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HomeMy WebLinkAboutCHICK-FIL-AIN,cl-' ;ANCE N0T rtFi2tJMED A-2019-433 WORK 111AY RHOGE PfD CLEEi IK 0)F GOU'' ll- "xrr- MAR 1 1 2015 QREIMBURSEMENT AND INDEMNIFICATION AGREEMENT t) ' c9R 2i BETWEEN THE CITY OF SANTA ANA AND CHICK-FIL-A, INC., A GEORGIA CORPORATION, FOR THE PAYMENT OF FEES AND COSTS RELATED TO ANNEXATION PROCESSING FOR THE 17th AND TUSTIN ANNEXATION This Agreement ("Agreement") is entered into as of January 15, 2019, by and between the CITY OF SANTA ANA, a charter city and municipal corporation, organized and existing under the Constitution and laws of the State of California ("City"), and Chick- fil-A, Inc., a Georgia corporation ("Developer"), who agree as follows: Recitals. This Agreement is made with reference to the following facts and circumstances: A. The Developer has filed the necessary applications with the County of Orange to develop a portion of the 3.3 acre vacant commercial site at the northeast corner of Tustin Avenue and 171h Street within County unincorporated Island No. 25 ("Property") comprised of APN #s 396-303-01 to -28, 396-304-01 to -11, 396-312-01 to -08, -11, 396- 313-01 to -03, -06 to -11, and 396-314-01 to -06. B. Developer is seeking entitlements to certain real property consisting of a portion of a 3.3 acre vacant parcel on which an In -N -Out Burger restaurant and a Chick- fil-A restaurant will be developed with remaining vacant land for future potential tenant use for a to -be -determined commercial development (the "Project"). C. The City of Santa Ana has the opportunity to annex the entire county island given that the island is within the City of Santa Ana's sphere of influence. D. The City, Developer and LAFCO have been working on the annexation of this site into the Santa Ana City limits (the "Annexation"). E. City believes it is in the public interest for Developer to pay for some portion of the Services described in Section 2 below, and City also acknowledges and agrees that given the financial benefit to City of the Developer's commercial improvements to the Property, City will also share in some portion of the cost for such Services, based on the Cost Cap for Developer, as defined below. F. Developer desires to move forward with the processing of its Project subject to the reimbursement obligations set forth herein. 2. Agreement to Pay for Services. Developer agrees to pay for professional costs and expenses related to the various services that are necessary or appropriate, in the City's sole determination, to effectuate the Annexation, and that are performed by City employees or contractors, but subject to the Cost Cap as provided for in Section 4.17 of this Agreement (the "Services"), 3651962803 even though the actual amounts may be different than the estimated amount of costs for the Services provided by the City Manager's Office, City Attorney's Office, Planning and Building Agency and Public Works Agency. The City agrees to provide such Services to effectuate the Annexation for the Project. 3. Community Development Agency, City Attorney's Office, Planning and Building Agency, Public Works Agency, State Board of Equalization, and other Sources. A. For the purpose of leading the Annexation, the Community Development Agency will be taking the lead at an hourly rate of One Hundred Forty Two Dollars and Thirty Cents ($142.30) for the services of the Executive Director. B. For the purpose of providing the necessary legal oversight for the Project, the City Attorney's office will be providing services at an hourly rate of One Hundred Twenty Three Dollars ($123.00). C. For the purpose of conducting the environmental analysis and pre-zoning, the Planning and Building Agency will be providing services at the hourly rate of One Hundred Nine Dollars and Sixty-six Cents ($109.66) for the services of the Senior Planner and One Hundred Fifteen Dollars and Forty-one Cents ($115.41) for the services of the Principal Planner. D. For the purpose of providing engineering and technical utility related services, the Public Works Agency will be providing services at the hourly rate of Two Hundred Thirty Eight Dollars ($238.00). E. The hourly rates listed above are subject to change on not less than sixty (60) days' advance notice depending on the specific employees involved and the current reimbursement calculation for said employees at the time of providing services. F. Community Development Agency, City Attorney's Office, Planning and Building Agency and Public Works Agency will provide Services in connection with this Project, on an hourly basis. The City may also utilize additional external consultants, including, but not limited to, attorneys and engineers, as necessary to complete such review as may be necessary and appropriate for the City to complete the Annexation. Said consultants will be billed at their agreed upon rates with the City, such rates to be provided to Developer in advance of any Services being provided. G. Subject to the Cost Cap, Developer will be responsible for reimbursing the City for costs incurred for any work provided by the State Board of Equalization for the implementation of the Annexation. H. Subject to the Cost Cap, Developer shall also be responsible for reimbursing the City for any other costs incurred for any work provided from any other sources for the implementation of the Annexation; provided further that any such additional work shall be subject to the Developer's prior written approval, in its reasonable discretion, and in the event that such approval is not given, then the additional costs so 36519628v13 2 incurred shall not be subject to reimbursement, regardless of whether the Cost Cap has been met or not. I. Developer has deposited with City the amount of Fifty Thousand Dollars ($50,000.00) (the "Initial Deposit") to provide initial funding for the Services to be provided by the City Manager's Office, City Attorney's Office, Planning and Building Agency and Public Works Agency. This amount shall be applied to Services received from the aforementioned City Agencies. J. City shall provide Developer with a monthly statement of draws against the Initial Deposit described in Section 3.G. above, accompanied by invoices, time records, or other reasonable back-up therefor. K. It is understood and agreed that the City has begun work on the Project prior to execution and delivery of this Agreement. The fees, if any, incurred by the City in connection with the Project prior to such execution and delivery will be subject to reimbursement pursuant to this Agreement upon execution and delivery of this Agreement by all parties and the Initial Deposit of funds made by Developer pursuant to Section 3.G. 4. Deposit A. At any time that City determines in good faith that the sums then held in any deposits made pursuant to Section 3.G. above are inadequate to pay for the projected Services to be paid from such deposit over the succeeding two (2) month period (and subject to the Cost Cap), Developer shall replenish the relevant deposit with the amount requested by City in writing, which additional deposit amount for each such request shall not exceed Twenty -Five Thousand Dollars ($25,000) or such lesser amount as would cause the total of all deposits made by Developer to exceed the Cost Cap, within ten (10) business days of such written request. B. Should any deposit not be replenished in the time and amount specified as set forth in Section 4.A., the City may direct that all Services to be paid from the deposit applicable to such Services be halted until such time as such applicable deposit is replenished. C. All deposits, including the Initial Deposit, will be placed in a non-interest bearing trust account. Developer understands and agrees that City will not pay interest to Developer on the deposits, and Developer will not seek interest payments from City. D. No later than forty (40) days after the earliest to occur of: (1) final action is taken by City on the Project approving the Annexation, (2) Developer notifies the City in writing of its withdrawal of the Project applications, or (3) the Project is otherwise abandoned, City will provide Developer with a final accounting of costs and expenses for the Services provided, accompanied by invoices, time records or other reasonable back- up therefor, subject to Developer's right to review and reasonably approve or disapprove of same. If Developer disapproves any fee or cost, such disapproval shall not be automatically binding on the City, unless such cost or expense from City is manifestly 3651962803 3 unreasonable, in which case the disapproval by Developer would be binding on the City. In any event, the parties shall continue to work in good faith to resolve any disputes. Should the total reimbursement amount required for any Services be less than the total amount deposited by Developer with respect to such Services, City will refund any remaining deposit amount relating to such Services to Developer within forty-five (45) days after determining the final reimbursement amount for such Services. E. In the event Developer fails or refuses to make any of the deposits required herein, Developer shall be liable to City for the amount of all fees charged to the City for Services actually provided in accordance with this Agreement which exceed the amount of the deposit paid by Developer for such Services, and City shall have the right to pursue a breach of contract action, or any other pertinent legal action available to the City, against the Developer. Further, the prevailing party in any dispute and/or litigation necessary to enforce or interpret this Agreement shall be entitled to seek and collect its costs and reasonable attorney's fees from the other party. F. Notwithstanding anything contained in this Agreement to the contrary, the total cost of the Services as to which the Developer shall have any responsibility, including the other costs described in Section 5 below, will not exceed $150,000.00 (the "Cost Cap"). If the total costs exceed the Cost Cap, the City agrees to pay any and all amounts in excess of the Cost Cap and Developer shall have no liability or responsibility whatsoever for any such excess costs. 5. Other Costs. Developer acknowledges that the cost of the Services does not include all application, permitting, inspection, or other fees which may be charged by City in connection with the Project. To the extent the fees ordinarily charged by City for projects similar to the Project relate to costs that are not reimbursed under this Agreement, such fees shall be separately paid in accordance with the relevant City fee schedule. 6. No Guarantee of Approval. Developer acknowledges that its payments and deposits described herein do not mean that the City will approve the Project nor that City staff will make a recommendation in favor of the Project. Even if the Project is not approved, Developer shall remain liable, subject to the Cost Cap, for all costs for Services actually provided in accordance with this Agreement concerning the Project; provided further that City agrees its processing of the Project shall not be unreasonably withheld or delayed. 7. Independence of Consultants. A. During the Term (as defined below) of this Agreement, Developer will not directly or indirectly enter or propose to enter into any financial or business relationship with any of City's consultants that are working on the Project. B. Developer hereby acknowledges and agrees as follows: i. City has sole discretion to select which of its employees or independent contractors are assigned to work on Developer's application; 3651962803 4 ii. City has sole discretion to determine which persons City will hire as consultants to work on Developer's application. iii. As between City and Developer, City has sole discretion to direct the work and evaluate the performance of the consultants whom the City hires to work on Developer's application. City retains the right to terminate or replace at any time any consultant who is assigned to work on Developer's application. iv. City has sole discretion to determine the amount of compensation paid to consultants hired by City to work on Developer's application. V. City, not Developer, shall pay consultants hired or assigned by City to work on Developer's application from a City account under the exclusive control of City, which is to be funded by Developer as set forth in this Agreement. vi. Except for those disclosures required by law, including, without limitation, the Public Records Act, all conversations, notes, memoranda, correspondence and other forms of communication by and between the City and its consultants shall be, to the extent permissible by law, privileged and confidential and not subject to disclosure to the Developer. viii. Developer shall have no claim to, nor shall Developer assert any right in any reports, correspondence, plans, maps, drawings, news releases or any and all other documents or work product produced by the consultants. C. City and Developer hereby acknowledge and agree that processing of Developer's application is not contingent on the hiring of any specific consultant. D. City and Developer hereby acknowledge and agree that Developer's duty to reimburse City is not contingent upon the approval or disapproval of the proposed Project, or upon the result of any action of the City. E. Neither Developer nor its officers, employees or agents, shall communicate with any of the City's consultants, during the Term of this Agreement without prior approval of the City, unless such communication is initiated by any of the City's consultants, to obtain information about the Project which is needed to prepare any necessary environmental document to confirm compliance with CEQA (the "Environmental Document"). 8. Term and Termination. Absent a formal withdrawal of the Project application(s), Developer shall not be entitled to terminate this Agreement. If Developer does formally withdraw the Project application(s), Developer shall remain liable for all costs for the Services incurred through the date of termination. The Term of this Agreement shall commence upon the execution and delivery of this Agreement by all parties hereto and shall terminate on the earliest to occur of: (a) the City taking final action on the Annexation; or (b) Developer formally withdrawing its Project applications. The provisions of Sections 6 through 25 (inclusive) shall survive termination of this Agreement except that, in the event of termination of this Agreement due to the Developer formally 36519628v13 5 withdrawing its Project applications, the City agrees to reasonably work along with Developer in good faith to dismiss or settle any "Indemnified Claim," as defined in Section 10 below. Once an "Indemnified Claim" is dismissed or settled, Developer shall not be liable for any costs or expenses incurred related to said "Indemnified Claim" after the date of such dismissal or settlement. 9. Default. A. Should Developer fail to perform any of its obligations under this Agreement, then City may, at its option, pursue any or all of the remedies available to it under this Agreement, at law or in equity. B. Without limiting any other remedy which may be available to it, if Developer fails to perform any of its obligations under this Agreement, City may cease performing its obligations under this Agreement. C. If any amounts remain owing to City for Services actually performed prior to termination of this Agreement, City may bring an action to recover all costs and expenses incurred by the City in completing such Services, together with interest thereon from the date incurred at the rate of ten percent (10%) per annum, or at the maximum legal rate, whichever is greater. D. City will not take the Project forward for consideration of discretionary actions unless and until all fees are paid. If any amounts remain owing to City pursuant to this Agreement for Services actually performed prior to termination of this Agreement, City may withhold consideration of discretionary actions, permits and/or certificates of occupancy until all such amounts are paid. E. Should City fail to perform any of its obligations under this Agreement, then Developer may, at its option, pursue any or all of the remedies available to it under this Agreement, at law or in equity. F. Without limiting any other remedy which may be available to it, if City fails to perform any of its obligations under this Agreement, Developer may cease performing its obligations under this Agreement. 10. Indemnification. Developer further agrees that to the fullest extent permitted by law, the Developer shall defend, indemnify, protect, and hold harmless, the City of Santa Ana and its constituent public agency members, officers, employees, volunteers, attorneys and agents (in the aggregate, the "City Indemnitees") from any and all liability, demand, claim, action, or proceeding, whether actual, alleged, or threatened, including by way of example but not exclusion, proceedings of an administrative or regulatory nature and proceedings that may be associated with alternative dispute resolution (an "Indemnified Claim") brought by third parties against any City Indemnities (including any advisory agency of the City), to attack, set aside, void, annul, or challenge the validity of any approvals granted for the Project, the Environmental Document concerning the 3651962803 6 Project, or seeking damages which may arise from any approvals granted for the Project, the Environmental Document concerning the Project, or this Agreement, other than liabilities, demands, claims, actions or proceedings caused by the negligence or willful misconduct of the City or any City Indemnitee. In any defense of any City Indemnitees, City shall have the absolute right to unilaterally select the legal counsel for such City Indemnitees (with the intention of using one law firm to defend all City Indemnitees unless conflicts of interest preclude such joint representation), and any experts or consultants deemed necessary by City in an exercise of City's sole discretion. Developer shall reimburse City for one hundred percent (100%) of the City's actual fees and costs in connection with the Litigation ("Fees and Costs"). Such Fees and Costs shall include, but not be limited to, all reasonable court costs and attorneys' fees, including other City staff time, consultants or experts, spent in regard to defense of an Indemnified Claim. City shall promptly render notice to the Developer of the existence of the Indemnified Claim (a "Notice") and Developer shall defend the City Indemnitees at Developer's expense. City shall cooperate fully with Developer in the defense of any Indemnified Claim. In any Notice, City shall estimate the cost of its defense, which shall include, but not be limited to, actual attorney fees, court costs, expert witnesses and consultant fees, and all other costs that may arise out of, or be incurred by City in the defense of an Indemnified Claim. Upon such Notice, Developer shall promptly deposit funds equal to the first three (3) months of the Estimated Cost with the City and shall make additional deposits as and when required to fund the further costs of defending the City Indemnitees for such Indemnified Claim. Failure of Developer to deposit such funds shall be deemed a material breach of this Agreement. City shall refund, without interest, any unused portion of the deposits once litigation is finally concluded or a dispute is resolved regarding an Indemnified Claim. Any fees or costs incurred by the Developer pursuant to this indemnification section shall not count toward the "Cost Cap" or be subject to any maximum or cap whatsoever. 11. Compliance with Law. Developer will, at its sole cost and expense, comply with all of the requirements of all federal, state, and local laws now in force, or which may hereafter be in force, pertaining to this Agreement. 12. Waiver of Breach. Any express or implied waiver of a breach of any term of this Agreement will not constitute a waiver of any further breach of the same or any other term of this Agreement. 13. Notices. Except as otherwise expressly provided by law, all notices or other communications required or permitted by this Agreement or by law to be served on or given to either party to this Agreement by the other party shall be in writing and will be deemed received on: (i) the day of delivery if delivered by hand, e-mail (with confirmation of receiving party) and fax (both email and fax required for notices delivered by email or fax), or overnight courier service, during regular business hours; or (ii) on the third business day following deposit, with postage prepaid, in the United States Postal Service 3651962803 7 and addressed to the contracting parties. Name, address, telephone numbers, and e-mail addresses of the Parties are as follows: City: Steven Mendoza Executive Director of Community Development, City of Santa Ana 20 Civic Center Plaza (M-25) Santa Ana, CA 92701 Telephone: (714) 647-5360 Fax: (714) 647-6549 E-mail: SMendoza aasanta-ana.org A copy to: Sonia Carvalho City Attorney, City of Santa Ana 20 Civic Center Plaza (M-29) Santa Ana, CA 92701 Telephone: (714) 647-5203 Fax: (714) 647-6549 E-mail: SCarvalhoasanta-ana.orq Developer: Chick-fil-A, Inc. 5200 Buffington Road Atlanta, GA 30349 Telephone: (404) 765-8000 Fax: (404) 305-4780 Attn: Real Estate Legal Dept. -FSU Division A copy to: In -N -Out Burgers 13502 Hamburger Lane Baldwin Park, CA 91706 Attention: Real Estate Department and Andy Dawson Telephone: (626) 813-8263 Fax: (626) 338-9173 For Overnight Deliveries Only: 13752 Francisquito Avenue Baldwin Park, CA 91706 Attn: Real Estate Department and Andy Dawson A copy to: Mr. John C. Hall 1367 Circle Way 3651962803 8 Laguna Beach, CA 92651 Ihall(cDrickenbacker.com AND Ms. Cindalee Penney Hall 3895 Main Street, Santa Ana, CA 92707 chall@rickenbacker.com Either party may change its address for the purpose of this Section by giving written notice of the change to the other party. 14. Interpretation. This Agreement is deemed to have been prepared by all of the parties hereto, and any uncertainty or ambiguity herein shall not be interpreted against the drafter, but rather, if such ambiguity or uncertainty exists, shall be interpreted according to the applicable rules of interpretation of contracts under the law of the State of California. 15. Business Day. For purposes of this Agreement, "Business Day" means any day other than a Saturday, Sunday, a federal holiday, or a day on which City Hall for the City of Santa Ana is closed for the conduct of regular business. 16. Successors. This Agreement shall be binding on and inure to the benefit of the successors and assigns of the respective parties hereto. However, this Agreement shall not be assigned by Developer in whole or in part without the prior written consent of City. 17. Governing Law. This Agreement has been made in and will be construed in accordance with the laws of the State of California, and exclusive venue for any action involving or arising out of this Agreement will be in Orange County. 18. Attorneys' Fees. If a Party hereto files any action or brings any action or proceeding against another Party arising out of this Agreement, then the prevailing Party shall be entitled to recover as an element of its costs of suit, and not as damages, its reasonable attorneys' fees as fixed by the court, in such action or proceeding or in a separate action or proceeding brought to recover such attorneys' fees. For the purposes hereof the words "reasonable attorneys' fees" mean and include, in the case of the City, salaries (or fees) and expenses of the lawyers employed by the City (allocated on an hourly basis) who may provide legal services in connection with the representation of the City in any such matter. 19. Severability. Should any provision of this Agreement be held by a court of competent jurisdiction to be either invalid or unenforceable, the remaining provisions of this Agreement will remain in effect, unimpaired by the holding. 3651962803 9 20. Integration. This instrument constitutes the sole agreement between City and Developer respecting the above matters, and correctly sets forth the obligations of City and Developer. Any Agreements or representations by City to Developer not expressly set forth in this instrument are void. 21. Construction. The language of each part of this Agreement will be construed simply and according to its fair meaning, and this Agreement will never be construed either for or against either party, whether or not that party drafted all or a portion hereof. 22. No Prior Agreements and No Oral Modifications. This Agreement represents the entire understanding of City and Developer with respect to the subject matter hereof and supersedes all other prior or contemporaneous written or oral agreements pertaining to the subject matter of this Agreement. This Agreement may be modified, only in writing signed by the authorized representatives of City and Developer. 23. No Partnership or Joint Entity. This Agreement is not intended to and does not create a partnership or any other form of single or joint entity or any sort comprised of the Parties and/or their attorneys. 24. Authority/Modification. Each party represents and warrants that all necessary action has been taken by such party to authorize the undersigned to execute this Agreement on behalf of such party and to engage in the actions of such party described herein. This Agreement may be modified solely by written amendment signed by both City and Developer. City's City Manager, or designee, may execute any such amendment on behalf of City. 25. Counterparts. This Agreement may be executed in any number of counterparts, each of which will be an original, but all of which together will constitute one instrument executed on the same date. [SIGNATURES APPEAR ON NEXT PAGE] 3651962803 10 IN WITNESS WHEREOF the parties hereto have executed this Agreement as of the day and year first hereinabove written. ATTEST: APPROVED AS TO FORM: SONIA g, CARVALHO City Py g rusty n IW%10 RECOMMENDED FOR APPROVAL: STEVEN A. MENDOZA Executive Director Community Development Agency 3651962803 11 CITY OF SANTA ANA STEVEN MENDOZA Acting City Manager CHICK-FIL-A, INC., A GEORGIA CORPORATION Name: af*en he,J jk't- Title: Djv-ze r, �l Tax ID #:5a- o9 Sat Dated: a./-1 /I I