Loading...
HomeMy WebLinkAbout21 - Marinapark Resort ProjectCITY OF NEWPORT BEACH CITY COUNCIL STAFF REPORT Agenda Item No. 21 March 11, 2003 TO: HONORABLE MAYOR AND MEMBERS OF THE CITY COUNCIL FROM: City Attorneys Office Robert Burnham, City Attorney 644 -3131, rbumham @city.newport- beach.ca.us SUBJECT: Marinapark Resort Project Proposed Amendment to Sutherland Talla Hospitality Agreement ISSUE: Should the City Council approve amendments to the agreement between the City and Sutherland Talla Hospitality (Amended Agreement) consistent with the recommendations of the Ad Hoc Committee and the action of the City Council on February 25, 2003. RECOMMENDATION: If desired approve Amended Agreement (Exhibit 1) between the City and Sutherland Talla Hospitality (STH). DISCUSSION: On February 25, 2003, the City Council directed the City Attorney to prepare amendments to the existing STH Agreement that would (a) confirm that the City will prepare an EIR for the Project; (b) establish a process whereby the Project would be submitted to the voters after the EIR is certified. This office drafted an Amended Agreement that we believe is consistent with Council direction and a copy is attached as Exhibit 1. CEQA COMPLIANCE: CEQA does not require the preparation of an environmental document for the approval of the Amended Agreement. S mitted by: Robert Burnham City Attomey F:\users \cat\shared \da \C CS taffReports\Ma d na parkSTHa mendAg. d oc AMENDED AGREEMENT This Agreement (Amended Agreement) between the City of Newport Beach (City) and Sutherland Talla Hospitality LLP (STH), dated this 11"' day of March 2003 is made with reference to the following: RECITALS A. City is the owner and /or grantee of certain property in the City of Newport Beach that is commonly known as Marinapark (Property) and is depicted in Exhibit "A." B. The Property is currently improved with a mobilehome park, improvements leased to the American Legion and the Girl Scouts, four tennis courts and metered public parking facilities. C. In November 1999, the City issued a Request for Proposals (RFP) to determine private sector interest in redevelopment of the Property, the possible uses of the Property and the benefits of various redevelopment concepts. The City received eight (8) responses to the RFP and five (5) responses to a subsequent request for supplemental information. D. In response to the RFP, STH submitted a proposal to construct a luxury hotel and accessory improvements on the Property (Proposal). E. On August 22, 2000, the City Council determined that the STH Proposal was the most responsive to the RFP. City selected STH as the entity responsible for participating in the processing of the Proposal and the entity with which the City would engage in exclusive negotiations for a long -term ground lease assuming the Proposal receives all required approvals. F. On December 11, 2000, the Parties entered into an Agreement with respect to the processing of the Proposal that was amended on March 12, 2002 (collectively the Original Agreement). The Original Agreement required STH to submit, and the City Council to approve for purposes of the California Environmental Quality Act (CEQA), a "proposed project' consistent with the Proposal. G. On January 13, 2003, STH submitted a "proposed project' represented by a site plan and related zoning documents that assume the construction of a 110 room resort and small marina on a portion of the Property. H. On February 25, 2002, the City Council determined that the "proposed project" would be considered the "Project' for purposes of compliance with the CEQA and directed the City Attorney to prepare amendments to the Original Agreement to modify the manner in which the Proposal is processed to, among other things, EXHIBIT 1 require that the Proposal be submitted to the voters after the City Council certifies an Environmental Impact Report (EIR). I. The Parties have also determined that no significant modification needs to be made to the provisions of the Original Agreement relative to the obligations of the City to deal exclusively with STH relative to redevelopment of the Property and the obligation on the part of the City and STH to negotiate in good faith in an effort to reach agreement on a long term ground lease pursuant to which STH would construct the Project. NOW, THEREFORE, THE PARTIES AGREE AS FOLLOWS: I. PROJECT APPROVALS A. PROJECT APPROVALS. The Parties acknowledge that the proposed redevelopment of the Property consistent with the proposal will require various approvals and permits from agencies with jurisdiction over the Property. Permits or approvals will or may be required from the City, the California Coastal Commission and the State Lands Commission. The following is a list of actions, permits and /or approvals that are, or may be, required before STH would be able to construct the Project (these actions are sometimes collectively referred to as Project Approvals): (1) Amendment of the Land Use Element and the Recreation and Open Space Element of the Newport Beach General Plan; (2) Amendment of the Newport Beach Zoning Ordinance and /or adoption of a Planned Community Development Plan; (3) Amendment of the Land Use Plan of the Newport Beach Local Coastal Program; (4) Approval of a Traffic Study pursuant to the provisions of Chapter 15.40 of the Newport Beach Municipal Code (NBMC); (5) Approval of a Mobile Home Relocation Impact Report pursuant to Section 65863.7 of the State Zoning and Planning Act; (6) Approval of an environmental document pursuant to the California Environmental Quality Act (CEQA) and the CEQA Guidelines; (7) Approval of Commercial Harbor Activities Permit and /or Harbor Permit; (8) Approval of a Coastal Development Permit; (9) Approval of the State Lands Commission; IPA (10) Approval of along term ground lease between the City and STH. B. VOTER APPROVAL OF AMENDMENTS. The Parties agree that the Project will require an amendment to the Newport Beach General Plan (General Plan) and the Land Use Plan of the Local Coastal Program (LUP). While the Project would probably not require voter approval pursuant to Section 423 of the Newport Beach City Charter if the amendments to the General Plan and the LUP were phrased consistent with the manner in which hotels are generally entitled, the Parties agree that these amendments should be submitted to the voters by the City Council after certification of an environmental impact report (EIR) for the Project. The City Council shall schedule the election on a "regular election date' as that term is defined in Section 1000 of the Elections Code of the State of California. II. PROJECT DESCRIPTION A. PROJECT DOCUMENTS. STH has submitted, and the City Council has approved, solely for the purposes of CEQA, a description of the Project. The site plan and related documents describing the Project are attached to this Amended Agreement as Exhibit A and STH has previously submitted other documents relative to the manner and methods by which the Project would be constructed assuming all Project Approvals have been received (collectively referred to as "Project Documents'). STH has submitted, and will update or augment as necessary upon request of the City Administrator, the following: (1) The precise size, location and use of all existing or proposed improvements on the Property; (2) The proposed use of any unimproved portions of the Property; (3) The expected gonstruction schedule, the various types of equipment proposed to be used during construction (number of vehicles, days on site and estimated trips); (4) The extent of any required grading and demolition; B. PUBLIC DOCUMENTS. The documents that comprise Exhibit A shall be provided, upon request, to members of the general public as well as all existing users and occupants of the Property. III. PROJECT PROCESSING A. INITIAL STUDY. The City Administrator, or a consultant under her direction, shall, within a reasonable time after the date of this Amended Agreement, conduct an Initial Study of the Project as required by CEQA and the CEQA 3 Guidelines. The City Administrator, or a consultant under her direction, shall, after conducting the Initial Study, issue a Notice of Preparation (NOP) for an Environmental Impact Report (EIR), and retain a consultant to prepare the EIR. The City Administrator shall generally oversee the work of the consultant during the preparation of the EIR. STH shall, prior to the retention of the consultant, deposit funds with the City in an amount equal to the fifty percent (50 %) of the contract price for the EIR. STH shall reimburse the City for all costs incurred in the preparation of the EIR. In addition to the deposit of the contract price, STH shall deposit with City any additional funds within ten (10) days after notice from the City Administrator that additional funds are necessary to complete, or continue work on, the EIR. STH acknowledges that the costs of preparing an environmental document are difficult to ascertain or estimate and that unexpected circumstances frequently arise that require additional environmental analysis and /or additional expenditures. B. PLANNING DOCUMENTS. STH has, at its sole cost and expense, prepared draft planning and zoning documents necessary to the processing of the Project (Planning Documents). STH shall, within a reasonable time after a request from the City Administrator and at its sole cost and expense, provide any additional or amended Planning Document, or related information, that the City Administrator deems necessary to the processing of the Project. C. FISCAL IMPACT ANALYSIS. STH shall, at its sole cost and expense, prepare a "Market Analysis" that shows projected occupancy and daily rates for hotel rooms, as well as projected revenue from the restaurant and other accessory uses that are part of the Project. The Market Analysis shall be prepared in accordance with direction from the City Administrator. The City shall, based on an independent review of the Market Analysis prepare a fiscal impact analysis (Fiscal Impact Analysis). The Market Analysis and Fiscal Impact Analysis shall be prepared, and available for public review, at least ten (10) days prior to the public hearing at which the City Council is scheduled to consider certifying the EIR. D. PUBLIC HEARINGS. City shall conduct at least one public hearing on the Project and the EIR before the Planning Commission and the City Council. The purpose of the hearings will be to receive input on the Project and the EIR. The Planning Commission shall recommend to the City Council whether to certify the EIR but shall not recommend whether to approve or disapprove the Project. The City Council shall, if appropriate, certify the EIR and schedule the election on the amendments of the General Plan and the LUP but shall not approve or disapprove the Project. STH shall attend all public hearings and may present any evidence that STH deems appropriate. STH shall pay all costs and expenses related to the noticing or conduct of any public hearing required by this Amended Agreement or any Project Approval. 12 IV. NEGOTIATION OF OPTION /LEASE A. LEASE NEGOTIATIONS. City and STH shall, assuming STH receives all Project Approvals necessary to obtain building permits for construction of the Project, commence exclusive negotiations regarding the terms and conditions of a long- term ground lease and /or option for the property. The negotiations shall commence no later than thirty (30) days after any voter approval of the General Plan and LUP amendments related to the Project and provided STH satisfies the provisions of Subsection B. The Parties shall negotiate the terms and conditions in good faith in an effort to reach agreement on a fair and equitable option and /or lease as soon as reasonably possible. The Parties shall consider the general terms and conditions of the 1996 Option and Ground Lease between the City and the Balboa Bay Club (1996 BBC agreements) in conducting the negotiations. However, the Parties acknowledge that the 1996 BBC agreements involved unique circumstances — such as an existing leasehold advantage on the part of BBC — and that the City is fully justified in negotiating substantially different terms and conditions with respect to the Property. The Parties acknowledge that any discussions or negotiations concerning an option and /or lease of the Property may be lengthy and complex. The Parties agree that neither will be bound by any statement or representation during the processing of the Project or the subsequent negotiations unless that statement or representation is contained a long term ground lease or option to lease that has be executed by both Parties. B. FINANCIAL INFORMATION. STH shall prepare and provide City with the following information at least fifteen (15) days prior to the commencement of negotiations pursuant to this Amended Agreement: (1) Information relevant to the ability of STH to successfully complete and operate the Project including, without limitation, a written financial feasibility analysis of the Project including an estimate of construction costs (see (2)), an estimate of Project incgme, a pro forma statement of Project return, the proposed method and sources of construction and permanent financing and the sources for funding continuing operation of the Project. (2) A preliminary analysis, prepared by an architect and structural engineer reasonably acceptable to the City, of the construction costs of the Project. (3) A detailed background of STH including all general partners, members, or other principals, together with and background information, including: (a) prior record of STH with respect to the completion of developments of a scale comparable to the Project (b) prior experience in the operation of developments comparable to the Project. (4) A list of financial references. 5 (5) Any other information identified in a written request from the City Administrator served on STH within 15 (fifteen) days after any election approving the General Plan and LUP amendments. C. TIMING/TERMINATION. This Amended Agreement shall automatically terminate (unless extended pursuant to mutual agreement) if the Parties fail to reach agreement on the terms and conditions of an option and /or ground lease within two hundred and seventy (270) days after negotiations commence. D. PRELIMINARY DISCUSSIONS. The Parties may commence discussions regarding the terms and conditions of a ground lease and /or option at any time after the date of this Amended Agreement, The Parties acknowledge that the primary purpose of these discussions would be to provide voters with additional information regarding the impacts and benefits of the Project prior to the election. V. DISCRETION OF CITY The City Council, notwithstanding the terms and conditions of this Amended Agreement retains the full and complete discretion to certify the EIR and approve or disapprove any ground lease or option to lease of the Property. STH acknowledges that certain Project Approvals may be legislative in nature and, in such event, could be denied without cause or findings for denial. This Amended Agreement does not, and shall not be construed, as creating any obligation on the part of the City Council, the Planning Commission, any member of the City Council or Planning Commission, or any City employee, to approve and /or give special consideration to this Project or any Project Approval. This Amended Agreement does not create any obligations or duty on the part of the City to engage in or continue any discussions or negotiations regarding a lease of the Property except as expressly set forth in this Amended Agreement. VI. TERM A. GENERAL. The term of this Amended Agreement shall commence on the effective date and continue for a period of thirty -six (36) months plus any extension to which the Parties agree. The term does not include the time between City Council certification of the EIR and the date on which the Project is submitted to the voters. B. CITY MANAGER EXTENSIONS. The Parties acknowledge that substantial time and effort may be required to obtain all Project Approvals necessary to construction of the Project. The City acknowledges that STH may experience delays in scheduling required hearings, obtaining Project Approvals or preparing required documents even though STH has acted in good faith and with due diligence. The term of this Amended Agreement may be extended by the City 2 Manager for a total of twelve (12) months upon a determination that STH has experienced unforeseen delays that were beyond the control of STH. C. MUTUAL AGREEMENT. The term of this Amended Agreement may be extended by mutual agreement of the Parties. VII. ADMINISTRATORS. City and STH shall each designate a person (Administrator) to act on their behalf in performing the duties required by this Amended Agreement. The City Administrator shall be Sharon Wood, the Assistant City Manager. Each Administrator may designate up to five individuals who are empowered to act on behalf of the Administrator and such designations shall be in writing and provided to the other Party. VIII. EXCLUSIVITY. During the term of this Amended Agreement, City will deal exclusively with STH and no other person or entity, with regard to the possible redevelopment of the Property. City shall deal exclusively with STH with respect to all Project Approvals and, except for extensions of" existing leases or agreements with current users or occupants for a term consistent with the provisions of this Amended Agreement, will not accept applications for any proposed development, lease or use of the Property. IX. COOPERATION City and STH shall cooperate with one another in the processing of all Project Approvals. In this regard, City shall sign applications and documerk% necessary to secure Project Approvals and shall ensure that a representative of the City is present at all public hearings involving any Project Approval. City and STH shall participate in public workshops and study sessions held by the City Council and City commissions on planning and development issues related to the Property. XI. MISCELLANEOUS A. NO RELIANCE. - Tenant acknowledges that it is not entering into this Amended Agreement in reliance upon any statement or representation made by or behalf of City or any promise of any kind whatsoever, except as expressly set forth in this Amended Agreement. B. ASSIGNMENT. STH may assign or transfer this Amended Agreement, in whole or part, with the prior written consent of the City Council that shall not be unreasonably withheld. City acknowledges that STH may, during the term of this Amended Agreement, enter into agreements with third parties for the 7 performance of the duties required by this Amended Agreement and, ins such case no consent of the City Council's consent is required. For purposes of this Amended Agreement, an assignment of this Amended Agreement includes the sale or other transfer of STH or the transfer of all of rights of STH pursuant to this Amended Agreement. C. ATTORNEY FEES. In any action to enforce this Amended Agreement in any forum, the prevailing party shall be entitled to reasonable attorneys' fees and costs. D. GOVERNING LAW. This Amended Agreement shall be governed by and construed in all respects in accordance with the laws of the State of California, without giving effect to principles related to conflict of laws. E. TERMINATION. City may terminate this Amended Agreement in the event STH fails to perform any material obligation (Default). In the event of a STH Default City shall give STH ten days written notice to cure the Default and this Amended Agreement shall terminate unless STH commences cure within ten days and diligently pursues the cure to completion. IN WITNESS WHEREOF, the parties have executed this Amended Agreement on the day of , 2003 (Effective Date). APPROVED AS TO FORM: Robert H. Burnham, City Attorney CITY OF NEWPORT BEACH A Municipal Corporation By: Steve Bromberg, Mayor SUTHERLAND TALLA HOSPITALITY LLP M Stephen Sutherland, STH F: \users\cat\s ha red \da \Projects \Ma H napa rk\Ag \STH\a mend 030303. d oc 11 Ir I p ^I I I 1. • I I i f' i i i I , I I r I i I ' I 133tl15 o I i I I i' I I I I 1/yI� 13�rs 11 N(1 I I I I I I I i I I I I I 1 I I I I i , i I I I I I I I i i i o � I I m • U ^O N § Q� c� Chi O ZV W QV I a O x w� x F� J �LL � L K d y3� �Ya 4aC i �33e�e' � rci 9 Z •�S.i`,a .i .i a.y. `.AN° N �V' �d.i `.l .i � N J ]9 m P U s a Qn gas m O e �� Alt �5q ep g _ Z aaaaaa N Z axa -1i- At a — y � An — m m m w I ti a «, o till a 55 3ggffi� 8g � � oa�oap�pYY£ ggg a3 5� -As 5 fi US 5 n.6 5 s:� - � 3 5 �tlj3i: Li� 8E dpp > 00 .0 D= e� U ^O N § Q� c� Chi O ZV W QV I a O x w� x F� J I Rrj P, x 0 0 6e 0 C4- 12 12 Z(P d0 n 4 Y� ;j 0 n �O �U N n U 4 1— o Ln 0 � � x O Z a Q o 12 z