HomeMy WebLinkAboutC-2402 - Fixing Fair Share Contribution regarding Hughes Aircraft ProjectCITY OF NEWPORT BEACH
P.O. BOX 1768, NEWP0RT BEACH, CA 93663 -3884
OFFICE OF THE CITY CLERK
(714) 640 -2251
T0: FINANCE DIRECTOR
FROM: CITY CLERK
DATE: July 11, 1983
i
SUBJECT: Contract No. C -2402
Description of Contract Agreement Fixing Fair Share Contribution
re Hughes Aircraft Project
Effective date of Contract June. 29, 1983
Authorized by Minute Action, approved on June 27, 1983
Contract with Hughes Aircraft Company
Address Solid State Products Division
500 Superior Avenue
Newport Beach, CA 92663
Amount of Contract See Agreement
4�"
Wanda E. Andersen
City Clerk
WEA:lr
attach,
3300 Newport Boulevard, Newport Beach
n
0
BY THE CM COUNCIL
CITY OF NEWPORT BEACH
OFFICE OF THE CITY ATTORNEY
JUN 271983
June 21, 1983
Agenda Item No. F-3(g)
To: Hon. Mayor & Members of the City Council
From: Robert H. Burnham - City Attorney
Re:
BACKGROUND
C- a►4oa.
xe ;13aglie
(m)
On August 24, 1981, the City Council approved a Traffic
Atudy and Use Permit authorizing the addition of 110,000 sq. ft.
of floor area to the Hughes Aircraft facility located on Superior
Avenue.
One of the conditions to the approval of the Traffic
Study required Hughes to contribute its fair share of the costs
to be incurred by the City in improving the intersections at
PCH /Superior, PCH /Prospect and PCH /Orange.
City staff has reviewed all appropriate data, discussed
the matter with representatives of Hughes, and have formulated an
agreement which establishes $300,000 as the amount of the fair
share contribution required of Hughes. A copy of the proposed
agreement is attached to this memorandum.
RECOMMENDATION
It is recommended that the City Council authorize the
Mayor and City Clerk to execute the agreement (Exhibit "A ") with
Hughes Aircraft Company, fixing their fair share contribution as
$300,000.
Rdbert H. Burn1'fam
RHB /pr
:'
_._.. ..... s.. .. .. ��. .:
Ya
ORIGINAL
AGREEMENT
THIS AGREEMENT, made this 29 day of TumE , 1983, by
and between the CITY OF NEWPORT BEACH, a Municipal Corporation
and Charter City (hereinafter "City "), and HUGHES AIRCRAFT
COMPANY, a Corporation of the State of Delaware and having its
principal place of business at 200 No. Sepulveda Blvd., E1
Segundo, California 90245, (hereinafter "Company ") is made with
reference to the following facts, the materiality and existence
of which is stipulated and agreed by and between the parties
hereto:
A. On or about May 1, 1981, Company applied to the
City for approval to construct a structure of approximately
110,000 sq. ft., to be built on the site of an existing facility,
with the new structure to house office and laboratory facilities
(hereinafter project);
B. Thereafter, the City determined that, prior to the
issuance of permits, certain approvals were required including:
1. The approval of a Use Permit to allow the
structure to exceed the basic height limits;
2. The approval of a traffic study conducted
pursuant to the traffic phasing ordinance of the City of Newport
Beach; and
3. The approval and certification of an environ-
mental document;
C. On or about July 9, 1981, the Planning Commission
of the City of Newport Beach approved the Use Permit, Traffic
Study and Environmental documentation, subject to certain condi-
tions which are more fully discussed below:
D. On or about August 24, 1981, the City Council of
the City of Newport Beach reviewed, and approved, the action of
the Planning Commission in authorizing construction of the pro-
ject subject to conditions of approval;
E. The conditions of approval of the project which are
relevant to this Agreement relate to certain traffic system im-
provements necessary to mitigate the adverse impact of the in-
crease in traffic that could be generated by employees of Company
that could occupy or use the new facilities. The conditions of
approval that relate to traffic system improvements require
Company to pay "its fair share" as determined by City to fund
necessary traffic system improvements. These improvements must
be completed prior to occupancy of the proposed structure, al-
though Company can occupy the project prior to completion if a
traffic management plan is implemented. The traffic system
improvements which are conditions of approval are the following:
1. Pacific Coast Highway & Superior;
2
0
0
2. Pacific Coast Highway & Prospect;
3. Pacific Coast Highway & Orange;
F. The parties, by this Agreement, wish to establish
the sum of money which will satisfy the "fair share" contribu-
tions required by conditions of approval to the project and pro-
vide for prompt payment of this sum. The desire of the parties
stems from a recognition that each will benefit by fixing the sum
at this time and by prompt payment. The benefits accruing to
both Company and City stem from the ability of City, if an im-
mediate contribution is made by Company, to utilize County funds
(appoximately $400,000) to defer expenses incurred in making the
intersection improvements thus, reducing the costs to both Com-
pany and City costs. The Company also benefits insofar as the
costs and expenses that may be incurred in the construction of
the required intersection improvements are likely to increase in
the future.
G. The parties recognize the certain inequities may
result from efforts to fix the contribution of Company prior to
the actual construction of the improvements, but each believes
that the benefits described above far outweigh the possibility
that the contribution established by this Agreement will not
accurately reflect the "fair share" of Company.
3
0
•
NOW, THEREFORE, the parties agree as follows:
Costs of Improvements
1. The parties agree that the City's share of the
current estimated costs of constructing the intersection improve-
ments required of Company is the sum of $1.7 million dollars.
This sum has the following components:
a) Superior /Pacific Coast Highway $1,400,000.
b) Orange /Pacific Coast Highway $150,000.
C) Prospect /Pacific Coast Highway $150,000.
The parties acknowledge that the estimated costs for
intersection improvements include expenditures for right -of -way
acquisition, actual construction, and all other costs and ex-
penses normally incurred in the construction of intersection
improvements. The parties also recognize that certain right -of-
way and construction costs associated with the improvement of the
Superior /Pacific Coast Highway intersection may be reduced by
virtue of the deducation of right -of -way, however, the estimated
costs of construction may in fact increase if right -of -way is not
dedicated and labor and material costs increase.
2. Calculation of Fair Share Contribution /Payment in
Full
The parties agree that a precise determination of
the "fair share" contribution by Company is impossible because
4
0 0
the extent to which other property owners may be required to
contribute to these intersection improvements is unknown at this
time and the precise costs to be incurred by City will fluctuate
i
according to the cost of the right -of -way, the cost of construc-
tion materials, and the cost of labor necessary to build the
improvements. In view of the difficulty in ascertaining the
precise amount which would constitute the "fair share" contribu-
tion, the parties have agreed that the sum of $300,000 con -
stitutes an amount which, given current information, constitutes
Company's fair share. This sum has been derived from information
relating to construction costs, contributions from other deve-
lopers, and the potential for increased traffic created by the
project.
City, in consideration of the payment of the sum
referenced above, will require no further contributions from
Company with respect to the project described above, this not-
withstanding the fact that the actual costs of those improvements
may exceed the estimates contained in this Agreement or that the
City may not receive contributions from other developers whose
projects will have an impact on the intersections described in
this Agreement.
5
0 0
3. Complilance With Other Conditions
The parties agree that, Company will remain
obligated to comply with the conditions of approval of the traf-
fic study and Use Permit No. 1994 which restrict occupancy of the
structure until the traffic intersection improvements described
in this Agreement are complete, or until a traffic management
plan is successfully implemented by Company.
Company may, however, apply for an amendment to Use
Permit No. 1994 to allow occupancy prior to completion of the
intersection improvements at Pacific Coast Highway /Orange and
Pacific Coast Highway /Prospect, in the event that Company can
demonstrate that, due to low staffing levels or other factors,
the traffic impact of the project was less than anticipated.
City does not, by this agreement, commit itself to approve any
amendment proposed by Company.
5. Current Project
The parties agree that the duties and obligations
imposed by this Agreement relate only to the project described in
this Agreement and in no way restrict or impair the ability of
the City to condition any future project which requires the ap-
proval of the City of Newport Beach.
3
' i •
6. Assignment
This Agreement shall be binding upon the assigns
and successors -in- interest of City and Company.
7. Entire Agreement
This Agreement constitutes the entire agreement of
the parties hereto and may be amended only by writing executed by
the party to be charged. Any promise, statement or representa-
tion made by the parties, or any representative, agent, employer
or officer thereof, not contained in this Agreement shall be of
no force and effect.
7
Executed the day and year first above written.
COMPANY:
HUGHES AIRCRAFT COMPANY
Solid State Products Division
By:
W. S. Walker
Division Manager
CITY:
THE CITY OF NEWPORT BEACH
By: AZ �4- '4 74
Eve y Har
Mayor
1'
APPROVED AS TO FORM:
"4wk� —
o ert H. Burnham
City Attorney
Im
i
;�.
..
FY. _ .a�.1. K.1.T: .. ..
t
ice.: � «. �.. il.
}
�r `�•.. «.
.� .�...L. .L
.�LS.��. � .. x. _ .._... .. ...... ......
---------- - - - -•, -- �i�J //,'004441
i HUGHES ; SOLID STATE PRODUCTS DIVISION
I I
RUOR[{ AIIIC I�AfT COMPANY
500 SUPERIOR AVENUE • NEWPORT BEACH, CALIFORNIA 92663 • 714.759 -2411 • TWX: 910596 -1374
June 29. 1983
Mr. Robert H. Burnham
City Attorney
City of Newport Beach
3300 Newport Blvd.,
Newport Beach, CA 92663
Dear Mr. Burnham:
Enclosed are duplicate originals of an Agreement between the City
of Newport Beach ( "City ") and Hughes Aircraft Company ( "Company ")
regarding the occupancy of a new structure on the Company's
Newport Beach property. This Agreement has been duly executed
on behalf of the Company by W. S. Walker, Division Manager.
Would you please have this Agreement executed on behalf of the
City and return one fully executed copy to us.
Also enclosed is the Company's check for $300,000 as payment in
full of the Company's obligation as set forth in the Agreement. You
are authorized to deposit this check as soon as the Agreement has
been fully executed by the City and one copy mailed to us.
We thank you very much for your kind assistance in bringing this
matter to a satisfactory conclusion and look forward to a long and
pleasant relationship with the City of Newport Beach.
Sincerely,
HUGHES AIRCRAFT COMPANY
Solid State Products Division
W. K. Weakland
Assistant Division Manager
Encl. Check $300,000
E Agreement