HomeMy WebLinkAbout4/7/2004 - STAFF REPORTS (12) is
DATE: April 7, 2004
MEMO TO: City Council
FROM: Director of Finance & Treasurer
RE: Lease Amendment and Settlement Agreement to Master Land Lease with Bureau of
Indian Affairs —Convention Center/Wyndham Hotel/Parcel 4 land lease (PSL-315)
RECOMMENDATION:
It is recommended that the City Council approve the First Amendment to Business Lease 315 and
the Settlement Agreement covering terms of the same lease.
SUMMARY:
The recommended action settles a dispute between the Indian allottee owners of the land and the
City regarding the interpretation of the percentage rent calculations in the lease.
The City will pay a total of$550,000 over the next two years, increase the Guaranteed Minimum
Annual Rental (GMAR) fee to $1,200,000 for calendar year 2005 and agree to a reappraisal of the
land after 10 years. The percentage rental calculation will be eliminated, as well as the annual audit
requirement and the requirement that the City develop a hotel on the vacant parcel opposite the
Convention Center on Caballeros Road. The process of approval of future additions to the
Convention Center was also simplified. Many other significant beneficial changes are made to the
Lease.
BACKGROUND:
The Wyndham Hotel and the Convention Center are built on land which is leased from the Indians
via the Bureau of Indian Affairs. The original Master Lessee was SENCA Corporation, a private
developer. The City acquired the lease from SENCA in 1989. The lease, with an optional 25-year
extension, runs to 2074.
The annual rental payment is calculated two ways. It is the higher of the GMAR or the Percentage
Rental calculation. The GMAR is the original lease amount adjusted by the C.P I. increase every five
years. For calendar year 2004, the GMAR was $872,687. The next adjustment, due for calendar
year 2005, was expected to increase the GMAR to about $1,020,000. The City's position was that
the GMAR had always exceeded the percentage rental, and therefore only that amount was paid
In 2002, the allottees, via a local CPA they had retained, challenged that assumption. Their position
was that all the gross revenue of the Convention Center, not just the facility rentals and catering
revenue, should be included in the percentage rental calculation. The allottees' interpretation
resulted in several years where the percentage sent was higher than the GMAR, and therefore
additional payments were due. The allottees' original claim was for $1.1 million.
The ambiguous language in the lease could be interpreted to support either position. The City was
faced with the choices of going to arbitration, litigating the matter, or negotiating with the allottees
Given the certainty of high legal costs and the uncertainty of the outcome for the two former options,
the City chose the latter.
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The Settlement Agreement and Release requires the City to pay $225,000 within 30 days of the
effective date of the agreement; an additional $225,000 by July 31, 2004; and an additional $100,000
by July 31, 2005. This would satisfy all of the claims related to the percentage rent calculation,
accrued interest and legal and accounting fees. The claims will be paid from the City's Risk
Management Fund.
The First Amendment to the lease would eliminate the percentage rent calculation; increase the
GMAR to $1,200,000 for calendar year 2005; require a reappraisal of the land value every 10 years,
beginning in 2015; eliminate the provision that the City, as Master Lessee, is required to develop a
hotel on the vacant parcel within two years of the Wyndham Hotel reaching an annual occupancy
rate of 72%; eliminates the annual audit requirement; and clarifies the process for gaining BIA
approval of future additions or improvements. The additional GMAR should be covered by increases
in the subleases to the Wyndham Hotel and the Convention Center in 2005.
There is no doubt there is a cost to settling this matter with the allottees. However, unsuccessful
litigation could have been much more costly, and would have created considerable ill will with the
Tribe. The settlement agreement and the lease amendment will put the dispute behind us, and will
help avoid future disputes. If the expansion of the Convention Center is as successful as we hope,
the City's future rental costs may actually be lower under the new lease than they would have been
under the old. An improved revenue stream for the Wyndham Hotel and the Convention Center
would have kicked the rent into the percentage rent calculation even under the City's interpretation
If a new hotel is built on the vacant parcel, the City's revenue will increase dramatically. The rent
will remain at the GMAR levels.
In addition to the financial changes in the lease discussed above, other important changes have
been made in the lease to reduce the potential for disputes between the parties in the future,
including: a) the requirement is removed that the City build another hotel when occupancy of the
Wyndham reaches 72%; b) language is removed which the allottees believe entitle them to approve
subleases or agreements for concessions, catering, parking, use of space, and other event related
services; c) the requirement for a rental bond is deleted; d) landlord approval of construction is only
required where there is a permanent reduction of space of 10% or more of the floor area; e)
contractors and subcontractors can post performance bonds in lieu of the City; f) arbitration
provisions are made mutual; g) sovereign immunity is waived; h) default provisions are clarified,
and the BIA will act on approvals within 30 days. The original lease was negotiated 20 years ago by
SENCA and contained many provisions. We believe these lease changes will be extremely
beneficial to the City.
The attached resolution approving the Settlement Agreement and Release and the First Amendment
to Business Lease— 315 was prepared by the City Attorney's office.
Submitted by Approved
Thomas M. Kanarr David H. Ready
Director of Finance & Treasurer City Manager
Attachments:
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SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release ("Agreement") is made and executed as of
April 7, 2004, by and between the City of Palm Springs, a charter city under the laws of the
Sate of California ("CITY"), the Community Redevelopment Agency of the City of Palm
Springs, a public body corporate and politic ("AGENCY"), (hereinafter the CITY and
AGENCY will be collectively referred to as "LESSEES"), the Business Lease - 315 lessors
who are entering into this Agreement (hereinafter "LESSORS") and the Bureau of Indian
Affairs, which is an authorized representative of the Secretary of the Interior (hereinafter
"BIA,") (hereinafter the LESSORS, the LESSEES and the BIA will be collectively referred to
as the"PARTIES"), with reference to the,following definitions and recitals:
RECITALS:
A. On ,February 28, 1984, 'SENCA Palm Springs Inc., a California corporation
(hereinafter "SENCA") and the LESSORS, and/or their predecessors in interest, entered into
Business Lease - 315 (hereinafter "LEASE"). A true and correct copy of the LEASE is
attached hereto as Exhibit "A," and incorporated herein by this reference.
B. On December 31, 1984, the CITY and AGENCY entered into separate
subleases with SENCA whereby the CITY and AGENCY subleased the leased premises, as
1.
defined in Article 2 and Addendum 1 of the.LEASE (hereinafter "LEASED PREMISES")
from SENCA. A true and correct copy of the subleases are attached hereto as Exhibits `B,"
and "C," and incorporated herein by this reference.
C. A dispute has arisen between'LESSORS and LESSEES stemming from the
LEASE whereby the LESSORS contend that the LESSEES violated the terms and conditions
of the LEASE. Alleged violations of the LEASE include, but are not limited to, allegations
that the LESSEES failed to: (1) conduct accounting and audits in accordance with the LEASE
requirements; (2) pay for accounting and audits performed by Keith A. Shibou, C.P.A. and/or
others in regards to the LEASE; (3) pay percentage rents required by the LEASE for the
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calendar years ending December 31, 1997 through December 31, 2004; (4) pay interest on
rents due and owing under the LEASE for the calendar years ending December 31, 1997
through December 31, 2004; (5) obtain necessary approvals from the BIA of plans and
specifications before beginning construction on the LEASED PREMISES; (6) obtain necessary
approvals of substantial changes to plans and specifications after approval by the BIA; (7)
complete construction of buildings and improvements in accordance with approved and/or
non-approved plans and specifications; (8) complete construction of buildings and
improvements within a reasonable time and/or within an approved schedule; (9) obtain
required approval from the BIA prior to removal and/or demolition of any improvements
and/or buildings on the LEASED PREMISES; (10), provide non-responsibility notices as
required by the LEASE; (11) obtain necessary approvals by the BIA of subleases, assignments,
transfers, management agreements, vendor agreements, concession agreements and other
agreements; (12) provide performance and payment bonds as required by the LEASE; (13)
provide rental bonds as required by the LEASE; (14) respond to notice of defaults issued to
LESSEES by the BIA; (15) submit environmental assessments and impact statement reports or
negative declarations and rulings on said documents to the BIA as required by the LEASE;
(16) diligently attempt to keep the LEASED PREMISES and all parts thereof actively used;
(17) conduct all business on the LEASED PREMISES in good faith during the regular and
customary hours of such businesses and on'all business days during the months of October
through June of each calendar year; and, (18) pay LESSORS' attorneys' fees. A true and
correct copy of correspondence from Keith A. Shibou dated March 19 and December 3, 2003
which delineates some of the LESSORS' contentions and claims for damages is attached
hereto as Exhibits "A" and "E" respectively and incorporated herein by this reference.
D. The LESSEES deny each and every of the LESSORS' contentions set forth in
paragraph "C" above and deny that the LESSORS are entitled to any damages based on the
LESSEES' alleged breaches of the LEASE. ,Hereinafter, all of the LESSORS' claims set forth
in paragraph "C" above, any alleged breach of the terms and conditions of the LEASE by
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LESSORS prior to the EFFECTIVE DATE, hereinafter defined, and the denial thereof by the
LESSEES shall be referred to herein as the "DISPUTE". This Agreement shall be effective as
of the date the last party signs the SETTLEMENT AGREEMENT which shall hereinafter
referred to as the"EFFECTIVE DATE".
E. The PARTIES understand and agree that the DISPUTE arose out of and relates
to the LEASE. The PARTIES desire to resolve all of the issues raised in the DISPUTE and
enter into this Agreement, to FINALLY, FULLY and COMPREHENSIVELY settle the
DISPUTE and any legal action which may arise from such DISPUTE if not effectively settled
herein, so as to allow the PARTIES to continue their pursuits having fully, finally,
comprehensively and conclusively resolved the DISPUTE, as well as all underlying
contentions and allegations.
AGREEMENT:
In consideration of the covenants herein contained, and for good and valuable
consideration, the receipt and adequacy of which is hereby acknowledged, the PARTIES
hereto hereby agree as follows, in full and complete settlement of the DISPUTE.
1. At the time this Agreement is executed, the PARTIES shall also execute and
agree to be bound by the First Amendment to Business Lease - 315 which is attached hereto as
Exhibit "F," and incorporated herein by this reference (hereinafter "First Amendment"). The
First Amendment provides for compensation due and payable under the lease for the calendar
year beginning January 1, 2005 and thereafter. The PARTIES agree that the provisions for
compensation set forth in the First Amendment shall control all payments due and owing for
the calendar year beginning January 1, 2M0 and thereafter and that no other compensation is
due and owing for any calendar years ending before December 31, 2004 other than those
specified in Article 2(a), (b) and (c) below.
2. In exchange for the waivers and releases set forth herein, the CITY shall cause
to be paid to LESSORS a settlement payment in the amount of five hundred fifty thousand
dollars and no cents ($550,000.00) ("SETTLEMENT PAYMENT") in the form of checks
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made payable to "Sheppard, Mullen, Richter&Hampton, LLP, Attorney Trust Account' to be
mailed to Richard M. Freeman at Sheppard, Mullen, Richter & Hampton, LLP, 12544 High
Bluff Drive, Suite 300, San Diego, California 92130-3051 via certified mail return receipt
requested. The SETTLEMENT PAYMENT,shall be made in three payments pursuant to the
following payment schedule:
(a) The first payment in the amount of two hundred and twenty five
thousand dollars and no cents ($225,000.00) shall be paid within (30) days of the EFFECTIVE
DATE. Said payment shall be allocated as follows: one hundred thousand dollars
($100,000.00) to Keith A. Shibou Accounting; fifteen thousand dollars ($15,000.00) to
Sheppard, Mullin, Richter & Hampton LLP; and the balance of one hundred and ten thousand
dollars ($110,000.00)to Lessors according to their respective interests.
(b) The second payment in the amount of two hundred and twenty five
thousand dollars ($225,000.00) shall be made,by July 31, 2004, said payment shall be allocated
as follows: seventy-five thousand dollars ($75,000,.00) to Keith A. Shibou Accounting; ten
thousand dollars ($10,000.00)to Sheppard, Mullin, Richter &Hampton LLP; and one hundred
forty thousand dollars ($140,000.00) to the Lessors in accordance with their respective
interests; and,
(c) The third and final payment in the amount of one hundred thousand
dollars ($100,000.00) shall be made by July 31, 2005, and shall be paid to Lessors in
accordance with their respective interests.
3. The BIA and LESSORS hereby approve the plans and specifications submitted
by the CITY to the BIA for the Palm Springs Convention Center Expansion Project—Phase II.
4. The BIA and LESSORS hereby consent to the removal and/or demolition of
improvements and/or buildings on the LEASED PREMISES proposed to be undertaken as part
of the Palm Springs Convention Center Expansion Project — Phase II and agree that the
proposed removal and demolition of improvements and/or buildings as part of the Palm
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Springs Convention Center Project — Phase It does not exceed ten percent (10%) of the value
of all improvements on the LEASED PREMISES.
5. The BIA and LESSORS hereby agree that all environmental assessments,
environmental impact statements or reports, or negative declarations that were filed with State
or local governmental authorities for consideration and copies of all governmental rulings on
such documents for the Palm Springs Convention Center Expansion Project - Phase II have
been provided to the BIA and the BIA consents thereto.
6. 'Concurrent with execution of this Agreement, the BIA shall execute the
"Approval of Supplemental Lease Agreement No. 4 and Third Amended Assignment
Agreement"which is attached hereto as Exhibit "G".
7. The PARTIES agree that pursuant to Article 42 of the LEASE, relating to the
exercise of any action by the majority of lessors of the LEASE constitutes the action of all of
the lessors of the LEASE for items relating to the LEASE and for purposes of settling the
DISPUTE and any and all claims related to alleged breaches of the LEASE.
8. LESSORS hereby affirmatively represent that the interests of each LESSOR in
the LEASE, as set forth in Exhibit "H," is true, accurate and correct. LESSORS affirmatively
represent that the lessors with a minority interest in the LEASE are bound by the entry into this
Agreement and the First Amendment by LESSORS and LESSEES. The LESSORS entering
into this Agreement shall indemnify and defend and hold the LESSEES and their elective and
appointive boards, commissions, officers, agents, attorneys, representatives, and employees,
harmless from any and all liability, loss, expense, damage, or claims which may arise directly
or indirectly from or in connection with the DISPUTE, the SETTLEMENT PAYMENT and/or
the division thereof, any action required to be'taken by this Agreement, any allegation that the
representations made in this paragraph are false, and/or any challenge to the validity or legal
effect of this Agreement and/or the First Amendment, whether or not there is concurrent
passive negligence on the part of the LESSEES or their elective and appointive boards,
commissions, officers, agents, attorneys, representatives, and employees. If any person or
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entity successfully challenges the validity of this Agreement and/or the First Amendment or
any provision of said agreements, the LESSORS shall immediately repay to the CITY any
portion of the SETTLEMENT AMOUNT paid pursuant to this Agreement and any portion of
the guaranteed minimum annual rental payment paid pursuant to the First Amendment which
exceeds the amount that would have been payable under the LEASE prior to this Agreement.
9. Each party hereto acknowledges and agrees that this is a compromise settlement
of the hereinabove mentioned DISPUTE,which is not in any respect to be deemed, construed
or treated as an admission or a concession of any liability whatsoever by any party hereto,
including any public entity, person, firm, partnership, or corporation for any purpose
whatsoever.
10. The PARTIES agree that they have made such investigation of the facts
pertaining to this Agreement and all matters,pertaining I hereto as it has determined necessary.
This Agreement is intended to be final and binding among the PARTIES hereto, regardless of
any claims or misrepresentations, promises made without the intention of performing them,
mistakes of fact or law, or any other circumstances whatsoever, and under no circumstances
shall any party be entitled to set aside this Agreement, either in whole or in part. Except as
provide herein, in entering into this Agreement,, each party assumes the risk of any
misrepresentation, concealment or mistake,' whether or not any party should subsequently
discover or assert for any reason that any fact relied upon by such a party in entering into these
releases was untrue, or that any fact was concealed from any party hereto, or that such party's
understanding of the facts or of the law was incorrect or,incomplete.
11. LESSORS, for themselves and all of their predecessors, successors, assigns,
representatives, attorneys, agents, and lessors to the LEASE who have not executed this
Agreement, do hereby fully and forever release and discharge LESSEES and all of their
predecessors, successors, assigns, representatives, attorneys, agents, and employees of and
from any and all actions, claims, demands, rights, damages, costs, expenses, attorneys' fees,
expert fees, accountant fees, audit fees, consultant fees, other fees, interest, and compensationr�
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of any nature whatsoever, which LESSORS have or'may hereafter accrue, including without
limitation, any and all known and unknown, foreseen and unforeseen claims, damage and
injury, relating to, or in any way, directly or indirectly, involving or arising out of any facts or
circumstances related to the DISPUTE, and/or breach of the LEASE prior to the EFFECTIVE
DATE.
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12. Except as expressly provided herein, LESSEES, for themselves and all of their
predecessors, successors, assigns, representatives, attorneys or agents, do hereby fully and
forever release and discharge LESSORS and all of their predecessors, successors, assigns,
representatives, attorneys or agents of and from any and all actions, claims, demands, rights,
damages, costs, expenses, attorneys fees, expert fees, consultant fees, other fees, interest, and
compensation of any nature whatsoever, which LESSEES have or may hereafter accrue,
including without limitation, any and all known and unknown, foreseen and unforeseen claims,
damage and injury, relating to, or in any way, directly or indirectly, involving or arising out of
any facts or circumstances related to the DISPUTE.
13. It is the intention and understanding of the PARTIES hereto, in executing this
instrument, that it shall be effective as a full and final accord and satisfaction and compromise
and release, of each and every settled or released matter. In furtherance of this intention, the
PARTIES acknowledge that they are familiar with Section 1542 of the Civil Code of the State
of California which provides as follows:
"A general release does not extend to claims which the creditor
does not know or suspects to exist in his favor at the time of
executing the release, which, if known by him, must have
materially affected his settlement with the debtor."
Except as provided herein, the PARTIES hereby expressly waive or relinquish any right
or benefit which they have, or might have, under Section 1542 of the Civil Code of the State of
California and all other similar provisions of law of other jurisdictions to the fullest extent
allowed by law. In connection with such compromise, waiver and relinquishment, the
PARTIES acknowledge that they are aware that they may hereafter discover facts in addition
to or different from those which they now know or believe to be true with respect to the subject
matter of this instrument, but that, except as,is expressly provided herein, it is their intention
hereby to fully, finally and forever settle and release all matters, disputes and differences,
known or unknown, suspected or unsuspected, which do now exist, may exist, or heretofore
have existed, and that in furtherance of such intention, the release actually given herein shall be
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and remain in effect as a full and complete general release, notwithstanding the discovery or
existence of any such additional or different facts.
Richard Milanovich - 8.654% James Saubel Estate - 8.735 %
Marcus Pete III - 8.118 % Patricia Schoolcraft-Patencio - 1.553 %
Dana Prieto - 4.644 % Corinne Siva - 4.644 %
Virginia Milanovich - 8.615 %_ Nancy Bow Soza - 14.604% _
Ray Patencio - 1.553 %_ Leonard Bow - 8.104 %
Christine Luker - 12.165 %^ Clarice Bow Dalley -12.399%
Beverly Diaz - 1.553 %_ Pricilla Gonzales - 1.553 %
J. Patrick Patencio - 1.553 % Winifred Preckwinkle - 1.553
14. In regards to this agreement,,'LESSORS waive their sovereign immunity with
respect to this Agreement and the transactions contemplate by this Agreement and hereby
waive their sovereign immunity from unconsented to suit by LESSEES or any governmental
entity thereof.
OTHER TERMS AND PROVISIONS:
1. Governing Law. This Agreement, shall be governed and interpreted in
accordance with applicable federal and state law subject to any applicable arbitration provision
in the Lease. The PARTIES expressly agree that any disputes,, disagreements or actions shall
be venued with-the Federal Court in the County of Riverside, State of California. The
PARTIES stipulate that they are subject to the jurisdiction of the County of Riverside Federal
Court and hereby expressly waive any defense to assertion of jurisdiction by that court in such
an action, subject to any arbitration provisions.
2. Integrated Agreement. This Agreement contains the entire understanding and
agreement between the PARTIES, and the terms and,conditions contained herein shall inure to
the benefit of, and be binding upon, the heirs, representatives, successors and assigns of each of
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the PARTIES hereto. No other representations, covenants, undertakings, or other prior or
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contemporaneous agreements, oral or written, respecting such matters, which are not
specifically incorporated herein, shall be deemed in any way to exist or bind any of the
PARTIES hereto. The PARTIES hereto acknowledge that this Agreement has been executed
without reliance upon any such promise, representation, or warranty not contained herein.
3. Modification. No supplement, modification or amendment of this Agreement
shall be binding unless executed in writing by the PARTIES. No waiver of any of the
provisions of this Agreement shall be deemed to constitute a waiver of any other provision
whether or not similar, nor shall waiver constitute a continuing waiver. No waiver shall be
binding unless executed in writing by the party making the waiver.
4. Binding on Successors. This Agreement and the covenants and conditions
contained herein shall obligate, bind, extend to and inure to the benefit of the PARTIES in each
of their respective successors in interest, including, but not limited to, their administrators,
executors, owners, partners, officers, directors, shareholders, legal representatives, assignees,
attorneys, successors, and agents or employees of the PARTIES hereto.
5. Representation of LESSORS. LESSORS affirmatively represent that Lessors
representing a majority interest under the Lease have retained, pursuant to Article 43 of the
Lease, Sheppard, Mullen, Richter & Hampton LLP, of San Diego, California, who are
attorneys at law of LESSORS' own choosing. LESSORS have read this Agreement and have
had the terms used herein and the consequences thereof explained by their above-named
attorneys of choice.
6. Representation of BIA. The BIA has read this Agreement and has been
represented by the Office of the Solicitor General, Department of Interior, Palm Springs,
California, its attorneys of choice. The BIA has read this Agreement and has had the terms
used herein and the consequences thereof explained by its above-named attorneys of choice.
7. Representation of LESSEES. LESSEES have read this Agreement and have
had the terms used herein and the consequences thereof explained by Aleshire & Wynder,
LLP, of Irvine, California, their attorneys of choice. LESSEES have read this Agreement and
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have had the terms used herein and the consequences thereof explained by their above-named
attorneys of choice.
8. Construction. This Agreement shall not be construed against the party
preparing it, but shall be construed as if all PARTIES jointly prepared this Agreement. Any
uncertainty and ambiguity shall not be interpreted against any one party. This Agreement is to
be performed in California and it is to be interpreted, enforced, and governed by and under the
laws of the State of California. Language in all parts of the Agreement shall be in all cases
construed as a whole according to its very meaning.
9. Fees and Costs. All attorneys' fees, accounting fees, audit fees, expert fees,
and costs incurred through the date of this Agreement shall be borne by the respective
PARTIES and each party agrees to waive any claim; or claims, against any of the other
PARTIES for the reimbursement of all, or any portion of said fees or costs. Should suit be
brought to enforce or interpret any part of this Agreement, the prevailing party shall not be
entitled to recover attorneys' fees.
10. Gender Neutral. Whenever in this (Agreement the context may so require, the
masculine, feminine and neutral genders shall be each, deemed to include the other and the
singular and the plural shall refer to one another.
11. Counterparts. This Agreement may be executed in duplicate counterparts,
each of which shall be deemed an original'and all of which shall constitute an agreement to be
effective as of the date of signing. Further, ;signatures transmitted and memorialized by
facsimile shall be deemed to have the same weight and effect as an original signature. The
PARTIES may agree that an original signature will be substituted at some later time for any
facsimile signature.
12. Captions and Interpretation's.) The paragraph titles and captions are inserted
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in this Agreement as a matter of convenience. As such, the paragraph titles or captions are not
intended to define or describe the scope of any provision.
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13. Invalid Clause May Be Severed. If any provision, clause, or part of the
Agreement is adjudged illegal, invalid or unenforceable, the balance of this Agreement shall
remain in full force and effect.
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[SIGNATURES ON FOLLOWING PAGES]
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I have carefully read and fully understand, and hereby execute, this Agreement.
"LESSORS"
Dated:
Richard Milanovich, 8.654% interest in Business
Lease- 315
Dated:
James Saubel Estate, 8.735%interest in Business
Lease- 315
Dated:
Marcus Pete III, 8.118 % interest in Business
Lease - 315
Dated:
Patricia Schoolcraft-Patencio, 1.553% interest in
Business Lease - 315
Dated:
Dana Prieto, 4.644%interest in Business Lease -
315
Dated:
Corinne Siva, 4.644% interest in Business Lease-
315
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
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Dated:
Virginia Milanovich, 8.615%interest in Business
Lease - 315
Dated:
Nancy Bow Soza, 14.604% interest in Business
Lease- 315
Dated:
Ray Patencio, 1.553% interest in Business Lease—
315
Dated:
Leonard Bow, 8.104% interest in Business Lease
—315
Dated:
Christine Luker, 12.165% interest in Business
Lease—315
Dated:
Clarice Bow Dalley, 12.399% interest in Business
Lease—315
Dated:
Beverly Diaz, 1.553% interest in Business Lease—
315 /A
[SIGNATURES CONTINUED ON FOLLOWING PAGES]
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Dated:
Pricilla Gonzales, 1.553% interest in Business
Lease—315
Dated:
J. Patrick Patencio, 1.553%interest in Business
Lease—315
Dated:
Winifred Preckwinkle, 1.553% interest in
Business Lease—315
APPROVED AS TO FORM:
SHEPPARD, MULLIN, RICHTER&HAMPT'ON, LLP
By:
RICHARD M. FREEMAN, ESQ.
Attorneys for [Note: Need to List Names]
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[SIGNATURES CONTINUED ON FOLLOWING PAGES]
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I have carefully read and fully understand, and hereby execute, this Agreement.
"LESSEES"
THE CITY OF PALM SPRINGS,
a Charter City
By: DAVID H. READY,
City Manager, City of Palm Springs
THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS,
a Public Body Corporate and Politic
By: DAVID H. READY,
Chairman of the Community Redevelopment
Agency of the City of Palm Springs
ATTEST:
By:
TRISHA SANDERS
City Clerk of the City of Palm Springs&
Secretary of the Community Redevelopment
Agency of the City of Palm Springs
APPROVED AS TO FORM:
ALESHIRE&WYNDER, LLC
By:
DAVID ALESHIRE
City Attorney of the City of Palm Springs &
the Community Redevelopment
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Agency of the City of Palm Springs
I have carefully read and fully understand, and hereby execute, this Agreement.
"BIA" BUREAU OF INDIAN AFFAIRS
By:
Its: Director of Palm Springs Field Office
Bureau of Indian Affairs
APPROVED AS TO FORM:
By:
Robert McCarthy, Attorney for Bureau
of Indian Affairs
[END OF SIGNATURES]
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LIST OF EXHIBITS
EXIIIBIT A..........................Palm Springs Lease 315
EXHIBIT B ..........................Sublease between SENCA and Community
Redevelopment Agency of the City of Palm Springs
EXHIBIT C..........................Sublease between SENCA and the City of Palm
Springs
EXHIBIT D..........................Correspondence from Keith A. Shibou dated March
19, 2003
EXHIBIT E ..........................Correspondence from Keith A. Shibou dated
December 3, 2003
EXHIBIT F...........................First Amendment to Business Lease 315
EXHIBIT G..........................Approval of Supplemental Lease Agreement No. 4
and Third Amended Assignment Agreement
EXHIBIT H..........................Designation of Lessors'Percent Interest
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EXHIBIT G
UNITED STATES
DEPARTMENT FO THE INTERIOR
BUREAU OF INDIAN AFFAIRS
APPROVAL OF SUPPLEMENTAL LEASE AGREEMENT NO. 4
AND THIRD AMENDED ASSIGNMENT AGREEMENT
The Secretary of Interior (the "Secretary"), pursuant to Business Lease 315 and any
addenda thereto ("Business Lease 315"), hereby approves of the execution and delivery of(a)
Supplemental Lease Agreement No. 4, by and between the Authority and the City of Palm
Springs and (b) the Third Amended Assignment Agreement, between the Authority and BNY
Western Trust Company, as trustee, in connection with issuance by the City of Palm Springs
Financing Authority (the "Authority") of its Lease Revenue Bonds, 2004 Series A (Convention
Center Expansion Project) (the "Bonds"). The Bonds are being issued to refund certain
outstanding bonds of the Authority and to expand the convention center facilities for the City of
Palm Springs, which convention center is located on certain Indian lands.
All conditions precedent to approval;by the Secretary of the above-referenced agreements
pursuant to Business Lease 315 have been met or are hereby waived.
In witness whereof the undersigned has executed this written approval as of
2004.
i
Director
Palm Springs Field Office
Bureau of Indian Affairs
Pursuant'to the authority delegated by 209 DM 1. an
3 IAM 4 and Sacramento Redelegation Order No. 1
(43 F,R, 3 013 1, dated July 13, 1978).
I,
DRAFT
EXHIBIT H
LESSORS: PERCENTAGE:
Richard Milanovich 8.654
James Saubel Estate 8.735
Marcus Pete III 8.118
Patricia Schoolcraft-Patencio 1.553
Dana Prieto 4.644
Corinne Siva 4.644
Virginia Milanovich 8.615
Nancy Bow Soza 14.604
Ray Patencio 1.553
Leonard Bow 8.104
Christine Luker 12.165
Clarice Bow Dailey 12.399
Beverly Diaz 1.553
Priscilla Gonzales 1.553
J. Patrick Patencio 1.553
Winfred Preckwinkle 1.553
Total 100
FIRST AMENDMENT TO BUSINESS LEASE-315
Agua Caliente (Palm Springs)Reservation
Dated April 2004
��� �3
FIRST AMENDMENT TO BUSINESS LEASE-315
Agua Caliente (Palm Springs)Reservation
THIS FIRST AMENDMENT TO BUSINESS LEASE-315 ("First Amendment"), made
and entered into as of April 1 2004, by and between the parties identified below as
"LESSOR" and "LESSEE" and amends and supplements that certain BUSINESS LEASE-315,
dated February 28, 1984 (the"Original Lease")by and between LESSOR and LESSEE:
LESSOR: Leonard Charles Bow Ray Leonard Patencio
Joseph Patrick Patencio Ruth Elaine Patencio
Beverly Patencio Diaz Thomas I. Siva
Corinne Welmas Siva Priscilla Patencio Gonzales
Clarice Bow Mathews Nancy Marie Bow Soza
James Steve Sauble Germaine Pico Arenas
Christine Shores Luker Marcus Joseph Pete, III
Virginia Ann Milanovich Winifred Patencio Preckwinkle
Richard Michael Milanovich
LESSEE: City of Palm Springs, a mumbipal corporation, an approved assignee of
SENCA Palm Springs, Inc., a California corporation, an approved
assignee of Shale Energy Corporation of America, a Texas corporation
under the provisions of the Act of August 9, 1955, 69 Stat 539, as amended 25 U.S. C. 415 and
as supplemented by Part 131 - Leasing and Permitting, of the Code of Federal Regulations, Title
25 - INDIANS, and any amendments thereto relative to Business leases on restricted Indian
lands, all of which by reference are made a part hereof(the"Act").
RECITALS
WHEREAS, on February 28, 1984, Lessor and Lessee entered into the Original Lease
whereby Lessor leased to Lessee the lands and improvements thereon described and identified by
original allottee number and name in Addendum 1 hereto, such lands being a part of the Agua
Caliente (Palm Springs) Reservation situated in Riverside County, California (the "Master
leasehold Estate"); and
WHEREAS, on December 31, 1984, Lessee subleased a portion of the Master leasehold
Estate (the "Wyndham Property") to the Community Redevelopment Agency of Palm Springs
pursuant to the Wyndham Hotel Sublease (the"Wyndham Hotel Sublease"); and
WHEREAS, on December 31, 1984, Lessee subleased a portion of the Master leasehold
Estate ("Convention Center Property") to the City of Palm Springs Public Facilities Corporation
pursuant to the Convention Center Sublease (the"Convention Center Sublease"); and
WHEREAS, pursuant to an Agreement of Assignment, dated September 29, 1989, City
assumed all of the obligations of SENCA Palm Springs Inc. under the Original Lease, the
Wyndam Hotel Sublease and the Convention Center Sublease; and
WHEREAS, the City of Pahn Springs ("City") has constructed and operates a convention
center on the Convention Center Property and has caused the construction of a hotel on the
Wyndham Property; and
WHEREAS, City has requested that Lessor, Lessee and the Secretary of the Interior of
the United States of America ("Secretary") amend the Original Lease to clarify and modify
certain provisions of the Original Lease; and
WHEREAS, Lessor, Lessee and Secretary have agreed to such modifications and
clarifications; and
WHEREAS, pursuant to Article 41 of the Original Lease, this First Amendment will
become valid upon execution by the parties hereto and approval of the Secretary.
In consideration of the mutual covenants hereinafter contained and for other valuable
consideration, the parties hereto do hereby agree as follows:
WITNESSETH
Section 1. Authority. This First Amendment is entered into pursuant to Article 41 of
the Original Lease and pursuant to the Act.
Section 2. Related Agreements. The parties hereto acknowledge the existence and
validity of the following agreements and hereby approve of, and consent to, the modifications
pursuant to this First Amendment being included in, the agreements, by reference therein,
pursuant to the terms of:
(a) the Wyndham Hotel Sublease; and
(b) the Convention Center Sublease.
Section 3. Definitions in General. The terms contained herein and not defined herein
have the meanings ascribed to them in the Original Lease;
Section 4. Addenda to First Amendment: Addenda 1 and 2 attached hereto are by
this reference incorporated in this First Amendment and made a part hereof.
Section 5. Amendment to Article 3 of Original Lease. Article 3 of the Original Lease
is hereby deleted in its entirety and replaced as set forth below:
ARTICLE,3
DEFINITIONS
A. The term "adversely affect Lessor's potential interest in the lease"
shall mean that the demolition or removal of an improvement or structure will
result in the permanent reduction of the gross floor area of all improvements and
structures by more than ten percent (10%). The term "permanent" as used in this
definition shall mean that the gross floor area of all improvements and structures
to be replaced is not replaced within two (2) years of the date that the
improvements and structures were actually removed.
B. The term "approved encumbrance" herein shall mean an
encumbrance and any addition or extension thereto approved by the Secretary.
"Encumbrancer" shall mean the owner and holder of an approved encumbrance.
C. The terms "guaranteed annual rental" or "GAR" shall have the
meaning assigned thereto in Article 6 of this lease.
D. The term "leased premises" shall mean the property described in
Article 2 to this lease.
E. The term "Secretary" means Secretary of the Interior or his
authorized representative.
Section 6. Amendment to Article 6 of lease Agreement. Article 6 of the Original
Lease is hereby deleted in its entirety and replaced as set forth below:
ARTICLE 6
RENTALS
A. The Lessee, in consideration of the foregoing, agrees to pay in
lawful money of the United States of America the guaranteed annual rental as
hereafter defined.
B. The tern"guaranteed annual rental" or"GAR" shall mean:
(1) With respect to the years prior to the end of the calendar
year 2004, eight percent (8%) times the greater of either:
(a) Six dollars ($6.00) per square foot times forty-three
thousand, five hundred and sixty (43,560) square feet times the
total net acreage of the leased premises as determined by the
Secretary; or
(b) The fair market value of the leased premises (as
determined by an appraisal of the leased premises taken as whole
and conducted during calendar year 1984) less cumulative
payments, including amounts held in trust by the courts with
respect to a condemnation of existing leases encumbering the
leased premises made prior to the due date of the GAR by Lessee
to third parties or to Lessor with'respect to the termination of said
existing leases; and
(2) With respect to the calendar years 2005 to the end of the
calendar year 2009, $1,200,000; and
(3) With respect to the calendar year 2010 and every five (5)
calendar years thereafter, the GAR for 'the prior calendar year plus the
Adjustment Factor as described in Section C below (such that the GAR
shall readjust every five (5) years, as of December 31 of such fifth (5111)
year, after remaining constant for five years):
C. The "Adjustment Factor" shall, mean that the GAR shall be
adjusted upward at the end of each five (5) year period (unless adjusted in
accordance with Section D below), beginning in 2010 and thereafter by the same
percentage as the cost of living index has increased during the prior (5) year
period, provided that in no event shall the percentage increase on the GAR exceed
thirty percent (30%) for any such five (5) year period (i.e. over the GAR for the
previous five (5) years). The cost of living index to be used is that reflected by
the Revised Consumer Price Index for All�Urban Consumers, all items, Los
Angeles-Riverside-Orange Co., California (1982-84=100), published by the
Bureau of Labor Statistics of the U.S. Department of Labor. If, for any reason
whatsoever, there is any change in the method of calculation or formulation of
said price index, or if that index shall no longer be published, then another index
generally recognized as authoritative shall be substituted by agreement of the
parties or if approved by the Secretary. In any,event, the base used by any new
index shall be reconciled to the 1967 Index. ,It is agreed for the purposes of this
lease that the base index shall be that of the month and year this lease commences
and shall be incorporated herein as Exhibit"A".
D. Notwithstanding Section C hereof, every ten (10) calendar years,
beginning in calendar year 2015 and every ten (10) years following 2015, the
GAR shall be brought to current market value as follows:
(1) An appraisal,of the current value of the land (not including
improvements) will be performed and completed by the Bureau of Indian
Affairs, Palm Springs Regional Office (`BIA") at least six (6) months
prior to the time that the GAR is to be;adjusted in accordance with this
section. The date of value will be January 1 of the year proceeding the
year that the GAR is to be recalculated (`Valuation Date") (i.e. for the
calendar year 2015 the parties agree that the valuation date used for the
appraisal will be January 1, 2014). The Lessors and Lessee will each pay
one-half(1/2) of the cost of the BIA'appraisal. Within thirty (30) days of
the completion of the appraisal by the BIA, the parties shall notify each
other in writing whether they agree with the BIA's appraisal. If all parties
agree with the BIA's appraisal then the GAR will be set at 8% of the total
appraised value of the land (not including improvements) during the initial
term of the lease. The GAR,will be,set,at ten percent (10%) of the total
appraised value of the land during any extended period of the lease if the
lease is extended for 25 years as provided for in Article 4 of this lease.
(2) If either party disagrees,with any appraisal performed by
the BIA, then both parties shall hire,their own California MAI licensed
P) AL
appraiser to value the land (not including improvements) as of the
Valuation Date. The independent appraisals by both the Lessors and
Lessee shall be completed at least two,(2) months prior to the time that the
GAR is to be adjusted in accordance with this section and shall be
mutually exchanged at the same time. 1,Lessors and Lessee shall each bear
their own cost of any appraisal performed pursuant to this section. The
parties agree that the appraised value of the land (not including
improvements) shall be determined by taking the average value of the two
(2) appraisals that have the least numerical difference (i.e. if the BIA's
appraiser values the land at'$102, the Lessee's appraiser values the land at
$95 and the Lessor's appraiser values the land at $106, the value of the
land would be determined by adding the amount of$102 plus $106 for a
total of$208 and divide by 2, for a total; assessed value of$104). In the
event that the numerical difference between the appraisals is the same, the
assessed value of the land will be determined by averaging the three (3)
appraisals together. The GAR will then be set at 8% of the total appraised
value of the land (not including improvements) as determined by this
section during the initial term of the lease. The GAR will be set at 10% of
the total appraised value of the land,;during any extended period of the
lease if the lease is extended for 25 years as provided for in Article 4 of
this lease.
Section 7. Amendment to Article 7 of Original Lease. The first and second
paragraphs of Article 7 of the Original Lease are hereby deleted and replaced with the following
language:
Guaranteed annual rental shall be paid in advance to the Bureau of Indian
Affairs for the account of Lessor on or before each anniversary date of this lease
unless and until Lessee is notified in writing by the Secretary to do otherwise.
At any time after approval of this lease the parties may agree to have
rental payments made at other specific intervals during the lease year but
payments may not be made on less than a one-month interval. Upon receiving
written notice from the Secretary, Lessee shall make rent payment accordingly,
commencing with the next rental due date.
s :
Section 8. Amendment to Article 8 of the Original Lease. Article 8 of the Original
Lease is hereby deleted in its entirety and replaced as set forth below:
ARTICL) 8
PLANS AND DESIGNS
Lessee shall be required to obtain approval of comprehensive plans and
specifications for proposed improvements from the Secretary prior to beginning
construction or demolition on any improvements if the planned construction or
demolition will adversely affect the Lessor's potential interest in the lease. Such
approval shall be obtained in accordance with Article 44 of this lease. Lessee is
'� `�►41 S�?
y
responsible for obtaining licenses and permits required or necessary for the
construction of any structure or improvements on the leased premises or for
performance of any work required hereunder.
Section 9. Amendment to Article 9 of the Original Lease. Article 9 of the Original
Lease is hereby deleted in its entirety.
Section 10. Amendment to Article 12 of the Original Lease. The second paragraph of
Article 12 of the Original Lease is hereby deleted in its entirety and replaced with the paragraph
set forth below:
Lessee shall pay all premiums and other charges for such insurance and
shall deposit with the Secretary evidence, acceptable to the Secretary, that said
premiums or other charges have been paid. Lessee hereby agrees that damage to
or destruction of any building or improvement on the leased premises at any time
by fire or any other casualty whatsoever shall not cause termination of this lease
or authorize the Lessee or those claiming by, through, or under it to quit or
surrender possession of said lands or any part thereof, and shall not release the
Lessee in any way from its liability to pay Lessor the rents hereinabove provided
for or from any other agreements„covenants, or conditions of this lease. In the
event of damage to any improvements on the leased premises, the Lessee shall
reconstruct the improvement in compliance with applicable laws and building
regulations and in accordance with Article 8 PLANS AND DESIGNS, hereof.
As provided in Article 8 hereof, such plans and specifications shall require
approval of the Secretary if they adversely, affect the Lessor's potential interest in
the lease. Such reconstruction shall commence within two (2) years after the
damage occurs and shall be pursued diligently. Insurance proceeds shall be
deposited in escrow with an institution approved by the Secretary.
Section 11. Amendment to Article 114 of the Original Lease. Article 13 of the Original
Lease is hereby amended to add the following language thereto:
To the fullest extent permitted by law:Lessee shall indemnify Lessor, hold
Lessor harmless from, and defend Lessor against any and all claims, losses, costs,
damages, expenses, or liabilities, including', without limitation reasonable
attorneys' fees and costs of defense, for any,injury or damage to any person or
property whatsoever, regardless of the:cause, of such injury or damage, including,
but not limited to any neglect,; fault, or omission of Lessor, or any of them,
whether,arising before, on or after the date of this lease; provided, however, that
the obligations under this indemnity with respect to any act, neglect, fault or
omission of Lessor shall not include the willful 'misconduct of the Lessor, or any
of them, The foregoing indemnity obligations of Lessee shall not require
payment by Lessor as a condition precedent to recovery from Lessee. In addition,
if any person not a party to this lease shall institute any other type of action
against Lessee for which Lessor is to be held`harmless by Lessee pursuant to this
lease, and in which Lessor, involuntarily and without cause, shall be made a party
defendant, Lessee shall indemnify Lessor, hold Lessor harmless from, and defend
Lessor against all liabilities by reason thereof. The obligation under this
indemnity shall not extend to any liability in�'connection with any environmental
protection requirements, it being !understood that Lessee's environmental
indemnity obligations under this lease shall be as set forth in the fourth
unnumbered paragraph of Article 47 hereof.
Section 12. Amendment to Article'14 of the Original Lease. Article 14 of the Original
Lease is hereby deleted in its entirety.
Section 13. Amendment to Article 16 of the Original Lease. Article 16 of the Original
Lease is hereby deleted in its entirety and replaced with the following language:
ARTICLE 16
CONSTRUCTION, MAINTENANCE, REPAIR, ALTERATION
All improvements placed on the leased premises shall be constructed in a
good and workmanlike manner and in compliance with applicable laws and
building codes. All parts of buildings exposed to perimeter properties shall
present a pleasant appearance and all, service'areas shall be screened from public
view. Subject to Articles 6 and 10, Lessee shalb have the right at any time during
the term of this lease to make alterations, additions, or repairs to any improvement
on the leased premises. The Lessee shall, at all times during the terms of this
lease and at the Lessee's sole cost, and expense, maintain the premises and all
improvements thereon in good order and -repair and in a neat, sanitary and
attractive condition and in compliance with .applicable laws, ordinances, or
regulations.
Section 14. Amendment to Article 17 of the Original Lease. Article 17 of the Original
Lease is hereby deleted in its entirety.
Section 15. Amendment to Article 18 of the Original Lease. Article 18 of the Original
Lease is hereby amended by adding the following language as a final paragraph:
Notwithstanding anything in this Article 18 to the contrary, the provisions
of Section A of this Article 18 may be satisfied by performance or payment bonds
from the designated contractor or subcontractor with respect to the construction of
such improvement executed in favor of Lessor and Lessee as claimants in the
amount of the cost of each building or other improvement. Said bond(s) shall be
deposited with the Secretary pursuant to Section A hereof. Said bond(s) shall be
conditioned upon the faithful performance of the contractor and give all claimants
the right of action to recover upon said bond(s) in any suit brought to foreclose
mechanics' liens or materialmen's liens against the leased premises.
�3V
1
Section 16. Amendment to Article 20 of the Original Lease. Article 20 of the Original
Lease is hereby deleted and replaced in its entirety to read as set forth below:
Article 20
AGREEMENTS, SUBLEASES & ASSIGNMENTS
A. The Lessee shall be required to obtain written permission from the
Secretary prior to entering into any agreement for the management of the leased
premises with any of the following: (1) an Indian tribe besides the Agua Caliente
Band of Cahuilla Indians; or (2) any person or entity that manages a casino or
gaming operation for an Indian tribe or for a member of an Indian tribe besides
the Agua Caliente Band of Cahuilla Indians within fifty (50) miles of the leased
premises. The Secretary shall approve or. deny any request to enter into a
sublease with the foregoing persons or entities in accordance with Article 44 of
this lease.
B. Except as provided in Section A of this Article, the Lessee shall
not be required to have any sublease or agreement approved by the Secretary
including, but not limited to, subleases and agreements related to the renting or
use of: (1) hotel and conference rooms; (2) commercial or office spaces; (3)
kitchens; (4) storage and supply areas; (5) board or care rooms; (6) exhibition
halls; (7) banquet rooms; (8) function rooms; (9) trailer or mobile home spaces;
(10) apartment units; (11) residential,lots; (I 2) parking lots, or any other services
whatsoever, but excluding any assignment of.Lessee's interest in this lease, which
shall require Secretary's approval.
Except as provided in Section A of this Article, the Lessee shall not be
required to have any sublease or agreement a proved by the Secretary for services
performed on the leased premises including, but;not limited to, the following: (1)
concessions; (2) catering; (3) food and,beverage; (4) parking; (5) audio-visual; (6)
electrical; (7) tents and equipment; (8) event-related services, or any other
services whatsoever.
Any sublease entered into shall be in writing and contain a provision that
in the event of conflict between the provisions;of this lease and of said sublease,
the provisions of this lease shall govern. No; sublease shall release the Lessee
from any obligation under this lease or substitute the sublessee for the Lessee
hereunder.
C. Where approval of subleases and',agreements is required in Section
A of this Article, the Lessee shall obtain the ,written approval of the Secretary
pursuant to the provisions of Article 44 of this lease, provided that the
requirements for approvals of any assignment or transfer necessary for Lessee or
any sublessee to secure an encumbrance on a leasehold interest shall be governed
by the provisions of Article 24, ENCUMBERANCE. No such assignment or
transfer shall be valid or binding without said approval, and then only upon the
condition that the assignee or other successor in interest, excepting an approved
encumbrance under conditions set,forth herein, shall agree in writing to be bound
by each and all covenants and conditions of'this lease. Any such assignment or
transfer, except as aforesaid, shall be deemed a breach of this lease, excepting that
an encumbrancer, as set forth herein, may, enforce his rights in the manner
hereinafter provided. No assignment of transfer; subletting, mortgaging, or other
encumbering of Tenant's interest in this lease,'Shall relieve Lessee of its obligation
to pay the rent and to perform all of the other obligations to be performed by
Lessee hereunder. The acceptance of rent by the Secretary from any person other
than Lessee shall not be deemed to be a waiver by the Secretary of any provision
of this lease or to be a consent to any subletting, assignment, mortgaging, or other
encumbering of the Premises. Consent to one assignment, subletting, mortgaging,
or other encumbering shall not be deemed to constitute consent to any subsequent
attempted subletting, assignment, mortgaging,,or'other encumbering.
If a proposal to assign this lease to a 'qualified assignee or other successor
in interest is submitted while a default in this, lease exists, the Secretary will not
be obligated to consider said proposal until the,lease is restored to good standing.
Section 17. Amendment to Article 30 of the Original Lease. Article 30 of the Original
Lease is hereby deleted in its entirety and replaced as set forth below:
ARTICLE 29
ARBITRATION
Whenever the terms of this lease require that a dispute be settled by
nonbinding arbitration, an Arbitration Board shall be established, consisting of
three members, one each to be selected by the Secretary and the Lessee, and such
members to select the third member. The costs of such Arbitration Board shall be
shared equally by the Lessee and the Lessoi. .The parties shall be expected to
accept decisions reached by said Arbitration Board, but they shall not be bound
thereby.
Section 18. Amendment to Article 30 of the Original Lease. Article 30 of the Original
Lease is hereby deleted in its entirety and replaced as set forth below:
ARTICLE 30
DEFAULT
A. Time is of the essence in this lease.
B. In the event of an alleged default by either party in the
performance of any of the covenants or conditions of this lease, the non-
defaulting party shall give written notice (the "Initial Notice") citing the alleged
defaults in the lease and allowing the defaulting party to be given the opportunity
to cure such alleged default. Except in the;event of a "Monetary Default" (as
hereinafter defined), the defaulting party shad be given sixty days (60) plus any
N 194z ,
1
extension period that may be granted as hereinafter provided (the "Cure Period")
from receipt of the Initial Notice to cure the alleged default. For any default other
than a Monetary Default, the non-defaulting party or the Secretary may grant, in
its sole and absolute discretion, an extension of time beyond said sixty (60) days
if requested by the defaulting party and if the defaulting party is acting in good
faith and diligently to cure said default. Upon failure of the defaulting party to
cure such default within the Cure Period" the non-defaulting party or the
Secretary, shall give written notice to'the defaulting party citing the defaults (such
notice following the Cure Period to be called the"Default Notice").
C. Within ten (10) business days of receipt of the Default Notice, the
defaulting party must do any one or more of the following:
(1) cure the default; i
(2) dispute the Secretary's or non-defaulting party's
determination that a default has occurred and/or explain
why the lease should not be cancelled; or
(3) Request additional time to cure the violation pursuant to a
written request.
If Lessee cures the violation pursuant to'.subsection(1) of this Section C,
no further action under this Article 30 shall be taken.
If Lessee disputes the violation(pursuant to subsection (2) of this Section
C) or requests additional time to cure (pursuant to subsection (3) of this Section
C), the non-defaulting party or the Secretary may, in its sole and absolute
discretion, grant an additional Cure Period or may proceed with the remedies
provided herein.
D. Except for any Monetary Default or any other material default, in
the event a default is not cured within the Cure Period, the non-defaulting party
may request that the dispute be resolved through non-binding arbitration in
accordance with Article 29 by giving a written notice of election of arbitration
(the "Notice of Arbitration"). In the event"the default is a material default, or
following any decision by the Arbitration Board, the non-defaulting party may
proceed as provided hereunder.
A "material default" shall include (i) the failure to pay any monies
or to post bond, as required by the terms of this lease, and if such default shall
continue uncured for the period of ten (16) days after the Initial Notice (a
"Monetary Default"); rop vided,;however that any Initial Notice shall be in lieu
of, and not in addition to, any notice otherwise required under applicable law; and
provided, further, that Lessee shall not be entitled to an Initial Notice for a
Monetary Default in the event more "than two (2) notices within any twelve (12)
month period have been given to Lessee because cif such failure; or (ii) the breach
of any other substantial covenant of this lease,;and if the breach shall continue
uncured for a period of sixty(60) days after the issuance of Initial Notice.
E. After compliance with the foregoing provisions, if the default is
still uncured, the non-defaulting parry or Secretary may proceed by suit or
otherwise to enforce collection or to 'enforce zany other material provision of this
lease. Lessee and Lessor hereby waive their sovereign immunity with respect to
the transactions contemplated by this lease and the agreements listed in Section 2
of the First Amendment. Lessor hereby waives its sovereign immunity from
unconsented suit by the City of Palm!Springs,or any governmental entity thereof.
Lessee hereby waives its sovereign immunity from unconsented suit by the
Secretary or Lessor. Lessee and Lessor hereby!consent to suit in a federal court
located in County of Riverside, California; with respect to the transactions
contemplated by this lease and the agreements' listed in Section 2 of this First
Amendment. Except in the case of any material default, as a pre-condition to any
such suit, Secretary and Lessee agree to first attempt an informal resolution or
arbitration of any such dispute as provided in Article 29.
F. After compliance with the foregoing provisions, if the default is
still uncured, the Secretary, on behalf of Lessors, may re-enter the premises and
remove all persons and property therefrom and'either:
(1) re-let the premises without terminating this lease, as the agent
and for the account of Lessee, but without prejudice to the right to
terminate the lease thereafter, and without invalidating any right of Lessor
and the Secretary or any obligation of Lessee hereunder. Terms and
conditions of such re-letting shall be at the discretion of the Secretary,
who shall have the right to alter and repair the leased premises as he
deems advisable, and to re-let with or without any equipment or fixtures
situated thereon. If a sufficient sum is not thus realized to liquidate the
total amount due, including attorney's fees and real estate commission
paid, Lessee shall pay to Lessor monthly, when due, any deficiency, and
the Secretary may sue thereafter each monthly deficiency shall arise; or
(2) terminate this lease at any time even though the Secretary has
exercised rights as outlined above, in which case the Lessee shall quit and
surrender the leased premises to Lessor but shall remain liable for any
obligations not discharged by such termination.
G. (i) Any action taken or suffered' by Lessee as a debtor under any
insolvency or bankruptcy act, a general assignment by Lessee for the benefit of
creditors, whether or not there exists any proceeding under an insolvency or
bankruptcy law; (ii) the filing by or against Lessee of any proceeding under an
insolvency or bankruptcy law, unless in the. case of a proceeding filed against
Lessee the same is dismissed within sixty (60) days; (iii) the appointment of a
trustee or receiver to take possession of the, lease or the leased premises as an
asset of Lessee, unless possession is restored to Lessee within thirty (30) days; or
(iv) any execution or other judicially authorized seizure of Lessee's assets located
upon the leased premises or of Lessee's interest in this lease, unless such seizure
is discharged within thirty (30) days, shall constitute a breach of this lease. In
such event the Secretary shall have the option&set forth above.
H. At least sixty (60) days prior to termination of this lease for
default, the Secretary shall give notice in writing to the encumbrancer, in the form
of a copy of the Default Notice expressing the intention to terminate and
describing said default or breach. When the default or breach can be cured by the
payment or expenditure of money, this lease will not be terminated if the
encumbrancer will promptly notify the Secretary of its intent to cure and, within,
thirty (30) days after receipt of said written notice to terminate, the encumbrancer
shall cure the default or breach; provided that such cure right shall be limited to
one time in any calendar year. Whenever the encumbrancer exercises any right
on a default situation, the encumbrancer shall be bound to comply with all of the
obligations and conditions of the lease. When the defaulted breach cannot be
cured by the payment or expenditure of money, this lease will not be terminated if
the encumbrancer shall promptly notify the Secretary of its intent to foreclose and
within the said thirty (30) day period initiate; and thereafter diligently pursue to
completion, proceedings for foreclosure and sale under and pursuant to the terms
of the encumbrance. However, during and; until the completion of such
foreclosure proceedings, the encumbrancer shall pay the rents due and payable by
the Lessee 'under this lease; shall maintain an insurance as required by this lease;
shall pay all taxes due and unpaid on the taxable"property covered by this lease;
shall begin the cure of any other default or;breach not curable by payment or
expenditure of money which can reasonably be:undertaken by the encumbrancer;
and shall diligently prosecute,the said cure of such default or breach until the
leasehold is either sold upon foreclosure pursuant to the terms of the encumbrance
or released or reconveyed thereunder.
In case a default or breach on the part of the Lessee occurs preceding,
during, or due to the bankruptcy, receivership, or insolvency of the Lessee, and
the encumbrancer, prior to the receipt of the notice of intent to terminate
described herein or within forty-five (45) daysi after the receipt there of, shall have
filed in the court having jurisdiction over such bankruptcy receivership or
insolvency a petition for permission to fore0os9t the filing of such petition shall
be deemed to be the beginning oflforeclosure;proceedings for the purposes of this
paragraph. The bankruptcy, receivership, ,,or insolvency of Lessee shall be
considered a breach which ca n not reasonably be cured by encumbrancer and one
not curable by the payment of money.
I. No waiver of a breach of any of the covenants of this lease shall be
construed to be a waiver of any succeeding. breach of the same or any other
covenant. Nothing in this lease shall prohibit .or prevent the Secretary from
pursuing on behalf of the Lessor any remedy they may have under law for the
breach of any covenant of this lease. ��a
J. Lessee hereby waives, for Lessee, its subtenants and
encumbrancers and for all those claiming under Lessee, any and all rights now or
hereafter existing to redeem by order or judgment of any court or by any legal
process or writ, Lessee's or such other'persons'!right of occupancy of the leased
premises after any termination of the lease. ,
Section 19. Amendment to Article 33 of the Original Lease. Article 33 of the Original
Lease is hereby deleted in its entirety and replaced as set forth below:
ARTICLE 33
NO PARTNERSHIP; OPERATION OF BUSINESS
Lessee and Lessor are not joint'ventures'or in partnership during the term
of this lease. Lessee is not and shall not .be deemed to be an agent or
representative of Lessor.
Section 20. Amendment to Article 44 of the Original Lease. Article 44 of the Original
Lease is hereby deleted in its entirety and replaced as set forth below:
ARTICLE 44
APPROVAL BY LESSOR AND/OR SECRETARY
Except as otherwise expressly provided herein, whenever under the terms
of this lease the acceptance, consent or approval of the Lessor and/or the
Secretary is required, said acceptance, consent or approval shall not be
unreasonably withheld. As long as Lessee is not in default under this lease,
Lessor and/or Secretary shall act promptly on any request submitted in writing by
Lessee for acceptance or approval, but no later than thirty (30) days following
such party's receipt of the written request from Lessee; provided that as long as
Lessee is not in default hereunder, if such written request is delivered to Lessor
and Lessor fails to approve or disapprove the requested action within such 30-day
period, such request shall be deemed,approved; and further provided that as long
as Lessee is not in default hereunder and such written request is delivered to
Secretary and Secretary fails to approve or disapprove the requested action within
such 30-day period, Lessee may immediately utilize such procedures as are set
forth in the Federal Code of Regulations to;obtain action by the Secretary with
respect to such request. Lessor and/or the Secretary may act in writing to
approve, conditionally approve or disapprove the Lessee's written request, and if
such request is subject to its reasonable approval or disapproval, shall provide its
reasons therefor. Lessor and/or Secretary may also extend the time for response
by timely giving written notice thereof. It is understood that whenever under the
terms of this lease the acceptance, consent or approval of the Secretary is
required, the Secretary is acting on behalf of Lessor.
Section 21. Amendment to Article 47 of the Original Lease. Article 48 of the Original
Lease is hereby to read in its entirety to read as set forth below:
It is agreed that it shall be the responsibility of Lessee to satisfy all
Federal, State and/or local environmental protection requirements.
It is further agreed that Lessee will furnish the Secretary a copy of
all environmental assessments," environmental impact statements or
reports, or negative declarations for consideration and that Lessee
will furnish the Secretary a copy of any governmental ruling on
any such documents filed with any"Federal, State and/or local
governmental authority. Without limiting the generality of the
foregoing but subject to the Secretary's acknowledgement set forth
below, Lessee covenants and agrees that Lessee, its employees,
agents and other third parties entering upon the leased premises at
the request or invitation of Lessee shall not bring into, maintain
upon or release or discharge in the Building any Hazardous
Materials (as hereinafter defined). The,foregoing covenant shall
not extend to substances typically found;, or used in general office
applications, so long as (a) such substances are maintained only in
such quantities as are reasonably necessary for Lessee's business
operations at the leased premises, (b) such substances are used
strictly in accordance with the manufacturers' instructions therefor,
(c) such substances are not disposed of in, on or about the leased
premises in a manner which would,constitute a release or discharge
thereof and (d) all such substances are ,removed from the leased
premises by Lessee upon the expiration or earlier termination of
this lease.
As used in this lease, the term "Hazardous Materials" means,
collectively, any petroleum, petroleum product or byproduct or any
substance, material or waste regulated 'or listed pursuant to any
Environmental Law, including, without; limitation, bio-hazardous
materials 'and substances and infectious waste. The term
"Environmental Law" means, collectively, any and all federal,
State, municipal and local laws, "statutes, ordinances, rules,
regulations, guidances, rpolicies,, orders, decrees, judgments,
whether statutory or common law,' as'amended from time to time,
now or hereafter in effect, or promulgated, pertaining to the
environment, public health and .safety and industrial hygiene,
including the use, generation,' manufacture, production, storage,
release, discharge, disposal, handling, treatment, removal,
decontamination, clean-up, transportation or regulation of any such
Hazardous Materials, including, but not,limited to, the Clean Air
Act, the Clean Water Act, the Toxic Substances Control Act, the
Comprehensive Environ mental Response Compensation and
Liability Act, the Resource Conservation and Recovery Act, the
Federal Insecticide, Fungicide, and Rodenticide Act, the Safe ��
Drinking Water Act and the Occupational Safety and Health Act,
as in force and effect at the time ofIthe applicable introduction,
storage, use or disposal by Lessee 'of the Hazardous Material
subject to regulation thereunder.
Upon any violation of the foregoing covenants, Lessee shall be
obligated, at Lessee's sole cost, to clean-up and remove from the
leased premises all Hazardous Materials introduced upon the
leased premises by Lessee or any third party for whom Lessee is
responsible. Such clean-up and removal shall include aft testing
and investigation required by the Secretary and any governmental
authorities having jurisdiction and preparation and implementation
of any remedial action plan required by the Secretary and any
governmental authorities having jurisdiction. All such clean-up
and removal activities of Lessee shall, in each instance, be
conducted to the reasonable satisfaction of the Secretary and all
governmental authorities having jurisdiction. The Secretary shall
have the right to enter and inspect the leased premises during
normal business hours for violations, of Lessee's covenants
contained herein.
Lessee shall indemnify, defend and hold harmless Lessor,
individually and collectively, and their employees, agents, lenders
and attorneys from and against any and all claims, liabilities,
losses, actions, costs and expenses (including attorneys' fees and
costs of defense) incurred by such indemnified persons, or any of
them, to the extent caused by any of the following: (A) the
introduction to the leased premises of any Hazardous Materials,
(B) the discharge or release of any Hazardous Materials on, about
or under the leased premises, (D) any injury to or death of persons
or damage to or destruction of property resulting from any release
of Hazardous Materials in or about the leased premises, and (E)
any failure of Lessee to observe the,foregoing covenants of this
Article 47. Payment shall not be a condition precedent to
enforcement of the foregoing indemnification provision.
Section 22. Amendment to Article 48 of Original Lease. Article 48 of the Original
Lease is hereby deleted in its entirety and replaced as set forth below:
ARTICLE 48
ARCHAEOLOGICAL, CULTURAL AND HISTORIC
RESOURCES PROTECTION
1.
Lessee agrees that whenever in the course of construction or
improvements on the leased premises, any indication of heretofore undetected
sub-surface sites of archaeological, cultural `or historic resources is brought to
light, the construction shall be halted in the involved area and the involved area
re-evaluated by a qualified archaeologist acceptable to the Secretary to prevent n-V
inadvertent destruction of such non-renewable resources. The Lessee sh
comply with the recommendations for mitigation made by the archaeologist and
approved by the Advisory Council on I3istoric'Preservation in accordance with
applicable rules and regulations. The cost of any required archaeological re-
evaluation and mitigation shall be borne by the Lessee and any archaeological,
cultural or historic artifacts which maybe salvaged shall be delivered to the Palm
Springs Office of the Bureau of Indian Affairs for appropriate disposition.
Section 23. Addition of Article 49 to the Original Lease. The following Article 49 is
hereby added to the Original Lease:
ARTICLE 49
SALE OF LEASED PREMISES;
LIMITATION OF LANDLORD'S LIABILITY
In the event of a sale or conveyance by Lessor of the leased
premises, such transfer shall operate to release Lessor from any
and all liability under this lease arising from any act, event, or
omission occurring subsequent to the closing of such transfer. Any
and all obligations of Lessor under this lease shall not constitute
personal obligations of the individual members of Lessor, and in
consideration of the benefit's accruing hereunder to Lessee and
notwithstanding anything contained in this lease to the contrary,
Lessee hereby covenants and, agrees ,for itself and all of its
successors and assigns,that the liability of Lessor for its obligations
under this lease shall be limited solely to, and Lessee's and its
successors' and assigns' sole and exclusive remedy shall be against
the Lessor's interest in the leased premises and any proceeds
thereof, including, but not limited to Lessor's interest in rents, and
any insurance and/or sales proceeds and/or any condemnation
awards relating to the leased premises, and Lessee, and its
successors and assigns shall not seek recourse against any
individual member of Lessor, or any of their personal assets
beyond their interest in the leased ,premises and the proceeds
thereof, for such satisfaction. Each of the covenants and
agreements of this Article 49 shall be applicable to any covenant or
agreement either expressly,contained in this lease or imposed by
statute or by common, law. Notwithstanding any contrary
provision herein, neither Lessor nor any of its members shall be
liable under any circumstances for, injury or damage to, or
interference with, Lessee's business or use of the leased premises,
including but not limited to, loss of rents or other revenues, loss of
business opportunity, loss''of,goodwill,or loss of use, in each case,
however occurring. Additionally; Lessor shall not be liable for
injury or damage which may be sustained by the person, goods,
wares, merchandise, or other property of Lessee, or of Lessee's
employees, invitees, or customers, or of any other person in or
about the leased premises, caused by or resulting from any
V I
whatsoever, whether such damage or injury results from conditions
upon the leased premises or from other'sources, and Lessee shall
look solely to its insurance proceeds for the cost of any repairs or
additional expenses incurred by Lessee,
Section 24. Amendment to Addendum 2 to the Original Lease. Addendum 2 to the
Original Lease is hereby deleted in its entirety and replaced with Addendum 2 hereto.
Section 25. Amendment to Addendum 3 to the Original Lease. Addendum 3 to the
Original Lease is hereby deleted in its entirety.
Section 26. Amendment to Addendum 4 to the Original Lease. Addendum 4 to the
Original Lease is hereby deleted in its entirety.
Section 27. Governing Law. This First; Amendment and the Original Lease as
amended hereby shall be governed and construed in accordance with the Act and applicable
federal law, except to the extent that state law is applicable to any matter not covered by the Act,
in which case the laws of the State of California shall be applied. The parties hereto consent to
jurisdiction by federal courts located in the County of Riverside, California, with respect to the
transaction contemplated by this First Amendment. 't
Section 28. Partial Invalidity. If any provision in this First Amendment or the
Original Lease should be held contrary to law, then such provision shall be null and void and
shall be deemed separable from the remaining provisions of this First Amendment and shall in
no way affect the validity of this First Amendment,, the Wyndham Hotel Sublease and the
Convention Center Sublease.
Section 29. Execution of Counterparts. This First Amendment may be executed in
any number of counterparts. Each of such counterparts shall for all purposes be deemed to be an
original; and all such counterparts shall together constitute but one and the same instrument.
Section 30. Effect of First Amendment. Upon joint execution by the parties and
approval by the Secretary of this First Amendment, its terms shall merge into, and be
incorporated within the Original Lease. All references to the Original Lease or "lease" from and
after the date of this First Amendment shall refer to the Original Lease, as amended by this First
Amendment.
�.,1/9 Yo
IN WITNESS WHEREOF, the parties hereto have caused this First Amendment to be
executed in their respective names by their duly authorized officers as of the date first above
written.
By:
Name:
By:
Name:
By:
Name:
By:
Name:
By:
Name:
By:
Name:
By:
Name:
By:
Name:
By:
Name:
By:
Name:
By:
Name:
By:
Name:
By:
Name:
By:
Name:
I
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ADDENDUM 2
The leased premises may be used for any lawful purpose or purposes permitted by
applicable zoning, or approved variances therefrom from time to time; provided, however, that
all or a portion of the leased premises shall be used for development of a portion or all of a
convention center complex to include meeting spaces, a hotel, commercial offices, rental space,
parking and other facilities and functions or any combination of the foregoing. It is specifically
agreed that improvements on the leased premises may be part of and attached to other
improvements on other contiguous or proximate real property whether leasehold or fee; that
improvements on the leased premises need not be independent of, or separate from, such other
improvements; that improvements on the leased premises may share support and common walls
and foundations with such other improvements; and that improvements on the leased premises
may be jointly financed or encumbered with such other improvements, all as the Lessee, in its
sole discretion, shall deem necessary or desirable, subject to the provisions of this lease.
Northing herein above contained shall be construed so as to in any way impair the rights
and interests of Lessor in and to any improvements on the leased premises upon any termination
of the lease, as more specifically described in Article 15 of this lease.
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM SPRINGS APPROVING AND AUTHORIZING THE
EXECUTION OF A SETTLEMENT AGREEMENT AND A FIRST
AMENDMENT TO BUSINESS LEASE 315
WHEREAS, on February 28, 1984, the "Original Lessors" identified on Exhibit A hereto
and by this reference incorporated herein ("Original Lessors") and SENCA Palm Springs, Inc., a
California corporation ("SENCA") entered into that certain Business Lease 315 (the "Lease")
wherein the Original Lessors leased to SENCA the lands and improvements described therein,
such lands being a part of the Agua Caliente (Palm Springs) Reservation situated in Riverside
County, California (the "Master Leasehold Estate"); and
WHEREAS, on December 31, 1984, SENCA subleased a portion of the Master
Leasehold Estate (the "Wyndham Property") to the Community Redevelopment Agency of the
City of Palm Springs pursuant to the Wyndham Hotel Sublease (the "Wyndham Hotel
Sublease"); and
WHEREAS, on December 31, 1984, SENCA subleased another portion of the Master
Leasehold Estate ("Convention Center Property") to the City of Palm Springs Public Facilities
Corporation pursuant to the Convention Center Sublease (the "Convention Center Sublease");
and
WHEREAS, pursuant to an Agreement of Assignment, dated September 29, 1989, the
City of Palm Springs (the "City") assumed all of the obligations of SENCA under the Original
Lease, the Wyndham Hotel Sublease and the Convention Center Sublease; and
WHEREAS, the individuals identified as "Current Lessors" on Exhibit A hereto and by
this reference incorporated herein are the current owners of the fee interest in the land
underlying the Master Leasehold Estate (the "Current Lessors" are referred to herein as the
"Lessors"); and
WHEREAS, a dispute (the "Dispute") has arisen between the Lessors and the City
wherein Lessors claim that City violated certain terms and provisions of the Lease (as more
specifically described in the hereinafter defined "Settlement Agreement'); and
WHEREAS, City and Lessors desire to settle such Dispute by entering into the
Settlement Agreement and Release, dated April 7, 2004 (the "Settlement Agreement"), by and
among the City, the majority of Lessors pursuant to the terms of the Lease and the Bureau of
Indian Affairs, which is an authorized representative of the Secretary of the Interior (hereinafter
"Secretary"); and
WHEREAS, the form of Settlement Agreement as on file in the Office of the City Clerk
and by this reference incorporated herein; and
WHEREAS, pursuant to Article 42 of the Lease, the action of those Lessors holding the
majority of interest in the ownership of the Master Leasehold Estate shall constitute the action of
all the Lessors for the purposes of the Lease; and
1003/024/30743.01
Resolution No.
Page 2
WHEREAS, pursuant to Article 41 of the Lease, any amendments to the terms of the
Lease, shall not be valid or binding upon the parties thereto until approved by the Secretary;
and
WHEREAS, pursuant to the terms of the Settlement Agreement, City and a majority of
Lessors, with the approval of the Secretary will enter into a First Amendment to Lease (the "First
Amendment') to clarify and modify certain provisions of the Lease in accordance with the
Settlement Agreement; and
WHEREAS, Lessors holding a majority in interest of the Master Leasehold Estate and
the Secretary have received, reviewed and signed the Settlement Agreement and the First
Amendment; and
WHEREAS, the City desires to enter into the Settlement Agreement and First
Amendment to settle the Dispute.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Palm Springs
that:
SECTION 1. The above recitals are true and correct.
SECTION 2. The Settlement Agreement as on file in the Office of the City Clerk is
hereby approved and the City Manager is hereby authorized and directed to execute,
acknowledge and deliver the same, in the name and on behalf of City.
SECTION 3. The First Amendment as on file in the Office of the City Clerk is
hereby approved and the City Manager is hereby authorized and directed to execute,
acknowledge and deliver the same, in the name and on behalf of City.
SECTION 4. The City Manager or any other appropriate officers of City are further
authorized and directed to take such actions as is necessary and appropriate to effectuate the
terms of the Settlement Agreement and the First Amendment.
SECTION 5. This resolution shall take effect and be enforceable immediately upon
its adoption.
ADOPTED THIS day of 2004.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By:
City Clerk City Manager
REVIEWED AND APPROVED AS TO FORM
��i�
Resolution No.
EXHIBIT A
Original Leonard Charles Bow Ray Leonard Patencio
Lessors: Joseph Patrick Patencio Ruth Elaine Patencio
Beverly Patencio Diaz Thomas I. Siva
Corinne Welmas Siva Priscilla Patencio Gonzales
Clarice Bow Mathews Nancy Marie Bow Soza
James Steve Sauble Germaine Pico Arenas
Christine Shores Luker Marcus Joseph Pete, III
Virginia Ann Milanovich Winifred Patencio Preckwinkle
Richard Michael Milanovich
Current Leonard Charles Bow J. Patrick Patencio
Lessors: Patricia Schoolcraft-Patencio Priscilla Gonzales
Beverly Patencio Diaz Nancy Marie Bow Soza
Corinne Welmas Siva Winifred Patencio Preckwinkle
Christine Shores Luker Clarice Bow Dailey
Virginia Ann Milanovich Dana Prieto
Richard Michael Milanovich Marcus Pete III
Ray Leonard Patencio James Saubel Estate
3-3
1003/024/30743.01
RESOLUTION NO.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY
OF PALM SPRINGS APPROVING AND AUTHORIZING
THE EXECUTION OF A SETTLEMENT AGREEMENT
AND A FIRST AMENDMENT TO BUSINESS LEASE 315
WHEREAS, on February 28, 1984, the "Original Lessors" identified on Exhibit A hereto
and by this reference incorporated herein ("Original Lessors") and SENCA Palm Springs, Inc., a
California corporation ("SENCA") entered into that certain Business Lease 315 (the "Lease")
wherein the Original Lessors leased to SENCA the lands and improvements described therein,
such lands being a part of the Agua Caliente (Palm Springs) Reservation situated in Riverside
County, California(the"Master Leasehold Estate"); and
WHEREAS, on December 31, 1984, SENCA subleased a portion of the Master
Leasehold Estate (the "Wyndham Property") to the Community Redevelopment Agency of the
City of Palm Springs pursuant to the Wyndham Hotel Sublease (the "Wyndham Hotel
Sublease"); and
WHEREAS, on December 31, 1984, SENCA subleased another portion of the Master
Leasehold Estate ("Convention Center Property") to°the City of Palm Springs Public Facilities
Corporation pursuant to the Convention Center Sublease (the "Convention Center Sublease");
and
WHEREAS, pursuant to an Agreement of Assignment, dated September 29, 1989, the
City of Palm Springs (the "City") assumed all of the obligations of SENCA under the Original
Lease,the Wyndham Hotel Sublease and the,Convention Center Sublease; and
WHEREAS, the individuals identified as "Current Lessors" on Exhibit A hereto and by
this reference incorporated herein are the current owners of the fee interest in the land underlying
the Master Leasehold Estate(the"Current Lessors" are'referred to herein as the "Lessors"); and
WHEREAS, a dispute (the "Dispute") has'arisen between the Lessors and the City
wherein Lessors claim that City violated certain terms and provisions of the Lease (as more
specifically described in the hereinafter defined"Settlement Agreement"); and
WHEREAS, City and Lessors desire to s'bttle such Dispute by entering into the
Settlement Agreement and Release, dated April 7, 2004 (the "Settlement Agreement"), by and
'among the City, the majority of Lessors pursuant to the terms of the Lease and the Bureau of
Indian Affairs, which is an authorized representative of the Secretary of the Interior (hereinafter
"Secretary"); and
WHEREAS, the form of Settlement Agreement is attached hereto as Exhibit B and by
this reference incorporated herein; and
Resolution No.
Page 2
WHEREAS, pursuant to Article 42 of the Lease, the action of those Lessors holding the
majority of interest in the ownership of the Master Leasehold Estate shall constitute the action of
all the Lessors for the purposes of the Lease; and
WHEREAS, pursuant to Article 41 of the Lease, any amendments to the terms of the
Lease, shall not be valid or binding upon the parties thereto until approved by the Secretary; and
WHEREAS, pursuant to the terms of the Settlement Agreement, City and a majority of
Lessors, with the approval of the Secretary will enter into a First Amendment to Lease(the"First
Amendment') to clarify and modify certain provisions of the Lease in accordance with the
Settlement Agreement; and
WHEREAS, Lessors holding a majority in interest of the Master Leasehold Estate and
the Secretary have received, reviewed and signed;the Settlement Agreement and the First
Amendment; and
WHEREAS, the City desires to enter into the Settlement Agreement and First
Amendment to settle the Dispute.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Palm
Springs that:
SECTION 1. The above recitals are true and correct.
SECTION 2. The Settlement Agreement attached hereto as Exhibit B is hereby
approved and the City Manager is hereby authorized and directed to execute, acknowledge and
deliver the same, in the name and on behalf of City.
SECTION 3, The First Amendment attached hereto as Exhibit C is hereby approved
and the City Manager is hereby authorized and directed to execute, acknowledge and deliver the
same, in the name and on behalf of City.
SECTION 4. The City Manager or any other appropriate officers of City are further
authorized and directed to take such actions as is necessary and appropriate to effectuate the
terms of the Settlement Agreement and the First Amendment.
SECTION 5. This resolution shall take effect and be enforceable immediately upon
its adoption.
Resolution No.
Page 3
ADOPTED THIS_day of 2004.
AYES:
NOES:
ABSENT:
ATTEST: CITY OF PALM SPRINGS, CALIFORNIA
By:
City Clerk City Manager
REVIEWED AND APPROVED BY:
jg� '� �
Resolution No.
Page 4
I HEREBY CERTIFY that the foregoing is a true copy of Resolution No. duly adopted by
the City Council of the City of Palm Springs in a meeting thereof held on the day of
2004 dated at Palm Springs, California, this_day of
PATRICIA A. SANDERS
City Clerk
City of Palm Springs, California
Resolution No.
Page 5
EXIIIBIT A
Original Leonard Charles Bow Ray Leonard Patencio
Lessors: Joseph Patrick Patencio Ruth Elaine Patencio
Beverly Patencio Diaz Thomas 1. Siva
Corinne Welmas Siva Priscilla Patencio Gonzales
Clarice Bow Mathews Nancy Marie Bow Soza
James Steve Sauble Germaine Pico Arenas
Christine Shores Luker Marcus Joseph Pete, III
Virginia Ann Milanovich Winifred Patencio Preckwinkle
Richard Michael Milanovich
Current Leonard Charles Bow J. Patrick Patencio
Lessors: Patricia Schoolcraft-Patencio Priscilla Gonzales
Beverly Patencio Diaz Nancy Marie Bow Soza
Corinne Welmas Siva Winifred Patencio Preckwinkle
Christine Shores Luker Clarice Bow Dailey
Virginia Ann Milanovich Dana Prieto
Richard Michael Milanovich Marcus Pete III
Ray Leonard Patencio James Saubel Estate