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HomeMy WebLinkAboutCDC/2008-08 .' l' , . , 1 2 3 4 5 6 7 8 9 10 11 RESOLUTION NO. CDC/2008-8 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO ("COMMISSION") (1) APPROVING AMENDMENT NO, 1 TO THE 2006 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND HSB 1-215, L.P., A CALIFORNIA LIMITED PARTNERSHIP AND SE 1-215, L.P., A CALIFORNIA LIMITED PARTNERSHIP (COLLECTIVELY, REFERRED TO AS "DEVELOPER"); (2) AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE SAID AMENDMENT NO.1; (3) APPROVING THE WATER STORAGE CAPACITY PAYMENT AGREEMENT ("AGREEMENT") BY AND BETWEEN THE AGENCY AND THE SAN BERNARDINO MUNICIPAL WATER DEPARTMENT ("SBMWD"); AND (4) AUTHORIZING THE CHAIRMAN OF THE COMMISSION TO EXECUTE THE AGREEMENT WITH SBMWD (STATE COLLEGE REDEVELOPMENT PROJECT AREA) 12 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), is a 13 public body, corporate and politic, existing under the laws of the State of California, Health and 14 Safety Code 33101, and is charged with the mission of redeveloping blighted and underutilized 15 land; and 16 WHEREAS, the Agency and HSB 1-215, L.P" a California limited partnership and SE 1-215, 17 L.P., a California limited partnership (collectively, referred to as "Developer") entered into that 18 certain 2006 Disposition and Development Agreernent dated as of September 18, 2006 (the 19 "DDA"), for the acquisition by the Developer of certain Agency-owned property and the disposition 20 to the City of San Bernardino (the "City") of certain property of the Developer for public right-of- 21 way purposes in furtherance of the construction of the grade separation crossing on University 22 Parkway over the railroad tracks of the BNSF Railroad; and 23 WHEREAS, the DDA provides for the reimbursement to the Developer from the Tax 24 Increment Revenues (defined in Section 3,09(d) of the DDA) of the Reimbursement Amount as 25 defmed in Section 3,09(c) of the DDA and as further provided in Exhibit "L" thereto; and 26 WHEREAS, after the Developer has received all entitlement approvals from the City and 27 frorn the City of San Bernardino Municipal Water Department (the "SBMWD") and paid all 28 required fees to the SBMWD, the Developer commenced construction of the private improvements 1 P:\Agendas\R.esolutions\Rel:lOlutions\2008\02-19-08 Hillwood Amendment No I CDC Reso,doc . . " 1 upon the property that is subject to the DDA, and, thereafter, the SBMWD received a Water Master 2 Plan report from an independent engineering firm identifying certain deficiencies in the SBMWD 3 water distribution system and water storage system and setting forth the potential inability of the 4 SBMWD to serve the fire flow requirements that may be required by the development to be 5 undertaken pursuant to the DDA; and 6 WHEREAS, the Agency and the Developer seek to work in cooperation with the SBMWD 7 to alleviate water system deficiencies as identified by the SBMWD in their master plan analysis as 8 recently concluded by an independent water system engineering firm after the date that the 9 Developer received all entitlement approvals from the City and the SBMWD in a rnutually 10 satisfactory effort to assure adequate water service for the project of the Developer and the other 11 businesses and residences in the vicinity of this project; and 12 WHEREAS, in an effort to assist the SBMWD in their funding requirements to assure the 13 completion of a 4,000,000 gallon capacity ground level water reservoir at the SBMWD property at 14 the intersection of Cajon Boulevard and Palm Avenue (the "CajonIPalm Water Reservoir"), the 15 Agency and the Developer have agreed to equally share certain costs on a 50150 basis as determined 16 by the SBMWD to be the shortfall amount not to exceed $613,000 as shall be shared between the 17 Agency and the Developer; and 18 WHEREAS, the Agency, in exchange for the Developer agreeing to advance one-half of the 19 not to exceed $613,000 amount has agreed to amend the DDA pursuant to Amendment No.1 20 attached hereto as Exhibit "A", to thus allow the Developer to increase the dollar amount of the 21 Reimbursement Amount as defined in the DDA payable from the Tax Increment Revenues of the 22 project as provided in the DDA and pursuant to the Agency Tax Increment Revenues Promissory 23 Note (Exhibit "I" to the DDA); and 24 WHEREAS, the Agency, concurrently with the execution and delivery of the Amendment 25 No, 1, has entered into a certain agreement with the SBMWD entitled "Water Storage Capacity 26 Payment Agreement" dated as of January 15,2008, by and between the Agency and the SBMWD 27 (the "Agency/SBMWD Agreement") which Agency/SBMWD Agreement as referenced in Exhibit 28 "B" (see attached Exhibit "A" to Amendment No.1); and 2 P:\Agendas\Resolulions\Resolutions\2008\02.19.08 Hillwood Amendment No. I COC Reso,doc . . . " 1 WHEREAS, the Agency/SBMWD Agreement will assure the continued water supply for 2 current and future development projects within both the State College Redevelopment Project Area 3 and the Northwest Redevelopment Project Area of the Agency for which the Agency may seek to 4 encourage subsequent development projects in both of said redevelopment project areas; and 5 WHEREAS, the City required the Developer to incur costs of construction of oversizing 0 6 the storm drain collection system to be installed upon the project identified in the DDA which 7 caused an increase to the costs of construction related to the overall storm drain and water detention 8 basin improvement from the original estimated amount of $1,260,000 to a current amount equal to 9 $1,697,273; and 10 WHEREAS, the original Reimbursement Amount set forth in the DDA has increased from 11 $3,630,000 to $4,373,773; and 12 WHEREAS, it is appropriate for the Community Development Commission of the City 0 13 San Bernardino ("Commission") to take action with respect to Amendment No, 1 ofthe DDA with 14 the Developer and the Agency/SBMWD Agreement and to approve Amendment No.1 of the DDA 15 and the Agency/SBMWD Agreement as set forth in this Resolution, 16 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE 17 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS 18 FOLLOWS: 19 Section 1, The information set forth in the above recitals of this Resolution is true and 20 correct. 21 Section 2. The Commission hereby approves Amendment No. 1 to the DDA. The 22 Interim Executive Director is hereby authorized and directed to execute Amendment No, 1 to the 23 DDA on behalf of the Agency together with nonsubstantive and conforming changes as may be 24 recommended by the Interim Executive Director and Agency Counsel. The Interim Executive 25 Director is hereby authorized to take all appropriate actions as set forth in Amendment No, 1 of the 26 DDA to accomplish the purposes of Amendment No.1, 27 Section 3, The Commission hereby approves the Agency/SBMWD Agreement. The 28 Chairman of the Commission is hereby authorized and directed to execute the Agency/SBMWD 3 P:\Agendas\Resolutions\Resolulions\2008\02-19-08 Hillwood Amendment No. I CDC Rcsodoc , , . 1 Agreement on behalf of the Agency together with nonsubstantive and conforming changes as may 2 be recommended by the Interim Executive Director and Agency Counsel. The Interim Executive 3 Director is hereby authorized to take all appropriate actions as set forth in the Agency/SBMWD 4 Agreement to accomplish the purposes ofthe Agency/SBMWD Agreement.. The Resolution shall become effective immediately upon its adoption, 5 Section 4, 6 //1 7 //1 8 //1 9 1// 10 1// 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// 26 1/1 27 1// 28 //1 4 P:\Agendas\Resolutions\Resolutions\2008\02-19-08 Hillwood Amendment No. I CDC Reso.c;Io(: 1 2 3 4 5 6 7 8 9 10 RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDINO ("COMMISSION") (1) APPROVING AMENDMENT NO, 1 TO THE 2006 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO ("AGENCY") AND HSB 1-215, L.P., A CALIFORNIA LIMITED PARTNERSHIP AND SE 1-215, L,P" A CALIFORNIA LIMITED PARTNERSmp (COLLECTIVELY, REFERRED TO AS "DEVELOPER"); (2) AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE AGENCY TO EXECUTE SAID AMENDMENT NO, 1; (3) APPROVING THE WATER STORAGE CAPACITY PAYMENT AGREEMENT ("AGREEMENT") BY AND BETWEEN THE AGENCY AND THE SAN BERNARDINO MUNICIPAL WATER DEPARTMENT ("SBMWD"); AND (4) AUTHORIZING THE CHAIRMAN OF THE COMMISSION TO EXECUTE THE AGREEMENT WITH SBMWD (STATE COLLEGE REDEVELOPMENT PROJECT AREA) I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community 11 Development Commission of the City of San Bernardino at a i ointrregular February, 2008, by the following vote to wit: 12 thereof, held on the 19 th day of 13 Commission Members: Aves 14 ESTRADA ----X- 15 BAXTER x 16 BRINKER x - 17 DERRY x 18 KELLEY -L 19 JOHNSON x 20 MC CAMMACK x 21 meeting Navs Abstain Absent ~- Secretary 22 The foregoing Resolution is hereby approved this .;2/sr- day of February 23 24 25 26 27 Approved as to FOfJI-rm. 28 By: ~-~ Agency C sel ,2008. CU"-\t -" orris, n 'ty Development Commission of the City of San Bernardino 5 P:\Agendas\ResoJutioTl5\Resolutions\2008\02-19-08 Hillwood Amendment No.1 CDC Reso_doc - EXHIBIT "A" to Resolution Amendment No. 1 (2006 Disposition and Development Agreement - Hillwood) II!IE'" CDC/2008-8 AMENDMENT NO.1 2006 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND H~B 1-215, L.P, A CALIFORNIA LIMITED PARTNERSHIP AND SE 1-215, L.P" A CALIFORNIA LIMITED PARTNERSHIP DATED AS OF FEBRUARY 19, 2008 'n CDC/2008-8 AMENDMENT NO.1 2006 DISPOSITION AND DEVELOPMENT AGREEMENT BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO AND HSB 1-215, L,P, AND SE 1-215, L,P, THIS AMENDMENT NO. 1 TO THE 2006 DISPOSITION AND DEVELOPMENT AGREEMENT (this "Amendment") is entered into as of February 19, 2008, by and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic (the "Agency"), and HSB 1-215, L.P., a California limited partnership, and SE 1-215, L.P., a California limited partnership (collectively, "Developer"). RECITALS WHEREAS, the Agency and the Developer entered into that certain 2006 Disposition and Development Agreement dated as of. September 18, 2006 (the "DDA"), for the acquisition by the Developer of certain Agency owned property and the disposition to the City of San Bernardino (the "City") of certain property of the Developer for public right-of-way purposes in furtherance of the construction of the grade separation crossing on University Parkway over the railroad tracks of the BNSF Railroad; and , WHEREAS, the DDA provides for the reimbursement to the Developer from the Tax Increment Revenues (as defined in Section 3.09(d) of the DDA) of the Reimbursement Amount as defined in Section 3,09(c) of the DDA and as further provided in Exhibit "L" thereto; and WHEREAS, after the Developer had received all entitlement approvals from the City and the all approvals from the City of San Bernardino Municipal Water Department ("SBMWD") and paid all required fees to the SBMWD, the Developer commenced construction of the private improvements upon the property that is subject to the DDA. Thereafter, the SBMWD received a Water Master Plan report from an independent engineering firm identifYing certain deficiencies in the SBMWD water ~istribution system and water storage system and setting forth the potential inability of the SBMWD to serve the fire flow requirements that may be required by the development to be undertaken pursuant to theDDA;and WHEREAS, in an effort to assist the SBMWD in their funding requirements to assure the completion of a 4,000,000 gallon capacity ground level water reservoir at the SBMWD owned property at the intersection of Cajon Boulevard and Palm Avenue (the "CajonlPalm Water Reservoir"), the Agency and the Developer have agreed to equally share certain costs on a 50150 basis as determined by the SBMWD to be the shortfall amount not to exceed $613,000 as shall be shared between the Agency and the Developer, and the Agency net portion thereof shall be reimbursed from the Tax Increment Revenues on a priority basis as further set forth herein; and WHEREAS, the Agency, concurrently with the execution and delivery of this Amendment, has entered into a certain agreement with the SBMWD entitled "Water Storage Capacity Payment Agreement" dated as of January 15, 2008, by and between the Agency and the SBMWD (the "Agency/SBMWD Agreement") which Agency/SBMWD Agreement is attached hereto as Exhibit "A" and incorporated herein by reference; and 4818.7233-j)242.1 1 P:lAgendaslAgenda AttachmentslAgnnts-Amend 2008\02-19-j)8 Hillwood - Amendment No. I.doc I' ,,",",-. CDC/2008-8 WHEREAS, the Agency, in exchange for the Developer agreeing to advance one-half of the not to exceed $613,000 amount has agreed to amend the DDA pursuant to this Amendment to thus allow the Developer to increase the dollar amount of the Reimbursement Amount as defined in the DDA payable from the Tax Increment Revenues of the project as provided in the DDA and pursuant to the Agency Tax Increment Revenues Promissory Note (Exhibit "f' to the DDA); and WHEREAS, the City required the Developer to incur the costs of construction for the upsizing of the storm drain collection system to be installed upon the project identified in the DDA which has caused an increase to the costs of construction related to the overall storm drain and water detention basin improvements from the original estimated amount of $1,260,000 to a current amount equal to $1,697,273, and the parties seek to increase the dollar amount of the Reimbursement Amount from $3,630,000 to $4,373,773 based upon the costs incurred to upsize the storm drain collection system and for the payment required by the Developer based upon the Agency/SBMWD Agreement, subject to the same conditions for reimbursement as set forth in the DDA. The Agency and the Developer hereby agree to amend the DDA based upon the Recitals as set forth above in the manner as follows: Section 1. The Developer recognizes and concurs in the Agency approval and execution and delivery of the AgencylSBMWD Agreement and the provisions contained therein relating to the 1 Developer being a third party beneficiary to said Agency/SBMWD Agreement. The Developer agrees I. to remit to the Agency upon written request in the manner and at the times as provided in the AgencylSBMWD Agreement one-half of the Agency Payment as defined in the AgencylSBMWD Agreement that shall be equal to a total financial liability of the Developer not to exceed $306,500 (the "Developer Payment"). Failure of the Developer to remit the required Developer Payment to the Agency pursuant to this Amendment will be deemed to be a default pursuant to Section 5.01(c) of the DDA, but without the applicable extensions of time as provided in Section 6.05 of the DDA, and the Agency shall thereupon be entitled to pursue remedies in the manner as specified in Article V of the DDA, Section 2. (a) Upon the payment by the Developer to the Agency of the amount of the Developer Payment required pursuant to Section 1 above, the Reimbursement Amount as defined in Section 3.09(c) shall be increased by the amount of the Developer Payment as actually remitted to the Agency. Additionally, Exhibit "L" to the DDA shall be amended to include a new Section A.4. and Section C. shall be added to read all as follows: "4. Actual costs equal to the remittance of the principal amount of the Developer Payment to the Agency pursuant to Amendment No.1 to the Agreement but not to exceed $306,500." "C. Notwithstanding any other provisions contained in this Exhibit "L", to the extent the Developer has remitted the Developer Payment to the Agency, the maximum Reimbursement Amount shall be increased by an amount equal to the Developer Payment not to exceed $306,500; provided, however, that the limitations for each line item maximum as set forth in A.I" A.2. and A.3. above shall continue to be applicable," (b) The Developer shall continue to have the obligation to comply with all provisions of the DDA with respect to the increase in the Reimbursement Amount as authorized pursuant to this Amendment, including, but not limited to, compliance with all provisions of 48J8-7233.()24Z.I 2 P:lAgendaslAgenda AttachmenlslAgnnts-Amend Z008\02-19-1)8 Hillwood - Amendment No. I.doc ") _'0 CDC/2008-8 Section 3.09 of the DDA, the Agency Tax Increment Revenues Promissory Note (Exhibit "I" to the DDA), and the provisions of Exhibit "L" to the DDA, Section 3, As of the date of the DDA, it was contemplated that the costs referenced in Section A.3 of Exhibit "L" to the DDA would not exceed $1,260,000. Such work now has been completed, and the actual cost thereof is $1,697,273. Accordingly, the Agency and the Developer agree that such actual costs are eligible for and should be part of the Reimbursement Amount rather than the originally estimated costs as set forth in Section A.3 of Exhibit "L" to the DDA. Therefore, the figure of "$1,260,000" as used in Section A.3 of said Exhibit "L" shall be amended to be "$1,697,273". Section 4, The dollar figure of "$3,630,000" as used in the following Sections of the DDA shall be amended to read "$4,373,773" as noted herein: (i) Section 3.09(d), (ii) Sections 1.10 and 11 of the Agency Tax Increment Revenues Promissory Note (Exhibit "I" to the DDA), and (iii) Sections A.3. and B. of the Reimbursement Amount, Exhibit "L" to the DDA. Section 5. Notwithstanding anything to the contrary provided in the DDA, prior to any payment to the Developer of the Tax Increment Revenues for the repayment of the Reimbursement Amount, the Agency shall retain from amounts that otherwise would have been paid to the Developer an amount equal to 50% of the funds paid by the Agency to SBMWD under the AgencylSBMWD Agreement not to exceed $306,500, which dollar amount represents the net amount payable by the Agency after taking into account the Developer Payment to the Agency as provided in Section 1 above. Said amount shall be retained by the Agency free and clear of any claims of the Developer prior to the payment of the Tax Increment Revenues to the Developer for the Reimbursement Amount. At such time as the Agency has been paid in whole from the Tax Increment Revenues otherwise payable to the Developer pursuant to the DDA, the provisions for the payment of the Tax Increment Revenues to the Developer as provided in the DDA shall be operative for further payments of the Reimbursement Amount as set forth in the DDA. Section 6. Attached hereto as Exhibit "A" and incorporated by reference is the Agency/SBMWD Agreement as executed and delivered by the Agency and the SBMWD containing the concurrence of the Developer as the third party beneficiary to said Agency/SBMWD Agreement. Section 7, This Amendment shall take effect upon its execution and delivery by the Agency and the Developer and shall remain in full force and effect for the term of the DDA unless otherwise amended, changed or modified with the written approval of the Agency and the Developer and otherwise as provided in the DDA, as amended. //1 //1 //1 48 I 8-7233-j)242. I 3 P:lAgendaslAgenda AltachmentslAgnnts.Amcnd 2008102-19-j)8 HilIwood - Amendment No. I.doc ") .. CDC/2008-8 IN WITNESS WHEREOF, the parties hereto have duly executed this Amendment as of the dates set forth below and this Amendment is effective as of the date set forth in the introductory paragraph hereof. AGENCY Date: Redevelopment Agency of the City of San Bernardino, . """Ii, bod,: ~~liti' BY:~ Emil A. Marzullo, Interim Executive Director Approved as to Form gal Content: By: Agency Counse DEVELOPER HSB 1-215, L.P., a California limited partnership By: HSB GP, LLC, a California limited liability company, Its general partner By: HGIGP,LLC, a Texas limited liability company, its sole mernber By: HGI Group, L.P., a Texas limited partnership, its sole member By: Hillwood Associates, L.P., a Texas limited partnership, its general partner By: any, LLC, y, its general partner By: Name: f.S 5' Title: 4SIS.7233'()242.1 4 P:lAgendaslAgenda AttachmentslAgrmts.Amend 200S\02.19.()S HilIwood - Amendment No. I.doc i CDC/2008-8 SE 1-215, L.P" a California limited partnership By: HSB GP, LLC, a California limited liability company, Its general partner By: HGI GP, LLC, a Texas limited liability company, its sole member By: HGI Group, L.P., a Texas limited partnership, its sole member By: Hillwood Associates, L.P., a Texas limited partnership, its general partner By: y,LLC, y, its general partner By: Name: l~~ Title: 4818-7233-0242.1 5 P:\AgendaslAgenda AttaclunentslAgnnts-Amend 2008\02-19-08 Hillwood - Amendment No. 1.doc Ii CDC/2008-8 EXHIBIT "A" to Amendment No. 1 Water Storage Capacity Payment Agreement 4818-7233-242.1 Exhibit A P:lAgendaslAgenda AttacbmentslAgnnts-Amend 2008102-19.08 Hillwood - Amendment No. l.doc i CDC/2008-8 WATER STORAGE CAPACITY PAYMENT AGREEMENT (Hillwood Interchange Project) THIS WATER STORAGE CAPACITY PAYMENT AGREEMENT is entered into as of January 15, 2008, by and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate and politic, duly organized and existing pursuant to Health & Safety Code Section 33000, et seq. (the "Agency"), and the City of San Bernardino Municipal Water Department ("SBMWD"), by and through its Board of Water Commissioners (herein referred to as this "Agreement"). WHEREAS, the Agency has entered into a certain Disposition and Development Agreement dated as of September 18, 2006 (the "DDA"), with two (2) separate Hillwood Development Services entities identified as HSB 1-215, L.P., a California lirnited partnership, and SE 1-215, L.P" a California limited partnership (collectively, the "Developer"); and WHEREAS, the Developer has commenced construction activities on the Developer owned property identified in the DDA and has commenced the reconstruction and enlargement of the flood control drainage basin as previously owned by the Agency and as conveyed by the Agency to the Developer in furtherance of the on-site developrnent requirements imposed by the City upon the development project as contemplated by the DDA consisting of the construction of approximately 2,000,000 square feet of industrial distribution and warehouse buildings (the "Project"); and WHEREAS, the Developer and the Agency seek to work in cooperation with the SBMWD to alleviate water system deficiencies as identified by the SBMWD in their master plan analysis as recently concluded by an independent water system engineering firm after the date that the Developer received all entitlement approvals from the City and the SBMWD in a mutually satisfactory effort to assure adequate water service for the Project of the Developer and the other businesses and residences in the vicinity of this Project; and WHEREAS, the SBMWD has recognized the need to provide for the construction of a 4,000,000 gallon above ground water reservoir (the "Cajon/Palm Water Reservoir") in the area of . Cajon Boulevard and Pahn Avenue on property presently owned and improved by the SBMWD to provide adequate water service for the potential fire flow requirements that may be necessitated by the development of the Project pursuant to the DDA; and WHEREAS, the Agency has agreed to enter into this Agreement with the SBMWD to assure the continued water supply for current and future development projects within both the State College Redevelopment Project Area and the Northwest Redevelopment Project Area of the Agency, and the Agency seeks to encourage subsequent development projeCts in both of said redevelopment project areas; and WHEREAS, the Agency, concm;rently with the execution of this Agreement with the SBMWD, has entered into an Amendment No, 1 to the DDA with the Developer to fully implement the commitments made by the Agency to the SBMWD pursuant to this Agreement. NOW, THEREFORE, in consideration of the premises and other good and valuable consideration, receipt of which is hereby acknowledged, the parties hereto agree as follows: EDA-WaterDeptOl-02-08 1 P:\Agendas\Agenda Attachments\Agrmts.Amend 2008\02.19-08 Hillwood. Water Storage CapIlCity Payment Agreement.doc "Ii CDC/2008-8 ARTICLE I AGENCY PAYMENTS Section 1.01. Determination of Al!:encY Payments, The Agency hereby commits to pay to the order of the SBMWD an amount not to exceed $613,000 (the "Agency Payment"). The Agency Payment shall be remitted by the Agency representing the final dollar amounts required to complete the construction of the Cajon/Palm Water Reservoir after the SBMWD has expended all other funds required to be committed by the SBMWD for the completion of the Cajon/Palm Water Reservoir in accordance with the competitive public bid for the Cajon/Palm Water Reservoir without regard to change orders which may increase the cost ofthe construction of the Cajon/Palm Water Reservoir, Section 1.02, Scone of the CaionlPalm Water Reservoir, The parties recognize that the Cajon/Palm Water Reservoir shall be designed and constructed as an above ground water reservoir equal to 4,000,000 gallons of water storage capacity located at the present water well and water reservoir site at the intersection of Cajon Boulevard and Palm Avenue within the City. The SBMWD commits and agrees to contribute not less than $3,400,000 of SBMWD funds, loans, assets or subsequently issued municipal bond'proceeds, which together with the Agency Payment and other funds as shall be contributed by the SBMWD is intended to be sufficient to complete the design, environmental review and approval, site preparation and actual construction of the Cajon/Palm Water Reservoir, In the event the actual public bid for the construction, installation, labor and purchase of materials and supplies for the site improvements, additional water wells, pumps and booster stations, all ancillary facilities and equipment and the actual construction and installation costs of the Cajon/Palm Water Reservoir (said items are collectively referred to herein as the "Public Bid Items") are in excess $4,013,000, such additional costs for the Public Bid Items shall be paid by the SBMWD at its sole obligation with no further payments to be made either directly or indirectly by either the Agency or the Developer or any other customer of the SBMWD occupying a building located within the Project identified in the DDA Section 1.03, Time of Al!:encY Payment. Immediately upon the receipt and opening of the competitive public bids for the Public Bid Items, the SBMWD shall inform the Agency in writing as to the dollar amount of the lowest responsible bid that is intended to be awarded by the SBMWD by a 'date to be identified by the SBMWD in such writing to the Agency. After the award of such bid has been rnade by the Board of Water Commissioners of the SBMWD to the lowest responsible bidder for the Public Bid Items and the commencement of the construction of the Cajon/Palm Water Reservoir has occurred, the SBMWD shall provide an invoice to the Agency at least thirty (30) calendar days prior to the date that the SBMWD reasonably believes that the Agency Payment will be required to complete the contract payments payable to the general contractor for the Cajon/Palm Water Reservoir not to exceed the maximum amount of $613,000 as set forth in Section 1.01 hereof, ARTICLE II SBMWD OBLIGATIONS Section 2.01. Commitment to Pay Costs, The SBMWD hereby agrees to pay all of the following items prior to the commencement of the construction of the Cajon/Palm Water Reservoir: all design costs, rnaster plan and water systern evaluations and civil engineering; landscape engineering and design; environmental processing and consultant costs for all California Environmental Quality Act ("CEQA") and National Environmental Policy Act ("NEP A") compliance as necessary; all legal and accounting costs; environmental mitigation assessments and implementation measures and EDA-WaterDeptOl-02-08 2 P:\Agendas\Agenda Attaclunents\Agrmts-Amcnd 2008\02-19-08 Hillwood. Water Stonge Capacity Payment Agreement.doe n CDC/2008-8 including issues related to endangered species and obtaining replacement habitat; all permitting fees to public agencies and utility companies; right-of-way acquisition costs and other land assembly costs; utilities and utility service relocations; the costs associated with obtaining all required approvals and permits; and all other related non-construction costs (collectively, the "Soft Costs"). Notwithstanding the actual dollar amount of the Soft Costs to be paid by the SBMWD from funds of the SBMWD, the contributions from the Agency and the Developer in furtherance of the Cajon/Palm Water Reservoir shall not exceed the dollar amount of the Agency Payment as set forth in Section 1.01. Section 2.02, Provision of Water Service, In consideration for the Agency agreeing to provide the Agency Payment, the SBMWD hereby agrees to provide water service to all buildings and uses, including water for landscaping and irrigation, typical domestic and industrial uses and fire suppression, for the Project identified in the DDA regardless of the date of the completion of the Cajon/Palm Water Reservoir and with the SBMWD reserving the right to eliminate the need for the Cajon/Palm Water Reservoir in its entirety, Section 2,03, Modifications to SBMWD Master Plan, The commitments of the Agency are specific solely to the Cajon/Palm Water Reservoir and are not transferable by the SBMWD to any other facility or other location except with the express written consent of the Agency and the Developer each at their sole and absolute discretion, The SBMWD shall have the right at anytime to modify the SBMWD Master Plan and to delete the requirement for the Cajon/Palm Water Reservoir or to modify the SBMWD Master Plan in any other manner as deemed appropriate by the SBMWD, The remittance of the Agency Payment shall only be applicable to the Cajon/Palm Water Reservoir as contemplated and at the site identified by this Agreement. In the event that the SBMWD elects to modify the SBMWD Master Plan or to delay the construction of the Cajon/Palm Water Reservoir or to eliminate the need for the Cajon/Palm Water Reservoir in its entirety, and in consideration of the Agency agreeing to provide the Agency Payment, the SBMWD shall continue to be obligated to provide the water service to the Project of the Developer as committed in Section 2.02 hereof, Section 2,04, ComDletion of CaionlPalm Water Reservoir, As of the Effective Date as defined in Section 4.01 hereof, the SBMWD estimates that the construction of the Cajon/Palm Water Reservoir should commence during the 2008-2009 fiscal year of the SBMWD, and should be , completed within two (2) years after the commencement of on-site construction activities for the Cajon/Palm Water Reservoir. Notwithstanding the actual completion date and the ability of the SBMWD to use the water storage capacity in the proposed Cajon/Palm Water Reservoir, the SBMWD commits to the provision of the initial and continued water service to the Project of the Developer as set forth above in Section 2.02. ARTICLE III DEFAULTS Section 3,01, Default: Notice of Default. For purposes of this Article ill and the exercise and enforcement of rights and remedies under this Agreement, the Developer as a third party beneficiary shall be deemed to be a party to this Agreement for all purposes of this Article ill, Failure or delay by a party to perform any material term or provision of this Agreement shall constitute a default under this Agreement; provided, however, that if the defaulting party commences to cure, correct or remedy the default within thirty (30) calendar days after receipt of written notice specifying such default and thereafter diligently completes such cure, correction or remedy, a breach of this Agreement shall not be deemed to have occurred. The party claiming that a default has occurred shall give written notice of EDA-Water Dept 01-02-08 3 P:\Agcndas\Agenda AnachmcnlS\Agrmts.Arnend 2OO8\02.1!M8 Hillwood - Water Storage Capacity Payment Agreement.doc I; CDC/2008-8 default to the defaulting party, specifying the default. Delay in giving such notice shall not constitute a waiver of any default nor shall it change the time of default; provided, however, the nondefaulting party shall have no right to exercise any remedy for a breach hereunder without delivering the written default notice as specified herein. Section 3.02. Failure to Cure: Remedies, In the event that the defaulting party fails to commence to cure, correct or remedy a default within sixty (60) calendar days following written notice, as provided above, or thereafter fails diligently to complete such cure, correction or remedy, a breach of this Agreement shall be deemed to have occurred. In the event of a breach, the nondefaulting parties may (i) at their option, terminate this Agreement and/or (ii) seek any appropriate rernedy or damages available by law or in equity, Section 3,03. No Waiver bv Failure or Delav: Cumulative Ril!hts, (a) Any failure or delay by a party or parties in asserting any of its or their rights and remedies as to any default shall not operate as a waiver of any default or of any rights or remedies associated with a default. (b) The rights and remedies of the parties set forth in this Article III are cumulative and the exercise by any party or parties of one or more of such rights or remedies shall not preclude the exercise by it or them, at the same or different times, of any other rights or remedies for the same default or any other -default by the defaulting party. ARTICLE IV GENERAL PROVISIONS Section 4,01, Term of Al!reement. This Agreement shall be in full force and effect from the date of execution hereof by the Agency and the SBMWD (the "Effective Date") and shall continue in effect until terminated (i) by the mutual consent of the Agency and the SBMWD, or (ii) as otherwise required by applicable law, or (iii) as provided in Section 3.02, or (iv) automatically upon the date that is ten (10) years from and after the Effective Date. Section 4,02, Notices, All notices to be given under this Agreement shall be in writing and shall be delivered personally, by Federal Express or other similar overnight courier or express delivery service or by certified or registered United States Mail, return receipt requested. All notices shall be given to the addresses of the parties as set forth herein, including the Developer and with copies as noted herein. Unless specifically provided to the contrary in this Agreement, any notice pursuant to this Agreement shall be effective upon delivery or refusal to accept delivery, if delivered personally, one (1) day after deposit with Federal Express or other like overnight courier or express delivery service, and two (2) days after mailing, if delivered by certified or registered United States Mail. Notices to the Agency shall be s~nt to the following address: Redevelopment Agency of the City of San Bernardino 201 North "E" Street, Suite 301 San Bernardino, California 92401 Attention: Interim Executive Director EDA-W.ter Dept 01-02-08 4 P;\Agcndas\ApKla Anaehmcnts\Agmu-Amend 2008\02.19-08 Hillwood. WUC/' Stonge Capacity Payment Agrecmcnt.doe ') with a copy to: CDC/2008-8 Lewis, Brisbois, Bisgaard & Smith LLP 650 East Hospitality Lane, Suite 600 San Bernardino, California 92408 Attention: Timothy J. Sabo Notices to the Board of Water Commissioners shall be sent to the following address: if via express delivery: if via US mail: with a copy to: San Bernardino Municipal Water Department San Bernardino City Hall 300 North "D" Street, Fifth Floor San Bernardino, California 92418 Attention: General Manager San Bernardino Municipal Water Department P.O, Box 710 San Bernardino, California 92402 A.ttention: General Manager City Attorney San Bernardino City Hall 300 North "D" Street, Sixth Floor San Bernardino, California 92418 Notices to the Developer shall be sent to the following address: Hillwood/San Bernardino, LLC 268 West Hospitality Lane, Suite 105 San Bernardino, California 92408 Attention: Project Manager Each party to this Agreement, including the Developer, shall promptly notify the other parties of any change or changes of address to which notices shall be sent pursuant to this Agreernent. Section 4,03, Entire A2reement. This Agreernent represents the sole agreement regarding the matters addressed herein that exist as of the date hereof with regard to the SBMWD. It is recognized that other agreements, including the DDA and amendments thereto, are in existence as between the Agency and the Developer, and all of such agreements shall not affect or otherwise impact the interpretation of this Agreement. Section 4,04, Governine Law: Invalidity of Anv Provision of A2reement. This Agreement shall be governed by the laws of the State of California, If any provision of this Agreement is determined by a court of competent juri~diction to be invalid or unenforceable as between the parties, the remaining provisions will continue in full force and effect. Any court actions to enforce this Agreement shall be filed in the San Bernardino County Superior Court, Main Branch, City of SanBernardino, . EDA-Water Dept 01-02-08 5 P:\Agendas\Agenda AttaehmentJ\AgrTAmend 2008\02-19-08 Hillwood - Water Stonge Capacity Payment Agreement.doc '"I CDC/2008-8 Section 4,05, Conffict of Interest: No Individual Liability, No official or employee of the SBMWD or the Agency shall have any personal interest, direct or indirect, in this Agreement, nor shall any official or ernployee of the SBMWD or the Agency participate in any decision relating to this Agreement which affects such official's or employee's pecuniary interest in any corporation, partnership or association in which such official or employee is directly or indirectly interested. No official or employee of the SBMWD or the Agency shall be personally liable in the event of a breach of this Agreernent by the SBMWD or the Agency. Section 4,06, Third Party Beneficiaries, The Developer is and shall be a third party beneficiary of this Agreement as to the rights and remedies of the Agency under Article II and Article III of this Agreement only. Other than the right of the Developer to enforce Article II and Article III of this Agreement, the Developer shall have no other rights or interests in this Agreement. This Agreement shall not create any right or interest in any non-party (other than the Developer) or in any member of the public as a third party beneficiary. Section 4,07, Amendments, This Agreement rnay only be amended, changed, modified or altered by a writing signed by both 'of the parties and approved by the respective governing boards thereof with the concurrence of the Developer required solely as to those amendments, changes, modifications or alterations as to Sections 1.02, 2.02, 2,03 and Article III with respect to matters contained therein that would have an adverse financial effect upon the Developer. Section 4,08, Time of the Essence, Time is of the essence in this Agreement and the undertaking of each and every obligation of the parties hereto. Section 4,09. Execution of Counteroarts, This Agreement may be executed in several counterparts, each of which shall be an original and all of which shall constitute one and the same document. 1// 1// 1// //1 //1 //1 1// //1 //1 //1 EDA-Water Dept 01-02-08 6 P:\Apndas\Agenda AnacJunents\Aa:mU-Amend 2008\02.19-08 Hillwood - Water Sllll'llF Capacity Payment Agrcem:nt.doc "Ii CDC/2008-8 IN WITNESS WHEREOF, the parties and the Developer as the third party beneficiary hereto have executed this Agreement as of the date provided herein as the Effective Date, Board of Water Commissioners By: ATTEST: By: It~~ ~ Secretary . Redevelopment Agency of the City of San Bernardino B~~~ ATTEST: .. ~ BY:<~ Secretaryl ASSIstant Secretary Approved as to Form and Legal Content: By: \~ ~~ncy 0 I EDA-Water Dept 01-02-08 7 1 , . CDC/2008-8 As to the Developer as the third party beneficiary pursuant to Section 4.06 of this Agreement. DEVELOPER HSB 1-215, L.P" a California limited partnership By: HSB GP, LLC, a California limited liability company, Its general partner By: HGI GP, LLC, a Texas limited liability company, its sole member By: HGI Group, L.P., a Texas limited partnership, its sole member By: Hillwood Associates, L.P" a Texas limited partnership, its general partner By: Hillwood Developrnent Company, LLC, a Texas limited liability company, its general p By: leSS Title: 7~f EDA-Water Dept 01-02-08 8 P:\Agendas\AJenda Attacbmmts\Agrnts-Amend 2008\02-19-08 Hillwood - Water Stonge Capacity Payment Agreement.doc fl , . CDC/2008-8 SE 1-215, L.P" a California limited partnership By: HSB GP, LLC, a California limited liability company, Its general partner By: HGI GP, LLC, a Texas limited liability company, its sole member By: HGI Group, L.P" a Texas limited partnership, its sole member By: Hillwood Associates, L.P" a Texas limited partnership, its general partner By: Hillwood Development Company, LLC, a Texas limited liabili mpany, its gener artner N Title: EDA-Water Dept 01-02-08 9 P:\Agendu\Agenda Attachments\Agrn-Amend 2008\02-19-08 Hillwood - Water Storq;e Capacity Payment Agl'eeTn=nt.doe "