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HomeMy WebLinkAboutThe Gardens on El Paseo - 3rd Addendum to Easmnt AgmtCITY OF PALM DESERT ECONOMIC DEVELOPMENT DEPARTMENT STAFF REPORT REQUEST: REQUEST FOR APPROVAL OF ADDENDUM TO EASEMENT AGREEMENT BETWEEN THE CITY OF PALM DESERT AND THE GARDENS ON EL PASEO LLC SUBMITTED BY: Ruth Ann Moore, Economic Development Manager DATE: December 10, 2015 CONTENTS: Third Addendum To Easement Agreement Map of Gardens Parking Structure Photo Examples of Proposed Charging and Display Area Recommendation: By Minute Motion: 1) Approve the Third Addendum To Easement Agreement between the City of Palm Desert and The Gardens on El Paseo LLC; 2) Authorize the City Attorney to make non-sustentative changes to all documents; and, 3) By Minute Motion: Authorize the Mayor to execute any and all documents. Executive Summary: Taubman Company, owners of The Gardens on El Paseo have opened a 2,615 square foot Tesla retail concept store as a dedicated showroom that includes a Tesla automobile, various displays and a lounge for customers. The new Tesla retail concept store is located on the first floor at the front of The Gardens in the former Cole Hahn location. On December 1, 2015, The Planning Commission approved a Conditional Use Permit (CUP) for The Gardens on El Paseo allowing the sale of Tesla brand automobiles within the showroom and for the installation of six (6) parking stalls on the lower level of the parking structure for the purposes of electric vehicle charging and the outdoor display of four (4) Tesla models. See attached site plan of The Gardens parking structure that locates the display on the northern most wall of the garage and indicated in red on the plan. Approval of the above recommendations allows for the exclusive use of the six parking stalls by Tesla to create the charging stations and display area as shown in the attached photo examples. Tesla will use four (4) of the stalls for display of vehicles that can be test driven by Staff Report Third Addendum To Easement Agreement — The Gardens/Tesla December 10, 2015 Page 2 of 3 interested customers. The two (2) remaining stalls will be left open to allow the public use of the charging stations. Background: In April 15, 1999, the former Palm Desert Redevelopment Agency received an Easement Agreement over the parking structure at The Gardens on El Paseo creating pubic parking for the shopping center and district for contributing financially to the construction of the parking structure. The agreement has been amended twice. The first addendum was in January of 2004 to create a storage area for the Courtesy Carts that are operated by the City. The second addendum was in June of 2008 allowing for the removal of parking spaces to expand Saks Fifth Avenue. The expansion did not occur. With the dissolution of the Redevelopment Agency and the creation of SARDA, the Long Range Property Management Plan (LRPMP) was submitted to the Department of Finance and approved on June 4, 2014. Within the LRPMP, is a list of easements to be transferred to the City. In a separate action to occur at the December 10, 2015 joint meeting, staff is requesting that this easement be transferred to the City so that it can be amended to include the changes to charging stations and display of Tesla automobiles within the parking facility. With the approval of the CUP by the Planning Commission, the above action by the City Council is the final step to allow for the display of vehicles and the charging station. Discussion: The Tesla retail concept store is a compatible use within the El Paseo shopping district. Unlike other auto dealerships, the purchasing of Tesla models is done via an order and the purchaser's vehicle is custom built off -site and delivered to the purchaser. Therefore, Tesla has developed a retail -type setting that allows Tesla to familiarize customers with their product and to provide them an educational and informative experience. No vehicles are sold and taken directly from the site thus eliminating the need for a field of new automotive parking. As a high -end, specialized auto -maker, Tesla will operate the same as other retail establishments within The Gardens keeping similar store hours and open seven days per week. The Addendum To Easement Agreement will allow for a display area within the parking structure for six (6) charging stations. Four (4) of the stations will house cars to be used for test drives by interested customers. The remaining two (2) charging stations will be available for use by the public free of charge while shopping/dining at The Gardens. As a condition of the CUP all test drives will be conducting on commercial streets and highways rather than surrounding residential neighborhoods. Should Tesla not renew its lease, the developer is required to return the charging station area to its original use as public parking. G:\Econ Development\Martin Alvarez\SA Property Sales\The Gardens Easement\12-10-15 Addendum to Easement Agreement -The Gardens. docx Staff Report Third Addendum To Easement Agreement — The Gardens/Tesla December 10, 2015 Page 3 of 3 Envision Palm Desert Strategic Plan: Approval of the above action falls within the following priority within the Economic Development portion of the City's Strategic Plan: • Priority 1 — Expand job and business creation opportunities Action Step 3 — Attract businesses that generate additional revenue for city programs (Transient Occupancy Tax and retail sales tax) Fiscal Analysis: The proposed Addendum To Easement Agreement has no cost and will increase retail sales tax to the General Fund. Depending on sales within the retail concept store, Tesla could become a significant sales tax generator for Palm Desert. SubwAted by: uth Knn Moo e Economic Development Manager Jv n M. Wohlmuth C' y Manager/Executive Director Department Head: Martin Alvarez Director of Economic Development Rudy Ac sta Assistant City Manager G:\Econ Development\Martin Alvarez\SA Property Sales\The Gardens Easement\12-10-15 Addendum to Easement Agreement -The Gardens.docx RECORDING REQUESTED BY AND WHEN RECORDED RETURN TO: Successor Agency to the Palm Desert Redevelopment Agency 73 -5 10 Fred Waring Drive Palm Desert, California 92260 Attn: City Clerk's Office [This instrument is exempt from Documentary Transfer Tax pursuant to Revenue and Taxation Code Section 11922 and is exempt from Recorder's Fees pursuant to Government Code Sections 6103 and 27383] THIRD ADDENDUM TO EASEMENT AGREEMENT This Third Addendum to Easement Agreement (this "Third Addendum") is made and entered into as of the day of 2015, by and between the CITY OF PALM DESERT, a California charter city ("City"), and THE GARDENS ON EL PASEO LLC, a Delaware limited liability company (the "Developer"). RECITALS WHEREAS, Developer is the owner of that certain real property (the "Property"), located in the City of Palm Desert, California and more completely described in Exhibit "A" attached hereto and hereby made a part hereof; and WHEREAS, Developer's predecessor in interest developed a shopping center which included, among other features, a parking structure (the "Shopping Center") upon the Property; and WHEREAS, Developer's predecessor in interest and the Palm Desert Redevelopment Agency ("Agency") previously entered into that certain Easement Agreement dated as of April 15, 1999 (the "Agreement") by which Developer's predecessor granted to Agency a nonexclusive easement (defined and described in the Agreement as the "Easement") for public parking purposes over the parking structure (defined and described in the Agreement as the "Parking Areas") described on Exhibit "B"; and WHEREAS, Developer's predecessor in interest and Agency previously entered into that certain Addendum to Easement Agreement dated as of January 8, 2004 (the "Addendum") by which Developer's predecessor granted to Agency an expansion of the Easement to permit Agency to construct and operate a vehicle storage facility on a portion of the Parking Areas to serve the City of Palm Desert's El Paseo Courtesy Shuttle Program; and 72500.00000\21191705.2 WHEREAS, Developer's successor in interest and Agency also previously entered into that certain Second Easement Agreement dated as of June 26, 2008 (the "Second Addendum") whereby the City approved Developer's successor's expansion of the existing Saks Fifth Avenue Building at the Shopping Center and permitted Developer's successor to modify the Parking Areas. Included within such approvals was the approval, execution and recording of that certain Development Agreement by and between the City of Palm Desert and Gardens SPE II, LLC; and WHEREAS, on December 15, 2015, the Successor Agency to the Palm Desert Redevelopment Agency (as the successor -in -interest to the Agency) conveyed to the City pursuant to a Quitclaim Deed, and the City accepted from SARDA, the terms and conditions of the original Easement Agreement and all addenda thereto; and WHEREAS, Developer anticipates leasing space to an automobile designer and manufacturer ("Tenant") and desires, by this Third Addendum, to designate six (6) parking spaces in the Parking Areas for Tenant's use ("Designated Parking Spaces"); and WHEREAS, City hereby agrees to and accepts Developer's modifications to the Parking Areas and Easement as heretofore described under and pursuant to the terms hereof. NOW, THEREFORE, in consideration of the foregoing, the covenants and promises as set forth herein, and other good and valuable consideration, Developer and City agree as follows: 1. Exhibits and Recitals. All exhibits and recitals referenced herein are incorporated into this Third Addendum as though set forth in full. 2. Definitions. All capitalized terms not otherwise defined herein shall have the meanings ascribed thereto in the Agreement. 3. Easement/Designated Parking_ Spaces. City agrees and Developer hereby amends and modifies the Agreement and the Easement granted therein to City by hereby designating the Designated Parking Spaces for the Term (as defined below) for Tenant's use, subject to Developer's approval and conditions. The Designated Parking Spaces shall be located as shown on Exhibit "C". 4. Term. The term of use for the Designated Parking Spaces shall commence on the date of the recordation of this Third Addendum and shall expire on the earlier of (a) the end of the term of the Easement created under the Agreement, (b) the date upon which Tenant no longer leases or occupies a space at the Shopping Center, or (c) the date upon which City and Developer agree to modify or terminate this Third Addendum. 5. Relocation of Designated Parking Spaces. Developer shall have the right to relocate the Designated Parking Spaces to another part of the Parking Areas in accordance with the following: 72500.00000\21191705.2 (a) Developer shall give City at least sixty (60) days' written notice of Developer's intention to relocate the Designated Parking Spaces. (b) The Parties shall immediately execute an amendment to this Addendum stating the relocation of the Designated Parking Spaces. 6. Maintenance. Developer shall at all times maintain, or cause to maintain, in good order, first class condition, cleanliness, and repair, any improvements made by Developer pursuant to this Addendum, including, without limiting the generality of the foregoing, the Designated Parking Spaces, all signage, electrical facilities, and equipment within the Designated Parking Spaces. 7. Indemnification. Developer shall indemnify and hold harmless City, and City's officials, employees, and agents (all collectively referred to as "Indemnitees") from and against any and all claims arising from Developer's use of the Designated Parking Spaces or from any activity, work or other things done or suffered by Developer in or about the Designated Parking Spaces, and shall further indemnify and hold harmless Indemnitees from and against any and all claims arising from any breach or default in the performance of any obligations on Developer's part to the performed under the terms of this Addendum, or arising from any act, omission or negligence of the Developer, or any official, employee, guest or invitee of Developer, and from all costs, attorneys' fees, and liabilities incurred in or about the defense of any such claim or any action or proceeding brought thereon. If any action or proceeding be brought against Indemnitees by reason of any such claim, Developer, upon notice from Indemnitees, shall defend Indemnitees at Developer's expense, by counsel reasonably satisfactory to Indemnitees. Developer, as a material part of the consideration to City, hereby assumes all risk of damage to property or injury to person in, upon or about the Designated Parking Spaces, from any cause that is a result, either directly or indirectly, of Developer's use of the Designated Parking Spaces; and Developer hereby waives all claims in respect thereof against City and Indemnitees. Developer shall give prompt notice to City in the case of casualty or accidents in the Designated Parking Spaces. City and Indemnities shall not be liable for any loss or damage to persons or property resulting from fire, explosion, earthquake, flood, falling plaster, steam, gas, electricity, water or any other cause whatsoever. The provisions of this paragraph shall be in addition to any other obligations and liabilities Developer may have to City at law or equity and shall survive the expiration of the Term. 8. Priority of Development Agreement and Project Approvals. In applying the terms and provisions of the various agreements and approvals between the Developer, the City and the City relative to the subject of parking in the Parking Areas, the terms of the Development Agreement and Project Approvals shall apply, control and govern over any other inconsistent terms and provisions of the Easement, Addenda, or Parking Management Plan. 9. Priority of Easement and Addendum. Except as modified or amended by this Third Addendum, the terms of the Easement and Addenda continue to be and are in full force and effect. 72500.00000\21191705.2 10. Miscellaneous. A. Amendment. This Third Addendum may be modified only in writing, signed by the parties in interest at the time of the modification. B. Severability. The invalidity or unenforceability of any provision of this Third Addendum, as determined by a court of competent jurisdiction, shall in no way affect the validity or enforceability of any other provision hereof. C. Recordation. Promptly following the execution of this Agreement, City shall cause this Third Addendum to be recorded in the Official Records of Riverside County, California. D. Notice. Any written notice required to be given under the Easement, the Addendum, the Parking Management Plan or this Third Addendum may be given by either personal delivery, by Federal Express (or other reputable overnight courier service (collectively, "Courier")), or by mail. If given by Courier, such notice shall be deemed to have been properly given on the business day immediately following the date same is deposited with such Courier for next -day delivery. If given by mail, such notice shall be deemed to have been properly given forty-eight (48) hours after the time that the same is deposited in the United States mail, certified, or registered, return receipt requested, postage prepaid, addressed as follows (or at such address as either Party may otherwise designate in writing to the other Party): To Developer: THE GARDENS ON EL PASEO LLC 200 East Long Lake Road P.O. Box 200 Bloomfield Hills, MI 48303-0200 Attn: General Counsel To City: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, California 92260 Attn: City Manager E. Entire Agreement. This Third Addendum contains the entire agreement between Developer and Agency as to the subject matter hereof and supersedes all prior agreements, oral or written, with respect thereto. F. Authority. Each Party represents and warrants that it has the sole right and exclusive authority to enter into this Third Addendum. 72500.00000\21191705.2 G. Counterparts. This Third Addendum may be executed in any number of counterparts, each of which shall be deemed an original, but all of which, taken together, shall constitute one and the same instrument. IN WITNESS WHEREOF, the parties hereto have caused this Third Addendum to be executed as of the date first above written. DEVELOPER: THE GARDENS ON EL PASEO LLC, a Delaware limited liability company Its: Manager CITY: CITY OF PALM DESERT, a California charter city IN Its: City Manager Attest: Rachelle D. Klassen, City Clerk 72500.00000\21191705.2 EXHIBIT "A" LEGAL DESCRIPTION OF DEVELOPER'S PROPERTY The Gardens on El Paseo Shopping Center: PARCELS I AND 2 OF PARCEL MAP NO. 4655, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AS SHOWN BY MAP ON FILE IN BOOK 7, PAGE 42 OF PARCEL MAPS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA. EXCEPTING ONE -SIXTEENTH OF ALL COAL, OIL, GAS AND OTHER MINERAL DEPOSITS IN SAID LAND, AS RESERVED IN PATENT FROM STATE OF CALIFORNIA, RECORDED JULY 17, 1925 IN BOOK. 9,102 OF PATENTS, RECORDS OF RIVERSIDE COUNTY, CALIFORNIA Assessor's Parcel Number: 627-261-006-4 72500.00000\21191705.2 EXHIBIT "B" PARKING AREAS 72500,00000\21191705.2 EXHIBIT "C" DESIGNATED PARKING SPACES t a w j P s a a2 1 y THE GARDENS ON EL P S OIEL PAS VILLAGE 1-0---T _. LEASING FLAN - LOWER LPL 4 *dLGi.. paftz i2tY hY4 R-'�.i (}pMk. o-f .»..,........ .... _._... ,...., N i.EF,:^s�°r1 t, CAT y(�ry( �9p'''�p°'�+�} p^� t4#4fb a 1 ar TP-M 2WE LOWLAORCeA0 lkC}ow tSMd.tS W+4Fab3 .2m yx. g . \ .........:: ... . .W. y«mmrmwkmlwq