1997-0612_FLUIDMASTER, INC_Owner Participation Agreement• a
OWNER PARTICIPATION AGREEMENT
(Fluidmaster Project)
THIS OWNER PARTICIPATION AGREEMENT (the "Agreement") is entered into
on this 110 day of Jl uric 1997, by and between the SAN JUAN CAPISTRANO
COMMUNITY REDEVELOPMENT AGENCY, a public body corporate and politic
("Agency"), and FLUIDMASTER, INC., a California corporation (the "Participant").
RECITALS:
WHEREAS, Participant proposes to construct its corporate headquarters and a
manufacturing plant (the "Project") within the Agency's redevelopment plan project area,
more specifically known as the San Juan Capistrano Central Redevelopment Plan Project
(the "Redevelopment Plan"); and
WHEREAS, Participant (through its predecessor in the Project, Corian Cross, L.P.)
has secured land use approval (Architectural Control 495-02) for the Project, the location
of which is legally known as Parcel 2 of Parcel Map 83-861 (the "Site"); and
WHEREAS, Agency hereby finds and determines that the construction of the Project
will be in the public interest in that the Project will create new jobs for workers in the City
of San Juan Capistrano;
NOW, THEREFORE, AGENCY AND PARTICIPANT mutually agree as follows:
Section 1. Purpose of Agreement.
The purpose of this Agreement is to effectuate the Redevelopment Plan by providing
for certain tax increment reimbursements accruing to the Agency from the Project to
Participant over a stated period of years. The Project to be constructed is set forth on the site
plan, attached as Exhibit "1", and incorporated herein by reference. This Agreement is
entered into for the purpose of developing a manufacturing plant specializing in toilet
plumbing fixtures and not for speculation in land holding. Completing the development of
the Site pursuant to this Agreement is in the vital and best interest of the City of San Juan
Capistrano and the health, safety, and welfare of its residents, and in accord with the public
purposes and provisions of the applicable state and local laws and requirements under which
the Project has been undertaken.
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Section 2. The Agencv's Redevelopment Plan.
The Redevelopment Plan was approved and adopted by the City Council of the City
of San Juan Capistrano on May 17, 1984, as amended by Ordinances 4509, 547, 582. Said
ordinances and the Redevelopment Plan as so approved and amended are incorporated herein
by reference.
Section 3. The Site.
The Site consists of one parcel totaling approximately 565,408 square feet of land area
for a total acreage of 12.98 acres.
Section 4. Parties to the Agreement.
(a) The Ag_ena. The Agency is a public body, corporate and politic,
exercising governmental powers and functions and organized under the California
Redevelopment Law, to wit, Health and Safety Code sections 33000, et seq. The principal
office and mailing address of the Agency is 32400 Paseo Adelanto, San Juan Capistrano,
California 92675.
"Agency," as used in this Agreement, includes the San Juan Capistrano
Redevelopment Agency, and any assignee of or successor to its rights, powers and
responsibilities. Any action or approval of the Agency required hereunder may be taken or
given by the Agency Director or his/her designee, when specifically provided herein.
In addition, the City of San Juan Capistrano, hereinafter "City," is a third -party
beneficiary to this Agreement in that the project area for this project was approved by the
City of San Juan Capistrano.
(b) The Participant. The Participant is Fluidmaster, Inc., a California
corporation. By executing this Agreement, each person signing on behalf of the Participant
warrants and represents to the Agency that the Participant has the full power and authority
to enter into this Agreement, that all authorizations required to make this Agreement binding
upon the Participant have been obtained, and that the persons executing this Agreement on
behalf of the Participant are fully authorized to do so.
The principal office and mailing address of Participant is 1800 Via Burton,
P.O. Box 4264, Anaheim, California 92803.
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Section 5. Agency's Financial Obligation.
(a) Amount of Reimbursement. Agency hereby agrees to reimburse
Participant the total amount of Eight Hundred Thousand Dollars ($800,000.00) over a
proposed amortization schedule of twenty (20) years, which reimbursement shall be paid
from tax increment funds deriving from the Project under the Redevelopment Plan. This
obligation is based upon increased tax increment arising from Participant's 1996 purchase
of the Site and improvements to be constructed as a part of the Project. Accordingly, the
parties agree to a Forty Thousand Dollar ($40,000.00) annual reimbursement to Participant,
subject to the limitations set forth in this section 5.
This reimbursement is provided based upon the finding that this project will
provide substantial jobs for the community and, secondly, is treated, in part, as a financial
offset against the extraordinary costs that Participant will incur in providing a high quality,
aesthetically compatible structure in relation to surrounding buildings as a result of City's
demanding land use requirements.
(b) Conditions Precedent. This financial obligation is contingent upon the
following allocation of tax increment formula:
(i) New tax increment arising from the Project shall first be paid to
the following taxing agencies based upon prior existing redevelopment agency agreements
and obligations: the Orange County Fire Authority, the County of Orange, the Capistrano
Unified School District, and twenty percent (201l0) Housing Set Aside Fund of the
Redevelopment Agency.
(ii) Then, seventy percent (70%) of the remaining tax increment shall
be dedicated to paying Participant annually the reimbursement set forth in subsection 5(a),
except that in no event shall the annual reimbursement payment exceed Forty Thousand
Dollars ($40,000.00).
(iii) The financial obligation set forth in Section 5(a) is also
contingent upon the Project, in fact, generating a level of tax increment sufficient each year
to satisfy and meet the reimbursement formula set forth herein. If the tax increment fund
generation shall fall short of the revenue projections necessary to meet the annual payment,
then the amortization schedule shall be appropriately lengthened in order to pay to
Participant the total sum of the reimbursement pledged by Agency in this Agreement.
(c) Timing of Initial First Installment Payment. The first annual
Reimbursement payment shall begin one (1) year after the first yearly tax increment is
collected.
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Section 6. Prohibition Against Change in Ownership, Management, and Control
of Participant. Transfer of the Site or Improvements, and Assignment
of Agreement.
(a) Prohibition. The qualifications and identity of the Participant are of
particular concern to the City and the Agency. It is because of those qualifications and
identities that the Agency has entered into this Agreement with the Participant. No voluntary
or involuntary successor in the interest of the Participant shall acquire any rights or powers,
including but not limited to the right of Agency financial assistance as set forth herein, under
this Agreement. If Participant shall make any total or partial sale, transfer, conveyance,
assignment or lease of the whole or any part of the Site or the improvements thereon without
prior written approval of the Agency, the financial obligation set forth in Section 5(a) shall
immediately terminate without any further or additional payment to Participant being made.
This Agreement shall thereupon terminate, and no further payment shall be due to or from
any of the parties hereto.
However, the following exceptions will not require Agency approval: a
change in stock ownership of less than 50% of the total outstanding stock; a lease of less than
20,000 square feet or less than five years' duration; a conveyance of any portion of the site
to an appropriate governmental agency; any assignment for financing purposes, including the
grant of a deed of trust to secure the funds necessary for construction or permanent financing
of the improvements; assignment in trust for benefit of spouse or children; transfers from
one shareholder to another providing the Site is not encumbered by any mortgages, deeds of
trust, liens or other security interests.
In the event of a proposed transaction described in this Section 6(a) (except
those transactions not requiring Agency approval pursuant to the preceding paragraph),
Participant agrees to use its best efforts to provide at least thirty (30) days' prior notice to
Agency. The notice shall present evidence regarding the proposed assignee's or purchaser's
development qualifications and experience and its financial commitments and resources (if
applicable). Agency shall grant approval of the proposed transaction within thirty (30) days,
Said approval shall not be unreasonably withheld.
(b) Successors and Assigns. The term of this Agreement shall not run
with the land and shall not inure to the benefit of Participant's successors and assigns, unless
so stipulated to in writing by the Agency.
Section 7. Development and Uses of the Site.
(a) The Participant is proposing a 163,591 square foot office, manufacturing
and distribution building and a 19,455 square foot research and development and employee
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recreation accessory building for a total development of 183,046 square feet with a 377 space
parking lot. All figures in this Agreement for the square footage of the Site and the Project
are subject to any adjustments required by Participant during the approval and construction
process.
The main building of 163,591 square feet will host corporate headquarters and
plant manufacturing. The office use will consist of product sales as well as day-to-day
administration. The manufacturing plant will serve as a manufacturing, assembly,
distribution and warehouse facility for plumbing parts and components.
(b) If Participant shall materially alter the uses of the Project as identified
in this Agreement without the approval of the Agency and the City of San Juan Capistrano,
the financial obligation set forth in Section 5(a) shall immediately terminate without any
further or additional payment to Participant being made. This Agreement shall thereupon
terminate, and no further payment shall be due to or from any of the parties hereto.
Section 8. Certificate of Completion.
(a) After completion of construction of the Project, the Agency shall furnish
to Participant a Certificate of Completion within thirty (30) days of the City's final approval
of the Chief Building Inspector's certificate of occupancy. The Certificate of Completion
shall be a conclusive determination of completion of the Project and shall serve the further
purpose of obligating the Agency to fulfill its reimbursement obligations under Section 5 of
the Agreement.
(b) If the Agency refuses or fails to furnish the Certificate of Completion
described above after written request from the Participant, the Agency shall, within thirty
(30) days, provide the Participant with a written statement of the reasons the Agency refused
or failed to furnish such Certificate of Completion. This statement shall also contain
Agency's opinion of the actions that the Participant must take to obtain a Certificate of
Completion.
Section 9. Maintenance of Property.
The Participant shall maintain the improvements, and the public improvements to the
back of the curblines adjacent to and surrounding the Site, in good condition, conforming to
all applicable local laws, and shall keep the Site free from any accumulation of debris or
waste materials. The Participant shall also maintain the landscaping required to be planted
on the Site in healthy condition in accordance with the approved landscape plan.
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Section 10. Defaults and Remedies.
(a) Defaults -- General. Failure or delay by either party to perform any
term or provision of this Agreement constitutes a default under this Agreement. A party
claiming a default ("claimant") shall give written notice of default to the other party,
specifying the nature of the default complained of and referencing the appropriate sections
of this Agreement under which such default arises.
Claimant shall not institute any legal proceedings against the other party until
the alleged defaulting party has had at least sixty (60) days from date of notice of default to
commence to cure, correct or remedy such failure or delay and shall complete such cure,
correction or remedy within sixty (60) days from the date of receipt of such notice, or if the
cure cannot reasonably be completed within sixty (60) days, that the cure has been
commenced and is diligently pursued to completion.
(b) Meet and Confer Process. If the default cannot be resolved by voluntary
action of the parties, or there is any other dispute between the parties, both parties shall first
meet and confer for a period of at least thirty (30) days before any enforcement action is
brought by any party.
(c) Binding Arbitration As Enforcement Remedy. Any default or any other
dispute arising under this Agreement which cannot be resolved or cured by meet and confer
sessions between the parties shall be subject to binding arbitration under the auspices of
J.A.M.S./Endispute.
(d) Applicable Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
Section 11. Participant Contribution Toward City/Agency Communi Center.
In consideration of Agency's commitments and covenants to Participant under the
terms of this Agreement, Participant hereby agrees to make a one time cash financial
contribution toward the City/Agency Community Center project. More particularly,
City/Agency has inadequate funding for furnishings (e.g., carpeting, chairs, tables, etc.) to
be installed and placed within the Conference Room of the Community Center. Accordingly,
Participant agrees to provide said furnishings up to an amount equal to Fifteen Thousand
Dollars ($15,000.00).
Participant agrees to pay a one time lump sum for actual furnishing costs, as certified
by the City's Finance Officer, within thirty (30) days of delivery of the furnishings to the
City. The delivery date is anticipated to be June 1, 1998.
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11
In recognition of Participant's contributions under this Section 12, a plaque (or
equivalent) denoting the contribution of Participant shall be placed in a prominent location
at the Conference Room of the Community Center.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
ATTEST:
Cheryl John ency Secretary
AP D AS TO FORM:
John V. Shaw, Agency Counsel
SAN JUAN CAPISTRANO COMMUNITY
0
AGENCY
Greiner, Vice Chairman
FLUIDMASTER, INC.
'=
Senior Vice President
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Exhibit 1
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t.�IYY OI SAN IVAry (wPISTRANOti
San Juan Capistrano
Community
Redevelopment
Agency
June 18, 1997
Mr. Robert Anderson Schoepe
Fluidmaster, Inc.
1800 Via Burton
P. O. Box 4264
Anaheim. California 92803
Re: Owner Participation Agreement
Dear Mr. Schoepe:
At their meeting of June 17, 1997, the San Juan Capistrano Community
Redevelopment Agency Board of Directors approved an Owner Participation
Agreement with Fluidmaster, Incorporated, to provide for Agency assistance in the
amount of $40,000 per year for 20 years, to offset costs of off-site improvements
and various governmental taxes. A fully -executed copy of the Owner Participation
Agreement is enclosed for your files.
The City Council had been scheduled to approve an agreement relating to a
deferral of development taxes and fees. However, that item was withdrawn from
consideration at the June 17, 1997, meeting. We will notify you when the item is '
again scheduled for Council consideration.
Please feel free to contact Douglas Dumhart at 443-6316 if you have any questions.
Very truly yours,
Cheryl Johnson
Agency Secretary
Enclosure
cc: Ken Friess
Tom Merrell
Douglas Dumhart
32400 Paseo Adelanto
San Juan Capistrano
California 92675
714 - 493-1171
0 •
COMMUNITY REDEVELOPMENT AGENCY
AGENDA ITEM
TO: George Scarborough, Executive Director
FROM: Douglas D. Dumhart, Senior Management Analyst 11
SUBJECT: Consideration of Owner Participation Agreement (OPA)
for Financial Assistance - Fluidmasters, Inc.
RECOMMENDATION:
June 17, 1997
By motion, approve the Owner Participation Agreement with Fluidmasters, Inc. and
authorize the chairman to executive the agreement.
SUMMARY:
Fluidmasters is requesting the Redevelopment Agency provide financial assistance to
offset some of the costs of development improvements, fees, and taxes. They have asked
for $40,000 a year for 20 years beginning one year after the first tax assessment is
collected. Assuming the project has $11,800,000 improvement valuation the tax increment
would be $118,000. Approximately 17% or $20,060 is obligated to other taxing agencies,
and 20% or $23,600 is earmarked for Agency housing set-aside. That would leave
$74,340 in tax increment to the Agency of which they have requested $40,000 resulting
in a net new annual increment of $34,340 to the Agency. The amount of assistance
Fluidmasters is seeking is insignificant when compared to the overall scope of their project
and the positive economic impact it represents. Therefore, staff is recommending approval
of the OPA to reimburse Fluidmasters and has prepared the attached OPA for the Board's
consideration.
BACKGROUND:
The Fluidmasters (a.k.a. Corian Cross) project was approved last year. The project will be
the largest single use structure in the community, as well as, a significant economic engine.
The project consists of a 163,500 sf corporate headquarters and manufacturing plant and
a 19,500 sf accessorary building for research and recreation. They bring with them initially
over 200 jobs and a potential injection of $60,000,000.00 annually to the San Juan
Capistrano and the adjacent South County area's economy.
Since their approval Fluidmasters has been working with their architects and engineers to
tackle the costs associated with development of this large project. They have identified a
FOR CITY COUNCIL AGENd
UUU
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COMMUNITY REDEVELOPMENT AGENCY
AGENDA ITEM - 2 -
E
June 17, 1997
$3,000,000 funding shortfall and have asked for financial assistance to help close this gap.
Fluidmasters states that the accessory building is not a part of the $3,000,000 shortfall and
is more or less a venture between Fluidmasters and Terramaster for research and
development purposes. The costs for the project are as follows:
Land Acquisition: $3,800,000
Main Building:
Shell and Site Work: $5,827,416
Tenant Improvement and fixtures $2.256.165
Total $8,083,581
Accessory Building:
Shell and Site Work $ 850,609
Tenant Improvement and fixtures $ 286.172
Total $1,136,781
Simply stated, the $3,000,000 shortfall is actually cost excess which is a product of the
high quality design and architectural aesthetics of the building and grounds. Fluidmasters
determined the shortfall by comparing the total estimated cost of the project with surveys
relating to comparable properties in Orange County. Fluidmasters states that, "comparable
space elsewhere in the County indicate fair rental value would be $0.35 per square foot
per month. That would result in a fair market value for the main building of $8,100,000.
The total estimate cost for the main building and pro rata share of the land cost is projected
at $11,800,000, exclusive of financing costs."
Staff has investigated the comparable rent issue. There are not many 150,000 - 200,000
square foot facilities available. Those that are available have rents that vary greatly. When
staff calculated the rent necessary to support the $11,800,000 project cost it equated to
$0.51 per square foot per month. The difference between their claim of comparable rents
of $0.35 and the $0.51 square foot estimated cost is $0.17 per square foot per month.
Fluidmasters is requesting the Redevelopment Agency provide financial assistance to
offset the costs of off-site improvements and various governmental agencies' development
taxes. They have asked for $40,000 a year for 20 years beginning one year after the first
tax assessment is collected.
According to the California Association for Local Economic Development for every
manufacturing job that comes to a community there will be another two jobs added to the
South County area in other forms. Fluidmasters will bring 200 new jobs to the community
with a payroll in excess of $12,000,000.00 annually. Those jobs should result in 400 other
new jobs in the local area economy. This factor is called the multiplier effect and is
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COMMUNITY REDEVELOPMENT AGENCY
AGENDA ITEM - 3 -
0
June 17, 1997
typically applied to the gross new wages created by the employer. A business of this type
and size can have a multiplier effect of five times hence, the $60,000,000.00 annual
injection of new dollars to the South County economy. Given the expectation that the next
prospective developer at this site may not invest as much to build a high end product; that
a future developer could request even more assistance with another project; and, that the
business has positive secondary economic benefits; staff supports their request for
financial assistance.
FINANCIAL CONSIDERATIONS:
Financial assistance is provided from reimbursement of property taxes collected. If the
project is not constructed no assistance is required. Should the project be constructed it
would result in new tax increments that would not have been realized had the project not
been developed.
The City Attorney has prepared the owner participation agreement. The following is a
summary of key provisions of the agreement as prepared by the City Attorney for Council
review:
1. The purpose of the Agreement is to offset extraordinary development costs
for the project by providing a reimbursement to Developer of a portion of tax
increment deriving from this project development. (See Section 1)
2. The Agency's financial reimbursement obligation is limited to $800,000 from
tax increment from this project, spread over an amortization period of 20
years. (Section 5 (a) ) Thus, the annual obligation will be $40,000.
3. The $40,000 annual obligation will be paid only in the event that all other
Agency obligations with respect to affected taxing agencies are first satisfied.
(Section 5 (b) (i), (ii) )
4. If the ownership of Fluidmasters is transferred without Agency consent, or
the site used for other purposes without Agency consent, then this $800,000
tax increment obligation shall terminate. (Section 6(a) )
5. In light of the Agency's reimbursement commitment to Fluidmasters,
Fluidmasters shall make a one time financial donation in the amount of up
to $15,000 for furnishings to the Community Center Conference room. (See
Section 11 ).
0
COMMUNITY REDEVELOPMENT AGENCY
AGENDA ITEM - 4 -
NOTIFICATION:
Mr. Robert Anderson Schoepe, Fluidmasters
Mr. Ken Friess, The Friess Company
Mr. Tom Merrill, Civic Solutions
BOARDS/COMMISSIONS/COMMITTEE REVIEW:
Not Applicable.
ALTERNATE ACTIONS:
0
June 17, 1997
Approve the Owner Participation Agreement with Fluidmasters and authorize the
chairman to executive the agreement.
2. Approve the Owner Participation Agreement with Fluidmasters and authorize the
chairman to executive the agreement subject to modifications.
3. By motion, do not approve the Owner Participation Agreement with Fluidmasters.
4. By motion, continue the item and refer to staff for additional information.
RECOMMENDATION:
By motion, approve the Owner Participation Agreement with Fluidmasters and authorize
the chairman to executive the agreement.
Respectfully submitted,
A�74���
Douglas D. Dumhart
Senior Management Analyst II
Attachment: 1. Owner Participation Agreement
CAA GEN DAS\ 1997\6-17 F LD. CRA
• 0
OWNER PARTICIPATION AGREEMENT
(Fluidmaster Project)
THIS OWNER PARTICIPATION AGREEMENT (the "Agreement") is entered into
on this _ day of , 1997, by and between the SAN JUAN CAPISTRANO
COMMUNITY REDEVELOPMENT AGENCY, a public body corporate and politic
("Agency"), and FLUIDMASTER INC., a California corporation (the "Participant").
RECITALS:
WHEREAS, Participant proposes to construct its corporate headquarters and a
manufacturing plant (the "Project") within the Agency's redevelopment plan project area,
more specifically known as the San Juan Capistrano Central Redevelopment Plan Project
(the "Redevelopment Plan"); and
WHEREAS, Participant (through its predecessor in the Project, Corian Cross, L.P.)
has secured land use approval (Architectural Control #95-02) for the Project, the location
of which is legally known as Parcel l of Parcel Map 83-861 (the "Site"); and
WHEREAS, Agency hereby finds and determines that the construction of the Project
will be in the public interest in that the Project will create new jobs for workers in the City
of San Juan Capistrano;
NOW, THEREFORE, AGENCY AND PARTICIPANT mutually agree as follows:
Section 1. Purpose of Aareement.
The purpose of this Agreement is to effectuate the Redevelopment Plan by providing
for certain tax increment reimbursements accruing to the Agency from the Project to
Participant over a stated period of years. The Project to be constructed is set forth on the site
plan, attached as Exhibit "1" and incorporated herein by reference. This Agreement is
entered into for the purpose of developing a manufacturing plant specializing in toilet
plumbing fixtures and not for speculation in land holding. Completing the development of
the Site pursuant to this Agreement is in the vital and best interest of the City of San Juan
Capistrano and the health, safety, and welfare of its residents, and in accord with the public
purposes and provisions of the applicable state and local laws and requirements under which
the Project has been undertaken.
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Section 2. The Agency's Redevelopment Plan.
The Redevelopment Plan was approved and adopted by the City Council of the City
of San Juan Capistrano on May 17, 1984, as amended by Ordinances #509, 547, 582. Said
ordinances and the Redevelopment Plan as so approved and amended are incorporated herein
by reference.
Section 3. The Site.
The Site consists of one parcel totaling approximately 565,408 square feet of land area
for a total acreage of 12.98 acres.
Section 4. Parties to the Agreement.
(a) The Agency. The Agency is a public body, corporate and politic,
exercising governmental powers and functions and organized under the California
Redevelopment Law, to wit, Health and Safety Code sections 33000, et seq. The principal
office and mailing address of the Agency is 32400 Paseo Adelanto, San Juan Capistrano,
California 92675.
"Agency," as used in this Agreement, includes the San Juan Capistrano
Redevelopment Agency, and any assignee of or successor to its rights, powers and
responsibilities. Any action or approval of the Agency required hereunder may be taken or
given by the Agency Director or his/her designee, when specifically provided herein.
in addition, the City of San Juan Capistrano, hereinafter "City," is a third -party
beneficiary to this Agreement in that the project area for this project was approved by the
City of San Juan Capistrano.
(b) The Participant. The Participant is Fluidmaster, Inc., a California
corporation. By executing this Agreement, each person signing on behalf of the Participant
warrants and represents to the Agency that the Participant has the full power and authority
to enter into this Agreement, that all authorizations required to make this Agreement binding
upon the Participant have been obtained, and that the persons executing this Agreement on
behalf of the Participant are fully authorized to do so.
The principal office and mailing address of Participant is 1800 Via Burton,
P.O. Box 4264, Anaheim, California 92803.
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Section 5. Agency's Financial Obligation.
(a) Amount of Reimbursement. Agency hereby agrees to reimburse
Participant the total amount of Eight Hundred Thousand Dollars ($800,000.00) over a
proposed amortization schedule of twenty (20) years, which reimbursement shall be paid
from tax increment funds deriving from the Project under the Redevelopment Plan. This
obligation is based upon increased tax increment arising from Participant's 1996 purchase
of the Site and improvements to be constructed as a part of the Project. Accordingly, the
parties agree to a Forty Thousand Dollar ($40,000.00) annual reimbursement to Participant,
subject to the limitations set forth in this section 5.
This reimbursement is provided based upon the finding that this project will
provide substantial jobs for the community and, secondly, is treated, in part, as a financial
offset against the extraordinary costs that Participant will incur in providing a high quality,
aesthetically compatible structure in relation to surrounding buildings as a result of City's
demanding land use requirements.
(b) Conditions Precedent. This financial obligation is contingent upon the
following allocation of tax increment formula:
(i) New tax increment arising from the Project shall first be paid to
the following taxing agencies based upon prior existing redevelopment agency agreements
and obligations: the Orange County Fire Authority, the County of Orange, the Capistrano
Unified School District, and twenty percent (201/6) Housing Set Aside Fund of the
Redevelopment Agency.
(ii) Then, seventy percent (70%) of the remaining tax increment shall
be dedicated to paying Participant annually the reimbursement set forth in subsection 5(a),
except that in no event shall the annual reimbursement payment exceed Forty Thousand
Dollars ($40,000.00).
(iii) The financial obligation set forth in Section 5(a) is also
contingent upon the Project, in fact, generating a level of tax increment sufficient each year
to satisfy and meet the reimbursement formula set forth herein. If the tax increment fund
generation shall fall short of the revenue projections necessary to meet the annual payment,
then the amortization schedule shall be appropriately lengthened in order to pay to
Participant the total sum of the reimbursement pledged by Agency in this Agreement.
(c) Timing of Initial First Installment Pa iy nent. The first annual
Reimbursement payment shall begin one (1) year after the first yearly tax increment is
collected.
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Section 6. Prohibition Against Change in Ownership, Management, and Control
of Participant. Transfer of the Site or Improvements, and Assignment
of Agreement.
(a) Prohibition. The qualifications and identity of the Participant are of
particular concern to the City and the Agency. It is because of those qualifications and
identities that the Agency has entered into this Agreement with the Participant. No voluntary
or involuntary successor in the interest of the Participant shall acquire any rights or powers,
including but not limited to the right of Agency financial assistance as set forth herein, under
this Agreement. If Participant shall make any total or partial sale, transfer, conveyance,
assignment or lease of the whole or any part of the Site or the improvements thereon without
prior written approval of the Agency, the financial obligation set forth in Section 5(a) shall
immediately terminate without any further or additional payment to Participant being made.
This Agreement shall thereupon terminate, and no further payment shall be due to or from
any of the parties hereto.
However, the following exceptions will not require Agency approval: a
change in stock ownership of less than 50% of the total outstanding stock; a lease of less than
20,000 square feet or less than five years' duration; a conveyance of any portion of the site
to an appropriate governmental agency; any assignment for financing purposes, including the
grant of a deed of trust to secure the funds necessary for construction or permanent financing
of the improvements; assignment in trust for benefit of spouse or children; transfers from
one shareholder to another providing the Site is not encumbered by any mortgages, deeds of
trust, liens or other security interests.
In the event of a proposed transaction described in this Section 6(a) (except
those transactions not requiring Agency approval pursuant to the preceding paragraph),
Participant agrees to use its best efforts to provide at least thirty (3 0) days' prior notice to
Agency. The notice shall present evidence regarding the proposed assignee's or purchaser's
development qualifications and experience and its financial commitments and resources (if
applicable). Agency shall grant approval of the proposed transaction within thirty (30) days.
Said approval shall not be unreasonably withheld.
(b) Successors and Assigns. The term of this Agreement shall not run
with the land and shall not inure to the benefit of Participant's successors and assigns, unless
so stipulated to in writing by the Agency.
Section 7. Development and Uses of the Site.
(a) The Participant is proposing a 163,591 square foot office, manufacturing
and distribution building and a 19,455 square foot research and development and employee
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0 0
recreation accessory building for a total development of 183,046 square feet with a 377 space
parking lot. All figures in this Agreement for the square footage of the Site and the Project
are subject to any adjustments required by Participant during the approval and construction
process.
The main building of 163,591 square feet will host corporate headquarters and
plant manufacturing. The office use will consist of product sales as well as day-to-day
administration. The manufacturing plant will serve as a manufacturing, assembly,
distribution and warehouse facility for plumbing parts and components.
(b) If Participant shall materially alter the uses of the Project as identified
in this Agreement without the approval of the Agency and the City of San Juan Capistrano,
the financial obligation set forth in Section 5(a) shall immediately terminate without any
further or additional payment to Participant being made. This Agreement shall thereupon
terminate, and no further payment shall be due to or from any of the parties hereto.
Section 8. Certificate of Completion.
(a) After completion of construction of the Project, the Agency shall furnish
to Participant a Certificate of Completion within thirty (30) days of the City's final approval
of the Chief Building Inspector's certificate of occupancy. The Certificate of Completion
shall be a conclusive determination of completion of the Project and shall serve the further
purpose of obligating the Agency to fulfill its reimbursement obligations under Section 5 of
the Agreement.
(b) If the Agency refuses or fails to furnish the Certificate of Completion
described above after written request from the Participant, the Agency shall, within thirty
(30) days, provide the Participant with a written statement of the reasons the Agency refused
or failed to furnish such Certificate of Completion. This statement shall also contain
Agency's opinion of the actions that the Participant must take to obtain a Certificate of
Completion.
Section 9. Maintenance of Property.
The Participant shall maintain the improvements, and the public improvements to the
back of the curblines adjacent to and surrounding the Site, in good condition, conforming to
all applicable local laws, and shall keep the Site free from any accumulation of debris or
waste materials. The Participant shall also maintain the landscaping required to be planted
on the Site in healthy condition in accordance with the approved landscape plan.
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Section 10. Defaults and Remedies.
(a) Defaults -- General. Failure or delay by either party to perform any
term or provision of this Agreement constitutes a default under this Agreement. A party
claiming a default ("claimant") shall give written notice of default to the other party,
specifying the nature of the default complained of and referencing the appropriate sections
of this Agreement under which such default arises.
Claimant shall not institute any legal proceedings against the other party until
the alleged defaulting party has had at least sixty (60) days from date of notice of default to
commence to cure, correct or remedy such failure or delay and shall complete such cure,
correction or remedy within sixty (60) days from the date of receipt of such notice, or if the
cure cannot reasonably be completed within sixty (60) days, that the cure has been
commenced and is diligently pursued to completion.
(b) Meet and Confer Process. If the default cannot be resolved by voluntary
action of the parties, or there is any other dispute between the parties, both parties shall first
meet and confer for a period of at least thirty (30) days before any enforcement action is
brought by any party.
(c) Binding Arbitration As Enforcement Remedy. Any default or any other
dispute arising under this Agreement which cannot be resolved or cured by meet and confer
sessions between the parties shall be subject to binding arbitration under the auspices of
J.A.M.S./Endispute.
(d) Anylicable Law. The laws of the State of California shall govern the
interpretation and enforcement of this Agreement.
Section 11. Participant Contribution Toward City/Agency Community Center.
In consideration of Agency's commitments and covenants to Participant under the
terms of this Agreement, Participant hereby agrees to make a one time cash financial
contribution toward the City/Agency Community Center project. More particularly,
City/Agency has inadequate funding for furnishings (e.g., carpeting, chairs, tables, etc.) to
be installed and placed within the Conference Room of the Community Center. Accordingly,
Participant agrees to provide said furnishings up to an amount equal to Fifteen Thousand
Dollars ($15,000.00).
Participant agrees to pay a one time lump sum for actual furnishing costs, as certified
by the City's Finance Officer, within thirty (30) days of delivery of the furnishings to the
City. The delivery date is anticipated to be June 1, 1998.
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In recognition of Participant's contributions under this Section 12, a plaque (or
equivalent) denoting the contribution of Participant shall be placed in a prominent location
at the Conference Room of the Community Center.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first written above.
ATTEST:
Cheryl Johnson, Agency Secretary
APPROVED AS TO FORM:
John R. Shaw, Agency Counsel
SAN JUAN CAPISTRANO COMMUNITY
REDEVELOPMENT AGENCY
0
Wyatt Hart, Chairman
FLUIDMASTER, INC.
i
Rdbert Anderson S86
Senior Vice President
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_ I'E
Exhibit 1