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HomeMy WebLinkAbout9/7/2005 - STAFF REPORTS (8) UT,:OV Community Redevelopment Agency Staff Report DATE: SEPTEMBER 7, 2005 NEW BUSINESS SUBJECT: APPROVAL OF AN EXCLUSIVE AGREEMENT TO NEGOTIATE WITH THE OASI GROUP, LLC OF LOS ANGELES, CALIFORNIA FOR A 5.7 ACRE AGENCY-OWNED PARCEL AT THE SOUTHEAST CORNER OF ANDREAS ROAD AND CALLE EL SEGUNDO FOR THE PURPOSE OF DEVELOPING A 210-ROOM FOUR-STAR GROUP MEETING HOTEL j AND UP TO 120 CONDOMINIUMS, MERGED REDEVELOPMENT PROJECT AREA#2 i FROM: David H. Ready, Executive Director BY: Community & Economic Development Department SUMMARY: This Exclusive Agreement to Negotiate with the Oasi Group, LLC, for a 5.7+ acre parcel adjacent to the new front door of the Convention Center, commonly known as the Prairie Schooner Parcel, sets in motion the process of developing a four-star group meeting hotel to serve the Convention Center under the "Luxury Collection of Starwood Hotels" brand. The business points are that the Developer would pay the Agency fair market value for the parcel, and could negotiate on their own, without Agency participation, for the two parcels fronting on Tahquitz Canyon Way to develop a project with commercial frontage that connects better to downtown. The term of the Agreement is for 18 months, though staff expects to develop the draft DDA within 4-6 months and, under the "focused entitlement process," potentially be able to bring a DDA to the Agency prior to the completion of the project's entitlement. New to the Agency, the Agency and developer will undertake the "focused entitlement process" together whereby the developer funds the environmental and planning contracts for the project, with those contracts managed by the Agency rather than Planning. The project will still undergo the normal planning approval process including review by the Architectural Advisory Committee, Indian Planning Commission, Planning Commission, and City Council, as well as the Agency. RECOMMENDATION: COMMUNITY REDEVELOPMENT AGENCY RECOMMENDATION: /� Item No. 1Q A20 Community Redevelopment Agency September 7,2005 Page 2 1. Adopt Resolution No. , "A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AN EXCLUSIVE AGREEMENT TO NEGOTIATE WITH THE OAS] GROUP, LLC FOR THE DISPOSITION OF A 5.7+ ACRE AGENCY OWNED PARCEL FOR THE DEVELOPMENT OF A FOUR-STAR GROUP MEETING HOTEL ADJACENT TO THE CONVENTION CENTER AT THE SOUTHEAST CORNER OF CALLE EL SEGUNDO AND ANDREAS ROAD, MERGED PROJECT AREA#2; 2. AUTHORIZE THE EXECUTIVE DIRECTOR TO EXECUTE THE AGREEMENT IN A FORM ACCEPTABLE TO THE AGENCY COUNSEL AND ENTER INTO DEVELOPER-FUNDED CONTRACTS FOR THE PURPOSE OF APPRAISALS, ENVIRONMENTAL REVIEW AND PROJECT PLANNING REVIEW ON BEHALF OF THE AGENCY FOR THE PURPOSE OF THIS PROJECT STAFF ANALYSIS: In January, 2005 staff met with representatives of Pele Development who were considering the development of a four-star group meeting hotel in on Tahquitz Canyon 'Nay in Section 14. Staff suggested that, if they were looking at a hotel of such high quality, they consider the Prairie Schooner site near the Convention Center, since the :success of such a high quality hotel would depend on the hotel's ability to book group meeting business. The Agency acquired the Prairie Schooner site in the 1980's as a potential hotel site, and the City certainly has an interest in developing more hotel rooms near the Convention Center to support its recent $34 million investment in the Center's expansion. Additionally, even the Tribe has expressed interest in seeing a four-star property developed in Section 14, even if they are not the developer. Based on negotiations with the Developer, staff prepared an Exclusive Agreement to Negotiate to go to the Agency in April, 2005. The Developer worked aggressively through the Spring on lining up the hotel brand, the hotel architect, engineer, landscape architect, equity partner, hotel asset manager, hotel operations company, and other members of the team to try to be in an Agreement with the Agency before June, 2005 in order to be open in this hotel development "window." Meanwhile, staff received two other proposals for similar hotels (four star luxury hotels) from other developers on the same site. In May the Agency instructed staff to prepare a Request for Qualifications/Proposals; the RFQ/RFP went out with a deadline of June 30, 2005. The RFQ went to all of the parties that had expressed an interest in the site, as well as a wider distribution to dozens of hotel developers. The Agency received two proposals. The Oasi Group, LLC, created by Pe]e Development, submitted a proposal, as did Nexus Companies of Santa Ana. As with Community Redevelopment Agency September 7,2005 Page 3 previous RFQs undertaken by the Agency, an evaluation committee was formed to review the two proposals and, based on the criteria developed in the RFQ/RFP and the strength of submission, strongly recommended the Oasi proposal over the Nexus proposal. A copy of the RFQ/RFP is attached. Aside from its attention to what the RFQ/RFP asked the proposer to do, the strength of the Oasi proposal is its commitment from Starwood for its premium brand. Starwood Hotels & Resorts Worldwide, Inc. is one of the leading hotel and leisure companies in the world with more than 750 properties in more than 80 countries and 110,000 employees at its owned and managed properties. With internationally renowned brands, Starwood is a fully integrated owner, operator and franchisor of hotels and resorts including St. Regis, The Luxury Collection, Sheraton, Westin, Four Points by Sheraton, W brands, as well as Starwood Vacation Ownership, Inc., one of the premier developers and operators of high quality vacation interval ownership resorts. The Luxury Collection of Starwood Hotels & Resorts is an elite group of distinctive handpicked hotels, most of them independently branded, from imperial palaces, romantic hideaways, and historical landmarks to tropical resorts and golf destinations that are recognized as some of the finest hotels in the world. With 76 hotels and resorts in 28 countries, each hotel has its own unique qualities which reflect the essence of the destination and offers grandeur paired with unrivalled personal service and attention to detail. Starwood's Luxury Collection is known for impeccable service and the kind of personal attention guests expect from a world-class hotel. The brand promise for the Luxury Collection in Palm Springs is that travelers would enjoy a level of comfort that exceeds their expectations, and the hotel will offer affluent travelers the rare opportunity to experience the ultimate in luxury in downtown Palm Springs. Other hotels in The Luxury Collection include The Phoenician in Scottsdale, The Princeville Resort in Kauai, The Palace Hotel in San Francisco, The Ballantyne Resort in Charlotte, The El Tamarindo Resort in Mexico, The San Cristobal Hotel in Santiago, Chile, The Park Tower in Buenos Aires, The Vedama Resort on the Greek Island of Santorini, The Hotel Pulitzer in Amsterdam, The Hotel Gritti Palace in Venice, The Mardavall Hotel & Spa in Palma de Mallorca, The Hotel Imperial in Vienna, The Grand Hotel in Florence, The Hotel Prince de Galles in Paris and the Bora Bora Nui Resort & Spa in French Polynesia. Several of the more opulent Westins and Sheratons are also members of the Luxury Collection, especially in Europe and Southeast Asia, as well as all eight St. Regis hotels. Starwood is also the owner of the "W" brand, and originally analyzed the Palm Springs market on the basis of a request from the Developer to consider a "W" property at the site. They concluded that with the City's investment in a first-class Convention Center Palm Springs warranted a higher, more timeless luxury brand with a stronger group meeting component for higher-end travelers than a niche leisure-oriented property. Community Redevelopment Agency September 7, 2005 Page 4 An additional consideration in evaluating the two proposals was the nature of the conceptual design: Oasi proposed a scalable project based on their success in negotiating the acquisition of the two adjacent parcels: the Tribe's offices as well as the Anderson Travel buildings. They also kept the building height and mass to five stories, keeping within the City's 60' height standards for non-Indian parcels (though using the 1:1 setback granted in the Section 14 Master Plan). Nexus only proposed a 10 acre site, and featured a block-long nine story tower along Andreas Road across from the Plaza Villas condominiums, which would require the City to approve the project under the 100' Indian land height standards in the Section 14 Master Plan, if the project could even make the 1:1 setbacks allowed in Section 14. Since staff received direction from the Agency on July 20, Oasi has moved forward in finalizing its architectural and engineering contracts and has begun to compile the i information for the project's Initial Study in order to keep to an aggressive timetable. Gensler, the project architect, has begun to refine the conceptual studies presented in the proposal, and will be "turned loose" on September 8. In addition, Oasi has had further negotiations discussions with the Tribe and the other property owner about potential land acquisition in order to assemble the entire site. Additionally, staff has continued to work with Nexus on locating their proposed project on another site in the City and hopes to be able to present an Agreement to the Agency to help facilitate that project as well. The fact that the project was not recommended for the Prairie Schooner site and its unique proximity to the Convention Center doesn't mean it was not an exciting concept for Palm Springs. Under the terms of the Agreement with Oasi, the Agency will also commission the Environmental Assessment as well as the appropriate environmental studies, using the developer contribution. Additionally, the project will use the City's Focused Entitlement Process for planning services. Agency staff, rather than the City's Planning Services Department will manage these contracts, though the project will still undergo the normal planning approval process including review by the Architectural Advisory Committee, Indian Planning Commission, Planning Commission, and City Council, as well as the Agency. Community Redevelopment Agency September 7,2005 Page 5 FISCAL IMPACT: The terms of the DDA will be that the Developer pays fair market value for the Agency's parcel, which is estimated at this time to be approximately $3,000,000 though it could be somewhat higher. Any negotiations between the Developer and the Tribe or the private property owner are the responsibility of the Developer. Finally, the Developer i shall fund all of the planning and environmental work, as well as the appraisal, as part of this Agreement. i J n S. aym nd Director of David H. Ready, EXecuOe Director Cc unity & conomic Development Attachments: 1. Resolution 2. Exclusive Agreement to Negotiate 3. Request for Qualifications/Conceptual Proposals 4. Summary of Proposals Community Redevelopment Agency September 7,2005 Page 6 RESOLUTION NO. A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AN EXCLUSIVE AGREEMENT TO NEGOTIATE WITH THE OASI GROUP, LLC FOR THE DISPOSITION OF I A 5.7+ ACRE AGENCY OWNED PARCEL FOR THE DEVELOPMENT OF A FOUR-STAR GROUP MEETING HOTEL ADJACENT TO THE CONVENTION CENTER AT THE SOUTHEAST CORNER OF CALLE EL SEGUNDO AND ANDREAS ROAD, MERGED PROJECT AREA #2; AND AUTHORIZING THE EXECUTIVE DIRECTOR TO ENTER INTO DEVELOPER-FUNDED CONTRACTS FOR THE PURPOSE OF APPRAISALS, ENVIRONMENTAL REVIEW AND PROJECT PLANNING REVIEW ON BEHALF OF THE AGENCY FOR THE PURPOSE OF THIS PROJECT ------------------- WHEREAS, the Community Redevelopment Agency of the City of Palm Springs, California ("Agency") is constituted under the Community Redevelopment Law (California Health and Safety Code Section 33000 et. seq.) to carry out the purpose as the redevelopment in the City of Palm Springs ("the City"); and WHEREAS, the Oasi Group, LLC ("Developer") made a proposal to developer a four- star group meeting hotel on a 5.7 acre Agency-owned site under the terms of a Request for Qualifications/Conceptual Proposals dated June 8, 2005; and WHEREAS, expansion of the hotel inventory in proximity to the City's Convention Center, especially in the four-star category, is an objective of the City and Agency to increase the vitality of the downtown area, the Convention Center, and the tourism industry; and WHEREAS, Section 33430 of the Community Redevelopment Law allows that an agency may, "for purposes of redevelopment, sell, lease, for a period not to exceed 99 years, exchange, subdivide, transfer, assign, pledge, encumber by mortgage, deed of trust, or otherwise, or otherwise dispose of any real or personal property or any interest in property;" and Community Redevelopment Agency September 7,2005 Page 7 WHEREAS, the Agency and Developer are processing a Disposition and Development agreement ("DDA") relative to the development of the four star hotel on the site; and NOW, THEREFORE, BE IT RESOLVED by the Community Redevelopment Agency of the City of Palm Springs, California that an Exclusive Agreement to Negotiate with The I Oasi Group, LLC of Los Angeles, for a period of 18 months for an Agency-owned property located at the southeast corner of Calle El Segundo and Andreas Road, is j hereby approved and the Executive Director is hereby authorized to execute the ,Agreement and all related documents in a form acceptable to the Agency Counsel and enter Developer-funded contracts for the purpose of appraisals, environmental review and project planning on behalf of the Agency for the purpose of this project, ADOPTED this day of 2005 AYES; NOES: ABSENT: ATTEST: COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA By; By: Assistant Secretary Chairman REVIEWED & APPROVED AS TO FORM: Community Redevelopment Agency September 7, 2005 Page 8 Summary of Proposals Developer Oasi Group Nexus Communities Project Details 210 Hotel Rooms 250 Hotel Rooms j 90-120 Condos (depending on 254 Condos acreage) 4,000 sf restaurant 800 sf specialty coffee bar 10,000 sf meeting space 12,000 sf spa 1,200 sf fitness center 50,000 sf pool, sun deck and gardens 4,000 sf outdoor banquet space Acres 5.7 Acres (main parcel) plus Assumed 10 acres was 1.6 Acres Tribal offices; could available; did not submit a design up to 10 acres to include basic 5.7 acre plan other parcel Height 5 Stories Mix of 4 stories up to 9 stories along Andreas Road Brand / Have a commitment from Luxury Propose a "music themed" Commitment Collection of Starwood hotel (probably Hard Rock) including term sheet but do not have a commitment Brand's Starwood has more than 750 hotels N/A international in 77 countries worldwide; presence worldwide sales organization with 32 offices with over 120 sales professionals; Customer Contact Centers handle more than 15 million calls each year; Starwood Preferred Guest (SPG) program has over 19 million members; 2004 SPG revenue was 46% of total room revenue Examples of The Phoenician (Scottsdale) N/A signature The Palace Hotel (San Francisco) properties Hotel Denali (Venice) worldwide Community Redevelopment Agency September 7,2005 Page 9 Developer Oasi Group Nexus Communities Brand's local Westin Mission Hills N/A presence (Rancho Mirage) Financial / Conventionally financed hotel with Conventionally financed hotel Ownership condo profits reducing debt with condo profits reducing debt Lender/ Harbert Capital is equity partner; Nexus is equity partner; Bank Equity Partner lender to be competitively bid of America is lender Architect Gensler IBI Group Architect's Cameros Inn (Napa) Shadowrock, in design (Palm Hospitality The Beverly Hilton (Beverly Hills) Springs) Practice: Beverly Hills Hotel & Bungalows Sundial Lodge, Park City Selected Conference Center at Whistler Fairmont Hotel at YVR, Projects Four Seasons (NY, Newport Beach) Vancouver Fairmont Chateau Whistler Park City Beverly Hotel, Malaysia Construction N/A R.D. Olson Company Feasibility Oxford Lodging PKF Study Assumed Year 1: $177 ADR; 61% Occ. Year 1: $170 ADR; 59% Occ. Year 1 and Year 5: $209 ADR; 71% Occ. Year 5: $191 ADR; 72% Occ. Year 5 ADR and Occupancy Rate Amount of None None, except for off-site Financial improvements Assistance Requested Offer Price for Fair Market Value Fair Market Value Agency Parcel Community Redevelopment Agency of the City of Palm Springs, California i FQALMS,. ~ c V N * ��enaueo.4'� c44/FORN�P. Convention Center/Resort Hotel Request for Qualifications and Conceptual Proposals 1. Introduction 1.1 Objective The Community Redevelopment Agency of the City of Palm Springs ("Agency') is seeking qualifications and conceptual proposals from experienced resort hotel developers ("Developers") interested in constructing and managing a four star group meeting hotel on a 5.7 acre, Agency-owned parcel adjacent to the newly expanded Palm Springs Convention Center ("Project Site"). The Agency's objectives in the project are to develop a quality destination resort that would capitalize on the Palm Springs name as well as proximity to the Convention Center, downtown and the Spa Resort Casino; increase hotel room nights in the city, thereby increasing Transient Occupancy Tax (TOT) revenues; and, bring additional marketing opportunities to the 250,000 s.f. Convention Center to help maximize its usage. The Agency has had a long-term relationship with the Agua Caliente Band of Cahuilla Indians ("Tribe"), which is an adjacent properly owner(Tribal offices as well as the Spa Resort Casino) and has had a long-standing interest in the Project Site. A previous agreement between the Agency and Tribe in 2003 resulted in the construction of a 475-space parking lot on the Project Site. The Agency and Tribe propose to work together with the selected Developer to develop a hotel of the highest quality possible on the Project Site. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 1 June 6,2005 The Agency chose to use the RFQ-Negotiate process to increase the quality of proposals it receives and so it can select its development partner as quickly as possible, to keep the project within the current hotel development cycle. It is also felt that the RFQ-Negotiate process allows the developer maximum flexibility and creativity in putting together a response to the solicitation. 1.1.1 Type of Hotel The Agency desires to negotiate with a developer to construct a four-star hotel with a iparticular focus on the group meeting business in order to benefit and be helped by the Project Site's unique access to the main entryway to the expanded Palm Springs Convention Center. The brand proposed by the developer should have a significant world-wide sales and reservation system geared to developing group meeting business but should also provide a high quality resort experience for leisure travelers. The Agency's further objective is that the hotel be a "signature" property for Palm Springs that would establish its own world-wide reputation For quality and luxury. 1.1.2 Size of Hotel i The minimum acceptable size of hotel on the Agency's 5.7 acres would be 200 rooms, as well as spa and restaurant amenities and parking necessary to serve the hotel project. However, the Agency's preference would be that the Developer work with the Tribe and other landowners of the adjacent properly in order to acquire the additional four acres along Tahquitz Canyon Way, yielding an expanded Project Site of nearly 10 acres. Should the Developer and Agency be successful acquiring the additional acreage, the Agency would prefer a minimum of 300 units be developed on the larger site. 1.2 Proposed Project Site The proposed Project Site is approximately 5.7 acres of fee simple land owned by the Community Redevelopment Agency (two parcels, 508 055 007 and 505 055 008, 1.44 and 5.17 acres, respectively) and is located in the center of the City of Palm Springs, in an area known as Section 14, the historic heart of the Agua Caliente Indian Reservation. The Project Site is in close proximity to the central business district of the City and along a major corridor of transportation between the airport and the core of the retail shopping areas. (See Map of Project Site in Attachment"1", which also includes the surrounding properties). A 410-room Wyndham hotel is located immediately to the east, the Convention Center is to the northeast, Plaza Villas condominiums is to the north, the Spa Resort Casino is to the northwest, the Hilton Palm Springs Resort is to the west, and the Courtyard mixed use project (which features the 9-screen Regal Theaters) is to the south. The current land use of the Project Site is as a parking lot for the Convention Center(upon the development of a hotel, such parking would be relocated to an underdeveloped lot north of the Convention Center) and provides some overflow valet parking spaces for the Spa Casino. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 2 June 6,2005 In addition, there is some possibility that the Tribe would be willing to contribute its adjacent property, which currently houses its administrative offices, to the project, and there is another parcel of approximately 2 + acres that might be able to be acquired to be added to the project. The latter property currently contains office uses and, when combined with the Tribe's property, would bring the total potential Project Site to nearly 10 acres. The larger 10 acre project site would provide access to and frontage on Tahquitz Canyon Way, which is the main east-west corridor from the Palm Springs International Airport to downtown Palm Springs. 1.3 Palm Springs Convention Center and Spa Resort Casino I 1.3.1 Palm Springs Convention Center The City is currently undertaking a $43.6 million expansion of its Convention Center facilities, which are adjacent to the Project Site as well the Wyndham Hotel. The Wyndham was formally opened in November 1987 and is currently fully operational, offering food and beverage facilities, meetings and banquet facilities and recreational amenities. The convention center was completed and dedicated December 31, 1987 and originally contained approximately 110,000 square feet. In 1992, the City completed a 47,000 square foot expansion to the convention center. Currently, approximately 66,000 square feet is exhibit and convention space, approximately 16,000 square feet is utilized for meeting and function rooms, approximately 20,000 square feet is service and support space, approximately 7,500 square feet is used for food service and the remaining approximately 32,000 square feet provides building circulation. In addition, there is approximately 20,000 square feet of outdoor function area. Phase 1 of the expansion, completed in May of 2003, converted the former Springs Lecture Hall and sales offices to six additional meeting rooms for a total of 15 possible meeting rooms, plus the board room. The site of the convention center contains approximately 9.26 acres of land and provides parking for 491 cars. The City's objective in building the convention center was to support and enhance the tourist and convention business,which is the City's most important industry. The hotel, retail, entertainment and other businesses which serve the needs of tourists and convention center attendees generate significant revenues to the City in the form of transient occupancy taxes, sales taxes and property taxes. There are over 160 hotels and 6,500 hotel rooms in the City of Palm Springs. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 3 June 6,2005 In 2001, the City commissioned a study to determine what opportunities existed to compete more effectively for conventions and meetings. The study concluded that if the City could expand certain aspects of the existing facility (primarily exhibit hall space and meeting rooms), that the Convention Center could accommodate 73%of all groups that bring their meetings to California, as opposed to the 43% of all groups that the space was then able to accommodate. Based on this study the City determined that an expansion of the convention center was feasible. In November 2001 and again in November 2003, voters in Palm Springs approved ballot measures to increase the City's transient occupancy tax rate for the purpose of generating funds to pay for the expansion. These ballot measures were supported by the hotel owners. I jThe Convention Center Expansion was designed by Fentress Bradburn Architects, Ltd, Denver, Colorado, and will add an additional 115,000 square feet of space to the existing Convention center, for a total building area of 250,000 square feet. The City estimates that the total cost to construct the Project will be $43.6 million. Primary construction commenced in April 2004 and the City expects construction to be complete by September 2005. The existing Convention Center and parking have remained open during construction. The space in the Convention Center before and after the expansion is summarized as follows. Existing After Expansion Exhibit/Convention Space 64,000 sf 100,000 sf Meeting/Function Rooms 16,000 sf 31,000 sf Food Service 8,000 sf 10,000 sf Support/Circulation 69,000 sf 109,000 sf Total (excluding outdoor 157,000 sf 250,000 sf function area) The convention center is managed by SMG, a professional facilities management and operating company. SMG specializes in the management of convention centers and currently operates 98% of the publicly owned exhibition space in North America operated by private companies. The 48 convention and exhibition facilities currently managed by SMG include more than 9 million square feet of space and range in size from 30,000 square foot exhibit halls, with adjacent active sports arenas, to the 1,000,000 plus square feet of Reliant Astrohall in Houston and The National Trade Center in Toronto. Over 16 million people attended more than 4,500 convention and exhibition events at SMG managed facilities in North America last year. These included Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 4 June 6,2005 consumer shows, trade shows, conventions, corporate meetings, product launches and other special events. ' In 2002, the convention center was booked for 90 events with over 133,000 attendees. In 2003, the Convention center was booked for 86 events with over 101,000 attendees. The largest bookings included: j • Galifomia Teachers of English (5,100) • Palm Springs Exotic Car Auction (5,000) j • Valleywide Employment Expo(5,000) I • California Mathematics Council iAircraft Owners & Pilots Association (11,700) Actual and tentative bookings though the end of the year for 2004 (during the construction period) are estimated to total 81,000 attendees over 49 events. Largest bookings include: • Palm Springs Modern Show(3,000), • Computer Using Educators(4,000) • Palm Springs Home Show(5,000) • JS Enterprise (5,000) • Valleywide Employment Expo(5,000). In 2003 and 2004, the Convention Center also hosted the Miss Teen USA Pageant, part of the Miss Universe Organization (owned by Donald Trump and NBC Universal) which reached a worldwide television audience of several million with its live broadcast. In 2004, there were 38 events already booked for 2005 (with construction scheduled through September of 2005) with estimated attendees of 55,975; 32 events in 2006 and 22 events in 2007. Many future bookings are a result of repeat visitors. However, the City expects that bookings as a result of the completed expansion will increase average annual attendees figures to exceed 186,000 as soon as 2007. 1.3.2 Spa Resort Casino Owned and operated by the Agua Caliente Band of Cahuilla Indians, the Spa Resort Casino is the only Indian casino located in a downtown in the State of California and will likely retain that competitive advantage under new limitations proposed by the State of California and supported by the U.S. Department of the Interior, which will limit the expansion of Indian gaming on non-Indian parcels located in urban areas. Few Indian reservations in California encroach into urban areas, as is the case in Palm Springs. (Or, conversely,few cities have developed on Indian reservations like in Palm Springs.) Opened in November, 2003, the casino boasts 119,000 square feet of gaming, support and restaurant space. It was designed by the architectural firm of Wimberly Allison Tong &Goo of Newport Beach, California and constructed by Penta Construction. The casino features a Stage Deli and a Rappongi Restaurant, among other eateries, and is Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 5 June 6,2005 affiliated with the Spa Hotel, a 237-room hotel located at the corner of Indian Canyon Drive and Tahquitz Canyon Way. iThe casino is located across the street from the proposed Project Site. I 1.4 Other amenities Unique in the Coachella Valley, the Project Site has significant potential as a high-end group meeting and downtown leisure destination. As noted above, the Convention Center drives a significant share of the group meeting business in Palm Springs and the Coachella Valley and the Project Site is located immediately outside the new front door. The Spa Resort Casino is located across the street to the northwest of the site. Currently a Regal Theaters 9-screen stadium-style multiplex cinema is located across Tahquitz Canyon Way to the south. Aside from the numerous attractions of downtown Palm Springs, with dozens of restaurants and shopping opportunities, the community also features the Palm Springs Air Museum and the Palm Springs Aerial Tramway (open year round) and Knott's Soak City Water Park, which is open from March through November and provides a major regional attraction through the summer months for Southern Californians. 1.4.1 Palm Springs Art Museum Other amenities within walking distance of the Project Site include the Palm Springs Art Museum, the most significant art museum between Los Angeles and Phoenix. The Palm Springs Art Museum (formerly the Palm Springs Desert Museum) is approximately % mile from the Project Site to the west, at the base of Mt. San Jacinto. Founded in 1938, the Palm Springs Art Museum is an educational institution that promotes a greater understanding of art and performing arts through collections, exhibitions and programs. The Museum's permanent art collection features 19th, 20th, and 21st century works focusing on contemporary California art, classic western American art, Native American art; Precolumbian art, Mexican art, and European modern art; glass studio art, American mid-twentieth century architecture, and American photography. In addition, the Museum's 400-seat Annenberg Theater keeps an eclectic calendar from ballet to modern dance, opera to jazz, and comedy to drama. 1.4.2 Agua Caliente Cultural Museum The new Agua Caliente Cultural Museum will be located on Tahquitz Canyon Way about Y2 mile from the Project Site to the east. The new museum, which has not yet been built, is being designed by the architectural firm of Jones & Jones, one of the principal architects for the Smithsonian Institution's new National Museum of the American Indian in Washington, D.C. The Museum will also be a Smithsonian Affiliate, which will allow it to bring world-acclaimed exhibitions from the vast Smithsonian Collection to Palm Springs. The groundbreaking ceremony for the museum was held in March,2005. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 6 June 6,2005 t ' 1.4.3 Fabulous Palm Springs Follies i Also located within walking distance from the Project Site is the Fabulous Palm Springs Follies, which sells out the 800-seat Plaza Theatre eight shows a week from early November to Memorial Day. The Follies, which features Las Vegas-style showgirls in full costume (all over the age of 55) in a 1940's-style revue, has been featured on ABC's 20120, The New York Times, and other national and international publications since its founding 15 years ago. It was also the subject of an Oscar®-nominated short film. 1.5 Entitlements The necessary entitlements to develop the project include development permits, environmental documents.The Developer will be responsible for processing all permit applications. 1.5.1 General Plan Designation The Project Site is described as hotel use in the Section 14 master Plan"Master Vision Plan." It land use designation is ResortiAttraction, a designation created to facilitate the development of hotel projects. 1.5.2 Zoning Designation The City of Palm Springs adopted the Section 14 master Plan in April, 2004; the Master Plan replaces the City's previous zoning designations in favor of new development standards. The designation for the project site is appropriate for hotel use. In the City's other areas, and R-3 designation allows for up to 43 hotel rooms per acre, given other site development standards. 1.5.3 Environmental Analysis A developer would need to commission the numerous special studies necessary to analyze the environmental impacts of the project, including but not limited to a traffic study. However, the Tribe did adopt a Program EIS/EIR for the Section 14 Master Plan, which analyzed the environmental impacts of the maximum development potential of the area; it is possible that a hotel on the Project Site would not require a separate EIR but could "tier' off the existing one. A final determination of that would only occur after an Initial Study of an actual development project, though. 2. Proposal Format/Contents 2.1 Informal RFQ-Negotiate process. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 7 June 6,2005 i I I ! For the purposes of this proposal, Developers are not required to prepare detailed site plans or jelevations, but rather present their firm's qualifications as well as a conceptual design and business development proposal encompassing the features of the proposal. The Agency could choose to negotiate with the successful developer based on the firm's qualifications, the conceptual proposal, or a combination of the two. The following list describes the required elements of the proposal: 2.1.1 Cover Letter Include a cover letter indicating the nature of the developer team: joint venture, corporate developer, limited liability corporation,franchisee, etc. The letter must include the company name, address, and name(s) and telephone and fax number(s) of the person(s)authorized to represent the development team. 2.1.2 Table of Contents A Table of Contents for all the material contained in the response. 2.1.3 Development Team Indicate past experience (including level of involvement) within the past five years for this specific type of project. The project team could include principals and employees of the development company; other LLC partners or members, if identified; the hotel operating company, if identified; the hotel brand partner, if identified; the hotel architect, if identified; and, the project general contractor, if identified: 2.1.3.1 Company Principals • Development company's or principals'project experience, especially with hotel projects • Specific individuals from the development company assigned to this project; i.e. specific responsibilities and duties, etc. • Projects completed by the development company with name and telephone number of contact • Availability of the team and the percentage of their current workload that would be assigned to the project. Significant development experience, specifically hotel development experience, is desirable from the project principals. 2.1.3.2 Other Development Team Members • Other development partners' (such as limited-or equity partners or LLC members)experience, especially with hotel projects • Specific individuals from the other partners assigned to this project; i.e. specific responsibilities and duties, etc. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 8 June 6,2005 i I I • Projects completed by the other partners with name and telephone number of contact Availability of the team member and the percentage of their current i workload that would be assigned to the project. I Significant development experience, specifically hotel development experience, is desirable from the other development partners, especially if the development company principals lack specific hotel development experience. 2.1.3.3 Hotel Operating Company(if known) • If available, please include commitment letter or letter of interest from Hotel Operating Company in the RFQ response • Hotel Operating Company's experience, including number of years in operation • Number of hotel rooms worldwide operated by Hotel Operating Company, listed by hotel brand • Hotel brand manager references with name and telephone number of contact • Specific individuals from the Hotel Operating Company assigned to this project during the development process Additional consideration will be given to proposals that include an experienced hotel operator as part of the proposal, whether the operator is in-house or a third party operator. The operating company's experience should match the proposed project's in terms of size and quality as well, and the operator should be well-regarded by both luxury and group meeting brands. 2.1.3.4 Proposed Hotel Brand (if known) • If available, please include commitment letter or letter of interest from Hotel Brand Company in the RFQ response • Number of hotels and rooms worldwide owned or operated by Hotel Brand Company, listed by brand • Name of brands operated by Hotel Brand Company • Name of several signature properties worldwide • Name and number of hotel rooms in the Coachella Valley operated by Hotel Brand Company, listed by brand • Description of worldwide sales and reservation system operated by the Hotel Brand Company Additional consideration will be given to proposals that include a strong brand concept and a commitment from an experienced hotel brand with a strong international sales and reservation system. The brand concept proposed by the Developer and brand should match the Agency's objective of creating a signature, four-star group meeting hotel. Extra points would be awarded for a Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 9 June 6,2005 I I i I hotel brand with a proven ability to help related properties in the same area a the Coachella Valle increase each others'sales. geographic ( •9� Y) � I j 2.1.3.5 Project Architecture Firm(if known) I If available, please include commitment letter or letter of interest from • the proposed Project Architecture Firm in the RFQ response • Project Architecture Firm's experience, including number of years in operation, number of architects worldwide, number of architects dedicated to hospitality sector • Representative hospitality projects designed by proposed Project Architecture Firm • Proposed Project Architecture Firm contact name and telephone number • Specific individuals from the Architecture Firm assigned to this project during the development process 2.1.3.6 Project General Contractor(if known) • If available, please include commitment letter or letter of interest from the proposed Project General Contractor in the RFQ response • Project General Contractor's experience, including number of years in operation, dollar value of projects worldwide, number of projects currently under development in the hospitality sector • Representative hospitality projects completed by proposed Project General Contractor • Proposed Project General Contractor contact name and telephone number Specific individuals from the General Contractor assigned to this project during the development process 2.1.4 Conceptual Design Concept While the "proposal" portion of this RFQ need only be conceptual, the Agency is interested in the Developer's understanding of the Palm Springs hotel market and approach to the project, such as whether a high rise (6 stories or above) is need, the brand concept, and what the proposed amenity package would be. Also, the issue of hotel financing is key as the Agency is not prepared to provide public financing to the project. Of particular interest, too, are developers with positive relationships with four star brands. Therefore, please propose a four star group meeting resort hotel. Describe: • How many total hotel rooms • The type of hotel rooms (singles vs. suites) • Other elements of the hotel, including restaurants, retail, spas, other sporting/recreational facilities, and banquet/meeting space. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 10 June 6,2005 i • What brand is the proposed hotel? • At what market is the developer aiming? Business travelers, leisure travelers, etc.? Describe the building envelope. • Is the hotel a single structure or multiple buildings? If so, how many units per building and what type of unit or uses would be in which building? • Describe and show exterior amenities, such as outdoor meeting/gathering space, other public areas, and other proposed recreation facilities, such as swimming pools and other potential commercial uses such as retail shops and restaurants. • How many floors would be necessary to yield the number of required rooms and provide the amenities described above? 2.1.5 Financing and Ownership Concept Please describe the ownership/financing structure of the hotel project, including: • Estimated total project cost • Estimated construction debt • Estimated amount of equity contributed to project • Estimated amount of permanent debt on project What would the permanent financing structure of the hotel be? • Conventional financing? • Condominium financing? • Bond financing? • A mix of financing types? 2.1.6 Brand Concept Please identify or describe the hotel brand proposed or selected by the Developer for the Project Site: • Show how the hotel brand would support the Convention Center in developing group meeting business in Palm Springs • Please describe the hotel brand's worldwide sales and reservation system and its international and domestic marketing reach • Please identify the number of hotel rooms in the Coachella Valley operated by the hotel brand or its family of brands, and how the affiliated hotel(s)and the proposed hotel would work together in developing new business for the Project Site City of Palm Springs Convention Center Hotel RFQ 11 June 3,2005 • How does the quality of the proposed hotel brand fit with the existing hotels within proximity of the Project Site, such as the Wyndham, the Hilton, or the Spa Resort? Is the brand a higher quality brand?Or is it equivalent? i 2.1.7 Relationship with the Tribe i Given the Tribe's interest in the Project Site, developing a relationship with them will be a key element of a successful project. While it is not expected that every Developer will have met with the Tribe prior to submitting a response to this RFQ, if you have, please describe any discussions the Developer has had with the Tribe on project participation, i including any written correspondence from the Tribe supporting your development project. Please describe the development concept for the Tribal parcel. Please describe an acquisition and development concept for the adjacent office parcel on Tahquitz. 2.1.8 Business Points The Agency anticipates that the Developer would seek to acquire a fee interest in the Project Site from the Agency. While the Agency does not have a recent appraisal on the site, given recent comparable sales in the immediate area, it estimates that the 5.7 acre site would be valued at approximately $3,000,000. Because of California's prevailing wage requirements if a project were to receive financial assistance (including land write-downs) from the Agency, it is currently assumed the Developer would pay fair market value for the land and not seek financial assistance from the Agency. Additionally, California Redevelopment Law will preclude the Agency from transferring fee title to the land until the project's environmental action (EIR or a Negative Declaration) is ready to be adopted. This is normally at the end of the entitlement process. 2.1.9 Hotel Feasibility Please demonstrate the feasibility of the proposed hotel concept, including the proposed brand, located on the Project Site. Because of the quality level of the hotel, the comparable set for analyzing the average daily rate for this hotel may be the higher-quality hotels located in the Valley, such as the La Quinta Resort, the Esmeralda, Marriott Rancho Las Palmas, and the Westin Mission Hills, rather than other hotels in Palm Springs. The Agency's economic consultant has opined that a supported ADR reflected a 20% premium over comparable hotels here in the Valley could be achievable if the hotel attracts a significant amount of conference/meeting business and the quality of the hotel far exceeds others in the region. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 12 June 6,2005 i • Please provide a basic operating pro forma that includes projections for average daily rate, occupancy rates, and operating costs including debt service. i Please include a copy of a feasibility study developed for a hotel at the i Project Site. • Please identify a proposed "opening date" for the hotel and provide a reasonable timetable for the development of the project. Given the ADR and occupancy rate of hotels here in Palm Springs and the Coachella i Valley, additional consideration will be given to proposals that have already analyzed the feasibility of the downtown or Section 14 hotel market and are proposing a project within the feasibility study parameters, but that also meets the Agency's objective of developing a four-star group meeting hotel. 2.2 Response Requirements The total response package is not to exceed thirty (30) typewritten pages, excluding maps, brochures, and other exhibits which may be included with the package. The extra materials, provided they are not part of the submission package, do not count against the page limit total. 2.2.1 Due Date All proposals are due in the City of Palm Springs' Procurement Division Office by 4:00 p.m. on Thursday, June 30. Postmarks will not be accepted. Please include one original and three (3)copies. 2.2.2 Submissions All proposals are to be mailed or hand-delivered to: Via U.S. Mail Hand Delivered or Packaqe Service Bruce Johnson Bruce Johnson Procurement Manager Procurement Manager City of Palm Springs City of Palm Springs P.O. Box 2743 3200 Tahquitz Canyon Way Palm Springs, CA 92263-2743 Palm Springs, CA 92262 2.2.3 Submissions are Final No corrections or modifications to the proposal may be made after the due date. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 13 June 6,2005 I j 2.2.4 Confidentiality of Submissions While the City shall endeavor to keep any confidential information private, it reserves the right to release the name of all proposers, as well as a summary of their proposals, to the media, the public, or any party that requests it. i 2.3 Primary Agency Contacts In order to streamline the flow of information to interested developers, the Agency has designated Primary Department Contacts in each of the affected departments. Please use only these contacts to receive additional information for your application. If you have a question about... Contact/Title Telephone This application process, hotel John Raymond, 760-323-8228 occupancy rates, average daily rate, or Director of Community& other nearby land and development Economic Development i opportunities. The Section 14 Master Plan, Ms. Jing Yeo or Mr. Alex 760-323-8245 development permits, environmental Meyerhoff, Principal j approvals, or development standards. Planners The Tribal Property,the Section 14 Tom Davis, Chief Planning 760-325-3400 Master Plan, the Spa Casino,other Officer or Todd Hooks, Tribal Questions Economic Development Director,Agua Caliente Band of Cahuilla Indians The Palm Springs Convention Center Jim Dunn, General 760-322-8400 Manager 3. RFQ Evaluation Process Processing of the RFQ responses will be handled in the following manner: 3.1 Initial Evaluation All responses will be evaluated to develop a list of interested hotel developers. The Agency may choose a single proposer for further negotiation based on its proposal, or to choose 2 to 3 proposers and have them refine their proposals with more detailed architecture, site planning, or business terms. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 14 June 6,2005 3.2 Interviews The Agency reserves the right to hold interviews or select a preferred developer without interviews. The recommendation for selection will be made on the basis of qualifications, the soundness of the development proposal, the team's demonstrated experience in the group meeting hotel market, and response to the RFQ. 3.3 Agreements to Develop the Property Upon conclusion of negotiations, the Agency anticipates that it will negotiate a series of agreements with the Developer that will document the contractual terms of the deal. The first agreement would be an Exclusive Agreement to Negotiate for a minimum of twelve months during which the Developer would take the project through the entitlement process; the final agreement would be a Disposition and Development Agreement would provide for the disposition of the parcel to the Developer and create any Agency-imposed covenants on the land. Community Redevelopment Agency of the City of Palm Springs Convention Center/Resort Hotel RFQ 15 June 6,2005 EXCLUSIVE AGREEMENT TO NEGOTIATE The Oasi Group, LLC THIS EXCLUSIVE AGREEMENT TO NEGOTIATE("AGREEMENT") , is made this day of , 2005, by and between the PALM SPRINGS COMMUNITY REDEVELOPMENT AGENCY("AGENCY"), and THE OASI GROUP, LLC ("DEVELOPER"). RECITALS The parties entered into this Agreement on the basis of the following facts, understandings, and intentions: A. The Agency is a public body, corporate and politic,exercising governmental functions and powers and organized and existing under the Community Redevelopment Law of the State of California (Health and Safety Code Sections 33000, et seq.). B. The Agency desires to effectuate the Amended and Restated Redevelopment Plan for Merged Project Area # 2, formerly the Tahquitz Andreas Redevelopment Project Area, by providing for the development of a Hotel property(the "Hotel") at the southeast corner of Calle El Segundo and Andreas Road, commonly known as the Prairie Schooner Parcel ("the Site"). C. The Developer desires to construct a Hotel and condominium project(the "Project") at the Site using a mix of conventional hotel-and condominium financing. The term "Developer"as used herein includes the principals, partners, and joint venturers of Developer and all obligations of Developer herein shall be the joint and several obligations of such principals, partners, and joint venturers. D. The Agency and Developer desire, for the period set forth herein, to negotiate diligently and in good faith to prepare an agreement whereby the Developer would develop such a hotel and residential project on the site, NOW,THEREFORE, and in consideration of the mutual covenants hereinafter contained, it is mutually agreed upon by the parties as follows: SECTION 1. NATURE OF NEGOTIATIONS. A. Good Faith. The Agency and the Developer agree that for the period set forth in Section 2 herein they will negotiate diligently and in good faith to prepare and enter into an agreement(the "DDA") consistent with the provisions of this Agreement for the development of a Hotel on the Site specified herein. The development will be subject to all rules, regulations, .standards, and criteria set forth in the Redevelopment Plan, the City's General Plan and Section 14 Master Plan, applicable specific plans and zoning regulations, and with this Agreement. B. Site. The Project shall be located upon the following real property, as shown in the "Site Map," attached hereto as Exhibit "A" and incorporated herein by this reference. The Site is currently owned by the Community Redevelopment Agency. C. Construction and Ownership Concept. The Developer's interest shall be fee and unencumbered by any prior agreement by the Agency. The design shall be consistent with the Agency's and the City's design approval process (Architectural Advisory Committee and Planning Commision approvals). Developer's architect shall work with the City's design guidelines to create a harmonious and attractive Hotel project with a distinct identity. The Developer is responsible for financing and constructing all improvements upon the Site. The hotel shall be of a size and quality adequate to achieve the mutual vision of the property. There shall also be a minimum of 10,000 square feet of restaurant,spa, and group meeting space. The Site will be subject to a declaration of covenants, conditions, and restrictions to govern the continued operation of the commercial space and hotel. D. Financial Provisions. The Developer is responsible for acquisition of the site, including any adjacent parcels, and financing and constructing all improvements upon the Site. ` Developer shall pay for all necessary public improvements and pay all City's fees for processing the Project, without assistance from the Agency. E. Schedule. The Developer's goal is to complete the entitlement and design of the Project by December 31, 2006. The DDA shall contain a Schedule of Performance. The Agency and Developer shall agree on a proposed itemized project schedule through the DDA process; attached hereto as Exhibit C. Agency and Developer shall meet semi-monthly in order to review Developer's progress and to allow the Agency to comment upon the acceptabilityof the Developer's efforts to date. In the event that during the course of Development, Agency and Developer agree that for reasons out of the Developer's control the schedule per Exhibit C, needs to be adjusted in order to allow more time then the Agency, in good faith, agrees to adjust the schedule to provide a reasonable opportunity for Developer to complete the development process. The above time requirements may be adjusted up to a cumulative 180 days at the discretion of the Executive Director where Developer is proceeding in good faith to perform under this ,Agreement. F. Use and Transfer Restrictions. The DDA will generally be subject to restrictions on use and transfer during construction and for a specified period thereafter through recorded restrictions (i) to assure that the use will be consistent with and promote the hotel project, (ii) to prevent speculation, (iii)to assure that any transferee has the resources, capability and experience to successfully develop the project, (iv) to assure long-term maintenance of the hotel project in ,attractive condition, and (tv)to provide an adequate financial return to the Agency. G. Propertv Acquisition. The adjacent properties to the south are owned by the Agua Caliente Band of Cahuilla Indians and a private business owner. During the period of this Agreement, the Developer may discuss an expanded project that could include residential, hotel, retail, or entertainment uses on the additional land along Tahquitz Canyon Way. The Developer is responsible for conducting the negotiations with the other property owners. H. Exclusivity. The Agency agrees for the period set forth in Section 2 that it will not negotiate with or enter into any agreement with any other entity for development or sale of the Site, and the Developer agrees not to negotiate with any other person or entity regarding the development of a hotel project within the territorial jurisdiction of Palm Springs or within 3 miles of the boundary thereof without the approval of Agency. SECTION 2. PERIOD OF NEGOTIATIONS, a The intent of this period of negotiation shall be for both parties to proceed with the drafting of the Disposition and Development Agreement,which shall require a CEQA action by the Agency. An Initial Study for CEQA purposes shall be undertaken for the purpose of determining the appropriate CEQA action.. Once the appropriate action is determined, a more precise environmental timeline can be developed. Therefore, this Agreement shall be for up to eighteen months from the date this Agreement is signed by the Agency or until the DDA is approved by the Agency with the appropriate CEQA findings. This Agreement shall terminate after the expiration of such period unless extended as follows: A. For sixty(60)days if a Disposition and Development Agreement has been prepared by the Agency and executed by the Developer, and has been submitted to the Agency but has not yet been approved by the Agency Board; or B. For thirty (30) days if the major business terms have been agreed to and the Executive Director determines that further negotiations are likely to result in a written agreement; or C. By mutual agreement of the parties. D. Or the cumulative days of extension granted by the Executive Director per Section 1.E above. Developer understands and acknowledges that if negotiations culminate in an agreement, such agreement shall be effective only after and if the Agreement has been considered and approved by the Agency Board after public hearing thereon as required by law. SECTION 3. DEVELOPER'S RESPONSIBILITIES. During the period of negotiation, Developer will prepare such studies, reports, and analysis as shall be necessary to permit Developer to determine the feasibility of the hotel project. The Developer shall fully cooperate in the development of the Project design and financing plan. During the period of negotiation and as requested by the Agency,the Developer shall submit to the Agency the following: A. Full disclosure of Developer's principals, partners, joint venturers, negotiators, consultants, professional employees, or other associates of the Developer who are participants or principals of the Project, and all other relevant information concerning the above. B. Statement of financial condition in sufficient detail to demonstrate Developer's financial capabilities, those of its principals, partners, joint venturers, and those of its prospective Developers to satisfy the commitments necessitated by the Project. To the extent Developer wants such financial statements to remain confidential, they shall be supplied to the Agency only if the confidentiality of the statements can be maintained. C. All information necessary for the design of the Project to meet the Developer's reasonable requirements. The Developer shall negotiate exclusively with the Agency's negotiating team and with no other persons unless expressly authorized to do so by the Agency's negotiating team. During the period of negotiations, Developer and Agency shall coordinate community and neighborhood outreach efforts; no statements will be made by the Developer to the media without the approval of the Agency's negotiating team. No prepared statements shall be released to the media without the mutual consent of the respective negotiating teams. The Developer shall also cooperate with Agency, which will manage the environmental review of the project, as well as the project planning contract through the City' Focused Entitlement Process. Developer's responsibility shall be to provide the funding for the Agency's project consultants in a form of a deposit made to Agency in the amount of each contract. SECTION 4. AGENCY'S RESPONSIBILITIES, A. Preparation of Agreement. If agreement is reached on the business terms for inclusion in the agreement, the Agency shall prepare such agreement for consideration by the Developer. Agency's legal and appraisal expenses shall be chargeable against the Good Faith Deposit Agency shall notify Developer of the amount of the appraiser contract and provide monthly notification of the legal costs of preparing the DDA. Planninq Approvals. The Agency will undertake all acts necessary to assist Developer in securing necessary permits as may be necessary to permit the commercial/residential development at the Site, including hiring the environmental review firm and planning firm and assisting with the presentations and staff reports made to the City's review boards. C. Contract Authority. By resolution approving this Agreement,Agency shall have also granted Executive Director authority to enter contracts on behalf of the Agency for the purposes of planning, environmental review, and appraisals in excess of Executive Director's limit of$25,000, provided such contracts have been funded by Developer and the contract amount has been deposited with Agency by Developer under the same terms and conditions described in Section 5 below. SECTION 5. GOOD FAITH DEPOSIT. Concurrently with the execution of this Agreement, Developer shall submit to the Agency a good faith deposit in the sum of Twenty-Five Thousand Dollars ($25,000.00) in the form of a cash deposit, cashiers' check, irrevocable letter of credit, or other form of security acceptable to the Agencyto insure that the Developer will proceed diligently and in good faith to negotiate and perform all of the Developer's obligations under this Agreement. If the deposit is in cash or a certified cashiers'check, it shall be deposited in an interest-bearing account of the City. Interest, if any,shall be added to the deposit and held as additional security for the Developer's obligations hereunder. Upon termination of this Agreement the balance, less charges deducted from the deposit pursuant to section 4(A), shall be returned to the Developer provided that the Developer has negotiated diligently and in good faith and carried out its obligations hereunder. If Developer has failed to do so, in as much as the actual damages which would result from a breach by Developer of its obligations under this Agreement are uncertain and would be impractical or extremely difficult to determine, Agency shall be entitled to retain the entire amount of said deposit, as liquidated and agreed damages. It is further understood that the DDA will require an increase in the good faith upon execution of the DDA. The aggregate good faith deposit then required shall be at least Forty Thousand Dollars ($40,000.00). SECTION 6. MISCELLANEOUS. A. Brokeraqe commission. No brokerage has been retained during the negotiation of this agreement. B. Appraisal of Properties. The Developer has offered and the Agency has preliminarily determined that a price of$3,000,000 is reasonable for the property, based on a recent appraisal of an adjacent property. It is the opinion of both parties that this amount likely represents a fair market price for the parcels. Upon the successful negotiation of a Disposition and Development Agreement between Agency and Developer, however, all properties shall be conveyed at fair market value based on an MAI appraisal. Agency shall commission such appraisal,which shall be paid from the Good Faith Deposit described in Section 5. Should the appraised value exceed the offering price, Developer shall have the right to withdraw from this Agreement without penalty. C. Ownership of Documents. If the Developer fails to perform under the terms of this agreement and the process contemplated hereunder is terminated or abandoned then, Developer shall transfer to Agency copies of any reports, studies,analysis, site plan layouts,development cost estimates, engineering studies,regarding the proposed development and prepared during the period of negotiations, which copies shall become the property of Agency. Such transfer shall be made without any representation or warranty by the Developer as to the accuracy or sufficiency of the contents of such documents and shall be made subject to the rights of the preparers of such `;,;;„;,__';;'� �I documents including, without limitation, the copyright(if any) associated with such documents. D. Purpose of Contract. It is expressly understood and agreed by the parties hereto that this is an Agreement regarding the conduct of contract negotiations only and does not convey any interest in the property whatsoever. It is further agreed and understood that this Agreement does not imply any obligation on the part of the Agency to enter into any agreement that may result in negotiations contemplated herein. Nevertheless, the Agency would not have entered the Agreement if the Developer's proposal did not fulfill Agency's objectives under the Redevelopment Plan and have merit, as represented. E. Amendment. This Agreement may only be amended by a document in writing signed by the parties hereto. F. Time for Acceptance. This Agreement, when executed by the Developer and delivered to the Agency, shall constitute a binding offer which cannot be withdrawn prior to September 30, 2005, so that the Agreement may be presented to the Agency Board. Notwithstanding any other provision herein to the contrary,Agency shall not be obligated hereunder unless and until the Agency Board authorizes the Chairman to execute this Agreement. G. Corporate Authority. The persons executing this Agreement on behalf of the parties hereto warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other Agreement to which said party is bound. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first above written. "AGENCY' COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic I I Chairman ATTEST: Agency Secretary .APPROVED AS TO FORM: Agency Counsel [SIGNATURES CONTINUED ON NEXT PAGE] "DEVELOPER" THE OASI GROUP, LLC (Check One: _individual, _partnership, _corporation) [NOTARIZED] Signature Print Name: Print Title: [NOTARIZED] Signature Print Name: Print Title: Mailing Address: (Corporations require two signatures; one from each of the following: (A) Chairman of Board, President, any Vice President; AND (B) Secretary, Assistant Secretary, Treasurer, Assistant Treasurer, or Chief Financial Officer.) [END OF SIGNATURES /NOTARY JURAT(S) FOLLOW] STATE OF CALIFORNIA ) ) ss. COUNTY OF ) ON before me, Notary Public, personally appeared_ i personally known to me(or 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. Witness my hand and official seal. [SEAL] Signature STATE OF CALIFORNIA ) ) ss. COUNTY OF ) ON before me, Notary Public, personally appeared personally known to me(or 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. Witness my hand and official seal. [SEAL] Signature EXHIBIT"A" TO EXCLUSIVE AGREEMENT TO NEGOTIATE LEGAL DESCRIPTION OF THE PROPERTY The parcel is located in the City of Palm Springs, County of Riverside, bearing APN Numbers 508-055-008, 508-055-009, and 508-055-007. l EXHIBIT"B" TO EXCLUSIVE AGREEMENT TO NEGOTIATE MAP OF THE PROPERTY I Jn