HomeMy WebLinkAbout2023-05-25 Supplemental Packet 1
Thursday, May 11, 2023
Minutes of the Regular Meeting of the Palm Desert City Council (CC),
Successor Agency to the Palm Desert Redevelopment Agency (SARDA),
and Housing Authority (HA)
Pursuant to Assembly Bill 2449, this meeting was conducted by teleconference and there
was in-person public access to the meeting location.
STUDY SESSION:
A Study Session was called to order by Mayor Kelly on Thursday, May 11, 2023, at 1:30 p.m.
in the Council Chamber, City Hall, located at 73-510 Fred Waring Drive, Palm Desert,
California. All members of the City Council were present.
The City Council received informational presentations regarding library operations and
the Development Services Lobby Remodel Project. The City Council took no formal
actions on these topics.
The City Council recessed at 2:12 p.m. and reconvened to call the regular meeting to
order at 3:00 p.m.
CALL TO ORDER:
A Regular Meeting of the Palm Desert City Council was called to order by Mayor Kelly
on Thursday, May 11, 2023, at 3:00 p.m. in the Council Chamber, City Hall, located at
73-510 Fred Waring Drive, Palm Desert, California.
RECESS TO CLOSED SESSION:
There being no member of the public wishing to speak on any closed session items, the
City Council recessed to Closed Session and reconvened at 4:00 p.m.
ROLL CALL:
Present: Councilmembers Jan Harnik, Gina Nestande, Karina Quintanilla, and Evan
Trubee; and Mayor Kathleen Kelly.
Absent: None.
PLEDGE OF ALLEGIANCE:
Councilmember Harnik led the Pledge of Allegiance.
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City of Palm Desert Page 2
ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES
INSPIRATION/INVOCATION:
Mayor Pro Tem Quintanilla offered words of inspiration.
REPORT OF CLOSED SESSION:
Assistant City Attorney Shah announced direction was given but no reportable actions were
taken.
PRESENTATIONS:
None.
CITY MANAGER'S COMMENTS:
A. PURCHASING POLICY UPDATE
Finance Director Chavez introduced Management Specialist Garcia who provided a
purchasing policy update.
MAYOR/COUNCILMEMBER REPORTS AND REQUESTS FOR ACTION:
All Councilmembers reported on their attendance at various meetings and events.
Councilmember Harnik reported that the Living Desert was recently designated as a
Certified Autism Center. Councilmember Nestande shared information regarding grants
for clean, renewable energy for low-income residents. Councilmember Trubee and Mayor
Kelly praised Councilmember Harnik for her service as President of the Southern
California Association of Governments. Mayor Kelly thanked Mayor Pro Tem Quintanilla
for featuring International Day Against Homophobia, Transphobia, and Biphobia, noting
the City’s commitment in Resolution No. 2018-09 to stand against bigotry in all its
expressions.
Mayor Kelly requested that staff pursue the idea of identifying local schools with metal
fabrication programs who may want to collaborate with the City on the production of bike
racks as it relates to the City’s Bike Rack Program. Councilmembers Nestande and
Harnik supported the request.
NONAGENDA PUBLIC COMMENTS:
None.
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CC, SARDA, & HA Meeting Minutes May 11, 2023
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ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES
1. CONSENT CALENDAR:
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to approve the consent calendar with the exception of
Item 1M which was removed for separate consideration.
A. APPROVAL OF CITY COUNCIL, SUCCESSOR AGENCY, AND HOUSING
AUTHORITY MINUTES
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to approve the Minutes of April 27, 2023.
B. APPROVAL OF WARRANTS
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to approve warrants issued for the period of
March 8, 2023, through April 28, 2023.
C. AWARD CONTRACT NO. C44890 TO HORIZON PROFESSIONAL LANDSCAPE,
INC., OF COACHELLA, CALIFORNIA, FOR THE DESERT WILLOW PERIMETER
LANDSCAPE AND LIGHTING REHABILITATION PHASE 2 PROJECT IN THE
AMOUNT OF $319,260 (PROJECT NO. 87123)
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to:
1. Award Contract No. C44890 to Horizon Professional Landscape, Inc., of
Coachella, California, for the Desert Willow Perimeter Landscape and Lighting
Rehabilitation Phase 2 Project in the amount of $319,260.
2. Authorize the Director of Finance to set aside a contingency in the amount of
$60,000 for unforeseen conditions.
3. Authorize the City Manager or designee to review and approve written requests
for the use of contingency for unforeseen conditions per Section 3.30.170 of
the Palm Desert Municipal Code.
4. Authorize the City Manager to execute the agreement.
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ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES
D. APPROVE FEE WAIVER AND TEMPORARY WAIVER OF CERTAIN PARKS
ORDINANCES FOR THE DESERT RECREATION DISTRICT FUNDRAISER AT
CIVIC CENTER PARK
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to approve fee waiver and temporary waiver of certain
parks ordinances for Desert Recreation District fundraiser at Civic Center Park as
follows:
1. 11.01.20 (Hours of Use in City Parks);
2. 11.01.140 (Amplified Sound in City Parks);
3. 11.01.080 O (Placement of Advertising Signage in City Parks);
4. 11.01.080 Q (Vendor Sales in City Parks); and
5. 11.01.080 W (Possession/Consumption of Alcohol in City Parks) pursuant to
PDMC 9.58.040.
E. HOUSING AUTHORITY AUTHORIZE THE AWARD OF A GENERAL
SERVICES AGREEMENT NO. HA45200 TO EXCLUSIVE PEST CONTROL
SERVICES IN AN AMOUNT NOT TO EXCEED $74,832 ANNUALLY FOR PEST
CONTROL AND EXTERMINATION SERVICES AT THE HOUSING AUTHORITY
RESIDENTIAL RENTAL PROPERTIES
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to:
1. Authorize the award of a three-year General Services Agreement No.
HA45200, with an option to renew no more than two additional one-year terms
to Exclusive Pest Control Services for pest control and extermination services
at the Housing Authority residential rental properties, in a total annual amount
not to exceed $74,832 (includes an annual cost of $62,580 and $12,252 for as-
needed additional services).
2. Authorize RPM Company, the Housing Authority’s contracted management
company, to monitor the Agreement and authorize additional pest control and
extermination services as determined to be necessary due to emergency
actions and/or to proactively respond to the needs of the properties.
F. ACCEPT CONTRACT NO. C43340 WITH CHRISP COMPANY OF FREEMONT,
CALIFORNIA, FOR THE CONSTRUCTION OF THE HAYSTACK ROAD
TRAFFIC CALMING AND SAFETY IMPROVEMENTS PHASE 1 & PD LINK
PHASE 1 CLASS III BICYCLE FACILITIES AS COMPLETE AND AUTHORIZE
THE CITY CLERK TO FILE A NOTICE OF COMPLETION (PROJECT NO. 667
21 & 70820)
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to:
1. Accept Contract No. C43340 with Chrisp Company of Freemont, California, for
the construction of the Haystack Road Traffic Calming and Safety Improvements
Phase 1 and PD Link Phase 1 Class III Bicycle Facilities as complete.
2. Authorize the City Clerk to file the Notice of Completion.
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City of Palm Desert Page 5
ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES
G. ACCEPT RESIGNATIONS FROM THE BUILDING BOARD OF APPEALS,
FINANCE COMMITTEE, HOUSING COMMISSION, AND RESOURCE
PRESERVATION AND ENHANCEMENT COMMITTEE
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to accept with regret the resignation of Pamela Martin
from the Building Board of Appeals, Karen Alexander from the Finance Committee,
and Dennis Guinaw from the Housing Commission and Resource Preservation and
Enhancement Committee.
H. AUTHORIZE A CHANGE ORDER TO THE EL PASEO PARKING & BUSINESS
IMPROVEMENT DISTRICT CONTRACT NO. C43370 WITH FG CREATIVE IN
THE AMOUNT OF $40,000
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to:
1. Authorize a Change Order to El Paseo Parking and Business Improvement
District Contract No. C43370 with FG Creative in the amount of $40,000.
2. Authorize the City Manager to execute said agreement on behalf of the City.
I. APPROVE AMENDMENT NO. 2 TO CONTRACT NO. C41660 WITH SAME DAY
EXPRESS FOR MAINTENANCE OF THE CITY OF PALM DESERT’S
PERMANENT PUBLIC ART COLLECTION AND THE EL PASEO SCULPTURE
EXHIBITION
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to:
1. Approve Amendment No. 2 to Contract No. C41660 with Same Day Express in
the amount of $55,200 from the term of July 1, 2023, to June 30, 2024, for
maintenance of the City of Palm Desert’s permanent public art collection and
the El Paseo Sculpture Exhibition.
2. Approve up to $20,000 on an as needed basis for additional public art
maintenance and repair services from Same Day Express.
3. Authorize the City Manager to execute amendment.
J. ACCEPT CONTRACT NO. C43400 AS COMPLETE FOR THE NORTH SPHERE
WIND FENCE INSTALLATION PROJECT (PROJECT 76722)
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to accept Contract No. C43400 with Red Hawk
Services, Inc., of Perris, California, for the North Sphere Wind Fence Installation
Project as complete and authorize the City Clerk to file the Notice of Completion.
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ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES
K. SECOND READING AND ADOPTION OF ORDINANCE NO. 1393 AMENDING
AND UPDATING VARIOUS SECTIONS OF THE PALM DESERT MUNICIPAL
CODE, INCLUDING UPDATES TO TITLE 25, ZONING
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to waive the second reading of the ordinance text in its
entirety and read by title only; and adopt Ordinance No. 1393.
L. AUTHORIZE THE CITY MANAGER TO RENEW AN AGREEMENT WITH
ENVIRONMENTAL SYSTEMS RESEARCH INSTITUTE, INC., FOR AN
ENTERPRISE ADVANTAGE PROGRAM IN THE AMOUNT OF $56,500.00
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to authorize the City Manager to renew an agreement
with Environmental Systems Research Institute, Inc., (ESRI) for an Enterprise
Advantage Program, in the amount of $56,500.00, to provide consulting, training,
and technical assistance for Geographic Information Systems initiatives.
M. APPROVE THE START OF PROCEEDINGS TO LEVY AND COLLECT
ANNUAL ASSESSMENTS AND GRANT PRELIMINARY APPROVAL OF THE
2023/2024 ENGINEER’S REPORT FOR CONSOLIDATED PALM DESERT
LANDSCAPING AND LIGHTING MAINTENANCE DISTRICT NO. 1
This item was removed for separate discussion and action.
N. RESOLUTION NOS. 2023011 AND 2023012: APPROVE THE START OF
PROCEEDINGS TO LEVY THE ANNUAL ASSESSMENT FOR CITY OF PALM
DESERT BENEFIT ASSESSMENT DISTRICT NO. 1 FOR FISCAL YEAR
2023/2024
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to waive further reading and adopt:
1. Resolution No. 2023-011 to initiate proceedings for the levy and collection of
assessments for City of Palm Desert Benefit Assessment District No. 1 for
Fiscal Year 2023/2024.
2. Resolution No. 2023-012 to declare its intention to levy the annual assessment
for City of Palm Desert Benefit Assessment District No. 1 for Fiscal Year
2023/2024, pursuant to the Benefit Assessment Act of 1982 and appointing a
time and place for the public hearing on these matters.
3. Set a public hearing to be held at City Hall on Thursday, June 22, 2023.
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City of Palm Desert Page 7
ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES
O. ACCEPT CONTRACT NO. C43130 AS COMPLETE FOR THE COOK STREET
REHABILITATION PROJECT (PROJECT 75221)
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to accept Contract No. C43130 with Matich Corporation
of San Bernadino, California, for the Cook Street Rehabilitation Project as complete
and authorize the City Clerk to file the Notice of Completion.
EXCLUDED CONSENT CALENDAR:
M. RESOLUTION NOS. 2023013 AND 2023014: APPROVE THE START OF
PROCEEDINGS TO LEVY AND COLLECT ANNUAL ASSESSMENTS AND
GRANT PRELIMINARY APPROVAL OF THE 2023/2024 ENGINEER’S
REPORT FOR CONSOLIDATED PALM DESERT LANDSCAPING AND
LIGHTING MAINTENANCE DISTRICT NO. 1
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY
COUNCILMEMBER NESTANDE, CARRIED 5-0, to waive further reading and
adopt:
1. Resolution No. 2023-013 to initiate proceedings for the levy and collection of
annual assessments for Consolidated Palm Desert Landscaping and Lighting
Maintenance District No. 1 for Fiscal Year 2023/2024.
2. Resolution No. 2023-014 to declare the intent to levy and collect annual
assessments granting preliminary approval of the 2032/2024 Engineer’s
Report for Consolidated Palm Desert Landscaping and Lighting Maintenance
District No. 1.
3. Set a public hearing to be held at City Hall on Thursday, June 22, 2023.
2. ACTION CALENDAR:
A. REQUEST FOR DIRECTION REGARDING THE WAYFINDING SIGN
PROGRAM MASTERPLAN PROJECT
Project Manager Leyva narrated a PowerPoint presentation and responded to City
Council inquiries.
MOTION BY COUNCILMEMBER HARNIK, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to move forward with options 1 and 3 to rebrand and
update the current wayfinding design, and to design, replace and install monument
signs at various locations throughout Palm Desert.
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City of Palm Desert Page 8
ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES
B.REQUEST FOR DIRECTION REGARDING THE PALM DESERT LIBRARY
Assistant City Manager Escobedo and Project Administrator Gerry narrated a
PowerPoint presentation and responded to City Council inquiries.
Ralph Perry, Palm Desert resident and Parks & Recreation Committee member,
urged the City Council to consider taking over the management of the Palm Desert
library.
Paul Murphy, Palm Desert resident and Parks & Recreation Committee member,
spoke in support of Mr. Perry’s position.
MOTION BY COUNCILMEMBER TRUBEE, SECOND BY COUNCILMEMBER
NESTANDE, CARRIED 5-0, to authorize the Mayor to seek out members for a
Library Taskforce to include the Library subcommittee to the Parks and Recreation
Committee, community members, and representatives of Friends of the Library
and City Council; and direct staff to further research and return with additional
information on the option to pursue fully taking over the Palm Desert Library and
have it operated as a municipal library.
C.AUTHORIZE STAFF TO PROCEED WITH PUBLIC ENGAGEMENT PROCESS
AND PUBLIC EDUCATION ON POTENTIAL GENERAL SALES TAX
MEASURE AND PROVIDE DIRECTION ON DRAFTING A RESOLUTION WITH
BALLOT LANGUAGE FOR THE COUNCIL’S CONSIDERATION AT A FUTURE
DATE
Finance Director Chavez narrated a PowerPoint presentation and responded to
City Council inquiries.
MOTION BY COUNCILMEMBER HARNIK, SECOND BY MAYOR KELLY,
CARRIED 5-0, to authorize staff to proceed with the public education process and
public engagement on a potential general sales tax revenue (also known as
transaction and use tax) measure.
D.INTRODUCTION OF ORDINANCE NO. 1394 AMENDING CHAPTER 12.04 OF
THE PALM DESERT MUNICIPAL CODE REGARDING ENCROACHMENTS
AND EXCAVATIONS
Public Works Director Alvarez narrated a PowerPoint presentation and responded
to City Council inquiries.
MOTION BY COUNCILMEMBER HARNIK, SECOND BY MAYOR PRO TEM
QUINTANILLA, CARRIED 5-0, to waive further reading and pass to second
reading Ordinance No. 1394 amending Chapter 12.04 of the Palm Desert
Municipal Code regarding encroachments and excavations.
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City of Palm Desert Page 9
ALL ACTIONS ARE DRAFT PENDING APPROVAL OF THE FINAL MINUTES
E. INTRODUCTION OF ORDINANCE NO. 1395 AMENDING THE PALM DESERT
MUNICIPAL CODE RELATIVE TO THE HOMELESSNESS TASK FORCE
MEMBERSHIP
City Clerk Mejia provided a staff report and responded to City Council inquiries.
MOTION BY MAYOR PRO TEM QUINTANILLA, SECOND BY
COUNCILMEMBER HARNIK, CARRIED 5-0, to waive further reading and
introduce Ordinance No. 1395 amending the Palm Desert Municipal Code relative
to the Homelessness Task Force Membership.
3. PUBLIC HEARINGS:
None.
INFORMATION ITEMS:
None.
ADJOURNMENT:
The City Council adjourned at 5:50 p.m.
Respectfully submitted,
Níamh M. Ortega
Assistant City Clerk/Assistant Secretary
ATTEST:
Anthony J. Mejia, MMC
City Clerk/Secretary
APPROVED BY CITY COUNCIL: __/__/2023
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From:Eric Ceja
To:Níamh Ortega
Subject:Agenda Addendum
Date:Wednesday, May 24, 2023 4:10:37 PM
Attachments:50yearsresized_32178492-0560-4444-b657-c0c208d02055.png
2023 Amendment to Dsrt Surf DDA.(TOC)(20230504) (002).2.docx
Hi Niamh,
For Consent item D – DSRT Surf, please find the attached and modified “First Amendment to the
Second Revised and Restated Disposition and Development Agreement for DSRT Surf”. The
modifications are non-substantive to the previous attached version and reflect an updated legal
description and minor language changes in the agreement.
Thanks,
.
.
Eric Ceja
Director of Economic Development
760.776.6384
eceja@palmdesert.gov | www.palmdesert.gov
73510 Fred Waring Drive, Palm Desert, CA, 92260
.
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FIRST AMENDMENT TO SECOND REVISED AND RESTATED
DISPOSITION AND DEVELOPMENT AGREEMENT
by and among
CITY OF PALM DESERT
(“City”)
and
DESERT WAVE VENTURES, LLC
a Delaware limited liability company
(“Developer”)
SURF LAGOON, SURF CENTER, AND RESIDENTIAL UNITS PROJECT
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TABLE OF CONTENTS
Page
1. GENERAL PROVISIONS. .................................................................................... 6
1.1 Purpose of this Agreement ........................................................................ 6
1.2 Project Site ................................................................................................ 7
1.3 Project Existing Approvals; Implementation Actions .................................. 7
1.4 CEQA Compliance ................................................................................... 10
2. IDENTITY OF PARTIES. .................................................................................... 10
2.1 Developer ................................................................................................ 10
2.2 City........................................................................................................... 14
2.3 Notices ..................................................................................................... 14
3. TERM. ................................................................................................................ 15
3.1 Term ........................................................................................................ 15
4. DESIGN AND DEVELOPMENT OF PROJECT. ................................................. 15
4.1 Design and Development of the Project................................................... 15
4.2 City Infrastructure Improvements ............................................................. 16
4.3 Submission and Approval of Construction Documents and Building
Permit and Grading Permit Applications .................................................. 16
4.4 Agreement on Total Project Costs ........................................................... 17
4.5 Developer Releases ................................................................................ 18
4.6 Insurance ................................................................................................. 18
4.7 Other provisions or requirements: ............................................................ 19
4.8 Safety....................................................................................................... 22
4.9 Developer’s Indemnity Agreement/Hold Harmless .................................. 23
4.10 Payment Bonds and Performance Bonds ................................................ 24
4.11 Liens and Claims ..................................................................................... 25
5. REQUIREMENTS OF PARTIES. ....................................................................... 26
5.1 Periodic Review; Meet and Confer; Cooperation Between Parties .......... 26
5.2 Post-Closing Obligations .......................................................................... 27
5.3 Security for Post-Closing Obligations....................................................... 28
6. COMMUNITY BENEFIT PAYMENT. .................................................................. 30
7. DEFAULTS; REMEDIES. ................................................................................... 30
7.1 General Developer Default ...................................................................... 30
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7.2 Default by City ......................................................................................... 31
7.3 Force Majeure .......................................................................................... 31
7.4 Remedies Exclusive................................................................................. 31
7.5 Dispute Resolution ................................................................................... 32
8. EVENTS OF TERMINATION; RIGHTS AND OBLIGATIONS OF PARTIES.
........................................................................................................................... 32
8.1 Events of Termination .............................................................................. 32
8.2 Effect of Termination ................................................................................ 32
9. MISCELLANEOUS PROVISIONS. ..................................................................... 33
9.1 Time of Essence ...................................................................................... 33
9.2 Consent ................................................................................................... 33
9.3 Entire Agreement ..................................................................................... 33
9.4 Interpretation ............................................................................................ 33
9.5 Governing Law ......................................................................................... 33
9.6 Captions ................................................................................................... 33
9.7 No Third Party Rights............................................................................... 33
9.8 Modification or Amendment of Agreement; Operating Memoranda ......... 33
9.9 Waiver ...................................................................................................... 34
9.10 Severability .............................................................................................. 34
9.11 Integrated Agreement .............................................................................. 34
9.12 Certificates ............................................................................................... 34
9.13 Counterparts ............................................................................................ 35
9.14 Public Records ......................................................................................... 35
9.15 Incorporation by Reference of Recitals .................................................... 35
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ATTACHMENTS
Attachment No. 1 Scope of Development
Attachment No. 2 Preliminary Plan of Finance
Attachment No. 3 Preliminary Project Budget
Attachment No. 4 Map of Project Site; Map Showing General Location of
Elements of the Project
Attachment No. 5 Legal Description of the Project Site
Attachment No. 6 Form of City Cost Reimbursement Agreement
Attachment No. 7 Schedule of Performance
Attachment No. 8 Form of Declaration of Restrictions
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FIRST AMENDMENT TO SECOND REVISED AND RESTATED
DISPOSITION AND DEVELOPMENT AGREEMENT
Surf Lagoon, Surf Center, and Residential Units Project
This First Amendment to Second Revised and Restated Disposition and
Development Agreement (this “Agreement”) is entered into as of May __, 2023 (the
“Execution Date”), by and among the CITY OF PALM DESERT, a chartered municipal
corporation (the “City”), and DESERT WAVE VENTURES, LLC, a Delaware limited
liability company (the “Developer”). The City and Developer are the sole parties (each, a
“Party” and, collectively, the “Parties”) to this Agreement. The “Effective Date” shall be
May __, 2023.
RECITALS
This Agreement is based upon the following recitals, facts and understandings of
the Parties:
A. The City and Developer entered into that certain Disposition and
Development Agreement, dated December 30, 2019 (the “Original DDA”). The City and
Developer subsequently entered into that certain Revised and Restated Disposition and
Development Agreement, dated April 22, 2022 (the “First Revised DDA”). The Parties
subsequently entered into that certain Second Revised and Restated Disposition and
Development Agreement, dated November 17, 2022 (the “Second Revised DDA”), which
completely superseded both the Original DDA and the First Revised DDA. The Parties
now intend to amend the Second Revised DDA with this Agreement.
B. The City has previously conveyed 3.03 acres of real property (APNs 620-
400-008 & 620-420-024) (the “City Property”) to Developer by a grant deed (“City Grant
Deed”) pursuant to that certain Purchase Option Agreement dated August 15, 2018, and
the Successor Agency to the Redevelopment Agency of the City of Palm Desert
(“SARDA”) previously conveyed 14.65 acres of real property (APN 620-420-023) (the
“SARDA Property”) to Developer by a grant deed (“SARDA Grant Deed”) pursuant to that
certain Purchase Option Agreement dated August 15, 2018, as amended by the First
Amendment to Real Estate Option and Purchase and Sale Agreement dated May 22,
2021. The City Grant Deed and the SARDA Grant Deed are referred to herein,
collectively, as the “Deed of Sale.” Collectively, the City Property and the SARDA
Property make up the project site (“Project Site”). As consideration, in part, for the City
entering into the Second Revised DDA and to secure the Developer’s performance of its
obligations thereunder, the Developer executed a Performance Deed of Trust and
Security Agreement, dated December 22, 2022, and recorded on December 21, 2022, as
Document No. 2022-0510281 in the official records of Riverside County. Concurrently
with, or prior to, the execution of this Agreement, Developer entered into a
Reimbursement Agreement, dated _________, 2023, by and between City and
Developer, for the purpose of reimbursing the City for the costs and expenses it incurs
for the review process of the Project.
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C. Pursuant to the Second Revised DDA, the Developer was obligated to
construct a minimum 137-key 69,000 square foot hotel (including restaurant, bar, café,
meeting and banquet rooms, and outdoor amenities such as pool, spa, decks, and
associated parking facilities) (the “Hotel”). Developer now desires to eliminate the
obligation to construct the Hotel and remove it from the scope of development. Developer
now proposes to construct improvements on the Project Site in two phases as set forth in
the “Scope of Development” (Attachment No. 1 attached hereto and incorporated herein
by reference). In the first phase, Developer will construct an approximately 5.5-acre Surf
Lagoon; an approximately 6,200 square foot Surf Center, inclusive of a food and
beverage component, 356 on-site parking spaces, and 57 residential lots with all utilities
stubbed to the site; the second phase will include 57 private residential units (the
“Residential Units”) and associated amenities. (Together all improvements at the Project
Site are referred to as the “Project”.)
D. The Project Costs (as defined in Section 4.4(c) below) are currently
estimated to be $90,000,000 and the Developer expects to fund the Project Costs as set
forth in the “Preliminary Plan of Finance” (Attachment No. 2 attached hereto and
incorporated herein by reference). Attachment No. 3 is a “Preliminary Project Budget”
that includes Project Costs and the Preliminary Plan of Finance. Both the Preliminary
Plan of Finance and the Preliminary Project Budget shall be updated by Developer for
City review on or prior to the applicable target date set forth in the Schedule of
Performance, Attachment No. 7 attached hereto and incorporated herein by this
reference.
E. The Parties now desire to set forth the terms and conditions upon which the
City may sell the Project Site to the Developer for the development, operation and
maintenance of the Project. Developer may finance the Project Costs and the
Developer’s Improvements Costs. All capitalized terms not defined within this Agreement
shall have the meanings ascribed to such terms in the Second Revised DDA.
AGREEMENTS
For valuable consideration, receipt of which is hereby acknowledged, and the
mutual obligations of and benefits to the Parties set forth herein, the City and Developer
agree as follows:
1. GENERAL PROVISIONS.
1.1 Purpose of this Agreement. The intent and purpose of this Agreement is
to (i) modify and extend the Second Revised DDA, (ii) set forth the modified obligations
of the Parties and conditions precedent to the development and construction of the
various elements of the Project, as applicable, and (iii) identify the financing by the
Developer of the Project. Accordingly, the Second Revised DDA is hereby amended in
its entirety to read as set forth herein.
This Agreement is further intended to provide for the completion of all actions necessary
to plan and design the Project, and for commencement of development and construction
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of the Project, including, but not limited to, the preparation of all construction plans,
specifications and cost estimates and related documents for the Project, and the securing
of private financing for the various elements of the Project.
This Agreement shall expire and be of no further force or effect upon issuance of
Certificate(s) of Occupancy and/or Certificate(s) of Completion for the Surf Lagoon, Surf
Center, inclusive of a food and beverage component, and 356 parking spaces, except for
those provisions that expressly survive the expiration or earlier termination of this
Agreement, which are set forth in Article 8.
1.2 Project Site. The Project Site and Map Showing General Location of
Elements of the Project (“Site Plan”) is shown on Attachment No. 4 and more particularly
described in Attachment No. 5. The Project Site shall include the Surf Lagoon, the Surf
Center, and the Residential Units.
1.3 Project Existing Approvals; Implementation Actions. The Parties agree
that, as of the Execution Date, the following documents have been approved and may be
amended from time to time by the City (the “Existing Approvals”):
(a) Existing Approvals:
(i) DSRT SURF Specific Plan, as amended (Case Nos. SP 18-
0002 Amendment No. 1, PP 21-0002).
(ii) Surf Lagoon, Surf Center, and Residential Unit Precise Plan.
(iii) Tentative Parcel Map (amended TTM 36379) and related
conditions of approval (“Conditions of Approval”).
(iv) Architectural Review Commission recommendation of the
Project.
(v) Environmental Impact Report (“EIR”), Statement of Overriding
Considerations, and Mitigation, Monitoring, and Reporting Program (“MMRP”) for the
DSRT SURF Project (SCH #2019011044).
(vi) EIR Addendum, Specific Plan Amendment, Precise Plan, and
Tentative Tract Map for the DSRT Surf Project (SCH #2019011044).
(b) Implementing Actions by City, Government Agencies and Other
Parties. The implementation of this Agreement requires certain actions by the City and
other governmental agencies with an interest in the Project Site, which actions include,
but are not limited to, the following, which have been or shall be completed on or prior to
the applicable target date set forth in the Schedule of Performance, Attachment No. 7
attached hereto and incorporated herein by this reference (the “Target Date”) for such
respective items (the “Implementing Actions”) Assuming adequate environmental review,
the City Manager, in consultation with the City Attorney, is hereby authorized to execute
any Implementing Actions requiring City approval without City Council consideration,
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unless the City Manager or City Attorney determine that the Implementing Action should
be considered by the City Council. Upon execution of any Implementing Action the City
Manager shall provide notice to the City Council.
(i) Utility Related Matters:
(1) CVWD Sewer Agreement.
(2) CVWD and or Riverside County Agreement for Water
Well Site Approval, Permitting, Construction and Operation, if development of a private
water well on the Project Site is legally and technically feasible.
(ii) City and Developer Agreements or Approvals:
(1) Master Use and Maintenance Agreement, include
water quality discharge plan which would include a 3-day lagoon evacuation agreement
with the City and fee schedule for CVWD water use (prior to Water Well site approval and
construction) Water Metering schedule (for freshwater intake pass through).
(2) Agreement to evidence the Developer’s obligation to
fund 12.1% of the cost to install a signal at the intersection of Marketplace and Cook.
(3) City Well Usage Agreement, if the City determines in
its sole discretion that adequate excess water supply exists for existing and foreseeable
needs.
(4) Supplemental Water Usage Agreement (Indicating
Developer’s obligation to fund additional turf removal, conservation efforts, or other
mitigations should Surf Lagoon water use exceed 23.8 million gallons annually).
(5) Master Construction, Access and Parking Easement
Agreement Over Desert Willow Golf Resort.
(6) Easements required to satisfy the Existing Approvals,
e.g. MMRP and other Conditions of Approval.
(7) City Cost Recovery Agreement attached hereto and
incorporated herein in Attachment No. 6 (to be executed by both Parties concurrent with
or prior to the execution of this Agreement).
(8) Offsite Turf Reduction Program Funding (at
Developer’s sole cost and expense) and Scheduling Agreement.
(9) Construction easement(s) from City to the Developer
for turf reduction immediately adjacent to the Project Site.
(iii) Misc. Required Agreements:
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(1) Parties: City, Developer, future owner(s):
a. An easement and maintenance agreement in
favor of developer to cross under Mountain View golf course, and to access 15”
underground water line for freshwater supply.
b. An easement and maintenance agreement in
favor of the Developer for construction of grading, landscaping, and retaining walls around
entire Project Site.
c. City shall amend or terminate the overflow
parking agreement with JW Marriott on Lot E.
d. Residential Unit CC&R’s.
(2) Parties: CVWD, City, Desert Willow Condominium
Association, Developer, future owner(s):
a. An easement and maintenance agreement in
favor of the landowner(s) to provide tie-in access to sewer line at the adjacent Westin
Desert Willow Villas property. If not feasible due to design, Developer will tie-in access
to the sewer line located along Desert Willow Drive.
b. Emergency Access Agreement.
(3) Parties: City, Embarc and Developer:
a. An easement and maintenance agreement
under Mountain View golf course, through Embarc property and discharging to City
owned circulatory golf irrigation lakes system.
(4) Parties: Developer and Surf Lagoon and Center
Operator:
a. Surf Lagoon and Center Operations Agreement.
(c) Project Naming Rights.
(i) The Parties agree and acknowledge that all derivatives, logos,
trademarks, service marks, and trade names associated with the Project are valuable
property of Developer.
(ii) Developer will have the sole discretion to name or re-name
the Project and its component parts, subject to approval by the City Council, which
approval shall not be unreasonably conditioned, withheld or delayed, prior to the name or
re-name designation.
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(iii) Developer will refrain from using a name that in any way
competes with or infringes on the Palm Desert name and brand. For example, the
Developer will not include references to other cities, or regions in the name.
(iv) Where collateral material, including online materials, and
marketing/branding include references to the Project, to the extent practicable all
references used and imagery associated shall include Palm Desert or Desert Willow.
1.4 CEQA Compliance. The City prepared and certified, pursuant to the
California Environmental Quality Act (“CEQA”) and CEQA Guidelines (California Code of
Regulations, Title 14, Section 15000, et seq.), the EIR, Statement of Overriding
Considerations, MMRP, and EIR Addendum for the Project, which satisfies CEQA for
purposes of this Agreement and the Existing Approvals.
While no new or supplemental environmental approvals are contemplated, the
Parties shall cooperate with respect to any supplemental environmental documentation
or approvals that may be required for the Project.
The Developer understands and agrees that the City may require subsequent or
supplemental environmental review or other environmental analysis to implement the
Project as required by CEQA, and/or by changes in applicable local, state, federal laws,
including, without limitation, the applicable codes, ordinances, regulations and policies of
the City (collectively, the “Laws”).
2. IDENTITY OF PARTIES.
2.1 Developer.
(a) The Developer is Desert Wave Ventures, LLC, a Delaware limited
liability company. The Developer’s principals are Don Rady, Doug Sheres, and John
Luff. It is on the basis of the qualifications and experience of the Developer that the City
is entering into this Agreement. Accordingly, the provisions of this Section 2.1 are
deemed necessary by the City and are agreed to be reasonable by the Developer to
assure the City that the purposes of this Agreement will be achieved.
(b) Subject to Section 2.1(c), during the Term:
(i) Except for any Permitted Transfers, the Developer shall not
voluntarily or involuntarily assign a controlling interest in this Agreement or sell, convey
or transfer, or permit a controlling majority of its members, to sell, convey or transfer such
controlling interest in the Developer (each, a “Transfer”) without the prior written consent
of the City. The City shall not unreasonably withhold, condition or delay their consent to
a Transfer proposed by Developer that requires their consent if all of the following
conditions are satisfied:
(1) Developer shall have disclosed to the City in writing,
the verification as required in Section 2.1(b)(i)(4) for each Person who will be a member
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of the Developer and each Person that will hold, directly or indirectly, any membership
interests in the Developer as of the effective date of such proposed Transfer.
(2) Developer shall provide evidence of financing
reasonably acceptable to the City that following the proposed Transfer, Developer shall
have sufficient financial resources for the Developer to perform its obligations under this
Agreement. Evidence of financing shall include, at a minimum, the following: (i) a copy
of the loan commitment obtained by Developer from one or more financial institutions for
the mortgage loan or loans for financing to fund the construction, completion, operation
and maintenance of the residential units during the term of the loan, subject to such
lenders' reasonable, customary and normal conditions and terms; (ii) other
documentation satisfactory to the City as evidence of other sources of Project Equity
sufficient to demonstrate that Developer equity funds in the amount necessary to cover
the difference between the total cost of the Completion of the Construction of the Project
and the Project Construction Loan.
(3) Developer shall provide documentation reasonably
acceptable to the City that following the proposed Transfer, the Developer will continue
to have the commercial and real estate experience needed to perform the Developer’s
obligations under this Agreement (including, without limitation, the experience financing
and developing projects of a similar size and quality to the Residential Units, Surf Center
and Surf Lagoon).
(4) Developer shall provide the City with an independent
third-party verification, subject to the reasonable approval by the City of the independent
third-party, that each Unaffiliated Third Party (as defined below) that acquires any
membership interests in the Developer is reputable (which shall mean the absence of
reputations for dishonesty, criminal conduct or association with criminal elements –
“reputable” shall not mean “prestigious”, nor shall the determination of whether one is
reputable involve considerations of personal taste or preference), and has no history of,
or reputation for, either discriminatory employment practices which violate any Laws or
non-compliance with applicable Environmental Laws or listing on the Prohibited Person
list described below.
(5) Neither the transferee nor any Person with any direct
or indirect membership interest in the Developer shall be a Prohibited Person.
(6) Developer shall have provided to the City an outline of
any change in the proposed corporate structure of the Developer, in writing, in a detailed
narrative and a visual organizational flow chart.
(ii) The Developer shall not permit or suffer to exist any Change
of Control (as hereinafter defined) without the prior written consent of the City, which may
be given or withheld in the sole and absolute discretion of the City.
(iii) Except for any Permitted Transfers, the Developer shall
prohibit each of its members from voluntarily or involuntarily selling, conveying, or
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transferring any of such member’s direct or indirect membership interest in the Developer
to any Person without the prior written consent of the City (which consent shall be given
or withheld in the sole and absolute discretion of the City unless such Transfer satisfies
the criteria of Section 2.1(b)(i) in which case the City’s consent shall not be unreasonably
withheld, conditioned or delayed), and in no event to any Prohibited Person (as
hereinafter defined).
(iv) Any purported Transfer in violation of this Section 2.1(b) shall
be null and void, undone by Developer at Developer’s sole cost and expense, and not
binding on the City.
(c) Upon written request by the Developer to the City for consent to a
Transfer as required under Section 2.1(b), the City shall determine, in its reasonable
discretion, within thirty (30) days following delivery of the Developer’s request and all
information reasonably required by the City to review the request, whether the proposed
Transfer as of the effective date of the proposed Transfer, meets the qualifications set
forth in Section 2.1(b).
(d) The Developer shall deliver to the City all agreements and all certified
documents evidencing the formation, existence, and good standing of the Developer (with
all information regarding distributions, including any definitions primarily related thereto,
redacted), for review by the City for consistency with the provisions of this Agreement.
The City may request updates to such documents and/or agreements from time to time
during the Term and Developer shall deliver such updates within thirty (30) days of City’s
notice to Developer.
(e) The Developer represents and warrants to the City that it has
disclosed to the City each of its members, each Person that holds, directly or indirectly,
at least ten percent (10%) of the membership interests in the Developer, and each Person
that Controls the Developer.
(f) For purposes of this Section 2.1, the following definitions shall apply:
(i) “Change of Control” means a merger, consolidation,
recapitalization or reorganization of the Developer or other transaction or an amendment
to any governing document of the Developer that results in any Unaffiliated Third Party
having the ability to Control the Developer.
(ii) “Unaffiliated Third Party” means any Person that is not one of
the principals or is not Controlled by one of the principals.
(iii) “Person” means a natural person, whether acting for himself
or herself, or in a representative capacity, a partnership, a corporation, a limited liability
company, a governmental authority, a trust, an unincorporated organization or any other
legal entity of any kind.
(iv) “Control” means with respect to any Person (the “Controlling
Person”) the power to both (A) direct or cause the direction of the management or policies
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of another Person (the “Controlled Person”), whether through the ownership of voting
equity, by contract or otherwise; and (B) maintain active and direct control and supervision
of the operations of Developer, including without limitation, the day to day operations of
the Project; provided, however, that a contractual or other requirement that a Controlling
Person obtain the consent or approval of one or more other Persons as a condition to
undertaking a Major Decision shall not affect whether such Controlling Person Controls
such Controlled Person. “Controls”, “Controlled” and “Controlling” shall have correlative
meanings to “Control”.
(v) “Major Decisions” means, with respect to any Person, any
decision that is of the type that requires the consent or approval of such Person’s non-
managing members, limited partners or minority shareholders, which may include by way
of example, any decision to (A) enter into any financing or incur, assume or guarantee
any indebtedness that has not been previously approved in an approved budget or
operating plan; (B) enter into or terminate or amend any material agreement; (C) merge,
liquidate, sell, restructure, consolidate, recapitalize, reorganize, wind up, or dissolve the
Person; (D) authorize or declare voluntary bankruptcy, assignment for benefit of creditors,
acceleration of third-party obligations, confession of judgment, reorganization or any other
similar insolvency action involving the Person or make any filing in connection therewith;
(E) make any material changes to the Project; (F) terminate or amend this Agreement;
(G) purchase insurance except as required by this Agreement or the Deed of Sale; (H)
sell or transfer any asset of the Person; (I) approve any budget or operating plan; (J)
amend any of the organizational documents of the Person; (K) issue, redeem, repurchase
or cancel equity or other ownership interests in the Person (or any rights, warrants or
options to acquire the foregoing); (L) make changes to the governing body of the Person;
(M) declare or pay any distributions; (N) engage in new lines of business; (O) make capital
expenditures or similar expenditures except as required in an approved capital budget;
(P) make or change tax elections or accounting methodologies; or (Q) undertake an initial
public offering of securities.
(vi) ”Permitted Transfer” means the following Transfers, provided
that there is no Change of Control as a result of such transfer: (A) any Transfer of not
more than ten percent (10%) of direct or indirect membership interests in the Developer
to any Affiliated Transferee (as defined below) that is not a Prohibited Person; (B) if by a
natural person, any Transfer upon the death of such person by will or other instrument
taking effect upon such death or by applicable laws of descent and distribution to such
person’s estate and executors and then to such person’s heirs; or (C) if by a natural
person, any Transfer made in connection with the dissolution of the transferee’s marriage
or the legal separation of the transferee and his or her spouse on the account of any
settlement of any community property or other marital property rights such spouse may
have in any membership interests in the Developer.
(vii) “Prohibited Person” means any Person (A) named as a
“Specifically Designated National and Blocked Person” (“SDN”) on the most current list
published by the U.S. Department of the Treasury Office of Foreign Assets Control at its
official website or any replacement website or other replacement official publication of
such list or (B) that is Controlled by an SDN.
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(viii) “Affiliated Transferee” means, with respect to any Transfer,
any of the following: (A) each sibling of the transferor, the spouse of the transferor, and
each parent, child, grandchild or great-grandchild of the transferor (including relatives by
marriage); (B) any trust for the benefit of the transferor or any of the foregoing members
of his or her family; (C) where the transferor is a trust, any beneficiary of the trust or any
of the foregoing family members of a beneficiary of the trust, or any other trust established
for the benefit of any of the foregoing; and (D) each Person that Controls, is Controlled
by, or is under common Control of, the transferor or any of the foregoing Persons.
In addition, for purposes of this Section 2.1, the quantum of a Person’s indirect
ownership in any other Person is calculated as the percentage of the proportional
ownership interest at each level. As an example, if Person A owns a 50% interest in
Person B and Person B owns a 50% interest in Person C, then Person A would be
deemed to have a 25% indirect ownership interest in Person C.
2.2 City. The City is the City of Palm Desert, a charter city and municipal
corporation.
2.3 Notices.
(a) To Developer. Notices to the Developer shall be given or served by
(a) recognized national overnight delivery service, or (b) facsimile with a confirmed receipt
of such transmittal, provided a copy of such facsimile notice is also sent by mail, as
provided below, or (c) first-class mail or certified mail, return receipt requested, addressed
as follows, or to such other address(es) as the Developer may from time to time designate
by notice to the other Parties:
Desert Wave Ventures, LLC
Attn: Don Rady
1555 Camino Del Mar, Suite 315C
Del Mar, CA 92014
With a copy to:
Don Rady
Value Real Estate
1919 Grand Ave
San Diego, CA 92109
With copy to:
Coast Law Group, LLP
1140 S. Coast Hwy 101
Encinitas, CA 92024
Attention: Marco Gonzalez
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(b) To City. Notices to the City shall be given or served by
(a) recognized national overnight delivery service, or (b) facsimile with a confirmed receipt
of such transmittal, provided a copy of such facsimile notice is also sent by mail, as
provided below, or (c) first-class mail or certified mail, return receipt requested, at the
following address, or to such other address(es) as the City may from time to time
designate by notice to the other Parties:
City of Palm Desert
Attention: City Manager
73510 Fred Waring Dr.
Palm Desert, California 92260
With a copy to:
City Attorney
City of Palm Desert
73510 Fred Waring Dr.
Palm Desert, California 92260
(c) Forms of Delivery. Facsimile notice shall be deemed given on the
date set forth in the sender’s confirmation notice; overnight delivery notice shall be
deemed given the next business day from when sent; and mailed notice shall be deemed
to have been given or served, if mailed by first class mail, on the third business day from
when mailed, and, if by certified mail, on the date set forth in the return receipt.
3. TERM.
3.1 Term. The term of this Agreement shall commence on the Execution Date
and shall expire upon the completion of all improvements for the Surf Lagoon, Surf
Center, restaurant and Parking on or prior to the applicable Target Date set forth in the
Schedule of Performance, Attachment No. 7 attached hereto and incorporated herein by
this reference (the “Construction Completion”) unless earlier terminated pursuant to the
terms of this Agreement.
4. DESIGN AND DEVELOPMENT OF PROJECT.
4.1 Design and Development of the Project.
(a) The Project shall be designed by the Developer in accordance with
the Scope of Development, the Project Existing Approvals and this Agreement.
(b) The final designs and plans for the Developer’s Improvements (as
defined in Attachment 1, attached hereto and incorporated herein by this reference) shall
provide for build out consistent with the DSRT SURF Specific Plan approved for the
Project and the Existing Approvals and Implementing Approvals.
(c) The Developer shall comply with all Laws applicable to the Project,
including, without limitation, the City’s Municipal Code.
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(d) The Developer shall comply with all Laws applicable to the
development and construction of the Developer’s Improvements.
(e) The Developer shall pay when due all fees pertaining to the review
and approval of the Developer’s Improvements that are lawfully required by any
government agency, including, without limitation, the City and by any public utility. The
Developer shall endeavor to obtain, prior to the commencement of construction of the
Developer’s Improvements, any and all governmental approvals and permits that are
required for commencement of such construction and any and all discretionary
governmental approvals and permits that are required for completion of the Developer’s
Improvements.
4.2 City Infrastructure Improvements. The City shall not be responsible for
any infrastructure improvements for the Project.
4.3 Submission and Approval of Construction Documents and Building
Permit and Grading Permit Applications.
(a) On or before the Target Date set forth in the Schedule of
Performance, the Developer shall submit for approval to the City Construction Documents
for the first phase of Developer’s Improvements and Building Permit and Grading Permit
Applications in accordance with clauses (i) and (ii) below, respectively, and to the City,
Building Permit and Grading Permit Applications for the first phase of Developer’s
Improvements in accordance with clause (iii) below.
(i) Construction Documents: On or before the Target Date set
forth in the Schedule of Performance, Developer shall submit to the City “Construction
Documents” for development of the first phase of Developer’s Improvements
(“Construction Documents Set”) demonstrating conformance with the design approvals
at 100% Design Development and 100% Construction Documents completion of such
construction drawings. Each Construction Documents Set shall be prepared by an
architect or an engineer licensed in the State of California. Inspection, review, or
comment by the City with respect to any of the Construction Documents shall not in any
way affect or reduce the Developer’s obligations under this Agreement or be deemed to
be a warranty or acceptance by the City with respect to such Construction Documents; it
being understood that the City is relying upon the Developer to design and engineer the
Developer’s Improvements.
(ii) Building Permit and Grading Permit Applications: On or
before the Target Date set forth in the Schedule of Performance, Developer shall submit
for review by the City “Grading Permit Application” and “Building Permit Application” for
development of the first phase of Developer’s Improvements. Grading Permit and
Building Permit Applications shall be prepared by an architect or engineer, as appropriate,
licensed to do business in the State of California. Inspection, review, approval or
comment by the City with respect to any of the Grading Permit or Building Permit
Applications shall not in any way affect or reduce the Developer’s obligations under this
Agreement or be deemed to be a warranty or acceptance by the City with respect to such
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Building Permit or Grading Permit Applications; it being understood that the City is relying
upon the Developer to design and engineer the Developer’s Improvements in accordance
with this Agreement.
(iii) Grading Permit and Building Permits: All standard City fees
with respect to the issuance of the Grading Permit and Building Permits will apply and
shall be paid by the Developer.
(b) With each of the two submissions of Construction Documents and
the Grading Permit and Building Permits Applications pursuant to this Section 4.3, the
Developer shall submit to the City, Development Cost estimates for such portion of the
first phase of Developer’s Improvements, prepared by Developer, Developer’s general
contractor or a qualified cost estimator in such detail as warranted by the extent of detail
and completeness of the Construction Documents and Grading Permit and Building
Permits Applications submitted to the City. Such Development Cost estimates shall be
prepared in good faith and shall reflect the reasonable judgment of the Developer
regarding such estimates. The Parties acknowledge that such estimates are estimates
only and that final Development Costs may differ from the previously provided estimates.
Whenever this Agreement requires the Developer to submit Development Cost estimates
for such portion of Developer’s Improvements, a separate Development Cost estimate
shall be prepared for each major category of such portion of the Developer’s
Improvements, including but not limited to: the Surf Lagoon, the Surf Center and grounds,
and the Surf Center Parking Lot (each, a “Major Component of Developer’s
Improvements”). The parties understand and agree Development Cost estimates for the
Project will comply with the Construction Specialties Institute divisions for cost estimation.
4.4 Agreement on Total Project Costs.
(a) “Hard Construction Costs” shall mean, with respect to any
component of the Project, all costs that the Developer is required to pay to the respective
construction contractor for the construction of such component of the Project.
(b) Concurrent with the Developer submission of the Building Permit
Application for the Developer’s Improvements, the Developer shall submit final estimates
(non-GMP) of the total Development Costs of the Developer’s Improvements, including
the items set forth in Section 4.4(d) to review compliance with the Final Plan of Finance
and Final Project Budget.
(c) Following receipt of the Developer’s final estimates of the
Development Costs of the Developer’s Improvements pursuant to Section 4.4(b), the City
may review such Development Cost estimates. The final estimates (non-GMP) of the
Development Costs which are either (i) reviewed by the City as submitted by the
Developer in accordance with Section 4.4(b) or (ii) agreed by the City and the Developer,
are herein referred to as the “Total Project Costs”.
(d) As to each Major Component of Developer’s Improvements such
estimates shall include an estimate for all Development Costs in connection with such
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Major Component of Developer’s Improvements. “Development Costs” shall mean, with
respect to any component of the Project, (i) the costs of the entire design, architectural
work, engineering work, development work and construction work and (ii) contingency
which shall be in an amount equal to at least ten percent (10%) of the sum of the costs
set forth in clause (i).
(e) The Project Costs are to be funded as set forth in the “Preliminary
Plan of Finance” (Attachment No. 2 attached hereto and incorporated herein by
reference). Attachment No. 3 is a “Preliminary Project Budget” that includes Project Costs
and the Preliminary Plan of Finance. Both the Preliminary Plan of Finance and the
Preliminary Project Budget shall be updated (“Final Plan of Finance” and “Final Project
Budget”, respectively) by Developer for City review and written approval, on or prior to
the applicable target date set forth in the Schedule of Performance, Attachment No. 7
attached hereto and incorporated herein by this reference.
(f) The Developer shall submit executed guaranteed maximum price
construction contracts or fixed price construction contracts, as applicable, with respect to
the Developer’s Improvements, based on signed bids from Developer’s contractors and
subcontractors (if applicable), other than bids with respect to the Project, for the
construction of the Developer’s Improvements (all of which shall be provided to the City)
on or before the Target Date set forth in the Schedule of Performance. The Developer
shall provide drafts of such contracts to the City, as applicable, for the City’s review and
comment before execution, in which case the City, as applicable, shall promptly provide
to the Developer any comments thereto.
4.5 Developer Releases. Within thirty (30) days of the execution of this
Agreement, Developer shall execute and deliver (i) a release, in recordable form
acceptable to the City Attorney, of that certain Fee Deferral Agreement, dated December
15, 2022 (“Fee Deferral Agreement”), and recorded on December 21, 2022, as Document
No. 2022-0510282 in the official records of Riverside County, and (ii) a termination
agreement, in a form acceptable to the City Attorney, providing for the termination of that
certain Transient Occupancy Tax Reimbursement Agreement, dated ______, 2022, by
and between City and Developer. Any fees that may have previously been deferred
pursuant to the Fee Deferral Agreement shall be paid to the City in full prior to the
issuance of any building permit for vertical construction.
4.6 Insurance. Without limiting Developer’s indemnification of the City of Palm
Desert, and prior to commencement of construction of the Project, herein defined as
“Work” for this Article 4 and this Agreement, Developer shall obtain, provide and maintain,
or cause to be obtained, provided, and maintained, at its own expense during the term of
this Agreement, policies of insurance of the type and amounts described below and in a
form satisfactory to the City.
4.6.1 General Liability Insurance. Developer or its General Contractor
shall maintain commercial general liability insurance with coverage at least as broad as
Insurance Services Office form CG 00 01, in an amount not less than $2,000,000 per
occurrence, $4,000,000 general aggregate, for bodily injury, personal injury, and property
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damage, and a $4,000,000 completed operations aggregate. The policy must include
contractual liability that has not been amended. Any endorsement restricting standard
ISO “insured contract” language will not be accepted.
4.6.2 Automobile Liability Insurance. Developer or its General
Contractor shall maintain automobile insurance at least as broad as Insurance Services
Office form CA 00 01 covering bodily injury and property damage for all activities of the
Developer arising out of or in connection with Work to be performed under this
Agreement, including coverage for any owned, hired, non-owned or rented vehicles, in
an amount not less than $1,000,000 combined single limit for each accident.
4.6.3 Umbrella or Excess Liability Insurance. Developer or its General
Contractor may opt to utilize umbrella or excess liability insurance in meeting insurance
requirements. In such circumstances, Developer or its General Contractor shall obtain
and maintain an umbrella or excess liability insurance policy that will provide bodily injury,
personal injury and property damage liability coverage at least as broad as the primary
coverages set forth above, including commercial general liability, automobile liability, and
employer’s liability. Such policy or policies shall include the following terms and
conditions:
4.6.4 Workers’ Compensation Insurance. Developer or its General
Contractor shall maintain Workers’ Compensation Insurance (Statutory Limits) and
Employer’s Liability Insurance (with limits of at least $1,000,000) for Developer’s
employees in accordance with the laws of the State of California, Section 3700 of the
Labor Code. In addition, Developer or its General Contractor shall require each
subcontractor to similarly maintain Workers’ Compensation Insurance and Employer’s
Liability Insurance in accordance with the laws of the State of California, Section 3700 for
all of the subcontractor’s employees. Developer shall submit to City, along with the
certificate of insurance, a Waiver of Subrogation endorsement in favor of the City of Palm
Desert, its officers, agents, employees and volunteers.
4.6.5 Pollution Liability Insurance. Developer or its General Contractor
shall maintain Environmental Impairment Liability Insurance shall be written on a
Contractor’s Pollution Liability form or other form acceptable to Agency providing
coverage for liability arising out of sudden, accidental and gradual pollution and
remediation. The policy limit shall be no less than $1,000,000 dollars per claim and in the
aggregate. All activities contemplated in this agreement shall be specifically scheduled
on the policy as “covered operations.” The policy shall provide coverage for the hauling
of waste from the project site to the final disposal location, including non-owned disposal
sites.
4.7 Other provisions or requirements:
4.7.1 Proof of Insurance. Developer or its General Contractor shall
provide certificates of insurance to City as evidence of the insurance coverage required
herein, along with a waiver of subrogation endorsement for workers’ compensation.
Insurance certificates and endorsements must be approved by City’s Risk Manager prior
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to commencement of performance. Current certification of insurance shall be kept on file
with City at all times during the term of this contract. City reserves the right to require
complete, certified copies of all required insurance policies, at any time.
4.7.2 Duration of Coverage. Developer or it General Contractor shall
procure and maintain for the duration of the contract insurance against claims for injuries
to persons or damages to property, which may arise from or in connection with the
performance of the Work hereunder by Developer, its agents, representatives, employees
or subcontractors. Developer or its General Contractor must maintain general liability and
umbrella or excess liability insurance for a minimum of three (3) years after project
completion. The City of Palm Desert and its officers, officials, employees, and agents
shall continue as additional insureds under such policies.
4.7.3 Primary/Noncontributing. Coverage provided by Developer or its
General Contractor shall be primary and any insurance or self-insurance procured or
maintained by City shall not be required to contribute with it. The limits of insurance
required herein may be satisfied by a combination of primary and umbrella or excess
insurance. Any umbrella or excess insurance shall contain or be endorsed to contain a
provision that such coverage shall also apply on a primary and non-contributory basis for
the benefit of City, before the City’s own insurance or self-insurance shall be called upon
to protect it as a named insured.
4.7.4 Products/Completed Operations Coverage. Products/completed
operations coverage shall extend a minimum of three (3) years after project completion.
Coverage shall be included on behalf of the insured for covered claims arising out of the
actions of independent contractors. If the insured is using subcontractors, the Policy must
include work performed “by or on behalf” of the insured. Policy shall contain no language
that would invalidate or remove the insurer’s duty to defend or indemnify for claims or
suits expressly excluded from coverage. Policy shall specifically provide for a duty to
defend on the part of the insurer. The City, its officials, officers, agents, and employees,
shall be included as additional insureds under the Products and Completed Operations
coverage.
4.7.5 City’s Rights of Enforcement. In the event any policy of insurance
required under this Agreement does not comply with these requirements or is canceled
and not replaced, City has the right but not the duty to obtain the insurance it deems
necessary. Any premium paid by City will be promptly reimbursed by Developer or City
will withhold amounts sufficient to pay premium from Developer payments.
4.7.6 Acceptable Insurers. All insurance policies shall be issued by an
insurance company currently authorized by the Insurance Commissioner to transact
business of insurance, with an assigned policyholders’ and Financial Size Category Class
VII (or larger) in accordance with the latest edition of Best’s Key Rating Guide, unless
otherwise approved by the City’s Risk Manager.
4.7.7 Waiver of Subrogation. All insurance coverage maintained or
procured pursuant to this agreement shall be endorsed to waive subrogation against the
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City of Palm Desert, its elected or appointed officers, agents, officials, employees and
volunteers, or shall specifically allow Developer or others providing insurance evidence
in compliance with these specifications to waive their right of recovery prior to a loss.
Developer hereby waives its own right of recovery against the City of Palm Desert, its
elected or appointed officers, agents, officials, employees and volunteers, and shall
require similar written express waivers and insurance clauses from each of its
subcontractors.
4.7.8 Enforcement of Contract Provisions (non estoppel). Developer
acknowledges and agrees that any actual or alleged failure on the part of the City to
inform Developer of non-compliance with any requirement imposes no additional
obligations on the City nor does it waive any rights hereunder.
4.7.9 Requirements Not Limiting. Requirements of specific coverage
features or limits contained in this Section are not intended as a limitation on coverage,
limits or other requirements, or a waiver of any coverage normally provided by any
insurance. Specific reference to a given coverage feature is for purposes of clarification
only as it pertains to a given issue and is not intended by any party or insured to be all
inclusive, or to the exclusion of other coverage, or a waiver of any type. If the Developer
maintains higher limits than the minimums shown above, the City requires and shall be
entitled to coverage for the higher limits maintained by the Developer. Any available
insurance proceeds in excess of the specified minimum limits of insurance and coverage
shall be available to the City.
4.7.10 Notice of Cancellation. Developer agrees to oblige its insurance
agent or broker and insurers to provide to City with a thirty (30) day notice of cancellation
(except for nonpayment for which a ten (10) day notice is required) or nonrenewal of
coverage for each required coverage.
4.7.11 Additional Insured Status. General liability, automobile liability, and
if applicable, pollution liability policies shall provide or be endorsed to provide that the City
of Palm Desert and its officers, officials, employees, agents, and volunteers shall be
additional insureds under such policies. This provision shall also apply to any
excess/umbrella liability policies. Coverage shall be at least as broad as coverage
provided by ISO’s Owners, Lessees, or Developers Additional Insured Endorsement for
the ongoing (i.e. ISO Form CG 20 10) and completed operations (i.e. ISO Form CG 20
37) of Developer.
4.7.12 Prohibition of Undisclosed Coverage Limitations. None of the
coverages required herein will be in compliance with these requirements if they include
any limiting endorsement of any kind that has not been first submitted to City and
approved of in writing.
4.7.13 Separation of Insureds. A severability of interests provision must
apply for all additional insureds ensuring that Developer’s insurance shall apply
separately to each insured against whom claim is made or suit is brought, except with
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respect to the insurer’s limits of liability. The policy(ies) shall not contain any cross-liability
exclusions.
4.7.14 Pass Through Clause. Developer or its General Contractor agrees
to ensure that its subconsultants, subcontractors, and any other party involved with the
project who is brought onto or involved in the project by Developer, shall maintain
commercial general liability insurance with coverage at least as broad as Insurance
Services Office form CG 00 01, in an amount not less than $1,000,000 per occurrence,
$2,000,000 general aggregate, for bodily injury, personal injury, and property damage,
and a $2,000,000 completed operations aggregate. The policy must include contractual
liability that has not been amended. Any endorsement restricting standard ISO “insured
contract” language will not be accepted. Developer or its General Contractor agrees to
monitor and review all such coverage and assumes all responsibility for ensuring that
such coverage is provided in conformity with the requirements of this section. Developer
agrees that upon request, all agreements with consultants, subcontractors, and others
engaged in the project will be submitted to City for review.
4.7.15 City’s Right to Revise Requirements. If commercially reasonable,
the City or its Risk Manager reserves the right at any time during the term of the contract
to change the amounts and types of insurance required by giving the Developer ninety
(90) days advance written notice of such change. If such change results in substantial
additional cost to the Developer, the City and Developer may renegotiate Developer’s
compensation. If the City reduces the insurance requirements, the change shall go into
effect immediately and require no advanced written notice.
4.7.16 Self-Insured Retentions. Any self-insured retentions must be
declared to and approved by City. City reserves the right to require that self-insured
retentions be eliminated, lowered, or replaced by a deductible. Self-insurance will not be
considered to comply with these specifications unless approved by City.
4.7.17 Timely Notice of Claims. Developer shall give City prompt and
timely notice of claims made or suits instituted that arise out of or result from Developer’s
performance under this Agreement, and that involve or may involve coverage under any
of the required liability policies.
4.8 Safety.
DEVELOPER SHALL EXECUTE AND MAINTAIN ITS WORK SO AS TO AVOID
INJURY OR DAMAGE TO ANY PERSON OR PROPERTY. IN CARRYING OUT ITS
SERVICES, THE DEVELOPER SHALL AT ALL TIMES BE IN COMPLIANCE WITH
ALL APPLICABLE LOCAL, STATE AND FEDERAL LAWS, RULES AND
REGULATIONS, AND SHALL EXERCISE ALL NECESSARY PRECAUTIONS FOR
THE SAFETY OF EMPLOYEES APPROPRIATE TO THE NATURE OF THE WORK
AND THE CONDITIONS UNDER WHICH THE WORK IS TO BE PERFORMED.
SAFETY PRECAUTIONS, WHERE APPLICABLE, SHALL INCLUDE, BUT SHALL
NOT BE LIMITED TO: (A) ADEQUATE LIFE PROTECTION AND LIFESAVING
EQUIPMENT AND PROCEDURES; (B) INSTRUCTIONS IN ACCIDENT PREVENTION
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FOR ALL EMPLOYEES AND SUBCONTRACTORS, SUCH AS SAFE WALKWAYS,
SCAFFOLDS, FALL PROTECTION LADDERS, BRIDGES, GANG PLANKS,
CONFINED SPACE PROCEDURES, TRENCHING AND SHORING, EQUIPMENT AND
OTHER SAFETY DEVICES, EQUIPMENT AND WEARING APPAREL AS ARE
NECESSARY OR LAWFULLY REQUIRED TO PREVENT ACCIDENTS OR INJURIES;
AND (C) ADEQUATE FACILITIES FOR THE PROPER INSPECTION AND
MAINTENANCE OF ALL SAFETY MEASURES.
4.9 Developer’s Indemnity Agreement/Hold Harmless. Except for sole
negligence or willful misconduct of an Indemnitee, the Developer hereby assumes liability
for and agrees to defend, indemnify, protect and hold harmless the City and its officers,
agents, and employees, and the City Engineer from and against all claims, charges,
damages, demands, actions, proceeding, losses, stop payment notices, costs, expenses
(including counsel fees), judgments, civil fines and penalties, liabilities of any kind or
nature whatsoever, which may arise out of or encountered in connection with this
Agreement or the performance of the Work including, but not limited to death, or bodily
or personal injury to persons, or damage to property, including property owned by or
under the care and custody of the City, and for civil fines and penalties, that may arise
from or be caused, in whole or in part, by any negligent or other act or omission of
Developer, its officers, agents, employees, or Subcontractors including, but not limited to,
liability arising from:
(a) Any dangerous, hazardous, unsafe or defective condition of, in or on
the premises, of any nature whatsoever, which may exist by reason of any act, omission,
neglect, or any use or occupation of the premises by the Developer, its officers, agents,
employees, or subcontractors;
(b) Any operation conducted upon or any use or occupation of the
premises by Developer, its officers, agents, employees, or Subcontractors under or
pursuant to the provisions of this contract or otherwise;
(c) Any act, omission or negligence of Developer, its officers, agents,
employees or Subcontractors;
(d) Any failure of Developer, its officers, agents or employees to comply
with any of the terms or conditions of this Contract or any applicable federal, state,
regional, or municipal law, ordinance, rule or regulation.
The Developer also agrees to indemnify City and pay for all damage or loss
suffered by City including, but not limited to damage or loss of City Property, loss of City
revenue from any source, caused by or arising out of the conditions, operations, uses,
occupations, acts, omissions or negligence referred to in Sections 4.9 (a), (b), (c), and (d)
above.
Developer’s obligations under this Section apply regardless of whether or not such
claim, charge, damage, demand, action, proceeding, loss, stop payment notice, cost,
expense, judgment, civil fine or penalty, or liability was caused in part or contributed to by
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an Indemnitee. However, without affecting the rights of the City under and provision of
this agreement, Developer shall not be required to indemnify and hold harmless City for
liability attributable to the active negligence of City, provided such active negligence is
determined by agreement between the parties or by the findings of a court of competent
jurisdiction. In instances where City is shown to have been actively negligent and where
City’s active negligence accounts for only a percentage of the liability involved, the
obligation of the Developer will be for that entire portion or percentage of liability not
attributable to the active negligence of City.
Developer agrees to obtain executed indemnity agreements with provisions similar
to those set forth here in this section from each and every subcontractor or any other
person or entity involved by, for, with, or on behalf of Developer in the performance of this
agreement. In the event that Developer fails to obtain such indemnity obligations from
others as required here, Developer agrees to be fully responsible according to the terms
of this section.
Failure of City to monitor compliance with these requirements imposes no
additional obligations on City and will in no way act as a waiver of any rights hereunder.
This obligation to indemnify and defend City as set forth here is binding on the successors,
assigns or heirs of Developer and shall survive the termination of this agreement or this
section.
This Indemnity shall survive termination of the Agreement hereunder. This
Indemnity is in addition to any other rights or remedies that the Indemnitees may have
under the law or under any other Contract Documents or Agreements. In the event of
any claim or demand made against any party which is entitled to be indemnified
hereunder, City may, in its sole discretion, reserve, retain or apply any monies to the
Developer under this Agreement for the purpose of resolving such claims; provided,
however, City may release such funds if the Developer provides City with reasonable
assurance of protection of the Indemnitees’ interests. City shall, in its sole discretion,
determine whether such assurances are reasonable.
4.10 Payment Bonds and Performance Bonds.
(a) Prior to the commencement of construction on the first phase of
Developer’s Improvements the Developer shall furnish the City with the following separate
corporate surety bonds from each contractor that is responsible for the construction of a
Major Component of the first phase of Developer’s Improvements, or, in each case, a
portion thereof:
(i) A performance bond (“Performance Bond”) issued by a surety
company licensed and admitted to transact business as such in the State of California, in
an amount not less than one hundred percent (100%) of the estimated Hard Construction
Costs of the applicable Major Component of the first phase of Developer’s Improvements,
or a portion thereof, as applicable. The Performance Bond shall name Developer as
principal obligee, the City, each of the Private Construction Lenders and each of the public
lenders as co-obligees. The Performance Bond shall assure full completion of the
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construction by such contractor of such Major Component of the first phase of
Developer’s Improvement, or such portion thereof, as applicable; and
(ii) A payment bond (“Payment Bond”) issued by a surety
company licensed and admitted to transact business as such in the State of California, in
an amount equal to one hundred percent (100%) of the estimated Hard Construction
Costs of the applicable Major Component of the first phase of Developer’s Improvements,
or a portion thereof, as applicable, guaranteeing payment for all materials, provisions,
supplies and equipment used in, upon, for or about the performance of the construction
by such contractor of such Major Component of the first phase of Developer’s
Improvements, or such portion thereof and for labor done thereon and protecting the City
from any and all liability, loss or damages arising out of or in connection with any failure
to make any such payments. The Payment Bond shall name Developer as principal
obligee, the City, each of the Private Construction Lenders and each of the public lenders
as co-obligees.
(b) The Payment Bonds and Performance Bonds shall be in form and
content acceptable to the City Attorney.
4.11 Liens and Claims.
(a) The Developer agrees that, if any Professional or materialman
performing the Work, or furnishing materials in connection therewith, or if anyone claiming
directly or indirectly under or through the Developer or any affiliate, professional or
materialman shall file or cause to be filed any mechanics lien or other lien or security
interest against the Project Site, the Developer’s Improvements, or any portion thereof,
or against any assets of or funds appropriated to or by the City or the City, then, within
thirty (30) days after the Developer receives notice of filing thereof, the Developer shall
cause such lien or security interest to be discharged of record by payment, deposit, bond,
order of court of competent jurisdiction or otherwise. If the Developer shall fail to cause
such lien or security interest to be discharged of record within the period aforesaid, then,
in addition to any other right or remedy, the City or the City may, but shall not be obligated
to, discharge the same either by paying the amount claimed to be due from retentions or
any progress payment next due to the Developer or by procuring the discharge of record
of such lien or security interest. Any amount so paid by the City or the City, including all
reasonable costs and expenses incurred by the City or the City in connection therewith,
shall be payable by the Developer to the City or the City, as applicable, on demand. Each
of the City will endeavor to notify Developer of any lien notices that it receives; provided,
however, that the failure by City to so notify the Developer shall not affect Developer’s
obligations hereunder.
(b) Notwithstanding Section 4.13(a), the Developer shall not be required
to discharge of record any such lien or security interest if the Developer is in good faith,
and consistent with applicable Law, at its own expense, currently and diligently contesting
the same; provided that the Developer first records a surety bond sufficient to release
such lien or such security interest, as applicable.
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5. REQUIREMENTS OF PARTIES.
5.1 Periodic Review; Meet and Confer; Cooperation Between Parties.
(a) The City shall have the option, not more frequently than every three
(3) months during the Term, to conduct a review (the “Periodic Review”) to evaluate,
among other things, the extent to which the Developer is complying with its obligations
under this Agreement or the Schedule of Performance, and the Parties’ determinations
of whether it is feasible to continue with the development of the Project pursuant to this
Agreement (collectively, “Periodic Review Matters”).
(b) Meet and Confer. (i) Within thirty (30) days following submittal by the
Developer of the information and materials concerning Developer obligations and/ or the
Schedule of Performance as reasonably requested by the City and/or the City in
accordance with Section 5.1(a) or (ii) within five (5) days following notice of any Event of
Default, City staff and the Developer shall meet and confer to seek mutual resolution of
areas of concern covered in the Periodic Review or such Event of Default, as applicable,
and to come to a mutual agreement whether to take one of the following actions:
(i) Pause. To the extent feasible, pause any actions and
activities of the Parties pursuant to this Agreement (except, to the extent applicable,
insurance, maintenance and indemnification obligations) for a period up to thirty (30) days
to enable the Parties to schedule one or more additional meet and confer events to gather
additional information and continue discussions of the Periodic Review Matters or such
Event of Default, as applicable; or
(ii) Delay. To the extent feasible, delay for a period up to thirty
(30) days any further actions or activities of the Parties under this Agreement to enable
the Parties to further investigate their respective positions and whether it is feasible to
proceed with the development of the Project as provided for hereunder. If disagreements
between the Parties are not resolved pursuant to Section 5.1(b)(i) or (ii), then the Parties
shall attempt to resolve such disagreements through mediation in accordance with
Section 7.5. If such disagreements are not resolved through mediation within one
hundred twenty (120) days after the commencement of mediation, then either Party may
terminate this Agreement pursuant to Article 8, subject to the City’s rights pursuant to the
Deed of Sale and the Performance Deed of Trust and Security Agreement.
(c) If disagreements between the Parties are resolved pursuant to
Section 5.1(b), then, if applicable, the Parties shall revise the Schedule of Performance
to incorporate the changes agreed to by the Parties pursuant to Section 5.1(b) and such
revisions to the Schedule of Performance shall be made without the need for an
amendment to this Agreement in accordance with Section 9.9.
(d) Notwithstanding any other provision in this Agreement, in the event
Schedule of Performance extensions pursuant to Sections 5.1(b)(i) and 5.1(b)(ii) above
exceed one hundred and eighty (180) days cumulatively, any Party may elect to terminate
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this Agreement in accordance with Article 8, subject to the City’s rights pursuant to the
Deed of Sale and the Performance Deed of Trust and Security Agreement.
(e) All approvals required by the City and Developer under this
Agreement shall not be unreasonably withheld or denied (except where such actions are
specifically said to be in the sole and absolute discretion of a Party) and, where
specifically referenced in this Agreement or in the Schedule of Performance, shall be
given within the times set forth in this Agreement or in the Schedule of Performance.
(f) City and Developer shall, to the extent reasonably necessary,
cooperate with each other to enable each Party to perform its obligations under this
Agreement; provided, however, that in the event that any Party is asked to provide
cooperation, assurance, assistance, documentation, or investigation and such Party
determines that complying with such request will be unlawful, unreasonably burdensome,
unreasonably expensive, or unreasonably time consuming, such Party may refuse to
cooperate, without liability to that Party, by providing notice to the Party requesting the
cooperation. Notwithstanding this provision, this Section 5.1(f) does not limit City’s
discretionary actions and City reserves the right to exercise discretionary actions, each in
in its sole authority and in its sole and absolute discretion
5.2 Post-Closing Obligations. The obligations of the Developer set forth in
Section 4.5, in this Section 5.2, in Section 6, and Items 1 through [25] set forth in the
Schedule of Performance attached as Attachment No. 7, shall be referred to herein,
collectively, as the “Post-Closing Obligations.” Each such Post-Closing Obligation shall
be satisfied on or prior to the Target Date set forth in the Schedule of Performance:
(a) The City shall have received from the Developer in accordance with
this Agreement final Development Cost estimates for the first phase of the Developer’s
Improvements as required under Section 4.4(d);
(b) The City shall have received and reasonably approved in
accordance with this Agreement, on or prior to the applicable Target Date set forth in the
Schedule of Performance, the Developer provided independent third-party verification
that each Unaffiliated Third Party that acquires any membership interests in the
Developer is reputable (which shall mean the absence of reputations for dishonesty,
criminal conduct or association with criminal elements – “reputable” shall not mean
“prestigious”, nor shall the determination of whether one is reputable involve
considerations of personal taste or preference), and has no history of, or reputation for,
either discriminatory employment practices which violate any Laws or non-compliance
with applicable Environmental Laws or listing on the Prohibited Person list (each, an
“Equity Investor” and, collectively, “the Equity Investors”);
(c) The City shall have received from the Developer and reasonably
accepted the terms of (i) the executable versions of the agreements with the Equity
Investor(s) evidencing the commitments of such Equity Investors to make contributions
for the first phase of Developer’s Improvements Costs (the “Equity Investor Contribution”)
on or prior to the applicable Target Date set forth in the Schedule of Performance;
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(d) The City shall have received from the Developer and shall have
reviewed on or prior to the applicable Target Date set forth in the Schedule of
Performance, the binding final first phase loan documents (“Loan Documents”) to confirm
conformance with the Final Plan of Finance and are in an amount not in excess of the
Developer’s Debt Contribution where:
(i) “Developer’s Debt Contribution” shall mean the Developer’s
Contribution (as hereinafter defined) less the amount of the Equity Investor Contribution;
and
(ii) “Developer’s Contribution” shall mean the budgeted amount
for the first phase Developer’s Improvements Costs (currently estimated to be
$90,000,000, including all furnishings, fixtures and equipment);
(e) Developer shall have obtained commitments for all financing that is
necessary to satisfy its respective obligations for the first phase of Developer’s
Improvements under the Final Plan of Finance and Final Project Budget, with such
financing to close on or before October 1, 2023;
(f) Developer covenants to provide to City, on or before October 1,
2023, evidence of financing sufficient for the Developer to perform its obligations under
this Agreement satisfactory to the City determined in its sole and absolute discretion.
Evidence of financing shall include, at a minimum, the following: (i) a copy of the loan
commitment obtained by Developer from one or more financial institutions for the
mortgage loan or loans for financing to fund the construction, completion, operation and
maintenance of the first phase of the Project during the term of the loan, subject to such
lenders' reasonable, customary and normal conditions and terms; (ii) other
documentation satisfactory to the City as evidence of other sources of Project Equity
sufficient to demonstrate that Developer equity funds in the amount necessary to cover
the difference between the total cost of the Completion of the Construction of the first
phase of the Project and the First Phase Project Construction Loan.
5.3 Security for Post-Closing Obligations.
(a) As security for Developer’s completion of any “Post-Closing
Obligations,” the conveyance of the Project Site (including both the City Property and the
SARDA Property) to Developer shall be subject to a "Power of Termination" as defined in
California Civil Code Section 885.010 as set forth below.
(i) If the Developer fails to satisfy the Post-Closing Obligations
by the dates detailed in the Schedule of Performance (subject to delay for events of force
majeure)(the “Post-Closing Obligations Deadlines”), the City may exercise its Power of
Termination by delivering written notice to Developer. Developer shall not be entitled to
any cure period for a failure to satisfy one or more of the Post-Closing Obligations by the
applicable Post-Closing Obligations Deadline. Upon receipt from City of written notice of
City’s exercise of its Power of Termination, Developer agrees to, and shall, within five (5)
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calendar days, execute and deliver to City a quit claim deed relinquishing any and all of
Developer’s right, title, and interest in and to the Project Site.
(ii) Developer shall not allow or permit any charge, pledge,
mortgage, lien, hypothecation, usufruct, deed of trust, security interest, adverse claim or
interest, restriction or easement of any kind (each, an “Encumbrance”) to encumber the
Project Site or any portion thereof unless and until it has fully satisfied the conditions set
forth in Section 5.2(b), (c), (d), and (p) (the “Financing Plan Conditions”), whether as a
condition precedent to Close of Escrow or as a Post-Closing Obligation, including
obtaining City’s written approval of the Financing Plan Conditions being fully satisfied (the
“Encumbrance Prohibition”), and any violation of the Encumbrance Prohibition shall
constitute a material breach of this Agreement, provided, however, that the Encumbrance
Prohibition shall not apply to a Performance Deed of Trust and Security Agreement made
for the benefit of the City. Notwithstanding anything to the contrary set forth herein, upon
such breach by Developer, City shall be entitled to exercise its Power of Termination by
delivering written notice to Developer. Developer shall not be entitled to any cure period
for a breach of the Encumbrance Prohibition. Upon receipt from City of written notice of
City’s exercise of its Power of Termination, Developer agrees to, and shall, within five (5)
business days execute and deliver to City a quit claim deed relinquishing any and all of
Developer’s right, title, and interest in and to the Project Site.
(iii) Except to resolve Developer’s claims of delay for events of
force majeure, Developer waives its right to judicially contest City’s exercise of its Power
of Termination under this Section 5.3(e).
(iv) If the Developer is in default of Post-Closing Obligations under
this Section 5.3(a) prior to the issuance by the City of a Certificate of Occupancy for a
Residential Unit the City may, in its sole discretion, as a remedy in addition to any and all
other remedies set forth herein or available at law or equity, re-enter and take possession
of the Project Site with all then-existing improvements, and vest in the City the estate
previously conveyed to the Developer. The City's rights under this Section shall terminate
and be of no further force and effect upon the earlier of satisfaction of the Post-Closing
Obligations or the issuance by the City of a Certificate of Occupancy for a Residential
Unit.
(v) The City's Power of Termination shall be subordinate and
subject to and be limited by and shall not defeat, render invalid, or limit:
(vi) Any financing instrument secured by the Property (including
any loans or ground lease); or
(vii) Any rights or interests provided in this Agreement for the
protection of the holder of a secured financing right with respect to the Property; or
(viii) Any leases affecting the Property as of the date of such
termination.
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This subsection 5.3(e)(vi) shall not apply to City’s exercise of its Power of Termination
pursuant to subsection 5.3(e)(iii) above.
(ix) Upon vesting in the City of title to the Project Site as provided
in this Section 5.3(e), the City shall have the sole discretion to determine the terms and
conditions upon which it shall subsequently dispose of or utilize the Project Site and the
parties shall have no further obligations to one another. Obligations under any guaranties
and ancillary documents in connection with this Agreement shall also terminate and be of
no further force and effect.
(x) Upon the satisfaction of the Post-Closing Obligations
Developer shall be entitled to record a memorandum of release of reversionary rights in
the form attached approved by the City.
(b) As additional security for the benefit of the City, to secure the
performance of Developer’s Post-Closing Obligations set forth in this Agreement,
Developer has executed a Performance Deed of Trust and Security Agreement, dated
December 22, 2022, and recorded on December 21, 2022, as Document No. 2022-
0510281 in the official records of Riverside County.
6. COMMUNITY BENEFIT PAYMENT.
As consideration for City to agree to the removal of a hotel from the Project,
Developer agrees, and shall be obligated to, remit to City in perpetuity, an annual payment
in the initial amount of Five Hundred Thousand Dollars ($500,000), subject to an annual
increase of three percent (3%). The initial payment shall be made on the first day of the
month first following the first anniversary of the City’s issuance of the final certificate of
completion or certificate of occupancy for the first phase of the Project. Concurrent with
the execution of this Agreement, Developer shall execute and deliver to the City for
recording, a Declaration of Restrictions, declaring the annual payment obligation as a
covenant running with the land, in the form attached hereto as Attachment 8.
Upon issuance by the City of a certificate of occupancy for the Residential Units
that will be constructed as the second phase of the Project, the annual payment obligation
required in this Section 6 may be reduced in an amount equal to the annual amount of
Transient Occupancy Tax (“TOT”) received by the City from the Developer’s rental of the
Residential Units and any additional TOT proceeds generated by the Project and paid to
the City.
7. DEFAULTS; REMEDIES.
7.1 General Developer Default. If the Developer shall fail to perform or fulfill
any obligation required of it under this Agreement and/or under the Right of Entry
Agreement and shall not have cured or commenced to cure such failure within thirty (30)
days following written notice thereof from the City (or has commenced to cure such failure,
but is not diligently proceeding to cure such failure), then the Developer shall be in default
under this Agreement (each such event or occurrence, a “Developer Event of Default”).
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In the event of a Developer Event of Default, the City may, in its sole discretion,
(a) extend the time for the Developer to perform the applicable obligation(s) hereunder
for a period of time acceptable to the City beyond the cure period set forth in this
Section 7.1, or (b) terminate this Agreement by giving written notice (as required under
Section 2.4) of such termination to the other Parties. Upon termination, the rights and
obligations of the Parties shall be as set forth in Section 8.2 and Article 8.
7.2 Default by City. If the City shall fail to perform or fulfill any obligation
required of such Party under this Agreement and shall not have cured or commenced to
cure such failure within thirty (30) days following written notice thereof from the Developer
(or has commenced to cure such failure, but is not diligently proceeding to cure such
failure), then the City shall be in default under this Agreement (each such event or
occurrence, a “City Event of Default” and, together with a Developer Event of Default, any
“Event of Default”).
In the event of a City Event of Default, the Developer may, in its sole discretion,
(a) extend the time for the City to perform the applicable obligation(s) hereunder for a
period of time acceptable to the Developer beyond the cure period set forth in this
Section 7.2, or (b) terminate this Agreement by giving written notice (as required under
Section 2.3) of such termination to the other Party. Upon termination, the rights and
obligations of the Parties shall be as set forth in Section 7.4 and Article 8.
7.3 Force Majeure. Notwithstanding anything to contrary contained herein,
neither Party shall be held liable or responsible to the other Party nor be deemed to have
defaulted under or breached this Agreement for failure or delay in fulfilling or performing
any term of this Agreement to the extent, and for so long as, such failure or delay is
caused by or results from causes beyond the reasonable control of the affected Party
limited to the following events that actually directly impact and cause delay the Project:
fire, floods, seismic events, embargoes, war, acts of war (whether war be declared or
not), acts of terrorism, insurrections, riots, civil commotions, strikes, lockouts or other
labor disturbances, pandemics, or other acts of God.
7.4 Remedies Exclusive.
(a) Because of the nature of this Agreement, the Parties agree that
remedies expressly set forth in this Agreement are the only remedies available to the
Parties.
(b) The Developer shall not have any remedy for money damages
against the City except for return of the Deposit in accordance with Article 8.
(c) The City shall not have any remedy for money damages against the
Developer, except for retention of the Deposit in accordance with Article 8.
(d) The City, and the Developer, as applicable, shall be entitled to
compel specific performance of the other Party’s(ies’) obligation to meet and confer in
accordance with Section 5.1.
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(e) Except as set forth in Section 7.4(d), the Parties shall not have any
remedy for specific performance against any other Party.
7.5 Dispute Resolution. The Parties shall, before the commencement of any
lawsuit or court action against any other Party relating to this Agreement or the Project,
attempt in good faith to settle their dispute by third-party mediation.
8. EVENTS OF TERMINATION; RIGHTS AND OBLIGATIONS OF PARTIES.
8.1 Events of Termination. This Agreement shall automatically terminate if
any of the following events (an “Event of Termination”) occur prior to Close of Escrow:
(a) The Early Expiration Date or expiration of any Extension Period
without an approved Extension or expiration of the final Extension Period;
(b) Termination of this Agreement by any Party pursuant to
Section 5.1(b);
(c) Termination of this Agreement by any Party pursuant to Section
5.1(d);
(d) Termination of this Agreement by the Developer by reason of a City
Event of Default or by the City by reason of a Developer Event of Default, in each case,
pursuant to Article 7; and
(e) The failure to otherwise satisfy by the Target Date the conditions set
forth in Sections 5.2, unless said failure is waived by the Party or Parties which the
condition benefits.
8.1.2 Notwithstanding any of the foregoing, this Agreement will
terminate upon the issuance of the final certificate of completion of the Developer’s
Improvements, if not earlier terminated.
8.2 Effect of Termination.
(a) Upon termination of this Agreement, the provisions of this Agreement
shall be governed by Section 5.3(a), if applicable, and Article 8, and the rights and
obligations of the parties under the Deed of Sale and the Performance Deed of Trust and
Security Agreement and shall be governed by those documents.
(b) If this Agreement is terminated or expires, then the City shall have
the absolute right to enter into agreements relating to the Project, Project Site,
Developer’s Improvements and the City Property with any developer or operator and
brand of its choosing. The City shall not have the right to discuss any aspect of the Project
with any prospective or subsequent developer, operator, or brand absent full and final
termination of this Agreement.
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(c) Except as otherwise expressly provided in Section 5.3(a), if
applicable, and this Article 8 and in subsection (d) below, and the rights and obligations
of the parties under the Deed of Sale and the Performance Deed of Trust and Security
Agreement, upon an Event of Termination none of the Parties shall have any further
rights, obligations or remedies to or against any other Party pursuant to this Agreement.
(d) Notwithstanding termination of this Agreement, the Parties agree
that the Sections 4.6, 4.7, 4.9, 4.10, and this Section 8.2, shall survive such termination
to the extent and for such period as necessary to give them full force and effect under the
circumstances giving rise to termination of this Agreement.
9. MISCELLANEOUS PROVISIONS.
9.1 Time of Essence. Time is of the essence in the performance of the
respective obligations of the Parties under this Agreement.
9.2 Consent. The City shall reasonably cooperate with the Developer in the
preparation and submittal of any governmental applications the Developer must submit
in the furtherance of this Agreement. The City further agree to reasonably cooperate with
the Developer in the timely processing of any such applications.
9.3 Entire Agreement. This Agreement consists of thirty-seven (37) pages
together with Attachment Nos. 1 through 7, inclusive, which are attached hereto and
incorporated herein by this reference, which constitute the entire agreement between the
Parties.
9.4 Interpretation. This Agreement has been negotiated at arm’s length and
between Persons sophisticated and knowledgeable in the matters dealt with herein. In
addition, each Party has been represented by experienced and knowledgeable legal
counsel. Accordingly, any rule of law (including California Civil Code Section 1654) or
legal decision that would require interpretation of any ambiguities in this Agreement
against the Party that has drafted it, is not applicable and is waived. The provisions of
this Agreement shall be interpreted in a reasonable manner to effect the purposes of this
Agreement.
9.5 Governing Law. This Agreement shall be governed by the laws of the
State of California.
9.6 Captions. The captions used herein are inserted only as a matter of
convenience and for reference and in no way define, limit or describe the scope or the
intent of any Section hereof.
9.7 No Third Party Rights. Nothing in this Agreement shall create or shall give
to third parties any claim or right of action against the City, the City or the Developer
beyond such as may legally exist, irrespective of this Agreement.
9.8 Modification or Amendment of Agreement; Operating Memoranda.
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(a) No change in, modification to, termination or discharge of this
Agreement in any form whatsoever shall be valid or enforceable unless it is in writing and
signed by the Party to be charged therewith or its duly authorized representative.
(b) The Parties acknowledge that the provisions of this Agreement
require a close degree of cooperation, and that new information and future events may
make appropriate changes with respect to the details of performance of the Parties under
this Agreement. If, as a result of a Periodic Review provided for in Section 5.1, or
otherwise from time to time prior to the Early Expiration Date or during any Extension
Period, the Parties find that non-substantive refinements or adjustments that do not
require any public review or approval and that concern details of performance of the
Parties hereunder, are necessary or appropriate, they may effectuate such refinements
or adjustments through a memorandum (individually, “Operating Memorandum”, and
collectively, “Operating Memoranda”) approved by the Parties which, after execution,
shall be attached to this Agreement as addenda and become a part hereof. Operating
Memoranda must be executed on behalf of the City by its City Manager or designee, and
on behalf of the Developer by its authorized representative. Operating Memoranda shall
not require prior notice or approval by the City Council and shall not constitute an
amendment to this Agreement.
(c) Any substantive or significant modifications to the terms and
conditions set forth in this Agreement, such as a reduction in insurance or indemnity
requirements, or waiver of any discretionary approval requirement, shall be processed as
an amendment of this Agreement, and must be approved by the Developer, and City
Council.
9.9 Waiver. No waiver or any breach of any of the terms, covenants,
agreements, restrictions or conditions of this Agreement shall be construed to be a waiver
of any succeeding breach of the same or other terms, covenants, agreements, restrictions
and conditions hereof.
9.10 Severability. If any term, covenant or condition of this Agreement or the
application thereof to any Person or circumstance shall to any extent be invalid or
unenforceable, the remainder of this Agreement or the application of such term, covenant
or condition of this Agreement shall be valid and enforceable to the fullest extent permitted
by Law.
9.11 Integrated Agreement. This Agreement, including the attached exhibits,
contains the entire agreement of the parties and supersedes all prior and
contemporaneous agreements and understandings, oral or otherwise, among the parties
with respect to the matters contained in this Agreement and may not be modified or
amended except as set forth in this Agreement.
9.12 Certificates.
(a) On or before the Target Date set forth in the Schedule of
Performance, the Developer shall provide to the City an incumbency certificate, in form
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and substance reasonably satisfactory to the City and signed by a duly authorized officer
of the Developer, certifying that Doug Sheres, John Luff and Don Rady are duly
authorized to execute this Agreement on behalf of the Developer, and attaching a copy
of the Limited Liability Company Agreement of Desert Wave Ventures, LLC and any
applicable resolutions.
(b) On or before the Target Date set forth in the Schedule of
Performance, the City shall provide to the Developer a copy of the resolution duly adopted
by the City Council, evidencing that the City Manager is authorized to execute this
Agreement on behalf of the City.
(c) On or before the Target Date set forth in the Schedule of
Performance, the City shall provide to the Developer a copy of the ordinance duly passed
and adopted by the City Council, evidencing that the Mayor of the City is duly authorized
to execute this Agreement on behalf of the City.
9.13 Counterparts. This Agreement may be executed in counterparts which
taken together shall constitute one agreement.
9.14 Public Records.
(a) The City is subject to the provisions of the California Public Records
Act (Cal. Gov. Code § 6250, et seq.), (the “Act”). The City’s use and disclosure of public
records are governed by the Act.
(b) In the event that any lawsuit, action, or other legal proceeding is
brought against City by any person(s) or entity(ies) seeking the disclosure of the
information Developer has provided to City under any theory (collectively the “Actions”),
Developer hereby agrees to release City from any such liability and to defend, indemnify
and hold harmless City from any such Actions. Developer agrees and acknowledges that
City has the sole and exclusive right to choose its legal counsel in its defense of the
Actions, and Developer agrees to fully and promptly reimburse all legal fees and costs
incurred by City in the defense of the Actions no later than thirty (30) days after
Developer’s receipt of a reimbursement invoice with supporting documentation.
Developer further agrees that any award of monetary damages, fees and costs, or
otherwise that may be legally imposed upon City in the Actions, relating to the information
Developer has articulated as being exempt from disclosure under the Act or any other
relevant laws, shall be fully and promptly paid by Developer to the Court, plaintiff(s) in the
Actions, or any other third party as may be required by any such award no later than thirty
(30) days after Developer’s receipt of City’s written demand for such payment unless
earlier ordered by the Court.
9.15 Incorporation by Reference of Recitals. The Recitals are hereby
incorporated into this Agreement by reference as if set forth herein in full.
[Signatures on Following Pages]
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FIRST AMENDMENT TO SECOND REVISED AND RESTATED
DISPOSITION AND DEVELOPMENT AGREEMENT
DSRT Surf Lagoon, Surf Center, and Residential Units Project
Signatory Page
CITY:
Date: _____________, 2023
CITY OF PALM DESERT, a charter city
and municipal corporation
By:
KATHLEEN KELLY, Mayor
APPROVED AS TO FORM:
By:
ROBERT HARGREAVES
City Attorney
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FIRST AMENDMENT TO SECOND REVISED AND RESTATED
DISPOSITION AND DEVELOPMENT AGREEMENT
DSRT Surf Lagoon, Surf Center, and Residential Units Project
Signatory Page
DEVELOPER:
Date: ___________2023 DESERT WAVE VENTURES, LLC, a
Delaware limited liability company
By: FS VENTURES, LLC, a Delaware
corporation, Its Manager
By:
Don Rady
Its: Managing Member
APPROVED AS TO FORM:
By:
Marco A. Gonzalez, Counsel
1D Supp-38
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CALIFORNIA ALL PURPOSE ACKNOWLEDGMENT
State of California )
) SS.
County of )
On , 20 , before me, , a Notary Public,
personally appeared ___________________ , who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature _____________________________
1D Supp-39
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ATTACHMENT NO. 1
SCOPE OF DEVELOPMENT
I. GENERAL
The Project and all related public improvements shall be designed and constructed
substantially in accordance with the provisions of this Agreement, including without
limitation the Laws, and all specifications, drawings, plans, data, reports, maps, permit
applications, land use applications, zoning applications, environmental review and
disclosure documents and design review documents (collectively, “Plans and
Specifications”) and related documents to be approved by the City pursuant hereto. The
City staff, the City’s engineers, the Developer and the Developer’s architects, engineers,
General Contractor and subcontractors shall coordinate with respect to the overall design,
architecture and nature of the improvements on the Project Site.
In the event of any conflict between the contents of this Scope of Development
and the Agreement, the provisions of the Agreement shall prevail.
II. DEVELOPER’S IMPROVEMENTS
Subject to the terms and conditions of this Agreement, including all attachments
hereto, the Developer shall be responsible for the design and construction of the following
improvements in two phases (collectively, the “Developer’s Improvements”):
A. Phase One Developer’s Improvements will include an approximately 17.68
acre Surf Lagoon Resort and Amenities comprised of:
1. Minimum 5.0 acre Surf Lagoon with wave generating equipment.
2. Minimum 6,000 sq. ft. and maximum 15,000 sq. ft. Surf Center
Building, to include surf welcome area, ticketing, wetsuit
rental/drying, board rental, food and beverage component, office
space, training area, flex space, and retail facility.
3. Proprietary wave producing machinery and accompanying surf
lagoon control building.
4. All ancillary Support Facilities to support wave operations in
accordance with Specific Plan including maintenance, guest service,
F&B, parking and common area.
5. Private Water Well approval, permitting, construction and operation
on Project Site, if development of a private water well on the Project
Site is legally and technically feasible.
6. Circular roadway around project perimeter, as necessary, for fire and
residential ownership access.
1D Supp-40
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7. Landscape, Open Space, and Swimming Pools equating to a
minimum of 20% of the Project Site.
8. Parking – Not less than [356] surface stalls of off-site parking.
B. Misc. Items included in Phase One Developer’s Improvements:
1. Construct freshwater intake line from City owned 15” extant water
line to west boundary line of SARDA Parcel B consistent with
Existing Approvals or in substantial conformance with the
Improvement objective.
2. Construct on-site and accompanying off-site storm-water discharge
system draining to dry wells and waste areas on the Mountain View
golf course or in substantial conformance with the Improvement
objective.
3. Construct evacuation line to dry wells and/or golf course irrigation
lake system (through Embarc property) consistent with Existing
Approvals or in substantial conformance with the Improvement
objective.
4. Construct tie-in sewer line to CVWD owned extant line west of the
site adjacent to Westin Desert Willow Villas consistent with Existing
Approvals or in substantial conformance with the Improvement
objective.
5. Provide emergency gate access point for emergency vehicles at
northerly and westerly corner of site adjacent to Westin Desert
Willow Villas consistent with Existing Approvals, as required by Palm
Desert Fire Department.
6. Fund any required or necessary turf removal at Developer’s sole cost
and expense.
7. Construct improvements for overflow parking needs of the Desert
Willow Golf Resort.
8. Construction of all utility connections to support the Project.
C. All Conditions of Approval identified in the Existing Approvals.
D. All Mitigation Measures identified in the Existing Approvals.
E. Phase Two of Developer’s Improvements shall include construction of the
balance of the fifty-seven (57) private Residential Units, and associated
Homeowner’s Association amenities that were not built in Phase One.
1D Supp-41
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III. ARCHITECTURE AND DESIGN
The Developer’s Improvements shall be of high architectural quality and be
sufficiently landscaped, as approved by the Architectural Review Committee. The
Construction Documents and the Building Permit Application shall describe the
architectural character intended for the Developer’s Improvements.
1D Supp-42
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ATTACHMENT NO. 2
PRELIMINARY PLAN OF FINANCE
[TO BE INSERTED]
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ATTACHMENT NO. 3
FORM OF PROJECT BUDGET
[TO BE INSERTED]
1D Supp-44
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ATTACHMENT NO. 4
MAP OF PROJECT SITE;
MAP SHOWING GENERAL LOCATION OF ELEMENTS OF THE PROJECT
1D Supp-45
A5-1
ATTACHMENT NO. 5
LEGAL DESCRIPTION OF PROJECT SITE
Parcel 1:
All that certain real property situated in the County of Riverside, State of California,
described as follows:
Lot 8 of Tract No. 28450, in the City of Palm Desert, County of Riverside, State of
California, as shown by map on file in Book 264, Pages 4 through 15 of Maps, Records
of Riverside County.
Excepting therefrom all oil, gas and other mineral deposits, together with the right to
prospect for, mine, and remove the same, according to the provisions of the Act of
Congress approved June 1, 1938 (52 Stat. 609) as reserved in the Patent recorded
February 4, 1960 as Instrument No. 9510, of Official Records of Riverside County,
California;
Also excepting therefrom one half of all crude oil, petroleum, gas brea, asphaltum, and
all kindred substances and other minerals, as reserved in deed from Henry A. Dustin and
Pearl M. Dustin, husband and wife recorded January 11, 1956 as Instrument No. 1901 of
Official Records of Riverside County, California;
Also excepting therefrom one half of all crude oil, petroleum, gas brea, asphaltum, and
all kindred substances and other minerals, as reserved in deed from Henry A. Dustin and
Pearl M. Dustin, husband and wife recorded January 11, 1956 as Instrument No. 1895 in
Book 1845, Page 474 of Official Records of Riverside County, California;
Also excepting one half of all crude oil, petroleum, gas, brea, asphaltum and all kindred
substances and other minerals under and in said land, without right of surface entry and
with the obligation of grantor herein and any transfers thereof to repair any damage to
said land and/or any improvements now or hereafter constructed thereon resulting from
the extraction of said minerals by deed recorded February 8, 1985 as Instrument No.
27280 of Official Records of Riverside County, California;
Also excepting therefrom one half of all crude oil, petroleum, gas, brea, asphaltum and
all kindred substances and other minerals under and in said land without the right of
surface entry and with the obligation of grantor herein and any transferee thereof to repair
any damage to said land and/r any improvements now or hereafter constructed thereon
resulting from the extraction of said minerals, as reserved by deed recorded January 31,
1991 as Instrument No. 36436 of Official Records of Riverside County, California; said
mineral rights interests now purportedly vest in Lois A. Taylor, Jacqueline Y. Schaper,
Jeanelle N. Stehly, Chadwick J. Mc Donald, Kevin O. Mc Donald, as to an undivided 1/5
1D Supp-46
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interest each as evidenced by Quitclaim Mineral Deed recorded June 1, 1993 as
Instrument No. 204127 of Official Records of Riverside County, California;
Also excepting therefrom all oil, gas and other hydrocarbon substances and minerals in
and under said land, as set forth in the deed from John J. Kovacevich and Beverly Ellen
Kovacevich, husband and wife recorded January 20, 1959 as Instrument No. 5010 of
Official Records of Riverside County, California, without right of surface entry to a depth
of 500 feet;
Except one half of all oil and mineral rights as reserved by Lucille Sleeper in Document
recorded March 20, 1956 in Book 1883, Page 571 of Official Records of Riverside County,
California;
Also excepting therefrom one half of all oil and minerals, as reserved by Lucille Sleeper
by deed recorded December 14, 1961 as Instrument No. 107309 of Official Records of
Riverside County, California.
Also excepting therefrom one half of all crude oil, petroleum, gas brea, asphaltum, and
all kindred substances and other minerals, as reserved in deed from Henry A. Dustin and
Pearl M. Dustin, husband and wife recorded January 11, 1956 as Instrument No. 1897 of
Official Records of Riverside County, California.
Also except therefrom that portion of said land conveyed to the City of Palm Desert, a
Municipal Corporation, as set forth and described in that certain document recorded
November 6, 2014 as Instrument No. 2014-0428272 of Official Records.
APN: 620-420-023
Parcel 2:
All that certain real property situated in the County of Riverside, State of California,
described as follows:
That portion of Lot 8 of Tract No. 28450, in the City of Palm Desert, County of Riverside,
State of California, as per map filed in Book 264, Pages 4 through 15, inclusive, of Maps,
in the Office of the County Recorder of said County, described as follows:
Beginning at the Westerly terminus of that certain course in the Northerly line of said Lot
8 shown as “N 89°46’41” W 293.56’” on said map;
Thence along said Northerly line S 89°46’41” E 293.56 feet to the West line of Desert
Willow Drive, and to the beginning of a non-tangent curve concave to the East having a
radius of 137.00 feet and to which beginning a radial line bears S 88°57’01” W;
Thence along said Wet line Southeasterly 170.74 feet along said curve through a central
angle of 71°24’21” to the beginning of a reverse curve concave to the Southwest having
1D Supp-47
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a radius of 65.00 feet, a radial line through said beginning of reverse curve bears N
17°32’40” E;
Thence continuing along said West line Southeasterly 51.87 feet along said curve through
a central angle of 45°43’21” to the beginning of a compound curve concave to the
Southwest having a radius of 526.00 feet;
Thence continuing along said West line Southeasterly 36.97 feet along said curve through
a central angle of 4°01’37”;
Thence leaving said West line S 46°18’47” W 347.14 feet;
Thence N 43°41’13” W 394.66 feet to the Northerly line of said Lot 8;
Thence along said Northerly line N 54°05’23” E 97.66 feet;
Thence continuing along said Northerly line N 0°50’56” E 92.68 feet to the point of
beginning.
APN: 620-400-008; 620-420-024
1D Supp-48
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ATTACHMENT NO. 6
FORM OF CITY COST REIMBURSEMENT AGREEMENT
1D Supp-49
A6-2
REIMBURSEMENT AGREEMENT
Between
CITY OF PALM DESERT
a California municipal corporation
and
DESERT WAVE VENTURES, LLC,
a Delaware limited liability company
1D Supp-50
A6-3
REIMBURSEMENT AGREEMENT
This Reimbursement Agreement ("Agreement") is made this ___ day of ________,
2023, by and between the City of Palm Desert, a California municipal corporation (the
"City"), and Desert Wave Ventures, LLC, a Delaware limited liability company registered
to do business in the State of California (the "Applicant").
RECITALS
This Agreement is made with respect to the following facts.
A. The Applicant is in contract to purchase of that certain real property
("Property") located within the City of Palm Desert, County of Riverside, California. The
Property is more particularly described in attached Exhibit A.
B. The Applicant is contemplating a development described as the 17.68 acre
DSRT Surf project described in Environmental Impact Report Project SCH #2019011044
and its Addendum, consisting of a 5.5 acre surf lagoon and surf center facility to include
a food and beverage component, and 57 private residential units which is referred to as
the "Project."
C. To provide the City with the planning, environmental and legal services, and
other expertise and information necessary to the City's review process concerning the
development of the Property, it is necessary for the City to access the services of various
consultants for the Project beyond those whose fees are paid through traditional permit
and application fees ("Consultants").
D. As a condition to the City's completion of the review process, the Applicant
has agreed to reimburse the City for the Consultants’ costs and expenses related to the
City's review process in the manner and amounts set forth in this Agreement. The
Applicant's reimbursement of City under this Agreement will ensure that the City has the
necessary resources to diligently and efficiently process the Applicant's Project.
AGREEMENT
NOW, THEREFORE, in consideration of the following mutual promises and
agreements, City and Applicant agree as follows:
1 Incorporation of Recitals. The parties agree that the Recitals
constitute the factual basis upon which the City and the Applicant have entered into this
Agreement. The City and the Applicant each acknowledge the accuracy of the Recitals
and agree that the Recitals are incorporated into this Agreement as though fully set forth
at length.
2. City to Retain Consultants. As a necessary and indispensable part
of its fact-finding process relating to the review and processing of the Applicant's
1D Supp-51
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proposed uses of the Property and Project, the City shall retain the services of
Consultants as the City may deem necessary in its reasonable and sole discretion.
The Applicant agrees that, notwithstanding the Applicant's reimbursement
obligations under this Agreement, Consultants shall be the contractors exclusively of the
City and not of the Applicant. Except for those disclosures required by law including,
without limitation, the California Public Records Act, all conversations, notes,
memoranda, correspondence and other forms of communication by and between the City
and its Consultants shall be, to the extent permissible by law, privileged and confidential
and not subject to disclosure to the Applicant. The Applicant agrees that it shall have no
claim to, nor shall it assert any right in any reports, correspondence, plans, maps,
drawings, news releases or any and all other documents or work product produced by the
Consultants.
3. Applicant to Cooperate with Consultants. The Applicant agrees to
cooperate in good faith with the Consultants and City. The Applicant agrees that it will
instruct its agents, employees, consultants, contractors and attorneys to reasonably
cooperate with the Consultants and to provide all necessary documents or information
reasonably requested of them by the City and/or the Consultants; provided, however, that
the foregoing shall not require the disclosure of any documents or information of the
Applicant which by law is privileged, proprietary, confidential, and exempt from disclosure
under the Public Records Act.
4. Applicant's Reimbursement of Costs and Expenditures. The
Applicant shall reimburse the City for one hundred percent (100%) only of the actual costs
and expenditures incurred after November 14, 2019 by the City relative to the Consultant
costs ("Costs".) The City has preliminarily reviewed the scope of work required and has
estimated the Costs to be approximately Eighty-five Thousand Dollars ($85,000)
(“Estimated Costs"). Within ten (10) calendar days of the execution of this Agreement,
the Applicant shall submit the initial deposit in the amount of $85,000 to cover 100% of
the consultant costs. The City shall provide copies of monthly invoices prepared by
consultants, with confidential information removed, and the applicant shall make
additional deposits to adequately cover the anticipated consultant costs.
5. Applicant's Approval of Excess Costs and Expenditures. The City
shall use reasonable good faith efforts to consult with the Applicant incurring Costs that
exceed the Estimated Costs ("Excess Costs"). The Applicant's obligation to reimburse
the City for Excess Costs which exceed the Estimated Costs shall be contingent upon,
the City's providing the Applicant with written notice of the amendment of the “Estimated
Costs” to be performed by Consultants and the estimated Excess Costs prior to the
commencement of work. In the event that Applicant objects to the Excess Costs, City
shall not be required to continue processing of the Project.
For purposes of this Section, the City shall be deemed to have consulted
with the Applicant when the City has provided written notice to the Applicant that the City
reasonably anticipates that it will incur, or has incurred, Excess Costs. If, after
consultation, the Applicant disagrees with the City's incurring of Excess Costs, then the
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Applicant's may terminate this Agreement pursuant to Section 9 of this Agreement,
subject to the Applicant's obligation to reimburse the City for all Costs incurred by the City
prior to the date of termination, whether or not yet paid by the City to the Consultants.
6. Evidence of Payment of Consultant Costs Immediately following the
City's disbursement of funds to Consultant pursuant to an approved Professional Services
Agreement or similar retainer agreement with the Consultant(s), the City shall provide the
Applicant with such reasonable documentation as the Applicant may request to
substantiate any demands for payment by Consultant(s).
7. Applicant understands and agrees that City reserves complete
discretion and authority regarding the (a) outcome of the Project, (b) contents, scope,
analysis and conclusions of the Consultant(s) and Consultant documents, including plans,
staff reports, ordinances, resolutions, maps, conditions, mitigation measures, and
environmental review documents and findings, (c) and City determinations and decisions
on the Project. Nothing in this Agreement shall in any way commit or obligate City to
approve any particular development project application or to support the development of
any part of it.
8. Term. The term of this Agreement shall commence on the date that
this Agreement is approved by the City and fully executed by the parties and shall
terminate when all work required been completed to the City's reasonable satisfaction
and the Applicant has satisfied all of its obligations under this Agreement including,
without limitation, the obligation to reimburse the City for Estimated Costs and Excess
Costs, whether or not paid by the City to Consultant(s) prior to the date of termination.
The Applicant's obligation to reimburse the City as provided in this Agreement shall
survive the termination of this Agreement pursuant to Section 9.
9. Early Termination. The City may terminate this Agreement prior to
the term set forth in Section 8 above, without cost or liability to the City, upon thirty (30)
days prior written notice to the Applicant. The Applicant may in its reasonable and sole
discretion terminate this Agreement prior to the end of the term set forth in Section 8
above upon thirty (30) days' prior written notice to the City; provided, however, that the
Applicant has satisfied all of its obligations under this Agreement to the date of termination
regarding reimbursement to the City of both Estimated Costs and Excess Costs and,
furthermore, that the Applicant has given City written notice withdrawing its application(s)
for the Project.
Within two (2) City working days following either the City's decision to
terminate this Agreement or the City's receipt of written notice indicating the Applicant's
decision to terminate this Agreement, the City shall notify the Consultant(s) and instruct
them to cease work. Consultant(s) shall be instructed to bill the City for any work
completed prior to the date of termination.
10. Assignability. This Agreement may not be assigned by either party
without the prior and express written consent of the other party, which consent shall not
be unreasonably withheld. In determining whether to approve a request by the Applicant
1D Supp-53
A6-6
to assign this Agreement, the City may consider, among other things, the proposed
assignee's financial status and commitment to the Project. Any attempted assignment of
this Agreement not in compliance with the terms of this Agreement shall be null and void
and shall confer no rights or benefits upon the assignee.
11. No Oral Modifications. This Agreement represents the entire
understanding of the City and the Applicant and supersedes all other prior or
contemporaneous written or oral agreements pertaining to the subject matter of this
Agreement. This Agreement may be modified, only by a writing signed by both the
authorized representatives of both the City and the Applicant.
12. Binding Upon Successors. This Agreement and each of its terms
shall be binding upon the City, the Applicant and their respective officers, elected officials,
employees, agents, contractors, and permitted successors and assigns.
13. Legal Challenges. Nothing herein shall be construed to require City
to defend any third party claims and suits challenging any action taken by the City with
regard to any procedural or substantive aspect of the City’s approval of development of
the Property, the environmental process, or the proposed uses of the Property. The
Applicant may, however, in its sole and absolute discretion appear as real party in interest
in any such third party action or proceeding, and in such event, it and the City shall defend
such action or proceeding and the Applicant shall be responsible and reimburse the City
for whatever legal fees and costs, in their entirety, including actual attorneys' fees, which
may be incurred by the City in defense of such action or proceeding. This City shall have
the absolute right to retain such legal counsel as the City deems necessary and
appropriate and the Applicant shall reimburse the City for any and all attorneys' fees and
costs incurred by the City as a result of such third party action or proceeding; provided,
however, Applicant may, at any time, notify City in writing of its decision to terminate such
reimbursement obligation and, thereafter, in the event that the City decides to continue
the defense of such third party action or proceeding, Applicant shall have no further
obligation to reimburse City for its attorney fees and costs.
14. Attorneys' Fees. In the event that any action or proceeding, including
arbitration, is commenced by either the City or the Applicant against the other to establish
the validity of this Agreement or to enforce any one or more of its terms, the prevailing
party in any such action or proceeding shall be entitled to recover from the other, in
addition to all other legal and equitable remedies available to it, its actual attorneys' fees
and costs of litigation, including, without limitation, filing fees, service fees, deposition
costs, arbitration costs and expert witness fees, including actual costs and attorneys' fees
on appeal.
15. Jurisdiction and Venue. This Agreement is executed and is to be
performed in the City of Palm Desert, Riverside County, California, and any action or
proceeding brought relative to this Agreement shall be heard in the appropriate court in
the County of Riverside, California. The City and the Applicant each consent to the
jurisdiction of the Court in any such action or proceeding.
1D Supp-54
A6-7
16. Severability. If any term or provision of this Agreement is found to
be invalid or unenforceable, the City and the Applicant both agree that they would have
executed this Agreement notwithstanding the invalidity of such term or provision. The
invalid term or provision may be severed from the Agreement and the remainder of the
Agreement may be enforced in its entirety.
17. Headings. The headings of each Section of this Agreement are for
the purposes of convenience only and shall not be construed to either expand or limit the
express terms and language of each Section.
18. Representations of Authority. Each party signing this Agreement on
behalf of a party which is not a natural person hereby represents and warrants to the
other party that all necessary legal prerequisites to that party's execution of this
Agreement have been satisfied and that he or she has been authorized to sign this
Agreement and bind the party on whose behalf he or she signs.
19. Notices. Notices required under this Agreement shall be sent to the
following:
If to the City: City Manager
City of Palm Desert
73510 Fred Waring Drive
Palm Desert, CA 92260
If to the Applicant: Desert Wave Ventures, LLC
Attn: Don Rady
1555 Camino Del Mar
Del Mar, CA 92014
Notices given pursuant to this Agreement shall be deemed received as follows:
(1) If sent by United States Mail - five (5) calendar days after deposit into
the United States Mail, first class postage prepaid.
(2) If by facsimile - upon transmission and actual receipt by the receiving
party.
(3) If by express courier service or hand delivery - on the date of receipt
by the receiving party.
1D Supp-55
A6-8
The addresses for notices set forth in this Section 19 may be changed upon written
notice of such change to either the City or the Applicant, as appropriate.
Dated: ________________________
CITY OF PALM DESERT
a California municipal corporation
By: ______________________________
___________, Mayor
ATTEST:
By: ______________________________
Anthony Mejia, City Clerk
APPROVED AS TO FORM:
By: ______________________________
Robert W. Hargreaves, City Attorney
Dated: _________________________
APPLICANT:
___________________________________
By:
___________________________________
Name/Title
Dated: _________________________
APPROVED AS TO FORM:
By: __________________________
Applicant’s Counsel
Dated: _________________________
1D Supp-56
A6-9
CALIFORNIA ALL PURPOSE ACKNOWLEDGMENT
State of California )
) SS.
County of )
On , 20 , before me, , a Notary Public,
personally appeared ___________________ , who proved
to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are
subscribed to the within instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the
instrument the person(s), or the entity upon behalf of which the person(s) acted, executed the
instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature _____________________________
1D Supp-57
A6-10
Exhibit "A"
Description of the Property
Approximately 17.68 acres known as APN 620400008, 620420024 and 620420023 in the
City of Palm Desert, County of Riverside, California.
1D Supp-58
A7-1
ATTACHMENT NO. 7
SCHEDULE OF PERFORMANCE
In the event of any conflict between the contents of the Schedule of Performance and the
Agreement, the provisions of the Agreement shall prevail.
ACTION TARGET DATE
1. Execution of Agreement and City Cost
Reimbursement Agreement by Developer.
Developer shall execute and deliver Agreement and
City Cost Reimbursement Agreement to City.
Completed.
2. Execution of Agreement and City Cost
Reimbursement Agreement by City. City shall hold
public hearings to consider and approve or
disapprove Agreement and City Cost
Reimbursement Agreement. If approved, City shall
execute Agreement.
Completed.
3. Submission of all Implementing Actions. Developer
shall submit all agreements pertaining to the
Implementing Actions to City for final review and
approval. (§1.3(b))
October 1, 2023.
4. Submission of 100% Design Development Drawings
and Preliminary Cost Estimate. Developer shall
prepare and submit to the City 100% Design
Development Drawings and documents for the Surf
Lagoon, and Surf Center; and preliminary costs
associated.
Completed.
5. Submission of 100% Rough Grading Plans. The
Developer shall submit to the City 100% Rough
Grading Plans, Rough Grading Permit Application
and associated fees.
October 1, 2023.
6. Approval – 100% Rough Grading Plans. The City
shall approve or disapprove the 100% Rough
Grading Plans for the entire site.
October 1, 2023.
7. Submission of 100% Construction Drawings.
Developer shall prepare and submit to the City 100%
Construction Drawings and documents for the Surf
Lagoon, and Surf Center.
Completed.
8. Submit Building Permit Application.
Developer shall submit to City Building Permit
Application for the Surf Lagoon, and Surf Center with
100% construction documents. (§4.3(a)(ii))
Completed.
1D Supp-59
A7-2
ACTION TARGET DATE
9. City acceptance of complete Construction
Documents and Building Permits. (§4.3)
October 1, 2023.
10. Submission -- Equity Investors. Developer shall
submit to City identity of Equity Investors and written
binding agreements with the Equity Investors.
(§5.2(b) and (c))
Completed.
11. Submission of Final Detailed Cost Estimates (Non-
GMP)- Surf Lagoon and Center. Developer shall
prepare and submit to the City final detailed cost
estimates for the design and construction of the Surf
Lagoon and Center. (§4.4(b))
October 1, 2023.
12. Review -- Final Cost Estimates - Surf Lagoon and
Center. The City shall review final detailed cost
estimates for the Surf Lagoon and Center. (§4.4(b))
October 1, 2023.
13. Submittal of Final Project Budget and Final Project
Plan of Finance. (§4.4(e))
October 1, 2023.
14. Submission of Loan Documents. Developer shall
submit to City binding Loan Documents from Private
Construction Lender for construction financing.
(§5.2(d) and (p))
October 1, 2023.
(If applicable)
15. Execution and Delivery of Declaration of Restrictions.
(§6)
May 25, 2023.
16. Submission of Construction Contracts. Developer
shall submit to the City construction contracts and
executed guaranteed maximum price construction
contracts or fixed price construction contracts, as
applicable, with respect to the Developer’s
Improvements, based on signed bids from
Developer’s contractors (§4.4(f) for the construction
of the Surf Lagoon and Center. (§5.2(f))
October 1, 2023.
17. City Review of Items 13-16 above. Within 45 days of
submission of each item.
18. Submission of Certificates of Insurance, Payment
Bonds and Performance Bonds. (§4.7.1)
Within 45 days after
completion of City Review
of Items 13-16.
19. City Review of Certificates, Insurance, Payment
Bonds and Performance Bonds
At City’s discretion.
24. Work with City to identify temporary parking to
accommodate at least seventy (70) spaces that will
be unavailable for the Desert Willow golf courses
during Project construction.
October 1, 2023.
1D Supp-60
A7-3
ACTION TARGET DATE
25. Commencement of Construction Mobilization of Surf
Lagoon and Center. The Developer shall commence
construction of the Surf Lagoon and Surf Center
improvements.
Within 45 days after
completion of City Review
of Items 13-16.
26. Completion of Construction of Phase One of Project.
The Developer shall complete construction of Phase
One of the Developer’s Improvements.
Within 24 months
following commencement
of construction.
27. Termination of Agreement. This Agreement shall
automatically terminate if any of the events listed
occur. (§8.1)
Upon completion and
issuance of certificate of
occupancy and/or
certificate of completion of
all improvements for the
Surf Lagoon, Surf Center,
and Parking.
1D Supp-61
A8-1
ATTACHMENT NO. 8
DECLARATION OF RESTRICTIONS
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
City of Palm Desert
Attn: City Clerk
73510 Fred Waring Drive
Palm Desert, CA 92260
SPACE ABOVE THIS LINE RESERVED FOR RECORDER'S USE
DECLARATION OF RESTRICTIONS
This Declaration of Restrictions (this “Declaration”) is made as of ___________,
2023, by Desert Wave Ventures, LLC, a Delaware limited liability company (referred to
herein as “Declarant”).
WHEREAS, Declarant is the owner of real property (the “Property”) situated in the
City of Palm Desert, State of California, consisting of County of Riverside, Accessor
Parcel Numbers (APNs) 620-400-008, 620-420-023 and 620-420-024 and more
particularly described in Exhibit “A”, attached hereto and by this reference incorporated
herein; and
WHEREAS, a portion of the Property was acquired from the City of Palm Desert
(the “City”) pursuant to that certain Second Revised and Restated Disposition and
Development Agreement, dated as of November 17, 2022 (the “DDA”), by and between
City and Declarant, as amended by that certain First Amendment to Second Revised and
Restated Disposition and Development Agreement, dated May __, 2023, by and between
City and Declarant (the “First Amendment,” and together with the DDA, the “Agreement”);
and
WHEREAS, Declarant affirms and declares Declarant’s desire to burden the
Property with an annual charge (the “Annual Community Benefit Contribution”) intended
for the benefit of the City and the community, and does not constitute an exaction imposed
as a condition of development of the Property, but has been voluntarily proposed by
Declarant as an additional community benefit in connection with Declarant’s proposed
development in two phases of an approximately 5.5 acre surf lagoon, an approximately
6,200 square-foot surf center, 356 on-site parking spaces, and 57 private residential units
and associated amenities and improvements on the Property (the “Project”); and
1D Supp-62
A8-2
WHEREAS, Declarant hereby encumbers the Property with the perpetual
obligation to pay the Annual Community Benefit Contribution outlined in the Agreement
for the benefit of the City and the Palm Desert community;
NOW, THEREFORE, Declarant declares as follows:
1. Recitals. The recitals set forth above are true and correct and incorporated
herein by this reference.
2. Covenant Running with the Land. The covenants contained in this
Declaration shall run with the land, shall be binding upon Declarant and each subsequent
owner of the Property (each, an “Owner”), and their successors and assigns.
3. Creation of the Lien Upon the Property. Declarant and each subsequent
Owner of the Property, by acceptance of a deed therefore, whether or not it shall be so
expressed in such deed, is deemed to covenant and agree to pay, in perpetuity (subject
to Section 7 below), to the City, as the beneficiary of the obligation hereunder (the
“Beneficiary”), an annual charge in the amount of Five Hundred Thousand Dollars
($500,000) (the “Annual Community Benefit Contribution”) subject to an annual increase
of three percent (3%). The Annual Community Benefit Contribution, together with
interest, costs, and reasonable attorneys’ fees payable under Section 6 below, shall be a
charge on the land and shall be a continuing lien upon the Property against which such
charge is made.
4. Collection of the Annual Community Benefit Contribution. The Annual
Community Benefit Contribution shall be collected in a single annual installment. The
initial payment shall be made on the first day of the month first following the first
anniversary of the City’s issuance of the final certificate of completion or certificate of
occupancy for the first phase of the Project. All subsequent payments shall be due on
the anniversary of such date in each year.
5. Purpose of the Annual Community Benefit Contribution. The City, as the
Beneficiary under this Declaration, shall expend the Annual Community Benefit
Contribution for any legal purpose in the sole and absolute discretion of the City.
6. Effect of Nonpayment of Annual Community Benefit Contribution;
Remedies of the Beneficiary. If the Annual Community Benefit Contribution required to
be paid hereunder is not paid within fifteen (15) days after the due date, a late charge of
ten percent (10%) of the delinquency may be imposed. Interest may accrue and be
charged on all sums (including charges, penalties and reasonable costs of collection)
which are more than thirty (30) days overdue, at the rate of twelve percent (12%) per
annum, the maximum amount authorized by California law. In the event of a default on a
payment of the Annual Community Benefit Contribution, in addition to any other remedies
herein or by law provided, the Beneficiary may enforce each such obligation as follows:
1D Supp-63
A8-3
(a) By suit or suits at law to enforce each such charge obligation. Any
request for judgment in any such action may include a sum for reasonable attorneys' fees
and related costs.
(b) At any time after the delinquency of any charge, the Beneficiary may
give notice to the defaulting Owner, which said notice shall state the date of the
delinquency, the amount of the delinquency, the late fee and the interest charge for such
delinquency, and make a demand for payment thereof. If such delinquency, late fee and
interest are not paid within thirty (30) days after delivery of such notice, the Beneficiary
may elect to file a claim of lien against the Property of such delinquent Owner. Such claim
of lien shall state (1) the name of the delinquent Owner or reputed Owner, (2) a
description of the Property against which claim of lien is made, (3) the amount claimed to
be due and owing (with any proper offset allowed), (4) that the claim of lien is made by
the Beneficiary pursuant to the terms of these restrictions (giving the date of execution
and the date, book and page reference of the recording hereof in the Office of the
Recorder of the County of Riverside), and (5) that a lien is claimed against said described
Property in an amount equal to the amount of the stated delinquency plus interest and
late fees as applicable. Any such claim of lien shall be signed and acknowledged by an
authorized officer of the Beneficiary. Upon recordation of a claim of lien by the County
Recorder, the lien claimed herein shall immediately attach and become effective as a
continuing lien covering all subsequent delinquencies and attendant penalties. Any such
lien may be foreclosed by the Beneficiary, its attorney, or any other person authorized by
the Beneficiary, either by appropriate action in court or in the manner provided by law for
the foreclosure of a mortgage under power of sale. Upon any such sale of the Property,
a certificate of sale shall be executed and acknowledged by an authorized officer of the
Beneficiary or by the person conducting the sale. A deed upon foreclosure shall be
executed in like manner. The Beneficiary shall have the power to bid for the Property at
the sale under its power of sale or at any court foreclosure sale and to acquire and hold,
lease, mortgage and convey the same.
No sale or transfer shall relieve the Property from liability for any charge(s) thereafter
becoming due as from the lien thereof. Notwithstanding anything herein, to the extent
California law addresses the lien priority issue, California law shall prevail.
7. Condition To and Termination of this Declaration. This Declaration shall
remain in full force and effect until the date on which the Beneficiary shall record a release
of this Declaration.
8. Waiver of Causes of Action. Declarant for itself and its agents,
representatives, trustees, assignees, successors, and future Owners of the Property and
each of them, hereby waives and forever relinquishes its right to allege a cause of action
against the City or any department or division thereof, asserting that the Annual
Community Benefit Contribution provided for herein is an impermissible tax, assessment,
fee, or charge or an exaction imposed as a condition of development of the Property or
imposed as a condition of obtaining entitlements to develop the Property.
1D Supp-64
A8-4
9. Successors and Assigns Bound. Declarant shall comply with these
covenants, conditions and restrictions burdening the Property in perpetuity. Subject to
the limitations contained in this Declaration, and without modifying its terms, the
provisions of this Declaration shall be enforced as equitable servitudes, and conditions,
restrictions, and covenants running with the land, and shall be binding upon the agents,
representatives, trustees, assignees, successors, and future owners of the Property and
each of them, unless and until this Declaration is terminated as provided for herein.
10. Mortgagee Protection. Any breach of this Declaration shall not defeat or
render invalid the lien of any mortgage or deed of trust made in good faith for value, but
this Declaration shall be binding upon and effective against any Owner of the Property
whose title thereof is acquired by foreclosure, trustee's sale or otherwise.
11. Estoppel. The Beneficiary shall, at any time and from time to time upon not
less than ten (10) days' prior written notice from any Owner, execute, acknowledge and
deliver to the requesting Owner a statement (a) certifying this Declaration, including all of
the terms and conditions herein, are unmodified and in full force and effect (or, if modified,
stating the nature of such modification and certifying that this Declaration of Restrictions,
as so modified, is in full force and effect); and (b) acknowledging that there are not, to the
actual knowledge of the Beneficiary, any uncured defaults on the part of the requesting
Owner (or specifying such defaults if any are claimed). The Beneficiary’s failure to deliver
such statement to the requesting Owner as required in this Section 11 shall be deemed
to constitute the Beneficiary’s agreement (a) that this Declaration is in full force and effect,
without modification except as may be represented by the requesting Owner; and (b) that
to the Beneficiary's knowledge, there are no uncured defaults in the performance of the
requesting Owner. Said written statement shall be binding upon the Beneficiary in favor
of any persons relying on the statement in good faith.
DECLARANT:
DESERT WAVE VENTURES, LLC,
a Delaware limited liability company
By: FS VENTURES, LLC,
a Delaware corporation
Its: Manager
By:_____________________
Don Rady
Its: Managing Member
1D Supp-65
A8-5
EXHIBIT A
Legal Description of Property
That certain real property located in the City of Palm Desert, County of Riverside, State
of California legally described as follows:
Parcel 1:
All that certain real property situated in the County of Riverside, State of California,
described as follows:
Lot 8 of Tract No. 28450, in the City of Palm Desert, County of Riverside, State of
California, as shown by map on file in Book 264, Pages 4 through 15 of Maps, Records
of Riverside County.
Excepting therefrom all oil, gas and other mineral deposits, together with the right to
prospect for, mine, and remove the same, according to the provisions of the Act of
Congress approved June 1, 1938 (52 Stat. 609) as reserved in the Patent recorded
February 4, 1960 as Instrument No. 9510, of Official Records of Riverside County,
California;
Also excepting therefrom one half of all crude oil, petroleum, gas brea, asphaltum, and
all kindred substances and other minerals, as reserved in deed from Henry A. Dustin and
Pearl M. Dustin, husband and wife recorded January 11, 1956 as Instrument No. 1901 of
Official Records of Riverside County, California;
Also excepting therefrom one half of all crude oil, petroleum, gas brea, asphaltum, and
all kindred substances and other minerals, as reserved in deed from Henry A. Dustin and
Pearl M. Dustin, husband and wife recorded January 11, 1956 as Instrument No. 1895 in
Book 1845, Page 474 of Official Records of Riverside County, California;
Also excepting one half of all crude oil, petroleum, gas, brea, asphaltum and all kindred
substances and other minerals under and in said land, without right of surface entry and
with the obligation of grantor herein and any transfers thereof to repair any damage to
said land and/or any improvements now or hereafter constructed thereon resulting from
the extraction of said minerals by deed recorded February 8, 1985 as Instrument No.
27280 of Official Records of Riverside County, California;
Also excepting therefrom one half of all crude oil, petroleum, gas, brea, asphaltum and
all kindred substances and other minerals under and in said land without the right of
surface entry and with the obligation of grantor herein and any transferee thereof to repair
any damage to said land and/r any improvements now or hereafter constructed thereon
resulting from the extraction of said minerals, as reserved by deed recorded January 31,
1991 as Instrument No. 36436 of Official Records of Riverside County, California; said
1D Supp-66
A8-6
mineral rights interests now purportedly vest in Lois A. Taylor, Jacqueline Y. Schaper,
Jeanelle N. Stehly, Chadwick J. Mc Donald, Kevin O. Mc Donald, as to an undivided 1/5
interest each as evidenced by Quitclaim Mineral Deed recorded June 1, 1993 as
Instrument No. 204127 of Official Records of Riverside County, California;
Also excepting therefrom all oil, gas and other hydrocarbon substances and minerals in
and under said land, as set forth in the deed from John J. Kovacevich and Beverly Ellen
Kovacevich, husband and wife recorded January 20, 1959 as Instrument No. 5010 of
Official Records of Riverside County, California, without right of surface entry to a depth
of 500 feet;
Except one half of all oil and mineral rights as reserved by Lucille Sleeper in Document
recorded March 20, 1956 in Book 1883, Page 571 of Official Records of Riverside County,
California;
Also excepting therefrom one half of all oil and minerals, as reserved by Lucille Sleeper
by deed recorded December 14, 1961 as Instrument No. 107309 of Official Records of
Riverside County, California.
Also excepting therefrom one half of all crude oil, petroleum, gas brea, asphaltum, and
all kindred substances and other minerals, as reserved in deed from Henry A. Dustin and
Pearl M. Dustin, husband and wife recorded January 11, 1956 as Instrument No. 1897 of
Official Records of Riverside County, California.
Also except therefrom that portion of said land conveyed to the City of Palm Desert, a
Municipal Corporation, as set forth and described in that certain document recorded
November 6, 2014 as Instrument No. 2014-0428272 of Official Records.
APN: 620-420-023
Parcel 2:
All that certain real property situated in the County of Riverside, State of California,
described as follows:
That portion of Lot 8 of Tract No. 28450, in the City of Palm Desert, County of Riverside,
State of California, as per map filed in Book 264, Pages 4 through 15, inclusive, of Maps,
in the Office of the County Recorder of said County, described as follows:
Beginning at the Westerly terminus of that certain course in the Northerly line of said Lot
8 shown as “N 89°46’41” W 293.56’” on said map;
Thence along said Northerly line S 89°46’41” E 293.56 feet to the West line of Desert
Willow Drive, and to the beginning of a non-tangent curve concave to the East having a
radius of 137.00 feet and to which beginning a radial line bears S 88°57’01” W;
1D Supp-67
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Thence along said Wet line Southeasterly 170.74 feet along said curve through a central
angle of 71°24’21” to the beginning of a reverse curve concave to the Southwest having
a radius of 65.00 feet, a radial line through said beginning of reverse curve bears N
17°32’40” E;
Thence continuing along said West line Southeasterly 51.87 feet along said curve through
a central angle of 45°43’21” to the beginning of a compound curve concave to the
Southwest having a radius of 526.00 feet;
Thence continuing along said West line Southeasterly 36.97 feet along said curve through
a central angle of 4°01’37”;
Thence leaving said West line S 46°18’47” W 347.14 feet;
Thence N 43°41’13” W 394.66 feet to the Northerly line of said Lot 8;
Thence along said Northerly line N 54°05’23” E 97.66 feet;
Thence continuing along said Northerly line N 0°50’56” E 92.68 feet to the point of
beginning.
APN: 620-400-008; 620-420-024
1D Supp-68
A8-8
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT CIVIL CODE § 1189
State of California
County of ___________
On _______________________ before me ____________________, Notary Public
(insert name and title of the officer)
Personally appeared ____________________________________________________
who proved to me on the basis of satisfactory evidence to be the person(s) whose
name(s) is/are subscribed to the within instrument and acknowledged to me that
he/she/they executed the same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or the entity upon behalf of
which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the
foregoing paragraph is true and correct.
WITNESS my hand and official seal.
Signature __________________________________ (Seal)
A notary public or other officer completing this certificate verifies only the identity of the individual who signed
the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that
document.
1D Supp-69
2023 Commercial
Broker’s Report
Economic Development Department
2A Supp-1
2021 Broker’s Report recap
Proposed zoning changes.
Clearer descriptive definitions for zoning categories.
Creating a zoning ordinance review and identifying
specific land use to create a reduction in City processing.
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Common
Themes
Palm Desert is still the preferred location for
businesses to move to, however; retail space is
limited, and industrial inventory is near zero.
New commercial construction is needed, but with the
extremely high labor costs, and limited land
availability, new construction is not set to take place.
The City’s DE-O continues to pose challenges to fill, as
the current zoning does not allow for certain types of
office use.
Brokers also shared that they are having to turn deals
away for fast food and casual dining in Palm Desert,
due to the drive-thru ban currently in place.
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Request for
Direction
•Initiate a Zone Ordinance amendment
to:
a.Review land use definitions and
expand specific land use
categories including auto retail and medical.
b.Adopting a “non-conforming”
clause to the existing office
buildings in the DE-O to allow
existing office buildings to utilize
“office professional” use standards.
c.Restrict new self-storage facilities
by requiring applicants to observe the CUP.
2A Supp-4
2023 Commercial
Broker’s Report
Economic Development Department
2A Supp-5
From:demetrick@me.com
To:CouncilMeeting Comments
Subject:5 Districts
Date:Tuesday, May 16, 2023 4:02:03 PM
Dear Council Members,
I write on behalf of myself and my husband who are Palm Desert residents and voters. We
encourage you to adopt the Five Districts plan which was passed by a majority of voters in the
2022 election. We believe adopting this measure will lead to enhanced representation for all
members of Palm Desert. Requiring that each of the five representatives live in the district
he/she represents provides better communication and access of the voters to their
representative making government more efficient and equitable. Kindly vote for adoption of
the Five Districts plan.
Thank you for your consideration.
Sincerely,
Linda DeMetrick and James Campbell
2B Supp-1
From:Rita Robinson
To:CouncilMeeting Comments
Subject:5 District City
Date:Sunday, May 21, 2023 11:30:37 AM
Rita Robinson-Campbell
39090 Desert Greens Dr. E.
Palm Desert CA 92260
Palm Desert City Council
Dear members of the Palm Desert City Council
I want to first thank all of you for helping to keep Palm Desert as one of the
most pleasant and active communities in the Coachella Valley. It’s been years
in the making, as the community continues to grow.
This growth, and changed demographics, fosters many challenges and changes.
For these reasons, it seems a good time to follow the last city election results
for Measure B that passed by 53 percent of voters who decided that we need
five districts instead of two. Opposition to the measure was funded by some
sitting council members.
It’s understandable that they don’t want to lose their seats. A majority of five
council members live in close proximity south of Hovley Lane on the south
side of Palm Desert. The areas they represent, however, considered District 2,
also covers the east, west and North sides with slightly more than 40,000
residents. Another, with slightly more than 10,000 residents, live in District 1,
the central area, represented by one council member.
Changing demographics of the country as a whole, and in Palm Desert, affects
its current residents who deserve representation that will be reflected in a five-
district city council. Council members would then be elected from the districts
in which they reside.
Other cities in the Coachella Valley have gone to five districts, including Palm
Springs, Desert Hot Springs, Cathedral City and Indio.
This seems far more equitable than continuing to function with an outmoded
model that deprives a majority of voters their rights to fair representation. Do
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the right thing and move forward in representing Palm Desert.
Sincerely,
Rita Robinson-Campbell, Palm Desert resident
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From:Mark Freeman
To:CouncilMeeting Comments
Subject:Comments regarding 5 District Proposal
Date:Sunday, May 21, 2023 5:09:21 PM
Dear Members of Council - I'm writing to urge you to make progress on the plan to move to 5
districts. As you know, a majority of Palm Desert voters cast ballots supporting this action.
Progress urgently needs to be made towards developing an equitable (re-)districting plan so
that candidates may run in the next scheduled election cycle. Please follow the will of the
voters and make this action a priority.
Thank you for your attention.
Mark Freeman,
Palm Desert
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From:Megan Beaman Jacinto
To:CouncilMeeting Comments
Subject:Please make Palm Desert a five-district city
Date:Tuesday, May 23, 2023 6:13:48 PM
Dear Members of the Palm Desert City Council,
I am a Palm Desert business owner and taxpayer, and offer this comment in that
capacity, as well as from my perspective as a civil rights attorney. Voting equity is
one of the most fundamental rights guaranteed to us as U.S. citizens, and you have
an opportunity to advance that right for the good of Palm Desert.
I urge you to adopt the calendar suggested in the redistricting staff report and move to
create five voting districts in time for the 2024 election.
The passage of Measure B in 2022 provides the Council a clear mandate from voters,
over 53% of whom approve the creation of districts. The people of Palm Desert now
wait for the Council to provide the representation they have expressed that they want,
and which they deserve.
As you are probably aware, the Council has authority under California Elections
Code section 21605(b) to create districts and conduct district-based elections in this
way as long as it is doing so “for the first time,” including when a Council is adopting
districts for the purpose of transitioning from at-large elections to by-district elections.
Given the current composition of Palm Desert's electoral districts (which continues to
contain a multi-member at-large district), this provision applies to facilitate the city's
process.
The reticence to move to districts has already cost the City legally and financially, and
the risk of further delaying this inevitable transition presents continual risks of
unnecessary legal and financial burdens to the City and its residents.
It is my hope as a Palm Desert business owner that the Council will make the
financially sound and legally astute decision--a decision which follows the mandate of
Palm Desert voters--to move the city into districts at its earliest opportunity.
Megan Beaman Jacinto
Beaman Jacinto Law P.C.
77564 Country Club Drive, Suite 340, Palm Desert, CA 92211
1225 State Street, Suite " i ", El Centro, CA 92243
e: megan@beaman-law.com
o: 760-698-9626
text system: 760-374-3037
www.beaman-law.com
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From:Kenneth Richard
To:CouncilMeeting Comments
Subject:Council District Elections
Date:Wednesday, May 24, 2023 11:25:17 AM
Dear City Councilmembers,
I am writing to you with the hopes that you will vote in favor of district elections, which will provide specific
neighborhoods with a strong voice on the city's policy-making body.
A principal effect of district elections is that they facilitate elections of minority candidates.
If district elections lead to greater racial diversity on a governing board, this may in turn lead to great diversity
among the professional staff.
Thank you for taking my comment into consideration.
Sincerely,
Ken Richard
925-395-7184
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From:Michael J. Finland
To:CouncilMeeting Comments
Subject:City Council meeting slated for May 25, 2023
Date:Wednesday, May 24, 2023 1:05:00 PM
To whom it may concern:
In anticipation of a scheduled Palm Desert City Council meeting on May 25, 2023
regarding the five district proposal, I want to share my thoughts on this topic. This is
an agenda item that has been assessed and scrutinized many times over the course
of several years. Although I am not a Palm Desert resident, it does appear to me that
this transition would make sense for local government. The point and purpose of city
government is primarily to promote and ensure the public health and public safety of
its residents. However, it is incumbent upon city officials to address the needs and
wishes of the constituents. For representation purposes, the citizens of Palm Desert
have expressed a strong desire to segue into a five district venue. By doing so, they
could elect leadership from within their own geographic zone. This individual would be
uniquely familiar to the needs which are endemic to a particular location. The tide is
turning and as city government evolves and is transformed, this change would
dramatically pivot Palm Desert toward essentially diverse schools of thought. Please
consider this matter seriously and vote in favor of this five district proposal.
Respectfully submitted,
Michael J. Finland
Palm Springs
760-464-9509
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From:Gregg Akkerman
To:CouncilMeeting Comments
Subject:Public comment for Agenda Item Action Calendar 2B on May 25, 2023
Date:Wednesday, May 24, 2023 1:32:21 PM
Please include this as a public comment for the May 25, 2023 Council Meeting, agenda item
2B on the action calendar "Request of Direction Regarding Districting Options."
I support the Palm Desert City Council transitioning to five voting districts in time for the
2024 election.
The staff report recently presented to Council explains there is only one hindrance to doing so.
A California city is allowed to redraw district lines once between census years and we used
our "once" in 2022 because our two districts were realigned.
Fortunately, the staff report informs Council that an exception to this rule is a court order,
which has promise because the report suggests the original settlement that created our two
districts could function as the court order. An even stronger version of this exception could be
formed with an amendment by the parties of the settlement. This “Court Order Exception”
(with or without an amendment) allows for a timeline to have five districts in place well before
the 2024 election.
Furthermore, a review of Palm Desert's redistricting issue by the American Civil Liberties
Union finds that the City is allowed to redistrict at any time because it would be "the first
time" our larger District 2 will be transitioned to multiple districts and therefore prohibitions
do not apply.
To conclude, the essence of the issue is clear:
Measure B easily passed in 2022 and now the Council needs to adhere to the will of the people
by creating five voting districts in time for the 2024 elections, an action clearly described and
allowed for in the report from staff and applicable law.
Gregg Akkerman, resident of Palm Desert
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From:Steven Olsen
To:CouncilMeeting Comments
Subject:Election
Date:Wednesday, May 24, 2023 2:22:09 PM
Dear City Councillmembers,
Please cast your votes to establish district elections in Palm Desert. It is the fair and equitable
way to hold elections in a city this size.
Sincerely,
Steven Olsen
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From:City Hall Mail
To:CouncilMeeting Comments
Subject:FW: Request For Direction Regarding Districting Options
Date:Wednesday, May 24, 2023 3:43:40 PM
From: Comcast Email <lenfoster@comcast.net>
Sent: Wednesday, May 24, 2023 3:42 PM
To: City Hall Mail <cityhall@palmdesert.gov>
Subject: Request For Direction Regarding Districting Options
Honorable Members of the Palm Desert City Council- I have taken the time to review the background document on subject agenda item, which will be discussed at your regularly scheduled Council meeting on May 25. Your contracted experts have provided an excellent and detailed explan
Honorable Members of the Palm Desert City Council-
I have taken the time to review the background document on subject agenda item, which will be
discussed at your regularly scheduled Council meeting on May 25. Your contracted experts have
provided an excellent and detailed explanation of the background, legal context, and available
options for your consideration.
Based on all the information available to me, it is my recommendation that the Council direct staff
to vigorously pursue the option of establishing five single member districts. This option, in my
opinion, will provide the residents of Palm Desert with better representation on the Council. Just as
the residents of District One, know who on the Council is their representative, the creation of four
additional geographic districts will afford the City’s residents with a more direct connection to a
Council member in addressing their concerns. I am a resident of Palm Desert, who resides in the
northern portion of the City. It is clear that the responsibility for understanding and addressing the
issues of this portion of the City is currently shared among four (4) members of the Council. I believe
it is critically important for a single Council member to be accountable to the residents of a particular
district, while also keeping an eye on what is in the best interest of the City as a whole. It is always
preferable for Council members to live close to their constituents. This is only possible when
appropriate district are established, and Council members elected are required to live in these
smaller districts.
Thank you for your consideration.
Len Foster
74486 Millennia Way
Palm Desert, CA. 92211
(831) 233-2301
Sent from my iPad
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From:Carlos Garcia
To:CouncilMeeting Comments
Subject:In Favor of Five Districts
Date:Wednesday, May 24, 2023 4:41:21 PM
Dear City Council Members:
As you consider your district system options, please note that the citizenry has spoken loudly
and clearly in the 2022 election that we want the city to move immediately to a five district
system in time for the 2024 November election.
It would be unwise for you to consider any delays or any other motions as the entire city will
be watching what you do, knowing that you are supposed to be doing the will of the people
and that the people have spoken. Any other solution will be seen as proof of ill will on the
part of our elected officials, could inspire future lawsuits and further endanger trust in our
local government. Failure on your part would certainly color any future fiscal measures the
city council might put before the voters. If you don't listen to us, why should we listen to you?
Please note that we want these districts to fairly represent the entire city of Palm Desert so no
part of the city is slighted. We DO NOT WANT the new districts to be gerrymandered for
anyone's personal power or interest. This isn't about you, it's about Palm Desert and our next
fifty years.
Sincerely,
Carlos E. Garcia
Member of the Palm Desert City Finance Committee
CARLOS E. GARCIA CEO
1-323-376-3622
carlosg@garciaresearch.com
GARCIA RESEARCH
www.garciaresearchops.com
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From:Bruce Poynter
To:CouncilMeeting Comments
Subject:Five Districts would not improve Palm Desert.
Date:Wednesday, May 24, 2023 6:59:41 PM
>
> Honorable Mayor and City Council
>
> I am requesting the cities two districts remain as is, and not go to five.
> Five years ago was my first ever involvement in politics. I attended many meetings and was pleased to see how
well the Council Members interacted with Residents.
> I was impressed with how the Council Members addressed our questions. Over the years I watched each council
member, at different times address a residents issue regardless of location, North, East, South or West city area.
Often council members addressed a problem within meeting time and assigned to the appropriate city department
immediately.
> Also the city often hosts forums in specific areas with residents concerns.
> With multiple representatives I have always had access to two or more in a very reasonable time frame. This is
good for all of us. No one is left out.
> I want four representatives, not one.
> Palm Desert is well known as a desirable and well managed city. Trying to fix what isn’t broken creates
problems.
> I say no to five districts.
>
> Respectfully
> Bruce Poynter
> 73-390 Calliandra Street
> Palm Desert, Ca. 92260
> Cell: 760 413 8340
>
>
>
>
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From:Linda Joy Salas
To:CouncilMeeting Comments; councilmeetingcomments@palmdesert.com
Subject:Measure B
Date:Wednesday, May 24, 2023 8:30:32 PM
Dear Council Members
My understanding of your role in the council is to create policies to govern and make sure that
any current or new laws serve the needs of the people who live and work here.
By bringing Measure B to the people, you met that definition in part. Now that you’ve heard
the will of people, it’s your job to move forward and honor your constituents.
I’m sure you realize now that you can’t postpone the inevitable much longer.
Linda Salas
Palm Desert resident
--
Linda Joy Salas (CalBRE: 01192416)
760-625-5129
ljoysalas@gmail.com
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From:Anyse Smith
To:CouncilMeeting Comments
Subject:Email submission for 5/25 City Council Meeting
Date:Thursday, May 25, 2023 7:25:10 AM
Attachments:We sent you safe versions of your files.msg
DWD_Five Districts Letter of Support_052423.pdf
Mimecast Attachment Protection has deemed this file to be safe, but always exercise caution when opening files.
Good Afternoon,
Please provide the attached letter to the Council to become part of the public record for
tomorrow's city council meeting.
Thank you,
Anyse Smith
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From:City Hall Mail
To:CouncilMeeting Comments
Subject:FW: 5 Districts
Date:Thursday, May 25, 2023 7:36:24 AM
Ms. Green reached out to my direct City email. I confirmed that I have forwarded this email to
Council Meeting Comments to be included in public comment.
Thank you,
Erika
From: Debbie Green <dlgreen9194@gmail.com>
Sent: Wednesday, May 24, 2023 10:32 PM
To: City Hall Mail <cityhall@palmdesert.gov>
Subject: 5 Districts
I am a voting resident of Palm Desert, and I voted for the 5 district organization. It passed and needs to be implemented. The city has grown too much for only 2 representatives, and it doesn’t represent the city equally. This would mean more attention to local issues, voting I am a voting resident of Palm Desert, and I voted for the 5 district organization. It
passed and needs to be implemented. The city has grown too much for only 2
representatives, and it doesn’t represent the city equally. This would mean more
attention to local issues, voting equity, and increased campaign efficiency.
The representatives should live in the district they represent, making is easier for
residents to seek support and attention for concerns they may have.
Sincerely,
Debbie Green
74306 Myrsine Ave.
Palm Desert, CA. 92260
dlgreen9194@gmail.com
Sent from my iPad
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From:John Curran
To:kkelly@cityofpalmdesert.gov; Jan Harnik; Evan Trubee; Gina Nestande; Karina Quintanilla; CouncilMeeting
Comments
Subject:Districts and Voting
Date:Thursday, May 25, 2023 7:46:14 AM
I submit my remarks for the Council's attention for the meeting today. I am opposed to
further division of the city to create five voting districts and I am opposed to using ranked
choice voting.
Palm Desert is a small city and is best suited for at-large elections for city council members. I
say this for two major reasons:
1. There is evidence in other cities that have moved to district voting that they do not always
get candidates to run in each district at election time. If no one runs or is elected, then that
district will either not be represented for four years or the council will have to find a citizen to
volunteer to occupy the seat. Neither of these options is optimal in a representative
democracy.
2. At-large representation means that any resident of the city can urge all five council
members to take a particular stand on a matter before the city. If the city elects council
members by districts, my opinion will no longer matter to four of the five council members
and can be safely ignored by those members. A few years ago when the city faced a major
dispute over short term rentals, I wrote to each council member and met with each of them to
express my views on the matter. District member elections will reduce the power of resident's
voices to our elected officials. In a small city, this is a valuable and powerful tool for residents
to use with elected officials.
With respect to ranked choice voting, I think it is a ridiculous method for counting votes and
deciding outcomes in elections. For one thing, it adds to the cost of elections. It also adds a
lot of time for a winner to be decided if no one is elected in the first round. Worst of all, it
takes money and time to explain how it works to the public. I have read explanations that
were hard to understand and some that made no sense at all.
Some years ago I read a magazine article about Albert Einstein, one of the most famous
physicists who ever lived. The reporter asked Einstein if he had trouble explaining his work to
people. Einstein said if you cannot explain what you do to sixth graders, you don't understand
the subject yourself.
In the 2020 election period I sat in several meetings and listened to people explain ranked
choice voting to adults. I was dismayed by the confusion for many in the audience, including
myself, that was the direct result of the complexity of how decisions are made in what has
always been a simple counting process. Then we voted for two seats to be filled in November
2020. One seat was decided on election day. One was not.
The methods involved in determining how a winner would be found involved removing some
candidates from further participation in the counting. Then a particular percentage became the
number to determine a winner. Why or how the percentage ruled made no sense. If no winner
emerged, then more rounds were used. After days of this insanity we learned that the long
nightmare was over and we had a winner for the second seat.
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This is an idea so stupid that it cannot be explained to ordinary people and causes some
elections to last as long as the NBA playoffs. It is a terrible way to elect people to office.
John Curran
Palm Desert, California
Just because an idea appeals to a lot of people doesn't mean it's wrong.
But that's a good working theory. John Tierney
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From:kimffloyd@fastmail.com
To:CouncilMeeting Comments
Subject:Public Comment City Council Meeting 5.25.23 2 B Districting Options
Date:Thursday, May 25, 2023 7:48:26 AM
I will say it again. Palm Desert is ready for five districts. Please move this forward
expeditiously. Regards, Kim Floyd
Dear City Council Members and Staff,
I have been a long time supporter of five city council districts to replace the at large voting of
the past. Although the city council decided to move from at large voting to two city council
voting districts to avoid litigation, I do not believe that this change took advantage of the
opportunity to provide better representative to our voting citizens. Five districts will put most
voters closer to their council member both geographically and for representation.
As you know, in 2022 Palm Desert voters voted Yes in support of Measure B by 53% to
establish 5 Districts, with each District electing a representative who lives in their District. It is
time to move forward to five districts. We should be able to vote for our own District council
member in 2024.
Sincerely,
Kim F Floyd
760-680-9479
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From:Jann Buller
To:Kathleen Kelly; Jan Harnik; Gina Nestande; Karina Quintanilla; Evan Trubee
Cc:CouncilMeeting Comments
Subject:Comments on Districting Options
Date:Thursday, May 25, 2023 8:33:21 AM
Honorable Mayor and Councilmembers:
For most of its history, Palm Desert election rules gave every citizen the opportunity to
choose five candidates, from any part of the city, to serve as their elected representatives.
The right to elect five representatives let residents hold all five council members
accountable, collectively and individually, for all council decisions and actions.
That all changed after a lawsuit compelled Palm Desert to change its election system
beginning with the 2020 election and the plaintiffs and their attorney accepted a two-
district system. Everyone's voting and representation rights declined, and so did council
members’ accountability, as a result of the lawsuit.
Now some voices are clamoring to strip away our votes and representation even further, by
dividing Palm Desert into five districts. Five districts will leave every Palm Desert voter with
a single vote and only one member accountable to us individually.
This is not better government of the people, by the people, for the people. It is lessrepresentative and it is less democratic.
Do not be in a hurry to lead Palm Desert toward five districts. Instead, consider this:
Under the lawsuit settlement there is a window for working through further electoral
changes before the next Census. Palm Desert can take time to make any further
changes thoughtfully, with an eye to developing measures to offset or ameliorate the
shortcomings evident in moving away from at-large elections.
For example, Palm Desert can use this time to consider the experiences and
outcomes of the shift to five districts in our sister cities around the valley. One
problem, for example, is fielding multiple candidates in every district, which Cathedral
City and Desert Hot Springs were unable to do in the last go-round. And we can
better assess other claims favoring five districts, such as lower fund-raising
requirements, which did not prove true in the last Palm Springs election, when one
candidate in a contested district spent more than $100,000 on a campaign in a single
district. Palm Desert should take time to learn from others’ successes and mistakes.
·Ranked-choice voting should be assessed further as well. Many RCV
shortcomings appeared in the 2022 cycle, including voter confusion, ballot
nullification caused by errors, and the added expense of operating and maintaining
a vote-counting software system separate from the county-wide system.
Moreover, Palm Desert is growing steadily, particularly north of Fred Waring, where
new housing is planned or already under development. This will result in
demographic shifts in the coming years that could materially affect results of the next
Census.
I urge you to hold off on taking any other action to change our voting system at this
time.
Jann BullerPalm Desert
2B Supp-21
From:Ellen Kane
To:CouncilMeeting Comments
Subject:5 City District Vote
Date:Thursday, May 25, 2023 9:01:20 AM
Honorable Mayor and Council Members,
Our at large voting system should not be fractured by implementation of five districts. The current and prior
councils have done an excellent job representing all of the city in their decisions and have not treated one sector of
the popluation more favorable than others. Those who feel they haven't had support, to my knowledge, have not
produced any valid arguments to uphold their opinions.
Instead of having cohesive memers representing our city as a whole, I envision and fear that each district could
easily become focused on their district's needs and loose sight of the big picture and the goals for all of Palm Desert.
Last, the power of my vote will be greatly disminished as each district's Council member would need to only answer
and be liability to those who voted them to office. We should and need to have representation and accountability
from all of our Council members as we currenty do.
Sincerely,
Ellen Kane
Palm Desert
760 413 5173
2B Supp-22
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2B Supp-23
From:Ellen Kane
To:CouncilMeeting Comments
Subject:5 City District Vote
Date:Thursday, May 25, 2023 9:01:20 AM
Honorable Mayor and Council Members,
Our at large voting system should not be fractured by implementation of five districts. The current and prior
councils have done an excellent job representing all of the city in their decisions and have not treated one sector of
the popluation more favorable than others. Those who feel they haven't had support, to my knowledge, have not
produced any valid arguments to uphold their opinions.
Instead of having cohesive memers representing our city as a whole, I envision and fear that each district could
easily become focused on their district's needs and loose sight of the big picture and the goals for all of Palm Desert.
Last, the power of my vote will be greatly disminished as each district's Council member would need to only answer
and be liability to those who voted them to office. We should and need to have representation and accountability
from all of our Council members as we currenty do.
Sincerely,
Ellen Kane
Palm Desert
760 413 5173
2B Supp-24
From:Julia Gomez
To:CouncilMeeting Comments
Subject:Public Comment: May 25 City Council Mtg, Agenda Item No. 2B (Districting Process)
Date:Thursday, May 25, 2023 9:25:51 AM
Attachments:We sent you safe versions of your files.msg
2023.05.25 ACLU SoCal Letter to Palm Desert City Council re May 25 Mtg Item 2B.pdf
Mimecast Attachment Protection has deemed this file to be safe, but always exercise caution when opening files.
Attached please find written comment on Agenda Item 2B of today’s agenda. Thank you.
Julia
Julia Gomez, Staff Attorney
ACLU of Southern California
1313 W 8th Street, Suite 200
Los Angeles, CA 90017
(o) 213.977.5258
aclusocal.org || facebook || twitter || blog || app
ACLU SoCal: STAND FOR JUSTICE >> Download our mobile app at mobilejusticeca.org
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