HomeMy WebLinkAboutR41-Economic Development Agency
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM: Gary Van Osdel,
Executive Director
Or."'" , "..' rUBJECT:
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AMENDMENTS TO STATE OFflCE
BUILDING AGREEMENTS (PHASE II)
DATE: May 7, 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 11, 1999: 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 by and between the Redevelopment Agency and the Department
of General Services of the State of California.
December IS, 2000: The Community Development Conunission 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.
SvnoDsis of Previous Actions Continued to Next Pa!!e...
Recommended Motion(s):
(Community Development Commission)
MOTION:
That the Community Development Conunission approve/ratify execution of the attached Letter
Agreement 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 regarding construction of
the Phase II State Office Building.
Contact Person(s): Gary Van Osdel/John Hoeger
Project Area(s) Central City and Central City North
Phone: 663-1044
Ward(s): One (I)
Supporting Data Attached: 1&1 Staff Report 0 Resolution(s) 1&1 Agreement(s)/Contract(s) 1&1 Map(s) 0 Letter/Memo
FUNDING REQUIREMENTS Amount: $ None
Source: N/A
SIGNATURE:
Budget Authority: N/ A
Commission/Council Notes:
GVO:JBH:lag:06-IS-01 DGS Agreement
COMMISSION MEETING AGENDA
Meeting Date: 06/18/2001
Agenda Item Number: B9I-
Request for Commission/Council Action
Department of General Services
May 3, 2001
Page Number Two
Svnopsis of Previous Commission/Council/Committee Action(s) Continued:
February 22,2001: The Redevelopment Committee recommended a five year extension of the State's
construction obligation for the second office building.
March 5, 2001: Community Development Commission continued item at request of staff.
April 2, 200 I: The Community Development Commission approved a Letter Agreement amending
the 1996 Construction Management Agreement between the Department of General Services and the
Agency deleting the requirement for the State to commence construction of the second office tower
GVO:ffiH:lag:06-1S-01 DGS Agreement
COMMISSION MEETING AGENDA
Meeting Date: 06/18/2001
Agenda 1Iem Number: K!I1--
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
Amendments To State Office Duildin!!: A!!:reements (Phase II)
BACKGROUND
The Commission approved an action on April 2, 2001 to amend the Agency's Construction
Management Agreement with the State of California Department of General Services (DGS)
deleting the requirement that construction of its Phase II building commence within 180 days
after the transfer of title to the Phase II Site from the Agency to the State. Deletion of this
provision would allow the proceeds of the State's sale of its 303 Third Street building to be
released to the Agency and title to transfer to DGS without triggering an infeasible construction
requirement on DGS for the Phase II tower, However, shortly after the Commission Meeting of
April 2, 2001, concern was expressed that the Commission's action had released DGS from its
"commitment" to build the second office tower, Consequently, the April 2nd version of the Letter
Agreement amending the 1996 Construction Management Agreement was not executed by the
Mayor.
During the next several weeks, the City Attorney, Agency Special Counsel and staff, renewed
negotiations with DGS representatives in an effort to reach mutually acceptable provisions of a
revised Letter Agreement. On May 7, 2001 the details of a revised Letter Agreement were
presented to the Commission for approvaL
Subsequent to the Commission approval of the Letter Agreement on May 7, 2001, the document
was forwarded to DGS for review and approvaL On May 9,2001, the Agency was advised that
DGS could agree to the Letter Agreement if the following revisions were incorporated:
1) That the addressee be changed from Mr. Keene to Mr, Courtney.
2) That any references to DGS being obligated to comply with City Municipal Code
regarding parking and landscaping requirements be eliminated.
3) That reference to the State's Regional Facilities Plan, anticipated to be completed in
2002, be eliminated,
4) That language referring to "landscaping plans" being due the City from DGS on June 15,
2001, be changed to read "landscaping concepts,"
GVO:JBH:lag:06-IS-01 DGS Agreement
COMMISSION MEETING AGENDA
Meeting Date: 0611812001
Agenda Item Number: .R.!II--
Economic Development Agency Staff Report
DGS
June 6, 2001
Page Number -2-
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5) That (i) language tying landscaping plans to the 1994 EIR and the obligation ofDGS to
only install landscaping complying with the EIR be replaced with language whereby
DGS and the Agency agree that the intended landscaping is interim landscaping which
the Agency states is consistent with the EIR; and (ii) language requiring the entire Phase
II site to be sodded be replaced with language indicating that the extent of interim
landscaping will be mutually agreed upon as to which areas should be sodded with grass
and which areas should be over-planted with wild flowers;
6) That language pertaining to the escrow closing date for the 303 West Third Street
Building set at May 15, 2001, be modified to include the following "and such later date
as may be necessary but not to exceed May 22, 2001,
CURRENT ISSUE
On May 10, 2001, the Letter Agreement, as revised, was executed by the Mayor and the
Executive Director on behalf of the Agency and by Mr. Michael Courtney, the Deputy Director
of DGS, For a variety of reasons escrow on the sale of the 303 Building did not close by the
May 22, 2001 deadline, Thus, on May 24, 2001, an amendment to the Letter Agreement,
extending the close of escrow deadline to June 1, 2001, was executed by the Mayor and the
Assistant Chief of Real Estate Services for DGS. On June 1,2001, escrow closed on the sale of
the 303 Building,
FISCAL IMPACT
On June 4, 2001, the Agency received payment in full from DGS ofthe balance owed on the
Phase II site of the super block.
RECOMMENDATION
Based upon the foregoing, staff recommends that the Community Development Commission
ratify execution of the final version of the Letter Agreement dated May 10, 2001, as amended, 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,
d:
/' /f
GVO:JBH:lag:06-18-01 DGS Agreement
COMMISSION MEETING AGENDA
Meeting Date: 06/18/2001
Agenda Item Number: .11!1.1-
.
City of San Bernardino
ECONOMIC DEVELOPMENT AGENCY
Redevelopment. Community Development. Housing. Business: Recruitment, Retention. Revitalization. Main Street, Inc.
~
May 10,2001
Mr, Michael Courtney, Deputy Director
DEPARTMENT OF GENERA't SERVICES
1102 Q Street, Suite 6000
Sacramento, CA 95814
Re: MODIFICATION OF OBLIGATIONS AS TO THE PHASE II SITE - SAN
BERNARDINO STATE OFFICE PROJECT; CONTINUING DGS PROPERTY
MAINTENANCE OBLIGATIONS
Dear Mr, Courtney:
This Letter Agreement is executed by and between the Department of Oeneral Services of the
State of California ("DOS") 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"). DOS 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 DOS.
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 DOS and
not as the other parties thereto.
DOS and the Agency mutually agree that on and after (i) the date of the sale by DOS 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 Agency to DOS of the Phase II
Site (which transfer shall occur by Orant Deed within seven (7) days after the close of escrow on
the sale of the 303 East Third Street, San Bernardino property) as referred to in the Construction
Management Agreement and the Exchange Agreement, all provisions of the Construction
201 North E Street. Suite301-San Bernardino. California 92401.1507. (909)663-1044 . Fax (909) 888.9413
WWYl.sanbernardino-eda.org.
...~
..
MR. MICHAEL COURTNEY
May 10,2001
Page Number 2
Management Agreement, including but not limited to Section 3, Section 4(b), (c), (d), (e) and (t),
Section 6( c) (I) and (2) and (d) and Section 7, which refer to the Phase II Site shall be deemed to
be deleted in their entirety and of no further force and effect. Thereafter, the sole obligations of
DGS to the Agency for the Phase II Site shaU be as set forth in this Letter Agreement and
specificaUy with reference to the items contained below:
1. If authorized and funded by the State Legislature, DGS hereby irrevocably commits that
on or before ten (10) years from the date of this Letter Agreement, unless extended as
hereinafter provided, DGS shall construct or cause to be constructed a State Office
Building on the Phase II Site consisting of a multi-story office building for the State of
California governmental offices of at least 150,000 gross square feet together with the
provision of an adequateffbmber of on-site parking spaces to be located within either an
adjacent multi-level parking structure to be build on the Phase II Site or the actual
structure of the State Office Building on the Phase II Site,
2. If on or before the date that is ten (10) years after the date of this Letter Agreement DGS
has not obtained aU legislative authorizations and funding requirements and has not
commenced the actual construction of the State Office Building on the Phase II Site, the
Agency shaU have the right to repurchase the Phase II Site for an amount equal to
$1,770,500.00 by indicating the intent of the Agency to so repurchase the Phase II Site
and to thereafter deposit with DGS the fuU amount of the purchase price. The Agency
must so state its intent to repurchase the Phase II Site and must deposit the repurchase
price with DGS at any time within ninety (90) days prior to the expiration of said ten (10)
year period of time, In the event the Agency does not so state its intent to repurchase the
Phase II Site and timely deposit of the repurchase price with DGS, this Letter Agreement
shaU automaticaUy be extended without any further action of the parties for an additional
period of time equal to ten (10) years. The purchase price reflects a reduction of
$911,000,00 from the amount paid by the State of California to the Agency to
compensate the City of San Bernardino for funds it expended on the design for an office
building on the Phase II Site,
3. In the event that the term of this Letter Agreement is automaticaUy extended as provided
above, the Agency shaU have the same opportunity to provide notice of intent to
repurchase the Phase II Site and to deposit with DGS the repurchase price in the event
DGS has not commenced the actual construction of the State Office Building prior to the
expiration of the extended term of this Letter Agreement. In the event the Agency does
not so state its intent to repurchase the Phase II Site and timely deposit the repurchase
price with DGS by the date which is twenty (20) years after the date of this Letter
Agreement, this Letter Agreement shaU automaticaUy terminate as of the date which is
twenty (20) years from and after the date hereof except for the requirement of DGS to
properly maintain, repair and upkeep the landscaping of the Phase II Site which shall be
MR. MICHAEL COURTNEY
May 10,2001
Page Number 3
an obligation of DOS during the time that DOS, or any transferee or successor in interest,
continues to own the Phase II Site until the State Office Building and the required
parking structure are constructed thereon.
4. Except for a transaction structured to accomplish the construction of the State Office
Building, DOS agrees that during the term of this Letter Agreement and any extension
hereto, DOS shall not sell, lease or otherwise transfer the Phase II Site or allow for any
interim or permanent development thereon except for the State Office Building and
required parking structure as set forth above.
5. DOS agrees that on or before June IS, 2001, it shall submit landscaping conceptual
drawings to the Agency slmwing its intended landscaping improvements to the Phas'cnI
Site, The Agency, in cooperation with the City of San Bernardino, agrees to submit
comments and suggested changes, if any, to the landscaping plans to DOS by June 30,
2001. Subject to the availability of funding, on or before September 1,2001, DOS shall
commence the work of the installation and construction of the upgraded landscaping on
the Phase II Site and shall diligently complete such work within a reasonable period of
time thereafter, Such landscaping plans shall comply in all respects with the
Environmental Impact Report prepared for the Phase I and Phase II projects, and DOS
shall have no obligation to undertake and landscaping improvements that conflict with
said EIR, or to undertake any landscaping improvements which would necessitate the
preparation of any additional environmental analysis; however, DOS and the Agency
recognize that the landscaping contemplated by this paragraph is intended to be interim
landscaping and the Agency states that such landscaping is in compliance with the EIR.
The Agency and DOS acknowledge and agree that the contemplated landscaping
improvements shall consist of the Phase II Site being partially installed with grass to be
sodded in certain areas with other areas to be overplanted with wild flowers all in such
areas of the Phase II Site as shall be mutually agreed upon between DOS and the Agency
together with modifications to the irrigation system to properly irrigate the newly sodded
grass,
6, DOS shall continue to have the obligation to undertake the improvement and ongoing
maintenance, repair and upkeep of the Phase II Site in a satisfactory manner. Failure of
DOS to so properly improve, maintain, repair and provide for the upkeep of the Phase II
Site, to improve and upgrade the landscaping of the Phase II Site as required in this Letter
Agreement, and after delivery often (10) days' written notice by the Agency to DOS and
the failure of DOS 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
improvement, maintenance, repair and upkeep obligations of DOS under this Letter
Agreement or to expend Agency funds to provide for the satisfactory improvement,
.
MR. MICHAEL COURTNEY
May 10,2001
Page Number 4
maintenance, repair and upkeep of the Phase II Site and to obtain reimbursement of all
such Agency costs and expenses, including administrative costs, plus interest thereon at
the highest rate allowable under State law. Such reimbursement by DGS shall be subject
to the availability of funds and, if necessary, compliance by the Agency with applicable
governmental claim procedures.
7. The Agreement between DGS and the Agency entitled "Amendment to Exchange
Agreement (Phase II Site/9th and Del Rosa)" dated as of August 23, 2000, is hereby
amended by changing the date of "December 30, 2000" as contained in Section I thereof
to "May 15, 2001, and such later date as may be necessary but not to exceed May 22,
2001."
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8. The Agency agrees to provide DGS all designs and work product it prepared for the
buildings on the Phase II Site, and hereby assigns to DGS all right, title and interest of the
Agency in said plans and work product.
9. This Letter Agreement shall terminate upon the completion of the State Office Building
and required parking structure.
MR. MICHAEL COURTNEY
May 10, 2001
Page Number 5
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
executed by DGS and the Commission on behalf of the Agency as the date set forth above.
REDEVELOPMENT AGE Y OF THE
CITY OF SAN BE !NO
By:
Title:
By:
Title: Se e r
Approved as to form and
legal content:
By: ~~l
Agency Sp I Counsel
DEPARTMENT OF EN RAL SERVICES
OFTHESTAT 0 A ORNIA
By:
Title:
By:
Title:
Approved as to form and
legal content:
By: ~~ S:::J-I
Legal Counsel '
OFFICE OF THE MAYOR
JUDITH VALLES
300 North "0" Slreet. San Bernardino' CA 92418-0001
909.384.5133. Fax: 909.384.5067
www.ci.san-bernardino.ca.us
,.
May 24, 200 I
00 rn@rnowrnoo
JUN 0 1 2001
Me. Dwight V. Weathers, Assistant Chief
Department of General Scrvices
Real Estate Services Division
1102 Q Street, Suite 6000
Sacramento, CA 95814-
OFFICE OF THE MAYOR
TIME: /0 A'7Y?
Rc: MODIFICATION TO ESCROW CLOSING DATE CONTAINED IN MAY 10, 2001, LETTER
AGREEMENT FOR 303 EAST THIRD STREET, STATE OFFICE BUILDING
Dear Me. Weathers:
This letter will be deemed to be an amendment to our previously cxecuted Letter Agreement with Mr, Courtney
datcd, May 10, 2001, with respect to certain modifications to the Construction Project Management, Operating and
Devclopment Agreement (Caltrans Office Building and Parking Facility) dated January 4, 1996 (the "Construction
Management Agrecment"), and the agreement between Department of General Services of the State of California
("DGS") and the Redevelopment Agency of the City of San Bernardino ("Agency") entitled "Amendment to
Exchange Agreement (Phase 11 Site/9th and Del Rosa)" dated as of August 23, 2000.
Paragraph 7 of the Letter Agreement modified the date of "December 30, 2000" as contained in the Amendment to
Exchange Agreement to be "May 15, 200 I, and such later date as may be necessary but not to exceed May 22,
2001." This letter shall further extend the date as referenced in both the Amendment to Exchange Agreement and
paragraph 7 of said Letter Agreement to "June 1,2001."
If this amendment is satisfactory to you, please indicate your concurrence as provided below. Thank you once again
for your cooperation in assisting the City of San Bernardino in this matter.
REDEVELOPMENT AGENCY
OF THE CITY Of SAN BERNARDINO
,/
DEPARTMENT OF GENERAL SERVICES
OF THE STATE OF CALIFORNIA
~it;e: A&:::tL~~~iViSion
. CULTURAL AND INTERNATIONAL AFFAIRS. EQUAL EMPLOYMENT OPPOKI'UNITY OFFICE
. MARKIlTING AND PuBLIC AFFAIRS. COMMUNITY LIAISON