HomeMy WebLinkAbout04-05-2016 Item 06 Reimbursement agreement for a potential parking structure associated with the Santa Rosa Infill project
Meeting Date: 4/5/2016
FROM: Derek Johnson, Assistant City Manager
Prepared By: Lee Johnson, Economic Development Manager
SUBJECT: REIMBURSEMENT AGREEMENT FOR A POTENTIAL PARKING
STRUCTURE ASSOCIATED WITH THE SANTA ROSA INFILL
PROJECT
RECOMMENDATIONS
1. Approve and authorize the City Manager to execute a Reimbursement Agreement with 1144
Higuera Investments, LLC in a final form subject to the approval of the City Attorney,
reimbursing the City for consultant work related to the study of City participati on in the
potential parking structure associated with the Santa Rosa Infill Project; and
2. Authorize the City Manager to execute the consultant contracts associated with the
reimbursement agreement.
DISCUSSION
The City Council conceptually reviewed a proposed mixed use project at 1101 Monterey and
1144 and 1166 Higuera Street on February 16, 2016 that included retail, hotel and residential
uses, a parking structure, and transit facility. Staff identified a variety of special studies that
would be needed to inform the City Council and the public regarding the proposed business
aspects of the project along with potential zoning issues such as off site, shared, or in-lieu
parking arrangements.
As part of this project the 1144 Higuera Investments, LLC (“Applicant”) is proposing a public
private partnership to develop the parking structure component of the project, located on
adjoining property at the corner of Higuera and Toro Streets. In order to evaluate potential City
participation the City will require the support of various outside experts to provide advice as well
as associated analysis and studies as required by the City to make informed recommendations to
the City Council. The consultant services include but are not limited to:
1) Outside Legal Counsel
a. Provide legal support and services related to any reimbursement or other
agreements necessary to carry out the project.
2) Parking Consultants
a. Assess existing and projected parking supply and demand and develop
recommendations for the project and surrounding area.
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b. Review and make recommendations for potential funding strategies (including in-
lieu payments) to construct and maintain the structure as well as other parking
needs in the area.
3) Financial Consultants
a. Analyze estimated costs and projected revenues associated with the parking
structure and determine and quantify risk associated with assuming a City interest
in a portion or all of the parking structure.
The City has preliminarily reviewed the scope of work required of the consultants and has
estimated the total consultant costs and fees to potentially be $130,000 which includes the
estimated consultant cost of $100,000 plus a 30% administrative fee of $30,000.
FISCAL IMPACT
There is no fiscal impact to the City at this time. The Applicant is responsible for consultant
costs plus a 30% administrative fee for the associated staff resources.
Attachments:
a - Reimbursement Agreement - Parking Structure
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DEPOSIT/REIMBURSEMENT AGREEMENT
This Deposit/Reimbursement Agreement (“Agreement”) is made on this ________ day of
______________, 2016 by and between the City of San Luis Obispo, a municipal corporation
and Charter City (“City”) and the 1144 Higuera Investments, LLC a California limited liability
company (“Developer”).
RECITALS
WHEREAS, the Developer is proposing a project located within the City of San Luis Obispo,
California, commonly known as 1101 Monterey Street and 1144 and 1166 Higuera Street, San
Luis Obispo, APNs: __________________(collectively referred to herein as the “Property”).
WHEREAS, the Developer proposes to entitle and develop the Property to accommodate two
new, 75 foot tall, mixed use structures with approximately 20,000 square feet of
retail/commercial space, 45,000 square feet of hotel space, 48,000 square feet of residential
space, 16,000 square feet of office space and a 45 foot tall parking garage and transit center (the
“Project”).
WHEREAS, the parking structure and transit center components of the project would be open to
and serve the general public and, if constructed, would be considered a regional community
amenity;
WHEREAS, based on the results of the City’s due diligence of the Project, the City may or may
not participate financially in the parking structure and associated transit center now or in the
future.
WHEREAS, pursuant to the terms and conditions set forth herein, the Developer has agreed to
reimburse the City for its costs and expenses related to the City’s due diligence, including the
costs and expenses of outside legal counsel, professional financial consultants, professional
parking consultants and all other reasonable costs related to the analysis of the Project.
AGREEMENT
NOW, THEREFORE, in consideration of the following mutual promises and agreements, City
and Developer agree as follows:
1. Incorporation of Recitals. The above recitals are true and correct and are
incorporated herein by this reference.
2. City to Retain Consultant. As part of the City’s analysis of the Project, the City may, in
its sole and absolute discretion, retain, by means of a contract (“Consultant Contract”),
the services of contract staff, a consultant, or consultants (hereinafter “Consultant”) in
order to assist with the City’s analysis of the Project. The scope of work for each
Consultant will be reviewed with the Developer prior to contract execution.
3. The Developer to Cooperate. The Developer agrees that it will instruct its agents,
employees, consultants, contractors and attorneys to reasonably cooperate with C ity and
to provide all necessary documents or information reasonably requested of them by the
City; provided, however, that the foregoing shall not require the disclosure of any
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documents or information of the Developer, which the Developer specifically identifies
or by law is privileged, proprietary, or confidential.
4. City’s Selection of Consultant. The Developer agrees that the City may, in its sole and
absolute discretion; select the appropriate consultant without consulting with the
Developer or obtaining the Developer’s prior approval. Developer further acknowledges
and agrees that the City may need to retain additional consultants that are not known at
this time in order to analyze the Project. In such event, the City shall notify the Developer
of the need for any additional consultants. If the Developer disagrees with the City’s need
to retain additional consultants, then the Developer’s sole and exclusive remedy will be to
terminate this Agreement pursuant to Section 10. The Developer understands that such
termination will relieve the City of further obligation to process the Project.
5. The Developer Reimbursement of Consultant Costs, Expenses and Administrative Fees.
The Developer shall advance the City for costs and expenses regarding to the Consultant
Contract (“Consultant Costs”) and any related administrative fees and expenses incurred
by the City. The City has preliminarily reviewed the scope of work required of the
Consultants and has estimated the aggregate Consultant Costs and fees to potentially be
$130,000 which includes Consultant Estimated cost of $100,000 plus a 30%
administrative fee of $30,000.
6. Deposits to be made by the Developer .
a. Initial Deposit. The Developer shall provide the City with an initial deposit in the
amount of 50% of the estimated Consultant Costs and fees as provided in Section 5
above. The Initial Deposit, as well as any subsequent Replenishment Deposits(s)
described in Section 6(b) below (collectively the “Deposit”), may be commingled
with other funds of the City.
b. Replenishment Deposit(s). Subject to the provisions of this Agreement, the Developer
hereby agrees that whenever the amount of the Deposit declines to $5,000 or less, the
City may request an additional deposit in an amount necessary to return the Deposit
to an amount sufficient to cover all anticipated costs under the Consultant Contract as
City may determine. The Developer shall deliver a Replenishment Deposit to City
within fifteen (15) days following such written request.
c. Suspension of Work. Any work on the Project shall be suspended if the Deposit is not
timely replenished.
d. Records. City shall at all times maintain records as to the expenditure of the Deposit.
Not less than monthly, City shall provide Developer with a statement (“Monthly
Statement”) for all work performed during the prior month which shall include
consultant invoices (with any privileged or confidential information redacted), the
City’s percentage and the amount of the Deposit remaining after the payment of the
work included in that Monthly Statement.
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e. Return of Deposit. Within fifteen (15) days following the termination of this
Agreement, City shall return any then unexpended portion of the Deposit to the
Developer, without interest, less any amount owed to the City by the Developer.
7. Agreement Not Debt or Liability of City. It is hereby acknowledged and agreed that this
Agreement is not a debt or liability of City. City shall not in any event be liable hereunder
other than to return the unexpended and uncommitted portions of the Deposits and to
provide an accounting as provided in Section 6.e above. City shall not be obligated to
advance any of its own funds with respect to the Consultant Costs.
8. Conflicts of Interest.
a. Consultants Work for City. City has sole discretion to direct the work and evaluate the
performance of the Consultant and its employees assigned to work on the Project, and
City retains the absolute right to terminate or replace at any time any such person or
entity. Any documents prepared hereunder or any approvals shall reflect the
independent judgment of the City. Accordingly, even though the funds provided
hereunder shall be utilized to retain Consultants and for administrative costs, such
Consultants shall work solely for the City and shall not take direction or guidance
from the Developer and the Developer shall have no right to access or review any
privileged or confidential communications between the City and its attorneys and/or
consultants.
b. Selection and Payment by City. City has sole and absolute discretion to select which
of its Consultants are assigned to work on the Project. City has the sole and absolute
discretion to determine the amount of compensation paid to Consultants assigned to
work on the Project.
c. No Employment by the Developer. The Developer represents and warrants that for
the 12 months preceding the submission of its Project application, it has not entered
into any arrangement to pay financial consideration to, and has not made any payment
to, the Consultant.
d. City to Retain Absolute Discretion Regarding Project Approvals. The Developer
acknowledges and agrees that notwithstanding the Developer reimbursement
obligations under this Agreement, the City remains free to exercise its independent
judgment in the analysis of the Project and further acknowledges and agrees that City
is not obligated to approve any or all of the proposed uses, permits or other
entitlements for the Property, to approve any environmental documents or general
plan or municipal code amendments which may be required for an y of the uses
contemplated for the Property. The Developer warrants and represents that no City
official, officer, Consultant, agent or attorney has represented, expressly or impliedly,
that the City will approve any proposed use of the Property or enter into any type of
development agreement. The Developer understands that there may be numerous
legislative and quasi-judicial decisions to be made by the City with regard to the
development of the Property; that all such decisions of the City with regard to the
Property and the contemplated uses of the Property will be made only after
compliance with all the City’s statutory and other legal obligations and after
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considering all appropriate information and evidence; and that such evidence may
cause the City to disapprove any or all of the contemplated uses of the Property.
Notwithstanding anything in this Agreement to the contrary, the City retains all
authority and discretion granted to it by law to approve, disapprove or modify any of
the proposed uses of the Property.
9. Term. The term of this Agreement shall commence on April 15, 2016 and, except as
provided herein, shall terminate when all work by the Consultant Contract(s) has been
completed to the City’s reasonable satisfaction and the Developer has satisfied all of its
obligations under this Agreement including, without limitation, the obligation to pay the
City for Consultant Costs and Excess Costs, if any. The Developer obligation to
reimburse the City as provided in this Agreement shall survive the termination of this
Agreement pursuant to this Section 9.
10. Early Termination. For good cause, the City may terminate this Agreement prior to the
term set forth in Section 9 above, without cost or liability to the City, upon thirty (30)
days prior written notice to the Developer. The Developer , upon thirty (30) days’ prior
written notice, may, in its sole and absolute discretion, terminate this Agreement prior to
the end of the term set forth in Section 9 above, provided that the Developer has satisfied
all of its obligations under this Agreement to date of such termination and that the
Developer has given the City written notice withdrawing its applications(s) for the
Project.
Within two (2) business days following either the City’s decision to terminate this
Agreement or the City’s receipt of written notice indicating the Developer decision to
terminate this Agreement, the City shall notify the affected Consultants and instruct them
to cease work under this Contract.
11. Remedies Upon Default. An event of default shall be deemed to exist upon the
occurrence of all of the following:
a. Either the City or the Developer has, without legal justification or excuse, breached
any one or more of its obligations under this Agreement; and
b. The non-defaulting party has sent written notice to the party claimed to be in default,
specifying the default and what actions the non-defaulting party asserts should be
taken to remedy the default; and
c. The party claimed to be in default has not, within ten (10) days following receipt of the
written notice described above, either corrected the default or taken actions,
reasonably satisfactory to the non-defaulting party, to remedy the default within a
reasonable period of time, but in no event longer than thirty (30) days after receipt of
the written notice described in (b) above.
Following an event of default, the non-defaulting party may exercise any and all remedies
available to it pursuant to this Agreement, or at law or in equity, including, without limitation,
instituting an action for damages, injunctive relief, or specific performance.
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12. Indemnification. To the fullest extent provided by law, the Developer shall indemnify,
defend and hold City its agents, officials, officers, employees harmless from and against
any and all claims, causes of action, damages, lawsuits or liability, which arise from or
relate to City’s retention of Consultant and City’s performance under the Consultant
Contract except that the Developer duty to indemnify and defend as provided herein shall
not extend to any claims or liability arising from the proven gross negligence or willful
misconduct of City. The Developer duty to indemnify and defend shall survive
termination of this Agreement.
13. Non-Waiver of Rights or Remedies. The failure of a party to exercise any one or more of
its rights or remedies under this Agreement shall not constitute a waiver of that party’s
right to enforce that right or seek that remedy in the future. No course of conduct or act
of forbearance on any one or more occasions by any party to this Agreement shall
preclude that party from asserting any right to remedy available to it in the future. No
course of conduct or act of forbearance on any one or more occasions shall be deemed to
be an implied modification of the terms of this Agreement.
14. Assignability. This Agreement may be assigned by Developer without the consent of the
City. Developer, prior to the effective date of any assignment, give the City written
notice of the assignment including the name, address, email address, telephone number
and contact information for the assignee. The City reserves the right, within its
reasonable discretion, to request an increase in the deposit upon assignment.
15. No Oral Modifications. This Agreement represents the entire understanding of the City
and the Developer and supersedes all other prior or contemporaneous written or oral
agreements pertaining to the subject matter of this Agreement. This Agreement may be
modified only by a writing signed by the authorized representatives of both the City and
the Developer .
16. Binding Upon Successors. This Agreement and each of its terms shall be binding upon
the City, the Developer and their respective officers, elected officials, Consultants,
agents, contractors, and permitted successors and assigns.
17. Legal Challenges. Nothing herein shall be construed to require City to defend any third
party claims and suits challenging any action taken by the City with regard to any
procedure or substantive aspect of the City’s approval of development of the Property,
the environmental process, proposed uses of the Property or development agreement, if
any. The Developer may, however, in its sole and absolute discretion, appear as real party
in interest in any such third party action or proceeding. If the City defends such action or
proceeding, the Developer shall be responsible to reimburse the City for whatever legal
fees and costs, in their entirety that may be incurred by the City in defense of such action
or proceeding. The City and the Developer shall seek to jointly approve legal counsel,
but the City shall have the absolute right to retain such counsel as it deems necessary and
appropriate if such joint agreement cannot be reached. The Developer shall reimburse
City in the event of an award of court costs or attorney fees is made against City in favor
of any third party challenging either the sufficiency of an environmental impact report or
the validity of the City’s approval of the Application if any.
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18. Attorneys’ Fees. In the event that any action or proceeding, including arbitration, is
commenced by either the City or the Developer against the other to establish the validity
of this Agreement or to enforce any one or more of its terms, the prevailing party in any
such action or proceeding shall be entitled to recover from the other, in addition to all
other legal and equitable remedies available to it, its actual attorneys’ fees and costs of
litigation, including, without limitation, filing fees, service fees, deposition costs,
arbitration of costs and expert witness fees, including actual costs and attorneys’ fees on
appeal.
19. Jurisdiction and Venue. This Agreement is executed and is to be performed in the City of
San Luis Obispo, and any action or proceeding brought relative to this Agreement shall
be heard in the appropriate court in the County of San Luis Obispo, California. The City
and the Developer hereby each consent to the personal jurisdiction of the court in any
such action or proceeding.
20. Time is of the Essence. Except as otherwise expressly stated, time is of the essence in the
performance of each and every action required pursuant to this Agreement.
21. Covenant of Further Assurances. The City and the Developer shall take all other actions
and execute all other documents, which are reasonably necessary to effectuate this
Agreement.
22. Interpretation. The City and the Developer agree that this Agreement is the product of
mutual negotiations and is an arms-length transaction. Each party has negotiated this
Agreement with the advice and assistance of legal counsel of its own choosing.
It is further agreed that the terms of this Agreement shall be construed in accordance with
the meaning of the language and shall not be construed for or against either party by
reason of authorship and the rule that ambiguities in a document shall be construed
against the drafter of the document shall have no application to this Agreement. In
construing and interpreting this Agreement, the finder of fact shall give effect to the
mutual intention of the City and the Developer, notwithstanding such ambiguity, and may
refer to the facts and circumstances under which this Agreement is made and such other
extraneous evidence as may assist the finder of fact in ascertaining the intent of the City
and the Developer.
23. Severability. If any term or provision of this Agreement is found to be invalid or
unenforceable, the City and the Developer both agree that they would have executed this
Agreement notwithstanding the invalidity of such term or provision. The invalid term or
provision may be severed from the Agreement and the remainder of the Agreement may
be enforced in its entirety.
24. Headings. The headings of each section of this Agreement are for the purposes of
convenience only and shall not be construed to either expand or limit the express terms
and language of each section.
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25. Representations of Authority. Each party signing this Agreement on behalf of a party
which is not a natural person hereby represents and warrants to the other party that all
necessary legal prerequisites to that party’s execution of this Agreement have been
satisfied and that he or she has been authorized to sign this Agreement and bind the party
on whose behalf he or she signs.
26. Notices. Notices required under this Agreement shall be sent to the following:
If to the City: City of San Luis Obispo
Attn: City Manager
990 Palm Street
San Luis Obispo, CA 93401-3249
Facsimile No. (805) 781-7109
If to the Developer :
Developer
c/o:
San Luis Obispo, CA 93403
Notices given pursuant to this Agreement shall be deemed received as follows:
(a) If sent by United States Mail – five (5) calendar days after deposit into the United
States Mail, first class postage prepaid.
(b) If by facsimile – upon transmission and actual receipt by the receiving party.
(c) If by express courier service or hand deliver – on the date of receipt by the receiving
party.
The addresses to notices set forth in this Section 24 may be changed upon written notice of such
change to either the City or the Developer , as appropriate.
27. Days. Unless otherwise specified to the contrary, “days” in this Agreement shall mean
calendar, not business days.
[Signatures on following page]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the first date set
forth above.
CITY OF SAN LUIS OBISPO
A Municipal Corporation
By:
Katie Lichtig
City Manager
ATTEST:
City Clerk
APPROVED AS TO FORM:
Christine Dietrick
City Attorney
THE 1144 HIGUERA LLC
By:
APPROVED AS TO FORM:
Legal Counsel for Applicant
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