HomeMy WebLinkAbout4/2/2003 - STAFF REPORTS (2) DATE: APRIL 2, 2003
TO: COMMUNITY REDEVELOPMENT AGENCY
FROM: DIRECTOR OF COMMUNITY AND ECONOMIC DEVELOPMENT
APPROVAL OF AN EXCLUSIVE AGREEMENT TO NEGOTIATE WITH ACQUA BELLA
CORPORATION OF WEST HOLLYWOOD ON A PARCEL AT THE NORTHEAST
CORNER OF SOUTH PALM CANYON DRIVE AND MESQUITE DRIVE
RECOMMENDATION:
It is recommended that the Agency approve the Exclusive Agreement to Negotiate with
Acqua Bella Corporation of West Hollywood, on an 11+ acre parcel and a half-acre
parcel at the comer of northeast corner of South Palm Canyon Drive and Mesquite
Drive to assist in land assembly for a mixed use residential/retail center.
SUMMARY:
The Developer of the site,Acqua Bella Corporation of West Hollywood, is working on
a master plan forthe 11 acres at the northeast comer of South Palm Canyon Drive and
Mesquite Drive to redevelop the former shopping center site, now demolished, into a
mixed use retail/residential project. The Developer expects to close on the acquisition
of the main portion of the site from the current owners in May, but has asked for
Agency assistance in acquiring the half acre adjacent to the parcel on the north side.
Since, because of SB 975,the Agency cannot provide any financial assistance to the
project withouttriggering prevailing wages,one of the few things it can do is assistwith
land assembly at the Developer's cost. The Developerwill pay for the appraisal of the
adjacent site, as well as the cost of preparing a DDA.
BACKGROUND:
In January, 2003 1999 Acqua Bella Corporation of West Hollywood ("Developer')
requested Agency assistance in the redevelopment of a former shopping center
site at the northeast corner of South Palm Canyon Drive and Mesquite Drive into
a mixed use residential/retail center. Of particular concern is the acquisition of a
small half-acre parcel on the northern edge of the developer's property.
The Developer has entered an agreement to acquire the main parcel from the
owner, a French bank, and expects to close on the sale in May. The history of
transactions with the owner over the past several years has been spotty, but the
Developer is confident they have offered a fair price and the transaction will close.
The Developer has also made repeated attempts to acquire the adjacent parcel but
so far has been unsuccessful. Planning has strongly recommended the
incorporation of the adjacent parcel into the overall master plan for the site, but
has not yet required it as a condition of approval. The Developer has begun site
planning and design work, and has hired a local architect to put together a first-
class project. The Agency does not own either of the parcels, nor does it anticipate
providing any financial assistance to the project.
The Exclusive Agreement is for a period of six months, during which staff will
negotiate a Disposition and Development Agreement with the developers.
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However, if the Developers do not close on the main transaction with the owner of
the 11 acre parcel, the agreement will terminate in three months. The developers,
upon execution of this agr ement, will make a deposit to the Agency sufficient to
cover Jthe Agency's cost i preparing the DDA.
JO N S. YMO
Dir ctor Community& Economic Development
APPROVED=��.,—w, "°�_�.�-�✓
Executive Director
ATTACHMENTS:
1. Resolution
2. Exclusive Agreement to Negotiate
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EXCLUSIVE AGREEMENT TO NEGOTIATE
ACQUA BELLA CORPORATION
THIS EXCLUSIVE AGREEMENT TO NEGOTIATE ("AGREEMENT') , is made this day of
, 2003, by and between the PALM SPRINGS COMMUNITY
REDEVELOPMENTAGENCY("AGENCY"),and ACQUA BELLA CORPORATION ("DEVELOPER").
RECITALS
The parties entered into this Agreement on the basis of the following facts,understandings,and
intentions:
A. The Agency is a public body, corporate and politic, exercising govemmental functions
and powers and organized and existing under the Community Redevelopment Law of the State of
California (Health and Safety Code Sections 33000, et seq.).
B. The Agency desires to effectuate the Redevelopment Plan for the Merged Palm
Springs Redevelopment Project Area No. 1 (formerly, the South Palm Canyon Project Area) by
providing for the development of a residential and retail project of no fewer than 43,000 s.f. of office,
restaurant, and retail space, a parking structure of at least 250 spaces, and 48 residential units at the
northeast comer of South Palm Canyon Drive and Mesquite Avenue (the "Site").
C. The Developer desires to construct and operate a retail and residential project at the
Site. The term "Developer" as used herein includes the principals, partners, and joint venturers of
Developer and all obligations of Developer herein shall be the joint and several obligations of such
principals, partners, and joint venturers.
D. The Agency and Developer desire,forthe period setf'orth herein,to negotiate diligently
and in good faith to prepare an agreement whereby the Developer would develop such retail and
residential project on the site.
NOW,THEREFORE,and in consideration of the mutual covenants hereinafter contained, it is
mutually agreed upon by the parties as follows:
SECTION 1. NATURE OF NEGOTIATIONS.
A. Good Faith. The Agency and the Developer agree that for the period set forth in
Section 2 herein they will negotiate diligently and in good faith to prepare and enter into an agreement
(the "DDA") consistent with the provisions of this Agreement for the development of a retail and
residential project on the Site specified herein. The development will be subject to all rules,
regulations, standards, and criteria set forth in the Redevelopment Plan, the City's General Plan,
applicable specific plans and zoning regulations, and with this Agreement.
B. Site. The Projectshall be located upon the following real property,as shown in the"Site
Map,"attached hereto as Exhibit"A"and incorporated herein by this reference. The Adjacent property
is shown on the Site Map and described in Exhibit"A"as adjacent parcel.
C. Construction and Ownership Concept. The Developer's interest shall be fee. The
design shall be consistent with the Agency's and the City's design guidelines. Developer's architect
shall work with the City's design guidelines to create a harmonious and attractive retail and residential
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project with a distinct identity. The Developer is responsible for financing and constructing all
improvements upon the Site. The"retail and residential project"shall consist of at least 43,000 square
feet of office,restaurant,and retail space,a parking structure of at least 250 spaces,and 48 residential
units. The Site will be subject to a declaration of covenants, conditions, and restrictions to govern the
continued operation of the retail and residential project.
D. Financial Provisions. The Developer is responsible for acquisition of the site and
financing and constructing all improvements upon the Site. Developer shall pay for all necessary public
improvements and pay all City's fees for processing the Project,without assistance from the Agency.
E. Schedule. The Developer's goal is to develop the retail and residential project by June
30, 2004. The project shall commence construction before December 31, 2003. The DDA shall
contain a Schedule of Performance.
F. Use and Transfer Restrictions. The DDA will generally be subject to restrictions on use
and transfer during construction and for a specified period thereafter through recorded restrictions (i)
to assure that the use will be consistent with and promote the mixed use development project, (ii)to
prevent speculation, (iii)to assure that any transferee has the resources, capability and experience to
successfully develop, market, and operate the retail and residential project, (iv) to assure long-term
maintenance of the project in a productive and attractive condition, and (iv) to provide an adequate
financial return to the Agency.
G. Property Acquisition. The Site and Adjacent Parcels are owned by private owners.
During the period of this Agreement, the Agency and Developer shall negotiate a DDA by which the
property would be conveyed to the Developer at fair market value. Nothing in this Agreement conveys
the property to the Developer.
H. Exclusivi . The Agency agrees for the period set forth in Section 2 that it will not
negotiate with or enter into any agreement with any other entity for development of the Site, and the
Developeragrees notto negotiate with any other person or entity regarding the development of a retail
and residential project within the tenitorialjudsdiction of Palm Springs orwithin 2 miles of the boundary
thereof without the approval of Agency.
I. Site Plan/Architecture. The DDA will include approval by the Agency of the project's
site plan and architecture,which shall be compatiblewith the development standards of the community.
SECTION 2. PERIOD OF NEGOTIATIONS.
The period of negotiation shall be one hundred eighty(180)days from the date this Agreement
is signed by the Agency, and this Agreement shall terminate after the expiration of such period unless
extended as follows:
A. For sixty(60) days if an agreement has been prepared by the Agency and executed
bythe Developer,and has been submitted to the Agency but has not yet been approved by the Agency
Board; or
B. Forthirty(30)days if the major business terms have been agreed to and the Executive
Director determines that further negotiations are likely to result in a written agreement; or
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C. By mutual agreement of the parties.
Developer understands and acknowledges that if negotiations culminate in an agreement,such
agreement shall be effective only afterand if the agreement has been considered and approved by the
Agency Board after public hearing thereon as required by law.
If the Developer does not close escrow on the purchase of the Project Site by June 30,2003,
however, the Agreement shall expire on that date.
SECTION 3. DEVELOPER'S RESPONSIBILITIES.
During the period of negotiation, Developerwill prepare such studies, reports,and analysis as
shall be necessary to permit Developer to determine the feasibility of its participation in the retail,
office, restaurant, and residential project. The Developer shall fully cooperate in the development of
the Project design and financing plan. During the period of negotiation and as requested by the
Agency, the Developer shall submit to the Agency the following:
A. Full disclosure of Developers principals, partners, joint venturers, negotiators,
consultants, professional employees, or other associates of the Developer who are participants or
principals of the Project, and all other relevant information concerning the above.
B. Statement of financial condition in sufficient detail to demonstrate Developers financial
capabilities,those of its principals,partners,joint venturers,and those of its prospective Developers to
satisfy the commitments necessitated by the Project. To the extent Developer wants such financial
statements to remain confidential,they shall be supplied to the Agency only if the confidentiality of the
statements can be maintained.
C. All information necessary for the design of the Project to meet the Developers
reasonable requirements. In addition, Developer shall take all actions necessary to obtain construction
and permanent financing.
The Developershall negotiate exclusivelywith theAgency's negotiating team and with no other
persons unless expressly authorized to do so by the Agency's negotiating team. During the period of
negotiations, no statements will be made by the Developer to the media without the approval of the
Agency's negotiating team. No prepared statements shall be released to the media without the mutual
consent of the respective negotiating teams.
SECTION 4. AGENCY'S RESPONSIBILITIES.
A. Preparation of Agreement. If agreement is reached on the business terms forinclusion
in the agreement, the Agency shall prepare such agreement for consideration by the Developer. All
Agency negotiation and preparation expenses shall be chargeable against the Good Faith Deposit,
whether or not a final agreement is reached.
B. Zoning. The Agency will undertake all acts necessary to rezone such portions of the
property as may be necessary to permit the mixed use project on the Site.
SECTION 5. GOOD FAITH DEPOSIT.
Concurrentlywith the execution of this Agreement,Developershall submitto the Agency a good
faith deposit in the sum of Five Thousand Dollars($5,000.00)in the form of a cash deposit, cashiers'
check, irrevocable letter of credit, or other form of security acceptable to the Agency to insure that the
Developer will proceed diligently and in good faith to negotiate and perform all of the Developer's
obligations under this Agreement. If the deposit is in cash or a certified cashiers' check, it shall be
deposited in an interest-bearing account of the City. Interest, if any, shall be added to the deposit and
held as additional security for the Developer's obligations hereunder. Upon termination of this
Agreement the balance, less charges deducted from the deposit pursuant to section 4(A), shall be
returned to the Developer provided that the Developer has negotiated diligently and in good faith and
carried out its obligations hereunder. If Developer has failed to do so,inasmuch as the actual damages
which would result from a breach by Developer of its obligations under this Agreement are uncertain
and would be impractical orextremely difficult to determine,Agency shall be entitled to retain the entire
amount of said deposit, as liquidated and agreed damages. It is further understood that the DDA will
require an increase in the good faith upon execution of the DDA. The aggregate good faith deposit
then required shall be at least Fifteen Thousand Dollars ($15,000.00).
SECTION 6. MISCELLANEOUS.
A. No commissions. The Agency shall not be liable for any real estate commission or any
broker's fees which may arise herefrom. The Agency represents that it has engaged no broker,agent,
or finder in connection with this transaction, and the Developer agrees to hold the Agency harmless
from any claim by any broker, agent, or finder retained by the Developer.
B. Appraisal of Properties. Upon successful negotiation of a Disposition and Development
Agreement between Agency and Developer,the property shall be conveyed at fairmarketvalue based
on an MAI appraisal. Agency shall commission such appraisal,which shall be paid from the Good Faith
Deposit described in Section 5 or paid directly by the Developer.
C. Ownership of Documents. If the negotiations contemplated by this Agreement do not
result in the execution of an agreement, Developer shall transfer to Agency copies of any reports,
studies, analysis,site plan layouts,development cost estimates, engineering studies, memorandums,
or similar documents regarding the proposed development and prepared during the period of
negotiations,which copies shall become the property of Agency. Such transfer shall be made without
any representation or warranty by the Developer as to the accuracy or sufficiency of the contents of
such documents and shall be made subjectto the rights of the preparers of such documents including,
without limitation, the copyright(if any) associated with such documents.
D. Purpose of Contract. It is expressly understood and agreed by the parties hereto that
this is an Agreement regarding the conduct of contract negotiations only and does not convey any
interest in the property whatsoever. it is further agreed and understood that this Agreement does not
imply any obligation on the part of the Agency to enter into any agreement that may result in
negotiations contemplated herein.
E. Amendment. This Agreement may only be amended by a document in writing signed
by the parties hereto.
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F. TimeforAcceotance. This Agreement,when executed by the Developer and delivered
to the Agency,shall constitute a binding offerwhich cannot be withdrawn priorto April 30,2003,so that
the Agreement may be presented to the Agency Board. Notwithstanding any other provision herein
to the contrary,Agency shall not be obligated hereunderunless and until the Agency Board authorizes
the Chairman to execute this Agreement.
G. Corporate Authority. The persons executing this Agreement on behalf of the parties
hereto warrant that(i)such party is duly organized and existing,(ii)they are duly authorized to execute
and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement, such party is
formally bound to the provisions of this Agreement, and(iv)the entering into this Agreement does not
violate any provision of any other Agreement to which said party is bound.
IN WITNESS WHEREOF,the parties have executed this Agreement as of the day first above written.
"AGENCY'
COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF PALM SPRINGS, a public body,
corporate and politic
Chairman
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Agency Counsel
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EXHIBIT"A"
TO EXCLUSIVE AGREEMENT TO NEGOTIATE
LEGAL DESCRIPTION OF THE PROPERTY
The land is that certain real property located in the City of Palm Springs, County of Riverside,
State of California, more particularly described as follows:
APN: 508-172-007
.58 ACRES M/L IN FOR BLK C MD 022/076 TAHQUITZ RIVER ESTATES 2
RESOLUTION NO.
OF THE COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF PALM SPRINGS,CALIFORNIA,APPROVING
AN EXCLUSIVE AGREEMENT TO NEGOTIATE WITH
ACQUA BELLA CORPORATION OF WEST HOLLYWOOD,
CALIFORNIA FOR THE REDEVELOPMENT OF A
FORMER SHOPPING CENTER SITE IN THE MERGED
PROJECTAREA#1 (FORMERLYSOUTH PALM CANYON
REDEVELOPMENT PROJECT AREA (AREA#3)
WHEREAS the Community Redevelopment Agency is responsible for eliminating blightwithin
the Merged Project Area #1; and
WHEREAS in the project area is a former neighborhood shopping center and small
commercial building that was razed after a fire, which is now characterized by broken slabs
and weeds; and
WHEREAS, the Agency has the power to enter into a Disposition and Development
Agreement with developers to assemble parcels as part of a redevelopment project; and
WHEREAS Acqua Bella Corporation of West Hollywood has requested the Agency to enter
into an Exclusive Agreement to Negotiate on the site while they negotiate to assemble the
necessary parcels;
NOW THEREFORE BE IT RESOLVED by the Community Redevelopment Agency of the City
of Palm Springs, that the Exclusive Agreement to Negotiate between the Agency and Acqua
Bella Corporation, in a form approved by the Agency Counsel, is hereby approved.
ADOPTED this day of 2003.
AYES:
NOES:
ABSENT:
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS, CALIFORNIA
By
Assistant Secretary Chairman
REVIEWED &APPROVED AS TO FORM
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