18-0817_SOUTH COAST INVESTORS, II, LLC_Agreement AGREEMENT PROVIDING FOR ADVANCEMENT OF FUNDS
FOR PARTICIPATION IN HOTEL
TRANSIENT OCCUPANCY TAX REVENUE SHARING INCENTIVE PROGRAM
THIS AGREEMENT is entered into as of August /7 , 2018, by and among the
CITY OF SAN JUAN CAPISTRANO (the "City"), and SOUTH COAST INVESTORS II, LLC
("Developer").
RECITALS:
A. Pursuant to City Council Policy 135, effective June 19, 2018, the City created the
Citywide Luxury Hotel Transient Occupancy Tax Revenue Sharing Incentive Program to
encourage the development of luxury hotel properties within the City ("Hotel Revenue Sharing
Program").
B. Developer owns certain real property in the City located on the northeast corner of
Ortega Highway and El Camino Real ("Property") on which Developer intends to develop and
operate a 4-star or 4-diamond rated hotel consisting of approximately 124 guest rooms in addition
to mixed uses, including retail and restaurant uses("Project").
C. Developer has provided City with a Letter of Intent to participate in the Hotel
Revenue Sharing Program and requested the preparation of a Revenue Sharing Agreement.
D. Pursuant to Policy 135, Developer must deposit certain monies with City to defray
all costs incurred by the City as a result of or related to Developer's involvement in the Hotel
Revenue Sharing Program.Those cost are anticipated to include,but are not limited to,staff costs,
legal fees and costs, and consultant costs("Expenses").
IT IS AGREED AS FOLLOWS:
1. Payment by Developer of Expenses. Developer shall pay to the City all Expenses as
follows: Within three(3)business days following Developer' execution of this Agreement,
Developer shall deposit with the City cash in the sum of Twenty Thousand Dollars
($20,000) (the "Deposit"). From time to time, the City shall draw upon the Deposit in
order to pay all City Expenses incurred during the process of evaluating the Letter of Intent
and the Developer's participation in the Hotel Revenue Sharing Program,including but not
limited to staff, consultant and attorney fees. The Deposit shall also be charged all of the
costs associated with preparation of the Revenue Sharing Agreement, including staff time,
consultant costs and legal expenses. If the City, in its sole and absolute discretion,
determines that additional funds will be required to pay the Expenses, the City Manager,
or his/her designee, shall make written demand upon Developer for such additional funds
(which, when received by the City shall also be referred to herein as constituting the
"Deposit"). Developer shall deposit such additional funds with the City within ten (10)
calendar days following the date of receipt of such demand. Should Developer have
questions or require further clarification regarding the demand, Developer shall request of
the City such information needed to resolve any questions or clarification within said ten
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(10) calendar day period. The parties agree to meet as expeditiously as possible and
negotiate in good faith within said ten (10) calendar day period to resolve any disputes
concerning the demand. Notwithstanding the above, Developer understands and agrees
that Developer is required to deposit the funds pursuant to the demand of the City within
said ten(10) calendar day period,but may indicate in writing that Developer is depositing
such funds with the City under protest regarding all or any portion of the disputed amount.
In the event Developer fails or refuses to provide such additional funds within the time
required by this Agreement, the City may, in addition to any other remedy provided by
law, and without liability, cease evaluation of the Developer's participation in the Hotel
Revenue Sharing Program or preparation of the Revenue Sharing Agreement.
Within one hundred and twenty (120) calendar days following the Termination Date
(defined below),the City shall refund to Developer any and all unexpended portions of the
Deposit, after payment or provision for payment of all Expenses. The City shall not have
any obligation to accrue or pay interest on any funds deposited by Developer with the City.
2. Term. The term of this Agreement shall commence on the date that this Agreement has
been approved by City and is fully executed by the parties. The term of this Agreement
shall terminate on the earlier of the following dates (the"Termination Date"): (a)the date
that is ninety (90) calendar days following the date that the City takes final action
concerning the Revenue Sharing Agreement; (b)the date that Developer provides written
notice to City of Developer's intention to terminate Developer's pursuit of the Revenue
Sharing Agreement or participation in the Hotel Revenue Sharing Program; or(3)the date
that the City provides written notice to Developer of the City's determination that the
Developer's project does not qualify for participation in the Revenue Sharing Program.
Notwithstanding any provision in this Agreement, the obligation of Developer to pay for
the Expenses incurred prior to the Termination Date shall survive the termination of this
Agreement. Additionally, Developer acknowledges that Developer has requested the
Revenue Sharing Agreement be expedited and as such, City has incurred expenses
associated with the review of Developer's Letter of Intent and preparation of the Revenue
Sharing Agreement prior to the execution of this Agreement.Developer acknowledged and
agrees to pay all costs incurred prior to the execution of this Deposit Agreement.
3. Assignability. This Agreement may not be assigned by either the City or Developer
without the prior and express written consent of the other party,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.
4. No Oral Modifications.This Agreement represents the entire understanding of the City and
Developer with respect to the matters set forth in this Agreement,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 both the
authorized representatives of both the City and Developer.
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5. Binding Upon Successors. This Agreement and each of its terms shall be binding upon the
City, Developer, and their respective officers, elected officials, employees, agents,
volunteers,directors,contractors, and permitted successors and assigns.
6. Legal Challenges and Indemnification. Nothing herein shall be construed to require the
City to defend any 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 and
potential approval of the Revenue Sharing Agreement. Developer may, however, in its
sole and absolute discretion, appear as real party in interest in any such third party action
or proceeding, and in such event, Developer and the City shall defend such action or
proceeding and Developer shall be responsible for all reasonable attorneys' fees and costs,
in their entirety,which may be incurred by the City in defense of such action or proceeding.
City shall consult with Developer regarding the retention of legal counsel; 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,
Developer agrees to indemnify,defend and hold harmless the City and its officials,officers,
employees and agents from and against any order, award,or judgment against the City for
attorneys' fees, costs or damages resulting from the consideration and any approval of the
Revenue Sharing Agreement or Developer's participation in the Hotel Revenue Sharing
Program, including without limitation any appeal, except to the extent arising from the
gross negligence or willful misconduct of the City and/or its officials,officers,employees,
and agents.
7. Attorneys' Fees. In the event that any action or proceeding, including arbitration, is
commenced by either the City or Developer against the other to establish the validity of
this Agreement or to enforce any one or more of its terms,the prevailing party in any such
action or proceeding shall be entitled to recover from the 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 fees, including actual costs and attorneys' fees on appeal.
8. Jurisdiction and Venue. This Agreement is executed and is to be performed in the City of
San Juan Capistrano, Orange County, California, and any action or proceeding brought
relative to this Agreement shall be heard in the appropriate court in the County of Orange,
California. The City and Developer each consent to the personal jurisdiction of the court
in any such action or proceeding.
9. Severability. If any term or provision of this Agreement is found to be invalid or
unenforceable, the City and Developer both 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.
10. Interpretation/ Incorporation by Reference. 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. The exhibits attached
hereto are hereby incorporated by reference as though fully set forth in this Agreement.
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11.No Guarantee of Approval of the Revenue Sharing Agreement. Developer understands
and agrees that nothing in this Agreement shall be deemed or construed to constitute any
guarantees or promises that the Revenue Sharing Agreement will be approved,certified or
adopted. In the event that the Revenue Sharing Agreement is not approved, Developer
understands and agrees that Developer shall not be due any refund of Expenses already
paid or deposited with the City, other than as set forth in Section 1 of this Agreement.
12. Representations of Authority. Each party signing this Agreement on behalf of a party
which is not a natural person hereby represents and warrants to the other party 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.
13. Notices.Notices,deposits and any other documents or material required to be or otherwise
given pursuant to this Agreement shall be sent to the following:
If to City:
City Manager San Juan Capistrano City Attorney
City of San Juan Capistrano Best Best& Krieger LLP
32400 Paseo Adelanto 655 W. Broadway, 15th Floor
San Juan Capistrano, CA 92675 San Diego CA 92101
BSiegel@sanivancapistrano.org Jeff.Ballinger@,bbklaw.com
If to Developer:
South Coast Investors II, LLC Allen Matkins Leck Gamble Mallory&Natsis LLP
31866 Camino Capistrano 1900 Main Street, 5th Floor
San Juan Capistrano, CA 92675 Irvine, CA 92614
Attention: Dan Friess or Jake Griffith Attention: Matthew Fogt
dfriess@,friessproperty.com mfogt@,allenmatkins.com
jriffith(a,missioncommercial.com (949) 851-5453
(949)496-1316
Notices given pursuant to this Agreement shall be deemed received as follows:
1. If sent by United States Mail -three(3) calendar days after deposit into the
United States Mail, first class postage prepaid.
2. If by electronic mail - upon electronic transmission.
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 13 may be changed upon written notice
of such change to either the City or Developer, as appropriate.
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IN WITNESS WHEREOF,the City and Developer have executed this Agreement as the
dates set forth below.
[SIGNATURES ON FOLLOWING PAGE]
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SIGNATURE PAGE
TO
AGREEMENT PROVIDING FOR ADVANCEMENT OF FUNDS
FOR PARTICIPATION IN HOTEL
TRANSIENT OCCUPANCY TAX REVENUE SHARING INCENTIVE PROGRAM
DEVELOPER THE CITY OF SAN JUAN CAPISTRANO,
a California general law city and municipal
corporation
SOUTH COAST INVESTORS II, LLC City of San Juan Capistr o
a California limited liability company
By:
By: RIVENDELL LAND COMPANY, INC. jami lege
a Califom' •. . ration,i s ber City anager
- 001110" Date: `I7-11(
Wriffith
Managing Member
Date: e• 16 l
ATTESTED TO. ATTESTED TO:
By: By:
Jak• Griffit'1111 'a Morris
Project Manager City Clerk
APPROVED AS TO FORM:
Best Best& Krieger LLP
3 -�
By:
Jeffrey S. Ballinger
City Attorney
6
SIGNATURE PAGE
TO
AGREEMENT PROVIDING FOR ADVANCEMENT OF FUNDS
FOR PARTICIPATION IN HOTEL
TRANSIENT OCCUPANCY TAX REVENUE SHARING INCENTIVE PROGRAM
DEVELOPER THE CITY OF SAN JUAN CAPISTRANO,
a California general law city and municipal
corporation
SOUTH COAST INVESTORS II, LLC City of San Juan Capistrano
a California limited liability company
By:
By: RIVENDELL LAND COMPANY, INC. jami lege
a Califon-1'• •. 'oration, i s • •'ber 17City
• Date:
�t - 17-!
�
W'•' am Griffith
Managing Member
Date: 6• t '• le.
ATTESTED TO: ATTESTED TO:
BY: ANBy: L11114.&
Jai(' Griffit, �' • 'a orris
Project Manager City Clerk
APPROVED AS TO FORM:
Best Best& Krieger LLP
By:
Jeffrey S. Ballinger
City Attorney
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