REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF REDONDO BEACH AND
SOUTH BAY ASSOCIATES SPE, LLC
This Reimbursement Agreement (the "Agreement') is made and entered into this 16th day of December, 2014 (the "Effective Date"), by and between the City of Redondo Beach (" City") and South Bay Associates SPE, LLC ("South Bay").
RECITALS
WHEREAS, South Bay is the owner of a shopping center known as the South Bay Galleria in the City of Redondo Beach which South Bay proposes to redevelop into a mixed- use development including retail, hotel and residential uses (" Proposed Project'); and
WHEREAS, South Bay is prepared to reimburse costs incurred by City to fund the environmental analysis pursuant to the California Environmental Quality Act CEQA," Pub. Resources Code, §§ 21000 et seq.) for the Proposed Project; and WHEREAS, CEQA and the CEQA Guidelines ( 14 Cal. Code Regs., §§ 15000 et seq.) provide that City may contract with a private consultant to prepare the environmental review of the Proposed Project ( CEQA, § 21082. 1, subd. ( a); CEQA Guidelines, § 15084, subd. ( d)( 2)); and
WHEREAS, CEQA authorizes City to collect fees from project applicants to recover the costs for the preparation and processing of environmental review of the Proposed Project (CEQA, § 21089, subd. (a)).
NOW, THEREFORE, in reliance on the foregoing recitals and in consideration of the mutual covenants set forth herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, City and South Bay hereby agree as follows:
AGREEMENT
NO WAIVER OF CITY'S DISCRETIONARY AUTHORITY.
A. South Bay and City acknowledge and agree that the Planning Commission and City Council retain all discretion granted to them under law in considering the Proposed Project and that nothing in this Agreement is intended to limit their discretionary powers or waive any third party procedural due process rights.
2. TERM AND TERMINATION OF AGREEMENT.
A. The term of this Agreement shall commence upon the Effective Date and shall terminate upon the Termination Date. For purposes of this Agreement, the "Termination Date" shall mean thirty (30) days after the date the City takes its last discretionary action Page t of 9
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on the Proposed Project unless terminated sooner upon notice by either South Bay or City effective as set forth below. At any time, the City or South Bay may withdraw from this Agreement by notifying the other party in writing, which withdrawal shall terminate this Agreement and be without liability or penalty. The effective date of the termination shall be as set forth in Section 8. D. below. Should the decision be made by City or South Bay to terminate this Agreement and after proper notice has been given in accordance with Section 8. D. below, City shall immediately cease work on the environmental review of the Proposed Project, shall instruct its environmental consultant and outside legal counsel to cease all work including on the environmental review, and shall cease all other technical assessments relating to the Proposed Project. In no event shall either party be reimbursed by the other for any further costs incurred after the effective date of such termination that relate to the environmental review of the Proposed Project.
3. ENVIRONMENTAL REVIEW; CONSULTANTS: PAYMENT
A. All environmental review for the Proposed Project shall be prepared in accordance with all applicable federal, state, city laws, regulations and statutes, including CEQA.
B. City will enter into an agreement with an environmental consultant of City's choosing to prepare the environmental review of the Proposed Project pursuant to CEQA. City will also enter into an agreement with outside legal counsel to assist City in preparing the environmental review in compliance with CEQA and any transactional work. The environmental consultant and outside legal counsels hired by the City shall collectively be known as " Consultants". City shall provide copies of the executed agreements to South Bay.
C. For purposes of this agreement, " environmental review" shall refer to all work performed by City's Consultants and City staff in conducting the City' s environmental review of the Proposed Project as required by CEQA and other applicable laws.
D. Subject to the limits set forth below, South Bay agrees to reimburse all costs and fees incurred by City in preparing the environmental review of the Proposed Project by the Consultants and City staff. Costs and fees for which South Bay shall be responsible shall include costs and fees for the services of the Consultants in preparing the environmental review of the Proposed Project and City staff time. City agrees to provide a copy of the environmental consultant's bills to South Bay within ten ( 10) days of receipt by City and City agrees to provide a copy of the legal counsel' s invoice to South Bay within ten ( 10) days of receipt by City. The legal counsel invoices provided to South Bay shall include the number of hours spent and the hourly rate without violating attorney-client privilege and confidentiality between the City and its attorney or such other privileges allowed by law. The maximum reimbursement amount South Bay agrees to pay under this Agreement shall be $602,960. In the event the fees and costs will exceed the amounts stated above, this Agreement must be amended by the parties to reflect the additional amounts as agreed to by the parties before such additional fees
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and expenses are incurred. All work shall be suspended pending the parties reaching an agreement for the additional amounts.
E. Attached as Exhibit A is the Scope of Services which identifies the services to be performed and to the extent possible the identity of Consultants and the estimated cost for their services. City reserves absolute discretion as to the selection and hiring of any Consultants not specifically identified in Exhibit A.
F. Within 14 days after the Effective Date, South Bay shall make a payment of one hundred fifty thousand dollars ($ 150,000) to City as an advance on City' s costs and fees for the environmental review by Consultants ("Advance").
G. Following commencement of preparation of the environmental review of the Proposed Project, City shall periodically request, as needed ( but in no event if the Advance is sufficient to pay such fees and costs), that South Bay provide City with further payments for the costs and fees incurred in preparing the environmental review.
Such payments shall be made within 14 days of City's request.
H. In the event that, for any reason, South Bay does not provide City with payments requested within the timeframe set forth in paragraph ( F), above, City reserves the right to cease environmental review of the Proposed Project.
I. City agrees that, within thirty ( 30) days after completion of the environmental review or termination of this Agreement, City will return to South Bay any funds paid by South Bay that were not spent ( this does not include expenses incurred by City prior to the effective date of termination) by City on the environmental review of the Proposed Project and provide South Bay with an accounting of such fees and expenses.
4. LEAD AGENCY'S INDEPENDENT JUDGMENT REGARDING
ENVIRONMENTAL REVIEW.
A. City's decision to approve or deny the project application, and City's determinations pursuant to CEQA, must reflect the lead agency's independent judgment. ( CEQA, § 21082. 1( c); 14 Cal. Code Regs., § 15084.) Accordingly, final responsibility and final authority on all questions concerning the content and quality of the environmental review of the Proposed Project lies in City' s sole discretion. South Bay understands and agrees that the environmental consultant and outside counsel only owe a duty to City, and not to South Bay or to any other third -person or entity.
South Bay agrees that the adequacy of performance of the environmental consultant and the extent of payment to the environmental consultant for its work shall be determined at the sole discretion of City.
B. South Bay is expressly prohibited from directly or indirectly exercising any supervision or control over any employee, agent or Consultant of the City involved in the Project. This prohibition shall not be construed to preclude South Bay, its agents or representatives, from providing information to the City or any employee, agent or
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Consultant of the City for incorporation into the Project, or from seeking information from the City, or any employee, agent or Consultant of the City with respect to the Project.
C. South Bay's advance of funds shall not be dependent upon the City's approval or disapproval of any of South Bay's application( s), or upon the result of any action, and shall in no way influence the Project. Neither South Bay nor any other person providing funding for the Project shall, as a result of such funding, have any expectation as to the outcome of any application or the selection of an alternative favorable to or benefiting Developer.
5. INFORMATION SHARING.
A. The City and the South Bay both seek to ensure environmental documents are prepared in compliance with CEQA. Similarly, the City and the South Bay both seek to ensure that all potential land use entitlements are processed in compliance with all applicable laws, including but not limited to the City's Municipal Code. The City and South Bay therefore may agree to share information, as reasonably necessary to accomplish their common goals and interests, without waiver of the Attorney Client Privilege, Work Product Doctrine, or other applicable privileges (" Joint Defense and Common Interest Doctrine"). South Bay agrees to provide City with all information regarding the proposed Project, including a description of the proposed Project, as may be reasonably requested by City.
B. City and South Bay shall meet on a regular basis or as requested by either party to discuss the progress of the environmental review.
6. COMMUNICATIONS.
A. South Bay agrees that neither South Bay, nor its employees or agents will contact the environmental consultant or City's outside legal counsel in connection with the Proposed Project without prior approval from City, except that South Bay's attorneys may contact City's outside legal counsel.
6. NO CONFIDENTIALITY.
A. The parties may reveal all or part of this Agreement to others as required by law.
7. ASSIGNMENTS.
A. South Bay may not assign its rights under this Agreement to any third party but may assign the entire Agreement to any subsidiary or affiliate of South Bay. Any assignment by South Bay shall not relieve South Bay from its duties hereunder. Any prohibited assignment or purported assignment shall be null and void, and South Bay shall bear sole responsibility for any consequences resulting from such prohibited or purported assignment. City may not assign its rights under this Agreement.
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8. MISCELLANEOUS.
A. Applicable Law. This Agreement will be governed by and constructed under the laws of the State of California without regard to conflicts of laws principles.
B. Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original copy and all of which, when taken together, will be deemed to constitute one and the same document, which shall be binding and effective as to each of the parties hereto. A facsimile shall be deemed to be an original.
C. Legal Capacity. Each individual executing this Agreement hereby represents and warrants that he has the capacity set forth on the signature pages hereof with the full power and authority to bind the party on whose behalf he is executing this Agreement to the terms hereof.
D. Notice. The following addresses shall serve as the locations to which notices and other correspondences between City and South Bay shall be sent which notices shall be effective one ( 1) business day after being sent by overnight courier or personal delivery, return receipt requested:
To the City: Michael W. Webb
City Attorney
City of Redondo Beach
415 Diamond Street
Redondo Beach, CA 90277
With a copy to: Community Development Director
City of Redondo Beach
415 Diamond Street
Redondo Beach, CA 90277
To South Bay: Kenneth Lee
South Bay Associates SPE, LLC
949 South Hope Street
Los Angeles, CA 90015
With a copy to: South Bay Associates SPE, LLC
Terminal Tower
50 Public Square, Suite 1360
Cleveland, Ohio 44113
Attention: General Counsel
2 F
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WITNESS WHEREOF, the parties hereto have executed this Reimbursement Agreement as of the Effective Date.
THE CITY OF REDON
Date: I l0 2c I
ATTEST:
N A 1- N 0U
Eleanor Manzano, City Clerk
APPROVED AS TO FORM:
4'411't "
Of
Michael W. Webb, City Attorney
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SOUTH BAY ASSOCIATES SPE, LLC,
a Delaware limited liability company
By: South Bay Associates, a California
limited partnership, its sole member
By: Forest Bay, Inc., an Ohio
corporation, its general partner
By: ` IcG iy D
Name: Duane F. Bishop,
Title: Vice President
12- 11- 2014
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SOUTH BAY ASSOCIATES SPE, LLC,
a Delaware limited liability company
By: South Bay Associates, a California
limited partnership, its sole member
By: Forest Bay, Inc., an Ohio
corporation, its general partner
0 Name:
Title:
Date:
aE> oPo .
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EXHIBIT A
PROJECT SERVICES
Service Provider of Service Estimated Cost of
Service
CEQA Consultant. City contract with
environmental consultants to prepare ESA 350,400
the environmental review of the Project
pursuant to CEQA, including all
subcontracts for technical studies and
contract planning services.
CEQA and Land Use Legal Counsel.
City contract with outside legal counsel Sohagi Law Group 150,000 to assist City in preparing the
environmental review in compliance
with CEQA and review of materials
related to the land use entitlement
process.
City Administrative Costs 15 percent City 52, 560
Real Estate Counsel/Advisors. City
contracts with outside legal counsel To Be Determined 50,000 and/ or financial advisors to assist City
in preparation of any transactional
work. Scope of work to be determined
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in consultation with Developer.
o PEONpo
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