HomeMy WebLinkAboutRes 2017-40 - T33837-1 - Terminate Day Care Dedication RESOLUTION NO. 2017-40
CITY OF PALM DESERT
CITY ATTORNEY
STAFF REPORT
REQUEST: Adopt Resolution No. 2017 - 40 - Terminating Day Care
Dedication Requirement in Implementation of Child Care Site
Settlement On Lot 14 of Tract 33837-1
SUBMITTED BY: Robert W. Hargreaves, City Attorney
DATE: May 25, 2017
CONTENTS: Resolution No. 2017 - 40
Settlement Agreement
Recommendation
Waive further reading and adopt Resolution No. 2017 - 40 - Terminating Day
Care Dedication on Lot 14, Tract 33837-1.
Background
In 2005 the City approved the Spanish Walk project. One of the conditions of
approval required the dedication of a two-acre site for a child care facility. The
dedication provided that if the day care facility was not developed in five years, the
parcel would revert to the apartment site.
When it became clear that the site would not be developed as a child care facility
within the five years' window, the City purchased the site from the original
developer for $100,000. In 2014 a subsequent owner of the adjacent apartment
site filed suit claiming it owned the day care site pursuant to a reversionary
interest.
The City settled the law suit in December 2016 by agreeing to relocate and reduce
the area of the day care site. (A copy of the settlement agreement is attached.)
The other parties agreed to reimburse the City for the diminution of the size of the
parcel in the amount of $48,958. In order to confirm title to the old daycare site in
the new owner, the City agreed to terminate and abandon the day care dedication.
Staff Report— Resolution to Terminate Day Care Dedication —Tract 33837-1
May 25, 2017
Page 2
On May 16, the Planning Commission approved the lot line adjustment to relocate
the child care site. The City Attorney has received deposits of the settlement
amount. The last official act to implement the settlement is the adoption of the
resolution terminating the day care dedication on the old day care site.
The City Attorney respectfully requests that the City Council adopt the Resolution
terminating the Day Care dedication.
SUBMI BY:
I
C
o e . H rgreaves
Oity_Attorney
APPROVAL:
Lauri Aylaian
City Manager
Attachments (as noted)
72500.00001\29794245.I
RESOLUTION NO. 2017 - 40
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF
PALM DESERT, CALIFORNIA, TERMINATING THE DAYCARE
DEDICATION ON LOT 14, OF TRACT 33837-1, AS SHOWN BY MAP
ON FILE IN BOOK 402 PAGES 4 THROUGH 8 OF MAPS, RECORDS
OF RIVERSIDE COUNTY, CALIFORNIA
WHEREAS, on December 8, 2005, the City adopted Resolution No. 05-105 of
the City Council of the City of Palm Desert (the "Resolution") for development of 79.6
acres of real property on Tract No. 33837-1.
WHEREAS, Item #14 of the Conditions for Approval of the Resolution required
that, among other things, up to two acres of Tract 33837-1 would be dedicated to the
City for use as a future day care facility, but that if the land dedicated for the daycare
facility "is not developed as a day care facility within five years of its dedication,
ownership shall revert to the apartment site for development thereon."
WHEREAS, on or about May 9, 2006, Tract Map 33837-1 was filed in the office
of the County Recorder of Riverside County, California E in Book 402, of Maps at Pages
4 through 8 inclusive 3. The Map included the following owner declaration ("Day Care
Dedication"):
"We hereby dedicate to the City of Palm Desert Lot 14 for day care
purposes as shown herein".
WHEREAS, Lot 14 was not developed as a daycare facility within five years of its
dedication.
WHEREAS, on or about November 2010, the City paid the Developer of
Tract 33837-1 $100,000.00 for the purchase of Lot 14.
WHEREAS, in 2014 a Subsequent Owner of the lot adjacent to Lot 14 filed suit
claiming it owned Lot 14 pursuant to a reversionary interest.
WHEREAS, The City, the Developer and the Subsequent Owner agreed to settle
all claims to Lot 14 by relocating and reducing the area of Lot 14 by a Lot Line
Adjustment and reimbursing the City a prorata share of the purchase price.
WHEREAS, in order to confirm title to the old Lot 14 in the Subsequent Owner,
the City agreed to terminate and abandon the day care dedication.
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of
Palm Desert, California, as follows:
RESOLUTION NO. 2017 - 40
Section 1. The Day Care Dedication on Lot 14 of Tract 33837-1 is hereby
forever terminated and abandoned.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the Palm Desert
City Council held on this day of , 20 , by the following vote, to wit:
AYES:
NOES:
ABSENT:
ABSTAIN:
JAN C. HARNIK, MAYOR
ATTEST:
RACHELLE D. KLASSEN, CITY CLERK
CITY OF PALM DESERT, CALIFORNIA
2
SETTLEMENT AGREEMENT
AND RELEASE OF CLAIMS
A. INTRODUCTION
. This Settlement Agreement and Release of Claims (the "Agreement") is dated
February 17, 2017, and made by and between the Plaintiff, WNRA PALM DESERT 103, LP
("WNRA"), and Defendants, The City of Palm Desert (the "City") and Emerald Brook, LLC
("Emerald"). The foregoing parties to this Agreement are hereinafter collectively referred to as
the "Settling Parties." The Settling Parties desire to enter into this Agreement in order to resolve
all claims and disputes between them related to this Action.
B. DEFINITIONS
As used in this Agreement, the following phrases and words have the following
meanings:
1. "Action" shall refer to the action pending in the Superior Court for the State of
California, County of Riverside, titled WNRA Palm Desert v. The City of Palm Desert et al.,
Case No. PSC 1400549.
2. "Claim" or"Claims" shall refer to any and all claims, demands, liabilities, losses,
damages, errors, obligations, suits, proceedings, complaints, cross-complaints, causes of action,
acts, omissions, liability, mistakes, breaches of contract, breaches of warranties, unfair business
practices, proceedings, injunctions, quiet title, specific performance, losses, settlements, fines,
penalties, awards, attorney's fees, expert's fees, conduct or damage of every kind and nature
whatsoever, whether in tort, contract or extra-contractual, at law or in equity, actual or
contingent, foreseen or unforeseen, known or unknown, suspected or unsuspected, past, present
or future.
3. "Lot 13" shall refer to that parcel of land identified as Lot 13 of Tract Map No.
33837-1 filed and recorded on May 9, 2006 in the office of the County Assessor/Clerk/Recorder
of the City of Palm Desert, California.
4. "Lot 14" shall refer to that parcel of land identified as Lot 14 in Tract Map No.
33837-1 filed and recorded on May 9, 2006 in the office of the County Assessor/Clerk/Recorder
of the City of Palm Desert, California.
5. "Related Persons and Entities" shall refer to the Settling Parties' past, present and
future parent companies, divisions, subsidiaries, affiliates, partnerships, limited liability
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partnerships,corporations, limited liability companies, business entities, members, owners.
stockholders, directors, officers, employees, lenders, mortgage holders, predecessors,
predecessors-in-interest, successors, successors-in-interest, assigns, partners,joint venturers,
legal representatives, agents, attorneys, experts, heirs, administrators, trusts, trustees,
beneficiaries, creditors, and assigns.
C. RECITALS
1. Whereas, on December 8, 2005, the City passed, approved, and adopted
Resolution No. 05-105 of the City Council of the City of Palm Desert (the "Resolution") for
development of 79.6 acres of real property on Tract No. 33837-1.
2. Whereas, the Resolution required that up to two acres of Tract 33837-1 would be
dedicated to the City for use as a future day care facility, but that if the land dedicated for the
daycare facility "is not developed as a day care facility within five years of its dedication,
ownership shall revert to the apartment site for development thereon."
3. Whereas, on or about May 9, 2006, Emerald dedicated Lot 14 to the City to be
used as the daycare facility. WNRA contends that Lot 14 was not developed as a daycare facility
within five years of its dedication.
4. Whereas, on or about September 5, 2006, WNRA's predecessor purchased the
apartment site adjacent to Lot 14, which is known as Lot 13.
5. Whereas, on or about November 2010, Emerald and the City entered into an
agreement whereby Emerald sold Lot 14 to the City and the City paid Emerald $100,000.00 for
its purchase (the "Purchase Price").
6. Whereas, WNRA contends that, as the owner of Lot 13, it is the owner of all
reversionary interests in Lot 14 from the City.
7. Whereas, Emerald contends that there is no reversionary interest in Lot 14 and
that, if there were a reversionary interest, it would revert to Emerald as the owner of Lot 14 at the
time of the dedication and the grantor of the alleged reversionary interest.
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8. Whereas, WNRA filed the Action in which it contends that it is entitled to, and is
the rightful owner of, Lot 14 and seeks, among other things, to quiet title to Lot 14, specific
performance, and a judicial declaration enforcing WNRA's reversion interest to Lot 14. Emerald
and the City have filed an answer disputing these contentions and denying any liability to
WNRA.
9. Whereas,the Settling Parties have participated in two mediation sessions and
engaged in settlement negotiations facilitated by the mediator Hon. James P. Gray (Ret.), ADR
Services, Inc., Irvine, California. As a result of these settlement negotiations, WNRA submitted
a revised site plan to the City for development of 150 units on a reconfigured Lot 13, with a
reconfigured Lot 14 to be owned by the City for its use as a daycare facility, and the City has
given conceptual approval to the revised site plan.
10. Whereas, the Settling Parties have now reached the Agreement herein, as a result
of the mediation and the following settlement negotiations facilitated by Judge Gray, who
recommends this settlement to all Settling Parties as being in their best interests and a reasonable
compromise of the disputed claims.
D. SETTLEMENT TERMS
1. Lot Line Adjustment. Within thirty(30) days of execution of the Agreement or
by a later date agreed upon by WNRA and the City, WNRA will formally submit a Lot Line
Adjustment to the City, substantially in conformance with Exhibit "A" to this Agreement. As
shown on Exhibit "A", WNRA will prepare a Lot Line Adjustment that creates Parcel 1 to be
owned by WNRA, and Parcel 2 to be owned by the City. Parcel 2 will consist of approximately
30,000 square feet to accommodate the City's requirements for a daycare facility. WNRA will
obtain a preliminary title report for Lots 13 and 14, and will prepare a plat showing the new lot
lines. The City will advise WNRA of any exhibits or other documents required to process the
Lot Line Adjustment. The Lot Line Adjustment documents shall include a recorded instrument
executed by the City terminating any day care use restrictions affecting lot 14. If the Lot Line
Adjustment is approved by the City, WNRA shall submit required documents to record the Lot
Line Adjustment with the County of Riverside. The Settling Parties will exchange all necessary
and appropriate transfer and perfecting deeds to transfer Lot 13 and 14 to WNRA, and Parcel 2
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to the City. Each party will transfer title to the other free of monetary liens (other than non-
delinquent taxes and assessments)."
2. Compensating Payment to the City: Prior to the recordation of the Lot Line
Adjustment and perfecting deeds creating Parcel 1 and Parcel 2, and as a precondition to the
City's approval of the Lot Line Adjustment, WNRA and Emerald shall make a compensating
payment to the City in an amount equal to the percentage by which Parcel 2 is smaller than the
current Lot 14, multiplied by $100,000 (the "Compensating Payment"). (For example, if Parcel
2 is 50 percent the size of Lot 14,the Compensating Payment would be$50,000 (equal to 50
percent of$100,000.) The Compensating Payment will be paid in equal shares by Emerald and
WNRA—each paying 50% of the Compensating Payment.
The Compensating Payment will be made payable to the Best Best& Krieger LLP Client
Trust Account within 14 days of execution of this Agreement and approval of the revised map to
determine the size of Parcel 2. The Compensating Payment shall be held in trust and not
distributed to the City until the Lot Line Adjustment has been approved and recorded.
3. Revised Site Plan For 150 Apartment Units: The City acknowledges that WNRA
plans to develop Parcel 1 as a single multifamily project and to increase the maximum density
allowed under current zoning to accommodate 150 apartment units, in accordance with the
Revised Site Plan attached hereto as Exhibit "B." The City has provided WNRA with a
preliminary conceptual approval of the Revised Site Plan, but this is subject to public comment
and other processes required by law. The City agrees that (a) it will work cooperatively with
WNRA and will consider in good faith, but does not precommit to approve, such future
development plan; and (b) it will not condition development approval on, or impose any future
requirement for, use or development of any portion of the combined site as a daycare facility.
4. Litigation Stay. Promptly upon the execution of this Agreement, the Settling
Parties shall file a notice of conditional settlement pursuant to Rule 3.1385(c) of the California
Rules of Court and shall cooperate in taking any and all additional actions necessary to obtain a
stay of the Action of sufficient duration to permit processing of the Lot Line Adjustment and the
Revised Site Plan.
5. Dismissals: Promptly upon recordation of the Lot Line Adjustment and
perfecting grant deeds creating Parcel 1, in favor of WNRA, and Parcel 2, in favor of the City,
WNRA shall file a dismissal of the Action with prejudice. In that event, all other Settling Parties
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shall dismiss any and all other complaints or cross-complaints related to this Action. If the City
does not approve the Lot Line Adjustment creating Parcel 1 and Parcel 2 and Revised Site Plan,
and at the election of WNRA, WNRA may notify the parties in writing that this Agreement is
terminated, and the Settling Parties may thereafter continue prosecuting and defending the
Action.
6. Releases: Effective upon recordation of the Lot Line Adjustment and perfecting
grant deeds as to Parcel 1 and Parcel 2, the Settling Parties, on their own behalf and on behalf of
their Related Persons and Entities, hereby fully and finally settle, release, acquit, and forever
discharge, in the broadest possible manner each Settling Party and each of their respective
Related Persons and Entities from and of any and all Claims in any way related to or arising out
of the Action or the current Lot 14. The Settling Parties do not release any future claim arising
out of the development of Parcel I.
7. Waiver of California Civil Code Section 1542: The Settling Parties acknowledge
and understand there is a risk that, subsequent to the execution of this Agreement, they may
accrue, obtain, incur, suffer or sustain Claims which in some conceivable way arise out of, are
caused by, are connected with, or relate to the Action which are unknown and unanticipated at
the time this Agreement is signed or which are not presently capable of being ascertained. The
Settling Parties further acknowledge that there is a risk that any Claims known or that should be
known with respect to the released matters may become more serious than they now expect or
anticipate. Nevertheless, the Settling Parties hereby expressly waive all rights they may have in
such unknown and unexpected consequences or results as to the matters released herein only.
The Settling Parties acknowledge that they have had the benefit of or opportunity to consult with
counsel, understand the provision of California Civil Code section 1542, and expressly waive the
provisions of Civil Code Section 1542, which provides as follows:
A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS
OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE,
WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY
AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.
It is acknowledged and understood by the Parties that the foregoing waiver of the
provisions of Section 1542 of the California Civil Code was separately bargained for. The
Settling Parties agree that this release shall be given full force and effect in accordance with each
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and all of the expressed terms and provisions including those terms and provisions relating to
unknown and unsuspected Claims to the same effect as those terms and provisions relating to
any other Claims hereinabove specified.
8. Parties' Warranty: Each of the Settling Parties warrants that it has standing and
authority to release the others from the respective Claims that are the subject of this Agreement.
The City warrants and represents that it is the record title holder of Lot 14 and has full authority
to enter into the Lot Line Adjustment as to Lot 14.
9. Enforceability: The Settling Parties hereby acknowledge, agree and stipulate that
each has the right to enforce any provision of this Agreement by filing any appropriate action,
proceeding, or motion, including without limitation, a motion pursuant to California Code of
Civil Procedure section 664.6, in the appropriate law and motion department of the County
where the Action is venued. The Settling Parties further acknowledge, agree and stipulate that
the Court in this Action shall retain jurisdiction to enforce this Agreement and enter judgment
pursuant to Code of Civil Procedure section 664.6. However, as an exception to the above, to
the extent WNRA contends that the City has violated Sections DI or D3 of this Agreement,
WNRA may move to enforce such section by filing a new action or writ in a court of competent
jurisdiction.
10. Cooperation: The Settling Parties shall execute and deliver any document which
is reasonably necessary to achieve the goals and purposes of this Agreement.
11. Legal Capacity: Each of the undersigned warrants that he or she is of legal age,
legally competent to execute this Agreement, and has the authority of the party for whom the
undersigned is executing this Agreement.
12. Benefit of Counsel: Each of the Settling Parties warrant that it/they/he/she has
read the entire Agreement, understands it and has received independent legal advice from
counsel to the extent it/they/he/she considers it warranted as to the advisability of executing this
Agreement and with respect to all matters contained herein.
13. Investigation: Each of the undersigned acknowledges that the party for whom the
undersigned is executing this Agreement has made such investigation of the facts pertaining to
the settlement and this Agreement and all matters pertaining hereto as it/they/he/she deems
necessary and enters into this Agreement with full knowledge of those facts.
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14. No Admission of Liability: It is agreed and understood that Settling Parties deny
all allegations of wrongdoing and have agreed to resolve this matter solely for the purpose of
compromising and settling matters in dispute. Such compromise and settlement does not
constitute an admission by any party of the truth or validity of matters in controversy, nor shall it
be construed as such.
15. Parties to Bear Their Own Costs: Except as otherwise provided in this Agreement
or in prior indemnity agreements between the City and Emerald, each party shall bear, as
between them, their own costs, attorney's fees and other expenses incurred in connection with
the Action.
16. Modification: This Agreement may only be amended and/or modified in writing
and only after unanimous written consent by all Settling Parties.
17. Successors and Assigns: This Agreement shall be binding upon and inure to the
benefit of the Settling Parties and their respective successors and assigns.
18. Complete Defense: This Agreement may be asserted as a complete defense to
any Claim that may be brought relating to any released Claim as set forth above.
19. Joint Product: This Agreement is the product of bargained for, arms-length
negotiations between the Settling Parties and their counsel in good faith and without collusion,
and shall not be construed for or against any Settling Party or its representatives.
20. California Law: This Agreement shall be construed according to the laws of the
State of California.
21. Severability: If any provision of this Agreement is held to be invalid or
unenforceable, all of the remaining provisions shall nevertheless continue in full force and effect,
to the extent that this Agreement still contains the Payment provision, the Lot Line Adjustment,
and the releases.
22. Counter Parts: This Agreement may be executed in one or more counter parts and
when said counter parts are taken together, shall constitute one original Agreement. Scanned,
facsimile, and photocopy signatures shall be deemed originals, and shall bind the parties
accordingly.
23. Integration Clause: The Agreement, including all exhibits attached hereto,
constitutes the entire understanding between and among the Settling Parties with regard to the
matters herein set forth. There are no representations, warranties, agreements,arrangements,
WNRA—PALM DESERT SETTLEMENT
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•
understandings,oral or written,between or among the parties hereto relating to the subject matter
of this Agreement which are not fully expressed herein. This Agreement shall be interpreted
according to its own terms,as defined in this Agreement,or otherwise according to their
ordinary meaning,without any parole evidence. This is an integrated Agreement.
IN WITNESS WHEREOF,THE UNDERSIGNED HEREBY ACKNOWLEDGE
THEY HAVE READ,UNDERSTAND AND AGREE TO THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT,AND HAVE AUTHORITY TO
EXECUTE THIS AGREEMENT AS INDIVIDUALS,OR AS PROPER OFFICERS OR
DULY AUTHORIZED REPRESENTATIVES FOR THE ENTITIES ON WHOSE
BEHALF THEY ARE SIGNING.
Dated: 421)/I/ WNRA PALM DESERT 103, LP
Sy: wSs 43 Nbn000 .=Nva�H%.NTS,
Ay GA 4.IFatwaA c.40t 7<A►TIo
By: ll
R 1S i tota
Its: PROS %Dfar
Dated: THE CITY OF PALM DESERT
By:
Its:
Dated: EMERALD BROOK, LLC
By:
Its:
WNRA-PALM DESERT SETTLEMENT
P:IDOCSIWNRA.Palm Desert 103 LLC\Settlement\Scttlement Final.docx
understandings, oral or written, between or among the parties hereto relating to the subject matter
of this Agreement which are not fully expressed herein. This Agreement shall be interpreted
according to its own terms,as defined in this Agreement,or otherwise according to their
ordinary meaning, without any parole evidence. This is an integrated Agreement.
IN WITNESS WHEREOF,THE UNDERSIGNED HEREBY ACKNOWLEDGE
THEY HAVE READ,UNDERSTAND AND AGREE TO THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT,AND HAVE AUTHORITY TO
EXECUTE THIS AGREEMENT AS INDIVIDUALS,OR AS PROPER OFFICERS OR
DULY AUTHORIZED REPRESENTATIVES FOR THE ENTITIES ON WHOSE
BEHALF THEY ARE SIGNING.
Dated: WNRA PALM DESERT 103, LP
By:
Its:
Dated: 6, 11 ,zoI T THE CITY OF PALM DESERT
By: r c �--
Its:
Dated: EMERALD BROOK, LLC
By:
Its:
WNRA—PALM DESERT SETTLEMENT
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understandings.oral or written,between or among the panics hereto relating to the subject matter
of this Agreement which arc not fully expressed herein. This Agreement shall be interpreted
according to its own terms, as defined in this Agreement,or otherwise according to their
ordinary meaning, without any parole evidence. This is an integrated Agreement.
IN WITNESS WHEREOF,THE UNDERSIGNED HEREBY ACKNOWLEDGE
THEY HAVE READ,UNDERSTAND AND AGREE TO THE TERMS AND
CONDITIONS SET FORTH IN THIS AGREEMENT,AND HAVE AUTHORITY TO
EXECUTE THIS AGREEMENT AS INDIVIDUALS,OR AS PROPER OFFICERS OR
DULY AUTHORIZED REPRESENTATIVES FOR THE ENTITIES ON WHOSE
BEHALF THEY ARE SIGNING.
Dated: _ WNRA PALM DESERT 103,LI'
By:
Its:
Dated: THE CITY OF PALM DESERT
By:
Its:
Dated: 3 1-7(1'1 EMERALD BROOK, LLC
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Exhibit "A"
Revised Map
WNRA—PALM DESERT SETTLEMENT
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