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HomeMy WebLinkAboutPEEBLER, SCOTT AS SUCCESSOR IN INTEREST TO GERALD PEEBLER - 2014A- 2014 -277 SETTLEMENT AGREEMENT AND MUTUAL AND GENERAL RELEASE This Sett ement Agreement and Mutual and General Release ( "Agreement ") is entered I into this — day of 2014, by and between Scott Peebler as — successor in interest to Gerald Peebler ( "Petitioner"), the City of Santa Ana, a charter city and municipal corporation ( "City ") and the Successor Agency to the Former Community Redevelopment Agency of the City of Santa Ana ( "Successor Agency "). Petitioner, City and v Successor Agency are collectively referred to herein as the "Parties." 1 Recitals A. On July 6, 1982, the City Council of the City of Santa Ana adopted the South Main Street Redevelopment Plan (adopted by Ordinance No. NS- 1639). Following the City's adoption of the redevelopment plan, a validation action was filed by Petitioner in Peebler v. City of Santa Ana, Orange County Superior Court, Case No. 38- 58 -59, challenging the South Main Street Plan ("Peebler"). B. Based upon a settlement agreement and stipulation entered into by the Peebler plaintiffs, the City, and the Former Community Redevelopment Agency of the City of Santa Ana ( "Former Agency "), on March 2, 1984, the court entered a Judgment on Stipulation for Entry of Judgment validating the South Main Street Redevelopment Plan and the ordinance that adopted that plan, nantely, Ordinance No. NS -1639 ( "Stipulated Judgment "). The Stipulated Judgment required that the Peebler plaintiffs and the Former Agency carry out the terms and conditions set forth in the Stipulation and Resolution No. 84 -2, adopted by the Former Agency on February 27, 1984. Among other things, the Former Agency was required to: (1) set aside 20% of tax increment solely and exclusively for low and moderate income housing and related activities; and (2) use 20% of tax increment for public improvements such as parking, and for providing financial incentives such as rebates, commercial improvements, and reduced interest rehabilitation loans within a designated area referred to by the parties as "South Main Commercial Corridor." C. In June 2011, the California Legislature adopted, and the Governor signed, ABXI 26, which provided for the statewide dissolution of all redevelopment agencies effective February 1, 2012.1 The Former Agency's obligations were assumed by the Successor Agency to the Former Agency, pursuant to the provisions of ABX126. D. The Successor Agency listed the Stipulated Judgment and other similar stipulated judgments as enforceable obligations on each of the Successor Agency's Recognized Obligation Payment Schedules ( "ROPS "), but each time DOF determined that they were not enforceable obligations and that the Successor Agency could not receive Redevelopment Property Tax Trust Fund monies ( "RPTTF ") to fund them. r ABXI 26's original dissolution date of October 1, 2011 was modified to February 1, 2012 by California Redevelopment Assn. v. Matosantos (20) 1) 53 CaWth 231, on December 29, 2011. -1- 55394.LM0 5193 1 3 5 1 I.9 E. Petitioner filed a Petition for Writ of Mandate and Verified Complaint for Declaratory and Injunctive Relief in Sacramento County Superior Court on June 7, 2012 in Case No. 34- 2012- 80001172 (the "Action "), naming the State of California Department of Finance ( "DOF "); Ana J. Matosantos, in her official capacity as Director of the State of California Department of Finance, Jan Grimes, in her official capacity as the Auditor - Controller of the County of Orange; and the City of Santa Ana as Successor Agency for the former Redevelopment Agency of the City of Santa Ana. The Action challenged DOF's determination that the Stipulated Judgment was not a recognized enforceable obligation that could be listed on the ROPS. F. On February 20, 2013, Judge Timothy M. Frawley issued a Ruling determining that the Stipulated Judgment was not an enforceable obligation and Petitioner timely filed an appeal (the "Appeal "). G. Pursuant to AB 1484, the legislation enacted to clarify, revise and add to certain provisions of ABX1 26, the Successor Agency caused to be prepared two due diligence reviews: (i) the Low and Moderate Income Housing Fund Due Diligence Review ( "LMIHF DDR ") and (ii) the Other Funds and Accounts Due Diligence Review (the "OFA DDR "). The purpose of the DDRs was to determine the amount of unencumbered money available for distribution to the taxing entities that receive property taxes within the former redevelopment project areas. H. On May 13, 2014, DOF issued a letter determining, based on its review of the LMIHF DDR, that the Successor Agency had $32,000,945 in unencumbered funds available for distribution to the taxing entities. On May 8, 2013, DOF issued a letter, based on its review of the OFA DDR that the Successor Agency had $21,760,018 in unencumbered funds that was available for distribution to taxing entities. I. On April 29, 2013, the Successor Agency, as well as City of Santa Ana and the Housing Authority of the City of Santa Ana filed a Petition for Writ of Mandate and Complaint for Injunctive and Declaratory Relief in Sacramento Superior Court on April 29, 2013 in Case No. 34- 2013 - 80001477 (the "Related Action ") naming DOF, the state Board of Equalization and the Auditor - Controller as respondents and defendants and certain Real Parties in Interest, including Petitioner, and subsequently filed a First Amended Petition for Writ of Mandate and Complaint for Injunctive and Declaratory Relief on May 30, 2013 and a Second Amended Petition for Writ of Mandate and Complaint for Injunctive and Declaratory Relief on February 28, 2014. The Action challenged nurnerous determinations made by DOF, including those made with respect to the LMIHF DDR and OFA DDR. J. On August 19, 2014, Judge Shelleyanne W.L. Chang issued a Ruling On Submitted Matter on the Related Action denying Petitioners' Petition for Writ of Mandate and Complaint for Injunctive and Declaratory Relief ( "Ruling "). Petitioners in the Related Action determined not to file an appeal, and the judgment in the Related Action is final. K. In the interim, of the amounts determined by DOT to be available for distribution to the taxing entities under the LMIHF DDR and OFA DDR, $25,458,054 has either been remitted by the Successor Agency to the Auditor- Controller or represents a reduction in the allocation of RPTTF allocated to the Successor Agency, pursuant to Health and Safety Code section 34179.6(h)(2), so that $28,302,909 remains in the Successor Agency's possession. Thus, the total -2- 55394.00005 \9313511.9 amount remaining in the Successor Agency's possession that was determined to be available for distribution under the LMIHF DDR and OFA DDR is $28,302,909 (the "Remaining DDR Funds "). L. Based on the foregoing, the Parties now desire to compromise and settle the Action. NOW, THEREFORE, for and in consideration of the mutual agreements set forth herein and for other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Parties agree as follows: 1. Within five (5) business days of the approval and execution of this Agreement by all parties, the Successor Agency shall remit to the Auditor - Controller the Remaining DDR Funds and simultaneously notify DOE and Petitioner in writing of such remittance. Within five (5) business days of such notification, Petitioner shall file a request for the dismissal of its Appeal. 2. After receiving notification that the Appeal has been dismissed, City agrees that it shall establish and deposit Four Million Seven Hundred Thousand Dollars ($4,700,000) into a separate fund (the "Feebler Fund "), which shall be used solely for the following purposes: a. Construction of public improvements (the "Public Improvements ") (as defined below) in the South Main Corridor (the "South Main Corridor ") (as defined below) and as approved by the City, as more fully set forth below in Section 3; b. Administrative and related costs incurred by the City arising from and directly related to the construction of the Public Improvements, in an amount not to exceed Eighteen Percent (18 %) of the construction cost of the Public Improvements; and C. Petitioner's litigation costs in the amount of Six Thousand Four Hundred Nineteen Dollars and Thirty -three Cents ($6,419.33) to be paid to the University of California, Irvine School of Law, Community and Economic Development Clinic ( "UCI "), which served and continues to serve as counsel to Petitioner. As used in this Agreement, "Public Improvements" shall mean public facilities, streets, drains, sewers, parks, sidewalks, streetscapes, landscaping and lighting located on public property or in public rights -of -way. In addition, as used in this Agreement, "South Main Corridor" shall mean (i) South Main Street between Warner Avenue and First Street; and (ii) First Street between Parton Street and Standard Avenue. The Parties further agree that the Peebler Fund shall not be used for repair or maintenance of existing or future Public Improvements. 3. In addition to the Peebler Fund, City hereby agrees to allocate and hold in a special account an additional Two Hundred Fifty Thousand Dollars ($250,000) (the "Design Fund ") to pay for the services of Gensler and Associates, or another private design firm (the "Design Firm ") as determined by Petitioner to develop a plan for the Public Improvements to be developed in the South Main Corridor. If Petitioner determines to use a firm other than Gensler and Associates, Petitioner shall notify City in writing within sixty (60) days of the date of this Agreement of the name of the designated Design Firm. Design Finn shall submit claims to City, 3- 55394.00005V9313511.9 with a copy to UCI, for payment for its services, along with supporting documentation. City shall not issue payment to Design Firm until receipt of written approval from UCI. Upon receipt of such approval, City shall issue payment to Design Firm in accordance with City's normal accounting procedures. In no event shall the City be obligated to pay more than Two Hundred Fifty Thousand Dollars for the costs of the design work for the Public Improvements. Upon request, City shall provide UCI with an accounting of all such payments made to Design Firm. City agrees that it shall cooperate with Design Firm, if requested, to help ensure that the proposed Public Improvements comply with City standards and requirements. Any unexpended money in the Design Fund shall be deposited in and used for the same purposes as the Peebler Fund. UCI shall be responsible for monitoring the work to be performed by Design Firm, with the intent that a list of proposed Public Improvements to be constructed under this Agreement shall be submitted to City for review and approval within six (6) months of the date of this Agreement so that a list of City- approved Public Improvements can be developed within nine (9) months of the date of this Agreement. In the event that Petitioner does not submit a list of proposed Public Improvements to the City within the time set forth herein, City shall notify Petitioner in writing of such breach, and Petitioner shall have thirty (30) days to cure such breach. City shall not unreasonably withhold approval of the proposed Public Improvements, and shall meet and confer with Petitioner in good faith to resolve any disputes regarding any disapproved Public Improvements and the use of the Peebler Fund. If no Public Improvements have been proposed and approved by the City within one (1) year of the date of this Agreement, then the City shall have the discretion to use the Peebler Fund for projects within the boundaries of the former South Main Street Redevelopment Project Area and the parties shall have no further rights against or obligations to each other. 4. The City shall be solely responsible for the construction of any approved Public Improvements and shall follow its normal procedures for the award of and payment for such work, including but not limited to, compliance with any required competitive bidding requirements and the payment of prevailing wages. In no event shall City be required to pay for the Public Improvements, including the City's associated administrative costs, from any funds other than those in the Peebler Fund. In the event that the costs of the approved Public Improvements exceeds the amount available in the Peebler Fund, the parties agree that they shall meet and confer in good faith to determine which Public Irprovements should be constructed. The City shall use its good faith efforts to complete construction of the approved Public Improvements within seven (7) years of the date of this Agreement. Any unexpended funds in the Peebler Fund remaining after completion of the construction of the Public Improvements shall be retained by the City to be used for the general benefit of the South Main Corridor. 5. Any notice to be given by any Party hereunder must be given in writing and delivered in person, or by reputable nationwide overnight courier or forwarded by certified or registered United States mail, postage prepaid, return receipt requested, or through electronic mail with read receipt at the address indicated below, unless the party giving such notice has been notified in writing of change of address: -4- 55394.00005V9313511.9 If to Peebler: Gerald Peebler c/o Scott Peebler 13926 La Mirada Blvd. La Mirada, CA 90638 Email: s.peebler @gmail.com and c/o Carrie Hempel, Clinical Professor of Law Associate Dean of Clinical Education and Service Learning University of California, Irvine School of Law 401 E. Peltason, Suite 3500 Irvine, CA 92697 -8000 Phone: (949) 824 -3575 Fax: (949) 824 -2808 Email: CHempel @law.uci.edu If to City: Cleric of the City Council City of Santa Ana 20 Civic Center Plaza (M -30) P.O. Box 1988 Santa Ana, CA 92702 -1988 Fax: (714) 647-6956 and City Attorney City of Santa Ana 20 Civic Center Plaza (M -29) P.O. Box 1988 Santa Ana, CA 92702 Fax: (714) 647 -6515 Any such notices shall be effective on the date such notice is delivered, if notice is given by personal delivery, overnight courier or electronic mail; or if such notice is sent through the United States mail, on the date of actual delivery as shown by the addressee's receipt; or expiration of three (3) days following the date of mailing, whichever occurs first. -5- 55394.00005 \9313511.9 6. In further consideration of this Agreement, Petitioner does hereby release and discharge Successor Agency and City and their employees, administrators, assigns, agents, directors, officers, partners, representatives, insurance companies, lawyers, and all persons acting by, though, under, or in concert with them or any of them, past and present of and from any and all Claims arising out of or related to the Action. Successor Agency and City do thereupon release and discharge Petitioner and all persons acting by, though, under, or in concert with him, past and present of and from any and all Claims arising out of or related to the Action. 7. The Parties intend that this Agreement shall be a full and final settlement of and bar to any and all claims and /or causes of action arising between and /or among them as related to the Action. In connection with the release made herein, the Parties acknowledge that they may hereafter discover facts different from or in addition to the facts which they may know or believe to be true with respect to the Action, but that they intend to fully and forever settle the Action among the Parties. In furtherance of such intention, the release given herein shall be and remain in effect as a full and complete release, notwithstanding discovery of any such different or additional facts related to the Action. Therefore, the Parties acknowledge that they have been informed of and are familiar with the provisions of Civil Code section 1542, which provides as follows: A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR. The Parties hereby waive and relinquish all rights and benefits under Civil Code section 1542 to the full extent that they may lawfully waive all such rights and benefits pertaining only to the Action. 8. The Parties agree and mutually acknowledge that this Agreement is for settlement purposes only. All Parties deny any wrongdoing in connection with the Action. Neither this Agreement nor any action taken pursuant to this Agreement shall constitute any admission of any wrongdoing, fault, violation of law, or liability of any kind on the part of the Parties, or any admission by and of the Parties of any claim or allegations made in any action against such party. This Agreement is entered into to avoid the attorneys' fees, costs, expenses and risks associated with litigating the Action. 9. Except as set forth in Section 2.c. of this Agreement, each party shall bear its own attorneys' fees and costs incurred in connection with the Action and in the preparation, negotiation and drafting of this Agreement. 10. Any person executing this Agreement on behalf of any Party does hereby personally represent and warrant to the other Parties that he or she has the authority to execute this Agreement on behalf of, and to fiilly bind, such Party. 11. This Agreement may be executed in counterparts -6- 55394.00005 \9313511.9 12. In any action brought to declare the rights and obligations provided for herein or to resolve a dispute arising in relation to this Agreement or to enforce the terms of this Agreement, the prevailing party shall be entitled to an award of reasonable attorneys' fees in an amount to be determined by the court. [Signatures on following pages] -7- 55394.00005V9313511.9 IN WITNESS WHEREOF, the Parties have executed this Agreement as of the dates listed below: CITY OF SANTA ANA, a municipal corporation P d i � ` 2,0 1 —{ Date: By; Name: -ba ✓L. S icz uti z u Approved as to form: Date: t�t-,//, Iry (dQ� By-':��j luklt City Attorney SUCCESSOR AGENCY TO THE FORMER COMMUNITY REDEVELOPMENT AGENCY OF THE CITY OF SANTA ANA, a public body, corporate and politic N 6-V - ZO' Z® ! y By: Approved as to form: Date: N-'4. , 'fiD B'`► ATTEST: tJ"� p'(' L)- w-I -r/ AMRIA D. HUIZAR ' CLERK OF THE COUNC1 55394.00005 \9313511.9 Name: David Cavazos City Manager By: Special Counsel -and- 3 Date: %/ / 7 ;2 ®l Approved as to form: Date: 11- /3 - 7-01 `% 9 55394.00005\9313 511.9 SCOTT PEEBLEP, as successor in interest to Cm,ald Peebler By By:1 Carrie Hempel University of California, Irvine School of Law