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Staff Report
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City of San Bernardino
' Request for Council Action Q
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Date: October 4, 2017
To: Honorable Mayor and City Council Members N
From: Andrea M. Miller, City Manager't VW J
By: Kathy Brann, Housing Manager
Steven H. Dukett, Consultant N
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Subject: Exclusive Right to Represent Owner for Sale or Lease of Real
Property with Lee and Associates Commercial Real Estate 3
Services Inc. Related to Theater Square O
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Recommendation
Adopt a Resolution of the Mayor and City Council of the City of San Bernardino, W
California, approving the Exclusive Right to Represent Owner for Sale or Lease of Real o
Property with Lee and Associates Commercial Real Estate Services Inc. related to
,,. Theater Square, and approving certain related actions. 0
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Background
Pursuant to Health and Safety Code (the "HSC") § 34172 (a) (1), the Redevelopment x
Agency of the City of San Bernardino was dissolved on February 1, 2012. Consistent w
with the provisions of the HSC, the Mayor and City Council of the City of San
Bernardino (the "City") previously elected to serve in the capacity of the Successor Ln
Agency to the Redevelopment Agency of the City of San Bernardino (the "Successor
Agency"). The Oversight Board for the Successor Agency ("Oversight Board") has been
established pursuant to HSC § 34179 to assist in the wind-down of the dissolved W
redevelopment agency.
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On September 15, 2015, the Successor Agency submitted its Oversight Board- w
approved Long-Range Property Management Plan (the "LRPMP") to the California
Department of Finance (the "DOF"). On December 31, 2015, the DOF approved the a
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Successor Agency's LRPMP and notified the Successor Agency that pursuant to
HSC § 34191.3, the approved LRPMP shall govern, and supersede all other o
provisions relating to the disposition and use of all the real property assets of the a
former redevelopment agency. The approved LRPMP, which addresses the <
disposition and use of the real property assets held by the Successor Agency, W
includes 230 parcels of land grouped into forty-six (46) separate sites, eighteen (18) _J
of which were designated as government use sites, seven (7) of which are
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designated as future development sites and twenty-one (21) of which were
designated to be sold. _J
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Per the direction of DOF, on August 1, 2016, the Mayor and City Council adopted
Resolution No. 2016-165, which authorized the transfer from the Successor Agency
and the acceptance by the City of the seven (7) sites identified with the LRPMP as 0
future development sites subject to the City's compliance with the applicable a
provisions of the HSC governing the later transfer of real property to third-party
entities, instead of the Successor Agency, just as though said real property had o
never been transferred to the City by the Successor Agency in the first place. y
Consistent with the foregoing, the Successor Agency transferred the future
development sites to the City via quitclaim deed on August 16, 2016 and the City is
now responsible for compliance with the applicable provisions of the HSC governing
the later transfer of the future development sites to third-parties.
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As a result of the above, the City is the owner of that certain real property consisting of L
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approximately 5.5 acres of land located at 450 North "E" Street, which includes the 3
Regal Cinemas building, adjacent parking and undeveloped land (APNs 0134-121-25, o
27, 28, 29, 35, 36 and 37) (the "Property"). Within the LRPMP the Property: i) is
identified as a non-contiguous portion of Site No. 21 (i.e., also known as the Theater
Square site); ii) is described as a public facility/commercial site; iii) is designated for
future development; and iv) does not include those portions of LRPMP Site No. 21
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related to the California and Sturges Theatres.
Discussion
On November 2, 2015, Mayor and City Council approved an Exclusive Negotiation N
Agreement (the "ENA") with AECOM Technical Services, Inc. and the Fransen
Company, Inc. (the "AECOM/Fransen") with respect to the development and use of w
the Carousel Mall and Theater Square sites and amended the ENA on August 15,
2016. Consistent with the ENA, on August 15, 2016, the Mayor and City Council to
also approved a Theater Square Development Services Agreement (the "DSA") with
AECOM/Fransen, which superseded the ENA with respect to the procedure for the o
sale and development of the Property. a
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Pursuant to the DSA, AECOM/Fransen has prepared the original and the amended cY
Theater Square Strategic Plan, both of which have been approved by the Mayor and W
City Council. Consistent with and for the purposes of implementing the amended
Theater Square Strategic Plan and with the express approval of AECOM/Fransen, it w
is necessary to engage the services of a qualified real estate broker to assist
AECOM/Fransen and the City with respect to the disposition of the Property at its o
market value. Pursuant to the DSA and amended Theater Square Strategic Plan, 0
AECOM/Fransen solicited proposals from qualified commercial real estate brokers, a
which resulted in two real estate brokers submitting proposals. Based on a review of w
proposals by representatives of the City and AECOM/Fransen and a follow-up �
confirming interview, it was determined that that Lee and Associates Commercial
Real Estate Services, Inc. (the "Lee and Associates") was the more responsive real
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estate broker and better met the current needs of the City and AECOM/Fransen with
respect to the sale or lease of the City's Theater Square real property assets.
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Adoption of the attached resolution will approve the Exclusive Right to Represent
Owner for Sale or Lease of Real Property (the "Listing Agreement") with Lee and
Associates with respect to the sale or lease of the City's Theater Square real 0
property assets, a copy which is attached hereto as Exhibit "A". The Resolution has a
been reviewed with respect to applicability of the California Environmental Quality
Act (the "CEQA"), the State CEQA Guidelines (California Code of Regulations, Title o
14, § 15000 et seq., hereafter the "CEQA Guidelines"), and the City's environmental y
guidelines. The Resolution does not constitute a "project" for purposes of CEQA, as
that term is defined by CEQA Guidelines § 15378, because it constitutes general
policy and procedure making and organizational or administrative activity that will not 0
result in a direct or indirect physical change in the environment, per § 15378 (b) (2) rn
and (5) of the CEQA Guidelines. 0
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Fiscal Impact 3
Pursuant to the Listing Agreement, Lee and Associates will be entitled to a three- O
percent (3%) contingent sales commission with respect to the Regal Cinemas property
and a six-percent (6%) commission with respect to the balance of the Theater Square L
site. The payment of the commission will be funded from land sales proceeds and will
be paid at the closing of the purchase and sale escrow. Neither the City nor the
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Successor Agency is obligated to pay Lee and Associates any fees other than the fees w
stated in the Listing Agreement. In addition, through Lee and Associates commission a)
sharing program, cooperating brokers who represent prospective buyers, will be entitled
to portion of the applicable commission consistent with the Rules of Professional 2
Conduct of the AIR, if a member or if not, the Rules of Professional Conduct of the U
Society of Industrial and Office Realtors. w
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Conclusion
It is recommended that the Mayor and City Council adopt the attached Resolution
approving the Exclusive Right to Represent Owner for Sale or Lease of Real Property o
with Lee and Associates Commercial Real Estate Services Inc. related to Theater a.
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Square, and approving certain related actions.
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Attachments w
Attachment 1: Resolution; Exhibit A— Listing Agreement with Lee and Associates a
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Ward: 1
Synopsis of Previous Council Actions: 3
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November 2, 2015: Mayor and City Council approved an ENA for Theater Square and o
the Carousel Mall sites with AECOM/Fransen. a`
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August 15, 2016: Mayor and City Council approved an Amended ENA for Theater
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Square and the Carousel Mall sites with AECOM/Fransen. 0
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August 15, 2016: Mayor and City Council approved the DSA for Theater Square with
AECOM/Fransen 0
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1 RESOLUTION NO.2017-
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2 RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN J
3 BERNARDINO, CALIFORNIA, APPROVING THE EXCLUSIVE RIGHT TO r
REPRESENT OWNER FOR SALE OR LEASE OF REAL PROPERTY WITH LEE AND ;
4 ASSOCIATES COMMERCIAL REAL ESTATE SERVICES INC. RELATED TO t
THEATER SQUARE,AND APPROVING CERTAIN RELATED ACTIONS c
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6 WHEREAS, pursuant to Health and Safety Code (the "HSC") § 34172 (a) (1), the
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7 Redevelopment Agency of the City of San Bernardino was dissolved on February 1,2012;and N
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8 WHEREAS, consistent with the provisions of the HSC, on January 9, 2012 the Mayor -'
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9 and City Council of the City of San Bernardino elected to serve in the capacity of the Successor
10 Agency to the Redevelopment Agency of the City of San Bernardino (the "Successor Agency"); w
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12 WHEREAS, the Oversight Board for the Successor Agency ("Oversight Board") has
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13 been established pursuant to HSC § 34179 to assist in the wind-down of the dissolved C.
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14 redevelopment agency; and
15 WHEREAS, on September 15, 2015, the Successor Agency submitted its Oversight
16 Board-approved Long-Range Property Management Plan (the "LRPMP") to the California
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17 Department of Finance (the"DOF"); and w
i8 WHEREAS, on December 31, 2015, the DOF approved the Successor Agency's
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19 LRPMP and notified the Successor Agency that pursuant to HSC § 34191.3, the approved
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20 LRPMP shall govern, and supersede all other provisions relating to the disposition and use of all
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21 the real property assets of the former redevelopment agency; and ca
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22 WHEREAS, the approved LRPMP, which addresses the disposition and use of the real
23 property assets held by the Successor Agency, includes 230 parcels of land grouped into forty- y
24 six (46) separate sites, eighteen (18) of which were designated as government use sites, seven Q
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25 (7) of which are designated as future development sites and twenty-one (21) of which were J
26 designated to be sold; and
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27 WHEREAS, per the direction of DOF, on August 1, 2016, the Mayor and City Council
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adopted Resolution No. 2016-165,which authorized the transfer from the Successor Agency and
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1 the acceptance by the City of the seven (7) sites identified with the LRPMP as future
2 development sites subject to the City's compliance with the applicable provisions of the HSC
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3 governing the later transfer of real property to third-party entities, instead of the Successor
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4 Agency,just as though said real property had never been transferred to the City by the Successor t
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5 Agency in the first place; and °
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6 WHEREAS, consistent with the foregoing,the Successor Agency transferred the future
7 development sites to the City via quitclaim deed on August 16, 2016 and the City is now a°,
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8 responsible for compliance with the applicable provisions of the HSC governing the later
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9 transfer of the future development sites to third-parties; and
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10 WHEREAS, consistent with the foregoing, the City is the owner of that certain real L-
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11 property consisting of approximately 5.5 acres of land located at 450 North "E" Street, which 3
12 includes the Regal Cinemas building, adjacent parking and undeveloped land (APNs 0134-121-25,
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13 27,28,29,35, 36 and 37)(the"Property");and a
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14 WHEREAS, within the LRPMP the Property: i)is identified as a non-contiguous portion
15 of Site No. 21 (i.e., also known as the Theater Square site), ii) is described as a public 0,
16 facility/commercial site; iii) is designated for future development; and iv) does not include those
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17 portions of LRPMP Site No.21 related to the California and Sturges Theatres;and x
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18 WHEREAS, on November 2, 2015, Mayor and City Council approved an Exclusive
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19 Negotiation Agreement (the "ENA") with AECOM Technical Services, Inc. and the Fransen
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20 Company, Inc. (the "AECOM/Fransen") with respect to the development and use of the
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21 Carousel Mall and Theater Square sites and amended the ENA on August 15,2016; and J
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22 WHEREAS, consistent with the ENA, on August 15, 2016, the Mayor and City w
23 Council also approved a Theater Square Development Services Agreement (the "DSA") with o
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24 AECOM/Fransen, which superseded the ENA with respect to the procedure for the sale and N
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25 development of the Property; and w
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26 WHEREAS, pursuant to the DSA, AECOM/Fransen has prepared the original and the
27 amended Theater Square Strategic Plan, both of which have been approved by the Mayor and
28 City Council; and
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1 WHEREAS, consistent with and for the purposes of implementing the amended
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2 Theater Square Strategic Plan and with the express approval of AECOM/Fransen, it is necessary
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3 to engage the services of a qualified real estate broker to assist AECOM/Fransen and the City r
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4 with respect to the disposition of the Property at its market value; and
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5 WHEREAS, consistent the DSA and amended Theater Square Strategic Plan, °
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6 AECOM/Fransen solicited proposals from qualified commercial real estate brokers, which
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7 resulted in two real estate brokers submitting proposals; and N
8 WHEREAS, based on a review of proposals by representatives of the City and
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9 AECOM/Fransen and a follow-up confirming interview, it was determined that that Lee and
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10 Associates Commercial Real Estate Services, Inc. (the "Lee and Associates") was the more .°
11 responsive real estate broker and better met the current needs of the City and AECOM/Fransen 3
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12 with respect to the sale or lease of the City's Theater Square real property assets; and d
13 WHEREAS, approval of this resolution will approve the Exclusive Right to Represent Q.
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14 Owner for Sale or Lease of Real Property (the "Listing Agreement") with Lee and Associates c
15 with respect to the sale or lease of the City's Theater Square real property assets, a copy which is as
16 attached hereto as Exhibit"A"; and
17 WHEREAS, this Resolution has been reviewed with respect to applicability of the x
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18 California Environmental Quality Act (the "CEQA"), the State CEQA Guidelines (California Code
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19 of Regulations, Title 14, § 15000 et seq., hereafter the "CEQA Guidelines"), and the City's
20 environmental guidelines; and
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21 WHEREAS, this Resolution does not constitute a"project" for purposes of CEQA, as that _j
22 term is defined by CEQA Guidelines § 15378, because this Resolution constitutes general policy w
23 and procedure making and organizational or administrative activity that will not result in a direct or o
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24 indirect physical change in the environment, per § 15378 (b) (2) and (5) of the CEQA Guidelines; a
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25 and w
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26 WHEREAS, all of the prerequisites with respect to the approval of this Resolution have
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27 been met.
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NOW, THEREFORE, BE IT RESOLVED BY THE MAYOR AND CITY COUNCIL
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OF THE CITY OF SAN BERNARDINO,AS FOLLOWS: J
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Section 1. The foregoing recitals are true and correct and are a substantive part of this 3
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Resolution. �.
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Section 2. The Listing Agreement with Lee and Associates with respect to the sale or a
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lease of the City's Theater Square real property assets, attached hereto as Exhibit "A," is hereby
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approved. U)
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Section 3. The City Manager, or designee, is authorized and directed to execute the o
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Listing Agreement and to take such other actions and execute such other documents as are N
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necessary to fulfill the intent of this Resolution.
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Section 4. This Resolution is not a "project" for purposes of CEQA, as that term is o
12 defined by Guidelines § 15378, because this Resolution is an organizational or administrative N
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activity that will not result in a direct or indirect physical change in the environment, per § 15378 d
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(b) (5)of the Guidelines.
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Section 5. This resolution shall take effect upon its adoption and execution in the R
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manner as required by the City's Municipal Code. 3
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I RESOLUTION OF THE MAYOR AND CITY COUNCIL OF THE CITY OF SAN
BERNARDINO, CALIFORNIA, APPROVING THE EXCLUSIVE RIGHT TO a
2 REPRESENT OWNER FOR SALE OR LEASE OF REAL PROPERTY WITH LEE AND J
3 ASSOCIATES COMMERCIAL REAL ESTATE SERVICES INC. RELATED TO r
THEATER SQUARE,AND APPROVING CERTAIN RELATED ACTIONS ;
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5 I HEREBY CERTIFY that the foregoing Resolution was duly adopted by the Mayor and o
City Council of the City of San Bernardino at a regular meeting thereof, held on the day of a
6 October, 2017,by the following vote,to wit:
7 Council Members Ayes Nays Abstain Absent N
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g MARQUEZ
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9 BARRIOS
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10 VALDIVIA c
SHORETT
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NICKEL o
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RICHARD y
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MULVIHILL -
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16 Georgeann Hanna, CMC,City Clerk 0
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17 The foregoing Resolution is hereby approved this day of October 2017. x
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19 R. Carey Davis,Mayor
20 City of San Bernardino z
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21 Approved as to form. J
Gary D. Saenz, City Attorney p
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EXHIBIT"A"
Exclusive Right to Represent Owner for Sale or Lease of Real Property M
("Listing Agreement") d
with Lee and Associates J
for the Sale or lease of Theater Square 3
(see attachment) a
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EXCLUSIVE RIGHT TO REPRESENT OWNER
FOR SALE OR LEASE OF REAL PROPERTY
(Non-Residential)
1. BASIC PROVISIONS("BASIC PROVISIONS,).
1.1 Parties: This agency Agreement ("Agreement"), dated for reference purposes only October_4_2017, is
made by and between City of San Bernardino, a _California charter city, whose address is 290 North D Street, San
Bernardino, CA 92401, telephone number 909-384-5122, Fax No. 909-384-5138 ("Owner"), and Lee& Associates 3
Commercial Real Estate Services, Inc. - North San Diego County, whose address is 1900 Wright Place Suite 200,
Carisbad, CA 92008,telephone number 760-929-9700, Fax No. 760-929-9977, ("Lee&Associates"). ami
1.2 Property/Premises, The real property, or a portion thereof, which is the subject of this Agreement is o
commonly known as (street address, city, state, zip)450 North E Street, San Bernardino CA, located in the County of an a.
Bernardino, and generally described as (describe briefly the nature of the property): Parcels: 0134-121-25 & 27, 0134-
131-28, 29 & 30 and 35, 36 &_3,7 ("Property"). The property includes unimproved land (the"Pads'7, the Cinema,
and vacant space within the Cinema building that may be sold separately subject to the recordation of a condominium o
map("In Line Shops"). N
1.3 Term of Agreement: The term of this Agreement shall commence on October 4, 2.017 and expire at 5:00 J
p.m. on April 3, 2018, except as it may be extended ("Term"). See also paragraph 4)
1.4 Transaction: The nature of the transaction concerning the Property for which Lee&Associates is appointed a°,
agent is a sale and/or lease, during the Term or under the circumstances described in Section 7.3, on the price and terms n
agreeable to Owner, actinG in its sole and absolute discretion Transaction"); o
2. EXCLUSIVE APPOINTMENT AS AGENT.
3 2.1 Owner hereby appoints Lee & Associates as Owner's sole and exclusive agent with respect to the Transaction 3
and Lee &Associates accepts such appointment and agrees to act as agent for Owner only and shall represent Owner in p
the Transaction and to find buyers or lessees/tenants ("lessees"), as the case maybe, for the Property. Lee & c
' Associates shall use reasonably diligent efforts to find such buyers or lessees. All negotiations and discussions for a d
Transaction shall be conducted by Lee & Associates on behalf of Owner. Owner shall promptly disclose and refer to a
Lee& Associates all written or oral inquiries or contacts received by Owner from any source regarding a possible
Transaction. o
2.2 Owner authorizes Lee&Associates to:
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(a) Place advertising signs on the Property subject to city sign ordinance; rn
(b) Enter the In Line Shops and Cinema by appointment only. Lee& Associates to follow the City's
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protocol for viewing the In Line Shops. Lee&Associates must obtain authorization from Regal to access the Cinema; >_
(c) Accept deposits from potential buyers or lessees; and
(d) Distribute information regarding the Property to participants in THE MULTIPLE ("MULTIPLE") of the x
AIR and/or any other appropriate local commercial multiple listing service, to other brokers, and to potential buyers or W
lessees of the Property. Owner shall identify as "confidential" any information provided to Agent that Owner considers le
confidential and does not want disclosed. All other information provided by Owner may be disclosed as Lee &Associates
may deem appropriate or necessary. After consummation of a Transaction, Lee&Associates may publicize the terms of
such Transaction. Z
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2.3 Lee& Associates shall comply with the Rules of Professional Conduct of the AIR, if a member or if not, the
Rules of Professional Conduct of the Society of Industrial and Office Realtors, and shall submit the Property to the JLn
MULTIPLE. Lee&Associates shall cooperate with participants in the MULTIPLE and may, at Lee & Associates's election,
cooperate with other real estate brokers(collectively "Cooperating Broker"). 0
2.4 Although Lee& Associates may represent and act as the agent for a buyer or lessee, Mathew Sullivan, w
Randall Dalby, and Tom Gioia shall not directly represent any third party buyer or lessee with respect to the Transaction.
2.5 Owner agrees that Lee&Associates may, during the ordinary and normal course of marketing the Property, p
respond to inquiries on the Property by showing and providing information on the Property, as well as on other competing
properties located outside the corporate limits of the City of San Bernardino to prospective buyers and lessees and that a
such activities may result in the payment of a commission to Lee& Associates by a third party. However, during the 0a
Term, Mathew Sullivan, Randall Dalby, and Tom Gioia, are each prohibited from showing competing properties to w
prospective buyers or tenants that are located within the corporate limits of the City of San Bernardino without the
express written consent of the Owner.
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3. PROPERTY. t
3.1 Within five business days after the commencement of the Term hereof, Owner shall provide Lee&Associates
.with the following: a
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(a) A duly completed and fully executed Property Information Sheet on the most current form published by
the AIR;
(b) Copies of all leases, subleases, rental agreements, option rights, rights of first refusal, rights of first
offer, or other documents containing any other limitations on Owner's right, ability and capacity to consummate a
Transaction, and 1°
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(c) If available to Owner, copies of building plans, and if the Transaction is a sale, title reports, boundary 4)
surveys, and existing notes and trust deeds which will continue to affect the Property after consummation of a sale. r
3.2 Lee& Associates shall have no responsibility for maintenance, repair, replacement, operation, or security of 3
the Property, all of which shall be Owner's sole responsibility. Unless caused by Lee& Associates' gross negligence, >
Lee &Associates shall not be liable for any loss, damage, or injury to the person or property of Owner, any lessees of the a
Property, any buyer, prospective buyer, lessee, or prospective lessee. o
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4. EXTENSION OF TERM. If the Transaction is a sale, and a sale is not consummated for any reason after Owner
accepts an offer to purchase the Property ("Sale Agreement"), then the expiration date of the Term of this Agreement �
shall be extended by the number of days that elapsed between the date Owner entered into the Sale Agreement and the o
later of the date on which the Sale Agreement is terminated or the date Owner is able to convey title to a new buyer free N
and clear of any claims by the prior buyer of the Property; provided, however, in no event shall the Term be so extended m
beyond one year from the date the Term would have otherwise expired. J
S. COMMISSION. d
5.1 Owner shall pay Lee & Associates commissions in accordance with the Schedule of Agreed Commissions i
attached hereto and by this reference made a part hereof("Agreed Commissions"), for a Transaction, whether such c
Transaction is consummated as a result of the efforts of Lee&Associates, Owner, or some other person or entity. Lee & `
Associates shall also be entitled to the Agreed Commissions if any of the Owner's representations and warranties c
described in paragraph 8 are shown to be false. Such Agreed Commissions are payable: 3
(a) If the Transaction is a sale, (i)the Property is sold; (ii) Owner breaches any Sale Agreement, escrow
instructions or other documents executed by Owner regarding the sale of the Property; (iii)the Property or any interest 4c):
therein is voluntarily or involuntarily sold, conveyed, contributed or transferred; (iv) the Property or any interest therein is L
taken under the power of Eminent Domain or sold under threat of condemnation, or (v) if Owner is a partnership, joint d
venture, limited liability company, corporation, trust or other entity, and any interest in Owner is voluntarily or
involuntarily sold, contributed, conveyed or transferred to another person or entity that, as of the date hereof, does not
have any ownership interest in Owner;
(b) If the Transaction is a lease and a lease of the Property, or a portion thereof is executed; or
(c) If Owner (i) removes or withdraws the Property from a Transaction or the market; (ii) acts as if the
Property is not available for a Transaction; (iii)treats the Property as not available for a Transaction; (iv) breaches this z
Agreement; (v) renders the Property unmarketable; or (vi)excepting as a result of the Owner's exercise of its regulatory
power, changes the status of the Property's title, leases, agreements, physical condition or other aspects thereof, which w
such change adversely and materially impacts the value, use or marketability of the Property.
(d) If earnest money or similar deposits made by a prospective purchaser or tenant are forfeited, Lee& w
Associates shall be entitled to one-half (1/2)thereof, but not to exceed the total amount of the commission that would
have been payable had the sale or lease transaction been consummated.
5.2 If the Transaction is a sale, the purchase agreement and/or escrow instructions to be entered into by and Z
between Owner and a buyer of the Property shall provide that:
(a) Owner irrevocably instructs the escrow holder to pay from Owner's proceeds accruing to the account of —J
Owner at the close of escrow the Agreed Commissions to Lee&Associates; °a
(b) A contingency to the consummation of the sale shall be the payment of the Agreed Commissions to cs
Lee&Associates at or prior to close of the escrow; and W
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(c) No change shall be made by Owner or buyer with respect to the time of, amount of, or the conditions V
to payment of the Agreed Commissions, without Lee&Associates'written consent. 0
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6. ALTERNATIVE TRANSACTION. If the Transaction changes to any other transaction, including, but not limited a
to, a sale, exchange, option to buy, right of first refusal, ground lease, lease, sublease or assignment of lease(collectively °d
"Alternative Transaction"), then Lee& Associates shall automatically be Owner's sole and exclusive agent for such w
Alternative Transaction and represent Owner in such Alternative Transaction, under the terms and conditions of this J
Agreement. If, during the Term hereof, an Alternative Transaction is entered into, then Owner shall pay Lee&Associates m
the Agreed Commissions. Lee &Associates will assist the City in connection with modifications/amendments to the Regal E
Lease. Any such assistance shall not be considered a Transaction and/or Alternative Transaction, although Lee &
Associates shall be entitled to a commission based on increase in value, if any, created thereby.
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7. EXCLUDED AND REGISTERED PERSONS.
7.1 Owner shall, within 5 business days after the date hereof, provide Lee & Associates, in writing, with the
-iames of those persons or entities registered with Owner by any other broker under any prior agreement concerning the
,-Iroperty ("Excluded Persons", see paragraph 7.5). Owner shall also specify for each Excluded Person the type of
transaction the consummation of which during the Term of this Agreement entitles such other broker to any
compensation ("Excluded Transaction"). Lee & Associates may within 10 days of receiving such written list, either
(a) accept the Excluded Persons and Excluded Transactions, (b) cancel this Agreement, or (c) attempt to renegotiate this r
portion of the Agreement with Owner. Once accepted by Lee&Associates, the written list shall automatically become an 3
exhibit to this Agreement. If Owner timely provides Lee& Associates with the names of the Excluded Persons and
specifies the Excluded Transaction for each Excluded Person, then the Agreed Commissions paid to Lee&Associates with Q
respect to consummation of such an Excluded Transaction with an Excluded Person shall be limited as follows: if such o
Excluded Transaction is concluded within the first 30 days of the commencement of the Term hereof, then Lee & a
Associates shall be paid a commission equal to the reasonable out-of-pocket expenses incurred by Lee&Associates in the
marketing of the Property during said 30 days; or if such Excluded Transaction is concluded during the remainder of the
Term hereof, then Lee &Associates shall be entitled to a commission equal to one-half of the Agreed Commissions. If o
the specified information concerning Excluded Persons and Transactions is not provided as set forth herein, then it shall
be conclusively deemed that there are no Excluded Persons.
7.2 Lee& Associates shall, within 5 business days after the expiration of the Term hereof, provide Owner, in o
writing, with the name of those persons or entities with whom Lee& Associates either directly or through another broker a,
had negotiated during the Term hereof("Registered Persons", see paragraph 7.5), and specify the type of transaction m
of the Property for which such negotiations were conducted ("Registered Transaction"). Those persons or entities o
who submitted written offers or letters of intent shall, however, automatically be deemed to be Registered Persons for the
type of transaction which was the subject of such offer or letter of intent. If Lee&Associates fails to timely notify Owner
of the existence of any other Registered Persons, then it shall be conclusively deemed that there are no other Registered o
Persons. A person or entity shall not be a Registered Person if Lee & Associates fails to timely specify a Registered c
Transaction for such person or entity. The parties are aware that the registration of certain individuals and/or entities
might create a dual agency, and Owner hereby consents to any such dual agency.
7.3 If, within 180 days after the expiration of the Term hereof, Owner enters into a contract with a Registered
Person for consummation of a Registered Transaction, then Owner shall, upon consummation of such Registered
Transaction, pay Lee&Associates the Agreed Commissions for the Registered Transaction. °
7.4 If, within 180 days after the expiration of the Term hereof, Owner enters into another owner-agency or listing
agreement with a broker other than Lee& Associates for any transaction concerning the Property, then Owner shall
provide to Owner's new broker the names of the Registered Persons and the Registered Transaction for each Registered
Person, and provide in such new agreement that the new broker shall not be entitled to receive any of the compensation
payable to Lee &Associates hereunder for consummation of a Registered Transaction with a Registered Person.
7.5 In order to qualify to be an Excluded Person or a Registered Person the individual or entity must have: w
toured the Property, submitted a letter of interest or intent, and made an offer to buy or lease the Property. In addition,
Exduded Persons may only be registered by a broker who previously had a valid listing agreement covering the Property, w
and such broker may only register individuals and entities actually procured by such listing broker.
8. OWNER'S REPRESENTATIONS. z
Owner represents and warrants that: ~
(a) Each person executing this Agreement on behalf of Owner has the full right, power and authority to J
execute this Agreement as or on behalf of Owner; ,n
(b) Owner owns the Property and/or has the full right, power and authority to execute this Agreement and o
to consummate a Transaction as provided herein, and to perform Owner's obligations hereunder, subject to conformance w
with California Health and Safety Code §§ 34180 (f) (1) and 34191.3, the San Bernardino Successor Agency's approved
Long-Range Property Management Plan and any other legal requirements, as may be applicable; N
(c) Neither Owner nor the Property is the subject of a bankruptcy, insolvency, probate or conservatorship
proceeding; a
(d) Owner has no notice or knowledge that any lessee or sublessee of the Property, if any, is the subject of °n
a bankruptcy or insolvency proceeding; J
(e) There are no effective, valid or enforceable option rights, rights of first refusal, rights of first offer or ..
any other restrictions, impediments or limitations on Owner's right, ability and capacity to consummate a Transaction, a
except as disclosed in writing pursuant to Paragraph 3.1(b). E
(f) That as of the date of this Agreement the asking sales price is not less than the total of all monetary L)
encumbrances on the Property. a
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19.b
9. OWNER'S ACKNOWLEDGMENTS. Owner acknowledges that it has been advised by Lee&Associates to consult
and retain experts to advise and represent it concerning the legal and tax effects of this Agreement and consummation of
a Transaction or Alternative Transaction, as well as the condition and/or legality of the Property, including, but not limited
to, the Property's improvements, equipment, soil, tenancies, title and environmental aspects. Lee&Associates shall have
no obligation to investigate any such matters unless expressly otherwise agreed to in writing by Owner and Lee &
Associates. Owner further acknowledges that in determining the financial soundness of any prospective buyer, lessee or
security offered, Owner will rely solely upon Owner's own investigation, notwithstanding Lee &Associates' assistance in t
gathering such information. 3
io. MISCELLANEOUS. t
10.1 This Agreement shall not be construed either for or against Owner or Lee& Associates, but shall be o
interpreted, construed and enforced in accordance with the mutual intent of the parties ascertainable from the language a`
of this Agreement. R
10.2 All payments by Owner to Lee &Associates shall be made in lawful United States currency. If Owner fails to
pay to Lee&Associates any amount when due under this Agreement, then such amount shall bear interest at the rate of o
6% per annum or the maximum rate allowed by law, whichever is less. W
10.3 In the event that litigation is brought by any Party in connection with this Agreement, the prevailing Party o
shall be entitled to recover from the opposing Party all reasonable costs and expenses, including reasonable attorneys' �
fees, incurred by the prevailing Party in the exercise of any of its rights or remedies hereunder or the enforcement of any `o
of the terms, conditions or provisions hereof. The costs, salary and expenses of the City Attorney and members of his 2
office in enforcing this Agreement on behalf of the City shall be considered as "attorneys' fees" for the purposes of this v�
paragraph. L-
10.4
10.4 Owner agrees to indemnify, defend and hold harmless Lee & Associates from and against any claims or
liability asserted against Lee & Associates as a result of the failure of Owner to make a full and complete disclosure 3
pursuant to law and Paragraph 3.1(a) or as a result of the fact that any of the representations made by Owner were not O
materially true and correct as of the date of this Agreement.
10.5 The parties hereby release each other with respect to consequential losses/damages and/or punitive n
damages. L
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ii. POLICE POWER. w
11.1 The City shall retain its regulatory authority over the Property and nothing herein shall be construed as a
waiver or exercise of such regulatory authority.
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12. INDEMNITY. fY
12.1 Subject to the limitations herein, each party agrees to and shall indemnify and hold the other, its elected
officials (if applicable), employees, agents, subcontractors, and/or representatives, free and harmless from all claims,
actions, damages and liabilities of any kind and nature to the extent arising from bodily injury, including death, or x
property damage, based or asserted upon any actual or alleged act or omission of the indemnifying party, its elected w
officials (if applicable), employees, agents, representatives, or subcontractors, relating to or in any way connected with qct
the accomplishment of the work or performance of services under this Agreement.
13. INSURANCE. O
13.1 While not restricting or limiting the foregoing, during the term of this Agreement, Lee & Associates shall Z
maintain in effect policies of comprehensive public, general and automobile liability insurance, in the amount of
$1,000,000.00 combined single limit, and statutory worker's compensation coverage, and shall file copies of said policies
with the Owner's Risk Manager prior to undertaking any work under this Agreement. Owner shall be set forth as an
additional named insured in each policy of insurance provided hereunder. The Certificate of Insurance furnished to the
Owner shall require the insurer to notify Owner of any change or termination in the policy. w
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14. NON-DISCRIMINATION. V
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14.1 In the performance of this Agreement and in the hiring and recruitment of employees, Lee &Associates shall W
not engage in, nor permit its officers, employees or agents to engage In, discrimination in employment of persons a
because of their race, religion, color, national origin, ancestry, age, mental or physical disability, medical condition, 06
marital status, sexual gender or sexual orientation, or any other status protected by law, except as permitted pursuant to W
Section 12940 of the California Government Code. —'
is. INDEPENDENT CONTRACTOR. ami
15.1 Lee &Associates shall perform work tasks provided by this Agreement, but for all intents and purposes Lee& E
Associates shall be an independent contractor and not an agent or employee of the Owner. Lee& Associates shall
secure, at its expense, and be responsible for any and all payment of Income Tax, Social Security, State Disability
Packet Pg. 596
19.b
Insurance Compensation, Unemployment Compensation, and other payroll deductions for Lee& Associates and its
officers, agents, and employees, and all business licenses, if any are required, in connection with the services to be
oerformed hereunder.
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16. BUSINESS REGISTRATION CERTIFICATE AND OTHER REQUIREMENTS.
16.1 Lee& Associates warrants that it possesses or shall obtain, and maintain a City of San Bernardino business a
registration certificate and any other licenses, permits, qualifications, insurance and approval of whatever nature that are
legally required of Lee&Associates to practice its business or profession. Y
3
17. NOTICES.
17.1 Any notices to be given pursuant to this Agreement shall be deposited with the United States Postal Service, a
postage prepaid and addressed to the Owner or Lee &Associates at the addresses indicated above. o
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is. ASSIGNMENT.
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18.1 Lee& Associates shall not voluntarily or by operation of law assign, transfer, or encumber all or any part of
the Lee & Associates' interest in this Agreement without the Owner's prior written consent. Any attempted assignment, o
transfer, or encumbrance shall be void and shall constitute a breach of this Agreement and cause for the termination of
this Agreement. Regardless of Owner's consent, no assignment shall release Lee& Associates of Lee& Associates' IOU
obligation to perform all other obligations to be performed by Lee &Associates hereunder for the term of this Agreement. —J
19. VENUE.
19.1 The Parties hereto agree that all actions or proceedings arising in connection with this Agreement shall be N
tried and litigated either in the State courts located in the County of San Bernardino, State of California or the U.S. District o
Court for the Central District of California, Riverside Division. The aforementioned choice of venue is intended by the
Parties to be mandatory and not permissive in nature.
20. GOVERNING LAW. O
20.1 This Agreement shall be governed by the laws of the State of California.
21. SUCCESSORS AND ASSIGNS.
21.1 This Agreement shall be binding on and inure to the benefit of the Parties to this Agreement and their
respective heirs, representatives, successors, and assigns. 0:
22. HEADINGS.
22.1 The subject headings of the sections of this Agreement are included for the purposes of convenience only a>
and shall not affect the construction or the interpretation of any of its provisions.
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23. SEVERABILITY. v,
23.1 If any provision of this Agreement is determined by a court of competent jurisdiction to be invalid or 20
unenforceable for any reason, such determination shall not affect the validity or enforceability of the remaining terms and w
provisions hereof or of the offending provision in any other circumstance, and the remaining provisions of this Agreement
shall remain in full force and effect.
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24. REMEDIES; WAIVER
24.1 All remedies available to either Party for one or more breaches by the other Party are and shall be deemed z
cumulative and may be exercised separately or concurrently without waiver of any other remedies. The failure of either i;z
Party to act in the event of a breach of this Agreement by the other shall not be deemed a waiver of such breach or a J
waiver of future breaches, unless such waiver shall be in writing and signed by the Party against whom enforcement is
sought. N
25. Disclosures Regarding The Nature of a Real Estate Agency Relationship. When entering into an Lu
agreement with a real estate agent an Owner should from the outset understand what type of agency relationship or L)
representation it has with the agent or agents in the transaction. 0
(i) Owner's Agent. An Owner's agent may act as an agent for the Owner only. An Owner's agent or a
subagent has the following affirmative obligations: To the Owner: A fiduciary duty of utmost care, integrity, honesty, <
and loyalty in dealings. To a potential buyer/lessee and the Owner: a. Diligent exercise of reasonable skills and care in w
performance of the agent's duties. b. A duty of honest and fair dealing and good faith. c. A duty to disclose all facts uJ
known to the agent materially affecting the value or desirability of the property that are not known to, or within the
diligent attention and observation of, the Parties. An agent is not obligated to reveal to either Party any confidential
information obtained from the other Party which does not involve the affirmative duties set forth above. s
Ik (b) Agent Representing Both Parties. A real estate agent, either acting directly or through one or more
associate licenses, can legally be the agent of both Parties in a transaction, but only with the knowledge and consent of a
Packet Pg. 597
19.b
the Parties. In a dual agency situation, the agent has the following affirmative obligations to both Parties: a. A fiduciary
duty of utmost care, integrity, honesty and loyalty in the dealings with either Party. b. Other duties to the Owner as
stated above in subparagraph (i). When representing both Parties, an agent may not without the express permission of
the respective Party, disclose to the other Party that the Owner will accept rent/purchase price in an amount less than
that indicated in the listing or that the buyer/lessee is willing to pay a higher rent/purchase price than that offered. a
a)
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The above duties of the Lee & Associates, as agent, do not relieve Owner from the responsibility to protect its own s
interests. Owner should carefully read all agreements to assure that they adequately express its understanding of the 3
transaction.
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Date: a
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LEE&ASSOCIATES
Lee&Associates Commercial Real Estate Services,Inc._- o
North San Diego County y
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Name: David Howard
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Title: President
BRE License #: 01096996
Address: 1900 Wright Place, Suite 200,
Carlsbad, CA 92008 3
Phone: 760-929-9700 O
Fax:_ 760-929-9977
Email: dhowardolee-associates.com d
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Date:
OWNER
The City of San Bernardino, a California charter city
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By: --- w
Name: Andrea M. Miller
Title: City Manager
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ATTEST: 0
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Georgeann Hanna, City Clerk Cn
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Approved as to form: Cn
Gary D.Saenz,City Attorney Q
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LEE &
ASSOCIATES
COMMERCIAL REAL ESTATE SERVICES SCHEDULE OF AGREED COMMISSIONS
Address: 450 North ESI c
San Bernardino,CA 9240 3
A. SALES AND LEASES
1. Cinema: 3% of the gross sale price with a co-broker(co-broker commission shall be payable o
by Lee&Associates from its 3%); 3% of the gross sales price without a co-broker. a-
2. In Line Shops: 6% of the gross sales price broker (co-broker commission shall be payable
by Lee&Associates from its 6%). o
3. Pads: 6% of the gross sales price broker (co-broker commission shall be payable by Lee &
Associates from its 6%).
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B. PAYMENT OF EARNED COMMISSIONS o
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1. Commissions shall be paid through escrow upon the closing of sales and exchange N
transactions. Absent an escrow, commission shall be paid upon recordation of a deed or o
upon delivery of such deed or other conveyance if recordation is deferred more than one
L
month thereafter. In the event of a contract or agreement of sale, joint venture agreement,
business opportunity or other transaction not involving the delivery of a deed, commissions 03
shall be paid upon execution and delivery of the instrument or conveyance or establishment
of the entitlement of ownership. N
2. Leasing commissions shall be paid 1/2 upon a lease being signed by both parties and 1/2 a
upon the tenant opening for business.
The undersigned hereby acknowledge and confirm this Schedule of Agreed Commissions: °
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Dated: Dated:
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OWNER: BROKER: LL!
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By: Andrea M. Miller,City Manager By: David Howard,President
Attest: Z
Address: 1900 Wright Place,Suite 200
Carlsbad, California 92008
Georgeann Hanna,City Clerk 06
Tel: 760-929-9700 Fax: 760-929-9977
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Address:290 North D Street N
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San Bernardino,California 92401 IX
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Approved as to form: U)
Gary D. Saenz,City Attorney Q
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Tel; 909-384-5122 Fax: 909-384-5138 E
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Packet Pg. 599
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