2013/02/12 City Council Resolution 2013-013RESOLUTION NO. 2013-013
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
AUTHORIZING AND APPROVING A DEFERRED PAYMENT PLAN AGREEMENT
WITH K -N -I, LLC FOR SEWER CAPACITY CHARGES FOR
ART'S PLACE (563 ROHNERT PARK EXPRESSWAY WEST)
WHEREAS, the City Council of the City of Rohnert Park ( "City ") wishes to support
economic development, and in an effort to achieve the desired goal of economic development,
the City Council has adopted Resolution No. 2010 -89 approving an Economic Development /
Job Creation Program ( "ED Program ");
WHEREAS, the approved ED Program includes provisions for the City to "be a creative
partner" to overcome obstacles or hindrances to the use of land for economic benefit in Rohnert
Park;
WHEREAS, timing of payment of Sewer Capacity Charges can be an obstacle to
development of new restaurants;
WHEREAS, one alternate payment mechanism, which can be utilized when there is a
development with a need for a new or increased permanent sewer capacity, is a deferred payment
plan, which is memorialized in a written agreement;
WHEREAS, K -n -I, LLC DBA Art's Place ( "Developer ") desires to re -open an 80 -seat
restaurant previously occupied by former tenant Taste Tee LLC DBA Season's Pizzeria Sports
Bar Grill ( "Former Tenant ") located at 563 Rohnert Park Expressway West, Rohnert Park,
California which is sited on a portion of assessor's parcel number 143 -391 -048 (the "Project ");
WHEREAS, to support economic development within the City, City entered into
Deferred Sewer Capacity Charge Payment Plan Agreements ( "Original Agreements ") with
Former Tenant, which among other things, deferred payment of the Former Tenant's sewer
capacity charges;
WHEREAS, Former Tenant made payments through August 6, 2012, and there remains
an unpaid balance of $10,736.08 of the total Sewer Capacity Charges of $43,200.00; and
WHEREAS, Developer desires to enter into a Deferred Sewer Capacity Charge Payment
Plan Agreement with the City for the the unpaid Sewer Capacity Charge of $10,736.08, and the
City is willing to defer payment for such amount from the Developer to support economic
development on the terms and conditions set forth herein.
NOW, THEREFORE, BE IT RESOLVED BY THE CITY COUNCIL OF THE
CITY OF ROHNERT PARK AS FOLLOWS:
Section 1. The above recitations are true and correct.
Section 2. Environmental Clearance. The adoption of this Resolution and
accompanying Amended and Restated Deferred Sewer Capacity Charge Payment Plan
Agreement is exempt from review under the California Environmental Quality Act because the
activity in question is not a project as defined under CEQA Guidelines Section 15378 in that
Page 1 of 2
2013 -013
there is no potential that the activity will result in either a direct physical change in the
environment or a reasonably foreseeable indirect physical change in the environment.
Section 3. The City Manager is hereby authorized and directed to take all actions to
effectuate the Deferred Sewer Capacity Charge Payment Plan Agreement for and on behalf of
the City of Rohnert Park, including execution if necessary, in substantially similar form to the
agreement attached hereto as Exhibit "A," subject to minor modifications by the City Attorney.
DULY AND REGULARLY ADOPTED this 12th day of February, 2013.
ICS}
ATTEST:
Anne Buergler City Clerk
Attachment: Agreement
62
CITY OF ROHNERT PARK
Pam Stafford Mayor
AHANOTU: PJC BELFORTE: FVG MACKENZIE: RIE CALLINAN: NE' STAFFORD: Mt-,
AYES: ( 15 ) NOES: ( p ) ABSENT: ( t> ) ABSTAIN: ( C) )
Page 2 of 2
2013 -013
Exhibit A
Deferred Sewer Capacity Charge Payment Plan Agreement
Between the City of Rohnert Park and
K -n -I, LLC (Developer)
This Deferred Sewer Capacity Charge Payment Plan Agreement ( "Agreement ") is
entered into by and between the City of Rohnert Park, a Municipal Corporation of the State of
California ( "City "), and K -n -I, LLC, DBA Art's Place ( "Developer ") on this day of
February, 2013.
WHEREAS, the City is interested in promoting economic development and in an effort to
achieve this desired goal, on August 24, 2010, the City adopted Resolution No. 2010 -89 adopting
an Economic Development / Job Creation Program ( "ED Program ");
WHEREAS, the approved ED Program includes provisions for the City to work with the
business community to determine how the City might, in some way, "be a creative partner" with
businesses to address and overcome major obstacles or hindrances to the use of land for
economic benefit in the City of Rohnert Park;
WHEREAS, timing of payment of Sewer Capacity Charges can be an obstacle to
development of new restaurants;
WHEREAS, one alternative payment mechanism, which can be utilized when there is a
development with a need for a new or increased permanent sewer capacity, is a deferred payment
plan, which is memorialized in a written agreement;
WHEREAS, Developer desires to re -open an 80 -seat restaurant previously occupied by
former tenant Taste Tee LLC DBA Season's Pizzeria Sports Bar Grill ( "Former Tenant ") located
at 563 Rohnert Park Expressway West, Rohnert Park, California which is sited on a portion of
assessor's parcel number 143- 391 -048 (the "Project ");
WHEREAS, to support economic development within the City, on October 13, 2010, via
City Council Resolution No. 2010 -120, City entered into a Deferred Sewer Capacity Charge
Payment Plan Agreement ( "Original Agreement ") with Former Tenant, which among other
things, deferred payment of the Former Tenant's sewer capacity charges over a five -year period;
WHEREAS, on May 24, 2011, City Council Resolution No. 2011 -43 was approved
authorizing execution of an Amended and Restated Deferred Payment Plan Agreement ( "First
Amended Original Agreement ") with the Former Tenant which changed the terms of the
Original Agreement as follows:
1. Changed from a three year term to a five year term.
2. Changed number of seats and corresponding sewer flow from 113 to 80.
3. Changed bi- monthly payments to monthly payments.
WHEREAS, on March 27, 2012, a Second Amended and Restated Deferred Payment
Plan Agreement for Sewer Capacity Charges ( "Second Amended Original Agreement ") with the
Former Tenant was approved via City Council Resolution No. 2012 -33 changing the terms of the
First Amended Original Agreement as follows:
DSCCPP Agreement (K-n-1, LLC)
1. Changed from a five year term to a four year term.
2. Changed the sewer capacity from 1,600 gallons per day to 800 gallons per day with a
corresponding Sewer Capacity Charge of Forty -Three Thousand Two Hundred
Dollars and Zero Cents ($43,200.00).
WHEREAS, Former Tenant made payments through August 6, 2012, and there remains
an unpaid balance of $10,736.08 of the total Sewer Capacity Charges of $43,200.00.
WHEREAS, Developer desires to enter into a Deferred Sewer Capacity Charge Payment
Plan Agreement with the City for the the unpaid Sewer Capacity Charge of $10,736.08, and the
City is willing to defer payment for such amount from the Developer to support economic
development on the terms and conditions set forth herin.
NOW, THEREFORE, in consideration of the mutual consideration contained in this
Agreement and subject to the terms and conditions as stated, it is understood and agreed by the
parties as follows:
AGREEMENT
1. Payment Plan Terms.
The Project requires 800 gallons - per -day of Sewer Capacity. The Sewer Capacity
Charge for 800 gallons per day is Forty -Three Thousand Two Hundred Dollars and Zero Cents
($43,200). Former Tenant (i) made a down payment of Twelve Thousand Two Hundred Four
Dollars and Zero Cents ($12,204.00) on October 13, 2010, (ii) made additional payments of
Seventeen Thousand Six Hundred Two Dollars and Eighty -Eight Cents ($17,602.88) through
August 6, 2012, of which Fifteen Thousand Nine Hundred Thirty -Eight Dollars and Eleven
Cents ($15,938.11) is applied to principal and One Thousand Six Hundred Sixty -Four Dollars
and Seventy -Seven Cents ($1,664.77) is applied to interest expense, and (iii) received a credit of
Four Thousand Three Hundred Twenty -One Dollars and Eighty -One Cents ($4,321.81) for
original sewer capacity. Developer will provide a Promissory Note to the City for the remaining
balance due of Ten Thousand Seven Hundred Thirty-Six Dollars and Eight Cents ($10,736.08),
to be paid in forty -three (43) monthly payments commencing April 1, 2013, of TWO
HUNDRED SEVENTY -THREE DOLLARS and TWENTY -THREE CENTS ($273.23) each,
which payments are inclusive of principal and interest at the rate of five percent (5.0 %) per
annum (the "Note "), the form of which is attached to this Agreement as Exhibit 1.
2. Purpose of Payment Plan.
Developer desires to operate a restaurant on the Property with capacity of 800 gallons per
day.
3. Payments Begin.
Monthly payments shall be paid on the first of each month commencing on April 1, 2013,
and shall continue in accordance with the terms and conditions of the Note.
4. Provisional Capacity Rights.
Upon receipt of valid payment, including clearance of checks or wire transfers with
appropriate bank, sewer capacity rights will provisionally accrue to the Project at the rate of one
(1) gallon per Fifty -Four Dollars and zero cents ($54.00), not including any interest, per the
terms of this agreement. In no case shall the Project accrue more than 800 gallons of sewer
DSCCPP Agreement (K -n -1, LLC)
capacity for payments made to satisfy the obligations of this Agreement. Notwithstanding the
above, in the event of default of any required payments under the Note, the Project will not be
deemed to have accrued any sewer capacity rights and any provisionally accrued sewer capacity
rights will be deemed revoked.
Disconnection/Termination of Service for lack of payment.
In addition to any other remedy in law or equity, including all remedies provided under
Title 13 of the Rohnert Park Municipal Code, Developer agrees that, notwithstanding any other
right at law and in consideration of not requiring a specific security interest to protect the loan, if
all utility charges are not paid within fifteen (15) calendar days of payment due date published on
bill, or if Developer is in default per Section 11, all City - provided utilities to the Property,
including water and sewer service, may be disconnected.
6. Prepayment.
The Developers may, at any time, at their option and from time to time, prepay the Note
in part or in whole without premium or penalty. Any partial prepayment shall be applied to the
outstanding principal and not to the installment next due under the terms of the Note.
7. Prohibition Against Assignment or Change In Ownership of Developer Without Prior
Consent of City.
The qualifications and identity of Developer are of particular concern to the City in
entering into this Agreement. Therefore, no voluntary or involuntary successor in interest of
Developer shall acquire any rights or powers under this Agreement, and there shall be no change
in more than fifty -one percent (51 %) of the ownership interests in the Developer, except as
expressly set forth herein. Developer shall not assign or permit the assignment of all or any of its
rights or duties under this Agreement, or permit a change in more than fifty -one (51 %) of its
ownership interests, without the prior written approval of the City, which consent shall be in the
City's sole discretion and shall require that any approved successor specifically agree in writing
to be bound by the provisions of this Agreement.
Time Frame.
Time is of the essence of this Agreement.
9. Equal Employment Opportunity.
a. The Developer, its contractors and agents will not discriminate against any
employee or person engaged in this project because of their race, religion, color,
sex, or national origin;
b. The Developer shall post in conspicuous places on the Property site notices
setting forth the provisions of this non - discrimination clause;
Violation of these provisions shall be cause to terminate this Agreement; and
d. None of the terms of this provision shall be used to preclude the City from
pursuing other remedies available under law or equity for non - compliance with
the terms of this Agreement.
10. Disclaimer of Relationship.
DSCCPP Agreement (K-n-1, LLC)
The City and Developer agree and acknowledge that nothing contained in this Agreement
or any act of the City employees, agents or officers or of the Developer shall be deemed or
construed by any of the parties to this Agreement, or by third persons, to create any relationship
of any third -party beneficiary, or of principal and agent, or of limited or general partnership, or
of joint venture, or of any association or joint relationship.
11. Events of Default.
Any of the following events shall constitute an event of default:
a. Failure to make payment of the principal or any interest on the Note when due
and as the same shall become due and payable;
b. Failure to perform any obligation contained in this Agreement;
C. Making a presentation or warranty with regard to the subject of this Agreement
that is false or misleading in a material respect;
d. If the Developer shall:
I. Admit in writing their inability to pay their debts as they come due;
ii. File a petition in bankruptcy, or a petition to take advantage of any
insolvency act or a petition seeking reorganization;
iii. Make an assignment for the benefits of their creditors;
iv. Consent to the appointment of a receiver of themselves, or of the whole or
any substantial part of their Property; or
v. On a petition in bankruptcy or insolvency or seeking reorganization filed
against themselves, acquiesce in such filing, fail to have the action
discharged within ninety (90) days of such filing, be adjudicated bankrupt,
or become subject to a receiver; and
e. Developer assigns or permits the assignment of all or any of its rights or duties
under this Agreement, or permits a change in more than fifty -one percent (51 %)
of its ownership interests, without the prior written approval of the City.
12. Remedies Upon Default.
a. Automatic Acceleration. In the case of the occurrence of an event of default
under paragraph 11 above, the Note shall automatically, without notice to the
Developers or any other person, forthwith become due and payable in full,
together with interest accrued thereon;
b. Option Acceleration. In the case of the occurrence of any other event of default
and the continuance thereof for more than thirty (30) consecutive days after
delivery to the Developers of a written notice issued by the City specifying such
event of default and required it be remedied, the City may, by written notice to
Developer, declare the principal and accrued interest on the Note and all
obligations of the Developers hereunder to be forthwith due and payable. Any
written notice shall be deemed delivered when deposited in the U.S. mail; and
DSCCPP Agreement (K-n-1, LLQ
C. Immediate disconnection/termination of utility service as provided for in
paragraph 5, above.
13. Notices.
All notices, consents, demands, and other communications hereunder shall be deemed to
have been given when personally delivered, mailed by registered or certified mail, postage
prepaid or sent by telegram, addressed:
a. If to Developer:
Managing Member
K -n -I, LLC, DBA Art's Place
563 Rohnert Park Expressway West
Rohnert Park, California 94928; and
Greg Kalemba, CEO
Agent for Service of Process
K -n -I, LLC
4279 Hessel Road
Sebastopol, California 95472.
b. If to the City:
City Manager
Rohnert Park City Hall
130 Avram Avenue
Rohnert Park, California 94928.
14. Successors and Assigns.
This Agreement shall be binding upon and inure to the benefit of, and be enforceable by,
the parties hereto and their respective successors and assigns, and beneficiaries.
15. Governing Law.
This Agreement is executed, and is to be performed, in the State of California and shall
be governed by the laws of the State of California.
16. Severability.
If any term contained in this Agreement or in the Note shall be invalid and unenforceable,
the remainder of this Agreement and the Note shall not be affected thereby.
17. Attorneys' Fees.
If either party to this Agreement shall bring any action against the other arising out of this
Agreement or the exhibit(s) hereto, the prevailing party shall be entitled to recover a reasonable
sum for attorneys' fees and costs in such action.
18. Venue.
DSCCPP Agreement (K-n-1, LLC)
In the event a claim or action is filed in connection with this Agreement, the parties agree
that the proper venue for any such proceeding shall be in the Superior Court of the County of
Sonoma, California.
IN WITNESS WHEREOF, the parties have executed this instrument as of the date
written above.
DATED:
DATED:
APPROVED AS TO FORM:
DATED:
Michelle Marchetta Kenyon
City Attorney
DEVELOPER:
D
Greg Kalemba, CEO
K -n -I, LLC d/b /a Art's Place
CITY OF ROHNERT PARK:
Gabriel Gonzalez, City Manager
DSCCPP Agreement (K-n-1, LLC)
EXHIBIT 1
PROMISSORY NOTE
City of Rohnert Park, California $10,736.08
2/_/2013
For valid consideration duly received and hereby acknowledged, the undersigned K -n -I,
LLC, DBA Art's Place ( "Maker "), promises and agrees to pay to the order of the City of Rohnert
Park, 130 Avram Avenue, Rohnert Park, California 94928, or holder ( "City "), in lawful money of
the United States of America, the principal sum of TEN THOUSAND SEVEN HUNDRED
THIRTY -SIX DOLLARS AND EIGHT CENTS ($10,736.08), to be paid in forty -three (43)
monthly payments of TWO HUNDRED SEVENTY -THREE DOLLARS and TWENTY -THREE
CENTS ($273.23) each commencing April 1, 2013, which payments are inclusive of principal and
interest at the rate of five percent (5.0 %) per annum, in accordance with the terms the Deferred
Sewer Capacity Charge Payment Plan Agreement Between the City of Rohnert Park And K -n -I,
LLC dated February , 2013, ( "Agreement "), which is incorporated herein in full by
reference. The payment schedule for this Promissory Note is attached herewith.
Unless otherwise specified in writing by the City, all payments on this Promissory Note
shall be paid to the City, by check, made payable to the order of the City of Rohnert Park, 130
Avram Avenue, Rohnert Park, California 94928.
Should default be made in payment of the principal or interest, the whole sum of
principal and interest shall, at the option of the holder of this note, become immediately due as
provided in the Agreement. Whether or not suit is filed, Maker agrees to pay all attorneys' fees,
costs of collection, costs, and expenses incurred by the City in connection with the enforcement
or collection of this Promissory Note.
This Promissory Note has been executed and delivered in and shall be construed in
accordance with and governed by the laws of the State of California and of the United States of
America.
Executed as of the date first written above.
K -n -I, LLC DBA ART'S PLACE
RN
Greg Kalemba, CEO
Its: Managing Member
Exhibit 1: Page 1 of 2 Promissory Note (DSCCPP Agreement K -n -I, LLC)
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c-I
O
N
c-i
O
N
r-I
O
N
c-i
O
N
ri
O
N
ri
O
N
ri
O
N
r-i
O
N
ri
O
N
ri
O
N
ri
O
N
ri
O
N
ri
O
N
ri
O
N
ri
O
N
ri
O
N
ri
O
N
ri
(D
N
ri
O
N
ri
O
N
ri
o
N
c-I
:
C1
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r-
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ri
N
r-i
N
M
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O
r-i
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ri
ri
c-i
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c--I
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a)
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d
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O
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N
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.-1
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X
W