HomeMy WebLinkAboutContract 1560-7-1 160- 1
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AMENDMENT NO. 6
TO
TRANSFER AGREEMENT
AND
ESCROW INSTRUCTIONS
by and between
CITY OF CATHEDRAL CITY
and
CATHEDRAL CANYON DEVELOPMENT, LLC.
Dated November 30, 2016
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AMENDMENT NO. 6 TO
PROPERTY TRANSFER AGREEMENT
AND ESCROW INSTRUCTIONS
This Amendment No. 6 to Transfer Agreement and Escrow Instructions
("Amendment No. 6"), which is dated for reference as indicated on the cover page, is
hereby entered into by and between Cathedral Canyon Development, LLC., a California
limited liability company ("Developer" or "Buyer"), and Cathedral City, a California
municipal corporation, acting solely in its role as the Successor Housing Agency to the
Former Redevelopment Agency of the City of Cathedral City ("City" or "Seller").
Developer and City are sometimes referred to individually as a "Party" or collectively
referred to as the "Parties."
RECITALS
A. City and Thermal Land, LLC, ("Thermal") entered into that certain
Property Transfer Agreement and Escrow Instructions dated August 28, 2013
("Transfer Agreement"), which provided for the sale of the Property (as described in
the Transfer Agreement) to Thermal upon timely completion of the Proiect, a mixed use
residential / commercial development, as described in the Transfer Agreement.
B. There have been several serial assignments of the Transfer Agreement
amongst the City and several parties as follows:
(1) On or about November 18, 2014, City, Thermal and Saxony Living,
LP., ("Saxony") entered into that certain Assignment of Property Transfer
Agreement dated November 18, 2014, by which City consented to the
assignment by Thermal of all of its interests, rights, title, obligations, duties and
responsibilities, terms, conditions, and covenants in, to and under the Transfer
Agreement ("Rights and Obligations") to Saxony, and Saxony assumed all
such Rights and Obligations.
(2) On or about October 26, 2016, City, Saxony, and GreenSpring
Capital, Inc., ("GreenSpring"), entered into that Assignment, Assumption and
Consent Agreement under which Saxony assigned, and City consented to the
assignment by Saxony of, all of its Rights & Obligations in, to and under the
Transfer Agreement to GreenSpring, and GreenSpring assumed all such Rights
and Obligations.
(3) On or about November 30, 2016, City, GreenSpring, and Developer
entered into that Assignment, Assumption and Consent Agreement under which
GreenSpring assigned, and City consented to the assignment by GreenSpring of,
all of its Rights & Obligations in, to and under the Transfer Agreement to
Developed, and Developer assumed all such Rights and Obligations.
To date the Project has not been completed and the purchase and sale of the
Property has not been consummated between City and any of the parties
referenced above.
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C. The Transfer Agreement has been amended by Thermal, with the
concurrence of City, and subsequently by Saxony, five (5) times, which amendments
include Amendment No. 1 (March 12, 2014), Amendment No. 2 (August 14, 2014),
Amendment No. 3 (February 26, 2015), Amendment No. 4 (October 28, 2015) and
Amendment No. 5 (March 9, 2016), collectively the "Amendments". The Transfer
Agreement shall be deemed to be inclusive of all of the Amendments.
D. City and Developer now desire to amend the Transfer Agreement and
among other things desire to revise the various times stated to complete performance of
certain actions under the Transfer Agreement and Amendments ("Deadlines"). The two
primary Deadlines, set forth in Section 5.12 (Closing Date) and Section 10 (Deadline to
Complete the Project) of the Transfer Agreement, are amended as specified below.
There are a number of ancillary Deadlines that are either measured from the opening of
escrow, or that must be completed prior to close of escrow, or that must occur prior to
the completion of the Project. These Deadlines were provided for in the Transfer
Agreement and then depicted in the Exhibits to the Transfer Agreement and
Amendments variously as the "Schedule of Obligations," the "Escrow Deadlines," the
"Project Schedule," and/or the "Conditions required to be Fulfilled." It is the intent of the
Parties that all such ancillary Deadlines be extended commensurate with the extension
of the Closing Date and/or Deadline to Complete the Project, as specified below, to
which they are subordinate.
E. The Parties acknowledge that escrow has previously been opened, as
provided in Section 5.2. The Parties also acknowledge that the Deposit required under
Section 5.2.2 was made, but that a portion of the Deposit was previously withdrawn by a
predecessor party to Developer, and that currently the balance of the Deposit in Escrow
is Ten Thousand Dollars ($10,000.00).
OPERATIVE PROVISIONS
NOW, THEREFORE, in consideration of the promises made and recited herein,
the parties do hereby enter into this Amendment No. 6, which modifies and amends the
Transfer Agreement as follows:
1. AMENDMENTS. The Transfer Agreement is hereby modified and
amended as follows:
1.1 Section 2. Purchase and Sale. Section 2 of the Transfer
Agreement is hereby amended to read as follow:
"2. Purchase and Sale. Seller agrees to sell the Property to Buyer and
Buyer agrees to purchase the Property from Seller for an amount equal to
THREE HUNDRED AND THIRTY-ONE THOUSAND DOLLARS
($331,000) (the "Purchase Price") and upon all of the terms and
conditions set forth in this Agreement, in order to develop the project (the
Protect ) as defined herein. The Purchase Price shall be tendered to
Buyer by Seller at the Close of Escrow (as defined in Section 5.12). It is
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expressly acknowledged by Buyer and Seller that the Purchase Price is in
consideration of the following:
(a) The Project is anticipated to be a Sixty-Nine (69) unit
apartment building with related amenities, including five (5) ground floor
retail units, with a combined total rentable area of approximately Eighty-
Seven Thousand Nine Hundred Ninety-Five (87,995) square feet. The
Parties acknowledge that the description of the Project is approximate and
the Parties agree to work together cooperatively during the entitlement
process on a mutually agreeable final use designation, product mix, and
dwelling unit count for the Project.
(b) Conveyance of the Property by City to Buyer free and clear
of all "Redevelopment Obligations" as previously described in Section 6,
inclusive of subsections 6.1 through 6.3, of the Agreement, including any
covenant obligating Buyer to develop and maintain at least fifteen percent
(15%) of Project dwelling units for occupancy by persons and families of
moderate income at an affordable housing cost for fifty-five (55) years.
The Parties agree that the covenants related to Use and Design and
Construction as provided in Section 7 of the Agreement shall remain an
obligation of Buyer.
(c) No part of the Purchase Price shall be allocated to or
credited towards Buyer's obligation to pay special assessments for sewer
services which are related to the Property's inclusion in the Cove
Improvement District. These assessments shall be timely paid before
delinquency by Buyer, and its successors-in-interest, to the Property as an
ongoing obligation as required under the Cove Improvement Districts
formation documents."
1.2 Section 5.12 Closing Date. Section 5.12 of the Transfer
Agreement is hereby amended to read as follows:
"5.12. Closing Date. Escrow shall close (as evidenced by the recordation
of the grant deed in the Official Records of Riverside County, California),
as soon as the conditions to Close of Escrow have been met or waived,
but in any event, not later than March 30, 2018 (the "Close of Escrow" or
the "Closing Date"), unless extended as provided herein. Buyer shall have
one option to extend the deadline for Close of Escrow for a further period
of six (6) months, by depositing fifty percent (50%) of the Purchase Price
into Escrow at least five (5) business days prior to the existing deadline for
Close of Escrow."
1.3 Section 6. City Covenants. Section 6, inclusive of Sections 6.1,
6.2 and 6.3, and Exhibit "C" (Redevelopment Covenants) of the Transfer Agreement are
hereby deleted and the following text inserted:
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"6. City Covenants. This Section and Subsections 6.1, 6.2, and 6.3 as
well as Exhibit "B" (Redevelopment Covenants) have been intentionally
deleted."
1.4 Section 7.1. Redevelopment Covenants. Section 7.1 of the
Transfer Agreement is hereby amended to read as follows:
"7.1 Covenants. Buyers agrees to abide by the covenants described in
Sections 7.2 (Covenants Related to Use and Design) and 7.3 (Covenant
on Construction) and the parties shall meet and confer and mutually agree
whether such covenants shall be included in a declaration of covenants
and restricts recorded against the property at Close of Escrow, or shall be
included within the Grant Deed to be recorded at Close of Escrow, or
whether such obligations have been, in the sole determination of City,
satisfactorily discharged by Buyer such that no recorded covenant need
be required."
1.5 Section 9. Prohibition against Transfers. Section 9 of the
Transfer Agreement is hereby amended to read as follows:
"9. Prohibition Against Transfers.
9.1. Transfer of Property prior to Notice of Completion. Except
as is expressly provided in Section 9.2 and 9.3 of this Agreement, the
Parties agree that no Party shall sell, transfer, convey, leave, leaseback,
or assign the whole or any part of the Property or any partial or whole
interest therein which is the subject of this Agreement, or any
improvements thereon ("Property Transfer"), until after the issuance by
Seller of the Notice of Completion, as described in Section 17 below. In
the event of an unauthorized Property Transfer, the transferee in
connection therewith shall become fully liable for each and every
obligation of the transferor, and the transferor shall not be relieved of any
obligation or liability under this Agreement.
9.2. Necessary Easements. The prohibition on Property
Transfers shall not apply to the reasonable grant of limited easements or
permits to facilitate the development of the Project on the Property.
9.3. Transfer of Rights and Obligations in the Agreement / New
Members. Except as expressly provided herein, Developer shall not
assign, convey, or otherwise transfer any of its rights, title, interest and
obligations in the Agreement ("Agreement Transfer") to any third party
without the prior written consent of the City, which consent may be
withheld at the City's discretion, but in the event of the City's consent, then
such Agreement Transfer shall not be deemed to be effective unless all
parties have executed and approved an assignment and assumption
agreement satisfactory to City. In the event of an Agreement Transfer, the
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assignee shall assume all of Developer's obligations and be fully liable for
all debts and defaults of Developer under the Agreement. Notwithstanding
the foregoing, the addition of any new member(s) to Cathedral Canyon
Development, LLC., shall not be considered to be an Agreement Transfer
and may be performed without the prior consent of City, provided that
Developer provides City with reasonable prior written notice identifying the
new member(s) and Eric Lee Keillor retains management and control of
the Project."
1.6 Deadlines Measured from the Opening Of Escrow. The Parties
acknowledge that certain obligations of the Parties, measured from the Opening of
Escrow, as provided in Sections 4.1 (Approval of Title to the Property), 5.2.1 (Delivery of
Document), 5.4 (Service Contracts), and 5.5 (Preliminary Title Reports), may have
previously been fully or partially satisfied, or may need to be redone due to the passage
of time and the change of Developer. The Parties agree to cooperate and work in good
faith to identify which of these obligations has been satisfied and which remains to be
completed or redone and to then create a reasonable schedule for completion of such
items. Notwithstanding the foregoing, all such obligations must be completed prior to the
Close of Escrow.
1.7 Section 10. Deadline for Protect Completion; Liquidated
Damages. The first sentence of Section 10 is here by amended to read as follows:
"Developer shall complete all Project construction and Property
Development, as approved and accepted by the City, within Eighteen (18)
month after the Close of Escrow ("Deadline")."
The dollar amount stated in the third sentence of Section 10 shall be
amended and changed from $450,000 to "$331,000". The remainder of
Section 10 shall remain unchanged.
1.8 Section 13.1 Notice of Defaults. The dates referenced in Section
13.1 for Close of Escrow and completion of the Project shall hereby be changed to
"March 30, 2018" and "Eighteen (18) months after Close of Escrow" respectively. The
remainder of Section 13.1 shall remain unchanged.
1.9 Section 14.2 Where to Give Notice. For the purpose of providing
notice in accordance with Section 14.2, all notices, demands or communications to a
Party shall be sent to:
(to Developer) Cathedral Canyon Development, LLC.
2429 W. Coast Hwy., Suite #210
Newport Beach, CA 92663
Attn: Eric Lee Keillor
(to City) City of Cathedral City
68-700 Avenida Lalo Guerrero
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Cathedral City, CA 92234
Attn: City Manager
(with a copy to) Burke, Williams & Sorensen, LLP
1600 Iowa Avenue —Suite 250
Riverside, CA 92507
Attn: Eric S. Vail
1.10 Deadlines Set Forth in Exhibit "A" (Escrow Deadlines) and
Exhibit "B" (Project Schedule) of Amendment No. 5. The dates identified in
Exhibits "A" and "B" of Amendment No. 5, unless covered under Section 1.6 of this
Amendment No. 6, are hereby deemed continued to a date commensurate with the
extension of the Closing Date or Deadline for Project Completion set forth above, as the
case may be.
2. GENERAL PROVISIONS.
2.1 Remainder Unchanged. Except as specifically modified and
amended in this Amendment No. 6, the Transfer Agreement remains in full force and
effect and binding upon the parties.
2.2 Integration. This Amendment No. 6 consists of pages 1 through 7
inclusive, which constitute the entire understanding and agreement of the parties and
supersedes all negotiations or previous agreements between the parties with respect to
all or any part of the transaction discussed in this Amendment No. 6.
2.3 Effective Date / Conditions Precedent. This Amendment No. 6
shall not become effective and binding upon the Parties unless and until the Parties and
GreenSpring have approved and duly executed the Assignment, Assumption and
Consent Agreement for the Transfer Agreement.
2.4 Applicable Law. The laws of the State of California shall govern
the interpretation and enforcement of this Amendment No. 6.
2.5 References. All references to the Transfer Agreement include all
their respective terms and provisions. All defined terms utilized in this Amendment No.
6 have the same meaning as provided in the Transfer Agreement, unless expressly
stated to the contrary in this Amendment No. 6.
[Signatures on Following Page]
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IN WITNESS WHEREOF, the parties hereto have executed this Amendment No.
6 to the Transfer Agreement on the date and year first written above.
CITY OF CATHEDRAL CITY/SELLER
By:&
arles P. McClendon
City Manager
ATTEST:
12111414.-. - _ ,
Ga F. Howell, Cit Cl-rk _
APPROVED AS TO F• "M
Eric S. Vail, City Attorney
DEVELOPER/BUYER
CATHEDRAL CANYON DEVELOPMENT, LLC
a California Limited Liability Company
By: 410
Eric Lee'eillor, ! e_ --
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document to which this certificate is attached, and not the truthfulness, accuracy, or validity of that document.
CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT
STATE OF CALIFORNIA
COUNTY OF OrorcAe.,., pub)l�c
On N)Welt 11jN.'�, 'before me, /17i' �personally app-.red (.. Lee K Q1)1)proved to me on the
basis of satisfactory eviden to be the person whose names •40:re subscribed to the within instrument and
knowledged to me that he he/they executed the same in pi er/their authorized capacity(ies), and that by
hi er/their signature(/ on a instrument the person), or the entity upon behalf of which the person acted,
xecuted the instrume fit.
I certify under PENALTY OF P-'JURY under e I.ws of the State of California that the foregoing paragraph is true and
correct.
" NATALIE ASIK
NOTARY PUBLIC-CALIFORNIA
WITNESS my hand :nd off ial seal. i %zl ei COMMISSION#2005454 c
�' � ORANGE COUNTY
Signature: , _ _ J Comm.Ex .Janua 27 2017
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