CONTRACT 6745 Reimbursement AgreementAgreement No. 6745
REIMBURSEMENT AGREEMENT
This Reimbursement Agreement ("Agreement") is entered into as of September12 , 2023,
by and between the City of El Segundo, a general law city and municipal corporation
("City"), and Smoky Hollow Industries, LLC, a California limited liability company
("Applicant/Developer"). The parties agree as follows:
Recitals. This Agreement is made with reference to the following facts and
circumstances:
a. The Applicant/Developer filed an application for a General Plan
Amendment, Specific Plan Amendment, Zone Change, Zone Text
Amendment, Development Agreement, and Site Plan Review to allow
development of a mixed -use commercial/residential building consisting of
13,754 square feet of retail space and 50 residential units (the "Project").
b. The Project requires environmental review, preparation of environmental
technical reports and documents under the California Environmental
Quality Act ("CEQA"); the retention of costs of attomeys' fees; the retention
and costs of professional consultants; the costs of work performed by City
staff to complete a number of tasks including environmental review, zoning
review, plans review for compliance with City standards, building code
compliance, preparation of reports, and project management duties; the
reasonable processing costs related to review and inspection of the
Project; and the costs of implementing the conditions of approval
(collectively, "Project Costs"). Such Project Costs are further described in
Exhibit "A" attached hereto and incorporated by this reference.
C. City believes it is in the public interest for Applicant/Developer to pay such
Project Costs. Applicant/Developer understands that all work performed by
the City related to the Project will be under the direction of City, but at
Applicant/Developer's expense.
2. City Reimbursement. Applicant/Developer agrees to fully reimburse the City for
the Project Costs. City has estimated the Project Costs as being $200,000. This
amount includes the environmental and financial consulting services and an
estimated City Administrative Cost of $65,000. However, the Applicant/Developer
acknowledges that the actual amount of such Project Costs may be higher.
Nonetheless, even though the actual amount of such Project Costs may be
different, the Applicant/Developer agrees to reimburse the City for the full amount
of the actual costs of such Project Costs in the manner provided in this Agreement.
City will provide Applicant/Developer with an accounting of the Project Costs on a
monthly basis, which accounting the Applicant/Developer agrees will be
conclusive, in the absence of manifest error. The total cost of the Project Costs, as
disclosed by the accounting, is called the "Reimbursement Amount."
3. Method of Reimbursem
a. Initial Deposit. Except as provided below, upon execution of this
Agreement, Applicant/Developer agrees to deposit with City $50,000
Agreement No. 6745
("Deposit Amount") which represents 25 percent of the total estimated
Reimbursement Amount. Costs associated with the Project will be charged
against the deposit amount.
b. The Deposit Amount will be placed in a non -interest bearing trust account
established by the City Manager. Applicant/Developer understands and
agrees that City will not pay interest to Applicant/Developer on the Deposit
Amount and Applicant/Developer will not seek such interest payments from
City.
C. Replenishment De osit. Whenever the Deposit Amount balance falls below
$20,000, the City may request the Applicant/Developer to replenish the
amount ("Replenishment Deposit"). Applicant/Developer agrees to deliver
a Replenishment Deposit to City within 10 business days following the
City's request.
d. Should the actual Reimbursement Amount exceed the Deposit Amount,
Applicant/Developer agrees to promptly pay City any difference. Should
the Reimbursement Amount be less than the Deposit Amount, City will
refund Applicant/Developer any remaining Deposit Amount to
Applicant/Developer within 30 days after determining the Reimbursement
Amount.
4. City Administrative Costs. Administrative costs incurred by City, including, without
limitation, staff time, legal costs, fees and services, must be reimbursed on a time
and materials basis based on current City reimbursement rates. As described in
Section 2 above, it is currently estimated that such administrative costs will be
approximately $65,000.00. Applicant/Developer acknowledges that such amount
is an estimate only and that the actual administrative costs may be more or less
than such amount. Such costs will be deducted by City from the Deposit Amount
on a monthly basis.
5. Applicant/Developer Default. Should Applicant/Developer fail to perform any of its
obligations under this Agreement, then City 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.
Without limiting any other remedy which may be available to it, if
Applicant/Developer fails to pay either the Deposit Amount or a Replenishment
Deposit, or fails to fully reimburse the City for the Project Costs, City may cease
performing its obligations under this Agreement and may bring an action to recover
all costs and expenses incurred by the City in completing the studies, together with
interest thereon from the date incurred at the rate of 10% per annum.
6. Term. This Agreement will terminate either (i) 12 months from the date
Applicant/Developer's application has been approved by the City, building permit
issuance or building permit final; or (ii) when the Project has been disapproved or
the application has been formally withdrawn. Disapproval of the Project or the
Applicant/Developer's withdrawal of the application does not excuse
Applicant/Developer from reimbursing the City for the Project Costs incurred up to
such date of disapproval or withdrawal pursuant to this Agreement.
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7. Conflicts of Interest.
a. Consultants Work for Cit City has sole discretion to direct the work and
evaluate the performance of the employees and contractors assigned to
work on the Project, and City retains the sole right to terminate or replace
any such employees or contractors. Notwithstanding the fact that
Applicant/Developer provides funding for the performance of the reports
and studies provided hereunder, such documents prepared hereunder or
any approvals granted reflect the City's independent judgment, and City
has no obligation to approve the Project.
b. No Employment by Applicant/Developer. Applicant/Developer represents
and warrants that:
For the 12-month period preceding the submission of its application
for the Project, it has not entered into any arrangement to pay
finance consideration to, and has not made any payment to, the
City's consultants retained for the Project.
For a period of 12 months after final resolution of
Applicant/Developer's application for the Project, neither
Applicant/Developer, nor any of its representatives, agents or other
persons acting in concert with Applicant/Developer, shall enter into
any financial relationship with any consultants, or with any City
official, agent or employee. Nor, during such period, shall
Applicant/Developer propose to enter into any future relationship
with the consultants, or with any City official, agent or employee.
W. It has not entered into any arrangement to pay financial
consideration to, and has not made any payment to, any City
official, agent or employee that would create a legally cognizable
conflict of interest as defined in the Political Reform Act (California
Government Code §§ 87100 et seq.).
C. Communications with Consultants. Applicant/Developer may only
communicate with consultants retained hereunder with the permission of
the City's Director of Planning and Building Safety. In no case may
Applicant/Developer direct consultant as to how to undertake or prepare
consultant's work product.
8.. Compliance with Law. Applicant/Developer will, 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. 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.
10. Insolvency: Receiver. Either the appointment of a receiver to take possession of
all or substantially all of the assets of Applicant/Developer, or a general assignment
by Applicant/Developer for the benefit of creditors, or any action taken or offered
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by Applicant/Developer under any insolvency or bankruptcy action, will constitute
a breach of this Agreement by Applicant/Developer, and in such event this
Agreement will automatically cease and terminate if Applicant/Developer or its
successor or assign cease or fails to timely pay any amount due and payable by
Applicant/Developer (or its successor or assign) under this Agreement.
11. 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:
Applicant/ Smoky Hollow Industries, LLC
Developer at: 6-12--E-ast-E�-a4;4P AveRue 1301 E El Segundo Blvd, Suite B
El Segundo, CA 90245
310-616-5040 x 1 W
City at: City of El Segundo
Attn: Eduardo Schonbom, Planning Manager
350 Main Street
El Segundo, CA 90245
310-524-2393
Either party may change its address for the purpose of this Section by giving written
notice of the change to the other party.
12. Acceptance of Electronic 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
electronic mail in "portable document format" (i.e., .pdf) form, or by facsimile
transmission. Such signature will be deemed to be and treated in all respects as
an original signature.
13. Governing Law. This Agreement is made in and will be construed in accordance
with the laws of the State of California, and exclusive venue for any action involving
this Agreement will be in Los Angeles County.
14. Partial 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.
15. Integration. This instrument and its attachments constitute the sole agreement
between City and Applicant/Developer respecting the matters above and correctly
sets forth the obligations of City and Applicant/Developer.
16. 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.
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17. 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 manager, or designee, may execute any
such amendment on behalf of City.
18. Counte arts.. 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.
[Signatures on following page]
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Agreement No. 6745
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first hereinabove written.
CITY OF EL SEGUNDO,
A municipal corporation.
Darrell George, City Manager
ATTEST:
Tracy Weaver, bty Clerk
APPROVED AS TO FORM:
by ✓"
Mark D. Hens ey, City Attorney
C1
SMOKY HOLLOW INDUSTRIES LLC
A California Limited Liability Company
9/12/2023
M rk Telesz, Managing Member
Agreement No. 6745
EXHIBIT A
PROJECT COSTS
City Administrative Cost:
City Attorney: $50,000
City staff: $25,000
Consultant Costs:
Financial analysis: $25,000
Environmental: $100,000
Total Project Costs: $200,000