HomeMy WebLinkAboutResolution SA-RDA 079 Termination-Settlement-Release Agmt - MVPDC, LLCSTAFF REPORT
SUCCESSOR AGENCY TO THE
PALM DESERT REDEVELOPMENT AGENCY
MEETING DATE: February 13, 2020
SUBMITTED BY: Andy Firestine, Assistant City Manager
REQUEST: APPROVE A TERMINATION AND SETTLEMENT/RELEASE
AGREEMENT BETWEEN THE SUCCESSOR AGENCY TO THE
PALM DESERT REDEVELOPMENT AGENCY AND MISSION
VALLEY PROPERTIES DEVELOPMENT CALIFORNIA, LLC
Recommendation
By Minute Motion, adopt Resolution to:
1. Adopt Resolution No. sa-Rna •n�q approving a Termination and
SettlemenURelease Agreemerit Between the Successor Agency to the Palm
Desert Redevelopment Agency ("SARDA") and Mission Valley Properties
Development California, LLC ("MVP").
Executive Summary
At its meeting on December 12, 2019, the Board of SARDA provided direction to staff and legal
counsel to commence the termination of negotiations with MVP for the purchase of vacant
property owned by the Successor Agency and located in the City consisting of approximately 128
acres (Assessor's Parcel Nos: 694-300-001, 694-300-002, 694-300-005, 694-300-014, 694-300-
015, 694-310-002, 694-310-003, and 694-310-006) (the "Property"). Accordingly, staff and legal
counsel prepared a Termination and SettlemenURelease Agreement to terminate the proceedings
to sell the Property to MVP (the "AgreemenY'). MVP has executed the Agreement. The
Agreement will not become effective until SARDA approves and executes the Agreement, the
Countywide Oversight Board for the County of Riverside (the "Oversight Board") adopts a
resolution approving the Agreement, and the California Department of Finance (the "DOF")
approves the Agreement or fails to request review of the Agreement in the time allowed by law,
or timely requests review but fails to take action in the time allowed by law.
Background
The Property is located north of Frank Sinatra Drive, south of Gerald Ford Drive, and west of
Portola Avenue. The Property transferred to SARDA by operation of law upon the dissolution of
the former Redevelopment Agency, and SARDA must sell the Properry pursuant to its Long
Range Property Management Plan, as amended (the "LRPMP").
Pursuant to the LRPMP, in August of 2018, SARDA made available to the potential bidders a bid
package that included various documents such as a development summary (collectively, the "Bid
Documents"). An appraisal of the Property prepared by Capital Realty Analysts placed the
appraised value of the Property at $7,135,000.
February 13, 2020
Approve Termination Agreement 128 Ac. MVP
Page 2 of 2
Sealed bids for the Property were opened in September, 2018 and the highest bid was received
from MVP in the amount of $7,135,000 (the "Purchase Bid"). Pursuant to the Bid Documents,
MVP's Purchase Bid constituted an irrevocable offer for 90 calendar days after the public opening
of the bids, and a purchase and sale agreement was to be entered into between SARDA and
MVP following approval by the Board of SARDA, the Oversight Board, and the DOF.
In October, 2018, the Board of SARDA accepted MVP's Purchase Bid and directed staff to
negotiate a purchase and sale agreement with MVP. In November, 2018, the Oversight Board
authorized SARDA to execute the purchase and sale agreement.
Pursuant to the Bid Documents, MVP deposited with the City a cashier's check in the amount of
$214,110 as a guarantee that MVP would execute a purchase and sale agreement, but the check
subsequently expired and has since been destroyed (the "Deposit"). A dispute has arisen
between SARDA and MVP regarding the timing and terms and conditions of the proposed
purchase and sale agreement, the nature of the development on the Property proposed by MVP,
and the disposition of the Deposit pursuant to the Bid Documents. The Agreement provides for
the resolution of the dispute by terminating the proceedings for the sale of the Property to MVP
pursuant to the Bid Documents. This will avoid the cost and expense of potential litigation and
will allow SARDA to commence new proceedings to sell the Property pursuant to the LRPMP.
Fiscal Analvsis
The Property is required to be disposed of according to the LRPMP for its appraised value. The
LRPMP requires that proceeds of the sale be distributed as property taxes to the affected taxing
entities, in accordance with the terms of the California Health and Safety Code. Each taxing
entity, including the City of Palm Desert, will receive a portion of the proceeds based on their
respective tax rates.
APPLICANT: Mission Valley Properties Development California, LLC
3875 Hopyard Road, Suite 180
Pleasanton, California, 94588
ATTACHMENTS: Termination and Settlement Release Agreement
Resolution No. sa-xDA o79
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TERMINATION AND SETTLEMENT/RELEASE AGREEMENT
THIS TERMINATION AND SETTLEMENT/RELEASE AGREEMENT (this
"AgreemenY') is entered into by and between the SUCCESSOR AGENCY TO THE PALM
DESERT REDEVELOPMENT AGENCY (the "Successor Agency") and MISSION VALLEY
PROPERTIES DEVELOPMENT CALIFORNIA, LLC ("MVP").
RECITALS:
A. The Palm Desert Redevelopment Agency ("Former Agency") was formed pursuant to the
Community Redevelopment Law (California Health and Safety Code Section 33000 et
sey.) (the "CRL").
B. The California state legislature enacted Assembly Bill 1 X 26, as modified ( the
"Dissolution Act"), to dissolve redevelopment agencies formed under the CRL.
C. Pursuant to the Dissolution Act, on February 1, 2012, the Successor Agency, a separate
legal entity, was formed to, among other things, dispose of the properties of the
dissolved Former Agency which transferred to the Successor Agency by operation of law.
D. The Successor Agency prepared a Long Range Property Management Plan, as
amended ("LRPMP"), which was approved by the Successor Agency's local
oversight board and the California Department of Finance (the "DOF"), and which
governs the disposition of properties of the Former Agency by the Successor Agency.
E. Under the LRPMP, the Successor Agency i� authorized to sell the following real property
for its appraised value (collectively, the "Property"): The property located in the City of
Palm Desert, County of Riverside identified as Assessor's Parcel Nos: 694-300-001, 694-
300-002, 694-300-005, 694-300-014, 694-300-015, 694-310-002, 694-310-003, and 694-
310-006. The Property is vacant and consists of approximately 128 acres.
F. Pursuant to the LRPMP, in August of 2018, the Successor Agency made available to the
potential bidders that certain bid package entitled "Successor Agency to the Palm Desert
Redevelopment Agency, Department of Public Works, Contract Documents For 128 Acre
Parcel Vacant Land, South of Gerald Ford Drive, North of Frank Sinatra Drive and West
of Portola Avenue," dated August 2, 2018, which included the following: (i) Notice
Inviting Bids, (ii) Instructions to Bidders, (iii) Purchase Bid, (iv) Noncollusion
Declaration, (v) Right of Entry, (vi) Development Summary, and (vii) any and all
addenda and amendments thereto (collectively, the "Bid Documents").
G. An appraisal of the Property was prepared by Capital Realty Analysts and received by the
Successor Agency on May 16, 2018 (the "Appraisal"). The Appraisal placed the
appraised value of the Property at $7,135,000.
H. Sealed bids for the Property were opened on September 27, 2018. The highest bid
received by the Successor Agency was in the amount of $7,135,000 (the "Purchase Bid")
and was received from MVP.
Pagc 1 of 6
1?R 12-(HlOI\2371248�2.doc
I. Pursuant to the Bid Documents, MVP's Purchase Bid constituted an irrevocable offer for
90 calendar days after the public opening of the bids, and a purchase and sale agreement
was to be entered into between the Successor Agency and MVP following approval by
the Board of the Successor Agency, the Countywide Oversight Board for the County of
Riverside (which replaced the Successor Agency's local oversight board) (the "Oversight
Board"), and the DOF.
Pursuant to its Resolution No. SA-RDA-074, adopted on October 11, 2018, the Board of
the Successor Agency accepted MVP's Purchase Bid and directed Succes5or Agency
staff to negotiate a purchase and sale agreement with MVP.
K. Pursuant to its Resolution No. 2018-016, adopted on November 1, 2018, the Oversight
Board approved the conveyance of the Property to MVP and authorized the authorized
officers of the Successor Agency to execute the purchase and sale agreement
substantially in the form attached to the Resolution and to take related actions.
L. Pursuant to the Bid Documents, MVP deposited with the City of Palm Desert on behalf
of the Successor Agency a cashier's check in the amount of $214,110 as a guarantee that
MVP would execute a purchase and sale agreement, but the check subsequently expired
and has since been destroyed (the "Deposit").
M. A dispute has arisen between the Successor Agency and MVP regarding the timing and
terms and conditions of the proposed purchase and sale agreement, the nature of the
development on the Property proposed by MVP, and the disposition of the Deposit
pursuant to the Bid Documents (collectively, the "Dispute").
N. The Successor Agency and MVP desire to resolve the Dispute by terminating the
proceedings for the sale of the Property to MVP pursuant to the Bid Documents, which
will avoid the cost and expense of potential litigation and will allow the Successor
Agency to commence new proceedings to sell the Property pursuant to the LRPMP.
O. The Successor Agency and MVP have agreed to enter into this Agreement to terminate
the Bid Documents and the proceedings for the sale of the Property to MVP pursuant to
the Bid Documents on the terms and subject to the conditions hereinafter set forth.
AGREEMENT:
NOW, THEREFORE, in consideration of the foregoing and the mutual promises,
covenants and releases set forth, the sufficiency of which the parties hereto acknowledge, the
parties hereto agree as follows:
l. Effective Date of this Agreement. This effective date of this Agreement (the
"Effective Date") shall be the date that all of the following have occurred: (i) this Agreement has
been duly approved by the Board of the Successor Agency and executed by an authorized officer
of the Successor Agency, (ii) this Agreement has been duly approved by MVP and executed by
authorized officers of MVP, (iii) this Agreement has been duly approved by the Oversight Board
by resoiution, and (iv) the resolution of the Oversight Board has been approved by the DOF, or
the DOF has failed to request review of the Oversight Board resolution in the timc allowed
Page 2 of 6
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pursuant to the Dissolution Act or has timely requested review but failed to take action on the
Oversight Board resolution in the time allowed by the Dissolution Act. The Successor Agency
shall notify MVP in writing of the date upon which all of the foregoing have occurred and this
date shall constitute the Effective Date. This Agreement shall be of no force and effect until and
after the Effective Date.
2. Covenants, Warranties and Representations of MVP and the Successor A�ency.
A. MVP covenants, warrants and represents to the Successor Agency that as of the
Effective Date of this Agreement, MVP has not and will not have �led any lawsuit or other
action against the Successor Agency or the City of Palm Desert (the "City") in any state or
federal court relating in any way to the Dispute, has not and will not have presented any claim
under California Government Code Section 810, et seq. relating in any way to the Dispute, and
has not and will not have filed any lien against the Property.
B. The Successor Agency covenants, warrants and represents to MVP that as of the
Effective Date of this Agreement, the Successor Agency has not and will not have filed any
lawsuit or other action against MVP in any state or federal court relating in any way to the
Dispute.
3. Termination of Bid Documents and Proceedin�s to Sell the Property to MVP
purtivant to the Bid Documents; Disposition of the Deposit. To fully resolve any and all claims
relating to the Dispute, the parties agree that as of the Effective Date of this Agreement (i) the
Bid Documents shall terminate and be of no further force and effect, (ii) the proceedings to sell
the Property to MVP pursuant to the Bid Documents shall be deemed terminated, and (iii) the
Successor Agency shall have no claim to the Deposit.
4. Compromise and Settlement of Dispute. The Successor Agency and MVP agree
that all claims, demands, contentions, allegations, actions, causes of action proceedings,
obligations, liabilities, damages, losses, costs, and expenses of any nature whatsoever related to
the Dispute which are contained or alleged, or which could have been raised or alleged, in
connection with the Dispute, are to be compromised and settled without any admission of
liability or concession by any party that the contentions of the other party are correct. Upon the
Effective Date of this Agreement, the Successor Agency and MVP shall have no further
obligation to each other in connection with the Dispute, including any obligation of the
Successor Agency to sell the Property to MVP pursuant to the Bid Documents or any obligation
of MVP to purchase the Property pursuant to the Bid Documents.
5. Release and Dischar�e.
A. In consideration of the mutually dependent promises and representations set forth
in this Agreement, and except for the obligations created pursuant to this Agreement, the
Succe�sor Agency hereby fully releases and forever discharges MVP and its respective
successors, assigns, employees, agents, representatives, officers, directors, managers,
contractors, attorneys, and all persons acting in concert with MVP from and against any and all
claims, demands, actions, causes of action, proceedings, obligations, liabilities, damages, losses,
costs, and expenses of any nature whatsoever, in law or in equity, known or unknown, foreseen
Pagc 3 of 6
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or unforeseen, contingent or non-contingent, that the Successor Agency now has based upon or
in any way arising out of or in connection with the Dispute that occurred, or are alleged to have
occurred, at any time prior to the Effective Date of this Agreement.
B. In consideration of the mutually dependent promises and representations set forth
in this Agreement, and except for the obligations created pursuant to this Agreement, MVP
hereby fully releases and forever discharges the Successor Agency and the City and their
respective successors, assigns, employees, agents, representatives, officers, directors, manager5,
contractors, attorneys, and all persons acting in concert with them from and against any and all
claims, demands, actions, causes of action, proceedings, obligations, liabilities, damages, losses,
costs, and expenses of any nature whatsoever, in law or in equity, known or unknown, foreseen
or unforeseen, contingent or non-contingent, that MVP now has based upon or in any way
arising out of or in connection with the Dispute that occurred, or are alleged to have occurred, at
any time prior to the Effective Date of this Agreement.
C. The Successor Agency and MVP recognize that the reteases set forth above shall
extend to claims whether known or unknown to them and that the releases are made with the
understanding that they shali include unknown claims contemplated by Civil Code § 1542, which
provides as follows:
"A general release does not extend to claims that the creditor or releasing party does not
know or suspect to exist in his or her favor at the time of executing the release and that, if known
by him or her, would have materially affected his or her settlement with the debtor or released
pa�y „
Successor Agency Initial Here MVP Initial Here
D. The comprise and settlement of the Dispute and the releases and discharges as set
forth in this Section shall be binding upon and inure to the beneiit of the Successor Agency, City,
and MVP, and their respective employees, agents, attorneys, successors, devises, executors,
administrators, assigns, and insurance carriers.
THE PROVISIONS OF THIS SECTION SHALL NOT TERMINATE OR EXPIRE AND
SHALL BE (�IVEN THE BROADEST POSSIBLE INTERPRETATION.
6. Entire Agreement. This Agreement is the entire agreement between the parties
hereto with respect to the subject matter hereof and supersedes all prior and contemporaneous
oral and written agreement and discussion.
7. Severabilitv. If any court of competent jurisdiction determines any provision of
this Agreement to be invalid, illegal or unenforceable, that provision shall be deemed severed
from the rest, which shall remain in full force and effect as though the invalid, illegal or
unenforceable provision had never been a part hereof.
8. Modifications. No provision of this Agreement may be changed, discharged,
supplemented, terminated or waived except in a writing signed by the parties hereto.
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9. Successors and Assi�. This Agreement shall be binding upon, and inure to the
benefit of, the parties and their respective successors and assigns.
10. Third Party BeneficiarX. The City is a third party beneficiary under this
Agreement.
1 1. Governin� Law; Jurisdiction. The terms and conditions of, and the rights and
obligations Under, this Agreement shall be construed and enforced in accordance with, and
governed by, the local laws of the State of California. MVP hereby submits to the jurisdiction of
the Superior Court of the State of California in Riverside County and agrees that any dispute
regarding the interpretation or enforcement of, or any other matter relating to, this Agreement
shall be determined in and by �uch court.
12. Time of Essence. Time is of the essence of each provision hereof in which time is
a factor.
13. Le ag 1 Representation and Construction. The Successor Agency and MVP each
acknowledges that it has been represented by counsel, or has had counsel available to it,
throughout the pendency of the negotiations of this Agreement. The Successor Agency and
MVP further agree that this Agreement is the product of arms-length negotiations between them,
and that this Agreement is executed voluntarily by each of them without being subjected to any
duress or undue influence. The Successor Agency and MVP further agree that they are to be
considered mutual authors of this Agreement.
14. Authority to Execute. Each individual executing this Agreement represents and
warrants that it is duly authorized to execute this Agreement and that it is binding in accordance
with its terms. The Successor Agency and MVP each warcants that it is the true holder of all
rights and remedies which it purports to release, and that it has not assigned or transferred any of
those rights or remedies to any other individuals and/or entities.
15. Execution. This Agreement may be executed in counterparts which, when taken
together, shall constitute one original agreement. An electronic or facsimile signature shall be
deemed the same as, and valid as if it were, an original signature.
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I ?81'_-00O I 1�371248v2.doc
IN WITNESS WHEREOF, the Successor Agency and MVP have executed this
Agreement as of the Effective Date.
SUCCESSOR AGENCY:
Successor Agency to the Palm Desert
Redevelopment Agency:
MVP:
Mission Valley Properties Development
California, LLC:
By:
Print Name:
Title: Executive Director
By:
Print Name:
Title:
By:
Print Name:
Title:
ATTEST:
Rachelle D. Klassen, Secretary
APPROVED AS TO FORM:
By:
Print Name:
Title: Successor Agency Special Counsel
APPROVED AS TO FORM:
By:
Print Name:
Title: Attorneys for MVP
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RESOLUTION NO. SA-RDA n�9
A RESOLUTION OF THE BOARD OF DIRECTORS OF THE
SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT
AGENCY APPROVING A TERMINATION AND SETTLEMENT/RELEASE
AGREEMENT BETWEEN THE SUCCESSOR AGENCY AND MISSION
VALLEY PROPERTIES DEVELOPMENT CALIFORNIA, LLC
RECITALS:
A. The Palm Desert Redevelopment Agency ("Former Agency") was formed
pursuant to the Community Redevelopment Law (California Health and Safety Code
Section 33000 et seq.) (the "CRL");
B. The California state legislature enacted Assembly Bill 1 X 26, as modified
(the "Dissolution Act"), to dissolve redevelopment agencies formed under the CRL;
C. Pursuant to the Dissolution Act, on February 1, 2012, the Successor
Agency, a separate legal entity, was formed to, among other things, dispose of the
properties of the dissolved Former Agency which transferred to the Successor Agency by
operation of law;
D. The Successor Agency prepared a Long Range Property Management
Plan, as amended ("LRPMP"), which was approved by the Successor Agency's local
oversight board and the California Department of Finance (the "DOF"), and which governs
the disposition of properties of the Former Agency by the Successor Agency;
E. Under the LRPMP, the Successor Agency is authorized to sell the following
real property for its appraised value (collectively, the "Property"): The property located in
the City of Palm Desert, County of Riverside identified as Assessor's Parcel Nos: 694-
300-001, 694-300-002, 694-300-005, 694-300-014, 694-300-015, 694-310-002, 694-310-
003, and 694-310-006. The Property is vacant and consists of approximately 128 acres;
F. Pursuant to the LRPMP, in August of 2018, the Successor Agency made
available to the potential bidders that certain bid package entitled "Successor Agency to
the Palm Desert Redevelopment Agency, Department of Public Works, Contract
Documents For 128 Acre Parcel Vacant Land, South of Gerald Ford Drive, North of Frank
Sinatra Drive and West of Portola Avenue," dated August 2, 2018, which included the
following: (i) Notice Inviting Bids, (ii) Instructions to Bidders, (iii) Purchase Bid, (iv)
Noncollusion Declaration, (v) Right of Entry, (vi) Development Summary, and (vii) any
and all addenda and amendments thereto (collectively, the "Bid Documents");
G. An appraisal of the Property was prepared by Capital Realty Analysts and
received by the Successor Agency on May 16, 2018 (the "Appraisal"). The Appraisal
placed the appraised value of the Property at $7,135,000;
H. Sealed bids for the Property were opened on September 27, 2018. The
highest bid received by the Successor Agency was in the amount of $7,135,000 (the
"Purchase Bid") and was received from Mission Valley Properties Development
California, LLC ("MVP");
I. Pursuant to the Bid Documents, MVP's Purchase Bid constituted an
irrevocable offer for 90 calendar days after the public opening of the bids, and a purchase
and sale agreement was to be entered into between the Successor Agency and MVP
following approval by the Board of the Successor Agency, the Countywide Oversight
Board for the County of Riverside (which replaced the Successor Agency's local oversight
board) (the "Oversight Board"), and the DOF;
J. Pursuant to its Resolution No. SA-RDA-074, adopted on October 11, 2018,
the Board of the Successor Agency accepted MVP's Purchase Bid and directed
Successor Agency staff to negotiate a purchase and sale agreement with MVP;
K. Pursuant to its Resolution No. 2018-016, adopted on November 1, 201$,
the Oversight Board approved the conveyance of the Property to MVP and authorized the
authorized officers of the Successor Agency to execute the purchase and sale agreement
substantially in the form attached to the Resolution and to take related actions;
L. Pursuant to the Bid Documents, MVP deposited with the City of Palm
Desert on behalf of the Successor Agency a cashier's check in the amount of $214,110
as a guarantee that MVP would execute a purchase and sale agreement, but the check
subsequently expired and has since been destroyed (the "DeposiY');
M. A dispute has arisen between the Successor Agency and MVP regarding
the timing and terms and conditions of the proposed purchase and sale agreement, the
nature of the development on the Property proposed by MVP, and the disposition of the
Deposit pursuant to the Bid Documents (collectively, the "Dispute");
N. The Successor Agency and MVP desire to resolve the Dispute by
terminating the proceedings for the sale of the Property to MVP pursuant to the Bid
Documents, which will avoid the cost and expense of potential litigation and will allow the
Successor Agency to commence new proceedings to sell the Property pursuant to the
LRPMP; and
O. The Successor Agency and MVP desire to enter into the Termination and
Settlement/Release Agreement, attached to this Resolution as Exhibit "A", to terminate
the Bid Documents and the proceedings for the sale of the Property to MVP pursuant to
the Bid Documents on the terms and subject to the conditions set forth in the Termination
and Settlement/Release Agreement;
NOW, THEREFORE, THE BOARD OF DIRECTORS OF THE SUCCESSOR
AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY HEREBY FINDS,
DETERMINES, RESOLVES, AND ORDERS AS FOLLOWS:
Section 1. The above recitals are true and correct and a substantive part of this
Resolution.
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Section 2. The Termination and SettlementJRelease Agreement, in the form
attached hereto as Exhibit "A" and incorporated herein by reference, is hereby approved.
The Executive Director of the Successor Agency is hereby authorized to execute and
deliver, for and in the name of the Successor Agency, the Termination and
SettlemenVRelease Agreement in substantially such form, with such non-substantive
changes therein as the Executive Director may approve (such approval to be
conclusively evidenced by the execution and delivery thereof).
Section 3. The Oversight Board is hereby requested to approve the Successor
Agency's execution and delivery of the Termination and SettlemenURelease Agreement
in substantially the form attached hereto as Exhibit "A."
Section 4. The officers and staff of the Successor Agency are hereby
authorized, jointly and severally, to do all things which they may deem necessary or
proper to effectuate the purposes of this Resolution, and any such actions previously
taken are hereby ratified and confirmed.
Section 5. The Successor Agency Secretary shall certify to the passage and
adoption of this resolution and the same shall take effect and be in force.
Section 6. The Secretary of the Successor Agency is hereby directed to
transmit this Resolution to the Oversight Board.
PASSED, APPROVED AND ADOPTED this day of , 2020.
AYES:
NOES:
ABSENT:
ABSTAIN:
CHAIR
APPROVED:
SECRETARY
SUCCESSOR AGENCY TO THE
PALM DESERT REDEVELOPMENT AGENCY
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EXHIBIT A
TERMINATION AND SETTLEMENT/RELEASE AGREEMENT
G.���:��, 128 Acre Property
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