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01-0417_BRANDON, MILES D._Owner Participation AgreementOWNER PARTICIPATION AGREEMENT This Agreement is made this 17th day of April 2001, by and between the San Juan Capistrano Community Redevelopment Agency (hereinafter "Agency"), and Miles D. Brandon, an individual (hereinafter "Owner"). RECITALS: Whereas, Owner proposes to expand its automobile sales business known as Capistrano Volkswagen at its existing location on Valle Road in San Juan Capistrano by establishing new additional auto showroom and service areas ("the project improvements"), and Whereas, Owner intends to construct such project improvements on an adjoining parcel which has previously been used for auto dealership purposes for many years, and Whereas, Owner has requested financial assistance from the Agency to construct certain public and related improvements to complete the project improvements, and Whereas, Agency finds that pursuant to a study by its consultant, Keyser and Marston Associates, the establishment of such improvements at this location will result in substantial additional sales taxes to the City of San Juan Capistrano (hereinafter "City") and property tax increment to the Agency, and Whereas, Agency is authorized to provide financial assistance to Owner pursuant to Health and Safety Code section 33220(b), NOW, THEREFORE, BE IT MUTUALLY AGREED between the Agency and Owner as follows: Section 1. Contingent Financial Assistance To Owner. In consideration of the significant economic benefits that Owner will bring to the San Juan Capistrano community from the addition of the above described improvements, Agencywill provide financial assistance to Owner under the following terms and conditions: (a) Agency shall reimburse Owner funds in accordance with the following apportionment formula. Owner shall be paid on a quarterly basis in an amount determined in accordance with sales tax generated from new sales generated from the project improvements as follows: 1 CU ClT ATTORNEMI kmagenWgr"e ,wpd 0 0 1. Owner shall be paid from Agency funds annually an amount equal to fifty percent (50%) of sales taxes generated over and above the first $225,000 of sales taxes derived from Owner' s entire automobile sales operation on Valle Road over the course of a operating year, but in any event not to exceed $35,000 in any one operating year. Thus, Owner shall not receive any quarterly funds in and operating year should sales taxes not exceed $225,000 in any given year. 2. This reimbursement obligation shall terminate when Owner has been paid the total sum of Five Hundred Thousand Dollars ($500,000.00), or at the end of twenty-two (22) years, whichever occurs first. 3. Owner shall receive quarterly payments based upon sales tax generation as described above approximately 120 days after the end of each calender quarter. (b) "Operating year" shall mean (1) the twelve (12) calendar months beginning on the commencement date of business activity (i.e., date of first sale) upon completion of Project improvements, and (ii) each twelve (12) calendar months thereafter. If the commencement date falls on a day other than the first day of a calendar month, the first Operating Year shall consist of the twelve calendar months beginning with the first month after the commencement date plus the period from the commencement date until the first day of the first calendar month. The quarterly payment shall be made to Owner within approximately (90) days following verification by City of the Tax revenues during the immediate previous quarter. For purposes of determining sales tax revenue deriving from leased automobile sales, sales tax data shall be used only from sales data supplied from Owner's primary leasing agent. Owner and Agency agree that the primary leasing agents are VW Credit, Inc. and Capistrano Finance Corporation. Owner agrees to cooperate and make every effort to have its leasing agent provide this data in a timely manner. "Taxes and Sales Taxes" shall mean an amount equal to one hundred percent (100%) of that portion of sales tax revenues derived by the City from Bradley Burns Uniform Local Sales and Use Tax (Revenue and Taxation Code sections 7200, et seq.). If there is change in the applicable law at any time during the term of this Agreement and City, s share of sales tax revenues becomes less than one percent (1 %) of retail sales, that reduction shall be reflected in the computations required under this agreement. -2- C CITY ATTORNEMollm a nOQn entwy0 2002. Section 2. Owner's Projected Time -frame for Start Up. Owner projects to have his improvements in place and operational by January 1, Section 3. Term of Agreement. This Agreement shall remain in full force and effect so long as the obligations under this Agreement remain uncompleted, but in any event not later than twenty-two (22) years from the date of execution of this Agreement. Section 4. Dispute Resolution. In the event of a dispute between the parties, each agrees to first formally meet and confer regarding the matter. If the dispute cannot be resolved through a meet and confer session, the matter will then be referred to non-binding mediation. If non-binding mediation is not successful, the parties shall determine in writing whether binding arbitration is appropriate. Thereafter, judicial remedies shall be available to resolve the dispute. Section 5. Assignments This agreement may not be assigned to any party without the written consent of the agency. Section 6. Notices. Any notices given under this Agreement may be sent by first class mail, postage prepaid, or by fax transmission as follows: To Agency: San Juan Capistrano Redevelopment Agency Attn: George Scarborough, Executive Director 32400 Paseo Adelanto San Juan Capistrano CA 92675 Telephone Number: 949/493-1171 Facsimile Number: 949/493-1053 To Owner: Capistrano Volkswagen Miles Brandon 32852 Valle Road San Juan Capistrano CA 92675 Telephone Number: 949/837-4800 Facsimile Number: 949/493-4511 -3- C CITY ATTCRNEMOIWwagaa AWeam tWPd Section 7. No Assignments Without Agency Consent. This Agreement may not be assigned or hypothecated in any manner without the written approval of the Agency. Section 8. Entire Agreement. This Agreement contains the entire Agreement and understanding of the parties concerning the subject matter herein. IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year first written above. Owner: By: Mil s Brandon ATTEST: By:"(/M &aa .Z' 'Dawn Sch nderl, Acting City Clerk APPR VE AS TO FORM: By: John .Shaw,Ci Attorney Agency: By:104ct' A DIANE BATHGATE, VICE I"N -4- C CITY ATTORNEYNolksw&gw% eeme twpd