HomeMy WebLinkAbout02- Development Department I VELOPMENT DEPARTME
OF THE CITY OF SAN BERNARDINO
REQUEST FOR COMMISSION/COUNCIL ACTION
FROM: KENNETH J. HENDERSON SUBJECT: CALIFORNIA INN (SRO) -
Executive Director TERMINATION AGREEMENT
DATE: March 2, 1994
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Synopsis of Previous Commission/Council/Committee Action(s):
The Community Development Commission and Redevelopment Committee, on September 20 and October 7,
1993 considered the technical default status of the California Inn DDA. The Committee developed
recommendations for Community Development Commission consideration.
On October 21, 1993 the Community Development Commission authorized staff to retain a professional
consultant to prepare a Comprehensive Market Analysis on the proposed California Inn Single Room Occupancy
(SRO) project.
(SYNOPSIS CONTINUED TO NEXT PAGE...)
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Recommended Motion(s):
(Community Development Commission)
MOTION: That the Community Development Commission approve the attached Agreement terminating
the existing Disposition and Development Agreement between the Redevelopment Agency and
Main Street Inn, a California Limited Partnership (California Inn SRO).
-- 7 t AA*1
Ad mistrator KENNETH J. H t NDERSON
Executive Director
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Contact Person(s): Kenneth J. Henderson/David R. Edgar Phone: 5081
Project Area(s): Central City North (CCN) Ward(s): One (1)
Supporting Data Attached: Staff Report
FUNDING REQUIREMENTS: Amount: $180.000 Source: Twenty Percent Set-Aside
Budget Authority: Approved 2/21/94
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Commission/Council Notes:
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KJH:DRE:ABE:paw:cainnsro.cdc COMMISSION MEETING AGENDA
MEETING DATE: 03/07/1994
Agenda Item Number:
DEVELOPMENT DEPART ;NT REQUEST FOR COMMISSION/CC ICIL ACTION
CALIFORNIA INN (SRO)
PREPARED: MARCH 1, 1994
Page - 2 -
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Synopsis of Previous Commission/Council/Committee Action(s) Continued...
On February 21, 1994 the Community Development Commission approved an
Agreement in Principle for the Single Room Occupancy (SRO) project development
agreement between Larcon Development and the Redevelopment Agency.
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KJH:DRE:ABE:paw:cainnsro.cdc COMMISSION MEETING AGENDA
MEETING DATE: 03/07/1994
Agenda Item Number:
DE ` LOPMENT DEPARTN, NT
STAFF REPORT
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California Inn (SRO) - Termination Agreement
As a result of factors beyond the control of Larcon Development and the Redevelopment
Agency, The Housing Committee, Community Development Commission and staff of Larcon
Development Company and the Agency have considered on numerous occasions various
aspects of the California Inn Single Room Occupancy (SRO) project. The discussions
regarding this project culminated in the approval and adoption by the Community
Development Commission of an Agreement in Principle (Attachment "A") between the
Agency and Main Street Inn, a California Limited Partnership. It is acknowledged for the
record that Agency staff requested termination of the Disposition and Development
Agreement between the Agency and the Main Street Inn, a California Limited Partnership.
The developer eventually agreed to the termination based upon the deal points set forth in the
attached Agreement in Principle.
Based upon the Commission action of February 21, 1994 approving the Agreement in
Principle, Agency Counsel prepared a formal Termination Agreement (Attachment "B") which
was subsequently reviewed and executed by Larcon Development, the General Partner of the
above referenced partnership.
Base upon the foregoing, staff recommends adoption of the form motion.
yvl '
KENNETH J HENDERSON, Executive Director
Development Department
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KJH:DRE:ABE:paw:cainnsro.cdc COMMISSION MEETING AGENDA
MEETING DATE: 03/07/1994
Agenda Item Number:
RECORDING REQUESTED BY:
Redevelopment Agency
of the City of San Bernardino
WHEN RECORDED RETURN TO:
Sabo & Green, A Professional Corporation
6320 Canoga Avenue, Suite 400
Woodland Hills, California 91367
Recordation Fee Not Applicable
Pursuant to Government Code Section 6103
(Space Above For Recorder' s Use Only)
TERMINATION AGREEMENT
RE
CALIFORNIA INN SINGLE ROOM OCCUPANCY PROJECT
by and between
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
and
MAIN STREET INN,
a California limited partnership
ATTACHMENT "B"
TERMINATION AGREEMENT
RE
CALIFORNIA INN SINGLE ROOM OCCUPANCY PROJECT
THIS TERMINATION AGREEMENT (the "Agreement") is entered
into as of 77 , 1994, by and between the REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO (the "Agency") and MAIN STREET
INN, a California limited partnership (the "Developer") , and is
made with respect to the following recitals and terms:
R E C I T A L S
WHEREAS, the parties hereto previously entered into that
certain Disposition and Development Agreement, executed as of
January 15, 1992, and recorded in the offices of the County
Recorder of San Bernardino County as Document No. 92-043753 (the
"DDA") ; and
WHEREAS, the parties hereto subsequently entered into
that certain Amendment No. 1 to Disposition and Development
Agreement dated August 17, 1992 (the "Amendment") , and recorded in
the offices of the County Recorder of San Bernardino County as
Document No. 92-363489; and
WHEREAS, as a result of factors beyond the control of the
parties hereto, �:^FF'y� s :.,:.ngQ- b-911ght
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WHEREAS, the Agency and the Developer have mutually
agreed to terminate the contractual relationship set forth in the
DDA and the Amendment; and
WHEREAS, the Developer has diligently pursued development
and financing plans and the acquisition of a Conditional Use Permit
to be approved and issued by the City of San Bernardino; and
WHEREAS, the Developer has expended substantial moneys in
an effort to complete its development and financing plans, which
moneys are itemized in the Development Expense Schedule attached
hereto as Exhibit "A" and incorporated herein by reference; and
WHEREAS, the costs set forth in Exhibit "A" do not
include a salary for Developer's General Partner or the General
Partner' s office overhead expenses; and
-1-
WHEREAS, Section 2.03c of the Amendment provides for the
payment after the Close of Escrow of permissible costs as set forth
in Section 2 . 03b(vi) of the Amendment and the payment of a
developer fee to the Developer of $360,000, payable in monthly
installments.
NOW, THEREFORE, the parties hereto agree as set forth
hereinbelow.
T E R M S
1. Agency Termination of Rights and Obligations.
The Agency hereby waives all of its rights as against the
Developer as contained in the DDA and the Amendment, except for
such rights as may be set forth in this Agreement. The Agency
further waives any obligations which the Developer may have to the
Agency under the terms of the DDA and/or the Amendment.
2 . Developer Termination of Rights and Obligations.
The Developer hereby waives all of its rights as against
the Agency as contained in the DDA and the Amendment, except for
such rights as may be set forth in this Agreement. The Developer
further waives any obligations which the Agency may have to the
Developer under the terms of the DDA and/or the Amendment.
3 . Payment of Consideration.
As and for consideration for the execution of this
Agreement, and in recognition of the Developer's good faith
expenditure of funds, the Agency hereby agrees to pay the Developer
the sum of $180, 000, payable upon approval by the Community
Development Commission of the City of San Bernardino of the terms
of this Agreement and execution of this Agreement by the parties
hereto. The Developer hereby waives any claim for any further
compensation of any nature or amount, arising from the DDA, the
Amendment, the project contemplated by the DDA and the Amendment,
or this Agreement.
4 . Use of Agency Property.
The parties hereto acknowledge that the New Property (as
defined in the Amendment) which was contemplated to be used for the
proposed project and which is presently owned by the Agency, is
free of any claim, lien, easement, condition or covenant arising as
a result of the DDA and/or the Amendment or this Agreement between
the parties hereto. The Agency, after execution of this Agreement,
shall be free to utilize the New Property for such purposes as the
Agency may deem appropriate, and the Developer waives any claim
with regard to the use of the New Property, and further waives any
claim to title of the New Property.
-2-
i ; 1
5. Termination of Agency's Obligation for Contribution.
The parties hereto further specifically agree that the
Agency's obligation to make any contribution toward the Total
Project Cost of the single room occupancy facility is hereby
terminated.
6. Obligation to Execute Further Documents.
The parties hereto agree that they shall, in the event
reasonably requested to do so by the other party, execute any
document or documents necessary to effectuate the purposes of this
Agreement.
7. Release and Indemnification.
Each of the parties hereto releases the other party from
any claim of liability, based upon any provision of the DDA or the
Amendment, except with respect to remaining obligations contained
in this Agreement. Each of the parties hereto indemnifies the
other party hereto against any loss, liability or claim arising out
of the DDA or the Amendment. The Developer represents that there
are no outstanding obligations owed with respect to the proposed
project or the New Property, and that all such obligations have
been heretofore been paid or will be paid from the amounts due to
the Developer under Paragraph 3 above. Developer further
specifically represents that no lien has attached or will attach to
the New Property as a result of any of Developer's activities in
connection with the New Property. The Developer represents that it
will undertake to immediately pay or otherwise obtain the lease of
any claim for lien against the New Property. Each of the parties
hereto agrees that, with respect to any claim against which it has
provided indemnification hereunder, it will hold the other party
harmless from any cost, liability or damage, including attorneys '
fees arising with respect to such claim. Each of the parties
hereto acknowledges that it is familiar with the provisions of
Civil Code Section 1542 which provides as follows:
A general release does not extend to claims
which the creditor does not know or suspect to
exist in his favor at the time of executing
the release, which if known by him must have
materially affected his settlement with the
debtor.
Each of the parties hereto waives the provisions of
Section 1542, intending that this Agreement shall resolve all
issues, liabilities and claims as between the parties, with the
exception of those claims arising out of the interpretation and
enforcement of this Agreement.
-3-
8. Default and Attorneys' Fees.
In the event that either of the parties to this Agreement
shall breach any provision hereof, the non-defaulting party may
serve notice of such breach upon the defaulting party, which notice
shall specify the nature of the breach and any action required to
cure the breach, if any. Said breach shall be cured within ten
(10) days of service of the appropriate notice upon the defaulting
party, or if cure of said breach requires longer than ten (10)
days, the cure shall be implemented by the defaulting party within
said ten (10) day period and diligently pursued to completion. In
the event that the defaulting party does not cure the breach as
required under the provisions of this paragraph, the non-defaulting
party may declare a default in this Agreement without further
notice and proceed to pursue any and all legal remedies available
to it, including, without limitation, an action for specific
performance. In the event of a legal action between the parties
hereto, the prevailing party shall be entitled to an award of
attorneys' fees and costs as actually incurred by said party.
9. Notices.
Any notice provided under the terms of this Agreement
shall be personally served or deposited, first class certified mail
with return receipt requested, and addressed to the other party at
the address set forth hereinbelow:
If to Agency: Redevelopment Agency of the City of
San Bernardino
201 North "E" Street, Third Floor
San Bernardino, CA 92401
Attn: Executive Director
If to Main Street Inn: Larcon Development, Inc.
330 North "D" Street, Suite 110
San Bernardino, CA 92401
Attn: B. Gilbert Lara, Jr.
Either party may provide for a different address for notices
hereunder by serving a written notice of said address upon the
other party.
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l
Executed on the date first above written by the parties
whose signatures are set forth hereafter.
"AGENCY"
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
By
Chairman
APPROVED:
Agency Secretary
APPROVED AS TO FORM AND LEGAL CONTENT:
By:
Special C n e to the Agency
"DEVELOPER"
MAIN STREET INN,
a California limited partnership
By: Larcon Development, Inc.
General Partner
By: �.
B. Gilbert Lara, Jr.
President
SBEO/0001/DOCn38
2123194 1130 by
-5-
STATE OF C ,IF RNI )
COUNTY OF i )
On a before me f
he a inse t na and title of the ficer) , ersona y app ared
��. , personally known to me_ (or proved to
me on the basis of satisfactory evidence) to be the person sa'f whose
name ) is/-&re subscribed to the within instrument and acknowledged
to me that he/zheft4iey executed the same in his/lieerl heir
authorized capacity(+es) , and that by his fh tr signature(A on
the instrument the person) , or the entity upon behalf of which
the person acted, executed the instrument.
WITNESS my hand and fficial se
Signa ure ea-,VANDA#974738
a 11ddOOMM.�974738
Notcry Public—Califomia
SAN BERNARDNO COUNN
61my Comm.Expires OCT 4.1996
STATE OF CALIFORNIA )
COUNTY OF )
On before me,
(here insert name and title of the officer) , personally appeared
, personally known to me (or proved to
me on the basis of satisfactory evidence) to be the persons) whose
name(s) is/are subscribed to the within instrument and acknowledged
to me that he/she/they executed the same in his/her/their
authorized capacity(ies) , and that by his/her/their signatures) on
the instrument the person(s) , or the entity upon behalf of which
the person(s) acted, executed the instrument.
WITNESS my hand and official seal.
Signature (Seal)
'FEB-23-94 WED 10:52 ECON DEVEL AGENCY FAX N0, 7148889413 P. 04
CALIFORNIA INN SRO
DEVELOPMENT EXPENSE
MARCH 1, 1991 TO FEBRUARY 15, 1994
i
DESCRIPTION EXPENDITURE
SALARY: D. Macken (3-91 to 4-93) 100.0% $49,052.00
S. Johnston (3--91 to 2-94) 40.0% 46,925.00 $95,977.00
i
FEES; City, applications, consultants, legal etc,
6,702.00
I
ACCOUNTING: Includes CPA fees for finan cial services 91313.00 ,
I
MARKETING: Includes reproduction for marketing packages 4,962,00
ARCHITECTURE: Includes all schematic and partial development design 63,052.00
architectural contract services for Main Street Inn SRO and
California Inn SRO
ADMINISTRATIVE: SRO travel for design and financing $751.00
Reports, supplies, postage, miscellaneous 787.00 1,538.00
l
FINANCE: Interest on SRO loan of$150,000.00 36.352.00 +
(10-7-91 to 2-14-94)
TOTAL SRO DEVELOPMENT COSTS $217,896.00
I
I
Note: Office overhead (phone, mail, supplies, rent etc.) and Mr. Lara's
salary not included.
Prepared 2-15--94
LARCON DEVELOPMENT INC.
AGREEMENT IN PRINCIPLE
CALIFORNIA INN SINGLE ROOM OCCUPANCY (SRO) PROJECT
February 18, 1994
This Agreement in Principle proposes to establish the framework for the dissolution,
termination or relinquishment of rights and forgiveness of obligations, which ever is
applicable, of the Disposition and Development Agreement (the "Agreement") between the
Redevelopment Agency ("Agency") and Main Street Inn, a California Limited Partnership,
("developer") based upon the following recitals:
WHEREAS, the Agency desires, and the developer has agreed, to mutually and
amicably terminate the contractual relationship providing for the development of a two-
hundred, sixty-five (265) unit SRO housing development; and
WHEREAS, Agency agrees, and acknowledges, developer was requested by the then
Mayor and Common Council of the City of San Bernardino to develop, with Agency
assistance, and operate a 265 unit SRO housing project to be located at the northwest corner
of 5th and "E" Streets in San Bernardino, CA; and
WHEREAS, the developer has diligently pursued development and financing plans and
the acquisition of a Conditional Use Permit (CUP) which would be approved and issued by
the City of San Bernardino; and
WHEREAS, the developer has expended substantial monies in an effort to complete its
development and financing plans as more accurately summarized in the attached Exhibit "A";
and
WHEREAS, the costs incurred by developer do not include salary for developer's
General Partner or the General Partner's office overhead expenses.
WHEREAS, the Agreement between Agency and Developer provides for the payment,
after the Close of Escrow of permissible costs as set forth in Section 2.03b(vi) of the
Disposition and Development Agreement and the payment of developer fees on a monthly
basis totalling $360,000.
NOW THEREFORE, the parties hereto agree as follows:
1. That the Agreement between Agency and developer be dissolved, terminated
and/or provide for the relinquishment or rights and forgiveness of obligations,
as applicable, with the understanding that no damage or harm will be done to
the reputation of developer or Agency.
ATTACHMENT "A"
r
2. That full and complete consideration to be paid by Agency to developer has
been established at $180,000, payable upon approval by the Community
Development Commission of the City of San Bernardino and execution of the
necessary and appropriate implementing agreement(s).
KE J. NDERSON, Executive Director MAIN STREET INN
Development Department a California Limited Partnership
Economic Development Agency By: LARCON DEVELOPMENT, INC.
General Partner
B. Gilbert Lara, Jr.
President
KJH:Unp:agmtpri.sro
CALIFORNIA INN SRO
DEVELOPMENT EXPENSE
MARCH 1, 1991 TO FEBRUARY 15, 1994
DESCRIPTION EXPENDITURE
SALARY: D. Macken (3-91 to 4-93) 100.0% $49,052.00
S. Johnston (3-91 to 2-94) 40.0% 46,925.00 $95,977.00
FEES: City, applications, consultants, legal etc. 6,702.00 �
f
I
ACCOUNTING: Includes CPA fees for financial services 9,313.00
i
MARKETING: Includes reproduction for marketing packages 4,962.00
ARCHITECTURE: Includes all schematic and partial development design 63,052.00
architectural contract services for Main Street Inn SRO and
California Inn SRO
I
i
ADMINISTRATIVE: SRO travel for design and financing $751.00
Reports, supplies, postage, miscellaneous 787.00 1,538.00
i
FINANCE: Interest on SRO loan of$150,000.00 36,352.00
(10-7-91 to 2-14-94) f
TOTAL SRO DEVELOPMENT COSTS $217,896.00
t
Note: Office overhead (phone, mail, supplies, rent etc.) and Mr. Lara's
salary not included.
i
i
(! J
I
Prepared 2-15-94
I
LARCON DEVELOPMENT INC.
EXHIBIT "A" (�,��