HomeMy WebLinkAboutR22-Economic Development Agency
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM: Gary Van Osdel,
Executive Director
SUBJECT:
OR' "" " I ~ L
;; Vi i ,.. rl
AMENDMENTS TO STATE OFFICE
BUILDING AGREEMENTS (pHASE II)
DATE: March 2S, 2001
SvnoDsis of Previous Commission/Council/Committee Action(s):
January 4, 1996: Construction Project Management, Operating and Development Agreement (Caltrans Office Building
and Parking facility) executed by and between the Redevelopment Agency, the San Bernardino Joint Powers Financing
Authority, and the Department of General Services and Department of Transportation of the State of California.
June II, 1999: Exchange Agreement (Phase II Site/9th and Del Rosa) by and between the Redevelopment Agency and
the Department of General Services of the State of California.
August 23, 2000: Amendment to Exchange Agreement by and between the Redevelopment Agency and the Department
of General Services of the State of California.
December IS, 2000: The Community Development Commission authorized extension of the closing date in the State
Exchange Agreement to match the closing of the 303 Third Street transaction between the State and 303 LLC.
February 22, 2001: The Redevelopment Committee recommended a five year extension of the State's construction
obligation for the second office building.
March 5, 200 I: Community Development Commission continued item at request of staff.
Recommended Motion(s):
(Community Development Commission)
MOTION: That the Community Development Commission approve the form of the attached Letter Agreement to
be executed by the Chairperson on behalf of the Agency to amend the 1996 Construction Management
Agreement as between the Department of General Services and the Agency to delete the requirement
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Contact Person(s): Gary Van OsdeVJohn Hoeger
Project Area(s) Central City and Central City North
Phone: 663-1044
Ward(s): First
Supporting Data Attached: I&J Staff Report 0 Resolution( s) I&J Agreement( s )/Contract( s) I&J Map( s) 0 LetterlMemo
FUNDING REQUIREMENTS Amount: $ None
Source: N/ A
SIGNATURE:
N/A
Commission/Council Notes:
GVO:JBH:lag:04-16-01 DGS Agreement
COMMISSION MEETING AGENDA
Meeting Date: 04/02/2000
Agenda Item Number: R ;I.),
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
AMENDMENTS TO STATE OFFICE BUILDING AGREEMENTS (PHASE III
This item is to amend the Agency's Construction Management Agreement with the State of
California to delete the requirement that construction of its Phase II building begin within 180
days after the transfer of title to the Phase II Site from the Agency to the State. This deletion will
allow the proceeds of the State's sale of its 303 Third Street building to be released to the
Agency without triggering an infeasible construction requirement for Phase II.
BACKGROUND
When 303LLC purchases the 303 Third Street building from the State of California, it will
trigger certain performance obligations in the Construction Management Agreement for the State
Office buildings at Fourth and E Streets. Consummating the 303 Third Street purchase will cause
funds to be paid from 303LLC to the State that will then be released to the Agency to complete
the State's purchase of the Phase II Site adjacent to the Caltrans Building on Fourth and E
Streets. Title for the Phase II Site will be transferred to the State.
The Construction Management Agreement requires the State to begin construction of a 195,000
square foot six-story office building within 180 days of transfer of the Phase II Site. Another
provision gives the Agency a right to revert (reacquire) the parcel upon payment of $ 1,770,500 if
the State fails to build the second office tower providing the Agency has an alternative use for
the Phase II Site.
The State initially requested a deferral of the time period within which the State was required to
start construction of the second State Office Building, and the Redevelopment Committee
discussed this request on Thursday, February 22, 2001. It recommended that an extension of five
years be granted to the State. Following the meeting, EDA staff had further discussions with the
staff of the State's Department of General Services.
CURRENT ISSUE
The State does not currently have a sufficient number of employees in the San Bernardino area to
warrant construction of the second building. Even if it did, it would take at least five years to
process the necessary legislation and obtain funding authority for the project. At such time in the
future as there are enough State employees to warrant the construction of the second office
building, there may not be enough to justify a building of 195,000 square feet as the Construction
Management Agreement currently requires.
GYO:JBH:lag:04-16-01 DGS Agreement
COMMISSION MEETING AGENDA
Meeting Date: 04/02/2000
Agenda Item Number: A.2J-
Economic Development Agency Staff Report
State Office Building Agreement Phase II
March 28, 2001
Page Number -2-
Due to these uncertainties and the long time frames involved, State staff is requesting an
indefinite extension in the construction requirement and an elimination of the reverter clause as
conditions to close escrow on the 303 Third Street transaction.
The attached Letter Agreement will amend the Construction Management Agreement to
eliminate the reverter and the obligation of the State to commence construction on the second
building.
FISCAL IMPACT
This action is for a change in performance and does not change the financial terms of the
transactions. Closing the 303 Third Street building will result in payments to the Agency of
approximately $750,000. This will complete the payment for the Phase II Site (which originally
totaled $2,681,500). Caltrans will have $560,367 left owing on the Phase I Site (which originally
totaled 3,835,365).
RECOMMENDATION
Based upon the foregoing, staff recommends that the Community Development Commission
approve the form of the attached Letter Agreement to be executed by the Chairperson on behalf
of the Agency to amend the 1996 Construction Management Agreement as between the
Department of General Services and the Agency to delete the requirement for the construction of
the Phase II State 0 Ice Building.
GVO:JBH:lag:04-16-01 DGS Agreement
COMMISSION MEETING AGENDA
Meeting Date: 04/02/2000
Agenda Item Number: Il~
I
April 2, 2001
Mr.
Department of General Services
State of California
Street
Sacramento, California 9
Re: Deletion of Obligations as to
the Phase II Site - San
Bernardino State Office
Project; Continuing DGS
Property Maintenance
Obligations
Dear Mr.
This Letter Agreement is executed by and between the
Department of General Services of the State of California ("DGS")
and the Redevelopment Agency of the City of San Bernardino (the
"Agency") with respect to certain provisions contained in the
"Construction Project Management, Operating and Development
Agreement (Caltrans Office Building and Parking Facility)" dated
January 4, 1996 (the "Construction Management Agreement"). DGS
and the Agency have also entered into that certain Exchange
Agreement dated as of May 21, 1999, as amended (the "Exchange
Agreement"), with respect to the transfer of title of the Phase
II Site from the Agency to DGS.
The Community Development Commission of the City of San
Bernardino acting as the governing body of the Agency (the
"Commission") has duly authorized the execution and delivery of
this Letter Agreement which is intended to modify the
Construction Management Agreement in the manner as hereinafter
set forth but solely as between the Agency and DGS and not as to
the other parties thereto.
DGS and the Agency mutually agree that on and after (i) the
date of the sale by DGS of the former State Office Building
located at 303 East Third Street, San Bernardino, to a party
acceptable to the Agency, and (ii) the transfer of title from the
Page 1
Agency to DGS of the Phase II Site as referred to in the
Construction Management Agreement and the Exchange Agreement, all
provisions of the Construction Management Agreement, including
but not limited to, Section 3, Section 4(b), (c), (d), (e) and
(f), Section 6(c) (1) and (2) and (d) and Section 7, which refer
to the Phase II Site, shall be deemed to be deleted in their
entirety and shall be of no further force and effect as between
the Agency and DGS. The parties recognize that title to the
Phase II Site has been or shall hereafter be transferred from the
Agency to DGS as further provided in the Exchange Agreement.
Notwithstanding the provisions contained above as to the
deletion of all references in the Construction Management
Agreement to the Phase II Site, as provided in Section 3 of the
Construction Management Agreement and as modified by this Letter
Agreement, DGS shall continue to have the obligation to undertake
the ongoing maintenance, repair and upkeep of the Phase II Site
in a satisfactory manner as may be determined by the Agency and
in accordance with applicable City of San Bernardino Municipal
Code requirements and standards. Failure of DGS to so properly
maintain, repair and provide for the upkeep of the Phase II Site
and after delivery of ten (10) days' written notice by the Agency
to DGS and the failure of DGS to commence to cure such default
and thereafter to satisfactorily complete such cure within a
reasonable period of time, the Agency shall thereupon be
permitted to either commence a legal action to compel the
specific performance of the maintenance, repair and upkeep
obligations of DGS under this Letter Agreement or to expend
Agency funds to provide for the satisfactory maintenance, repair
and upkeep of the Phase II Site and to obtain reimbursement of
all such Agency costs and expenses, including administrative and
legal costs, plus interest thereon at the highest rate allowable
under State law.
In the event this Letter Agreement is determined to be
unenforceable against either party for any reason whatsoever,
then all provisions contained in the Construction Management
Agreement shall apply as between the parties.
All individuals executing this Letter Agreement represent
and warrant that all actions have been duly taken to properly
approve and authorize the execution hereof by the undersigned and
that the individuals so executing this Letter Agreement are duly
authorized to so execute on behalf of DGS and the Agency, as
applicable. This Letter Agreement has been duly approved and
Page 2
executed by DGS and the Commission of behalf of the Agency as of
the date set forth above.
REDEVELOPMENT AGENCY OF THE CITY OF
SAN BERNARDINO
By:
Title:
By:
Title:
Approved as to form and
legal content:
By:
Agency Special Counsel
DEPARTMENT OF GENERAL SERVICES OF
THE STATE OF CALIFORNIA
By:
Title:
By:
Title:
Approved as to form and
legal content:
By:
Legal Counsel
Page 3
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM: Gary Van Osdel, Executive Director
SUBJECT:
AMENDMENTS TO STATE OFFICE
BUILDING AGREEMENTS (pHASE II)
DATE: February 27, 2001
0,.." 'L
~" , ,I
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----------~--------------------------_._---------------.-------------------------------------.---
Svnonsis of Previous Commission/Council/Committee Action(s):
January 4, 1996: Construction Project Management, Operating and Development Agreement (Caltrans Office Building
and Parking facility) executed by and between the Redevelopment Agency, the San Bernardino Joint Powers Financing
Authority, and the Department of General Services and Department of Transportation of the State of California.
June II, 1992: Exchange Agreement (Phase II Site/9th and Del Rosa) by and between the Redevelopment Agency and
the Department of General Services ofthe State of California.
August 23, 2000: Amendment to Exchange Agreement (Phase II Site/9th and Del Rosa) by and between the
Redevelopment Agency and the Department of General Services of the State of California.
December 18, 2000: The Community Development Commission authorized extension of the closing date in the State
Exchange Agreement to match the closing of the 303 Third Street transaction between the State and 303 LLC.
Recommended Motion(s):
(Communitv Develonment Commission)
MOTION:
That the Community Development Commission authorize the Chairman and Secretary to execute an
amendment to the Construction Management Agreement to extend the commencement of construction
date for the Phase II State Office Building of December I, 2000 to December I, 2005.
Contact Person(s): Gary Van Osdel/John Hoeger
Project Area(s) Central City and Central City North
Phone: 663-1044
Ward(s): First
Supporting Data Attached: Iill Staff Report 0 Resolution(s) 0 Agreement(s)/Contract(s) 0 Map(s) 0 LetterlMemo
FUNDING REQUIREMENTS Amount: $ None
Source: N/A
SIGNATURE:
Budget Authority: N/ A
Commission/Council Notes:
GVO:JBH:lag:03-05-01 303 Building
COMMISSION MEETING AGENDA
Meeting Date: 03/05/2000
Agenda Item Number: .A~
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
---------------------------------------------------------------------------------------------------------------------
AMENDMENTS TO STATE OFFICE BUILDING AGREEMENTS (PHASE II)
BACKGROUND
The Commission has previously agreed to an extension of the closing date for 303 Third Street building.
The HUD 108 documents for the 303 Third Street building have been signed and sent to HUD in
Washington D.C. and the escrow between the State of California and 303LLC is therefore expected to be
in a position to close in the next 30 days. This closing will provide funds for the State to make payments
to the Agency for land as required under the Caltrans agreements for the State "Super Block".
Recently, however, the State of California has become concerned about its performance obligations under
the Caltrans agreements. These agreements contemplated that construction of the second office building
would begin on December 1, 2000. Further, the State must begin construction within 180 days of close of
escrow or become susceptible to the Agency's right to revert (reacquire) the parcel upon payment of
$1,770,500.
The Agency has no present plans for use of the Phase Il site for another user nor does it have funds to pay
for a reversion of the property. Nevertheless, the State does not want to risk that the City/Agency might
find it in their best interest to do so.
CURRENT ISSUE
The State has requested an extension of the construction obligation date and modification of the reverter
language. The Redevelopment Committee met to discuss these matters on Thursday, February 22, 2001.
It recommended that an extension of five years be granted to the State.
FISCAL IMPACT
This action is for a change in performance dates and does not change the financial terms of the
transaction. Closing the 303 Third Street building will result in payments to the Agency of approximately
$750,000. This will complete the payment for the Phase Il site, leaving a balance of$560,357 for Phase I.
RECOMMENDATION
Based upon the foregoing, staff recommends that the Community Development Commission authorize the
Chairman and Secretary to execute an amendment to the Construction Management Agreement to extend the
commencement of construction date for the Phase II State Office Building of December I, 2000 to December I,
2005.
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GVO:JBH:lag:03-05-01 303 Building
COMMISSION MEETING AGENDA
Meeting Date: 03/05/2000
Agenda Item Number: ~~