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MY COUNCIL STAFF REPORT
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DATE: DECEMBER-17, 2014 UNFINISHED BUSINESS
SUBJECT: APPROVE A PURCHASE AGREEMENT AND ESCROW
INSTRUCTIONS WITH PALM SPRINGS PROMENADE, LLC RELATED
TO THE ACQUISITION OF THE EVENT CENTER SPACE, PROVISION
OF ADDITIONAL ON-SITE PARKING AND IMPROVED PARKING
MANAGEMENT RIGHTS, ALLOCATION AND SHARING OF CERTAIN
COSTS AND FEES; AUTHORIZE ADDITIONAL CITY REQUESTED
EVENT CENTER AND PARKING STRUCTURE WORK; AND
APPROVAL OF A PARTIAL RELEASE OF THE PERFORMANCE DEED
OF TRUST FOR BLOCK C-1 AND BLOCK A OF PALM SPRINGS
DOWNTOWN PROJECT.
FROM: David H. Ready, City Manager
BY: Community& Economic Development Department
SUMMARY
On September 29, 2011, the City and Palm Springs Promenade, LLC ("Developer")
entered into a Project Financing Agreement ("PFA"), as amended, that relates to the
financing, development, redevelopment, creation, and refurbishment of Public and
Private Improvements in the Desert Fashion Plaza area of downtown Palm Springs.
This action recommends approval of adding additional public parking for the new
Downtown Palm Springs redevelopment project, apportions fee expenditures between
the City and Developer, approves additional City requested change orders associated ,
with the Event Center/Parking Structure, and authorizes partial releases of the
Performance Deed of Trust to secure construction loans for the project.
RECOMMENDATION:
1. Approve Purchase Agreement and Escrow Instructions with Palm Springs
Promenade administered by First American Title Company, Escrow Holder, File
No.: RIW-4765919 (SE), Dated November 10, 2014.
ITENA NO. 4 A
City Council Staff Report
December 17,2014—Page 2
Purchase Agreement and Escrow Instructions
2. Authorize the provision of additional City requested work consistent with the
Scope of Work Related to the Event Center Preparation and Parking Structure
Upgrades, Approved by City Council on November 17, 2014.
3. Approve a Partial Release of Performance Deed of Trust By and Between the
City of Palm Springs (Beneficiary) and Palm Springs Promenade, LLC (Trustor)
for Block A and Block C-1.
4. Authorize the City Manager to execute all documents and/or agreements in a
form approved by the City Attorney necessary or appropriate to implement the
approvals and authorizations described in this Recommendation.
Discussion
Event Center and Additional Parking within the Project Area
At the meeting of September 17, 2014, City Council approved the purchase of the Event
Center, identified as Block E in the Project Financing Agreement as amended (PFA), for
a discounted price of $4,500,000, for use as public open space. This parcel has been
valued at $5,300,000 based on a valuation report performed by CBRE Appraisal
Services. The CBRE value was based upon the existing Specific Plan density and land
use allowance, and the entitlement of the parcel for 65,000-70,000 square feet of
commercial space plus 165 upper level residential units.
Moreover, as part of the agreement, the Developer agreed to use the proceeds of the
sale of Block E for the construction of 188 +/- parking spaces below Block B, thereby
increasing the total amount of parking within the project area approximately 20% by
relieving the City's approximately 1,000 on-site spaces from the additional parking
burden related to serving future development on Block B (Pursuant to the PFA, all
development within the boundaries of the adopted specific plan which conforms to the
specific plan is considered adequately served by existing parking and the Developer is
not required to provide additional parking to serve development that is consistent with
the speck plan. Thus, any additional parking provided in conjunction with
development projects on the project site will have the effect of increasing available
public parking in the City's parking structure).
In an effort to further increase the amount of available public parking, and while the !1
project is currently under construction, staff is proposing an additional 108 +/- parking E
spaces below the surface areas of Block F. To accomplish this, we propose a new
agreement for the purchase of the Event Center Space for the full value (an additional
$800,000), requiring the Developer to build not 188 new spaces, rather, 296 +/-
additional underground parking spaces at the site. The new parking spaces will be
constructed in conjunction with the development of Block B and Block F and will further
relieve, by a cumulative 30%, the City's approximately 1,000 on-site spaces from the
additional parking burden related to serving future development on Block B and Block F. IP
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02
City Council Staff Report
December 17.2014—Page 3
Purchase Agreement and Escrow Instructions
Additionally, where PFA 4 authorized an amendment to the Grant Deed that conveyed
the Parking Facilities to authorize the City the discretion to prohibit overnight parking (as
the City Council may designate by resolution) in Block A between the hours of 3:00 am
and 6:00, the proposed Purchase Agreement and Escrow Instructions will expand the
City's discretion regarding its ability to manage the use of the parking structure. The
City's ability to prohibit parking between 3:00 am and 6:00 would include Block A and
the city owned parking areas south of Block F and impose time restrictions for all
parking areas in the parking structure with the exception of the top floor of the parking
structure. These additional negotiated rights will allow the City to provide greater "free
parking management.
Change Order improvements
On November 17; 2014, the City Council approved a Change Order Log and Additional
Scope of Work for work undertaken by the Developer at the request of and on behalf of
the City pursuant to the PFA, as amended. As described in that report, the City will
scope, design, bid, and contract for the construction of the Event Center separately from
the Project Financing Agreement, but because of the inter-relatedness of the site with
the surrounding private development, a number of activities need to be or have been
undertaken on the City's behalf. These are infrastructure improvements that are
required and will have been already completed by the time the City undertakes the
construction of the Event Center on its own. This scope of work is attributed to and
benefits the Event Center. Thus the actions on tonight's agenda includes authorization
for the completion of the work described in the Project Change Order Log (PCO Log)
and Scope of Work reviewed and approved on November 17, 2014.
Development Mitigation Fees
In the Original PFA, the City agreed to waive all development mitigation fees associated
with the Public Improvements, provide credits or waivers of development mitigation fees
of the City to the extent of prior improvements and facilities had been previously
developed, and "cooperate with" the Developer "in efforts to mitigate and reduce"
development mitigation fees.
Although the final fees associated with the project cannot be calculated at this time,
consistent with the general intent of these provisions, Purchase Agreement and Escrow
Instructions provide for the following allocation and sharing of fees and related costs
associated with the PFA for all phases of the Project, west of Palm Canyon Drive, and
subject to the Museum Market Plaza Specific Plan:
03
City Council Staff Report
December 17, 2014—Page 4
Purchase Agreement and Escrow Instructions
Fees Paid to Outside Agencies/Funds Established by Ordinance
Developer Ci�t r
School Fee 100% 0%
TUMF Fee 100% 0%
Drainage Fee 100% 0%
Plan Check 100% 0%
Sewer Inspection 100% 0%
Sewer Main 100% 0%
Sewer Agreement 100% 0%
Sewer Connection Fee 100% 0%
Public Arts Fee 50%' 50%
Quimby Parks Fee 50% 50%
Developer and City Litigation Costs 50% 50%
Fees Paid to City for Entitlement Services
Building Permit 50% 50% =
SMIP Tax 50% 50%
Microfilm 50% 50% i
Permit Issuance 50% 50%
Construction Tax 50% 50%
Dbl. Fee/RMW/Misc. 50% 50%
Construction Permit 50% 50%
Misc. Filing Fee 50% 50%
Planning Fee 50% 50%
Technology Fee 50% 50%
General Plan Maint. Fee 50% 50%
`(Developer can receive credit for public art approved as part of the project)
Performance Trust Deed
Staff is also recommending approval of a Partial Release of the Performance Deed of
Trust for Block A and Block C-1. PFA, as amended. created the ability of the City to
approve partial releases of the Performance Deed of Trust lien, pursuant to certain
conditions, and only as blocks receive financing and ready to proceed with construction.
As part of the PFA, the Developer provided the City with a Performance Trust Deed to
secure its obligations to complete the Private Improvements. In order to accommodate
funding of construction loans for the project, the City will incrementally re-convey the
Performance Trust Deed on a parcel by parcel basis concurrently with the recordation of
any loan to fund Private Improvements on each parcel, as long as 100% of the costs to
complete the improvements are fully funded by the construction loan and/or Developer
04
City Council Staff Report
December 17,2014--Page 5
Purchase Agreement and Escrow Instructions
funds as determined by the lender and reviewed by a financial consultant identified by
the City Manager to perform the review.
Fiscal Analysis
The Amendment to the Escrow Instructions increases the City's expenditure on the
Event Center by $800,000, to be paid for from City's "Property Acquisition" Account
Number 2604500-59437-Measure J. With the exception of Attorney's fees, the City's
portions of fees are not due to third parties; rather they are "in-house" fees that will be
waived pursuant to the PFA
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JoqA S. Ra mo d, Director of David H. Ready
Co munit 8 o mic Development City Manager
Douglas, . Holland
City Attorney
Attachments:
Purchase Agreement and Escrow Instructions
Partial Release of Performance Deed of Trust
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PARTIAL RELEASE OF PERFORMANCE DEED OF TRUST
This AGREEMENT FOR A PARTIAL RELEASE OF PERFORMANCE DEED OF
TRUST("Agreement"), made effective as of the date fully executed, is by and between the City
of Palm Springs, a California municipal corporation and charter city ("City"), and Palm Springs
Promenade, LLC, a California limited liability company ("Developer"), with reference to the
following:
A. City is the beneficiary under a Performance Trust Deed duly recorded with the
Official Records of Riverside County, California("Trust Deed"), which encumbers, among other
properties, the real property described on Exhibit 1 attached hereto ("Block C-1"), and the real
property described on Exhibit 2 attached hereto ("Block A").
B. The purpose of the Trust Deed is to promote and secure development of
improvements within certain downtown areas. Blocks C-1 and A were originally slated
primarily for commercial and office facilities, however, as redevelopment concepts evolved, it
was determined that, in terms of economic revitalization, it would be preferable to develop a new
first class hotel on Block C-1, with commercial and office facilities on Block A. It was also
determined that implementation of such concepts would substantially increase redevelopment
and revitalization costs.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. In order to effectuate purposes of the Trust Deed and promote economic
revitalization, City agrees(a) that concurrently with the recordation of a construction loan for the
hotel (and related improvements) on Block C-1, City will release and reconvey the lien of the
Trust Deed on Block C-1 so long as one hundred percent (100%) of estimated costs to complete
the hotel are fully funded by the construction loan and/or Developer funds, as determined by the
construction lender and confidentially reviewed by a financial consultant identified by the City
Manager, and (b) that concurrently with the recordation of a construction loan for the
commercial and office facilities (and related improvements) on Block A, City will release and
reconvey the lien of the Trust Deed on Block A so long as one hundred percent (100%) of
estimated costs to complete such facilities are fully funded by the construction loan and/or
Developer funds, as determined by the construction lender and confidentially reviewed by a
financial consultant identified by the City Manager.
2. For purposes of development, City agrees (a) that Developer may convey title to
Block C-1 to a new development entity so long as such new entity is controlled by Developer or
current members of Developer and agrees to assume and comply with any and all obligations of
Developer to City with respect to Block C-1, and (b)that Developer may convey title to Block A
to a new development entity so long as such new entity is controlled by Developer or current
members of Developer and agrees to assume and comply with any and all obligations of
Developer to City with respect to Block A.
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3. This Agreement represents the entire agreement and understanding of the parties
with respect to the matters contained herein, and there are no other agreements or understandings
with respect to such matters other than as set forth herein.
4. Each party agrees to and shall do and perform such other and further acts and
execute and deliver such other and further documents as may be reasonably necessary, expedient
or convenient to effectuate the intents and purposes hereof.
5. Whenever this Agreement contemplates approval or consent of any party, such
approval or consent shall not be unreasonably withheld, conditioned or delayed.
6. Each of the recitals herein and exhibits attached hereto are incorporated into and
made a part of this Agreement.
- 7. In the event of any dispute, arbitration or litigation arising out of this Agreement,
or the breach or performance of it, the prevailing party shall be entitled, in addition to injunctive
relief and damages as appropriate,to an award of reasonable attorney's fees and costs.
8. Each party ,represents and warrants to the other that such party has full right,
power and authority to execute and enter into this Agreement, and perform in accordance with
the terms hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement and made
it effective as and when specified above.
DEVELOPER: PALM SPRINGS PROMENADE, LLC
A California limited liability company
By:
Title:
Dated:
CITY: CITY OF PALM SPRINGS
A California municipal corporation and charter city
By:
Title:
Dated:
ATTEST:
City Clerk
APPROVED AS
TO LEGAL FORM:
City Attorney
11/7/20147:44AM Page 2
4,• •"r•,, First American Title Company
�• •q 500 South Palm Canyon,Suite
210 Palm Springs,CA 92264
760)469-8895
. - Fax-(866)302-6799
PURCHASE AGREEMENT AND ESCROW INSTRUCTIONS
To: First American Title Company, Escrow Holder File No.: RIW-4765919(SE)
Sharon Elkins, Escrow Officer Date: November 10, 2014
Estimated Closing Date: December09, 2014
Purchase Price: $5,300,000.00
Re: Block E of Palm Springs Promenade, Palm Springs,CA 92262("Property")
City of Palm Springs("Buyer")
Palm Springs Promenade,LLC("Seller")
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This escrow has been opened pursuant to Section 3 that certain agreement entitled "Fourth Amendment to
Project Financing Agreement"("PFA 4')dated as of October 30, 2014 by and between the above Buyer and
Seller (collectively the "Parties") on the Property described above and as further legally described in the
Preliminary Report issued in connection with this escrow.The terms and conditions of PFA 4 and the terms of this
Purchase Agreement are incorporated herein by reference and also constitute instructions to Escrow Holder.
The Buyer and Seller agree that Block E, as shown on the attached Site Plan (Exhibit"A'J, shall be conveyed by
Seller and acquired by Buyer in fee and without condition or limitation except as expressly provided in the
Instructions and as provided under PFA 4. Block E shall be improved, used, operated, and maintained in
accordance with the following:
A. Escrow. An escrow ("Escrow') has been be opened with a local escrow office of First
American Title Insurance Company ("Escrow Holder), and this Purchase Agreement and Escrow Instructions
("Instructions') and any additional instructions reasonably requested by Escrow Holder, shall be promptly
executed and delivered by the parties. The close of Escrow shall occur within 10 days of the execution and
delivery of the Instructions and Block E will then be conveyed by seller to Buyer in accordance with the terms
hereof and the terms of the Project Financing Agreement.
B. Value. Prior to execution of Instructions, City requested and received a Valuation Report
dated January 17, 2014,which valued Block E at the sum of$5,300,000. City will pay $5,300,000 for Block E and
such sum will be delivered at close of Escrow. Said funds shall be used to create additional parking to the extent
provided in Section C below.
C. Additional Parking. Developer agrees that all funds received per Section B above, will be
deposited directly into the Private Improvement account and be released, upon authorizations from the IFC Agent
and will be used to construct approximately 188+/- new underground parking spaces below surface areas of
Blocks B and B-1, Market Street, and Andreas Street and 108+/- parking spaces below surface areas of Block F.
Such new spaces are depicted on Exhibit B attached hereto and will be constructed approximately concurrently
with streets to be constructed adjacent to and in the vicinity of Blocks B and F. Deposit of the funds per Section B
above into the Private Escrow Improvement account and use of such funds as provided in this Section C will
satisfy the Developer's obligatlon to deposit $2,000,000.00 into the Private Escrow Account as required under
Section 2.8(6)of the PFA.
D. Use of Parking. The new parking spaces below Blocks B and B-1 as described above will
be designated for use by occupants of development constructed within Blocks A, B, B-1, C, C-1, D, F, and G, and
the guests and invitees of the occupants of such development, and the new parking spaces below Block F will be
designated for use by occupants of development constructed within Block F and the guests and invitees of the
occupants of such development, j
Page 1 of 3 p
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E. Title. Prior to execution of the Instructions, City received a current Preliminary Title
Report("P WJ issued by First American Title Insurance Company ("Title Company) covering Block E, and copies
of all recorded exceptions to title shown by the PTR. City has approved the PTR and all such exceptions, and will
take title subject to such exceptions and standard title insurance policy exclusions and exceptions. At close of
Escrow, City will receive a CLTA title insurance policy issued by the Title Company in the face amount of
$5,300,000.
F. Amendment of Grant Deed for Parking. The Parties agree to amend the Grant Deed
conveying the Parking Facilities as provided in the PFA to allow the City Council with the discretion to (1) prohibit
parking in the underground parking area in Block A and all parking on and within the city owned parking areas
south of Block F between the hours of 3:00 am and 6:00 am as the City Council may designate by resolution and
(2) place time limit restrictions on parking in the Parking Facilities (but not including the top Floor of the parking
structure)after consulting with Seller.
G. Cooperation on Fees and Costs. Pursuant to Section 2 of the PFA, the Buyer agreed to
waive all development mitigation fees associated with the Public Improvements, provide credits or waivers of
development mitigation fees of the Buyer to the extent of prior improvements and facilities had been previously
developed, and "cooperate with" Seller "in efforts to mitigate and reduce" development mitigation fees.
Consistent with the general intent of these provisions, the Parties agree to the following allocation and sharing of
fees and related costs associated with the development of the DFP area:
Fees Paid to Outside Agencies/Funds Established by Ordinance
Seller: City:
School Fee 100% 0%
TUMF Fee 100% 0%
Drainage Fee 100% 0%
Plan Check 100% 0%
Sewer Inspection 100% 0%
Sewer Main 100% 0%
Sewer Agreement 100% 0%
Sewer Connection Fee 100% 0%
Public Arts Fee 50%* 50%
Park(Quimby) Fee 50% 50%
Buyer and Seller Litigation Expenses 50% 50%
Fees Paid to City for Entitlement Services
Building Permit 50% 50%
Plan Check 50% 50%
SMIP Tax 50% 50%
I Microfilm 50% 50% !
Permit Issuance 50% 50%
Construction Tax 50% 50% i
Dbl. Fee/RMW/Mist, 50% 50%
Construction Permit 50% 50%
Misc. Fling Fee 50% 50%
Planning Fee 50% 50%
Technology Fee 50% 50%
General Plan Maint. Fee 50% 50%
*Developer can receive credit for public improvements approved as part of the project
It is also anticipated that additional change orders for Public Improvements will be required during the period
such improvements are constructed and for which the Buyer will be obligated. In the event the City Manager
determines that it is reasonable or appropriate to waive, offset, or otherwise pay all or a portion of any of Seller's
fee obligations as provided in this Section G, any amounts waived, offset, or otherwise authorized by City
Manager shall be deemed a dollar for dollar credit and offset to any amounts owed to Seller for any change order
to the Public Improvements for which the Buyer may otherwise be obligated to pay. O�
First American Title Company File No.:RIW-4765919(SE)
H. The provisions of Sections 3A, 3B, 3C, and 10 of the Fourth Amendment of the PFA are l
deemed amended and superseded by the provisions of these Instructions including Sections A, B, C, D, and E
above. The Buyer and Seller ratify the provisions of Sections 3D, 3E, 3F, 3G, and 3H of PFA 4 and confirm that
such provisions remain in full force and effect.
First American Title Company will act as Escrow Holder for the Parties pursuant to the applicable section of
said Agreement subject to the following term and conditions.
General Provisions: Escrow Holder's duties and responsibilities in this escrow are subject to the General
Provisions. To the extent that the Instructions are inconsistent with the General Provisions, the terms of the
General Provisions shall control as to Escrow Holder's rights,duties, and responsibilities.
Additional Grant Deed Terms: The Grant Deed shall include the following language (in addition to usual and
customary terms and terms appropriate and consistent with the Instructions): "This Grant Deed and the
conveyance herein is subject to terms and provisions of Sections 3.13, 3.E, 35 and 3.H contained in an agreement
entitled "Fourth Amendment to PFA" between the City of Palm Springs, a Califomia municipal corporation and
charter city, and Palm Springs Promenade, LLC, a California limited liability company, which agreement is on file
in the records of the City Clerk of the City of Palm Springs."
Clarification of Purchase Agreement Terms:
Sales Price:The sales price of the Real Property is $5,300,000.00
Opening Date:The opening of escrow date has been determined to be November 6, 2014. .
Close of Escrow:The estimated settlement date is December 29, 2014.
Title Approval: Buyer acknowledges receipt of a copy of the Preliminary Report Issued In connection with this
escrow for the above-referenced property and containing the legal description of the property which is the
subject of this escrow.
Buyer approves the contemplated policy form and acknowledges that the Policy of Title Insurance shall be subject
to all exceptions shown on the Preliminary Report except:
1. Delinquent general and special taxes, assessments and/or bonds
2. Voluntary and/or involuntary liens created by Seller or prior owner not assumed by Buyer
3. Deed(s) of Trust not assumed by Buyer
4. The following items which are specifically disapproved by Buyer:
Buyer initial(s):
(Buyer: please list above the numbers of the spedfic exceptions on the preliminary
report which are disapproved and initial.)
The policy shall also be subject to any deeds of trust and or other voluntary liens executed by Buyer as part of
this escrow and general and special taxes and assessments which as of the date of close of escrow are a lien
not yet due and payable.
Buyer further acknowledges that First American Title Company has not examined the public records for any
involuntary liens that may be of record against the undersigned Buyer(s).
Buyer understands that, should there be any involuntary liens recorded against the Buyer at the time Buyer
acquires title, these involuntary liens will become liens on the title to the property.
Estimated Settlement Statement: Upon Close of Escrow, Escrow Holder is instructed to disburse in
accordance with the executed "Estimated Settlement Statement" without further Instruction from the parties
hereto.
Local Transfer Forms: Buyer and Seller acknowledge that local ordinances may require the completion and
submittal of certain certificates or applications, orrage2of3 physical modifications such as sewer laterals, in
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connection
with the transfer of ownership of the subject property, referred to herein as"Local Transfer Obligations." Buyer .
and Seller further acknowledge and agree that the completion or submittal of these Local Transfer Obligations
shall be handled outside of escrow and are not the responsibility of Escrow Holder. Specifically, Escrow Holder is
not responsible for: 1) identifying or advising regarding any such requirements, 2) furnishing, completing or
submitting forms, or 3) paying or disbursing any funds in connection therewith. Buyer and Seller authorize and
instruct Escrow Holder to close this escrow without inquiry or concern regarding the status of any Local Transfer
Obligations.
In the event Escrow Holder agrees to receive any forms for forwarding to other parties or governmental agencies,
Escrow Holder will be performing such actions as an accommodation only, and shall have no responsibility for the
sufficiency or completeness of the documents, nor any responsibility for follow up or correction of any
deficiencies. If Escrow Holder has transmitted any type of filing fee on behalf of the parties by its check and the
check remains un-negotiated and becomes stale-dated or is returned to Escrow Holder by the agency, the parties
instruct Escrow Holder to void its check and disburse the funds to the Buyer. Any related forms that are returned
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to Escrow Holder shall also be forwarded to the Buyer.
Satisfaction of Executory Terms: Pursuant to the Purchase Agreement, the consummation of the escrow is
subject to satisfaction of certain executory terms and provisions which are not the responsibility of Escrow Holder,
The Parties shall be solely responsible for determining such satisfaction and the Buyer and Seller execution of the
Estimated Closing Statement, deposit of Grant Deed and funds for closing with Escrow Holder shall be deemed
that such executory terms have been fully satisfied or are otherwise waived (as to Escrow Holder's duties) and
Escrow Holder's receipt of the above described documents shall constitute a direction to Escrow Holder to dose
the Escrow. This provision Is for the benefit of Escrow Holder only and not to be deemed a waiver or release of
contractual obligations between the principals hereto.
Funds Held Fee: In the event that funds remain in escrow for any reason more than 90 days after the close of
escrow, or if escrow has not closed 90 days after the estimated dosing date set forth in the existing escrow
instructions to Escrow Holder ("Dormancy Period"), Escrow Holder will make reasonable efforts to notify the
parties regarding same. If funds remain in escrow beyond the Dormancy Period, a monthly "funds held fee" of
$25.00 shall accrue for each month or fraction of a month thereafter that the funds, or any portion thereof,
remain in escrow. Escrow Holder is instructed to deduct the monthly funds. held fee directly from the funds held In
escrow on a monthly or other periodic basis (i.e. quarterly, semi-annually, etc.). The parties agree to pay these
sums to compensate Escrow Holder for administering, monitoring, accounting, reminders and other notifications
and processing of the funds so held in accordance with this provision.
Document/Funds Delivery:After close of escrow,all documents, funds and statements are to be sent to the
undersigned at the addresses provided to Escrow Holder.
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First American Title Company File No.:RIW-4765919(SE
SELLER:
Palm Springs Promenade, LLC, a California
limited liability company
By: John Wessman, Managing Partner
Forwarding
Address:
Phone:
BUYER:
City of Palm Springs, a California municipal
corporation and charter city
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By: David H. Ready, City Manager
Forwarding
Address:
Phone:
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Page 3 of 3 r A
-� First American Title Company
500 South Palm Canyon Drive
Palm Springs CA 92264
(760)469-8895
INCOMING DOMESTIC WIRE INSTRUCTIONS
PAYABLE TO: First American Title Company
BANK: First American Trust, FSB
ADDRESS: 5 First American Way, Santa Ana, CA 92707
ACCOUNT NO: 3119580000
ROUTING NUMBER: 122241255
PLEASE REFERENCE THE FOLLOWING:
PROPERTY: Block E of Palm Springs Promenade, Palm Springs, CA 92262
FILE NUMBER: RIW-4765919 (SE)
PLEASE USE THE ABOVE INFORMATION WHEN WIRING FUNDS TO First American
Title Company. FUNDS MUST BE WIRED FROM A BANK WITHIN THE UNITED
STATES. PLEASE NOTIFY YOUR ESCROW OFFICER AT (760)469-8895 OR
selkins@firstam.com WHEN YOU HAVE TRANSMITTED YOUR WIRE.
IF YOUR FUNDS ARE BEING WIRED FROM A NON-U.S. BANK,ADDITIONAL CHARGES MAY APPLY.
PLEASE CONTACT YOUR ESCROW OFFICER/CLOSER FOR INTERNATIONAL WIRING INSTRUCTIONS.
AN ACH TRANSFER CANNOT BE ACCEPTED FOR CLOSING. BECAUSE TT IS NOT THE SAME AS A WIRE
AND REQUIRES ADDITIONAL TIME FOR CLEARANCE.
FIRST AMERICAN TRUST CONTACT INFO: Banking Services 1-877-600-9473
ALL WIRES WILL BE RETURNED IF THE FILE NUMBER
AND/OR PROPERTY REFERENCE ARE NOT INCLUDED
With cyber crimes on the increase, it is important to be ever vigilant. If you receive an e-mail or any
other communication that appears to be generated from a First American employee that contains new,
revised or altered bank wire instructions, consider it suspect and call our office at a number you trust.
Our bank wire instructions seldom change.
Robert Burkholder
From: John Raymond
Sent: Tuesday, December 23, 2014 3:31 PM
To: Geoffrey Kiehl
Cc: Robert Burkholder
Subject: FW: File Number-4765919-Address-Block E of Palm Springs Promenade (Email Ref=973410922)
Attachments: Wire Inst-Domestic Incoming.pdf
From: fast(aletitledocs.com [mailto:fast(&etitledocs.com] On Behalf Of selkinsCalfirstam.com
Sent: Tuesday, December 23, 2014 3:30 PM
To: John Raymond
Subject: File Number-4765919-Address-Block E of Palm Springs Promenade (Email Ref=973410922)
Hi. Here are wire instructions per our discussion.
File No.: RIW 4765919
Buyer: City of Palm Springs
Seller: Palm Springs Promenade, LLC
Property Address: Block E of Palm Springs Promenade, Palm Springs, CA 92262
You can download Acrobat Reader at http://www.adobe.com/products/acrobat/readstep2.htmi
Sharon Elkins
Sr. Escrow Officer
First American Title Company
Phone: 760-469-8895 Ext.
Fax: 866-302-6799 Ext.
This message contains confidential information intended only for the use of the intended recipient(s) and may contain information that
is privileged. If you are not the intended recipient, or the person responsible for delivering it to the intended recipient, you are hereby
notified that reading, disseminating, distributing or copying this message is strictly prohibited.
If you have received this message by mistake, plea se immediately notify us by replying to the message and delete the original
message immediately thereafter.
This message may contain confidential or proprietary information intended only for the use of the
addressee(s) named above or may contain information that is legally privileged. If you are
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FAFLD
2
Robert Burkholder
From: John Raymond
Sent: Tuesday, December 23, 2014 3:33 PM
To: Geoffrey Kiehl
Cc: Robert Burkholder
Subject: amount of wire
$5,309.000.00
John Raymond
Director of Community& Economic Development
City of Palm Springs, California
John.Ravmond(o)oalmsoringsca.gov
Office: 760.323.8228
Cell: 760.902.1903
_ 1
FirstAmerican Tide Company
500 South Palm Canyon Drive,Suite 210,Palm Springs CA 92264
Office Phone:(760)469-8888 Office Fax:
Estimated Settlement Statement
Property: Block E of Palm Springs Promenade,Palm Flle No: RIW-4765919
Springs,CA 92262 Officer. Sharon Elkins/SE
Estimated Settlement Date: 12/29/2014
Disbursement Date:
Print Date: 1211812014,5:00 PM
Buyer: City of Palm Springs
Address: 3200 East Tahquitz Canyon Way,Palm Springs,CA 92262
Seller. Palm Springs Promenade,LLC
Address: 555 South Sunrise Way#200,Palm Springs,CA 92264
Buyer Charge I Buyer Credit Char a Description Seller Char 9 Seller Credit
Consideration:
5,300,000.00 Total Consideration 5,300,000.00
Prorations:
15.813.25 County Tax APN 513-560-00207101/14 to 12/29/14 15,813.25
$15944.30/semi
1.707.82 Property Texas APN 613-660-015 07/01114 to 12/29/14 1,707.82
$1721.97/semi
6,154.62 Property Taxes APN 513.56"23 07/01/14 to 12/29/14 6,154.62
$6205.63/Semi
TitlelEscrow Charges to:
150.00 Title Inspection Fee to First American Title Company-
NCS
3.180.00 Owner Policy to First American Title Company-NCS
3,200.00 Escrow Fee to First American Title Company
Disbursements Paid:
1,773.79 Funds held for audit to be refunded at dosing
15,944.30 Tax Installment Amount to Riverside County Tax
Collector
1,721.97 Tax installment Amount to Riverside County Tax
Collector
6,205.63 Tax Installment Amount to Riverside County Tax
Collector
5.308 500.00 Cash(X From)( To)Buyer
Cash XTo From Seller 5,276,324.31
5,332175.69 6,332,175.69 Totals 5,300,060.00 5,300,000.00
Page 1 of 1
SUNGARD PENTAMATION - FUND ACCOUNTING MANAGER PAGE NUMBER: 24
DATE: 11/09/15 CITY OF PALM SPRINGS AUDIT21
TIME: 11:52:02 EXPENDITURE AUDIT TRAIL
SELECTION CRITERIA: orgn.fund.'260' 1.1
ACCOUNTING PERIODS: 1/15 THRU 13/15
SORTED BY: FUND,FUNCTION,DEPARTMENT,IST SUBTOTAL,2ND SUBTOTAL,ACCOUNT
TOTALED ON: FUND,FUNCTION,DEPARTMENT,IST SUBTOTAL
PAGE BREAKS ON: FUND,FUNCTION,DEPARTMENT
FUND - 260 - MEASURE J CAPITAL FUND
DEPARTMENT - 4500 - MEASURE J CAPITAL PROJ
ACCOUNT CUMULATIVE
DATE T/C ENCUMBRANC REFERENCE VENDOR BUDGET EXPENDITURES ENCUMBRANCES DESCRIPTION BALANCE
59436 LIBRARY PLANNING (cont'd)
07/01/14 13-1 125,294.00 CONT APPR BUD ADJ 7/1-2
07/01/14 11-1 .00 POSTED FROM BUDGET SYSTEM
TOTAL LIBRARY PLANNING 125,294.00 .00 .00 125,294.00
59437 PROPERTY ACQUISITION .00 .00 .00 BEGINNING BALANCE
07/01/14 13-1 1,000,000.00 CONT APPR BUD ADJ 7/1-2
07/01/14 11-1 1,000,000.00 POSTED FROM BUDGET SYSTEM
07/01/14 17-1 00140445-01 P03531 CHEVRON ENERGY S .00 ENC CARRY FRWRD-G0140445
07/01/14 18-2 00140445-01 P03531 CHEVRON ENERGY S .00 CHEVRON BUYDOWN RETROFIT
10/21/14 25-4 10/21-2B 1,000,000.00 BUD ADJ 10/21-2B
12/22/14 25-6 12 2,200,000.00 BUD ADJ 12/22-8B
12/30/14 20-6 733 FIRST AMERICAN T 5,200,000.00 - - .00 PUR BLOCK E PS PROM
TOTAL PROPERTY ACQUISIT N 5,200,000.00 5,200,000.00 .00 .00
Q0
59438 JO JEBBE DHUC GYM A/C .00 '� ��0 .00 BEGINNING BALANCE
07/01/14 13-1 149,676.42 CONT APPR BUD ADJ 7/1-2
07/01/14 13-1 21,950.00 PRIOR YR ENCUM-G0141009
07/01/14 11-1 .00 POSTED FROM BUDGET SYSTEM
07/01/14 17-1 00141009-01 10403 URRUTIA ARCHITEC 21,950.00 ENC CARRY FRWRD-G0141009
07/25/14 19-1 PR072514 62.62 260
O8/08/14 19-2 PROB0814 62.62 260
09/11/14 21-3 00141009-01 1073665 10403 URRUTIA ARCHITEC 8,466.05 -8,466.05 14-1009 #2
10/16/14 21-4 00141009-01 1074422 10403 URRUTIA ARCHITEC 4,485.00 -4,485.00 CONSULTING SERVICES
10/31/14 19-4 PR103114 123.26 260
12/04/14 21-6 00141009-01 1075385 10403 URRUTIA ARCHITEC 3,500.00 -3,500.00 CONSULTING SERVICES
12/11/14 21-6 00141009-01 1075595 10403 URRUTIA ARCHITEC 1,498.45 -1,498.45 DHUC-HVAC
01/15/15 21-7 00141009-01 1076242 10403 URRUTIA ARCHITEC 1,801.81 -1,801.81 CONSULTING SERVICES
01/20/15 19-7 1/20-2C 127.00 REC ARCHITCIRL APPL FEES
02/17/15 25-8 2/17-1B 66,483.73 BUD ADJ 2/17-1B
02/19/15 21-8 1076923 98009 RIVERSIDE COUNTY 50.00 .00 NOTICE OF EXEMPT FEE
03/03/15 18-9 001SO071-01 P2130 PLANIT REPROGRAP -410.25 BPO FY 14-15
03/03/15 18-9 00150071-01 P2130 PLANIT REPROGRAP 410.25 BPO FY 14-15
03/03/15 18-9 00150071-01 P2130 PLANIT REPROGRAP 410.25 BPO FY 14-15
03/05/15 21-9 00141009-01 1077167 10403 URRUTIA ARCHITEC 1,345.01 -1,345.01 14-1009 #6
03/12/15 21-9 00150071-01 1077265 P2130 PLANIT REPROGRAP 410.25 -410.25 15-0071 #3
• 04/16/15 21-10 1078021 00190 DESERT SUN PUBLI 738.48 .00 CIT050
04/16/15 21-10 00141009-01 1078084 10403 URRUTIA ARCHITEC 271.72 -271.72 DSRT HIGHLAND UNITY
• THERE IS A NOTE ASSOCIATED WITH THIS TRANSACTION
SUNGARD PENTAMATION - FUND ACCOUNTING MANAGER PAGE NUMBER: 1
DATE: 12/30/14 CITY OF PALM SPRINGS BMANCK31
TIME: 09:39:57 BATCH MANUAL CHECK EDIT LIST
RECORD ENTERED ENCUMBRANCE P/F DEPARTMENT ACCOUNT VENDOR VENDOR NAME 1099 SALES TAX AMOUNT
PERIOD ENTRY BY CASH ACCT PROJECT ACCOUNT INVOICE DESCRIPTION CHECK DATE HOLD USE TAX DISCOUNT
BATCH: RB123014 CHECK NO: W123014
235 12/30/14 4500 59437 98733 FIRST AMERICAN TITLE COMPAN N .00 5200000.00
6/15 robertb 11010 RIW-4765919 PUR BLOCK E PS PROM 12/30/2014 Y .00 .00
236 12/30/14 4500 59464 98733 FIRST AMERICAN TITLE COMPAN N .00 109000.00
6/15 robertb 11010 RIW-4765919 PUR BLOCK E PS PROM 12/30/2014 Y .00 .00
TOTAL CHECK W123014 5309000.00
TOTAL BATCH 5309000.00
TOTAL REPORT 5309000.00
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CITY COUNCIL STAFF REPORT
DATE: SEPTEMBER 17, 2014 UNFINISHED BUSINESS
SUBJECT: APPROVE (1) AMENDMENT NO. 4 TO THE PROJECT FINANCING
AGREEMENT WITH PALM SPRINGS PROMENADE, LLC TO PROVIDE
FOR VARIOUS CHANGES TO THE SITE PLAN, ADJUSTMENTS TO
THE PERFORMANCE SCHEDULE AND DEVELOPER OBLIGATIONS,
AND THE PERMANENT ACQUISITION BY THE CITY OF THE EVENT
AREA SPACE FOR THE REDEVELOPMENT OF CERTAIN REAL
PROPERTY AT 123 NORTH PALM CANYON DRIVE, AND (2) AN
EASEMENT FOR THE BENEFIT OF BLOCK A FOR AN ELEVATOR
AND FOUR PARKING SPACES
FROM: David H. Ready, City Manager
BY: Community i£ Economic Development Department
SUMMARY
On September 29, 2011, the City and Palm Springs Promenade, LLC ("Developer')
entered into a Project Financing Agreement ("PFA"), which related to financing,
development, redevelopment, creation, and refurbishment of Public and Private
Improvements in the Desert Fashion Plaza area of downtown Palm Springs.
The Parties have entered three previous PFA Amendments. This Amendment to the
PFA approves certain changes to the Site Plan, clarifies the parties' understanding of
the effects of various lawsuits on the Project schedule, provides for the City to acquire
the land designated for the Event Area in order to keep it under permanent City control,
allows the Developer to build additional underground parking spaces at the Site, and
provides for other changes related to the Developer's responsibilities regarding public
restrooms, and changes certain terms necessary for project financing.
RECOMMENDATION:
1. Approve Amendment No. 4 to the Project Financing Agreement No. 6144 with
Palm Springs Promenade, LLC; and
ITEM NO. �
a
City Council Staff Report
September 17, 2014—Page 2
PFA Amendment No.4
2. Approve an Easement for the benefit of Block B for an elevator and four parking
spaces;
3. Authorize the City Manager to execute all documents to effectuate the
Amendment. A6144.
Background
This report summarizes the previous amendments made to the PFA and describes the
changes proposed in PFA Amendment No. 4, and describes a proposed easement for
certain tenants within Block A.
Amendment No. 1.
The first PFA Amendment was a technical change related to the deposit of funds at
Project Escrow Closing, and reconciling that with the issuance of the bonds.
Amendment No. 2.
In October, 2012, the second amendment updated the original Project Site Plan and
Project Description. In the Updated Site Plan, certain Blocks were re-designated and
accurately described the evolved project. In addition, as part of the Amendment, the
Parties approved some changes in land uses, including the creation of an Event Area
on (re-lettered) Block E, which replaced the movie theatres included in the PFA.
The Event Area was intended to be operated as such for a period of at least ten years
and cooperation with each other would occur to retain the services of a person or entity
("Event Coordinator") to schedule, stage, or otherwise provide special events. At the
end of the ten year period, the Developer could, subject to normal City design and
entitlement approvals, develop and use Block E for any purposes authorized by the
Specific Plan, which would mean the City would only have the use of the Event Area for
10 years.
Amendment No. 2 also included a change in the Project Description to allow for the
proposed Kimpton Hotel in Block C-1, a 160+/- room high end, first class hotel.
The Amendment also changed how Block H-2 was to be prioritized. H-2 is one of the
parcels acquired by the City under the PFA that could be used for a future Art Museum
expansion. Under the Amendment, the portions of Block H-2 which do not include
subsurface parking facilities are to be redeveloped as follows: (i) demolish and remove
all existing improvements (i.e., concrete surface areas, walls, pavers, landscaping, etc.),
(ii) level the site with fill dirt, (iii) install new landscaping (grass, shrubs, trees, irrigation),
and (iv) install (on immediately adjacent areas for the benefit of subsurface parking) a
new stairwell and mechanical exhaust ventilation system. Such work authorized under
02
City Council Staff Report
September 17, 2014—Page 3
PFA Amendment No.4
Amendment #2, is currently being undertaken by Developer at the City's cost but
without any profit or markup.
Amendment No. 3.
The third PFA Amendment further updated the Site Plan's boundary of Block C and
Block C-1, for the purpose of designing the corner block.
Amendment No. 4.
PFA Amendment No. 4 (PFA 4) covers a number of project-related issues. These
include:
Site Plan and Tentative Parcel Map
The Fourth Amendment includes a revised Site Plan as indicated on Exhibit A. and a
tentative parcel map ("TPM") as indicated on Exhibit B. PFA 4 changes Block A from
being remodeled to being replaced with two new buildings, Block A and new Block A-1.
A 30 foot wide pedestrian "paseo" will be created, aligned to match on the south with
proposed Market Street and on the north with an existing entry into the adjacent Hyatt
Hotel when Block A-1 is developed. The Hyatt Hotel entry is anticipated to be changed
from an interior (currently, a roll-up door between two buildings) to an exterior entry that
will give the hotel a new presence in the project.
Block A calls for a 3 story structure, well within Speck Plan height parameters, and will
contain retail and restaurant uses at ground level, with office uses on the second and
third floors. The Developer has submitted revised plans for Block A, while Block A-1 will
be designed and developed as part of a future Phase 2 of the Project.
In terms of Blocks B and B-1, the original Site Plan contemplated layout configurations,
land uses, and improvements that have evolved over time as well. Updated concepts
for Block B call for a combined one-storyttwo-story structure which will contain retail and
restaurant uses. Block B is in the design approval process, and Block B-1 will be
designed and developed as part of future phase 2.
Block E, originally planned for 65,000-70,000 square feet of commercial space plus 165
upper level residential units, is now planned for 50,530 square feet of public open
space.
Effect of Lawsuits
In PFA 4 the Parties acknowledge that the three lawsuits against the project constituted
"force majeure" occurrences. On January 29, 2014, the City entered into a Settlement
03
City Council Staff Report
September 17, 2014—Page 4
PFA Amendment No, 4
Agreement of any and all claims relating to Block C and the Kimpton Hotel, The Parties
therefore have amended times for performance by the Developer in accordance with the
PFA from February 19, 2013, to July 8, 2014, for Blocks A and B. The Amendment
also limits future "force majeure" occurrences on blocks where all required discretionary
entitlements have been approved.
Event Area
PFA 4 reaffirms Block E as public open space, which shall be conveyed by Developer
and acquired by City, for $4,500,000 based on a valuation report of $5,300,000
performed by CBRE Appraisal Services. The CBRE value is based upon the existing
Specific Plan density and land use allowance, and the entitlement of the parcel for
65,000-70,000 square feet of commercial space plus 165 upper level residential units.
The City would pay the agreed discounted price of.$4,500,000 at close of escrow. City
shall operate and maintain the Block E property as public open space. With the addition
of new open space in the project, including the 50,530 square foot Event Area, Blocks
A, B, C, and E will now feature 147,094 square feet of open space vs. the 53,432
square feet called for in the Specific Plan, a 275% increase over what was originally
planned.
The City shall own, operate and maintain the Block E property as public open space,
and as an active and vibrant area for staging community and public events such as
concerts, movies, farmers markets, public gatherings, or community events. The City
shall retain the right to contract with a third party ("Event Coordinator') to operate the
Event Center. Such management could extend to SMG, the operator of the Palm
Springs Convention Center, and PS Resorts, the group of local hoteliers charged with
creating special events in Palm Springs could participate as well. In terms of the design
of the Event Area, the City has received offers from Stiletto Entertainment (Barry
Manilow's company) and Goldenvoice to assist with the design of the center.
Given the proximity to future residential and hotel development on the Site, the
Developer shall convey to City a noise easement over the Project for music, fireworks,
etc., between the hours of 8:00 a.m. and 10:30 p.m. The City, as the owner of Block E
would convey to the Developer for the benefit of Blocks C-1 and F, a similar noise
easement.
Use of Block E and Ability of City to Dispose of Block E
The City will commit to operate Block E as public open space for staging community
and public events until at least January 1, 2044, or when O'Donnell Golf Club ceases
operation, whichever comes first. At any time thereafter, the City may choose to sell or
lease Block E for any use or purpose, however, before the City can sell or lease Block
E, it must offer to sell or lease it back to the Developer on the same terms and
conditions offered by a third party. Although the City will likely maintain the area as an
04
I
City Council Staff Report
September 17,2014—Page 5
PFA Amendment No.4
i
open Event Space, this provision is included to give future City Councils' flexibility
should circumstances change or warrant a modification of use.
Additional On-Site Parkinq
The Developer has agreed that funds received from the sale of Block E shall be
I deposited in the Private Improvement Escrow Fund and will be used solely to construct
approximately 200+/- new underground parking spaces below surface areas of Blocks B
and B-1, Market Street, and Andreas Street. Such new spaces are depicted on Exhibit
C, and will be constructed concurrently with the new streets in the project area. The
public benefit of the construction of the private spaces is that it increases the total
amount of parking on site by about 20%. This is important especially as the City begins
to program the Event Center, which will be a large parking user.
Public Restrooms
The Original PFA called for the construction of Public Restrooms in the project. This
Amendment clarifies the Developer's requirement to design and construct in Block C
public restroom facilities fully compliant with all applicable laws including physical
disability access requirements. Moreover, the Developer will convey an easement for
the use and operation of these facilities to the City, which will also require City
maintenance. I
In addition, the Developer will install restroom utility services in the streets adjoining the
Event Area and provide connections stubbed 5 feet into Block E at locations designated
by the City. It is anticipated that the City will then at its cost construct such restroom
facilities as it deems necessary or appropriate to accommodate activities at the Event
Area.
Performance Trust Deed.
As part of the Original PFA, the Developer provided the City with a Performance Trust
Deed to secure its obligations to complete the Private Improvements. In order to
accommodate funding of construction loans for the project, the City will incrementally re-
convey the Performance Trust Deed on a parcel by parcel basis concurrently with the
recordation of any loan to fund Private Improvements on each parcel, as long as 100%
of the costs to complete the improvements are fully funded by the construction loan
and/or Developer funds as determined by the lender and reviewed by The City Manager
or the City Manager's designee. Developer has agreed that expenditures from any
such loan will require prior approval of the IFC Agent, as contemplated by original
requirements of the PFA.
05
City Council Staff Report
September 17,2014—Page 6
PFA Amendment No. 4
Amendment of Grant Deed for Parkina.
PFA #4 also allows the Parties to agree to amend the Grant Deed conveying the
Parking Facilities allowing the City discretion to prohibit overnight parking (as the City
Council may designate by resolution) in Block A between the hours of 3:00 a.m. and
6:00 a.m. The City may determine the location of the restricted parking.
Easement for Benefit of Block A
Although the City owns the underground parking areas below Block A, the Developer is
negotiating a lease for a major tenant for a portion of that Block. This tenant has a need
for an elevator, storage, and four parking spaces. The proposed easement will be over
the City parking area in Block A for this purpose. The developer will install additional
parking spaces to essentially make up for the loss of spaces provided under this
easement.
Fiscal Analysis
The Event Area land acquisition ($4,500,000) and subsequent construction (TBD —
anticipated in the $1,000,000 range) under PFA #4 will be funded through a
combination of Measure J Land Acquisition Funds (set aside through previously
approved multi-year budget allocations) and from the Quimby-Parks Fund.
Measure J specifically allows for the acquisition and development of parks and
parkland, and the Quimby Fund — a developer fee — was created to allow cities to
acquire and develop parks, recreational and open spaces.
? a�oh� .
David H. Ready, Ci ayi ond, Drrec or of
mmun' � Economic Development
Douglas C. Holland
City Attorney
Attachments:
1. Revised Site Plan (Exhibit A)
2. Tentative Parcel Map ("TPM") (ExhibitS)
3. Revised Underground Parking Plan (ExhibitC)
4. Fourth Amendment to Project Financing Agreement(PFA 4)
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FOURTH AMENDMENT TO PFA
This FOURTH AMENDMENT TO PFA ("Fourth Amendment"), made effective
as of the date fully executed, is by and between the City of Palm Springs, a California
municipal corporation and charter city ("City"), and Palm Springs Promenade, LLC, a
California limited liability company("Developer"),with reference to the following:
RECITALS
i
A. PFA. On or about September 29, 2011, the City and Developer entered
into a Project Financing Agreement ("PFA"), which related to financing, development,
redevelopment, creation, and refurbishment of Public and Private Improvements in the
DFP Area of downtown Palm Springs. (The PFA, and all documents attached to and/or
executed pursuant to the PFA, are incorporated herein by reference as though set forth in i
full, and defined terms therein shall, unless otherwise indicated, have the same meanings
herein.)
B. First, Second and Third Amendments. Prior to the effective date hereof,
City and Developer entered into a First Amendment to PFA ("First Amendment', a
Second Amendment to PEA ("Second Amendment"), and a Third Amendment to PFA
("Third Amendment"). (Said First, Second and Third Amendments are incorporated
herein by reference as though set forth in full, and defined terms therein shall, unless
otherwise indicated,have the same meanings herein.)
C. Fourth Amendment. The parties now desire to enter into this Fourth
Amendment.
NOW,THEREFORE, IT IS AGREED AS FOLLOWS:
1. Site Plan and TPM. As of the effective date of this Fourth Amendment,
the Site Plan for the DFP Area is as indicated on Exhibit A attached hereto, and the
tentative parcel map ("TPM") for the DFP Area is as indicated on Exhibit B attached
hereto. The parties agree that, upon request by Developer made at any time before
recordation of a final map pursuant to the TPM,the DFP Property may be legally divided
and functionally organized, in a manner generally consistent with divisions, functions and
conditions of approval applicable to the TPM, by way of lot line adjustments, easement
grants and reservations, and certificates of compliance, rather than by way of recordation
of a final map for the TPM.
I
2. Force Majeure Occurrences. With respect to the Project, the parties
acknowledge that (a) three lawsuits have been commenced, (b) two of said lawsuits have
been dismissed, and (c) one lawsuit, i.e., a Petition for Writ of Mandamus filed by
Advocates for Better Community Development ("ABCD"), Riverside Superior Court
Case No. RIC 1302004, received a Court issued Denial of Petition on April 4, 2014. The
last day ABCD could appeal the Denial of Petition was July 8, 2014 and such appeal was
dfppCafourlhamenddch09.11.2014 1
�.
not filed. The parties acknowledge and agree that such lawsuits constituted force majeure
occurrences and suspended and tolled times for performance by Developer from February
19, 2013 to July 8, 2014. The parties further acknowledge and agree that on or about
January 29, 2014, the City entered into a Settlement Agreement with ABCD pursuant to
which, among other things, ABCD filed a dismissal with prejudice in the Superior Court
Action of any and all claims relating to Block C and the hotel (i.e., the Kimpton Hotel
previously approved by the City on Block C-1). The Parties acknowledge that multiple
discretionary entitlements have been approved by the City and additional discretionary
entitlements will be submitted to the City for review and approval. The Parties agree
that any litigation filed against any portion of the Project for which all discretionary
entitlements have not been approved shall not constitute force majeure occurrences and
suspend and toll times for performance by Developer for any Block within the Project
for which all discretionary permits have been approved or has been otherwise approved
and vested. For the purposes of this Section 2, the term "discretionary entitlement" does
not include ministerial permits
3. Block E. The parties agree that Block E, as shown on the attached Site
Plan, shall be conveyed by Developer and acquired by City in fee and without condition
or limitation except as expressly provided in this Section 3 of this Amendment No. 4.
Block E shall be improved, used, operated, and maintained in accordance with the
following:
A. Escrow. Within 10 days after execution of this Fourth
Amendment, an escrow ("Escrow") shall be opened with a local escrow office of First
American Title Insurance Company ("Escrow Holder"), and Escrow instructions,
consistent with this Fourth Amendment and as reasonably requested by.Escrow Holder,
shall be promptly executed and delivered by the parties. The close of Escrow shall occur
within 30 days after opening, and Block E will then be conveyed by Developer to City in
accordance with the terms hereof.
B. Value. Prior to execution of this Fourth Amendment, City
requested and received a Valuation Report dated January 17, 2014,which valued Block E
at the sum of $5,300,000. Notwithstanding such Valuation Report, City will pay
$4,500,000 for Block E and such sum will be delivered at close of Escrow. Said funds
shall be used to create additional parking to the extent provided in Section 3.13(i)below.
(1) Additional Parking. Developer agrees that all funds
received per Section 3.13 above, will be deposited directly into the Private Improvement
account and be released, upon authorizations from the IFC Agent and will be used to
construct approximately 188+/- new underground parking spaces below surface areas of
Blocks B and B-1, Market Street, and Andreas Street. Such new spaces are depicted on
Exhibit C attached hereto and will be constructed approximately concurrently with
streets to be constructed in the DFP Area. Deposit of the funds per Section 33 above
into the Private Escrow Improvement account and use of such funds as provided in this
paragraph will satisfy the Developer's obligation to deposit $2,000,000.00 into the
Private Escrow Account as required under Section 2.8(6)of the PFA.
1 �
dfppfafbunhamenddch09.11.2014 2
(2) Use of Parking. Such new parking spaces will be
designated for use by occupants of development constructed within Blocks A, B, B-1, C,
C-1, D, F,and G, and the guests and invitees of the occupants of such development.
C. Title. Prior to execution of this Fourth Amendment, City received
a current Preliminary Title Report ("PTR") issued by First American Title Insurance
Company ("Title Company") covering Block E, and copies of all recorded exceptions to
title shown by the PTR. City has approved the PTR and all such exceptions, and will i
take title subject to such exceptions and standard title insurance policy exclusions and
exceptions. At close of Escrow, City will receive a CLTA title insurance policy issued
by the Title Company in the face amount of$4,500,000.
D. Prove . Block E is currently in process of demolition and
removal of existing surface improvements. Subsequent thereto, Developer shall, at no
cost to the City, do the following: (i) complete public streets to be located adjacent to
Block E, i.e., Belardo Road and Main Street, with all appropriate utilities, including
without limitation, water, sewer, gas, telecommunications including cable television, and
electric utility services installed in said streets; (ii) install connections for such utility
services, stubbed five (5) feet into the Block E site at locations designated by the City
Manager; (iii) convey good and marketable title to Block E to City, consistent with the
provisions of Section 1.A(1)(b) of the Project Financing Agreement and this Amendment
No. 4; and (iv) deliver physical possession of Block E to City in the form of a clean dirt
site. Following such delivery, City shall, at its cost, install and maintain the following
within the Block E property: public restrooms, appropriate hardscape, landscape,
perimeter and ancillary lighting, security systems, irrigation systems, access
improvements, and electrical, sewer and audio-visual infrastructure. Such installation
work by City will be coordinated so as to be completed approximately concurrently with
completion of Private Improvements on Blocks C and/or C-1.
E. Use of Block E. Subsequent to installation of the Block E l
improvements pursuant to Subsection D above„ City shall, at its cost, own, operate and
maintain, in a neat, clean, attractive, safe, functional and first class condition, the Block E
property as public open space, and as an active and vibrant area for staging community
and public events such as concerts, movies, farmers markets, public gatherings, or
community events of any kind or nature on or adjacent to (per Section 3.F below) Block
E until at least January 1, 2044 or the date on which the O'Donnell Golf Club ceases
operations at the O'Donnell Golf Course, whichever event occurs first. At any time after
such date, the City may sell or lease Block E for any use or purpose as the City may
determine. Before City may sell or lease Block E to a third party or entity, or any
portion thereof as provided herein, the City shall first offer Block E or the portion
thereof, to Developer on the same terms and conditions as are offered by the third party.
Developer shall have 30 days during which to accept said offer. If Developer does not
accept said offer within said period, City shall be free to accept the third-parry offer. If
City does not enter into an agreement with the third party on said terms and conditions
and close the transaction within 120 days, City's right to sell or lease Block E or any
portion thereof to the third party shall expire and the procedure described in this Section
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shall again be applicable. Nothing herein shall prohibit or limit the right or the ability of
the City to contract with one or more third parties to perform any of the City's obligations
pursuant to the terms of this Section E, regardless of whether such agreement is
characterized as a contract for services, a lease, or any other label or description.
F. Noise Easement. Developer, as the owner of Blocks C-1 and F,
shall convey to City, and agents,employees, contractors, and designees, a noise easement
over the Project, including without limitation, for the staging, conducting, or allowing of
events as described above and the residual effects of such events, which may include loud
music, loudspeakers, fireworks, vibrations, debris, and other noise or activities, and
closure of all or parts of New Main Street between the westerly alignment of Belardo
Road and Museum Drive so long as such closure does not interfere with access to Parcel
5, which may disturb or disrupt any owner, tenant, or guest within the Project, between
the hours of 8:00 am and 10:30 pm. In the event the City ceases to use Block E for event
uses, the City shall terminate the noise easement provided in this Section. City, as the
owner of Block E, shall convey to Developer, as the owner of Blocks C-1 and F, a similar
noise easement.
G. Escrow Costs. Escrow costs and the premium for the title
insurance policy shall be paid for by City. Property taxes and assessments shall be
prorated between the parties at close of Escrow.
H. Prior Provisions. The provisions of Section 3 of the Second
Amendment relating to Block E are superseded and replaced by the provisions of Section
3 of this Fourth Amendment.
4. Blocks A and A-1. As leasing discussions have occurred, it became clear
that because of concerns about the height of proposed retail facilities, commercial tenants
were opposed to locating in the Block A building that was originally scheduled to remain
in place. As a result, and after examination of various alternatives, it has been
determined that such building should be replaced with two new buildings, one on Block
A and one on Block A-1, as depicted on the attached Site Plan. Updated concepts for
Block A call for a 3 story structure, well within Specific Plan height parameters, which
will contain retail and restaurant uses at ground level, with office and other uses on the
second and third floors. Developer intends to submit revised plans for Block A at or
prior to execution of this Fourth Amendment. Block A-1 will be designed and developed
as part of future phase 2. When Block A-1 is developed, a 30 foot wide pedestrian paseo
will be created, and it will be aligned to match on the south with proposed Market Street
and on the north with an existing entry into the adjacent Hyatt Hotel.
5. Blocks B and B-1. The Site Plan attached to the original PFA
contemplated layout configurations, land uses, improvements, etc., that have evolved and
changed over time as pursuit of the Project, and negotiations and discussions with
potential tenants, end users, design consultants and the City have occurred. Block E,
originally planned for 65,000-70,000 square feet of commercial space plus 165 upper
level residential units, is now planned for 50,530 square feet of public open space.
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Increasing open space (and completely eliminating Private Improvements) in Block E
logically justifies decreasing open space(and increasing Private Improvements)in nearby
Blocks B and B-1. Updated concepts for Block B call for a two story structure which
will contain retail and restaurant uses. Developer intends to submit revised plans for
Block B at or prior to execution of this Fourth Amendment. Block B-1 will be designed
and developed as part of future phase 2.
I
6. Block C Public Restrooms. Developer agrees, within a building in Block
C, to design and construct at its cost, at a location within such building reasonably
iacceptable to City, public restroom facilities for women consisting of at least four (4)
stalls and related wash basins and facilities, and public restroom facilities for men
consisting of at least two stalls, two urinals, and related wash basins and facilities, fully
compliant with all applicable laws,including without limitation physical disability access
requirements, and connect same to requisite utilities (water, power, sewer). Developer
shall convey easement or leasehold title to the restrooms space and improvements to the
City in a form acceptable to the City Manager, and thereafter and at all times the City
shall operate and maintain such facilities in a neat, clean, attractive, safe, functional, and
first class condition.
7. Maintenance of Streets. Sidewalks and Other Common Areas Within the
Project and DFP Area, once constructed and accepted (a) City shall, at its sole cost and
expense, operate and maintain all street and sidewalk areas and all landscaping and other
improvements, e.g., utilities normally maintained by City, located therein, and (b)
Developer shall, at its sole cost and expense, operate and maintain all other common
areas and improvements and landscaping therein, all as shown on Exhibit"D."
8. Performance Trust Deed. As part of the PFA, Developer provided City
with a Performance Trust Deed to secure obligations of Developer under the PFA to
complete Private Improvements. The parties acknowledge that plans for development of
the Project have evolved and changed over time, and that such changes, while
significantly improving the overall Project, greatly increase Developer costs. Such
increased costs can only be funded by substantial construction loans, and such loans can
only be obtained if the City releases the Performance Trust Deed. The City is strongly in
support of such changes and has agreed, and hereby does agree, to incrementally
reconvey the Performance Trust Deed on a parcel by parcel basis concurrently with the
recordation of any loan to fund all Private Improvements on each such parcel to be
constructed within the DFP Area, so long as 100% of the costs to complete such
improvements are fully funded by the construction loan and/or Developer funds as
determined by the lender and reviewed by the City Manager or the City Manager's
designee at a location in the Coachella Valley identified by the lender In turn, Developer
has agreed, and hereby does agree, that expenditures from any such loan will require
prior approval of the IFC Agent,as contemplated by original requirements of the PFA.
9. Development Agreement. At any time, upon request by Developer, City
and Developer shall exert and use commercially reasonable best efforts to prepare,
finalize, execute and implement a Development Agreement, as statutorily authorized by
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Section 65864, et seq. of the California Government Code, pursuant to which, among
other things, Developer will obtain vested rights to construct and operate, in whole or in
part, improvements contemplated for construction and development within areas covered
by the Project and the Specific Plan. In connection with any such efforts and
Development Agreement, City agrees to cooperate and proceed without charge, e.g.,
without imposition of fees, costs or exactions,upon or against Developer or the Project.
10. Amendment of Grant Deed for Parking. The Parties agree to amend the
Grant Deed conveying the Parking Facilities as provided in the PFA to allow the City
Council with the discretion to prohibit parking in the underground parking area in Block
A between the hours of 3:00 am and 6:00 am as the City Council may designate by
resolution.
11. Effect of Fourth Amendment. To the extent provided and/or contemplated ,
herein, the terms, provisions, covenants, and conditions of the PFA (and all documents
attached to and/or executed pursuant thereto) and the First, Second and Third
Amendments, are deemed amended and superseded. Except to the extent provided and/or
contemplated herein, the terms, provisions, covenants and conditions of the PFA (and all
documents attached to and/or executed pursuant thereto) and the First, Second and Third
Amendments,shall remain in effect as originally written.
12. Incorporation of Recitals and Exhibits. Each of the recitals set forth
herein and each of the exhibits and documents attached hereto are incorporated herein by
reference and made a part hereof as though set forth in full.
IN WITNESS WHEREOF, the parties hereto have executed this Fourth
Amendment and made it effective as and when specified above.
DEVELOPER: PALM SPRINGS PROMENADE,LLC
A California limited liability company
By:
Title:
Dated:
CITY: CITY OF PALM SPRINGS
A California municipal corporation and charter city
By:
Title:
Dated:
ATTEST:
City Clerk
APPROVED AS
TO LEGAL FORM:
City Attorney
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