HomeMy WebLinkAboutA6085 - WESSMAN HOLDINGS LLC REIMB OF PORTION OF PREDEVELOPMENT COSTS AMENDMENT NO. 1 TO REIMBURSEMENT AGREEMENT
This AMENDMENT NO. 1 TO A REIMBURSEMENT AGREEMENT
("Amendment") is entered into as of this 12ZK day of �, 2012, by
and between the CITY OF PALM SPRINGS, a California -public entity ("City"), and
JOHN WESSMAN, an individual, and WESSMAN HOLDINGS, LLC, a California limited
liability company (collectively the "Owner").
RECITALS
A. Owner and City entered into that certain Reimbursement Agreement
related to the development of the Desert Fashion Plaza ("Property") on or about March
2, 2011.
B. The City and Owner desire to enter into this Agreement to provide for City
to reimburse Owner for 50% of Owner's costs for architectural and engineering costs
("Pursuit Costs").
C. It was originally estimated that the Pursuit Costs would not exceed
$400,000, and the City's share of the Pursuit Costs was estimated at the time not to
exceed Two Hundred Thousand Dollars ($200,000.00). Owner has incurred a total of
$460,238.20 in Pursuit Costs City and Owner now desire to amend the Agreement to
cover the costs of additionally beneficial design work.
AGREEMENT
Based upon the foregoing Recitals and for good and valuable consideration, the
receipt and sufficiency of which is hereby acknowledged by both parties, City and
Owner hereby agree as follows:
1. Pursuit Period. The "Pursuit Period" shall be from March 2, 2011, until
November 1, 2012.
2. City Reimbursement. The total reimbursement obligation of City for
Pursuit Costs shall be Two Hundred Thirty Thousand, One Hundred Nineteen Dollars
and Ten Cents ($230,119.10).
3. No Other Amendment. Except as expressly amended herein, the
Reimbursement Agreement shall remain in full force and effect.
(signatures on next page)
ORIG11,NAL t ik-
ANIVOR
IN WITNESS WHEREOF, City and Owner have entered into this Amendment as
of the date set forth above.
"CITY"
CITY OF PALM SPRINGS
By:
David H. Ready, D.
City Manager
ATTEST:
A"00 BY CITY COUNCIL
amesThompson aR�r2 26rZ o� W-
City Clerk
APPROVP AS TO FORM:
APPROVED BY CITY COUNCIL
--���
Douglas C. Holland, Lzsq.
City Attorney
"OWN "
By:
ohn W ssman
Manager
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REIMBURSEMENT AGREEMENT
This REI BURSE T AGREEMENT ("Agreement") is entered into as of this
day of W , 2011, by and between the CITY OF PALM SPRINGS, a
California public entity ("City"), and JOHN WESSMAN, an individual, and WESSMAN
HOLDINGS, LLC, a California limited liability company(collectively the "Owner").
RECITALS
A. Owner is the owner of the Desert Fashion Plaza and the Town and Country Center
("Properties"), two developed properties that make up the planning area of the adopted Museum
Market Plaza Specific Plan. On or about March 2, 2010, Owner presented a plan for the
redevelopment of the Properties ("Project") to the City Council of the City of Palm Springs as a
part of the City Community Visioning Process for the implementation of the Specific Plan. A
description of the Project ("Project Description") is attached hereto as Exhibit "A" and
incorporated herein by reference.
B. The City agreed to enter into a reimbursement agreement with Owner for a
portion of all costs reasonably incurred by Owner in pursuit of the Project("Pursuit Costs'.
C. City and Owner desire to enter into this Agreement to provide for City to
reimburse Owner for a portion of Owner's predevelopment costs, including without limitation
architectural,planning, and engineering costs("Pursuit Costs").
AGREEMENT
Based upon the foregoing Recitals and for good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged by both parties, City and Owner hereby agree
as follows:
1. Pursuit Period. The City and Owner acknowledge that time is of the essence and
agree, for the Pursuit Period (as hereinafter defined), to work diligently and in good faith to
pursue the Project, and cause preparation of preliminary design plans, drawings, and schematics
in sufficient detail to allow the City of Palm Springs to process and review a Development
Agreement, and related financial agreements for the implementation of the Project. The duration
of this Agreement ("Pursuit Period") shall be from March 2, 2011, until November 2, 2011,
unless the period has been mutually extended by the City and the Owner or terminated earlier
pursuant to Section 7 of this Agreement. (Note: Fees and charges by Alan Sanborn for work
performed prior to March 2,2011, in connection with preparing and revising Project Description,
shall be reimbursable Pursuit Costs.)
2. Owner's Responsibility for Design. Owner shall be solely responsible for
design of the Project, consisting of the preparation of preliminary plans, drawings, and
schematics as described in Section 1. Owner shall submit all design documents to the Agency,
conforming to all applicable legal authority and standards, in accord with established City
policies and procedures and compliance with all applicable authority, and City shall receive and
expeditiously review and process same. The adequacy of"work product" with respect to design
documents shall be subject to the City's reasonable satisfaction. All parties acknowledge that the
City shall have, with respect to an formal applications submitted
P Y tt b Owner, normal
PP Y ,
discretionary approval rights as provide
d under State law and City Ordinances.
3. City Reimbursement. City shall promptly, within 30 days after receipt from
Owner of bills and reasonable supporting information, reimburse Owner for 50% of Owner's
Pursuit Costs, as from time to time incurred; provided, however, the total reimbursement
obligation of City shall not exceed Two Hundred Thousand Dollars ($200,000.00).
4. Compliance With Laws. All work performed under the terms of this Agreement
shall be in strict conformity with all laws, ordinances, rules, regulations applicable to the Project
and shall require the design professionals retained to prepare the design documents to comply
with all such requirements.
5. Insurance.
5.1 Owner's and Contractor's Insurance.
5.1.1 At all relevant times during this Agreement and until the City has
accepted the work, the Owner shall, if requested by City, require each design professional to
maintain at least $1,000,000 in errors and omissions (professional liability) insurance applicable
to his/its design work, and to defend, indemnify and hold harmless the City and its respective
officers, employees, and agents, from any and all claims due to the design professional's
negligent acts or omissions or intentional wrongful conduct in its performance of design work.
Such insurance shall be in form and substance as reasonably acceptable to City.
5.1.2 Design professionals shall also provide the following insurance for its
work on the Project:
(a) Workers' compensation insurance in at least the minimum
amounts required under California Law.
(b) Comprehensive general liability insurance, for injuries to
persons and property, and automobile liability insurance, each with limits not
less than $1,000,000 combined single limit, per occurrence and $2,000,000 in
the aggregate.
5.1.3 Each insurance policy required to be maintained pursuant to this Section
5.1 shall be issued by a company admitted in California and having an A.M. Best's Guide Rating
of "A-", Class VII or better. The Owner shall, if requested by City, require its design
professionals to obtain and provide to City an endorsement for each of the policies providing the
above insurance (except for worker's compensation insurance and errors and omissions
insurance) naming the City and its respective officers, employees and agents as additional
insureds. Each policy shall be endorsed to require 30 days advance notice to the City of
cancellation or material modification of the policy. Each worker's compensation policy shall be
endorsed to waive any right of subrogation against the City.
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6. Indemnification. To the maximum extent authorized by law and except for
claims arising out of the negligence of the City, its officers, employees, or agents, or the
violation of any obligation of the City under the terms of this Agreement, including, without
limitation,the failure of the City to make any reimbursement due pursuant to this Agreement,the
Owner agrees to protect, defend, indemnify and hold harmless the City and the City and its
elected and appointed boards, officers, agents and employees (1) from any and all claims,
liabilities, expenses, stop notices, or damages of any nature, including attorneys' fees and expert
costs for injury to or death of
JmY , any person, for injury to any property, and for any other
monetary damage of any nature resulting from, arising out of or in any way connected with the
breach of this Agreement by or on behalf of the Owner, and (2) from violation of any statute,
law, regulation or other legal requirement applicable to the design of improvements. The
obligations set forth in this Section 6 shall survive the termination of this Agreement until all
such obligations are fully and finally resolved.
7. Termination. City may terminate this Agreement upon giving Owner thirty(30)
days written notice, in the event of substantial failure by the Owner to fulfill its obligations under
this Agreement, through no fault of the City; provided, however, Owner shall have fifteen (15)
days to commence any cure of any such substantial failure, and the Agreement shall not be
terminated so long as Owner commences and diligently pursues such cure. Upon any final
termination, the Owner shall (1)promptly cause all design contractors to discontinue all affected
work (unless the notice directs otherwise), and (2) deliver or otherwise make available to the
City copies of all data, drawings, specifications, reports, estimates, surnmaries and such other
information and materials as may have been accumulated by the Owner in performing this
Agreement whether completed or in progress. Owner shall be entitled to reimbursement for all
reimbursable expenses incurred through the date of final termination in accordance with Section
3, above.
8. Miscellaneous.
8.1 Entire Agreement, Waivers, and Amendments. This Agreement
constitutes the entire understanding and agreement of the parties with respect to the subject
matter set forth herein and supersedes all previous negotiations, discussions, and agreements
between the parties with respect to all or the subject matter hereof. All waivers of the provisions
of this Agreement must be in writing and signed by the appropriate authorities of the party to be.
charged. A waiver of the breach of the covenants, conditions or obligations under this
Agreement by any party shall not be construed as a waiver of any succeeding breach of the same
or other covenants, conditions or obligations of this Agreement. Any amendment or
modification to this Agreement must be in writing and executed by the appropriate authorities of
City and Owner.
8.2 Successors and Assigns. This Agreement shall be binding upon the
parties and shall inure to all successors in interest of City and to all successors in interest and
assigns of Owner in and to the Property.
8.3 Attorneys' Fees and Costs. If either party to this Agreement commences
an action against the other party to this Agreement arising out of or in connection with this
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Agreement, the prevailing party shall be entitled to recover reasonable attorneys' fees, expert
fees, costs of investigation,and costs of suit from the losing party.
8.4 Interpretation; Governing Law. This Agreement shall be construed
according to its fair meaning and as if prepared by both of the parties hereto. This Agreement
shall be construed in accordance with the internal laws of the State of California without regard to conflict of law principles.
8.5 Severability. If any term, provision, covenant, or condition of this
Agreement is held by a court of competent jurisdiction to be invalid, void, or unenforceable, the
remainder of this Agreement shall not be affected thereby to the extent such remaining
provisions are not rendered impractical to perform taking into consideration the purposes of this
Agreement.
8.6 Non-Liability of Officials and Employees of the City. No official or
employee of City or the City shall be personally liable to Owner in the event of any default or
breach by City, or for any amount that will become due to Owner, or any obligation under the
terms of this Agreement.
8.7 No
eneficiaries. This Agreement is made only for the
benefit of the parties heretoh t is not intety nded that any rights under this Agreement hall accrue
to any third person.
8.8 Independent Contractor. It is expressly understood and agreed by the
Parties that the Owner, while engaged in carrying out the terms and conditions of this
Agreement, is an independent contractors and not an employee of the City.
8.9 Authority to Execute. The persons executing this Agreement warrant
and represent that they have the authority to execute this Agreement and represent that they have
the authority to bind the parties for which they are signing to the performance of the obligations
hereunder.
8.10 Execution in Counterpart. This Agreement may be executed in several
counterparts, and all so executed shall constitute one agreement binding on both parties hereto,
notwithstanding that both parties are not signatories to the original or the same counterpart.
8.11 Cooperation. Subject to the City's discretionary approval rights as set
forth in Section 2 above, each party agrees to do and perform such other and further acts, and
execute and deliver such other and further acts as may be reasonably necessary to effectuate the
intents and purposes of this Agreement.
(signatures on next page)
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IN WITNESS WHEREOF, City and Owner have entered into this Agreement as of the
date set forth above.
"CITY"
CITY OF PALM SPRINGS
By. -1. /
Its•
ATTEST:
APPROV TO FORM:
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APPROVED BY CITY COUNCIL
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PROJECT DESCRIPTION
FOR MUSEUM MARKET PLAZA
REIMBURSEMENT AGREEMENT
I. BACKGROUND.
A. Specific Plan. On December 2, 2009, the City Council ("Council") of the
City of Palm Springs ("City") adopted Ordinance 1764, which approved the Museum
Market Plaza Specific Plan ("Specific Plan"). The Specific Plan covered two existing
downtown commercial complexes, i.e., the area commonly known as Desert Fashion
Plaza ("DFP Area"), and the area (shown on the Specific Plan as Blocks K-1 and K-2)
commonly known as Town& Country Center("TCC Area"). In granting such approval,
the Council found that the Specific Plan was consistent with applicable provisions of the
State Government Code, and the General Plan of the City. Among other things, the
Specific Plan established criteria, standards, restrictions, requirements and limitations
(collectively"criteria") for major redevelopment, in phases until build out("Build Out"),
of both the DFP Area and the TCC Area. Such criteria included without limitation,
criteria for land use (allowed and prohibited uses), development standards (minimum
setbacks and maximum heights), land regulations (allowable square footage and building
mass), and design guidelines (architectural themes and concepts). The Specific Plan also
which contemplated that existing buildings withi
included a a substantially more moderate and less ambitious plan ("Renovation Plan
n the DFP Area would largely remain
intact but be upgraded with exterior architectural improvements. In Section V.0 of the
Specific Plan, the Renovation Plan, which was approved as an optional "phase one" of
the Specific Plan.
B. EIR Certification Concurrently with approval of the Specific Plan, the
Council approved and adopted Resolution 22625, which certified an Environmental
Impact Report for the Specific Plan. Such Resolution included, without limitation, the
making of amendments to the General Plan and Zoning Ordinance of the City, the
making of certain findings relative to environmental effects identified in the EIR, the
adoption of a Statement of Overriding Consideratons, and the adoption of a Mitigation
Monitoring Plan and Reporting Plan. The Resolution also included the incorporation of
the Renovation Plan as an option,i.e.,a phase one for remodeling the DFP Area.
II. CURRENT PROPOSAL
A. Proiect Descriution for Revitalization Plan. The Revitalization Plan is
intended to expand upon the prior Renovation Plan, and continue to remain in substantial
conformance with the Specific Plan. In essence, the Revitalization Plan will constitute
part of the redevelopment "phasing" process recognized and approved in the Specific
Plan. Relevant aspects of the Revitalization Plan are considered below.
1. New Site Plan. The new site plan for the Revitalization Plan
("New Site Plan") is attached hereto as Exhibit 'A"and, as can be seen, it contains some
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modifications from the prior site plan for the Renovation Plan ("Prior Site Plan"). With
respect to the New Site Plan (and the Revitalization Plan) the comments below are
relevant.
2. Internal Street Improvements. The New Site Plan shows the
main internal street running the full distance from Indian Canyon Drive to Museum
Drive(?). In this respect, it is consistent with ultimate Specific Plan redevelopment
concepts, and provides an important part of the solution to making the DFP Area
commercially successful, i.e., direct east-west access from Indian Canyon Drive into the
DFP Area. The New Site Plan also shows an extension from the roundabout at the
"center"of the DFP Area southerly to become part of an extension of Belardo Road into
the DFP Area. (Note: [I] Construction of the Belardo Bridge over Tahquitz Creek will
provide a large new segment of residential areas with direct northerly access to the DFP
Area. [2] Under the New Site PIan,internal streets will be public, i.e., owned by the City
rather than the Developer.)
3. New Building Improvements. The Prior Site PIan contemplated
that existing buildings within the DFP Area would largely remain in place but be
upgraded with exterior architectural improvements. The New Site Plan contemplates the
demolition, reconfiguration and replacement of some buildings, particularly in the
southeast comer of the DFP Area. In that location, existing buildings will be demolished,
a new open space area will be located at the northwest corner of Tahquitz Canyon Way
and North Palm Canyon Drive, and a landscaped pedestrian walkway will extend from
the comer open space area into the center of the DFP Area, connecting to the
"roundabout" described in Section 2. above. New retail building improvements are
planned for location in the area shown as Block 2 on the New Site Plan. A new movie
theater complex is planned for location directly north of the roundabout in the center of
the DFP Area. (The Prior Site Plan showed the theater as being located immediately
southwest of the center of the DFP Area—at the site of the former Pavilion Theatre tent.)
4. Retention and Use of Existing Building Improvements. The
New Site Plan contemplates the retention, upgrade and use of some existing building
improvements, as follows: (1) the former Saks Fifth Avenue building located on Palm
Canyon Drive may be retained and used for major retail purposes, (2) the former I.
Magnin building located directly northwest of the center roundabout in the DFP Area
may be retained and used as an entertainment.
venue, such as for fitness/spa uses and/or
recreational bowling purposes, (3) existing building improvements shown as Block I on
the New Site Plan (located on Palm Canyon Drive), may be retained and used for retail
purposes, and (4) existing building improvements located immediately adjacent to the
Hyatt Hotel may be retained and used for hotel ballroom and conference center purposes.
Depending on the condition of these properties, the needs of potential tenants, and
economic feasibility, any of these buildings could be replaced with new structures.
(Note: The foregoing identification of potential uses is not intended to preclude other
uses authorized by the Specific Plan.)
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5• Retention of Block 6 for Future Development, The New Site
Plan calls for the area shown thereon as Block 6 to be retained by the Developer and be
held for future development for a variety of potential uses including, without limitation,
boutique gourmet grocery, bar/restaurant, entertainment, multi-story housing and/or
office uses.
6. City Purchase of Improvements for Public Parkin , The
Revitalization Plan calls for certain parking improvements within the DFP Area to be
purchased by the City from the Developer, and be used by the City in perpetuity as and
for free public parking. These may include all or part of the aboveground parking
structure at the northwest corner of the property, the parking deck and associated
underground parking at the southwest comer of the property, the parking underneath
developed portions of the DFP property, and all associated ramps, driveways and
approaches currently owned by the Developer.
7. City Purchase of Land for Public Streets. The Revitalization
Plan calls for the City to purchase from the Developer the ground upon which the interior
streets shown on the New Site Plan will be built. This purchase could be the ground only
or the purchase from the Developer the full street in a finished condition.
8• Qy Purchase of Land (Parcels A and B) for Future Use.The Revitalization Plan calls for two parcels within the DFP—Area, i.e., the two parcels directly east of the Palm Springs Art Museum (the "Art Museum") which are currently
used for open space and sculpture garden purposes ("parcels A and B"), to be purchased
by the City from the Developer and be held for future development opportunities
including, without limitation,possible expansion of Art Museum facilities.
B. Qty Administration and frocessiu2 of Revitalization Plan. With
respect to City Administration and processing, a number of matters need to be
considered,as follows:
1. Development A eement. Under certain provisions of the State
Government Code, local governments are authorized to enter into binding contracts with
developers known as development agreements. Among other things, a development
agreement, once consummated, gives the developer a vested right to proceed to develop
his property in the manner specified in the development agreement and/or entitlements
adopted concurrently therewith or prior thereto. In this case, the Developer has filed an
application for approval of a Development Agreement. Once approved and executed, the
Development Agreement will, among other things, grant the Developer the vested right to
develop the DFP Area in accordance with the Revitalization Plan, and the TCC Area in
accordance with the Revitalization Plan (construction of the public street from Indian
Canyon Drive to Palm Canyon Drive) and other entitlements authorized by the Specific
Plan (hotel and retail use), but subject to all criteria (restrictions, standards, requirements
and limitations) contained in the Specific Plan.
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2. Maior Architectural Review. Section V.A of the Specific Plan
provides that implementation tools will be major architectural reviews, conditional use
permits, subdivision maps and, in certain circumstances, planned development permits.
For purposes of the subject Revitalization Plan, the Planning Commission and City
Council will consider and act on the Development Agreement application, in conjunction
prior to major architectural review of proposed revitalization improvements.
3. Substantial Conformance of Revitalization Plan. For reasons
indicated herein, the Revitalization Plan and New Site Plan are consistent and in
substantial conformance with the Specific Plan in general, and the prior Renovation Plan
in particular. Land uses under the Revitalization Plan will be fully consistent with land
uses allowed under the Specific Plan, development standards and land use regulations set
forth in the Specific Plan will be followed in the Revitalization Plan, and architectural
and design concepts under the Revitalization Plan will be consistent with those contained
in the Specific Plan.
4. Proiect Funding Agreement. Section V.D of the Specific Plan
acknowledges(1)that although the Specific Plan occurs in an area in which infrastructure
is generally complete, improvements and alterations will be required throughout the
development of Museum Market Plaza, and (2)that financing for such improvements and
alterations is likely to come from a number of sources,both public and private.
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