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Home My WebLink About12/19/2007 - STAFF REPORTS - RA.2. 4b�BR"�R.10 � C-0 Community Redevelopment Agency Staff Rego DATE: DECEMBER 19, 2007 CONSENT CALENDAR SUBJECT: APPROVAL OF AMENDMENT NO. 2 TO AN EXCLUSIVE AGREEMENT TO NEGOTIATE WITH O & M HR, LLC, A DELAWARE LIMITED LIABILITY CORPORATION, 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 HARD ROCK HOTEL AT THE SOUTHEAST CORNER OF CALLE EL SEGUNDO AND ANDREAS ROAD, MERGED REDEVELOPMENT PROJECT AREA#2, EXTENDING THE TERM TO JUNE 30, 2008 FROM: David H. Ready, Executive Director BY: Community & Economic Development Department SUMMARY: The Agency currently has an Exclusive Agreement to Negotiate with 0 & M HR, LLC, a Delaware Limited Liability Corporation, for the 5.7 acre parcel at Calle El Segundo and Andreas Road for the purpose of developing a Hard Rock Hotel. The Agency awarded the ENA at the October 5, 2005 meeting to Nexus Development Corporation-Central Division, a California Corporation, and extended it to December 31, 2007. The Agency and Nexus entered an Assignment and Assumption Agreement on July 18, 2007, granting 0 & M HR, LLC the rights under the ENA. The Developer has proceeded with the design and development of the project, receiving the entitlement on the project by the City in October, 2007, and has completed the acquisition of the two adjacent parcels to assemble the 10 acre site. Delays in finalizing the acquisition of the adjacent properties, plus legal issues arising from the entitlement approval, have created the need to extend the ENA prior to bringing the Disposition and Development Agreement forward. Staff believes that six months should be sufficient time to complete work on all the outstanding issues, at which time a Disposition and Development Agreement would be brought forward for approval. /� Item No. R " 2. RECOMMENDATION: COMMUNITY REDEVELOPMENT AGENCY RECOMMENDATION: 1. Adopt Resolution No. , "A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AMENDMENT NO. 2 TO AN EXCLUSIVE AGREEMENT TO NEGOTIATE WITH O & M HR, LLC, A DELAWARE LIMITED LIABILITY CORPORATION, FOR A 5.7+ ACRE AGENCY OWNED PARCEL FOR THE DEVELOPMENT OF A HARD ROCK HOTEL AT THE SOUTHEAST CORNER OF CALLE EL SEGUNDO AND ANDREAS ROAD, MERGED PROJECT AREA #2, EXTENDING THE TERM TO JUNE 30, 2008" 2. AUTHORIZE THE EXECUTIVE DIRECTOR TO EXECUTE THE AMENDMENT IN A FORM ACCEPTABLE TO THE AGENCY XY C2—r�A� Jo S. ay nd, Director of Thomas J. W' on Co m ity & conomic Development Assistant City Manager, Development Services David H. Ready, Exec rector Attachments: 1. CRA Resolution 2. Amendment No. 2 to the Exclusive Agreement to Negotiate 000002 RESOLUTION NO. A RESOLUTION OF THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, CALIFORNIA, APPROVING AMENDMENT NO. 2 TO AN EXCLUSIVE AGREEMENT TO NEGOTIATE WITH O & M HR, LLC, A DELAWARE LIMITED LIABILITY CORPORATION, FOR A 57+ ACRE AGENCY OWNED PARCEL FOR THE DEVELOPMENT OF A HARD ROCK HOTEL AT THE SOUTHEAST CORNER OF CALLE EL SEGUNDO AND ANDREAS ROAD, MERGED PROJECT AREA #2, EXTENDING THE TERM TO JUNE 30, 2008 NOW THEREFORE BE IT RESOLVED by the Community Redevelopment Agency of the City of Palm Springs, as follows: SECTION 1. This Amendment No. 2 to the Exclusive Agreement to Negotiate with O & M HR, LLC, a Delaware Limited Liability Corporation, is hereby approved. SECTION 3. The Executive Director, or his designee, is hereby authorized to execute on behalf of the Agency the Amendment, in a form approved by Agency Counsel. PASSED, APPROVED, AND ADOPTED THIS DAY OF DECEMBER, 2007. STEVE POUGNET, CHAIRMAN ATTEST: James Thompson, City Clerk 090003 CERTIFICATION STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF PALM SPRINGS ) I, JAMES THOMPSON, City Clerk of the City of Palm Springs, do hereby certify that Resolution No. is a full, true and correct copy, and was adopted at a regular meeting of the Palm Springs City Council on the day of 2007, by the following vote: AYES: NOES: ABSENT: ABSTAIN: James Thompson, City Clerk City of Palm Springs, California AMENDMENT NO. 2 TO THE EXCLUSIVE AGREEMENT TO NEGOTIATE 0 & M HR, LLC, A DELAWARE LIMITED LIABILITY CORPORATION THIS AMENDMENT NO. 2 TO THE EXCLUSIVE AGREEMENT TO NEGOTIATE ("Agreement') is made this day of 2007, by and between THE CITY OF PALM SPRINGS ("City"), and O & M HR, LLC, A DELAWARE LIMITED LIABILITY CORPORATION ("Developer"). RECITALS A. On November 30, 2005 Agency and Developer entered into an Exclusive Agreement to Negotiate ("ENA") with Nexus Development Corporation -- Central Division ("Nexus") for the purposes of negotiating a Disposition and Development Agreement for the sale of Agency-owned property generally described as the Prairie Schooner lots and the development of a Hard Rock Hotel on the Parcel. B. The Agency and Nexus entered an Assignment and Assumption Agreement on July 18, 2007, granting O & M HR, LLC the rights under the ENA. C. Developer has proceeded in good faith in the planning of the project and the acquisition of two adjoining properties for inclusion in the project. D. Developer received entitlements for the Project on October 3, 2007 and has requested additional time to complete the required milestones identified in the Schedule of Performance and an extension of the period of negotiation in which to complete all tasks identified in the ENA and the Schedule of Performance; such changes were a result of the extended negotiating period for the acquisition of one of the parcels and legal issues that have arisen in relation to the Project approval by the City. E. The ENA provides for extensions by the mutual agreement of the parties (Section 2.A.3). F. The parties amended the ENA in Amendment No. 1 in 2006 to extend the period of time to December 31, 2007. G. Agency agrees that an extension of time is warranted and in the best interests of the Agency for the orderly completion of the required milestones and the negotiation of a Disposition and Development Agreement. NOW, THEREFORE, and in consideration of the foregoing Recitals, Agency and Developer agree as follows: 000095 AGREEMENT 1. The foregoing Recitals are true and correct. 2. The first sentence of Section 2.A of the ENA shall be amended to read: "The term of this Agreement shall be for the period of time from November 30, 2005, to June 30, 2008 (the 'Period of Negotiation") and it is the intent of the Parties to negotiate and prepare definitive documentation reflecting the transaction for execution and delivery within such Period of Negotiation." 3. All other terms and conditions of the original ENA shall remain unchanged and in full force and effect. 4. The persons executing this Amendment on behalf of the Parties warrant that they are duly authorized to execute this Amendment on behalf of said parties and that by doing so executing this Amendment the parties hereto are formally bound to the provisions of this Amendment. "AGENCY" THE COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF PALM SPRINGS, a public body, corporate and politic David H. Ready, Executive Director ATTEST: Assistant Secretary APPROVED AS TO FORM: Agency Counsel [SIGNATURES CONTINUED ON NEXT PAGE] 000006 -2- "DEVELOPER" O & M HR, LLC, A DELAWARE LIMITED LIABILITY CORPORATION (Check One: _individual, _partnership, _corporation) 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.)