HomeMy WebLinkAboutA8449 New Church II LLC and Cahuilla Church LLC2021-0725755
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AND WHEN RECORDED MAIL TO: Recorded in official Records
County of Riverside
Peter Aldana
THE CITY OF PALM SPRINGS Assessor -County Clerk -Recorder
PalCanyon Way m Springs, CA92262 ,IIIYI�7LILrY51 �F � I�Ii1G '� III
Attention: City Clerk
(Space Above This Line for Recorders Office Use Only)
AMENDMENT NO. 1 TO AMENDED AND RESTATED OPERATIONS COVENANT
AGREEMENT NO. 8449
THIS AMENDMENT NO. 1 TO AMENDED AND RESTATED OPERATIONS
COVENANT AGREEMENT NO. 8449 ("Amendment') is made and entered into this 1ST
day of EPleue`a=,�021, by and between on the one hand, NEW CHURCH II, LLC, a
Nevada limited liability company, and CAHUILLA CHURCH, LLC, a Nevada limited
liability company, (collectively, "Owner"); and, on the other hand, the CITY OF PALM
SPRINGS, a California municipal corporation and charter city ("City").
ITL9i�g�i
A. WHEREAS, Owner and City previously entered into that certain Amended and
Restated Operations Covenant Agreement No. 8449 dated as of January 13, 2020
("Agreement') pursuant to which City agreed to provide certain financial incentives to
Owner's proposed hotel development, provided that Owner meets specified
conditions including meeting milestone dates relating to predevelopment and
development of the hotel as set forth in Exhibit "C" to the Agreement ("Schedule of
Performance");
B. WHEREAS, the worldwide Covid-19 pandemic and governmental and private sector
responses thereto have negatively impacted the hospitality industry, hotel
development and the hotel lending market;
C. WHEREAS, based on the circumstances described in Recital B above, Owner has
made a claim for force majeure extensions of the Schedule of Performance. However,
the City has disputed some aspects of the Owner's claim and has raised concerns
concerning the condition of Owner's hotel site, which has remained vacant for several
years pending commencement of construction;
D. AND WHEREAS, City and Owner desire to resolve their dispute and provide for
adjusted milestones for the development of the Project, on the terms and conditions
set forth in this Amendment;
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, City and Owner hereby agree and amend the
Agreement as set forth below.
55575.10035\34474404.5
A'.xS.r"y- 8q
1. Defined Terms. Unless otherwise defined herein, defined terms used in this
Amendment shall have the meanings assigned to them in the Agreement.
2. Amended Schedule of Performance.
replaced with the revised Exhibit
incorporated herein by this reference.
Exhibit "C" to the Agreement is hereby
"C", attached to this Amendment and
a. With respect to Milestone # 5 (Demolition of non -historic structures), Owner
shall not lose any non -conforming rights that Owner has in the property with
regard to floor area ratio, lot coverage, or unit count, as a result of the
demolition called for by this Agreement. The provisions of this
subparagraph will survive the termination of this Agreement.
b. With respect to Milestone # 7 (Submission of Application to Extend
Entitlements), in connection with the Palm Springs Zoning Code's
requirement for extensions of time for entitlements, City agrees that
Owner's strict compliance with the milestones in this Agreement shall
constitute evidence of good faith efforts toward the exercise of Owners
entitlements, which Owner may submit to the Planning Commission, and, if
appealed, to the City Council.
3. Modifications to Force Maieure. Provisions of the Agreement pertaining to Force
Majeure and Excusable Delay shall remain as set forth in the Agreement, except
as follows:
a. Notwithstanding any other provision of the Agreement or this Amendment,
Owner shall not be entitled to any further extension of Milestones #1 though
#10, inclusive (as set forth in Exhibit "C") because of any direct or indirect
impact of the Covid-19 pandemic, including, but not limited to, the following
direct or indirect impacts such of the Covid-19 pandemic: (i) reduction in
business and leisure travel; (ii) reduced profitability of hotels; (iii)
constriction of the lending market for new hotels; or (iv) unavailability of
construction financing for the Revised Luxury Hotel Project.
b. No later than the date set forth as Milestone #8 (feasibility report), Owner
shall, at Owner's sole cost and expense, commission a written report by a
nationally recognized firm that is mutually agreed upon by Owner and City
in order to assess whether or not market conditions would reasonably
preclude proceeding with the financing and construction of the Project
despite Owner's best efforts, given all of the various factors existing at that
time, including, without limitation, the forecast for relevant hospitality market
demand, the hotel lending market, and Owner's financial condition and
borrowing capacity. In the event the feasibility report determines that it is
not economically feasible to construct and operate the Project despite
Owner's best efforts, Owner may (but shall not be required to) provide City
with the report in order to rely on such report as prima facie evidence of a
Force Majeure event, as set forth in Section 7.16 of the Agreement, with
55575,10035\34474404.5
respect to Milestone #11 (construction loan approval/ construction contract)
or #12 (commencement of construction). In the event that Owner chooses
to invoke Owner's Force Majeure with respect to Milestone #11 or #12, or
both, and such Force Majeure extends one or more mile date(s) by 365
days, then either Party shall have the right, but not the obligation, to
terminate the Agreement, without any liability of any kind.
4. Maintenance of Vacant Site Prior to Construction. Owner shall use reasonably
diligent efforts to maintain the vacant site (prior to start of construction) in a clean
and attractive condition. Without limiting the nature of the foregoing, Owner shall
implement the practices set forth in Exhibit "D", attached hereto and incorporated
by reference herein as part of the Agreement.
5. Typographical Correction. To correct a typographical error in the Agreement, the
phrase "reasonably require more than sixty days to cure" which appears in
Sections 7.10, 7.10.1 and 7.11 of the Agreement is changed to state "reasonably
require more than thirty (30) days to cure".
6. Mutual Withdrawal of Notices of Default: Estoppel and Good Standing. The Parties
hereby rescind and cancel any notices of default they may have issued pursuant
to the Agreement prior to the date of this Amendment. The Parties hereby
represent and warrant to each other and to Owners current and prospective
lenders, partners, investors and hotel operator (collectively, "Hotel Participants")
that: (i) the Amended Agreement is in full force and effect and has not been
modified other than by the terms of the Amendment; and (ii) each of the Parties is
in good standing under the Amended Agreement and there is neither any default
under the Amended Agreement ("Existing Default") nor any act or omission
occurring prior to the date of this Amendment that would be a default if properly
asserted in a notice of default and not cured within the cure period applicable under
the Amended Agreement ("Pending Default").
7. Withdrawal by City of Code Violation Notice. City hereby rescinds and cancels its
Notice of Violation dated July 15, 2021 concerning Owner's hotel site, and Owner
hereby rescinds and cancels its appeal therefrom dated July 19, 2021.
8. Withdrawal by Owner of Public Records Request. Owner hereby rescinds and
cancels its Public Records Act request to the City dated July 19, 2021.
9. Mutual Release. Each of the Parties hereby fully releases and forever discharges
the other Parties from any and all claims, defaults (including but not limited to
Existing Defaults and Pending Defaults), code violations existing as of the
execution of this Amendment, demands, actions and causes of action (collectively,
"Claims") which any Party may have against another Party, arising out of, or in any
way related to the Agreement or the hotel development site described therein. This
55575.1003"4474404.5
section shall operate as a full and final settlement, compromise, and resolution of
any and all such past or present Claims. Accordingly, except as provided herein:
(A) Each Party specifically waives the provision of section 1542 of the
Civil Code of the State of California which provides: "A general
release does not extend to claims that the creditor or releasing party
does not know or suspect to exist in his or her favor at the time of
executing the release and that, if known by him or her, would have
materially affected his or her settlement with the debtor or released
party"
(B) Each Party represents and warrants that it understands the effect of
this waiver of section 1542 and has had the opportunity to discuss
the effect of this waiver with counsel of its choice.
10. No Other Amendment. Except for the changes set forth above in this Amendment,
the Agreement remains unmodified and in full force and effect.
IN WITNESS WHEREOF, the City and Owner have executed this Amendment by duly
authorized representatives on the date first written hereinabove.
[SIGNATURES ON FOLLOWING PAGE]
55575. 10035\34474404.5
SIGNATURE PAGE
TO
AMENDMENT NO. 1 TO AMENDED AND RESTATED OPERATIONS COVENANT
AGREEMENT NO. 8449
"CITY"
THE CITY OF PALM SPRINGS,
a California municipal corporation,
and charter city
By:
Justi Clifton, City Vnag6r
AT EST:
ony Me)
APPROVED AS TO FORM:
Jeff B nge , ity Attorney
NEW CHURCH II, 3bC
a Nevada limited liab ' co a /
By:
Title: --s)-r e 10 V `f P -rtdsk LiS
1M 0.naw, 0E- LLQ2O C- lt)W) LPL
I } s to a.A0.s'f 1,
55575.10035\34474404.5
CAHUILLA CHURCH, LLB
a Nevada limited liability company
By:
Title: TrusteP� D'Ny�Tru cj- AS
K1arlavr- of L-jZA(- 1000) i-LC
) f s "anaSe r-
REVISED EXHIBIT "C"
PERFORMANCE SCHEDULE
MILESTONE
DATE
ACTIVITY
Owner to provide City with evidence
of its architects resuming work on
Within 2 days following full
construction plans following the
Covid-19 hiatus. This evidence will
#1
execution of this Amendment
include a copy of the signed
No.1
authorization to proceed with
completion of the plans consistent
with the submittal date below.
Owner's architect(s) shall certify to
Within 2 days following full
the City that the construction plans
#2
execution of this Amendment
are at least 30% complete, as
No.1
measured consistent with industry
standards.
Owner to submit a plan to the
Development Services Director to
protect and preserve the historic
buildings and structures (including but
not limited to buildings B-1 through 13-
#3
December 1, 2021
8, R, and historic arch structure
adjacent to building A, as depicted on
drawing A-0.1, dated April 9, 2020) in
order to accomplish Milestone #5,
below (demolition of non -historic
structures
Owner to install fencing/screening, in
#4
December 1, 2021
a manner acceptable to the
Development Services Director.
Owner to demolish buildings A, B-9
through B-11, C, D, E, G, H, I, J, K, M,
#5
90 days following issuance of
and O, as depicted on drawing A-0.1,
demolition permit
date April 9, 2020.1 Owner will apply
for the demolition permit by January
5, 2022.
Owner to demonstrate substantial
progress made on construction plans
#6
February 1, 2022
subsequent to the date of this
Amendment. "Substantial progress"
means certification by the architect to
1 See Section 2(a) of the Agreement, above.
5 5575.1003 5\34474404.5
the City that the construction plans
are at least 60% complete, as
measured consistent with industry
standards.
#7
Submit application to extend
March 1, 2022
entitlements?
#8
Owner shall commission a feasibility
April 15, 2022
report by a nationally recognized firm,
mutually agreed to by City and Owner
Submit substantially complete
#9
construction documents and
application for building permit. For
purposes of this Milestone,
"substantially complete" shall mean
June 15, 2022
certification by the architect that the
primary aspects of the construction
plans (i.e., structural, mechanical) are
at least 80% compete, as measured
consistent with industry standards. .
Obtain City approval of construction
#10
October 15, 2022
documents. City shall process the
tans difligently and in good faith.
Obtain approval for a construction
loan to finance construction of the
#11
December 15, 2022
Project, and enter into a construction
contract to develop the Project
Pay for and obtain all required
#12
January 15, 2023
building permits, and commence
construction of the Revised Luxury
Hotel Project
Substantially complete construction
#13
February 15, 2025
of the Revised Luxury Hotel Project
Open the Revised Luxury Hotel
#14
June 15, 2025
P o
Project
' See Section 2(b) of the Agreement, above.
55575.10035\34474404.5
REVISED EXHIBIT "D"
MAINTENANCE PROGRAM
Remove all dead vegetation, including dead trees and bushes
Provide daily on -site, in -person security 7:00 p.m. through 7:00 a.m., plus daily
maintenance check and trash collection. Such security shall be licensed in accordance
with the Private Security Services Act (Bus. & Prof. Code, 7580 et seq.)
The property shall be secured with perimeter fencing/screening as approved by the City's
Development Services Director. Such fencing/screening must be maintained in a clean
and presentable fashion, and graffiti shall be removed within 48 hours of notification to
Owner. If the fencing/screening becomes faded, Owner shall replace or re -surface the
fencing/screening, so as to not be faded.
Keep the site clear of trash, debris, and branches/palm fronds, whether on the ground or
on rooftops of buildings.
Post "No trespassing" signage at intervals no more than 150' apart. The signage must
reference Penal Code Section 602(I). The property shall also contain signage that
indicates the property is under video surveillance. Each side of the property shall also
display a sign, which provides management contact information. The property shall be
posted with the name and 24-hour contact phone number of the local property
management company and security company. The posting shall be no less than 18" X
24", shall be of a font that is legible from a distance of forty-five (45) feet, and shall contain
the following verbiage: "THIS PROPERTY MANAGED BY " and "TO
REPORT PROBLEMS OR CONCERNS CALL (name and phone number)".
There shall be at least two designated entry points on the Cahuilla and Belardo sides of
the property and at least one on the Baristo side. Designated entry points to the property
shall be locked. Access keys/codes shall be made available to law enforcement and fire
personnel by means of Knox Box security containers keyed to match the keys utilized by
Palm Springs Fire and Palm Springs Police personnel. The security boxes shall be
marked with reflective tape.
All structures on said property shall be secure from access by trespassers. Any breach
or attempted breach to a structure and/or perimeter fence shall be repaired to the City's
satisfaction within two (2) business days.
Install lighting at pedestrian access points. Lighting activated by motion sensors shall be
installed along walkways of the property and other areas designated by the Chief of Police
or his designee. All lighting shall comply with section 93.21.00 of the Palm Springs Zoning
Code (PSZC).
55575.10035\3"74404s
Install and maintain a video surveillance system as approved by the Chief of Police or the
Chiefs designee. Use of the surveillance system shall provide twenty-four (24) hour
coverage of the property in the form of video and/or still images triggered by motion. Any
data captured on the remote cameras shall be evaluated weekly by Owner. In the event
there is evidence of a trespass or damage caused by an unknown party, the surveillance
footage will be evaluated. This system shall, at a minimum, monitor any points of ingress
or egress through the property as well as any large open space areas, the back sides of
buildings and the narrow alleys and spaces between the buildings. Images captured by
this surveillance system shall be maintained for a period of no less than thirty (30) d.
Copies of footage shall be made available to the Chief of Police or his designee no later
than two (2) business days after a request for the footage is made.
The property landscape shall be maintained in compliance with PSZC section 93.19.00,
subsection 1, and with PSMC section 11.72.170(b)(1), both of which read as follows - All
properties, including vacant properties, shall be kept free of trash, building materials or
the storage of other goods which are visible from the street or adjacent properties.
Properties shall also be kept free of excessive vegetative undergrowth.
At such time as the property is sold or otherwise changes, management and the person
named below is no longer responsible for the property, they shall notify the City
immediately.
55575.10035\34474404.5
ACKNOWLEDGMENT
A notary public or other officer compieuny a 1I�
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
State of California Los Angeles )
County of
Onl`�n) Michael Alexander Cardenas,NotarY Public
before me,
(insert name and title of the officer)
eared � \C ( r'� W-PI ✓l 11 /�i
personally appeared on whose namrislar�
who proved to me on the basis of satisfactory evidence to be the pets bamley executed the same in
subscribed to the within instrument and acknowledged to me ha a�� the instrument the
(hislhet4their authorized capacity(iesi, and that by�hi lher/�eir 9 �'O
person(ay or the entity upon behalf of which the personCs) acted, executed the instrument
percertify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct
Ichael Alexander Cardenas
WITNESS Trnyand�and i I sea . m :���yy , .,4 COMM.2221449 p
(( .t^'1D c' NOTARY %1&-IC-CALIFORNIA (n
1 Q � .i i IOS ANGELS COUNiY
L
V tM CanYrl. Exa:es De[ B, 2021
Signature)
ACKNOWLEDGMENT
A notary public or orner on16e1 UU1Ijp,�.,,,y ., •—
certificate verifies only the identity of the individual
who signed the document to which this certificate is
attached, and not the truthfulness, accuracy, or
State of California Los Angeles
County of
On N21 L � Qt' I � before me,
Michael Alexander Cardenas,NotarY Public
(insert name and title of the officer)
personally app
eared �� (C 1� ���hf t� t��d�
who proved to me on the basis of satisfactory evidence to be the person( whoesecute the same in
subscribed to the within instrument and acknowledged to mer Sat ae/rsFiew n the instrument the
his/herAbeir authorized capacity(ies), and that by his/her tie g (s)
persons); or the entity upon behalf of which the personA acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct.
•- =\ ichaelAlexarxierCardenas
WITNESS my hand a cia ea N atx COMM. 2221449 n
Q :;�mc NOTARY PUBUC•CAI-ffORNIA N
1 Q .. i lA5 ANGEI_'S COIMrY •�
-- -II AA
r tom'% d _ . tM Carcn.64'a Dec8.2021 b
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
STATE OF CALIFORNIA
COUNTY OF
On this I5T day of bWCMMC ,20Zibeforeme, VQN*4UE AA- LGYIa�c-1
Notary Public, personally appeared . I USf 1 N C( f p7TDo.l , who
proved to me on the basis of satisfactory evidence to be the personN whose nameN @are
subscribed to the within instrument and acknowledged to me that('she/they executed the same
in Q/her/their authorized capacityjlec)a and that b)(�iiher/their signatureN on the instrument
the personK or the entity upon behalf of which the personN acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature: U°�/VOA moo' (Seal)
MONIQUE M. LOMELI
Notary Public - California
�{� ' Riverside County f
Commission It 2267330
My Comm. Expires Nov 17, 2022
55575.10035134474404.5