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Home My WebLink About20 Resolution SA-RDA 084Resolution No. SA-RDA084 STAFF REPORT SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF PALM DESERT ECONOMIC DEVELOPMENT MEETING DATE: April 22, 2021 PREPARED BY: Wayne Olson, Sr. Development Analyst REQUEST: Waive further reading, and adopt Resolution No. SA-RDA084, approving an extension to the Purchase and Sale Agreement (PSA) between the Successor Agency to the Palm Desert Redevelopment Agency (SARDA) and Desert Wave Ventures for Desert Willow Lot Pad “B” (14.65 acres, APN 620-420-023). Recommendation By Minute Motion, that the SARDA Board: 1. Waive further reading, and adopt Resolution No. SA-RDA084, approving a 180- day extension to the Purchase and Sale Agreement (PSA) between the Successor Agency to the Palm Desert Redevelopment Agency (SARDA) and Desert Wave Ventures for Desert Willow Lot Pad “B” (14.65 acres, APN 620-420-023). 2. Authorize staff to submit Resolution No. SA-RDA084 and additional materials to the PSA to the Countywide Oversight Board for approval of the 180-day extension at its May 20, 2021 meeting. Executive Summary The PSA between SARDA and the Developer, the Disposition and Development Agreement (DDA) by and between the City of Palm Desert and the Developer, and subsequent approved Operating Memorandas govern the Dsrt Surf project entitlement requirements and land closing dates. This staff report requests adoption of the Resolution referenced above which approves a First Amendment to the PSA extending the closing date by 180-days. Approval of the Resolution will also authorize staff to submit the necessary documents to the Countywide Oversight Board (OSB) at its May 20, 2021 meeting. Discussion On October 15, 2020, the SARDA Board authorized staff to negotiate an extension to the SARDA PSA with Desert Wave Ventures, LLC (Developer) which governs the disposition of one of three parcels that make up the Dsrt Surf project. The parcel owned by SARDA, “Lot Pad B” is controlled by a PSA referenced above, and as a result of authorized extensions by the Executive Director, now expires on August 16, 2021. After August 16, April 22, 2021 — Closed Session Staff Report Dsrt Surf Extension — Purchase Option and Sale Agreement Page 2 of 2 2021, all administrative options for extensions are exhausted and any extensions of the closing date must be authorized by both the SARDA Board and the OSB. The First Amendment was reviewed by SARDA Board in closed session earlier on tonighYs agenda and reported out at the beginning of the open session. The First Amendment extends the PSA beyond August 16, 2021 by 180-days. Normally, it would be ideal to time the renewal of the amended PSA with the DDA and additional entitlements and approvals that the project will require as a result of changes to the project in recent months. However, given the need to time local SARDA approvals with the 2021 OSB meeting calendar and keep the PSA current beyond the August 16, 2021 expiration, it is prudent to adopt the resolution referenced herein and seek approval from the OSB at its May meeting in 2021. Currently, the property is not regarded as surplus property since the parcel was under contract prior to December of 2020 and therefore does not meet the requirements of the Surplus Land Act (State of California Government Code Title 5, Div. 2, Part 1, Art. 8, sections 54220-54234). Therefore, staff is recommending the SARDA adopt the attached resolution and authorize staff to submit the required materials to the OSB for review at its May 20, 2021 meeting. Fiscal Analvsis Adoption of the resolution does not propose a change in the purchase price or terms of deposits ($2.05M which is Fair Market Value established by a professional appraisal). Therefore, there is no fiscal impact to SARDA. However, timing of the receipt of closing funds will be impacted as the First Amendment potentially delays receipt of closing proceeds by a minimum of 180 days past the current closing date of August 16, 2021. LEGAL REVIEW RH Robert W. Hargreaves City Attorney DEPT. REVIEW Marfi,w ALvcwez Martin Alvarez Director of Economic Development FINANCIAL REVIEW ��,��. �oa� Janet M. Moore Director of Finance ASSISTANT CITY MANAGER .�nd� �'iresYine Andy Firestine Assistant City Manager City Manager, L Todd Hileman: L. Todd it�I.CvuGiw �?;�C� 9�1�SAHOA J ��' Attachments: Resolution No SA-RDA084 L�N -�"� —�y�y—��/��'* Site Map — Lot Pad B y�RIFlED BY: // /-SJ , Original on file with Ciry Clerk's Office f��E S�°��, ri„k ,.�1'��r��'t��.��'s{��{'e, L�t�m��n�lJa� l��lly ��.lr°,E�; /��J��rF� -1- RESOLUTION NO. SA-RDA084 A RESOLUTION OF THE BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AUTHORIZING FIRST AMENDMENT TO THE PURCHASE OPTION AND SALE AGREEMENT BY AND BETWEEN THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY AND DESERT WAVE VENTURES, LLC FOR LOT PAD “B” WITHIN THE DESERT WILLOW RECREATION AREA (14.65 ACRES, APN 620-420-023) PURSUANT TO THE LONG RANGE PROPERTY MANAGEMENT PLAN AND TAKING RELATED ACTIONS RECITALS: A. Pursuant to AB X1 26 (enacted in June 2011) and the California Supreme Court’s decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Cal. 4th 231 (2011), the former Palm Desert Redevelopment Agency (the “Former Agency”) was dissolved as of February 1, 2012, the Successor Agency to the Palm Desert Redevelopment Agency (the “Successor Agency”), as the successor entity to the Former Agency, was constituted, and a board of the Successor Agency (the “Board”) was established. B. AB X1 26 added Part 1.8 (commencing with Section 34161) and Part 1.85 (commencing with Section 34170) to Division 24 of the California Health and Safety Code (“HSC”) (such Parts 1.8 and 1.85, including amendments and supplements enacted after AB X1 26, being referred to herein as the “Dissolution Act”). C. Pursuant to the Dissolution Act, the Successor Agency is tasked with winding down the affairs of the Former Agency. D. Pursuant to HSC Section 34175(b), all real properties of the Former Agency transferred to the control of the Successor Agency by operation of law. E. On May 5, 2014, the Oversight Board adopted Resolution No. OB-073, approving a Long-Range Property Management Plan (the “Original LRPMP”) which addresses the disposition of the real properties owned by the Successor Agency. F. On June 2, 2014, the State Department of Finance (the “DOF”) approved the Original LRPMP. G. On September 21, 2015, the Oversight Board approved an amendment to Original LRPMP (the “LRPMP Amendment”), H. On December 9, 2015, the DOF approved the LRPMP, as amended by the LRPMP Amendment (the “LRPMP”). I. Pursuant to HSC Section 34191.3, the DOF-approved LRPMP shall govern, and supersede all other provisions of the Dissolution Act relating to the disposition and use of the real property assets of the Former Agency. J. On August 15, 2018, the SARDA of City of Palm Desert and Desert Wave Ventures, LLC entered into a valid Purchase Option and Sale Agreement (the “Agreement”) K. The expiration of the Agreement was extended to August 16, 2021, through various additional actions authorized by the Agreement, and executed by the SARDA Executive Director. Resolution No. SA-RDA084 L. The SARDA Executive Director has exhausted any further administrative ability authorized by the Agreement to extend the closing date beyond August 16, 2021, and therefore additional extensions require review and approval by the Riverside County Oversight Board. M. In its meeting of April 22, 2021, the SARDA Board authorized the execution of First Amendment which provides for various extensions of the closing date and from time to time. N. An appraisal of the property was ordered from Capital Realty Analysts and received on May 16, 2018. The report places the current appraised value of the property at $2,050,000. O. The Board is adopting this Resolution to approve First Amendment and authorizes staff to supply the necessary materials for review by the Riverside County Oversight Board. P. Lot Pad “B” is not subject to the Surplus Lands Act (State Government Code Title 5, Division 2, Part 1, Article 8, Sections 54220-54234) because the Agreement was entered in to in August of 2018 which is prior to December of 2020, the cut off period for Surplus Land Act. NOW, THEREFORE, THE BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The above recitals, and each of them, are true and correct. Section 2. The Board hereby directs the execution of First Amendment to the Agreement which shall only be entered into by the Successor Agency after approval of the First Amendment by the Consolidated Countywide Oversight Board to the Successor Agency and the approval if required, or deemed approval, by the Department of Finance. Section 3. The members of this Board and the 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 the disposal of the subject property. Section 4. The First Amendment is subject to conforming and clarifying changes acceptable the Executive Director and SARDA Counsel, and the Executive Director is authorized to take such actions to implement the First Amendment. APPROVED and ADOPTED this ____ day of _________, 2021. AYES: NOES: ABSENT: ABSTAI N: _____________________________________ KATHLEEN KELLY, CHAIRPERSON ATTEST: _______________________________________ GLORIA SANCHEZ, SECRETARY PALM DESERT SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY TT N SS L KK D R OO LPINE LN E UNIVERSITY POINTE OO H P CT CC E H S DAISY LN PELE PL SINATRA DR FRANK SINATRA DR TD ON M K A O R OA D T N O T M E S K V K A A O A O LA O TO C R O P MERILL DR IRAGE DR M T R ND R S E LA D D E LU ERT S T CE OV C E RNE R N D L R C R I L C I H O G A CO L N DR A WDESERT VINGTON DR COVINGTO T ILLOW CT V S I TA CREST L DY CU R T CI S K O O C E R DG D RI S OW DE L L LL SE A WI RT F T WI E R LL S OW D E DR MUSTANG RIDGE DR CELAN MARKET PL CIR E R D WI S E LLOW R C N V IDGE A E S E A LE R NR G A T A T L R D E O E S T S E R E R D O T W A P I Z L N L ER T O O CI W COUNTRY CLUB DR COUNTRY CLUB DR VERDE WAY V DR E T R R VE D E R H E R S RI V D E W D K ST O RMO A S O A C S Y G O S L L LA PAZ LA ILLO LN N O A U DR CRUCES RI C L P SP LPINE LN UNIVERSITY PO INTE CT DAISY LN PELE PL SINATRA DR FRANK SINATRA DR MERILL DR E TAYLOR AVE B MARKET PL VERDE WAY COUNTRY CLUB DR COUNTRY CLUB DR LA PAZ DR Date: 2018 Lot Pad B APN 620-420-023 14.65 Acres I VICINITY MAP CELAN CIR VERDE WAY LA AVE SHEPHERD LN DESE COOK ST VISTA LAGO CIR N OAKMONT DR [This page has intentionally been left blank.] 81097.00000\33853702.1 - 1 - FIRST AMENDMENT TO REAL ESTATE OPTION AND PURCHASE AND SALE AGREEMENT AND JOINT ESCROW INSTRUCTIONS between THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY and DESERT WAVE VENTURES, LLC This First Amendment (“First Amendment”) to the Real Estate Option and Purchase and Sale Agreement and Joint Escrow Instructions (“Original Agreement”) between the Successor Agency to the Palm Desert Redevelopment Agency (“Seller”) and Desert Wave Ventures, LLC (“Buyer”), a Delaware limited liability company, is entered into this ___, of April 2021 (“New Effective Date”). The above parties may be individually referred to as “Party” and collectively as the “Parties.” RECITALS A. The Parties entered into that certain Original Agreement dated August 15, 2018 for Buyer’s purchase of real option property owned by Seller, consisting of approximately 14.65 acres located in the City of Palm Desert, County of Riverside, identified as APN 620-420-023, and more fully described on Exhibit A and depicted on Exhibit A-1 to the Original Agreement (the “Option Property”). Initially capitalized terms used, but not otherwise defined herein, shall have the meaning ascribed to such terms in the Original Agreement. B. The Parties agree that the Original Agreement initially expired on August 15, 2020, but that an administrative extension was granted for a period of seventy six (76) days, until August 16, 2021. The Parties now mutually wish to amend the Original Agreement to extend the term of Buyer’s option. AGREEMENT In consideration of the mutual obligations in this First Amendment and pursuant to the terms of the Original Agreement, the Parties mutually agree as follows: 1. Incorporation of Recitals. The Recitals of fact set forth above are true and correct and are incorporated into this First Amendment, in their entirety, by this reference. 2. Section 1.B. of the Original Agreement is amended to read as follows: B. Option Consideration. Failure to make any payment required by this section on or before the date specified shall cause this option to terminate. As used in this Agreement, the term “option consideration” includes consideration both for the initial option and for any extension term. The consideration for the initial term of the option shall be the deposit described in Section 2.B., below. If Buyer desires to extend the term as provided in Section 1.C., below, Buyer, prior to the expiration of the then current term, shall: (i) give written notice to Seller of Buyer’s election to extend, and (ii) deposit with Escrow Holder additional option consideration in the amount of fifty 81097.00000\33853702.1 - 2 - thousand dollars ($50,000.00). This deposit requirement shall apply to each extension requested by Buyer. If this Agreement is terminated pursuant to Section 6, below, regarding title matters, option consideration for the initial term of the option shall be refunded to Buyer. Otherwise, except as provided in Section 1, all option consideration shall be nonrefundable unless Seller defaults under this Agreement. The consideration for the initial option and option extensions is to be disbursed to Seller within forty-eight (48) hours of deposit thereof by Buyer. This Agreement constitutes irrevocable instructions to Escrow Holder that consideration for the initial option and option extensions is to be disbursed to Seller within forty-eight (48) hours of deposit thereof by Buyer. All option consideration (including for extensions) shall be applicable to the purchase price. 3. Section 1.C. of the Original Agreement is amended to read as follows: C. Option Term. The initial term of this option shall expire at 5:00 p.m. on February 11, 2022 (“Option Term”). So long as this option has not already expired, Buyer may extend the Option Term for up to three (3) 90-day periods, but only if Buyer timely gives notice of election to extend and deposits the additional option consideration pursuant to section 1.B. Any decision to grant or deny said extension will be subject to the sole discretion of the Seller. Each extension period shall expire at 5:00 p.m. on the ninetieth (90th) day following the grant of such extension, unless such day is not a Business Day, in which case the extension period shall expire on the next following day which is a Business Day. A Business Day shall mean Monday through Friday, except for holidays on which the Riverside County Recorder’s office is closed. In no event may the Option Term, as extended, terminate after the date of November 8, 2022. 4. Affirmation Regarding Absence of Defaults. Each Party hereby represents and warrants to the other Party that, as of the Effective Date of this First Amendment, the non- representing Party is not in material uncured default of the Original Agreement and that there have been no events that, with the passage of time, the giving of notice, or both, would constitute an event of default under the Original Agreement. Each Party understands that the foregoing representation and warranty constitutes material consideration to the other Party for the other Party's entry into this First Amendment. 6. Effect Upon Original Agreement. Except as expressly amended by this First Amendment, the Original Agreement remains in full force and effect, unmodified except as otherwise expressly herein provided. Wherever the term "Agreement" appears in the Original Agreement, it shall be read and understood to mean the Original Agreement as amended by this First Amendment. In the event of any direct conflict or inconsistency between the terms of the Original Agreement and this First Amendment, the terms of this First Amendment shall be controlling to the extent of such conflict or inconsistency. (SIGNATURES ON FOLLOWING PAGE) 81097.00000\33853702.1 - 3 - IN WITNESS WHEREOF, Buyer and Seller have executed this First Amendment to the Real Estate Option and Purchase and Sale Agreement and Joint Escrow Instructions on the dates indicated next to each of the signatures of their authorized representatives, as appear below. Date: BUYER: Desert Wave Ventures, LLC, a Delaware limited liability company By: FS Ventures, LLC, a Delaware corporation, its Manager Donald Rady, Managing Member Reviewed By: Marco Gonzalez, Counsel Date: SELLER: Successor Agency to the Palm Desert Redevelopment Agency By: L. Todd Hileman, Executive Director ATTEST: By: City Clerk APPROVED AS TO FORM: BEST BEST & KRIEGER, LLP By: Seth Merewitz, Successor Agency Counsel