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2024 Troutdale Village, LLC - Reimbursement Agrmt - LQ Village Apts; GPA, Exhibit B, COA 4REIMBURSEMENT AGREEMENT LA QUINTA VILLAGE APARTMENTS This Reimbursement Agreement ("Agreement") is hereby entered into by the City of La Quinta, a California municipal corporation and charter city ("City"), and Troutdale Village, LLC a California limited liability company ("Developer"), entered into and effective as of November 21, 2023 ("Effective Date"). City and Developer may each individually be referred to as a "Party" and collectively as the "Parties." RECITALS A. WHEREAS, on November 21, 2023, the City Council of the City of La Quinta adopted Resolution No. 2023-039, approving General Plan Amendment 2022-0002, conditionally approving Specific Plan 2022-0001 (SP 2004-071, Amendment 2), and conditionally approving Site Development Permit 2022-0001, and conditions of approval ("COAs") attached thereto (collectively the "Approvals") related to the development of a 252 -unit apartment project located on the northeast corner of Washington Street and Avenue 50 in the City of La Quinta ("City"), referred to as the La Quinta Village Apartments Project, as more specifically described, approved, and conditioned as set forth in said Resolution (the "Project"); and B. WHEREAS, Government Code Section 65863 (the "No Net Loss Law") requires public entities like the City to maintain adequate sites in their Housing Element to accommodate their regional housing need allocation ("RHNA") at all income levels, at all times, including designating alternate sites where a project would develop a previously designated site without providing the requisite units at the requisite affordability levels; and C. WHEREAS, Resolution No. 2023-039 sets forth in part the actions necessary for the Project to comply with the No Net Loss Law, including the redesignation of two hundred eighty (280) low or very low income affordable units in City's Housing Element from the Project site to alternate locations in the City, and the requirement to seek approval or certification of City's Housing Element as modified by the Approvals from the California Department of Housing and Community Development ("HCD"); and D. WHEREAS, by letter dated February 5, 2024, HCD delivered notice to the City that the Revised Draft Housing Element, which was modified by the Approvals, was found to "not adversely impact the current compliance status of the housing element once adopted[] [and as] a result, the revised [Housing Element] will continue to comply with state housing element law (Gov. Code, § 65580 [et seq.]) when these revisions are adopted and submitted to HCD, pursuant to [Government] Code Section 65585(g)"; and E. WHEREAS, the City has submitted to HCD, pursuant to Government Code Section 65585(g), the final copy of the Housing Element as modified by the Approvals; and 1 /015610-0203 20259475.3 a03/06/24 F. WHEREAS, the Approvals are contingent in part upon Developer ensuring compliance with the No Net Loss Law, and reimbursing City for any and all costs incurred by City (including staff time and attorneys' fees) in furtherance of complying with the No Net Loss Law as it relates to the Approvals, including seeking HCD's approval or certification of City's Housing Element as updated by the Approvals, regardless of whether HCD actually provides such approval or certification (collectively the "Costs"); and G. WHEREAS, City and Developer desire to enter into this Agreement to memorialize the reimbursement condition in the Approvals. NOW, THEREFORE, in consideration of performance by the Parties of the mutual promises, covenants, and conditions herein contained, the Parties agree as follows: 1. Recitals. The foregoing Recitals are true and correct and are hereby incorporated by this reference and are expressly made a part of this Agreement. 2. Agreement to Reimburse City for Costs. Developer agrees to reimburse City for the Costs, even though actual amounts and/or total amounts of the Costs are unknown on the date this Agreement is executed. The Costs include, without limitation, any staff time, consultant or contractor costs, attorneys' fees, or any other expense incurred by City in furtherance of obtaining final HCD approval of the Housing Element as modified by the Approvals and corresponding HCD approval for compliance with the No Net Loss Law as it relates to the Approvals. The Costs shall be reimbursable at the hourly rates established by City Council for City employees, as the same may be amended from time to time, and/or any comparable hourly rate for reimbursable work of consultants or contractors, including by the City Attorney's Office, as the same may be amended from time to time. 3. Developer Deposit. a. Initial Deposit. Within fifteen (15) days of execution of this Agreement, Developer agrees to deposit with City the sum of Five Thousand Dollars ($5,000) ("Initial Deposit"), which shall serve as the initial deposit that shall be used by the City to pay only for Costs. b. Supplemental Deposits. If the Initial Deposit is exhausted such that Five Hundred Dollars ($500) or less remains of the Initial Deposit, City may request in writing that Developer provide a supplemental deposit (and subsequent supplemental deposits, if necessary) in the amount of Two Thousand Dollars ($2,000) (each, a "Supplemental Deposit"), which Developer shall deposit with City within fifteen (15) days of City's written request. This process may be repeated whenever the total amount of the Initial Deposit and any Supplemental Deposit maintained by City is Five Hundred Dollars ($500) or less. The Initial Deposit and any Supplemental Deposit shall collectively be referred to as the "Deposit." Where the remaining amount of the Deposit is 2 /015610-0203 20259475.3 a03/06/24 insufficient to reimburse anticipated Costs, City may halt work until Developer provides the Supplemental Deposits required by this Paragraph. c. Use of Deposit. The Deposit shall only be used for reimbursement of Costs, and for no other purpose. d. Accounting. The Deposit shall be placed into a separate account to be segregated and used to draw upon to pay for Costs, with said account to be administered according to the City's policies and practices for administrating reimbursable accounts similar to the purposes as set forth in this Agreement. The separate account may be an interest-bearing account, with any interest accumulated to be applied as follows: (1) First, to the final payment of Costs, and, (2) secondly, distributed to the City if the amount of interest accumulated by the close-out of the account is less than One Hundred Dollars ($100) or less, or distributed to Developer if the amount of interest accumulated by the close- out of the account is more than One Hundred Dollars ($100). City shall provide to Developer, upon written request by Developer, a statement of draws against the Deposit, accompanied by invoices and other reasonable documentation (not exempt from disclosure pursuant to any applicable law, including the California Public Records Act, Government Code Section 7920.000 et seq. ("PRA")). Information that is privileged, confidential, or otherwise not subject to disclosure under the PRA, may be redacted to maintain such privilege, confidentiality, and compliance with any applicable laws, including the PRA. 4. Term and Termination. a. Term. The term of this Agreement shall begin on the Effective Date. b. Termination for Completion. This Agreement shall terminate when City provides notice to Developer in writing that (a) HCD has delivered a final decision regarding the certification of the City's Housing Element as modified by the Approvals, regardless of HCD's final decision, and (b) all Costs incurred have been reimbursed through the Deposit or otherwise paid by Developer ("Termination Date"). City shall provide to Developer a final accounting statement of all Costs, which Developer agrees shall be final and conclusive, absent manifest error by City. Should there be any remaining balance of the Deposit after all Costs have been reimbursed or paid by Developer according to the final accounting statement, then City shall refund to Developer any remaining unused balance of the Deposit (including any interest as set forth Section 3(d) of this Agreement) within forty-five (45) days of the final payment or draw -down from the Deposit. Should the total amount remaining of the Deposit be insufficient to reimburse or pay City for the remaining Costs according to the final accounting statement, Developer shall pay to City any additional sums necessary to reimburse the Costs within forty-five (45) days of City's request, which shall set forth in writing an explanation of the remaining unpaid amount. 3 /015610-0203 20259475.3 a03/06/24 c. Effect of Termination. Upon termination of this Agreement, Developer shall remain financially responsible to City for any Costs not reimbursed. d. Remedy for Failure to Reimburse. Without limitation to any other remedy available to City at law or in equity, if any amounts remain owing to City for Costs incurred prior to termination of this Agreement, and Developer fails to reimburse City for such Costs as required by this Agreement, City may bring an action to recover all such reimbursable Costs, together with interest thereon from the date such reimbursement was due until the date repaid at the rate of ten percent (10%) per annum, or the maximum rate permitted by applicable law, whichever is lower. City may further withhold permits or other approvals necessary for the Project until the Costs required to be reimbursed hereunder are paid by Developer. 5. Other Development Costs. Developer acknowledges that the Costs do not include any and all application, permitting, inspection, or other fees which may be charged by City in connection with the Project. Such fees shall be separately paid in accordance with the relevant City fee schedule upon filing of an application for development of the Project. 6. No Guarantee of Favorable Action. Developer agrees that this Agreement does not obligate City to obtain HCD's approval or certification of the City's Housing Element as modified by the Approvals, and City shall not be liable for any loss, damage, or invalidation of the Approvals resulting from HCD's refusal to provide such approval or certification. All obligations of this Agreement bind Developer regardless of whether HCD approves, rejects, or certifies City's Housing Element as modified by the Approvals, or makes any other determination thereupon. 7. No Interference. During the term of this Agreement, Developer will not directly or indirectly enter into any financial or business relationship, or direct payment arrangement with any City staff, consultant, or contactor working on matters related to this Agreement. Developer acknowledges that City has sole discretion over the actions necessary to perform the tasks encompassed by this Agreement, and the necessary Costs to incur for the same. 8. Compliance with Law. Developer and City will each, at its sole cost and expense, comply with all of the requirements of all federal, state, and local laws now in force, or which may hereafter be in force, pertaining to the performance under this Agreement. 9. Indemnification. To the fullest extent permitted by law, Developer shall defend (with counsel selected by City), indemnify, and hold harmless City and its officials, agents, officers, and employees (collectively, "Indemnified Parties") from and against any liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses or costs of any kind, whether actual, alleged or threatened, including, without limitation, incidental and consequential damages, court costs, attorneys' fees, litigation expenses, and fees of expert consultants or expert witnesses) incurred in connection therewith and costs of investigation, where the same arise out of, are a consequence of, or are in any way attributable to, in whole 4 /015610-0203 20259475.3 a03/06/24 or in part, this Agreement or Developer's reimbursement and payment (or failure thereof) to the City of the Costs hereunder. Without limiting the foregoing, in the event the Indemnified Parties are made a party to any action, lawsuit, or other adversarial proceeding alleging the Project and/or Developer violated any law or regulation, or otherwise alleging negligent or wrongful conduct on the part of Developer related to this Agreement, Developer shall provide, at its cost, a defense (with counsel selected by City) to the Indemnified Parties, or at the City's option, reimburse the Indemnified Parties on an ongoing monthly basis for their costs of defense, including reasonable attorneys' fees, incurred in defense of such claims. In addition, Developer shall be obligated to promptly pay any final judgment or portion thereof rendered against the Indemnified Parties. The obligations set forth in this Section 9 include, but are not limited to, sums paid or liability incurred in settlement of and expenses paid or incurred in connection with any administrative and/or judicial claims, suits or judgments under any litigation and/or arbitration expenses and/or awards paid or incurred in attempting to settle litigation or in recovering or in attempting to recover losses or expenses paid or incurred thereby, including but not limited to incidental and consequential damages, court costs, attorneys' fees, litigation expenses, and fees of expert consultants or expert witnesses incurred in connection therewith and costs of investigation. 10. Notices. Except as otherwise expressly provided by law, all notices or other communications required or permitted by this Agreement or by law to be served on or given to either Party by the other Party shall be in writing and shall be deemed received on: (i) the day of delivery if delivered by hand, e-mail (with confirmation of receiving party), or overnight courier service, during regular business hours; or (ii) on the third business day following deposit, with postage prepaid, in the United States Postal Service and addressed to the receiving Party. Contact information of the Parties is as follows: CITY OF LA QUINTA Name: Troutdale Village, LLC Attention: Director, Design & Development Attention: Jeff Parker Department Address: 1800 Blankenship Rd, 78495 Calle Tampico Suite 325 La Quinta, California 92253 City, State, ZIP: West Linn, OR, Email: dcastro@laquintaca.gov 97068 clflores@laquintaca.gov Email: jeff@blackhawkd.com With Copy to RUTAN & TUCKER, LLP Attention: William H. lhrke, Esq. 18575 Jamboree Road, 9th Floor Irvine, California 92612 Email: bihrke@rutan.com Either Party may change its contact information for the purpose of this Section by giving written notice of the change to the other Party. 5 /015610-0203 20259475.3 a03/06/24 11. Amendments. This Agreement may be modified solely by written amendment signed by both City and Developer. City's City Manager, or designee, may execute any such amendment or other document or instrument implementing this Agreement or the purpose hereof on behalf of City without further authorization by the City Council unless such amendment or other document would result in material expense to City or increase the risks or liabilities to City associated with this Agreement. 12. Attorneys' Fees. If City incurs attorneys' fees in order to enforce, defend or interpret any of the terms, provisions or conditions of this Agreement or because of a breach of this Agreement by Developer, and the City is the prevailing Party, whether by suit, negotiation, arbitration or settlement, City shall be entitled to recover from Developer reasonable attorneys' fees for said attorneys' fees. 13. Authority. Each Party represents and warrants that all necessary action has been taken by such Party to authorize the undersigned to execute this Agreement. 14. City Officers and Employees. No officer or employee of City shall be personally liable to Developer or any successor in interest in the event of any default or breach by City or for any amount which may become due to Developer or to its successor or for breach of any obligation of the terms of this Agreement. 15. Construction and Interpretation. The language of each part of this Agreement shall be construed simply and according to its fair meaning and the applicable rules of interpretation of contracts under the law of the State of California, and this Agreement shall not be construed either for or against either Party, whether or not that Party drafted all or a portion hereof. 16. Covenant against Discrimination. Developer covenants that, by and for itself, its heirs, executors, assigns, and all persons claiming under or through them, that there shall be no discrimination against or segregation of, any person or group of persons on account of any impermissible classification under federal, state, or local law, including, but not limited to, race, color, creed, religion, sex, marital status, sexual orientation, national origin, or ancestry in the performance of this Agreement. Developer shall take affirmative action to ensure that applicants are employed and that employees are treated during employment without regard to their race, color, creed, religion, sex, marital status, sexual orientation, national origin, ancestry, or any other protected classification under federal, state, or local law. 17. Governing Law, Venue. This Agreement has been made in and shall be construed in accordance with the laws of the State of California without regard to conflict of law principles, and exclusive venue for any dispute or judicial action involving this Agreement shall be in Riverside County, California in any federal or state tribunal in said county. 18. Integration. This agreement between City and Developer expressly integrates and incorporates by reference the Approvals (including COAs) respecting Developer's obligations to reimburse the City for Costs incurred by the City for the reasons set forth in Recital F of this Agreement. Any agreements or representations of City and Developer 6 /015610-0203 20259475.3 a03/06/24 with respect to the subject matter of this Agreement not expressly set forth in this Agreement or incorporated herein are superseded by the terms of this Agreement. Additionally, the Parties hereto are parties to that certain "Indemnification and Release Agreement" with the same date as the Effective Date of this Agreement, related to the Project and Approvals, and nothing contained in this Agreement shall supersede, modify, or invalidate any provision of the Indemnification and Release Agreement, nor shall any provision of the Indemnification and Release Agreement supersede, modify, or invalidate any provision of this Agreement. 19. No Third -Party Beneficiaries. There are no third -party beneficiaries under this Agreement and no such third parties shall have any rights or obligations hereunder. 20. Remedies Not Excusive. No remedy conferred by any of the specific provision of this Agreement is intended to be exclusive of any other remedy and each and every remedy shall be cumulative and shall be in addition to every other remedy given hereunder or now or hereafter existing at law or in equity or by statute or otherwise. The election of any one or more remedies shall not constitute a waiver of the right to pursue other available remedies. 21. Section Headings and Subheadings. The section headings and subheadings contained in this Agreement are included for convenience only and shall not limit or otherwise affect the terms of this Agreement. 22. Severability. If any part, term, or provision of this Agreement is held by a court of competent jurisdiction to be illegal or in conflict with any law, the validity of the remaining provisions shall not be affected, and the rights and obligations of the Parties shall be construed and enforced as if this Agreement did not contain the particular part, term, or provision held to be invalid. 23. Successors. This Agreement shall be binding on and inure to the benefit of the successors and assigns of the respective Parties hereto. However, this Agreement shall not be assigned by Developer in whole or in part without the prior written consent of City, which shall not be unreasonably withheld, conditioned, or delayed. Developer is solely responsible to ensure that any and all successors in interest to the Project, Approvals, or the real property on which the Project is proposed acknowledges and accepts all requirements of this Agreement, and that any such successor in interest executes an assignment and assumption agreement assuming all obligations herein, in a form acceptable to City, to which City shall be either an express third -party beneficiary or signatory to said assignment and assumption agreement. 24. Survival. All obligations arising prior to the expiration or termination of this Agreement and all provisions of this Agreement allocating liability between the Parties shall survive the expiration or termination of this Agreement. 25. Timing Matters. Time is of the essence for performance of this Agreement. The term "days" as used herein refers to calendar days. 7 /015610-0203 20259475.3 a03/06/24 26. Waiver of Breach; Form of Approvals. Any waiver of a breach of any term of this Agreement shall not constitute a waiver of any further breach of the same or any other term of this Agreement. All approvals, waivers, or consents required or contemplated by this Agreement shall be in writing, and references to any approvals, waivers or consents shall be deemed to refer to written approvals, waivers, or consents. 27. Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be an original, but all of which together shall constitute one instrument executed on the same date. Electronic or facsimile signatures on this Agreement shall be treated as original signatures and shall have the same binding affect upon the party delivering that signature as an original document. IN WITNESS WHEREOF the Parties hereto have executed this Agreement as of the day and year first hereinabove written. [Signatures on Following Page] 8 /015610-0203 20259475.3 a03/06/24 CITY DEVELOPER City of La Quinta, a California municipal Troutdale Village, LLC, a California corporation and charter city limited liability company McMillen, qty Manager Attest: April 5, 2024 Monika Radeva, City Clerk Approved as to Form: William H. Ihrke, City Attorney /015610-0203 20259475.3 a03/06/24 Na e: a arker Title: Managing Member Name: Title: 9