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HomeMy WebLinkAboutRes OB-180 (2)BY OVERSIGHT BOARD ON r* -dt- lstn STAFF REPORT VERIFIED BY aS.S-t-�-��� OVERSIGHT BOARD TO Teal on file with City Clerk's.Office SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY MEETING DATE: SUBMITTED BY: REQUEST: Recommendation June 4, 2018 Veronica Tapia, Senior Management Analyst ADOPT OVERSIGHT BOARD RESOLUTION NO. OB- 18o APPROVING THE ASSIGNMENT OF THE SUCCESSOR AGENCY'S INTERESTS AND OBLIGATIONS UNDER A DISPOSITION AND DEVELOPMENT AGREEMENT AND RELATED DOCUMENTS FOR THE MCCALLUM THEATRE PROPERTY AND TAKING OTHER RELATED ACTIONS By Minute Motion that the Oversight Board: Waive further reading and adopt Resolution No. OB-180 approving the assignment of the Successor Agency's obligations, rights and interests under a Disposition and Development Agreement, a Lease, Sublease and other documents relating to the McCallum Theatre property from the Successor Agency to the City of Palm Desert. Executive Summary In 2001, the former Palm Desert Redevelopment Agency executed documents relating to a Disposition and Development Agreement, a lease, and a sublease as a means of ensuring that the McCallum Theatre -- a respected and important regional performing arts and cultural facility -- would continue to operate at its location in the former Redevelopment Agency's Project Area No. 1. These agreements remain in effect and bind the Successor Agency, as the successor to the former Redevelopment Agency. Background The McCallum Theatre, located at 73-000 Fred Waring Drive, is an important performing arts and cultural venue in the City of Palm Desert and the Coachella Valley region. The Theatre is operated by Friends of the Cultural Center, Inc., a California nonprofit public benefit corporation. In 2001, having determined that the continued operation of the Theatre at its present location would assist in the revitalization of Project Area No. 1, encourage private sector G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Palm Desert - OB staff report re McCallum Theatre assignment Joint Consideration 6-4-18.docx ) Staff Report Assignment of McCallum Theatre Lease and Related Actions June 4, 2018 Page 2of2 investment and create employment opportunities in the Project Area, the former Redevelopment Agency entered into agreements with Friends of the Cultural Center, Inc. and executed related documents. Pursuant to such documents, the former Redevelopment Agency assumed responsibilities as the tenant of the Theatre property and, in turn, subleased the property to Friends of the Cultural Center, for the rent of $1.00 per year. The arrangement serves to ensure that a performance arts facility would remain at its present location in the City until March 1, 2049, the end of the lease term. These agreements remain in effect and bind the Successor Agency, as the successor to the former Redevelopment Agency. Staff recommends that the Board approve the assignment of the Successor Agency's obligations, rights and interests under these documents to the City, as part of the wind -down of the former Redevelopment Agency's affairs. The City will pay $50.00 to the Successor Agency in consideration for such assignment. Staff recommends that the Board approve the assignment of the Successor Agency's obligations, rights and interests under these documents to the City, in furtherance of the Successor Agency's task to wind -down the former Redevelopment Agency's affairs. Fiscal Analysis The assignment of the Successor Agency's interests under the Theatre documents to the City is an effective way to: (i) terminate the Successor Agency's liabilities and obligations under such documents and (ii) continue to ensure that the Theatre remains at its present location to serve its function as an important performance arts and cultural center for the City and the region -- thereby encouraging private sector investment, creating employment opportunities in Project Area No. 1, and increasing revenues to the taxing entities. LEGAL REVIEW DEPT. REVIEW N/A Reveiwed by RWG Robert W. Hargreaves City Attorney CONTENTS: Martin Alvarez Director of Economic Development FINANCIAL REVIEW CITY MANAGER t Moore Director of Finance Jkae 7/- Lauri Aylaian Executive Director Resolution No. OB-180 Draft Assignment and Assumption Agreement, between the Successor Agency and the City of Palm Desert G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Roard\Palm Desert - OH staff report re McCallum Theatre assignment Joint Consideration 6-4-I8.docx RESOLUTION NO. OB - 180 A RESOLUTION OF THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY APPROVING THE ASSIGNMENT OF THE SUCCESSOR AGENCY'S INTERESTS AND OBLIGATIONS UNDER A DISPOSITION AND DEVELOPMENT AGREEMENT AND RELATED DOCUMENTS FOR THE MCCALLUM THEATRE PROPERTY AND TAKING OTHER RELATED ACTIONS RECITALS: A. The McCallum Theatre (the "Theatre"), located at 73-000 Fred Waring Drive (the "Property"), is an important performing arts and cultural venue in the City of Palm Desert (the "City") and the Coachella Valley region; and B. The Theatre is operated by Friends of the Cultural Center, Inc., a California nonprofit public benefit corporation (the "Center"); and C. The Property is located within one of the project areas of the former Palm Desert Redevelopment Agency (the "Former Agency"), designated Project Area No. 1, As Amended (the "Project Area"); and D. Having determined that the continued operation of the Theatre at its present location would assist in the revitalization of the Project Area, encourage private sector investment and create employment opportunities in the Project Area, in 2001, the Former Agency entered into agreements with the Center and executed related documents (collectively, the "Theatre Documents"); and E. Among the Theatre Documents are a Disposition and Development Agreement, dated as of June 28, 2011, an Amendment and Assignment of Ground Lease, dated as of July 26, 2001, a Lease, dated as of July 26, 2001 (the "Lease") and a Sublease, dated as of July 26, 2001 (the "Sublease"); and F. Pursuant the Theatre Documents, the Former Agency assumed responsibilities as the tenant under the Lease, and the Center agreed to pay rent of $1.00 per year as the subtenant under the Sublease; and G. The Theatre Documents serve to ensure that a performance arts facility would remain at the Property — to serve the Project Area, the City and the region — until March 1, 2049, the end of the term of the Lease and Sublease; and H. The Theatre Documents remain in the effect and bind the Successor Agency to the Palm Desert Redevelopment Agency (the "Successor Agency") as the successor to the Former Agency. I. In furtherance of the Successor Agency's task to wind -down the Former Agency's affairs, there has been prepared the form of an Assignment and Assumption G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Palm Desert - OB reso re McCallum Theatre assignment 6-4-I8.docx Resolution No. OB- 180 Agreement (the "Assignment Agreement"), to be entered into by the Successor Agency and the City, whereby the Successor Agency will assign all of its obligations, rights and interests under the Theatre Documents to the City, in consideration for the City's payment of $50.00; and J. Pursuant to Section 34181(e), upon the direction of the Oversight Board of the Successor Agency, the Successor Agency may terminate its participation in an arrangement with any private party if such termination would reduce liability and increase revenues to taxing entities and would be in the best interests of the taxing entities; and K. The assignment of the Successor Agency's interests under the Theatre Documents to the City and the implementation of the Assignment Agreement are an effective way to: (i) terminate the Successor Agency's liabilities and obligations under the Theatre Documents and (ii) continue to ensure that the Theatre would remain at the Property to serve its function as an important performance arts and cultural center for the City and the region -- thereby encouraging private sector investment, creating employment opportunities in the Project Area, and increasing revenues to the taxing entities of the Project Area; NOW, THEREFORE, THE OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY DOES HEREBY RESOLVE, DETERMINE AND ORDER AS FOLLOWS: Section 1. The above recitals are true and correct and are a substantive part of this Resolution. Section 2. The Oversight Board hereby approves and directs: (i) the Successor Agency's assignment of its obligations, rights and interests under the Theatre Documents to the City; and (ii) the Successor Agency's execution and delivery of the Assignment Agreement, substantially in the form of Exhibit A hereto. Section 3. For the purposes of HSC Section 34181(e), the Oversight Board hereby finds and determines that the Successor Agency's execution and delivery of the Assignment Agreement (under which the City will assume the Successor Agency's obligations under the Theatre Documents, and will pay $50 in consideration of the assignment thereunder): (i) would reduce liabilities and increase net revenues to the taxing entities, and (ii) are in the best interests of the taxing entities. -2- G:\rda\Veronica Tapia\Word Files\Staff Reports\Oversight Board\Palm Desert - OB reso re McCallum Theatre assignment 6-4-18.docx Resolution No. OB-180 Section 4. The members of this Oversight Board and the staff of the Successor Agency are hereby authorized, jointly and severally, to do all things which they may deem necessary or proper to effectuate the purposes of this Resolution and the Assignment Agreement. PASSED, APPROVED and ADOPTED this 4th day of June, 2018. AYES: NOES: ABSENT: ABSTAIN: ATTEST: SUSAN MARIE WEBER, CHAIR RACHELLE D. KLASSEN, SECRETARY OVERSIGHT BOARD OF THE SUCCESSOR AGENCY TO PALM DESERT REDEVELOPMENT AGENCY -3- G.\rda\Veronica Tapia\Word Piles\Staff Reports\Oversight Roard\Palm Desert - 0[3 reso re McCallum 'Theatre assignment 6-4-I8.docx RESOLUTION NO. OB - 180 EXHIBIT A ASSIGNMENT AND ASSUMPTION AGREEMENT (substantial final form) G \rda\Veronica "fapia\Word Files\Staff Reports\Oversight 13oard\Palm Desert - OB reso re McCallum Theatre assignment 6-4-18.docx RESOLUTION NO. OB — 180 RECORDING REQUESTED BY: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92660 And when recorded return to: City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92660 Attn: City Manager With a copy to: Richards, Watson & Gershon 355 S. Grand Ave., 40th Floor Los Angeles, CA 90071 Attn: Jim G. Grayson, Esq. SPACE ABO['E THIS' LIAT FOR RbrORUER ;S (SSE This Assignment and Assumption Agreement is exempt from Recording Fees pursuant to California Government Code Sections 6103 and 27383 ASSIGNMENT AND ASSUMPTION AGREEMENT (McCallum Theatre) This ASSIGNMENT AND ASSUMPTION AGREEMENT (the "Agreement"), is dated as of , 2018, and is entered into by and between the SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY (the "Successor Agency"), and the CITY OF PALM DESERT, a California municipal corporation (the "City"). RECITALS A. The former Palm Desert Redevelopment Agency (the "Former Agency"), Friends of the Cultural Center, Inc. (the "Center"), McCallum Theatre Foundation, Inc. (the "Foundation"), and Desert Community College District (the "College"), entered into that certain Disposition and Development Agreement, dated as of June 28, 2001 and pertaining to that certain property described in Exhibit A attached hereto (the "DDA"). B. Pursuant to the DDA, the Former Agency was assigned and assumed certain of the rights and obligations of the Center in that certain ground lease by and between the College and the Center dated as of March 2, 1983 (as amended, the "Ground Lease") pursuant to that certain Amendment and Assignment of Ground Lease among the College, the Former Agency and the Center, and dated as of July 26, 2001 (and as described in that certain Memorandum of Assignment, Lease and Sublease dated July 26, 2001 and recorded as document 2001-347794 in the official records of the County of Riverside) (the "Assignment'). G:\rda\Veronica Tapia\Word Files\Staff Reports\Successor Agency\Assignment and Assumption Agreement - SA to City Palm Desert - McCallum .docx RESOLUTION NO. OB - 180 C. Pursuant to the DDA, the Center and the Former Agency entered into that certain Lease with the Center, dated as of July 26, 2001 (the "Lease"). D. Pursuant to the DDA, the Former Agency entered into that certain Sublease with the Center, dated as of July 26, 2001 (the "Sublease"). E. Pursuant to AB X 1 26 (enacted in June 2011, as modified by the California Supreme Court's decision in California Redevelopment Association, et al. v. Ana Matosantos, et al., 53 Ca1.4th 231(2011) ("Matosantos"), the Former Agency was dissolved as of February 1, 2012, the Successor Agency was established, and an oversight board to the Successor Agency was established. F. Pursuant to California Health and Safety Code ("HSC") Section 34175(b) and the California Supreme Court's decision in Matosantos, on February 1, 2012, properties of the Former Agency transferred to the control of the Successor Agency by operation of law, including the Former Agency's rights and obligations under the DDA, the Ground Lease, the Lease and the Sublease, and all other documents pertaining to and executed by the Former Agency in connection therewith. NOW, THEREFORE, for and in consideration of the following agreements of the parties hereto and the payment of Fifty Dollars ($50.00) by the City to the Successor Agency, the receipt of which is hereby acknowledged by the Successor Agency, the City and the Successor Agency hereby agree as follows: AGREEMENT 1. Assignment. As of the date hereof, the Successor Agency assigns to the City: (i) all of the Successor Agency's rights and interests in, under and to the DDA, the Ground Lease, the Lease, and the Sublease, and all other documents pertaining to and executed by the Former Agency in connection therewith; and (ii) all of the Successor Agency's obligations under the documents described in (i) above arising after the date hereof; it being agreed among the parties hereto that the Successor Agency shall retain the obligations or liability under such documents that arose prior to the date hereof. 2. Assumption. As of the date hereof, the City accepts the assignment of the Successor Agency's rights, interests in, under and to the DDA, the Ground Lease, the Lease and the Sublease, and all other documents pertaining to and executed by the Former Agency in connection therewith as described in Section 1(i), and assumes the obligations of Successor Agency thereunder arising after the date hereof. 3. Governing Law. This Agreement shall be governed by, and construed in accordance with, the laws of the State of California. 4. Further Assurances. The parties hereto hereby agree to execute such other documents and perform such other acts as may be necessary or desirable to carry out the purposes of this Agreement. 5. Successors and Assigns. This Agreement shall inure to the benefit of, and be binding upon, the parties hereto and their respective successors and permitted assigns. G:\rda\Veronica "Fapia\Word Files\Staff Reports\Successor Agency\Assignment and Assumption Agreement - SA to City Palm Desert - McCallum .docx-2- RESOLUTION NO. OB - 180 6. Attorneys' Fees. Should any action be brought arising out of this Agreement, including, without limitation, any action for declaratory or injunctive relief, each party shall bear their own attorneys' fees and costs and expenses of investigation as may be incurred. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the date first set forth above. SUCCESSOR AGENCY: SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF PALM DESERT By: Lauri Aylaian, Executive Director CITY: CITY OF PALM DESERT, a California municipal corporation By: Sabby Jonathan, Mayor Attest: Rachelle D. Klassen, City Clerk APPROVED AS TO FORM: RICHARDS, WATSON & GERSHON, A Professional Corporation By: Jim Grayson Special Counsel to the Successor Agency G:\rda\Veronica I apia\Word Files\Stair Reports\Successor Agency\Assignment and Assumption Agreement - SA to City Palm Desert - McCallum .docx-3- RESOLUTION NO. OB - 180 EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY THAT PORTION OF THE SOUTHWEST QUARTER OF SECTION 17, TOWNSHIP 5 SOUTH, RANGE 6 EAST, SAN BERNARDINO BASE AND MERIDIAN, IN THE CITY OF PALM DESERT, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, DESCRIBED AS FOLLOWS: BEGINNING AT THE SOUTHWESTERLY CORNER OF SECTION 17, TOWNSHIP 5 SOUTH, RANGE 6 EAST AND; THENCE ALONG THE WESTERLY LINE OF SAID SECTION NORTII 0° 02' 27" EAST, 1038.00 FEET; THENCE SOUTH 89° 57' 33" EAST, 55.00 FEET TO THE TRUE POINT OF BEGINNING; THENCE SOUTH 89° 57' 33" EAST, 325.00 FEET TO A RADIAL POINT AT THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 200.00 FEET; ALONG SAID CURVE THROUGH AN ANGLE OF 90° 06' 33", AN ARC DISTANCE OF 314.54 FEET TO A RADIAL POINT AT THE END OF SAID CURVE; THENCE SOUTH 0° 09' 00" EAST, 98.24 FEET; THENCE NORTH 89° 51' 00" EAST, 216.77 FEET; THENCE SOUTH 0° 09' 00" EAST, 270.00 FEET; THENCE NORTH 89° 51' 00" EAST, 275.00 FEET; THENCE SOUTH 0° 09' 00" EAST, TO INTERSECT WITH A LINE PARALLEL TO AND 68.00 FEET NORTH OF THE SOUTHERLY LINE OF SECTION 17; THENCE ALONG SAID LINE SOUTI L 89° 51' 00" WEST, 999.93 FEET TO A RADIAL, POINT AT THE BEGINNING OF A CURVE CONCAVE NORTHEASTERLY HAVING A RADIUS OF 20.00 FEET; ALONG SAID CURVE THROUGH AN ANGLE OF 90° 11' 27", AN ARC DISTANCE OF 31.48 "I'O A POINT RADIAL TO A LINE PARALLEL WITH ANI) 55.00 FEET EAST OF THE WESTERLY LINE OF SECTION 17; THENCE ALONG SAID LINE TO THE TRUE POINT OF BEGINNING. G:\rda\Veronica Tapia\Word Piles\Staff Reports\Successor Agency\Assignment and Assumption Agreement - SA to City Palm Desert - McCallum .docx RESOLUTION NO. OB - 180 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. STATE OF CALIFORNIA COUNTY OF RIVERSIDE On before me, 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, and that by his/her/their signature(s) on the instrument the person(s), or the entity(ies) 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. Place Notary Seal Above Signature of Notary Public G:\rda\Veronica"1'apia\Word Files\Staff Reports\Successor Agency\Assignment and Assumption Agreement - SA to City Palm Desert - McCallum .docx RESOLUTION NO. OB - 180 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. STATE OF CALIFORNIA COUNTY OF RIVERSIDE On before me, 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, and that by his/her/their signature(s) on the instrument the person(s), or the entity(ies) 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. Place Notary Seal Above Signature of Notary Public C?\rda\Veronica Tapia\Word Files\Staff Reports\Successor Agency\Assignment and Assumption Agreement - SA to City Palm Desert - McCallum .docx RESOLUTION NO. OB - 180 CONSENT TO ASSIGNMENT The Center, the Foundation and the College do hereby consent to the assignment of the interests and obligations of the Successor Agency to the City as described in the Agreement to which this consent is attached. CENTER: Friends of the Cultural Center, Inc. By: Name: Title: Mitch Gershenfeld President and Chief Executive Officer FOUNDATION: McCallum Theatre Foundation By: Name: Harold Matzner Title: Chairman By: Name: Mitch Gershenfeld Title: President and Chief Executive Officer COLLEGE: Desert Community College District By: Name: Aurora Wilson Title: Board Chair G:\rda\Veronica Tapia\Word Files\Staff Reports\Succcssor Agency\Assignment and Assumption Agreement - SA to City Palm Desert - McCallum .docx RESOLUTION NO. OB - 180 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. STATE OF CALIFORNIA COUNTY OF RIVERSIDE On before me, 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, and that by his/her/their signature(s) on the instrument the person(s), or the entity(ies) 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. Place Notary Seal Above Signature of Notary Public G \rda\Veronica Tapia\Word Files\Staff Reports\Successor Agency\Assignment and Assumption Agreement - SA to City Palm Desert - McCallum .docx RESOLUTION NO. OB - 180 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. STATE OF CALIFORNIA COUNTY OF RIVERSIDE On before me, 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, and that by his/her/their signature(s) on the instrument the person(s), or the entity(ies) upon behalf of which the person(s) acted, executed the instrument. 1 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. Place Notary Seal Above Signature of Notary Public G:\rda\Veronica Tapia\Word Piles\Staff Reports\Successor Agency\Assignment and Assumption Agreement - SA to City Palm Desert - McCallum .docx RESOLUTION NO. OB - 180 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. STATE OF CALIFORNIA COUNTY OF RIVERSIDE On before me, 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, and that by his/her/their signature(s) on the instrument the person(s), or the entity(ies) 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. Place Notary Seal Above Signature of Notary Public G:\rda\Vcronica'I apia\Word Piles\StatrReports\Successor Agency\Assignment and Assumption Agreement - SA to City Palm Desert - McCallum .docx