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ECONOMIC DEVELOPMENT AG El'(<r IV\ I i- "
OF THE CITY OF SAN BERNARDINO
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FROM: Emil A. Marzullo
Interim Executive Director
SUBJECT: Joint Pnblic Hearing - Waterman Holdings, LLC -
Amendment No, 4 to the 2004 Disposition and
Development Agreement (Central City East
Redevelopment Project Area)
DATE: December 9, 2008
Svnonsis of Previous Commission/CounciVCommittee Action(s):
On November 2, 2004, Redevelopment Committee Members Estrada and Longville unanimously voted to recommend that the
Community Development Commission of the City of San Bernardino (the "Commission") consider a disposition and development
agreement with Waterman Holdings, LLC, for approvaL
On December 6, 2004, the Commission adopted Resolution No. CDC/2004-49 approving the sale of certain real property by the
Agency to Waterman Holdings, LLC, and authorized the Executive Director to execute the Disposition and Development
Agreement between the Agency and Waterman Holdings, LLC, and the Mayor and Common Council of the City of San Bernardino
simultaneously adopted Resolution No. 2004-386 approving the sale of certain real property (4th and Waterman Avenue - APN:
0135-191-11) within the Central City East Redevelopment Project Area ("Project Area").
SvnoDsis Continued to Next Pa!!e....
Recommended Motion(s):
Open/Close Joint Public Hearing
Mayor and Common Council
Resolution of the Mayor and Common Council of the City of San Bernardino consenting to the disposition of certain real
property by the Redevelopment Agency of the City of San Bernardino ("Agency") to Waterman Holdings, LLC (4th and
Waterman Avenue -- APN: 0135-191-17) (Central City East Redevelopment Project Area)
(Community DeveloDment Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving the sale of certain real
property by the Redevelopment Agency of the City of San Bernardino ("Agency") to Waterman Holdings, LLC, and
authorizing the Interim Executive Director of the Agency to execute Amendment No. 4 to the 2004 Disposition and
Development Agreement, as amended, between the Agency and Waterman Holdings, LLC (4th Street and Waterman Ayenue
- APN: 0135-191-17) (Central City East Redevelopment Project Area)
Contact Person(s):
Mike Trout
Central City East
Redevelopment Project Area
Phone:
(909) 663-1044
Proj ect Area( s)
Supporting Data Attached:
Ward(s):
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[{I Staff Report [{I Resolution(s) [{I Amendment(s)/Agreement(s) [{I Map(s) 0 Letters
FUNDING REQUIREMENTS Amount: $ N/A Source:
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_ .' Budget Authority:
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SIGNATURE: Fiscal Review:
Emil A. arzu 0, InterIm Executive Director
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N/A
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Barbara Lindseth, Administrative Services Director
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P:\Agendas\Comm Dev CommissionlCDC 2008\12-] 5-08 Waterman Holdings, LLC - Amendment NO.4 SR (Con't)doe
COMMISSION MEETING AGENDA
Meeting Date: 12/15/2008
Agenda Item Number: It 2. Lf
Economic Development Agency Staff Report
Waterman Holdings, LLC - Amendment No.4
Page 2
December 15, 2008
Synopsis of Previous Commission/Council/Committee Action(s):
On June 7, 2005, Redevelopment Committee Members Estrada and McGinnis unanimously voted to
recommend that the Commission consider the action of June 20, 2005.
On June 20, 2005, the Commission adopted Resolution No. CDC/2005-19 approving Amendment No.1
to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC
and authorized the Executive Director to execute Amendment No.1.
On June 19,2006, the Commission adopted Resolution No. CDC/2006-20 approving Amendment No.2
to the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC
and authorized the Executive Director to execute Amendment No.2.
On November 8, 2007, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously
voted to recommend that the Commission consider the action of Amendment No.3.
On July 21, 2008, the Commission adopted Resolution No. CDC/2008-26 approving Amendment No.3 to
the 2004 Disposition and Development Agreement between the Agency and Waterman Holdings, LLC
and authorized the Interim Executive Director to execute Amendment No.3.
On October 9, 2008, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously
voted to recommend that the Council and the Commission consider the action of Amendment No.4.
On November 3, 2008, the Commission discussed Amendment No.4 and the sale of the Flood Control
Channel Property to Waterman Holdings, LLC., deciding to continue discussion of Amendment No.4 and
the public hearing for the sale of the Flood Control Channel Property to Waterman Holdings, LLC to
November] 7,2008.
On November ] 7, 2008, the Commission continued discussion of Amendment No.4 and the public
hearing for the sale of the Flood Control Channel Property to Waterman Holdings, LLC, to December 15,
2008.
P:\AgendasIComm Dev Commission\CDC 2008\12.15-08 Waterman Holdings, LLC - Amendment No.4 SR (Con'l) doc
COMMISSION MEETING AGENDA
Meeting Date: 12/15/2008
Agenda Item Number: ~
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
JOINT PUBLIC HEARING - WATERMAN HOLDINGS, LLC-
AMENDMENT NO.4 TO THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
BACKGROUND:
On December 6, 2004, the Mayor and Common Council of the City of San Bernardino (the "Council")
and Community Development Commission of the City of San Bernardino (the "Commission") approved
the sale of approximately 3.9 acres of land owned by the Redevelopment Agency of the City of San
Bernardino (the "Agency") located at the southwest comer of 4th Street and Waterman Avenue (APN:
0135-191-11) (the "Property") pursuant to a 2004 Disposition and Development Agreement (the "DDN')
between the Agency and Waterman Holdings, LLC (the "Buyer/Developer"). Waterman Holdings, LLC
is a single asset LLC created solely for the ownership of the Property and for the development of the
project for the County of San Bernardino. The principals of Waterman Holdings, LLC are as follows: Jian
Torkan (50%) and Emanuel Separzadeh, Jacob Separzadeh, John Separzadeh, Michael Separzadeh,
Mouris Separzadeh and Yafa Azizzadeh (50%).The sole managing member of Waterman Holdings, LLC
is Jian T orkan and has unilateral authority to act on its behalf. The other parties to Waterman Holdings,
LLC are silent investor parties.
The DDA, as approved, required for the Buyer/Developer 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/Developer would have the option to purchase the
Phase II Property at a later date. The Agency pledged 60% of the tax increment that the completed
Project would generate over a period of ten years to off-set the below market rental rate that the County
required ofthe Buyer/Developer.
On May 17, 2005, the San Bernardino County Board of Supervisors approved a ten-year lease with the
Buyer/Developer to construct 17,000 square feet of office space for the PSD.
On June 20, 2005, the Commission approved Amendment No. 1 to the DDA, whereby the location of
Phase I and Phase II were redefined. 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 items arose that would necessitate a change to the original DDA; first, it was
determined that the pledge of tax increment to the Buyer/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 1, 2004. Second, the County needed a larger building constructed for a different
County Department and consequently, the Buyer/Developer would now require both the Phase I and
Phase II sites (APN: 0135-191-11) (the "Agency Property") be combined as a single site.
P:\Agendas\Comm Dev CommissionlCDC 2008\12-15-08 Waterman Holdings, LLC - Amendment Ko. 4 SR(Con'l) doc
COMMISSION MEETING AGENDA
Meeting Date: 12/15/2008
Agenda Item Nnmber: R2.4-
Economic Development Agency Staff Report
Waterman Holdings, LLC - Amendment NO.4
Page 2
The Buyer/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 Buyer/Developer has deposited the sum of $20,000 into
escrow and the balance of $492,424 will be paid upon the closing of the escrow. Per Amendment No.2,
the Agency will pledge to the Buyer/Developer from general Agency revenues under a Promissory Note
and not as a pledge of tax increment revenues, 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 ten years. As per the
original DDA, the 60% pledge was authorized by the Commission in an effort to off-set or compensate
the Buyer/Developer for the below market rate per the ten-year lease with the County. The Agency's
payment obligation will commence upon presentation of a cancelled check by the Buyer/Developer and as
of the fiscal year following completion of the Project by the Buyer/Developer and said payment will be
paid after each December lOth and April lOth tax payment.
On June 19, 2006, the Commission approved Amendment No. 2 to the DDA, whereby the
Buyer/Developer will develop on the Agency Property, a 2-story building containing a minimum of
45,000 square feet of office space, to include parking and landscaping, and to lease to County Transitional
Assistance Department ("TAD") (the "Project"). TAD provides jobs and employment services to
residents and job training programs.
Additionally, in Amendment No.2, the Agency pledged to reimburse the Buyer/Developer an amount
equal to 60% of the 1 % of new property taxes generated by the Project for a period of ten years from the
general revenues ofthe Agency.
On July 21, 2008, the Commission approved Amendment No.3 to the DDA, wherein the Agency would
reimburse the Buyer/Developer an amount not to exceed $399,500 for the actual costs for the required
Off-Site Improvements. This reimbursement would be paid from the sale proceeds of the Agency
Property 30 days following the completion of the Project as evidenced by a Certificate of Occupancy
issued by the City of San Bernardino (the "City") and verification that the Off-Site Improvements have
been constructed by the Buyer/Developer and accepted by the City. The cost reimbursements to the
Buyer/Developer would not exceed the lesser of the actual cost paid for the Off-Site Improvements or
$399,500 utilizing prevailing wage rates. All other terms and conditions of the DDA, as amended by
Amendments No.1 and No.2, would remain unchanged.
CURRENT ISSUE:
The Buyer/Developer has informed the Agency that they need additional land for additional parking for
the Project. The Buyer/Developer approached the Agency about acquiring the Flood Control Channel
Property, APN: 0135-191-17 formerly APN: 0135-191-15 (the "Flood Control Property." The Flood
Control Property runs along the southern boundary of the Agency Property. The Buyer/Developer has
estimated that it will cost $1.1 million to improve the Flood Control Property for use as a parking lot.
The Buyer/Developer has already had preliminary conversations with the Western Regional Water
District and has formulated a plan which the Western Regional Water District has indicated will be a very
good solution to the current open Flood Control Property. Additionally, the Buyer/Developer has stated
P:\AgendasIComm Dev Commission\CDC 2008\12-15.08 Watennan Holdings, LLC - Amendment No.4 SR (Con't),doc
COMMISSION MEETING AGENDA
Meeting Date: 12/15/2008
Agenda Item Number: ~
Economic Development Agency Staff Report
Waterman Holdings, LLe - Amendment No.4
Page 3
that they will be paying for the entire cost of improving the Flood Control Property for use as a parking
lot.
The Agency has obtained a current appraisal for the Flood Control Property. The Agency appraiser has
determined that the fair market value of the Flood Control Property is $36,000.
Approval of Amendment No.4 to the DDA allows the Agency to sell the Flood Control Property to the
Buyer/Developer for $36,000. This dollar amount and the value of the improvements to this Flood
Control Property will generate additional property tax for the calculation of the annual payment to the
Buyer/Developer per the DDA, as amended. All other terms and conditions of the DDA, as amended by
Amendments No. I, No.2 and No.3, would remain unchanged.
On October 16,2008, the DIERC met to discuss the Buyer/Developer's plans to build a one-story parking
structure over the Flood Control Property. The DIERC made comments to the plan as presented and
required the Buyer/Developer to make the appropriate changes and return to the D/ERC for additional
review.
On November 3, 2008, the Commission met to consider the approval of Amendment No.4 for the sale of
the Flood Control Property to the BuyerlDeveloper. At the meeting, there was discussion and concern
about the plans and necessary assurances that the BuyerlDeveloper would obtain any and all
approval/permits from any federal, state and/or local agency prior to construction of the one-story parking
structure over the Flood Control Property. The decision of the Commission was to continue the approval
of Amendment No.4 and the sale of the Flood Control Channel Property to November 17, 2008, to allow
Agency Staff time to make the necessary revisions to Amendment No.4.
On November 6, 2008, the D/ERC met again to discuss the Buyer/Developers plans to build a one-story
parking structure over the Flood Control Property. The D/ERC determined that the BuyerlDeveloper had
made the appropriate changes to the plans as the DIERC had previously requested. Further, the D/ERC
recommended release of the Initial Study for public review and comments and continued approval of the
BuyerlDevelopers plans until the end of the public review period.
The public review period is thirty (30) days starting November IS, 2008, through and including December
15, 2008. The DIERC is scheduled to meet again on December 18, 2008, to discuss this item and
determine the next action to be taken.
On November 17, 2008, the Commission continued the approval of Amendment No.4 and the sale of the
Flood Control Channel Property to December IS, 2008.
In the interim, Agency Staff has prepared a new section, (the "Section 2.15"), to be added to Amendment
No.4 which will require the BuyerlDeveloper to obtain and provide proof of the necessary federal, state
and local approvals and/or permits for the one-story parking structure prior to the closing of escrow for
the sale of the Flood Control Property. If the BuyerlDeveloper does not comply with all of the
requirements of Section 2.15, escrow for the Flood Control Property will not close and the
BuyerlDeveloper will not be permitted to build the one-story parking structure over the Flood Control
Property.
P:\AgendasIComrn Dev Commission\CDC 2008\12-15-08 Waterman Holdings, LLC - Amendment No.4 SR (Con'l) doc
COMMISSION MEETING AGENDA
Meeting Date: 12/15/2008
Agenda Item Number: ft '2.l./
Economic Development Agency Staff Report
Waterman Holdings, LLC - Amendment No.4
Page 4
ENVIRONMENTAL IMP ACT:
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 $36,000 from the Buyer/Developer for the sale of the Flood Control Property.
The Agency estimates that it will take 30 days to close from the opening of escrow.
Additionally, any new property taxes generated as a result of the improvements to the Flood Control
Property will be included in the calculation of the Agency in determining the annual payment to the
Buyer/Developer per the terms and conditions of the DDA, as amended. The annual payment to the
Buyer/Developer will be an amount equal to 60% of the I % of the new property taxes generated from the
development of the Flood Control Property, as well as the Agency Property. The total payment to the
Buyer/Developer is estimated to be $420,000 over a ten-year period.
RECOMMENDATION:
That the Mayor and Common Council and Community Development Commission adopt the attached
Resolutions.
Emil A. Marzullo, Interim Executive Director
P:\Agenrlas\Comm Dev Commission\CDC 2008\12-15-08 Waterman Holdings, LLC - Amendment No 4 SR (Con't) doc
COMMISSION MEETING AGENDA
Meeting Date: 12/15/2008
Agenda Item Number: ~
SUMMARY REPORT PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 OF
THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW REGARDING THE
DISPOSITION AND DEVELOPMENT OF CERTAIN AGENCY PROPERTY LOCATED
SOUTH OF THE SOUTHWEST CORNER OF 4TH STREET AND WATERMAN AVENUE
(APN: 0135-191-17) SAN BERNARDINO, CALIFORNIA PURSUANT TO THE TERMS OF
AMENDMENT NO.4 TO THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND WATERMAN HOLDINGS, LLC - CENTRAL CITY EAST
REDEVELOPMENT PROJECT AREA
INTRODUCTION
This Summary Report (the "Report") has been prepared by the Redevelopment Agency of the City of
San Bernardino (the "Agency") pursuant to Section 33433 of the California Health and Safety Code.
This Report sets forth certain details of the proposed sale by the Agency of real property totaling
approximately .84 +/- acres of vacant land, described as Assessor Parcel Number 0135-191-17 located
south of the southwest comer of 4th Street and Waterman Avenue, San Bernardino, California (the
"Site"), to Waterman Holdings, LLC (the "Developer"). An appraisal was performed on the Site by
James Smothers, MAl (the "Appraiser") in August 2008 and reported the basic value of $9.85/square
foot and the appraised value to be $.97/square foot.
To arrive at the appraised value of $.97/square foot, the Appraiser reviewed sales of properties with
low development potential due to their topography and/or accessibility. The sales were then time
adjusted for market conditions, up to the date of value and divided by the basic value of land,
$9.85/square foot. The range of percentage of the base value went from 2.0% to 25.9%. The average
percentage of the base value was 9.75% and the median was 10.05%. The Appraiser determined that
the fair market value of the Site is 10% of the base value.
APN: 0135-191-17
Site Base Value = ($9.85/square foot x 36,489 square feet)
Less % discount for lack of development potential
Less $ discount for lack of development potential
Fair Market Value ($35,900)
$359,000
90%
($323,000)
$36,000 (rounded)
The Agency acquired title to the Site in 1983 from the City of San Bernardino (the City"). The
Site was part of the historic Warm Creek flood control system until a permanent concrete channel was
built to the east of Waterman Avenue. No capital improvements have been performed on the Site since
the Agency acquired title. The Site is currently vacant land. Pursuant to the proposed Amendment No.
4 (the "Amendment") to the 2004 Disposition and Development Agreement (the "DDA") the
Developer will acquire the Site from the Agency and develop the Site so that it may be used for
parking.
This Report is organized into the following 6 Sections:
I. Salient Points of the DroDosed Amendment No.4: This section includes a description of the
major responsibilities to be assumed by the Agency and the Developer.
1
P:\Agendas\Agenda Attachments\Summary Reports\2008\12-1S.os Waterman Holdings, LLC _ Amendment No.4 Summary Report.doc
II. Cost of the Amendment No.4 to the Al!encv: This section outlines the proposed costs of
Amendment No.4 to the Agency.
III. Estimated Value of the Interests to be Conveyed Determined at the Hil!hest and Best Use
Permitted Under the Redevelopment Plan: This section summarizes the value of the Flood
Control Channel Property to be conveyed to the Developer at the highest use permitted
pursuant to the terms of Amendment No.4.
IV. Estimated Reuse Value of the Interests to be Conveyed Determined at the Required Use
and with tbe Conditions, Covenants and Restrictions Required bv the Proposed
Amendment No.4: This section summarizes the sales price to be paid to the Agency by the
Developer.
V. Blil!ht Alleviation: This section describes the existing blighting conditions in and around the
Project Area, and an explanation of how the proposed sale and development of the Agency Lots
will assist in alleviating the blighting conditions.
VI. Conformance with the AB 1290 Implementation Plan: This section identifies how the
proposed Amendment No.4 will result in a development activity that fulfills the goals and
objectives established in the Agency's AB 1290 Five-Year Implementation Plan.
I. SALIENT POINTS OF THE PROPOSED AMENDMENT NO.4
A. Description ofthe proposed Proiect
. The purpose of Amendment No.4 is to transfer the Flood Control Channel Property
to the Developer to facilitate the development of a single floor parking structure in
support of a 2-story 45,000 square foot office building structure that the Developer
is constructing for the County of San Bernardino. The Developer will provide all
necessary improvements required in connection with the construction of the single
floor parking structure.
B. Agency Responsibilities
. Transfer the Flood Control Channel Property to the Developer pursuant to the terms
of Amendment No.4.
C. Developer Responsibilities
· Execute and implement Amendment No.4 with the Agency and agree to accept the
Flood Control Channel Property per the terms of Amendment No.4 and develop a
parking structure.
· Complete the construction of the parking structure without any further Agency
assistance per the terms of Amendment No.4.
II. COST OF THE PROPOSED AMENDMENT NO.4 TO THE AGENCY
The costs of the proposed Amendment No.4 would be the usual and normal costs associated
with the sale of the property, which is estimated to be $2,000.
2
P:\Agendas\Agenda Attaclunents\Summary Reponsl2008\12-15-08 Waterman Holdings, LLC. Amendment No.4 Sununary Report-doc
III. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT
THE HIGHEST AND BEST USE PERMITTED UNDER THE REDEVELOPMENT
PLAN
The estimated value of the interest to be conveyed ($36,000) is based upon the low
development potential of the Flood Control Channel Property. Construction of a single story
parking structure is considered the highest and best use permitted under the Project Area Plan.
IV. ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
DETERMINED AT THE REOUlRED USE AND WITH THE CONDITIONS.
COVENANTS AND RESTRICTIONS REOUIRED BY THE PROPOSED
AMENDMENT NO.4
The estimated fair market value of the interest to be conveyed to the Developer is $36,000,
based upon the terms and conditions pursuant to Amendment No.4.
V. BLIGHT ALLEVIATION
The development of the Flood Control Channel Property will eliminate existing blight, foster
the reuse of underutilized property into a single floor parking structure and return the Flood
Control Channel Property to the property tax rolls.
VI. CONFORMANCE WITH THE AB 1290 IMPLEMENTATION PLAN
The Five-Year Implementation Plan ("Plan") adopted by the Agency contains several broad
operational goals and objectives for the Project Area. Among these are the following:
· Eliminate blighting influences, including deteriorating buildings, uneconomic
land uses, obsolete structures, and other environmental, economic and social
deficiencies.
· To re-plan, redesign and redevelop underdeveloped areas that are stagnant or
improperly utilized.
Amendment No.4 will assist the Agency in meeting the objectives and goals of its Plan for the Project
Area in the following way:
The execution of Amendment No.4 with the Developer will continue redevelopment activities of the
Agency by developing underutilized Flood Control Channel Property and increasing property taxes.
Based upon the preceding factors, Amendment No.4 is consistent with the Plan. The interest in the
Flood Control Channel Property to be conveyed to the Developer will be developed in conformance
with the City's General Plan and the Municipal Development Code.
3
P:\Agendas\Agenda AttachmentslSummary ReportsUOO8\12-IS-08 Waterman Holdings, UC _ Amendment No.4 Summary Report.doc
1
RESOLUTION NO.
2
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO CONSENTING TO THE DISPOSITION OF
CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO WATERMAN
HOLDINGS, LLC (4TH AND WATERMAN AVENUE - APN: 0135-191-17)
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
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4
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7
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9
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WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and charter
city, duly organized and existing pursuant to the provisions of the constitution of the State of
California; and
WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a
11 public body, corporate and politic existing under the laws of the State of California, Health and
12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and
13 underutilized land; and
14
WHEREAS, the Agency desires to dispose of certain real property, APN: 0135-191-17 (the
15
"Flood Control Channel Property") owned by the Agency, as set forth in that certain Amendment
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No.4 (the "Amendment") to the 2004 Disposition and Development Agreement (the "DDA") by
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and between the Agency and Waterman Holdings, LLC (the "Buyer" or "Developer"); and
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WHEREAS, the Agency Property is located south of the southwest comer of 4th Street and
20 Waterman Avenue within the Central City East Redevelopment Project Area and is presently an
21 unimproved vacant lot; and
22
WHEREAS, an appraisal of the Flood Control Channel Property was performed in August
23 2008, by Smothers Appraisal (the "Appraiser"); and
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WHEREAS, according to the appraisal report dated September 4, 2008 (the "Agency
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Appraisal Report"), prepared by the Appraiser, the fair market value of the Flood Control Channel
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Property is $36,000 for the approximately .84 acres ofland; and
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1 WHEREAS, the Agency intends to enter into the Amendment pursuant to which the Agency
2 proposes to sell the Flood Control Channel Property to the Buyer for the fair market value of
3 $36,000; and
4
WHEREAS, the Amendment provides for the development of the Flood Control Channel
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8 WHEREAS, the Developer has estimated that it will cost $1,100,000 for the construction of
Property by the Developer so that it may be used as a parking lot in furtherance of the office project
identified in the DDA, as amended; and
9 the improvements to the Flood Control Channel Property; and
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WHEREAS, the Agency has prepared and published a notice of joint public hearing in the
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San Bernardino County SUN newspaper on October 20, 2008 and October 27, 2008, regarding the
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consideration and approval of the Amendment; and
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WHEREAS, pursuant to Health and Safety Code Section 33433(b), the Agency may transfer
15 the Flood Control Channel Property to the Buyer subject to the Mayor and Common Council of the
16 City of San Bernardino (the "Council") and the Community Development Commission of the City
17 of San Bernardino (the "Commission") adopting separate Resolutions authorizing the Agency to
18 transfer the Flood Control Channel Property in light of the findings set forth herein, pursuant to
19 Health and Safety Code Section 33433; and
20
WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety
21
Code Section 33433 (the "Report") that describes the salient point of the Amendment and identifies
22
the cost of the Amendment to the Agency; and
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WHEREAS, pursuant to Section 15332 of the California Environmental Quality Act
25 Guidelines ("CEQA") the Agency has reviewed the proposed sale and use of the Flood Control
26 Channel Property and has determined that the project, as identified in the Amendment, is exempt
27 from CEQA and qualifies for a Categorical Exemption, Class 32 (Guidelines Section 15332) as the
28 project meets all four (4) requirements for an In-fill Project; and
2
P _-\gcndas'Rcsolutions'Resolulions'200S 12-15-08 WatcrmanHoldings, LLC - Amendmer.t \'04 \ICC Reso (Con't) doc
1 WHEREAS, the acquisition of the Flood Control Channel Property by the Buyer IS
2 consistent with the Central City East Redevelopment Plan; and
3
WHEREAS, on November 3, 2008, the Council discussed the sale of the Flood Control
4
Channel Property to the Developer, deciding to continue the public hearing concerning the sale to
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the Developer to November 17,2008; and
WHEREAS, on November 17, 2008, the Council continued the public hearing of the sale of
8 the Flood Control Channel Property to the Developer to December 15, 2008.
9 NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY
10 THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
11 FOLLOWS:
12
Section 1.
On December 15, 2008, the Council conducted a full and fair joint public
13
hearing with the Commission, as the governing board of the Agency, relating to the disposition of the
14
Flood Control Channel Property from the Agency to the Buyer and the development thereof pursuant
15
to the Amendment. The minutes of the City Clerk for the November 3, 2008 meeting of the Council
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shall include a record of all communication and testimony submitted to the Council by interested
17
persons relating to the public hearing and the approval of the Amendment.
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Section 2.
The Council hereby receives and approves the Report and the other written
19
materials submitted to the Council at the meeting at which this Resolution is adopted. The Report
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contains information required under Health and Safety Code Section 33433.
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Section 3.
This Resolution is adopted in order to satisfy the provisions of Health and
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Safety Code Section 33433(a)(I) and (b)(2) related to the disposition of the Flood Control Channel
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Property to the Buyer in accordance with the Amendment and the Council hereby approves the
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transfer of the Flood Control Channel Property to the Buyer pursuant to the Amendment for the
25
consideration as provided therein. The Council hereby finds and determines as follows: that the
26
Report contains the information described in Health and Safety Code Section 33433(b )(2) wherein
27
the Flood Control Channel Property is being sold to the Buyer at the purchase price of $36,000 for
28
3
P\A.\1endas"Resolulions\Resolutions'2008'.12-15-08 Waterman Holdin\1s, LLC . Amendment "10 4 MeC Reso (Con't) doc
1 the development of a parking lot which consideration is the fair market value determined at its
2 highest and best use in accordance with the Central City East Redevelopment Plan.
3
Section 4.
This Resolution shall take effect upon its adoption and execution in the
4
P "AgendasReso;utions'Resolutions'2008\1:-15-08 Waterman Holdings, llC - Amendmenll\o 4 :'ICC Reso (Con't) doc
1
2
3
4
5
6
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO CONSENTING TO THE DISPOSITION OF
CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO WATERMAN
HOLDINGS, LLC (4TH AND WATERMAN AVENUE - APN: 0135-191-17)
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a
7
meeting thereof,
21
22
23
24
25 By: ~
26 James F. Penman, City Attorney
17
18
19
20
27
28
, 2008, by the following vote to wit:
Nays
Abstain
Absent
Rachel G. Clark, City Clerk
The foregoing Resolution is hereby approved this
day of
,2008.
Patrick J. Morris, Mayor
City of San Bernardino
Approved as to Form:
5
P \Age~Ja"Re501L1tions'.Reso];.Jlions'20081~-15.08 \\'aterman Holdinp. LLC - Amendment;\o 4 \lC( Reso (Con't) doc
1
2
RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING THE SALE OF CERTAIN
REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF THE CITY
OF SAN BERNARDINO ("AGENCY") TO WATERMAN HOLDINGS, LLC,
AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE
AGENCY TO EXECUTE AMENDMENT NO.4 TO THE 2004 DISPOSITION
AND DEVELOPMENT AGREEMENT, AS AMENDED, BETWEEN THE
AGENCY AND WATERMAN HOLDINGS, LLC (4TH STREET AND
WATERMAN AVENUE - APN: 0135-191-17) (CENTRAL CITY EAST
REDEVELOPMENT PROJECT AREA)
3
4
5
6
7
8
9
10 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), is a
11 public body, corporate and politic existing under the laws of the State of California, Health and
12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and
13 underutilized land; and
14
WHEREAS, the Community Development Commission of the City of San Bernardino (the
15
"Commission") is the governing board of the Agency; and
16
17
WHEREAS, the City of San Bernardino, California (the "City") is a municipal corporation
18 and charter city, duly organized and existing pursuant to the provisions of the constitution of the
19 State of California; and
20 WHEREAS, on December 6, 2004, the Commission adopted Resolution No. CDC/2004-49
21 approving the sale of certain real property (APN: 0135-191-11) (the "Agency Property") by the
22 Agency to Waterman Holdings, LLC (the "Developer"), and authorizing the Agency Executive
23
Director to execute the 2004 Disposition and Development Agreement (the "DDA") between the
24
Agency and the Developer; and
25
26
WHEREAS, on June 20, 2005, the Commission adopted Resolution No. CDC/2005-19
27 approving and authorizing the Executive Director of the Agency to execute Amendment No.1 to the
28 DDA between the Agency and the Developer; and
1
P 'AgendasResoll.llionsResolutions'.1008 12-15-08 Waterman Holdings, lLC - Amendment ~o 4 CDC Reso (Con'r) doc
1 WHEREAS, Amendment No.1 to the DDA caused Phase I and Phase II of the Project to
2 exchange locations for each such Phase; and
3
WHEREAS, on June 19, 2006, the Commission adopted Resolution No. CDC/2006-20
4
approving and authorizing the Executive Director of the Agency to execute Amendment No.2 to the
5
DDA between the Agency and the Developer; and
6
7
WHEREAS, Amendment No.2 to the DDA eliminated the previously proposed Phase I and
Phase II of the Project and was replaced with a single phase Project consisting of the construction of
8
approximately 45,000 square feet, two-story building along with the appropriate and necessary
9
improvements and landscaping, as well as establishing a reimbursement schedule wherein the
10
Agency would pledge to the Developer, an amount equal to 60% of the 1 % of new property taxes
11
generated by the Project for a period of ten (10) years; and
12
13 WHEREAS, on July 21, 2008, the Commission adopted Resolution No. CDC/2008-26
14 approving and authorizing the Interim Executive Director of the Agency to execute Amendment No.
15 3 to the DDA between the Agency and the Developer; and
16
WHEREAS, Amendment No. 3 to the DDA will allow the Agency to reimburse the
17
Developer, from the Agency Property sale proceeds, an amount not to exceed the lesser ofthe actual
18
cost paid for the Off-Site Improvements or $399,500 utilizing prevailing wage rates; and
19
20
WHEREAS, this payment will be made to the Developer 30 calendar days following the
completion of the Project as evidenced by a Certificate of Occupancy issued by the City and upon
21
submission/validation by the Agency of the actual costs paid for the Off-Site Improvements; and
22
23 WHEREAS, the Agency owns certain real property, approximately .84 acres, located south
24 of the southwest corner of 4th Street and Waterman Avenue within the Central City East
25 Redevelopment Project Area and is presently an unimproved flood control channel, APN: 0135-
26 191-17 (the "Flood Control Channel Property"); and
27
WHEREAS, the Developer has determined that additional parking IS necessary for the
28
development of the Project to the north of the Flood Control Channel Property; and
2
P\A~er.Ca5ResQlu:j(msRes()IUlior.il00812.1 ~-08 Waterman Holdin~s. LlC - Amendment >;0 4 CDC Reso (Con'll doc
1 WHEREAS, the Developer has offered to purchase the Flood Control Channel Property
2 from the Agency; and
3
4
5
6
WHEREAS, an appraisal of the Flood Control Channel Property was performed in August
2008 by Smothers Appraisal (the "Appraiser"); and
WHEREAS, according to the report dated September 4, 2008 (the "Appraisal Report"),
7 prepared by the Appraiser, the fair market value of the Flood Control Channel Property is $36,000;
8 and
9 WHEREAS, the Agency intends to enter into Amendment No.4 to the DDA, as amended
10 (the "Amendment"), pursuant to which the Agency proposes to sell the Flood Control Channel
11 Property to the Developer for the fair market value of $36,000; and
12
13
WHEREAS, the Amendment provides for the development of the Flood Control Channel
Property so that it may be used as a parking lot; and
14
15 WHEREAS, the Developer has estimated that it will cost $1,100,000 for the construction of
16 the improvements to the Flood Control Channel Property; and
17
WHEREAS, the Agency has prepared and published a notice of joint public hearing in the
18
San Bernardino County SUN newspaper on October 20, 2008 and October 27, 2008, regarding the
19
20
21
consideration and approval of the Amendment; and
WHEREAS, pursuant to Health and Safety Code Section 33433(b), the Agency may transfer
22 the Flood Control Channel Property to the Buyer subject to the Mayor and Common Council of the
23 City of San Bernardino (the "Council") and the Commission adopting separate Resolutions
24 authorizing the Agency to transfer the Flood Control Channel Property in light of the findings set
25 forth herein, pursuant to Health and Safety Code Section 33433; and
26
WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety
27
Code Section 33433 (the "Report") that describes the salient point of the Amendment and identifies
28
the cost ofthe Amendment to the Agency; and
3
P .-\~ed3, Resol~!iO~5 Rc,oiutiQn;2008 .1:-15-08 Waterman Holdings LlC . Amendment !\o 4 CDC Reso (Con"ll doc
1 WHEREAS, pursuant to Section 15332 of the California Environmental Quality Act
2 Guidelines ("CEQA"), the Agency has reviewed the proposed sale and use of the Flood Control
3 Channel Property and has determined that the project, as identified in the Amendment, is exempt
4 from CEQA and qualifies as a Categorical Exemption, Class 32 (Guidelines 15332) as the project
5 meets all four requirements for an In-fill Project; and
6
WHEREAS, disposition of the Flood Control Channel Property to the Developer is
7
consistent with the Central City East Redevelopment Plan; and
8
9 WHEREAS, it is appropriate for the Commission to approve the Amendment and the
10 disposition of the Flood Control Channel Property to the Developer as set forth in the Amendment,
11 and this Resolution; and
12
WHEREAS, on November 3, 2008, the Commission discussed the Amendment and the sale
13
of the Flood Control Channel Property to the Developer, deciding to continue discussion on the
14
Amendment and the public hearing concerning the sale to the Developer to November 17,2008; and
15
16
WHEREAS, on November 17, 2008, the Commission continued the discussion of the
17 Amendment and public hearing of the sale of the Flood Control Channel Property to the Developer
18 to December 15,2008.
19
NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY
20 OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS:
21
Section 1.
On December 15, 2008, the Commission, as the governing board of the
22
Agency, conducted a full and fair joint public hearing with the Council relating to the disposition of
23
the Flood Control Channel Property from the Agency to the Buyer and the development thereof
24
pursuant to the Amendment. The rninutes of the Agency Secretary for the November 3, 2008
25
meeting of the Commission shall include a record of all communication and testimony submitted to
26
the Commission by interested persons relating to the public hearing and the approval of the
27
Amendment.
28
4
? \A"'~nd..s'Resolulions\ResollJtions',100S'12.15-08 Waterman Holdjnj!s, LLC - Amendment ~o 4 CDC Reso [Con't) doc
1
Section 2.
The Commission hereby receives and approves the Report and the other
2 written materials submitted to the Commission at the meeting at which this Resolution is adopted.
3 The Report contains information required under Health and Safety Code Section 33433.
4
Section 3.
This Resolution is adopted in order to satisfy the provisions of Health and
5 Safety Code Section 33433(a)(I) and (b)(2) related to the disposition of the Flood Control Channel
6 Property to the Buyer in accordance with the Amendment. The Commission hereby finds and
7 determines as follows: that the Report contains the information described in Health and Safety
8 Code Section 33433(b)(2), wherein the Flood Control Channel Property is being sold to the Buyer
9 at the purchase price of $36,000 for the development of a parking lot which consideration is the fair
10 market value determined at its highest and best use in accordance with the Central City East
11 Redevelopment Plan.
Section 4.
The Commission hereby approves the Amendment and the Interim
12
13 Executive Director is hereby authorized and directed to execute the Amendment on behalf of the
14
Agency together with nonsubstantive and conforming changes as may be recommended by the
15
Interim Executive Director and Agency Counsel. The Interim Executive Director is hereby
16
authorized to take all appropriate actions as set forth in the Amendment to implement the
17
disposition and redevelopment of the Flood Control Channel Property.
This Resolution shall take effect from and after its date of adoption by this
5
~^"O " ,< "0 ""_______ UA'A:~M IT r Am~n"~~~' ,<" J. rnr Il..<n Irnn',\ ,-l"r
1
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING THE SALE OF
CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO WATERMAN
HOLDINGS, LLC, AND AUTHORIZING THE INTERIM EXECUTIVE
DIRECTOR OF THE AGENCY TO EXECUTE AMENDMENT NO.4 TO
THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT, AS
AMENDED, BETWEEN THE AGENCY AND WATERMAN HOLDINGS,
LLC (4TH STREET AND WATERMAN AVENUE - APN: 0135-191-17)
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
2
3
4
5
6
7
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
8
Development Commission of the City of San Bernardino at a
meeting
9 thereof, held on the day of
10 Commission Members: Ayes
11 ESTRADA
12 BAXTER
13 BRINKER
14 VACANT
15 KELLEY
16 JOHNSON
17 MC CAMMACK
18
, 2008, by the following vote to wit:
Absent
Abstain
Nays
19
Secretary
20
The foregoing Resolution is hereby approved this
21
22
23
24
day of
,2008.
Patrick J. Morris, Chairperson
Community Development Commission
of the City of San Bernardino
25 Approved as to Form:
26
27 By:
28
~4!f
Agency Co nsel
6
AMENDMENT NO.4 TO THE
2004
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
WATERMAN HOLDINGS, LLC
(4th Street and Waterman Avenue Property)
This Amendment NO.4 (this "Fourth Amendment") is dated as of December 15, 2008, by
and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate
and politic (the "Agency"), and Watennan Holdings, LLC, a California limited liability company
(the "Buyer" or "Developer"), and is an amendment to that certain 2004 Disposition and
Development Agreement by and between the Agency and the Developer, 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 Watennan Avenue the City of San Bernardino ("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 June 20, 2005 (the "First
Amendment"), as amended by that certain Amendment No.2, dated June 19, 2006 (the "Second
Amendment") and as amended by that certain Amendment No.3, dated July 21, 2008 (the
'Third Amendment"), by and between the Agency and the Buyer, 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, wherein the
Buyer, without limitation, agreed to purchase certain land that the Agency owned at the
southwest comer of 4th Street and Watennan Avenue (the "Agency Property", fonnerly APN:
0135-191-11 and now APN: 0135-191-16 after and pursuant to the Lot Line Adjustment, as
defined below), in the City, County of San Bernardino (the "County"), State of California (the
"State"). The Agency and the Buyer executed the First Amendment to the DDA on June 20,
2005. The First Amendment modified the Agreement, to provide, without limitation, for the
transposition of the Phase 1 project and the Phase 11 project. The Agency and the Buyer executed
the Second Amendment to the DDA on June 19, 2006. The Second Amendment modified the
DDA and the First Amendment, to provide, without limitation, for the elimination of the Phase 1
and Phase 11 projects and was replaced by a single phase, two-story building of approximately
45,000 square feet of floor space, including the necessary and appropriate on-site improvements
and landscaping (the "Project").
P:\Agcndas\Agcnda Attachments\AgllTIts-Amcnd 2008\] 2-15-08 Watennan ~oldillgs, LLC ~ Amendment No. 4.doc
B. Pursuant to the Second Amendment, the Developer and the Agency, without
limitation, agreed to the following: (i) the Developer would purchase the Agency Property for
Five Hundred Twelve Thousand Four Hundred Twenty-Four Dollars ($5]2,424), (ii) the
Agency would reimburse the Developer a portion of the Agency Revenues (as defined in the
Agency Revenues Promissory Note (the "Note") attached as Exhibit 'T' to the Second
Amendment) to be received by the Agency, in the manner provided therein and subject to the
terms, covenants and conditions of the Note, and (iii) the Developer would have a right of first
refusal on the "Flood Control Channel Property" (as defined in the Second Amendment).
C. After the approval and execution of the Second Amendment, the City added
additional requirements to the Project by requiring the Developer to construct certain off-site
improvements including, without limitation, new curbs, rtters and sidewalks along 4th Street
and Waterman Avenue and street repair/resurfacing on 4' Street along the front of the Project
(collectively, the "Off-Site Improvements"). Pursuant to the Third Amendment, the Agency
agreed to reimburse the Developer for the actual costs paid by the Developer to construct the
Off-Site Improvements or the sum of Three Hundred Ninety-Nine Thousand Five Hundred
Dollars ($399,500), whichever is less, in the manner provided for in the Third Amendment.
D. The legal descriptions of the Agency Property and the Flood Control Channel
Property were revised and amended by the Lot Line Adjustment No. LLA 08-0] (the "Lot Line
Adjustment"), recorded on June 12, 2008, as Instrument No. 2008-0268868, in the Official
Records of the County Recorder's Office for the County of San Bernardino, State of California.
Pursuant to the Lot Line Adjustment, APN: 0135-19]-1] and APN: 0135-] 91 -15 were amended
and became APN: 0135- I 91 -16 and APN: 0135-191-17, respectively.
E. The Agency and the Developer wish to further amend the DDA, as amended by
the First Amendment, as amended by the Second Amendment and as amended by the Third
Amendment, pursuant to the terms, covenants and conditions of this Fourth Amendment.
F. Pursuant to this Fourth Amendment, the Agency and the Developer shall agree,
without limitation, to the following: (i) the Agency shall sell to the Developer, and the Developer
shall purchase from the Agency, the Flood Control Channel Property, for the sum of Thirty-Six
Thousand Dollars ($36,000), (ii) the legal description for the Agency Property and for the Flood
Control Channel Property shall be amended in accordance with and as revised by the Lot Line
Adjustment, and (iii) the Note shall be revised as provided for in the "Revised Agency Revenues
Promissory Note" attached hereto and to the DDA as Exhibit 'T'.
G. The Agency and the Buyer desire to approve and execute this Fourth Amendment
to the DDA upon the terms, covenants and conditions as set forth herein.
P:'..Agendas',Agenda Attachments\Agmlts-Amcnd 200R'. 12-] 5-0g Watelman Holdings, LLC - Amendment No, 4.doc
2
NOW, THEREFORE, THE AGENCY AND THE BUYER DO HEREBY AGREE
AS FOLLOWS:
I. Section 1.01. Purpose of Al!reement. In Section 1.0] of the DDA, the following shall
be deleted from the end of the first section "the granting by the Agency to the Buyer of the First
Refusal Right, and the exercise by the Buyer of the First Refusal Right." and replaced with the
following "and the Flood Control Channel Property." Additionally, the second sentence of
Section 1.01 shall be deleted in its entirety and replaced with the following "The purchase and
development of the Agency Property and the Flood Control Channel Property 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."
2. Section 1.03. Benefit to Proiect Area. Section 1.03 of the DDA shall be deleted in its
entirety and replaced with thc following: "The Agency has determined that the purchase and
development of the Agency Property and Flood Control Channel Property by the Buyer, in
accordance with this Agreement, will materially assist in the elimination of blight and the
implementation of the Redevelopment Plan for the Project Area."
3. Section 1.06. Chanl!e in Manal!ement and Control of Buver - Assil!nment and
Transfer. In Section 1.06(a)(1) of the DDA, the wording "and/or the Flood Control Channel
Property" shall be added immediately following the word "Property" ]n Section 1.06(a)(3) of
the DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the word "Property" In Section 1.06(a)(4) of the DDA, the word "Agency" shall be
added immediately preceding the word "Property" and the wording "and/or the Flood Control
Channel Property" immediately following the "Property."
4. Section 1.07. List of Attachments to Al!reement. As a result of the Lot Line
Adjustment which was necessary for the development of the Project, the legal descriptions and
assessor's parcel number for both the Agency Property and for the Flood Control Channel
Property have been changed. Accordingly. Exhibit "A", Exhibit "B", Exhibit "C", Exhibit "E"
and Exhibit "F" of the DDA, as revised by the First Amendment, by the Second Amendment and
by the Third Amendment, shall be deleted and replaced by the following Exhibits (which
Exhibits are attached hereto and incorporated herein by this reference):
Exhibit "A" "Revised Legal Description of the Agency Property"
Exhibit "B" "Revised Site Map of the Agency Property and thc
Flood Control Channel Property"
Exhibit "C" "Revised Legal Description of the Flood Control Channel Property"
Exhibit "E" "Revised Improvements"
Exhibit "F" "Revised Agency Revenues Promissory Note"
P:"Agcndas".Agend<l Attachlllents\Agnnts-Amcnd 2008\12-] 5-08 \Valennan Holdings. LLC - Amendment No. 4.doc
3
5. Section 1.08. No Recordation of A!!reement: Survival. In line two (2) in Section 1.08
of the DDA, the word "Agency" shall be added immediately preceding the word "Property".
The wording "and/or the Flood Control Channel Property" shall be immediately added following
the word "Property", where appearing in Section 1.08 of the DDA.
6. Section 1.09. Flood Control Channel Property. Section 1.09 shall be added to the
DDA as follows: "The flood control channel consists of approximately 0.84 acres that is
presently aligned to the south of the Agency Property (the "Flood Control Channel Property").
The Buyer intends to purchase and to develop the Flood Control Channel Property as additional
parking for the Project. The Buyer shall be entitled to close escrow to acquire the Flood Control
Channel Property at anytime on or before April 30, 2009, unless such date is extended, in
writing, at the discretion of the Interim Executive Director for a total period of time not to exceed
six (6) months without an amendment to this Agreement.
7. Section 2.01. ACQuisition and Disposition of the Property. In Section 2.01 of the
DDA, the word "Agency" shall be added immediately preceding the word "Property" and the
wording "and Flood Control Channel Property" shall be added immediately following the word
"Property", where appearing in the title. Additionally, the wording "and Flood Control Channel
Property" shall be added immediately following the word "Property", wherever found in this
Section.
8. Section 2.02. Conditions for Transfer of the A!!encv Property. In Section 2.02(a) and
Section 2.02(b) of the DDA, the wording "and Flood Control Channel Property" shall be added
immediately following the word "Property", where appearing in the title. Section 2.02(c) shall
be added to the DDA as follows: "The Flood Control Channel Property shall be transferred to the
Buyer at the Close of Escrow provided that within the periods of time set forth in this Agreement
(i) neither party has terminated this Agreement, (ii) the Buyer has delivered to the Agency the
Due Diligence Certificate in connection with the Flood Control Channel Property regarding
Section 2.11 and (iii) all other conditions of the Close of Escrow in connection with the Flood
Control Channel Property set forth in this Agreement have been met and the escrow costs
relating to the Close of Escrow have been paid by the appropriate party." Section 2.02(d) shall
be added to the DDA as follows: "The parties shall deliver jointly, approved written escrow
instructions (consistent with the terms of this Agreement) to the Escrow Holder for transfer of
the Flood Control Channel Property, as soon as reasonably possible."
9. Section 2.03. Purchase Price. The Purchase Price for thc Flood Control Channel
Property shall be Thirty-Six Thousand Dollars ($36,000) (the "Flood Control Channel Property
Purchase Price").
10. Section 2.04. Openin!! of Escrow. Section 2.04(c) shall be added to the DDA as
follows: "The transfer and sale of the Flood Control Channel Property shall take place through
Escrow to be administered by the Escrow Holder. The Escrow for the Flood Control Channel
Property shall be deemed open (the "Opening of Escrow") upon receipt by the Escrow Holder of
a fully executed copy of the Agreement, the First Amendment, the Second Amendment, the
Third Amendment and this Fourth Amendment. The Escrow Holder shall promptly confirm to
P:'Agcndas\Agenda Attachmcnts\Agnnts-Amcnd 2008\12-J 5-08 Watelman Holdings, LLC - Amendment No. 4.doc
4
the parties the escrow number and the title insurance order number assigned to the Escrow for
the Flood Control Channel Property with the Escrow Holder."
II. Section 2.06(a). Convevance of Title. In Section 2.06(a) of the DDA, the wording
"and Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section. Additionally, Section 2.06(a)(3) shall be
amended as follows: "(3) the Redevelopment Plan (existing as of the date of the Fourth
Amendment)."
12. Section 2.07. Additional Closing Obligations of Agencv. In Section 2.07 of the DDA,
the wording "and/or Flood Control Channel Property" shall be added immediately following the
wording "Agency Property", where appearing in this Section.
] 3. Section 2.08. Closinl! Obligations of Buver. In Section 2.08 of the DDA, the wording
"and/or Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section.
]4. Section 2.09. Environmental Law. In Section 2.09 of the DDA, the wording "and/or
the Flood Control Channel Property" shall be immediately added following the word "Agency
Property", where appearing in this Section.
]5. Section 2.10. Due Diligence Investigation of the Agencv Property. In the section
heading for Section 2.10 of the DDA, the wording "and/or Flood Control Channel Property"
shall be added immediately following the wording "Agency Property." In Section 2.10(a) of the
DDA, the wording "and/or Flood Control Channel Property" shall be added immediately
following the wording "Agency Property". In Section 2.10(b) and (c) the wording "and/or the
Flood Control Channel Property" shall be added immediately following the wording "Agency
Property." In Section 2.IO(d) of the DDA, the word "Agency" shall be added immediately
preceding the word "Property" and the wording "and/or the Flood Control Channel Property"
shall be added immediately following the word "Property." In Section 2.10(e) of the DDA, the
wording "and/or the Flood Control Channel Property" shall be added immediately following the
wording "Agency Property"
]6. Section 2.]1. Due Diligence Certificate. In Section 2.1 I, Section 2.1 lea) and Section
2.11(b) of the DDA, the wording "and/or Flood Control Channel Property" shall be added
immediately following the wording "Agency Property", where appearing in this Section.
]7. Section 2.12. Books and Records. In line three (3) of Section 2.12 of the DDA, the
words "respective portion of the" shall be deleted. Additionally, the wording "and/or Flood
Control Channel Property" shall be added immediately following the wording "Agency
Property", where appearing in this Section.
]8. Section 2.13 Condition of the Property. In Section 2.13 of the DDA, the wording
"and/or Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section.
P:"Agendas"Agenda Attachments\Agl1llts-Amend 200812-15-08 Walcnnan Holdings; LLC - Amendment No 4.doc
5
19. Section 2.14. Review and Approval of Condition of Title. In Section 2.14(a) and
Section 2.14(b) of the DDA, the wording "and/or Flood Control Channel Property" shall be
added immediately following the wording "Agency Property", where appearing in this Section.
20. Section 2.15. Special Provisions Applicable to the Close of Escrow for the Flood
Control Channel Property.
The parties recognize that the Flood Control Channel Property is subject to the jurisdiction of the
United States Army Corps of Engineers (the "Corps of Engineers") as the Flood Control Channel
Property was a formerly designated water course of the United States, and as such the Developer
will be required to obtain the issuance of certain permits and discretionary approvals from the
Corps of Engineers. In addition to compliance by the Developer with the requirements of
Sections 2.02, 2.07, 2.10,2.] 1,2.13 and 2.14 as amended by Amendment NO.4 to this DDA, the
Escrow for the sale of the Flood Control Channel Property from the Agency to the Developer
shall not occur until there has been full compliance by the Developer with the following special
provisions applicable to the Flood Control Channel Property as such compliance shall be
determined by the Interim Executive Director of the Agency with the concurrence of the Director
of Development Services of the City, each at their sole and absolute discretion:
(i) The City through the Development Services Department has completed all
environmental reviews and assessments as deemed appropriate by the City pursuant
to both CEQA and NEP A, as applicable, for the intended use by the Developer of the
Flood Control Channel Property for an at-grade parking structure; and
(ii) The Developer has agreed to all mitigation measures for the Flood Control Channel
Property as shall be contained in the final CEQA and NEP A reviews and
determinations of the intended scope of development of the Flood Control Channel
Property as an at-grade parking structure; and
(iii) The City has received adequate written, binding and enforceable assurances from the
Developer that the Developer will in fact comply with all mitigation measures as
identified in the CEQA and NEP A reviews and approvals for the development of the
Flood Control Channel Property as an at-grade parking structure; and
(iv) All applicable permits and approvals have been issued by the Corps of Engineers and
all other federal, state and local governmental agencies having jurisdiction as to the
intended use and development of the Flood Control Channel Property as such
sufficiency as to the issuance of permits and approvals shall be determined by the
Director of Development Services; and
(v) The D/ERC has approved the development of the Flood Control Channel Property as
an at-grade parking structure and has imposed conditions of approval for the
development and use thereof by the Developer consistent with the intended uses, and
all City pennits have been issued and approvals granted to allow for the development
P:\Agcndas\Agenda Attachments...;\gnnls-Amcnd 2008'.12-15-08 Watemlan Holdings, LLC - Amendment No. 4.doc
6
by the Developer of the at-grade parking structure improvements upon the Flood
Control Channel Property; and
(vi) The Developer has entered into a "Defense, Indemnification and Hold Harmless
Agreement" with the City in such form and content acceptable to the City, and
subject to approval by the Mayor and Common Council at a public meeting, whereby
the Developer has agreed to defend, indemnifY and hold harmless the City, the
Agency and all elected officials, appointed officers and staff and consultants of the
City and the Agency from all losses and damages that may be suffered as the result of
the use of the Flood Control Channel Property by the Developer, including, but not
limited to, the injury or loss of life and property damage from water flows, flood
waters and debris flows and debris blockages that cause flooding or water damages to
any other property or result in any other damages, injury or loss of life and Agency to
maintain general liability insurance in the amount of$3,000,000; and
(vii) The Developer has entered into a "Maintenance and Operation Agreement" with the
City in such form and content acceptable to the City, and subject to approval by the
Mayor and Common Council at a public meeting, whereby the Developer has agreed
to maintain the Flood Control Channel Property and the improvements to be
constructed within and above the Flood Control Channel Property in such condition
as shall be determined by the City Engineer to be required from time-to-time; such
Maintenance and Operation Agreement shall also permit but not require the City to
enter into the Flood Control Channel Property and to conduct routine testing and
observations to assure compliance with all applicable permits and other laws
applicable thereto and consistent with the CEQA and NEP A mitigation measures and
all other permits and approvals as issued by any other federal, state or local
governmental agencies having jurisdiction over the Flood Control Channel Property;
furthermore, the City shall be permitted but not required to enter into and upon the
Flood Control Channel Property and to undertake all maintenance activities as shall
be reasonably determined by the City Engineer as necessary under the circumstances
and shall have the right to impose an enforceable lien upon the other property
identified in Amendment No.3 to this DDA as the Agency Property and the Project
as may be then in the ownership of either the Developer or any other successor in
interest to recover all costs of such maintenance activities. The provisions of Section
2.15 shall survive the termination of this DDA and shall be a covenant that shall run
with the land and shall be binding on all successors and assih'11ees of Waterman
Holdings, LLC.
21. Section 3.01. Uses. In Section 3.01 of the DDA, the wording "and the Flood Control
Channel Property" shall be added immediately following the wording "Agency Property", where
appearing in this Section.
22. Section 3.02. Modification of Covenants. In Section 3.02(a), Section 3.02(b), Section
3.02(c) and Section 3.02(d) of the DDA, the wording "and/or Flood Control Channel Property"
P:\Agendas\Agenda AnachmelltslAgnnts-Amend 2008\ 12-15-08 Watennan Holdings. LLC - Amendment No_ 4_doc
7
shall be added immediately following the wording "Agency Property", where appearing in this
Section.
23. Section 3.03. Qblil!ation to Refrain from Discrimination. In Section 3.03 of the
DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the wording" Agency Property", where appearing in this Section.
24. Section 3.05. No Liability for Breach to a Predecessor in Interest. In Section 3.05 of
the DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property", where appearing in this Section.
25. Section 3.06. Al!encv Quit Claim Deed. Section 3.06 of the DDA shall be deleted in
its entirety and replaced with the following: "All of the provisions in Sections 3.01 to 3.05,
inclusive, shall be included in the Agency Quit Claim Deed for the Agency Property and the
Flood Control Channel Property. Accordingly, Sections 3.01 to 3.05, inclusive, shall survive the
Close of Escrow."
26. Section 3.07. Maintenance Condition of the Al!encv Property. In the heading for
Section 3.07 of the DDA, the wording "and Flood Control Channel Property" shall be added
immediately following the wording "Agency Property." In Section 3.07(a) and Section 3.07(b)
of the DDA, the wording "and/or the Flood Control Channel Property" shall be added
immediately following the wording "Agency Property", where appearing in Section 3.07(a) and
Section 3.07(b).
27. Section 3.08. Pledl!e of Al!encv Revenues to Buver. In Sections 3.08(a), 3.08(e) and
3.08(f) of the DDA, the word "Revised" shall be added immediately preceding the wording
"Agency Revenues Promissory Note." Additionally, the wording "and Flood Control Channel
Property" shall be added immediately following the wording "Agency Property", where
appearing in Section 3.08(a), Section 3.08(b), Section 3.08(c), Section 3.08(d) and Section of
3.08(e) of the DDA.
28. Section 3.10. Developer First Refusal Ril!ht. Section 3.10 of the DDA shall be
deleted, in its entirety.
29. Section 4.01. Defaults and Remedies. In Section 4.01(c) and Section 4.01(g) of the
DDA, the wording "and the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property".
30. Section 5.02. Conflict of Interest. In Section 5.02 of the DDA, the wording "and/or
Flood Control Channel Property" shall be added immediately following the wording "Agency
Property", where appearing in this Section.
31. Section 5.05. Enforced Delav; Extension of Time of Performance. In line ten (10) in
Section 5.05(b) of the DDA, the word "Agency" shall be added immediately preceding the word
"Property" and the wording "and/or the Flood Control Channel Property" shall be added
P:'AgenJas'Agenda AttachlllclltsAgllllls"Am~nd 2008', 12~ 15-08 Watel1nan Holdings, LLC - Amendment No 4.doc
8
immediately following the wording "Agency Property." In line nine (9) in Section 5.05(c) of the
DDA, the word "Agency" shall be added immediately preceding the word "Property" and the
wording "and/or the Flood Control Channel Property" shall be added immediately following the
wording "Agency Property."
32. Section 5.06. Inspection of Books and Records. In Section 5.06 of the DDA, the
wording "and/or Flood Control Channel Property" shall be added immediately following the
wording "Agency Property", where appearing in this Section.
33. Section 5.13. Entire Agreement. The Agreement, as amended by the First Amendment,
as amended by the Second Amendment, as amended by the Third Amendment and as amended
by this Fourth Amendment constitutes the entire understanding and agreement between the
parties with respect to the Agency Property and the Flood Control Channel Property.
34. Section 5.14. Integration. In Section 5.14 of the DDA, the wording "and Flood Control
Channel Property" shall be added immediately following the wording "Agency Property", where
appearing in this Section.
35. Exhibit Headings. The following Exhibit headings shall be modified as set forth below:
Exhibit "A". Exhibit "A" shall be amended as follows:
"REVISED LEGAL DESCRIPTION FOR THE AGENCY PROPERTY"
Exhibit "B". Exhibit "B" shall be amended as follows together with the inclusion of a
new Site Map for the Agency Property and the Flood Control Channel Property:
"REVISED SITE MAP FOR THE AGENCY PROPERTY AND FOR THE FLOOD
CONTROL CHANNEL PROPERTY"
Exhibit "C". Exhibit "C" shall be amended as follows:
"REVISED LEGAL DESCRIPTION OF THE FLOOD CONTROL CHANNEL
PROPERTY"
Exhibit "E". Exhibit "E" shall be amended as follows:
"REVISED IMPROVEMENTS"
Exhibit "F". Exhibit "F" shall be amended as follows:
"REVISED AGENCY REVENUES PROMISSORY NOTE"
36. Legal Effect. The DDA, the First Amendment, the Second Amendment and the Third
Amendment shall only be amended to the extent set forth herein. All other tenns, covenants
P: Agelldas'Agenda Attachments\Agnnts-AmClld 2008J2-15-08 W(jtl.:lman Holdings, LLC - Amendment No. 4 doc
9
and/or conditions of the DDA, the First Amendment, the Second Amendment and the Third
Amendment, unless specifically amended or modified by the terms, covenants and/or conditions
of this Fourth 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 Fourth Amendment, and the DDA and/or the First Amendment and/or the Second
Amendment and/or the Third Amendment, the inconsistency, contraction and/or ambiguity shall
be resolved in favor of the terms, covenants and conditions set forth in this Fourth Amendment.
37. Defined Terms, Terms not otherwise defined or redefined in this Fourth Amendment
shall have the meanings provided for in the Second Amendment.
38. Effective Date. This Fourth Amendment shall take effect from and after the date of final
approval hereof by the governing body of the Agency at a duly held joint public hearing and
after the execution of this Fourth Amendment by the Agency and the Buyer.
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p:'Agendas'.Agenda Attachments:Agmlts-Amend 2008\12-15-0R \ValenTIan Holdings, LLC - Amendment No. 4.doc
10
IN WITNESS WHEREOF, the parties have signed this Fourth Amendment as of the date
first set forth above.
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Dated:
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
By: C/~~
Agency C nse
DEVELOPER
Waterman Holdings, LLC,
a California limited liability company
Dated:
By:
Jian Torkan
P:\Agendas\Agenda Attachments\Agrrnts-Amend 2008\12-15-08 Watennan Holdings, LLC - Amendment No. 4.doc
II
Exhibit "A"
Revised Legal Description of the Agency Property
APN: 0135-191-16
PARCEL 1 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN
BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS.
PAGES I AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO. STATE
OF CALIFORNIA.
EXCEPTING THERE FROM THAT PORTION OF SAID PARCEL 1 DESCRIBED AS
FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1. SAID POINT
ALSO BEING THE NORTHWEST CORNER OF PARCEL 9 OF SAID OF PARCEL
MAP NO. 7140;
THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID
PARCEL 1;
THENCE LEAVING SAID WEST LINE SOUTH 89056'51" EAST 275.19;
THENCE SOUTH 86024'16" EAST 260.00 TO A POINT ON THE SOUTH LINE OF
SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9;
THENCE SOUTH 89059'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND
SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1. AND THE
POINT OF BEGINNING.
P:\Agendas\Agenda Attachments\Agnnts-Amend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
12
Exhibit "8"
Revised Site Map of the Agency Property the Flood Control Channel Property
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\12.15-08 Waterman Holdings, LLC - Amendment No. 4.doc
13
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Exhibit "e"
Revised Legal Description of the Flood Control Channel Property
APN: 0135-191-17
PARCEL 9 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN
BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS, PAGES
1 AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE OF
CALIFORNIA
TOGETHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 7140,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1, SAID POINT
ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 9;
THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID
PARCEL 1;
THENCE LEAVING SAID WEST LINE SOUTH 89056'51" EAST 275.19;
THENCE SOUTH 86024'16" EAST 260.00 TO A POINT ON THE SOUTH LINE OF
SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9;
THENCE SOUTH 89059'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND
SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE
POINT OF BEGINNING.
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\12.15-08 Watennan Holdings, LLC - Amendment No. 4.doc
14
Exhibit "D"
Form of Agency Quitclaim Deed
(NO CHANGES MADE]
P:\Agendas\Agenda Anachments\Agrmts-Amend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
15
Exhibit "E"
Revised Improvements
The Improvement on the Agency Property shall consist of approximately a 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.
The Improvement of the Flood Control Channel Property shall consist of a single floor structure
built above the Flood Control Channel Property to provide additional parking spaces for the 2-
story, 45,000 square foot building. The construction, landscaping, etc., of the single floor
parking structure shall comply with the City's Development Code and requirements from any
federal and/or state governmental agency, concerning improvements to and/or near flood control
channel land, that may be imposed on the Developer.
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
16
Exhibit "F"
Revised Agency Revenues Promissory Note
P:\Agendas\Agenda Anachments\Agrmts.Amend 2008\12-15-08 Watennan Holdings, LLC - Amendment No. 4.doc
17
REVISED AGENCY REVENUES PROMISSORY NOTE
Date: July _, 200_
Los Angeles, California
The undersigned, the Redevelopment Agency of the City of San Bernardino, a public agency
(the "Agency"), promises to pay, and pledges to Waterman Holdings, LLC, a California limited
liability company (the "Buyer"), or the Buyer's assignee, one or more principal advances of a
portion of the Agency Revenues (as that term is defined below) due and owjng by the Agency to the
Buyer in accordance with and pursuant to the terms, covenants and conditions of this Revised
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 this 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 this
Note are payable by the Agency to the Buyer at 4221 Wilshire Boulevard, 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 Ae:reement. The "Agreement" shall mean the Original Agreement (as defined
below), as amended by the First Amendment (as defined below), as further amended by the Second
Amendment (as defined below), as further amended by the Third Amendment (as defined below)
and as further amended by the Fourth Amendment (as defined below), as executed by and between
the Agency and the Buyer, and all exhibits attached thereto.
1.2 Certificate of OccuDancv. 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 Second Amendment) and at the Flood Control Channel Property.
1.3 City. The "City" shall mean the City of San Bernardino.
1.4 County. The "County" shall mean San Bernardino County.
I of?
P,\A~enda5\Agenda Attachmentslbhibits\2008\12-15-08 Waterman Holdings. LLC - Revised Agency Promissory 1\OIe (Exhibit F)doc
1.5 First Amendment. The "First Amendment" shall mean that certain Amendment No.
I to the Original Agreement, dated June 20, 2005, as executed by and between the Agency and the
Buyer.
1.6 Fourth Amendment. The "Fourth Amendment" shall mean that certain Amendment
No.4 to the Original Agreement, dated December 15,2008, as executed by and between the Agency
and the Buyer.
1.7 Fiscal Year. The "Fiscal Year" shall mean any given fiscal year for the County.
1.8 Initial Fiscal Year. The "Initial Fiscal Year" shall mean the first (I ") Fiscal Year
following the Fiscal Year in which the City issued the Certificate of Occupancy.
1.9 Interest Rate. The "Interest Rate" shall mean five percent (5%) per annum which
shall only apply to late payments remitted by the Agency to the Buyer and such Interest Rate shall
not be calculated upon the unpaid Principal balance of this Note, and shall accrue in the manner
provided for in Section 3(b) of this Note.
1.10. Late Chan!:e. The "Late Charge" shall mean three percent (3 %) on the payment due
and owing by the Agency to the Buyer under this Note (subject to any applicable cure period(s) in
this Note and/or the Agreement).
1.11 Maturity Date. The "Maturity Date" shall mean the first business day following the
expiration of the Term.
1.12 Orh!:inal 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.
1.13 Princioal. 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. As of the date of this Note,
there is no discemable method to calculate the total Principal amount that may be payable by the
Agency to the Buyer pursuant hereto.
1.14 Second 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.
1.15 Term. The "Term" shall mean the term of this Note commencing on the date of
execution of this Note and continuing thereafter until the end of the tenth (10th) Fiscal Year (with
the Initial Fiscal Year being the first Fiscal Year of this ten (1 O)-year Fiscal Year period). This Note
has been duly executed and delivered as of July 1 the next succeeding Fiscal Year of the Agency
20f7
P:\Agendas"Agenda Artachments\Exhibits\2008\12-1S-01l Waltnnan Holdings, LLC - Revised Agency Promissory l"ole (Exhibit F) doc
during which the Buyer has obtained a Certificate of Occupancy from the City of San Bernardino for
the project described in the Original Agreement, as amended.
1.16 Third Amendment. The "Third Amendment" shall mean that certain Amendment
No.3 to the Original Agreement, dated as of July 21, 2008, by and between the Agency and the
Buyer.
2. Interest. Interest shall not be paid on the Principal balance of this Note but shall be paid only
upon a default or other late payment by the Agency as provided in this Note. Subject to Section 3(b)
of this Note, 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 Chare: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") in an
amount based upon the Index as hereinafter defined. The Index for the calculation of the dollar
amount ofthe 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 and/or the Buyer's successor-in-
interest to the ownership of the Agency Property and of the Flood Control Channel Property
attributable to the development to occur on the Agency Property and on the Flood Control Channel
Property pursuant to this Agreement (such 60% of the 1% ofthe real property taxes as actually paid
by the Buyer and/or Buyer's successor-in-interest to the ownership of the Agency Property and of
the Flood Control Channel Property 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 the Flood Control Channel 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 and of the Flood Control Channel 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 and on the Flood Control Channel Property as of each December 10 and/or April I 0 (or any
other delinquency date established by the County for the payment of supplemental property taxes)
have been duly paid. 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 the adequacy of the documentation as submitted by
the Buyer within the applicable 30-day period of time, shall constitute approval of same by the
Agency. The Agency shall be obligated to provide written notice to the Buyer within said 30-day
period of time, as to any inadequacy of any documentation provided by the Buyer to the Agency.
Failure of the Agency to remit the requested payment of the Agency Revenues within ten (10)
30f7
P:\Agendas\Agenda Attachments"Exhibits\2008112.)5.08 Watennan Holdings, LLC - Re~ised Agency Promissory Note (Exhibit F)doc
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) It shall be a condition precedent to each payment of the Agency Revenues
hereunder that as of each such Agency Revenues payment due date there has been no Transfer (as
defined in the Agreement), assignment, or sale or other conveyance of the Agency Property or of the
Flood Control Channel Property or any interest in the Agreement which is prohibited by the
Agreement.
(d) In the event that the Buyer should Transfer any interest in the Agreement, this
Note and/or the Agency Property and/or the Flood Control Channel Property in violation of the
Agreement or this Note, or sell the Agency Property and/or the Flood Control Channel Property in
violation of the Agreement or this Note, prior to the expiration of the applicable ten-year period for
the receipt of the Agency Revenues, the obligation of the Agency for any further remittances of the
Agency Revenues shall immediately cease and terminate as to that portion of the Agency Property
and/or of the Flood Control Channel Property to which such prohibited Transfer or other sale or
conveyance has occurred.
(e) Notwithstanding anything herein to the contrary, upon the issuance of a
Certificate of Occupancy by the City for the Agency Property and/or for the Flood Control Channel
Property, any of the following transactions shall not be deemed a "Transfer" prohibited by the
Agreement or this Note: (i) the transfer of fee title to the Agency Property and/or to the Flood
Control Channel Property to any entity in which an entity directly or indirectly, majority-owned and
controlled by Jian T orkan, is the general partner or managing member or partner, (ii) a transfer of fee
title to the Agency Property and/or to the Flood Control Channel Property in a transaction in which
the Buyer enters into a lease for the Agency Property and/or for the Flood Control Channel Property
pursuant to which it is obligated to pay all property taxes, or (iii) a transfer to any entity which is
directly or indirectly majority-owned and controlled by Jian Torkan. On and after the issuance of the
Certificate of Occupancy as specified above and for a period of time equal to ten (10) years after the
date ofthe issuance of the Certificate of Occupancy, and in addition to the ability of the Buyer to
enter into a transaction that is deemed not to be a Transfer as defmed above, the Buyer may sell,
transfer or assign the Agency Property and/or the Flood Control Channel Property, the Agreement
and this Note to any other person or entity subject to the following: (i) such subsequent owner of the
Agency Property and/or of the Flood Control Channel Property has assumed in writing all duties and
obligations of the Buyer as contained in the Agreement and this Note in form and substance as may
be reasonably required by the Agency General Counsel and (ii) the subsequent owner has assumed
all Agency Property and/or Flood Control Channel Property maintenance, covenants and obligations
set forth in the Agreement, or in any other document mutually executed by Buyer and the Agency.
Following the ten (10) year period referred to above, there shall be no restriction or condition to any
sale oftransfer by the Buyer of the Agency Property and/or of the Flood Control Channel Property
and/or the Buyer's interest in this Agreement. Following the expiration of the Term, the Agency
shall have no further duty or obligation to make any payment of the Agency Revenues, or any
portion thereof, to the Buyer or to any successor-in-interest in the ownership of the Agency Property
and/or of the Flood Control Channel Property (except for the Agency Revenues and/or any other
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amounts due and owing by the Agency to the Buyer under this Agreement). Notwithstanding
anything herein to the contrary, any transfer of the Agency Property and/or of the Flood Control
Channel Property and/or the Buyer's interest in the Agreement and in this Note pursuant to a
foreclosure or deed-in-lieu thereof shall not constitute a prohibited Transfer.
(f) 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 this 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 the notice or
otherwise as set forth in this 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. Prepayment. 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, but only if interest is payable due
to a prior payment default by the Agency, and any and all late charges or other amounts then owed
by the Agency hereunder.
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, if any, and then to Principal then due and payable under this Note.
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 this
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
recogrnzed 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:
5 of?
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Address for the Agency:
Redevelopment Agency of the City of San Bernardino
Attention: Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, CA 92401
Address for the Buyer:
Waterman Holdings, LLC
Attention: Jian Torkan
4221 Wilshire Boulevard, Suite 240
Los Angeles, CA 90010
9. Default. Subject to Section 7 ofthis 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 the
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, the 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 this Note and/or the Agreement (collectively, the "Default Payment
Amount"), and the Agency shall immediately pay to the Buyer the Default Payment Amount.
10. Unsecured Promissorv 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. Headinl!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. Governinl! Law. This Note shall be governed by and construed in accordance with the laws
of the State of California.
15. Judicial Proceedinl!s and Attornevs' Fees. If either party hereto files any action or brings
any action or proceeding against the other arising out of this Note, then as between the Buyer and the
Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as
damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a
separate action or proceeding brought to recover such attorneys' fees. The costs, salary and
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expenses of the City Attorney for the City and members of his office in enforcing this Note shall be
considered as "attorneys' fees" for purposes of this Section. Any such action or proceeding must be
commenced in the Superior Court for the County of San Bernardino, San Bernardino District, State
of California.
16. Enforcement Costs. All reasonable out-of-pocket costs incurred by the Buyer in the
enforcement of this Note shall be added to the amounts due under this Note.
17. Assienment. This Note may be assigned by the Buyer, subject to the restrictions and
limitations provided for in Section 3.08(c), 3.08(d) and 3.08(e) ofthis Note and by the Agency, but
no such assignment shall relieve the Agency from any of its obligations or liabilities hereunder. The
terms, covenants and conditions of this Note shall be binding upon, and inure to the benefit of, the
successors and assigns of the Buyer (subject to the restrictions and limitations provided for in
Section 3.08(c), 3.08(d), and 3.08(e)ofthis Note) and of the Agency.
IN WITNESS WHEREOF, the Agency has executed this Agency Revenues Promissory
Note as ofthe date first written above.
AGENCY
Redevelopment Agency of the City of San Bernardino
a public agency
By:
Emil A. Marzullo, Interim Executive Director
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AMENDMENT NO.4 TO THE
2004
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
WATERMAN HOLDINGS, LLC
(4'h Street and Waterman Avenue Property)
This Amendment No.4 (this "Fourth Amendment") is dated as of December 15, 2008, by
and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate
and politic (the "Agency"), and Waterman Holdings, LLC, a California limited liability company
(the "Buyer" or "Developer"), and is an amendment to that certain 2004 Disposition and
Development Agreement by and between the Agency and the Developer, 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 City of San Bernardino ("City") and within the
Central City East Redevelopment Project Area of the Agency (the "DDA" or "Agreement"), as
amended by that certain Amendment No. I to the DDA, dated June 20, 2005 (the "First
Amendment"), as amended by that certain Amendment No.2, dated June 19,2006 (the "Second
Amendment") and as amended by that certain Amendment No.3, dated July 21, 2008 (the
"Third Amendment"), by and between the Agency and the Buyer, and is entered into in light of
the facts set forth in the following Recital Paragraphs.
RECIT ALS
A. The Agency and the Buyer executed the DDA on December 6, 2004, wherein the
Buyer, without limitation, agreed to purchase certain land that the Agency owned at the
southwest comer of 4th Street and Waterman Avenue (the "Agency Property", formerly APN:
0135-191-11 and now APN: 0135-191-]6 after and pursuant to the Lot Line Adjustment, as
defined below), in the City, County of San Bernardino (the "County"), State of California (the
"State"). The Agency and the Buyer executed the First Amendment to the DDA on June 20,
2005. The First Amendment modified the Agreement, to provide, without limitation, for the
transposition of the Phase I project and the Phase II project. The Agency and the Buyer executed
the Second Amendment to the DDA on June 19. 2006. The Second Amendment modified the
DDA and the First Amendment, to provide, without limitation, for the elimination of the Phase I
and Phase 11 projects and was replaced by a single phase, two-story building of approximately
45,000 square feet of floor space, including the necessary and appropriate on-site improvements
and landscaping (the "Project").
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B. Pursuant to the Second Amendment, the Developer and the Agency, without
limitation, agreed to the following: (i) the Developer would purchase the Agency Property for
Five Hundred Twelve Thousand Four Hundred Twenty-Four Dollars ($512,424), (ii) the
Agency would reimburse the Developer a portion of the Agency Revenues (as defined in the
Agency Revenues Promissory Note (the "Note") attached as Exhibit "F" to the Second
Amendment) to be received by the Agency, in the manner provided therein and subject to the
terms, covenants and conditions of the Note, and (iii) the Developer would have a right of first
refusal on the "Flood Control Channel Property" (as defined in the Second Amendment).
C. After the approval and execution of the Second Amendment, the City added
additional requirements to the Project by requiring the Developer to construct certain off-site
improvements including, without limitation, new curbs, gutters and sidewalks along 4th Street
and Waterman Avenue and street repair/resurfacing on 4th Street along the front of the Project
(collectively, the "Off Site Improvements"). Pursuant to the Third Amendment, the Agency
agreed to reimburse the Developer for the actual costs paid by the Developer to construct the
Off-Site Improvements or the sum of Three Hundred Ninety-Nine Thousand Five Hundred
Dollars ($399,500), whichever is less, in the manner provided for in the Third Amendment.
D. The legal descriptions of the Agency Property and the Flood Control Channel
Property were revised and amended by the Lot Line Adjustment No. LLA 08-01 (the "Lot Line
Adjustment"), recorded on June 12, 2008, as Instrument No. 2008-0268868, in the Official
Records of the County Recorder's Office for the County of San Bernardino, State of California.
Pursuant to the Lot Line Adjustment. APN: 0135-191-11 and APN: 0135-191-15 were amended
and became APN: 0135-191-16 and APN: 0135-191-17, respectively.
E. The Agency and the Developer wish to further amend the DDA, as amended by
the First Amendment, as amended by the Second Amendment and as amended by the Third
Amendment, pursuant to the terms, covenants and conditions of this Fourth Amendment.
F. Pursuant to this Fourth Amendment, the Agency and the Developer shall agree,
without limitation, to the following: (i) the Agency shall sell to the Developer, and the Developer
shall purchase from the Agency, the Flood Control Channel Property, for the sum of Thirty-Six
Thousand Dollars ($36,000), (ii) the legal description for the Agency Property and for the Flood
Control Channel Property shall be amended in accordance with and as revised by the Lot Line
Adjustment. and (iii) the Note shall be revised as provided for in the "Revised Agency Revenues
Promissory Note" attached hereto and to the DDA as Exhibit "F".
G. The Agency and the Buyer desire to approve and execute this Fourth Amendment
to the DDA upon the terms, covenants and conditions as set forth herein.
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NOW, THEREFORE, THE AGENCY AND THE BUYER DO HEREBY AGREE
AS FOLLOWS:
1. Section 1.01. Purpose of Al!reement. In Section 1.01 of the DDA, the following shall
be deleted from the end of the first section "the granting by the Agency to the Buyer of the First
Refusal Right, and the exercise by the Buyer of the First Refusal Right." and replaced with the
following "and the Flood Control Channel Property." Additionally, the second sentence of
Section 1.0 I shall be deleted in its entirety and replaced with the following "The purchase and
development of the Agency Property and the Flood Control Channel Property 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."
2. Section 1.03. Benefit to Proiect Area. Section 1.03 of the DDA shall be deleted in its
entirety and replaced with the following: "The Agency has determined that the purchase and
development of the Agency Property and Flood Control Channel Property by the Buyer, in
accordance with this Agreement, will materially assist in the elimination of blight and the
implementation of the Redevelopment Plan for the Project Area."
3. Section 1.06. Chanl!e in Manal!ement and Control of Buver - Assil!nment and
Transfer. In Section 1.06(a)(I) of the DDA, the wording "and/or the Flood Control Channel
Property" shall be added immediately following the word "Property." In Section 1.06(a)(3) of
the DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the word "Property" In Section 1.06(a)(4) of the DDA, the word "Agency" shall be
added immediately preceding the word "Property" and the wording "and/or the Flood Control
Channel Property" immediately following the "Property."
4. Section 1.07. List of Attachments to Al!reement. As a result of the Lot Line
Adjustment which was necessary for the development of the Project, the legal descriptions and
assessor's parcel number for both the Agency Property and for the Flood Control Channel
Property have been changed. Accordingly, Exhibit "A", Exhibit "B", Exhibit "C", Exhibit "E"
and Exhibit "F" of the DDA, as revised by the First Amendment, by the Second Amendment and
by the Third Amendment, shall be deleted and replaced by the following Exhibits (which
Exhibits are attached hereto and incorporated herein by this reference):
Exhibit "A" "Revised Legal Description of the Agency Property"
Exhibit "B" "Revised Site Map of the Agency Property and the
Flood Control Channel Property"
Exhibit "C' "Revised Legal Description of the Flood Control Channel Property"
Exhibit "E" "Revised Improvements"
Exhibit 'T' "Revised Agency Revenues Promissory Note"
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5. Section 1.08. No Recordation of A!!reement; Survival. In line two (2) in Section 1.08
of the DDA, the word "Agency" shall be added immediately preceding the word "Property".
The wording "and/or the Flood Control Channel Property" shall be immediately added following
the word "Property", where appearing in Section 1.08 of the DDA.
6. Section 1.09. Flood Control Channel Property. Section 1.09 shall be added to the
DDA as follows: "The flood control channel consists of approximately 0.84 acres that is
presently aligned to the south of the Agency Property (the "Flood Control Channel Property").
The Buyer intends to purchase and to develop the Flood Control Channel Property as additional
parking for the Project. The Buyer shall be entitled to close escrow to acquire the Flood Control
Channel Property at anytime on or before April 30, 2009, unless such date is extended, in
writing, at the discretion of the Interim Executive Director for a total period of time not to exceed
six (6) months without an amendment to this Agreement.
7. Section 2.01. ACQuisition and Disposition of the Property. In Section 2.01 of the
DDA, the word "Agency" shall be added immediately preceding the word "Property" and the
wording "and Flood Control Channel Property" shall be added immediately following the word
"Property", where appearing in the title. Additionally, the wording "and Flood Control Channel
Property" shall be added immediately following the word "Property", wherever found in this
Section.
8. Section 2.02. Conditions for Transfer of the A!!encv Property. In Section 2.02(a) and
Section 2.02(b) of the DDA, the wording "and Flood Control Channel Property" shall be added
immediately following the word "Property", where appearing in the title. Section 2.02(c) shall
be added to the DDA as follows: "The Flood Control Channel Property shall be transferred to the
Buyer at the Close of Escrow provided that within the periods of time set forth in this Agreement
(i) neither party has terminated this Agreement, (ii) the Buyer has delivered to the Agency the
Due Diligence Certificate in connection with the Flood Control Channel Property regarding
Section 2.11 and (iii) all other conditions of the Close of Escrow in connection with the Flood
Control Channel Property set forth in this Agreement have been met and the escrow costs
relating to the Close of Escrow have been paid by the appropriate party" Section 2.02(d) shall
be added to the DDA as follows: "The parties shall deliver jointly, approved written escrow
instructions (consistent with the terms of this Agreement) to the Escrow Holder for transfer of
the Flood Control Channel Property, as soon as reasonably possible."
9. Section 2.03. Purchase Price. The Purchase Price for the Flood Control Channel
Property shall be Thirty-Six Thousand Dollars ($36,000) (the "Flood Control Channel Property
Purchase Price").
10. Section 2.04. Openin!! of Escrow. Section 2.04(c) shall be added to the DDA as
follows: "The transfer and sale of the Flood Control Channel Property shall take place through
Escrow to be administered by the Escrow Holder. The Escrow for the Flood Control Channel
Property shall be deemed open (the "Opening of Escrow") upon receipt by the Escrow Holder of
a fully executed copy of the Agreement, the First Amendment, the Second Amendment, the
Third Amendment and this Fourth Amendment. The Escrow Holder shall promptly confirm to
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the parties the escrow number and the title insurance order number assigned to the Escrow for
the Flood Control Channel Property with the Escrow Holder."
11. Section 2.06(a). Convevance of Title. In Section 2.06(a) of the DDA, the wording
"and Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section. Additionally, Section 2.06(a)(3) shall be
amended as follows: "(3) the Redevelopment Plan (existing as of the date of the Fourth
Amendment)."
12. Section 2.07. Additional C1osinl! Oblil!ations of Al!ency. In Section 2.07 of the DDA,
the wording "and/or Flood Control Channel Property" shall be added immediately following the
wording "Agency Property", where appearing in this Section.
13. Section 2.08. C1osinl! Oblil!ations of Buyer. In Section 2.08 of the DDA, the wording
"and/or Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section.
14. Section 2.09. Environmental Law. In Section 2.09 of the DDA, the wording "and/or
the Flood Control Channel Property" shall be immediately added following the word "Agency
Property", where appearing in this Section.
15. Section 2.10. Due Dilil!ence Investil!ation of the Al!encv Property. In the section
heading for Section 2.10 of the DDA, the wording "and/or Flood Control Channel Property"
shall be added immediately following the wording "Agency Property." In Section 2.1 O(a) of the
DDA, the wording "and/or Flood Control Channel Property" shall be added immediately
following the wording "Agency Property". In Section 2.10(b) and (c) the wording "and/or the
Flood Control Channel Property" shall be added immediately following the wording "Agency
Property" In Section 2.10(d) of the DDA, the word "Agency" shall be added immediately
preceding the word "Property" and the wording "and/or the Flood Control Channel Property"
shall be added immediately following the word "Property." In Section 2.10(e) of the DDA, the
wording "and/or the Flood Control Channel Property" shall be added immediately following the
wording "Agency Property."
16. Section 2.11. Due Dilil!ence Certificate. In Section 2.1 I, Section 2.ll(a) and Section
2.II(b) of the DDA, the wording "and/or Flood Control Channel Property" shall be added
immediately following the wording "Agency Property", where appearing in this Section.
17. Section 2.12. Books and Records. In line three (3) of Section 2.12 of the DDA, the
words "respective portion of the" shall be deleted. Additionally, the wording "and/or Flood
Control Channel Property" shall be added immediately following the wording "Agency
Property", where appearing in this Section.
18. Section 2.13 Condition of the Property. In Section 2.13 of the DDA, the wording
"and/or Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section.
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19. Section 2.14. Review and Approval of Condition of Title. In Section 2.14(a) and
Section 2.l4(b) of the DDA, the wording "and/or Flood Control Channel Property" shall be
added immediately following the wording "Agency Property", where appearing in this Section.
20. Section 2.15. Special Provisions Applicable to the Close of Escrow for the Flood
Control Channel Propertv.
The parties recognize that the Flood Control Channel Property is subject to the jurisdiction of the
United States Army Corps of Engineers (the "Corps of Engineers") as the Flood Control Channel
Property was a formerly designated water course of the United States, and as such the Developer
will be required to obtain the issuance of certain permits and discretionary approvals from the
Corps of Engineers. In addition to compliance by the Developer with the requirements of
Sections 2.02, 2.07, 2.10,2. I I, 2.13 and 2.14 as amended by Amendment No.4 to this DDA, the
Escrow for the sale of the Flood Control Channel Property from the Agency to the Developer
shall not occur until there has been full compliance by the Developer with the following special
provisions applicable to the Flood Control Channel Property as such compliance shall be
determined by the Interim Executive Director of the Agency with the concurrence of the Director
of Development Services of the City, each at their sole and absolute discretion:
(i) The City through the Development Services Department has completed all
environmental reviews and assessments as deemed appropriate by the City pursuant
to both CEQA and NEP A, as applicable, for the intended use by the Developer of the
Flood Control Channel Property for an at-grade parking structure; and
(ii) The Developer has agreed to all mitigation measures for the Flood Control Channel
Property as shall be contained in the final CEQA and NEP A reviews and
determinations of the intended scope of development of the Flood Control Channel
Property as an at-grade parking structure; and
(iii) The City has received adequate written, binding and enforceable assurances from the
Developer that the Developer will in fact comply with all mitigation measures as
identified in the CEQA and NEP A reviews and approvals for the development of the
Flood Control Channel Property as an at-grade parking structure; and
(iv) All applicable permits and approvals have been issued by the Corps of Engineers and
all other federal, state and local governmental agencies having jurisdiction as to the
intended use and development of the Flood Control Channel .Property as such
sufficiency as to the issuance of permits and approvals shall be determined by the
Director of Development Services; and
(v) The D/ERC has approved the development of the Flood Control Channel Property as
an at-grade parking structure and has imposed conditions of approval for the
development and use thereof by the Developer consistent with the intended uses, and
all City permits have been issued and approvals granted to allow for the development
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by the Developer of the at-grade parking structure improvements upon the Flood
Control Channel Property; and
(vi) The Developer has entered into a "Defense, Indemnification and Hold Harmless
Agreement" with the City in such form and content acceptable to the City, and
subject to approval by the Mayor and Common Council at a public meeting, whereby
the Developer has agreed to defend, indemnify and hold harmless the City, the
Agency and all elected officials, appointed officers and staff and consultants of the
City and the Agency from all losses and damages that may be suffered as the result of
the use of the Flood Control Channel Property by the Developer, including, but not
limited to, the injury or loss of life and property damage from water flows, flood
waters and debris flows and debris blockages that cause flooding or water damages to
any other property or result in any other damages, injury or loss of life and Agency to
maintain general liability insurance in the amount 01'$3,000,000; and
(vii) The Developer has entered into a "Maintenance and Operation Agreement" with the
City in such fonn and content acceptable to the City, and subject to approval by the
Mayor and Common Council at a public meeting, whereby the Developer has agreed
to maintain the Flood Control Channel Property and the improvements to be
constructed within and above the Flood Control Channel Property in such condition
as shall be determined by the City Engineer to be required from time-to-time; such
Maintenance and Operation Agreement shall also permit but not require the City to
enter into the Flood Control Channel Property and to conduct routine testing and
observations to assure compliance with all applicable permits and other laws
applicable thereto and consistent with the CEQA and NEPA mitigation measures and
all other permits and approvals as issued by any other federal, state or local
governmental agencies having jurisdiction over the Flood Control Channel Property;
furthermore, the City shall be permitted but not required to enter into and upon the
Flood Control Channel Property and to undertake all maintenance activities as shall
be reasonably determined by the City Engineer as necessary under the circumstances
and shall have the right to impose an enforceable lien upon the other property
identified in Amendment NO.3 to this DDA as the Agency Property and the Project
as may be then in the ownership of either the Developer or any other successor in
interest to recover all costs of such maintenance activities. The provisions of Section
2. I 5 shall survive the termination of this DDA and shall be a covenant that shall run
with the land and shall be binding on all successors and assignees of Waterman
Holdings, LLC.
21. Section 3.01. Uses. In Section 3.01 of the DDA, the wording "and the Flood Control
Channel Property" shall be added immediately following the wording "Agency Property", where
appearing in this Section.
22. Section 3.02. Modification of Covenants. In Section 3.02(a), Section 3.02(b), Section
3.02(c) and Section 3.02(d) of the DO A, the wording "and/or Flood Control Channel Property"
P:\Agcndas' Agenda Attachmems"Agl1nts-Amcnd 2008.] 2-15-08 W<ltennan Holdings, LLC - Amendment No. 4.duc
7
shall be added immediately following the wording "Agency Property", where appearing in this
Section.
23. Section 3.03. Qbli!!ation to Refrain from Discrimination. In Section 3.03 of the
DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property", where appearing in this Section.
24. Section 3.05. No Liabilitv for Breach to a Predecessor in Interest. In Section 3.05 of
the DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property", where appearing in this Section.
25. Section 3.06. A!!encv Quit Claim Deed. Section 3.06 of the DDA shall be deleted in
its entirety and replaced with the following: "All of the provisions in Sections 3.01 to 3.05,
inclusive, shall be included in the Agency Quit Claim Deed for the Agency Property and the
Flood Control Channel Property. Accordingly, Sections 3.01 to 3.05, inclusive, shall survive the
Close of Escrow."
26. Section 3.07. Maintenance Condition of the A!!encv Property. In the heading for
Section 3.07 of the DDA, the wording "and Flood Control Channel Property" shall be added
immediately following the wording "Agency Property." In Section 3.07(a) and Section 3.07(b)
of the DDA, the wording "and/or the Flood Control Channel Property" shall be added
immediately following the wording "Agency Property", where appearing in Section 3.07(a) and
Section 3.07(b).
27. Section 3.08. Pled!!e of A!!encv Revenues to Buver. In Sections 3.08(a), 3.08(e) and
3.08(f) of the DDA, the word "Revised" shall be added immediately preceding the wording
"Agency Revenues Promissory Note." Additionally, the wording "and Flood Control Channel
Property" shall be added immediately following the wording "Agency Property", where
appearing in Section 3.08(a), Section 3.08(b), Section 3.08(c), Section 3.08(d) and Section of
3.08(e) of the DDA.
28. Section 3.10. Developer First Refusal Ri!!ht. Section 3.10 of the DDA shall be
deleted, in its entirety.
29. Section 4.01. Defaults and Remedies. In Section 4.01(c) and Section 4.01(g) of the
DDA, the wording "and the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property".
30. Section 5.02. Conflict of Interest. In Section 5.02 of the DDA, the wording "and/or
Flood Control Channel Property" shall be added immediately following the wording "Agency
Property", where appearing in this Section.
31. Section 5.05. Enforced Delav; Extension of Time of Performance. In line ten (I 0) in
Section 5.05(b) of the DDA, the word "Agency" shall be added immediately preceding the word
"Property" and the wording "and/or the Flood Control Channel Property" shall be added
P:'Agendas\Agenda Attachmellts'Agnnts-Amend 200812-] 5..08 \Vatennilll Holdings, LLC - Amendment No. 4.doc
8
immediately following the wording "Agency Property." In line nine (9) in Section 5.05(c) of the
DDA, the word "Agency" shall be added immediately preceding the word "Property" and the
wording "and/or the Flood Control Channel Property" shall be added immediately following the
wording "Agency Property."
32. Section 5.06. Inspection of Books and Records. In Section 5.06 of the DDA, the
wording "and/or Flood Control Channel Property" shall be added immediately following the
wording "Agency Property", where appearing in this Section.
33. Section 5.13. Entire Al!reement. The Agreement, as amended by the First Amendment,
as amended by the Second Amendment, as amended by the Third Amendment and as amended
by this Fourth Amendment constitutes the entire understanding and agreement between the
parties with respect to the Agency Property and the Flood Control Channel Property.
34. Section 5.14. Intel!ration. In Section 5.14 of the DDA, the wording "and Flood Control
Channel Property" shall be added immediately following the wording "Agency Property", where
appearing in this Section.
35. Exhibit Headings. The following Exhibit headings shall be modified as set forth below:
Exhibit "A". Exhibit "A" shall be amended as follows:
"REVISED LEGAL DESCRIPTION FOR THE AGENCY PROPERTY'
Exhibit "B". Exhibit "8" shall be amended as follows together with the inclusion of a
new Site Map for the Agency Property and the Flood Control Channel Property:
"REVISED SITE MAP FOR THE AGENCY PROPERTY AND FOR THE FLOOD
CONTROL CHANNEL PROPERTY"
Exhibit "C". Exhibit "C" shall be amended as follows:
"REVISED LEGAL DESCRIPTION OF THE FLOOD CONTROL CHANNEL
PROPERTY"
Exhibit "E". Exhibit "E" shall be amended as follows:
"REVISED IMPROVEMENTS"
Exhibit "F". Exhibit 'T' shall be amended as follows:
"REVISED AGENCY REVENUES PROMISSORY NOTE"
36. Lel!al Effect. The DDA, the First Amendment, the Second Amendment and the Third
Amendment shall only be amended to the extent set forth herein. All other terms, covenants
P:' .A.gendas"'Agcnda Attachmcllts\Agmlts-AIlll"nd 2008\ 12-15-08 Watemlan Holdings, LLC - Amendment No. 4doc
9
and/or conditions of the DDA, the First Amendment, the Second Amendment and the Third
Amendment, unless specitlcally amended or modi tied by the terms, covenants and/or conditions
of this Fourth Amendment, shall remain unmoditled and in full force and effect. In the event of
any inconsistency, contraction and/or ambiguity between the terms, covenants and conditions of
this Fourth Amendment, and the DDA and/or the First Amendment and/or the Second
Amendment and/or the Third Amendment, the inconsistency, contraction and/or ambiguity shall
be resolved in favor of the terms, covenants and conditions set forth in this Fourth Amendment.
37. Defined Terms. Terms not otherwise detlned or redetlned in this Fourth Amendment
shall have the meanings provided for in the Second Amendment.
38. Effective Date. This Fourth Amendment shall take effect from and after the date of tlnal
approval hereof by the governing body of the Agency at a duly held joint public hearing and
after the execution of this Fourth Amendment by the Agency and the Buyer.
ill
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P '\,gcndasAgellda Altachmenls"Agnllts-AmCllll 200~"'12-1 5-08 Watcnuan Holdings, LLC ~ Amendment No_ 4.doc
10
IN WITNESS WHEREOF, the parties have signed this Fourth Amendment as of the date
first set forth above.
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Dated:
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
By: \/~
Agency Co s I
DEVELOPER
Waterman Holdings, LLC,
a California limited liability company
Dated:
By:
Jian Torkan
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\12-15-08 Waterman Holdings, LLC ~ Amendment No. 4.doc
II
Exhibit "A"
Revised Legal Description of the Agency Property
APN: 0135-191-16
PARCEL 1 OF PARCEL MAP NO. 7140.IOCATEP IN THE CITY OF $AN
BERNARDINO, ASPER MAP RECORDED IN BOOK 69 OF PARCEL r.AAPS,
PAGES I AND 2, RECORDS oF THE COUNTY OF SAN BERNARDINO. STATE
OF CALIFORNIA.
EXCEPTING THERE FROM THAT PORTION OF SAID PARCEL 1 DESCRIBED AS
FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF $AID PARCEL 1, SAID POINT
AL.SOBEING THE NORTHWEST CORNER OF PARCEL" OF SAID OF PARca
MAP NO. 7140:
THENC!;: NORTH 00.01"14" EAST 16.70 FEET ALONG THE WEST UNEOF SAID
PARCEL 1;
THENCE LEAVING SAID W!;:ST UNE SOUtH tl9.~'51' EAST 275.19;
THENCE SOUTtlfW24'1(S" EAST 26MO TOA POINT ON THE sOUTH UNE OF
SAID PARCEl 1 , SAID S01JTHLIN!: flEING THE NORTH UN!: OFSAlD PARca 9:
l"1-iENCE SOUTHS9.59'Ofji" WEST 534.71 FEET ALONG SAlP SOtJTH UNf; ANO
SAID NORTH UNE TO THE SOUTHWEST CORNER OF SAfO PARCEL 1, AND THE
POINT OF BEGINNING.
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
12
Exhibit "8"
Revised Site Map of the Agency Property the Flood Control Channel Property
P:\Agendas\Agenda Attachments\Agrmts.Arnend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
13
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Exhibit "c"
Revised Legal Description of the Flood Control Channel Property
APN: 0135-191-17
PARCEL II OF PARCEL MAP NO. 7140. LOCATEO IN THE CITY OF SAN
BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS, PAGES
1 AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE OF
CALIFORNIA
TOGETHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 7140,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAIO PARCEL 1, SAID POINT
ALSO BEING THE NORTHWEST CORNER OF SAIO PARCEL 9;
THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID
PARCEL 1;
THENCE LEAVING SAID WEST LlNE SOUTH ~9'~!51" EA$T 275.19;
THENCE SOUTH 86024'16" EAST2$0.OO TO A pblNT ON THE SOUTH UNE OF
SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAlt)F'ARCEL 9;
THENCE SOUTH 69059'06" WEST 53-4.11 FEt:::TALOII!G SAID SOUTHLINEANO
SAIO NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE
POINT OF BEGINNING.
P:\Agendas\Agenda Attadunents\Agrmts-Amend 2008\12-15-08 Watennan Holdings, LLC - Amendment No. 4.doc
14
Exhibit "D"
Form of Agency Quitclaim Deed
[NO CHANGES MADE]
P:\Agendas\Agenda Attachments\Agrmts~Amend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
15
Exhibit "E"
Revised Improvements
The Improvement on the Agency Property shall consist of approximately a 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.
The Improvement of the Flood Control Channel Property shall consist of a single floor structure
built above the Flood Control Channel Property to provide additional parking spaces for the 2-
story, 45,000 square foot building. The construction, landscaping, etc., of the single floor
parking structure shall comply with the City's Development Code and requirements from any
federal and/or state governmental agency, concerning improvements to and/or near flood control
channel land, that may be imposed on the Developer.
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
16
Exhibit "F"
Revised Agency Revenues Promissory Note
P:\Agendas\Agenda Attachments\Agnnts-Amend 2008\12-15-08 Watennan Holdings, LLC - Amendment No. 4.doc
17
REVISED AGENCY REVENUES PROMISSORY NOTE
Date: July _,200_
Los Angeles, California
The undersigned, the Redevelopment Agency of the City of San Bernardino, a public agency
(the "Agency"), promises to pay, and pledges to Waterman Holdings, LLC, a California limited
liability company (the "Buyer"), or the Buyer's assignee, 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 Revised
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 this 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 this
Note are payable by the Agency to the Buyer at 422 I Wilshire Boulevard, Suite 240, Los Angeles,
California 90010.
This Note shall be subject to the following terms, covenants and conditions:
I. 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).
l.l Ae:reement. The "Agreement" shall mean the Original Agreement (as defined
below), as amended by the First Amendment (as defmed below), as further amended by the Second
Amendment (as defmed below), as further amended by the Third Amendment (as defined below)
and as further amended by the Fourth Amendment (as defined below), as executed by and between
the Agency and the Buyer, and all exhibits attached thereto.
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 Second Amendment) and at the Flood Control Channel Property.
1.3 City. The "City" shall mean the City of San Bernardino.
1.4 County. The "County" shall mean San Bernardino County.
I of?
P:\Agendu\Agenda Attaclllnenu\Exhibils\2008\12-J 5-08 Wataman Holdings, liC - Revised Agency Promissory Note {E.x.Ia'bi! F)_doc
1.5 First Amendment. The "First Amendment" shall mean that certain Amendment No.
1 to the Original Agreement, dated June 20, 2005, as executed by and between the Agency and the
Buyer.
1.6 Fourth Amendment. The "Fourth Amendment" shall mean that certain Amendment
No.4 to the Original Agreement, dated December 15, 2008, as executed by and between the Agency
and the Buyer.
1.7 Fiscal Year. The "Fiscal Year" shall mean any given fiscal year for the County.
1.8 Initial Fiscal Year. The "Initial Fiscal Year" shall mean the first (I") Fiscal Year
following the Fiscal Year in which the City issued the Certificate of Occupancy.
1.9 Interest Rate. The "Interest Rate" shall mean five percent (5%) per armum which
shall only apply to late payments remitted by the Agency to the Buyer and such Interest Rate shall
not be calculated upon the unpaid Principal balance of this Note, and shall accrue in the marmer
provided for in Section 3(b) of this Note.
1.10. Late Chan!e. The "Late Charge" shall mean three percent (3 %) on the payment due
and owing by the Agency to the Buyer under this Note (subject to any applicable cure period(s) in
this Note and/or the Agreement).
1.11 Maturity Date. The "Maturity Date" shall mean the first business day following the
expiration of the Term.
1.12 Oril!inal 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.
1.13 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. As of the date of this Note,
there is no discemable method to calculate the total Principal amount that may be payable by the
Agency to the Buyer pursuant hereto.
1.14 Second 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.
1.15 Term. The "Term" shall mean the term of this Note commencing on the date of
execution of this Note and continuing thereafter until the end of the tenth (10th) Fiscal Year (with
the Initial Fiscal Year being the fust Fiscal Year of this ten (I O)-year Fiscal Year period). This Note
has been duly executed and delivered as of July 1 the next succeeding Fiscal Year of the Agency
2 on
P:\Agendas\Agenda Attachments\Edlibits\2008\12.15-08 Waterman Holdings, lLC - Revised Agency Promissory Note (E>d:Ubit F).doc
during which the Buyer has obtained a Certificate of Occupancy from the City of San Bernardino for
the project described in the Original Agreement, as amended.
1.16 Third Amendment. The "Third Amendment" shall mean that certain Amendment
No.3 to the Original Agreement, dated as of July 21, 2008, by and between the Agency and the
Buyer.
2. Interest. Interest shall not be paid on the Principal balance of this Note but shall be paid only
upon a default or other late payment by the Agency as provided in this Note. Subject to Section 3(b)
of this Note, 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") in an
amount based upon the Index as hereinafter defmed. 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 and/or the Buyer's successor-in-
interest to the ownership of the Agency Property and of the Flood Control Channel Property
attributable to the development to occur on the Agency Property and on the Flood Control Channel
Property pursuant to this Agreement (such 60% of the 1 % ofthe real property taxes as actually paid
by the Buyer and/or Buyer's successor-in-interest to the ownership of the Agency Property and of
the Flood Control Channel Property 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 the Flood Control Channel 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 and of the Flood Control Channel 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 and on the Flood Control Channel Property as of each December 10 and/or April 1 0 (or any
other delinquency date established by the County for the payment of supplemental property taxes)
have been duly paid. 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 the adequacy of the documentation as submitted by
the Buyer within the applicable 30-day period of time, shall constitute approval of same by the
Agency. The Agency shall be obligated to provide written notice to the Buyer within said 30-day
period of time, as to any inadequacy of any documentation provided by the Buyer to the Agency.
Failure of the Agency to remit the requested payment of the Agency Revenues within ten (10)
30f7
P:\Agcndas\Agenda Attachmcll1S\Emibiu\2003\12-IS-08 Waterman Holdings, LLC. Revi$ed Agency Promissory Notc(Exhibit F)_doc
calendar days after the expiration of the initial 3D-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) It shall be a condition precedent to each payment of the Agency Revenues
hereunder that as of each such Agency Revenues payment due date there has been no Transfer (as
defined in the Agreement), assignment, or sale or other conveyance of the Agency Property or of the
Flood Control Channel Property or any interest in the Agreement which is prohibited by the
Agreement.
(d) In the event that the Buyer should Transfer any interest in the Agreement, this
Note and/or the Agency Property and/or the Flood Control Channel Property in violation of the
Agreement or this Note, or sell the Agency Property and/or the Flood Control Channel Property in
violation of the Agreement or this Note, prior to the expiration of the applicable ten-year period for
the receipt of the Agency Revenues, the obligation ofthe Agency for any further remittances of the
Agency Revenues shall immediately cease and terminate as to that portion of the Agency Property
and/or of the Flood Control Channel Property to which such prohibited Transfer or other sale or
conveyance has occurred.
(e) Notwithstanding anything herein to the contrary, upon the issuance of a
Certificate of Occupancy by the City for the Agency Property and/or for the Flood Control Channel
Property, any of the following transactions shall not be deemed a "Transfer" prohibited by the
Agreement or this Note: (i) the transfer of fee title to the Agency Property and/or to the Flood
Control Channel Property to any entity in which an entity directly or indirectly, majority-owned and
. .
controlled by Jian Torkan, is the general partner or managing member or partner, (ii) a transfer offee
title to the Agency Property and/or to the Flood Control Channel Property in a transaction in which
the Buyer enters into a lease for the Agency Property and/or for the Flood Control Channel Property
pursuant to which it is obligated to pay all property taxes, or (iii) a transfer to any entity which is
directly or indirectly majority-owned and controlled by Jian Torkan. On and after the issuance of the
Certificate of Occupancy as specified above and for a period of time equal to ten (I D) years after the
date ofthe issuance of the Certificate of Occupancy, and in addition to the ability of the Buyer to
enter into a transaction that is deemed not to be a Transfer as defmed above, the Buyer may sell,
transfer or assign the Agency Property and/or the Flood Control Channel Property, the Agreement
and this Note to any other person or entity subject to the following: (i) such subsequent owner of the
Agency Property and/or of the Flood Control Channel Property has assumed in writing all duties and
obligations of the Buyer as contained in the Agreement and this Note in form and substance as may
be reasonably required by the Agency General Counsel and (ii) the subsequent owner has assumed
all Agency Property and/or Flood Control Channel Property maintenance, covenants and obligations
set forth in the Agreement, or in any other document mutually executed by Buyer and the Agency.
Following the ten (I D) year period referred to above, there shall be no restriction or condition to any
sale of transfer by the Buyer of the Agency Property and/or of the Flood Control Channel Property
and/or the Buyer's interest in this Agreement. Following the expiration of the Term, the Agency
shall have no further duty or obligation to make any payment of the Agency Revenues, or any
portion thereof, to the Buyer or to any successor-in-interest in the ownership of the Agency Property
and/or of the Flood Control Channel Property (except for the Agency Revenues and/or any other
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amounts due and owing by the Agency to the Buyer under this Agreement). Notwithstanding
anything herein to the contrary, any transfer of the Agency Property and/or of the Flood Control
Channel Property and/or the Buyer's interest in the Agreement and in this Note pursuant to a
foreclosure or deed-in-lieu thereof shall not constitute a prohibited Transfer.
(f) 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 this 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 the notice or
otherwise as set forth in this 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. Preoavment. 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, but only if interest is payable due
to a prior payment default by the Agency, and any and all late charges or other amounts then owed
by the Agency hereunder.
5. Aoolication ofPavments. 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, if any, and then to Principal then due and payable under this Note.
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 this
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:
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Address for the Agency:
Redevelopment Agency of the City of San Bernardino
Attention: Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, CA 9240 I
Address for the Buyer:
Waterman Holdings, LLC
Attention: Jian Torkan
4221 Wilshire Boulevard, Suite 240
Los Angeles, CA 900 I 0
9. Default. Subject to Section 7 ofthis 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 the
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, the 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 this Note and/or the Agreement (collectively, the "Default Payment
Amount"), and the Agency shall immediately pay to the Buyer the Default Payment Amount.
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. Headines. 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.
15. Judicial Proceedines and Attornevs' Fees. If either party hereto files any action or brings
any action or proceeding against the other arising out ofthis Note, then as between the Buyer and the
Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as
damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a
separate action or proceeding brought to recover such attorneys' fees. The costs, salary and
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expenses of the City Attorney for the City and members of his office in enforcing this Note shall be
considered as "attorneys' fees" for purposes of this Section. Any such action or proceeding must be
commenced in the Superior Court for the County of San Bernardino, San Bernardino District, State
of California.
16. Enforcement Costs. All reasonable out-of-pocket costs incurred by the Buyer in the
enforcement of this Note shall be added to the amounts due under this Note.
17. Assil!:nment. This Note may be assigned by the Buyer, subject to the restrictions and
limitations provided for in Section 3.08( c), 3.08( d) and 3.08( e) of this Note and by the Agency, but
no such assignment shall relieve the Agency from any of its obligations or liabilities hereunder. The
terms, covenants and conditions of this Note shall be binding upon, and inure to the benefit of, the
successors and assigns of the Buyer (subject to the restrictions and limitations provided for in
Section 3.08(c), 3:08(d), and 3.08(e)ofthis Note) and of the Agency.
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
a public agency
By:
Emil A. Marzullo, Interim Executive Director
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AMENDMENT NO.4 TO THE
2004
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
W A TERMAN HOLDINGS, LLC
(4"10 Street and Waterman Avenue Property)
This Amendment No.4 (this "Fourth Amendment") is dated as of December 15, 2008, by
and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate
and politic (the "Agency"), and Watennan Holdings, LLC, a California limited liability company
(the "Buyer"' or "Developer'} and is an amendment to that certain 2004 Disposition and
Development Agreement by and between the Agency and the Developer, dated as of December
6, 2004, for the sale and purchase of certain Agency owned property located at the southwest
comer of 41h Street and Watennan Avenue the City of San Bernardino ("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 June 20, 2005 (the "First
Amendment"), as amended by that certain Amendment No.2, dated June 19, 2006 (the "Second
AmendmenC) and as amended by that certain Amendment No.3, dated July 21, 2008 (the
"Third Amendment') by and between the Agency and the Buyer, 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, wherein the
Buyer, without limitation, agreed to purchase certain land that the Agency owned at the
southwest comer of 4110 Street and Waterman Avenue (the "Agency Property", fonnerly APN:
0135-191-11 and now APN: 0135-191-]6 after and pursuant to the Lot Line Adjustment, as
detined below), in the City, County of San Bernardino (the "County"), State of California (the
"State') The Agency and the Buyer executed the First Amendment to the DDA on June 20,
2005. The First Amendment modified the Agreement, to provide, without limitation, for the
transposition of the Phase I project and the Phase]] project. The Ageney and the Buyer executed
the Second Amendment to the DDA on June 19, 2006. The Second Amendment modified the
DDA and the First Amendment, to provide, without limitation, for the elimination of the Phase I
and Phase II projects and was replaced by a single phase, two-story building of approximately
45,000 square feet of floor space, including the necessary and appropriate on-site improvements
and landscaping (the "Project").
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B. Pursuant to the Second Amendment, the Developer and the Agency, without
limitation, agreed to the following: (i) the Developer would purchase the Agency Property for
Five Hundred Twelve Thousand Four Hundred Twenty-Four Dollars (5512,424), (ii) the
Agency would reimburse the Developer a portion of the Agency Revenues (as defined in the
Agency Revenues Promissory Note (the "Note") attached as Exhibit ''F'' to the Second
Amendment) to be received by the Agency, in the manner provided therein and subject to the
terms, covenants and conditions of the Note, and (iii) the Developer would have a right of first
refusal on the "Flood Control Channel Property" (as defined in the Second Amendment).
C. After the approval and execution of the Second Amendment, the City added
additional requirements to the Project by requiring the Developer to construct certain off-site
improvements including, without limitation, new curbs, gutters and sidewalks along 4th Street
and Watennan Avenue and street repairiresurfacing on 4th Street along the front of the Project
(collectively, the "Oft~Site Improvements"). Pursuant to the Third Amendment, the Agency
agreed to reimburse the Developer for the actual costs paid by the Developer to construct the
Off-Site Improvements or the sum of Three Hundred Ninety-Nine Thousand Five Hundred
Dollars ($399,500), whichever is less, in the manner provided for in the Third Amendment,
D. The legal descriptions of the Agency Property and the Flood Control Channel
Property were revised and amended by the Lot Line Adjustment No. LLA 08-01 (the "Lot Line
Adjustment"), recorded on June 12, 2008, as Instrument No. 2008-0268868, in the Official
Records of the County Recorder's Office for the County of San Bernardino, State of California.
Pursuant to the Lot Line Adjustment, APN: 0135-191-] I and APN: 0135-191-15 were amended
and became APN: 0135-191-16 and APN: 0135-191-17, respectively.
E. The Agency and the Developer wish to further amend the DDA, as amended by
the First Amendment, as amended by the Second Amendment and as amended by the Third
Amendment, pursuant to the terms, covenants and conditions of this Fourth Amendment,
F. Pursuant to this Fourth Amendment, the Agency and the Developer shall agree,
without limitation, to the following: (i) the Agency shall sell to the Developer, and the Developer
shall purchase from the Agency, the Flood Control Channel Property, for the sum of Thirty-Six
Thousand Dollars ($36,000), (ii) the legal description for the Agency Property and for the Flood
Control Channel Propeliy shall be amended in accordance with and as revised by the Lot Line
Adjustment, and (iii) the Note shall be revised as provided for in the "Revised Agency Revenues
Promissory Note" attached hereto and to Ihe DDA as Exhibit "F".
G. The Agency and the Buyer desire to approve and execute this Fourth Amendment
to the DDA upon the terms, covenants and conditions as set forth herein.
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NOW, THEREFORE, THE AGENCY AND THE BUYER DO HEREBY AGREE
AS FOLLOWS:
I. Section 1.01. Purpose of Al!reement. In Section 1.01 of the DDA, the following shall
be deleted from the end of the first section "the granting by the Agency to the Buyer of the First
Refusal Right, and the exercise by the Buyer of the First Refusal Right." and replaced with the
following "and the Flood Control Channel Property." Additionally. the second sentence of
Section 1.01 shall be deleted in its entirety and replaced with the following 'The purchase and
development of the Agency Property and the Flood Control Channel Property 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."
2. Section 1.03. Benefit to Proiect Area. Section 1.03 of the DDA shall be deleted in its
entirety and replaced with the following: "The Agency has detennined that the purchase and
development of the Agency Property and Flood Control Channel Property by the Buyer, in
accordance with this Agreement, will materially assist in the elimination of blight and the
implementation of the Redevelopment Plan for the Project Area."
3. Section 1.06. Chanl!e in Manal!ement and Control of Buver - Assil!nment and
Transfer. In Section 1.06(a)(l) of the DDA, the wording "and/or the Flood Control Channel
Property" shall be added immediately following the word "Property." In Section 1.06(a)(3) of
the DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the word "Property" In Section 1.06(a)(4) of the DDA, the word "Agency" shall be
added immediately preceding the word "Property" and the wording "and/or the Flood Control
Channel Property" immediately following the "Property."
4. Section 1.07. List of Attachments to Al!reement. As a result of the Lot Line
Adjustment which was necessary for the development of the Project, the legal descriptions and
assessor's parcel number for both the Agency Property and for the Flood Control Channel
Property have been changed. Accordingly, Exhibit "A", Exhibit "B", Exhibit "C", Exhibit "E"
and Exhibit 'T' of the DDA, as revised by the First Amendment, by the Second Amendment and
by the Third Amendment, shall be deleted and replaced by the following Exhibits (which
Exhibits are attached hereto and incorporated herein by this reference):
Exhibit "A" "Revised Legal Description of the Agency Property"
Exhibit "B" "Revised Site Map of the Agency Property and the
Flood Control Channel Property"
Exhibit "c" "Revised Legal Description of the Flood Control Channel Property"
Exhibit "E" "Revised Improvements"
Exhibit "F" "Revised Agency Revenues Promissory Note"
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5. Section 1.08. No Recordation of Al!reement; Survival. In line two (2) in Section 1.08
of the DDA, the word "Agency" shall be added immediately preceding the word "Property".
The wording "and/or the Flood Control Channel Property" shall be immediately added following
the word "Property", where appearing in Section 1.08 of the DDA.
6. Section 1.09. Flood Control Channel Property. Section 1.09 shall be added to the
DDA as follows: "The flood control channel consists of approximately 0.84 acres that is
presently aligned to the south of the Agency Property (the "Flood Control Channel Property").
The Buyer intends to purchase and to develop the Flood Control Channel Property as additional
parking for the Project. The Buyer shall be entitled to close escrow to acquire the Flood Control
Channel Property at anytime on or before April 30, 2009, unless such date is extended, in
writing, at the discretion of the Interim Executive Director for a total period of time not to exceed
six (6) months without an amendment to this Agreement.
7. Section 2.01. Acquisition and Disposition of the Propertv. In Section 2.01 of the
DDA. the word "Agency" shall be added immediately preceding the word "Property" and the
wording "and Flood Control Channel Property" shall be added immediately following the word
"Property", where appearing in the title. Additionally, the wording "and Flood Control Channel
Property" shall be added immediately following the word "Property", wherever found in this
Section.
8. Section 2.02. Conditions for Transfer of the Al!encv Property. In Section 2.02(a) and
Section 2.02(b) of the DDA, the wording "and Flood Control Channel Property" shall be added
immediately following the word "Property", where appearing in the title. Section 2.02(c) shall
be added to the DDA as follows: "The Flood Control Channel Property shall be transferred to the
Buyer at the Close of Escrow provided that within the periods of time set forth in this Agreement
(i) neither party has terminated this Agreement, (ii) the. Buyer has delivered to the Agency the
Due Diligence Certificate in connection with the Flood Control Channel Property regarding
Section 2.11 and (iii) all other conditions of the Close of Escrow in connection with the Flood
Control Channel Property set forth in this Agreement have been met and the escrow costs
relating to the Close of Escrow have been paid by the appropriate party." Section 2.02( d) shall
be added to the DDA as follows: "The parties shall deliver jointly, approved written escrow
instructions (consistent with the terms of this Agreement) to the Escrow Holder for transfer of
the Flood Control Channel Property, as soon as reasonably possible"
9. Section 2.03. Purchase Price. The Purchase Price for the Flood Control Channel
Property shall be Thirty-Six Thousand Dollars ($36,000) (the "Flood Control Channel Property
Purchase Price").
10. Section 2.04. Openinl! of Escrow. Section 2,04(c) shall be added to the DDA as
follows: "The transfer and sale of the Flood Control Channel Property shall take place through
Escrow to be administered by the Escrow Holder. The Escrow for the Flood Control Channel
Property shall be deemed open (the "Opening of Escrow") upon receipt by the Escrow Holder of
a fully executed copy of the Agreement, the First Amendment, the Second Amendment, the
Third Amendment and this Fourth Amendment. The Escrow Holder shall promptly confirm to
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the parties the escrow number and the title insurance order number assigned to the Escrow for
the Flood Control Channel Property with the Escrow Holder."
II. Section 2.06(a). Convevance of Title. In Section 2.06(a) of the DDA, the wording
"and Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section. Additionally, Section 2.06(a)(3) shall be
amended as follows: "(3) the Redevelopment Plan (existing as of the date of the Fourth
Amendment)."
12. Section 2.07. Additional CIosinl! Oblil!ations of Al!encv. In Section 2.07 of the DDA,
the wording "and/or Flood Control Channel Property" shall be added immediately following the
wording "Agency Property", where appearing in this Section.
13. Section 2.08. CIosinl! Oblil!ations of Buver. In Section 2.08 of the DDA, the wording
"and/or Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section.
14. Section 2.09. Environmental Law. In Section 2.09 of the DDA, the wording "and/or
the Flood Control Channel Property" shall be immediately added following the word "Agency
Property", where appearing in this Section.
15. Section 2.10. Due Dilil!ence lnvestil!ation of the Al!encv Property. In the section
heading for Section 2.10 of the DDA, the wording "and/or Flood Control Channel Property"
shall be added immediately following the wording "Agency Property" In Section 2.1 O(a) of the
DDA, the wording "and/or Flood Control Channel Property" shall be added immediately
following the wording "Agency Property". In Section 2.LO(b) and (c) the wording "and/or the
Flood Control Channel Property" shall be added immediately following the wording "Agency
Property." In Section 2.10(d) .of the DDA, the word "Agency" shall be added immediately
preceding the word "Property" and the wording "and/or the Flood Control Channel Property"
shall be added immediately following the word "Property." In Section 2.IO(e) of the DDA, the
wording "and/or the Flood Control Channel Property" shall be added immediately following the
wording "Agency Property."
16. Section 2.11. Due Dilil!ence Certificate. In Section 2.11, Section 2.11 (a) and Section
2.11 (b) of the DDA, the wording "and/or Flood Control Channel Property"' shall be added
immediately following the wording "Agency Property", where appearing in this Section.
17. Section 2.12. Books and Records. In line three (3) of Section 2.12 of the DDA, the
words "respective portion of the" shall be deleted. Additionally, the wording "and/or Flood
Control Channel Property" shall be added immediately following the wording "Agency
Property", where appearing in this Section.
18. Section 2.13 Condition of the Property. In Section 2.13 of the DDA, the wording
"and/or Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section.
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19. Section 2.14. Review and Approval of Condition of Title. In Section 2.l4(a) and
Section 2.14(b) of the DDA, the wording "and/or Flood Control Channel Property" shall be
added immediately following the wording "Agency Property", where appearing in this Section.
20. Section 2.15. Special Provisions Applicable to the Close of Escrow for the Flood
Control Channel Propertv.
The parties recognize that the Flood Control Channel Property is subject to the jurisdiction of the
United States Army Corps of Engineers (the "Corps of Engineers") as the Flood Control Channel
Property was a formerly designated water course of the United States, and as such the Developer
will be required to obtain the issuance of certain permits and discretionary approvals from the
Corps of Engineers. In addition to compliance by the Developer with the requirements of
Sections 2.02,2.07,2.10,2.11,2.13 and 2.14 as amended by Amendment No.4 to this DDA, the
Escrow for the sale of the Flood Control Channel Property from the Agency to the Developer
shall not occur until there has been full compliance by the Developer with the following special
provisions applicable to the Flood Control Channel Property as such compliance shall be
detenl1ined by the Interim Executive Director of the Agency with the concurrence of the Director
of Development Services of the City, each at their sole and absolute discretion:
(i) The City through the Development Services Department has completed all
environmental reviews and assessments as deemed appropriate by the City pursuant
to both CEQA and NEPA, as applicable, for the intended use by the Developer of the
Flood Control Channel Property for an at-grade parking structure; and
(ii) The Developer has agreed to all mitigation measures for the Flood Control Channel
Property as shall be contained in the final CEQA and NEPA reviews and
determinations of the intended scope of development of the Flood Control Channel
Property as an at-grade parking structure; and
(iii) The City has received adequate written, binding and enforceable assurances from the
Developer that the Developer will in fact comply with all mitigation measures as
identified in the CEQA and NEP A reviews and approvals for the development of the
Flood Control Channel Property as an at-grade parking structure; and
(iv) All applicable permits and approvals have been issued by the Corps of Engineers and
all other federal. state and local governmental agencies having jurisdiction as to the
intended use and development of the Flood Control Channel Property as such
sufficiency as to the issuance of pern1its and approvals shall be determined by the
Director of Development Services; and
(v) The D/ERC has approved the development of the Flood Control Channel Property as
an at-grade parking structure and has imposed conditions of approval for the
development and use thereof by the Developer consistent with the intended uses, and
all City pern1its have been issued and approvals granted to allow for the development
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by the Developer of the at-grade parking structure improvements upon the Flood
Control Channel Property; and
(vi) The Developer has entered into a "Defense, Indemnification and Hold Harmless
Agreement" with the City in such form and content acceptable to the City, and
subject to approval by the Mayor and Common Council at a public meeting, whereby
the Developer has agreed to defend, indemnify and hold harmless the City, the
Agency and all elected officials, appointed officers and staff and consultants of the
City and the Agency from all losses and damages that may be suffered as the result of
the use of the Flood Control Channel Property by the Developer, including, but not
limited to, the injury or loss of life and property damage from water flows, flood
waters and debris flows and debris blockages that cause flooding or water damages to
any other property or result in any other damages, injury or loss of life and Agency to
maintain general liability insurance in the amount of $3,000,000; and
(vii) The Developer has entered into a "Maintenance and Operation Agreement" with the
City in such form and content acceptable to the City, and subject to approval by the
Mayor and Common Council at a public meeting, whereby the Developer has agreed
to maintain the Flood Control Channel Property and the improvements to be
constructed within and above the Flood Control Channel Property in such condition
as shall be determined by the City Engineer to be required from time-to-time; such
Maintenance and Operation Agreement shall also permit but not require the City to
enter into the Flood Control Channel Property and to conduct routine testing and
observations to assure compliance with all applicable permits and other laws
applicable thereto and consistent with the CEQA and NEPA mitigation measures and
all other permits and approvals as issued by any other federal, state or local
governmental agencies having jurisdiction over the Flood Control Channel Property;
furthermore, the City shall be permitted but not required to enter into and upon the
Flood Control Channel Property and to undertake all maintenance activities as shall
be reasonably determined by the City Engineer as necessary under the circumstances
and shall have the right to impose an enforceable lien upon the other property
identified in Amendment NO.3 to this DDA as the Agency Property and the Project
as may be then in the ownership of either the Developer or any other successor in
interest to recover all costs of such maintenance activities. The provisions of Section
2.15 shall survive the termination of this DDA and shall be a covenant that shall run
with the land and shall be binding on all successors and assignees of Waterman
Holdings, LLC.
21. Section 3.01. Uses. In Section 3.01 of the DDA, the wording "and the Flood Control
Channel Property" shall be added immediately following the wording "Agency Property", where
appearing in this Section.
22. Section 3.02. Modification of Covenants. In Section 3.02(a), Section 3.02(b), Section
3.02(c) and Section 3.02(d) of the DDA, the wording "and/or Flood Control Channel Property"
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7
shall be added immediately following the wording "Agency Property", where appearing in this
Section.
23. Section 3.03. Oblil!ation to Refrain from Discrimination. In Section 3.03 of the
DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property", where appearing in this Section.
24~ Section 3.05. No Liabilitv for Breach to a Predecessor in Interest. In Section 3.05 of
the DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property", where appearing in this Section.
25. Section 3.06. Al!encv Quit Claim Deed. Section 3.06 of the DDA shall be deleted in
its entircty and replaced with the following: "All of the provisions in Sections 3.01 to 3.05,
inclusive, shall be included in the Agency Quit Claim Deed for the Agency Property and the
Flood Control Channel Property. Accordingly, Sections 3.01 to 3.05, inclusive, shall survive the
Close of Escrow"
26. Section 3.07. Maintenance Condition of the Al!encv Property. In the heading for
Section 3.07 of the DDA, the wording "and Flood Control Channel Property" shall be added
immediately following the wording "Agency Property." In Section 3.07(a) and Section 3.07(b)
of the DDA, the wording "and/or the Flood Control Channel Property" shall be added
immediately following the wording "Agency Property", where appearing in Section 3.07(a) and
Section 3.07(b).
27. Section 3.08. Pledl!e of Al!encv Revenues to Buver. In Sections 3.08(a), 3.08(e) and
3.08(1) of the DDA, the word "Revised" shall be added immediately preceding the wording
"Agency Revenues Promissory Note." Additionally, the wording "and Flood Control Channel
Property" shall be added immediately following the wording "Agency Property", where
appearing in Section 3.08(a), Section 3.08(b), Section 3.08(c), Section 3.08(d) and Section of
3.08(e) of the DDA.
28. Section 3.10. Developer First Refusal Ril!ht. Section 3.10 of the DDA shall be
deleted, in its entirety.
29. Section 4.01. Defaults and Remedies. In Section 4.01(c) and Section 4.01(g) of the
DDA, the wording "and the Flood Control Channel Property" shall be added immediately
following the wording" Agency Property".
30. Section 5.02. Conflict of Interest. In Section 5.02 of the DDA, the wording "and/or
Flood Control Channel Property" shall be added immediately following the wording "Agency
Property", where appearing in this Section.
31. Section 5.05. Enforced Delav: Extension of Time of Performance. In line ten (10) in
Section 5.05(b) of the DDA, the word "Agency" shall be added immediately preceding the word
"Property" and the wording "and/or the Flood Control Channel Property" shall be added
P:\Agendas'Agenda Attachl11cnts\Agnllts-Amend 2008\ 12-15-08 \Valellnan Holdings, LLC - Amendment No. 4 doc
8
immediately following the wording "Agency Property." In line nine (9) in Section 5.05(c) of the
DDA, the word "Agency"' shall be added immediately preceding the word "Property" and the
wording "and/or the Flood Control Channel Property" shall be added immediately following the
wording "Agency Property."
32. Section 5.06. Inspection of Books and Records. In Section 5.06 of the DDA, the
wording "and/or Flood Control Channel Property" shall be added immediately following the
wording "Agency Property", where appearing in this Section.
33. Section 5.13. Entire A!?reement. The Agreement, as amended by the First Amendment,
as amended by the Second Amendment, as amended by the Third Amendment and as amended
by this Fourth Amendment constitutes the entire understanding and agreement between the
parties with respect to the Agency Property and the Flood Control Channel Property.
34. Section 5.14. Inte!?ration. In Section 5.14 of the DDA, the wording "and Flood Control
Channel Property" shall be added immediately following the wording "Agency Property", where
appearing in this Section.
35. Exhibit Headings. The following Exhibit headings shall be modified as set forth below:
Exhibit "A". Exhibit "A" shall be amended as follows:
"REVISED LEGAL DESCRIPTION FOR THE AGENCY PROPERTY'"
Exhibit "B". Exhibit "B" shall be amended as follows together with the inclusion of a
new Site Map for the Agency Property and the Flood Control Channel Property:
"REVISED SITE MAP FOR THE AGENCY PROPERTY AND FOR THE FLOOD
CONTROL CHANNEL PROPERTY"
Exhibit "C". Exhibit "C" shall be amended as follows:
"REVISED LEGAL DESCRIPTION OF THE FLOOD CONTROL CHANNEL
PROPERTY"
Exhibit "E". Exhibit "E" shall be amended as follows:
"REVISED IMPROVEMENTS"
Exhibit "F". Exhibit "F" shall be amended as follows:
"REVISED AGENCY REVENUES PROMISSORY NOTE"
36. Le!?al Effect. The DDA, the First Amendment, the Second Amendment and the Third
Amendment shall only be amended to the extent set forth herein. All other tenns, covenants
P:'Agendas\Agenda Anachmenls'Agnnts-Amend 200S' 12-15-08 Watcnnan Holdings. LLC - Amendment No_ 4_doc
9
andlor conditions of the DDA, the First Amendment, the Second Amendment and the Third
Amendment, unless specifically amended or modified by the terms, covenants andlor conditions
of this Fourth Amendment, shall remain unmodified and in full force and effect. In the event of
any inconsistency, contraction andlor ambiguity between the terms, covenants and conditions of
this Fourth Amendment, and the DDA andlor the First Amendment andlor the Second
Amendment andlor the Third Amendment, the inconsistency, contraction andlor ambiguity shall
be resolved in favor of the terms. covenants and conditions set forth in this Fourth Amendment.
37. Defined Terms. Terms not otherwise defined or redefined in this Fourth Amendment
shall have the meanings provided for in the Second Amendment.
38. Effective Date. This Fourth Amendment shall take effect from and after the date of final
approval hereof by the governing body of the Agency at a duly held joint public hearing and
after the execution of this Fourth Amendment by the Agency and the Buyer.
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P:\Agendas"Agenda Attachments\Agnl1ls-Amend 2008'12-15-08 Watennan HlIldings. LLC ~ Amendment No. 4.doc
10
IN WITNESS WHEREOF, the parties have signed this Fourth Amendment as of the date
first set forth above.
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Dated:
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
By: ~ {<"""'~
Agency Co I
DEVELOPER
Waterman Holdings, LLC,
a California limited liability company
Dated:
By:
Jian Torkan
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
II
Exhibit "A"
Revised Legal Description of the Agency Property
APN: 0135-191-16
PARCEL 1 OF PARCEl MAP 1'40.7140, I..OCATEP IN. THE CITY OF SAN
BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEl MAPS,
PAGES I AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE
OF CALIFORNIA.
EXCEPTING THERE FROM THAT PORTION OF SAID PARCEL 1 DESCRIBED AS
FOllOWS:
BEGINNING AT THE SOUTHWEST OORNEROF SAID PARCEL 1, SAID POINT
AlSO BEING THE NORTHWEST CORNER OF PARCEL 9 OF SAID OF PARCEL
MAP 1'40.7140;
THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAlo
PARCel 1;
THENCE lEAVING SAID WEST LINE SOUTH 89056'61" EAST 275.10;
THENCE SOUTH $1)024'16" EAST260.ooTO A POINT ON THE SOUTH LINE OF
SAID PARCel 1 , SAID SOUTH LINE BEING THE NORTH LINE OF SAID PAROEl 9;
THENCE SOUTH SQ059'06" WEST 534.71 FlEET ALONG SAID SOUTH LINE ~ND
SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1. AND THE
POINT OF BEGINNING.
P:\Agendas\Agenda Attachments\Agnnts-Amend 2008\12~lS-08 Waterman Holdings, Ltc - Amendment No. 4.doc
12
Exhibit "B"
Revised Site Map of the Agency Property the Flood Control Channel Property
P:\A.gendas\Agenda Attaclunents\Agrmts.Amend 2008\12.15.08 Watennan Holdings, LLC - Amendment No. 4.doc
13
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Exhibit "C"
Revised Legal Description of the Flood Control Channel Property
APN: 0135-191-17
PArleEL 9 OF PARCEL MAP NO, 7140, LOCATED IN THE CITY Of SAN
&ERNARDINO, AS PER MAP RECORDED IN BOOK 59 OF PARCEL MAPS, PAGES
1 AND 2, RECORDS OF THE COUNTY OF SAN BERNAR01NO, STATE OF
CALIFORNIA
TOGETHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO, 1140,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1, SAID POINT
ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 9;
THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID
PARCEL 1;
THENCE LEAVING SAID WEST LINE SOUTH @90ti!5'51"I.:AST 275,19;
THENC!;; SOUTH 86024'16" EAST 260,00 TO A POl'NTON THE SOUTH LINE OF
SAID PARCEL 1 , SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9;
THENCE SOUTH $9069'.06' WEST !!;34.71 fEET ALONG SAID So1JTH LINE ANI)
SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE
POINT OF BEGINNING,
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
14
Exhibit "D"
Form of Agency Quitclaim Deed
[NO CHANGES MADE]
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
15
Exhihit "E"
Revised Improvements
The Improvement on the Agency Property shall consist of approximately a 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.
The Improvement of the Flood Control Channel Property shall consist of a single floor structure
built above the Flood Control Channel Property to provide additional parking spaces for the 2-
story, 45,000 square foot building. The construction, landscaping, etc., of the single floor
parking structure shall comply with the City's Development Code and requirements from any
federal and/or state governmental agency, concerning improvements to and/or near flood control
channel land, that may be imposed on the Developer.
P:\Agendas\Agenda Attachrnents\Agrmts.Amend 2008\12-15-08 Waterman Holdings, LLC - Amendment No. 4.doc
16
Exhibit "F"
Revised Agency Revenues Promissory Note
P:\Agendas\Agenda Attachments\Agrmts-Arnend 2008\12-15..08 Waterman Holdings, LLC - Amendment No. 4.doc
17
REVISED AGENCY REVENUES PROMISSORY NOTE
Date: July _,200_
Los Angeles, California
The undersigned, the Redevelopment Agency of the City of San Bernardino, a public agency
(the "Agency"), promises to pay, and pledges to Waterman Holdings, LLC, a California limited
liability company (the "Buyer"), or the Buyer's assignee, one or more principal advances of a
portion ofthe 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 Revised
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 this 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 this
Note are payable by the Agency to the Buyer at 4221 Wilshire Boulevard, Suite 240, Los Angeles,
California 90010.
This Note shall be subject to the following terms, covenants and conditions:
I. 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 defmed below).
1.1 Ae:reement. The "Agreement" shall mean the Original Agreement (as defined
below), as amended by the First Amendment (as defined below), as further amended by the Second
Amendment (as defmed below), as further amended by the Third Amendment (as defined below)
and as further amended by the Fourth Amendment (as defined below), as executed by and between
the Agency and the Buyer, and all exhibits attached thereto.
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 Second Amendment) and at the Flood Control Charmel Property.
1.3 City. The "City" shall mean the City of San Bernardino.
1.4 County. The "County" shall mean San Bernardino County.
10f7
P:lABendaslAgenda Anachmellts\Exhibits\2008\12-1S.o8 Waterman Holdings, LLC. Revised Agency Promissory Note (EldJibit f),dOl::
1.5 First Amendment. The "First Amendment" shall mean that certain Amendment No.
1 to the Original Agreement, dated June 20, 2005, as executed by and between the Agency and the
Buyer.
1.6 Fourth Amendment. The "Fourth Amendment" shall mean that certain Amendment
No.4 to the Original Agreement, dated December 15,2008, as executed by and between the Agency
and the Buyer.
1.7 Fiscal Year. The "Fiscal Year" shall mean any given fiscal year for the County.
1.8 Initial Fiscal Year. The "Initial Fiscal Year" shall mean the first (l st) Fiscal Year
following the Fiscal Year in which the City issued the Certificate of Occupancy.
1.9 Interest Rate. The "Interest Rate" shall mean five percent (5%) per armum which
shall only apply to late payments remitted by the Agency to the Buyer and such Interest Rate shall
not be calculated upon the unpaid Principal balance of this Note, and shall accrue in the II1armer
provided for in Section 3(b) of this Note.
1.10. Late Charl!e. The "Late Charge" shall mean three percent (3 %) on the payment due
and owing by the Agency to the Buyer under this Note (subject to any applicable cure period(s) in
this Note and/or the Agreement).
1.11 Maturity Date. The "Maturity Date" shall mean the fust business day following the
expiration of the Term.
1.12 Oril!inal 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.
1.13 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. As of the date of this Note,
there is no discemable method to calculate the total Principal amount that may be payable by the
Agency to the Buyer pursuant hereto.
1.14 Second 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.
LIS Term. The "Term" shall mean the term of this Note commencing on the date of
execution of this Note and continuing thereafter until the end of the tenth (10th) Fiscal Year (with
the Initial Fiscal Year being the fust Fiscal Year of this ten (lO)-year Fiscal Year period). This Note
has been duly executed and delivered as of July 1 the next succeeding Fiscal Year of the Agency
20f7
P:\Agendas\Agenda Anachments\Exhibits\2008\12_1 S.(JS Waterman Holdings, LLC - Revised Agency Promissory Note (Exhibit F).doc
during which the Buyer has obtained a Certificate of Occupancy from the City of San Bernardino for
the project described in the Original Agreement, as amended.
1.16 Third Amendment. The "Third Amendment" shall mean that certain Amendment
No.3 to the Original Agreement, dated as of July 21,2008, by and between the Agency and the
Buyer.
2. Interest. Interest shall not be paid on the Principal balance of this Note but shall be paid only
upon a default or other late payment by the Agency as provided in this Note. Subject to Section 3(b)
of this Note, 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. Pavment 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") in an
amount 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 (8) 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 and/or the Buyer's successor-in-
interest to the ownership of the Agency Property and of the Flood Control Channel Property
attributable to the development to occur on the Agency Property and on the Flood Control Channel
Property pursuant to this Agreement (such 60% of the 1% ofthe real property taxes as actually paid
by the Buyer and/or Buyer's successor-in-interest to the ownership of the Agency Property and of
the Flood Control Channel Property 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 the Flood Control Channel 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 and of the Flood Control Channel 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 and on the Flood Control Channel Property as of each December 10 and/or April I 0 (or any
other delinquency date established by the County for the payment of supplemental property taxes)
have been duly paid. 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 the adequacy of the documentation as submitted by
the Buyer within the applicable 30-day period of time, shall constitute approval of same by the
Agency. The Agency shall be obligated to provide written notice to the Buyer within said 30-day
period oftirne, as to any inadequacy of any documentation provided by the Buyer to the Agency.
Failure of the Agency to remit the requested payment of the Agency Revenues within ten (10)
30f7
P:\Agel1daslAgenda Artachmcnb\hhibil$\2008\12-IS",()& Waterman Holdings, LLC . Revised AgelIcy Promissory Note (Exhibit F),doc
calendar days after the expiration of the initial 3D-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) It shall be a condition precedent to each payment of the Agency Revenues
hereunder that as of each such Agency Revenues payment due date there has been no Transfer (as
defined in the Agreement), assignment, or sale or other conveyance of the Agency Property or of the
Flood Control Channel Property or any interest in the Agreement which is prohibited by the
Agreement.
(d) In the event that the Buyer should Transfer any interest in the Agreement, this
Note and/or the Agency Property and/or the Flood Control Channel Property in violation of the
Agreement or this Note, or sell the Agency Property and/or the Flood Control Channel Property in
violation of the Agreement or this Note, prior to the expiration of the applicable ten-year period for
the receipt of the Agency Revenues, the obligation of the Agency for any further remittances of the
Agency Revenues shall immediately cease and terminate as to that portion ofthe Agency Property
and/or of the Flood Control Channel Property to which such prohibited Transfer or other sale or
conveyance has occurred.
(e) Notwithstanding anything herein to the contrary, upon the issuance of a
Certificate of Occupancy by the City for the Agency Property and/or for the Flood Control Channel
Property, any of the following transactions shall not be deemed a "Transfer" prohibited by the
Agreement or this Note: (i) the transfer of fee title to the Agency Property and/or to the Flood
Control Channel Property to any entity in which an entity directly or indirectly, majority-owned and
controlled by Jian T orkan, is the general partner or managing member or partner, (ii) a transfer of fee
title to the Agency Property and/or to the Flood Control Channel Property in a transaction in which
the Buyer enters into a lease for the Agency Property and/or for the Flood Control Channel Property
pursuant to which it is obligated to pay all property taxes, or (iii) a transfer to any entity which is
directly or indirectly majority-owned and controlled by Jian Torkan. On and after the issuance of the
Certificate of Occupancy as specified above and for a period of time equal to ten (10) years after the
date of the issuance ofthe Certificate of Occupancy, and in addition to the ability of the Buyer to
enter into a transaction that is deemed not to be a Transfer as defmed above, the Buyer may sell,
transfer or assign the Agency Property and/or the Flood Control Channel Property, the Agreement
and this Note to any other person or entity subject to the following: (i) such subsequent owner of the
Agency Property and/or of the Flood Control Channel Property has assumed in writing all duties and
obligations of the Buyer as contained in the Agreement and this Note in form and substance as may
be reasonably required by the Agency General Counsel and (ii) the subsequent owner has assumed
all Agency Property and/or Flood Control Channel Property maintenance, covenants and obligations
set forth in the Agreement, or in any other document mutually executed by Buyer and the Agency.
Following the ten (10) year period referred to above, there shall be no restriction or condition to any
sale of transfer by the Buyer of the Agency Property and/or ofthe Flood Control Channel Property
and/or the Buyer's interest in this Agreement. Following the expiration of the Term, the Agency
shall have no further duty or obligation to make any payment of the Agency Revenues, or any
portion thereof, to the Buyer or to any successor-in-interest in the ownership of the Agency Property
and/or of the Flood Control Channel Property (except for the Agency Revenues and/or any other
40f7
P:\AgendaslAgenda Attachmellls\Exhibi[s\10011112-15-011 Wllel"lDall Holdings, LLC - Revised Agency Promissory Note (Exhibit F).doc
amounts due and owing by the Agency to the Buyer under this Agreement). Notwithstanding
anything herein to the contrary, any transfer of the Agency Property and/or of the Flood Control
Channel Property and/or the Buyer's interest in the Agreement and in this Note pursuant to a
foreclosure or deed-in-lieu thereof shall not constitute a prohibited Transfer.
(f) 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 this 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 the notice or
otherwise as set forth in this 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. Preoavment. 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, but only if interest is payable due
to a prior payment default by the Agency, and any and all late charges or other amounts then owed
by the Agency hereunder.
5. Aoolication ofPavments. 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, if any, and then to Principal then due and payable under this Note.
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 this
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:
56f?
P:lAgendasl.Agmda Attachmems\Exhibiu'J.OO8\12-15"'()& Waterman Holdings, LLC - RevUed ~Dcy Prominory Note (Eldribit F).doe
Address for the Agency:
Redevelopment Agency of the City of San Bernardino
Attention: Interim Executive Director
201 North "E" Street, Suite 301
San Bernardino, CA 92401
Address for the Buyer:
Waterman Holdings, LLC
Attention: Jian Torkan
422] Wilshire Boulevard, Suite 240
Los Angeles, CA 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 the
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, the 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 this Note and/or the Agreement (collectively, the "Default Payment
Amount"), and the Agency shall immediately pay to the Buyer the Default Payment Amount.
10. Unsecured Promissory Note. This Note is unsecured, and is not secured by any real or
personal property of any nature whatsoever.
I] 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. Headinl!: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.
] 4. Governinl! Law. This Note shall be governed by and construed in accordance with the laws
of the State of California.
] 5. Judicia] Proceedinl!s and Attornevs' Fees. If either party hereto files any action or brings
any action or proceeding against the other arising out of this Note, then as between the Buyer and the
Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as
damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a
separate action or proceeding brought to recover such attorneys' fees. The costs, salary and
60f7
P:\Agendas\Agenda Attachments\E.xhibiu\200g\12-15_08 Watmnan Holdings, lLC - Revised Agency Promissory Note (Exhibit F)doc
expenses of the City Attorney for the City and members of his office in enforcing this Note shall be
considered as "attorneys' fees" for purposes of this Section. Any such action or proceeding must be
commenced in the Superior Court for the County of San Bernardino, San Bernardino District, State
of California.
16. Enforcement Costs. All reasonable out-of-pocket costs incurred by the Buyer in the
enforcement of this Note shall be added to the amounts due under this Note.
17. Assi!!nment. This Note may be assigned by the Buyer, subject to the restrictions and
limitations provided for in Section 3.08(c), 3.08(d) and 3.08(e) of this Note and by the Agency, but
no such assignment shall relieve the Agency from any of its obligations or liabilities hereunder. The
terms, covenants and conditions of this Note shall be binding upon, and inure to the benefit of, the
successors and assigns of the Buyer (subject to the restrictions and limitations provided for in
Section 3.08(c), 3.08(d), and 3.08(e)ofthis Note) and of the Agency.
IN WITNESS WHEREOF, the Agency has executed this Agency Revenues Promissory
Note as of the date first written above.
AGENCY
Redevelopment Agency ofthe City of San Bernardino
a public agency
By:
Emil A. Marzullo, Interim Executive Director
70f7
P:\Agendas\Agenda AttachmentslExhibits\2008\12_15.Q8 Waterman Holdings, LLe - Revised Agency Promissory Note (Exhibit F)_doc
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
FROM: Emil A. Marzullo
Interim Executive Director
SUBJECT: Joint Public Hearing - Waterman Holdings, LLC -
Amendment No. 4 to the 2004 Disposition and
Development Agreement (Central City East
Redevelopment Project Area)
DATE:
October 21. 2008
SvnoDsis of Previous Commission/Council/Committee Action(s):
On November 2, 2004, Redevelopment Committee Members Estrada and Longville unanimously voted to recommend that the
Community Development Commission of the City of San Bernardino (the "Commission") consider a disposition and development
agreement with Waterman Holdings. LLC, for approval.
On December 6, 2004. the Commission adopted Resolution No, CDC/2004-49 approving the sale of certain real property by the
Agency to Waterman Holdings, LLC, and authorized the Executive Director to execute the Disposition and Development
Agreement between the Agency and Waterman Holdings, LLC, and the Mayor and Common Council simultaneously adopted
Resolution No, 2004-386 approving the sale of certain real property (4"' and Waterman Avenue - APN: 0135-191-11) within the
Central City East Redevelopment Project Area ("Project Area").
SvnoDsis Continued to Next Pai!e....
_______________________________________________________ ____________u_______n______________ ---------------------------------------------------._--------------------._----------------------------+--------------
n.R~~ommended Motion(s):
Open/Close Joint Public Hearing
Mavor and Common Council
Resolution of the Mayor and Common Council of the City of San Bernardino consenting to the disposition of Certain Real
Property by the Redevelopment Agency of the City of San Bernardino ("Agency") to Waterman Holdings, LLC (4"' and
Waterman Avenue - APN: 0135-191-17) (Central City East Redevelopment Project Area)
(Communitv Develooment Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving the sale of Certain Real
Property by the Redevelopment Agency of the City of San Bernardino ("Agency") to Waterman Holdings, LLC, and
authorizing the Interim Executive Director of the Agency to execute Amendment No. 4 to the 2004 Disposition and
Development Agreement. as amended, between the Agency and Waterman Holdings, LLC (4th Street and Waterman Avenue
- APN: 0135-191-17) (Central City East Redevelopment Project Area)
Contact PersonCs):
Mike Trout
Central City East Redevelopment Project
Area
Phone:
(909) 663-1044
Project Area(s)
Ward(s):
Supporting Data Attached:
o Staff Report 0 Resolution(s) 0 Amendment(s)! Agreement(s) 0 Map(s) 0 Letters
FUNDING REQUIREMENTS Amount: $
N!A
Source:
N!A
SIGNATURE:
Emil A. Marz
Budget Authority: N/ A
Fiscal Review: ,,~~ c: (J... ("<:;-'<J/~~/~(I'~'
Barbara Lindseth, Administrative Services Director
nco;;;;;;.issi~~7c.;;;;~~;i..Noies.;.mmm...mnmmm.m..mmm......mm...mmmmm'mmmm.
~ ~!;2-o~tR:SJ
//- -0 It * .
-----------------------------------------------~--------------------_.______________~________________n________________
P IAgelldas\Comm De~' CommissionlCDC 2008\11-03-08 Waterman Holdings. LLC _ Amendment No 4 SR,doc
COMMISSION MEETING AGENDA
Meeting Date: I ~ - {,- ell?'
Agenda Item Number: 12 ~ t(
Economic Development Agency Staff Report
Waterman Holdings, LLC - Amendment No.4
October 21, 2008
SvnoDsis of Previous Commission/Council/Committee Action(s):
On June 7, 2005, Redevelopment Committee Members Estrada and McGinnis unanimously voted to recommend that the
Commission consider the action of June 20, 2005.
On June 20, 2005, the Commission adopted Resolution No. CDC/2005-19 approving Amendment No. I to the 2004
Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Executive
Director to execute Amendment No. I.
On June 19, 2006, the Commission adopted Resolution No. CDC/2006-20 approving Amendment No. 2 to the 2004
Disposition and Development Agreement between the Agency and Waterman Holdings, LLC, and authorized the Executive
Director to execute Amendment No.2.
On November S, 2007, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously voted to recommend
that the Commission consider the action of Amendment No.3.
On July 21, 200S, the Commission adopted Resolution No. CDC/200S-26 approving Amendment No. 3 to the 2004
Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Interim
Executive Director to execute Amendment NO.3.
On October 9, 200S, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously voted to recommend the
Mayor and Common Council and Commission consider the action of Amendment NO.4.
------------------------------------------
P:\Agendas\Comm Dev CommissionlCDC 2008\11-03-08 Waterman Holdings. LLC _ Amendment No.4 SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 11/03/2008
Agenda Item Number:
~~,
II .. _ .A
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
JOINT PUBLIC HEARING - WATERMAN HOLDINGS, LLC-
AMENDMENT NO.4 TO THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
BACKGROUND:
On December 6, 2004, the Mayor and Common Council of the City of San Bernardino (the "Council")
and Community Development Commission of the City of San Bernardino (the "Commission") approved
the sale of approximately 3.9 acres owned by the Redevelopment Agency of the City of San Bernardino
(the "Agency") located at the southwest corner of 4th Street and Waterman Avenue (APN: 0135-191-11)
(the "Property") pursuant to a 2004 Disposition and Development Agreement (the "DDA") between the
Agency and Waterman Holdings, LLC (the "Buyer/Developer").
The DDA, as approved, required for the Buyer/Developer 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/Developer would have the option to purchase the
Phase II Property at a later date. The Agency pledged 60% of the tax increment that the completed
Project would generate over a period of ten years to offset the below market rental rate that the County
required of the Buyer/Developer.
On May 17, 2005, the San Bernardino County Board of Supervisors approved a ten-year lease with the
Buyer/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 were redefined. As a result, the Phase I project was then to be located at the
southwest corner of 4th Street and Waterman Avenue.
In the interim, two items arose that would necessitate a change to the original DDA; first, it was
determined that the pledge of tax increment to the Buyer/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 Buyer/Developer would now require both the Phase I and
Phase II sites (APN: 0135-191-11) (the "Agency Property") be combined as a single site.
The Buyer/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 Buyer/Developer has deposited the sum of $20,000 into
escrow and the balance of $492,424 will be paid upon the closing of the escrow. Per Amendment No.2,
the Agency will pledge to the Buyer/Developer from general Agency revenues under a Promissory Note
P\Agendas\Comm Dev CommissionlCOC 2008\11-03-08 Waterman Holdings. LLC - Amendment No.4 SR doc
COMMISSION MEETING AGENDA
Meeting Date: 11103/2008
Agenda Item Number: J2.~'
_1_9_114
and not as a pledge of tax increment revenues, an amount equal to 60% of the I % tax revenues generated
by the proposed Project (estimated development cost is $6 million) for a period of ten years. As per the
original DDA, the 60% pledge was authorized by the Commission in an effort to offset or compensate the
Buyer/Developer for the below market rate ten-year lease with the County. The Agency payment
obligation will commence upon presentation of a cancelled check by the Buyer/Developer and as of the
fiscal year following completion of the Project by the Buyer/Developer and said payment will be paid
after each December lOth and April lOth tax payment.
On June 19, 2006, the Commission approved Amendment No. 2 to the DDA, whereby the
Buyer/Developer will develop on the Agency Property, a 2-story building containing a minimum of
45,000 square feet of office space, to include parking and landscaping, and to lease to TAD (the
"Project"). TAD provides jobs and employment services to residents and job training programs.
Additionally, in Amendment No.2, the Agency pledged to reimburse, to the Buyer/Developer, an amount
equal to 60% of the I % of new property taxes generated by the Project for a period of ten years from the
general revenues of the Agency.
On July 21, 2008, the Commission approved Amendment No.3 to the DDA, wherein the Agency would
reimburse the Buyer/Developer an amount not to exceed $399,500 for the actual costs for the required
Off-Site Improvements. This reimbursement would be paid from the sale proceeds of the Agency
Property 30 days following the completion of the Project as evidenced by a Certificate of Occupancy
issued by the City of San Bernardino ("City") and verification that the Off-Site Improvements have been
constructed by the BuyerlDeveloper and accepted by the City. The cost reimbursements to the
BuyerlDeveloper would not exceed the lesser of the actual cost paid for the Off-Site Improvements or
$399,500 utilizing prevailing wage rates. All other terms and conditions of the DDA, as amended by
Amendments No. I and No.2, would remain unchanged.
CURRENT ISSUE:
The BuyerlDeveloper has informed the Agency that they need additional land for additional parking for
the Project. The Buyer/Developer approached the Agency about acquiring the Flood Control Channel
Property (the "Flood Control Property," APN: 0135-191-17 formerly APN: 0135-191-15). The Flood
Control Channel runs along the southern boundary of the Agency Property. The Buyer/Developer has
estimated that it will cost $1.1 million to improve the Flood Control Property for use as parking.
The Buyer/Developer has already had preliminary conversations with the Western Regional Water
District and has formulated a plan which the Western Regional Water District has indicated will be a very
good solution to the current open Flood Control Property. Additionally, the BuyerlDeveloper has stated
that they will be paying for the entire cost of improving the Flood Control Property for use as parking.
The Agency has obtained a current appraisal for the Flood Control Property. The Agency appraiser has
determined that the fair market value of the property is $36,000.
Approval of Amendment No.4 to the DDA allows the Agency to sell the Flood Control Channel to the
Buyer/Developer for $36,000, this dollar amount and the value of the improvements to this property will
generate additional property tax for the calculation of the annual payment to the BuyerlDeveloper per the
DDA, as amended. All other terms and conditions of the DDA, as amended by Amendments No.1, No.2
and No.3, would remain unchanged.
P\Agendas\Comm Dev Commission\CDC 2008\11-03.08 Waterman Holdings. LtC _ Amendment No.4 SRdoc
COMMISSION MEETING AGENDA
Meeting Date: 11/03/2008
Agenda Item Number: 12~,
~
ENVIRONMENTAL IMP ACT:
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 $36,000 from the Buyer/Developer for sale of the Flood Control Property. The
Agency estimates that it will take 30 days to close from the opening of escrow.
Additionally, any new property taxes generated as a result of the improvements to the Flood Control
Property will be included in the calculation of the Agency in determining the annual payment to the
Buyer/Developer per the terms and conditions of the DDA, as amended. The annual payment to the
Buyer/Developer will be an amount equal to 60% of the 1 % of the new property taxes generated from the
development of the Flood Control Property as well as the Agency Property. The total payment to the
Buyer/Developer is estimated to be $420,000 over a ten-year period.
RECOMMENDA nON:
That the Mayor and Common Council and Community Development Commission adopt the attached
Resolutions.
1m Executive Director
Emil A. Marzullo,
P:lAgendas\Comm Dev Commission\CDC 2008\ 11-03-08 Waterman Holdings, LLC . Amendment No.4 SR.OOc
COMMISSION MEETING AGENDA
Meeting Date: 11/0312008
Agenda Item Number: -123'
. LlI.1t#J
SUMMARY REPORT PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 OF
THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW REGARDING THE
DISPOSITION AND DEVELOPMENT OF CERTAIN AGENCY PROPERTY LOCATED
SOUTH OF THE SOUTHWEST CORNER OF 4TH STREET AND WATERMAN AVENUE
(APN: 0135-191-17) SAN BERNARDINO, CALIFORNIA PURSUANT TO THE TERMS OF
AMENDMENT NO.4 TO THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND WATERMAN HOLDINGS, LLC - CENTRAL CITY EAST
REDEVELOPMENT PROJECT AREA
INTRODUCTION
This Summary Report (the "Report") has been prepared by the Redevelopment Agency of the City of
San Bernardino (the "Agency") pursuant to Section 33433 of the California Health and Safety Code.
This Report sets forth certain details of the proposed sale by the Agency of real property totaling
approximately .84 +/- acres of vacant land, described as Assessor Parcel Number 0135-191-17 located
south of the southwest corner of 4th Street and Waterman Avenue, San Bernardino, California (the
"Site"). to Waterman Holdings, LLC (the "Developer"). An appraisal was performed on the Site by
James Smothers. MAl (the "Appraiser") in August 2008 and reported the basic value of $9.85/square
foot and the appraised value to be $.97/square foot.
To arrive at the appraised value of $.97/square foot, the Appraiser reviewed sales of properties with
low development potential due to their topography and/or accessibility. The sales were then time
adjusted for market conditions, up to the date of value and divided by the basic value of land,
$9.85/square foot. The range of percental;;e of the base value went from 2.0% to 25.9%. The average
percentage of the base value was 9.75% and the median was 10.05%. The Appraiser determined that
the fair market value of the Site is 10% of the base value.
APN: 0135-191-17
Site Base Value = ($9.85/square foot x 36,489 square feet)
Less % discount for lack of development potential
Less $ discount for lack of development potential
Fair Market Value ($35,900)
$359,000
90%
($323,000)
$36,000 (rounded)
The Agency acquired title to the Site in 1983 from the City of San Bernardino (the City"). The
Site was part of the historic Warm Creek flood control system until a permanent concrete channel was
built to the east of Waterman Avenue. No capital improvements have been performed on the Site since
the Agency acquired title. The Site is currently vacant land. Pursuant to the proposed Amendment No.
4 (the "Amendment") to the 2004 Disposition and Development Agreement (the "DON') the
Developer will acquire the Site from the Agency and develop the Site so that it may be used for
parking.
This Report is organized into the following 6 sections:
I. Salient Points of the proposed Amendment No.4: This section includes a description of the
major responsibilities to be assumed by the Agency and the Developer.
P-'lgenda".-\genda Auachmems\Summary Repons\2008\11-03-08 W" ....,an Holdings, LLC _ Amendment No of Summary 33433 Report doc
II. Cost of the Amendment No.4 to the Aeencv: This section outlines the proposed costs of
Amendment No.4 to the Agency.
Ill. Estimated Value of the Interests to be Conveved Determined at the Hiehest and Best Use
Permitted Under the Redevelopment Plan: This section summarizes the value of the Flood
Control Channel Property to be conveyed to the Developer at the highest use permitted
pursuant to the terms of Amendment No.4.
IV. Estimated Reuse Value of the Interests Determined at the Required Use and with the
Conditions, Covenants and Restrictions Required bv the l'roposed Amendment No.4:
This section summarizes the sales price to be paid to the Agency by the Developer.
V. Blieht Alleviation: This section describes the existing blighting conditions in and around the
Project Area, and an explanation of how the proposed sale and development of the Agency Lots
will assist in alleviating the blighting conditions.
VI. Conformance with the AB 1290 Implementation Plan: This section identifies how the
proposed Amendment No. 4 will result in a development activity that fulfills goals and
objectives established in the Agency's AB 1290 Five-Year Implementation Plan.
I. SALIENT POINTS OF THE PROPOSED DDA
A. Description of the proposed Proiect
. The purpose of Amendment No.4 is to transfer the Flood Control Channel Property
to the Developer to facilitate the development of a single floor parking structure in
support of a 2-story 45,000 square foot office building structure that the Developer
is constructing for the County of San Bernardino. The Developer will provide all
necessary improvements required in connection with the construction of the single
floor parking structure.
B. Agencv Responsibilities
· Transfer the Flood Control Channel Property to the Developer pursuant to the terms
of Amendment NO.4.
C. Developer Responsibilities
· Execute and implement Amendment No.4 with the Agency and agree to accept the
Flood Control Channel Property per the terms of Amendment No.4 and develop a
parking structure.
· Complete the construction of the parking structure without any further Agency
assistance per the terms of Amendment NO.4.
II. COST OF THE PROPOSED AMENDMENT NO.4 TO THE AGENCY
The costs of the proposed Amendment No.4 would be the usual and normal costs associated
with the sale of property which is estimated to be $2,000.
2
P ",Agendas\Agenda Atlachrnents\Summary Repons\1008\ll-03_08 Waterman Holdings, LLC _ Amendment No .; Summary 33433 Report,doc
III. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT
THE HIGHEST AND BEST USE PERMITTED UNDER THE REDEVELOPMENT
PLAN
The estimated value of the interest to be conveyed ($36,000) is based upon the low
development potential of the property. Construction of a single floor parking structure is
considered the highest and best use permitted under the Project Area Plan.
IV. ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
DETERMINED AT THE REQUIRED USE AND WITH THE CONDITIONS.
COVENANTS AND RESTRICTIONS REQUIRED BY THE PRQPOSED
AMENDMENT NO.4
The estimated fair market value of the interest to be conveyed to the Developer is $36,000
based upon the terms and conditions pursuant to Amendment No.4.
V. BLIGHT ALLEVIATION
The development of the Flood Control Channel Property will eliminate existing blight, foster
the reuse of underutilized property into a single floor parking structure and return the Flood
Control Channel Property to the property tax rolls.
VI. CONFORMANCE WITH THE AB 1290 IMPLEMENTATION PLAN
The Five-Year Implementation Plan ("Plan") adopted by the Agency contains several broad
operational goals and objectives for the Project Area. Among these are the following:
. Eliminate blighting influences, including deteriorating buildings, uneconomic
land uses, obsolete structures, and other environmental, economic and social
deficiencies.
. To re-plan, redesign and redevelop underdeveloped areas that are stagnant or
improperly utilized.
Amendment No.4 will assist the Agency in meeting the objectives and goals of its Plan for the Project
Area in the following way:
The execution of Amendment No.4 with the Developer will continue redevelopment activities of the
Agency by developing underutilized Flood Control Channel Property and increasing property taxes.
Based upon the preceding factors, Amendment No.4 is consistent with the Plan. The interest in the
Flood Control Channel Property to be conveyed to the Developer will be developed in conformance
with the City's General Plan and the Municipal Development Code.
3
P \Agendas\Agenda AnachmentsiSummary Repom\1008\ll-OJ-OS \Vaterman Holdings, LLC - Amendment No 4 Summary 33433 Report doc
1
2
3
4
5
6
7
RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO CONSENTING TO THE DISPOSITION OF
CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO WATERMAN
HOLDINGS, LLC (4TH AND WATERMAN AVENUE - APN: 0135-191-17)
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and charter
city, duly organized and existing pursuant to the provisions of the constitution of the State of
8
9
10
California; and
WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a
11 public body, corporate and politic existing under the laws of the State of California, Health and
12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and
13 underutilized land; and
14
WHEREAS, the Agency desires to dispose of certain real property (the "Flood Control
15
Channel Property," APN: 0135-191-17) owned by the Agency, as set forth in that certain
16
17
18
19
Amendment No.4 (the "Amendment") to the 2004 Disposition and Development Agreement (the
"DDA") by and between the Agency and Waterman Holdings, LLC (the "BuyerlDeveloper"); and
WHEREAS, the Agency Property is located south of the southwest comer of 4th Street and
20 Waterman Avenue within the Central City East Redevelopment Project Area and is presently an
21 unimproved vacant lot; and
22
WHEREAS, an appraisal of the Flood Control Channel Property was performed in August
23 2008 by Smothers Appraisal (the "Appraiser"); and
24
25
WHEREAS, according to the appraisal report dated September 4, 2008 (the "Agency
Appraisal Report"), prepared by the Appraiser, the fair market value of the Flood Control Channel
26
27 Property is $36,000 for the approximately .84 acres ofland; and
28
1
FIWILSON\Rcsolutions\EDA\II-OJ-OS Waterman Holdings LLC + Amendment No 4 MCC Reso doc
1 WHEREAS, the Agency intends to enter into the Amendment pursuant to which the Agency
2 proposes to sell the Flood Control Channel Property to the Buyer for the fair market value of
3 $36,000; and
4
WHEREAS, the Amendment provides for the development of the Flood Control Channel
5
6
7
Property so that it may be used as a parking lot; and
WHEREAS, the Developer has estimated that it will cost $1,100,000 for the construction of
8 the improvements to the Flood Control Channel Property; and
9 WHEREAS, the Agency has prepared and published a notice of joint public hearing in the
10 San Bernardino County SUN newspaper on October 20, 2008 and October 27,2008, regarding the
11
consideration and approval of the Amendment; and
12
13
WHEREAS, pursuant to Health and Safety Code Section 33433(b), the Agency may transfer
the Flood Control Channel Property to the Buyer subject to the Mayor and Common Council of the
14
15 City of San Bernardino (the "Council") and the Community Development Commission of the City
16 of San Bernardino (the "Commission") adopting separate Resolutions authorizing the Agency to
17 transfer the Flood Control Channel Property in light of the findings set forth herein, pursuant to
18 Health and Safety Code Section 33433; and
19
WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety
20 Code Section 33433 (the "Report") that describes the salient point of the Amendment and identifies
21
the cost of the Amendment to the Agency; and
22
23
WHEREAS, pursuant to Section 15332 of the California Environmental Quality Act (the
"Act") Guidelines the Agency has reviewed the proposed sale and use of the Flood Control Channel
24
25 Property and has determined that the project, as identified in the Amendment, is exempt from the
26 Act and qualifies for a Categorical Exemption, Class 32 (Guidelines Section 15332) as the project
27 meets all four requirements for an Infill Project; and
28
2
F IWILSON\ResoluliOl1SIEDA\l 1-03-08 Waterman Holdings U.c - Amendment No.4 MCC Reso.doc
1 WHEREAS, the acquisition of the Flood Control Channel Property by the Buyer IS
2 consistent with the Central City East Redevelopment Plan.
3
NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY
4
THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
5
6
7
FOLLOWS:
Section 1.
On November 3, 2008, the Council conducted a full and fair joint public
8 hearing with the Commission, as the governing board of the Agency, relating to the disposition of the
9 Flood Control Channel Property from the Agency to the Buyer and the development thereof pursuant
10 to the Amendment. The minutes of the City Clerk for the November 3, 2008 meeting of the Council
11 shall include a record of all communication and testimony submitted to the Council by interested
12 persons relating to the public hearing and the approval of the Amendment.
13
Section 2.
The Council hereby receives and approves the Report and the other written
14 materials submitted to the Council at the meeting at which this Resolution is adopted. The Report
15 contains information required under Health and Safety Code Section 33433.
16
Section 3.
This Resolution is adopted in order to satisfy the provisions of Health and
17 Safety Code Section 33433(a)(l) and (b)(2) related to the disposition of the Flood Control Channel
18 Property to the Buyer in accordance with the Amendment and the Council hereby approves the
19 transfer of the Flood Control Channel Property to the Buyer pursuant to the Amendment for the
20 consideration as provided therein. The Council hereby finds and determines as follows:
21 I. That the Report a copy of which is attached hereto as Attachment I and by this reference
22 made a part hereof, contains the findings described in Health and Safety Code Section 33433(b )(2)
23 and said findings are hereby adopted.
24 2. The Flood Control Channel Property is being sold to the Buyer at the purchase price of
25 $36,000 for the development of a parking lot which consideration is the fair market value
26 determined at its highest and best use.
27 3. This action is consistent with the implementation plan adopted pursuant to Health and
28 Safety Code Section 33490, the Central City East Redevelopment Plan.
3
F\WILSON\Resolulions\EDA\11..03-08 Waterman Holdings LLC - Amendment No 4 MeC Resodoo::
1
2
3
4
5
6
7
8
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO CONSENTING TO THE DISPOSITION OF
CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO WATERMAN
HOLDINGS, LLC (4TH AND WATERMAN AVENUE - APN: 0135-191-17)
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
Section 4.
This Resolution shall take effect upon its adoption and execution in the
manner as required by the City Charter.
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a
meeting thereof,
, 2008, by the following vote to wit:
Navs
Abstain
Absent
Rachel G. Clark, City Clerk
21
The foregoing Resolution is hereby approved this
day of
,2008.
22
23
24
25
Approved as to Form:
26
27
28
Patrick 1. Morris, Mayor
City of San Bernardino
4
F\W1LSON\Resolutions\EDAIll-OJ-08 Waterman Holdings LL... - Amendment No 4 MeC Reso doc
SUMMARY REPORT PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 OF
THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW REGARDING THE
DISPOSITION AND DEVELOPMENT OF CERTAIN AGENCY PROPERTY LOCATED
SOUTH OF THE SOUTHWEST CORNER OF 4TH STREET AND WATERMAN AVENUE
(APN: 0135-191-17) SAN BERNARDINO, CALIFORNIA PURSUANT TO THE TERMS OF
AMENDMENT NO.4 TO THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND WATERMAN HOLDINGS, LLC - CENTRAL CITY EAST
REDEVELOPMENT PROJECT AREA
INTRODUCTION
This Summary Report (the "Report") has been prepared by the Redevelopment Agency of the City of
San Bernardino (the "Agency") pursuant to Section 33433 of the California Health and Safety Code.
This Report sets forth certain details of the proposed sale by the Agency of real property totaling
approximately .84 +/- acres of vacant land, described as Assessor Parcel Number 0135-191-17 located
south of the southwest comer of 4th Street and Waterman Avenue, San Bernardino, California (the
"Site"), to Waterman Holdings, LLC (the "Developer"). An appraisal was performed on the Site by
James Smothers, MAl (the "Appraiser") in August 2008 and reported the basic value of $9.85/square
foot and the appraised value to be $.97/square foot.
To arrive at the appraised value of $.97/square foot, the Appraiser reviewed sales of properties with
low development potential due to their topography and/or accessibility. The sales were then time
adjusted for market conditions, up to the date of value and divided by the basic value of land,
$9.85/square foot. The range of percentage of the base value went from 2.0% to 25.9%. The average
percentage of the base value was 9.75% and the median was 10.05%. The Appraiser determined that
the fair market value of the Site is 10% of the base value.
APN: 0135-191-17
Site Base Value = ($9.85/square foot x 36,489 square feet)
Less % discount for lack of development potential
Less $ discount for lack of development potential
Fair Market Value ($35,900)
$359,000
90%
($323,000)
$36,000 (rounded)
The Agency acquired title to the Site in 1983 from the City of San Bernardino (the City"). The
Site was part of the historic Warm Creek flood control system until a permanent concrete channel was
built to the east of Waterman Avenue. No capital improvements have been performed on the Site since
the Agency acquired title. The Site is currently vacant land. Pursuant to the proposed Amendment No.
4 (the "Amendment") to the 2004 Disposition and Development Agreement (the "DDA") the
Developer will acquire the Site from the Agency and develop the Site so that it may be used for
parking.
This Report is organized into the following 6 sections:
I. Salient Points of the proposed Amendment No.4: This section includes a description of the
major responsibilities to be assumed by the Agency and the Developer.
ATTACHMENT "1"
I
P.\Agendas\Agenda Attachments\Summary Reparu\2008\ll-OJ-OS Waterman Holdings. Ll.C. Amer.dment No.4 Summary 33433 Report doc
II. Cost of the Amendment No.4 to the A2encv: This section outlines the proposed costs of
Amendment No.4 to the Agency.
III. Estimated Value of the Interests to be Conveved Determined at the Hi2hest and Best Use
Permitted Under the Redevelopment Plan: This section summarizes the value of the Flood
Control Channel Property to be conveyed to the Developer at the highest use permitted
pursuant to the terms of Amendment No.4.
IV. Estimated Reuse Value of the Interests Determined at the Required Use and with the
Conditions. Covenants and Restrictions Required bv the Proposed Amendment No.4:
This section summarizes the sales price to be paid to the Agency by the Developer.
V. Bli2ht Alleviation: This section describes the existing blighting conditions in and around the
Project Area, and an explanation of how the proposed sale and development of the Agency Lots
will assist in alleviating the blighting conditions.
VI. Conformance with the AB 1290 Implementation Plan: This section identifies how the
proposed Amendment No. 4 will result in a development activity that fulfills goals and
objectives established in the Agency's AB 1290 Five-Year Implementation Plan.
I. SALIENT POINTS OF THE PROPOSED DDA
A. Description of the proposed Proiect
. The purpose of Amendment No.4 is to transfer the Flood Control Channel Property
to the Developer to facilitate the development of a single floor parking structure in
support of a 2-story 45,000 square foot office building structure that the Developer
is constructing for the County of San Bernardino. The Developer will provide all
necessary improvements required in connection with the construction of the single
floor parking structure.
B. Agencv Responsibilities
. Transfer the Flood Control Channel Property to the Developer pursuant to the terms
of Amendment No.4.
C. Developer Responsibilities
. Execute and implement Amendment No.4 with the Agency and agree to accept the
Flood Control Channel Property per the terms of Amendment No.4 and develop a
parking structure.
. Complete the construction of the parking structure without any further Agency
asSIstance per the terms of Amendment No.4.
II. COST OF THE PROPOSED AMENDMENT NO.4 TO THE AGENCY
The costs of the proposed Amendment No.4 would be the usual and normal costs associated
with the sale of property which is estimated to be $2,000.
2
P\Agendu\Agenda Anachments\Summary ReponsIlOO8\11..Q)-08 Waterman Holdings. LLC.. Amendmerll No.4 Summary 33433 Reporuloc
III. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT
THE HIGHEST AND BEST USE PERMITTED UNDER THE REDEVELOPMENT
PLAN
The estimated value of the interest to be conveyed ($36,000) is based upon the low
development potential of the property. Construction of a single floor parking structure is
considered the highest and best use permitted under the Project Area Plan.
IV. ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
DETERMINED AT THE REQUIRED USE AND WITH THE CONDITIONS.
COVENANTS AND RESTRICTIONS REQUIRED BY THE PROPOSED
AMENDMENT NO.4
The estimated fair market value of the interest to be conveyed to the Developer is $36,000
based upon the terms and conditions pursuant to Amendment No.4.
V. BLIGHT ALLEVIATION
The development of the Flood Control Channel Property will eliminate existing blight, foster
the reuse of underutilized property into a single floor parking structure and return the Flood
Control Channel Property to the property tax rolls.
VI. CONFORMANCE WITH THE AB 1290 IMPLEMENTATION PLAN
The Five-Year Implementation Plan ("Plan") adopted by the Agency contains several broad
operational goals and. objectives for the Project Area. Among these are the following:
· Eliminate blighting influences, including deteriorating buildings, uneconomic
land uses, obsolete structures, and other environmental, economic and social
deficiencies.
· Tore-plan, redesign and redevelop underdeveloped areas that are stagnant or
improperly utilized.
Amendment No.4 will assist the Agency in meeting the objectives and goals of its Plan for the Project
Area in the following way:
The execution of Amendment NO.4 with the Developer will continue redevelopment activities of the
Agency by developing underutilized Flood Control Channel Property and increasing property taxes.
Based upon the preceding factors, Amendment No.4 is consistent with the Plan. The interest in the
Flood Control Channel Property to be conveyed to the Developer will be developed in conformance
with the City's General Plan and the Municipal Development Code.
3
P\Agendas\Agenda Attachments\Summary Reports\1008\II-OJ-OS Waterman Holdings. LLC _ Amendment No.4 Summary 334J) Reporuioc
1
2
3
4
5
6
7
8
9
10 WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), is a
RESOLUTION NO.
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING THE SALE OF CERTAIN
REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF THE CITY
OF SAN BERNARDINO ("AGENCY") TO WATERMAN HOLDINGS, LLC,
AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE
AGENCY TO EXECUTE AMENDMENT NO.4 TO THE 2004 DISPOSITION
AND DEVELOPMENT AGREEMENT, AS AMENDED, BETWEEN THE
AGENCY AND WATERMAN HOLDINGS, LLC (4TH STREET AND
WATERMAN AVENUE - APN: 0135-191-17) (CENTRAL CITY EAST
REDEVELOPMENT PROJECT AREA)
11 public body, corporate and politic existing under the laws of the State of California, Health and
12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and
13 underutilized land; and
14
WHEREAS, the Community Development Commission of the City of San Bernardino (the
15
"Commission") is the governing board of the Agency; and
16
17
WHEREAS, the City of San Bernardino, California (the "City") is a municipal corporation
18 and charter city, duly organized and existing pursuant to the provisions of the constitution of the
19 State of California; and
20 WHEREAS, on December 6, 2004, the Commission adopted Resolution No. CDC/2004-49
21 approving the sale of certain real property (APN: 0135-191-11) (the "Agency Property") by the
22 Agency to Waterman Holdings, LLC (the "Developer"), and authorizing the Agency Executive
23
Director to execute the 2004 Disposition and Development Agreement (the "DDA") between the
24
Agency and the Developer; and
25
26
WHEREAS, on June 20, 2005, the Commission adopted Resolution No. CDC/2005-19
27 approving and authorizing the Executive Director of the Agency to execute Amendment No. I to the
28 DDA between the Agency and the Developer; and
I
P:\Agcndas\ResoluliQl\.S\Resolutlons\2008\II-03-08 Waterman Holdings, LLC - Amendment No.4 CDC Reso.doc
#1<3/ B
I , - '3-0
1 WHEREAS, Amendment No. I to the DDA caused Phase I and Phase II of the Project to
2 exchange locations for each such Phase; and
3
WHEREAS, on June 19, 2006, the Commission adopted Resolution No. CDC/2006-20
4
approving and authorizing the Executive Director of the Agency to execute Amendment No.2 to the
5
DDA between the Agency and the Developer; and
6
7
WHEREAS, Amendment No.2 to the DDA eliminated the previously proposed Phase I and
Phase II of the Project and was replaced with a single phase Project consisting of the construction 0
8
an approximately 45,000 square foot, two-story building along with the appropriate and necessary
9
improvements and landscaping as well as establishing a reimbursement schedule wherein the
10
Agency would pledge to the Developer an amount equal to 60% of the I % of new property taxes
11
generated by the Project for a period often (10) years; and
12
13 WHEREAS, on July 21, 2008, the Commission adopted Resolution No. CDC/2008-26
14 approving and authorizing the Interim Executive Director of the Agency to execute Amendment No.
15 3 to the DDA between the Agency and the Developer; and
16
WHEREAS, Amendment No. 3 to the DDA will allow the Agency to reimburse the
17
Developer, from the Agency Property sale proceeds, an amount not to exceed the lesser of the actual
18
cost paid for the Off-Site Improvements or $399,500 utilizing prevailing wage rates; and
19
20
WHEREAS, this payment will be made to the Developer 30 days following the completion
of the Project as evidenced by a Certificate of Occupancy issued by the City and upon
21
submission/validation by the Agency of the actual costs paid for the Off-Site Improvements; and
22
23 WHEREAS, the Agency owns certain real property, approximately .84 acres, located south
24 of the southwest corner of 4th Street and Waterman Avenue within the Central City East
25 Redevelopment Project Area and is presently an unimproved flood control channel (the "Flood
26 Control Channel Property", APN: 0135-191-17); and
27
WHEREAS, the Developer has determined that additional parking is necessary for the
28
development of the Project to the north of the Flood Control Channel Property; and
2
P:\Agendu\Resolutiom\Resolutions\2008\lI-03-08 Waterman Holdings, Ltc. Amendmen1 No_ 4 COC Rcso.OOc
1 WHEREAS, the Developer has offered to purchase the Flood Control Channel Property
2 from the Agency; and
3
4
5
6
WHERE,,-S, an appraisal of the Flood Control Channel Property was performed in August
2008 by Smothers Appraisal (the "Appraiser"); and
WHEREAS, according to the report dated September 4, 2008 (the "Appraisal Report"),
7 prepared by the Appraiser, the fair market value of the Flood Control Channel Property is $36,000;
8 and
9 WHEREAS, the Agency intends to enter into Amendment No.4 to the DDA, as amended
10 (the "Amendment"), pursuant to which the Agency proposes to sell the Flood Control Channel
11 Property to the Developer for the fair market value of $36,000; and
12
13
WHEREAS, the Amendment provides for the development of the Flood Control Channel
Property so that it may be used as a parking lot; and
14
15 WHEREAS, the Developer has estimated that it will cost $1,100,000 for the construction of
16 the improvements to the Flood Control Channel Property; and
17
WHEREAS, the Agency has prepared and published a notice of joint public hearing in the
18
San Bernardino County SUN newspaper on October 20,2008 and October 27,2008, regarding the
19
20
21
consideration and approval of the Amendment; and
WHEREAS, pursuant to Health and Safety Code Section 33433(b), the Agency may transfer
22 the Flood Control Channel Property to the Buyer subject to the Mayor and Common Council of the
23 City of San Bernardino (the "Council") and the Commission adopting separate Resolutions
24 authorizing the Agency to transfer the Flood Control Channel Property in light of the findings set
25 forth herein, pursuant to Health and Safety Code Section 33433; and
26
WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety
27
Code Section 33433 (the "Report") that describes the salient point of the Amendment and identifies
28
the cost of the Amendment to the Agency; and
3
P\Agendu\Resolutions\Rewlutions\2008\ll-OJ-08 Waterman Holding$, u.C - Amendment No. 4 CDC Reso,doc
1 WHEREAS, pursuant to Section 15332 of the California Environmental Quality Act (the
2 "Act") Guidelines, the Agency has reviewed the proposed sale and use of the Flood Control
3 Channel Property and has determined that the project, as identified in the Amendment, is exempt
4 from the Act and qualifies as a Categorical Exemption, Class 32 (Guidelines 15332) as the project
5 meets all four requirements for an In-fill Project; and
6
7
WHEREAS, disposition of the Flood Control Channel Property to the Developer IS
consistent with the Central City East Redevelopment Plan; and
8
9 WHEREAS, it is appropriate for the Commission to approve the Amendment and the
10 disposition of the Flood Control Channel Property to the Developer as set forth in the Amendment,
11 and this Resolution.
12
NOW, TIIEREFORE, TIIE COMMUNITY DEVELOPMENT COMMISSION OF TIIE CITY
13 OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS:
14
Section 1.
On November 3, 2008, the Commission, as the governing board of the
15
Agency, conducted a full and fair joint public hearing with the Council relating to the disposition of
16
the Flood Control Channel Property from the Agency to the Buyer and the development thereof
17
pursuant to the Amendment. The minutes of the Agency Secretary for the November 3, 2008
18
meeting of the Commission shall include a record of all communication and testimony submitted to
19
the Commission by interested persons relating to the public hearing and the approval of the
20
Amendment.
21
Section 2.
The Commission hereby receives and approves the Report and the other
22
written materials submitted to the Commission at the meeting at which this Resolution is adopted.
23
24
25
26
27
28
The Report contains information required under Health and Safety Code Section 33433.
Section 3.
This Resolution is adopted in order to satisfy the provisions of Health and
Safety Code Section 33433(a)(I) and (b)(2) related to the disposition of the Flood Control Channel
Property to the Buyer in accordance with the Amendment. The Commission hereby finds and
determines as follows: that the Report contains the information described in Health and Safety
Code Section 33433(b)(2) wherein the Flood Control Channel Property is being sold to the Buyer
4
P:\AgcndaslResolutions\Resolutions\2008\11_())_08 Watennan !-kJ.........s. LLC ... Amendment No.4 CDC Reso_doc
1 at the purchase price of $36,000 for the development of a parking lot which consideration is the fair
2 market value determined at its highest and best use in accordance with the Central City East
3 Redevelopment Plan.
4
Section 4.
The Commission hereby approves the Amendment and the Interim
5 Executive Director is hereby authorized and directed to execute the Amendment on behalf of the
6 Agency together with nonsubstantive and conforming changes as may be recommended by the
7 Interim Executive Director and Agency Counsel. The Interim Executive Director is hereby
8 authorized to take all appropriate actions as set forth in the Amendment to implement the
9 disposition and redevelopment of the Flood Control Channel Property.
10
Section S.
This Resolution shall take effect from and after its date of adoption by this
5
P:\AgendasIResolutionslResolutions\2008\1I-03.{)8 Wllerman Holdings, LLC - Amendmellt No. 4 CDC Reso.doc
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RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING THE SALE OF
CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGE~CY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO WATERMAN
HOLDINGS, LLC, AND AUTHORIZING THE INTERIM EXECUTIVE
DIRECTOR OF THE AGENCY TO EXECUTE AMENDMENT NO.4 TO
THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT, AS
AMENDED, BETWEEN THE AGENCY AND WATERMAN HOLDINGS,
LLC (4TH STREET AND WATERMAN AVENUE - APN: 0135-191-17)
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
8
Development Commission of the City of San Bernardino at a
meeting
9 thereof, held on the day of
10 Commission Members: Aves
11 ESTRADA
12 BAXTER
13 BRINKER
14 DERRY
15 KELLEY
16 JOHNSON
17 MC CAMMACK
, 2008, by the following vote to wit:
Navs
Abstain
Absent
18
19
20
Secretary
The foregoing Resolution is hereby approved this
21
22
23
24
day of
,2008.
Patrick J. Morris, Chairperson
Community Development Commission
of the City of San Bernardino
25 Approved as to Form:
26
27 By: ~~
A;~O~;cl
28
6
P:\Agendas\Resolutions\Resolutions\2008\II_OJ-08 Waterman Holdings, LtC - Amendment No .. CDC Reso.doc
AMENDMENT NO.4 TO THE
2004
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
WATERMAN HOLDINGS, LLC
(4th Street and Waterman Avenue Property)
This Amendment No.4 (this "Fourth Amendment") is dated as of November 3,2008, by
and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate
and politic (the "Agency"), and Waterman Holdings, LLC, a California limited liability company
(the "Buyer" or "Developer"), and is an amendment to that certain 2004 Disposition and
Development Agreement by and between the Agency and the Developer, 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 within the City of San Bernardino and within the
Central City East Redevelopment Project Area of the Agency (the "DDA" or "Agreement"), as
amended by that certain Amendment No. I to the DDA, dated June 20, 2005 (the "First
Amendment"), as amended by that certain Amendment No.2, dated June 19,2006 (the "Second
Amendment") and as amended by that certain Amendment No.3, dated July 21, 2008 (the
"Third Amendment"), by and between the Agency and the Buyer, 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, wherein the
Buyer, without limitation, agreed to purchase certain land that the Agency owned at the
southwest comer of 4th Street and Waterman Avenue (the "Agency Property", formerly APN:
0135-191-11 and now APN: 0135-191-16 after and pursuant to the Lot Line Adjustment, as
defined below), in the City of San Bernardino (the "City"), County of San Bernardino (the
"County"), State of California (the "State"). The Agency and the Buyer executed the First
Amendment to the DDA on June 20, 2005. The First Amendment modified the Agreement, to
provide, without limitation, for the transposition of the Phase I project and the Phase II project.
The Agency and the Buyer executed the Second Amendment to the DDA on June 19,2006. The
Second Amendment modified the DDA and the First Amendment, to provide, without limitation,
for the elimination of the Phase I and Phase II projects and was replaced by a single phase, two-
story building of approximately 45,000 square feet of floor space including the necessary and
appropriate on-site improvements and landscaping (the "Project").
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\11-03-08 Watennan Holdings, LLC - Amendment No. 4.doc
I
B. Pursuant to the Second Amendment, the Developer and the Agency, without
limitation, agreed to the following: (i) the Developer would purchase the Agency Property for
Five Hundred Twelve Thousand Four Hundred Twenty-Four Dollars ($512,424), (ii) the
Agency would reimburse the Developer a portion of the Agency Revenues (as defined in the
Agency Revenues Promissory Note (the "Note") attached as Exhibit "F" to the Second
Amendment) to be received by the Agency, in the manner provided therein and subject to the
terms, covenants and conditions of the Note, and (iii) the Developer would have a right of first
refusal on the "Flood Control Channel Property" (as defined in the Second Amendment).
C. After the approval and execution of the Second Amendment, the City added
additional requirements to the Project by requiring the Developer to construct certain off-site
improvements including, without limitation, new curbs, ~tters and sidewalks along 4th Street
and Waterman Avenue and street repair/resurfacing on 4 Street along the front of the Project
(collectively, the "Off-Site Improvements"). Pursuant to the Third Amendment, the Agency
agreed to reimburse the Developer for the actual costs paid by the Developer to construct the
Off-Site Improvements or the sum of Three Hundred Ninety-Nine Thousand Five Hundred
Dollars ($399,500), whichever is less, in the manner provided for in the Third Amendment.
D. The legal descriptions of the Agency Property and the Flood Control Channel
Property were revised and amended by the Lot Line Adjustment No. LLA 08-01 (the "Lot Line
Adjustment"), recorded on June 12, 2008, as Instrument No. 2008-0268868, in the Official
Records of the County Recorder's Office for the County of San Bernardino, State of California.
Pursuant to the Lot Line Adjustment, APN: 0135-191-11 and APN: 0135-191-15 were amended
and became APN: 0135-191-16 and APN: 0135-191-17, respectively.
E. The Agency and the Developer wish to further amend the DDA, as amended by
the First Amendment, as amended by the Second Amendment and as amended by the Third
Amendment, pursuant to the terms, covenants and conditions of this Fourth Amendment.
F. Pursuant to this Fourth Amendment, the Agency and the Developer shall agree,
without limitation, to the following: (i) the Agency shall sell to the Developer, and the
Developer shall purchase from the Agency, the Flood Control Channel Property, for the sum of
Thirty-Six Thousand Dollars ($36,000), (ii) the legal description for the Agency Property and for
the Flood Control Channel Property shall be amended in accordance with and as revised by the
Lot Line Adjustment, and (iii) the Note shall be revised as provided for in the "Revised Agency
Revenues Promissory Note" attached hereto and to the DDA as Exhibit "F".
G. The Agency and the Buyer desire to approve and execute this Fourth Amendment
to the DDA upon the terms, covenants and conditions as set forth herein.
P:\Agendas\Agenda Attachments\Agnnts-Amend 2008\11-03-08 Watennan Holdings, LLC - Amendment No. 4.doc
2
NOW, THEREFORE, THE AGENCY AND THE BUYER DO HEREBY AGREE
AS FOLLOWS:
1. Section 1.01. Purnose of A2reement. In Section 1.01 of the DDA, the following shall
be deleted from the end of the first section "the granting by the Agency to the Buyer of the First
Refusal Right, and the exercise by the Buyer of the First Refusal Right." and replaced with the
following "and the Flood Control Channel Property." Additionally, the second sentence of
Section 1.01 shall be deleted in its entirety and replaced with the following "The purchase and
development of the Agency Property and the Flood Control Channel Property 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."
2. Section 1.03. Benefit to Proiect Area. Section 1.03 of the DDA shall be deleted in its
entirety and replaced with the following: "The Agency has determined that the purchase and
development of the Agency Property and Flood Control Channel Property by the Buyer, in
accordance with this Agreement, will materially assist in the elimination of blight and the
implementation of the Redevelopment Plan for the Project Area."
3. Section 1.06. Chan2e in Mana2ement and Control of Buver - Assimment and
Transfer. In Section 1.06(a)(1) of the DDA, the wording "and/or the Flood Control Channel
Property" shall be added immediately following the word "Property." In Section 1.06(a)(3) of
the DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the word "Property." In Section 1.06(a)(4) of the DDA, the word "Agency" shall be
added immediately preceding the word "Property" and the wording "and/or the Flood Control
Channel Property" immediately following the "Property."
4. Section 1.07. List of Attachments to Aneement. As a result of the Lot Line
Adjustment which was necessary for the development of the Project, the legal descriptions and
assessor's parcel number for both the Agency Property and for the Flood Control Channel
Property have been changed. Accordingly, Exhibit "A", Exhibit "B", Exhibit "C", Exhibit "E"
and Exhibit "F" of the DDA, as revised by the First Amendment, by the Second Amendment and
by the Third Amendment, shall be deleted and replaced by the following Exhibits (which
Exhibits are attached hereto and incorporated herein by this reference):
Exhibit "A" "Revised Legal Description of the Agency Property"
Exhibit "B" "Revised Site Map of the Agency Property and the
Flood Control Channel Property"
Exhibit "C" "Revised Legal Description of the Flood Control Channel Property"
Exhibit "E" "Revised Improvements"
Exhibit "F" "Revised Agency Revenues Promissory Note"
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5. Section 1.08. No Recordation of Al!reement: Survival. In line two (2) in Section 1.08
of the DDA, the word "Agency" shall be added immediately preceding the word "Property".
The wording "and/or the Flood Control Channel Property" shall be immediately added following
the word "Property", where appearing in Section 1.08 of the DDA.
6. Section 1.09. Flood Control Channel ProDertv. Section 1.09 shall be added to the
DDA as follows: "The flood control channel consists of approximately 0.84 acres that is
presently aligned to the south of the Agency Property (the "Flood Control Channel Property").
The Buyer intends to purchase and to develop the Flood Control Channel Property as additional
parking for the Project. The Buyer shall be entitled to close escrow to acquire the Flood Control
Channel Property at anytime on or before April 30, 2009, unless such date is extended, in
writing, at the discretion of the Interim Executive Director for a total period oftime not to exceed
six (6) months without an amendment to this Agreement.
7. Section 2.01. Acquisition and DiSDosition of the ProDertv. In Section 2.01 of the
DDA, the word "Agency" shall be added immediately preceding the word "Property" and the
wording "and Flood Control Channel Property" shall be added immediately following the word
"Property", where appearing in the title. Additionally, the wording "and Flood Control Channel
Property" shall be added immediately following the word "Property", wherever found in this
Section.
8. Section 2.02. Conditions for Transfer of the Al!encv ProDertv. In Section 2.02(a) and
Section 2.02(b) of the DDA, the wording "and Flood Control Channel Property" shall be added
immediately following the word "Propt:rty", where appearing in the title. Section 2.02(c) shall
be added to the DDA as follows: "The Flood Control Channel Property shall be transferred to the
Buyer at the Close of Escrow provided that within the periods of time set forth in this Agreement
(i) neither party has terminated this Agreement, (ii) the Buyer has delivered to the Agency the
Due Diligence Certificate in connection with the Flood Control Channel Property regarding
Section 2.11 and (iii) all other conditions of the Close of Escrow in connection with the Flood
Control Channel Property set forth in this Agreement have been met and the escrow costs
relating to the Close of Escrow have been paid by the appropriate party." Section 2.02(d) shall
be added to the DDA as follows: "The parties shall deliver jointly, approved written escrow
instructions (consistent with the terms of this Agreement) to the Escrow Holder for transfer of
the Flood Control Channel Property, as soon as reasonably possible."
9. Section 2.03. Purchase Price. The Purchase Price for the Flood Control Channel
Property shall be Thirty-Six Thousand Dollars ($36,000) (the "Flood Control Channel Property
Purchase Price").
10. Section 2.04. ODeninl! of Escrow. Section 2.04(c) shall be added to the DDA as
follows: "The transfer and sale of the Flood Control Channel Property shall take place through
Escrow to be administered by the Escrow Holder. The Escrow for the Flood Control Channel
Property shall be deemed open (the "Opening of Escrow") upon receipt by the Escrow Holder of
a fully executed copy of the Agreement, the First Amendment, the Second Amendment, the
Third Amendment and this Fourth Amendment. The Escrow Holder shall promptly confirm to
P:\Agendas\A.genda Attachments\Agrmts-Amend 2008\11-03-08 Waterman Holdings, LLC - Amendment No. 4.doc
4
the parties the escrow number and the title insurance order number assigned to the Escrow for
the Flood Control Channel Property with the Escrow Holder."
11. Section 2.06(a). Conveyance of Title. In Section 2.06(a) of the DDA, the wording
"and Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section. Additionally, Section 2.06(a)(3) shall be
amended as follows: "(3) the Redevelopment Plan (existing as of the date of the Fourth
Amendment)."
12. Section 2.07. Additional Closinl! Oblil!ations of Al!encv. In Section 2.07 of the DDA,
the wording "and/or Flood Control Channel Property" shall be added immediately following the
wording "Agency Property", where appearing in this Section.
13. Section 2.08. Closinl! Oblil!ations of Buver. In Section 2.08 of the DDA, the wording
"and/or Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section.
14. Section 2.09. Environmental Law. In Section 2.09 of the DDA, the wording "and/or
the Flood Control Channel Property" shall be immediately added following the word "Agency
Property", where appearing in this Section.
15. Section 2.10. Due Dilil!ence Investil!ation of the Al!encv Property. In the section
heading for Section 2.10 of the DDA, the wording "and/or Flood Control Channel Property"
shall be added immediately following the wording "Agency Property." In Section 2.10(a) of the
DDA, the wording "and/or Flood Control Channel Property" shall be added immediately
following the wording "Agency Property". In Section 2.10(b) and (c) the wording "and/or the
Flood Control Channel Property" shall be added immediately following the wording "Agency
Property." In Section 2.10(d) of the DDA, the word "Agency" shall be added immediately
preceding the word "Property" and the wording "and/or the Flood Control Channel Property"
shall be added immediately following the word "Property." In Section 2.IO(e) of the DDA, the
wording "and/or the Flood Control Channel Property" shall be added immediately following the
wording "Agency Property."
16. Section 2.11. Due Dilil!ence Certificate. In Section 2.11, Section 2.1 I (a) and Section
2.11(b) of the DDA, the wording "and/or Flood Control Channel Property" shall be added
immediately following the wording "Agency Property", where appearing in this Section.
17. Section 2.12. Books and Records. In line three (3) of Section 2.12 of the DDA, the
words "respective portion of the" shall be deleted. Additionally, the wording "and/or Flood
Control Channel Property" shall be added immediately following the wording "Agency
Property", where appearing in this Section.
18. Section 2.13 Condition of the Property. In Section 2.13 of the DDA, the wording
"and/or Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section.
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19. Section 2.14. Review and Approval of Condition of Title. In Section 2.14(a) and
Section 2.14(b) of the DDA, the wording "and/or Flood Control Channel Property" shall be
added immediately following the wording "Agency Property", where appearing in this Section.
20. Section 3.01. Uses. In Section 3.01 of the DDA, the wording "and the Flood Control
Channel Property" shall be added immediately following the wording "Agency Property", where
appearing in this Section.
21. Section 3.02. Modification of Covenants. In Section 3.02(a), Section 3.02(b), Section
3.02(c) and Section 3.02(d) of the DDA, the wording "and/or Flood Control Channel Property"
shall be added immediately following the wording "Agency Property", where appearing in this
Section.
22. Section 3.03. Oblieation to Refrain from Discrimination. In Section 3.03 of the
DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property", where appearing in this Section.
23. Section 3.05. No Liabilitv for Breach to a Predecessor in Interest. In Section 3.05 of
the DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property", where appearing in this Section.
24. Section 3.06. Aeencv Ouit Claim Deed. Section 3.06 of the DDA shall be deleted in
its entirety and replaced with the following: "All of the provisions in Sections 3.01 to 3.05,
inclusive, shall be included in the Agency Quit Claim Deed for the Agency Property and the
Flood Control Channel Property. Accordingly, Sections 3.01 to 3.05, inclusive, shall survive the
Close of Escrow."
25. Section 3.07. Maintenance Condition of the Aeencv Propertv. In the heading for
Section 3.07 of the DDA, the wording "and Flood Control Channel Property" shall be added
immediately following the wording "Agency Property." In Section 3.07(a) and Section 3.07(b)
of the DDA, the wording "and/or the Flood Control Channel Property" shall be added
immediately following the wording "Agency Property", where appearing in Section 3.07(a) and
Section 3.07(b).
26. Section 3.08. Pledee of Al!:encv Revenues to Buver. In Sections 3.08(a), 3.08(e) and
3.08(f) of the DDA, the word "Revised" shall be added immediately preceding the wording
"Agency Revenues Promissory Note." Additionally, the wording "and Flood Control Channel
Property" shall be added immediately following the wording "Agency Property", where
appearing in .Section 3.08(a), Section 3.08(b), Section 3.08(c), Section 3.08(d) and Section of
3.08(e) of the DDA.
27. Section 3.10. Developer First Refusal Rieht. Section 3.10 of the DDA shall be
deleted, in its entirety.
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6
28. Section 4.01. Defaults and Remedies. In Section 4.01(c) and Section 4.01(g) of the
DDA, the wording "and the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property".
29. Section 5.02. Conflict of Interest. In Section 5.02 of the DDA, the wording "and/or
Flood Control Channel Property" shall be added immediately following the wording "Agency
Property", where appearing in this Section.
30. Section 5.05. Enforced Delav: Extension of Time of Performance. In line ten (10) in
Section 5.05(b) of the DDA, the word "Agency" shall be added immediately preceding the word
"Property" and the wording "and/or the Flood Control Channel Property" shall be added
immediately following the wording "Agency Property." In line nine (9) in Section 5.05(c) of the
DDA, the word "Agency" shall be added immediately preceding the word "Property" and the
wording "and/or the Flood Control Channel Property" shall be added immediately following the
wording "Agency Property."
31. Section 5.06. Inspection of Books and Records. In Section 5.06 of the DDA, the
wording "and/or Flood Control Channel Property" shall be added immediately following the
wording "Agency Property", where appearing in this Section.
32. Section 5.13. Entire Al!:reement. The Agreement, as amended by the First Amendment,
as amended by the Second Amendment, as amended by the Third Amendment and as amended
by this Fourth Amendment constitutes the entire understanding and agreement between the
parties with respect to the Agency Property and the Flood Control Channel Property.
33. Section 5.14. Intel!:ration. In Section 5.14 of the DDA, the wording "and Flood Control
Channel Property" shall be added immediately following the wording "Agency Property", where
appearing in this Section.
34. Exhibit Headings. The following Exhibit headings shall be modified as set forth below:
Exhibit "A". Exhibit "A" shall be amended as follows:
"REVISED LEGAL DESCRIPTION FOR THE AGENCY PROPERTY"
Exhibit "B". Exhibit "8" shall be amended as follows together with the inclusion of a
new Site Map for the Agency Property and the Flood Control Channel Property:
"REVISED SITE MAP FOR THE AGENCY PROPERTY AND FOR THE FLOOD
CONTROL CHANNEL PROPERTY"
Exhibit "C". Exhibit "c" shall be amended as follows:
"REVISED LEGAL DESCRIPTION OF THE FLOOD CONTROL CHANNEL
PROPERTY"
P:\Agendas\A.genda Attachments\Agrmts-Amend 2008\l1..Q3...()8 Watennan Holdings, LLC - Amendment No. 4.doc
7
Exhibit OlE". Exhibit "E" shall be amended as follows:
"REVISED IMPROVEMENTS"
Exhibit "F". Exhibit "F" shall be amended as follows;
"REVISED AGENCY REVENUES PROMISSORY NOTE"
35. Lee:al Effect. The DDA, the First Amendment, the Second Amendment and the Third
Amendment shall only be amended to the extent set forth herein. All other terms, covenants
and/or conditions of the DDA, the First Amendment, the Second Amendment and the Third
Amendment, unless specifically amended or modified by the terms, covenants and/or conditions
of this Fourth 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 Fourth Amendment, and the DDA and/or the First Amendment and/or the Second
Amendment and/or the Third Amendment, the inconsistency, contraction and/or ambiguity shall
be resolved in favor of the terms, covenants and conditions set forth in this Fourth Amendment.
36. Defined Terms. Terms not otherwise defined or redefined in this Fourth Amendment
shall have the meanings provided for in the Second Amendment.
37. Effective Date. This Fourth Amendment shall take effect from and after the date of final
approval hereof by the governing body of the Agency at a dwy held public meeting and after the
execution of this Fourth Amendment by the Agency and the Buyer.
1//
1//
/1/
1//
/1/
/1/
1//
1//
1//
1//
1//
/1/
/1/
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\11-03-08 Waterman Holdings, LLC - Amendment No. 4.doc
8
IN WITNESS WHEREOF, the parties have signed this Fourth Amendment as of the date
first set forth above.
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Dated:
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
B~ \ <'~
Agency I
DEVELOPER
Waterman Holdings, LLC,
a California limited liability company
Dated:
By:
Jian Torkan
P:\Agendas\Agenda Attachments\Agnnts-Amend 2008\11-03-08 Watennan Holdings, LLC - Amendment No. 4.doc
9
Exhibit "A"
Revised Legal Description of the Agency Property
APN: 0135-191-16
PARCEL 1 OF PARCEL MAP NO. 7140. lOCATED IN THE CITY OF SAN
BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS.
PAGES I AND 2. RECORDS OF THE COUNTY OF SAN BERNARDINO. STATE
OF CALIFORNIA.
EXCEPTING THERE FROM THAT PORTION OF SAID PARCEL 1 DESCRIBED AS
FOllOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1, SAID POINT
ALSO BEING THE NORTHWEST CORNER OF PARCEL 9 OF SAID OF PARCEL
MAP NO. 7140;
THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID
PARCEL 1;
THENCE lEAVING SAID WEST LINE SOUTH 89056'51" EAST 275.19;
THENCE SOUTH 86024'16" EAST 260.00 TO A POINT ON THE SOUTH LINE OF
SAID PARCEL 1 , SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9;
THENCE SOUTH 89059'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND
SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE
POINT OF BEGINNING.
P:\Agendas\Agenda Attachments\A.grmts-Amend 2008\11-03-08 Waterman Holdings, LLC - Amendment No. 4.doc
10
Exhibit "B"
Revised Site Map of the Agency Property the Flood Control Channel Property
P:\Agendas\Agenda Attachments\Agrmts.Amend 2008\1 J-03-o8 Watennan Holdings, LLC - Amendment No. 4.doc
11
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Exhibit "c"
Revised Legal Description of the Flood Control Channel Property
APN: 0135-191-17
PARCEL 9 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN
BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS, PAGES
1 AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE OF
CALIFORNIA
TOGETHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 7140,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1, SAID POINT
ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 9;
THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID
PARCEL 1;
THENCE LEAVING SAID WEST LINE SOUTH 89056'51" EAST 275.19;
THENCE SOUTH 86024'16" EAST 260.00 TO A POINT ON THE SOUTH LINE OF
SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9;
THENCE SOUTH 89059'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND
SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE
POINT OF BEGINNING.
P:\AgendaslAgenda AttachmentslAgnnts-Amend 2008\II-OJ-08 Walennan Holdings, LLC - Amendment No. 4.doc
12
Exhibit "D"
Form of Agency Quitclaim Deed
[NO CHANGES MADE]
P:lAgendaslAgenda AttachmentslAgrmts-Amend 2008\11-()3'()8 Watennan Holdings, LLC - Amendment Nn. 4.doc
13
Exhibit "E"
Revised Improvements
The Improvement 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.
The Improvement of the Flood Control Channel Property shall consist of a single floor structure
built above the Flood Control Channel Property to provide additional parking spaces for the 2-
story, 45,000 square foot building. The construction, landscaping, etc., of the single floor
parking structure shall comply with the City Development Code and requirements from any
federal and/or state governmental agency, concerning improvements to and/or near flood control
channel land, that may be imposed on the Developer.
P:\Agendas\Agenda Attachments\A.grmts-Amc:nd 2008\11-03-08 Waterman Holdings, LLC - Amendment No. 4.doc
14
Exhibit "F"
Revised Agency Revenues Promissory Note
P:\Agendas:\Agenda Attachments\Agrmts-Amend 2oo8\11-oJ-08 Waterman Holdings, LLC - Amendment No. 4.doc
15
REVISED AGENCY REVENUES PROMISSORY NOTE
Date: July _,200_
Los Angeles, California
The undersigned, the Redevelopment Agency of the City of San Bernardino, a public agency
(the "Agency"), promises to pay, and pledges to Waterman Holdings, LLC, a California limited
liability company (the "Buyer"), or the Buyer's assignee, 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 Revised
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 this 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 this
Note are payable by the Agency to the Buyer at 4221 Wilshire Boulevard, Suite 240, Los Angeles,
California 90010.
This Note shall be subject to the following terms, covenants and conditions:
I. 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 Aereement. The "Agreement" shall mean the Original Agreement (as defined
below), as amended by the First Amendment (as defined below), as further amended by the Second
Amendment (as defined below), as further amended by the Third Amendment (as defmed below)
and as further amended by the Fourth Amendment (as defined below), as executed by and between
the Agency and the Buyer, and all exhibits attached thereto.
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 Second Amendment) and at the Flood Control Channel Property.
1.3 City. The "City" shall mean the City of San Bernardino.
1.4 County. The "County" shall mean San Bernardino County.
10f7
P\Agenda:o\Agenda Attachments\E",hibiu\2008\11..Q3-08 Waterman Holdings, LLC - Revised Agency Promissory Note (Elthibit F) -.doc
1.5 First Amendment. The "First Amendment" shall mean that certain Amendment No.
I to the Original Agreement, dated June 20, 2005, as executed by and between the Agency and the
Buyer.
1.6 Fourth Amendment. The "Fourth Amendment" shall mean that certain Amendment
No.4 to the Original Agreement, dated November 3, 2008, as executed by and between the Agency
and the Buyer.
1.7 Fiscal Year. The "Fiscal Year" shall mean any given fiscal year for the County.
1.8 Initial Fiscal Year. The "Initial Fiscal Year" shall mean the first (I ") Fiscal Year
following the Fiscal Year in which the City issued the Certificate of Occupancy.
1.9 Interest Rate. The "Interest Rate" shall mean five percent (5%) per annum which
shall only apply to late payments remitted by the Agency to the Buyer and such Interest Rate shall
not be calculated upon the unpaid Principal balance of this Note, and shall accrue in the manner
provided for in Section 3(b) of this Note.
1.1 O. Late Chare:e. The "Late Charge" shall mean three percent (3%) on the payment due
and owing by the Agency to the Buyer under this Note (subject to any applicable cure period(s) in
this Note and/or the Agreement).
1.11 Maturity Date. The "Maturity Date" shall mean the first business day following the
expiration of the Term.
1.12 Orie:inal Ae: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.
1.13 Princinal. 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. As of the date of this Note,
there is no discernable method to calculate the total Principal amount that may be payable by the
Agency to the Buyer pursuant hereto.
1.14 Second 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.
1.15 Term. The "Term" shall mean the term of this Note commencing on the date of
execution of this Note and continuing thereafter until the end of the tenth (10th) Fiscal Year (with
the Initial Fiscal Year being the first Fiscal Year of this ten (I O)-year Fiscal Year period). This Note
has been duly executed and delivered as of July I the next succeeding Fiscal Year of the Agency
20f7
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during which the Buyer has obtained a Certificate of Occupancy from the City of San Bernardino for
the project described in the Original Agreement, as amended.
1.16 Third Amendment. The "Third Amendment" shall mean that certain Amendment
No.3 to the Original Agreement, dated as of July 21, 2008, by and between the Agency and the
Buyer.
2. Interest. Interest shall not be paid on the Principal balance of this Note but shall be paid only
upon a default or other late payment by the Agency as provided in this Note. Subject to Section 3(b)
of this Note, 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 Princioal. Interest and Late Charee. (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") in an
amount 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 and/or the Buyer's successor-in-
interest to the ownership of the Agency Property and of the Flood Control Channel Property
attributable to the development to occur on the Agency Property and on the Flood Control Channel
Property pursuant to this Agreement (such 60% of the 1% of the real property taxes as actually paid
by the Buyer and/or Buyer's successor-in-interest to the ownership of the Agency Property and of
the Flood Control Channel Property 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 the Flood Control Channel 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 and of the Flood Control Channel 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 and on the Flood Control Channel Property as of each December 10 and/or April I 0 (or any
other delinquency date established by the County for the payment of supplemental property taxes)
have been duly paid. 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 the adequacy of the documentation as submitted by
the Buyer within the applicable 30-day period of time, shall constitute approval of same by the
Agency. The Agency shall be obligated to provide written notice to the Buyer within said 30-day
period of time, as to any inadequacy of any documentation provided by the Buyer to the Agency.
Failure of the Agency to remit the requested payment of the Agency Revenues within ten (10)
30f7
P:\Agenda:s\Agenda Anachments\El(hibitsUOOS\] 1-0)-0& w.terma.1\ Holdings, l.LC - Revise:! Agency Promissory Note (Exhibit Fl -doc
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) It shall be a condition precedent to each payment of the Agency Revenues
hereunder that as of each such Agency Revenues payment due date there has been no Transfer (as
defined in the Agreement), assignment, or sale or other conveyance of the Agency Property or of the
Flood Control Channel Property or any interest in the Agreement which is prohibited by the
Agreement.
(d) In the event that the Buyer should Transfer any interest in the Agreement, this
Note and/or the Agency Property and/or the Flood Control Channel Property in violation of the
Agreement or this Note, or sell the Agency Property and/or the Flood Control Channel Property in
violation of the Agreement or this Note, prior to the expiration of the applicable ten-year period for
the receipt of the Agency Revenues, the obligation of the Agency for any further remittances of the
Agency Revenues shall immediately cease and terminate as to that portion of the Agency Property
and/or of the Flood Control Channel Property to which such prohibited Transfer or other sale or
conveyance has occurred.
(e) Notwithstanding anything herein to the contrary, upon the issuance of a
Certificate of Occupancy by the City for the Agency Property and/or for the Flood Control Channel
Property, any of the following transactions shall not be deemed a "Transfer" prohibited by the
Agreement or this Note: (i) the transfer of fee title to the Agency Property and/or to the Flood
Control Channel Property to any entity in which an entity directly or indirectly, majority-owned and
controlled by Jian T orkan, is the general partner or managing member or partner, (ii) a transfer of fee
title to the Agency Property and/or to the Flood Control Channel Property in a transaction in which
the Buyer enters into a lease for the Agency Property and/or for the Flood Control Channel Property
pursw~nt to which it is obligated to pay all property taxes, or (iii) a transfer to any entity which is
directly or indirectly majority-owned and controlled by Jian Torkan. On and after the issuance of the
Certificate of Occupancy as specified above and for a period oftime equal to ten (10) years after the
date of the issuance of the Certificate of Occupancy, and in addition to the ability of the Buyer to
enter into a transaction that is deemed not to be a Transfer as defined above, the Buyer may sell,
transfer or assign the Agency Property and/or the Flood Control Channel Property, the Agreement
and this Note to any other person or entity subject to the following: (i) such subsequent owner of the
Agency Property and/or of the Flood Control Channel Property has assumed in writing all duties and
obligations of the Buyer as contained in the Agreement and this Note in form and substance as may
be reasonably required by the Agency General Counsel and (ii) the subsequent owner has assumed
all Agency Property and/or Flood Control Channel Property maintenance, covenants and obligations
set forth in the Agreement, or in any other document mutually executed by Buyer and the Agency.
Following the ten (l0) year period referred to above, there shall be no restriction or condition to any
sale of transfer by the Buyer of the Agency Property and/or of the Flood Control Channel Property
and/or the Buyer's interest in this Agreement. Following the expiration of the Term, the Agency
shall have no further duty or obligation to make any payment of the Agency Revenues, or any
portion thereof, to the Buyer or to any successor-in-interest in the ownership of the Agency Property
and/or of the Flood Control Channel Property (except for the Agency Revenues and/or any other
40f7
P:\Agendas\Agenda AnachmenlS\Exhibits\2008\II_OJ_08 Wa.terman Holdings, LLC _ Revised Agency Promissory Note (Elthibit F) -.doc
amounts due and owing by the Agency to the Buyer under this Agreement). Notwithstanding
anything herein to the contrary, any transfer of the Agency Property and/or of the Flood Control
Channel Property and/or the Buyer's interest in the Agreement and in this Note pursuant to a
foreclosure or deed-in-lieu thereof shall not constitute a prohibited Transfer.
(f) 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 this 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 the notice or
otherwise as set forth in this 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, but only if interest is payable due
to a prior payment default by the Agency, and any and all late charges or other amounts then owed
by the Agency hereunder.
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, if any, and then to Principal then due and payable under this Note.
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 this
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:
50f7
P\AgcndaslAgcnda Atuchmcnlli\EKhibils\2008\II-OJ_08 Wl!erman Holdings. LLC . Revised Agency Promissory Note (Exhibit F) _ doc
Address for the Agency:
Redevelopment Agency of the City of San Bernardino
201 North "E" Street, Suite 301
San Bernardino, CA 92401
Attention: Interim Executive Director
Address for the Buyer:
Waterman Holdings, LLC
4221 Wilshire Boulevard, Suite 240
Los Angeles, CA 90010
Attention: lian Torkan
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 the
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, the 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 this Note and/or the Agreement (collectively, the "Default Payment
Amount"), and the Agency shall immediately pay to the Buyer the Default Payment Amount.
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. Headinl!s. The headings of this Note are for purposes of reference only and shall not limit or
otherwise affect the meaning thereof.
13. Intemretation. 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. Governinl! Law. This Note shall be governed by and construed in accordance with the laws
of the State of California.
15. Judicial Proceedinl!s and Attornevs' Fees. If either party hereto files any action or brings
any action or proceeding against the other arising out of this Note, then as between the Buyer and the
Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as
damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a
separate action or proceeding brought to recover such attorneys' fees. The costs, salary and
expenses of the City Attorney for the City and members of his office in enforcing this Note shall be
considered as "attorneys' fees" for purposes ofthis Section. Any such action or proceeding must be
60f7
Pc\Agendas\Agendil AIlac.hmenr.s\Exhibiu\2008\1 1-03-08 Wllerman Holdings, LLC - Revised Agency Promissory Note (Exhibit F) -_doc
commenced in the Superior Court for the County of San Bernardino, San Bernardino District, State
of California.
16. Enforcement Costs. All reasonable out-of-pocket costs incurred by the Buyer in the
enforcement of this Note shall be added to the amounts due under this Note.
17. Assil!:nment. This Note may be assigned by the Buyer, subject to the restrictions and
limitations provided for in Section 3.08(c), 3.08(d) and 3.08(e) of this Note and by the Agency, but
no such assignment shall relieve the Agency from any of its obligations or liabilities hereunder. The
terms, covenants and conditions of this Note shall be binding upon, and inure to the benefit of, the
successors and assigns of the Buyer (subject to the restrictions and limitations provided for in
Section 3.08(c), 3.08(d), and 3.08(e)ofthis Note) and of the Agency.
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
a public agency
By:
Emil A. Marzullo, Interim Executive Director
70f7
PlAgendas\Agenda Attachment$\Exhibns\2008\11-03-08 WltenTll.n Holdings, LLC . Revised Aijency Promissory Note (EJlhibit F) -,doc
" .
R31. Continued,
(Mayor and Common Council)
A, Resolution of the Mayor and Common Council of the City of San
Bernardino consenting to the disposition of certain real property by the
Redevelopment Agency of the City of San Bernardino ("Agency") to
Waterman Holdings, LLC (4th and Waterman Avenue - APN: 0135-191-
17) (Central City East Redevelopment Project Area),
(Community Development Commission)
B, Resolution of the Community Development Commission of the City of
San Bernardino approving the sale of certain real property by the
Redevelopment Agency of the City of San Bernardino ("Agency") to
Waterman Holdings, LLC, and authorizing the Interim Executive
Director of the Agency to execute Amendment No, 4 to the 2004
Disposition and Development Agreement, as amended, between the
Agency and Waterman Holdings, LLC (4th Street and Waterman Avenue
- APN: 0135-191-17) (Central City East Redevelopment Project Area),
The hearing remains open. . .
Approved
MOTION: That the matter be continued to December 15, 2008,
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
TO BE HEARD AT 4:30 P.M.
Recommended for approval at the Redevelopment Committee Meetin~ on
November 6, 2008 - Committee Members Present: Estrada, Baxter,
Johnson
R32, Public Hearing - Consenting to the approval of the issuance of Health Care
Revenue Bonds for financing the Acquisition of licensed health care facilities by
Mountain Shadows Support Group, Inc, (See Attached) Wards 2,4, & 7
Resolution of the Mayor and Common Council of the City of San Bernardino
approving the issuance of health care revenue bonds for the purpose of fmancing
the acquisition of licensed health care facilities by Mountain Shadows Support
Group, Inc, (Resolution not available at time of printing)
Mayor to open hearing...
Approved
MOTION:
That the hearing be closed; and that said resolution be adopted,
Adopted 2008-435
() 1-~
14
11/17/2008
.r.
. .
.
CONTINUED ITEMS
CONTINUED FROM OCTOBER 20, 2008
City Clerk
29. Discussion and possible action concerning calling a special election to fill a
vacancy that will occur in the 4th Ward Council seat. (Backup material
distributed on October 20, 2008, Item No. 26) (Cost to the City - $39,000
from the General Fund) Ward 4
Approved
MOTION:
That the City Clerk and City Attorney's Office proceed with
preparing the required resolution(s) to call for a special election
to be held in the 4th Ward on Tuesday. March 17. 2009, and that
such election be conducted by all mail ballot; and that the
appropriate resolution(s) be placed on the December 1, 2008
agenda of the Mayor and Common Council.
CONTINUED FROM MAY 19, 2008
Development Services
30. Request for continuance for Tentative Tract No. 14112 - located northeasterly
of the intersection of Foothill Drive and Sterling Avenue. (Backup material
distributed on May 19, 2008; Item No. 34) (No cost to City.) Ward 4
Approved
MOTION:
That the matter be tabled due to the approval of the Final Map for
Tentative Tract No. 14112 at the October 20, 2008 meeting of the
Mayor and Common Council.
END OF CONTINUED ITEMS
COMMUNITY DEVELOPMENT COMMISSION
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
CONTINUED FROM NOVEMBER 3, 2008
TO BE HEARD AT 4:30 P.M.
Recommended for approval at the Redevelopment Committee Meetin~ on
October 9,2008 - Committee Members Present: Estrada, Baxter, Johnson
R31. Joint Public Hearing - Waterman Holdings, LLC- Amendment No.4 to the
2004 Disposition and Development Agreement (Central City East
Redevelopment Project Area). (Backup material distributed on November 3,
2008, Item No. R31) Ward 1
(Item Continued on Next Page)
13
11/17/2008
'\
R31. Continued.
(Community Development Commission)
B. Resolution of the Community Development Commission of the City of
San Bernardino approving the sale of certain real property by the
Redevelopment Agency of the City of San Bernardino ("Agency") to
Waterman Holdings, LLC, and authorizing the Interim Executive
Director of the Agency to execute Amendment No. 4 to the 2004
Disposition and Development Agreement, as amended, between the
Agency and Waterman Holdings, LLC (4th Street and Waterman Avenue
- APN: 0135-191-17) (Central City East Redevelopment Project Area).
Mayor to open hearing. . .
No Action Taken
MOTION: That the hearing be closed; and that said Resolutions A and B be
adopted.
Approved
MOTION: That the matter be continued to November 17, 2008.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
Recommended for approval at the Redevelopment Committee Meetin2 on
September IS, 200S - Committee Members Present: Estrada, Baxter,
Johnson
R32. California Housing Foundation, Inc., a non-profit 501(c)(3) organization - 2008
Low and Moderate Income Housing Funds Loan and Grant Property Acquisition
Agreement for the benefit of the developmentally disabled adults. Ward 5
Resolution of the Community Development Commission of the City of San
Bernardino approving and authorizing the Interim Executive Director of the
Redevelopment Agency of the City of San Bernardino ("Agency") to execnte
the 2008 Low and Moderate Income Housing Funds Loan and Grant Property
Acquisition Agreement by and between the Agency and California Housing
Foundation, Inc., for the benefit of the developmentally disabled adults.
Approved
MOTION:
That said resolution be adopted.
Adopted CDC/200S-42
END OF COMMUNITY DEVELOPMENT COMMISSION
*rL~1
ll-'"1-o~
13
11/03/2008
.
LAID OVER FROM OCTOBER 20, 2008
Council Office
29. An Ordinance of the City of San Bernardino amending Title 2, Administration
and Personnel, of the San Bernardino Municipal Code by amending Section
2.01.010, Mayor Pro-Tempore, by repealing Section 2.76.040, Senior Council
Member, and by amending Section 2.76.050, Assignment of Committee
Members and Designation of Committee Chairpersons. FINAL READING
(Backup material distributed October 6, 2008, Item No. 41; New Ordinance
distributed October 20, 2008, Item No. 25)
Approved
MOTION:
That said ordinance be adopted.
Adopted MC-1289
END OF CONTINUED ITEMS
COMMUNITY DEVELOPMENT COMMISSION
R30. Agency Staff Presentation - Presentation on the update of the San Bernardino
Downtown Core Vision!Action Plan (See Attached) Ward 1
Presentation Only - No Action Taken
MOTION: That the Community Development Commission of the City of
San Bernardino receive and file the PowerPoint Presentation!
Report.
XXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXXX
TO BE HEARD AT 4:30 P.M.
Recommended for approval at the Redevelopment Committee Meetinl: on
October 9,2008 - Committee Members Present: Estrada, Baxter, Johnson
R31. Joint Public Hearing - Amendment No.4 to the Waterman Holdings, LLC,
2004 Disposition and Development Agreement (Central City East
Redevelopment Project Area). (See Attached) Ward 1
(Mayor and Common Council)
A. Resolution of the Mayor and Common Council of the City of San
Bernardino consenting to the disposition of certain real property by the
Redevelopment Agency of the City of San Bernardino ("Agency") to
Waterman Holdings, LLC (4th and Waterman Avenue - APN: 0135-191-
17) (Central City East Redevelopment Project Area).
(Item Continued on Next Page)
12
11/03/2008
ECONOMIC DEVELOPMENT AGENCY
OF THE CITY OF SAN BERNARDINO
ORIGINAL
FROM: Emil A. Marzullo
lnterim Executive Director
SUBJECT: Joint Public Hearing - \Viilerman Holdings, LLC " .
Amendment No. 4 to the 2004 Disposition and
Development Agreement (Central City East
Redevelopment Project Area)
DATE: October 21, 2008
Svnoesis of Previous Commission/Council/Committee Action(s):
On November 2, 2004, Redevelopment Committee Members Estrada and Longville unanimously voted to recommend that the
Community Development Commission of the City of San Bernardino (the "Commission") consider a disposition and development
agreement with Waterman Holdings, LLC, for approval.
On December 6, 2004, the Commission adopted Resolution No. CDC/2004-49 approving the sale of certain real property by the
Agency to Waterman Holdings, LLC, and authorized the Executive Director to execute the Disposition and Development
Agreement between the Agency and Waterman Holdings, LLC, and the Mayor and Common Council simultaneously adopted
Resolution No. 2004-386 approving the sale of certain real property (4'" and Waterman Avenue - APN: 0135-191-11) within the
Central City East Redevelopment Project Area ("Project Area").
SvnoDsis Continued to Next Paee....
-------------------------------------------------------------------------------------------------------_.---------------------------------------------------------------------------------_.-----------------------------
Recommended Motion(s):
Open/Close Joint Public Hearing
Mavor and Common Council
Resolution of the Mayor and Common Council of the City of San Bernardino consenting to the disposition of Certain Real
Property by the Redevelopment Agency of the City of San Bernardino ("Agency") to Waterman Holdings, LLC (4'" and
Waterman Avenue - APN: 0135-191-17) (Central City East Redevelopment Project Area)
(Communitv Develooment Commission)
Resolution of the Community Development Commission of the City of San Bernardino approving the sale of Certain Real
Property by the Redevelopment Agency of the City of San Bernardino ("Agency") to Waterman Holdings, LLC, and
authorizing the Interim Executive Director of the Agency to execute Amendment No. 4 to the 2004 Disposition and
Development Agreement, as amended, between the Agency and Waterman Holdings, LLC (4'" Street and Waterman Avenue
- APN: 0135-191-17) (Central City East Redevelopment Project Area)
Project Area(s)
Mike Trout
Central City East Redevelopment Project
Area
Phone:
(909) 663-1044
Contact Person(s):
Ward(s):
Supporting Data Attached:
o Staff Report 0 Resolution(s) 0 Amendment(s)/Agreement(s) 0 Map(s) D Letters
FUNDING REQUIREMENTS Amount: $
N/A
Source:
N/A
SIGNA TURE:
Emil A. Marz
Budget Authority:
N/A
Fiscal Review:
'J / / I ~I/
.....{ -l. (.:- (J.. ' {~. '" "-/' ' '1 t:'/ -::'(. f...-J
Barbara Lindseth, Administrative Services Director
Commission/Council Notes:
PIAgendas\Comm Dev Commission\CDC 2008\1\-03-08 Waterman Holdings, LLC. Amendment No.4 SR doc
COMMISSION MEETING AGENDA
Meeting Date: 11/0312008
Agenda Item Number: Jl a I
II" 3.. OtJ
Economic Development Agency Staff Report
Waterman Holdings, LLC - Amendment No.4
October 21, 2008
SvnoDsis of Previous Commission/Council/Committee Action{s):
On June 7, 2005, Redevelopment Committee Members Estrada and McGinnis unanimously voted to recommend that the
Commission consider the action of June 20, 2005.
On June 20, 2005, the Commission adopted Resolution No. CDC/200S-19 approving Amendment No. I to the 2004
Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Executive
Director to execute Amendment No. I.
On June 19, 2006, the Commission adopted Resolution No. CDC/2006-20 approving Amendment No. 2 to the 2004
Disposition and Development Agreement between the Agency and Waterman Holdings, LLC, and authorized the Executive
Director to execute Amendment No.2.
On November 8, 2007, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously voted to recommend
that the Commission consider the action of Amendment No.3.
On July 21, 2008, the Commission adopted Resolution No. CDC/2008-26 approving Amendment No. 3 to the 2004
Disposition and Development Agreement between the Agency and Waterman Holdings, LLC and authorized the Interim
Executive Director to execute Amendment No.3.
On October 9, 2008, Redevelopment Committee Members Estrada, Baxter and Johnson unanimously voted to recommend the
Mayor and Common Council and Commission consider the action of Amendment No.4.
P:\Agendas\Comm Dev Commission\CDC 2008\11-03-08 Waterman Holdings, LtC - Amendment No.4 SR,doc
COMMISSION MEETING AGENDA
Meeting Date: 11103/2008
Agenda Item Number:
~1'
11.2.111}
ECONOMIC DEVELOPMENT AGENCY
STAFF REPORT
JOINT PUBLIC HEARING - WATERMAN HOLDINGS, LLC-
AMENDMENT NO.4 TO THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
BACKGROUND:
On December 6, 2004, the Mayor and Common Council of the City of San Bernardino (the "Council")
and Community Development Commission of the City of San Bernardino (the "Commission") approved
the sale of approximately 3.9 acres owned by the Redevelopment Agency of the City of San Bernardino
(the "Agency") located at the southwest comer of 4th Street and Waterman Avenue (APN: 0135-191-11)
(the "Property") pursuant to a 2004 Disposition and Development Agreement (the "DDA") between the
Agency and Waterman Holdings, LLC (the "Buyer/Developer").
The DDA, as approved, required for the Buyer/Developer 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/Developer would have the option to purchase the
Phase II Property at a later date. The Agency pledged 60% of the tax increment that the completed
Project would generate over a period of ten years to offset the below market rental rate that the County
required of the Buyer/Developer.
On May 17, 2005, the San Bernardino County Board of Supervisors approved a ten-year lease with the
Buyer/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 were redefined. 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 items arose that would necessitate a change to the original DDA; first, it was
determined that the pledge of tax increment to the Buyer/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 Buyer/Developer would now require both the Phase I and
Phase II sites (APN: 0135-191-11) (the "Agency Property") be combined as a single site.
The Buyer/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 Buyer/Developer has deposited the sum of $20,000 into
escrow and the balance of $492,424 will be paid upon the closing of the escrow. Per Amendment No.2,
the Agency will pledge to the Buyer/Developer from general Agency revenues under a Promissory Note
PlAgendaslComm Dev Commission\CDC 2008\ 1 ] -OJ-08 Waterman Holdings, LLC - Amendment No 4 SR,doc
COMMISSION MEETING AGENDA
Meeting Date: tl/03/2008
Agenda Item Number: JZ.~'
,,-,_,,A
and not as a pledge of tax increment revenues, an amount equal to 60% of the I % tax revenues generated
by the proposed Project (estimated development cost is $6 million) for a period of ten years. As per the
original DDA, the 60% pledge was authorized by the Commission in an effort to offset or compensate the
Buyer/Developer for the below market rate ten-year lease with the County. The Agency payment
obligation will commence upon presentation of a cancelled check by the Buyer/Developer and as of the
fiscal year following completion of the Project by the Buyer/Developer and said payment will be paid
after each December lOth and April loth tax payment.
On June 19, 2006, the Commission approved Amendment No. 2 to the DDA, whereby the
Buyer/Developer will develop on the Agency Property, a 2-story building containing a minimum of
45,000 square feet of office space, to include parking and landscaping, and to lease to TAD (the
"Project"). TAD provides jobs and employment services to residents and job training programs.
Additionally, in Amendment No.2, the Agency pledged to reimburse, to the Buyer/Developer, an amount
equal to 60% of the I % of new property taxes generated by the Project for a period of ten years from the
general revenues of the Agency.
On July 21, 2008, the Commission approved Amendment No.3 to the DDA, wherein the Agency would
reimburse the Buyer/Developer an amount not to exceed $399,500 for the actual costs for the required
Off-Site Improvements. This reimbursement would be paid from the sale proceeds of the Agency
Property 30 days following the completion of the Project as evidenced by a Certificate of Occupancy
issued by the City of San Bernardino ("City") and verification that the Off-Site Improvements have been
constructed by the Buyer/Developer and accepted by the City. The cost reimbursements to the
Buyer/Developer would not exceed the lesser of the actual cost paid for the Off-Site Improvements or
$399,500 utilizing prevailing wage rates. All other terms and conditions of the DDA, as amended by
Amendments No. 1 and No.2, would remain unchanged.
CURRENT ISSUE:
The Buyer/Developer has informed the Agency that they need additional land for additional parking for
the Project. The Buyer/Developer approached the Agency about acquiring the Flood Control Channel
Property (the "Flood Control Property," APN: 0135-191-17 formerly APN: 0135-191-15). The Flood
Control Channel runs along the southern boundary of the Agency Property. The Buyer/Developer has
estimated that it will cost $1.1 million to improve the Flood Control Property for use as parking.
The Buyer/Developer has already had preliminary conversations with the Western Regional Water
District and has formulated a plan which the Western Regional Water District has indicated will be a very
good solution to the current open Flood Control Property. Additionally, the Buyer/Developer has stated
that they will be paying for the entire cost of improving the Flood Control Property for use as parking.
The Agency has obtained a current appraisal for the Flood Control Property. The Agency appraiser has
determined that the fair market value of the property is $36,000.
Approval of Amendment No.4 to the DDA allows the Agency to sell the Flood Control Channel to the
Buyer/Developer for $36,000, this dollar amount and the value of the improvements to this property will
generate additional property tax for the calculation of the annual payment to the Buyer/Developer per the
DDA, as amended. All other terms and conditions of the DDA, as amended by Amendments No. I, No.2
and No.3, would remain unchanged.
P\Agendas\Comm Dev CommissionlCDC 2008\11-03-08 Watennan Holdings, LLC _ Amendment No.4 SR.doc
COMMISSION MEETING AGENDA
Meeting Date: 11/03/2008
Agenda Item Number: R.~'
~
ENVIRONMENT AL 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 $36,000 from the BuyerlDeveloper for sale of the Flood Control Property. The
Agency estimates that it will take 30 days to close from the opening of escrow.
Additionally, any new property taxes generated as a result of the improvements to the Flood Control
Property will be included in the calculation of the Agency in determining the annual payment to the
BuyerlDeveloper per the terms and conditions of the DDA, as amended. The annual payment to the
Buyer/Developer will be an amount equal to 60% of the 1 % of the new property taxes generated from the
development of the Flood Control Property as well as the Agency Property. The total payment to the
BuyerlDeveloper is estimated to be $420,000 over a ten-year period.
RECOMMENDATION:
That the Mayor and Common Council and Community Development Commission adopt the attached
Resolutions.
Em;~m E,=Ov. Di<<do'
P\Agendas\Comm Dev Commission\CDC 2008\11-03-08 Watennan Holdings, LLC - Amendment No.4 SR. doc
COMMISSION MEETING AGENDA
Meeting Date: 11/03/2008
Agenda Item Nnmber: 12.~'
~
SUMMARY REPORT PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 OF
THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW REGARDING THE
DISPOSITION AND DEVELOPMENT OF CERTAIN AGENCY PROPERTY LOCATED
SOUTH OF THE SOUTHWEST CORNER OF 4TH STREET AND WATERMAN AVENUE
(APN: 0135-191-17) SAN BERNARDINO, CALIFORNIA PURSUANT TO THE TERMS OF
AMENDMENT NO.4 TO THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND WATERMAN HOLDINGS, LLC - CENTRAL CITY EAST
REDEVELOPMENT PROJECT AREA
INTRODUCTION
This Summary Report (the "Report") has been prepared by the Redevelopment Agency of the City of
San Bernardino (the "Agency") pursuant to Section 33433 of the California Health and Safety Code.
This Report sets forth certain details of the proposed sale by the Agency of real property totaling
approximately .84 +/- acres of vacant land, described as Assessor Parcel Number 0135-191-17 located
south of the southwest corner of 4th Street and Waterman Avenue, San Bernardino, California (the
"Site"), to Waterman Holdings, LLC (the "Developer"). An appraisal was performed on the Site by
James Smothers, MAl (the "Appraiser") in August 2008 and reported the basic value of $9.85/square
foot and the appraised value to be $.97/square foot.
To arrive at the appraised value of $.97/square foot, the Appraiser reviewed sales of properties with
low development potential due to their topography and/or accessibility. The sales were then time
adjusted for market conditions, up to the date of value and divided by the basic value of land,
$9.85/square foot. The range of percentage of the base value went from 2.0% to 25.9%. The average
percentage of the base value was 9.75% and the median was 10.05%. The Appraiser determined that
the fair market value of the Site is 10% of the base value.
APN: 0135-191-17
Site Base Value = ($9.85/square foot x 36,489 square feet)
Less % discount for lack of development potential
Less $ discount for lack of development potential
Fair Market Value ($35,900)
$359,000
90%
($323,000)
$36,000 (rounded)
The Agency acquired title to the Site in 1983 from the City of San Bernardino (the City"). The
Site was part of the historic Warm Creek flood control system until a permanent concrete channel was
built to the east of Waterman Avenue. No capital improvements have been performed on the Site since
the Agency acquired title. The Site is currently vacant land. Pursuant to the proposed Amendment No.
4 (the "Amendment") to the 2004 Disposition and Development Agreement (the "DDA") the
Developer will acquire the Site from the Agency and develop the Site so that it may be used for
parking.
This Report is organized into the following 6 sections:
I. Salient Points ofthe proposed Amendment No.4: This section includes a description of the
major responsibilities to be assumed by the Agency and the Developer.
I
P \AgendaslAgcnda Anaclunenl>\Summary Reporls\2008111-0J-08 Waterman Holdings, LLC - Amendment 1'<04 Summary 33433 Report doc
II. Cost of the Amendment No.4 to the Al!:encv: This section outlines the proposed costs of
Amendment NO.4 to the Agency.
III. Estimated Value of the Interests to be Conveyed Determined at the Hil!:hest and Best Use
Permitted Under the Redevelopment Plan: This section summarizes the value of the Flood
Control Channel Property to be conveyed to the Developer at the highest use permitted
pursuant to the terms of Amendment No.4.
IV. Estimated Reuse Value of the Interests Determined at the Required Use and with the
Conditions, Covenants and Restrictions Required bv the Proposed Amendment No.4:
This section summarizes the sales price to be paid to the Agency by the Developer.
V. B1il!:ht Alleviation: This section describes the existing blighting conditions in and around the
Project Area, and an explanation of how the proposed sale and development of the Agency Lots
will assist in alleviating the blighting conditions.
VI. Conformance with the AB 1290 Implementation Plan: This section identifies how the
proposed Amendment No. 4 will result in a development activity that fulfills goals and
objectives established in the Agency's AB 1290 Five-Year Implementation Plan.
I. SALIENT POINTS OF THE PROPOSED DDA
A. Description of the proposed Proiect
. The purpose of Amendment No.4 is to transfer the Flood Control Channel Property
to the Developer to facilitate the development of a single floor parking structure in
support of a 2-story 45,000 square foot office building structure that the Developer
is constructing for the County of San Bernardino. The Developer will provide all
necessary improvements required in connection with the construction of the single
floor parking structure.
B. Agency Responsibilities
· Transfer the Flood Control Channel Property to the Developer pursuant to the terms
of Amendment No.4.
C. Developer Responsibilities
· Execute and implement Amendment No.4 with the Agency and agree to accept the
Flood Control Channel Property per the terms of Amendment No.4 and develop a
parking structure.
· Complete the construction of the parking structure without any further Agency
assistance per the terms of Amendment NO.4.
II. COST OF THE PROPOSED AMENDMENT NO.4 TO THE AGENCY
The costs of the proposed Amendment No.4 would be the usual and normal costs associated
with the sale of property which is estimated to be $2,000.
2
P\Agcndas\Agcnda Allachmenls\Summary Reports\2008\11-03-0& Waterman Holdings, LLC _ Amendment No.4 Summary 3.l4JJ RCPOT1doc
III. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT
THE HIGHEST AND BEST USE PERMITTED UNDER THE REDEVELOPMENT
PLAN
The estimated value of the interest to be conveyed ($36,000) is based upon the low
development potential of the property. Construction of a single floor parking structure is
considered the highest and best use permitted under the Project Area Plan.
IV. ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
DETERMINED AT THE REOUIRED USE AND WITH THE CONDITIONS,
COVENANTS AND RESTRICTIONS REQUIRED BY THE PROPOSED
AMENDMENT NO.4
The estimated fair market value of the interest to be conveyed to the Developer is $36,000
based upon the terms and conditions pursuant to Amendment NO.4.
V. BLIGHT ALLEVIATION
The development of the Flood Control Channel Property will eliminate existing blight, foster
the reuse of underutilized property into a single floor parking structure and return the Flood
Control Channel Property to the property tax rolls.
VI. CONFORMANCE WITH THE AB 1290 IMPLEMENTATION PLAN
The Five-Year Implementation Plan ("Plan") adopted by the Agency contains several broad
operational goals and objectives for the Project Area. Among these are the following:
. Eliminate blighting influences, including deteriorating buildings, uneconomic
land uses, obsolete structures, and other environmental, economic and social
deficiencies.
. To re-plan, redesign and redevelop underdeveloped areas that are stagnant or
improperly utilized.
Amendment No.4 will assist the Agency in meeting the objectives and goals of its Plan for the Project
Area in the following way:
The execution of Amendment No.4 with the Developer will continue redevelopment activities of the
Agency by developing underutilized Flood Control Channel Property and increasing property taxes.
Based upon the preceding factors, Amendment No.4 is consistent with the Plan. The interest in the
Flood Control Channel Property to be conveyed to the Developer will be developed in conformance
with the City's General Plan and the Municipal Development Code.
3
PIAgendaslAgenda AttachmentslSummary Repol1s\2008\II_tJ3_08 Waterman Holdings, LLC - Amendment Nu. 4 Summary 33433 Repondoc
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RESOLUTION NO.
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO CONSENTING TO THE DISPOSITION OF
CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO WATERMAN
HOLDINGS, LLC (4TH AND WATERMAN AVENUE - APN: 0135-191-17)
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
WHEREAS, the City of San Bernardino (the "City") is a municipal corporation and charter
city, duly organized and existing pursuant to the provisions of the constitution of the State of
California; and
WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency") is a
11 public body, corporate and politic existing under the laws of the State of California, Health and
12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and
13 underutilized land; and
14
WHEREAS, the Agency desires to dispose of certain real property (the "Flood Control
15
Channel Property," APN: 0135-191-17) owned by the Agency, as set forth in that certain
16
17
18
19
Amendment No.4 (the "Amendment") to the 2004 Disposition and Development Agreement (the
"DDA") by and between the Agency and Waterman Holdings, LLC (the "Buyer/Developer"); and
WHEREAS, the Agency Property is located south of the southwest comer of 4th Street and
20 Waterman Avenue within the Central City East Redevelopment Project Area and is presently an
21 unimproved vacant lot; and
22
WHEREAS, an appraisal of the Flood Control Channel Property was performed in August
23 2008 by Smothers Appraisal (the "Appraiser"); and
24
25
WHEREAS, according to the appraisal report dated September 4, 2008 (the "Agency
Appraisal Report"), prepared by the Appraiser, the fair market value of the Flood Control Channel
26
27 Property is $36,000 for the approximately .84 acres of land; and
28
I
F:\WILSON\Resolutions\EDAIII-03-08 Walennan Holdings LLC - Amendment No 4 MeC Reso.doc
1 WHEREAS, the Agency intends to enter into the Amendment pursuant to which the Agency
2 proposes to sell the Flood Control Channel Property to the Buyer for the fair market value of
3 $36,000; and
4
WHEREAS, the Amendment provides for the development of the Flood Control Channel
5
6
7
Property so that it may be used as a parking lot; and
WHEREAS, the Developer has estimated that it will cost $1,100,000 for the construction of
8 the improvements to the Flood Control Channel Property; and
9
WHEREAS, the Agency has prepared and published a notice of joint public hearing in the
10 San Bernardino County SUN newspaper on October 20,2008 and October 27, 2008, regarding the
11
consideration and approval of the Amendment; and
12
13
WHEREAS, pursuant to Health and Safety Code Section 33433(b), the Agency may transfer
the Flood Control Channel Property to the Buyer subject to the Mayor and Common Council of the
14
15 City of San Bernardino (the "Council") and the Community Development Commission of the City
16 of San Bernardino (the "Commission") adopting separate Resolutions authorizing the Agency to
17 transfer the Flood Control Channel Property in light of the findings set forth herein, pursuant to
18 Health and Safety Code Section 33433; and
19
WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety
20 Code Section 33433 (the "Report") that describes the salient point of the Amendment and identifies
21
the cost of the Amendment to the Agency; and
22
23
WHEREAS, pursuant to Section 15332 of the California Environmental Quality Act (the
24 "Act") Guidelines the Agency has reviewed the proposed sale and use of the Flood Control Channel
25 Property and has determined that the project, as identified in the Amendment, is exempt from the
26 Act and qualifies for a Categorical Exemption, Class 32 (Guidelines Section 15332) as the project
27 meets all four requirements for an Infill Project; and
28
2
F\WILSON\Resolutions\EDA\11-03-08 WateJ1Tlan Holdings LLC - Amendment No. 4MCC Resodoc
1 WHEREAS, the acquisition of the Flood Control Channel Property by the Buyer is
2 consistent with the Central City East Redevelopment Plan.
3
4
5
6
7
NOW, THEREFORE, IT IS HEREBY RESOLVED, DETERMINED AND ORDERED BY
THE MAYOR AND COMMON COUNCIL OF THE CITY OF SAN BERNARDINO, AS
FOLLOWS:
Section 1.
On November 3, 2008, the Council conducted a full and fair joint public
8 hearing with the Commission, as the governing board of the Agency, relating to the disposition of the
9 Flood Control Channel Property from the Agency to the Buyer and the development thereof pursuant
10 to the Amendment. The minutes of the City Clerk for the November 3, 2008 meeting of the Council
11 shall include a record of all communication and testimony submitted to the Council by interested
12 persons relating to the public hearing and the approval of the Amendment.
13
Section 2.
The Council hereby receives and approves the Report and the other written
14 materials submitted to the Council at the meeting at which this Resolution is adopted. The Report
15 contains information required under Health and Safety Code Section 33433.
16
Section 3.
This Resolution is adopted in order to satisfy the provisions of Health and
17 Safety Code Section 33433(a)(1) and (b)(2) related to the disposition of the Flood Control Channel
18 Property to the Buyer in accordance with the Amendment and the Council hereby approves the
19 transfer of the Flood Control Channel Property to the Buyer pursuant to the Amendment for the
20 consideration as provided therein. The Council hereby finds and determines as follows:
21 I. That the Report a copy of which is attached hereto as Attachment I and by this reference
22 made a part hereof, contains the findings described in Health and Safety Code Section 33433(b)(2)
23 and said findings are hereby adopted.
24 2. The Flood Control Channel Property is being sold to the Buyer at the purchase price of
25 $36,000 for the development of a parking lot which consideration is the fair market value
26 determined at its highest and best use.
27 3. This action is consistent with the implementation plan adopted pursuant to Health and
28 Safety Code Section 33490, the Central City East Redevelopment Plan.
3
F:\WILSON\ResolutiOl1S\EDA\II-OJ-08 Watennan Holdings LLC.. Amendment No_ 4 MeC Resodoc
19
20
21
The foregoing Resolution is hereby approved this
1
2
3
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8
RESOLUTION OF THE MAYOR AND COMMON COUNCIL OF THE CITY
OF SAN BERNARDINO CONSENTING TO THE DISPOSITION OF
CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO WATERMAN
HOLDINGS, LLC (4TH AND WATERMAN AVENUE - APN: 0135-191-17)
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
Section 4.
This Resolution shall take effect upon its adoption and execution in the
manner as required by the City Charter.
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and
Common Council of the City of San Bernardino at a
meeting thereof,
, 2008, by the following vote to wit:
Navs
Abstain
Absent
Rachel G. Clark, City Clerk
day of
,2008.
22
23
24
25
Approved as to Form:
26
27
28
Patrick J. Morris, Mayor
City of San Bernardino
4
F:\WILSON\Resolutioos\EDAII 1-03-08 Waterman Holdings LLC - Amendment No.4 MCC Resodoc
SUMMARY REPORT PURSUANT TO HEALTH AND SAFETY CODE SECTION 33433 OF
THE CALIFORNIA COMMUNITY REDEVELOPMENT LAW REGARDING THE
DISPOSITION AND DEVELOPMENT OF CERTAIN AGENCY PROPERTY LOCATED
SOUTH OF THE SOUTHWEST CORNER OF 4TH STREET AND WATERMAN AVENUE
(APN: 0135-191-17) SAN BERNARDINO, CALIFORNIA PURSUANT TO THE TERMS OF
AMENDMENT NO.4 TO THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN THE REDEVELOPMENT AGENCY OF THE CITY OF SAN
BERNARDINO AND WATERMAN HOLDINGS, LLC - CENTRAL CITY EAST
REDEVELOPMENT PROJECT AREA
INTRODUCTION
This Summary Report (the "Report") has been prepared by the Redevelopment Agency of the City of
San Bernardino (the "Agency") pursuant to Section 33433 of the California Health and Safety Code.
This Report sets forth certain details of the proposed sale by the Agency of real property totaling
approximately .84 +/- acres of vacant land, described as Assessor Parcel Number 0135-191-17 located
south of the southwest corner of 4th Street and Waterman Avenue, San Bernardino, California (the
"Site"), to Waterman Holdings, LLC (the "Developer"). An appraisal was performed on the Site by
James Smothers, MAl (the "Appraiser") in August 2008 and reported the basic value of $9.85/square
foot and the appraised value to be $.97/square foot.
To arrive at the appraised value of $.97/square foot, the Appraiser reviewed sales of properties with
low development potential due to their topography and/or accessibility. The sales were then time
adjusted for market conditions, up to the date of value and divided by the basic value of land,
$9.85/square foot. The range of percentage of the base value went from 2.0% to 25.9%. The average
percentage of the base value was 9.75% and the median was 10.05%. The Appraiser determined that
the fair market value of the Site is 10% of the base value.
APN: 0135-191-17
Site Base Value = ($9.85/square foot x 36,489 square feet)
Less % discount for lack of development potential
Less $ discount for lack of development potential
Fair Market Value ($35,900)
$359,000
90%
($323,000)
$36,000 (rounded)
The Agency acquired title to the Site in 1983 from the City of San Bernardino (the City"). The
Site was part of the historic Warm Creek flood control system until a permanent concrete channel was
built to the east of Waterman Avenue. No capital improvements have been performed on the Site since
the Agency acquired title. The Site is currently vacant land. Pursuant to the proposed Amendment No.
4 (the "Amendment") to the 2004 Disposition and Development Agreement (the "DDN') the
Developer will acquire the Site from the Agency and develop the Site so that it may be used for
parking.
This Report is organized into the following 6 sections:
I. Salient Points of the proposed Amendment No.4: This section includes a description of the
major responsibilities to be assumed by the Agency and the Developer.
ATTACHMENT "1"
I
P.\Agendas\Agenda Attachments\Summary Reports\2008\1 !-O3-08 Waterman Holdings, LLC - Amendment NO.4 Summary 33433 Report doc
II. Cost of the Amendment No.4 to the Al?:encv: This section outlines the proposed costs of
Amendment No.4 to the Agency.
III. Estimated Value of the Interests to be Conveved Determined at the Hil?:hest and Best Use
Permitted Under the Redevelopment Plan: This section summarizes the value of the Flood
Control Channel Property to be conveyed to the Developer at the highest use permitted
pursuant to the terms of Amendment No.4.
IV. Estimated Reuse Value of the Interests Determined at the Required Use and with the
Conditions. Covenants and Restrictions Required bv the Proposed Amendment No.4:
This section summarizes the sales price to be paid to the Agency by the Developer.
V. Blil?:ht Alleviation: This section describes the existing blighting conditions in and around the
Project Area, and an explanation of how the proposed sale and development of the Agency Lots
will assist in alleviating the blighting conditions.
VI. Conformance with the AB 1290 Implementation Plan: This section identifies how the
proposed Amendment No. 4 will result in a development activity that fulfills goals and
objectives established in the Agency's AB 1290 Five-Year Implementation Plan.
I. SALIENT POINTS OF THE PROPOSED DDA
A. Description of the proposed Proiect
. The purpose of Amendment NO.4 is to transfer the Flood Control Channel Property
to the Developer to facilitate the development of a single floor parking structure in
support of a 2-story 45,000 square foot office building structure that the Developer
is constructing for the County of San Bernardino. The Developer will provide all
necessary improvements required in connection with the construction of the single
floor parking structure.
B. Agency Responsibilities
. Transfer the Flood Control Channel Property to the Developer pursuant to the terms
of Amendment No.4.
C. Developer Responsibilities
. Execute and implement Amendment No.4 with the Agency and agree to accept the
Flood Control Channel Property per the terms of Amendment NO.4 and develop a
parking structure.
· Complete the construction of the parking structure without any further Agency
assistance per the terms of Amendment No.4.
II. COST OF THE PROPOSED AMENDMENT NO.4 TO THE AGENCY
The costs of the proposed Amendment No.4 would be the usual and normal costs associated
with the sale of property which is estimated to be $2,000.
2
P:\Agendas\AgerKIa Attachments\Summary Reports\2008\II-OJ-08 Waterman Holdings, LLC _ Amendment No.4 Summary 334J3 Report_doc
III. ESTIMATED VALUE OF THE INTERESTS TO BE CONVEYED DETERMINED AT
THE HIGHEST AND BEST USE PERMITTED UNDER THE REDEVELOPMENT
PLAN
The estimated value of the interest to be conveyed ($36,000) is based upon the low
development potential of the property. Construction of a single floor parking structure is
considered the highest and best use permitted under the Project Area Plan.
IV. ESTIMATED REUSE VALUE OF THE INTERESTS TO BE CONVEYED
DETERMINED AT THE REOUlRED USE AND WITH THE CONDITIONS,
COVENANTS AND RESTRICTIONS REQUIRED BY THE PROPOSED
AMENDMENT NO.4
The estimated fair market value of the interest to be conveyed to the Developer is $36,000
based upon the terms and conditions pursuant to Amendment NO.4.
V. BLIGHT ALLEVIATION
The development of the Flood Control Channel Property will eliminate existing blight, foster
the reuse of underutilized property into a single floor parking structure and return the Flood
Control Channel Property to the property tax rolls.
VI. CONFORMANCE WITH THE AB 1290 IMPLEMENTATION PLAN
The Five-Year Implementation Plan ("Plan") adopted by the Agency contains several broad
operational goals and objectives for the Project Area. Among these are the following:
. Eliminate blighting influences, including deteriorating buildings, uneconomic
land uses, obsolete structures, and other environmental, economic and social
deficiencies.
. To re-plan, redesign and redevelop underdeveloped areas that are stagnant or
improperly utilized.
Amendment No.4 will assist the Agency in meeting the objectives and goals of its Plan for the Project
Area in the following way:
The execution of Amendment No.4 with the Developer will continue redevelopment activities of the
Agency by developing underutilized Flood Control Channel Property and increasing property taxes.
Based upon the preceding factors, Amendment No.4 is consistent with the Plan. The interest in the
Flood Control Channel Property to be conveyed to the Developer will be developed in conformance
with the City's General Plan and the Municipal Development Code.
3
P\Agendas\Agenda Attachments\Summary Reports\2008\ll "03-08 Waterman Holdings, LLC - Amendment No.4 Summary J34JJ Report.doc
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RESOLUTION NO.
J2..~ ( (B)
\1'" ~..o<(
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION OF
THE CITY OF SAN BERNARDINO APPROVING THE SALE OF CERTAIN
REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF THE CITY
OF SAN BERNARDINO ("AGENCY") TO WATERMAN HOLDINGS, LLC,
AND AUTHORIZING THE INTERIM EXECUTIVE DIRECTOR OF THE
AGENCY TO EXECUTE AMENDMENT NO.4 TO THE 2004 DISPOSITION
AND DEVELOPMENT AGREEMENT, AS AMENDED, BETWEEN THE
AGENCY AND WATERMAN HOLDINGS, LLC (4TH STREET AND
WATERMAN AVENUE - APN: 0135-191-17) (CENTRAL CITY EAST
REDEVELOPMENT PROJECT AREA)
WHEREAS, the Redevelopment Agency of the City of San Bernardino (the "Agency"), is a
11 public body, corporate and politic existing under the laws of the State of California, Health and
12 Safety Code Section 33100, and is charged with the mission of redeveloping blighted and
13 underutilized land; and
14
WHEREAS, the Community Development Commission of the City of San Bernardino (the
15
"Commission") is the governing board of the Agency; and
16
17
WHEREAS, the City of San Bernardino, California (the "City") is a municipal corporation
18 and charter city, duly organized and existing pursuant to the provisions of the constitution of the
19 State of California; and
20 WHEREAS, on December 6, 2004, the Commission adopted Resolution No. CDC/2004-49
21 approving the sale of certain real property (APN: 0135-191-11) (the "Agency Property") by the
22 Agency to Waterman Holdings, LLC (the "Developer"), and authorizing the Agency Executive
23 Director to execute the 2004 Disposition and Development Agreement (the "DDA") between the
24
Agency and the Developer; and
25
26
WHEREAS, on June 20, 2005, the Commission adopted Resolution No. CDC/2005-19
27 approving and authorizing the Executive Director of the Agency to execute Amendment No. I to the
28 DDA between the Agency and the Developer; and
1
P:\Agendas\Resolutions\Resolutions\2008\l1-OJ-OS Waterman Holdings, LLC . Amendment No.4 CDC Reso.drn:
1 WHEREAS, Amendment No. 1 to the DDA caused Phase I and Phase II of the Project to
2 exchange locations for each such Phase; and
3
WHEREAS, on June 19, 2006, the Commission adopted Resolution No. CDC/2006-20
4
approving and authorizing the Executive Director of the Agency to execute Amendment No.2 to the
5
DDA between the Agency and the Developer; and
6
7
WHEREAS, Amendment No.2 to the DDA eliminated the previously proposed Phase I and
Phase II of the Project and was replaced with a single phase Project consisting of the construction of
8
an approximately 45,000 square foot, two-story building along with the appropriate and necessary
9
improvements and landscaping as well as establishing a reimbursement schedule wherein the
10
Agency would pledge to the Developer an amount equal to 60% of the 1 % of new property taxes
11
generated by the Project for a period often (10) years; and
12
13 WHEREAS, on July 21, 2008, the Commission adopted Resolution No. CDC/2008-26
14 approving and authorizing the Interim Executive Director of the Agency to execute Amendment No.
15 3 to the DDA between the Agency and the Developer; and
16
WHEREAS, Amendment No. 3 to the DDA will allow the Agency to reimburse the
17
Developer, from the Agency Property sale proceeds, an amount not to exceed the lesser of the actual
18
cost paid for the Off-Site Improvements or $399,500 utilizing prevailing wage rates; and
19
20
WHEREAS, this payment will be made to the Developer 30 days following the completion
of the Project as evidenced by a Certificate of Occupancy issued by the City and upon
21
submission/validation by the Agency of the actual costs paid for the Off-Site Improvements; and
22
23 WHEREAS, the Agency owns certain real property, approximately .84 acres, located south
24 of the southwest comer of 4th Street and Waterman Avenue within the Central City East
25 Redevelopment Project Area and is presently an unimproved flood control channel (the "Flood
26 Control Channel Property", APN: 0135-191-17); and
27
WHEREAS, the Developer has determined that additional parking IS necessary for the
28
development ofthe Project to the north ofthe Flood Control Channel Property; and
2
P:\A2endas\Resolutions\Resolutions\2008\II-03-OS Waterman Holdings, LLC - Amendment No.4 CDC Reso.doc
1 WHEREAS, the Developer has offered to purchase the Flood Control Channel Property
2 from the Agency; and
3
4
5
6
WHEREAS, an appraisal of the Flood Control Channel Property was performed in August
2008 by Smothers Appraisal (the "Appraiser"); and
WHEREAS, according to the report dated September 4, 2008 (the "Appraisal Report"),
7 prepared by the Appraiser, the fair market value of the Flood Control Channel Property is $36,000;
8 and
9
WHEREAS, the Agency intends to enter into Amendment No.4 to the DDA, as amended
10 (the "Amendment"), pursuant to which the Agency proposes to sell the Flood Control Channel
11 Property to the Developer for the fair market value of$36,000; and
12
13
WHEREAS, the Amendment provides for the development of the Flood Control Channel
Property so that it may be used as a parking lot; and
14
15 WHEREAS, the Developer has estimated that it will cost $1,100,000 for the construction of
16 the improvements to the Flood Control Channel Property; and
17
WHEREAS, the Agency has prepared and published a notice of joint public hearing in the
18
San Bernardino County SUN newspaper on October 20,2008 and October 27,2008, regarding the
19
20
21
consideration and approval of the Amendment; and
WHEREAS, pursuant to Health and Safety Code Section 33433(b), the Agency may transfer
22 the Flood Control Channel Property to the Buyer subject to the Mayor and Common Council of the
23 City of San Bernardino (the "Council") and the Commission adopting separate Resolutions
24 authorizing the Agency to transfer the Flood Control Channel Property in light of the findings set
25 forth herein, pursuant to Health and Safety Code Section 33433; and
26
WHEREAS, the Agency has prepared a Summary Report pursuant to Health and Safety
27
Code Section 33433 (the "Report") that describes the salient point of the Amendment and identifies
28
the cost of the Amendment to the Agency; and
3
P:\Agendas\Resolutions\Resolutions\2008\II-03-08 Waterman Holdings, LLC - Amendment No_ 4 CDC Reso_doc
1 WHEREAS, pursuant to Section 15332 of the California Environmental Quality Act (the
2 "Act") Guidelines, the Agency has reviewed the proposed sale and use of the Flood Control
3 Channel Property and has determined that the project, as identified in the Amendment, is exempt
4 from the Act and qualifies as a Categorical Exemption, Class 32 (Guidelines 15332) as the project
5 meets all four requirements for an In-fill Project; and
6
7
WHEREAS, disposition of the Flood Control Channel Property to the Developer is
consistent with the Central City East Redevelopment Plan; and
8
9 WHEREAS, it is appropriate for the Commission to approve the Amendment and the
10 disposition of the Flood Control Channel Property to the Developer as set forth in the Amendment,
11 and this Resolution.
12
NOW, THEREFORE, THE COMMUNITY DEVELOPMENT COMMISSION OF THE CITY
13
OF SAN BERNARDINO DOES HEREBY RESOLVE, DETERMINE AND ORDER, AS FOLLOWS:
14
Section 1.
On November 3, 2008, the Commission, as the governing board of the
15
Agency, conducted a full and fair joint public hearing with the Council relating to the disposition of
16
the Flood Control Channel Property from the Agency to the Buyer and the development thereof
17
pursuant to the Amendment. The rninutes of the Agency Secretary for the November 3, 2008
18
meeting of the Commission shall include a record of all communication and testimony submitted to
19
the Commission by interested persons relating to the public hearing and the approval of the
20
Amendment.
21
Section 2.
The Commission hereby receives and approves the Report and the other
22
23
24
25
26
27
28
written materials submitted to the Commission at the meeting at which this Resolution is adopted.
The Report contains information required under Health and Safety Code Section 33433.
Section 3.
This Resolution is adopted in order to satisfy the provisions of Health and
Safety Code Section 33433(a)(I) and (b)(2) related to the disposition of the Flood Control Channel
Property to the Buyer in accordance with the Amendment. The Commission hereby finds and
determines as follows: that the Report contains the information described in Health and Safety
Code Section 33433(b)(2) wherein the Flood Control Channel Property is being sold to the Buyer
4
P:\Agendas\Resolutions\Resolutions\2008\II-03-08 Waterman Holdings, LLC - Amendment No.4 CDC Resodoc
1 at the purchase price of $36,000 for the development of a parking lot which consideration is the fair
2 market value determined at its highest and best use in accordance with the Central City East
3 Redevelopment Plan.
4
Section 4.
The Commission hereby approves the Amendment and the Interim
5 Executive Director is hereby authorized and directed to execute the Amendment on behalf of the
6 Agency together with nonsubstantive and conforming changes as may be recommended by the
7 Interim Executive Director and Agency Counsel. The Interim Executive Director is hereby
8 authorized to take all appropriate actions as set forth in the Amendment to implement the
9
disposition and redevelopment ofthe Flood Control Channel Property.
10
Section 5.
This Resolution shall take effect from and after its date of adoption by this
5
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1
2
3
4
5
6
RESOLUTION OF THE COMMUNITY DEVELOPMENT COMMISSION
OF THE CITY OF SAN BERNARDINO APPROVING THE SALE OF
CERTAIN REAL PROPERTY BY THE REDEVELOPMENT AGENCY OF
THE CITY OF SAN BERNARDINO ("AGENCY") TO WATERMAN
HOLDINGS, LLC, AND AUTHORIZING THE INTERIM EXECUTIVE
DIRECTOR OF THE AGENCY TO EXECUTE AMENDMENT NO.4 TO
THE 2004 DISPOSITION AND DEVELOPMENT AGREEMENT, AS
AMENDED, BETWEEN THE AGENCY AND WATERMAN HOLDINGS,
LLC (4TH STREET AND WATERMAN AVENUE - APN: 0135-191-17)
(CENTRAL CITY EAST REDEVELOPMENT PROJECT AREA)
7
I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Community
8
Development Commission of the City of San Bernardino at a
meeting
9 thereof, held on the day of
10 Commission Members: Aves
11 ESTRADA
12 BAXTER
13 BRINKER
14 DERRY
15 KELLEY
16 JOHNSON
17 MC CAMMACK
18
, 2008, by the following vote to wit:
Navs
Abstain
Absent
19
20
Secretary
The foregoing Resolution is hereby approved this
21
22
23
24
day of
,2008.
Patrick J. Morris, Chairperson
Community Development Commission
of the City of San Bernardino
25 Approved as to Form:
26
27 By: ~~
A;~ol~scl
28
6
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AMENDMENT NO.4 TO THE
2004
DISPOSITION AND DEVELOPMENT AGREEMENT
BY AND BETWEEN
REDEVELOPMENT AGENCY OF THE CITY OF SAN BERNARDINO
AND
WATERMAN HOLDINGS, LLC
(4th Street and Waterman Avenue Property)
This Amendment No.4 (this "Fourth Amendment") is dated as of November 3,2008, by
and between the Redevelopment Agency of the City of San Bernardino, a public body, corporate
and politic (the "Agency"), and Waterman Holdings, LLC, a California limited liability company
(the "Buyer" or "Developer"), and is an amendment to that certain 2004 Disposition and
Development Agreement by and between the Agency and the Developer, dated as of December
6, 2004, for the sale and purchase of certain Agency owned property located at the southwest
corner of 4th Street and Waterman Avenue within the City of San Bernardino and within the
Central City East Redevelopment Project Area of the Agency (the "DDA" or "Agreement"), as
amended by that certain Amendment No. I to the DDA, dated June 20, 2005 (the "First
Amendment"), as amended by that certain Amendment No.2, dated June 19,2006 (the "Second
Amendment") and as amended by that certain Amendment No.3, dated July 21, 2008 (the
"Third Amendment"), by and between the Agency and the Buyer, 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, wherein the
Buyer, without limitation, agreed to purchase certain land that the Agency owned at the
southwest comer of 4th Street and Waterman Avenue (the "Agency Property", formerly APN:
0135-191-11 and now APN: 0135-191-16 after and pursuant to the Lot Line Adjustment, as
defined below), in the City of San Bernardino (the "City"), County of San Bernardino (the
"County"), State of California (the "State"). The Agency and the Buyer executed the First
Amendment to the DDA on June 20, 2005. The First Amendment modified the Agreement, to
provide, without limitation, for the transposition of the Phase I project and the Phase II project.
The Agency and the Buyer executed the Second Amendment to the DDA on June 19,2006. The
Second Amendment modified the DDA and the First Amendment, to provide, without limitation,
for the elimination of the Phase I and Phase II projects and was replaced by a single phase, two-
story building of approximately 45,000 square feet of floor space including the necessary and
appropriate on-site improvements and landscaping (the "Project").
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I
B. Pursuant to the Second Amendment, the Developer and the Agency, without
limitation, agreed to the following: (i) the Developer would purchase the Agency Property for
Five Hundred Twelve Thousand Four Hundred Twenty-Four Dollars ($512,424), (ii) the
Agency would reimburse the Developer a portion of the Agency Revenues (as defined in the
Agency Revenues Promissory Note (the "Note") attached as Exhibit "F" to the Second
Amendment) to be received by the Agency, in the manner provided therein and subject to the
terms, covenants and conditions of the Note, and (iii) the Developer would have a right of first
refusal on the "Flood Control Channel Property" (as defined in the Second Amendment).
C. After the approval and execution of the Second Amendment, the City added
additional requirements to the Project by requiring the Developer to construct certain off-site
improvements including, without limitation, new curbs, ~utters and sidewalks along 4th Street
and Waterman Avenue and street repair/resurfacing on 4 Street along the front of the Project
(collectively, the "Off-Site Improvements"). Pursuant to the Third Amendment, the Agency
agreed to reimburse the Developer for the actual costs paid by the Developer to construct the
Off-Site Improvements or the sum of Three Hundred Ninety-Nine Thousand Five Hundred
Dollars ($399,500), whichever is less, in the manner provided for in the Third Amendment.
D. The legal descriptions of the Agency Property and the Flood Control Channel
Property were revised and amended by the Lot Line Adjustment No. LLA 08-01 (the "Lot Line
Adjustment"), recorded on June 12, 2008, as Instrument No. 2008-0268868, in the Official
Records of the County Recorder's Office for the County of San Bernardino, State of California.
Pursuant to the Lot Line Adjustment, APN: 0135-191-11 and APN: 0135-191-15 were amended
and became APN: 0135-191-16 and APN: 0135-191-17, respectively.
E. The Agency and the Developer wish to further amend the DDA, as amended by
the First Amendment, as amended by the Second Amendment and as amended by the Third
Amendment, pursuant to the terms, covenants and conditions of this Fourth Amendment.
F. Pursuant to this Fourth Amendment, the Agency and the Developer shall agree,
without limitation, to the following: (i) the Agency shall sell to the Developer, and the
Developer shall purchase from the Agency, the Flood Control Channel Property, for the sum of
Thirty-Six Thousand Dollars ($36,000), (ii) the legal description for the Agency Property and for
the Flood Control Channel Property shall be amended in accordance with and as revised by the
Lot Line Adjustment, and (iii) the Note shall be revised as provided for in the "Revised Agency
Revenues Promissory Note" attached hereto and to the DDA as Exhibit "F".
G. The Agency and the Buyer desire to approve and execute this Fourth Amendment
to the DDA upon the terms, covenants and conditions as set forth herein.
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2
NOW, THEREFORE, THE AGENCY AND THE BUYER DO HEREBY AGREE
AS FOLLOWS:
1. Section 1.01. Purpose of Al!:reement. In Section 1.01 of the DDA, the following shall
be deleted from the end of the first section "the granting by the Agency to the Buyer of the First
Refusal Right, and the exercise by the Buyer of the First Refusal Right." and replaced with the
following "and the Flood Control Channel Property." Additionally, the second sentence of
Section 1.01 shall be deleted in its entirety and replaced with the following "The purchase and
development of the Agency Property and the Flood Control Channel Property 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."
2. Section 1.03. Benefit to Proiect Area. Section 1.03 of the DDA shall be deleted in its
entirety and replaced with the following: "The Agency has determined that the purchase and
development of the Agency Property and Flood Control Channel Property by the Buyer, in
accordance with this Agreement, will materially assist in the elimination of blight and the
implementation ofthe Redevelopment Plan for the Project Area."
3. Section 1.06. Chanl!:e in Manal!:ement and Control of Buver - Assil!:nment and
Transfer. In Section L06(a)(I) of the DDA, the wording "and/or the Flood Control Channel
Property" shall be added immediately following the word "Property." In Section L06(a)(3) of
the DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the word "Property." In Section L06(a)(4) of the DDA, the word "Agency" shall be
added immediately preceding the word "Property" and the wording "and/or the Flood Control
Channel Property" immediately following the "Property."
4. Section 1.07. List of Attachments to Al!:reement. As a result of the Lot Line
Adjustment which was necessary for the development of the Project, the legal descriptions and
assessor's parcel number for both the Agency Property and for the Flood Control Channel
Property have been changed. Accordingly, Exhibit "A", Exhibit "B", Exhibit "C", Exhibit "E"
and Exhibit "F" of the DDA, as revised by the First Amendment, by the Second Amendment and
by the Third Amendment, shall be deleted and replaced by the following Exhibits (which
Exhibits are attached hereto and incorporated herein by this reference):
Exhibit "A" "Revised Legal Description of the Agency Property"
Exhibit "B" "Revised Site Map of the Agency Property and the
Flood Control Channel Property"
Exhibit "C" "Revised Legal Description of the Flood Control Channel Property"
Exhibit "E" "Revised Improvements"
Exhibit "F" "Revised Agency Revenues Promissory Note"
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3
5. Section 1.08. No Recordation of Ae:reement; Survival. In line two (2) in Section 1.08
of the DDA, the word "Agency" shall be added immediately preceding the word "Property".
The wording "and/or the Flood Control Channel Property" shall be immediately added following
the word "Property", where appearing in Section 1.08 ofthe DDA.
6. Section 1.09. Flood Control Channel Property. Section 1.09 shall be added to the
DDA as follows: "The flood control channel consists of approximately 0.84 acres that is
presently aligned to the south of the Agency Property (the "Flood Control Channel Property").
The Buyer intends to purchase and to develop the Flood Control Channel Property as additional
parking for the Project. The Buyer shall be entitled to close escrow to acquire the Flood Control
Channel Property at anytime on or before April 30, 2009, unless such date is extended, in
writing, at the discretion of the Interim Executive Director for a total period of time not to exceed
six (6) months without an amendment to this Agreement.
7. Section 2.01. Acquisition and Disposition of the Property. In Section 2.01 of the
DDA, the word "Agency" shall be added immediately preceding the word "Property" and the
wording "and Flood Control Channel Property" shall be added immediately following the word
"Property", where appearing in the title. Additionally, the wording "and Flood Control Channel
Property" shall be added immediately following the word "Property", wherever found in this
Section.
8. Section 2.02. Conditions for Transfer of the Ae:encv Property. In Section 2.02(a) and
Section 2.02(b) of the DDA, the wording "and Flood Control Channel Property" shall be added
immediately following the word "Property", where appearing in the title. Section 2.02(c) shall
be added to the DDA as follows: "The Flood Control Channel Property shall be transferred to the
Buyer at the Close of Escrow provided that within the periods of time set forth in this Agreement
(i) neither party has terminated this Agreement, (ii) the Buyer has delivered to the Agency the
Due Diligence Certificate in connection with the Flood Control Channel Property regarding
Section 2.11 and (iii) all other conditions of the Close of Escrow in connection with the Flood
Control Channel Property set forth in this Agreement have been met and the escrow costs
relating to the Close of Escrow have been paid by the appropriate party." Section 2.02(d) shall
be added to the DDA as follows: "The parties shall deliver jointly, approved written escrow
instructions (consistent with the terms of this Agreement) to the Escrow Holder for transfer of
the Flood Control Channel Property, as soon as reasonably possible."
9. Section 2.03. Purchase Price. The Purchase Price for the Flood Control Channel
Property shall be Thirty-Six Thousand Dollars ($36,000) (the "Flood Control Channel Property
Purchase Price").
10. Section 2.04. Openine: of Escrow. Section 2.04(c) shall be added to the DDA as
follows: 'The transfer and sale of the Flood Control Channel Property shall take place through
Escrow to be administered by the Escrow Holder. The Escrow for the Flood Control Channel
Property shall be deemed open (the "Opening of Escrow") upon receipt by the Escrow Holder of
a fully executed copy of the Agreement, the First Amendment, the Second Amendment, the
Third Amendment and this Fourth Amendment. The Escrow Holder shall promptly confirm to
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\11-03-08 Waterman Holdings. LLC - Amendment No. 4.doc
4
the parties the escrow number and the title insurance order number assigned to the Escrow for
the Flood Control Channel Property with the Escrow Holder."
11. Section 2.06(a). Conveyance of Title. In Section 2.06(a) of the DDA, the wording
"and Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section. Additionally, Section 2.06(a)(3) shall be
amended as follows: "(3) the Redevelopment Plan (existing as of the date of the Fourth
Amendment)."
12. Section 2.07. Additional Closine: Oblie:ations of Ae:encv. In Section 2.07 of the DDA,
the wording "and/or Flood Control Channel Property" shall be added immediately following the
wording "Agency Property", where appearing in this Section.
13. Section 2.08. Closine: Oblie:ations of Buver. In Section 2.08 of the DDA, the wording
"and/or Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section.
14. Section 2.09. Environmental Law. In Section 2.09 of the DDA, the wording "and/or
the Flood Control Channel Property" shall be immediately added following the word "Agency
Property", where appearing in this Section.
15. Section 2.10. Due Dilie:ence Investie:ation of the Ae:encv Property. In the section
heading for Section 2.10 of the DDA, the wording "and/or Flood Control Channel Property"
shall be added immediately following the wording "Agency Property." In Section 2.10(a) of the
DDA, the wording "and/or Flood Control Channel Property" shall be added immediately
following the wording "Agency Property". In Section 2.10(b) and (c) the wording "and/or the
Flood Control Channel Property" shall be added immediately following the wording "Agency
Property." In Section 2.lO(d) of the DDA, the word "Agency" shall be added immediately
preceding the word "Property" and the wording "and/or the Flood Control Channel Property"
shall be added immediately following the word "Property." In Section 2.10(e) of the DDA, the
wording "and/or the Flood Control Channel Property" shall be added immediately following the
wording "Agency Property."
16. Section 2.11. Due Dilie:ence Certificate. In Section 2.11, Section 2.II(a) and Section
2.11(b) of the DDA, the wording "and/or Flood Control Channel Property" shall be added
immediately following the wording "Agency Property", where appearing in this Section.
17. Section 2.12. Books and Records. In line three (3) of Section 2.12 of the DDA, the
words "respective portion of the" shall be deleted. Additionally, the wording "and/or Flood
Control Channel Property" shall be added immediately following the wording "Agency
Property", where appearing in this Section.
18. Section 2.13 Condition of the ProDertv. In Section 2.13 of the DDA, the wording
"and/or Flood Control Channel Property" shall be added immediately following the wording
"Agency Property", where appearing in this Section.
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19. Section 2.14. Review and Approval of Condition of Title. In Section 2.l4(a) and
Section 2.l4(b) of the DDA, the wording "and/or Flood Control Channel Property" shall be
added immediately following the wording "Agency Property", where appearing in this Section.
20. Section 3.01. Uses. In Section 3.01 of the DDA, the wording "and the Flood Control
Channel Property" shall be added immediately following the wording "Agency Property", where
appearing in this Section.
21. Section 3.02. Modification of Covenants. In Section 3.02(a), Section 3.02(b), Section
3.02(c) and Section 3.02(d) of the DDA, the wording "and/or Flood Control Channel Property"
shall be added immediately following the wording "Agency Property", where appearing in this
Section.
22. Section 3.03. Qblieation to Refrain from Discrimination. In Section 3.03 of the
DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property", where appearing in this Section.
23. Section 3.05. No Liabilitv for Breach to a Predecessor in Interest. In Section 3.05 of
the DDA, the wording "and/or the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property", where appearing in this Section.
24. Section 3.06. Aeencv Quit Claim Deed. Section 3.06 of the DDA shall be deleted in
its entirety and replaced with the following: "All of the provisions in Sections 3.01 to 3.05,
inclusive, shall be included in the Agency Quit Claim Deed for the Agency Property and the
Flood Control Channel Property. Accordingly, Sections 3.01 to 3.05, inclusive, shall survive the
Close of Escrow."
25. Section 3.07. Maintenance Condition of the Aeency Property. In the heading for
Section 3.07 of the DDA, the wording "and Flood Control Channel Property" shall be added
immediately following the wording "Agency Property." In Section 3.07(a) and Section 3.07(b)
of the DDA, the wording "and/or the Flood Control Channel Property" shall be added
immediately following the wording "Agency Property", where appearing in Section 3.07(a) and
Section 3.07(b).
26. Section 3.08. Pledee of Aeency Revenues to Buyer. In Sections 3.08(a), 3.08(e) and
3.08(f) of the DDA, the word "Revised" shall be added immediately preceding the wording
"Agency Revenues Promissory Note." Additionally, the wording "and Flood Control Channel
Property" shall be added immediately following the wording "Agency Property", where
appearing in Section 3.08(a), Section 3.08(b), Section 3.08(c), Section 3.08(d) and Section of
3.08(e) ofthe DDA.
27. Section 3.10. Developer First Refusal Rieht. Section 3.10 of the DDA shall be
deleted, in its entirety.
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6
28. Section 4.01. Defaults and Remedies. In Section 4.01(c) and Section 4.01(g) of the
DDA, the wording "and the Flood Control Channel Property" shall be added immediately
following the wording "Agency Property".
29. Section 5.02. Conflict of Iuterest. In Section 5.02 of the DDA, the wording "and/or
Flood Control Channel Property" shall be added immediately following the wording "Agency
Property", where appearing in this Section.
30. Section 5.05. Enforced Delav: Extension of Time of Performance. In line ten (10) in
Section 5.05(b) of the DDA, the word "Agency" shall be added immediately preceding the word
"Property" and the wording "and/or the Flood Control Channel Property" shall be added
immediately following the wording "Agency Property." In line nine (9) in Section 5.05(c) of the
DDA, the word "Agency" shall be added immediately preceding the word "Property" and the
wording "and/or the Flood Control Channel Property" shall be added immediately following the
wording "Agency Property."
31. Section 5.06. Inspection of Books and Records. In Section 5.06 of the DDA, the
wording "and/or Flood Control Channel Property" shall be added immediately following the
wording "Agency Property", where appearing in this Section.
32. Section 5.13. Entire Aereement. The Agreement, as amended by the First Amendment,
as amended by the Second Amendment, as amended by the Third Amendment and as amended
by this Fourth Amendment constitutes the entire understanding and agreement between the
parties with respect to the Agency Property and the Flood Control Channel Property.
33. Section 5.14. Inteeration. In Section 5.14 of the DDA, the wording "and Flood Control
Channel Property" shall be added immediately following the wording "Agency Property", where
appearing in this Section.
34. Exhibit Headings. The following Exhibit headings shall be modified as set forth below:
Exhibit "A". Exhibit "A" shall be amended as follows:
"REVISED LEGAL DESCRIPTION FOR THE AGENCY PROPERTY"
Exhibit "B". Exhibit "8" shall be amended as follows together with the inclusion of a
new Site Map for the Agency Property and the Flood Control Channel Property:
"REVISED SITE MAP FOR THE AGENCY PROPERTY AND FOR THE FLOOD
CONTROL CHANNEL PROPERTY"
Exhibit "C". Exhibit "C" shall be amended as follows:
"REVISED LEGAL DESCRIPTION OF THE FLOOD CONTROL CHANNEL
PROPERTY"
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7
Exhibit "E". Exhibit "E" shall be amended as follows:
"REVISED IMPROVEMENTS"
Exhibit "F". Exhibit "F" shall be amended as follows:
"REVISED AGENCY REVENUES PROMISSORY NOTE"
35. Lel!:al Effect. The DDA, the First Amendment, the Second Amendment and the Third
Amendment shall only be amended to the extent set forth herein. All other terms, covenants
and/or conditions of the DDA, the First Amendment, the Second Amendment and the Third
Amendment, unless specifically amended or modified by the terms, covenants andlor conditions
of this Fourth 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 Fourth Amendment, and the DDA and/or the First Amendment and/or the Second
Amendment andlor the Third Amendment, the inconsistency, contraction and/or ambiguity shall
be resolved in favor of the terms, covenants and conditions set forth in this Fourth Amendment.
36. Defined Terms. Terms not otherwise defined or redefined in this Fourth Amendment
shall have the meanings provided for in the Second Amendment.
37. Effective Date. This Fourth 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 of this Fourth Amendment by the Agency and the Buyer.
III
III
III
III
III
III
III
III
III
III
III
III
III
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8
IN WITNESS WHEREOF, the parties have signed this Fourth Amendment as of the date
first set forth above.
AGENCY
Redevelopment Agency of the City of San Bernardino,
a public body, corporate and politic
Dated:
By:
Emil A. Marzullo, Interim Executive Director
Approved as to Form and Legal Content:
BY\~
Agency I
DEVELOPER
Waterman Holdings, LLC,
a California limited liability company
Dated:
By:
Jian Torkan
P:\Agendas\Agenda Attachments\Agnnts-Amend 2008\11-03..08 Waterman Holdings, LLC - Amendment No. 4.doc
9
Exhibit "A"
Revised Legal Description of the Agency Property
APN: 0135-191-16
PARCEL 1 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN
BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS,
PAGES I AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE
OF CALIFORNIA.
EXCEPTING THERE FROM THAT PORTION OF SAID PARCEL 1 DESCRIBED AS
FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1, SAID POINT
ALSO BEING THE NORTHWEST CORNER OF PARCEL 9 OF SAID OF PARCEL
MAP NO. 7140;
THENCE NORTH 00007'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID
PARCEL 1;
THENCE LEAVING SAID WEST LINE SOUTH 89056'51" EAST 275.19;
THENCE SOUTH 86024'16" EAST 260.00 TO A POINT ON THE SOUTH LINE OF
SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9;
THENCE SOUTH 89059'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND
SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE
POINT OF BEGINNING.
P:\Agendas\Agenda Attachments\Agrmts.Amend 2008\11-03~08 Watennan Holdings, LLC - Amendment No. 4.doc
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Exhibit "8"
Revised Site Map of the Agency Property the Flood Control Channel Property
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\1 I R03-GS Watennan Holdings, LLC ~ Amendment No. 4.doc
11
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Exhibit "C"
Revised Legal Description of the Flood Control Channel Property
APN: 0135-191-17
PARCEL 9 OF PARCEL MAP NO. 7140, LOCATED IN THE CITY OF SAN
BERNARDINO, AS PER MAP RECORDED IN BOOK 69 OF PARCEL MAPS, PAGES
1 AND 2, RECORDS OF THE COUNTY OF SAN BERNARDINO, STATE OF
CALIFORNIA
TOGUHER WITH THAT PORTION OF PARCEL 1 OF SAID PARCEL MAP NO. 7140,
DESCRIBED AS FOLLOWS:
BEGINNING AT THE SOUTHWEST CORNER OF SAID PARCEL 1, SAID POINT
ALSO BEING THE NORTHWEST CORNER OF SAID PARCEL 9;
THENCE NORTH 00"07'14" EAST 16.70 FEET ALONG THE WEST LINE OF SAID
PARCEL 1;
rHENCE LEAVING SAID WEST LlNE SOUrH 89056'51" EAST 275.19;
THENCE SOUTH 86"24'16" EAST 260.00 TO A POINT ON THE SOUTH LlNE OF
SAID PARCEL 1, SAID SOUTH LINE BEING THE NORTH LINE OF SAID PARCEL 9;
THENCE SOUTH 89"59'06" WEST 534.71 FEET ALONG SAID SOUTH LINE AND
SAID NORTH LINE TO THE SOUTHWEST CORNER OF SAID PARCEL 1, AND THE
POINT OF BEGINNING.
P:\Agendas\Agenda Attachments\Agrmts.Amend 2008\11-03-08 Watcnnan Holdings, LLC -Amendment No. 4.doc
12
Exhibit "D"
Form of Agency Quitclaim Deed
[NO CHANGES MADE]
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\11 ~03-08 Waterman Holdings, LLC - Amendment No. 4.doc
13
Exhibit "E"
Revised Improvements
The Improvement 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.
The Improvement of the Flood Control Channel Property shall consist of a single floor structure
built above the Flood Control Channel Property to provide additional parking spaces for the 2-
story, 45,000 square foot building. The construction, landscaping, etc., of the single floor
parking structure shall comply with the City Development Code and requirements from any
federal and/or state governmental agency, concerning improvements to and/or near flood control
channel land, that may be imposed on the Developer.
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\11-03-08 Waterman Holdings, LLC - Amendment No. 4.doc
14
Exhibit "F"
Revised Agency Revenues Promissory Note
P:\Agendas\Agenda Attachments\Agrmts-Amend 2008\11-03-08 Watennan Holdings, LLC - Amendment No. 4.doc
15
REVISED AGENCY REVENUES PROMISSORY NOTE
Date: July _,200_
Los Angeles, California
The undersigned, the Redevelopment Agency of the City of San Bernardino, a public agency
(the "Agency"), promises to pay, and pledges to Waterman Holdings, LLC, a California limited
liability company (the "Buyer"), or the Buyer's assignee, 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 Revised
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 this 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 this
Note are payable by the Agency to the Buyer at 4221 Wilshire Boulevard, 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 Ae:reement. The "Agreement" shall mean the Original Agreement (as defined
below), as amended by the First Amendment (as defined below), as further amended by the Second
Amendment (as defined below), as further amended by the Third Amendment (as defined below)
and as further amended by the Fourth Amendment (as defined below), as executed by and between
the Agency and the Buyer, and all exhibits attached thereto.
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 Second Amendment) and at the Flood Control Channel Property.
1.3 City. The "City" shall mean the City of San Bernardino.
1.4 County. The "County" shall mean San Bernardino County.
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1.5 First Amendment. The "First Amendment" shall mean that certain Amendment No.
1 to the Original Agreement, dated June 20, 2005, as executed by and between the Agency and the
Buyer.
1.6 Fourth Amendment. The "Fourth Amendment" shall mean that certain Amendment
No.4 to the Original Agreement, dated November 3, 2008, as executed by and between the Agency
and the Buyer.
1.7 Fiscal Year. The "Fiscal Year" shall mean any given fiscal year for the County.
1.8 Initial Fiscal Year. The "Initial Fiscal Year" shall mean the first (l S') Fiscal Year
following the Fiscal Year in which the City issued the Certificate of Occupancy.
1.9 Interest Rate. The "Interest Rate" shall mean five percent (5%) per annum which
shall only apply to late payments remitted by the Agency to the Buyer and such Interest Rate shall
not be calculated upon the unpaid Principal balance of this Note, and shall accrue in the manner
provided for in Section 3(b) of this Note.
1.10. Late Chan~e. The "Late Charge" shall mean three percent (3%) on the payment due
and owing by the Agency to the Buyer under this Note (subject to any applicable cure period(s) in
this Note and/or the Agreement).
1.11 Maturity Date. The "Maturity Date" shall mean the first business day following the
expiration ofthe Term.
1.12 Oril!inal 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.
1.13 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. As of the date of this Note,
there is no discemable method to calculate the total Principal amount that may be payable by the
Agency to the Buyer pursuant hereto.
1.14 Second 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.
1.15 Term. The "Term" shall mean the term of this Note commencing on the date of
execution of this Note and continuing thereafter until the end of the tenth (10th) Fiscal Year (with
the Initial Fiscal Year being the first Fiscal Year of this ten (l O)-year Fiscal Year period). This Note
has been duly executed and delivered as of July 1 the next succeeding Fiscal Year of the Agency
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during which the Buyer has obtained a Certificate of Occupancy from the City of San Bernardino for
the project described in the Original Agreement, as amended.
1.16 Third Amendment. The "Third Amendment" shall mean that certain Amendment
NO.3 to the Original Agreement, dated as of July 21, 2008, by and between the Agency and the
Buyer.
2. Interest. Interest shall not be paid on the Principal balance of this Note but shall be paid only
upon a default or other late payment by the Agency as provided in this Note. Subject to Section 3(b)
of this Note, 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 offunds that are legally available to
the Agency in each fiscal year during the term of such pledge (the "Agency Revenues") in an
amount 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 paid by the Buyer and/or the Buyer's successor-in-
interest to the ownership of the Agency Property and of the Flood Control Channel Property
attributable to the development to occur on the Agency Property and on the Flood Control Channel
Property pursuant to this Agreement (such 60% of the 1 % of the real property taxes as actually paid
by the Buyer and/or Buyer's successor-in-interest to the ownership of the Agency Property and of
the Flood Control Channel Property 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 the Flood Control Channel 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 and of the Flood Control Channel 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 and on the Flood Control Channel Property as of each December 10 and/or April I 0 (or any
other delinquency date established by the County for the payment of supplemental property taxes)
have been duly paid. 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 the adequacy of the documentation as submitted by
the Buyer within the applicable 30-day period of time, shall constitute approval of same by the
Agency. The Agency shall be obligated to provide written notice to the Buyer within said 30-day
period of time, as to any inadequacy of any documentation provided by the Buyer to the Agency.
Failure of the Agency to remit the requested payment of the Agency Revenues within ten (10)
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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 offive 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) It shall be a condition precedent to each payment of the Agency Revenues
hereunder that as of each such Agency Revenues payment due date there has been no Transfer (as
defined in the Agreement), assignment, or sale or other conveyance of the Agency Property or of the
Flood Control Channel Property or any interest in the Agreement which is prohibited by the
Agreement.
(d) In the event that the Buyer should Transfer any interest in the Agreement, this
Note and/or the Agency Property and/or the Flood Control Channel Property in violation of the
Agreement or this Note, or sell the Agency Property and/or the Flood Control Channel Property in
violation ofthe Agreement or this Note, prior to the expiration ofthe applicable ten-year period for
the receipt of the Agency Revenues, the obligation of the Agency for any further remittances of the
Agency Revenues shall immediately cease and terminate as to that portion of the Agency Property
and/or of the Flood Control Channel Property to which such prohibited Transfer or other sale or
conveyance has occurred.
(e) Notwithstanding anything herein to the contrary, upon the issuance of a
Certificate of Occupancy by the City for the Agency Property and/or for the Flood Control Channel
Property, any of the following transactions shall not be deemed a "Transfer" prohibited by the
Agreement or this Note: (i) the transfer of fee title to the Agency Property and/or to the Flood
Control Channel Property to any entity in which an entity directly or indirectly, majority-owned and
controlled by Jian Torkan, is the general partner or managing member or partner, (ii) a transfer offee
title to the Agency Property and/or to the Flood Control Channel Property in a transaction in which
the Buyer enters into a lease for the Agency Property and/or for the Flood Control Channel Property
pursuant to which it is obligated to pay all property taxes, or (iii) a transfer to any entity which is
directly or indirectly majority-owned and controlled by Jian Torkan. On and after the issuance of the
Certificate of Occupancy as specified above and for a period of time equal to ten (10) years after the
date of the issuance of the Certificate of Occupancy, and in addition to the ability of the Buyer to
enter into a transaction that is deemed not to be a Transfer as defined above, the Buyer may sell,
transfer or assign the Agency Property and/or the Flood Control Channel Property, the Agreement
and this Note to any other person or entity subject to the following: (i) such subsequent owner of the
Agency Property and/or of the Flood Control Channel Property has assumed in writing all duties and
obligations of the Buyer as contained in the Agreement and this Note in form and substance as may
be reasonably required by the Agency General Counsel and (ii) the subsequent owner has assumed
all Agency Property and/or Flood Control Channel Property maintenance, covenants and obligations
set forth in the Agreement, or in any other document mutually executed by Buyer and the Agency.
Following the ten (10) year period referred to above, there shall be no restriction or condition to any
sale of transfer by the Buyer of the Agency Property and/or of the Flood Control Channel Property
and/or the Buyer's interest in this Agreement. Following the expiration of the Term, the Agency
shall have no further duty or obligation to make any payment of the Agency Revenues, or any
portion thereof, to the Buyer or to any successor-in-interest in the ownership of the Agency Property
and/or of the Flood Control Channel Property (except for the Agency Revenues and/or any other
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amounts due and owing by the Agency to the Buyer under this Agreement). Notwithstanding
anything herein to the contrary, any transfer of the Agency Property and/or of the Flood Control
Channel Property and/or the Buyer's interest in the Agreement and in this Note pursuant to a
foreclosure or deed-in-lieu thereof shall not constitute a prohibited Transfer.
(f) 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 this 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 the notice or
otherwise as set forth in this 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. Prepayment. 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, but only if interest is payable due
to a prior payment default by the Agency, and any and all late charges or other amounts then owed
by the Agency hereunder.
5. Application ofPavments. 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, if any, and then to Principal then due and payable under this Note.
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 this
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:
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Address for the Agency:
Redevelopment Agency of the City of San Bernardino
20 I North "E" Street, Suite 30 I
San Bernardino, CA 9240 I
Attention: Interim Executive Director
Address for the Buyer:
Waterman Holdings, LLC
4221 Wilshire Boulevard, Suite 240
Los Angeles, CA 900 I 0
Attention: Jian Torkan
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 the
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, the 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 this Note and/or the Agreement (collectively, the "Default Payment
Amount"), and the Agency shall immediately pay to the Buyer the Default Payment Amount.
10. Unsecured Promissory Note. This Note is unsecured, and is not secured by any real or
personal property of any nature whatsoever.
II Modification. This Note may not be modified, amended, waived or extended, changed,
discharged or terminated orally or by any act on the part ofthe Agency or of the Buyer, but only by
an agreement in writing signed by the Agency and the Buyer.
12. Headings. The headings of this Note are for purposes of reference only and shall not limit or
otherwise affect the meaning thereof.
13. Interoretation. 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. Governing Law. This Note shall be governed by and construed in accordance with the laws
of the State of California.
15. Judicial Proceedings and Attornevs' Fees. If either party hereto files any action or brings
any action or proceeding against the other arising out ofthis Note, then as between the Buyer and the
Agency, the prevailing party shall be entitled to recover as an element of its costs of suit, and not as
damages, its reasonable attorneys' fees as fixed by the Court, in such action or proceeding or in a
separate action or proceeding brought to recover such attorneys' fees. The costs, salary and
expenses of the City Attorney for the City and members of his office in enforcing this Note shall be
considered as "attorneys' fees" for purposes of this Section. Any such action or proceeding must be
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commenced in the Superior Court for the County of San Bernardino, San Bernardino District, State
of California.
16. Enforcement Costs. All reasonable out-of-pocket costs incurred by the Buyer in the
enforcement of this Note shall be added to the amounts due under this Note.
17. Assil!:nment. This Note may be assigned by the Buyer, subject to the restrictions and
limitations provided for in Section 3.08(c), 3.08(d) and 3.08(e) of this Note and by the Agency, but
no such assignment shall relieve the Agency from any of its obligations or liabilities hereunder. The
terms, covenants and conditions of this Note shall be binding upon, and inure to the benefit of, the
successors and assigns of the Buyer (subject to the restrictions and limitations provided for in
Section 3.08(c), 3.08(d), and 3.08(e)ofthis Note) and ofthe Agency.
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
a public agency
By:
Emil A. Marzullo, Interim Executive Director
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