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HomeMy WebLinkAboutA6236 - RIVIERA REINCARNATE, LLC OPERATIONS COVENANT FOR HOTEL OPERATIONS INCENTIVE PROGRAM FOR 1600 NIC RECORDING REQUESTED BY FIRST AMERICAN TITLE COMPANY DOC# 2015-0348682 NATIONAUCOMMERCIALSETMCEs COMMERCIANNDUSTRIAL DIVISION08/05/2015 04:02 PM Fees: $0.00 Page 1 of 12 N Recorded in Official Records RECORDING REQUESTED BY: County of Riverside CITY OF PALM SPRINGS Peter Aldan@ Assessor-County Clerk-Recorder AND WHEN RECORDED MAIL TO: "This document was electronically submitted City of Palm Springs to the County of Riverside for recording— P. O. Box 2743 Receipted by:ALGONZAL Palm Springs, CA 92263 Attn: Office of the City Clerk SPACE ABOVE FOR RECORDER ONLY Filing fee EXEMPT per Government Cade 6203 AMENDED OPERATIONS COVENANT Riviera Reincarnate, LLC A6236 (x-ref 2012-0297943 ) 1 tl,_ .-r Dacun-,,,;A THIS AREA FOR RECORDER ' S USE ONLY THIS PAGE ADDED TO PROVIDE ADEQUATE SPACE FOR RECORDING INFORMATION ($3.00 Additional Recording Fee Applies) FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: THE CITY OF PALM SPRINGS 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Attention: City Clerk (Space Above This Line for Recorders Office Use Only) AMENDED OPERATIONS COVENANT THIS AMENDED OPERATIONS COVENANT AND� DECLARATION OF '1 V�L COVENANTS AND RESTRICTIONS ("Agreement") is made and entered into this � day of I -5dy, 2015, by and between the CITY OF PALM SPRINGS, a municipal corporation and charter city ("City"), and Riviera Reincarnate, LLC, a Delaware limited liability company ("Owner"). RECITALS : A. The City of Palm Springs adopted Chapter 5.26 of its Municipal Code in December, 2007 to provide a Hotel Operations Incentive Program ("Program") for the operation and maintenance of Hotel facilities that enhance the tourist and travel experience for visitors to the City, maximize the use of the City's Convention Center, provide attractive and desirable visitor serving facilities and experiences, and assist the City in achieving its tourism goals. B. Owner has applied for the Program and has provided satisfactory documentation certifying its recent renovation project as a "Qualified Renovation Program" under the Program. The Riviera Hotel ("Owner's Hotel" or "Project"), generally located at 1600 North Indian Canyon Drive, Palm Springs, California, consists of four hundred six (406) total hotel rooms on that certain real property located in the City of Palm Springs, County of Riverside, State of California, more particularly described in Exhibit "A" attached hereto and incorporated herein by reference (the "Site"). C. City and Owner now desire to place restrictions upon the use and operation of the Project, in order to ensure that the Project shall be operated continuously as a hotel available for short-term rental for the term of this Agreement. D. City and Owner also agree that in return for participation in the Program, Owner shall agree to operate the Project as a hotel; participate in the Palm Springs Convention Center's Committable Rooms Program; and provide City with up to eight (8) room-nights per month for official City use; and, City agrees to share a percentage of Transient Occupancy Tax Increment with Owner pursuant to the Program guidelines. E. This Agreement supersedes that certain Operations Covenant on Leasehold Interest dated as of June 1, 2012 between the City and Owner and recorded on June 27, 2012 as Document 42012-0297943 by the Riverside County Clerk (the "Original Covenant"). The first OPERATIONS COVENANT FOR HOTEL INCENTIVE PROGRAM payment under the Original Covenant for the year commencing on June 1, 2012 to May 31, 2013 was paid to Owner on August 8, 2013. F. The City finds that the approval of this Agreement is categorically exempt from CEQA under Section 15301 of the California Administrative Code as the Hotel Operations Incentive Program applicable to Owner's Hotel applies to the operation, repair, maintenance, or minor alteration of existing structures, facilities, mechanical equipment involving no material expansion of use beyond that previously existing. NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Owner hereby commits to the City to fully undertake and perform the covenants and agreements described herein and the City hereby agrees to provide Owner with funds as provided under the Program and as set forth hereinafter. ARTICLE 1 STATEMENT OF OPERATING COVENANTS 1.1. OPERATION AND USE COVENANT. Owner covenants to operate, maintain, and use the Owner's Hotel in accordance with this Agreement. All uses conducted on the Site, including, without limitation, all activities undertaken by the Owner pursuant to this Agreement shall conform to requirements of this Agreement and the Program. 1.2. HOTEL USE. The Owner hereby agrees that the Project is to be owned, managed, and operated as a hotel in a first-class manner, and the Project's participation in the Program shall continue in accordance with the terms of the Program, for a term equal to ten (10) years, commencing upon the date Owner first receives from the City the Owner's share of transient occupancy tax revenues pursuant to the Program unless and until Owner's participation in the Program is terminated prior thereto in accordance with this Agreement (the "Term"). The last year for which Owner will receive transient occupancy tax revenues under the Program is June 1, 2021 through May 31, 2022. 1. Housing Uses Prohibited. None of the rooms in the Project will at any time be utilized as a non-transient residential property including dormitory, fraternity or sorority house, rooming house, nursing home, hospital, sanitarium, or trailer court or park without the City's prior consent which consent may be given or withheld in its sole and absolute discretion. 2. Conversion of Project. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Owner take any steps in connection with the conversion to such ownership or condominiums, or to any other similar form of ownership, without the prior written approval of the City Council which approval may be given or withheld in its sole and absolute discretion. ARTICLE 2 WARRANTIES AND COVENANTS 2.1. WARRANTIES AND COVENANTS. For the Term of this Agreement, the Owner hereby represents, covenants, warrants and agrees as follows: OPERATIONS COVENANT -2- FOR HOTEL INCENTIVE PROGRAM I. Owner has completed the City's application for the Program. The City has determined the Transient Occupancy Tax Base to be used to calculate the Transient Occupancy Tax Increment shall be $1,302,039.33 and the Owner accepts such Transient Occupancy Tax Base. 2. Owner hereby agrees to subscribe to the Palm Springs Convention Center's Committable Rooms Program or any similar successor program as identified by the City Manager without being obligated to incur any additional costs or expenses. 3. Upon City's prior request, Owner shall provide the City at no cost up to eight (8) rooms for one (1) night (or one or more rooms for a total of eight (8) room- nights) other than Friday or Saturday nights each month for use for City purposes as approved or designated by the City Manager, provided that such use by the City shall be subject to the rooms being available at the time of the City's request. Such accommodations shall include all services and amenities for which the Owner would normally collect transient occupancy taxes but will not include services and amenities that are optional to the transient and for which the transient is not required to pay transient occupancy taxes. City shall be responsible for any transient occupancy taxes for any occupancy provided to City under the provisions of this paragraph. Notwithstanding anything in this Agreement to the contrary, if the City does not use rooms during any month, then its right to use rooms with respect to that month shall expire at the end of that month and shall not accrue; provided, however, if the City was unable to use rooms solely because Owner's Hotel had no rooms available when the City requested a room in accordance with this Section 2.1.3, then, the City's right to use rooms shall not expire and may be used by the City in a subsequent month. ARTICLE 3 MAINTENANCE 3.1. MAINTENANCE. 1. Maintenance Obligation. Owner, for itself and its successors and assigns, hereby covenants and agrees to maintain and repair or cause to be maintained and repaired the Site and all related on-site improvements and landscaping thereon, including, without limitation, buildings, parking areas, lighting, signs and walls in a first class condition and repair, free of rubbish, debris and other hazards to persons using the same, and in accordance with all applicable laws, rules, ordinances and regulations of all federal, state, and local bodies and agencies having jurisdiction, at Owner's sole cost and expense. Such maintenance and repair shall include, but not be limited to, the following: (i) sweeping and trash removal; (ii)the care and replacement of all shrubbery, plantings, and other landscaping in a healthy condition; and (iii) the repair, replacement and restriping of asphalt or concrete paving using the same type of material originally installed, to the end that such paving at all times be kept in a level and smooth condition. Parking and Driveways. The driveways and traffic aisles on the Site shall be kept clear and unobstructed at all times. OPERATIONS COVENANT .3- FOR HOTEL INCENTIVE PROGRAM ARTICLE 4 COMPLIANCE WITH LAWS 4.1, COMPLIANCE WITH LAWS. Owner shall comply with all ordinances, regulations and standards of the City applicable to the Site. Owner shall comply with all rules and regulations of any assessment district of the City with jurisdiction over the Site. ARTICLE 5 NONDISCRIMINATION 5.1. NONDISCRIMINATION. There shall be no discrimination against or segregation of any person, or group of persons, on account of race, color, creed, religion, gender, sexual orientation, marital status, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Owner, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of guests or vendees of the Site, or any part thereof. ARTICLE 6 ADDITIONAL TERMS 5.2. INDEMNIFICATION. Owner agrees for itself and its successors and assigns to indemnify, defend, and hold harmless City and its respective officers, members, officials, employees, agents, volunteers, and representatives from and against any loss, liability, claim, or judgment relating in any manner to the Project excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of the City or its respective officers, officials, employees, members, agents, volunteers, or representatives. Owner, while in possession of the Site, and each successor or assign of Owner while in possession of the Site, shall remain fully obligated for the payment of property taxes and assessments in connection with the Site. The foregoing indemnification, defense, and hold harmless agreement shall only be applicable to and binding upon the party then owning the Site or applicable portion thereof. 5.3. ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other reasonable expert witness fees, and its reasonable attorney's fees and costs. 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, including the conducting of discovery. 5.4. AMENDMENTS. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Riverside. 5.5. NOTICE. Any notice required to be given hereunder shall be made in writing and shall be given by personal delivery, certified or registered mail, postage prepaid, return receipt OPERATIONS COVENANT -4- FOR HOTEL INCENTIVE PROGRAM requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: City: City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Attn: City Manager Copy to: City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Attn: City Attorney Owner: Noble House Hotels & Resorts Attn: Vice President of Finance & Audit 600 6th Street South Kirkland, WA 98033 The notice shall be deemed given three (3) business days after the date of mailing, or, if personally delivered, when received. 5.6. SEVERABILITY/WAIVER/INTEGRATION 1. Severability. If any provision of this Agreement or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of the provisions, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; provided, that if any material terms or provisions of this Agreement are rendered invalid, void and/or unenforceable, or due to changes in the law such terms or provisions would materially alter the terms of the transactions contemplated herein, the parties agree to meet and negotiate in good faith to attempt to reform this Agreement to accomplish the intent of the parties. 2. Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 3. Integration.tion. This Agreement contains the entire Agreement between the parties and neither party relies on any warranty or representation not contained in this Agreement. 4. Third Parties. No third party beneficiaries are intended, and the only parties who are entitled to enforce the provisions of this Agreement are the City, Owner, any mortgagees that may succeed Owner's interest as fee owner of the Site, and their respective successors and assigns. OPERATIONS COVENANT -5- FOR HOTEL INCENTIVE PROGRAM 5.7. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. 5.8. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. 5.9. TERMINATION. The City may terminate this Agreement by providing written notice to Owner that Owner has failed to comply with its obligations under Articles 1, 2, 3, 4 or 5 of this Agreement but only after the City has provided Owner with (a) written notice of default and (b) thirty (30) days to cure such default. Owner may elect to terminate its participation in the Program and this Agreement by providing written notice to the City (a) if the City fails to deliver to Owner any amounts owed to Owner pursuant to the Program within thirty (30) days after Owner's written request for payment, or (b) in its sole discretion for any reason during the term of this Agreement. In the event of any termination of this Agreement, Owner (or its successor, as applicable) shall not be obligated to return any amounts previously paid to it by the City pursuant to the Program. 5.10. ESTOPPEL. Within fifteen (15) days after request of Owner, City shall execute and provide to Owner (or any proposed mortgagee) an estoppel certificate, in the form approved by the City Attorney of the City, confirming whether or not Owner is in breach of any obligations under this Agreement and identifying any required cure. 5.11. RECORDED OPERATIONS COVENANT TERMINATION. This Agreement hereby replaces, supersedes and terminates the Original Covenant in its entirety. [END -- SIGNATURES ON NEXT PAGE] OPERATIONS COVENANT -6- FOR HOTEL INCENTIVE PROGRAM IN WITNESS WHEREOF, the City and Owner have executed this Agreement by duly authorized representatives on the date first written hereinabove. "CITY" THE CITY OF PALM SPRINGS, a municipal corporation and charter city James Thompson, Actina Citv Manager FOR: David H. Ready, City Manager, City of Palm Springs ATTEST: '��� Kathleen D. Hart, Chief Deputy City Clerk FOR James Thompson, City Clerk City of Palm Springs APrRovEo BY cm couNcL APPROVED AS O FORM: bo,6- a' 21 AJOI??' WOODRUF WD & S T By: Dougla C. Holland, Esq. City At orney, City of Palm Springs "OWNER" RIVIERA REINCARNATE, LLC A Delaware Limited Liability Company By: RECP/Noble House Riviera Venture, LLC, its Sole Member By: Westgroup Riviera, LLC its Managing Member By: Noble House Associates, LLC, its Manag g e ber By: Name: M.P. Dyer Title: General Counsel, for Riviera Reincarnate, LLC [END OF SIGNATURES] OPERATIONS COVENANT -7- FOR HOTEL INCENTIVE PROGRAM ACKNOWLEDGMENT A notary public or other officer completing this certificate verifies only the identity of the individual who signed the document to which this certificate is attached,and not the truthfulness,accuracy,-or validity of that document. State of California County of � rStkG On AMA diMS before me, ( ,t4%&bAi� lA• i�lG AI , N/�% 900bG (here insert name and title of thb officer) personally appeared so wteS Tl WK405'dV1 who proved to me on the basis of satisfactory evidence to be the person(k) whose name($ INNO subscribed to the within instrument and acknowledged to me that /they executed the same in hi (lerlth'eir authorized capacity(i4), and that by(hi hasr/tb-eir signature() on the instrument the person, or the entity upon behalf of which the person(';) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. CYNTHIA A. BERARDI WITNESS my hand and official seal. z Commission•2066635 = Notary Public•California > Riverside County j Comm.E 9ree Feb 18,20t8 Signature (Seal) CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE§ 1189 A notary public or other officer completing this certificate verifies only the identity of the individual who signed the docunnent to which this certificate is attached,and not she truthfulness,accuracy,or validity of chat dmumQ tt S . iNJ fa State of 6aFferRe�a! l County of r \tills ) l On �JdSl 30�aGIJ� before me, � /%0t/A /\� p, (y+A4�; Date /1, Hers insert Name and Title of the Officer personally appeared !� I- P. Names)of Signevfs) who proved to me on the basis of satiofactory evidence to be the Person(,) whose name(s) in/are subscribed to the within instrument and aclmowtedged to me that heJshefthey executed Use same in his/herRhetr authorized capacity(tes),and that by his/her/their signature(s)on the instrument the persort(s), or the entity upon behalf of which the person(s)acted,executed the Instrument. I certify under PENALTY OF PERJURY under the iaws of the State of that the foregoing paragraph is true and cor AS r A45 fou QN WITNESS my hand and official seal. O��°ozA'r► QFa''; I Signature Signature 6f Notary Public Pface Notary Seal Above OPTIONAL Though thhs section is optional, completing this information can dater alteration of the document or fraudulent rearrachment of this form w an unintended document. Description of Attached Document Title or Type of Document: Document Date: Number of Pages: Signer(s) Other Than Named Above: Capacity(ies)Claimed by Signers) Signer's Name: Signer's Name: ❑Corporate Officer—Title(s): ❑Corporate Officer — Title(s): ❑Partner — ❑Limited ❑General ❑Partner— ❑Limited 0 General ❑Individual ❑Attorney in Fact ❑Individual ❑Attorney to Fact. ❑Trustee ❑Guardian or Comervator ❑Trustee ❑Guardian or Conservator ❑Other- ❑ Other Signer Is Representing: Signer to Representing: 0201E National Notary Association•www.NationaiNotary.org•1;800-US NOTARY(1-800-876-M27) ftem#6907 OPERATIONS COVENANT -8- FOR HOTEL INCEN"FIVE PROGRAM GOVERNMENT CODE 27361 .7 1 CERTIFY UNDER PENALTY OF PERJURY THAT THE NOTARY SEAL ON THE DOCUMENT TO WHICH THIS STATEMENT IS ATTACHED READS AS FOLLOWS: NAME OF NOTARY: DONNA J. REPP COUNTY WHERE BOND IS FILED: STATE OF WASHINGTON DATE COMMISSION EXPIRES: 11-01-17 COMMISSION NO.: N/A MANUFACTURERS/VENDOR NO. N/A PLACE OF EXECUTION: IRVINE, CALIFORNIA DATE: AUGUST 5, 2015 BY: FIRST AMERICAN TITLE INSURANCE COMPANY EXHIBIT "A" LEGAL DESCRIPTION OF SITE That certain real property located in the City of Palm Springs, County of Riverside, State of California, more particularly described as: PARCEL 1 OF PARCEL MAP NO. 9475, IN THE CITY OF PALM SPRINGS, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 45 PAGE 78 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY. APN: 501-090-014-4 EXHIBIT"A" OPERATIONS COVENANT 915229.03/OC FOR HOTEL INCENTIVE PROGRAM 37097t-000032-10-11/dmo/try -I- V Hotel Incentive Program - Remodeled Hotels - RELEASE FORM • 2013 �,Jv 2I i�fi 1D� 54 I, (un'deisjgn ) '. represent the ownership ("Hotel Owner") of the Riviera Rein carn6}e, LLC Hotel, which is a participant in the City of Palm Springs Hotel Incentive Program. The Operations Covenant documenting the Agreement was executed on June 1, 2012 and recorded in the Official Records of the County of Riverside on June 27, 2012 I agree that the base year of Transient Occupancy Tax for the Hotel (Base TOT) is $ 1,302,039.33 , which represents the average of the three years prior to the Qualifying Renovation Project. The three years were the period 511/03 to 4/30/06 I agree that the current year's TOT paid by the Hotel is $ 1,533,241.54 (total TOT), and that under the terms of the Covenant the Owner is entitled to receive 50% of the difference between the current year's TOT and the Base Year. The calculation of the TOT share paid to the Hotel is the current year Total TOT of $ 1,533,241.54 , minus the Base TOT of $ 1,302,039.33 which equals $231,202.21 times the 50% TOT share or $ 115,601.11 The Covenant provides that the Owner shall receive the rebate for a period of 10 years, subject to other performance provisions in the Covenant. This payment is year 1 of 10. This letter hereby releases the City from any liability for disputed base year calculations, TOT percentage calculations, current TOT year calculations, or for any prior year's payment not received by the Owner. I agree that the facts stated above are true and accurate and represent the best judgment of the Owner as to the correct amount. I further attest that I have the authority to provide such a release to the City. Hotel Repr a Verification: Date: 2( )3 Signatur �ihv ;J' vCt tMtY� Print Name and Title City of Palm Springs Verification: I�Z& / iG 2/� Date: Signature 9/ -th<=� Al � Print Name bnd Title City of Palm Springs Community& Economic Development • 3200 E.Tahquitz Canyon Way, Palm Springs,CA 92262 Phone: 760-323-8175 • Email:Cathv.vanhorn@palmspringsca.zov DOC # 2012-0297943 06/27/2012 02:57P Fee:NC Page 1 of 11 PLEASE COMPLETE THIS INFORMATION Recorded in Official Records RECORDING REQUESTED BY: County of Riverside Larry W. Ward CITY OF PALM SPRINGS Assessor, County Clerk & Recorder AND WHEN RECORDED MAIL TO: I III II IIIIIiI IIIII IIIII I II IIIIII I III III IIII III III _ / CITY OF PALM SPRINGS OFFICE OF THE CITY CLERK 3200 E.TAHQUITZ CANYON WAY S R U PAGE SIZE DA MISC LONG RFD COPY PALM SPRINGS,CA 92262 I II 16 Pursuant to Government Code Section M A L 465 426 PCOR NCOR SMF NCHG ER M �C C i � T: CTY UNI $OD R-b23� OPERATIONS COVENANT ON LEASEHOLD INTEREST Between CITY OF PALM SPRINGS AND RIVIERA REINCARNATE, LLC Title of Document THIS AREA FOR RECORDER'S USE ONLY FREE RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: THE CITY OF PALM SPRINGS 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Attention: City Clerk (Space Above This Line for Recorder's Office Use Only) OPERATIONS COVENANT ON LEASEHOLD INTEREST F\6ab6 THIS OPERATIONS COVENANT AND DECLARATION OF COVENANTS AND RESTRICTIONS (this "Agreement") is made and entered into this 1 st day of June, 2012, by and between the CITY OF PALM SPRINGS, a municipal corporation and charter city (the "City"), and Riviera Reincarnate, LLC, a Delaware limited liability company("Operator"). RECITALS : A. The City adopted Chapter 5.26 of its Municipal Code in January, 2008 to provide a Hotel Operations Incentive Program (the "Program") for the operation and maintenance of Hotel facilities that enhance the tourist and travel experience for visitors to the City, maximize the use of the City's Convention Center, provide attractive and desirable visitor serving facilities and experiences, and assist the City in achieving its tourism goals. B. Operator has applied for the Program and has provided satisfactory documentation certifying its recent renovation project as a "Qualified Renovation Program" under the Program. Operator is the owner of the Riviera Hotel ("Operator's Hotel" or the "Project"), consisting of approximately four hundred and six (406) total hotel rooms, and is the Owner of that certain real property generally located at 1600 North Indian Canyon Drive in the City of Palm Springs, County of Riverside, State of California, more particularly described in Exhibit "A" attached hereto and incorporated herein by reference (the "Site"). C. City and Operator now desire to place restrictions upon the use and operation of the Project and the Operator's leasehold interest, in order to ensure that the Project shall be operated continuously as a hotel available for short-term rental for the term of this Agreement. D. City and Operator also agree that in return for participation in the Program, Operator shall agree to operate the Project as a hotel; participate in the Palm Springs Convention Center's Committable Rooms Program; and provide City with up to eight (8) room-nights per month for official City use; and, City agrees to share a percentage of Transient Occupancy Tax Increment with Operator pursuant to the Program guidelines. E. The City finds that the approval of this Agreement is categorically exempt from CEQA under Section 15301 of the California Administrative Code as the Hotel Operations Incentive Program applicable to Operator's Hotel applies to the operation, repair,maintenance, or IIIIII(IIIIII IIIII IIIII(III IIIIII IIIII III IIIII IN IIII BE 201 2e f 1�14S7P FOR HOTEOEAnONS COVENANT LPINRCENTIVE PROGRAM minor alteration of existing structures, facilities, mechanical equipment involving no material expansion of use beyond that previously existing. NOW, THEREFORE, for good and valuable consideration,the receipt and sufficiency of which are hereby acknowledged, the Operator hereby commits to the City to undertake the covenants described herein (the "Operating Covenants") and the City hereby agrees to provide the Operator with funds as provided under the Program and as set forth hereinafter. ARTICLE 1 STATEMENT OF OPERATING COVENANTS I.I. OPERATION AND USE COVENANT. Operator covenants to operate, maintain, and use the Operator's Hotel in accordance with this Agreement. All uses conducted on the Site, including, without limitation, all activities undertaken by the Operator pursuant to this Agreement, shall conform to requirements of this Agreement and the Program. 1.2. HOTEL USE. The Operator hereby agrees that the Project is to be owned, managed, and operated as a hotel in a first-class manner, and the Project's participation in the Program shall continue in accordance with the terms of the Program, for a term equal to ten(10) years, commencing upon the date Operator first receives from the City the Operator's share of transient occupancy tax revenues pursuant to the Program, unless and until Operator's participation in the Program is terminated prior thereto in accordance with this Agreement (the "Term" a r. 1. Housing Uses Prohibited. None of the rooms in the Project will at any m time be utilized as a non-transient residential property including dormitory, fraternity or m m sorority house,rooming house,nursing home,hospital, sanitarium, or trailer court or park m m without the City's prior consent, which consent may be given or withheld in its sole and N absolute discretion. 2. Conversion of Project. No part of the Project will at any time be owned by a cooperative housing corporation, nor shall the Operator take any steps in connection p with the conversion to cooperative housing or condominium ownership, or to any other similar form of ownership, without the prior written approval of the City Council, which approval may be given or withheld in its sole and absolute discretion. _ ARTICLE 2 WARRANTIES AND COVENANTS 2.1. WARRANTIES AND COVENANTS. For the Term of this Agreement, the Operator hereby represents, covenants, wan-ants and agrees as follows: 1. Operator has completed the City's application for the Program. The City has determined that the Transient Occupancy Tax Base to be used to calculate the Transient Occupancy Tax Increment shall be $1,302,039.33 and the Operator accepts such Transient Occupancy Tax Base. OPERATIONS COVENANT '2- FOR HOTEL INCENTIVE PROGRAM 2. Operator hereby agrees to subscribe to the Palm Springs Convention Center's Committable Rooms Program or any similar successor program as identified by the City Manager without being obligated to incur any additional costs or expenses. 3. Upon the City's prior request, Operator shall provide the City at no cost up to eight (8) rooms for one night (or one or more rooms for a total of eight (8) room- nights) each month for use for City purposes as approved or designated by the City Manager, provided that such use by the City shall be subject to the rooms being available at the time of the City's request. Such accommodations shall include all services and amenities for which the Operator would normally collect transient occupancy taxes but will not include services and amenities that are optional to transient guests and for which transient guests are not required to pay transient occupancy taxes. City shall be responsible for any transient occupancy taxes for any occupancy provided to City under the provisions of this paragraph. Notwithstanding anything in this Agreement to the contrary, if the City does not use rooms during any month, then its right to use rooms with respect to that month shall expire at the end of that month and shall not accrue; provided, however, if the City was unable to use rooms because Operator's Hotel had no rooms available when the City requested a room in accordance with this Section 2.1.3, then the City's right to use rooms shall not expire and may be used by the City in a subsequent month. ARTICLE 3 MAINTENANCE 3.1. MAINTENANCE. 1. Maintenance Obligation. Operator, for itself and its successors and assigns, hereby covenants and agrees to maintain and repair or cause to be maintained and repaired the Site and all related on-site improvements and landscaping thereon, including, without limitation, buildings, parking areas, lighting, signs and walls, in a first class condition and repair, free of rubbish, debris and other hazards to persons using the same, and in accordance with all applicable laws, rules, ordinances and regulations of all federal, state, and local bodies and agencies having jurisdiction, at Operator's sole cost and expense. Such maintenance and repair shall include, but not be limited to, the following: (i) sweeping and trash removal; (ii)the care and replacement of all shrubbery, plantings, and other landscaping in a healthy condition; and (iii) the repair, replacement and restriping of asphalt or concrete paving using the same type of material originally installed, to the end that such paving at all times be kept in a level and smooth condition. 2. Parking and Driveways. The driveways and traffic aisles on the Site shall be kept clear and unobstructed at all times. 3. Right of Termination. In the event Operator fails to maintain the Site in the above-mentioned condition, and satisfactory progress is not made in correcting the condition within thirty (30) days from the date of written notice from City (which notice IIIIII IIIIIII IIIII IIIII IIII IIIIII IIIII III IIIII IIII IIII 20140£ez4s ee7P OPERATIONS COVENANT -3- FOR HOTEL INCENTIVE PROGRAM shall reasonably identify the required maintenance), City may, at City's option, and upon notice to Operator, terminate this Agreement. ARTICLE 4 COMPLIANCE WITH LAWS 4.1. COMPLIANCE WITH LAWS. Operator shall comply with all ordinances, regulations and standards of the City applicable to the Site. Operator shall comply with all rules and regulations of any assessment district of the City with jurisdiction over the Site. ARTICLE 5 NONDISCRIMINATION 5.1. NONDISCRIMINATION. 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 sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, or any part thereof, nor shall Operator, or any person claiming under or through it, establish or permit any such practice or practices of discrimination or segregation with reference to the selection, location, number, use or occupancy of guests or vendees of the Site, or any part thereof. ARTICLE 6 INDEMNIFICATION 6.1. INDEMNIFICATION. Operator agrees for itself and its successors and assigns to indemnify, defend, and hold harmless City and its respective officers, members, officials, employees, agents, volunteers, and representatives from and against any loss, liability, claim, or judgment relating in any manner to the Project, excepting only any such loss, liability, claim, or judgment arising out of the intentional wrongdoing or gross negligence of the City or its respective officers, officials, employees, members, agents, volunteers, or representatives. Operator, while in possession of the Site, and each successor or assign of Operator while in possession of the Site, shall remain fully obligated for the payment of property taxes and assessments in connection with the Site. The foregoing indemnification, defense, and hold harmless agreement shall only be applicable to and binding upon the party then owning the Site or applicable portion thereof. 6.2. ATTORNEYS' FEES. In the event that a party to this Agreement brings an action against the other party hereto by reason of the breach of any condition, covenant, representation or warranty in this Agreement, or otherwise arising out of this Agreement, the prevailing party in such action shall be entitled to recover from the other party reasonable expert witness fees, and its reasonable attorney's fees and costs. 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, including the conducting of discovery. I IIIIII IIIIIII IIIII IIIII IIII IIIIII IIIII III IIIII IIII IIII 200 1 2 f 91z4 793 ees7P OPERATIONS COVENANT 4- FOR HOTEL INCENTIVE PROGRAM 6.3. AMENDMENTS. This Agreement shall be amended only by a written instrument executed by the parties hereto or their successors in title, and duly recorded in the real property records of the County of Riverside. 6.4. NOTICE. Any notice required to be given hereunder shall be made in writing and shall be given by personal delivery, recognized overnight courier, certified or registered mail, postage prepaid, return receipt requested, at the addresses specified below, or at such other addresses as may be specified in writing by the parties hereto: City: City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Attn: City Manager Copy to: City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs, CA 92262 Attn: City Attorney Operator: Noble House Hotels & Resorts Attn: Vice President of Finance &Audit 600 6`h Street South Kirkland, WA 98033 The notice shall be deemed given three (3) business days after the date of mailing, one (1) business day after sending by recognized overnight courier, or, if personally delivered, when received (or receipt is denied). 6.5. SEVERABILITY/WAIVER/INTEGRATION 1. Severability. If any provision of this Agreement or portion thereof, or the application to any person or circumstances, shall to any extent be held invalid, inoperative, or unenforceable, the remainder of the provisions, or the application of such provision or portion thereof to any other persons or circumstances, shall not be affected thereby; provided, that if any material terms or provisions of the Operating Covenants are rendered invalid, void and/or unenforceable, or changes in the law would materially alter the terms of the transactions contemplated herein, the parties agree to meet and negotiate in good faith to attempt to reform the Operating Covenants to accomplish the intent of the parties. 2. Waiver. A waiver by either party of the performance of any covenant or condition herein shall not invalidate this Agreement nor shall it be considered a waiver of any other covenants or conditions, nor shall the delay or forbearance by either party in exercising any remedy or right be considered a waiver of, or an estoppel against, the later exercise of such remedy or right. 1111111111 IN 1111111111111111111111111111111 OF z�t 9£ 11 OPERATIONS COVENANT 'S' FOR HOTEL INCENTIVE PROGRAM 3. Integration.tion. This Agreement contains the entire agreement between the parties and neither party relies on any warranty or representation not contained in this Agreement: 4. Third Parties. No third party beneficiaries are intended, and the only parties who are entitled to enforce the provisions of this Agreement are the City, any mortgagees that may succeed to Operator's leasehold interest under the ground lease between Operator and fee owner of the Site or a replacement thereof, Operator and each of their respective successors and assigns. 6.6. GOVERNING LAW. This Agreement shall be governed by the laws of the State of California. 6.7. COUNTERPARTS. This Agreement may be executed in any number of counterparts, each of which shall constitute one original and all of which shall be one and the same instrument. 6.8. TERMINATION. The City may elect to terminate this Agreement pursuant to Section 3.1.3 hereof. Operator may elect to terminate its participation in the Program and this Agreement by providing written notice to the City (a) if the City fails to deliver to Operator any amounts owed to Operator pursuant to the Program within thirty (30) days after Operator's written request for payment or (b) in its sole discretion for any reason during the term of this Agreement. In the event of any early termination of this Agreement, Operator (or its successor, as applicable) shall not be obligated to return any amounts previously paid to it by the City pursuant to the Program. 6.9. OPERATIONS COVENANT LIMITED TO LEASEHOLD INTEREST. The restrictions, obligations, covenants, and benefits of this Agreement only apply to the Operator and the Operator's leasehold interest in the Site and do not apply to or burden in any way the fee owner's interest in the Site. [END -- SIGNATURES ON NEXT PAGE] IIIIII IIIIIII IIIII IIIII IIII IIIIII IIIII III IIIII IN INsere 1 ae£9i94s7P OPERATIONS COVENANT -6- FOR HOTEL INCENTIVE PROGRAM IN WITNESS WHEREOF, the City and Operator have executed this Agreement by duly authorized representatives on the date first written hereinabove. "CITY" THE CITY OF PALM SPRINGS, a municipal corporation and charter city By. David H. Ready City Manager ATTEST: WWI)5Y C, r couN.IL � b b�17__ 8� Ab23b ?City Clerk G V�Y Of F,�NLAA s l t�GS APPROVED S ORM: By: Douglas olland City A orney "OPERATOR" RIVIERA REINCARNATE, LLC a Delaware limited liability company By: RECP/Noble House Riviera Venture, LLC, its Sole Member By: Westgroup Riviera, LLC, its Managing Member By: Noble House Associates, LLC, its Managing ber By: Name: M.P. Dyer Title: General Counsel IIIIII(IIIIII(IIII IIIII(III IIIIII IIIII III IIIII IIII IIII g6£0945 96 277P OPERATIONS COVENANT -7- FOR HOTEL INCENTIVE PROGRAM ACKNOWLEDGMENT State of Washington ) County of King ) On A'4V'4a, aoia- before me, 1111-44 7 mACA'A= D ^ � (insert name of notary) Notary Public, personally appeared � - ? • 'Dri/ e who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature (Seal) DONNA J. MACKNER STATE OF WASHINGTON NOTARY PUBLIC W COMMISSION EXPIRES 11-01 13 IIIIII IIIIIII IIIII IIIII IIII IIIIII IIIII III IIIII IIII IIII 201 ee 9 f 194s7P OPERATIONS COVENANT -9- FOR HOTEL INCENTIVE PROGRAM EXHIBIT "A" LEGAL DESCRIPTION OF SITE That certain real property located in the City of Palm Springs, County of Riverside, State of California, more particularly described as: THE SOUTH 521 -FEET OF THE WEST HALF OF THE SOUTHWEST QUARTER OF THE SOUTHWEST QUARTER OF SECTION 24, TOWNSHIP 4 SOUTH, RANGE 4 EAST, SAN BERNARDINO BASE AND MERIDIAN. zat IIIII IN IRE 11111 III 111111 III 11110E 1a of 117P EXHIBIT"A" OPERATIONS COVENANT FOR HOTEL INCENTIVE PROGRAM ACKNOWLEDGMENT OF INSTRUMENT (Cal. Civil Code Section 1181) State of California ) County of Riverside ) ss. City of Palm Springs ) On June 25, 2012, before me, JAMES THOMPSON, CITY CLERK, CITY OF PALM SPRINGS CALIFORNIA, personally appeared DAVID H. READY, who I personally know is the CITY MANAGER of the CITY OF PALM SPRINGS whose name is subscribed to the within instrument and acknowledged to me and that he executed the same in his/her official and authorized capacity on behalf of the City of Palm Springs, a California Charter City. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and the official seal of the City of Palm Springs, California, this 25t" day of June, 2012: �OF FALM sp Q V N ^w.m` C'0</FOM1N�P Signature: AMES THOMPSON, CITY CLERK City of Palm Springs, California Title or Type of Document: -Operations Covenant— Riviera Reincarnate, LLC Document Date: June 1, 2012 Number of Pages: 10 11111111111111111111111111111111111111111111111111111111 as 201 za of 11 �P ii 2 it