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HomeMy WebLinkAbout04 - Lic Agrmt - Wilson Auto GroupTF CTS AGEfdCY BOARC MEETING CAFE: AGENCY SECRETARY USE ONLY: FEBRUARY 16, 2010 TI'CLE: APPROVAL OF LICENSE AGREEMENT - WILSON AUTOMOTIVE (CROUP C.-vim.,-~ ~~~,N, ~~ EX l9TIVE CIRECTOR APPROVED ^ As Recommended ^ As Amended ^ Ordinance on tsr Reading ^ 6rdinance on 2ntl Reading ^ Implemenfing Resolution ^ Set Public Hearing For_ CONTINUED TO ~I~E NuMBER REC®9VEM~N®E®ACTI®~@ Authorize the Executive Director and Agency Secretary to execute the attached Right of Entry and License Agreement with DWWRBB, Inc. (Wilson Automotive Group) for the property generally located at 2051-2101 East Edinger Avenue, subject to non-substantive changes approved by the Executive Director and Agency General Counsel. DISCUSSION In January 2006, the Agency acquired a ±40 year lease of approximately 1.9 acres of property located at 2051-2101 East Edinger Avenue from Vinci Investment Co. (Vinci) (then-owner of the adjacent Honda Santa Ana dealership) for the purpose of facilitating an expansion of the Santa Ana Auto Mall. Pursuant to the terms of the Acquisition Agreement, the Agency licensed the property back to Vinci for two years, during which time Vinci was to undertake certain improvements such as landscaping, lighting and signage. Upon completion of the improvements, the lease would then be reassigned to Vinci. In May 2006, Wilson Automotive Group (Wilson) acquired the Honda dealership from Vinci. On December 18, 2006, the Agency approved an assignment of the Acquisition Agreement from Vinci to Wilson, under which Wilson assumed Vinci's other obligations to the Agency except for the Agency lease (due to unresolved issues with the fee owner of the property). Instead, Vinci entered into a separate parking agreement with Wilson until such time as Wilson could assume the lease as contemplated by the Acquisition Agreement; and in January 2008, the Agency approved atwo-year extension to the license. During this time, Wilson completed many of the improvements as required by the Acquisition Agreement and is working toward completion of those items remaining. However, the two-year 4 - 23 Approval of License Agreement - Wilson Automotive Group February 16, 2010 Page 2 license extension recently expired. Additionally, Vinci no longer has any interest in the Fionda dealership and is in Chapter 7 bankruptcy proceedings. To enable Wilson to continue its improvements and utilization of the property for the adjacent Honda dealership in fulfillment of the purposes of the Acquisition Agreement, it is recommended that the Agency grant the proposed two-year License Agreement to Wilson (Exhibit 1). This will also allow time for resolution on the Lease assignment between Vinci and Wilson. Wilson has agreed to pay any amount the Agency is obligated to pay as rent under the lease for the property. ENVI120NMENTAL BMPACT In accordance with the California Environmental Quality Act, the proposed project is exempt. Therefore, no further action is required. FISCAL IMPACT There is no fiscal impact associated with this action. '-~~;; Cynthia J Executive ,g --- ~ Nelson Director CJN/SG/mlr Exhibit: 1. Right of Entry and License Agreement - 2~ RIGHT OF ENTRY AND LICENSE AGREEMENT THIS RIGHT OF ENTRY AND LICENSE AGREEMENT ("Agreement") is made and entered into as of day of , 2010 by and between the COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a body corporate and politic organized and existing under the Community Redevelopment Law of the State of California, California Health & Safety Code § 33000 et seq. (hereinafter referred to as the "Agency"), and DWWRBB, Ireco, a California Corporation, doing business as Freeway Honda, with respect to the following: RECITALS A. The Agency is the fee owner of that certain real property located on the northeast corner of E. Edinger and Auto Mall Drive in the City of Santa Ana, California, described as APN Nos. 402-101-43 (the "CRA Property"): B. The Agency is the Lessee of that certain property commonly known as 2051 and 2101 East Edinger Avenue, Santa Ana, California (the "Erickson Leased Premises") pursuant to that certain Standard/Industrial/Commercial Single-Tenant Lease-Net dated December 28, 1992 between Erickson Properties Corporation, a California corporation ("Erickson"), as Landlord, and Mohammed Hussain Joher aka Mohammed Hussain Joher, Mohammed Zouhair Joher and Hassan Joher (collectively, "Johers"), as Tenant, covering the Erickson Leased Premises, as the Johers' interest was ultimately assigned by Vinci to the Agency (the "Lease") (the CRA Property and the Erickson Leased Premises are hereinafter collectively referred to as the "Property"). C. Vinci Investment Co., Inc. ("Vinci") and the Agency entered into that certain Acquisition Agreement, Mutual Release and Joint Escrow Instructions dated as of January 19, 2006 (the "Acquisition Agreement"). D. Pursuant to the Acquisition Agreement, the Agency and Vinci entered into that certain Right of Entry and License Agreement dated as of January 24, 2006 that allowed Vinci to use the Property for the sole purpose of the storage and sale of Honda automobiles and trucks consistent with SD 60 zoning requirements for the sole benefit of Vinci's Honda of Santa Ana dealership operating on the land adjacent to the Property ("Agency License Agreement"). E. DWWRBB, Inc. and Vinci entered into that certain agreement entitled "Purchase and Sale of Dealership Assets" dated as of May 10, 2006 in which D W WRBB, Inc. acquired Vinci's interests in the Honda of Santa Ana business (now know as "Freeway Honda") and Vinci assigned to DWWRBB, Inc. certain interests it held under the Acquisition Agreement. F. Pursuant to the sale of the dealership to DW WRBB, Inc., Vinci in turn licensed the Property to DWWRBB, Inc. pursuant to that certain "Parking License" dated on or about October 26, 2006 so that DWWRBB, Inc. would be able to use the Property fox the Honda dealership until such time as the Lease was assigned to the to the owner of Honda of Santa Ana as contemplated by the Acquisition Agreement. G. Upon the close of the sale of Honda of Santa Ana pursuant to the Purchase and Sale of Dealership Assets, DWWRBB, Inc. has been operating the Honda dealership on the 4, - 25 EXHIBIT 1 Property and the land adjacent to the Property and has paid to the Agency the all sums due as rent due under the Lease, less any applicable credits under the Acquisition Agreement. H. DWWRBB, Inc. has completed certain improvements on the Property as required by the Acquisition Agreement and is working towards completion of the remaining improvements. I. The Agency License Agreement between the Agency and Vinci has expired. Vinci is no longer has any interest in the Honda dealership adjacent to the Property and is now in Chapter 7 bankruptcy proceedings. J. The Agency now wishes to enable DWWRBB, Inc. to continued to improve the Property and to utilize the Property for The benefit of its adjacent Honda dealership in fulfillment of the purposes of the Acquisition Agreement by granting a right of entry and license to DWWRBB, Inc. pursuant to the terms and conditions described in this Agreement until such time as the Lease can be reassigned to DWWRBB, Inc. in accordance with purposes of the Acquisition Agreement. N®W, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, DWWRBB, Inc. and Agency do herebyagree as follows: 1. Right of Entry and License. Provided that all of the terms and conditions of this Agreement are fully satisfied, as of the Effective Date of this Agreement, the Agency hereby grants to DW WRBB, Inc. and its' employees, agents and contractors the nonexclusive, nonassignable, personal right and'license to enter upon the Property to (a) undertake demolition and environmental testing, (b)' construct certain improvements, as approved in writing by the Agency's Executive Director (who's approval shall in no way be deemed to constitute an approval by the City of Santa Ana), (c) store and sell vehicular inventory consistent with SD60 zoning requirements, and fox no other purposes without the prior written approval of the Executive Director of the Agency. This Agreement shall automatically terminate and expire thirty (30) days from the date of this Agreement. It is expressly understood that this Agreement does not in any way whatsoever grant or convey any rights of possession, easement or other cognizable property interest in the Property. Upon termination of this Agreement, unless the parties agree otherwise, all improvements constructed by DWWRBB, Inc: on the Property shall be the property of the Agency. 2. Agreement: By execution of this Agreement, DWWRBB, Inc. agrees for itself and on the behalf of its employees, agents, consultants and contractors as follows: (a) That DWWRBB, Inc. will not permit any dangerous condition or waste to be created on the Property. (b) All acts and things done by DWWRBB, Inc. on the Property will be done in a careful and reasonable manner, in accordance with all federal, state and local laws. (c) DWWRBB, Inc. shall enter the Property entirely at its own cost, risk and expense. '~t ®26 (d) DWWRBB, Inc. warrants that it shall not interfere in any way with the ongoing environmental cleanup being undertaken on the CRA Property, and acknowledges and agrees that the Insurance (paragraph 2(e)) and Indemnity (paragraph 4) requirements of this Agreement apply to this warranty. (e) Prior to undertaking performance of work under this Agreement, DWWRBB, Inc. shall maintain and shall require its subcontractors, if any, to obtain and maintain insurance as described below: i. Commercial General Liability Insurance. DWWRBB, Inc. shall maintain commercial general liability insurance naming the Agency and the City of Santa Ana and their respective officers, employees, agents, volunteers and representatives as additional insureds) and shall include, but not be limited to, protection against claims arising from bodily and personal injury, including death resulting therefrom and damage to property, resulting from any act or occurrence arising out of DWWRBB, Inc.'s operations in the performance of this Agreement, including, without limitation, acts involving vehicles. The amounts of insurance shall be not less than the following: single limit coverage applying to bodily and personal injury, including death resulting therefrom, and property damage, in the total amount of $2,000,000.00 per occurrence from an insurance company licensed to do business in the State of California with an A.M. Best Company rating not lower than A-VII. DW WRBB, Inc. shall supply Agency with a fully executed additional insured endorsement in substantially the form approved by the Agency General Counsel. ii. The following requirements apply to the insurance to be provided by DWWRBB, Inc. pursuant to this section: • DWWRBB, Inc. shall maintain all insurance required above in full force and effect for the entire period covered by this Agreement. • Certificates of insurance shall be furnished to the Agency upon execution of this Agreement and shall be approved in form by the Agency General Counsel. • Certificates and policies shall state that the policies shall not be canceled or reduced in coverage or changed in any other material aspect without thirty (30) days prior written notice to the Agency. iii. If DWWRBB, Inc. fails or refuses to produce or maintain the insurance required by this section or fails or refuses to furnish the Agency with required proof that insurance has been procured and is in force and paid for, the Agency shall have the right, at its election, to forthwith terminate this Agreement. (f) DWWRBB, Inc. shall not permit any mechanics', materialmen's or other liens of any kind or nature ("Liens") to be filed or enforced against the Property in connection with this Agreement. DWWRBB, Inc. shall indemnity, defend and hold harmless Agency from all liability for any and all liens, claims and demands, together with costs of defense and reasonable attorneys' fees, arising from any Liens. Agency reserves the right, at its sole cost and '+ - 2 expense, at any time and from time to time, to post and maintain on the Property, or any portion thereof, or on the improvements on the Property, any notices ofnon-responsibility or other notice as maybe desirable to protect Agency against liability. In addition to, and not as a limitation of Agency's other rights and remedies under this Agreement, should DWWRBB, Inc. fail, within ten (10) days of written request from Agency, either to discharge any Lien or to bond for any Lien, or to defend, indemnify, and hold harmless Agency from and against any loss, damage, injury, liability or claim arising out of a Lien, then Agency, at its option, may elect to pay such Lien, or settle or discharge such Lien and any action or judgment related thereto and all costs, expenses and attorneys' fees incurred in doing so shall be paid to Agency, as applicable, by DWWRBB, Inc. upon written demand. (g) DW WRBB, Inc. shall not have any interest in the Property or be entitled to any reimbursement or repayment for any work performed upon the Property pursuant to this Agreement. (h) DWWRBB, Inc. shall take all necessary precautions to prevent the import and/or release into the environment of any hazardous materials which are imported to, in, on or under the Property during this right of entry. If hazardous materials are imported onto the Property as a result of the surveying and geotechnical soil testing, DWWRBB, Inc. shall be solely responsible for removing such imported hazardous materials in conformance with all governmental requirements. DWWRBB, Inc. shall report to the Agency, as soon as possible after each incident, any unusual or potentially important incidents with respect to the environmental condition of the Property. 3. Indemnity. DWWRBB, Inc. hereby agrees to defend, indemnify and hold the Agency and the City of Santa Ana and their respective officers, officials, members, employees, agents and representatives, harmless from and against any and all loss, damage, injury, liability, claim, cost or expense (includmg, without limitation, reasonable attorneys' fees, expert witness fees, court costs, and expenses) arising from or attributable to the activities of DWWRBB, Inc. or any of its employees, agents, invitees, consultants or contractors upon the Property pursuant to this Agreement and from any claims that the Agency and DWWRBB, Inc. or either do not have the authority or right to enter into this Agreement. All use of and entry upon the Property shall be at the sole cost, risk and expense of DW WRBB, Inc.. DWWRBB, Inc. shall be responsible for all costs of operating and maintaining the License Area during the term of this Agreement, including the cost of all insurance, utilities, maintenance (including landscaping) and repairs not otherwise paid by Erickson under the Lease. DWWRBB, Inc. recognizes and understands that should this Agreement be deemed by the County of Orange to create a possessory interest subject to property taxation, that DWWRBB, Inc. shall be subject to the payment of property taxes levied on such interest, and that it shall defend, indemnify and hold the Agency and the City of Santa Ana and their respective officers, officials, members, employees, agents and representatives, harmless from and against any and all such claims. 4. License Payment. There shall be no independent license fee for this Agreement. The consideration for this Agreement are the rights and obligations of the parties pursuant to the Acquisition Agreement. DWWRBB, Inc. agrees, however, to pay to the Agency or the Agency's designee any amounts Agency is obligated to pay as rent under the Lease, less any applicable credits. ®2~ 1Vliscellaneous. (a) Choice of Law< This Agreement is to be governed by, and construed in accordance with, the laws of the State of California. (b) Remedies. In the event DWWRBB, Inc. fails to comply with any of its obligations under this Agreement or the Acquisition Agreement within ten (10) days after written notice from the Agency to DW WRBB, Inc., the Agency may terminate this Agreement. Either party shall, in addition to all other rights provided herein or as may be provided by law, be entitled to the remedies of specific performance and injunction to enforce its rights hereunder, except to the extent expressly provided to the contrary in this Agreement. All rights and remedies under this Agreement are cumulative and no one of them shall be exclusive of any other, and each party shall have the right to pursue any one or all of such rights and remedies or any other remedy which may be provided by law, whether or not stated in this Agreement, except to the extent expressly provided to the contrary in this Agreement. (c) Counterparts. This Agreement maybe executed in two (2) or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument. (d) Non-Liability of Public Officials. No officer, employee, member, agent or representative of the Agency shall be personally liable to DWWRBB, Inc., or any successor in interest, in the event of any default or breach by the Agency, or for any amount which may become due to DWWRBB, Inc. or its successor, or for any breach of any obligation of the terms of this Agreement. IN WITNESS WHEREOF, the parties hereto have entered into this Agreement as of the date first set forth above. DWWRBB, INC., a California Corporation By: _ Name: Title: By:_ Name: Title: 4°29 C®1l~IM[JNITY REYDEVE><.OP1VIEt~T'>(" AGENCI' ®F 1'$lE CITE' ®F SANTA ANA By. Cynthia J. Nelson, Executive Director ATT>;ST': Maria D. I~uizar, Secretary of the Agency APP12®VED AS TO F®RM: Joseph W. Fletcher, Agency General Counsel 430