HomeMy WebLinkAboutRS01-Redevelopment Agency
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DEVELOPMENT DEPARTMENT
OF THE CITY OF SAN BERNARDINO
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UOUEST FOJt COIMISSION/COURCIL ACTION
From:
KENnTH J. HENDERSON
Executive Director
Subject: MAmJJ::O ASSISTANCE
REQUEST
Date:
July 16, 1992
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SvnoDsis of Previous Commission/Council/Committee Action(s):
On July 20, 1987, Resolution 5032 was approved by the Commission and
Resolution 87-251 was approved by the Council authorizing and
directing execution of the Hotel and Convention Center agreements with
Maruko, Inc.
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Recommended Motion(s}:
(C~itv Deve10Dment Comaission)
MOTION A:
That the 1992-1993 Agency budget be increased by $400,000
for advance payments to Maruko, Inc.
MOTION B:
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION 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".
g
Administrator
~II . HERDE N
Executive Directo
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Contact Person(s): Kenneth J. Henderson/John Hoeaer Phone: 5081
Project Area(s): Central Citv Ward(s): 1
Supporting Data Attached:
Staff ReDort: Resolutions: Amendment
FUNDING REQUIREMENTS:
Amount: ~400.000
Tax Inc.
Source:
Budget Authority:
Reauested Above
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Commission/Council Notes:
KJH:JBH:dls:25l4J
COIInSSION MEETING AGENDA
Meeting Date: 07/20/1992
Agenda Itea R1mber: ij, /
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Recommended Motions C~:
(Mavor and C~ Council)
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ItOTION C:
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".
KJH:JBH:dls:25l4J
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COIMISSION MUTING AGENDA
Meeting Date: 07/20/1992
Agenda Itea lIuIIber: .f5-'
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DEVELOPMENT DEPARTMENT
OF THE CITY OF SAN BERRAJtDIRO
STAFF UPORT
MA1mIm ASSISTANCE UOUEST
For the past several months, Maruko Inc., has explored possibilities
for Agency assistance in keeping the Maruko Hotel open despite its
current difficulties including bankruptcy proceedings. It appears that
it is in the best interest of the creditors to attempt to keep the
hotel open for as long as is reasonably possible, but that is dependant
upon its ability to reach profitability.
The hotel's best opportunity for becoming profitable now appears to be
acquiring a Radisson franchise. This would provide the hotel with a
nationally recognized name and a national reservation system. There
are, however, significant fees and other costs associated with
acquiring the franchise. For the first year these costs are estimated
at $300,000 for conversion of the hotel. In addition to assistance for
conversion costs, the hotel has requested a waiver of City parking
fees. These, plus other payments and costs, indicate an appropriate
assistance level of $400,000.
It is proposed that the Agency advance payments that would otherwise be
due in future years under existing agreements. This advance will
reduce the Agency's obligation to make future assistance payments by
$860,000 which is the future value, eleven years from now, of a
$400,000 advance. Also, the Agency's obligation to make future
assistance payments would end in eleven years (they are currently
unlimited until a total of $3 million is reached) and the City would no
longer pay the first $1200 every month of utility expenses in the
Convention Center.
PROPOSED ASSISTANCE
The attached draft amendment to the existing Owner Participation and
Development Agreement and the Convention Center Sublease and Operating
Agreement would provide for a $400,000 advance to the hotel. The
principal elements in the amendment are as follows:
1. The Agency will advance $400,000 in immediate assistance to the
hotel. This amount is a combination of Maruko's original $300,000
loan request plus funds for payment of City parking fees (rather
than the requested waiver) and funds to replace the City's utility
payments (which will now be discontinued) plus a processing fee.
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KJH:JBH:dls:25l4J
COmuSSION MUTING AGENDA
Meeting Date: 07/20/1992
Agenda Itea lIuIIber:
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DEVELOPMDr DEP.lJt:J:ftur STAFF UPORT
MARllKO ASSISTAlICE UQUEST
July 16, 1992
Page Number -2-
The funds are not designated for specific uses, but it is a
requirement of the amendment that the hotel convert to the
Radisson system.
2. The advance will reduce the balance of the remaining Agency
assistance payments (based on the Transient Occupancy Tax
collected by the City) by $860,000. The current term of the
assistance payments does not end until the Agency has completed
payment of $3 million (without interest). Under the amendment
there would be a limit of eleven years of payments and the
remaining balance will be reduced from $2,560,431 to $1,700,431.
This $860,000 reduction is the future equivalent of the $400,000
advance eleven years from now at a 7.25% interest rate.
3. Maruko would cooperate to the extent possible with the changes
required for the newly adopted Downtown Plan, which could include
installation of an "E" Street entrance and interlocking pavers
installed in the area of the porte-cochere. Maruko would also
cooperate on any name changes needed for the Convention Center to
allow for identity signs to be posted on the 1-215 freeway.
The City will continue to receive parking fees (currently $37,632
per year) for the 200 designated spaces in the five-level parking
structure. However, the Agency's advance provides 21 months of
assistance to fund these payments.
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5. The City would no longer pay for a portion of the Convention
Center utilities as provided in the existing lease agreement which
currently costs the City $14,400 per year. The Agency's advance
includes an offset for this lost payment to Maruko for a period of
21 months.
6. Provisions have been inserted so that, if the hotel is not
operated as a Radisson Hotel all future assistance payments cease,
unless the Agency approves any other future franchise affiliation.
7. Maruko would pay a fee of $7,500 to partially offset Agency costs
for preparing and processing an amendment to the development and
lease agreements.
The amendment must be approved both by the Bankruptcy Court of San
Diego and the Trustee in Tokyo before it will be executed. In addition
to the amendment, the Agency will accelerate a final note payment of
KJH:JBH:dls:25l4J
COtKlSSION MDTIlIG AGENDA
Meeting Date: 07/20/1992
Agenda It_ BuIIber: ls-'
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DEVELOPMERr DEPAJtl"ftll1IT STAFF UPOItT
MAIlUlCO ASSISTAlICE UQUEST
July 16, 1992
Page Number -3-
$26,928 (plus interest) otherwise due to Maruko on September 30, 1992.
Early payment will reduce the Agency's interest cost (the rate is 7X),
and early payment will improve Maruko's immediate cash position.
BENEFITS TO THE 1WlUlC0 HOTEL
The hotel needs a recognized name to improve its reservation rate among
potential guests from outside the San Bernardino area. Travelers do
not know what to expect from hotels with local names and uncertainty
results. A nationally recognized name, on the other hand, gives the
traveler an image of the hotel's service and amenities, increasing the
expectation of a certain level of satisfaction. This enhanced
identity, and physical inclusion in a nationwide reservation system,
will increase occupancy at the hotel which is necessary for the hotel
to break even on its operations.
Maruko Inc., is in bankruptcy and cannot raise funds externally to make
the investment needed for conversion to a Radisson franchise.
Advancing assistance that would otherwise be due in later years will
give the hotel the necessary funds that cannot be borrowed elsewhere.
BDEFITS TO THE CITY/AGDCY
The direct benefit to the City is the elimination of payment of utility
costs in the Convention Center (currently $14,400 per year). These
payments increase in future years based upon increases in the Consumer
Price Index and the payments continue for the full term of the
Convention Center lease (50 years plus two ten-year extensions). The
present value of eliminating this stream of payments is $355,000 based
upon an investment rate of 7.5X, an inflation rate of 4.5X, and a
remaining life of 45 years for the initial lease term. The actual
total of the payments over these 45 years would be $1,999,000 based
upon an inflation rate of 4.5X. If the two ten-year extensions were to
be exercised, additional payments would be due.
The direct benefits to the Agency are limiting the term of the
assistance payments based on TOT to eleven years and reducing the
remaining balance of the payments by $860,000. The Agency would also
collect fees to offset preparation and processing of the amendments to
the development and lease agreements.
The central benefit to the community would be the continuation of the
185 jobs provided by the hotel as well as the contribution into the
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KJH:JBH:dls:2514J
ClMIISSION MUTING AGENDA
Meeting Date: 07/20/1992
Agenda Itea Rulaber: e~ -I
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DEVELOP!IElIIT DEPA2'rftlU'rJ: STAn' DPORT
MAIlUKO ASSISTANCE DQUEST
July 16, 1992
Page l'haber -4-
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local economy that occurs from payments made by Maruko to local
vendors. The hotel and the convention center serve as a primary focal
point for downtown activity.
Based upon a review of the hotel's operating statements by the Agency's
financial consultant, the future of the hotel is uncertain and the
above assistance will not, by itself, have a major impact on the
financial condition of the hotel whose statements reflect a gross
annual loss in excess of $1 million per year. On the other hand, if
some form of financial assistance is not forthcoming, it appears the
Maruko Hotel will close and that would be a substantial problem for the
downtown area. Providing the advance will allow the hotel to invest in
a Radisson franchise and give it a nationally recognized name.
UCO~ED ActION
The Maruko Hotel is faced with an urgent need to change its current
situation. On July 9, 1992 the Redevelopment Committee met and
considered this assistance proposal. The Committee recommended that
negotiations be completed and that the matter be forwarded to the
Commission.
The deal points in this staff report and a draft of the proposed
amendment have been reviewed by Maruko management. The amendment is
acceptable as indicated in the attached July 16, 1992 letter from
Arthur Gimson.
The Resolution and Agreement were faxed to staff for agenda preparation
purposes. The originals will be executed upon Commission approval.
Staff recommends adoption of the form motion and the attached
Resolutions.
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KJH:JBH:dls:25l4J
COIMISSION IIDTIRG AGENDA
Meeting Date: 07/20/1992
Agenda Ite. l'fuIIber:
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07/18/92 17:01 1t213 895 0377
IlARUIl:D USA INC.
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July 16. 199Z
Mr. J01ll1 Hoeger
Projec:t 1\I"""g01
EcoAomic Development Apnt;y
City of San Bernardino
201 North B Street
Third Floor
San Bemardfno, CA 92401-1507
Via Fa: <n4) 38. 5434
Dear John:
'Ibank you for providiDg me with copies of the most RlCCIIt doc:un1eDt'~"Il regarding tho
proposed fi"""aal asslstaDCe wbich would peDDit tho Maruko Hotel to proo..ed with it's plan
to obtain a R"tficVJU lJceme Agr-mrm (frpn.-hlUl).
1 have Tmewed tho foIIowf.na:
1. The seven deal poinll entitled Propo5ed Assist8nclc.
2. The Draft of AmePtlm-t No. 1 to the Owno1 Particlpation and Development
Aareement.
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\. 3. Proposed JanauaF for tho Cooperation OD Improvemems.
All of the above are 8Cll8ptabJo pllIrfiT1g a complete review by Maruko 1cpl COUDIC1. In
addition, all are subject to approval from the Trustee of Muuko IDe. a Japan~" Colporation
and the Bankruptcy Comt bavIDg jorlsdIc:tiou.
Tbe oller of this assfstaIK1e, from the Cty of San Bemardfno, is greatly appreciat/'ld We believe
that tbe collYeI'Sion to the p..tfi""D IIIlIIIC, a10Da ,nth . rccovety from the recrsriOJWy
""'"""""1. will permit the hotel to reach a break even point in it's operatiODS, and cvcntuallJ,
profitability.
Youn sincerely.
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Arthur (Jim.,.", CHA
~"""8i"lg Dlrector
Hotel DivIsion
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cc: Mr. MiDonlI\l""l'm.
Mr. James Deskus
Kmgi N9tq,,"lmll, &q.
Arnold M. Ouittller, Esq.
Ms. Martha Wan:iIler
......11<0 CALFORNlAlf<C.". _.. _ !AI AngoIoo, CA 10017 7"'" 213-111-_ _ 213- _...08
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RBSOLUTI:OII NO.
A 1tBS0Ltl'UON 01' TIIB MAYOR A1Q) COMMON COCNCIL OF THB
CI:n 01' SU BBRNARDI:1lO AtlTHORIZING AHJ) DIRECTING THB
BXBCUTION OF AJIBIIDJIBR'l' 110. 1 TO "0Wh~ PARTICIllA'1'IOB
AND DBVELOPJIBN'l' JOlI","-a:NT" AND "COWDTION CBN'l'BR
SUltLBASB AND OPERA'l'ING JORBEMEN'l'lI
wsnmBAS, the Reelevelopaen1: A9'eDcY of the Ci~y of
san Bernarclino (the .Agency") ancl the c1~y of San Bernarel1no (the
"C1tyll) have previ~ly uterecl into certain .9Z'e"u~. w1n
Ma1"\lko, InCl. (the IIRlIdeveloperll) for pw:po.e. of W14ertaJcing ancl
completing a raclevelopllu~ proj~ 1nvolv1nq the con.1:nCl1::1on of
a C1ertain hotel aeljaClut 'to the <:onven1:10n cen1:er, .. _11 a. the
operation of the COnvu1:1on Cuter (the IIPZ'ojaCl1::lI), loaa1:ael
wi1:lU.n the Central city beleveJ:opaent Project Area (the "Pl'ojeat:
Area"), ancl
WBBItBAS, the Raclevelopet" of the Project: Ila. .W:lIIittecl
'to the Ag'ency anel 'to the C.tty evillelloe that: tha Re4eveloper ha.
eJ\CIOUIlteracllDlaxpecteel finano!al 4iftiCl\ll~ie. in the operation of
the Projeo~ a. the re.ult of ,ueral econoaio oon4i'l:1on.,
necua1t11:t1119 the f1linl of a Hnkruptcy proceeding', and that the
cont:1nuecl operation of the Proj-* requin. City ancl Ag'anc:y
a..iatlU1Ce; and
WBBRBAI, the con1:1nU8cl operat:1on of the Project: i. in
the pUblic in1:ere.1: 1n that the Projeet repre.ent. ne
reclevelopallJ1t of real property in the 1'Z'ojeo~ Area, p\lr.\I&n1: 1:0
the Community Red.evelopaent: 1.aw of the state of california, ha.
.e.the1:ically improvecl real property within the Project: Area, has
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ore.teeS GIplOymclt opportlUlltl.. for re.ident. of the City both
within and ouaide of the Project: Area, bas elillinat:ect blight,
has enhanced real property value. in the Projec1: Ar.. anel ha. and
will generate .ales tax revenu.., property tax inorDl81lt revenue.
and. 'transient occupanc:y tax revenue. ~ aneS
1IBBRBAS, the execution of the propo.ed UlendJlent to the
agreaent. between the partie. thereto would provide a..istance
to the Redeveloper by eeSvancil1CJ at an earlier tilM oertaln Will.
which would otherwi.e " d.ue, under the pr10r atneaenta "tween
the part,1e., to the !tedeveloper OVer an exten4ed >>er1od. of t1llle,
while prov141nCJ con.lderaUon to the City and AIlUlcy for 80
d01ng, and
WHBRBAS, 1t 1. re"onUle an4 appropriate to appRVe
and call.e the exewtlon of an ....n4lllent to 1:Jle v.rlol18 aCJl'eeaen't..
pertinent to the Projeot.
1fOW, THERBFORB, BB ZT RBSOLVBD BY TKJ: KAYOR AHD COHMOB
COONCZL OF '1'BB CITY or SM' BERNUDINO, AS FOLLOWSI
SBC'1'IOlf 1. The Mayor aneS eom.on council hereby approve
that certain ~nt No. 1 to "owner particll'4tion and
Develop1M1l't Agreaent" and "CCmvention Center OperatillCJ
AgrllAent" (the "AIIlendD.Ult") by and -0119 the City, the Agency
anel the B84eveloper, .ubstantially 1n the fana and cOIItant a. set
forth in Exhibit lOA" attaohed hereto and. incorporated herein by
reterence. In reoognltlon ot the pending baMruptcy prOCleedlng
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and the neee..ny 'to obtain a~oval of the tru.tee in bankruptcy
an4 'the Court, the MayOZ' b bereby autboriae4 and clirec:1:ecI W
exeCN'te the AIIendment fOZ' ad on bahalf of the City after
lIe_aary appz'oyal. bave !laen obtllinecl frCIII the tru.'t.. 1n
baDla'uptcy and the Couri:.
SEC'rIOlf a. Reo09ftidn" the naecI fOZ' furtber
po..1J>le n&CJOtia'tion ot the tel:ll8 and condition. of the Amandmaht
in orcler to obtain the oonounenoa of the Ilaclaveloper I .
baDlauptcy oounael, the truatee in ba:nJa'uptcy and the CCNZ"t,
revi.iona to 'the AIIandlIlent ..y !la ude after the adoption of thic
ae.olution, providinw (i) cuab Clhul,,_ cIo not alter the ba.lo
intent of the Allendment and (11) .uah chan".. are appz'ovacl by the
HayOZ' and city Attorney.
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JlL 17 '92 11'24AM
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A RESOLOTJ:OK OJ' TIIB ItAYOR AND COIIIMOlf OOtJJICJ:L OJ' 'l'HB CJ:n OJ' SAJI
BBRNAIlDDTO AUTHOllIZIJrG AND DIREC'l'DfG THB EXBCU'l'J:0If 01' AJIBlWMBI!I'1'
NO. 1 TO .OWIID PARTICIPATIOIl' AND DBVBIDPMBll'l' AGREBME1I'1'R AND
ROOJIVBJl'1'J:OIf CBllTD SUBLEASE AND OPDA.T'IKG AGRBEIIDl'l'R
8BC'l'IOlf 3.
'!'be t1ndinv. and det:enlination. herein
llball be tinal and conclu.ive. Thi. Re.olution &hall take ettect
upon the daU of Ita adoption.
J: RlmDY CERTIFY that.the forevoinqRe.olution wa. duly
adopted l1y the lI&yor ana Common Council of 'l:be cI t:y ot
San Bernardino at: a
thereof, held on the Gay of
lna, ~y the follow1nCJ vote, to witl
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Caan~!l v.~kaP.1
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ARS'PArN ABS1ftI'l'
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ESTRADA
REILLY
JIE1UWQ)EZ
HAUDSLIY
IaIlOR
POPE-LUDLAM
MILLBll
City Clerk
The forevoinlJ reeolut:ion 18 hereby approved th1.
day of , 1992.
lI&yor of the City of
San Barnardino
Approvacl a. to fot'll and leval contenta
JAHB8 J'. I'BNKAN
City Attorney
By:
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STAT!: OF CALUOIlIfIA I
COVlftY OF SAN BJl1UfAlU)INO I
CITY OJ' SAN BBRNARDIlfO I
I, Cit.y Clerk of ~. City of
San Bernardino, DO BDUlI' CBRTII'Y ~at the fOJ:ecJ01ncJ and attaohed
Clopy of Kayor an4 CODIon COlmcU of the Cit.y of San Bernardino
a..olution Ho. i. . full, 'true and correct copy of that
now on file in tals offlc..
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IH Wl:'1'HBSS WIlBREOF, I have herelUlto set. 1IIY hand and.
affixed ~. official ..al of ~. Mayoz' an4 c01IIlOn COWlcil of the
C! t.y of San Bernariino t.hi. clay Of ,
1"2.
Clty Clerk
City of San Bernarclino
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RJ:SOLV'rJ:OIl NO.
A RBSOI.tJ'1'ZON OF 'l'HB COIIIItl1n:TY DEVBLOPJIEN'1'
COIIIII:SSZON 01' 'l'IIE CITY OF SU' BBRJfARDDlO
,.........UMJ:ZDfG NlD DDUlCTIIfc; 'l'HB BXBctJ'1'ZON OF
u-........r1' RO. 1 TO MU""_ PARTICIPATION AHD
DBVBLOPHDl'l' AGJUmIiBNT- AJlD MCufty-'l'ION
CBlft'BR SUBLBASB A1Q) OPDATIMG ACmEBNBHTM
WBIlllBAS, the Redevelopaent. Aguay of the Cit.y of
San Bernardino (the MAgencyM) and the cit.y ~ San Bernardino ('the
.Cit.y.) have previoualy entere4 inw c:ert:a1n avre_ne. with
Marulto, Ino. (the MRec!evelopern) for purpo... of un4ll:r1:lIldlllJ and
oOllpl.einq a redeveloPll\4lftt. project. involvinq 'the ooftllt.ruot.lon ot
a certain hotel aCtj acent. t.o the Convention CentelC', .. well .. the
operation ot the convention Center ('the MPrajec1:-), 10cate4
within the Central City Rec!evelopaent Projegt Ar.. (the MPlC'ojeot:
Area"); IInd
WHERBAS, the Itedeve10per of the PJ:ojec1: hu subait:t:e4
to the Agenoy and t.o the city evidenoe that. the ReI:Ieve~oper hae
enCOWlt.erecl unexpeoted financial diftic:u1tie. in the operat:iOD of
the Project .. the re.ult ot genera1 econOllic condition.,
neoe..itat1nq the tilinll of a bankruptcy proceeding, and that 'the
continued operation of the Projeot require. city lIlId Agengy
aaai.t:lIlICleI and
WHERBAS, the continued operat.ion of the Project 1. 1n
'the publio intueat in that the Projec1: repr..em. the
redevelopment of real property in the Projec1: Area, pursuant w
the COlllllunity Redavelopll8l1t Law of the st:.e. of california, .ha.
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.e.thetically iIqlrovecl real propert:y within 1:he 1Iz'0ject AJ:.., h..
oreatad _ployment opportWll1:ie. for reddent:lt of 'the City );loth
within and out:ltiele of the Project Area, has eUlllinat:ecl bligbt,
baa enhanced real propu'1:y value. in the Project: AJ:e. .nd ha. anel
will venerate .ale. i:ax re".nu.., propert:y i:ax incr_nt revenue.
and tran.iant oc:av.panQ]t' tax revenue., and
WHBRBAS, 1:he exeoution ot the propo.1Icl Ul8l\ctllent to the
&9%'...ent. between the partie. thereto would provide a..istance
to the Re4evelgper by aclvanolft9 at an earlieI:' time carloain ___
whic:h would otherwi.. be due, under th. priol:' alJr.aaant. betw.en
th. parti.., to the .edavelgpel:' ovU' an extended period of tiIIle,
While providiDCJ con.lderatlon to the City and Agency for .0
doinq; and
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WHDBAS, It 1. rea.onabl. and appropriate to apprOVll
and cau.e the execu.tion of en ...Delaent to the vU'iOWl alJZ'._nt.
pertinant to th. Project.
NOW, 'l'IIJ!lRElPOJt, TBB COMM1l1fIft DBYBLOPKIDIT COHtlISSIOIf,
AC'l'IlfQ 01f BEHALF OJ' TIm RBDJMSLOI'ICENT AGEKCY OJ' TIlB CITY OJ/' SAN
BDNAJtDIIIO, DOBS JlERBBY DSOLVB, DETDMIHB AIm OIU)& AS J'OLLOWS~
S.cUon 1. The comd..lon hereby approv.. that certain
AJlandUnt No. 1 to the "OWner .artiolpatlon an4 ee""loplMnt
Agrenent- .nd "COnventlon Canter OperatlD9 A9Z'__nt" (1:he
bBncllllmt..) by and DOng tb. city, the Agency anel the
Redeveloper, substantiallY 1n the fora and content .s ..t forth
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in Exhibit "A" attaehM hereto ancl incorporated here1n by
reference. Zn recognition ot the pencliDlJ l:Ianknptoy procea4iDq
aDd the M1ce..ity to obtain approval of the tru.ue 1n baJlJcrup'tcy
an<< the CoUZ"t, the <:hairaan and secretary of the COJIIlI1..1oD are
hereby author1zed lUllS direct.'" to axecute the AlUmcllllent for ancl
on behalf of the ACJlmcy, atter nac...uy approval. have baeD
o1:l'tainad froa the tn.t_ ill bar1truptcy lUI4 the court:.
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SlIel:.J.OIl 2. RaCOVJ'Iidq 1:I1e need tOZ' tur'thu' po..ible
neqotiatioll ot 1:be teJ:llUl lUI4 conclitioMl ot the .AlMi1l4ma1lt: in order
'to obtain 1:be concurrenoe of the Redeveloper'. bankruptcy
counsel, 1:be tn.tee ill blUlkrllptoy and the court, r.vi.lolU1 to
the AIIIendaent may IN _d. after 1:I1e adoption of thi. RaaolUtiOIl,
provid:l.nq (i) Auoh ohanq.. do not: alter the ba.:l.c intent of the
AIIIanclmllftt and (11) .uch cblUlCJe. are approved by 1:11. ChaimaJl lUI4
AcJlUIcy Coun..l.
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JlL 17 '92 11= 26RM
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A USOLU'l'ION OP TIll: COIIHUNITY DKVBLOPIIDI'r COMMISSION OF THE CITY
01' SAM BJ1UIlUIDINO AUTHOJUZIIfO AND D:IRBCTING TIIB BXBCtI'J.'IOW OJ'
AIIBNDHBN'1' NO. 1 TO -OWJID PARTICIPATIOW AND 0lN1!:LOPMB1C'r
AGREBIIEN'l'- AND -CQNVIDITIOH cmrrBR SUBLEASB AHD OPBItATING
AGREIlKENT-
Baee.ion 2.
'1bIa :a.aolut:ion aall take eff~ upon
t:he date ot 1t:. adoptIon.
I HBRBBY CUTIn that: 1;be torecJolnv a.solution waa duly
aclo~ecl by 1;be comauntty Developent eo..is.Ion ot the cit:y of
San Be~rd1no at: a
thereot, held OD the
lIeeUnq
day of
,
1"2, by t:he followln9 vote, to wit:
~nmmi..ian v__~r.,
mI
ABSTAIlf ~UDT
J.UI
BST1W)A
DILLY
HBNlAllDBZ
HAUD.LEY
KINOR
POPB-LUDLAM
KILLER
-
day of
s.cret.ary
Tha tcralJOinq ruolution i. hereby approved t:hl.
, IIIZ.
W. R. BolcOllW, Cha~n
eo.munity Develop.ant
comai.alon of t:he
City of San Bernardino
Approved a. to
fona and l.,al c:ontanta
By:
ACJency eoun.el
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JU... 17 '92 11 : 26R'I
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STATB or CALIFOR1UA )
COllJl'l'l/ or SAN BBRJIAllDINO I ..
CITY or SAIl B2RNUDDfO )
:I, seorat:ary of tha ccmaunity
D8V81opment Coa.1..1on o~ ~e C1ty of San Bu:nard1no, DO BBRBBY
CBR'l'IFY that th8 fOl'eCJoing a1\4 attach., copy of COIIIIIUn1ty
DeVelopmant coai..ion of the City of San Bernardino ..solution
No. is . full, tne and aorract copy of that now on
fila 1ft thi. Offiea.
IN W:ITNBSS 1lBBRBOP, I have herlNn'to .et 'lIlY hand and
affixM th. official _al of the COllllllUnlt:y DavaloplHn't commisslon
of the C1 ty of SUI BeJmU'41no t:hb day of
, 1992.
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Secretary of the
cOlllllun11:y Development c0IIIII1..lon
of the city of San Bernardino
e-I
JlL 17 '92 12:32PM
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AMBNDMBNT NO.1 TO
"OWNER PARTlCIPAnON AND DBVBLOPMllNT AGv......tBNT
AND
"CONVBN'11ON CBNTlm SURr :R4S2 AND
0PliItA'IING ~ml!RRV1lIlI1T"
'I1U A1neIIclmInt No. 1 (the " ~""""......t") b IIIlawd inlD II of the day
of . 1992, by IIId IIDllIII the City of SaIl BcmardiDo (the "City"), tbe
RedeveIopmeDt ApAcy of the CilJ of SaIl Bemudlno (tbe "Apnoy") IIId Marullo, Inc. (the
"1ecIeYe1qler"), u tbe PartIea 10 tbe "e>wn. PartIcIpatIoD IIId Deve10pmIIlt Apwment" (tile
"OP&DA") IDd by IDd 1>o\Weell tho City aad the BccIeve1Dpcr, ulbe PartIea to tho 'CaaveDtioa
Cen_ Subleue and ()pentInJ Apement (1bIl "ep-.tftJa Apemeot").
.. 'R'Rt'!rrAt JI
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WBBRBAS, tho City, tho 1ipDI;y'lIIId 'the ~ en1mIcI into a ~
OWIIerPartlclpltlon and DeveI.clp1neul~ ~ Ihil ~was toCXlllJtruct and
~ a hotel, aDd the City aDd the bIeveloper ealeIecl into a ClCrtaIn CotIveatloa Center
So.h'-., and 0peratIq Apcemeat wbcnby Ibe RecIevelqlcr WllIIto _'eaw IDd operate the
CcIm:odm Center tacmdes in c:oajuDcdon with ita botel Of""rlnn'l; and
WBBRBAS, the hotiel was CllIIItrucIed and bas been "V""'tcd by the BcdcYclopet
in ccqunctklll wJth !be Convention Center &dUties; and
, WBBRIWl, the Rcdcvdopct Iw aICIOlII1l1nd ICVaIl f1.....d-1 diftk:nltlea as a
.... result of .enera1 tcO"oml~ coadilioDl, which cIiftIcultllll baVe DeCeI.....\ed the 1IIiDI of a
bIoJaupt.oy lUCI ~I by the Redeveloper; aDd
WARV.BAS, tho RedMIoper bu demoastrated to tbe City and tile Aaeacy thBt
fl...llCial ...I..P"O to tbo RaIeYeloper 11 DeCllIR1}' if tho ClllDlion of tho boIel, and tho related
operation of the CaavcmIoa Center fac:llltle. by tho RDvetoper, 1110 CGIldnuc; lIDd
WBBRBAS, tbe City lIIId the Aafllll:Y deem. it 10 1>0 in tho pub1ic inteIest th8t the
opntIoo of tbo hold. aad Convmtion Cealllr l:ODtiDue wilbaut inteauptlOll.
NOW, THBRBFORB, the puties heleto qreo II follows:
~'WI
1. Any lIemU DOt d"fI-t henm shsll have tbo mMnlllp II provided In tbo
OP&DA or ep-.~"I ApeemeAt, whlc:llevw Is appIbble.
2. The ReclevekJper hcnby IdmuwlaJpl receipt of a c:ash &1I1OUIIl equal 10
$400,000 0t1 tile cIate of execadOl1 of tbiI.AlIIlWltnMt u an advm:o PaYlMIlt far S8E0,OOO of
lu.cI punuaat to tho OPIcDA which paymcut 11 made subject 10 tho terms of thla AmcDdmmlt.
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JlL 17 '92 12:33PM P.3
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The~, City IIId Apncy IIftlIl tbat such S4OO,ooo c:uh payment to the BedeveIDper
is a fair IIId eqvila1)Je pre-~ot value cIeIietmilIItla of u:b S860,ooo adwnce Paymeat of TUIII
buod upon a ~y laUCIl1Iblo dIJcouat 1UIDr IDlI a JII'ObabJe time period of the ~
"'. at sudI tutme Paymea1L Upon Ieceipl by tile lledeYe10per of such S4OO,ooo pl'mnt value c:uh
...., 1ID01IDt, die RecleYeIapIr IbaJ1 i"'......IIIIl)'lIIDit aD IIBOIIllt equal to $7,500 to tile ApDt;y for
ftilmbunemeGt to tho A&a1J;y of iliff, Ieplllld caasullIDt COItIIIId ~- iDcuued in tho
pmparadon and ~.tlOll ofdds A~. The Redeveloper 1IIrIber IDImowlec\pl tbat tile
ApDt;y'. ob1iptlnn ~ the OP&DA to malt .3,000,000 JnPa)'lhtl~ to Ibe BedeYeloper baa
beeIl JecIuced by Ibe IIDOl1Dl of I1Ic:h S860,ooo adwace Payment heRby ~ in Iddidon to
I1Ic:h otber amounts of Payments eq1ll1liq "l'l'A,wmately S439,5l!9 as previouIly lICIlvecl by
tile llecklve10per since die CnmIlWJllllmeDt Dale.
3. The llecleveklper 8Dd tile AptJDy IIClOpize IIId .. tbat ce.dain l:apital
L.4-.emenlllllAY be desirable to the polt1OIl of die baret that fronts a10q "B" Street. SDCIl
l:apital impmvements as may be bematW ideadfted IbaJ1 be lntpllod to implVW die appeIl'IIICO
at \be hotelllld to allow for p""'....mI.n UIftIc to JdeIIlity tile ....-ItlM ....-Inoed In the hotel.
n. ~ IIId the ApII;y lIhIJl ~ In JOOd faith as to tbo DaIIn of IIIdI cap1111l
ilDp1'OYClll(1lts, \be ~ndl"llO\ll'ClO aDd Ibe tlmo podod w1Ibln whk:h to complete Ihe COIIItrUotloD
of such l:apital improvements.
,.
, S. Tho Jut IalIa1ce is rov.IIecl UMt a DeW IelllalQO isldclecl to Secticla 2.23
at the OP&DA to lead as fo1Iowa:
"'I1to total of III PaylDGIltI IhaJl not, In tho ~,
"'~ the IUDl of 53,000,000 or IIICb lei.- IIDCIlInt as may be
paid ell thOle Payment DaW which occur prior to luly 20, 2003.
Tbe ~ may PRPaY any Pa}'JllClltl due iIcmwicr IlIllY tlme
or from dmHo-time In its_ "'"""""011, aDd tile Ap1cy II1II1,
willi the COIIHIIt of tile RecIevelaper, maIIIe aDY advaDce Paymeall
In .uc:h}RlOll& wlue .,..00"" as may be apeecI to by and between
1he AIfAIeY IIId the Itedeveloper. .
6. Soctioa S.l of Ibe OP&DA isllllCllCled to lad as~:
4. SClCtlon 2.10 of the OP&DA is un....,w to 1'I8l as fo11uwJ:
"SBCTION 2.10. 1'l*'-tlvoo TIml. "Bft'octl:w Term" IhaJl
melD the period from tho ComINlll~.eat Dale IIl1lil 0wIIcr bu
received a IUlD of Paymeata wblch, In the ..... is JIOt in
__ of the sum of $3,000,000 or IUllh Jeuer amount as may be
paid ell thole Payment DateI wblch ocour pDar to luly 20, 2003. "
"SBCl'J.ON 5.1. Pa~t of'D..!""""_ A_om......
PIovm....llI. .Apm;y sbaI1 pay ov.- to RecleveI.oper, 011 ach
Paymeat Dale, ID IlIIOUllt eqlllllO the payment, undllUd1 time as
die IUlD of tile IIII1O\I/1llI paid...... eqaala $3,000,000 durlna
tho Bftectivo Term. -
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JlL 17 '92 12:33PM P.4
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7. Sodlon 6.1(1,) of Ibc OPIcDA is IlmCIldtId lD 1.d . toDows:
"(a) Opento tho Holel in & fJnt c1uI............ and IimiJar
to Ibc qllllil)' . Jl""lunn HoIIIls ID JIl..-t1y bciJJI opmatcId. "
8. Section 6.1(c) oflbc OPIcDA is arnoqdccllD 314. 1'o11OWJ:
"(0) (i) WitlUll . (6) IIlOIltbI flom tile _ of
Ameadmeat No. 1 to thbi Apomcat and lbcnafIw durJDa tho
term of this ~t, openI8 tbe HofeI \IIIdet the Dame of
"Jl'lldlllO"" or an)' ok name apptOYId by the AIfI4CY in itllllle
cIisc:tctkla 10 be comparable to J1..u~ II of the dale ol ~t1oa
of Am....d.....t No. 1 to this ~t: IIId
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(Ii) Tbe RedeveIopcr COVCIIIIltl uuI WlmllltI tbc
Botel sba11 be CllIItlnllOUl1y opeIIlId u & }lalll....... clurlJla the term
of this Apement with DO iDlItruptioD in operatiou ol the Hotel
for mom than a Iin&Ie CIClIlJlICUdw Iixty (60) cI&y paiod caIwIatecI
OIl a all~ clay bIIis wlthout tile pllor exptaI writIeD. COJIIIIlt
of the Apn;y baviq fira bMll oblIlnecl..
9. A new Seetlon 7.2(1,) of tile OPIcDA II &cIded to Jead II toDows:
"(0) In tho ovcat of a default urKicr Sec:tion 7.1(&) for
failure to comply with Sectlon 6.1(C) II amended by Amen4m.erlt
No. 1 to thiI Apemeat, the Apacy'. ""19tJa11 to remit furIber
Paymcata sba11 be imm~i,~y 1andnated upon tbc A,CIII;y havlDa
III.,-...bed nolh!e to the lledeveIopu of lidlure of tbe Developer to
comply with Secti01l 6.1(0)..
10. SectIon 11.2 ol the SUbleale IIId 0pentIDa Ajreemeat II amended lD read
u follows:
"SBCI'ION 11.2. Udlity Ch_. S1Ibleaee sba11 be solely
JeIllOIIIlb1e tor and 'promptly pay 111 c:barpm uuI biDs from udlity
Ci>'III!_..I- for beat, walIIr, pi, .,l~clty and any otbclr utilil:y IIIIllI or
0CIlI1lIIIIlId in tbe VA'" PremiJeI, wbidl may be billa from the utility
~y lUllliylJll ad1 .mo, billI nDCIolecI u a !UIlt of c:omputlDi
UIIp by way of JUbmeters, or u COIIlpUled by an electrical survey,
pedbuDe4 by aD eGlity l'eUOlI8bly acceptIble to SUlllellOt. Subl8l1Ol'
shall DOt be ~b1e to Sub.. for aDY amountI that Sub1cIIOt hid
pI8WJuI1y Iped to pay to Sub__ under tIds Subleue. ·
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JlL 17 '92 12:34PM
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WBBRBPORB, ill MnlIldoondlon of lbIl mulull CXJVeIWItI eoolIlned bereln, the
partiea IIe:reto bere:inafta' subJcribe their si"..b......
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RBDBVBLOPMBl\1T AGENCY OF TBB
Cll'Y OP SAN BBBNAltDJNO
By:
W.R. Holcomb
CbainnIlI
APPROVED AS TO FORM AND
LBGAL CONI'BNT:
By:
ApIICJ Colmaol
CITY 011 SAN BBaNAltDINO
By:
ATI'IlST:
W.R. Holcomb
Mayer
at)' CJcrk
APPROVJm AS TO FORM AND
LBGAL CONTBNT:
, 1&l1l8I P. Penman
''-0 at)' Attorney
By:
MARUXO, INC.
&1",-. e.....~
By:
Ita:
By:
Ill:
APPROVED AS TO FORM: AND
LBGAL CONTBNT:
By:
AUoilleyJ for lledcveloper
_\IlllC\II7
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