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2025-07-01 TBE RE Acquisition Co II, LLC, Meridian Consultants, LLC, & LQ 3-Party CEQA Review Agr SRRAGREEMENT CEQA REVIEW AND DOCUMENT PREPARATION SILVERROCK PROJECT PHASE 1 PROJECT UPDATE PROJECT: In re SilverRock Development Co. et al. U.S. Bankr. Ct., Dist. of Delaware, Case No. 24-11647 et al. (Turnbridge Proposal) This agreement, hereinafter referred to as the "Agreement," is made and entered into by and between the City of La Quinta ("City"), Applicant TBE RE ACQUISITION CO II LLC ("Applicant"), and MERIDIAN CONSULTANTS LLC ("Consultant") for purposes of establishing the rights and responsibilities of all undersigned parties hereto in relation to the preparation and review of environmental review documentation for the above - referenced proposed project ("Project"). WHEREAS, City is the Lead Agency pursuant to the California Environmental Quality Act, Public Resources Code §§ 21000 et seq. ("CEQA"), as implemented through Title 14, Section 15000 et seq. of the California Code of Regulations ("CEQA Guidelines"), with land use and planning jurisdiction over the Project area, which is located in the City of La Quinta; and WHEREAS, except for portions of land transferred to SilverRock Development Company, LLC, a Delaware limited liability company (or one of its affiliated companies, which are referred to herein collectively as "SDC" or "Debtor(s)")1 as explained below in the next Recital Paragraph, City owns fee title to that certain real property of approximately 525 acres located at the southwest intersection of Jefferson Street and Avenue 52, in the City of La Quinta, California, generally referred to as the "SilverRock Resort Area" and subject to a Specific Plan adopted by the La Quinta City Council and enforceable as a land use governing document pursuant to the Planning and Zoning Law, California Government Code section 65000 et seq. (the "SilverRock Specific Plan"); and WHEREAS, on or about November 19, 2014, City and SDC entered into that certain Purchase, Sale, and Development Agreement (the "Original PSDA"), pursuant to which, among other terms and conditions, City agreed to sell to Developer and Developer agreed to purchase from City specified "Planning Areas (PAs)" to thereafter construct, complete, and operate thereon a commercial project containing a luxury resort hotel and spa and associated branded luxury residential units, a lifestyle hotel and associated lifestyle branded residential units, a conference and shared service facility, a temporary and permanent clubhouse for the SilverRock Resort's Arnold Palmer Classic Course, a mixed use village, a resort residential village, and associated amenities, all as further 1 Debtors are SilverRock Development Company, LLC and affiliated entities that filed for voluntary bankruptcy protection under chapter 11 of the U.S. Bankruptcy Code, with case number(s) identified in the Title of this Agreement along with the last four digits of each Debtor's federal tax identification number, as applicable, are: SilverRock Development Company, LLC (5730), RGC PA 789, LLC (5996), SilverRock Lifestyle Residences, LLC (0721), SilverRock Lodging, LLC (4493), SilverRock Luxury Residences, LLC (6598) and SilverRock Phase I, LLC (2247) (collectively, referred to herein as the "Bankruptcy Lawsuit" in the "Bankruptcy Court"). Debtors' principal place of business and the Debtors' mailing address is 343 Fourth Avenue, San Diego, CA 92101. -1- 135281-00000001 /9583203.2 described in the Original PSDA as the "Project Components," as more particularly described therein. Concurrent with the Original PSDA, on or about November 19, 2014, City and SDC entered into Development Agreement 2014-1001 (the "Development Agreement") pursuant to state law (California Government Code section 65864 et seq. and referred to as the "Development Agreement Law"), which agreement, among other terms and conditions, required SDC to develop the Planning Areas and Project Components in accordance with the PSDA, vested with SDC specified development obligations, memorialized the potential for the future acquisition of additional City -owned property in the SilverRock Resort Area as incorporated vis-a-vis the PSDA, and subjected SDC to City's rights and oversight for those portions of the SilverRock Resort Area to be conveyed to SDC. Since entering into the Original PSDA and Development Agreement, the following relevant events, very briefly summarized, have occurred: • Pursuant to the Original PSDA, City and SDC had the authority to amend the Original PSDA by mutual agreement of the parties. Between October 29, 2015, and November 16, 2023, City and SDC entered into five amendments thereto, dated October 29, 2015 ("First Amendment"), April 18, 2017 ("Second Amendment"), November 28, 2018 ("Third Amendment"), October 12, 2021 ("Fourth Amendment"), and November 16, 2023 ("Fifth Amendment," and the Original PSDA as amended by all five amendments is referred to herein as the "PSDA"); • Pursuant to the PSDA and consistent with boundaries established by applicable subdivision maps and lot line adjustments, City conveyed to SDC approximately 134+/- acres of the SilverRock Resort Area (referred to herein as the "SDC-Held Property(ies)") for the pre -development, development, operation, and use of a project that was eventually re -named "Talus" and consisted of the following Project Components (all as defined in the PSDA): Luxury Hotel, Luxury Branded Residential Development, Lifestyle Hotel, Lifestyle Branded Residential Development, Conference and Shared Services Facility (including spa and other amenities), Permanent Golf Clubhouse, Promenade Mixed -Use Village/Resort Residential Village (on Planning Areas 7,8,9), as well as a specified Golf Course Realignment and corresponding Master Site Infrastructure Improvements (MSII). These Project Components on the SDC-Held Property(ies), pursuant to the PSDA, were divided into "Phase 1A Property" and "Phase 1A Project Components," and "Phase 1 B Property" and "Phase 1 B Project Components," respectively, with the Phase 1 B Project Components comprised of the Promenade Mixed -Use Village/Resort Residential Village (on Planning Areas 7,8,9), and the Phase 1A Project Components comprised of the balance of the Project Components listed above; • Pursuant to the Third and Fourth Amendments to the PSDA, SDC commenced pre -development and development of the Phase 1A Property and Phase 1A Project Components, which currently are and remain, in various degrees, partially constructed after SDC failed to continue to make -2- 135281-00000001 /9583203.2 payments to various contractors, subcontractors, and other interested parties in the development of the Talus project. Multiple lawsuits, including lawsuits seeking payments pursuant to mechanic's lien or various loan or investment agreements, and a City lawsuit against SDC for unlawful and unapproved conveyances in secured interests or mechanic's liens, were filed against SDC; • On August 5, 2024, SDC (Debtors) filed the Bankruptcy Lawsuit, and, pursuant to Bankruptcy Court -approved Bid Procedures, Debtors retained a Chief Restructuring Officer (Douglas Wilson Companies) and marketing professional (JLL) for the purposes of, among other items, marketing the sale of the Debtors estate (which and is primarily comprised of the SDC- Held Property(ies)) and soliciting proposals for the: (a) acquisition of the Debtors estate, (b) use, re -use, and/or substitution of the partially constructed improvements on the Phase 1A Property, (c) potential replacement project for a world -class hotel and residential destination resort with related amenities on the SDC-Held Property(ies) that complement the existing Arnold Palmer Golf Course surrounding the SDC-Held Property and owned by City, and (d) possible acquisition in the future of City -owned real property in the SilverRock Resort Area (referred to as the Future Option Property in the PSDA and generally referred to in the Bankruptcy Lawsuit and marketing materials as the "Phase 2 Property") for possible future development that would also complement a world -class hotel and residential destination resort; • Applicant submitted a proposal in response to the marketing materials, and, pursuant to the Bankruptcy Court -approved Bid Procedures, Debtors and City approved Applicant's proposal, which, among other terms and conditions, includes a modified project on the SDC-Held Property(ies), referred to as the "Project" herein and constitutes a "project" under CEQA; and WHEREAS, Applicant has submitted a letter of intent proposing certain modifications to the existing approvals to develop the Project, and Applicant requests City to approve the necessary agreements or other discretionary entitlements needed to implement those proposed Project modifications; and WHEREAS, City is authorized under CEQA to choose from among the following arrangements or combination of arrangements for preparing the document(s) necessary to satisfy the requirements of CEQA: preparation directly by City staff; contracting with another public or private entity to prepare the document(s); accepting draft materials prepared by Applicant, a consultant retained by Applicant or any other person; or executing a three -party contract with Applicant and/or independent contractor to govern the preparation by an independent contractor working on behalf of City; and WHEREAS, Applicant and City have agreed to enter into this three -party contract, have chosen to select and retain Consultant to prepare all necessary CEQA -3- 135281-00000001 /9583203.2 documentation and oversee all necessary expert studies and reports on behalf of City; and WHEREAS, Consultant is or has become familiar with the previously prepared CEQA documents associated with the original project approvals that were applicable for SDC's project as approved previously by City, and Consultant has an interest in preparing CEQA documents necessary to evaluate any new or substantially more severe environmental effects that may be caused by the modifications proposed by Applicant's Project in a manner that is satisfactory to City to ensure compliance with all applicable legal requirements and to ensure Applicant's continued eligibility to prepare CEQA documents for consideration by City for future development projects; and WHEREAS, City, Applicant, and Consultant understand and agree that the adequacy of performance of Consultant shall be determined at the sole reasonable discretion of City, who retains the authority and responsibility to exercise its independent judgement in reviewing and considering the CEQA documents prepared by Consultant, and that Consultant's responsibility to provide complete and accurate CEQA documents is owed solely to City; and WHEREAS, City, Applicant, and Consultant wish to define their relationships and areas of responsibility in the preparation and management of the CEQA document(s) and CEQA review process in connection with Applicant's Project. NOW, THEREFORE, in view of the foregoing, and in consideration of the mutual covenants and agreements contained herein, City, Applicant, and Consultant do hereby agree as follows: I. CERTIFICATIONS By executing this Agreement: A. Applicant certifies that it has an ongoing obligation and commitment to City to disclose all information in its possession or which it becomes aware of that is relevant to the environmental consequences of the Project and the preparation of the CEQA documents, and further certifies that no relevant information has been or will be omitted or withheld from City, Consultant or any sub- consultant(s). B. Consultant certifies: 1. That it is a professional environmental consulting firm with experience in the preparation of CEQA documents; it is in good standing with City; and it is prepared to undertake all necessary technical and analytical work required in conjunction with the CEQA review of the Project and proposed modifications thereto, either directly or through the use of any sub-consultant(s); and -4- 135281-00000001 /9583203.2 2. That it has an ongoing obligation and commitment to City to disclose all information in its possession, or of which it becomes aware, that is relevant to the environmental consequences of the Project and the preparation of the CEQA documents, and further certifies that no relevant information has been or will be omitted or withheld from City at the request of Applicant or for any other reason. Consultant shall require any sub-consultant(s) to certify these same obligations and commitments to City and shall provide a copy of such certification to City within ten (10) days of retaining such sub- consultant(s). II. APPLICANT'S RIGHT AND RESPONSIBILITIES A. Subject to the terms and conditions of this Agreement, Applicant shall be responsible for one hundred percent (100%) of all costs associated with Consultant's work, including but not limited to, any sub-consultant(s) costs, document preparation and document circulation costs incurred by Applicant or Consultant, and all costs associated with participation in any meetings, as necessary. Applicant promptly shall reimburse City, or, at City's instruction, directly pay to Consultant, all fees, costs and other amounts as are or may become due to Consultant in connection with Consultant's work under this Agreement. B. Applicant shall cooperate fully with City in the land use and planning activities related to the Project and in the preparation of the CEQA documents(s) and shall cooperate with City with respect to the day- to-day management of Consultant in the preparation of the CEQA document(s) and associated technical reports and other evidence. C. Consultant shall inform City of meetings or conference calls between Applicant, Consultant and/or any sub-consultant(s) related to the Project or any CEQA document prepared in connection with the environmental review of the Project. This communication may be through the use of electronic mail or telephone call to City. D. To the extent feasible, Applicant shall ensure that any sub- consultant(s) hired in conjunction with the preparation of the CEQA document(s) and related technical reports for and related to the Project shall comply with all terms and conditions set forth in this Agreement. E. Applicant shall not enter into any form of confidentiality agreement with Consultant or any sub-consultant(s), which prohibits disclosure of Project -related environmental information to City or other public agencies. -5- 135281-00000001 /9583203.2 III. CONSULTANT'S RIGHTS AND RESPONSIBILITIES A. Consultant shall have an ongoing obligation and commitment to City to disclose all information in its possession, or of which it becomes aware, that is relevant to the environmental consequences of the Project and the preparation of the CEQA document(s). Consultant shall not omit or withhold any relevant information from City at the request of Applicant or for any other reason. Consultant shall require any sub consultant(s) to certify these same obligations and commitments to City and shall provide a copy of such certification to City within then (10) days of retaining such sub-consultant(s). B. Consultant's responsibility to provide complete and accurate CEQA document(s) is owed solely to City and Consultant's accountability under this Agreement shall be solely to City, and not to Applicant or to any person or entity. C. Consultant shall ensure that any sub-consultant(s) hired in conjunction with the preparation of any CEQA document and/or related technical reports shall comply with all terms and conditions set forth in this Agreement. D. Consultant shall draft the CEQA document(s) for the project in accordance with the directions and specifications set forth by City, or its designee, related to both form and content. Consultant shall perform all activities necessary for the preparation of the CEQA document(s), including coordinating the day-to-day processing and creation of the final, public version of all CEQA document(s). E. Consultant shall verify and ensure that all CEQA documents prepared by itself and by any sub-consultant(s) utilize accurate and verifiable field techniques in accordance with generally accepted industry standards, and are in conformance with all applicable CEQA requirements, and all applicable City, State, and Federal rules and regulations. F. Consultant shall verify and ensure that all CEQA documents prepared by itself and by any sub -consultants represents its complete and independent professional judgment and analysis of the specific environmental issues, setting, potential impacts, and mitigation measures associated with the Project. G. Consultant shall maintain, inclusive of any sub-consultant(s), a record of communications with Applicant, and such record shall be submitted to City for review upon request. H. Neither Consultant nor any sub-consultant(s) may be a subsidiary of Applicant or have any financial interest in the proposed Project or -6- 135281-00000001 /9583203.2 any other property or development in which Applicant has a financial interest. IV. CITY'S RIGHTS AND RESPONSIBILITIES A. City has the sole right and discretion to determine the adequacy of performance of Consultant and any sub-consultant(s). Final authority on all decisions concerning preparation of the CEQA document(s) shall lie with City. B. In accordance with the requirements of CEQA, it is the responsibility of City to provide its independent review and analysis of all CEQA documentation for the Project. C. City shall have the right to attend, or participate in, any and all meetings or conference calls as described in paragraph II(C) of this Agreement. D. City shall have the right to request copies of any and all correspondence, meeting schedules, minutes, and draft technical reports generated by Consultant, any sub-consultant(s) and Applicant, in connection with the preparation of the CEQA document(s). Upon request by City, Consultant shall make available to City any and all field notes, resource documents, and supplemental technical studies used in the preparation of the CEQA document(s). Submission of the requested materials pursuant to this provision must be accomplished within a reasonable timeframe and in the format directed by City. E. City shall monitor and review changes to any CEQA document(s) during each iteration of the formal City screen check review. This requirement does not preclude Applicant from commenting on the contents of any report or document. F. The La Quinta City Manager ("City Manager") has existing authority to enter into this Agreement on behalf of City to pay for Consultant's costs in an amount up to and including $50,000. If City is anticipated to have the obligation, or incurs the obligation, to pay Consultant for services rendered under this Agreement in an aggregate amount exceeding $50,000, Consultant and Applicant understand and agree that any additional amounts to be paid by City to Consultant, which would result in an excess of $50,000 being paid by City to Consultant, shall require the approval of the La Quinta City Council ("City Council") and amendment to this Agreement memorializing the City's ability to pay Consultant for costs in amounts exceeding $50,000. To the extent Applicant either timely and continuously pays Consultant on behalf of City or timely and continuously reimburses -7- 135281-00000001 /9583203.2 City pursuant to Section I(A) of this Agreement (referred to as the "Paid Consultant Amount(s)"), so that City has no payment obligation to Consultant and no unreimbursed amounts owing from Applicant during the Term of this Agreement, then City shall be deemed not to have paid to Consultant the amount of City funds equal in amount to the Paid Consultant Amount(s) for purposes of calculating the $50,000 threshold and determining whether City Council approval is required for additional City authority to pay Consultant costs as provided in this Section IV(F). V. EXPIRATION This Agreement shall expire at the time that all City actions on Applicant's Project entitlement applications and agreements becomes final and after any legal challenges associated with the Project have been finally adjudicated. The "Term" of this Agreement shall commence on the date upon which all Parties have executed this Agreement and shall terminate on the expiration date described in the previous sentence of this Section V. VI. COUNTERPARTS This Agreement may be executed in counterparts. [signatures on next page] -8- 135281-00000001 /9583203.2 IN WITNESS WHEREOF, the City, Applicant, and Consultant have caused this Agreement to be executed below: CITY OF LA QUINTA, a California municipal corporation and charter city Jon illen, City Manager Dated: -7 Z S ATTEST: Monika Radeva, CW Clerk APPROVED AS TO FORM: RUTAN & TUCKER, LLP William H. Ihrke, City Attorney APPLICANT Michael Gazzano, Managing Director TBE RE ACQUISITION CO II LLC Dated: 6/25/2025 CONSULTANT Prin ipal: Tony Locacciato, AICP, Partner Meridian Consultants LLC Dated: June 24, 2025 -9- 135281-00000001 /9583203.2