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HomeMy WebLinkAbout05160 - UNITED CONDOMINIUMS CORP MOU AMADO RD/CALLE EL SEGUNDO FOR CONV CTR ANCILLARY PURPOSES MEMORANDUM OF UNDERSTANDING � 66 This MEMORANDUM OF UNDERSTANDING ("Agreement") dated AgV 241 , 2006 is made by and between the City of Palm Springs, a Charter City and Municipal Corporation ("City"), and United Condominiums Corporation, a California Corporation ("Lessor") with reference to the following facts and agreements: WHEREAS, the City and Lessor have entered into that certain Sublease to Business Lease PSL-236 ("Sublease") dated , 2006 which provides for City to sublease from Lessor a 1.77 acre parcel at the southwest corner of Amado Road and Calle El Segundo for Convention Center and ancillary purposes; and WHEREAS, Lessor suspended the development of a 34-unit condominium phase in favor of negotiating with the City on the Sublease, after preliminary design had been completed, and the parties agree that there are further terms to the economic deal that are not covered by the Sublease but that should be documented in an Agreement; and WHEREAS, the Lessor factored in the City's acute need for the parcel for the public use of the Convention Center, and assumed during the negotiations the City could have used its eminent domain authority to acquire a sublease, and both parties wished to avoid any formal condemnation proceedings; and WHEREAS, the City's construction of the adjacent Convention Center is nearly complete and both parties wish to allow the City access to the parcel for the purposes of clearing weeds and debris to make it as attractive as possible for the Convention Center opening, prior to approval of Sublease by the Secretary of the Interior; and WHEREAS, the City and Lessor wish to clarify their understandings of how the Sublease will be implemented by setting forth those understandings in this Agreement as follows: 1. Discounted Cash Flow Payment. City agrees to pay Lessor the amount of $1,200,000 upon approval of Sublease by the Secretary of the Interior or his/her designee, for the purpose of compensating Lessor for lost economic value in subleasing to City, based on the discounted cash flow savings compared to a normally escalating lease. This compensation shall be considered full payment for such lost economic value of the project, rather than a determination of lost profit or other method. 2. Reimbursement for Design and Legal Costs. The City agrees to pay Lessor the amount of $60,000 as reimbursement for design costs on the Lessor's prior condominium project in the amount of$45,000 and for the legal costs incurred as part of the Sublease negotiation in the amount of $15,000. Such payment shall be considered full reimbursement for such costs and Lessor agrees to release any actual or future claims against City for such. 3. Acccess for Public Improvements Construction. Upon execution of this Agreement by both parties, Lessor shall grant City access to the Parcel for the purposes nlnnllnnil/SOin4 ni of cleaning the site and removing any fencing, weeds, debris, or landscaping not considered necessary for the ultimate use of the parcel by City. City shall consult with Lessor to ensure that any underground utilities remain undisturbed, and that any landscaping irrigation removed and replaced by the City does not damage Lessor's other condominium phases. Lessor shall not be responsible for any of the costs incurred by City during the clearing process. Should the Sublease fail to be approved by any party, City shall leave property in a clean condition. 4. Release of Development Rights. As a consideration for the payments made to Lessor under the terms of the Sublease, as well as Sections 1. and 2. of this Agreement, Lessor agrees to release and assign its rights to develop the parcel to the City for the term of the Sublease. 5. Attorneys Fees. Notwithstanding the reimbursement for prior legal costs as described in Section 2. above, both parties agree that any action between the parties hereto, seeking enforcement of any of the terms and provisions of this Agreement or the Sublease, or in connection with the Property, the prevailing party in such action shall be entitled, to have and to recover from the other party its reasonable attorney's fees and other reasonable expenses in connection with such action or proceeding, in addition to its recoverable court costs- 6- Notices. Any notice which either party may desire to give to the other party or to the Escrow Holder must be in writing and may be given by personal delivery or by mailing the same by registered or certified mail, return receipt requested, to the party to whom the notice is directed at the address of such party hereinafter set forth, or such other address and to such other persons as the parties may hereafter designate: To Developer: United Condominiums Corporation c/o Palm Springs Hilton Resort 400 East Tahquitz Canyon Way Palm Springs, CA 92262 Attn: General Partner Copy to: Schlecht Shevlin & Shoenberger 901 East Tahquitz Canyon Way Palm Springs, CA 92262 Attn: James Schlecht, Esq. To City: The City of Palm Springs 3200 E. Tahquitz Canyon Way Palm Springs CA 92263 Attn: City Manager 2 n I nn/nn11110In6 nI ` With a copy to: WOODRUFF, SPRADLIN & SMART a Professional Corporation 701 South Parker Street Suite 8000 Orange, California 92868 Attn: Douglas C. Holland, Esq 7. Interpretation: Governing Law. This Agreement shall be construed 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. 8. No Waiver. No delay or omission by either party hereto in exercising any right or power accruing upon the compliance or failure of performance by the other party hereto under the provisions of this Agreement shall impair any such right or power or be construed to be a waiver thereof. A waiver by either party hereto of a breach of any of the covenants, conditions or agreements hereof to be performed by the other party shall not be construed as a waiver of any succeeding breach of the same or other covenants, agreements, restrictions or conditions hereof. 9. Modifications. Any alteration, change or modification of or to this Agreement, in order to become effective, shall be made by written instrument or endorsement thereon and in each such instance executed on behalf of each party hereto. 10. Severability. If any term, provision, condition or covenant of this Agreement or the application thereof to any party or circumstances shall, to any extent, be held invalid or unenforceable, the remainder of this instrument, or the application of such term, provisions, condition or covenant to persons or circumstances other than those as to whom or which it is held invalid or unenforceable, shall not be affected thereby, and each term and provision of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 11. Execution in Counterparts. This Agreement may be executed in several counterparts, and all so executed shall constitute one agreement binding on all parties hereto, notwithstanding that all parties are not signatories to the original or the same counterpart. [END - SIGNATURE PAGE FOLLOWS] 3 mmunniinoina ni IN WITNESS WHEREOF, the parties hereto have executed this Agreement by their respective duly authorized representatives, all as of the date first above written. THE CITY OF PALM SPRINGS a charter city and municipal corporation • = ATTEST: City Manager ty ClerlC APPROVED BY CITY COUNCIL QgZL,j2005 AS 9 t-0 APT S TO FORM: 0-9�s 214-DO City A rney UNITED E DOMINIUM CORPORATION a Califo ua Corpor tion B i Y� ut orized'S- natory 4 ninnvnnivwina n