HomeMy WebLinkAbout03519 - PALM MOUNTAIN CO (MCWETHY) SETTLEMENT AGR & RELEASE OF CLAIMS Palm Mountain
First Amend to MOU btwn
Agency & City
AGREEMENT #3519
Motion, 8-7-96 related
FIRST AMENDMENT TO MEMORANDUM OF UNDERSTANDING
This FIRST AMENDMENNT�� TO MEMORANDUM OF UNDERSTANDING
("Amendment") dated this %1� day of August, 1996, is entered into
by and among the CITY OF -PALM SPRINGS, a municipal corporation
("City") , the REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS,
CALIFORNIA, a public body, corporate and politic ("Agency") and
PALM MOUNTAIN COMPANY, a California corporation ("Palm Mountain") .
A. On or about April 12, 1995, the City, the Agency and Palm
Mountain entered into a Memorandum of Understanding ("MOU") the
terms of which are incorporated herein and re-acknowledged by this
Amendment. All capitalized terms in the MOU shall have the same
meaning in this Amendment unless specifically noted otherwise.
B. The parties hereto desire to modify the MOU and
acknowledge that the modifications to the MOU as set forth below
are in the best interests of the parties. Except as expressly
modified by this Amendment, the MOU remains unmodified and in full
force and effect.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties hereby agree
to amend the terms of the MOU in the following particulars only:
A G R E E M E N T
I. Recital A is amended to delete the word "Velardo" and is
replaced with the word "Belardo_ "
2. Section 2.a(1) shall be deleted and replaced with the
following :
" (1) OPA. Palm Mountain, City and Agency will amend
the existing Owner Participation Agreement to
extend tax increment and transient occupancy tax
obligations of the City and/or Agency to Palm
Mountain until July 1, 2008. The Owner
Participation Agreement shall be deemed to run with
the land and shall be freely assignable and
transferrable by Palm Mountain to any third party.
If Palm Mountain fails to (i) commence construction
of the golf course project by entering into
construction contracts for the project, obtaining
all necessary permits and commencing grading by
July 1, 2000; or (ii) the golf course project is
not completed and fully operational by July 1,
2002, then on July 1, 2005, the Owner Participation
Agreement and the assistance involved hereunder
shall automatically terminate. "
4871014094-00123009269.4 08=96 ORIGINAL BID
AND/OR AGREEMENT
3 . The second sentence of Section 2.b(7) shall be deleted
and replaced with the following two (2) new sentences:
"The Development Agreement will
include a commitment to permit the
development of a maximum of twenty
(20) residential units on the
privately owned Coler property
necessary for the golf course
project generally depicted on
Exhibit "C" attached hereto (subject
to the current zoning and other
development constraints) , in
addition to the existing structures.
The twenty (20) residential units
may consist of two-story villas as
configured on Exhibit "D" attached
hereto. Palm Mountain agrees and
covenants that approximately ten
(10) acres of hillside located on
the Coler property will be
designated as open space in
perpetuity or shall be donated to
the City as open space. "
4. Section 2.b(7) shall be amended by deleting the last
sentence and adding in place thereof the following:
"Palm Mountain have one (1) year from the date
hereof to elect whether or not to proceed with the
off-site housing project. If Palm Mountain decides
to proceed, a disposition and development agreement
shall be negotiated and executed within ninety (90)
days thereafter. If Palm Mountain elects not to
proceed with the off-site housing project their
funds shall be released from this MOU and be made
available for other housing projects. The
Settlement Agreement shall not contain provisions
relating to the off-site housing project, and the
dismissal of the Lawsuit shall proceed in
accordance with Section 4 below. "
5. A new section 2.b(9) will be added and will read as
follows:
11 (9) Monument. The City shall allow Palm
Mountain to erect and maintain a
monument sign at the intersection of
Palm Canyon and Chino in accordance
with a sign program approved by the
City. Palm Mountain shall install
and maintain the monument at its
sole cost and expense. The monument
sign shall be installed and
437101408400123009M69.4 08102196 -2-
maintained in compliance with all
City laws, ordinances and
regulations and City shall grant an
encroachment permit therefor. "
6. Section 4 shall be deleted and replaced with the
following:
"4. DISMISSAL OF LAWSUIT. Within thirty (30) days
after the date of this Amendment the parties shall
execute the Settlement Agreement and file a
dismissal of the Lawsuit with prejudice. "
7. In the event of any conflict with the terms of the MOU
and this Amendment, the terms of the Amendment shall control-
IN WITNESS WHEREOF, the parties have executed this First
Amendment to Memorandum of Understanding as of the day first
written above.
CITY OF PALM SPRINGS, a municipal
corporation
By: PkQ�G G
Mayor
�ATTEST: Q
Ctty Clerk
APPROVED AS TO FORM:
City Attorney
fri tCYEL 5Y , li'f C011IVCIL REDEVELOPMENT AGENCY OF THE
CITY OF PALM SPRINGS, CALIFORNIA, a
�B 9 (lcrim public body, corporate and politic
f�3r�g Hy: ��
. ...:•.w.•:3= ::E `- c'. Chairman -
,�7 ATTEST: r/
[signatures continue on nex page. City Clerk
4971014099,-WI213009263.4 aMOV96 -3-
ATTE,ST:
Assistant e`etary
APPROVED AS TO FORM:
Agency Coun el ' �/
PALM MOUNTAIN COMPANY,
a California corporation
�r�
By:
President
APPROVED BY THE CITY CC�.INCIL
a EDEv
44MM40e4-Wi7nOMe3.4 .oa,02196 -4-
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Palm Mountain co. (McWethy)
Settlement Agr & Release of
Claims
AGREEMENT #3519
10-31-96
SETTLEMENT AGREEMENT,AND RELEASE OF CLAIMS
This Settlement Agreement and Release of Claims ("Agreement") is entered into by and
between William H. McWethy, Jr. and The Palm Mountain Company on the one part
(collectively referred to as "McWethy"), and The City of Palm Springs, Rob W. Parkins, Sonny
Bono and Earl Neel on the other part (collectively referred to as "Palm Springs"). Both
McWethy and Palm Springs are collectively referred to as the "Parties." This Settlement
Agreement and Release of Claims is made on this �fday of October, 1996 ("Settlement
Date,").
1. RECITALS: This Agreement is made with reference to the following facts:
1.1 A dispute has arisen between McWethy and Palm Springs relating to
McWethy's claims of breach of contract, breach of the covenant of good faith and fair dealing,
breach of oral contract, fraudulent inducement, intentional interference with prospective
economic advantage; and conspiracy, as more particularly set forth in an action commonly
known as: William H. McWethy. Jr. v. The City of Palm Springs, et al., filed in Riverside
Superior Court, Palm Springs Branch, No. I-69860 ("litigation"). All claims of McWethy
against Palm Springs contained in the litigation by McWethy are referred to as the "Claims."
1.2 It is the intention of the parties hereto to settle and dispose of, fully and
completely, any and all claims, demands and causes of action consisting of the Claims.
2. RELEASES AND PROMMES: In consideration of the releases contained
therein, and for other good and valuable consideration hereinafter described and received by
each party, McWethy promises, agrees and specifically releases as follows:
2.1 Release of Palm Springs: Except as to such rights or claims as may be
created by this Agreement, the Memorandum of Understanding ("MOU") dated April 12, 1995
and the Palm Mountain Owner Participation Agreement, McWethy, for themselves, their
spouses, heirs, executors, administrators,predecessors, successors, assigns, agents, and all other
persons or entities who may claim through them, do hereby release and forever discharge Palm
Springs and their respective heirs, spouses, executors, administrators, predecessors, successors,
assigns, agents, employees, principals, officers, directors, shareholders, affiliates, subsidiaries,
related companies from any and all manner of action, suit, lien, damage, claim (criminal or non-
criminal) or demand of whatsoever nature set forth in the Claims.
2.2 Consideration•to•McWethy: Consideration to McWethy is based upon the
expectation of full reliance of McWethy upon full and complete performance by Palm Springs
of the terms of the MOU dated April 12, 1995, (attached hereto as Exhibit "A"), the First
Amendment to Memorandum of Understanding dated August 7, 1996, attached as Exhibit "B"
and the Palm Mountain Owner Participation Agreement and amendment thereto. The
performance of consideration by Palm Springs, for-the benefit of McWethy is more specifically
set forth in Exhibits "A" and "B" attached hereto.
(Page 1 of 5)
2.3 Promises of McWethv: In addition to the release set forth in this
Agreement from McWethy, McWethy agrees that they will file no actions, petitions, complaints
(administrative or judicial) or claims in regards to those set forth in the Claims. It is specifically
noted that this Agreement is a full and final settlement of the Claims and all causes of action
against Palm Springs which were contained in the Litigation, except for any rights created by
this agreement.
2.4 Full Authority: Both McWethy and Palm Springs represent and warrant
that they have not previously transferred any interest in the Claims to any other party. The
Parties further represent and warrant that each will defend the other, hold harmless and
indemnify the other and their respective spouses, heirs, executors, administrators, agents,
predecessors, successors, assigns, employees, principals, officers, directors, shareholders,
affiliates, subsidiaries, and any related entities or companies from any and all manner of action,
suit, lien, damage (including attorney's fees and costs), set forth in the Litigation which are
brought by a third party.
2.5 Release of McWethy: Except as to such rights or claims as may be created
by this Agreement, Palm Springs, by this Agreement, for themselves, their spouses, heirs,
executors, administrators, predecessors, successors, assigns, agents, principals, shareholders,
officers, directors, employees, affiliates, subsidiaries, and any related entities or companies, who
may claim through Palm Springs, does hereby release and forever discharge McWethy and their
respective spouses, heirs, executors, administrators, predecessors, successors, assigns, agents
and all other persons or entities from any and all manner of action, suit, lien, damage (including
attorney's fees and costs), claim or demand of whatsoever nature heretofore or hereafter arising
out of the Claims.
2.6 Promises of Palm Springs: In addition to the release set forth in this
Agreement for Palm Springs, Palm Springs agrees that it will file no actions, petitions,
complaints or any claims with any court or administrative agency, in regards to any facts or
actions arising out of the Claims. It is specifically noted that this Agreement is a full and final
settlement of any and all claims or demands by McWethy, any all causes of action against
McWethy which arose or may have arisen prior to the Settlement Date, except for any rights
created by this Agreement.
3. MISCELLANEOUS: The following general provisions shall apply:
3.1 Entire Agreement: This Agreement between McWethy and Palm Springs
is the entire agreement and understanding between the parties regarding the Claims and merges
all prior discussions between the parties. No claimed oral agreement with respect to the matters
herein shall be considered any part of this Agreement. No modification or waiver of any of
these provisions shall be valid unless it is in writing and signed by an authorized representative
of the party against whom it is sought to be enforced. The Recitals are an integral part of this
Agreement and shall be used to interpret this Agreement if the need arises.
(Page 2 of 5)
3.2 integration: Interpretation. The Parties hereto each warrant and represent
that (i) this Agreement has been reduced to these final written forms as a result of extensive and
good faith negotiations between the Parties through their respective counsel. The Parties declare
and represent that this Agreement including the exhibits and any other documents referenced
herein constitutes the entire agreement between the named parties with reference to the subject
matter hereof and supersedes any prior agreement, written or oral, with respect thereto,
notwithstanding the co-existence of any settlement agreements, (ii) said counsel have carefully
reviewed and examined this Agreement for execution by said parties, or any of them, and (iii)
any statute or rule of construction that ambiguities are to be resolved against the drafting party
shall not be employed in interpretation of this Agreement. If any provision of this Agreement
is held by a court of competent jurisdiction to be invalid, void or unenforceable for whatever
reason, the remaining provisions not so declared shall, nevertheless, continue in full force and
effect without being impaired in any manner whatsoever.
3.3 Settlement: This Agreement effects the settlement of the Claims which are
totally denied and contested by Palm Springs. Nothing contained herein shall be construed as
an admission by Palm Springs of any liability of any kind to McWethy. Palm Springs denies
any liability in connection with any Claim and intends merely to avoid litigation and buy his
peace.
3.4 Additional Documents: The parties will execute all such further and
additional documents as shall be reasonable, convenient, necessary or desirable to carry out the
provisions of this Agreement.
3.5 Governing Law, This Agreement has been negotiated and executed in the
State of California, and shall be interpreted and construed, and legal relations herein shall be
determined, in accordance with the laws of the State of California (excluding conflict of law
provisions).
3.6 Parties Bound: This Agreement is binding upon and shall inure to the
benefit of the parties hereto and their respective heirs, executors, administrators, successors,
assigns, agents, employees, principals, officers, directors, shareholders, affiliates, subsidiaries,
and related companies.
3.7 Authority: Each party hereto, including the responsible officer or
governing officer thereof, has read this Agreement and understands its contents. Each of the
officers or agents executing this Agreement on behalf of his/her respective municipal entity or
other business entity is empowered to do so and thereby binds such entity.
3.8 Severability: Should any part or provision of this Agreement be held
unenforceable or in conflict with the law of any jurisdiction, the validity of the remaining parts
or provisions shall not be affected by such holding.
3.9 Successors and Assigns. This release and discharge shall be a fully
binding and complete settlement between and inure to the benefit of the respective predecessors,
successors, assignees, heirs, personal representatives, estates, executors, administrators,
members, officers, directors, agents and employees of each of the Parties hereto.
(Page 3 of 5)
3.10 Legal Advice: Each party has received independent legal advice from their
attorneys, with respect to the advisability of making the settlement provided for herein, with
respect to the advisability of executing this Agreement.
3.11 Attorngy's Fees: Each party shall bear their respective attorneys' fees and
costs, arising from the action of its counsel, in connection with this matter. In the event that
any party to this Agreement should bring an action or other proceeding for the enforcement of,
or seek a declaration as to, or assert by way of defense, any term or provision of this Agreement
or any third party brings an action against either or both parties as the result of a breach of
either McWethy or Palm Springs, then there shall be an award of reasonable attorneys' fees and
costs to the prevailing party or parties, as the case may be.
3.12 Preparation: The parties to this Agreement, through their attorneys, have
participated in the preparation of this Agreement. In the event of any dispute or disagreement
involving the construction of this document, no inference will be drawn from the fact that any
party had principal responsibility for its preparation.
3.13 Future Assurances. Each party agrees to take any and all steps, perform
any acts, and execute any documents consistent with the terms and conditions of this Agreement
which may be needed or required to effectuate the terms, conditions, covenants and provisions
heretofore.
3.14 No Representations. In consideration of this Agreement and the Releases
contained herein, no other representations, express or implied, and no warranty or guaranty is
included or intended in this Agreement, or in any report, opinion, document or otherwise.
3.15 Counterparts: This Agreement, consisting of five (5) pages, may be
executed in counterparts, and when each party hereto has signed and delivered at least one such
counterpart, each counterpart shall be deemed an original, and when taken together with other
signed counterparts, shall constitute one agreement, which shall be binding upon and effective
as to all parties hereto.
THIS AGREEMENT IS EFFECTIVE ON THE DATE FIRST WRITTEN ABOVE AND
IS TO BE PERFORMED IN SAN DIEGO COUNTY, CALIFOIZNIA.
IT IS SO STIPULATED AND AGREED:
Dated: Oeteber _,49% THE CITYOF PALM SPRINGS
KJaVerw6�.w 4, 4 9.q.L 6, � �y10Jld�l,+�•�.Gu�
By: V
Dated: October 3,1996
ROB
(Signature Continued On Page 5)
(Page 4 of 5)
(Signatures Continued From Page 4)
Dated: October , 1996
SONNY BONO
Dated: October 1996
EARL NEEL
Dated: October 1996 WjiL , L /_�
WILLIAM H. MCWETHY, JR.
Dated: October 1996 THE PALM MOUNTAIN COMPANY
By: �u
(Page 5 of 5)
(Signatures Continued From Page 4)
Dated: October 1996 J
SONNY BON
Dated: October T, 1996
EARL NEEL
Dated: October 1996 UU& _
WJLLLAM H. MCWETHY, JR.
Dated: October ^, 1996 THE PALM MOUNTAIN COMPANY
By: V""Y
(Page 5 of 5)
Nam.,AM....d T.I.q.w.. o„,.y(•) SP•�for U.of Co1�'Lta
ITa 1 M. Pressman, Esq ar ;�054355) l `( tr 1l'•M� WUp;
Sohn W. Millar, Esq. (Bar f156804) M Op.,µt}NlClp;k-_�1V
KOLODNY & PRESSMAN, APC 3•)*' �tp510`-yp1
11975 El Camino Real, Sto, 201, Sari Diego, 92130
453-0309
Attomey(s)for_F7_�IeLI ....k,1F�.�.'._._.__......
SUPERIOR RIVERSIDE
,.,,..... ...._,....... COURT OF re! fP0RN1A,COlJli7'Y OF.......................................,........
(SUPEF710R,MUNICIPAL.or JUSTICE)
SUPERIOR COURT OF CALIFORNIA
..............._......,..,._.............,,,.,..... _.........._....... .....................
me(Na of Municipal or Justice Court District or of branch court If any)
Plalntiff(s): CASENUMEERINDIO 69860
WILLIAM H. MCWETHY, JR.
REQUEST FOR DISMISSAL
TYPE OF ACTION
Defendant(s): 0 Personal Injury.Property Damage and Wrongful Death:
THE CITY OF PALM SPRINGS, et al. [] Motor Vehicle[] Other
0 Domestic Relations 0 Eminent Domain
(Abbreviated Title) Othee(Specify) BREACH OF CONTRACT
TO THE CLERK:Please dismiss this action as follows:(Check applicable boxes.)
1. MX With prejudice 0 Without prejudice
2. [X Entire action Q Complaint only 0 Petition only 0 Cross-complaint only
�] Other:(Specify)*
KOLODNY P SSMynn-
.. C.
Dated;....
SEPTEMBE. . . ..P...27. , 1996
....
-If dismissal requested Is of specified parties ordy, of specified Attomey(s)ml W LL2,_•__ MCWETHY ,,,•_„ ............
causes of action only or of specified cross-complaints only, so
state and identify the parties,causes of action or cross-Complaints JOEL M. PRESSMAN
to be dismissed. (Type or print attomey(s)name(s))
TO THE CLERK:Consent to the above dismissal is hereby given-
Dated;............................................................._.........
--When a cross-Complaint(or Response(Marriage)seeWng affirma- Attorney(s)for_—_— ............. ..__._...�
five relief) Is on file, the attorney($) for the cross-complainant
(respondent) must sign this consent when required by CCP
581(1).(2)or(5). (Type or print attomey(s)name(a))
(To be completed by clerk)
QDismissal entered as requested on ..........................__............,.......................................................................................................
QDismissal entered an.............I.......... as to only..................................................................................................
0 Dismissal not entered as requested for ft follaxing reason(s),and attomey(s)notified on..........................................................................
Clerk
Dated................................................................................. 6y .Deputy
. era W.01e.1
p r fL Rul.•of Cour1
T1 F.J1014, covrlRnf C.SaiemI. REQUEST FOR DISMISSAL Nut.1=1
Revmad Erf.crlva July 1,197.2 CEB
r Palm Mountain Co.
MOIL - William H. McWethy
AGREEMENT #3519
Council Motion, 4.12-95
MEMORANDUM OF UNDERSTANDIN
L THIS MEMORANDUM OF UNDERSTANDING (this "Agreement") dated this
day of April, 1995, is entered into by and among the CITY OF PALM SPRINGS
("City"), the REDEVELOPMENT AGENCY OF THE CTTY OF PALM SPRINGS ("Agency"),
and PALM MOUNTAIN COMPANY, a California Corporation ("Palm Mountain").
RECITALS:
A. Palm Mountain is currently the owner of that certain real property located at 155
S. Velardo in the City of Palm Springs, County of Riverside, State of California which is
currently improved and operating as the Holiday Inn Palm Mountain Resort Hotel ("Palm
Mountain Property").
B. Pahn Mountain has previously proposed to develop portions of the Palm Mountain
Property together with other property into a destination resort with an 18-hole PGA rated
championship quality golf course with an expanded hotel and residential component together with
other amenities (the "Project"). A general depiction of the real property affected by the
proposed Project is attached hereto as Exhibit "A" and incorporated herein by reference. The
exact boundaries will be developed during the planning process.
C. A dispute currently exists with respect to the Project between the City and Palm
Mountain as evidenced by that certain action filed by Palm Mountain against the City and certain
of its officials in case no. 69557 in the Superior Court of the State of California County of
Riverside, Indio Branch (the "Lawsuit").
D. The general terms and conditions of the settlement of the Lawsuit are set forth
herein and shall be utilized by the parties negotiating the settlement agreement, and including
the golf course and housing development agreements, as described hereinafter.
E. In the effort to reach agreement, Palm Mountain has eliminated (1) the request
for additional cash participation by the City in the amount of$400,000, (2)payment by the City
for open space in the amount of$1,000,000, and (3) specific reference to assistance by the City
in securing property for overflow parking and storage of maintenance vehicles and equipment.
NOW, THEREFORE, the parties hereto agree as follows:
1. TOLLING AGREEMENT. Concurrently with the execution and delivery
of this Agreement, the parties shall enter into a Tolling Agreement in the form attached hereto
as Exhibit "B" and incorporated herein by reference.
F5210531014084-006312139819.3 m04107195 -I-
-r
2. DEVELOPMENT TERMS AND CONDITIONS.
a. Las Palmas Project.
(1) OPA. Palm Mountain, City and the Agency will amend
the existing Owner Participation Agreement to extend tax
increment and transient occupancy tax obligations of the
City and/or Agency to Palm Mountain for an additional
seven (7) year period. The Owner Participation Agreement
shall be nontransferable and not run with the land.
(2) Fees and Improvements._ The City will defer the payment
of flood control fees until the issuance of building permits
with respect to each lot, to be paid by each lot owner.
Pahn Mountain will complete right-of--way improvements
and undergrounding of utilities in and on Via Monte Vista,
in front of Point Las Palmas subdivisions.
b. Golf Course Project. With respect to the Public/Private Golf
Course Project (at least one-half (112) of the play on the golf course will be reserved for the
public, including long-term tie-in relationships with Palm Springs hotels):
(1) EIR Deposit_ The City and Palm Mountain will each
advance the sum of S100,000 into a bank account, which
will be utilized to pay for the preparation and
implementation of an Environmental Impact Report meeting
the requirements of law, economic feasibility study and
other related studies and reports. The parties estimate that
the cost of the foregoing will be approximately $200,000.
The City's share will be fifty percent (50%) of the cost not
exceeding $100,000.
(2) Ground Lease. The City will enter into a long-term
subordinated Ground Lease (longest legally feasible but not
less than 55 years) with Palm Mountain with respect to
city-owned property within.Section 9 as depicted on Exhibit
"A" required to build the golf course and for required
environmental mitigation, for $1.00 per year. Palm
Mountain solely shall negotiate with the County regarding
the lease of County-owned property necessary for the golf
course. City will cooperate with Palm Mountain and, in
this regard, upon the written request of Palm Mountain,
and only upon such written request, will participate directly
in the negotiations_
FS210531014OW"312139879.3 m04/07/95 -2-
(3) Environmental Mitigation. The City will cooperate with
Palm Mountain in connection with fees and/or
environmental mitigation. In that regard, the City will
provide Palm Mountain with assistance with respect to
processing, fees and/or environmental mitigation on a
"most favored nation" basis based on other transactions of
similar magnitude approved by the City Council since
April, 1992; notwithstanding the foregoing, nothing herein
shall limit the City's ability to provide greater assistance in
their sole and absolute discretion.
(4) Acquisition_ The City will assist Palm Mountain with
acquisition of privately owned property necessary for the
Golf Course Project to the extent permitted by law and, if
necessary, will commence eminent domain proceedings by
holding a hearing on adoption of a Resolution of Necessity,
but the City will have no obligation to take any particular
action following said hearing.
(5) FInancing Assistance. If requested by Palm Mountain,
City will provide conduit bond financing for the Golf
Course Project provided that the general fund of the City
will not be used by or committed to any such financing.
Any such financing shall be on a reasonable basis, as
recommended by independent consultants, and shall not
substantially imperil the City's ability to market other
public financings-
(6) Conditions Precedent. The above obligations are
conditioned upon the following:
(aa) acquisition of the privately owned property for an
amount not more than $2,000,000 unless such
amount is waived by Palm Mountain;
(bb) an agreement between Palm Mountain and the
County of Riverside pursuant to which the County
agrees to lease to Palm Mountain the golf course
land; and
(cc) the project is determined to be economically
feasible based upon a determination by an
independent financial study prepared by a land
economist jointly selected and employed by the
parties. "Economically feasible" means that with
the public assistance provided for herein, or such
F52\0531014084-0063M398793 m04/07/95 -3-
additional assistance as City in its sole discretion
may elect to provide, taking all project revenues
and expenses into account, Palm Mountain can
achieve a rate of return equal to or greater than
fifteen percent (15%) based on a factor of net
operating income divided by total development costs
determined at the end of the third year of operation
unless waived by Palm Mountain.
( ) Development_Agreement. The City and Palm Mountain
will enter into a Development Agreement with respect to
the golf course and disposition and development agreement
with respect to an off-site housing project to be identified
and approved by the parties. The Development Agreement
will include a commitment to permit the development of
not to exceed twelve (12) residential units on the privately
owned property necessary for the golf course project
(subject to current zoning and other development
constraints) in the event the golf course project does not
proceed. The off-site housing project will involve the City
(and/or its Redevelopment Agency) and Palm Mountain
entering into a disposition and development agreement
pursuant to which the City will infuse an amount not
exceeding $500,000 and Palm Mountain will be obligated
to construct and/or rehabilitate housing units to be occupied
by persons of low and moderate income, with appropriate
restrictive covenants as required by law to preserve the
housing stock. The exact project will be determined as
part of the final Settlement Agreement and the terms
thereof, including the subsidy per housing unit, shall be in
general conformity with the type of similar agreements
entered into by the City and/or Redevelopment Agency
within the last five (5) years.
(8) Right of First Refusal. The Development Agreement for
the Golf Course will include a provision giving The Palm
Mountain Company a twelve (12) year exclusive right of
first negotiation for the development of the Golf Course
within the Tachevah Basin ("Exclusive Period"). During
said time, if the City wishes to negotiate with any party for
the lease or sale of the City's property in the Tachevah
Basin, the City will first negotiate with The Palm Mountain
Company for at least a 120-day period ("Negotiating
Period") to see whether a mutually satisfactory agreement
can be reached for the development on such property by
The Palm Mountain Company. If such negotiations are
MW531014094-0063=9979.3 m04107195 -4-
unsuccessful, the City may not, thereafter, negotiate a We
or lease on terms substantially similar to terms acceptable
to Palm Mountain during the Negotiating Period without
commencing a new Negotiating Period with Palm
Mountain. City shall disclose to Palm Mountain all offers
and/or proposals during the Exclusive Period.
3. AGRE0,1ENT RE FUTURE TH[RD PARTY LITIGATION. In the
event the appropriate entitlements for the golf course are approved by the City Council but
thereafter litigation is filed against such entitlements, the City and Palm Mountain will each
cooperate and diligently defend the matter. Palm Mountain shall pay all costs of defense of any
such matter. If an adverse judgment is rendered, City may either appeal the matter or, if the
action can be corrected, correct the matter, each at the expense of Palm Mountain. At any time
during the course of the litigation, or after adverse judgment, Palm Mountain may elect to
discontinue paying the defense cost so long as they are current on prior incurred expenses_ If
they elect to discontinue paying the cost of defense, neither party shall have any further liability
to the other, and City may thereafter abandon defense of the matter.
4. DISIVUSSAI, OF LAWSUIT. Upon proper authorization and execution
of the Settlement Agreement, the current lawsuit between the parties, with the amount in
controversy being substantially in excess of one million dollars, shall be dismissed with
prejudice.
5. DEFAULT DEFINED. Default by either party in the performance of the
terms of the Settlement Agreement shall permit either party to assert any and all claims they may
have one against the other for damages. Grounds for default shall be limited to the following:
a. Palm Mountain. By Palm Mountain (unless excused by the other
party's default):
(1) Failure to deposit funds for performance of environmental
and economic feasibility studies.
(2) Failure to negotiate in good faith with respect to the
acquisition of the County Property and necessary privately
owned property.
(3) Failure to present the golf course project to Planning
Commission for approval within one (1) year from the date
of the Settlement Agreement (unless determined not
feasible).
FSM0531014064-0063M39M.3 m04/07195 _5_
(4) Failure to properly expend the housing funds in accordance E
with the agreement of the parties.
(5) Failure to cooperate in the defense during any legal
challenge or failure to pay reasonable attorneys fees
authorized by Palm Mountain and incurred by the City in
connection therewith. (In this regard, the authorization
process for the incurring of legal costs shall be established
in the Settlement Agreement.)
(6) Any other act which interferes with the ability of the other
party to proceed with implementation of the Settlement
Agreement.
b. City. By City (unless excluded by other party's default):
(1) Failure to deposit funds for environmental study.
(2) Failure to consider the project at a public hearing after
Palm Mountain has submitted a complete application.
(3) Failure to cooperate in the defense during any legal
challenge.
(4) Failure to offer City property in Tachevah basin for lease
at $1.00 per year.
(5) Where the Project has been determined to be economically
feasible, and where the Environmental Impact Report
concludes that all long-term significant environmental
impacts can be mitigated such that no statement of
overriding considerations is necessitated, and where no
substantial reasonable neighborhood opposition is presented
at the public hearing on the Project, and the City Council
votes to disapprove the Project; however, such
neighborhood opposition shall not be grounds for
disapproval if the causes of such opposition can be
reasonably mitigated.
(6) Any other act which interferes with the ability of the other
party to proceed with implementation of Settlement
Agreement-
6. TERMS WHICH ARE BINDING WWDLATEL'Y. Paragraphs 2(a)
and 2(b)(7) and (8) shall create rights and obligations upon dismissal pursuant to Paragraph 4
F52\053\014084-0063\2139879.3 .04/ 7195 -6-
hereof, without regard to whether the Settlement Agreement is implemented, terminated or
breached by either party with respect to the portions of the Project described in Paragraphs
2(b)(l)-(6), 3, and 5 hereof.
7_ MISCELLANEOUS.
a. Attorney's Fees. The Settlement Agreement will provide that in
the event of any litigation in connection therewith, the prevailing party shall be entitled to
attorneys' fees and costs.
b. Amendment. This Agreement may only be amended by a
document in writing signed by the parties hereto and, with respect to the City and Agency, such
act must be properly authorized by the City Council and Agency Board, respectively.
C. Non-Liability of Agency Officers. No officer or employee of
either the City or the Agency shall be personally liable to Palm Mountain or any successor in
interest, in the event of any default or breach by the City or Agency, respectively.
d. Conflict of Interest. No officer or employee of with the Agency
or the City shall have any financial interest, direct or indirect, in this Agreement or the Project
nor shall any officer or employee participate in any decision relating to the Agreement which
affects his financial interest or the financial interest of any corporation, partnership or association
in which he is, directly or indirectly, interested, i violation of any state statute or regulation.
Palm Mountain represents and 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.
e. Covenant against Discrimination. Palm Mountain covenants and
agrees that, by and for itself, its heirs, officers, directors, assigns and all persons claiming under
or through them, that there shall be no discrimination against or segregation of, any person on
account of race, color, creed, religion, sex, marital status, national origin or ancestry in the
performance of this Agreement.
f. Entire Agreement. This Agreement contains all the agreements
of the parties hereto with respect to the matters contained herein and no prior agreement or
understanding pertaining to any such matter-
9- Notices. Any notice which either party may desire to give to the
other party must be in writing and shall be effective (i) when personally delivered by the other
party or messenger or courier thereof; (ii) three (3) business days after deposit in the United
States Mail, registered or certified; or (iii) twenty-four (24) hours after deposit before the daily
deadline time with a reputable overnight courier or service; in each case postage fully prepaid
and addressed to the respective parties as set forth below or to such other address and to such
other persons as the parties may hereafter designate by written notice to the other parties hereto:
F5210331014084-00631Y139379.3 m04/07/95 -'7-
•
To: City: City of Palm Springs
3200 E. Tahquitz
Palm Springs, CA 92263-2743
Attn: Rob Parkins, City Manager
To Agency: Redevelopment Agency of the City of
Palm Springs
Economic Development
3200 E. Tahquitz
Palm Springs, CA 92263-2743
Attn: Director
Copy to: Rutan & Tucker
611 Anton Boulevard, Suite 1400
Costa Mesa, California 92626-1998
Attn: David Aleshire, Esq.
To Palm Mountain: Palm Mountain Company {
diig3W
See') jQL,OAn rn
_'.1 , 5Vj?gd
Copy to: Thomas P. Clark, Esq.
Stradling, Yocca, Carlson & Rauth
660 Newport Center Drive Suite 1600
Newport Beach, CA 92660-6441
Either party may from time to time, by written notice to the others, designate a different
address which shall be substituted for the one(s) above specified, and/or specify additional
parties to be notified.
h. Interpretation; Governing Law. This Agreement shall be con-
strued according to its fair meaning and as if prepared by both parties hereto. This Agreement
shall be construed in accordance with the laws of the State of California in effect at the time of
the execution of this Agreement. Titles and captions are for convenience only and shall not
constitute a portion of this Agreement. As used in this Agreement, masculine, feminine or
neuter gender and the singular or plural number shall each be deemed to include the others
wherever and whenever the context so dictates.
r5210531014034006312139379.3 m04107195 -8-
IN WITNESS WT=OF, the parties have executed this Agreement as of the day first
above written.
CM:
ATTEST: THE CITY OF PALM SPRINGS
City Clerk Its:
Date: S- -3 , 1995
ATTEST:
APPROVED AS TO FORM:
RUTAN & TUCKER
i_ K , i
City At or"ey
AGENCY:
ATTEST: REDEVELOPMENT AGENCY OF THE CITY OF
PALM SPRINGS
By: ��C�r 1 4 (Gcv!��s✓
s stant Secretary Its: CKa irman
Date: 3 , 1995
ATTEST:
APPROVED AS TO FORM: f�if�E�Y�pgYTM �t:er „R
�u'.l��r:-?dam �'11�►��-. M�
RUTAN & TUCKER
Agency Counsel
(Signatures continued on next page)
F52\053\0140S4-0063\2139M.3 m04/07/95 -9-
PALM MOUNTAIN:
PALM MOUNTAIN COMPANY, a California
Corporation
Date: d jo, 1995 By:
President
(End of Signatures)
FS2%0531014OS4-0063121139979.3 m06107195 -10
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EXNIBTT B
TOLLING AGRF.F.MFNT
IT IS BEREBY STIPULATED AND AGREED between the following parties,
constituting the parties to that certain action commonly known as: Willam H. McWethv, Jr. v.
The City of Palm Springs, et al., pending in Riverside Superior Court, Palm Spri fgs Branch,
No. I-69860 ("the Action"):
(a) THE CITY OF PALM SPRINGS ("PALM SPRINGS"); ROB W. PARKINS;
SONNY BONO and, EARL. NEEL (all collectively referred to as "CITY OF
PALM SPRINGS)
and
(b) WILLTAM II. MC WETLY; and, THE PALM MOU,7AIid COT ANY
(collectively "MC WETLY"), with respect to the following facts:
A. On or about June 15, 1993, MC WETHY filed a Complaint for Breach of
Contract; Breach of the Covenant of Good Faith and Fair Dealing; Breach of Oral Contract;
Fraudulent Inducement; Intentional Interference with Prospective Economic Advantage; and
Conspiracy in the above-described action.
B. Defendant PALM SPRINGS filed its answer to the Complaint on or about August
2, 1993. Defendants PARKINS, BONO, HODGES & NEEL, filed their answer on or about
August 13, 1993.
C. The parties hereto, have determined that because of the allegations of MC
WETLY, it would be in the best interests of all concerned to avoid or reduce protracted
litigation, costs and expenses, and to encourage judicial economy and efficiency, that they not
file any cross-complaints against each other and each party retain and preserve any claims or
causes of action they may have against the other.
NOW, TnEREFORE, IT IS AGREED:
Without admitting any liability or wrongdoing whatsoever, or waiving any claims, the
parties hereto have agreed:
1. That neither MC WETHY or the CITY OF PALM SPRINGS will file a complaint
or cross-complaint against the other in this action.
2. That due to pending settlement negotiations and the instant Tolling Agreement,
MC WETLY will file a Dismissal of the Entire Action, Without Prejudice, Each Party to Bear
Their Own Costs.
K:IDMSI(6G.D/RI ap94162 WP/DT
3. That MC WETHY and THE CITY OF PALM SPRINGS hereby suspend, as of
October 1, 1994, the running of any and all statutes of limitations with respect to any claim
which either may have against the other arising from or included in the within action. All such
statutes of limitation shall be tolled until the later of the following alternative events:
a. The Action is dismissed, with prejudice, including all cross-complaints that
will have any effect upon MC WETHY and/or THE CITY OF PALM SPRINGS;
b. A fully executed settlement agreement is entered into, by and between all
parties to this Tolling Agreement, settling all claims as to the parties hereto;
In no event shall the statutes of limitations be tolled after October 1, 1996. At such time,
any and all statutes of limitations for any and all claims either party may have against the other,
shall commence to run.
In effect, the running of the statute of limitations will be tolled during the period the
Tolling Agreement remains in effect as to any and all causes of action, claims, demands or
charges that any party hereto may or can assert against the other.
4. MC WETHY and THE CITY OF PALM SPRINGS understand that the October
1, 1994 date mentioned in Paragraph 2, above, does not necessarily mean that a statute of
limitations had not expired at an earlier date; however, it is simply regarded as the effective date
of this agreement at which time the statutes of limitations shall be regarded as being suspended.
In the event a matter, claim, or event, may have been time barred prior to October 1, 1994, as
a result of the application of the statute of limitations, the execution of this Tolling Agreement
shall not revive, reactivate or reinstate that claim, matter or event.
5. Provided the events described in Paragraph 2, above, have not first occurred, then
notwithstanding anything to the contrary, any pasty hereto shall have the right to terminate this
Tolling Agreement and hereby end the tolling period by first causing to be delivered by U.S.
Mail a preliminary ten (10) day notice of election to terminate this agreement, and filing a
complaint or cross-action against one or more parties to this Tolling Agreement with consent of
court. Upon the occurrence of those events, the tolling period shall be deemed to have ended
on the date of the filing of a new action or cross-action, when the Tolling Agreement shall at
that time be of no further force or effect.
6. It is agreed that neither MC WETHY nor THE CITY OF PALM SPRINGS
hereby agree to waive the benefit of any applicable statute, California Court Rules, Superior
Court Rules, or any other legal requirement that any such complaint or cross-complaint was
required to have been asserted in the above pending action. Should any future litigation ensue
between the parties, each such party agrees that they will not assert any such statutory or legal
bar to the maintenance of such complaint, or of any issue therein, which would otherwise have
been required to have been litigated by complaint or cross-complaint in the above pending
action.
K IDMSJ(FG.DIRWa416Z WP/P 1
7. The agreements contained in this Tolling Agreement are made only as to MC
WETHY and THE CITY OF PALM SPRINGS and not to any other party and are not
enforceable by any other party.
& This Tolling Agreement shall not be filed with the court and the tefms hereof.
are confidential and neither MC WETHY, nor TIM CITY OF PALM SPRINGS and their
agents, servants and employees shall divulge the existence or contents of this Tolling Agreement
to another without the express written consent of all parties.
9. This Tolling Agreement may be executed in separate counterparts, all with the
same force and effect as though the same counterpart had been executed simultaneously by each
party, but will have no effect until executed by all parties.
10. The parties father agree that no represenrations, warranties, agreements or
covenants have been made with regard to the Tolling Agreement by the parties hereto other than
those set forth herein and that in entering into this Tolling Agreement, no party is relying upon
any representation, warranty, agreement, promise or covenant made by the parties hereto, other
than as set forth in this Tolling Agreement, and further agree that each has not been influenced
to execute whatsoever in making this Tolling Agreement by any representations or statements
regarding injuries, claims, demands, causes of actions or regarding any matters made by the
persons, firms or corporations hereby joining said Tolling Agreement and each of them represent
and declare that in executing this Tolling Agreement they rely solely upon their own judgment,
belief and knowledge, and the advice and recommendations of their own independently selected
counsel concerning the significance and meaning of the statute of limitations, including the
tolling thereof, as well as the right to terminate any such tolling as provided herein.
11. Any portion or provision of this Tolling Agreement, which is invalid, illegal or
unenforceable in any jurisdiction, shall, as to that jurisdiction, be ineffective to the extent of
such invalidity, illegality or unenforceability, without affecting in any way the remaining
portions or provisions hereof in such jurisdiction or rendering that or any other portion or
provision of this Tolling Agreement invalid, illegal or unenforceable in any other jurisdiction.
IT IS SO STIPULATED AND AGREED:
Dated: 7aauary _, 1995
By:
THE CITY OF PALM SPRINGS
Signatures Continued on Page 4
K.IDMSI<6G.DIR10094Y 62.WP/D I
• •
DnteQ: 7asw_�.,,�1�195
ATTES- riFy of ?elm Springs, California
P
By: —�--
Fra
Dalai: January �. 1995
By: --
SONNY BONO
tJatctl: Ianuazy __ , 1995 ra.7\rrn 3Y Tlar CITY C06NCIL
EARL .NEEL
hued: lar�u�y —, 1995
Br WILLIAM 'I. MC ` BT11Y
Ntw: lanuaxy �, I995 +�'PR�fU@D /► r
•0 f°g�M
By: - ttorr�y
THE T'A J,t R10,-7J TAIN COMPANY Oats rj
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„Wy A:� roc L0:@^ 71aGa6��'37 PRG�.G�?
0 'J 0PV,3b 'OH NA d9A E0; [ [ IN
Dau5d: January J, 1995
By:
ROB W. PARKINS
Dated: January;l 1995
NY BONG
Dated: January _, i995
BY: - — — --
EARL. NECI.
Dated: Janury _—, 1995
By:
W1JIAM H. NIC WETHY
Dated: January _ 1995
By:
THE: PAW MOUNTAIN COMPANY
r.�cMsu�r.Qtaivos�tea w^ma
M ' 1 `,fuch nii wu.i -�N 7(1' ii --i I
By:
RUB W:PhKK1NS
Dated: January _____, 1995
13y:
SONNY R{)NO
Dated: January _, 1995
By: azt
EARL NEFL
Dated: Janury _ , 1995
By:
W]L.IJAM H. MC W1:1'1-IY
Dated: January 1995
'Mr- PALM MOUKAM COMPANY
F lrmA ,IIG DIP craPfSS
90 d ill r1' j ��i7
Dated: January _, 1995
By:
ROB W. PARKINS
Dated: January , 1995
By:
SONNY BONO
Dated: January 1995
By: _.--
EARL NEEL
Dated: h m:ry 1995
By: kwuw� c.
&MCw , tix
Dated: January __, 1995
THE r ALh 1 MO f _ N COh1PANY
xiDAM41rin Dmroo5arr.2 �tiv,nr
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