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HomeMy WebLinkAbout18- Economic & Housing Development 18.a atigtNARpI� _ Staff Report 3 a c r x y City of San Bernardino E Request for Council Action cn IN's a h d V Date: October 4, 2017 d Cn To: Honorable Mayor and City Council Members d E From: Andrea M. Miller, City Manager'(1ckV,,q o By: Kathy Brann, Housing Manager ; Steven H. Dukett, Consultant o d L Subject: First Amended and Restated Theater Square Development Cr Services Agreement with AECOM Technical Services, Inc., and U) the Fransen Company, Inc. Recommendation ~ a Adopt a Resolution of the Mayor and City Council of the City of San Bernardino, California, approving the First Amended and Restated Theater Square Development Services y Agreement with AECOM Technical Services, Inc. and The Fransen Company, Inc., and approving certain related actions. Background Pursuant to Health and Safety Code (the "HSC") § 34172 (a) (1), the Redevelopment d Agency of the City of San Bernardino was dissolved on February 1, 2012. Consistent with a the provisions of the HSC, on January 9, 2012 the Mayor and City Council of the City of San Bernardino elected to serve in the capacity of the Successor Agency to the Redevelopment ii Agency of the City of San Bernardino (the "Successor Agency"). The Oversight Board for the Successor Agency ("Oversight Board") has been established pursuant to HSC § 34179co to assist in the wind-down of the dissolved redevelopment agency. On September 15, 2015, the Successor Agency submitted its Oversight Board-approved a Long-Range Property Management Plan (the "LRPMP") to the California Department of Finance (the "DOF"). On December 31, 2015, the DOF approved the Successor Agency's d LRPMP and notified the Successor Agency that pursuant to HSC § 34191.3, the approved w LRPMP shall govern, and supersede all other provisions relating to the disposition and use W of all the real property assets of the former redevelopment agency. The approved LRPMP, w which addresses the disposition and use of the real property assets held by the Successor = Agency, includes 230 parcels of land grouped into forty-six (46) separate sites, eighteen (18) of which were designated as government use sites, seven (7) of which are designated 0 U as future development sites and twenty-one (21) of which were designated to be sold. w a r E V a Packet Pg. 558 18.a Per the direction of DOF, on August 1, 2016, the Mayor and City Council adopted Resolution No. 2016-165, which authorized the transfer from the Successor Agency and the 3 r acceptance by the City of the seven (7) sites identified with the LRPMP as future d development sites subject to the City's compliance with the applicable provisions of the E HSC governing the later transfer of real property to third-party entities, instead of the Successor Agency, just as though said real property had never been transferred to the City Q by the Successor Agency in the first place. Consistent with the foregoing, the Successor 4) Agency transferred the future development sites to the City via quitclaim deed on August Z 16, 2016 and the City is now responsible for compliance with the applicable provisions of in the HSC governing the later transfer of the future development sites to third-parties. d E Based on the above, the City is the owner of that certain real property consisting of c approximately 5.5 acres of land located at 450 North "E" Street, which includes the Regal Cinemas building, adjacent parking and undeveloped land (APNs 0134-121-25, 27, 28, 29, 35, c 36 and 37) (the "Property"). Within the LRPMP the Property: i) is identified as a non- 0. contiguous portion of Site No. 21 (i.e., also known as the Theater Square site); ii) is described as a public facility/commercial site; iii) is designated for future development; and iv) does not include those portions of LRPMP Site No. 21 related to the California and Sturges Theatres. r d s Discussion On November 2, 2015, Mayor and City Council approved an Exclusive Negotiation d Agreement (the "ENA") with AECOM Technical Services, Inc. and the Fransen Company, y Inc. (the "AECOM/Fransen") with respect to the development and use of the Carousel Mall 4) and Theater Square sites and amended the ENA on August 15, 2016. Consistent with the ENA, on August 15, 2016, the Mayor and City Council also approved a Theater Square Development Services Agreement (the "DSA") with AECOM/Fransen, which superseded the ENA with respect to the procedure for the sale and development of the Property. E Pursuant to the DSA, AECOM/Fransen has prepared the original and the amended Theater N Square Strategic Plan, both of which have been approved by the Mayor and City Council. U. Consistent with and for the purposes of implementing the amended Theater Square Strategic Plan, it is necessary to engage the services of a qualified real estate broker to 0 assist AECOM/Fransen and the City with respect to the disposition of the Property for its LO market value. To ensure consistency between the DSA and amended Theater Square Strategic Plan and to provide clarity between the parties concerning their respective duties a and the payment of fees/commissions to AECOM/Fransen and the selected real estate W broker with respect the disposition of the Property and to clarify certain related matters, it is a necessary to amend and restate the DSA. Adoption of the attached resolution will approve the First Amended and Restated Theater Square Development Services Agreement, a copy which is included as Exhibit "A" to the attached resolution. a LU x The attached resolution has been reviewed with respect to applicability of the California ~ Environmental Quality Act (the "CEQA"), the State CEQA Guidelines (California Code of o Regulations, Title 14, § 15000 et seq., hereafter the "CEQA Guidelines"), and the City's W environmental guidelines. The attached resolution does not constitute a "project" for a purposes of CEQA, as that term is defined by CEQA Guidelines § 15378, because the resolution is an organizational or administrative activity that will not result in a direct or EE. indirect physical change in the environment, per§ 15378 (b) (5) of the CEQA Guidelines. F Packet Pg. 559 Fiscal Impact 3 With respect to fiscal impact, the First Amended and Restated Theater Square Development Services Agreement modifies the definition of "Finder's Fee". In the original E DSA, the Finder's Fee is defined as four-percent (4%) of "net" disposition proceeds for the Regal Cinemas property. The Finder's Fee is intended to compensate AECOM/Fransen a and any real estate broker that may assist in the sale of the Regal Cinemas site for their efforts to help consummate the sale. As noted above, consistent with and for the purposes of implementing the amended Theater Square Strategic Plan, it is necessary to engage the services of a qualified real estate broker to assist AECOM/Fransen and the City with respect to the disposition of the Property at its market value. As a companion item on the October 4, 2017 agenda, the Mayor and City Council will consider a real estate listing o agreement with Lee and Associates related to the sale of the Property. Pursuant to the proposed listing agreement, the fee/commission to Lee and Associates for the sale of any o component piece of the Property will be three-percent (3%) of the gross disposition ` proceeds. ; Therefore, to ensure the capability of fully compensating Lee and Associates and r AECOM/Fransen for their respective duties related to the sale of the Regal Cinemas property, it is proposed that the definition of Finder's Fee be changed from four-percent (4%) of "net" proceeds to four-percent of "gross" proceeds. Without this change and depending on the actual sales price of the Regal Cinemas property, the fee/commission due t° AECOM/Fransen could be significantly reduced. As an example, if the Regal Cinemas property sold for $10 million gross, then the fee due Lee and Associates would equal $300,000. It is estimated that approximately $100,000 in other costs could be deducted from the gross purchase price leaving a net sales price of$9.6 million. Under this example, four-percent (4%) of the net sales price would be $384,000. After deducting the $300,000 C fee/commission payable to Lee and Associates, the remaining $84,000 would be payable to E AECOM/Fransen. However, if the Finder's Fee is based on "gross" rather than on "net", a then the above example calculation would result in a $100,000 payment to L AECOM/Fransen. Under all circumstances, any payments to AECOM/Fransen and Lee and Associates are payable solely from land sales proceeds. Cl) Conclusion Based on the foregoing, staff recommends that the Mayor and City Council of the City of 0 San Bernardino, adopt the attached resolution approving the First Amended and Restated W Theater Square Development Services Agreement with AECOM Technical Services, Inc. CC and The Fransen Company, Inc., and approving certain related actions. Cn W o: Attachments a Attachment 1- Resolution; Exhibit A- First Amended and Restated Theater Square = IDevelopment Services Agreement. ~ 0 U W Q C d E t v R Q Packet Pg. 560 18.a Wards: 1 sc d Synopsis of Previous Council Actions: a N Effective Dates: v November 2, 2015: Mayor and City Council approved an ENA for Theater Square and the Carousel Mall sites with AECOM/Fransen. E August 15, 2016: Mayor and City Council approved an Amended ENA for Theater o Square and the Carousel Mall sites with AECOM/Fransen. d o August 15, 2016: Mayor and City Council approved the DSA for Theater Square with AECOM/Fransen L ice+ d d r d C E Q L LL M 00 r Ln O a LU car w Q w x O U LU Q r C d E L Packet Pg. 561 l 18.b 1 RESOLUTION NO.2017- 2 3 2 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN 3 BERNARDINO, CALIFORNIA, APPROVING THE FIRST AMENDED AND RESTATED d THEATER SQUARE DEVELOPMENT SERVICES AGREEMENT WITH AECOM 4 TECHNICAL SERVICES, INC. AND THE FRANSEN COMPANY, INC., AND a APPROVING CERTAIN RELATED ACTIONS d 5 6 WHEREAS, pursuant to Health and Safety Code (the "HSC") § 34172 (a) (1), the 7 Redevelopment Agency of the City of San Bernardino was dissolved on February 1,2012; and c 8 WHEREAS, consistent with the provisions of the HSC, on January 9, 2012 the Mayor c 9 and City Council of the City of San Bernardino elected to serve in the capacity of the Successor 10 � Agency to the Redevelopment Agency of the City of San Bernardino (the "Successor Agency"); N d 11 and d 12 WHEREAS, the Oversight Board for the Successor Agency ("Oversight Board") has d M 13 been established pursuant to HSC § 34179 to assist in the wind-down of the dissolved 14 redevelopment agency; and 15 WHEREAS, on September 15, 2015, the Successor Agency submitted its Oversight 16 Board-approved Long-Range Property Management Plan (the "LRPMP") to the California Q r 17 Department of Finance(the"DOF"); and L- U_ 18 WHEREAS, on December 31, 2015, the DOF approved the Successor Agency's o 19 LRPMP and notified the Successor Agency that pursuant to HSC § 34191.3, the approved 20 LRPMP shall govern, and supersede all other provisions relating to the disposition and use of all a W 21 the real property assets of the former redevelopment agency; and c� 22 WHEREAS, the approved LRPMP, which addresses the disposition and use of the real w o: 23 property assets held by the Successor Agency, includes 230 parcels of land grouped into forty- a w 24 six (46) separate sites, eighteen (18) of which were designated as government use sites, seven 25 (7) of which are designated as future development sites and twenty-one (21) of which were 0 W 26 designated to be sold; and a c 27 WHEREAS, per the direction of DOF, on August 1, 2016, the Mayor and City Council t (W 28 adopted Resolution No. 2016-165, which authorized the transfer from the Successor Agency and Q 1 Packet Pg. 562 18.b 1 the acceptance by the City of the seven (7) sites identified with the LRPMP as future 2 development sites subject to the City's compliance with the applicable provisions of the HSC d E 3 governing the later transfer of real property to third-party entities, instead of the Successor a� 4 Agency,just as though said real property had never been transferred to the City by the Successor 5 Agency in the first place; and 6 WHEREAS, consistent with the foregoing, the Successor Agency transferred the future as 7 development sites to the City via quitclaim deed on August 16, 2016 and the City is now c a� 8 responsible for compliance with the applicable provisions of the HSC governing the later c 9 transfer of the future development sites to third-parties; and 10 WHEREAS, consistent with the foregoing, the City is the owner of that certain real N d r 11 property consisting of approximately 5.5 acres of land located at 450 North "E" Street, which 12 includes the Regal Cinemas building, adjacent parking and undeveloped land (APNs 0134-121-25, r r 13 27,28,29,35,36 and 37)(the"Property");and 14 WHEREAS, within the LRPMP the Property: i)is identified as a non-contiguous portion ° 15 of Site No. 21 (i.e., also known as the Theater Square site); ii) is described as a public c d 16 facility/commercial site; iii) is designated for future development; and iv) does not include those E r 17 portions of LRPMP Site No.21 related to the California and Sturges Theatres; and U. 18 WHEREAS, on November 2, 2015, Mayor and City Council approved an ExclusiveCO 19 Negotiation Agreement (the "ENA") with AECOM Technical Services, Inc. and the Fransen r 20 Company, Inc. (the "AECOM/Fransen") with respect to the development and use of the a w 21 Carousel Mall and Theater Square sites and amended the ENA on August 15,2016; and v 22 WHEREAS, consistent with the ENA, on August 15, 2016, the Mayor and City N w 23 Council also approved a Theater Square Development Services Agreement (the "DSA") with Q w 24 AECOM/Fransen, which superseded the ENA with respect to the procedure for the sale and 25 development of the Property; and w 26 WHEREAS, pursuant to the DSA, AECOM/Fransen has prepared the original and the d 27 amended Theater Square Strategic Plan, both of which have been approved by the Mayor and E 28 City Council;and 2 Packet Pg. 563 18.b 1 WHEREAS, consistent with and for the purposes of implementing the amended w 3 2 Theater Square Strategic Plan, it is necessary to engage the services of a qualified real estate = E 3 broker to assist AECOM/Fransen and the City with respect to the disposition of the Property at 4 its market value; and a N V 5 WHEREAS, to ensure consistency between the DSA and amended Theater Square Z 6 Strategic Plan and to provide clarity between the parties concerning their respective duties and Un d 7 the payment of fees/commissions to AECOM/Fransen and the selected real estate broker with a 0 d 8 respect to the disposition of the Property and to clarify certain related matters, it is necessary to >� 0 9 amend and restate the DSA; and 10 WHEREAS, approval of this resolution will approve the First Amended and Restated d 11 Theater Square Development Services Agreement, a copy which is attached hereto as Exhibit L 12 "A"; and a 13 WHEREAS, this Resolution has been reviewed with respect to applicability of the 14 California Environmental Quality Act (the "CEQA"), the State CEQA Guidelines (California Code c d 15 of Regulations, Title 14, § 15000 et seq., hereafter the "CEQA Guidelines"), and the City's a c 16 environmental guidelines; and E a 17 WHEREAS, this Resolution does not constitute a"project" for purposes of CEQA, as that A- LL 18 term is defined by CEQA Guidelines § 15378, because this Resolution constitutes general policy M 19 and procedure making and organizational or administrative activity that will not result in a direct or 20 indirect physical change in the environment, per § 15378 (b) (2) and (5) of the CEQA Guidelines; a W Ix 21 and a 22 WHEREAS, all of the prerequisites with respect to the approval of this Resolution have y LU 23 been met. Q w x 24 � NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL 25 0 OF THE CITY OF SAN BERNARDINO,AS FOLLOWS: Q 26 Section 1. The foregoing recitals are true and correct and are a substantive part of this 27 E Resolution. 28 a 3 Packet Pg. 564 18b 1 Section 2. The First Amended and Restated Theater Square Development Services 2 c Agreement,attached hereto as Exhibit"A,"is hereby approved. E 3 d Section 3. The City Manager, or designee,is authorized and directed to execute the First Q 4 Amended and Restated Theater Square Development Services Agreement and to take such other 5 it actions and execute such other documents as are necessary to fulfill the intent of this Resolution. n 6 Section 4. This Resolution is not a "project" for purposes of CEQA, as that term is 7 c defined by Guidelines § 15378, because this Resolution is an organizational or administrative 8 activity that will not result in a direct or indirect physical change in the environment, per § 15378 0 d 9 (b) (5)of the Guidelines. a 10 N Section 5. This resolution shall take effect upon its adoption and execution in the 11 d manner as required by the City's Municipal Code. 12 c 13 14 c 15 E 16 N 17 U- 18 CO "' 19 20 a 21 a CY U) 22 23 a 24 o 5 v w 26a 27 E 28 4 Packet Pg. 565 18.b 1 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN Y BERNARDINO, CALIFORNIA, APPROVING THE FIRST AMENDED AND RESTATED 3 2 THEATER SQUARE DEVELOPMENT SERVICES AGREEMENT WITH AECOM TECHNICAL SERVICES, INC. AND THE FRANSEN COMPANY, INC., AND E 3 APPROVING CERTAIN RELATED ACTIONS rn 4 a I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and 5 City Council of the City of San Bernardino at a regular meeting thereof, held on the day of 6 October, 2017,by the following vote,to wit: c 7 Council Members Ayes Nays Abstain Absent c 8 MARQUEZ > 0 9 BARRIOS 0 10 VALDIVIA Cn-- SHORETT °' 11 NICKEL 12 a RICHARD v 13 MULVIHILL 14 -a 15 16 Georgeann Hanna, CMC, City Clerk a 17 The foregoing Resolution is hereby approved this day of October 2017. U. 18 00 19 R. Carey Davis, Mayor 20 City of San Bemardino Q w 21 Approved as to Form: a Gary D. Saenz,City Attorney CY 22 Cn LU o: 23 By: --- w 24 25 L) W 26 a c _ 27 E I 28 a 5 Packet Pg. 566 0 This Page Is left Intentionally Blank 18.b �3 c 15 d E d d a� a VJ d V d N d -� a 0 0 > d o d a CO m EXHIBIT "A" as t d First Amended and Restated N Theater Square Development Services Agreement with AECOM Technical Services,Inc. .� and d The Fransen Company, Inc. a (see attachment) L U- 00 LO a w a U) LU Ix Q w L� Cr C 5 0 U w Q c E t 3 a Packet Pg. 567 S Y a� E rn a N d V d Y _ E Q O FIRST AMENDED AND RESTATED o a� THEATER SQUARE DEVELOPMENT SERVICES AGREEMENT L among :: a� AECOM TECHNICAL SERVICES,INC. and Y THE FRANSEN COMPANY,INC. r a� and THE CITY OF SAN BERNARDINO _ a� E a Y u- M 00 LT `r r a NW a v Lu e: a Lu x O U W a Y _ E 7 a DOCSOC/1840677v34/200430-0013 Packet Pg. 568 18.b s FIRST AMENDED AND RESTATED 3 r c THEATER SQUARE DEVELOPMENT SERVICES AGREEMENT d d This FIRST AMENDED AND RESTATED THEATER SQUARE DEVELOPMENT Q SERVICES AGREEMENT (this "Agreement") is dated as of the Effective Date, and is entered into between THE CITY OF SAN BERNARDINO, a California charter city (the "City"), on the one hand, and AECOM TECHNICAL SERVICES, INC., a California corporation("AECOM") (an affiliate of AECOM, a Delaware corporation formerly known as AECOM Technology N Corporation and/or AECOM Technologies), and THE FRANSEN COMPANY, INC., a California corporation ("Fransen," and together with AECOM, "AECOMIFransen"), on the a other hand. The City and AECOM/Fransen are sometimes referred herein collectively as the "Parties",and each individually as a"Party." d 0 d RECITALS a A. The Parties entered into a Theater Square Development Services Agreement dated d August 15, 2016 ("Original Agreement") with respect to the subject matter hereof and now wish to amend and restate,in its entirety,the Original Agreement. B. The City owns certain real property, comprising approximately 5.5 acres located r on the northwest comer of 4b Street and E Street known as"Theater Square" as depicted on the d "Map of Theater Square" (herein so called) attached hereto as Exhibit"A". A portion of Theater Square has been leased to Regal Cinemas, Inc. and is improved with a motion picture Theater (such portion and improvements, collectively, the "Regal Cinemas") operated by Regal Cinemas, Inc. Theater Square also contains the "Development Properties", comprising the c "Former Theater Space" (located in the same building as the Regal Cinemas) and the "Pad E Sites,"as such terms are defined below and shown on the Map of Theater Square. N C. AECOM/Fransen shall: (i) prepare a "Strategic Plan" (as defined below), `` detailing the proposed development of Theater Square; (ii) assist the City in the disposition of o Regal Cinemas; and (iii) assist the City in the disposition to and development of the Development Properties by unaffiliated parties (collectively, the "Project") in accordance with the "Schedule of Performance"(as defined below). a W D. Subject to the approval by the City of the Strategic Plan and subject to the a obtaining of such approvals as may be needed hereafter from the Mayor and City Council and/or the Planning Commission of the City in connection with land use entitlements, the City intends w to cooperate in pursuing arrangements for the disposition of(i) the Regal Cinemas and (ii) the Development Properties, all in a manner consistent with the approved Strategic Plan and in w accordance with all applicable laws. X AGREEMENT o U W 1. Definitions. a r c m "AECOM/Fransen Internal Costs" is defined in Section 2.2(b). E a Packet Pg. 569 "Amended Draft Strategic Plan"is defined in Section 3. c "Comprehensive Business Plan" means a plan which delineates in detail the proposed plan for disposition and development of Theater Square, and which includes the following: d detailed estimated Project Costs, revenues, responsibilities, capital requirements, and capital a sources. "Development Fee" means an amount equal to 33% of the Net Disposition Proceeds of the sale, lease or other disposition of the Development Properties. The Development Fee is U) payable on behalf of the City solely from escrow from the proceeds of sale of the Development E Properties,if and when escrow is closed(or escrows are closed). a 0 0 "Development Properties" means those properties composed of the Former Theater >) Space and Pad Sites,as shown on the Map of Theater Square. "Draft Strategic Plan" means a draft of the Strategic Plan as more particularly described N in Section 2 hereof. r 0 "Effective Date" the Effective Date of this First Amended and Restated Theater Square Development Services Agreement shall be the date that it is approved by the Mayor and City Council of the City. c H d "Finder's Fee" means an amount equal to four percent (4%) of Gross Disposition Proceeds with respect to the sale of the Regal Cinemas. The Finder's Fee is payable on behalf of the City solely from escrow from the proceeds of sale of the Regal Cinemas property, if and when escrow is closed. The distribution of the Finder's Fee is paid in "Priority Order", as follows: i) the Finder's Fee is the sole source of payment of the commission payable to a Third E Party Broker, if any; and ii)to the extent there are Finder's Fee funds remaining after payment of a the commission payable to a Third Party Broker, if any, then the remaining amount of the Finder's Fee is the sole source of payment of the Finder's Fee to AECOM/Fransen M co "Former Theater Space" is that area located within the building containing the Regal Cinemas as shown on the Map of Theater Square. "Gross Disposition Proceeds" means all consideration payable with respect to the sale w of the Regal Cinemas and/or sale, lease or other disposition of any of the Development a Properties. For purposes of the sale of the Regal Cinema only, Gross Disposition Proceeds shall not include any portion of the sales price that includes an element that will be paid to Regal W W Cinemas, Inc. a "Initial Submittal Date" is on or before sixty (60) days from the effective date of the = Original Agreement (this requirement has already been satisfied). ~ 2 0 "Map of Theater Square"is defined in Recital A and attached hereto as Exhibit A. W Q Net Disposition Proceeds" means Gross Disposition Proceeds from the sale of the Regal Cinemas and/or sale, lease or other disposition of all or any portion of Development E Properties less applicable Normal and Customary Costs of Disposition for such transaction. a 2 Packet Pg. 570 � "Normal and Customary Cost(s) of Disposition" means such costs that are incurred in 3 connection with the disposition of any portion of the Development Properties, including without limitation, transaction-related legal costs and other consulting costs, tenant improvement d E allowance and landlord-required tenant improvement work, title and other closing costs, and survey costs. Fees paid to Third Party Brokers in connection with the applicable Development Property will be included in the Normal and Customary Costs of Disposition of the applicable Development Property. Normal and Customary Costs of Disposition will also include costs incurred by the City, through third-party entities for tenant design criteria, architecture, d engineering, and management of sale of real property assets, but only as related to the sale of the Cinema and Development Properties. Any such costs shall be approved in the reasonable discretion of the City. c a� "Ongoing Development Requirements" means the substantial completion and opening c of full service or fast casual dining restaurants occupying at least 2,500 square feet within the ` Former Theater Space, as described in Section 1.03(i)of the Regal Cinema Lease. U) "Pad Sites" mean up to approximately 21,000 square feet of vacant land on which new retail space is to be developed, as depicted on the Map of Theater Square, attached hereto as Exhibit"A". "Project"is defined in Recital B. N "Regal Cinemas"is defined in Recital A. "Regal Cinemas Lease" means that certain lease between the San Bernardino Economic � Development Corporation and Regal Cinemas, Inc., dated as of January 4, 2012; a copy of the Regal Cinemas Lease is on file with the City as a public record. E a r "Report(s)"is defined in Section 5.1. U_ "Schedule of Performance" means the schedule to be included in the Strategic Plan setting forth the timing and deadlines for the implementation of the Strategic Plan. "Strategic Plan" or "Approved Strategic Plan" means that certain Theater Square Strategic Plan, as amended on August 16, 2017, with respect to the disposition, development and w use of Theater Square, including the disposition of Regal Cinemas, the disposition, development a and use of the Development Properties, and such other contents as are required for the Strategic Plan under Section 2 hereof. N w W "Strategic Plan Approval Deadline" means the date which is ninety (90) days after the Q initial submission of the Draft Strategic Plan by AECOM/Fransen. _ "Theater Square" is defined in Recital A. p U W "Third Party Brokers" means licensed real estate brokers, agents or finders unrelated to a any Party hereto engaged by the City, approved by AECOM/Fransen, acting in its reasonable discretion, in connection with the sale of the Regal Cinemas and/or Development Properties. In E U Q 3 Packet Pg. 571 this regard,AECOM/Fransen has approved Lee&Associates as a Third Party Broker for the sale of the Regal Cinema and the Development Properties. d E 2. Strategic Plan. as 2.1 Preparation and Submittal of Draft Strategic Plan. AECOM/Fransen shall y prepare, at its cost and expense, and submit to the City by the Initial Submittal Date a Strategic Plan setting forth in detail: (i) a site plan, including conceptual design guidelines, (ii) the proposed land use designations for Theater Square; (iii) proposed types of users by category, which may include examples of specific users; (iv) parking; (v) ingress and egress; (vi) a proposal for the management of Theater Square; (vii) a proposal for the methodology to market E and sell the Regal Cinemas; (viii) a proposal for the leasing by the City to end users for the d operation of full service or fast casual dining restaurants of not less than 2,500 square feet within c the Former Theater Space in satisfaction of the Ongoing Development Requirements; (ix) a proposal for the sale and/or leasing of the balance of the Former Theater Space and the Pad Sites; (x) a Comprehensive Business Plan for the development of Theater Square; (xi)provisions under which AECOM/Fransen defends, indemnifies, and holds harmless the City and its , representatives,officials, officers, employees, agents, and volunteers from claims, losses, suits or damages arising from inaccurate or misleading statements or materials delivered by AECOM/Fransen to third parties in connection with the disposition and/or development of d Theater Square; (xii) provisions under which AECOM/Fransen obtains or causes the H procurement of insurance for the benefit of the City and its representatives, officials, officers, employees, agents, and volunteers (naming the City and its representatives, officials, officers, — employees, agents, and volunteers as additional insureds) with respect to claims, losses, suits or damages arising from acts or omissions of private parties in connection with the disposition and/or development of Theater Square; (xiii) a proposed term sheet describing covenants, conditions, restrictions and reciprocal easements for Theater Square (which shall incorporate as E applicable the requirements in the Regal Cinemas Lease); (xiv) acknowledgment by ground lessees and purchasers of property that any acquisition of property within Theater Square shall be U. on a "where is, as is" basis with no representations or warranties as to condition, fitness, co suitability or otherwise by the City; (xv) a plan for signage within Theater Square; (xvi) r. identification of other necessary studies; (xvii) analysis of existing entitlement conditions and r any changes thereto necessary to accommodate the Comprehensive Business Plan; (xviii) a plan for demolition of those structures within Theater Square, if any,that are not proposed to be used, a sold or leased under the Draft Strategic Plan; (xix) identification of target restaurants and retail a users (pricing or lease rates for the Development Properties, including all components thereof, CY which may be expressed as fixed numbers or under a formula provided that the formula is (n specific, verifiable, fair and reasonable); (xx) summary of anticipated third party expenses, W including engineering, planning, architectural, construction services, and development a management necessary for implementation of the Comprehensive Business Plan and the = proposed source of payment thereof by the City; (xxi)preparation of a detailed project pro forma showing anticipated costs and disposition revenues; (xxii) a plan and proposal for procuring p necessary physical site assessments; (xxiii) a plan for retaining existing surface parking or w augmenting as necessary; (xxiv) the proposed financial relationship, if any, between Theater a r Square and the Carousel Mall; and(xxv)a proposed Schedule of Performance. d E 2.2 Role of AECOM/Fransen in Implementation of the Strategic Plan. 0 a 4 Packet Pg. 572 (a) Subject to approval by the City Manager, or her designee, 3 AECOM/Fransen shall manage and coordinate the activities associated with the sale of Regal Cinemas and the sale and/or lease of the Development Properties by the City in accordance with the Strategic Plan. AECOM/Fransen will administer and assist the City with the negotiation of d the terms of purchase agreements and/or leases under the direction of the City Manager or her Q designee. In consideration of the disposition of the Regal Cinemas in accordance with this d subsection 2.2(a) and upon closing of escrow for the disposition of the Regal Cinemas the City will authorize escrow to pay the Finder's Fee to the parties entitled thereto, in the amounts and in the Priority Order for payment of the Finder's Fee, described above. In consideration of the disposition of any portion of the Development Properties in accordance with this subsection E 2.2(a) and upon closing of the escrow for the disposition of any portion of the Development c Properties, the City will authorize escrow to pay the Development Fee to the parties entitled thereto,in the amounts described above. o d L (b) The sale or lease of the Development Properties will be accomplished in accordance with the Strategic Plan. AECOM/Fransen shall manage and Un coordinate the negotiations related thereto, subject to ongoing consultation with and approval by ' the City Manager. As part of its efforts, AECOM/Fransen is to provide, and bear the cost of, each of. i) all of AECOM/Fransen's activities in connection with the preparation and obtaining approval of the Draft Strategic Plan; ii) all planning; iii)marketing research; iv) the preparation d of marketing materials and marketing of property; v) project management by AECOM/Fransen; N vi) accounting; and vii) legal fees of AECOM/Fransen ("AECOM/Fransen Internal Costs"). In a: addition, AECOM/Fransen shall use its reasonable efforts to arrange for tenants and/or purchasers to pay for: y) transactional costs of entities other than AECOM/Fransen and the City; and z) subject to such tenant improvement allowances as may be approved by the City as a Project Cost, costs of improvements to property required by purchasers or lessees as a condition of their leases or purchases. a Notwithstanding (a) and (b) above, no sale of the Regal Cinema may LL occur unless and until the Ongoing Development Requirements have been fulfilled, unlessco waived by Regal Cinemas, Inc., and agreed to by the City, acting in its sole and absolute discretion. (c) AECOM/Fransen shall manage and coordinate the sale or long- LU a term ground lease by the City of the Pad Sites. The Pad Sites will be sold and/or leased to developers/users in an "as is" condition. AECOM/Fransen shall manage and coordinate the negotiations related thereto, subject to ongoing consultation with and approval by the City N Manager. Subject to being approved by AECOM/Fransen, this process may involve the City's W retention of a Third Party Broker (the "City's Broker") (subject to approval by the Mayor and a City Council of the City). Any commissions payable to a Third Party Broker with respect to the i sale, lease, or other disposition of the Development Properties, shall be the obligation of the City and deemed a Normal and Customary Cost of Disposition. In consideration of the disposition of o Development Properties in accordance with this subsection 2.2(c),upon closing of escrow for the w disposition of Development Properties, or any portion thereof, the City will authorize escrow to Q pay the Development Fee to the parties entitled thereto, in the amounts described above. To the extent that the sale or lease transaction involves a buyer's broker, any fees payable to the buyer's E broker shall be the responsibility of the buyer or the City's Broker pursuant to any courtesy to LFQ 5 Packet Pg. 573 18.b cooperating brokers program offered by the City's Broker (i.e., commission sharing). Neither 3 the City nor AECOM/Fransen shall be responsible for any fees, payments, or costs claimed by a buyer's broker. d d (d) AECOM/Fransen shall propose in the Draft Strategic Plan any Q public improvements anticipated to be required as a condition of approval to any required land use entitlements for the Project (including potential design and construction of a public park v adjoining restaurant pads at 4th and E Streets) (that certain Theater Square Strategic Plan, as amended was approved on August 16, 2017). c d A draft Strategic Plan including all of the elements described in this a Section 2 that is in detail sufficient for meaningful consideration and review in the sound 2 d judgment of the City shall constitute a "Draft Strategic Plan." AECOM/Fransen shall submit to the City an initial Draft Strategic Plan on or before the Initial Submittal Date. AECOM/Fransen agrees and acknowledges that any disposition of property of the City is subject to review and discretionary approval of the City. AECOM/Fransen further agrees and acknowledges that any N property of the City is subject to a requirement and limitation under the City Charter that such property be disposed of at a price that is not less than fair market value (that certain Theater Square Strategic Plan, as amended was approved on August 16,2017). d 3. Cite Review of Draft Strategic Plan. The City agrees that upon receipt of the o Draft Strategic Plan, it will review such plan acting in its sole and absolute discretion. Following such review, and after discussions with taxing agencies, the City will provide written input to AECOM/Fransen concerning the Draft Strategic Plan. After the City has provided such input, the City and AECOM/Fransen will meet and consult concerning the provisions of the Draft Strategic Plan, the initial evaluation by the City, and input, if any, received from such taxing agencies and other public agencies, and will seek to implement such modifications as are a necessary or appropriate to the Draft Strategic Plan. No formal comments were received from N such taxing agencies or other public agencies on the Draft Strategic Plan. Following receipt of LL such written input and meeting with City representatives, AECOM/Fransen shall submit an amended draft Strategic Plan("Amended Draft Strategic Plan"). Upon receipt of the Amended Go Draft Strategic Plan, the City will repeat the process described above, with the goal of approving the Strategic Plan. If the City determines that the Draft Strategic Plan, as submitted, or an Amended Draft Strategic Plan is satisfactory in its sole and absolute discretion of the City as a a Ui Strategic Plan for development of Theater Square, the Mayor and City Council of the City may then approve such plan which, upon such approval, shall constitute the "Approved Strategic Plan" (that certain Theater Square Strategic Plan, as amended was approved on August 16, cY 0) 2017). W The Approved Strategic Plan must be approved by the Strategic Plan Approval Deadline. w If no Approved Strategic Plan has been approved by the Strategic Plan Approval Deadline, this Agreement shall automatically cease to be of any force and effect and the City shall have no obligations to AECOM/Fransen in connection with this Agreement with respect to the subject w matter hereof or as to any instruments delivered to the City, except that, AECOM/Fransen shall Q be entitled to receive a payment of the Finder's Fee, as described above. with respect to any c closed transaction for the sale of the Regal Cinemas and/or a Development Fee with respect to E any closed transaction for sale or lease of an interest in the Development Properties, in either a 6 Packet Pg. 574 18.b r such case entered into by the City prior to the second (2nd) anniversary of such termination with 3 any acquirer or end user from whom the City has received a written proposal or letter of intent for such transaction prior to such termination. d 4. Assignment Prohibited. AECOM/Fransen may not assign or delegate any of its a respective rights or obligations under this Agreement without the express written consent of the U) City, which may be granted or denied by the City acting in its sole and absolute discretion. 2 Notwithstanding the foregoing prohibition on assignment, with at least ten (10) days' prior written notice to the City Manager, AECOM may assign its rights and obligations to an entity over which AECOM retains majority control, provided AECOM first submits to the City a report and substantiating evidence of AECOM Parent's majority control and the entity's assets, c financial capability, and applicable experience. Upon any permitted assignment hereunder, AECOM and the assignee shall execute and deliver to the City such documentation as the City o may reasonably require. When the City receives all such documentation, the assignee shall thereafter be deemed to be "AECOM," and, along with Fransen, "AECOM/Fransen", under this Agreement for all purposes. In addition, AECOM may delegate any consulting, engineering, construction or finance aspect of its obligations hereunder or under the Approved Strategic Plancc to any entity that is owned by and under the control of AECOM Parent. 5. Plans, Reports, Studies and Investigations. �o 5.1 Proprietary Rights. If this Agreement terminates for any reason, the City ® may retain all copies of any plans, reports, studies, and/or investigations (collectively, the -e "Reports"; individually a "Report") respecting Theater Square, if any, that AECOM/Fransencc prepares and submits to the City hereunder concerning the Project.. All Reports will be delivered to the City free of all claims or interest of AECOM/Fransen. For all such Reports delivered to or coming into the City's possession, the City may demand and AECOM/Fransen a shall transfer to the City, without cost, all right, title, interest, and ownership rights that N AECOM/Fransen has or may have to any or all such Reports, and will notify the City of known U. third party rights, if any, in any Report, such as copyright , trademark, or other use limitations00 retained by persons other than AECOM/Fransen (that are not otherwise identified in the Report). The City shall be permitted to rely on and utilize the Reports in connection with the development and/or sale, lease or disposition of the applicable part of Theater Square. a 5.2 Use of Reports. The City may use, grant, license, or otherwise dispose of the Reports to any person or entity for the Project or any other purpose. Any City use or the City's transferee's use of any Report in completed or uncompleted form for other projects or for y this Project, with an entity other than AECOM/Fransen, will be at the City's risk and without W liability or legal exposure to AECOM/Fransen. a w 6. Indemnity. AECOM/Fransen shall indemnify, defend, and hold the City and its representatives, officials, officers, employees, agents, and volunteers harmless from any losses, o liabilities, claims, causes of action, injuries, or expenses including, without limitation, reasonable w attorneys' fees and costs arising from, relating to, or in any way connected with (a) the a performance by AECOM/Fransen of any of its obligations under this Agreement or (b) any Report or Reports, except that the indemnity provided for in this subsection 6(b) shall not apply E where the City, or a transferee of the City, uses a Report in any form for another project or for a 7 Packet Pg. 575 18.b the Project with an entity not affiliated with AECOM/Fransen. The limitation on liability set forth in Section 14.6 below shall not limit AECOM/Fransen's indemnity obligations under this Section 6 with respect to liability for third party claims against the City, its representatives, officials, officers, employees, agents, and volunteers for punitive (but only to the extent directly attributable to the actions of AECOM/Fransen),indirect, special,and/or consequential damages. a 7. Additional AECOM/Fransen Responsibilities. Without limiting any other provision of this Agreement, AECOM/Fransen shall, during the period of time this Agreement remains in effect, do the following at its sole cost and expense, in furtherance of the negotiation N c process: £ CL 7.1 Meeting . AECOM/Fransen shall meet at least two (2) times per month d with the City's staff and representatives to review and understand the planning and design c criteria applicable to Theater Square,and in drafting the Approved Strategic Plan. M 7.2 Reports. AECOM/Fransen shall make oral and written progress reports to N the City and/or its staff as the City Manager may reasonably request not more than twice per calendar month. 7.3 Rights of Entry. Before entering upon any property within Theater Square, whether for site assessment or other due diligence, AECOM/Fransen shall first obtain a o right of entry from the City (in a form reasonably acceptable to the City) or the applicable property owner, and any tenant. AECOM/Fransen may ask the City to use its best efforts to help AECOM/Fransen obtain a right of entry upon private property. as 7.4 Environmental Reports/Studies. AECOM/Fransen shall promptly provide the City with copies of any environmental reports and any other studies of the physical condition E of Theater Square, if any, that AECOM/Fransen causes to be prepared, or otherwise obtains with a respect to Theater Square or the Project (which shall be deemed to be "Reports" in accordance with Section 5.1 above). M 8. Term. The term of this Agreement will expire on the third (3rd) anniversary of the City's approval of the Approved Strategic Plan. In addition,AECOM/Fransen shall have the right to terminate this Agreement upon sixty (60) days' written notice if the City fails to pay Q AECOM/ Fransen within thirty (30) days following written notice any amounts then due to LU AECOM/Fransen hereunder. Either party may terminate this Agreement if the City rejects more = than three (3) proposed disposition transactions presented by AECOM/Fransen or if CY AECOM/Fransen proposes but the City rejects a revised Strategic Plan proposing changes to the w Approved Strategic Plan intended by AECOM/Fransen to account for weakened or otherwise changed market conditions that have occurred after the City's approval of the Approved w Strategic Plan. AECOM/Fransen shall have the right to terminate this Agreement upon thirty X (30) days' written notice to the City but in so doing, and notwithstanding anything herein to the o contrary, waives all rights hereunder, including without limitation, all claims for payments with U respect to a Finder's Fee or Development Fee not earned hereunder prior to delivery of such a notice. Upon expiration of the tern or earlier termination of this Agreement in accordance with the provisions hereof, this Agreement shall automatically cease to be of any force and effect and the City shall have no obligations to AECOM/Fransen in connection with this Agreement with a 8 Packet Pg. 576 18.b w respect to the subject matter hereof or as to any instruments delivered to the City, except that •3 AECOM/Fransen shall be entitled to receive a payment related to a Finder's Fee with respect to any closed transaction for the sale of the Regal Cinemas and/or a Development Fee with respect '! to any closed transaction for sale or lease of an interest in the Development Properties, in either such case entered into by the City prior to the second (2nd) anniversary of such termination with any acquirer or end user from whom the City has received a written proposal or letter of intent d for such transaction prior to such termination. Notwithstanding the foregoing, this Agreement shall terminate and neither party shall have any further rights or obligations with respect to the d other upon disposition of the Regal Cinemas and Development Properties. d 9. Brokers Indemnity. Except as provided in Paragraph 2.2 hereof, c AECOM/Fransen shall indemnify, defend, and hold the City, and its representatives, officials, ., officers, employees, agents, and volunteers harmless from and against any losses and liabilities c including, without limitation, reasonable attorneys' fees, arising from, relating to, or in any way ` connected with, any claim by any broker, agent, or finder for any commission, fee, or other ; compensation in connection with the sale of the Regal Cinemas and/or sale, lease, or other y disposition of the Development Properties. �o a� 10. Entire Agreement; Time is of the Essence. This Agreement represents the entire agreement of the Parties with respect to the matters set forth herein. This Agreement may be amended only in a writing signed by the Parties, and approved by the Mayor and City Council of H the City. Time is of the essence in this Agreement. 11. Nondiscrimination. AECOM/Fransen covenants and agrees that there shall be no discrimination against or segregation by AECOM/Fransen of any person or group of persons on account of race, color, creed, religion, sex, marital status, national origin, ancestry, age, or = d disability in the sale, lease, sublease, transfer, use, occupancy, tenure, or enjoyment of Theater a Square, nor shall AECOM/Fransen or any person claiming under or through AECOM/Fransen, y establish or permit any such practice or practices of discrimination or segregation in the LL selection, location, number, use or occupancy of tenants, lessees, sublessees, subtenants, or vendees of Theater Square. CO v 12. Notices. All notices required or permitted hereunder shall be delivered in person or by facsimile, by overnight courier, or by registered or certified mail, postage prepaid, return a receipt requested, to each Party at its address shown below, or to any other place designated inLU writing by such Party: a City: The City of San Bernardino W 290 North"D" Street, Third Floor San Bernardino, CA 92418 Q LU Attention: City Manager O U LU Q _ d E R Q 9 3 Packet Pg. 577 s 1 4 With a copy to: City of San Bernardino City Attorney's Office 290 North"D" Street, Third Floor E San Bernardino, CA 92418 IM AECOMIFransen: AECOM Technical Services, Inc. U) 300 So. Grand Avenue, Suite 900 Los Angeles, California 90071 2 Attention: Mr.William Anderson, N Principal and Director of Economics and Planning c d And The Fransen Company o d 5000 Birch Street West Tower, Suite 3000 Newport Beach, California 92660 Attention: Mr. John Fransen r With a copy to: Liner LLP 1100 Glendon Avenue, Suite 1400 Los Angeles, California 90024 Attention: Michael J. Kiely, Esq. And Crosbie Gliner Schiffi nan Southard&Swanson, LLP 12750 High Bluff Drive, Suite 250 d San Diego, California 92130 E Attention: Craig Swanson,Esq. and Dana Schiffinan, Esq. N .L- Any Any such notice shall be deemed received upon delivery, if delivered personally, by facsimile, or by e-mail, one day after delivery to the courier if delivered by courier, and three 00 days after deposit into the United States Mail if delivered by registered or certified mail. 13. Agreement.Limitations. The City is not, by entering into this Agreement, a committing itself to or agreeing to undertake: (a) land acquisition, (b) land disposition to W AECOM/Fransen, (c) land use approvals, or (d) any other act or activities requiring the a subsequent independent exercise of discretion by the City or any agency or department thereof CY This Agreement does not constitute an agreement by the City to exercise control over property N W within Theater Square. This Agreement is merely an agreement to review Reports according to the terms hereof, with all final discretion and approval to be exercised exclusively by the Mayor w and City Council of the City as to any Approved Strategic Plan, and all proceedings and X decisions in connection therewith. 0 0 14. Miscellaneous provisions. w 14.1 Governing; Law and Venue. California law governs this Agreement and its provisions will be construed according to California laws. Venue for filing any action to enforce or interpret this Agreement will be San Bernardino, California. a 10 Packet Pg. 578 18.b 14.2 Headings. The section headings in this Agreement are for convenience •3 only and do not explain,modify, or add to the meaning of this Agreement. d E 14.3 Severability. The provisions of this Agreement are severable. The invalidity or unenforceability of any provision in this Agreement will not affect the other Q provisions. N d 14.4 Cite Manager to Act for City. Except to the extent otherwise required under the City Charter, City ordinances or applicable statutes or as otherwise set forth in this N r Agreement, the City Manager, or her designee, may act on behalf of the City for the purposes of d this Agreement. a 0 d 14.5 Joint and Several Liability. Each of AECOM and Fransen shall be jointly and severally liable and responsible for performance by AECOMXransen under this Agreement. 0 14.6 Limitation on Liability. Except to the extent required to fulfill a defense, indemnity and hold harmless obligation as set forth in Section 6, or as may be described in the d Strategic Plan, neither AECOM/Fransen nor the City will be liable to the other for any punitive, d indirect, special or consequential damages hereunder. 14.7 Relationship of AECOM/Fransen and City. AECOM/Fransen and each of r AECOM Parent and Fransen, are independent contractors and are not agents of the City. AECOM/Fransen, AECOM Parent and Fransen are not partners of or joint-venturers with the City. a� 14.8 Interpretation. This Agreement is the result of the combined efforts of the Parties. Should any provision be found ambiguous, the ambiguity will not be resolved by E construing this Agreement in favor or against any Party,but by construing the terms according to Q r their generally accepted meaning. U. 14.9 Precedence of Documents. If the body of this Agreement and any Exhibit CO or Attachment conflict, the terms in the body of this Agreement will control. Any term or condition in any Exhibit or Attachment that purports to modify the allocation of risk between the Parties is void. a W 14.10 Successors and Assigi . Subject to the limitation on assignment, this Q Agreement is binding upon, and will inure to the benefit of all Parties, and their respective v successors and assigns. U) LU W 14.11 Counteiliarts. The Parties may sign this Agreement in counterparts, each Q of which when signed and delivered will be deemed an original, and all of which together will = constitute one instrument. ~ 0 U W Q C d E V la Q 11 Packet Pg. 579 1&b IN WITNESS WHEREOF, the Parties have executed and acknowledged this Agreement on the dates and in the year set forth below. THE CITY OF SAN BERNARDINO,a California charter city a N d V By: Name: Andrea M. Miller N r Title: City Manager Dated: Ea 0 as d 0 ATTEST: 0 _ d r Georgeann Hanna,City Clerk r a� Y APPROVED AS TO FORM N GARY D. SAENZ, City of San Bernardino City Attorney a c d By: a Name: y Title: M r a LU o: a a LU f- a w x F- O V w a r c d E a S-1 Packet Pg. 580 18.b AECOM/FRANSEN: 3 c AECOM TECHNICAL SERVICES, INC., a California corporation By: N Name: Title: as Dated: y c E G. THE FRANSEN COMPANY,INC., d a California corporation 0 By: — Name: John Fransen a Title: President `o Dated: d d s F d r r d c d a c d E a r U) LL CO) 00 G a w o: Q O Cn w a w x O U w Q Z.: C d E t V Q S-2 Packet Pg. 581 118.b EXHIBIT "A" s MAP OF THEATER SQUARE d North F S"ot 777771777 li H � ��EIS EffH ► - �L " E j a 10 L- Hill n 1 I r 3� n All- CL IE SWAM U. A, Jim Co at Y •a !4 ® ® ® ■ ® 8� ?'= „ �3 x Sos�Z t a � c, ouo Sn 01D n o° 9Bt o� , w il Hull R8;,. n 9% a b'- of ol-q ��1t 4i nm m ' p a o f c. n'g!a li Ial V a Wizm w 2 Q w H O L) w a _ d E 91 A-1 Packet Pg. 582