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2009 10 06 RDAea# 4 4 adja Redevelopment Agency agendas are available on the City' web page @ www.la-quinta.org REDEVELOPMENT AGENCY AGENDA CITY COUNCIL CHAMBERS 78-495 Calle Tampico La Quinta, California 92253 Special Meeting TUESDAY, OCTOBER 6, 2009 2:30 P.M. Closed Session / 4:00 P.M. Regular Open Session Beginning Resolution No. RA 2009-007 CALL TO ORDER Roll Call: Agency Board Members: Adolph, Evans, Henderson, Sniff, Chairperson Franklin 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. 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 acquisition of real property is considered. 1. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION 001 Redevelopment Agency Agenda 1 October 6, 2009 ~� • 0A. AND/OR DISPOSITION OF REAL PROPERTIES IDENTIFIED AS APNs/PROPERTY OWNERS/NEGOTIATORS (LISTED AS FOLLOWS): 773-142-021 - 51-685 AVENIDA MENDOZA/CWABS, INC. SERIES 2005-12; 773-212-017 - 52-125 AVENIDA RUBIO/JOSE JESUS PEREZ & MARIA ANGELA MUNOZ; 773-325-010 - 52-930 AVENIDA HERRERA/FEDERAL NATIONAL MTG ASSN FNMA; 773-333-027 - 52-830 AVENIDA MENDOZA/LITTON LN SVCNG; 774-082-008 - 53-404 AVENIDA RAMIREZ/CURT L. WHEELER; 774-235-009 - 54-440 AVENIDA RUBIO/FIRST BOSTON ARMT 2005-1; 774-251-020 - 54-421 AVENIDA VELASCO/BANK OF AMERICA SECURITIES 2. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY REGARDING PROPERTY LOCATED AT THE NORTHWEST CORNER OF DUNE PALMS ROAD AND AVENUE 48. PROPERTY OWNER/NEGOTIATOR: COACHELLA VALLEY HOUSING COALITION, JOHN AGUILAR. 3. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTY LOCATED SOUTHEAST OF THE MILES AVENUE AND WASHINGTON STREET INTERSECTION AND NORTH OF THE WHITEWATER STORM CHANNEL. PROPERTY OWNER/ NEGOTIATOR: CP DEVELOPMENT LA QUINTA, LLC, RICHARD OLIPHANT. 4. CONFERENCE WITH AGENCY'S REAL PROPERTY NEGOTIATOR, DOUGLAS R. EVANS, PURSUANT TO GOVERNMENT CODE SECTION 54956.8 CONCERNING POTENTIAL TERMS AND CONDITIONS OF ACQUISITION AND/OR DISPOSITION OF REAL PROPERTIES IDENTIFIED AS APNs/PROPERTY OWNERS/NEGOTIATORS: 770-121-009, 770-123-001, AND 770-124-005, OLD TOWN LA QUINTA, LLC, WELLS MARVIN; 770-123-010 AND -006, NIS YIELD PARTNERS, LP, TED NEWELL; 770-124-009, NISPERO PROPERTIES, BOB HILL; 770-123-002, 003 AND 004, VIRGINIA GARBUTT; 770-124-002 AND -003, JAMES F. KELLY TRUST; AND 770-124-007, MICHAEL FISCHER. RECESS TO CLOSED SESSION RECONVENE AT 4:00 P.M. 002 ON Redevelopment Agency Agenda 2 October 6, 2009 4:00 P.M. 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. CONFIRMATION OF AGENDA APPROVAL OF MINUTES 1 . APPROVAL OF MINUTES OF SEPTEMBER 15, 2009. 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 OCTOBER 6, 2009. 2. APPROVAL OF A MASTER PURCHASE AND SALE AGREEMENT WITH BANK -OWNED PROPERTIES IN PROJECT AREA NO. 1 AND PROJECT AREA NO. 2. 3. ADOPTION OF A RESOLUTION APPROVING A FINANCING AGREEMENT AMONG THE CITY OF LA QUINTA, LA QUINTA REDEVELOPMENT AGENCY, AND THE LA QUINTA HOUSING AUTHORITY AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE SAME, AND A RESOLUTION AGREEING TO PROVIDE STAFF SERVICES FOR THE LA QUINTA HOUSING AUTHORITY. BUSINESS SESSION - NONE STUDY SESSION 1 . DISCUSSION REGARDING SILVERROCK RESORT. CHAIR AND BOARD MEMBERS' ITEMS — NONE 003 Redevelopment Agency Agenda 3 October 6, 20A. 11 OW PUBLIC HEARINGS — NONE . ADJOURNMENT The next regular meeting of the Redevelopment Agency will be held on October 20, 2009, commencing with closed session at 3:00 p.m. and open session at 4:00 p.m. in the City Council Chambers, 78-495 Calle Tampico, La Quinta, CA 92253. DECLARATION OF POSTING I, Veronica Montecino, City Clerk of the City of La Quinta, do hereby declare that the foregoing agenda for the La Quinta Redevelopment Agency meeting of October 6, 2009, was posted on the outside entry to the Council Chamber at 78-495 Calle Tampico and on the bulletin boards at 51-321 Avenida Bermudas and 78-630 Highway 111, on October 2, 2009. DATED: ctober 2, 2009 VERONICA J. NTECINI City of La Quinta, Californ Public Notice Any writings or documents provided to a majority of the Redevelopment Agency regarding any item on this agenda will be made available for public inspection at the City Clerk counter at City Hall located at 78-495 Calle Tampico, La Quinta, California, 92253, during normal business hours. Redevelopment Agency Agenda 4 w„ 004 •� n ^ _ October 6, 2009 � T F 2 V — S CEO OF COUNCIL/RDA MEETING DATE: October 6, 2009 ITEM TITLE: Demand Register Dated October 6, 2009 RECOMMENDATION: It is recommended the Redevelopment Agency Board: Receive and File the Demand Register Dated October 6, 2009 of which $339,756.90 represents Redevelopment Agency Expenditures AGENDA CATEGORY: BUSINESS SESSION CONSENT CALENDAR STUDY SESSION PUBLIC HEARING PLEASE SEE CONSENT CALENDAR ITEM NUMBER 1 ON CITY COUNCIL AGENDA I. «.: 041 006 cEM of rK�� COUNCIURDA MEETING DATE: October 6, 2009 ITEM TITLE: Approval of a Master Purchase and Sale Agreement with Bank -Owned Properties in Project Area No. 1 and Project Area No. 2 RECOMMENDATION: AGENDA CATEGORY: BUSINESS SESSION: _ CONSENT CALENDAR: STUDY SESSION: PUBLIC HEARING: Approve the form of the Master Purchase and Sale Agreement and Escrow Instructions subject to modifications approved by the Executive Director and the Agency Counsel and authorize the Executive Director to execute all documents necessary to complete the Agreement and to accept Grant Deeds in regard to the purchase of bank -owned properties in Project Area No. 1 and No. 2, and rehabilitate the purchased units, and to expend up to $1 million in carrying out the purchase and rehabilitation of the homes. FISCAL IMPLICATIONS: Purchasing and rehabilitating foreclosed homes will result in the expenditure of up to $1,000,000. Funds are appropriated for this purpose in the 2009-2010 Agency budget; $750,000 is appropriated in the Project Area No 1 Low- and Moderate -Income Housing Fund (Account 245-9001-703-51-55) and $250,000 is appropriated in the Project No. 2 Low- and Moderate -Income Housing Fund (Account 246-9002-703-51- 68). BACKGROUND AND OVERVIEW: In May 2009, the Agency received a report regarding the purchase, rehabilitation and sale of foreclosed single-family homes. The Board directed staff to establish acquisition, rehabilitation and disposition parameters, and to identify homes that the Agency may purchase. In an effort to facilitate the sale of bank -owned homes to new owners, to rehabilitate dilapidated homes and create jobs, and to expand the community's supply of affordable housing, the Agency Board directed staff to establish a program wherein the Agency would purchase, rehabilitate and subsequently sell or �06 rent (on a short term basis) foreclosed single-family homes. The program goals are: «.. UW • Alleviate blight by rehabilitating substantially dilapidated homes • Stabilize neighborhoods which have been impacted by foreclosures ■ Rehabilitate properties which may otherwise remain blighted because the private sector is not willing to invest in these properties • To install energy and water saving fixtures, appliances and building systems ■ Create jobs through the rehabilitation effort ■ Sell the rehabilitated homes to low-income households • Increase the community's supply of affordable housing and secure 45-year affordability covenants which assists meeting affordable housing production mandates Since May, staff has been structuring a program to accomplish this endeavor and identifying bank -owned homes that require substantial rehabilitation. Agency staff has completed an inventory of all bank -owned and short sale properties within the Project Areas. Based on this survey, Agency staff has identified potential properties to purchase. There will be other homes that will be for sale in the near future. Discussions with local brokers indicate that the banks are accumulating inventory, but are not releasing this inventory due to current State regulations. However, the brokers anticipate that the banks will be releasing more inventory for sale in October and November of this year. One of the challenges in purchasing foreclosed homes is that when they are offered for sale by lenders, the lenders are seeking quick sale transactions. The Agency's challenge is that its acquisition procedures entail a lengthy process. To date, the Agency generally follows the process outlined below: • Staff identifies real properties and their anticipated cost ■ This inventory is scheduled for Agency Board review and approval ■ Staff is directed to make offers and negotiate terms ■ Offers are made and negotiations ensue ■ Accepted and/or negotiated offers are scheduled for Board review and approval • If approved, purchase and sale contracts are drafted • When accepted by both parties, the purchase and sale contracts are scheduled for Agency Board review and approval ■ If approved, escrow is opened and the sale is consummated. This procedure works for large purchase transactions, but does not work for foreclosed home purchases. In assembling the inventory, staff has updated the inventory list on numerous occasions because foreclosed homes that fit the Agency's parameters often sell to private investors within days after they are offered. This is because these investors do not need to go through an extensive approval process. While this indicates that the foreclosed inventory is selling, staff is finding that many investors are doing minor improvements and then renting the dwellings. The homes are in minimally better condition, which further impacts the surrounding neighborhood. .1.. r) 007 Staff recommends the Agency provide the Executive Director the authority to purchase dilapidated foreclosed homes without going through the process outlined above. Instead, staff recommends the following process: ■ The Agency Board approves a Master Agreement for Purchase and Sale and Escrow Instructions • The Board authorizes the Executive Director to purchase up to $1,000,000 of dilapidated foreclosed homes in the Agency's Redevelopment Project Areas ■ The Board further authorizes the Executive Director to execute the required documents and accept grant deeds ■ When purchased, the Executive Director will then review the inventory with the Agency Board and identify the specific rehabilitation needs for each property. During the May 2009 presentation, staff recommended the Agency budget $4.5 million for this endeavor; this funding level would allow the Agency to purchase and substantially rehabilitate up to 20 units. Instead of seeking this full appropriation, staff is recommending that the Agency use the $1,000,000 in the 2009-2010 Budget that was appropriated for this purpose. These funds will allow the Agency to purchase up to eight homes and initiate this program before expanding the inventory. In this manner, the Board and staff can determine how effective the program is before making a greater commitment. The Agency may in the future decide to sell the rehabilitated homes to low-income households. To facilitate the sales, the Agency would need to fund silent second trust deed mortgage loans that will fund the difference between an affordable first trust deed mortgage and the purchase price. The purchase price will be the cost of the initial purchase and the cost to substantially rehabilitate the dwelling. If the market is not favorable to sell the dwellings, then the homes will be transferred to the Housing Authority and rented to low- and moderate -income households until the market will support sales to low-income households. The attached Master Purchase and Sale Agreement and Escrow Instructions will be used to purchase the foreclosed properties (Attachment 2). This Agreement encompasses the provisions that the City and Agency have used in prior property purchases. It is designed to accommodate individual property purchases, or bulk property purchases (to accommodate bulk purchases from a single lender). FINDINGS AND ALTERNATIVES: The alternatives available to the Agency Board include: 1. Approve the form of the Master Purchase and Sale Agreement and Escrow Instructions subject to modifications approved by the Executive Director and the Agency Counsel and authorize the Executive Director to execute all documents necessary to complete the Agreement and to accept Grant Deeds in regard to 008 the purchase of bank -owned properties in Project Area No. 1 and No. 2, and rehabilitate the purchased units, and to expend up to $1 million in carrying out the purchase and rehabilitation of the homes or 2. Do not approve the Master Purchase and Sale and Escrow Instructions; or 3. Provide staff with alternative direction. Respectfully submitted, DoLglas Rans Assistant 1ty Manager — Development Services Approved for submission by: Thomas P. Genovese, Executive Director Attachment 1. Purchase and Sale Agreement N 1 0 0' ATTACHMENT #1 AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS BY AND BETWEEN ("SELLER") AND LA QUINTA REDEVELOPMENT AGENCY ("BUYER") 267/015610-0046 1 1 1 O 1030822.01 a10/01/09 .I TABLE OF CONTENTS Page 1. PROPERTY......................................................................................................................I 1.1 Improvements....................................................................................................... 1 1.2 Personal Property................................................................................................. 1 2. PURCHASE PRICE......................................................................................................... 2 2.1 Amount.................................................................................................................2 2.2 Deposit..................................................................................................................2 2.3 Balance of Purchase Price.................................................................................... 2 3. ESCROW.........................................................................................................................2 3.1 Opening of Escrow............................................................................................... 2 3.2 Escrow Instructions.............................................................................................. 2 4. TITLE MATTERS........................................................................................................... 3 5. RIGHT OF ENTRY......................................................................................................... 4 6. CLOSE OF ESCROW...................................................................................................... 4 6.1 Close of Escrow; Closing Date............................................................................ 4 6.2 Recordation; Release of Funds and Documents ................................................... 4 7. DELIVERY OF DOCUMENTS REQUIRED FROM BUYER AND SELLER ............. 5 7.1 Buyer's Obligations.............................................................................................. 5 7.2 Seller's Obligations.............................................................................................. 5 8. TITLE INSURANCE POLICY........................................................................................ 5 8.1 Title Policy........................................................................................................... 55 8.2 Payment for Title Policy....................................................................................... 9. REAL PROPERTY TAXES AND ASSESSMENTS...................................................... 6 10. CONDITIONS PRECEDENT TO CLOSING................................................................. 6 10.1 Conditions Precedent to Buyer's Obligations...................................................... 6 10.2 Conditions Precedent to Seller's Obligations....................................................... 7 10.3 Partial Termination of Agreement and Escrow .................................................... 7 11. NOTICE OF DEFAULT.................................................................................................. 8 12. REMEDIES ON DEFAULT........ 13. POSSESSION .............................. 14. ALLOCATION OF COSTS......... 14.1 Buyer's Costs ................... ............................................ 8 ............................................. 9 ................................................ 9 ................................................ 9 267/015610-0046 1030822.01 a10/01/09 /9 1111 Page 14.3 Miscellaneous Costs............................................................................................. 9 16. DAMAGE........................................................................................................................ 9 17. HAZARDOUS MATERIALS......................................................................................... 9 18. COVENANTS OF SELLER.......................................................................................... 10 19. MISCELLANEOUS.......................................................................................................10 19.1 Assignment.........................................................................................................10 19.2 Notices................................................................................................................11 19.3 Fair Meaning...................................................................................................... 11 19.4 Headings.............................................................................................................11 19.5 Choice of Laws; Litigation Matters.................................................................... 11 19.6 Nonliability of Buyer and Seller Officials.......................................................... 11 19.7 Gender; Number................................................................................................. 12 19.8 Survival..............................................................................................................12 19.9 Time of Essence................................................................................................. 12 19.10 Time Period Computations................................................................................. 12 19.11 Waiver or Modification...................................................................................... 12 19.12 Broker's Fees...................................................................................................... 12 19.13 Duplicate Originals............................................................................................. 12 19.14 Severability.........................................................................................................12 19.15 Exhibits...............................................................................................................12 19.16 Authority............................................................................................................ 13 19.17 Entire Agreement; Amendment.......................................................................... 13 EXHIBITS Exhibit A Legal Description of Property Exhibit B Special Escrow Instructions Exhibit C Form of Grant Deed Exhibit D Form of Affidavit of Non -Foreign Entity Exhibit E Bill of Sale 267/01561M046 n1 1030822.01 a10/01/09 -11- 2 AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS THIS AGREEMENT FOR PURCHASE AND SALE AND ESCROW INSTRUCTIONS ("Agreement") is made and entered into as of 2009 ("Effective Date") by and between ("Seller"), and the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Buyer"). RECITALS: A. Seller is the owner of that certain real property located in the City of La Quinta, County of Riverside, State of California, more particularly described in the legal description attached hereto as Exhibit "A" (the "Real Property") comprised of (_) separate parcels (each a "Parcel" and collectively, "Parcels"), with each Parcel improved with a residential dwelling, fixtures and appurtenances (collectively, the "Improvements"). B. Buyer desires to purchase the "Property" (as defined in Section 1.2 below) from Seller, and Seller desires to sell the Property to Buyer, on the terms and conditions set forth herein. C. This Agreement is entered into pursuant to authority conferred on Buyer by Resolution No. 2009- adopted by the City of La Quinta on , 2009. AGREEMENT: NOW, THEREFORE, in consideration of the foregoing recitals and mutual covenants herein contained, the parties hereto agree as follows: 1. PROPERTY. Subject to all of the terms, conditions and provisions of this Agreement, and for the consideration herein set forth, Seller hereby agrees to sell to Buyer and Buyer hereby agrees to purchase from Seller the Real Property, and Seller hereby agrees to sell and Buyer hereby agrees to buy the following: 1.1 Improvements. Seller's interest in and to the Improvements and all tenements, hereditaments and appurtenances thereto, subject to the "Permitted Exceptions" (as defined in Section 8.1 below); 1.2 Personal Property. Any and all fixtures and fittings that are attached to the Real Property and Improvements, all existing electrical, mechanical, lighting, plumbing and heating fixtures, ceiling fans, fireplace inserts, gas logs and grates, solar systems, built-in appliances, window and door screens, awnings, shutters, window coverings, attached floor coverings, television antennas, private integrated telephone systems, air coolers/conditioners, pool/spa equipment, garage door openers/remote controls, mailbox, in -ground landscaping, trees/shrubs, water softeners, water purifiers, and security systems/alarms (collectively, the "Personal Property"). 267/015610-0046 1030822.01 a10/01/09 -1- ,r• 013 The Real Property, the Improvements, and the Personal Property are hereinafter collectively referred to as the "Property." 2. PURCHASE PRICE. 2.1 Amount. The purchase price which Seller agrees to accept and Buyer agrees to pay for the Property is the sum of DOLLARS ($ ) ("Purchase Price"). The Purchase Price shall be allocated among the Parcels comprising the Property as follows: Parcel 1 (insert common street address here) $ Parcel 2 (insert common street address here) $ Parcel 3 (insert common street address here) $ Parcel 4 (insert common street address here) $ Parcel 5 (insert common street address here) $ 2.2 Deposit. Buyer shall deposit the sum of DOLLARS ($ ), calculated on the basis of three percent (3%) of the Purchase Price, with the "Escrow Holder" (as defined in Section 3.1 below) within ten (10) days after the Effective Date. The Deposit and all accrued interest thereon shall be credited towards the Purchase Price in the event the transaction closes. If Buyer terminates the "Escrow" (as defined in Section 3.1 below) and this Agreement, the Deposit and all interest accrued thereon shall be returned to Buyer. 2.3 Balance of Purchase Price. The Buyer shall deposit the balance of the Purchase Price with the Escrow Holder, plus Buyer's closing costs and subject to adjustment for prorations and other charges, in good funds prior to the "Close of Escrow" (as defined in Section 6.1 below). 3. ESCROW. 3.1 Opening of Escrow. Closing of the sale of the Property shall take place through an escrow ("Escrow") to be established within three (3) business days after the execution of this Agreement by the parties hereto, with ("Escrow Holder") at its office located at . The opening of the Escrow (the "Opening of Escrow") shall be deemed to be the date that a fully executed copy of this Agreement is delivered to the Escrow Holder. Escrow Holder is instructed to notify Buyer and Seller in writing of the date of the Opening of Escrow. 3.2 Escrow Instructions. This Agreement, once deposited in Escrow, shall constitute the joint escrow instructions of Buyer and Seller to Escrow Holder. Additionally, if Escrow Holder so requires, Buyer and Seller agree to execute the standard preprinted form of escrow instructions that Escrow Holder customarily requires in real property escrows administered by it. In the event of any conflict or inconsistency between Escrow Holder's standard instructions and 267/015610-0046 O,� 9 1030822.01 a10/01/09 -2- the provisions of this Agreement, the provisions of this Agreement shall supersede and be controlling. The parties additionally agree to the Escrow Holder's additional supplemental instructions contained in Exhibit `B" attached hereto. 4. TITLE MATTERS. Buyer shall obtain a preliminary title report prepared by ("Title Company") describing the state of title of each of the Parcels comprising the Property together with copies of all underlying documents (each a "Preliminary Title Report" and collectively, the "Preliminary Title Reports"). Buyer may, at its sole cost and expense, obtain a current survey of one or more of the Parcels (each a "Survey" and collectively, the "Surveys"). Notwithstanding anything herein to the contrary, Seller shall be obligated to remove all monetary encumbrances against the Property excluding non -delinquent real property taxes (except as otherwise provided in Section 9 below). Buyer shall notify Seller in writing of any objections Buyer may have to title exceptions contained in the Preliminary Title Reports or matters shown on the Surveys (if Buyer has obtained) no later than the date which is fifteen (15) days after the later of (i) its receipt of the Preliminary Title Reports or (ii) its receipt of the Surveys ("Buyer's Objection Notice"). Buyer's approval or disapproval of the matters set forth in the Preliminary Title Reports (and the Surveys, if applicable) may be granted or withheld in Buyer's sole and absolute discretion. Buyer's failure to provide Seller with a Buyer's Objection Notice within said period shall constitute Buyer's approval of all exceptions to title shown on the Preliminary Title Reports and all matters shown on the Surveys (if Buyer has obtained). Seller shall have a period of five (5) days after receipt of Buyer's Objection Notice in which to deliver written notice to Buyer ("Seller's Notice") of Seller's election to either (i) agree to remove the objectionable items on the Preliminary Title Reports or Surveys prior to the Close of Escrow, or (ii) decline to remove any such title exceptions or Survey matters and terminate Escrow and the obligations of Buyer and Seller to purchase and sell the Property under this Agreement with respect to the Parcel containing the objectionable items, and in which event the provisions of Section 10.3 below shall apply. Seller's failure to provide Buyer with Seller's Notice within said period shall constitute Seller's election to remove the objectionable items on the Preliminary Title Reports. If Seller notifies Buyer of its election to terminate rather than remove the objectionable items on the Preliminary Title Reports or Surveys, Buyer shall have the right, by written notice delivered to Seller within five (5) days after Buyer's receipt of Seller's Notice, to agree to accept the Property subject to the objectionable items with respect to such Parcel, in which event Seller's election to. terminate shall be of no effect, and Buyer shall take title at the Close of Escrow subject to such objectionable items without any adjustment to or credit against the Purchase Price. All exceptions to title shown on the Preliminary Title Reports, other than those which Seller may agree to remove pursuant to this Section 4, shall be deemed to have been approved by Buyer unless Seller is notified otherwise in writing. Upon the issuance of any amendment or supplement to any of the Preliminary Title Reports which adds additional exceptions, including any survey exceptions, the foregoing right of review and approval shall also apply to said amendment or supplement. The process set forth above for Buyer's review and Seller's response shall apply to any review and response with respect to any amendment or supplement to the Preliminary Title Reports, and the Closing shall be extended for such period as is necessary to allow for that review and response process to be completed. 267/015610-0046 „ 1030822.01 a10/01/09 -3- 01,5 5. RIGHT OF ENTRY. Beginning on the Effective Date up to and including the Closing Date, Seller grants Buyer, its agents, contractors, employees, and representatives, the right to enter into and upon the Property at reasonable times for the purposes related to Buyer's inspection and proposed rehabilitation of the Property. Buyer shall not disturb the physical condition of the Property, or do any testing of the Property without the prior written consent of Seller, which consent shall not be unreasonably withheld or delayed. Any costs, expenses, or charges incurred or related to Buyer's activities under this right of entry shall be at the sole cost and expense of Buyer and at no cost and expense to Seller. Buyer shall, at its own cost and expense entirely, repair any damage to the Property resulting from any such entry and shall restore the Property to its condition prior to such entry. Buyer agrees to indemnify, defend and hold Seller and the Property harmless from any and all claims, liabilities, liens, actions, judgments, costs, expense, or charges (including without limitation attorneys' fees and costs) arising from or connected or related in any way to the right of entry granted under this Agreement. 6. CLOSE OF ESCROW. 6.1 Close of Escrow; Closing Date. Provided that all of the conditions of this Agreement precedent to the "Close of Escrow" (as hereinafter defined) as set forth in Section 10 below have been satisfied (or waived by the appropriate party) prior to or on the Closing Date, the Closing of this transaction for the sale and purchase of the Property shall take place on , 20_ ("Outside Closing Date"). Notwithstanding the foregoing, if Buyer and Seller agree to advance the Closing, and so long as all of "Buyer's Conditions to Closing" and all of "Seller's Conditions to Closing" (as those terms are defined in Section 10) have been satisfied (or waived by the appropriate party), Seller and Buyer may elect to authorize the Closing before the Outside Closing Date. The terms "Close of Escrow", "Closing Date" and the "Closing" are used herein to mean the time Seller's grant deed conveying fee title to the Property to Buyer is recorded in the Official Records of the Office of the County Recorder of Riverside ("Official Records"). If Escrow is not in a condition to close by the Outside Closing Date, either party not then in default hereunder may, upon five (5) days advance written notice to the other party and Escrow Holder, elect to terminate this Agreement and the Escrow. No such termination shall release either party then in default from liability for such default. If neither party so elects to terminate this Agreement and the Escrow, Escrow Holder shall close the Escrow as soon as possible. 6.2 Recordation; Release of Funds and Documents. 6.2.1 Escrow Holder is directed, on the Closing Date, to record in the Official Records, the following documents in the order listed: (i) the grant deed (in the form attached hereto as Exhibit "C") transferring title to the Property to Buyer ("Grant Deed"); and (ii) such other and further documents as may be directed jointly by Buyer and Seller. 6.2.2 Upon the Closing, Escrow Holder shall deliver (i) the Purchase Price to Seller, less any amount to Closing costs, including property taxes and/or assessments allocable to Seller pursuant to Section 9 below, and (ii) conformed copies of all recorded documents to both Buyer and Seller. 267/015610-0046 l�4_ A� ^ 1030822.01 a10/01/09 _b 6.2.3 Escrow Holder is authorized to request from Seller a fully executed copy of the Grant Deed at any time prior to the Close of Escrow, for submission to Buyer for the sole purpose of Buyer's acceptance of same, in order to place such Grant Deed in a form ready for recording at the Close of Escrow. If Buyer receives such an executed Grant Deed prior to Close of Escrow, Buyer is authorized only to affix its acceptance thereon, or perform such other acts as are required to place the Grant Deed in a recordable form, but may not record the Grant Deed at any time prior to the Close of Escrow. DELIVERY OF DOCUMENTS REQUIRED FROM BUYER AND SELLER. 7.1 Buyer's Obligations. Buyer agrees that on or before 5:00 p.m. of the last business day immediately preceding the Closing Date, Buyer shall deposit or cause to be deposited with Escrow Holder the following: (a) the balance of the Purchase Price; and (b) any and all additional funds, instruments or other documents required from Buyer (executed and acknowledged where appropriate) as may be reasonably necessary in order for the Escrow Holder to comply with the terms of this Agreement and consummate the transaction. 7.2 Seller's Obligations. Seller agrees that on or before 5:00 p.m. of the last business day immediately preceding the Closing Date, Seller shall deposit or cause to be deposited with Escrow Holder each of the following: (a) the executed and acknowledged Grant Deed, subject only to the Permitted Exceptions (defined hereafter), and any prior submission to Buyer for acceptance, as provided in Paragraph 6.2.3 above; (b) a Certificate of Non -Foreign Status (the "Non -Foreign Affidavit") executed and acknowledged by Seller in the form attached hereto as Exhibit "D"; (c) a Bill of Sale (the "Bill of Sale") executed by Seller in the form attached hereto as Exhibit"E"; and (d) all other funds, items, and instruments required from Seller (executed and acknowledged where appropriate) as may be reasonably necessary in order for the Escrow Holder to comply with the provisions of this Agreement and consummate the transaction. 8. TITLE INSURANCE POLICY. 8.1 Title Policy. At the Closing Date, the Title Company, as insurer, shall issue a CLTA owner's standard coverage policy of title insurance ("Title Policy"), in favor of Buyer, as insured, for each Parcel comprising the Property, with liability in the amount of the Purchase Price allocated to such Parcel in Section 2.1 above, subject only to the following (the "Permitted Exceptions"): 267/015610-0046 5- •tiy /� 1030822.01 a10/01/09 -n� (a) non -delinquent real property taxes, subject to Seller's obligations to pay certain taxes pursuant to Section 9 below; (b) covenants, conditions, restrictions and reservations of record that do not interfere with the Buyer's proposed use of the Property, as determined in the sole and absolute discretion of Buyer; (c) easements or rights -of -way over the Property for public or quasi -public utility or public street purposes; (d) title exceptions approved or deemed approved by Buyer pursuant to Section 4 above; (e) any other exceptions approved by Buyer; and (f) the standard printed conditions and exceptions contained in the CLTA standard owner's policy of title insurance regularly issued by the Title Company. 8.2 Payment for Title Policy. Seller shall be responsible for the charges for the Title Policy with coverage up to the amount of the Purchase Price. Buyer shall pay any additional amount charged by Title Company for any additional coverage or endorsements it requests. In connection therewith, Buyer may, at its election, request an ALTA extended policy of title insurance and Buyer shall pay for the incremental cost of the extended coverage above and beyond the standard coverage. Buyer shall pay for the Surveys, if obtained. 9. REAL PROPERTY TAXES AND ASSESSMENTS. Upon Buyer's acquisition of fee title to the Property, the Property will be exempt from the payment of property taxes due to Buyer's status as a public agency. Seller shall be responsible for paying (through Escrow at Closing) all real and personal property taxes and assessments which are of record as of the Closing Date and/or have accrued against the Property prior to (and including) the Closing Date (notwithstanding whether such taxes and/or assessments are due and payable as of the Closing Date). Buyer hereby acknowledges and agrees that Buyer is obligated to completely payoff, at Closing, any amounts outstanding under the City of La Quinta Assessment District 2000-1 with respect to any of the Parcels. Seller shall be responsible for paying for all real or personal property taxes or assessments assessed against the Property after the Closing for any period prior to the Closing. 10. CONDITIONS PRECEDENT TO CLOSING. 10.1 Conditions Precedent to Buyer's Obligations. The obligations of Buyer under this Agreement to purchase the Property and close the Escrow shall be subject to the satisfaction or signed written waiver by Buyer of each and all of the following conditions precedent (collectively, "Buyer's Conditions to Closing"): (a) on the Closing Date, the Title Company shall be irrevocably committed to issue the Title Policy pursuant to Section 8.1 above insuring fee title to the Property as being vested in Buyer, subject only to the Permitted Exceptions; 267/015610-0046 1030822.01 a10/O1/09 -6- .. n18 (b) Escrow Holder holds all instruments and funds required for the Closing and will deliver to Buyer the instruments and funds, if any, accruing to Buyer pursuant to this Agreement; (c) except as otherwise permitted by this Agreement, all representations and warranties by the Seller in this Agreement shall be true on and as of the Closing Date as though made at that time and all covenants of Seller pursuant to this Agreement shall have been fulfilled by the Closing Date; and (d) Seller is not in material default of any term or condition of this Agreement. In the event that any of Buyer's Conditions to Closing are not satisfied, deemed satisfied, or waived in a writing signed by Buyer prior to the expiration of the applicable period for satisfaction or waiver, Buyer may terminate this Agreement and the Deposit with all interest accrued thereon shall be returned to Buyer. 10.2 Conditions Precedent to Seller's Obligations. The obligations of Seller under this Agreement shall be subject to the satisfaction or signed written waiver by Seller of each and all of the following conditions precedent ("Seller's Conditions to Closing"): (a) Escrow Holder holds the Purchase Price and all other instruments and funds required for the Closing and will deliver to Seller the instruments and funds, including but not limited to the Purchase Price (less any offsets against Seller specifically provided for hereunder) accruing to Seller pursuant to this Agreement; (b) except as otherwise permitted by this Agreement, all representations and warranties by the Buyer in this Agreement shall be true on and as of the Closing Date as though made at that time and all covenants of Buyer pursuant to this Agreement shall have been fulfilled by the Closing Date; and (c) Buyer is not in material default of any term or condition of this Agreement. In the event that any of Seller's Conditions to Closing are not satisfied, deemed satisfied, or waived in a writing signed by Seller prior to the expiration of the applicable period for satisfaction or waiver, Seller may terminate this Agreement and the Deposit with all interest accrued thereon shall either be returned to Buyer or retained by Seller, as provided in Section 12 below. 10.3 Partial Termination of Agreement and Escrow. In the event Seller or Buyer elects to terminate the Escrow and this Agreement with respect to a failed title objection (as provided in Section 4 above), the failure of a Seller's or Buyer's Condition to Closing (as provided in Sections 10.1 and 10.2 above), or in connection with a "Casualty" (as defined in Section 16 below), which relates to one or more of the Parcels, but not all of the Parcels comprising the Property, the parties shall (i) continue the Escrow and close the transaction with respect to the unaffected Parcels, omitting any such affected Parcel, (ii) reduce the Purchase Price by the 267/015610-0046 103082201 a10/O1/09 -7 ^» !' 019 amount allocated to such affected Parcel, and (iii) apply the entire Deposit to such reduced Purchase Price. 11. NOTICE OF DEFAULT. Upon a default by either Seller or Buyer under this Agreement, the non -defaulting party shall notify the defaulting party and Escrow Holder in writing of such default. If the non -defaulting party gives such notice, the notice shall set forth with specificity the alleged default and the defaulting party shall have ten (10) days to cure the default. If the defaulting party does not cure the default within ten (10) days of the receipt of such notice, the non -defaulting party may elect to terminate this Agreement and pursue the remedies provided in Section 12 below. 12. REMEDIES ON DEFAULT. (a) BUYER'S DEFAULTS; SELLER'S REMEDIES. IN THE EVENT THE CLOSING AND THE CONSUMMATION OF THE TRANSACTION HEREIN CONTEMPLATED DO NOT OCCUR AS HEREIN PROVIDED BY REASON OF ANY BREACH OR DEFAULT BY BUYER, BUYER AND SELLER AGREE THAT IT WOULD BE DIFFICULT AND IMPRACTICAL TO DETERMINE THE DAMAGES TO SELLER. ACCORDINGLY, BUYER AND SELLER HAVE AGREED TO FIX AS LIQUIDATED DAMAGES THAT PORTION OF THE DEPOSIT ATTRIBUTABLE TO THE PARCEL(S) AFFECTED BY SUCH BREACH OR DEFAULT, WHICH AMOUNTS SHALL BE RETAINED BY SELLER AS LIQUIDATED DAMAGES, SHALL CONSTITUTE SELLER'S SOLE AND EXCLUSIVE REMEDY FOR SUCH DEFAULT BY BUYER HEREUNDER, AND SELLER WAIVES ANY AND ALL RIGHT TO SPECIFIC PERFORMANCE. BUYER AND SELLER SPECIFICALLY ACKNOWLEDGE THEIR AGREEMENT TO THE FOREGOING LIQUIDATED DAMAGES PROVISION BY INITIALING THIS SECTION IN THE APPROPRIATE SPACES PROVIDED. SELLER'S INITIALS: BUYER'S INITIALS: (b) SELLER'S DEFAULTS; BUYER'S REMEDIES. IN THE EVENT THE CLOSING AND THE CONSUMMATION OF THE TRANSACTION HEREIN CONTEMPLATED DO NOT OCCUR BY REASON OF ANY BREACH OR DEFAULT BY SELLER, BUYER SHALL BE ENTITLED TO: (1) TERMINATE THIS AGREEMENT WITH RESPECT TO THE PARCEL(S) AFFECTED BY SUCH BREACH OR DEFAULT, IN WHICH EVENT ESCROW HOLDER SHALL IMMEDIATELY RETURN TO BUYER THE DEPOSIT AND ANY INTEREST ACCRUED THEREON ATTRIBUTABLE TO THE PARCEL(S) AFFECTED BY SUCH BREACH OR DEFAULT, AND BUYER SHALL HAVE THE RIGHT TO PURSUE SELLER FOR DAMAGES OR (II) THE RIGHT TO PURSUE SPECIFIC PERFORMANCE OF THIS AGREEMENT. SELLER'S INITIALS: BUYER'S INITIALS: 267/015610-0046 1030822.01 a10/O1/09 -8- �� '' 020 13. POSSESSION. Possession of the Property, free from all tenancies, parties in possession and occupants, shall be delivered by Seller to Buyer on the Closing Date, subject only to the Permitted Exceptions. 14. ALLOCATION OF COSTS. 14.1 Buyer's Costs. Buyer shall pay: (i) one-half (1/2) of any escrow fees or similar charges of Escrow Holder, (ii) the full premium cost for any endorsements to the Title Policy, (iii) the premium for any ALTA coverage over and above the cost of the CLTA Owner's Title Policy, (iv) the costs of any Survey, inspection or report requested by Buyer, and (v) the cost of recording the Grant Deed and any other recording charges. 14.2 Seller's Costs. Seller shall pay: (i) the premium cost of the Title Policy (CLTA Owner's only), (ii) the documentary transfer tax and City transfer tax (if any) due on the transfer of the Property, and (iii) one-half (1/2) of any escrow fees or similar charges of Escrow Holder. 14.3 Miscellaneous Costs. Except to the extent otherwise specifically provided herein, all other expenses incurred by Seller and Buyer with respect to the negotiation, documentation and closing of this transaction, including, without limitation, attorneys' fees, shall be borne and paid by the party incurring same. 15. CONDEMNATION. In the event that, prior to the Close of Escrow, any governmental entity (other than the City of La Quinta) shall commence any proceedings of or leading to eminent domain or similar type proceedings to take all or any portion of the Property, Buyer or Seller shall promptly meet and confer in good faith to evaluate the effect of such action on the purposes of this Agreement. 16. DAMAGE. If any Parcel comprising the Property is damaged or destroyed by any casualty (a "Casualty") after the Effective Date, but prior to the Closing, and the costs to repair or restore same shall exceed Fifteen Thousand Dollars ($15,000.00) (as reasonably determined by Seller and Buyer), then Buyer shall have the option to terminate this Agreement with respect to such damaged Parcel(s) by delivery of a Termination Notice to Seller prior to the Closing. In such case, the provisions of Section 10.3 above shall apply. In the alternative, if a Casualty shall occur prior to the Closing, and if Buyer does not so exercise its right to terminate, then Buyer shall proceed with the Closing and upon consummation of the transaction herein provided, Seller shall assign to Buyer all claims of Seller under or pursuant to any applicable casualty insurance coverage and all proceeds from any such casualty insurance received by Seller on account of any such Casualty, the damage from which shall not have been repaired by Seller prior to the Closing, and provide Buyer with a credit against the Purchase Price in an amount equal to the deductible under such casualty insurance coverage. Seller agrees to execute any documents reasonably necessary to effectuate the provisions of this Section 16. 17. HAZARDOUS MATERIALS. To the best of Seller's knowledge (without any obligation of Seller to further investigate), the Property has not at any time been used for the purposes of storing, manufacturing, releasing or dumping Hazardous Materials. For purposes of this Agreement, the term "Hazardous Materials" shall mean (1) hazardous wastes, hazardous materials, hazardous substances, hazardous constituents, toxic substances or related materials, 267/015610-0046 � 1030822.01 a10/01/09 -9 i whether solids, liquids or gases, including, but not limited to, substances deemed as "hazardous wastes," "hazardous materials," "hazardous substances," "toxic substances," "pollutants," "contaminants," "radioactive materials," or other similar designations in, or otherwise subject to regulation under, the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended ("CERCLA"), 42 U.S.C. § 9601 et seq.; the Toxic Substance Control Act ("TSCA"), 15 U.S.C. § 2601 et seq.; the Hazardous Materials Transportation Act, 49 U.S.C. § 1802; the Resource Conservation and Recovery Act ("RCRA"), 42 U.S.C. § 9601, et seq.; the Clean Water Act ("CWA"), 33 U.S.C. § 1251 et seq.; the Safe Drinking Water Act, 42 U.S.C. § 300 et seq.; the Clean Air Act ("CAA"), 42 U.S.C. § 7401 et seq.; the Hazardous Waste Control Law, California Health and Safety Code § 25025 et seq., the Carpenter -Presley -Tanner Hazardous Substance Account Act, California Health and Safety Code, Division 20, Chapter 6.8, the Hazardous Materials Release Response Plans and Inventory Act, California Health and Safety Code, Division 20, Chapter 6.95, The Underground Storage of Hazardous Substances Act, California Health and Safety Code, Division 20, Chapter 6.7, the Porter -Cologne Act, California Water Code § 13050 et seq. and in any permits, licenses, approvals, plans, rules, regulations or ordinances adopted, or other criteria and guidelines promulgated pursuant to the preceding laws or other similar federal, state or local laws, regulations, rules or ordinances now or hereafter in effect relating to environmental matters (collectively the "Environmental Laws"); and (ii) any other substances, constituents or wastes subject to any applicable federal, state or local law, regulation, ordinance or common law doctrine, including any Environmental Law, now or hereafter in effect, including, but not limited to, (A) petroleum, (B) refined petroleum products, (C) waste oil, (D) waste aviation or motor vehicle fuel, (E) asbestos, (F) lead in water, paint or elsewhere, (G) radon, (H) polychlorinated biphenyls (PCB's) and (I) urea formaldehyde. 18. COVENANTS OF SELLER. Seller agrees that during the period between the Effective Date of this Agreement and the Closing Date: (a) Seller shall maintain the Property in not less than the state of repair as that existing on the Effective Date (excepting ordinary wear and tear); (b) Seller shall not convey, grant, lease, assign, mortgage, hypothecate, encumber, or otherwise transfer (on or off record) the Property or any interest therein; (c) Prior to Closing, Seller shall maintain Seller's existing insurance on the Property; and (d) Prior to the Closing, Seller shall not alter the physical condition of the Property or introduce or release, or permit the introduction or release, of any Hazardous Materials in, from, under, or on the Property. 19. MISCELLANEOUS. 19.1 Assignment. This Agreement shall be binding upon and shall inure to the benefit of Buyer and Seller and their respective heirs, personal representatives, successors and assigns. Neither party to this Agreement may assign this Agreement or any interest or right hereunder or under the Escrow without the prior written consent and approval of the other party, which consent and approval shall not be unreasonably withheld. No provision of this Agreement is 267/015610-0046 1030822.01 a10/01/09 -10- ^ " 022 intended nor shall in any way be construed to benefit any party not a signatory hereto or to create a third party beneficiary relationship. 19.2 Notices. All notices under this Agreement shall be effective upon personal delivery, via facsimile so long as the sender receives confirmation of successful transmission from the sending machine, or three (3) business days after deposit in the United States mail, registered, certified, postage fully prepaid and addressed to the respective parties as set forth below or as to such other address as the parties may from time to time designate in writing: To Seller: Facsimile No.: (_) To Buyer: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Facsimile No.: (760) 777-7101 Copy to: Rutan & Tucker, LLP 611 Anton Boulevard, Suite 1400 Costa Mesa, California 92628-1950 Attn: M. Katherine Jenson, Esq. Facsimile No.: (714) 546-9035 19.3 Fair Meaning. This Agreement shall be construed according to its fair meaning and as if prepared by both parties hereto.' 19.4 Headings. The headings at the beginning of each numbered Section of this Agreement are solely for the convenience of the parties hereto and are not a part of this Agreement. 19.5 Choice of Laws; Litigation Matters. This Agreement shall be governed by the internal laws of the State of California and any question arising hereunder shall be construed or determined according to such law. The Municipal and Superior Courts of the State of California in and for the County of Riverside, or such other appropriate court in such county, shall have exclusive jurisdiction of any litigation between the parties concerning this Agreement. Service of process on Buyer shall be made in accordance with California law. Service of process on Seller shall be made in any manner permitted by California law and shall be effective whether served inside or outside California. 19.6 Nonliability of Buyer and Seller Officials. No officer, official, member, employee, agent, or representative of Buyer or Seller shall be liable for any amounts due hereunder, and no judgment or execution thereon entered in any action hereon shall be personally enforced against any such officer, official, member, employee, agent, or representative. 267/015610-0046 10310822.01 a10101/09 -11- .. ^ 023 19.7 Gender, Number. As used in this Agreement, masculine, feminine, and neuter gender and the singular or plural number shall be deemed to include the others wherever and whenever the context so dictates. 19.8 Survival. This Agreement and all covenants to be performed after the Closing, and, except as otherwise set forth herein, all representations and warranties contained herein, shall survive the Closing Date and shall remain a binding contract between the parties hereto. 19.9 Time of Essence. Time is of the essence of this Agreement and of each and every term and provision hereof, it being understood that the parties hereto have specifically negotiated the dates for the completion of each obligation herein. 19.10 Time Period Computations. All periods of time referred to in this Agreement shall include all Saturdays, Sundays and California state or national holidays unless the reference is to business days, in which event such weekends and holidays shall be excluded in the computation of time and provide that if the last date to perform any act or give any notice with respect to this Agreement shall fall on a Saturday, Sunday or California state or national holiday, such act or notice shall be deemed to have been timely performed or given on the next succeeding day which is not a Saturday, Sunday or California state or national holiday. 19.11 Waiver or Modification. A waiver of a provision hereof, or modification of any provision herein contained, shall be effective only if said waiver or modification is in writing, and signed by both Buyer and Seller. No waiver of any breach or default by any party hereto shall be considered to be a waiver of any breach or default unless expressly provided herein or in the waiver. 19.12 Broker's Fees. Seller and Buyer represent and warrant to the other that neither Buyer nor Seller has employed any broker and/or finder to represent its interest in this transaction. Each party agrees to indemnify and hold the other free and harmless from and against any and all liability, loss, cost, or expense (including court costs and reasonable attorney's fees) in any manner connected with a claim asserted by any individual or entity for any commission or finder's fee in connection with the conveyance of the Property arising out of agreements by the indemnifying party to pay any commission or finder's fee. 19.13 Duplicate Originals. This Agreement may be executed in any number of duplicate originals or counterparts, all of which shall be of equal legal force and effect. 19.14 Severability. If any term, covenant or condition of this Agreement or the application thereof to any person, entity, or circumstance shall, to any extent, be invalid or unenforceable, the remainder of this Agreement, or the application of such term, covenant, or condition to persons, entities, or circumstances other than those as to which it is held invalid or unenforceable, shall not be affected thereby and each term, covenant or condition of this Agreement shall be valid and enforceable to the fullest extent permitted by law. 19.15 Exhibits. The following exhibits are attached hereto and incorporated herein by this reference: 267/015610-0046 1030822.01 a10/01/09 _ 12_ 024 Exhibit "A" Legal Description of Property Exhibit `B" Special Escrow Instructions Exhibit "C" Grant Deed Exhibit "D" Non -Foreign Affidavit Exhibit "E" Bill of Sale 19.16 Authoritv. The person(s) executing this Agreement on behalf of each of the parties hereto represent and warrant that (i) such party is duly organized and existing, (ii) they are duly authorized to execute and deliver this Agreement on behalf of said party, (iii) by so executing this Agreement such party is formally bound to the provisions of this Agreement, and (iv) the entering into this Agreement does not violate any provision of any other agreement to which such party is bound. 19.17 Entire Agreement: Amendment. Except as set forth above, this Agreement and the exhibits incorporated herein contain the entire agreement of Buyer and Seller with respect to the matters contained herein, and no prior agreement or understanding pertaining to any such matter shall be effective for any purpose. No provisions of this Agreement may be amended or modified in any manner whatsoever except by an agreement in writing signed by duly authorized officers or representatives of each of the parties hereto. [END -- SIGNATURE PAGE FOLLOWS] 267/015610-0046 1030822 01 a10/O1/09 -13- 025 IN WITNESS WHEREOF, Buyer and Seller each hereby represents that it has read this Agreement, understands it, and hereby executes this Agreement to be effective as of the day and year first written above. ATTEST: Agency Secretary APPROVED AS TO FORM: Agency Counsel SELLER: BUYER: LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Thomas P. Genovese, Executive Director [end of signatures] 267/015610-0046^.. ^ 1030822.01 a10/01/09 -14- n/7 ^ agrees to act as Escrow Holder in accordance with the terms of this Agreement that are applicable to it. By: _ Name: Its: 267/015610-0046 021 1030822.01 a10/01/09 - '+ EXHIBIT "A" LEGAL DESCRIPTION OF PROPERTY The real property and improvements thereon situated in the State of California, County of Riverside, City of La Quinta, are described as follows: Parcel 1 [Insert Common Street Address here] [add legal description here] Parcel 2 [Insert Common Street Address here] [add legal description here] Parcel 3 [Insert Common Street Address herel[add legal description here] 267/015610-0046 . 1030822.01 a10/01/09 �` ^ 028 EXHIBIT "B" SPECIAL ESCROW INSTRUCTIONS PRORATIONS AND/OR ADJUSTMENTS: Escrow Holder is authorized and instructed to prorate and/or make adjustments on the following items as of the close of escrow date: TAXES ON REAL PROPERTY: Prorate taxes, including all tax bill items, based on the figures furnished you by the Title Company. Seller to pay prior to delinquency, any supplemental tax bills, which taxes are a lien on the Real Property being conveyed and you are not to be concerned herewith. Refund, if any, from the Riverside County Tax Collector, for refund of taxes Buyer is being debited for herein, is to be handled outside of escrow. Escrow Holder, its officers and employees are relieved of all responsibility and liability in connection therewith. 267/015610-0046 029 ^ ^ 1030822.01 a10/01/09 ^'• L 9 EXHIBIT "C" FORM OF GRANT DEED [SEE ATTACHED) 267/015610-0046 1030822,01 a10/01/09 � " 030 RECORDING REQUESTED BY AND: WHEN RECORDED MAIL TO: La Quints Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director MAIL TAX STATEMENTS TO: La Quinta Redevelopment Agency 78-495 Calle Tampico La Quinta, CA 92253 Attn: Executive Director Space above this line for Recorder's Use Exempt from Recordation Fee per Gov. Code § 27383 DOCUMENTARY TRANSFER TAX $0.00 [PUBLIC ENTITY TRANSFEREE[ .... Computed on the consideration or value of property conveyed; OR .... Computed on the consideration or value less liens or encumbrances remaining at time of sale. Signature of Declarant or Agent determining tax — Firm Name GRANT DEED Order No. _ Escrow No. FOR VALUABLE CONSIDERATION, receipt of which is hereby acknowledged, hereby grants, conveys, and transfers to the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic, the real property in the County of Riverside, State of California, described on Attachment No. 1 attached hereto and incorporated herein by reference (the "Property"). [continued on following page] 31 267/015610-0046 1030822.01 a09/22/08 Page I of 4 The Property conveyed hereby is subject to (i) non -delinquent general and special real property taxes; and (ii) matters of record. "SELLER" By: Its: L-fi 267/015610-0046 •• n 3 2 1030822.01 a0922/08 Page 2 of 4 STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, Notary Public, personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Notary Public [SEAL] STATE OF CALIFORNIA ) ss. COUNTY OF ) On before me, Notary Public, personally appeared , proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. [SEAL] Notary Public 267/015610-0046 ft..^ 1030822.01 a09/22/08 Page 3 of 4 0-33 CERTIFICATE OF ACCEPTANCE This Certificate of Acceptance is to certify that the interest in real property conveyed by the grant deed dated , from ("Grantor"), to the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Grantee"), is hereby accepted by order of the LA QUINTA REDEVELOPMENT AGENCY pursuant to authority conferred on by Resolution No. 2009- adopted by the Grantee's Board of Directors on 2009, and Grantee hereby consents to recordation thereof by its duly authorized officer. "GRANTEE" LA QUINTA REDEVELOPMENT AGENCY Thomas P. Genovese, Executive Director STATE OF CALIFORNIA ) COUNTY OF RIVERSIDE ) ss. CITY OF LA QUINTA ) On , before me, , Notary Public, personally appeared THOMAS P. GENOVESE, proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) is/are subscribed to the within instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized capacity(ies), and that by his/her/their signature(s) on the instrument the person(s) or the entity upon behalf of which the person(s) acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. [SEAL] Notary Public 267/015610-0046 ^ 334 1030822.01 a09/22/08 Page 4 of 4 ATTACHMENT NO. 1 TO GRANT DEED LEGAL DESCRIPTION OF REAL PROPERTY THE LAND REFERRED TO HEREIN BELOW IS SITUATED IN THE CITY OF LA QUINTA, COUNTY OF RIVERSIDE, STATE OF CALIFORNIA, AND IS DESCRIBED AS FOLLOWS: 267/015610-0046 1030822.01 al0/01/09 Attachment 1 to Grant Deed •,,^ 035 EXHIBIT "D" AFFIDAVIT OF NON -FOREIGN ENTITY TO: LA QUINTA REDEVELOPMENT AGENCY ("Buyer") The Internal Revenue Code of 1954 ("Code") (26 U.S.C. Sections 1445, 7701) provides that a transferee of a U.S. real property interest must withhold tax if the transferor is a foreign person. To inform the transferee that withholding of tax is not required upon transfer of that certain U.S. real property interest described in Exhibit "A" to the Agreement for Purchase and Sale and Escrow Instructions dated , 20_, and incorporated herein by reference ("Property"), that the undersigned ("Seller") hereby certifies the following: 1. Seller is not a foreign corporation, foreign partnership, foreign trust or foreign estate (as those terms are defined in the Internal Revenue Code and Income Tax Regulations); and 2. The U.S. taxpayer identification number for Seller is ; and 3. The address for mailing purposes of Seller is: and 4. Seller understands that this certification may be disclosed to the Internal Revenue Service by Buyer and that any false statement contained herein could be punished by fine, imprisonment, or both. Under penalty of perjury, I declare that I have examined this Certification and to the best of my knowledge and belief, it is true, correct, and complete, and I further declare that I have authority to sign this document on behalf of Seller. Dated: , 20 SELLER: 267/015610-0046 1030822 01 a10/01/09 036 EXHIBIT "E" BILL OF SALE (the "Seller"), in consideration of good and valuable consideration in hand paid by LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic (the "Buyer"), the receipt and sufficiency of which is hereby acknowledged, does by these presents release, transfer, bargain, sell, assign and convey unto the Buyer, its successors and assigns, all of the Personal Property as such is defined in that certain Agreement for Purchase and Sale and Escrow Instructions between Seller and Buyer executed 20, as such may have been amended. Seller does hereby represent and warrant that all such property is free and clear of all security interests, liens and encumbrances other than those expressly assumed by Buyer and in good working order and condition. Seller does hereby covenant with Buyer that it has good right to sell, transfer, convey and assign all of right, title and interest in the same to Buyer and will warrant and defend the same in favor of Buyer, its successors and assigns. IN WITNESS WHEREOF, the Seller has caused these presents to be signed as of this day of 20. SELLER: 11 267/015610-0046 •.. 1030822.01 a10/01/09 037 Ow , 'JlV'Vdpl V��//}�e�/ � auiw F TA V N OF T> COUNCIL/RDA MEETING DATE: October 6, 2009 AGENDA CATEGORY: ITEM TITLE: Adoption of a Resolution Approving a BUSINESS SESSION: _ Financing Agreement Among the City of La Quinta, the CONSENT CALENDAR: y� La Quinta Redevelopment Agency and the La Quinta Housing Authority and Authorizing the Executive Director STUDY SESSION: to Execute the Same, and a Resolution Agreeing to PUBLIC HEARING: Provide Staff Services for the La Quinta Housing Authority RECOMMENDATION: Adopt a Resolution of the Redevelopment Agency approving a Financing Agreement among the City of La Quinta, Redevelopment Agency and the La Quinta Housing Authority, and authorizing the Executive Director to execute the same. Adopt a Resolution of the Redevelopment Agency agreeing to provide staff services for the La Quinta Housing Authority. FISCAL IMPLICATIONS: The Housing Authority will own affordable housing developments that are awaiting final disposition to private or non-profit owners/operators. Staff and management costs associated with these dwellings will be funded from unit rental income; property acquisition and rehabilitation costs will be funded by the La Quinta Redevelopment Agency as part of its requirement to increase and improve housing affordable to very low, low- and moderate -income households. The Financing Agreement provides that the City or Agency may advance funds to the Housing Authority for operations and projects until such time the Housing Authority is generating enough revenue to repay the City and/or Agency. Interest shall accrue on the outstanding principal advanced at the earning rate of the City's Investment Pool Funds, and shall be adjusted quarterly. The activities of the Washington Street Apartments, the La Quinta Housing Program and the foreclosed home program will be transferred from the Redevelopment Agency Low- and Moderate -Income Funds 245 and 246 to the newly -established Housing Authority Funds 241 and 242. The Fiscal Year 2009-10 Low and Moderate Housing »_ 038 Tax Increment Fund budgets include revenues for the La Quinta Housing Program in Project Area No. 1 of $225,000 in rental income plus $68,700 in interest income, and $275,000 in expenditures (Account No. 245-9001-703.51-40); for the Washington Street Apartments in Project Area No. 2, budgeted revenues are $163,300 for rental income plus $502,400 in interest income, and $429,300 in expenditures (Account No. 246-9002-703.51-30). CHARTER CITY IMPLICATIONS: None. BACKGROUND AND OVERVIEW: On September 15, 2009, the City Council adopted Resolution No. 2009-075 establishing the La Quinta Housing Authority and appointing the City Council to act as the Housing Authority's governing body pursuant to the Housing Authorities Law (California Health and Safety Code Section 34200 et seq.). The next steps for the Redevelopment Agency are to approve the Financing Agreement (Attachment 1) and agree to provide necessary staff services to the La Quinta Housing Authority. FINDINGS AND ALTERNATIVES: The alternatives available to the Housing Authority include: 1. Adopt a Resolution of the Redevelopment Agency approving a Financing Agreement among the City of La Quinta, Redevelopment Agency and the La Quinta Housing Authority, and adopt a Resolution of the Redevelopment Agency agreeing to provide staff services for the La Quinta Housing Authority; and authorizing the Executive Director to execute the same or 2. Do not adopt a Resolution of the Redevelopment Agency Approving a Financing Agreement; or 3. Provide staff with alternative direction. Respectfully submitted, �6tifGstiNL Doug as . Evans Assistant City Manager — Development Services .«. ^ 039 Approved for submission by: Thomas P. Genovese, Executive Director Attachment: 1. Financing Agreement ».. ^ 040 RESOLUTION NO. A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY APPROVING A FINANCING AGREEMENT AMONG THE AGENCY, THE CITY OF LA QUINTA, AND THE LA QUINTA HOUSING AUTHORITY FOR THE PROVISION OF FINANCIAL ASSISTANCE TO THE HOUSING AUTHORITY 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 § 33000 et seq.); and WHEREAS, the City Council of the City of La Quinta ("City" or "City Council," as applicable) has established the La Quinta Housing Authority (the "Housing Authority") to function in the City of La Quinta in accordance with the California Housing Authorities Law (Health and Safety Code Section 34200 et seq.); and WHEREAS, the Housing Authority presently has no funds with which to carry out its purposes; and WHEREAS, the Agency desires to provide financial assistance to the Housing Authority by making periodic advances of funds in order to finance the operations of the Housing Authority; and WHEREAS, City, Agency, and Housing Authority staff have prepared a Financing Agreement pursuant to which the City and Agency could make such periodic advances of funds (the "Financing Agreement"). NOW, THEREFORE, the Agency Board of Directors does hereby resolve as follows: SECTION 1. The Financing Agreement, a copy of which is on file with the City Clerk, is hereby approved. SECTION 2. The Agency's Executive Director is authorized and directed to execute the Financing Agreement and to take such other actions and execute such other documents as may be necessary to implement and effect this Resolution and the Financing Agreement on behalf of the Agency. Resolution. SECTION 3. The Agency Secretary shall certify to the adoption of this �41 -1- Resolution No. Housing Authority Financing Agreement Adopted: October 6, 2009 Page 2 PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta Redevelopment Agency held this 6`h day of October, 2009. AYES: NOES: ABSENT: ABSTAIN: KRISTY FRANKLIN, Agency Chairperson La Quinta Redevelopment Agency ATTEST: VERONICA J. MONTECINO, Secretary La Quinta Redevelopment Agency APPROVED AS TO FORM: M. KATHERINE JENSON, Agency Counsel La Quinta Redevelopment Agency 042 RESOLUTION NO. A RESOLUTION OF THE LA QUINTA REDEVELOPMENT AGENCY AGREEING TO PROVIDE NECESSARY STAFF SERVICES TO THE LA QUINTA HOUSING AUTHORITY 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 § 33000 et seq.); and WHEREAS, the City Council of the City of La Quinta ("City" or "City Council," as applicable) has established the La Quinta Housing Authority (the "Housing Authority") to function in the City of La Quinta in accordance with the California Housing Authorities Law (Health and Safety Code Section 34200 et seq.); and WHEREAS, the Agency has determined that Agency staff are necessary to provide support staff services associated with or required by the Housing Authority. NOW, THEREFORE, the Agency Board of Directors does hereby resolve as follows: SECTION 1. The above recitals are true and correct and are incorporated herein by reference. SECTION 2. The Agency Board of Directors hereby agrees that the Agency shall provide support staff services associated with or required by the Housing Authority. The actual and reasonable costs of such staff support services or other services, or supplies and equipment, may be charged to the Housing Authority and reimbursed to the Agency. SECTION 3. The Agency Secretary shall certify the adoption of this Resolution. PASSED, APPROVED and ADOPTED at a regular meeting of the La Quinta Redevelopment Agency held this 6" day of October, 2009. AYES: NOES: •w 043 Resolution No. Housing Authority Staff Services Adopted: October 6, 2009 Page 2 ABSENT: ABSTAIN: KRISTY FRANKLIN, Agency Chairperson La Quinta Redevelopment Agency ATTEST: VERONICA J. MONTECINO, Secretary La Quinta Redevelopment Agency APPROVED AS TO FORM: M. KATHERINE JENSON, Agency Counsel La Quinta Redevelopment Agency •. ^ P44 ATTACHMENT 1 FINANCING AGREEMENT This FINANCING AGREEMENT ("Agreement") is entered into as of this day of , 2009, by and among the CITY OF LA QUINTA, a California municipal corporation and charter city ("City"), the LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic ("Agency"), and the LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic ("Authority"). WHEREAS, Agency is a public body, corporate and politic, organized under the California Community Redevelopment Law (Health & Safety Code § 33000 et seq.); and WHEREAS, City is a municipal corporation and a charter city of the State of California, organized and existing under the Constitution of the State of California; and WHEREAS, the City established the Authority in accordance with the California Housing Authorities Law (Health and Safety Code Section 34200 et seq.) in order to provide suitable, safe and sanitary housing opportunities for City residents; and WHEREAS, the Authority presently has no funds with which to carry out its purposes; and WHEREAS, the City and Agency desire to provide financial assistance to the Authority by making periodic advances of funds in order to finance the operations of the Authority; and WHEREAS, it is anticipated that the loan financing set forth herein shall be repaid by Authority from future revenues generated by the Authority's ownership and operation of housing projects within the City. NOW, THEREFORE, the City, Agency, and Authority agree as follows: 1. Agency/City Financing• Interest• Use of Loan Principal. The City and/or Agency may, from time to time, advance funds to the Authority to finance the operations and projects of the Authority. Interest shall accrue on the outstanding principal advanced at the earning rate of the City's Investment Pool Funds, and shall be adjusted quarterly. The advanced funds shall be used only for the purpose of financing the operations and projects of the Authority and for no other purpose. 045 2. Repayment. The total funds advanced by the City and/or the Agency, plus all interest accrued thereon, shall be repaid by the Authority when funds generated from Authority operations are available. Authority shall be entitled to repay all or part of the loan principal at any time with no other charges, fees, or penalties. All amounts due under this Agreement shall be payable at the offices of the Agency or City (as applicable). 3. Future Financing of Specific Projects. Notwithstanding anything to the contrary in this Agreement, the parties may enter into separate agreements with different terms and conditions to finance particular projects. 4. Recordkeeping. The Finance Director/Treasurer of the City shall keep appropriate records and accounts to document all borrowings herein. 5. Non -Recourse Obligation. No officer, official, employee, agent, or representatives of Authority shall be liable for any amounts due hereunder, and no judgment or execution thereon entered in any action hereon shall be personally enforced against any such officer, official, employee, agent, or representative. 6. Entire Agreement; Amendments. This Agreement shall constitute the entire agreement of the parties. This Agreement may be amended or modified only by an agreement in writing signed by the parties. This FINANCING AGREEMENT is executed by the duly authorized representatives of the City, Agency and Authority as of the date first herein above written. �. r46 "AGENCY" LA QUINTA REDEVELOPMENT AGENCY, a public body, corporate and politic Dated Kristy Franklin, Agency Chairperson ATTEST: Veronica J. Montecino, Agency Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP M. Katherine Jenson Agency Counsel Dated ATTEST: Veronica J. Montecino, City Clerk [signatures continued on next page] 0111 A CITY OF LA QUINTA, a California municipal corporation and charter city Thomas P. Genovese, City Manager »- 047 APPROVED AS TO FORM: RUTAN & TUCKER, LLP M. Katherine Jenson City Attorney Dated ATTEST: Veronica J. Montecino, Authority Secretary APPROVED AS TO FORM: RUTAN & TUCKER, LLP M. Katherine Jenson Authority Counsel "AUTHORITY" LA QUINTA HOUSING AUTHORITY, a public body, corporate and politic Thomas P. Genovese, Executive Director �• ` 048 ` 4 XPQutqrw COUNCIL/RDA MEETING DATE: October 6, 2009 ITEM TITLE: Discussion of SilverRock Resort RECOMMENDATION: As deemed appropriate by the Agency. FISCAL IMPLICATIONS: AGENDA CATEGORY: BUSINESS SESSION: CONSENT CALENDAR: STUDY SESSION: / PUBLIC HEARING: None at this time. The financial history and projected expenditures are included in the following sections of this report. BACKGROUND AND OVERVIEW: Introduction The purpose of this report is to provide the Agency Board with an update on the status of the SilverRock Resort (SRR) project, and to outline the background information the RDA Board considered when it developed and adopted the SRR Master Plan. To help facilitate the Board's discussion of the SRR Master Plan, the report provides the historical context of the SRR project, a summary of where the project is today, and what the SRR Master Plan outlines for the future. This report provides an overview of the project's inception and begins with the economic goals and initial funding program; then project design and planning are discussed. Next the overall capital improvement program (infrastructure) for Phase I and II are summarized. The infrastructure summary identifies all of the predevelopment design costs, streets, utilities, golf courses, and clubhouse. The proposed hotel and commercial development program and anticipated revenue are also discussed as well as the current golf course program and agreements. One of the most important topics is an overview of the funding sources (primarily a combination of taxable and non- taxable bond proceeds) used to buy and develop the site, and how those funding sources limit the land use options available to the Agency. ""'' 049 In 2002, the Agency purchased the 525 acre SilverRock Resort from KSL Recreation. The goal was to achieve several objectives, including implementing the City's General Plan, providing public recreation opportunities, and developing resort and commercial uses that generate recurring General Fund revenue (transient occupancy taxes (TOT), sales taxes and property taxes). This report provides a summary of the key steps and considerations the Agency Board has undertaken to develop this site. The Agency's mission was to create long term economic return to the community by building resort hotels and in turn provide La Quinta residents with a top-notch golf and recreation experience. Today's economy has affected the Agency's economic condition as well as the private sector equity market. Both public and private investments at SRR are on hold until the economy recovers. Economic Development Plan Strategy Since 1995, the City has been seeking ways to implement an economic development strategy designed to enhance long term General Fund revenue. This strategy started with the Highway 111 commercial corridor development. To diversify the City's revenue base and not be subject to State revenue enhancement raids, in 1998 the City elected to pursue new hotel development opportunities to generate TOT revenue, as well as any other strategy that would increase the City's economic base. Part of that strategy was to focus efforts on expanding the City's mid -priced and resort hotel inventory. However, as the City pursued hotel developers and operators, these entities consistently indicated that without golf package opportunities, the City would not be able to attract resort and hotel franchises. Available Redevelopment Agency Revenue Based on the City's economic development strategy and in conjunction with the City's 2000 Annual Financial Management Review, staff identified that the Agency had the capacity to generate $300.0 million in Project Area No. 1 non -housing revenue over a 30-year period (this projection was based upon property values annually increasing by 2% per annum); the current or net present value of the $300.0 million in projected revenue was $100.0 million. If property values grew in excess of two percent per annum (as was the case from 2000 to 2007), the $300.0 million of revenue capacity would substantially increase. This revenue was available after all of the current and projected Project Area No. 1 public facility and infrastructure needs were funded (Project Area No. 2 revenue was not included in this forecast). Agency funds can be used to build public facilities and improvements, to facilitate economic development initiatives, and to facilitate affordable housing development. These funds cannot be used to fund City operations. After considerable review and discussion, the Agency Board authorized staff to identify sites that could be purchased to develop a municipal golf course that would accommodate hotel and resort hotel development and would '-- , 050 generate long-term General Fund income. Staff presented five alternate sites to the Board; the SilverRock site was selected and purchased with Project Area No. 1 Non - Housing Tax Increment Revenue and tax exempt and taxable bonds. The subject property was purchased for $42,859,654 or $81,637 per acre. SilverRock Resort Master Plan The Agency retained GMA International (GMA) in November 2002, to initiate the formal master planning process. GMA reviewed the Agency's stated objectives and held a Study Session with the Agency Board and the community on December 3, 2002. This direction provided the basis for the subsequent Conceptual Master Plan. GMA and staff facilitated an additional public workshop on January 29, 2003 to solicit citizen comment on planning concepts. Additionally, a website was developed to further facilitate public participation in the planning process. The first Conceptual Master Plan, approved in August 2003, was a product of the public and Agency planning process. Palmer Course Design Company was subsequently retained to design the first golf course. Because the Palmer golf course routing plan was different from the preliminary routing plan depicted in the Conceptual Master Plan, a revised Conceptual Master Plan was approved in April 2004 (Attachment 1). It was intended as a conceptual plan and guide to future site development. The SRR Specific Plan was based upon the Conceptual Master Plan and was designed to implement the Master Plan. A recently revised Master Plan is attached to show the current clubhouse site configuration and preliminary routing plan for the second golf course (Attachment 2). Specific Plan Summary In 2006 the City Council adopted the SilverRock Specific Plan which identifies eight Planning Areas and outlines detailed development criteria and design guidelines for each Planning Area. A majority of the Planning Areas were designated for Golf Course and Tourist Commercial uses, with the remaining Planning Areas designated as Open Space and Water Course/Flood Control. The designated Areas are identified on the attached land use diagram and land use summary (Attachments 3 and 4). The Golf Course land use designation allows for both public and private golf courses and their associated ancillary uses; the Tourist Commercial designation allows resort hotels, multi -family resort residential casitas (revenue generating uses), recreational uses, conference centers and ancillary retail shops. The land use plans identify the general types, locations and distribution of land uses desired at the City's build out. The Specific Plan allows for the development of up to 1,160 hotel/resort residential (condominium hotel and fraction hotel) units. The Specific Plan allows adjustments to the land use Planning Areas as the future phases are developed. Of the 525 acres, approximately 290 acres are undeveloped at this time. The retail areas allow up to 160,000 square feet of commercial, restaurant and entertainment uses, as well as residential uses over first floor retail. The 35 acre Planning Area 7, located at the southwest corner of Jefferson Street and Avenue 52, is intended to be a passive use park to provide recreation opportunities. Special events such as public parking, automobile displays, art festivals, corporate events in conjunction with on -site hotels, and other similar activities are permitted subject to a temporary use permit. Redevelopment Infrastructure Program During the planning stages, of the Conceptual Master Plan the Agency determined that the Agency would fund and construct all required infrastructure in order to create development ready hotel and commercial pads. The infrastructure included the street improvements, golf courses, wet and dry utilities, drainage and circulation systems, perimeter landscaping, irrigation lakes, and the development pads. This infrastructure was to be developed in two phases per the funding strategy outlined in the "Financing Strategy" section of this report. The Phase I infrastructure improvements included the initial land purchase plus improvements to Avenue 52, Jefferson Street and Avenue 54, the wet and dry utilities, storm drains, entry features, perimeter landscaping, the Arnold Palmer Signature Golf Course, the Ahmanson Ranch House improvements, and the boutique and resort hotel development pads. One of the Agency's goals was to design and develop a PGA Tournament golf course that would be used for tournaments such as the Bob Hope Chrysler Classic. Therefore, the design, construction and subsequent operation costs were higher in order to achieve this goal. As a result, SRR has gained acclaim as one of the top golf courses in the region and has had national and international promotion. This quality of golf course has allowed SRR to achieve 40,000 rounds of golf and command a $165 per round high season rate, and all without an on -site hotel. The golf course development costs included the golf course, lakes, restrooms, maintenance facility, and a substantial renovation of the Ahmanson House to create a temporary clubhouse. The total cost of Phase I and its related components is outlined below. Land Acquisition $42,611,967 Golf Course and related improvements $28,058,342 On -Site Improvements $ 8,804,758 Off -Site Improvements $ 4,502,427 Other $ 1,048,457 Total Phase 1 $85,025,951 '» . 052 Phase II of SilverRock Resort consists of the following: Infrastructure - design and engineering; construction; and construction management of the "backbone" infrastructure necessary to serve Phase II, including on -site streets, medians, curb and gutter; three (3) bridges spanning the Coachella Canal (1 auto and 2 golf cart); water lines, sewer lines and dry utilities; and irrigation line relocation. The design is nearly complete. Staff is working with Coachella Valley Water District (CVWD) on the canal relocation, which will determine the final infrastructure design. Once the canal relocation issues are resolved, the infrastructure design will be completed. Infrastructure construction depends upon the canal relocation schedule and the outcome of State budget proceedings. Permanent Clubhouse - design, construction, and construction management of the clubhouse building, clubhouse site (outdoor areas) and parking lot; clubhouse furnishings and fixtures; and site paving and landscaping. Building and site design have been completed; construction is on hold. Second Golf Course - mass grading; final grading; engineering and design; construction management; inspection and testing; irrigation and drainage systems; golf course construction; lake and landscape installation: The preliminary routing plan is completed and has been approved by the Agency. The Agency has retained Jacobsen Hardy Golf Design, Inc., to design the second golf course. The design of this course is to be a more player friendly course while offering challenging golf for pros if played from the back tees. Entry Feature and Roads - future entry feature on Jefferson Street; roadway and median landscaping; site signage; sidewalk installation; multi -purpose trails: This design is currently on hold. Canal Relocation — relocation of the Coachella Branch of the All -American Canal, possibly underground. Costs are unknown at this time as staff is still working through the details with the Coachella Valley Water District and Federal Bureau of Reclamation. The anticipated budget for the Phase II improvements (as detailed in the City's Capital Improvement Program (CIP) is: Infrastructure $26,358,941 Roads and Entries $ 5,594,224 Permanent Clubhouse $25,412,010* Second Golf Course $21,060,000 Preliminary Budget for Canal Relocation $ 6,000,000 Total $ 84,425,175 * Total Clubhouse cost estimate as of January 20, 2009 is $35,126,021; bringing the total for Phase II estimated cost to $94,139,186. ".. n r53 Timing and State Take of Funds The State has recently approved the shifting of local redevelopment funds to schools. This will occur over two years; the La Quinta Redevelopment Agency must divert $28.4 million of reserves to local school districts, $23.5 million this fiscal year, and $4.9 million the following fiscal year. The California Redevelopment Association will be filing a lawsuit to block this action by the State, but it may be some time before a final determination is made. If the State prevails, this will have a significant effect on the Agency's ability to fund SRR Phase II improvements over the next few years. SilverRock Resort Development Program After the adoption of the revised SilverRock Master Plan in 2004, staff prepared and circulated a Request for Qualifications for national hotel franchises and development companies. In 2005, the Agency Board selected Lowe Destination Development LDD out of ten applicants and directed staff to negotiate a Disposition and Development Agreement (DDA) with LDD. The Board approved the DDA with LDD in 2006. The DDA established a development program, funding and a timeframe to develop hotel and retail uses on 61 acres of the 525 acre resort. Per the DDA, LDD would develop up to 710 boutique and resort hotel rooms housed in two separate hotel complexes, 81,000 square feet of resort commercial uses, a 7,500 square foot black box theater/conference facility, and related amenities. The hotels are to be a Four Star quality level. The updated SRR Master Plan has been developed to illustrate the most current land planning concepts including hotel layout, clubhouse, and the second golf course. Per the DDA schedule, the private development (hotel and retail) is to take place in three phases: Phase 1 is the Boutique Hotel; Phase 2 is the Resort Hotel, associated lake and golf casitas, and the retail area; and Phase 3 includes the two hotel parcels located at the southern end of the property. LDD currently has the exclusive right to develop Phases 1 and 2, and right of first offer for Phase 3. The following tables identify the forecasted revenue the DDA's development program could generate through 2008 to 2020. City Source Building Permit Fees $ 1,625,000 Transient Occupancy Tax $45,134,862 Sales Tax $ 5,316,087 Retail Land Lease $ 1,606,773 Total: $53,682,722 Net Present Value $32,676,049 (6.5% discount rate) '... " 054 Agency Source Land Sales $10,470,600 Tax Increment $34,649,427 (Housing and Non -Housing) Total $45,120,027 Net Present Value $29,766,969 (6.5% discount rate) The DDA also provides that the Phase 1 development start by 2009, and the Phase 2 development by 2011. Phase 1 includes the Boutique Hotel and additional condominium hotel units on the land that is currently used as the temporary clubhouse parking lot; this would occur when the permanent clubhouse opened. Phase 2 encompasses the main or Resort Hotel, associated casita units, and retail. LDD has the right of first offer to develop Phase 3. This means the Agency can accept development proposals for Phase 3 and LDD has 60 days to submit a comparable or superior proposal. LDD was scheduled to submit the construction plans and program for the Phase I Boutique Hotel (a condominium hotel) in August 2008. As of July 2008, these plans were 55 percent complete. At that time, however, LDD requested a one-year time extension to submit the Boutique Hotel construction plans and commence construction because the Coachella Valley condominium hotel market collapsed and they could not secure permanent lender financing commitments. Further, LDD's equity investors would not approve moving forward with developing the Boutique Hotel property until December 2010, at the earliest. LDD represents they have invested $8,852,428 in pre -development design, marketing and project management costs, and in working capital deposits; $1,650,000 of this amount was deposited into an escrow account as working capital. This account currently has a balance of $626,305. LDD is motivated to secure a hotel operator and franchise interest in the SilverRock properties given its investment in plans and predevelopment costs. Hotel Industry Forecasts and Timing Review of hotel demand forecasts prepared by PKF Consultants and other hotel industry experts indicate that the demand for new hotel inventory may start to increase in 2011 or 2012. Financing Strategy The Agency sold tax exempt and taxable bonds, secured by Project No. 1 non -housing tax increment revenue, to fund a majority of SRR acquisition and development ' n 055 activities. Because a majority of the land purchase and improvements have been funded with tax exempt bond proceeds, the Agency is limited by the "Private Activity" rules regarding permitting the private use or sale of the property. Of the $85.03 million spent for the acquisition and improvement of the property, $25.56 million was from a taxable bond issuance, $56.95 million was from tax exempt bond proceeds, and $2.52 million was from other sources, including tax increment. The $25.56 million of taxable funds was specifically used to provide for some level of private uses (e.g., hotels, resort commercial) to be developed. Based upon the mix of taxable, tax exempt, and other funding used on the property's purchase and development, the parcels which are currently designated for Resort Commercial use (e.g., the Boutique Hotel site, the Main Hotel site, the Resort Commercial area, and the future resort phases 185.43 acres in all]) can be used for private purposes. Thus, that land can be sold, leased, or otherwise not kept for public use. However, the remaining acreage needs to be kept available for public uses, such as public recreation or public parks. The Arnold Palmer Classic Course was transferred to the City in 2006; the City owns 188 acres at SRR. The Agency owns the remaining 337 acres. If the Agency elected to divest itself of this property, the portion of land purchased with tax exempt bond proceeds would have to be transferred at essentially no cost ($1.00). As to the portion of the property which can be used for private purposes, none of the property sale income could be paid to the City or would become City General Fund revenue. Public Recreation Opportunities The SRR Master Plan and Specific Plan contemplate a number of public recreation amenities at SRR. The most notable are the existing Arnold Palmer Classic Course and the future Jacobsen Hardy Course. As previously noted, the second golf course is to be designed to be more forgiving for the average golfer yet capable of hosting a PGA Tour event. The second recreation opportunity is a proposed 35 acre park to be located at the southwest corner of Jefferson Street and Avenue 52. This site, referred to below as Planning Area 7, is to be a passive park which would be compatible with a Four Star Resort and the residential developments on the north side of Avenue 52 and the east side of Jefferson Street. Avenue 52/Jefferson Parcel — Planning Area 7 At the northeast corner of the Specific Plan Area is a 35 acre site designated for a passive community park. Based on the direction of the SilverRock Resort Specific Plan, the design of the SilverRock park site is intended to be a passive use park; a passive use space with gentle undulating slopes with softly lit pathways. Potential uses include outdoor rental space for the hotels and venues for special events and cultural activities that fit with the uses of a high end hotel experience. Families and active adults will leisurely walk or jog through the park site, relax in quiet sitting areas 056 that overlook both the golf courses and enjoy spectacular mountain vistas. This property is not planned for an active sports park (baseball or soccer fields). Several residents have suggested the use of this park site for interim sports fields for the community. The use of this facility for a sports park (primarily soccer) may be in conflict with the high -end experiences desired at SilverRock Resort. The addition of sports fields would require fine grading, adding underground irrigation, portable restrooms and concessions, parking, goal posts and sports equipment storage to make the facility viable to users. The biggest issue would be the addition of sports lighting at this site. The sports lighting would be in the range of 60-80 feet high with a number of poles needed for a sports park of this size. For example, a ten acre sports park would require a minimum of 18 light poles. A 20 acre park would require 33 light poles. Lighted sports fields would be used Monday through Friday from 4 p.m. until 10 p.m. and Saturdays and Sundays from 7 a.m. until 9 p.m. As an interim use the cost to add these types of basic amenities is approximately $300,000 per acre or $6,000,000 for a 20 acre sports park. The cost to create an "interim" sports facility is almost as expensive as creating the permanent facility. The cost to maintain sports fields, including lighting costs and water is approximately $10,000 per acre annually or $200,000 per year. The use of this property for sports fields and the sports lighting would possibly create concerns by the adjacent neighbors in the Citrus, Cordoniz, Hideaway and the PGA West subdivisions. Additionally, closing a sports facility once it is available to the public is often a difficult situation. Resident parents and sports association board members are often upset and vocal about the closure of these sports fields and put pressure on policy makers to keep the facility open and in use. Golf Course Operations The Agency's goal of providing a public recreation amenity has been initially met with the 2005 opening of the Arnold Palmer Classic Course at SilverRock Resort. The City has issued over 10,000 resident cards since the inception. There are 6,067 active cards. Many of the 3,864 expired cards will be renewed this season as a result of the three-year policy that was approved November 1, 2005. Many of the cards were issued in the winter of 2006. The resident card is $15 and is active for three years. The City Council may wish to consider increasing the rate and reducing the term of the resident card back to one year. (For example, if the resident card fee were increased to $50 annually the City could increase revenue by as much as $300,000 annually.) On November 16, 2004, the City Council adopted a resolution establishing resident rates of $55, $45 and $30 for SilverRock Resort. The resident rate was anticipated to make up 25% of the total number of rounds at the course. In Fiscal Year 2008-2009, the percentage of resident discount rounds was 31 % or 13,518 of the 41,261 rounds •�. 057 played, therefore significantly reducing the average revenue per round. Consequently, the resident rate is being subsidized by the General Fund to offset the revenue shortfall directly related to La Quinta resident play during the shoulder and prime time seasons. The City Council may wish to reconsider the resident rates as they make up a higher percentage of use than originally projected and have increased the General Fund subsidy. On January 16, 2007,the City Council considered an Amended Use Agreement with Desert Classic Charities that designates the Arnold Palmer Classic Course at SilverRock a "Home Course" of the Bob Hope Classic Tournament and includes the golf course in the tournament rotation. The Amended Use Agreement was approved by the City and the Hope Classic on June 6, 2007. This weeklong event currently costs the City approximately $620,000 annually including the PGA Tour's course improvements, contractual payment as a host course, temporary parking, marketing agreement and the loss of rounds for the week of the event. This event provides international promotion for the City of La Quinta, local businesses, residential real estate, hotels and the four La Quinta courses that host the PGA Tour sanctioned tournament. Section 7 of the Amended Use Agreement requires the City to provide 40 acres of turf or paved parking. The Agency provided 35 acres for the temporary parking lot on the northeast corner of the undeveloped property and the remaining five acres are provided at the temporary clubhouse and on the west side of the driving range. The Agency selected Palmer Course Design Company to design SilverRock Resort as an Arnold Palmer Signature course with the intention of building a high quality resort course that would potentially host a PGA Tour event. The course conditions per the agreement with Palmer Course Design Company required the City to maintain the course to the Palmer Design standards. If the golf course standards are not maintained the City would forfeit the right to promote the course as an Arnold Palmer Signature Course or make any use of the Arnold Palmer identification. As a result of being a host course of the PGA Tour's Bob Hope Classic, SilverRock is required to comply with PGA Tour standards. The course conditions are routinely checked and monitored throughout the year by the PGA Tour Agronomist. Items such as seed applications, fertilizer rates, bunker consistency, mowing patterns and irrigation practices are continually observed and must be in compliance with PGA Tour standards on an annual basis. An attempt to reduce the golf course's quality control standards and service levels could jeopardize the image of SilverRock and its ability to generate top dollar green fees and compete with other high end daily fee golf facilities in the desert market place. The possible loss of revenue could be greater than the savings as a result of reducing golf course quality control standards and service levels. 058 If there is a desire to alter the current operation of the golf course, the City Council could direct staff to prepare a more detailed report. Some of the measures which would reduce service levels and reduce golf course maintenance costs are as follows: 1) reduction in golf course maintenance staff and chemicals necessary to promote high quality turf grass; 2) weed control could be reduced; 3) eliminate complimentary driving range balls prior to play and adding a driving range golf ball dispenser which utilizes tokens; 4) cut back on clubhouse services; and 5) eliminating the GPS system on all golf carts; The direct impacts of these types of reductions would result in deferred native area maintenance, less mowing on the golf course and overall turf conditions may suffer. These impacts could jeopardize the image of SilverRock and its ability to meet the criteria of hosting a PGA Tour event and reduce the ability to retain the number of guests paying the rack rate pricing. At the Agency meeting of August 4, 2009, Precision Landleveling was provided a revocable license to farm up to 50 acres of property, at no cost to the Agency, to grow and sell fruits and vegetables. The agreement includes PM10 control for the undeveloped area except the hotel pads that are engineered and glued. Sudan grass will be grown on 80 acres this year to provide PM10 control along Jefferson Street and Avenue 54. The agreement includes planting rye grass on 35 acres at the corner of Jefferson Street and Avenue 52 for the temporary parking lot, and clean up of debris and tumbleweeds throughout the undeveloped property. Conclusion This report has provided the Agency Board with an overview of the SRR development as it has evolved from its purchase to its current status. As stated in the report, the Agency's underlying purpose of this project is to provide the City and its residents with a recurring source of revenue by increasing its TOT, sales, and property taxes as well as provide its residents with an excellent golf and recreation destination. Should the Agency Board have any further questions, staff will be available to answer them at the meeting. Respect y submitt d, Douglas RAvans, Assistant City Manager —Development Services AA rov1�bmission by. ZZ Thomas P. Genovese, Executive Director ".. n 059 Attachments: 1. April 2004 SRR Master Plan 2. Updated SRR Master Plan 3. Specific Plan Land Use Diagram 4. Specific Plan Land Use Summary 060 Jr i . R ATTACHMENT 3 Avenue 52 Legend: 0 PlanningArea 1: Public Golf Course 0 PlanningArea 2: Civic and CLULfal Events Facilities PlanningArea 3: BOUIOLe Hotel Planning Area: Resort Hotel and Resort Casitas PlanningArea 5: Mixed -Use Resort Retail Village PlanningArea 6Traditional Hotel and Resat Casitas PlanningArea 7_ Public Park 0 PlanningArea S. Public Facilities July 18, 2006 Avenue 54 600 3000 600 "61 tL APPROXIMATE SCALE IN FEET Exhibit 4 — Planning Area Diagram 835001-06,06 13 "' 063 ATTACHMENT 4 SPECIFIC PLAN LAND USE SUMMARY The size and allowed uses in each Planning Area are identified below. More detailed development criteria and design development guidelines for these Planning Areas are contained in Master Plan of Land Uses in the Specific Plan Planning Area 1: Allowed uses in this Planning Area include two 18-hole golf courses and supporting facilities, including a clubhouse, driving range, instructional facility, and a golf course maintenance facility. One 18-hole golf course currently exists in this Planning Area. Planning Area 1 includes approximately 373 acres. Planning Area 2: This Planning Area includes the existing Ahmanson House, which will be preserved and maintained for use as a commercial, civic and/or cultural events facility. This Specific Plan allows the use of this existing facility and the development of additional facilities which may include a restaurant with up to 300 seats, up to 10,000 square feet of conference facilities, and/or up to 80 guest units. Planning Area 2 includes approximately 4 acres. Planning Area 3: The allowed use in this Planning Area is a boutique hotel containing a minimum of 188 units and maximum of 225 units that can be occupied separately with a minimum of 200 keys, and a maximum of 260 keys. Planning Area 3 includes approximately 13 acres. Planning Area 4: Allowed uses in this Planning Area include a resort hotel and appurtenant resort casitas containing a maximum of 405 units that can be occupied separately with a maximum of 520 keys. Planning Area 4 includes approximately 30 acres. Planning Area 5: Allowed uses in this Planning Area include a mixed -use resort retail village containing up to a maximum of 160,000 square feet. Planning Area 5 includes approximately 9 acres. Planning Area 6: Allowed uses in this Planning Area include a hotel and resort casitas containing a maximum of 450 units that can be occupied separately with a maximum of 500 keys. Planning Area 6 includes approximately 31 acres. Planning Area T Planning Area 7 includes a total of approximately 35 acres to be used as public park. Planning Area 8: Planning Area 8 includes a total of approximately 51 acres containing existing and planned public facilities including streets, the existing All American Canal and water well sites. C64 October _ 9/27 10/4 F bma 1I3 1I10 1/1] 1/24 t131 Q - 4— U ID 1 2 ask Name Preliminary Design _.-_.. - Surveying Site Review - Base Map Preparation - City Approval FINAL DESIGN SERVICES Site Layout Plan and Details - - Grading and Paving Plan Irrigation Electrical Planting SUBMITTALS - - CVWD/City Submittal 1st plan check Revisions 2nd Submittal - . _. Su Revislons 100/ Plan Check Preliminary Final/City Council BIDDING - PreBid Meeting - 3 4 6 6 7 8 9 10 11 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 I Project: Seasons Dog Park -Revised Date: Wed 9/23/09 Task Split p ..................... M »�: 065