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HomeMy WebLinkAbout1/29/2003 - STAFF REPORTS DATE: JANUARY 29, 2003 TO: COMMUNITY REDEVELOPMENT AGENCY FROM: DIRECTOR OF COMMUNITY& ECONOMIC DEVELOPMENT APPROVAL OF A CONTRACT WITH ANDERSON & BRABANT, INC. OF ESCONDIDO FOR APPRAISAL SERVICES FOR THE EL DORADO MOBILE COUNTRY CLUB, 6000 EAST PALM CANYON DRIVE, IN AN AMOUNT NOT TO EXCEED $25,000 PLUS REIMBURSABLE EXPENSES RECOMMENDATION: It is recommended that the Agency approve a contract with Anderson & Brabant, Inc. of Escondido for appraisal services forthe El Dorado Mobile Country Club at 6000 East Palm Canyon Drive. The appraiser shall appraise the condominium value of each of the park's 367 spaces, as well as the fair market rent for each of the spaces. The fee shall consist of$17,500 for the condominium appraisal and $7,500 for the market rent appraisal. SUMMARY: The conversion of the El Dorado Mobile Country Club to condominium ownership is an issue of long standing for the City. Recently the owner announced that he would be demanding in excess of $90,000 for the various mobile home coach spaces in the park, based on appraised value. He has also begun the application to the California Department of Real Estate for approval of the conversion in anticipation of beginning to sell spaces this year. This, in turn, has produced an outcry from the residents of the park that such price is not justified and amounts to an effort to circumvent local rent control rather than a bona fide attempt to allow the park to convert to resident ownership. The office of the City Attorney and the Community&Economic Development Department have been considering the options available to the City, the Redevelopment Agency, and the park residents. The City has under consideration several options, including litigation and Agency financial assistance options. The starting place for considering any of the options is for the Agency to pursue an independent appraisal of the park to test the validity of the owner's appraisal; the Homeowners' appraiser arrived at a much lower per-space condominium value. While the Agency has a copy of the Homeowners'appraisal, it is only a summary appraisal, and would likely be given little weight in any court proceeding. An independent appraisal is essential if the Agency/City hopes to argue in a court that this conversion is a "sham." Conversely, should the appraiser arrive at a higher value, or one that approaches the owner's, it will give more credence to the conversion efforts. C M <klllw . The pool of mobile home park appraisers is quite small. The recommended appraiser,Jim Brabant, was embraced by the Homeowners during the settlement agreement process, and was also acceptable to a owner and his conversion counsel. Funds are available for the contract in the Low/ od Housing Fund. ohn . Raym n irect r of Co unity & Economic Development APPROVED: Executive Director ATTACHMENTS: 1. Contract for Engineering Services 2. Resolution CONTRACT SERVICES AGREEMENT FOR APPRAISAL SERVICES RELATED TO EL DORADO MOBILE COUNTRY CLUB THIS CONTRACT SERVICES AGREEMENT (herein "Agreement"), is made and entered into this _ day of , 2003, by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS (herein "Agency,") a public body, corporate and politic and Anderson & Brabant, Inc. a real estate appraisal firm having its offices at 353 West Ninth Avenue, Escondido, California, 92025-5032 (herein "Contractor"). The parties hereto agree as follows: 1.0 SERVICES OF CONTRACTOR 1.1 Scope of Services. In compliance with all terms and conditions of this Agreement, the Contractor shall provide those services specified in the "Scope of Services" attached hereto as Exhibit "A" and incorporated herein by this reference, which services may be referred to herein as the "services" or"work" hereunder. Contractor warrants that all services will be performed in a competent, professional and satisfactory manner in accordance with the standards prevalent in the industry, and all materials will be of good quality, fit for the purpose intended. 1.2 Contractor's Proposal. The Scope of Services shall include the Contractor's proposal or bid which shall be incorporated herein by this reference as though fully set forth herein. In the event of any inconsistency between the terms of such proposal and this Agreement, the terms of this Agreement shall govern. 1.3 Compliance with Law. All services rendered hereunder shall be provided in accordance with all ordinances, resolutions, statutes, rules, and regulations of the City and any Federal, State or local governmental agency having jurisdiction in effect at the time service is rendered. 1.4 Licenses, Permits. Fees and Assessments. Contractor shall obtain at its sole cost and expense such licenses, permits and approvals as may be required by law for the performance of the services required by this Agreement. Contractor shall have the sole obligation to pay for any fees, assessments and taxes, plus applicable penalties and interest, which may be imposed by law and arise from or are necessary for the Contractor's performance of the services required by this Agreement, and shall indemnify, defend and hold harmless Agency against any such fees, assessments, taxes penalties or interestjevied, assessed or imposed against Agency hereunder. 1.5 Familiarity with Work. By executing this Contract, Contractor warrants that Contractor(a) has thoroughly investigated and considered the scope of services to be performed, (b) has carefully considered how the services should be performed, and (c) fully understands the facilities, difficulties and restrictions attending performance of the services under this Agreement. If the services involve work upon any site, Contractor warrants that Contractor has or will investigate the site and is or will be fully acquainted with the conditions there existing, prior to commencement of services hereunder. Should the Contractor discover any latent or unknown conditions, which will materially affect the performance of the services hereunder, Contractor shall immediately inform the Agency of such fact and shall not proceed except at Contractor's 1 3 risk until written instructions are received from the Contract Officer. 1.6 Care of Work. The Contractor shall adopt reasonable methods during the life of the Agreement to furnish continuous protection to the work, and the equipment, materials, papers, documents, plans, studies and/or other components thereof to prevent losses or damages, and shall be responsible for all such damages, to persons or property, until acceptance of the work by Agency, except such losses or damages as may be caused by Agency's own negligence. 1.7 Further Responsibilities of Parties. Both parties agree to use reasonable care and diligence to perform their respective obligations under this Agreement. Both parties agree to act in good faith to execute all instruments, prepare all documents and take all actions as may be reasonably necessary to carry out the purposes of this Agreement. Unless hereafter specified, neither party shall be responsible for the service of the other. 1.8 Additional Services. Agency shall have the right at any time during the performance of the services, without invalidating this Agreement, to order extra work beyond that specified in the Scope of Services or make changes by altering, adding to or deducting from said work. No such extra work may be undertaken unless a written order is first given by the Contract Officer to the Contractor, incorporating therein any adjustment in (i) the Contract Sum, and/or (ii) the time to perform this Agreement, which said adjustments are subject to the written approval of the Contractor. Any increase in compensation of five percent (5%) or less of the Contract Sum, or in the time to perform of one hundred eighty (180) days or less may be approved by the Contract Officer. Any greater increases, taken either separately or cumulatively must be approved by the Agency Board. It is expressly understood by Contractor that the provisions of this Section shall not apply to services specifically set forth in the Scope of Services or reasonably contemplated therein. Contractor hereby acknowledges that it accepts the risk that the services to be provided pursuant to the Scope of Services may be more costly or time consuming than Contractor anticipates and that Contractor shall not be entitled to additional compensation therefore. 1.9 Special Requirements. Additional terms and conditions of this Agreement, if any, which are made a part hereof are set forth in the "Special Requirements" attached hereto as Exhibit "B" and incorporated herein by this reference. In the event of a conflict between the provisions of Exhibit B and any other provisions of this Agreement, the provisions of Exhibit B shall govern. 2.0 COMPENSATION 2.1 Contract Sum. For the services rendered pursuant to this Agreement, the Contractor shall be compensated in accordance with the "Schedule of Compensation" attached hereto as Exhibit "C" and incorporated herein by this reference, but not exceeding the maximum contract amount of Twenty Five Thousand Dollars ($25,000.00) (herein "Contract Sum"), plus reimbursable expenses, except as provided in Section 1.8. The method of compensation may include: (i) a lump sum payment upon completion, (ii) payment in accordance with the percentage of completion of the services, (iii) payment for time and materials based upon the Contractor's rates as specified in the Schedule of Compensation, but not exceeding the Contract Sum or (iv) such other methods as may be specified in the Schedule of Compensation. Compensation may include reimbursement for actual and necessary expenditures for reproduction costs, telephone expense, transportation expense, and performance bond, 2 Cra . <- approved by the Contract Officer in advance, and no other expenses and only if specified in the Schedule of Compensation. The Contract Sum shall include the attendance of Contractor at one meeting reasonably deemed necessary by the City; Contractor shall not be entitled to additional compensation for attending additional meetings as required by the City. 2.2 Method of Payment. Unless some other method of payment is specified in the Schedule of Compensation (Exhibit C), in any month in which Contractor wishes to receive payment, no later than the first (1st) working day of such month, Contractor shall submit to the Agency in the form approved by the City's Director of Finance, an invoice for services rendered prior to the date of the invoice. Except as provided in Section 7.3, Agency shall pay Contractor for all expenses stated thereon which are approved by City pursuant to this Agreement no later than the last working day of the month. 3.0 PERFORMANCE SCHEDULE 3.1 Time of Essence. Time is of the essence in the performance of this Agreement. 3.2 Schedule of Performance. Contractor shall commence the services pursuant to this Agreement upon receipt of a written notice to proceed and shall perform all services within the time period(s) established in the "Schedule of Performance" attached hereto as Exhibit "D", if any, and incorporated herein by this reference. When requested by the Contractor, extensions to the time period(s) specified in the Schedule of Performance may be approved in writing by the Contract Officer but not exceeding one hundred eighty (180) days cumulatively. 3.3 Force Maieure. The time period(s) specified in the Schedule of Performance for performance of the services rendered pursuant to this Agreement shall be extended because of any delays due to unforeseeable causes beyond the control and without the fault or negligence of the Contractor, including, but not restricted to, acts of God or of the public enemy, unusually severe weather, fires, earthquakes, floods, epidemics, quarantine restrictions, riots, strikes, freight embargoes, wars, litigation, and/or acts of any governmental agency, including the City, if the Contractor shall within ten (10) days of the commencement of such delay notify the Contract Officer in writing of the causes of the delay. The Contract Officer shall ascertain the facts and the extent of delay, and extend the time for performing the services for the period of the enforced delay when and if in the judgment of the Contract Officer such delay is justified. The Contract Officer's determination shall be final and conclusive upon the parties to this Agreement. In no event shall Contractor be entitled to recover damages against the Agency for any delay in the performance of this Agreement, however caused, Contractor's sole remedy being extension of the Agreement pursuant to this Section. 3.4 Term. Unless earlier terminated in accordance with Section 7.8 of this Agreement, this Agreement shall continue in full force and effect until completion of the services but not exceeding one (1) year from the date hereof, except as otherwise provided in the Schedule of Performance. 4.0 COORDINATION OF WORK 4.1 Representative of Contractor. The following principals of Contractor are hereby designated as being the principals and representatives of Contractor authorized to act in 3 �, ry1 . _ 5 its behalf with respect to the work specified herein and make all decisions in connection therewith: James Brabant, MAI It is expressly understood that the experience, knowledge, capability and reputation of the foregoing principals were a substantial inducement for Agency to enter into this Agreement. Therefore, the foregoing principals shall be responsible during the term of this Agreement for directing all activities of Contractor and devoting sufficient time to personally supervise the services hereunder. For purposes of this Agreement, the foregoing principals may not be replaced nor may their responsibilities be substantially reduced by Contractor without the express written approval of City. 4.2 Contract Officer. The Contract Officer shall be such person as may be designated by the Executive Director of Agency. It shall be the Contractors responsibility to assure that the Contract Officer is kept informed of the progress of the performance of the services and the Contractor shall refer any decisions which must be made by Agency to the Contract Officer. Unless otherwise specified herein, any approval of Agency required hereunder shall mean the approval of the Contract Officer. The Contract Officer shall have authority to sign all documents on behalf of the Agency required hereunder to carry out the terms of this Agreement. 4.3 Prohibition Against Subcontracting or Assignment. The experience, knowledge, capability and reputation of Contractor, its principals and employees were a substantial inducement for the Agency to enter into this Agreement. Therefore, Contractor shall not contract with any other entity to perform in whole or in part the services required hereunder without the express written approval of the Agency. In addition, neither this Agreement nor any interest herein may be transferred, assigned, conveyed, hypothecated or encumbered voluntarily or by operation of law, whether for the benefit of creditors or otherwise, without the prior written approval of Agency. Transfers restricted hereunder shall include the transfer to any person or group of persons acting in concert of more than twenty five percent (25%) of the present ownership and/or control of Contractor, taking all transfers into account on a cumulative basis. In the event of any such unapproved transfer, including any bankruptcy proceeding, this Agreement shall be void. No approved transfer shall release the Contractor or any surety of Contractor of any liability hereunder without the express consent of Agency. 4.4 Independent Contractor. Neither the Agency nor any of its employees shall have any control over the manner, mode or means by which Contractor, its agents or employees, perform the services required herein, except as otherwise set forth herein. Agency shall have no voice in the selection, discharge, supervision or control of Contractor's employees, servants, representatives or agents, or in fixing their number, compensation or hours of service. Contractor shall perform all services required herein as an independent contractor of Agency and shall remain at all times as to Agency a wholly independent contractor with only such obligations as are consistent with that role. Contractor shall not at any time or in any manner represent that it or any of its agents or employees are agents or employees of Agency. Agency shall not in any way or for any purpose become or be deemed to be a partner of Contractor in its business or otherwise or a joint venturer or a member of any joint enterprise with Contractor. 4 Cra -a - & 5.0 INSURANCE, INDEMNIFICATION AND BONDS 5.1 Insurance. The Contractor shall procure and maintain, at its sole cost and expense, in a form and content satisfactory to Agreement, during the entire term of this Agreement including any extension thereof, the following policies of insurance: (a) Comprehensive General Liability Insurance. A policy of comprehensive general liability insurance written on a per occurrence basis. If the Contract Sum is $25,000.00 or less, the policy of insurance shall be written in an amount not less than either (i) a combined single limit of $500,000.00 or (ii) bodily injury limits of $250,000.00 per person, $500,000.00 per occurrence and $500,000.00 products and completed operations and property damage limits of $100,000.00 per occurrence and $100,000.00 in the aggregate. If the Contract Sum is greater than $25,000.00 but less than or equal to $100,000.00, the policy of insurance shall be in an amount not less than either (i) a combined single limit of $1,000,000.00 for bodily injury, death and property damage or (ii) bodily injury limits of $500,000.00 per person, $1,000,000.00 per occurrence and $1,000,000.00 products and completed operations and property damage limits of $500,000.00 per occurrence and $500,000.00 in the aggregate. If the Contract Sum is greater than $100,000.00, the policy of insurance shall be in an amount not less than $5,000,000.00 combined single limit. (b) Worker's Compensation Insurance. A policy of worker's compensation insurance in such amount as will fully comply with the laws of the State of California and which shall indemnify, insure and provide legal defense for both the Contractor and the City against any loss, claim or damage arising from any injuries or occupational diseases occurring to any worker employed by or any persons retained by the Contractor in the course of carrying out the work or services contemplated in this Agreement. (c) Automotive Insurance. A policy of comprehensive automobile liability insurance written on a per occurrence basis in an amount not less than either (i) bodily injury liability limits of $250,000.00 per person and $500,000.00 per occurrence and property damage liability limits of $100,000.00 per occurrence and $250,000.00 in the aggregate or (ii) combined single limit liability of $500,000.00. Said policy shall include coverage for owned, non-owned, leased and hired cars. (d) Additional Insurance. Policies of such other insurance, including professional liability insurance, as may be required in the Special Requirements. All of the above policies of insurance shall be primary insurance and shall name the Agency, its officers, employees and agents as additional insureds. The insurer shall waive all rights of subrogation and contribution it may have against the Agency, its officers, employees and agents and their respective insurers. All of said policies of insurance shall provide that said insurance may not be amended or cancelled without providing thirty (30) days prior written notice by registered mail to the Agency. In the event any of said policies of insurance are cancelled, the Contractor shall, prior to the cancellation date, submit new evidence of insurance in conformance with this Section 5.1 to the Contract Officer. No work or services under this Agreement shall commence until the Contractor has provided the Agency with Certificates of Insurance or appropriate insurance binders evidencing the above insurance coverages and said Certificates of Insurance or binders are approved by the City Clerk. The Contractor agrees that the provisions of this Section 5.1 shall not be construed as 5 Cra ,a -7 limiting in any way the extent to which the Contractor may be held responsible for the payment of damages to any persons or property resulting from the Contractor's activities or the activities of any person or persons for which the Contractor is otherwise responsible. In the event the Contractor subcontracts any portion of the work in compliance with Section 4.3 of this Agreement, the contract between the Contractor and such subcontractor shall require the subcontractor to maintain the same policies of insurance that the Contractor is required to maintain pursuant to this Section 5.1. 5.2 Indemnification. Contractor agrees to indemnify the Agency, its officers, agents and employees against, and will hold and save them and each of them harmless from, any and all actions, suits, claims, damages to persons or property, losses, costs, penalties, obligations, errors, omissions or liabilities, (herein "claims or liabilities") that may be asserted or claimed by any person, firm or entity arising out of or in connection with the negligent performance of the work, operations or activities of Contractor, its agents, employees, subcontractors, or invitees, provided for herein, or arising from the negligent acts or omissions of Contractor hereunder, or arising from Contractor's negligent performance of or failure to perform any term, provision covenant or condition of this Agreement, whether or not there is concurrent passive or active negligence on the part of the Agency, its officers, agents or employees but excluding such claims or liabilities arising from the sole negligence or willful misconduct of the Agency, its officers, agents or employees, who are directly responsible to the Agency, and in connection therewith: (a) Contractor will defend any action or actions filed in connection with any of said claims or liabilities and will pay all costs and expenses, including legal costs and attorneys' fees incurred in connection therewith; (b) Contractor will promptly pay any judgment rendered against the Agency, its officers, agents or employees for any such claims or liabilities arising out of or in connection with the negligent performance of or failure to perform such work, operations or activities of Contractor hereunder; and Contractor agrees to save and hold the Agency, its officers, agents, and employees harmless therefrom; (c) In the event the Agency, its officers, agents or employees is made a party to any action or proceeding filed or prosecuted against Contractor for such damages or other claims arising out of or in connection with the negligent performance of or failure to perform the work, operation or activities of Contractor hereunder, Contractor agrees to pay to the Agency, its officers, agents or employees, any and all costs and expenses incurred by the Agency, its officers, agents or employees in such action or proceeding, including but not limited to, legal costs and attorneys' fees. 5.3 Performance Bond. Concurrently with execution of this Agreement, Contractor shall deliver to Agency a performance bond in the sum of the amount of this Agreement, in the form provided by the City Clerk, which secures the faithful performance of this Agreement, unless such requirement is waived by the Contract Officer. The bond shall contain the original notarized signature of an authorized officer of the surety and affixed thereto shall be a certified and current copy of his power of attorney. The bond shall be unconditional and remain in force during the entire term of the Agreement and shall be null and void only if the Contractor promptly and faithfully performs all terms and conditions of this Agreement. 6 ` ��� .8 5.4 Sufficiency of Insurer or Surety. Insurance or bonds required by this Agreement shall be satisfactory only if issued by companies qualified to do business in California, rated "A" or better in the most recent edition of Best Rating Guide, The Key Rating Guide or in the Federal Register, and only if they are of a financial category Class VII or better, unless such requirements are waived by the Risk Manager of the City due to unique circumstances. In the event the Risk Manager of City ("Risk Manager") determines that the work or services to be performed under this Agreement creates an increased or decreased risk of loss to the Agency, the Contractor agrees that the minimum limits of the insurance policies and the performance bond required by this Section 5 may be changed accordingly upon receipt of written notice from the Risk Manager; provided that the Contractor shall have the right to appeal a determination of increased coverage by the Risk Manager to the Agency Board within 10 days of receipt of notice from the Risk Manager. 6.0 RECORDS AND REPORTS 6.1 Reports. Contractor shall periodically prepare and submit to the Contract Officer such reports concerning the performance of the services required by this Agreement as the Contract Officer shall require. 6.2 Records. Contractor shall keep, and require subcontractors to keep, such books and records as shall be necessary to perform the services required by this Agreement and enable the Contract Officer to evaluate the performance of such services. The Contract Officer shall have full and free access to such books and records at all times during normal business hours of City, including the right to inspect, copy, audit and make records and transcripts from such records. Such records shall be maintained for a period of three (3) years following completion of the services hereunder, and the Agency shall have access to such records in the event any audit is required. 6.3 Ownership of Documents. All drawings, specifications, reports, records, documents and other materials prepared by Contractor, its employees, subcontractors and agents in the performance of this Agreement shall be the property of Agency and shall be delivered to Agency upon request of the Contract Officer or upon the termination of this Agreement, and Contractor shall have no claim for further employment or additional compensation as a result of the exercise by Agency of its full rights of ownership of the documents and materials hereunder. Any use of such completed documents for other projects and/or use of uncompleted documents without specific written authorization by the Contractor will be at the Agency's sole risk and without liability to Contractor, and the Agency shall indemnify the Contractor for all damages resulting therefrom. Contractor may retain copies of such documents for its own use. Contractor shall have an unrestricted right to use the concepts embodied therein. All subcontractors shall provide for assignment to Agency of any documents or materials prepared by them, and in the event Contractor fails to secure such assignment, Contractor shall indemnify Agency for all damages resulting therefrom. 6.4 Release of Documents. The drawings, specifications, reports, records, documents and other materials prepared by Contractor in the performance of services under this Agreement shall not be released publicly without the prior written approval of the Contract Officer. 7.0 ENFORCEMENT OF AGREEMENT 7.1 California Law. This Agreement shall be construed and interpreted both as to validity and to performance of the parties in accordance with the laws of the State of California. Legal actions concerning any dispute, claim or matter arising out of or in relation to this Agreement shall be instituted in the Superior Court of the County of Riverside, State of California, or any other appropriate court in such county, and Contractor covenants and agrees to submit to the personal jurisdiction of such court in the event of such action. 7.2 Disputes. In the event of any dispute arising under this Agreement, the injured party shall notify the injuring party in writing of its contentions by submitting a claim therefor. The injured party shall continue performing its obligations hereunder so long as the injuring party commences to cure such default within ten (10) days of service of such notice and completes the cure of such default within forty-five (45) days after service of the notice, or such longer period as may be permitted by the injured party; provided that if the default is an immediate danger to the health, safety and general welfare, such immediate action may be necessary. Compliance with the provisions of this Section shall be a condition precedent to termination of this Agreement for cause and to any legal action, and such compliance shall not be a waiver of any party's right to take legal action in the event that the dispute is not cured, provided that nothing herein shall limit Agency's or the Contractor's right to terminate this Agreement without cause pursuant to Section 7.8. 7.3 Retention of Funds. Contractor hereby authorizes Agency to deduct from any amount payable to Contractor (whether or not arising out of this Agreement) (i) any amounts the payment of which may be in dispute hereunder or which are necessary to compensate Agency for any losses, costs, liabilities, or damages suffered by Agency, and (ii) all amounts for which Agency may be liable to third parties, by reason of Contractor's acts or omissions in performing or failing to perform Contractor's obligation under this Agreement. In the event that any claim is made by a third party, the amount or validity of which is disputed by Contractor, or any indebtedness shall exist which shall appear to be the basis for a claim of lien, Agency may withhold from any payment due, without liability for interest because of such withholding, an amount sufficient to cover such claim. The failure of Agency to exercise such right to deduct or to withhold shall not, however, affect the obligations of the Contractor to insure, indemnify, and protect Agency as elsewhere provided herein. 7.4 Waiver. No delay or omission in the exercise of any right or remedy by a nondefaulting party on any default shall impair such right or remedy or be construed as a waiver. A party's consent to or approval of any act by the other party requiring the party's consent or approval shall not be deemed to waive or render unnecessary the other party's consent to or approval of any subsequent act. Any waiver by either party of any default must be in writing and shall not be a waiver of any other default concerning the same or any other provision of this Agreement. 7.5 Rights and Remedies are Cumulative. Except with respect to rights and remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the parties are cumulative and the exercise by either party of one or more of such rights or remedies shall not preclude the exercise by it, at the same or different times, of any other rights or remedies for the same default or any other default by the other party. 7.6 Legal Action. In addition to any other rights or remedies, either party may 8 e ��. -C - /U take legal action, in law or in equity, to cure, correct or remedy any default, to recover damages for any default, to compel specific performance of this Agreement, to obtain declaratory or injunctive relief, or to obtain any other remedy consistent with the purposes of this Agreement. 7.7 Liquidated Damages. Since the determination of actual damages for any delay in performance of this Agreement would be extremely difficult or impractical to determine in the event of a breach of this Agreement, the Contractor and its sureties shall be liable for and shall pay to the Agency the sum of_zero ($0.00) dollars_ as liquidated damages for each working day of delay in the performance of any service required hereunder, as specified in the Schedule of Performance (Exhibit "D"). The Agency may withhold from any monies payable on account of services performed by the Contractor any accrued liquidated damages. 7.8 Termination Prior to Expiration Of Term. This Section shall govern any termination of this Agreement except as specifically provided in the following Section for termination for cause. The Agency reserves the right to terminate this Agreement at any time, with or without cause, upon thirty (30) days' written notice to Contractor, except that where termination is due to the fault of the Contractor, the period of notice may be such shorter time as may be determined by the Contract Officer. In addition, the Contractor reserves the right to terminate this Agreement at any time upon, with or without cause, upon sixty (60) days' written notice to Agency, except that where termination is due to the fault of the Agency, the period of notice may be such shorter time as the Contractor may determine. Upon receipt of any notice of, termination, Contractor shall immediately cease all services hereunder except such as may be specifically approved by the Contract Officer. Contractor shall be entitled to compensation for all services rendered prior to the effective date of the notice of termination and for any services authorized by the Contract Officer thereafter in accordance with the Schedule of Compensation (Exhibit "C") or such as may be approved by the Contract Officer, except as provided in Section 7.3. In the event of termination without cause pursuant to this Section, the terminating party need not provide non-terminating party with the opportunity to cure pursuant to Section 7.2. 7.9 Termination for Default of Contractor. If termination is due to the failure of the Contractor to fulfill its obligations under this Agreement, Agency may, after compliance with the provisions of Section 7.2, take over the work and prosecute the same to completion by contract or otherwise, and the Contractor shall be liable to the extent that the total cost for completion of the services required hereunder exceeds the compensation herein stipulated (provided that the Agency shall use reasonable efforts to mitigate such damages), and Agency may withhold any payments to the Contractor for the purpose of setoff or partial payment of the amounts owed the Agency as previously stated. 7.10 Attorneys' Fees. If either party to this Agreement is required to initiate or defend or made a party to any action or proceeding in any way connected with this Agreement, the prevailing party in such action or proceeding, in addition to any other relief which may be granted, whether legal or equitable, shall be entitled to reasonable attorney's fees. Attorney's fees shall include attorney's fees on any appeal, and in addition a party entitled to attorney's fees shall be entitled to all other reasonable costs for investigating such action, taking depositions and discovery and all other necessary costs the court allows which are incurred in such litigation. All such fees shall be deemed to have accrued on commencement of such action and shall be enforceable whether or not such action is prosecuted to judgment. Cra - Q- � � 9 8.0 AGENCY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION 8.1 Non-liability of Agency Officers and Employees. No officer or employee of the Agency shall be personally liable to the Contractor, or any successor in interest, in the event of any default or breach by the Agency or for any amount which may become due to the Contractor or to its successor, or for breach of any obligation of the terms of this Agreement. 8.2 Conflict of Interest. No officer or employee of the Agency shall have any financial interest, direct or indirect, in this Agreement nor shall any such officer or employee participate in any decision relating to the Agreement which effects his financial interest or the financial interest of any corporation, partnership or association in which he is, directly or indirectly, interested, in violation of any State statute or regulation. The Contractor warrants that it has not paid or given and will not pay or give any third party any money or other consideration for obtaining this Agreement. 8.3 Covenant Against Discrimination. Contractor covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, or ancestry in the performance of this Agreement. Contractor shall take affirmative action to insure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, marital status, national origin, or ancestry. 9.0 MISCELLANEOUS PROVISIONS 9.1 Notice. Any notice, demand, request, document, consent, approval, or communication either party desires or is required to give to the other party or any other person shall be in writing and either served personally or sent by prepaid, first-class mail, in the case of the Agency, to the City Executive Director and to the attention of the Contract Officer, THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, P.O. Box 2743, Palm Springs, California 92263, and in the case of the Contractor, to the person at the address designated on the execution page of this Agreement. Either party may change its address by notifying the other party of the change of address in writing. Notice shall be deemed communicated at the time personally delivered or in seventy-two (72) hours from the time of mailing if mailed as provided in this Section. 9.2 Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either party by reason of the authorship of this Agreement or any other rule of construction which might otherwise apply. 9.3 Integration; Amendment. It is understood that there are no oral agreements between the parties hereto affecting this Agreement and this Agreement supersedes and cancels any and all previous negotiations, arrangements, agreements and understandings, if any, between the parties, and none shall be used to interpret this Agreement. This Agreement may be amended at any time by the mutual consent of the parties by an instrument in writing. 9.4 Severability. In the event that any one or more of the phrases, sentences, clauses, paragraphs, or sections contained in this Agreement shall be declared invalid or unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity 10 C nor w Z or unenforceability shall not effect any of the remaining phrases, sentences, clauses, paragraphs, or sections of this Agreement which are hereby declared as severable and shall be interpreted to carry out the intent of the parties hereunder unless the invalid provision is so material that its invalidity deprives either party of the basic benefit of their bargain or renders this Agreement meaningless. 9.5 Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which said party is bound. C� -� • �3 IN WITNESS WHEREOF, the parties have executed and entered into this Agreement as of the date first written above. ATTEST: THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic By: By: Assistant Secretary Executive Director APPROVED AS TO FORM: Agency Counsel CONTRACTOR: By: Name: Title: Address: ATTACHMENTS: EXHIBIT "A" SCOPE OF SERVICES EXHIBIT"B" SPECIAL REQUIREMENTS EXHIBIT"C" SCHEDULE OF COMPENSATION EXHIBIT"D" SCHEDULE OF PERFORMANCE Cra - 12 EXHIBIT "A" SCOPE OF SERVICES Contractor shall provide the City appraisal services related to the El Dorado Mobile Country Club, located at 6000 East Palm Canyon Drive. Such services shall include, but shall not be limited to: 1. Provide opinions of market value for each of the Park's 367 spaces, assuming conversion to condominium ownership. The ownership interest appraised would include each individual condominium unit along with its 1/367th interest in the common area. 2. Provide a separate complete appraisal to provide an opinion of current market rent for each of the 367 spaces in the El Dorado Mobile Country Club. 3. Prepare a complete appraisal for both the condominium "for sale" values and the market rents in the form of a summary narrative report as would be defined by the Uniform Standards of Professional Appraisal Practice (USPAP). (2 13 EXHIBIT"B" SPECIAL REQUIREMENTS Section 5.3, 'Performance Bond," is hereby waived. The Contractor has requested the following materials before work commences: (A) Park map; (B) Site plan; (C) Approved condominium map; (D) Map showing lot dimensions, if any; (E) Itemized list of lot areas (square footages), if any; (F) Floorplan of clubhouse and any other common buildings; (G) Copy of the FEMA flood map. The Agency does not warrant to it possesses all of the information requested above but shall endeavor to obtain the requested items. If the lack of information creates a gap in the analysis that is filled by an assumption, Contractor shall make explicit in the report where the assumption was used, what the assumption was, and how different data (if it became available at a later date) would affect the appraised value. 14 EXHIBIT"C" SCHEDULE OF COMPENSATION Contractor shall be compensated in an amount not to exceed $25,000. The Contractor's proposal was $17,500 for the condominium value of the lots, and $7,500 for market rent appraisal. The total compensation paid to Contractor, inclusive of expenses, shall not exceed the Contract Sum. Unless some other method of payment is specified in the Schedule of Compensation (Exhibit C), in any month in which Contractor wishes to receive payment, no later than the first (1st) working day of such month, Contractor shall submit to the City in the form approved by the City's Director of Finance, an invoice for services rendered prior to the date of the invoice. Except as provided in Section 7.3, City shall pay Contractor for all expenses stated thereon which are approved by City pursuant to this Agreement no later than the last working day of the month. C rc._(z - EXHIBIT "C" TO CONTRACT SERVICES AGREEMENT EXHIBIT "D" SCHEDULE OF PERFORMANCE The finished appraisal report shall be delivered within forty-five (45) days of the date of the receipt by the Contractor of the authorization to proceed by the Agency. C EXHIBIT "D" TO CONTRACT SERVICES AGREEMENT J3 O6G3G l =N�/ V� O'MELVENY & MYERS LLP CENTURY CITY 400 South Hope Street TYSONS CORNER IRVINE Los Angeles, California 90071-2899 ��Q 2� 2�p3 WASHINGTON, D.C. MENLO PARK HONG KONG TELEPHONE (213) 430-0000 �`�—" NEWPORT BEACH FACSIMILE (213) 43o-6407 LONDON NEW YORK INTERNET: WWW.Omm.Oom ""=a.....---' SHANGHAI SAN FRANCISCO TOKYO January 23, 2003 OUR PIES NunulER 240,590-001 WRrrER'S DIRECT DIAL. (=13) 43o-6270 Honorable Mayor William G. Kleindienst and SS Honorable Members of the City Council war.ER s E Am of the City of Palm Springs jcolbert@onnn.com com 3200 Tahquitz Canyon Way Palm Springs, California 92263 Re: Conversion of El Dorado Palm Springs,Ltd. Dear Mayor and Coumcilmembers; We represent El Dorado Palm Springs, Ltd. ("El Dorado") in connection with its effort to convert the El Dorado Mobile Country Club (the "Park") from a rental facility to a resident- owned facility. As you are undoubtedly aware, in June 2002, the California Court of Appeal unanimously concluded that the City of Palm Springs (the "City") acted unlawfully when the City Council ("Council") adopted Resolution No. 19889 on August 2, 2000. In particular, the Corot of Appeal concluded that the City had no legal basis, right, or authority to impose certain exactions on El Dorado in Resolution No. 19889, wherein the City conditionally approved El Dorado's Application for Tentative Tract Map No 28087, to Subdivide the Existing 377 Space El Dorado Mobile Country Club for Condominium Purposes (the "Application"). The Supreme Court of California has rejected the City's Petition for Review and the decision of the Court of Appeal is now final and binding. Now that the courts have spoken, El Dorado is moving ahead with the conversion. It has not, however, relinquished its claims for damages against the City for the Cou ncil's imposition of the unlawful exactions in Resolution No. 19889. As explained below, El Dorado currently estimates that it has suffered in excess of$6 million in damages as a result of the City's unlawful conduct. Pursuant to a Tolling Agreement with the City, dated November 13, 2002, El Dorado has at least until November 2003 to sue the City to recover these and other damages caused by the unlawful exactions included in Resolution No. 19889. The purpose of this letter is to apprise the City of its current liability and to encourage the City and Council to refrain from firture unlawful conduct. El Dorado understands that the Council is engaging appraisers and perhaps others to aid the City in another unlawful effort to I _pr �� O'MEIVENY &MYERS LLP Mayor William G. Kleindienst and Honorable Councilmembers of the City of Palm Springs, January 23,2003 - Page 2 block the conversion. Although El Dorado intends to pursue damages for the City's past misconduct, the scope of such litigation and the magnitude of El Dorado's damages likely will depend, in part, on how the City conducts itself going forward. Further illegal conduct by the City only will serve to force El Dorado to resort to litigation again to vindicate its rights and to substantially increase the City's exposure. Irr the balance of this letter, we set forth the basis for El Dorado's $6 million darnage claim against the City. In August 2000, the City conditionally approved the Application in Resolution No 19889. This resolution included three Linlawfrl exactions, including one that would have required El Dorado to pay over one million dollars in subsidies to residents of the Park. In total, it would have cost El Dorado in excess of$2,000,000 to comply with the unlawful exactions. Unlike most exactions, which are payable directly to the govermnent, in this case El Dorado was required to pay, and confer other financial benefits on, renters in the Park. Because of the form of exaction used by the City, El Dorado could not seek relief Linder the Mitigation Fee Act (Cal. Gov't Code § 66000 et seq.), but instead was forced to seek a peremptory writ of mandamus from the courts to invalidate the unlawful exactions. The Court of Appeal held that the exactions were illegal. The City's unlawful exactions were not designed to advance any legitimate state interest. The state interest, as expressed in section 66427.5 of the Govermnent Code and the relevant Legislative History, was to encourage mobilehome park owners to convert their parks to resident-owned facilities and to create a uniform statewide approach for doing so. Cal. Gov't Code § 66427.5. The City imposed these unlawful exactions on El Dorado to frusta^ate these state interests, apparently because the Council wanted to advance some other interest. It would appear that the City imposed these milawful exactions for no reason other than to reward certain renters for political pin-poses or to punish El Dorado. The United States Supreme Court has stated clearly that this sort of govermnent behavior is nothing less than extortion. See Nollan v. California Coastal Conim'n, 483 U.S. 825, 837 (1987). Land use exactions that do not substantially advance the same state interests underlying the regulatory objective constitute a taking in violation of the United States Constitution. See id. at 834; Dolan v. City of Tigard, 512 U.S. 374, 386-87 (1994). Section 66427.5 specifies the precise conditions that a subdivider must meet in order to obtain a tentative subdivision map for conversion of a mobilehome park to resident-ownership. State law leaves no discretion for the concoction of further conditions. When the Council tacked its own conditions onto § 66427.5, it refused to follow a carefully enacted statutory scheme designed to achieve the Legislature's goals. Instead, it sought to defy and undermine that scheme. Under these circtunstances, the City's exactions constitute a taking of El Dorado's property without due process of law and just compensation(the "Taking"). In Nollan, the Suprerne Court explained that unless there is an "essential nexus" between the goverrmlent's exactions and the regulatory objectives of the statutory scheme, the government has effected a Taking. See Nollan, 483 U.S. at 837. Here, the City had no discretion to impose any exactions. O'MELVENY &MYERS LLP Mayor William G.Kleindienst and Honorable Councilmembers of the City of Palm Springs, JaMuaiy 23,2003 - Page 3 Nevertheless, it imposed exactions for the purpose of undermining the regulatory objectives of section 66427.5. By definition, these exactions fail to meet the Supreme Court's "essential nexus"test. In fact, this was an extreme abuse of the police power. The City purported to exercise power that it kriew it did not have because it wattled to defy a state regulatory scheme that the Council did not like. Moreover, El Dorado's successful challenge of the exactions does not mean that the City is not liable for dainages. It is well established that the govern nent's temporary interference with the use of property can be a Taking. See First English Evangelical Lutheran Church of Glendale v. Los Angeles County, California, 482 U.S. 304, 318-19 (1987). In First English, the Supreme Court of the United States ruled that the rule previously followed in California—that damages could not be recovered for temporary regulatory Takings —was unconstitutional. Id. at 317-19. Thus, where government action amounts to a temporary Taking, the Just Compensation Clause of the Fifth Amendment requires the government to pay damages. Id. at 319. California courts have recognized the import of these constitutional principles and the need to protect against the "uncompensated requisition of private property." Ehrlich v. City of Culver City, 12 Cal. 4"' 854, 868 (1996). The California Supreme Court has held that a nexus between the regulatory goals and the requested conditions must exist even where the government imposes non-possessory exactions, such as development fees. Ehrlich, 12 Cal. 0' at 868. The City imposed conditions on El Dorado requiring it to pay between $2,000 to $6,000 to every resident of the Park who wanted to purchase their lot from El Dorado. In violation of state law, the City also fabricated a "Map Act Rent Date" that was designed to frustrate the provisions of state law providing for a market rents in the Park four years after conversion and to advance the political interests of the Council at El Dorado's expense. It is precisely this kind of regulatory "leveraging,"where the local permitting authority imposes individualized exactions to further its own objectives, that constitutes a Taking. See id. at 867-68. The conduct of the City and the Council will not be viewed in a vacuum. El Dorado also will show that the Council's conduct was in direct contravention of the advice it received from its professional planning and legal staff. In addition, El Dorado already has evidence that members of the Comicil violated the Ralph M. Brown Act in comiection with their consideration of the Application during 2000. The transcript from the Council's meeting on July 5, 2000 is telling in this regard. We certainly look forward to hearing how Councilmembers Oden, Hodges, Reller-Spurgin, and ,Tones will explain under oath at deposition their coordinated performance at the end of the Council hearing on July 5th, in view of the requirements of the Brown Act. Finally, the personal animus towards El Dorado and Mr. James Goldstein maintained by certain members of the Council cannot be ignored. Sometimes the motives of individual elected officials is not relevant. In this case, the Council intentionally acted in a mamier it kriew to be illegal and rode roughshod over its professional staff. If the Council now intends to claim it made an "honest mistake," El Dorado will be afforded the opportunity to show that that claim is not true. OMELVENY &MWILS LLP Mayor William G.Kleindienst and Honorable Councilmembers of the City of Palm Springs, January 23,2003 - Page 4 As a result of the City's illegal actions, El Dorado estimates that its damages currently exceed$ 6 million. El Dorado was forced to postpone its business plans, forgo valuable economic opportunities, and litigate its rights. El Dorado will seek present and prospective darnages incident to the Taking, including lost profits and all other proximately caused detriment. See Pacific Gas & Elec. Co. v. San Mateo County, 233 Cal. App. 2d 268, 274-75 (1965). Although its calculations are preliminary, El Dorado currently estimates that it has lost approximately $1.1 million in lost rents, $4.5 million in lost profits and investment return on the sale of units in the Park, and over $500,000 in expenses, costs, and interest as a result of the City's unlawful conduct. In addition, El Dorado would be entitled to costs, expenses, and attorneys fees incurred in connection with future litigation with the City. C.C.P. § 1036. The scope of the City's misconduct and the magnitude of its liability will increase if the City engages in further unlawful conduct. Although the Council refused to follow the state statute or the advice it received from its own attorneys, we hope that it will follow the decision of the Court of Appeal and accept the fact that the state statutory scheme does not give the City any authority to interfere, block, frustrate, regulate, or delay El Dorado's conversion. Similarly, we expect the City to refrain from imposing firture exactions, either as punislunent for El Dorado's conversion efforts or to curry favor with selected constituents at El Dorado's expense. Our client is upset at the expense and delay caused by the Council's blatant disregard of the law. Pursuant to the Tolling Agreement, El Dorado is not litigating its Taking claim at this time, but the City and the Council should understand that El Dorado will evaluate its claim and the magnitude of its darnages at a suitable date and take whatever action it believes is necessary to vindicate its rights and receive just compensation for the City's illegal conduct. As previously stated, the purpose of this letter is to appraise the City of its current exposure and to encourage the City to follow the law in future dealings with El Dorado. It is not our intention to force the City to incur legal fees to respond to this letter. We will assume that the City disagrees with El Dorado's positions and that silence in the face of this letter does not signal your assent. If the City wishes to respond formally or informally, we will of course consider its views. As previously stated, El Dorado prefers to focus on the ongoing conversion and to avoid having the conversion illegally frustrated, delayed, or blocked by the City. Very truly yours, 6ofJan"es W. Colbert IIIIMELVENY& MYERS LLP cc: William W. Wynder, Esq. City Attorney RESOLUTION NO. OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING A CONTRACT WITH THE ANDERSON & BRABANT, INC. OF ESCONDIDO, CALIFORNIA TO CONDUCT AN APPRAISAL OF THE CONDOMINIUM VALUE AND FAIR MARKET RENT OF EACH OF THE 367 SPACES IN THE EL DORADO MOBILE COUNTRY CLUB, 6000 EAST PALM CANYON DRIVE, IN AN AMOUNT NOT TO EXCEED $45,000 PLUS REIMBURSABLE EXPENSES BE IT RESOLVED BY THE COMMUNITY REDEVELOPMENT AGENCY of the City of Palm Springs, California, that a contract with Anderson & Brabant, Inc. of Escondido, California, to conduct an appraisal of the condominium value and fair market rent of each of the 367 spaces in the El Dorado Mobile Country Club, 6000 East Palm Canyon Drive, in an amount not to exceed $25,000 plus reimbursable expenses, was approved at a meeting held on January 29, 2003. ADOPTED this day of 12003. AYES: NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA By Assistant Secretary Chairman REVIEWED &APPROVED AS TO FORM � � b