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Home My WebLink AboutR37-Economic Development Agency ECONOMIC DEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO FROM: Maggie Pacheco Deputy Director SUBJECT: ORIGINAL REINSTATED AND AMENDED BP CALIFORNIA - PROPERTY OWNER REDEVELOPMENT AGREEMENT DATE: June 29, 2004 Svnonsis of Previous Commission/Council/Committee Action(s): On July 18, 2002, the Redevelopment Committee voted unanimously to recommend to the Community Development Commission approval of a Property Owner Redevelopment Agreement by and between the Agency and BP California. On October 7, 2002, the Community Development Commission approved a Property Owner Redevelopment Agreement by and between the Agency and BP California. Recommended Motion(s): (Community Develonment Commission) MOTION: A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO REINSTATING AND AMENDING THE PROPERTY OWNER REDEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND BP CALIFORNIA, A CALIFORNIA CORPORATION AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TO EXECUTE SAID AGREEMENT (NORTHEAST CORNER OF WATERMAN AVENUE AND VANDERBILT WAY - TRI-CITY REDEVELOPMENT PROJECT AREA) Contact Person(s): Project Area(s) Maggie Pacheco Tri-City Phone: (909) 663-1044 3 Ward(s): Supporting Data Attached: 0 Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 Letters Approx. $200,000 Tri-City Bond Proceeds; FUNDING REQUIREMENTS Amount: $ 1.2 Million Source: $1 Million in Tax Increment Revenues _A__~:< _L-- Maggie a eco, Deputy Director SIGNATURE: Commission/Council Notes: P:\Aj:endas\Comm Dev Commission\CDC 2004\04-07.06 SP California Agr SR.doc COMMISSION MEETING AGENDA Meeting Date: 07/06/2004 Agenda Item Number: /(37 ECONOMIC DEVELOPMENT AGENCY STAFF REPORT Reinstated and Amended BP California - ProDertv Owner RedeveloDment Al!reement BACKGROUND/CURRENT ISSUE BP California (the "Property Owner"), a California corporation, owns an approximately 9-acre site located at the northeast corner of Waterman Avenue and Vanderbilt Way in the City of San Bernardino (the "Site"). The Property Owner has owned the Site since 1978. In order for the Site to accommodate development, an old, private landfill that previously existed on the Site must be remediated. To that end, the Property Owner had prepared a "closure plan/work plan" that was approved by the County Department of Environmental Health Services. In addition, the Property Owner had solicited bids to carry out the "closure plan/work plan" which was estimated to cost approximately $3,000,000. Pursuant to the "closure plan/work plan," Site remediation (the "Remediation Project") involved (1) excavation of portions of the Site, (2) off site disposal of from 15,000 to 20,000 cubic yards of excavated materials at both Class I and Class II landfills, depending on the nature of the materials, (3) the import of soil for backfilling the excavation, (4) the screening and re-compaction of approximately 100,000 cubic yards of excavated materials and (5) the import of soil for capping. The remediation of the environmental problems on the Site would restore the Site to productive and valuable uses. Upon the completion of the Remediation Project, the Property Owner would be able to sell the site to third parties who would develop the Site for uses as permitted under the Tri-City Redevelopment Plan and the City's zoning. On October 7, 2002, the Community Development Commission unanimously adopted Resolution No. CDC/2002-30 approving the 2002 Property Owner Redevelopment Agreement (the "Agreement") with BP California and authorizing the Executive Director to execute the Agreement on behalf of the Agency. Pursuant to the Agreement, the Agency is to provide a $200,000 Agency Grant (the "Grant") to the Property Owner upon satisfactory evidence of at least $200,000 (the "Initial Remediation Payment") worth of physical remediation work had been completed on the Site, in accordance with the "closure plan/work plan," and to remit to the Property Owner 75% of the net tax increment received by the Agency for ten (10) years from an approximately three-acre portion of the Site and for thirteen (13) years from the remaining approximately six-acre portion of the Site. The total amount of the Grant (the aggregate of the Initial Remediation Payment and all Site Tax Increment Payments) to be paid by the Agency to the Property Owner would be the lesser of the "Actual Cost of the Remediation Project" or not to exceed $1,750,000. The Remediation Project was to be completed by June 30, 2004. P:\CDBG Dept\Maggic\Draft Docs\04-07-06 DP California Agr SR ver MP.doc COMMISSION MEETING AGENDA Meeting Date: 07/06/2004 Agenda Item Number: 1<.,'17 Economic Development Agency Staff Report BP California Property Owner Redevelopment Agreement Page 2 CURRENT ISSUE: The Property Owner started the Remediation Project in November 2002 and discontinued operations on December 30, 2002 due to the unanticipated excessive volumes of materials that would have to be hauled to a Class I landfill. When the Property Owner halted work on the Site, they had excavated approximately 19,000 cubic feet of material. The amount of material that needed to be excavated far exceeded the projections as indicated that the original "closure plan/work plan". Consequently, the Property Owner retained another environmental consultant who determined that the approved original plan did not address the appropriate remediation measures for the Site. The Consultant found that there was far more areas of lead with levels exceeding the California hazardous waste characterization criteria noted in the original "close plan/work plan." Thus, the Property Owner had to prepare a new Remediation Plan (the "New Plan") which had to be approved by Regional Water Quality Control Board and other agencies and which was fmally approved in late September 2003. However, the Property Owner was not able to immediately restart the Remediation Project per the New Plan until they had secured financing to cover the unexpected remediation work described above. Although, the Property Owner was aware of their deadline to complete the Remediation Project by June 30, 2004, per the Agreement, the financing for the new Remediation Project was not completed until recently, in June 2004. These delays caused BP to seek an extension from the Agency to complete the Remediation Work from June 30, 2004 to October 31, 2004; for this reason, Staff is recommending that the Commission approve the attached Reinstated and Amended Agreement between the parties. It is also worthy to note, that although the Property Owner has encountered this unforeseen remediation work, they have not requested additional resources from the Agency nor have they drawn down any of the remediation funds they are entitled to under the Agreement (i.e. $200,000 initial payment). ENVIRONMENTAL IMPACT: Since the site/ project has been previously analyzed under the California Environmental Quality Act (CEQA) and a Mitigated Negative Declaration was filed on May 20, 2002, it is not necessary to prepare additional environmental documentation for the proposed Reinstated and Amendment to the 2002 Property Owner Redevelopment Agreement.. FISCAL IMPACT: Under Section 4 of the Agreement, the Agency is obligated to reimburse the Property Owner a portion of the costs of the Remediation Project, originally estimated to cost in excess of $3,000,000, to the Property Owner in the amount of not to exceed $1,750,000 ($200,000 initial remediation payment, plus 75% of the Site tax increment) as more specifically formulated in Section 4 of the Agreement. P:\CDBQ Dept\Maggic\Draft Docs\04-01-06 BP California Agr SR vcr MP.doc COMMISSION MEETING AGENDA Meeting Date: 07/06/2004 Agenda Item Number: iC31 Economic Development Agency Staff Report BP California Property Owner Redevelopment Agreement Page 3 RECOMMENDATION: That the Community Development Commission adopt the attached Resolution. /YJ )J~~___ Maggie Pacheco, Deputy Director P:\CDBG Dept\Mag;ic\Dnd\ 00cs\04-07-Q6 BP California Agr SR vet MP.doc COMMISSION MEETING AGENDA Meeting Date: 07/06/2004 Agenda Item Number: 1<..31 RESOLUTION NO. 2 3 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO REINSTATING AND AMENDING THE PROPERTY OWNER REDEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND BP CALIFORNIA, A CALIFORNIA CORPORATION AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TO EXECUTE SAID AGREEMENT (NORTHEAST CORNER OF WATERMAN AVENUE AND V ANDERBIL T WAY - TRI-CITY REDEVELOPMENT PROJECT AREA) 4 5 6 7 8 9 10 WHEREAS, on October 7, 2002, the Community Development Commission approved the 2002 Property Owner Redevelopment Agreement (the "Agreement") by and between the Redevelopment Agency of the City of San Bernardino ("Agency") and BP California, a California Corporation ("Property Owner") for the purpose of assisting the Property Owner in mitigating certain environmental and blighted conditions found on the old landfill ("Remediation Project") property located at the northeast comer of Waterman Avenue and Vanderbilt Way, San Bernardino, California ("Property") within the Tri-City Redevelopment Project Area (the "Redevelopment Plan"); and WHEREAS, the Property Owner began the Remediation Project as defined in the Agreement and discovered additional waste beyond that which was expected on the Property 11 12 13 14 15 16 17 18 19 and was required to prepare a new Remediation Plan and resubmit said new Remediation Plan 20 to the Regional Water Quality Control Board for approval before further remediation work on the Property could begin; and 21 22 WHEREAS, as a result of these unforeseen circumstances, delays have occurred beyond 23 the control of the Property Owner and the Property Owner was unable to complete the Remediation Work by June 30, 2004 as provided in the Agreement and thus, the Property Owner has requested that the Agency reinstate and amend the Agreement and extend the completion date for the Remediation Work to November I, 2004. 24 25 -1- P:\Ageadu\ResoladoDI\ReIolndooll\1004\04-07..(16 BP Calfo,," Agr CDC Reso.doc NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF 2 THE CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND 3 ORDER, AS FOLLOWS: 4 Section 1. The above recitals are true and correct. 5 Section 2. The Community Development Commission hereby approves the 6 Reinstated and Amended Property Owner Redevelopment Agreement with the Property Owner. 7 Section 3. The Executive Director of the Agency is hereby authorized to execute the 8 Agreement on behalf of the Agency in substantially the form attached hereto, together with such technical and conforming changes therein as may be approved by the Executive Director and 9 10 Agency Counsel. Section 4. 11 //1 12 /1/ 13 /1/ 14 /1/ 15 /1/ 16 //1 17 /1/ 18 //1 19 /1/ 20 /1/ 21 //1 22 /1/ 23 /1/ 24 /1/ 25 /1/ The Resolution shall become effective immediately upon its adoption. -2- P:\Agendu\ResoluIJODI\ReIolutlOD.\2004\G4-07-0Ci BF CaUfomla AlP' CDC Reso.doc 2 A RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO REINSTATING AND AMENDING THE PROPERTY OWNER REDEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND BP CALIFORNIA, A CALIFORNIA CORPORATION AND AUTHORIZING THE EXECUTIVE DIRECTOR OF THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO TO EXECUTE SAID AGREEMENT (NORTHEAST CORNER OF WATERMAN AVENUE AND VANDERBILT WAY - TRI-CITY REDEVELOPMENT PROJECT AREA) 3 4 5 6 7 8 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the 9 Community Development Commission of the City of San Bernardino at a meeting thereof, held on the day of ,2004, by the following vote to wit: 10 Commission Members: Aves Abstain Navs Absent 11 12 ESTRADA LONGVILLE MCGINNIS 13 14 DERRY 15 KELLEY 16 JOHNSON 17 MC CAMMACK 18 19 Secretary 20 The foregoing resolution is hereby approved this day of ,2004. 21 22 23 Judith Valles, Chairperson Community Development Commission of the City of San Bernardino 24 Approved a 25 -3- P:\Agelldas\ResGlutlol1l\Retolutio...UOO4\004-07-06 DP Callforala Air CDC a-.doe By: Agency Counse AMENDMENT TO THAT CERTMN 2002 PROPERTY OWNER REDEVELOPMENT AGREEMENT (DP California) CONSTITUTING AN AMENDED AND RESTATED AGREEMENT This Amendment to that certain 2002 Property Owner Redevelopment Agreement dated as of September 23, 2002 (the "Agreement"), by and between BP California, a California Corporation (the "Property Owner"), and the Redevelopment Agency of the City of San Bernardino, a public body corporate and politic (the "Agency"), shall constitute an Amended and Restated Agreement by and between the Property Owner and the Agency as of July 6, 2004, and is entered into with respect to the following facts: RECITALS The Property Owner has discovered contaminants and other debris and buried materials on the Property that was not contemplated as of the date of the Agreement, and the Property Owner has been significantly delayed in obtaining all necessary governmental permits and approvals as required to commence the excavation of the debris and other buried materials to remediate the site for environmental compliance purposes as part of the Remediation Project as defined in the Agreement. The Property Owner has only recently requested that the Agency consider an amendment to certain dates contained in the Agreement which if certain conditions are not met on or before said dates, the Agreement will automatically terminate pursuant to its terms. The Agency is willing to consider the extension of the termination date of the Agreement and the continuation of the effectiveness of the Agreement in the form of the Amended and Restated Agreement provided that certain insurance provisions and other indemnification and hold harmless provisions remain in full force and effect during all relevant times as further provided in this Amendment. The Agency desires that the dates as hereinafter set forth be modified to a termination date that is realistic under the circumstances and which affords the Property Owner additional time to perform the remediation and excavation of the Property in preparation for the development of the project as contemplated in the Agreement after completion of the Remediation Project as defined in the Agreement. NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES AND COVENANTS OF THE PARTIES SET FORTH IN THIS AMENDMENT, THE PROPERTY OWNER FOR ITSELF AND, TO THE EXTENT PROVIDED IN THIS AMENDMENT AND THE AGREEMENT, FOR ITS SUCCESSORS AND ASSIGNS AND THE AGENCY FOR ITSELF AND ITS SUCCESSORS AND ASSIGNS, HEREBY AGREE, AS FOLLOWS: I P:\Agendas\Agreements-Amendments\Agrmls-Ammd 2004\04-07.()6 SP California Amd Re Agr.doc Section 1. Effective Date of Amendment. Subject to the provisions of Section 3(b) hereof, this Amendment shall take effect as of the date of adoption by the Community Development Commission of the City of San Bernardino, as the governing body of the Agency. The Agreement shall be deemed to have been modified by the change in the termination date of the Agreement as further provided in Section 2 hereof so that the Agreement, together with this Amendment, shall constitute the Amended and Restated Agreement by and between the parties the same as though the date set forth in Section 2 had been modified prior to and not subsequent to the previously stated termination date of the Agreement. It is the intent of the parties that the Agreement, as amended by this Amendment, shall continue to be in full force and effect as the Amended and Restated Agreement of the parties without any termination of the Agreement. Section 2. Specific Date Changes. The date of "June 30, 2004" shall be replaced with the date of "November I, 2004" in the following specified sections of the Agreement: Section 2.(b); Section 5.(c); and Section 8.(e). Section 3. Effect of Amendment and Interpretation. (a) The parties agree that notwithstanding the provisions of Section 8.(e) of the Agreement providing for the automatic termination of the Agreement, whether or not the Agreement did in fact terminate pursuant to its terms, the parties by the approval and execution of this Amendment, intend that the Agreement shall remain in full force and effect with the modified date for termination as set forth in Section 2 above subject to the provisions of subsection (b) below. (b) The provisions of this Amendment and the continued effectiveness of the Agreement, in the form as intended to be continued as the Amended and Restated Agreement, shall be expressly contingent upon the Property Owner continuously maintaining (i) all indemnification and hold harmless provisions in favor of the Agency as set forth in the Agreement, and (ii) all insurance coverages as required by Section 25 and any other Sections of the Agreement. Furthermore, all such items specified in (i) and (ii) above shall be the obligation of the Property Owner to have maintained in full force and effect continuously from and after June 30, 2004, for the provisions of this Amendment to be effective. Failure of the Property Owner to comply with any of said provisions shall thereupon cause this Amendment to be null and void immediately upon delivery of notice by the Agency to the Property Owner, and the Agreement shall thereupon be deemed to have terminated on June 30, 2004. 2 P:\Agendas\Agreements-Amendmmts\Agrmts-Amend 2004\04-07~ BP California AR Agr.doc THIS AMENDED AND RESTATED AGREEMENT is dated as of July 6,2004, and is executed by the authorized officers of the Property Owner and the Agency, as evidenced by the signatures of each of them appearing below. PROPERTY OWNER BP California, a California corporation Dated: By: Its: AGENCY Redevelopment Agency of the City of San Bernardino Dated: By: Its: By' Agency Counsel 3 P:\Agendas\Agrecmenls-Arnendmcnts\Agrrnts-Arnend 2004\04.07-06 BP California AR Agr.doc THIS AMENDED AND RESTATED AGREEMENT is dated as of July 6,2004, and is executed by the authorized officers of the Property Owner and the Agency, as evidenced by the signatures of each of them appearing below. PROPERTY OWNER BP California, a California corporation Dated: By: Its: AGENCY Redevelopment Agency of the City of San Bernardino Dated: By: Its: By. Agency Counsel 3 P:\Agendas\Agreements-Am.lndmcnts\Agnnts-Amcnd 2004\04-07-06 BP California AR Agr.doc THIS AMENDED AND RESTATED AGREEMENT is dated as of July 6, 2004, and is executed by the authorized officers of the Property Owner and the Agency, as evidenced by the signatures of each of them appearing below. PROPERTY OWNER BP California, a California corporation Dated: By: Its: AGENCY Redevelopment Agency of the City of San Bernardino Dated: By: Its: By,' Agency Counsel 3 P:\Agendas\Agreements-Amendments\Agrmts-Amend 2004\04.()7-06 SP Califoml& AR Agr.doc