HomeMy WebLinkAbout07- Economic Development ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION/COUNCIL ACTION
From: TIMOTHY C. STEINHAUS Subject: CAROUSEL MALL
Agency Administrator AGREEMENT
Date: November 18, 1993
----------------------------------------------------------------------------------------------------------------------------------------------
Synopsis of Previous Commission/Council/Committee Action (s):
On November 18, 1993, the Redevelopment Committee authorized the execution of a Cooperation and
Reimbursement Agreement between the Economic Development Agency and Central City Company.
i
--------------------------------------------------------------------------------------------------------------------------------------------
Recommended Motion(s):
(Community Development Commission)
MOTION: That the Community Development Commission authorize the Chairman to execute a Cooperation
and Reimbursement Agreement between the Economic De;,00ps l ent Agency and Central City
Company,for an amount not to exceed$35,000.00 relative to ltant services for negotiation of
leases and operating convenants at the Carousel Mall. i"
TIMOTHY C. STEINHAUS
Agency Administrator
--------------------------------------------------------------------------------------------------------------------------------------
Contact Person(s): Timothy C. Steinhaus Phone: 5081
Project Area(s): _Central C. i ' Ward(s): 1
Supporting Data Attached: Staff Report:
FUNDING REQUIREMENTS: Amount: $35,000 Source: Tax Increment
Budget Authority:
------------------------------------------------------------------------------------------------------------------------------------------------
Commission/Council Notes:
------------------------------------------------------------------------------
TCS:SMM:mym:mallagr COMMISSION MEETING AGENDA
Meeting Date: 12/06/1993
Agenda Item Number:
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
STAFF REPORT
----------------------------------------------------------------------------------------------------------------------------------------------
Carousel Mall Agreement
This is to request that the Redevelopment Committee recommend that the Community Development Commission
enter into a cooperation and reimbursement agreement between the EDA and Central City Company relative to
consultant services for the negotiation of leases and operating covenants at the Carousel Mall.
In May, 1993, Central City Company entered into an agreement with CenterMark Properties, Inc. relative to the
retention of the anchor tenants at Carousel Mall. It was agreed upon that a feasibility study would be conducted
to determine the circumstances and conditions, if any,under which the three existing anchor tenants at the Mall
(Harris', JC Penney, and Montgomery Ward) would agree to execute extended operating covenants which will
obligate them to continue to operate at the Mall for seven to ten years. CenterMark Properties,Inc. has extensive
experience in management of retail shopping centers and regional malls, and more specifically with regard to
negotiations for leases and operating covenants with anchor tenants of such centers and malls.
It is important that the Economic Development Agency participate in this endeavor due to it's ownership share in
the mall property and concerns with the possible adverse economic impacts that would be associated with the
absence of such covenants, including the loss of sales tax revenues and loss of employment opportunities in the
Central Business District. It is in the City's best interests as well as those of its citizens to cooperate with and
monitor the efforts to improve the performance of the Carousel Mall.
The proposed agreement would share the cost of the services called out in the CenterMark agreement equally
I between the Agency and Central City Company. Said services shall not exceed the sum of $70,000, with the
Agency's share bei�S.$35,000. In addition, upon completion of the CenterMark agreement, it is anticipated that
recommendation ror i, p�ementation shall be included and presented by the Community Development Commission.
Staff recommen adop ion of the form motion.
TIMOTHY C. STE NHAUS, Administrator
Economic Development Agency
------------------------------------------------------------------------------
TCS:SMM:mym:mallagr COMMISSION MEETING AGENDA
Meeting Date: 12/06/1993
Agenda Item Number: I
a
COOPERATION AND REIMBURSEMENT AGREEMENT
This Cooperation and Reimbursement Agreement (the "Agreement") is entered into as of
the date set forth below by and between Central City Company, a California general partnership
("Central City"), and the Economic Development Agency of the City of San Bernardino, a body
politic (the "EDA").
Recitals
A. Central City owns a portion of, and operates the Carousel Mall in San Bernardino,
California (the "Carousel Mall"). The EDA also owns a portion of the Carousel Mall.
B. The Carousel Mall is critically important to the development and redevelopment
of the downtown core of the City of San Bernardino. Further, the retention of anchor tenants at
the Carousel Mall is critical to the survival of the Carousel Mall and therefore, the development
and redevelopment of downtown San Bernardino.
C. Central City has, or will be entering into that certain Agreement, with CenterMark
Properties, Inc. ("CenterMark") dated May 12, 1993, and calling for certain studies with regard
to retention of anchor tenants at the Carousel Mall (The "CenterMark Agreement").
D. In order to foster the development and redevelopment of downtown San
Bernardino, the EDA wishes to assist Central City with efforts to retain anchor tenants at the
Carousel Mall.
Operative Provisions
NOW, THEREFORE, in consideration of the above recitals, and of the undertakings
set forth herein, and of the execution of the CenterMark Agreement by Central City, the parties
hereto agree as follows:
1. Cooperation with Studies.
1.1 The EDA covenants that it will use its best efforts to cooperate with
CenterMark and participate in conducting the studies called for by the CenterMark Agreement.
Such cooperation shall include, but shall not be limited to, providing data and information to
CenterMark and its representatives as CenterMark may reasonably request, and meeting with and
allowing EDA representatives to be interviewed by CenterMark with respect to the subject matter
of the CenterMark Agreement.
1.2 The EDA further covenants that it will, subject to approval by the
Community Development Commssion of the City of San Bernardino, cooperate with and
participate in carrying out the phase II services anticipated by the CenterMark Agreement and
implementing the program recommended by CenterMark and as approved and/or amended by
Central City.
2. Financial Assistance.
The EDA specifically acknowledges that the Central City is pursuing retention of
the anchor tenants for Carousel Mall's benefit and for the benefit of the City of San Bernardino.
Further, the EDA specifically acknowledges that Central City is entering into the CenterMark
Agreement, in part, based upon the agreement of the EDA to share the cost of the services called
for thereby and to participate in implementation of the program resulting therefrom. The EDA,
therefore, agrees that it will pay, to Central City, fifty percent (50%) of the cost of the services,
including fees and expenses passed on to Central City, pursuant to the CenterMark Agreement;
provided, however, that the EDA's obligation under this section shall not exceed the sum of
$35,000.00. Such reimbursement shall be paid, by the EDA, to Central City, within ten (10)
days following submission,to the EDA by Central City,of CenterMark's invoices to Central City.
If CenterMark bills Central City in increments, the EDA's obligations hereunder shall be paid
in increments, each equal to fifty percent (50%) of Central City's obligation, subject to the limit
contained hereinabove.
IN WITNESS WHEREOF, the parties have executed this Agreement to be effective on
and as of this day of 1993.
"Central City"
CENTRAL CITY COMPANY, a California
general partnership
By:
Its:
"EDA"
ATTEST: ECONOMIC DEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO, a body
politic
By:
Secretary TOM MINOR
Its: Chairman
Approved as to form and legal content:
/Agency ounsel
SMM:awxwp
AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of
the 12th day of May, 1993, by and between Central City Company, a7
California partnership, with offices at 295 Carousel Mall,
San Bernardino, California 92401 ("CCC") , and CenterMark
Properties, Inc. , a Missouri corporation, whose address is
611 Olive Street, Suite 1555, St. Louis, Missouri 63101 � CMP") .
Recitals
A. . CCC has an ownership interest in certain real property
located in the City of San Bernardino, County of San Bernardino,
State of California, which property consists of a commercial and
retail shopping center (the "Center") known as "Carousel Center"
and other amenities.
B. CCC is . interested in improving, expanding and/or
redeveloping the Center so as to obtain the commitment of current
tenants (particularly anchor tenants) to continue operations at the
Center beyond the terms specified in current leases and/or the
Reciprocal Easement and Operating Agreement ("REA") applicable to
said tenants so as to maximize the economic efficiency of the
operations of the Center and to avoid future deterioration of the
Center's operations or value.
C. The Redevelopment Agency of the City of San Bernardino
("RDA") , is concerned with the possible adverse economic impacts,
including, but not limited to, loss of sales tax revenues and loss
of employment opportunities, if results of operation of the Center
were to deteriorate and has found that it is in the City's best
interests, as well as those of its citizens, to cooperate with and
monitor efforts to improve the performance of the Center.
D. CMP has extensive experience in management of retail
shopping centers and regional malls, and more specifically with
regard to negotiations for leases and operating covenants with
anchor tenants of such centers and malls. CMP is willing to
conduct certain studies and to provide certain reports to CCC with
regard to the Center, all as described herein.
E. CCC is willing to reimburse CMP for undertaking the
activities specified herein on the terms and conditions specified
in this Agreement.
IFS CENTBRMMM,37131,AGRUMENr V6
Agreement
In consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by each party by its execution hereof, the parties -
agree as follows:
1. Feasibility Study. CCC shall undertake a feasibility
study to determine the circumstances and conditions, if any, under
which the three existing anchor tenants at the Center (Harris
Company, JC Penney, and Montgomery Ward) (collectively the
"Anchors") would agree to execution of extended operating covenants
which will obligate such Anchors to continue to operate at the
Center for a period of seven (7) to ten (10) ' years. In connection
with such study, CMP will use its expertise, and best efforts to
determine the circumstances under which the Anchors will agree to
the execution of such extended operating covenants. Without
limiting the generality of the foregoing, the efforts of CMP will
include the following activities (collectively the "Analysis") :
a. Interviews and discussions with key executives of
the Anchors relating to the conditions, circumstances,
concessions, and incentives, if any, which the Anchors would
require in order to agree to such extended operating
covenants;
b. A leasing review and assessment of the current
tenant mix at the Center, along with discussions with key
tenants or potential tenants to determine the conditions,
circumstances, rent structure, concessions or incentives which
such tenants would require in order to execute new, or to
renew existing, leases for space at the Center.
C. A summary review of the Center's physical plant
(without employment of third party experts or contractors)
based on CMP's visual inspection of the Center;
d. An overall assessment of the market and competitive
environment in which the Center and the Anchors currently
operate and will operate in the future, including, without
limitation, an assessment of the Center's competitiveness with
the Inland Center in San Bernardino, California; and
e. Presentation of a report of the findings of CMP with
regard to the foregoing, and meeting with and discussing such
findings with representatives of CCC and the RDA as described
in Section 3 below. Such report will contain CMP's analysis
of the likelihood of obtaining the desired extensions of
operating covenants and general recommendations on the types
of actions, improvements or investments needed to obtain such
extensions. Conclusions regarding costs of repairs or
improvements will be based solely on CMP's general experience
M CENTERMARK,37131,AGREEMENT V6 2
r�
on similar projects and not on independent bids or cost
estimates.
2. Cooperation of CCC and RDA. It shall be the
responsibility of CCC to see that designated liaison personnel of
CCC and the RDA will make themselves available as reasonably
requested by CMP to provide guidance on any governmental policy and
other issues which may arise. CMP will advise such liaison
personnel of the progress of CMP's activities on a regular basis,
including at least one in-person conference during the performance
of the Analysis.
3. Form *of Report. Upon conclusion of the Analysis, CMP
will submit to CCC and the RDA a written report summarizing CMP's
activities, findings and evaluations (with supporting
documentation) , and attend a conference with. representatives of CCC
and the RDA to discuss results of the Analysis. After submission
of CMP's written summary of the Analysis, CMP's obligations
hereunder shall be deemed satisfied, except that CMP will provide,
without additional charge to CCC, such follow-up information as is
reasonably requested by CCC relating to minor clarifications of the
Analysis summary or other background information. If CMP concludes
the follow-up requests of CCC will require more than incidental
services by CMP, then CMP shall so notify CCC. Upon such notice
and at CCC's option, CCC could then agree to pay for CMP's
additional services on a time and material basis similar in nature
to this Agreement.
4. Rates for Reimbursement. CMP supervisory personnel who
will participate in and oversee the Analysis are listed on
Exhibit A attached hereto. CCC will reimburse CMP on a time and
expense basis for CMP's performance of the Analysis. Personnel
time will be reimbursed in accordance with the rates specified on
Exhibit B attached hereto, subject to a maximum reimbursement for
personnel time of $50,000. CMP's actual out of pocket expense: in
performing the Analysis, including travel and entertainment
expense, if any, will be reimbursed by CCC on a dollar for dollar
basis, subject to a maximum reimbursement for expenses of $20, 000.
All requests for reimbursement of expenses shall include reasonable
detail concerning the expenses incurred. CMP will invoice CCC on
a regular basis as time and expense are incurred with payment for
each invoice due within 20 days .of receipt thereof by CCC.
5. Completion Date. CMP will use diligent efforts to
complete the Analysis and deliver its written summary of the
Analysis to CCC and the City on or before August 1, 1993 .
6. Additional Services. If the conclusion of the Analysis
is that it will be feasible for CCC to obtain the desired operating
covenant extensions from the Anchors (the "Extensions") , then the
parties agree to negotiate in good faith toward an agreement to
M CENTERMARK,37131,AGREEMENT V6 3
1
extend CMP's services under this Agreement. The additional
services ("Phase II Services") would consist of:
a. development of a specific plan and strategy for
securing the Extensions, including cost assessments and a time'
table for completion, with supporting documentation;
b. discussions and negotiations with the Anchors toward
obtaining a letter of intent from the Anchors specifying terms
and conditions upon which the Extensions would be executed;
and
C. 'A summary assessment of the strengths and weaknesses
of the Center in its current condition, including its
location, access, physical plant, merchandising, operation and
promotion. The analysis of the Center's physical plant would
include. review or inspection by third party consultants,
engineers .and contractors.
CMP currently estimates that the cost for personnel time
needed to complete the Phase II Services will be approximately
$50, 000, but the amount of expenses (including fees of third party
consultants, engineers and contractors) which would be incurred in
the Phase II Services cannot be estimated at this time. Neither
party hereto is obligated in any way to provide or pay for Phase II
Services unless an appropriate amendment to this Agreement is
agreed to and executed by the parties.
7. CMP Disclosure. The parties acknowledge the following
matters in connection with this Agreement:
a. CMP is an affiliate of The Prudential Insurance
Company of America ("Prudential") , which directly or through
other affiliates is the beneficiary of a first deed of trust
on the Center. No action by CMP hereunder shall be attributed
to or constitute an action on behalf of Prudential in its
capacity as a lender or mortgagee.
b. CMP holds a fee interest in a portion of Inland
Center (".Inland") , a shopping mall which is located in the
City and which competes with the Center. The Inland property
owned by CMP is under a long term lease to a department-store
and CMP is not otherwise involved in the ownership or
operation of Inland.
C. CMP owns and/or operates other shopping center
properties and will be devoting only so much of its time and
attention to this matter as is necessary to complete the
Analysis. Other interests and activities of CMP may compete
indirectly with the Center. The parties acknowledge and
consent to this Agreement notwithstanding their prior
knowledge of the matters set forth in this Section 7.
)FS CFNTERMARK,37131,AGREEMENT V6 4
t
CMP agrees that during the term of this Agreement and for a term of
3 years after the term of this Agreement, CMP will not
isc ose to any third party or use for its own benefit, any
confidential or proprietary information concerning the Center or
concerning any of the Anchors which is obtained by or revealed to_
CMP as a result of performing the Analysis. Provided, however,
that .CMP may disclose such confidential or proprietary information
(i) to its legal counsel and other professional advisors for use in
connection with CMP Is services hereunder, (ii) upon due request
therefore, to regulatory officials having jurisdiction over CMP,
and (iii) as required by law or legal process; and provided further
that any information available in the public domain (other than as
a result of CMP''s wrongful disclosure thereof) shall not be deemed
confidential or proprietary information subject to the restrictions
of this Section. Information disclosed by the Anchors to CMP
regarding Carousel Mall in interviews conducted during the course
of the Analysis shall not solely by reason of such disclosure be
deemed to be in the public domain.
S. No Partnership; No Joint Venture. CCC and CMP agree that
this Agreement does not constitute a joint venture or partnership
between CCC and CMP, and that no joint venture or partnership is
created hereby. Additionally, CCC and CMP agree that neither party
is acting as an agent of the other with respect to the performance
of the Analysis.
9. Assignment; Benefit of Agreement. Except as provided
herein, neither CCC nor CMP will assign or transfer any of its
rights or obligations hereunder without the prior written consent
of the other party; provided, however, that CMP is permitted to
assign this Agreement and all its rights and obligations hereunder
to any corporation, partnership or other business entity which is
an affiliate of CMP having substantially the same management
personnel as CMP. If assignment is permitted, this Agreement will
inure to the benefit of and will burden the respective successors
and assigns of CCC and CMP.
10. Attorneys' Fees. In the event of any litigation between
CCC and CMP arising under this Agreement, the prevailing party is
entitled to court costs and reasonable legal expenses and
attorneys' fees.
11. Governing Law: This Agreement shall be interpreted and
construed in accordance with the laws of the State of California.
In the event any litigation is initiated with respect to this
Agreement, such litigation shall be instituted and prosecuted in
courts located in the State of California.
12. Modification. This Agreement may not be modified or
amended except by a written instrument executed by all parties
hereto.
JFS CENTERMARK,37131,AGREFMINT V6 5
13. Counterparts. This Agreement may be executed in
counterpart, each of which shall be deemed an original, and which
together shall compromise a fully-executed Agreement.
14. Headings. Headings and titles contained in this
Agreement are inserted only as a matter of convenience and shall
not be deemed to affect the meaning of any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CENTRAL CITY COMPANY,
a California general partnership
BY: CENTRAL CITY ASSOCIATES,
a California general partnership
By: ( /
Name:
General Partner
BY: C-T-C COMPANY,
a California general partnership
By:
Name: `
General Partner
CENTER MARK PROPERTIES, INC. ,
a Missouri corporation t;4c.
L)lle—'r'n, kll/By:
Name: William E. rafstrom X
Title: President Chief Executive Officer
JFS CENTERMARK,37131,AGREEMENT V6 6
EXHIBIT A
CMP Supervisory Personnel Participating in Analysis
Overall Direction/Department Store Discussions
William E. Grafstrom President and Chief Executive Officer
James F. Dausch Executive Vice President-Development and
New Business
Construction/Development Issues
James P. Whitcome Senior Vice President-Capital
Improvements
Peter G. Rylick Director, Project Management
John H. Lyda Development Director, West Coast
Leasing Issues
Roger D. Burghdorf Executive Vice President-Leasing
Robert Cox Vice President, West Coast Leasing
Market Research
Randall Smith Vice President, Research & Corporate
Communications
Legal
Thomas E. Frost Senior Vice President and General Counsel
Financial Analysis
James P. Mosbacher Director, Financial Analysis
Nancy Droppelman Senior Financial Analyst
M CFNTERMARK,37131,AGREEMENT V6
EXHIBIT B
Personnel Reimbursement Rates
Pay Billing
Grades Rate
Secretaries 3-4 $ 43 .17
Senior Staff/16t Level Manager 5-6 $ 60.08
(Not Anticipated)
Lyda/Droppelman 7-8 $ 85.78
Mosbacher/Smith/Cox/Rylick 9-10 $117.19
Grafstrom/Dausch/Whitcome/
Burghdorf/Frost 11-15 $247.38
Travel and other direct expenses will be billed as incurred,
without mark-up.
I
_IFS CFNTERMARK,37131,AGREEMENT V6
COOPERATION AND REIMBURSEMENT AGREEMENT
This Cooperation and Reimbursement Agreement (the "Agreement") is entered into as of
the date set forth below by and between Central City Company, a California general partnership
("Central City"), and the Economic Development Agency of the City of San Bernardino, a body
politic (the "EDA").
Recitals
A. Central City owns a portion of, and operates the Carousel Mall in San Bernardino,
California (the "Carousel Mall"). The EDA also owns a portion of the Carousel Mall.
B. The Carousel Mall is critically important to the development and redevelopment
of the downtown core of the City of San Bernardino. Further, the retention of anchor tenants at
the Carousel Mall is critical to the survival of the Carousel Mall and therefore, the development
and redevelopment of downtown San Bernardino.
C. Central City has, or will be entering into that certain Agreement, with CenterMark
Properties, Inc. ("CenterMark") dated May 12, 1993, and calling for certain studies with regard
to retention of anchor tenants at the Carousel Mall (The "CenterMark Agreement").
D. In order to foster the development and redevelopment of downtown San
Bernardino, the EDA wishes to assist Central City with efforts to retain anchor tenants at the
Carousel Mall.
Operative Provisions
NOW, THEREFORE, in consideration of the above recitals, and of the undertakings
set forth herein, and of the execution of the CenterMark Agreement by Central City, the parties
hereto agree as follows:
1. Cooperation with Studies.
1.1 The EDA covenants that it will use its best efforts to cooperate with
CenterMark and participate in conducting the studies called for by the CenterMark Agreement.
Such cooperation shall include, but shall not be limited to, providing data and information to
CenterMark and its representatives as CenterMark may reasonably request, and meeting with and
allowing EDA representatives to be interviewed by CenterMark with respect to the subject matter
of the CenterMark Agreement.
1.2 The EDA further covenants that it will, subject to approval by the
Community Development Commssion of the City of San Bernardino, cooperate with and
participate in carrying out the phase II services anticipated by the CenterMark Agreement and
implementing the program recommended by CenterMark and as approved and/or amended by
Central City.
i
2. Financial Assistance.
The EDA specifically acknowledges that the Central City is pursuing retention of
the anchor tenants for Carousel Mall's benefit and for the benefit of the City of San Bernardino.
Further, the EDA specifically acknowledges that Central City is entering into the CenterMark
Agreement, in part, based upon the agreement of the EDA to share the cost of the services called
for thereby and to participate in implementation of the program resulting therefrom. The EDA,
therefore, agrees that it will pay, to Central City, fifty percent (50%) of the cost of the services,
including fees and expenses passed on to Central City, pursuant to the CenterMark Agreement;
provided, however, that the EDA's obligation under this section shall not exceed the sum of
$35,000.00. Such reimbursement shall be paid, by the EDA, to Central City, within ten (10)
days following submission,to the EDA by Central City,of CenterMark's invoices to Central City.
If CenterMark bills Central City in increments, the EDA's obligations hereunder shall be paid
in increments, each equal to fifty percent (50%) of Central City's obligation, subject to the limit
contained hereinabove.
IN WITNESS WHEREOF, the parties have executed this Agreement to be effective on
and as of this day of 1993.
"Central City"
CENTRAL CITY COMPANY, a California
general partnership
By:
Its:
"EDA"
ATTEST: ECONOMIC DEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO, a body
politic
By:
Secretary TOM MINOR
Its: Chairman
Approved as to form and legal content:
/Agency ounsel
SMM:sw:eoop
1�
AGREEMENT
THIS AGREEMENT ("Agreement") is made and entered into as of
the 12th day of May, 1993, by and between Central City Company, a'
California partnership, with offices at 295 Carousel Mall,
San Bernardino, California 92401 ("CCC") , and CenterMark
Properties, Inc. , a Missouri corporation, whose address is
611 Olive Street, Suite 1555, St. Louis, Missouri 63101 111CMP11) .
Recitals
A. CCC has an ownership interest in certain real property
located in the City of San Bernardino, County of San Bernardino,
State of California, which property consists of a commercial and
retail shopping center (the "Center") known as "Carousel Center"
and other amenities.
B. CCC is interested in improving, expanding and/or
redeveloping the Center so as to obtain the commitment of current
tenants (particularly anchor tenants) to continue operations at the
Center beyond the terms specified in current leases and/or the
Reciprocal Easement and Operating Agreement ("REA") applicable to
said tenants so as to maximize the economic efficiency of the
operations of the Center and to avoid future deterioration of the
Center's operations or value.
C. The Redevelopment Agency of the City of San Bernardino
("RDA") , is concerned with the possible adverse economic impacts,
including, but not limited to, loss of sales tax revenues and loss
of employment opportunities, if results of operation of the Center
were to deteriorate and has found that it is in the City's best
interests, as well as those of its citizens, to cooperate with and
monitor efforts to improve the performance of the Center.
D. CMP has extensive experience in management of retail
shopping centers and regional malls, and more specifically with
regard to negotiations for leases and operating covenants with
anchor tenants of such centers and malls. CMP is willing to
conduct certain studies and to provide certain reports to CCC with
regard to the Center, all as described herein.
E. CCC is willing to reimburse CMP for undertaking the
activities specified herein on the terms and conditions specified
in this Agreement.
NS CEN U MARK,37131,AGREEMENT V6
Agreement
In consideration of the foregoing and other good and valuable
consideration, the receipt and sufficiency of which are hereby
acknowledged by each party by its execution hereof, the parties '
agree as follows:
1. Feasibility Study. CCC shall undertake a feasibility
study to determine the circumstances and conditions, if any, under
which the three existing anchor tenants at the Center (Harris
Company, JC Penney, and Montgomery Ward) (collectively the
"Anchors") would agree to execution of extended operating covenants
which will obligate such Anchors to continue to operate at the
Center for a period of seven (7) to ten (10) ' years. In connection
with such study, CMP will use its expertise, and best efforts to
determine the circumstances under which the Anchors will agree to
the execution of such extended operating covenants. Without
limiting the generality of the foregoing, the efforts of CMP will
include the following activities (collectively the "Analysis") :
a. Interviews and discussions with key executives of
the Anchors relating to the conditions, circumstances,
concessions, and incentives, if any, which the Anchors would
require in order to agree to such extended operating
covenants;
OF
b. A leasing review and assessment of the current
tenant mix at the Center, along with discussions with key
tenants or potential tenants to determine the conditions,
circumstances, rent structure, concessions or incentives which
such tenants would require in order to execute new, or to
renew existing, leases for space at the Center.
C. A summary review of the Center's physical plant
(without employment of third party experts or contractors)
based on CMP's visual inspection of the Center;
d. An overall assessment of the market and competitive
environment in which the Center and the Anchors currently
operate and will operate in the future, including, without
limitation, an assessment of the Center's competitiveness with
the Inland Center in San Bernardino, California; and
e. Presentation of a report of the findings of CMP with
regard to the foregoing, and meeting with and discussing such
findings with representatives of CCC and the RDA as described
in Section 3 below. Such report will contain CMP's analysis
of the likelihood of obtaining the desired extensions of
operating covenants and general recommendations on the types
of actions, improvements or investments needed to obtain such
extensions. Conclusions regarding costs of repairs or
improvements will be based solely on CMP's general experience
M aaTrERMARK,37131,AGREEMENT V6 2
on similar projects and not on independent bids or cost
estimates.
2. Cooperation of CCC and RDA. It shall be the
responsibility of CCC to see that designated liaison personnel of "
CCC and the RDA will make themselves available as reasonably
requested by CMP to provide guidance on any governmental policy and
other issues which may arise. CMP will advise such liaison
personnel of the progress of CMP's activities on a regular basis,
including at least one in-person conference during the performance
of the Analysis.
3. Form 'of Report. Upon conclusion of the Analysis, CMP
will submit to CCC and the RDA a written report summarizing CMP's
activities, findings and evaluations (with supporting
documentation) , and attend a conference with representatives of CCC
and the RDA to discuss results of the Analysis. After submission
of CMP's written summary of the Analysis, CMP's obligations
hereunder shall be deemed satisfied, except that CMP will provide,
without additional charge to CCC, such follow-up information as is
reasonably requested by CCC relating to minor clarifications of the
Analysis summary or other background information. If CMP concludes
the follow-up requests of CCC will require more than incidental
services by CMP, then CMP shall so notify CCC. Upon such notice
and at CCC's option, CCC could then agree to pay for CMP's
additional services on a time and material basis similar in nature
to this Agreement.
4. Rates for Reimbursement. CMP supervisory personnel who
will participate in and oversee the Analysis are listed on
Exhibit A attached hereto. CCC will reimburse CMP on a time and
expense basis for CMP's performance of the Analysis. Personnel
time will be reimbursed in accordance with the rates specified on
Exhibit 8 attached hereto, subject to a maximum reimbursement for
personnel time of $50, 000. CMP's actual out of pocket expenses in
performing the Analysis, including travel and entertainment
expense, if any, will be reimbursed by CCC on a dollar for dollar
basis, subject to a maximum reimbursement for expenses of $20, 000.
All requests for reimbursement of expenses shall include reasonable
detail concerning the expenses incurred. CMP will invoice CCC on
a regular basis as time and expense are incurred with payment for
each invoice due within 20 days .of receipt thereof by CCC.
5. Completion Date. CMP will use diligent efforts to
complete the Analysis and deliver its written summary of the
Analysis to CCC and the City on or before August 1, 1993 .
6. Additional Services. If the conclusion of the Analysis
is that it will be feasible for CCC to obtain the desired operating
covenant extensions from the Anchors (the "Extensions") , then the
parties agree to negotiate in good faith toward an agreement to
IFS CFNTERMARK,37131,AGREEMENT V6 3
r
extend CMP's services under this Agreement. The additional
services ("Phase II Services") would consist of:
a. development of a specific plan and strategy for
securing the Extensions, including cost assessments and a time'
table for completion, with supporting documentation;
b. discussions and negotiations with the Anchors toward
obtaining a letter of intent from the Anchors specifying terms
and conditions upon which the Extensions would be executed;
and
C. 'A summary assessment of the strengths and weaknesses
of the Center in its current condition, including its
location, access, physical plant, merchandising, operation and
promotion. The analysis of the Center's physical plant would
include. review or inspection by third party consultants,
engineers .and contractors.
CMP currently estimates that the cost for personnel time
needed to complete the Phase II Services will be approximately
$50, 000, but the amount of expenses (including fees of third party
consultants, engineers and contractors) which would be incurred in
the Phase II Services cannot be estimated at this time. Neither
party hereto is obligated in any way to provide or pay for Phase II
Services unless an appropriate amendment to this Agreement is
agreed to and executed by the parties.
7. CMP Disclosure. The parties acknowledge the following
matters in connection with this Agreement:
a. CMP is an affiliate of The Prudential Insurance
Company of America ("Prudential") , which directly or through
other affiliates is the beneficiary of a first deed of trust
on the Center. No action by CMP hereunder shall be attributed
to or constitute an action on behalf of Prudential in its
capacity as a lender or mortgagee.
b. CMP holds a fee interest in a portion of Inland
Center ("Inland") , a shopping mall which is located in the
City and which competes with the Center. The Inland property
owned by CHIP is under a long term lease to a department-store
and CMP is not otherwise involved in the ownership or
operation of Inland.
C. CMP owns and/or operates other shopping center
properties and will be devoting only so much of its time and
attention to this matter as is necessary to complete the
Analysis. Other interests and activities of CMP may compete
indirectly with the Center. The parties acknowledge and
consent to this Agreement notwithstanding their prior
knowledge of the matters set forth in this Section 7 .
IFS CENTERMARK,37131,AGREEMENT V6 4
I
CMP agrees that during the term of this Agreement and for a term of
XA (. 3 years after the term of this Agreement, CMP will not
isc ose to any third party or use for its own benefit, any
confidential or proprietary information concerning the Center or
concerning any of the Anchors which is obtained by or revealed to'
CMP as a result of performing the Analysis. Provided, however,
that .CMP may disclose such confidential or proprietary information
(i) to its legal counsel and other professional advisors for use in
connection with CMP's services hereunder, (ii) upon due request
therefore, to regulatory officials having jurisdiction over CMP,
and (iii) as required by law or legal process; and provided further
that any information available in the public domain (other than as
a result of CMP''s wrongful disclosure thereof) shall not be deemed
confidential or proprietary information subject to the restrictions
of this Section. Information disclosed by the Anchors to CMP
regarding Carousel Mall in interviews conducted during the course
of the Analysis shall not solely by reason of such disclosure be
deemed to be in the public domain.
8. No Partnership; No Joint Venture. CCC and CMP agree that
this Agreement does not constitute a joint venture or partnership
between CCC and CMP, and that no joint venture or partnership is
created hereby. Additionally, CCC and CMP agree that neither party
is acting as an agent of the other with respect to the performance
of the Analysis.
Jr
9. Assignment; Benefit of Agreement. Except as provided
herein, neither CCC nor CMP will assign, or transfer any of its
rights or obligations hereunder without the prior written consent
of the other party; provided, however, that CMP is permitted to
assign this Agreement and all its rights and obligations hereunder
to any corporation, partnership or other business entity which is
an affiliate of CMP having substantially the same management
personnel as CMP. If assignment is permitted, this Agreement will
inure to the benefit of and will burden the respective successors
and assigns of CCC and CMP.
10. Attorneys' Fees. In the event of any litigation between
CCC and CMP arising under this Agreement, the prevailing party is
entitled to court costs and reasonable legal expenses and
attorneys' fees.
11. Governing Law: This Agreement shall be interpreted and
construed in accordance with the laws of the State of California.
In the event any litigation is initiated with respect to this
Agreement, such litigation shall be instituted and prosecuted in
courts located in the State of California.
12. Modification. This Agreement may not be modified or
amended except by a written instrument executed by all parties
hereto.
JFS CEN ERMARK,37131,AGREEMENT V6 5
13. Counterparts. This Agreement may be executed in
counterpart, each of which shall be deemed an original, and which
together shall compromise a fully-executed Agreement.
14. Headings. Headings and titles contained in this'
Agreement are inserted only as a matter of convenience and shall
not be deemed to affect the meaning of any provision hereof.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the day and year first above written.
CENTRAL CITY COMPANY,
a California general partnership
BY: CENTRAL CITY ASSOCIATES,
a California general partnership
By:
Name:
General Partner
BY: C-T-C COMPANY,
a California general partnership
By:
Name: `
General Partner
CENTERMARK PROPERTIES, INC. ,
a Missouri corporation rYl
FIPIGEM,
�IIdiTIA� +
By: ��,�
Name: William E. rafstrom yy
Title: President s jChief Executive Officer
JFS CFNTERMARK,37131,AGREF.M NT V6
F
EXHIBIT A
CMP Supervisory Personnel Participating in Analysis
Overall Direction/Department Store Discussions
William E. Grafstrom President and Chief Executive Officer
James F. Dausch Executive Vice President-Development and
New Business
Construction/Development Issues
James P. Whitcome Senior Vice President-Capital
Improvements
Peter G. Rylick Director, Project Management
John H. Lyda Development Director, West Coast
Leasing Issues
Roger D. Burghdorf Executive Vice President-Leasing
Robert Cox Vice President, West Coast Leasing
Market Research
Randall Smith Vice President, Research & Corporate
Communications
Legal
Thomas E. Frost Senior Vice President and General Counsel
Financial Analysis
James P. Mosbacher Director, Financial Analysis'
Nancy Droppelman Senior Financial Analyst
JM CENTERMARK,37131,AGREEMEW V6
EXHIBIT B
Personnel Reimbursement Rates
Pay Billing
Grades Rate
Secretaries 3-4 $ 43 .17
Senior Staff/1st Level Manager 5-6 $ 60. 08
(Not Anticipated)
Lyda/Droppelman 7-8 $ 85,78
Mosbacher/Smith/Cox/Rylick 9-10 $117.19
Grafstrom/Dausch/Whitcome/
Burghdorf/Frost 11-15 $247.38
Travel and other direct expenses will be billed as incurred,
without mark-up.
?FS CFNTERMMM,37131,AORFMAERT V6