Loading...
OSB 13-010RESOLUTION NO. OSB -13 -010 A RESOLUTION OF THE OVERSIGHT BOARD TO THE SUCCESSOR AGENCY OF THE POWAY REDEVELOPMENT AGENCY CONSENTING TO THE ASSIGNMENT AND ASSUMPTION OF DISPOSITION AND DEVELOPMENT AGREEMENT, AND AUTHORIZING THE EXECUTIVE DIRECTOR TO EXECUTE THE AGREEMENT, AND CANCEL THE PROMISSORY NOTE AND RECONVEY THE DEED OF TRUST UPON PAYMENT IN FULL OF THE PROMISSORY NOTE WHEREAS, the former Poway Redevelopment Agency (Agency) entered into a Disposition and Development Agreement (Development Agreement) with Ocean Park Hotels — PWY, LLC (Ocean Park) in 2006; and WHEREAS, through the Development Agreement, the Agency conveyed land located at the northeast corner of Scripps Poway Parkway and Stowe Drive for development and operation of what is now known as Poway Hampton Inn & Suites (Hotel) ; and WHEREAS, as part of the Development Agreement, the Agency carried a Promissory Note on the land, dated September 21, 2007, which is secured by a recorded Deed of Trust with Assignment of Rents, in the amount of $1,585,000; and WHEREAS; as required by the Development Agreement, Ocean Park and the Agency entered into an Operating Covenant and Reciprocal Easement Agreement (collectively the Associated Operating Agreements), which were recorded on September 25, 2010; and WHEREAS, the Development Agreement and Associated Operating Agreements were assigned to the City of Poway as Successor Agency to the Poway Redevelopment Agency (Successor Agency) upon Agency dissolution on February 1, 2012; and WHEREAS, Ocean Park has entered into a Purchase and Sale Agreement with Summit Hospitality 110, LLC (Summit) for the purchase of the Hotel, and provided notice of the proposed sale to the Successor Agency; and WHEREAS, the Development Agreement provides that the Successor Agency cannot unreasonably withhold approval of a proposed transfer; and WHEREAS, staff has evaluated Summit pursuant to the criteria set forth in the Development Agreement, including its current financial condition and past performance as a hotel owner, and concludes that Summit is a well - qualified buyer; and WHEREAS, as part of the sale transaction, the Promissory Note will be repaid and the Development Agreement and Associated Operating Agreements will be assigned to Summit through an Assignment and Assumption of Disposition and Development Agreement (Assumption Agreement), which is attached as Exhibit A. Resolution No. OSB -13 -010 Page 2 WHEREAS, the amount to be repaid on the Promissory Note is $2,330,303.51, which includes principal and interest on the loan through the close of escrow on October 8, 2013. WHEREAS, as a requirement of the Development Agreement, the Successor Agency must consent to and execute the Assumption Agreement in order to facilitate the transfer between Ocean Park and Summit. NOW, THEREFORE the Oversight Board of the Successor Agency to the Poway Redevelopment Agency does hereby resolve as follows: Section 1. The Oversight Board hereby finds and determines that the foregoing recitals are true and correct. Section 2. A duly noticed public meeting having been held, the Oversight Board hereby consents to the Assignment and Assumption of Disposition and Development Agreement, and authorizes the Executive Director to execute the Agreement, and cancel the Promissory Note and reconvey the Deed of Trust upon payment in full of the Promissory Note. Section 3. This Resolution shall take effect immediately upon its adoption. PASSED, ADOPTED and APPROVED by the Oversight Board to the Successor Agency of the Poway Redevelopment Agency at a regular meeting this 9th day of October, 2013. Bruce Tarzy Chair ATTEST: Sheila R. Cobian, CHIC, Secretary Resolution No. OSB -13 -010 Page 3 STATE OF CALIFORNIA ) COUNTY OF SAN DIEGO) I, Sheila R. Cobian, CIVIC, Secretary, Successor Agency to the Poway Redevelopment Agency, do hereby certify under penalty of perjury that the foregoing Resolution No. OSB -13 -010 was duly adopted by the Oversight Board to the Successor Agency of the Poway Redevelopment Agency at a meeting of said Oversight Board held on the 9th day of October, 2013 and that it was so adopted by the following vote: AYES: FONG- SAKAI, LYON, SCOTT, TAM, TARZY NOES: NONE ABSENT: LADERMAN, THOLANDI DISQUALIFIED: NONE Sheila R. Cobian, CIVIC, Secretary ASSIGNMENT AND ASSUMPTION OF DISPOSITION AND DEVELOPMENT AGREEMENT THIS ASSIGNMENT AND ASSUMPTION OF DISPOSITION AND DEVELOPMENT AGREEMENT ( "Assignment ") is made and entered into as of October 1, 2013 by and between OCEAN PARK HOTELS -PWY, LLC, a California limited liability company ( "Assignor ") and SUMMIT HOSPITALITY l 10, LLC, a Delaware limited liability company ( "Assignee "), with reference to the following: RECITALS A. Assignor and Poway Redevelopment Agency '(the "Agency ") entered into a Disposition and Development Agreement dated as of February 7, 2006 (which was thereafter modified by that certain First Amendment to Disposition and Development dated as of March 13, 2007 (the "First Amendment "); and that certain Second Amendment to Disposition and Development Agreement dated as of September 24, 2007 the "Second Amendment ")), as well as certain related amendments and other agreements pertaining thereto as set forth on Exhibit "A" to this Assignment (collectively, the "Development Agreement "). B. Concurrent with the initial execution of the Development Agreement, the Agency and Assignor entered into that certain Operating Covenant dated September 21, 2007 which was recorded in the Official Records of the County Recorder for the County of San Diego as Document No. 2007 - 0625813 (the "Operating Covenant'); and that certain Reciprocal Easement Agreement dated August 10, 2007, which was recorded in the Official Records of the County Recorder for the County of San Diego as Document No. 2007 - 0625814, which was thereafter amended, by that certain Amendment to Reciprocal Easement Agreement of undated date, which was recorded in the Official Records of the County Recorder for the County of San Diego as Document No. 2009 - 0402560 (together, the "Easement Agreement ", and collectively with the Operating Covenant, the "Associated Operating Agreements "); Assignor also gave to the Agency a Promissory Note dated September 21,2007 in the amount of $1,585,000, which was to be paid by Assignor in accordance with the terms of the Promissory Note and the Development Agreement, which was secured by that certain`Deed of Trust with Assignment of Rents dated September 21, 2007, which was recorded in the Official Records of the County Recorder for the County of San Diego as Document No. 2007 - 0625818 (collectively, the "Promissory Note "). C. Pursuant to the terms of the Development Agreement, as modified by the First Amendment and the Second Amendment, and the Associated Operating Agreements, the Agency conveyed certain real property located at the northeast corner of Scripps Poway Parkway and Stowe Drive in the City of Poway to Assignor for the purchase and construction, completion and operation of a hotel facility thereon. D. On June 28, 2011, the Governor signed Assembly Bill 26 ( "ABxI 26) and Assembly Bill 27 ("ABxI 27 "). ABxI 26 immediately suspended all redevelopment agency activities, except continued performance of "enforceable obligations," and set forth a process to dissolve redevelopment agencies and end redevelopment in California. ABxI 27 provided a "voluntary alternative redevelopment program," which would have allowed redevelopment agencies to remain in existence and continue redevelopment, if remittance payments were made to cover the State of California's budget shortfall for fiscal year 2011 -12 and were made in subsequent fiscal years to cover State costs. A lawsuit was filed, challenging the constitutionality of both ABxI 26 and 27. The 'California Supreme Court upheld the constitutionality of ABxI 26, revising the effective dates of certain provisions, and struck down as unconstitutional ABxI 27. (California Redevelopment Assn. v. Matosantos (2011) 53 Cal. 4" 231 ( "CRA Case ")). ABxI 26 added Part 1.8 (suspension provisions) and Part 1,85 (dissolution provisions) of Division 24 of the Health and Safety Code. Under the CRA Case, all redevelopment agencies were dissolved February 1, 2012. Pursuant to Health and Safety Code section 341710), added by Part 1.85 of Division 24, the City of Poway ( "City ") is the "successor agency" to the former Poway Redevelopment Agency. E. On June 27, 2012, the Governor signed Assembly Bill 1484 ( "AB 1484 "), which established that successor agencies are separate legal entities from the entities that provide for their governance. As a result of AB 1484, the successor agency to the former Agency is now formally the "City of Poway, solely in its capacity as Successor Agency to the Poway Redevelopment Agency" (the "Successor Agency ") and performs its functions as the successor agency to administer the enforceable obligations of the Redevelopment Agency and otherwise unwind the Agency's affairs, all subject to the review and approval by an initial seven - member oversight board and any county -wide oversight board that may succeed the initial oversight board and by the California Department of Finance. F. Assignor, concurrently with the delivery of this Assignment, is conveying to Assignee all of its right, title and interest in and that certain hotel property commonly known as the Hampton Inn & Suites San Diego - Poway, located at 14068 Stowe Drive, Poway, California, as more particularly described in the Purchase Agreement (the "Property"). G. Assignor and Assignee desire, as part of the conveyance of the Property, to convey to Assignee the Development Agreement, as modified by the First Amendment and the Second Amendment, the Promissory Note, and the Associated Operating Agreements. H. Pursuant to Section 603 of the Development Agreement, the conveyance of the Property requires the written consent of the Successor Agency, NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL AGREEMENTS HEREIN SET FORTH AND OTHER GOOD AND VALUABLE CONSIDERATION, the receipt and sufficiency of which are hereby acknowledged by each of the parties, Assignor and Assignee agree as follows: AGREEMENT 1. Assignment. From and after the date hereof, Assignor hereby GRANTS, SETS OVER, SELLS, TRANSFERS, CONVEYS, ASSIGNS and DELIVERS to Assignee, and its legal representatives, successors and assigns, all of Assignor's right, title, duties, obligations and interest in and to the Development Agreement, the Associated Operating Agreements and (so long as any principal and interest remains unpaid) the Promissory Note. 2. Acceptance and Assumption. Assignee hereby accepts such assignment, and assumes and agrees to keep, perform and be bound by all terms, covenants and obligations with respect to the Development Agreement, and the Associated Operating Agreements and (so long as any principal and interest remains unpaid) the Promissory Note, if any, which arise, accrue or are incurred on or after the date hereof. . 3. Indemnification. Assignor agrees to indemnify, hold harmless and defend Assignee from and against any and all third party obligations, liabilities, costs and expenses, and claims (including reasonable attorney fees) arising as a result of or with respect to the Development Agreement, the Associated Operating Agreements and (so long as any principal and interest remains unpaid) the Promissory Note, which are attributable to the period of time prior to the date hereof. Assignee agrees to indemnify, hold harmless and defend Assignor from and against any and all third party obligations, liabilities, costs and expenses, and claims (including reasonable attorney fees) arising as a result of or with respect to the Development Agreement, the Associated Operating Agreements and (so long as any principal and interest remains unpaid) the Promissory Note, which are attributable to the period of time including and following the date hereof. 4. Further Assurances. At any time or from time to time upon the request of a party, the other party shall execute such reasonable additional documents and instruments, and shall do such reasonable additional acts and things as the requesting party may reasonably request in order to fully effectuate the purposes of this Assignment. 5. Severability, if any term or provision of this Assignment or the application thereof to any persons or circumstances shall, to any extent, be invalid or unenforceable, the remainder of this Assignment or the application of such term or provision to persons or circumstances other than those as to which it is held invalid or unenforceable shall not be affected thereby, and each term and provision of this Assignment shall be valid and enforceable to the fullest extent permitted by law. 6. Counterpart Execution. This Assignment may be executed in multiple counterparts, each of which shall be deemed an original, but all of which, together, shall constitute one and the same instrument. 7. Governing Law. This Assignment shall be construed and enforced in accordance with the laws of the State of California, without regard to principles of conflict of law. [Signatures Appear on Following Page] IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment effective as of the Close of Escrow. "Assignor" OCEAN PARK HOTELS -PWY, LLC, a California limited liability company By:. James M. Flagg, Mahagin ember ",Assignee" SUMMIT HOSPITALITY 110, LLC, a Delaware limited liability. company By: Name: Its: [Consent Appears on the Following Page] IN WITNESS WHEREOF, Assignor and Assignee have 'executed this Assignment effective as of the Close of Escrow. "Assignor" OCEAN PARK HOTELS -PWY, LLC, a California limited liability company s James M. Flagg, Managing Member "Assignee" SUMMIT HOSPITALITY I10, LLC, a Delaware limited liability:company By: Name::Clrrs Its: S� [Consent Appears on the Following Page] CONSENT The undersigned hereby consents to the conveyance of the Property to Assignee and the assignment and assumption of the Development Agreement, the Associated Operating Agreements, and the Promissory Note as set forth in this Assignment. The undersigned hereby releases Assignor with respect to any obligations relating to the Property accruing from and after the date hereof. "Successor Agency" CITY OF POWAY SOLELY IN ITS CAPACITY AS SUCCESSOR AGENCY TO THE FORMER POWAY REDEVELOPMENT AGENCY, G A 1 92 1 310003\D0MG Y 1 803. DOCX Exhibit "A" 1.. Disposition and Development Agreement by and between Poway Redevelopment Agency and Ocean Park Hotels -PWY, LLC ( "OPH -PWY ") entered into as of February 7, 2006 2. First Amendment to Disposition and Development Agreement by and between Poway Redevelopment Agency and OPH -PWY entered into as of March 13, 2007 3. Letter dated September 14, 2007 from Poway Redevelopment Agency regarding plan check process 4. Second Amendment to Disposition and Development Agreement by and between Poway Redevelopment Agency and OPH -PWY entered into as of September 24, 2007 5. Memorandum of Disposition and Development Agreement dated August 10, 2007 by and between Poway Redevelopment Agency and OPH -PWY recorded September 25, 2007, Instrument Number 2007- 0625811