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HomeMy WebLinkAboutNB 12 TUSTIN AUTO CTR 03-06-89TO: FROM: . SUBJECT: HONORABLE MAYOR AND CITY COUNCIL WILLIAM A. HUSTON, CITY MANAGER ~GI:tEEHENTBE~ENTHEIRVINECOMP~iY~DTHE CITY OF TUSTIN PERTAINING TO TUSTIN ~UTO CENTER, PUBLIC IMPROVEI~NTS RECOMMENDATION'. That the City Council authorize the Mayor to execute the agreement, authorize the City Attorney and City Manager to approve the final form of the exhibits to the agreement and appropriate $558,000 from the General Fund reserve for construction of the public improvements. BACKGROUND' · The City, Mr. David Wilson (owner of Toyota of Orange and franchisee for the Lexus automobile) and the Irvine Company have been discussing for several months the feasibility of filling the E1 Modena channel retarding basin located between the Tustin Auto Center and Tustin Market.Place. By filling the retarding basin, two additional lots for auto dealers would be created. Mr. Wilson has been awarded a Lexus franchise (the luxury car produced by Toyota) and must open his facility by August, 1989. DISCUSSION: The attached agreement provides that the Irvine Company will create and sell. two parcels for auto dealers. Due to economic feasibility considerations,.the City agrees to install various flood control improvements within the Auto Center and the extend Auto Center Drive to the newly created lots. By filling the retarding basin, it will be necessary to install new and extend existing flo6d control facilities which drain into the E1 Modena Channel. These improvements can be completed by the City prior to August, 1989. It will be necessary to improve the E1 Modena Channel between Michelle Drive and the I-5 freeway at a later date. Through the agreement, the I~;ine Company will contribute $100,00.0 to the City for flood control and street extension projects. Mr. Wilson will be responsible for any flood control improvements situated on the lots. TUSTIN AUTO CENTER March 1, 1989 Page 2 The improvements to the E1 Modena Channel (between Michelle Drive and the I-5 freeway) are estimated to cost 1.35 million dollars and would be completed in approximately two years. The City will- attempt to obtain '50% funding from the County Flood Control District. It is anticipated that it will take one year to complete design studies and obtain permits for these improvements. Funds for this project would be appropriated when the design is completed and permits are obtained. The City is assuming financial obligation of approximately 1.9 million dollars through the agreement. The flood control improvements to be constructed by the City are public improvements and benefit the Auto Center and immediate vicinity. In return for the City's expenditure of 1.9 million dollars, the two additional car dealers will generate a minimum of $500,000 per year in sales tax to the City. Sales tax revenue collected from the dealers in future years will finance City services provided to the Tustin Ranch project and future capital improvements projects such as the new parks in Tustin Ranch. Mr. Wilson is ready to commence grading of the retarding basin and begin construction of the Lexus facility next month. AGREEMENT B~TwEEN THE IRVINE COMPANY AND THE CITY OF TUSTIN PERTAINING TO TUSTIN AUTO CENTER PUBLIC IMPROVEMENTS This Agreement is made and entered into as of the day of , 1989, by and between The Irv~'ne C6mPany, a Michigan corporation (the "Company") and the City of Tustin, a municipal corporation organized and existing under the laws of the .State of' California (the "City"). RECITALS A. The Company has caused the development for retail automobile sales uses of that certain property located in the' City commonly known as the Tustin Auto Center. B. The City wishes to encourage the development of the Tustin Auto Center with such uses to generate increased sales and property tax revenue and to promote other valid public purposes of the City. C. City is cooperating with the Company in connection with the sale and development of certain real property comprised of two parcels for the operation of car deale~ships in the Tustin Auto Center known as Lots 21 and 22 of ,Tract NO. 13274 (the "Retention Basin Lots" ). D. The Retention Basin Lots currently serve in part as a storm water retention basin, and the plan of development for said lots will require substantial grading and fill improvements. E. The improvement of the Retention Basin Lots will necessitate downstream improvements to that certain storm water retention channel known as the "El Modena Channel" which will be designed to improve the performance of the channel. These improvements are known as the '"Channel Improvements" and are described in more detail on Exhibit "A" attached hereto. In improvements will be necessary within the Tustin Auto'Center pending completion of the Channel Improvements and certain other permanent in-tract improvements will be required. These latter improvements are described herein as the "In-tract Improvements" and are described in more detail in Exhibit "B' attached hereto. F. The Company is prepared to sell the Retention Basin Lots to individuals or entities to operate car dealerships thereon and to pay to the City $100,000 for certain of the in- tract improvements, and the City is prepared to assume the remaining burden, financial and otherwise, of performing the Channel Improvements and certain portions of the In-tract Improvements, each as described in Exhibits "A" and "B" attached hereto. Only certain portions of the In-tract improvements will be the responsibi: Of the City and the ,ance will be the responsibility of %n~ ~yer(s) of Lots 21 an~ 22. The division of such responsibilitavd is described on E~h£bit "B". G. The City's commitment to be responsible for a portion of the In-tract Improvements is a condition of escrow for the sale of the ~etention Basin Lots, and completion of these improvements within a reasonable t~m~ may .be. important to the .timely development of other projects 'of the Company currently in process or contemplated. -NOW, THEREFORE, in consideration of the mutual covenants hereinafter contained the parties agree as follows: 1. Sale o~ Retention Basin Lots. The Company shall proceed to use reasonable efforts to consummate the sale of the Retention Basin Lots to individuals or entities for use as automobile dealerships in accordance with that certain escrow identified ~n Exhibit "C" attached hereto, as expedit±ously as possible. On or before the date of close of such escrow, City shall quitclaim to the Company certain portions of that certain easement in favor of the City for storm water retention, drainage and incidental purposes encumbering the Retention Basin Lots, such quitclaim to be in the form attached hereto as Exhibit "D". m2. .Channel .I. mprovements. To provide safe and appropriate stor water-'drain~ge for the. Tustin Auto Center and related areas, the City shall complete those portions of the In-tract Improvements as described in Exhibit "B" hereto and the Channel Improvements, described 'on Exhibit "A" hereto, without cost or expense to the Company or the purchaser of Lot 2 (excluding only the Company contribution described in Section 3 .below). In this connection, the C~ty agrees as follows: (a) Funds to pay the full estimated cost of the Channel Improvements and those portions of In-tract Improvements which are to be City's responsibility as prescribed herein will be appropriated at such time as determined appropriate by the City Council in the reasonable exercise of its discretion. (b) City shall cause the Channel Improvements to be designed and constructed by City in accordance with all applicable government regulations at such time as the City Council determines it is appropriate to do so in the reasonable exercise of its discretion. (c) The In-tract Improvements shall be designed and constructed in accordance with the schedule developed pursuant to the land use approval process for the Retention Basin Lots. ( d ) City assumes the ful'/ obligation and responsibility for obtaining all property rights, permits and other entitlements required in connection with the construction, acquisition and maintenance of the channel improvements and those in-tract improvements described as City responsibility in Exhibit Company shall dedioa! itc the appropriate ~t~t~ an~ property rights of the Company"ur any su'bsidiar~ or re~a~ea entity of the Company which are required for purposes of implementing the Channel Improvements so long'as the extent of property required for such purpose is not in excess of that shown on the mad attached hereto as Exhibit "D" within the "Trapezoidal Channel Alternative", and provided further that the City exercise its bas= efforts to cause, the dedicated' area 'to be limited to the "Rectangular SeCtion". preferred alternative shown o~ s&~d map. At no time will the City seek reimbursement from the Company for any portion of the costs of the Channel Improvements- a~d the In- tract Improvements, directly or indirectly, in any relationship between the Company and the. City, or in connection with the processing of any other pro]eot of the Company, whether related to the Tustin Auto Center or not. (e) The City will indemnify, defend and hold harmless the Company, its officers, agents, employees and consultants from and against any and all claims, damages, losses, expenses ad other costs, including attorneys fees, arising out of or resul~ing from or in connection w~th the construction o~ the Channel Improvements or In-tract Improvements which are City's respons~bilities as described in Exhibit "B". 3. In-tract Improvements. As additional consideration to the City to undertake the responsibilities prescribed herein, the Company will pay 9100,000 to the City upon the close of escrow of the Retention Basin Lots to defray, in part, the cost of the tract Improvemen~ known as the Auto Center Drive terminus storm -dra~n extension. 4. Company shall cause such conveyances and dedications of interests In Parcels I and 2 to Cit~ as shall be necessary for construction and maintenance of the improvements to be constructed pursuant to this agreement. 5. ~epresentation and Warranties. The City and the Company each represent and warrant to-~e ~ther that it has full legal right, power and authority to enter into this Agreement' (and as to the City, to undertake to make those portions of the In-tract Improvements which are its responsibility as described in Exhibit'"B#) and to perform, its obligations hereunder, that this Agreement has been duly authorized, executed and delivered by it to the other and ~hat this Agreement is its lawful, binding obligation, enforceable in accordance with its-terms, subject to applica~le bankruptcy, insolvency, reorganization, moratorium and other similar laws affecting the rights of creditors generally and by principles of equity if equitable remedies .are sought. 6. Time of Essence. In construing this Agreement and each and every ~rovision the=eof, time is of the essence. 7. Entire A~reement. This Agreement contains the entire agreement between the parties with respect to the matters provided for herein ~, may be amended only t, ~ubsequent written agreement signed on b~_j.lf of both parties. 8. Zxhlbits. All exhibits attached'hereto are incorporated into this Agreement by reference. 9. Severabil~ty; If any provision of this Agreement shall '' be ~nvali~, ~inoperative or unenforceable as appl£ed in any particular case in any Jurisdiction or ~urisdiCtions or in all- Jurisdictions, or in all cases because it conflicts with any other provision or provisions her,.of or any constitution or statute or rule of public policy, or for any other reason, such circumstances' shall not have the effect of rendering the provision in question inoperative or unenforceable in any other case or c~rcumstance, or of rendering any other provision or provisions herein contained invalid, inoperative, or unenforceable to any extent whatever. The Invalidity of any one or more phrases, sentences, clauses or Sections contained in this Agreement shall not affect the remaining portions of this Agreement, or any part hereof. 10. Attorneys Fees. In the event of any litigation between the parties concerning this Agreement, the prevail~ng party shall be entitled to an award of reasonable attorneys fees, and expenses of litigation whether or not such litigation results ~n a Judgment. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first above written. o CITY OF TUSTIN ATTEST: BY: Mayor Cit~ ~lerk APPROVED AS TO FORM: City Attorney THE IRVINE COMPANY, .a Michigan corporation BY: Its: BY: Its: EXHIBIT A CHANNEL IMPROVEMENTS EXHIBIT B IN-TRACT IMPROVEMENTS ~ Responsibilities 2000 feet 'of storm drain facilities from the terminds of Auto Cen~er Drive to the E1 Modena Channel (map attached). .Developer,' s Responsib. ilities EXHIBIT C RETENTION BASIN LOTS ESCROW F~rst American T2tle Insurance Company Escrow No. 151-2601 EXHIBIT D FORM OF QUITCLAIM JGR:rr:R: 2/28/89(580f)