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HomeMy WebLinkAbout10 COST SHARING AGMT W/NB 10-16-06AGENDA REPORT Agenda Item Reviewed: City Manager Finance Director MEETING DATE: OCTOBER 16, 2006 TO: WILLIAM A. HUSTON, CITY MANAGER FROM: CITY ATTORNEY SUBJECT: COST SHARING AGREEMENT WITH CITY OF NEWPORT BEACH FOR LEGAL SERVICES ASSOCIATED WITH ENVIRONMENTAL CHALLENGES OF DEVELOPMENT PROJECTS IN THE IRVINE BUSINESS COMPLEX SUMMARY The City Attorney is recommending that the City Council approve a cost sharing agreement with the City of Newport Beach for joint legal representation of Tustin and Newport Beach regarding potential challenges to the City of Irvine's approval of the 2323 Main and Avalon Bay projects in Irvine's Industrial Business Complex. RECOMMENDATION It is recommended the City Council authorize the City Manager to execute a cost sharing agreement with the City of Newport Beach to share the litigation and advisory costs of the firm of Remy, Thomas, Moose & Manley in conjunction with challenges that Tustin and Newport Beach have regarding City of Irvine approvals of development projects in the Industrial Business Complex. FISCAL IMPACT It is estimated that the City of Tustin's share will be $100,000.00 during this Fiscal Year. DISCUSSION The Cities of Tustin and Newport Beach over the last several months have voiced concerns regarding the adequacy of the environmental studies and failure of the City of Irvine to adequately identify and discuss potential impacts of several residential projects currently under development or proposed for the Industrial Business Complex. Newport Beach has entered into an agreement with the law firm of Remy, Thomas, Moose & Manley to represent Newport Beach on these matters. The interests of the City of Tustin are substantially identical to those of the City of Newport Beach and instead of retaining separate counsel to represent the City of Tustin, the City Attorney is recommending that the City Council enter into an agreement with Newport Beach to share the costs of the 5]4267.] Remy law firm on a 50-50 basis. A copy of the cost sharing agreement is attached to this report. This Office will reiterate that the fundamental goals of the Cities of Tustin and Newport Beach is to obtain updated, complete, and accurate studies that encompass all existing, proposed, and reasonably foreseeable impacts associated with the ongoing transformation of the Industrial Business Complex into a mixed use community. The Tustin City Council recognizes that the basic policy issues regarding this transformation and the wisdom of doing so is solely within the jurisdiction of the Irvine City Council. The Tustin City Council, however, wishes to ensure that the environmental impacts of the transformation are identified and mitigated, particularly those that cross jurisdictional lines and affect the City of Tustin. The impacts of significant concern include traffic, recreation, and public services. Both the Cities of Tustin and Newport Beach are particularly concerned about extra-territorial traffic impacts in light of the City of Irvine's practice of shifting trip-generation allocations around the Industrial Business Complex without providing an accounting of the overall effects of such shifts. Two projects recently approved by the Irvine City Council, 2323 Main and Avalon Bay, are subject to tolling agreements entered into between Tustin, Newport Beach, and Irvine that extended the statute of limitation for filing actions against the City of Irvine. Douglas Holland City Attorney 514267.1 COST SHARING AGREEMENT This agreement sets forth the terms under which the Cities of Newport Beach and Tustin agree to share certain costs associated with potential challenges to projects approved by the City of Irvine. Newport Beach and Tustin are referred to collectively as the "parties" and singularly as the "party." The effective date of this agreement is the date the agreement is signed by the parties. If the parties sign the agreement on different dates, then the latter date is the effective date. RECITALS A. Newport Beach and Tustin have each submitted comments concerning the environmental review and planning processes for two projects recently approved by Irvine. generally referred to as "2323 Main" and "Avalon Bay" (the "projects"). The projects are located within the City of Irvine planning area #36 also known as the Irvine Business Complex ("IBC") B. On July 25, 2006, Irvine approved the projects. C. On August 24, 2006, Irvine, Newport Beach, Tustin and the applicants for each of these projects entered into tolling agreements. Under these tolling agreements, Irvine and the applicants agreed to toll the statute of limitations applicable to legal challenges of Irvine's approval of the projects. The tolling agreements expire on October 13, 2006. Newport Beach and Tustin agreed not to file petitions for a writ of mandate challenging Irvine's approval of the projects on or before October 7, 2006. The parties to the tolling agreements agreed to attempt to address and resolve Newport Beach's and Tustin's expressed environmental concerns regarding the projects during the tolling period. D. Newport Beach has retained Remy, Thomas, Moose & Manley LLP ("Remy Thomas") effective June 1, 2006 to represent Newport Beach in connection with the projects, including representing Newport .Beach in litigation ch~lIenging Irvine's approval of the projects. E. Newport Beach and Tustin share overlapping interests with respect to the projects. In particular, Newport Beach and Tustin are concerned that the projects may result in extra-territorial impacts affecting those who live or work in their cities. Newport Beach and Tustin desire that Irvine undertake an adequate analysis of these impacts, and identify and adopt adequate mitigation to address these impacts. These impacts include traffic, parks/recreation, emergency services, and land-use compatibility. F. If, during the tolling period, Newport Beach and Tustin are unable to reach an agreement with Irvine regarding these issues, then Newport Beach and Tustin intend to file legal challenges to Irvine's approval of the projects. G. Newport Beach and Tustin desire to enter into an agreement to share attorneys' fees and costs in connection with both legal challenges to the projects and making a record for legal chal"lenges to future development projects in the IBC that are processed without adequate environmental review. Such a cost-sharing agreement will increase efficiency, reduce overlapping efforts, and help reduce legal costs. AGREEMENT The parties hereby agree: 1. The above recitals are true and are hereby incorporated by reference. 2. Remy Thomas currently bills Newport Beach for its services in this matter. Newport Beach shall direct Remy Thomas to send duplicate invoices covering its services to Tustin. 3. Newport Beach shall be responsible for paying each invoice issued by Remy Thomas. Tustin agrees to reimburse Newport Beach payable in the amount of 500/0 of the total amount owing for each invoice issued by Remy Thomas. The agreement to share fees and costs according to these percentages shall apply to all Remy Thomas invoices issued on or after June 1, 2006. 4. Nothing in this agreement shall constitute a waiver of the parties' right to contest the amounts billed by Remy Thomas. Each party shall be responsible for contacting the other party and Remy Thomas in the event that party wishes to contest an invoice. 5. The parties intend that, in the event of litigation, they shall be jointly represented by Remy Thomas. The parties shall consult with one another regarding litigation strategy, with an aim of providing consistent advice and direction to Remy Thomas. Each party, however, retains the independent ability to reach agreement with Irvine to settle the litigation according to whatever terms the party deems appropriate. In that event, the settling party shall thereafter cease to be responsible for paying 2 invoices to Remy Thomas for fees or costs billed after the date that party settled with Irvine. 6. The parties shall be jointly represented by Remy Thomas in the litigation and other acts necessary to represent the parties interests set forth in this agreement. As such, the "attorney-client privilege" and "attorney work product" privileges shall apply to both parties, notwithstanding the disclosure of information to, by and between Newport Beach, Tustin and Remy Thomas in this matter. The parties shall treat all such communications as privileged. As such, each party shall keep all such communications in confidence, and shall not disclose such communications under the California Public Record Act, without the prior written consent of the other party. This obligation shall continue to apply, even if the party has settled the litigation with Irvine. 7. Each party understands, and hereby waives, any conflict of interest that may arise with respect to Remy Thomas' representation of the other party in this matter. This waiver shall extend only to the parties' challenges to Irvine's approval of the projects. 8. This Cost Sharing Agreement may not be altered or modified except in writing by a document signed by all the Parties. 9. This Agreement shall be governed by and construed according to the laws of the State of California with venue in Orange County. 10. The parties do not intend to create any third party beneficiaries to this Agreement. 11. The individuals signing this Agreement on behalf of each Party represent and warrant that they have full authority and are duly authorized to do so on behalf of the Party they represent. 12. The invalidity of any portion of this Agreement shall not invalidate the remainder. If any term, provision, covenant or condition of this Agreement is held by a . court of competent jurisdiction to be invalid,. void or unenforceable, the Parties shall amend this Agreement and/or take other action necessary to achieve the intent of this Agreement in a manner consistent with the ruling of the court. 13. The Parties acknowledge that each Party and its counsel have reviewed and revised this Agreement and that no rule of construction to the effect that any ambiguities are to be resolved against the drafting Party shall be employed in the 3 interpretation of this Agreement. 14. This Agreement may be executed in counterparts. The counterparts shall together comprise a single Agreement. Dated: September _,2006 CITY OF NEWPORT BEACH Name: Homer Bludau Title: City Manager APPROVED AS TO FORM: Robin L. Clauson, City Attorney ATTEST: LaVonne Harkless City Clerk Dated: September _,2006 CITY OF TUSTIN Name: Title: APPROVED AS TO FORM: Doug Holland, City Attorney ACKNOWLEDGE AND AGREED: REMY, THOMAS, MOOSE & MANLEY Name: Title: 4