CONTRACT 4924-2 CLOSEDAgreement No. 4924 -2
REIMBURSEMENT AGREEMENT
This Reimbursement Agreement ( "Agreement ") is entered into as of February
3rd, 2016 by and between the City of El Segundo, a general law city and municipal
corporation ( "City "), and ES Centercal, LLC, a Delaware limited liability company
( "Centercal "), who agree as follows:
1, recitals. This Agreement is made with reference to the following facts and
circumstances:
a. Centercal has entered into that certain Due Diligence and Ground Lease
Agreement with City dated February 3, 2016, which may result in
Centercal obtaining a long term leasehold interest in the real property
generally located at 400 S. Sepulveda Blvd, El Segundo, CA 90245(the
"Lease ") if the Conditions Precedent in the Lease are satisfied.
Capitalized terms used herein shall have the same meaning as those
defined in the Lease.
b. Pursuant to the Lease, Centercal is seeking to develop the Premises and
construct or cause to be constructed approximately 45,000 square feet of
Premises Improvements, including a golf driving range and related
clubhouse with a full service restaurant and event space, and will also be
modifying the existing Golf Course with the Golf Course Improvements.
C, In order for Centercal to lease the Premises from City and complete such
Premises Improvement and Golf Course Improvements, there are a
number of Conditions Precedent that must be satisfied under the Lease
that will require that the City assign certain City staff or consultants to
complete the following administrative tasks and other related work,
including but not limited to: real estate appraisal, financial analysis of the
Guarantors, meetings and potential negotiations with Chevron and SCE,
environmental review, zoning review, public hearings, 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 (collectively,
"Services ") which will exceed the capacity of the current city staff.
d. Centercal, is agreeing to pay for such Services as set forth in this
Agreement.
2. City reiniburseiiient. Exhibit "A" hereto sets forth an estimated budget for the
costs for the Services. The Services to be performed by the outside consultants
and other professionals (the "Consultants ") shall be set forth in the contracts
Agreement No. 4924 -2
between the City and the Consultants (the "Consultant Contracts "). Centercal
agrees to reimburse the City for the full amount of such actual costs and expenses
in accordance with the terms and conditions of this Agreement and in the manner
provided in this Agreement. Upon completion of the Services, City will provide
Centercal with a detailed accounting of all costs and expenses. The total of the
costs and expenses, as disclosed by the accounting, is called the "Reimbursement
Amount." The City may contract with the Consultants for the performance of any
of the Services required to be performed hereunder. Except with respect to legal
services, the scope of services to be performed by the Consultants shall be in
accordance with a detailed scope of work which includes the timing for the work.
Centercal shall have only be provided with monthly billing totals for legal
services to be performed as the underlying bills are subject to the attorney - client
privilege between the City and its legal counsel, provided that such billing totals
shall contain a summary of the work performed to provide reasonably satisfactory
evidence that such work was performed in connection with the Services.
3. Method of Reimbursement.
Except as provided below, within 14_ days from the execution of this
Agreement, Centercal agrees to deposit with City $_90,000( "Deposit
Amount ") which represents twenty -five percent (25 %) of the estimated
Reimbursement Amount. Not more often than monthly, within thirty (30)
days of Centercal's receipt of written notice from the City that the balance
of the Project Account is less than $ 25,000 together with a detailed
accounting (except legal fees) including without limitation unpaid and /or
paid invoices and other reasonable evidence of cost to date of the Services,
Centercal shall deposit into the Project Account such additional amount
which is requested by the City, up to the amount of $100,000per
additional deposit. Upon completion of all services contemplated
hereunder, should the actual Reimbursement Amount exceed the Deposit
Amount, Centercal agrees to promptly pay City any difference in
accordance with Exhibit "A," and such additional amounts agreed to by
Developer. Should the Reimbursement Amount be less than the Deposit
Amount, City will refund Centercal any remaining Deposit Amount to
Centercal within thirty (30) days after determining the Reimbursement
Amount. Notwithstanding the foregoing, Centercal shall have the right in
its sole and absolute discretion to notify the City that Centercal refuses to
make any further deposits in which event this Agreement and the Lease
shall terminate and the City shall have no further obligation to continue
services related to the Conditions Precedent in the Lease, but Centercal
shall still be obligated to pay for any Services rendered or costs incurred
through such date. The Deposit Amount will be placed in a non - interest
bearing trust account established by the City Manager (the "Project
Account "). Centercal understands and agrees that City will not pay
interest to Centercal on the Deposit Amount and Centercal will not seek
such interest payments from City. Costs associated with the Services will
be charged against the deposit amount. The Administrative costs
Agreement No. 4924 -2
estimated and set forth on Exhibit "A" and incurred by City, including,
without limitation, staff time, fees and services (the "City Administrative
Costs "), must be reimbursed on a time and materials basis based on
current City reimbursement rates. Centercal agrees that it will pay for
such costs on a monthly basis within thirty (30) days of receiving an
invoice from City. Notwithstanding the foregoing, The aggregate
compensation payable to the Consultants shall not exceed two hundred
and fifty thousand dollars ($250,000) with respect to the cost of an
environmental consultant to perform the documentation required under the
California Environmental Quality Act, Public Resources Code §§ 21000 et
seq., and one hundrend and ten thousand Dollars ($110,000) with respect
to the cost of the balance of the Services and the City Administrative
Costs except as approved in writing by CenterCal. In the event that the
costs exceed, or reach a point where it is anticipated the costs will exceed
the amounts set forth on Exhibit A and CenterCal does not approve of
paying for additional costs, the Agreement and the Lease shall terminate
and the City shall have no further obligation to continue services related to
the Conditions Precedent in the Lease, but Centercal shall still be
obligated to pay for any Services rendered or costs incurred through such
date.
4. Centercal Default. Should Centercal fail to perform any of its obligations under
this Agreement after ten (10) days notice, 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
Centercal fails to perform any of its obligations under this Agreement and /or the
deposit account has a zero or negative balance, City shall no obligation to perform
additional services under this Agreement or the Lease until such time as Centercal
has cured any failure to perform and /or deposited sufficient additional funds into
the deposit account. The city may also bring an action to recover all costs and
expenses incurred by the City in completing the Services, together with interest
thereon from the date incurred at the rate of 10% per annum.
5. Compli-crncc with raw. Centercal 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. Centercal
understands and agrees that the City may not ultimately approve the project and
that Centercal is obligated to pay for the Services in accordance with this
Agreement regardless of the decision made by the City on the project.
6. Waiver o ' 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.
7. Insolvency; l eceiver. Either the appointment of a receiver to take possession of
all or substantially all of the assets of Centercal, or a general assignment by
Centercal for the benefit of creditors, or any action taken or offered by Centercal
Agreement No. 4924 -2
under any insolvency or bankruptcy action, will constitute a breach of this
Agreement by Centercal, and in such event this Agreement will automatically
cease and terminate.
8. 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:
Centercal at: ES CenterCal, LLC,
1600 East Franklin Street
El Segundo, CA 90245
Attention.: Jean Paul Wardy
City at: City of El Segundo
Attn: Director of Planning and Building Safety
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.
9. Acc stance of Facsimile or, Electropic 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 or electronic transmission. Such facsimile or
electronic signature will be treated in all respects as having the same effect as an
original signature.
10. Governing Law.. This Agreement has been 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.
11. 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.
12. Integration. This instrument and its attachments constitute the sole agreement
between City and Centercal respecting the matters above and correctly set forth
the obligations of City and Centercal. Any Agreement or representations
respecting the property or its licensing by City to Centercal not expressly set forth
in this instrument are void.
Agreement No. 4924 -2
11 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.
14. Authority/Modification, The parties hereto 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 solely by written amendment. City's city manager, or designee, may
execute any such amendment on behalf of City.
15„ 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.
Agreement No. 4924 -2
IN WITNESS WHEREOF the parties hereto have executed this contract the day
and year first hereinabove written. a
City of El Segundo,
a 1T1L111rc'pa J corporation. a California
Greg ;7 nter,ity Manager [president] ,
ATTEST:
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1°rac W , Ci y Clerk
APPROVED AS TO FORM:
MARK D. III.UNS:I 1E�Y, City Attome
By:.., ._N mm
Karl 1.1. erger,
Assistant City Attorney
CENTERCAL:
ES CENTERCAL, LLC,
a Delaware limited liability company
By: CENTERCAL, LLC,
a Delaware limited liability company
By: CENTERCAL ASSOCIATES, LLC,
a Delaware ted 1i - ility o r�q a y
By..
1 °int Ne
P�rin Title: Its 'Manati-ci
Agreement No. 4924 -2
EXHIBIT "A"
SERVICES AND COSTS
Estimated Applicant Costs:
1. Planning Staff Cost: (based upon a time and materials estimate) $80,000
2. City Attorney Cost: $30,000 @ $265.00 /hour
3. Environmental Consultant Cost (including traffic consultant): Maximum of
$250,000 (including $75,000 in traffic engineering and parking analysis costs)
Total Cost Anticipated: Approximately $360,000