HomeMy WebLinkAbout011706 Further Consideration AA M Release Jt Escrow Inst Vinci InvestREQUEST FOR
AGENCY ACTION
Edu tion 1st
AGENCY BOARD MEETING DATE: AGENCY SECRETARY USE ONLY:
JANUARY 17, 2006
TITLE: APPROVED
FURTHER CONSIDERATION OF
ACQUISITION AGREEMENT,
MUTUAL RELEASE AND JOINT
ESCROW INSTRUCTIONS WITH
VINCI INVESTMENT CO., INC.
RECOMMENDED ACTION
❑ As Recommended
❑ As Amended
❑ Ordinance on 1s` Reading
❑ Ordinance on 2n' Reading
❑ Implementing Resolution
❑ Set Public Hearing For
CONTINUED TO
FILE NUMBER
Approve payment of $1,000,000 in satisfaction of claims for extraordinary
expenses by Vinci Investment Co., Inc.
DISCUSSION
On January 3, 2006, the Community Redevelopment Agency of the City of
Santa Ana adopted Resolution No. CRA 2006 -01 as amended (Exhibit 1). The
actions by the Redevelopment Agency approved the Acquisition Agreement,
Mutual Release and Joint Escrow Instructions with Vinci Investment Co.,
Inc., with the exception of the $1,025,000 identified as payment for a
full and complete settlement and compromise of Vinci's claims for
extraordinary expenses incurred in the Joher litigation and for all other
disputes and potential claims against the Agency. During negotiations
regarding this matter, Vinci Investment Co., Inc. agreed to removal of
the consideration of $25,000 from the total $1,025,000. Also, the Agency
Board directed the staff to review all of the supporting documentation
for the claim of $1,000,000 for extraordinary expenses.
Pursuant to direction of the Agency Board at its meeting of January 3,
2006, staff has reviewed receipts, invoices and other forms of
documentation submitted by Vinci Investment Co., Inc. in verification of
the extraordinary expenses incurred as previously described above. A
review to date shows that the actual amount of extraordinary expenses
submitted exceeds the $1,000,000 claimed by Vinci Investment Co., Inc.
These amounts include payment of $810,465 in legal fees ($433,715 to
General Counsel, $346,750 to Bankruptcy Counsel, and $30,000 to Appellate
Counsel), $162,500 in settlement fees to land owner, and $77,059 in trial
experts and consultants.
5 -6
(JWF 1/10/05)
RESOLUTION NO. CRA 2006 -001
A RESOLUTION OF THE COMMUNITY
REDEVELOPMENT AGENCY OF THE CITY OF SANTA
ANA APPROVING AN ACQUISITION AGREEMENT,
MUTUAL RELEASE AND JOINT ESCROW
INSTRUCTIONS WITH VINCI INVESTMENT CO., INC., A
CALIFORNIA CORPORATION, DOING BUSINESS AS
HONDA SANTA ANA.
BE IT RESOLVED BY THE COMMUNITY REDEVELOPMENT AGENCY OF
THE CITY OF SANTA ANA AS FOLLOWS:
Section 1. The Board of the Community Redevelopment Agency of the City of
Santa Ana hereby finds, determines and declares as follows:
A. In December 2003, Vinci Investment Co., Inc., Inc. dba Honda Santa Ana,
( "Vinci ") entered into an Agreement of Purchase with various members of the Joher
family (the "Vinci /Joher Agreement ") for the purchase of the business and related assets
at 2101 East Edinger Avenue known as the Mr. J's Night Club and Cabaret (the "Joher
Assets ").
B. On March 15, 2004, the Agency approved an Agreement for Acquisition of
Leasehold and other interests related to the Joher Assets under which the Agency
would acquire most of the Joher Assets immediately after close of the Vinci /Joher
Agreement.
C. The Agency's Executive Director and Vinci previously signed term sheet
dated January 21, 2004 (the "Term Sheet ") outlining the terms and conditions of a
potential Disposition and Development Agreement ( "DDA ") to be negotiated between
the Agency and Vinci following acquisition of the Joher Assets. The term sheet
contemplated, among other things, acquisition of the fee interest in the property
underlying the Joher Assets (the "Erickson Property. ")
D. The Joher Sellers breached the Vinci /Joher Agreement. Vinci initiated and
successfully prosecuted litigation against the Joher Sellers to compel performance of
the Joher Sellers' contractual obligations to Vinci under the Vinci /Joher Agreement (the
"Joher Litigation ").
E. Due to the delays and expenses created by the Joher Litigation, the
Agency terminated the Agency/Vinci Agreement on August 19, 2005.
EXHIBIT 1
5 _ Q Resolution No. CRA 2006 -001
O Page 1 of 3
AYES: Boardmembers: Bist, Bustamante,Garcia, Pulido, Solorio (5)
NOES: Boardmembers: Alvarez (1)
ABSTAIN: Boardmembers: Christy (1)
NOT PRESENT: Boardmembers: None (0
CERTIFICATE OF ATTESTATION AND ORIGINALITY
1, PATRICIA E. HEALY, Secretary of the Agency, do hereby attest to and certify the
attached Resolution No. CRA 2006 -001 to be the original resolution adopted by the
Community Redevelopment Agency of the City of Santa Ana on January 3, 2006.
Date:
Recording Secretary
Community Redevelopment Agency
City of Santa Ana.
5 -10 Resolution No. C Page 3 of 3