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HomeMy WebLinkAboutR01-Redevelopment Agency - .,... .. -- - __ ... "l".- ...""" RIt!DEVELOPMENT AGENCY -REQUEST FOh COMMISSION/COUNCIL ACTa From: Glenda Saul, Executive Director Subject: VANIR DEVELOPMENT - COURT AND "E" STREETS Dept: Redevelopment Agency Date: February 10, 1986 Synopsis of Prellipus Commission/Council action: OS-09-ij3 Revised DDA approved by motion 01-09-84 Resolution 4572 Amendment to DDA. 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. Continued to February 13, 1986. 08-06-84 08-20-84 01-21-85 02-04-85 01-13-86 01-21-86 02-03-86 RDA to reimburse Vanir up to $100,000 (COMMUNITY DEVELOPMENT COMMISSION) Recommended motion: MOVE TO ADOPT RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY OF SAN BERNARDNO 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 DOMINGUEZ, DBA VANIR RESEARCH COMPANY (COURT AND "E" STREETS, MEADOWBROOK/CENTRAL CITY PROJECT AREA). ~t6~/ Signature Contact person: Phone: 383-5081 1 Supporting data attached: Glenda Saul YES Ward: NIA Mlcc Project: February 13, 1986 FUNDING REQUIREMENTS: Amount: $ Council Notes: No advarse Impact on City: Date: 389G/MT '-1 .-RIi Agenda Item No, ~ - ~ -- .... -- ..- ~ "". CITY OF SAN BERNARDINO - REQUEST FOR COUNCIL ACTIO~ STAFF REPORT On February 3, 1986, you considered a proposed Fourth Amendment to the DDA with Vanir Development, Inc., for the office building at Court and "E" Streets, and continued to February 13, 1986. On February 7, 1986, the designated committee comprised of Mayor Wilcox, Councilwoman Estrada and Glenda Saul, met with Frank Dominguez. Allen Briggs also attended. No agreement was reached at this meeting and another one is planned at an early, mutually acceptable date. Attached is our previous staff report, resolution and agreement. 389G/MT 2/13/86 75.0264 - ... ----....- -- - ..... c.~ lV OF SAN BERNARl "NO - REQU_~ST FOR COUNCIL At. ~'ION 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 525,000 "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 5100,000 "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 5100,000 will be returned to the developer. This provision ends January 15, 1987. After which any remainder of the 5100,000, 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. 389G/MT 2/13/86 75-0264 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 RESOLUTION NO. 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 "En 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 "Agreementn) between the Redevelopment Agency of the City of San Bernardino (hereafter "Agency"), and H. Frank Dominguez, dba Vanir Research Company (hereafter "Redevelopern). 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 20 21 herein by this as though fully set forth at length. 22 Dated: 23 24 25 26 27 28 Approved as to form: AGENCY COUNSEL By ~ --... -- 1 2 3 4 5 6 The foregoing resolution was duly adopted by the following vote, to wit: Members AYES: NAYS: ABSENT or 7 ABSTAIN: 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 2 1 2 3 4 5 6 7 8 9 10 11 12 13 14 \ 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ~ -_.......- - - FOURTH AMENDMENT TO DISPOSITION AND JOINT DEVELOPMENT AGREEMENT (H. FRANK DOMINGUEZ, DBA VANIR RESEARCH COMPANY, COURT & "E" 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: 1. Redeveloper hereby acknowledges that the $25,000 "non- 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. 2. Prior to or coincident with the execution of this 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 1 ~ - -...,.....-- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 -A-, 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. 2 .., ....----- - ....-.-..... 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 win lieu of development feew. An additional $50,000 as the remainder of the win 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 Din lieu of development feeD shall be used as follows: a. Agency shall set aside the $100,000 win lieu of development feew 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 3 .....- ----- 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 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 4 1 2 3 4 5 6 7 8 9 10 11 12 13 ~. 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 - -- ....~-".- -- 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, 5 1 2 3 4 5 6 7 8 9 10 11 12 13 ( 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 ----'-,..,-~- (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 win lieu of development fee" 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 win lieu of development feew account shall be paid to Redeveloper with the remaining half representing a true win lieu of development feew 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 win lieu of development feew required by Paragraph 4 is not paid by May 15, 1986, or if the entire twelve (12) months passes without the start of construction and the provision of the other documentation provided for herein, the entire Win lieu of development feew, 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 Win lieu of development feew is not paid by that time, or 6 1 2 3 4 5 6 7 8 9 10 11 12 13 I 14 \. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 -....-. -~~ --.. 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 15, 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 $28,910 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 7 1 2 3 4 5 6 7 8 9 10 11 12 13 , 14 ',. 15 16 17 18 19 20 21 22 23 24 25 26 27 28 as an initial deposit, as a subsequent deposit and now as an -in 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 effective the 15th day of February, 1986. REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO H. FRANK DOMINGUEZ, dba VANIR RESEARCH COMPANY By By Chairman H. Frank Dominguez By Secretary Approved as to form: AGENCY COUNSEL By ~~ ~-d~'Z/ Allen R. Briggs 8 1 2 3 4 5 6 7 8 9 10 11 12 13 I 14 \, - 15 16 17 18 19 20 21 22 23 24 25 26 27 28 I hereby acknowledge that I am aware of and agree to the liquidated damages provision set forth herein. H. Frank Dominguez 9