HomeMy WebLinkAbout00407C - WESTAR DEVELOPMENT SHOPPING CENTER GENE AUTRY RAMON Mar-30-01 04: 32P
WESTAR ASSOCIATES
SHOPPING CENTER DEVELOPMENT
March 30, 2001
Via Facsimile#(760) 323-6207
and U.S. Mail
Mayor Will Kleindienst
City of Palm Springs
Post Office Box 2743
Palm Springs, CA 92263
Re: NEC Ramon & Gene Autry
Palm Springs, California
Dear Will:
Unfortunately, after three years, we've concluded that our project is no longer feasible.
As such, we are formerly requesting the cancellation of our Exclusive Right to Negotiate
and return of our deposit for the following reasons:
1. Our anchor tenant no longer wishes to proceed due to the cost and
uncertainty of the remediation.
2. We were unable to reach agreement on the Epsteen property.
We appreciated the opportunity to work with the City and are glad that at least we were
able to attract Lowes to Palm Springs (though not on our propertyl)
In closing, I want to let you know how highly we regard John Raymond. He is
professional, qualified, and a credit to the City.
Hopefully, there will be other opportunities for Westar in Palm Springs in the future.
Sincerely,
STAR AS CIATES
Robert T. est
RT
cc: Councilmember Jim Jones John Raymond
Councilmember Ron Oden Robert Brock
Councilmember Deyna Hodges John Stiles
Councilmember Jeanne Reller-Spurgin
PseNry/Will Nelndienet 3.30-01
2925 BRISTOL STREET • COSTA MESA, CA 92626-5991 • (714)241-0400
FAX:(714)241-0132 • E-MAIL: Westar®WestarAssociates.com
Website: www.WestarAssociates.com
. Westar Development_
Exclusive Agr to Negotiate
AGREEMENT #407C
Chairman signed 9-6-00
,�,ll10
EXCLUSIVE AGREEMENT TO NEGOTIATE-
WITH WESTAR DEVELOPMENT COMPANY FOR THE
DEVELOPMENT OF A SHOPPING CENTER
THIS EXCLUSIVE AGREEMENT TO NEGOTIATE ("Agreement"), is made this
day of 4V? d✓4. , 2001, by and between the COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS ("AGENCY') and WESTAR DEVELOPMENT
COMPANY ("Developer").
RECITALS
The parties entered into this Agreement on the basis of the following facts,
understandings, and intentions:
A. The Agency is a public body, corporate and politic, exercising governmental
functions and powers and organized and existing under the Community Redevelopment Law
of the State of California (Health and Safety Code Sections 33000, et se .).
B. The Agency desires to effectuate the Redevelopment Plan for Redevelopment
Project Area No. 4, now a part of Merged Project Area#1, by providing for the development of
a regional retail shopping center within a portion of the approximately 38-acre vacant property
at the northeast corner of Gene Autry Trail and Ramon Road (the "Shopping Center").
C. The Developer is experienced in shopping center development and has dealt
with the major tenants who might occupy the Shopping Center. 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. Due to various uncertainties, including market conditions and the availability of
tenants, the need to develop a land use plan with adequate environmental review, and
conditions of the site, including prior soil contamination issues creating significant remediation
costs, the parties believe additional due diligence is necessary before a conclusive purchase
agreement can be concluded.
E. The Agency and Developer entered into a one year Agreement to Negotiate on
September 29, 1998 which has now expired. Developer has obtained significant tenant
interest and has acquired more expertise and knowledge concerning how to remediate
contaminated soils, which the Agency believes justifies the extension of the Agreement.
F. The Agency and Developer desire, for the period set forth herein, to negotiate
diligently and in good faith to prepare an agreement whereby the Developer would develop the
Shopping Center Site for a major regional power center.
NOW, THEREFORE, and in consideration of the mutual covenants hereinafter
contained, it is mutually agreed upon by the parties as follows:
Westa d
8r.wP January 31,2001
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 section for the development of a
Shopping Center(the "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. The
DDA will generally be in the form negotiated by the Agency with other development entities.
B. Site. The Project shall be located upon all or a portion of the real property
designated as the "Shopping Center" or the "Site", as shown in the "Site Map," attached hereto
as Exhibit"A" and incorporated herein by this reference. The Site is divided into two
ownerships, herein designated as the "Agency Parcel" and the "Epsteen Parcel". It is
anticipated that the project will be developed in phases.
C. Nature of Shopping Center and Ownership. The Developer's interest shall be
fee. The design shall be consistent with the Agency's and the City's design guidelines and
Developer shall obtain architectural review from the City's Design Review Board. The
Developer is responsible for financing and constructing all improvements upon the Site. The
Shopping Center shall be a "power center"with a major tenant occupying at least 100,000 or
more square feet, and ancillary retail tenants to include uses such as general merchandise,
food, theaters, home improvement, clothing, electronics, sports, restaurants, and similar uses.
The construction cost of the Project will exceed $8,000,000.
D. Soils. Agency has disclosed all information it has concerning the condition of
the soils, which contain contamination and require remediation. Agency shall sell the property
in "as is" condition and not retain liability for soils conditions following the remediation and sale
of the site. It shall be the obligation of the Developer to investigate the site and develop a
remediation plan which can be implemented by Developer within the project economics.
Agency may apply for financial assistance from the State or Federal government to assist
Developer with the remediation of the contaminated portion of the site, but it shall be the
Developer's responsibility to finance and undertake the remediation of the Site. The Agency
and Developer, together with the County of Riverside Department of Environmental Health,
have determined that a "partial clean closure" of the site may be the most practical approach,
and that California Health & Safety Code ("H&SC") § 33459.1(a)(1) allows Redevelopment
Agencies to "take any actions that the agency determines are necessary and that are
consistent with other state and federal laws to remedy or remove a release of hazardous
substances on, under, or from property with a project area, whether the agency owns that
property or not," thereby creating additional authority to clean the site, which the Agency may
utilize to assist the Developer in accomplishing the remediation. The Developer acknowledges
the Agency will not have any obligation to utilize any resources except those it may receive
from the State or Federal government. Developer will investigate and determine if it will
decline to acquire any parcels which cannot be adequately mitigated, prior to the expiration of
the period to negotiate provided herein.
E. Financial Provisions. Developer shall acquire a fee interest in all or a portion
of the Site at a price to be agreed upon by the parties with the actual net usable square
footage determined through survey and with an offset for remediation costs.
Westagrmpd January 31,2001 -2-
1. Developer shall be responsible for funding the cost of any condemnation
action.
2. Developer shall be responsible for financing and constructing all
improvements.
3. Developer shall pay for all necessary public improvements and pay all
City's fees for processing the Project, without assistance from the Agency.
4. Nothing in this agreement shall be construed to be contrary to the
provisions of Health & Safety Code Section 33426.5:
"Notwithstanding the provisions of Sections 33391, 33430, 33433, and 33445, or any
other provision of this part, an agency shall not provide any farm of direct assistance to:
(b) (1) A development that will be or is on a parcel of land of five acres or more
which has not previously been developed for urban use and that will, when
developed, generate sales or use tax pursuant to Part 1.5 (commencing with
Section 7200) of Division 2 of the Revenue and Taxation Code, unless the
principal permitted use of the development is office, hotel, manufacturing, or
industrial, or unless, prior to the effective date of the act that adds this section,
the agency either owns the land or has entered into an enforceable agreement,
for the purchase of the land or of an interest in the land, including, but not limited
to, a lease or an agreement containing covenants affecting real property, that
requires the land to be developed.
(2) For the purposes of this subdivision, a parcel shall include land on an
adjacent or nearby parcel on which a use exists that is necessary for the legal
development of the parcel.
(e) This section shall not be construed to apply to agency assistance in the
construction of public improvements that serve all or a portion of a project area
and that are not required to be constructed as a condition of approval of a
development described in subdivision (a), (b), or(c), or to prohibit assistance in
the construction of public improvements that are being constructed for a
development that is not described in subdivision (a), (b), or(c)."
5. Developer shall be responsible for all soils remediation costs.
6. The purchase price shall be $4.00 per square foot for the parcel
(approximately $2,400,000). Developer's remediation costs, however,
will be offset dollar for dollar against the sale price. If the remediation
costs exceed $4.00 s.f. the Agency would not receive revenue from the
sale. Developer absorbs all the financial risk of the remediation cost
beyond the $4.00 s.f. If the remediation is accomplished for less than
$4.00 s.f., the Agency would receive the difference between the
approximately $2,400,000 and the actual cost. It is understood that the
City will review and approve the remediation plan as well as the
performance of the remediation plan to assure unnecessary remediation
activity is not being performed.
Westagrmpd January 31,2001 -3-
F. Schedule. The goal will be to develop the Shopping Center for opening by
June, 2002. The DDA shall contain a Schedule of Performance. Due to the need to possibly
acquire certain parcels through condemnation or environmental enforcement action under
§33459, title to the parcels may be delivered in phases.
G. Use, Transfer, and Maintenance Restrictions. The DDA will generally be
subject to restrictions on use and transfer during construction and for a specified period
thereafter(i) to assure that the use will be consistent with and promote the Redevelopment
Plan, (ii) to protect the character of the Project and to provide an adequate long-term financial
return, (iii) to prevent speculation, and (iv) to assure that any transferee has the resources,
capability, and experience to successfully operate the Shopping Center. In addition,
restrictions shall be recorded to assure proper maintenance of landscaping and improvements.
H. Property Acquisition. To the extent permitted by law, the DDA will contain
provisions that the Agency may consider the use of its power of eminent domain for site
assemblage should voluntary negotiations be unsuccessful, provided that all costs shall be
borne by the Developer.
SECTION 2. PERIOD OF NEGOTIATIONS.
A. Period of Exclusive Negotiation. The period of negotiation shall be six (6)
months from the date this Agreement is signed by the Agency, except as provided herein. By
mutual consent based on progress made toward developing the center, the Agreement may be
extended an additional six (6) months past the expiration period.
B. Early Termination. Within ninety (90) days from the date hereof, the parties
shall meet and review the status of performance under this Agreement (herein 'Review
Meeting"). Within such period, Developer should have done the following:
1. Prepared a preliminary site plan.
2. Prepared a preliminary financial proforma.
3. Have developed a tenant interest list specifying tenants contacted and
those from whom commitments have been or will be obtained. To the extent Developer wants
such information to remain confidential, they shall be supplied to the Agency only if
confidentiality can be maintained.
If the parties determine that the Project is not economically feasible, or if
Agency finds Developer's progress with respect to the foregoing unsatisfactory, then Agency
may terminate this Agreement, retaining the Good Faith Deposit as specified in Section 5.
C. Extension of Time. This Agreement shall terminate after the expiration of the
period set in Subsection A unless extended as follows:
1. For sixty (60) days, if an agreement has been prepared by the Agency
and executed by the Developer and has been submitted to the Agency
but has not yet been approved by the Agency Board; or
Wesfagrmpd January 31,2001 -4-
2. For thirty (30) days if the major business terms have been agreed to and
the Executive Director determines that further negotiations are likely to
result in a written agreement; or
3. By mutual agreement of the parties.
D. Agency Approval. Developer understands and acknowledges that if
negotiations culminate in an agreement, such agreement shall be effective only after and if the
agreement has been considered and approved by the Agency Board after public hearing
thereon as required by law.
SECTION 3. DEVELOPER'S RESPONSIBILITIES.
During the period of negotiation, Developer will prepare such studies, reports, and
analysis as shall be necessary to permit Developer to determine the feasibility of the Project.
During the period of negotiation, and as requested by the Agency, the Developer shall submit
to the Agency the following:
A. Full disclosure of Developer's principals, partners, joint venturers, negotiators,
consultants, professional employees, or other associates of the Developer who are participants
or principals of the Project, and all other relevant information concerning the above.
B. Statement of financial condition in sufficient detail to demonstrate Developer's
financial capabilities, those of its principals, partners,joint venturers, and those of its
prospective developers to satisfy the commitments necessitated by the Project, including all
information necessary to demonstrate the availability of construction and permanent financing.
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 Agency's
reasonable requirements. This information shall be sufficient to allow Agency to evaluate site
configuration, architectural design and similar issues.
D. All information necessary to show tenant availability and interest, the nature of
the proposed tenants, and the financial strength and resources of the tenants. To the extent
Developer wants such information to remain confidential, they shall be supplied to the Agency
only if confidentiality can be maintained.
E. All information necessary to complete Midterm Review under Section 2.
The Developer shall negotiate exclusively with the Agency's negotiating team and with
no other persons unless expressly authorized to do so by the Agency's negotiating team.
During the period of negotiations, no statements will be made by the Developer or Agency 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.
Weslagcwpd January 31,2001 -5-
SECTION 4. AGENCY'S RESPONSIBILITIES.
A. Agency Assistance. The Agency shall cooperate fully in providing Developer
with appropriate information and assistance, but such assistance shall not include financial
assistance unless specifically provided herein.
B. Preparation of Agreement. If agreement is reached on the business terms for
inclusion in the agreement, the Agency shall prepare such agreement for consideration by the
Developer. Agency's expenses shall be charged against the Good Faith Deposit.
C. Environmental Quality Act. The Agency will assist Developer in preparing an
environmental impact report or such environmental documentation as may be necessary for
the Project.
D. Zoning. The Agency will undertake all acts necessary to rezone such portions
of the property as may be necessary to permit the Shopping Center on the Site.
E. Grant Funds. The Agency may, but is not required to, apply for financial
assistance for the project from the U.S. Department of Housing & Urban Development and the
California Integrated Waste Management Board or other relevant agencies.
F. Epsteen Remediation. If both parties deem it appropriate to the project, the
Agency may order the owner of the Epsteen parcel to clean up its site, under the powers
granted to the Agency by California Health & Safety Code ("H&SC") § 33459.1(a)(1).
SECTION 5. GOOD FAITH DEPOSIT.
The Developer has previously submitted to the Agency a good faith deposit in the sum
of Fifteen Thousand Dollars ($15,000.00) in the form of a cash deposit, cashier's
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 cashier's
check, it shall be deposited in an interest-bearing account in a bank or trust company selected
by the Agency. 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 against the Deposit deducted as provided herein, shall be returned to the
Developer provided that the Developer has negotiated diligently and in good faith and carried
out its obligations hereunder. If Developer has failed to do so, in as much as the actual
damages which would result from a breach by Developer of its obligations under this
Agreement are uncertain and would be impractical or extremely difficult to determine, Agency
shall be entitled to retain the entire amount of said deposit, as liquidated and agreed damages.
It is further understood that the DDA may require an increase in the good faith upon execution
of the DDA. Notwithstanding the foregoing, the first Five Thousand Dollars ($5,000.00) shall
be non-refundable. In the event, after Midterm Review in Section 2, it is determined to
proceed and prepare a DDA, then, thereafter, the additional Ten Thousand Dollars
($10,000.00) shall be used for the Agency's costs in preparing the DDA. If the Agency
terminates the project at the Review Meeting for any reason, the $10,000 shall be refunded to
the Developer.
Weslagrmpd January 31,2001 -6-
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. 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, engineering studies, memorandums, or similar
documents regarding the proposed development and prepared during the period of
negotiations (except tenant information and proformas), which copies shall become the
property of Agency. Such transfer shall be made without any representation or warranty by
the Developer as to the accuracy or sufficiency of the contents of such documents and shall
be made subject to the rights of the preparers of such documents including, without limitation,
the copyright (if any) associated with such documents.
C. 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.
D. Amendment. This Agreement may only be amended by a document in writing
signed by the parties hereto.
E. Time for Acceptance. This Agreement, when executed by the Developer and
delivered to the Agency, shall constitute a binding offer which cannot be withdrawn prior to
September 30, 2000, so that the Agreement may be presented to the Agency Board.
Notwithstanding any other provision herein to the contrary, Agency shall not be obligated
hereunder unless and until the Agency Board authorizes the Chairperson to execute this
Agreement.
F. 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.
Westagrmpd January 31,2001 -7-
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,
o`� pq orate and Politic
"Vc4i
Chairman
:TES
gency Secretary
APPROVED AS TO FORM:
�-ZT-
Agenno ounsel
[SIGNATURES CONTINUED ON NEXT PAGE]
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Westagr.wpd January 31,2001 _8
"DEVELOPER"
WESTAR ASSOCIATES, INC.
(Check One: _individual, _partnership, !Corporation)
0
(NOTARfZ
Signature
Print Nam Print Titl
(NO ARIZE ]
( Signature
Print Name:
man1=
Print Title:
Mailing Address:
(Corporations require two signatures; one from each of the following: (A) Chairman of Board,
President, any Vice President; AND (B) Secretary, Assistant Secretary, Treasurer, Assistant
Treasurer, or Chief Financial Officer.)
[END OF SIGNATURES / NOTARY JURAT(S) FOLLOW]
Westagrmpd January 31,2001 -9-
STATE OF CALIFORNIA )
) ss.
COUNTY OF09Ad6rE )
ON Ffbr"Inf Ir2-001 before me, marl IVY) ,Notary Public,
personally appeared RDhfrf T 'Re5t
personally known tome )to be the person(-s)
whose name(&) iskare subscribed to the within instrument and acknowledged to me that
hefshm1hey executed the same in his'i�;ei:authorized capacity4a&), and that by hisilheFAhe'
signature(&}on the instrument the person(s�, or the entity upon behalf of which the persor*s)
acted, executed the instrument.
Witness my hand and official seal. [SEAL]
MARILYN J. RUSSELL
l V VlV' Commision#1278793
Signature 0 Notary? rc-Caritorrlia
Orange County
%mvcanrn.E;PrmseP24,2M4r
STATE OF CALIFORNIA )
) ss.
COUNTY OF DI2AM15E)
ON Febru.aiU 21 , 2001 before me, Mof 1IUn T Russell Notary Public,
personally appeared M A r I4 7 P u l m e
personally known to me to be the person(&)
whose name(&) isk-we subscribed to the within instrument and acknowledged to me that
hefs�executed the same in his'"efAhe4 authorized capacity0es), and that by hisA"r their
signature(&) on the instrument the person(&.), or the entity upon behalf of which the person(a)
acted, executed the instrument.
Witness my hand and official seal. [SEAL]
MARILYN J. RUSSELL
-M,a)�;Luyt Cammlssion#1278193 �
Signature v q9Notary Rib'a-Cdffmia
Orange County
by Ca nm.Egik SeP24,2.A4
Westagrmpd January 31,2001 -10-