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Redevelopment Agency Agendas are
available on the City's Web Page
@ www.la-quinta.org
REDEVELOPMENT AGENCY
AGENDA
CITY COUNCIL CHAMBERS
78-495 Calle Tampico
La Quinta, California 92253
Regular Meeting
Tuesday, June 3, 2003 - 2:00 P.M.
Beginning Resolution No. RA 2003-09
CALL TO ORDER
Roll Call:
Agency Board Members: Adolph, Osborne, Perkins, Sniff, and Chairperson Henderson
PUBLIC COMMENT
At this time, members of the public may address the Redevelopment Agency on any
matter not listed on the agenda. Please complete a "request to speak" form and limit your
comments to three minutes. Please watch the timing device on the podium.
CLOSED SESSION
NOTE: Time permitting the Redevelopment Agency Board may conduct Closed Session
discussions during the dinner recess. In addition, persons identified as negotiating parties
are not invited into the Closed Session meeting when the Agency is considering acquisition
of real property.
RECONVENE AT 3:00 P.M.
Redevelopment Agency Agenda 1
I
June 3, 2003
PUBLIC COMMENT
.,At- °thTs -time-members-of- the-pub0c-,may, address, the ' Agency Board° orra.,ftems-tl is t-appear . w
within the Consent Calendar or matters that are not listed on the agenda. Please complete
a "request to speak" form and limit your comments to three minutes. When you are called
to speak, please come forward and state your name for the record. Please watch the
timing device on the podium.
For all Agency Business Session matters or Public Hearings on the agenda, a completed
"request to speak" form should be filed with the City Clerk prior to the Agency beginning
consideration of that item.
CONFIRMATION OF AGENDA
APPROVAL OF MINUTES
1. APPROVAL OF MINUTES OF MAY 20, 2003
CONSENT CALENDAR
NOTE: Consent Calendar items are considered to be routine in nature and will be approved
by one motion.
1. APPROVAL OF DEMAND REGISTER DATED JUNE 3, 2003.
BUSINESS SESSION
1. CONSIDERATION OF A PROFESSIONAL SERVICES AGREEMENT WITH BERRYMAN
AND HENIGAR FOR DEVELOPMENT COORDINATION SERVICES FOR SILVERROCK
RANCH.
A. MINUTE ORDER ACTION
STUDY SESSION - NONE
CHAIR AND BOARD MEMBERS' ITEMS - NONE
Redevelopment Agency Agenda 2 June 3, 2003
PUBLIC HEARINGS
1...., ..._.....n,A t JOtNT --PUB'L4C --HEARING-BETWEE-N THE CITY-C--OUNc]i At4D_-,REDEVELOPWNT .
AGENCY TO CONSIDER A PROPOSED DISPOSITION AN DEVELOPMENT
AGREEMENT BETWEEN THE AGENCY AND CENTERPOINT DEVELOPMENT, LLC, A
CALIFORNIA LIMITED LIABILITY COMPANY TO FACILITATE CENTERPOINT'S
CONSTRUCTION OF: 1) MEDICAL OFFICE/CLINIC; 2) BOUTIQUE HOTEL; 3) TWO
RESTAURANTS; 4) MID -PRICE SUITES HOTEL; 5) CONDOMINIUM/CASITAS
DEVELOPMENT; 6) CLUSTER COURTYARD DEVELOPMENT; AND 7) SINGLE
FAMILY HOME DEVELOPMENT CONTAINING NOT LESS THAN FORTY (40)
HOMES RESTRICTED FOR SALE TO LIMITED -INCOME BUYERS, FOR THE
PROPERTY LOCATED AT THE SOUTHEAST CORNER OF MILES AVENUE AND
WASHINGTON STREET. APPLICANT: CENTERPOINT DEVELOPMENT, LLC.
A. RESOLUTION ACTION
ADJOURNMENT
Adjourn to a regularly scheduled meeting of the La Quinta Redevelopment Agency to be
held on June 17, 2003, commencing with closed session at 2:00 p.m. and open session at
3:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253.
Redevelopment Agency Agenda 3 June 3, 2003
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I, June S. Greek, City Clerk of the City of La Quinta, do hereby declare that the foregoing
agenda for the La Quinta Redevelopment Agency meeting of Tuesday, June 3, 2003, was
posted on the outside entry to the Council Chamber, 78-495 Calle Tampico and on the
bulletin board at the La Quinta Chamber of Commerce and at Stater Bros. 78-630 Highway
111, on Friday, May 30, 2003.
DATED: May 30, 2003
JUNE S. GREEK, CIVIC, City Clerk
City of La Quinta, California
Redevelopment Agency Agenda 4 June 3, 2003
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AGENDA CATEGORY:
OF I
BUSINESS SESSION
COLTNCIL/RDA MEETING DATE: JUKE 3, 2003
CONSENT CALENDAR
ITEM TITLE:
Demand Register Dated June 3, 2003
RECOMMENDATION:
It is recommended the Redevelopment Agency Board:
STUDY SESSION
PUBLIC HEARING
Receive and File the Demand Register Dated June 3, 2003 of which $229,395.91
represents Redevelopment Agency Expenditures.
PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA
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AGENDA CATEGORY:
COUNCILMDA MEETING DATE: June 3, 2003
BUSINESS SESSION.
CONSENT CALENDAR:
ITEM TITLE: Consideration of a Professional Services
Agreement with Berryman & Henigar, Inc. for STUDY SESSION:
Development Coordination Services for SilverRock
PUBLIC HEARING:
Ranch
RECOMMENDATION:
Approve a professional services agreement with Berryman & Henigar, Inc. to provide
development coordination services for the SilverRock Ranch project, and authorize the
Executive Director to execute the contract.
FISCAL IMPLICATIONS:
The proposed contract budget is $100,000. The Agency's 2003-04 budget includes
funding for Phase I of the La Quinta Golf and Resort Project. Adequate funds have
been budgeted in account number 401-723-605-00, Contract Services -Professional.
BACKGROUND AND OVERVIEW:
On February 15, 2003, the Agency Board authorized the distribution of a Request for
Proposals (RFP) for a Development Coordinator for the SilverRock Ranch project.
Proposals were due March 14, 2003, and nine firms submitted proposals. The
Agency's Selection Committee interviewed five firms on March 24, 2003, including (in
alphabetical order): Berryman & Henigar, Chapman Golf Development, Project
Dimensions, Inc., Richard J. Thorman, and Tom Frost Golf, Inc. Following the
interview process, the Committee selected Tom Frost Golf, Inc. Pursuant to the City's
consultant selection process, staff then negotiated a contract with Tom Frost Golf,
Inc., and the RDA considered the contract on April 15, 2003. A tie vote resulted in
the item being continued to the May 6, 2003 RDA meeting. At that meeting, the RDA
Board voted against approving the agreement with Tom Frost Golf, Inc., and directed
staff to negotiate a contract with the Selection Committee's second choice, Chapman
Golf Development. Subsequent to the May 6, 2003 RDA meeting, Chapman Golf
Development formally withdrew from contract negotiations. At its meeting of May 201
2003, the RDA Board reviewed a number of issues related to SilverRock Ranch,
including the selection of a Development Coordinator. The RDA Board directed staff to
negotiate a contract with the Selection Committee's third choice, Berryman & Henigar,
Inc.
The Professional Services Agreement with Berryman & Henigar, Inc. is included as
Attachment 1. The contract is for "Time and Materials" and the total cost for the
Development Coordinator's services is not to exceed $100,000. The contract, once
approved, will be in effect for six months. Barryman & Henigar's original proposal is
included as Attachment 2.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Redevelopment Agency Board include:
1. Approve a professional services agreement with Berryman & Henigar, Inc. to
provide development coordination services for the SilverRock Ranch project, and
authorize the Executive Director to execute the contract; or
2. Do not approve a professional services agreement with Berryman & Henigar,
Inc. to provide development coordination services for the SilverRock Ranch
project, and do not authorize the Executive Director to execute the contract; or
I Provide staff with alternative direction.
Respectfully submitted,
Mark Weiss, Assistant Executive Director
Approved for submission by:
Thomas P. Genovese, Executive Director
Attachments: 1. Professional Services Agreement
2. Berryman & Henigar Work Proposal
ATTACHMENT 1
PROFESSIONAL SERVICES AGREEMENT
This AGREEMENT FOR CONTRACT SERVICES (the "Agreement"), is made and
entered into by and among the LA QUINTA REDEVELOPMENT AGENCY (the "Agency"),
a California public entity, and Berryman & Henigar, Inc. , a California corporation (the
"Consultant"). The parties hereto agree as follows:
1. SERVICES OF CONSULTANT
1.1 Scope of Services. In compliance with all terms and conditions of the
Agreement, the Consultant shall provide those services related to Phase I development of the La
Quinta Golf & Resort Project ("Project"), as specified in the "Scope of Services" attached hereto
as Exhibit "A" and incorporated herein by this reference (the "services" or "work"). Consultant
warrants that all services will be performed in a competent, professional and satisfactory manner
in accordance with the standards prevalent in the industry for such services. Services will be
provided to the Agency.
1.2 Compliance with Law. All services rendered hereunder shall be
provided in accordance with all ordinances, resolutions, statutes, rules, regulations and laws
(collectively, "Laws") of the City of La Quinta ("City"), the Agency, and any and all Federal,
State or local governmental agency of competent jurisdiction. The Agency shall not discriminate
against Consultant in its adoption or application of Laws.
1.3 Licenses, Permits, Fees, and Assessments. Consultant shall obtain at its
sole cost and expense such licenses, permits and approvals as may be required by law for the
performance of the services required by this Agreement to be performed by Consultant,
including a business license from the City, provided that the foregoing shall in no way require
Consultant to obtain or pay for any licenses, permits or approvals relating to the Project or the
design or construction thereof. Consultant shall have the sole obligation to pay for any fees,
assessments and taxes, plus applicable penalties and interest, which may be imposed against
Consultant by law and arise from or are necessary for the performance of the services required to
be performed by Consultant under this Agreement.
1.4 Familiarity with Work. By executing this Agreement, Consultant
warrants that (a) it has thoroughly investigated and considered the work to be performed, (b) it
has investigated the site of the work and fully acquainted itself with the conditions there existing,
(c) it has carefully considered how the work should be performed, and (d) it fully understands the
facilities, difficulties and restrictions attending performance of the work under this Agreement.
Should the Consultant discover any latent or unknown conditions materially differing from those
inherent in the work or as represented by the Agency, it shall immediately inform Agency of
such fact and shall not proceed except at Consultant's risk until written instructions are received
from the Contract Officer (as defined in Section 4.2 hereof).
1.5 Additional Services. In accordance with the terms and conditions of this
Agreement, the Consultant shall perform services in addition to those specified in the Scope of
Services (Exhibit "A") when directed in writing to do so by the Contract Officer, provided that
Consultant shall not be required to perform any additional services without compensation (i)
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which Consultant does not believe Consultant is capable of performing in accordance with the
standards set forth in this Agreement; or (ii) before Agency and Consultant agree on Consultant's
compensation therefor.
2..0 COMPENSATION
2.1 Contract Sum. For the services rendered pursuant to the Agreement, the
Consultant shall be compensated in accordance with the "Schedule of Compensation" attached
hereto as Exhibit "B" and incorporated herein by this reference. The Consultant shall be
compensated in an amount not exceeding One Hundred Thousand Dollars ($100,000) (the
"Contract Sum"). The method of compensation set forth in the Schedule of Compensation will
include payment for time and materials based upon the Consultant's rates as specified in Exhibit
"B", or such other methods as may be specified in the Schedule of Compensation (Exhibit "B").
Compensation may include reimbursement for actual and necessary expenditures for
reproduction costs, transportation expenses, telephone expense, premiums for bonds and
insurance, and similar costs and expenses when and if specified in the Schedule of Compensation
(Exhibit "B").
2.2 Method of Payment. Any month in which Consultant wishes to receive
payment, Consultant shall submit to the Agency no later than the tenth (10th) working day of
such month, in the form approved by the Contract Officer, an invoice for services rendered prior
to the date of the invoice. Such invoice shall (1) describe in detail the services provided,
including time and materials, (2) specify each staff member who has provided services and the
number of hours assigned to each such staff member, and (3) indicate the total expenditures to
date. Such invoice shall contain a certification by a principal member of Consultant specifying
that the payment requested is for work performed in accordance with the terms of this
Agreement. The Agency will pay Consultant for all expenses stated thereon which are approved
by the Agency pursuant to this Agreement within 30 days of receipt of the invoice.
3.0 PERFORMANCE SCHEDULE
3.1 Time of Essence. Time is of the essence in the performance of this
Agreement.
3.2. Force Majeure. All time periods specified for performance of the
services rendered pursuant to this Agreement shall be extended because of any delays due to
unforeseeable causes beyond the control and without the fault or negligence of the Consultant,
including, but not restricted to, acts of God or of the public enemy, fires, earthquakes, floods,
epidemic, quarantine restrictions, riots, strikes, freight embargos, acts of any governmental
agency other than City, and unusually severe weather, if the Consultant shall within ten (10) days
of the commencement of such delay notify the Contracting Officer in writing of the causes of the
delay. The provisions of this Section 3.2 shall not, however, extend the time period for, or
otherwise affect any obligations relating to payment of compensation required to be paid under
this Agreement. In no event shall the Agency be required to pay for services which are not
delivered.
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3.3 Term. Unless earlier terminated in accordance with Sections 7.7 and 7.8
of this Agreement, this Agreement shall continue in full force and effect for 6 months, from the
date of the execution of this Agreement.
4.0 COORDINATION OF WORK
4.1 Representative of Consultant. The following individuals are hereby
designated as being the principals and representatives of Consultant authorized to act in its behalf
with respect to the work specified herein and make all decisions in connection therewith:
1. Roy Stephenson, P.E.
Executive Vice President
It is expressly understood that the experience, knowledge, capability and reputation of the
foregoing individual was a substantial inducement for Agency to enter into this Agreement.
Therefore, the foregoing individual shall be responsible during the term of the Agreement for
directing all activities of Consultant and devoting sufficient time to personally supervise the
services hereunder. The foregoing individuals may not be changed by Consultant and no other
personnel may be assigned to perform the service required hereunder without the express written
approval of Agency.
4.2 Contract Officer. The Contract Officer shall be the Assistant Executive
Director or such other person as may be designated by the Executive Director of the Agency.
The Contract Officer has been authorized to act on behalf of the Agency for the purposes of this
Agreement. It shall be the Consultant's responsibility to assure that the Contract Officer is kept
informed of the progress of the performance of the services and the Consultant shall refer any
decisions which must be made by Agency to the Contract Officer. Unless otherwise specified
herein, any approval of Agency required hereunder shall mean the approval of the Contract
Officer.
4.3 Prohibition Against Subcontracting or Assignment. The experience,
knowledge, capability and reputation of Roy Stephenson was a substantial inducement for the
Agency to enter into this Agreement. Therefore, Consultant shall not contract with any other
entity to perform in whole or in part the services required hereunder without the express written
approval of the Agency. In addition, neither this Agreement nor any interest herein may be
assigned or transferred, voluntarily or by operation of law, without the prior written approval of
Agency.
4.4 Independent Consultant. Neither the Agency nor any of its employees
shall have any control over the manner, mode or means by which Consultant, its agents or
employees, perform the services required herein, except as otherwise set forth. Consultant shall
perform all services required herein as an independent consultant with only such obligations as
are consistent with that role. Consultant shall not at any time or in any manner represent that it
or any of its agents or employees are agents or employees of Agency.
4.5 Agency Cooperation. The Agency shall provide Consultant with any
plans, publications, reports, statistics, records or other data or information pertinent to services to
be performed hereunder which are reasonably available to the Agency. 10
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5.0 INSURANCE INDEMNIFICATION AND BONDS.
5.1 Insurance. The Consultant shall procure and maintain, at its cost, and
submit concurrently with its execution of the Agreement, commercial liability insurance against
all claims for injuries against persons or damages to property resulting from Consultant's acts or
omissions related to Consultant's performance under this Agreement. The insurance policy shall
be primary for losses arising out of Consultant's performance hereunder and neither the City nor
its insurers shall be required to contribute to any such loss. A certificate evidencing the
foregoing and naming the Agency and its officers and employees as additional insured shall be
delivered to and approved by the Agency prior to commencement of the services hereunder. The
amount of insurance required hereunder shall be determined by the Contract Sum in accordance
with the following table:
Contract Sum
Coverage(personal
injury/property damage)
Less than $50,000
$100,000 per
individual; $300,000 per occurrence
$509000-$300,000
$250,000 per
individual; $500,000 per occurrence
Over $300,000
$500,000 per
individual; $1,000,000 per occurrence
The Consultant shall also carry automobile liability insurance of $1,000,000 per accident
against all claims for injuries against persons or damages to property arising out of the use of any
automobile by the Consultant, its officers, any directly or indirectly employed by the Consultant,
any subcontractor, and agents or anyone for whose acts any of them may be liable, arising
directly or indirectly out of or related to Consultant's performance under this Agreement. The
term "automobile" includes, but is not limited to, a land motor vehicle, trailer or semi -trailer
designed for travel on public roads. The automobile insurance policy shall be primary for losses
arising out of Consultant's performance hereunder and neither the Agency nor its insurers shall
be required to contribute to such loss. A certificate evidencing the foregoing and naming the
Agency and its officers and employees as additional insured shall be delivered to and approved
by the Agency prior to commencement of the services hereunder.
Consultant shall also carry Workers' Compensation Insurance in accordance with and to
the extent required by State Workers' Compensation laws.
The Consultant shall procure professional errors and omissions liability insurance in the
amount $1,000,000.
All insurance required by the Section shall be kept in effect during the term of this
Agreement and shall not be cancelable without thirty (30) days written notice of proposed
cancellation to Agency. The procuring of such insurance or the delivery of policies or
certificates evidencing the same shall not be construed as a limitation of Consultant's obligation
to indemnify the Agency, its officers, employees, consultants, subcontractors or agents.
5.2 Indemnification. The Consultant shall defend, indemnify and hold harmless the
Agency, the City, their officers, officials, employees, representatives and agents ("Agency
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Indemnitees") from and against any and all actions, suits, proceedings, claims, demands, losses,
costs, and expenses, including legal costs and attorneys' fees, for injury to or death of person(s)
and/or for damage to property (including property owned by the Agency) to the extent caused by
the negligence or willful misconduct of Consultant, its officers, anyone employed by Consultant,
any subcontractor of Consultant, Consultant's agents or anyone for whose acts Consultant may
be liable.
In the event the Agency Indemnitees are made a party to any action, lawsuit, or other
adversarial proceeding in any way involving claims for which they are indemnified pursuant to
the preceding paragraph, then Consultant shall provide a defense to the Agency Indemnitees, or
at the Agency's option, reimburse the Agency Indemnitees their reasonable costs of defense,
including reasonable attorney's fees, incurred in defense of such claim. In addition, Consultant
shall be obligated to promptly pay any final judgment or portion thereof rendered against the
Agency Indemnitees arising out of Consultant negligence or willful misconduct.
5.3 Remedies. In addition to any other remedies the Agency may have if Consultant
fails to provide or maintain any insurance policies or policy endorsements to the extent and
within the time herein required, the Agency, at its sole option:
1. Obtain such insurance and deduct and retain the amount of the
premiums for such insurance from any sums due under this
Agreement.
2. Order the Consultant to stop work under this Agreement and/or
withhold any payments(s) which become due to Consultant
hereunder until Consultant demonstrates compliance with the
requirements hereof.
3. Terminate the Agreement.
Exercise of any of the above remedies, however, is an alternative to any other remedies
the Agency may have and are not the exclusive remedies for Consultant's failure to maintain or
secure appropriate policies or endorsements. Nothing herein contained shall be construed as
limiting in any way the extent to which Consultant may be held responsible for payments of
damages to person or property resulting from Consultant's or its subcontractors' performance of
work under this Agreement.
6.0 RECORDS AND REPORTS
6.1 Reports. Consultant shall periodically prepare and submit to the Contract
Officer such reports concerning the performance of the services required by this Agreement as
the Contract Officer shall require.
6.2 Records. Consultant shall keep such books and records as shall be
necessary to perform the services required by this Agreement and enable the Contract Officer to
evaluate the cost and the performance of such services. The Contract Officer shall have full and
free access to such books and records at all reasonable times, including the right to inspect, copy, 1'
audit and make records and transcripts from such records.
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6.3 Ownership of Documents.. Originals of all drawings, specifications,
reports, records, documents, and other materials, whether in hard copy or electronic form, which
are prepared by Consultant, its employees, subcontractors and agents in the performance of this
Agreement, shall be the property of Agency and shall be delivered to Agency upon the
termination of this Agreement or upon the earlier request of the Contract Officer, and Consultant
shall have not claim for further employment or additional compensation as a result of the
exercise by Agency of its full rights of ownership of the documents and materials hereunder.
Consultant may retain copies of such documents for its own use.
6.4 Release of Documents. The drawings, specifications, reports, records,
documents and other materials prepared by Consultant in the performance of services under this
Agreement shall not be released publicly without the prior written or verbal approval of the
Contract Officer or as required by law. The foregoing shall not limit Consultant's right to
provide information or other materials described in the preceding sentence to third parties pre -
approved by the Contract Officer to the extent Consultant determines the same is necessary or
desirable in order for Consultant to perform Consultant's obligation under this agreement. Such
disclosures must be for the benefit of the Agency and not for the promotion of the interests of the
Consultant. Consultant shall not disclose to any other private entity or person any information
regarding the activities of the City or Agency, except as required by law or as authorized by the
Contract Officer.
7.0 ENFORCEMENT OF AGREEMENT
7.1 California Law. This Agreement shall be construed and interpreted both
as to validity and to performance of the parties in accordance with the laws of the State of
California. Legal actions concerning any dispute, claim or matter arising out of or in relation to
this Agreement shall be instituted in the Superior Court of the County of Riverside, State of
California, or any other appropriate court in such county, and Consultant covenants and agrees to
submit to the personal jurisdiction of such court in the event of such action.
7.2 Disputes. In the event of any dispute arising under this Agreement, the
injured party shall notify the injuring party in writing of its contentions by submitting a claim
therefor. The injured party shall continue performing its obligation hereunder so long as the
injuring party commences to cure such default within ten (10) days of service of such notice and
completes the cure of such default within forty-five (45) days after service of the notice, or such
longer period as may be mutually agreed to in writing by the Contract Officer and Consultant;
provided that if the default is an immediate danger to the health, safety and general welfare, the
Agency may take such immediate action as the Agency deems warranted. Compliance with the
provisions of this Section shall be a condition precedent to termination of the Agreement for
cause and to any legal action, and such compliance shall not be a waiver of any party's right to
take legal action in the event that the dispute is not cured, provided that nothing herein shall limit
Agency's right to terminate this Agreement without cause pursuant to Section 7.8.
7.3 Retention of Funds. Agency may withhold from any monies payable to
Consultant sufficient funds to compensate Agency for any losses, costs, liabilities or damages it
reasonably believes were suffered by Agency due to the default of Consultant in the performance
of the services required by the Agreement. Notwithstanding the foregoing, the provisions of this
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Section 7.3 shall not release or otherwise excuse Agency from liability for, or limit Consultant's
rights and/or remedies arising out. of, any failure by Agency to timely pay Consultant any amount
otherwise due Consultant.
7.4 Waiver. No delay or omission in the exercise of any right or remedy of a
nondefaulting party on any default shall impair such right or remedy or be construed as a waiver.
Agency's consent or approval of any act by Consultant requiring Agency's consent or approval
shall not be deemed to waive or render unnecessary Agency's consent to or approval of any
subsequent act of Consultant. Any waiver by either party of any default must be in writing and
shall not be a waiver of any other default concerning the same or any other provision of this
Agreement.
7.5 Rights and Remedies are Cumulative. Except with respect to rights and
remedies expressly declared to be exclusive in this Agreement, the rights and remedies of the
parties are cumulative and the exercise by either party of one or more of such rights or remedies
shall not preclude the exercise by it, at the same or different times, of any other rights or
remedies for the same default or any other default by the other party.
7.6 Legal Action. In addition to any other rights or remedies, either party.
may take legal action, at law or at equity, to cure, correct or remedy any default, to recover
damages for any default, to compel specific performance of this Agreement, to obtain injunctive
relief, or to obtain any other remedy consistent with the purposes of this Agreement.
7.7 Termination Prior to Expiration of Term. This Section shall govern
any termination of this Agreement, except as specifically provided in the following Section 7.8
for termination for cause. The Agency reserves the right to terminate this Agreement at any
time, with or without cause, upon thirty (30) days written notice to Consultant. Upon receipt of
any notice of termination, Consultant shall immediately cease all services hereunder except such
as may be specifically approved by the Contract Officer. Consultant shall be entitled to
compensation for all services rendered prior to receipt of the notice of termination and for any
services authorized by the Contract Officer thereafter in accordance with the Schedule of
Compensation (Exhibit `B") or such as may be approved by the Contract Officer, except as
provided in Section 7.3.
7.8 Termination for Default of Consultant. If termination is due to the
failure of the Consultant to fulfill its obligation under this Agreement, the Agency may, after
compliance with the provision of Section 7.2, take over the work and prosecute the same to
completion by contract or otherwise, and the Consultant shall be liable to the extent that the total
cost for completion of the services required hereunder exceeds the compensation herein
stipulated (provided that the Agency shall use reasonable efforts to mitigate such damages, and
that in no event shall Consultant's liability exceed the amount actually paid by Agency to
Consultant pursuant to this Agreement), and Agency may withhold any payments to the
Consultant for the purpose of setoff or partial payment of the amounts owned the Agency as
previously stated in Section 7.3.
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a.
7.9 Attorneys' Fees. If either party commences an action against the other
party arising out of or in connections with this Agreement, the prevailing party shall be entitled
to recover reasonable attorneys' fees and costs of suit from the losing party.
8.0 CITY OFFICERS AND EMPLOYEES: NON-DISCRIMINATION
8.1 Non -liability of Officers and Employees. No officer or employee of the
Agency shall be personally liable to the Consultant, or any successor in interest, in the event of
any default or breach by the Agency of for any amount which may become due to the Consultant
or to its successor, or for breach of any obligation of the terms of the Agreement.
8.2 Conflict of Interest. No officer or employee of the Agency shall have
any personal interest, direct or indirect, in this Agreement nor shall any such officer or employee
participate in any decision relating to the Agreement which effects his personal interest or the
interest of any corporation, partnership or association in which he is, directly or indirectly,
interested, in violation of any State statute or regulation. The Consultant warrants that it has not
paid or given and will not pay or give any third party any money or other consideration for
obtaining this Agreement.
8.3 Covenant Against Discrimination. Consultant covenants that, by and for
itself, its heirs, executors, assigns, and all persons claiming under or through them, that there
shall be no discrimination against or segregation of, any person or group of persons on account
of race, color, creed, religion, sex, marital status, national origin, disability or ancestry in the
performance of the Agreement. Consultant shall take affirmative action to insure that applicants
are employed and that employees are treated during employment without regard to their race,
color, creed, religion, sex, marital status, national origin, physical disability, mental disability,
medical condition, age or ancestry.
9.0 MISCELLANEOUS PROVISIONS
9.1 Notice. Any notice, demand, request, consent, approval, communication
either party desires or is required to give to the other parties or any other person shall be in
writing and either served personally or sent by prepaid, first-class mail to the address set forth
below. Either party may change its address by notifying the other party of the change of address
in writing. Notice shall be deemed communicated forty-eight (48) hours from the time of
mailing if mailed as provided in this Section 9.1.
To Agency:
LA QUINTA REDEVELOPMENT AGENCY
78-495 Calle Tampico
La Quinta, California 92253
Attention: Mark Weiss
Assistant Executive Director
To Consultant:
Berryman & Henigar, Inc. -�
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389256.04 a05/27/03
78-060 Calle Estado
La Quinta, CA 92253
Attention: Roy F. Stephenson
Executive Vice President
9.2 Integrated Agreement. This Agreement contains all of the agreements of
the parties and all previous understandings, negotiations and agreements are integrated into and
superseded by this Agreement.
9.3 Amendment. This Agreement may be amended at any time by the mutual
consent of the parties by an instrument in writing signed by all parties.
9.4 Severability. In the event that any or more of the phrases, sentences,
clauses, paragraphs, or sections contained in the Agreement shall be declared invalid or
unenforceable by a valid judgment or decree of a court of competent jurisdiction, such invalidity
or unenforceable shall not effect any of the remaining phrases, sentences, clauses, paragraphs, or
sections of this Agreement which are hereby declared as severable and shall be interpreted to
carry out the intent of the parties hereunder.
9.5 Authority. Each party to this Agreement hereby warrants to the other
party that the individuals executing this Agreement on behalf of such party are duly authorized to
execute this Agreement on behalf of said parties and that by so executing this Agreement such
party hereto is formally bound to the provisions of this Agreement.
119/015610-0065 1 1
389256.04 a05/27/03
IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates
stated below.
Dated: , 2003
ATTEST:
June S. Greek, Agency Secretary
APPROVED AS TO FORM:
M. Katherine Jenson, Agency Counsel
Dated: .2003
LA QUINTA REDEVELOPMENT AGENCY
Thomas P. Genovese Executive Director
BERRYMAN & HENIGAR, INC.
LN
Roy F. Stephenson, P.E.
Executive Vice President
17
1?
119/015610-0065
389256.04 a05/27/03
EXHIBIT A
SCOPE OF SERVICES
. Berryman & Henigar, Inc. will provide the following list of services to the City of La
Quinta Redevelopment Agency that include ensuring the correct disciplines for design and
construction are retained and coordinating with such disciplines for the development of plans and
specifications which meet with Consultant's understanding of the City's vision for the Project.
Berryman & Henigar, Inc. will use diligent efforts to cause proper public agency procedures to
be followed by the Agency throughout the term of the Agreement. Additionally, Berryman &
Henigar, Inc. will assist in reviewing bids for value engineering and quality control, insure that
all involved parties are kept up to date on the process, and all public works bidding processes are
followed.
Task 1.0 Agency/Coordination
• Meet with Agency Project Manager & Project Development Team to go over scope of
services, team assignments, areas of responsibility, timelines, and required processes.
• Participate in regularly scheduled Agency staff meetings.
• Participate in community outreach meetings as directed by the Agency.
• Attend Agency Board meetings on project matters.
• Assist in CEQA compliance.
• Prepare project status reports.
• Available on -call for telephone conferences.
• Facilitate website updates regarding project progress.
• Coordinate with City departments and other regulatory agencies.
• Prepare a monthly progress report for the Agency Project Manager and the Project
Development Team.
Task 2.0 Selection of Design Specialists
• Identify needed specialists in conjunction with Agency staff and create timeline to
engage.
• Prepare RFP/RFQ scope of work.
• Review proposals/qualifications and provide written evaluation.
• Participate with Agency staff in interview/selection process.
Task 3.0 Selection of Construction Manager/Operators
• Identify golf course/clubhouse construction manager.
• Identify golf course/clubhouse operators.
• Prepare RFP/RFQ scopes of work.
• Review proposals/qualifications and provide written evaluation.
• Participate with Agency staff in interview/selection process.
• Develop draft long-term management agreement and advise the Agency on selection and
contract terms.
• Work with project team to ensure the operational needs of hotel/retail uses are integrated
into the golf operation.
119/015610-0065
389256.04 a05/27/03
• Review golf course and clubhouse design plans and develop a recommended long-term
maintenance program.
Task 4.0 Pre -Qualification of Golf Course/Clubhouse Contractors
• Prepare contractor's scope of work.
• Prepare list of recommended golf course and clubhouse builders for consideration by the
Agency.
• Quantify minimum experience needed in golf course/clubhouse construction.
• Review pre -qualification SOQs and provide written evaluation.
• Participate with Agency staff in qualifying contractor.
Task 5.0 Project Schedule
• Assemble design schedule from design specialists.
• Consolidate design schedules into master schedule using Microsoft Project.
• Maintain and update schedules monthly.
• Conduct monthly status meeting.
Task 6.0 Bid Documents
• Assemble design specialists' plans and special specifications.
• Review plans and specifications for compliance to Agency standards.
• Prepare bid documents in compliance with applicable Agency requirements and relevant
prevailing wage provisions.
• Review bids when received.
• Prepare analysis of all bids for review and final selection.
Task 7.0 Records Retention
• Maintain separate files for specialists, contractors, and operators.
• Maintain file on all written correspondence.
• Maintain minutes of all project status meetings.
• Maintain file on all record drawings.
19
119/015610-0065 t 4
389256.04 a05/27/03
EXHIBIT B
SCHEDULE OF COMPENSATION
For the services outlined in Exhibit "A," Consultant shall be compensated on a "Time
and Materials" basis in an amount not to exceed $100,000 in accordance with the Schedule of
Hourly Rates set forth below:
Development Coordinator $165
Plan Reviewer $130
Document Engineer $100
Scheduler $ 85
Clerical $ 40
In no event shall the total payments under this Contract exceed $100,000 unless the
Agreement is amended by the La Quinta Redevelopment Agency and Berryman & Henigar, Inc.
119/015610-0065
389256.04 a05/27/03
COUNCIL/RDA MEETING DATE: June 3, 2003
ITEM TITLE:
Joint Public Hearing for Consideration of a Disposition
and Development Agreement by and Between the La
Quinta Redevelopment Agency and Center Point
Development, LLC, a California Limited Liability
Company, for the Sale and Development of 46.6
Acres of Agency Property Located Southeast of the
Intersection of Washington Street and Miles Avenue
in La Quinta Project Area No. 2
RECOMMENDATION:
AGENDA CATEGORY:
BUSINESS SESSION:
CONSENT CALENDAR:
STUDY SESSION:
PUBLIC HEARING:
Adopt a Resolution of the Redevelopment Agency approving the Disposition and
Development Agreement and authorize the Agency Chair and Executive Director to
execute the necessary documents to fund up to $2,520,000 in expenditures from the
Project Area No. 2 Low and Moderate Income Housing Accounts for this project. She
aid
revenue will be derived from the land sale proceeds the Agency will accrue when
non -affordable housing parcels of this property are purchased by Center Point
Development, LLC.
FISCAL IMPLICATIONS:
Per the Disposition and Development Agreement (Agreement), Center Point
Development, LLC will pay the Agency $7,054,074 to purchase the 46.6-acre site.
The Agency will then expend $2,520,000 (account numbers to be established upon
receipt of the land sale) in housing funds to secure 40 single-family units that will be
affordable to moderate income family households. To date, the Agency has spent
$3,949,203 to purchase and improve the site; $3,678,305 of 1995 Housing Bond
funds and $270,000 of Project Area No. 2. Low and Moderate Income Housing funds.
Per Federal and State law, $3,949,203 of the land sale proceeds will be dedicated to
this and a second affordable housing development (the Avenue 48 affordable housing
development). The remaining $3,104,871 in sale proceeds will be deposited into the
Project Area No. 2 Debt Service fund.
BACKGROUND AND OVERVIEW:
The Agency purchased the approximate 46.6-acre site (Property) in 1995 in order to
reserve land for affordable housing development. Subsequently, the Agency focused
its attention on completing affordable housing development activities associated with
other Agency owned properties located on Avenue 48. In December 1999, the
Agency circulated a Request for Proposals that sought a mix of hotel, restaurant, and 21
S:\CityMgr\STAFF REPORTS ONLY\PH2CIC RDA StfRt.doc
affordable housing development on the Property. The desire to seek hotel and
restaurant uses was generated by the opening of the Indian Wells Tennis Gardens,
located northwest of the Property. Proposals were received and the Agency entered
into two separate exclusive negotiation agreements. The first, in March 2000,
encompassed a 10.8-acre segment of the Property and entailed a proposal to develop a
Hilton Gardens Inn hotel. The hotel developer and Agency concluded negotiations
without reaching agreement because site access issues could not be resolved. The
Agency entered into a second exclusive negotiation agreement in February 2001 for
the entire Property. This agreement was also terminated after the development entity
failed to structure an economically viable project. The Agency then moved forward to
secure environmental clearances and entitle the Property with the approval, by the City
of La Quinta (City), of a specific plan in February 2002.
The Center Point Development, LLC (Developer) first contacted the Agency in June
2002 regarding their interest in developing hotel, restaurant, medical office, and
affordable and market rate housing on the Property. In August 2002, the Agency
entered into an Exclusive Negotiation Agreement with the Developer that initiated a
120 day period during which the Developer would structure a development program,
secure tenants, secure financing commitments, and process amendments to the
February 2002 Specific Plan. Further, the Agency and Developer together, would
negotiate property purchase terms, and if agreement was reached, draft a disposition
and development agreement. The negotiations generated purchase terms that were
accepted by both the Agency and Developer, and the attached Agreement was
subsequently drafted.
Development Program
Per the Agreement the Developer will purchase the Property for $7,054,074. The
Developer will then mass grade the site and construct Seeley Drive and utility and
drainage improvements. By phases, the Developer will then build the following:
• Not less than a 120-room Homewood Suites by Hilton hotel ("Hotel")
• Not less than a 120 one- and two- story casita hotel condominium units to be
rented as vacation rental units ("Casitas")
• A 30-room boutique hotel comprised of 1,200 square foot villas and a spa
("Boutique Hotel")
• A 120,000 square foot medical and surgical center comprised of three 40,000
square foot buildings ("MOB")
• Two sit-down restaurants ( "Restaurants")
• 13 one- and two-story cluster courtyard villas that will be sold at market sales
prices ("Villas")
• 54 one-story single-family homes and courtyard homes of which 40 will be sold
at prices affordable to moderate income households ("Affordable Single Family
and Courtyard Homes"), with the remaining 14 sold at market sales prices
("Market Single Family and Courtyard Homes")
• A 2.68-acre park ("Park"). 22
S:\CityMgr\STAFF REPORTS ONLY\PH2CIC RDA StfRt.doc 2
The aforementioned improvements constitute the "Development".
The first phase development will comprise the Hotel and 40 Casitas units, and if the
Developer demonstrates that they have secured financing and/or tenant commitments,
the remaining Casitas units, the Boutique Hotel and the Restaurants. Once the City
approves the foundation for the Hotel, the Developer may then commence construction
of the Affordable One-story Single -Family and Courtyard Homes, the Park and the first
of the three MOB buildings. When the exterior walls of the Hotel are framed, the
Developer may then start construction of the second MOB. Finally, when the Hotel is
75% complete (defined as having the exterior wall stucco and the roofs installed), the
Developer may then commence development of the third MOB.
The Agreement provides two Property purchase options. The first, Option A, allows
the Developer to purchase the entire Property at one time. This Option was developed
because the lender, or equity investor who funds the land purchase and site
improvement activities, may require that a lien be recorded against the entire Property
to secure this financing. The second purchase option, Option B, allows the Developer
to purchase parcels as each development phase (as described in the preceding
paragraph) is constructed. This option would be instituted if the Developer secures
financing that does not require that a lien be recorded against the entire Property to
secure funds. In order to improve the Property as economically as possible, the
Developer desires to mass grade the Property, stabilize the soil, construct Seeley Drive,
and the required drainage and utility system improvements.
Pursuant to a separate development agreement, the Developer is also required to fund
improvements to the Park to City specifications, and reimburse the City $316,011 for
City funded matching funds used to secure a CMAQ Grant. The Grant will be funding
landscape and hardscape improvements to the Miles Avenue and Washington Street
frontages of the Property.
Affordable Housing Component
The Agency will sell the land to the Developer at fair market value. The only financial
assistance the Agency will provide is $63,000 per unit or $2,520,000 to secure the
Affordable One-story Single -Family and Courtyard Homes. These funds will be slated
for the Affordable One-story Single -Family and Courtyard Homes' pro-rata share of
land, site and building plan, engineering, municipal permit and fees, and site
improvement costs. The Agency will reimburse the Developer for these costs per a
schedule included in the Agreement. The source of the funds will be a portion of the
proceeds generated from the sale of the other parcels that comprise the Property.
When the Affordable One-story Single -Family and Courtyard Homes are purchased, the
Agency assistance will be converted in homebuyer silent second trust deed loans.
In order to sell the Affordable One-story Single -Family and Courtyard Homes at costs
affordable to moderate -income family households, the Agreement provides that the
S:\CityMgr\STAFF REPORTS ONLY\PH2CIC RDA StfRt.doc 3
Agency will fund 40 second trust deed mortgages. The mortgages will cover each
dwelling's pro-rata share of land ($35,175), architecture and engineering ($7,175),
entitlement/municipal fee costs ($1 1,300), and site improvement costs ($9,350). The
Agreement provides that a second trust deed of $40,000 to $63,000 per unit, or an
average second trust deed mortgage of $ 51, 500, will be provided to 40 units to
permit family households who earn from 81 to 120 percent of the Riverside County
median income to purchase these homes. The exact mortgage amount will be
determined by the purchase price of each unit. The home prices will range from
$216,000 to $251,000. The Agency second trust deeds combined with the
homebuyer down payment of 3% will reduce the first trust deed mortgage to
$142,000 to $175,000, a level affordable to moderate income family households.
The second trust deed loans will also feature covenants that require the dwellings to
remain affordable to moderate income family households for 45 years. Further, unlike
past Agency second trust deed loans, the covenants will not afford the homeowner
the option to sell their dwelling at prevailing market values and release the unit from
the affordability covenant. Instead, the homeowner must sell their dwelling to either
another qualified buyer or, if a qualified household cannot be found, as a last resort to
the Agency.
Revenue to the Agency/City
The Development will generate a combination of tax increment revenue that accrues to
the Agency, and transient occupancy and sales tax revenue that accrues to the City.
During the first five years of operation,, the combined tax increment and
sales/occupancy tax income is projected to be $3,076,229; over a ten-year period the
combined income is projected to be $1 1,494,507. Of these amounts, 34% will be tax
increment revenue and 66% sales/occupancy tax revenue. The net present value of
the five and ten year revenues (using a 6.5% discount rate) is $2,524,137 and
$7,784,665, respectively.
Accompanying the staff report is a Summary Report that further details this
transaction.
FINDINGS AND ALTERNATIVES:
The alternatives available to the Redevelopment Agency include:
1. Adopt a Resolution of the Redevelopment Agency approving the Disposition and
Development Agreement and authorize the Agency Chair and Executive Director
to execute the necessary documents to fund up to $2,520,000 in expenditures
from the Project Area No. 2 Low and Moderate Income Housing Accounts for
this project. Said revenue will be derived from the land sale proceeds the
Agency will accrue when the non -affordable housing parcels of this property are
purchased by Center Point Development, LLC; or
2. Do not approve the Resolution of the Redevelopment Agency that approves the
Disposition and Development Agreement; or
-4
S:\CityMgr\STAFF REPORTS ONLY\PHKIC RDA StfRt.doc 4
3. Provide staff with alternative direction.
Respectfully submitted,
Je ry Hermli n"
C mmunity Development Director
Approved for submission:
e�
Thomas P. Genovese, Executive Director
Attachments:
1. Summary Report
2. Disposition and Development Agreement
25
S:\CityMgr\STAFF REPORTS ONLY\PH2CIC RDA StfRt.doc 5
RESOLUTION NO. RA 2003-
A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY
APPROVING A DISPOSITION AND DEVELOPMENT AGREEMENT
BETWEEN THE AGENCY AND CENTER POINT DEVELOPMENT,
LLC FOR THE PROPERTY LOCATED AT THE SOUTHEAST
CORNER OF WASHINGTON STREET AND MILES AVENUE
WHEREAS, the La Quinta Redevelopment Agency ("Agency") is a public
body, corporate and politic, organized and existing under the California Community
Redevelopment Law (Health & Safety Code Section 33000 et seq.) (ACRL); and
WHEREAS, pursuant to the CRL, the City Council of the City of La Quinta
("City" or "City Council", as applicable) approved and adopted the Redevelopment Plan
("Redevelopment Plan") for Project Area No. 2 ("Project Area"), on November 29,
1983, by Ordinance No. 43, and amended the Redevelopment Plan on December 20,
1994, by Ordinance No. 258; and
WHEREAS, the Agency staff has negotiated a Disposition and
Development Agreement ("Agreement") with Center Point Development, LLC, a
California limited liability company ("Developer"), pursuant to which the Agency is to
convey to the Developer, either all at once ("Option'A")� or in phases ("Option B"),
certain real property located within the Project Area (the Property) for Seven Million
Fifty-four Thousand Seventy-four Dollars ($7,054,074) for the Developer's subsequent
development thereon of a commercial project containing a medical office/clinic, a
boutique hotel, a mid -price suites hotel, a resort -style condomimium/casistas
development, two sit-down restaurants, and two single-family residential
developments, with forty of the single-family homes restricted for sale to moderate -
income buyers at an affordable housing cost, all as more particularly described in the
Agreement (collectively, the "Project"); and
WHEREAS, the Agreement provides that Agency may reacquire any
undeveloped portion of the Property that is then owned by the Developer in the event
the Developer fails to commence construction of any particular phase of the Project
within certain specified time frames, interrupts construction of a particular phase of
the Project for a specified period of time, or transfers a particular phase of the Project
in violation of the Agreement, all as more particularly described in the Agreement; and
WHEREAS, Health and Safety Code Section 33433 requires that the
Agency prepare a Summary Report to consider the Agency's proposed sale of the
Property as set forth in the Agreement, that the Agency Board and the City Council
conduct a noticed joint public hearing with respect to the Agreement, and that the
approval of the Agreement be accompanied by certain findings and determinations as
set forth herein; and
zs
Resolution No. RA 2003-
Disposition and Development Agreement
Center Point Development, LLC
Adopted: June 3, 2003
WHEREAS, a Summary Report for the Agreement has been prepared and
the joint public hearing has been conducted in accordance with applicable requirements
of law; and
WHEREAS, the City Council and the Redevelopment Agency have
considered all the information and evidence set forth in the Summary Report presented
by the City/Agency staff and presented by persons wishing to appear and be heard
concerning the impact of the Agreement on the Project Area and the City as a whole;
and
WHEREAS, the Agreement is in accordance with the Redevelopment Plan
and is of benefit to the Project Area and the City of La Quinta; and
WHEREAS, the Agency hereby determines that the Agency's sale of the
Property pursuant to the Agreement is necessary to effectuate the purposes of the
Redevelopment Plan.
NOW, THEREFORE, BE IT RESOLVED BY THE LA QUINTA
REDEVELOPMENT AGENCY AS FOLLOWS:
1. That the above recitals are true and correct and incorporated herein.
2. That the La Quinta Redevelopment Agency hereby resolves as follows:
A. The Agreement effectuates the purposes of the Community
Redevelopment Law (Health & Safety Code Section 33000 et seq.) and of the
Redevelopment Plan and is in the best interests of the citizens of the City of La Quinta.
B. The Agency's sale of the Property will eliminate blight and is consistent
with the Agency's Five -Year Implementation Plan, based on the facts and conclusions
of the Summary Report, which is incorporated herein by this reference.
C. The Agency's sale of the Property will eliminate blight in that it will
facilitate the development of affordable housing.
D. The consideration the Developer will pay for the Property is not less than
the fair market value of the Property at its highest and best use in accordance with the
Redevelopment Plan, based on the facts and conclusions of the Summary Report.
S:\CITYMGR\STAFF REPORTS ONLY\PH2 CIC RDA DDA-RESO.WPD.DOC 7
2%
Resolution No. RA 2003-
Disposition and Development Agreement
Center Point Development, LLC
Adopted: June 3, 2003
3. The Agreement, a copy of which is on file with the Agency Secretary, is
hereby approved. The Agency Executive Director and Agency Counsel are
hereby authorized and directed to make final modifications to the Agreement
that are consistent with the substantive terms of the Agreement approved
hereby, and the Agency Executive Director is authorized to thereafter sign
the Agreement on behalf of the Agency.
4. The Agency Executive Director is authorized and directed, on behalf of the
Agency, to (i) sign such other and further documents, including but not limited
to subordination agreements and escrow instructions that require the Agency's
signature, and (ii) take such other and further actions, as may be necessary and
proper to carry out the terms of the Agreement.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the La
Quinta Redevelopment Agency held this 3rd day of June, 2003, by the following vote:
AYES:
NOES:
ABSENT:
ABSTAIN:
TERRY HENDERSON, Agency Chair
City of La Quinta, California
ATTEST:
JUNE S. GREEK, Agency Secretary
City of La Quinta, California
P.
S:\CITYMGR\STAFF REPORTS ONLY\PH2 CIC RDA DDA-RESO.WPD.DOC 8
Resolution No. RA 2003-
Disposition and Development Agreement
Center Point Development, LLC
Adopted: June 3, 2003
APPROVED AS TO FORM:
M. KATHERINE JENSON, Agency Counsel
City of La Quinta, California
?9
S:\CITYMGR\STAFF REPORTS ONLY\PH2 CIC RDA DDA-RESO.WPD.DOC 9
ATTACHMENT #1
SUMMARY REPORT
FOR THE
DISPOSITION AND DEVELOPMENT AGREEMENT
BETWEEN THE
LA QUINTA REDEVELOPMENT AGENCY
AND
CENTERPOINT DEVELOPMENT, LLC
May 15, 2003
INTRODUCTION
This document is the Summary Report ("Report") for the Disposition and Development
Agreement ("Agreement") by and between the La Quinta Redevelopment Agency
("Agency") and Centerpoint Development, LLC, a California limited liability company
("Developer-'). The Agreement facilitates the sale of approximately 46.6-acre Agency -
owned parcel ("Property") to the Developer who will construct:
• Not less than 120 room Homewood Suites by Hilton hotel ("Hotel")
• Not less than 120 one and two story casitas hotel condominium units to be
rented as vacation rental units ("Casitas")
• A 30-room boutique hotel comprised of 1,200 square foot villas and a spa
("Boutique Hotel")
• A 120,000 square foot medical and surgical center comprised of three 40,000
square foot buildings ("MOB")
• Two sit-down restaurants ("Restaurants")
• 13 courtyard cluster villa homes that will be sold at market sales prices ("Villas")
• 54 One-story Single Family and Courtyard Homes of which 40 will be sold at
prices affordable to moderate income households ("Affordable Single Family and
Courtyard Homes"), with the remaining 14 sold at market sales prices ("Market
Single -Family Homes")
• A 2.68-acre park ("Park").
The aforementioned improvements constitute the "Development".
This Report has been prepared pursuant to Section 33433 of the California Health and
Safety Code (the California Community Redevelopment Law or "Law") and addresses
the following:
• A summary of the proposed Development.
• The cost of the Agreement to the Agency.
• The estimated value of the interest to be conveyed, determined at the highest and
best uses permitted by the Agency's Redevelopment Plan.
• The estimated value of the interest to be conveyed determined at the use with the
conditions, covenants, and development costs required by the Agreement.
• An explanation of why the sale of property pursuant to the Agreement will assist in
the elimination of blight.
G:\WPDOCS\SumRpt-CIC.doc 1
Conformance with the Agency's Five Year Implementation Plan.
THE DEVELOPMENT
The Agency purchased the Property in 1995 in order to reserve land for affordable
housing development. Subsequently, the Agency focused its attention on facilitating
affordable housing development opportunities on other Agency owned properties
located on Avenue 48. In December 1999, the Agency circulated a Request for
Proposals that sought a mix of hotel, restaurant, and affordable housing development
on the Property. The desire to seek hotel and restaurant uses was generated by the
opening of the Indian Wells tennis Gardens, located, northwest of the Property.
Proposals were received and the Agency entered into two separate exclusive
negotiation agreements. The first, in March 2000, encompassed a 10.8-acre segment
of the Property and entailed a proposal to develop a Hilton Gardens Inn hotel. The
developer and Agency concluded negotiations without reaching agreement because site
access issues could not be resolved. The Agency entered into a second exclusive
negotiation agreement in February 2001 for the entire Property. This agreement was
also terminated after the development entity failed to structure an economically viable
project. The Agency then moved forward to secure environmental clearances and
entitle the Property with the approval, by the City of La Quinta ("City"), of a specific plan
in February 2002.
The Developer first contacted the Agency in June 2002 regarding their interest in
developing hotel, restaurant, medical office, and affordable and market rate housing on
the Property. In August 2002, the Agency entered into an exclusive negotiation
agreement with the Developer that initiated a 120 day period during which the
Developer would structure a development program, secure tenants, secure financing
commitments, and process amendments to the February 2002 specific plan. Further,
the Agency and Developer together, would negotiate property purchase terms, and if
agreement was reached, draft a disposition and development agreement. The
negotiations generated purchase terms that were accepted by both the Agency and
Developer, and the attached Agreement was subsequently drafted.
Per the Agreement the Developer will purchase the property for $7,054,074. The
Developer will then mass grade the Property and construct Seeley Drive, utility, and
drainage improvements. The first phase development will comprise the Hotel and 40
Casitas units, and if the Developer demonstrates that they have secured financing
and/or tenant commitments, the remaining Casitas units, the Boutique Hotel and the
Restaurants. Once the City approves the foundation for the Hotel, the Developer may
then commence construction of 20 Affordable Single Family and Courtyard Homes, the
Park and the first of the three MOB buildings. When the exterior walls of the Hotel are
framed, then the Developer may then start construction of the second MOB. Finally,
when the Hotel is 75% complete (defined as having the exterior wall stucco and the
roofs installed), the Developer may then commence development of the third MOB.
The Agreement provides two Property purchase options. The first, Option A, allows the
Developer to purchase the entire Property at one time. This Option was developed
31
G:\WPDOCS\SumRpt-CIC.doc 2
11
because the lender or equity investor who funds the land purchase and site
improvement activities may require that a lien be recorded against the entire Property to
'secure this financing. The second purchase option, Option B, allows the Developer to
purchase parcels as each development phase (as described in the preceding
paragraph) is constructed. This option would be instituted if the Developer secures
financing that does not require that a lien be recorded against the entire Property to
secure funds. In order to improve the Property as economically as possible, the
Developer desires to mass grade the Property, stabilize the soil, and construct Seeley
Drive, and required drainage and utility system improvements.
The Agreement includes provisions that give the Agency the option to repurchase
portions or all of the Property (if there is a Developer default caused by failure to
perform per the terms of the Agreement) at the price the Property was sold to the
Developer plus 33% of the cost of the site improvements, and their associated
design and soft costs. Per the Agreement, the Agency must review and approve
the user commitments, financing, improvements and construction budget for each
development phase. If the Developer has not started construction, the Agency may
purchase the land back at the purchase price less 10%.
The Agency will sell the land to the Developer at fair market value. The only financial
assistance the Agency will provide is $63,000 per unit or $2,520,000 to secure the
Affordable One-story Single Family and Courtyard Homes. These funds will be slated
for the Affordable One-story Single Family and Courtyard Homes' pro-rata share of
land, site and building plan, engineering, municipal permit and fee, and site
improvement costs. The Agency will reimburse the Developer for these costs per a
schedule included in the Agreement; the source of funds will be a portion of the
proceeds generated from sale of the other parcels that comprise the Property. When
the Affordable One-story Single Family and Courtyard Homes are purchased the
Agency assistance will be converted in homebuyer silent second trust deed loans.
The second trust deed loans will also feature covenants that require the dwellings to
remain affordable to moderate -income family households for 45 years. Further, unlike
past Agency second trust deed loans, the covenants will not afford the homeowner the
option to sell their dwelling at prevailing market values and release the unit from the
affordability covenant. Instead, the homeowner must sell their dwelling to either another
qualified buyer or if a qualified household cannot be found, as a last resort to the
Agency.
THE COST OF THE AGREEMENT TO THE AGENCY
To date, the Agency has invested $5,714,789 in the Property; these expenditures are
comprised of the initial land purchase cost, the cost to improve Miles Avenue and
Washington Street, the costs associated with preparing environmental and planning
studies, and the interest expense on the bonds used to purchase the property and fund
the other costs. The Developer will pay $7,054, 074 for the Property which will
reimburse the 1995 Housing Bond fund for $3,678,305 of non -interest expenses. The
Agency will pledge $2,520,000 of this amount to fund the silent second trust deed
assistance to the Affordable One-story Single Family and Courtyard Homes, and the
**)h
G:\WPDOCS\SumRpt-CIC.doc 3 -
12
remaining $1,158,305 will be pledged to fund some of the costs associated with the
Avenue 48 and Adams Street affordable housing development. The specific
expenditures were as follows:
• Property Purchase Cost - $199779500
• Washington Street/Miles Avenue Improvements - $1,700,805
• Specific Plan and Environment Studies - $175,000
• Adjoining Property Utility System Reimbursement - $95,898
• Interest Expense on the 1995 Housing Bonds - $1,765,586
• Homebuyer Second Trust Deed Mortgages — $2,520,000
In order sell the Affordable One-story Single Family and Courtyard Homes at costs
affordable to moderate -income family households, the Agreement provides that the
Agency will fund 40-second trust deed mortgages. The mortgages will cover each
dwelling's pro rate share of land ($35,175), architecture and engineering ($7,175),
entitlement/municipal fee costs ($11,300), and site improvement costs ($9,350). The
Agreement provides that a second trust deed of $40,000 to $63,000 per unit, or an
average second trust deed mortgage of $51,500, will be provided to 40 units to permit
family households who earn from 81 to 120 percent of the Riverside County median
income to purchase these homes. The exact mortgage amount will be determined by
the purchase price of each unit. The home prices will range from $216,000 to
$251,000. The Agency second trust deeds combined with the homebuyer down
payments of 3% will reduce the first trust deed mortgage to $142,000 to $175,000, a
level affordable to moderate income family households.
The Agency's Redevelopment Consultant has reviewed and verified the costs
associated with the Affordable One-story Single Family and Courtyard Homes. The
total development cost is projected to be $8,129,700, with sales income projected to be
$9,722,000.
ESTIMATED VALUE OF INTEREST TO BE CONVEYED
The Agency's Redevelopment Consultant reviewed comparable land sales for property
designated for commercial, hotel, condominium hotel and single-family uses that was
not entitled or improved. This review identified per acre land values ranging from
$60,000 to $283,140 per acre depending on size and location. Smaller parcels located
in high traffic locations commanded a greater land value. The Agreement provides that
the Agency will sell the Hotel, Casitas, Boutique Hotel, MOB and Restaurant parcels to
the Developer for $217,800 per acre; the residential land will be sold for a fair market
value of $60,000 per acre.
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ESTIMATED VALUE OF THE INTEREST TO BE CONVEYED, DETERMINED AT THE
USE AND WITH THE CONDITIONS, COVENANTS, AND DEVELOPMENT COSTS
REQUIRED BY THE AGREEMENT
The Agreement imposes conditions on the property as required by the City's entitlement
and environmental processes (imposed through a development agreement involving the
City and the Developer), and the requirement that the Developer construct the various
uses within the specified time frames presented in the Schedule of Performance. The
Agreement also requires the Developer to construct 40 dwellings that must be sold at
affordable housing costs to moderate -income family households and the construction of
Seeley Drive and the Park improvements. The Agency's second trust deed mortgage
assistance will fund the difference between the sales prices required to fund the cost of
developing these units and housing costs that would be affordable to moderate income
family households.
EXPLANATION OF WHY THE SALE OF THE PROPERTY PURSUANT TO THE
AGREEMENT WILL ASSIST IN THE ELIMINATION OF BLIGHT
The Property conveyance, and construction of the Development, addresses economic
blight within Project Area No. 2 by facilitating development of uses that generate
economic demand and additional patrons that will frequent Project Area businesses.
Further, the conveyance will facilitate the development of dwellings that will increase
and improve the supply of affordable housing within La Quinta Redevelopment Project
No. 2. Per the Second Five Year Implementation Plan, the Agency has an obligation to
facilitate the production of over 1,500 affordable units by 2004. In order to accomplish
this task the Agency must provide incentives to private developers and non-profit
organizations to construct units that will be affordable to households within the
respective income levels. The Property conveyance and the Development will further
the Agency's efforts to promote affordable housing development within Project No 2.
CONFORMANCE WITH THE AGENCY'S FIVE YEAR IMPLEMENTATION PLAN
The Second Five Year Implementation Plan and the Second Amended Housing
Affordability Plan identifies a combination of market rate and affordable housing
development for the Property. Further, the Implementation Plan identifies the potential
for resort and hospitality uses for the Property. The conveyance of the Property and the
subsequent development will conform to the provisions of these Plans.
A copy of the proposed Agreement is attached to this Report or is available for review
at the Community Development Department located at the La Quinta City Hall. The
proposed Agreement will be the subject of a joint public hearing and the Agency and
City Council on June 3, 2003, at 7:00 p.m. in the City Council Chambers are located at
the La Quinta City Hall, 78-495 Calle Tampico, La Quinta, California.
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