SR-05-24-1988-6B
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Council Mtg:
MAY 2 4 1988
Santa Monica, california
May 24, 1988
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TO:
Mayor and City Council
city Staff
FROM:
SUBJECT: Second Reading and Findings for National Medical
Enterprises Development Agreement Amendment
At the city council meeting of May 10, 1988, the Council
introduced for first reading the Ordinance adopting the Third
Amendment to the Development Agreement for the National Medical
Enterprises development at 2600 Colorado Boulevard. In
presenting the Third Amendment, staff neglected to include
recommended findings for city Council consideration in its
approval of the agreement amendment. As part of the adoption of
the Ordinance, the City Council should adopt the following
findings as part of its action:
1. The Third Amendment is consistent with the obj ecti ves ,
policies, general land uses and programs specified in the
general plan.
2. The Third Amendment is compatible with the uses authorized
in the district in which the real property is located.
3. The Third Amendment is in conformity with the public
necessity, public convenience, general welfare, and good
land use practices.
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4. The Third Amendment will not be detrimental to the health,
safety and general welfare.
5. The Third Amendment will not adversely affect the orderly
development of the property.
6. The Third Amendment will have a positive fiscal impact on
the city.
RECOMMENDATION
It is recommended that the City Council adopt the attached
Ordinance amending the Development Agreement as indicated in the
attachment.
Attachments: A)
B)
Ordinance Amending Development Agreement
Third Amendment to Development Agreement
Prepared by: Paul V. Berlant, Director of Planning
City Planning Division
Community and Economic Development Department
reading
5/16/88
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CA:RMM:lld320/hpc
City Council Meeting 5-24-88
Santa Monica, Ca1ifornla
ORDINANCE NU~BER
(City Council Series)
AN ORDINANCE OF THE CITY COUNCIL OF THE
CITY OF SANTA MONICA APPROVING THE THIRD
AHENDMENT TO THE DEVELOPMENT AGREEHENT BETWEEN
THE CITY OF SANTA MONICA AND NATIONAL
MEDICAL ENTERPRISES, INC.
THE CITY COUNCIL OF THE CITY OF SANTA MONICA DOES ORDAIN AS
FOLLOWS:
SECTION 1.
The Third Amendment to Development Agreement
attached hereto and incorporated by reference between the City of
Santa Monica, a municipal corporation, and National Medical
En~erprises, Inc., a Nevada corporation, is hereby approved.
SECTION 2. Each and every term and condition of the Third
Amendment to the Development Agreement approved in Section 1 of
this ordinance shall be and is made a part of the Santa Monlca
Municipal Code and any appendices thereto.
The City Council of
the City of Santa Monica flnds that the publlC necessity, public
convenience, and general welfare require that any provislon of
~he
Santa
Monica
Municipal
Code
or
appendices
t:'ereto
lnCOnS1.stent with the provisions of thls Second Amendment to
Development Agreement, to the extent of such inconsistencies and
no further, is hereby repealed or modified to that extent
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necessary to make fully effective the provisions of this Second
Amendment to Development Agreement.
SECTION 3. Any provision of the Santa Monica Municipal
Code or appendices thereto inconsistent with the provisions of
this Ordinance, to the extent of such inconsistencies and no
further, are hereby repealed or modified to that extent necessary
to affect the provisions of this Ordinance.
SECTION 4. If any section, subsection, sentence, clause,
or phrase of this Ordinance is for any reason held to be invalid
or unconstitutional by a decision of any court of any competent
jurisdiction, such decision shall not affect the validity of the
remaining portions of this 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 invalid or unconstitutional without regard to whether
any portion of the Ordinance would be subsequently declared
invalid or unconstitutional.
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SECTION 5. The Mayor shall sign and the City Clerk shall
attest to the passage of this Ordinance. The City Clerk shall
cause the same to be published once in the official newspaper
within 15 days after its adoption. This Ordinance shall become
effective after 30 days from its adoption.
APPROVED AS TO FORM:
ROBE~E~ Q---~
City Attorney
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THIRD AMENDMENT TO DEVELOPMENT AGREEMENT
Between
THE CITY OF SANTA MONICA, CALIFORNIA and
NATIONAL MEDICAL ENTERPRISES
(2600 Colorado Avenue)
That certain Development Agreement entered into as of April
16, 1982, between Colorado Place Associates, a California general
partnership (the "First Prior Owner"), and the City of Santa
Monica, a charter city organized and existing under the laws of
the state of California, and its various agencies (collectively,
the "ci ty") and governing the development of the real property
located in the city and described in Exhibit "An attached hereto
(the "Property"), as recorded on April 21, 1982, as Instrument
No. 82-413680 in the office of the County Recorder of Los Angeles
County, California, as amended by the Covenant and Agreement
thereto
dated August 30,
1984,
between the City
and
Campeau/Sedgwick Properties, a general partnership organized
under the laws of the State of California, and Campeau
Corporation California, a California corporation, and Grant
SedgwiCk, an individual, as further amended by the First
Amendment thereto dated February 20, 1987, between the City and
2600 Colorado Associates, a California limited partnership and
Campeau Corporation of California, a California corporation, the
successors-in-interest of the First Prior Owner (collectively,
the "Second Prior Owners"), as recorded on February 26, 1987, as
Instrument No. 87-287297 in the office of the County Recorder of
said County, as further amended by a Second Amendment thereto
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dated April 8, 1987, between the City and National Medical
Enterprises, Inc., a Nevada corporation (the "Successor Owners.'),
as successor-in-interest of the First Prior Owner and the Second
Prior Owners to the Property and with respect to and under such
Development Agreement, as so amended, as recorded on April 16,
1987, as Instrument No. 87-592069, is hereby amended in the
following particulars by the city and the Successor Owner:
l. Deletion of Earlier Provisions.
Paragraphs 6, 7 and 9 of the Development Agreement and
Paragraph 2ee) of the First Amendment are hereby deleted and the
provisions of this Amendment are substituted in their place.
2. Definitions.
Capitalized terms that are used in this Amendment that are
defined in this Amendment shall be defined as set forth in this
Amendment. Capitalized terms that are used but not defined in
this Amendment shall be defined in the same manner as they are
defined in the Development Agreement, the Covenant and Agreement
thereto, the First Amendment thereto, or the Second Amendment eas
the case may be), except wherever the context of this Amendment
indicates otherwise.
3. Paragraph 6 shall read as follows:
6. Day Care Center.
(a) Preparation of Center Space.
(1) In connection with the space
used as the Day Care Center (the IICenterU) , the
Successor Owner agrees to provide such improvements,
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interior and exterior, as may be required under all
state, federal, and local laws, rules and regulations
applicable to space utilized for day care centers,
including, but not li~ited to, the following:
(A) Finished perimeter walls
including windows and doors.
eB) Finished interior
partition walls adequate to enclose the spaces
required by California State Standards for day care
centers (toilet rooms, office, staff rest area).
eC) Toilet room fixtures and
plumbing.
(D) Carpeting, vinyl floor
tile and wall base, acoustic tile ceiling and stubbing
for natural gas cooking equipment.
(E) Heating and ventilating
system, electrical system, including fluorescent
lighting, and fire sprinklers meeting Fire Department
regulations, if required.
(2) For purposes of this Section,
"finished walls" shall mean qypsum board, taped,
spackled, and painted.
(3) The Successor Owner shall
provide outdoor play equipment valued at no less than
$3,000.00, or shall provide the sum of $3,000.00 to
the City to purchase such outdoor play equipment.
(4) The Successor Owner shall
provide necessary furnishings and equipment for the
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indoor area valued at no less than $2,000.00, or shall
provide the sum of $2,000 to the City to purchase
such furnishings and equipment for the indoor area.
(5) The Center shall be provided
and ready for occupancy no later than ninety (90) days
after the issuance of the permanent Certificate of
Occupancy for the Building.
(6) The space and related
facilities for the Center shall, under current
California licensing standards, be sufficient to
enab1 e the Center to be currently 1 icensed by the
state of California as a day care center for a minimum
of sixty {50} children.
(7) The ireprovements comprising the
Center shall not diminish the size of the portion of
the property to be developed as the Park.
(S) Except as otherwise provided in
subparagraph (b) below, the space for the Center shall
be provided for the life of the Building.
(b) Use and operation of Day Care Center.
(1) The space and improvements
dedicated and intended for use as the Center (the
nCenter Space") shall be used and operated as a day
care center in accordance with the provisions of this
subparagraph (b) as long as it is required to be used
and operated as such under this subparagraph (b).
(2) As long as the Center Space is
operated as a day care center;
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(A)
It shall be licensed as
such and shall be operated by a qualified licensed
operator selected in the manner provided in this
subparagraph eb} (tlOperator").
(B) The Priority children as
hereinafter defined in subparagraph (6) shall have
priority over all other children to be admitted and to
attend the Center.
(3) The Successor Owner shall have
the right to lease the Center Space to an Operator
selected by the Successor Owner, which may be owned
edirectly or indirectly) by or ''Otherwise affiliated
with the Successor Owner. However, such Operator is
subject to approval by the City in accordance with the
following:
(A) Successor Owner shall
notify the City in writing of the identity,
qualifications, experience, and references of the
Operator selected by Successor Owner. The city shall
have a period of sixty (60) days from receipt of said
notice to advise Successor Owner in writing of any
reasonable objections the City may have to the
Operator selected by Successor Owner.
(B) The failure of the city
to object in writing to the Operator selected by
Successor owner within the prescribed sixty (60) day
period shall be deemed to constitute the City's
approval thereof.
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(C) Notwithstanding the
foregoing, it shall not be reasonable for the City to
object to an Operator selected by Successor Owner if
all of the fOllowing conditions exist:
(1) The staff employed
by the Operator possess the qualifications set forth
in the Accreditation Criteria & Procedures manual of
the National Academy of Early Childhood Programs (the
"Criteria") published in 1984.
(ii) The Operator has
agreed to provide regular training opportunities for
staff to improve skills in working with children and
families and plans to provide such opportunities to
staff at the Center.
(iii) The program
offered and administered by the Operator meets the
group size and staff-child ratio in each age group set
forth in the criteria.
(iv) The program
offered and administered by the Operator is
developmentally appropriate in all areas: social,
emotional, cognitive, physical, and language.
(v) within three (3)
years of the date the Center Space is ready for
occupancy, the program offered by the Operator shall
be accredited by the National Academy of Early
Childhood Programs.
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(vi) The Center Space
is provided to the Operator at an annual cost of not
to exceed One Dollar ($1.00).
eD) Within forty-five (45)
days of the date of the expiration of each three (3)
year period during which the center is operated by an
Operator selected by Successor owner, Successor Owner
shall verify in writing to the city that the
operations of the Center are in compliance with the
provisions of subparagraphs (3) (e) (i) , (ii) , (iii),
and (iv) above. In addition, upon reasonable notice
to Successor Owner, City shall have the right to
inspect books and records kept by Operator or
Successor O~~er related to operation of the Center to
ensure compliance with the criteria and with this
Agreement.
(4) So long as reasonably required
by First Priority Children, the program offered by
Operator shall include infant care.
(5) If, after construction of the
Center is completed and the Center is licensed and
occupied, the Center is at any time not operated by
the Successor Owner or a qualified licensed Operator
selected by the Successor Owner for a continuous
period of six (6) months, or Successor Owner elects
not to operate the Center, Successor Owner shall
immediately notify the City in writing. Within one
year of the date of such notification by Successor
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Owner, the city shall have the right to select an
Operator to whom the Successor Owner has no reasonable
objection. It shall not be reasonable for Successor
Owner to object to an Operator selected by City if the
conditions set forth in subparagraphs 6(b}(3)(C}ei) -
(iv) exist. The Successor Owner shall be obligated to
lease the Center Space to the Operator selected by the
city within sixty (60) days after the date upon which
the City provides the Successor Owner with written
notice of the name, address, and description of the
experience and financial qualifications of the
proposed Operator and such other information on the
proposed Operator as the Successor Owner may
reasonably request. The failure of the Successor
Owner to object in writing to the operator selected by
city within said sixty (60) day period shall be deemed
to constitute the Successor Owner's approval thereof.
The Successor Owner shall be obligated to lease the
Center Space to the Operator selected by the City at a
rental rate specified by the City, which may be as low
as $1.00 per year, with the Operator being obligated
to pay all maintenance and repair costs, insurance
premiums and taxes and for a rental term to be
deternined by the City. If the rental term exceeds
five (5) years under an option or other agreement,
Successor Owner's approval must be obtained. If the
rental rate specified by the City exceeds $1. 00 per
year, such excess shall be paid to and divided equally
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between the City and the Successor Owner. otherwise,
such lease shall be on such reasonable other terms and
conditions as may be appropriate.
During any period that the Center is
not being operated, Successor Owner may use the Center
for its own limited purposes (e.g., storage or any
silni1ar activity that does not intensify the use of
the site). During any such period of use, Successor
Owner shall make no structural changes to the Center-
nor shall it place any encumbrances on the Center that
would prevent Successor Owner from vacating the Center
upon thirty (30) days' written notice.
(6) If the City's right to select
an Operator arises under the preceding subparagraph
(4) and the City fails to select an Operator to whom
the Successor Owner has no reasonable objection within
the prescribed one year period, above, or the City
fails to operate the Center for any continuous six
month period, the Successor Owner shall be released
from all obligations under this Paragraph 3 and all of
the Center Space shall automatically revert to the
Successor Owner. If such reversion occurs, Successor
Owner may use the site for any activity which does not
materially increase the intensity of use of the site
or require additional on-site parking_ Such use may
include storage or use as an ancillary facility by
then-existing occupants of the Building.
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(7) As used in this Amendment, the
term "First Priority Children" means children of
individuals employed in the Building, tenants of the
Building, or employees of the Successor Owner or any
of its subsidiaries or affiliates whose offices are
located in the City of Santa Monica or who live within
the City of Santa Monica or any future owner of the
Property or employees of a future owner of any
subsidiary or affiliate of a future owner of the
Property whose offices are located on the Property.
It is Successor owner's intent to benefit all of its
employees, regardless of income level, by providing
affordable chi1dcare services to First Priority
Children. As used in this Amendment, the term "Second
Priority Children" means children of residents of the
Ci ty. The parent or guardian of a Second Priority
child shall be required to show a driver's license or
identification card and a recent utility bill in order
to establish residency wi thin the City. If at any
time vacancies exceed nine (9) spaces, Successor Owner
shall notify the city in writing within thirty (30)
days and shall conduct a reasonable outreach effort
among residents in the City of Santa Monica to fill
such vacancies.
(8) When and if the Center has
enrollment capacity in excess of the First Priority
Children enrolled in the Center, such excess shall be
offered for use by children who are Second Priority
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Children, followed by non-priority children. The
enrollment fees and tuition for the Second Priority
and non-priority children shall be equal to or less
than the fees charged to Priority Children and/or the
equivalent value of such fees as an employee benefit.
Once a Second Priority or non-priority child has been
accepted for enrollment at the Center, such child
shall not be displaced for a higher priority child who
subsequently applies for enrollment.
(c) Site Review. site and interior floor
plans shall be subject to review and approval by the
Planning Commission. Such review and approval shall
take place within sixty (60) days of submission of
plans by Successor Owner.
4. Paragraph 7 shall read as follows:
7. Cotr~unity Space.
(a) Preparation of Community Space. The
communi ty Space shall be provided and ready for use
wi thin eighteen (18) months after a Certificate of
Occupancy is issued for the Building, and shall be
provided for the life of the Building, except as
provided under subparagraph (c) below. The Successor
Owner shall provide the following: finished perimeter
walls including doors and windows, vinyl floor tile
and wall base, acoustic tile ceiling, fluorescent
liqht fixtures, roughed-in plumbing for toilet rooms,
primary electrical service to the space, an allowance
of up to $4,000 for the heatinq and ventilating
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system, and fire sprinklers if required to meet Fire
Oepartment regulations. Although the Community Space
may be located contiguous to the Center Space, the
co~~unity Space shall have its own separate entrance
and shall share no common facilities with the Center
Space.
(b) Use and operation of Community Space.
The Successor Owner shall lease the Community Space to
the City on a long-term triple net lease at the rate
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of $1.00 per year. The community Space shall be used
and operated by the Cityts Recreation and Parks
Oepartment for public meetings and other public
recreational and civic activities.
The use of the
Communi ty Space shall not unduly interfere with the
operation of the Center and shall be compatible with
the operation of the Center.
(c)
Release of community Space.
If at
any time after completion of the Community Space the
City fails to use the Community Space on a continuous
basis for a one (1) year period, the Community Space
shall be released from all conditions herein and shall
revert to Successor Owner for any use selected by
Successor Owner that is compatible with the Building
and the Center.
(d) site Review. Site and interior floor
plans shall be subject to review and approval by the
Planning Commission. Such review and approval shall
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take place within sixty (60) days of submission of
plans by Successor Owner.
5. Paragraph 9 shall read as follows:
9. Arts and Social Services Fee.
(a) Off-Site Art. Successor Owner shall
pay to the Santa Monica Arts Foundation (the
t'Foundation") Twenty-Five Thousand Dollars
($25,000.00) for the acquisition of artwork which will
be placed in public places within the city at the
discretion of the Foundation, the Santa Monica Arts
Commission (the "Arts commission"), and the City
Council. Such sum shall be paid not later than 45
days following the date of final action by the City on
the Ordinance approving the Third Amendment to the
Development Agreement. Successor Owner shall have no
ownership interest in any artworks acquired by the
Foundation with such donated funds.
(b) On-site Art. Successor Owner shall
consult with the Arts Commission concerning the
selection and placement of artworks within the
proj ect. Final selection and placement of artworks
within the Project shall be in the sole discretion of
Property Owner. Neither the Arts Commission nor the
Foundation shall have any ownership interest in any
artworks within the Project.
(c) Homeless Services. Successor Owner
shall pay to the City not later than forty-five (45)
days following the date of final action by the City on
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the ordinance approving the Third Junendment to the
Development Agreement, the sum of Twenty-Five Thousand
Dollars e$2S,OOO.OO), which sum shall be used by the
City only for services to homeless persons or
families, or for the acquisition, construction,
rehabilitation, or operation of a facility to provide
services or temporary shelter for homeless persons or
families.
6. Status of Development Agreement.
Except as amended by this Amendment, the Development
Agreement, as amended by the First Amendment and Second
Anlendment, shall remain in full force and effect in accordance
with its terms and conditions. Notwithstanding the foregoing, in
the event of any inconsistency between this Al'llendment and the
Development Agreement, as amended by the First and Second
Amendments thereto, the applicable provisions of this Amendment
shall govern.
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Signed at Los Angeles County, California, as of
, 1988.
CITY OF SANTA MONICA,
a municipal corporation
By
JOHN JALILI
City Manager
APPROVED AS TO FORM:
ROBERT M. MYERS
city Attorney
NATIONAL MEDICAL ENTERPRISES, INC.
a Nevada corporation
By
RICHARD K. EAMER
Chief Executive Officer and
Chairman of the Board of
Directors
By
Its:
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COl:NTY OF LOS ANGELES
)
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)
ss.
STATE OF CALIFORNIA
On , 1988, before me, the
undersigned, a Notary Public in and for said State, personally
appeared John Jali1i, known to me to be the City Manager of the
C~ty of Santa Monica, a charter city, organized and existing
under the laws of the State of California, known to me to be the
city that executed the within Instrument, known to me to be the
person who executed the within Instrument on behalf of the City
therein named, and acknowledged to me that such City executed the
within Instrument pursuant to its Charter or ordinance of its
City Council.
WITNESS MY HAND AND OFFICIAL SEAL.
Notary Public
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STATE OF CALIFORNIA
ss.
COUNTY OF LOS ANGELES
On J 1988, before roe, the
undersigned, a Notary Public in and for said state, personally
appeared , personally known to me or proved to
me on the basis of satisfactory evidence to be the person who
executed the within instrument at
of the partners of the partnership that executed the within
instrument, and acknowledged to me that such partnership executed
the same.
WITNESS MY HAND AND OFFICIAL SEAL.
Notary Public
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