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