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4<IFOAN tF0 CITY COUNCIL STAFF REPORT
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DATE: NOVEMBER 7, 2012 UNFINISHED BUSINESS
SUBJECT: AUTHORIZE CITY MANAGER TO EXECUTE A REVISED AMENDMENT NO.
2 TO THE PROJECT FINANCING AGREEMENT BETWEEN THE CITY AND
PALM SPRINGS PROMENADE, LLC WHICH INLCUDES A MODIFIED SITE
PLAN FROM THE SITE PLAN INITIALLY PRESENTED TO THE CITY
COUNCIL ON OCTOBER 17, 2012.
FROM: David H. Ready, City Manager
BY: Douglas Holland, City Attorney
SUMMARY
At its last meeting of October 17, 2012, the City Council approved Amendment No. 2 to the
Project Financing Agreement between the City and Palm Springs Promenade subject to
certain specific revisions that the Council directed to be included in the documents. All
changes directed by Council have been incorporated in the revised document. The
Developer, however, has requested two changes to the Site Plan (Exhibit "I") to Amendment
No. 2 that were not previously discussed with the City Council. The City Council is requested
to consider the revised Site Plan and provide appropriate direction to staff.
RECOMMENDATION:
Approve the proposed Amendment No. 2 to the Project Financing Agreement,
including the revised Site Plan (Exhibit "I"), authorize the City Manager to execute this
Amendment, and authorize the substitution of this copy of the Amendment to be
included as the controlling document referenced in Resolution No. 23238 approved by
the City Council on October 17, 2012.
ANALYSIS
At the Council's last meeting, the City Council approved Amendment No. 2 to the Project
Financing Agreement between the City and Palm Springs Promenade subject to specific
revisions to the Amendment and the Site Plan that was attached to the Amendment as
Exhibit "I". City staff received a revised Site Plan from the Developer. The revised Site Plan
is included as a part of the revised Amendment No. 2, which is attached to this staff report for
your information and review. (A marked up copy of the Amendment No. 2 showing the
ITEM NO.
City Council Staff Report November 7, 2012
Downtown Palm Springs Revitalization/Redevelopment Project Page 2 of 2
revisions this Office made consistent with the direction of Council is also attached for your
reference.) The changes in this site plan from the one you reviewed and approved at your
last meeting are:
1) a stated increase in the number of hotel rooms from 170+/- to 185+/- (See the
notation on the far right of the page under the caption "Phase One of Planning Area
#1) (This change has also been incorporated in Section 4 of the current draft of the
Amendment No. 2 to the PFA and in Exhibit II), and
2) a change in Block c-1 to include the area in blue south of Main Street and change
this area's description from "Future Development 1 to 3 story" to "Retail/Restaurant
Floor 1 Hotel — Flores 2,3 &4."
If the Council finds the revised Site Plan acceptable, staff recommends the Council approve
the Amendment No. 2 to the Project Financing Agreement attached to this staff report and
authorize the substitution of this Amendment for inclusion as the Amendment No. 2
referenced in Resolution No. 23238 approved by the City Council on October 17, 2012.
9-7—t1tX,011" —
Douglas Holland
City Attorney
David H. Ready, at ger
Attachments:
1. Revised Amendment No.2, Project Financing Agreement
2. "Redline" version of Revised Amendment No. 2
SECOND AMENDMENT TO PFA
This SECOND AMENDMENT TO PFA ("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
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
full, and all defined terms therein shall, unless otherwise indicated, have the same
meanings herein.
B. Progress to Date. Subsequent to entry into the PFA, substantial progress
has been made toward applicable goals and objectives set forth therein. Among other
things, the Acquisition Escrow has closed and the City has acquired title to the Public
Assets, the Bank of America building has been demolished, and Developer has nearly
finalized information and documentation sufficient to submit a tentative tract map and
major architectural application to the City.
C. Proposed Modifications. Experience gained in connection with progress
to date has lead the parties to recognize that plans for development and redevelopment of
the DFP Area will evolve and change over time as negotiations and discussions with
potential tenants, end users and design consultants occur and take place. By this
Amendment, the parties desire to approve proposed modifications to date, and
acknowledge and agree that pursuit of the Project requires flexibility and future
adjustments, changes and/or refinements will occur and be incorporated as the process
continues.
NOW, THEREFORE, IT IS AGREED AS FOLLOWS:
1. Updated Site Plan. The original Project Site Plan (attached to the PFA as
Exhibit A) is hereby replaced and superseded by the Updated Site Plan attached hereto as
Exhibit"I". In the Updated Site Plan,certain Blocks have been re-designated,as follows:
(a) former Block A-1 has been re-designated as Block A; (b) former Block A-2 has been
re-designated as Block B and divided into b and b-1; (c) former Block C has been divided
into blocks c and c-1; (d) former Block E has been re-designated as Block F; and (e)
former Block F has been re-designated as Block E. As of the effective date of this
Amendment,Block designations and references in the PFA, and in any and all documents
attached to and/or executed pursuant to the PFA, shall be deemed changed as indicated in
11Page
the Updated Site Plan, and herein. In addition, the parties approve proposed additional
and/or alternative development and/or land uses as indicated on the Updated Site Plan.
2. Updates to Project Description. The original Project Description(attached
to the PFA as Exhibit B) is amended and superseded to the extent provided in the
Updates to Project Description attached hereto as Exhibit"ll".
3. Event Area on Block E. The parties approve development and use of
Block E as an Event Area for a period of ten years from the effective date of this
Amendment. (For the purpose of this Section 3 of this Second Amendment, the term
"effective date of this Amendment" shall mean the date on which the reconstruction of
Blocks H-1 and H-2 as provided in Section 5 of this Second Amendment has been
completed and vehicular and pedestrian access has been provided to the Event Area from
Belardo and Museum Drive, all of which shall be completed no later than the completion
date of the Project as provided in the Project Financing Agreement.) Developer will
retain ownership of the Event Area, but City shall have an irrevocable right and license,
for and during said ten year period, to use the Event Area for scheduling, holding,
staging, allowing and/or conducting special events (and ancillary, related, and incidental
purposes). Developer will have similar rights, provided they do not conflict with events
and/or activities previously scheduled by City. City and Developer will cooperate with
each other and use reasonable and good faith to avoid conflicts. Developer shall have full
possession and control of the site, except when City is using it for event purposes. City
shall provide reasonable (not less than 48 hours) advance notice to Developer as to when
and for what purposes City will, from time to time, desire use of the site. Developer shall
pay all costs to get the site in a condition to receive event equipment as designated by
City, and City shall pay all costs of acquiring and installing such equipment. (For the
purpose of this Amendment, the phrase "to get the site in a condition to receive event
equipment" includes but is not limited to installation of all hardscape, landscape,
perimeter and ancillary lighting, security systems, irrigation systems, access
improvements and electrical, sewer, and audio-visual infrastructure.) During the ten year
term, Developer shall maintain the site (but not the equipment) and advance and pay all
costs reasonably incurred in connection therewith and the City will pay all costs to
maintain the event equipment in a fast class condition. The Parties will meet and confer
in good faith as provided herein on a plan for the use of the Event Area and the equitable
sharing of the maintenance costs required pursuant to this Agreement. Each party will be
responsible for obtaining insurance or self insurance coverage sufficient to protect its
own interests. During said ten year period, Block E will be used only as an Event Area.
Thereafter, Developer may, subject to receipt of normal City approvals, develop and use
Block E for any purposes authorized by the Museum Market Plaza Specific Plan
("Specific Plan).
4. Proposed Hotel in Block c-1. Consistent with the provisions of the
Specific Plan, Developer may pursue development and operation of a 185+/- room first
class new hotel in Block c-i. The Parties recognize that such a first class new hotel is
eligible for assistance pursuant to Chapter 5.26 (as amended) of the Palm Springs
Municipal Code ("Ordinance"). Accordingly, Developer intends to pursue development
2 1 P a g e
of the Palomar(or equivalent), a Kimpton Hotel, a high-end first class new hotel pursuant
to the Ordinance (as referenced in Section 5.26.040 as amended), and City agrees to fully
cooperate in that effort. City acknowledges that City Staff has done a preliminary review
of basic plans for the hotel and concluded that, if timely commenced, constructed and
operated as proposed, it will qualify with the provisions of the Ordinance relating to first
class new hotels. The parties further acknowledge that obtaining financing will require
execution of a formal written agreement that sets forth terms and conditions relative to
hotel development and operation, and implementation of the Ordinance in connection
therewith. The parties agree that if, despite commercially reasonable efforts by
Developer, Developer is unable to meet the requirements of the Ordinance, Developer
shall have an additional 6 months, beyond any existing completion deadline, to secure
entitlements, including building permits, for an alterative development plan for Block
c-land an additional 12 months after issuance of building permits to complete such
development in a manner authorized by the PFA.
5. Blocks H-1 and H-2 Reconstruction. With respect to the portions of Block
H-1 and Block H-2 which do not include subsurface parking facilities, the parties agree
that upon receipt of appropriate permits from City, Developer shall, at an additional cost
to the City but without any profit or mark-up to Developer, do or cause to be done the
following: (i) demolish and remove all existing improvements, i.e., concrete surface
areas, walls, pavers, landscaping, etc., (ii) replace such improvements and level the site
with compacted fill dirt, (iii) install new landscaping (grass, shrubs, trees, irrigation) and
appropriate hardscape, (iv) install (on immediately adjacent areas for the benefit of
subsurface parking) a new stairwell and mechanical exhaust ventilation system, as may
be required by Code, and (v) install any other improvements as reasonably necessary for
the completion of the Project.
6. Confirmation of Status. Each of the parties acknowledges, agrees and
confirms that the PFA, and each of the documents attached to and/or executed pursuant to
the PFA and approved by the City Council, are in good standing, and that neither party is
in any way in default with respect to same.
7. Cooperation. Each party agrees to do and perform such other and further
acts, and execute and deliver such other and further documents, as may be necessary,
expedient or appropriate to effectuate the intents and/or purposes hereof.
8. Effect of Amendment. To the extent provided and/or contemplated herein,
the PFA, and all documents attached to and/or executed pursuant to the PFA, are deemed
amended and superseded. Except to the extent provided and/or contemplated herein, the
PFA, and all documents attached to and/or executed pursuant to the PFA, shall remain in
effect as originally written.
9. Incorporation of Recitals and Exhibits. Each of the recitals set forth
herein and each of the Exhibits attached hereto are incorporated by reference and made a
part hereof as though set forth in full.
3 1 P a - e
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
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EXHIBIT II
TO
FIRST AMENDMENT TO PFA
UPDATES TO PROJECT DESCRIPTION
As of the effective date of the First Amendment to PFA("Amendment")to which
this Exhibit "Il" is attached, the original Project Description, as set forth on Exhibit "B"
attached to the PFA, is amended and superseded as and to the extent provided below.
l. Updated Site Plan. Any reference to Site Plan shall be deemed to refer to
the Updated Site Plan (Exhibit "P' attached to the Amendment), and future development
and uses within Block areas shall be consistent with designations set forth on the Updated
Site Plan.
2. Changed Block Designations. Block designations and references in the
Project Description shall be deemed changed as indicated on the Updated Site Plan.
3. Block F. Any reference to a movie theater in Block F shall be deemed
deleted, it being understood that pursuant to Section 2 of the Amendment, Block F will
be designated for use as an Event Area for a period of ten years, and thereafter may,
subject to receipt of normal City approvals, be developed for any purposes authorized by
the Specific Plan or PFA.
4. Block c-1. Subject to receipt of normal City approvals, Block c-1 may be
developed into a high end boutique hotel of approximately 185+/- rooms, and related and
incidental uses, in general accordance with preliminary height and massing plans
submitted to the City.
5. Bollards. Any reference to "electronically operated bollards" shall be
deemed changed to refer to"removable bollards".
SECOND AMENDMENT TO PFA
This SECOND AMENDMENT TO PFA ("Amendment"), made effective as of
the date fidly 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'j,with reference to the following:
RECITALS
A. Pam. 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
fidl, and all defined terms therein shall, unless otherwise indicated, have the same
meanings herein.
B. Progress to Date. Subsequent to entry into the PFA, substantial progress
has been made toward applicable goals and objectives set forth therein. Among other
things, the Acquisition Escrow has closed and the City has acquired title to the Public
Assets, the Bank of America building has been demolished, and Developer has nearly
finalized information and documentation sufficient to submit a tentative tract map and
major architectural application to the City.
C. Proposed Modifications. Experience gained in connection with progress
to date has lead the parties to recognize that plans for development and redevelopment of
the DFP Area will evolve and change over time as negotiations and discussions with
potential tenants, end users and design consultants occur and take place. By this
Amendment, the parties desire to approve proposed modifications to date, and
acknowledge and agree that pursuit of the Project requires flexibility and future
adjustments, changes and/or refinements will occur and be incorporated as the process
continues.
NOW,THEREFORE,IT IS AGREED AS FOLLOWS:
1. Updated Site Plan. The original Project Site Plan(attached to the PFA as Comment tDCHI]:A"Police Substation"should
Exhibit A is herebylaced and superseded b the Updated Site Plan attached hereto as be added to either Black A or B m the Site Ptan
replaced P Y P� exhibit.
Exhibit"P'. In the Updated Site Plan,certain Blocks have been re-designated,as follows:
(a)former Block A-1 has been re-designated as Block A;(b)former Block A-2 has been
re-designated as Block B and divided into b and b-1;(c)former Block C has been divided
into blocks c and c-1; (d) former Block E has been re-designated as Block F; and (e)
former Block F has been re-designated as Block E. As of the effective date of this
Amendment,Block designations and references in the PFA,and in any and all documents
attached to and/or executed pursuant to the PFA,shall be deemed changed as indicated in
I au
the Updated Site Plan, and herein. In addition, the parties approve proposed additional
and/or alternative development and/or land uses as indicated on the Updated Site Plan.
2. Updates to Project Description. The original Project Description(attached
to the PFA as Exhibit B) is amended and superseded to the extent provided in the
Updates to Project Description attached hereto as Exhibit"fl".
3. Event Area on Block E. The parties approve development and use of
Block E as an Event Area for a period of ten years from the effective date of this
Amendment (For the purpose of this Section 3 of this Second Amendment, the term
"effective date of this Amendment" shall mean the date on which the reconstruction of
Blocks H-1 and H-2 as provided in Section 5 of this Second Amendment has been
completed and vehicular and pedestrian access has been provided to the Event Area from
Belardo and Museum Drive,all of which shall be completed no later than the completion
date of the Project as provided in the Project Financing Agreement.) Developer will
retain ownership of the Event Area,but City shall have an irrevocable right and license,
for and during said ten year period, to use the Event Area for scheduling, holding,
staging, allowing and/or conducting special events(and ancillary,related,and incidental
purposes). Developer will have similar rights,provided they do not conflict with events
and/or activities previously scheduled by City. City and Developer will cooperate with
each other inand use reasonable and good faith to avoid conflicts. Developer shall have
fill possession and control of the site, except when City is using it for event purposes.
City shall provide reasonable(not less than 48 hours)advance notice to Developer as to
when and for what purposes City will, from time to time, desire use of the site.
Developer shall pay all costs to get the site in a condition to receive event equipment as
designated by City, and City shall pay all costs of acquiring and installing such
equipment.(For the purpose of this Amendment,the phrase"to get the site in a condition
to receive event equipment" includes but is not limited to installation of all hardscape,
landscape, perimeter and ancillary lighting, security systems, irrigation systems, access
improvements and electrical, sewer, and audio-visual infrastructure,; _-tease
efleets systems is be used in earjunetion with the staging of events and peFfeffflanres.
During the ten year term, Developer shall maintain the site (but not the equipment) and
advance and pay all costs reasonably incurred in connection therewith and the City will
pay all costs to maintain the event equipment in a first class condition. The Parties will
meet and confer in good faith as provided herein on a plan for the use of the Event Area
and the equitable sharing of the maintenance costs required pursuant to this Agreement.
Each party will be responsible for obtaining insurance or self insurance coverage
sufficient to protect its own interests. During said ten year period,Block E will be used
only as an Event Area. Thereafter, Developer may, subject to receipt of normal City
approvals,develop and use Block E for any purposes authorized by the Museum Market
Plaza Specific Plan("Specific Plan).
4. Proposed Hotel in Block c-l. Consistent with the provisions of the
Specific Plan,Developer may pursue development and operation of a 17085+/-room first
class new hotel in Block c-1. The Parties recognize that such a first class new hotel is
21Page
eligible for assistance pursuant to Chapter 5.26 (as amended) of the Palm Springs
Municipal Code("Ordinance"). Accordingly,Developer intends to pursue development
of the Palomar(or equivalent),a Kimpton Hotel,a high-end first class new hotel pursuant
to the Ordinance(as referenced in Section 526.040 as amended),and City agrees to filly
cooperate in that effort. City acknowledges that City Staff has done a preliminary review
of basic plans for the hotel and concluded that, if timely commenced, constructed and
operated as proposed,it will qualify with the provisions of the Ordinance relating to first
class new hotels. The parties further acknowledge that obtaining financing will require
execution of a formal written agreement that sets forth temrs and conditions relative to
hotel development and operation, and implementation of the Ordinance in connection
therewith. The parties agree that if, despite commercially reasonable efforts by
Developer, Developer is unable to meet the requirements of the Ordinance, Developer
shall have an additional 6 months, beyond any existing completion deadline, to secure
entitlements, including building permits, for an alternative development plan for Block
c-land an additional 12 months after issuance of building permits to complete such
development in a manner authorized by the PFA.
5. Blocks H-1 and H-2 Reconstruction. With respect to the portions of Block
H-1 and Block H-2 which do not include subsurface parking facilities,the parties agree
that upon receipt of appropriate permits from City,Developer shall,at an additional cost
to the City but without any profit or mark-up to Developer, do or cause to be done the
following: (i) demolish and remove all existing improvements, i.e., concrete surface
areas, walls, pavers, landscaping, etc., (ii) replace such improvements and level the site
with compacted fill dirt,(iii)install new landscaping(grass,shrubs,trees,irrigation)and
appropriate hardscape, (iv) install (on immediately adjacent areas for the benefit of
subsurface parking) a new stairwell and mechanical exhaust ventilation system, as may
be required by Code,and(v)install any other improvements as reasonably necessary for
the completion of the Project.
6. Confirmation of Status. Each of the parties acknowledges, agrees and
confirms that the PFA,and each of the documents attached to and/or executed pursuant to
the PFA and approved by the City Council,are in good standing,and that neither party is
in any way in default with respect to same.
7. Cooperation. Each party agrees to do and perform such other and further
acts, and execute and deliver such other and further documents, as may be necessary,
expedient or appropriate to effectuate the intents and/or purposes hereof.
8. Effect of Amendment. To the extent provided and/or contemplated herein,
the PFA,and all documents attached to and/or executed pursuant to the PFA,are deemed
amended and superseded. Except to the extent provided and/or contemplated herein,the
PFA,and all documents attached to and/or executed pursuant to the PFA,shall remain in
effect as originally written.
31Page
9. Incorporation of Recitals and Exhibits. Each of the recitals set forth
herein and each of the Exhibits attached hereto are incorporated by reference and made a
part hereof as though set forth in full.
41Pa�,e
