CONTRACT 5640 Reimbursement Agreement CLOSED Agreement No. 5640
REIMBURSEMENT AGREEMENT
This Reimbursement Agreement("Agreement") is entered into as of December7" , 2018,
by and between the City of EI Segundo, a general law city and municipal corporation
("City"), and ES CENTERCAL, LLC, a Delaware limited liability company
("Applicant/Developer"). The parties agree as follows:
1. Recitals. This Agreement is made with reference to the following facts and
circumstances:
a. On February 3, 2016, Applicant/Developer entered into that certain Due
Diligence and Ground Lease Agreement ("Lease") with City (Agreement
No. 2924-1), which could have resulted in Applicant/Developer obtaining a
long-term leasehold interest in the City's golf course and driving range
(commonly known as "the Lakes") located at 400 S. Pacific Coast Highway,
EI Segundo, CA 90245 ("Property") if the Conditions Precedent in the
Lease are satisfied.
b. On October 3, 2017, the City Council considered Environmental
Assessment No. EA-1135, which included an Environmental Impact Report
and certain entitlements such as a General Plan Amendment, Lakes
Specific Plan and Conditional Use Permit for the TopGolf Project (the
"Project"); the City Council approved the environmental assessment but did
not approve the General Plan Amendment, Lakes Specific Plan and
Conditional Use Permit. The Lease expired on September 30, 2017.
C. The Council in late 2017 and early 2018 decided to seek requests for
proposals with respect to the Property and potential recreation uses that
might be conducted on the Property. In September 2018, the City Council
selected the proposed Applicant/Developer and TopGolf project and the
parties are attempting to negotiate a lease with respect to the operation of
the Lakes.
d. Accordingly, the Applicant/Developer filed a request to consider the
proposed Lakes Specific Plan consisting of the 26.55-acre area that
currently comprises The Lakes at EI Segundo golf course. The associated
development Project proposed for the approximately 12-acres located
within the southern portion of the Project site would replace the existing
two-level 57-bay driving range with a three-story golf-themed, commercial
recreation and entertainment facility, including hitting (driving) bays, a
driving range, related clubhouse, restaurant, lounge, bar and event space,
and other supporting accessory uses to be operated under the "TopGolf"
brand. Additionally, other Project improvements would include
modifications to the fairways and layouts of three holes at the existing golf
course, parking lot expansion, screening pole installation, replacement of
existing net poles, replacing driving range grass with high density fiber turf,
and demolition of the existing clubhouse and construction of a new
clubhouse. The Lakes Specific Plan's proposed Land Use Plan would
result in the development of approximately 71,579 square feet at buildout.
In addition to the Specific Plan, the proposed Project entitlements include
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a General Plan Amendment; General Plan Map Amendment; Zone
Change; Zoning Map Change; Zone Text Amendment; Site Plan; Lot Line
Adjustment; and Conditional Use Permit.
e. The Project requires City staff to complete a number of tasks including
environmental review, zoning review, preparation of reports and
documents to secure entitlements, plans review for compliance with City
standards, building code compliance, preparation of reports, and project
management duties; the retention and costs of attorneys' fees; the
retention and costs of professional consultants; the processing costs
related to review and inspection of the Project; and the costs of
implementing the conditions of approval (collectively, "Project Costs"). An
estimate of such Project Costs are contained in Exhibit"A", attached hereto
and incorporated by this reference.
f. City believes it is in the public interest for Applicant/Developer to reimburse
City for 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. As such, the applicant is in
agreement to reimburse the City for such Services as set forth in this
Agreement (the "Services").
2. Citv Reimbursement. Applicant/Developer agrees to fully reimburse the City for
the Project Costs. City has estimated the Project Costs as being $50,000.00 as
set forth in Exhibit "A". This amount includes the services to be performed by City
Staff, City Attorney, and any other consultant reasonably deemed necessary by
the City. However, the Applicant/Developer acknowledges that the actual amount
of such Project Costs may be different. Nonetheless, even though the actual
amount of such Project Costs may be different, the Applicant/Developer agrees to
rein-burse the City for the full amount of the actual costs of such Project Costs in
the manner provided in this Agreement. Except with respect to legal services, City
will provide Applicant/Developer with an accounting of the Project Costs on a
monthly basis, provided that such billing totals contain a summary of the work
performed. Except with respect to legal services, upon completion of the Services,
City will provide Applicant/Developer with a detailed accounting of all costs and
expenses. Applicant/Developer will 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. The Services to be
performed by the outside consultants and other professionals (the "Consultants")
shall be set forth in the contracts between the City and the Consultants. The total
cost of the Project Costs, as disclosed by the accounting, is called the
"Reimbursement Amount."
3. Gitv has No Obliaation to Armrove Proiect. By signing this Agreement,
Applicant/Developer acknowledges and understands that this Agreement in no
way obligates the City to approve any of the entitlements or environmental
documents for the Project or to enter into a lease agreement with the Applicant.
The City and its elected and appointed officials retain sole discretion to either
approve or deny any of the environmental documents or entitlements that are the
subject of this Agreement and needed to effectuate the Project.
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4. Method of Reimbursement.
a. Initial Deposit. Except as provided below, upon execution of this
Agreement, Applicant/Developer agrees to deposit with City $50,000.00
("Deposit Amount"), which represents 100 percent of the total estimated
Reimbursement Amount. Costs associated with the Project as set forth in
Exhibit "A" 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 Deposit. Whenever the Deposit Amount balance falls below
$10,000, the City will request the Applicant/Developer to replenish the
amount("Replenishment Deposit") in an amount reasonably determined by
the City. Applicant/Developer agrees to deliver a Replenishment Deposit
to City within 30 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. Notwithstanding the foregoing, 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 Applicant/Developer does not approve of paying
for additional costs, the Applicant/Developer may terminate this Agreement
upon 30 days' notice to the City pursuant to Section 7 of this Agreement
and upon such written notice, the City shall have no further obligation to
continue such services, but Applicant/Developer shall still be obligated to
pay for any Project Costs rendered or costs incurred through such date of
the written notice.
5. gity 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 are
estimated as set forth on Exhibit "A." as "City Staff Time". 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.
6. applicant/Developer Default. Should Applicant/Developer 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 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
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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.
7. Term. This Agreement will terminate either (i) upon issuance of a Certificate of
Occupancy for the Project; or (ii) when the Project has been disapproved or the
application has been formally withdrawn; or(iii) upon thirty days' prior written notice
from either party. Disapproval of the Project, or the App Iicant/Developer's
withdrawal of the application, or termination of this Agreement by either party does
not excuse Applicant/Developer from reimbursing the City for the Project Costs
incurred up to such date of disapproval, withdrawal, or termination pursuant to this
Agreement.
8. Conflicts of Interest.
a. Consultants Work for Citv. 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 Fm lovment byApplicant/Develop. Applicant/Developer represents
and warrants that:
L 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 direct payment to,
the City's consultants retained for the Project.
ii. 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.
iii. 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
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Applicant/Developer direct consultant as to how to undertake or prepare
consultant's work product.
9. Cornoliance 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.
10. 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.
11. 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
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.
12. 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/
Developer at: ES CenterCal, LLC,
1600 East Franklin Street
EI Segundo, CA 90245
Attention.: Jean Paul Wardy
City at: City of EI Segundo
Attn: Gregg McClain, Planning Manager
350 Main Street
EI 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.
13. 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., .pdo form, or by facsimile
transmission. Such signature will be deemed to be and treated in all respects as
an original signature.
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14, 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.
15, Partial Invaliditv. 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.
16. 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.
17. 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.
18. Authoritv/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.
19, 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.
[Signatures on following page]
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Agreement No. 5640
IN WITNESS WHEREOF the parties hereto have executed this Agreement the day
and year first hereinabove written.
CITY OF EL SEGUNDO,
a municipal corporation.
Greg rpent , C nager
ATTEST:
Tra y Weaver, City Clerk
APPROVED AS TO FORM:
for
Mark
Mark D. Hensley,'City acne
y
ES CENTERCAL, LLC,
a Delaware limited liability company
By: CENTERCAL, LLC,
a Delaware limited liability company
By: CENTjNae
ASSOCIATES, LLC,
a Delawariar" y ompany
By
Print an Paul Ward
Print Manager
{If Corporation or similar entity, then two officer signatures required unless evidence
provided that one signature binds the company}
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Agreement No. 5640
EXHIBIT "A"
SERVICES AND COSTS
Estimated ADDlieant Costs.
1. City Staff time: $ 20,000
2. City Attorney time: $ 30,000
Total Cost Anticipated: $50,000
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