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HomeMy WebLinkAboutSA35640 - Quiksilver PD at Desert Willow Golf Resort (DWGR)CONTRACT NO. SA35640 SUCCESSOR AGENCY TO THE PALM DESERT REDEVELOPMENT AGENCY ECONOMIC DEVELOPMENT DEPARTMENT STAFF REPORT REQUEST: AUTHORIZATION TO ENTER INTO AN AMENDED EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT BETWEEN THE SUCCESSOR AGENCY OF THE PALM DESERT REDEVELOPMENT AGENCY AND MATTESON CAPITAL AC, LLC, FOR THE PROPOSED `QUIKSILVER PALM DESERT AT DESERT WILLOW GOLF RESORT' PROJECT SUBMITTED 6Y: Justin McCarthy, Interim Executive Director Rudy P. Acosta, Assistant Ciry Manager DATE: August 25, 2016 CONTENTS: Amended Exclusive Right to Negotiate Agreement-(Successor Agency of the Palm Desert Redevelopment Agency and Matteson Capital AC, LLC) Recommendation That the Successor Agency Board authorize the Executive Director to enter into an Amended Exclusive Right to Negotiate Agreement between the Successor Agency of the Palm Desert Redevelopment Agency and Matteson Capital AC, LLC for the proposed `Quiksilver Palm Desert at Desert Willow Golf Resort' Project. Envision Palm Desert The pursuit of the `Quiksilver Palm Desert at Desert Willow Golf Resort' Project aligns with the City's Economic Development priorities and objectives in multiple categories. One; a project of the proposed scale is capable of generating 1500-2000 new jobs, two; when successfully completed, the hospitality components address additional sources of transient occupancy tax revenue, three; the retail/restaurant components address additional sources retail sales tax revenue and four; the proposed entertainment venue will enhance and diversify the City's list of entertainment attractions for residents and visitors. Backqround On July 11, 2014, the Successor Agency entered into the original Exclusive Negotiating Agreement (ENA) with Matteson Capital AC, LLC (Developer), to negotiate the sale of Desert Willow Lot Pads known as C, D, and E and, with the option to acquire Lot Pads A and B for the purpose of developing a large scale resort project. CONTRACT NO. SA35640 Staff Report Exclusive Negotiation Agreement Extension — Matteson Capital AC, LLC. August 25, 2016 Page 2 of 3 As the Board is aware, the Developer's original proposal included; an upscale resort hotel at 450-600 rooms, a Wave pool, a 175,000 square foot retail center, a 2500 seat amphitheater, a 142 unit private residence and, other entertainment related amenities. In late December 2015, the Developer submitted a letter to the City Manager requesting consideration of a six month extension to the original ENA. The extension request was proposed to allow the Developer sufficient time to; re-design optional Lot Pad B(from the initial design of a Kids Camp to a revised design for a 200-225 room Luxury Boutique Hotel), re-design Lot Pads C and D-the main Resort Hotel site (to reduce initial room count from 600 to 450 rooms), re-design Mountain View hole numbers 5 and 7(to accommodate revised resort design), revise development costs and schedules and, to develop final Project Description documents. The Board first discussed the ENA extension request at the regularly scheduled Closed Session on February 11, 2016. Although Board members were encouraged to learn that the Developer had submitted a Project Entitlement Application on January 21, 2016, they nonetheless expressed concerns that the Project appeared to be lagging in its overall development process. On March 17, 2016, Community Development Department staff completed its initial review of the Developer's Entitlement Application and sent a letter notifying the Developer that the application was deemed "incomplete". In the Closed Session meeting of May 26, 2016, the Interim City Manager and staff provided the Board with a summary of Project actions (to date) and discussed options for consideration moving forward. The Board's desire was to continue with the Project by granting the Developer an extension of time via an amended agreement. However, prior to any formal action, the Council directed staff to arrange for an updated presentation of the Project by the Developer's team. On June 2, 2016, a Study Session was conducted to allow the `Quiksilver' development team the opportunity to provide the Successor Agency Board with a comprehensive update on the proposed Project. Attending the meeting was the founder and CEO of Quiksilver who added his continued support for the Project. Also, two representatives of an internationally known luxury hotel group attended and confirmed their interest as operators for the proposed 200-225 room hotel element of the project at Lot Pad `B'. Discussion Recently, staff and the Board discussed several Project issues that included the following concerns; the pace of the ProjecYs development as it approached the finro year anniversary of the original 18 month ENA (7/11/2016), the endurance of the regional market demand for additional hospitality product, California drought/water restrictions, the golf industry decline and, new CEQA requirements. Regardless, the Developer has maintained optimism that the Project (as proposed) is Palm Desert's best opportunity to succeed at Desert Willow because; it is a"unique" resort concept that does not currently exist anywhere and, it will employ innovative and sustainable design, improvement and operational features, it targets the region's "underserved activity and family oriented" resort market demographic and, reportedly is supported by its Marriott neighbor as it presents a complimentary resort vs a market threat property. Note: The recent CBRE Hospitality Market Study section (specific CONTRACT NO. SA35640 Staff Report Exciusive Negotiation Agreement Extension — Matteson Capital AC, LLC. August 25, 2016 Page 3 of 3 to Desert Willow) appears to support the "underserved activity and family oriented" market notion. In general, the Study Session on June 2nd appeared to alleviate the majority of the Board's concerns and seemed to refresh enthusiasm for the overall Project. As a result, staff was given direction to proceed with drafting an Amended Exclusive Right to Negotiate Agreement (ERN) for Board approval. Attached to this report is a copy of the amended ERN (Exhibit A) for the Board's review. The Board will note significant provisions as follows; the term of the agreement is six (6) months and, the Developer shall submit to the City a"good faith" deposit of two hundred fifty-thousand dollars ($250,000.00) within ten (10) days of the execution of this agreement and, within sixty (60) days of the revised `Development Master Plan' approval the Developer shall submit to the City a revised conceptual Project Financial Plan and, the balance of the Developer's initial `expense' deposit (now $16,943.09) shall continue to be applied to future special City expenses related to this Project. The primary objective of the ERN will be for the parties to determine; the feasibility of the Project, the Project's overall economic benefits to the City, financial assistance (if any) required by the City and, the ultimate preparation of a Development Agreement and Purchase and Sale Agreement for the execution of the Project. Finally, the Board may recall prior authorization to contract with the consulting firm Keyser- Marsten (KMA) on this Project. KMA will be engaged at the appropriate time for evaluation of the Developer's Project financial plan prior to any recommendation of a Development Agreement. Fiscal Impact At this time, the City's financial impact will be those costs attributed to the Keyser-Marsten contract amount not to exceed $50,000.00. Additional `special project' costs incurred by the City will be reimbursed from the Developer's initial deposit of $25,000.00. As of the date of this report, there remains a deposit balance of $16,943.09. Pursuant to the proposed ERN, the City will have the right to request from the Developer any additional amount(s) should it become necessary. Q 1� Submitted by: Approval: � :. . � u � �7 ��� � r�� ��� � l� � �� � � Rudy P. Acosta J ti McCarthy Assistant City Manager teri Executive Di ctor *Approved as amended to ' clude authorization Executive Director and City Attorneq�fo make minor and non-substantive changes in the Agreement should it be necessary. 5-0 (AYES: Harnik, Jonathan, Tanner, Weber, and Spiegel; NOES: None) � � � Q 0 "bb � CONTRACT NO. SA35640 1 2 3 � 5 6 7 8 9 10 ll l2 13 14 IS 16 17 18 19 AMENDED AND RESTATED E�CI,USIVE RIGHT TO NEGOTIATE AGREEMENT (Quiksilver Resort) This Amended and Restated F,xclusive Right to Negotiate Agrcement (this "Agreement'� is made as of this _ day of August, 2016 (the "Effective Date"), by and bet�veen the Successor Agency of the Pal�Tz Desert Redevelopment Age�icy, a California public body, corporate and politic ("SARDA"), City of Palm Desert, California, a Califomia Charter City ("City"}, and Matteson Capital AC, LLC, a Dela�vare limited liability company ("DeveIoper"}. SARDA, City and DeveIoper are sometirnes individuaily referred to herein as a"Part�' and collectively as the "Parties." This A�nended Agreement is entered into �vith regards to the following recited facts: RECITt1I.S A. SARDA owns that certain real property lacated ii� Desert Willow Golf Resort, Palm Desert, California, �vhicI� is more particularly described on �xhibit "A" and Exhibit `B" attached to this Agreement and incorporated herein by this reference (the "Property") and which can be dcscribed as Parcel "A," consisting of 1b.86 acres, Parcel "B," consisting 16.80 acres, Parcel "C," corisisting of I8.77 acres, Parcel "D," consisting of I5.38 acres, and Parcel "E", coi�sisting of 11.50 acres. SARDA is interested in selling the Property to Developer for the development of tl�e Project as herein defined. 20 B. Developer is inierested in developing the Property with a Quiksilver Hotel, Resoit Villas and/or 21 other compatible resort amenities, including, but not limited to an estimated four hundred to eight 22 hundred (400 to 800) guest rooms / keys in up to two (2) hotels, a competition / exhibition �vave pool, one 23 hundred thirty to three hundred (130 to 300) residential / timeshare / resort villa units, a skate park , a 24 performing arts amphitheater (estimated 2,500 seats), action sports industry themed conference center, 25 meeting and banquet hall, approximately sixty-five thousand to one hundred eighty thousand (65,000 to I 1255938.b -�- 72 500.00876�29144768.1 CONTRACT NO. SA35640 I 1 180,000) square feet of retail and restaurant space, heliport (up to t�vo), parking structures, surface 2 parking and related circulation improvements to be developed in phases as defined herein and �vhich arc 3 more particularly described in Exhibit "C" attacliec! to this Agreement and incorporated herein by this 4 reference ("Project"). 5 6 7 8 9 10 11 12 13 1 �4 15 16 17 18 19 20 21 22 23 24 25 C. On July 11, 2014, SARDA and City, as authorized to do so, entered into an Exclusive Right to Negotiate Agreement (the "Original ENA") �vitl� llevetoper; SARDA for the purpose of selling the Property, and City for purpose of development and assistance of the Project. The primary purpose of flvs Agreement is ta establish an additional period during which the Parties may explore the feasibility of tt�e Project, deternune �vhat assistance, if any, City might provide to the Yroject, and negotiate the terms of a Development Agreement (DA) and a Purchase atid Sale Agreeinent (PSA). Developer has represented its �villingness and abilily to undertake certain studies, plans, and other activities necessary to define tiie scope of development and detemiine the feasibility of the Prc�jec:t on the Property. Such plans and other information to be prepared during the course of this Agreement shall serve as the basis for entering into a PSA beriveen SARDA, City and Developer and a DA bet�veen City and Developer. SAI�A and City are �villing to extend the period of exclusive negotiations �vith Developer set forth in the Original ENA concerning Deveioper's potential development of the Projcct a�2d the terms of the DA and PSA, subject to the terms and conditions of this Ageemenr. D. During the term of the Original ENA, Developer completed the directed performance requirements to: (i} Hold a Design Charrette for the purpose of confu-ming the preliminary configuratio�i and design of the proposed Quiksilver Resort; and (ii) Prepare a final Conceptual Plan that included the location, placement and concephial architectural design of the proposed buildings. E. Pursuant to the provisions in Section 2, Developer has submitted a request for extension of the negotiation period set forih in the Original ENA, thereby allowing all parties additional time to prepare the project plans, Development Agreement and Purchase and Sale Agreement. 11255938.6 -i- 72500.90876\29140768.1 1� 2 2016. 3 4 effect. S � �� 8 9 10 ll 12 13 14 15 16 � 17 18 19 20 21 22 23 CONTRACT NO. SA35640 F. SARDA and City have considered this Agreement at their public meeting held on August _, G. This Agreetnent supersedes and replaces the Original ENA which is of no further force and TERIVIS ]. Effective Date. This Agreement shall be effective as of the Effective Date once executed and delivered by SARDA, City and Developer. The terin of this Agreement shall corrunence on the Eifective Uate and shall continue thereaftcr for a period of six (6) months ("Negotiation Period"), unless sooner ternunatcd or ur�less extended as provided herein. Subject to Section 2.2, during the Ncgotiation Period, SARDA and City shali not soticit, negotiate, accept or entertain of�ers os proposals from other parties concernir�g the Property. '1'�e I�iegotiatian Perion� �3°bc further extended upon the mutual written agreement cifi SA1tDA, City and Developer. 2. Good Faith Negotiations. SARL)A, City and Developer agree for �he I�Iegotiation Period to neg�tiate diligently and in good faith to comply with the terms and conditions set forth in this Agreement and to complete the tasks set forth in this Ap-eement, subject to the follo�ving provisions: 2.1 The term "negotiate," as used ir3 this Ageement shall preclude SARDA and City from negotiating or accepting dc�ring the Negotiation Period proposals from persoi2s or entities other than Developer to acquire or develop the Property or negotiating �vith any other party or entity with respect ta such. 2.2 Without limitation on and subject to Section 2.4 of this Agreement, SARDA and City shall not be precluded by this Agreement from furnishing to ot�ier persons or entities unrelated to Developer information in the possession of SARDA and/or City �vhich they are reyuired by lativ to farnish or �vhich it �vould othenvise normally fiunish to persons requesfing information from 11255938.6 -3- 72500.00876129140768.1 i � I CONTRACT NO. SA35640 I 2 3 4 5 6 7 8 9 1Q I1 12 13 14 15 16 17 18 l9 20 21 22 23 SARDA and/or City conceming their activities, goals and matters of a simiSar nature, provided that any information so fiunished or provided by or on behalf of Developer or the Projeci shalt not be disclosed, furiushed provided by SARDA or City without advance written notice to Developer affordi��g Developer fhe opportunity to appropriately limit such disclosure. 2.3 SARDA and City shall �iot be precluded hy this Agreement from undertaking any actions othenvise required by la�v or mandated by any agency of the State of California, provided that any information so furnished or provided by or on behalf of Ueveloper or the Project shalt not be disctosed, furnished provided by SARDA or City without advance written notice to Developer affording Develaper the opportwiity to appropriately limit such disclosure; provided ho�vever that nothing shall precluse the City or SAR17A from complying �vith statutory reyuirements. 2.4 Any information submitted by or on behalf of Developer to SARDA and/or City relating to the Project shall be deemed confidential and proprietary. SARllA and City shall not disclose any such confidential or propa•ietary information unless required by la�v, provided that any information so furnished or provided by or on behalf of Developer or the Project shall not be disclosed, furnished provided by SARDA or City �vithout advance �vritten notice to Develop affording Developer tlie opporhznity to appropriately limit such disclosure; provided ho�vever that nothing shall precluse the City or SARDA from complying �vith statutory requirements. SARDA and City do not represent or tivarrant that confidential or proprietary information submitted by lleveloper is exempt from public disclosure under the Public Records Act (Gov. Code Section 6250 et seq.). 2.5 City and Developer shall bear their own costs and expenses in co�ulection �vith negotiating and finalizing this Agreement and discharging its duties, obligations, and responsibilities as defined and required by this Agreement. City shall pay costs and expenses incurred by SARDA 11255938.6 -4- ; 72500.00876124140T68. I CONTRACT NO. SA35640 I I and City �vith respect to negotiating this Agreement and performing their obtigations tttereto, unless 2 othenvise funded hy Developer pursuant to this Agreement. 3 2.5.1 Within ten (10} days of execution of this Agreement by City and SARDA, 4 Developer shall submit to City a good faith deposit (the "DeposiY') iri the amount of T�vo Hundred 5 and Fifty Thousand and 001100 Dollars ($250,000.00). The Deposit shall be in the form of a check 6 from Developer to ensure that Developer will proceed diligentIy and in good faith to perform all of 7 Developer's obligations under this Agreeanent. The City shail place the Deposit u� an interest- 8 bearing account and such intcrest, �vhen received by City, shall become part of the Deposit. 9 (a) Developer hereby Agrees to proceed diligently acid in good faith to perform all of 10 Developer's obligations under this Agreement. In the event Developer defaults on such requirement, I 1 City shall give �vritten notice of such default to Developer which shall be governed by Section 11 of 12 this Agreesnent. Li thc event of ter►nination of this Agreement by City by rea�� �S �sruch a default by 13 Developer which remains uneureci after any applieable notice and cwe periods, City shall returu ti�e 14 Deposit together �vith any interest fan�ed t�ereon, and neither party shall have any further rights 15 against or liability to the other under this Agreemes�t. 16 (b) The City hereby agrees to proceeci diligently and in good faith to pes%nn all of City's 17 obligations under this Agreement. Li tl�e event City defaults on such requirement, I7eveloper shall 18 give �vritten notice of such default !o City which sl�all be governF;d by Section 11 of tlus Agreement. 19 Iti the event of, ternunation of lhis Agreement by Developer by reasou of such a default by City 20 �vlucli reinains uncured atter Any applicaUle notice and eure periods, the City shall return the 21 DPposit and any interest earned thereon, i� applicable, and neither party shail have any further rights cz against or liability to the other under this Agreement. 23 (c) Upon execution of a PSA by Deve2oper, the Deposit shall be applied to�vard the purchase 11255938.6 -5- 72500.00876�29140768.1 CONTRACT NO. SA35640 2 3 4 5 6 7 8 9 10 11 12 13 la 15 16 17 18 19 20 21 22 23 24 zs price required under the PSA. 3. Upon execution of this Agreement, City shall transfer the amount of $1 b,943.09, the remaining balance of tlie initial $25,000 deposit (the "Expense DeposiY'} made by Developer on execution of the Original ENA, to a general administrAtive account to covei• the amount anticipated to be the incurred by SARDA and City for special expenses incurred in furtherance of its obligations under this Agreement. Special expenses may include the preparation of reports and studies as required by SARDA aud City to evaluate the Project design, C�QA requirements, resort phasing and/or economic considerations and city attorney and special counsel services reatted to this project. City shall track special expenses incurred by City and SARDA in furtherance of this Agrccmcnt a�id shall provide Developer a statement of special expenses incuned every thirty (30) c�ays. City shalt appIy the Expense Deposit to reimbuise itseif and SARDA for special expcnscs incurred on an ongoing basis. If at any poit�t it appears likely in the reasonable judgment of City that special expenses required iii furtherance of this Agreement will exceed the �xpense Deposit, City may request in �vriting that an additional amount be deposited to increase the Expense Deposit and to cover the estimated remaining costs and expenses and Developer shall fund such amount within ten business days. 4. Tests/ Surveys. During the Negotiating Period, Developer shall have the right, in its sole and absoiute discretion, but shall not be required, to inspect and conduct tests and surveys on and with respect to the Property, and SARllA shall provide Developer reasonable access to tlie Property for such inspections, tests and surveys. Said foregoing inspection and testing shall include, but not be limited to, environmental matters. Any inspection or testing shall be at Developer's sole cost and be done �vith reasonable notice to SAR.DA and �vith SARllA's coneurrence. Such inspection and testing shall be conducted at a reasonable time and in a reasonable manner. Developer shall be responsible for any personal injury or property damage resulting from its negligen�e, gross negIigence, or �villful misconduct in connection �vith Developer's inspeetion and testing, provided It2S5938.6 -6- 72500.00876129140768.1 CONTRACT NO. SA35640 1 2 3I 4 5�1 6'� 7 8 9 10 11 12 13 14 15 16 I� 17 18 ' 19 20 21 22 23 24 that in no event shall Developer have respoi�sibility for legally required disclosure or mere discovery of existing conditions so long as Developer exercised reasonablc care in iis actions. Developer shali not have responsibility for damage resultitig from negligence, gross negligence, or �villful xnisconduct of SARDA, City or theu• representatives, 5. llevelopment Agreement. During the Negotiation Yeriod and concurrently with the processing af the devetopment application, both City and Developer shall exercise reasonablc cfforts to complete discussions rclating to the terms aud conditions of a DA, City Assistance as herein defined, aiid such other matters as may be mutualty acccptable to both City and Developer, in their respective sole and absolute discretion. Prior to the termination of this Agreement, SARDA and Developer shall exercise reasonable efforts to complete a Purchase and Sale Ageement for the Property. Nothing herein shall be deemed to be a representation by SARDA, City or Developer that mutuaily acceptable DA, PSA atid/or City Assistance will be concluded. Nothing i�i this Agreement shall � impose any obligation on any Party to agree to or execute a DA, PSA or for City to provide any financiat or other assistance to Developer for the Project or the Prapeity, Nothing herein shall be deemed to be a guarantee or representation that any proposed DA, PSA or City Assistance will be approved by SARDA's or City's govenung boards. Developer ackno�vledges and agrees that SARDA's and City's consideration of any PSA, DA and/or City Assistanee is subject to the sole and .L absolute discretion of SARDA's and City's governing boards, any applicable governmentat entities and all Iegally required pub(ic hearings, public meetings, notices, factual findings and other � . , detenninatians required by law. 6. Developer Tasks During Negotiation Period. During the Negotiation Periad, Developer shall, • at Deveioper's sole cost and cxpense, undertake the follo�ving tasks. It shall be within the sole and . absolute discFetion of Developer to engage architects, engineers, consultants, and other third parties of its choosing to discharge its responsibilities under this Secrion and in this Agreement: 1 I255938.6 -i- -� 7zsoo.oas ��z9 i ao�6s. i CONTRACT NO. SA35640 1 2 3 4 5 b 7 8 9 10 11 12 13 14 l5 16 17 18 19 20 21 22 23 24 25 6.1 Pro,��t Descri�tion. I�Io later than one hundred eighty (18Q) days after the Effective Date, Developer shall facilitate the preparation of a mutually acceptable Project Description, including alternatives of suff'icient detail to aljow for: (i} the preparation of a Draft Project Environmental Impact Report coveiing the DA, PSA, subdivision niap(s} and all project associated improvemenis in accordance �vitli the California Environmcntat Quality Act (CEQA); (ii) distribution of a Notice of Preparation for said Project EIlt for public review; and (iii) facilitate preparation of a Comprehensive I)evelop►nent Master Plan for the Project of adequate deiail to allo�v for the consideration of ali discre,tionary and ministerial acts required by SARI)A and City in aecordance with the applieable procedures, standards and requirements of ihe City of Palm Desert Municipal Code and State L.aw. 6.2 Financial Plan. Not later than sixty (60) days after mutual approval of thc Comprehensive Development Master Plan, Developer shall submit to City a Conceptual Financial Plan which shall include the follo�ving: (i) detailed preliminary pro forma illustrating the estimated Project cost (including all onsite and offsite design, pernutting, construction mitigation and any ocher project-related costs for the entire Project) and the proposed revenues for the Project; (ii) outline of Developer's plan to finance and compiete tlie Project, including the proposcd sources of funding for the Project and the terms and market rate conditions of such funding; and (iii) preliininary analysis of the fiscal impact of the Project on City, including the estitnated projectcd property taxes, sales and use taxes, transient occupancy taxes, and other fee revenues (including but not limited to project amenity fees, parking fees, resort fees and events fees} to be gcnerated by the Projeci, as �vell as the estimated costs af additional or increased levels of public services anticipated to be rec�uired by the Praject. 6.3 Hazardous Materials/Historical Artifacts. So long as Developer and its agents are using reasonable care in its investigations, Developer shall have no responsibility under this Agreement to make any deternvnation as to the existence of hazardous maierials or historical 11255938.6 -8- 72500.008T6129 [ 40768.1 CONTRACT NO. SA35640 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 artifacts on the Property nor shall have it liability or responsibility for hazardous materials or historical artifacts on the Property discovered during Developer's investigation or testing of the Property. 7. City Tasks During Negotiation Period. During the Negotiation Period, City shall undertake the follo�ving tasks: 7.1 Revie�v of Developer's Documents and Submittals. City staff �vill diligently revie�v all plans and documents submitted by Deve�oper, �vork in good faith to establish entitlements for the Project described in Recital A of T�is Agreement and in this Section 7 and provide Developer �vith a�vritten response outlining relevant comments. City will respond in a timely tnanner to reasonable Dcveloper requests for inforniation concerning the Property and the development of the Property and cooperate in �vorking �vith other governmental agencies �vhose actions may be required for Developer to fiilfill its obligations and responsibilities under tlus Agreeinent. If City's response to any of the items described in Section 6. i, 6.2, 7.4 or 8.1 is unreasonably delayed, the applicable deadline in Section 6 and it�e Negotiation Period shail be extended in the reasonable discretion of the City. 7.2 City Assistance. During the Negotiation Period, City shall discuss and negotiate in good faith the manner in which it �vill provide City Assistance to Developer should Developer acquire the Property and unclertake the development of the Property in accordance �vith the DA. The proposed City Assistance shall be identifed by Developer in the submittals required under Section 6 above. 7.3 Golf Course ReroutinQ: City �vill provide Developer �vith existing as built dra�vings in the City's possession, design plans and spccifications for the reconfiguration of any i1255938.6 �� 72 500.00876�29140768.1 CONTRACT NO. SA35640 1 2 3 4 5 6 7 8 existing golicourse holes required to be relocated to futly impleinent the a�proved Comprehensive Development Master Plan for the Quiksilver Resort. Said as buiit dra�vings include designs prepared by City's Golf Course Architect, Landscape Architect or other specialty consultants. 7.4 City-O�vned Information. During the Negotiation Period, City shall deiiver, �vithin thirty (30) days of receipt of �vritten request therefor, any existing City-owned information, siudies, reports, site and constructioi� plans or other documents �vhicli Developer may reasonably request to facilitate the Project design wifhout cost or cxpense to Devetoper. 9 7.5 All proposed City Assistance shall be revie�ved by a third-party economic 10 consulfant to confirm Project need and adequate public benefits to City and must comply Il 12 13 14 ]5 16 17 18 19 20 21 with the lativ and not violate any Constitutional prohibitions_ 8. SARDA Tasks During Negotlation Period. 8.1 Within thirty (30) days of the Effective Date, SARDA's staff shall commission an appraisal of the Property and begui negotiating in good faith with Developer a PSA. The SA.ItUA witl subsequently seek neeessary approvals from the Local Oversight Board and the State Department of Finance. 9. Acknowledgments and Reservations. 9.1 No Further Obligation. SARDA, City and Developer agree that, if this Agreement expires or is tem�inated for any reason, ar a llA and PSA are not approved and execuied by SARDA, City and Deveioper, none of SARDA, City nor Develvper shall be under any obligation, 112SS438.6 -10- 72500.00876�2914Q768.1 1 2 3 4 5 6 7 8 9 10 11 l2 13 14 35 16 17 18 19 20 21 22 23 CONTRACT NO. SA35640 nor have any liability to the other Party or any other person regarding the acquisition of the Property or the construction of the Project. 9.2 Developtnent Standards and Desipn Controls. Certain development standards and design controls for the Project tnay be established bet�veen Developer and City, but it is understood and agreed behveen the Parties that the Project must conform to all City and other applicable gaverrnnental developmef�t, land use and architectural regulations and standards, as supplemented with ariy variances granted by City. Dra�vings, plans, and specifications for the Praject shall be subject to the approval of City through t11e standard development application process for projects �vithin City. Nothiiig in this Ageemeni shall be construed �s the approval of any plans or specifications for fhe Project or of tlie Project itself by City. Nothing contained in this Section 9.2 shall expand the scope of Developer responsibility as providecl in Section 5 hereof. 9.3 Further Information. City reserves the right to reasonably obtain further information, data, and conunitmeiits to ascei�tain the ability and capacity of Developer to develop and operate the Property and/or the Project. Developer acicnowledges that it may be requested to make certain financial disclosures to City, its staff, legal eounsel, or other consultants, as part of the �nancial due diligence investigations of City relating to the potential construction of the Project by Developer and that, tivithout limitation on and subjeet to Section 2.4 of this Agreement, any such disclosures may become public records. City shall maintain the confidentiality of financial information of Developer as provideei in Seetion 2.4. 9.4 Citv Not a Partv. City shall not be deemect to be a Party to any agreement for tlie acquisition, lease, or disposition of real or personal property, the provision of fmancial assistance to Developer, or the development of the Project on the Property or else�vhere, until the terms and conditions of an DA are approved by City's governing board in its sole and absalute discretion. 11255938.6 -11- 72500.00876\29140768.1 CONTRACT NO. SA35640 ] 2 3 4 5 G i 8 9 10 11 12 13 l4 15 lb t� 18 19 20 21 22 23 24 10. Disctosures and Cooperatlon. SARDA, City aiid Developer shall generally cooperate with each other and supply sucli documenis and information as may be reasonably requested by the other Yarty to faciIitate the negotiations. Unless precluded by la1v, SAEtDA, City shall keep confidential all proprietary information provided by Developer to City. 10.1 Only PSA and DA Hind SARDA and Cit� Developer acknotivledges and agrees that SARDA and City �viIt not be bound by any statement, promise or reprasentation made by SARDA and City staff duiing tlie I�1egotiation Period or arisuig from or related to the Project on the Property, and that SAItDA and City shall be legatly bound only upon the approval of the DA by City's governing board and the PSA by SARDA's governing board. 10.2 No Renresentations About Future Ageements. Developer further ackno�vledges and agrees that nothing in this Agreement or SARDA's or City's cooperation in satisfying their obligatior�s under this Agreement s�all be deemed a promise, representation or guaranty that the Partics �vill reach any future agreement, enter into a PSA or DA, or that City will provide City Assistance. Il. Default. 11.1 C�zre. Failure or delay by either Party to perfonn any material term or provision of lhis Agreement and to cure such failure wittun any applicable cure period shall constitute a default under this Agreement. If the Party who is claimed to be in default by the other Party cures, corrects or remedies the alleged default �vithin fifteen (15) calendar days after receipt of �vritten notice specifying such default, such Party shall not be in default under this Agreement, tivith the understanding that, if such default is curabie but cannot reasonably be cured within such fifteen (15) calendar days, the cure period shall be extended to up to thirty (30) calendar days so long as the cure shall have been cornmenced �vithin such fifteen (l5) calendar days and diligently pursued thereafter. The notice and cure period provided in the iinmediately preceding sentence shalt not, under any 11255938.6 -�2- 72500.04876129140768. I CONTRACT NO. SA35640 1 2 3 4 5 6 7 8 9 l0 11 12 13 14 i l5 1G 17 18 19 20 21 22 23 24 cucumstances, extend the Negotiation Period. If there are less than fifteen (15) days remaining in the Negotiatioii Period, the cure period allowed pursuant to this Sectio�i 11 shall be automatically reduced to the number of days remaining in the Negotiation Period. 11.2 Notice. The Party cIauning that a defanit has occu�red shall give �vritten notice af default to the Party claimed to be in default, specifying the allegeci default, Delay in giving such notice shall not constitute a�vaiver of any default iior shall it change the time of default. Ho�vever, the injured Party shall have �io righi to exercise any remedy for a default under this Agreement, without first delivering �vritten notice of the default. 11.3 Breach. If a default of cither Pa�ty remains uncured for more than �ifteen (15) calendar days falloiving receipt af �vritten notice of such default (as such cure period may be exfended pursuant to Section I 1.1), a"breach" of this Agreement by the defaulting Pariy shall be deemed to have occurred. In the event of a breach of this Agreement, the sole and exclusive remedy of the Party who is not in default shall be to temunate this Agreement by serving �vririen notice of termination on the Party iti breach, but �vithout prejudice to any express rights or remedies the Party may have under this Agreement. In the event of breach, neither Party sliall have the right to compensatory, special, or consequential damages from thc breaching Party, 12. Termination. This Agreement shall ternunate upon the occurrence of any of the follo�ving: (a) the end of the Negotiation Period, subject to a six (6) month extension, if needed by Developer to complete entittemenks, and any additional extensions beyond the six (b) months if mutually ageed upon by both Parties pursuant to Section 1; (b) a DA and PSA, acceptable in fonn and content to SARDA, City and Developer, are negotiated and approved by SARI7A's and City's governing boards and Developer; (c) temunation of this Agreement by any Party pursuant to Section 1 l; (d) Developer deternunes in its reasonable and good-faith discretion, evidence of tivhich is to be provided to SARDA and City, that the Pro,ject is not feasibie due to development, financing, 1125593$.6 -13- 72500.00876�29140768.1 CONTRACT N(J. SA35640 1 2 3 4 5 6 7 8 9 lU 11 12 13 14 IS ]6 17 ' 18 19 20 21 22 23 24 or operation issues; or (e) failure of Devcloper to make a deposit ��itlun #hirty (30) days of written requesi by Ciiy pursuant to Section 2.5 . 13. Prohibitiou Against Assignment. The qualifications and identity of Developer and its principals are of puticular concern to City. It is because of these �ualifications and identity that City has entered into this Agreement �vith Developer. During the Amended Negotiation Period, no voluntary or involuntary successor-in-interest of Developer shall acquire any rigl�is or po�vers under this Agreement, nor shall Developer assigt� all or any part of this Agi•eement, �vithout the prior �vritten approval of City, �vhich approval City may grant, withhoid, or deny in its sole and absoiute discretion; provided, however, that City shall not assess a fce for such approval. Notwithstanditig the previous sentence, Developer may transfer its rights under this Agreement to an e�itity controlled by Developer or its principal, Scot Matteson withoutn approval of City (�vith the understanding ttiat such entity entity catitrolled by Developer or Scot Matteson may have an institutional investor as a consiituent and that such investor may have eustomary "major decision" approval rights}. Airy purpor�ted transfer of tlus Agreement, voluntariiy or by operation of la�v, shall be null and void and shalt confer no rights �vhatsoever upon any purparted assignee or transferec, unless othenvise approved in �vriting by City pursuant to tivs Section 13. 14. General Provisions. 14.1 Governin� La�v; Jurisdicfion and Venue. This Agreement shall be interpreted and enforced in accordance �vith the provisions of California la�v in effect at the tune it is executed, �viihout regard to conflicts of law provisions, and as such iativs may be amended from time to time during the Amended Negotiation Period. Any action brought concerning this Agreement shall be brought in ihe appropriate court for the County of Riverside, Califonua. 14.2 Solicitation and Conflicts of Interest. For the term of this Agreement, no member, officer or employee of SARDA or City, during the term of his or her service �vith SARDA 11255938.6 -14- ?2 500.0087612 91407 b 8.1 CONTRACT NO. SA35640 1 2 3 4 5 6 7 8 9 l0 ll 12 13 14 15 16 17 18 19 20 21 22 23 24 or City, sliall have any direct or indirect interest in this Ageement or obtain any present or anticipated material bencfit arising thcrefrom. 14.3 No 1'tiird Yarty Beneficiaries. SARDA, City and Developer expressly ackno�vledge and agree that they do not intend, by their execution of this Agreement, to benefit any persons or entities not signatory to this Agreement, including, �vithout limitation, any brokers representing the Parties to this transaction. The foregoing shall not be deemed to release Developer fi•om any obtigation it may have to pay coiiunissions or brokerage fees �vhich it may be obligated to pay pursuant to any other contract to �vhich Developer may be a party. No person or entity not a signatory ta this Agreement shall have any rights or causes of action against SARDA, City or Developer arising out of or due to St1RI)A, City and DeveJoper's entry into this Amended Agreement. Third parties, for the purposes of this Section 14.3, shall not include persons to whom fees are paid for professional services, if rendered by attorneys, fi�ianciai consultants, accountants, engineers, architects and other consultants. 14.4 Notices and Demands. All notices or other communications required or permitted behveen the Parties under this Agreement shall be in �vriting, and may be: (a) personally delivered, (b) sent by United States registered or certified mail, postage prepaid, return reeeipt requested, (c) sent by facsunile andfor electronic transmission, confirmed by same day mailing of a "hard" copy, ordinary first class mail, postage prepaid, or (d} sent by nationally recognized overnight courier service (e.g., Federal Express), addressed to the Parties at the addresses p�nvided below, subject to the right of either Party to designate a different address for itself by notice similarly given. Any notice given by registered or certified United States inail shall be deemed to have been given on the second business day after the same is deposited in the United States mail. Any notice personally delivered or delivered by facsimile or overnight courier service (e.g., Federal Express}, shall be deemed given upon receipt of the same by the Party to �vhom the notice is given. 11255938.6 -15- 72500.04876�29I 40768.1 CONTRACT NO. SA35640 To CITY and SARDA With copy to: Best Best & Krieger LLP 74-760 High�vay 111, Suite 200 Indian Wells, CA 92210 Attn: Robert Hargreaves 2 3 4 5 6 7 8 9 10 ll 12 13 14 IS To DEVELOPER: Successor Agcncy / City of Palm Dcsert 73-510 Fred Waring Drive Palm Desert, CA 92264 Attn: Executive Director / City Managei• Matteson Capital AC, LLC 450 Netivport Center Drive Suite 570 Ne�vport Beach, CA 92660 Attn: Scot Matteson With copy to: Pircher, Nichols & Meeks 1925 Century Park East, Suite 170� Los Angeles, CA 90(?67 Attn: Miehael Scheinberg (5580-2) 14.5 Entire A�eement. This Agi'eement constitutes the entire agxeement bet�veen the Parties �vith respect to the subject matfer hereof and supersedes all agi•eements, representations, warranties, statements, promises and/or understandings, �vhether ora( or �vritten. This Agreement may only be amended by the written consent of the Parties. 14.6 Severabilitv. In the event that any of the provisions or poriions thereof, of this Agreement are held to be nnenforceable or invalid by any court of competent jurisdiction, the validity and enforceability of the remaining provisions, or portions thereof, shall not be affected and shall remain in full force and effect. 14.7 Hold Harmless. Developer shall defend, iiidemnify, and hold harmless SARDA, City and their respective officials, officers, employees, consultants, contractors and agents (collectively, "Indemnitees") from and against any and a�l actual and alleged claims, losses, damages, fines, costs, penalties, expenses (inc]uding reasonable attorneys' fees, costs of experis and other litigation expenses), and liabilities of any type or nature, including those related due to death or injiuy to any person and injury to any property, proxitnately resulting from any negligei�t acts, omissions, 11255938.6 -16- 72500.00876129140768.1 CONTRACT NO. SA35640 1 2 3 4 5 G 7 8 9 10 ll 12 13 14 15 16 17 18 19 20 21 22 23 Za or matcrial brcach of this Agx•eement by Developer or any of its officers, employees, agents, or subcontractors related to the activities described or contemplated by this Agreement. No officials, officers, employees, consultants, contractors or agents of SAIZUA or City shali be personally liable to Developer, any voluntary or involuntary successors or assignees, or any lender or other party holding an interest in the Project or the Property, in the eveut of any default or breach by SARDA or City, or for any amount tvl�ich may become due to Developer or to its successors or assignees, or on any obligations arising under this Agreement. 14.8 Real Estate Conunissions. Fach of the Parties hereto represents and �varrants to the other thai it has not emgloyed or uti(ized the scrviccs of any other broker, salesperson, or finder in connection with the matters described in this Agreement, and each of said Parties agrees to indemnify, defend (including reasonable attorneys' fees and costs), save and hold harniless the othcr &om and against any and all claims, demands, costs, expenses, and liability arising out of any claims for a brokerage co�runission or other compensation made by any broker or brokers, salespersons or finders purporting to represcnt the indemnifying party or claiming by, through ar under the indeinrufyu�g party in coFuiection �vith the transaction contemplated by tivs Agrecment. 14.9 Attome s' Fees. I�t the event that either Party brings any legal action to intetpret or enforce any pravision of this Agreement, the prevailing Party in that action shall be entitled to receive, in addition to all other relief available to it, its costs of litigation and reasonable attorney's fees, including costs and fees incurred on appeal and in enforcing any judgment which may be rendered on the underlying action. 14.10 Waivers. No �vaiver of any breach of any term or conditioii contained in this Agreement shall be deemed a�vaiver of any preceding or succeeding breach of such term or condition, or of any other term or condition contained in this Agreement. No extension of the time for performance of any obligation or act, no waiver of any term or candition of this Agreement, nor 11255938.b -1%- 72 5 00.00876�29140768. I CONTRACT NO. SA35640 1 2 3 a 5 6 7 8 9 10 11 12 13 l4 15 16 17 18 19 20 21 22 23 24 any modification of this Agreement shall be enforccable against any Party unless made in tvriting and executed by all Parties. 14.1 I Constn�ction. Headings at the begiruung of each section and sub-section of this Agreement are solely for the convenience of reference of the Parties and are not a part of this Agreement. Whenever required by the context of this Agreement, the singular shall include the plural and the masculine sl�all inctude the feminine and vice versa. This Agreement shall not be construed as if it had been prepared by one or the other of the Parties, but rather as if the Parties prepared this Agreement. Unless othenvise indicater.i, all references to sections are to ttus A�,�eement. All exhibits refe�red to in this Agreement are attached to this Agrcement and incorporated into this Agreement by this reference, If the date on �vhich the Parties are recluired to take any action pursuant fo the terms of this Agreement is not a business day of City, as appropriate, the action shall be taken on the next business day of City. 14.12 Counterpart Ori ig nals. This Agreement may be executed in counterparts �vhich, when taken together, shall constitute bui one and the same instrament. 14.13 Time of Essence. Time is of the essence of every partion of this Negotiating Agreement in �vhich time is a material part. During the l�Iegotiating Period the time periods set forth in this Negotiating Agreement for the performance of obligations hereunder shall apply and commence upon a complete submittal of thc applicable information or occurrence of an applicable event. In no event shall an incomplete snbmittal by Developer trigger any af City obligations to revie�v, approval and/or performance hereunder: provided, however, that City shall notify Developer of an incomplete submittal as soon as is practicable and in no event later ihan the applicable time set forth for City action on the partieular item in question. 14.14 Entire Attreement. This Agreement contains the entire understanding and agreement of the Parties, integrates ali of the terms and conditions mentioned herein or incidental 1(255938.6 -�8- 72500.00876�29140768.1 CONTRACT NO. SA35640 l 2 3 4 5 b 7 8 hereto, and supersedes all negotiations or previoas agreements betiveen the Parties or their predecessors in interest �vith respect to all or any part of the subject matter hereof. 14.15 Non-Discrimination. Developer shall not discrinunate against nor segregate any person, or group of persons on account of sex, race, color, marital status, religion, creed, national origin or a�icestry in the sal�, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Site, nor shall Dcveloper establish or permit any such practice or practices of discrimination or segregalion in the selection, location, num6er, use, or occupancy of tenants, lessees, subtenants, sublessees or vendees af the land. 9 IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the 10 date set opposite their signatures. 11 [Signatue•es ou follo�ving pageJ 12 L 1255938.6 -19- 7250(?.00876129I40768.1 CONTRACT NO. SA35640 1 2 3 4 5 6 7 SIGNATURE PAGE TO EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT Insert Agreement Date } IN WITNESS WIiEREOF, this Agreement has been executed by the Parties hereto on the day and year fust �vritten above. CITY: Attest: �y: City Clerk Approi�ed as to fo�•nr: BEST BEST & KRIEGER LLP Ay' --- City Attorney SUCCESSOR AGENCY: DEVELOPER; �� I 1255938.6 City of Palm Desert, a California Charter city Ry: Mayor Successor Agency of Palm Desert Redevelopment Agency, a pubIic body, corporate and politic By: --- ----... - - F,xecutive l�irector Matteson Capital AC, LLC, a Dela�vare 1'uYilied`liabiliky company � By: cot Matteson -2�- 72500.00876�29140766.1 CONTRACT NO. SA35640 EXHIBTI' "A" TO EXCLUSIVE RIGIIT TO NEGOTIATE AGREEMENT YROPERTY DESCRTPTION Parcel A: Portion of I.ot 2, Tract No. 29528, per map recorded in Book 311, Page 40 of m�ps in the office of tlie Riverside Cou�ity Recorder. Parcel B: Portion of Lot 8, 'Tract No. 2845�, per map recorded in Boolc 264, Page 4 of maps in the ofi`ice of the Riverside County Recorder. Parcel C& D: Portion of Lots 5 and 6, Tract No, 29528, per map recorded in Book 311, I'age 40 of maps in tl�e of�ice of the Riverside County Recordet'. Yarcet E: Portions of Parcels l, S, 6, 18, 19 and all of �'arcels 2, 3, 4, l b, 17 of Parcel Map No. 27400, recorded in Book 183, Page 38 of maps in ihe offce of the Riverside County Recorder. 11255938.6 72500.00876�29140768.1 CONTRACT NO. SA35640 DRAFT REVIEW COPY (Pircher Re��isions for Mattesou 8-1-16) EXIiIBIT `�C" TO EXCLUSIVE RIGI3T TO NEGOTIATE AGIiEEMENT PROJECT DESCRIPTION Kesort Villas andlor other compatible resort amenities, including, but not limited to an estimated four hundred to eight hundreti (400 to 800) guest rooms J keys in up to t�vo (2) liotels, a competition / e�chibition wave pool, one hundred thirty to three hundred (130 to 300) residential / timeshare / resort villa units or a skate pazk and action sports youth camp, a perfon�iing arts amphitheater (estimated 2,500 seats), action sports industry themed conference center, meeting and banquet hall, approximately sixty- five thousand to one hundred eighty thousand (65,000 to 184,Q00) square feet of retail and restaurant space, heliport (up to t�vo), parking structures and related circulation improvements. 11255938.6 72500.00876129140768.1 CONTRACT NO. SA35640 EXHIBIT �B" TO EXCLUSIVE RIGHT TO NEGOTIATE AGREEMENT EXISTING PROPERTY CONDITIDNS SvuhCE b>:pf 1�4201i LEi3END � Erlsifn� PoualBoundory %� v t�U1K5�LVER�PALM DESERTRESORT � EXISTiNG CONDITIQNS ofii���n.uti<a.,.. a.im f1.�.N O•en.tM:l.. ar.�n4.n /nn4J:n.. f1/.91.fF/F•Al:+n r �.raw. c.aa� '� ��. �. r i�.. �. .��� .