20-0810_DC PROPERTIES 2, LP_Transient Occupancy Tax Payment Deferral AgreementRECORDING REQUESTED BY:
City of San Juan Capistrano
WHEN RECORDED MAIL TO:
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Attention: City Manager
Recorded in Official Records, Orange County
Hugh Nguyen, Clerk -Recorder
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No Recording Fee Required: Exempt pursuant to Government Code § 27383.
Transient Occupancy Tax Payment Deferral Agreement
This TRANSIENT OCCUPANCY TAX PAYMENT DEFERRAL AGREEMENT (the
"Agreement") is made and entered into by and among the CITY OF SAN JUAN CAPISTRANO, a
California general law city and municipal corporation (the "City"), and DC Properties 2, LP, a
California limited partnership, dba Best Western Capistrano Inn ("Hotel Operator"), which operates the
Best Western Capistrano Inn, located at 27174 Ortega Highway, San Juan Capistrano, California (the
"Hotel"). The City and Hotel Operator are sometimes collectively referred to as the "Parties."
RECITALS:
A. The City is authorized to, and does collect transient occupancy tax ("TOT") pursuant to
Title 3, Chapter 3, Article 6 of the San Juan Capistrano Municipal Code. Such TOT is imposed on
transient occupants within the City, and collected by the operators of hotels and remitted on a quarterly
basis to the City.
B. As a result of the COVID-19 worldwide pandemic, the federal, state and local
governments have declared a state of emergency, and the Governor of the State of California issued
Executive Order N-33-20, which mandates that all individuals living in the State of California must stay
at home, except as need to maintain continuity of operations of the federal critical infrastructure sectors,
as defined by Executive Order N-33-20.
C. As a result of the COVID-19 worldwide pandemic and the Executive Order N-33-20,
many businesses within California, including San Juan Capistrano, have suffered extremely severe loss
of revenues, as individuals are ordered to shelter in place at their homes. Similar shelter in place orders
have been ordered in other parts of the country and the world, resulting in a steep decline in tourism, the
likes of which have not been seen in recent history.
D. The hotel and tourism industry is a substantial source of local government revenue for the
City of San Juan Capistrano, and it is in the public interest to ensure that the hotel and tourism industries
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survive this severe decline in tourism and are capable of providing continuity of operations once the
COVID-19 emergency is abated.
E. The City Council of the City of San Juan Capistrano has authorized a temporary deferral
of the obligation of the Hotel to remit TOT, for the first quarter of calendar year 2020 until December
31, 2020, as set forth more fully in this Agreement.
F. The purpose of this Agreement is to set forth the terms and conditions under which the
Hotel Operator's TOT, owed to the City, shall be temporarily deferred, but ultimately paid to the City.
NOW, THEREFORE, in consideration of the terms, conditions and promises set forth herein, it
is agreed as follows:
TERMS
Recitals. The Recitals are incorporated into and are a part of this Agreement.
2. Deferral. The City hereby agrees to defer, to December 31, 2020, the City's right to
enforce Hotel Operator's obligation to remit the TOT collected by Hotel Operator from transient
occupants at the Hotel for the quarter ended March 31, 2020.
3. Hotel Operator Responsibilities. Under Section 3-3.606 of the San Juan Capistrano
Municipal Code, each hotel operator must, on or before the last day of the month following the close of
each calendar quarter make a return to the City, on forms provided by the City, that reports the total rents
charged and received and the amount of tax collected for transient occupancies. At the time the return is filed, the
full amount of the tax collected must be remitted to the City. However, as a result of the deferral provided by
this Agreement, collections of TOT for the first quarter of calendar year 2020 will be due no later than
December 31, 2020 and no penalties will be imposed for the late payment of such TOT or the late filing
of the tax return for the quarter ended March 31, 2020, if all obligations imposed by this Agreement are
complied with as set forth herein.
4. Term. The Term of this Agreement shall commence on the date that this Agreement is
fully executed by both Parties, and shall continue in full force and effect until all monetary obligations
imposed on Hotel Operator under this Agreement have been fully paid to City.
5. Future Obligations. Following the deferral period provided by this Agreement, Hotel
Operator shall continue to make all subsequent TOT payments for the Hotel on a quarterly basis, by the
required due date, as would otherwise be required under the San Juan Capistrano Municipal Code.
6. Penalties/Interest. In the event the Hotel Operator fulfills its obligation to pay TOT for
the second, third and fourth quarters of calendar year 2020 by the required due date for each quarter, and
the full payment of deferred TOT for the first quarter of 2020 by December 31, 2020, City agrees to
forego seeking to collect penalties and/or interest, as is otherwise authorized by the San Juan Capistrano
Municipal Code, other than an imposition of 2% interest to be imposed for the period from April 30,
2020 though the date that payment has been made in full for all TOT due for the quarter ended March
31, 2020.
7. Obligation to Pay Future Taxes. In no way shall this Agreement modify, reduce, or
eliminate any future tax obligations of the Hotel Operator, including any subsequent tax owed to the
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City. This agreement only pertains to the deferred taxes owed by the Hotel Operator. Hotel Operator
shall be responsible for the full and timely payment of future TOT obligation owed to the City. Failure
to pay all TOT due to the City by December 31, 2020 for the first quarter or within 30 days of the end of
every other quarter of 2020, shall constitute a default of this agreement, subject to all of the penalties,
remedies, and interest impositions set forth in Section 8 below and in the San Juan Capistrano Municipal
Code.
8. Default, Accelerated Payment and Remedies. Should the Hotel Operator violate any term
of this Agreement, including failure to make the full payment of deferred TOT by December 31, 2020,
or full payment of TOT due for any other the quarter of 2020 by the due date applicable to that quarter,
in addition to any other remedy available to City, following written notice to Hotel Operator and a ten
(10) day opportunity to cure, the full balance of the outstanding deferred TOT, as well as any accrued
interest and penalties as set forth in the San Juan Capistrano Municipal Code, shall be deemed a debt
owed to the City, which may be collected in an action for breach of contract. In addition to the foregoing
remedy, the City may enforce this Agreement, including any unpaid deferred TOT, interest and
penalties, through any or all of the following remedies notwithstanding any provision to the contrary in
the San Juan Capistrano Municipal Code:
(a) Penalty for Fraud. If failure to remit unpaid deferred TOT is due to Hotel Operator's
fraud, the City may add a penalty of one hundred percent of the amount of the tax and
penalties.
(b) Lien. The unpaid deferred TOT shall constitute a lien upon all real property in
Orange County owned by Hotel Operator. The recordation of this Agreement shall
constitute constructive notice of any such lien.
(c) Warrant for Collection of Tax. The City may issue a warrant for the enforcement of
any liens and for the collection of any amount required to be paid to the City under
this Agreement.
(d) Seizure and Sale. The City may seize any property, real or personal, of the Hotel
Operator and sell the property, or a sufficient part of it, at public auction to pay the
amount due together with any penalties and interest imposed for the delinquency and
any costs incurred on account of the seizure and sale.
(e) Withhold Notice. The City may give notice to all persons having in their possession
or under their control any credits or other personal property belonging to the Hotel
Operator, and prevent those persons from transferring or disposing of the Hotel
Operator's credits, personal property, or debts until the City consents to their transfer
or disposition or until 60 days elapse after receipt of the notice, whichever occurs
earlier.
(f) Collection by Court Action. Any delinquent unpaid deferred TOT under this
Agreement will be deemed a debt owed by the Hotel Operator to the City, which the
City may recover in an action brought in the name of the City.
9. Attorneys'. In the event that any action or proceeding is commenced to regarding
this Agreement, the prevailing party in such action or proceeding, in addition to all other relief to
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which it may be entitled, shall be entitled to recover from the other party the prevailing party's costs of
suit and reasonable attorneys' fees. The prevailing party shall be as determined by the court in
accordance with Code of Civil Procedure Section 1032. The attorney's costs and expert fees
recoverable pursuant to this Section include, without limitation, attorney's costs and expert fees
incurred on appeal and those incurred in enforcing any judgment rendered. Attorney's costs and fees
may be recovered as an element of costs in the underlying action or proceeding or in a separate
recovery action.
10. Waiver and Modification of Agreement. The failure of the City to insist upon strict
observance of, or compliance with, all of the terms of this Agreement in one or more instances, shall
not be deemed to be a waiver of the City's right to insist upon such observance of compliance with the
other terms of this Agreement. No breach of any provision hereof can be waived unless it is done in
writing and signed by the City. Waiver of any one breach shall not be deemed to be a waiver of any
other breach of the same or other provisions hereof. This Agreement may be amended only by written
agreement executed by the Parties. The City shall not be bound by any representation, warranty,
promise, statement or information, unless it is specifically set forth in this Agreement.
11. Reservation of Rights. Except as specifically set forth in this Agreement, nothing in
this Agreement shall be deemed to limit or waive any other right or remedy the City may have under
the San Juan Capistrano Municipal Code or any other applicable law to enforce or collect any
delinquent taxes. The City reserves its right to pursue any other civil, criminal or administrative
remedies in the future against the Hotel Operator, or any successor of interest, for any unpaid
delinquent or deferred taxes owed to the City or any other violation of law.
12. Third Party Beneficiaries. Nothing contained in this Agreement is intended by the
Parties, or shall be construed, to confer any right on or to any party, other than the City and Hotel
Operator, including, without limitation, any transient occupant.
13. Recordation. This Agreement, or a memorandum of this Agreement, may be recorded
against the real property on which the Hotel is located. The Parties shall execute such other documents
as may be necessary to effectuate this provision.
14. Succession and Survival. This Agreement shall be binding upon the Parties, their agents,
representatives, and successors. Except as otherwise provided in this Agreement, all representations,
warranties and covenants set forth in this Agreement shall be deemed continuing and shall survive the
execution date of this Agreement.
15. Counterparts. The Parties may execute this Agreement in counterparts which shall, in the
aggregate, be signed by all the Parties. This Agreement may be executed in faxed or digital (".pdf") e-
mail counterparts and when so executed by the Parties, this Agreement will be binding upon them and
each counterpart will constitute an original document.
16. Governing Law. This Agreement is entered into and shall in all respects be interpreted,
enforced and governed by and under the laws of the State of California. Any action or proceeding to
enforce or interpret the terms of this Agreement shall be brought in Orange County, California.
17. Entire Agreement. This Agreement contains the entire understanding and agreement of
the Parties with respect to the subject matter hereof. The Parties have made no representation, covenant,
or undertaking other than those expressly set forth in this Agreement. The Parties hereby acknowledge
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and represent that in releasing, discharging and settling ccriain claims and in executing and entering into
this Agreement, no other Party, nor any agent, attorney or other representative of any Party has made
any promise, representation, warranty, covenant, warning or inducement whatsoever, express or implied,
except as contained in this Agreement, concerning all or any part of the subject matter hereof, to induce
them to execute this Agreement. The Parties hereby acknowledge and represent that they have read and
understand this Agreement, and each and every provision or term of this Agreement, and have reviewed
the same with legal counsel. This Agreement cannot be modified except by a written document signed
by all of the Parties. This is a fully integrated agreement.
18. Severability. If any portion of this Agreement is declared by a court of competent
jurisdiction to be invalid or unenforceable such portion will be deemed severed from this Agreement and
the remaining parts will continue in full force as though such invalid or unenforceable provision had not
been part of this Agreement.
19. Effective Date, This Agreement shall be effective as of the date of its complete execution
by the last signing party.
20. Notices. Notices and payments to the City and Hotel Operator, respectively, shall be
delivered to:
CITY:
City of San Juan Capistrano
Attn: City Manager
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
bsiegel@smjuancapistrano.org
HOTEL OPERATOR:
Best Western Capistrano Inn
Attn: Jignesh Leva
27174 Ortega Highway
San Juan Capistrano, CA 92675
jdleva@dc-em.com
21. Headings. All section headings and subheadings are inserted for convenience only and
shall not affect any construction or interpretation of this Agreement.
[Signatures on Next Page]
IN WITNESS WHEREOF, the Parties have executed this Agreement by their duly authorized
representatives as of the day set forth below.
EACH OF THE UNDERSIGNED HEREBY DECLARES THAT' THE TERMS OF THIS
AGREEMENT HAVE BEEN COMPLETELY AND ARE FULLY UNDERSTOOD, AND BY
EXECUTION HEREOF VOLUNTARILY ACCEPTS THF TERMS WITH THE INTENT TO BE
LEGALLY BOUND THEREBY.
APPROVED AS T04 ,EGAL FORM
/"
Jeffrey SIBallinger
City Attorney
61147.017OOWNI 830.1
[r)0t1A
CITY OF SAN JUAN CAPISTRANO, a general law city and
municipal corporation
By:
age 5o
Benjamin Siegel
City Manager
HOTEL OPERATOR:
DC Properties 2, LP, a California limited partnership,
dba Best Western Capistrano Inn
By. — cry T�
Jignesh Leva
Its: �C o a1' <S �yj,�� (Fa- l/I
Date:
Ot" %12\
Ga\lt°�e\Ce . �e
\.°°Sada°fie
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61147.01700173041830.1
A notary public or other officer completing this certificate verifies only the identity of the individual who signed
the document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
ALL-PURPOSE ACKNOWLEDGMENT NOTARY FOR CALIFORNIA
STATE OF CALIFORNIA )
COUNTY OF ORANGE )
On 40D v 2020
before me, JS v N Efrr
personally appeared 5 I G NES h 'D F LA T L'EVA
who proved to me on the basis of satisfactory evidence to
be the person(s) whose name(s) is/are subscribed to the
within instrument and acknowledged to me that he/she/they
executed the same in his/her/their authorized capacity(ies),
and that by his/her/their signature(s) on the instrument the
person(s), or the entity upon behalf of which the person(s)
acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of
the State of California that the foregoing paragraph is true
and correct.
BE1 jy� ADmWITNE7yhan, and official seal.
F COMM ..222 C
VON Q
U �mORAKKEE COUNTY MN
m My Term EW. Jan. 8, 2022
ignoture of Notary Public
OPTIONAL
Though the data below is not required by law, it may prove valuable to persons relying on the document and could
prevent fraudulent reattachment of this form.
CAPACITY CLAIMED BY SIGNER
❑ Individual
❑ Corporate Officer
Title(s)
(9 Partner(s) 0 Limited
/ General
❑ Attorney -In -Fact
❑ Trustee(s)
❑ Guardian/Conservator
❑ Other:
Signer is representing:
Name Of Person(s) Or Entity(les)
61147.0170003041830.1
DESCRIPTION OF ATTACHED DOCUMENT
Title or Type of Dominant
Number Off�es
o�T I o/ l 20 ao'
Date Of Document
Signer(s) Other Than Named Above
PUBLIC AGENCY FORM OF ACKNOWLEDGEMENT
A notary public or other officer completing this certificate
verifies only the identity of the individual who signed the
document, to which this certificate is attached, and not the
truthfulness, accuracy, or validity of that document.
State of California )
County of Orange ) ss.
City of San Juan Capistrano )
(Gov't Code 40814 & Civil Code 1181)
On July 16, 2020, before me, Maria Morris, City Clerk, personally appeared
Benjamin Siegel, City Manager and Jeffrey Ballinger, City Attorney, who proved tome on the
basis of satisfactory evidence to the be person(s) whose names) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the same in his/her/their authorized
capacity (ies), and that by his/her/there signature on the instrument the person(s), or the entity upon
behalf of which the person(s) acted, executed the instrument.
I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing
paragraph is true and correct. /�
(SEAL)
Capacity Claimed by Signers
City Manager
City Attorney
Title
Signer is Representing
City of San Juan Capistrano
hand and official seal.
Description of Attached Document
Title or Type of Document
Transient Occupancy Tax Payment Deferral
Agreement
DC Properties
(Best Western Capistrano Inn)