2013 - 30138 Diamante - SoCal Portfolio I, LP Development Improvement AgrmtDEVELOPMENT IMPROVEMENT AGREEMENT
THIS DEVELOPMENT IMPROVEMENT AGREEMENT ("Agreement") is made and
entered into as of MU &, 2013 (`'Effective Date") by and between the CITY OF LA
QUINTA, a municipal corporation operating pursuant to a Charter adopted by it as authorized by
the State of California ("City") and SOCAL PORTFOLIO I LP, a Delaware limited partnership
("SoCal"). City and SoCal are sometimes referred to herein separately Asa "Party" and jointly
as the "Parties."
RECITALS:
A. SoCal is the current owner in fee of that certain real property located in the City,
Riverside County ("County"), California ("State"), described in Exhibit "A" ("Property").
B. While the Property was under prior ownership, the City approved Tentative Tract
Map No. 30138 and Conditions of Approval ("Conditions of Approval") for that tentative tract
map. On October 13, 2006 City and La Quinta Developers, LLC, ("La Quinta Developers"), a
prior owner of the Property, caused to be recorded Tract Map 30138 ("Map") as Instrument No.
2006-0757452. Pages 31 to 35, inclusive, of Maps in the Office of the County Recorder of the
County. The Property, together with the recorded Map and approved Conditions of Approval,
has been referred to from time to time as the "Diamante Project," the "Diamonte Project" and the
"Monaco Project"; for clarity purposes, the Property, the Map and the Conditions of Approval
shall be referred to herein simply as the "Project"
C. While under the ownership and control of La Quinta Developers, certain initial
actions were taken to commence development of the Project. Those actions included posting
with the City certain labor and material bonds and performance bonds (collectively, the "Bonds")
issued by Travelers Casualty and Surety Company of America ("Travelers") in favor of the City
as beneficiary for certain improvements related to the Project, some of which are subdivision
improvements (referred to herein as "On -Site Improvements") and some of which are
improvements within the public rights -of -way (referred to herein as "Off -Site Improvements")
(the On -Site Improvements and the Off -Site Improvements are sometimes referred to herein
collectively as the "Improvements"). The improvements are set forth in Exhibit `B" and Exhibit
"C" hereto.
D. La Quinta Developers subsequently lost ownership of the Property. A dispute
then arose between Travelers and the City regarding the unfinished bonded Improvements and
the use of the principal amounts on the Bonds. A settlement was reached according to terms set
forth in that certain "Settlement Agreement" dated December 5, 2012, whereby Travelers agreed
to pay to the City $1,000,000.00 (the "Bond Fund") in final and complete settlement of all
obligations of Travelers concerning the Project, and City agreed to accept the Bond Fund in full
settlement. Said funds have been collected by the City, and have been placed in a separate bank
account for use as specified in this Agreement.
E. City desires that the Off -Site Improvements and certain of the On -Site
Improvements be completed.and has proposed to SoCal that City will make available to SoCal
wCH\30615.000e429257.1 12114n012 1
the Bond Fund if SoCal agrees to complete those Off -Site Improvements and the specified On -
Site Improvements as a priority (collectively, "Priority Improvements" as identified in Exhibit
"D" hereto), and that if SoCal so agrees, then the balance of the Bond Fund (if any) could be
used by SoCal for other On -Site Improvements.
F. As of the Effective Date SoCal has identified certain plans and specifications
(collectively, the "Plans") previously prepared for the Project, which are in various stages of
completion and or prior approval. The Plans are specifically identified in Exhibit "F."
G. The City is agreeable to using the Bond Fund to complete the Improvements (with
emphasis on the Priority Improvements) to the extent of the available Bond Fund.
Based on the foregoing Recitals, and in consideration of the covenants, terms and
conditions set forth hereinafter, the Parties agree as follows:
AGREEMENT:
Recitals.
1.1 Recitals True and Correct. The Recitals are true and correct.
1.2 Defined Terms. All defined terms therein are adopted below.
2. Improvements: Use of Bond Fund.
2.1 General Contractor. SoCal shall enter into a contract ("General Contract')
with a General Contractor, licensed and insured in the State of California. Until such time as the
General Contract is fully executed, the SoCal Contact Person (defined below) shall be the
contact person for SoCal. As soon as the General Contract is executed, SoCal will notify City of
the General Contractor and its contact person who thereafter shall be the authorized agent of
SoCal and shall be the Contact Person for SoCal. Through the General Contractor, SoCal shall
cause the completion of the Improvements pursuant to the Approved Plans (defined below), to
the extent reasonably possibly, and subject to the terms and conditions herein, including the
availability of proceeds from the Bond Fund. The City may use proceeds from the Bond Fund as
compensation for costs incurred by the City due to the default of La Quints Developers,
including but not limited to, legal and administrative costs. SoCal will cause the General
Contractor to apply and pay for an encroachment permit for constructing improvements in the
public right-of-way.
2.2 Insurance. SoCal agrees to require General Contractor to carry a policy of
Commercial General Insurance naming City and SoCal as additional insureds as to the
Improvements, with coverages in accordance with the terms specified in Exhibit "E."
2.3 Construction Schedule. After the General Contractor is hired, SoCal and
General Contractor shall prepare and submit to the City an estimated construction
commencement, progress and completion schedule ("Construction Schedule"). The
W CH130616.0006b429267.1 12I1412012
Construction Schedule will be updated from time to time as processing, construction and Force
Majeure conditions (defined below) affect it.
2.4 Priority Improvements. Commencement of, and completion of,
construction the Priority Improvements shall be a priority in the General Contract and in the
Construction Schedule, but it is understood that other Improvements might require completion in
order to facilitate work on the Priority Improvements.
2.5 Expedited Reviews and ApRLoyals. City agrees to provide expedited
review for all plans (both new and as refreshed as previously approved plans) and for any permit
applications that require City approvals or issuance. This expedited review and approval process
shall be coordinated through the City Contact Person (defined below).
2.6 City Assistance. City agrees to assist SoCal and General Contractor, as
reasonably possible, with all processing with Coachella Valley Water District ("CVWD") and
the La Quinta City Fire Department ("Fire Department") and all other public agencies regarding
processing and approval of plans necessary in connection with the Improvements, and including
obtaining all rights -of -way and other permits required for the Improvements.
2.7 Prevailing Wages. As City is a charter city and has elected under its
charter not to be subject to the State's prevailing wage requirements, construction contracts
entered into by SoCal and General Contractor requiring the use of the Bond Fund shall not be
required to be subject to such prevailing wage requirements.
3. Bond Fund, Payment of Construction Invoices.
3.1 Annroved Plans. Once the General Contract is executed, General
Contractor shall cause commencement of construction of the Improvements in accordance with
the Construction Schedule, emphasizing focus on the Priority Improvements in the order as listed
in Exhibit "D." Initial emphasis by General Contractor shall be to work with City, CV WD and
Fire Department to refresh previously approved plans and gain final approval for any previously
uncompleted and approved plans for each of the Improvements (collectively when approved, the
"Approved Plans"). The City shall have the final say and control over the priority of the
Improvements to be constructed with the Bond Fund, as well as the expenditures to be made
from the Bond Fund. The City shall have no liability for any construction or other costs which
exceed the balance of the Bond fund.
3.2 Processing. Approval and Payment of Invoice Package. Subsequent to
commencement of construction, SoCal shall submit to the City, on not less than thirty (30) day
cycles ("Invoice Submittal Date"), an Invoice Package (defined below) for work completed
during the period which is the subject of the Invoice Package. City will have ten (10) business
days within which to notify SoCal of any deficiency claimed by City in the Invoice Package, and
City, SoCal and General Contractor shall promptly meet and attempt in good faith to resolve
such issues. City shall, not later than thirty (30) days following the Invoice Submittal Date, pay
to SoCal from the Bond Fund Account the invoiced amount, less any amount disputed by the
City. SoCal may request preapproval of expenses prior to incurring the charges to ensure that
wcau0515.0006\429252.112n4n012
the expenses are eligible for reimbursement. The City Engineer is authorized to preapprove
these expenses, in writing, on behalf of the City.
3.3 Invoice Package. The Invoice Package shall consist of the following:
a. The Invoice on form previously agreed to by City and General
Contractor, reasonably describing the Improvement work (including
all fees, charges and other costs incurred General Contractor or
SoCal) by invoiced for and its relation to the Construction Schedule
and the Priority Improvements (if applicable);
b. All appropriate lien releases (or partial lien releases);
c. Certification by a California licensed civil engineer that the
Improvement work (or discrete component thereof) has been completed
in accordance with the Approved Plans.
3.4 Withholding of Funds. The City shall withhold $75,000 out of the Bond
Fund to cover expenses associated with (a) jobsite dust control; (b) remedial grading, if needed
due to default or non-performance of General Contractor, in order to make the jobsite safe; and
(c) payment of any claims, stop notices, or mechanic's liens filed against the City as a result of
work on the site. At the conclusion of 35 days after City Council acceptance of the
Improvements, the $75,000 would become eligible for reimbursement to SoCal for completion of
additional eligible Improvements.
4. Insurance.
4.1 Commercial General Liability Insurance. General Contractor shall be
required, through the General Contract, to carry the insurance coverage (at a minimum)
described in Exhibit "E" in full force at all times during construction of the Improvements, with
City and SoCal named as additional insureds.
5. Construction Schedule: Force Majeure.
5.1 Adherence to Construction Schedule: Unavoidable Delays. While General
Contractor will be required to exercise reasonable best efforts to adhere to the Construction
Schedule, particularly as it pertains to the Off -Site Improvements, it is understood that the
Construction Schedule is a good faith estimate of General Contractor's completion of the
Improvements, and is subject to modification, from time to time, by General Contractor as
elements effecting that schedule arise, including unavoidable delays ("Force Majeure") caused
by earthquake, flood, inclement weather, industry -wide labor strikes, shortages of required
materials, spill of hazardous substances, or interferences by public agencies requiring
modifications to the Approved Plans, work schedules, or methods of operation.
WC1N0615.00061429257.1 12/142012 4
5.2 No Third Party Ben_ efciarv, The Parties agree that they do not intend that
the General Contractor is a third party benefici
General Contractor has no right to enforce the proaryvis ons of this Agreemder this Agreement, and agree that the
Agreement.
6. Fees. Deposits. Refunds and Reimbursements
6.1 Fees�ts SoCal shall be entitled to full credit for all fees and
deposits previously made by La Quinta Developers or any other prior owner of the Project, and
in the event City has raised or increased such fee or deposit requirement after the date originally
made, then SoCal shall be required to pay or deposit only the difference between the original
paid fee or deposit and the new fee or deposit.
Notices.
7.1 Acceptable Methods for Notice All notices, consents and
communications to a Party or to the General Contractor shall be in writing and shall be deemed
to have been duly given when (a) delivered by hand with a signed delivery receipt requested, (b)
sent by facsimile (with receipt confirmed), provided a copy is mailed on the same day by
registered mail, return receipt requested, or (c) received by the addressee, if sent by U.S. Mail or
Express Mail, Federal Express or other express delivery service (receipt requested), in each case,
to the appropriated addresses and telecopier numbers set forth below (or to such other addresses
or telecopier numbers as a Party or General Contractor might designate as to itself by notice to
the others).
7.2 To the City All notices to the City shall be delivered to the following:
Frank Spevacek
City Manager
City of La Quinta
78-495 Calle Tampico
La Quinta, CA 92253
Telephone: (760) 777-7030
Facsimile: (760) 777-7155
Email: citymanagersoffice@la-quinta.org
MA copy to
M. Katherine Jenson
Rutan & Tucker, LLP
611 Anton Blvd., Suite 1400
Costa Mesa, CA 92626
Telephone: (714) 641-3413
Facsimile: (714) 546-9035
Email kienson ratan com
WC iUO615.00061429257.1 12/142012
7.3 To SoCal: Until the General Contract becomes effective and the General
Contractor is identified, all notices to SoCal's authorized agent shall be delivered to the
following:
Jonathan M. Weldy
Meridian Land Development Co.
19153 Town Center Drive, Suite 106
Apple Valley, CA 92308
Telephone: (760) 240-5511 ext. 222
Cell: (909) 380-9919
Email: iweldynn meridianldc.com
with cony to
William C. Holzwarth
Dzida, Carey & Steinman
8657 Conservation St. NE
Ada, MI 49301
Telephone: (951) 300-2000
Facsimile: (616) 682-5480
Email: wholzwarth@dcslaw.com
8. General Provisions.
8.1 Applicable Law. This Agreement shall be governed by and interpreted in
accordance with the laws of the State.
8.2 Assignment. SoCal shall not assign this Agreement to any other person or
entity without the express written consent of the City.
8.3 Equitable Remedies. Each Party shall, in addition to all other rights
provided herein or as may be provided by law, be entitled to all equitable remedies including
those of specific performance and injunction, to enforce its rights hereunder.
8.4 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed an original, but all of which when taken together
shall constitute one and the same document.
8.5 No Partnership. Nothing herein shall constitute or be construed to be or
create a partnership or joint venture between the City on the one hand and either SoCal or
General Contractor on the other.
8.6 Entire Agreement. This Agreement, together with any Exhibits referred to
herein, each of which is hereby incorporated in this Agreement and made a part hereof, embodies
the entire agreement and understanding between the Parties and supersedes all prior agreements
and understandings between them with respect thereto.
WCH130615.0006\429257.1 12/142012
Date. IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
SOCAL PORTFOLIO I LLC, a Delaware
limited liabilitviromDafiv
President
CITY OF LA QUINTA, a municipal
corporal on
ank pe ek, City Manager
Attest to City Manager's Signature:
By: SV 4A4,.
Susan Maysels, Cit Clerk
Approved as to Form
SIGNED IN COUNTERPART
Allison LaMoine-Bui
Deputy City Attorney
La Quinta, California
WCM30615.00061429257.1 12/14/2012
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective
Date.
SOCAL PORTFOLIO I LLC, a Delaware
limited liabilitMorm) Av
President
W CM 0615.0006\429257.1 121142012
7
CITY OF LA QUINTA, a municipal
corporation
By:
Frank Spevacek, City Manager
Attest to City Manager's Signature:
By:
Susan Maysels, City Clerk
ApproveO as to /w
By: AF�orrm,
fig �VV-U� �
Allison LaMoine-Bui
Deputy City Attorney
La Quinta, California
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
State of Calif rnia
County of
On 404 � 2I 11�1 before me,
[Date]
YAi4 t- Nktm ,I o�AN QUVGj,"
[Name of Notary Public and Tide "Notary
personally appeared y� 1-edZ
[Name(s) of signer(s)]
who 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.
Signature of Notary Public
MELANIE ANDREWS
'Comm. #1894543
W Notary Public • California;,
Orange County
CommZ res1u13,2014
(seal)
EXHIBIT "A"
Property Description
The Property referred to in the within Agreement is that certain real property located in the City
of La Quinta, Riverside County, California, more particularly described as:
Lots I through 47, inclusive, and Lots "A" through "I," inclusive, as shown on a Map of Tract
No. 30138, as per plat recorded in Book 411, Pages 31 through 35, inclusive, of Maps, Records
of Riverside County, California.
WCiN0615.0006\429257.1 12!14/2012
EXHIBIT "B"
ON -SITE IMPROVEMENTS
1. Engineering costs required to complete and/or update construction plans and
specifications
2. Engineering survey/staking and Geotechnical testing and support as required
3. Professional fees for management of the installation of on -site improvements
4. Mobilization/demobilization
5. Survey/Layout
6. Clearing, grubbing and cleanup
7. Complete rough and fine grading of lots & on -site streets
8. Import and/or export of soil as required to complete grading work
9. Grading at retention basins
10. Erosion/Dust Control
11. Domestic water system
12. Fire hydrants and fire water piping
13. Sanitary sewer system
14. CVWD Punch list and inspection fees
15. Natural gas system
16. Electrical and other dry utility systems
17. Concrete curbs & gutters
18. Storm drain systems
19. AC pavement over aggregate base
20. Catch Basins
21. Concrete driveways
22. Maxwell plus drainage systems
23. Local depressions
24. Manholes per City of La Quints
25. Stop signs
26. Striping at streets
27. Blue rpms at fire hydrants
28. Street signs
29. Construct masonry block walls with wrought iron fencing
30. Chain link and steel fences and gates
31. Landscape/Irrigation
32. Permits
33. City Inspection Fees
34. Final Monumentation
EXHIBIT "C"
OFF -SITE IMPROVEMENTS
1. Engineering costs required to complete and/or update construction plans and specifications
2. Engineering survey/staking and Geotechnical testing and support as required
3. Professional fees for management of the installation of improvements
4. Mobilization/demobilization
5. Survey/Layout
6. Complete rough and fine grading within Ave. 52 ROW
7. Erosion/Dust Control
8. Traffic control
9. Fire hydrants and fire water piping
10. CV WD Sewer & Water punch list and inspection fees
11. Natural Gas stub into tract
12. Electrical and other dry utility systems
13. Concrete curbs & gutters
14. Storm drain systems
15. AC pavement over aggregate base
16. Catch Basins
17. Concrete driveways
18. Local depressions
19. Manholes per City of La Quinta
20. Stop signs
21. Striping at streets
22. Blue rpms at fire hydrants
23. Street signs
24. Landscape/Irrigation
25. Permit Fees
26. City Inspection Fees
27. Final Monumentation
Exhibit "D"
Priority Improvements
Complete construction of the following Improvements, including refreshing all plans,
permits, and other approvals associated therewith, in the following order:
a. Avenue 52 road Improvements, including the northern travel lane, curb and
gutter.
b. Drive approaches into the Tract.
C. Wall between the ROW and the Tract.
d. Center median Improvements.
e. Storm drain Improvements on Avenue 52.
On -Site detention basin connection to the drainage of Avenue 52.
g. All of the off -site Improvements, as set forth in Exhibit C.
WCH\70615.0006b129257.1 12/14/2012 11
EXHIBIT "E"
Insurance Requirements
General
Prior to the beginning of and throughout the duration of the Work, General Contractor will
maintain insurance in conformance with the requirements set forth below. General Contractor
will use existing coverage to comply with these requirements. If that existing coverage does not
meet the requirements set forth here, it will be amended to do so. General Contractor
acknowledges that the insurance coverage and policy limits set forth in this section constitute the
minimum amount of coverage required. Any insurance proceeds available to City in excess of
the limits and coverage required in this Contract and which is applicable to a given loss, will be
available to City.
General Contractor shall submit coverage verification for review and approval by the City upon
execution of the Contract.
The Notice to Proceed with the Work under this Contract will not be issued, and the General
Contractor shall not commence work, until such insurance has been approved by the City. The
General Contractor shall not allow any subcontractors to commence work on its subcontract
until all similar insurance required of the subcontractor has been obtained and verified by
General Contractor. Such insurance shall remain in full force and effect at all times during the
prosecution of the Work and until the final completion and acceptance thereof.
General Contractor shall provide the following types and amounts of insurance:
Commercial General Liability Policy
Commercial General Liability Insurance using Insurance Services Office "Commercial General
Liability" policy form CG 00 01 or the equivalent. Defense costs must be paid in addition to
limits. Limits shall be no less than Two Million Dollars ($2,000,000) per occurrence for all
covered losses and no less than Four Million Dollars ($4,000,000) general aggregate.
General Contractor's policy shall contain no endorsements limiting coverage beyond the basic
policy coverage grant for any of the following:
a. Explosion, Collapse or Underground Hazard(X CU).
b. Products and Completed Operations.
C. Pollution liability.
d. Contractual liability.
12/142012 12
Coverage shall be applicable to City for injury to employees of: contractors, subcontractors or
others involved in the project. Policy shall be endorsed to provide a separate limit applicable to
this project.
Workers' Compensation Insurance
Workers' Compensation on a state -approved policy form providing statutory benefits as required
by law with employer's liability limits no less than $1,000,000 per accident for all covered
losses.
Business Auto Poll
Business Auto Coverage on ISO Business Auto Coverage form CA 00 0106 92 including
symbol 1 (Any Auto) or the equivalent. Limits shall be no less than $1,000,000 per accident,
combined single limit. If General Contractor owns no vehicles, this requirement may be satisfied
by a non -owned auto endorsement to the general liability policy described above.
Excess or Umbrella Liability Insurance
Excess or Umbrella Liability Insurance (Over Primary) if used to meet limit requirements,
shall provide coverage at least as broad as specified for the underlying coverage. Any such
coverage provided under an umbrella liability policy shall include a drop down provision
providing primary coverage for liability not covered by primary but covered by the umbrella.
Self -insured retentions are not permitted. Coverage shall be provided on a "pay on behalf' basis,
with defense costs payable in addition to policy limits. There shall be no cross liability exclusion
precluding coverage for claims or suits by one insured against another. Coverage shall be
applicable to City for injury to employees of General Contractor, subcontractors or others
involved in the Work. The scope of coverage provided is subject to approval of City following
receipt of proof of insurance as required herein. Limits are subject to review but in no event less
than $1,000,000 per occurrence and aggregate.
Insurance procured pursuant to these requirements shall be written by insurers that are authorized
carriers in the state of California and with an A.M. Be
st rating of A- or better and a minimum financial size of VII.
wcm30615.0006w29257.1 12114n012 13
EXIIIBIT "F"
Project Improvement Plans
I. Tract Map No. 30138 Diamante; sheets 1-5, dated May 2004, recorded 10/13/06.
2. Precise Grading Plan Tract 30138 Diamante; sheets 1, 2, 3, 4, 5 & 6 updated 4/10/07.
3• Rough Grading Plan Tract 30138 Diamante; sheets 1, 2 & 3 dated 6/29/06.
4. On -Site Street & Storm Drain Improvement Plans Tract 30138 Diamante; sheets 1, 2, 3,
4, 5 & 6 dated 3/2/07.
Off -Site Street Improvement Plan Tract 30138 Avenue 52; sheets 1, 2, 3 & 4 dated
4/18/07.
6• Water Improvement Plans Tract 30138; sheets 1-5, dated 8/21/06.
Sewer Improvement Plans, Tract 30138; sheets 1-4, dated 8/21/06.
8. Encroachment Composite Plan, Tract 30138; sheets 1-2, dated 7/7/06.
9. PM10 Fugitive Dust Control Plan, Tract 30138; sheets 1-2, dated 12/6/04.
10. S.W.P.P.P., Tract 30138; sheet 1, dated 11/12/04.
11. Landscape Plans, Monaco; dated December 3, 2009 — unapproved.
WCHU0615.0006\429257.1 12/14/2012 14
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