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HomeMy WebLinkAboutReimbursement Agreement - C18172 Contract Amendment 2 Amendment Number 2 - With Sunrise Partners for Street ImprovementsContract No. C18172 CITY OF PALM DESERT FINANCE DEPARTMENT STAFF REPORT REQUEST: Approve an Amendment to the Reimbursement Agreement with Sunrise Desert Partners for Street Improvements Associated with the Toscana Country Club Development SUBMITTED BY: Paul S. Gibson, Finance Director APPLICANT: Sunrise Desert Partners Attn: Phillip K. Smith, Jr. Attn: Nancy Hayes 300 Eagle Dance Circle Palm Desert, CA 92211 DATE: January 27, 2011 CONTENTS: Second Amendment to Agreement C18170 Letter Requesting Extension of Agreement Reimbursement Agreement No. C18170 including first amendment Recommendation By Minute Motion, that the City Council: 1. Approve an amendment to Reimbursement Agreement C18170 with Sunrise Desert Partners, extending payment of the principal for a period of two years at an interest rate of six percent per annum; and 2. Authorize the Mayor to execute the amendment. Background On February 26, 2009, the City Council authorized staff to negotiate an amendment to Reimbursement Agreement No. C18170 with Sunrise Desert Partners, developer of the Toscana Country Club. The original agreement provided for reimbursement to the City for costs related to the installation of certain street improvements on Hovley Lane East. Under the terms of the original agreement, the principal loan amount ($689,585.90) plus Staff Report Approve Amended Reimbursement Agreement Sunrise Desert Partners Page 2 of 2 January 27, 2011 interest ($124,125.46) became due on February 1, 2009. The amendment was approved at the April 9, 2009 City Council meeting. Sunrise Desert Partners is requesting an additional amendment to extend the agreement for a period of two years, with an immediate payment in an amount equal to one-third of the principal balance ($229,862), with the remaining principal accruing interest at a rate of six percent per annum. Interest will continue to be paid quarterly. An additional principal payment of $229,862 would be due on February 1, 2012, and the remaining balance due on February 1, 2013. Fiscal Impact Approval of the request as received will delay the City's receipt of the principal amount of $459,723.90, but will garner a six percent per annum return on the investment. Therefore, staff recommends that City Council approve an amendment to the reimbursement agreement with Sunrise Desert Partners for street improvements associated with the Toscana Country Club development and authorize the Mayor to execute the amendment. Submitted by: Approval: Paul Gibson ohn M. Wohlmuth Finance Director ity Manager CITY COUNCILA710M APPROVED DENTED RECEIVED OTHER MEETING DATE „_,.U:- "...;,;_��� AYES: fflUhi,K�.&=20/71..? NOES: ABSENT: N� ABSTAIN: DY1e VERIFIED BY: M Original on File with Ci Clerk's Office Staff Report Approve Amended Reimbursement Agreement Sunrise Desert Partners Page 2 of 2 January 27, 2011 interest ($124,125.46) became due on February 1, 2009. The amendment was approved at the April 9, 2009 City Council meeting. Sunrise Desert Partners is requesting an additional amendment to extend the agreement for a period of two years, with an immediate payment in an amount equal to one-third of the principal balance ($229,862), with the remaining principal accruing interest at a rate of six percent per annum. Interest will continue to be paid quarterly. An additional principal payment of $229,862 would be due on February 1, 2012, and the remaining balance due on February 1, 2013. Fiscal Impact Approval of the request as received will delay the City's receipt of the principal amount of $459,723.90, but will garner a six percent per annum return on the investment. Therefore, staff recommends that City reimbursement agreement with Sunrise associated with the Toscana Country Clu execute the amendment. Submitted by: Paul Gibson Finance Director b Council approve an amendment to the Desert Partners for street improvements development and authorize the Mayor to Approval: i M. Wohlmuth Manager CONTRACT NO. c18172 REIMBURSEMENT AGREEMENT SECOND AMENDMENT This Second Amendment to Reimbursement Agreement ("Agreement") is made this 27th day of January, 2011, between the City of Palm Desert as a Municipal Corporation ("City"), and Sunrise Desert Partners, a California Limited Partnership ("Developer") (hereinafter collectively referred to as the "Parties"). A. WHEREAS, the Parties hereto have heretofore entered into a Reimbursement Agreement dated August 24, 2000 relating to the development by Developer of two golf courses and approximately 650 homes, in the City of Indian Wells. B. WHEREAS, the northerly boundary abuts Hovley Lane East, and the north half of Hovley Lane East is located in the City of Palm Desert, and has been fully improved, the south half which is not improved is located in the City of Indian Wells. C. WHEREAS, the Parties hereto have heretofore entered into a Reimbursement Agreement Amendment dated April 9, 2009. D. WHEREAS, the Developer is heretofore required to reimburse the City of Palm Desert for expenditures for street improvements on Hovley Lane East. Such expenditures are due to be reimbursed on or before February 1, 2011. Now therefore, the City and Developer agree as follows: l . Developer shall pay, within ten (10) calendar days of the execution of this Agreement, an amount equal to one-third of the principal balance or Two Hundred Twenty Nine Thousand Eight Hundred Sixty Two and No/100 ($229,862.00). 2. Developer shall pay an additional Principal payment of Two Hundred Twenty Nine Thousand Eight Hundred Sixty Two and No/100 ($229,862.00) on February 1, 2012. CONTRACT NO. C18172 3. The payment date for the reimbursement of any and all remaining unpaid Principal and accrued interest is hereby continued to February 1, 2013, said costs shall continue to accrue interest at the rate of 6% per annum. 4. Developer shall continue to make quarterly interest payments until said Principal and accrued interest is paid in full. 5. Other than above set forth, all of the terms, conditions and obligations of said Reimbursement Agreement and Reimbursement Agreement Amendment heretofore referred to be and the same are hereby continued in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. CITY OF PALM DESERT, a Municipal corporation, By: Jean Benson Mayor ATTEST: By Rachelle D. Klassen City Clerk APPROVED AS TO FORM: By David J. Erwin City Attorney SUNRISE DESERT PARTNERS, a California Limited Partnership, managing member, By SDP Gen Par, a Delaware corporation, General Partner LM 2 SUMSE COMPANY January 6, 2011 Mr. John Wohlmuth City Manager City of Palm Desert 73 -5 10 Fred Waring Drive Palm Desert, CA 92211 Re: Toscana Country Club — Hovley Improvements Dear John: In 2003 and 2004 we improved the south half of Hovley Lane East adjacent to our Toscana Country Club development in accordance with a reimbursement agreement with the City of Palm Desert. The total improvement costs were $689,585.90. Under the agreement, the City reimbursed us for the improvement costs and we agreed to repay the City on the earlier of the following: (a) five years after the last reimbursement payment; or (b) completion of the 5001' home at Toscana. The last reimbursement payment was made on February 1, 2004 and, therefore, repayment was due February 1, 2009. In 2009, at our request, the City agreed to amend the reimbursement agreement and extend the principal repayment due date for two years to February 1, 2011. At the time of the extension, we paid all of the accrued interest in full (approximately $130,000) and, during the two year extension, we paid interest quarterly at the rate of 6% per annum. A copy of the 2009 amendment is attached. We would like to request a further modification of the agreement as follows: • We would immediately pay an amount equal to one-third of the principal balance ($229,862). • The agreement would be extended for two years and the unpaid principal balance would continue to bear interest at the rate of 6% per annum. We would continue to pay interest quarterly. We would make an additional principal payment of $229,862 on February 1, 2012. The remaining principal balance and accrued interest would be due February 1, 2013. i00 Eagle Dance Circle, Puler Desert, Cahjbrnia 92211, *,relephone (760) 772-7227, FAX (760) 772--7288 Builder ot'Anterica's Finest Couutrti Chub Catttuuttities Mr. John Wohlmuth January 10, 2011 Page 2 of 2 Please let me know if this arrangement would be acceptable to the City. If so, I will be happy to prepare the necessary amendment to our agreement. Please call me if you have any questions or if you would like to meet to discuss this matter further. Very truly yours, Phillip K. Smith, Jr. President Coachella Valley Division PKS:cd Contract No. C18170 REIMBURSEMENT AGREEMENT This Reimbursement Agreement is made this24th day of August 2000, between the City of Palm Desert, a Municipal Corporation ("City"), and Sunrise Desert Partners, a California Limited Partnership ("Developer"). RECITALS A. WHEREAS, Developer is the owner of real property in the City of Indian Wells (the "Real Property") on which Developer proposes to build a master -planned residential golf course community with two golf courses and approximately 650 homes (the "Project"). The Real Property is described in Exhibit A attached hereto. B. WHEREAS, the northerly boundary of the Real Property abuts Hovley Lane East. The north half of Hovley Lane East is located in the City of Palm Desert and has been fully improved (except for portions of a future median). The south half of Hovley Lane East, which is not improved, is located in the City of Indian Wells. C. WHEREAS, Developer will be required as a condition of approval of the Project to improve the south half of Hovley Lane East. However, based on Developer's phasing plan, such improvements would not occur for several years. City has expressed an interest in accelerating the improvement of the south half of Hovley Lane East, and Developer is willing to do so, on the terms and conditions herein set forth. D. WHEREAS, Developer has caused plans for the improvement of the south half of Hovley Lane East, along with those portions of the median located in the north half, to be prepared (the "Plans"). The Plans, which are described in Exhibit B attached hereto, have been approved by City and by the City of Indian Wells. E. WHEREAS, Developer has dedicated the portion of the Real Property included in the future right-of-way for Hovley Lane East to the City of Indian Wells and the City of Indian Wells has accepted such dedication. . F. WHEREAS, based on the forgoing recitals, the parties desire to enter into this Reimbursement Agreement. NOW, THEREFORE, City and Developer hereby agree as follows: 1. Developer shall construct and install the improvements to the south half of Hovley Lane East in accordance with the Plans ("South Half Improvements"). Developer shall also construct and install the portions of the median located in the north half of Hovley Lane East in accordance with the Plans ("North Half Improvements"), Developer shall enter into a contract with a qualified contractor to perform the work, and such contract shall be subject to City's reasonable prior approval. The contractor shall post performance and labor and material bonds in favor of City and the City of Indian Wells in form and substance reasonably acceptable to City (and to the City of Indian Wells.) Developer shall diligently pursue such constriction and installation to completion. Contract No. C18170 2. (a) City shall reimburse Developer for the actual cost of the preparation of the Plans and for the actual construction costs of the South Half Improvements. Such reimbursement shall be made to Developer as the work progresses, no more frequently than once each month, based on requests for payment made by Developer to City. Each request for payment shall be accompanied by appropriate invoices from the contractor and evidence of payment thereof by Developer, together with appropriate mechanics lien releases. The total amount reimbursed to Developer in accordance with this Paragraph 2 (a) is referred to as the "Total Costs." The date of the final payment by City to Developer hereunder is referred to as the "Final Payment Date." (b) The parties acknowledge that the actual construction costs of the North Half Improvements will be reimbursed to Developer by City from (i) funds currently held by City on account of Community Facilities District No. 91-1 (Indian Ridge), and (ii) funds previously deposited by the developers of other adjacent projects. (c) The parties acknowledge that certain related improvements will not be completed at this time, but will be completed in the future in accordance with the conditions of approval for the Project. Such future improvements include: (i) Final pavement cap on the south half of Hovley Lane East; (ii) Median landscaping; (iii) Sidewalk along south side of Hovley Lane East; and (iv) Landscaping along south side of Hovley Lane East. 3. Developer shall reimburse City for an amount equal to the Total Costs, plus interest, as set forth in this paragraph. The Total Costs shall not bear interest for a period of two years after the Final Payment Date. Thereafter, beginning two years after the Final Payment Date, the Total Costs shall accrue interest at the rate of six percent (6%) per annum. Developer shall make such reimbursement to City on the earlier of the following dates: a. Five years after the Final Payment Date; or b. The date of completion (evidenced by a Certificate of Occupancy issued by the City of Indian Wells) of the 500`h home in the Project. 4. This Agreement shall be binding upon and inure to the benefit of the parties and their respective successors and assigns, In the event legal action is necessary to enforce this Agreement, the prevailing party shall be entitled to recover reasonable attorney's fees and costs, in addition to any other relief to which it may be entitled. Contract No. C18170 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. CITY OF PALM DESERT, an Sheila R. Gilligan,`City Clerk City of Palm Desert, Californ; APPROVED AS TO CONTENT (-=Za Rtcha d J. Fol e , P.E, Assistant City Manager/ Public Works Director APPROVED AS TO FORM .. alla! Da id J.-IjAn, City Attorney SUNRISE DESERT PARTNERS, a California Limited Partnership, managing member By: SDP Gen Par, a Delaware corporation, General Partner By. Phillip K. Smi , Jr., President CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California ss. County of _12 ii 1) ex's a oleo On Fe brcaory f, ,gym I before me, C!� Q c y/ t Je Var ¢ No z<cc•., �..�-6 /t Dall Name and Tille of Officer (e.g,, •Janeboe, Notary Publl ) personally appeared k "S_M I ?-/- „a , Name(e) of Signer(s) DE VORE Corltmtsston # 124L1158 Notary public - California xr9;4:' Riverside County ►vty Comm- B p1res Oct 30, 9DD3 Place Notary Seal Above l9 personally known to me ❑ proved to me on the basis of satisfactory evidence to be the person(ej whose name(s) is/afe subscribed to the within instrument and acknowledged to me that he/sheAl;ey executed the same in his/3t3ir authorized capacity(+ee-), and that by his/her{t4& signature(a) on the instrument the person(s4, or the entit upon behalf of which the person(s) acted, exec d the inst nt. Vjli•-%L�ESS y ha nd/officia eal. gnaVe of Notary Public OPTIONAL Though the Information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached D cument Title or Type of Document: 6V _C !" 9._ c ►ng-7 Document Date: c) 9, r7;) no© Number of Pages: _ _17 Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer Signer's Name; a% �% 1�.. 4 2 1166 4 Mc ❑ Individual Top of thumb here ® Corporate Officer — Tltle(s): Pc-eS i e1 .e n ❑ Partner — ❑ Limited 0 General ❑ Attorney in Fact ❑ Trustee L7 Guardian or Conservator ❑ Other: Signer Is Representing: S�� c-, c jg.5, t• %��c�n dc-S 0 1997 National Notary Ae5ociatlon • 9350 De Solo Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 Prod. No. 5907 Reorder Call Toll -Free 1.800-876.6627 Contract No. C18170 EXHIBIT "A" REAL PROPERTY THE WEST HALF OF SECTION 14 AND THE EAST HALF OF SECTION 15, TOWNSHIP 5 SOUTH, RANGE 6 EAST, SAN BERNARDINO MERIDIAN, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA. Contract No. C18170 EXHIBIT "B" HOVLEY LANE IMPROVEMENT PLANS STREET IMPROVEMENT PLANS (SHEETS 1 THROUGH 10) PREPARED BY RICK ENGINEERING COMPANY AND LABELLED: HOVLEY LANE EAST STREET IMPROVEMENT PLAN CITY OF INDIAN WELLS AND CITY OF PALM DESERT STREET SIGNING AND STRIPING PLANS (SHEETS 1 THROUGH 9) PREPARED BY RICK ENGINEERING COMPANY AND LABELLED: HOVLEY LANE EAST SIGNING AND STRIPING PLAN CITY OF INDIAN WELLS AND CITY OF PALM DESERT /101ki. SUNZISE COMPANY January 14, 2009 Ms. Debra Lee City of Palm Desert 73-510 Fred Waring Drive Palm Desert, CA 92260 RE: Reimbursement Agreement — Hovley Street Improvements Dear Ms. Lee: We have received your letter of January 6, 2009 requesting payment of the principal and interest due under the Reimbursement Agreement dated August 24, 2000 for the Hovley street improvements. Given the current economic climate, we respectfully request a two-year extension to make this payment, under the current terms of 6% annual interest. Thank you for your consideration. Sincerely, Phillip K. Smit , Jr. President 300 Engle Dance Circle, Palm Desert, California 92211, Telephone (760) 772-7227, FAX (760) 772-7288 Builder of Americn's Finest Country Club C'omunwities CONTRACT O. C18171 REIMBURSEMENT AGREEMENT AMENDMENT This Amendment to Reimbursement Agreement is made this 91h day of April. 2009, between the City of Palm Desert as a Municipal Corporation ("City"), and Sunrise Desert Partners, a California Limited Partnership ("Developer"). A. WHEREAS, the parties hereto have heretofore entered into a Reimbursement Agreement dated August 24, 2000 relating to the development by the developer of two golf courses and approximately 650 homes, in the City of Indian Wells. B. WHEREAS, the northerly boundary abuts Hovley Lane East, and the north half of Hovley Lane East is located in the City of Palm Desert, and has been fully improved, the south half which is not improved is located in the City of Indian Wells. C. WHEREAS, the Developer is heretofore required to reimburse the City of Palm Desert for expenditures for street improvements on Hovley Lane East. Such expenditures are due to be reimbursed on or before February 1, 2009. Now therefore, the City and Developer agree as follows: The payment date for the reimbursement of such expenses shall be and the same is hereby continued to February 1, 2011, said costs which are in the amount of $689,585.90 shall continue to accrue interest at the rate of 6% per annum. 2, Developer shall bring the interest payment current through March 31, 2009 in the amount of $130,813.50. Quarterly interest payments thereafter in arrears shall be made by Developer commencing July 1, 2009 and continuing quarterly thereafter until said Principal and accrued interest is paid in full. RMBUS DERWIN\306563.1 Other than above set forth, all of the terms, conditions and obligations of said Agreement heretofore referred to be and the same are hereby continued in full force and effect. IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above written. CITY OF PALM DESERT, a Municipal corporation, Robert A, 4 iegel Mayor ATTEST: By Rochelle D. Kltast-e�n"'-/ City Clerk APPROVED AS TO FORM: By David J. Erwin City Attorney SUNRISE DESERT PARTNERS, a California Limited Partnership, managing member, By SDP Gen Par, a Delaware corporation, General Partner RMBUS'DERWIN 306563,1 2