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REDEVELOPMENT AGENCY -REQUEST FOR COMMISSION/COUNCIL ACTION
From: Glenda Saul, Executive Director
Subject: VANIR DEVELOPMENT - COURT AND "E"
STREETS
uept: Redevelopment Agency
Date: January 21, 1986
Synopsis of Previous Commission/Council action:
05-09-83
01-09-84
08-06-84
08-20-84
01-21-85
02-04-85
01-13-86
01-21-86
Revised DDA approved by motion
Resolution 4572 Amendment to DDA. RDA to reimburse Vanir up to $100,000
for soils test.
Continued in order to make additional changes
Resolution 4659 approved Amendment No.2.
Council reviewed concept of amending DDA with Vanir and instructed
preparation of said Amendment.
Resolution 4722 authorized Third Amendment to DDA.
Commission instructed Notice of Default letter if escrow does not close by
January 15, 1986. Further authorized committee of Mayor, Councilwoman
Estrada and Glenda Saul to meet and confer with Vanir.
Commission approved concept of Fourth Amendment and instructed staff to
prepare same.
Recommended motion:
(COMMUNITY DEVELOPMENT COMMISSION)
MOVE TO ADOPT RESOLUTION OF TIlE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN
BERNARDNO AUTHORIZING AND DIRECTING TIlE EXECUTION OF A FOURTH AMENDMENT TO DISPOSITION
AND JOINT DEVELOPMENT AGREEMENT BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND H. FRANK DOMINGUEZ, DBA VANIR RESEARCH COMPANY (COURT AND "E" STREETS,
MEADOWBROOK/CENTRAL CITY PROJECT AREA).
//~ ~/<
Signature
Contact person:
Glenda Saul
YES
Phone: 383-5081
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Supporting data attached:
Ward:
N/A
M/CC
Project:
February 3, 1986
FUNDING REQUIREMENTS:
Amount: $
No adverse Impact on City:
(
lcil Notes:
34lG/MT
2-03-86
Date:
Agenda Item No. B S - I
Clf .~ OF SAN BERNARDr ~O - REQUE T FOR COUNCIL ACt )N
STAFF REPORT
On January 30, 1986, the previously designated committee, consisting of
Mayor Wilcox, Councilwoman Estrada and Glenda Saul met with Frank
Dominguez, again, to discuss the proposed Fourth Amendment to the DDA for
Court and "E" Streets. Allen Briggs and Sandy Lowder participated in the
discussion.
Based upon the concept you approved at your January 21, 1986, Commission
meeting, including the additional concerns you wanted covered, the Fourth
Amendment, attached, is proposed for your approval.
To recap the provisions:
1. The redeveloper waives all claim to the $25,000 "non
refundable" fee he gave the Agency per the Third Amendment.
2. Escrow to be closed by January 15, 1987 along with evidence of
construction contract and financial commitment.
3. Construction of 174,000 SF building to be started no later than
February 15, 1987.
4. Redeveloper will pay Agency the sum of $100,000 "in lieu of
development fee", half upon signing the Fourth Amendment and
$50,000 upon his submittal to the Agency of a marketing
strategy, but not later than May 15, 1986.
5. Redeveloper will prepare and submit marketing strategy not
later than April 15, 1986. Commission will consider and
evaluate marketing strategy not later than May 15, 1986. Upon
approval, Agency will utilize $100,000 in-lieu fee to fund
developer's implementation of marketing strategy, all services
to be approved, in advance, by the Agency.
6. Interest earned on the "in-lieu" fee belongs to the Agency and
is not committed to the marketing strategy. At sole
discretion, Agency may so use the interest earned.
7. Upon adequate proof, specified, that construction has been
contracted and begun, a pro-rated portion of any remainder of
the $100,000 will be returned to the developer. This provision
ends January 15, 1987. After which any remainder of the
$100,000, plus interest, vests in the Agency.
8. The Agreement between Redeveloper and Agency including the
original DDA and all Amendments expires automatically at 4:30
p.m., January 15, 1987, if escrow has not been closed by that
time.
75-0264
RESOLUTION NO.
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE
CITY OF SAN BERNARDINO AUTHORIZING AND DIRECTING THE EXECUTION OF
A FOURTH AMENDMENT TO DISPOSITION AND JOINT DEVELOPMENT AGREEMENT
BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND H. FRANK DOMINGUEA, DBA VANIR RESEARCH COMPANY. (COURT AND
"E" STREETS, MEADOWBROOK/CENTRAL CITY PROJECT AREA)
BE IT RESOLVED BY THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO AS FOLLOWS:
SECTION 1. The Chairman and Secretary of the Community
Development Commission of the City of San Bernardino are hereby
authorized and directed to execute for and on behalf of the
Redevelopment Agency of the City of San Bernardino a Fourth
Amendment to Disposition and Joint Development Agreement
(hereafter "Agreement") between the Redevelopment Agency of the
City of San Bernardino (hereafter "Agency"), and H. Frank
Dominguez, dba Vanir Research Company (hereafter "Redeveloper").
This resolution and the Agreement approved hereby are void in the
event Redeveloper fails to deliver to Agency by or before 4:30
p.m., February 15, 1986, a fully signed original of the Agreement
and otherwise fully complies with the conditions specified in
Paragraph 9 of said Agreement by that time. A copy of said
Agreement is attached hereto as Exhibit "I" and incorporated
herein by this as though fully set forth at length.
22 Dated:
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Approved as to form:
AGENCY COUNSEL
By
vote, to wit:
The foregoing resolution was duly adopted by the following
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AYES:
NAYS:
ABSENT or
7 ABSTAIN:
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Members
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FOURTH AMENDMENT TO DISPOSITION AND JOINT DEVELOPMENT AGREEMENT
(H. FRANK DOMINGUEZ, DBA VANIR RESEARCH COMPANY, COURT & wEw
STREETS, MEADOWBROOK/CENTRAL CITY PROJECT AREA)
The Disposition and Joint Development Agreement entered into
on the 9th day of May, 1983, by and between THE REDEVELOPMENT
AGENCY OF THE CITY OF SAN BERNARDINO, CALIFORNIA, hereafter
"Agency", and H. FRANK DOMINGUEZ, DBA VANIR RESEARCH COMPANY,
hereafter "Redeveloper", and amended by a First Amendment to
Disposition Joint Development Agreement executed on the 10th day
of January, 1984, by a Second Amendment to Disposition and Joint
Development Agreement bearing acknowledgment date the 13th day of
November, 1984, for Redeveloper and acknowledged by Agency on
January 8, 1985, and by a Third Amendment to Disposition and
Joint Development Agreement effective as of the 11th day of
February, 1985, is further amended as follows:
The parties do hereby agree:
16 1. Redeveloper hereby acknowledges that the $25,000 "non-
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refundable fee" remitted by Redeveloper to Agency pursuant to the
Third Amendment to Disposition and Joint Development Agreement is
the property of the Agency, and Redeveloper waives any all
objection to the payment thereof, regardless of any prior
objections, and waives any claim for refund of such amount, or
any claim of violation of any agreement or understanding based
thereon.
24 2. Prior to or coincident with the execution of this
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agreement, Redeveloper shall present to Agency a complete
economic pro forma evidencing all expected expenses and costs to
be incurred from the development of the proposed project, and all
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expected revenues therefrom, for a period of not less than five
(5) years. This pro forma shall be consistent with or identical
to any such pro forma provided to any bank, mortgage company or
other lending institution which may provide construction or
permanent financing assistance to Redeveloper on this project.
Redeveloper shall also provide to Agency, from time to time,
updates of such economic pro forma, which shall be delivered to
Agency at any time such pro forma is changed and provided to any
lender or proposed lender. Redeveloper recognizes that Agency
has the right to be kept fully informed as to the financial
liability of this project at all times, and Redeveloper shall
have the duty to provide current and updated information as such
information relative thereto becomes available. The pro forma
shall be confidential.
3. Agency grants to Redeveloper a one-year extension within
which to close escrow on the property, the legal description of
which is attached hereto and incorporated herein as Exhibit wAn,
and all conditions precedent to the close of escrow shall
continue in full force and effect. Agency shall not be obligated
to close escrow unless each and every precondition to the closing
has been satisfied in a timely manner unless waived by Agency.
Refusal of Agency to close escrow without any such precondition
first being met shall not constitute a violation of this
agreement, nor shall such refusal be grounds for granting of any
extension. Construction of the 174,000 square foot office
building, as proposed, shall commence not later than February 15,
1987.
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4. Coincident with the execution of this agreement,
Redeveloper agrees to pay to Agency, and Agency agrees to accept,
the sum of $50,000, which shall be paid as part of an "in lieu of
development fee". An additional $50,000 as the remainder of the
"in lieu of development feeD shall be paid to Agency no later
than 4:30 p.m., May 15, 1986, in the form of a money order or
cashier's check payable to the Agency from a recognized financial
institution. Failure to pay the additional $50,000 as herein
provided shall constitute a default, and the provisions of
Paragraphs 6, 7 and 8 relating thereto shall be immediately
affective without prior notice. The "in lieu of development feeD
shall be used as follows:
a. Agency shall set aside the $100,000 "in lieu of
development fee" to be used for marketing strategy for
Redeveloper's project, contingent upon a marketing strategy
satisfactory to Agency being prepared by Redeveloper and approved
by Agency in accordance with paragraph 5 hereof.
b. Upon approval of a marketing strategy, Agency shall
expend such funds as are appropriate in pursuance of that
marketing strategy, as reimbursement to Redeveloper, as payment
to City or Agency for fees and expenses incurred in the pursuit
of such strategy, for outside consultants or brokers, or for any
other reasonable purpose encountered in accordance with that
marketing strategy. No such expense need be reimbursed unless
the service involved is approved in advance by Agency.
c. In the event that, prior to January 15, 1987,
Redeveloper has acquired a major tenant, and evidences that
acquisition by presentation to the Agency of a copy of a signed
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lease from such tenant extending for a period of not less than
five years, and covering not less than 50,000 square feet of
usable building space, Agency shall remit to Redeveloper, as
provided in Paragraph 6 below, a pro rata share of the remaining
portion of the $100,000 "in lieu of development fee" which has
not been expended, apportioned between Redeveloper and Agency as
provided for in Paragraph 6 below.
d. All interest earned on the "in lieu of development
fee" shall be solely the property of the Agency, and no
obligation shall exist in Agency to remit such interest earned to
Redeveloper, or to expend such interest earnings as part of the
marketing strategy, provided, however, that Agency may, at its
sole discretion, utilize such interest funds for marketing
strategy purposes if it chooses to do so.
5. Redeveloper shall prepare and submit to Agency a
proposed marketing strategy to market the proposed building to
major tenants wherever they may be found, subject to the
following provisions:
a. Redeveloper shall submit to Agency, not later than
April 15, 1986, its proposal for a marketing strategy designed to
acquire a major tenant on a long-term lease to utilize not less
than 50,000 square feet of the usable building space in the
proposed building. Such strategy shall be developed in
consultation with Agency staff.
b. Agency staff shall submit the proposed marketing
strategy to the Community Development Commission of the City of
San Bernardino hereinafter "Commission", which shall consider
such proposed marketing strategy within thirty (30) days from the
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date of its submission, but in any event, not later than May 15,
1986. The Commission shall review and evaluate the proposed
marketing strategy in good faith, but the entire burden of
obtaining approval of the Commission is upon Redeveloper.
Failure of the Redeveloper to obtain approval of the Commission
shall not constitute grounds for an extension, for a cause of
action, or for claiming violation of this agreement. Redeveloper
acknowledges that it is solely responsible for submitting a plan
acceptable to the Commission.
c. After approval of the marketing strategy by the
Commission, Redeveloper covenants to pursue the approved
marketing strategy with its fullest resources, in cooperation
with the Agency. Responsibility for pursuing this strategy shall
rest solely on the Redeveloper, and no failure or alleged failure
of the Agency, its officers, or employees, to cooperate to the
extent requested by Redeveloper shall constitute a basis for an
extension of time, for an action at law or in equity, or as a
basis for claim of breach of this agreement. The responsibility
is solely that of the Redeveloper to pursue the marketing
strategy with full vigor. Agency is not responsible for, and
Redeveloper agrees that it will not claim that Agency is
responsible in any regard for, the success of the marketing
strategy.
6. The Agency shall remit a net pro rata share of
unexpended "in lieu of development fee" to Redeveloper only after
(1) a major tenant has been acquired, as evidenced by a lease as
specified hereinabove, (2) the proof of construction financing
commitment has been provided to Agency, as otherwise required,
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(3) actual construction of the 174,000 square foot, more or less,
building shall have commenced, and (4) a copy of the construction
contract, duly executed, has been provided to Agency. At that
time, the balance remaining in the "in lieu of development feeD
account after payment of approved marketing expenses has been
deducted shall be determined, and pro rated based upon the number
of months which have passed prior to that time, so that, if six
(6) months have passed, one-half of the net amount remaining in
the "in lieu of development fee" account shall be paid to
Redeveloper with the remaining half representing a true "in lieu
of development fee" for six (6) months' loss of actual
development. If eight (8) months have passed, one-third of the
net amount remaining shall be paid to Redeveloper. If the
additional $50,000 "in lieu of development fee" required by
Paragraph 4 is not paid by May 15, 1986, or if the entire twelve
(l2) months passes without the start of construction and the
provision of the other documentation provided for herein, the
entire Din lieu of development fee", less any funds expended,
shall be the sole property of Agency, together with all interest
earned thereon, and Redeveloper shall have no further claim or
interest in such fund, and no right shall exist to continue
incurring marketing expenses chargeable to such account.
7. The parties acknowledge that this agreement, including
the original Disposition and Joint Development agreement and all
amendments thereto, and all rights of every kind and nature
whatsoever remaining thereunder, shall expire and terminate
automatically as of 4:30 p.m., May 15, 1986, if the additional
$50,000 "in lieu of development feeD is not paid by that time, or
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shall expire and terminate as of 4:30 p.m., January 15, 1987, if
escrow has not closed by that time. No notice of any kind need
be sent by Agency or developer to effect this automatic
termination. Only if an extension agreement is negotiated,
executed and in effect prior to that time shall this agreement
not automatically terminate as of 4:30 p.m., local time, January
15, 1987.
8. The $50,000 deposited with the Agency at the time of
execution of the Third Amendment to Disposition and Joint
Development Agreement, and the initial, original deposit of
$28,910, shall continue to be subject to refund to Redeveloper
under the terms of the original Disposition and Joint Development
Agreement and as specified in the Second Amendment to the
Disposition and Joint Development Agreement, provided that escrow
is closed by January l5, 1987. In the event that the additional
$50,000 "in lieu of development fee" required by Paragraph 4 is
not paid by May 15, 1986, or in the event that escrow is not
closed by January 15, 1987, the $50,000 deposit and the original
deposit of $28,9l0 shall be retained by or paid over to the
Agency as liquidated damages for reasons set forth in Sections
IB(2) and 12B of the original Disposition and Joint Development
Agreement, and by reason of the fact that the building being on
the tax rolls from the time originally planned would have
resulted in annual tax increment revenues of not less than
$100,000 annually, based on the planned 174,000 square foot
building. The parties recognize that the amount of damages
actually sustained by a breach hereof would be impracticable or
extremely difficult to fix, but that the amounts paid hereunder
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as an initial deposit, as a subsequent deposit and now as an "in
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lieu of development fee", represent a reasonable estimate of the
actual loss sustained by the Agency from the failure of
Redeveloper to develop this project and to have a 174,000 square
foot office building erected and in operation upon the property
as provided for in the Disposition and Joint Development
Agreement, as amended.
9. This amendment, if approved by the Commission, shall be
void and of no effect whatsoever unless Redeveloper delivers to
Agency (1) a fully executed copy of this agreement with notarial
acknowledgment, (2) a money order or cashier's check payable to
Agency from a recognized financial institution in the sum of
$50,000, in partial payment of the "in lieu of development fee",
and (3) the economic pro forma provided for herein, all at or
before 4:30 p.m., February 15, 1986.
IN WITNESS WHEREOF, the parties have executed this agreement
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effective the 15th day of February, 1986.
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REDEVELOPMENT AGENCY OF THE
18 CITY OF SAN BERNARDINO
H. FRANK DOMINGUEZ, dba
VANIR RESEARCH COMPANY
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20 By
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By
Chairman
H. Frank Dominguez
221 By
Secretary
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Approved as to form:
AGENCY COUNSEL
By ~~ ~~~'1/
Allen R. Briggs
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I hereby acknowledge that I am aware of and agree to the
liquidated damages provision set forth herein.
H. Frank Dominguez
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