HomeMy WebLinkAbout12/5/2001 - STAFF REPORTS DATE: DECEMBER 5, 2001
TO: COMMUNITY REDEVELOPMENT AGENCY
FROM: DIRECTOR OF REDEVELOPMENT
APPROVAL OFAN EXCLUSIVE AGREEMENT TO NEGOTIATE WITH PHILLIP CLEARYON
TWO PARCELS AT THE SOUTHWEST CORNER OF NORTH PALM CANYON DRIVE AND
STEVENS ROAD
RECOMMENDATION:
It is recommended that the Agency approve the Exclusive Agreement to Negotiate with
Phillip Cleary ("Developer') on a property consisting of two parcels totaling 1.75+ acres
at the southwest corner of North Palm Canyon Drive and Stevens Road, in Merged
Project Area#1, formerly the North Palm Canyon Project Area (#6), for a mixed use
commercial/residential project.
BACKGROUND:
Community Redevelopment Agency staff have negotiated for the past several
months with Phillip Cleary of San Marcos, California on the City- and Agency-
owned parcels at Stevens Road and North Palm Canyon Drive (the Casa del
Camino and Reservoir Parcels). The developer wants to build a high-end mixed
use commercial/residential project on the site. He also is considering the adjacent
33,000 s.f. parcel and adjacent 15,000 + s.f. parcel to the south to assemble
enough land to increase the size and scale of his project, as well as to provide
additional room for parking and access required by code.
The Reservoir Parcel was acquired by the City of Palm Springs in 1997 from the
O'Donnell Golf Club as part of a financial settlement. The Casa del Camino parcel,
owned by the Community Redevelopment Agency, was acquired in 1987 as part of
the abatement of a deteriorated hotel property.
Although the Developer has offered $400,000 for the City- and Agency-owned
parcels, which is considered to be a fair market price for the land, an MAI appraisal
will confirm that the price of the City- and Agency-owned parcels is indeed "fair
market"; an appraisal will also determine the offer to be made on the private
parcels. By a separate action, the City will convey the Reservoir parcel to the
Agency for inclusion in the final Disposition and Development Agreement as
Agency-owned property. The net sale proceeds, however, will be shared by the
City and the Agency based on the respective value of the two (2) parcels.
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The Exclusive Agreement is for a period of six months, during which staff will
negotiate a Disposition and Development Agreement with the developers. The
Agency Counsel's office has already begun drafting this agreement. In addition,
the developers, upon execution of this agreement, will make a deposit to the
Agency sufficient to cover the Agency's legal cost in preparing the DDA. The
Developer will also bear the cost of the appraisal of the two properties, prior to the
final negotiation of the DDA.
This project could be an excellent addition to the North Palm Canyon Drive
neighborhood in the Uptown area.
% JOHNS. AYMO D
`Direct/ f Redevelo ment
APPROVED
Executive Dir ctor
ATTACHMENTS:
1. Resolution
2. Exclusive Agreement to Negotiate
EXCLUSIVE AGREEMENT TO NEGOTIATE
Phillip Cleary
THIS EXCLUSIVE AGREEMENT TO NEGOTIATE ("AGREEMENT") , is made this day of
, 2001, by and between the PALM SPRINGS COMMUNITY
REDEVELOPMENT AGENCY("AGENCY"), and PHILLIP CLEARY("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 seq.).
B. The Agency desires to effectuate the Redevelopment Plan for Merged Project Area#
1, Redevelopment Project Area No. 6 (North Palm Canyon), by providing for the development of a
mixed use commercial/residential project at the southwest corner of Stevens Road and North Palm
Canyon Drive ("the Site").
C. The Developer desires to construct a mixed use 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 setforth herein,to negotiate diligently
and in good faith to prepare an agreement whereby the Developer would develop such a mixed use
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")consistentwith the provisions of this Agreement forthe development of a mixed use 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 thefollowing real property,as shown in the"Site
Map," attached hereto as Exhibit"A"and incorporated herein by this reference. The Site is currently
divided into two ownerships, the Community Redevelopment Agency and the City of Palm Springs,
herein designated as the "Casa del Camino Parcel"and the "Reservoir 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
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shall work with the City's design guidelines to create a harmonious and attractive mixed use
commercial/residential project with a distinct identity. The Developer is responsible for financing and
constructing all improvements upon the Site. The commercial/residential project shall consist of at least
15 condominiums and a minimum of 10,000 square feet of commercial space. The Site will be subject
to a declaration of covenants, conditions, and restrictions to govern the continued operation of the
commercial space and condominiums.
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 commercial/residential project by
December 31, 2003. The DDA shall contain a Schedule of Performance.
F. Use and Transfer Restrictions. The DDA will generally be subjectto 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 commercial/residential project, (ii) to
prevent speculation, (iii)to assure that any transferee has the resources,capability and experience to
successfully develop the project,(iv)to assure long-term maintenance of the residential and commercial
projects in attractive condition, and (iv) to provide an adequate financial return to the Agency.
G. Property Acquisition. The Reservoir Property is, at the time of execution of this
agreement, owned by the City of Palm Springs. During the period of this Agreement, the City shall
convey the parcel to the Community Redevelopment Agency, to allow both parcels to be covered by
the Disposition and Development Agreement between the Agency and the Developer.
H. Exclusivity. 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
Developer agrees not to negotiate with any other person or entity regarding the development of a
commercial/residential project within the territorial jurisdiction of Palm Springs or within 3 miles of the
boundary thereof without the approval of Agency.
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
by the 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
C. By mutual agreement of the parties.
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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, Developerwill prepare such studies, reports,and analysis as
shall be necessary to permit Developerto determine the feasibility of the commercial/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 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. Statementof 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. 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 Developer's
reasonable requirements. In addition, Developershall take all actions necessary to obtain construction
and permanent financing.
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 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 for inclusion
in the agreement, the Agency shall prepare such agreement for consideration by the Developer.
Agency's expenses shall be chargeable against the Good Faith Deposit.
B. Zoning. The Agency will undertake all acts necessary to rezone such portions of the
property as may be necessary to permit the commercial/residential development at the Site.
SECTION 5. GOOD FAITH DEPOSIT.
Concurrently with the execution ofthisAgreement,Developershall submitto theAgency 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 otherform 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
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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, 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 will require an increase in the good faith upon execution of the DDA. The aggregate good faith
deposit then required shall be at least Ten Thousand Dollars ($10,000,00).
SECTION 6. MISCELLANEOUS.
A. Brokerage commission. The Agency has retained the services of Group One Realty
(`Broker") during the negotiation of this agreement. The Agency has agreed to pay the Broker the
agreed-upon commission, perthe brokerage agreement, if this Developer acquires the property from
the Agency. The commission shall be paid on a pro rata basis by the City and Agency if the parcels
remain under separate ownership upon closing.
B. Appraisal of Properties. The Developer has offered and the Agency has accepted a
price of $400,000 for the two properties, based on a previous listing for the property. It is the
understanding of both parties that this amount represents a fair market price for the parcels. Upon the
successful negotiation of a Disposition and Development Agreement between Agency and Developer,
however, both properties shall be conveyed at fair market value based on an MAI appraisal. Agency
shall commission such appraisal,which shall be paid from the Good Faith Deposit described in Section
5. Should the appraised value exceed the offering price, Developer shall have the right to withdraw
from this Agreement without penalty.
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 subject to 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.
F. Time forAcceptance. This Agreement,when executed by the Developer and delivered
to the Agency, shall constitute a binding offer which cannot be withdrawn prior to December 31,2001,
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 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.
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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
[SIGNATURES CONTINUED ON NEXT PAGE]
00 q--8,
"DEVELOPER"
PHILLIP CLEARY.
(Check One: _individual, _partnership, _corporation)
[NOTARIZED]
Signature
Print Name:
Print Title:
[NOTARIZED]
Signature
Print Name:
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,AssistantTreasurer,
or Chief Financial Officer.)
[END OF SIGNATURES/NOTARY JURAT(S) FOLLOW]
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STATE OF CALIFORNIA )
) ss.
COUNTY OF )
ON before me, Notary Public,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/theirauthorized capacity(ies),and that by his/her/theirsignature(s)on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal. [SEAL]
Signature
STATE OF CALIFORNIA )
) ss.
COUNTY OF )
ON before me, Notary Public,
personally appeared
personally known to me (or proved to me on the basis of satisfactory evidence) to be the person(s)
whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies),and that by his/her/theirsignature(s)on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal. [SEAL]
Signature
G"fLrr 19-/0
EXHIBIT"A"
TO EXCLUSIVE AGREEMENT TO NEGOTIATE
LEGAL DESCRIPTION OF THE PROPERTY
RESERVOIR PARCEL. 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:
THAT PORTION OF THE NORTHEAST QUARTER OF THE NORTHEAST QUARTER OF
SECTION 10, TOWNSHIP 4 SOUTH, RANGE 4 EAST, SAN BERNARDINO BASE AND
MERIDIAN ACCORDING TO THE OFFICIAL PLAT OF SAID LAND, DESCRIBED AS FOLLOWS:
COMMENCING AT THE NORTHEAST CORNER OF SAID SECTION 10; THENCE SOUTH 89'
51' WEST, 353.00 FEET TO THE CENTERLINE OF THE COUNTY HIGHWAY; THENCE SOUTH
ON THE CENTERLINE OF THE COUNTY HIGHWAY, 700.13 FEET; THENCE SOUTH 890 50'
WEST, 30.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 890 50' WEST,
205.88 FEET; THENCE SOUTH 00° 10' EAST, 211.88 FEET; THENCE NORTH 89° 50' EAST,
205.30 FEET MORE OR LESS TO THE WESTERLY LINE OF SAID COUNTY HIGHWAY;
THENCE NORTH ON SAID WESTERLY LINE OF THE COUNTY HIGHWAY, 211.88 FEET MORE
OR LESS TO THE TRUE POINT OF BEGINNING.
CASA DEL CAMINO PARCEL. PARCEL 1: LOT 12 IN BLOCK"A" OF LAS PALMAS ESTATES,
AS SHOWN BY MAP ON FILE IN BOOK 15 AND 16 OF MAPS, RECORDS OF RIVERSIDE
COUNTY, CALIFORNIA.
PARCEL 2: ALL THAT PORTION OF LOTS 5 AND 6 IN BLOCK"A" OF LAS PALMAS ESTATES,
AS SHOWN BY MAP ON FILE IN BOOK 15 PAGES 15 AND 16 OF MAPS, RECORDS OF
RIVERSIDE COUNTY, CALIFORNIA, MORE PARTICULARLY DESCRIBED AS FOLLOWS:
BEGINNING AT THE MOST EASTERLY CORNER OF SAID LOT 5; BEGINNING ALSO AT THE
MOST NORTHERLY CORNER OF SAID LOT 6; THENCE SOUTH 89° 50' WEST, ALONG THE
BOUNDARY LINE OF SAID LOT 5, 35.77 FEET; THENCE IN THE SOUTHWESTERLY
DIRECTION, TO A POINT ON THE NORTHERLY LINE OF CAMINO DEL NORTE, 5 FEET
SOUTHEASTERLY FROM THE NORTHWESTERLY CORNER OF SAID LOT 6; TO THE
SOUTHWESTERLY CORNER OF SAID LOT 6; THENCE EASTERLY, ALONG THE SOUTHERLY
LINE OF SAID LOT 6, TO THE SOUTHEASTERLY CORNER OF SAID LOT; THENCE
NORTHERLY, ALONG THE EASTERLY LINE OF SIAD LOT 6, TO THE POINT OF BEGINNING.
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RESOLUTION NO.
OF THE COMMUNITY REDEVELOPMENT
AGENCY OF THE CITY OF PALM SPRINGS,
CALIFORNIA, APPROVING AN EXCLUSIVE
AGREEMENT TO NEGOTIATE WITH PHILLIP
CLEARY OF SAN MARCOS, CALIFORNIA FOR
THE DEVELOPMENT OF A MIXED USE
COMMERCIAL/RESIDENTIAL PROJECT IN
MERGED PROJECT AREA #1, FORMERLY THE
NORTH PALM CANYON REDEVELOPMENT
PROJECT AREA (AREA #6)
WHEREAS the Community Redevelopment Agency is responsible for eliminating blight
within the North Palm Canyon Redevelopment Project Area; and
WHEREAS in the project area are two blighted vacant parcels, one acquired by the
Community Redevelopment Agency in a nuisance abatement action of a dilapidated hotel,
and another a former irrigation reservoir; and
WHEREAS Phillip Cleary of San Marcos, California has requested the Agency to enter into
an Exclusive Agreement to Negotiate on the parcels while he negotiates a Disposition &
Development Agreement with the Agency to acquire the Agency-owned parcels, and work to
assemble the two adjacent 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
Phillip Cleary, in a form approved by the Agency Counsel, is hereby approved.
ADOPTED this day of , 2001.
AYES:
NOES:
ABSENT:
ATTEST: COMMUNITY REDEVELOPMENT AGENCY
OF THE CITY OF PALM SPRINGS, CALIFORNIA
By
Assistant Secretary Executive Director
REVIEWED & APPROVED AS TO FORM
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