HomeMy WebLinkAbout2018/04/24 5 pm Item 7B - Revised Revenue Sharing Agmt Item 713 - Revised Revenue Sharing Agreement
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REVENUE SHARING AGREEMENT style Definition:Heading t:Tab stops:Not at
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By and Between °
CITY OF CHULA VISTA AND SAN DIEGO UNIFIED PORT DISTRICT
(Chula Vista Bayfront Resort Hotel and Convention Center and Related Public Infrastructure)
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This Revenue Sharing Agreement ("Agreement'); dated April 24, 2018; is entered into byr i
and between the City of Chula Vista, a municipal corporation ("City") and the San Diego Unified ;
Port District,a public corporation("District"). The City and District may individually referred to i% f
herein as,a'*Party",and collectively as,the"Parties". ,
RECITALS
WHEREAS, the City and District are parties to that certain Amended and Restated Chula
Vista Bayfront Master Plan Financing Agreement dated June 20,2017,by and between the City and
the District and filed in the Office of the District Clerk as Document No. 67068 (the "Financing
Agreement");and
WHEREAS, all initially capitalized terms used herein without definition have the meanings
set forth in the Financing Agreement;and
WHEREAS the Parties are entering into a Disposition and Development Agreement (the F '
"DDA")of even date herewith with RIDA Chula Vista, LLC, a Delaware limited liability company '
(`'RIDA")which contemplates the development of a resort hotel and convention center(the"RHCC
Project'')and related public infrastructure improvements;and {
WHEREAS, it is expected that as part of the closing of the obligations contemplated under
the DDA ("Close of Escrow"), the City and the District, through a JEPA, will issue the Revenue ! '
Bonds to support the financing of the Convention Center and the Phase l A;and '
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WHEREAS, it is expected that the City and the District will be contributing the Financing
Revenues pursuant to a Plan of Finance to support the Revenue Bonds:and '`'
WHEREAS, it is expected that the RHCC Project will generate certain revenues from the i{ £
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operation of the RHCC Project that the Developer will share with the Parties:and f y
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WHEREAS, this Agreement and the Financing Agreement assume the participation of
County of San Diego in an Enhanced Infrastructure Financing District(LEIFD):]to fund a portion «,
of the Revenue Bonds supporting Phase IA.
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NOW THEREFORE, in consideration of One Dollar and the mutual promises set forth
herein, and other valuable consideration, the receipt and sufficiency of which is hereby
acknowledged,the Parties agree as follows:
1. Recitals. The Recitals are incorporated herein by reference.
2. Term. The term of the Agreement shall commence on the later to occur of. (a)the y` '
date first set forth above or (b)the date the DDA is effective. This Agreement shall terminate
concurrent with the DDA if the DDA is terminated prior to Close of Escrow. If Close of Escrow
occurs,this Agreement shall terminate on the later to occur of: (i)f•" re:.,,>,..rsefn .We the.PRF6e�
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of any and all PMOEMtS ffevided under-Seetien 3.3, paFWaph--; 1 4 wind-6- belew; Of:(iii)thifty
(38)yeafs:the following dates,which shall be referred to herein as the"COE Termination Date":(i)
the expiration of the term of the Revenue Bonds, regardless of whether the Revenue Bonds are paid ;
prior to the maturity date: or(ii)thirty-eight(38)years from the date the Revenue Bonds are issued.
Notwithstanding the foregoing,Section 3.4 shall remain in effect in accordance with its terms.
3. Agreements. The Parties hereby agree as follows:
3.1 Revenues and "Revenues"means,collectively, moneys in an amount equivalent to each of` _; Formatted:Indent:Left: 0',Hanging:
Existing the following sources of revenue actually received by the City or the District Formatted Table
Revenues on a yearly basis:
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A. District
(i)al l Ground Lease Revenues derived from the Other Ground Leases,a �✓ '
replacement RV Park on parcel S1; (`Replacement RV Park"), and the x f
RHCC Ground Lease, less a credit equal to: (1) the actual amount of the
existing RV Park lease buyout payment to be paid solely by the District to '
Chula Vista Marina/RV Park, Ltd. (the existing RV Park lessee), in an '
amount not to exceed $4,929,614; less (2) any reduction in this payment `
negotiated by District in consideration for District's release of Chula Vista
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Marina/RV Park, Ltd. from its obligation to complete all or a portion of the
demolition work at the existing RV Park site that would otherwise byte
required under the RV Park lease (District Clerk Document No. 14243
amended)(the"Net RV Park Buyout Credit");
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(ii) the annual payments to be made by the District (the "District ,
Support Payments") for repayment of the Revenue Bonds according to the
schedule set forth in Section 4 of the Conceptual Outline of Joint Exercise of
Powers Authority Plan of Finance attached to the DDA as Attachment No.
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84(the"Conceptual Plan of Finance"). 1 t f'
B. City
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(i)the TOT attributable to the RHCC Project and the existing RV Park y `%
in the CVBMP Project Area and the r-eplaee ReriReplacement RV Park to be
constructed: ~'
(u)the Sales Tax; ;E
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(iii) incremental property tax (including EIFD Revenues) generated by ` F
the RHCC Project;
(iv)PMSA Revenues;and
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(v)new Special Tax Revenues levied in a future Community Facilities
District,equal to a 5%room revenue tax on the RHCC Project.
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As used herein,"Existing Revenues"means,collectively,moneys in an '^
amount equivalent to each of the following sources of revenue actually
received by the City or the District y
(i) all Ground Lease Revenues derived from the Other Ground Leases
and athe Replacement RV Park lam, less a credit equal to the Net
RV Park Buyout Credit; /
(ii)the TOT attributable to the existing RV Park in the CVBMP Project /'
Area and the ientReplacement RV Park to be constructed;and
(iii)the PMSA Revenues. 'h
3.2 Use of Existing WithiH., _°.,..,.n the time ffierto the GIOSo Of n..,...,..,,(ROt., a Thirty ' / ✓/ /,
Revenues at J301 days} before the Close of Escrow ("Contribution Date"), each of the 3 ,,
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Close of Escrow Parties shall contribute to the Close of Escrow an amount of money equal to
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the Existing Revenues generated and actually received by each Party from
and after July 1, 20187 to the Contribution Date. Such Existing Revenues
shall be applied at the Close of Escrow to pay financing and/or construction
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contingencies of the District,City,and the JEPA.
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3.3 Use of Revenues After the Close of Escrow, the Parties will contribute the Revenues to the f
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Post Close of JEPA until the COE Termination Date,pursuant to agreements to be entered
Escrow into between the Parties. For each bond year of the Revenue Bonds; after
the Revenues have been applied to the payment of debt service that is due /•y !!!
and payable on the Revenue Bonds and any required debt service reserve of �`
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the Revenue Bonds, any Revenues remaining shall be applied in the /
following order of priority: 3
1. To reimburse the District for the cumulative amount of District / `#
Support Payments actually contributed by the District and not previously
reimbursed to the District;then
2. To reimburse the City for 73.6% of the cumulative actual direct iY '
costs incurred by the City to provide fire service within the CVBMP Project "f
Area which is the proportionate share of such costs attributable to the
RHCC Project and not previously reimbursed to the City(provided that such
73.6% reflects amounts for which the City is entitled to reimbursement in < f zl
addition to any payments the City receives under the PMSA for fire
services,as the PMSA may be amended by the Parties;reimbursement to the
City under this paragraph shall not be reduced by the amount of PMSA
Revenues received by the City).-then
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3. To reimburse the City and the District on a proportionate, pro-rata -
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basis, for each Party's contribution of Revenues ,.4, ffaed 1...the P4466
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DQE.ee4 incl...ing (14her !_...,und i .,..^e^ and ., Repl........ent RV D..,d. .... � ! i!,/'✓ ✓ .$
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Par-eel C�i--ic$,�i--tl're—Net�17Park BuyoutCredit, TOTattributable ., 4L.o t ,
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existing RV 12a—rl-in the.CVBN4P Pr-pjeet Area and the FePlaeement RV P=L
to be ,.enstnaetea and PN49 n Revenues ("Existing ReN,e....,,^"1.the Existing i
Revenues as of Close of Escrow;then
4. To reimburse the City and the District on a proportionate, pro-rata I
basis, for each Party's contribution of Existing Revenues after the Close of
Escrow,continuing to the COE Termination Date.
5. To fund an additional reserve fund or reserve fund insurance policy ,
in the amount of one year's debt service for the Revenue Bonds;and finally
6. Any Revenues remaining after the payments described in Items (1)
through (4) above will be equally distributed between the City and theZ., {
District. "'% %` W €
No interest will accrue with respect to unreimbursed Revenues contributed
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by the City or the District. '
3.4 Additional Rent Pursuant to Section 5.5 of the form of RHCC Ground Lease attached to the '
DDA as Attachment No. 9, the Developer is required to pay to the District
20% of the amount by which the Net Operating Income above anfor such E
Lease Year exceeds eleven percent (11%) Retum-enof the Actual Capital
Investment(the"Additional Rent")for Lease Year 1 through Lease Year 37
(as such terms are defined in the RHCC Ground Lease) (the "NOI Split
Period"). The District will pay one half of all Additional Rent amounts y/
actually received by the District from the Developer during the NOI Split %fl!
Period to the City within thirty (30)days following the District's receipt of ,
such Additional Rent amounts. This obligation shall continue for so long as ,f
the District receives the Additional Rent set forth in Section 5.5 of the i ✓
Ground Lease, and shall survive the earlier termination of other provisions
of this Agreement.
3.5 Operations& The City and District agree to generally split the operation and maintenance
Maintenance costs ("O&M Costs") for.the RHCC Public Improvements to be paid by
Costs each Party. The District will be responsible for the O&M Costs of the parks '
and all related public infrastructure located within the parks. The City will
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be responsible for the rnai ;eeO&M Costs of the streets and sanitary
sewers. The City and District will split the O&M costsCosts payable
pursuant to that certain Chula Vista Bayfront Master Plan Natural Resources `
Management Plan by and between ^^'fia and City an4e'filed June6,2016
€ded in the Office of the District Clerk as Document No. 65065 (the
"NRMP") that are not the responsibility of a third party. The City will be
responsible for funding the Transit Plan and operational costs of shuttle !' F
services as set forth in Section 7.2 of the Financing Agreement.
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3.6 EIFD Formation District agrees to use R&4)e_4good faith efforts to secure the participation of
the County of San Diego in the planned EIFD.
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4. Binding Agreement. The Parties agree that this Agreement is a binding agreement / )j
between the Parties. Notwithstanding the binding nature of this Agreement,the Parties contemplate
that future implementing agreements may be needed to implement or clarify the terms of this
Agreement. To that end, the Parties agree to meet anp confer in good faith in response to a request
by either party regarding the implementation or clarification of this Agreement. `
5. Event of Default. An "Event of Default" will occur under this Agreement when:
(a)there is a material breach of any material condition, covenant or promise set forth herein; ,
(b)written notice thereof has been given to the party in breach-, and (c)such breach has not been r {
cured within ten(10)business days after such notice was given to the party in breach. In the event
the breach cannot reasonably be cured within such ten (10) business day period, the party in breach
must commence cure of the breach within such ten(10)business day period and thereafter diligently
proceed to cure such breach. A waiver by either party of any such breach shall not be construed as a
waiver of any succeeding breach of the same or other condition,covenant or promise. r,r
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6. Remedies. The occurrence of an Event of Default shall give the non-defaulting party
er., t.. Sueh remedies May ludo
the right to proceed with - •� �^^
W astion fer damages,.,...,beef O.....,eeee.ing f spes:Ar,per f and an action or..xeeee.1:,,..
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Fight,Agreement is intended te be exelusive ef any other
pewe.. feme.1. ..hall be e, ,1 ' ,e a in adds power,
right, ..r, e�...nro ,.«. .,t,. .... .r:e.. to .....,.... eth ef:right, ..e..,e.. or..e.,.er1..
e:.,e., to the Gity er Dist':et by the te..ms of any sueh iHst..afne..t or by any statute or ethe..wke
against any ethef pefse*
an action or proceedine for specific performance.
7. Notices. The notice addresses shall be the same as those set forth in the Financing '' €
Agreement and shall be sent by certified U.S. Mail (return receipt requested) and shall be deemed
delivered three days after deposit in the U.S.Mail.
8. Entire Agreement. This Agreement constitutes the entire understanding and
agreement of the Parties with regard to the collection and priority of the Revenue sharing between '
the City and the District, integrates all of the terms and conditions mentioned herein or incidental '
hereto, and supersedes all negotiations or previous agreements between the Parties or their
predecessors in interest with respect to the priority of the collection and priority of Revenue sharing '
between the City and the District, but shall not supersede, modify or amend the Financing
Agreement. „
9. Drafting Presumption; Review Standard. The Parties acknowledge that this
Agreement has been agreed to by both the Parties, that both City and District have consulted with z
attorneys with respect to the terms of this Agreement and that no presumption shall be created ,
against the drafting Party. Any deletion of language from this Agreement prior to its execution by '
City and District shall not be construed to raise any presumption, canon of construction or
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implication, including, without limitation, any implication that the Parties intended thereby to state
the converse of the deleted language. > €
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10. Governing Law. This Agreement and all of the rights and obligations of the Parties f
hereto and all of the terms and conditions hereof shall be construed, interpreted and applied in `
accordance with and governed by and enforced under the laws of the State of California. ! / `` /
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[Signatures appear on following page] E
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IN WITNESS WHEREOF,the Parties hereto have executed this Agreement as of the day and
the year first set forth above.
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`CITY:- Formatted Font Bold
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CITY OF CHULA VISTA
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Gary HalbertiCity ManagerFormatted:Font color auto
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Kerry K.BlgelowCity_Clerk Formatted.Font color.Auto f
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APPROVED AS TO FORM:
Glen R.Googins,CityAttorney____________________________________________ = Formatted:Font color auto
DISTRICT_ Formatted Font.Bold
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APPROVED AS TO FORM AND LEGALITY: SAN DIEGO UNIFIED PORT DISTRICT,
GENERAL COUNSEL a public corporation ,!y
By: By: F
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Assistant/Deputy Name: ` " '�
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