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HomeMy WebLinkAbout8/7/2002 - STAFF REPORTS (12) DATE: JULY 31, 2002 TO: CITY COUNCIL FROM: DIRECTOR OF COMMUNITY& ECONOMIC DEVELOPMENT RE: OPTION AGREEMENT APPROVAL RECOMMENDATION: It is recommended that the City Council approve an Option Agreement between the City of Palm Springs and Noah Thomas Suitt, Jacqueline Suitt, Aruthur Block and Kathleen Block on the assignment of a sublease of approximately 9.5 acres at the Southeast corner of Amado and Avenida Caballeros, at a cost of$35,000 for a period of six(6) months. BACKGROUND: The City of Palm Springs and Sellers would like to enter into an Option Agreement for a period of six (6) months to negotiate the acquisition of the sublease of approximately 9.5 acres for the purpose of expanding the Convention Center. The site is located at the southeast corner of Amado and Avenida Caballeros. During the period of negotiation the City will determine the feasibility of the site for the expansion of the Convention Center and will commission an MAI appraisal to determine fair market value of the leasehold interest in the site. The Sellers may also commission an appraisal at their expense. If an Agreement is reached for the City to acquire the leasehold the City shall prepare an agreement for consideration by the Sellers. The funds will be allocated in the Convention Center Expansion Capital Fund Account 261-4282-50003. (�AxjGv,z-,,/ J hn R mond irec of Com nity & Economic Development APPROVED . City Manager ATTACHMENT: (1) Minute Order (2) Option Agreement 11A OPTION AGREEMENT THIS OPTION AGREEMENT ("AGREEMENT"), is made this day of 2002, by and between the CITY OF PALM SPRINGS, a municipal corporation and charter city, ("CITY") and NOAH THOMAS SUITT, JACQUELINE SUITT, ARTHUR BLOCK AND KATHLEEN BLOCK (collectively, "SELLER"). RECITA LS The parties entered into this Agreement on the basis of the following facts, understandings, and intentions: A. The City is a Municipal Corporation and Charter City exercising governmental functions and powers and organized under the Law of the State of California and Municipal Charter B. The City desires to purchase the sublease interest in an approximately 9.5 acre site at the southeast corner of Amado Road and Avenida Caballeros ("the Site") to provide for the expansion of its Convention Center property. C. The City and Seller desire, for the period set forth herein, to negotiate diligently and in good faith to prepare an agreement whereby the City would acquire the Site for the purpose of expanding the Convention Center. 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 City and the Seller 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"Assignment") to acquire the sublease interest in 9.5 acres for the purpose of expanding the Convention Center. The assignment of the sublease will be subject to all rules, regulations, standards, and criteria set forth in the City's General Plan, applicable specific plans and zoning regulations, and with this Agreement. B. Site. The Project shall be located upon the following real property, as shown in the "Site Map," attached hereto as Exhibit"A" and incorporated herein by this reference. C. Nature of the Acquisition. The City's interest shall be the acquisition and assignment of a sublease the property, as approved by the City of Palm Springs on November 3, 1993 and September 29, 1999, and approved by the Bureau of Indian Affairs on December 1, 1999. D. Financial Provisions. The City is responsible for acquisition of the Site and financing and constructing all improvements upon the Site. The City shall pay for all necessary public improvements and pay all City fees for processing the Project. E. Property Acquisition. The Sublease interest in the Site is, at the time of execution of this Agreement, owned by Noah Thomas Suitt, Jacqueline Suitt, Arthur Block and Kathleen // 49 at Block. During the period of this Agreement, the City shall negotiate with the Sellers to acquire the Site for the expansion of the Convention Center. The Site is currently divided into two ownerships, 75%owned by Noah Thomas and Jacqueline Suitt,and 25%owned by Arthur Block and Kathleen Block. F. Exclusivity. The City 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 Sellers agree not to negotiate with any other person or entity regarding the development of the Site. This Section does not prevent the City from any design of the Convention Center expansion that does not use the site, nor any acquisition activities of any other property near or adjacent to the Convention Center for the purpose of the expansion. SECTION 2. PERIOD OF NEGOTIATIONS. The period of negotiation shall be six months (six) from the date this Agreement is signed by the City, and this Agreement shall terminate afterthe expiration of such period unless extended as follows: A. For sixty (60) days if an Agreement for Purchase and Sale of Real Property has been prepared by the City and executed by the Seller, or B. For thirty (30) days if the major acquisition terms have been agreed to and the Sellers determine that further negotiations are likely to result in a written agreement; or C. By mutual agreement of the parties. Seller 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 City Council in a public meeting thereon as required by law. SECTION 3. SELLER'S RESPONSIBILITIES. During the period of negotiation, City will prepare such studies, reports, and analysis as shall be necessary to permit the City to determine the feasibility of the site for the expansion of the Convention Center. During the period of negotiation and as requested by the City, the Seller shall submit to the City all information necessary for the acquisition of the Site to meet the City's reasonable requirements, including any environmental studies or soils tests that may be in the Seller's possession. The Seller shall negotiate exclusively with the City's negotiating team and with no other persons unless expressly authorized to do so by the City's negotiating team. During the period of negotiations, no statements will be made by the Seller to the media without the approval of the City's negotiating team. No prepared statements shall be released to the media without the mutual consent of the respective negotiating teams. SECTION 4. CITY'S RESPONSIBILITIES. A. Preparation of Agreement. If Agreement is reached on the acquisition terms for 11 ,4 inclusion in the agreement, the City shall prepare such agreement for consideration by the Seller and City shall bear such expenses. B. Zoning. The City will undertake all acts necessary in securing necessary permits as may be necessary to permit the development at the Site. SECTION 5. GOOD FAITH DEPOSIT. Concurrently with the execution of this Agreement, City shall submit to the Seller a good faith deposit in the sum of Thirty Five Thousand Dollars($35,000.00)in the form of a cash deposit, cashiers' check, irrevocable letter of credit, or other form of security acceptable to the Seller to ensure that the City will proceed diligently and in good faith to negotiate and perform all of the City's obligations under this Agreement. The Good Faith Deposit is non-refundable except in the case of a breach or default of this Agreement by the Seller. SECTION 6. MISCELLANEOUS. A. Brokerage commission. No Brokers have been retained by either party and both parties agree no commission is payable under this Agreement. B. Appraisal of Properties. The Seller has offered the City a price of$3,000,000 for the acquisition of the sublease of the Site. The City has not at the execution of this Agreement determined whether such amount represents a fair market value for the leasehold interest. However, the Site shall be conveyed at fair market value based on an MAI appraisal, but in no event more than $3,000,000. The City shall commission such appraisal, which shall be paid by the City. Should the appraised value exceed the offering price, the City shall have the right to withdraw from this Agreement without penalty. Should the appraised value come in below the offering price, the Seller shall have the right to withdraw from this Agreement without penalty. The Seller shall have the right to commission an MAI appraisal, at their expense, separate from the City. 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 City 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 Seller and delivered to the City, shall constitute a binding offerwhich cannot be withdrawn prior to August 15, 2002 so that the Agreement may be presented to the City Council. Notwithstanding any other provision herein to the contrary, City shall not be obligated hereunder unless and until the City Council authorizes the City Manager 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 II JllI 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. G. Other Agency Approvals. The Bureau of Indian Affairs (BIA), maybe required to review the land lease for the site. If the BIA does not agree to the price and terms of the Sublease of the Site by the City the City has a right to withdraw from the Agreement without further penalty. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day first above written. "CITY" THE CITY OF PALM SPRINGS, a Municipal Corporation and Charter City City Manager ATTEST: City Clerk APPROVED AS TO FORM: City Attorney [SIGNATURES CONTINUED ON NEXT PAGE] JI 150 29-307 508-07 T. C.A. ON-003 rX/S MAP /3 FOR sneer I f 2 0/I452 S112 NE114 SEC 14 T.4S.R-4E. ASSESSMENT PURPOSES ONLY ?A-kLL 06 _ Je-ems I9f "9 "ADO _ _- �mY rr•ronr�.___�AO ___ ' rR•a» f I r JSf Ia.JJ-YS I �I /r MO• I I M/ LOT/ P/ r PM I I •. • �7� �/ CM ! Q 6.53 ACNT GOVT LOT GOVT LOT I GOVr LOT I GOVT. LOT/57 /55 /56 /54 y (494/ (4-9s) (4.97/ ®EX (49)I `I• .. Z17 I 2J! ' 1.73 All Z 9ME H9-Si46 Q 0 ®PI I I A r. OPu I I3I 05 V f.J:c L P !6 i ` @ C.M : <ASRrr 50 6/5ACNr PAR / I O2 .� r4A afar! 9Jr. O J I J Z )L.1 0/l-OSL NllII ryr M•i P tff f' 1 . Is tour LOT 4. sour LOT tour cor f^ cv/F LOT Govr. 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CAW.31/91-97 !0 4pr r ro,n R/9/0/1/r GLO r.r r n.0 ASSESSOR'S MAP BX. 508 P6.07 vN a M.Jr RIVERS/OE MINTY CALIF. nat /r rf nFf. /9RR IM EXHIBIT "B" LEGAL DESCRIPTION OF SUBLEASE PROPERTY The real property located in the City of Palm Springs, State of California, being a portion of Section 14, Township 4 south , Range 4 east, San Bernardino Meridian (SBM), described as follows: PARCEL I: Blocks 217 and 218 PARCEL 2: Beginning at the center of said Section 14; thence north 00 08'06" west a distance of 658.29 feet; thence north 89' 52'51" east 50.00 feet to the true point of beginning; thence north 89' 52'51" east a distance of 279.38 feet; thence south 00 07'46" east a distance of 607.88 feet; thence south 89' 48'37" west a distance of 48.00 feet; thence north 0° 07'46" west a distance of 567.94 feet; thence south 89' 52'51" west a distance of 211.37 feet to a point tangent to a curve concave to the southeast and having a radius of 20.00 feet; thence southwesterly along said curve through a central angle of 90' 00'57" an are distance of 31.42 feet; thence north 0° 08'06" west a distance of 60.01 feet to the true point of beginning, comprising 0.89 acres more or less. Parcels 1 and 2 above are also known and described as follows: PARCEL A (BLOCK 217): The west half of the northwest quarter of the southwest quarter of the northeast quarter of Section 14, Township 4 South, Range 4 East, San Bernardino Base and Meridian; Excepting therefrom that portion conveyed to the City of Palm Springs for street right-of-way purposes recorded as Instrument No. 18910 of Official Records of Riverside County, California, on February 26, 1969; Also excepting therefrom that portion conveyed to the City of Palm Springs for street right-of-way purposes approved by the U.S. Bureau of Indian Affairs and added to the City of Palm Springs Street System May 25, 1960, by City of Palm Springs Resolution No. 5855 and assigned City Deed No. 368. KADATA\B\BLOCK\11832.1\ASSIGN.DLR\10499\258 PM EXHIBIT "B" PARCEL B (BLOCK 218): The east half of the northwest quarter of the southwest quarter of the northeast quarter of Section 14, Township 4 South, Range 4 East, San Bernardino Base and Meridian; Excepting therefrom that portion conveyed to the City of Palm Springs for street right-of-way purposes recorded as Instrument No. 18910 of Official Records of Riverside County, California, on February 26, 1969. '" -- -- K\DATMB\BLOCKU 1832 I\ASSIGN DLR\10499U:58 PM EXHIBIT «B» MINUTE ORDER NO. APPROVING AN OPTION AGREEMENT BETWEEN THE CITY OF PALM SPRINGS AND NOAH THOMAS SUITT, JACQUELINE SUITT, ARTHUR BLOCK AND KATHLEEN BLOCK IN THE AMOUNT OF $35,000.00 IN A FORM ACCEPTABLE TO THE CITY ATTORNEY FOR THE ASSIGNMENT OF A SUBLEASE OF APPROXIMATELY 9.5 ACRES. I HEREBY CERTIFY that the Minute Order approving an Option Agreement between the City of Palm Springs and Noah Thomas Suitt, Jacqueline Suitt, Arthur Block and Kathleen Block in the amount of $35,000.00, in a form acceptable to the City Attorney, for the Assignment of approximately 9.5 acres was adopted by the City Council of the City of Palm Springs, California, in a meeting thereof on the 31"of July, 2002. PATRICIA A. SANDERS City Clerk