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HomeMy WebLinkAbout11 - San Diego Creek North, Fletcher Jones Motor Car Project, Declaration of Special land Use Restriction/Dedication AgreementBY TME NG CH TY OF NEClr Council Meeting Date: Dec. 11, 1995 Agenda: # 11 CITY OF NEWPORT BEACH OFFICE OF THE CITY ATTORNEY December 6, 1995 TO: Mayor and Members of the City Council FROM: Bob Burnham, City Attorney RE: San Diego Creek North, Fletcher Jones Motor Car Project, Declaration of Special Land Use Restriction/ Dedication Agreement The Irvine Company (TIC), Fletcher Jones Motor Cars, Inc. (Fletcher Jones) and City staff have concluded negotiations regarding the form and content of the Agreement pursuant to which TIC will dedicate the San Diego Creek Parcel (Property) to the City (Dedication Agreement) and the Declaration of Special Land Use Restrictions pursuant to which TIC will maintain some control over the use and improvements on the Property. The proposed Dedication Agreement and Declaration are attached to this memo. The key provisions of these two documents can be summarized as follows: A. Dedication Agreement 1. TIC is obligated to dedicate the Property to the City for use as an automobile dealership prior to the date on which dedication is required by CIOSA; 2. As a condition to the Dedication, City is required to form the CIOSA Financing District, approve amendments to the Block 500 PC Text, rebate a portion of the Fair Share Fees to be paid by Fletcher Jones, and commit to design and construct certain improvements; 3. TIC's obligation to dedicate the Property is contingent upon City providing assurance to TIC that it has acquired, or will acquire, parcels contiguous to the Property; and, 4. TIC commits to cooperate with City to obtain ownership or constructive use of the contiguous parcels, as well as provide a right of entry to the Property to allow soils testings. B. Declaration 1. Limits the improvements on the Property to "Specific Facilities" identified in the Site Plan submitted by Fletcher Jones; 2. Gives TIC right to approve the design of the Specific Facilities; 3. Gives TIC the "right of first refusal" to purchase the Property in the event of certain transfers of the Property and franchise or conversion to a use other than auto dealership; 4. Limits the use of the Property to an automobile dealership unless certain criteria for conversion are satisfied; 5. Requires the Owner to maintain the property and restore improvements damaged by fire or other casualty; 6. Prohibits certain operations and uses on the Property; 7. Gives TIC the right to future. compensation under certain circumstances if the Property converts to a use other than automobile dealership. The Dedication Agreement requires the City to determine that TIC has satisfied all of its "CIOSA" obligations with respect to the San Diego Creek North parcel. The City Council, should, in addition to authorizing the Mayor and City Clerk to execute these Agreements, find that TIC has fully complied with its obligations upon execution of the Dedication Agreement by authorized representatives of TIC. RECOMMENDATION: We recommend that the City Council authorize the Mayor and City Clerk to execute the Dedication Agreement and the Declaration, and find that TIC has, upon execution of the Dedication Agreement and Declaration by authorized representatives, fully satisfied all of its obligations pursuant to the Circulation Improvement and Open Space Agreement with respect to the San Diego Creek North parcel. RC:wb wb\ccfletch.mem Agenda # 11 DEDICATION AGREEMENT THIS AGREEMENT made and entered into on the day of 1995, by and between The Irvine Company, a Michigan corporation, dba Irvine Land Management ("TIC") and the City of Newport Beach, a charter City and municipal corporation ("City") is made with reference to the following: A. TIC is the owner of a large parcel of vacant land commonly known as the San Diego Creek North ("the Property") which is depicted on the map attached as Exhibit A and legally described in Exhibit B. TIC has previously transferred portions of the adjacent property to the Transportation Corridor Agency for street and highway purposes. B. TIC is required, pursuant to the provisions of the Circulation Improvement and Open Space Agreement ("CIOSA") to dedicate the Property to the City, for public facility and open space purposes, upon completion of development on all vacant parcels described in CIOSA. C. City desires to expedite acquisition of the Property and immediately convey the Property to Fletcher Jones Motor Cars, Inc. ("Developer") to facilitate the development and operation of an automobile dealership as opposed to the uses currently permitted pursuant to CIOSA. In the absence of this Agreement, City would potentially lose significant sales tax revenue as a result of developers relocation of its dealership to another jurisdiction. 1 D. To assist the City in its efforts to preserve sales tax revenues generated by Developer, TIC is willing to support amendments to CIOSA which would expedite dedication of the Property and authorize uses other than those permitted in CIOSA, provided the Property is not used in a manner which will interfere with TIC's existing contractual obligations or impede, or cause any adverse physical or economic impact on, the development of TIC's properties. NOW THEREFORE the parties agree as follows: 1. Dedication. Subject to the terms and conditions contained in this Agreement, TIC agrees to convey the Property to City and City agrees to accept the Property from TIC. 2. Closing. 2.1 Closing of Transfer. The completion of the conveyance shall occur upon satisfaction of all the conditions to closing by delivery of the documents and instruments by the parties to each other as provided in Section 3. The closing shall occur if at all, on or before the earlier of (i) ten (10) business days after the conditions described in Section 3 have been satisfied or (ii) December 31, 1995, (the Closing Date). 2.2 Time is of the Essence. Time is of the essence as to every provision of this Agreement of which time is an element. If this transaction is not in a condition to close by the Closing 2 Date, then the parties shall continue to comply with this Agreement until a written demand or cancellation has been made by a party entitled to do so. 3. Conditions to Closing. The respective obligations of TIC and City to complete the transactions contemplated by this Agreement are subject to satisfaction of the following conditions at or prior to closing. 3.1 Conditions to TIC's Obligation to Complete the Conveyance. TIC's obligation to convey the Property to City is subject to satisfaction of the following conditions: a. Due Authorization. The execution and delivery of this Agreement by City and the performance of City's obligations under this Agreement has been duly authorized by the City Council of the City of Newport Beach and no further act or authorization is necessary on City's part for execution, delivery or performance of this Agreement. b. City's Non -default. City shall not be in default of any of its material obligations pursuant to this Agreement and no event has occurred which would constitute a material breach of City's representations or warranties contained in this Agreement. C. CIOSA Financing District. City shall provide TIC with a copy of a Resolution of the City Council of the City of 3 Newport Beach establishing a CIOSA Financing District pursuant to the provisions of Chapter 3.32 of the Newport Beach Municipal Code, and an opinion by counsel for the City that the District was formed in accordance with all relevant provisions of state and local law. d. Fair Share Fees. City has eertf=-e d'n wiciting, to shall pay TIC a sum equal to fifty percent (500) of the fair share fees paid by Developer upon the issuance of the first grading or building permit for the Property pursuant to the reimbursement provisions of CIOSA. e. Block 500. City has initia eel, and shall have algigi-evedepr±ate, approved amendments to the Planned Community Text for Block 500 in Newport Center for the purpose of establishing that the current parking supply for all uses within that Block satisfies the requirements of the Zoning Code of the City of Newport Beach. City shall has delivered to TIC a copy of the resolution of the City Council of the City of Newport Beach confirming initi ti& approval of the1.amendments. y shall, ; f the es , �—a�T�e�—��e--a�p�e�o=e•��reze �}L�� c�e��g dates deliver te-TIG a e^tifled eepy—ef the rese3idtren—eenziicfRing the ffiedi€ieatiens te the PC TeHt fer Bleek -590—teget-her with the text- ef t}e—affiendffi^tser de eisienwvied—een=irFas th the —exi s tinff eche—Gity of Newport Beaeh..— f. Cost Agreements. City and TIC hereby agree and shall have entered into written agreements with TIC to accomplish the following: 4 (i) BnSldri t -That TIC ^owe shall receive a Four Hundred Thousand Dollar $400,000 credit against the CIOSA advance which represents the cost of constructing Bayview Way as well as a commitment that the cost of Bayview Way extended will not be funded out of the proceeds of bonds issued pursuant to the CIOSA financing district; (ii) Ensui-ing That the cost of designing and constructing the E1 Paseo Drive storm drain systems shall be funded solely through bonds issued pursuant to the CIOSA Financing District. The El Paseo Drive Storm Drain begins at the northerly side of Coast Highway in Newport Center, proceeds through Irvine Terrace Park along El Paseo Drive and discharges into Newport Bay adjacent to the Bahia Corinthian Yacht Club parking lot. T -h -e written agr-eeftents shall l al s eemfflit tie City 4-=:e shall commence construction of the El Paseo Drive storm drain within 180 days after issuance of the first building permit for any TIC owned parcel on which development could result in an incremental increase in flows into the El Paseo Drive storm drain system. City eefftfflits 45�-e shall not deny building permits, grading permits, or other land use approvals on any TIC property the development of which is conditioned, or potentially impacted, in whole or in part, on or by the construction, or failure to construct, some or all of the improvements integral to the El Paseo Drive storm drain system. (iii) ming t -That City and Developer are solely responsible for satisfying all of the conditions to entitlement to development of the Property including conditions 5 imposed by the California Coastal Commission and other regulatory agencies. g. Use of Property. City shall have approved amendments to any appropriate ordinance, resolution, plan, or policy to accomplish the following: (i) Modify the provisions of the Planned Community Text for the Property to authorize the use of the Property as an automobile dealership or as otherwise permitted by this Agreement; (ii) Ennui -inn that Tie's nbl i g t i nnsa pursuant ite GIGGA inelevant te— he -ceperty —are filly satisfied die iffiplementatien of this Agro ffien Acknowledging that TIC has fully satisfied any and all of its obligations pursuant to CIOSA. or anv other agreement with respect to the Property; (iii) To exclude the Property from the CIOSA Financing District or related agreements to the extent necessary to implement this Agreement; h. Directional Sign. TIC shall have been granted all necessary rights to construct and maintain a directional sign as provided in Section 8.6 below. i. Restriction on Contiguous Parcels. City shall have previously acquired the Contiguous Parcels or shall otherwise have assured TIC that such Contiguous Parcels will be rester eted—b-y acquired subject to the Special Restrictions. City also C-1 acknowledges that it shall take title to the Property subject to the dee ^ at of -a "Special -r-Restrictions," (as defined in Section 4.1(b) below). j. Approval of Conditions. TIC shall have approved all conditions of approval imposed on the Property by the California Coastal Commission and other governmental authorities relating to development or use of the property. 3.2 Conditions to City Obligations. City's obligations to accept the conveyance of the Property are subject to satisfaction of the following conditions: a. Due Authorization. The execution and delivery of this Agreement by TIC and the performance of TIC's obligations under this Agreement have been approved by duly authorized representatives of TIC and no further act or authorization is necessary on TIC's part for the execution, delivery or performance of this Agreement. b. TIC's Non -default. TIC shall not be in default of any of its material obligations pursuant to this Agreement and no event has occurred which would constitute a material breach of TIC's representations or warranties contained in this Agreement. C. Delivery of Grant Deed. TIC shall have 7 delivered to City, and executed, a recordable grant deed to the Property in the form attached to this Agreement as Exhibit C (the "Grant Deed"). d. Inspection and Soil Test. City shall approve the physical condition of the Property as provided in this paragraph. Provided the City is not in breach of this Agreement, City shall be entitled to execute and deliver to TIC an entry permit in the ferffi attaehed te—this hgreeffient as Bmhibit B (the "Entry Permit") and thereafter, during the inspection period described in this paragraph, so long as the requirements of such Entry Permit are complied with, City or Developer, or their respective agents or subcontractors, shall be permitted to enter the Property at any reasonable time for the purpose of conducting customary soils, engineering, or hazardous materials tests and to inspect and survey the Property. City shall be deemed to have approved all soil and all other physical conditions pertaining to the Property unless it has delivered to TIC written notice of disapproval within 90 days after the date of this Agreement or 30 days prior to the Closing Date. Timely delivery of such notice of disapproval shall constitute failure of a condition to City's obligations under this Agreement and City shall be entitled to terminate this Agreement pursuant to paragraph 7.1 unless TIC and City agree in writing to mitigate or cure the conditions upon which the disapproval was based, provided, however, neither party shall be under any obligation or duty to undertake any mitigation or cure E:7 unless it has agreed to do so in writing. e. Title Approval. The City shall, as soon as reasonably practical, order a preliminary title report for the Property to be issued by First American Title Company or such other title company as is acceptable to both parties (the title company) . City shall promptly provide TIC with a copy of the preliminary title report. City shall have inspected and approved the condition of title to the new site. City shall be deemed to have approved the condition of title to the new site unless it has delivered to TIC written notice of disapproval within sixty (60) days after the date of the preliminary title report. If City has timely notified TIC of disapproval of any matter (other than liens for liquidated monetary amounts) then TIC may notify City within fifteen (15) days after delivery of City's notice of disapproval that TIC will cure such matter in which event this condition shall be deemed satisfied as to that matter. If TIC does not timely notify City that it will cure all matters disapproved by City then this condition to City's obligations shall fail and City shall be entitled to terminate this Agreement pursuant to Paragraph 7.1. Title to the Property to be conveyed to City upon closing shall be subject to the Special Restrictions, all matters described in the Grant Deed and all matters affecting title except (i) liens for liquidated monetary amounts which TIC shall be obligated to cure at closing; and (ii) those matters, if any, which TIC shall agree in writing to remove in response to any notice of disapproval which City has timely WO delivered to TIC. If TIC agrees to remove any matters effecting title to the Property it shall have until the Closing Date to do SO. f. Acquisition of Contiguous Land. City's intention to acquire the Property for transfer to Developer, for construction an automobile dealership, is contingent on the acquisition of contiguous land. City shall use its best efforts to negotiate acquisition of two (2) parcels adjacent to the Property (Contiguous Parcels - described in Exhibit A). Acquisition of the Contiguous Parcels shall be a condition to City's obligation to accept conveyance of the Property and failure of City to acquire Contiguous Parcels shall entitle City to terminate this Agreement pursuant to paragraph 7.1 provided, however, City's right to terminate is contingent upon written notification to TIC within five (5) days prior to the Closing Date that City has not acquired the Contiguous Parcels or the requisite interest therein. 4. Delivery. 4.1 Items to be Delivered by TIC. TIC shall deliver on or before 4:00 p.m. on the business day prior to the closing the following: a. Grant Deed to the Property. An original and fully executed and acknowledged Grant Deed conveying title to the Property to City in the form attached to this Agreement as 10 Exhibit C. City shall execute and acknowledge its acceptance of the Grant Deed and return the Grant Deed to TIC within three (3) business days after delivery of the executed copy to the City by TIC. b. Special Restrictions. A fully executed and original and acknowledged original of the "Declaration of Special Land Use Restrictions, Right ef=—riL-st Refids,"�and :�1-azea deeumencs in the fer-i att-aehed to this Agreeffient asBiEhrrbit -F (Special Restrictions). City shall execute and acknowledge the Special Restrictions and return the original documents to TIC within three (3) business days after delivery of the executed copy by TIC. C. Funds. Funds sufficient to pay any costs or prorations borne by TIC, if any, as provided in paragraphs 5.1 and 5.2 of this Agreement and funds sufficient to reimburse the costs paid by City, if any, required to be reimbursed pursuant to this Agreement. d. Other Documents. Such other documents or items as TIC is required to deliver at closing or as City shall reasonably request to carry out the agreement of the parties. 4.2 Items to be Delivered by City. City shall prepare, approve, execute and 11 deliver to TIC on or before 4:00 p.m. on the business day prior to closing the following: a. All documents described in subparagraphs 3 . 1 (c) (d) (e) (f) (g) and (h) to this Agreement. b. Such other documents or items the City is required to deliver at closing or as TIC may reasonably request to carry out the agreement of the parties. 5. Costs and Prorations. 5.1 Costs, Closing and Title Fees. City shall pay the documentary transfer taxes and the recording costs to record the Grant Deed conveying the Property. TIC shall pay the cost of recording the Special Restrictions. City shall pay all costs and expenses of any title insurance policy covering the Property, any endorsements to the policy of title insurance, and any surveys required to obtain the requested title insurance. In no event shall City's election to obtain title insurance coverage be a condition to, or cause of delaying the closing. TIC and City shall bear their own respective legal and accounting costs, if any. 5.2 Taxes and Assessments. All current property taxes and general and special bonds and assessments, if any, shall be prorated between TIC and the City as of closing based upon the latest available tax information attributable to the Property. TIC shall be entitled to 12 the proceeds of any refund for taxes and assessments paid prior to the closing. 4 6. Cancellation/ Termination. -76.1 City's Right to Terminate. In the event there is a failure of any of the conditions to City's obligations as set forth in paragraph 3.2, City may terminate this Agreement by giving written notice to TIC at any time prior to closing. Failure of City to terminate this Agreement prior to the closing shall be deemed a waiver by City of any condition which failed and if a condition required approval by City such failure shall be deemed an approval of the previously disapproved item. If City terminates this Agreement, City shall pay all title cancellation charges unless the failure of the condition was related to a breach by TIC in which event TIC shall pay the cancellation charges. 46.2 TIC's Right to Terminate. In the event there is a failure of any of the conditions to TIC's obligations as set forth in paragraph 3.1, TIC may terminate this Agreement by giving written notice to City at any time prior to the closing. Failure of TIC to terminate this Agreement prior to the closing shall be deemed a waiver by TIC of the condition which has failed, and if a condition required approval by TIC, such failure shall be deemed an approval of the previously disapproved items, provided, however, this does not 13 apply to the approval of plans, specifications or other matters relating to the improvement or the use of the Property, all of which shall continue to be subject to TIC' s review and approval pursuant to this Agreement and the Special Restrictions. If TIC terminates this Agreement as provided in this paragraph, then TIC shall pay all title cancellation charges unless the failure of such condition was related to a breach by the City in which event the City shall pay the cancellation charges. Notwithstanding any such waiver of a condition by TIC, if City accepts title to the Property, TIC shall be deemed to have complied with its obligations under CIOSA as to the Property. 8. Representations, Warranties and Obligations. In addition to all other representations, warranties and obligations made in this Agreement, each party represents and warrants to the other and acknowledges and agrees and follows: 8.1 No Violation. The execution, delivery, performance of and compliance with this Agreement has not resulted in, and will not result in, violation of, or conflict with, or the creation of any default under, any contract, agreement, law, resolution or plan. 8.2 No Litigation. There is no litigation or legal proceeding, arbitration or investigation pending or threatened which would effect the ability of either party to perform its 14 obligations pursuant to this Agreement. 8.3 Hazardous Materials. City acknowledges that the Property may have been farmed or used for agricultural purposes and fertilizers, pesticides, weed killers and other chemicals may have been used or placed upon the Property. Except as provided above, TIC warrants that as of the date of this Agreement, it has no actual knowledge of any use or storage of hazardous materials, hazardous substances or hazardous waste on the Property. Notwithstanding the foregoing, City will acquire the Property, if at all, "as is" in its present state and condition without any warranty by TIC relative to hazardous materials or substances or the physical suitability of the site for its intended use. The "actual knowledge of TIC" shall mean the actual knowledge, without any duty of inspection or investigation, of the corporate officers or employees employed as the date of this Agreement having responsibility for managing or selling the Property. 8.4 Cooperation Regarding Permits. TIC shall cooperate with City and any proposed transferee in the preparation, filing and processing of any document necessary to secure permits or land use entitlement required to construct any improvement on or adjacent to the Property or the use of the Property consistent with the Special Restrictions provided, however, TIC shall not be required to pay any money in conjunction with its duty to cooperate. City shall indemnify and hold TIC harmless from all 15 cost, expenses and liabilities arising out of any such permits or entitlement and all applications relating thereto, processed by City or Developer during the time that TIC owns the Property (irrespective of whether TIC executed any such permit, entitlement or application as owner of the Property). City shall obtain TIC's prior written approval of all conditions of approval imposed by the California Coastal Commission and other governmental entities prior to the time City acquires title, such approval to be obtained prior to the time City consents to, or finalizes any such conditions of approval. 8.5 Cooperation Regarding Contiguous Parcels. TIC shall cooperate with City, at no direct costs to TIC, and City's efforts to obtain ownership and/or constructive use of the Contiguous Parcels. In the event City is unable to directly obtain constructive use of the Property currently owned by TCA and adjacent to Jamboree, but the TCA does agree to reconvey the Property to TIC, TIC shall, in turn, convey the Property to City and City shall grant an easement to the TCA necessary to accommodate the proposed Jamboree Road flyover. City shall execute such documents as may be necessary so as to subject the Contiguous Parcels to the Special Restrictions. 8.6 Directional Sign. City shall use its best efforts to preserve the off-site directional sign currently located at the corner of Jamboree and Bristol. In the event the ultimate ES development of the Property precludes preservation of the off-site directional sign, City shall permit TIC to install a similar sign on any property owned or controlled by City that is not right-of- way dedicated for street and highway purposes subject only to a determination that the presence of the sign at that location will not constitute a hazard to persons or property. 9. General Provisions. 9.1 Assignment. City shall not assign its rights or interests under this Agreement to any person or entity other than Developer without TIC's express written consent which may be withheld in TIC's sole discretion. 9.2 Force Majeure. Each of the dates provided in this Agreement shall be deemed extended for, and throughout, such additional period or periods of time as performance is prevented or delayed due to strikes, lock -outs, material shortages, acts of God, injunction, or other matters reasonably beyond that party's control. 9.3 Further Documents. The parties agree to cooperate in good faith with one another and to execute and deliver documents, and otherwise perform, as may be reasonably necessary or appropriate to 17 complete the conveyance contemplated by this Agreement. If this Agreement is terminated for any reason, each party shall deliver to the other and without charge any and all documents which that party may have obtained or prepared with respect to the Property. City shall deliver to TIC, if requested and without charge, copies of any and all soils reports, plans and engineering studies, traffic studies and feasibility studies prepared by or on behalf of City or Developer which are in City's possession and which are not deemed confidential by Developer or the preparer. TIC shall not disclose, to any third party, the contents of any report, plan, or study prepared by or on behalf of Developer without Developer's written consent. 9.4 Waiver, Consent and Remedies. Either party may specifically and expressly waive, in writing, any requirement or breach of this Agreement, but that specific waiver shall not constitute further continuing waiver of any preceding or succeeding breach or failure to perform the same or other provision. 9.5 Attorneys Fees. In the event any declaratory or other legal or equitable action is instituted between TIC and the City in connection with this Agreement then, as between City and TIC, the prevailing party shall be entitled to recover all of its costs and expenses including court costs and reasonable attorneys' fees. W 9.6 Notices. Any notices, request, demand, consent or the communication required or permitted pursuant to this Agreement or by law shall be given in writing or delivered to an officer or duly authorized representative of the other party or by Untied States mail duly certified (return receipt requested), postage prepaid and addressed as follows: a. If to TIC: Tom Redwitz The Irvine Company 550 Newport Center Drive Newport Beach, CA 92663 Copy to: Newmeyer & Dillion 3501 Jamboree Road North Tower, 6th Floor Newport Beach, CA 92660 Attn: John E. Pope b. If to City: Kevin J. Murphy City Manager City of Newport Beach 3300 Newport Blvd. P.O. Box 1768 Newport Beach, CA 92658 Copy to: Robert H. Burnham City Attorney 19 9.7 No addition to or modification of any provision contained in this Agreement shall be effective unless fully set forth in writing and executed by City and TIC. Dated: Dated: Dated: APPROVED AS TO FORM: THE IRVINE COMPANY, a Michigan Corporation, P William F. McFarland, Executive Vice President, The Irvine Company BY: Chick C. Willette, President Irvine Land Management, a Division of The Irvine Company UZ M CITY OF NEWPORT BEACH Kevin J. Murphy, City Manager City of Newport Beach Robert H. Burnham City Attorney, City of Newport Beach wb\agr\dedicat1.agt 12-6-95 20