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HomeMy WebLinkAboutC-3732 - Traffic Cooperation Agreement (for Jamboree Road and Fairchild Road)TRAFFIC COOPERATION AGREEMENT THIS TRAFFIC COOPERATION AGREEMENT (this "Agreement") is made as of September I+ 2004 by and between the Scholle Corporation, a Nevada corporation ( "Scholle ") and the City of Newport Beach, California ( "Newport Beach') with respect to the following: RECITALS A. Scholle is the owner of certain real property located at the southeast corner of Jamboree Road and Fairchild Road more particularly described on Exhibit A attached hereto (the "Land"). B. Scholle desires to develop the Land and to construct thereon a mixed -use project which may contain, among other things, office, commercial and retail buildings not to exceed 486,500 square feet, together with parking facilities, driveways and drive aisles, walkways, covered walkways, tunnels, or other means of access to and through said project, and common areas and other improvements situated upon the Land (the "Project). C. The Project is located in the City of Irvine ( "Irvine ") within 1,000 feet of the border of Newport Beach. The City of Newport Beach ("Newport Beach ") has expressed concern that the Project, when developed, would have a negative impact on traffic flow in Newport Beach. D. Scholle has prepared traffic studies which, Scholle believes, indicate that the Project will not generate significant traffic impacts in either Irvine or Newport Beach. E. Notwithstanding their difference of opinion regarding the potential traffic impact of the Project, Scholle and Newport Beach have cooperated in good faith to arrive at a mutually acceptable agreement that addresses Newport Beach's traffic concerns and allows Scholle to develop the Land and construct the Project without further objection or legal challenge from Newport Beach. AGREEMENT NOW THEREFORE, in consideration of the foregoing, the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties hereto hereby agree as follows: 1. Scholle Contribution. Scholle shall contribute to Newport Beach's traffic and infrastructure fund an amount equal to Eighty -One Cents ($0.81) per rentable square foot of the Project up to a maximum contribution of Three Hundred Ninety -Six Thousand Dollars ($396,000.00) ( the "Contribution'). The Contribution shall be paid to Newport Beach from time to time within thirty (30) days after building permits are received for development of rentable space in the Project. As an example, within thirty (30) days after receipt of a permit to construct a building containing 50,000 rentable square feet, Scholle shall contribute $40,500 (50,000 x $0.81) to Newport Beach's traffic and infrastructure fund. Scholle shall continue to make such contributions until the Project is fully developed or the aggregate amount of the Contribution equals $396,000.00. Under no circumstances shall Scholle be required to contribute an amount in excess of 13179.03 9 f $396,000.00. Only the number of rentable square feet in the Project shall be used in the determination of the amount of the Contribution. Common areas, parking facilities, driveways and other common facilities in the Project shall not be included in the determination of the amount of any Contribution due at any time from Scholle. Replacement buildings shall not be subject to the Contribution. For example, if a building located on the Land as of the date of this Agreement contains 25,000 rentable square feet and is razed and replaced by a building containing 50,000 rentable square feet, the amount of the Contribution due (subject to the $396,000 cap) shall be $20,250 ($0.81 x 25,000). 2. Security for Contribution. To assure that sufficient funds shall be available from Scholle to pay the Contribution, Scholle shall, within thirty (30) days open an irrevocable stand- by letter of credit in the amount of Three Hundred Ninety -Six Thousand Dollars ($396,000.00), drawn upon a federally insured banking institution having assets in excess of One Hundred Million Dollars ($100,000,000.00) (the "Bank"), which letter of credit shall (i) name Newport Beach as the beneficiary, and (ii) contain instructions as set forth in Exhibit B attached hereto and made by this reference a part hereof for all purposes. Newport Beach may draw on the aforesaid letter of credit only by use of an affidavit in the form of Exhibit B -1 attached hereto and made by this reference a part hereof for all purposes (the "Draw Affidavit"). Newport Beach shall only draw on the letter of credit with respect to any Contribution payment owed by Scholle after Scholle has failed to pay a Contribution within thirty (30) days after the date when due. No later than thirty (30) days prior to the date the letter of credit is scheduled to expire, Scholle shall cause a substitute letter of credit having an expiration date that is at least six (6) months from the issuance date of the substitute letter of credit to be delivered to Newport Beach, which substitute letter of credit shall otherwise comply in all respects with the provisions of this Agreement. Upon Newport Beach's receipt of the substitute letter of credit complying with the foregoing requirements, the expiring letter of credit shall be returned to Scholle. The letter of credit provided for in this Section may be reduced as Contribution payments are made by Scholle or draws are approved by Newport Beach pursuant to this Section after default by Scholle. The letter of credit may be cancelled upon the earlier to occur of (a) the date $396,000.00 has been paid by Scholle to Newport Beach pursuant to the terms hereof or (b) the date Scholle certifies to Newport Beach that the Project is substantially complete and/or Scholle no longer intends to further develop the Project. If Scholle later commences further development of the Project, this Agreement and Scholle's obligation to pay the Contribution shall remain in effect. 1 No Other Payments. The Contribution shall be the only payments due from Scholle to Newport Beach related to development of the Land. Notwithstanding whether the traffic impacts from the Project are greater or less than Scholle or Newport Beach anticipate, Scholle's obligation to pay any amount to Newport Beach as a result of the development of the Land shall be fully satisfied by Scholle's compliance with its payment obligations under this Agreement. 4. Notice to Newport Beach. Scholle shall notify Newport Beach when application for any building permit to implement the Project is made to Irvine, and when any such building permit is issued by Irvine. This notification shall include plans showing the amount of rentable space authorized by the building permit. 5. Consent to Proiect. In return for Scholle's agreement to make the Contribution, Newport Beach agrees that it will not ever oppose the approval of the Project, or any aspect or 13179.03 2 • f phase thereof by Irvine or any agency thereof. In addition, Newport Beach will accept and will not challenge any CEQA determination or addendum to the 1992 Program EIR or other determinations made and certified to by Irvine regarding the Project. Newport Beach acknowledges and agrees that the Project will be developed over a period of years, and Newport Beach's agreements herein shall continue throughout the duration of such development and after completion of the Project. 6. Covenant Not to Sue: No Further Action. Newport Beach, on behalf of itself, its elected officials, officers and employees in their official capacity, boards, commissions, any other agency thereof, and any group claiming standing through such group's affiliation with Newport Beach, agrees and covenants that: (i) it will not file or prosecute any legal challenge to the Project, or provide financial assistance or aid in the prosecution of any administrative or judicial hearing or appeal, or any litigation, local legislation, local initiative, local referendum or local moratorium action (all of the foregoing actions described in this Paragraph 6 shall be collectively referred to herein as "Challenge ") filed by any person, organization, or agency against Scholle or the Project; and (ii) it will allow the Project to proceed through development. Newport Beach's agreements in this Agreement shall continue in full force and effect notwithstanding any future changes in CEQA, the 1992 Program EIR or any other law, regulation or ordinance related to the Land or the Project. Notwithstanding anything in this Section to the contrary, nothing in this Agreement shall prevent Newport Beach from providing documents in its possession that are required by law to be made available to third parties in response to formal requests for production of documents by Newport Beach pursuant to the Public Records Act, court order, or subpoena, including information that Newport Beach could otherwise be compelled to provide in the ordinary course of its business. Release. Newport Beach hereby waives, releases and forever discharges Scholle and its present and future officers, agents, consultants, contractors, invitees, licensees and employees from any and all rights, claims, demands, obligations, causes of action or liabilities related to or arising from any approval related to the Project, any CEQA determination, any addendum to the 1992 Program EIR and the development of the Project in accordance with the foregoing. This release, waiver and covenant not to sue includes any claims or causes of action for costs, expenses or attorney fees. Newport Beach expressly waives any rights or benefits available to it under the provisions of California Civil Code Section 1542, which provides: "A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." 8. Notices. All notices provided for or required by this Agreement will be in writing, signed by or on behalf of the party sending the notice, and delivered personally, by private messenger service, by overnight courier, or by United States mail, certified with return receipt requested. Notices will be deemed served at the time of personal delivery by private messenger or overnight courier service, or 72 hours after deposit in the United States mail within the State of California, postage prepaid, addressed to the party to whom such notice is sent as follows: If to Scholle, to: 13179.03 0 If to Newport Beach to: Scholle Corporation 19500 Jamboree Road Irvine, CA 92612 Attention: Martin Bell With a copy to: Dom -Platt Properties 344 N. Central Boulevard P.O. Box 1965 Glendale, CA 91203 -1965 Attention: Mark S. Knapp With a copy to: Thomas, Whitelaw & Tyler, LLP 18101 Von Kannan Avenue, Suite 230 Irvine, CA 92612 Attention: William S. Sanderson, Esq. City Manager City Of Newport Beach P. O Box 1768 Newport Beach, CA 92658 With a copy to: City Attorney City Of Newport Beach P. O Box 1768 Newport Beach, CA 92658 0 9. Entire Agreement. This Agreement constitutes the entire agreement among the parties pertaining to the subject matter hereof and all prior and contemporaneous agreements, representations and understandings, written or oral, express or implied, are hereby superseded and merged into this Assignment. 10. Partial Invalidity. Any provision of this Agreement which shall prove to be invalid, void, against public policy or illegal shall in no way affect, impair or invalidate any other provision hereof, and such other provisions shall remain in full force and effect, and shall be valid and enforced to the fullest extent permitted by law. 11. Governing Law: Venue. This Lease shall in all respects be governed by the laws of the State of California. Each party hereto hereby consents to the personal jurisdiction and venue of any California state court and any United States court located in the County of Orange, State of California and the service of process authorized by any such court; provided, however, that venue shall not be in the City of Newport Beach. 13179.03 4 9 0 12. Modification. This Agreement may not be modified except by a written document executed by the parties hereto. 13. Waiver of Jury Trial. Scholle and Newport Beach hereby waive trial by jury in any action, proceeding or counterclaim brought by either of the parties hereto against the other on any matters whatsoever arising out of or in any way connected with this Agreement. 14. Mediation. in the event. of any disagreement concerning the interpretation or implementation of this Agreement, the parties shall for a period of not less than thirty (30) days make good faith efforts to resolve their differences, which efforts may include utilizing the services of a professional mediator, with costs to be borne equally by the parties. 15. Authority. Each party and the persons and/or entities executing this Agreement on behalf of such party represent and warrant that: (a) such party has the full right, power and authority to enter into this Agreement and perform all of such party's obligations hereunder; (b) all proceedings required by, or on the part of, such party to authorize the execution, delivery and performance of this Agreement by such party have been duly and properly taken; (c) such persons and/or entities executing this Agreement are duly authorized to execute and deliver this Agreement on such party's behalf in accordance with such party's charter documents or other organizational documents, regulations or ordinances; and (d) this Agreement is binding upon such party in accordance with its terms. 16. Attorneys' Fees. In any litigation or other action arising herefrom between any of the parties hereto, the prevailing party shall be entitled to recover all costs incurred therein (including, without limitation, its actual appraisers', accountants', attorneys' and other professional fees and count costs). The term "prevailing party' means the party obtaining substantially the relief sought, whether by compromise, settlement or judgment. 17. Successors and Assigns. The terms, covenants and conditions contained herein shall be construed to run with the land and shall be binding upon and inure to the benefit of the parties hereto and their respective agents, heirs, executors, administrators, successors and assigns and successors -in- title, including, without limitation, any entities to which an interest in all or a portion of the Land may be transferred from time to time through one or more conveyances, assignments, ground leases or other instruments of transfer. 18. Counterpart s. This Agreement may be executed in one or more counterparts, each of which shall constitute an original and all of which shall be one and the same agreement. 19. Definitions. All references to Newport Beach or Irvine shall include all agencies, commissions, departments and officials thereof. [The next page is the signature page.] 13179.03 IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by their duly authorized representatives effective as of the day and year first above written. SCHOLLE CORPORATION, a Nevada corporation By: N�C�lll� l�dX�C Name: MCitdp'ly1 T 0 Title: �(k )Aq S t 6U, tL r� (r A� (2jDCAUI 5C A CITY OF NEWPORT BEACH, By: Name: TOD RID EWAY Title: MAYOR 13179.03 6 0 0 EXHIBIT "A" LEGAL DESCRIPTION OF THE LAND PARCEL A: PARCEL 2, IN THE CITY OF IRVINE, COUNTY OF ORANGE, STATE OF CALIFORNIA, AS SHOWN ON A PARCEL MAP FILED IN BOOK 47, PAGE 22 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF ORANGE COUNTY. CALIFORNIA. EXCEPT ALL OIL, OIL RIGHTS, MINERALS, MINERAL RIGHTS, NATURAL GAS RIGHTS, AND OTHER HYDROCARBONS BY WHATSOEVER NAME KNOWN THAT MAY BE WITHIN OR UNDER THE PARCEL OF LAND HEREINABOVE DESCRIBED, TOGETHER WITH THE PERPETUAL RIGHT OF DRILLING, MINING, EXPLORING AND OPERATING THEREFOR, AND STORING IN AND REMOVING THE SAME FROM SAID LAND OR ANY OTHER LAND, INCLUDING THE RIGHT TO WHIPSTOCK OR DIRECTIONALLY DRILL AND MINE FROM LANDS OTHER THAN THOSE HEREINABOVE DESCRIBED, OIL OR GAS WELLS, TUNNELS AND SHAFTS INTO, THROUGH OR ACROSS THE SUBSURFACE OF THE LAND HEREINABOVE DESCRIBED, AND TO BOTTOM SUCH WHIPSTOCKED OR DIRECTIONALLY DRILLED WELLS, TUNNELS AND SHAFTS UNDER AND BENEATH OR BEYOND THE EXTERIOR LIMITS THEREOF, AND TO REDRILL, RETUNNEL, EQUIP, MAINTAIN, REPAIR, DEEPEN AND OPERATE ANY SUCH WELLS OR MINES, WITHOUT, HOWEVER, THE RIGHT To DRILL, MINE, STORE, EXPLORE AND OPERATE THROUGH THE SURFACE OR THE UPPER FIVE HUNDRED (500) FEET OF THE SUBSURFACE OF THE LAND HEREINABOVE DESCRIBED, AS RESERVED BY IRVINE INDUSTRIAL COMPLEX, A CALIFORNIA CORPORATION IN DEED RECORDED JANUARY 31, 1977 IN BOOK 12052, PAGE 1304 OF OFFICIAL RECORDS. PARCEL B: AN EASEMENT FOR THE PURPOSES OF INGRESS AND EGRESS AND SANITARY SEWER OVER AND UNDER THAT PORTION OF BLOCK 50 OF IRVINE'S SUBDIVISION, SHOWN AS PARCEL NO. 1 ON A MAP FILED IN BOOK 22, PAGE 28 OF PARCEL MAPS, IN THE OFFICE OF THE COUNTY RECORDER OF SAID COUNTY, DESCRIBED AS FOLLOWS: COMMENCING AT THE MOST NORTHERLY CORNER OF PARCEL 1, AS SHOWN ON A MAP FILED IN BOOK 22, PAGE 28 OF PARCEL MAPS, RECORDS OF ORANGE COUNTY; THENCE SOUTH 490 21'34" EAST 120.00 FEET ALONG THE NORTHEAST LOT LINE OF SAID PARCEL 1 TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 40138'26" WEST 30.00 FEET; THENCE SOUTH 490 21'34" EAST 189.37 FEET TO A POINT ON THE EASTERLY LOT LINE OF SAID PARCEL 1; THENCE ALONG SAID LOT LINE NORTH 6° 59' 16" WEST 44.52 FEET TO THE NORPHEAST CORNER OF SAID PARCEL 1; THENCE NORTH 49° 21' 34" WEST 156.48 FEET ALONG THE NORTHEAST LOT LINE OF SAID PARCEL 1 TO THE TRUE POINT OF BEGINNING. 13179.03 - 7 ! • W41,111I111'3 To Be Included in Letter of Credit Drafts drawn under this Irrevocable Letter of Credit must be marked "Drawn under [Name of Bank . Letter of Credit No. dated , 2004" and indicate that it is being drawn pursuant to an affidavit from in the form attached hereto. The original of such affidavit shall be attached to said draft. [Name of Bank] shall not be required to look beyond such affidavit but shall honor such draft upon receipt. 13179.03 u STATE OF CALIFORNIA COUNTY OF ORANGE EXHIBIT B -1 Affidavit BEFORE ME, the undersigned authority, appeared who, after first being duly sworn did depose and say as follows: My name is I of the City of Newport Beach defined as "Newport Beach" under that certain Traffic Cooperation Agreement dated September _, 2004 ( "Agreement'), wherein Scholle Corporation ( "Scholle "), has certain payment obligations under the Agreement. Pursuant to such Agreement, Scholle has caused [Name of Bankl to issue to Newport Beach its Irrevocable Letter of Credit No. More than sixty (60) days before the date of this Affidavit Scholle was issued a building permit to construct a building on the Land (as defined in the Agreement) estimated to contain rentable square feet. Scholle has defaulted in its obligation to pay the Contribution in the amount of $0.81 per rentable square foot of said building, and such default has continued for at least thirty (30) days. rName of Bankl is hereby directed to deliver the funds due to Newport Beach as set forth in the certification attached hereto without any requirements of approval by Scholle or any other party. Executed the _ day of , 20_ CITY OF NEWPORT BEACH By: _ Name: Title: 13179.03 STATE OF CALIFORNIA COUNTY OF ORANGE On X D D' ,before me, ����c�, fcrV ©�1 , a Notary Public in and for said state, personally appeared personally known to me (or proved to me on the basis of satisfactory evidence) to be the person whose name is subscribed to the within instrument and acknowledged to me that he/she executed the same in his/iw authorized capacity, and that by his/her signature on the instrument, the person, or the entity upon behalf of which the person acted, executed the instrument. WITNESS my hand and official seal. Notary Public in and for said State (SEAL) JULIE KEWON Commtsslon #-1500949 61M Notary Pub0c • Cath mic Orange County y Comm. Expires Jul 11.2005 13179.03 10 STATE OF CALIFORNIA ) COUNTY OF ORANGE On Ute' W bf f t b TO , before me, Let 6l I. &DOVl , a Notary Public in and for said state, personally appeared TOM cO to me (or proved to me on the basis of satisfac ory the within instrument d acknowatuledged to me capacity, and that by is her signre on the Inst the person acted, executed the instrument. (SEAL) WITNESS my hand and official seal. personally known e) to be the person whose anAis subscribed to % e executed the same inis er authorized the person, or the entity upon behalf of which Notary Public in and for said State _s LEILANI I. BROW Commission # 1336673 Notary Public - California Orange County My Comm. Expires Jan 25, 2006 13179.03 10