HomeMy WebLinkAboutR53-Economic Development Agency
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM:
Maggie Pacheco
Executive Director
ORI6INA~JECT:
Waterman Holdings, LLC 2004 Disposition and
Development Agreement - Amendment No.2 (Central
City East Redevelopment Project Area)
DATE: June 12,2006
--------------~----------_._-------------------------------------------------------------------------------------------
Svnopsis of Previous Commission/Council/Committee Actionls):
On November 2, 2004, Redevelopment Committee Members Estrada and Longville unanimously voted to recommend that the
Community Development Commission consider a disposition and development agreement with Waterman Holdings, LLC for
approval.
On December 6, 2004, Community Development Commission adopted Resolution No. CDC/2004-49 approving the sale of cettain
real property by the Redevelopment Agency to Waterman Holdings, LLC and authorized the Executive Director to execute the
Disposition and Development Agreement between the Redevelopment Agency and Waterman Holdings, LLC (4th and Waterman
Avenue - APN: 0135-191-11) within the Central East Redevelopment Project Area ("Project Area").
On December 6, 2004, Mayor and Common Council adopted Resolution No. 2004-386 approving the sale of cettain real property
by the Redevelopment Agency to Waterman Holdings, LLC (4th and Waterman Avenue - APN: 0135-191-11).
On June 7, 2005, Redevelopment Committee Members Estrada and McGinnis unanimously voted to recommend that the
Community Development Commission consider the action of June 20, 2005.
On June 20, 2005, the Community Development Commission adopted Resolution No. CDC/2005-19 approving Amendment No. I
to the 2004 Disposition and Development Agreement between the Redevelopment Agency and Waterman Holdings, LLC and
authorized the Executive Director to execute Amendment No.1.
-----------------------------------------------~----------------------------------------------------------------------------------------
Recommended Motionls):
ICommunity Development Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving and authorizing the
Executive Director of the Redevelopment Agency ofthe City of San Bernardino ("Agency") to execute ArnendmentNo. 2 to
the December 6, 2004 Disposition and Development Agreement, as amended, between the Agency and Waterman Holdings,
LLC (4th and Waterman Avenue - APN: 0135-191-11) (Central City East Redevelopment Project Area)
----------------------------------------------------------------------------------------------------
Contact Person(s):
Maggie Pacheco
Phone:
(909) 663-1044
Project Area(s) Central City East Ward(s): I
o Staff Report 0 Resolution(s) 0 Amendment(s)/Agreement(s)/Contract(s)
Supporting Data Attached: 0 Map( s) 0 Letters
Approximately
FUNDING REQUIREMENTS Amount: $ 360,000 Source: General Revenues from the Agency
EDA Budget
6 CiA ~{U u ~(J~7ie
Barbara Lindseth, Admin. Serv' es Director
.-commiss!o-;;jcouncii-NirteS-:----ff<:ill-:--crx::p:tJrrti-:-;:n--------------------------------------
SIGNATURE:
I
-----------------------------------------------------.--------------------------
P:\AgendaslComm Dev Commission\COC 2006\06-19-06 Waterman Holding!> LLC - Amendment No.2 Final SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 06/19/2006
Agenda Item Numbe{f~10 0
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
WATERMAN HOLDINGS, LLC 2004 DISPOSITION AND DEVELOPMENT AGREEMENT-
AMENDMENT NO.2
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
BACKGROUND:
On December 6, 2004, the Mayor and Common Council and Community Development Commission (the
"Commission") approved the sale of approximately 3.9 acres owned by the Redevelopment Agency (the
"Agency") located at the south west comer of 4th Street and Waterman Avenue (the "Property") pursuant
to a 2004 Disposition and Development Agreement (the "DDA") between the Agency and Waterman
Holdings, LLC (the "Developer").
The DDA, as approved, called for the Buyer to construct a minimum of 16,864 square feet of office space
for the County Preschool Services Department (the "PSD") on the most westerly 2 acres of the Property
(Phase I) with an option to construct an additional building for another County Department on the
remaining 1.6 acres on the easterly portion of the Property (Phase II). During the interim period until the
option on the Phase II site was exercised, the DDA required the Agency to install and maintain perimeter
fencing, landscaping and an irrigation system for the Phase II site. The Agency would sell the Phase I
Property for the fair market value and the Buyer would have the option to purchase the Phase II Property
at a later date. The Agency pledged sixty percent (60%) of the tax increment that the completed Project
would generate over a period of ten (10) years to offset the below market rental rate that the County
required of the Developer/Buyer.
On May 17, 2005, the County Board of Supervisors approved a ten (IO)-year lease with the Developer to
construct 17,000 square feet of office space for the PSD.
On June 20, 2005, the Commission approved Amendment No. I to the DDA whereby the location of
Phase I and Phase II switched. As a result, the Phase I project was then to be located at the southwest
comer of 4th Street and Waterman Avenue.
In the interim, two (2) items arose that would necessitate a change to the original DDA; First, it was
determined that the pledge of tax increment to the Developer needed to be restructured because the last
date to incur tax increment debt payable from direct pledge of tax increment revenues in the Project Area
was January I, 2004. Second, the County needed a larger building constructed for a different County
Department and consequently, the Developer would now require both the Phase I and Phase II sites
("Agency Property") combined as a single site. The Commission thus authorized Staff to modify the
DDA to reflect these items ("Amendment No.2").
CURRENT ISSUE:
Under the proposed Amendment No.2 to the DDA, the Developer proposes to develop on the Agency
Property a two-story building containing a minimum of 45,000 square feet of office space, to include
parking and landscaping, and to lease to the County Transitional Assistance Department ("TAD"). TAD
provides jobs and employment services to residents and job training programs.
~-~~--------------------------------------------------------------
P:\Ageodas\Comm Dcv CommissionICDC 2006\06-19-06 Waterman Holdings LLC - Amelldmenl No_ 2 Final SR_doc
COMMISSION MEETING AGENDA
Meeting Date: 06/20/2005
Agenda Item Number:
Economic Development Agency Staff Report
Amendment No.2 - Waterman Holdings, LLC
Page 2
The Flood Control Channel parcel owned by the Agency, (APN: 0135-191-15) ("Agency Flood Channel
Property") is presently not part of the DDA or the Amendments. However, if at a future date the Agency
desires to sell the Agency Flood Channel Property, the Developer will have the right of first refusal to
acquire it for a three (3) year period of time. If the Buyer desires to purchase the Agency Flood Channel
Property, the terms would be negotiated at that time and it would be brought forward to the Commission
at a public hearing.
The Developer will purchase the Agency Property for $512,424, which is equal to the fair market value of
the Agency Property based upon the final surveyed square footage. Escrow has been opened under the
terms of the original DDA and the Developer has deposited the sum of $20,000 into escrow and the
balance of the $492,424 will be paid upon the closing of the escrow. The escrow closing is expected
sometime this fall and the Developer will commence construction of the County office building with a
completion date of about July 2007. Per Amendment No.2, the Agency will pledge to the Developer
from general Agency revenues under a Promissory Note an amount equal to 60% of the 1 % tax revenues
generated by the proposed Project (estimated development cost is $6 million) for a period of 10 years. As
per the original DDA, the 60% pledge was authorized by the Commission in an effort to offset or
compensate the Developer for the below market rate 10 year lease with the County. The Agency payment
obligation will commence upon presentation of a cancelled check by the Developer and as of the fiscal
year followinf completion of the Project by the Developer and said payment will be paid after each
December lOt and April I oth tax payment.
ENVIRONMENTAL IMPACT:
The proposed new project description has been reviewed under the California Environmental Quality Act
("CEQA") and it has been determined that the project qualifies for a Categorical Exemption, Class 32
(Guidelines Section 15332).
FISCAL IMPACT:
The Agency will receive $512,424 at the close of escrow and will be required to pay the Developer the
sum equal to 60% of the new property taxes generated from the development on the Agency Property,
which is estimated to be $360,000 for the 10 year period assuming a development value of $6 million.
RECOMMENDATION:
That the Community Development Commission adopt the attached Resolution.
z.--
P:\Agendas\Comm Dcv Commission\CDC 2006\06-19-06 Watennau Holdings LLC - Amcndmcnl No_ 2 Final SR.doe
COMMISSION MEETING AGENDA
Meeting Date: 06/19/2006
Agenda Item Number:
RESOLUTION NO.
2
3
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE AMENDMENT NO.2 TO THE DECEMBER
6, 2004 DISPOSITION AND DEVELOPMENT AGREEMENT, AS
AMENDED, BETWEEN THE AGENCY AND WATERMAN HOLDINGS,
LLC (4TH AND WATERMAN AVENUE - APN: 0135-191-11) (CENTRAL
CITY EAST REDEVELOPMENT PROJECT AREA)
4
5
6
7
8
WHEREAS, the Community Development Commission of the City of San Bernardino
9
(the "Commission") is the governing board of the Redevelopment Agency of the City of San
10
Bernardino (the "Agency"); and
WHEREAS, the Agency Property is located at the southwest comer of 4th Street and
Waterman Avenue within the Central City East Redevelopment Project Area and is
11
12
13
unimproved; and
14
WHEREAS, on December 6, 2004, the Commission adopted Resolution No.
15
CDC/2004-49 approving the sale of certain real property (APN: 0135-191-11) (the "Agency
Property") by the Agency to Waterman Holdings, LLC (the "Developer") and authorizing the
16
17
Agency Executive Director to execute the 2004 Disposition and Development Agreement (the
18
"DDA") between the Agency and the Developer; and
WHEREAS, on June 20, 2005, the Commission adopted Resolution No. CDC/2005-19
19
20
approving and authorizing the Executive Director of the Agency to execute Amendment No. 1
21
to the DDA between the Agency and Developer; and
22
WHEREAS, Amendment NO.1 to the DDA caused Phase I and Phase II of the Project
23
to exchange locations for each such Phase; and
24
WHEREAS, it is appropriate for the Commission to approve Amendment No.2 (the
"Amendment") to the DDA between the Agency and the Developer in this Resolution.
25
P:\Agenda!\ResolutionslJtesolutions\2006\06-19-06 Waterman Holdings - Amend No.2 COC Reso_doc
1 NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE
2 CITY OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS
3 FOLLOWS:
4 Section 1. The Commission hereby approves the attached Amendment No. 2in the
5 form presented at the meeting at which this Resolution is adopted. The Executive Director of the
6 Agency is hereby authorized and directed to execute the Amendment No. 2 on behalf of the
7 Agency, together with such technical and non-material conforming changes as may be
8 recommended by Agency Counsel.
The Resolution shall become effective immediately upon its adoption.
9 Section 2.
10 III
11 III
12 III
13 III
14 III
15 III
16 III
17 III
18 III
19 III
20 III
21 III
22 III
23 III
24 III
25 III
P:\Agmdas\Rcsolutioos\R.etoIutMmli\2006\06-I9-06 Waterman Holdings ~ Ammd No.2 COC RCSQ.doc
2
2
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING AND
AUTHORIZING THE EXECUTIVE DIRECTOR OF THE
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
("AGENCY") TO EXECUTE AMENDMENT NO.2 TO THE DECEMBER
6, 2004 DISPOSITION AND DEVELOPMENT AGREEMENT, AS
AMENDED, BETWEEN THE AGENCY AND WATERMAN HOLDINGS,
LLC (4TH AND WATERMAN AVENUE - APN: 0135-191-11) (CENTRAL
CITY EAST REDEVELOPMENT PROJECT AREA)
3
4
5
6
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the
7
Community Development Commission of the City of San Bernardino at a
8
meeting thereof, held on the day of
9
Commission Members: Aves Navs
10 ESTRADA
II BAXTER
12 MCGINNIS
13 DERRY
14 KELLEY
15 JOHNSON
MC CAMMACK
16
17
18
, 2006, by the following vote to wit:
Abstain
Absent
Secretary
19 The foregoing resolution is hereby approved this
day of
,2006.
20
21
22
Patrick J. Morris, Chairperson
Community Development Commission
of the City of San Bernardino
23
24
Approved as to Form and Legal Content:
25
V;::s7tJQib
Agency Counsel
By:
3
P:\Agendas\Rcsolutiollll\Raolutions\2006\06-I9-06 Waterman Holdings - Amend No_ 2 CDC Reso.OOc
AMENDMENT NO.2
TO THE
2004 DISPOSITION AND DEVELOPMENT AGREEMENT
WATERMAN HOLDINGS, LLC
(4th and Waterman Property)
This AMENDMENT NO.2 (this "Second Amendment") is dated as of JW1e 19,2006, by
and between the Agency and the Buyer, and is an amendment to that certain 2004 Disposition and
Development Agreement by and between the Redevelopment Agency of the City of San Bernardino
(the "Agency"), a public body, corporate and politic and Waterman Holdings, LLC (the "Buyer" or
"Developer"), a California limited liability company, dated as of December 6, 2004, for the sale and
purchase of certain Agency owned property located at the southwest comer of 4th Street and
Waterman Avenue (the "Agency Property") within the City of San Bernardino (the "City") and
within the Central City East Redevelopment Project Area of the Agency (the "DDA" or
"Agreement"), as amended by that certain Amendment No. 1 to the DDA, dated JW1e 20, 2005, by
and between the Agency and the Buyer (the "First Amendment"), and is entered into in light of the
facts set forth in the following Recital Paragraphs.
RECITALS
A. The Agency and the Buyer executed the DDA on December 6, 2004. The Agency
and the Buyer executed the First Amendment to the DDA on JW1e 20, 2005. The First Amendment
modified the Agreement, to provide, without limitation, for the transposition of the Phase I Property
and the Phase II Property (as those real properties are defined in the Agreement).
B. The Agency is the owner of that certain real property commonly known as APN:
0135-91-11 located at the southwest comer of Waterman Avenue and 4th Street, San Bernardino,
California (the legal description of which is attached hereto and incorporated herein by this
reference as Exhibit "A") (the "Agency Property"). The Agency Property is located in the Central
City East Redevelopment Project Area and consists of an approximately 3.92 acre parcel located at
the intersection of 4th Street and Waterman Avenue. The Agency is also the owner of an
approximate 0.67 acre parcel commonly known as APN: 0135-191-15 that consists of the flood
control channel presently aligned to the south of the Agency Property (the "Flood Control Channel
Property"), and the Flood Control Channel Property is located in the Central City East
Redevelopment Project Area. The parcel map for the Agency Property and Flood Control Channel
Property is as set forth in Exhibit "B" to the DDA. The legal description for the Flood Control
Channel Property is as set forth in Exhibit "c" to the DDA.
C. The sale by the Agency to the Buyer of the Agency Property and the right of first
refusal (the "First Refusal Right") granted by the Agency to the Buyer to purchase the Flood
Control Channel Property, and the purchase by the Buyer from the Agency of the Agency Property
and the exercise by the Buyer of the First Refusal Right shall be subject to the terms, covenants and
conditions of this Amendment.
D. The Agency and the Buyer desire to approve and execute this Second Amendment to
the DDA and First Amendment upon the terms, covenants and conditions as set forth herein.
4820-5437-4913.3 I
P:lAgendaslAgenda Attachments\Agmn-Amcnd 2006\06-19.% Am:ndment No.2 - Waterman Holdings. LLC.OOI:
NOW, THEREFORE, THE AGENCY AND THE BUYER DO HEREBY AGREE AS
FOLLOWS:
1. Recital A and Recital B. Recital A and Recital B in the DDA shall be deleted in
their entirety.
2. Section 1.01. Purpose of Al!reement. The following provision shall be added at
the end of the first sentence in Section 1.01 of the DDA: (,
"the granting by the Agency to the Buyer of the First Refusal Right, and the exercise
by the Buyer of the First Refusal Right."
The second sentence of Section 1.01 of the DDA shall be deleted in its entirety and
replaced by the following:
"The purchase and development of the Agency Property, the granting by the Agency
to the Buyer of the First Refusal Right, and the exercise by the Buyer of the First Refusal Right
pursuant to this Agreement are in the vital and best interests of the City of San Bernardino (the
"City") and the health, safety and welfare of its residents, and is in accord with the public purposes
and provisions of applicable state and local laws."
The last sentence of Section 1.01 of the DDA shall be deleted in its entirety and
replaced by the following:
"The Agency has determined that the purchase and development of the Agency
Property, the granting by the Agency to the Buyer of the First Refusal Right, and the exercise by the
Buyer of the First Refusal Right contemplated by this Agreement are consistent with the
Redevelopment Plan for the Project Area."
3. Section 1.02. The Al!encv Property. Section 1.02 of the DDA shall be deleted in
its entirety and shall be amended to read as follows: "The Agency Property consists of
approximately 3.92 acres of land. The Buyer intends to develop a minimum of 45,000 square feet
of office space for lease to the County of San Bernardino ("County") on the Agency Property for
use and occupancy by the County of San Bernardino, Transitional Assistance Department (the
"County Lease Agreement"), which Department provides jobs and employment services to
residents and job training programs and other facilities at the proposed location to be made available
for the County. The Buyer shall be entitled to close escrow to acquire the Agency Property at
anytime on or before December 4, 2006 unless such date has been extended in writing at the
discretion of the Executive Director for a total period of time not to exceed six (6) months without
an amendment to this Agreement."
Except as may be specifically accepted herein, wherever the term "Phase I Property and the
Phase II Property" is used in the DDA, it shall be replaced in each instance with the term "Agency
Property". Such other conforming grammatical changes to conform with those changes authorized
by this Section 3 shall be applied to the entirety of the DDA. Other similar conforming changes
shall likewise be made where the intent of the parties implies the use of the term "Agency Property"
to replace any other term intending to describe the real property which is the subject matter of this
Agreement. "
4820-5437-4913.3
2
P:\Aaeudu1.A&enda AUachmenlSl.Agnro-Amcnd 2006\06.-19..()6 Amendmcru: No.2 - Waterman Holdings, liC.doc
4. Section 1.03. Benefit To Proiect Area. The following words shall be added
immediately following the words: "Agency Property" in the second line of Section 1.03 of the
DDA:
", the granting by the Agency to the Buyer of the First Refusal Right and the exercise
by the Buyer of the First Refusal Right"
5. Section 1.05. Parties to the Al!reement. Section 1.05(b) of the DDA are hereby
amended to read as follows:
"Section 1.0S(b). The Buyer, as said term is defined herein, is a California limited
liability company. Buyer's principal place of business for purposes of this Agreement is 4221
Wilshire Boulevard, Suite 240, Los Angeles, California 90010."
6. Section 1.07. List of Attachments to Al!reement. Exhibit "B" and Exhibit "C" of
the DDA shall be amended, as provided below, and a new Exhibit "F," as defined below, shall be
inserted in Section 1.07 ofthe DDA:
Exhibit "B" "Parcel map for the Agency Property and Flood Control Channel
Property"
Exhibit "C" "Legal Description of the Flood Control Channel Property"
Exhibit "F" "Agency Revenues Promissory Note"
7. Section 2.02. Conditions for Transfer of the Property. Section 2.02(c) of the
DDA shall be deleted in its entirety.
8. Section 2.03. Purchase Price. Section 2.03(a) of the DDA shall be amended as
provided below, and Section 2.03(b) shall be amended as provided below:
"Section 2.03. Purchase Price:
(a) The purchase price of the Agency Property is $512,424 (the "Agency
Property Purchase Price"). The fair market valuation for the real properties comprising the Agency
Property is $512,464 for the Agency Property (the "Agency Property Purchase Price"). The
Agency Property consists of 170,808 square feet based upon recent lot line adjustments and the
final engineering survey of the Agency Property. The Agency Property Purchase Price was
determined on the basis of a land valuation pursuant to an independent appraisal report equal to
$3.00 per square foot multiplied by 170,808 square feet, which equals $512,424 and is the valuation
as been determined by the Agency to be the fair market value for the Agency Property to be sold to
the Buyer.
(b) Upon the Opening of Escrow (as defined below) for the Agency Property, the
Buyer shall have previously delivered to Escrow a non-refundable deposit in the amount of Twenty
Thousand Dollars ($20,000) (the "Deposit") for such escrow. In connection with the purchase by
Buyer of the Agency Property, the Deposit, together with the remaining balance of the Agency
Property Purchase Price in the amount of $492,424, as an additional cash amount, shall be remitted
by the Buyer into Escrow and shall equal the Agency Property Purchase Price."
4820-5437-4913.3 3
P:\Agendas\Agenda Anachments\Agmu-Amend 2006\()6..19..06 Amendment NO.2 - Watcnnan Holdings. LLC.doc
9. Section 2.04. Openin!! of Escrow. Section 2.04(a) of the DDA shaH be deleted in
its entirety and replaced by the provision provided below:
"Section 2.04(a): The transfer and sale of the Agency Property shaH take place
through escrow (the "Escrow") to be administered by the Escrow Holder. The Escrow for the
Agency Property shall be deemed open ("Opening of Escrow") upon the receipt by the Escrow
Holder of a fuHy executed copy of this Agreement. The Escrow Holder shaH promptly confirm to
the parties the escrow number and the title insurance order number assigned to the Escrow for the
Agency Property with the Escrow Holder."
10. Section 2.06(a). Conveyance of Title. The first sentence of Section 2.06(a) of the
DDA shall be deleted and replaced by the foHowing: "Title to the Agency Property shall be
conveyed from the Agency to the Buyer through Escrow on or before the day designated as the date
for the Close of Escrow for the Agency Property (the "Closing Date"), provided that (i) the Escrow
Holder has delivered a preliminary title report to the parties issued through the Escrow and (ii) all
other conditions of this Agreement have been met."
II. Section 2.08(c). Closin!! Obli!!ation of Buver. Subsection (b) of Section 2.08 shaH
be amended as provided hereinbelow and subsection (c) of Section 2.08 shaH be deleted in its
entirety.
Section 2.08(b). The first sentence of Section 2.08(b) shaH be deleted in its entirety
and replaced by the foHowing: "Prior to the Close of Escrow for the Agency Property, the Buyer
shaH provide to the Executive Director of the Agency (i) an originaHy executed copy of the County
Lease Agreement, and (ii) copies of the development permit approvals as issued by the
Development Services Department of the City demonstrating that the facility contemplated by the
County Lease Agreement has been granted by the City as to aH entitlements and building permits to
aHow for the immediate commencement of construction upon the Close of Escrow for the Agency
Property; and (iii) written evidence of construction financing and/or equity funds to provide for the
construction of the facility that will be the subject of the County Lease Agreement." The words
"such Lease Agreement" where appearing in the second sentence of Section 2.08(b) shaH be deleted
and replaced by the foHowing words: "such County Lease Agreement".
12. Section 3.06. A!!encv Ouit Claim Deed. The second sentence of Section 3.06 shaH
be deleted in its entirety as replaced by the foHowing:
"Accordingly, Sections 3.01 to 3.05, inclusive, shall survive the Close of Escrow."
13. Section 3.08. Pled!!e of Tax Increment Revenues. The heading of Section 3.08
shall be amended, as foHows: "Section 3.08. Pled!!e of A!!encv Revenues to Buver." Sections
3.08(a), and 3.08(b) of the DDA, shaH be deleted and replaced by Sections 3.08(a), and 3.08(b), as
set forth below. Section 3.08(c) and 3.08(d) shaH be amended as set forth below. Section 3.08(e)
shaH be added, as set forth below:
4820-5437-4913.3 4
P:\Agendas\Agenda AItaChm:nts\AgmU-Amcnd 2006\06-19-06 Amcodmcnt No.2. WMennan Holdings, LLC.doc
Section 3.08. Pledl!:e of Al!:encv Revenues to Buver.
Section 3.08(a). The Agency hereby pledges to the Buyer certain revenues of the
Agency attributable to sources of funds that are legally available to the Agency in each fiscal year
during the term of such pledge (the "Agency Revenues") based upon the Index as hereinafter
defined. The Index for the calculation of the dollar amount of the Agency Revenues to be remitted
in each fiscal year to the Buyer shall be on the basis of (A) sixty percent (60%), multiplied by (B)
the one percent (I %) general property taxes, exclusive of any override taxes, special taxes, ad
valorem taxes for general obligation bonded indebtedness or other special assessments, that are
actually paid by the Buyer attributable to the development to occur on the Agency Property
pursuant to this Agreement (such sixty percent (60%) of the one percent (1%) of the real property
taxes as actually paid by the Buyer to the County is herein referred to as the "Index"). On or before
the date of the issuance by the City of the certificate of occupancy for the development that occurs
upon the Agency Property, the Agency shall execute and deliver to the Buyer the Agency Revenues
Promissory Note in the form as attached hereto as Exhibit "F" which provides for certain additional
late payment fees and other remedies that are available to the Buyer in the event of any default by
the Agency to remit the timely payments pursuant to such Agency Revenues Promissory Note.
Section 3.08(b). The payments of the Agency Revenues shall commence in the
fiscal year next succeeding the fiscal year in which the Buyer receives a certificate of occupancy for
the development of the Agency Property and continuing for a total often (10) fiscal years thereafter
with the initial fiscal year commencing as of the fiscal year following the fiscal year in which a
certificate of occupancy is so issued by the City for the development of the Agency Property. Such
payments shall be remitted by the Agency to the Buyer within thirty (30) calendar days after the
Buyer has provided written documentation to the Agency that the applicable property taxes on the
Agency Property have been duly paid as of each December 10 and April 10 property tax
installment. The Buyer shall provide to the Agency a copy of the property tax bill and a copy of the
cancelled check illustrating payment of the appropriate real property tax amount. The Agency shall
within thirty (30) calendar days after receipt of the documentation required by this Section, remit
the appropriate payment of the Agency Revenues based upon the Index to the Buyer. Any failure of
the Agency to dispute in writing adequacy of the documentation as submitted by the Buyer within
the applicable thirty (30) day period of time, shall not excuse the Agency from remitting the
requested payment. The Agency shall be obligated to provide written notice to the Buyer within
said thirty (30) day period of time as to the inadequacy of any documentation provide by the Buyer
to the Agency. Failure of the Agency to remit the requested payment of the Agency Revenues
within ten (10) calendar days after the expiration of the initial thirty-day period for review of the
documentation as submitted, unless notice has been provided by the Agency to the Buyer in the
manner as provided above, shall subject the Agency to a three percent (3%) late charge on the
amount owed and interest at the rate of five percent (5%) per annum calculated on the number of
days from the due date of the applicable payment until such amount has been paid to the Buyer.
Section 3.08(c). In Section 3.08(c) of the DDA, the words "Pledged Tax Increment"
shall be deleted where appearing therein and replaced by the words "Agency Revenues". Further,
the words "Phase I Property or the Phase II Property" shall be deleted where appearing in lines 12
and 13 of Section 3.08(c) and the words "Phase I Property and Phase II Property shall be deleted
where appearing in line IS of Section 3.08(c), and shall be replaced by the following words:
"Agency Property".
4820-5437-4913.3 5
P:\Ageodas\Agmda Attachmentsl.Agnn:s-Amend 2006\06.-19-06 Amendment No_ 2 - Waterman Holdinp,llC_doc
Section 3.08(d). In Section 3.08(d) of the DDA, the words "Pledged Tax Increment"
shall be deleted where appearing therein, and shall be replaced by the words "Agency Revenues".
Further, the words "Phase I Property or the Phase II Property" shall be deleted where appearing
therein and shall be replaced by the following words: "Agency Property".
Section 3.08(e). The Buyer shall have all rights and remedies against the Agency
pursuant to the laws of the State of California and as further set forth in this Agreement and in the
Agency Revenues Promissory Note. Any failure of the Agency to remit the timely payments of the
Agency Revenues to the Buyer shall be deemed to be a default hereof for which the Buyer shall be
entitled, after delivery of notice or otherwise as set forth in the Agency Revenues Promissory Note,
to be reimbursed for all costs and expenses of the collection of any dollar amount that is then due
and payable by the Agency to the Buyer from the Agency Revenues.
14. Section 3.09. Al!encv Phase II Property Interim Site Improvements. Section
3.09 to the DDA shall be deleted.
15. Section 3.10. Developer Purchase Opportunity. Subject to the terms and
conditions set forth below, if the Agency at any time on or prior to June 19, 2009, receives a bona
fide offer acceptable to the Agency, or makes a bona fide offer acceptable to an offeree, for a
disposition of the Flood Control Channel Property, then the Developer shall have the right and
option, but not the obligation, to purchase the Flood Control Channel Property on the following
terms and conditions:
(a) The Agency shall provide the Developer with a written notice (the "Agency
Notice") which shall (i) set forth the true identity of the proposed purchaser (including the identity
of the principals of the purchaser, if known to the Agency); (ii) include a description of the Flood
Control Channel Property; (iii) include a description of all material terms of the proposed
disposition (including, without limitation, the price, earnest money, due diligence inspection period
and closing date); and (iv) offer to consummate such disposition with the Developer upon the same
terms and conditions as set forth in the Agency Notice. The Agency Notice shall have attached to it
a true, correct and complete copy of the contract of sale or other agreement that governs the rights
and obligations of the Agency and the proposed purchaser with respect to the proposed dispositions
(the "Disposition Document"). Any time periods in the Agency Notice shall be deemed extended as
necessary to allow the Developer the full thirty (30) day period following receipt of the Agency
Notice in which to decide whether to exercise the Developer's First Refusal Right.
(b) During the thirty (30) day period following actual receipt by the Developer of
the Agency Notice (the "Response Period"), the Developer shall have the right, at its expense, to
enter onto and conduct tests and investigations on the Flood Control Channel Property. The
Developer shall be responsible for any damages or injuries resulting from any entry by the
Developer onto the Flood Control Channel Property and conducting such tests and inspections. If
the Developer does not elect to purchase the Flood Control Channel Property by delivering written
notice of such election to the Agency and the check for $25,000 as a non-refundable deposit as
further specified in subsection (d) below within the Response Period, the Agency may effect a
disposition of the Flood Control Channel Property to the proposed purchaser identified in the
Agency Notice (i) at a price that is not less than ninety-five percent (95%) of the price that would
have been paid by the Developer if the Developer had elected to purchase the Flood Control
4820-5437-4913.3 6
P:\AsendIJs\Ajenda Auachments\AgnTts-Amend2006\06-19-06 Amendment No_ 2 - Waterman Holdings., u.c.doe
Channel Property pursuant to the Agency Notice, and (ii) upon other terms and conditions that are
not more favorable to the proposed purchaser than those offered to the Developer in the Agency
Notice; provided such closing occurs with the third party purchaser of the Flood Control Channel
Property no later than one hundred eighty (180) days after the expiration of the Response Period;
and provided further that if such closing to the proposed purchaser does not occur within such 180-
day period, the Agency shall again be required to comply with the this Section 3.1O(b) before it
makes any other disposition of the Flood Control Channel Property on or before the expiration of
this Developer purchase opportunity ("Developer Purchase Opportunity").
(c) If the Developer does not elect to accept the offer from the Agency with
respect to a disposition in accordance with the terms hereof, and such disposition from the Agency
is not made on the price and terms set forth in Section 3.1O(b) above (subject to the maximum one
hundred eighty (180) day closing period and other terms set forth above), Section 3.1O(b) shall
remain in full force and effect with respect to the Flood Control Channel Property until the
expiration date as provided above.
(d) If the Developer exercises the First Refusal Right by delivering written notice
of such exercise to the Agency and a check equal to $25,000 as a non-refundable deposit within the
Response Period, the Developer and the Agency shall close the purchase and sale of the Flood
Control Channel Property in accordance with the terms set forth in the Agency Notice and the
Disposition Document. If the sale to the Developer is consummated, then the $25,000 shall be
applied to the purchase price, and if the sale is not consummated for any reason whatsoever, then
the deposit shall be retained by the Agency and shall be non-refundable to the Developer.
(e) Notwithstanding any provision contained herein to the contrary, in the event:
(i) the Developer does not elect to accept the Agency's offer, (ii) the Agency sells the Flood Control
Channel Property pursuant to the terms of this Agreement to another purchaser, then the Developer
shall have no further rights as to any acquisition of the Flood Control Channel Property thereafter.
16. Section 5.01. Notices. Demands and Communications Between the Parties. In
line seven of Section 5.01 of the DDA, l.03(a) shall be deleted and replaced by the following:
"l.05(c)", and l.03(b) shall be deleted and replaced by the following: "l.05(b)".
17. Section 5.05. Enforced Delav: Extension of Time of Performance. Section
5.05(a) and (c) of the DDA shall be amended as follows:
Section 5.05(a). The last sentence in Section 5.05(a) shall be deleted.
Section 5.05(c). In line nine in Section 5.05(c), the word "Agency" shall be inserted
immediately preceding the word "Property".
18. Exhibit Headines. The following Exhibit headings shall be modified as set forth
below together with the including of the additional Exhibits as provided herein.
Exhibit "B". Exhibit "B" shall be amended as follows together with the inclusion of
a new Site Map for the Agency Property:
4820-5437-4913.3 7
P:\AiCndU\Agenda AttacIunents\AgmU-Ammd 2006\06..19..06 A~ No_ 2. WatcnrBn Holdings, LLC.doc
"PARCEL MAP FOR THE AGENCY PROPERTY AND FLOOD CONTROL
CHANNEL PROPERTY"
Exhibit "C". Exhibit "e" shall be amended as follows:
"LEGAL DESCRIPTION OF THE FLOOD CONTROL CHANNEL PROPERTY"
Exhibit "E". Exhibit "E" shall be amended with the deletion of the text as presently
set forth therein and the substation of the following text:
"The Improvements on the Agency Property shall consist of an approximately 2-story 45,000
square foot office building of concrete tilt-up or concrete block construction with sufficient parking
spaces to comply with both City ordinances and the County Lease Agreement. The building will
include full tenant improvements as required for the County Lease Agreement for use by the County
of San Bernardino, Transitional Assistance Department, and the tenant.
Exhibit "F". A new Exhibit "F" shall be attached to the Agreement and shall be
entitled as follows:
EXHIBIT "F"
"AGENCY REVENUES PROMISSORY NOTE"
19. Modification to First Amendment to the Al!reement. Section 2, Section 3,
Section 4 and Section 5 of the First Amendment shall be deleted in their entirety.
20. Lel!al Effect. The DDA and the First Amendment shall only be amended to the
extent set forth herein. All other terms, covenants and/or conditions of the DDA and the First
Amendment, unless specifically amended or modified by the terms, covenants and/or conditions of
this Second Amendment, shall remain unmodified and in full force and effect. In the event of any
inconsistency, contraction and/or ambiguity between the terms, covenants and conditions of this
Second Amendment and the DDA and/or the First Amendment, the inconsistency, contraction
and/or ambiguity shall be resolved in favor of the terms, covenants and conditions set forth in this
Second Amendment.
21. Defined Terms. Terms not otherwise defined or redefined III this Second
Amendment shall have the meanings provided for in the DDA.
22. Effective Date. This Second Amendment shall take effect from and after the date of
final approval hereof by the governing body of the Agency at a duly held public meeting and after
the execution ofthis Second Amendment by the Agency and the Buyer.
/1/
//1
/1/
4820-5437-4913.3 8
P:\AgmdulA&enda Attaclamcnts\ApTrU-Amcnd 2()()61D6..19-06 Amendment No_ 2 - Waterman Holdinp. LLC_OOc
IN WITNESS WHEREOF, the parties have signed this Amendment as of the date first set
forth above.
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
Dated:
By:
Maggie Pacheco, Executive Director
Approved as to Form and
Legal Content:
c/~
Agency Counse
WATERMAN HOLDINGS, LLC
Dated:
By:
Jian Torkan
4820-54374913.3 9
P:\Agendas\Agenda Auachrocnts\Agmu-Amend 2006\06-19-06 Amcndmenl No_ 2 - WaJcrman Holdings, LLC.OOc
IN WITNESS WHEREOF, the parties have signed this Amendment as of the date first set
forth above.
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
Dated:
By:
Maggie Pacheco, Executive Director
Approved as to Form and
Legal Content:
D~
Agency Counsel
WATERMAN HOLDINGS, LLC
Dated:
By:
Jian Torkan
4820-54374913.3 9
P:\Ageodas\Agenda AnacbmenlS\Agrmls-Amend 2006\06.-19-06 Amendment No.2 - Waterman Holdings. LLC-doe
IN WITNESS WHEREOF, the parties have signed this Amendment as of the date first set
forth above.
REDEVELOPMENT AGENCY OF THE
CITY OF SAN BERNARDINO
Dated:
By:
Maggie Pacheco, Executive Director
Approved as to Form and
Legal Content:
~~
Agency Couns I
WATERMAN HOLDINGS, LLC
Dated:
By:
Jian Torkan
4820-5437-49\3.3 9
P:\Agendas\Agenda Anachments\Agmts-Amend 2006\06-19-06 Amendment No.2. Waterman Holdings. l.l.C.00c
EXHIBIT <<A"
LEGAL DESCRIPTION OF THE AGENCY PROPERTY
APN: 0135-191-11
PARCEL 1 OF PARCEL MAP 7140, IN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN OF MAP FILED IN BOOK 69 OF
PARCEL MAPS, PAGE 1 AND 2, RECORDS OF SAID COUNTY
4820-5437-4913.3 10
P:\Agenda5\Agenda Anach1l1ClllS\AgmU.Amend 2006\06-19-06 Amendment No.2 - Wucnnan Holdinp. LLC.doc
EXHIBIT "B"
PARCEL MAP FOR THE AGENCY PROPERTY AND FLOOD CONTROL
CHANNEL PROPERTY
4820-5437-4913.3 11
P:\Agendas\Agcnda Anacbments\Agrnu-Amend 2006\06-19-06 Amendment No.2 - Waterman Holdings, LLC.OOc
en
I
'"
~
<>
"
~
'"
~
"
"
~
~
",,,
~
,,~
,,-<
"'~
-0
0",
N
~K~
._ 00
00-....
Q)
o
a
CL
-......
.........
::.........
oU"l
c:
Q)
N=
o:;i
:;::
c:
CL
-~
~.
~o
<.
~~
-.
o.
_0
.<
~:
~.
><
H
<<:
'"
""'
o
<<:
""'
><
U
Z
'"
'"
<tl@
.
7lllE
@f)~ ~
~=
=
,...,
~
U
,...,
o
<<:
H
Z
0><
UH
<<:
"''''
0,,",
00
,...,<<:
""""'
- - --HMHYll---:;- --
- I
,
, - - cllHl}H- - - - - - - - - - -- - - -
I "
,
I
1'/'11
:r;
:r
r
.
~ . ~
am_=-_m_J:L..::a aJ
1:1 0 I
. N
______anmJ:L____a__ nnJ
~ 1:1 .,.. I
____c________J:L_____________J
~ I:' ~ I
_____________J:L_____________J
. 1:1 ~ 1
__ ____=-_____J;L____"'_______J
~ 1:1 ~ I
_.:@-_:__J:La _ ~ _ m___J
~ N_ -: 1:1 II) I
. N
_ _ _ _ _u__ ___J:L mn aa ___J
- 1:1 ~ I
_a_u__J:Lam _ _ _ __nJ
2 1:1 ~ 1
n n m)L _ _ _ _~ _ _ _ _ _ _ J
1:1:: I
mmmmJ:L nJ
I:' I
__ _ -____.J!L m" a a___J
'""' I:' ~ I
'"
" @ ~ ;;; I
L_ m n m J
@~ II I
L_u::___ ___ _J
@ . II ~ 1
L:::~@aJ
@ ~ II ~.3 - ,
~
L____m_____J
I @ II I
'" N ~
f Lama____J
, @- II ,
IU'lI ~
I "n
" allYlY! lllll
r - - - tlffiS- - -- -. - - - - - -
~
__J:L----:---
'" 1;1 :;:
___________J:L_____________
~ 1:1 N
am _ n_nJ:L __ _n__m a
~ 1:1 ~
___________J:L-------------
"
::i ~. 1:1 ,..,
~_@__-:--J:L---::___ ..
~ - ,..,::.: ':1 ...
Q. - I ""
___________J:L-------------
~ 1;1 :!::
____nn___ J:L mom _ _ m_
. - 1:1 ~
~~____m_J:L
; s 1;1
~
N
tl'&U,
1:1 ~
_ on _ _ a a _ J:L _ _ _.. _ __ _ _ __
CQ 1:1 ~
- HMuuJ:L
I:' "
mm_Am_::_
1 I:';;;
L :@__:_J:L____
I .f. :: I:' .....
~ , ~
L _~ _ ~~-~~~______J:L~_ _ ___
I I:':;:
L___ ___m__J:L_mmaa_
I 1:1 ~
Ln__ _ma_J:L______m___
, 1;1 ~
L__m Oa____R_aaa___a_
I III ~
, ~l-U'
@
L~
~~
:>t~
I
H-1I1
~
c
~
"'0
-0
~
0..,,0
"0"
:::Eo....;;
~
~'" "
-.....I")C
0- ~
~<> ~
~ '"
O~
~o"
~o"
-<"''''
1
:t
X
T
@
,
^;'
I -
...
T ~
~! - I> I
;,;
~
;;:
::
~
"
:;:
~
.
~
.
~
EXHIBIT "e"
LEGAL DESCRIPTION OF THE FLOOD CONTROL CHANNEL PROPERTY
APN: 0135-191-15
PARCEL 9 OF PARCEL MAP 7140, IN THE CITY OF SAN BERNARDINO, COUNTY OF
SAN BERNARDINO, STATE OF CALIFORNIA, AS SHOWN OF MAP FILED IN BOOK 69 OF
PARCEL MAPS, PAGES 1 AND 2, RECORDS OF SAID COUNTY
4820-5437-4913.3 12
P:\Agendall\Agenda Attathmcnts\Agnrts-Amend 2006\06-19-06 Amendment NO.2. Waterman Holdinp. LLC.doc
EXHIBIT "D"
QUITCLAIM DEED
4820-5437-4913.3 13
P:\AgendaslAgenda Attai;hmcnts\Agnm-Amend 2006\06-19-06 Amendment No.2 - Watc;rman Holdings, LLC.doc
RECORDING REQUESTED BY:
When Recorded Mail Document
and Tax Statement To:
SPACE ABOVE THIS LINE FOR RECORDER'S USE
QUITCLAIM DEED
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
FOR A VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, the
Redevelopment Agency of the City of San Bernardino, a public body corporate and politic (the
"Agency") hereby remises, releases and quitclaims to
and (collectively, the "Buyer") the following described real property in
the City of San Bernardino, County of San Bernardino, State of California (the "Property"):
PARCEL: APN:
This conveyance is further subject to the following community redevelopment covenants:
I. Buyer covenants by and for itself, its heirs, executors, administrators and assigns,
and all persons claiming under or through them, that there will be no discrimination
against or segregation of any person or group of persons on account of race, color, creed,
religion, sex, age, marital status, national origin or ancestry in the sale, lease, sublease,
transfer, use, occupancy, tenure or enjoyment of the Property, nor will Buyer or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees or vendees in or on the Property.
4833-8544-2304.1 1
P:\Agendas\Agenda Attadunems\Exhibiu\2006\06-19-06 Watcmlllll Holdings, u.c - Quitclaimbecd (Exhibil D).We
2. All deeds, leases or contracts made relative to the Property must contain the
following nondiscrimination clauses:
(a) In deeds: "The grantee herein covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming under or through
them, that there shall be no discrimination against or segregation of any person or
group of persons on account of race, color, creed, religion, sex, age, marital status,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the land herein conveyed, nor shall the grantee, or any
person claiming under or through the grantee, establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, locations, number, use or occupancy of tenants, lessees, subtenants,
sub lessees or vendees in or on the land herein conveyed. The foregoing covenants
shall run with the land."
(b) In leases: "The lessee herein covenants by and for itself, its heirs,
executors, administrators and assigns, and all persons claiming under or through
them, and this lease is made and accepted upon and subject to the following
conditions:
That there shall be no discrimination against or segregation of any person
or group of persons on account of race, color, creed, religion, sex, age, marital
status, national origin or ancestry in the leasing, subleasing, transferring, use,
occupancy, tenure or enjoyment of the land herein leased, nor shall the lessee
itself, or any person claiming under or through it, establish or permit any such
practice or practices of discrimination or segregation with reference to the
selection, location, number, use or occupancy, of tenants, lessees, subtenants,
sub lessees or vendees in the land herein leased."
(c) In contracts: "There shall be no discrimination against or segregation of
any person or group of persons on account of race, color, creed, religion, sex, age,
marital status, national origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the land, nor shall the transferee itself, or any
person claiming under or through it, establish or permit any such practice or
practices of discrimination or segregation with reference to the selection, location,
number, use or occupancy oftenants, lessees, subtenants, sublessees or vendees of
the land.
3. A breach of any of the covenants, conditions or restrictions herein shall not defeat
nor render invalid the lien or charge of any mortgage or deed of trust made in good faith and for
value covering the Property or any part thereof; however, such covenants, conditions and
restrictions shall be binding upon and effective against any new owner of the Property, or any
portion thereof, whose title thereto is acquired by foreclosure, trustee's sale or otherwise. No
mortgagee shall be subject to any reimbursement obligation which accrues prior to the date such
mortgagee takes title to the Property.
4833-8544-2304.1 ')
P:\AgendaslAgenda Attac/uncnts\Exhibits\2006\06-I9-06 Watennan Holdings. LLC - Quitclaim'"beed (Exhibit D).dlx:
4. Buyer covenants for itself, its successors and assigns that, unless otherwise
consented to in writing by the Agency, in the event the Property, or any portion thereof is used
by an owner that is partially or wholly exempt from the payment of ad valorem property taxes
pertinent to the Property, or portion thereof, and does not make the tax payment for any year
based on that exemption, then in such event the owner of the Property, shall pay the Agency a
fee in lieu of payment of property taxes each year thereafter in an amount equal to the applicable
percentage of the full cash value as determined in accordance with the State Construction Article
XIIIA and other state law for the Property, or portion thereof which is subject to the exemption,
unless the Agency consents otherwise in writing. In the event that the in-lieu payment
referenced above is due by the owner for any year, then such amount shall be paid to the Agency
for the tax year within 90 calendar days following transmittal of notice of invoice by the Agency
for payment of the in-lieu amount addressed to the owner of the Property as disclosed in the
property tax records of the County of San Bernardino.
5. Buyer for itself, its successors and assigns hereby covenants and agrees that:
(a) The areas of the Property which are subject to public view (including all
existing improvements, paving, walkways, landscaping, exterior signage and
ornamentation) shall be maintained in good repair and a neat, clean and orderly
condition, ordinary wear and tear excepted. In the event that at any time within
ten (10) years following the date of recordation of this Quitclaim Deed there is an
occurrence of an adverse condition on any area of the Property which is subject to
public view in contravention of the general maintenance standard described
above, (a "Maintenance Deficiency") then the Agency shall notify the Buyer in
writing of the Maintenance Deficiency and give the Buyer thirty (30) days from
receipt of such notice to cure the Maintenance Deficiency as identified in the
notice. In the event the Buyer fails to cure or commence to cure the Maintenance
Deficiency within the time allowed, the Agency may conduct a public hearing
following transmittal of written notice thereof to the Buyer ten (10) days prior to
the scheduled date of such public hearing in order to verify whether a
Maintenance Deficiency exists and whether the Buyer has failed to comply with
the provisions of this Section 5. If upon the conclusion of a public hearing, the
Agency makes a finding that a Maintenance Deficiency exists and that there
appears to be non-compliance with the general maintenance standard, described
above, thereafter the Agency shall have the right to enter the Property and
perform all acts necessary to cure the Maintenance Deficiency, or to take other
action at law or in equity which the Agency may then have to accomplish the
abatement of the Maintenance Deficiency. Any sum expended by the Agency for
the abatement of a Maintenance Deficiency on the Property authorized by this
Section 5 shall become a lien on the Property. If the amount of the lien is not paid
within thirty (30) days after written demand for payment by the Agency to the
Buyer, the Agency shall have the right to enforce the lien in the manner as
provided in this Section 5.
4833-8544-2304.\ ~
P:\Agendas\Agcnda Attac/unents\ElIhibits\2006\06-19-06 Waterman Holdings, u.c - Quitclaimi>ecd (Exhibit D).doc
(b) The parties hereto further mutually understand and agree that the rights
conferred upon the Agency under this Section 5 expressly include the power to
establish and enforce a lien or other encumbrance against the Property, or any
portion thereof, in the manner provided under Civil Code Sections 2924, 2924b
and 2924c in an amount reasonably necessary to restore the Property to the
maintenance standard required under this Section 5, including the reasonable
attorneys' fees and costs of the Agency associated with the abatement of the
Maintenance Deficiency. For the purposes of the preceding sentence the words
"reasonable attorneys' fees and costs of the Agency" mean and include the
salaries, benefits and costs of the City Attorney and the lawyers employed in the
Office of the City Attorney. The provisions of this Section 5, shall be a covenant
running with the land for a term of ten (10) years following the date of
recordation of this Quitclaim Deed, and shall be enforceable by the Agency.
Nothing in the foregoing provisions of this Section 5 shall be deemed to preclude
the Buyer from making any alteration, addition, or other change to any structure
or improvement or landscaping on the Property, provided that any such changes
comply with applicable zoning and building regulations of the City of San
Bernardino.
6. Invalidation of any provision contained herein by judgment of court or otherwise
shall in no way affect any of the other provisions, which shall remain in full force and effect.
7. A breach or a violation by an owner of the Property, or a portion thereof, of a
covenant set forth in this Quitclaim Deed shall not subject such owner's predecessor in interest
in the Property to any liability for such breach or violation. A breach by a tenant on the Property
of Section I or Section 2 shall not subject such tenant's landlord to liability for the breach by
such tenant.
The Agency shall have the right to enforce the covenants, conditions and restrictions contained
in this Quitclaim Deed notwithstanding any transfer of the Property or any portion thereof.
4833.8544.2304.1 .1
P:\Agendat\Agenda Attachmcnts\Exhibits\2006\06-l9-06 WaICm1a/I Holdings. LLC - Quitclaim beed (Exhibit D).doc
IN WITNESS WHEREOF, the Redevelopment Agency of the City of San
Bernardino has caused this Quitclaim Deed to be executed by its authorized officer as of the date
indicated next to the signature, below.
Redevelopment Agency of the City of San
Bernardino
Date:
By:
Maggie Pacheco, Executive Director
[NOTARY ACKNOWLEDGMENT
ATTACHED]
APPROVED AS TO FORM:
Agency Counsel
4833-8544-2304.1 ~
P:IAJcndas\Agenda Attachmmts\Exhibits\2006\06-19..06 WII1ermiJfl Holdings, LLC - Quitclaim1>eed (Emibit D)_doc
ACCEPTANCE OF QUITCLAIM DEED BY
BUYER
The undersigned hereby acknowledges and accepts the delivery of the subject property
from the Redevelopment Agency of the City of San Bernardino.
Date:
Date:
(NOTARY ACKNOWLEDGMENT
ATTACHED]
4833-8544-2304.1 h
P:\Agendasl.Agenda Attachments\Exhibitsll()()6\()6.-19-06 Waterman Hoklings, LLC - Quitc\aim"6ced (Exhibit D).doc
EXHIBIT "E"
The Improvements on the Agency Property shall consist of an approximately 2-story 45,000 square
foot office building of concrete tilt-up or concrete block construction with sufficient parking spaces
to comply with both City ordinances and the County Lease Agreement. The building will include
full tenant improvements as required for the County Lease Agreement for use by the County of San
Bernardino, Transitional Assistance Department, and the tenant.
4820-5437-4913.3 14
P:\Agendas\Agcnda Attachmcnts\Agnw-AmtfId 2006\06-19...()6 Amendment No_ 2 - Waterman Holdings, llC.doc
EXHIBIT "F"
AGENCY REVENUES PROMISSORY NOTE
4820-54374913.3 15
P:l.Agendas\Agenda Anachments\Agrrrts-Amcnd 2006\06-19-06 Amendment No_ 2 - Watennan Holdings, lLC.doc
AGENCY REVENUES PROMISSORY NOTE
Date: June 19,2006
Los Angeles, California
The undersigned, the REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO,
a public body, corporate and politic (the "Agency"), promises to pay, and pledges to
WATERMAN HOLDINGS, LLC, a California limited liability company, or order (the "Buyer"),
one or more principal advances of a portion of the Agency Revenues (as that term is defined
below) due and owing by the Agency to the Buyer in accordance with and pursuant to the terms,
covenants and conditions of this Agency Revenues Promissory Note (the "Note") and the
Agreement (as that term is defined in this Note), together with interest on the unpaid principal
balance thereof, at the Interest Rate (as that term is defined in this Note), in lawful money of the
United States, with the then outstanding principal balance thereof, all accrued and unpaid
interest, late charges, fees and all other amounts due and owing under the Note being due and
payable by the Agency to the Buyer on the Maturity Date (as defined in this Note). The
principal, interest, late charges, fees and all other amounts due under the Note are payable by the
Agency to the Buyer at 4221 Wilshire Blvd., Suite 240, Los Angeles, California 90010.
This Note shall be subject to the following terms, covenants and conditions:
1. Definitions. The initially capitalized terms defined herein shall have the following
meanings where appearing in this Note. Otherwise, any initially capitalized term (not defined
herein) shall have the meaning provided for in the Second Amendment (as defined below).
1.1 Al!:reement. The "Agreement" shall mean the Original Agreement (as defined
below), as amended by the First Amendment (as defined below), and as further amended by the
Second Amendment (as defined below), as executed by and between the Agency and the Buyer.
1.2 Certificate of Occupancy. The "Certificate of Occupancy" shall mean the
Certificate of Occupancy issued by the City to the Buyer in connection with the development,
construction and installation of the improvements at the Agency Property (as that term is defined
in the Agreement).
1.3 City. The "City" shall mean the City of San Bernardino.
1.4 County. The "County" shall mean San Bernardino County.
1.5 First Amendment. The "First Amendment" shall mean that certain First
Amendment to the Original Agreement, dated June 20, 2005, as executed by and between the
Agency and the Buyer.
4838-3335-1169.1 1 of 5
P:\Agendas\Agenda Attachments\Edlibits\2006\06-19-06 WlUermao Holdings, LLC - Agency Revenues Promissory Note (EJdJibit F).doc
1.6 Fiscal Year. The "Fiscal Year" shall mean any given fiscal year for the County.
1.7 Initial Fiscal Year. The "Initial Fiscal Year" shall mean the first (1st) Fiscal
Year following the Fiscal Year in which the City issued the Certificate of Occupation.
1.8 Interest Rate. The "Interest Rate" shall mean five percent (5%) per annum.
1.9 Late Charl!e. The "Late Charge" shall mean three percent (3%) on the payment
due and owing by the Agency to the Buyer under the Note (subject to any applicable cure
period(s) in the Note and/or the Agreement).
1.10 Maturity Date. The "Maturity Date" shall mean the first business day following
the expiration of the Term.
1.11 Oril!inaI Al!reement. The "Original Agreement" shall mean that certain 2004
Disposition and Development Agreement, dated December 6, 2004, as executed by and between
the Agency and the Buyer.
1.12 Principal. The "Principal" shall mean one or more principal advances, in the
aggregate, of a portion of the Agency Revenues due and owing by the Agency to the Buyer in
accordance with and pursuant to the terms, covenants and conditions of this Note and the
Agreement, as increased, decreased and adjusted from time to time.
1.13 Secoud Amendment. The "Second Amendment" shall mean that certain
Amendment No.2 To The 2004 Disposition and Development Agreement Waterman Holdings,
LLC (4th and Waterman Property), dated June 19,2006, as executed by and between the Agency
and the Buyer.
1.14 Term. The "Term" shall mean the term of this Note commencing on the date of
execution of the Note and continuing thereafter until the end of the tenth (lOth) Fiscal Year (with
the Initial Fiscal Year being the first Fiscal Year of this ten (lO)-year Fiscal Year period).
2. Interest. Interest on the unpaid Principal under this Note will accrue at the fixed annual
Interest Rate until paid in full by the Agency to the Buyer. Interest shall be computed based on a
365-day year and the actual number of days elapsed.
3. Payment Of Principal. Interest and Late Charl!e.
(a) The Agency hereby pledges to the Buyer certain revenues of the Agency
attributable to sources of funds that are legally available to the Agency in each fiscal year during
the term of such pledge (the "Agency Revenues") based upon the Index as hereinafter defined.
The Index for the calculation of the dollar amount of the Agency Revenues to be remitted in each
fiscal year to the Buyer shall be on the basis of (A) sixty percent (60%), multiplied by (B) the one
percent (1 %) general property taxes, exclusive of any override taxes, special taxes, ad valorem
taxes for general obligation bonded indebtedness or other special assessments, that are actually
4838-3335-1169.1 2 of 5
P:\Agcndas\AaCftda Attachncnt:5\Exhibils\2006\()6..19..Q6 Watennan Holdings. tiC - Agency Rcvemw:s Promissory Note (EKhibit F).doc
paid by the Buyer attributable to the development to occur on the Agency Property pursuant to
this Agreement (such 60% of the 1 % of the real property taxes as actually paid by the Buyer to
the County is herein referred to as the "Index
(b) The payments of the Agency Revenues shall commence in the fiscal year next
succeeding the fiscal year in which the Buyer receives a Certificate of Occupancy for the
development of the Agency Property and continuing for a total of ten (10) fiscal years thereafter
with the initial fiscal year commencing as of the fiscal year following the fiscal year in which a
Certificate of Occupancy is so issued by the City for the development of the Agency Property.
Such payments shall be remitted by the Agency to the Buyer within thirty (30) calendar days after
the Buyer has provided written documentation to the Agency that the applicable property taxes
on the Agency Property have been duly paid as of each December 10 and April 10 property tax
installment. The Buyer shall provide to the Agency a copy of the property tax bill and a copy of
the cancelled check illustrating payment of the appropriate real property tax amount. The
Agency shall within thirty (30) calendar days after receipt of the documentation required by this
Section, remit the appropriate payment of the Agency Revenues based upon the Index to the
Buyer. Any failure of the Agency to dispute in writing adequacy of the documentation as
submitted by the Buyer within the applicable 30-day period of time, shall not excuse the Agency
from remitting the requested payment. The Agency shall be obligated to provide written notice
to the Buyer within said 30-day period of time as to the inadequacy of any documentation
provide by the Buyer to the Agency. Failure of the Agency to remit the requested payment ofthe
Agency Revenues within ten (10) calendar days after the expiration of the initial 30-day period
for review of the documentation as submitted, unless notice has been provided by the Agency to
the Buyer in the manner as provided above, shall subject the Agency to a three percent (3%) late
charge on the amount owed and interest at the rate of five percent (5%) per annum calculated on
the number of days from the due date of the applicable payment until such amount has been paid
to the Buyer.
(c) The Buyer shall have all rights and remedies against the Agency pursuant to the
laws of the State of California and as further set forth in this Agreement and in the Note. Any
failure of the Agency to remit the timely payments of the Agency Revenues to the Buyer shall be
deemed to be a default hereof for which the Buyer shall be entitled, after delivery of notice or
otherwise as set forth in the Note, to be reimbursed for all costs and expenses of the collection of
any dollar amount that is then due and payable by the Agency to the Buyer from the Agency
Revenues.
4. Prepavment. This Note may be prepaid by the Agency, at any time, in whole or in part,
without premium or penalty, as long as any principal prepayment is accompanied by a payment
of interest accrued to the date of prepayment on the amount prepaid.
5. Application of Payments. Each payment under this Note shall be credited first to any
late charges and fees (including, without limitation, attorneys' fees and costs), all accrued and
unpaid interest, and then to principal then due and payable under the Note.
4838-3335-1169.1 3 of 5
P:\Agendas\Agend.aAttac:hnaJls\EAhibits\20061il6-19.06 Walel'mIlII Holdings.llC oAlc:ncy ~ PromissoryNote(Exhibd F).doc
6. Maturity Date. On the Maturity Date, the Agency shall pay to the Buyer the then
outstanding Principal balance, all accrued and unpaid interest, late charges, fees and all other
amounts (including, without limitation, attorneys' fees and costs) then due and payable under the
Note.
7. Condition Precedent. The Agency shall have no duty or obligation to execute, deliver or
perform under this Note until all conditions precedent provided for in this Note and the
Agreement have been fully performed and satisfied by or for the Buyer (or have been expressly
waived in writing by the Agency).
8. Notice. Any notice required to be provided in this Note shall be given in writing and
shall be sent (i) for personal delivery by a delivery service that provides a record of the date of
delivery, the individual to whom delivery was made, and the address where delivery was made;
(ii) by first-class certified United States mail, postage prepaid, return receipt requested; or (iii) by
a nationally recognized overnight courier service, marked for next day business delivery. All
notices shall be addressed to the party to whom such notice is to be given at the address stated
below or to such other address as a party may designate by written notice to the other. All
notices shall be deemed effective on the earliest of (a) actual receipt; (b) rejection of delivery; (c)
if sent by certified mail, the third day on which regular United States mail delivery service is
provided after the day of mailing or, if sent by overnight delivery service, on the next day on
which such service makes next-business day deliveries after the day of sending. The address for
the Agency and for the Buyer shall be as follows, subject to any written notice of a change of
address by one party to the other:
Address For the Agency:
Redevelopment Agency of the City of San Bernardino
Attention: Executive Director
201 North "E" Street, Suite 301
San Bernardino, California 92401
Address For the Buyer:
Waterman Holdings, LLC
Attention: Jian Torkan
4221 Wilshire Boulevard, Suite 240
Los Angeles, California 90010
9. Default. Subject to Section 7 of this Note, and any applicable cure period(s) provided for
in this Note and/or in the Agreement, a default shall occur whenever the Agency fails to pay to
Buyer any sum due under this Note when it becomes due and payable, or (b) any breach of any
other promise or obligation in this Note, the Agreement or any other instrument, document
and/or agreement, now or hereafter, evidencing, securing, guaranteeing, hypothecating, relating
to, or in connection with, the transaction contemplated in the Agreement and/or this Note
(collectively, a "Default"). Upon the occurrence of a Default, Buyer may, at its option, declare
this Note (including, without limitation, all principal, all accrued and unpaid interest, late
charges, attorneys' fees and costs) to be immediately due and payable, regardless of its Maturity
Date, subject to the cure periods provided for in the Note and/or the Agreement (collectively, the
"Default Payment Amount"), and the Agency shall immediately pay to the Buyer the Default
Payment Amount.
4838-3335-1169.1 4 of 5
P:\Agendas\AgendaAttaclunenu\Exhibits\2006\06-19-06 Walcrmln Ho!dingl, u..c - Agency RevenllCS Promissory Note(Exhibil: f).doc
10. Unsecured Promissory Note. This Note is unsecured, and is not secured by any real or
personal property of any nature whatsoever.
11 Modification. This Note may not be modified, amended, waived or extended, changed,
discharged or terminated orally or by any act on the part of the Agency or of the Buyer, but only
by an agreement in writing signed by the Agency and the Buyer.
12. Headine:s. The headings of this Note are for purposes of reference only and shall not
limit or otherwise affect the meaning thereof.
13. Interpretation. Common nouns and pronouns shall be deemed to refer to the masculine,
feminine, neuter, singular and plural, as the identity of the person or entity may in the context
reqUIre.
14. Governine: Law. This Note shall be governed by and construed in accordance with the
laws of the State of California.
IN WITNESS WHEREOF, the Agency has executed this Agency Revenues Promissory
Note as of the date first written above.
AGENCY
Redevelopment Agency of the City of San Bernardino
By:
Maggie Pacheco, Executive Director
4838-3335-1169.1 5 of 5
P:\Agendas~Attachlncots\Exhilits\2006\06-19..()6 WIterJrW\ HokIings, u.c. Agency Reverwes Promissory Note (Exhibit F).doc