R-7245
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CED:PC
City Council Meeting 6-24-85
Santa Monica, California
RESOLUTION NUMBER 7245{CCS)
(city Council Series)
A RESOLUTION OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA APPROVING AN AGREEMENT
WITH SCHURGIN DEVELOPMENT CORPORATION
WHEREAS,
the City of Santa Monica is interested in
facilitating the development of a Full Service Market in the pica
Neighborhood; and
WHEREAS, the Schurgin Development Corporation is interested
in developing a Full Service Market in the pico Neighborhood if
City provides certain financial incentives to assist in the
economic feasibility of the Market; and
WHEREAS, the City of Santa Monica finds that the development
of such a market in the Pico Neighborhood is necessary to provide
essential services and is in the best interest of the city; and
WHEREAS, the city of Santa Monica finds that the Agreement
between the city of Santa Monica and Schurgin Development
Corporation is fair, just and reasonable;
NOW, THEREFORE, THE CITY COUNCIL OF THE CITY OF SANTA MONICA
DOES RESOLVE AS FOLLOWS:
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SECTION 1. The City Manager is authorized to execute the
Agreement between the City of Santa Monica and Schurgin
Development corporation attached to this Resolution.
SECTION 2. The amount of $180,000.00 is appropriated from
the unobligated General Fund Balance to a General Fund pico
Neighborhood Market Reserve Account. The Agreement referred to
in section 1 of this Resolution shall be an encumbrance against
such Reserve Fund.
SECTION 3. The City Clerk shall certify to the adoption of
this Resolution, and thenceforth and thereafter the same shall be
in full force and effect.
Approved as to form:
~'-.'- 1)~~
Robert M. Myers
city Attorney
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Adopted and approved thlS 24th day of June, 1986.
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I ~ r Mayor
I hereby certify that the foregolng Resolution No. 1245(CCS)
was duly adopted by the Clty Council of the City of Santa Monica
at a meeting thereof held on June 24, 1986 by the followlng
Councll vote:
Ayes: Councllmembers:
Conn, Epstein, Jennlngs, A. Katz,
H. Katz, Zane and Mayor Reed
Noes: Councilmembers:
None
Abstaln: Councllmembers:
None
Absent: Councllmembers:
None
ATTEST:
a~ -/}j~
Ci:ty Clerl\ --
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AGREEMENT
corporation
(herelnafter "CIty")}
thIS day of June,
SANTA MONICA, a muniCipal
and SCHURGIN DEVELOPMENT
THIS
1986} by
AGREEMENT} entered Into
and between the CITY OF
CORPORATION, a Callfornla corporatIon (hereInafter
11 Deve loperll), IS made WI th reference to the fo IlowIng:
R Eel TAL S:
A. CIty 15 a munICIpal corporatIon duly organIzed and
eXIstIng under the laws of the State of CalIFornIa WIth the
power
under
to carryon Its bUSiness as
It 15 now bezng conducted
the statutes of the State of CalIfornia end the Charter
of the City.
8. CIty 15 Interested In faCIlitating the development
of a Full SerVIce Market In the PIca NeIghborhood. The
development of a Full SerVIce Market In the PICa Neighborhood
IS necessary to prOVIde essentIal serVIces and 15 In the best
Interests of the CIty.
C. Developer IS Interested In developIng a Full Servlce
Market on property located In the PICO Neighborhood If City
prOVIdes certaIn fInanCIal
Agreement to assist In the
SerVIce Market.
IncentlVe& 85 set
forth In thiS
economIC
feaSIbIlIty of the Full
NOW, THEREFORE. It IS mutually ~greed by and between
CIty and Developer as follows:
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SECTrON 1. PROPERTY.
The ~ubJect property con515t~ of 2.2? acres, located In
the PICO Neighborhood at PICO Boulevard and Clover-field In
Santa Mon lca (the "Property"). The Property 15 present ly
owned by Smart & IriS Corporation and IS described In Exhibit
A. Developer has obtained an option to purchase the Property.
SECTION 2.
DEFINITIONS.
For purposes of this Agreement, the follOWIng words or
phrases shall have the follOWIng meanings:
(a) PICD Nelohborhood. The area bounded by Colorado
Avenue on the North,
Lincoln Boulevard on
the We5t, PIce
Boulevard on the South, and the cIty boundary on the East.
(b) Full SerVice Market.
A market WIth either a sales
area of not les5 than 10,000 square feet or an overall area of
not le5s than 14,000 square feet. The market shall offer for
sale rresh meats, produce, and other grocery end related
Items. At City's dIscretion, CIty may approve a ~maller
sales or overall area for the market. The market Will be a
portIon
or a
larger
retaIl development on the Propety
("ProJect").
SECTION 3.
DEVELOPMENT OF PROPERTY.
The obllgatlon5 of City under th15 Agreement shall erlse
only upon the occurrence of each of the followlng conditions
on or before July 1, 1989:
(a) Purchase of the Property by Developer.
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(b) Developer enterIng
lnto a leese WIth ~ tenant to
operate a Full
SerVIce Market.
The lease e.hall
be for a
minImum term of fIve years
("MUllmum Period") from the date
the Full SerVIce Market commences operation and 15 open to the
pub I I C (II Op e n 1 n 9 De t e tI ).
SECTION 4.
$ALES TAX PART~C'PATlON.
CIty covenants and agrees to make payments to Developer,
not to exceed $300,000.00, as follows:
(a) SIX months from the Opening Date of the Full
SerVIce Market ("FIrst Payment Oate"), the amount of
S100,000.00.
(b) One year from the FIrst Payment Date, the amount of
$80,000.00.
(c)
Two
years
from the Flr!ot
Payment Date, an amount
of the sales tax from
equal to 40% of the City's allocatlon
the Project for the Reporting Period.
Cd) Three years from the FIrst Payment Date, an amount
equal to JO% of the CIty's allocetIon
the Project for the ReportIng PerIod.
of the sales tax from
(e) Four years from the FIrst
equal to' 2D% or the CIty's allocation
the Project for the Reportlng PerIod.
Cf) Five years from the FIrst
equal to 10% of the City's allocatIon
the Project for the Reporting Perlod.
Payment Dete, an amount
of the sales tax from
P~yment Date, an amount
of the sales tax from
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Except as provided In
required by thl~ Section shall
thiS Agr~ement, the payments
be unconditional and shall be
made Without notice, demand, or setoff.
If operatIon of the Full ServIce Merket 15 dIscontInued,
the schedule of peyments provIded for In thIS Section may be
extended for a period of not more than 18 months 50 that
Developer
Market.
resumed,
may attempt to resume operations of a Full SerVIce
In the event operation of a Full Service Market IS
the Minimum Period shall be extended by a period
equal to the perlod of such extension.
For purposes of thiS SectIon, "Reporting PerIodll shall
mean the four precedlng State Board of EqualizatIon quarterly
reports of sales tax allocation received by the City from all
retail sales activity on the Property. Reporting period shall
not Include any period prior to the openIng of the Full
Service Market, any perIod follOWing the end of the Minimum
Period, or any period the Full SerVice Market 15 discontInued.
At Developer's request, City shall provide Developer With
access to any documentation relied upon by CIty to m~ke
determinatIons of payments under thIS Agreement. For purposes
of thiS Agreement) the operation of a Full ServIce M~rket
shall
not
be
considered discontInued
I fit
15 closed for
normal
ho} Idays,
annual
InventorIes,
necessary repairs or
remOdellIng,
as
a
result
of condemnatIon,
destructIon,
casualty, or during any period of retoratlon thereafter, or
any other reasonable Interruption due to events beyond the
control of Developer or the Full Service Market.
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SECTION ?
If durIng
ServIce Merket
TERMINATION OF CITY PAYMENTS.
the MInImum PerIod the operatIon of a Full
I~ dl~contlnued and
re-rented to a tenant for
an alternatIve u~e for a perIod totallIng more than one year,
CIty'S payments under SectIon 4 of
ImmedIately terminate.
thIS Agreement shall
SECTION 6.
REPAYMENT BY DEVELOPER.
Within one year after the end of the Minimum PerIod, or
Within one year of the date the City's payment obllgatIon 15
termInated pursuant to SectIon ~ or thIS Agreement, CIty shall
prOVide Developer WIth a wrItten statement of all sele~ tax
allocated from the ProJect during the perIod the Full Servlce
Market wa6 operated durIng the MInimUm Period. If the CltylS
total payment to Developer under SectIon 4 of thIS Agreement
was greater than 50% of such sales tax allocation, Developer
shell pay to City the dIfference between City's payment and
?O% of the sales tax allocation. If the CIty'S total payment
to Developer under Section 4 of thIS Agreement 15 less than
?O% of such sales tax allocation, City shall pay to Developer
the dIfference between CIty'S payment and ~O% of the sales tax
allocatIon, except that In no event shall CIty'S total of
payments to Developer exceed $300,000.00 under this Agreement.
Developer's payment to CIty shall be made WIthIn 60 days of
such wrItten statement} but no earlIer than SIX months after
the end of the MinImum Period or TermInation Dete.
CIty's
payment
to Developer shall
be made Within 60 days of such
written statement.
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SECTION 7. PICD NEIGHBORHOOD CONTRIBUTION.
Developer shall prOVIde grants to artists end non-profIt
organIzatIons, selected by Developer and approved by the CIty,
prOVIdIng art, graffIti removal, or other beautIfIcatIon
programs In the PICO NeIghborhood of the CIty. The grants
shall be In an amount equal to CIty'S total payment receIved
by Developer under Section 4 of thIS Agreement les5 any
repayment reqUIred of Developer under SectIon 6 of thIS
Agreement. The grants shall be made accordIng to the
followIng 5chedule:
(a) SIX years from the FIrst Payment Date, an amount
not less than 10% of the obligatIon under thI5 SectIon.
(b) Seven years from the FIrst Payment Date, an amount
not le55 than 20% of the oblIgatIon under thIS Section.
(c) Eight years from the First Payment Date, an amount
not less than 30% of the obligatIon under thIS SectIon.
(d) NIne years from the FIrst Payment Date, an amount
not les5 than 40% of the oblIgation under thIS Section.
If In any year Developer makes grants In excess of the
amount requIred, Developer may take a credIt against any
subsequent year payment In the amount by which the actual
grant exceeded the requIred grant.
In the event the MInImum PerIod IS extended as prOVided
for In Section 4, the schedule of payments prOVIded for In
th15 Section shall be extended by the period of the extension
of the MInImum Period.
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SECTION 8. ASSIGNMENT.
Developer may aS51gn th1s Agreement w1thout approval of
CIty If the ass1gnee assumes the obligations of thIs Agreement
1n writing and If the assIgnee 15 a partnershIp, corporat1on,
trust or other entIty In whIch Developer, Mark A. Schurgln,
Rosellnd Jonas Schurgln, or any Developer Afflllete retaIns
~ufflclent operational and managerial control to assure that
Developer's obllgat1ons hereunder are fulfilled. For purposes
of thIs Agreement, a Developer AffIlIate means any
po!!lrtnershlp,
of Developer,
Indlvlduelly
corporation, trust, or other entIty In WhICh ~ny
Mark A. Schurgln, or Rosslyn Jonas Schurgln,
or collectively own or controls, dIrectly or
IndIrectly, a majority Interest.
SECTION 9.
APPROVAL PROCESS.
The development of the Property shall be subJect to the
City's normal development approval process. City Will use Its
best efforts to expedIte, cooperate, and assIst Developer In
the processIng of the development applIcatIon.
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SECTION 10. OFF-SITE IMPROYEMENTS.
The off-sIte Improvements descrIbed
In ExhIbIt 8 shall
be performed by and be the
full
responSIbIlIty of the
Developer.
Developer shall not be responsIble for any other
off-SIte
Improvements as a condItIon of development of the
ProJect.
SECT ION 11.
NOTICES.
All notIces} demands, requests} or approvals to be gIven
under thIS Agreement} shell be gIven In wrItIng and be served
personally or by UnIted States mall, postage prepaId and
return receIpt requested, addressed ~s hereInafter prOVIded.
All
notIces,
demands}
requests, or approvals
from
Developer to CIty shall be addressed to CIty at:
CIty of Santa MonIca
168':7 MaIn Street
Santa MonIca, CalIfornl8 90401
Attn: CIty Manager
All notIces, demands, requests,
or approvals from CIty
to Developer shall be addressed to Developer at:
Schurgln Development CorporatIon
3425 McLaughlIn Avenue, SUIte 201
Los Angeles} CalIfornIa 90066
Attn: Allen J. Lynch, Assllstant
I.h ce Pres I den t
WIth a copy to:
Edward Kra~nove} Esq.
Plrcher} Nichols & Meeks
10100 Sante MonIca Boulevard
Lo~ Angeles} California 90067
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SECTION 12. W8IVER.
A waIver by CIty or Developer of any breach of any term~
covenant} or condItIon contaIned hereIn shall not be deemed to
be a waIver of any sub~equent breach of the same or any other
term, covenant, or condItIon contaIned hereIn whether of the
same or a dIfferent character.
SECTION 13. COST OF LITIGATION.
If any legal actIon 15 necessary to enforce any
prOVISIon hereof or for damages by reason of an alleged breach
of any prOVISIon of thIS Agreement, the prevaIlIng party shall
be entItled to receIve from the lOSIng party all costs and
expenses and such amount a5 the court may adJudge to be
reasonable attorneys' fees.
SECTION 14.
INTE~RATED AGREEM~NT.
ThIS Agreement represents the full and complete
understandIng of every kInd Or nature whatsoever between CIty
and Developer and all prelImInary negotIatIons and agreements
are merged hereIn. No verbal agreement or lmplIed covenant
shall be held to vary the prOVISIons hereof. Any
modlfIcatIon of thIS Agreement shall be effectIve only If In a
wrItIng executed by both CIty and Developer.
SECTION 15.
RELATIONSHIP OF PARTIES.
ThIS Agreement does not create an agency, partnershIp,
or JOInt venture between CIty and Developer.
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SECTION 16. ~OV~RNING lAW.
Th15 Agreement has been made and shall be construed and
Interpreted In accordance With the laws of the State of
California.
IN
WITNESS
WHEREOF the parties have caused thl5
Agreement to be executed the day and year first above written.
CITY OF SANTA MONICA,
a munIcipal corporation
By
JOHN JALILI
CIty Manager
APPROVED AS TO FORM:
ROBERT M. MYERS
City Attorney
SCHURGIN DEVELOPMENT CORP.
By
ALLEN J. LYNCH
AS515tant VIce President
RMC268/ca
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