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DATE: June 17, 2015 CONSENT AGENDA
SUBJECT: APPROVE ACTIONS RELATED TO THE SUBDIVISION IMPROVEMENT
AGREEMENT FOR TRACT MAP NO. 31848-1 (AVALON)
FROM: David H. Ready, City Manager
BY: Public Works and Engineering Department
SUMMARY
This action will rescind the City Council's approval on February 18, 2015, of an amendment to
the Subdivision Improvement Agreement ("SIA") for Tract Map No. 31848-1 (the development
identified as "Avalon"), located on the east side of Indian Canyon Drive between the
Whitewater River and San Rafael Drive, and approve a new First Amendment to the original
SIA.
RECOMMENDATION:
1. Rescind approval of the First Amendment to a Subdivision Improvement Agreement for
Tract Map 31848-1 ("Avalon"), A5393, between LV Palm Springs Village, LLC, and the City
of Palm Springs, approved February 18, 2015; and
2. Approve a First Amendment to the Subdivision Improvement Agreement for Tract Map
31848-1 ("Avalon"), A5393, between LV Palm Springs Village, LLC, and the City of Palm
Springs; and
3. Authorize the City Manager to execute all necessary documents.
STAFF ANALYSIS:
LV Palm Springs Village, LLC, (the "Successor Subdivider"), is the successor to SunCal PSV,
LLC, a Delaware limited liability company ("SunCal"), the Original Subdivider. SunCal and the
City entered into the original SIA dated December 18, 2006, (A5393), and recorded on
February 16, 2007, in conjunction with recordation of Tract Map 31848-1 consisting of
approximately one-half of the Palm Springs Village project, generally located at the northeast
corner of North Indian Canyon Drive and San Rafael Drive. The City has continued to extend
the effectiveness of the SIA through a series of resolutions adopted by the City Council, and
the current termination date of the Original SIA was May 4, 2015.
ITEM NO.
City Council Staff Report
June 17, 2015— Page 2
Tract Map 31848-1 Subdivision Improvement Agreement
As set forth in the SIA, the Successor Subdivider, is obligated to construct and install certain
improvements to accommodate the development of the Tract. The SIA also required the
posting of bonds as security for the faithful performance of the work required under the SIA. In
accordance with the SIA, SunCal previously completed substantial components of the required
work; however, some work was not completed, or some of the work that had been installed
has deteriorated or been vandalized, and may otherwise require repair.
The Successor Subdivider was previously in the process of selling its interests in the project to
FCA CA, LLC, and had opened escrow to affect the ultimate sale and transfer of the project.
Pursuant to the terms of the sale, the FCA CA, LLC, had agreed to assume all of the
obligations of LV Palm Springs Village, LLC, under the SIA and to replace the existing security
with the replacement bonds. Unfortunately, the sale of the project from the Successor
Subdivider to FCA CA, LLC, did not occur.
On May 4, 2015, the Successor Subdivider submitted a letter advising: (1) the purchase and
sale of the Property to the Assigned Subdivider will no longer take place, (2) that the SIA
Assignment should be disregarded as null and void, ab initio, (3) the Original SIA should
remain the governing document between the Successor Subdivider and City, and (4)
requested an extension of the time period for completion of the "Works of Improvement' set
forth in Section 2.1(ii) of the Original SIA to May 4, 2016.
Accordingly, staff has prepared a replacement document to function as the First Amendment to
the Original SIA, which maintains the Successor Subdivider as the responsible party to
performing the required obligations identified in the Original SIA and incorporates the
requirement to annex the development into the City's Community Facilities District (CFD) No.
2005-1 for public safety services.
Staff recommends that the First Amendment to the Original SIA previously approved by the
City Council on February 18, 2015, be disregarded as null and void, and that the City Council
approve the First Amendment included as Attachment 2 as its replacement. The First
Amendment provides for a time extension to the Original SIA to May 4, 2016, for completion of
the "Works of Improvements" set forth in Section 2.1(ii) of the Original SIA.
ENVIRONMENTAL IMPACT:
Section 15061 (b)(3) of the California Environmental Quality Act ("CEQA") Guidelines exempts
activities that are covered under the general rule that CEQA applies only to projects that have
the potential to cause significant effects on the environment. Where it can be seen with
certainty that there is no possibility the activity in question may have a significant effect upon
the environment, the activity is not subject to CEQA. The requested action requests approval
of an amendment to the Subdivision Improvement Agreement for Tract Map No. 31848-1 ,
which itself will not result in any new direct physical impacts to the environment. Therefore,
the requested action is considered exempt from CEQA.
02
City Council Staff Report
June 17, 2015— Page 3
Tract Map 31848-1 Subdivision Improvement Agreement
FISCAL IMPACT:
No fiscal impact at this time. Incorporating a requirement to annex the project into CFD No.
2005-1 will provide additional revenue for public safety services.
SUBMITTED:
Preep�arr�edd by: Approved by:
Marcus L. Fuller, MPA, P.E., P.L.S. David H. Ready, Esq. .
Assistant City Manager/City Engineer City Manager
Attachments:
1. Letter from LV Palm Springs Village, LLC, dated May 4, 2015
2. First Amendment to Original SIA
03
ATTACHMENT
04
I
05-14-15A06 :37 RCVD
LV PALM SPRINGS VILLAGE LLC
c/o Lehman Brothers Holdings Inc.
3121 Michelson Drive, Suite 200
Irvine,CA 92612
I
May 4,2015
VIA E-MAIL AND COURIER
City of Palm Springs
3200 E.Tahquitz Canyon Way
Palm Springs,CA 92262
Attn: Marcus L.Fuller,MPA,PE,PLS
Assistant City Manager/City Engineer
RE: Palm Springs Village—Subdivision Improvement Agreement
Ladies and Gentlemen:
Reference is made to that certain Subdivision Improvement Agreement dated December 18, 2006 and
recorded on February 16, 2007 as Document No. 2007-0 1 1 3033 in the Official Records of Riverside
County, California (the "Original SIA"), by and between the City of Palm Springs, California, a
municipal corporation("City"),and LV Palm Springs Village LLC,a Delaware limited liability company
("LV Palm Springs"), as successor-in-interest to SunCal PSV, LLC, a Delaware limited liability
company,relating to the development of the property described by Tract Map No.31848-1 "Avalon"(the
"Property"). Capitalized terms used herein and not otherwise defined shall be used herein with the
meaning ascribed to such terms in the Original SIA.
Reference is also made to that certain Agreement of Purchase and Sale and Joint Escrow Instructions
(Palm Springs Village) dated as of February 4, 2015, by and between LV Palm Springs and FCA CA,
LLC, a Delaware limited liability company (`Buyer"), as amended by that certain First Amendment to
Agreement of Purchase and Sale and Joint Escrow Instructions dated as of February 19, 2015 (as
amended,the"Purchase Agreement"),with respect to the sale of that Property(the"Sale'.
As you are aware, in connection with the Sale, LV Palm Springs and Buyer requested that the City enter
into that certain First Amendment to and Assignment of Subdivision Improvement Agreement(the"First
Amendment to SIA"),which First Amendment to SIA would only be effective upon the Close of Escrow
(as defined in the First Amendment)of the transaction described in the Purchase Agreement.
As you may also be aware,the Close of Escrow did not occur and the Sale contemplated by the Purchase
Agreement will no longer take place. Accordingly,the First Amendment to SIA should be disregarded as
null and void, ab inirio, and the Original SIA should remain the governing document between LV Palm
Springs and the City with respect to the matters set forth therein.
I
05
LEGAL US W. i-81501284.1 - -
May 4,2015
Page 2
Notwithstanding the termination of the Sale, LV Palm Springs hereby request that the City agree to an
extension of the time period for completion of the"Works of Improvements"set forth in Section 2.1(ii)of
the Original SIA until May 4, 2016.
If you have any questions, please feel free to contact the Elena Branzburg, Esq. at (213) 683-6129 or
elenabranzburgQ,gmail.com or Michael Masterson at (949) 2604675 or
michael.masterson(@,Iehmanboldinp.com.
Sincerely,
LV PALM SPRINGS VILLAGE LLC,
a Delaware limited liab' 'ty company
By:
Name:
..,....Title:
Authofted Signatory
cc: Eric Hoffman
Michael Masterson
Robert M. Keane,Jr.,Esq.
Elena Branzburg,Esq,
I
06
LEGAL_US_W#81501284.1
ATTACHMENT
07
WHEN RECORDED MAIL TO:
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attention: City Clerk
(Space above this line is for recorder's use)
FIRST AMENDMENT TO
SUBDIVISION IMPROVEMENT AGREEMENT
THIS FIRST AMENDMENT TO SUBDIVISION IMPROVEMENT AGREEMENT ("First
Amendment") is made this day of , 2015, by and among LV PALM
SPRINGS VILLAGE LLC,a Delaware limited liability company("Successor Subdivider"),and the
City of Palm Springs, California, a California charter city and municipal corporation ("City").
RECITALS
A. Successor Subdivider, as successor-in-interest to SunCal PSV, LLC, a Delaware
limited liability company("SunCal"),and the City entered into that certain Subdivision Improvement
Agreement dated December 18,2006,and recorded on February 16,2007,as Document No.2007-
0113033 in the Official Records of Riverside County,California(the"Original SIA"), relating to the
development of the property described by Tract Map No. 31848-1 approved by the City and filed in
2006, (the"Property"). Initially capitalized terms used and not otherwise defined herein shall have
the meanings set forth in the Original SIA.
B. The City has continued to extend the effectiveness of the Original SIA through a
series of resolutions adopted by the City Council, and the last termination date of the Original SIA
was May 4, 2015.
C. As set forth in the Original SIA, Successor Subdivider, (as successor-in-interest to
SunCal),as Subdivider, has agreed to construct and install certain improvements to accommodate
the development of Tract Map No. 31848-1. Pursuant to Section 4.1(a) of the Original SIA,
Subdivider has provided the City with those certain bonds as required pursuant to the terms of the
Original SIA, each as security for the Successor Subdivider's faithful performance of the work
required under the Original SIA, including without limitation, construction of the Works of
Improvement (the "Required Securities").
D. In accordance with the Original SIA, Subdivider installed, on the Property and on
adjoining property subject to Tentative Tract Map 31848 (the"Adjoining Property", and together
with the Property, collectively, "Real Property"), substantial components of the Works of
Improvement that were originally inspected by the City (the "Installed Improvements").
Subsequent to installation of the Installed Improvements,work ceased on the Real Property and the
Installed Improvements may have, in some cases, deteriorated or been vandalized, and may
otherwise require repair.
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E. On February 18, 2015, the City Council of the City approved that certain First
Amendment to and Assignment and Assumption of Subdivision Improvement Agreement, (the"SIA
Assignment"), to facilitate a request by the Successor Subdivider to transfer and assign the
Original SIA to FCA CA, LLC, a Delaware limited liability company, ("Assigned Subdivider"),
pursuant to a proposed purchase and sale of the Property which would, among other things, have
the Assigned Subdivider assume all of the obligations of the Original SIA, replace the Required
Securities with replacement securities,and extended the time period for performance of the Original
SIA.
F. The SIA Assignment was effective upon the close of escrow of the purchase of the
Property by the Assigned Subdivider; however, by letter dated May 4, 2015, the Successor
Subdivider notified City that (1)the purchase and sale of the Property to the Assigned Subdivider
will no longer take place, (2) that the SIA Assignment should be disregarded as null and void, ab
initio, (3) the Original SIA should remain the governing document between the Successor
Subdivider and City,and(4) requested an extension of the time period for completion of the"Works
of Improvement" set forth in Section 2.1(ii) of the Original SIA to May 4, 2016.
AGREEMENT
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are acknowledged, the parties agree as follows.
1. Amendment to Original SIA; Extensions of Time Periods for Performance. The
Original SIA contains various dates for performance and the obligation for continuous performance
by the Subdivider following the commencement of construction of the Works of Improvement (as
required by Section 2.4 of the Original SIA)that have not been met and which, due to the passage
of time, are not susceptible of cure and that will not be capable of cure until such time as final
development plans have been approved for the Property To address this and to extend the time
period for performance of obligations underthe SIA,City and Successor Subdivider hereby agree to
amend the Original SIA as set forth below.
1.1 Commencement and Completion. The "Completion Date" as that term is
used in the Original SIA shall hereby be retroactively extended from May 4, 2015,to May 4,
2016.
2. Amendment to Original SIA:Community Facilities District. Section 1.2 of the Original
SIA references other obligations as identified in conditions of approval associated with the Tentative
Map for Tract Map No. 31848-1, as otherwise identified on Exhibit "B" to the Original SIA. As a
condition of the City's approval of this First Amendment to the Original SIA, the Successor
Subdivider hereby agrees to incorporate a new condition of approval requiring Successor
Subdivider's consent to the legal annexation of the Property into the City's Community Facilities
District No.2005-1 (Public Safety Services)upon request by the City,and accordingly to amend the
Original SIA as set forth below.
2.1 Section 1.2(b) is hereby added to the Original SIA to read as follows:
1.2(b) Annexation to Community Facilities District (CFD) No. 2005-1 (Public Safety
Services). Successor Subdivider agrees to support annexation of the Property into
Community Facilities District (CFD) No. 2005-1 (Public Safety Services). Successor
Subdivider further agrees to waive any right of protest or contest such annexation,provided
that the amount of any assessment for any single family dwelling unit (or the equivalency
Page 2 of 5 09
thereof when applied to multiple family, commercial or industrial) shall not exceed $500
annually per dwelling unit or dwelling unit equivalency unit, subject to an annual consumer
price index escalator. Upon request by City,Successor Subdivider shall execute and return
all necessary waivers, ballots and other forms required by City to facilitate annexation of the
Property into CFD No. 2005-1.
3. Effect of Amendment on Interpretation of SIA.
3.1 Terms: No Other Changes. Unless otherwise expressly indicated herein,all
references in Original SIA and in this First Amendment to"this Agreement"orthe"SIA"shall
mean and refer to the Original SIA as modified by this First Amendment and other than the
amendments and changes herein, all provisions of the Original SIA remain unmodified and
in full force and effect. In the event of any conflict or inconsistency between the terms of the
Original SIA and this First Amendment, the terms of the Original SIA shall control.
4. Miscellaneous Provisions.
4.1 Effectiveness. Notwithstanding anything to the contrary contained in this
Assignment, this Assignment shall be null and void, ab initio, if the Close of Escrow for the
sale of the Real Property to Assignor pursuant to the terms and conditions of the Transfer
Agreement fails to occur on or before the Outside Closing Date (as defined in the Transfer
Agreement).
4.2 Entire Agreement. This First Amendment, together with the Original SIA,
constitutes the entire agreement between the parties in regards to the subject matter
contained herein.
4.3 Recitals. The Recitals above are incorporated herein by reference.
4.4 Governing Law. This First Amendment shall be governed by, interpreted
under,and construed and enforceable in accordance with the laws of the State of California.
4.5 Interpretation. All of the parties hereto have been represented by legal
counsel of their choice are not relying on any statement of the other party in entering herein.
Each party has cooperated and participated in the drafting and the preparation of this First
Amendment. Hence, in any construction to be made of this First Amendment, no ambiguity
shall be resolved against any party by virtue of that party's participation in the drafting of this
First Amendment.
4.6 Severability. If any provision, section, paragraph, clause or sentence in this
First Amendment is declared to be illegal,void, invalid,or unenforceable by a court or other
authority with jurisdiction thereof, the remaining provisions, paragraphs, clauses, and
sentences shall be severable and shall remain in full force and effect. The parties agree
that a void or invalid paragraph, clause or provision shall not affect the validity or
enforceability of the remaining provisions of this First Amendment.
4.7 Counterparts. This First Amendment may be executed simultaneously in
counterparts, each of which shall be deemed an original, but all of which, together, shall
constitute one and the same instrument.
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L
4.8 Survival. All representations,warranties,covenants and agreements made
by the parties hereunder shall be considered to have been relied upon by the parties and
shall survive the execution,delivery and performance of this First Amendment and all other
documents contemplated herein.
4.9 Successors and Assigns. This First Amendment shall be binding upon and
inure to the benefit of the successors, assignees, personal representatives, heirs and
legatees of Successor Subdivider and the City and shall be binding upon and inure to the
benefit of all successors and assigns to Successor Subdivider's right, title and interest in
and to the Property.
4.10 Amendment. Any amendment to this First Amendment shall not be binding
unless in writing and executed by Successor Subdivider and the City.
4.11 Additional Documents. Each of the parties shall each execute and deliver to
the other parties, upon demand,such further documents,and shall take such further actions
as are necessary or desirable to effectuate the intent and purposes of this First Amendment.
4.12 Authority. The persons signing below represent that they have the authority
to bind their respective party, and that all necessary board of directors', shareholders',
partners', agency's or other approvals have been obtained.
[Signatures on following pages]
Page 4of5 it
IN WITNESS WHEREOF, City and Successor Subdivider have executed this First
Amendment as of the day and year first written above.
CITY OF PALM SPRINGS
ATTEST:
By
James Thompson, City Clerk David H. Ready, City Manager
APPROVED AS TO FORM:
Doug Holland, City Attorney
"SUCCESSOR SUBDIVIDER" LV PALM SPRINGS VILLAGE LLC,
a Delaware limited liability company
By:
Name:
Title:
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 notthe truthfulness,accuracy,
or validity of that document.
State off 1
County of I 1
On before me, (here
insert name and title of officer), personally appeared ,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)
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