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HomeMy WebLinkAboutC-2156REIMBURSEMENT AGREEMENT Between CITY OF ARCADIA a California charter city and municipal corporation and CARUSO PROPERTY MANAGEMENT, INC. RVPUB \SPD \686663.1 0 REIMBURSEMENT AGREEMENT � This Reimbursement Agreement ( "Agreement ") is made this h day of AW C , 2005, by and between the City of Arcadia, a charter city and municipal corporation (the "City "), and Caruso Property Management, Inc. (the "Applicant "). RECITALS This Agreement is made with respect to the following facts. A. The Applicant is in negotiation with the fee owner of certain real property, as hereinafter described, for purposes of the Applicant, or its affiliate, to become a member of a Lo- be- formed limited liability company with the fee owner of said property, and thereafter to have such entity lease such real property ( "Property ") for the purposes described hereafter. The subject property is generally located within the City of Arcadia, County of Los Angeles, California and is a portion of the property bounded by Huntington Drive on the south and east, Baldwin Avenue and the Westfield Shoppingtown — Santa Anita on the west and Colorado Place on the north and east, being Los Angeles County Assessors Parcel Number 5775- 001 -0021, located in the City of Arcadia, County of Los Angeles, State of California (the "Property "). B. The Applicant is contemplating the development of the Property as a mixed use commercial and residential development. The Applicant has submitted applications for various discretionary land use approvals for the development of the Property including, without limitation a specific plan and general plan amendment, and environmental documents pursuant to the California Environmental Quality Act ( "CEQA "). All of the above shall be referred to collectively as the "Project." C. To provide the City with the legal, environmental, traffic and water expertise necessary for the City's review process concerning the development of the Property, it is necessary for the City to access the services of the contract City Attorney and /or special counsel ( "Legal Counsel ") for extraordinary legal services; EIP Associates for environmental services; Meyer, Mohaddes Associates, Inc. for parking and traffic services and Stetson Engineers and the Arcadia Public Works Services Department, Water Division for water supply assessment plan for the Project ( "Consultants "). D. As a condition to the City's completion of the review process, the Applicant has agreed to reimburse the City for the Legal Counsel and Consultants' costs and expenses related to the City's review process in the manner and amounts set forth in this Agreement, as well as the costs and expenses related to City Staff in the review, consultation and preparation of documents concerning for the environmental process, the general plan and the specific plan applications. The Applicant's reimbursement of City under this Agreement will ensure that the City has the necessary resources to diligently and efficiently process the Applicant's Project. -2- 6/08/05 t i • AGREEMENT NOW, THEREFORE, in consideration of the following mutual promises and agreements, City and Applicant agree as follows: Section 1. Incorporation of Recitals. The parties agree that the Recitals constitute the factual basis upon which the City and the Applicant have entered into this Agreement. The City and the Applicant each acknowledge the accuracy of the Recitals and agree that the Recitals are incorporated into this Agreement as though fully set forth at length herein. Section 2. City to Retain Consultants. As a necessary and indispensable part of its fact finding and other processes relating to the review of the Applicant's proposed uses of the Property, the City shall retain the services of Legal Counsel and Consultants as set forth in Section 4 of this Agreement to provide advice as the City may deem necessary in its reasonable but otherwise sole and absolute discretion. The scope of work of the Legal Counsel and Consultants for the Project is attached hereto as Exhibit "B ". The City reserves the right, in its reasonable but otherwise sole and absolute discretion, to amend the scope of work as it deems necessary and appropriate where such amendments are reasonably necessary and related to the City's proper review and consideration of the Applicant's Project. The Applicant agrees that, notwithstanding the Applicant's reimbursement obligations under this Agreement, Legal Counsel and Consultants shall be the contractors exclusively of the City and not of the Applicant. Except for those disclosures required by law including, without limitation, the California Public Records Act, all conversations, notes, memoranda, correspondence and other forms of communication by and between the City and its Legal Counsel and Consultants shall be, to the extent permissible by law, privileged and confidential and not subject to disclosure to the Applicant. The Applicant agrees that it shall have no claim to, nor shall it assert any right of ownership in, any reports, correspondence, plans, maps, drawings, news releases or any and all other documents or work product produced by the Legal Counsel and Consultants. Section 3. Applicant to Cooperate with Consultants. The Applicant and the City each agree to cooperate in good faith with each other's staff, Legal Counsel, and Consultants. The Applicant agrees that it will instruct its agents, officers, officials, employees, consultants, contractors and attorneys to reasonably cooperate with the Legal Counsel and Consultants and to provide all necessary documents or information reasonably requested of them by the City and /or the Legal Counsel and/or Consultants; provided, however, that the foregoing shall not require the disclosure of any documents or information of the Applicant which by law is privileged, proprietary, confidential, and exempt from disclosure under the Public Records Act. Section 4. City's Selection of Consultants. The City has retained the following as Consultants pursuant to this Agreement: (i) Best Best and Krieger LLP (ii) Meyer, Mohaddes Associates, Inc. (iii) EIP Associates -3- 6/08/05 0 (iv) Public Works Services Department, Water Division Section 5. Applicant's Reimbursement of Costs and Expenditures. The Applicant shall reimburse the City for one hundred percent (100 %) of the actual costs and expenditures incurred by the City relative to the Legal Counsel and Consultant costs and City staff costs (collectively, "Costs "). The City has preliminarily reviewed the scope of work required and has estimated the aggregate Costs to be approximately Six - hundred and thirty-two thousand, fourteen dollars ($632,014) ( "Estimated Costs "), which estimated costs are allocated as follows_ (i) Meyer Mohaddes - $126,000 (ii) EIP Associates - $385,000 (iii) Stetson Engineering - $14,999 (iv) City costs including Legal Counsel - $105,335 No category may exceed the forgoing amounts without the prior approval of the Applicant, which shall not be unreasonably withheld or delayed. The Applicant and the City understand and agree that the Applicant has paid the City the sum of One - hundred twenty -four thousand, seven hundred thirty dollars ($124,730) which shall be applied by the City to that portion of the costs pertaining to the preparation of the traffic study for the EIR, the sum of Ten thousand dollars ($10,000) for Stetson Engineering, and the sum of one hundred eighty -five thousand dollars ($185,000) which shall be applied by the City to that portion of the costs pertaining to the preparation of the environmental impact report. These prior reimbursement payments are listed on Exhibit "C" attached hereto. The City may incur aggregate Costs up to the Estimated Costs, subject to the approval of the Applicant which shall not be unreasonably withheld or delayed. The City shall use reasonable good faith efforts to consult with the Applicant prior to amending the scope of services to be provided by the Legal Counsel and Consultants and incurring Costs that exceed the Estimated Costs ( "Excess Costs "). The Applicant's obligation to reimburse the City for Costs which exceed the Estimated Costs shall be contingent upon the City providing the Applicant with written notice of the amendment of the scope of work to be performed by Legal Counsel and Consultants and the estimated cost thereof prior to the commencement of additional work. The City shall not incur Excess Costs without the prior written approval of the Applicant which shall not be unreasonably withheld or delayed. For purposes of this Section 5, the City shall be deemed to have consulted with the Applicant when the City has provided written notice to the Applicant that the City reasonably anticipates that it will incur, or has incurred, Excess Costs. If, after consultation, the Applicant disagrees with the City's incurring of Excess Costs, then the Applicant's sole and exclusive remedy will be to terminate this Agreement pursuant to Section 9 of this Agreement, subject to the Applicant's obligation to reimburse the City for all Costs, but not in excess of the Estimated Costs, incurred by the City prior to the date of termination, whether or not yet paid by the City to Legal Counsel and Consultants. Section 6. Payment of Reimbursement Amounts. Immediately following the City's disbursement of funds to Legal Counsel and Consultants pursuant to the retainer agreement with -4- 6/08/05 0 0 the Legal Counsel and Consultants, the City shall make written demand to the Applicant for payment of the amount paid by the City to Legal Counsel and Consultants. The Applicant shall be provided with copies of each retainer agreement prior to the commencement of any work. The City shall provide to the Applicant along with such written demand reasonable documentation to substantiate any demands for payment. Such documentation shall include, but not be limited to, timesheets, invoices, receipts, and approved consultant proposals and change orders; provided, however, that City shall have the right to redact from such documents any information that the City reasonably determines would be privileged, confidential, or not otherwise subject to release pursuant to the standards set forth in the California Public Records Act, Government Code Section 6250, et seq. Within thirty (30) days after receipt of written demand for payment by the City, the Applicant shall pay the City the amount demanded. Should the Applicant have questions or require further clarification, Applicant shall request of City information within said thirty (30) day period needed to resolve any questions. The parties agree to meet as expeditiously as possible and negotiate in good faith within said thirty (30) day period to resolve any disputes. Notwithstanding the above, the applicant is still required to pay the invoiced amount to City and may indicate in writing that the Applicant is paying in protest the disputed amount. Section 7. Term. The term of this Agreement shall commence on the date that this Agreement is approved by the City and fully executed by the parties and shall terminate when all work required has been completed to the City's reasonable satisfaction and the Applicant has satisfied all of its obligations under this Agreement including, without limitation, the obligation to reimburse the City for Estimated Costs and Excess Costs, whether or not paid by the City to Legal Counsel and Consultants prior to the date of termination. The Applicant's obligation to reimburse the City as provided in this Agreement shall survive the termination of this Agreement pursuant to this Section 7. Section 8. Early Termination. The City may terminate this Agreement prior to the term set forth in Section 7 above, without cost to or liability of the City, upon thirty (30) days prior written notice to the Applicant. The Applicant may in its reasonable but otherwise sole and absolute discretion terminate this Agreement prior to the end of the term set forth in Section 7 above upon thirty (30) days' prior written notice to the City. However, the City shall not be entitled to any reimbursement for Estimated Costs or Excess Costs incurred following the effective date of termination, provided that the Applicant has satisfied all of its obligations under this Agreement to date of termination regarding reimbursement to the City of both Estimated Costs and Excess Costs and, furthermore, that the Applicant has given City written notice withdrawing its application(s) for the Project. Within two (2) City working days following either the City's decision to terminate this Agreement or the City's receipt of written notice indicating the Applicant's decision to terminate this Agreement, the City shall notify Legal Counsel and Consultants and instruct them to cease work. Legal Counsel and Consultants shall be instructed to bill the City for any work completed prior to the effective date of termination. -5- 6/08/05 • • Section 9. Assignability. This Agreement may not be assigned by either party without the prior and express written consent of the other party, which consent shall not be unreasonably withheld. In determining whether to approve a request by the Applicant to assign this Agreement, the City may consider, among other things, the proposed assignee's financial status and commitment to the Project. Any attempted assignment of this Agreement not in compliance with the terms of this Agreement shall be null and void and shall confer no rights or benefits upon the assignee. Section 10. No Oral Modifications. This Agreement represents the entire understanding of the City and the Applicant and supersedes all other prior or contemporaneous written or oral agreements pertaining to the subject matter of this Agreement. This Agreement may be modified, only by a writing signed by both the authorized representatives of both the City and the Applicant. All modifications to this Agreement must be approved by the City Council of the City of Arcadia. Section 11. Binding Upon Successors. This Agreement and each of its terms shall be binding upon the City, the Applicant and their respective officers, elected officials, employees, agents, contractors, and permitted successors and assigns. Section 12. Legal Challenges. Nothing herein shall be construed to require the City to defend any third party claims and suits challenging any action taken by the City with regard to any procedural or substantive aspect of the City's approval of development of the Property, the environmental process, or the proposed uses of the Property. The Applicant may, however, in its sole and absolute discretion appear as real party in interest in any such third party action or proceeding, and in such event, it and the City shall defend such action or proceeding and the Applicant shall be responsible and reimburse the City for reasonable attorney fees and costs, in their entirety, which may be incurred by the City in defense of such action or proceeding. The City shall consult with the Applicant regarding the retention of legal counsel; provided, however, the City shall have the right to select such legal counsel as the City deems reasonable and appropriate. The applicant may, at any time, notify the City in writing of its decision to terminate the defense of any such action or proceeding, in which event the Applicant shall have no obligation to reimburse City for its attorney fees and costs beyond that reasonably necessary in order to permit the City to terminate its defense of such action or proceeding. Notwithstanding any provision herein to the contrary, the City shall consult with the Applicant for purposes on deciding whom to retain as legal counsel to defend any such action or proceeding. Additionally, during each phase of litigation the retained legal counsel shall prepare and submit an estimated budget for said defense to the City and Applicant and Applicant has the right to approve of said budget; provided, however, that if the Applicant disapproves said budget and, as a result thereof, the City terminates its defense of such action or proceeding, then the Applicant shall reimburse the City for all fees and costs necessary in order to permit the City to terminate its defense of such action or proceeding. Section 13. Attorneys' Fees. In the event that any action or proceeding, including arbitration, is commenced by either the City or the Applicant against the other to establish the -6- 6/08/05 9 • validity of this Agreement or to enforce any one or more of its terms, the prevailing party in any such action or proceeding shall be entitled to recover from the other, in addition to all other legal and equitable remedies available to it, its actual attorneys' fees and costs of litigation, including, without limitation, filing fees, service fees, deposition costs, arbitration costs and expert witness fees, including actual costs and attorneys' fees on appeal. Section 14. Jurisdiction and Venue. This Agreement is executed and is to be performed in the City of Arcadia, Los Angeles County, California, and any action or proceeding brought relative to this Agreement shall be heard in the appropriate court in the County of Los Angeles, California. The City and the Applicant each consent to the personal jurisdiction of the court in any such action or proceeding. Section 15. Severability. If any term or provision of this Agreement is found to be invalid or unenforceable, the City and the Applicant both agree that they would have executed this Agreement notwithstanding the invalidity of such term or provision. The invalid term or provision may be severed from the Agreement and the remainder of the Agreement may be enforced in its entirety. Section 15. Headines. The headings of each Section of this Agreement are for the purposes of convenience only and shall not be construed to either expand or limit the express terms and language of each Section. Section 16. Representations of Authority. Each party signing this Agreement on behalf of a party which is not a natural person hereby represents and warrants to the other party that all necessary legal prerequisites to that party's execution of this Agreement have been satisfied and that he or she has been authorized to sign this Agreement and bind the party on whose behalf he or she signs. Notices. Notices required under this Agreement shall be sent to the following: If to the City: William R. Kelly, City Manager City of Arcadia 240 West Huntington Drive Arcadia, California 91006 If to the Applicant: Rick J. Caruso Caruso Property Management, Inc. 101 The Grove Drive Los Angeles, CA 90036 Notices given pursuant to this Agreement shall be deemed received as follows: (1) If sent by United States Mail - five (5) calendar days after deposit into the United States Mail, first class postage prepaid. -7- 6/08/05 (2) If by facsimile - upon transmission and actual receipt by the receiving party. (3) If by express courier service or hand delivery - on the date of receipt by the receiving party. The addresses for notices set forth in this Section 24 may be changed upon written notice of such change to either the City or the Applicant, as appropriate. [SIGNATURES ON FOLLOWING PAGE] 51IIF" Dated: w CITY OF ARCADIA a California charter city and municipal corporation By: City Manager ATTEST: By: .Mv City Clerk APPROVED AS TO FORM: s . vk P. 4 ezz City Attorney Dated: APPLICANT: Caruso Property a ent, Inc. By: d -9- 6/08/05 Exhibit "A" Description of the Property The property is bounded by Huntington Drive on the south and east, Baldwin Avenue and Westfield Shoppingtown — Santa Anita on the west and Colorado Place on the north and east. -lo- 6/08/05 , Exhibit "B" Scope of Services EIP Associates — Preparation of the environmental impact report (EIR) Meyer, Mohaddes Associates, Inc. —Preparation of the traffic and parking analysis to be included in the EIR BBK Associates — Legal services in review and comment on the EIR as well as the specific applications for the "project ". Public Works Services Department — contract for preparation of the water services plan under the supervision of the Water Division of the Public Works Services Department -11- 6/08105 Exhibit "C" Prior Reimbursement Payments Received $124,730 deposit for Traffic Study Received $85,000 deposit for preparation of the EIR Received $100,000 deposit for preparation of the EIR Received $10,000 for preparation of the Water Supply Assessment by the Public Works Services Department and Stetson Engineers -12- 6/08/05