2018/04/10 City Council Resolution 2018-047RESOLUTION NO. 2018-047
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF ROHNERT PARK
AUTHORIZING AND APPROVING AN AMENDED AND RESTATED ESCROW AND
FUNDING AGREEMENT BY AND BETWEEN THE CITY OF ROHNERT PARK AND
SOMO VILLAGE LLC
WHEREAS, City, Sonoma Mountain Village LLC and KDRP LLC, previously entered
into that certain Development Agreement, dated as of September 14, 2010 and recorded on
October 1, 2010 as Instrument Number 2010084467 in the Official Records of Sonoma County,
as amended by that certain First Amendment to Development Agreement, recorded on June 28,
2012 as Instrument Number 2012061268 in the Official Records of Sonoma County and by that
Second Amendment to Development Agreement recorded on December 11, 2012 as Instrument
Number 2012126932, in the Official Records of Sonoma County and subject to those certain
letter agreements dated June 6, 2016 and December 29, 2016 (collectively, the "Development
Agreement") regarding development of the Sonoma Mountain Village Planned Development
("SOMOPD");
WHEREAS, Sonoma Mountain Village LLC and KDRP LLC owned the Property as
tenants in common upon entering the Development Agreement. On July 21, 2016, Sonoma
Mountain Village LLC acquired all of KDRP LLC's rights and assumed all its obligations under
the Development Agreement;
WHEREAS, Sonoma Mountain Village, LLC and changed its name to SOMO Village,
LLC upon converting from a California limited liability company to a Delaware limited liability
company on December 30, 2016;
WHEREAS, the City, SOMO Village LLC and SOMO Village Commercial LLC entered
into that certain Partial Assignment and Assumption and Guaranty of Development Agreement
and Consent to Transfer of Real Property, whereby, (1) SOMO Village LLC transferred a portion
of the Property to SOMO Village Commercial LLC, while retaining all obligations under the
Development Agreement, except for those obligations regarding improvements to existing
structures on the transferred property; and (2) SOMO Village LLC deposited the sum of $2.3
million with City to fund its soccer field obligations, with the use of such deposit to be governed
by that certain Escrow and Funding Agreement, entered into as April 24, 2017, by and between
SOMO Village, LLC and City (the "Escrow Agreement");
WHEREAS, the City and SOMO Village LLC have negotiated a Third Amendment to the
Development Agreement that, among other things, sets forth terms regarding the time -frame,
funding, and remedies for non-compliance regarding SOMO Village LLC's design and
construction of the all-weather soccer field, including that the City may use the $2.3 million held
pursuant to the terms of the Escrow Agreement may be used by City in the event of a breach of
the Third Amendment; and
WHEREAS, the City and SOMO Village LLC now desire to enter into an Amended and
Restated Escrow Agreement in order to consistently implement the provisions of the Third
Amendment to the Development Agreement and provide that the City may use the $2.3 million
in funding in the event of a breach.
NOW, THEREFORE, BE IT RESOLVED by the City Council of the City of Rohnert
Park as follows:
1. The City Council does hereby authorize and approve the Amended and Restated
Escrow and Funding Agreement by and between SOMO Village LLC, a Delaware Limited
Liability Company and the City of Rohnert Park, attached as Exhibit A and incorporated herein
("Amended and Restated Escrow Agreement"). The City Manager is hereby authorized and
directed to execute the Amended and Restated Escrow Agreement in substantially similar form to
that attached hereto, subject to minor modifications by the City Manager or City Attorney.
2. The City Manager is further authorized and directed to take all actions and execute any
documents necessary to effectuate the terms and obligations of the Amended and Restated
Escrow Agreement for and on behalf of the City of Rohnert Park.
DULY AND REGULARLY ADOPTED this 10th day of April, 2018.
CITY OF ROHNERT PARK
Pam Stafford, Mayor
ATTEST:
Caitlin Saldanha, Deputy City Clerk
Attachment: Exhibit A
AIIANCITCI: BELFORTE; � MACKENZM A4 i CALLBNAN: 1 e STAFFORD.
T� AYES: ( ) NOES* ( 0 ) ABSENT; ( 0 ) ABSTAIN: ( V )
(2)
2018-047
Exhibit A to Resolution
AMENDED AND RESTATED ESCROW AND FUNDING AGREEMENT
THIS AMENDED AND RESTATED ESCROW AND FUNDING AGREEMENT
("Restated Agreement"), effective as of April 10, 2018 (the "Effective Date"), is made by and
between SOMO Village, LLC formerly known as Sonoma Mountain Village, LLC, a Delaware
limited liability company ("SOMO") and the City of Rohnert Park, a municipal corporation (the
"City"). SOMO and the City may each be referred to as a "Party" or collectively as the "Parties"
in this Agreement.
RECITALS
A. SOMO and the City are parties to that certain Development Agreement dated
September 14, 2010, as amended June 4, 2012 and December 4, 2012, and subject to those certain
letter agreements dated June 6, 2016 and December 29, 2016 (collectively, the "Original
Development Agreement"). Capitalized terms used, but not defined, in this Agreement shall have
the meaning set forth in the Development Agreement.
B. In April 2017, the Parties entered into that certain Partial Assignment and
Assumption and Guaranty of Development Agreement and Consent to Transfer of Real Property
(the "Assignment Agreement"), which provided, among other things, that SOMO shall deposit
the sum of $2.55 Million Dollars (the "Deposit Funds") into an escrow account to be used to fund
SOMO's obligations set forth in Section 4.11(B) of the Development Agreement relating to a
soccer field.
C. The Parties entered into an Escrow and Funding Agreement dated April 24, 2017
to establish certain terms related to the escrow for and use of the Deposit Funds (the "Original
Agreement"), which provided, among other things, for the use of $2.3 million of the Deposit
Funds for the improvement of a soccer field and construction of additional improvements to any
adjoining fields impacted by the soccer field's relocation to Sunrise Park and/or configuration (the
"Improvements").
D. Contemporaneous with this Restated Agreement, the Parties are entering into a
Third Amendment to Development Agreement (the "Third Amendment") and an Improvement
Agreement (the "Improvement Agreement") to, among other things, document the Parties'
previous agreement to move the location of the soccer field and to set forth terms regarding the
time -frame, funding and remedies for non-compliance regarding SOMO's design and construction
of the soccer field. The Original Development Agreement as amended by the Third Amendment
may be referred to as the "Development Agreement."
E. The Parties now desire to enter into this Restated Agreement to ensure consistency
with the Development Agreement and Improvement Agreement in particular to provide that: (1)
no Draw Request (as defined below) may be made until Developer commences construction of the
Improvements; (2) acknowledge that the Construction Funds (as defined below) may be increased
per the terms of the Development Agreement; and (3) the Construction Funds may be used by City
in the event of a breach under the Development Agreement or the Improvement Agreement.
NOW, THEREFORE, the Parties agree as follows:
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I . Escrow. SOMO has deposited the Deposit Funds with the City. The City holds the
amount of $2.3 Million Dollars of the Deposit Funds (the "Original Construction Funds") in
trust for SOMO for payment of the Improvements in a bank account designated and owned by the
City (the "Account"). After bids are received for the Improvements, SOMO, in its discretion
pursuant to the Development Agreement, may supplement the amount of the Construction Funds
to bring the total up to the actual amount of the construction contract for the Improvements. The
total amount of the Original Construction Funds, as may be supplemented as provided herein and
pursuant to the Development Agreement, shall be referred to as the "Construction Funds." The
Account shall be an interest bearing account and SOMO shall be credited with all interest earned
on the Construction Funds during the term of this Agreement.
The amount of $250,000 of the Deposit Funds has been transferred to the City pursuant to, and in
satisfaction of, SOMO's payment obligation under Item No. 3 of that certain Letter Agreement
Regarding Development Agreement between City of Rohnert Park, Sonoma Mountain Village
LLC and KDRP LLC dated December 29, 2016 (the "Letter Agreement") and is not subject to
the terms of this Restated Agreement.
2. Term: Termination. The term of this Agreement shall commence upon the Effective
Date and shall terminate upon the earlier of. (a) City's acceptance of the Improvements pursuant
to the Improvement Agreement; or (b) Developer's breach of the Development Agreement or the
Improvement Agreement and release of the Construction Funds to City to complete the
Improvements pursuant to Section 5 below. Upon termination of this Agreement pursuant to
Section 2(a) above, the City shall promptly, but in no event less than 30 days after written demand
by SOMO, return any remaining balance of the Deposit Funds to SOMO without deduction or
offset, other than as set forth herein. In the event of a termination under Section 2(b), City shall
be entitled to the full amount of the Construction Funds to complete the Improvements.
3. Use of Construction Funds. The Construction Funds shall be used by SOMO to
satisfy SOMO's obligations under Section 4.11(B) of the Development Agreement, as has been
amended, for the Improvements. The Construction Funds shall not be used for any other purpose
except as set forth herein, including without limitation, to satisfy any other obligation(s) under the
Development Agreement, without the Parties' mutual written consent.
4. Withdrawal_ of Construction Funds. SOMO may request a withdrawal of the
Construction Funds (a "Draw Request") by written notice to Mary Grace Pawson, Director of
Development Services for the City, or her successor in this role. No Draw Request may be
submitted to City until SOMO has commenced construction, as defined in the Development
Agreement, of the Improvements. A Draw Request may be made by email to Ms. Pawson
at inlrawsong)rpcity.org. Each Draw Request shall describe, in reasonable detail, the basis for the
request and/ or the portion of the Improvements to be satisfied with the Construction Funds being
requested and shall include partial lien releases from contractors, subcontractors and suppliers for
the work being funded. If the Draw Request is for reimbursement of funds already spent by SOMO
to satisfy the Improvements, the request shall include proof of payment for materials or services.
If the Draw Request is for payment of materials or services invoiced but not yet paid, the request
shall include a copy of the third party invoice. The City shall distribute the funds requested by a
Draw Request within 14 days of receipt, except as set forth in Section 5 below.
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5. City's Might to Use Construction Funds. As set forth in the Development
Agreement and the Improvement Agreement, City may elect to complete the Improvements with
the Construction Funds, which shall be released to City according to the applicable terms of the
Development Agreement and/or the Improvement Agreement.
6. V)ispiaes lZegartiIn the event the City contests a Draw Request,
or any portion thereof, the City shall notify SOMO in writing (a "Draw Contest Notice") within
7 days of receipt of the Draw Request. The Draw Contest Notice shall be submitted to Eric Reid,
Chief Financial Officer for SOMO, or his successor in this role. A Draw Contest Notice may be
made by email to Mr. Reid at ericdcimmoliving.com. The Draw Contest Notice shall describe, in
reasonable detail, the basis for the dispute or contest by the City. If the City's dispute only concerns
a portion of the Draw Request, the City shall fund the portion of the Draw Request which it does
not dispute within 30 days pursuant to Section 4. The parties shall attempt to resolve the dispute
set forth in the Draw Contest Notice pursuant to Section 6.
7. Mediation. With respect to any dispute arising out of or related to this Agreement,
including, without limitation, a Draw Contest Notice, the Parties shall first meet and confer and
make a good -faith effort to resolve the dispute without resort to mediation. The parties agree to
meet informally within 5 business days, or as soon as reasonably practicable, after notice from one
party requesting such a meeting. Should the dispute not be resolved by informal discussions, the
Parties agree to attempt in good faith to resolve their differences in confidential, non-binding
mediation, using a retired judge as a mediator who has at least five (5) years of experience as a
mediator and who is mutually agreed upon by the Parties. If the Parties are unable to agree upon a
mediator, Judicial Arbitration and Mediation Services ("JAMS') will suggest three (3) mediators
meeting the above qualifications and each party will strike one. A mediation session shall be
scheduled within thirty (30) days, or as soon as reasonably practicable, after the failure of informal
discussions to resolve the dispute. Costs of the mediation shall be borne equally by the party
requesting mediation. The mediation will be held under the then -applicable rules of JAMS and
will be conducted in Sonoma County, California. The Parties will participate in the mediation
process in good faith, and will have a representative in attendance throughout the mediation with
authority to settle the dispute. The Parties may be represented by counsel at both the informal
discussions and the mediation session. Statements made during the mediation process shall be
considered to be made in the context of settlement discussions, and shall not be admissible in any
subsequent judicial proceeding. If mediation fails to resolve the dispute, the Parties may resort to
any form of dispute resolution, including litigation within the California courts.
8. Attorneys' Fees. If either party brings an action or proceeding to enforce, protect
or establish any right or remedy arising out of or relating to this Agreement, the prevailing party
shall be entitled to recover reasonable attorneys' fees.
9. Specific Performance. Each party agrees that the other party would be irreparably
damaged if any of the provisions of this Agreement are not performed in accordance with their
specific terms and that monetary damages would not provide an adequate remedy in such event.
Accordingly, it is agreed that, in addition to any other remedy to which a party may be entitled, at
law or in equity, such party shall be entitled to injunctive relief to prevent breaches of the
provisions of this Agreement and specifically to enforce the terms and provisions hereof.
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10. Time. Time is of the essence with respect to this Agreement.
11. Successors. This Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, subject to the limitation of assignment
set forth herein and in the Development Agreement.
12. Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed an original, but all of which, taken together, shall constitute one and the same
instrument.
13. Amendment. This Agreement may only be amended or modified by a written
instrument executed by all of the parties hereto.
14. Governing. Law. The validity, interpretation and performance of this Agreement
shall be controlled by and construed under the laws of the State of California.
15. I?ntirc Agreement. This Agreement, together with the applicable terms of the
Development Agreement, constitutes the entire agreement among the parties hereto with respect
to the subject matter hereof, and supersedes all prior understandings or agreements. In the event
of any conflict between this Agreement and the Development Agreement, the terms of this
Agreement shall govern and control.
16. Severability. If any term, covenant, condition or provision of this Agreement, or
the application thereof to any person or circumstance, shall to any extent be held by a court of
competent jurisdiction or otherwise by law rendered invalid, void or unenforceable, the remainder
of the terms, covenants, conditions or provisions of this Agreement, or the application thereof to
any person or circumstance, shall remain in full force and effect and shall in no way be affected,
impaired or invalidated thereby.
17. No Third Party Beneficiaries. The provisions of this Agreement are not intended to
benefit any third parties.
18. Notices. Except as expressly provided herein, all notices shall be in writing, and
shall be given in the manner prescribed by Section 10.07 of the Development Agreement. Pursuant
to Section 10.07 of the Development Agreement, the address for SOMO is: 1400 Valley House
Drive, Rohnert Park, Suite 100, Rohnert Park, CA 94928.
19. Authority. Each individual executing this Agreement on behalf of a corporation
or other legal entity represents and warrants that: (a) he or she is duly authorized to execute and
deliver this Agreement on behalf of said corporation or other legal entity in accordance with and
without violating the provisions of its governing documents, and (b) this Agreement is binding
upon and enforceable against said corporation or other legal entity in accordance with its terms.
Any entity signing this Agreement on behalf of a corporation or other legal entity hereby
represents and warrants in its own capacity that it has full authority to do so on behalf of the
corporation or other legal entity.
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Exhibit A to Resolution
IN WITNESS WHEREOF, the Parties have entered into this Agreement to be effective as
of the Effective Date.
SOMO:
SOMO Village LLC,
a Delaware limited liability company
13v:
Name: Bradley E. Baker
Title: Manager
By:
Name: Lisa B. Codding
Title: Manager
CITY:
City of Rohnert Park, a municipal corporation
By:
City Manager
Authorized by Resolution 2018 -_adopted by the
Rohnert Park City Council at its meeting of Apri110,
2018
Approved as to Form:
By:
City Attorney
Attest:
By:
City Clerk
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