COMPLETED BOARD ORDER"�|E���51
Before the Board of Supervisors in and for the
County of Monterey, State of California
Agreement No.: A- 11913
Approve an Advanced Funding Agreement
with Union Community Partners for the
Negotiation of Modifications to the East
Garrison Development Agreement in the Fort
Ord Redevelopment Area.
Upon motion of Supervisor Armenta, seconded by Supervisor Potter, and carried by those
members present, the Board of Supervisors hereby:
Approved an Advanced Funding Agreement with Union Community Partners for the
negotiation of modifications to the East Garrison Development Agreement in the Fort
PASSED AND ADOPTED this 11th day of January 2011, by the following vote, to wit:
AYES: Supervisors Armenta, Calcagno, Salinas, Parker, Potter
NOES: None
ABSENT: None
I, Gail T. Borkowski, Clerk of the Board of Supervisors of the County of Monterey, State of California,
hereby certify that the foregoing is a true copy of an original order of said Board of Supervisors duly made
and entered in the minutes thereof of Minute Book 75 for the meeting on January 11, 2011.
Dated: January 21, 2011 Gail T. Borkowski, Clerk of the Board of Supervisors
County of Monterey, State of California
By n za- C'
Deputy
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SIGNED BOARD REPORT"�|E���MONTEREY COUNTY BOARD OF SUPERVISORS
MEETING: January 11, 2011 AGENDA NO.: 51
SUBJECT: Approve an Advanced Funding Agreement with Union Community Partners for
the Negotiation of Modifications to the East Garrison Development Agreement in
the Fort Ord Redevelopment Area.
DEPARTMENT: Resource Management Agency Housing and Redevelopment Office
RECOMMENDATION:
It is recommended that the Board of Supervisors approve an Advanced Funding Agreement with Union
Community Partners for the negotiation of modifications to the East Garrison Development Agreement
in the Fort Ord Redevelopment Project Area.
SUMMARY:
Union Community Partners UCP") has acquired all the interests of the former developer of the East
Garrison Project. UCP wishes to modify certain aspects of the Redevelopment Agency's Disposition
and Development Agreement and County's Development Agreement. This Advanced Funding
Agreement provides for UCP to cover the County and Agency anticipated costs of that negotiation, and
creates certain mechanisms to expedite negotiations and control costs.
DISCUSSION:
In 2006, the Agency entered into a Disposition and Development Agreement DDA"), and the County
entered into a Development Agreement DA"), with East Garrison Partners I, LLC EGP") for a
development of up to 1,470 dwelling units, some 34,000 square feet of commercial, retail and
community uses the Town Center"), and the rehabilitation of the Historic District into an artist loft
community. The entire area has been graded, a final subdivision map for Phase I was recorded, and
Phase I infrastructure for wet" utilities e.g., water, sewer and storm drain) has been installed.
Early in 2009, EGP defaulted under its loan. The loan was sold to Union Community Partners in
August, 2009 at a steep discount, and UCP foreclosed on the property in September, 2009. UCP has
now come forward with a list of items it wishes to discuss and revise relative to its obligations under the
East Garrison DDA and Development Agreement.
The proposed Advanced Funding Agreement calls for UCP to provide the County with $150,000 to
cover the costs of County and Agency staff and consultants in negotiating UCP's proposed
modifications. While this amount is non-refundable, should Agency/County costs exceed that amount,
the Agency/County will receive reimbursement of only one-half of any remaining costs up to another
$50,000). At that point, the Advanced Funding Agreement must return to the Board, should the parties
still wish to negotiate.
There are provisions in the Advanced Funding Agreement designed to expedite the process and
minimize costs, such as the monitoring of costs and agreement to conduct negotiations in a manner that
minimizes burdens on each party. Accordingly, it is anticipated that negotiations should be able to be
completed within the original budget of $150,000.
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SIGNED BOARD REPORT"�|E���OTHER AGENCY INVOLVEMENT:
County Counsel assisted in preparing and negotiating the Advanced Funding Agreement and has
approved it as to form.
FINANCING:
The recommended action will not have any effect on the General Fund. There is a small risk that
protracted negotiations will require the use of funds from the Fort Ord redevelopment project area.
Prepared by:
ook,
ector-Housing and Redevelopment
Attachment: Advanced Funding Agreement
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SIGNED FUNDING AGREEMENT�|E���ADVANCE FUNDING AGREEMENT AMONG
UNION COMMUNITY PARTNERS, COUNTY OF MONTEREY AND
REDEVELOPMENT AGENCY OF THE COUNTY OF MONTEREY FOR
NEGOTIATION AND DEVELOPMENT REVIEW SERVICES FOR THE EAST
GARRISON PROJECT AT FORT ORD
THIS ADVANCE FUNDING AGREEMENT this Agreement") is entered into as of 1-11-11
the Execution Date") by and among the County of Monterey
County""), the RedevelsOment Agency of the County of Monterey Agency") and UCP East
Garrison, LLC, a Delaware limited liability company, as Lender/Succeeding Owner" pursuant
to the Consent, Subordination and Recognition Agreement dated January 30, 2007 the
Lender/Succeeding Owner"). The Lender/Succeeding Owner, Agency and County may each be
referred to herein as a Party" or collectively as the Parties".
RECITALS
A. The Lender/Succeeding Owner has acquired all of the rights, title and interest to
the property and development rights for that development of a residential mixed use project
known as East Garrison hereinafter, the Project"), located on the former Fort Ord, pursuant to
foreclosure process.
B. The Lender/Succeeding Owner has indicated a desire to negotiate modifications
or amendments to the Agency's Disposition and Development Agreement DDA") and the
County's Development Agreement DA") for the Project.
C. The intent of this Agreement is to provide funding to the County and Agency for
certain reasonable and necessary costs of County and Agency staff and consultants in providing
services for the timely review, processing. and administration during the negotiating of the
proposed modifications to the Project.
D. A fundamental premise of this Agreement is that nothing is to be construed as a
representation, promise, or commitment on the part of County or the Agency to give special
treatment to. or exercise its discretion favorably for any modifications to the Project, in exchange
for Lender/Succeeding Owners' obligation to advance costs incurred during the negotiation
process.
F. The parties hereto agree that any amounts paid by Lender/Succeeding Owner to
the Agency pursuant to this agreement shall be considered a Project Cost" as that term is
defined on page 3 of Attachment 4 to the DDA.
NOW, THEREFORE, IN CONSIDERATION OF THE MUTUAL PROMISES
CONTAINED IN THIS AGREEMENT, COUNTY, AGENCY AND
LENDER/SUCCEEDING OWNER AGREE AS FOLLOWS:
12121(2610
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SIGNED FUNDING AGREEMENT�|E���I Funding Obligation.
1.01. LenderlSucceeding Owner agrees to advance funds to the County and Agency in
the time and manner, and subject to the conditions, set forth in this Agreement,
for Administrative Costs as described below) incurred on and after November 6,
2009. and reasonably related to carrying out the responsibilities of the negotiation
process. Administrative Costs include but are not limited to all costs reasonably
incurred by the County or Agency including costs of consultants pertaining
thereto. pursuant to Section 1.02) in undertaking Negotiation Services
Services"), which include but are not limited to:
i) Project coordination with the Lender/Succeeding Owner and their
consultants. and other relevant parties:
ii) Internal coordination between and among County and Agency
departments/agencies, and their consultants engaged to provide staff
support services in facilitating the negotiation process. County
departments/agencies include but are not limited to: Planning and Building
Inspection. Public Works, Water Resources, Parks, County Counsel,
Board Offices and Environmental Health:
iii) Coordination with other interested agencies/departments including
local, state and federal governmental entities and special districts. and
iv) Review and evaluation of project plans, reports and financial
documents as submitted by the Lender/Succeeding Owner as part of the
negotiation process. Preparation of memos, agendas, staff reports and
other materials as necessary for public meetings, including but not limited
to: the Fort Ord Subcommittee of the County Board of Supervisors, Board
of Directors of the Redevelopment Agency of the County of Monterey and
the Monterey County Board of Supervisors.
1.02 County and Agency shall provide Lender/Succeeding Owner with a copy of any
existing consultant's agreement and related scope of work for Lender/Succeeding
Owner's review and comment. and shall provide Lender/Succeeding Owner a
copy of any new proposed consultant agreement prior to entry, for any additional
review and comment.
2. Payment of Funds.
2.01, Forthwith upon approval of this Agreement and execution hereof by the
authorized representatives of the parties, the Lender/Succeeding Owner will
deposit One Hundred Fifty Thousand Dollars $(150,000) into a special fund to be
established and maintained by the County, and to be known as the East Garrison
Modification Services Fund.`' The County is authorized to disburse amounts from
said fund. from time to time, to pay for incidental costs and expenses incurred by
the County or Agency and their consultants in connection with the Services for
the Project. The County may disburse amounts from said fund to other
appropriate funds or accounts of the County or Agency to reimburse the County
or Agency, as may he) for the reasonable cost of staff time devoted to said
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SIGNED FUNDING AGREEMENT�|E���Services. as well as to pay third party invoices from consultants retained to assist
the County or Agency in such Services.
In the event that the balance in said fund is drawn down to an amount of less than
$20,000 the County may notify the Lender/Succeeding Owner of such fact, and
the Lender/Succeeding Owner shall forthwith provide the County with an
additional deposit of $50,000 to assure the continued availability of funds for the
payment of such Services. Provided, however, that once the initial deposit of
$150,000 has been expended, any further expenditures under this Agreement shall
be borne equally between Lender/Succeeding Owner and County, such that the
County shall be responsible for payment of one-half of any costs incurred under
this Agreement beyond the initial deposit, up to the amount of $50,000.
In consideration of the agreements expressed herein on the potential sharing of
costs. the County may retain any unexpended funds from the initial deposit. In
the event that additional deposits are necessary beyond the initial deposit, any
unexpended amounts of such additional deposits shall be returned to
Lender/Succeeding Owner, consistent with Section 8 Termination).
3. Review of Costs.
3.01. The County and Agency recognize that Lender/Succeeding Owner has an interest
in ensuring that costs incurred by the County and Agency pursuant to this
Agreement are reasonable. Accordingly, the County and Agency shall monitor
the incurring of Negotiation Services costs, including the work of consultants,
with the objective of avoiding unnecessary or duplicative costs of staff or
consultants, and providing for cost effective performance under consultant
contracts. Further, the Parties shall conduct their respective negotiations in a
manner that does not place undue burdens on any other Party, which might
otherwise require the use of outside consultants due to time constraints or
workload burdens.
3.02. At the request of any Party to this Agreement, and in any event not less than
quarterly during a Fiscal Year, the County and Agency, in consultation with the
Lender/Succeeding Owner, shall review the costs incurred and anticipated costs to
be incurred within such Fiscal Year.
3.03. Lender/Succeeding Owner recognizes that ability to carry out the activities
referenced in Section 1 on the part of the County or Agency is contingent on
timely provision of funds as provided for in this Agreement.
3.04. The Parties agree that the costs to be reimbursed by Lender/Succeeding Owner
pursuant to this Agreement shall not exceed Two Hundred Thousand Dollars
$200,000) without amendment of this Agreement hereinafter. the Cost Cap").
Provided however. that Lender/Succeeding Owner expressly acknowledges that
the County and Agency have no obligation to continue to negotiate modifications
in the event that the Cost Cap is reached without the prior approval of an
amendment to this Agreement.
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SIGNED FUNDING AGREEMENT�|E���3.05. Notwithstanding Section 3.04. the Parties acknowledge the existence of existing
agreements between and among them, including the DDA, the DA and the
Consent, Subordination and Recognition Agreement referenced above, and further
acknowledge the mutual rights and obligations of those agreements remain. unless
and until modified pursuant to these negotiations.
Procedures.
4.01. Submission and Payment of County Invoices. Within forty-five 45) days of the
end of each calendar quarter in a Fiscal Year Quarterly Billing Period") the
County shall prepare and provide the tender/Succeeding Owner with a notice of
the amount billed Billing Notice") for such Quarterly Billing Period which sets
forth the expenses of the Agency and County for reimbursable costs including
costs of consultants) incurred in such Quarterly Billing Period. The Billing
Notice shall set forth the amounts claimed and paid from the deposit set forth in
Section 2.01, together with such supporting documentation as the
Lender/Succeeding Owner may reasonably request. The Billing Notice shall
include staff expenses and the costs of consultants, the costs of which may be
billed separately without limiting the County's ability to redact billings as
appropriate pursuant to the attorney client and attorney work product privileges).
The County shall submit the Billing Notice to the Lender/Succeeding Owner by
the forty-fifth 45th) day following the end of each Quarterly Billing Period.
Lender/Succeeding Owner shall review the Billing Notice and identify any
disputed amounts, pursuant to Section 4.02
4.02. Payment Dispute. If Lender/Succeeding Owner takes exception to any amount
identified in a Billing Notice under this Agreement, Lender/Succeeding Owner
shall, within twenty 20) days after Lender/Succeeding Owner has received the
Billing Notice in dispute, deliver to County a written notice of protest explaining
the basis for the dispute. The Parties shall promptly meet to review the dispute
and resolve it on a mutually acceptable basis. No court action may be taken on
such dispute until the Parties have met and attempted in good faith to resolve the
dispute for not less than 30 days. Upon the resolution of the dispute. the amount,
if any, which was determined to be erroneously charged against the deposit shall
be replaced by the Agency or County, as appropriate. If the amount(s) disputed
by Lender/Succeeding Owner are unresolved for longer than 30 days. and if the
disputed amount is found to be proper, Lender/Succceding Owner shall pay
interest on the disputed amount at the lesser rate of 5% per annum or the
maximum rate permitted by law, from the date of Lender/Succeeding Owner's
notice of disputed amount to the date of resolution, to the Agency. The existence
of a dispute over any portion of a Billing Notice does not relieve
Lender/Succeeding Owner of its obligation to increase deposits. as set forth in
Section 2.01.
5. No Promise or Representation.
Lender/Succeeding Owner, Agency and County agree that nothing in this Agreement is
to be construed as a representation, promise. or commitment on the part of the County or Agency
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SIGNED FUNDING AGREEMENT�|E���to give special treatment to, or exercise its discretion favorably for, the Project or
Lender/Succeeding Owner.
6. Other Agreements Remain in Place.
It is acknowledged that certain agreements concerning the reimbursement of certain costs
of the Agency and County for the processing of the DDA and DA are currently tolled under
applicable force 171(liel clauses. These agreements, entitled Land Use Reimbursement and
Advance Funding Agreement Between East Garrison Partners I, LLC and Monterey County for
Extraordinary Development Costs for East Garrison Project Horizontal Development" and
Project Reimbursement Agreement for East Garrison Project, Fort Ord. County of Monterey
Horizontal Development]" are not affected by this Advance Funding Agreement. but have been
assigned to Lender/Succeeding Owner.
7. Term.
This Agreement shall be effective from the Effective Date of this Agreement through
June 30. 2011, unless extended by mutual consent of the Parties.
8. Termination.
Either Party may terminate this Agreement before the expiration of the Tenn by
providing not less than five 5) business days' notice, in order to minimize the incurring of
additional costs. In the event of termination under this Section 8, Agency/County shall be
entitled to charge all costs incurred up to the effective date of termination, subject to Section
4.02, and Lender/Succeeding Owner shall not request refund of any funds remaining in the
deposit for a period of 90 days, so as to allow the invoicing and payment of all outstanding
charges due under this Agreement, as well as pay for any work performed by outside consultants
through the effective date of termination. In the event of termination by Lender/Succeeding
Owner, the County and Agency are released of any obligations created by this Agreement.
Indemnification.
The Lender/Succeeding Owner shall defend, indemnify, and hold harmless the County
and Agency from and against any and all claims, liabilities, or losses in any action brought by
any third party challenging the validity of this Agreement or the authority of the County or
Agency to enter into this Agreement. This indemnification shall survive termination of this
Agreement.
10. Assignment.
The LenderlSucceeding Owner shall not assign. sell, mortgage. hypothecate or otherwise
transfer its obligations under this Agreement except as part of a financial transaction or transfer
to a transferee or assignee as permitted under or as otherwise approved in writing by the County
and Agency. This Agreement and the rights, privileges, duties, and obligations of the Parties
hereunder shall be binding upon and inure to the benefit of the parties hereto and their respective,
successors and permitted assigns.
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SIGNED FUNDING AGREEMENT�|E���11. Amendment.
This Agreement may be amended or modified only by an instrument in writing signed by
all the Parties hereto.
12. Authority to Implement this Agreement.
The Director of Housing and Redevelopment shall have the authority to implement this
Agreement on behalf of the County and Agency. and to enter into such clarifying and/or
administrative memoranda or other documentation as he or she deems appropriate to carry out its
purpose and intent, provided that any change to a material term of this Agreement shall require
approval of both the Board of Supervisors of the County of Monterey and the Board of Directors
of the Redevelopment Agency of the County of Monterey. Lender/Succeeding Owner represents
and warrants that any individual executing or amending this Agreement on behalf of the
Lender/Succeeding Owner has been authorized by Lender/Succeeding Owner to enter into and
implement this Agreement on behalf of the Lender/Succeeding Owner and to bind the
Lender/Succeeding Owner to the terms and conditions of the same.
13. Waiver.
With the exception of the time to dispute any Billing Notice, as set forth in Section 4.02,
the failure of a Party hereto at any time or times to require performance of any provision hereof
shall in no manner affect its right at a later time to enforce the same. No waiver by a Party of
any condition or of any breach of any term contained in this Agreement shall be effective unless
in writing and signed by the Parties hereto, and no waiver in any one or more instances shall be
deemed to be a further or continuing waiver of any such condition or breach in any other
instance or a waiver of any other condition or breach of any other term.
14. Governing Law.
This Agreement shall be construed, interpreted and governed by the laws of the State of
California, without regard to conflicts of law principles.
15. Negotiated Agreement.
The Parties acknowledge that each Party has reviewed and revised this Agreement and
that the normal rule of construction to the effect that any ambiguities are to be resolved against
the drafting Party shall not be employed in the interpretation of the Agreement.
16. Relationship of Parties.
This Agreement establishes only a funding and reimbursement arrangement between the
Parties, and nothing in this Agreement establishes a partnership or joint venture among the
Parties.
IT Notices.
Notice to the Parties in connection with this Project Reimbursement Agreement shall be
given personally. by first class, certified, or registered mail, or by an express mail delivery
12121 1201 0 Page 6
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SIGNED FUNDING AGREEMENT�|E���service addressed as follows except as any Party may otherwise direct in writing to the other
Parties):
10 COUNTY AND AGENCY: Director of Housing and Redevelopment
County of Monterey
168 West Alisal, Third Floor
Salinas, CA 93901
TO LENDER/SUCCEEDING OWNER: Union Community Partners
James W. Fletcher. Vice-President
6489 Camden Avenue, Suite 204
San Jose, CA. 9% 120
Notice shall be deemed effective at the time of personal delivery, five days after the notice is
deposited in the United States registered or certified mail, properly addressed, with postage
prepaid, or on the day of delivery if notice is sent by express mail delivery service.
18. Entire Agreement.
This Agreement constitutes the entire agreement between Lender/Succeeding Owner, Agency
and County respecting the advancement and reimbursement of funds for Negotiation Services
and shall supersede all prior negotiations, representations or agreements, either written or oral.
among the Parties with respect to this issue. County, Agency and Lender/Succeeding Owner
each represent that neither has relied on any promise, inducement, representation, or other
statement made in connection with this Agreement that is not expressly contained herein.
IN WITNESS WHEREOF, the County. Agency and Lender/Succeeding Owner have executed
this advance funding Agreement as of the day and year written below.
COUNTY:
Date: f
APPROVED AS TO FORM:
Kav Reirfiann
Deputy County Counsel
Date: j / 6
AND-
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SIGNED FUNDING AGREEMENT�|E���AGENCY:
Date:
APPROVED AS TO FORM:
Kay Rein(ann
Deputy County Counsel
Date: 02 U
AND-
Date: 6fx L 22z-tip
COU')}TY OF M,QNITEY
REDEVELOPMENT AGENCY OF THE
LENDER/SUCCEEDING OWNER:
UCP East Garrison. LLC, a Delaware Limited
Liability Company
BY: IJCP, LLC, a Delaware Limited Liability
Company, its sole member
Dustin L. Bogue, President
112 C Page 8
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REVISED BOARD ORDER"�|E�r�51
Before the Board of Supervisors in and for the
County of Monterey, State of California
Agreement No.: A-11913
Approve an Advanced Funding Agreement
with Union Community Partners for the
Negotiation of Modifications to the East
Garrison Development Agreement in the Fort
Ord Redevelopment Area.
Upon motion of Supervisor Armenta, seconded by Supervisor Potter, and carried by those
members present, the Board of Supervisors hereby:
Approved an Advanced Funding Agreement with Union Community Partners for the
negotiation of modifications to the East Garrison Development Agreement in the Fort
PASSED AND ADOPTED this 11th day of January 2011, by the following vote, to wit:
AYES: Supervisors Armenta, Calcagno, Parker, Potter
NOES: None
ABSENT: Supervisor Salinas
I, Gail T. Borkowski, Clerk of the Board of Supervisors of the County of Monterey, State of California,
hereby certify that the foregoing is a true copy of an original order of said Board of Supervisors duly made
and entered in the minutes thereof of Minute Book 75 for the meeting on January 11, 2011.
Dated: January 18, 2011 Gail T. Borkowski, Clerk of the Board of Supervisors
Revised: February 7, 2011 County of Monterey, State of California
By Deputy
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