2014/08/26 City Council Resolution 2014-096RESOLUTION NO. 2014 -096
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
APPROVING A REIMBURSEMENT AGREEMENT BY AND BETWEEN
CITY OF ROHNERT PARK AND MCDONALD'S USA
WHEREAS, the former Community Development Commission of the City of Rohnert
Park ( "Former CDC ") acquired that certain real property located in the City of Rohnert Park
described in Exhibit A attached hereto and made a part hereof ( "Property ") for redevelopment
purposes;
WHEREAS, subsequent to the Former CDC's acquisition of the Property, the California
Legislature enacted Assembly Bill AB 1X 26, as subsequently amended by AB 1484
(collectively, the "Dissolution Act ") which dissolved redevelopment agencies formed under the
Community Redevelopment Law (Health and Safety Code Section 33000, et seq.);
WHEREAS, in accordance with Sections 34173 and 3417S(b) of the Dissolution Act,
the City of Rohnert Park elected to serve as the successor agency to the Former CDC and,
effective February 1, 2012, all nonhousing assets, properties and contracts of the Former CDC
were transferred to the successor agency;
WHEREAS, the City desires to move forward with disposition of the Property to
Developer in accordance with the long range property management plan adopted by the
Successor Agency Oversight Board and the State Department of Finance;
WHEREAS, McDonald's USA desires to acquire the Property, at fair market value, as
established by a comparison with comparable properties in the area, for use in connection with
the development of a McDonald's restaurant on an adjacent parcel;
WHEREAS, McDonald's USA and Baney Corporation, an Oregon corporation
( "Baney ") have submitted applications for development of an Oxford Suites Hotel and
McDonald's Restaurant ( "Proposed Project ") on real property adjacent to the Property;
WHEREAS, in order to facilitate processing of the Proposed Project, Baney and City
have entered into that certain Reimbursement Agreement dated May 22nd, 2012 ( "Baney
Reimbursement Agreement ") pursuant to which Baney is required to reimburse City for all of its
costs in connection with the various project approvals necessary for the Proposed Project
( "Project Approvals ");
WHEREAS, City and McDonald's USA now desire to enter into a Reimbursement
Agreement to provide for reimbursement from McDonald's USA to City for all costs and
expenses related to potential acquisition of the Property and applications for any subdivision
approvals necessary for the integration of the Property into the Proposed Project, including but
not limited to legal fees, staff time and consultant costs.
NOW THEREFORE BE IT RESOLVED by the City Council that the City Manager is
hereby authorized and directed to execute a Reimbursement Agreement with McDonalds USA in
a form substantially similar to Exhibit A, attached hereto and incorporated by this reference, for
and on behalf of the City, including authorization for staff to make minor adjustments to this
agreement subject to City Attorney review and approval.
DULY AND REGULARLY ADOPTED by the City Council of the City of Rohnert
Park on this 26`x' day of August, 2014.
ATTEST:
'==�`
r Anne M. Buergler, City rk
Attachment: Exhibit A Agreement
�.C°ITY OF ROHNE
Joseph tjallinan, Mayor
BELFORTE: ` 'AC MACKENZIE t �(;,;. STAFFORD: �. r -> AHANOTU: �+` 1�= CALLINAN:
AYES: ( ) NOES: ( C) ) ABSENT: ABSTAIN: ( )
2014 -096
EXHIBIT A to the Resolution
REIMBURSEMENT AGREEMENT
THIS REIMBURSEMENT AGREEMENT ( "Agreement ") is made and entered into as of the _ day
of , 2014 ( "Effective Date "), by and among the CITY OF ROHNERT PARK ( "City "), a municipal
corporation, and McDonald's USA, LLC, a Delaware limited liability company ( "Developer ").
RECITALS
A. The former Community Development Commission of the City of Rohnert Park ( "Former CDC ")
acquired that certain real property located in the City of Rohnert Park described in Exhibit A
attached hereto and made a part hereof ( "Property ") for redevelopment purposes.
B, Subsequent to the Former CDC's acquisition of the Property, the California Legislature enacted
Assembly Bill AB 1X 26, as subsequently amended by AB 1484 (collectively, the "Dissolution Act ")
which dissolved redevelopment agencies formed under the Community Redevelopment Law (Health
and Safety Code Section 33000, et seq.).
C. In accordance with Sections 34173 and 34175(b) of the Dissolution Act, the City of Rohnert Park
elected to serve as the successor agency to the Former CDC and, effective February 1, 2012, all non -
housing assets, properties and contracts of the Former CDC were transferred to the successor
agency.
D. City desires to move forward with disposition of the Property to Developer contingent on approval
of a long range property management plan by the Oversight Board and the Department of Finance.
E. Developer desires to acquire the Property, at fair market value, as established by a comparison with
comparable properties in the area, for use in connection with the development of a McDonald's
restaurant on an adjacent parcel.
F. Developer and Baney Corporation, an Oregon corporation ( "Baney ") have submitted or plan to
submit an application for development of an Oxford Suites Hotel and McDonald's Restaurant
( "Proposed Project ") on real property adjacent to the Property.
G. In order to facilitate processing of the Proposed Project, Baney and City have entered into that
certain Reimbursement Agreement dated May 22nd, 2012 ( "Baney Reimbursement Agreement ")
pursuant to which Baney is required to reimburse City for all of its costs in connection with the
various project approvals necessary for the Proposed Project ( "Project Approvals ").
H, City and Developer now desire to enter into this Agreement to facilitate the negotiation of the terms
upon which Developer would acquire the Property, preparation and /or review of any documents
required to effectuate such acquisition and the processing of any lot line adjustment or merger
approvals (collectively, "Subdivision Approvals ") necessary for the integration of the Property into
the Proposed Project by providing for reimbursement from Developer to City for all costs and
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EXHIBIT A to the Resolution
expenses related to Developer's potential acquisition of the Property and applications for any
Subdivision Approvals, including but not limited to legal fees, staff time and consultant costs.
AGREEMENT
In consideration of the foregoing recitals and for other good and valuable consideration, the parties
hereby agree as follows:
1. Purpose of Agreement. The purpose of this Agreement is to provide for payment by Developer of all
legal, staff and consultant costs directly or indirectly incurred by City in connection with the
acquisition of the Property, including any access or use rights. Additionally, the purpose of this
Agreement is to bring current all outstanding amounts subject to reimbursement.
2. Developer Reimbursement Obligation. Developer shall reimburse City for the following costs
(collectively, "Eligible Costs ") incurred in connection with the acquisition of the Property, including
any access or use rights, by Developer and processing of any Subdivision Approvals:
a, City staff time, processing costs, consultant costs (it being understood and agreed by the
parties that City shall provide prior notice to Developer before incurring consultant costs)
and legal fees and costs payable to City's counsel in connection with the negotiation,
drafting, implementation and defense of a purchase and sale agreement and any other real
estate transactional documents for the proposed disposition of the Property, including any
access or use rights, to Developer and the closing of such transaction;
b. City staff time, processing costs, consultant costs and legal fees and costs associated with
City's processing of any Subdivision Approvals, including legal fees and costs incurred in
connection with the legal defense of any challenges to such Subdivision Approvals;
c. a 7% administrative fee charged on costs of outside consultants and legal services which are
included in subsections a and b above;
d. fees and costs which, as of the Effective Date, City has incurred but which have either not
yet been billed for reimbursement or which have not yet been reimbursed to the City.
3. Payment of Eligible Costs. City shall submit to Developer a copy of each invoice, bill, demand or
other evidence ( "Invoice ") that the City has incurred Eligible Costs or other reasonable
substantiation of such Eligible Costs. Each such Invoice of Eligible Costs shall be paid in full by
Developer, without deduction or offset, within thirty (30) calendar days of the date of the Invoice.
Developer covenants and agrees that failure to pay such Eligible Costs to City in full within thirty (30)
calendar days of the date of such Invoice will result in a Late Charge in accordance with Section 4 of
this Agreement, as well as in the cessation of the work described in Subsections 2.a. and 2.b. above
in accordance with Section 9 of this Agreement. Developer further covenants and agrees that, if as
a result of a failure to pay an Invoice of Eligible Costs, City ceases the work described in Subsections
2.a. and 2.b. above in accordance with Section 9, Developer shall not directly or indirectly initiate
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EXHIBIT A to the Resolution
any litigation against City or its employees, agents, or volunteers for the cessation or delay in such
work following such failure to pay.
4. Late Charge. Developer acknowledges that the late payment of any Eligible Costs will cause City to
incur additional costs, including administration and collection costs and processing and accounting
of expenses ( "Delinquency Costs "). If City has not received payment of all Eligible Costs within thirty
(30) calendar days of the date of the Invoice, the Invoice is considered overdue and Developer shall
immediately be charged a late charge of five percent (5%) of the delinquent amount. The City is
then authorized to pay such Late Charge from the Deposit along with the amount of the unpaid
Invoice of Eligible Costs in accordance with Section 5. City and Developer recognize that the
expenses that City shall suffer as a result of Developer's failure to make timely payments is difficult
to ascertain and agree that said five percent (5%) late charge represents a reasonable estimate of
the Delinquency Costs that would be incurred by City. City's acceptance of any such late charge
does not equate with a waiver of Developer's default with respect to the overdue amount, or
prevent City from exercising any rights and remedies available under this Agreement.
5. Security Deposit. Within twenty (20) days of signature of this Agreement, Developer shall deposit
with City the sum of Five Thousand Dollars ($5,000) in cash or other immediately available funds
( "Deposit "), as security for Developer's obligation to pay all Eligible Costs, as provided herein. The
Deposit shall be subject to the following:
a. Developer agrees that if Developer does not pay when due the full amount of each Invoice
of Eligible Costs as provided in Section 3 above, then the City is authorized to pay such
amount from the Deposit, which may include a Late Charge in accordance with Section 4,
b. If the City withdraws from the Deposit, the City shall immediately notify the Developer in
writing that it has used the Deposit to pay all or a portion of the bill, invoice, demand or
other evidence of Eligible Costs, and the Developer shall thereafter have fourteen (14)
calendar days to deposit with City, in cash, an amount necessary to restore the Deposit to its
full amount of $5,000. If the Developer fails to replenish the Deposit within said due date,
City shall have no obligation to continue the work described in Subsections 2.a, and 2.b.
above or to incur any additional Eligible Costs.
c. If the amount of the unpaid Invoice of Eligible Costs and Late Charge exceeds the available
funds in the Deposit, the City shall immediately notify the Developer in writing that it has
used the Deposit to pay all or a portion of the bill, invoice, demand or other evidence of
Eligible Costs, and the Developer shall have fourteen (14) calendar days to deposit with City,
in cash, an amount necessary to restore the Deposit to its full amount of $5,000, plus the
full amount of the unpaid Invoice of Eligible Costs and applicable Late Charge. If the
Developer fails to fully replenish the Deposit, pay the full Invoice of Eligible Costs and
applicable Late Charge within said due date, City shall have no obligation to continue the
work described in Subsections 2.a. and 2.b. above or to incur any additional Eligible Costs.
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d. Developer further covenants and agrees that, if as a result of reduction of the Deposit to
zero dollars or failure to replenish, City ceases the work described in Subsections 2.a. and
2.b. above in accordance with Section 9, Developer shall not directly or indirectly initiate any
litigation against City or its employees, agents, or volunteers for the failure to process or for
delay in processing such applications following such reduction or failure to replenish.
e. If this Agreement is terminated as provided in Section 8 below, City shall return to
Developer within ninety (90) calendar days following the effective date of termination that
portion of the Deposit that has not been expended or committed by City as provided herein,
if any, including interest.
6. No Commitment as to Future Approvals. Nothing in this Agreement shall be construed as a
commitment to grant or issue any Subdivision Approvals or any other preliminary or formal
approvals in connection with the Proposed Project or to enter into the proposed purchase and sale
agreement or any other related real estate transactional document. Developer acknowledges and
agrees that nothing in this Agreement limits City's discretion, in any manner, with respect to the
proposed disposition of the Property or any other aspect of the Proposed Project. Developer agrees
that it shall remain obligated to pay all Eligible Costs, regardless of whether any aspect of the
Subdivision Approvals or Proposed Project is approved and regardless of whether City and
Developer enter into the proposed purchase and sale agreement or other real estate transactional
document. Notwithstanding the aforementioned, City shall in good faith expeditiously and with all
diligence process the Subdivision Approvals.
7. Indemnity. Developer shall defend (with counsel approved by City, which approval shall not be
unreasonably withheld), indemnify, and hold harmless the City, its officials, employees, volunteers
and agents from and against any and all loss, liability, expenses, claims, costs (including reasonable
attorneys fees), suits and damages of every kind, nature, and description, directly or indirectly
arising from any third party legal challenge to Developer's acquisition of the Property, the granting
of the Subdivision Approvals, or the implementation of this Agreement. Developer may defend
against any such third party legal challenge as a Real Party in Interest using counsel of Developer's
choice, and Developer and City agree to cooperate in the implementation of this Agreement and the
joint defense of any challenges. Developer's indemnity obligations under this Section 7 shall survive
the expiration or termination of this Agreement.
8. Termination. Developer may terminate this Agreement by providing thirty (30) calendar days
written notice to City. If Developer is in default of any of its obligations under this Agreement and
fails to cure such default within fourteen (14) calendar days following written notice from City, then
City may terminate this Agreement by notice to Developer and, thereafter, City shall have no further
obligation to process applications for the Subdivision Approvals or to continue with negotiation and
drafting of the proposed purchase and sale and other related real estate transactional documents.
Developer shall be responsible for the payment of Eligible Costs incurred by City up to and including
the date of termination regardless of which party terminates this agreement.
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EXHIBIT A to the Resolution
Cessation of Processing. Developer acknowledges and agrees that City may, in its sole discretion,
cease processing the Subdivision Approvals and all negotiations in connection with the proposed
purchase and sale agreement and related real estate transactional documents, if
a. this Agreement is terminated by either party following notice and expiration of any
applicable cure periods as provided herein; or
b. Developer fails to pay such Eligible Costs to City in full within thirty (30) calendar days of the
date of such Invoice; or
c. the Deposit amount is reduced to zero and Developer fails to replenish the Deposit upon
request by City.
Developer further covenants and agrees that if City ceases the work described in Subsections 2.a. or
2.b, above for any of the foregoing reasons, Developer shall not directly or indirectly initiate any
litigation against City or its employees, agents, or volunteers for the failure to process or for delay in
such work following such Agreement termination,
10, Attorneys Fees. If any legal action is brought by either party to interpret or enforce any terms or
provisions of this Agreement, the prevailing party shall be entitled to its reasonable attorneys' fees
and costs.
11. Entire Agreement. This Agreement constitutes the entire agreement of the parties with respect to
the matters set forth herein. Any amendments, modifications, or changes to this Agreement shall be
in writing and signed by both parties.
12. Waivers. Waiver of a breach or default under this Agreement shall not constitute a continuing
waiver or a waiver of a subsequent breach of the same or any other provision of this Agreement.
13, Severability. If any provision of this Agreement or the application of any such provision shall be held
by a court of competent jurisdiction to be invalid, void or unenforceable to any extent, the
remaining provisions of this Agreement and the application thereof shall remain in full force and
effect and shall not be affected, impaired or invalidated.
14, Successors and Assigns. This Agreement shall be binding upon the parties hereto and their
respective heirs, legal representatives, successors and assigns.
15. Jurisdiction. This Agreement shall be administered and interpreted under the laws of the State of
California without regard to its choice of law rules. Jurisdiction and venue of litigation arising from
this Agreement shall be in the County of Sonoma, State of California.
16, Notices. Notices required by this Agreement shall be personally delivered, mailed, postage prepaid,
or mailed via nationally recognized overnight courier as follows:
To the Developer:
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EXHIBIT A to the Resolution
McDonald's Corporation
One McDonald's Plaza
Oak Brook, IL 60523
LC: 004 -3309
Attention: Jennifer Cohn
with a copy to:
McDonald's Corporation
299 Oak Road, Suite 900
Walnut Creek, CA 94597
Attention: Development Director
To the City:
City of Rohnert Park
130 Avram Avenue
Rohnert Park, CA 94928
Attn: City Manager
with a copy to:
Burke, Williams & Sorensen, LLP
1901 Harrison Street, 9th Floor
Oakland, CA 94612
Attn: Michelle Marchetta Kenyon
Notices given by personal delivery shall be effective immediately. Notices given by overnight courier
shall be effective upon the date of delivery. Notices given by mail shall be deemed to have been
delivered five days after having been deposited in the United States mail. Any party may change its
address for notice by written notice to the other party in the manner provided in this paragraph 16.
17. Interpretation. The titles to the sections of this Agreement are not a part of this Agreement and
shall have no effect upon the construction or interpretation of any part of this Agreement. As used
in this Agreement, masculine, feminine or neuter gender and the singular or plural number shall
each be deemed to include the others where and when the context so dictates. The word
"including" shall be construed as if followed by the words "without limitation." This Agreement is
the product of negotiations among the parties, and it shall not be construed as if it had been
prepared by one of the parties, but rather as if all of the parties have prepared the same. Any rule of
construction to the effect that ambiguities are to be resolved against the drafting party shall not
apply in interpreting this Agreement.
18. Authority. Each person executing this Agreement covenants and warrants that (i) the party on
whose behalf he or she is signing is duly incorporated or otherwise established or formed and validly
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EXHIBIT A to the Resolution
existing under the laws of its state of incorporation, establishment or formation, (ii) the party has
and is duly qualified to do business in California, (iii) the party has full corporate, partnership, trust,
association or other power and authority to enter into this Agreement and to perform all of its
obligations hereunder, and (iv) each person (and all of the persons if more than one signs) signing
this Agreement is duly and validly authorized to do so.
19. Counterparts. This Agreement may be executed in counterparts.
20. Assignment of Claims. To the extent City determines that it may have Claims against any Project
Consultant in connection with the Proposed Project, City may, upon written request by Developer,
assign such Claims to Developer. As used herein, "Project Consultant" means any consultant,
contractor, or other third party whose work product gives rise to any Eligible Cost or who is hired by
City in connection with the Project Approvals; and "Claims" means any and all claims, potential
claims, causes of action, and potential causes of action for breach of contract and /or professional
negligence, regardless of whether such claims or causes of action accrue prior to or after the
effective date of this Agreement.
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EXHIBIT A to the Resolution
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first above
written.
CITY:
CITY OF ROHNERT PARK,
a municipal corporation
City Manager
APPROVED AS TO FORM:
City Attorney
ATTEST:
City Clerk
DEVELOPER:
MCDONALD'S USA,
a Delaware limited liability company
2
Nar
Title:
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EXHIBIT A to the Resolution
EXHIBIT A
LEGAL DESCRIPTION OF THE PROPERTY
ALL THAT CERTAIN REAL PROPERTY SITUATE IN THE CITY OF ROHNERT PARK, COUNTY OF
SONOMA, STATE OF CALIFORNIA, BEING A PORTION OF THE LANDS OF THE CITY OF
ROHNERT PARK, A MUNICIPAL CORPORATION, DESCRIBED IN THAT CERTAIN GRANT DEED
RECORDED JUNE 16, 1988 UNDER DOCUMENT NUMBER 88048420, BEING A PORTION OF LOT
OR FARM NUMBERED ONE HUNDRED AND SIXTY -THREE (163) OF SANTA ROSA FARMS
SUBDIVISION NO. 2, AS DESIGNATED ON THE PLAT THEREOF FILED IN THE OFFICE OF THE
COUNTY RECORDER OF THE COUNTY SONOMA, STATE OF CALIFORNIA ON MARCH 07, 1910 IN
BOOK 21 OF MAPS, PAGE 14, BEING MORE PARTICULARLY DESCRIBED AS FOLLOWS:
THAT PORTION OF SAID LOT OR FARM NUMBERED ONE HUNDRED AND SIXTY -THREE (163)
LYING WESTERLY OF THE WESTERLY RIGHT OF WAY OF REDWOOD DROVE AS SAID
REDWOOD DRIVE IS SHOWN ON THAT CERTAIN MAP TITLE RECORD OF SURVEY OF
REDWOOD DRIVE REALIGNMENT FILED JANUARY 18, 1990 IN BOOK 451 OF MAPS AT PAGE 5
IN SAID OFFICE OF THE COUNTY RECORDER, SAID PORTION BEING SHOWN ON THAT
CERTAIN RECORD OF SURVEY FILED JANUARY 08, 1992 IN BOOK 488 OF MAPS AT PAGE 20 IN
SAID OFFICE OF THE COUNTY RECORDER AND BEING FURTHER DESCRIBED AS FOLLOWS:
BEGINNING AT THE NORTHWESTERLY CORNER OF SAID LANDS; THENCE SOUTHERLY, ALONG
THE WESTERLY LINE OF SAID LANDS, SOUTH 00° 06'04" WEST, 280.23 FEET TO THE
WESTERLY RIGHT OF WAY OF REDWOOD DRIVE, BEING A POINT OF CUSP ON A CURVE
CONCAVE SOUTHEASTERLY, HAVING A RADIUS OF 551.00 FEET; THENCE NORTHEASTERLY
ALONG SAID WESTERLY RIGHT OF WAY FROM A TANGENT THAT BEARS NORTH 000 06,04"
EAST, THROUGH A CENTRAL ANGLE OF 30° 31'07" AN ARC DISTANCE OF 293.49 FEET TO THE
NORTHERLY LINE OF SAID LANDS; THENCE WESTERLY, ALONG SAID NORTHERLY LINE, NORTH
890 34'56" WEST, 76.33 FEET TO THE POINT OF BEGINNING.
I