HomeMy WebLinkAbout7/28/2004 - STAFF REPORTS (3) DATE: JULY 28, 2004
TO: COMMUNITY REDEVELOPMENT AGENCY
FROM: DIRECTOR OF COMMUNITY & ECONOMIC DEVELOPMENT
APPROVAL OF AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND
ESCROW INSTRUCTIONS WITH RUSSELL ASSOCIATES, LLC OF SHERMAN OAKS
FOR 285 NORTH INDIAN CANYON DRIVE (DESERT HOTEL), MERGED AREA#1,THE
PURPOSES OF ABATING THE PROPERTY FOR DOWNTOWN DEVELOPMENT, IN
THE AMOUNT OF $160,000 PLUS COSTS AND FEES
RECOMMENDATION:
It is recommended that the Agency approve an Agreement for Purchase and Sale of
Real Property and Escrow Instructions with Russell Associates,LLC of Sherman Oaks,
CA for the purchase of a 5,800 square foot property located at 285 North Indian
Canyon Drive,the Desert Hotel, in the amount of$160,000 net to seller to facilitate the
redevelopment of downtown.
SUMMARY:
This Agreement facilitates the purchase by the Agency of a 5,800+ s.f. parcel at 285
North Indian Canyon Drive (Desert Hotel) in the amount of$160,000 plus costs and
fees for the purpose of abating the property for future downtown development. The
Agency will then proceed with the demolition of the property.
BACKGROUND:
The Agency has an interest in improving the Indian Canyon Drive corridor, as
evidenced by the acquisition and demolition of the Rudnick Building on the south
side of Fire Station No. 1;that property was subsequently merged with the adjacent
parking lot in the new Henry Frank Arcade public parking lot.
The Agency has been approached by several brokers over the past few years to
purchase the property. Recently the appraised the property to determine its value.
The appraisal concluded that the underlying land had a value of$229,000 and the
buildings had no value. Based on an anticipated demolition cost of $50,000, the
property as-is could be considered to be worth approximately $179,000.
Therefore, the offer of$160,000 net to seller, whereby the Agency pays fees and
costs (about $15,000) would be considered at or below fair market value. The
`fup�Js forth,A purchase wou come from Fund Balance in Merged Area #1.
JO N S. YM N
Dire Comm ity& Economic Development
APPROVED,�=
Executive Director����
ATTACHMENTS: Ica
1. Resolution
2. Agreement for Purchase and Sale of Real Property and Escrow Instructions
AGREEMENT FOR PURCHASE AND SALE
OF REAL PROPERTY AND ESCROW INSTRUCTIONS
Escrow No.
Date of Opening of
Escrow: 2004
THIS AGREEMENT FOR PURCHASE AND SALE OF REAL PROPERTY AND
ESCROW INSTRUCTIONS ("Agreement") is made this day of 2004, by and
between RUSSELL ASSOCIATES, LLC, a California limited liability corporation ("Seller"),
and the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a
public body, corporate and politic ("Buyer").
RECITALS
Seller is the owner of that certain real property consisting of approximately 5,800 square
feet, referred to as APN 513-091-003, located at 285 North Indian Canyon Drive near Amado
Road in the City of Palm Springs, County of Riverside, State of California, more particularly
described on Exhibit "A" attached hereto ("Land"), together with (i) all rights, privileges,
easements, licenses and interests appurtenant thereto, including, without limitation, all oil, gas,
water and water rights (collectively, "Appurtenances"); and (ii) all intangible property
("Intangible Property") owned or held by Seller in connection with the Land, including, without
limitation, development rights, governmental approvals and land entitlements. The Land,
Appurtenances and hitaugible Property are collectively referred to herein as the"Property."
Seller wishes to sell the Properly to Buyer and Buyer wishes to buy the Property from
Seller pursuant to the terms and conditions of this Agreement. Nevertheless, Seller
acknowledges that it shall have the obligation to repurchase the Property if the Buyer is unable to
acquire the four additional parcels necessary for Buyer's project, as set forth in Section 8.2,
below.
NOW, THEREFORE, the parties hereto agree as follows:
- ---
C ®
1003/012/31756.01 _1_
TERMS AND CONDITIONS
1. PURCHASE AND SALE OF PROPERTY.
Buyer hereby agrees to purchase from Seller, and Seller agrees to sell to Buyer the
Property, upon the terms and conditions hereinafter set forth.
2. OPENING OF ESCROW; CLOSING DATE.
2.1 Opening of Escrow. Within one (1) business day after the execution of this
Agreement by Buyer and Seller, the parties shall open an escrow ("Escrow") with
Escrow ("Escrow Holder") by causing an executed copy of this Agreement to be deposited with
Escrow Holder. Escrow shall be deemed open on the date that a fully executed copy of this
Agreement is delivered to Escrow Holder ("Opening of Escrow"). Escrow Holder shall fax
written notice of the Opening of Escrow date to Buyer and Seller.
2.2 Closing Date. Escrow shall close on or before 2004
("Closing Date"). The terms the "Close of Escrow" and/or the "Closing" are used herein to
mean the time the Grant Deed (as hereinafter defined) is recorded in the Office of the County
Recorder of Riverside County, California.
2.3 Time is of the Essence. Buyer and Seller agree that time is of the essence and
each party specifically agrees to strictly comply and perform the obligations herein in the time
and mamier specified and waives any and all rights to claim such compliance by mere substantial
compliance with the terms of this Agreement.
3. CONSIDERATION.
3.1 Purchase Price. The purchase price for the Property is One Hundred Sixty
Thousand and 00/100 DOLLARS ($ .00) ("Purchase Price"). The Purchase Price to be
paid by Buyer to Seller is all-inclusive compensation of Seller's interest in the Property and any
rights or obligations which exist or may arise out of the acquisition of the Property for public
purposes, which compensation Seller aclaiowledges and agrees is inclusive, without limitation,
of Seller's' fee interest in the Land and any improvements located thereon, severance damages,
relocation expenses, costs, interest, attorneys' fees, and any claim whatsoever of Seller which
might arise out of or relate to the acquisition of the Property by Buyer.
3.2 Payment of Purchase Price. On or before the day preceding Close of Escrow,
Buyer shall deposit the Purchase Price with Escrow Holder in "good funds." "Good funds" shall
mean a wire transfer of funds, cashier's or certified check drawn on or issued by the offices of a
financial institution located in the State of California, or cash.
4. ADDITIONAL FUNDS AND DOCUMENTS REQUIRED FROM BUYER AND
SELLER.
C >o,3
L003/Ol2/31756.01 _2_
4.1 Buyer. Buyer agrees that on or before 1:00 p.m. on the business day preceding
the Closing Date, Buyer will deposit with Escrow Holder all additional fiords and/or documents
(executed and acknowledged, if appropriate) which are necessary to comply with the terms of
this Agreement, including,without limitation, the following:
(a) A Preliminary Change of Ownership Statement completed in the manner
required in Riverside County; and
(b) Such fiords and other items and instruments as may be necessary in order
for Escrow Holder to comply with this Agreement.
4.2 Seller. Seller agrees that on or before 1:00 p.m. on the business day preceding the
Closing Date, Seller will deposit with Escrow Holder such funds and other items and instruments
(executed and acknowledged, if appropriate) as may be necessary in order for the Escrow Holder
to comply with this Agreement, including, without limitation, the following:
(a) A grant deed conveying the Property to Buyer in the form attached hereto
as Exhibit`B" ("Grant Deed");
(b) Two duplicate originals of a Non-Foreign Affidavit in the form
attached hereto as Exhibit"C" ("Grant Deed");
(c) Two duplicate originals of California Form 590-RE Real Estate
Withholding Exemption Certificates in the form required by the California
Franchise Tax Board("California Residency Affidavit"); and
(d) Such funds and other items and instruments as may be necessary in
order for Escrow Holder to comply with this Agreement.
4.3 Recordation, Completion and Distribution of Documents. Escrow Holder will
cause the Grant Deed to be recorded when (but in no event after the Closing Date) it can issue
the Title Policy in the form described in Section 5.2 below, and holds for the account of Seller
the items described above to be delivered to Seller through Escrow, less costs, expenses and
disbursements chargeable to Seller pursuant to the terms hereof.
5. TITLE MATTERS.
5.1 Approval of Title.
(a) Promptly following execution of this Agreement (but in no event later
than ten (10) days following Opening of Escrow), Seller shall cause to be delivered to Buyer a
Preliminary Title Report issued through Chicago Title Insurance Company ("Title Company"),
describing the state of title of the Property, together with legible copies of all exceptions
specified therein and a map plotting all locatable easements specified therein ("Preliminary Title
Report"). Buyer shall notify Seller in writing (`Buyer's Title Notice") of Buyer's approval of all
matters contained in the Preliminary Title Report or of any objections Buyer may have to title
exceptions or other matters ("Disapproved Exceptions") contained in the Preliminary Title.
Report within fifteen (15) business days after Buyer's receipt of the Preliminary Title Report
(`Buyer's Title Notice").
- - - - - - - -
1003/012/31756.01
(b) In the event Buyer delivers Buyer's Title Notice within said period, Seller
shall have a period of ten (10) days after receipt of Buyer's Title Notice in which to notify Buyer
of Seller's election to either (i) agree to attempt to remove the Disapproved Exceptions prior to
the Close of Escrow; or (ii) decline to remove any such Disapproved Exceptions ("Seller's
Notice"). Seller shall only elect to decline to remove Disapproved Exceptions which Seller in
good faith believes Seller's reasonable efforts would not result in removal or as to which
removal would result in cost or expense to Seller other than nominal administrative expense
incurred in the process of removal. Seller's failure to deliver Seller's Notice within said ten (10)
day period shall be deemed Seller's election to decline to remove the Disapproved Exceptions.
If Seller notifies Buyer of its election to decline to remove the Disapproved Exceptions, if Seller
is deemed to have elected to decline to remove the Disapproved Exceptions or if Seller is unable
to remove the Disapproved Exceptions, Buyer may elect either to terminate this Agreement and
the Escrow or to accept title to the Property subject to the Disapproved Exception(s). Buyer
shall exercise such election by delivery of written notice to Seller and Escrow Holder within ten
(10) days following the earlier of(i) the date of written advice from Seller that such Disapproved
Exception(s) cannot be removed; or (ii) the date Seller decline or is deemed to have declined to
remove such Disapproved Exception(s).
(c) Upon the issuance of any amendment or supplement to the Preliminary
Title Report which adds additional exceptions, the foregoing right of review and approval shall
also apply to said amendment or supplement, provided, however, that Buyer's initial period of
review and approval or disapproval of any such additional exceptions shall be limited to ten (10)
days following receipt of notice of such additional exceptions, together with copies of the
underlying documents referenced therein.
(d) Nothing to the contrary herein withstanding, Buyer shall be deemed to
have automatically objected to all deeds of trust, mortgages, judgment liens, federal and state
income tax liens, delinquent general and special real property taxes and assessments and similar
monetary encumbrances affecting the Property, and Seller shall discharge any such non-
perniitted title matters of record prior to or concurrently with the Close of Escrow.
5.2 Title Policy. When Escrow Holder holds for Buyer the Grant Deed in favor of
Buyer executed and acknowledged by Seller covering the Property, Escrow Holder shall cause to
be issued and delivered to Buyer and Seller as of the Close of Escrow a CLTA standard coverage
owner's policy of title insurance ("Title Policy"), or, upon Buyer's request therefor, an ALTA
extended coverage owner's policy of title insurance, issued by Title Company, with liability in
the amount of the Purchase Price, covering the Property and showing title vested in Buyer free of
encumbrances, except:
(a) All non-delinquent general and special real property taxes and assessments
for the current fiscal year;
(b) Those easements, encumbrances, covenants, conditions,
restrictions, reservations, rights-of-way and other matters of record shown
on the Preliminary Title Report which have been approved by Buyer
pursuant to Section 5.1 above;
(c) The standard printed exceptions and exclusions contained in the
CLTA or ALTA form policy;
F 1003Po12/3175691 _q,_
(d) Any exceptions created or consented to by Buyer, including,
without limitation, any exceptions arising by reason of Buyer's possession
of or entry on the Property.
6. DUE DILIGENCE.
6.1 Due Diligence Date. The "Due Diligence Date" shall mean the date which is
sixth(60) days following the date of the Opening of Escrow.
6.2 Scone of Due Diligence. Buyer shall have the right to make an analysis of the
Property consisting of such engineering, feasibility studies, soils tests, environmental studies,
including but not limited to those described in Section 7.3, and other investigations as Buyer
may desire to permit Buyer to determine the suitability of the Property for its intended purpose
and to conduct such other review and investigation which Buyer deems appropriate to satisfy
itself to acquire the Property. Buyer shall also have the right to examine all licenses, permits,
authorizations, approvals, and govermnental regulations which affect the Property.
6.3 Review of Documents. Within ten (10) days of the Opening of Escrow, Seller
shall deliver to Buyer the following documents which Seller may have in its possession or
control (or reasonable access thereto) for Buyer's review and approval:
(a) True and correct copies of any labor, service, employment, supply,
property management, leases, subleases, equipment leases, insurance and
maintenance contracts or other agreements which relate to the Property,
and any and all amendments thereto.
(b) Copies of all engineering reports, soils studies, soils compaction
reports, grading plans, geologic studies, drainage plans or reports,
tentative parcel maps, development agreements, governmental permits and
approvals and any conditions thereto, environmental audits and reports,
environmental remediation plans (and all correspondence and documents
related thereto), environmental impact reports, permits, inspections,
reports, notices and/or correspondence regarding the condition of the
Property or governmental agency review and approval respecting fire,
building, health, zoning and use compliance.
(c) The most recently available survey of the Property, if any, showing
all huprovements and things located on the Property and within ten (10)
feet of the outside property line of the Property.
6.4 Entry for Investigation.
(a) Subject to the conditions hereafter stated, Seller grants to Buyer, its agents
and employees a limited license to enter upon any portion of the Property for the purpose of
conducting engineering surveys, soil tests, investigations or other studies reasonably necessary to
evaluate the condition of the Property, which studies, surveys, investigations and tests shall be
done at Buyer's sole cost and expense. The license herein granted shall be co-extensive with the
tern of this Agreement or any extension thereof.
1003/012/31756 01 _
(b) Buyer shall (i) conduct all studies in a diligent, expeditious and safe
manner and not allow any dangerous or hazardous conditions to occur on the Property during or
after such investigation; (ii) comply with all applicable laws and governmental regulations; (iii)
keep the Property free and clear of all materialmen's liens, lis pendens and other liens arising out
of the entry and work performed under this paragraph; and (iv) return the Property to its original
condition following Buyer's entry. Buyer agrees to indemnity, defend, protect and hold Seller
and the Property free and harmless from any and all loss, liability, claims, damages and expenses
(including, but not limited to, attorneys' fees and costs) arising directly or indirectly from the
exercise of said license. Such undertaking of indemnity shall survive Close of Escrow or the
termination of this Agreement for any reason.
6.5 Approval of Due Diligence Matters. Buyer shall notify Seller in writing
("Buyer's Due Diligence Notice") on or before the Due Diligence Date of Buyer's approval or
disapproval of each item delivered to or available for review by Buyer pursuant to this Section 6
and of Buyer's approval or disapproval of the condition of the Property and Buyer's
investigations with respect thereto (excluding title matters which are to be approved or
disapproved pursuant to Section 5.1 above) (collectively, the "Due Diligence Items"), which
approval may be withheld in Buyer's sole and absolute discretion. In the event Buyer fails to
give written notice of its approval, then it shall be deemed that Buyer has disapproved the
condition of the Property.
In the event of Buyer's disapproval of a condition of the Property, within ten (10) days
after Seller's receipt of Buyer's Due Diligence Notice, Seller shall give Buyer written notice
("Seller's Due Diligence Notice") of those conditions that Seller will attempt to cure. Seller
shall thereafter promptly use all reasonable efforts to cure such conditions, prior to the Close of
Escrow, at its sole cost and expense.
In the event that Seller delivers a Seller's Due Diligence Notice listing any of the
disapproved Property conditions, Buyer shall have the right to (a) terminate this Agreement or
(b) acquire the Property subject to the disapproved Property conditions included within Seller's
Due Diligence Notice. Such right shall be exercised by Buyer by giving either written notice of
such termination ("Termination Notice") or written notice of such election to accept the
disapproved Property conditions ("Property Acceptance Notice") to Seller within twenty (20)
days after Buyer's receipt of Seller's Due Diligence Notice. In the event that Buyer should fail
to give either the Termination Notice or the Property Acceptance Notice within the time period
set forth in the preceding sentence, Buyer shall be deemed to have given a Termination Notice
6.6 Approval of Additional Due Diligence Matters. In the event Seller becomes
aware of or obtains possession of any new Due Diligence Items after the Due Diligence Date,
Seller will provide Buyer with written notice of such Due Diligence Item to Buyer. Buyer shall
have the right to review and approve such Due Diligence Item in the same manner as set forth in
Section 6.5 above; provided, however, that Buyer's period to review and approve or disapprove
such additional Due Diligence Item shall be limited to fifteen (15) days following receipt of
notice of such new Due Diligence Item, together with a copy of any written document relating
thereto.
1003/012/31756 01
7. CONDITIONS PRECEDENT TO CLOSE OF ESCROW.
7.1 Conditions to Buyer's Obligations. The obligations of Buyer under this
Agreement shall be subject to the satisfaction or written waiver, in whole or in part, by Buyer of
each of the following conditions precedent:
(a) Title Company will issue the Title Policy as required by Section 5.2 of this Agreement.
(b) Buyer has approved or deemed to have approved the condition to title of the
Property on or before the date provided in Section 5.1.
(C Buyer has approved or deemed to have approved all Due Diligence Items on or
before the Due Diligence Date.
(d) Buyer's approval with the environmental testing and contingency under Section
7.3.
(e) Seller has removed from the Property all equipment, personal property, debris
and waste.
(0 Escrow Holder holds and will deliver to Buyer the instruments and funds, if any,
accruing to Buyer pursuant to this Agreement.
(g) All representations and warranties specified in Section 9.1 are true and correct.
(h) Buyer's approval of any other conditions specified in this Agreement.
(i) Seller shall not be in default of any term or condition of this Agreement.
0) Buyer is able to acquire the four additional parcels, as described in Section 8.2.
Buyer's approval shall be based upon Buyer's sole and absolute discretion; provided,
however, if Buyer has not delivered written notice of approval of the above conditions to Seller
and Escrow Holder by the times provided above, or if no time is provided, on or before the Close
of Escrow, each such condition shall automatically and conclusively be deemed to have been
disapproved by Buyer. Buyer may waive such automatic disapproval in writing.
7.2 Conditions to Seller's Obligation. The obligations of Seller under this
Agreement shall be subject to the satisfaction or written waiver, in whole or in part, by Seller of
each of the following conditions precedent:
(a) Escrow Holder holds and will deliver to Seller the instruments and funds accruing to
Seller pursuant to this Agreement.
(b) Buyer shall not be in default of any term or condition of this Agreement.
If requested by Escrow Holder or Buyer, Seller shall deliver to Escrow Holder
and Buyer written notice of satisfaction of the conditions set forth in this Section 7.2.
7.3 Environmental Testing and Contingency.
The Closing of Escrow shall be subject to and conditioned upon Buyer's written
acceptance, approval of the physical and environmental conditions at, under and about the
1003/012/3175601 ___ -_ _7___,
Property, and the absence from the Property of any hazardous substances, hazardous wastes
and/or hazardous materials as such terns are defined in their broadest form under any applicable
federal, state or local law or regulation, and any other kind of soil, air, or water contamination.
Upon Buyer's review of any Phase I or Phase H Report and completion of any other testing
Buyer deems necessary, if Buyer, in its sole discretion, determines that an additional
environmental assessment, including but not limited to, a new or supplemental Phase II
Environmental Assessment Report, is necessary, then Buyer may elect to obtain such assessment
at its sole cost, provided such assessment is complete by the Due Diligence Date.
7.4 Covenant of Seller and Buyer. Buyer and Seller agree to cooperate with one
another, at no cost or expense to the cooperating party, in satisfying the conditions precedent to
Close of Escrow. Buyer shall be responsible for proceeding with diligence and in good faith to
satisfy the conditions to Buyer's performance set forth in Section 7.1 and Seller shall be
responsible for proceeding with diligence and in good faith to satisfy the conditions to Seller's
performance set forth in Section 7.2.
7.5 Termination for Failure of Condition. hi the event Buyer fails to approve or
disapprove any condition precedent specified in Section 7.1 or elsewhere in this Agreement on or
before the date for approval set forth therein, Seller shall notify Buyer of such failure and Buyer
shall have a period of twenty (20) days from receipt of such notice to elect to approve such
matter or to disapprove such matter and terminate this Agreement. The failure of Buyer to
approve such matter within said twenty (20) days shall be deemed to constitute disapproval
thereof and Buyer's election to terminate. In the event Seller fails to approve or disapprove any
condition precedent specified in Section 7.1 or elsewhere in this Agreement on or before the date
for approval set forth therein, Buyer shall notify Seller of such failure and Seller shall have a
period of twenty (20) days from receipt of such notice to elect to approve such matter or to
disapprove such matter and terminate this Agreement. The failure of Seller to approve such
matter within said twenty (20) days shall be deemed to constitute disapproval thereof and
Seller's election to tenninate. In the event Buyer or Seller terminates this Agreement based on
the disapproval of one or more of said conditions precedent as provided herein, Buyer shall be
entitled to all sums deposited into Escrow, paid to Seller as a portion of the Purchase Price.
8. ADDITIONAL COVENANTS OF BUYER AND SELLER.
8.1 Environmental Claims. Seller shall retain all liability under all Environmental
Laws asserted at any time in connection with any set of facts or conditions existing in, on or
about the Property prior to Closing arising from its ownership of the Property (hereinafter
referred to as "Retained Environmental Liabilities"). For purposes of this Agreement,
"Environmental Laws" shall mean all federal, state or local statutes, regulations, ordinances,
codes or rules as such have been or may hereafter be enacted, adopted, amended or
supplemented and all common law causes of action relating to the protection of human health or
the environmental, including without limitations the Comprehensive Environmental Response,
Compensation and Liability Act of 1980, as amended (42 U.S.C. Section 9601, et seq.), the
Resource Conservation and Recovery Act, as amended (42 U.S.C. Section 6901, et seq.), the
Federal Water Pollution Control Act, as amended (33 U.S.C. Section 7401, et seq.), the Toxic
Substance Control Act, as amended (15 U.S.C. 2601, et seq.), the Safe Drinking Water Act, as
amended (42 U.S.C. Section 300f, et seq.), the Federal hisecticide, Fungicide and Rodenticide
Act, as amended (7 U.S.C. Section 136, et seq.) and the Clean Air Act, as amended (42 U.S.C.
7401, et seq.), and private rights of action for nuisance or damages to property or persons.
C1003/012/31756.01
Notwithstanding any contrary provisions of this Agreement or otherwise, upon the
execution of this Agreement by Buyer, Buyer shall and does hereby release Seller.from any
liability, cost or expense Buyer may incur as a result of Buyer's purchase of the Property or the
presence of any Hazardous Materials (hereinafter defined) which are or may be located in, on or
about the property commencing on the Close of Escrow or at any time thereafter, with the
exception of the Retained Environmental Liabilities. Such release shall survive the Closing
Date. For the purposes of this Agreement, Hazardous Materials shall be deemed to mean
asbestos, polychlorinated biphenyls, petroleum or by-products thereof, radioactive materials, or
any chemical, material or substance included in the definitions of "hazardous substances",
"hazardous materials", "hazardous waste", "toxic substances" and/or words of similar import
under any federal, state and local laws, ordinances, rules and regulations whether present or
future, relating to and/or dealing with the protection of the environment and/or human health and
safety and/or applicable to the generation, handling, manufacture, installation, treatment, storage,
use, transportation, discharge, disposal, presence and/or release into the air, soil, water at, above
or below ground level (whether accidental or intentional) of such substances or materials.
8.2 Survival. Notwithstanding any other provision of this Agreement, the provisions
of this Section 8 shall survive the Close of Escrow and the delivery of the Grant Deed.
9. REPRESENTATIONS AND WARRANTIES.
9.1 Representations and Warranties. Seller hereby makes the following
representations and warranties to Buyer, each of which (i) is material and relied upon by Buyer
in malting its determination to enter into this Agreement; (ii) to Seller's actual knowledge, is true
in all respects as of the date hereof and shall be true in all respects on the date of Close of
Escrow on the Property; and (iii) shall survive the Close of Escrow of the purchase and sale of
the Property as well as any future transfer of the Property to Buyer or any transferee, successor
or assignee of Buyer:
(a) There are no pending or threatened litigation, allegations, lawsuits or
claims, whether for personal injury, property damage, property taxes,
contractual disputes or otherwise, which do or may affect the Property or
the operation or value thereof, and there are no actions or proceedings
pending or, to the best of Seller's knowledge, threatened against Seller
before any court or administrative agency in any way connected with the
Property and neither the entering into of this Agreement nor the
consummation of the transactions contemplated hereby will constitute or
result in a violation or breach by Seller of any judgment, order, writ,
injunction or decree issued against or imposed upon it. There is no action,
suit, proceeding or investigation pending or threatened against Seller
which would become a cloud on Buyer's title to or have a material adverse
impact upon the Property or any portion thereof or which questions the
validity or enforceability of the transaction contemplated by this
Agreement or any action taken pursuant hereto in any court or before or
by any federal, district, county, or municipal department, commission,
board, bureau, agency or other governmental instrumentality.
(b) There are no contracts, leases, claims or rights affecting the
Property and no agreements entered into by or under Seller shall survive
Pon
1003/012/31756.01 _9_ -
the Close of Escrow that would adversely affect Buyer's rights with
respect to the Property, except as heretofore disclosed in writing by Seller
to Buyer pursuant to Section 6.3.
(c) Seller has delivered or, within the period required in Section 6.3,
will have delivered true, correct and complete copies of all the documents
and other information specified in Section 6.3 in Seller's possession or
control (or has reasonable access thereto). To the best of Seller's
knowledge, the infonnation contained in the said documents is true and
accurate.
(d) No part of the Property has been used by Seller for the use,
storage, disposal, or release of toxic or hazardous substances or wastes and
that, to the best of Seller's actual knowledge, no part of the Property has
ever been so used.
(e) There are no executory contracts, options or agreements existing
(other than this Agreement) relating to the purchase of all or any portion
of the Property or any interest therein.
(f) All federal, state, municipal, county and local taxes, the
nonpayment of which might become a lien on or affect all or part of the
Property, which are due and payable prior to the Closing have been paid,
or on the Closing Date will have been paid in full.
(g) There are no contingent liabilities arising out of the ownership or
operation of, or affecting, the Property or any part thereof which would be
binding upon the Buyer or to which the Property would be subject after
the Closing.
(h) Seller has obtained, or will obtain before the Close of Escrow, all
required consents, releases and permissions in order to vest good and
marketable title in Buyer.
(i) The closing of the various transactions contemplated by this
Agreement will not constitute or result in any default or event that with the
notice or lapse of time, or both, would be a default, breach or violation of
any lease, mortgage, deed of trust or other agreement, instrument or
arrangement by which Seller or the Property are bound. The execution
and delivery of this Agreement and the consummation of the transactions
contemplated hereby will not violate any provision of, or require any
consent, authorization or approval under any law or administrative
regulation or any order, award, judgment, writ, injunction or decree
applicable to, or any governmental permit or license issued to Seller
relating to the Property.
0) Other than those conditions or encumbrances expressly identified
in the Preliminary Title Report which have been approved by Buyer
1003/012/31756 01
pursuant to Section 5.1 above, no defects or conditions of any portion of
the Property or the soil exists which may impair the use of the Property.
(k) All representations and warranties made hereunder are in addition
to any representations and warranties implied by law and in no event shall
this Section 9.1 be construed to limit, diminish or reduce any obligation of
disclosure implied upon Seller by law.
9.2 Changed Circumstances. If Seller becomes aware of any fact or circumstance
which would change or render incorrect, in whole or in part, any representation or warranty
made by Seller under this Agreement, whether as of the date given or any time thereafter through
the Close of Escrow and whether or not such representation or warranty was based upon Seller's
knowledge and/or belief as of a certain date, Seller will give immediate written notice of such
changed fact or circumstance to Buyer, but such notice shall not release Seller of its liabilities or
obligations with respect thereto. Seller shall issue a certificate as of the Close of Escrow stating
that all the representations and warranties contained in Section 9.1 are hue and correct as of said
date, or setting forth in detail which of such matters are not true and correct. Buyer shall have
ten (10) days from the receipt of any notice by Seller of the material change of any
representation or warranty made by Seller hereunder to tenninate this Agreement by providing
written notice to Seller and Escrow Holder, and receive return of its Deposit and any other sums
deposited in the Escrow.
10. ESCROW PROVISIONS.
10.1 Escrow Instructions. This Agreement, when signed by Buyer and Seller, shall
also constitute escrow instructions to Escrow Holder. If required by Escrow Holder, Buyer and
Seller agree to execute Escrow Holder's standard escrow instructions, provided that the same are
consistent with and do not conflict with the provisions of this Agreement. In the event of any
such conflict, the provisions of this Agreement shall prevail.
10.2 General Escrow Provisions. Escrow Holder shall deliver the Title Policy to the
Buyer and instruct the Riverside County Recorder to mail the Grant Deed to Buyer at the address
set forth in Section 14.13 after recordation. All funds received in this Escrow shall be deposited
in one or more general escrow accounts of the Escrow Holder with any bank doing business in
Riverside County, California, and may be disbursed to any other general escrow account or
accounts. All disbursements shall be made by Escrow Holder's check.
10.3 Proration of Real Pronely Taxes.
(a) All non-delinquent general and special real property taxes and assessments
shall be paid by Seller, prorated to the Close of Escrow on the basis of a thirty (30) day month
and a three hundred sixty day (360) year. Seller acknowledges that Buyer is a governmental
agency, not subject to payment of taxes. Accordingly, Seller shall be solely responsible for
seeking a refund of any overpayment of taxes from the appropriate taxing agencies. In the event
that property taxes are assessed on a parcel of real property which includes land other than the
Property, such proration shall include only taxes attributable to the Property, calculated in terms
of total gross square feet of land assessed pursuant to the tax statement versus total gross square
footage of the Property. Any supplemental tax bills received after Close of Escrow shall be paid
by Seller to the extent they relate to a period prior to Close of Escrow. If a supplemental tax bill
1003/012/31756.01
covers a period commencing before and continuing after Close of Escrow, Seller will pay the tax
and shall be solely responsible for seeking any refund from the appropriate taxing agency. The
provisions of this Section shall survive Close of Escrow.
(b) The provisions of this Section shall survive Close of Escrow. If either
party fails to pay its pro rata share of taxes or other expenses by the times herein provided,
interest shall accrue on all unpaid amounts from when owing until paid at five percent (5%) over
the Federal Discount Rate quoted by the Federal Reserve Bank of San Francisco on the 25th day
of the month preceding the date interest commences to accrue.
10.4 Payment of Costs. Seller shall pay one-half (1/2) of the Escrow fee, all
documentary transfer taxes, all title insurance premiums for that portion of the Title Policy
premium which would be incurred for a CLTA form policy, and the charge for drawing the
Grant Deed. Buyer shall pay one-half (1/2) of the Escrow fee, all charges for recording the
Grant Deed, and that portion of the Title Policy premium which is attributable to the additional
cost of obtaining any additional coverage requested by Buyer, including the difference between
CLTA and ALTA coverage. Seller and Buyer shall each be responsible for their respective
attorneys' fees and costs. All other costs of Escrow not otherwise specifically allocated by this
Agreement shall be apportioned between the parties in a manner consistent with the custom and
usage of Escrow Holder.
10.5 Termination and Cancellation of Escrow. If Escrow fails to close as provided
above, Escrow shall terminate automatically without further action by Escrow Holder or any
party, and Escrow Holder is instructed to return all funds and documents then in Escrow to the
respective depositor of the same with Escrow Holder; provided that any document which has
been signed by a party who is not to receive the return of such document, shall be marked "void
and of no force or effect" by Escrow Holder before it is delivered. Cancellation of Escrow, as
provided herein, shall be without prejudice to whatever legal lights Buyer or Seller may have
against each other arising from the Escrow or this Agreement.
11. BROKERAGE COMMISSIONS.
Buyer and Seller each represent and warrant to the other parties that no third party is
entitled to a broker's commission and/or finder's fee with respect to the transaction contemplated
by this Agreement. Buyer and Seller each agree to indemnify and hold the other parties harmless
from and against all liabilities, costs, damages and expenses, including, without limitation,
attorneys' fees, resulting from any claims or fees or commissions, based upon agreements by it, if
any, to pay a broker's commission and/or finder's fee.
12. POSSESSION.
Possession of the Property shall be delivered to Buyer as of Close of Escrow. hi the
event any personal property remains on the Property following the Close of Escrow, it shall
automatically become the property of Buyer.
13. DEFAULTS; ENFORCEMENT.
13.1 Defaults and Right to Cure. Failure or delay by either party to timely perform any
covenant of this Agreement constitutes a default under this Agreement, but only if the party who
so fails or delays does not commence to cure, correct or remedy such failure or delay within
thirty (30) days after receipt of a written notice specifying such failure or delay, and does not
1003/012/31756.01
thereafter prosecute such cure, correction or remedy with diligence to completion. The injured
party shall give written notice of default to the party in default, specifying the default complained
of by the injured party. Except as required to protect against further damages, the injured party
may not institute proceedings against the party in default until thirty (30) days after giving such
notice. Failure or delay in giving such notice shall not constitute a waiver of any default, nor
shall it change the time of default.
13.2 Specific Performance. In addition to any other remedies permitted by this
Agreement, if either party defaults hereunder by failing to perform any of its obligations herein,
each party agrees that the other shall be entitled to the judicial remedy of specific performance,
and each party agrees (subject to its reserved right to contest whether in fact a default does exist)
not to challenge or contest the appropriateness of such remedy.
14. MISCELLANEOUS.
14.1 Successors and Assigns. This Agreement shall be binding upon the parties hereto
and their respective heirs, representatives, transferees, successors and assigns. The transfer of all
or any part of the interest of any party hereunder in the Property shall not release Seller of their
obligations under this Agreement.
14.2 Time Period Computations. All periods of time referred to in this Agreement
shall include all Saturdays, Sundays and California state or national holidays unless the reference
is to business days, in which event such weekends and holidays shall be excluded in the
computation of time and provide that if the last date to perform any act or give any notice with
respect to this Agreement shall fall on a Saturday, Sunday or California state or national holiday,
such act or notice shall be deemed to have been timely performed or given on the next
succeeding day which is not a Saturday, Sunday or Califona state or national holiday.
14.3 Qualification; Authority. Each individual executing this Agreement on behalf of
a partnership or corporation represents and warrants that such entity is duly formed and
authorized to do business in the State of California and that he or she is duly authorized to
execute and deliver this Agreement on behalf of such partnership or corporation in accordance
with authority granted under the formation documents of such entity, and, if a corporation, by a
duly passed resolution of its Board of Directors, that all conditions to the exercise of such
authority have been satisfied, and that this Agreement is binding upon such entity in accordance
with their respective ternis. Upon request of either party, Escrow Holder or Title Company,
Buyer and Seller agree to deliver such documents reasonably necessary to evidence the
foregoing.
14.4 Attorneys' Fees. In the event of any dispute between the parties hereto arising out
of the subject matter of this Agreement or the Escrow, 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
actual attorneys' fees and other expenses and costs in connection with such action or proceeding
(including expert witness fees) in addition to its recoverable court costs.
14.5 Interpretation; Govenung 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
- ---
7 003/012/3 7 756.01 -13-
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.
14.6 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.
14.7 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.
14.8 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, provision,
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.
14.9 Merger of Prior Agreements and Understandings. This Agreement and other
documents incorporated herein by reference contain the entire understanding between the parties
relating to the transaction contemplated hereby and all prior or contemporaneous agreements,
understandings, representations and statements, oral or written, are merged herein and shall be of
no further force or effect.
14.10 Covenants to Siuvive Escrow. The covenants and agreements contained herein
shall survive the Close of Escrow and, subject to the limitations on assignment contained in
Section 14.1 above, shall be binding upon and inure to the benefit of the parties hereto and their
representatives, heirs, successors and assigns.
14.11 Consent of Parties. Whenever by the ternis of this Agreement the consent or
approval of Buyer or Seller is to be given, such consent or approval shall be evidenced by the
signature of one person designated for such purpose. Initially such person for Seller shall be
Lincoln Saul and such person for Buyer shall be the Executive Director of Buyer. Such
designated persons may be changed by the party so designating at any time by the delivery of a
written notice to the other party.
14.12 Execution in Counterpart. This Agreement and any modifications, amendments
or supplements thereto 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.
14.13 Notices. Any notice which either party may desire to give to the other party or to
the Escrow Holder 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; (iii) twenty-four (24) hours after deposit before the daily
1003/012/31756 01
00
deadline time with a reputable overnight courier or service;or (iv) upon receipt of a telecopy or
fax transmission, provided a hard copy of such transmission shall be thereafter delivered in one
of the methods described in the foregoing (i) through (iii); 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:
To Seller: Mr. Henry Shalom
Russell Associates, LLC
4348 Van Nuys Blvd#201
Sherman Oaks, CA 91403
To Buyer: Commin ity Redevelopment Agency of the
City of Palm Springs
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attn: Executive Director
Copy to: Aleshire & Wynder, LLP
18881 Von Darman Avenue, Suite 400
Irvine, CA 92612
Attn: David J. Aleshire, Esq.
Facsimile_ (949) 223-1180 _
14.14 Election to Exchange. Buyer is aware that Seller intends to perform an IRC
Section 1031 tax deferred exchange. Seller requests, and Buyer agrees, to provide Buyer's
cooperation in such an exchange. Buyer's approval shall not be unreasonably withheld to an
assignment of this contract by Seller to accommodate such an exchange. Seller will hold Buyer
harmless from any and all claims, costs, liabilities, or delays in time resulting from such an
exchange.
14.15 Exhibits. Exhibits "A" and`B," inclusive, attached hereto, are incorporated
herein by this reference.
1 1003/012131756.01 -15- _
IN WITNESS WHEREOF, the parties hereto have executed this Agreement of Purchase
and Sale of Real Property and Escrow Instructions as of the date set forth above.
"SELLER"
RUSSELL ASSOCIATES, LLC, a California
limited liability corporation
Henry Shalom, its
"BUYER"
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS,
a public body, corporate and politic
By:
Agency Secretary Executive Director
APPROVED AS TO FORM
ALESHIRE & WYNDER, LLP
David J. Aleshire, Esq.
Agency Counsel
1003/012/31756.01 _16_
SCHEDULE OF EXHIBITS
EXHIBIT "A" LEGAL DESCRIPTION OF LAND
EXHIBIT `B" GRANT DEED
- - - -
1003/012/31766.01
EXHIBIT "A"
LEGAL DESCRIPTION OF LAND
The Land is that certain real property located in the City of Pahn Springs, County of
Riverside, State of California, described as follows:
— / —
7003/Ol2/31756.01 _18_ �-
EXHIBIT "B"
GRANT DEED
RECORDING REQUESTED BY AND
WHEN RECORDED MAIL TO:
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS
3200 E. Tahquitz Canyon Way
Palm Springs, CA 92262
Attn: Executive Director
Space above this line for Recorder's Use
Order No.
Escrow No.
GRANT DEED
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged,
RUSSELL ASSOCIATES, LLC, a California limited liability corporation, hereby grants to the
COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public
body, corporate and politic, the real property in the City of Palm Springs, County of Riverside,
State of California, described in Exhibit "l" attached hereto and incorporated herein by reference
(the "Property").
The Property conveyed hereby is subject to (i) non-delinquent general and special real
property taxes and assessments; and (ii) matters of record.
Dated: 2004 Russell Associates, LLC a California limited
liability corporation
By:
Hemy Shalom,
c ra. . �
STATE OF CALIFORNIA )
) ss.
COUNTY OF RIVERSIDE )
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 signatures) 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.
Notary Public
[SEAL]
EXI3IBIT "1" TO GRANT DEED
LEGAL DESCRIPTION OF LAND
The Land is that certain real property located in the City of Palm Springs, County of
Riverside, State of California, described as follows:
C t-2�
EXHIBIT "C"
NON-FOREIGN AFFIDAVIT
Section 1445 of the Internal Revenue Code provides that a transferee of a U.S. real
property interest must withhold tax if the transferor is a foreign person. To inform the transferee
that withholding of tax is not required upon disposition of a U.S. real property interest by
HENRY SHALOM, a man ("Transferor"), the undersigned hereby certifies
the following on behalf of Transferor:
1. Transferor is not a foreign corporation, foreign partnership, foreign bust or
foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax
Regulations);
2. Transferor's U.S. employer identification or social security number is
; and
3. Transferor's office address is
The undersigned understands that this certification may be disclosed to the Internal
Revenue Service by the transferee and that any false statement contained herein could be
punished by fine, imprisonment, or both.
Under penalties of perjury, we declare that we have examined this certification and to the
best of our knowledge and belief, it is true, correct, and complete, and we further declare that we
have authority to sign this document on behalf of Transferors.
Dated: 2004 Henry Shalom, a
Henry Shalom
"Transferor"
Address of Property for Sale:
See legal description attached as Exhibit"A"
ri
C 1LX
RESOLUTION NO.
OF THE COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF PALM SPRINGS,CALIFORNIA,APPROVING
AN AGREEMENT FOR PURCHASE AND SALE OF REAL
PROPERTY AND ESCROW INSTRUCTIONS WITH
RUSSELL ASSOCIATES, LLC OF SHERMAN OAKS FOR
285 NORTH INDIAN CANYON DRIVE (DESERT HOTEL),
MERGED AREA #1 FOR THE PURPOSES OF
FACILITATING A DOWNTOWN DEVELOPMENT
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, 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
WHEREAS, Section 33432 of the Community Redevelopment Law requires that any such
lease shall be conditioned on the redevelopment and use of the property in conformity with
the redevelopment plan; and
NOW, THEREFORE, BE IT RESOLVED by the Community Redevelopment Agency of the
City of Palm Springs as follows:
SECTION 1. The Agreement for Purchase and Sale of Real Property and Escrow
Instructions with Russell Associates, LLC of Sherman Oaks, CA for
the purchase of a 5,800 square foot property located at 285 North
Indian Canyon Drive, the Desert Hotel, in the amount of $160,000
plus fees and costs to facilitate the redevelopment of downtown is
hereby approved and incorporated herein by this reference.
SECTION 2. The Chairman of the Agency, and/or his designee, is authorized to
execute all necessary documents, in a form approved by the
Agency Counsel.
ADOPTED this day of , 2004.
AYES:
NOES:
ABSENT:
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
CITY OF PALM SPRINGS, CALIFORNIA
By
Assistant Secretary Chairman REVIEWED &APPROVED lo/���_MI.
RESOLUTION NO.
OF THE COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF PALM SPRINGS, CALIFORNIA, AMENDING
THE BUDGET FOR THE 2004-05 FISCAL YEAR.
WHEREAS Resolution 1255 approving the budget for the fiscal year 2004-05 was adopted
on June 9, 2004; and
WHEREAS the Executive Director has recommended, and the Agency desires to approve,
certain amendments to said budget;
NOW THEREFORE BE IT RESOLVED that the Director of Finance is authorized to record
inter-fund cash transfers as required in accordance with this Resolution, and that Resolution
1255, adopting the budget for the 2004-05 fiscal year is hereby amended as follows:
SECTION 1. ADDITIONS
Fund Activity I Account Amount
811 8191 to be assigned $180,000
Purpose to appropriate funds for the acquisition of The Desert Hotel, property located at 285
N. Indian Canyon Drive, ($160,000 net to seller with balance for fees and closing costs).
SECTION 2. SOURCE
Fund I Activity Account Amount
811 -Merged Area#1 29301 -Fund Balance $180,000
Adopted this day of 12004.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By
City Clerk City Manager
REVIEWED AND APPROVED