense,
provided that all applicable governmental requirements are
satisfied, and so long as any such relocation does not
unreasonably interfere with or disrupt the use of the
Pedestrian Path by the Participants, so long as any abandoned
path is landscaped in accordance with the surrounding property
and returned to the relevant Participant at no cost to such
Participant.
2.4 License to Use Facilities.
(a) ASC Utah, ASCRP, and the Association hereby grant to the
Participants and Participants' tenants, licensees, guests, and
invitees for the benefit of the Participants' parcels a
license over, upon, across, and with respect to any Facilities
as appropriate and necessary for access and ingress to and
egress from and use of the Facilities, subject to such
reasonable and uniformly applied fees, rules and regulations
as the Association may impose to assure reasonable use and
enjoyment of Facilities by all persons entitled to such use
and enjoyment.
(b) ASCRP hereby grants to ASC Utah, for the benefit of ASC Utah's
parcels, and ASC Utah hereby grants to ASCRP, for the benefit
of ASCRP's parcels, a license over, upon, across, and with
respect to any Facilities as appropriate and necessary for
access to, ingress to, and egress from the Resort Property of
ASCRP or ASC Utah, as the case may be; encroachment by
improvements caused by the settling, rising, or shifting of
earth; and horizontal and lateral support of improvements;
subject, however, in the case of access, ingress, and egress,
to such reasonable and uniformly applied rules and regulations
as the Association may impose to assure reasonable use and
enjoyment of Facilities by all persons entitled to such use
and enjoyment.
<PAGE>
2.5 Utilities.
(a) Grant. ASC Utah and ASCRP hereby grant to the Association and
the Participants on, below, and above Parcel 1 for the benefit
of the Participants' Parcels, and the Participants hereby
grant to ASC Utah, ASCRP, and the Association on, below, and
above the Participants' parcels, for the benefit of Parcel 1,
the right and easement, in common with others, to install,
construct, maintain, and repair utility lines, cables, wires,
conduits, pipes, mains, poles, guys, anchors, fixtures,
supports and terminals, repeaters, and such other
appurtenances of every nature and description as the parties
may deem reasonably necessary to service their properties (the
"Utility Lines") including without limitation those for the
transmission of intelligence by electricity, for water,
electricity, telecommunications, gas, sewage, septic, sanitary
sewer, and drainage. The installation, construction,
maintenance, and repair of the Utility Lines by the
Association and/or the Participants shall not unreasonably
interfere with the development or continuing use of Parcel 1.
The installation, construction, maintenance, and repair of the
Utility Lines by ASC Utah, ASCRP, and/or the Association shall
not unreasonably interfere with the development or continuing
use of the Participants' Parcels, nor shall such Utility Lines
interfere with or be placed under any existing structure or
any structure proposed to be constructed. The parties shall
use their commercially reasonable efforts to install the
Utility Lines so as not to adversely impact the aesthetics of
the surrounding property and to minimize their impact on the
burdened property and shall repair displaced ground to its
former condition.
<PAGE>
(b) Location and Relocation. The location of easements for Utility
Lines shall be five (5) feet on each side of the centerline of
such Utility Lines as shown on the Plan, as such Utility Lines
may be expanded and amended from time to time pursuant to an
amendment to the Plan; provided, however, that existing or
future improvements may encroach within the easement area so
long as there is no adverse impact upon maintenance and
operation of the Utility Lines. Each party shall have the
right to relocate the Utility Lines located on such party's
property at its own expense provided that all applicable
governmental requirements are satisfied and so long as any
such relocation does not unreasonably interfere with or
disrupt the use of the easement by the benefited property. For
purposes of this Agreement, a temporary impairment of view
shall not constitute unreasonable interference.
2.6 Easement for Ski Trails, Lifts, Snowmaking Equipment, and
Appurtenances. The Participants, ASCRP, and the Association hereby grant to ASC
Utah, for the benefit of Parcel 1, and for the benefit of any other land that is
or in the future becomes a part of the ski resort operated on Parcel 1, the
right and easement to enter upon each Participant's Parcel or any property they
own within Parcel 1 with persons and equipment for the purpose of constructing,
maintaining, using, locating, relocating, grooming, and repairing ski trails,
ski lifts and people movers, lift towers, trail identification signs, snowmaking
equipment, pipes, hoses and hydrants, and any necessary appurtenances thereto
exclusive of areas occupied by structures, including structures under
construction or approved for construction by the Design Review Committee
pursuant to Article 5 hereof; provided, however, that the exercise of these
easement rights shall be at the sole expense of ASC Utah, and the exercise of
such easement rights shall not materially interfere with the use or occupancy of
ASCRP as to its property within Parcel 1 or the Participants' Parcels by
Participants or their guests and invitees. Without limiting the generality of
the foregoing, the grant of easement herein includes easements through the air
above the surface of the ground for ski lifts. For purposes of this Agreement,
any impairment of view shall not constitute a material interference with use or
occupancy of the units.
ASC Utah hereby agrees to allow tenants, licensees, guests and invitees
of ASCRP, the Association and the Participants to utilize ski trails constructed
and operated by ASC Utah on Parcel 1 and on the Participants' Parcels for access
to the ski area located on Parcel 1; provided, however, that any use of ski
lifts, trails, or other skier facilities located on Parcel 1 by the Association,
or owners or occupants of the Participants' Parcels shall be on the same terms
and conditions as other patrons of the ski area, including without limitation
payment of any access fees or usual and ordinary ticket prices of general
application as determined by ASC Utah in its sole discretion.
2.7 License for Signage. ASC Utah and ASCRP hereby grant to the
Participants on Parcel 1, for the benefit of Participants' Parcels, a license,
for the benefit of the Participants' Parcels, to install, construct, and
maintain signs at such locations as are approved by the Association in
accordance with reasonable signage guidelines adopted by the Association from
time to time. Prior to installation by the Participants of any sign on Parcel 1,
the design, colors, lighting, size, and exact location shall be presented to the
Design Review Committee provided for in Article V hereof for its written
approval.
<PAGE>
2.8 Electrical Power. From time to time, in connection with the
operation of certain temporary activities or events within the Resort Village,
the Association may be required to draw electrical power from one or more of the
Participants. Each Member shall allow the Association to draw electrical power
from time to time as necessary for such temporary uses, so long as the
Association pays fair market value for the electrical power so drawn and so long
as such Member has the ability to provide such power without causing a negative
impact on such Member's operations.
2.9 Temporary License for Construction and Maintenance. ASC Utah and
ASCRP (for purposes of this Section 2.9, collectively "Grantors") hereby grant
to ASCRP, The Canyons Resort Properties, Inc., Grand Summit Resort Properties,
Inc., and any Transferee of property from ASC Utah or ASCRP and their invitees
and contractors (for purposes of this Section 2.9, collectively "Grantees") a
non-exclusive, temporary license for construction, maintenance, repair, and
replacement ("Temporary Construction License") on, over, across and through that
portion of Grantors' property located in the vicinity of Grantees' parcels not
otherwise presently occupied by completed structures for the sole purpose of
ingress to and egress from Grantees' parcels, staging and temporary storage of
construction equipment and materials, and other uses directly related to
construction and maintenance and management of construction and maintenance on
Grantees' parcels, including without limitation, post-completion repair and
warranty work, maintenance, and repair and replacement of damaged property
(collectively the "Work"), all at the risk and expense of Grantees. The size,
configuration and dimensions of the Temporary Construction License shall be
limited to that portion of Grantors' property located contiguous to and in the
vicinity of Grantees' parcels as is reasonably needed to complete the Work.
Grantors shall have the right to request that the location of the Work be
altered to accommodate the use of Grantors' property provided that such
relocation does not unreasonably delay or interfere with the completion of the
Work.
The Temporary Construction License is non-exclusive and Grantees shall
conduct their activities on, and otherwise use, the Temporary Construction
License in such a manner so as not to unreasonably interfere with Grantors' use
of their property or the operation of their businesses or Association business.
Grantees shall repair any and all damage that may be caused to
Grantors' parcels by reason of their use of the Temporary Construction Easement.
Grantees shall indemnify and hold Grantors and Grantors' contractors, employees,
officers, trustees and agents, and the Grantor property harmless from and
against all claims of any nature that may arise from Grantees' use of the
Temporary Construction Easement, except those claims that may arise from the
sole negligence of Grantors or their employees and agents.
ARTICLE III
THE CANYONS RESORT VILLAGE ASSOCIATION
<PAGE>
3.1 The Canyons Resort Village Association. The parties to this
Agreement desire to delegate the management and operation of the rights, duties,
and obligations arising under this Agreement with respect to the Resort Village
to the Association, which is a nonprofit corporation organized under the laws of
the State of Utah in accordance with the Articles of Incorporation and Bylaws to
be adopted by the Association, which will be consistent with the terms of this
Agreement. In consideration of the easements granted in Article II and as a
condition of the continuation of such easements, the Participants and any Person
that succeeds to the interests of each of the Participants to such Participants'
Parcels and any real estate interest therein and ASC Utah and ASCRP shall be
Members of the Association.
3.2 Purposes and Powers of the Association. Except as otherwise
provided herein or in the Articles of Incorporation, Bylaws, or the Development
Agreement, the Association shall have all the powers, duties, and
responsibilities as are now or may hereafter be provided by this Agreement, the
Articles of Incorporation, the Bylaws, or the Development Agreement, including
but not limited to the following:
(a) To make and enforce all rules and regulations covering the
operation and maintenance of the Resort Village.
(b) To engage the services of a manager, accountants, attorneys,
or other employees or agents and to pay to said persons a
reasonable compensation therefor.
(c) To acquire, own, lease, operate, build, manage, maintain,
rent, sell, develop, encumber, hold, and otherwise deal in and
with real and personal property of every kind and character,
tangible and intangible, wherever located, and interests of
every sort therein; provided, however, that
(i) the Association shall reimburse any Member
who transfers, leases, or otherwise makes
available to the Association property on
which infrastructure or amenities are built
by the Association, the actual cost of such
property to such Member (including, in the
case of property that is leased by the
Member, the proportionate share of all costs
or other payments under such lease
associated with such property); and
(ii) if the property used by the Association for
infrastructure or amenities was initially
entitled to density under the Development
Agreement, as amended, the Association shall
reimburse such Member the fair market value
of such property, unless the original
density is transferred to another property
owned or controlled by that Member and the
value of the transferred density is
comparable to the original density, in which
case the Association shall reimburse the
Member the Member's actual cost for the
property.
(d) To acquire, own, lease, operate, build, manage, maintain,
rent, sell, develop, encumber, hold, and otherwise deal in and
<PAGE>
with any Facilities including but not limited to buildings and
other structures; daycare facilities; teen centers; roads,
walkways, streets, and pedestrian paths; parks, playgrounds,
open spaces, gardens, fountains, common areas and public
areas; amphitheaters and other public entertainment areas;
utility lines and systems; outdoor lighting systems;
waterways; landscaping, including without limitation plants,
trees, shrubs, and grass; a medical clinic; cross country ski
facilities; pedestrian, hiking, equestrian, and biking trails;
equestrian facilities; ice rinks; swimming pools, saunas,
steam baths, and spas; golf courses and tennis courts and
other game courts, game areas, and recreational amenities; and
such improvements and equipment as may be appropriate for use
in connection with the operation and maintenance of a world
class resort village.
(e) To determine and pay the expenses of the Association.
(f) To levy the Member Assessments, Retail Assessments, Transient
Occupancy Assessments, Real Estate Transfer Assessments, and
such other assessments as are authorized hereunder against
Members as provided in this Agreement and in the Bylaws; to
charge interest on unpaid assessments and to collect charges,
fees, fines, penalties, and interest in accordance with this
Agreement and the Bylaws, and to create and enforce liens
given as security for such assessments, charges, fees, fines,
penalties, and interest.
(g) To grant easements and licenses and to enter into contracts,
deeds, leases, and/or other written instruments or documents
and to authorize the execution and delivery thereof by the
appropriate officers.
(h) To open bank accounts and designate the signatories therefor.
(i) To borrow funds or raise moneys for any of the purposes of the
Association and from time to time to execute, accept, endorse,
and deliver as evidences of such borrowing, all kinds of
instruments and securities, including but not limited to
promissory notes, drafts, bills of exchange, warrants, bonds,
debentures, property certificates, trust certificates, and
other negotiable or non-negotiable instruments and evidences
of indebtedness, and to secure the payment and performance of
such securities by mortgage on, or pledge, conveyance, deed,
or assignment in trust of, the whole or any part of the assets
of the Association, real, personal, or mixed, including
contract rights, whether at the time owned or hereafter
acquired.
(j) To enter into, make, amend, perform, and carry out, or cancel
and rescind, contracts, leases, permits, management
agreements, and concession agreements for any lawful purposes
pertaining to its business.
(k) To make any guaranty with respect to securities, indebtedness,
notes, interest, contracts, or other obligations created by
any individual, partnership, association, corporation or other
<PAGE>
entity, and to secure such guaranties by encumbrance upon any
and all assets of the Association, to the extent that such
guaranty is made in pursuance of the purposes herein set
forth.
(l) To lend money for any of the purposes above set forth; to
invest its funds from time to time and take and hold real and
personal property as security for payment of funds so loaned
or invested.
(m) To promote and market the Resort Village as a world-class
destination resort.
(n) To bring, prosecute, and settle litigation for itself and the
Resort Village.
(o) To obtain insurance for the Association with respect to
workers' compensation, general liability, and any other
insurance it deems necessary or appropriate to protect the
Members and the Association.
(p) To repair or restore any Facilities following damage or
destruction or a permanent taking by the power of or power in
the nature or eminent domain or by an action or deed in lieu
of condemnation.
(q) To keep adequate books and records and implement the policies
and procedures for the inspection of the books and records of
the Association by Members in accordance with the terms of the
Bylaws.
(r) To prepare, adopt, amend, and disseminate budgets and other
information from time to time in accordance with the terms of
the Bylaws.
(s) To grant easements and rights of way over the Facilities owned
or leased by the Association and to approve signage for the
Resort Village and enter into contracts with a management
entity and other entities. Such contracts may, among other
things, obligate the Association to pay assessments and other
costs associated with the maintenance of Facilities that
benefit the Association.
(t) Subject to applicable law, to delegate to a manager by written
agreement all of the powers, duties, and responsibilities of
the Association referred to in this Agreement.
(u) To convey or subject to a mortgage all property owned and
rights held by the Association, including without limitation
Facilities and Assessments; provided, however, that such
actions shall not impair or affect the rights and easements
established under Article 2 of this Amended Agreement.
(v) To organize and sponsor events.
(w) To operate or participate in a transportation system within
the Resort Village and in connection therewith to purchase,
construct, own, or lease and maintain and repair such
<PAGE>
roadways, walkways, conveyors, Resort Village transportation
lifts, people movers, rail transport, buses, other vehicles,
and parking lots or parking structures as may be necessary or
convenient for the operation of the Resort Village. To operate
or participate in a transportation system between various
parts of the Park City, Kimball Junction, and Salt Lake City
area and/or between the Resort Village and other parts of the
United States and other areas, and in connection therewith to
enter into special fare program commitments with airlines, own
or lease such buses, rail transport, aircraft, or other
vehicles as may be necessary or convenient for operation of
the Resort Village, and provide for their maintenance and
repair.
(x) To provide, or to enter into agreements with third parties
pursuant to which such third parties may provide, cable
television, telecommunications, electronic communications, or
telephone services, or any service capturing, creating, or
transmitting television, telephone, telecommunications, or
electronic communications signals, and in connection
therewith, to approve or prohibit the placement of appropriate
satellite dishes, antennae, or other similar equipment with
the Resort Village.
(y) To construct, acquire, lease, operate, manage, and maintain
parking facilities within the Resort Village for general
resort guest utilization.
(z) To establish charges for use of Facilities and Functions to
assist the Association in offsetting the costs and expenses
attributable to the use of Facilities; provided that all
charges established shall be reasonable and shall be uniformly
applied with the exception that such charges may differentiate
between Member classifications and each Member shall be
obligated to and shall pay any such charges for use.
(aa) To provide for the care, operation, management, maintenance,
repair, and replacement of the Facilities.
(bb) To pay all costs imposed by, associated with, or incurred as a
result of the Development Agreement or other federal, state,
or local governmental laws, rules, or regulations, including
without limitation costs of benchmarking, studies, consultants
fees and costs, and performance costs.
(cc) To do everything necessary, suitable, convenient, or desirable
for the accomplishment of any of the purposes, the attainment
of any of the objects, or the furtherance of any of the powers
set forth in this Agreement, either alone or in connection
with other corporations, firms, or individuals, and either as
principal or agent, and to do every act or thing incidental or
appurtenant to, or growing out of, or connected with any of
the aforesaid objects, purposes, or powers.
(dd) To provide for the reimbursement to ASCRP of the development
cost charges already incurred by ASCRP in the development of
the Resort Village, as set forth in Section 4.9 hereof.
<PAGE>
(ee) To act in accordance with the requirements of the Development
Agreement and to ensure compliance therewith.
3.3 Certain Obligations and Rights of the Association. The obligations
and rights of the Association include, but are not limited to, the following.
(a) Events. The Association may organize and sponsor events,
including without limitation theatrical and musical
performances, sporting events and exhibitions, performances
and displays by local artists, and other events and
exhibitions.
(b) Property Maintenance Function. The Association shall provide
for the care, operation, management, maintenance, repair, and
replacement of all Facilities. This obligation shall include,
without limitation, (i) ensuring that the Facilities are
adequately lighted; (ii) maintaining the parking areas, walks,
trails, drives, malls, stairs, street furniture, and any
resort transportation, ice rink, forum, and other
infrastructure, and similar Facilities in consistently good
condition and attending to the removal of snow and the
application of sand and salt as is necessary for the customary
use and enjoyment of such Facilities; (iii) attending to the
maintenance of the open spaces of the Resort Village,
including public spaces and unimproved areas, and providing
care for the plants, trees, shrubs, and other vegetation in
the Resort Village up to the lot lines of the individual
buildings within the Resort Village; and (iv) plowing,
sanding, salting, and cleaning any roads and sidewalks within
the Resort Village.
(c) Rules and Regulations. The Association may make, amend, and
enforce rules and regulations applicable within the Resort
Village with respect to any of the Facilities, operations, or
Functions as a part of the Resort in addition to the
restrictions contained in Article VI hereof, including, but
not limited to, rules and regulations:
(i) to prevent or reduce fire hazard;
(ii) to regulate signs;
(iii) to regulate use of any and all Facilities;
(iv) to assure fullest enjoyment of use of the Facilities
by the persons entitled to enjoy and use the same;
(v) to protect and preserve property and property rights;
(vi) to promote the economic viability of the Resort
Village; and
(vii) to reasonably regulate the hours of operation for all
commercial operations.
<PAGE>
(viii) To ensure that buildings are built in accordance with
the architectural guidelines as developed,
administered, and enforced from time to time by the
Board of Trustees of the Association or its designee.
All rules and regulations adopted by the Association shall be
reasonable and shall be uniformly applied. The Association may
provide for enforcement of any such rules and regulations
through exclusion of violators from Facilities, or otherwise.
(d) Security. The Association may, but shall not be obligated to,
provide security within some portion or all of the Resort
Village.
(e) Marketing. The Association may provide a suitable and
continuing program to promote the Resort Village as a
desirable year-round destination, including but not limited to
stimulating participation in and coordinating major events;
ongoing Resort Village programming; advertising and placing
articles in news media; publishing brochures; establishing
uniform standards for promotional programs of individual
Members; involvement in lecture tours and ski shows;
encouraging responsible groups to hold conferences and
meetings within the Resort Village, and selling, coordinating,
and negotiating arrangements and accommodations for such
groups; conducting tour operations; publishing a newsletter;
providing and operating reception and information centers; and
such other activities as may be necessary or desirable for the
promotion of the Resort Village as determined by the
Association in its discretion. The Association may promote the
Resort village in conjunction with or through any organization
that may be engaged in the promotion of snow-related or other
sports and may pay its fair share of the costs and expense of
promotional activities of any such organization.
(f) Members' Enjoyment of Functions and Facilities. Each Member
shall be entitled to use and enjoy any Facilities suitable for
general use or the services provided by any Functions, and to
grant licenses for such use and enjoyment to its tenants,
guests, and invitees subject to such reasonable rules and
regulations that the Association may adopt and subject to such
reasonable and uniformly applied charges that the Association
may impose to offset costs and expenses, depreciation, and
capital expenses, subject to the provisions of this Agreement
and subject to the following specific limitations. All charges
established under this section shall be reasonable and shall
be uniformly applied, and each Member shall be obligated to
and shall pay any such charges for use. There shall be no
obstruction of any Facilities nor shall anything be stored in
or on any part of any Facilities without the prior written
consent of the Association. Nothing shall be done or kept on
or in any Facility that would result in the cancellation of
the insurance or any part thereof that the Association is
required to maintain pursuant to this Agreement or increase
the rate of the insurance or any part thereof over what the
Association, but for such activity, would pay, without the
prior written consent of the Association. Nothing shall be
done or kept on or in such Facilities that would be in
violation of any statute, rule, ordinance, regulation, permit,
<PAGE>
or other requirement of any governmental body. No damage to,
or waste of, Facilities shall be committed, and each Member
shall indemnify and hold the Association and the other Members
harmless against all loss resulting from any such damage or
waste caused by such Member.
(g) Employee Housing. The Association may provide employee housing
for Resort Village employees. In the event that the
Association constructs employee housing, the Mountain Member
shall contribute to the costs of construction of such housing
in an amount proportionate to the projected use of such
housing by employees of the Mountain Member at the time of
construction.
(h) Other Functions. The Association may undertake such other
Functions and activities as may be necessary or convenient for
the operation of the Resort Village, as determined by the
Association in its discretion, including without limitation
providing cooperative purchasing services, telephone answering
service, warehousing and delivery services, and central
laundry service for some or all Members.
3.4 Membership in the Association. There shall be one membership in the
Association attributable to fee simple title ownership, timeshare ownership,
club ownership, or Long Term Lease (where "Long Term Lease" means a lease of 25
years or more) of each Resort Property within the Resort Lands. Each such
membership shall be appurtenant to the fee simple title, timeshare or club
ownership to such Resort Property or Long Term Lease of such Resort Property.
The owner of a Resort Property, or lessee under a Long Term Lease of a Resort
Property, shall automatically be the holder of the membership appurtenant to
that Resort Property. Each owner of a Resort Property or lessee under a Long
Term Lease of a Resort Property shall automatically be entitled to the benefits
and subject to the burdens relating to the membership for that Resort Property.
If fee simple title to, or timeshare or club ownership of, a Resort Property is
held by more than one person or entity, or if a Long Term Lease is in the name
of more than one person or entity, the membership appurtenant to that Resort
Property or Long Term Lease shall be shared by all such persons or entities in
the same proportionate interest as such ownership or Lease of the Resort
Property is held.
3.5 Classes of Membership. The Association shall have the two (2)
classes of voting membership set forth below:
Class A: The Class A Members shall be American Skiing Company Resort
Properties, Inc. or its successors or assigns and the Mountain Member.
Class B: The Class B Members shall be the memberships attributable to
the Resort Property in The Canyons SPA Zone District other than the Class A
Members. Each Class B Member at the time this Agreement is recorded shall pay a
one-time fee of $1,500 (One Thousand Five Hundred Dollars) toward its
representative's fees and costs in negotiating and drafting this Agreement.
3.6 Board of Trustees.
<PAGE>
(a) Appointment and Election. The control and management of the
Association and the disposition of its funds and property
shall be vested in a seven-member Board of Trustees who need
not be Members of the Association. Members shall have the
right to elect Trustees as follows:
(i) Class B Members shall have the right to elect three
(3) members of the Board of Trustees, who shall hold
office for terms of two (2) years each. Each Class B
Member shall be entitled to one vote per square foot
of density allocated to such Member's Resort Property
by the Development Agreement. Cumulative voting shall
not be permitted.
(ii) The Class A Members shall appoint four (4) members of
the Board of Trustees, who shall hold office for a
term of two years each. Notwithstanding the
foregoing, at such time as certificates of occupancy
have been issued for 75% of the square footage
authorized to be constructed pursuant to the
Development Agreement, the Class A Member shall
thereafter only appoint three members of the Board of
Trustees, and the Class A Trustees, on one hand, and
the Class B Trustees, on the other, shall together
unanimously appoint a remaining at-large Trustee, who
shall serve for a term of two years. The at-large
Trustee appointed pursuant to the preceding sentence
shall be first appointed at the first regular or
special meeting of the Board of Trustees held after
the Class A Member becomes authorized to appoint only
three Trustees as provided above. Thereafter, the
Trustees other than the at-large Trustee shall
appoint the at-large Trustee every two years.
(iii) Any of the Trustees may serve for consecutive terms
if so appointed or elected.
(iv) The Trustees shall serve without compensation.
Members shall have no voting rights other than the right to
elect members of the Board of Trustees as set forth in this
Section 3.6.
(b) Resignations, Vacancies. Any trustee may resign at any time by
giving written notice to the president or the secretary of the
Association. Such resignation shall take effect at the time
specified, and unless otherwise specified therein, the
acceptance of such resignation shall not be necessary to make
<PAGE>
it effective. Any vacancy occurring in the Board of Trustees
by reason of resignation or death of any trustee elected by
Class B Members may be filled by the affirmative vote of a
majority of the Class B Trustees then in office, though not
less than a quorum. Any vacancy occurring in the Board of
Trustees by reason of resignation or death of any trustee
appointed by the Class A Member shall be filled by appointment
by the Class A Member. Any trustee elected or appointed to
fill any vacancy in the Board of Trustees shall serve until
the expiration of the term of his or her predecessor.
(c) General Powers. The Board of Trustees shall have and may
exercise all the powers of the Association except as are
expressly conferred upon the Members by law, the Articles of
Incorporation, or the Bylaws, or this Agreement as from time
to time in force and effect; provided, however, that he Board
of Trustees shall at no time be empowered to authorize any act
or omission that would place the Association in default of the
Development Agreement.
Prior to the time the Class A Member becomes authorized to
appoint only three Trustees as provided in subparagraph
(a)(iii) above, the following restrictions apply:
(i) The Board of Trustees may not take any of the actions
listed below without obtaining approval of five (5) of the
seven (7) Trustees:
A. increase or decrease the rate of the Real Estate
Transfer Assessment, the Retail Assessment, or the
Transient Occupancy Assessment, and after the first
three years of the Association's existence, the
Annual Member Assessment, all as defined in Article 4
of this Agreement;
B. authorize a single purpose capital commitment of
over $5,000,000 (Five Million Dollars), other than
for the golf course or the Association's contribution
to the people mover or to the parking garage, all of
which are contemplated by the Development Agreement
and described in further detail therein; or
C. lend or advance money or sell or lease any
property or right of the Association other than in
the ordinary course of business.
(ii) Approval of six of the seven Trustees shall be required
for the material alteration, repeal, or amendment of the
articles of incorporation or bylaws of the association;
(iii) Unanimous approval of the Trustees shall be required for
the following acts by the Trustees:
A. the implementation of any assessment other than
the Annual Member Assessment, the Transient Occupancy
Assessment, the Retail Assessment, or the Real Estate
Transfer Assessment;
B. the merger, dissolution, or liquidation of the
Association, which is also subject to County
approval.
<PAGE>
(d) Regular Meetings. Regular meetings of the Board of Trustees
may be held without call or formal notice at such places
within the State of Utah, and at such times as the Board may
from time to time by vote determine. Any business may be
transacted at a regular meeting. Until further determination,
the regular meeting of the Board of Trustees for the election
of officers and for such other business as may come before the
meeting may be held without call or formal notice immediately
after, and at the same place as, the annual meeting of
Members.
(e) Special Meetings. Special meetings of the Board of Trustees
may be held at any place within Utah at any time when called
by the president, or by two or more trustees, upon at lease
three days prior notice of the time and place thereof being
given to each Trustee by leaving such notice with him or her
at his or her residence or usual place of business, or by
mailing or telegraphing it prepaid, and addressed to such
Trustee at his or her post office address as it appears on the
books of the Association, or by telephone or facsimile
transmission. Notices shall state the purposes of the meeting.
No notice of any adjourned meeting of the Trustees shall be
required.
(f) Quorum. Prior to the appointment of the at-large Trustee, a
minimum of three Class A Trustees and two Class B Trustees
shall constitute a quorum; and after the appointment of the
at-large Trustee, a majority of the number of Trustees fixed
by the Bylaws shall constitute a quorum for the transaction of
business. A lesser number than the quorum may adjourn any
meeting from time to time. When a quorum is present at any
meeting, a majority of the Trustees in attendance shall,
except where a larger number is required by law, by the
Articles of Incorporation, the Bylaws, or this Agreement as
from time to time in force and effect, decide any question
brought before such meeting.
(g) Waiver of Notice. Before, at, or after any meeting of the
Board of Trustees, any Trustee may, in writing, waive notice
of such meeting and such waiver shall be deemed equivalent to
the giving of such notice. Attendance by a Trustee at any
meeting of the Board shall be a waiver of notice by him or her
except when a Trustee attends the meeting for the express
purpose of objecting to the transaction of business because
the meeting is not lawfully called or convened.
(h) Informal Action by Trustees. Any action required or permitted
to be taken at a meeting of the Trustees may be taken without
a meeting if a consent in writing, setting forth the action so
taken, shall be signed by all of the Trustees entitled to vote
with respect to the subject matter thereof. Such consent shall
have the same force and effect as a unanimous vote of the
Trustees.
(i) Presence at Meetings. Any Trustee may participate in a regular
or special meeting of the Board of Trustees by, and such
meeting may be conducted through the use of, any means of
communication by which all Trustees participating may hear
<PAGE>
each other during the meeting. A Trustee participating in a
meeting by this means is deemed to be present in person at the
meeting.
(j) Dispute Resolution. The Board shall first exhaust all efforts
to avoid disputes over the interpretation or enforcement of
this Agreement. In the event that an impasse occurs, the
Trustees shall vote on the appointment of a mediator, and if a
mediator is approved by five of the seven Trustees, such
mediator shall be appointed and empowered to render an
enforceable resolution.
(k) The Board of Trustees shall owe a fiduciary duty to all
Members in accordance with Utah law.
3.7 Annual Meeting.
(a) Annual Meeting. The annual meeting of the Members shall be
held at a place in the Resort Village designated by the Board
of Trustees the first Saturday of November in each year, or at
such other date designated by the Board of Trustees, for the
purposes of electing Trustees. The purpose of the annual
meeting shall be to elect Trustees and for such other purposes
as the Board of Trustees shall determine.
(b) Quorum. Except as otherwise provided in the Articles of
Incorporation or the Bylaws, the presence in person or by
proxy of Members of a class who are entitled to vote more than
20 percent of the total votes for the Members of such class
shall constitute a quorum for such class for the election of
members of the Board of Trustees.
(c) Proxies. Votes may be cast in person or by proxy. Every proxy
must be executed in writing by the Member or his or her duly
authorized attorney in fact. No proxy shall be valid after the
expiration of eleven months from the date of its execution,
and every proxy shall automatically cease at such time as the
Member granting the proxy no longer qualifies as a Member in
the class of membership for which vote the proxy was given.
(d) Majority Vote. At the annual meeting, if a class quorum is
present, the affirmative vote of a majority of the votes
represented at the meeting, in person or by proxy, shall be
the act of the Members of such class unless the vote of a
greater number is required by law, the Articles of
Incorporation, or the Bylaws as from time to time in force and
effect.
3.8 Officers of the Association.
(a) Officers. The Board of Trustees shall appoint the following
officers of the Association, which officers need not be
members of the Board of Trustees: a president, one or more
<PAGE>
vice presidents, a secretary, and a treasurer. The Board of
Trustees may appoint such other officers, assistant officers,
committees, and agents as it may consider necessary or
advisable, who shall hold their offices for such terms and
have offices, except that no person may simultaneously hold
the offices of president and secretary.
(b) Removal of Officers. Upon an affirmative vote of a majority of
the voting members of the Board of Trustees, any officer may
be removed, either with or without cause, and a successor
appointed at any regular meeting of the Board of Trustees or
at any special meeting of the Board called for such purpose.
(c) Vacancies. A vacancy in any office, however occurring, may be
filled by the Board of Trustees for the unexpired portion of
the term.
(d) President. The president shall be the chief executive officer
of the Association. He or she shall have the general and
active control of the affairs and business of the Association
and general supervision of its officers, agents, and
employees.
(e) Vice Presidents. The vice presidents shall assist the
president and shall perform such duties as may be assigned to
them by the president or by the Board of Trustees. In the
absence of the president, the vice president designated by the
Board of Trustees or (if there shall be no such writing)
designated in writing by the president shall have the powers
and perform the duties of the president.
(f) Secretary. The secretary shall: (i) keep the minutes of the
proceedings of the Members and the Board of Trustees; (ii) see
that all notices are duly given in accordance with the
provisions of this Agreement and the Bylaws, the Articles of
Incorporation, and as required by law; (iii) be custodian of
the corporate records; keep at the Association's office a
record containing the names and addresses of all Members, the
designation of the Resort Property owned or leased by each
Member, and, if such Resort Property is mortgaged and the
mortgagee has given the Association notice thereof, the name
and address of the mortgagee; (v) in general, perform all
duties incident to the office of secretary and such other
duties as from time to time may be assigned to him or her by
the president or by the Board of Trustees.
(g) Treasurer. The treasurer shall be the principal financial
officer of the Association and shall have the care and custody
of all funds, securities, evidences of indebtedness and other
personal property of the Association and shall deposit the
same in accordance with the instructions of the Board of
Trustees. The treasurer shall receive and give receipts and
acquittances for moneys paid in on account of the Association,
and shall pay out of the funds on hand all bills, payables,
and other just debts of the Association of whatever nature.
The treasurer shall perform all other duties incident to the
office of the treasurer and upon request of the Board of
Trustees, give the Association a bond in such sums and with
such sureties as shall be satisfactory to the Board,
<PAGE>
conditioned upon the faithful performance of his or her duties
and for the restoration to the Association of all books,
papers, vouchers, money, and other property or whatever kind
in the treasurer's possession or under his or her control
belonging to the Association. The treasurer shall have such
other powers and perform such other duties as may be from time
to time prescribed by the Board of Trustees or the president.
3.9 Assignment of Rights or Obligations to a Lessee. An owner of fee
simple title to a Resort Property may assign to a lessee under a lease with a
term of 25 years or less all (but not less than all) of such owner's rights and
obligations under this Agreement as a Member in the Association, and may enter
into an arrangement with such lessee under which the lessee shall agree to
assume all of such Member's obligations hereunder as a Member of the
Association. The Association shall recognize any such lease or assignment
provided that, to be effective with respect to the Association, such lease or
assignment shall be in writing, shall be in terms deemed satisfactorily specific
by the Association, and a copy thereof shall be filed with and approved by the
Association. Notwithstanding the foregoing, no Member shall be permitted to
relieve himself or herself of the ultimate responsibility for fulfillment of all
obligations hereunder of a Member arising during the period she or he is a
Member.
3.10 Limitation of Liability of Board of Trustees.
(a) The members of the Board of Trustees, the officers, and any
assistant officers, agents, and employees of the Association
(i) shall not be liable to the Members of the Association as a
result of their activities as such for any mistake or
judgment, negligence, or otherwise, except for their own
willful misconduct or bad faith; (ii) shall have no personal
liability in contract to a Member of the Association or any
other person or entity under any agreement, instrument, or
transaction entered into by them on behalf of the Association
in their capacity as such; (iii) shall have no personal
liability in tort to any Member of the Association or any
person or entity, direct or imputed, by virtue of acts
performed by them, except for their own willful or wanton
misfeasance, gross negligence, or bad faith, nor for acts
performed for them in their capacity as such; and (iv) shall
have no personal liability arising out of the use, misuse, or
condition of the Resort Village or the Facilities that might
in any way be assessed against or imputed to them as a result
for by virtue of their capacity as such.
(b) If a member of the Board of Trustees is sued for liability for
actions undertaken in his or her role as a member of the Board
of Trustees, the Association shall indemnify such Trustee for
such Trustee's losses or claims, and undertake all costs of
defense, until and unless it is proven that such Trustee acted
with willful or wanton misfeasance or with gross negligence.
After such proof, the Association is no longer liable for the
cost of defense, and may recover costs already expended from
the Trustee who so acted. Members of the Board of Trustees are
not personally liable to the victims of crimes occurring in
the Resort Village. Punitive damages may not be recovered
against the Association, but may be recovered from persons
whose activity gave rise to the damages.
3.11 Right to Dispose of Facilities. The Association shall have full
power and authority to sell, lease, grant rights in, transfer, provide exclusive
<PAGE>
or limited access to, encumber, abandon, or dispose of any Facilities owned by
the Association in the operation and management of the Village, other than any
property on Participants' Parcels.
3.12 Governmental Successor. Any of the Facilities and any Functions
carried out by the Association may be turned over to a governmental entity that
is willing to accept and assume the same under the terms and conditions of this
Agreement.
ARTICLE IV
ASSESSMENTS
4.1 Obligation to Pay Assessments. Each Member, in exchange for the
easements and other benefits conferred by this Agreement, covenants and agrees
to pay to the Association the Annual Member Assessments, Retail Assessments,
Transient Occupancy Assessments, and Real Estate Transfer Assessments and
charges, fines, penalties, or other amounts to be levied, fixed, established and
collected as set forth in this Agreement and the Articles of Incorporation,
Bylaws, and rules and regulations of the Association as from time to time in
force and effect.
4.2 Purpose of Assessments. The assessments levied and any charge,
fine, penalty, or other amount collected by the Association shall be used
exclusively to pay expenses that the Association may incur in performing any
actions permitted or required under this Agreement or its Articles of
Incorporation or Bylaws as from time to time in force and effect, including but
not limited to operating expenses and the costs of acquiring, constructing, and
purchasing Facilities and performing Functions. This Section 4.2 shall not
prohibit the Association from establishing appropriate reserves to defray
anticipated expenses and investing all excess cash in a prudent manner.
4.3 Annual Member Assessments. The Association shall initially levy and
collect from each member an Annual Member Assessment. The Annual Member
Assessment shall be set at the initial rate of $.40 per square foot for the
first three years of the Association's operation for all developed improvements
to property that are substantially complete; thereafter, the Board of Trustees
shall review the Annual Member Assessment rate and shall adjust it to the level
necessary to maintain the Resort Village.
(a) All Annual Member Assessments to be levied shall be levied
monthly in advance or at such other time as the Association
may decide and shall be payable within thirty (30) days after
being levied, and each such assessment not paid within thirty
(30) days of the date (the "Levy Date"), which is the date of
mailing of notice of the assessment, shall accrue interest
until fully paid at 5% (five percent) per annum over the rate
of interest announced from time to time by BankBoston, N.A.,
as its "prime rate" for commercial loans; such interest shall
be payable on demand computed monthly, and if unpaid,
compounded monthly, not in advance, at the rate so calculated
as of thirty (30) days after the Levy Date, and all accruing
interest shall become a part of the assessment due and owing
to the Association. All other amounts owed to the Association
shall bear interest at the same rate calculated and payable in
the same manner.
<PAGE>
(b) The Annual Member Assessments shall be used solely for
maintenance of the Resort Village, either for that budget year
or as a sinking fund for future maintenance or replacement of
worn facilities.
4.4 Retail Assessments.
(a) The Association shall levy upon and collect from each
Commercial Resort Property Member in the Association an
assessment which shall be known as a "Retail Assessment," with
respect to (a) all sales of tangible personal property made by
such Member or made, consummated, conducted, or transacted at,
from, in connection with, or in any way arising out of or
associated with such Member's Resort Property, and (b) all
sales of services, including but not limited to equipment
rental made, performed, or rendered by or on behalf of such
Member within the Resort Village that are subject to Utah
state sales tax pursuant to Utah Code Annotated 59-12-101
("Utah Sales Tax"), excluding, however, any lodging rentals
and any other exclusions from and conditions to the definition
of Commercial Resort Property Member in Sections 1.6 and 1.7
above. The Retail Assessment rate shall be 2.5% (two and
one-half percent), with the exception that for temporary
tenants during the period through March 31, 2000, the Retail
Assessment rate shall be 1% (one percent).The Retail
Assessment shall be applied an amount in addition to, and
shall be applied to the price or charge of, any transaction as
described above. The Retail Assessment rate may be adjusted by
the Board after three years as provided in Section 3.6(c)
herein. Retail Assessments shall not apply to any gross
receipts from sales in connection with (i) any event sponsored
by the Association, or (ii) any event sponsored by an
organization exempt from Utah Sales Tax, but only to the
extent such gross receipts relate to purchases by the
organization for official organization business that are
therefore exempt from Utah Sales Tax.
(b) The Retail Assessments due with respect to a Member's Resort
Property shall be due and payable to the Association, without
notice by the Association, each time and at such time as the
Utah Sales Taxes associated with such Resort Property are
required to be remitted or paid to the State of Utah. Each
such Member shall also deliver to the Association, without
notice from the Association, true and correct copies of all
written reports, returns, statements, records, and
declarations, including any supplements or amendments thereto
(collectively, the "Sales Reports") made or provided to the
State of Utah with respect to transactions occurring at, from,
<PAGE>
in connection with, or in any way arising out of such Member's
Resort Property under the provisions of the Utah Sales Tax
Act, at such time as such Sales Reports are required to be
made to the State of Utah. If any subsequent adjustments,
additions, or modifications are made to any Utah Sales Tax
remitted or paid or Sales Report made with respect to
transactions occurring at, from, in connection with, or in any
way arising out or such Member's Resort Property to the State
of Utah, such Member shall within 30 days thereafter so notify
the Association and provide it with true and complete copies
of all Sales Reports or other written material issued or
received by such Member with respect thereto. If any
adjustment increases the amount of Utah Sales Tax required to
be remitted with respect to a Member's Resort Property or
results in a refund of such tax, such Member shall accordingly
pay an appropriate additional Retail Assessment or receive an
appropriate refund from the Association of any excess Retail
Assessment previously paid. Subject to the foregoing, the
Association shall have the power and authority to determine
all matters in connection with the Retail Assessment,
including amounts thereof and how and whether the assessment
shall be reflected on bills and sales slips rendered in any
transaction; rules and regulations on record keeping; and
auditing by the Association of such records.
(c) Each Member shall be obligated to pay the Retail Assessment
arising from sales or services transacted at, from, in
connection with, or in any way arising out of or associated
with such Member's Resort Property, even if such Member is not
responsible for such sales or services and each Member shall
comply with any determinations made by the Board of Trustees
with respect to such Retail Assessments. Any portion of any
Retail Assessment not paid by any Member when due and payable
shall become a lien on and against all of the real property
owned by such Member in the Resort Village pursuant to Section
4.12.
(d) All Retail Assessments to be levied shall be levied at such
time as the Utah Sales Tax associated with such Resort
Property and shall be payable within thirty (30) days after
being levied, and each such assessment not paid within thirty
(30) days of the date (the "Levy Date"), which is the date of
mailing of notice of the assessment, shall accrue interest
until fully paid at 5% (five percent) per annum over the rate
of interest announced from time to time by BankBoston, N.A.,
as its "prime rate" for commercial loans; such interest shall
be payable on demand computed monthly, and if unpaid,
compounded monthly, not in advance, at the rate so calculated
as of thirty (30) days after the Levy Date, and all accruing
interest shall become a part of the assessment due and owing
to the Association. All other amounts owed to the Association
shall bear interest at the same rate calculated and payable in
the same manner.
(e) Funds collected from the Retail Assessments shall be used only
for transportation expenses of the Resort Village and for
marketing of the Resort Village, unless there are any funds
collected in excess of the budgeted annual transportation and
marketing expenses, in which case such surplus funds may be
used first for maintenance of the Resort Village if there is a
shortfall of maintenance funds, and second for capital
projects of the Association, including reimbursement of
American Skiing Company.
4.5 Transient Occupancy Assessment.
(a) The Association shall levy upon and collect from each Lodging
Resort Property Member in the Resort Village an assessment,
<PAGE>
which shall be known as a "Transient Occupancy Assessment" or
"TOA," with respect to all transient occupancy rentals made by
or on behalf of such Member within the Resort Village that are
subject to the Transient Room Tax Ordinance of Summit County
as in effect on the date this Agreement is recorded. The TOA
shall be set as an amount in addition to, and shall be a
percentage or rate applied to the charge of any transaction as
described above. The percentage or rate for the TOA shall be
2.5 % (two and one-half percent), and may be adjusted by the
Board after three years as provided in Section 3.6(c).
(b) The TOA due with respect to a Member's Resort Property shall
be due and payable to the Association, without notice by the
Association, each time and at such time as the Transient Room
Tax associated with such Resort Property is required to be
remitted or paid to Summit County. Each such Member shall also
deliver to the Association, without notice from the
Association, true and correct copies of all written reports,
returns, statements, records, and declarations, including any
supplements or amendments thereto (collectively, the "Lodging
Reports") made or provided to Summit County in connection with
any charges occurring at, from, in connection with, or in any
way arising out of such Member's Resort Property in connection
with any charges under the provisions of the Transient Room
Tax Ordinance of Summit County, at such times as such Lodging
Reports are required to be made to Summit County. If any
subsequent adjustments, additions, or modifications are made
to any Summit County Transient Occupancy Tax remitted or paid
or Lodging Report made to Summit County with respect to
transactions occurring at, from, in connection with, or in any
way arising out of such Member's Resort Property, such Member
shall within 30 days thereafter so notify the Association and
provide it with true and complete copies of all Lodging
Reports or other written material issued or received by such
Member with respect thereto. If any adjustment increases the
amount of Summit County Transient Occupancy Tax required to be
remitted with respect to a Member's Resort Property or results
in a refund of such tax, such Member shall accordingly pay an
appropriate additional TOA or receive an appropriate refund
from the Association of any excess TOA previously paid.
Subject to the foregoing, the Association shall have the power
and authority to determine all matters in connection with the
TOA, including amounts thereof and how and whether the TOA
shall be reflected on bills and sales slips rendered in any
transaction; rules and regulations or record keeping; and
auditing by the Association of such records.
(c) Each Member shall be obligated to pay the TOA arising from
lodging rentals transacted at, from, in connection with, or in
any way arising out of or associated with such Member's Resort
Property, even if such Member is not responsible for such
lodging rentals, and each Member shall comply with any
determinations made by the Board of Trustees with respect to
such assessments. The TOA shall not apply to the right of the
<PAGE>
owner of a timeshare estate or the guest of such owner to
occupy the unit in which the owner retains that interest.
"Guest" of an owner includes, without limitation, a person
occupying a unit pursuant to any form of exchange program. Any
portion of any TOA not paid by any Member when due and payable
shall become a lien on and against all of the real property
owned by such Member in the Resort Village.
(d) All Transient Occupancy Assessments to be levied shall be
levied at such time as the Transient Room Tax of Summit County
is levied by Summit County and shall be payable within thirty
(30) days after being levied, and each assessment not paid
within thirty (30) days of the date (the "Levy Date"), which
is the date of mailing of notice of the assessment, shall
accrue interest until fully paid at 5% (five percent) per
annum over the rate of interest announced from time to time by
BankBoston, N.A., as its "prime rate" for commercial loans;
such interest shall be payable on demand computed monthly, and
if unpaid, compounded monthly, not in advance, at the rate so
calculated as of thirty (30) days after the Levy Date, and all
accruing interest shall become a part of the assessment due
and owing to the Association. All other amounts owed to the
Association shall bear interest at the same rate calculated
and payable in the same manner.
(e) Funds collected from the Transient Occupancy Assessments shall
be used only for (i) transportation expenses as described in
the Development Agreement, and (ii) marketing of the Resort
Village, unless there are any funds collected in excess of the
budgeted annual transportation and marketing expenses, in
which case such surplus funds may be used first for
maintenance of the Resort Village if there is a shortfall of
maintenance funds, and second for capital projects of the
Association, including reimbursement of ASCRP.
4.6 Real Estate Transfer Assessments. Upon the occurrence of a
Transfer, as defined below, the Transferee under such Transfer shall pay to the
Association for the benefit of the Association a real estate transfer assessment
(the "Real Estate Transfer Assessment") equal to the Fair Market Value, as
defined below, of the Resort Property subject to transfer, multiplied by the
Real Estate Transfer Assessment Rate shall be 2% (two percent) of the Fair
Market Value of improved land, and 1% (one percent) of the Fair Market Value for
unimproved land. The Real Estate Transfer Assessment may be adjusted by the
Board as provided by Section 3.6(c) herein. Each Member shall be obligated to
pay and shall pay to the Association the Real Estate Transfer Assessment levied
with respect to such owner's site and each Member shall comply with any
determinations made by the Board of Trustees with respect to such assessments.
Proceeds of the Real Estate Transfer Assessments shall be segregated in a fund
to be known as the "Sinking Fund," as described in subparagraph (d) below.
(a) Definitions.
"Transfer" means, whether in one transaction or in a series of related
transactions, any conveyance, assignment, lease, or other transfer of beneficial
ownership of any Resort Property, including but not limited to (1) the
conveyance of fee simple title to any Resort Property, (2) the transfer of any
ownership interest in any timeshare or fractional ownership interest or vacation
club interest; (3) the transfer of more than 50 percent of the outstanding
<PAGE>
shares of the voting stock of a corporation which, directly or indirectly, owns
one or more Resort Property, and (4) the transfer of more than 50 percent of the
interest in net profits or net losses of any partnership, joint venture, limited
liability company, or other entity which, directly or indirectly, owns one or
more Resort Property, but "Transfer" shall not mean or include the Transfers
excluded under subparagraph (b) below.
"Transferee" means all parties to whom any interest passes by a
transfer, and each party included in the term "Transferee" shall have joint and
several liability for all obligations of the Transferee under this section.
"Fair Market Value" of a Resort Property subjected to Transfer means,
in the case of a Transfer that is in all respects a bona fide sale, the
consideration, as such term is defined below, given for the Transfer; provided,
however, that the value of timeshare interests and timeshare estates and
vacation club ownership interests, for purposes of determining Fair Market
Value, shall be determined by valuing the real property interest associated with
the timeshare interest or timeshare estate, exclusive of the value of any
intangible property and rights associated with the acquisition, operation,
ownership, and use of the timeshare interest or timeshare estate, including the
fees and costs associated with the sale of the timeshare interests and timeshare
estates that exceed those fees and costs normally incurred in the sale of other
similar properties, the fees and costs associated with the operation, ownership,
and use of timeshare interests and timeshare estates, vacation exchange rights,
and benefits available to a timeshare unit owner. In case of a Transfer that is
a lease or is otherwise not in all respects a bona fide sale, Fair Market Value
of the Resort Property subjected to Transfer shall be determined by the
Association. A transferee may make written objection to the Association's
determination within 15 (fifteen) days after the Association has given notice of
such determination, in which event the Association shall obtain an appraisal, at
the Transferee's sole expense, from a MAI real estate appraiser of good
reputation, who is qualified to perform appraisals in Utah, who is familiar with
Summit County and Park City area real estate values, and who shall be selected
by the Association. The appraisal so obtained shall be binding on both the
Association and the transferee. Notwithstanding above provisions to the
contrary, where a Transferee does not object within 15 days after the time
required by this section for objecting, the Transferee shall be deemed to have
waived all right of objection concerning Fair Market Value, and the
Association's determination of such value shall be binding.
"Consideration" means the total of money paid and the Fair Market Value
of any property delivered, or contracted to be paid or delivered, in return for
the Transfer of any Resort Property, and includes the amount of any note,
contract indebtedness, or rental payment reserved in connection with such
Transfer, whether or not secured by any lien, deed of trust, or other
encumbrance, given to secure the transfer price, or any part thereof, or
remaining unpaid on the property at the time of Transfer, whether or not assumed
by the Transferee. The term "consideration' does not include the amount of any
outstanding lien or encumbrance for taxes, special benefits or improvements, in
favor of the United States, the State of Utah, or a municipal or quasi-municipal
governmental corporation or district.
(b) Exclusions. The Real Estate Transfer Assessment shall not
apply to any of the following, except to the extent that they
are used for the purpose of avoiding the Real Estate Transfer
Assessment:
<PAGE>
(i) Any Transfer to the United States, or any agency or
instrumentality thereof, the State of Utah, any
county, city, municipality, district, or other
political subdivision of the State of Utah.
(ii) Any Transfer to the Association.
(iii) Any Transfer, whether outright or in trust, that is
for the benefit of the transferor or the transferor's
relatives (including the transferor's spouse), but
only if there is no more than nominal consideration
for the Transfer. For the purposes of this exclusion,
the relatives of a transferor shall include all
lineal descendants of any grandparent of the
transferor, and the spouses of the descendants. Any
person's stepchildren and adopted children shall be
recognized as descendants of that person for all
purposes of this exclusion.
(iv) Any Transfer arising solely from the termination of a
joint tenancy or the partition of property held under
common ownership or in connection with a divorce,
except to the extent that additional consideration is
paid in connection therewith.
(v) Any Transfer or change of interest by reason of
death, whether provided for in a will, trust, or
decree of distribution, or by reason of the
dissolution or winding up of any business entity.
(vi) Any Transfer made solely for the purpose of
confirming, correcting, modifying, or supplementing a
transfer previously recorded, making minor boundary
adjustments, removing clouds on titles, or granting
easements, rights of way, or licenses.
(vii) Any Transfer pursuant to any decree or order of a
court of record determining or vesting title,
including a final order awarding title pursuant to a
condemnation proceeding, but only where such decree
or order would otherwise have the effect of causing
the occurrence of a second assessable transfer in a
series of transactions which includes only one
effective transfer of the right to use or enjoyment
of a Resort Property.
(viii) Any lease of any Resort Property (or assignment or
transfer or any interest in any such lease) for a
period of less than 25 years (including renewal
options).
(ix) Any Transfer solely of minerals or interests in
minerals.
(x) Any Transfer to secure a debt or other obligation or
to release property that is security for a debt or
<PAGE>
other obligation, including transfers in connection
with foreclosure or a deed of trust or mortgage or
transfers in connection with a deed given in lieu of
foreclosure.
(xi) The subsequent Transfer or Transfers of a Resort
Property involved in a "tax free" or "tax deferred"
trade under the Internal Revenue Code wherein the
interim owner acquires property for the sole purpose
of reselling that property within 30 days after the
trade. In these cases, the first Transfer of title is
subject to the Real Estate Transfer Assessment and
subsequent Transfers will only be exempt as long as a
Real Estate Transfer Assessment has been paid in
connection with the first Transfer of such Resort
Property in such exchange.
(xii) Any Transfer constituting a "tax free" or "tax
deferred" exchange under Section 1031 of the Internal
Revenue Code, so long as both properties involved in
such exchange are located within the SPA; or any
Transferor Transfers of Resort Lands in exchange for
other Resort Lands, but without additional
Consideration being exchanged by the transferor or
transferee.
(xiii) The Transfer or Transfers of Resort Lands in exchange
for other Resort Lands, but without additional
Consideration being exchanged by the transferor or
transferee, for the purpose of making boundary line
adjustments, or to facilitate the location and
development of Access Easements, Pedestrian Pathways,
Utility Lines, or other easements, rights of way, or
licenses.
(xiv) The Transfer of a Resort Property to an organization
that is exempt from federal income taxation under
Section 501(c)(3) of the Internal Revenue Code, as
amended, provided that the Association specifically
approves such exemption in each particular case.
(xv) Any transfer made by a corporation or other entity,
for consideration, (i) to any other corporation or
entity that owns 100 percent of its equity securities
(a "Holding Company") or (2) to a corporation or
entity whose stock or other equity securities are
owned, directly or indirectly, 100 percent by such
Holding Company.
(xvi) Any Transfer solely of water or water rights.
(xvii) Any Transfer from American Skiing Company, ASCRP, ASC
Utah, or any or its or their subsidiaries or
affiliates pursuant to a purchase contract or
purchase and sale agreement for interests or units in
the Grand Summit Resort Hotel at The Canyons and
Sundial Lodge Pavilions B and C entered into prior to
the Effective Date of this Amended Agreement, and any
subsequent transfers of those properties.
<PAGE>
(xviii) Any Transfer of two or more fractional interests,
condominium units, or other Resort Property by a
mortgagee or an affiliate thereof to an affiliate of
such mortgagee or to a third party, where the intent
of such transferee is not to make personal use of
such fractional interest, condominium unit, or other
Resort Property, but is rather to resell the same.
(xix) Any Transfer to an affiliated party, where
"affiliated party" means any entity that controls, is
controlled by, or is under common control with
another person or entity, including control through
voting interests, management agreements, or other
arrangements resulting in effective control over the
management of the affairs of such entity.
(xx) Any Transfer to American Skiing Company or its
affiliates or subsidiaries from the Lessor pursuant
to the terms and conditions of the Lease identified
in Recital B hereto.
(c) All Real Estate Assessments to be levied shall be levied at
the time of a Transfer and shall be payable within thirty (30)
days after being levied, and each assessment not paid within
thirty (30) days of the date (the "Levy Date"), which is the
date of mailing of notice of the assessment, shall accrue
interest until fully paid at 5% (five percent) per annum over
the rate of interest announced from time to time by
BankBoston, N.A., as its "prime rate" for commercial loans;
such interest shall be payable on demand computed monthly, and
if unpaid, compounded monthly, not in advance, at the rate so
calculated as of thirty (30) days after the Levy Date, and all
accruing interest shall become a part of the assessment due
and owing to the Association. All other amounts owed to the
Association shall bear interest at the same rate calculated
and payable in the same manner.
(d) There shall be a fund known as a "Sinking Fund" into which all
proceeds from the Real Estate Transfer Assessments shall be
deposited. The Association shall use the Sinking Fund only for
capital projects and reimbursement of ASCRP as provided in
Section 4.9 below. The priorities of the Sinking Fund shall be
in the following order: (i) the golf course required under the
Development Agreement and all other amenities required by the
Development Agreement to be provided by the Association on a
timely basis; (ii) reimbursement of ASCRP in accordance with
Section 4.9 below; provided, however, that if third party
financing for the golf course is obtained, then reimbursement
of ASCRP shall replace the golf course as the first priority
of the sinking Fund so long as such payments do not cause a
default in the Development Agreement; and (iii) all other
capital projects required by the Development Agreement.
"Capital projects" include without limitation any of the
following: to acquire, own, lease, operate, build, manage,
maintain, rent, sell, develop, encumber, hold, and otherwise
<PAGE>
deal in and with any Facilities including but not limited to
the golf course required by the Development Agreement;
buildings and other structures; employee housing; daycare
facilities; teen centers; roads, walkways, streets, and
pedestrian paths; parks, playgrounds, open spaces, gardens,
fountains, common areas and public areas; an amphitheater, a
forum (other than the main forum, which shall be built by
ASCRP), or other public entertainment or gathering areas; a
jumbotron or video walls; utility lines and systems; outdoor
lighting systems; waterways; landscaping, including without
limitation plants, trees, shrubs, and grass; a medical clinic;
cross country ski facilities; pedestrian, hiking, equestrian,
and biking trails; equestrian facilities; ice rinks; swimming
pools, saunas, steam baths, and spas; tennis courts and other
game courts, game areas, and recreational amenities; and such
uses as may be appropriate for use in connection with the
operation and maintenance of a world class resort village, in
the reasonable discretion of the Association; and all costs
imposed by, associated with, or incurred as a result of the
Development Agreement or other federal, state, or local
governmental laws, rules, or regulations, including without
limitation costs of benchmarking, studies, consultants fees
and costs, and performance costs; provided, however, that
1. the Association will be responsible for funding a minimum
of 50% of the costs of construction and operation of the
people mover planned pursuant to the Development Agreement;
and
2. the Association will be responsible for funding a minimum
of 25% of the costs of construction and operation of the
parking structure planned pursuant to the Development
Agreement.
4.7 Obligations of The Mountain Member. The Mountain Member shall
satisfy its obligation to pay an annual assessment by annually committing to
spend a certain amount of money on maintenance of, marketing of, and
transportation for the Resort Village. This obligation shall be known as the
Mountain Member Annual Obligation. During the Association's first fiscal year,
the Mountain Member shall expend a minimum of $250,000 as the Mountain Member
Annual Obligation. For each fiscal year thereafter, the Mountain Member's Annual
Obligation shall be a base of $250,000 until paid annual skier visits reach
250,000; thereafter, the Mountain Member's Annual Obligation shall be increased
in proportion to the increase in the number of paid annual skier visits from
250,000. In the event that the Mountain Member expends more than the obligated
amount in any particular fiscal year on maintenance and transportation, the
Mountain Member shall receive a credit toward the next year's or subsequent
years' Mountain Member Annual Obligations in such excess amount.
4.8 Books. The Association or its designee shall keep and maintain
separate accounts of all income and expenditures relating to each Function
within the Resort Village and in doing so shall allocate its or its designee's
administrative costs to such Functions on a reasonable basis. The Function Cost
shall be allocated to the appropriate Cost Center.
4.9 Reimbursement of ASCRP.
(a) A priority of the Association will be to reimburse ASCRP for
the development costs it has incurred on behalf of the Resort
Village. The amount to be reimbursed ASCRP is set at a fixed
amount of $4,000,000 plus interest. To meet this obligation,
the Association will execute a promissory note to ASCRP for
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the debt within 30 days of the execution of this Agreement,
with fixed interest at 10% and an initial amortization period
of twenty (20) years. Any excess funds in the Association at
each year end that are not required to fund any Association
obligations shall be paid to ASCRP toward the Reimbursement
Amount. In addition, the Association will immediately
undertake commercially reasonable efforts to replace this
promissory note by obtaining third party financing to repay
ASCRP in full, with debt service amortized over as long a
period as possible in order to minimize the annual burden on
the Association, and if the Association is unable to
immediately obtain third party financing, it shall continue to
make commercially reasonable efforts to obtain such financing.
In the event the Association repays the Reimbursement Amount
within three years of the date of this Agreement, interest
charges on the promissory note executed by the Association to
ASCRP will be reduced by 50%.
(b) The parties to this Agreement recognize and agree that ASCRP,
ASC Utah, or their affiliates or subsidiaries have the right
to establish fees and charges for utilization of all utility
infrastructure owned by such parties, including without
limitation sewer, water, electricity, gas, and cable, on a
user pay basis.
4.10 Budget. The Association shall, not later than thirty (30) days
following the completion of each fiscal year of the Association, cause to be
prepared and shall approve a Budget for the next fiscal year (including a
reasonable allowance for contingencies) (the "Budget"). The Budget shall set
forth the anticipated Function Costs for each Function of the Association,
including adequate reserves.
4.11 Billing. All Assessments levied hereunder shall be mailed or hand
delivered to each Member at such Member's address as set forth in this
Agreement. For purposes of billing, each assessment of a Lodging Resort Property
or a Residential Resort Property that is a condominium shall be sent to the
condominium association of which such Lodging Resort Property Member or
Residential Resort Property Member is a member and the condominium association
shall be responsible for paying the assessments in full, notwithstanding any
failure of the individual unit or fractional share owners to pay their pro rata
portion of the assessment.
4.12 Lien Rights. All Assessments, including Annual Member Assessments,
Retail Assessments, Transient Occupancy Assessments, and Real Estate Transfer
Assessments, due and unpaid shall constitute and each Member hereby grants to
the Association, with power of sale, a lien and security interest on the Resort
Property to which such Assessments are attributable, to the extent of such
unpaid Assessments, together with all interest, collection, and enforcement
charges thereon, including attorney's fees and costs. The Association is
authorized to give the Summit County, Utah Recorder's office written notice of
the Assessments and the liens arising under this Agreement. The lien may be
foreclosed by Association, in the same manner as a mortgage or deed of trust, in
accordance with Utah law.
The Association may bid for a Resort Property at a foreclosure sale and
acquire, hold, lease, mortgage, and convey such Resort Property. While a Resort
Property is owned by the Association following foreclosure, (a) no right to vote
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shall be exercised on behalf of such Resort Property; (b) no Annual Member
Assessment shall be levied on it; and (c) each other Resort Property shall be
charged, in addition to its usual Annual Member Assessment, its pro rata share
of the Annual Member Assessment that would have been charged such Resort
Property had it not been acquires by the Association. The Association may sue
for unpaid assessments and other charges authorized hereunder without
foreclosing or waiving the lien securing the same. After acquisition at
foreclosure, the Association shall make all reasonable efforts to re-sell the
property at the best competitive price available.
4.13 Joint and Several Liability of Members. A Member shall be jointly
and severally liable for the payment of any Assessments, fee, charge, or other
amount and all interest thereon due and owing to the Association, including any
assessment, fee, charge or other amount arising by, through or under any tenant
of the whole or part of such Member's Resort Property.
4.14 Remaining Member. Any Member in the Association against whom any
Assessments are levied in respect of any Cost Center shall be a "Member" of that
particular Cost Center and shall remain a Member thereof for as long as such an
assessment is leviable against such Member.
4.15 Right to Stop Performing Functions. In addition to any recourses
the Association may have in such circumstances, the Association has the right to
stop performing any Function (including without limitation the Central
Reservation and Information Function) and to deny access to or use of any of the
easements granted in this Agreement to a Member who is in arrears in paying such
Member's Assessments or any other amounts owing by such Member to the
Association.
4.16 Exempt Use. No assessable Square Footage or assessment liability
shall be deemed to exist for any Resort Property that is used for an exempt use
or by an exempt user. An exempt user also means the Association or the
Government. An exempt use means the actual supplying of electricity, gas, water,
sewer, telephone, television, or other utility service within the Resort
Village.
4.17 Pro-ration. Assessments levied against any Resort Property shall
be pro-rated for the number of days any Improvement exists on or within a Resort
Property in relation to the number of days within the Association's fiscal year.
The pro-ration shall be calculated as follows:
The number of days the Improvement exists
within the current fiscal year of ASC Utah
365
An Improvement shall be deemed to exist from the date of Substantial
Completion.
4.18 Determination by the Association. The Association, in its sole
discretion, shall determine if and when an Improvement is substantially complete
with respect to any Resort Property, the Square Footage of such Improvement, and
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how such Improvement is defined within the types of Resort Property as provided
by this Agreement. For purposes of the classification of Square Footage and
Resort Property, the Association shall rely on evidence available from rental
management companies, other sources, and a declaration by the owner of the
Resort Property as to the use of that Resort Property. Such declaration shall be
made yearly to the Association by the owner of the particular Resort Property
attesting to the use of the Resort Property including its commercial, lodging,
or residential usage.
4.19 No Waiver of Assessments. The Association shall not have the power
to waive any Assessments pursuant to this Agreement.
ARTICLE V
DESIGN REVIEW
5.1 Purpose. In order to preserve the natural beauty of the Resort
Village and its setting, to create a unique architectural character and quality
for the Resort Village, to maintain the Resort Village as a pleasant and
desirable environment, to establish and preserve a harmonious design for the
community, and to protect and promote the value of property, exterior design,
landscaping, and use of all new development, and additions, changes, or
alterations to existing use, landscaping, and exterior design and development in
the Canyons Resort Village shall be subject to design review.
5.2 Objectives. Design review shall be directed toward attaining the
following objectives for the Resort Village:
(a). Preventing excessive or unsightly grading, indiscriminate
earth moving or clearing of property, or removal of trees and
vegetation that could cause a disruption of natural
watercourses or scar natural landforms.
(b) Ensuring that the location and configuration of all buildings
and structures are in harmony with the natural landscape,
blending into the vegetation (grasses, trees, and shrubs) and
landforms of the immediate surroundings in which they are
placed.
(c) Ensuring that the buildings and structures are low profile and
small scale, with an appearance that is rustic and with
integrated colors and materials specifically existing in
nature at these locations and ensuring that buildings and
structures are viewed as art placed in nature, as opposed to
standard urban or resort forms found elsewhere in the
Snyderville basin.
(d) Ensuring that the architectural design of structures and their
materials and colors are visually harmonious with The Canyons
SPA's overall appearance, history, and cultural heritage, with
surrounding development, with natural landforms and native
vegetation, and with development plans, zoning requirements
<PAGE>
and other restrictions officially approved by the Association,
Summit County, or any government or public authority, if any,
for the areas in which the structures are proposed to be
located.
(e) Ensuring that plans for the landscaping of open spaces provide
visually pleasing settings for structures on such sites and on
adjoining and nearby sites and blend harmoniously with the
natural landscape.
(f) Ensuring that any development, structure, building, or
landscaping complies with the provisions of this Agreement,
including but not limited to those provisions set forth in
Article VI.
5.3 Design Review Committee. As soon as possible after its
incorporation, the Association shall establish a Design Review Committee (the
"Committee"), which shall consist of five (5) members all of whom shall be
appointed by the Board of Trustees by a vote of five of seven of the Trustees.
The members of the Design Review Committee shall serve without compensation.
Until such time as the Board establishes the Committee, the current interim
Design Review Committee shall continue in effect. The Committee shall follow the
Architectural Guidelines established by the Development Agreement. The Committee
is authorized to retain the services of one (1) or more consulting architects,
landscape architects or urban designers, who need not be licensed to practice in
the State of Utah, to advise and assist the Committee in performing the design
review functions prescribed in this Article V and in carrying out the provisions
of Article VI. Such consultants may be retained to advise the Committee on a
single project, on a number of projects, or on a continuing basis.
5.4 Vacancies. A vacancy on the Committee, however occurring (other
than the routine expiration of a term) may be filled by the Board of Trustees
for the remainder of such Committee Member's term.
5.5 Design Review Committee Approval and Control.
(a) No Member or lessee, assignee, guest or invitee of a Member
shall perform site preparation; landscaping; building
construction; sign erection; exterior change, modification,
alteration, or enlargement of any existing structure; paving;
fencing; planting; or other improvements to any Resort
Property or other property or building or structure thereon;
or change the use of any Resort Property or other property or
building or structure thereon unless and until the Committee
has approved the plans and specifications for such project and
the construction procedures to be used to insure compliance
with Article VI; provided, however, that Committee review and
approval shall not be required for projects that are under
construction as of the Effective Date of this Amended
Agreement, nor shall Committee review and approval be required
for the erection of signs on Resort Property owned or leased
under a lease, with a term greater than 25 years, by ASC Utah,
ASCRP, or any affiliate, parent, or subsidiary of either of
them. Alterations or remodeling that are completely within a
building or structure and that do not change the exterior
appearance and are not visible from the outside of the
structure, or the reconstruction of existing structures or
improvements following a casualty, provided such
reconstruction is according to the same plans as the damaged
or destroyed structure, may be undertaken without Committee
<PAGE>
approval, provided such alterations or remodeling do not
change the use of, or the number of, dwelling units (as such
term is defined in The Canyons SPA Development Agreement) or
the amount of commercial space in the building or structure.
(b) All actions taken by the Committee shall be in accordance with
rules and regulations established by the Committee, which
shall be published as set forth in Section 5.6 and shall be in
accordance with the purposes and intent of The Canyons SPA.
Such rules and regulations may be amended from time to time by
action of the Committee that is consistent with and fulfills
the purpose of this Agreement. The approval or consent of the
Committee on matters properly coming before it (with payment
of the Design Review Fee) shall not be unreasonably withheld,
actions taken shall not be arbitrary or capricious, and
decisions shall be conclusive and binding on all interested
parties, subject only to the right of appeal and review by the
Association as set forth below; and such approval or consent
shall not prohibit enforcement of the provisions of this
Agreement under Section 7.6. The Committee or its designated
representative shall monitor any approved project to the
extent required to insure that the construction or work on
such project complies with any and all approved plans and
construction procedures. The Committee or its designated
representative may enter upon any Resort Property at any
reasonable times to inspect the progress, work status, or
completion of any project. In addition to the remedies
described in Section 7.6, the Committee may withdraw approval
of any project thereby stopping all activity at such project
if deviations from the approved plan or approved construction
practices are not corrected or reconciled within 24 hours
after written notification to the Member specifying such
deviations.
(c) Any material to be submitted or notice to be given to the
Committee shall be submitted at the offices of the Association
at The Canyons.
(d) All actions requiring approval of the Committee shall be
deemed approved if such approval is obtained in writing from
the Committee.
(e) If the Committee fails to respond to a request for its consent
within thirty days after its receipt of such request, the
Committee shall be deemed to have granted its consent to the
actions described in such request, unless for cause the
Committee notifies the applicant that an additional thirty
(30) days is required for review.
(f) In addition to the remedies described in Section 5.9 below,
the Committee may withdraw approval of any project and require
all activity at such project to be stopped if deviations from
the approved plan or approved construction practices are not
corrected or reconciled within twenty-four hours after written
notification to the Member specifying such deviations.
<PAGE>
(g) The Summit County Community Development Director may override
the decision of the Committee after the applicant has
exhausted the review process set forth herein.
5.6 Design Standards and Construction Procedures. The Committee shall
promulgate and publish rules and regulations that shall state the general design
theme of all projects in the Resort Village, specific design requirements, and
the general construction procedures that will or will not be allowed in the
Resort Village (such rules and regulations shall be referred to hereinafter as
the "Design Regulations"). The Committee shall also promulgate and publish rules
and regulations that shall set forth the procedures to be followed in order to
obtain review of proposed construction by the Committee. The Committee shall
make such publications or materials available to Members in the SPA.
5.7 Exterior Maintenance. Pursuant to Section 6.4, after 30 days notice
to a Member of the failure of such Member to maintain his or her property or the
improvements thereon as required under this Agreement the Committee may request
that the Association provide exterior maintenance and repair upon any Resort
Property.
5.8 Review Fee. The Committee may set a review fee schedule sufficient
to cover all or part of the cost of Committee time, consultant's fees, and
incidental expenses. Applicants for design review may be required to deposit
with the Committee a fee that the Committee deems sufficient to cover the costs
of design review from which the actual costs shall be deducted when determined
and the balance returned to the applicant following completion of the design
review procedure.
5.9 Enforcement of Restrictions. If a Member violates any term or
condition set forth in this Article 5 or in Article VI hereof, or the Design
Regulations, the Association shall have the following remedies, any of which the
Association my delegate to the Committee:
(a) The Association may, by written notice to the Member, revoke any
approval previously granted to the Member by the Committee, in which event the
Member shall, upon receipt of such notice, immediately cease any construction,
alteration, or landscaping covered by the approval so revoked.
(b) The Association may, but is not obligated to, enter upon the
Member's Resort Property and cure such violation at the Member's sole cost and
expense. If the Association cures any such violation, the Member shall pay to
the Association the amount of all costs and expenses incurred by the Association
in connection therewith within thirty days after the Member receives an
assessment therefor from the Association.
(c) The Association may sue such Member to enjoin such violation.
(d) The Association shall have all other rights and remedies available
to it under this Agreement, at law, or in equity. All rights and remedies of the
Association shall be cumulative and the exercise of one right or remedy shall
not preclude the exercise of any other right or remedy.
<PAGE>
5.10 Reconsideration, Review, and Appeal. Within seven days following
action of the Committee, its decision to approve or disapprove the project
design shall be transmitted to the applicant and to the Association, and posted
in a conspicuous manner at the offices of the Association at The Canyons. The
Association may confirm, modify, or reverse the decision of the committee within
20 days following the decision. The decision shall become final if no action is
taken by the Association and no written request for reconsideration is made to
the Committee by the aggrieved party within 20 days following the decision of
the Committee. If no action is taken by the Association and a request for
reconsideration is timely made, the Committee shall reconsider the matter at its
next regularly scheduled meeting. The decision rendered upon such
reconsideration shall be transmitted to the aggrieved party and the Association
as set forth above, and shall become final if no written appeal to the
Association is made to such decision within seven days following the date of
notice of such decision. Not more than 30 days following the filing of an appeal
by the aggrieved party, the Association shall review the action of the Committee
and shall, in writing, confirm, modify, or reverse the decision of the
Committee. If the Association deems insufficient information is available to
provide the basis for a sound decision, the Association may postpone final
action for not more than 30 additional days. Failure of the Association to act
within 60 days from the date of the filing of the appeal shall be deemed
approval by the Association of the design of the project unless the applicant
consents to a time extension. Any decision by the Association that results in
disapproval of the project design shall specifically describe the purpose,
development plan, covenant, or Design Regulations with which the project does
not comply and the manner of noncompliance.
5.11 Lapse of Design Review Approval. Approval of the design of a
project shall lapse and become void one year following the date of final
approval of the project by the Committee, unless prior to the expiration of one
year, a building permit is issued and construction is commenced and diligently
pursued toward completion.
5.12 Assignment of Function. Any function to be performed by the
Committee pursuant to Article V or Article VI may be assigned to the Association
in whole or in part at any time or from time to time at the sole discretion of
the Association.
5.13 Liability. Neither ASCRP, ASC Utah, the Committee, or the
Association, nor any of their respective officers, trustees, employees, or
agents shall be responsible or liable for any defects in any plans or
specifications submitted, revised, or approved under this Article V nor for any
defects in construction pursuant to such plans and specifications. Approval of
plans and specifications under this Article V shall not be deemed in lieu of
compliance by Members or lessees with applicable governmental laws or
regulations.
ARTICLE VI
RESTRICTIONS APPLICABLE TO RESORT PROPERTIES
6.1 Property. "Property" as used in this Article VI shall mean any and
all real property that is now or may hereafter be included within The Canyons
SPA, including public or private streets, roads, and any public or private
<PAGE>
easements or rights of ways and including any and all improvements on any of the
foregoing. For the purpose of recording this Agreement, the Property shall be
that Property described in Exhibit F.
6.2 Land Use Restrictions. In addition to the restrictions found in
this Article VI, all or any portion of the Property to be sold or leased within
The Canyons SPA shall be further restricted in its use, density, or design
according to the Development Agreement for The Canyons SPA, as such agreement
may be amended from time to time, and as recorded with the Office of the
Recorder for Summit County, Utah.
6.3 Occupancy Limitations. No portion of any Property shall be used as
a residence or for living or sleeping purposes other than a room designed for
living or sleeping in a completed structure for which a certificate of occupancy
has been issued. No room in any structure shall be used for living or sleeping
purposes by more persons than it was designed to accommodate comfortably. Except
as expressly permitted in writing by the Design Review Committee, no trailers or
temporary structures shall be permitted on any Property.
6.4 Maintenance of Property. All Property, including all improvements
on any Property, shall be kept and maintained by the owner thereof in a clean,
safe, attractive, and sightly condition and in good repair. If a Member fails to
maintain his or her property or improvements on such property or fails to
perform any act of maintenance or repair required under this Agreement after
thirty (30) days notice of such failure, to the Member, the Design Review
Committee may request that the Association provide exterior maintenance and
repair on any such property. In the event that the Association provides
maintenance services under this Paragraph the relevant Member shall be assessed
for the cost of such maintenance services.
6.5 No Noxious or Offensive Activity. No noxious or offensive activity
shall be carried out upon any Property that is or may become a nuisance or cause
any significant disturbance or annoyance to others.
6.6 No Hazardous Activities. No activities shall be conducted on any
Property and no improvements constructed on any Property that are or might be
unsafe or hazardous to any person or Property. Without limiting the generality
of the foregoing, no firearms shall be discharged upon any Property, and no open
fires shall be lighted or permitted on any Property except in a contained
barbecue unit while attended and in use for cooking purposes or within a safe
and well-designed interior fireplace; except, however, for campfires or bonfires
on Property designated for such use by ASC Utah or the Association, and
controlled and attended fires authorized in writing by ASC Utah or the
Association and required for clearing or maintenance of land.
6.7 No Unsightliness. No unsightliness shall be permitted on any
Property. Without limiting the generality of the foregoing, (a) all unsightly
structures, facilities, equipment, objects, and conditions shall be enclosed
within an approved structure; (b) trailers, mobile homes, trucks (including
pickup trucks), boats, tractors, all vehicles (including automobiles), campers
not on a truck, snow removal equipment, and garden or maintenance equipment
shall be kept in an enclosed structure at all times, except when in actual use;
<PAGE>
provided, however, that such equipment may be parked on parking lots or other
areas specifically designated by the Association or the Design Review Committee
for such equipment; (c) refuse, garbage, and trash shall be kept within an
enclosed structure; (d) service areas and facilities for hanging, drying, or
airing clothing or fabrics shall be kept within an enclosed structure; (e) pipes
for water, gas, sewer, drainage, or other purposes; wires, poles, antennas and
other facilities for the transmission or reception of audio or visual signals,
or electricity, utility meters, or other utility facilities; gas, oil, water, or
other tanks; and sewage disposal systems or devices shall be kept and maintained
within an enclosed structure or below the surface of the ground; and (f) no
lumber, grass, shrub, or tree clippings or plant waste, compost, metals, bulk
materials, or scrap or refuse or trash or unused items of any kind shall be
kept, stored, or allowed to accumulate on any Property. All enclosed structures
shall comply with the rules and regulations of the Design Review Committee as in
effect from time to time. The Design Review Committee shall have the power to
grant a variance from the provisions of this Section 6.7 from time to time as it
deems necessary or desirable.
6.8 No Annoying Lights, Sounds, or Odors. No light that is unreasonably
bright or causes unreasonable glare shall be emitted from any Property; no sound
that is unreasonably loud or annoying shall be emitted from any Property; and no
odor that is noxious or offensive to others shall be emitted from any Property.
6.9 Restrictions on Animals. No animals other than sheep, horses, cats,
dogs, or other household pets that do not unreasonably bother or constitute a
nuisance to others shall be kept on any Property, subject to such additional
reasonable restrictions pertaining to the keeping of animals on any Property as
may be established by the Association.
6.10 Restriction on Signs. No signs or advertising devices of any
nature shall be erected or maintained on any Property except signs approved by
the Design Review Committee, signs required by law or legal proceedings,
identification signs for work under construction, temporary signs to caution or
warn of danger or signs of the Association or the ASC Utah necessary or
desirable to give directions or advise of rules or regulations.
6.11 Restriction on Parking. Parking of vehicles on any Property within
the Resort Village is permitted with respect to a Property only within parking
spaces constructed with the prior approval of the Design Review Committee or
within spaces under construction as of the Effective Date of this Amended
Agreement, and such parking shall be used only by the owner or Member or the
lessee or guests of such owner or Member for the parking of personal vehicles.
ASC Utah and the Association shall have the right to park any type of vehicle
owned or used by ASC Utah or the Association upon Property within the Resort
Village within parking areas or structures designated for such purpose.
Notwithstanding the above, ASC Utah or the Association may designate areas for
off-street parking on Property for the temporary parking of maintenance and
delivery vehicles, for the sole purpose of assisting in a maintenance operation
or to provide for the loading or unloading of such vehicles, or to accommodate
special circumstances.
6.12 Landscape Restriction. No trees of such dimensions as determined
by the Design Review Committee may be removed from any Property without the
prior written approval of the Design Review Committee. Vegetation on all
<PAGE>
Property shall be maintained to minimize erosion and encourage growth of ground
cover and all tree and shrub planting must be consistent with the landscaping
plan approved by the Design Review Committee.
6.13 No Mining and Drilling. No Property shall be used for the purpose
of mining, quarrying, drilling, boring, or exploring for or removing oil, gas,
or other hydrocarbons, minerals, rocks, stones, gravel, or earth.
6.14 No Cesspools or Septic Tanks. No cesspools or septic tanks shall
be permitted on any Property without the prior written approval of the Design
Review Committee, which shall not be unreasonably withheld.
6.15 No Fences. No fences, walls, or other barriers shall be permitted
for the purpose of enclosing or demarcating any Property boundaries without the
prior written approval of the Design Review Committee.
6.16 Construction. The following provision shall apply to any
construction, renovation, maintenance or other work authorized by the terms of
this Agreement and performed by one party upon the property of another:
(a) Once commenced, the work shall be diligently prosecuted to
completion.
(b) All work shall be performed in a good and workmanlike manner,
shall minimize any inconvenience to the operations conducted
by the owner of the burdened property, and shall comply with
all applicable laws, ordinances regulations.
(c) If, as a result of any work, any part of the impacted property
is altered or disturbed (other than any area to be permanently
altered as result of such work) the disturbed area shall be
promptly restored to as near its original condition as
possible.
(d) All work shall be started only after reasonable advance notice
to the landowner, or the Association as the case may be, shall
be performed at reasonable times and shall be done in a manner
so as to minimize disruption to the use and operation of the
impacted property, including the performance of work off
season or off hours, if appropriate. For any work in excess of
$100,000, such work shall be started only after written notice
to all affected parties, including without limitation ASC
Utah, the Association, and adjacent property owners or
adjacent tenants. This subsection shall not apply to any
projects under construction as of the Effective Date of this
Agreement.
(e) The landowner performing the work shall indemnify, defend, and
hold harmless the landowner on whose property work is being
performed from any loss or damage to persons or property, and
from any expenses associated with any claims arising from any
such loss or damage which related to the performance of the
work.
<PAGE>
6.17 Construction Period Exception. During the course of actual
construction of any permitted structures or improvements on any Property, the
Design Review Committee may, by written instrument, waive certain provisions
contained in this Article 6 to the extent necessary to permit such construction,
provided that, during the course of such construction, nothing is done that will
result in a violation of any of such provisions upon completion of construction.
6.18 Compliance With Law. No Property shall be used, occupied, altered,
charged, improved, or repaired except in compliance with all present and future
laws, rules, requirements, orders, directions, ordinances, and regulations of
the United States of America, the State of Utah, Summit County, and all other
municipal, governmental, or lawful authority, affecting the Property or the
improvements thereon or any part thereof.
6.19 Condominium Ownership. Prior to the recording in the Office of the
Recorder for Summit County, Utah, of an instrument submitting any portion of the
Resort Lands to condominium ownership, the Member with respect to such Property
shall submit to the Association for its review and approval copies of the
proposed condominium declaration, record of survey map, articles of
incorporation and bylaws of the condominium association. The Association shall
approve or disapprove of such documents within 30 days of the submittal to the
Association. The Association's approval or disapproval shall be by written
notice to such Member. In the event the Association disapproves of such
documents, the Association shall set forth in the written notice the specific
reason or reasons for such disapproval. If notice or approval or disapproval is
not given by the Association on or before such 30-day period, such documents
shall be deemed to be approved. The approval of the Association under this
Section 6.19 shall not be unreasonably withheld. This Section 6.19 shall not
apply to any projects under construction as of the Effective Date of this
Agreement.
ARTICLE VII
MISCELLANEOUS
7.1 Amendment of Agreement.
(a) Additional Members. The parties to this Agreement understand
and agree that this Agreement contemplates the addition of
Members and Resort Property to the Association as the
development of the Resort Village continues and grows.
Accordingly, by entering into this Agreement, the parties
hereto consent to the repeated amendment of this Agreement,
which needs only to be executed by ASC Utah, ASCRP, the
Association, and such additional Member or Members, for the
purpose of adding Members, Resort Property and Property to
this Agreement, under the same terms and conditions as this
Agreement, such terms and conditions to differ only with
respect to: (i) an amended Plan to reflect the addition of
<PAGE>
such Member; and (ii) any additions to Article II (Grant of
Easements) specific to such Member as necessary or desirable
for ASC Utah to grant such Member easements and for such
Member to grant easements to ASC Utah and all other parties
hereto for access, pedestrian pathways, utilities, ski trails,
lifts, and snowmaking equipment, golf, and signage, and
provided that the Association shall provide to all parties
hereto copies of all such amendments.
(b) Amendment to the Plan. The parties to this Agreement
understand and agree that this Agreement contemplates that
repeated amendments will be made to the Plan as the
development of the Resort Village continues and grows.
Accordingly, by entering into this Agreement, the parties
hereto consent to the repeated amendments of the Plan for the
purpose of expanding and amending the easements and other
rights arising under Article II (Grant of Easements), which
amendments to the Plan need only to be executed by ASC Utah,
ASCRP, the Association and such additional parties whose
property is either benefited or burdened by the expanded or
amended easements and other rights.
(c) Other Amendments. Other than for the purposes set forth in
subparagraph (a) above, this Agreement may not be amended or
modified in any way except by an instrument in writing
executed by all parties hereto.
7.2 Recording. This Agreement shall be recorded in the Office of the
Recorder for Summit County. Each party to this Agreement acknowledges and agrees
that the easements granted and obligations created by this Agreement, including
without limitation the obligation to pay assessments, including, but not limited
to, the Annual Assessment, Retail Assessments, Transient Occupancy Assessment
and Real Estate Transfer Assessment, are perpetual, touch and concern the land,
shall run with the land, and are and shall be binding upon and inure to the
benefit of the parties, their successors and assigns as to their interests in
the Resort Lands. Every Person who acquires an interest in the Resort Lands
after the recording in the Office of the Recorder for Summit County of this
Agreement shall become subject to be bound by the terms and conditions of this
Agreement.
7.3 Warranties. Each party warrants to the others that it has good and
marketable title to the easements and rights conveyed hereby, that the execution
and delivery of this Agreement will not violate or cause a breach of any
agreement by which such party is bound or which affects the easements and
rights, and that each party will warrant and defend the title hereby conveyed to
other by and through all persons.
7.4 Breach. In the event of breach or threatened breach of this
Agreement, any party hereto shall be entitled to institute proceedings (at law
or in equity) for full and adequate relief, and/or compensation from the
consequences of said breach or threatened breach. Such remedies shall include
without limitation the right to specific performance and injunctive relief.
7.5 Effect of Provisions of Agreement. Each provision of this
Agreement, and any agreement, promise, covenant and undertaking to comply with
each provision of this Agreement, and any necessary exception or reservation or
grant of title, estate, right, or interest to effectuate any provision of this
Agreement: (a) shall be deemed incorporated in each deed or other instrument by
which any right, title, or interest in any real property within The Canyons SPA
is granted, devised, or conveyed, whether or not set forth or referred to in
<PAGE>
such deed or other instrument; (b) shall, by virtue of acceptance of any right,
title, or interest in any real property within The Canyons SPA by a Member, be
deemed accepted, ratified, adopted, and declared as a personal covenant of such
Member, and as a personal covenant shall be binding on such Member and such
Member's heirs, personal representatives, successors, and assigns, and as a
personal covenant of a Member, shall be deemed a personal covenant to, with, and
for the benefit of ASC Utah but not to, with or for the benefit of any other
Member; (c) shall be deemed a real covenant by ASC Utah for itself, its
successors and assigns, and also an equitable servitude, running in each case as
a burden with and upon the title to each parcel of real property within The
Canyons SPA, and as a real covenant and also as an equitable servitude, shall be
deemed a covenant and servitude for the benefit of any real property now or
hereafter owned by ASCRP or ASC Utah within The Canyons SPA and for the benefit
of any and all other real property within The Canyons SPA; and (d) shall be
deemed a covenant, obligation, and restriction secured by a lien binding,
burdening, and encumbering the title to each parcel of real property within The
Canyons SPA, which lien with respect to any Property shall be deemed a lien in
favor of the Association.
7.6 Enforcement and Remedies. Each provision of this Agreement shall be
enforceable by the Association, or by any Member who has made written demand of
the Association to enforce such provision and 30 days have lapsed without
appropriate action having been taken by the Association by a proceeding for an
injunction. Each provision of this Agreement with respect to a Member or Resort
Property of a Member shall be enforceable by the Association by a proceeding for
an injunction or by a suit or action to recover damages, or in the discretion of
the Association, for so long as any Member fails to comply with any such
provisions, by exclusion of such Member and such Member's lessees, guests or
invitees from use of any Facility and from enjoyment of any Function. If court
proceedings are instituted in connection with the rights of enforcement and
remedies provided in this Agreement, the prevailing party shall be entitled to
recover its costs and expenses in connection therewith, including reasonable
attorneys' fees.
7.7 Mortgagee Protection.
(a) The Association shall maintain a roster of Members, which
roster shall include the mailing addresses of all Members. The
Association will also maintain a roster containing the name
and address of each First Mortgagee of a Resort Property if
the Association is provided notice of such First Mortgage by
way of a certified copy of the recorded instrument evidencing
the First Mortgage and containing the name and address of the
first mortgagee and a statement that the Mortgage is a First
Mortgage. The First Mortgagee shall be stricken from the
roster upon request by such First Mortgagee or upon receipt by
the Association of a certified copy of a recorded release or
satisfaction of the First Mortgage. Notice of such removal
shall be given to the First Mortgagee unless the removal is
requested by the First Mortgagee.
(b) The Association shall give to any First Mortgagee on the
roster written notification of any default by the mortgagor of
the respective Resort Property in the performance of such
mortgagor's obligations under this Agreement that is not cured
within thirty (30) days.
<PAGE>
(c) A First Mortgagee of any Resort Property who comes into
possession of the Resort Property pursuant to the remedies
provided in the First Mortgage or foreclosure of the First
Mortgage, or by way of deed or assignment in lieu of
foreclosure, shall take the property free of any claims for
unpaid Assessments under this Agreement or charges against the
mortgaged Resort Property which accrued prior to the time such
First Mortgagee comes into the possession of the Resort
Property, except for claims for a pro rata share of such
Assessments or charges resulting from a pro rata reallocation
of such Assessment or charges to all Resort Property,
including the mortgaged Resort Property. Furthermore, upon
such foreclosure or deed or assignment in lieu of foreclosure,
or the entry into First Mortgagee's possession, either
directly or through a receiver, any rights with respect to any
Resort Property that have been suspended with respect to the
defaulting Member shall be reinstated.
(d) Any liens created under this Agreement upon any Resort
Property shall be subject and subordinate to and shall not
affect the rights of a First Mortgagee under a First Mortgage
on such Resort Property made in good faith and for value;
provided, however, that any lien created after a foreclosure
sale shall have the same effect and be enforced in the same
manner as provided in this Agreement, and/or the Bylaws.
(e) No amendment to this paragraph of this Agreement shall
adversely affect a First Mortgagee who has recorded a valid
First Mortgage prior to the recordation of any such amendment.
7.8 Eminent Domain. In the event any of the Easements granted hereunder
are appropriated or taken under the power of eminent domain, in whole or in
part, by any public or quasi-public authority, the owner of the underlying
property so condemned shall be entitled to the entire award or compensation in
such proceedings. Beneficiaries of any of the Easements granted under this
Agreement shall not be entitled to any portion of the award or compensation in
such proceedings, nor shall any beneficiary of easements granted under this
Agreement be entitled to any compensation or damages from the Association, ASC
Utah, or ASCRP for any inconvenience, annoyance, or damage occasioned by any
such proceedings. For purposes of this Section, a voluntary sale or conveyance
in lieu of condemnation, but under the threat of condemnation, shall be deemed
an appropriation or taking under the power of eminent domain.
7.9 Damage and Reconstruction. In the event any property insured by the
Association is damaged by fire or other casualty, the proceeds payable under the
Association's insurance policies shall be payable to the Association. No Member
shall be entitled to any compensation or damages from the Association, ASC Utah,
or ASCRP for loss of the use of either the whole or any part of any property
owned or controlled by the Association, nor shall any Member be entitled to any
compensation or damages from the Association, ASC Utah, or ASCRP for any
inconvenience, annoyance, or damage occasioned by any casualty or the repair,
reconstruction, or restoration of the damage caused by such casualty.
<PAGE>
7.10 Limited Liability. Neither the Association, the Board of Trustees,
or the Design Review Committee, nor any member, agent, or employee of any of the
same shall be liable to any party for any action or for any failure to act with
respect to any matter if the action taken or failure to act was in good faith
and without malice.
7.11 Use of Trademark. Each Member, by acceptance of a deed for his or
her Resort Property, whether or not it shall be so expressed in any such deed or
other conveyance, shall be deemed to acknowledge that "The Canyons" is a service
mark and trademark of ASC Utah or its licensees, and to covenant that he or she
shall not use the term "The Canyons" without the prior written consent of ASC
Utah.
7.12 Partial Invalidity. The invalidity or unenforceability of any term
or provision of this Agreement by the application of such term or provision to
any person or circumstance shall not impair or affect the remainder of this
Agreement, and its application to other persons and circumstances and the
remaining terms and provisions hereof shall not be invalidated but shall remain
in full force and effect.
7.13 Entire Agreement. This Agreement supersedes any and all prior
agreements or understandings between the parties with respect to the subject
matter of this Agreement.
7.14 Applicable Law. This Agreement shall be governed by and construed
in accordance with the laws of the State of Utah.
7.15 No Easements by Prescription. No easements, licenses, leases, or
other property interests shall be acquired by any party hereto or by the public
by adverse possession or by prescription. The parties agree that landowners
whose property is burdened by a license or easement hereunder shall be permitted
from time to time to reasonably deny access to any party not benefited hereunder
for purposes of preventing the prescription of any public or private licenses,
rights or way, or easements.
7.16 Successors and Assigns. This Agreement shall be binding on the
successors and assigns of the parties hereto.
IN WITNESS WHEREOF, this Agreement has been executed and delivered by
duly authorized representatives of the parties as of the date first set forth
above.
<PAGE>
ASC UTAH, INC., d.b.a. The Canyons
By: /s/ Greg Spearn
--------------------------------------
Its Vice President
AMERICAN SKIING COMPANY
RESORT PROPERTIES, INC.
By: /s/ Edward L. Grampp, Jr.
--------------------------------------
Its Vice President
WOLF MOUNTAIN RESORTS, L.C.
----------------------------
By:
Its
THE CANYONS RESORT
VILLAGE ASSOCIATION, INC.
By:
Its
STATE OF UTAH
COUNTY OF SUMMIT, ss
Then personally appeared before me the above named Greg Spearn in his said
capacity and acknowledged the foregoing to be his free act and deed and the free
act and deed of ASC Utah, Inc., d.b.a. The Canyons.
Before me,
/s/ Spencer G. Sanders
--------------------------------------
Notary Public
Name: Spencer G. Sanders
STATE OF UTAH
COUNTY OF SUMMIT, ss
Then personally appeared before me the above named Edward L. Grampp in his
said capacity and acknowledged the foregoing to be his free act and deed and the
free act and deed of ASC Utah, Inc., d.b.a. The Canyons.
Before me,
/s/ Spencer G. Sanders
--------------------------------------
Notary Public
Name: Spencer G. Sanders
STATE OF ___________________
COUNTY OF ________________, ss
Then personally appeared before me the above named
_____________________ in his said capacity and acknowledged the foregoing to be
his free act and deed and the free act and deed of Wolf Mountain Resorts, L.C.
Before me,
Notary Public
Name:
STATE OF ________________
COUNTY OF ________________, ss
Then personally appeared before me the above named
_____________________ in his said capacity and acknowledged the foregoing to be
his free act and deed and the free act and deed of The Canyons Resort Village
Association, Inc.
Before me,
Notary Public
Name:
C & M Properties, LLC
By: /s/ Raymond Klein
Its: Manager
STATE OF UTAH )
) :ss
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 17th day of November
1999, by Raymond Klein.
/s/ Sabra Karr Dator
Notary Public
Residing at: Summit Co.
My Commission Expires:
June 25, 2003
Silver King Mines
By: /s/ JW Giallivan, Jr
Its: President
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 8th day of November
1999, by Jack Giallivan, Jr.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
D A Osguthorpe Family Partnership
By: /s/ Stephen A. Osguthorpe
Its: Owner
STATE OF Utah )
) :ss.
COUNTY OF Summit )
The foregoing instrument was acknowledged before me this 7th day of November
1999, by Stephen A. Osguthorpe.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Parkwest Associates
By: /s/ Walter J. Plumb
/s/ James C. Nogg
Its: General Partners
STATE OF Utah )
):ss:
COUNTY OF Summit )
The foregoing instrument was acknowledged before me this 9th day of November
1999, by Walter J. Plumb, III and James C. Nogg.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Beaver Creek Associates
By: illegible
Its: Pres., Madison Company, Gen. Partner
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 9th day of November
1999, by illegible.
Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Olympus Construction LLC
(Jaffe - Groutage Parcel)
By: /s/ Scott Jaffa
Its: General Manager
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 8th day of November
1999, by Scott Jaffa.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
The Canyons Cabin Club, LLC
(Baker Parcel)
By: /s/ Joan B. Edwards
Its: Principal
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 6th day of November
1999, by Joan B. Edwards.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Harold R. & Ruth B. Weight
By: /s/ Harold R. Weight
/s/ Ruth B. Weight
Its: Owners
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 6th day of November
1999, by Ruth B. Weight and Harold R. Weight.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Sugarbowl Associates, LLC
By: /s/ Walter J. Plumb
/s/ Ronald Ferrin
Its: General Partners
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 9th day of November
1999, by Walter J. Plumb and Ronald A. Ferrin.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
IHC Hospitals, Inc.
aka IHC Health Services, Inc.
By: /s/ Everett N. Goodwin Jr.
Its: CFO
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 5th day of November
1999, by Everett N. Goodwin, Jr.
/s/ Janet P. Tuttle
Notary Public
Residing at: Salt Lake
My Commission Expires:
February 21, 2001
Joseph L. Krofcheck
By: /s/ J.L. Krofcheck
Its:
STATE OF Virginia )
) :ss.
COUNTY OF Fairfax )
The foregoing instrument was acknowledged before me this 10th day of November
1999, by J.L. Krofcheck.
/s/ illegible
Notary Public
Residing at: Nur, Inc. Fairfax, Va.
My Commission Expires:
August 31, 2001
Wolf Mountain Resorts, LC
By: /s/ Kenneth Griswold
Its: Managing Member
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 15th day of November
1999, by Kenneth Griswold.
/s/ Barbara L. Myers
Notary Public
Residing at: Park City
My Commission Expires:
April 10, 2002
Willow Draw, LC
By:/s/ Kenneth Griswold
Its: Managing Member
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 15th day of November
1999, by Kenneth Griswold.
/s/ Barbara L. Myers
Notary Public
Residing at: Park City
My Commission Expires:
April 10, 2002
/s/ William Lincoln Spoor
/s/ Leslee Sherrill Spoor
By: William Spoor
Leslee Spoor
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 12th day of November
1999, by Lincoln Spoor and Leslee Sherrill.
/s/ Catherine Dalyai
Notary Public
Residing at: Sandy, UT
My Commission Expires:
May 25, 2000
The Hansen Group, L.C.
By: /s/ David M. Hansen
Its: Member
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 13th day of November
1999, by David M. Hansen, a member of The Hansen Group, L.C.
/s/ Spencer G. Sanders
Notary Public
Residing at: Salt Lake County
My Commission Expires:
November 12, 2003
Beaver Creek Associates
By: /s/ Ronald Ferrin, Madison Co.,
Its: Gen. Partner, President
/s/ Walter J. Plums III, Secretary
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 9th day of November
1999, by Ronald Ferrin & Walter J. Plums III.
Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Thair Schneiter
By: /s/ Walter J. Plumb
Its: Attorney
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 15th day of November
1999, by Walter J. Plumb
/s/ William E. Casaday
Notary Public
Residing at: Salt Lake County
My Commission Expires:
January 18, 2000
Gerald Freedman
By: /s/ Gerald M. Friedman
STATE OF California )
) :ss.
COUNTY OF Los Angeles)
The foregoing instrument was acknowledged before me this 10th day of November
1999, by Gerald M. Friedman.
/s/ Shirley S. Wawee
Notary Public
Residing at: Los Angeles, California
My Commission Expires:
July 19, 2003
<PAGE>
EXHIBITS
EXHIBIT A: List of Participants
EXHIBIT B: The Canyons Resort Village - Easement Plan
EXHIBIT C: Plan of Resort Village Development
WHEN RECORDED RETURN TO:
Summit County Clerk
Summit County Courthouse
60 North Main
Coalville, Utah 84017
AMENDED AND RESTATED DEVELOPMENT AGREEMENT
FOR THE CANYONS SPECIALLY PLANNED AREA
SNYDERVILLE BASIN, SUMMIT COUNTY, UTAH
THIS AMENDED AND RESTATED DEVELOPMENT AGREEMENT (the "Amended Agreement")
is entered into as of this 15th day of November, 1999, by and among ASC Utah,
Inc., d.b.a. The Canyons, American Skiing Company Resort Properties, Inc.
(collectively the "Master Developer"), the group of landowners that are listed
as Participating Owners and are signatories hereto (collectively the
"Participating Landowners"), and Summit County, a political subdivision of the
State of Utah, by and through its Board of County Commissioners ("the County").
RECITALS
A. Master Developer and Participating Landowners (collectively the
"Developers") are the owners, legal representatives of the owners, or lessees
under long-term leases of approximately 7768 acres of land and appurtenant real
property rights located in Summit County, Utah, the legal description and
ownership maps of which are provided in Ordinance 333-A (the "Property").
B. On July 6, 1998, the County adopted and approved Ordinance 333,
which established an initial Specially Planned Area ("SPA") Zone District for a
portion of the Property. The initial SPA Plan for The Canyons SPA Zone District
was implemented by Ordinance 334, a Development Agreement among the County and
various of the Developers (the "Original Development Agreement").
C. The Original Development Agreement contemplated the need to amend
the SPA Zone District and SPA Plan in the future to provide for its expansion
and to create a master planned resort community as depicted in The Canyons SPA
Plan Book of Exhibits attached hereto and incorporated herein.
<PAGE>
D. The County and the Developers desire to amend and restate the
Original Development Agreement to provide for the vesting of certain additional
land use designations, densities, development configurations, and development
standards included in The Canyons SPA Master Development Plan, as reflected on
Exhibit B hereto.
E. The County, through the adoption of this Amended and Restated
Development Agreement (the "Amended Agreement"), desires to establish The
Canyons Resort and Resort Community under the SPA provisions of the Snyderville
Basin Development Code ("Code") and the Snyderville Basin General Plan ("General
Plan") for the purpose of implementing development standards and processes that
are consistent therewith. The Developers and the County desire to clarify
certain standards and procedures that will be applied to certain additional
approvals contemplated in connection with the development of The Resort and
Resort Community, as well as the construction of improvements that will benefit
the Property, and to establish certain standards for the phased development and
construction of the Resort Community and certain improvements, and to address
requirements for certain community facilities and amenities. The County also
desires to receive certain public benefits and amenities, and the Developers are
willing to provide these public benefits and amenities in consideration of the
agreement of the County to provide increased densities and intensity of uses in
the Resort and Resort Community pursuant to the terms of this Amended Agreement.
F. This Amended Agreement amends and restates the Original Development
Agreement and specifically implements The Canyons SPA Zone District as
established by Ordinance 333-A in accordance with the General Plan and the Code.
G. The County, acting pursuant to its authority under Utah Code
Annotated Section 17-27-101 et seq., the Code, and the General Plan, has made
certain determinations with respect to The Canyons SPA Plan, and in the exercise
of its legislative discretion has elected to approve the use, density, and
general configuration of The Canyons SPA Plan resulting in the negotiation,
preparation, consideration, and approval of this Amended Agreement after all
necessary public hearings.
FINDINGS
1. Following lawfully advertised public hearings on May 18, May 24, and
June 3, 1999, the Resort and Resort Community received a recommendation for
approval through an Amended Development Agreement by action of the Snyderville
Basin Planning Commission taken on June 15, 1999. The Board of County
Commissioners held a lawfully advertised public hearing on September 23, 1999,
and during a lawfully advertised public meeting on November 8, 1999, approved
The Resort and Resort Community under the process and procedures set forth in
the Code and the General Plan. The terms and conditions of approval are
incorporated fully into this Amended Agreement. In making such approval, the
Board of County Commissioners made such findings of fact and conclusions of law
as are required as a condition of the approvals, as reflected in the staff
recommendation adopted with any modifications, as reflected in the minutes of
the above-referenced public meetings, and as reflected by the other enumerated
findings herein.
2. The Canyons SPA Plan involves phased plat and site plan applications,
<PAGE>
and has a cumulative proposed project size in excess of 100 acres.
3. The Canyons SPA Plan, as reflected in and conditioned by the terms
and conditions of this Amended Agreement, is in conformity with the General
Plan, any existing capital improvements programs, the provisions of the Code, to
include concurrency and infrastructure requirements, and all other development
requirements of Summit County.
4. The Canyons SPA Plan includes a number of amenities which are located
on various Project Sites. The provision of these amenities, or the provision of
land upon which to construct these amenities, has been taken into consideration
by Summit County in granting increased residential and commercial densities on
those Project Sites. This includes, among other things, the reservation of land
for Golf, Trail, and Buffer areas.
5. The Canyons SPA Plan contains outstanding features that advance the
policies, goals, and objectives of the General Plan beyond mere conformity,
including the following: (i) agreements with respect to design controls and
limitations to minimize the visual impact of the development; (ii) the
clustering and appropriate location of density; (iii) the creation of a
significant trail system and park area connections and improvements; and (iv)
the provision for specialized programs, facilities, and amenities to offset
development impacts.
6. There exists adequate provision for mitigation of all fiscal and
service impacts on the general public.
7. The Canyons SPA Plan meets or exceeds development quality and
aesthetic objectives of the General Plan and the Code, is consistent with the
goal of orderly growth in the Snyderville Basin, and minimizes construction
impacts on public infrastructure within the Basin.
8. There will be no construction management impacts that are
unacceptable to the County.
9. The Developers have committed to comply with all appropriate
Concurrency and Infrastructure requirements of the Code, and all appropriate
criteria and standards described in this Amended Agreement, including all
applicable impact fees to the County and its Special Districts.
10. The proposed development reasonably assures that life and property
within the Snyderville Basin is protected from any adverse impact of this
development.
11. The Developers shall take appropriate measures to prevent harm to
neighboring properties and lands from development, including nuisances.
12. Throughout the period since the approval of the Original Development
Agreement, during which time the Master Developer has been preparing to amend
<PAGE>
the Original Development Agreement, the County has encouraged the Master
Developer to employ innovative land planning concepts within The Canyons SPA
Plan in order to cluster and appropriately locate development density, preserve
sensitive lands, create significant private and public recreational amenities,
open spaces, and trails, and provide principally a mix of destination
accommodations, commercial uses, and other resort support housing, facilities,
amenities, and programs that will be carried out within The Canyons SPA Plan and
within Summit County in furtherance of the goals of the General Plan.
13. A Statement of Global Principles, which is attached hereto as
Exhibit A.1, was applied to The Canyons SPA Plan to guide planning and
development. The Global Principles established certain requirements and
standards in addition to the standards delineated in the Code and the General
Plan. The Global Principles are implemented through the regulation and
monitoring of subsequent Development Approvals (as defined below) pursuant to
the terms of this Amended Agreement, and as incorporated herein shall apply,
according to their terms, to all Development Approvals within The Canyons SPA
Plan. The Global Principles and how each is satisfied by this Amended Agreement
are set forth below.
A. Comfortable Carrying Capacity in the Ski Area. The on-mountain
comfortable carrying capacity shall exceed the bed base at any given
time.
B. Allowable Density in The Canyons SPA. The total density within The
Canyons SPA takes into account comfortable carrying capacity; design
guidelines that comply with the policies of the General Plan and the
Code; the Global Principles; the mitigation of on- and off-site impacts;
and a substantial level of economic and tax base benefits that will
accrue to the County.
C. Required Unit Configurations and Occupancy for all Development in The
Canyons Resort Community to Maximize Resort/Guest Accommodation and
Minimize Private Residences. This principle is met through the
limitation requiring that no less than 80% of all beds in the Resort
Center are allocated to resort and guest accommodations, and within the
Resort Core, no less than 90% of the beds are allocated to resort and
guest accommodations.
D. Development Phasing. This Amended Agreement balances the development
of resort accommodations with the comfortable carrying capacity of the
Resort by requiring that development generally begin in the Resort Core
and move outward.
E. Provisional Open Space. In the original SPA Ordinance, as a condition
of receiving the Phase I approvals, all remaining lands owned or
controlled by several of the Developers were classified as Provisional
Open Space and restricted from development until the balance of the
property received master plan approval. This Amended Agreement
establishes classes of open space which serve to ensure the adequate
protection and long term viability of open space within The Canyons SPA
Zone District.
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F. Development Pattern. This Amended Agreement clusters development and
maximizes open space.
G. Resort Support and Mountain Recreation Development. This Amended
Agreement defines guidelines for on-mountain development, which includes
some on-mountain guest accommodation while limiting such accommodations
to a unique rustic mountain character designed in harmony with the
natural landscape.
H. Provision of On-Mountain Amenities. Uniquely designed resort
amenities and accommodations will be allowed at mid-mountain.
I. Viewshed. This Amended Agreement establishes procedures for the
protection of viewsheds.
J. Viewshed Criteria. This Amended Agreement implements visual quality
objectives consistent with the General Plan through defined viewshed
protection requirements as part of the design criteria in the Viewshed
and Visual Quality Analysis and Plan attached hereto as Exhibit H.1.
K. Environmental Enhancement, Conservation, and Preservation. This
Amended Agreement enhances the environment, conservation, and
preservation through a Natural Resource Management Plan and a Watershed
Master Plan for the Willow Draw Area, and through the incorporation of
"green" design principles including energy efficiency and building
techniques. The Amended Agreement further complies with this Global
Principle through the implementation of the recommendations in the
Natural Resources Management Plan and the Watershed Management Plan.
L. Employee Housing. Employee housing will be provided for a substantial
number of resort employees in the Resort Center consistent with The
Canyons Employee Housing Needs Assessment and Proposed Mitigation Plan.
The balance of identified employee housing needs will be provided
elsewhere in the Snyderville Basin/Park City area.
M. Economic Base. This Amended Agreement will result in substantial
positive tax benefits to the County and others.
N. Transportation. This Amended Agreement provides for the
implementation of a comprehensive transportation plan, which includes
the following components: (i) cooperation in the creation of a regional
transportation system; (ii) linkages to the Salt Lake City area,
including the airport, via various forms of transit for employees and
guests; (iii) an internal transportation system within The Resort and
Resort Community including valet service, shuttle buses, and a people
mover; (iv) a comprehensive pedestrian trail system; and (v) incentives
to encourage the implementation of this policy.
<PAGE>
O. Highway 224 and Resort Entry. A significant open space buffer will be
created along Highway 224 to establish a "green" setting, including
portions of a golf course and the Millennium Trail, and a special study
for Highway 224 landscape enhancements.
P. Benchmark Assessments of Resort Development, Impacts, and Programs.
This Amended Agreement provides detailed mechanisms for linking phased
growth with mitigation measures, and for evaluating these benchmarks,
ensuring that policies of concurrency are met.
Q. Development Design Criteria. This Amended Agreement provides
architectural guidelines to assure unique architectural character and
the highest standards of design quality and construction. The guidelines
will be enforced in part by The Canyons Resort Village Management
Association (the "RVMA") and The Colony Master Association.
R. Master Community and Resort Facility, Amenity, Recreation, Cultural
Arts, and Marketing Program. This Amended Agreement provides for a
recreation master plan to be developed, resort amenities to be provided,
a public art implementation and management program to be instituted, and
continuing cooperation with the County, the Special Recreation District
and the Park City/Summit County Arts Council. A resort-wide marketing
program will be administered and paid for through The Canyons Resort
Village Management Association.
S. Community Integration. This Amended Agreement provides for the
establishment of a "good neighbor" policy to provide accessibility to
the resort amenities by the community. A community integration plan is
being developed which establishes appropriate buffers between the Resort
Community and existing residential neighborhoods but also defines
linkages through appropriate trail connections and other means.
T. Infrastructure Maintenance and Management. This Amended Agreement
provides for the maintenance of two master associations, one for The
Colony and one for the balance of The Canyons SPA. Each master
association will provide for the maintenance and management of all
infrastructure owned and controlled by that master association. All
areas of mutual interest shall be maintained and managed through a Joint
Operating Agreement between the Master Associations.
U. Construction Mitigation and Management. This Amended Agreement
provides for mitigation and management measures to be in effect for each
phase of development to assure compliance with the Code, in accordance
with Exhibit F hereto.
14. The Global Principles, in addition to other requirements, contain a
set of conceptual "Benchmarks", intended to provide quantitative and qualitative
<PAGE>
measurement of the performance of the Project in relation to policies
established in the General Plan, the Code, The Canyons SPA Plan, and this
Amended Agreement. These Benchmarks have been integrated into Collective
Standards, included in this Amended Agreement, that will regulate development of
The Canyons SPA Plan.
15. The County and the Developers desire that the development of The
Canyons SPA Plan pursuant to this Amended Agreement will result in significant
benefits to the County, other local public agencies, and the residents and
visitors to the County. The Master Developer and Participating Landowners, by
providing assurances that they will comply with this Amended Agreement, the
General Plan, and the Code, commit to achieve the range of public benefits that
have been identified in conjunction with the development contemplated by The
Canyons SPA Plan. Consistent with this commitment, the County has determined
that development of the Project will result in the following specific public
benefits, without limitation:
(a) Fiscal Benefits. The County finds that the Project will
continuously produce revenues to local agencies in excess of the costs
of providing public services associated with or as a result of the
Project.
(b) Environmental Benefits. A Natural Resources Management Plan
has been developed for the West Mountain Neighborhood Area. Its
implementation over time, in addition to the planned dedication of open
space lands, will improve and sustain the environmental quality of the
entire Area. All sensitive lands will be protected and enhanced,
degraded habitats will be restored, revegetation of highly visible
presently denuded slopes will be conducted, and wildlife corridors
enhanced and maintained. In particular, the Willow Draw Development Area
will see substantial restoration in conjunction with the construction of
a golf course.
(c) Preservation of Open Space. An Open Space and Viewshed
Protection Plan is included as part of The Canyons SPA (the "Open Space
Plan"). The Open Space Plan designated more than 90% of all land within
the Project as open space. The Open Space Plan and the obligations of
the Developers under this Amended Agreement secure the overwhelming
majority of the open space indicated in the General Plan for the West
Mountain Neighborhood. In addition, the Project has transferred density
from certain parcels totaling approximately 95 acres outside of the
Project, thus restricting these parcels to open space and contributing
to the County's broader open space goals and objectives. The open space
lands within the Project will include land for recreation, preservation,
buffers, and parks and trails.
(d) Housing. In addition to providing housing opportunities for
seasonal residents and guests, the RVMA will construct rental housing
and provide financial subsidies that will produce housing units for
employees of The Resort and a portion of The Resort Community, as set
forth elsewhere in this Amended Agreement.
<PAGE>
(e) Community Facilities. This Amended Agreement provides for
the construction or provision of a range of community facilities, which
will be incorporated into The Resort and Resort Community including a
new fire station site; a public golf course; an amphitheater; a
pedestrian-scale "base village" providing shopping opportunities and a
venue for cultural events; improvements to the Highway 224 Corridor; an
innovative internal circulation system built around a "people mover"
system; support for a regional transit system; construction and
operation of diverse convention facilities that will accommodate large
conferences and local meetings and events; and dedication of a public
use trail easement and construction of trail linkages to the Great
Western and Millennium Trails.
(f) Community Programs. The Resort and Resort Community will
provide a variety of special programs that benefit local residents
including a discount skiing program, an honor roll program, annual
contributions to the Park City School District's Aspiration Program, and
access to resort facilities for community-sponsored events.
16. Prior to or contemporaneously with the approval of this Amended
Agreement, the County has adopted an amendment to the Code and the Zoning Map
classifying the Property as The Canyons SPA Zone District and therein setting
forth such land use classifications, residential and commercial densities, and
development locations as are permitted under this Amended Agreement. The Canyons
SPA Zone District does not constitute in itself a vested development right for
these approvals. This Amended Agreement shall provide such vesting as described
hereunder.
17. The Board of County Commissioners acting pursuant to its authority
under Utah Code Annotated 17-27-101 et seq., as well as its regulations and
guidelines, in the exercise of its legislative discretion, expressly finds that
The Canyons SPA Plan is exempt from the application of the Code solely to the
extent that such a finding may be a condition precedent to approval of this
Amended Agreement. Where there is a direct conflict between an express provision
of this Amended Agreement and the Code or the General Plan, this Amended
Agreement shall take precedence; otherwise, the Code or the General Plan
provision shall control.
18. The Original Development Agreement, and any subsequent amendments
thereto, are incorporated by reference into this Amended Agreement as if fully
set forth herein. To the extent that a conflict exists between the Original
Development Agreement and any subsequent amendments and this Amended Agreement,
the terms of this Amended Agreement shall govern.
19. All existing and vested "uses" within the Canyons SPA Zone District
are "legal non-conforming uses" under the Snyderville Basin Development Code and
shall not have any additional rights or entitlements under this Amended
Development Agreement, except as otherwise authorized by Section 8.1 of the
Code.
<PAGE>
NOW, THEREFORE, THE COUNTY AND THE DEVELOPERS HEREBY AGREE AS FOLLOWS:
ARTICLE 1
DEFINITIONS
Unless otherwise defined herein, as used in this Amended Agreement the
following terms, phrases, and words shall have the meanings and shall be
interpreted as set forth below:
"Amended Agreement" means this Amended and Restated Development
Agreement.
"Adopting Ordinance" means Ordinance Number 334A, entitled: "Amended and
Restated Development Agreement by and between Summit County and ASC Utah, Inc.,
d.b.a. The Canyons, et al. Dated November 8, 1999, and Effective November 23,
1999," which approves this Amended Agreement.
"Book of Exhibits" means the portion of The Canyons SPA Plan that shall
contain the overview of the Canyons Resort Community, Global Principles and
Policies, and concept and specific plans that shall be used to guide all
development in the Amended Canyons SPA, and all other specific development
parameters and regulations (which are in addition to those already contained
within the Code and General Plan), and developer obligations, commitments, and
contributions for carrying out the development in accordance with The Canyons
SPA Plan, including the following exhibits which are attached to and
incorporated by reference into this Amended Agreement as follows:
A. Global Principles and Policies
B. The Canyons SPA Master Development Plan
C. Architectural Guidelines
D. Parking Plan
E. The Canyons Resort Village Management Agreement
F. Construction Mitigation and Management Plan
G. Natural Resources Management Plan
H. Open Space and Viewshed Protection Plan
I. Recreation, Amenities, Arts, and Trails Plan
J. The Canyons Infrastructure Master Plan, Final Report
K. Transfer of Development Rights
Technical Appendix A - Affordable Employee Housing Study and Scope of
Work Technical Appendix B - Fiscal Impact Analysis for The Canyons SPA
Plan Build Out Technical Appendix C - Transportation Program Including
Existing Conditions and Plan Scopes of Work
<PAGE>
"Collective Standards" means the local land use regulatory standards
that will apply to the Project Sites including this Amended Agreement, the
Canyons SPA (zoning ordinance), the Canyons SPA Plan, and other rules,
regulations, official policies, ordinances, and resolutions adopted by the
County in effect and applicable to the Property on the Effective Date,
including, but not limited to the General Plan, the Code, and all other
ordinances, codes, rules, and regulations of the County.
"Commercial/Retail/Support Units" means office uses, shops, stores,
cafes, restaurants, skier services, service space, meeting and conference space,
and health and fitness facilities.
"Condominium Plat" means a survey description and map of a condominium
interest in a structure for the purposes of conveying title.
"Condominium Unit" means an individual air space unit within a
structure, together with the interest in the common elements appurtenant to said
unit.
"Density" means the maximum gross building area permitted for each
parcel as shown in Exhibit B.2.
"Developers or Developer" means the Master Developer and/or the
Participating Landowners.
"Development Areas" means the following areas identified for development
within The Canyons SPA for purposes of determining allowable uses, density, and
configuration, as described and depicted in Exhibit B.1 hereto:
Resort Core
Willow Draw
Red Pine Road
Frostwood
Lower Village
Red Pine Village
Red Pine Lake
Tombstone
Silver King Mines
Mines Ventures
The Cove
The Colony
"Director" means the Director of the Summit County Department of
Community Development or his authorized designee.
"Effective Date" means the effective date of the Summit County Ordinance
<PAGE>
that approves this Amended Agreement.
"Hotel/Lodge" means a building or buildings containing hotel/lodging
units and accessory space and uses.
"Hotel/Lodging Unit(s)" means a unit which shall contain attributes of a
hotel of facility established for similar purposes and which shall be available
for short term occupancy by the unit owner or others. Attributes shall include:
Central reservation service for all units, including central check-in
with full-time front desk service, bellhops, and concierge, operated by
the owner/operator, a property management company chosen by the owners'
association, or as a function of the owner's association;
Central access to the building, with no private entrances for individual
units or wings, except in structures which include up to but not to
exceed four dwelling units, unless otherwise approved by the Director;
Pedestrian traffic funneled through a central lobby area, except in
structures which include up to but not to exceed four dwelling units,
unless otherwise approved by the Director;
Centralized parking, with no assigned spaces, except in structures which
include up to but not to exceed four dwelling units, unless otherwise
approved by the Director;
Utilities centrally controlled, including cable television, telephone,
electricity, gas, and water; and
Limited storage area for owners.
"Low Impact Permit" means a low impact permit as described in the Code.
"Master Developer" means, collectively, ASC Utah, Inc., d.b.a. The
Canyons, and American Skiing Company Resort Properties, Inc., or successor
entity.
"Master Plan" means the master plan for The Canyons SPA attached hereto
as Exhibit B.
"Participating Landowners" means all of the persons who own land within
the SPA and who are parties to this Amended Agreement.
"Plat" means the legal map of a subdivision.
"Planning Commission" means the Snyderville Basin Planning Commission.
<PAGE>
"Project" means all of the master planned development contemplated under
this Amended Agreement.
"Project Site" means a predetermined location of development within a
Development Area within The Canyons SPA Zone District, as described and depicted
in Exhibit B hereto.
"Property Report" means a disclosure statement required by the State of
Utah for a project involving timeshare estates or fractional interests that
shall be delivered by the Developer to the purchaser at the time of contract
execution or, if no contract is executed, prior to the date of transfer. In
addition to the State's requirements, the Property Report shall include a
detailed statement of the zoning and allowed use of the property and
implications of converting property to a "primary residential dwelling unit" as
described in Section 3.14 of this Amended Agreement.
"Residential Unit(s)" means a dwelling unit which may be used as a
primary residence. The location and number of residential units is established
in Exhibit B.2.
"Resort" means The Canyons Resort owned and operated by ASC Utah, Inc.,
d.b.a. The Canyons, or its successor, including the skiing and related
facilities.
"Resort Center" means the following development areas: (1) Resort Core;
(2) Lower Village; (3) Red Pine Road; (4) Frostwood; (5) Willow Draw; and (6)
The Cove.
"Resort Community" means the residential, recreational (other than the
Resort), and commercial real estate development to be constructed within The
Canyons SPA.
"RVMA" means The Canyons Resort Village Management Association.
"Site Plan" means a development plan of one or more lots on which is
shown (1) the existing and proposed conditions of the lot, including but not
limited to topograph, vegetation, drainage, flood plains, wetlands and
waterways; (2) the location of all existing and proposed buildings, drives,
parking spaces, walkways, means or ingress and egress, drainage facilities,
utility services, landscaping, structures, signs, lighting, and screening
devices; (3) the location of building pads for all buildings; and (4) the
location and extent of all external buffers from surrounding areas.
"Sketch Plan" means a sketch preparatory to an application for site plan
or subdivision plat review and consideration by Summit County. The Sketch Plan
contains sufficient information, in graphic and text form, to adequately
describe to the satisfaction of the director the applicant's intentions with
regard to site layout and compliance with the General Plan, the Code, and this
Amended Agreement.
"SPA" means Specially Planned Area, as that phrase is defined in the
Code.
<PAGE>
"Staff" means the staff of the Community Development Department of
Summit County.
"Statement of Global Principles" means those mandatory development
principles and standards established in The Canyons SPA Plan, attached as
Exhibit A.1 hereto, which are in addition to the development standards
delineated in the Code and General Plan, which shall be used to guide all
development within The Canyons SPA and which shall apply, as described herein,
to both Project Sites within The Canyons SPA and to all amendments to The
Canyons SPA and SPA Plan.
"Subdivision" means the division of any tract or parcel of land, with or
without improvements thereon, into two or more lots, tracts, parcels, or
separate interests, including leasehold interests, condominium units, commercial
uses, interests in common or other divisions for the purpose, whether immediate
or future, of sale or development of land. Subdivision shall also mean
condominiumization and shall specifically include the division or conversion of
any existing units, office or other building or portion thereof into
condominiums, or timeshare estates, or fractional interests.
"The Canyons SPA" means the zone district adopted by Ordinance 333-A for
the purposes of permitting the adoption of a comprehensive development plan
specifically required to implement the unique uses, densities, development
locations, and programs and other features necessary for the development of The
Canyons SPA Plan.
"The Canyons SPA Plan" means the comprehensive plan set forth in this
Amended Agreement which sets forth the development parameters, development
approval processes, land use locations and configurations, densities, resort
buffer edge, trails and other open space within The Canyons SPA, the approximate
location of public amenities that serve Project Sites within the Property,
phasing, and all other Developer obligations, commitments, and contributions
made to carry out the development within The Canyons SPA in accordance with the
Code, all as depicted and described in the Book of Exhibits.
"Timeshare Estate or Fractional Ownership Interest" means a right to
occupy accommodations during certain time periods, with an undivided fractional
fee interest in real property by which the owner receives only the right to use
the accommodation as provided by contract, declaration, or other instrument
defining a legal right. During their interval use, owners may, as prescribed in
applicable Condominium Declarations, either occupy the unit, trade the use
period for use in an exchange program, or rent the unit to the general public
through the rental program operated by the rental manager used by the owners'
association. All furniture and fixtures within the units are owned in common by
the association and owners are prohibited from altering the furniture or
fixtures and the interior of the unit in any way.
"TDR (Transfer of Development Rights)" means a development technique
which allows a land owner to separate the rights to develop his land from the
<PAGE>
land itself and to transfer those rights to other land.
Sending Area. An area of land from which existing development rights may
be separated and conveyed to other property.
Receiving Area. An area of land to which additional development rights
may be conveyed from the sending area.
ARTICLE 2
PROJECT DEVELOPMENT
Section 2.1 The Property. The Property that is the subject of this
Amended Agreement is described and depicted in Summit County Ordinance 333-A. No
additional property may be added to the Property that is the subject of this
Amended Agreement other than by amendment to Ordinance 333-A and this Amended
Agreement as provided herein. Unless expressly set forth herein, no provisions
of this Amended Agreement shall affect any land other than the Property as
described herein.
Section 2.2 Incorporation of Original Development Agreement and Prior
Approvals. The Original Development Agreement, which is incorporated herein by
reference, vested certain development rights (the "Prior Approvals"). Where a
conflict exists between the provisions of the Original Development Agreement and
this Amended Agreement, the provisions of this Amended Agreement shall govern.
These Prior Approvals include:
2.2.1 The Canyons Resort Center. For the Project Sites designated
within the original Canyons SPA Plan as the Grand Summit Hotel, the
Forum, the Pedestrian Plaza, the T1 Village Station, the Sundial
Lodge, and the Resort Services Building (collectively "The Canyons
Resort Center Sites"), approval of the Original Development Agreement
constituted final Plat and Site Plan approval in accordance with the
requirements of the Code, General Plan, and Global Principles as
implemented therein. All of The Canyons Resort Center Sites are
required to be developed in accordance with all applicable regulations
and conditions (to include those mandated by the Original Development
Agreement and the Original Canyons SPA Plan Book of Exhibits), design
standards, and final Site Plans or Final Subdivision Plats pertaining
to each particular Site. Failure to so comply is grounds for
revocation of final Site Plan or Subdivision Plat approvals or denial
or revocation of building permits issued pursuant to such final Site
Plan or Final Subdivision Plat.
<PAGE>
2.2.2 Ski 98. For the Project Site designated as "Ski 98", which
constitutes a Low Impact Development Activity under the Code, approval
of the Original Development Agreement constituted an approved use and
density in accordance with the original Canyons SPA Plan Book of
Exhibits; however, the Developers were only allowed to implement such
uses and densities through the acquisition of a Low Impact Permit by
<PAGE>
the Director pursuant to the Code and any other standards and
requirements set forth in the original Canyons SPA Plan Book of
Exhibits, including the Statement of Global Principles as implemented
therein.
2.2.3 The Canyons Drive. For The Canyons Drive, now known as The
Canyons Resort Drive, approval of the Original Development Agreement
constituted an approval of the Final Road Dedication Plat, as included
in the original Canyons SPA Plan Book of Exhibits. The Original
Development Agreement also constituted the County's acceptance of The
Canyons Resort Drive road dedication as a public thoroughfare upon
completion of the roadway and approval of the work by the County
Engineer. The Developer was required to establish an acceptable
Development Improvements Agreement for The Canyons Resort Drive and
all internal private roadways as depicted in the original Canyons SPA
Plan, including a re-vegetation and planting plan, as required by the
Code, prior to any construction related to the improvements. The
Master Developer has appropriately reserved therein an easement for
multiple transportation towers to support a transportation system in
the median of the roadway. Notwithstanding the County's agreement to
maintain The Canyons Resort Drive as a public thoroughfare, the
Developers shall have a right of ingress and egress to maintain the
landscaping within the rights-of-way by a separate right-of-way
landscape maintenance agreement, which is incorporated by reference
herein. The entire Canyons SPA is within County Service Area #6 and
shall be assessed as such for purposes of maintaining The Canyons
Resort Drive.
2.2.4 People Mover. With respect to the transportation element
referenced on the original Canyons SPA Plan Book of Exhibits as the
"People Mover," which was not vested, the County and Developers agreed
to continue a dialogue concerning the appropriateness of such for the
Resort. This prior approval is hereby modified in this Amended
Agreement to establish the People Mover as a Permitted Use and to
require construction of the People Mover in The Canyons Drive corridor
as a traffic mitigation requirement of the Project in accordance with
the provisions of Sections 3.3.4 and 3.6.3.10 and Exhibit I.4. The
specific alignment and technology will be determined through a Low
Impact Permit issued by the Director in accordance with the Code and
any other standards and requirements set forth in the Book of
Exhibits, including the Global Principles as implemented herein. The
Director shall seek a recommendation from the Planning Commission and
shall obtain input from affected neighbors on adjacent properties
concerning the matter prior to making a final decision.
<PAGE>
2.2.5 The Colony Phases I and II. For the Project Site designated
within The Canyons SPA as The Colony Phases I and II, the Final
Subdivision Plats for both Project Sites have been approved by Summit
County. The application of the Global Principles to these Project
Sites was included in the original Canyons SPA Plan. These Project
Sites shall continue to be developed in accordance with the applicable
Global Principles as implemented herein, The Colony Architectural
Design Guidelines, the conditions in the Original Development
Agreement and the respective Final Subdivision Plats, the Code, and
General Plan policies and standards pertaining to both Project Sites.
Failure to so comply are grounds for revocation of Final Subdivision
Plat approval or denial/revocation of Building Permits issued pursuant
to such Final Subdivision Plat.
2.2.6 The Colony Phases III, IV, and V. For Project Sites designated
within The Canyons SPA as The Colony Phases III through V, approval of
the Original Development Agreement constituted an approved use and
density in accordance with the base density within the Code
Development Potential Matrix. This prior approval is hereby modified
in this Amended Agreement to accommodate the terms, conditions, and
densities provided for in the Land Use and Zoning Chart and Exhibit
K.1 and Exhibit K.2. However, the Developers are limited to
implementing the uses and densities now set forth in this Amended
Agreement through the issuance of a Final Site Plan/Subdivision Plat,
(which are prerequisites to a building permit), in accordance with the
Minor Development Permit Review Process in the Code, specific Global
Principles applicable for each Project Site, The Colony Architectural
Design Guidelines, and other applicable provisions of the Code and
General Plan. All Project Sites must be developed in accordance with
the applicable Global Principles and the terms and conditions in this
Amended Agreement, as well as appropriate Code and General Plan
standards and policies pertaining to that particular Project Site.
Failure to so comply is grounds for denial of Final Site Plans and/or
Subdivision Plats. Phases III, IV, and/or V of The Colony shall not be
approved until such time as there is an acceptable Joint Operating
Agreement with the RVMA Master Association as described in Section
3.5.3.
2.2.7 Cox and Muller and Groutage Project Sites. For the Project Site
designated as the "Cox and Muller" (that portion of "Cox/Muller 1"
noted on the Land Use and Zoning Chart) and "Groutage" (referred to as
"Groutage/Jaffa 1" on the Land Use and Zoning Chart) projects,
approval of the Original Development Agreement constituted an approved
use and density in accordance with The Canyons SPA Plan Book of
Exhibits; however, the Developer may only implement such uses and
densities through the issuance of a Final Site Plan or Subdivision
Plat, (which are prerequisites to a building permit), in accordance
with the Minor Development Review Process outlined in Section 3.6.B of
the Code. (Although this process is intended for residential
development, the procedures outlined therein shall be used for the
purpose of review in and approving these project sites). The applicant
shall be required to submit with the application for review all of the
pertinent information required under 3.7.E(2) of the Development Code.
The major issues which shall be considered are visual impact, access,
concurrency management, employee housing impacts, and relationship
with neighboring uses. Additionally, these projects are required to
comply with all standards and criteria established in The Canyons SPA
Plan Book of Exhibits, including the Statement of Global Principles as
implemented herein, The Canyons Resort Center Architectural
Guidelines, and other applicable provisions of the Code and General
Plan. All Project Sites must be developed in accordance with the
applicable Global Principles, as well as appropriate Code/General Plan
standards/policies, pertaining to that particular Project Site.
Failure to so comply shall be grounds for denial of Final Site Plans
and/or Subdivision Plats.
<PAGE>
2.2.8 Snyderville West Parcel. Ordinance was previously adopted to
permit 40 multi-family dwelling units on the Snyderville West parcel
(the "Hansen Units"). The Hansen Units must be tightly clustered and
shall be comparable in size to other Canyons Resort accommodation
units. The total gross square footage permitted shall not exceed
80,000 on approximately four acres identifies as Parcel SW1 in Exhibit
B.1. All future development that will occur as result of the Hansen
Units will require final site plan approval. The actual building area
for these density transfers shall be determined through specific site
plan approval in conjunction with the comprehensive amendment to the
Canyons SPA Plan that further identifies other development potential
and location requirements on the Snyderville West parcel. The Hansen
units must also occur in a manner consistent with the Snyderville
Basin General Plan, the Code, and the Global Principles.
Section 2.3 Approved Project Sites. The Canyons SPA Plan encompasses
much of the West Mountain Neighborhood Area as delineated in the General Plan.
The Development Approvals designated in this area are depicted in The Canyons
SPA Master Development Plan attached hereto as Exhibit B, and are consistent
with the General Plan. The Development Areas and Project Sites specifically
approved under this Amended Agreement, and the express conditions of any such
approval, are as set forth in Exhibits B. All approvals granted under Section
2.2 above remain in effect, as described in Ordinance 333, except when
specifically modified by this Amended Agreement.
2.3.1 Moving Participating Owner Densities. It is recognized that from
time to time transfers of a portion or portions of density on lands in
the ownership of a single Participating Landowner may be necessary to
achieve the objectives of this Amended Agreement. Such transfers of
density may be allowed by the BCC provided that the total density in
the ownership of the Participating Landowner is equal to or less than
the total prior to the transfer. The Design Review Committee of the
RVMA shall review the proposed transfer and submit a letter of opinion
prior to submitting the request to the Director. The Director shall
present the request to transfer density within the Canyons SPA to the
BCC, and a copy of such request to the Planning Commission for
informational purposes only.
<PAGE>
2.3.2 White Pine Canyon Road Access. The development approvals
contained in this Amended Agreement with regard to the property of
Mines Ventures and Silver King Mines is expressly conditioned upon and
subject to adequate road access over the White Pine Canyon Road.
Although said roadway is a county road where it begins at Highway 224,
it changes to a private road upon entering The Colony development.
Consequently, a private easement of adequate scope and size through
The Colony development is essential to both Mines Ventures and Silver
King Mines. As of the date of this Amended Agreement, the parties have
represented to the County that they can reach a resolution of this
issue and they are attempting to consummate the agreement. Based upon
this understanding, the County has approved the Mines Ventures and
Silver King Mines Project Sites conditioned upon the resolution of
adequate access. In the event that there is not adequate access to
either Mines Ventures or Silver King Mines, the County reserves the
right to terminate this Amended Agreement as to the Mines Ventures and
Silver King Mines parties and Development Areas.
2.3.3 Approvals Related to the Expansion of Ski 98, including the
Mountain Master Plan. This Amended Agreement contemplates the
expansion of the improvements to The Resort that were approved under
Ski 98, as described in Subparagraph 2.2.2 above, which in its
entirety is know as the Mountain Master Plan. The Mountain Master Plan
is fully described in Exhibit B.6 to this Amended Agreement, which
shall be considered permitted uses subject to the Developer making
application to the County for a Low Impact Permit. The Director shall
review the request for a low impact permit for compliance with the
provisions of this Amended Agreement, the Statement of Global
Principles, and the Code. The Director shall ensure that the
Developer's proposal does not adversely affect critical viewsheds that
have been identified in the General Plan or during the preparation of
this Amended Agreement.
Section 2.4 Colony TDR. Under the Original Development Agreement, The
Colony agreed to act as a receiving area for TDR units in excess of the base
density for that Development Area. Additional TDR incentive units are now
required in this Amended Agreement for facilitate The Canyons SPA Plan.
Combined, the number, location, phasing, and other requirements and obligations
of The Colony with respect to the TDR units are fully described in Exhibits K.1
and K.2.
Section 2.5 Vested Rights.
2.5.1 Vested Rights. This Amended Agreement vests the uses,
quantities, densities, location, configuration, massing, design
guidelines and methods, development standards, Project Sites,
processes, road placements and designs (including sizes of roads),
road grades, road curb cuts and connections, and all other
improvements as described above and as reflected in the Book of
Exhibits and all other provisions of this Amended Agreement. To the
extent that there is any conflict between the text portion of this
Amended Agreement and the Book of Exhibits, the more specific language
or description, as the case may be, shall control.
2.5.2 Exemption from Code. The rights vested as provided in this
Amended Agreement are exempt from the application of the Code and to
subsequently enacted ordinances only to the extent that such exemption
is a condition precedent to the grant of the vested rights pursuant to
the Findings above and to the extent such exemption does not interfere
with the County's reserved legislative powers in Section 5.3 herein.
The parties further contemplate that all other provisions of the Code,
as amended, and other applicable laws shall apply, including without
limitation the imposition of administrative fees as established by
Resolution 99-11 as amended from time to time.
<PAGE>
2.5.3 Conversion of Allocated Commercial Square Footage to Residential
Square Footage Prohibition. The parties understand and agree that,
with regard to density, allowable Commercial/Retail uses cannot be
converted to accommodations or residential uses in any Development
Area, as described in the Land Use and Zoning Chart, and cannot be
converted to Accommodation Area, as defined in Exhibit B.2
Section 2.6 Developer's Discretion. Subject to Section 3.10, nothing in
this Amended Agreement shall obligate the RVMA or any Developer to construct the
Project or any particular Project Site, and the RVMA or Developers, as the case
may be, shall have the discretion to determine whether to construct each Project
Site based on such Developer's business judgment; provided, however, that once
construction has begun on a Project Site, the relevant Developer shall have the
obligation to complete such construction.
Section 2.7 Development Approval Process. All applicants requesting
approval of final subdivision plats (residential, including single family and
multi-family, and commercial uses), condominium plats (residential, including
single family and multi-family, and commercial uses), and site plans
(residential, including single family and multi-family, and commercial and
industrial uses) within The Canyons SPA, except those specific projects whose
subdivision plat or site plan approvals are provided for in other sections of
this Amended Agreement, shall follow the process set forth herein. Condominium
Plats shall comply only with those subparagraphs in this Section in which
condominium plats are specifically cited. In the event of a procedural conflict
between the Code and this Amended Agreement, the provisions of this Amended
Agreement shall govern.
2.7.1 Master Association Review. Prior to the submission to the County
of any Sketch Plans for a proposed Subdivision Plat or Site Plan, the
Developer shall submit its Sketch Plans to the Design Review Committee
of the RVMA for the Design Review Committee's written opinion in
accordance with the terms of Article 5 of The Canyons Resort Village
Management Agreement. The Developer shall be required to have obtained
the opinion of the Design Review Committee prior to submitting its
Sketch Plans to the County.
2.7.2 Sketch Plan. Developers within The Canyons SPA shall submit
Sketch Plans of the proposed subdivision plat, or site plan to the
Staff for preliminary review prior to submitting an application for
Plat or Site Plan approval. The Staff shall review and take into
consideration the written opinion of the Design Review Committee.
Sketch Plans submitted shall meet all of the requirements of Chapter
3.7.B(2) of the Code and this Amended Agreement.
<PAGE>
2.7.3 Staff Review of Sketch Plans. The Staff will review the Sketch
Plans for compliance with the requirements of this Amended Agreement
and will conduct discussions with the Developer to review any
modifications necessary to comply with this Amended Agreement. If the
Staff and the Developer disagree on compliance based on the Sketch
Plans, the Developer may, in the alternative, seek information and
guidance from the Planning Commission at a regular meeting, or, at the
Developer's option, proceed to process an application for Final Site
Plan or Final Subdivision Plat approval. Staff review and comment on
any Sketch Plan will be completed within a reasonable time. The
Director of Community Development or staff member responsible for
creating the agenda or scheduling matters for the Planning Commission
shall place any Sketch Plan review request from the Developer on the
next available agenda date for the Planning Commission.
2.7.4 Submission of Final Subdivision or Condominium Plats and Final
Site Plans.
(a) Final Design Review Committee Review and Opinion. Following
the Sketch Plan process, a Developer shall submit applications
for final subdivision plat, or final site plan approval to the
Design Review Committee for its review pursuant to Article 5 of
The Canyons Resort Village Management Agreement. The Design
Review Committee shall provide copies of its opinion regarding
applications for final subdivision plat, or final site plan
approval to both the Developer and the Director.
(b) Submission to the County. Following the Sketch Plan process,
and after receipt of written opinion from the Design Review
Committee, or in the case of a condominium plat during or
following construction of the Project Site, the Developer shall
submit applications with applicable fees for final subdivision or
condominium plat or final site plan approval to the County
consistent with the provisions of Section 3.7E(2) and Chapter 5
of the Code. The application shall include any other information
required in this Amended Agreement, which for all projects
involving hotel/lodging units shall include, but is not limited
to, applicable condominium declarations, time share program
documents, fractional interest arrangements, and a copy of the
Property Report for any project involving a timeshare or
fractional interest arrangement that will be delivered to
purchasers. The County shall take into consideration the opinion
of the Design Review Committee, but shall not be required to
adopt such opinion. In addition to compliance with the criteria
required under Chapter 4 of the Code, the following service
provider and concurrency information shall also be required and
reviewed along with the detailed final Subdivision Plat or Site
Plan. Upon receiving such information, the Director shall prepare
a report(s) identifying issues and concerns related to the
proposal.
2.7.4.1 Water Service.
(a) A feasibility letter for the proposed water supply
issued by the State Division of Drinking Water.
(b) Evidence of coordination with the public or private
water service provider, including an agreement for service
and an indication of the service area of the proposed water
supplier, commitment service letter or other binding
arrangement for the provision of water services.
<PAGE>
(c) Evidence that water rights have been obtained including
an application for appropriation or change application
endorsed by the State Engineer pursuant to Section 73-3-10
of the Utah Code, and a certificate of appropriation or
certificate of change issued in accordance with Section
73-3-16 of the Utah Code. The County shall not accept an
application or certificate that has lapsed, expired or been
revoked by the State Engineer.
(d) A certificate of convenience and necessity or an
exemption therefrom, issued by the State Public Service
Commission, for the proposed water supplier.
2.7.4.2 Sewer Service. A Line Extension Agreement approved
by the Snyderville Basin Sewer Improvement District for the
proposed development. No final subdivision plat, final site
plan or low impact permit shall be approved until the
applicant has paid the applicable system capacity fee for
the entire project or phase of the proposed development.
2.7.4.3 Fire Protection.
(a) A letter from the Park City Fire District indicating
that fire hydrants, water lines sizes, water storage for
fire protection, and minimum flow for fire protection are
adequate. These shall be determined using the standard of
the Insurance Services Office which are known as the Fire
System Grading Standards. In no case shall minimum fire flow
be less than 1,000 gallons per minute for a period of two
(2) hours.
(b) The Developers shall furnish written evidence to the
County and the Park City Fire District verifying that an
authorized water company shall be responsible for the
perpetual and continual maintenance of all fire protection
appurtenances, including annual flagging of all hydrants
prior to November 1st of each year.
2.7.4.4 Recreation. A letter from the Snyderville Basin
Special Recreation District indicating that all requirements
of the District and the terms of this Amended Agreement have
been satisfied.
2.7.4.5 Other Service Providers. The Director shall secure
input regarding the proposed development from all other
affected agencies and service providers, including but not
necessarily limited to the Army Corps of Engineers, County
Health Department, Utah Power, and the Park City/Summit
County Arts Council.
<PAGE>
2.7.5 Staff Review and Recommendation. The Staff shall review the
information submitted pursuant to Section 2.7.4 and shall provide its
recommendation to the Planning Commission.
2.7.6 Planning Commission Consideration. The application for approval
of the final subdivision or condominium plat or final site plan shall
be considered by the Planning Commission on the next available regular
agenda of the Planning Commission.
2.7.7 Recommendation of Detailed Final Subdivision or Condominium Plat
or Site Plan. After the Planning Commission's review pursuant to
Section 2.7.6, it shall render a recommendation to the BCC to approve,
deny, or approve with conditions the final subdivision or condominium
plat or final site plan. The recommendation shall be based upon the
Developer's compliance with the requirements and standards set forth
in the Code and in this Amended Agreement. Where any ambiguity or
discrepancy exists between the Code and this Amended Agreement, this
Amended Agreement shall govern.
2.7.8 Approval of Final Subdivision or Condominium Plat or Site Plan.
After receipt of the Planning Commission's recommendation, the BCC
shall, after holding a public hearing noticed in accordance with the
requirements of the Code, render a decision approving, denying or
conditionally approving the final subdivision or condominium plat or
final site plan. The BCC shall execute the final subdivision or
condominium plat or site plan. This shall be the final decision of the
County. The decision of the BCC shall be based upon the Developer's
compliance with the policies of the General Plan and the requirements
and standards set forth in the Code and in this Amended Agreement.
Nothing herein shall allow the Code, or any amendments or restatements
of the Code, to modify or amend the vested rights created in this
Amended Agreement, except as provided in this Amended Agreement. Where
any conflict or ambiguity exists between the Code and this Amended
Agreement, this Amended Agreement shall govern.
2.7.9 Recordation. Upon approval by the County Attorney of the Final
Subdivision or Condominium plat or site plan and a preliminary title
report, and once all required service provider signatures identified
in Chapter 5 are obtained, the BCC shall execute the plat or site plan
and shall cause the final subdivision or condominium plat or final
site plan and any other applicable documents to be recorded in the
records of the Summit County Recorder. The Project Site Developer
shall pay all applicable recording fees.
2.7.10 Appeal. Following the exhaustion of these administrative
remedies ending in a final determination by the County's legislative
body, that final determination shall be appealable to the District
Courts of the State of Utah under Utah law, U.C.A. 17-27-1001.
<PAGE>
2.7.11 Submit Final Documents. Following the approval of the final
subdivision plat or final site plan by the BCC, the Developer shall
submit all applicable Construction Plans as required in Section 5.4 of
the Code, as well as for the installation and guarantee of development
improvements (Development Improvements Agreement as required in
Chapter 6 of the Code), to Staff consistent with the provisions of the
Code. In addition, any other related approvals required in this
Amended Agreement shall be submitted at this time for review and
approval in accordance with the terms defined in this Amended
Agreement.
2.7.12 Recommendation. The Staff shall review the information
submitted pursuant to Section 2.7.11 and provide its recommendation to
the Board of County Commissioners.
2.7.13 Board of County Commissioners Final Approval of Construction
Plans and Development Improvements Agreement. Following the submission
of the Staff recommendation to the Board of County Commissioners on
the final construction plans and development improvements agreement,
the application shall be placed on the Consent Agenda of the Board of
County Commissioners for final approval.
Section 2.8 Compliance with Local Laws and Standards. The County has
reviewed the Code and the General Plan and has determined that the Developers
have substantially complied with the provisions thereof and hereby finds that
The Canyons SPA Plan is consistent with the purpose and intent of the relevant
provisions of the General Plan and the Code. The parties agree that the omission
of a limitation or restriction herein shall not relieve the Developers of the
necessity of complying with all applicable County Ordinances and Resolutions not
in conflict with the provisions of this Amended Agreement, along with all
applicable State and Federal Laws.
Section 2.9 Other County Regulations and Review Procedures.
2.9.1 Building Permits Required. Prior to the commencement of
development activity at any Project Site, a Building Permit must be
obtained from Summit County. In addition to all other requirements for
issuance of Building Permits under the Snyderville Basin Development
Code and Uniform Fire/Building Codes, a prerequisite to the issuance
of any Building Permit shall be an approved Final Subdivision Plat,
Final Site Plan or Low Impact Permit.
2.9.2 Development Improvements Agreement Required. A building,
grading, or other related development permit will not be issued for
any Project Site or any structure within a Project Site approved in
The Canyons SPA Plan until an adequate Development Improvements
Agreement, in accordance with Chapter 6 of the Code, has been
established and accepted by Summit County. A separate Development
Improvements Agreement may be established for each of the Project
Sites approved under Sections 2.3, 2.5, and 2.7 above.
2.9.3 Construction Mitigation and Management Plan Required. A building
permit, grading or other related development permit will not be issued
for any Project Site or any structure within a specific Project Site
approved in The Canyons SPA Plan until an adequate Construction
Mitigation and Management Plan has been established and accepted by
Summit County consistent with Exhibit F attached hereto. A separate
plan shall be established for each of the Project Sites approved under
Sections 2.3, 2.5, and 2.7 above.
<PAGE>
2.9.4 Concurrency Management Required. An applicant for final
subdivision or condominium plat or site plan or low impact permit
approval shall demonstrate that all concurrency management
requirements of Chapter 4 of the Code have been met, and that the
Developer/applicant is not in default of the Resort Village Management
Association Agreement, or any other requirement of this Amended
Agreement. The Summit County Community Development Director shall
cause the issuance of a building permit upon demonstration of
compliance with all such requirements. No building permits, to include
a footing and foundation permit, will be issued for a Project Site
until the water infrastructure, including pipes and hydrants, is
installed, water is flowing at suitable pressure and available to
serve Project Sites. For there to be more than one water distribution
system suppling water to Project Sites with the Project these
different water systems must be connected for the purposes of ensuring
emergency supply, unless otherwise approved by Summit County.
ARTICLE 3
OBLIGATIONS OF THE DEVELOPERS
Section 3.1 Approved Uses. The uses approved in this Amended Agreement
are the only uses permitted under this Amended Agreement. No other uses shall be
permitted until approved by the County through the amendment procedure set forth
in this Amended Agreement.
Section 3.2 Phasing. Development on those lands that are located within
the RVMA shall be phased in a manner that: 1) generally radiates outward from
the Resort Core and 2) sustains and complements all development within the
respective Development Areas. It is a further purpose of this phasing plan to
ensure that all development is completed in a manner that, should the Project be
terminated for any reason prior to completion, as contemplated in this Amended
Agreement, the level of development that is achieved prior to termination will
leave functional, properly maintained neighborhoods and/or a community within
The Canyons SPA. This section specifies conditions that shall be satisfied to
commence development of Project Sites in each of the Development Areas within
the RVMA portion of the Project. In addition to the conditions stated here,
development must comply with all other applicable provisions of this Amended
Agreement.
3.2.1 Master Developer. The Master Developer will develop its Project
Sites from the Resort Core outward at a ratio of 3 to 1, Resort Core
to other Master Developer Project Sites, until such time as 75% of the
Master Developer's Resort Core Project Sites are completed and a
certificate of occupancy issued. Once 75 % of its Project Sites are
completed, the Master Developer may develop the balance of its Project
Sites in any sequence or combination it chooses. Unless otherwise
approved by the BCC, the only exclusions from the Master Developer's
phasing requirement are specified in Section 3.2.3 below.
<PAGE>
3.2.2 Participating Landowners. The Participating Landowners may
proceed with development subject to compliance with this Amended
Agreement and the precedent conditions specified below for the
Development Area(s) in which their Project Site(s) is/are located.
Unless otherwise approved by the BCC, the only exclusions from the
Participating Landowner's phasing requirement are specified in Section
3.2.3 below.
3.2.2.1 Lower Village Development Area. Prior to the development
of any Project Site in this Development Area the following shall
occur:
A. The golf course, specifically those holes located
within this Development Area, shall be under
construction.
B. The Early Planting Plan identified for this
Development Area shall be completed prior to issuance
of any building or related permits for real estate
development.
C. Lower Village Core:
1. The Transit Center as illustrated on Exhibit
C.1.3 must be completed. Transit Center means
that paved roadway and parking areas extending
from the Welcome Center southerly to the bus
turnaround, sidewalks adjacent to the bus
parking, streetscape, and passenger shelters;
2. The People Mover or another interim transit
solution as allowed under Section 3.6.3.10; and
3. Retail commercial development, and related
Project Sites, that is specifically associated
with and located directly surrounding the
Welcome Center and adjacent transportation
functions.
D. For other Hotel/lodging units and multi-family
residential east of the periphery road to begin
development:
1. Completion of those items described in
Section 3.2.2.1.B shall be completed.
3.2.2.2 Frostwood Development Area. Prior to the development
of any Project Site within this Development Area the
following shall occur:
A. The Early Planting Plan identified for this
Development Area shall be completed prior to issuance
of any building or related permits for real estate
development.
<PAGE>
B. The installation of the Frostwood Lift as described
in Section 3.6.3.9 shall occur.
C. Following compliance with Sections 3.2.2.2.A and B,
the hotel/lodging units identified in the Land Use and
Zoning Chart for this Development Area may begin at the
Developer's discretion. The development of the
hotel/lodging units shall commence adjacent to the lift
terminal and progress to the north.
D. The golf course, specifically those holes located
within this Development Area, shall be under
construction before any development approvals required
under this Amended Agreement will be granted for
multi-family residential units within this Development
Area. The ninth hole clubhouse facility may be built in
conjunction with the golf course.
E. The development of multi-family residential dwelling
units identified in the Land Use and Zoning Chart may
occur along the easternmost roadway connecting Sun Peak
Drive to The Canyons. But in any event the multi-family
residential shall commence near the hotel/lodging core
and progress to the north.
3.2.2.3 Willow Draw Development Area. Prior to the
development of any Project Site within this Development Area
the following shall occur:
A The Early Planting Plan identified for this
Development Area shall be completed prior to issuance of
any building or related permits for real estate
development.
B. Access and infrastructure which meet the requirements
of this Amended Agreement shall be in place.
C. Prior to the development of the first Project Site
within this Development Area, the pedestrian bridge
connection, as generally shown in Exhibit B.5.1, shall
be constructed, and there shall be a provision for
on-going, year round maintenance of the trail, to permit
direct pedestrian accesses to the Resort Core. A plan
for construction of the bridge shall be submitted to
Summit County with the Final Site Plan Application for
the first Project Site within this Development Area, if
not before.
3.2.2.4 Tombstone Development Area. Suitable access and
infrastructure which meet the requirements of this Amended
Agreement shall be in place prior to the development of any
Project Site within this Development Area.
<PAGE>
3.2.2.5 Cove Development Area. Suitable access and
infrastructure which meet the requirements of this Amended
Agreement shall be in place prior to the development of any
Project Site within this Development Area.
3.2.2.6 Red Pine Lake Development Area. Suitable access and
infrastructure which meet the requirements of this Amended
Agreement shall be in place prior to the development of any
Project Site within this Development Area. 3.2.2.7 Red Pine
Road Development Area. Prior to the development of any
Project Site within this Development Area the following
shall occur:
A. Access and infrastructure which meet the requirements of this
Amended Agreement shall be in place.
B. Direct pedestrian connectivity to the Resort Core is required.
If Project Sites in this Development Area initiate development
prior to Project Sites between them and central pedestrian plaza
and Forum that lay at the heart of the Resort Core, then a paved
pedestrian trail, sufficient to serve pedestrians, bicycles and
similar users, shall be built in the location shown in Exhibits
B.5.1 and I.2.2 prior to the issuance of any building or related
permit unless it can be demonstrated to the Director that a
suitable easement (including a provision for on-going, year
round maintenance of the trail) is in place across the
intervening properties and a bond adequate to secure the
construction is in place. Only then the trail may be constructed
prior to a certificate of occupancy for the first Project Site
in this Development Area. A plan for the trail shall be
submitted to Summit County with the Final Site Plan Application
for the first Project Site within this Development Area.
3.2.2.8 Red Pine Village Development Area. Suitable access
and infrastructure which meet the requirements of this
Amended Agreement shall be in place prior to the development
of any Project Site within this Development Area. 3.2.3
General Exemptions. There are certain types of development
that will not be subject to the phasing requirements
established in this Section. The exempted development shall
be as follows. These uses must be permitted uses as
established under the Land Use and Zoning Chart and
elsewhere in this Amended Agreement.
A. Single family detached dwellings.
B. Ski area improvements including trails, lifts,
restaurants, maintenance and other related facilities.
C. Development in The Colony, Mines Ventures, and Silver
King Mines Development Areas.
D. Affordable employee housing.
<PAGE>
E. The Resort and Resort Community amenities and facilities
as specifically established in the RVMA master amenity
plan as described in Section 3.6.3 of this Amended
Agreement.
F. Project Sites required or related to the construction of
crucial project transportation infrastructure and
facilities.
G. Project Sites that are specifically required to
facilitate improvements to the Entry Corridor including
SR 224 and Canyons Drive, and other significant
amenities.
3.2.4 Temporary Landscaping Required. In order to maintain sightly
surroundings during the construction of the Project on undeveloped
Project Sites, temporary landscaping is required. If no development
has been initiated on a Project Site within three years of the
effective date of this Amended Agreement, a temporary landscape plan
shall be prepared, installed, and maintained by the Participating
Landowner of that Project Site. The landscape plan shall be submitted
for review and approval as a Low Impact Permit. The plan shall meet
the following standards:
A. a smoothly graded site with no debris,
B. an appropriate ground cover such as grass or the like,
C. trees, shrubs or some similar plant materials located if
possible to be consistent with future development plans,
and
D. a maintenance plan to assure the materials grow and are
well kept.
3.2.5 Entry Corridor. The requirement for a significant entry
corridor, as depicted in Exhibit H.3, shall be initiated by the RVMA
within 180 days and shall be completed by the RVMA within 24 months of
the Effective Date of this Amended Agreement in conjunction with the
golf course. This requirement shall include enhancement and
maintenance on both the east and west sides of Highway 224 in a
meaningful way which promotes a quality entry to the Resort. This
schedule will require that golf holes 11, 12, and 13 be programmed for
early construction so as to allow for final landscape in this period.
A final plan for the entry corridor shall be submitted to the County
within 30 days of completing the preliminary design and engineering
for the related portions of the golf course. Said plan shall comply
with the standards set forth in the SR 224 Corridor Plan completed by
Design Workshop for Summit County and shall require Low Impact Permit
approval.
<PAGE>
3.2.6 Golf Course. The Canyons Master Plan includes an environmentally
sensitive 18-hole golf course, as depicted in Exhibit B.4 so as to
satisfy the County's requirement that The Canyons be a world class,
all season resort. The parties to this Amended Agreement whose
property includes land for the proposed golf course acknowledge and
agree that completion of the course is one of the highest priority
public amenities in the SPA. To this end, all affected property owners
hereby agree to establish an agreement within 90 days of the Effective
Date of this Amended Agreement for the purpose of setting such lands
aside at no cost to the County, RVMA, or other entity for the
construction of the golf course. The Developers shall permit the golf
course developer to construct the amenity without obstruction or
interference. Prior to start of construction of the golf course, the
affected property required for completing the golf course, including
adequate buffer areas, shall be conveyed at no cost to the RVMA.
Further, the RVMA and the Master Developer will ensure that the course
is completed within 36 months of the effective date of this Amended
Agreement, starting as early as possible in the Spring of 2000. In the
event that the Master Developer does in fact exercise and commit the
funds to ensure delivery of the golf course as indicated herein, then
the Master Developer shall have the option of taking ownership of the
golf course in its entirety. The golf course design shall, to the
extent feasible based on the planned location, maximize the
preservation of natural features especially in viewshed areas. This
will be accomplished through the use of a "target course design" in
the most environmentally sensitive areas. Outside of such areas design
flexibility shall be permitted. In addition, the stream corridor in
Willow Draw will be reclaimed by designing a more natural stream
channel that removes the stream from culverts and creates appropriate
water features, and pedestrian trails and benches along the stream
through creative grading and as part of the plan. While priority may
be given to residents and guests of properties within the boundaries
of the RVMA and to a Developer participating in financing the course
when approved by separate agreement with the RVMA, tee times, subject
to all standard rules, regulations, and fees established for RVMA
properties, shall be made available to the general public. The golf
course shall require a Low Impact Permit approval.
Section 3.3 Project Benchmarks. The Global Principles require that this
Amended Agreement include "benchmark assessments" that link development of the
Project and individual Project Sites to implementation of public policy,
accomplishment of specific mitigation measures, and completion of amenities and
other proposed or anticipated public benefits. This section implements these
requirements through the Project Benchmarks (the "Benchmarks") specified in the
following sub-sections. Each benchmark sets forth performance standards, a
system for monitoring performance, and enforcement provisions to remedy
non-performance. The individual Benchmarks shall be enforced, as described
below, through one or more of the following enforcement provisions: (1)
conditions of approval for individual condominium or subdivision plats, site
plans, building permits, or low impact permits; (2) the Annual Review and
default provisions set forth in this Amended Agreement; and (3) through the
authority vested in and the obligations of the RVMA, as described in Exhibit E,
and only when applicable The Colony Master Association.
<PAGE>
3.3.1 Development Phasing. Development of the Project should proceed
in logical phases, described in Section 3.2, generally beginning with
the Resort Core and working outward toward the edges.
a) Standard. The Master Developer will develop its Project Sites
within the Canyons SPA in accordance with the Phasing
requirements established in Section 3.2 of this Amended
Agreement.
b) Monitoring. As part of the Annual Review process, the RVMA
shall prepare a report that summarizes the amount of development
undertaken by the Master Developer and participating landowners
over the previous twelve months as measured in square feet on
building permits issued and certificates of occupancy issued.
The report will state the amount of development by type of use,
including the number of hotel and lodging units, permanent
residential dwelling units, retail, and other land uses as
identified on Exhibit B.2. The report will include an assessment
from the Park City School District regarding the number of
school students generated from all development within the
Canyons SPA. The report also will show annual development in
square feet, relative percentages, and the location of the
development. Beginning with the second Annual Report, a
cumulative chart will be prepared showing the same data for all
development to date.
c) Enforcement. If the County finds, on the basis of substantial
evidence, the Master Developer or Participating Landowners have
not complied with the material terms and conditions of this
Section 3.3.1, the Master Developer or individual Project Site
developers, depending on the specific situation, may be declared
in default of this Amended Agreement by the County which shall
have available to it the default procedures set forth in Section
5.1 of this Agreement, the enforcement procedures set forth in
Section 5.2 of this Agreement, as well as the ability to
withhold future approvals.
3.3.2Employee Housing. All development outside of The Colony and Mines
Ventures Development Areas shall provide affordable housing for
employees to improve quality of life, reduce impact upon local
housing, and manage and limit in-commuting to the Snyderville Basin.
The Silver King Mines Developer shall be required to participate in
the employee housing program. A detailed Affordable Employee Housing
Plan must be developed. Technical Appendix A hereto specifies the
commitments of the Project to develop and carry out a Plan to provide
such housing and housing finance assistance. A three-way cooperative
agreement between Summit County, Mountainlands Community Housing
Trust, and the RVMA is envisioned to form the legal/regulatory and
implementing framework. However, the requirements of the Project to
undertake the Affordable Employee Housing Plan are independent of this
three-way agreement.
<PAGE>
a) The Plan. The RVMA shall offer and provide employee housing
that meets, at a minimum, the total unit requirement stated in
The Rosenthal Report in Technical Appendix A. However, further
work must be undertaken to develop a specific Affordable
Employee Housing Plan for The Canyons SPA. The Master Developer
and participating landowners, either together or through the
RVMA, shall:
(1) Identify alternative methods available to produce the
required mix of housing by type. This may include, but shall not
be limited to the capitalization of a development fund by
Mountainlands Community Housing Trust or other entity approved
by the BCC to leverage additional funds for housing
construction, acquisition and rehabilitation, or employee
housing assistance; write down the cost of construction or
acquisition to make housing affordable; scattered site
acquisition of existing units within the Snyderville Basin;
assistance with security deposits or other up front costs that
present a significant barrier to affordable seasonal or year
round employee rental housing; withdrawal provisions or a loan
feature to the company's savings plan for qualified employees or
assistance with down payment and closing costs for purchase of
existing properties in the Snyderville Basin through cash
grants, low interest loans or mortgage guarantees.
(2) Establish a system for monitoring and identifying changes in
demand (quantity, type and levels of affordability). The parties
will compile an annual report. Data sources will include but
shall not be limited to: (i) the Mountainlands Community Housing
Trust monthly data on housing requests; (ii) annual employee
housing survey of major employers in the Park City and
Snyderville Basin area; and (iii) and the Rosenthal and
Associates annual Park City Housing Affordability Update that
includes the Snyderville Basin.
(3) Forecast, based on the best available information from the
Master Developer and Participating Landowners, typical
development scenarios, together with Projected job generation
rates that might be anticipated over a five year period. The
purpose of the forecast is to provide a means to identify a
schedule for the timely delivery of appropriate employee housing
product. This forecast shall provide the base upon which a
Housing Action Plan, with a one-three-five year time frame,
shall be developed. The forecast use here shall, to the extent
possible, be updated at least every two years and the five year
Housing Action Plan shall be maintained and updated accordingly.
<PAGE>
(4) Using the estimated total number of eligible employees and
other data identified in the Rosenthal & Associates report,
there shall be a projection of the number of employees that
qualify under the three income categories, those being high,
medium, and low based on Housing and Urban Development (H.U.D.)
guidelines or other standards appropriate to the Snyderville
Basin. There shall also be an estimate of the number of eligible
employees in each of the three categories who travel to work
from outside the Basin. For the balance of employees, estimate
the number and type of housing units and/or assistance programs
required in each of the three categories.
(5) To establish a tool for measurement, estimate the total
square feet per employee of housing required by housing
type/program offered. The study shall consider existing housing
conditions in the Snyderville Basin, standards applied in
comparable resort and mountain communities, and other relevant
data.
(6) Identify the range of employee housing by "demand" so as to
be able to prioritize delivery and availability. This must
specifically relate the number of jobs created, and therefore
employee generation, to the specific phasing schedule identified
herein and as refined by then current information. The demand
shall take into consideration employee housing previously
provided by the Master Developer and other Developers.
(7) Establish acceptable operating standards for rental and
ownership housing programs. In addition, covenants, conditions,
and restrictions will be established for each project to ensure
conformity with established norms. These shall be approved by
the BCC as part of the Housing Action Plan or at the time of a
Final Subdivision or Final Site Plan for any Project Site, which
includes any units dedicated to employee housing.
(8) There shall be methods established for deed restricting
ownership housing in order to preserve and perpetuate affordable
housing stock in the event of sale. The following are examples
of restrictions that might be imposed to ensure long-term
affordable home ownership programs: (1) Subsidy recapture
provision, designed to reclaim the value of subsidies so that
they can be recycled to benefit future home-buyers; (2) Resale
price restrictions, designed to preserve the affordability of
specific housing units for low and moderate income home buyers;
(3) occupancy and use restrictions, designed to assure the
continued use of specific housing units to benefit low and
moderate income households; and (4) the right-of-first refusal
to purchase by The Canyons, Mountainlands Community Housing
Trust or other designee as approved by Summit County.
<PAGE>
(9) For employee housing located in SPA development projects,
standards and requirements shall be established to qualify such
accommodations as eligible Employee Housing on a continuing
basis. These standards will address income; unit mix and type;
long term affordability controls; design and operations.
b) Standard.
(1) Required Performance:
(a) More than 50% of employee housing units required to meet
the demands generated by the Project, as determined in
the Plan, will be supplied within the SPA boundaries.
(b) All "rental" employee housing units shall be located
within the SPA boundaries. "For sale" employee housing
units may be located either within the SPA boundaries or
elsewhere in the Snyderville Basin and/or Park City
area. The 20 rental employee housing units owned by the
Master Developer and located in Prospector Square are
allowable under this Amended Agreement and shall be
considered a credit against the required total housing
requirements determined in the Plan provided that these
units are restricted for employee use only and used by
employees who must meet the criteria of subparagraph (e)
below.
(c) A package of ownership subsidy and gap financing
programs will be offered through the partners to
eligible employees.
(d) All employee housing programs will be developed
proportionate to the percent of employees generated from
development completed in all Development Areas except:
(1) The Colony; and (2) Mines Ventures. The study will
determine a projected construction phasing requirement,
which shall be tied to demand, and which will be
reviewed as part of the Annual Review. For constructed
housing, the increments of development will be economic
units where economy of scale in finance and construction
are reasonable.
(e) Only employees who earn at least eighty (80) percent of
their salary from employment that is located within the
boundaries of the RVMA during the period of residency
shall be eligible to reside, together with spouse and
children, in an employee housing unit established
hereunder.
<PAGE>
(2) 180 Day Milestones: 180 days from final approval of this
Amended Agreement, the following shall be completed and
presented to the BCC for review and approval.
(a) A formal written Affordable Employee Housing Action Plan
Agreement will be drafted and presented to the boards of
MCHT, the RVMA, and the Board of County Commissioners
specifically stating the terms for cooperation and
construction and operation of the employee housing
consistent with the Plan and performance objectives
outlined above. Should MCHT not be a participant, the
County and the RVMA shall agree on another acceptable
partner or arrangement for providing the housing
contemplated in this benchmark.
(3) First Annual Review Milestones:
(a) Using the scope of work outlined above, a report with
recommendations will be submitted to the decision making
boards of the parties for review, comment and approval.
Following receipt of the report, the Summit County Board
of Commissioners shall review the report and, subject to
any conditions or changes which the BCC determines to be
reasonable and appropriate, give final approval to a
five year comprehensive Affordable Employee Housing
Action Plan. The Plan shall project how much and when
employee housing demand will occur within the projected
buildout of The Resort and that portion of the Resort
Community that is within the boundary of the RVMA and
shall establish a specific one-three-five year Housing
Action Plan for addressing demands in the first five
years. This Action Plan shall also specifically define
(i) the number of units by type and location (where
known), (ii) projected rental rates and sales prices,
(iii) proposed deed restrictions, (iv) leasing
provisions, (v) rules and regulations regarding
occupancy, (vi) desired unit sizes in square feet, (vii)
ownership of rental units, (viii) sale/resale program,
(ix) unit furnishing (where applicable), and (x)
specific housing finance programs to be offered and
mechanisms to implement them.
(b) The Housing Action Plan shall be updated at least every
three years to ensure that there will continue to be a
five year estimate of housing needs for the Canyons SPA.
The BCC, depending on the development phasing schedule,
may require the update prior to the three year schedule.
The BCC and the RVMA shall take this matter under
consideration during the Annual Review.
<PAGE>
c) Monitoring. The Annual Review process will report on the
status of the affordable housing unit production and need, as
well as the status of the five year Housing Action Plan,
including the nature and success of housing assistance
programs established, and all other aspects of the Plan
described above.
(1) Monitoring Measures:
(a) MCHT will review and participant in the annual reports
and reviews with the County. Should MCHT choose not to
participate, the Planning Commission (in lieu of the
MCHT), the BCC, and the RVMA will participate in the
annual review.
(b) Number of employees by employee class as identified in
the Rosenthal Report.
(c) Percentage of employee housing development in
predevelopment by type as outlined in the Rosenthal
Report. Predevelopment means that a parcel(s) have been
identified and secured by either a letter or intent or
contract for sale and that preliminary steps including
but not limited to zoning, architecture and engineering
and financing is underway.
(d) Percentage of employee housing development underway by
type as outlined in the Rosenthal Report. Underway means
a building permit has been issued no less than 30 days
prior to the due date for the Annual Review.
(e) Monitoring will be used to re-adjust the housing mix and
type in accordance with local housing trends and
development.
d) Enforcement. If the County finds, on the basis of
substantial evidence, that the RVMA has not complied in good
faith with the material terms and conditions of this Section
3.3.2 and that the amount of affordable housing produced and
the level of housing assistance offered is less than the
demand that has been generated by the Project, then the County
may declare that the RVMA is in default of this Amended
Agreement and the County shall have available to it the
default procedures set forth in Section 5.1 herein and the
enforcement procedures set forth in Section 5.2 herein, as
well as the authority to withhold future approvals, to include
Building Permits for Project Sites that impact employee
housing needs. The RVMA shall not be found in default if it is
actively engaged in an effort to produce additional affordable
housing and said housing will be ready for occupancy within
180 days.
<PAGE>
3.3.3 Environmental Protection Measures. A variety of environmental
protection measures have been proposed as a part of Project development
to mitigate potential impacts on the environment and to generally
enhance habitat and natural resources.
a) Standards.
(1) The Natural Resources Management Plan attached
hereto as Exhibit G and the Construction Mitigation and
Management Plan attached hereto as Exhibit F provide an
assessment of potential impacts and related mitigation
measures that will be designed into the Project or
conducted during and after development activity.
Specific standards are set forth in these Exhibits that
augment standards normally enforced by the County and
other agencies. All Project Site Plans shall include
construction mitigation plans and a natural resource
management plan when required by the Director, both of
which shall be consistent with the requirements of
Exhibits G and F. These plans shall be submitted as
part of the Final Plat, Site Plan, or Low Impact Permit
application to the County.
(2) The Natural Resource Management Plan does not take
into consideration the impact, if any, of the
additional TDR units to be located in The Colony
Development Area. Prior to or in conjunction with the
Joint Operating Agreement, required herein, The Colony
Developer and the Director shall determine whether
these is any additional impact that must be accounted
for as a result of the additional TDR lots.
b) Monitoring. Exhibits G and F both specify monitoring
programs to be conducted during construction and, following
project completion, on an ongoing basis. The results of this
monitoring shall be incorporated into the Annual Review of this
Amended Agreement. In addition, during construction, each
individual Project Site Developer shall, as part of its
construction mitigation plan requirement, pay to the County,
reasonable costs not to exceed $15,000 for inspections by an
independent engineer, jointly selected by the County Community
Development Director and/or the County Engineer. The
independent engineer shall conduct weekly inspections at least
one time per week of the construction mitigation measures
prepared and approved as part of that development, as well as
other inspections as may be reasonably necessary from time to
time to ensure compliance with this Section. A written report
shall be submitted to the County with a copy to the Project
Site Developers.
<PAGE>
c) Enforcement. The County shall have the ability to enforce
environmental impact mitigation and natural resource protection
policies, standards, and improvements by withholding
condominium or subdivision plat, site plan, and building permit
approvals, and issuing stop work orders for a particular
Project Site until environmental impact mitigation and natural
resource protection policies associated with that particular
Project Site are addressed consistent with this Amended
Agreement, the Development Code, and other County or other
agency policies and programs. In addition, if the County finds,
on the basis of substantial evidence, that a Developer has not
complied in good faith with the material terms and conditions
of this Section 3.3.3, the County may declare such party or
parties in default of this Amended Agreement and the County
shall have available to it the default procedures set forth in
Section 5.1 herein and the enforcement procedures set forth in
Section 5.2 herein.
3.3.4 Amenities, Recreation, and Cultural Arts. The development
contemplated in The Canyons Master Plan is expected to provide a range
of amenities, recreational facilities, and cultural arts facilities,
available to the public as described in this Amended Agreement,
including public and quasi-public facilities that are considered
necessary to promote the type of Resort and Resort Community
contemplated under this Amended Agreement. While this is a requirement
of the Project, The Colony and Mines Ventures Development Areas are
only required to participate in recreational aspects of the
comprehensive program. The programs and facilities are described in
the Recreation, Amenities, Arts and Trails Program in Exhibit I and
The Canyons SPA Master Development Plan in Exhibit B.
a) Standards.
<PAGE>
(1) Exhibit I comprises the "minimum" Amenity Plan to be
undertaken by the RVMA. Exhibit I.3 is The Resort Developer's
amenity program, while Exhibit I.4 describes the RVMA's amenity
program. Together they are the basic level of facilities that
shall be planned to be built over the period required to
complete construction of the resort; the exhibits include a
schedule for completion of the facilities. The RVMA and The
Resort Developer may provide additional amenities as they
determine appropriate. The responsibility and authority for this
work is vested in the RVMA, The Resort, and, to the extent
agreed upon in the Resort Village Management Association
Agreement, other Project Site developers. The amenities and
stated priorities of construction will be diligently pursued by
the RVMA, The Resort, and relevant Project Site Developers. The
first priority of the RVMA is the design and construction of the
golf course. With regard to its obligations, the RVMA shall
establish and maintain a five year capital improvement program
and an annual capital budget for the purpose of scheduling,
budgeting for/ financing, and undertaking these amenities. The
RVMA Amenity Plan, which will be reviewed with the County during
the annual review, may vary somewhat based on the availability
of revenues to and the ability to finance the amenities by the
RVMA. With respect to the Resort's amenity plan, ASC Utah may
amend the implementation schedule for its amenities plan
annually to account for plan changes and adjustments. To alter
the improvements included in ASC Utah's amenity plan, County
approval shall be required. In cases where alternative funding
sources may be available, the potential for use of those sources
will be fully explored in order to achieve the priorities
indicated.
(2) Exhibit I.2 identifies the trail system for The Resort and
the Resort Community. Easements or other conveyances for major
regional trail segments will be given to the Snyderville Basin
Special Recreation District. Conveyances, easements and
construction standards and responsibilities shall be as
described in Exhibit I.2.3.
(3) The RVMA shall prepare a Resort Competitiveness Analysis at
least every five years to assess the position of The Resort and
Resort Community versus other global businesses viewed as
competitors. Such analysis will be undertaken with two markets
in mind - short-term visitors to The Resort and resort property
purchasers. The purpose of the analysis is to identify trends in
the industry and anticipate and implement, when appropriate,
programs, amenities and facilities, marketing strategies, real
estate offerings, and other measures to capitalize on such
trends and attract and retain customers. The RVMA will include
the analysis in the Annual Review in these years that the
analysis is undertaken.
(4) The Master Developer, the RVMA, and Director shall continue
to review the amenity definitions established in Exhibit I.5 for
the purposes of refining and adding additional details that
adequately describe these amenities. The list shall be refined
within 180 days of the Effective Date of this Amended Agreement.
The Director shall seek input from others, such as the Park
City/Summit County Arts Council, to aid in refining the
amenities definitions. The revised amenity description, once
approved by the Director, shall be considered automatically
incorporated into this Amended Agreement, replacing the
descriptions originally included herein.
b) Monitoring. The Resort and the RVMA will review and update
on an annual basis their respective amenity plans and shall
submit such to the County as part of the Annual Review process
as described elsewhere in this Agreement. More specific
descriptions of the basic level of amenities and facilities are
included in Exhibit I.5.
<PAGE>
c) Enforcement. The County shall have the ability to enforce
the amenities, recreation, and cultural arts programs in the
same manner as with any condominium or subdivision plat or site
plan, by withholding condominium or subdivision plat, site
plan, low impact permits, or building permit approvals, or
issuing a stop work order for a particular Project Site until
amenities, recreation, and cultural arts programs associated
with that particular Project Site are addressed consistent with
this Amended Agreement, the Development Code, and other County
or other agency policies and programs. In addition to
enforcement during the individual project approval process, if
the County finds, on the basis of substantial evidence, that a
Developer or Developers or the RVMA has not complied in good
faith with the material terms and conditions of this Section
3.3.4, the County may declare such party in default of this
Amended Agreement and the County shall have available to it the
default procedures set forth in Section 5.1 herein and the
enforcement provisions set forth in Section 5.2 herein.
3.3.5 Transportation System. The scale, location, and activities of
The Resort and Resort Community will create substantial effects upon
traffic and the Snyderville Basin transportation system, increasing
travel demand, congesting key intersections, especially during peak
periods, and increasing the need to proactively manage internal
circulation. The methods to achieve solutions to these potential
problems have been incorporated into the Project, including design
features, special facilities, and specific mitigation measures and
programs. The Project shall provide a high level of transportation
service to its guests and residents through a seamless comprehensive
transportation system serving the internal, sub-regional and regional
needs of guests and employees. The level of participation by The
Colony Master Association will be based on its impact upon existing
conditions or as otherwise required under the Joint Operating
Agreement.
A regional transportation system is envisioned as a key to
avoiding excess congestion from automobile traffic as the region
continues to grow. Such a system might initially serve the
sub-region along the SR 224 corridor from Kimball Junction to Park
City with stops along the way. Later, service to the Salt Lake
Valley may also be deemed appropriate. The Canyons with the RVMA
shall offer leadership and shall investigate and support such a
system in concert with the County and other interested parties. A
comprehensive plan for traffic management and impact mitigation
shall be developed by the RVMA for approval by the BCC.
<PAGE>
a) Standard. The transportation plan shall be derived through
the scopes of work for future study and planning. These scopes
are designed to build on existing work (Exhibit D and Technical
Appendix C) and describe and provide transportation analysis
and recommendations for the future as the SPA develops. The
resulting Transportation Plan must implement the General Plan
policies and Code requirements, specifying road and
intersection design standards and locations and improvements,
paths and walkways to encourage pedestrian circulation, day
skier and Tombstone and Red Pine Village, and Red Pine Lake
remote parking facilities and management programs, and an
internal people mover system, internal RVMA and individual
hotel and lodging property transit and transportation
obligations, and incentives to encourage employee transit
ridership. The scopes of work necessary to produce the required
Transportation and Traffic impact mitigation Plan is as
follows:
(1) Exhibit D, the Parking Plan, describes tentative
parking standards that shall be used for the Project.
These requirements shall be reviewed by the Master
Developer and the Director within 90 days of the
Effective Date of this Amended Agreement to determine
whether the parking standard is adequate. If the
Director determines that the standard is less than
adequate, or inappropriate without added transit
service and facilities, then an alternative standard
shall be established by the Director and said standard
shall automatically be incorporated herein.
(2) Technical Appendix C, Existing Traffic Condition
Analysis includes an existing conditions traffic
analysis and establishes a base traffic case for future
work. In addition to this work, it is recommended that
a means shall be established to take traffic counts on
SR 224 and Canyons Drive including turning movements so
as to track traffic growth and create a data base for
future roadway and intersection design changes if
required.
(3) Technical Appendix C, Traffic Management Plan,
includes a scope of work to be completed in
coordination with subparagraph (4) below. It shall
update the existing conditions analysis, consider
intersection design and road segment alternatives,
signage, develop measures of effectiveness to establish
future mitigation requirements, data monitoring,
traffic modeling, and project coordination with
consultants involved in undertaking the scope of work.
(4) Technical Appendix C, includes a scope of work for
further defining and tracking parking and transit
systems requirements. It is designed to assess
trip-generation characteristics by use, the model split
for those trips, roads and parking requirements;
transit trip and bus requirements; recommended
monitoring; and reporting. The work outlined in the
scope will be completed in coordination with and
combined with the work products from F.5.1 to create an
implementation plan for future transportation systems
planning and implementation for The Resort and Resort
Community.
<PAGE>
b) Monitoring. Ongoing monitoring of transportation standards
(e.g., level of service) construction of infrastructure and
other facilities, and the provision of transit among other
things, shall be undertaken consistent with the recommendations
from the Plan completed under the Scopes of Work referenced in
subparagraph (a) above and approved by the BCC. The work scopes
and the ongoing work required by the recommendations will be
conducted by the RVMA with contributions from The Colony Master
Association. The Plan, Section 3.3.5 (a)(3) and (4), will be
prepared and submitted to the County for review and comment no
later than 12 months from the Effective Date of this Amended
Agreement. The County shall return written comments to the RVMA
within 60 days of receipt. The reports will be finalized within
30 days of receipt of the County's written comments with the
final Plan subject to approval by the BCC.
Additionally, a written report will be submitted to the County
within 90 days of this amended agreement becoming final which
establishes the method(s) by which continuing traffic counts
will be obtained on a regular basis as described in
subparagraph (a) 2 above. Once established, the annual traffic
counts data will be submitted to the County with each Annual
Review report.
c) Enforcement. The County shall have the ability to enforce
the transportation policies, standards, and improvements
through maintenance agreements, adopted pursuant to this
Amended Agreement, with each of the master associations, with
respect to the area covered by each such master association.
Each master association shall have the obligation of
maintaining transportation improvements, providing traffic
controls, and operating transit services within the area
covered by such master association. The RVMA is responsible for
overall planning as outlined in subparagraph (a) above with
proportionate financial contributions from The Colony Master
Association based on its impact upon existing conditions or as
otherwise required under the Joint Operating Agreement. If the
County finds, on the basis of substantial evidence, that the
RVMA or The Colony Association has not complied in good faith
with the material terms and conditions of this Section 3.3.5,
the County may declare such association in default of this
Amended Agreement and the County shall have available to it the
default procedures set forth in Section 5.1 herein and the
enforcement provisions set forth in Section 5.2 herein, as well
as the authority to withhold future approvals, to include
Building Permits.
3.3.6 Construction Impacts. The Project will be under construction
over a ten to fifteen year period; thus, construction impacts,
including environmental effects and economic and social effects (such
as disruption of business, noise, dust) will be an ongoing topic to be
addressed.
<PAGE>
a) Standard. The Construction Mitigation and Management Plan
attached hereto as Exhibit F includes an assessment of
potential construction impacts and a set of policies,
standards, and programs to address and minimize construction
impacts. Exhibit F augments policies and standards normally
imposed by the County as a part of its code enforcement
activities or other public agencies involved in environmental
protection.
b) Monitoring. Ongoing monitoring of construction impacts shall
be conducted by the County as a part of its code enforcement
activities and development review process. This will be
accomplished in part through the independent engineer provided
for in Section 3.3.3 and the County's monitoring. Failure to
meet specific mitigation procedures shall result in an
immediate notification to the developers and shall be subject
to the enforcement provisions of the Code and any other related
ordinance or regulations, in addition to those specified below.
The results of this monitoring shall also be incorporated into
the Annual Review of this Amended Agreement.
c) Enforcement. The County shall have the ability to enforce
construction management policies, standards, and improvements
by withholding further condominium or subdivision plat, site
plan, and building permit approvals, and/ or issuing a stop
work order for the offending project until the standards set
forth in Exhibit F that are associated with a particular
Project Site are addressed in the condominium or subdivision
plat or site plan for that particular Project Site consistent
with this Amended Agreement. Any approval shall assure that
construction mitigation policies, standards, and measures
reflected in the Collective Standards, including the
Construction Mitigation and Management Plan, are achieved as
time goes forward. In addition to enforcement during the
individual project approval process, if the County finds, on
the basis of substantial evidence, that a Developer or
Developers or the RVMA has not complied in good faith with the
material terms and conditions of this Section 3.3.6, the County
may declare such party in default of this Amended Agreement and
the County shall have available to it the default procedures
set forth in Section 5.1 herein and the enforcement provisions
set forth in Section 5.2 herein.
3.3.7 Open Space Preservation. Open space preservation is a major
policy objective of the General Plan and The Canyons SPA Plan. A
substantial portion of territory in the West Mountain Neighborhood
will ultimately be restricted to permanent open space uses as the
result of the Project as specified in Section 3.8 of this Amended
Agreement.
a) Standard. The Open Space and Viewshed Plan attached hereto
as Exhibit H.2 specifies the location, extent, and character of
open space within the Project, and reflects and implements the
General Plan, the Canyons SPA Zone District, The Canyons SPA
Plan, and the Code. This Amended Agreement, at Section 3.8,
describes in further detail the obligations of the Developers
with respect to open space, including a method for phasing open
space and enforceable restrictions in conjunction with
development.
<PAGE>
b) Monitoring. The Open Space and Viewshed Protection Plan
specifies the open space lands to be protected and the linkage
of this permanent protection to the overall Development
Program. Progress towards completion of this protection shall
be monitored as a part of the development approval process. The
results of this monitoring shall be incorporated into the
Annual Review of this Amended Agreement.
c) Enforcement. The County shall have the ability to enforce
open space and viewshed protection by either withholding
condominium or subdivision plat, site plan, and building permit
approvals, or requiring compliance with Section 3.3.7 as a
condition of approving a plat, site plan, or building permit,
until the open space and viewshed provisions set forth in
Exhibit H are addressed. In addition to enforcement in the
development approval process, the County shall have available
to it the default provisions of Article 5 of this Amended
Agreement. Any County approval shall assure that policies,
standards, and facilities reflected in the Collective Standards
regarding open space are included and achieved. In addition to
enforcement during the individual project approval process, if
the County finds, on the basis of substantial evidence, that a
Developer or Developers or the RVMA has not complied in good
faith with the material terms and conditions of this Section
3.3.7, the County may declare such party in default of this
Amended Agreement and the County shall have available to it the
default procedures set forth in Section 5.1 herein and the
enforcement provisions set forth in Section 5.2 herein.
3.3.8 Comprehensive Signage Plan. A Comprehensive Signage Plan shall
be developed for review and approval by the Director within 90 days of
the effective date of this Amended Agreement. Once approved by the
Director, the Plan shall be automatically incorporated into the
Architectural Guidelines in Exhibit C and the Plan shall then serve as
the regulation for all signs with the area under the RVMA.
3.3.9 Early Landscape Screening. Early landscape screening areas have
been identified in the Open Space and Viewshed Protection Plan and
Exhibit H.4 designates areas where such early landscape screening
materials shall be installed. A detailed planting plan for each of the
areas designated in this Amended Agreement shall be submitted to the
Director for approval within 180 days of the Effective Date of this
Amended Agreement. The implementation of the planting plan for each
designated area shall begin prior to October 1, 2000 and proceed to
completion in a timely fashion. The detailed planting plan shall be in
the form of plans for construction and include detailed construction
plans showing the location, size and type of vegetation, methods of
irrigation and maintenance, and a proposed completion schedule.
<PAGE>
3.3.10 Lifts 18 and 22. Lifts 18 and 22 shown in Exhibit B.6 Mountain
Master Plan are located in a viewshed the community deems sensitive.
When The Resort applies for a Low Impact Permit, specific design
criteria and plans shall be included in the Application demonstrating
minimal impacts to the viewshed. The Community Development Director
prior to or as part of the submission of an application for Low Impact
Permit shall review and approve, or approve with conditions a proposal
for Lifts 18 and 22.
3.3.11 Frostwood Resort Design Guidelines. The Developers of this
Development Area shall submit comprehensive design guidelines related to
streetscapes, roundabout, and boulevard design, exterior street and
plaza area lighting, public art, concepts for the placement of
multi-family residential development onto the hillside, mitigation of
hotel/lodging building height, and landscaping that shall be
incorporated into all Project Sites within the Development Area. These
guidelines shall be submitted to the Director within 90 days of the
Effective Date of this Amended Agreement, which the Director shall
approve, approve with conditions, or deny. In no instance will a
development permit be issued for any Project Site within this
Development Area until these guidelines have been approved by the
Director. In addition to the design guidelines, the Developer shall
submit a detailed proposal for the phasing and completion of these
improvements.
3.3.12 Joint Operating Agreement Required. The Joint Operating Agreement
required between the RVMA and The Colony Master Association in Section
3.5.3 shall be completed and approved by both parties be April 30, 2000.
Upon its approval, the Joint Operating Agreement shall automatically be
incorporated as an Exhibit to this Amended Agreement.
<PAGE>
Section 3.4 Annual Review. The RVMA, with the participation of The Colony
Master Association when requried, shall submit to the County an Annual Report on
the compliance with the Benchmarks. The Annual Report shall be submitted on the
anniversary of the Effective Date or upon such other date as is mutually agreed
upon among the parties. The Director shall review the annual report pursuant to
this Amended Agreement to determine if there has been demonstrated compliance
with the terms hereof. A copy of the Annual Report will be forwarded to the BCC
and Planning Commission by the Director. The Director shall schedule a review of
the Report with the BCC at its next available regular meeting. At the Director's
option, he may issue a report to the BCC on Developer compliance with the terms
and conditions of this Amended Agreement. If the BCC determines that there has
not been demonstrated compliance with the terms of this Amended Agreement, the
Director, RVMA, and/or Developers shall meet to discuss the BCC's determination.
If the RVMA and/or Developers agree with the BCC's determination, they (the RVMA
and/or Developers and the Director) shall discuss mechanisms for remedying the
lack of compliance and agreed upon proposals will be reported to the BCC. If,
the Director and the RVMA and/or Developers are unable to reach an agreement,
and the BCC continues to find, on the basis of substantial competent evidence,
that there has been a material default in accordance with Section 5.1.1 below,
the BCC may follow the procedures set forth in Article 5 below concerning
procedures in the event of a default. The Director or BCC's failure to review at
least annually the Developers' compliance with the terms and conditions of this
Amended Agreement shall not constitute or be asserted by any party as a breach
of this Amended Agreement by the Developers or the County. Further, such failure
shall not constitute a waiver of County's right to revoke or modify this Amended
Agreement according to the terms and conditions set forth herein.
Section 3.5 Master Associations. There shall be two master associations
maintained at all times over all of the Property in the SPA. The Canyons Resort
Village Management Association (the "RVMA") shall be maintained over all areas
in the SPA except for The Colony, Mines Ventures, and the Silver King Mines
Development Areas. There shall be a separate master association which shall be
maintained over The Colony, Mines Ventures, and Silver King Mines Development
Areas.
3.5.1 The Canyons Resort Village Management Association.
3.5.1.1 The purposes of the RVMA are as set forth in The
Canyons Resort Village Management Agreement attached hereto as
Exhibit E and are summarized as follows: (i) to regulate and
maintain certain standards and levels of maintenance of all
buildings, roads, and landscaping within The Canyons SPA except
for The Colony, Mines Ventures, and Silver King Mines
Development Areas; (ii) to run and operate that portion of the
Resort Community outside of The Colony, Mines Ventures, and
Silver King Mines Development Areas, including without
limitation acquiring, building, developing, maintaining, and so
forth, amenities, such as streets, roads, and pedestrian
pathways, a golf course, a people mover, public gathering
areas, skating rinks, utilities, and other such amenities and
improvements as set forth in Exhibit I; (iii) to market that
portion of the Resort Community outside of The Colony and Mines
Ventures Development Areas (as a commercial property the Silver
King Mines Developer agrees, which will be formalized through
the Joint Operating Agreement, to participate with the RVMA
with regard to marketing and other applicable resort operations
and to contribution to such efforts, which will include the
payment of a comparable fee as paid by other properties within
the RVMA, and which said agreement shall run with the land so
long as the Silver King Mines Development area is operated as a
commercial property); (iv) to perform design and architectural
review functions; (v) to establish and enforce rules and
regulations for that portion of the Resort Community outside of
The Colony, Mines Ventures, and Silver King Mines Development
Areas; and (vi) to levy and collect assessments necessary to
carry out the purposes described above.
3.5.1.2 The RVMA shall file Articles of Incorporation under
Utah Law, within 30 days of the effective date of this Amended
Agreement.
3.5.1.3 The Canyons Resort Village Management Agreement,
attached hereto as Exhibit G, as amended in accordance with
this Amended Agreement, shall serve as the governing document
of the RVMA.
<PAGE>
3.5.1.4 All of the participating Development Areas except The
Colony, Mines Ventures, and Silver King Mines (with the
specific exception noted in Subparagraph 3.5.1.1) shall be
parties to that agreement which shall run with the land and be
binding upon those Participating Landowners, or their
successors.
3.5.1.5 Each Developer shall cooperate in establishing owner or
management associations and/or easements and maintenance
regimes reasonably required for the convenient and mutually
beneficial use and operation of the Project. 3.5.1.6 The
provisions of The Canyons Resort Village Management Agreement
that relate to the RVMA's obligations under this Agreement may
not be amended without the express written consent of the
County, which consent shall not be unreasonably withheld or
delayed.
3.5.2 The Colony Master Association. The master association maintained
over The Colony, Mines Ventures, and Silver King Mines Development Areas
shall be for the purposes of regulating and maintaining certain
standards and levels for installation and maintenance of all buildings,
roads, and landscaping within those Development Areas; architectural
review; establishing rules and regulations related to these development
Areas. 3.5.3 Master Association Joint Operating Agreement. A Joint
Operating Agreement shall be established between The Colony Master
Association and the RVMA to define the responsibilities and commitments
of each association for joint functions including cost sharing related
to among other things open space management, environmental and wildlife
enhancement programs, participation in the Annual Report to the County,
and other joint functions as defined in this Amended Agreement. The
Joint Operating Agreement shall be completed and presented to the County
for review, comment, and approval prior to the approval and recordation
of The Colony Plats III, IV, or V, and shall automatically become an
exhibit to this Amended Agreement.
Section 3.6 Infrastructure Improvements and other Mitigation Measures.
3.6.1 Construction of Infrastructure Improvements. Individual Project
Site Developers shall construct at their own cost those infrastructure
improvements, contemporaneously with approval of final subdivision plats
and site plans, as are required by the Code, the County Engineer, and
any applicable special service district or county service area, and
subject to and as modified by any applicable terms of this Amended
Agreement.
3.6.2 Off-Site Infrastructure. Individual Project Site Developers shall
comply at their own costs with the applicable sections of the Code, as
amended, for off-site and project infrastructure requirements at the
time of final subdivision or condominium plat or site plan approval.
This shall include the verification of the continued availability of the
following for Project Sites at the time of building permit issuance: (a)
sewage treatment capacity to cover anticipated development within the
site plan or plat, (b) water and water pressure adequate for residential
and commercial consumption and fire flows, (c) capacity for electrical
and telephone service, and (d) road capacity.
<PAGE>
3.6.3 Special Infrastructure / Community Facilities and Improvements.
Those Developers specifically noted in this Subsection and the RVMA will
provide the following infrastructure and community facilities and
improvements:
3.6.3.1 Fire Station Site. A site for a fire station, as
designated in Exhibit B.1 and B.5.6, which will be constructed,
equipped, and operated by the Park City Fire District, shall be
dedicated to the Fire District: a) at a time mutually agreed to
by the Master Developer and the Fire District, or b) at the
time a Final Plat or Site Plan Approval that is inclusive of
the physical site for the fire station, but in no event later
than five years after the Effective Date of this Agreement.
3.6.3.2 Public Access Trails. Certain trails designated for
public access within the Canyons SPA Plan shall be subject to
trails easements granted by the applicable Developers. Two
classes of public access trails will be established. Class A
trails are those conveying public easements or some other form
of conveyance acceptable to the Snyderville Basin Special
Recreation District. Class B trails are those having private
easements but still accessible to the public. The Class A
Public Access Trails are shown in Exhibit I.2.1. Class B trail
locations are generally shown in Exhibit L.2.2. All
responsibility related to the provision and construction of
these trails are fully described in Exhibit L.2.3.
3.6.3.3 Public Utility Easements. Developers agree to grant the
County and its Special Districts perpetual rights and
easements, in common with others for the benefit of properties
within the SPA Zone, to install, construct, maintain, and
repair utility lines, cables, wires, conduits, pipes, mains,
poles, guys, anchors, fixtures, supports and terminals,
repeaters, and such other appurtenances of every nature and
description as the County may deem reasonably necessary to
service Project Sites that will be developed or improved as
provided for under this Amended Agreement, including without
limitation those for the transmission of intelligence by
electricity, for water, electricity, telecommunications, gas,
sewage, septic, sanitary sewer, and drainage. Easements
required hereunder shall be granted within 60 days of request
therefor by the County of a specific alignment for such
easement. The Developer of a Project Area may offer the County
suggestions regarding the alignment. All approvals shall be
complete and easements granted by the end of the 60 day period.
All utilities shall be constructed in such a way as to minimize
the impact on the burdened property and interference with
existing or proposed structures, as well as to not adversely
impact the aesthetics of the surrounding properties and to
restore and revegetate the area equal to or better than the
preexisting condition. This requirement for the provision of
public utility easements shall be a mandatory provision in the
Resort Village Management Agreement and in the governing
documents of The Colony Association. All utilities, as
reasonably determined by the County, shall be underground to
the extent possible.
<PAGE>
3.6.3.4 Transportation and Transit System. Developers shall not
protest the creation of a Transportation Service District or
Service Area which provides transportation services into the
Canyons SPA Zone District. Further, the RVMA shall contribute a
lump sum amount of $265,000 (seed monies) or some appropriate
equivalent contribution to the Transportation Service District
or Service Area within 90 days of its creation or some other
mutually agreed to period. The purpose of the contribution will
be to provide for buying or otherwise acquiring buses,
developing bus stops, and constructing other necessary
transportation facilities. If similar existing transit service
into The Canyons is being provided at the time of the request
for contribution by the Transportation Service District, the
new service must meet or exceed the existing service
requirements, and to the extent existing contracts are in
place, the replacement service and related contributions will
begin at the end of such contract term. Furthermore, the new
service shall be consistent with the Transportation Plan
prepared under Section 3.3.5 and reviewed and approved by the
County.
3.6.3.5 Amphitheater. Consistent with the Master Amenities Plan
set forth in Exhibit I, the RVMA shall provide an appropriately
sized amphitheater at the mid-mountain development, as
described in Exhibit I.5, similar in quality to the Ford
Amphitheater in Vail, Colorado. A detailed proposal shall be
submitted for a Low Impact Permit before construction may
commence.
3.6.3.6 Gardens. The RMVA shall provide for floral gardens,
including annual and perennial plants in selected locations
throughout the Resort Core. These gardens shall be of high
quality and well maintained and where possible provided in
conjunction with parks, trails, and other similar areas. These
areas shall be approved as part of a Low Impact Permit for the
comprehensive landscape plan for the central pedestrian street
in the Resort Core and in the approval of the final site plan
for individual Project Sites in the Resort Core, Frostwood, and
Lower Village Development Areas.
3.6.3.7 Convention Center. The RVMA shall provide a Convention
Center in the Resort Core. The Convention Center shall be as
described in the RVMA master amenity plan. The Convention
Center shall provide "state of the art" convention and meeting
facilities and amenities. A study shall be presented by the
RVMA to the BCC prior to the construction of the Convention
Center for the purposes of discussing design options. The
Facility shall, to the extent practicable, contain exhibition
space nearby. A detailed proposal shall be submitted for a Low
Impact Permit before construction may commence.
3.6.3.8 Artist Residency Program & Facility. The RMVA shall
provide for an artist residency program and facility at the Red
Pine Village.
<PAGE>
3.6.3.9 Frostwood Lift. This Amended Agreement requires the
installation of a transportation lift to connect the Frostwood
Development Area with the Resort Core by a temporary and a
permanent alignment connecting to the Lower, the alignments for
both are shown in Exhibit B.4 . The Developer or Developers of
the Frostwood Development Area shall provide the County with
evidence of an agreement that provides for the construction,
operation, and maintenance of a temporary and permanent lift
and a schedule for constructing the lifts prior to the issuance
of the first building permit for a Frostwood Project Site.
Either alternative shall be installed prior to issuance of
Certificates of Occupancy for the first Project Site for the
Frostwood Development Area unless the Developer has
demonstrated to the Director that construction of the lift,
although not complete, is progressing and that a bond in an
amount that will secure the installation of the lift shall be
posted, then the time frame for construction may be extended to
a date 15 days before the official commencement of skiing at
The Resort in that calendar year. The permanent lift shall be
constructed before or in conjunction with the completion of the
lift described in Section 3.6.3.10. (The Frostwood Developers
shall not be relieved of the responsibility to provide the
permanent lift but may, with the approval of the Master
Developer, retain the lift designated as temporary herein on a
permanent basis).
3.6.3.10Lower Village Lift. This Amended Agreement requires the
installation of a transportation lift to connect the Lower
Village directly with the Resort Core. A people mover would
fulfill this requirement. The lift shall be installed prior to
the issuance of a certificate of occupancy for the first
Project Site (excluding the Welcome Center, gas station, retail
convenience store, and any single family detached dwelling
units) in the Lower Village Development Area. In the
alternative, a bond in an amount that will secure the
installation of the lift shall be posted by the RVMA of other
affected Developers and there shall interim convenient and
frequent mass transit between the Lower Village and the Resort
Core. The location and design of the lift and terminal
facilities shall require low impact permit approval as
described in Article 1 and Section 2.2.4.
3.6.3.11RVMA Tree Planting Program. The RVMA shall budget for
and undertake annually a tree planting program. The objective
of the program shall be the on-going planting of larger
quantities of seedlings and small caliper trees throughout the
RVMA area, together with a limited number of larger specimens
in the highly visible areas. This shall be an annual
responsibility of the RVMA. Participating Landowners will grant
a landscaping and maintenance easement to the RVMA for the
purposes of installing and maintaining such landscaping. This
program shall not eliminate the landscape requirements of a
Project Site Developer, which will be reviewed and approved by
Summit County with the subdivision plat or site plan, or as
otherwise required in this Amended Agreement.
<PAGE>
Section 3.7 Assurance of Water Supply. The Master Developer has entered
into an agreement with Summit Water Distribution Company that the Master
Developer anticipates will provide a supply of water adequate for its needs for
construction and operation of the first several years of The Canyons Master
Plan. Total demand for build out of the Project has been calculated through an
engineering study completed by EWP Engineering entitled The Canyons
Infrastructure Master Plan - Final Report, November 17, 1998, which is
incorporated by reference herein and which shall serve as the Utility
Infrastructure Master Plan, unless an amendment thereto is approved by the BCC
and applicable service districts. Dependant upon the adequacy of water supply,
the Master Developer anticipates that Summit Water may provide for its future
water needs. The purpose of this section is limited to supplying the County with
an informational understanding of possible water sources which may serve the
Canyons SPA Zone District. Prior to approvals of specific condominium and
subdivision plats, site plans, and building permits, more definitive commitments
with respect to water quantity and quality will be required in accordance with
Section 2.7.4.1, other provisions of this Amended Agreement, and the Snyderville
Basin Development Code.
Section 3.8 Open Space Lands and their Enforceable Restrictions.
3.8.1 Amount of Open Space. Areas of Open Space are depicted in the
Open Space Plan set forth in Exhibit H.2. attached hereto. More than
90% of all lands within The Canyons SPA Plan is graphically depicted
as open space in the Open Space Plan. The County and the Developers
agree that throughout the Term of this Amended Agreement, including
any amendments pursuant to Section 5.13 below, these lands shall
remain as open space as designated in the Open Space Plan.
3.8.2 Five Classes of Open Space. The following five classes of open
space are established by this Amended Agreement.
3.8.2.1 Master Planned Open Space. The Master Planned Open
Space, as defined in the Open Space Plan will protect
approximately 4,200 acres. This class of open space will
encompass all lands, other than The Colony as described in
Exhibit H.2.1, unless replaced by another designation described
elsewhere in this section, and will allow agricultural uses,
skiing, hiking, other active and passive recreational uses, and
easements for utilities, required infrastructure and the like.
The Master Planned Open Space is established as of the
Effective Date of this Agreement. The Master Planned Open Space
will be maintained by the owner of the land on which the Master
Planned Open Space is located or by The Canyons Resort Village
Management Association. Master Planned Open Space shall be deed
restricted as development occurs on certain lands of the Master
Developer, and lands of Osguthorpe, Silver King, Mines Ventures
and in the Resort Center, as described in this section. Other
Master Planned Open Space lands will become Third Party
Protected Open Space, as also provided for in this section.
<PAGE>
3.8.2.1.1 Lands Owned by the Master Developer. The
Master Planned Open Space associated with development
on lands owned or controlled by the Master Developer
(the "Master Developer Lands"), as shown on Exhibit
H.2.1, shall be deed restricted as subdivision plats
and site plans are approved. The Planning Commission
shall include a review of the Master Developer's deed
restricted open space in its annual review in order to
ensure that the percentage of deed restricted open
space is roughly equivalent to the percentage of the
Master Developer's development approved through plats
and site plans.
3.8.2.1.2 Osguthorpe Lands. With respect to the
property owned or controlled by Osguthorpe, as shown on
Exhibit H.2.1 hereto, the mechanism for additional
enforceable restrictions on the open space associated
with the Osguthorpe lands shall be addressed at the
time the first Project Site located on Osguthorpe lands
is submitted to the County for condominium or
subdivision plat or site plan approval. The mechanism
for permanent open space protection shall be deed
restrictions or some other method mutually agreeable to
Osguthorpe and the County, and shall provide permanent
protection on a basis proportionate to the pace of
development. A specific phasing plan demonstrating such
protection shall be submitted with the first Project
Site development application.
3.8.2.1.3 Silver King and Mines Ventures. The open
space associated with these Development Areas will be
subject to additional enforceable restrictions, either
by platting or by deed restriction, at the time each
Project Site is submitted to the County for condominium
or subdivision plat or site plan approval.
3.8.2.2 Third Party Protected Open Space. The lands designated as
Third Party Protected Open Space on the Open Space Plan include
the State of Utah School and Institutional Trust Lands
Administration("SITLA") lands, which total approximately 520
acres of land, as depicted on Exhibit H.2.2 hereto. These lands
will be secured by conservation easements benefiting such third
parties as are agreed upon by the parties. Until being placed
under a conservation easement, such property shall be considered
Master Planned Open Space.
<PAGE>
3.8.2.2.1 SITLA Lands. A conservation easement over 25%
of the portion of the SITLA Lands designated as open
space on Exhibit H.2.2, for the benefit of the County,
or such other beneficiary as may be agreed upon by the
parties, shall be granted within 90 days of the
Effective Date of this Amended Agreement. A
conservation easement over the remainder of the SITLA
Lands designated as open space shall be granted
according to the following schedule: a total of 50% of
the SITLA Lands will be placed under a conservation
easement at such time as building permits for 25% of
the buildable square footage in the Red Pine Village
Development Area have been issued; a total of 75% of
the SITLA Lands will be placed under a conservation
easement at such time as building permits for 50% of
the buildable square footage in the Red Pine Village
Development Area have been issued; and a total of 100%
of the SITLA Lands will be placed under a conservation
easement at such time as building permits for 75% of
the buildable square footage in the Red Pine Village
Development Area have been issued. The lands that are
to be dedicated as perpetual open space shall begin on
the west boundary and proceed eastward.
3.8.2.2.2 Adequate financial arrangements for the
maintenance of such lands, to the extent that such
funding has been demonstrated to be necessary by
similar funding for similar lands in the Snyderville
Basin, shall be made by the Developers or The RVMA at
the time each conservation easement is granted.
3.8.2.3 Deed Restricted Open Space and Buffer Lands. That
portion of the approximately 320 acres of land identified in
Exhibit H.2.3, Resort Center Open Space and Buffer Lands, that
will not be used for golf in accordance with Section 3.2.2 of
this Amended Agreement shall be deed restricted as open space
at the time the Project Sites on which designated Open Space
and Buffer Lands are approved, and such a deed restriction
shall be a condition of approval for any such Project Site. For
such lands that are planned as part of the golf course, the
boundaries of the easements shall be finalized and an easement
or other conveyance made in favor of the RVMA no later than 90
days after final engineering for the golf course is completed.
The perimeter of the easement or conveyance shall include an
area located a distance of 30 feet from any point along the
edge of the fairways. In addition, as the anticipated course is
largely a "target course," those areas between tee boxes and
fairways shall also be subject to the easement, generally
drawing a straight line between the outside edge of the
easements for both, thus forming a continuous easement between
the tee boxes and fairways. The lands to be dedicated as open
space are be shown in The Canyons Master Illustrative Plan,
Exhibit B, for each of the development sites in the Resort
Center. The uses allowed on the Resort Center Open Space and
Buffer Lands will be recreational uses, such as golf and parks.
Prior to the imposition of deed restrictions, the areas
designated Resort Center Open Space and Buffer Lands shall be
Master Planned Open Space. The Open Space and Buffer Lands
shall be maintained by either the landowner upon which the open
space is located or the RVMA.
<PAGE>
3.8.2.4 Neighborhood Parks. A neighborhood park shall be
included within each Development Area within the Resort
Community with the exception of The Colony, Mines Ventures, and
Silver King Mines, and shall be of a reasonable size, and
contain appropriate improvements for that neighborhood. A plan
for the park site and the construction of the improvements
shall be submitted by the Developer as part of the first
Project Site within that Development Area. All of the Parks
will be maintained by The RVMA.
3.8.2.5 Transferred Development Rights (TDR) From Lands Outside
the Canyons SPA. The Master Developer has arranged for the
transfers of density from two parcels outside of The Canyons
SPA to be used within The Canyons SPA. These are the Mountain
Meadows and Mutcher properties identified in Exhibit H.2.
Third-party conservation easements have been or will be placed
on the open space from which the density has been transferred
within ninety (90) days of this Amended Agreement or such other
later date agreed upon by the County.
Section 3.9 Payment of Fees.
3.9.1 Planning Fees. SPA Rezone Application, Development Agreement
Application, Development Review, Engineering and Related Fees. Pursuant
to the provisions of Summit County Resolution 99-11, the Developers have
paid all sketch and Rezone fees associated with the approval of The
Canyons SPA Plan. Developers shall receive no further credits or
adjustments with respect to fees paid prior to the SPA Plan approval
toward any other Project site development review fees, platting, or
similar standard engineering review fees or other fees generally
applicable to plats, site plans, low impact permits, or building permit
review and approval. Application and review fees for final Site Plans,
Plats and/or maps for each phase of The Canyons SPA Plan shall be paid
at the time of application for any such approval. As such, the County
may charge such standard planning and engineering review fees as are
generally applicable at the time of application, pursuant to the
provisions of Resolution 99-11, as amended, or other applicable
statutes, ordinances, resolutions, or administrative guidelines.
<PAGE>
3.9.2 Development Impact Fees. In consideration for the agreements of
the County in this Amended Agreement, the Developers agree that the
Project Sites shall be subject to all impact fees of the County or any
other special service distric which are (1) imposed at the time of
issuance of building permits, and (2) generally applicable to other
property in the Snyderville Basin; and, Developers waive their position
with respect to any vested rights to the imposition of such fees, but
shall be entitled to similar treatment afforded other vested projects if
the impact fee ordinance makes any such distinction. If fees are
properly imposed under the preceding tests, the fees shall be payable in
accordance with the payment requirements of the particular impact fee
ordinance and implementing resolution. Notwithstanding the agreement of
the Developers to subject The Canyons SPA Plan to impact fees under the
above-stated conditions, the Developers do not waive Developers' rights
under any applicable law to challenge the reasonableness of the amount
of the fees within thirty (30) days following imposition of the fees on
The Canyons SPA Plan based upon the application of the Rational Nexus
Test. For purposes of this Amended Agreement, the Rational Nexus Test
shall mean and refer to a standard of reasonableness whereby The Canyons
SPA Plan and Property shall not bear more than an equitable share of the
capital costs financed by an impact fee or exaction in relation to the
benefits conferred on and impacts of The Canyons SPA Plan. The
interpretation of "rational nexus" shall be governed by the federal or
Utah case law and statutes in effect at the time of any challenge to an
impact fee or exaction imposed as provided herein including, but not
limited to, the standards of Banberry Development Corp. v. South Jordan
County, or its successor case law.
Section 3.10 Survival of Developers' Obligations. Notwithstanding any provisions
of this Amended Agreement to the contrary, so long as this Amended Agreement has
become effective and all appeal periods have expired, and as a partial
consideration for the parties entering into this Amended Agreement, the parties
agree that the Developers' obligations to provide to the County the following
enumerated benefits shall survive the term of this Amended Agreement, as defined
in Section 5.9.
(a) Granting of any Class A Trail easement on an alignment as provided
for in Exhibit I.2.3 to the Snyderville Basin Special Recreation
District;
(b) Dedication of any open space provided for in this Amended Agreement
proportionate to completed development, measured by dividing the
constructed square footage of completed development by the total
allowable square footage of development within the Project;
(c) Payment of impact fees to the extent such fees are payable under the
terms of this Amended Agreement and any applicable impact fee ordinance
or implementing resolution;
(d) Compliance with the indemnification and hold harmless provisions in
Section 6.7 hereof, and the mutual releases provisions in Section 5.12.2
hereof;
(e) Construction of any amenity as provided in this Amended Agreement if
and to the extent that there is a Project Site associated with such
amenity and such Project Site has been constructed;
(f) Construction of any major amenities, in accordance with Section
3.3.4; and
(g) Construction of any roads or public improvements covered by a
recorded plat, at such time as lots are purchased, and as provided for
in the relevant development improvements agreement, unless earlier
vacated prior to the sale of any lots.
<PAGE>
Section 3.11 Obligations and Rights of Mortgage Lenders. The holder of any
mortgage, deed of trust, or other security arrangement with respect to the
Property, or any portion thereof, shall not be obligated under this Amended
Agreement to construct or complete improvements or to guarantee such
construction or completion, but shall otherwise be bound by all of the terms and
conditions of this Amended Agreement which pertain to the Property or such
portion thereof in which it holds an interest. Any such holder who comes into
possession of the Property, or any portion thereof, pursuant to a foreclosure of
a mortgage or a deed of trust, or deed in lieu of such foreclosure, shall take
the Property, or such portion thereof, subject to any pro rata claims for
payments or charges against the Property, or such portion thereof, deed
restrictions, or other obligations which accrue prior to the time such holder
comes into possession. Nothing in this Amended Agreement shall be deemed or
construed to permit or authorize any such holder to devote the Property, or any
portion thereof, to any uses, or to construct any improvements thereon, other
than those uses and improvements provided for or authorized by this Amended
Agreement, as would be the case in any assignment, and thus shall be subject to
all of the terms and conditions of this Amended Agreement, to include the
obligations related to the completion of amenities and improvements.
Section 3.12 Transfers of Development Rights (TDR). A number of additional units
have been established within the Canyons SPA for the purposes of allowing the
transfer of density, both within and from outside the boundary of the Canyons
SPA, to preserve certain open space and important viewsheds. Exhibit K which
incorporates the TDR Agreement (Exhibit K.1) and the TDR Program (Exhibit K.2)
establishes all of the Transfer of Density allowances under this Amended
Agreement and of the obligations and commitments related to the transfer of
density, which obligations and commitment are expressly assumed and agreed to by
the County and Developers. Those owners of parcels of real property located
outside the SPA boundary that have agreed to restrict the development of such
property in exchange for a transfer of density to within the SPA boundary hereby
agree to record a covenant against their property acknowledging the nature and
extent of such restrictions.
Section 3.13 Other Ski Resorts. With regard to the Mines Ventures and Silver
King Mines development areas, any connection to other ski resorts must be
approved by both Summit County, the Master Developer and the Developer of The
Colony.
Section 3.14 Fractional Interest and Timeshare Unit Conversion Prohibition to
Primary Residential Units. The parties understand and agree that all timeshare
and fractional interest units shall be restricted in such a way as to prohibit
conversion of such to use as primary residential dwelling units. Densities
received by Developers for such units are granted by the County under the
express understanding that these timeshare and fractional interest units are for
resort accommodation only.
<PAGE>
Section 3.15 Automobile Prohibition at Red Pine Village, Tombstone, and Red Pine
Lake Development Areas. As required in Section 3.3.5(a) of this Amended
Agreement, a remote parking and management plan, to include check-in, concierge
service and transportation between parking and accommodation, must be included
in the Transportation Plan. This aspect of the Plan shall be adopted and
implemented in conjunction with hotel/lodging unit development in Red Pine
Village, Tombstone, and Red Pine Lake Development Areas. In general, automobile
access to these areas will be prohibited. Access will be provided and maintained
for service vehicles and emergency services.
ARTICLE 4
FURTHER OBLIGATIONS OF THE COUNTY
Section 4.1 Land-Secured Financing Districts and Related Financing Techniques.
At the request of the Master Developer or the RVMA, the County, in its sole and
absolute discretion, may consider the use of land-secured financing for
financing the public improvements required for the Project, including without
limitation special assessments and special taxes under state law, and may
include capital and non-capital financing or both. The County, at its sole
discretion, may determine the conditions for the use of such financing,
including, but not limited to, petitions or applications of the Master Developer
and/or the RVMA, the making of deposits sufficient to cover any County
out-of-pocket costs, the need for and the conditions of any current appraisals
required for any financing and any standards relating to the marketing of any
securities, such as lien-to-value ratios, taxable or tax-exempts bonds and
series, or other structural aspects of issues of securities. While the County
agrees to cooperate in the consideration of such financing, including the taking
of proceedings under appropriate authorities, the County does not guarantee that
any securities can or will be issued, sold, or delivered except as may be
approved by the County with the assistance and advice of the financial advisors,
underwriters, consultants, and attorneys retained by the County for such
purposes.
Section 4.2 Cooperation between the County and the Developers. The County agrees
to reasonably cooperate with the Master Developer and any Participating
Landowner in their endeavors to obtain any other permits and approvals as may be
required from other governmental or quasi-governmental agencies having
jurisdiction over Project Sites or portions thereof.
Section 4.3 Employee Affordable Housing. In the event that sites outside of The
Canyons SPA, but within the jurisdiction of Summit County, are consistent with
the General Plan and are identified by the County for employee housing in
accordance with the Developers' obligations under this Amended Agreement and,
if, after reasonable, good faith efforts by the Developers, the Developers do
not receive all necessary permits and approvals for any such site so identified,
the Developers shall not be relieved of the obligation to provide employee
housing that such site was intended to fulfill under this Amended Agreement, but
shall be allowed a reasonable delay in fulfilling such obligation under this
Amended Agreement.
ARTICLE 5
GENERAL PROVISIONS
Section 5.1 Default.
<PAGE>
5.1.1 Occurrence of Default. Default under this Amended Agreement occurs
upon the happening of one or more of the following events or conditions:
(a) A warranty or representation made or furnished to the
County by a Developer, the RVMA, or The Colony Master
Association in this Amended Agreement, including any
attachments hereto, which is materially false or proves to have
been false in any material respect when it was made.
(b) A finding and determination made by the County following a
Benchmark or Annual Review that upon the basis of substantial
evidence, the Master Developer, Developers, The Colony Master
Association, or RVMA have not complied in good faith with one
or more of the material terms or conditions of this Amended
Agreement, including a failure to satisfy Benchmarks under
Section 3.3.
(c) Any other act or omission by the Developer(s) that
materially interferes with the intent and objective of this
Amended Agreement.
5.1.2 Procedure Upon Default. Within ten (10) days after the occurrence
of a default hereunder, the County shall give the Defaulting Party
(where "Defaulting Party" means the party or parties alleged by the
County under Section 5.1.1 as being in default) and the Canyons Resort
Village Management Association and/or The Colony Master Association
written notice specifying the nature of the alleged default and, when
appropriate, the manner in which the default must be satisfactorily
cured. The Defaulting Party shall have sixty (60) days after receipt of
written notice to cure the default. Failure or delay in giving notice of
default shall not constitute a waiver of any default, nor shall it
change the time of default. Notwithstanding the sixty-day cure period
provided above, in the event more than sixty days is reasonably required
to cure a default and the Defaulting Party or some other party, within
the sixty day cure period, commence actions reasonably designed to cure
the default, then the cure period shall be extended for such additional
period during which the Defaulting Party or such other party is
prosecuting those actions diligently to completion.
5.1.3 Remedies Upon Default.
(a) Equitable Remedies: In the event a default remains uncured
after proper notice and the expiration of the applicable cure
period without cure, the County shall have the option of suing
the Defaulting Party for specific performance or pursuing such
other remedies against the Defaulting Parties as are available
in equity. It is stipulated between the parties for purposes of
any judicial proceeding that the County need only establish the
occurrence of default under Section 5.1.1 of this Amended
Agreement to obtain equitable relief.
<PAGE>
(b) Major Default: A "major default" means a default which,
taking this Amended Agreement as a whole, has the effect of
denying the County the essential benefits of this Amended
Agreement or placing upon the County significant negative
fiscal impacts not contemplated by this Amended Agreement. In
the event of a major default, the County shall have the option
of terminating this Amended Agreement in its entirety after
proper notice and expiration of the applicable cure periods
without cure, and after exhaustion of all equitable remedies,
if applicable.
Section 5.2 Enforcement. The parties to this Amended Agreement recognize that
the County has the right to enforce its rules, policies, regulations, and
ordinances, subject to the terms of this Amended Agreement, and may, at its
option, seek an injunction to compel such compliance. In the event that
Developers or any user of the subject property violate the rules, policies,
regulations or ordinances of the County or violate the terms of this Amended
Agreement, the County may, without electing to seek an injunction and after
sixty (60) days written notice to correct the violation (or such longer period
as may be established in the discretion of the Board of County Commissioners or
a court of competent jurisdiction if Developers have used their reasonable best
efforts to cure such violation within such sixty (60) days and are continuing to
use their reasonable best efforts to cure such violation), take such actions as
shall be deemed appropriate under law until such conditions have been honored by
the Developers. The County shall be free from any liability arising out of the
exercise of its rights under this Section; provided, however, that any party may
be liable to the other for the exercise of any rights in violation of Rule 11 of
the Utah Rules of Civil Procedure, Rule 11 of the Federal Rules of Civil
Procedure and/or Utah Code Annotated Section 78-27-56, as each may be amended.
Section 5.3 Reserved Legislative Powers, Future Changes of Laws and Plans,
Compelling Countervailing Public Interest. Nothing in this Amended Agreement
shall limit the future exercise of the police power of the County in enacting
zoning, subdivision, development, growth management, platting, environmental,
open space, transportation and other land use plans, policies, ordinances and
regulations after the date of this Amended Agreement. Notwithstanding the
retained power of the County to enact such legislation under the police power,
such legislation shall only be applied to modify the vested rights described in
this Amended Agreement based upon policies, facts and circumstances meeting the
compelling, countervailing public interest exception to the vested rights
doctrine in the State of Utah. (Western Land Equities, Inc. v. City of Logan,
617 P.2d 388 (Utah 1980) or successor case and statutory law). Any such proposed
change affecting the vested rights of the Developers and other rights under this
Amended Agreement shall be of general application to all development activity in
the Snyderville Basin; and unless the County declares an emergency, the
Developers shall be entitled to prior written notice and an opportunity to be
heard with respect to the proposed change and its applicability to The Canyons
SPA Plan under the compelling, countervailing public policy exception to the
vested rights doctrine. In the event that the County does not give prior written
notice, Developers shall retain the right to be heard before an open meeting of
the Board of County Commissioners in the event Developers allege that their
rights under this Amended Agreement have been adversely affected.
<PAGE>
Section 5.4 Reversion to Regulations. Should the County terminate this Amended
Agreement under the provisions hereof, Developers' Property will thereafter
comply with and be governed by the applicable County Development Code and
General Plan then in existence, as well as with all other provisions of Utah
State Law.
Section 5.5 Force Majeure.
5.5.1 Any default or inability to cure a default caused by strikes,
lockouts, labor disputes, acts of God, inability to obtain labor or
materials or reasonable substitutes therefor, enemy or hostile
governmental action, civil commotion, fire or other casualty, and other
similar causes beyond the reasonable control of the party obligated to
perform, shall excuse the performance by such party for a period equal
to the period during which any such event prevented, delayed or stopped
any required performance or effort to cure a default.
5.5.2 In the event the real estate sales figures published by the Park
City Board of Realtors show a 20% or greater decline for real estate
sales in the Park City area for the comparable six-month period in the
preceding year or if the number of beds rented published by the Park
City Chamber of Commerce/Convention and Visitors Bureau for the Park
City area shows a 10% or greater decline in the number of beds rented
for the comparable six-month period of the preceding year, then the RVMA
and /or The Colony Master Association may notify the Community
Development Director of such downturn in the economy and request a
six-month extension of all the time limits set forth herein. Upon the
verification of such published figures, but in no event later than
twenty (20) days after such request, the Director shall grant a
six-month extension on all relevant dates of performance as set forth
herein. The Director shall thereafter immediately provide notice of such
extension to the Planning Commission and BCC. In the event such downturn
continues, the Director may grant additional six month extensions for
the duration of the downturn. The RVMA may request and receive up to a
maximum of twenty-four (24) months of such extensions during the first
fifteen (15) years of the term of this Amended Agreement.
Section 5.6 Continuing Obligations. Adoption of law or other governmental
activity making performance by the Developers unprofitable, more difficult, or
more expensive does not excuse the performance of the obligations by the
Developers.
Section 5.7 Other Remedies. All other remedies at law or in equity, which are
consistent with the provisions of this Amended Agreement, are available to the
parties to pursue in the event there is a breach.
Section 5.8 Dispute Resolution.
<PAGE>
5.8.1 Binding Arbitration. In the event that the default mechanism
contained herein shall not sufficiently resolve a dispute under this
Amended Agreement, then every such continuing dispute, difference, and
disagreement shall be referred to a single arbitrator agreed upon by the
parties, or if no single arbitrator can be agreed upon, an arbitrator or
arbitrators shall be selected in accordance with the rules of the
American Arbitration Association and such dispute, difference, or
disagreement shall be resolved by the binding decision of the
arbitrator, and judgment upon the award rendered by the arbitrator may
be entered in any court having jurisdiction thereof. However, in no
instance shall this arbitration provision prohibit the County from
exercising enforcement of its police powers where Developers are in
direct violation of the Code.
5.8.2 Institution of Legal Action. Enforcement of any such arbitration
decision shall be instituted in the Third Judicial District Court of the
County of Summit, State of Utah, or in the United States District Court
for Utah.
5.8.3 Rights of Third Parties. This Amended Agreement is not intended to
affect or create any additional rights or obligations on the part of
third parties.
5.8.4 Third Party Legal Challenges. In those instances where, in this
Amended Agreement, Developers have agreed to waive a position with
respect to the applicability of current County policies and
requirements, or where Developers have agreed to comply with current
County policies and requirements, Developers further agree not to
participate either directly or indirectly in any legal challenges to
such County policies and requirements by third parties, including but
not limited to appearing as a witness, amicus, making a financial
contribution thereto, or otherwise assisting in the prosecution of the
action.
5.8.5 Enforced Delay, Extension of Times of Performance. In addition to
specific provisions of this Amended Agreement, performance by the
County, the Master Developer, or a Participating Landowner hereunder
shall not be deemed to be in default where delays or defaults are due to
war, insurrection, strikes, walkouts, riots, floods, earthquakes, fires,
casualties, or acts of God. An extension of time for such cause shall be
granted in writing by County for the period of the enforced delay or
longer, as may be mutually agreed upon.
5.8.6 Attorney's Fees. Should any party hereto employ an attorney for
the purpose of enforcing this Amended Agreement, or any judgment based
on this Amended Agreement, or for any reasons or in any legal proceeding
whatsoever, including insolvency, bankruptcy, arbitration, declaratory
relief or other litigation, including appeals or re-hearings, and
whether or not an action has actually commenced, the prevailing party
shall be entitled to receive from the other party thereto reimbursement
for all attorney's fees and all costs and expenses. Should any judgment
or final order be issued in that proceeding, said reimbursement shall be
specified therein.
5.8.7 Venue. Venue for all legal proceedings related to this Amended
Agreement shall be in the District Court for the County of Summit, in
Coalville, Utah.
<PAGE>
5.8.8 Damages upon Termination. Except with respect to just compensation
and attorneys' fees under this Amended Agreement, Developers shall not
be entitled to any damages against the County upon the unlawful
termination of this Amended Agreement.
Section 5.9 Term of Agreement and Automatic Renewal.
5.9.1 Term. The term of this Amended Agreement shall commence on and the
Effective Date of this Amended Agreement shall be the effective date of
Ordinance 334-A, which approved this Amended Agreement. The Term of this
Amended Agreement shall extend for a period of fifteen (15) years
following the Effective Date above-referenced unless this Amended
Agreement has been earlier renewed or terminated, or its term otherwise
modified by written amendment pursuant to the provisions of this Amended
Agreement (the "Term").
5.9.2 Renewal. This Amended Agreement may be renewed by the Developers
upon identical terms and conditions for up to three (3) additional five
(5) year terms so long as there has been demonstrated substantial
compliance with the terms of this Amended Agreement. This Amended
Agreement shall be automatically so renewed unless all of the Developers
notify the County in writing to the contrary at least one year prior to
the commencement of such renewal term or the County notifies the
Developers of a failure to substantially comply with the terms of this
Amended Agreement at least 90 days prior to the commencement of such
renewal term.
Section 5.10 Termination.
5.10.1 Termination for Inaction. The Master Developer and any
Participating Landowner shall be required to proceed with submittal of
applications for Development Approvals in a timely manner. If no
application for a Development Approval is applied for during any five
(5) year period within the term of this Amended Agreement, then this
Amended Agreement shall be terminated for inaction.
5.10.2 Termination Upon Completion of Development. This Amended
Agreement shall terminate when the Property has been fully developed and
all of the Developers' and the County's obligations in connection
therewith are satisfied, or at the expiration of the term of this
Amended Agreement and any renewals thereof, whichever is sooner. Upon
termination of this Amended Agreement, the County shall record a notice
that the Amended Agreement has been terminated.
<PAGE>
5.10.3 Effect of Termination on Developer Obligations. Termination of
this Amended Agreement as to any Developer of the Property or any
portion thereof shall not affect any of such Developer's obligations to
comply with the Collective Standards and the terms and conditions of any
applicable zoning, or subdivision plat, site plan, building permit, or
other land use entitlements approved with respect to the Property, nor
shall it affect any other covenants or any other development
requirements specified or created pursuant to this Amended Agreement.
Termination of this Amended Agreement shall not affect or invalidate in
any manner the Master Developer's and any Participating Landowner's
obligations of indemnification and defense under Section 6.7 or the
survival provisions of Section 3.10.
5.10.4 Effect of Termination on the County Obligations. Upon any
termination of this Amended Agreement, the entitlements, conditions of
development, limitations on fees, and all other terms and conditions of
this Amended Agreement shall no longer be vested hereby with respect to
the property affected by such termination (provided vesting of such
entitlements, conditions or fees may then be established for such
property pursuant to then existing planning and zoning law), and the
County shall no longer be prohibited by this Amended Agreement from
making any changes or modifications to such entitlements, conditions, or
fees applicable to such property.
Section 5.11 Successors and Assigns. This Amended Agreement shall be binding on
the successors and assigns of the Developers in the ownership or development of
any portion of the Property. Notwithstanding the foregoing, a purchaser of the
Property or any portion thereof shall be responsible for performance of the
Developers' obligations hereunder as to the portion of the Property so
transferred in accordance with the provisions of Section 5.12.1 hereof.
Section 5.12 Release.
5.12.1 Transfer of Property. Developers shall be entitled to sell or
transfer any portion of the Property subject to the terms of this
Amended Agreement upon written notice to the County and acknowledgement
signed by the transferee and the County. Notwithstanding the foregoing,
Developers shall not be required to notify the County or obtain the
County's consent with regard to the sale of lots in single or
multi-family residential subdivisions or commercial areas that have been
platted and received Development Approval in accordance with the terms
of this Amended Agreement. In the event of a transfer of all or a
portion of the Property subject to this Agreement, such transferring
Developer shall obtain an assumption by the transferee of that
Developer's obligations under this Amended Agreement, and, in such
event, the transferee shall be fully substituted for the transferring
Developer under this Amended Agreement as to the Project Site so
transferred, and the transferring Developer shall be released from any
further obligations with respect to this Amended Agreement as to the
parcel so transferred. In the event of any such transfer of Developers'
interests in all or a portion of the Property, the assignee shall be
deemed to be the Developer for all purposes under this Amended Agreement
with respect to that portion of the Property so transferred.
<PAGE>
5.12.2 Mutual Releases. At the time of, and subject to, (i) the
expiration of any applicable appeal period with respect to the approval
of this Amended Agreement without an appeal having been filed or (ii)
the final determination of any court upholding this Amended Agreement,
whichever occurs later, and excepting the parties' respective rights and
obligations under this Amended Agreement, Developers, on behalf of
themselves and Developers' partners, officers, directors, employees,
agents, attorneys and consultants, hereby release the County and the
County's board members, officials, employees, agents, attorneys and
consultants, and the County, on behalf of itself and the County's board
members, officials, employees, agents, attorneys and consultants, hereby
releases Developers and Developers' partners, officers, directors,
employees, agents, attorneys and consultants, from and against any and
all claims, demands, liabilities, costs, and expenses of whatever
nature, whether known or unknown, and whether liquidated or contingent,
arising on or before the date of this Amended Agreement in connection
with the application, processing or approval of the Canyons SPA Zone
District, Canyons SPA Plan, and this Amended Development Agreement, to
include any claims for vested development rights by any Developers on
property which is within the Canyons SPA Zone District.
Section 5.13 Amendments to this Amended Agreement. This Amended Agreement may be
amended from time to time upon written notice to the Master Developer and by
mutual written consent of the County and the Developer or Developers whose
property is the subject of the proposed amendment or whose property is directly
impacted by such amendment.
5.13.1 Substantial Amendments. Any amendment to this Amended Agreement
that alters or modifies the Term of this Amended Agreement, permitted
uses, increased density or intensity of use, deletion of any major
public amenity described herein, or provisions for reservation and
dedication of land, including open space dedications, shall be deemed a
"Substantial Amendment" and shall require a noticed public hearing and
recommendation by the Planning Commission and a noticed public hearing
and decision by the Board of County Commissioners pursuant to the Equal
Dignities Rule prior to the execution of such an amendment. Unless
otherwise provided by law, all other amendments may be executed without
a noticed public hearing or recommendation by the Planning Commission.
5.13.2 Administrative Amendments. All amendments to this Amended
Agreement that are not Substantial Amendments shall be Administrative
Amendments and shall not require a public hearing or recommendation of
the Planning Commission prior to execution by the parties of such an
amendment. The Director shall be empowered by the BCC to make all final
administrative amendment decisions.
5.13.3 Effect of Amendment. Any amendment to this Amended Agreement
shall be operative only as to those specific portions of this Amended
Agreement expressly subject to the amendment, with all other terms and
conditions remaining in full force and effect without interruption.
<PAGE>
ARTICLE 6
MISCELLANEOUS PROVISIONS
Section 6.1 Project is a Private Undertaking. It is agreed among the parties
that the Project is a private development and that the County has no interest
therein except as authorized in the exercise of its governmental functions. The
Project is not a joint venture, and there is no such relationship involving the
County. Nothing in this Amended Agreement shall preclude the Master Developer
and any Participating Landowner from forming any form of investment entity for
the purpose of completing any portion of the Project.
Section 6.2 Construction of Agreement. This Amended Agreement shall be construed
so as to effectuate the public purpose of resolving disputes, implementing
long-range planning objectives, obtaining public benefits, and protecting any
compelling, countervailing public interest; while providing reasonable
assurances of continued vested development rights under this Amended Agreement.
Section 6.3 Covenant Running with Land. This Amended Agreement shall be recorded
against all legal parcels of record within the Property described in Summit
County Ordinance 333-A. All the terms and conditions contained herein shall be
deemed to "run with the land" and shall be binding on and shall inure to the
benefit of all successors in ownership of parcels within the Property. As used
herein, Developers shall include the parties signing this Amended Agreement and
identified as "Developers," and all successor owners of any parcel of land
within the Property.
Section 6.4 Notices. All notices hereunder shall be given in writing by
certified mail, postage prepaid, at the following addresses:
To the County:
The Board of County Commissioners of Summit County
Summit County Courthouse
P.O. Box 128
Coalville, Utah 84017
Summit County Director of Community Development
P.O. Box 128
Coalville, Utah 84017
With copies to:
David L. Thomas
Deputy Summit County Attorney
P.O. Box 128
<PAGE>
Coalville, Utah 84017
To the Master Developer:
Greg Spearn
Senior Vice President
The Canyons
4000 The Canyons Resort Drive
Park City, Utah 84098
Julianne C. Ray
Vice President and Assistant General Counsel
American Skiing Company Resort Properties, Inc.
One Monument Way
Portland, Maine 04101
With copies to:
Clark Thompson, Esq.
Bracewell and Patterson
711 Louisiana, Suite 2900
Houston, TX 77002-2781
To the Participating Landowners:
At the addresses set forth in Ordinance 333-A.
Or to such other addresses or to the attention of such other person as either
party or their successors may designate by written notice.
Section 6.5 Recordation of Agreement. The County Clerk of Summit County
shall, within ten (10) days after the Effective Date of the ordinance adopting
this Amended Agreement, record this Amended Agreement.
<PAGE>
Section 6.6 Severability. If any provision of this Amended Agreement, or
the application of such provision to any person or circumstance, is held
invalid, void, or unenforceable, but the remainder of this Amended Agreement can
be enforced without failure of material consideration to any party, then the
remainder of this Amended Agreement shall not be affected thereby and it shall
remain in full force and effect, unless amended or modified by mutual consent of
the parties. If any material provision of this Amended Agreement is held
invalid, void, or unenforceable or if consideration is removed or destroyed, the
Master Developer or the County shall have the right in their sole and absolute
discretion to terminate this Amended Agreement by providing written notice of
such termination to the other party.
Section 6.7 Indemnification and Hold Harmless.
6.7.1 Agreement of Developers. Developers agree to indemnify and hold
harmless the County, its officers, agents, employees, consultants,
attorneys, special counsel and representatives from liability:
(a) For damages, just compensation, restitution, judicial or
equitable relief arising out of claims for personal injury,
including death, and claims for property damage that may arise
from the direct or indirect operations of the Developers or
their contractors, subcontractors, agents, employees or other
persons acting on their behalf which relates to The Canyons SPA
Plan; and
(b) From any claim that damages, just compensation,
restitution, judicial or equitable relief is due by reason of
the terms of or effect arising from this Amended Agreement.
6.7.2 Developers agree to pay all costs for the defense of the County
and its officers, agents, employees, consultants, attorneys, special
counsel and representatives regarding any action for damages, just
compensation, restitution, judicial or equitable relief caused or
alleged to have been caused by reason of Developers' actions in
connection with The Canyons SPA Plan or any claims arising out of this
Amended Agreement.
6.7.3 The agreement of the Developers to indemnify and hold harmless the
County in this Section 6.7 shall apply regardless of whether or not the
County prepared, supplied or approved this Amended Agreement, plans or
specifications, or both, for the Project. The County may make all
reasonable decisions with respect to its representation in any legal
proceeding. The County agrees to enforce the provisions of this Section
6.7 solely against those individual Developers within The Canyons SPA
Plan whose actions give rise to claims for damages that are the subject
of a particular claim for indemnification hereunder.
6.7.4 The agreements of Developers in this Section 6.7 shall not be
applicable to (i) any claim arising by reason of the negligence or
intentional tortious actions of the County, or (ii) any claim reserved
by Developers under the terms of this Amended Agreement for just
compensation or attorneys fees.
6.7.5 The County shall give written notice of any claim, demand, action
or proceeding which is the subject of the Developers' agreement under
this Section 6.7 as soon as practicable but not later than ten (10) days
after the assertion or commencement of the claim, demand, action or
proceeding. In the case any such notice is given, the County shall be
entitled to participate in the defense of such claim. Each party agrees
to cooperate with the other in the defense of any claim and to minimize
duplicative costs and expenses.
<PAGE>
Section 6.8 Interest of Developers. The Developers intend to hold a fee
interest in all or a portion of the Property at all times necessary to the
performance of its obligations hereunder and that all other persons holding
legal or equitable interests in the Property are to be bound by this Amended
Agreement. Developers acknowledge that County requires them to execute this
Amended Agreement so that the entire Property and each parcel of record included
therein will be subject to this Amended Agreement until such time as Developers
have completed their obligations as specified in this Amended Agreement.
Notwithstanding anything set forth in this Amended Agreement to the contrary:
(a) The Property shall be subject to this Amended Agreement, and any
development of any portion of the Property shall be subject to and in
accordance with the terms of this Amended Agreement.
(b) Nothing in this section shall relieve the Master Developer or any
Participating Landowner from requirements set forth in Section 3.10.
Section 6.9 Time of the Essence. Time is of the essence in this Amended
Agreement.
Section 6.10 Names and Plans. The Master Developer and any Participating
Landowner shall be the sole owner of all names, titles, plans, drawings,
specifications, ideas, programs, designs, and work products of every nature at
any time developed, formulated, or prepared by or at the instance of the Master
Developer and any Participating Landowner in connections with the Property,
subject to the County's disclosure obligations under the Government Records and
Management Act in accordance with Utah State law.
Section 6.11 Computation of Time. In computing any period of time
pursuant to this Amended Agreement, the day of the act, event or default from
which the designated period of time begins to run shall be included, unless it
is a Saturday, Sunday, or legal holiday, in which event the period shall begin
to run on the next day which is not a Saturday, Sunday, or legal holiday.
Section 6.12 Titles and Captions. All section titles or captions
contained in this Amended Agreement are for convenience only and shall not be
deemed part of the context nor affect the interpretation hereof.
Section 6.13 Entire Agreement. This Amended Agreement constitutes the
entire agreement between the parties with respect to the issues addressed herein
and supersedes all prior agreements, whether oral or written, covering the same
subject matter. This Amended Agreement may not be modified or amended except in
writing mutually agreed to and accepted by the County and the Master Developer
and Participating Landowners in accordance with Section 5.13 of this Amended
Agreement.
<PAGE>
Section 6.14 No Waiver. Failure of a party hereto to exercise any right
hereunder shall not be deemed a waiver of any such right and shall not affect
the right of such party to exercise at some future time said right or any other
right it may have hereunder. Unless this Amended Agreement is amended by vote of
the Board of County Commissioners taken with the same formality as the vote
approving this Amended Agreement, no officer, official or agent of the County
has the power to amend, modify or alter this Amended Agreement or waive any of
its conditions as to bind the County by making any promise or representation not
contained herein.
Section 6.15 Execution of Agreement. This Amended Agreement may be
executed in multiple parts or originals or by facsimile copies of executed
originals; provided, however, if executed and evidence of execution is made by
facsimile copy, then an original shall be provided to the other party within
seven (7) days of receipt of said facsimile copy.
Section 6.16 Relationship of Parties. The contractual relationship
between the County and the Master Developer and Participating Landowners arising
out of this Amended Agreement is one of independent contractor and not agency.
This Amended Agreement does not create any third party beneficiary rights. It is
specifically understood by the parties that: (a) The Canyons SPA Plan is a
private development; (b) County has no interest in, responsibilities for, or
duty to third parties concerning any public improvements to the Property unless
the County accepts the public improvements pursuant to the provisions of this
Amended Agreement or in connection with subdivision or condominium plat or site
plan approval; and (c) Developers shall have the full power and exclusive
control of the Property subject to the obligations of the Developers set forth
in this Amended Agreement.
Section 6.17 Applicable Law. This Amended Agreement is entered into
under and pursuant to, and is to be construed and enforceable in accordance
with, the laws of the State of Utah.
Section 6.18 Local Laws and Standards. Where this Amended Agreement
refers to "local laws and standards" it means the laws and standards of general
applicability to The Canyons SPA Plan and all other developed and subdivided
properties within the Snyderville Basin of Summit County.
Section 6.19 State and Federal Law. The parties agree, intend and
understand that the obligations imposed by this Amended Agreement are only such
as are consistent with state and federal law. The parties further agree that if
any provision of this Amended Agreement becomes, in its performance,
inconsistent with state or federal law or is declared invalid, this Amended
Agreement shall be deemed amended to the extent necessary to make it consistent
with state or federal law, as the case may be, and the balance of this Amended
Agreement shall remain in full force and effect.
Section 6.20 Exhibits Incorporated. All Exhibits in the Book of Exhibits
are incorporated by reference herein as if fully set forth herein.
<PAGE>
Section 6.21 School and Institutional Trust Lands. Notwithstanding any
other provision of this Agreement to the contrary, all obligations imposed under
this Agreement as they may relate to the State of Utah acting by and through the
School and Institutional Trust Lands Administration or its successor agencies,
shall be satisfied by the Master Developer, and all parties to this Agreement
agree to look solely to the Master Developer in any action to enforce this
Agreement with respect to lands owned by the State of Utah. Nothing in this
Agreement or the exhibits thereto shall be deemed to waive the sovereign
immunity of the State of Utah except through compliance with the Utah
Governmental Immunity Act; to permit the imposition or enforcement of any lien
or assessment as against state lands; or to waive the provisions of Utah Code
Ann. ss. 17-27-104.5 or any successor statute; provided, however, that the State
of Utah, by execution of this Agreement, agrees to grant conservation easements
directly in the manner required by paragraph 3.8.2.2.1 of this Agreement for the
benefit of the County, and to adhere to the density allocation for State
property provided by this Agreement and the Canyons SPA Plan.
IN WITNESS WHEREOF, this Amended Agreement has been executed by Summit
County, acting by and through the Board of County Commissioners of Summit
County, State of Utah, pursuant to Ordinance ______, authorizing such execution,
and by a duly authorized representative of Developers, as of the above stated
date.
BOARD OF COUNTY COMMISSIONERS OF
SUMMIT COUNTY, STATE OF UTAH
By: /s/ Sheldon D. Richins
---------------------------------
Sheldon D. Richins, Chairman
STATE OF UTAH )
) : ss.
COUNTY OF SUMMIT )
The foregoing instrument as acknowledged before me this 15th day of
November, 1999, by Sheldon D. Richins, Chairman of the Board of County
Commissioners of Summit County, State of Utah.
/s/ Marsha S. Crittenden
- ----------------------------------------
Notary Public
Residing at:Coalville, Utah
My commission expires: 8/14/03
<PAGE>
ASC UTAH, INC., d.b.a. THE CANYONS
/s/ Greg Spearn
------------------------------------
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 15th day of
November, 1999, by Greg Spearn, Vice President of ASC Utah, Inc.
/s/ Spencer Sanders
- ----------------------------------------
Notary Public
Residing at:Salt Lake County, UT
My commission expires: 11/12/03
AMERICAN SKIING COMPANY RESORT PROPERTIES, INC.
/s/ Edward L. Grampp, Jr.
---------------------------------------
By: Edward L. Grampp, Jr.
Its: Vice President
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 15th day of
November, 1999, by Edward L. Grampp, Vice Presidnet of American Skiing Company
Resort Properties, Inc.
/s/ Spencer Sanders
- ----------------------------------------
Notary Public
Residing at: Salt Lake County
My commission expires: 11/12/03
C & M Properties, LLC
By: /s/ Raymond Klein
Its: Manager
STATE OF UTAH )
) :ss
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 17th day of November
1999, by Raymond Klein.
/s/ Sabra Karr Dator
Notary Public
Residing at: Summit Co.
My Commission Expires:
June 25, 2003
Silver King Mines
By: /s/ JW Giallivan, Jr
Its: President
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 8th day of November
1999, by Jack Giallivan, Jr.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
D A Osguthorpe Family Partnership
By: /s/ Stephen A. Osguthorpe
Its: Owner
STATE OF Utah )
) :ss.
COUNTY OF Summit )
The foregoing instrument was acknowledged before me this 7th day of November
1999, by Stephen A. Osguthorpe.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Parkwest Associates
By: /s/ Walter J. Plumb
/s/ James C. Nogg
Its: General Partners
STATE OF Utah )
):ss:
COUNTY OF Summit )
The foregoing instrument was acknowledged before me this 9th day of November
1999, by Walter J. Plumb, III and James C. Nogg.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Beaver Creek Associates
By: illegible
Its: Pres., Madison Company, Gen. Partner
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 9th day of November
1999, by illegible.
Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Olympus Construction LLC
(Jaffe - Groutage Parcel)
By: /s/ Scott Jaffa
Its: General Manager
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 8th day of November
1999, by Scott Jaffa.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
The Canyons Cabin Club, LLC
(Baker Parcel)
By: /s/ Joan B. Edwards
Its: Principal
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 6th day of November
1999, by Joan B. Edwards.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Harold R. & Ruth B. Weight
By: /s/ Harold R. Weight
/s/ Ruth B. Weight
Its: Owners
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 6th day of November
1999, by Ruth B. Weight and Harold R. Weight.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Sugarbowl Associates, LLC
By: /s/ Walter J. Plumb
/s/ Ronald Ferrin
Its: General Partners
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 9th day of November
1999, by Walter J. Plumb and Ronald A. Ferrin.
/s/ Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
IHC Hospitals, Inc.
aka IHC Health Services, Inc.
By: /s/ Everett N. Goodwin Jr.
Its: CFO
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 5th day of November
1999, by Everett N. Goodwin, Jr.
/s/ Janet P. Tuttle
Notary Public
Residing at: Salt Lake
My Commission Expires:
February 21, 2001
Joseph L. Krofcheck
By: /s/ J.L. Krofcheck
Its:
STATE OF Virginia )
) :ss.
COUNTY OF Fairfax )
The foregoing instrument was acknowledged before me this 10th day of November
1999, by J.L. Krofcheck.
/s/ illegible
Notary Public
Residing at: Nur, Inc. Fairfax, Va.
My Commission Expires:
August 31, 2001
Wolf Mountain Resorts, LC
By: /s/ Kenneth Griswold
Its: Managing Member
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 15th day of November
1999, by Kenneth Griswold.
/s/ Barbara L. Myers
Notary Public
Residing at: Park City
My Commission Expires:
April 10, 2002
Willow Draw, LC
By:/s/ Kenneth Griswold
Its: Managing Member
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 15th day of November
1999, by Kenneth Griswold.
/s/ Barbara L. Myers
Notary Public
Residing at: Park City
My Commission Expires:
April 10, 2002
/s/ William Lincoln Spoor
/s/ Leslee Sherrill Spoor
By: William Spoor
Leslee Spoor
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 12th day of November
1999, by Lincoln Spoor and Leslee Sherrill.
/s/ Catherine Dalyai
Notary Public
Residing at: Sandy, UT
My Commission Expires:
May 25, 2000
The Hansen Group, L.C.
By: /s/ David M. Hansen
Its: Member
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 13th day of November
1999, by David M. Hansen, a member of The Hansen Group, L.C.
/s/ Spencer G. Sanders
Notary Public
Residing at: Salt Lake County
My Commission Expires:
November 12, 2003
Beaver Creek Associates
By: /s/ Ronald Ferrin, Madison Co.,
Its: Gen. Partner, President
/s/ Walter J. Plums III, Secretary
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 9th day of November
1999, by Ronald Ferrin & Walter J. Plums III.
Angelica Perez
Notary Public
Residing at: Summit County
My Commission Expires:
November 12, 2002
Thair Schneiter
By: /s/ Walter J. Plumb
Its: Attorney
STATE OF UTAH )
) :ss.
COUNTY OF SUMMIT )
The foregoing instrument was acknowledged before me this 15th day of November
1999, by Walter J. Plumb
/s/ William E. Casaday
Notary Public
Residing at: Salt Lake County
My Commission Expires:
January 18, 2000
Gerald Freedman
By: /s/ Gerald M. Friedman
STATE OF California )
) :ss.
COUNTY OF Los Angeles)
The foregoing instrument was acknowledged before me this 10th day of November
1999, by Gerald M. Friedman.
/s/ Shirley S. Wawee
Notary Public
Residing at: Los Angeles, California
My Commission Expires:
July 19, 2003
