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HomeMy WebLinkAboutA5597 - AGMT PALM HILLS LAND CORP.INDEMNITY AGREEMENT between THE CITY OF PALM SPRINGS and PALM HILLS LAND CORP. A California corporation and PALM HILLS COMPANY, LLC A Delaware limited liability company 70050154.1 70050376.1 INDEMNITY AGREEMENT THIS INDEMNITY AGREEMENT ("Indemnity Agreement" or "Agreement") is entered into on November 2, 2007, by the CITY OF PALM SPRINGS (the "City"), a municipal corporation, and PALM HILLS LAND CORP., a California corporation ("Palm Hills Corp.' ), and PALM HILLS COMPANY, LLC, a Delaware limited liability company ("Palm Mills, LLC") (collectively "Developers"). The City and Developers collectively are referred to as the "Parties" and individually as a "Party" in this Agreement. RECITALS: A. WHEREAS, on or about July 21, 2004, the City and Palm Hills Corp. entered into a Development Agreement entitled Development Agreement No. 4 or DA4 ("Development Agreement") for the development of the Developers' property consisting of an approximately 906 acre site in Palm Springs, California known as Palm Hills (the "Property"), pursuant to the development plan in the Development Agreement ("Project"). B. WHEREAS, in connection with same, the City approved the following land use approvals: (1) General Plan Amendment, Case No. 5-0732, (2) Pahn Hills Specific Plan (Planning Area #1), Case No. 5-0732, (3) Planned Development District No. 258, Case No. 5-0826-PD-258, (4) Tentative Parcel Map 29101, and (5) Tentative Tract Map 29100 for the development of approximately 900 acres more or less in the southeastern portion ofPahn Springs (the "PDD Area") and at the same time certified the Environmental Impact Report No. 98061043 ("EIR") by Resolution No. 20993 (collectively "Entitlements"). C. WHEREAS, Section 13 of the Development Agreement provides that the Developer Palm Hills Corp. agrees to indemnify the City and its elective boards, commissions, officers, agents and employees and to hold and save them and each of them harmless from any and all actions, suits, claims, liabilities, etc. (including but not limited to attorneys' fees and costs) against the City and/or agent for any such Claims or Litigation (as those terms are defined in Section 1.10 of the Development Agreement) and shall be responsible for any judgment arising there from (collectively, the "Ind: mnity Obligations'). D. WHEREAS, Section 13.3 of the Development Agreement provides that all indemnity provisions set forth therein shall survive termination ofthe Development Agreement for any reason other than City's default. E. WHEREAS, on or about August 5, 2004, Sierra Club and Center for Biological Diversity filed a Petition for Writ of Administrative and Traditional Mandate in the Riverside Superior Court, Case No. INC 044852, to invalidate the Entitlements and set aside the EIR ("Lawsuit"). F. WHEREAS, on or about March 8, 2005, the City's approval of the General Plan Amendment was set aside by way of a referendum ("Referendum'), rendering the Entitlements inconsistent with the General Plan and therefore invalid and of no force or effect. 01003/0039/53835.2 70050154.1 70050376.1 G. WHEREAS, because the effect ofthe Referendum has been to render the Entitlements inconsistent with the General Plan and without value, the question has arisen as to whether the Lawsuit is moot. H. WHEREAS, Sierra Club and Center for Biological Diversity have taken the position that the City and the Developers may try to use the certified EIR, and the entitlements identified in subparagraphs (2)-(5) of Recital Paragraph B, above, that were not the subject matter of the Referendum (collectively "Remaining Entitlements"), and have decided to proceed with the Lawsuit to invalidate the certified EIR and Remaining Entitlements. I. WHEREAS, on or about May 26, 2004, Developer Palm Hills, LLC became an interested party in the Lawsuit by executing an agreement whereby Palm Hills, LLC was assigned, inter alia: (i) the right to purchase the Property; and (ii) Palm Hills Corp.'s rights and obligations under the Development Agreement, including the Indemnity Obligations (the "Assignment Agreement'). By executing this Indemnity Agreement, Palm Hills Corp. acknowledges that it has no objection to the parties entering into this Indemnity Agreement. J. WHEREAS, the Developers and the City have agreed that the most cost effective way of obtaining a dismissal of the Lawsuit is for the City to recognize formally that, as a result of the Referendum, the Remaining Entitlements are inconsistent with the General Plan and are therefore invalid and terminated. K. WHEREAS, the City has also agreed to vacate its approval of Resolution No. 20993, which certified the EIR, in light of the fact that the Remaining Entitlements were rendered invalid as a result of the Referendum. NOW, THEREFORE, in consideration of the foregoing, the City and Developers agree as follows: 1. Pursuant to Section 13 of the Development Agreement, Palm Hills, LLC agrees to pay all attorneys' fees and costs incurred by the City in connection with the Lawsuit. The amount incurred to date is equal to $45,277.59 ("Payment") and is due and payable within fifteen days of execution of this Agreement with check made payable to City of Palm Springs. 2. Upon receipt of the Payment, the City will place on the agenda of the next City Council meeting, for its council's consideration to take all additional steps necessary to formally vacate or otherwise set aside as invalid and of no force or effect, the following Resolutions and Ordinances concerning the Project: a. Resolution No. 20993 certifying the Final Environmental Impact Report as complete, adopting the Statement of Facts and Findings, adopting the Statement of Overriding Considerations, and adopting the Mitigation Monitoring Program for the Project; b. Resolution No. 20995 approving the Palm Hills Specific Plan; 70050376.1 2 C. Resolution No. 20996 approving the Preliminary Plan Development District 258, Tentative Parcel Map No. 29100, and Tentative Tract Map No. 29101 for the 906- acre development proposed on property owned by Palm Hills Corp.; d. Ordinance No. 1657 approving a Change of Zone; and e. Ordinance No. 1658 approving the Development Agreement. The City Attorney's office will recommend to the City Council that it formally vacate or otherwise set aside as invalid and of no force or effect each of the above -referenced Resolutions and Ordinances. I Palm Hills, LLC agrees that payment pursuant to Paragraph 1 above does not affect its obligation, as defined in Section 13 of the Development Agreement, to pay any additional costs or damages incurred in the future by the City, including, without limitations, any claims or actions brought by Sierra Club, or any other party for recovery of its costs and attorneys' fees alleging that it is entitled to such costs and fees as the alleged prevailing party in the Lawsuit. 4. Scoae of Palm Hills LLC's Indemnity Obligations. The City and Palm Hills, LLC acknowledge and agree that the Indemnity Agreement simply reiterates Palm Hills, LLC's Indemnity Obligations to the City set forth in Section 13 of the Development Agreement and does not in any manner expand or otherwise alter those obligations. Because of the Assignment Agreement referred to in Recital I, above, Palm Hills Corp. shall have no liability to Palm Hills, LLC for any of the obligations set forth in the Development Agreement, including the Indemnity Obligations. Further, Palm Hills, LLC shall be responsible for the payment of any fees or costs awarded against Palm Hills Corp. in connection with the Lawsuit. The City does not waive its right to recover payment of any fees or costs from Palm Hills Corp. pursuant to the Development Agreement which the City is unable to recover from Palm Hills, LLC. S. Construction of Indemnity Agreement. The language of this Indemnity Agreement shall be construed as a whole and given its fair meaning. The captions of the sections and subsections are for convenience only and shall not influence construction. This Indemnity Agreement shall be governed by the laws of the State of California. This Indemnity Agreement shall not be deemed to constitute the surrender or abrogation of the City's governmental powers over the Developers' Property. 6. Severability. If any provision of this Indemnity Agreement is adjudged invalid, void or unenforceable, that provision shall not affect, impair, or invalidate any other provision, unless such judgment affects a material part of this Indemnity Agreement. 7. Attorneys' Fees. if any Party to this Agreement is required to initiate or defend any claims, actions or proceedings, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to its reasonable attorneys' fees and costs incurred in those action(s) or proceeding(s). 8. No Third Party Beneficiaries. The only parties to this Indemnity Agreement are Developers and City. There are no third party beneficiaries and this Indemnity Agreement is not intended, and shall not be construed to benefit or be enforceable by any other person whatsoever. 70050376.1 1) 9. Mutual Covenants. The covenants contained herein are mutual covenants and also constitute conditions to the concurrent or subsequent performance by the Party benefited thereby of the covenants to be performed hereunder by such benefited Party. 10. Counterparts. This Indemnity Agreement may be executed by the Parties in counterparts which counterparts shall be construed together and have the same effect as if all of the Parties had executed the same instrument. 11. Authority to Execute. The persons executing this indemnity Agreement on behalf of the Parties hereto warrant that (i) such Party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Indemnity Agreement on behalf of said Party, (iii) by so executing this Indemnity Agreement, such Party is formally bound to the provisions of this Indemnity Agreement, (iv) the entering into of this indemnity Agreement does not violate any provision of any other Agreement to which said Party is bound and (v) there is no Iitigation or legal proceeding which would prevent the Parties from entering into this Agreement. 12. Waiver. Failure by a Party to insist upon the strict performance of any of the provisions of this Indemnity Agreement by the other Party, or the failure by a Party to exercise its rights upon the default of the other Party, shall not constitute a waiver of such Party's right to insist and demand strict compliance by the other Party with the terms of this indemnity Agreement thereafter. 70050376.1 13. Notice. (a) To Developers. Any notice required or permitted to be given by the City to the Developers under this Indemnity Agreement shall be in writing and delivered personally to Developers or mailed with postage fully prepaid, registered or certified mail, return receipt requested, addressed as follows: Palm Hills Land Corp. 175 W. Jackson Blvd., Suite 400 Chicago, Illinois 60604 Attention: Edmund J. O'Connor With a copy to. - Cox, Castle & Nicholson LLP 2049 Century Park East, 28th Floor Los Angeles CA 90067-3284 Attention: Kenneth B. Bley, Esq. Schlecht, Shevlin & Shoenberger, ALC 801 E. Tahquitz Canyon Way, Suite 100 Palm Springs, California 92262 Attention: James M. Schlecht, Esq, 4 Palm Hills Company, LLC c/o The Ginn Company One Hammock Beach Parkway Palm Coast, FL 32137 Attn: Edward R. Ginn III With a copy to: Manatt, Phelps & Phillips, LLP 695 Town Center Drive, 14th Floor Costa Mesa, California 92626 Attention: Susan K. Hori, Esq. or such other address as Developers may designate in writing to the City. (b) To the City. Any notice required or permitted to be given by the Developers to the City under this Indemnity Agreement shall be in writing and delivered personally to the City Clerk or mailed with postage fully prepaid, registered or certified mail, return receipt requested, addressed as follows: City of Palm Springs 3200 Tahquitz Canyon Way Palm Springs, California 92262 Attention: Planning Director With a copy to: Woodruff, Spradlin & Smart 555 Anton Boulevard, Suite 1200 Costa Mesa, California 92626 Attn: Douglas C. Holland, City Attorney or such other address as the City may designate in writing to Developers. Notices provided pursuant to this Section shall be deemed received at the date of delivery as shown on the affidavit of personal service or the Postal Service receipt. 14. Further Actions and Instruments. Each of the Parties shall cooperate with and provide reasonable assistance to the other to the extent necessary to implement this indemnity Agreement. Upon the request of either Party at any time, the other Party shall promptly execute, with acknowledgment or affidavit if reasonably required, and file or record such required instruments and writings and take any actions as may be reasonably necessary to implement this Indemnity Agreement or to evidence or consummate the transactions contemplated by this Indemnity Agreement. 15. Recitals. The recitals in this Indemnity Agreement constitute part of this Indemnity Agreement and each Party shall be entitled to rely on the truth and accuracy of each recital as an inducement to enter into this Indemnity Agreement. 16. Entire Agreement. This Indemnity Agreement constitutes the entire agreement between the Parties with respect to the subject matter of this indemnity Agreement, and this Indemnity Agreement supersedes all previous negotiations, discussions, and agreements between the Parties concerning the matters set forth in the Indemnity Agreement. No parol evidence ofany prior or other agreement shall be permitted to contradict or vary the terms of this Indemnity Agreement. 70050376.1 5 IN WITNESS WHEREOF, the City and Developers have executed this Indemnity Agreement on the date first above written. CLERK CITY OF PALM SPRINGS APPROVED BY CITY COUNCIL 1�OT Q U2-��1 PALM HJL�� JOAP., a California J. O'CONNOR, President BY: MARY JANE O'CONNOR, Secretary [Signatures continued on next page] 70050376.1 6 IN WUNESS WHEREOF, the City and Developers have executed this Indemnity Agreement on the date first above written. CITY OF PALM SPRINGS WN ATTEST: CITY CLERK Approved as to form City Attorney MAYOR "DEVELOPER" PALM HILLS LAND CORP., a California corporation BY: EDMUND J. O'CONNOR, President MARVANE O'CONNOR, Secretary [Signatures continued on next page] 70050316.1 "DEVELOPER" PALM HILLS COMPANY, LLC, a Delaware limited liability company By: GINN-PALM HILLS MANAGER, LLC, a Delaware limited liability companL.: By: �1� _ Edward R. Ginn II , Manager 70050154.1