HomeMy WebLinkAbout2008/04/22 Item 2
CITY COUNCIL &
REDEVELOPMENT AGENCY
AGENDA STATEMENT
~\~ CllYOF
i~CHULA VISTA
APRIL 22, 2008
Item 2
SUBMITTED BY:
REVIEWED BY:
JOINT RESOLUTION OF THE CITY COUNCIL AND THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA
APPROVING AN AMENDMENT TO THE OWNER
PARTICIPATION AGREEMENT WITH SUNROAD CV AUTO,
INC.; AND APPROPRIATING FUNDS ACCORDINGLY
CITY ATTORNEY Qm
CITY ATTORNEY 4m.
ITEM TITLE:
4/5THS VOTE: YES 0 NO D
SUMMARY
In February 2005, the Redevelopment Agency entered into an Owner Participation Agreement with
Sunroad CV Auto, Inc. (the "OPA"). The purpose of the OPA was to guide the operation and
maintenance of a "first quality, first class" Toyota dealership in the City. Adoption ofthe resolution
will approve an amendment to the OP A to make it compatible with current law (the "Amendment"),
and appropriate the necessary funds to comply with the OP A.
,
ENVIRONMENTAL REVIEW
The Environmental Review Coordinator has reviewed the proposed activity for compliance with
the California Environmental Quality Act ("CEQA") and has determined that the activity is not a
"Project" as defined under Section 15378 (b)(4) of the State CEQA Guidelines; therefore,
pursuant to Section 15060(c)(3) of the State CEQA Guidelines the activity is not subject to
CEQA. Thus, no environmental review is necessary.
RECOMMENDATION
That the City Council and the Redevelopment Agency adopt the resolution.
BOARDS/COMMISSION RECOMMENDATION
Not Applicable.
DISCUSSION
THEOPA
On February 15, 2005, the Redevelopment Agency was asked to consider entering into an
OPA with Sunroad CV Auto, Inc. ("Sunroad"). The Agenda Statement presented to the Agency
at that time provided the following background information regarding the OPA:
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APRIL 22, 2008, Item 2-
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"The OP A will guide the operation and maintenance of a proposed
Toyota auto dealership consisting of a 52,923-square-foot building
(showrooms, administrative offices, service area, etc.), a service
reception area, lube center, and carwash facility.
Chula Vista Toyota will be the first of several new dealerships that
will be built and operated pursuant to the City's Auto Park East
and Auto Park North Specific Plans. ...
The Sunroad OPA will ensure a 'first quality, first class' Toyota
dealership through the imposition and purchase by the Agency of
various restrictive and limiting operating covenants on the property
and dealership, including specified development obligations,
maintenance requirements, non-discrimination covenants, and
restrictive operating covenants. In exchange for the developer's
acceptance and compliance of those requirements and restrictions on
the land, and the development and maintenance of the property as a
"first quality, first class" auto dealership, the Agency will agree
under the OP A to make quarterly payments to the developer
calculated as a percentage of the City's share of net sales tax
revenues generated by the project. ..."
After considering the matter, the Redevelopment Agency voted 4-0 to approve the OPA. (For
reference purposes, copies of the February IS, 2005 Agenda Statement, and accompanying
resolution, are provided as Attachment I to this Agenda Statement.)
THE AMENDMENT
Since entering into the OPA, the Agency has determined that certain amendments are necessary
in order to make the OP A compatible with existing law. The resolution currently being presented to
the City Council and Redevelopment Agency is intended to accomplish those amendments.
Specifically, the resolution approves the Amendment which would substitute the City, in place of
the Agency, as a party to the OPA. The Amendment does not purport to alter any of the substantive
terms of the OPA. The terms and principles of the original OPA would remain the same as those
that were approved by the Agency in 2005.
The Community Development staff has determined that Sunroad's development and
maintenance of the Toyota dealership, pursuant to the OP A has resulted, or will likely result, in
the following benefits to the City and its residents:
1. Public improvements, at Sunroad's expense, which will become City property,
including curb, gutter, sidewalk, driveway, ramp and sewer improvements, with
an estimated value in excess of $200,000;
2. Increased business development in the City, including additional auto dealerships;
3. Creation of additional job opportunities for City residents;
4. Additional tax revenue to the City, which will assist the City in providing public
services to its residents; and
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APRIL 22, 2008, Item 2
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5. Development, planning and operation of the Toyota dealership in accordance with
the City's adopted Auto Park East Specific Plan and with the operating and
restrictive covenants contained in the OP A.
THE ApPROPRIATION
As mentioned above, the OP A provides for certain payments to be made to Sunroad. The
amount of the payments is proportionate to the amount of sales tax revenues generated by the
Sunroad project. The Agency agreed to the payments in the original OP A, in exchange for the
various development, maintenance and operating covenants agreed to by Sunroad in the OP A.
Those covenants remain in place and would not be altered by the Amendment. To date, the amount
due under the OPA is $548,334. (This amount is based on sales tax revenues generated by the
Toyota dealership through the third quarter of 2007; this is the most current information available to
the City.) Adoption of the resolution would approve the Amendment and appropriate $548,334 to
be paid to Sunroad in accordance with the OPA.
DECISION MAKER CONFLICT
Staff has reviewed the property holdings of the City Council and Redevelopment Agency and
has found no property holdings within 500 feet of the boundaries of the property that is the
subject of this action.
FISCAL IMPACT
The appropriation will impact General Fund reserves by $548,334 in fiscal year 2007-08. An
updated General Fund reserve projection will be provided in the Third Quarter Financial Report.
The General Fund will pay Sunroad an amount not to exceed $1,435,000 over seven years. The
amount of the payment is based upon a percentage of the sales tax revenue generated by the
Toyota dealership. Quarterly disbursements will be made to the developer in accordance with the
pre-determined schedule of disbursements in Exhibit C of the Owner Participation Agreement.
ATTACHMENTS
Attachment I: Agenda Statement, dated February 15, 2005, and accompanymg resolution,
approving the original Sunroad OPA.
Attachment 2: "First Amendment to Owner Participation Agreement" (including Attachment 1
to the First Amendment, which reflects the changes to the OPA being effectuated
by the First Amendment).
Prepared by: Jill Maland. Deputy City Attorney. Attorney's Office
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PAGE 1, ITEM NO.: 2
MEETING DATE: 02/15/05
REDEVELOPMENT AGENCY AGENDA STATEMENT
ITEM TITLE: RESOLUTION OF THE REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA APPROVING AN OWNER PARTICIPATION
AGREEMENT WITH SUNROAD CV AUTO, INC. FOR THE OPERATION
AND MAINTENANCE OF A CHULA VISTA TOYO DEALERSHIP
SUBMITTED BY: COMMUNITY DEVELOPMENT DIRECTOR lrt L. 1M
REVIEWED BY; EXECUTIVE DIRECTOR
4/5THS YOTE: YES 0 NO
D
BACKGROUND
The Owner Participation Agreement ("OPA") with Sunroad CV Auto, Inc. ("Sunrood") presented
this evening represents 0 significant milestone in the long-term efforts of the Chula Vista
Redevelopment Agency ("Agency") to innovatively and effectively plan for the City's expanding
auto park. The OPA will guide the operation and maintenance of a proposed Toyota auto
dealership consisting of a 52,923-square-foot building (showrooms, administrative offices,
service area, etc.), a service reception area, lube center, and carwash facility.
Chula Vista Toyota will be the first of several new dealerships that will be built and operated
pursuant to the City's Auto Park East and Auto Pork North Specific Plans. The Sunroad OPA,
together with the Master OPA for Auto Pork East (adopted by City Council on August 24, 2004), will
establish a foundation and set the stage for the comprehensive operation and maintenance of "first
quality, first closs" auto dealerships within the Chula Vista Auto Park.
RECOMMENDATION
Staff recommends that the Redevelopment Agency of the City of Chulo Vista adopt the attached
resolution approving the Owner Participation Agreement with Sunroad CV Auto, Inc. for the
operation and maintenance of a Chula Vista Toyota dealership.
BOARDS/COMMISSIONS RECOMMENDATION
Not applicable.
DISCUSSION
During the post several years, the Agency has praactively planned for the development and
expansion of the auto pork along the Main Street corridor east of the 1-805 Freeway between
Brandywine Avenue and Maxwell Rood. As port of those planning activities, Agency and City
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MEETING DATE: 02/15/05
staffs have worked closely with existing auto dealerships, prospective dealerships, and master
developers to coordinate the many moving parts that will facilitate the ongoing development and
expansion of the auto park in. Chula Vista.
With respect to the Sunroad property and the Toyota dealership, a number of prior Agency and
City Council approvals have preceded the current proposed OPA:
. On June 1, 2004, the City adopted a Mitigated Negative Declaration (15-02-010) for the
Auto Park East project and specific plan, including all future dealership-specific projects
(e.g. Toyota).
. On June 8, 2004, the City adopted Ordinance No. 2965 adopting 0 specific plan (PCM-
02-10) for the 29-acre Auto Pork East property. The Specific Plan establishes the City's
land use policies and entitlements that govern the 29-acre Auto Park East property and all
future auto dealerships within.
. On August 2, 2004, the City's Design Review Committee, pursuant to the Specific Plan,
reviewed and approved the developer's proposed design concepts for the Toyota
dealership with a condition that the height of the proposed tower element be reduced.
During the next few weeks, Agency staff helped facilitate discussions between Sunroad
and existing dealership owners regarding fair and consistent land use policies and design
guidelines among the existing and future dealerships. Consistent with those discussions,
the developer announced at the August 24, 2004 Agency meeting their agreement to
reduce their tower element from 100' to 80'. On August 24, 2004, the Agency
approved modified site plans that included the lower tower element.
. At the Agency's August 24, 2004 meeting, the Agency approved a Master Owner
Participation Agreement ("OPA") with Fred Borst, Borst Family Trust, Fask Land, Inc.,
establishing development standards and performance requirements for the 29 acres of
territory within the Auto Park East Specific Plan. The Master OPA sets forth a number of
developer obligations of both the existing master developer and future individual
developers and dealership owners, such as Sunroad and the Toyota auto dealership. The
Master OPA and the proposed Sunroad OPA will concurrently guide the development,
maintenance, and operation of the Sunroad property as a "first quality, first class" auto
dealership.
The Sunroad OPA will ensure a "first quality, first class" Toyota dealership through the imposition
and purchase by the Agency of various restrictive and limiting operating covenants on the
property and dealership, including specified development obligations, maintenance
requirements, non-discrimination covenants, and restrictive operating covenants. In exchange for
the developer's acceptance and compliance of those requirements and restrictions on the land,
and the development and maintenance of the property as 0 "first quality, first class" auto
dealership, the Agency will agree under the OPA to make quarterly payments to the developer
calculated as a percentage of the City's share of net sales tax revenues generated by the project.
The structure of the monetary disbursements and conditions of disbursement ore further
described below.
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MEnlNG DATE: 02/15/05
Disbursement Structure and Schedule
Quarterly disbursements will be mode by the Agency to the developer in accordance with a pre-
determined schedule of disbursements (Exhibit "C" of the OPAl. The schedule outlines the
percentage of the City's share of net sales tax revenues it will disburse to the developer during
each year of the first seven years of operation of the auto deolership. See below table.
Year of
Ooeration.
1
2
3
4
5
6
7
Disbursement Amount..
50%
50%
50%
50%
25%
25%
25%
.Disbursements will be distributed each quorter, commencing with the second
que rter after Developer has commenced operations.
"Disbursement amount will be calculated 0$ a percentage portion of the
City's share of sales tax revenues generated by Developer.
The disbursements will be limited only to the first seven yeors of operation of the Toyota
dealership. The maximum disbursement amount is limited to a percentage of the total sales tax
generated, not to exceed One Million Four Hundred Thirty-five Thousand Dollars ($1,435,000).
The structure of the agreement conceptually represents a shared performance agreement
between the Agency ond the developer whereby both parties will proportionately benefit from the
Toyota dealership's level of performance during the first seven years of operation.
Conditions of Disbursement
In addition to all of the maintenance requirements and operating covenants contained in the
OPA, the Agreement further establishes the following conditions of disbursement:
1. Execution and Deliverv of Documents. The OPA shall have been recorded against the
property in the official records of Son Diego County as an encumbrance to the
property superior and non-subordinate to any monetary liens, including without
limitation construction and/or permanent financing.
2. Insurance. The developer shall have insurance as required.
3. Reaulatorv Aoorovals. Assuming no protests have been lodged against the location
and opening of the dealership, the developer shall have obtained any legally required
regulatory approval(s) from applicable governmental agency(ies) related to the
developer's ownership and operation of the applicable dealership on the property.
4. Manufacturer Aooroval. The developer sholl have received any required approval(s)
from the manufacturer for the operation of the applicable dealership upon the
property.
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5. Consent of Owner for Recordina of Aareement aaainst the Prooertv. The developer
shall obtain the written consent and/or agreement of each dealership and each lender
allowing recordation of the OPA against the property in a superior and
non-subordinate position to all other monetary liens and use restrictions on the
property .
6. Pavment of Procertv Taxes. No ad valorem real property taxes or assessments
assessed with respect to the property shall be delinquent.
7. No Default. There shall exist no condition, covenant, event or act which would
constitute an event of default, or which, upon the giving of notice or the possage of
time, or both, would constitute an event of default.
8. Dealershic Continuous Oceratian. The applicable dealership on the property shall be
in continuous operation and generating sales tax revenues in compliance with the
restrictive covenants of the OPA.
9. Environmental Condition of the Property. The developer shall not be in default of the
requirements regarding the environmentol condition of the property.
FISCAL IMPACT
The General Fund will loan the Agency an amount not to exceed One Million Four Hundred
Thirty-five Thousand Dollars ($' ,435,000) over seven (7) yeors. The amount' loaned to the
Agency eoch year is based upon a percentage of the sales tax revenue generated by the Toyota
dealership. Quarterly disbursements will be made by the Agency to the developer in accordance
with the pre-determined schedule of disbursements (Exhibit "C" of the OPAl. The Agency will
repay the General Fund the entire amount of the loan with interest. Sales tax revenues generated
by the Toyota dealership during the lifetime of the project are anticipated to far exceed the loan
amount, resulting in no net impact to the general fund.
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Recording Requested By and
When Recorded Mail to:
CHULA VISTA REDEVELOPMENT AGENCY
276 Fourth Avenue
Chula Vista, CA 91910
Attn: Linda Welch
(Space Above This Line For Recorder)
'This document is exempt from the payment of a
recording fee pursuant to Government Code
Section 6103.
APN: 644-040-66 and 644-040-11
OWNER P ARTICIP ATION AGREEMENT
This OWNER P ARTIOP A TION AGREEMENT ("Agreement") is entered into by and
between the REDEVELOPMENT AGENCY OF THE CITY OF CHULA VISTA, a public body
corporate and politic ("AGENCY"), and Sunroad CV Auto, Inc. ("DEVELOPER"), dated and
effective as of February~ 2005 ("Effective Date").
WHEREAS, the DEVELOPER desires to develop real property (APN 644-040-66 and 644-
040-11) within the City of Chula Vista, generally located along the southerly side of Main Street, east
of Brandywine Avenue and west of Maxwell Road, within the City of Chula Vista, California
("Property"), as further described in the map attached hereto as Exhibit" A."
WHEREAS, a Master Owner Participation Agreement ("Master Agreement") was previously
executed and entered into on August 24, 2004 by and between AGENCY and Fred Borst, Borst
Family Trust, Fask Land, Inc. or permitted assignee ("Master DEVELOPER"), the Master
DEVELOPER of Property and other contiguous properties in the Auto Park East Specific Plan,
setting forth development standards and performance requirements for the Master DEVELOPER
and individual dealerships, including Property; and
WHEREAS, DEVELOPER shall comply with all applicable obligations, covenants, and
provisions of said Master Agreement, incorporated herein by this reference; and
WHEREAS, DEVELOPER has presented AGENCY plans for the development of Property as
a Toyota auto dealership ("Project") in accordance with the City of Chula Vista's ("City") adopted
Auto Park East Specific Plan ("Initial Entitlements"); and
WHEREAS, the Project is located entirely within the MERGED REDEVELOPMENT
PROJECT AREA within the jurisdiction of AGENCY; and
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WHEREAS, in consideration of the specific operating covenants and restrictive covenants
binding on DEVELOPER and set forth herein, AGENCY has agreed to make certain payments to
DEVELOPER; and
WHEREAS, AGENCY has determined it is of benefit to AGENCY, the City, and its citizens
for the Property to be planned, developed, and operated in accordance with the City's adopted
Auto Park East Specific Plan ("Specific Plan"), and that the imposition of certain operating
covenants and restrictive covenants upon the Property for the uses set forth in the Specific Plan
constitutes a valid public purpose and objective of AGENCY's Redevelopment Plan for the Project
area, and therefore AGENCY desires to obtain such operating covenants and restrictive covenants
on the Property and, subject to the terms hereof, DEVELOPER (for itself and its successors and
assigns of the Property or any part thereof) is willing to enter into and be bound by such operating
covenants and restrictive covenants; and
WHEREAS, AGENCY and DEVELOPER desire that the Project be developed in accordance
with the terms of this Agreement.
NOW, THEREFORE, AGENCY and DEVELOPER do hereby agree as follows:
1. DEVELOPMENT OBLIGATION. DEVELOPER covenants and agrees by and for itself, its
heirs, executors, administrators and assigns and all persons claiming under or through them the
following:
A. DEVELOPER shall develop the Property with the Project substantially in accordance
with the AGENCY-approved development proposal attached hereto as Exhibit "B:'
B. DEVELOPER shall obtain all necessary federal, state, and local governmental permits
and approvals and abide by all applicable federal, state and local laws, regulations, polities and
approvals in connection with the development of the Project. DEVELOPER further agrees that this
Agreement is contingent upon DEVELOPER securing said permits and approvals. DEVELOPER
shall pay all applicable development impact and processing fees. Subject to applicable laws,
AGENCY staff agrees to exercise good faith efforts to expedite the processing and final
consideration of all entitlements and permits necessary for the Project. DEVELOPER further agrees
that construction shall be completed in compliance with all applicable laws, labor standards, and
Department of Industrial Relations rules and regulations.
C. DEVELOPER shall apply for all necessary building permits to develop the Project
within one year from the date of this Agreement, shall diligently pursue obtaining such building
permits and shall actually develop the Property with the Project within one year from the date of
issuance of the building permits. In the event DEVELOPER fails to meet these deadlines, AGENCY
approval of DEVELOPER's development proposals shall be void and this Agreement shall have no
further force or effect.
D. DEVELOPER shall comply with all conditions of approval of the Auto Park East
Specific Plan (PCM-02-10) and the Design Review Committee (DRC-04-66), and comply with the
mitigation monitoring program adopted for Mitigated Negative Declaration 15-02-010.
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II. MAINTENANCE OBLIGATION.
A. DUTY TO MAINTAIN FIRST CLASS CONDmON. DEVELOPER covenants to
develop and maintain the Property in First Quality, First Gass Condition and Repair consistent
with development, maintenance and operation standards customary for first quality, first class auto
parks and first class quality automobile dealerships of comparable size within the San Diego
California market region and in conformity with the Initial Entitlement, and the covenants,
conditions, maintenance obligations and other restrictions therein during the term of this
Agreement. Additionally, DEVELOPER shall promptly and diligently repair, restore, alter, add to,
remove, and replace, as required, all improvements to maintain or comply as above, or to remedy
all damage to or destruction of all or any part of the improvements except improvements dedicated
to and accepted by the City. "First Quality, First Class Condition and Repair" means an efficient
and attractive condition, at least substantially equal in quality to the condition which exists when
the improvements on the Property were completed, ordinary wear and tear excepted, in accordance
with all applicable laws and conditions. "Dealership" shall mean any person or business of any
nature selling, leasing, or financing vehicles on the property.
B. DELEGATION OF REPAIR AUTHORITY. In order to enforce all above maintenance
provisions, the parties agree that the Community Development Director of the City of Chula Vista
("Director") is empowered to make reasonable determinations as to whether the Property is in a
first class condition and repair. In accordance with the Master Agreement:
1. If the Director determines the Property appears materially different in terms
of maintenance and upkeep than the remainder of the Auto Park, the Property is not in conformity
with the requirements of this Agreement regarding maintenance and upkeep of the Project,
DEVELOPER shall be notified in writing and provided a reasonable time to cure and/or to
commence to cure and diligently and continuously complete such cure.
2. If a cure or substantial and ongoing progress to cure has not been made, the
Director is authorized to effectuate the cure by City forces or otherwise, the cost of which will
promptly be due from and reimbursed by DEVELOPER.
3. The Director or the City shall have the right to enforce this lien by forwarding
the amount to be collected to the San Diego Tax Assessor who shall make it part of the tax bill for
the Property.
III. NON-DISCRIMINATION COVENAN1S. DEVELOPER covenants by and for itself and any
successors in interest (and each Dealership suocessor) that there shall be no discrimination against
or segregation of any person or group of persons on account of race, color, creed, religion, sex,
marital status, physical or mental disability or medical condition, national origin or ancestry in the
sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the Property, nor shall
DEVELOPER itself or any person claiming under or through it establish or permit any such practice
or practices of discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, subtenants, sublessees or vendees of the Property. The foregoing
covenants shall run with the land.
A. All deeds, leases or contracts with respect to the Property shall contain or be subject
to substantially the following nondiscrimination or nonsegregation clauses:
1. In deeds: "The grantee herein covenants by and for itself, its successors and
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assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of sex, marital status, race,
color, creed, religion, national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy,
tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any person claiming
under or through it, establish or permit any such practice or practices of discrimination or
segregation with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sub lessees or vendees in the land herein conveyed. The foregoing covenants shall run
with the land."
2. In leases: "The lessee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, and this lease is made and accepted upon
and subject to the following conditions:
That there shall be no discrimination against or segregation of any person or
group of persons, on account of sex, marital status, race, color, creed, religion, national
origin or ancestry in the leasing, subleasing, renting, transferring, use, occupancy, tenure or
enjoyment of the land herein leased, nor shall lessee itself, or any person claiming under or
through it, establish or permit such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees, sub
lessees, subtenants or vendees in the land herein leased."
3. In contracts: "There shall be no discrimination against or segregation of any
person or group of persons on account of sex, marital status, race, color, religion, creed, national
origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or enjoyment of the
land, nor shall the transferee itself or any person claiming under or through it, establish or permit
any such practice or practices of discrimination or segregation with Reference to the selection,
location, number, use or occupancy of tenants, lessees, subtenants, sub lessees or vendees of the
land."
IV. RESTRICTIVE OPERATING COVENANTS. DEVELOPER hereby covenants and agrees (for
itself and any and all successors in interest of the DEVELOPER entity, any and all AGENCY-
approved assignees under this Agreement or any part thereof, and any and all successors in interest
to the Property or any part, portion, or parcel thereof, including any and all AGENCY-approved
transferees of the Property or any part, portion, or parcel thereof) to the following covenants:
A. DEVELOPER AND DEALERSHIP'S OPERA TlONS. During the operating period,
DEVELOPER shall do or cause to be done the following:
1. For as long as operated as a new vehicle Dealership, to designate the Property
as the point of sale for sales tax purposes in all retail sales for vehicles whose sales originate from
the Property;
2. At no cost to AGENCY or City, keep and maintain the Property and the
improvements thereon and all facilities appurtenant thereto, consistent with first class auto parks
and first class automobile dealerships, in good order and repair and safe condition, and the whole
thereof, the improvements, and landscaping in a clean, sanitary, and orderly condition; and
3. Comply with all governmental requirements but only to the extent a failure to
comply materially and adversely affects DEVELOPER's (or any successor's) ability to comply with
these covenants; provided, however, that DEVELOPER (nor its successors) dol does not waive its
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right to challenge the validity or applicability of any such governmental requirements.
V. CONSIDERATION/PAYMENT FOR ANNUAL COMPUANCE WITH RESTRICTIVE
OPERATING COVENANTS.
A. SALES TAX REVENUES AND RELATED DEFINITIONS. As used in this Section,
"Sales Tax Revenues" shall mean that portion of taxes derived and received by the City and legally
available for unrestricted use by the City's General Fund from the imposition of the Bradley Burns
Uniform Local Sales and Use Tax Law, commencing with Section7200 of the Revenue and Taxation
Code of the State of California ("State"), as amended, or its equivalent, arising from all businesses
and activities conducted on the Property in accordance herewith from time to time, which are
subject to such Sales and Use Tax Law. As used in herein "Retained Sales Tax" shall mean 1 % of
Sales Tax Revenues reported in the DEVELOPER's quarterly sales and use tax report to the State
and verified by the City minus an amount equal to the payment described herein if any, paid to
DEVELOPER herein.
B. CONSIDERA TrON. In consideration for DEVELOPER's agreement to be bound by
the Restrictive Covenants in Section IV of this Agreement, AGENCY agrees, as follows:
1. AGENCY shall pay to DEVELOPER an amount equal to a portion of the City's share
of Sales Tax Revenues generated by Developer on a quarterly basis as identified in the attached
Exhibit "C' ("Disbursement"). The Disbursement will be based on the sales tax information
received from the State Board of Equalization which is available one quarter after the submission of
the DEVELOPER's quarterly sales/use tax report. The Disbursement will be distributed each
quarter, commencing with the first full quarter after DEVELOPER has commenced operations
during the term of the Restrictive Covenants until the earlier of (i) the Seventh (7th) anniversary date
of the first payment as identified in Exhibit "C:' or (ii) receipt by DEVELOPER of the aggregate
amount of One Million Four Hundred Thirty-five Thousand Dollars ($1,435,000) under this
subsection.
a. The Disbursements due hereunder shall be payable from any source
of funds legally available to AGENCY. The determination of the source of funds shall be in the sole
and absolute discretion of AGENCY.
b. The amount of the Disbursement due on each such payment date shall
be determined by the City's sales tax consultants based on information provided by the State Board
of Equalization and verified by the City's Finance Department adjusted for any corrections to
previous tax reports made by the State Board of Equalization.
c. Sales Tax Revenues generated each period shall be determined as
follows:
(i) For sales of automobiles, parts and accessories, Sales Tax
Revenue shall be based upon the State Board of Equalization sales and use tax report(s) applicable
to a dealership at the Property during the applicable sales period; and
(1) "Sales of Automobiles" shall include all new or used
vehicles conveyed to any related or independent third party, including any financing company for
purposes of selling, leasing, or financing the vehicle to the end user.
(ii) Upon written request by AGENCY, DEVELOPER shall
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promptly furnish to AGENCY any and all said information and take any and all actions which are
reasonably deemed necessary by AGENCY to assist AGENCY in verifying the information
contained in said sales and use tax returns and reports of new and used vehicles. AGENCY shall be
entitled to review and audit the Dealership's books and records pertaining to the foregoing.
(1) If an audit of the Dealership's books and records
determines that DEVELOPER (or Dealership) has overstated revenues in any applicable period,
DEVELOPER shall reimburse AGENCY for any overpayment, and if DEVELOPER has overstated
revenues by more than ten percent (10%) in any period, DEVELOPER shall reimburse AGENCY for
the cost of the audit, within thirty (30) days of notice thereof from AGENCY.
(2) Reciprocally, DEVELOPER (or Dealership), atits sole
cost and expense, may request an audit to verify and/ or reconcile the calculation of the amount of
any payment If such audit reveals an underpayment to DEVELOPER (or a Dealership), then
AGENCY shall pay the outstanding amount of any payment hereunder to be paid to the
DEVELOPER (or Dealership); and if such audit reveals an overpayment to DEVELOPER, then
DEVELOPER immediately shall reimburse AGENCY for such overpayment. If AGENCY has
underpaid DEVELOPER by more than 10% as a result of an error committed by the AGENCY,
AGENCY shall reimburse DEVELOPER for reasonable audit costs, within 30 days of notice thereof
from DEVELOPER.
(3) If DEVELOPER contests the amount of Sales Tax
Revenues for any period for the sales of automobiles, parts, and accessories arising from the
dealership, as based upon the State Board of Equalization sales and use tax report applicable to the
Dealership and the Property, at the sole expense of DEVELOPER, then AGENCY shall use good
faith efforts to investigate and, if appropriate, to take steps to ensure that the correct amount of
Sales Tax Revenues arising from the dealership is allocated to the City, and the correct amount of
the period's payment is calculated and paid to DEVELOPER.
d. If after the fourth (4th) year payments, DEVELOPER has received less
than $1.1 million in compensation for compliance with the restrictive covenants contained herein.
DEVELOPER may reqUest and AGENCY shall in good faith consider modification to the payment
schedule to ensure DEVELOPER receives fair and just compensation for compliance with the
restrictive operating covenants being purchased by the AGENCY herein.
C. PAYMENTS. Upon DEVELOPER's satisfaction of the Conditions Precedent to Disbursement set
forth below, each payment shall occur within 180 days following the end of the quarter ("Payment
Date") based with respect to the applicable sales period. DEVELOPER is aware and acknowledges
that the determination of the Disbursement amount will be determined and based upon the receipt
by the City of the State Board of Equalization report within 90 days of the end of the applicable
quarter. If the City fails to receive said report within 90 days of the end of the applicable quarter,
Payment Date shall be automatically extended a number of days equal to the number of days delay
in the City receipt of said report. DEVELOPER is aware and acknowledges that as of the Effective
Date of Agreement, CITY intends that the State Board of Equalization report will be supplemented
and summarized by an outside third party fiscal consultant.
1. Each payment will be made within 180 days following the end of the quarter, except as
otherwise provided herein, based on the issuance and receipt by the City of the applicable State
Board of Equalization report/disbursement. DEVELOPER acknowledges each State Board of
Equalization report is also reviewed by fiscal consultant(s) to AGENCY and City. DEVELOPER
acknowledges and agrees that such fiscal consultant(s) will undertake caIcu1ation of each payment
and, thereafter, the calculation will be reviewed by the City's Finance Department staff. Upon the
~'2--/3
City's receipt of each quarterly report, AGENCY shall notify DEVELOPER in writing of the date of
receipt and the anticipated date of delivery of payment to DEVELOPER. AGENCY will use its best
efforts to review and process any and all payments due to DEVELOPER in a timely and
expeditious manner.
D. CONDITIONS PRECEDENT TO DISBURSEMENT. Each payment hereunder is
conditioned upon the satisfaction by DEVELOPER of the respective conditions precedent
(1) through (9) inclusive, described below. Such conditions ("Conditions Precedent") are solely for
the benefit of AGENCY, and shall be fulfilled by DEVELOPER (or waived by AGENCY in its sole
and reasonable discretion) within the time periods provided for herein. DEVELOPER may satisfy
(and submit evidence of such satisfaction to the Director) one or more of such Conditions Precedent
at any time prior to the first payment, so that at the time the first payment is due, DEVELOPER may
have already provided satisfactory evidence of compliance with each of such Conditions Precedent.
Thereafter, for subsequent payments, DEVELOPER shall have been deemed to have satisfied each
of the respective conditions precedent which do not expire or contain a recurring obligation, unless
DEVELOPER fails to timely satisfy condition 7, below, in which case AGENCY may require renewal
or update of any prior submittal.
1. Execution and Delivery of Documents. This Agreement shall have been
recorded against the Property in the official records of San Diego County as an encumbrance to the
Property superior and non-subordinate to any monetary liens, including without limitation
construction and/ or permanent financing.
2. Insurance. DEVELOPER shall have insurance, including general liability
coverage.
3. Regulatory Ap'provals. Assuming nO protests have been lodged against the
location and opening of the Dealership, DEVELOPER shall have obtained any legally required
regulatory approval(s) from applicable governmental AGENCY(ies) related to DEVELOPER's
ownership and operation of the applicable Dealership on the Property.
4. Manufacturer Approval. DEVELOPER shall have received any required
approval(s) from the manufacturer for the operation of the applicable Dealership upon the Property.
5. Consent of Owner for Recordin~ of Agreement a~ainst the Propertv.
DEVELOPER shall obtain the written consent and/ or agreement of each Dealership and each lender
allowing recordation of this Agreement against the Property in a superior and non-subordinate
position to all other monetary liens and use restrictions on the Property.
6. Payment of Prooerty Taxes. No ad valorem real property taxes or
assessments assessed with respect to the Property shall be delinquent.
7. No Default. There shall exist no condition, covenant, event or act which
would constitute an event of default hereunder, or which, upon the giving of notice or the passage
of time, or both, would constitute an event of default.
8. Dealership Continuous Ooeration. The applicable Dealership on the Property
shall be in continuous operation and generating Sales Tax Revenues in compliance with the
Restrictive Covenants herein.
2-11+
~3
9. Envirorunental Condition of the Pro~erty. DEVELOPER shall not be in
default of the requirements regarding the environmental condition of the Property.
D. NO PLEDGE OF TAXES. AGENCY's obligations hereunder are not, shall not
constitute, and shall not be construed as a pledge of funds by AGENCY or the City, in particular
there is and shall not be a pledge of tax increment pursuant to Health and Safety Code Section
33671, a pledge of City sales tax revenues, a pledge of any other specific revenues of AGENCY, or a
pledge of the City's general fund. All references to the Sales Tax Revenue are intended solely to
create an index for calculating the amount of the payments, and shall not in any respect whatsoever
be construed as a pledge of specific funds of AGENCY nor the City's general fund. Nothing in the
foregoing statement that there is and shall be no pledge of specific funds hereunder, shall limit or
diminish the AGENCY's obligation to make payments required hereunder to DEVELOPER,
assuming all Conditions Precedent to such payment are satisfied.
E. CAPON CONSIDERATION. Notwithstanding anything else herein contained, in no
event shall the total consideration paid to DEVELOPER pursuant to this Section V exceed the sum
of One Million Four Hundred Thirty-Five Thousand Dollars ($1,435,000).
F. NO ACCELERATION. It is acknowledged by the parties that any payments by
AGENCY provided for herein may only be paid in those periods in which DEVELOPER is in
compliance with the Restrictive Covenants provided for herein. Upon AGENCY satisfaction that
DEVELOPER has come into compliance with the restrictive operating covenants contained within
Section V, AGENCY shall make any previously withheld payments due pursuant to Section V.
Therefore, the failure of AGENCY to make any payments during the contribution term provided
above shall not cause the acceleration of any future payments by AGENCY to DEVELOPER beyond
the date of such default.
VI. SIGNAGE
A. SIGN. Upon execution of this Agreement, AGENCY shall diligently pursue the
construction of an auto park directional sign along Auto Park Drive in the vicinity of the eastern
boundary of Interstate 805 ("Sign"). The Sign will be professionally designed utilizing auto park
industry standards. At this time, such standards may include a permanent display with space for a
listing of each make of auto dealership that constructs an auto dealership within the Auto Park,
including but not limited to Toyota and Scion,. and an electronic reader board. The Sign will be
designed by the AGENCY in consultation with the Association or with Master Developer and
existing dealers if the Association has not yet been formed.
B. AGENCY recognizes that the DEVELOPER believes it is critical that the Sign be
erected before the date upon which DEVELOPER opens the Project to the public. As a result of that
acknowledgment AGENCY will use its best efforts to timely identify a location for and design of the
Sign. Additionally, AGENCY will in good faith use all reasonable means necessary to procure the
appropriate interest in land.
C. Concurrently with site identification AGENCY will diligently pursue design and
construction consultants to erect said Sign. To that end, Agency has identified the following target
dates for the sign:
'2.. _15
-~
DATE
February, 2005
April, 2005
May, 2005
June, 2005
Jul , 2005
September,
2005
October, 2005
ACTION
City hires consultant to recommend potential location and
desi n of the Auto Park Directional si n
Proposed design of Auto Park Directional sign complete
and otential sites identified
Auto Dealers Association! City staff select design and
proposed location
DRe and City Council Review and Approval of Design and
location
Be in ac uisition process
Acquisition of site
Be in construction
D. DEVELOPER acknowledges and agrees that this Agreement does not bind the
AGENCY to enter into any agreement or to take any particular action related to said Sign and that
the AGENCY's failure to enter an agreement with a consultant to pursue installation or construction
of said Sign shall not constitute a breach of this Agreement. In this regard, the AGENCY
undertakes no obligation to DEVELOPER hereunder and retains its sole and unfettered discretion
to adopt any resolutions and does not prejudge or commit, in any respect whatsoever, to the
DEVELOPER, or any other person or entity, regarding said Sign. DEVELOPER understands that
the AGENCY and City expressly and intentionally reserve the right to exercise their discretion as to
all matters which they are, by law, entitled or required to exercise their discEtion.
E. DEVELOPER retains its discretion to apply for and pursue construction of the above
identified sign. H after consultation with the AGENCY, DEVELOPER and AGENCY reasonably
determine AGENCY is unable or unwilling to erect said sign and DEVELOPER pursues private
construction of said sign, DEVELOPER may request and AGENCY shall in good faith consider
providing appropriate assistance to DEVELOPER. DEVELOPER acknowledges and agrees that any
assistance provided to DEVELOPER shall not exceed $1.2 million for the sign. H the AGENCY
determines assistance is appropriate, at least30 days prior to DEVELOPER expending funds for the
erection of the sign. DEVELOPER and AGENCY shall meet to determine the amount and form of
said assistance and to devise a mutually acceptable payment schedule.
F. H the DEVELOPER chooses to pursue the erection of the sign. the AGENCY
acknowledges that DEVELOPER may request additional funds associated with land acquisition and
financing of the sign. DEVELOPER acknowledges AGENCY has made no commitment as it relates
to acquisition or financing costs but will in good faith consider said request.
VII. MISCELLANEOUS.
A. AGENCY and DEVELOPER agree that the covenants of the DEVELOPER expressed
herein shall run with the land for the duration of the term of the MERGED REDEVELOPMENT
PROJECT AREA, as it may be amended from time to time.
B. DEVELOPER and AGENCY agree to mutually consider reasonable requests for
amendments to this Agreement which may be made by lending institutions, AGENCY's counsel,. or
DEVELOPER's counsel provided such requests are consistent with this Agreement and would not
05
2-/~
substantially alter the basic business terms included herein. The Director shall have the authority to
issue interpretations, waive provisions and enter into amendments of this Agreement on behalf of
the AGENCY so long as such actions do not substantially change the uses permitted for the Project
or the terms and provisions specified herein and as agreed to by the Agency Board. All other
waivers or amendments shall require the consideration and written consent of the AGENCY Board.
C. It is understood the schedule and outside dates for performance under this
Agreement are subject to all of the terms and conditions set forth in the text of this Agreement.
AGENCY vests in the Executive Director the sole and complete discretion to authorize extensions to
the outside dates set forth herein for (i) application for all necessary permits to develop the Project,
and (ii) development of the Project; provided however, that in no event shall any extension of any
outside date referenced in (i) and/or (ii) of this subsection, or all extensions taken together, exceed
eighteen (18) months. Additionally, each and every extension is also subject to the following
provisions.
(i) Each extension shall be mutually agreed upon in writing
between DEVELOPER (or a successor) and the Executive Director based on extensions necessary
due to changes in circumstances, market conditions relating to operation of first class, first quality
automobile dealerships and franchises in Chula Vista, California, or other factors not known by the
parties as of the date of this Agreement.
(ii) Each request for an extension from DEVELOPER (or a
successor) of an outside date shall be in writing stating the requested extension period, the reasons for
such extension, the facts and circumstances related to the need for such extension, and other
information reasonably necessary for the Executive Director to understand the basis for such request
and the circumstances that did not exist as of the date of this Agreement that necessitate such
requested extension. The Executive Director is authorized to agree to make such revisions as he/she
deems reasonably necessary based on changes in circumstances or other factors not known as of the
date of this Agreement. In the event an extension is granted by the Executive Director, then the
performance tasks hereunder shall be extended by such period and any corresponding extension
necessary to correlate the times for performance hereunder are also reasonably extended to correlate
with the approved extension, as determined by the Executive Director in his/her sole and absolute
discretion.
D. AGENCY and DEVELOPER agree that the covenants of the DEVELOPER expressed
herein are for the express benefit of the AGENCY and for all owners of real property within the
boundaries of the MERGED REDEVELOPMENT PROJECT AREA as the same now exists or may be
hereafter amended. AGENCY and DEVELOPER agree that the provisions of this Agreement may
be specifically enforced in any court of competent jurisdiction by the AGENCY on its own behalf or
on behalf of any owner of real property within the boundaries of the MERGED REDEVELOPMENT
PROJECT AREA. "Notwithstanding the foregoing or anything else in this Agreement, nothing in
this Agreement shall be construed to accord any party not a party to this Agreement third-party
beneficiary status under this Agreement, and nothing in this Agreement shall be construed to
accord any party not a party to this Agreement any right to enforce any provision of this
Agreement."
E. AGENCY and DEVELOPER agree that this Agreement may be recorded by
AGENCY in the Office of the County Recorder of San Diego County, California.
F. DEVELOPER shall and does hereby agree to indemnify, protect, defend and hold
2-17
~
harmless AGENCY and the City, and their respective Council members, officers, employees, agents
and representatives (collectively, the "Indemnified Parties"), from and against any and all liabilities,
losses, damages, demands, claims and costs, including court costs incurred as result of any
administrative or regulatory action, and reasonable attorneys' fees (collectively, "liabilities") arising,
directly or indirectly, from (a) AGENCY'S approval of this Agreement, (b) AGENCY's or City's
approval or issuance of any other permit or action, whether discretionary or non-discretionary, in
connection with the Project contemplated herein, and (c) DEVELOPER's construction and operation
of the Project permitted hereby.
G. In the event that any court action or other legal proceeding is brought by any person
not a party to this Agreement to challenge this Agreement, the granting of any entitlements, the
purchasing of the operating covenant or the fulfillment of any condition to the obligations of the
parties hereto, and without regard to whether or not the DEVELOPER or the AGENCY is a party to
said action or proceeding, DEVELOPER and AGENCY shall meet and confer to discuss how to
respond to such challenge. If the parties agree to defend against such challenge, or defense costs are
otherwise reasonably incurred by AGENCY or the City prior to such determination, DEVELOPER
shall indemnify the AGENCY and the City for all expenses, including attorneys' fees, to defend the
City or the AGENCY from any claim, action or proceeding against the City, the AGENCY or their
agents officers, or employees to attack, set aside, void or annul the approval of this Agreement or
the approval of any entitlements or the purchasing of the operating covenants or condition to the
obligations of the parties hereto. AGENCY and the City shall promptly notify DEVELOPER of any
such claim, action or proceeding. For purposes of this Section, DEVELOPER acknowledges that the
term" attorneys' fees" includes the reasonable costs incurred by the City or AGENCY in the defense
of any claim, action or proceeding by the City Attorney or her staff.
H. In the event of any dispute between the parties with respect to the obligations under
this Agreement that results in litigation, the prevailing party shall be entitled to recover its
reasonable attorney's fees and court costs from the non-prevailing party.
1. Time is of the essence for each and every obligation hereunder.
J. If DEVELOPER fails to fulfill its obligations hereunder after due notice and
reasonable opportunity to cure, DEVELOPER shall be in default hereunder, and in addition to any
and all other rights and remedies AGENCY may have, at law or in equity, AGENCY shall have the
right to terminate its approval of the Project and this Agreement.
K. If a party to this Agreement fails to timely satisfy a material obligation under this
Agreement as the time for performance may have been "extended in its sole discretion pursuant to
Section VII.e and/or Section VIIJ of this Agreement (such party, a "Defaulting Party", and such
failure to timely perform, an "Event of Default"), then the other party to this Agreement (the "Non-
Defaulting Party") may provide the Defaulting Party written notice of such Event of Default (a
"Default Notice"). Upon the Defaulting Party's receipt of a Default Notice, the Defaulting Party
shall have ninety (90) days within which to cure the Event of Default, or if such Event of Default is
of a nature that it cannot be cured within such 90-day period, then to begin to effect such cure and
diligently pursue completion of performance in the shortest, commercially reasonable time period
(the "Cure Period"). Except as otherwise provided within this Agreement, neither party to this
Agreement may proceed against a Defaulting Party, nor cease to itself timely perform each and every
obligation due under this Agreement, unless and until a Defaulting Party has failed to cure the Event
of Default within the applicable Cure Period. If the Defaulting party fails to cure the Event of
~7
Z-{e,
Default within the applicable Cure Period, then in addition to any and all other rights and remedies
the Non-Defaulting Party may have, at law or in equity, the Non-Defaulting Party may terminate this
Agreement.
L. The qualifications and identities of the individuals comprising the DEVELOPER
entities are of particular concern to the AGENCY. It is because of those qualifications and
identities that the AGENCY has entered into this Agreement with the DEVELOPER. No
voluntary or involuntary successor in interest of the DEVELOPER shall acquire any rights or
powers under this Agreement except as expressly set forth herein.
(i) DEVELOPER shall not, except as permitted by this Agreement, assign or
attempt to assign this Agreement or any right herein with respect to the Proj ect, nor make any
total or partial sale, transfer, conveyance or assignment ofthe whole or any part of the Property
Site or the improvements thereon, without prior written approval of the AGENCY in its sole
discretion. Any attempted transfer that has not been so approved by AGENCY shall be void.
Except as permitted below, transfers of any interest in the DEVELOPER entity shall constitute a
prohibited transfer hereunder.
(ii) Notwithstanding any other provisions ofthis Agreement to the contrary,
AGENCY approval of an assignment of this Agreement or any interest herein shall not be
required in connection with any of the following:
(a) Any transfers among the principals of the DEVELOPER entities so
long as the existing principals thereof shall be and remain in management control of the
DEVELOPER entity with at least a fifty-one percent (51 %) ownership or beneficial interest in
the DEVELOPER entity.
(b) The granting of temporary or permanent easements or permits to
governmental or quasi-governmental agencies to facilitate the development of the Property, or
any component thereof.
(iii) AGENCY consent will be granted if:
(a) the proposed assignee/transferee expressly assumes, in writing, Master
DEVELOPER's obligations hereunder as to times following the effective date of the assignment or
transfer;
(b) the proposed assignee/transferee has demonstrated to the reasonable
satisfaction of AGENCY that such person or entity has adequate financial capacity to fulfill all
obligations of this Agreement.
(M) Notwithstanding the foregoing or anything else in this Agreement, all dates for
performance set forth in this Agreement are subject to a one (1) day extension for each day of delay
in performance due to a Force Majeure Event, provided that the party claiming the right to such
extension provides the other party written notice of the Force Maj eure Event within thirty (30) days
following the occurrence of such event. As used in this Agreement, "Force Majeure Event" means
any act of God, act or omission of any local, state, or federal governmental AGENCY (including,
without limitation, the AGENCY and the City, and including without limitation, the failure or refusal
N 2-1<1
of any such AGENCY to grant, issue or enact any entitlement, approval, or pennit necessary for the
use, development or disposition of the Property or any portion of the Property), casualty, stormy or
inclement weather, epidemic, war, terrorism, insurrection, riot, :fire, flood, earthquake, strike, boycott
or other labor dispute, delay in transportation, unavailability or scarcity oflabor or materials and any
legislative, administrative or judicially imposed restriction upon or prohibition against construction
or development.
Signature Page Follows
2-20
;;9
-CQ-ZCC5 07:36PW FROM-SUNROAD ENTERPRISES
+Q5Il6ZB44;
T-m P.oI5/018 F-3Q9
Signature: Page
IN WITNESS WHEREOF TIiE PARTIES HAVE ENTERED INTO TInS AGREEMENT
EFFECTIVE AS OF THE DATE FIRST WRITTEN ABOVE.
-AGENCY"
REDEVELOPMENT AGENCY OF THE CITY OF
CHULA VISTA. a public body corporate 8I1d politic
DATED:
By.
Stephen C. Padilla, Chainnan
APPROVED AS TO FORM BY:
Ann Moore
AGENCY Anomey
"PEVELOPER"
DATED:
1;6 q 2 p"5
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Its: (/.. Fc./J--1 t/ P
NOTARY; Pleue attach acmowledgmenl eard(s).
J:IAItpmoylEHuUlAsreo"""'ts\Toyota OPA 020205 CLEAN.doc
2,2-1
4-%6 -
EXHIBIT A
LOCATOR MAP
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LOCATION
AUTO
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CHULA VISTA PLANNING AND BUILDING DEPARTMENT
LOC)CATOR ~~~ Chula Vista Toyota ~;;I;~~IEW
PROJECT Auto Park East
ADDRESS: Request Proposal fer new auto dealership and carwash.
SCALE: . FILE NUMBER: 2 ,...,...,
NORTH No Scale DRC-04-66 - .&-.&-
J:\pIanning\carlo.~ocators\drc0466.cdr 07.12.04
EXHIBIT B
REDUCED COPIES OF DESIGN PLANS
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EXHIBIT C
SCHEDULE OF DISBURSEMENTS
Disbursement Amount
50%
50%
50%
50%
25%
25%
25%
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:.17.:/
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RDA RESOLUTION NO. 2005-1903
RESOLUTION OF THE REDEVELOPMENT AGENCY OF
THE CITY OF CHULA VISTA APPROVING AN OWNER
PARTICIPATION AGREEMENT WITH SUNROAD CV AUTO,
INC. FOR THE OPERATION AND MAINTENANCE OF A
CHULA VISTA TOYOTA DEALERSHIP
WHEREAS, The Redevelopment Agency of the City of Chula Vista has proactively
planned for the development and expansion of the auto park along the Main Street corridor east
of the I-80S Freeway between Brandywine Avenue and Maxwell Road; and
WHEREAS, Sunroad CV Auto, Inc. proposes to develop a Toyota dealership on a
portion of the property located on the south side of Main Street between Brandywine and
Maxwell Road; and
WHEREAS, the site for the proposed Toyota dealership is located within the Otay Valley
Road Redevelopment Project Area under the jurisdiction and control of the Redevelopment
Agency of the City ofChula Vista; and
WHEREAS, the site for the proposed Toyota Automobile Dealership is located within
the boundaries of the Auto Park East Specific Plan (PCM-02-10) approved by City Council in
June 2004; and
WHEREAS, in August 2004, the Redevelopment Agency of the City of Chula Vista
approved a Master Owner Participation Agreement with Fred Borst, Borst Family Trust, Fask
Land, Inc., establishing development standards and performance requirements for the 29 acres of
territory within the Auto Park East Specific Plan; and
WHEREAS, The Master Owner Participation Agreement sets forth a number of
developer obligations of both the existing master developer and future individual developers and
dealership owners; and
WHEREAS, The Master Owner Participation Agreement and the Owner Participation
Agreement with Sunroad CV Auto, Inc. will concurrently guide the development, maintenance,
and operation of the Toyota dealership as a "first quality, first class" auto dealership; and
WHEREAS, the agreement represents the Chula Vista Redevelopment Agency's ongoing
efforts to effectively plan for the City's expanding Auto Park.
NOW, THEREFORE, BE IT RESOLVED by the Redevelopment Agency of the City of
Chula Vista that this Redevelopment Agency does hereby approve in the form presented the
Owner Participation Agreement between the Redevelopment Agency of the City of Chula Vista
and Sunroad CV Auto, Inc., a copy of which shall be kept on file in the Office of the City Clerk.
:2---31
RDA Resolution No. 2005-1903
Page 2
BE IT FURTHER RESOLVED that the Mayor of the City of Chula Vista is hereby
authorized to execute said Owner Participation Agreement with Sunroad CV Auto, Inc. for and
on behalf of the Redevelopment Agency of the City of Chula Vista.
Presented by
Approved as to form by
. Madigan
ity Development Director
o.~
Ann Moore
Agency Counsel
PASSED, APPROVED, and ADOPTED by the Redevelopment Agency of the City of
Chula Vista, California, this 15th day of February 2005, by the following vote:
AYES:
Agency Members:
Castaneda, Davis, McCann, and Padilla
NA YES:
Agency Members:
None
ABSENT:
Agency Members:
Rindone
ABSTAIN:
Agency Members:
:tbcP~
~ Stephen C. Padilla, Chairman
ATTEST:
cJ
STATE OF CALIFORNIA )
COUNTY OF SAN DIEGO )
CITY OF CHULA VISTA )
I, Laurie A. Madigan, Secretary of the Chula Vista Redevelopment Agency, do hereby certify
that the foregoing Resolution No. 2005-1903 was duly passed, approved, and adopted by the
Redevelopment Agency at a regular meeting held on the 15th day of February 2005.
Executed this 15th day of February 2005.
~'''U])~1~(r)
. Lauri. A. Madigan, ecre
2--32-
THE ATTACHED AGREEMENT HAS BEEN REVIEWED
AND APPROVED AS TO FORM BY THE CITY
ATTORNEY'S OFFICE AND WILL BE
FORMALLY SIGNED UPON APPROVAL BY
THE CITY COUNCIL
Dated:
11/5/ DV
First Amendment to
Owner Participation Agreement
Between
City of Chula Vista,
Redevelopment Agency ofthe
City of Chula Vista, and
Sumoad CV Auto, Inc.
2-33
Recordinl! Reauested Bv and
When Recorded. Mail to:
City Clerk's Office
CITY OF CHULA VISTA
276 FOUlih Avenue
Chula Vista, CA 91910
(Space Ahove TlJ;S Line for ReciJrder)
This document is exempt from the payment of a recording
fee pursuant to California Government Code section 6103.
APN: 644-040-66 and 644-040-11
FIRST AMENDMENT TO OWNER PARTICIPATION AGREEMENT
This "First Amendment to Owner Participation Agreement" (the "Amendment")
is entered into by and between the City of Chula Vista, a California municipal
corporation and charter city (the "City"), the Redevelopment Agency of the City of Chula
Vista, a California municipal corporation (the "Agency"), and Sunroad CV Auto, Inc., a
California corporation ("Sunroad"), (these entities may be referred to, collectively, as the
"Parties," or each individually, as a "Party"). This Amendment shall amend the "Owner
Participation Agreement," dated February 2005, by and between the Agency and
Sunroad, with respect to the development of certain real property located within the City.
This Amendment shall be effective as of the date last signed by the Parties to the
Amendment (the "Effective Date") and is entered into with respect to the following
recited facts:
RECITALS
A. The Agency and Sunroad entered into an "Owner Participation
Agreement," pursuant to Agency Resolution No. 2005-1903, adopted on February 15,
2005 (the "OPA");
B. The OPA relates to Sunroad's development of certain real property located
within the City of Chula Vista, identified as Assessor's Parcel Nos. 644-040-66 and 644-
040-11, generally located along the southerly side of Main Street, east of Brandywine
Avenue and west of Maxwell Road, and further described on Exhibit "A" to the OPA (the
"Propeliy");
C. Pursuant to the OPA, Sunroad agreed to, among other things:
I. Develop the Property in accordance with the Agency-approved
development attached as Exhibit B to the OPA;
Z-3L/-
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2. Apply for all necessary building permits to develop the Project within
one year from the date of the OPA and develop the Property within
one year from the date of issuance of the building permits;
3. Comply with all conditions of approval of the Auto Park East Specific
Plan and the Design Review Committee and comply with the
mitigation monitoring program adopted for Mitigated Negative
Declaration IS-02-0 I 0;
4. Develop and maintain the Property in "First Quality, First Class
Condition and Repair," consistent with development, maintenance and
operation standards customary for first quality, first class auto parks
and first class quality automobile dealerships of comparable size
within the San Diego market region; and
5. Designate the Property as the point of sale for sales tax purposes in all
retail sales for vehicles whose sales originate from the Property;
6. Keep the automobile dealership on the Property in continuous
operation and generating Sales Tax Revenues;
D. In exchange for Sunroad's covenants and obligations under the OPA, the
Agency agreed to provide certain consideration to Sunroad, including the obligations
detailed in sections V. and VI. of the OPA;
E. The City has determined that Sunroad's development and maintenance of
the Property pursuant to the OP A has resulted, or will likely result, in public benefit to
the City and its residents, including:
I. Public improvements to the Property, at Sunroad's expense, which
improvements will become City property; those improvements include
curb, gutter, sidewalk, driveway, ramp and sewer improvements and
have an estimated value in excess of $200,000;
2. Increased business development in the area, including additional auto
dealerships;
3. Creation of additional job opportunities for City residents;
4. Additional tax revenue to the City, which will assist the City 111
providing public services to its residents;
F. Development, planning and operation of the Property in accordance with
the City's adopted Auto Park East Specific Plan and with the operating and restrictive
covenants contained in the OPA; and
G. The City, the Agency and Sunroad desire to amend the OPA.
2-35
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AGREEMENT
NOW, THEREFORE, CITY, AGENCY, and SUNROAD agree as follows:
I. AGENCY REMOVED AS P ARTY TO OP A.
As of the Effective Date of this Amendment, the Redevelopment Agency of the
City of Chula Vista is no longer a party to the OP A; the Agency shall have no right or
obligation under the OPA.
I. I Estoooels. Sunroad acknowledges and agrees that, as of the Effective
Date, no performance of the Agency is due to Sunroad under the OP A. The Agency
acknowledges and agrees that, as of the Effective Date, no performance ofSunroad is due
to the Agency under the OPA.
1.2 Releases of Liabilitv.
1.2.1 Release of Sunroad. The Agency, on behalf of itself, its
successors and assigns, releases and discharges Sunroad its officers, directors, employees
and agents from any and all debts, claims, demands, liabilities, obligations, causes of
action and rights, including attorneys' fees and court costs, whether known or unknown,
that the Agency now owns or holds, or at any time on or before the Effective Date owned
or held, by reason of any act, matter, cause or thing relating to the OPA, as of the
Effective Date.
1.2.2 Release of Agency. Sunroad, on behalf of itself, its successors and
assigns, releases and discharges the Agency, its elected officials, officers, directors,
employees and agents from any and all debts, claims, demands, liabilities, obligations,
causes of action and rights, including attorney's fees and court costs, whether known or
unknown, that Sunroad now owns or holds, or at any time on or before the Effective Date
owned or held, by reason of any act, matter, cause or thing relating to the OP A, as of the
Effective Date.
1.2.3 Waiver of Civil Code Section 1542. The releases contained in
this Section 1.2 extend to any and all claims, whether or not claimed or suspected by
either the Agency or Sunroad, to and including the Effective Date, and constitutes a
waiver of the application of each and all of the provisions of California Civil Code
Section 1542, which reads as follows:
"A general release does not extend to claims which the creditor
does not know or suspect to exist in his or her favor at the time
of executing the release, which if known by him or her must
have materially affected his or her settlement with the debtor."
:z - 3b
-&-
Initials of authorized Agency
representative
sunrff
Initials of authorized Sunroad
representative
Agency
1.2.4 Legal Counsel. The Agency and Sunroad each acknowledge that
the import of the provisions of Civil Code Section 1542 were explained to it by its own
legal counsel and that it understands the same.
1.2.5 Changed Circumstances. The Agency and Sunroad each
expressly acknowledge and agree that the facts with respect to which the releases
contained in this Section 1.2 are given may subsequently turn out to ~eother than or
different from the facts in that connection now known or believed to be true and each
expressly assumes the risk of the facts turning out to be different, and agrees that the
releases contained in this Section 1.2 shall be in all respects effective and not subject to
tennination or rescission by reason of any such difference in facts. Sunroad and Agency
acknowledge the significance and the consequence of such a specific waiver of unknown
claims and each assumes full responsibility for any injuries, damages, losses or liabilities
that it may incur in the future as a result of the releases contained in this Section 1.2 of
said unknown claims.
1.3 Advice of Counsel. The Agency and Sunroad each represent and warrant
that in executing the releases contained in Section 1.2 it relied on legal advice from the
attorney of its choice, that the temlS of the releases contained in Section 1.2 and their
consequences were completely read and explained to the Party by that attorney and that
the Party fully understands the terms and consequences of the releases contained in
Section 1.2.
1.4 No Reliance. The Agency and Sunroad each acknowledge and represent
that, in executing the releases contained in Section 1.2, it did not rely on any
inducements, promises or representations made by any other party or person representing
any other Party to this Amendment, except as expressly set forth in this Amendment.
1.5 No Admission. The releases contained in Section 1.2 do not constitute an
admission of liability by either the Agency or Sunroad.
1.6 Representation of No Assignment. Sunroad represents and warrants that it
has made no transfer of the OPA, any interest in the OPA, or any demand, obligation,
liability, or cause of action arising out of the OP A. The Agency represents and warrants
that the Agency has made no transfer of the OPA, any interest in the OPA, or any
demand, obligation, liability, or cause of action arising out of the OP A.
1.7 Limitation Agencv Participation. Sunroad and Agency acknowledge and
agree that the Agency's only purpose and participation in this Amendment is for removal
of Agency as a party to the OPA.
'2--37
~.
2. CITY SUBSTITUTED AS PARTY TO OP A.
As of the Effective Date, the OPA is amended as reflected on Attachment] to this
Amendment. The Parties to this Amendment acknowledge that the purpose of the
Amendment is to remove the Agency as a party to the OPA and substitute the City in
place of the Agency with respect to the OP A. They further acknowledge that the
amendments to the OPA, as reflected on Attachment I, are intended to carry-out this
purpose.
3. GENERAL PROVISIONS
3.1 Incorporation of Recitals. The Recitals of fact preceding this Amendment
are true and correct and are incorporated into this Amendment, in their entirety, by this
reference.
3.2 Recordation. The City may record this Amendment in the Office of the
County Recorder of San Diego County, California.
3.3 Notices. Demands and Communications Between the Parties.
3.3.1 Notices. Any and all notices submitted by any Party to any other
Party pursuant to or as required by this Amendment shall be proper, if in writing and
transmitted to the address of the Party set forth in Section 3.3.2 by one or more of the
following methods: (a) messenger for immediate personal delivery, (b) a nationally
recognized overnight (one business day) delivery service (i.e., Federal Express, United
Parcel Service, etc.) or (c) registered or certified United States mail, postage prepaid,
return receipt requested. Such notices may be sent in the same manner to such other
addresses as either Party may designate, from time to time, by notice. Any notice shall
be deemed to be received by the addressee, regardless of whether or when any return
receipt is received by the sender or the date set forth on such return receipt, on the day
that it is delivered by personal delivery, on the date of delivery by a nationally recognized
overnight courier service (or when delivery has been attempted twice, as evidenced by
the written report of the courier service) or four (4) calendar days after it is deposited
with the United States Postal Service for delivery, as provided in this Section 3.3.
Rejection, other refusal to accept, the inability to deliver a notice because of a changed
address of which no notice was given, or other action by a person to whom notice is sent,
shall be deemed receipt of the notice by such person. Delivery of a notice to any courtesy
copy recipient shall not be a prerequisite to the validity or effectiveness of any Notice.
3.3.2 Addresses. The following are the authorized addresses for the
submission of notices to the Parties, as of the Effective Date:
To the City:
Citv Manager
City of Chula Vista
276 Fourth Avenue
Chula Vista. CA 91910
2-38
s--
To the Agency:
Executive Director
Chula Vista Redevelooment Agencv
276 Fourth Avenue
Chula Vista. CA 91910
To Sunroad:
Sunroad Enterorises
4445 Eastgate Mall. Suite 400
San Diego. CA 92121
Attn: Uri Feldman
3.4 Relationshio of Parties. The Parties each intend and agree that the City,
the Agency, and Sunroad are independent contracting entities and do not intend by this
Amendment to create any partnership, joint venture, or similar business arrangement,
relationship or association among or between them.
3.5 Non-liability of Officials. Emolovees and Agents. No elected official,
officer, director, employee or agent of either the City or the Agency, shall be personally
liable to Sunroad, or any successor-in-interest of Sunroad, in the event of any default or
breach by the City or the Agency under this Amendment or for any amount that may be
or become due to Sunroad, or any of its successors-in-interest, on any obligations under
the terms or conditions ofthis Amendment.
3.6 Interoretation. No inference in favor of or against any Party shall be
drawn from the fact that such Party has drafted any part of this Amendment. The Parties
have all participated substantially in the negotiation, drafting, and revision of this
Amendment, with advice from legal and other counsel and advisers of their own
selection.
3.7 Governing Law. The laws of the State of California shall govern the
interpretation and enforcement of this Amendment, without application of conflicts of
laws principles. The Parties acknowledge and agree that this Amendment is entered into,
is to be fully performed in and relates to real property located in the City of Chula Vista,
County of San Diego, State of California. All legal actions arising from this Amendment
shall be filed in the Superior Court of the State in and for the County or in the United
States District Court with jurisdiction in the County.
3.8 Binding on Successors and Assigns. This Amendment shall be binding
upon and inure to the benefit of the Parties and their respective legal representatives,
successors and assigns.
3.9 No Other Reoresentations or Warranties. Except as expressly set forth in
this Amendment, no Party makes any representation or warranty material to this
Amendment to any other Party.
2-34
...Q.-
3.10 Execution in Counteroarts. This Amendment may be executed in multiple
counterpart originals, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same document.
[Signatures blocks appear on the next page]
2-lfo
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SIGNATURE PAGE
TO
FIRST AMENDMENT OT OWNER PARTICIPATION AGREEMENT
The Parties have signed this Amendment by and through the signatures of their
authorized representatives, as set fOlih below:
CITY
SUNROAD
Dated:
CITY OF CHULA VISTA, a California
municipal corporation and charter city
By:
Cheryl Cox, Mayor
Dated:
ATTEST:
City Clerk
APPROVED AS TO FORM:
City Attorney
2-LfI
.-i-
AGENCY
REDEVELOPMENT AGENCY OF THE
CITY CHULA VISTA, a municipal
corporation
By:
Cheryl Cox, Chairman
Dated:
ATTEST:
Agency Secretary
APPROVED AS TO FORM:
Agency Counsel
2 -Lf 7-
-9-
CALIFORNIA ALL.PURPOSE ACKNOWLEDGMENT
. . . ...-.-.-.-.-.-.-.-.-.-.-.-.- ~
personally appeared
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Name(s) ofSigner(s)
State of California
County of SlAV! ):)1C:30
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Date
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Commllllon " 1625126
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who proved to me on the basis of satisfactory evidence to
be the person(st whose name(sl isfaFe subscribed to the
within instrument and acknowledged to me that
he/st-leitAey executed the same in hislRerltAeir authorized
capacityfiesj; and that by his/heritheir signature{st on the
instrument the person{5t; or the entity upon behalf of
which the persontsTacted, 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
WITNESS my ha
Place Notary Seal Above
Signature
OPTIONAL
Though the information below is not required by law, it may prove valuable to persons relying on the document
and could prevent fraudulent removal and reattachment of this form to another document.
Description of Attached Document
Title or Type of Doc/fe:t:fl d LA I drnerH-
Document Date: ~ ,; ( Lf) 2-008'
Signer(s) Other Than Named Above:
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Number of Pages:
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Signer's Name: [,1 VI' 1;;/ d mo VI
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J2I:: Corporate Officer - Titie(s): Ice (i CStderrf
o Partner - 0 Limited 0 General
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o Other:
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Signer's Name:
o Individual
o Corporate Officer - Title(s):
o Partner - 0 Limited 0 General
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D Guardian or Conservator
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RIGHT THUMBPRINT
OF SIGNER
RIGHT THUMBPRINT
OF SIGNER
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@2007National Notary Association. 9350 De Soto Ave., P.O. Box 2402 .Chatsworth, CA 91313-2402. www.NationaINotary.org Ilem #5907 Reorder: Call Toll-Free 1-800-876-6827
2-4-3
OWNER PARTICIPATION AGREEMENT
This OWNER PARTICIPATION AGREEMENT ("Agreement") is entered into by and
between the REDEVELOPMENT AGENCY OF THE CITY Of CHULf. VISTf., a J3al3lie
BElfry cSFJ3Elrate ami J3Ellitic ("f.GENCY"), Citv of Chula Vista. a California municipal
corporation and charter citv ("CITY:' or "Citv"), and Sunroad CV Auto, Inc.
("DEVELOPER"), dated and effective as of February_, 2005 ("Effective Date").
WHEREAS, the DEVELOPER desires to develop real property (APN 644-040-66 and
644-040-11) within the City of Chula Vista, generally located along the southerly side of Main
Street, east of Brandywine A venue and west of Maxwell Road, within the City of Chula Vista,
California ("Property"), as further described in the map attached hereto as Exhibit "A."
WHEREAS, a Master Owner Participation Agreement ("Master Agreement") was
previously executed and entered into on August 24, 2004 by and between the Redevelopment
Agencv of the Citv of Chula Vista ("AGENCY:l and Fred Borst, Borst Family Trust, Fask
Land, Inc. or permitted assignee ("Master DEVELOPER"), the Master DEVELOPER of
Property and other contiguous properties in the Auto Park East Specific Plan, setting forth
development standards and performance requirements for the Master DEVELOPER and
individual dealerships, including Property; and
WHEREAS, DEVELOPER shall comply with all applicable obligations, covenants,
and provisions of said Master Agreement, incorporated herein by this reference; and
WHEREAS, DEVELOPER has presented CITY/\GENCY plans for the development
of Property as a Toyota auto dealership ("Project") in accordance with the CITY's City of
Chula Vista's ("City") adopted Auto Park East Specific Plan ("Initial Entitlements"); and
WHEREAS, the Project is located entirely within the MERGED REDEVELOPMENT
PROJECT AREA within the jurisdiction of CITY f,GENCY; and
WHEREAS, in consideration of the specific operating .covenants and restrictive
covenants binding on DEVELOPER and set forth herein, CITYf,GENCY has agreed to make
certain payments to DEVELOPER; and
WHEREAS, CITY f.GENCY has determined it is of benefit to f,GENCY, the City,
and its citizens for the Property to be planned, developed, and operated in accordance with the
City's adopted Auto Park East Specific Plan ("Specific Plan"), and that the imposition of
certain operating covenants and restrictive covenants upon the Property for the uses set forth in
the Specific Plan constitutes a valid public purpose and objective of the CITY,'\GENCY's
ReacvelElJ3lReffi Plan fSf the Project area, and that this public purpose outweighs anv private
benefit to DEVELOPER and. hat this public purpose outweighs any private benefit to
DEVELOPER and, therefore, CITYAGENCY desires to obtain such operating covenants and
restrictive covenants on the Property and, subject to the terms hereof, DEVELOPER (for itself
and its successors and assigns of the Property or any part thereof) is willing to enter into and be
bound by such operating covenants and restrictive covenants; and
'2--4-4--
ATTACHMENT 1
WHEREAS, CITYi\GBNCY and DEVELOPER desire that the Project be developed in
accordance with the terms ofthis Agreement.
NOW, THEREFORE, CITY.\GBNCY and DEVELOPER do hereby agree as follows:
1. DEVELOPMENT OBLIGATION. DEVELOPER covenants and agrees by and for
itself, its heirs, executors, administrators and assigns and all persons claiming under or through
them the following:
A. DEVELOPER shall develop the Property with the Project substantially In
accordance with the CITYf.GENCY approved development proposal attached hereto as
Exhibit "B."
B. DEVELOPER shall obtain all necessary federal, state, and local
governmental permits and approvals and abide by all applicable federal, state and local laws,
regulations, policies and approvals in connection with the development of the Project.
DEVELOPER further agrees that this Agreement is contingent upon DEVELOPER securing
said permits and approvals. DEVELOPER shall pay all applicable development impact and
processing fees. Subject to applicable laws, CITY.\GBNCY staff agrees to exercise good faith
efforts to expedite the processing and final consideration of all entitlements and permits
necessary for the Project. DEVELOPER further agrees that construction shall be completed in
compliance with all applicable laws, labor standards, and Department of Industrial Relations
rules and regulations.
C. DEVELOPER shall apply for all necessary building permits to develop the
Project within one year from the date of this Agreement, shall diligently pursue obtaining such
building permits and shall actually develop the Property with the Project within one year from
the date of issuance of the building permits. In the event DEVELOPER fails to meet these
deadlines, CITYf.GBNCY approval of DEVELOPER's development proposals shall be void
and this Agreement shall have no further force or effect.
D. DEVELOPER shall comply with all conditions of approval of the Auto
Park East Specific Plan (PCM-02-1O) and the Design Review Committee (DRC-04-66), and
comply with the mitigation monitoring program adopted for Mitigated Negative Declaration
IS-02-01O.
II. MAINTENANCE OBLIGATION.
A. DUTY TO MAINTAIN FIRST CLASS CONDITION. DEVELOPER
covenants to develop and maintain the Property in First Quality, First Class Condition and
Repair consistent with development, maintenance and operation standards customary for first
quality, first class auto parks and first class quality automobile dealerships of comparable size
within the San Diego California market region and in conformity with the Initial Entitlement,
and the covenants, conditions, maintenance obligations and other restrictions therein during the
term of this Agreement. Additionally, DEVELOPER shall promptly and diligently repair,
restore, alter, add to, remove, and replace, as required, all improvements to maintain or comply
as above, or to remedy all damage to or destruction of all or any part of the improvements
except improvements dedicated to and accepted by the City. "First Quality, First Class
-2---.
ATTACHMENT 1
2 -4-6
Condition and Repair" means an efficient and attractive condition, at least substantially equal
in quality to the condition which exists when the improvements on the Property were
completed, ordinary wear and tear excepted, in accordance with all applicable laws and
conditions. "Dealership" shall mean any person or business of any nature selling, leasing, or
financing vehicles on the property.
B. DELEGATION OF REPAIR AUTHORITY. In order to enforce all above
maintenance provisions, the parties agree that the CITY's Citv Manager, or his or her designee,
("Citv Manager")CoIRHHlnity DeyeloJllReHt Directer of the City of ChHla ViGta ("Director") is
empowered to make reasonable determinations as to whether the Property is in a first class
condition and repair. In accordance with the Master Agreement:
1. If the Citv ManagerDirector determines the Property appears materially
different in terms of maintenance and upkeep than the remainder of the Auto Park, the Property
is not in conformity with the requirements of this Agreement regarding maintenance and
upkeep of the Project, DEVELOPER shall be notified in writing and provided a reasonable
time to cure and/or to commence to cure and diligently and continuously complete such cure.
2. If a cure or substantial and ongoing progress to cure has not been made, the
DirectorCitv Manager is authorized to effectuate the cure by City forces or otherwise, the cost
of which will promptly be due from and reimbursed by DEVELOPER.
3. The Director er the City City Manager or the CITY shall have the right to
enforce this lien by forwarding the amount to be collected to the San Diego Tax Assessor who
shall make it part of the tax bill for the Property.
III. NON-DISCRIMINATION COVENANTS. DEVELOPER covenants by and for itself
and any successors in interest (and each Dealership successor) that there shall be no
discrimination against or segregation of any person or group of persons on account of race,
color, creed, religion, sex, marital status, physical or mental disability or medical condition,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the Property, nor shall DEVELOPER itself or any person claiming under or
through it establish or permit any such practice or practices of discrimination or segregation
with reference to the selection, location, number, use or occupancy of tenants, lessees,
subtenants, sub lessees or vendees of the Property. The foregoing covenants shall run with the
land.
A-All deeds, leases or contracts with respect to the Property shall contain or be subject to
substantially the following nondiscrimination or nonsegregation clauses:
-hA. In deeds: "The grantee herein covenants by and for itself, its successors and
assigns, and all persons claiming under or through them, that there shall be no discrimination
against or segregation of, any person or group of persons on account of sex, marital status,
race, color, creed, religion, national origin or ancestry in the sale, lease, sublease, transfer, use,
occupancy, tenure or enjoyment of the land herein conveyed, nor shall the grantee itself or any
person claiming under or through it, establish or permit any such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
~
ATTACHMENT 1
2--tfh
occupancy of tenants, lessees, subtenants, sub lessees or vendees in the land herein conveyed.
The foregoing covenants shall run with the land."
;hB. In leases: "The lessee herein covenants by and for itself, its successors and assigns,
and all persons claiming under or through them, and this lease is made and accepted upon and
subject to the following conditions:
That there shall be no discrimination against or segregation of any
person or group of persons, on account of sex, marital status, race, color, creed,
religion, national origin or ancestry in the leasing, subleasing, renting, transferring, use,
occupancy, tenure or enjoyment ofthe land herein leased, nor shall lessee itself, or any
person claiming under or through it, establish or permit such practice or practices of
discrimination or segregation with reference to the selection, location, number, use or
occupancy of tenants, lessees, sub lessees, subtenants or vendees in the land herein
leased."
3. C. In contracts: "There shall be no discrimination against or segregation of any
person or group of persons on account of sex, marital status, race, color, religion, creed,
national origin or ancestry in the sale, lease, sublease, transfer, use, occupancy, tenure or
enjoyment of the land, nor shall the transferee itself or any person claiming under or through it,
establish or permit any such practice or practices of discrimination or segregation with
Reference to the selection, location, number, use or occupancy of tenants, lessees, subtenants,
sub lessees or vendees of the land."
IV. RESTRICTIVE OPERATING COVENANTS. DEVELOPER hereby covenants and
agrees (for itself and any and all successors in interest of the DEVELOPER entity, any and all
CITY.^.GENCY-approved assignees under this Agreement or any part thereof, and any and all
successors in interest to the Property or any part, portion, or parcel thereof, including any and
all CITYf.GENCY.approved transferees of the Property or any part, portion, or parcel thereof)
to the following covenants:
;\, DEVELOPER AND DEALERSHIP'S OPERATIONS. During the operating I
period, DEVELOPER shall do or cause to be done the following:
h&-For as long as operated as a new vehicle Dealership, to designate the Property as
the point of sale for sales tax purposes in all retail sales for vehicles whose sales originate from
the Property;
;hIL-At no cost to AGENCY or City, keep and maintain the Property and the
improvements thereon and all facilities appurtenant thereto, consistent with first class auto
parks and first class automobile dealerships, in good order and repair and safe condition, and
the whole thereof, the improvements, and landscaping in a clean, sanitary, and orderly
condition; and
~C. Comply with all governmental requirements but only to the extent a failure to
comply materially and adversely affects DEVELOPER's (or any successor's) ability to comply
with these covenants; provided, however, that DEVELOPER (nor its successors) do/does noto
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ATTACHMENT 1
1- -'17
waive its right to challenge the validity or applicability of any such governmental
requirements.
V. CONSIDERATION/PAYMENT FOR ANNUAL
RESTRICTIVE OPERATING COVENANTS.
COMPLIANCE
WITH
A. SALES TAX REVENUES AND RELATED DEFINITIONS. As used in this
Section, "Sales Tax Revenues" shall mean that portion of taxes derived and received by the
City and legally available for unrestricted use by the City's General Fund from the imposition
of the Bradley Burns Uniform Local Sales and Use Tax Law, commencing with Section7200
of the Revenue and Taxation Code of the State of California ("State"), as amended, or its
equivalent, arising from all businesses and activities conducted on the Property in accordance
herewith from time to time, which are subject to such Sales and Use Tax Law. As used in
herein "Retained Sales Tax" shall mean 1% of Sales Tax Revenues reported in the
DEVELOPER's quarterly sales and use tax report to the State and verified by the City minus
an amount equal to the payment described herein if any, paid to DEVELOPER herein.
B. CONSIDERATION. In consideration for DEVELOPER's agreement to be bound
by the Restrictive Covenants in Section IV of this Agreement, CITYf.GENCY agrees, as
follows:
1. CITY"\GENCY shall pay to DEVELOPER an amount equal to a portion
of the City's share of Sales Tax Revenues generated by Developer on a quarterly basis as
identified in the attached Exhibit "c" ("Disbursement"). The Disbursement will be based on
the sales tax information received from the State Board of Equalization which is available one
quarter after the submission of the DEVELOPER's quarterly sales/use tax report. The
Disbursement will be distributed each quarter, commencing with the first full quarter after
DEVELOPER has commenced operations during the term of the Restrictive Covenants until
the earlier of (i) the Seventh (7th) anniversary date of the first payment as identified in Exhibit
"c" or (ii) receipt by DEVELOPER of the aggregate amount of One Million Four Hundred
Thirty-five Thousand Dollars ($1,435,000) under this subsection.
a. The Disbursements due hereunder shall be payable from any
source of funds legally available to CITY,\GENCY. The determination of the source of funds
shall be in the sole and absolute discretion of CITYf,GENCY.
b. The amount of the Disbursement due on each such payment date
shall be determined by the City's sales tax consultants based on information provided by the
State Board of Equalization and verified by the City's Finance Department adjusted for any
corrections to previous tax reports made by the State Board of Equalization.
c. Sales Tax Revenues generated each period shall be determined as
follows:
tBlll-For sales of automobiles, parts and accessories, Sales Tax
Revenue shall be based upon the State Board of Equalization sales and use tax report(s)
applicable to a dealership at the Property during the applicable sales period; and
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ATTACHMENT 1
fBiliL"Sales of Automobiles" shall include all new or used
vehicles conveyed to any related or independent third party, including any financing company
for purposes of selling, leasing, or financing the vehicle to the end user.
WiliUUpon written request by CITY,\GENCY, DEVELOPER
shall promptly furnish to CITY/\GENCY any and all said information and take any and all
actions which are reasonably deemed necessary by CITY.\GE}!CY to assist CITY.\GENCY
in verifying the information contained in said sales and use tax returns and reports of new and
used vehicles. CITYf.GENCY shall be entitled to review and audit the Dealership's books and
records pertaining to the foregoing.
(1) If an audit of the Dealership's books and records
determines that DEVELOPER (or Dealership) has overstated revenues in any applicable
period, DEVELOPER shall reimburse CITYf.GENCY for any overpayment, and if
DEVELOPER has overstated revenues by more than ten percent (10%) in any period,
DEVELOPER shall reimburse CITYf.GENCY for the cost of the audit, within thirty (30) days
of notice thereof from CITY,^.GENCY.
(2) Reciprocally, DEVELOPER (or Dealership), at its
sole cost and expense, may request an audit to verify and/or reconcile the calculation of the
amount of any payment. If such audit reveals an underpayment to DEVELOPER (or a
Dealership), then CITY.\GENCY shall pay the outstanding amount of any payment hereunder
to be paid to the DEVELOPER (or Dealership); and if such audit reveals an overpayment to
DEVELOPER, then DEVELOPER immediately shall reimburse CITY.\GENCY for such
overpayment. If CITYf.GENCY has underpaid DEVELOPER by more than 10% as a result of
an error committed by the CITYf.GENCY, CITYf.GE~!CY shall reimburse DEVELOPER for
reasonable audit costs, within 30 days of notice thereof from DEVELOPER.
(3) If DEVELOPER contests the amount of Sales Tax
Revenues for any period for the sales of automobiles, parts, and accessories arising from the
dealership, as based upon the State Board of Equalization sales and use tax report applicable to
the Dealership and the Property, at the sole expense of DEVELOPER, then CITY/\GENCY
shall use good faith efforts to investigate and, if appropriate, to take steps to ensure that the
correct amount of Sales Tax Revenues arising from the dealership is allocated to the City, and
the correct amount of the period's payment is calculated and paid to DEVELOPER.
d. If after the fourth (4th) year payments, DEVELOPER has
received less than $1.1 million in compensation for compliance with the restrictive covenants
contained herein, DEVELOPER may request and CITYf.GENCY shall in good faith consider
modification to the payment schedule to ensure DEVELOPER receives fair and just
compensation for compliance with the restrictive operating covenants being purchased by the
CITY;\GENCY herein.
C. PAYMENTS. Upon DEVELOPER's satisfaction of the Conditions Precedent to
Disbursement set forth below, each payment shall occur within 180 days following the end of
the quarter ("Payment Date") based with respect to the applicable sales period. DEVELOPER
is aware and acknowledges that the determination of the Disbursement amount will be
determined and based upon the receipt by the City of the State Board of Equalization report
:.J;;..--
2-Lfc;
ATTACHMENT 1
within 90 days of the end of the applicable quarter. If the City fails to receive said report
within 90 days of the end of the applicable quarter, Payment Date shall be automatically
extended a number of days equal to the number of days delay in the City receipt of said report.
DEVELOPER is aware and acknowledges that as of the Effective Date of Agreement, CITY
intends that the State Board of Equalization report will be supplemented and summarized by an
outside third party fiscal consultant.
-hEach payment will be made within 180 days following the end of the quarter, except
as otherwise provided herein, based on the issuance and receipt by the City of the applicable
State Board of Equalization report/disbursement. DEVELOPER acknowledges each State
Board of Equalization report is also reviewed by fiscal consultant(s) to AGENCY and City.
DEVELOPER acknowledges and agrees that such fiscal consultant(s) will undertake
calculation of each payment and, thereafter, the calculation will be reviewed by the City's
Finance Department staff. Upon the City's receipt of each quarterly report, CITYf.GENCY
shall notify DEVELOPER in writing of the date of receipt and the anticipated date of delivery
of payment to DEVELOPER. CITYf.GENCY will use its best efforts to review and process
any and all payments due to DEVELOPER in a timely and expeditious manner.
D. CONDITIONS PRECEDENT TO DISBURSEMENT. Each payment
hereunder is conditioned upon the satisfaction by DEVELOPER of the respective conditions
precedent (1) through (9) inclusive, described below. Such conditions ("Conditions
Precedent") are solely for the benefit of CITYAGENCY, and shall be fulfilled by
DEVELOPER (or waived by CITYf.GENCY in its sole and reasonable discretion) within the
time periods provided for herein. DEVELOPER may satisfy (and submit evidence of such
satisfaction to the DireetorCitv Manager) one or more of such Conditions Precedent at any
time prior to the first payment, so that at the time the first payment is due, DEVELOPER may
have already provided satisfactory evidence of compliance with each of such Conditions
Precedent. Thereafter, for subsequent payments, DEVELOPER shall have been deemed to
have satisfied each of the respective conditions precedent which do not expire or contain a
recurring obligation, unless DEVELOPER fails to timely satisfy condition 7, below, in which
case CITY.^.GENCY may require renewal or update of any prior submittal.
1. Execution and Deliverv of Documents. This Agreement shall have been
recorded against the Property in the official records of San Diego County as an encumbrance to
the Property superior and non-subordinate to any monetary liens, including without limitation
construction and/or permanent financing.
2.
liability coverage.
Insurance. DEVELOPER shall have insurance, including general
3. Regulatory Approvals. Assuming no protests have been lodged against
the location and opening of the Dealership, DEVELOPER shall have obtained any legally
required regulatory approval(s) from applicable governmental agencvf.GENCY(ies) related to
DEVELOPER's ownership and operation of the applicable Dealership on the Property.
4. Manufacturer Approval. DEVELOPER shall have received any required
approval(s) from the manufacturer for the operation of the applicable Dealership on the
Property.
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2 -'50
ATTACHMENT 1
5. Consent of Owner for Recording of Agreement against the Property.
DEVELOPER shall obtain the written consent and/or agreement of each Dealership and each
lender allowing recordation of this Agreement against the Property in a superior and
non-subordinate position to all other monetary liens and use restrictions on the Property.
6. Payment of Property Taxes. No ad valorem real property taxes or
assessments assessed with respect to the Property shall be delinquent.
7. No Default. There shall exist no condition, covenant, event or act which
would constitute an event of default hereunder, or which, upon the giving of notice or the
passage of time, or both, would constitute an event of default.
8. Dealership Continuous Operation. The applicable Dealership on the
Property shall be in continuous operation and generating Sales Tax Revenues in compliance
with the Restrictive Covenants herein.
9. Environmental Condition of the Propertv. DEVELOPER shall not be in
default of the requirements regarding the environmental condition of the Property.
gE. NO PLEDGE OF TAXES. CITYf.GE"P'ICY's obligations hereunder are not,
shall not constitute, and shall not be construed as a pledge of funds by AGENCY or ilie City, iR
flartieular iliere is and shall Rot be a pledge of tal. iRerement purStlaRt to Health aRa Safety
Code SeetioR 33671, a pledge of City sales tax revenues, a pledge of any oilier sfleeifie
reveooes of /\.Gm'ICY, or a pledge of the City's general fund. All references to the Sales Tax
Revenue are intended solely to create an index for calculating the amount of the payments, and
shall not in any respect whatsoever be construed as a pledge of specific funds -.ill of CITY's
f.GENCY Ror the City's general fund. Nothing in the foregoing statement that there is and
shall be no pledge of specific funds hereunder, shall limit or diminish the CITY,'\.GENCY's
obligation to make payments required hereunder to DEVELOPER, assuming all Conditions
Precedent to such payment are satisfied.
EF. CAP ON CONSIDERATION. Notwithstanding anything else herein contained,
in no event shall the total consideration paid to DEVELOPER pursuant to this Section V
exceed the sum of One Million Four Hundred Thirty-Five Thousand Dollars ($1,435,000).
FG. NO ACCELERATION. It is acknowledged by the parties that any payments by
CITY,^.GENCY provided for herein may only be paid in those periods in which DEVELOPER
is in compliance with the Restrictive Covenants provided for herein. Upon CITY,'\.GENCY
satisfaction that DEVELOPER has come into compliance with the restrictive operating
covenants contained within Section V, CITY,'\.GENCY shall make any previously withheld
payments due pursuant to Section V. Therefore, the failure of CITYf.GENCY to make any
payments during the contribution term provided above shall not cause the acceleration of any
future payments by CITY,'\.GI'"J'ICY to DEVELOPER beyond the date of such default.
VI. SIGNAGE
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ATTACHMENT 1
1--6/
A. SIGN. Upon execution of this Agreement, CITY}"GENCY shall diligently
pursue the construction of an auto park directional sign along Auto Park Drive in the vicinity
of the eastern boundary of Interstate 805 ("Sign"). The Sign will be professionally designed
utilizing auto park industry standards. At this time, such standards may include a permanent
display with space for a listing of each make of auto dealership that constructs an auto
dealership within the Auto Park, including but not limited to Toyota and Scion, and an
electronic reader board. The Sign will be designed by the CITY}<GENCY in consultation with
the Association or with Master Developer and existing dealers if the Association has not yet
been formed.
B. CITY}<GENCY recognizes that the DEVELOPER believes it is critical that the
Sign be erected before the date upon which DEVELOPER opens the Project to the public. As
a result of that acknowledgment CITY,'\GEI'ICY will use its best efforts to timely identify a
location for and design of the Sign. Additionally, CITY,'\GENCY will in good faith use all
reasonable means necessary to procure the appropriate interest in land.
C. Concurrently with site identification CITY,'\GENCY will diligently pursue design
and construction consultants to erect said Sign. To that end, Agency has identified the
following target dates for the sign:
DATE
ACTION
Jul ,2005
September,
2005
October, 2005
City hires consultant to recommend potential location and design of
the Auto Park Directional sign.
Propose ~. t Park Directional sign complete and
otential sites identi led
Auto Dealers Association! City staff select design and proposed
location
DRC and City Council Review and Approval of Design and
location
Begin ac uisition rocess
Acquisition of site
February, 2005
April, 2005
May, 2005
June, 2005
Be in construction
D. DEVELOPER acknowledges and agrees that this Agreement does not bind the
CITY,^<GENCY to enter into any agreement or to take any particular action related to said Sign
and that the CITY}"GENCY's failure to enter an agreement with a consultant to pursue
installation or construction of said Sign shall not constitute a breach of this Agreement. In this
regard, the CITY,^<GENCY undertakes no obligation to DEVELOPER hereunder and retains
its sole and unfettered discretion to adopt any resolutions and does not prejudge or commit, in
any respect whatsoever, to the DEVELOPER, or any other person or entity, regarding said
Sign. DEVELOPER understands that the ,'\GEI'ICY aad City expressly and intentionally
reserve~ the right to exercise itstheif discretion as to all matters which it istkey are, by law,
entitled or required to exercise itstheif discretion.
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ATTACHMENT 1
2-62..
E. DEVELOPER retains its discretion to apply for and pursue construction of the
above identified .s.sign. If after consultation with the CITY.\GBNCY, DEVELOPER and
CITY,\GENCY reasonably determine CITY.\GBNCY is unable or unwilling to erect said sign
and DEVELOPER pursues private construction of said .s.sign, DEVELOPER may request and
CITYf,GBNCY shall in good faith consider providing appropriate assistance to DEVELOPER.
DEVELOPER acknowledges and agrees that any assistance provided to DEVELOPER shall
not exceed $1.2 million for the .s.sign. If the CITYf.GENCY determines assistance is
appropriate, at least 30 days prior to DEVELOPER expending funds for the erection of the
.s.sign, DEVELOPER and CITY,\GBNCY shall meet to determine the amount and form of said
assistance and to devise a mutually acceptable payment schedule.
F. If the DEVELOPER chooses to pursue the erection of the .s.sign, the
CITYf.GENCY acknowledges that DEVELOPER may request additional funds associated
with land acquisition and financing of the sign. DEVELOPER acknowledges CITYf,GBNCY
has made no commitment as it relates to acquisition or financing costs but will in good faith
consider said request.
VII. MISCELLANEOUS.
A. CITY:\GENCY and DEVELOPER agree that the covenants of the
DEVELOPER expressed herein shall run with the land for the duration of the term of the
MERGED REDEVELOPMENT PROJECT AREA, as it may be amended from time to time.
B. DEVELOPER and CITYf,GB]>!CY agree to mutually consider reasonable
requests for amendments to this Agreement which may be made by lending institutions,
CITY,\GBNCY's counsel, or DEVELOPER's counsel provided such requests are consistent
with this Agreement and would not substantially alter the basic business terms included herein.
The Citv ManagerDireetor shall have the authority to issue interpretations, waive provisions
and enter into amendments of this Agreement on behalf of the CITY,\GENCY so long as such
actions do not substantially change the uses permitted for the Project or the terms and
provisions specified herein and as agreed to by the Citv CounciL^.gency Board. All other
waivers or amendments shall require the consideration and written consent of the Citv
Councilf.GENCY Board.
WC. It is understood the schedule and outside dates for performance under this
Agreement are subject to all of the terms and conditions set forth in the text of this Agreement.
CITYf.GENCY vests in the Citv ManagerElleelltive Direetar the sole and complete discretion
to authorize extensions to the outside dates set forth herein for (i) application for all necessary
permits to develop the Project, and (ii) development of the Project; provided however, that in
no event shall any extension of any outside date referenced in (i) and/or (ii) of this subsection,
or all extensions taken together, exceed eighteen (18) months. Additionally, each and every
extension is also subject to the following provisions.
(i) Each extension shall be mutually agreed upon in writing
between DEVELOPER (or a successor) and the El[eelltive DireetarCity Manager based on
extensions necessary due to changes in circumstances, market conditions relating to operation
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1.-63
ATTACHMENT 1
of first class, first quality automobile dealerships and franchises in Chula Vista, California, or
other factors not known by the parties as of the date of this Agreement.
(ii) Each request for an extension from DEVELOPER (or a
successor) of an outside date shall be in writing stating the requested extension period, the
reasons for such extension, the facts and circumstances related to the need for such extension,
and other information reasonably necessary for the Executive DirecterCitv Manager to
understand the basis for such request and the circumstances that did not exist as of the date of
this Agreement that necessitate such requested extension. The Executiye DireeterCitv
Manager is authorized to agree to make such revisions as he/she deems reasonably necessary
based on changes in circumstances or other factors not known as of the date of this Agreement.
In the event an extension is granted by the E)[eeutive DireetmCitv Manager, then the
performance tasks hereunder shall be extended by such period and any corresponding
extension necessary to correlate the times for performance hereunder are also reasonably
extended to correlate with the approved extension, as determined by the E)[ecutive
DireetorCitv Manager in his/her sole and absolute discretion.
D. CITY,'\GENCY and DEVELOPER agree that the covenants of the
DEVELOPER expressed herein are for the express benefit of the CITY. the AGENCY,-and for
all owners of real property within the boundaries of the MERGED REDEVELOPMENT
PROJECT AREA as the same now exists or may be hereafter amended. and the residents of the
CITY. CITY/\GENCY and DEVELOPER agree that the provisions of this Agreement may be
specifically enforced in any court of competent jurisdiction by the CITY,'\GENCY on its own
behalf or on behalf of any owner of real property within the CITY's iurisdictionthe bSlIlldaries
ef the M.ERGED REDEVELOPMENT PROJECT ,'\REf.. "Notwithstanding the foregoing or
anything else in this Agreement, nothing in this Agreement shall be construed to accord any
party not a party to this Agreement third-party beneficiary status under this Agreement, and
nothing in this Agreement shall be construed to accord any party not a party to this Agreement
any right to enforce any provision ofthis Agreement."
E. ,'\GENCY CITY and DEVELOPER agree that this Agreement may be recorded
by CITY.'\GENCY in the Office of the County Recorder of San Diego County, California.
F. DEVELOPER shall and does hereby agree to indemnify, protect, defend and
hold harmless AGENCY and the CityCITY, and their respective Council members, officers,
employees, agents and representatives (collectively, the "Indemnified Parties"), from and
against any and all liabilities, losses, damages, demands, claims and costs, including court
costs incurred as result of any administrative or regulatory action, and reasonable attorneys'
fees (collectively, "liabilities") arising, directly or indirectly, from (a) CITY'sf.GE]'>ICY'S
approval of this Agreement, (b) AGENCY's or CITYity's approval or issuance of any other
permit or action, whether discretionary or non-discretionary, in connection with the Project
contemplated herein, and (c) DEVELOPER's construction and operation of the Project
permitted hereby.
G. In the event that any court action or other legal proceeding is brought by any
person not a party to this Agreement to challenge this Agreement, the granting of any
entitlements, the purchasing of the operating covenant or the fulfillment of any condition to the
obligations of the parties hereto, and without regard to whether or not the DEVELOPER. the
...H-"'
ATTACHMENT 1
2-64
CITY or the AGENCY is a party to said action or proceeding, DEVELOPER and
CITYf.GENCY shall meet and confer to discuss how to respond to such challenge. If the
parties agree to defend against such challenge, or defense costs are otherwise reasonably
incurred by AGENCY or the City prior to such determination, DEVELOPER shall indemnify
the AGENCY and CITYtae City for all expenses, including attorneys' fees, to defend CITYtfie
Gity or the AGENCY from any claim, action or proceeding against the CITYGity, the
AGENCY or their agents, officers, or employees to attack, set aside, void or annul the approval
of this Agreement or the approval of any entitlements or the purchasing of the operating
covenants or condition to the obligations of the parties hereto. f.GENCY aria CITYtfl.e City
shall promptly notify DEVELOPER of any such claim, action or proceeding. For purposes of
this Section, DEVELOPER acknowledges that the term "attorneys' fees" includes the
reasonable costs incurred by CITYtae City or AGENCY in the defense of any claim, action or
proceeding by the City Attorney or her staff.
H. In the event of any dispute between the parties with respect to the obligations
under this Agreement that results in litigation, the prevailing party shall be entitled to recover
its reasonable attorney's fees and court costs from the non-prevailing party.
1. Time is of the essence for each and every obligation hereunder.
J. If DEVELOPER fails to fulfill its obligations hereunder after due notice and
reasonable opportunity to cure, DEVELOPER shall be in default hereunder, and in addition to
any and all other rights and remedies CITYf.GENCY may have, at law or in equity,
CITYAOgNCY shall have the right to terminate its approval of the Project and this
Agreement.
K. If a party to this Agreement fails to timely satisfy a material obligation under
this Agreement as the time for performance may have been extended in its sole discretion
pursuant to Section VII.C and/or Section VIIJ of this Agreement (such party, a "Defaulting
Party", and such failure to timely perform, an "Event of Default"), then the other party to this
Agreement (the "Non-Defaulting Party") may provide the Defaulting Party written notice of
such Event of Default (a "Default Notice"). Upon the Defaulting Party's receipt of a Default
Notice, the Defaulting Party shall have ninety (90) days within which to cure the Event of
Default, or if such Event of Default is of a nature that it cannot be cured within such 90-day
period, then to begin to effect such cure and diligently pursue completion of performance in the
shortest, commercially reasonable time period (the "Cure Period"). Except as otherwise
provided within this Agreement, neither party to this Agreement may proceed against a
Defaulting Party, nor cease to itself timely perform each and every obligation due under this
Agreement, unless and until a Defaulting Party has failed to cure the Event of Default within
the applicable Cure Period. If the Defaulting Party fails to cure the Event of Default within the
applicable Cure Period, then in addition to any and all other rights and remedies the Non-
Defaulting Party may have, at law or in equity, the Non-Defaulting Party may terminate this
Agreement.
L. The qualifications and identities of the individuals comprising the
DEVELOPER entities are of particular concern to the CITY.^.GgNCY. It is because of those
qualifications and identities that the CITY:\GENCY has entered into this Agreement with the
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2--55
ATTACHMENT 1
DEVELOPER. No voluntary or involuntary successor in interest of the DEVELOPER shall
acquire any rights or powers under this Agreement except as expressly set forth herein.
(i) DEVELOPER shall not, except as permitted by this Agreement, assign
or attempt to assign this Agreement or any right herein with respect to the Project, nor make
any total or partial sale, transfer, conveyance or assignment of the whole or any part of the
Property Site or the improvements thereon, without prior written approval of the
CITYAGENCY in its sole discretion. Any attempted transfer that has not been so approved by
CITYf,GENCY shall be void. Except as permitted below, transfers of any interest in the
DEVELOPER entity shall constitute a prohibited transfer hereunder.
(ii) Notwithstanding any other provisions ofthis Agreement to the contrary,
CITY.^.GENCY approval of an assignment of this Agreement or any interest herein shall not
be required in connection with any of the following:
(a) Any transfers among the principals of the DEVELOPER entities
so long as the existing principals thereof shall be and remain in management control of the
DEVELOPER entity with at least a fifty-one percent (51 'Yo) ownership or beneficial interest in
the DEVELOPER entity.
(b) The granting of temporary or permanent easements or permits to
governmental or quasi-governmental agencies to facilitate the development of the Property, or
any component thereof.
(iii) CITYf.GENCY consent will be granted if:
(a) the proposed assignee/transferee expressly assumes, in writing,
Master DEVELOPER's obligations hereunder as to times following the effective date of the
assignment or transfer;
(b) the proposed assignee/transferee has demonstrated to the
reasonable satisfaction of CITY.^.GENCY that such person or entity has adequate financial
capacity to fulfill all obligations of this Agreement.
(M) Notwithstanding the foregoing or anything else in this Agreement, all dates for
performance set forth in this Agreement are subject to a one (1) day extension for each day of
delay in performance due to a Force Majeure Event, provided that the party claiming the right
to such extension provides the other party written notice of the Force Majeure Event within
thirty (30) days following the occurrence of such event. As used in this Agreement, "Force
Majeure Event" means any act of God, act or omission of any local, state, or federal
governmental /\GENCY agencv (including, without limitation, the AGENCY and the
CITYGity, and including without limitation, the failure or refusal of any such agencv,^.GENCY
to grant, issue or enact any entitlement, approval, or permit necessary for the use, development
or disposition of the Property or any portion of the Property), casualty, stormy or inclement
weather, epidemic, war, terrorism, insurrection, riot, fire, flood, earthquake, strike, boycott or
other labor dispute, delay in transportation, unavailability or scarcity of labor or materials and
any legislative, administrative or judicially imposed restriction upon or prohibition against
construction or development.
.-J.V"
1--?~
ATTACHMENT 1
Signature Page Follows
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2-67
ATTACHMENT 1
,^.RTICLE 4 Signature Page
IN WITNESS WHEREOF THE PARTIES HAVE ENTERED INTO THIS
AGREEMENT EFFECTIVE AS OF THE DATE FIRST WRITTEN ABOVE.
"CITY,^.GENCY"
CITY OF CHULA
VISTAREDEVELOPMENT ,^.GE}!CY OF
THE CITY OF CHUU. VIST,'\., a
California municipal corporation and charter
illypwlic sedy C6l'fleFate ana pelitic
DATED:
By:
Stephen C. Padilla, MavorCbaifHIaB
ATTEST:
City Clerk APPROVED AS TO FORM BY:
Ann Moore
CITY,\GENCY Attorney
"DEVELOPER"
SUNROAD CV AUTO, INC.
DATED:
By:
Uri Feldman, Vice President
NOTARY: Please attach acknowledgment card(s).
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1--68
ATTACHMENT 1
RESOLUTION NO. 2008-
JOINT RESOLUTION OF THE CITY COUNCIL AND THE
REDEVELOPMENT AGENCY OF THE CITY OF CHULA
VISTA APPROVING AN AMENDMENT TO THE OWNER
PARTICIPATION AGREEMENT WITH SUNROAD CV AUTO,
INC.; AND APPROPRIATING FUNDS ACCORDINGLY
WHEREAS, on February 15, 2005, the Redevelopment Agency of the City of Chula
Vista considered, approved and entered into an Owner Participation Agreement with Sunroad
CV Auto, Inc. ("Sunroad") (the "OPA"); and
WHEREAS, the purpose of the OPA was to guide the operation and maintenance of a
"first quality, first class" Toyota dealership in the City of Chula Vista; and
WHEREAS, adoption of the proposed resolution will amend the OPA to substitute the
City as a party to the OPA, in place of the Agency; and
WHEREAS, the Amendment would not alter any of the substantive terms of the OP A;
and
WHEREAS, the terms and principles of the original OPA would not be changed by the
Amendment but, rather, would remain the same as those that were approved by the Agency in
2005; and
WHEREAS, Community Development staff has determined that the OP A serves a public
purpose, in that, Sunroad's development and maintenance of the Toyota dealership has resulted,
or will likely result, in the following benefits to the City and its residents:
1. Public improvements, at Sunroad's expense, which will become City property,
including curb, gutter, sidewalk, driveway, ramp and sewer improvements, with
an estimated value in excess of $200,000;
2. Increased business development in the City, including additional auto dealerships;
3. Creation of additional job opportunities for City residents;
4. Additional tax revenue to the City, which will assist the City in providing public
services to its residents; and
5. Development, planning and operation of the Toyota dealership in accordance with
the City's adopted Auto Park East Specific Plan and with the operating and
restrictive covenants contained in the OP A;
and
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Resolution No. 2008-
Page 2
WHEREAS, the OPA provides for certain payments to be made to Sunroad, based on the
sales tax revenues generated by the Sunroad project; and
WHEREAS, those payments are in exchange for the various development, maintenance
and operating covenants agreed to by Sunroad in the OPA; and
WHEREAS, the covenants remain in place and would not be altered by the Amendment;
and
WHEREAS, to date, the amount due under the OPA is $548,334; and
WHEREAS, adoption of the resolution would approve the Amendment and appropriate
$548,334 to be paid to Sunroad in accordance with the OPA.
NOW, THEREFORE BE IT RESOLVED, that the City Council and the Redevelopment
Agency of the City of Chula Vista approve the "First Amendment to Owner Participation
Agreement with Sunroad CV Auto, Inc.," a copy of which shall be kept on file in the Office of
the City Clerk.
BE IT FURTHER RESOLVED, that the City Council and the Redevelopment Agency of
the City ofChula Vista appropriate $548,334, accordingly.
Presented by
Approved as to form by
Ann Moore
General Counsel/City Attorney
Cc~
Ann Moore
General Counsel/City Attorney
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