15-0602_SOUTH COAST INVESTOR_F15_Agenda ReportTO:
FROM:
DATE:
SUBJECT:
City of San Juan Capistrano
Agenda Report
Honorable Mayor and Members of the City Council
6/2/2015
F15
Charles View, Development Services Direct~ 'tF \\--
Prepared by: Sergio Klotz, Assistant Development Services Directo &J
June 2, 2015
Consideration of Assignment and Assumption of Development Agreement
for the Plaza Banderas Hotel and Mixed Use Project (South Coast
Investor II, LLC, a Subs idiary of Rivendell Land Company, Inc.)
RECOMMENDATION :
By motion, adopt a Resolution approving the assignment and assumption of the
Stroscher G3, LLC interest in the Development Agreement, for the Plaza Banderas
Hotel and Mixed Use Project to South Coast Investor II , LLC a subsidiary of Rivendell
Land Company, Inc.
EXECUTIVE SUMMARY:
On July 5, 2011, the City Council adopted Ordinance No. 988 approving a Development
Agreement between Stroscher G3 , LLC and the City , allowing development of a 124-
room hotel , office/retail building and restaurant on property consisting of 3 .18 acres of
land located at the northeast corner of Ortega Highway and El Camino Real.
Stroscher G3, LLC has sold ownership of the property and development of the project
and is seeking the City's consent to assign the Development Agreement to the new
owner, South Coast Investor II , LLC a subsidiary of Rivendell Land Company, Inc.
Section 2 .5 of the Development Agreement provides that Stroscher G3, LLC may
assign any of its rights under the Development Agreement , subject to written consent of
the City, which consent shall not be unreasonably withheld .
DISCUSSION/ANALYSIS:
Assignment of the existing Development Agreement (Attachment 1) may be granted
provided that:
a) The proposed assignee is an entity legally formed and qualified to do business in
California;
City Council Agenda Report
June 2, 2015
Page 2 of 3
b) Evidence is provided that the proposed assignee has the ability to comply with
the Development Agreement;
c) Owner and assignee execute an Assignment and Assumption Agreement to
which the assignee expressly assumes all of the Owner's obligations under the
Agreement; and
d) The City shall bear no expenses in connection with such assignment.
Staff has analyzed the applicant's request for assignment and finds the following:
a) The Secretary of State's website identifies that Rivendell Land Company, Inc. is a
corporation in good standing with the State and an entity legally formed and
qualified to do business in California;
b) Documentation has been provided demonstrating that Rivendell Land Company,
.Inc. and its subsidiary South Coast Investors II, Inc. has the ability to comply with
the Development Agreement. The applicant has provided documentation
outlining development projects successfully executed (Attachment 2);
c) The applicant has provided a copy of the executed Assignment and Assumption
Agreement transferring the rights, title and interest, as well as to keep, perform
and be bound by all of the terms, covenants and conditions under the Agreement
(Attachment 3). The City Attorney has reviewed the Assignment and Assumption
of Development Agreement document and confirmed compliance with the
Development Agreement; and
d) The cost for processing the assignment will be charged to the initial deposit paid
by the applicant.
FISCAL IMPACT:
The cost for processing the assignment will be charged to the initial deposit paid by the
applicant.
ENVIRONMENTAL IMPACT:
The request to assign a development agreement is exempt from review under the
California Environmental Quality Act (CEQA).
PRIOR CITY COUNCIL REVIEW:
• On July 5, 2011, the City Council approved the Development Agreement.
City Counci\ Agenda Report
June 2, 2015
Page 3 of 3
COMMISSION/COMMITTEE/BOARD REVIEW AND RECOMMENDATIONS:
• On December 14, 2010 the Planning Commission forwarded the Development
Agreement to the City Council with comments.
NOTIFICATION:
Consideration of a Resolution to assign a development agreement does not require
public notification.
ATTACHMENT(S):
Attachment 1 --:-Section 2.5, Transfers and Assignments of Development Agreement
Attachment 2 -Rivendell Land Company Development Portfolio
Attachment 3 -Privately Executed Assignment and Assumption of Development
Agreement Between Seller and Buyer
Attachment 4 -Draft Resolution
2.5 Transfers and Assignments.
2.5.1 STROSCHER ("Owner'') shall not assign all or any part of this Agreement
without the prior written approval of the CITY. Such written approval by the CITY shall not be
unreasonably withheld, provided that: (a) if Owner's proposed assignee is an entity, such entity shall
be legally formed and qualified to conduct business in the State of California; (b) Owner shall have
delivered evidence to CITY that Owner's proposed assignee has the ability to comply with the
Agreement; (c) Owner and its/their assignee execute an assignment and assumption agreement
pursuant to which the assignee expressly assumes all of Owner's obligations under the Agreement;
and (d) CITY shall bear no expenses in connection with such assignment. Notwithstanding any other
provision of this Agreement, Owner need not obtain the prior written approval of CITY for the
assignment of this Agreement to a limited liability company, limited partnership or corporation
wholly-owned by, or under Owner's control.
ATTACHMENT 1
RivendeH Land Company, Inc.
31866 Camino Capistrano, San Juan Capistrano, CA 92675 • Ph: (949} 496·1316 • Fax (949} 4915-1274 • info@RivendalllandCompanycom
May 26,2015
Honorable Mayor and Members of the City Council
City of San Juan Capistrano
32400 Paseo Adelanto
San Juan Capistrano, CA 92675
Re: Consent to the Assignment of the Plaza Band eras Development Agreement
Dear Mayor Reeve and Members of the Council:
We respectfully request that you consent to the assignment of the Development Agreement for the Plaza
Banderas project from Stroscher G3, LLC to South Coast Investors tl, Inc. which Is a wholly owned subsidiary of
Rlvendell Land Company. Rivendelt land Company is a family owned real estate Investment and development
company with over 35 years of significant Southern California real estate and development experience. The
Griffith famfly have been residents in San Juan Capistrano for 30 years.
Pursuant to section 2.5.1(b) of the Development Agreement, we have been asked by City staff to submit evidence
that the proposed assignee has the ability to comply with the Development Agreement.
We provide the following information to you as evidence of not only our ability, but also our commitment to develop
the hotel site in a manner that will not only add value to the entire Historic Town Center but also be an Important
asset bringing benefits to all of San Juan Capistrano residents for the future. Rivendell Land Company, Inc. is
recognized as one of the premier master developers of planned communities, office and industrial centers in
southern California. Our award winning developments are noted for their innovative design, attention to de tall and
quality of construction. Rivendell has developed properties valued in excess of $400 million. We are ready, willing
and able to execute this project in compliance with the conditions of approval and the provisions of the
development agreement.
More specifically:
1. We purposely purchased this property to develop it as a Hotel Site under the approvals previously given
by the City of San Juan Capistrano and under development assurances granted in the Development
Agreement. In addition to the cash that we committed in the purchase, we immediately committed an
additional $672,000 in cash for the construction of a water line within the Ortega Highway interchange
project to ensure that the conditions of the project relating to water service standards were satisfied.
2. Since acquiring the site we have re-engaged and contractually retained many ofthe prior focal
professional design consultants to restart t~e development process. A list of the professional
development team is attached.
ATTACHMENT 2
3. We have actively engaged with several potential internationally recognized and industry leading hotel
operators to evaluate their interest in operating an entry level luxury hotel (Four Star/Full Service) tn the
Historic Town Center of San Juan Capistrano. The results have been ve,ry encouraging and we are
confident that a selection will be made in the very near future.
4. We have been in communication with Historic Town Association, the Chamber of Commerce, the Mission
staff and Board, as well as many department heads within the City of San Juan Capistrano.
We are committed to developing Mission Inn San Juan Capistrano In a manner that is consistent with the goals of
the General Plan, the Historic Town Center Master Plan, pre-existing development agreement, and.economic
development/ fiscal goals of the City of San Juan Capistrano. Mission Inn San Juan Capistrano wlll complement the
San Juan Mission both architecturally and operationally. The combination of the Mission and the Mission Inn will
become a legacy site at the entrance to our Historic Downtown. An enduring statement of community's values
far into the future.
The Mission Inn project represents a continuation of our family's ongoing commitment to invest in the historic
fabric of Historic San Juan Capistrano. We recently purchased the Egan House {1886) and are In the final stages of
lease negotiations to bring this important Heritage site back to life. Exterior restoration work has been on-going
and work will commence soon on tenant improvements. We have been fortunate to benefit from the efforts of
lise Byrnes in preparing an application to have the Egan House federally registered as a Historic Site,
We are proud of our long term involvement in downtown San Juan. Our work and positive investment in town has
shown on other properties, such as The Esslinger Building (1939 1) which we restored and proudly received
recognition from the City leaders in May 2.004 as recipients of the Mayor's Community Pride Award. We sat on
the steering committee for the HTC Master Plan with other Important stake holders, and we are also founding
members of the Historic Town Association.
Jn addition to the hotel project, we are very excited to start another significant project In downtown San Juan this
summer. In June we will commence construction on a large exterior renovation proJect of the Capistrano Clock
Tower Buildlng,just east of the Vans shopping center. This project will significantly improve the aesthetic of the
southern gateway into downtown.
Attached is a list of other properties which we own and manage in the downtown area of San Juan.
We look forward to working with the City Council and community leaders in bringing forward a quality project
that reflects the values and commitment we have demonstrated In our other ventures in San Juan Capistrano.
Sincerely, M.
William J. Griffith
President
Rlvendellland Company Owned and Managed San Juan Capistrano Properties
We have 12 buildings totaling 112,000 square feet, with 60 separate business tenants which employee
approximately 450 people locally.
Name
Esslinger Building
Egan House
Serra Plaza
Bank of America
Los Rios Plaza
Capistrano Clock Tower
United Health Care (Ross Medical)
Solana Rincon
Capistrano Village Center
Address
31866 Camino Capistrano
31892 Camino Capistrano
31910 and 31920 Del Obispo
31902 Del Obispo
31897 and 31899 Del Obispo
32332 Camino Capistrano
32312 Camino Capistrano
32302 Camino Capistrano
32272 and 32282 Camino Capistrano
Mission Inn San Juan Capistrano Design Team
Consultant Trade
Development Manager
Architect
Landscape Architect
Civil Engineer
Geotechnical
Water
Dry Utility
FEMA
Parking
Company Name
Friess Property Company
Roy Nunn Architecture
Land Concern
Hunsaker and Associates
GMU
Dexter Wilson Engineering
Butsko Utility Engineering
Tory Walker Engineering
International Parking Design
RECORDING REQUESTED BY
AND WHEN RECORDED, MAIL TO:
Rivendell Land Company, Inc.
31866 Camino Capistrano
Swt Juan Capistrano, CA 92675
Attn: WilHam J. Griffith
(Space Above For Recorder's Use)
ASSIGNMENT AND ASSUMPTION OF DEVELOPMENT AGREEMENT
This ASSIGNMENT AND ASSUMPTION OF DEVELOPMENT AGREEMENT (this
"Assignmenf') is made wtd is effective as of the date of recordation hereof {the "Effedive Date"),
by and between STROSCHER G3, LLC, a California limited 1iability company (''Assignor'') and
RIVENDELL LAND COMPANY, INC., a California corporation ("'•Assignee').
RECITAL
The City of San Juan Capistrano, a municipal corporation {the .. City'') and Assignor entered into
that certain Development Agreement (Plaza Banderas Hotel and Mixed Use Project) dated as of
July 5, 2011 and recorded in the Official Records of Orange County, California on August 4, 2011
as Instrument No. 2011000382.839(the "Development Agreement). Capitalized tenns used and
not defined herein sha11 have the meanings set forth in the Development Agreement.
NOW, THEREFORE, for good and va1uable consideration, the receipt and adequacy of
which are hereby acknowledged, the parties hereby agree as follows:
1. Assignment. Assignor does hereby transfer and assign to Assignee all of its right,
title and interest in and to, and obligations under, the Development Agreement (and all
documents and instruments relating to or implementing the Development Agreement) with
respect to the Property.
2. Assurnotion. Assignee hereby accepts said assignment and agrees to keep,
perform and be bound by all the terms, covenants and conditions contained in the Development
Agreement (and al1 documents and instruments relating to or implementing the Development
Agreement) relating to the Property, on the part of the Owner or Developer therein, which accrue
and are to be performed subsequent to the date hereof, as though Assignee were the original
Owner or Developer under the Development Agreement.
3. Condition Precedent. This Assignment is conditioned on and shall be effective
only upon recordation of a deed conveying fee title to the Property to Assignee. In the event
such condition is not satisfied within ninety (90) days from the date hereof, this Assignment shall
terminate and be of no further force or effect
ATTACHMENT 3
IN WITNESS WHEREOF, the parties have caused this Assignment and Assumption of
Development Agreement to be duly executed as of the date first above written.
ASSIGNOR:
STROSCHER G3, LLC,
a California limited liability company
~~ By;l~~-~/um~
Name: G ~rC H eAl s a oscwlff.l= THOM?o,J
Title: f'&€SiD6A l T
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 )
CountyofOF&Rge ~~ )
On(Y\o.rc:bl=a 3 0L5 .beforeme,~A ·~~ n~ ~~.rltc_
c r . IIIIIIC: ll1d title of the ol1ker)1 -....=o->, t" ..._,
Notary Public, personally appeared w e::tc:h eo ste t:>>c:bf! C ::J-b~o N ,
who proved to me on the basis of satisfactory evidence to be the person(s) whose name(s) isl&~~e
subscribed to the within instrument and acknowledged to me that he/she/~ 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 PENAL 1Y OF PERJURY under the laws of the State of California that
the foregoing paragraph is true and correct.
WITNESS my hand and official seal.
SigMtu~Q ~
265010160S2-0031
1193826
(Seal)
RESOLUTION 15-06-02-XX
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF SAN JUAN
CAPISTRANO APPROVING ASSIGNMENT OF DEVELOPMENT
AGREEMENT FOR THE DEVELOPMENT AGREEMENT BY AND
BETWEEN THE CITY OF SAN JUAN CAPISTRANO AND SOUTH COAST
INVESTORS II, LLC
WHEREAS, Daniel Friess, on behalf of South Coast Investors II, LLC a subsidiary of
Rivendell Land Company, Inc., has requested approval of Assignment of the "Plaza
Banderas and Mixed Use Project Development Agreement" for the "Development
Agreement By and Between the City of San Juan Capistrano and Stroscher G3, LLC,
dated July 5, 2011 (the "Development Agreement"); and,
WHEREAS, if approved, the proposed "Assignment of the DevelopmentAgreement"
("proposed DA Assignment") would assign the Development Agreement to South Coast
Investors II, LLC; and,
WHEREAS, Section 2.5 of the DevelopmentAgreement provides that Stroscher G3,
LLC may assign any of its rights under the Development Agreement, subject to written
consent of the City, which consent shall not be unreasonably withheld; and,
WHEREAS, the California Secretary of State's website identifies that South Coast
Investors II, LLC is a California limited liability company in good standing with the State and
an entity legally formed and qualified to do business in California; and,
WHEREAS, documentation has been provided to the City demonstrating that South
Coast Investors II, LLC has the ability to comply with the Development Agreement. The
applicant has provided documentation outlining developme-nt projects successfully
executed; and,
WHEREAS, the applicant has provided a copy of the executed Assignment and
Assumption Agreement transferring the rights, title and interest to South Coast Investors II,
LLC, as well as obligating South Coast Investors II, LLC to keep, perform and be bound by
all of the terms, covenants and conditions under the Agreement (Attachment 3); and
WHEREAS, the cost for processing the entitlement will be charged to and paid by
the applicant; and,
WHEREAS, the project has been reviewed in accordance with the California
Environmental Quality Act (CEQA) by the City's Environmental Administrator who has
determined that the project is exempt from further review pursuant to Section 15061 (b )(3)
of the CEQA Guidelines because it can be seen with certainty that there is no possibility
that this assignment may have a significant effect on the environment; and,
1
ATTACHMENT 4
WHEREAS, the City Council conducted a duly-noticed public meeting on June 2,
2015 to consider the proposed "Assignment of the Development Agreement."
NOW THEREFORE, the City Council does hereby approve the"Assignment of the
Development Agreement."
PASSED, APPROVED AND ADOPTED this 2nd day of June 2015.
DEREK REEVE, MAYOR
ATTEST:
MARIA MORRIS, CITY CLERK
2