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HomeMy WebLinkAboutPA2021-260_20220207_General Indemnity and Defense AgreementGENERAL INDEMNITY AND DEFENSE AGREEMENT This General lndemnity and Defense Agreement ("Agreement") is made and entered into by and between Golf Realty Fund LP, a California limited partnership ("GRF"), and the City of Newport Beach, a California municipal corporation and charter city ("Gity"), for the purpose of indemnifying and defending the City from any legal actions or other challenges associated with the GRF's application for the tennis property located at Eleven Clubhouse Drive, Newport Beach, California 92660. GRF and the City are hereinafter referred to individually as "Party," and collectively as the "Parties." RECITALS WHEREAS, GRF is the Managing Owner of the leased fee of the Golf Club, Tennis Club, Bungalow, and Villa Sub Areas at the Newport Beach Country Club Planned Community District ("NBCC PGD"); WHEREAS, the Bungalow Sub-Area, the Tennis Club Sub-Area and the Villa Sub- Area are within the NBCC PCD ("Tennis Property"). GRF owns a fifty percent (50%) share of the Tennis Property, and purports to have the authority to submit applications on behalf of the Tennis Property; WHEREAS, GRF, as Managing Owner of the Tennis Property, proposes an amendment to the current land use entitlements for the Tennis Property as described in the project description attached hereto as Exhibit "A," and incorporated herein by reference (2021 Project"); WHEREAS, the land use entitlements required for the 2021 Project include a General plan amendment, PC text amendment, development agreement amendment, amendment to the tract map, major site development review amendment, limited term permit amendment, coastal development permit amendment, traffic study and compliance with the California Environmental Quality Act ("2021 Entitlements"); WHERAS, the City previously granted discretionary entitlements for the Tennis Property including a zone change, a General Plan Amendment to "Mixed Use Horizontal" approved by a Citywide vote of the citizens of Newport Beach, approval of the text for the Planned Community District for the Golf Club, Bungalow, Tennis Club and Villa Sub- Areas of the NBCC PCD, Vesting Tentative Tract Map 15347 and a Development Agreementforthe Tennis Property NBCC PCD Sub-Areas recorded on January 29,2014 in the Official Records of the County of Orange as Instrument Number #2014000036369 ("2012 Entitlements"); WHEREAS, Co-Owners previously challenged Managing Owner's authority to process entitlements with the Ci$, which resulted in a JAMs Arbitration. After a lengthy JAMs Arbitration, Judge Haley Fromholz entered his Final Award, which has been provided, and that gave Managing Owner the right to complete the 2012 Entitlements; WHEREAS, in 2016, when the City was processing a modification to the 2014 Entitlements, the representatives of the two other owners of the Tennis Property ("Co- Owners") wrote a letter dated September 30, 2016, to the City, a copy attached, stating, " ...we approve the expedited prccessing of the application for Tentative Parcel Map 2016- 151, submitted to the City of Newport Beach Planning Division on or about July 8, 2016" and Co-Owners also signed Tentative Parcel Map 2016-151 and Final Parcel Map 2016- 151; WHEREAS, Co-Owners continue to dispute whether GRF has the authority to submit an application for the 2021 Entitlements and other land use entitlements including a recent challenge to Minor Use Permit No. UP2021-033 as beyond the scope of Judge Fromholz Order; and WHEREAS, GRF has offered to indemnify and defend the City against any legal actions or other challenges that may be brought against the City arising from the City's processing of any applications, approvals, or permits for the Tennis Property. NOW, THEREFORE, in consideration of the mutual promises and covenants expressed herein, the receipt and sufficiency of which is acknowledged, the Parties agree as follows: 1. lndemnitv. From and after the date of this Agreement, GRF hereby agrees to indemnify, defend with counsel approved by the City, and hold harmless City, its City Council, boards and commissions, officers, agents, volunteers, and employees (collectively, the "lndemnified Parties") from and against any and all claims, demands, obligations, damages, actions, causes of action, suits, losses, judgments, fines, penalties, liabilities, costs and expenses (including, without limitation, attorneys' fees, disbursements, and court costs) of every kind and nature whatsoever which may arise from or in any manner relate (directly or indirectly) to the City's processing of applications, approvals, or permits related to the Final Entitlements at the Tennis Property. 2. Recitals. The Recitals to this Agreement are true and correct and are hereby incorporated by reference as a substantive part of this Agreement for all purposes. 3. No Attornevs' Fees. In the event of any dispute or legal action arising under this Agreement, the prevailing party shall not be entitled to attorneys'fees 4. Amendments. This Agreement may be modified or amended only by a written document executed by both GRF and the City and approved as to form by the City Attorney. 5. Controllino Law and Venue. The laws of the State of California shall govern this Agreement and all matters relating to it. Any action brought relating to this Agreement shall be adjudicated in a court of competent jurisdiction in the County of Orange, State of California. 6. Interpretation. The terms of this Agreement shall be construed in accordance with the meaning of the language used and shall not be construed for or against either Party by reason of the authorship of the Agreement or any other rule of construction which might othenruise apply. 2 7. Entire Aqreement. This Agreement contains all of the agreements between the Parties relating to the matters set forth in this Agreement. The Parties have no other agreements relating to these matters, written or oral. lN WITNESS THEREOF, the Parties have executed this Agreement on the dates indicated at their respective signatures below, the latest of which shall constitute the effective date of this Agreement. GOLF REALTY FUND, A Californ Date: ia li By: O Hill Capital, a California limited partnership its General Partner APPROVED AS TO FORM: CITY ATTORNEY'S OFFICEDate:_ By: Aaron C. Harp City Attorney ATTEST: Date: By: Leilani l. Brown City Clerk Attachments: Exhibit A - Project Description o Hiil,lPa'rtner CITY OF NEWPORT BEACH, a California municipal corporation Date: Grace K. Leung City Manager 3 Exhibit A Project Description NBCC Tennis Property Entitlement Amendment & Project Description The 145-acre Newport Beach Country Club Planned Community District (PCD) is in the Newport Center Planning Area and is comprised of the existing Golf Club Property and the Tennis Club Property, both located in the Ll Statistical Area of the 2006 General Plan. The Tennis Property is represented as Anomaly 46 inthe General Plan Land Use Element with a land use designation of MU-H3/PR with a California Coastal Development Permit and subject to a DevelopmentAgreement. The existing approved entitlements also consist of NBCC Planned Community Zoningwith the Bungalows, Villas, and Tennis Club/Spa/Fitness PC Sub-Areas and Vesting Tentative Tract Map No. 15347. There is no Amendment to any approved entitlement proposed for the Golf Club Sub-Area. Tennis Property Entitlement Amendments: . Increase the number of approved tennis courts by one (1) for a total of eight (8) approved tennis courts as shown on the revised Master Plan. . Amend the approved number of visitor-serving boutique hotel units from twenty-seven (27) to forty-one (41), increasing the visitor-serving use by fourteen (14) hotel units which are refened to as "The Bungalows & Lofts." . Add boutique hotel auxiliary uses to incorporate areas designed for Performance Therapy, Yoga Pavilion, and related Hotel/Spa/Fitness Office space on the first floor of the Bungalow Loft building shown on the revised Master Plan. . Eliminate three of the five residential homes, referred to as Villas C, D, and E, and replace them with three (3) Loft condominiums. . The Tennis Clubhouse and Fitness & Spa Building remain unchanged but the construction documents, which have been through three plan checks with the City, need to be brought up to the new Califomia Building Code requirements. . The Vesting Tract Map No. 15347, Final Vesting Tract Map No. 15347, and Improvement Plans have been revised to eliminate the three single family lots with homes, referred to as "Villas C, D, and E" on the existing approved entitlements and are replaced with two lots for the Fairway Lofts and Mayacama Bungalow as shown on the revised Master Plan. . The Development Agreement has been modified to reflect the above changes . The California Coastal Permit has been modified to reflect the above changes. Impacts The Traffic & Parking Study originally prepared by Kimley-Horn and Associates in August 2009 for the approved entitlements, was amended by LSA dated September 9, 2021to reflect the amended Project, and indicates that the revised project (i) still has more parking than is required and (ii)"the revised proposed project continues to generate fewer daily trips and p.m. peak-hour trips compared to the existing uses," (iii) ". ..does generate an increase of 5 trips in the a.m. peak- hour (4 inbound and I outbound) compared to existing uses. This increase, however is nominal and would not result in any operational or LOS deficiencies." The Fiscal and Economic Impact Study, completed by CBRE in July 2018, indicated that the approved entitlements will have a total economic impact of $24,153,000 annually for the City of Newport Beach and support 185 jobs. This also results in $842,400 in annual tax revenue for the City of Newport Beach. The financial impact is expected to increase pro rata, or approximately 52o/o, by the addition of l4 visitor serving Bungalows and/or Lofts in the revised project. This equates to $l ,280,448 of annual tax revenue for the City. The approved and the proposed Amendments to the entitlements are consistent with and supportive of the policies and goals of the Land Use Element of the 2006 General Plan and the certified Local Coastal Plan. Vesting Tentative Tract Map 15347 as presented, addresses relevant findings within Sec. 19.12.70 of Title l9 (Subdivisions) of the Municipal Code, and is consistent with the Tennis Club residential, boutique hotel and ancillary commercial uses permitted by the MU-H3/PR designation. Implementation The NBCC Tennis Property will be ground leased to a hotel developer who will be required to build the planned improvements substantially similar to the site improvements, Tennis Clubhouse, Spa & Fitness Center, and Villas A & B shown on the Construction Documents, and the Bungalows and Lofts shown on the Schematic Drawings. The developer will also be required to complete these improvements in one phase and to maintain the current operator of the Tennis Club, Grand Slam Tennis, as the operating Tenant. Grand Slam Tennis will keep the Tennis Club open during construction per the attached "Tennis Clubhouse Construction Plan."