HomeMy WebLinkAbout2012-002 (IMPORTANT NOTE: Resolution
is Null and Void because
the Agreement was not executed
within the time specified.)
1 RESOLUTION NO. 2012-2
2
3 A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING DEVELOPMENT AGREEMENT NO. 11-
4 02 BETWEEN THE CITY OF SAN BERNARDINO AND REGAL CINEMAS INC. FOR
5 A 14-SCREEN MOVIE THEATER IN DOWNTOWN SAN BERNARDINO
6
BE IT RESOLVED BY THE MAYOR AND COMMON COUNCIL OF THE CITY
8 OF SAN BERNARDINO AS FOLLOWS:
9 SECTION L Recitals.
WHEREAS, Regal Cinemas, Inc., has requested approval of Development Agreement
10
11 No. 11-02 for development of a 14-screen movie theater in an existing movie theater located at
12 450 North"E" Street in the CR-2, Commercial Regional-Downtown land use district; and
WHEREAS, on October 29, 1996, the Redevelopment Agency of the City of San
13
14 Bernardino (the "Agency") and MDA-San Bernardino Associates, LLC, entered into a
15 Disposition and Development Agreement (1996-DDA) for the development, construction,
16 improvement, and financing of a multi-screen cinema complex and related common area
improvements. In 2001, with the downturn in the cinema industry, the Agency purchased the
17
18 theater building (located at 450 North "E" Street) from MDA, together with the existing tenant
19 lease with CinemaStar Luxury Theaters, Inc. ("CinemaStar"), for$10,000; and
20 WHEREAS,on September 28, 2008, CinemaStar ceased operations; and
WHEREAS, on November 7, 2008, the Agency filed an unlawful detainer action with
21
22 the Superior Court of California which held CinemaStar to be in default of the terms of their
lease, declared the lease to be terminated and granted possession of the multi-screen cinema
23
24 complex(the "20-Plex")to the Agency as of December 1, 2008; and
WHEREAS, on December 15, 2008, the Mayor and Common Council of the City of San
25
26 Bernardino (the "Council") consented to the disposition of the 20-Plex to Maya North America
27 ("Maya"), and the Community Development Commission of the City of San Bernardino (the
"Commission") approved the sale of the 20-Plex and authorized the Interim Executive Director
28
1
2012-2
of the Agency to execute the 2008 Disposition and Development Agreement (the "2008 DDA")
2 by and between the Agency and Maya; and
3 WHEREAS, on February 2, 2009, the Council authorized the submittal of a U.S.
4 Department of Housing and Urban Development ("HUD") Section 1 08 Loan Guarantee
5 Application (the "HUD Loan Application"), on March 6, 2009, the Community Development
6 Citizens Advisory Committee recommended to forward the Pre-Application for the HUD Loan
7 Application for the re-finance and rehabilitation Project to the Council for approval, and on April
8 6, 2009, in a Public Hearing, the Council approved and authorized the submittal of the HUD
9 Loan Application for Maya to HUD; and
10 WHEREAS, the HUD Loan Application was submitted to HUD and the Agency received
11 HUD's approval on September 25,2009; and
12 WHEREAS, on May 18,2009, the Commission approved Amendment No.1 to the 2008
13 DDA extending the close of escrow deadline from July 1, 2009 to October 30, 2009, due to
14 unforeseen delays in the Agency obtaining legal possession of the building and its contents,
15 HUD's review and approval of the HUD Loan Application, and Maya securing its financing as
16 stated and outlined in the 2008 DDA; and
17 WHEREAS, Maya's continued difficulty with securing financing for the re-opening of
18 the 20-Plex lead to the termination of the 2008 DDA on April 15, 2010; and
19 WHEREAS, between the months of May and September in 2010, the Agency received 8
20 proposals for development of the 20-Plex; and
21 WHEREAS, the Agency vetted each proposal and upon approval by the Commission in
22 closed session, the Agency was directed to negotiate with Regal Entertainment Group ("Regal");
23 and
24 WHEREAS, Regal operates the largest and most geographically diverse theater circuit in
25 the United States, consisting of 6,745 screens in 546 theaters in 38 states and the District of
26 Columbia; and
27 WHEREAS, Regal is a publicly traded company listed on the New York Stock Exchange
28 and its financial strength is testament to backing its lease commitments; and
2
2012-2
2
WHEREAS, Regal focuses on enhancing its position in the motion picture exhibition
industry by distributing value to stockholders, realizing selective growth opportunities through
new theater construction, expanding and upgrading its existing asset base with new technologies,
and capitalizing on prudent industry consolidation opportunities; and
3
4
~ 1/1,
J b-~ ~ ~
~ \f 1\,
r('l
5
WHEREAS, on November 30, 2010, Regal and the Agency execute<.
Understanding and negotiations commenced on the leasing of the fourteen (14) ofthl
in the Cinema; and
6
7
8
WHEREAS, Regal, as Lessee, has entered into a Lease Agreement with
9
Bernardino Economic Development Corporation (the "SBEDC" as successor In p.
10
interest), as Lessor, for the development and reuse of fourteen (14) of the existing twent)
theaters within the Cinema building; and
WHEREAS, the SBEDC further proposes to lease or sell four (4) of the remaining six (6)
theaters to private developers and/or commercial/retail operators and to retain two (2) theaters as
possible ancillary space for the California Theatre and a small format performance theater; and
WHEREAS, a program Environmental Impact Report (State Clearinghouse No.
2009111089) was certified on December 20, 2010, for Merger A; thereafter, staff determined
pursuant to Section 15168 (c)(2) of the California Environmental Quality Act (CEQA)
Guidelines (the "Guidelines") that pursuant to Guidelines Section 15162, no new effects will
occur and no new mitigation measures will be required as a result of the approval of this
Development Agreement No. 11-02; and
WHEREAS, the Planning Commission of the City of San Bernardino held a noticed
public hearing on December 14, 2011, to consider Development Agreement No. 11-02 and
recommended approval to the Mayor and Common Council; and
11
12
13
14
15
16
17
18
19
20
21
22
23
24
WHEREAS, the Mayor and Common Council held a noticed public hearing on January 9,
2012, to consider the proposed Development Agreement Amendment No. 11-02, including the
Planning Commission recommendation and the Planning Division Staff Report dated December
14, 2011, as supplemented by the CDC Staff Report; and
25
26
27
28
3
2012-2
2
3
4
5
6
7
8
9
10
11
]2
I3
]4
]5
]6
]7
]8
]9
20
2]
22
23
24
25
26
27
28
WHEREAS, the Planning Commission has reviewed and recommended and the Mayor
and Common Council have held a noticed public hearing and have adopted Development Code
Amendment No. 11-11 pursuant to Ordinance No. 11-
NOW, THEREFORE, BE IT RESOLVED, FOUND AND DETERMINED BY THE
MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO AS
FOLLOWS:
SECTION 2. Findings.
A. Development Agreement Amendment No. 11-02 is internally consistent with the
General Plan in that it meets General Plan Policy 4.5.2 in that it maintains and enhances
commercial regional cores and economically sound community-serving commercial
concentrations by attracting new regional outlets, maintaining the existing regional retail base,
and stabilizing the future regional retail base.
B. Development Agreement Amendment No. 11-02 is consistent with Development
Code Chapter 19.40 in that, it addresses the mandatory contents for development agreements,
including and not limited to the duration of the agreement, the permitted uses of the property,
and the density or intensity of use(s) as described in Section 19.40.040 of the Development
Code.
C. The proposed amendment will promote the public interest, health, safety,
convenience and welfare of the City in that the proposed agreement provides for the re-tenanting
of a vacant theater complex on a commercial property in need of revitalization and rehabilitation
and carries out the entertainment district concept approved by the Mayor and City Council in
Development Code Amendment 11-11.
D. The proposed Development Agreement will not be detrimental to the public
interest, health, safety, convenience, or welfare of the City.
SECTION 3. Development Agreement Amendment No. 11-02.
4
_;;..... d-. ~_ ~..I..K-..~. ".,"'.'~
2012-2
Development Agreement No. 11-02 is attached hereto and incorporated herein as Exhibit
2 A, and is hereby approved. The City Manager is hereby authorized and directed to execute the
3 Development Agreement between the City of San Bernardino and Regal Cinemas, Inc., on behalf
4 of the City of San Bernardino.
5 SECTION 4. Compliance with California Environmental Quality Act.
6 An Environmental Impact Report (EIR) (SCH #2009111089) is a program EIR prepared
7 to analyze the environmental impacts of Merger A and the related downtown development.
8 The Mayor and Common Council certified the EIR, adopted Findings of Fact, a Statement of
9 Overriding Considerations and a Mitigation Monitoring/Reporting Program (MM/RP) on
10 December 20,2010. Development Agreement No. 11-02 addresses certain economic issues and
11 provides for the continuation of Development Code Amendment MC 1356 or Amendment No.
12 11-11 and does not require further environmental analysis or documentation pursuant to Sections
13 15162 through 15164 of the State CEQA Guidelines.
14 SECTION 5. Notice of Determination.
15 The Planning Division is hereby directed to file a Notice of Determination with the
16 County Clerk of the Board of Supervisors of the County of San Bernardino, certifying the City's
17 compliance with the California Environmental Quality Act.
18
III
19
20 I II
21
III
22
23 III
24
25
26
27
28
III
III
5
"."'._""'-""~~"-""~"-'^
2012-2
A RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE
CITY OF SAN BERNARDINO APPROVING DEVELOPMENT AGREEMENT NO. 11-
02 BETWEEN THE CITY OF SAN BERNARDINO AND REGAL CINEMAS INC. FOR
A 14-SCREEN MOVIE THEATER IN DOWNTOWN SAN BERNARDINO.
2
3
5
I HEREBY CERTIFY that the foregoing resolution was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a i oint regular meeting thereof, held
,2012, by the following vote, to wit:
4
6 on the 9th day of January
7 Council Members: AYES
8 MARQUEZ X
9 JENKINS X
10 BRINKER X
11 SHORETT X
-
12 KELLEY X
13 JOHNSON X
14 MC CAMMACK
NAYS
ABSTAIN ABSENT
X
15
16
Rudtdd. a&uL ' .'
Rachel Clark, City Clerk ~1
Uy!. day of January ,2012.
17
18 The foregoing Resolution is hereby approved this
19
20
21 Approved as to form:
22
23
JAMES F. PENMAN,
24 City Attorney
2S By: O~ t ~ f ~ ~ "'" r""""';'" Ikr-)
26 cry ~ fI~b~{4 ~~?Z. ~~
27 ~~(~~)~~ ~~/~
28 /I 1/7:1
6
,.."_.,,,,,,..,,,,,,,,,... .: _III........ JI ". __ ..i:>....Jillf_y~....~. T, . ""~",,',,...~,~";".._~.~~c
2012-2
(c(Q)fY
Mr. James F. Penman, Esq.
Office ofthe City Attorney
City Hall, Sixth Floor
300 North "D" Street
San Bernardino, CA 92418
)
)
)
)
)
)
)
)
)
)
)
)
)
)
Recording Requested
By and Mail To:
City of San Bernardino
300 North "D" Street
San Bernardino, CA 92418
When Recorded, Mail To:
DEVELOPMENT AGREEMENT
BETWEEN
THE CITY OF SAN BERNARDINO
AND REGAL CINEMAS, INC.
This Development Agreement is dated as of the Effective Date and is by and between the City of
San Bernardino and Regal Cinemas, Inc. (this "Ae:reement") is entered into by the City of San
Bernardino, California, a municipal corporation (the "City") and Regal Cinemas, Inc., a Tennessee
corporation ("Regal"), and. for the limited purposes as noted herein, the Redevelopment Agency of the
City of San Bernardino, public body, corporate and politic, (the "Agency") and the San Bernardino
Economic Development Corporation, a California non-profit corporation (the "SBEDC"). For good and
valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the City and Regal
agree as follows:
1. RECITALS. This Agreement is entered into with reference to the following:
1.1 The Lease. The SBEDC and Regal entered into a Lease Agreement (the "Lease")
effective as of the date of signature by both parties (the "Lease Effective ~ate."
1.2 Property. SBEDC owns real property located at 450 North "E" Street in San Bernardino,
being described in the attached Exhibit "A" (the "Land." with the Land and the improvements thereon
referred to as the "Property"), which Property is part of the Theatre Square entertainment and retail
project in downtown San Bernardino (the "Project").
1.3 Building. The Property is improved by a multi-plex theatre constructed to contain twenty
(20) auditoriums (the "Buildine:"), but which will be altered pursuant to the Lease to contain fourteen (14)
auditoriums.
1.4 Theatre. Pursuant to the Lease, six (6) screens and auditoriums of the Building shall be
separated from the remainder of the Building, leaving a multi-plex theatre containing fourteen (14)
auditoriums (the "Theatre"), and thereupon the Theatre will consist of fourteen (14) auditoriums and
related areas ofthe Building.
1.5 Ree:al. Regal has leased the Theatre from SBEDC pursuant to the Lease.
4827-3676-5710.1 1
2012-2
1.6 Development Agreement Pw:pose. The City and Regal have entered into this Agreement
to facilitate and encourage the pursuit and development of the Property, including alterations to the
Building on the Property, and to establish certainty in the development process for Regal on the Property.
Regal desired certainty with respect to specific matters for it and SBEDC to pursue various work
associated with the development of the Property. The City desired to provide certainty through this
Agreement with respect to specific development criteria to be applicable to the Project in order to provide
for appropriate utilization of the Project in accordance with sound planning principles.
1.7 Code Authorization and Acknowledgements. The City affirms that it is authorized
pursuant to California Government Code Sections 65864 through 65869.5, (the "California Development
Agreement Lel!islation") to enter into development agreements with persons having legal or equitable
interests in real property for the purpose of establishing certainty in the development process. The City
enters into this Agreement pursuant to the California Development Agreement Legislation and pursuant
to City Code Chapter 19.40 (hereinafter defined).
1.7.1 The City affirms that this Agreement constitutes a current exercise of the City's
police powers to provide certainty to Regal in the development approval process and the
development of the Property by vesting certain permitted land uses and development criteria
described in the Development Code (hereinafter defined) and certain other matters set forth in this
Agreement in exchange for significant public benefits the City would receive if the Project is
developed as provided in the Lease.
1.7.2 This Agreement is granted in consideration of Regal of the significant public
benefits that could be derived from the development of the Property, including the development
of the Property acting as a potentially significant catalyst for the development of other properties
within the Central City North (the "CCN") Redevelopment Project Area within the City, as well
as: (a) mitigating blight currently existing in such area, (b) creating new employment
opportunities within the region; and (c) contributing to the expansion and/or extension of public
services and utilities. The City acknowledges that each of these potential benefits independently
provides sufficient public benefits to justify this Agreement. The City further acknowledges that a
significant benefit includes the potential additional tax increment revenues from the Property and
the remainder of the CCN redevelopment area in the City which could be more rapidly developed
due to the development of the Property.
1.8 General Plan Consistency. The Economic Development element of the General Plan
identifies the Property and the existing Building as a significant development of the Central City North
Redevelopment Project Area. Additional improvement of the Property, as facilitated by this Agreement, is
consistent with the General Plan, as demonstrated by furtherance of the following General Plan goals and
policies: Goal 4.10 "Optimize existing redevelopment project areas to identify and prioritize development
opportunities."; Policy 4.10.1 "Utilize all available redevelopment agency/City tools to revitalize and
enhance strategic areas of the City."; Goal 4.14 "Enhance, maintain, and develop recreational, cultural,
entertainment, and educational facilities within the City."; Policy 4.14.2 "Seek and attract uses that foster
a high level of evening activity (e.g. theaters and restaurants)"; and Policy 4.14.3 "Attract uses that
complement and intensify the Convention Center in downtown San Bernardino, including expanding
convention facilities, hotels, restaurants, theaters, and similar uses."
1.9 Development Al!reement Findings. The City determines and affirms that this Agreement
is consistent with the City General Plan and the City Development Code and will promote the welfare and
public interest of the City. Further, upon occurrence of the following events, the Council shall make the
following findings and shall confirm compliance with City Code Chapter 19.40:
4827.3676-5710.1
2
2012-2
1.9.1 Regal shall request and apply through the Director of the City's Community
Development Department (the "Director") to enter into this Agreement, and the Agency and
SBEDC shall have joined in such application;
1.9.2 Regal and the SBEDC shall have a legal or equitable ownership interest in
portions of the Property or the Project, and the Property exceeds two acres in size;
1.9.3 Regal's application to enter into this Agreement shall be made on forms
approved, and shall contain all information required, by the Director;
1.9.4 The status of Regal, the Agency, and the SBEDC as owners of, or holders of
legal or equitable interests in, the Property shall be established to the satisfaction of the Director;
1.9.5 Regal's application shall be accompanied by the fee established pursuant to
Chapter 19.32 (Application and Fees) and all other lawfully required documents, materials and
information which fee was paid by the SBEDC for the benefit of Regal;
1.9.6 The Director shall receive, review and process Regal's application for
consideration by the Planning Commission of the City (the "Planning Commission"), and the
Council shall recommend that the Planning Commission and the Council approve Regal's
application and the City entering into of this Agreement;
1.9.7 The City shall comply with all requirements of the California Environmental
Quality Act and all other applicable laws in the approval of this Agreement and adopting the
Resolution (hereinafter defined).
1.9.8 All other requirements under applicable law shall be satisfied by Regal or the
City with respect to this Agreement.
1.10 Planning: Commission and Common Council Hearings. On December 14, 2011, the
Planning Commission, after giving the notice required by law, held a public hearing to consider the
application for adoption of this Agreement. At the conclusion of the public hearing, the Planning
Commission recommended to the Council that this Agreement be adopted as proposed. On January 9,
2012, the Council, after providing notice as required by law, held a public hearing to consider the
application for adoption of this Agreement. The Resolution was adopted by the City in accordance with
the requirements and procedures set forth in Section 19.40.030 of City Code Chapter 19.40, approving the
application for adoption of this Agreement, authorizing execution of this Agreement by the Mayor of the
City and setting forth findings (with supporting facts) referenced in Section 1.9 above.
1.11 City Resolution. On January 9, 2012, the Council adopted Resolution No. 2012-2
(the "Resolution") approving this Agreement. The Resolution became effective on the Effective Date as
defined herein.
1.12 City Code Chapter 19.40 Mandatory Contents. The City affirms that this Agreement does
contain the provisions required by Section 19.40.040 (1) of the City Code Chapter 19.40, as follows
(paragraph references are to said Section 19.40.040 (1):
1.12.1 Duration - see Section 3.2 of this Agreement;
1.12.2 Uses, density, intensity, height and size - see Sections 3.3 and 3.4 of this
Agreement;
4827-3676-5710.1
3
2012-2
1.12.3 No reservation or dedication of land for public purposes is contained in this
Agreement;
1.12.4 No protection against fee increases - there are no fees required or increased by
this Agreement;
1.12.5 Tiered amendment process - see Section 7.2 of this Agreement; and
1.12.6 Health and safety exception - the Vested Provisions may be modified only by
the City as it determines to address a compelling public necessity regarding health and safety that cannot
reasonably be addressed by other means or to comply with any later adopted federal or state law or
regulation; and
Nothing herein shall require Regal to determine or affirm whether this Agreement is in compliance with
City Code Chapter 19.40, and Regal has made no such determination or affirmation.
2. CERTAIN DEFINITIONS. In this Agreement, unless the context requires otherwise (and in
addition to other defined terms in this Agreement):
2.1 "Citv Code Chapter 19.40" means Chapter 19.40 of the City Development Code in effect
as of the Effective Date.
2.2 "General Plan" means the San Bernardino City General Plan in effect as of the Effective
Date.
2.3 "Assignee" means a Person (a) to whom Regal (or an Assignee of Regal) expressly
assigns its rights and obligations under this Agreement and the Lease.
2.4 "Owner" means any Person that owns a parcel in the Property, including a leasehold
ownership interest, except for (a) any governmental entity that owns merely a right-of-way, easement for
a right-of-way or utility easement, or (b) any utility company that owns merely an easement or a sub-
station or similar facility.
2.5 "Person" means any natural person, firm, association, organization, business trust,
partnership, joint venture, limited liability company, corporation, or other legal entity, including any
entity named in the commencement clause of this Agreement.
2.6 "SBEDC Parcels" means all portions of the Project owned by SBEDC that are located
outside the Property, as the SBEDC Parcels are shown on the map that is included as part of Exhibit "A."
2.7 "SBEDC Acquired Parcels" means any parcels that are part of, or adjoining, the Project
that are acquired by SBEDC after the Effective Date, including any portion of the real property shown on
the map that is included as part of Exhibit "A" as being outside the SBEDC Parcels but which may be
later acquired by SBEDC.
2.8 "Effective Date" of this Agreement means the later to occur of the following: a) the date
on which Development Code Amendment No. II-II becomes effective; or b) February 27, 2012.
4827-3676-5710.1
4
J1 111
_M
,. "~""'~' .,.."..."""_,,, ,_,_..."",.._..,........""""'_"....._,,"_._..,.~"" .. l , .1 u, K . . :..r....... - I', ,J!< C, .J r::;
2012-2
3. DEVELOPMENT OF THE PROPERTY: VESTED PROVISIONS
3.1 City Code Chapter 19.40. This Agreement is subject to the provisions of City Code
Chapter 19.40.
3.2 Term. The term of this Agreement ("Term") shall commence on the Effective Date and
extend for a period ending on the expiration or earlier termination of the Lease; provided, however, that
the Term of this Agreement shall not extend past the day that is the twenty (20) year anniversary of the
Effective Date.
3.3 Development of Property and Vested Provisions. Regal shall develop the Property in
accordance with the Development Code, in effect on the Effective Date of the Agreement, and in
accordance with the other provisions of this Agreement and the Lease, including without limitation the
provisions of Section 3.6 (the "Vested Provisions") as those Vested Provisions are in effect as of the
Effective Date. All existing and future rules, regulations, ordinances, resolutions, and policies of the City
as applied to any use or development of the Property shall be interpreted and enforced in a manner
consistent with the Vested Provisions.
3.4 Changes in the Vested Provisions. The Vested Provisions, including without limitation
the provisions of Section 3.6, shall not be amended, changed or modified in any manner by the City
through any action of the Council during the Term of this Agreement without the prior express written
consent of Regal having first being obtained, which written consent may be granted or denied by Regal at
the absolute and sole discretion of Regal.
3.5 Joinder by the SBEDC. The SBEDC joins in this Agreement to subject the respective
parcels to this Agreement and for those parcels to receive the benefits of this Agreement.
3.5.1 SBEDC subjects the SBEDC Parcels to this Agreement.
3.5.2 SBEDC subjects the SBEDC Acquired Parcels to this Agreement.
3.5.3 All of the benefits of the Vested Provisions and this Agreement apply to all of the
Project (which includes the Regal leased Parcel and the SBEDC Parcels) and all SBEDC
Acquired Parcels, as covenants running with the land.
3.6 Other City Commitments.
(a)
The City has not adopted any "living wage ordinance" that would be
applicable to the Regal tenancy or the Theatre or as to any other project
or site within the City of San Bernardino municipal boundaries. A
"living wage ordinance" within the meaning of this Agreement is any
requirement imposed by the City that requires Regal to include any
component of wages or other form of compensation in the wages or
benefits of Regal employees. The provisions of this Section shall remain
in full force and effect from and after the Effective Date and continue in
effect during the Term of this Agreement (defined in Section 3.2), with
the result that no living wage ordinance as above-defined shall be
applicable to the Regal tenancy or the Theatre during the Term of this
Agreement. In the event any living wage ordinance is enacted on the
basis that it is mandated pursuant to any State or Federal law, rule or
regulation, and in the event such living wage ordinance is uniformly
4827-3676-5710.1
5
"""",_,;,_"",~"~",""',"""""""""'''ir,__,,,,,,,_,,,,,'i'''i
2012-2
applicable across the State of California, such shall not be deemed a
"living wage ordinance" pursuant to this Section 3.6(a). However, in the
event any living wage ordinance is enacted on the basis that . it is
mandated pursuant to any State or Federal law, rule or regulation, and in
the event such living wage ordinance is not uniformly applicable across
the State of California, such shall be deemed a "living wage ordinance"
pursuant to this Section 3.6(a) and SBEDC shall reimburse Regal on a
monthly basis all additional costs incurred by Regal due to such living
wage ordinance, as provided in the Lease (including Regal's right under
the Lease to offset such costs against rent payable under the Lease).
(b) For the Term of this Agreement (defined in Section 3.2), the City agrees
that it will neither entitle nor approve any other motion picture theatre
within the municipal boundaries of the City otherwise permitted
pursuant to the Vested Provisions as contained in Development Code
Chapter 19.06 that has a seating capacity in any single motion picture
theatre (regardless of the number of auditoriums) equal to more than two
hundred (200) seats nor having any auditorium for the presentation of
recorded movie productions of a square footage greater than three
thousand (3,000) square feet, without the prior written consent of Regal
to be granted or withheld in Regal's sole discretion. The City and Regal
jointly agree that such limitation is in the best interests of both parties to
enable the Theatre to gain market acceptance in the Inland Empire
Region based upon the prior investments of public funds by the SBEDC
and the City in the Property and the property leased to Regal under the
Lease.
3.7 Regal Commitments. The provisions of this Section shall remain in full force and effect
from and after the Effective Date and continue in effect during the Term of this Agreement. Regal
commits to (i) use and operate the Theatre as a first class motion picture theatre as part of a system of
motion picture theatres operated by Regal and its subsidiaries and affiliates), (ii) not sacrifice the profits
of the Theatre in an effort to revitalize any other business operations of Regal or any other subsidiary or
affiliate thereof (with the understanding that profits from the Theatre will not be segregated or otherwise
maintained separately from the profits of other motion picture theatres and businesses of Regal and its
subsidiaries and affiliates), and (Hi) abide by the terms of the Lease.
4. PERIODIC REVIEW
4.1 Time of Review. This Agreement shall be reviewed by the City at least once a year in
accordance with California Government Code Section 65865.1, on or before the anniversary date of the
recordation of this Agreement, in order to ascertain the good faith compliance by Regal with the terms of
this Agreement. Upon request by the City, Regal shall submit an Annual Monitoring Report
demonstrating its good faith compliance with the terms of this Agreement within thirty (30) calendar days
after written notice from the City of the date of the review to be conducted by City. Following any such
review, the City shall notify Regal in writing within thirty (30) calendar days of its determination as to
compliance or noncompliance with the terms of the Agreement. The annual review procedure set forth
herein and in Government Code Section 65865.1 shall be applicable during the Term of this Agreement.
4.2 Failure to Conduct Periodic Review. In the event the City fails to conduct the periodic
review, such failure shall not be deemed approval by the City of Regal's good faith compliance with the
terms of this Agreement, and the City may undertake an independent review of Regal's performance since
4827-3676-5710.1
6
'~"""",_,=-,.~"''''''"'''_'"'''~'''_''~'''''''~!i'",'''''''_'''~_'''_'*''''''''~~~'~''''~-,'>.,:.,,,
2012-2
the date of the last annual review, or as of the Effective Date, as applicable, unless Regal shall have
submitted an Annual Monitoring Report to the City demonstrating its good faith compliance with the
terms of this Agreement notwithstanding the lack of notice from the City as provided in Section 4.1
above. In the event the City has not taken action to accept or reject such Annual Monitoring Report within
ninety (90) calendar days after receipt, Regal shall then be deemed to have complied in good faith with
the terms of this Agreement.
4.3 Cost of Periodic Review. The SBEDC shall pay to the City the actual cost incurred by the
City in conducting any such periodic review as provided in Sections 4.1 and 4.2 above. The actual cost of
such review shall be based upon the City fee structure then in effect, including the salaries and reasonable
costs and expenses of the Office of the City Attorney or any other experts and other legal counsel retained
by the Office of the City Attorney with respect to such review. The SBEDC shall submit the review fees
concurrently with submission of the Annual Monitoring Report pursuant to Sections 4.1 and 4.2 above if
such a published applicable fee structure then is in effect and shall also submit a deposit for the estimated
City fees (if a set amount is not specified in a published fee schedule) and the estimated salaries and
reasonable costs and expenses to be incurred by the Office of the City Attorney promptly after receipt of
such estimate from the City.
5. DEFAULT.
5.1 Events of Default. A default under this Agreement shall be deemed to have occurred
upon the happening of one or more ofthe following events or conditions:
5.1.1 A warranty, representation, or statement made or furnished by Regal to the City
in or under this Agreement is false in any material respect when it was made.
5.1.2 A good faith finding and determination by the City made following a periodic
review under the procedure provided for in California Government Code Section 65865.1 and
Section 4.1 above that upon the basis of substantial evidence Regal has not complied in good
faith with one or more of the terms or conditions of this Agreement.
5.1.3 Any other act or omission by the City or Regal that breaches or materially
interferes with any of the terms of this Agreement.
5.2 Procedure upon Default. Neither the City nor Regal may exercise any remedies with
respect to an event of default referenced in Section 5.1 above unless the party claiming a default by the
other party gives a written notice to the alleged defaulting party specifying the event of default and such
event of default is not cured within the applicable Cure Period (hereinafter defined). The term "Cure
Period" as used herein means (a) with respect to an event of default that reasonably can be cured within
thirty (30) calendar days, the period of thirty (30) calendar days following the receipt of such written
default notice, and (b) with respect to an event of default that cannot reasonably be cured within thirty
(30) calendar days, and if efforts are commenced to cure such default within thirty (30) calendar days
following the receipt of such written default notice, the period reasonably required to complete such cure
with diligent prosecution.
5.3 Remedies. In the event Regal shall be in default under this Agreement, and after all Cure
Periods have been exhausted, the City as its sole remedy may terminate this Agreement and the Lease
upon delivery of a notice of termination to Regal, which notice of termination shall be effective as to the
termination of this Agreement within thirty (30) calendar days after receipt by Regal if such default
remains uncured. In the event any party other than Regal shall be in default under this Agreement, all
remedies, at law or in equity, shall be available to Regal with respect to such default. Notwithstanding
4827-3676-5710.1
7
",,,,-,,,,,,,,,,,~,,,,,,>,,__~,,~,,,,,,,,,~_,,,,,_,_~_,,",,o'-,,,,".,.,,,,",., """"""""~" '. ..1 . ~. $
2012-2
anything in this Agreement to the contrary, the acts of one Owner of a parcel within the Property shall not
affect the rights under this Agreement with respect to any other parcel within the Property.
5.4 RESERVED
6. PROTECTION OF MORTGAGE HOLDERS.
6.1 Protection of Mortgage Holders. Regal and the City agree that this Agreement shall not
prevent or limit Regal (or any Owner), in any manner, at Regal's (or such Owner's) sole discretion, from
encumbering the Property or any portion thereof or any improvement thereon (owned by Regal or any
other Owner, as the case may be) by any mortgage, deed of trust or other security device securing
financing with respect to such Property. The City acknowledges that the lenders providing such financing
("Mortgagees") may require certain Agreement interpretations. Accordingly, the City agrees, upon the
written request of Regal (or the applicable Owner), to meet from time to time with Regal and
representatives of such Mortgagees to negotiate in good faith any such request for interpretation. The
party making such request shall be obligated for the payment or reimbursement to the City of all costs
incurred by the City directly related to this provision to meet and negotiate any such requests for
interpretation and, upon request by the City, shall make a cash-equivalent deposit in an amount of such
costs as reasonably estimated by the City in advance of the City entering into such negotiations. The City
will not unreasonably withhold its consent to any such requested interpretation, provided such
interpretation is consistent with this Agreement. Any Mortgagee of all or any portion of the Property shall
be entitled to the following rights and privileges:
6.1.1 Neither entering into this Agreement nor a breach of this Agreement shall defeat,
render invalid, diminish, or impair the lien of any mortgage on all or any portion of the Property.
6.1.2 If the City timely receives a written request from a Mortgagee requesting a copy
of any notice of default that may be given to Regal under the terms of this Agreement, the City
shall provide a copy of that notice to the Mortgagee within one (1) Business Day after sending the
notice of default to Regal. The Mortgagee shall have the right, but not the obligation, to cure the
default during the remaining cure period allowed such party under this Agreement.
6.1.3 Any Mortgagee who comes into possession of all or any portion of the Property,
pursuant to foreclosure of the mortgage or deed of trust, or deed in lieu of such foreclosure, shall
take the Property or part thereof subject to the terms of this Agreement, including the right of the
City to terminate this Agreement in the event that a default under this Agreement by Regal is not
cured during the cure periods provided in Sections 5.2 and 5.3 above. Notwithstanding any other
provision of this Agreement to the contrary but subject to the immediately preceding sentence, no
Mortgagee shall have an obligation or duty under this Agreement to perform any of Regal's
obligations hereunder or to guarantee such performance.
7. GENERAL PROVISIONS.
7.1 Assignment. Nothing in this Agreement affects Regal's or any other Owner's rights to
own, transfer, conveyor encumber all or any portion of the Property owned by Regal or such other
Owner. Regal (or an Assignee) shall have the right to assign, without the consent of the City, all or part of
its rights and obligations under this Agreement to a Person who is an Assignee. Upon the assignment of
this Agreement to a Regal Assignee, (a) the assignor (Regal or an Assignee, as the case may be) shall be
released from this Agreement when (i) written notice of such assignment is given to the City, and (ii) the
Assignee assumes in writing the obligations of Regal under this Agreement with a copy thereof delivered
4827-3676-5710.1
8
.,.._,,...;<!\..'"""""'.;;....,,"'''''~;~''*'......._l''....,,,.'W.''i'..+..,r'...."''
2012-2
to the City, and (b) the tenn "Regal" as used in this Agreement shall mean such Assignee. No other
Owner shall have any right to assign this Agreement or any rights thereunder.
7.2 Amendment or Tennination of this Agreement. Except as provided in Section 5.3 above
(for tennination as a remedy for an uncured default), this Agreement may be amended or tenninated with
respect to any parcel within the Property only by written agreement signed by the then current Owner of
such parcel and the City after approval by the Council (and, as to the Theatre, by Regal or its Assignee),
without the necessity of the joinder of any other Person; provided, however, any amendment or
tennination of this Agreement shall not be effective with respect to any parcel in the Property or with
respect to the rights under this Agreement of any Owner unless the Owner of such parcel or the Owner
whose rights are so affected also is a signatory to such amendment or tennination. In order for any such
amendment or tennination to be effective, it must be adopted by the City by resolution as set forth in the
California Development Agreement Legislation and must be in fonn suitable for recording in the Official
Records of San Bernardino County, California. In accordance with City Code Chapter 19040, the
procedure for an amendment to this Agreement shall be a tiered amendment review procedure as follows:
(a) proposed amendments that are development related (such as affecting
uses, density, height, coverages, or setbacks) must be submitted to the
Director of the Community Development Department and/or to the
Planning Commission of the City for recommendation for approval or
non-approval as required by the Development Code at the time of such
proposed amended and then forwarded to the Council for detennination,
at the Council's discretion, of approval or non-approval, with the
Council not being bound to accept the Planning Commission
recommendation; and
(b) all other proposed amendments must be approved by the Council at its
discretion.
7.3 Hold Harmless. Regal shall defend, indemnify and hold harmless the City and the
Agency, the SBEDC, their officers, elected officials, attorneys, departments, boards, commissions,
employees and agents (collectively, the "Citv/Ag:ency/SBEDC Indemnified Parties") from any claim,
actions or proceeding against the City/Agency/SBEDC Indemnified Parties to attack, set aside, void or
annul this Agreement on the basis that Regal did not have authority to enter into this Agreement ("Re~al
Indemnity Claim"); and Regal shall reimburse the City/Agency/SBEDC Indemnified Parties for any court
costs and attorney's fees which the City/Agency/SBEDC Indemnified Parties may be required by a court
to pay as a result of a Regal Indemnity Claim. At its sole discretion, the City, the Agency, and/or the
SBEDC may participate at its own expense in the defense of any such Regal Indemnity Claim, but such
participation shall not relieve Regal of any obligation imposed by this Section 7.3 .1. The City, the
Agency, and/or the SBEDC shall notify Regal promptly of any Regal Indemnity Claim and cooperate
fully in the defense. Regal, the City, the Agency, and/or the SBEDC shall jointly select legal counsel to
represent the City, the Agency, and/or the SBEDC in any such Regal Indemnity Claim. The City, the
Agency, and/or the SBEDC, without Regal's written consent, shall not settle any Regal Indemnity Claim
that is subject to the indemnity under this Section 7.3.1. If during the proceeding a settlement demand is
made and Regal is willing to satisfy the settlement demand and the City, the Agency, and/or the SBEDC
rejects such settlement demand, Regal's indemnity obligation in this Section 7.3.1 shall from that point
forward not exceed the amount of the settlement demand. Notwithstanding any language to the contrary
in this Section 7.3 .1 or elsewhere in this Agreement, Regal shall have no indemnity obligations to the
City/Agency/SBEDC Indemnified Parties for claims that arise from or are alleged to arise from (i) the
negligence or willful misconduct of any of the City/Agency/SBEDC Indemnified Parties, or (ii) any costs
4827-3676-5710.1
9
"~";"';""~""''''''"'~'''__'''.'''''-';d-...;''".H~.''''''.;"'..;.;.,:..ji..~ ',-'I. ,',' ll.!. l:, T __.', .~ll'lIij~;~.,,'>~.1'-"">"-'
>...,,,.,,,,,._.,,..",,,,.,.,,j.-",,,..:,,,~>_,,.,,,.,,,.~~,"::,..,,,,..:"""'''''<:'''''::1'"~>!~~'__~''''''''~'':'_"''IC'''''>'"''''''-
2012-2
or legal expenses that arise from any suit or action commenced by any of the City/Agency/SBEDC
Indemnified Parties.
7.4 Binding Effect. Except to the extent otherwise provided in this Agreement, the burdens
of this Agreement bind, and the benefits of this Agreement inure to, the City's and Regal's respective
successors in interests and assigns, including as provided in Section 3.5.3 above and in Section 7.5 below.
7.5 Relationship of the City and Regal: Third Party Beneficiaries. The contractual
relationship between the City and Regal (and any other signatory to this Agreement) arising out of this
Agreement is one of independent contractor and not agency. Nothing in this Agreement shall be construed
as making the City and Regal (or any other signatory to this Agreement) joint venturers or partners. There
are no third party beneficiaries of this Agreement, and this Agreement does not create any third-party
beneficiary rights; provided, however, (a) the provisions of this Agreement regarding development rights
applicable to the Property shall apply to and be enforceable by any Owner with respect to the portion of
the Property owned by such Owner, and (b) an Owner has the rights set forth in Section 7.2 of this
Agreement regarding amendment and termination of this Agreement.
7.6 Notices. Any notice to be provided or permitted under this Agreement shall be in writing,
signed by the party giving such notice and sufficiently given if hand delivered, delivered by an overnight
messenger/delivery service or mailed by registered or certified mail, postage prepaid, return receipt
requested, addressed as set forth below. Such notices, if delivered (i) by hand, shall be deemed given
when delivered, (ii) by an overnight messenger/delivery service, shall be deemed given upon delivery or
one (1) Business Day (hereinafter defined) after the sending of such notice, whichever occurs earlier, and
(Hi) by mail, shall be deemed given five (5) Business Days after deposit in the U.S. mail. Notice that
starts the running of any cure period and that is delivered on a non-Business Day shall be deemed
delivered on the next following Business Day if left at the notice address or the next Business Day on
which it is redelivered if it is not left at the notice address.
The names and address of those representatives of each party to which notices shall be sent are:
If to City, to:
With a copy to:
And a copy to:
If to Regal, to:
4827-3676-5710.1
City of San Bernardino
300 North "D" Street
San Bernardino, CA 92418
Attention: City Manager
Timothy J. Sabo
Lewis, Brisbois, Bisgaard & Smith, LLP
650 East Hospitality Lane, Suite 600
San Bernardino, CA 92408
SBEDC
201 North E Street, Suite 301
San Bernardino, California 92401
Attn: Emil A. Marzullo
Regal Cinemas, Inc.
7132 Regal Lane
Knoxville, Tennessee 37918
Attn: Real Estate Department
10
l...Il..f....."'_""".''''-'
""'~""'.'_~...""""_<.....;--.,."4..,.~'.."""""''',.-''.~~0j.lfi'''l'l~... ., 'li\~(",,;j>'
,I.~.d,_t:("".;.;~~""
2012-2
With a copy to:
Herbert S. Sanger, Jr., Esq.
Wagner, Myers & Sanger, P.c.
1801 First Tennessee Plaza
Knoxville, Tennessee 37929
Such addresses shall be subject to change from time to time to such other representatives or addresses as
may be specified in written notice given by the intended recipient to the sender in accordance with this
Section 7.6.
7.7 Estoppel Certificates. At the request of either party, the other party, within thirty (30)
calendar days after receipt of such request, shall certify in writing that, to the best of its knowledge, (a)
this Agreement is in full force and effect in accordance with its terms and is a binding obligation of the
certifying party, (b) this Agreement has not been amended or modified, except as is expressly stated in
that estoppel certificate, and (c) no default in the performance of the requesting party's obligations as
provided in this Agreement exists, except as expressly stated in that estoppel certificate.
7.8 Rules of Construction. The singular includes the plural; the masculine gender includes
the feminine; "shall" is mandatory; "may" is permissive. The word "including" as used herein shall be
deemed to mean "including, but not limited to." A "Business Day" is a day other than a Saturday,
Sunday or City holiday.
7.9 Entire Agreement and Waivers. This Agreement constitutes the entire understanding and
agreement of the City and Regal with respect to the matters set forth in this Agreement. This Agreement
supersedes all negotiations or previous agreements between the City and Regal respecting this
Agreement. All waivers of the provisions of this Agreement must be in writing and signed by the
appropriate authorities of the City and Regal.
7.10 Incorooration of Recitals and Exhibits. The recitals set forth in Section 1 of this
Agreement and exhibits referenced in this Agreement are incorporated in and part of this Agreement.
7.11 Captions. The captions of this Agreement are for convenience and reference only and
shall not define, explain, modify, construe, limit, amplify or aid in the interpretation, construction, or
meaning of any of the provisions of this Agreement.
7.12 Consent. Where the consent or approval of the City or Regal is required in or necessary
under this Agreement, such consent or approval shall not be unreasonably withheld, delayed, or
conditioned.
7.13 Covenant of Cooperation. The City and Regal shall cooperate, deal with, and assist each
other in good faith in connection with the performance of the provisions of this Agreement.
7.14 Recording. The City Clerk shall cause a copy of this Agreement to be recorded with the
Office of the County Recorder of San Bernardino County, California, within ten (10) calendar days
following the execution of this Agreement.
7.15 Severability. Every provision of this Agreement is and shall be construed to be a separate
and independent covenant. Without limiting the generality of the foregoing, if any provision of this
Agreement is found to be invalid or unenforceable for any reason, then the remainder of this Agreement
shall not be affected and shall be enforced to the extent permitted by law and the parties shall negotiate in
good faith for such amendments to this Agreement as may be necessary to achieve its intent,
notwithstanding such invalidity or unenforceability.
4827-3676-5710.1
11
"....,.~"'_"',..,",..'.(.<."i""'....._,>''','''v,>rn''''''..~i'',",_~~_'''',w"",,.,.,.,,,,,,,,~,,"?",,,,,,:,..,,,,..,
2012-2
7.16 Further Actions. Whenever and as often as it is requested to do so by the other party, each
party shall execute, acknowledge and deliver or cause to be executed, acknowledged or delivered, any and
all such further documents as may be reasonably necessary, expedient or proper in order to achieve the
intent of this Agreement.
7.17 Interoretation. Governing Law and Venue. This Agreement and any dispute arising
hereunder shall be governed and interpreted in accordance with the laws of the State of California. Venue
for any such dispute shall be in the Superior Court, County of San Bernardino, Central District or
equivalent federal court having jurisdiction for the City of San Bernardino.
7.18 SBEDC No Longer Party. At such time that the SBEDC no longer owns any portion of
the Project, the SBEDC shall no longer be a party to this Agreement. At request of either Regal or the
City, SBEDC shall provide written confirmation of its nonownership position in recordable form
reasonably acceptable to the SBEDC, provided, however, the furnishing of such written confirmation is
not required as a condition to SBEDC no longer being a party to this Agreement, as such automatically
occurs upon such non-ownership as reflected in the Official Recording of San Bernardino County,
California. Nothing contained herein shall prevent the SBEDC from selling, conveying, or otherwise
mortgaging all or any interest of the SBEDC in the Project.
[SIGNATURE PAGE FOLLOWS]
4827-3676-5710.1
12
T~'~U 'LiIl.... ',.. Ai
:'Il~. ,,4'l......"'r.~~- .:.__,...""..,..~
. ..~.".",.,..<"""",.;",,,,,.',,,,.,"'".._,,,,,,".,,..,,,~_,,,,,,,,,,__.,,,,,,",<_"''''''''_,~_"e;~.C':'.;F,"I."""~~''''''_~'''''''''''_'"''''''
2012-2
IN WITNESS WHEREOF, this Agreement has been executed by the City of San Bernardino,
acting by and through its Mayor and Common Council, pursuant to Resolution No. 2012-2
authorizing such execution, by Regal Cinemas, Inc., and by the San Bernardino Economic Development
Corporation.
Dated this _ day of
,201_,
REGAL CINEMAS. INC.
Regal Cinemas, Inc.
a Tennessee corporation
CITY
City of San Bernardino
By:
By:
Name: Patrick J. Morris
Name:
Title: Mayor
Title:
City Clerk
Approved as to Form and Legal Content:
{)~ C- ~ t ~ ~ ~'f~ f3e./*;7 Cf~
City Attorney ....~.!-..- t VI 2. ~ (~ ~;1- ~
H~ r~ rr--7 (" ) --'I
~~~. -9:(1
SBEDC
San Bernardino Economic Development Corporation
a California non-profit corporation
AGENCY
Redevelopment Agency
of the City of San Bernardino,
a public body, corporate and politic
By:
By:
Patrick J, Morris
President
Emil A. Marzullo
Interim Executive Director
APPROVED AS TO FORM:
APPROVED AS TO FORM:
By:
By:
Counsel
Agency Counsel
4827-3676-5710.1
13
__"""_>"~""'''''"''''''i'''''~~~~''''''~'''t..",,,.,,,,,,,-:c.;.<'
2012-2
EXHIBIT A
PROPERTY
APN 0134-121-26-0000
Legal Description - MN 0134-121-26-0000
Parcel No. 1 of Parcel Map 15038 in the City of San Bernardino, County of San Bernardino, State of
California, as per plat recorded in Book 186 of Parcel Maps, Pages 14 and 15, records of said County.
4827-3676-5710.1
14
r -! "Mlill(U.l. ~~'...'.. .~"r.~ f.:tIl(~_.""'''~'''''''''''_-_''':'"'''''""''''.'-''
2012-2
-----,'"-flf-----w - ~ -- ----. -------.- - -------- -. ------SJNH- ,---~ -,
I I .. = I
I : ~ I
I ~ . I
N I
4111 I
..
~
;
I
:&
!
@)
j
I
,I
t
I
I
't
I
I
,.,. 7
@
l,UE.
III.t'
I .\,11
I
0I-
I Ptf. .
'1' @
I
I
(jj)
@
I
I
I
I
... ....
I-
1.'.1.
1.1.',
@
@
I
'"
I
II..
I
..n f
'I'
I
I
I
I
I
I
I
of-
.,"
-
:; SBEDC Owned Property ~ I
I : I
-, - - ~ _Regal DeinisC<i PrOPertY - - - .W~w.- cIneiDaPareer. -iflEf~ -.' --'
4827-3676-5710,1
I
5
r
~
I
I'
./1:
.'
. ........ '" .(..:,,'"
.It
@
2
hr. 1
@
Pet, .
:i €I
tMJ
'11. J
@
!1:.lt ..
@)
;
e
P4r. t
..j
@
III'
15
^""'~""",","'''A'''','~';'''''''''~'''''"-'''''''''"''''''''''''WiJq'',,"~~~~..l>o<__;;;o'~"'\''')~
2012-2
EXHIBIT B
VESTED PROVISIONS
The following portions and provisions of the Development Code are the Vested Provisions:
Amendment to Development Code Chapter 19.06 - Commercial Districts, Table 06.01 - Commercial
Districts List of Permitted Uses as amended on ,201_,
4827-3676-5710.1
16
:I ..fl!i!..l_'-' '._ !$1
1 ~U.I
~'.. ~n<l:.ruv'~ f",,^.n,,:W,,' '!"+,'"V_",",',,.,.,,",.,_..e~v
,.,.."."."'_""""'...~_-,_;o;.__~""._..~-"_.'"""_.""....,..'^"" '"-.e...~"'~_.,.__...I.~_".!III".'''~,-'1'*'I$.._.,.,_~_...~*'~lI!~''"'''',~,."..'\,
O:::~'l~r;l '1"1>.
~~~"'~t.
~~~~~i
'-, ~.>.-;-../:: it. re.
!it r "',", "'AII':'., ~~
, ~.-.."'~-'''.':''''
~ ~ rz:;;~~-:'. f-'
~tfAt:\~'-71~
-"<7.u!'Ii"'"
INTER OFFICE MEMORANDUM
OFFICE OF THE CITY ATTORNEY
CITY OF SAN BERNARDINO
To:
Mayor and Councilmembers
From:
Henry Empeilo, Jr., Senior Deputy City Attorney
Subject:
JanuarY 9, 2012
January 9, 2012 Council Meeting Agenda Items No.7 (B), (C), (0) and (E)
Involving the Downtown Regal Cinema Project
Date:
cc:
City Attorney, City Clerk, City Manager, Director of Community Development
This memorandum outlines unresolved legal issues on these four agenda items and
explains why the City Attorney's Office rejected these four items on the Minute Traq System.
We raised many of these issues at the December 14,2011 Planning Commission Meeting.
1. Agenda Item No.7 (B). Minute Traq Document No. 1469. Ordinance Deleting
Amendment MC 1356 and Amending Development Code Chapter 19.06, Table 06.0 I,
List of Permitted Uses to Permit New Movie Theaters Not Otherwise Exempted by a
Development Agreement. . . .
a. The Mayor and Council cannot make the finding that Development Code
Amendment No. 11-11 is exempt from CEQA under CEQA Guidelines
Section 15061(b)(3). DCA No. 11-11 is an integral part of two other actions
proposed at this same Council Meeting: approval of Development Agreement
No. 11-02 and Conditional Use Permit Modification No. 11-03. Staff
acknowledges that these two other actions are not exempt from CEQA. DCA
No. 11-11 cannot be considered as a separate project and split from the other
two actions and be declared exempt from CEQA. The term "project" refers to
the whole of an action and to the underlying activity being approved, not to
each governmental approval. 14 Cal. Code Regs 15378.
The City cannot divide a single project into smaller individual subprojects to
avoid responsibility for considering the environmental impact of the project as
a whole. OrindaAss'n v. Board of Supervisors (1986) 182 CA3d 1145,1171.
- 1 -
~~J(/l)/~)
If a J,'J,.
"~_,_"~~._~_.,..,."., " ..,,,.,,,.!,,".,,,,.,,.+,\,,,c..,,,,.C'''-':~~''.''H''l1_-''.'''''''''"''_''_._,."
F:\EMPENO\Misc Memos &. LettersIMemo to Mayor &. cc Ie 1-9-12 Agenda Item No.7.wpd
~ (_ ".1. \i!I{,_ _..1., I \Jli -J.!'<m!'~"'0'"l~':''''''''''''''''_'''',.-",'''1<W'~'''-'"'~
CEQA "cannot be avoided by chopping up proposed projects into bite-sized
pieces which, individually considered, might be found to have no significant
effect on the environment or to be only ministerial." Tuolumne County
Citizens for Responsible Growth v. City of Sonora (2007) 155 CA4th 1214.
b. Exhibit 3, Ordinance Combine, Adoption of Development Agreement No. 11-
02 by Ordinance violates Development Code Section 19.40.030, which
requires Development Agreements to be approved by a Council Resolution.
c. Exhibit 3, Ordinance Combine, in the title to this Ordinance, the word "TO"
in the third to last line should be deleted.
d. Exhibit 4, Ordinance, Page 1, second to last "Whereas clause," should be
corrected to state that the Planning Commission recommended approval by the
Mayor and Council.
2. Agenda Item No. 7(C). Ordinance Approving Development Agreement No. 11-02
Between the City and Regal Cinemas, Inc.
a. EIR SCH #2009111089, the Program EIR to analyze the environment impacts
of Merger A is legally inadequate in providing CEQA analysis of Development
Agreement 11-02. This EIR does not discuss Development Agreements, does
not analyze any specific potential adverse environmental effects of this Project
(e.g. traffic, noise, air quality), nor does this EIR provide any mitigation
measures specific to this Project. An Initial Study under CEQA should be
performed by staff.
b. Adoption of Development Agreement No. 11-02 by Ordinance violates
Development Code Section 19.40.030, which requires Development
Agreements to be approved by a Council Resolution.
c. Exhibit 3, Development Agreement Section 3.7, Regal Commitments, should
include a definition of "First Class Motion Picture Theatre" similar to the
definition stated in the Inland Center Mall Development Agreement
Amendment recently approved by the Mayor and Common Council.
d. Development Agreement Section 3.3, Vested Provisions, states that the Vested
Provisions includes the lease between SBEDC and Regal. The fully executed
Lease must be given to the Mayor and Common Council and should be
included as an Exhibit to the Development Agreement. If Regal has not yet
signed the Lease, then Regal does not have an equitable interest in the property,
and does not have standing to obtain approval of the proposed Development
Agreement.
-2-
F:\EMPENO\Misc Memos & Letters\Memo to Mayor & CC re 1-9-12 Agenda Item No. 7.wpd
_' '''"~.~' ".,,*,,""""'~ ~_"".__~_;_~"..,....."...,...~_~,-.,.,,,,",,,,-~..;-..,..._,,,,,,,,~,,,,:,-,,,,..,,.-,,,,,.,,,,,,,,,,_'_'~._.~""'''''''''-W-''''_''l'''''''''''''''''''-
e. Development Agreement Section 1.10 and the signature page must be revised
to state that the City Manager is to execute the Development Agreement, as is
correctly stated in the proposed Resolution/Ordinance and as is required by
Development Code Section 19.40.030(4).
f. Development Agreement Section 1.12.6 must be revised to become consistent
with Development Code Section 19.40.040(H). The phrase "Notwithstanding
the provisions in Section 3.4 of this Agreement" must be added to the
beginning of Section 1.12.6, and the phrase ''that cannot reasonably be
addressed by other means" should be deleted.
g. Development Agreement Section 7.3, Hold Harmless, should be revised to also
require that Regal defend, indemnify and hold harmless the City Indemnified
Parties from any and all claims, actions, or proceedings arising from or related
to any negligent act, error, or omission by Regal in their operations of the
theater. In the Lease, Regal does not indemnify the City.
h. The Development Agreement should require Regal to provide insurance
coverage naming the City as an additional insured in the same coverage
amounts as Regal has provided for SBEDC in the Lease. The Development
Agreement and the Lease currently provides no insurance coverage for the
City.
1. Because of the recent California Supreme Court ruling regarding the
dissolution of California redevelopment agencies, the Redevelopment Agency
of the City must be removed as a party to the Development Agreement.
3. Agenda Item 7(D). Resolution Approving Development Agreement No. 11-02. Same
legal issues as stated in Section 2, above, except subsection 2(b) regarding adoption
by Ordinance.
a. Staff Report at Page 2, third paragraph, should state that the Minutes of the
December 14, 2011 Planning Commission Meeting are only "Draft" Minutes,
they have not yet been approved by the Planning Commission.
b. Staff Report at Page 2, second to the last paragraph, the word "migration"
should be replaced with "mitigation."
4. Agenda Item 7(E). Proposal to modify CUP 97-01 with Conditional Use Permit
Modification No. 11-03.
a. EIR SCH #2009111089, the Program EIR to analyze the environmental
impacts of Merger A is inadequate in providing CEQA analysis of Conditional
Use Permit Modification No. 11-03 to modify CUP 97-01. This EIRdoesnot
analyze any specific potential adverse environmental effects of this Project
-3-
F:\EMPENO\Misc Memos & Letters\Memo to Mayor & CC re 1-9-12 Agenda Item No. 7.wpd
(e.g. traffic, noise, air quality), nor does this EIR provide any mitigation
measures specific to this Project. A Mitigated Negative Declaration was
adopted when CUP 97-01 was approved by the City. An Initial Study under
CEQA should be performed by staff to determine whether that previous
Mitigated Negative Declaration is sufficient or whether additional mitigation
measures must be adopted to address any new environmental effects produced
with the proposed modifications to CUP 97-01.
b. The Staff Report references the Mitigated Negative Declaration adopted by the
City in 1997 for CUP 97-01 for the construction of the existing theater. Staff
has provided as an Exhibit to this Agenda Item a copy of the 1997 Mitigated
Negative Declaration. This 1997 MND needs to be updated, at least with
respect to potential air quality impacts. The 1997 MND at Pages 20-24
discusses the project applying the 1997 Air Quality Management Plan
(AQMP). Since that time, the Southern California Air Quality Management
District and South California Association of Governments has adopted two
new AQMPs, in 2003 and 2007. The new Initial Study must address the CUP
modification in light of new regulations, including the 2007 AQMP.
We respectfully request that the Mayor and Council continue these four Agenda Items
so that these documents will be corrected and these legal issues resolved.
Respectfully submitted,
~~-
Henry Empefio, Jr.
Senior Deputy City Attorney
-4-
F:\EMPENO\Misc Memos & LettersIMemo to Mayor & CC re 1-9-12 Agenda Item No. 7.wpd