HomeMy WebLinkAbout15 - Exclusive Negotiating Agreement for the Lease and Redevelopment of a Portion of the Balboa Yacht Basin Property Located at 829 Harbor Island DriveQ SEW Pp�T
CITY OF
z NEWPORT BEACH
c�<,FORN'P City Council Staff Report
July 23, 2024
Agenda Item No. 15
TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL
FROM: Seimone Jurjis, Assistant City Manager/Community Development
Director - 949-644-3232, sjurjis@newportbeachca.gov
PREPARED BY: Lauren Wooding Whitlinger, Real Property Administrator - 949-644-
3236, Iwooding@newportbeachca.gov
TITLE: Exclusive Negotiating Agreement with Burnham -Ward Properties,
LLC for the Lease and Redevelopment of a Portion of the Balboa
Yacht Basin Property Located at 829 Harbor Island Drive
ABSTRACT:
At the City Council study session on June 13, 2023, an overview of Balboa Yacht Basin
(BYB) property was presented to the City Council. The BYB was constructed in the late
1940s, and is a mixed -use property with a marina, shipyard and other commercial uses.
The improvements on a portion of the BYB have reached the end of their useful life and
require a significant investment to continue operating and generating revenue. City
Council directed staff to solicit proposals to ground lease and redevelop a portion of the
BYB. On April 9, 2024, during a study session, City Council was presented with two
proposals for the BYB redevelopment and directed staff to proceed with the proposal from
Burnham -Ward Properties, LLC (BWP), perform public outreach, and return to Council
with an agreement. For the City Council's consideration is a two-year exclusive
negotiating agreement (ENA) (Attachment A), between the City and BWP, to allow
negotiation of a lease agreement for a portion of the BYB for redevelopment of the
property.
RECOMMENDATIONS:
a) Find this action is exempt from the California Environmental Quality Act (CEQA)
pursuant to Sections 15060(c)(2), 15060(c)(3), and 15378 of the CEQA Guidelines,
because this action is not a project and has no potential to have a significant effect
on the environment; and
b) Authorize the City Manager and City Clerk to execute a two-year Exclusive
Negotiating Agreement with Burnham -Ward Properties, LLC, for negotiation of a
lease for redevelopment of a portion of the City -owned Balboa Yacht Basin property
located at 829 Harbor Island Drive, in a form substantially similar to the agreement
attached to the staff report.
DISCUSSION:
Balboa Yacht Basin
BYB is located at 829 Harbor Island Drive, Newport Beach, and includes a 172-slip
marina, on -site parking, a shipyard and marine store, a restaurant, offices, three
residential apartments and storage garages, which the City leases to various tenants.
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Exclusive Negotiating Agreement for the Lease and Redevelopment of
a Portion of the Balboa Yacht Basin Property Located at 829 Harbor Island Drive
July 23, 2024
Page 2
The building on the north end of the site (highlighted in aerial below) (Premises) was built
in the 1940s and contains approximately 14,362 square feet of improvements on
approximately 17,500 square feet of land.
BYB with proposed redevelopment area highlighted.
The tenant uses in the Premises include the Galley Cafe restaurant, three office tenants,
three residential apartment units, and 32 storage garages. The Premises also includes a
small 0.05-acre park (Myrtle Park) and various amenities and spaces to support operation
of the marina and property, including restrooms and showers, oil collection, impounded
vessel storage, and janitorial and utility closets.
The buildings within the Premises have reached the end of their useful life and require
substantial investment to continue operating or to renovate.
Request for Proposals
In June 2023, the City Council was provided an overview of the BYB at a study session
meeting and directed staff to solicit proposals from developers interested in ground
leasing the Premises to redevelop, lease and operate the aged structures. In December
2023, the City issued a Request for Proposals (RFP) No. 24-19, seeking proposals from
qualified parties interested in ground leasing and redeveloping the Premises.
Two proposals were received and vetted through the City's formal RFP evaluation
process. At the study session on April 9, 2024, both proposals were presented to the City
Council for consideration:
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Exclusive Negotiating Agreement for the Lease and Redevelopment of
a Portion of the Balboa Yacht Basin Property Located at 829 Harbor Island Drive
July 23, 2024
Page 3
1. The proposal from BWP proposed to replace or substantially remodel the existing
buildings, retain and potentially add outdoor dining space for the Galley Cafe,
expand the number and square footage of office units, expand the number and
square footage of storage units, enhance Myrtle Park, and continue to provide
marina -related amenities like restrooms and showers, and oil collection facilities.
BWP proposed to oversee and finance the redevelopment project and manage the
leasing and property management of the tenant spaces under a long-term ground
lease, with a portion of the revenues paid to the City.
2. The second proposal from Basin Neighborhood Partners, LLC, proposed to
remove the existing buildings and construct 10 new single-family residences,
expand Myrtle Park, construct a new public park, provide two small office units,
continue to provide marina -related amenities like restrooms and showers, provide
approximately 40 small storage units, and proposed to leave the restaurant related
improvements as -is and exclude Galley Cafe from the proposed project. Under its
proposal, Basin Neighborhood Partners, LLC would develop and sell the homes,
with the land for each residence ground leased to the home buyer by the City with
annual rent revenue paid to the City, similar to the nearby Beacon Bay
neighborhood.
Ultimately, the City Council directed staff to proceed with the proposed project from BWP,
to replace the existing facilities with an equivalent use, eliminate the existing residential
units, and preserve the Galley Cafe and other marine -related amenities.
Public Outreach
In addition to directing staff to proceed with BWP, City Council directed staff to perform
public outreach. Information about the BYB, its existing condition, the proposed scope of
the redevelopment project, the proposal from BWP, a community survey, and information
about a townhall meeting were posted to the City's website in early May 2024. Postcards
with the townhall information and a link to the website and to the survey were mailed to
all BYB tenants and residents in the nearby neighborhoods of Beacon Bay, Promontory
Bay, and Harbor Island Road in May, with a reminder postcard sent in early June.
A townhall meeting was held on June 17, 2024, to collect additional community input on
the proposed redevelopment project and the proposal from BWP. The meeting was well
attended, and many attendees provided comments during the meeting. Attendees shared
their concerns regarding the proposed project by BWP, including availability of parking
during peak summer months, whether the new storage unit configuration would be easily
accessible and large enough to accommodate the items currently stored in the garages,
and the impact of additional building height and office density to the views and street
parking for nearby homeowners.
As of the date of the townhall, the City received 88 responses to the survey. The survey
responses were aggregated and shared with the attendees of the townhall meeting and
BWP.
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Exclusive Negotiating Agreement for the Lease and Redevelopment of
a Portion of the Balboa Yacht Basin Property Located at 829 Harbor Island Drive
July 23, 2024
Page 4
Several themes emerged from the survey responses, including a request to limit the
project height to be consistent with the current structures, providing exterior access to the
new storage units, providing a sidewalk along Harbor Island Drive, improving security in
the marina, and providing more marina amenities like Wi-Fi, an ice machine and coffee
cart. Concern over the proposed project's impacts to parking and trash were also
consistently included in the survey responses. Upon approval of the ENA, BWP will work
to incorporate feedback from the survey results and community into its redevelopment
plan and in negotiating the terms of the ground lease.
California Surplus Land Act
Assembly Bill 1486 was signed into law in 2019, went into effect in 2020, and made
significant changes to the California Surplus Land Act (SLA) (Government Code §54222).
With further updates to the legislation in 2024, and in compliance with §54221(b)(4), this
staff report shall serve as the published notice, which is available for public comment, that
upon City Council approval of this item, the Premises shall be considered "exempt surplus
land" no less than 30 days from July 23, 2024, after which time the City may proceed with
leasing the Premises. The effective date of the proposed ENA shall be no earlier than
August 22, 2024. Additionally, pursuant to the requirements under the SLA guidelines,
notice of this report will also be submitted to the entities that have notified the California
Department of Housing and Community Development of their interest in surplus land as
required by SLA.
Exclusive Negotiating Agreement
The ENA establishes a period of time during which the City and BWP will cooperate to
refine the proposed project and provides BWP exclusive right to negotiate a lease
agreement, as summarized below:
1. The length of the agreement will be for two years, with up to one six-month
extension option, unless terminated as provided by the agreement.
2. The following non-exclusive list of items shall be the subject of negotiations during
the term of the agreement:
a. Annual ground lease payment to the City;
b. Scope of development for redevelopment of the Premises;
c. Site plan, elevations and utility plan depicting the building locations, size,
uses, parking, access, landscaping and circulation;
d. Pro forma for the project;
e. Financing plan for the project;
f. Assessment of the condition of the existing improvements and scope of any
necessary abatement work;
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Exclusive Negotiating Agreement for the Lease and Redevelopment of
a Portion of the Balboa Yacht Basin Property Located at 829 Harbor Island Drive
July 23, 2024
Page 5
g. Scope of entitlements required for the project; and
h. Schedule for the project.
3. The City and BWP shall negotiate the terms of a lease agreement during the term
of the ENA to achieve the objectives and tasks described in the agreement.
4. BWP shall be responsible for all costs and expenses incurred by the City related
to the agreement, including the cost of staff time, consultant fees, and attorneys'
fees, and shall submit a deposit to the City, to be used to cover said costs.
5. Prior to entering the site to perform any investigations, BWP shall provide
certificates of insurance to the satisfaction of the City's risk manager, naming the
City as additional insured.
The ENA has been prepared by the City Attorney's Office . BWP has reviewed the terms
of the ENA.
FISCAL IMPACT:
There is no fiscal impact related to this item. If approved, staff will return with a lease
agreement that will include a detailed analysis of the revenues related to the BYB.
Revenues collected for the existing tenants will continue to be posted to the Tidelands
Fund (10050505), Tidelands Capital Fund (10103), and General Funds (01050505)
accounts in the Community Development Department. The revenues collected from the
existing tenants are included in the budget for fiscal year 2024-2025.
ENVIRONMENTAL REVIEW:
Staff recommends the City Council find this project exempt from the California
Environmental Quality Act (CEQA) pursuant to Sections 15060(c)(2) (the activity will not
result in a direct or reasonably foreseeable indirect physical change in the environment)
and 15060(c)(3) (the activity is not a project as defined in Section 15378) of the CEQA
Guidelines, California Code of Regulations, Title 14, Chapter 3, because it has no
potential for resulting in physical change to the environment, directly or indirectly.
NOTICING:
The agenda item has been noticed according to the Brown Act (72 hours in advance of
the meeting at which the City Council considers the item).
ATTACHMENT:
Attachment A — Exclusive Negotiating Agreement
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Attachment A
Exclusive Negotiating Agreement
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EXCLUSIVE NEGOTIATING AGREEMENT WITH BURNHAM-WARD
PROPERTIES, LLC
This EXCLUSIVE NEGOTIATING AGREEMENT (the "Agreement") is made and entered into
to be effective as of , 2024 ("Effective Date"), by and between the City of Newport
Beach, a California municipal corporation and charter city ("City"), and Burnham -Ward Properties
LLC, a California limited liability company ("Developer"). City and Developer are sometimes
hereinafter individually referred to as a "Parry" and collectively as the "Parties."
RECITALS
A. City is a municipal corporation and charter city duly organized and validly existing under
the laws of the State of California with the power to carry on its business as it is now being
conducted under the statutes of the State of California and the Charter of the City.
B. City is the owner of certain real property frontage and tidelands, together with certain
abutting upland property commonly known as "Balboa Yacht Basin", located in the City
of Newport Beach, County of Orange, State of California, having County Assessor's Parcel
Number 050-210-02. The Balboa Yacht Basin located at 829 Harbor Island Drive, Newport
Beach, California includes a public marina, public restrooms, shipyard, parking lot, garage
buildings used for storage, and building with residential apartments, offices, and a
restaurant ("Property"), as legally described and further depicted on Exhibit "A" attached
hereto and incorporated herein by reference.
C. Developer proposes to plan, design, permit, fund, and construct renovations to manage and
maintain the buildings which are located on a certain portion of the Balboa Yacht Basin at
the north side of the parcel depicted in Exhibit `B" which is attached hereto and
incorporated herein by reference to this Agreement ("Site") and provide those services over
the course of a 50-year lease term ("Proposal").
D. The Proposal is subject to refinement and modification as mutually agreed to by the Parties
during negotiations.
E. The Parties desire to enter into this Agreement to establish a period during which they will
cooperate to explore the feasibility of refining the Proposal and during which time
Developer shall have the exclusive right to negotiate the Proposal with City with respect
to the terms of an agreement or agreements to provide for the Proposal ("Proposed Lease").
NOW, THEREFORE, it is mutually agreed by and between the Parties as follows:
1. Term of Agreement. The term of this Agreement ("Term") shall be two (2) years
after the Effective Date; provided, however, that the City Manager and Developer shall have the
right to approve an extension of the Term for a cumulative maximum of six (6) months without
the requirement of any official action by the City Council if the City Manager determines that
satisfactory progress is being made to achieve the objectives and complete the tasks set forth herein
additional time is necessary to finalize discussions or negotiations on mutually satisfactory terms.
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2. Proposal Terms. The following nonexclusive list of items related to the Proposal
are the subject of negotiations during the Term:
(a) annual ground lease payment from the Developer to the City for the Site;
(b) scope of development, the cost of which shall be borne solely by Developer,
for the redevelopment of the Site;
(c) preparation by the Developer of a detailed site plan, elevations, and utility
plan, as applicable, for the Proposal that depicts the proposed building locations,
elevations, building square footages and uses, parking, access points, landscaped areas,
pedestrian and vehicular circulation, and utility relocation;
(d) preparation of a pro forma provided by Developer and reviewed by the City
for the Proposal that details satisfactory evidence of Developer's ability to finance and
complete the Proposal including anticipated rents, estimated profit, appropriate return
measurements, development and operational costs that includes (i) all costs of abatement
and demolition and development of the buildings on the site; (ii) all costs associated with
utility replacement and/or relocation to serve the site; (iii) all costs associated with possible
work or modifications on and adjacent to the site and (iv) all other terms including Site
taxes, possessory interest or other taxes and percentage rent on sales;
(e) financial plan provided by Developer and reviewed by the City for the
Proposal addressing the proposed methods of construction, permanent financing, and
amounts and sources of equity and debt capital;
(f) assessment of the physical and environmental condition of the Site
conducted by the Developer and scope of work necessary for the renovation and/or
demolition of the existing building including abatement of any asbestos and/or lead, the
cost of which shall be borne solely by Developer; and
(g) development schedule for the Proposal.
3. Submission of Documents for Review and Comment.
3.1 Within one hundred twenty (120) days of the Effective Date of this
Agreement, Developer shall submit the following information to the City or its agents:
(a) detailed scope of development, site plan, elevations, and utility plan (as
applicable) that incorporates the information specified in Sections 2(b) and 2(c) of this
Agreement;
(b) detailed pro forma that incorporates the information specified in Section
2(d) of this Agreement;
(c) detailed financing plan that incorporates the information specified in
Section 2(e) of this Agreement; and
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(d) development schedule for completion of the Proposal.
In the event that the City requests changes to the aforementioned documents or additional
information, Developer shall provide the information requested or resubmit a revised site plan, pro
forma, financing plan, scope of development, and/or development schedule to the City within
thirty (30) days of City's written request. The City shall review and either approve such
submissions or return the submissions to Developer for further revision as soon as practical but, in
any event, within forty-five (45) days.
Developer acknowledges and agrees that design and architectural review by the City and its
consultants will be required at each stage of review of the Proposal and that sketches, plans, and
ultimately working drawings, specifications and similar documents will be required to be
submitted for review and approval ("City's Design Review"). Developer further acknowledges
and agrees that the City, acting not as a Party but under its general police powers as a charter city
and municipal corporation, may conduct all applicable review and that building design, including,
but not limited to, the selection of building elevations, construction materials, parking layout and
landscaping, which will not be final until approved by the City pursuant to Newport Beach
Municipal Code including, but not limited to, Title 20 (Planning and Zoning) and Title 21 (Local
Coastal Program Implementation Plan). Developer acknowledges and agrees that the City's Design
Review rights provided herein, are distinct and separate from those additional rights which the
City may exercise under its general police powers as a municipal corporation and charter city.
3.2 City shall submit the following information to Developer:
(a) Within thirty (30) days of the Effective Date of this Agreement, City shall
submit copies of reports, studies, surveys, leases and other data and information, if any,
that the City has in its possession; and
(b) Within one hundred twenty (120) days after the Submission of Documents,
City shall deliver an appraisal of the Site for purposes of establishing the amount of rent
payable to the City to lease the Site.
4. Good Faith Negotiations. During the entire Term of this Agreement, City and
Developer shall negotiate in good faith pursuant to the terms set forth herein to achieve the
objectives and accomplish the tasks described in this Agreement. Nothing herein shall be deemed
a covenant, promise, or commitment by either Party to approve or enter into a Proposed Lease
with the other Party on any particular terms or conditions. The Parties' approval and execution of
this Agreement is merely an agreement with respect to certain tasks preliminary to the execution
of the Proposed Lease and an agreement to enter into a period of negotiations according to the
concepts presented herein, reserving full and final discretion with City and Developer as to the
final terms of the Proposed Lease as required by law. If, for any reason, City and Developer have
not each executed a mutually acceptable Proposed Lease by the expiration of this Agreement, and
provided that the Parties have not committed a material default hereunder, this Agreement shall
automatically terminate and shall be of no further force or effect.
During the period of exclusive negotiation, the City agrees to negotiate exclusively with
the Developer during the Term of this Agreement to the extent permitted by law and shall not
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solicit another party for the Property or enter into any agreement with any other party regarding
the development of the Property. The City acknowledges and agrees that but for this exclusivity,
the Developer would not have entered into this Agreement.
5. Administrative Costs and Expenses; Developer Deposit. Developer shall be
responsible for all costs and expenses incurred by the City related to this Agreement including, but
not limited to, costs of City staff time, consultant fees and attorneys' fees. Prior to City's execution
of this Agreement, Developer shall deposit with City an initial sum of Twenty -Five Thousand
Dollars ($25,000.00) ("Deposit Amount") that the City will use to reimburse itself for the costs
related to the preparation and implementation of this Agreement. Said funds shall be maintained
in a separate account by the City ("Deposit Account"). Within ten (10) business days of a request
by the City, Developer shall deposit additional sums to replenish the Deposit Account so that the
amount of funds on deposit with the City is maintained at Twenty -Five Thousand Dollars
($25,000.00). From and after the Effective Date, the Deposit Account may be used by the City to
pay the City's costs including, without limitation, City staff time, consultant fees and attorneys'
fees required in connection with the drafting, negotiation and execution of this Agreement, the
Proposed Lease, or termination of this Agreement ("City Transaction Expenses") provided that
City agrees that City Transaction Expenses to be charged Developer shall not exceed Fifty
Thousand Dollars and 00/100 ($50,000.00) prior to execution of the Proposed Lease.
6. Land Use & Environmental Requirements. The development of the Proposal shall
be subject to all rules, regulations, standards, and criteria required by law and as set forth in the
City's General Plan, Coastal Land Use Plan, Newport Beach Municipal Code, the California
Environmental Quality Act, this Agreement, and the Lease. Developer shall be responsible for
obtaining all approvals and entitlements necessary for the Proposal. Developer shall be also be
responsible for all costs related to the Proposal incurred, including, but not limited to, City staff
time, consultant fees, and other fees, associated in any way with obtaining necessary approvals
and entitlements for the Proposal including the environmental review associated with the Proposal
including, but not limited to, compliance with the California Environmental Quality Act
(collectively, "Costs"). Developer shall place funds on deposit with the City to pay for the Costs
pursuant to the City's fee schedule.
7. Physical Condition of the Site. City and Developer shall cooperate and exchange
such information as may be available to either of them regarding the physical condition of the Site
(or applicable portions thereof).
7.1 Entry for Investi ag tion. Subject to the conditions hereafter stated and the
rights of tenants in possession, City grants to Developer, its agents, employees, and consultants a
limited license to enter upon any portion of the Property, at a time and manner reasonably approved
by City and to minimize disruption or interference with any tenants, for the purpose of conducting
engineering surveys, soil tests, investigations or other studies reasonably necessary to evaluate the
condition of the Property, which studies, surveys, investigations and tests shall be done at
Developer's sole cost and expense. Developer shall (a) notify City at least two (2) business days
prior to each entry of the date and purpose of intended entry and provide to City the names and
affiliations of the persons entering the Property; (b) conduct all studies in a diligent, expeditious
and safe manner and not allow any dangerous or hazardous conditions to occur on the Property
during or after such investigation; (c) comply with all applicable laws and governmental
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regulations; (d) keep the Property free and clear of all materialmen's liens, lis pendens and other
liens arising out of the entry and work performed under this paragraph; (e) maintain or assure
maintenance of workers' compensation insurance (or state approved self-insurance) on all persons
entering the Property in the amounts required by the State of California; (f) provide to City prior
to initial entry a certificate of insurance evidencing that Developer has procured and paid premiums
for an all-risk public liability insurance policy written on a per occurrence and not claims made
basis in a combined single limit of not less than TWO MILLION DOLLARS ($2,000,000.00)
which insurance names City, its City Council, boards and commissions, officers, agents, volunteers
and employees, and City's property manager, Bellport Group, Inc. ("Property Manager"), and any
subsequent property managers (hereinafter "Indemnified Parties") as additional insured entitled to
not less than thirty (30) days cancellation notice and is primary and non-contributing with
insurance carried by Developer; and (g) return the Property to its original condition following
Developer's entry. If requested by City in writing, Developer hereby agrees to provide to City a
true and complete copy of all finalized tests, reports, studies and the like generated in connection
with Developer's inspection of the Property. Developer agrees to indemnify, defend, protect and
hold the Indemnified Parties and the Property free and harmless from any and all loss, liability,
claims, damages, liens and expenses (including but not limited to attorneys' fees and costs) arising
directly or indirectly from the active negligence or willful misconduct by Developer in the exercise
of said license, or from Developer's failure to comply with the conditions to Developer's entry onto
the Property provided herein. Which undertaking of indemnity shall expire two (2) years from the
termination of this Agreement. The limited license herein granted shall be coextensive with the
term of this Agreement or any extension thereof.
8. Hazardous Material Assessment. The Proposed Lease may address applicable
clean-up issues, if any. In the event an environmental audit evidences a need for clean-up of any
portion of the Site, the City, by this Agreement, does not agree in any respect to undertake or
complete such clean-up. In the event that during the Term, the Developer conducts or causes to be
conducted any environmental audits and/or testing on any portion of the Site, the Developer shall
submit copies of any reports resulting from such tests or studies to the City. Such environmental
audits and/or testing shall be conducted at the sole cost and expense of the Developer. Neither
Party makes any representation or warranty as to the accuracy or completeness of reports prepared
by third parties and delivered to the other Party. Developer shall indemnify, defend and hold
harmless City from and against all claims, liabilities or damages, and including expert witness fees
and reasonable attorneys' fees and costs, arising out of any such testing, inspection or investigatory
activity on the Site by Developer. In addition, following any such testing, inspection or
investigatory activity, Developer shall return, and repair if necessary, the Site to the condition it
was in prior to the Developer's investigatory activities.
9. Miscellaneous.
9.1 Notices. Any notices, requests or approvals given under this Agreement
from one Party to another may be personally delivered or deposited with the United States Postal
Service for mailing, postage prepaid, to the address of the other Party as stated in this paragraph,
and shall be deemed to have been given at the time of personal delivery or, if mailed, on the third
day following the date of deposit in the course of transmission with the United States Postal
Service. Notices shall be sent to the following addresses:
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To City: City of Newport Beach
Community Development Department
100 Civic Center Drive
Newport Beach, CA 92660
With a copy to: City of Newport Beach
City Attorney
100 Civic Center Drive
Newport Beach, CA 92660
To Developer: Burnham Ward Properties LLC
Attn: Scott Burnham
860 Newport Center Drive, Ste. 100
Newport Beach, CA 92660
9.2 Termination. Each Party reserves the right to terminate this Agreement,
with or without cause, upon ten (10) days prior written notice to the other Party, thereby
withdrawing from such negotiations without any liability to the other Party, except that (i) each
Parry shall be obligated to promptly return to the other Party all information and materials which
such Party has received from the other Party pursuant to this Agreement and (ii) the rights and
obligations of the Parties set forth in Section 9.3 shall remain in full force and effect. The Parties,
by their respective execution hereof, knowingly agree, notwithstanding anything herein to the
contrary, that, except with respect to the rights and obligations set forth in Section 9.3 hereof,
neither of them shall have any right to specific performance of this Agreement, nor any other
equitable or damage remedies of any nature under the law. Each Party makes such release with
full knowledge of Civil Code Section 1542 and hereby waive any and all rights thereunder to the
extent of this release, if such Section 1542 is applicable. Section 1542 of the Civil Code provides
as follows:
"A general release does not extend to claims which the creditor does
not know or suspect to exist in his or her favor at the time of executing
the release, which if known by him or her must have materially
affected his or her settlement with the debtor."
9.3 Developer Documents. In the event of termination of this Agreement, for
any reason including, but not limited to, expiration, termination or breach of this Agreement,
Developer shall deliver to the City, within ten (10) business days following written request from
the City, a copy of all surveys, soils/environmental reports, site plans, pro forma, and other
documents prepared by Developer or third parties that are associated in any way with this
Agreement. Notwithstanding the foregoing, in no event, however, shall Developer be obligated to
make available (or cause to be made available) any proprietary or confidential documents
including reports or studies that have been superseded by subsequent reports or studies, or any of
the following confidential and proprietary materials: (1) information contained in financial
analyses or projections (including Developer's budgets, valuations, cost -basis information and
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capital account information); (2) material that is subject to attorney -client privilege or that is
attorney work product; (3) organizational, financial and other documents relating to Developer or
its affiliates (other than evidence of due authorization and organization, and the financing plan
required under this Agreement); or (4) material that Developer is legally required not to disclose
other than by reason of legal requirements voluntarily assumed by Developer after the Effective
Date. Developer makes no representation or warranty as to the accuracy or completeness of reports
prepared by third parties and delivered to the City.
9.4 Cooperation. The Parties agree to cooperate with each other in promptly
supplying information and analyses relating to the Proposal.
9.5 Assignment. Neither Party shall have the right to assign any of their rights
or obligations set forth in this Agreement.
9.6 Entire Agreement, Amendments, and Waivers. This Agreement sets forth
the entire agreement between the Parties with respect to the subject matter set forth herein and
supersedes all prior discussions and negotiations between the Parties with respect thereto. No
amendment to this Agreement shall be effective unless set forth in a writing signed by an
authorized signatory of each Party. No waiver of any provision of this Agreement shall be
enforceable against a Party unless it is set forth in a writing executed by such Party.
9.7 Assurances to Act in Good Faith. The City and Developer each agree to
take all actions contemplated by this Agreement, including timely depositing funds as required
herein, and shall use their respective best efforts to negotiate a Proposed Lease in accordance with
the provisions of this Agreement.
9.8 Attorneys' Fees. In the event of any litigation between the Parties arising
out of or concerning this Agreement, the prevailing Party shall not be entitled to recover from the
other Party its actual and reasonable attorneys' fees.
9.10 Governing Law. This Agreement shall be governed by the laws of the State
of California. Any legal action brought under this Agreement must be instituted in the Superior
Court of Orange County, State of California, in an appropriate court in that county, or in the Federal
District Court in the Central District of California.
9.11 Purpose of Agreement. It is expressly understood and agreed by the Parties
that this is an Agreement regarding the conduct of good faith contract negotiations only and does
not convey any interest in the Site whatsoever. This Agreement is not intended to constitute a
binding agreement by the City to lease the Site or commit the City to develop all or any portion of
Site, to financially participate with the Developer in the development of the Proposal, nor is it
intended to constitute a binding agreement to enter into a Proposed Lease or any other contract.
No Party shall be legally bound to consummate construction of the Proposal unless and until a
Proposed Lease or other contract has been executed and delivered by the Parties. Notwithstanding
any other provision hereof, neither the Developer nor the City shall be under any obligation to
approve or execute any Proposed Lease during or upon conclusion of this Agreement. Any Party
may refuse to approve and execute any Proposed Lease at its sole and absolute discretion, with or
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without cause. In the event that a Proposed Lease is approved and executed by the Parties, this
Agreement shall be superseded by such Proposed Lease. It is expressly understood that
notwithstanding this Agreement, the Proposal may be modified or not implemented at all
depending on a number of factors including but not limited to compliance with the California
Environmental Quality Act.
9.12 No Commissions. The City shall not be liable for any real estate
commission or any broker's fees which may arise in relation to the Proposal. The City represents
that it has engaged no broker, agent, or finder in connection with this transaction, and the
Developer agrees to hold the City harmless from any claim by any broker, agent, or finder retained
by the Developer.
Agreement.
9.13 Time of Essence. Time is of the essence of each provision set forth in this
[SIGNATURES ON FOLLOWING PAGE]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement to be effective
as of the date first set forth hereinabove.
APPROVED AS TO FORM:
By:
Aaron C. Harp
City Attorney
ATTEST:
By:
Leilani I. Brown
CITY OF NEWPORT BEACH, a
California municipal corporation and charter
city
By:
Grace K. Leung
City Manager
DEVELOPER:
Burnham -Ward Properties LLC, a California
limited liability company
Un
Scott Burnham
Its: Manager
Attachment: Exhibit A — Property Description
Exhibit B — Property Depiction
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EXHTRIT A
PROPERTY DESCRIPTION
A parcel of land situated in the Northwest quarter (NW 1/4) of Section Thirty Five (35), Township
Six (6) South, Range Ten (10) West, S.B.B.& M., Orange County, California, more particularly
described as follows, to -wit:
Beginning at a point in the U.S. Bulkhead line between Station No. 200 and Station No. 101 as
shown upon a map entitled "Harbor Lines, Newport Bay Harbor, California," approved May 2,
1936, by the Secretary of War, and on file in the office of the U.S. District Engineer at Los Angeles,
California, said point of beginning being East 754.25 feet of said bulkhead Station No. 200,
running thence North 424.71 feet to a point in the Northerly line of that certain parcel of land
conveyed to City of Newport Beach by the Irvine Company, as described in a deed recorded
September 25, 1929, in Book 306, Page 375, of official records of Orange County, California;
thence South 85' 43' East 772.15 feet to the Northeasterly corner of the last mentioned parcel of
land; thence South along the Easterly line of the last mentioned parcel of land 367.01 feet to a
point in said U.S. Bulkhead line between Station No. 200 and Station No. 101, thence West along
said bulkhead line 770 feet to the point of beginning, containing approximately seven (7) acres.
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EXHIBIT B
PROPERTY DEPICTION
Aerial Vicinity Map
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TIDELANDS BOUNDARY MAP
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Balboa Yacht Basin Site Plan
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