HomeMy WebLinkAboutA4211 - GARDEN SPRINGS APARTMENTS INDEMNITY LOW INCOME HOUSING R 19769 • • Garden Springs Apartments
Indemnity Agreement
AGREEMENT #4211
R19769, 4-5-00
INDEMNITY AGREEMENT -
TINS INDEMNITY AGREEMENT ("Agreement")is made as o j 2000 by
and between GARDEN SPRINGS APARTMENTS, a California limited partnership ("GSA"),
having its principal place of business at 1010 Racquet Club Drive, Suite 103, Auburn, CA 95603,
and THE CITY OF PALM SPRINGS ("City"), a public body, corporate and politic, 3200 Tahquitz
Canyon Way, Palm Springs, CA 92262.
RECITALS
A. WHEREAS, GSA is the proposed developer of the Garden Springs Apartments
("Project"),a 60 unit apartment complex to be located at the south east corner of Indian Canyon and
San Rafael in Palm Springs; and
B. WHEREAS, GSA has agreed that all units in the Project will be occupied by low and
moderate income households for a period of not less than 55 years pursuant to the requirements of
Internal Revenue Code Section 42,and,therefore,pursuant to California Government Code Section
65915, the City is obligated to grant to GSA a density bonus of not less than 25% and at least one
other incentive, such as an adjustment in site development requirements; and
C. WHEREAS,GSA submitted to the City an application for Planned Development District,
Case Number 5.0805-PD 255 ("PDD"), which PDD requests a density bonus of less than 16% and
an adjustment in certain site development requirements; and
D. WHEREAS,pursuant to its obligatioaunderCaliFomiaGovennnent Code Section 65915,
on January 19, 2000, the City approved the PDD; and
E. WHEREAS, a group of Palm Springs residents opposed to the Project because it is an
affordable housing project have submitted a petition ("Petition") for a referendum which would
repeal the City's approval of the PDD ("Referendum"); and
F. WHEREAS, the City has determined that the Petition fails to state a proper subject for
a referendum in that it impermissibly attempts to overturn an adjudicative action of the City; is
contrary to state laws, including but not limited to state statutes regarding affordable housing, an
area in which the state has occupied the field; and is contrary to the City's General Plan; and
G. WHEREAS,finding that the Petition fails to state a proper subject for a referendum,the
City finds that the Petition is invalid, and the City further finds that it is in the best interests of the
public and the City to avoid placing an invalid referendum on the ballot; and
H. WHEREAS,both the City and GSA acknowledge that if the City determines not to place
the Referendum on the ballot as demanded by the Petition, the City is exposed to suit fxom the
proponents of the Petition; and
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I. WHEREAS,pursuant to the conditions of approval for the PDD, GSA,has an obligation
to indemnify and defend the City from any claims, costs, or liabilities arising because of the City's
approval of the Project and the PDD.
NOW,THEREFORE,for good and valuable consideration,the receipt and legal sufficiency
of which is hereby acknowledged, GSA hereby agrees, covenants, represents and warrants for the
benefit of the City as follows:
1. Indemnity. In the event that the City finds that the Petition fails to state a proper subject
for a referendum and therefore decides not to place the Referendum; and if the City is therefore
subject to suit seeking to overturn that decision or seeking other relief as the result of that decision,
then GSA hereby agrees to pay,guaranty,protect,defend and hold City harmless and indemnify City
from and against any and all suits, actions, proceedings, claims, damages, losses, liabilities and
expenses (including, without limitation, reasonable attorneys' fees actually incurred by the City
pursuant to this Agreement as well as any attorneys' fees which may be imposed against the City in
the event that the Referendum proponents prevail in a lawsuit) (collectively the "Cosa"), resulting
from, due to, or caused by the City's decision not to place the Referendum on the ballot. Except as
expressly provided herein, GSA hereby agrees that its obligations hereunder shall be continuing,
absolute and unconditional under any and all circumstances and are not subject to any reduction,
limitation, impairment, termination, defense, set-off, counterclaim in recoupment whatsoever.
2. Indemnification Procedure.
a. In the event that the City receives service of any claim or lawsuit("Claim")arising
directly or indirectly from the City's decision not to place the Referendum on the ballot,then the City
shall within three (1)business day,provide to GSA a copy of any such Claim. Within five(5) days
of receipt of notice of such Claim, GSA shall advise the City of the identity of the counsel GSA
intends to engage for said defense("GSA Counsel"),which counsel shall be reasonably acceptable
to the City. The City shall have the right to engage separate counsel ("City Attorney")to the extent
necessary to assure the City that its rights are adequately protected in the defense of any Claim,
provided however, that GSA shall be obligated to bear the cost of at most only one such law firm
to act as separate counsel. GSA shall pay all fees and costs billed by the GSA Counsel. In addition
to payment of all fees and costs billed by the GSA Counsel, upon demand, GSA shall also pay, or
in the sole discretion of the City, reimburse the City for the payment of any Costs incurred by the
City in connection with the defense of any Claim,including without limitation,reasonably attorneys'
fees actually billed by the City Attorney in connection with the defense of any Claim-
b. It is generally anticipated that GSA Counsel shall have the lead Mth respect to
evaluating,responding and conducting the litigation,but ultimately the City retains the right to make
independent decisions and shall not be bound by the advice or actions of GSA.. The City retains the
right to settle or abandon the action, provided that at least five (5) days notice of such proposed
action is given to GSA and further provided that should such action be taken by City against the
wishes of GSA,GSA shall have no further obligation to reimburse the City's legal e\penses nor shall
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GSA have any further indemnity obligation, although GSA shall have no right to recover sums
already paid on the City's behalf. Moreover, in such event, GSA's waiver of claims pursuant to
Paragraph 3 herein shall be revoked. In the event the matter is prosecuted to judgment in the trial
court,and the judgment is against GSA and the City,the City shall have no obligation to appeal,and
should the City decline to do so, GSA's indemnity obligation shall remain in full force and effect,
and the waiver of claims pursuant to Section 3 herein shall remain in full force and effect. The
foregoing notwithstanding,nothing contained herein shall be interpreted as limiting GSA's right,as
real party in interest,to appeal any adverse judgment even though the City may decline to do so.
c. All Costs shall be immediately reimbursable to the City when and as incurred and,
in the event of any litigation, claim or other proceedings,without any requirement of waiting for the
ultimate outcome of such litigation, claim or other proceedings. GSA shall pay to the City any and
all Costs within thirty(30)days after its receipt of written notice from the City itemizing the amounts
thereof incurred to the date of such notice. In addition to any other remedy available for the failure
of GSA periodically to pay such Costs, such Costs, if not paid within said thirty (30) day period,
shall bear interest at the rate of 10%per annum from the date incurred until the date they are paid
in full by GSA to the City.
In the course of any litigation or proceeding which is the subject of GSA's indemnity
obligation tinder the terms of this Agreement, if the City is awarded attorneys' fees and costs, then
such award shall first be used io pay any then unreimbursed Costs,and the remaining balance of any
such award of attorneys' fees and costs to the City shall be and is hereby assigned to GSA to
reimburse GSA for the cost of defending any Claim on behalf of the City and itself.
3. Waiver of Claims. GSA has contended that it must complete the Project by December
31, 2000 in order to qualify for certain federal tax credits and that it will suffer monetary damages
if it does not complete the Project by that time. In consideration for the City's agreements and
actions under this Agreement, GSA hereby waives and releases any claims or causes of action
against the City,whether known or unknown,based upon the contention that any act or omission of
the City occurring prior to the effective date of this Agreement caused or contributed to any delay
in completing the Project. In furtherance of GSA's intention to waive such claims, GSA expressly
waives any rights or benefits conferred by the provisions of Civil Code §1542, which provides as
follows: "A general release does not extend to the claims which the creditor does not know or
suspect 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." GSA acknowledges and represents it
has consulted with legal counsel before executing this Agreement and that it understands its
meaning,including the effect of Civil Code§1542,and expressly consents that this Agreement shall
be given full force and effect according to each and every express term and protiision_
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4. Miscellaneous.
a. Remedies for Default. In the event that either party breaches its obligations
hereunder, then the non-breaching party shall be entitled to pursue, in addition to any remedies
specifically set:Forth herein,any and all other remedies available at law or in equity for such breach.
b. Successive Actions. A separate right of action hereunder shall arise each time the
City acquires knowledge of any matter indemnified or guaranteed by GSA under this Agreement.
Separate and successive actions may be brought hereunder to enforce any of the provisions hereof
at any time and from time to time. No action hereunder shall preclude any subsequent action, and
GSA hereby waives and covenants not to assert any defense in the nature of splitting of causes of
action or merger of judgments.
c. Notice. All notices under this Agreement shall be in writing and delivered to each
party at the address set forth above or, in the event of a change in any address or fax number, then
to such other address or fax number as to which notice of the change is given. Copies of all notices
sent to the parties hereunder shall also be sent to the parties' respective attorneys as directed in
writing by the parties.
d. Amendment and Waiver. This Agreement may be amended only by an instrument
in writing signed by both of the parties hereto, and no provision of this Agreement and no right or
obligation of either party under this Agreement may be waived except by an instrument in writing
signed by the waiving party.
e Governing Law. This Agreement shall be governed by the laws of the State of
California_
f. Section IIeadings. Section headings are for convenient reference only and shall
not affect the meaning or have any bearing on the interpretation of any provision of this Agreement.
g. Attorneys' Fees. In the event that either party breaches its obligations hereunder,
then the non-breaching party shall be entitled to recover any fees and costs, including without
limitation, reasonably attorneys' fees, incurred by the non-breaching party to enforce its rights
hereunder.
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IN WITNESS WHEREOF, Aris Agreement has been executed and is effective as of
the date first written above.
GARDEN SPRINGS APARTMENTS, a
California limited partnership
By:
Edward Mackay, General Partner
THE CITY OF PALM SPRINGS
$y:
City_Manager
Attest
City Clerk
APPROVED AS TO FORM: APPRG'VED BY THE 0TY C-C)U CIL
BY us. No.
Ru , Tucker, Attorneys for
The City of Palm Springs
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