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Home My WebLink AboutC33950 - Deposit Agmt 4 Purchase of NE Corner of Shadow Mtn Dr CITY OF PALM DESERT STAFF REPORT REQUEST: AUTHORIZATION TO EXECUTE A DEPOSIT AGREEMENT FUNDED BY EL PASEO HOTEL, LLC TO DEPOSIT EARNEST MONEY IN ESCROW FOR THE PURCHASE OF PROPERTY AT THE NORTHEAST CORNER OF SHADOW MOUNTAIN AND LARKSPUR LANE, PALM DESERT, CALIFORNIA (APN 627-262- 008 AND APN 627-262-011) Contract No. C33950 SUBMITTED BY: Ruth Ann Moore, Economic Development Manager DATE: October 23, 2014 CONTENTS: Deposit Agreement Recommendation By Minute Motion: 1. Approve the Deposit Agreement funded by EI Paseo Hotel, LLC to deposit earnest money into escrow for the purchase of property located at the northeast corner of Shadow Mountain Drive and Larkspur Lane, Palm Desert, California and authorize the City Attorney to make non-substantive changes; and 2. Authorize the City Manager to execute said agreement. Executive Summary This agreement which is funded solely by EI Paseo Hotel LLC in the amount of $100,000 is for earnest money to deposit into escrow and held until the sale of the property to the developer. This agreement will be executed in conjunction with the previously approved Disposition Agreement for the purchase and sale of the above referenced property. Backqround At the January 12, 2012 meeting, staff was authorized to release a Request for Proposals (RFP) for a boutique hotel development on the Successor Agency to the Palm Desert Redevelopment Agency (SAPDRA) owned site known as the Larkspur Hotel site. One submittal was received by the deadline on April 20, 2012 to construct a 154 room boutique hotel that conformed to the existing entitlements on the property. The RFP Contract No. C33950 Staff Report EI Paseo Hotel Deposit Agreement October 23, 2014 Page 2 of 2 and subsequent Exclusive Negotiation Agreement called for the developer to deposit $100,000 into escrow once the Department of Finance approved the sale of the property. Approvals to sell the land to EI Paseo Hotel LLC have been received by the Oversight Board and the Department of Finance and the Disposition Agreement was finalized for execution. The attached Deposit Agreement allows for the $100,000, funded by the EI Paseo Hotel LLC, to be deposited into an escrow account and held until the sale of the property. Should the transaction not be completed, all funds will be return to the developer. The developer anticipates submittals for amended entitlements in November of this year, starting construction of the project in May 2015 and completing the construction in eighteen months. The hotel should open for operation by the end of 2016. Fiscal Analvsis These monies for deposit into the escrow account are funded by the developer and will eventually be used towards the purchase of the above referenced property. There is no impact to the General Fund. Submi y: Department Head: t� R th A n Moore, � Martin Alvarez, Economic Development Manager Director of Economic Development Revie ed: / ""3 6 Paul S. Gibson, Director of Finance Rudy costa, Assistant City Manager Approva I: Ct7'Y COLTNCIL ACTION APPROVF,D � DENiF,D � RECEIVED OTHER � MEETI G DATE ,Jo, n M. Wohlmuth, City Manager NOES:_ NG�-tp f � � ABSENT: ___ f.1D►'LQ_ � AI3STAIN: V�RIF[EU BY: Ori�;inal on File with City Clerk's ffice G:\rda\Ruth Ann Moore\word data\STAFF REPORTS\EI Paseo Hotel Deposit Agreement.doc CONTRACT N0. C33950 DEPOSIT AGREEMENT Between CITY OF PALM DESERT a California municipal corporation and EL PASEO HOTEL, LLC CONTRACT NO. C33950 DEPOSIT AGREEMENT �l�his Deposit Agrcement("Agrccmcnt")is made this_day of ,2014,by and between the City of Palm Desert, a California municipal corporation (the "City"), and El Pasco �lotcl, [,I.C, a California limited liability company (the "Applicant"). RECITALS �l�his Agreement is made with respect to the following facts. A. "I�he npplicant has entered or will enter into a Disposition Agreement dated on or about thc date hereof(the'`Disposition Agreement")with the Successor Agency to the Palm Desert Redevelopmcnt ngcncy, a public entity (`SARDA") to acquire certain real property ("Property") located within the City of Palm Dcsert, County of Riverside, California. �Che }'roperty is more partici�larly clescribcd in the lcgal description attached hereto as Exhibit "A". I3. The Applicant is contemplating the development of the Property as a 154 room hotel project. }'ursuant to tl�e terms of the Disposition Agreement, the Applicant intends to submit applications for ��arious discrctionary land use approvals for the development of the Property, and plans for the construction of�the various improvements to be constructed in connection with the Project. nll of t}�c above shall be referred to collectively as the "Project." C. The Applicant has agreed to make a good faith cash deposit in escrow in support of its purc}lase of the Yroperty, as described more fully belo�v. nGR�'I:MNN1� NOW, 1�I IEREFORE, in considcration of the following mutual promiscs and agreements, City and Applicant agree as follows: 1 Incorporation of Recitals. 1�he parties agree that the Recitals constitute the factual basis upon�vhich the City and thc Applicant have entered into this Agreement. The City and the npplicant each acknowledge the accuracy of the Recitals and agree that the Recitals are incorp�rated into this Agreement as though fully set forth at length. 2. I�eposit of Funds. Concurrently with the execution oi�this Agreement, thc Applicant shall deliver to Pirst American Tit le Company 1610 Arden Way, Sacramento,CA 95815 as the Cscro�v Holder the sum of$l 00,000 as a deposit(the"Deposit")toward the purchase price of thc land dcscribcd in this agreement. 2 G`�flcon De�dopmencl.ark�pur\Pp�fzpenu Deposn Agreemrnt 10�la�I�t doc 3. Relcase of Deposit. Concurrently with the consummation of the purchase of the Property by thc npplicant pursuant to the Disposition Agreement,or in the event the Disposition Agrecment is terminated, then First American "I'itle Company is authorized to release the Deposit held by the I�irst American Title Company pursuant to this Agreement to the Applicant. 4. No Waiver of Discretionary Approvals Applicant understands a�ld agrees that City reserves complete discretion and authority regarding the(a)outcome of the Project,and(b)all 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. 5. 'l'erm. The term of this Agreement shall commence on the date that this A�reement is approved by the City Council and fully executed by the parties and shall terminate upon th� earliest to occur of(i) the consummation of the purchase of the Property by the Applicant pursuant to the Disposition n�reement, or (ii) the termination of the Disposition Agreement. 6. Assi nabilitv. 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 �vithheld. In dctermining whether to approve a request by the Applicant to assign this Agreement, thc City may consider,among other things,the proposed assignee's financial status and commitment to the I'roject. Any attempted assignment ofthis Agreement not in compliance with the terms ofthis Agreement shall be null and void and shall confer no rights or benefits upon the assignee. 7. 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 Agrecment. This Agreement may be modified, only by a writing signed by both the authorized representatives of both the City and the Applicant. All moditications io this Agreement musi be approved by the City Council of the City of Palm Dcsert. 8. Bindin�pon Successors. This Agreement and each of its terms shall bc binding upon the City, the Applicant and their respective officers, elected officials, employees, agents, contractors, and permitted successors and assigns. 9. I.e�al Challenges. Nothing hcrein 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 entiret}�, including actual attorneys' fecs,which may be incurred by the City in defense of such action 3 (�\Leon Uc.elop�neut-.Lerk�pur�PD-F�prnx•Ucposn Agiremrnt 10-la-IJ dw: or proceeding. The 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 inay, at any time, notify City in writing of its decision to terminate such rcimbursement obligation and, thcreafter, 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. l0. Attornevs' Fees. In the event that any action or proceeding, including arbitration, is commcnccd by either the City or the Applicant against the othcr to establish the validity of this Agreement or to enforcc 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, tiling fees, service fees, deposition costs, arbitration costs and expert witness fees, including actual costs and attorneys' fees on appeal. 11. Jurisdiction and Venue. "I�his 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 Agreemcnt shall bc hcard in the appropriate court in the County of Riverside,California. 'l�he City and the Applicant each consent to the personal jurisdiction of the court in any such action or proceeding. 12. Severability. If any term or provision of this Agreement is found to be invalid or uneniorceable, the City and the Applicant both agree that they would have executed this ngrcement notwithstanding the invalidity of such tcrm or provision. The invalid term or provision may be severed from the Agrccmcnt and the remainder of the Agreement may bc cnforced in its entirety. 13. Headin�s. The headings of each Section of this Agreement are for the purposes ofconvenience only and shall not be construed to either expand or limit the express terms and languagc ot�cach Scction. 14. Representations of�luthoritv_. rach party signing this Agreement on behalf of a party �vhich 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 hc or she has been authori�ed to sign this Agreement and bind thc party on whose behalf hc or she signs. 15. Notices. Notices required under this Agreement shall be sent to the following: If to the City: City of Palm Desert 73-510 Fred Waring Drivc 4 G�Peon Dc.clopmcnt�l arkspur'PU-li�prmc Dcpoa�:\grccmcnt In.l4.l�1 doe Yalm Dcscrt, CA 92260 Attn: City Managcr With a Copy to: Best Best & Krieger LLP Attention: David J. Erwin, Esq. 74-760 Highway 111, Suite 200 Indian Wells, CA 92210 If to the Applicant: El Paseo Hotel, LLC 3941 Park Drive Suite 20-308 E1 Dorado Hills, CA 95762 Attention: Noticcs given pursuant to this Agreement shall be deemed received as follows: (1) If sent by United Statcs Mail - five (5) calcndar days after dcposit into the Unitcd States Mail, tirst 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. 5 G-�f.un Ue�nlopmcnt.I.arA>Vui`YU�F.sprnsc DrUwrt,\precmrni lu.la-la Joe The addresses ior notices set forth in this Section 16 may be changed upon written notice of such changc to cither the City or thc Applicant, as appropriate. Uatcd: CITY UF PAI.M vESERT a California municipal corporation By: John M. Wohlmuth, City Manager A"I'"I�EST: I3y: Rachelle Klassen, City Clerk APPROVLI) AS T'O 1�'ORM: By: Uavid J. Crwin, City Attorney I�ated: APPLICANT �;I. PASi;O I IOTI�.I„ LLC, a California limit�d liability company �y: Name: Robert A. Leach for West River Inc. Title: Managin� Member 6 (i�-.Pcon Ucvclopmrn�\I ar{.�pur`PU�P�priuc Ucpusn:lgieaucm 10�14�I��doc Exhibit "A" Legal Description of thc Property [LEGAL DESCRIPTION TO BE CONFIRMEUJ ALL OI� LUTS 6 AND 7, A PORTION OF LO"1� 1 AND A PORTION OF LOT 5 IN BLOCK Q OP PALM UFSERT iTNIT NO. 1, AS PCR MAP RF.CORDCD IN BOOK 21, PAGCS 50 TO 54 INCLIJSIVI-: OF MAPS, IN "l'EIF. OFFICE OF THE COUNTY RECORUF,R OF SAID COiTNTY, [)F,SCRIBED AS FO[,LOWS: BCGINNING A"1� THC NORI�H�AST CORNER OF SAID LOT 7; 'rHENCE ON THC CASTF,RI_Y LINC OF SAID LOT 7 AND I"I�S SOUTHERLY PROLUNGATION, SOUTH 0°08'35" �,AST, 400.00 FEET TO THE NORTHGRLY I.,INE OF SHADOW MOUNTAIN DRIVI;, 60.00 FCCT WIDE; THENCE ON SAID NORTHERLY LINE, 500 SOUTH 89°44'35" WCST. 199.96 FCET TO "I�HE BCGINNING OF A TANGENT CURVE CONCAVE NORT�HL:ASTERI,Y AND HAVING A RADIUS OF 20.00 FEF,T; THCNCE NORI�HWF.STERLY ON SAID CURVE THROUGH �1 CENTRAL �1NGLC OF 90°06'S0", A I�ISTANCF. OF 31.46 FF.F"l� "I�O THE EnS�I�ERLY LIN� OF LARKSPUR LANE, 60 FEET WIDF.; "l�l IENCC TnNGENT TO SAID CURVE AND ON T��E EASTF,RLY LINE, NORTH 00°08'3S' WCST, 379.96 FEE�I' "CO THE NORTHWEST CORNCR Ol-� SAID LO"l� 7; TH�:NCI-; ON THI-: NORTHERLY LINC OF SnID LOT 7, NORTH 8944'35" EAST�R, 62.11 FEE"1'; THF.NC�; LCAVING SAID NOR1'f IERLY I,INE, NORT'H 66°04'S5" EAST, 96.85 F�;E"I'; THENC�; NURTI I 73°1�'2S' EAS"I', 36.83 FEE"1'; THENC�; SOUTI I 13°49'41" EAST, 19.88 I��EET: TFI�:NCC SOU"I�II 12°31'S3" WEST, 30.76 FEET TO "l�l-IE AFOREMENTIONED NORTHCRLY I,INC Ol�' LOT 7; THENCF ON SAIll NORTHERLY LINE, NORTH 89°44'35" EAS"I', 36.01 I�'�,C TO TI1�; POINT OF BEGINNING. 7 L`-I�ion I)c.clnpnicntd.nik�pur I'U�L��+aue Urposit Agiermcni 10.14�Id doc