HomeMy WebLinkAboutR19820 - 5th Amndmnt - American Invstmnt Palms to Pines East LLCPALM DESERT REDEVELOPMENT AGENCY
STAFF REPORT
REQUEST: APPROVE FIFTH AMENDMENT TO THE OWNER
PARTICIPATION AGREEMENT WITH AMERICAN INVESTMENT
PALMS TO PINES EAST LLC
SUBMITTED BY: CATHERINE WALKER, SENIOR MANAGEMENT ANALYST
DEVELOPER: AMERICAN INVESTMENT GROUP
301 FOREST AVENUE, SECOND FLOOR
LAGUNA BEACH, CA 92651
DATE: JANUARY 8, 2009
CONTENTS: FIFTH AMENDMENT TO OWNER PARTICIPATION AGREEMENT
Recommendation:
By Minute Motion, that the Agency Board:
Approve the Fifth Amendment for improvements to the property
pursuant to the Owner Participation Agreement between the Agency
and American Investment Palms to Pines East LLC; and
2. Authorize the Chairman to execute the Amendment incorporating the
changes.
Funds are available in Account No. 850-4435-464-4001.
Executive Summary:
The scope of work for the Palms to Pines East development is complete. However due
to the delay in construction and subsequent billing, the OPA has lapsed. The purpose of
this Amendment is to extend the date for submission of both payment requests and the
Notice of Completion. The extension will allow American Investment to submit additional
payment requests, inclusive of all back-up materials required by the OPA for Phases I, II
and III, along with the recorded Notice of Completion. American Investment's payment
requests are not -to -exceed the maximum amount of the outstanding Agency balance for
each phase as subject to the limits set forth in the Second Amendment.
Staff Report
Approve Fifth Amendment to OPA (American Investment LLC)
Page 2 of 3
January 8, 2009
Discussion:
The Palms to Pines East project was completed as of December 21, 2007. All
necessary building approvals and inspections have been accomplished, and the project,
as a whole, is available for occupancy. American Investment LLC failed to meet the
October 31, 2007 final deadline for completion, outlined in the Fourth Amendment,
which was approved by the Agency Board on May 24, 2007 placing American
Investment in contractual default. Subsequently, the Agency Board action taken on
January 10, 2008 accepted American Investment's cure of default and allowed for the
submission of payment applications and all necessary items established in Section 3.1
Aaencv Consideration, as set forth in the Second Amendment to the Owner
Participation Agreement. These necessary items for disbursement are inclusive of the
following: lien waivers, contract/architect certifications. Payment shall only be
requested for hard costs, and retainage in the amount of 10% shall be held until the
Certificate of Completion for the applicable improvements has been filed with the
Agency, and contractual timelines have been accomplished. The Agency's payment
obligation is contingent upon American Investment submitting the applications for
payment and all outlined materials no later than 180 days after the "Completion Date"
for that phase. The "Completion Date" for each phase is set forth in the Fourth
Amendment to the OPA as April 30, 2006 for Phases I and II, and October 30, 2007 for
Phase Ill. If American Investment fails to meet the 180 day timeline, American
Investment is deemed to have waived, released, and relinquished any and all rights to
any further payments from the Agency for that phase. American Investment failed to
meet these criteria, and is requesting the additional time to facilitate its submittals for
reimbursement.
The purpose of the Fifth Amendment is to extend the time period for American
Investment to submit appropriate evidence of hard construction costs and
corresponding items outlined in Section 3.1, for Phases I, II, and III. The Fifth
Amendment also allows American Investment to provide the "Certification" (as defined
in the Fifth Amendment) to the Agency in lieu of lien releases in support of American
Investment's payment requests. The Fifth Amendment will also extend the time period
for American Investment to submit Certificates of Completion for each phase, or
alternatively, a single Certificate of Completion for the entire project and receive the ten
percent Retainage Amount. The Certificate of Completion must be a copy of a recorded
document evidencing completion of the Project.
G:\rda\Cathy Walker\Word Data\STAFF REPORTS\Staff 5th Amendment OPA.doc
Staff Report
Approve Fifth Amendment to OPA (American Investment LLC)
Page 3 of 3
January 8, 2009
Outstanding Balance for Phases I, II, and III:
For Phase I: Forty -Eight Thousand Five Hundred Sixty -Five Dollars and Sixty -Seven
Cents ($48,565.67)*
For Phase II: Zero ($ 0)*
For Phase III: Five Hundred Fifty -One Thousand One Hundred Eighty -One Dollars
($551,181.00)*
*10% of this amount to be held as part of the Retainage Amount
Agency staff recommends reinstating American Investment's ability to request further
payment from the Agency, pursuant to the terms and conditions of the Fifth
Amendment.
Submitted By:
Catherine Walker
Senior Management Analyst
Approval:
Department Head:
`Dave Yrigoye
Director of evelopment/Housing
Paul S. Gibson, Director of Finance
- d" � - Le -
ustir McCarthy, ACM velopment os L. Ortega, Executiv irector
EY RDA
ON
Original on file with Cite ie`Ic'8 Office
G:\rda\Cathy Walker\Word Data\STAFF REPORTS\Staff 5th Amendment OPA.doc
Contract No. R19820A
FIFTH AMENDMENT
TO
OWNER PARTICIPATION AGREEMENT
(Palms to Pines)
THIS FIFTH AMENDMENT TO OWNER PARTICIPATION AGREEMENT (Palms to
Pines) ("Fifth Amendment") dated as of January 8, 2009 ("Effective Date") is entered into by and
between the Palm Desert Redevelopment Agency, a public body, corporate and politic
("Agency"), and American Investment Palms to Pines East, LLC, a California limited liability
company ("Owner"). The Agency and the Owner are sometimes referred to in this Fifth
Amendment individually as a "Party" and collectively as the "Parties:" All terms indicated to be
defined terms by initial capitalization in this Fifth Amendment shall have the meaning ascribed
to the same term in the OPA, unless otherwise specifically defined in this Fifth Amendment.
RECITALS
WHEREAS, the Agency and the Owner have entered into that certain Owner
Participation Agreement, dated as of March 25, 2004, as subsequently amended on four (4)
previous occasions ("'OPA"), affecting that certain real property located in the City of Palm
Desert, County of Riverside, State of California, more particularly described on Exhibit "A"
attached to the OPA; and
WHEREAS, pursuant to Section 3.1 of the OPA, the Owner is required, as a condition of
payment of the Agency Consideration (as defined in the OPA) in reference to each Phase (as
defined in the OPA) of the Improvements (as defined in the OPA), to provide certain submittals
to the Agency; and
WHEREAS, pursuant to Section 3.1 of the OPA, all such submittals shall be in such form
and substance as the Agency may reasonably require, including appropriate lien waivers; and
WHEREAS, pursuant to Section 3.1 of the OPA, "Owner shall request final payments of
the balance of the Agency Consideration on or before the date that is one hundred eighty (180)
days after the Completion Date of each Phase or shall be deemed to have waived, released and
relinquished any and all rights to the same"; and
WHEREAS, the Owner has submitted payment request to the Agency for Phases I and II
(as defined in the OPA) of the Improvements and received payment for both of these Phases; and
WHEREAS, the Owner submitted a payment request to the Agency for Phase III (as
defined in the OPA) of the Improvements, but in the reasonable judgment of Agency, the Owner
did not timely submit lien waivers relative to Phase III satisfactory to the Agency; and
WHEREAS, pursuant to Section 3.1 of the OPA, the Retainage Amount (as defined in
the OPA) retained by the Agency with respect to the Agency Consideration paid for each Phase
of the Improvements shall only be paid to the Owner "Upon the Agency's receipt of a Certificate
of Completion (as defined in the OPA) for the applicable Phase of the Improvements"; and
S DPUB\D W ILLIAMS\3 71729.5
Contract No. R19820A
WHEREAS, the Phase I and Phase II Completion Date was April 30, 2006, and the Phase
III Completion Date was October 30, 2007; and
WHEREAS, all Phases of the Improvements have been completed; and
WHEREAS, the Parties intend this Fifth Amendment to provide for the Owner to have
the opportunity to submit additional payment requests for all Phases of the Improvements; and
WHEREAS, the Parties further intend this Fifth Amendment to provide for the Owner to
satisfy its outstanding obligation to provide lien waivers under Section 3.1 of the OPA by
executing a certification in the form attached as Exhibit "A" to this Fifth Amendment; and
WHEREAS, the Parties further intend this Fifth Amendment to provide an extended time
period in which the Owner may provide Certificate(s) of Completion for each Phase of the
Improvements to receive payment of the Retainage Amount,
AGREEMENT
NOW, THEREFORE, in consideration of the terms and conditions of this Fifth
Amendment and for other valuable consideration, the receipt of which is hereby acknowledged,
Agency and Owner agree as follows:
1. The following paragraphs are hereby added to the end of Section 3.1 of the OPA:
Notwithstanding any other provision of this Section 3.1, if before 4:00 p.m.
Pacific Time on January 22, 2009 ("Certification Date") the Agency receives
from the Owner a fully signed copy of the certification form attached to this Fifth
Amendment as Exhibit "A" ("Certification and Indemnification") and payment
requests acceptable to the Agency in its sole and absolute discretion evidencing
hard construction costs paid by Owner relating to any Phase and not previously
paid by the Agency, the Agency shall pay such amounts to the Owner, which
amounts shall not exceed:
For Phase I: Forty Eight Thousand Five Hundred and Sixty -Five Dollars and
Sixty -Seven Cents ($48,565.67)*
For Phase II: Zero ($0)
For Phase III: Five Hundred Fifty -One Thousand One Hundred Eighty -One
Dollars ($551,181.00)*
(* 10% of this amount to be held as part of the Retainage Amount.)
Amounts for which payment requests acceptable to the Agency are timely
submitted shall be paid to the Owner, less ten percent (10%) constituting the
Retainage Amount, within thirty (30) days after the Agency's receipt of the
payment request(s) and the completed and signed Certification and
Indemnification from the Owner. If before the Certification Date the Owner fails
SDPUB\DWILLIAMS\371729.5 - 2 61)
Contract No. R19820A
to provide the signed Certification and Indemnification and payment requests
acceptable to the Agency in its sole and absolute discretion evidencing hard
construction costs paid by Owner relating to any Phase that have not been
previously paid by the Agency, the Owner shall have irrevocably waived its right
to payment of any amount of the outstanding unpaid balance of the Agency
Consideration for any and all Phases.
Notwithstanding any other provision of this Section 3.1, if the Agency receives
copies of recorded Certificate(s) of Completion for the entire Project, including all
Phases of the Improvements, from the Owner before 4:00 p.m. Pacific Time on
February 7, 2009, the Agency shall pay the Retainage Amount, which amount
shall not exceed Two Hundred Fifteen Thousand Seven Hundred and Eighty Two
Dollars ($215,782), to the Owner within one hundred and thirty (130) days
following receipt of such copies by the Agency; provided, however, if the Owner
does not timely submit the completed and signed Certification and
Indemnification before the Certification Date, the Owner shall have irrevocably
and unconditionally waived its right to receive the Retainage Amount for any and
all Phases. Certificate(s) of Completion may be in the form of recorded Notice(s)
of Completion for the Project or each Phase thereof, pursuant to and containing all
information required by California Civil Code Section 3093 in substantially the
form attached to this Fifth Amendment "B" or in such other form and
content as reasonably acce ale to the Mn y pursuant to Section 2.2.3 of the
OPA. /
Sig hire of Auth�jed bPW er Representative
2. Except as specifically modified by this Fifth Amendment, the OPA shall remain
unaffected and unchanged by reason of this Fifth Amendment and shall be in full force and effect
as modified by this Fifth. Amendment.
3. This Fifth Amendment may be executed in two or more counterparts each of
which shall be an original but all of which shall constitute one and the same instrument.
4. The OPA, as amended by this Fifth Amendment, represents the entire
understanding between the Parties as to the subject matter of the OPA.
5. There are no intended third -party beneficiaries of this Fifth Amendment.
[Signatures on next page]
SDPUB\DWILLIAMS\371729.5 - 3 (1�
Contract No. R19820A
SIGNATURE PAGE
TO
FIFTH AMENDMENT
TO
OWNER PARTICIPATION AGREEMENT
(Palms to Pines)
WITNESS the signatures of the Parties as of the date first set forth above.
PALM DESERT REDEVELOPMENT
AGENCY, a public body, corporate and public
By:
Name: Robert A. Spiegel
Title: Chairman
ATTEST:
Rachelle D. Klassen, Secretary
APPROVED AS TO FORM:
Best Best & Krieger LLP
Agency General Counsel
AMERICAN
PINES
liability
By:
Name:
Title:
INVESTMENT PALMS TO
limited
-4-
SDPUB\D WILLIAMS\371729.5
Contract No. R19820A
State of California }SS
}
County of
On \Z - \`� , 20�, before me, a Notary Public, personally
appeared \ p'-�Z- '-�, 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.
/-Zr_Signature r� �'���� C.,-�"
LAURIE� CLACK�
Commission # 18M19
Notary Public . Ca{i OM%
Orange County
LA Comm. Expires Aug 9, 2012
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
Contract No. R19820A
EXHIBIT "A"
CERTIFICATION AND INDEMNIFICATION
The undersigned, being all of the members and owners of American Investment Palms to
Pines East. LLC, a California limited liability company ("Owner") hereby certifies and agree as
follows:
1. Owner and Palm Desert Redevelopment Agency, a public body, corporate and
politic ("Agency"), have entered into that certain Owner Participation Agreement, dated as of
March 25, 2004, as subsequently amended on four (4) previous occasions ("OPA"); and all
capitalized terms not otherwise defined in this Certification shall have the meanings ascribed to
the same terms in the OPA.
2. All of the contractors who have provided services for or in any way relating to
Phase III of the Improvements are listed in Attachment 1 to this Certification.
3. There are no outstanding claims for payment for labor, materials or professional
services relating to construction or installation of any improvements and no associated
mechanics liens, stop notices or payment bond claims with respect to Phase III.
4. Owner hereby agrees that it shall hold harmless, defend with counsel reasonably
acceptable to the Agency and indemnify the Agency from any and all claims of any kind arising
from or in any way related to the Phases I, II and/or III Improvements. Without limiting the
generality of the foregoing, the Owner agrees that its obligation under this indemnity agreement
expressly extends to any claim(s) arising from any dispute with, or any mechanic's lien, stop
notice or claim against a payment bond by any person (including entities) who provided labor,
material or professional services relating to the Phases I, 11 and/ or III Improvements.
5. Owner hereby certifies and agrees that it shall carry General Liability Insurance in
an amount no less than $1,000,000.00 at the time of execution of this Certification and for a
period of no less than four (4) years thereafter, covering its obligation to indemnify the Agency
pursuant to Paragraph 4 of this Certification and shall provide certificates or such other evidence
of such coverage acceptable to the Agency upon the Agency's request therefor.
The following being all of the members and owners of Owner sign this Certification and
Indemnification as of , 2009:
Signed:
Name:
Signed:
Name:
[Add signature pages as necessary] 4
Exhibit "A"
S DPUBT W IL LIAM S\3 71729.5
Contract No. R19820A
Attachment 1
To
Certification and Indemnification
[Attach list of Contractors behind this cover page]
Exhibit "A"
SDPUB\DW ILLIAMS\37l 729.5
Contract No. R19820A
EXHIBIT "B"
Notice of Completion
Notice is hereby given, pursuant to Section 3093 of the California Civil Code, of the
completion on [date], of the [work
of improvement or particular portion thereof] under [construction or alteration or repair] on the
premises located at [street
address, if any] described as follows: [legal
description] .
The undersigned owns the following
estate] in said property described above:
nature of owner's interest or estate].
[interest or
[state
Said [construction was or alterations were or repairs were] undertaken on said property
pursuant to a contract with [name any original contractor for the work of improvement or, when
the notice concerns only completion of a particular portion, name the original contractor under
such contract and state generally the kind of work done or materials furnished pursuant thereto].
[State names and addresses of any co -owners, or if notice is signed by a successor in interest the
names and addresses of the transferors.]
Dated:
[Signature and address of owner]
[Verification of owner or agent of owner]
Exhibit "B"
S DPUB\D W ILLIAMS\3 71729.5