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HomeMy WebLinkAbout1992-291 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 RESOLUTION NO. 92-291 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING AND DIRECTING THE EXECUTION OF AMENDMENT NO. 1 TO "OWNER PARTICIPATION AND DEVELOPMENT AGREEMENT" AND "CONVENTION CENTER SUBLEASE AND OPERATING AGREEMENT" WHEREAS, the Redevelopment Agency of the ci ty of San Bernardino (the "Agency") and the city of San Bernardino (the "city") have previously entered into certain agreements with Maruko, Inc. (the "Redeveloper") for purposes of undertaking and completing a redevelopment project involving the construction of a certain hotel adjacent to the Convention Center, as well as the operation of the Convention Center (the "Project"), located within the Central City Redevelopment Project Area (the "Project Area"); and WHEREAS, the Redeveloper of the Project has submitted to the Agency and to the City evidence that the Redeveloper has encountered unexpected financial difficulties in the operation of the Project as the result of general economic conditions, necessitating the filing of a bankruptcy proceeding, and that the continued operation of the Project requires City and Agency assistance; and WHEREAS, the continued operation of the Project is in the public interest in that the Project represents the redevelopment of real property in the Project Area, pursuant to the Community Redevelopment Law of the State of California, has aesthetically improved real property within the Project Area, has - 1 - 1 created employment opportunities for residents of the City both 2 within and outside of the Project Area, has eliminated blight, 3 has enhanced real property values in the Project Area and has and 4 will generate sales tax revenues, property tax increment revenues 5 and transient occupancy tax revenues; and 6 7 WHEREAS, the execution of the proposed amendment to the 8 agreements between the parties thereto would provide assistance 9 to the Redeveloper by advancing at an earlier time certain sums 10 which would otherwise be due, under the prior agreements between 11 the parties, to the Redeveloper over an extended period of time, 12 while providing consideration to the City and Agency for so 13 doing; and 14 15 WHEREAS, it is reasonable and appropriate to approve 16 and cause the execution of an amendment to the various agreements 17 pertinent to the Project. 18 19 NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND COMMON 20 COUNCIL OF THE CITY OF SAN BERNARDINO, AS FOLLOWS: 21 22 SECTION 1. The Mayor and Common Council hereby approve 23 that certain Amendment No. 1 to "Owner Participation and 24 Development Agreement" and "Convention Center Operating 25 Agreement" (the "Amendment") by and among the City, the Agency 26 and the Redeveloper, substantially in the form and content as set 27 forth in Exhibit "A" attached hereto and incorporated herein by 28 reference. In recognition of the pending bankruptcy proceeding - 2 - 1 and the necessity to obtain approval of the trustee in bankruptcy 2 and the Court, the Mayor is hereby authorized and directed to 3 execute the Amendment for and on behalf of the City after 4 necessary approvals have been obtained from the trustee in 5 bankruptcy and the Court. 6 7 SECTION 2. Recognizing the need for further 8 possible negotiation of the terms and conditions of the Amendment 9 in order to obtain the concurrence of the Redeveloper's 10 bankruptcy counsel, the trustee in bankruptcy and the Court, 11 revisions to the Amendment may be made after the adoption of this 12 Resolution, providing (i) such changes do not alter the basic 13 intent of the Amendment and (ii) such changes are approved by the 14 Mayor and City Attorney. 15 II! 16 III 17 III 18 III 19 III 20 III 21 III 22 III 23 III 24 III 25 III 26 III 27 III 28 III - 3 - 1 2 3 4 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AUTHORIZING AND DIRECTING THE EXECUTION OF AMENDMENT NO. 1 TO "OWNER PARTICIPATION AND DEVELOPMENT AGREEMENT" AND "CONVENTION CENTER SUBLEASE AND OPERATING AGREEMENT" SECTION 3. The findings and determinations herein 5 shall be final and conclusive. This Resolution shall take effect 6 upon the date of its adoption. 7 8 I HEREBY CERTIFY that the foregoing Resolution was duly 9 10 11 adopted by the Mayor and Common Council city of of the regular meeting San Bernardino at a 20th day of July thereof, held on the 12 1992, by the following vote, to wit: 13 14 15 16 17 18 19 20 21 22 23 Council Members: AYES NAYS ABSTAIN ABSENT ESTRADA X REILLY X HERNANDEZ ---X..- MAUDSLEY X MINOR ---L- POPE-LUDLAM X MILLER X ~~r~ l this The foregoing day of July resolution is , 1992. hereby 21st 7 ~~/ May r San B 24 Approved as to form and legal 25 JAMES F. PENMAN 26 City~ttorney I/J By: v~<4.. ) ./ 27 content: 88OOl00011DOC1589 28 - 4 - (Approved .per City of Sn Bdno Res 92':'291. adopted 7/20/92 SBEO\OOOl \DOC\S87 8\26\92 130 df AMENDMENT NO. 1 TO "OWNER PARTICIPATION AND DEVELOPMENT AGREEMENT" AND "CONVENTION CENTER SUBLEASE AND OPERATING AGREEMENT" This Amendment No.1 (the" Amendment") is entered into as of the 2'~ day of (I~,= ' 1992, by and among the City of San Bernardino (the "City"), the Redevel ment Agency of the City of San Bernardino (the "Agency") and Maruko, Inc. (the "Redeveloper"), as the Parties to the "Owner Participation and Development Agreement" (the "OP&DA") and by and between the City and the Redeveloper, as the Parties to the "Convention Center Sublease and Operating Agreement (the "Operating Agreement"). RECITALS WHEREAS, the City, the Agency and the Redeveloper entered into a certain Owner Participation and Development Agreement whereby the Redeveloper was to construct and operate a hotel, and the City and the Redeveloper entered into a certain Convention Center Sublease and Operating Agreement whereby the Redeveloper was to sublease and operate the Convention Center facilities in conjunction with its hotel operations; and WHEREAS, the hotel was constructed and has been operated by the Redeveloper in conjunction with the Convention Center facilities; and WHEREAS, the Redeveloper has encountered severe financial difficulties as a result of general economic conditions, which difficulties have necessitated the filing of a bankruptcy proceeding by the Redeveloper; and WHEREAS, the Redeveloper has demonstrated to the City and the Agency that financial assistance to the Redeveloper is necessary if the operation of the hotel, and the related operation of the Convention Center facilities by the Redeveloper, is to continue; and WHEREAS, the City and the Agency deem it to be in the public interest that the operation of the hotel and Convention Center continue without interruption. NOW, THEREFORE, the parties hereto agree as follows: TERMS 1. Any terms not defined herein shall have the meanings as provided in the OP&DA or Operating Agreement, whichever is applicable. 2. The Redeveloper hereby acknowledges receipt of a cash amount equal to $400,000 on the date of execution of this Amendment as an advance Payment for $860,000 of -1- taxes pursuant to the OP&DA which payment is made subject to the terms of this Amendment. The Redeveloper, City and Agency agree that such $400,000 cash payment to the Redeveloper is a fair and equitable present value determination of such $860,000 advance Payment of Taxes based upon a commercially reasonable discount factor and a probable time period of the receipt of such future Payments. Upon receipt by the Redeveloper of such $400,000 present value cash amount, the Redeveloper shall immediately remit an amount equal to $7,500 to the Agency for reimbursement to the Agency of staff, legal and consultant costs and expenses incurred in the preparation and negotiation of this Amendment. The Redeveloper further acknowledges that the Agency's obligation under the OP&DA to remit $3,000,000 in Payments to the Redeveloper has been reduced by the amount of such $860,000 advance Payment hereby received in addition to such other amounts of Payments equalling approximately $452,170 as previously received by the Redeveloper since the Commencement Date for the period ending June 30, 1992. 3. The Redeveloper and the Agency recognize and agree that certain capital improvements may be desirable to the portion of the hotel that fronts along "E" Street. Such capital improvements as may be hereafter identified shall be intended to improve the appearance of the hotel and to allow for pedestrian traffic to identify the amenities contained in the hotel. The Redeveloper and the Agency shall negotiate in good faith as to the nature of such capital improvements, the funding source and the time period within which to complete the construction of such capital improvements. 4. Section 2.10 of the OP&DA is amended to read as follows: "SECTION 2.10. Effective Term. "Effective Term" shall mean the period from the Commencement Date until Owner has received a sum of Payments which, in the aggregate, is not in excess of the sum of $3,000,000 or such lesser amount as may be paid on those Payment Dates which occur prior to July 20, 2003." 5. The last sentence is revised and a new sentence is added to Section 2.23 of the OP&DA to read as follows: "The total of all Payments shall not, in the aggregate, exceed the sum of $3,000,000 or such lesser amount as may be paid on those Payment Dates which occur prior to July 20, 2003. The Agency may prepay any Payments due hereunder at any time or from time-to-time in its sole discretion, and the Agency may, with the consent of the Redeveloper, make any advance Payments in such present value amounts as may be agreed to by and between the Agency and the Redeveloper." 6. Section 5.1 of the OP&DA is amended to read as follows: "SECTION 5.1. Payment of Redevelopment Assistance Payments. Agency shall pay over to Redeveloper, on each Payment Date, an amount equal to the Payment, until such time as the sum of the amounts paid hereunder equals $3,000,000 during the Effective Term. " -2- . as follows: 7. Section 6. 1 (a) of the OP&DA is amended to read as follows: "(a) Operate the Hotel in a first class manner and similar to the quality as Radisson Hotels are presently being operated." 8. Section 6.1(c) of the OP&DA is amended to read as follows: "(c) (i) Within six (6) months from the date of Amendment No. 1 to this Agreement and thereafter during the term of this Agreement, operate the Hotel under the name of "Radisson" or any other name approved by the Agency in its sole discretion to be comparable to Radisson as of the date of execution of Amendment No. 1 to this Agreement; and (ii) The Redeveloper covenants and warrants the Hotel shall be continuously operated as a Radisson during the term of this Agreement with no interruption in operations of the Hotel for more than a single consecutive sixty (60) day period calculated on a calendar day basis without the prior express written consent of the Agency having first been obtained." 9. A new Section 7.2(c) of the OP&DA is added to read as follows: "(c) In the event of a default under Section 7.1(a) for failure to comply with Section 6. 1 (c) as amended by Amendment No.1 to this Agreement, the Agency's obligations to remit further Payments shall be immediately terminated upon the Agency having dispatched notice to the Redeveloper of failure of the Developer to comply with Section 6.1(c)." 10. Section 11.2 of the Sublease and Operating Agreement is amended to read "SECTION 11.2. Utility Chan!es. Sublessee shall be solely responsible for and promptly pay all chargers and bills from utility companies for heat, water, gas, electricity and any other utility used or consumed in the Leased Premises, which may be bills from the utility company supplying each service, bills rendered as a result of computing usage by way of sub meters, or as computed by an electrical survey, performed by an entity reasonably acceptable to Sublessor. Sublessor shall not be responsible to Sublessee for any amounts that Sublessor had previously agreed to pay to Sublessee under this Sublease." -3- . . Res. 92-291 WHEREFORE, in consideration of the mutual covenants contained herein, the parties hereto hereinafter subscribe their signatures. REDEVELOPMENT AGENCY 0 CITY OF SAN BERNARDIN APPROVED AS TO FORM AND LEGAL CONTENT: ATTEST: By: BY:~ ~ Agency sel Secretary CITY OF SAN BERNA A TrEST: ~~~ ~vJ--Y~ City lerk APPROVED AS TO FORM AND LEGAL CONTENT: James F. Penman City Attorney ~j MARUKO, INC., a Japan corporation Debtor in Possession under Bankruptcy Case No. 9112303LM By: Grn~~f2 --f Duly Authorized United States Representative of Shogo Abe and Hiroshi Okazaki, Permanent Trustee in the Japanese Reorganization Proceeding of Maruko Inc. SBEO\OOOI\00CI587 -4- l Res. 92-291 SBEO\OOOl \DOC\S87 7\17\92 1215 Iw AMENDMENT NO. I TO "OWNER PARTICIPATION AND DEVELOPMENT AGREEMENT" AND "CONVENTION CENTER SUBLEASE AND OPERATING AGREEMENT" This Amendment No. I (the" Amendment") is entered into as of the day of , 1992, by and among the City of San Bernardino (the "City"), the Redevelopment Agency of the City of San Bernardino (the "Agency") and Manum, Inc. (the "Redeveloper"), as the Parties to the "Owner Participation and Development Agreement" (the "OP&DA") and by and between the City and the Redeveloper, as the Parties to the "Convention Center Sublease and Operating Agreement (the "Operating Agreement"). RECITALS WHEREAS, the City, the Agency and the Redeveloper entered into a certain Owner Participation and Development Agreement whereby the Redeveloper was to construct and operate a hotel, and the City and the Redeveloper entered into a certain Convention Center Sublease and Operating Agreement whereby the Redeveloper was to sublease and operate the Convention Center facilities in conjunction with its hotel operations; and WHEREAS, the hotel was constructed and has been operated by the Redeveloper in conjunction with the Convention Center facilities; and WHEREAS, the Redeveloper has encountered severe financial difficulties as a result of general economic conditions, which difficulties have necessitated the filing of a bankruptcy proceeding by the Redeveloper; and WHEREAS, the Redeveloper has demonstrated to the City and the Agency that financial assistance to the Redeveloper is necessary if the operation of the hotel, and the related operation of the Convention Center facilities by the Redeveloper, is to continue; and WHEREAS, the City and the Agency deem it to be in the public interest that the operation of the hotel and Convention Center continue without interruption. NOW, THEREFORE, the parties hereto agree as follows: TERMS 1. Any terms not defined herein shall have the meanings as provided in the OP&DA or Operating Agreement, whichever is applicable. 2. The Redeveloper hereby acknowledges receipt of a cash amount equal to $400,000 on the date of execution of this Amendment as an advance Payment for $860,000 of taxes pursuant to the OP&DA which payment is made subject to the terms of this Amendment. -1- The Redeveloper, City and Agency agree that such $400,000 cash payment to the Redeveloper is a fair and equitable present value determination of such $860,000 advance Payment of Taxes based upon a commercially reasonable discount factor and a probable time period of the receipt of such future Payments. Upon receipt by the Redeveloper of such $400,000 present value cash amount, the Redeveloper shall immediately remit an amount equal to $7,500 to the Agency for reimbursement to the Agency of staff, legal and consultant costs and expenses incurred in the preparation and negotiation of this Amendment. The Redeveloper further acknowledges that the Agency's obligation under the OP&DA to remit $3,000,000 in Payments to the Redeveloper has been reduced by the amount of such $860,000 advance Payment hereby received in addition to such other amounts of Payments equalling approximately $439,569 as previously received by the Redeveloper since the Commencement Date. 3. The Redeveloper and the Agency recognize and agree that certain capital improvements may be desirable to the portion of the hotel that fronts along "E" Street. Such capital improvements as may be hereafter identified shall be intended to improve the appearance of the hotel and to allow for pedestrian traffic to identify the amenities contained in the hotel. The Redeveloper and the Agency shall negotiate in good faith as to the nature of such capital improvements, the funding source and the time period within which to complete the construction of such capital improvements. 4. Section 2.10 of the OP&DA is amended to read as follows: "SECTION 2.10. Effective Term. "Effective Term" shall mean the period from the Commencement Date until Owner has received a sum of Payments which, in the aggregate, is not in excess of the sum of $3,000,000 or such lesser amount as may be paid on those Payment Dates which occur prior to July 20, 2003." 5. The last sentence is revised and a new sentence is added to Section 2.23 of the OP&DA to read as follows: "The total of all Payments shall not, in the aggregate, exceed the sum of $3,000,000 or such lesser amount as may be paid on those Payment Dates which occur prior to July 20, 2003. The Agency may prepay any Payments due hereunder at any time or from time-to-time in its sole discretion, and the Agency may, with the consent of the Redeveloper, make any advance Payments in such present value amounts as may be agreed to by and between the Agency and the Redeveloper." 6. Section 5.1 of the OP&DA is amended to read as follows: "SECTION 5.1. Pa.yment of Redevelopment Assistance Payments. Agency shall pay over to Redeveloper, on each Payment Date, an amount equal to the Payment, until such time as the sum of the amounts paid hereunder equals $3,000,000 during the Effective Term." -2- as follows: 7. Section 6. 1 (a) of the OP&DA is amended to read as follows: "(a) Operate the Hotel in a first class manner and similar to the quality as Radisson Hotels are presently being operated. " 8. Section 6. 1 (c) of the OP&DA is amended to read as follows: "(c) (i) Within six (6) months from the date of Amendment No. 1 to this Agreement and thereafter during the term of this Agreement, operate the Hotel under the name of "Radisson" or any other name approved by the Agency in its sole discretion to be comparable to Radisson as of the date of execution of Amendment No. 1 to this Agreement; and (ii) The Redeveloper covenants and warrants the Hotel shall be continuously operated as a Radisson during the term of this Agreement with no interruption in operations of the Hotel for more than a single consecutive sixty (60) day period calculated on a calendar day basis without the prior express written consent of the Agency having first been obtained. " 9. A new Section 7.2(c) of the OP&DA is added to read as follows: "(c) In the event of a default under Section 7.1(a) for failure to comply with Section 6.l(c) as amended by Amendment No.1 to this Agreement, the Agency's obligations to remit further Payments shall be immediately terminated upon the Agency having dispatched notice to the Redeveloper of failure of the Developer to comply with Section 6.l(c)." 10. Section 11.2 of the Sublease and Operating Agreement is amended to read "SECTION 11.2. Utility Charl!es. Sublessee shall be solely responsible for and promptly pay all chargers and bills from utility companies for heat, water, gas, electricity and any other utility used or consumed in the Leased Premises, which may be bills from the utility company supplying each service, bills rendered as a result of computing usage by way of submeters, or as computed by an electrical survey, performed by an entity reasonably acceptable to Sublessor. Sublessor shall not be responsible to Sublessee for any amounts that Sublessor had previously agreed to pay to Sublessee under this Sublease." -3- . Res. '92-291" WHEREFORE, in consideration of the mutual covenants contained herein, the parties hereto hereinafter subscribe their signatures. APPROVED AS TO FORM AND " LEGAL CONTENT: By: \ /)&~\J ~ '---Kgency Counsel ATTEST: City Clerk APPROVED AS TO FORM AND LEGAL CONTENT: James F. Penman City Attorney B~~j APPROVED AS TO FORM AND LEGAL CONTENT: By: Attorneys for Redeveloper SBEO\lXXll \DOC\587 REDEVELOPMENT AGENCY OF TIIE CITY OF SAN BERNARDINO By: W.R. Holcomb Chairman By: MARUKO, INC. a Japanese corporation By: Its: By: Its: -4-