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HomeMy WebLinkAboutC-29661 i60'a'D
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REIMBURSEMENT AGREEMENT
Among
CITY OF AR.CADIA.
a California charter city
and municipal corporation;
and.
BOWDEN DEVELOPMENT, INC., a California
corporation,
and
29 EAST ORANGE GROVE AVENUE, LLC, a
Delaware limited liability company.
24347,00628 \9686308.5
REIMBURSEMENT AGREEMENT
This Reimbursement Agreement ("Agreement') is made this day of April, 2015,
among the City of Arcadia, a charter city and municipal corporation ('City" ), Bowden
Development, Inc., a California corporation; ( "Bowden "), and 29 East Orange Grove Avenue,
LLC, a California limited liability company ( "29 East ") (Bowden and 29 East are individually
referred to herein as "Applican(" and collectively as "Applicants"), City, Bowden, and 29 East
individually may be referred to herein as a "Party" and together may be referred to herein as the
"Parties."
RECI'T'ALS
This Agreement is made with respect to the following facts.
A. Bowden wishes to rehabilitate and/or redevelop the real property generally known as
1600 Highland Oaks Drive ("Bowden Property ") which is located within the City of
Arcadia, County of Los Angeles, California.
B. 29 East wishes to rehabilitate and /or redevelop the real property generally known as the
29 East Orange Grove Avenue ( "29 East Property ") which is located within the City of
Arcadia, County of Los Angeles, California.
C. The redevelopment/rehabilitation of the Bowden Property and the 29 East Property is
herein referred to as the Project. On November 19, 2014, the Highlands Homeowners'
Association's Architectural Review Board ( "ARB ") denied applications related to
Project. Those denials were appealed to the Planning Commission, which reversed the
decisions of the ARB. These decisions were appealed to the City Council, which upheld
the Planning Commission's determinations at the conclusion of a public hearing on
February 3, 2015. The City's Project approvals include the requirement that the
Applicants defend, indemnify and hold the City Imnnless in connection with the City's
approval of the Project.
D. The Highlands Homeowners' Association has now tiled suit against the City, its Council
Members, and Applicants as real parties in interest, alleging, among other claims, a
violation of the California Environmental Quality Act ( "Action "). The City has promptly
notified the Applicants of this Action. In order for the City to properly defend itself in
the Action, the City must involve its Legal Counsel. The Applicants have agreed to
reimburse the City for all costs incurred by Legal Counsel related to the Action and to be
jointly and severally liable for the reimbursement. of such costs.
AGREEMENT
NOW, THEREFORE, in consideration of the following mutual promises and agreements,
the City and the Applicant agree as follows:
SECTION 1.
Incorporation of Recitals. The Parties agree that the Recitals constitute the factual basis
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24 3 A 7.0062 8\9696308.5
upon which they have entered into this Agreement. All Parties 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.
The City's Retention of Legal Counsel As a necessary and indispensable part of its
response to the Action, the City shall retain the services of such Legal Counsel as the City may
deem necessary in its reasonable discretion. The Applicants approve the City's selection of
Legal Counsel as set forth in Section 3 of this Agreement. The City reserves the right, in its sole
and absolute discretion, to involve City staff to assist the City in its response to the Action.
The City's Legal Counsel shall be the contractors exclusively of the City and not of the
Applicants. 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, its Legal Counsel, and City staff shall be, to
the extent permissible by law, privileged and confidential work product and not subject to
disclosure to the Applicants, provided that City and its Legal Counsel may in their sole and
absolute discretion elect to share such privileged and confidential information with Applicant
and /or Applicant's counsel pursuant to a contemplated joint defense agreement between the
Parties. The Applicants agree 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 City staff. The Applicants,
however, shall have the right upon reasonable demand and notice to inspect Legal Counsel's
invoices to determine the reasonableness of the Costs and Expenditures (defined below)
provided, however, that such invoices shall be redacted to eliminate the description of work
performed, unless the City determines in its sole and absolute discretion that such redaction is
not necessary due to any defense agreement between the Parties.
SECTION 3.
The City's Selection of Legal Counsel. The City has retained Best Best & Krieger LLP
as its Legal Counsel. Michelle Ouellette of said law firm has been selected as lead counsel to
defend the City. Stephen P. Deitsch of said law firm, who serves as City Attorney of the City,
and other billing professionals of said law firm, may assist attorney Ouellette from time to time.
The City and Best Best & Krieger LLP reserve the right, in their reasonable discretion, to
retain additional experts and consultants to assist in advising the City in response to the Action.
SECTION 4.
The Applicant's Reimbursement of Costs and Expenditures. The Applicants in the
aggregate shall reimburse the City for one hundred percent (100 %) of the actual reasonable costs
and expenditures incurred by the City's Legal Counsel after the City was informed by a
representative of the Petitioner that the Petition was prepared and would imminently be filed in
court, including, but not limited to, all legal fees and costs reasonably incurred in response to the
Action ( "Costs and Expenditures "). Costs and Expenditures shall include, but not be limited to,
the preparation and negotiation of this Agreement, the preparation of an administrative record of
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2 4 347,0062819686308.5
proceedings for the Action, interaction and meetings with City officials and with Applicants
concerning the Action, legal research and analysis to enable Legal Counsel to advise the City on
the Action, written responses and other correspondence concerning the Action, specific project
related work such as review of draft documents, meetings between the Applicants and the City's
Legal Counsel, meetings between City staff and Legal Counsel, legal research, preparation of
briefs and other filings, filing fees, service fees, deposition costs, arbitration costs and expert
witness fees, including actual costs and attorneys' fees on appeal, appearances in court, at
depositions, or at other required proceedings, and defense of any complaint, writ petition or other
legal or equitable action concerning the Action, including any appeals or settlements.
Applicants shall remain jointly and severally liable for the cost of reimbursement to the
City at all times.
SECTION 5.
Payment of Reimbursement Amounts. All Costs and Expenditures shall be paid by the
Applicants initially and thereafter as needed based upon the determination of the City, in its
reasonable discretion, by advance deposit with the City of moneys sufficient to pay all such
Costs and Expenditures. Although the Applicants shall be jointly and severally liable for all of
the Costs and Expenditures, it is expected that each Applicant shall contribute one -half of the
initial and each subsequent deposit, with a continuing obligation to pay to the City any portion of
the Costs and .Expenditures not deposited or ultimately paid when due to the City by the other
Applicant.
Based on the City's estimate of initial Costs and Expenditures, within ten (10) calendar
days of execution of this Agreement, the Applicants shall make an advance deposit to the City in
the amount of fifty- thousand dollars ($50,000) in the aggregate that will be used to reimburse the
City solely for Costs and Expenditures incurred by the City.
If additional funds are required to pay Costs and Expenditures, the City Manager shall
make advance written demand upon the Applicants for such additional funds and the Applicants
shall deposit such additional finds with the City within ten (10) calendar days of the date of
receipt of such demand. Should either Applicant have questions or require further clarification,
that Applicant shall request of the City information within said ten (10) day period needed to
resolve any questions. The Parties agree to meet as expeditiously as possible and negotiate in
good faith within said ten (10) day period to resolve any disputes. Notwithstanding the above,
each Applicant is still required to deposit the funds required by the City and may indicate in
writing that the Applicant is paying in protest of the disputed amount. At all times, however.
each Applicant shall have on -hand funds necessary to cover all actual Costs and Expenditures.
The deposits shall be used by the City solely to pay for Costs and Expenditures of Legal
Counsel. The Applicants shall pay all Legal Counsel fees and costs at the private law rates of
Legal Counsel as they are currently in effect and on file with the City, or as they may be revised
and formally adopted by Legal Counsel from time to time, minus a ten percent (10 %) discount.
The City shall provide the Applicants on a monthly basis with a written summary of the Costs
and Expenditures paid by the City during the preceding thirty (3'0) days with the funds deposited
by the Applicants.
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34347.0062819686308,5
The City shall refund any unexpended portion of the deposits, after payment or provision
for payment of all Costs and Expenditures within forty -five (45) days after conclusion or
termination of the City's involvement in the Action, provided there are no further court actions
or appeals then outstanding, and provided that any applicable statutes of limitations with respect
to filing court challenges of the City's actions have lapsed.
The City shall not accrue or pay interest on any moneys deposited with the City.
SECTION 6.
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 upon the conclusion or
termination of the City's involvement in the Action, provided there are no further court actions
or appeals then outstanding, and provided that any applicable statutes of limitations with respect
to filing court challenges of the City's actions have lapsed, and provided the Applicants have
satisfied all of their obligations under this Agreement including, without limitation, the
obligation to reimburse the City for Costs and Expenditures, whether or not paid by the City to
Legal Counsel prior to the date of termination. The Applicants' joint and several obligation to
reimburse. the City as provided in this Agreement shall survive the termination of this Agreement
pursuant to this Section 6.
SECTION 7.
AssienabilitX. This Agreement may not be assigned by any Party without the prior and
express written consent of all other Parties, which consent shall not be unreasonably withheld.
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 8.
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 the authorized representatives of all Parties.
SECTION 9.
Binding Upon Successors. This Agreement and each of its terms shall be binding upon
the Parties and their respective officers, elected officials, employees, agents; contractors, and
permitted successors and assigns.
SECTION 10.
Leeal Challenees and Indemnification. Nothing herein shall be construed to require the
City to defend any other third party claims and suits challenging any action taken by the City
with regard to any procedural or substantive aspect of the City's consideration of the Project.
The Applicants may, however, at their sole and absolute discretion, appear as real parties in
interest in any such third party action or proceeding, and in such event, they and the City shall
Page 5
24347.0.002819686308, s
defend such action or proceeding and the Applicants shall be responsible for all reasonable
attorneys' fees and costs, in their entirety, which may be incurred° by the City in defense of such
other actions or proceedings. The City shall consult with the Applicants regarding the retention
of legal counsel related to such other actions; provided, however, the City shall have the right to
select such legal counsel as the City deems reasonable and appropriate.
Notwithstanding any provision herein to the contrary, the Applicants agree to indemnify,
defend and hold harmless the City and its Legal Counsel from and against any order, award, or
judgment against the City for attorneys' fees, costs or damages resulting from the Project or in
relation to the Action, including any appeal. The Applicant shall pay the attorneys' fees and
costs at the private law rate as set forth in the legal services agreement between the City and
Legal Counsel minus a ten percent (10 %) discount.
SECTION l I.
Attorneys' Fees. In the event that any action or proceeding, including arbitration, is
commenced by any Party against another Party to establish the validity of this Agreement or to
enforce any one or more of its terns, the prevailing Party in any such action or proceeding shall
be entitled to recover from tite 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 tees, including
actual costs and attorneys' fees on appeal.
SECTION 12.
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
Parties each consent to the personal jurisdiction of the court in any such action or proceeding.
SECTION 13.
Severabitity. if any term or provision of this Agreement is found to be invalid or
unenforceable, the Parties 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 14.
Headings. 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 15,
No Guarantees of Success. Tire Parties hereby acknowledge and agree that nothing in
this Agreement shall be read or construed to constitute any guarantees or promises that the
Action will be successfully defended. In the event drat the Action is not successfully= defended,
Page G
24 347 0062M6963D8.5
the Parties acknowledge and agree that the Applicants shall not be due any refund of Costs and
Expenditures already paid, other than as set forth in Section 5 of this Agreement. Furthermore,
the Parties acknowledge and agree that the Applicants shall remain obligated to pay all Costs and
Expenditures that may continue to accrue until this Agreement is terminated pursuant to the
terms of Section 6 of this Agreement.
SECTION 16.
Representations of Authority. Each Party signing this Agreement on behalf of a Partv
which is not a natural person hereby represents and warrants to the other Parties. 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: Dominic Lazzaretto, City Manager
City of Arcadia
240 West Huntington Drive
Arcadia, California 91006
If to Bowden: F. Todd Bowden
BOWDEN DEVELOPMENT, INC.
212 West Foothill Boulevard
Monrovia, CA 91016
With copy to:
Brent G. Cheney, Esq.
PARKER, MILLIKENI CLARK, O'HARA &
SAMUELIAN, a Professional Corporation
555 South Flower Street, 300' Floor
Los Angeles, California 90071
If to 29 East: Jason Grohs
29 EAST ORANGE GROVE AVENUE. LLC
c/o Mur -Sol Real Estate, LLC
119 East St. Joseph Street
Arcadia, CA 91006
With copy to:
Brent G. Cheney, Esq.
PARKER, MILLIKEN, CLARK, O`HARA &
SAMUELIAN, a Professional Corporation
555 South Flower Street_. 30t" Floor
Los Angeles, California 90071
Page 7
24347,0062W6863083
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.
(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 17 may be changed upon written notice
of such change to all Parties.
IN WITNESS WHEREOF, this Agreement has been executed by the Parties as of the
date first written above.
Page 8
24347.00.6'28%9686308,5
CITY OF ARCADIA, a charter city
and municipal corporation
Bye.. -..
Dominic Lazzaretto
City Manager
Date: rf � 0, ZD6
—_ —Tj--
ATT ST•
By:
+Chiefeputy nden
City Clerk/
Records Manager
APPROVED AS TO FORM:
By:
Steph n P. Deitsch
City Attorney
City of Arcadia
Page 9
24347.0062MA6308 5
BOWDEN DEVELOPMENT, INC., a
California corporation
Date:
0
Date:
29 EAST ORANGE GROVE
AVENUE, LLC, a Delaware limited
liabflity company
By MUR -SOL REAL ESTATE, LLC,
its Managing Member
By:
Jason Grohs,
its Managing Member of Mur -Sol
Real Estate, LLC
CITY OF ARCADIA, a charter city
and municipal corporation
Dt '�'inic Lazzarctto
City Managcr
Date: V1, 2WD '
ATT - ST
By:
Lisa sscnden
Chie eputy City Clerk/
Records Manager
APPROVED AS TO FORM:
By: �•
Steph P. Deitsch
City Attorney
City of Arcadia
Paee 9
2.1347.0063919686300 5
BOWDEN DEVELOPMENT, INC., a
California corporation
By:
Date:
8Y.-
Date:
29 EAST ORANGE GROVE
AVENUE, LLC, a Delaware limited
liability company
By MU -SO REAL ESTATE, LLC,
its M ugin Member
By:
(tetManaging Member of Mur -Sol
allEstate, LLC
l �7 -- /,�-