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CONTRACT 3674 Reimbursement Agreement CLOSEDREIMBURSEMENT AGREEMENT This Reimbursement Agreement ("Agreement") is entered into as of November 21, 2006 by and between the City of El Segundo, a general law city and municipal corporation ("City"), and Mar Ventures, Inc. ("Owner"), who agree as follows: Recitals. This Agreement is made with reference to the following facts and circumstances: A. Owner is the Managing Member for Rosecrans Sepulveda Partners, LLC, the limited liability company which owns and is in the process of developing certain real properties generally located at 850 South Sepulveda Boulevard ("Plaza El Segundo II"). On behalf of Rosecrans Sepulveda Partners, LLC, Owner has submitted to City applications required for the further entitlement and development of approximately 425,000 square feet of commercial space. B. Owner is the Managing Member for Mar Canyon Grand, LLC which owns property located at 1700 Grand Avenue ("the Grand Avenue site"), which it plans to develop. C. Owner is the Developer of property owned by Headlands Realty Corporation in Campus El Segundo ("the Campus El Segundo site"), where it plans to develop a low density office/tech park. D. Collectively, Plaza El Segundo II, the Grand Avenue site, and the Campus El Segundo site are referred to herein as "the Development(s)." E. In order for City to process the Developments, in an expedited and orderly manner, and for Owner to attempt to obtain the necessary City approvals for the Developments, City must assign certain City staff and/or consultants exclusively to the processing and approval of applications for the Developments. This processing and approval includes undertaking and completing a number of tasks, including but not limited to environmental review, zoning review, reviewing and drafting of entitlement documents, plans review for compliance with City standards, building code compliance, analysis of technical studies, preparation of staff reports, development of potential mitigation measures, and project management duties, all of which City has indicated exceed the current City staff capacity to complete in an expedited and orderly manner (collectively "Entitlement Processing"). 1 F. City believes it is in the public interest for Owner to pay for such services. Therefore, and in consideration of the mutual agreements contained herein, Owner and City agree as follows: 1. Developer shall be responsible for reimbursing for the planning consultant ("Contract Planner") and legal services rendered to the City for Entitlement Processing for the Developments. 2. City agrees that Contract Planner's responsibilities shall be prioritized so as to expedite to the greatest extent possible the Entitlement Planning for the Developments. 3. The term of this Reimbursement Agreement shall be the earlier of (a) completion of the Entitlement Processing , (b) mutual written agreement by the parties terminating this Reimbursement Agreement , (c) either party providing the other with a sixty (60) day written notice of its desire to terminate this Reimbursement Agreement. If this Agreement is terminated by Owner prior to the completion of the Entitlement Processing for the Developments, Owner understands and agrees that the City will have no further obligation to process the Developments. 4. City has estimated and Owner concurs that the Contract Planner and legal fees, costs and expenses ("Costs") of completing the Entitlement Processing at Two Hundred Thousand Dollars ($200,000.00). Owner agrees to reimburse City for such costs actually incurred in paying the Contract Planner and legal expenses even in the event that the costs and expenses exceed Two Hundred Thousand Dollars ($200,000.00). 5. City agrees to maintain and provide to Owner on a quarterly basis such appropriate records and documentation indicating the amount of time (in whole hours) Contract Planner spends on each Development and the tasks completed during the applicable hours. With regard to legal Costs, the City will furnish Owner with quarterly statements that only contain the amount of hours worked and the amount due. The legal Costs will not include any description of the tasks undertaken by the City's legal counsel. 6. Method of Reimbursement. Except as provided below, upon execution of this Agreement and every two (2) months thereafter, Owner agrees to deposit with City Fifty Thousand 0) W�w Dollars ($50,000 .00) ("Deposit Amount"), which represents the estimated amount of reimbursement necessary to compensate the City for its payment of the Contract Planner. Additionally, should the actual Costs exceed the Deposit Amount at any time; Owner agrees to promptly pay City any difference. Upon termination of this Reimbursement Agreement, and after the City has been reimbursed for all of its Costs, the City will promptly refund any remaining Deposit Amount to Owner The parties agree that the only costs to be calculated in determining the Costs shall be (a) the actual amount of salary and/or contract payments made by City to the Contract Planner (including out of pocket expenses)and (b) any legal fees and costs (including out of pocket expenses) paid by the City to its legal counsel for working on the Entitlement Processing for the Developments.. The parties specifically agree that the Reimbursement Amount excludes and will not include any amounts for City staff time (excluding time spent on this matter by the City Attorney's office), fees and services, general and administrative overhead, rent, equipment and supplies and any other non -compensation expenses. 7. Deposit Amount. City agrees to place the Deposit Amount into a separate, non -interest bearing, account. Owner understands and agrees that City will not pay interest to Owner on the Deposit Amount and Owner will not seek such interest payments from City. 8. Default. Should Owner or City fail to perform any of its obligations under this Agreement, then the other party may, at its option, pursue any one or more or all of the remedies available to it under this Agreement, at law or in equity. In the event that the Owner fails to keep the Deposit Amount current, or otherwise fails to timely reimburse the City for Costs, the City shall in addition to other remedies have the right to discontinue the Entitlement Processing for the Developments. 9. Assigr meet This Reimbursement Agreement and the respective obligations set forth herein, may not be assigned by either party without the prior, express, written consent of the other. Any attempted assignment of this Reimbursement Agreement and the respective obligations set forth herein shall be deemed null and void. 10. Com liance with Law. Owner and City will, each at its sole cost and expense, comply with all of the requirements of all federal, state, and local authorities now in force, or which may hereafter be in force, pertaining to this Agreement. 9 11. Waiver of Breach. Any express or implied waiver of a breach of any term of this Agreement will not constitute a waiver of any further breach of the same or other term of this Agreement. 12. Insolvency- Receiver. Either the appointment of a receiver to take possession of all or substantially all of the assets of Owner or City, or a general assignment by Owner or City for the benefit of creditors, or any action taken or offered by Owner or City under any insolvency or bankruptcy action, will constitute a breach of this Agreement by Owner or City and in such event this Agreement will automatically cease and terminate. 13. 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 to this Agreement by the other party will be in writing and will be deemed served when personally delivered to the party to whom they are directed, or in lieu of the personal service, upon deposit in the United States Mail, certified or registered mail, return receipt requested, postage prepaid, addressed to: Owner at: Allan W. Mackenzie Mar Ventures, Inc. 2050 West 190 Street, Suite 108 Torrance, CA 90504 City at: City of El Segundo Attn: City Clerk 350 Main Street El Segundo, CA 90245 Either party may change its address for the purpose of this Section by giving written notice of the change to the other party. 14. Acceptance of Facsimile Signatures, The Parties agree that agreements ancillary to this Agreement and related documents to be entered into in connection with this Agreement will be considered signed when the signature of a party is delivered by facsimile transmission. Such facsimile signature will be treated in all respects as having the same effect as an original signature. 15. Governing Law, This Agreement has been made in and will be construed in accordance with the laws of the State of California, 4 and exclusive venue for any action involving this Agreement will be in Los Angeles County. 16. Partiall Invalidity. Should any provision of this Agreement be held by a court of competent jurisdiction to be either invalid or unenforceable, the remaining provisions of this Agreement will remain in effect, unimpaired by the holding. 17. 'Integration. This instrument and its attachments constitute the sole agreement between City and Owner respecting the matters above and correctly sets forth the obligations of City and Owner. Any Agreement or representations respecting the Property or its licensing by City to Owner not expressly set forth in this instrument are void. 18. Construction. The language of each part of this Agreement will be construed simply and according to its fair meaning, and this Agreement will never be construed either for or against either party. 19. Authority/Modification. The Parties represent and warrant that all necessary action has been taken by the Parties to authorize the undersigned to execute this Agreement and to engage in the actions described herein. This Agreement may be modified by written amendment. The City's City Manager, or designee, may execute any such amendment on behalf of City. 20. Counterparts, This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one instrument executed on the same date. 5 �u. IN WITNESS WHEREOF the parties hereto have executed this contract the day and year first hereinabove written. City of El Seg ndo, A Municippi0orporat Je ,, tewart, City Manager ATTEST: Cindy Morten, City Cler4 APPROVED MARK D. HE Karl H. Berger Assistant Citv/, ey kl' Mar Ventures, Inc. Owner 1/1 L'-' , ........� Allan W. Mackenzie, President [Secretary] PAPBSTROJECTS\2006 11-15 Mar ventures reimbursement agreement.doc 6