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ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
~ (!); GS))j! SUBJECT:
FROM: Name, Director
TIPPECANOE RETAIL PROJECT:
Operating Memorandum and Indemnity
Agreement
DATE:
August 2, 2002
SvnoDsis ofPrevions Commission/Couneil/Committee Action(s):
On July 12, 1999, the Commuoity Development Commission approved a Cooperation Agreement with the IVDA for
the Tippecanoe Retail Project (the "HUB").
On May 21,2001, the Community Development Commission and the Mayor and Common Couocil certified a Final
Environment Impact Report for the HUB project; approved a Disposition and Development Agreement with SBT
Partners, LLC; and approved the Harriman Place Improvement Project Acquisition, Construction and Financing
Agreement between the City and Agency.
On September 17,2001, the Commuoity Development Commission approved an Owner Participation Agreement with
In-N-Out Burgers, Inc.
On November 5, 2001 the Community Development Commission authorized execution of a Redevelopment
Condemnation Memorandum by and between IVDA and the Agency.
Recommended Motion(s):
(CommuDitv DeveloDment Commission)
MOTION:
To authorize the Executive Director to execute an Operating Memorandum by and between the
Redevelopment Agency of the City of San Bernardino and SBT Partners, LLC and to execute an
Indemnity Agreement with First American Title Insurance Company.
Contact Person(s): Gary Van Osdel/John Hoeger
Project Area(s) IVDA
Phone:
663-1044
Ward(s):
Third
Supporting Data Attached: Ii!l Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 LetterlMemo
FUNDING REQUIREMENTS Amount: $ See Text
Source:
n/a
Budget Authority:
n/a
SIGNATURE:
Commission/Council Notes:
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GVO:jbh:TIPP 02-0802 cdc item re indemnity agreement.doc
COMMISSION MEETING AGENDA
Meeting Date: 08/05/2002
Agenda Item Number: M
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ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
TIPPECANOE RETAIL PROJECT:
Oneratinl! Memorandum and Indemnity Al!reement
BACKGROUND
The Agency has acquired title to 31 ownerships in Phase I ofthe Tippecanoe Retail Project (the
"HUB") on the Northwest corner of Tippecanoe Ave and 1-10. The seven remaining ownerships
are subjects of condemnation actions brought on behalf of the Agency by the Inland Valley
Development Agency (IVDA). As to these seven: one has been settled and is in escrow; another
is expected to be settled; and, orders for immediate possession have been obtained in the
remaining five. Although the Agency (thru IVDA) has been awarded orders for possession of
these five, the condemnation actions are not complete due to challenges over valuation issues
and the right to take.
CURRENT ISSUE
The Agency is preparing to transfer the land for Phase I to the HUB Developer under the terms
of the Disposition and Development Agreement. However, two problems arise with respect to a
transfer. First, clear title is not available at this time due to the continuing status of the
condemnation actions. Second, the DDA did not contemplate transfer without clear title.
Clear title will not be available until litigation or settlement of all of the eminent domain issues is
complete. To cure this title defect, First American Title Company requires that the Agency
provide an indemnity to protect against the outcome of the condemnation cases.
Before issuing an indemnity, the Agency wants to insure agreement with the developer over the
status of certain rights that are in the development agreement, which did not contemplate transfer
prior to resolution of title matters. These include the right to terminate and the maximum extent
to which the development may proceed prior to completion of the court actions.
Adoption of the form motion will authorize the execution of an Indemnity Agreement that
protects First American Title Company from adverse results in the Agency's HUB condemnation
cases and an Operating Memorandum to set forth limits on the extent of development until after
resolution of certain aspects of the condemnation actions.
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GVO:jbh:TIPP 02-0802 cdc item re indemnity agreement.doc
COMMISSION MEETING AGENDA
Meeting Date: 08/05/2002
Agenda Item Number:
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FISCAL IMPACT
These documents will not create any new fiscal impact by virtue of their execution; nevertheless
the Indenmity Agreement memorializes an existing contingent liability in the event of an adverse
ruling in one or more eminent domain action. The Operating Memorandum regulates the size of
that exposure during phases in the condenmation litigation.
RECOMMENDATION
Staff recommends adoption of the form motion authorizing execution of the Operating
Memorandnm and the Indemnity Agreement.
Cary Van Osdel
Executive Director
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GVO~bh:TIPP 02-0802 cdc item re indemnity agreement.doc
COMMISSION MEETING AGENDA
Meeting Date: 08/05/2002
Agenda Item Number: