SR-410-003 (11)
.
.
tj/{)-lJO-S
APR 1 0 1984
CA:RMM:r
C1ty Counc11 Meeting 4-10-84
Santa Monica, Ca11fornia
STAFF REPORT
TO:
Mayor and C1ty Council
,/
FROM:
C1ty Attorney
SUBJECT:
Ordinance Approving Amendment Number 2 to
Development Agreement w~th CPL
Relat1ng to Mortgagee Protectlon
On April 2, 1984,
Colorado Place Limited ("CPL") requested
that the City approve a minor amendment to paragraph 27 of the
Development Agreement so that it could secure f1nancing necessary
to proceed with Phase II of Colorado Place.
In response to th1S
request, the City has negotiated an appropriate amendment to the
Development Agreement for presentation to the City Councl1.
The Development Agreement between CPL and the C1ty
prov1.des for a two phase development of property surrounded by
Broadway, 26th Street, Colorado Avenue, and Cloverfield. Phase 1
of the proj ect is near1ng completlon.
Phase 2 of the prOJect
w1l1 cons1st of office bU1ldings, a hotel, and a public park.
Paragraph 27 of the Development Agreement was inltially
included in the document to ensure that CPL would be able to
secure 1nsti tutional financing for the pro] ect. Pa rag raph 27
provides that the initial lenders for the proJect, 1n the event
of foreclosure, will not be required to perform certa1n
ob11gations under the Development Agreement, prlncipally the
prov1sion of housing.
Although a lender who forecloses is not
~-c_
APR 1 0 1984
.
.
responsible for provid1ng the hous1ng, CPL remains liable to
provide the housing.
Paragraph 27 was narrowly drafted to provide protection
only to lenders who assumed a first deed of trust pOS1tion. At
the t1me the Development Agreement was drafted, CPL believed that
all necessary constructlon and permanent f1nanclng could be
obta1ned by means by obligat1ons secured by a first deed of
trust.
In connection with Phase 1, CPL secured construction
f1nanc1ng from Crocker Nat10nal Bank; the construct1on loan was
recently paid off by permanent flnancing obtalned from Teachers
Insurance and Annulty Association of America.
In connectlon W1 th Phase 2, CPL is seeklng constructlon
financing from Crocker Natlonal Bank and has a permanent loan
commitment from Teachers Insurance and Annuity Association of
Amerlca. However, following the permanent financing, CPL may
remain obligated to its constructlon lender because the amount of
the permanent financlng will be insufficient to cover the entire
constructlon loan. Thus, CPL's construction lender would be a
]UU10r lien holder followlng the permanent flnancing for Phase 2.
(The construction lender on Phase 2 wlll also be a Jun10r llen
holder Slnce it wll1 be secured by a deed of trust on Phase 1
Junior to the permanent lender's Phase 1 deed of trust.) CPL's
constructlon lender wlll not provide the financing necessary for
Phase 2 unless It has the protections of paragraph 27 of the
Development Agreement, which technically it will not have because
It will be in a junlor lien position.
.
.
The accompanying amendment to the Development Agreement
accords Crocker National Bank the protectlons of paragraph 27.
This amendment is consistent wlth the partles intent that the
~n~tial lenders not be required to perform the housing obl~gation
in the event of foreclosure; the City can look only to CPL.
Paragraph 27 of the Development Agreement is only of
slgnificance in the event of a default by CPL. Obviously, CPL
has a strong ~ncentive to avold the occurrence of such an event.
Llkewise, the initial constructl.on and permanent lenders would
not undertake flnancing if they bell.eved such a default was
likely. Moreover, because CPL, with City and County
partlcipation, has already satisfled a significant portion of the
housing requirement, the risk to the Clty is less today than when
the paragraph was first agreed to in 1981.
Chapter 8 of Article IX of the Munlcipal Code contains
procedures for the processlng of development agreements. Chapter
8 applies to "[a]ll development agreements entered into after the
effectlve date of this Chapter II Munlclpal Code Section
9800.
The proposed amendment to the Development Agreement does
not relate to the physlcal development of the property and does
not present planning or envlronmental concerns wlthin the scope
of the Plannlng Commisslon's Jurisdlction. (The previous
amendment to the Development Agreement relating to parking wa s
referred to the Plannlng Commission because it raised varlOUS
parking and envlronmental concerns.) Thus, referral to the
Planning Commisslon is unnecessary.
.
.
CA:RMM:r
C~ty Council Meeting 4-10-84
Santa Monica, Cal~forn~a
ORDINANCE NUMBER
(city Council Serles)
AN ORDINANCE OF THE CITY COUNCIL
OF THE CITY OF SAN~A MONICA
APPROVING AMENDME~T NUMBER 2 TO
DEVELOPMENT AGREEME~T BETWEEN
COLORADO PLACE LIMITED
AND THE CITY OF SANTA MONICA
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS
FOLLOWS:
SECTION 1.
Amendment Number 2 to Development Agreement
attached hereto and ~ncorporated by reference between Colorado
Place Limited, a California l~mited partnersh~p, and the C~ty of
Santa Mon~ca, a municipal corporat~on, is hereby approved.
SECTION 2.
Each and every term and conditlon of Amendment
Number 2 to Development Agreement approved ~n Section 1 of thls
ordlnance shall be and 15 made a part of the Santa Monlca
MunlClpal Code and any append~ces thereto.
The C~ty Counc~l of
the Clty of Santa Monica flnds that the public necess~tYI publlC
convenlence, and general welfare reqUlre that any provis~on of
the Santa Monica Municipal Code or appendices thereto
inconslstent wlth the proviSlons of th~s Amendment Number 2 to
Development Agreement, to the extent of such inconsistencies and
no further, is hereby repealed or modifled to that extent
1
. .
necessary to make fully effective the prov1s1onS of Amendment
Number 2 to Development Agreement.
SECTION 3.
Any provision of the Santa Monica Municipal
Code or appendlces thereto 1nconslstent wlth the provisions of
thlS ordinance, to the extent of such lnconsistencies and no
further, are hereby repealed or modifled to that extent necessary
to affect the provls1ons of this ordlnance.
SECTION 4.
If any section, subsectlon, sentence, clause,
or phrase of this ordlnance 1S for any reason held to be 1nvalld
or unconstltutional by a decislon of any court of any competent
Jurlsdictlon, such decision shall not affect the valld1ty of the
remain1ng portions of the ordinance.
The City Council hereby
declares that it would have passed this ordinance and each and
every section, subsection, sentence, clause or phrase not
declared invalld or unconstitutional w1thout regard to whether
any portlon of the ordinance would be subsequently declared
invalld or unconstitutional.
SECTION 5.
The Mayor shall s1gn and the City Clerk shall
attest to the passage of this ord1nance.
ThlS City Clerk shall
cause the same to be published once ln the offlClal newspaper
wlthin 15 days after 1ts adoption.
The ordinance shall become
effectlve after 30 days from its adoptlon.
APPROVED AS TO FORM:
~-~-
Robert M. Myers
City Attorney
2
.
.
AMENDMENT NUMBER 2 TO
DEVELOPMENT AGREEMENT
Th1s Amendment Number 2 to Development Agreement, dated April
1984, is entered into by and between the CITY OF SANTA MONICA, a
municipal corporation (hereinafter "Cityll) and COLORADO PLACE LIMITED,
a California Limited Partnership (hereinafter IIProperty Ownerll), and
is made with reference to the following:
,
RECITALS
A. C1ty and property Owner entered into a Development Agreement
dated october 27, 1981, and amended such Agreement by Amendment Number
1 to Development Agreement dated July 26, 1983.
B. The Development Agreement was recorded in the official
records of Los Angeles county on February 24, 1982, as Instrument No.
82-193147. Amendment Number 1 to Development Agreement was recorded
in the official records of LOS Angeles County on october 5, 1983, as
Instrument No. 83-1176312. The Development Agreement, as amended,
affects that certain real property described in Exhibit IIAII hereto.
C. The parties desire to amend Paragraph 27 of the Development
Agreement relating to the rights of IIMortgagees" and "purchasersll.
D. This Amendment Number 2 to Development Agreement relates ~nly
to such rights of Mortgagees and Purchasers and does not relate to the
physical development of the project.
.
.
E. Unless otherWIse provIded, all terms used herein shall have
the same meaning as in the Development Agreement.
NOW, THEREFORE, the undersigned parties do mutually agree as
follows:
1. Paragraph 27 of the Development Agreement IS amended by
insertIng the followIng subparagraph at the end of such paragraph:
"(g) NotWIthstandIng any prOVISIon of thIS Agreement to the
contrary:
(1) Each deed of trust or mortgage which (1) is held by
Crocker National Bank or any other institutIonal lender or
pension trust as successor in interest to Crocker NatIonal
Bank (Crocker NatIonal Bank and any such successors In
Interest are hereInafter referred to as "Crocker~), (Ii)
secures an oblIgatIon incurred In connectIon wIth the
development of the ProJect and (IiI) encumbers Property
Owner's fee interest In eIther or both of the Two Phases of
the Project prIor to the date on which the InItIal permanent
loan on Phase II of the Project IS fIrst funded (a "Crocker
Deed of Trust") shall be deemed a "Deed of Trust" (as that
term is defIned in thIS Paragraph 27), whether It is in a
fIrst or a JunIor lien posItIon.
(2) Crocker, as the holder of each Crocker Deed of
Trust, shall be deemed a ~Mortgagee" (as that term IS
defined In thIS Paragraph 27) and shall be entitled to all
the rights and benefIts of a Mortgagee set forth In thIS
Development Agreement, and any thIrd party purchaser who
obtaIns tItle to all or any portion of the Project after
default by Property Owner and pursuant to the good faIth
exerCise of remedies provided for In a Crocker Deed of Trust
or pursuant to the good faIth acceptance of a deed or
assignment In lieu of such foreclosure shall be deemed a
"Purchaser" (as that term IS defIned In thIS Paragraph 27)
and shall be entItled to all the rIghts and benefits of a
Purchaser set forth in thIS Development Agreement.
(3) The denial of the benefits of this Paragraph 27 as
to any Mortgagee or Purchaser "taking tItle subsequent to a
refInancing of the initial permanent loans on the Project"
(which denial is set forth In subparagraph (a) of this
Paragraph 27) shall not be deemed to apply to any Mortgagee
or Purchaser who obtains title to all or any portion of the
Project after default by Property Owner and pursuant to the
good falth exerCIse of rernedles provided for in a Crocker
-2-
.
.
Deed of Trust (as defined above) or pursuant to a good faIth
acceptance of a deed or assIgnment In lIeu of such fore-
closure, provIded that such Crocker Deed of Trust IS
recorded In the Official Records of Los Angeles County prIor
to such refInancIng, and such a Mortgagee or Purchaser shall
be entItled to all the rIghts and benefIts of thIS Paragraph
27.
(4) If Property Owner IS unable to obtaIn any of the
financIng described in subparagraph (g)(l) above from
Crocker NatIonal Bank, the provisIons of thIS subparagraph
(g) shall be applIcable to any other InstItutIonal or
pensIon trust lender whIch provides such fInancIng, wIthout
further amendment of thIS Agreement, prOVIded that such
lender has been approved by City."
2. All other terms of the Development Agreement remaIn unchanged
and In full force and effect.
3. This Amendment Number 2 shall be condItIoned upon Crocker
NatIonal Bank and Teachers Insurance and AnnUIty ASSOCIatIon of
AmerIca each transmittIng to the City its written consent to this
Amendment Number 2 by May 15, 1984.
In the event that eIther of such
written consents is not transmItted to City by May 15, 1984, thIS
-3-
.
.
Amendment shall be deemed rescinded and of no further force or
effect. This Amendment Number 2 shall be recorded within (10) days
following receipt by city of the last of such written consents.
CITY OF SANTA MONICA
By:
Attest:
APPROVED AS TO FORM:
,
ROBERT M. MYERS
City Attorney
COLORADO PLACE LIMITED,
a California limited partnership
By: COLORADO ASSOCIATES, LTD.,
a California limited
partnership
Its: General Partner
By: BECKET INVESTMENT CORPORATION,
a California corporation
Its: General Partner
By:
James R. Wannemacher
Its President
L20.1-DAamend2
-4-
.
.
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On thIS day of , 1984, before me, the undersigned
Notary PublIC in and for said County and State, personally appeared
and ,
respect1vely, of the Clty of Santa Monica and known to me to be the
persons who executed the within Instrument on behalf of said polItical
subdIvision, and acknowledged to me that such pollticial subdlvis10n
executed the same.
Notary PublIC 1n and for saId
County and State
STATE OF CALIFORNIA
COUNTY OF LOS ANGELES
On this day of , 1984, before me, the undersigned
Notary Public In and for saId County and State, personally appeared
James R. Wannemacher, known to me to be the presIdent of Becket
Investment Corporation, a CalIfornia corporatIon, the corporatIon that
executed the within Instrument in Its capacity as general partner of
Colorado Associates, Ltd., the CalIfornIa limited partnership that
executed the wIthin instrument in Its capacIty as general partner of
Colorado place Limited, a California limited partnership, and
acknowledged to me that such partnerships and corporation executed the
same.
Notary PublIC In and for saId
County and State
-5-
.
.
PHASE I
PARCEL 1:
Lots 3 and 4 of Tract 9774, in the CIty of Santa Monica, County
of Los Angeles, State of California, as per Map recorded in Book
140 Pages 64 to 66 of Maps, in the OffIce of the County Recorder
of said county, except the northwesterly 300 feet thereof.
Also except that portion of Lot 3, Tract No. 9774, described as
follows:
Beginning at the Southerly corner of said Lot 3; thence
Northwesterly along the Southwesterly lIne of saId Lot 3; a
distance of 299.47 feet, more or less, to the Southerly corner
of Lot 4, Tract No. 14511, recorded in Map Book 302, Page 50, in
said Office; thence Northeasterly, along the Southeasterly lIne
of said Lot 4, a distance of 14.08 feet; thence South 41 degrees
42 minutes 02 seconds East a distance of 100.58 feet to the
beginning of a tangent curve concave Northeasterly having a
radius of 2,112 feet; thence Southeasterly along saId curve an
arc distance of 88.59 feet to a point of tangency on a lIne
parallel with and distant 8 feet Northeasterly, measured at
right angles, from the Southwesterly line of said Lot 3: thence
south 44 degrees 06 minutes 14 seconds East along said parallel
line a distance of 95.42 feet to the beginning of a tangent
curve concave Northerly and having a radius of 15 feet; thence
Easterly along the last mentioned curve an arc distance of 23.57
feet, more or less, to a point in the Southeasterly line of said
Lot 3 distant thereon 23 feet Northeasterly from the point of
beginning; thence Southwesterly along said Southeasterly line of
said Lot 3 to the point of beginning, as deeded to the City of
Santa Monica by deed recorded July 26, 1971, as Instrument No.
1085.
Excepting from those portions of Lots 3 and 4 above described
all minerals, hydrocarbon substances and mineral rights lying
below the surface of said land but without the right of entry
upon or using the surface thereof, as conveyed to Western
Republic Co., Ltd., a Limited Partnership, doing business as Far
Western Hemisphere oil Exploration Co., by deed recorded March
3, 1959, as Instrument No. 4180 in Book D-386, Page 456,
Official Records, and as amended by an instrument entitled
"Amended Grant on All Minerals and MIneral Rights and
Acceptance", dated February 24, 1960, executed by Birch
Investment, Inc., a Corporation, and Western Republic Co., Ltd.,
a Limited Partnership, and recorded June 10, 1960, as Instrument
No. 1965 in Book M-53l, Page 377, Official Records.
~
~
EXHIBlllwsr
PARCEL 2:
.
.
A parcel of land situated in the City of Santa Monica, County of
Los Angeles, State of CalIfornia, beIng all that portion of the
Northeasterly 50 feet of Lot 10, Block 4, of the Orchard Tract,
as per map recorded in Book 60, Pages 15 and 16 of Miscellaneous
Records, in the Office of the Recorder of said County, lying
Southeasterly of the Southwesterly prolongation of a line
parallel with and 300 feet Southeasterly, measured at right
angles from the Northwesterly boundary of Lot 4 of Tract 9774,
as per map recorded In Book 140, Pages 64, 65 and 66 of Maps in
the Office of the County Recorder of saId County.
Excepting from that portIon of Lot 10, Block 4 of above
description, the title and exclusive right to all of the
minerals and mineral ores of every kind and character, occuring
500 feet beneath the surface thereof, now known to exist or
hereafter discovered upon, within, or underlying said land or
that may be produced therefrom, includIng without limitIng the
generalIty of the foregoing, all petroleum, oil, natural gas and
other hydrocarbon substances and products derIved therefrom,
together with the exclusive and perpetual right of saId grantor,
its successors and assigns, of ingress and egress beneath the
surface of said land to explore for, extract, mine and remove
the same, and to make such use of said land beneath the surface
as is necessary, or useful in connection therewith, and other
use thereof, which uses may include lateral or slant drilling,
dIgging, boring or sinking of wells, shafts or tunnels to other
lands not subject to those reservat10ns and easements, provided,
however, that said grantors, its successors and assigns, shall
not use the surface of sa1d land In the exercise of any of said
rights, and shall not disturb the surface of said land or any
improvements thereon, or remove or impair the lateral or
subjacent support of said land, or any improvements thereon, and
shall conduct no operations within 500 feet of the surface of
said land, as reserved in the deed from Pac1fic Electric Railway
Company, a corporation, recorded November 21, 1960, as
Instrument No. 849 in Book D-1040, page 680, Official Records.
PARCEL 3:
An exclusive easement limIted to a term ending on December 31,
1983, for grading, slope and construction purposes over the
Southeasterly 45 feet of the following described parcels:
PARCEL 3A:
The Northwest 300.00 feet of Lot 4 of Tract No. 9774, in the
City of Santa Monica, County of Los Angeles, State of
California, as per map recorded in Book 140, Page 64 of Maps, in
the Office of the County Recorder of said County.
PARCEL 3B:
.
.
The Northeasterly 41.74 feet, measured along the Northwesterly
and Southeasterly lines, of Lot 4 of Tract No. 14511, in the
City of Santa Monica, County of Los Angeles, State of
California, as per map recorded ~n Book 302, Page 50 of Maps, ~n
the Office of the County Recorder of said County.
PARCEL 3C:
That portion of Lot 4 of Tract No. 14511, in the City of Santa
Monica, County of Los Angeles, State of CalifornIa, as per map
reco~ded ~n Book 302, Page 50 of Maps, in the office of the
County Recorder of said County, included within the land
descr~bed as follows:
Beginning at the most Northerly corner of Lot 1 of said Tract
No. 14511; thence along the Northeasterly l~ne of said Lots 1
and 4, South 44 degrees 45 minutes 19 seconds East 300 feet to
the most Easterly corner of said Lot 4; thence along the
Southeasterly line of said Lot 4, South 45 degrees 15 minutes
West 141.74 feet, more or less, to the most Southerly corner of
the land descrIbed ~n the deed to Frank G. Kranz, recorded on
December 30, 1955, as Instrument No. 4905, in Book 49935, Page
376 of Official Records of said County; thence along the
Southwesterly l~ne of said land of Kranz, North 44 degrees 44
minutes 20 seconds West 300 feet to the Northwesterly line of
Lot 2 of said Tract 14511; thence along the Northwesterly line
of said Lots 2 and 1 North 45 degrees 15 mInutes East 141.74
feet, more or less, to the point of beginning.
Except therefrom the Northeasterly 41.74 feet, measured along
the Northwesterly and Southeasterly lines, of said Lots 1 and 4.
PARCEL 3D:
The Northeasterly 50 feet of Lot 10 in Block 4 of the Orchard
Tract, in the City of Santa Monica, County of Los Angeles, State
of CalIfornia, as per map recorded in Book 60, Pages l~ and 16
of Miscellaneous Records, in the office of the County Recorder
of said County.
Except the Northwesterly 40 feet of the Northeasterly 50 feet of
said Lot 10.
Also except that portion of said Northwesterly 50 feet, lying
Southeasterly of the Southwesterly prolongation of a line
parallel with and 300 feet Southwesterly, measured at right
angles, from the Northwesterly boundary of Lot 4 of Tract No.
9774, as per map recorded in Book 140, Pages 64, 65 and 66 of
Maps, in the Office of the County Recorder of said County.
-
-
PARCEL 3E:
.
.
That portion of Lot 4 of Tract No. 14511, In the City of Santa
MonIca, County of Lo~ Angeles, State of CalifornIa, as per map
recorded in Book 302, Page 50 of Maps, in the OffIce of the
County Recorder of said County, included within the land
described as follows:
Beginning at the most Westerly corner of Lot 3 of said Tract
14511; thence North 45 degrees 15 mInutes East along the
Northwesterly lIne of Lots 3 and 2 of said Tract 14511, a
dIstance of 200 feet, more or less, to the most westerly corner
of the land described in the deed to Frank G. Kranz, recorded on
December 30, 1955, as Instrument No. 4905 In Book 49935, Page
376 of Official Records of said County; thence along the
Southwesterly line of said land of Kranz, South 44 degrees 44
minutes 20 seconds East 300 feet to the Southeasterly line of
said Lot 4; thence along saId Southeasterly lIne, South 45
degrees 15 minutes West to the most Southerly corner of said Lot
4; thence along the Southwesterly lines of said Lots 4 and 3,
North 44 degrees 41 minutes 20 seconds West 300 feet to the
point of the beginning.
Except therefrom that portion of said Lot 3 included within the
land described in the deed of City of Santa Monica recorded
September 22, 1971, as Instrument No. 4321 of Official Records
of saId County.
Also except therefrom that portion of said Lot 4 included within
the land described in the deed to City of Santa Monica recorded
September 22, 1971, as Instrument No. 4320 of Official Records
of saId County.
~~
PARCEL 5:
.
.
The Northeasterly 50 feet of Lot 10 in Block 4 of the Orchard
Tract, in the CIty of Santa Monica, In the County of Los
Angeles, State of California, as per map recorded 1n Book 60,
Pages 15 and 16 of Miscellaneous Records, in the Office of the
County Recorder of said County.
Except the Northwesterly 40 feet of the Northeasterly 50 feet of
said Lot 10.
Also except that portIon of said Northeasterly 50 feet, lying
southeasterly of the Southwesterly prolongatIon of a line
parallel with and 300 feet Southeasterly, measured at rIght
angles, from the Northwesterly boundary of Lot 4 of Tract No.
9774, as per map recorded in Book 140, pages 64, 65 and 66 of
Maps, in the Off1ce of the County Recorder of saId County.
Except all minerals, petroleum, oil, gas and other hydrocarbon
substances in and under said land, but with no right to use the
surface thereof, or the subsurface to a depth of 500 feet from
the present surface thereof: as reserved by Southern Pacific
Company 10 deed recorded August 4, 1967, as Instrument No. 556.
PARCEL 6:
That portion of Lots 2, 3 and 4 of Tract No. 14511, in the City
of Santa Monica, in the County of Los Angeles, State of
California, as per map recorded in Book 302, Page 50 of Maps, in
the Office of the County Recorder of said County, described as
follows:
Beginning at the most Westerly corner of said Lot 3: thence
North 45 degrees 15 minutes East along the Northwesterly line of
said Lots 3 and 2, a distance of 200 feet, more or less, to the
most Westerly corner of the land described in the deed to Frank
G. Kranz, recorded on December 30, 1955, as Instrument No. 4905
in Book 49935, Page 376 of Official Records of said County;
thence along the Southwesterly line of said land of Kranz, South
44 degrees 44 minutes 20 seconds East 300 feet to the
Southeasterly line of said Lot 4; thence along said
Southeasterly line, South 45 degrees 15 minutes West to the most
Southerly corner of said Lot 4; thence along the Southwesterly
lines of said Lots 4 and 3, North 44 degrees 41 minutes 20
seconds West 300 feet to the point of beginning.
Except therefrom that portion of said Lot 3 included within the
land described in the deed to City of Santa Monica recorded
September 22, 1971, as Instrument No. 4321 of Official Records
of said County.
Also except therefrom that portion of said Lot 4 included within ~_
the land described in the deed to City of Santa Monica, recorded
September 22, 1971, as Instrument No. 4320 of Official Records
of said County.
LS/LANDDESCR