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CC 2015-07-28_11a Ag Mitigation Land_Flora Lane MEMORANDUM TO: CITY COUNCIL FROM: TERESA MCCLISH, COMMUNITY DEVELOPMENT DIRECTOR SUBJECT: CONSIDERATION OF PROPERTY AT FLORA LANE TO BE CONSIDERED FOR AGRICULTURAL MITIGATION LAND (STAFF PROJECT CASE NO. 15-010) DATE: JULY 28, 2015 RECOMMENDATION: It is recommended that the City Council adopt a resolution finding that the property at Flora Lane would serve as appropriate mitigation for the purposes of conversion of 13.1 acres of agricultural land. FINANCIAL IMPACT: No fiscal impact at this time. BACKGROUND: On December 9, 2003, the City Council adopted Ordinance No. 550 (Development Code Amendment 03-005) to implement the second in a series of recommendations initiated by Resolution 3699, incorporating regulations and amending the Zoning Map to create an Agricultural Preservation Overlay District (buffers) of 100 feet around all agriculturally zoned property, requiring adequate findings for subdivision or rezoning of agricultural lands, and implementing mitigation requirements and revising land use regulations for all agricultural districts. On May 11 and May 25, 2011, the City Council introduced and adopted, respectively, an ordinance that amended Section 16.12.170 of the Municipal Code to clarity the definition of “Agricultural Land” for the purposes of conversion and agricultural mitigation policies. NKT Commercial, LTD., has purchased a 9.99 acre property at 1189 Flora Drive (property), located across Arroyo Grande Creek from Strother Park. The property is zoned Agriculture and includes prime farmland soils. NKT is also part owner of a development project that includes the conversion of 11.62 - 13.1 acres of agricultural land and is requesting a determination regarding whether the property would be considered adequate for mitigation purposes. Item 11.a. - Page 1 CITY COUNCIL CONSIDERATION OF PROPERTY AT FLORA LANE TO BE CONSIDERED FOR AGRICULTURAL MITIGATION LAND (STAFF PROJECT CASE NO. 15-010) JULY 28, 2015 PAGE 2 Flora Drive property ANALYSIS OF ISSUES: The purpose of this proposal is to determine if the transfer of certain specific property interests would constitute appropriate mitigation for prospective conversion of agricultural land. There are three components of the proposed mitigation: 9.9 acres to be reserved under a conservation easement; a water well and water rights reserved for the City; and an easement for a potential bicycle and pedestrian pathway across the property. A review of General Plan policies, Municipal Code requirements and property components are included below. It should be noted that in consideration of whether these property interests would serve as appropriate agricultural mitigation, the adequacy of mitigation under the California Environmental Quality Act (CEQA) for the E. Cherry Avenue project, or any other potential agricultural conversion, cannot be fully determined until all potential project related environmental impacts and mitigation measures are fully identified, analyzed, disclosed, circulated for comment and findings are ultimately made for certification by the City Council. However, in that there is General Plan language that leaves to the Council’s discretion the determination of adequate mitigation other than conserving agricultural mitigation land or payment of in- lieu fees, the property owner requests a determination. Item 11.a. - Page 2 CITY COUNCIL CONSIDERATION OF PROPERTY AT FLORA LANE TO BE CONSIDERED FOR AGRICULTURAL MITIGATION LAND (STAFF PROJECT CASE NO. 15-010) JULY 28, 2015 PAGE 3 The 2001 General Plan, including subsequent updates, specifies requirements for agricultural resource protection (Attachment 4). Objective Ag1 states: “Avoid and or mitigate loss of prime farmland soils and conserve non-prime Agriculture use and natural resource lands.” Other policies include requirements for agricultural buffers and maintaining overall protection of lands through a mitigation program by obtaining agricultural easements. Pertinent policies are described below:  Ag1-4 Establish and apply a significance criterion (threshold of significance) for CEQA analysis, as provided by CEQA Guidelines Section 15064.7, that considers loss of prime farmland soils as a significant adverse environmental impact. o Ag1-4.1 Loss of prime farmland soils shall refer to their unavailability for agricultural use. Loss may occur through natural causes or development such as coverage (e.g., paving, construction of buildings, etc.), or conversion to urban/suburban use (including residential yards/gardens and recreational areas). Cessation of agricultural use shall not constitute loss so long as the parcel remains fallow or is allowed to revert to a natural undeveloped state. Site improvements that are intended to support agricultural operations - such as grading, irrigation or drainage facilities, unpaved roads, or farm buildings and structures -- shall not constitute loss so long as the improvements do not substantially diminish the capability of agricultural operations on the parcel or within the area and the improvements are directly related to agricultural production on the site. o Ag1-4.2 Possible mitigation for loss of areas having prime farmland soils may include permanent protection of prime farmland soils at a ratio of at least 1:1 and up to 2:1 with regard to the acreage of land removed from the capability for agricultural use. Permanent protection may involve, but is not limited to, dedication of a perpetual agriculture or conservation easement or other effective mechanism to ensure that the area chosen as mitigation shall not be subject to loss of its prime farmland soils. Suitability of location shall be determined by the City Council. The aim shall be to protect and preserve prime farmland soils primarily within and contiguous to City boundaries, secondly within the Urban Land Use Element area, and thirdly within the larger Arroyo Grande Valley and La Cienega Valley within the Area of Environmental Concern. Other potential mitigation measures for loss of areas having prime farmland soils include payment of in-lieu fees or such other mitigation acceptable to the City Council. o Ag1-4.3 Since prime farmland soils occur naturally and are geographically specific, the only means for mitigation to less than significant is preservation. The City’s aim shall be to maintain contiguity of Ag and C/OS parcels and avoid fragmentation of areas having prime farmland soils. The City shall avoid development of prime farmland soil areas by directing growth potential to more suitable urban locations. Only after the imposition of available mitigation and consideration of alternatives to avoid Item 11.a. - Page 3 CITY COUNCIL CONSIDERATION OF PROPERTY AT FLORA LANE TO BE CONSIDERED FOR AGRICULTURAL MITIGATION LAND (STAFF PROJECT CASE NO. 15-010) JULY 28, 2015 PAGE 4 the proposed action, may the City Council approve development on prime farmland soils subject to overriding considerations as permitted by California Government Code Section 15093. The original intent of General Plan policies, including Ag1-4, was to provide some flexibility on determination of adequate mitigation to provide a superior opportunity to satisfy the goals and policies of the General Plan. General Plan Policy Ag1-4.2 specifically states that “other potential mitigation measures for loss of areas having prime farmland soils include payment of in-lieu fees or such other mitigation acceptable to the City Council.” The following Municipal Code sections are also pertinent to the issue: Section 16.04.070 Definitions – “agricultural land or farmland” means those land areas of the county and/or city specifically designated or zoned as agriculture, agriculture preserve or agricultural general. “Agricultural mitigation land" means agricultural land encumbered by a farmland deed restriction, a farmland conservation easement or such other farmland conservation mechanism acceptable to the city. Subsection 16.12.170 F. Agricultural Land Conversion. 1. The city shall require agricultural mitigation by applicants for discretionary entitlements which will subdivide or change the use of land zoned agriculture or agriculture preserve to any non-agricultural use. 2. Agricultural mitigation shall be satisfied by: a. Granting an agricultural conservation easement, a farmland deed restriction or other agricultural conservation mechanism to or for the benefit of the city and/or a qualifying entity approved by the city. Mitigation shall be required for that portion of the land which no longer will be designated or zoned agricultural land, including any portion of the land used for park and recreation purposes, that will 1) permanently p rotect prime agricultural and prime soils from development; 2) or will benefit preservation of agricultural land and operations through other means as determined by the city council. At least as many acres of prime agricultural land shall be protected as was changed to a non-agricultural use within city limits, or up to two times as many acres of agricultural land shall be Item 11.a. - Page 4 CITY COUNCIL CONSIDERATION OF PROPERTY AT FLORA LANE TO BE CONSIDERED FOR AGRICULTURAL MITIGATION LAND (STAFF PROJECT CASE NO. 15-010) JULY 28, 2015 PAGE 5 protected outside the city but within the city's area of environmental concern, as was changed to a nonagricultural use, in order to mit igate the loss of agricultural land; or b. In lieu of conserving agricultural land as provided above if the city council determines that the payment of in-lieu fees provide a superior opportunity to satisfy the goals and policies of the general plan, agricultural mitigation may be satisfied by the payment of a fee, established by the city council by resolution or through an enforceable agreement with the developer, based upon a farmland replacement factor of up to two-to-one (2:1) to be used for acquisition of a farmland conservation easement or farmland deed restriction. The in-lieu fee option must be approved by the city council. The fee shall be based upon current appraisal information for the acquisition of a conservation easement on replacement land plu s all related city administrative and legal costs. The in-lieu fee, paid to the city, shall be used for farmland mitigation purposes, with priority given to lands with prime agricultural soils located within the city; or c. Other mitigation measures may be determined acceptable by the city council. 3. It is the intent of this program to work in a coordinated fashion with San Luis Obispo County and state agencies, and, therefore, farmland conservation easement areas may overlap partially or completely with h abitat easement areas approved by the state department of fish and game. Up to twenty percent (20%) of the farmland conservation easement area may be enhanced for wildlife habitat purposes as per the requirements of the state department of fish and game and/or San Luis Obispo County management programs; payment of appropriate maintenance, processing or other fees may also be required. 4. Comparable Soils and Water Supply. a. To the greatest extent possible, the agricultural mitigation land shall be comparable in soil quality with the agricultural land whose use is being changed to nonagricultural use. Item 11.a. - Page 5 CITY COUNCIL CONSIDERATION OF PROPERTY AT FLORA LANE TO BE CONSIDERED FOR AGRICULTURAL MITIGATION LAND (STAFF PROJECT CASE NO. 15-010) JULY 28, 2015 PAGE 6 b. The agricultural mitigation land shall have an adequate water supply to support agricultural use and the water supply on the agricultural mitigation land shall be protected in the agricultural conservation easement, the farmland deed restriction or other document evidencing the agricultural mitigation. 5. Eligible Lands. The first priority for agricultural mitigation land shall be farmland located within city limits. The second priority for agricultural mitigation shall be farmland located adjacent to city limits, and the third priority, farmland located within the city's area of environmental concern, as shown in the 2001 General Plan. The criteria for preferred locations or zones for agricultural mitigation land shall be determined by the city council after receiving input from the planning commission and San Luis Obispo County Agricultural Commissioner. In making their determination, the following factors shall be considered: a. The preferred locations shall be compatible with the 2001 General Plan and the general plan of San Luis Obispo County. b. The preferred locations shall include comparable soil types to that most likely to be lost due to proposed development. c. Agricultural mitigation land consisting of contiguous parcels shall be preferred. d. Land previously protected by a conservation easement of any nature or kind is not eligible to qualify as agricultural mitigation land. 6. Requirements of Instruments—Duration. a. To qualify as an instrument encumbering agricultural mitigation land, all owners of the agricultural mitigation land shall execute the instrument. b. The instrument shall be in recordable form and contain an accurate legal description setting forth the description of the agricultural mitigation land. Item 11.a. - Page 6 CITY COUNCIL CONSIDERATION OF PROPERTY AT FLORA LANE TO BE CONSIDERED FOR AGRICULTURAL MITIGATION LAND (STAFF PROJECT CASE NO. 15-010) JULY 28, 2015 PAGE 7 c. The instrument shall prohibit any activity, which substantially impairs or diminishes the agricultural productivity of the land, as determined by the planning commission. d. The instrument shall protect the existing water rights and retain them with the agricultural mitigation land. e. The applicant shall pay an agricultural mitigation fee to pay the costs of administering, monitoring and enforcing the instrument in an amount determined by city council. f. Interests in agricultural mitigation land shall be held in trust by a qualifying entity and/or the city, in perpetuity. Except as provided in subsection (g) of this section, the qualifying entity or the city shall not sell, lease, or conve y any interest in agricultural mitigation land which it shall acquire, except to continue agricultural uses in accordance with the encumbering instrument. g. If judicial proceedings find that the public interests described in Chapter 16.28 of this title can no longer reasonably be fulfilled as to an interest acquired, the interest in the agricultural mitigation land may be extinguished through sale and the proceeds shall be used to acquire interests in other agricultural mitigation land in San Luis Obispo County, as approved by the city and provided in this chapter. h. If any qualifying entity owning an interest in agricultural mitigation land ceases to exist, the duty to hold, administer, monitor and enforce the interest shall pass to the city or its designee. i. Each qualifying entity shall monitor lands and easements it acquires under this chapter and shall review and monitor the implementation of the management and maintenance plans for these lands and eas ement areas. Acreage and Easement The Flora Drive property is 3.2 acres deficient of the 1:1 requirement for agricultural mitigation land that would otherwise be required of the 13.1 acre E. Cherry Ave. project when considering both a residential component (approximately 11.5 acres) and a cultural component proposed by the Japanese Welfare Association (approximately 1.5 Item 11.a. - Page 7 CITY COUNCIL CONSIDERATION OF PROPERTY AT FLORA LANE TO BE CONSIDERED FOR AGRICULTURAL MITIGATION LAND (STAFF PROJECT CASE NO. 15-010) JULY 28, 2015 PAGE 8 acres) for that project. It should be noted that the 1.5 acre JWA property contains an agricultural component. The 9.9 acre Flora Drive property is located within the City limits and zoned Agriculture and contains comparable Class I prime farmland soils. The property would be subject to a perpetual agricultural conservation easement and additional agreements for the water rights, and would allow the existing dwelling unit to remain and a second residential unit on the property. Water The property currently includes a well that that is in working order but considered potentially unreliable. On April 28, 2015, the City Council approved a replacement well on the property that is anticipated to produce a higher volume of water. Water for applied irrigation is a separate component of the safe yield of the groundwater basin and is not included in the City’s groundwater entitlement. An agreement in addition to the agricultural conservation easement would include the rights for the City to water lying below the surface of the property, including, but not limited to, all rights of access to such water, the right to install, repair and maintain wells on the property, for all available water above and beyond the amount of water that is reasonably necessary for the use of owners and/or occupants of the residence on the property and the pursuit of the agricultural uses permitted under the conservation easement. It is estimated that well(s) would produce ample water for the residence and agricultural operations on the property, as well as a substantial amount of water that may be used by the City for irrigation purposes (at Strother Park for example) or other future uses. Bike and Pedestrian Easement The property would be encumbered with an easement that would allow for a future fifteen foot (15’) bicycle and pedestrian path across the property and along Flora Drive or some other agreed upon alignment. The City’s Bicycle and Pedestrian Plan includes a future path over Arroyo Grande Creek at Strother Park to Flora Drive that would ultimately connect Huasna Road to Branch Mill Road. The easement would also include construction staging area for the eventuality that a bridge and path is constructed in the future. The property owner is requesting consideration that the 9.9 acres of prime farmland, as encumbered with a permanent agricultural conservation easement, well(s) and rights to water, and bicycle/pedestrian easements would be appropriate mitigation for the loss of prime agricultural land. ALTERNATIVES: The following alternatives are provided for the Council’s consideration:  Adopt the attached Resolution to find that the property interests as described would provide appropriate agricultural land for conversion of 11.6 -13.13 acres of agricultural land; Item 11.a. - Page 8 CITY COUNCIL CONSIDERATION OF PROPERTY AT FLORA LANE TO BE CONSIDERED FOR AGRICULTURAL MITIGATION LAND (STAFF PROJECT CASE NO. 15-010) JULY 28, 2015 PAGE 9  Modify and adopt the attached Resolution to find that the property as described would provide appropriate agricultural land for conversion of 11.6 -13.13 acres of agricultural land. This alternative may include consideration of additional in-lieu fees and/or that the cultural component of the 1.5 acre portion E. Cherry Ave. property includes an agricultural component and tribute;  Do not adopt the Resolution, provide specific findings, and direct staff to return with a Resolution find that the property as described would provide appropriate agricultural land for conversion of 11.6 -13.13 acres of agricultural land; or  Provide direction to staff ADVANTAGES: Advantages to finding that the property as described would provide appropriate agricultural land for conversion of 11.6 -13.13 acres of agricultural land include allow the property owner to reserve the rights for the purposes of the agricultural conservation easement, water and bicycle/pedestrian easement for the City’s ultimate benefit and for future conveyance to the City, without having to retain fee interest in the property. Additionally, it would provide valuable information to the developers of the E. Cherry property that should their development proposal proceed, the mitigation for impacts to agricultural land would be vetted and considered, especially in terms of the municipal code language of allowing such other mitigation acceptable to the City Council. DISADVANTAGES: Disadvantages to the proposal may include a perception that the discussion is premature. However, as described above, consideration by the Council would assist property owners in determining project components and if an additional small piece of agricultural mitigation land is required. ENVIRONMENTAL REVIEW: No environmental review is required for this item. PUBLIC NOTIFICATION: The agenda was posted at City Hall on July 23, 2015. The agenda and staff report were posted on the City’s website on July 24, 2015. No comments have been received. Item 11.a. - Page 9 RESOLUTION NO. A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ARROYO GRANDE DETERMINING THAT PROPERTY AT 1189 FLORA LANE BE CONSIDERED FOR AGRICULTURAL MITIGATION LAND (APN 007-781-032); APPLIED FOR BY NKT COMMERCIAL WHEREAS, on May 21, 2015, NKT Commercial submitted a request to ensure that required agricultural requirements for the E. Cherry Ave. Specific Plan could be satisfied through an agricultural conservation easement and associated agreements for water and access for 9.9 acres at 1189 Flora Road; and WHEREAS, Arroyo Grande General Plan Policy AG 1-4 and associated implementation measures specify possible mitigation for loss of areas having prime farmland soils; and WHEREAS, Arroyo Grande Municipal Cod~ Section 16.12.170 further requires and specifies methods to fulfill agricultural mitigation; and WHEREAS, the City Council has considered the request of the property owner to consider a combination of agricultural mitigation land acreage, water and access; and NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Arroyo Grande does hereby consider that the proposed agricultural mitigation land at 1189 Flora Road in combination with the stated water rights and access considerations as included in draft form in Exhibit "A" attached hereto and incorporated herein by this reference constitutes appropriate mitigation for the conversion of 13.1 acres of prime agricultural land. On motion by Council Member following roll call vote, to wit: AYES: NOES: ABSENT: , seconded by Council Member the foregoing Resolution was adopted this 29th day of July, 2015. , and by the Item 11.a. - Page 10 RESOLUTION NO. PAGE2 J_IM HILL, MAYOR ATTEST: KELLY WETMORE, CITY CLERK APPROVED AS TO CONTENT: ROBERT McFALL, INTERIM CITY MANAGER APPROVED AS TO FORM: HEATHER WHITHAM, CITY ATTORNEY Item 11.a. - Page 11 EXHIBIT A DEED OF CONSERVATION EASEMENT THIS GRANT DEED OF CONSERVATION EASEMENT is made this _ day of , 2015, by 1189 Flora Road, LLC, a California limited liability company, ("Grantor") in favor of the City of Arroyo Grande a municipal corporation of the State of California ("Grantee"). WITNESSETH: WHEREAS, Grantor is the owner of certain rights, as were reserved in favor of Grantor, in the real property located in the City of Arroyo Grande, San Luis Obispo County, California, more particularly described in Exhibit "A" attached hereto and incorporated by this reference (the "Property"); and WHEREAS, the Property can provide natural resource values including productive open space, wildlife and plant habitat, rural character, scenic values; provides an important filter for rain run-off; and, provides for locally grown produce (collectively, "Conservation Values") all of which are of great importance to Grantor, the people of the City of Arroyo Grande, and the people of the State of California; and WHEREAS, both Grantor and Grantee desire to preserve and conserve these conversation values for the public benefit; and , WHEREAS, Grantor and Grantee intend that the conservation values of the Property be preserved and maintained by the continuation of currently existing land use patterns, including, without limitation, those relating to farming and other legal agricultural activities; and WHEREAS, Grantor and Grantee intend that the conservation values of the Property be further preserved and maintained by limiting the total. residential development at the Property to a single main residential structure and one guest house (the "Total Residential Development"); and, WHEREAS, Grantor further intends, to convey to Grantee the right to preserve and protect the conservation values of the Property in perpetuity, subject to the provisions of this grant; and WHEREAS, Grantee is a municipal corporation of the State of California that is authorized to accept Conservation Easements; and WHEREAS, Grantee agrees by accepting this grant to honor the intentions of Grantor stated herein and to preserve and protect in perpetuity the conservation values of the Property for the benefit of this generation and the generations to come; WHEREAS, Grantee acknowledges and agrees that the Grantor's rights as herein conveyed were reserved by Grantor for the specific purpose of providing this Grant; and except as provided in such reservation, Grantor is not currently the owner of the Property fee. Following the recording of this conveyance, all references to Grantor shall be deemed to refer to the current owner of the Property fee title ("Owner"). Deed of Conservation Easement Page 1 Item 11.a. - Page 12 NOW, THEREFORE, in consideration of the above and the mutual covenants, terms, conditions, and restrictions contained herein, and pursuant to the laws of California and in particular sections 815 and 816 of the Civil Code -Conservation Easements, Grantor hereby voluntarily grants and conveys to the Grantee a Conservation Easement as herein described in gross and in perpetuity over of the Property (the "Conservation Easement"). 1. Purpose. It is the purpose of this Easement to assure that the Property, subject to the legal farming and agricultural uses, and the limited Total Residential Development described herein, will be retained forever for such uses and to prevent any use of the Property that will significantly impair or interfere with the conservation values of the Conservation Easement. The conservation values of particular importance include scenic quality of the undeveloped farmed land that is visible from the surrounding community, and the use of the land in the existing and potential production of agricultural crops. 2. Rights of Grantee. To accomplish the purpose of this Easement, Grantee shall have the right to prevent any _activity on or use of the Property that is inconsistent with the purpose of this Conservation Easement and to require the restoration of such areas or features of the property that may be damaged by any inconsistent activity or use. 3. Prohibited Activities. Any activity on or use of the Property inconsistent with the purpose of this Easement is prohibited. Without limiting the generality of the foregoing, the following activities and uses are prohibited from being established on the Conservation Property: (a) Subdivision of the Property pursuant to the California Subdivision Map Act. (b) Amending the General Plan to a land use category for the Property that would allow a higher density of development than the Total Residential Development herein described. (c) All activities (also called "uses" by the General Plan of the City of Arroyo Grande) that are not permitted under the General Plan of the City of Arroyo Grande as Agriculture or exceed the Total Residential Development are prohibited. 4. Reserved Rights. Grantor reserves to, and excepts for the benefit of the Owner's and their personal representatives, heirs, successors, and assigns, all rights accruing from their ownership of the Property, including the right to engage in or permit or invite others to engage in all uses of the Property that are not expressly prohibited herein and are not inconsistent with the purpose of this Easement. These rights may be exercised without permission or review by the Grantee and include such activities as the planting, growing, and harvesting of crops, construction and maintenance of other improvements appropriate for ongoing agricultural activities, such as fences, agricultural accessory buildings and structures, roads, and water development; and, the repair, replacement and/reconstruction of existing structures, the repair, replacement and construction of any structures within the confines and limitations of the allowed uses and Total Residential Development, or the sale or leasing of underground mineral rights. Deed of Conservation Easement Page2 Item 11.a. - Page 13 5. Grantee's Remedies. If Grantee determines that an Owner is in violation of the terms of this Easement or that a violation is threatened, Grantee shall give written notice to the Owner of such violation and demand corrective action sufficient to cure the violation and, where the violation involves injury to the property resulting from any use or activity inconsistent with the purpose of this Easement, to restore the portion of the Property so injured. If the Owner fails to cure the violation within thirty (30) days after receipt of notice thereof from Grantee, or under circumstances where the violation· cannot reasonably be cured within a thirty (30)-day period, fails to begin curing such violation within the thirty (30)-day period, or fails to continue diligently to cure such violation until finally cured, Grantee may bring an action at law or in equity in a court of competent jurisdiction to enforce the terms of this Easement, to enjoin the violation, ex parte as necessary, by temporary or permanent injunction, to recover any damages to which it may be entitled for violation of the terms of this Easement or injury to any conservation values protected by this Easement, including damages for the loss of scenic, aesthetic, or environmental values, and to require the restoration of the property to the condition that existed prior to any such injury. Without limiting the Owner's liability therefore, Grantee, in its sole discretion, may apply any damages recovered to the cost of undertaking any corrective action on the Property. If Grantee, in its sole discretion, determines that circumstances require immediate action to prevent or mitigate significant damages to the conservation values of the Property, Grantee may pursue its remedies under this Paragraph without prior notice to the Owner or without waiting for the period provided for cure to expire. Grantee's rights under this Paragraph apply equally in the event of either actual or threatened violations of the terms of this Easement, and Grantor agrees that Grantee's remedies at law for any violation of the terms of this Easement are inadequate and that Grantee shall be entitled to the injunctive relief described in this Paragraph, both prohibitive and mandatory, in addition to such other relief to which Grantee may be entitled, including specific performance of the terms of this Easement, without the necessary of proving either actual damages or the inadequacy of otherwise available legal remedies. Grantee's remedies described in this Paragraph shall be cumulative and shall be in addition to all remedies now or hereafter existing at law or in equity. 6. Costs of Enforcement. Any costs incurred by Grantee in enforcing the terms of this Easement against the Owner, including, without limitation, costs of suit and attorneys' fees, and any costs of restoration necessitated by an Owner's violation of the terms of this Easement shall be borne by the Owner. Notwithstanding the foregoing, if an Owner prevails in any action by Grantee to enforce the terms of this Easement, then the Owner's costs of suit, including, without limitation, attorneys' fees, shall be borne by Grantee. 7. Grantee's Discretion. Enforcement of the terms of this Easement shall be at the discretion of Gran~ee, and any forbearance by Grantee to exercise its rights under this Easement in the even to any breach of any terms of this Easement shall not be deemed or construed to be a waiver by Grantee of such term or of any of Grantee's rights under this Easement. No delay or omission by Grantee in the exercise of any right or remedy upon any breach by an Owner shall impair such right or remedy or be construed as a waiver. 8. Acts Beyond Grantor's Control. Nothing contained in this Easement shall be construed to entitle Grantee to bring any action against Grantor for any injury to or change in the Property resulting from causes beyond Grantor's control, including, without limitation, fire, flood, storm, and earth movement, or from any prudent action taken by Grantor under emergency conditions Deed of Conservation Easement Page3 Item 11.a. - Page 14 to prevent, abate, or mitigate significant injury to the Property resulting from such causes. 9. No Public Access. No right of access by the general public to any portion of the Property is conveyed by this Easement whatsoever. 10. Taxes. Following this grant, the Owner shall pay all taxes, assessments, fees, and charges of whatever description levied on or assessed against the Property by c_ompetent authority (collectively "taxes"), including any taxes imposed upon, or incurred as a result of, this Easement, and shall furnish Grantee with satisfactory evidence of payment upon request subject to the right to contest any such taxes. 11. Extinguishrnent. If circumstances arise in the future such as render the purpose of this Easement impossible to accomplish, this Easement can only be terminated or extinguished, whether in whole or in part, by judicial proceedings in a court of competent jurisdiction, and the amount of the proceeds to which Grantee shall be entitled, after the satisfaction or prior claims, from any sale, exchange, or involuntary conversion of all or any portion of the Property subsequent to such termination or extinguishrnent, shall be determined, unless otherwise provided by California law at the time, in accordance with Paragraph 12. Grantee shall use all such proceeds in a manner consistent with the conservation purposes of this grant. 12. Fair Market Value. This Easement constitutes a real property interest immediately vested m Grantee, which the parties stipulate to have a fair market value of ~~~~~~~~~~-($~~~~~--' 13. Condemnation. If the Easement is taken, in whole or in part, by exercise of the power of eminent domain, Grantee shall be entitled to compensation in accordance with applicable law. 14. Assignment. This Easement is transferable, but Grantee may assign its rights and obligations under this Easement only to an organization that is a qualified organization at the time of transfer under Section 170(h) of the Internal Revenue Code of 1954, as amended (or any successor provision then applicable), and the applicable regulations promulgated thereunder, and authorized to acquire and hold conservation easements under state statute (or any successor provision then applicable). As a condition of such transfer, Grantee shall require that the conservation purposes of this grant is intended to advance shall continue to be carried out. 15. Certificates. Upon request by Grantor, Grantee shall within twenty (20) days execute and deliver to Grantor any document, including an estoppels certificate, which certifies Grantor's compliance with any obligation of Grantor contained in this Easement and otherwise evidences the status of this Easement as may be requested by Grantor. 16. Notices. Any notice, demand, request, consent, approval, or communication that either party desires or is required to give to the other shall be in writing and either served personally or sent by first class mail, postage prepaid, addressed as follows: To Grantor: 1189 FLORA DRNE, LLC 684 Higuera Suite B San Luis Obispo, CA 93401 Deed of Conservation Easement Page 4 Item 11.a. - Page 15 To Grantee: City of Arroyo Grande c/o Carmel & Naccasha 1410 Marsh Street San Luis Obispo, CA 93401 or to such other address as either party from time to time shall designate by written notice to the other. 17. Recordation. Grantee shall record this instrument in timely fashion in the official records of San Luis Obispo County, California, and may re-record it at any time as may be required to preserve its rights in this Easement. 18. Monitoring. The Grantee or its designee shall conduct annual monitoring of the conservation values within the Property. Such monitoring shall be done in accordance with a systematic and routine checklist designed to facilitate the identification of trends and changes of the conservation values over time. A copy of each monitoring report shall be given to the Owner. 19. Subordination. The priority of the existing mortgage with respect to any valid claim on the part of the existing mortgage holder to the proceeds of any sale, condemnation proceedings, or insurance or to the leases, rents, and profits of the Property shall not be affected thereby, and any lien that may be created by Grantee's exercise of any of its rights under this Easement shall be junior to the existing mortgage. Upon request, Grantee agrees to subordinate his rights under this Easement to the rights of any future mortgage holders or beneficiaries of deeds of trust to the proceeds, leases, rents, and profits described above and likewise to subordinate its rights under any such lien and to execute any document required with respect to such subordination provided any such subordination by the Grantee shall not result in the extinguishment of this Easement. 20. General Provisions. (a) Controlling Law. The interpretation and performance of this Easement shall be governed by the laws of the State of California. (b) Liberal Construction. Any general rule of construction to the contrary notwithstanding, this Easement shall be liberally construed in favor of the grant to effect the purpose of this Easement and the policy and purpose of the Conservation Act of 1979 as described in sections 815 and 816 f the California Civil Code. If any provision in this instrument is found to be ambiguous, an interpretation consistent with the purpose of this Easement that would render the provision valid shall be favored over any interpretation that would render it invalid. ( c) Severability. If any provision of this Easement, or the application thereof to any person or circumstance, is found to be invalid, the remainder of the provisions of this Easement, or the application of such provision to persons or circumstances other than those as to which it is found to be invalid, as the case may be, shall not be affected thereby. ( d) Entire Agreement. This instrument sets forth the entire agreement of the parties with respect to the Easement and superseded all prior discussions, Deed of Conservation Easement Page 5 Item 11.a. - Page 16 negotiations, understanding, or agreements relating to the Easement, all of which are merged herein. ( e) Successors. The covenants, terms, conditions, and restrictions of this Easement shall be binding upon, and inure to the benefit of, the parties hereto and their respective personal and representatives, heirs, successors and assigns and shall continue as a servitude running perpetually with the Property. (f) Captions. The captions in this instrument have been inserted solely for convenience of reference and are not a part of this instrument and shall have no effect upon construction or interpretation. (g) Counterparts. The parties may execute this instrument in two or more counterparts, which shall, in the aggregate, be signed by both parties; each counterpart shall be deemed an original instrument as against any party who has signed it. In the event of any disparity between the counterparts produced, the recorded counterpart shall be controlling. TO HA VE AND TO HOLD unto Grantee, its successors, and assigns forever. IN WITNESS WHEREOF Grantor and Grantee have set their hands on the day and year first written above. CITY: , City Manager ATTEST: Kelly Wetmore, City Clerk APPROVED AS TO FORM AND LEGAL EFFECT: . HEATHER WHITHAM, City Attorney Deed of Conservation Easement 1189 FLORA ROAD, LLC: By: Tompkins Trust Dated November 14, 2007 Managing Member, Nicholas J. Tompkins, Trustee Page6 Item 11.a. - Page 17 GRANT AND AGREEMENT RE: WATER RIGHTS, FACILITIES THIS GRANT AND AGREEMENT ("Agreement') is entered into effective this _ day of , 2015, between 1189 Flora Road, LLC, a California limited liability company ("FLORA") as the owner of certain rights in the real property more particularly described in Exhibit "A" and by this reference hereby incorporated (the "Property") ; and, the City of Arroyo Grande ("City"). RECITALS 1. WHEREAS, FLORA is the owner, by reservation, of certain water rights, and related water facility easements at the Property (the "Water Rights"); 2. WHEREAS, City is desirous of acquiring FLORA' s Water Rights. 3. WHEREAS, there currently exists upon the Property, an existing well (the "Existing Well") which allows for providing water for the use of the Owners and/or the occupants of the Property (hereinafter collectively the "Occupants"); which also provides water for all of the agricultural uses for which the Property can now or hereafter be utilized (the "Agricultural Uses"). For purposes of this Agreement, Occupants shall also include tenants utilizing the Property for Agricultural Uses. The approximate location of the Existing Well is depicted on Exhibit "B" (the "Well Site") and by this reference is hereby incorporated. FLORA's water rights at the Existing Well are limited to only that water produced at the Existing Well which exceeds the demands and/or requirements of the Occupants and the Agricultural Uses at the Property (hereinafter the "Excess Water") NOW THEREFORE for valuable consideration hereby acknowledged, and upon the terms and conditions contained herein, FLORA does hereby grant and convey to the City: (1) the right to Item 11.a. - Page 18 take and remove FLORA'S Excess Water as produced or otherwise available from the Existing Well and/or the Well Site; (2) an easement for removing the water produced therefrom as more particularly hereafter described (the Underground Easement"); and, (3) such additional easements as reasonably required at the Well Site for installation and maintenance related water pipes , conduits and related improvements, as necessary and for production and transfer of the Excess Water from the Well Site for the purpose of all allowable uses, in accordance with the terms of this agreement. THE PARTIES HEREBY AGREE AS FOLLOWS: 1. FACILITY LOCATION: That the locations of Existing Well, Well Site and Underground Easement and other matters are depicted on Exhibit "B" attached to this agreement. 2 UNDERGROUND EASEMENT: The Underground Easement shall be a , five (5) foot wide easement in favor of the City for the maintenance of underground water lines, conduits, utility systems and related underground improvements for purposes of pumping, obtaining, and conveying Excess Water from the Existing Well off the Property, at the location shown on Exhibit "B" and by this reference hereby incorporated. 3. ALLOW ABLE USES: Allowable uses for the Excess Water shall be any and all lawful uses for the public benefit including use by the City at Strother Park. 3. PROPERTY WATER REQUIREMENTS: FLORA and the City agree that the Occupants of the Property, and all Agricultural Uses shall have a priority right to water produced at the Existing Well and the Well Site for as much water as is required to meet the needs and/or requirements of the Occupants at the Property, and the Agricultural Uses being conducted at the Property (collectively the "Property Water Requirements"). The Parties acknowledge and agree that all Property Water Requirements must be satisfied before any Excess Water exists and that City, in exercising any rights hereunder, shall ensure that the Property Water Requirements are met and satisfied before taking and using any Excess Water. 4. COMMON WELL FACILITIES: The common well facilities shall consist of the Existing Well, as more particularly shown on Exhibit "B", the well casing, pump, electrical service lines, the existing generator and other related equipment as necessary for the production of water at the Well Site. (hereinafter "Common Well Facilities") Item 11.a. - Page 19 5. MAINTENANCE OF WELL AND FACILITIES: (a) Common Well Facilities: Once the City exercises its rights to utilize the Excess Water under this agreement, the City shall therafter pay all costs and expenses: associated with maintaining the Common Well Facilities in proper working and sanitary order and operating the -common Well Facilities for so long as it is possible to procure and distribute the Excess Water from the Existing Well. These operation and maintenance obligations shall not be construed to include obligations with respect to the quality of water that may be produced at the Existing Well, and are hereby limited to operating and maintaining the Common Well Facilities in good working order and repair; (b) Pump and Power System: While Existing Well remains powered by an on-site electric generator, the costs of maintenance and operation of such generator shall be deemed a part of the Common Well Facilities under this Agreement. In the event that the Well Site is hereafter served by a metered electrical utility service provider, the City shall ensure that there are two (2) separate metered installations, consisting of (a) a meter measuring the City's electric use at the Well Site; and (b) a meter measuring all electric use associated with meeting the Property Water Requirements. Following the installation of such electric services and both of these meters, the City shall not be responsible for the electrical expenses and charges associated with the pumping of the Property Water Requirements. (c) Replacement Well: As part of the City's obligation to maintain the Common Well Facilities, the City shall have the obligation to drill a replacement well and place it in operation if the Existing Well should sand up or become inoperative and it is reasonably possible to drill another well within the Existing Well site. (d) Original Users: Notwithstanding anything otherwise stated in this agreement to the contrary, the parties hereby acknowledge and agree that the Occupants of the Property are currently the only users of the Existing Well and the Common Well Facilities (the "Original Users"). Until the City makes any installations of conduit, piping or other improvements so as to allow the City to enjoy the rights herein conveyed, the Original Users shall be solely responsible for all repair, maintenance, costs and expenses associated with operating the Existing Well. 6. INDNIDUAL WATER SYSTEMS: Both the City and the Original Users shall have Item 11.a. - Page 20 the right to install, maintain and repair pipelines, conduit, valves, timers and other well and water equipment and facilities at the Existing Well site, at the installing parties sole cost and expense to enjoy their respective rights. Any such installations by the Occupants, or for purposes of the Agricultural Uses associated solely with the distribution of the Property Water Requirements, shall not be considered a part of the Common Well Facilities. 7. WELL REPAIR AND REPLACEMENTS: In the event that the pump, or other Common Well Facility equipment fail(s), or deteriorate(s) to a condition that requires repair, or replacement for purposes of meeting the Property Water Requirements (hereinafter collectively referred to as "well failure"), the City shall exercise all reasonable and best efforts in order to cause, commence and diligently pursue the repair of the Existing Well and/or Common Well Facilities within 24 hours of either written or telephonic notice of the well failure. 8. CITY'S RIGHT TO RELINQUISH: The City shall have the right to relinquish all rights granted hereunder, and thereby terminate all future obligations hereunder EXCEPT ANY OBLIGATIONS ARISING UNDER PARAGARPH 13, by express unequivocal and unambiguous written notice directed to FLORA, together with a recorded Quitclaim Deed reconveying the City's rights hereunder to FLORA. All future obligations of the City with respect to the operation and maintenance of the Common Well Facilities under this agreement will be extinguished upon delivery of such notice and recorded deed, however the City shall remain liable for all costs and expenses associated with the Common Well Facilities which accrued through the date of the delivery of the notice and recorded deed. 9. PROPERTY OWNER'S OTHER WATER RIGHTS: Nothing contained herein shall be considered as any limitation upon, or conveyance of, the right of the owners of the Property, or their authorized agents, or tenants to drill any and all new wells which the owners deem necessary for any legal use at the Property. 10. WATER LINES, PIPES, AND CONDUIT: The City and the Occupants shall each be solely responsible for the maintenance of their separate pipes, conduits and equipment which serve solely to distribute their water as produced by the Common Well Facilities. In the event of a material leak of pipe failure the City shall have the right to perform any such repairs reasonably necessary to protect the Common Well Facilities at the City's sole cost and expense. Item 11.a. - Page 21 11. NO GUARANTY AS TO QUALITY OR QUANTITY: FLORA does not and cannot make any warranty or guaranty concerning the quantity or quality of the Excess Water which may be available to the City hereunder, or concerning the continuing availability of such Excess Water. City understands and hereby acknowledges that FLORA is not a public utility, is not guaranteeing any specific quantity or quality of water, is not the sole owner of the water rights subject to this agreement, and is not the owner the underlying Property. 12. LANDSCAPING, IMPROVEMENTS: City acknowledges that the Occupants have the right to improve, landscape or otherwise utilize all portions of the Property immediately surrounding the Existing Well site so long as such use does not unreasonable interfere with the rights of the City herein conveyed In the event that the City's installations, repairs, maintenance or any other servicing of the Common Water Facilities or the City's underground water and utility systems, as installed pursuant to Paragraph 2, effect or otherwise damage such Property improvements, landscaping or other use, the City shall be responsible, at the City's sole cost and expense, to return such improvements, landscaping to the same condition they enjoyed prior to the commencement of such repair, service or other work by the City. 13. INDEMNITY: HOLD HARMLESS: This agreement is made on the express condition that FLORA is to be free from all liability with respect to any claim for damages by reason of any injury to any person or persons, or any injury to property of any kind whatsoever and to whomever belonging, from any cause or causes whatsoever, while in, upon or in any way connected with the City's exercise and enjoyment of the City's rights under this Agreement, other than those arising from the intentional or grossly negligent act of FLORA. City hereby covenants and agrees to indemnify and save harmless FLORA from all liability, loss, cost and obligations (including, without limitation, reasonable attorney's fees and expenses), on account of or arising out of any such injuries or losses, however occurring. 14. ASSIGNMENT AND BINDING ON HEIRS: This Agreement shall be binding on the parties hereto and on their successors-in-interest, and shall run with the land. 15. NOTICES: Any and all notices or other matters required or permitted by this Agreement or by law to be served on, given to, or delivered to either party hereto by the other party to this Agreement shall be in writing and shall be deemed duly served, given, or delivered when J. Item 11.a. - Page 22 personally delivered to the party to whom it is directed, or, in lieu of such service, when deposited in the United States mail, first-class postage prepaid to: FLORA: CITY: 1189 FLORA DRNE, LLC 684 Higuera Suite B San Luis Obispo, CA 93401 City of Arroyo Grande Attn: Kelly Wetmore, City Clerk P. 0. Box 550 Arroyo Grande, CA 93421 With copy to: Heather Whitham CARMEL & NACCASHA LLP PO Box 15729 San Luis Obispo, CA 93406 or at such address, and to such addressee( s) as the parties or their successors shall hereafter provide the other by notice in accordance with this paragraph. In the event that any parties' successor(s) in interest fail to provide such addresses to the other, then notice may be directed by publication under applicable statutory law. Whereas the Parties have executed this Agreement effective as of the date first written above. CITY: , City Manager ATTEST: Kelly Wetmore, City Clerk 1189 FLORA ROAD, LLC: By: Tompkins Trust Dated November 14, 2007 Managing Member, Nicholas J. Tompkins, Trustee Item 11.a. - Page 23 APPROVED AS TO FORM AND LEGAL EFFECT: HEATHER WHITHAM, City Attorney Item 11.a. - Page 24 RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: City of Arroyo Grande City Clerk 300 East Branch Street Arroyo Grande, CA 93421 EASEMENT AGREEMENT This Easement Agreement ("Agreement") is made and entered into by and between the CITY OF ARROYO GRANDE, a municipal corporation of the State of California (hereinafter referred to as "City") and 1189 FLORA ROAD, LLC, a California limited liability company (hereinafter referred to as "FLORA "). RECITALS WHEREAS, FLORA is the owner of various rights reserved, in favor of FLORA, in certain real property located in the City of Arroyo Grande as said real property is more particularly described in Exhibit "A" attached hereto and incorporated herein by this reference (the "Property"); WHEREAS, City desires to acquire a pedestrian and bicycle public trail easement across the Property (the "Trail Easement') for purposes of providing non-motorized, non-vehicular Pedestrian and bicycle access to Strother Park, which park lies adjacent to the Property; and WHEREAS, City desires to further acquire a temporary easement on the Property for purposes of construction and staging, relative to the construction of the Trail Easement and for purposes of the construction of a bridge and/or pathway connecting the Trail Easement to Strother Park (the "Connecting Improvements") . AGREEMENT NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties agree as follows: 1 . Recitals. The above recitals are true and correct and are incorporated herein by this reference. 1OF4 Item 11.a. - Page 25 2. Trail Easement: FLORA does hereby grant to City, and City hereby accepts from FLORA, a pedestrian and bicycle access easement (the "Trail Easement") approximately fifteen (15) feet in width over, upon and across the Property as said Trail Easement is more particularly depicted on Exhibit "B" attached hereto and incorporated herein by this reference. The portion of the Trail Easement marked as "Bridge Access Area", may be improved by City with portions of a bridge or other similar access feature for pedestrian and/or bicycle access spanning the existing riparian area and connecting directly to Strother Park. 3. Use of the Easement: The Trail Easement shall be used only for Pedestrian and Bicycle access to Strother Park. There shall be no use of the Trail Easement by motorized or engine powered vehicles or equipment whatsoever, and all Trail Easement improvements shall be designed and installed by the City so as to effectively limit all uses of the Trail Easement as herein set forth. 4. Easement Improvements: The parties further acknowledge and agree that the City shall construct all improvements within and upon the Trail Easement as required by the City, subject to the use restrictions herein setforth. In addition to the Trail Easement, the City shall have an easement to access, construct, install, improve, maintain, operate, and repair any such improvements as City determines necessary or appropriate, provided that such work does not unreasonable interfere with the quiet enjoyment of the Property by the owners of the Property (the "Owners") or their tenants. The Trail Easement surface, other than the Bridge Access Area improvements, shall at all times consist solely of pervious materials. 5. Tvoe of Easement: The Trail Easement, and related easements herein described above shall be non-exclusive and in gross. 6. Construction of Improvements. For purposes of the initial construction of the Tail Easement Improvements, The City shall further have a temporary license to enter upon the Trail Easement and Bridge Access Area for the purpose of storing, equipment, tools, and other materials, and performing work related to the construction of the Trail Easement improvements (the "Improvements"). During the construction of the Improvements, the City shall maintain these areas and all of the adjacent Property subject to this agreement in a good and clean condition, free of all trash and debris and any hazardous waste or other materials generated, used, maintained or otherwise brought to the Property by the City, or any of the City's agents, employees or contractors. The City shall have the right to temporarily fence the Trail Easement and Bridge Access Area, provided that (x) such fencing shall not in any way interfere with the farming or agricultural activities at the Property upon which these areas are located, or (y) the rights and quiet enjoyment of the Owners or their tenants. In the event that the City installs any such temporary fencing, the City shall remove said fencing upon completion 20F4 Item 11.a. - Page 26 of the construction of the Improvements (the "Completion"). This temporary license shall be extinguished and expire upon the Completion or following the passage of eighteen (18) months from the commencement of the construction of the Improvements, which ever first occurs. The City shall indemnify and hold the Owners and their tenants harmless from and against any injury, claim, loss, damage or expense (including reasonable attorney's fees) for any personal injury or property damages arising out of its use of the use of this license, except for such claim, loss, damage, or expense which arises out of the gross negligence or the intentional misconduct of the Owners, their tenants, agents, employees or representatives. 6. Successors and Assigns. All of the provisions, agreements, rights, covenants and obligations in this Agreement shall be binding upon and shall burden and inure to the benefit of the parties hereto, their respective heirs, successors and assigns. 7. Attorney's Fees. If any legal action or proceeding arising out of or relating to this Agreement is brought by either party to this Agreement, the prevailing party shall be entitled to receive from the other party, in addition to any other relief that may be granted, the reasonable attorney's fees, costs and expenses incurred in the action or proceeding by the prevailing party. 8. Governing Law and Venue. This Agreement shall be construed and enforced in accordance with, and governed by, the laws of the State of California. The parties hereto agree that all actions or proceedings in connection with this Agreement-shall be tried and litigated in the Superior Court located in the County of San Luis Obispo, State of California. 9. Severability. If any term or provision of this Agreement is determined to be illegal, unenforceable, or invalid in whole or in part for any reason, such illegal, unenforceable, or invalid provision or part thereof shall be stricken from this Agreement, and such provision shall not affect the legality, enforceability, or validity of the remainder of the Agreement. If any provision or part thereof of this Agreement is stricken in accordance with the provisions of this section, then such stricken provision shall be replaced, to the extent possible, with a legal, enforceable, and valid provision that is as similar in tenor to the stricken provision as is legally possible. 10. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed an original, but all of which together will constitute one and the same instrument. 30F4 Item 11.a. - Page 27 IN WITNESS WHEREOF, this Agreement is hereby executed by said owner and City on the day and year first written above. CITY: , City Manager ATTEST: Kelly Wetmore, City Clerk APPROVED AS TO FORM AND LEGAL EFFECT: HEATHER WHITHAM, City Attorney ' 1189 FLORA ROAD, LLC: By: Tompkins Trust Dated November 14, 2007 Managing Member, Nicholas J. Tompkins, Trustee 40F4 Item 11.a. - Page 28 Reserving to, and for the benefit of Grantor, and the Grantor's successors and assigns (collectively "Grantor"), all of the following interests and rights (collectively the "Reservations"): 1) The right of the Grantor to hereafter establish and convey to the City of Arroyo Grande or any entity described under California Civil Code 815.3,, a Conservation Easement, as described in Section 851 et seq of the California Civil Code, which shall serve to limit development of the Real Property so as to not allow more than one residence and one guest house to exist upon the Real Property (the "Residential Improvements"), and shall otherwise limit the future use of the real property to the occupation of the Residential Improvements, and legal agricultural uses (the "Agricultural Uses"), upon the terms and conditions setforth in the Conservation Easement Agreement attached hereto as Exhibit " " and by this reference hereby incorporated. or as otherwise may be modified or determined by Grantor in Grantor's sole and reasonable discretion. 2) The right of the Grantor to hereafter establish and convey to the City of Arroyo Grande a fifteen (15) foot wide easement for non-motorized pedestrian and bicycle ingress and egress across the Real Property for purposes of accessing Strother Park, and for the construction of a bridge or similar access improvements to said park, lying approximately adjacent to the eastern and northern boundaries of the Real Property, at the location and upon the terms and conditions set forth in Exhibit " " and this reference hereby incorporated or as otherwise may be modified and determined by Grantor in Grantor's sole and reasonable discretion. This reservation includes the right of Grantor to establish and utilize temporary staging and construction areas at the Real Property for purposes of constructing and installing all easement improvements, including by way of example, a bridge to Strother Park. 3) The rights to water lying below the surface of the Real Property, including, but not limited to, all rights of access to such water, the right to install, repair and maintain wells on the Real Property, including all necessary conduits, power and utility systems and all related water well improvements as Grantor deems necessary (the "Water Estate") upon the terms and conditions set forth in Exhibit " " and this reference hereby incorporated or as otherwise may be modified and determined by Grantor in Grantor's sole and reasonable discretion, provided that such Water Estate shall consist solely of all available water above and beyond the amount of water that is reasonably necessary for the use of Owners and/or occupants (collectively "Owners") of the Residential Improvements at the Real Property, and the pursuit of the Agricultural Uses permitted under the Conservation Easement at the Real Property. Grantor's use and enjoyment Water Estate reserved hereunder shall not be otherwise limited, and may be hereafter conveyed or assigned by Grantor in whole or in part to any person or entity, including but not limited to the City of Arroyo Grande. 4) A Power of Termination, as described under California Civil Code 885.010, for the benefit of the Grantor in order to terminate the estate granted hereunder in order to address the failure Item 11.a. - Page 29 of the Grantee Parties to fulfill the conditions ofthis grant or otherwise interfere with the rights reserved by the Grantor. This conveyance is made, and Grantee accepts this conveyance subject to the foregoing Reservations and upon each of the following conditions: (1) That Grantee shall hereafter execute any and all deeds, conveyances, agreements, or instruments which are hereafter required by Grantor in order to allow Grantor, and Grantors' successors and /or assigns, to quietly enjoy and any and all of the Reservations. This obligation is not a personal covenant, and is accepted by Grantee as a condition subsequent. (2) Neither Grantee, or the Grantee's successors and assigns shall interfere with the Grantor's, or the Grantor's successors and assigns, future exercise of the rights reserved by Grantor herein. (3) Subject to the Reservations, the Grantee shall have immediate possession of the Real Property, and may continue in possession thereof only so long as Grantee faithfully performs and complies with each and all of the terms herein contained, (4) The foregoing Reservations, and the terms and conditions of this deed shall be deemed to be reversion conditions running with the land in favor of the Grantor, and the breach of any of the same shall cause the Real Property to revert to the Grantor, its successors and assigns, each of whom respectively, shall have the power of termination and the right of immediate re-entry upon the Real Property. ( 5) By accepting this deed, Grantee acknowledges and agrees, for itself and all of its successors and assigns, that but for the Reservations and reversion conditions, Grantor would not otherwise sell or convey the Real Property to Grantee, and that Grantor would otherwise maintain ownership and control of the Real Property for so long as Grantor required in order to exercise and enjoy the rights herein reserved by Grantor, and/or to convey and provide any of such rights to the City of Arroyo Grande or Grantor's successors in interest as herein provided. It is the Grantor's expressed intention, for the benefit of Grantor, its successor and assigns, that the failure of the Grantee and its successors and assigns (the "Grantee Parties") to comply with the terms of this Grant shall serve as a basis for then terminating the Grantee Parties entire interest in the Real Property. Item 11.a. - Page 30