HomeMy WebLinkAboutA2167 - SENCA, HOTEL AND CONVENTION CENTER PARTNERS I DEVELOPMENT AGR WITH CITY/AGENCY \ qf"Wj=� dgrtrs Hotel ,Conv Cn
IZrS,>IuCic?n 15383 .,,,,M CRI, & City, PA2B6-10
AMENDMENT NO. 1 TO DEVELOPMENT AGRE. AGR #111 (CRA)IlMt #2."-bi7(City)
PALM SPRINGS CONVENTION CENTER AND Res 301 & Res 153$3,12-31-84
In order to acquire the site in accordance with the
timeframes described in the lease option held by SENCA Palm
Springs , Inc. , the Agency agrees to loan to SENCA Palm Springs ,
Inc . $3 , 221 , 350 for a period of time up to one year with interest
accruing at a rate of 12% per annum. Proceeds from this loan
shall be used to extinguish previously existing leasehold
interests in the site or portions of the site, payment of the
first annual leasehold payment on the site, and related
administrative fees payable to the Bureau of Indian Affairs
related to the exercise of the option to lease. Payment under
the loan shall accrue until the earlier of one year or until such
time as SENCA Palm Springs, Inc. has secured the full letter of
credit or other credit enhancement necessary to allow the
breaAing of escrow for the proceeds of the sale of Certificates
of Participation for the proposed financing of the Project. The
City or the Agency shall have the right , however, to accelerate
upon fifteen (15) days written notice sent by Certified Mail to
SENCA Palm Springs, Inc.� the maturity date of this loan to July
11 1985, if the City or Agency should find SENCA Palm Springs,
Inc . ' s performance to be unsatisfactory at that time. Further
details regarding terms of this loan shall be evidenced by a
promissory note executed by SENCA Palm Springs, Inc. and drawn in
favor of the Agency. Futhermore, SENCA Palm Springs, Inc. agrees
that the Agency shall be entitled to received a sum equal to one
percent ( 1% ) of any net profits, if and when received by SENCA
Palm Springs , Inc. , from any sub-leasing or refinancing of the
Phase II property occurring at any time.
CITY OF PALM SPRINGS, CALIFORNIA Shale Energ Corporation
of Americ NCA)
By BY
Frank M. B rt , Mayor Robert H. Shelton, President
Y
Norman R. King, City Manager
PROMISSORY NOTE SECURED BY LEASEHOLD DEED OF TRUST_
(Palm i.Springs Hotel and Convention Center)
$3, 221,350 as of December 31, 1984
Los Angeles, California
FOR VALUE RECEIVED, the undersigned (the "Maker") prom-
ises to pay to Community Redevelopmenc Agency of the City of
Palm Springs, or order, at 3200 East Tahqui tz-McCallum Way,
Palm Springs, California 92662 or at such other place as the
holder hereof may from time to time designate, a principal
sum equal to Three Million Two Hundred Twenty-One Thousand
Three Hundred Fifty Dollars ($3,221,350 ) , with interest on
the unpaid principal balance from time to time outstanding,
at the rates set forth below, payment of principal and
interest to be made in the lawful money of the United States
of America that is legal tender for public and private debts
at the time of payment. Principal and interest shall be
payable as follows:
1. (a) From and after the date hereof to and includ-
ing December 31, 1985 (the "Maturity Date") interest shall
accrue on the outstanding principal balance of this Note at
the rate of twelve (12%) percent per annum.
(b) All interest that accrues hereunder shall be
separately ledgered and shall be entirely due and payable on
the Maturity Date.
(c) On the Maturity Date, the entire principal
balance of this Note together with all interest that has
accrued hereunder shall be due and payable.
2 . (a ) This Note may be optionally prepaid by the
Maker in whole or in part, at anytime, without premium or
penalty.
(b) This Note is being executed simultaneously
with the issuance of certain tax exempt Certificates of Par-
icipation which are being executed and delivered by the
ayee in the aggregate principal amount of $68, 200,000 and
by the City of Palm Springs in the aggregate principal
amount of $36 ,670 ,000 (col�ayee
ectively the "Certificates" ) .
The Maker agrees that the shall have the right to
accelerate the Maturity Date at its option upon the earlier
to occur of either ( i ) April 2, 1985 if the Certificates are
redeemed in full on said date or (ii ) July 1, 1985 provided,
however , that the Payee must give the Maker at least fifteen
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(15 ) days prior written notice of its election to so acce-
lerate the Maturity ❑ate to said date or (iii ) escrow is
broken for the proceeds of the sale of the Certificates and
the interest component of the Certificates commence to bear
interest at a variable interest rate.
3 . At the option of the holder hereof , the entire
principal balance hereof , together with all accrued but
unpaid interest thereon, shall be immediately due and
payable, without notice or demand, upon the occurrence of
any of the following events:
(a) Failure to pay when due any payment of prin-
cipal or interest due hereunder for ten days after receipt
of notice, or failure to perform or observe the terms and
conditions of the deed of trust or other agreement securing
this Note (the "Security Instruments" ) , beyond any appli-
cable grace period; or
(b) Default in the payment or performance of any
other term or condition hereof on the part .of the Maker, for
30 days after receipt of written notice; or
(c) The making of any assignment for the benefit
of creditors by the Maker, or the voluntary appointment - (at
the request of the Maker or with the consent of the Maker)
of a receiver, custodian, liquidator or trustee in
bankruptcy of the Maxer ' s property or the filing by the
Maker of a petition in bankruptcy or other similar pro-
ceeding under law for relief of debtors; or
(d) The filing against the Maker of a petition in
bankruptcy or other similar proceeding under law for relief
of debtors, or the involuntary appointment of a receiver,
custodian, liquidator or trustee in bankruptcy of the prop-
erty of the Maker and such petition or appointment is not
vacated or discharged within 60 calendar days after the
filing or making thereof .
4. Neither the Maker nor any of its officers, direc-
tors, or shareholders shall be deemed to have any personal
liability for the payments of any amounts that are due or
shall become due pursuant to this Note. The Payee shall not
exercise any rights or institute any action against the
Maker or any of its officers, directors, or shareholders for
the payment of any sum of money that is or may become
payable under this Note or any Security Instrument securing
the same other than the right to foreclose such Security
Instrument and the right to realize upon any collateral
given as security for the payment of this Note in addition
to the property given under such Security Instrument. The
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c
Payee shall not seek against the Maker or any of its offi-
cers, directors , or shareholders any judgment for a defi-
ciency in any action to foreclose such Security Instrument
or to realize upon such collateral, provided, however, that
nothing contained herein shall be or be deemed to be a
release or impairment of such indebtedness or of such
Security Instrument or of any security interest in any
collateral pledged to secure the indebtedness evidenced by
this Note, or preclude the Payee from foreclosing such
Security Instrument or realizing upon any such collateral
upon the happening of any event of default under this Note,
such Security Instrument or any other documents executed in
connection therewith.
5. If this Note is not paid when due, whether at
maturity or by acceleration, the Maker shall pay all costs
of collection, including without limitation reasonable
attorneys' fees and all expenses in connection with the
protection or realization of the collateral- securing this
Note incurred by the holder hereof on account of such
collection, whether or not suit is filed hereon. Such costs
and expenses shall include without limitation all costs,
attorneys ' • fees and expenses incurred by the holder hereof
in connection with any insolvency, bankruptcy, reorganiza-
tion, arrangement or other similar proceedings involving the
Maker, that in any way affects the exercise by the holder
hereof of its rights and remedies under this Note or under
any of the Security Instruments. Should interest not be
paid when due, it shall thereafter bear interest at the rate
for unpaid principal.
6 . Presentment, demand, protest, notices of protest,
dishonor and nonpayment of this Note and all notices of
every kind are hereby waived. To the extent permitted by
applicable law, the defense of the statute of limitation is
hereby waived.
7. No single or partial exercise of any power
hereunder or any Security Instrument shall preclude other or
further exercise thereof or the exercise of any other power.
The holder hereof shall at all times have the right to .
proceed against any portion of the security held herefor in
such order and in such manner as the holder may deem fit,
without waiving any rights with respect to any other
security. No delay or omission on the part of the holder
hereof in exercising any right hereunder shall operate as a
waiver of such right or of any other right under this Note.
The release of any party liable on this Note shall not
operate to release any other party liable hereon.
B. This Note is initially secured by a deed of trust
of even date herewith in favor of Ticor Title Insurance Com-
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c'
pany of California as Trustee for the benefit of the Payee,
which deed of trust contains provisions for the acceleration
of the Maturity Date hereof upon the happening of certain
stated events .
9. The loan evidenced by this Note is made pursuant
to and shall be construed and governed by the laws of the
State of California.
10 . It is the intent of the Maker and the Payee in the
execution of this Note and all other instruments securing
this Note to contract in strict compliance with the usury
laws of the State of California governing the loan evidenced
by this Note. In furtherance thereof, the Payee and the
Maker stipulate and agree that none of the terms and provi-
sions contained in this Note or in any other document or
instrument shall ever be construed to create a contract for
the use, forbearance or detention of money requiring payment
of interest at a rate in excess of the maximum interest rate
permitted to be charged by the laws of the State of
California governing the loan evidenced by, the Note. The
Maker shall never be liable for unearned interest on this
Note and s ll never be required to pay interest on this
Note at a I in excess of the maximum interest that may be
lawfully c ged under the laws of the State of California.
The provisions of this paragraph shall control over all
other provisions hereof and over any other instrument exe-
cuted in connection herewith that may be in apparent
conflict herewith. If any holder hereof shall collect
monies that are deemed to constitute interest that would
otherwise increase the effective interest rate on this Note
to a rate in excess of that permitted to be charged by the
laws of the State of California, all such sums deemed to
constitute interest in excess of the legal rate shall be
immediately returned to the Maker upon such determination.
SENCA Pal Spri s, Inc. ,
a Califo i corpo a ion
By
Robert H. S elton, President
( 1 )12/28/84PRO: bw 5AGR37 4.
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C9
6 >
.1
RESOLUTION NO. 15383
e
OF THE CITY COUNCIL OF THE CITY OF PALM
SPRINGS APPROVING AN AMENDMENT TO THE
DEVELOPMENT AGREEMENT BETWEEN THE CITY,
THE COMMUNITY REDEVELOPMENT AGENCY, SENCA,
AND HOTEL AND CONVENTION CENTERS PARTNERS
I - X1 , LTD. , ALL CALIFORNIA LIMITED
PARTNERS FOR THE PALM SPRINGS CONVENTION
CENTER AND HOTEL.
WHEREAS the City Council approved a Development Agreement for the
Palm Springs Convention Center and Hotel project between the City, the
Community Redevelopment Agency, SENCA, and Hotel and Convention Center
Partners I - XI , LTD. , All California limited partnerships; and
WHEREAS that Development Agreement required that SENCA Palm Springs Inc.
be responsible for payment of certain funds to acquire existing leasehold
interests on the property and to pay a certain annual lease payment; and
WHEREAS the need for making these payments has occured in advance of completion
of the full financing package for the project; and
WHEREAS the City Council believes that payment of these amounts is necessary
for the benefit of the project; and
WHEREAS SENCA Palm Springs Inc. has requested a loan to enable them to
pay these amounts according to the requirements of the Indian option.
NOW, THEREFORE, �E IT RESOLVED that the City Council of the. City of Palm
Springs hereby approves the attached amendment to the Development Agreement
which gives approval for a loan by the Community Redevelopment Agency to
SE14CA Palm Springs Inc. for payment of the first year' s lease payment and
to extinguish existing leasehold interests.
ADOPTED this p31 day of / Q(� � 1984
AYES: �1Cc L�yLi�,rn1r�.�_, 1i ► (Q� l .rtC�,�,
NOES: (LCr
ABSENT:
AE'5iAiki. � rL�►t('�k1YLCnx E`�.� /)1Q�L�fi2.�t��`1
ATTEST: 7J CITY OF PALM SPRINGS, CALIFORNIA
By, 6J
City Clerk ity Manager
REVIEWED & APPROVED:
Development Agr btwn SENCA,
Hdgrtrs Hotel ,P.S. Conv Cen
CRA & City, PA2B6-10
AGR #111 (CRA)AGR #2167(City
DEVELOPMENT AGREEMENT Res 277 & Res 15355, 12-5-8
PALM SPRINGS CONVENTION CENTER AND HOTEL,
This Agreement is entered into by and between the Community Redevelopment Agency
of the City of Palm Springs ("Agency"), Hotel and Convention Center Partners I, Ltd.,
a California limited partnership ("Developer"), the City of Palm Springs, a municipal
corporation ("City") and Shale Energy Corporation of America, a Texas corporation
("SENCA"). The parties hereto do hereby agree as follows:
1. SUBJECT OF AGREEMENT
(100) Purpose of the Agreement
The purpose of this Agreement is to effectuate the Redevelopment Plan for
the Palm Springs Tahquitz-Andreas District Redevelopment Project of the Agency
("Redevelopment Plan") by making provision for the acquisition of land and
the financing and construction of a convention center and Headquarters Hotel
("the Project") near the Palm Springs central business district.
The development of the Project pursuant to this Agreement is in the public
interest of the City and the Agency, will be of benefit to the Agency's
Redevelopment Project area, will promote the health, safety, and welfare of
the residents of the community, will eliminate blighted conditions within the
Redevelopment Project Area, and will be in accord with the public purposes
and provisions of applicable federal, state and local laws and requirements.
(101) The Redevelopment Plan
This Agreement is subject to the provisions of the Redevelopment Plan which
was approved and adopted on July 19, 1983, by the City Council of the City
of Palm Springs, by Ordinance No. 1187. The Redevelopment Plan as it now
exists, and as it may be subsequently amended, is incorporated herein by reference
and made a part hereof as though duly set forth herein.
Any amendments to the Redevelopment Plan which change the uses or
development permitted on the Site or otherwise change the restrictions or
controls which apply to the Site, shall require the written consent of the
Developer in Phase I and SENCA in Phase II as such phases are defined in Section
103. Amendments to the Redevelopment Plan applying to other property in
the Project Area shall not require the consent of the Developer or SENCA.
(102) The Project Area
The Project Area is all of the real property described as being included within
the Revelopment Plan referred to above.
(103) The Site
The "Site" of the Phase I portion of the development, including the Headquarters
Hotel and Convention Center consists of Blocks 107, 108, 109, 110, 112, 113
and 114 of Section 14, Township 4 South, Range 4 East-San Bernardino Base
and Meridian; the "Site" for the proposed cultural center consists of Blocks
7, 8 and III of Section 14, Township 4 South, Range 4 East-San Bernardino
Base and Meridian, and the "Site" for the Phase 11 portion of the development,
including it second hotel and overflow parking for the headquarters hotel and
Convention Center, consists of blocks 231, 219 and 220 of Section 14, Township
4 South, Range 4 East-San Bernardino Base and Meridian.
(104) Parties to the Agreement
A. The Agency
The Agency is a public body, corporate and politic, duly created,
established and authorized to transact business and exercise its powers,
all under and pursuant to the Community Redevelopment Law (Part
1 of Division 24, commencing with Section 33000) of the Health and
Safety Code of the State of California.
The principal office of the agency and City is 3200 East
Tahquitz-McCallum Way, Palm Springs, California 92262.
B. The Developer
The Developer is Hotel and Convention Center Partners I, Ltd., a
California limited partnership, the general partner of which is SENCA
Investors, Inc., a California corporation with offices at 650 South Cherry
Street - Suite 840, Denver, Colorado 80222.
The qualifications and identities of the developer are of particular
concern to the Agency. It is because of these qualifications and
identities that the Agency has entered into this Agreement with
Developer. No voluntary of involuntary successor in interest of
Developer shall acquire any rights or powers under this Agreement
except as expressly set forth herein. It is contemplated that developer
shall be one of eleven similar limited partnerships, each of which will
construct a portion of the Headquarters Hotel and will acquire a portion
of the Convention Center.
Prior to the issuance of a certificate or certificates of completion
for the Site by the Agency and the issuance by the City of a Certificate
of Occupancy as hereinafter provided, Developer shall not assign all
or any part of its interest in this Agreement, unless otherwise provided
herein, without the prior written approval of the Agency except for
the purpose of obtaining financing directly related to the construction
of the improvements contemplated herein, which may include pledging
its interest in this Agreement to secure such financing, if required.
No permitted assignment will release Developer from its obligations
hereunder without prior written approval by Agency.
C. The City
The City of Palm Springs is a municipal corporation created pursuant
to the general laws of the State of California.
Il. ACQUISITION OF THE SITE
(200) Site to be Acquired by SENCA
SENCA presently has available to it options to ground lease the Site from certain
allottees of the Agua Caliente Band of Cahuilla Indians. The Site consists of
approximately 19.7 acres, located at the northwest corner of the intersection
of Tahquitz-Mc Callum Way and Avenida Caballeros.
The aforementioned allottees gave an option dated February 28, 1984 (referred
to as the "Master Lease") to Shale Energy Corporation of America, a Texas
corporation (hereinafter "SENCA"). The option contains a form of lease which
SENCA Palm Springs, Inc., a California Corporation, and a wholly owned
subsidiary of SENCA, will execute as the assignee of SENCA. SENCA Palm
Springs, Inc. will then sublease to the City of Palm Springs that portion of the
Site relating to the Convention Center and to the Agency that portion of the
Site relating to the Headquarters Hotel. The City, with respect to its portion
of the Site, and the Agency with respect to its portion of the Site, will
sub--sublease to Developer and the other ten developers pursuant to separate
and independent sub-subleases, an interest in the Site.
It is understood that the Site is presently burdened by certain existing leases
between the allottees and other parties. Developer is obligated by the terms
of the option to cause those leasehold interests to be extinguished. The Agency
agrees to use its best efforts to acquire said interests by the exercise of its
powers of eminent domain if necessary.
If, by mutual agreement of the Developer and the Agency, eminent domain
proceedings are required, Developer agrees to advance to Agency, upon demand
by Agency, the cost of said acquisitions including court costs, attorney's fees,
and compensation required to be paid to property owners with respect to that
portion of the Site which will be part of the Headquarters Hotel. Agency will
assume the cost of acquisition with respect to the acquisition of leasehold
interests affecting that portion of the Site utilized by the Convention Center
and additional property to be acquired in fee simple.
III. DEVELOPMENT OF THE SITE
(300) Development of the Site by the Developer
A. Preliminary Recitals
City and Agency invited proposals from qualified developers for the
development of a Convention Center and Headquarters Hotel. City
and Agency have selected SENCA, an affiliate of the General Partner,
as the master developer of the Project after carefully reviewing all
proposals because of the quality of the proposal for development
submitted by SENCA, the quality of SENCA's development team
(described in Exhibit "A" attached hereto and herein after referred
to collectively as SENCA), the financial capabilities of SENCA and
SENCA's experience and qualifications for carrying out a project of
this scope. Upon selection of SENCA, Agency and SENCA entered
into a "Cooperation Agreement," a copy of which is attached to this
Agreement as Exhibit "B" and incorporated herein by this reference
and made a part hereof.
Subsequently, SENCA submitted an architectural concept for the
development of the Site, a copy of which is attached to this Agreement
as Exhibit "C" and incorporated herein by this reference and made
a part hereof.
Thereafter, SENCA, Agency and City agreed that the actual developer,
would be the Developer described in the first paragraph of this
Agreement. Such agreement is formalized by the provisions of this
Agreement.
It is the intent of the parties to this agreement that the financing
of the Convention Center and the Hotel will be provided through tax
exempt financings. The availability of this financing is a condition
precedent to commencing the construction of the project. If, for any
reason, said financing is not available, each party shall bear the costs
advanced by said party in connection with the efforts to obtain such
financing.
(301) Construction of Convention Center
It is the intent of the parties that the master developer, will produce plans,
specifications and working drawings in accordance with the approved concept,
for the Convention Center development subsequent to the execution of this
Agreement and the obtaining of financing for the Convention Center and Hotel;
such plans, specifications and working drawings shall be consistent with the
architectural concept and project description (Exhibits "C" and "D,,), and with
a document entitled Scope of Work (Exhibit E) for Palm Springs Convention
Center, incorporated herein by reference. Said plans, specifications and working
drawings shall be subject to review and approval by City and Agency, which
approval shall not be unreasonably withheld, provided said plans, specifications
and working drawings reasonably conform to the project description and
architectural concept. It is the intent of this Agreement to set forth as precisely
as possible at this time, the rights, duties and obligations of the parties so that
they may proceed to seek and finalize appropriate financing for the Project
and prepare and finalize appropriate plans and specifications for the Project.
(302) Construction of the Hotel
It shall be the responsibility of the developer to develop plans and specifications
for the balance of the Phase I Project, including the Hotel, subject to approval
by City and Agency of said plans and specifications which approval shall not
be unreasonably withheld. The Developer shall cause the project to be
constructed in accordance with plans and specifications and in accordance with
the "Schedule of Performance" attached to this Agreement as Exhibit "F" and
incorporated herein by this reference and made a part hereof.
(303) Construction of Center
The City will cause the Convention Center to be built pursuant to an agreement
between the City and SENCA. At its completion, City will sell separate interests
therein to each of the eleven developer limited partnerships; Developer agrees
to acquire its interest in said Center when completed, in accordance with the
financing documents ("Financing Documents"). Said documents consist of:
Installment Sale Agreement; Agency Agreement; Assignment Agreement; Trust
Agreement; Reimbursement Agreement between the City and Mitsubishi Bank,
Limited, NY Branch; Letter of Credit; Official Statements; Private Placement
Memorandum; Certificate of Participation Purchase Agreement and the
Agreement for the Construction and Sale of Improvements.
Developer and Agency and City agree that SENCA will be used by Developer
for the purpose of constructing the Hotel and by City for the purpose of
constructing the Convention Center.
(304) Cost of Project
Developer agrees to construct its portion of the Headquarters Hotel to be
operated by a hotel management company acceptable to the City. The cost
of the portion of the Hotel to be owned by Developer shall be the full
responsibility of the developer, and said cost shall only be limited by provisions
in the Financing Documents relating to the tax exempt financing for the Hotel,
which financing, the parties hereto hereby agree, is necessary for the construction
of the Project.
City and Agency are responsible for the cost of construction of the Convention
Center and the parties agree that said costs shall be financed by industrial
development bonds, certificates of participation or other tax exempt instruments.
The parties agree that the cost of construction of the Convention Center shall
not exceed the amount set forth in this agreement as the maximum cost for
construction of the Convention Center. The parties agree that the guarantee
by SENCA to construct the Convention Center at a cost not to exceed said
amount is essential to the obtaining by City and Agency of tax exempt financing
and letters of credit to secure said financing for the Project.
The parties hereto agree that the Project consists of two interdependent
facilities, the Headuarters Hotel and a Convention Center. These facilities
will share common walls and common mechanical facilities. The financing
of the Convention Center is entirely dependent upon the availability of similar
tax exempt financing for the Hotel. It will not be possible to finance one facility
and construct it without financing and constructing the other. The ability to
utilize tax exempt financing, as therefore necessarily contemplated for the
Hotel expires on December 31, 1984; and hence time is of the essence to conclude
financing if this project is ever to be constructed. The credit and the financial
commitments of the developer and a group of Letter of Credit issuing institutions
are essential elements in obtaining the financing for the Hotel and the Convention
Center and the existence of a Guaranteed Maximum Price Construction Contract
for each facility that is satisfactory to these institutions is integral to their
consent to issue such credit enhancement. The two facilities are planned to
be constructed at the same time and to open for business concurrently. The
economic viability of each is dependent upon the economic success of the other.
For instance, the financing for the Convention Center is secured in part by
the ability of the Agency to pledge real property tax increment, which will
be generated by the construction of the Hotel, to the repayment of the tax
exempt bonds necessary for the Convention Center. Kitchen facilities of the
Hotel are expressly made available to the Convention Center for events conducted
there, and parking facilities for the two facilities will be shared. It was for
the foregoing reasons, and others, that the Agency accepted the proposal for
the development of the combined facilities which it received from SENCA,
pursuant to which this Ageement was ultimately negotiated. An integral part
of the SENCA proposal was that SENCA as master developer, agreed to provide
the Letter of Credit Banks with a maximum price for the construction of the
Convention Center. The parties further acknowledge and agree that this
maximum price bid from SENCA for the construction of Convention Center
was an essential element in the ability of the Agency to secure Letter of Credit
Commitments and consequently be able to sell bonds for the construction of
the Convention Center. Consequently, the parties acknowledge and agree that
neither the Convention Center portion nor the Headquarters Hotel portion of
the Project could proceed without all of the commitments and undertakings
set forth in this Agreement, including the agreement that SENCA will cause
to be constructed the Convention Center facility. If deemed necessary by Bond
Counsel, Agency agrees to seek judicial validation of this Agreement with respect
to its ability to enter into a maximum price construction contract without
competitive bidding of the contrm-t itself.
0 0
SENCA hereby covenants and agrees that it will cause to be constructed the
Convention Center as described above and in accordance with the Scope of
Work document (Exhibit E) incorporated herein by reference for a maximum
price of $18,805,000, which shall consist of the total construction cost, including
contractor's fee and contingencies; architectural and engineering fees; furniture;
fixtures and equipment; landscaping and sitework; real estate taxes; insurance;
the master developer's fee; other professional fees; miscellaneous costs; and
contingencies.
Agency and City shall have the right to review and approve all subcontracts
entered into by SENCA to determine if the subcontractor is capable of performing
the work, if the subcontracts meet legal requirements for public works contracts
and subcontracts and to determine if bid prices are commensurate with prevailing
market rates for the services being bid. Such approval may not be unreasonbly
withheld. The contract with SENCA and the subcontracts shall all comply with
applicable requirements of the Government Code, the Health and Safety Code
and the Public Contracts Code of the State of California applicable to public
works constructed by City or Agency.
The contract for construction of the Convention Center shall provide that the
general contractor's fee will be calculated at the time of financing at 3.5%
of projected hard costs, not including the "contingency" line item. Should the
construction ultimately be completed for less than the contract amount, including
contingency, any realized savings shall be spent according to a predetermined
formula between the city and the contractor as an incentive to the contractor
to minimize ultimate construction costs. It is understood, however, that the
contractor shall not realize a savings by his failure to meet the plans and
specifications approved by the City for the Convention Center.
SENCA, City and Agency may increase or decrease the scope of work and increase
or decrease the maximum price referred to herein by mutual agreement. City
or Agency may require SENCA to cause additional facilities to be constructed
in excess of the scope of work for which SENCA may make additional charges,
as in the case of change orders, reflecting the cost of such additional work
and a reasonable profit thereon.
(305) Financing of Project
The obtaining of adequate financing for both the Convention Center and Hotel
portions of the Project by way of tax exempt financing is a condition precedent
to the construction of the entire Project, and such financing must be closed
concurrently for the Hotel and the Convention Center on or before December
31, 1984. Construction of either facility shall begin only when proof of financing
exists for the cost of construction of both facilities. Commitments for financing
the Hotel shall be in such form and content as is acceptable to the City and
Agency as reasonably evidencing firm and enforceable commitments for such
financing. Commitments for financing the construction of the Convention Center
shall similarly be in such for and content as is acceptable to developer as
reasonably evidencing firm and enforceable commitments for such financing.
The debt service on certificates of participation or other tax exempt instruments
sold by the City or Agency to finance the cost of construction of the Convention
Center shall be paid for by City and Agency. To that end, City will annually
appropriate out of available funds of the City specified in this paragraph, and
additional funds pledged by Agency, as more particularly described below, ari
amount sufficient to meet the annual debt service on said obligations. In no
event, however, shall City be required to pay toward debt service in any year,
an amount in excess of the amount received by City from sales tax generated
from businesses conducted on the Site; the transient occupancy tax receipts
from hotel rooms constructed on the Site; the two percent transient occupancy
tax increase assessed commencing September 1, 1984 upon all hotels in the
City of Palm Springs and the Tax Increment Revenue derived by the Agency
from the project and pledged by the Agency to the City in connection with
the Project. To the extent that those combined sources of revenue do not,
for any reason, produce sufficient revenue in any year to meet the annual debt
service for that year, the City shall be obligated only to appropriate toward
the debt service an amount equal to the total revenues received from those
sources.
The "Tax Increment Revenue" pledged by the Agency to the City shall be that
amount of tax increment revenue received by Agency annually from the property
taxes derived from the Hotel-Convention Center Project, but not more than
the amount necessary to meet the annual debt service on the Convention Center.
Details of the financing plan, to which the parties hereto agree to be bound,
including sources of revenue, financial commitments of the parties hereto,
equity participation by the parties, default and enforcement provisions, and
provision for operating shortfalls of the Project are all set forth in the Official
Statement for the Tax Exempt Issues, the Private Placement Memorandum
for the equity interests, and the Financing Documents referred to therein, which,
by this reference, are made a part of this Agreement.
(306) Insurance Provisions
Developer agrees for the entire period of this agreement, to indemnify, defend
and save City and its agents and employees harmless from any and all liability,
claims, damages or injuries to any person, including injury to Developer's
employees and all claims which arise from or are connected with the negligent
performance of. or failure to perform the work or other obligations of this
Agreement, or are caused or claimed to be caused by the negligent acts of the
Developer, his agents or employees, and all expenses of investigating the
defending against same.
Liability Insurance - During the entire term of this Agreement, Developer agrees
at his sole expense to procure and maintain public liability insurance to protect
against loss from liability imposed by law for damages on account of bodily
injury, including death therefrom, suffered or alleged to be suffered by any
person or persons whomsoever, resulting directly or indirectly from any act
or activities of the Developer, his agents, servants, suppliers, guests, or business
visitors, or any person acting for the developer or under his control or direction,
and also to protect against loss from liability imposed by law for damages to
any property of any person caused directly or indirectly by or from acts or
activities of Developer, or his agent, servants, suppliers, guests, or business
visitors, or any person acting for the Developer, or• under his direction or control.
Minimum limits of five-million dollars ($5,000,000), combined single limit for
bodily injury and property damage shall be maintained in full force and in effect
throughout the term of this Agreement and any extension thereof.
All of such insurance shall be primary insurance and shall name the City of
Palm Springs and the Community Redevelopment Agency of the City of Palm
Springs as additional insured.
Developer agees that provisions of this paragraph, as to maintenance of insurance,
shall not be construed as limiting in any way the extent to which the Developer
may be held responsible for the payment of damages to persons or property
resulting from the Developer's activities, the activities of his agents, servants,
suppliers, guests, or business visitors, or the activities of any person or persons
for which the Developer is otherwise responsible.
Developer agrees to maintain or cause to be maintained the following insurance
against risk of physical damage to Project structures and other risks for the
protection of the City and the Agency:
Fire, Lightning. and Extended Coverage, Vandalism and Malicious Mischief
- Extended coverage shall include loss or damage by explosion, windstorm, riot,
aircraft, vehicle damage, smoke and other hazards thus normally covered.
Coverage shall be equal to the full insurable value of the Projects as such value
is determined by independent appraisal not less than every 36 months. Such
insurance may be carried in conjunction with any other fire and extended coverage
insurance carried or required to be carried by the Letter of Credit Institutions
or Certificate Holders.
Earthquake - Coverage in an amount equal to 100% of the full replacement
value subject to a ten percent (10%) deductible against loss or damage to the
Project resulting from an earthquake.
Worker's Compensation Insurance - Such amounts as may be required under
the Worker's Compensation Insurance and Safety Act or such other California
law to cover all persons employed in connection with the Project.
Business Interruption Insurance - Payable to the City and the Agency in an amount
equal to the anticipated annual debt service and operating shortfall on the
Convention Center. Such coverage amounts shall be reviewed and adjusted
annually.
Builder's Risk Insurance - Developer shall purchase and maintain property
insurance upon the entire work at the site to the full insurable value thereof
during the period of construction. This insurance shall include the interests
of the Developer, the City, the Agency, the Contractor, subcontractors, and
sub subcontractors, in the work and shall insure against the perils of Dire,
Extended Coverage, Vandalism and Malicious Mischief.
Evidence of Insurance - A Certificate of Insurance or an appropriate insurance
binder, evidencing the above insurance coverage with a company acceptable
to the City and the Agency, shall be submitted to the City and the Agency upon
execution of this Agreement and completion of project financing.
Notice to City, Insurance Coverage Change - The terms of the insurance policy
or policies issued to provide the above insurance coverage shall provide that
said insurance may not b(� arrrende(I or canccllc d by the carrier, for, non-payment
of prerniurns or otherwise, without thirty (30) days' prior written notice of any
such amendment or cancellation. In such event, the developer shall, prior to
the cancellation date, subunit to the City Clerk and Agency Secretary new
evidence of insurance in the amounts heretofore established.
The Developer -- An Independent Contractor - It is understood and agreed that
the Developer is, and at all times shall be, an independent contractor, and that
SENCA is, and at all times shall be, an independent contractor and nothing
contained herein shall be construed as making the Developer or SENCA, or
any individual whose compensation for services is paid by the Developer or
SENCA, an agent or employee of the City or the Agency; additionally, nothing
contained herein shall be construed as authorizing the Developer or SENCA
to create or assume any obligation or liability for or on behalf of the City or
the Agency. The Developer and SENCA shall provide at the outset of construction
a "Notice of Nonresponsibility" which indicates that the City or the Agency
cannot be Field responsible for obligations or liabilities incurred by the Developer
or SENCA.
Limitation - Notwithstanding anything to the contrary contained in this
Agreement, the Developer's obligation to procure insurance hereunder shall
be limited to such coverage as can be obtained at reasonable rates. In the event
of a dispute hereunder, the matter shall be submitted to arbitration.
(307) Performance Bond
Agency and City agree to require SENCA to provide a Performance Bond to
guarantee completion of the Convention Center and a Labor and Material Bond
with respect to said Project, all in an amount equal to the estimated cost of
construction of the facility, naming City, Agency, and Developer as additional
insureds, and Agency will provide Developer with duplicate originals or
appropriate certificates evidencing such Bond. Said Bond may be provided by
SENCA by obtaining same from the General Contractor responsible for
construction of the improvements.
The Developer shall furnish or cause to be furnished to the Agency duplicate
originals or appropriate certificates evidencing a Performance Bond from
Developer or from the general contractor employed by Developer, for the
construction of the Hotel in an amount equal to the estimated cost of construction
of said facility, and evidencing a Labor and Material Bond in a similar amount,
guaranteeing construction of the Hotel and naming the City and Agency as
additionally insured. It is the intent of this provision that City and Agency
shall receive evidence of a single Performance Bond and Labor and Material
Bond with respect to the construction of the entire Hotel which will be provided
to it from all of the eleven developers collectively.
(308) City and Governmental Agency Permits
Before commencement of construction or development of any building, structures,
or other work or improvement upon the Site, the Developer shall at its own
expense secure or cause to be secured any and all permits which may be required
by the City or any other governmental agency affected by such construction,
development or work. The Agency shall provide all proper assistance to the
Developer in securing these permits.
(309) Rights of Access
Representatives of the Agency and the City shall have the reasonable right
of access to the Site without charges or fees, at normal construction hours
during the period of construction for purposes of this Agreement, including
but not limited to the inspection of' the work being performed in construction
of the improvements. Such representatives of the Agency or the City shall
he those who are so identified in wr•itimg by the Execidive Director of the Agency
or the City Man r1;'er•.
(310) local State and Federal Laws
The Developer shall carry out the construction of its improvements in conformity
with all applicable laws, including all applicable federal and state labor standards.
(311) Antidiscrimination During Construction
The Developer for itself and its successors and assigns, agrees that in the
construction of its improvements provided for in this Agreement, the Developer
will not discriminate against any employee or applicant for employment because
of race, color, religion, sex or national origin.
(312) Certificate of Completion and Certificate of Occupancy
Promptly after completion of all construction and development to be
accomplished by the Developer upon the Site, or any portion thereof, the Agency
shall furnish the Developer with a Certificate of Completion upon written request
by the Developer, and the City shall furnish the Developer with a Certificate
of Occupancy. Agency and City shall not unreasonably withhold any such
Certificates. A Certificate of Completion shall be, and shall so state, conclusive
determination of satisfactory completion required by this Agreement upon the
Site, and full compliance with the terms hereof with respect to the Site. Such
certificates may also be obtained by Developer for portions of the improvements
upon the Site as they are properly completed and ready for use, if Developer
is not in default under this Agreement. After issuance of such Certificates,
any party then owning or thereafter purchasing, leasing or otherwise acquiring
any interest therein shall not (because of such ownership, purchase, lease or
acquisition), incur any obligation or liability under this Agreement, except that
such party shall be bound by any covenants contained in the deed, lease, mortgage,
deed of trust, contract or other instrument of transfer in accordance with the
provisions of Sections 401 and 402 of this Agreement. Neither the Agency nor
any other person, after issuance of such certificates, shall have any rights,
remedies or controls that it would otherwise have or be entitled to exercise
under this Agreement as a result of a default in or breach of any provision of
this Agreement.
A Certificate of Completion of construction for the entire improvement and
development of the Site shall be in such form as to permit it to be recorded
in the Recorder's Office of Riverside County. Certificates of completion of
construction for less than the complete improvement and development of the
Site shall not be recorded.
If such Certificates of Completion and/or occupancy are not furnished with
respect to any portion of the Project after written request from the developer,
the appropriate public agency shall, within ten (10) days of the written request,
provide the Developer with a written statement of the reasons for refusal or
failure to furnish such Certificate or Certificates. The statement shall also
contain a statement of the action which developer must take to obtain the
Certificate. If refusal by the Agency is confined to the immediate availability
Of specific items of materials for landscaping or fine arts, the Agency will issue
its Certificate upon the posting of a bond by the Developer with the Agency
in the amount representing a fair value of the work not yet completed. If the
Agency shall have failed to provide such written statement within said 10-day
period, the Developer shall be deemed entitled to the Certificate of Completion_
Such Certificates shall not constitute evidence of compliance with or satisfaction
of any obligation of the developer to any holder of a mortgage, or any insurer
of a mortgage securing money loaned to finance the improvements, or any part
thereof. Such Certificates shall not constitute notice of completion as referred
to in the California Civil Code, Section 3093.
1V. USE OF THE SITE
(400) Uses
The Developer covenants and agrees for itself, its successors, its assigns and
every successor in interest that during construction and thereafter, such
successors and such assignees shall devote the Site to the uses specified in the
Redevelopment Plan, the ground lease and all relevant subleases, and this
Agreement.
(401) Obligation to Refrain from Discrimination
There shall be no discrimination or segregation of any person, or group of persons,
on account of sex, race, color, creed, religion, marital status, national origin
or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Site, nor shall the developer himself or any person claiming
under or through him, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number,
use or occupancy of tenants, lessees, subtenants, sublessees, or vendees of the
Site.
(402) Form of Nondiscrimination and Nonse re ation Clauses
The Developer shall refrain from restricting the rental, sale or lease of the
Site on the basis of sex, race, color, creed, ancestry or national origin of any
person. All such deeds, leases, or contracts shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
1. In deeds: "The grantee herein covenants by and for himself, his heirs,
executors, administrators and assigns, and all persons claiming under
or through them, that there shall be no discrimination against, or
segregation of, any person or group of persons on account of sex, race,
color, creed, religion, marital status, national origin or ancestry in
the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment
of the land herein conveyed, nor shall the grantee himself or any person
claiming under or through him, establish or permit any such practice
or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy of tenants, lessees,
subtenants, sublessees or vendees in the land herein conveyed. The
foregoing covenants shall run with the land."
2. In leases: "The lessee herein covenants by and for himself, his heirs,
executors, administrators and assigns, and all persons claiming under
or through him, and this lease is made and accepted upon and subject
to the following conditions:
"That there shall be no discrimination against, or segregation of, any
person or group of persons on account of sex, race, color, creed, religion,
marital status, national origin or ancestry, in the leasing, subleasing,
transferring, use or enjoyment of the land herein leased nor shall the
lessee
himself, or any person claiming under or through him, establish or
permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy,
of tenants, lessees, sublessees, subtenants, or vendees in the land herein
leased."
3. In contracts: "There shall be no discrimination against or segregation
of, any person or group of persons on account of sex, race, color, creed,
religion, marital status, national origin or ancestry, in the sale, lease,
sublease, transfer, use, occupancy, tenure or enjoyment of the land,
nor shall the transferee himself or any person claiming under or through
him establish or permit any such practice or practices of discrimination
or segregation with reference to the selection, location, number, use
or occupancy of tenants, lessees, sublessees, subtenants, or vendees
of the land."
(403) Effect and Duration of Covenants
Except as otherwise provided, the covenants contained in this Agreement and
the deeds shall remain in effect during the life of the Ground Lease referred
to above. The covenants against discrimination, however, shall remain in effect
in perpetuity.
V. DEFAULTS, REMEDIES AND TERMINATION
(500) Defaults - General
Subject to the extensions of time set forth in Section 603, failure or delay by
either party to perform any term or provision of this Agreement constitutes
a default under this Agreement. The party who so fails or delays must
immediately commence to cure, correct, or remedy such failure or delay, and
shall complete such cure, correction or remedy with reasonable diligence and
during any period of curing shall not be in default.
The injured party shall give written notice of default to the party in default,
specifying the default complained of by the injured party. Except as required
to protect against further damages, and except as otherwise expressly provided
in Sections 505 and 506 of this Agreement, the injured party may not institute
proceedings against the party in default until 30 days after giving such notice.
Failure or delay in giving such notice shall not constitute a waiver of any default,
nor shall it change the time of default.
Except as otherwise expressly provided in this Agreement, any failure or delay
by either party in asserting any of its rights or remedies as to any default shall
not operate as a waiver of any default or of any such rights or remedies or deprive
either such party of its right to institute and maintain any actions or proceedings
which it may deem necessary to protect, assert or enforce any such rights or•
remedies.
(501) Institution of Legal Actions
In addition to any other rights or remedies, either party may institute legal
action to cure, correct or remedy any default, to recover damages for any default,
or to obtain any other remedy consistent with the purpose of this Agreement.
Such legal actions must be instituted in the Superior Court of the County of
Riverside, State of California, in an appropriate Municipal Court in that County,
or in the appropriate Federal District Court servicing Riverside County.
(502) Apg cable Law
The laws of the State of California shall govern the interpretation and
enforcement of this Agreement.
(503) Acceptance of Service of Process
In the event that any legal action is commenced by the Developer against the
City or the Agency, service of process upon the Agency shall be made by personal
service upon the Chairman or Secretary of the Agency and service of process
upon the City shall be made by personal service upon the City Clerk, or in such
other manner as may be provided by law.
In the event that any legal action is commenced by the City or the Agency
against the Developer, service of process on the Developer shall be made by
personal service upon the General Partner of the Developer or the designated
agent for service of process, or in such other manner as may be provided by
law, whether made within or without the State of California.
(504) Rights and Remedies are Cumulative
Except as otherwise expressly stated in this Agreement, the rights and remedies
of the parties are cumulative, and the exercise by either party of one or more
of such rights or remedies shall not preclude the exercise by it, at the same
time or different times, of any other rights or remedies for the same default
or any other default by the other party.
(505) Damages
If either the Developer or the City or Agency defaults with regard to any of
the provisions of this Agreement, the nondefaulting party or parties shall serve
written notice of such default upon the defaulting party. If the default is not
cured or commenced to be cured by the defaulting party within thirty (30) days
after service of the notice of default, or if, after commencing to cure the default,
the defaulting party fails to prosecute the work diligently, the defaulting party
shall be liable to the other party for any damages caused by such default.
(506) Specific Performance
If either the Developer or the city or Agency defaults under any of the provisions
of this Agreement, the nondefaulting party shall serve written notice of such
default upon the defaulting party. If the default is not commenced to be cured
by the defaulting party within thirty (30) days of service of the notice of default,
or if, after commencing to cure the default, the defaulting party fails to
prosecute the work diligently, the nondefaulting party at its option may institute
an action for specific performance of the terms of this Agreement.
(507) Other Events of Default
It is contemplated that the parties hereto will enter into other agreements
relative to the financing of the project and the management of the convention
Center. Any provisions or remedies relative to default under• such agr•eernents
Shall be froverned by the terms and condition, of those specific agreements,
;Ind any remedies provided thr rein .Tit►11 b(, it, ,rdciition to right~ and remedies
Vl. GENFRAI, PROVISIONS
(600) Notices Demands, and Communications Between the Parties
Formal notices, demands, and communications between the City and Agency
and the developer shall be sufficiently given if dispatched by registered or
certified mail, postage prepaid, return receipt requested, to the principal offices
of the City and Agency and the Developer, and one additional representative
of the Developer to be designated by the Developer in writing. Such written
notices, demands and communications may be sent in the same manner to such
other addresses as either party may from time-to-time designate by mail as
provided in this Section.
(601) Conflict of Interest
The Developer warrants that it has not paid nor given, and will not pay nor
give, any third person any money or other consideration for obtaining this
Agreement.
(602) Nonliability of Agency Officials and Em tlees
No member, official or employee of the City or agency shall be personally liable
to the Developer, or any successor in interest, in the event of any default or
breach by the City or Agency or for any amount which may become due to the
developer or successor or on any obligations under the terms of this Agreement.
(603) Enforced Dela : Extension of Times of Performance
In addition to specific provisions of this Agreement, performance by either
party hereunder shall not be deemed to be in default where delays or defaults
are due to war; insurrection; strikes; lock-outs; riots; floods; earthquakes; fires;
casualties; acts of God; acts of the public enemy; epidemics; quarantine
restrictions; freight embargoes; lack of transportation; governmental restrictions
or priority; litigation; unusually severe weather; inability to secure necessary
labor, materials or tools; delays of subcontractor or supplier; acts of the other
party; acts or failure to act of any public or governmental agency or entity
(except that act of the Agency or the City, or failure of the Agency or the
City to act, shall not excuse performance by the Agency or the City) or any
other causes beyond the control or without the fault of the party claiming an
extension of time to perform. An extension of time for any such cause shall
only be for the period of the enforced delay, which period shall commence to
run from the time of the commencement of the cause. If, however, notice
by the party claiming such extension is sent to the other party more than 30
days after the commencement of the cause, the period shall commence to run
only thirty (30) days prior to the giving of such notice. Times of performance
under this Agreement may also be extended by mutual agreement in writing
by the City and the Developer or Agency and the Developer.
(604) AMPOWILLL the Agency
Whenever this Agreement requires the City or Agency to approve any contract,
document, plan, specification, drawing or other matter, such approval shall
not be unreasonably withheld.
.. qR
VII. OPERATION OF FACILITIES
(700) The parties contemplate that the Convention Center is being developed
for the primary purpose of attracting conferences and conventions to the City
which will maximize economic benefit. This primary purpose should be reflected
in the booking and pricing policies established for the Convention Center. These
established policies shall be frequently reviewed for the purpose of maintaining
the Convention Center's competitive position with respect to similar or
comparable facilities.
(701) It is agreed that the Convention Center shall be operated and maintained
as a "first class" facility. It is further agreed that all landscaped areas associated
with the Convention Center shall be maintained in a "first class" manner. The
operator of the facility shall assure this quality of operation and maintenance,
and City shall take all reasonable steps to enforce any such provision. For the
purpose of this document, "first class" shall mean that the original improvements
shall be of a high quality as measured by industry standards at the time of
construction, and shall be maintained in a physical state of repair which will
preserve the high quality of the original improvements.
(702) Developer agrees that the Headquarters Hotel shall be operated and
maintained as a "first class" facility. Lodging accommodations in the
Headquarters Hotel will be available on a twenty--four hour per day basis, twelve
months per year. Developer further agrees to maintain at all times, all
landscaped areas associated with the Hotel in a "first class" manner in accordance
with the property maintenance standards required by the ordinances of the
City of Palm Springs, and in accordance with industry standards for a first class
facility.
(703) It is expressly understood that the Headquarters Hotel shall receive
no exclusive rights to, nor preference in the use of, the Convention Center
facilities. As provided in the Second Installment Sales Agreement, all rules
and regulations governing the use and operation of the Convention Center shall
be subject to approval or veto by the City Council or its authorized
representatives, and the selection of the operator of the Convention Center,
or any change in such operator, shall be subject to the approval or veto of the
City Council or its authorized representatives. The City Council shall also
have the right to review the Operating Budget of the Convention Center, and
such Budget shall be subject to the approval or veto of the City Council or its
authorized representatives. All such approvals shall not be unreasonably withheld.
If the City Council or its authorized representatives fail to approve the budget
by the commencement of the City's fiscal year, then the preceding year's budget
shall remain in effect until the parties can agree upon an appropriate adjustment
to the budget. The City may audit the books of the operator of the Convention
Center at reasonable times upon reasonable notice relative to establishment
of the operational subsidy.
(704) In connection with the operation of the Convention Center, the
Convention Center operators shall have the right to enter into contracts for
serving food or beverages within the Convention Center. Such contracts will
be arrived at based upon an open competitive bidding system which allows any
qualified hotel or licensed catering service the right to bid for the contract.
The Convention Center operator will, for and through such bidding process,
establish minimum qualifications for catering services in the Convention Center,
and will also establish policies for the service of alcoholic beverages in the
Convention Center. Such policy shall apply uniformly to all hotels or catering
services operating in the Convention Center. The City shall have the right
to approve or reject any such policies and contracts for cause, but may not
unreasonably withhold any such approval or unreasonably exercise any such
right of rejection. This right is reserved to the City since it is contemplated
that the City, pursuant to the financing documents, will provide a portion of
said financing by way of a Purchase Money Mortgage and because the City is
obligated to meet certain operational deficits of the Convention Center operation.
(705) Developer agrees not to discriminate against the City, other hotels
and/or local groups in making available for scheduling the Headquarters Motel
banquet facilities, catering facilities and staff to service banquets for groups
or conventions which are booked into the Convention Center by the City or
the manager of the Convention Center facility, other hotels and/or local groups
planning such functions. It is understood that meal functions which occur in
the Headquarters Hotel shall be serviced by the Headquarters Hotel staff and
governed by the normal scheduling and pricing policies of the Headquarters
Hotel operator.
(706) The City or the manager of the Convention Center facility shall have
the right to levy a reasonable surcharge on gross sales, excluding taxes, of food
and beverages served in the Convention Center to groups using the Convention
Center. Such surcharge shall be levied uniformly and paid by the hotel or caterer
providing such food or beverage service to users of the Center.
(707) The City agrees to participate in on-going annual promotion and
marketing programs for the Convention Center. The City agrees that the annual
budget for such programs shall be commensurate with industry standards for
promotional activities of similar facilities.
(708) Developer agrees to provide an on-going promotion and marketing
program for the Headquarters Hotel which is commensurate with on-going
marketing of other similar facilities and consistent with its position as the
Headquarters Hotel for the Convention Center.
(709) The City or the manager of the Convention Center facility shall grant
to the Headquarters Hotel easements through the Convention Center• for the
purpose of providing reasonable access to the Hotel and required exits, including
emergency exits, from the Hotel as may be required by the City Building and
Fire Safety Codes. Such access shall be reasonable to make the plan for operation
of the two facilities workable; provided, however, that such access shall not
preclude securing the Convention Center or access to the Hotel from the
Convention Center when the Convention Center is not in use.
(710) Developer shall grant to the City or the manager of the Convention
Center facilities, easements through the public areas of the Hotel to assure
reasonable access and exits for the Convention Center• users whether or not
those users were booked by or through the Headquarters Hotel. Exits to be
provided via these easements shall include emergency exits as required by City
Building and Fire Safety Codes. Such access shall be reasonable and sufficient
to make the plan for operation of the Convention Center and Headquarters
Hotel workable; provided, however, that it is understood that access to the
llotel may be limited at certain times of the day as may be necessary to assure
the Security of hotel guests.
(711) Should the Headquarters Hotel incur any deficits, regardless of the
cause of such deficits, the deficits shall be the sole responsibility of Developer
or the owners of the Hotel.
(712) The City and the Developer agree that the Convention Center and
the Headquarters Hotel shall share parking, open space, prefunction areas and
the secondary-service access located at their common wall, in their
"back--of-house," and along the western edge of the Site. Such sharing of
facilities shall be without charge to either party, and where necessary, in
accordance with mutually agreed upon scheduling policies. The sharing of parking
shall not absolve each facility from meeting the parking requirements established
for it by the City at the time of final plan approval.
If necessary, to satisfy the Headquarters Hotel parking requirement as established
by the Planned Development District approved by the City, the City will agree
to lease to the Hotel its parking spaces which are in excess of the parking
requirement for Phase I of the Convention Center. Payment under this lease
shall be at an annual rate not less than 8.5% of the value of the said spaces.
This leasing arrangement shall continue until such spaces are needed for Phase
II of the Convention Center, at which time, SENCA agrees to provide the
deficient hotel parking spaces within 300 feet of the first Phase hotel property
line.
(713) In accordance with the concepts guiding the Planned Development,
Developer agrees to share certain facilities with the second phase hotel and
expanded Convention Center, when developed. When the second phase hotel
and expanded Convention Center are developed, both parties acknowledge their
understanding that the City will require the operators of the second phase
facilities to agree to share certain facilities with the first phase facilities.
Such planned facilities shall include shared use of tennis courts, parking and
open space. Such sharing shall not, however, result in an effective dilution
of the economic base of either hotel, and each facility must independently meet
the parking and open space requirements established by the City's Ordinances
or conditions for approval of the project.
(714) The City agrees to impose and maintain in full force a Special Use
Condition on the privately owned public championship golf course located
approximately one mile to the southeast of the Convention center. Such Special
Use Condition shall provide the Headquarters Hotel with the right to book
tournaments and make advance reservations for hotel guests as much as two
or more years in advance of the proposed playing time. This Special Use
Condition shall be an attachment to, and made a part of, this agreement between
Developer and the City. (Exhibit G)
(715) Should construction of the Cultural Center proceed, parking provided
for the Cultural Center shall be made available for shared use by the Convention
Center and the leadquarters Hotel. In accordance with the BIA's conditional
approval of the lease, however, this sharing shall be non-reciprocal in any way.
0 0
(71.6) The City agrees to explore the possibilities for the construction of
a cogeneration plant which will provide power for sale to the Convention Center
and the Headquarters Hotel. A response on the feasibility of such a power plant
shall be provided six months after both financing and operating agreements
for the Convention Center are in place. Should the City initiate an engineering
feasibility study, Developer agrees to work cooperatively with the engineer
engaged to complete that study to assure that the cogeneration plant can be
integrated into the design of the Convention Center/Headquarters Hotel Project.
(717) The City reserves the right to establish a surcharge fee for
communications services in the Convention Center which is commensurate
with industry standards for such services and is based upon a percentage of
gross sales for provision of special communications services for groups using
the Convention Center. Such surcharge will be placed only on those special
communications services which depend upon a fixed capital investment having
been made beyond that which is customary and planned in the approved project
Overview Document. The City agrees to grant Developer, or an affiliate thereof,
the right of first refusal to provide such equipment and services as part of a
separate agreement between the parties.
(718) The City agrees to continue to advance the funds which may be required
in advance of the project's bond financing in order to complete necessary portions
of the marketing studies, architectural work, survey, and appraisals related
to the Convention Center. It is understood, however, that all such funds advanced
by the City shall be reimbursed through the proceeds of the bonds upon
successfully securing financing for the project.
(719) Developer agrees to commence development of the Phase 11 Hotel
no later than the date that the initial Headquarters Hotel reaches an occupancy
rate of 70% for a period of two consecutive years, or when the Headquarters
Hotel reaches an occupancy rate of 72% for one year, whichever is sooner. The
second phase of the Convention Center will be developed by SENCA Palm Springs,
Inc. or its successor, concurrently with the Phase II Hotel. Construction of
these facilities will commence within eighteen (18) months of these starting
dates, provided City, at its sole discretion, determines to pay the debt services
required for Phase II of the Convention Center. Developer agrees to permit
easements and access to the City for development of Phase II of the Convention
Center.
(720) The City agrees in conjunction with any sale of the Convention Center
to the developer to require the Developer to execute an agreement for operation
of the facility with an entity or individual acceptable to the City and having
the demonstrated capability for operation of such a facility.
(721) Concurrently with its sale of the facility to the developer, the City
agrees to contract with the developer in its capacity as an owner of the
Convention Center, to provide the City with certain exclusive and/or preferential
rights as to the facility's use, including, although not necessarily limited to,
the City's right of first refus81 for bookings eighteen (18) or more months in
advance of its use. Also, in return for Developer's payment of a Net Operating
Income Guarantee Fee to the City as prescribed in the Financing Documents,
the City agrees to annually pay the developer 8 contrrlctual amount equal to
the arnount of the facility's total annual operating deficit, if any. This subsidy
to the developer shall be the City's sole responsibility so long as such agreements
shall remain in force and shall not be violated by an action or failure to take
action by the Developer as therein required.
(722) The City has commissioned studies from the firms of Laventhol &
Horwath (completed 8/81), Touche-Ross & Company (completed 12/7/82) and
Williams-Kuebelbeck & Associates (completed 11/81) to establish the feasibility
of a Convention/Cultural Facility. Based upon these studies, the City issued
a Request for Proposals (RFP) seeking a Master Developer for the Convention
Center Project. Following a competitive selection process, this RFP resulted
in the City contracting with SENCA as described in Exhibit "B" to obtain the
services of the SENCA development team.
The City and Developer now reaffirm their respective commitments to the activities
and responsibilities outlined in the following documents:
Minute Order 3308, dated 11/2/83, approving a Cooperation Agreement with
SENCA, et.al. as Master Developer for the Convention Center District.
Resolution 1,4971, dated 3/7/84, approving a revised project site and Letter
of Understanding for the Palm Springs Convention/Cultural Center.
Resolution 15037, dated 5/2/84, approving the Convention Center District's
proposed first phase concept.
Resolution 15095, dated 6/6/84, approving a revised timetable.
Resolution 15096, dated 6/15/84, approving an Inducement Resolution for
$100,000,000 in project-related bond indebtedness.
Resolution 224, dated 6/19/84 (Community Redevelopment Agency), approving
a similar Inducement Resolution.
Resolution 15251, dated 6/27/84, approving a Project Overview Document and
authorizing the transmittal of the document to financial underwriters and other
interested par-ties.
(723) Developer agrees to execute an agreement for operation of the Headquarters
Hotel with an organization having the demonstrated capability for operation of such
a facility. SENCA has, with the City's approval, designated Doubletree Palm Springs,
Inc., a wholly owned subsidiary of Doubletree, Inc. ("Doubletree") as the initial operator
of the Headquarters Hotel. All possible successors to Doubletree shall have a comparable
level of experience and the documented financial capacity to assume the role of operator
of the Hotel. The City shall have the continuing right of approval of any change in
the Headquarters Hotel operator. Such approval shall be based upon comparability
to the original operator and such approval shall not be unreasonably withheld. Developer
further• agrees that any agreement for operation of the Hotel will assure fulfillment
of all of Developer's responsibilities to the City with respect to operation of the
Headquarters Hotel.
(724) Due to the sharing of mechanical facilities between the Convention Center
and the Hotel, whenever reasonably possible, sub-meters will be installed in order to
calculate the cost of all utilities. If the installation of such sub-meters is not. reasonably
possible, a formula will be agreed upon by the parties hereto to make such calculations.
(725) The parties hereto acknowledge and agree that the Reimbursement Agreement
with the banks furnishing the Letters of Credit contemplated by the Financing Documents
is not yet finalized and depends upon obtaining additional Letters of Credit or other
forms of credit enhancement. It is anticipated that these matters will be finalized
on or before December 15, 1984. These matters may require revisions to this Agreement
to conform with final terms of the Reimbursement Agreement. The parties, therefore,
agree that such Reimbursement Agreements shall be finalized no later than December
15, 1984 and that this Agreement shall be revised to conform thereto. If the parties
are unable to finalize the Reimbursement Agreement by that date, the parties may,
if they mutually so agree, extend this Agreement, otherwise this Agreement shall
terminate for all purposes.
,1984 CITY OF PALM SPRINGS, CALIFORNIA
BY
Frank M. Bogert, Mayor
By
Norman R. King, City Manager
,1984 COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS
By
Frank M. Bogert, Chairman
By
Norman R. King, Secretary
,1984 HOTEL & CONVENTION CENTER PARTNERS,
LTD., A CALIFORNIA LIMITED PARTNERSHIP
BY SENCA INVESTORS INC., A CALIFORNIA
CORPORATION, GENERAL PARTNER
By
Robert H. Shelton, President
,1984 SENCA
By
Robert H. Shelton, President
LIST OF EXHIBITS
EXHIBIT A: Description of the SENCA Development Team
EXNIBIT B: Cooperation Agreement between the City of Palm Springs
and SENCA
EXHIBIT C: Architectural Concept
EXHIBIT D: Project Description
EXHIBIT E: Project Scope of Work
EXHIBIT F: Project Schedule
EXHIBIT G: Special Use Condition for the privately owned golf course
EXHIBIT H: Guaranteed Maximum Price Contract
(Exhibits will be approved individually as they are completed. )
RESOLUTION NO. 15355
OF THE CITY COUNCIL OF THE CITY OF PALM SPRINGS,
CALIFORNIA, ADOPTING A DEVELOPMENT AGREEMENT BE-
TWEEN THE CITY, THE COMMUNITY REDEVELOPMENT AGENCY,
SENCA, AND HOTEL AND CONVENTION CENTER PARTNERS I-
XI, LIMITED, WHICH WILL DEFINE THE DEVELOPMENT OF
THE PALM SPRINGS CONVENTION CENTER AND HEADQUARTERS
HOTEL
WHEREAS, the City Council has contracted for and received independent
reports that spending by delegates at conventions and exhibitions con-
tributes substantially to the City of Palm Springs' economy and the
City' s tax revenues; and
WHEREAS, the City Council has heard evidence that the City' s present
exhibition and contiguous meeting room space is too small to allow
major conventions/exhibitions to consider locating within the City of
Palm Springs; and that this problem causes the City to lose substan-
tial convention/exhibition business; and
WHEREAS, the City Council and its Staff have thoroughly researched and
discussed these problems and the issues posed in a certain Project
Overview Document for the proposed Palm Springs Convention Center and
Headquarters Hotel , leading to the Resolution No. 15251 of Council
Concurrence, dated June 27, 1984 and Bond Inducement Resolution No.
15096 and 224 of the City Council and Community Redevelopment Agency,
respectfully, dated June 15 and 19, 1984; and
WHEREAS, the City Council has determined that the project as outlined
in that Project Overview Document will allow Palm Springs to capture
a larger share of the convention/exhibition market and thereby substan-
tially increase contributions to the City economy and tax revenues; and
WHEREAS, the City Council did on August 17, 1984 approve a Memorandum of
Understanding between the City and SENCA, et. al . which was used to form
the basis of the attached "Development Agreement Palm Springs Convention
Center and Hotel " ; and
WHEREAS, the approval of the attached "Development Agreement Palm Springs
Convention Center and Hotel " is needed in order to complete the financing
of the project within the required timeframe.
PLOW, THEREFORE BE IT RESOLVED by the City Council of the City of Palm
Springs that the sample "Development Agreement Palm Springs Convention
Center and Hotel " is hereby adopted and shall define the development of
the Palm Springs Convention Center and Headquarters Hotel Project.
ADOPTED this 5th day of December 1984.
AYES: Councilmembers Birer, Foster and Mayor Bogert
NOES: None
ABSENT: None
ABSTAIN: Council.me.mbers Maryanov and Smith
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
,p
City Clerk City Mana er
REVIEWED APPROVED