HomeMy WebLinkAboutHotel Paseo TOT Reimbursement Agreementt,dNTRACT NO. C33180
CITY OF PALM DESERT/EL PASEO HOTEL
TOT REIMBURSEMENT AGREEMENT
THIS AGREEMENT ("Agreement") is entered into as of December 12, 2013, by and
between THE CITY OF PALM DESERT, a California municipal corporation, (the "City"), and
El Paseo Hotel, LLC, California Limited Liability Company("El Paseo Hotel").
RECITALS
A. El Paseo Hotel intends to purchase certain real property in the City of Palm
Desert, as more fully described in Exhibit "A" ("Property"), on which El Paseo Hotel intends to
develop and operate an approximately 154 room hotel project ("Project"). El Paseo Hotel
anticipates that the Project, once occupied, will generate transient occupancy taxes ("TOT") to
the City in an amount estimated by El Paseo Hotel to exceed three million dollars ($3,000,000)
during the first six years of the Project's operation, in addition to increased sales taxes generated
by the anticipated increased visitation to the City.
B.The City wishes to provide El Paseo Hotel an incentive to operate the Project in
order that increased visitation will generate additional TOT and sales tax to the City, and to
provide certain emergency services to city residents. The incentive will be in the form of a City
reimbursement to El Paseo Hotel of fifty percent (50%) of the TOT generated by the Project up
to a maximum of$1.8 million
AGREEMENT
NOW, THEREFORE, THE CITY AND EL PASEO HOTEL AGREE AS FOLLOWS:
Section 1. Reimbursement Commitment.
In consideration for El Paseo Hotel's operating the Project on the Property and the other
conditions and covenants provided for herein, if and when the El Paseo Hotel is built and
operated on the Property, the City shall reimburse to El Paseo Hotel fifty percent (50%) of City's
current (9%) TOT, as defined in Section 3.28.030 of the Palm Desert Municipal Code as of the
datc of this Agreement, collected from the Project in an amount not to exceed $1.8 million
Reimbursement TOT"). Payrnent of Reimbursement TOT by City to El Paseo Hotel shall
commence for the first full quarter during which commercial operation of the Project
commenced and shall continue until $1.8 million has been reimbursed by the City
Reimbursement Termination Date"). TOT collected prior to the Reimbursement Termination
Date is subject to reimbursement pursuant to this Agreement; TOT collected after the
Reimbursement Date is not. El Paseo Hotel shall at all times remit to City full payment of TOT
as required by the City's Municipal Code. Distributions of Reimbursement TOT by City to El
Paseo Hotel shall be made within sixty (60) days of the receipt by the City of the full amount of
TOT from the Property for each quarter.
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Section 2. Conditions to Reimbursement. As a condition precedent to payment of
any Reimbursement TOT, El Paseo Hotel shall:
A. Commence commercial operation of the Project by January 31, 2016. If El Paseo
Hotel fails to commence commercial operation prior to that date, then the City, in
its sole discretion, may terminate this Agreement by delivering written notice of
such termination to El Paseo Hotel. Following such termination, neither party
shall have any further rights, duties or obligations hereunder, and the City shall
have no obligation to pay Reimbursement TOT, provided however that if this
Agreement is not so terminated and El Paseo Hotel subsequently commences
operation, the terms of this Ageement shall apply and the City's right to
terminate shall be void; and
B. Be at all times operated as a "Four-Star Hotel" as required by Development
Agreement 07-02 between the City of Palm Desert and Larkspur Associates,
LLC, recorded in the Official Records of the County of Riverside, California as
Document #2008-0419294.
C. Allow the Project to be used as a "cooling station" for the City in the case of a
power outage.
Section 3. No Obli ation to Build or Operate. Both parties acknowledge that the
Project is currently in the proposal stages, and EI Paseo Hotel shall have no liability to City for
failure to build or operate a hotel as intended by the parties herein.
Section 4. Indemnification. El Paseo Hotel shall defend, assume all responsibility for
and hold the City, its council members, officers and employees, harmless from all demands,
claims, actions and damages, of whatever type or nature, including all costs of defense and
attorneys' fees, to any person or property arising out of or caused by any of El Paseo Hotel's
activities under this Agreement, whether such activities or performance thereof be by El Paseo
Hotel or anyone directly or indirectly employed or contracted with by El Paseo Hotel and
whether such damage shall accrue or be discovcrcd before or after commencement of operation
of the Project.
Section 5. Default.
A. Defaults.
Any one or all of the following events shall constitute a default by El Paseo Hotel:
1.Any misleading statement, misrepresentation or warranty of El Paseo
Hotel herein or in any other writing at any time furnished by El Paseo
Hotet to City that materially harms the City or materially diminishes the
Benefit of the Agreement to the City;
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2. Nonperformance when due of any of the obligations described herein, or
failure to perform any obligation or covenant contained herein;
3.The filing by or against El Paseo Hotel of a petition for relief under the
Bankruptcy Reform Act of 1978 or any bankruptcy or debtor relief law;
4.A general assigr ment by El Paseo Hotel for the benefit of creditors or the
appointment of any receiver or trustee of all or any portion of the assets of
El Paseo Hotel;
5. The transfer or assignment of this Agreement without approval by the
City;
B. Remedies.
Upon the occurrence of a default, the City, at its option, may declare this
Agreement to be in default and, in such event, the City shall have all of the rights
and remedies prescribed at law or in equity. Following an event of default, the
City shall have no further obligation to disburse all or any portion of
Reimbursement TOT.
C. No Liabilit, oyfCitvMember.
No city council member, official or employee of the City shall be personally
liable to EI Paseo Hotel, or any successor in interest, in the event of any default or
breach by City under this Agreement or for any amount which may become due to
El Paseo Hotel or any successor or on any obligations under the terms of this
Agreement.
Section 6. Compliance With Governmental Re ulations.
El Paseo Hotel shall, at its sole cost and expense, comply with all applicable municipal,
county, state and federal laws, rules, regulations and ordinances now in force, or which may
hereafter be in force, pertaining to its activities contemplated under this Agreement, including,
but not limited to, Development Agreement 07-02; issuance of building and use permits and
compliance with all federal and state labor laws (collectively, "Laws"). Supplementing the
indemnity set forth in Section 3 above, El Paseo Hotel shall defend, indemnify and hold the City,
its elected officials, officers, members, employees and agents free and harmless from any claims,
liabilities, costs, penalties or interest arising out of any failure or alleged failure of El Paseo
Hotel to comply with such Laws relating to this Agreement
Specifically, by its execution of this Agreement, El Paseo Hotel certifies that it is aware
of the requirements of California Labor Code Sections 1720 et seq. and 1770 et seq., as well as
California Code of Regulations, Title 8, Section 16000 et seq. ("Prevailing Wage Laws"), which
require the payment of prevailing wage rates and the performance of other requirements on
certain "public works" and "maintenance" projects. If the project being performed is an
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applicable"public works" or"maintenance" project, as defined by the Prevailing Wage Laws, El
Paseo Hotel agrees to fully comply with such Prevailing Wage Laws. If required, El Paseo Hotel
shall make copies of the prevailing rates of per diem wages for each craft, classification or type
of worker needed to execute the work on the project available to interested parties upon request,
and shall post copies at the El Paseo Hotel's principal place of business and the project site.
Section 7 Miscellaneous Provisions.
A. Transfer or Assi nr.
El Paseo Hotel shall not transfer or assign this Agreement without prior written
approval by the City. Approval of any such transfer or assi mment shall be at the
sole discretion of the City, provided that, as the parties acknowledge that El Paseo
Hotel will likely monetize this Agreement as part of its project financing City
shall not unreasonably withhold, condition or delay its consent to a pledge or
assignment of this Agreement (or rights under this Agreement) as part of the
capital financing for the project. Such financing approval may be granted by the
City Manager without further action of the City Council.
B. Interest of Members of Citv.
No member of the City Council of City and no other officer, employee or agent of
the City who exercises any functions or responsibilities in connection with the
carrying out of the City's work shall have any personal interest, direct or indirect,
in this Agreement.
C. Governin.
This Agreement shall be governed by and construed in accordance with the laws
of the State of California, to the jurisdiction of which the parties hereto submit.
D. Time of the Essence.
Time is of the essence of each and every provision of this agreement.
E. Notices.
Notices or other communications given under this A-eement shall be in writing
and shall be served personally or transmitted by first class mail, postage prepaid.
Notices shall be deemed received either at the time of actual receipt or, if mailed
in accordance herewith, on the third (3rd} business day after mailing, whichever
occurs first. Notices shall be directed to the parties at the following addresses or
at such other addresses as the parties may indicate by notice:
City:The City of Palm Desert
Palm Desert Civic Center
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73-510 Fred Waring Drive
Palm Desert, CA 92260
Attention: City Manager
El Paseo Hotel: El Paseo Hotel, LLC
74048 Alpine Lane
Palm Desert, CA 92211
Attention: David Worlow
F. Headin s.
The titles and headings of the various sections of this Agreement are intended
solely for reference and are not intended to explain, modify or place any
interpretation upon any provision of this Agreement.
G. Severabilitv.
Whenever possible, each provision of this Agreement shall be interpreted in such
manner as to be effective and valid under applicable law, but if any provision of
this Agreement shall be prohibited or invalid under applicable law, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such or the remaining provisions of this Agreement.
H. Waiver.
No waiver of any provision of this Agreement shall be deemed, or shall
constitute, a waiver of any other provision, whether or not similar, nor shall any
waiver constitute a continuing waiver. No waiver shall be binding unless
executing in writing by the party making the waiver.
I.Number and Gender.
As used in this Ageement, the masculine, feminine or neuter gender, and the
singular or plurat number, shatl each include the others whenever the context so
indicates or requires.
J.Further Assurances.
The parties shall execute, acknowledge, file or record such other instruments and
statements and shall take such additional action as may be necessary to carry out
the purpose and intent of this Agreement.
K. Bindin E ffect.
This Agreement shall be binding upon and inure to the benefit of the parties'
respective heirs, legal representatives, successors and assigns.
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L. Entire Agreement.
This Agreement constitutes the entire agreement between the parties and
supersedes all prior or contemporaneous agreements, representations, warranties
and understandings of the parties concerning the subject matter contained herein,
written or oral. No change, modification, addendum or amendment to any
provision of this Agreement shall be valid unless executed in writing by each
party hereto.
M. Attornevs' Fees.
In the event of any litigation arising out of this Agreement, the prevailing party in
such action, or the nondismissing party where the dismissal occurs other than by
reason of a settlement, shall be entitled to recover its reasonable costs and
expenses, including, without limitation, reasonable attorneys' fees and costs paid
or incurred in good faith. The "prevailing party," for purposes of this Agreement,
shal] be deemed to be that party who obtains substantially the result sought,
whether by settlement, dismissal or jud nent.
N. Amendment.
This Agreement may be amended only by a written instrument signed by both
City and the El Paseo Hotel.
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IN WITNESS WHEREOF, the parties hereto have executed this instrument as of the day
and year first above written.
Dated: nP Pmber 1, ?.013
CITY:
CITY OF PALM DESERT,
a California municipal corporation
By:
Van G. T nner, Mayor
ATTEST: APPROVED AS TO LEGAL FORM:
BEST BEST 8-KRIEGER LLP
Rac lle D. Klassen, City Cl
David J. rwi , City Attorney
EL PASEO HOTEL:
c-f/y El Paseo Hotel LLC
By:
Its: fyf,€,
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CALiFORN1A ALL-PURPOSE ACKNOWLEDGMENT
fi State of California
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fi County of G I/OY '
fi On L i r'` before me, r i C 'Y Y 1 G 1,u o-i, b C! ,
fiDate Here Insert Name and Ti le of he OHicer
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Name(s)ol Signer(s)
fi
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fi who proved to me on the basis of satisfactory
fievidence to be the person(,s'whose name i are
fi subscribed to the within instrument and acknowledged
fi to me that._t 13he/they executed the same in
fi er/their authorized capacity, and that by
fi MON CAMRiOUKRAKOW er/their signature(,8'f on the instrument the
COMM.#1962440 ++ person( , or the entity upon behalf of which the
fi E oow oo My -' person acted, executed the instrument.
fi M Comm,Ex .xJLY 15 2016
fi I certify under PENALTY OF PERJURY under the
fi laws of the State of California that the foregoing
fiparagraph is true and correct.
fiWITNESS my hand and official seal.
fi
Si nature:L. l.'1 "`
Place Notary Seal Above
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Signature of Notary Public
OPTIONAL
Though the information below is not required by/aw, it may prove va/uab/e to persons re/ying on the documentfiandcouldpreventfraudulentremova(and reattachment of this form to another document. Z
fi Description of Attached Document
fiTitle or Type of Document:
Document Date:Number of Pages:
fiSigner(s) Other Than Named Above:
fi Capacity(ies) Clatmed by Signer(s)
fi Signer's Name: Signer's Name:
Corporate Officer—Title(s): Corporate Officer—Title(s):
fif:; Individual i:J Individual
fi Partner—O Limited O General Top of thumb here L)Partner—[ !Limited I.:]General Top of thumb here S
fii_) Attorney in Fact Attorney in Fact
fi Trustee 7 Trustee
fi Guardian or Conservator C Guardian or Conservator
fi CJ Other: CJ Other:
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fiSigner Is Representing: Signer Is Representing: Z
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2009 National Notary Associetion•NationalNotary.org•t-800-US NOTARY(1-B00•876-6827) Item#5907
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
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OnF?hrttar.y 14, 7.(114 before me, t"• G. Sanchez, No[ary Piiblic
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personally appeared V n c;. TannPr --------------------------------
Namc(s)01 Siynor(s)
who proved to me on the basis of satisfactory evidence to
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within instrument and acknowledged to me that
he/ff i executed the same in hisl}fE a r authorized
capacity(}€), and that by his/l4 I i signature() on the
instrument the person(), or the entity upon behalf of
which the person(Ifi) acted, executed the instrument.
M. G.SANCHEZ
Commission # 1906339
Z I certify under PENALTY OF PERJURY under the laws
Q::,; Notary Public-California D of the State of Cafifornia that the foregoing paragraph is
Z ' Riverside County
My Comm.Expires Oct 29.2014 true and correct.
WITNESS my hand and offi al seal.
Signature
Placo Nolary Seal Above Si natur o otary Publi
OPTIONAL
Though the information below is not required by law,it may prove yaluable to pers ns relyin on the docu ent
and cou d prevent fraudutent remova and reattachment of Ihis form fo a other ument.
Description of Attached Document
Title orType of Document: '
331R0 - Fl P e H tPl, I,LC T.n.T. Reimbursement Agreement
Document Date: ne c Pmb e r 12, 2013 Number of Pages:
Signer(s)Other Than Named Above:
Capacity(ies) Claimed by Signer(s)
Signer's Name: Van G. Tanner Signer's Na e:
U Individual l llndividual
l I Corporate Officer—Title(s): _, i Corporate Offic —Title(s):
f l Partner—f 1 Limited [_I General f 1 Partner—l J Limit l J General
l_.l Attorney in Fact i Attorney in Fact
I I Trustee Top of Ihumb here { )Trustee Top ol thumb here
CJ Guardian or Conservator i_'Guardian or Conservator
fX Other: Mavor 1 Other:
Si ner ls Re resentin :Si ner Is Re resentin ;9 P 9 9 P 9
City of Palm Desert
2007 National Notary Association•9350 De Soto Ave.,P.O.Bar 2402•Chatsworlh,CA 913134402•www.NaHonaMotary.org Item 85907 Reorder.CaII Toll-Ree 1-800-876-6827