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HomeMy WebLinkAboutContracts & Agreements_07-2024REIMBURSEMENT AGREEMENT This Reimbursement Agreement ("Agreement") dated January 16, 2024 for reference purposes only, is made by and between THE CITY OF REDLANDS, a California municipal corporation and general law city ("Redlands"), and PROPERTY ONE, LLC, a California limited liability company ("Property One") who agree as follows. 1. Background A. Redlands presently leases that certain building located at 300 E. State Street, . Redlands, California (the "State Street Building") to Citibank, N.A. ("Citi"). B. Redlands intends to use and redevelop the State Street Building for Redlands' City Hall and as a result, Redlands and Citi have mutually agreed to a termination of the lease between Redlands and Citi pursuant to which Citi will vacate the State Street Building pursuant to that certain Termination Agreement dated January 16, 2024 ("Termination Agreement") and relocate to the Orange Street Property (defined below). C. In connection with Citi's relocation, Property One has agreed to lease to Citi that certain building located at 333 Orange Street, Redlands, California (the "Orange Street Property") pursuant to the terms of that certain Lease dated 2023 (the "Orange Street Lease"). D. In consideration of Citi's relocation to the Orange Street Property, Redlands has agreed to pay a maximum reimbursement amount of $1,100,000.00 (the "Reimbursement Funds") for the tenant improvement work to be completed by Property One at the Orange Street Property to be performed in accordance with the terms of the Orange Street Lease. E. Redlands is agreeing to pay the Reimbursement Funds provided for herein for the public benefits derived from use of the State Street Building as the City of Redlands City Hall, hi its approval of this Agreement, Redlands finds and determines that the location and purchase of new property for use as Redlands' City Hall would be impractical and result in greater cost and delay than use of the existing State Street Building. F. The parties desire to execute this Agreement to set forth the terms and conditions of the disbursement of the Reimbursement Funds to Property One. 2. Disbursement of Reimbursement Funds. Payments under this Agreement shall be disbursed subject to the following conditions and procedures: 2.1 Conditions to Disbursement. Redlands and Property One agree that the Reimbursement Funds will be disbursed in three (3) installments, to be paid by Redlands to Property One within thirty (30) days after Redlands receives written notice that each of the following conditions, as applicable, have been satisfied. Redlands shall not be obligated to disburse any of the Reimbursement proceeds unless and until all of the conditions are met with respect to each such disbursement: 1:\cmo\Agr=nents\Property One, LLC Reimbursement Agmn cent FY23-0004.doex-ms a) with respect to the first installment of $550,000, upon Property One having completed fifty percent (50%) of Landlord's Work (as defined in the Orange Street Lease) as certified by Landlord's general contractor or architect; b) with respect to the second installment of $225,000, upon substantial completion of the Landlord's Work (for the purposes of this Agreement, substantial completion shall mean when a temporary certificate of occupancy has been issued for Landlord's Work at the Orange Street Property); and c) with respect to the third installment of $225,000, upon the occurrence of the Rent Commencement Date or the surrender by Citi of the State Street Building, whichever occurs first (as defined in the Orange Street Lease). 3. Governing Law. This Agreement shall be governed by the laws of the State of California. The exclusive venue for any action arising from this Agreement shall be in the Superior Court of the County of San Bernardino. 4. Remedies Upon Default. An event of default shall be deemed to exist upon the occurrence of all three of the following: a) either Redlands or Property One has, without legal justification or excuse, breached any one or more of its obligations under this Agreement; and b) the non -defaulting party has sent written notice to the party claimed to be in default, specifying the default and what actions the non -defaulting party asserts should be taken to remedy the default; and c) the party claimed to be in default has not, within ten (10) days following receipt of the written notice described above, either corrected the default or taken actions, reasonable satisfactory to the non -defaulting party, to remedy the default within a reasonable period of time, but in no event longer than thirty (30) days after receipt of the written notice described above. Following an event of default, the non -defaulting party may exercise any and all remedies available to it at law or in equity, including, without limitation, instituting an action for damages, injunctive relief, or specific performance. 5. Legal Challenges; Indemnification. Redlands represents and warrants to the best of its knowledge to Property One that (i) it has the full power and authority to execute and deliver this Agreement, and to perform and carry out all covenants and obligations to be performed and carried out by Redlands hereunder, and (ii) execution of this Agreement and all documents executed pursuant to this Agreement, and performance by Redlands of its obligations hereunder, will not breach or violate any other agreement, court order or other arrangement by which Redlands is bound. In the event of any third -party claims and/or suits arising out of Redland's payment of the Reimbursement Funds to Property One under this Agreement, Redlands will indemnify, defend and hold harmless Property One from and against any order, award, judgment, cause of action, claim or other actions arising out of this Agreement, including without limitation, any claims 2 C\cmo\AgreememsTroperty One, LLC Reimbursement Agreement FY23-0004.docx-ms related to City's use of public finds in entering into and performing under this Agreement. Property One acknowledges that Redlands is not a party to the Orange Street Lease. Redlands shall not be bound by any terms, conditions, or provisions of the Orange Street Lease, and it shall not be responsible for any obligations, duties, or liabilities arising from the Orange Street Lease. Property One will indemnify, defend and hold harmless the City, its officials, officers, employees and agents harmless for, from, and against any third -party claims and/or suits arising out of Property One's breach of the Orange Street Lease. 6. Notices. All notices, demands, designations, certificates, requests, offers, consents, approvals, appointments and other instruments given pursuant to this Agreement shall be in writing, addressed as set forth below, shall be given by (a) hand delivery; (b) express overnight delivery service; (c) certified or registered mail, return receipt requested; or (d) electronic mail message, and shall be deemed to have been delivered upon (i) receipt, if hand delivered; (ii) the next business day, if delivered by a reputable express overnight delivery service; (iii) the third business day following the day of deposit of such notice with the United States Postal Service, if sent by certified or registered mail, return receipt requested; or (iv) transmission, if sent by electronic mail message. If to Redlands: City of Redlands P.O. Box 3005 Redlands, California 92373 Attn,: Chris Boatman cboatmanAcityofredlands.org With a Copy to: Best Best & Krieger LLP 2855 E. Guasti Road, Suite 400 Ontario, CA 91761 Attn: Jessica Lomakin, Esq. j essica. lomakingbbklaw . com If to Property One: Property One, LLC P.O. Box 7539 Redlands, California 92375 Attn.: Finance and Accounting 7. Amendments. This Agreement contains all the terms and conditions agreed upon by the parties hereto with respect to the transaction contemplated hereby, and shall not be amended or modified except by written instrument signed by all the parties. 8. Time. Time is of the essence of every provision contained in this Agreement. Whenever the time for performance or doing of act hereunder falls on a Saturday, Sunday or legal holiday, such time shall be deemed executed to the next successive business day. 9. Counterparts. This Agreement may be executed in counterparts, all of which together shall constitute an agreement binding on all the parties hereto, notwithstanding that all LNcmo\Agreements\Property One, LLC Reimbursement Agreement FY23-0004.docx-ms such parties are not signatories to the original or the same counterpart. Facsimile or scanned signatures to this Agreement shall be valid and binding. Capitalized terms used but not defined in this Agreement have the meanings given in the Company's operating agreement, as amended from time -to -time. 10. Term. This Agreement shall expire upon full payment of the Reimbursement Funds, unless earlier terminated; provided however, that the provisions contained in Section 5 herein shall survive termination of the Agreement and continue to govern the parties. Property One waives any right to further compensation or reimbursement arising out of Citibank's relocation except as contained in this Agreement. 11. Attorneys' Fees. In the event any action is commenced to enforce or interpret any term or condition of this Agreement, in addition to costs and any other relief, the prevailing party shall be entitled to its reasonable attorneys' fees, expert fees and other reasonable costs of defense. 12. Waiver. No provision, requirement, default or breach of this Agreement shall be deemed waived by either party except in writing. 13. No Joint Venture. Neither this Agreement, nor any obligation under this Agreement shall constitute a joint venture between Redlands and Property One. 14. Enforceability. If any provision of this Agreement is held to be unenforceable by a court of law, it shall be deemed to be unenforceable only with regard to the party and circumstance, and this Agreement shall remain in full force and effect in all other regards. 15. No Third Party Rights. Except as expressly stated in this Agreement, nothing in this Agreement shall create or shall give to third parties, including Citibank, any claim or right of action against Redlands or Property One. 16. Confidentiality. Redlands and Property One agree to keep the terms of this Agreement confidential and not make any public announcements or disclosures with respect to the subject matter hereof without the prior written consent of the other party; provided, however, the Parties shall be permitted to make any disclosure required by law (including, without limitation, pursuant to California's public records laws and retention requirements), and to its employees, attorneys, accountants or its agents, to the extent reasonably necessary for such employees, attorneys, accountants, or agents to properly analyze and evaluate the proposed transaction and for such employees, attorneys, accountants and agents to advise the parties. The provisions of this Section shall survive the expiration or earlier termination of this Agreement. 17. Modification of Agreement. This Agreement and all documents and agreements referenced herein constitute the entire Agreement between the parties and incorporate all prior understandings in connection with the subject matter of this Agreement. 18. Exculpated Parties. Notwithstanding anything to the contrary contained in this Agreement, none of the shareholders, directors, officers, trustees, members, managers, partners, employees, or agents of Property One, Redlands, or their constituent parties nor any other person, partnership, corporation, company, or trust, as principal of Property One, whether disclosed or undisclosed (collectively, the "Exculpated Parties") shall have any personal obligation or liability 4 I:\cmo\Agreements\Property One, LLC Rennbumement Agreement FY23-0004.doex-ms hereunder, and neither Property One nor Redlands shall seek to assert any claim or enforce any of its rights hereunder against any Exculpated Parry. The provisions of this Section shall survive the expiration or earlier termination of this Agreement. The parties hereto have entered into this Agreement as of the date last stated below. u1! ' ! :DS al Mayor Dated: i ^ I L - 2 ATTEST: e Donaldson, City Clerk APPROVED AS TO FORM: r Best/Best & Krieger LLP Jessica K. Lomakin Special Counsel TENANT: PROPERTY ONE LLC a California limited liability companX By: Judson & Brown, LLC, a Nevada limited liability company, its manager By: Lance Lenhert, its manager Dated: I:Icmo\Agreements\Property One, LLC Reimbursement Agreement FY23-0004.docx-ms hereunder, and neither Property One nor Redlands shall seek to assert any claim or enforce any of its rights hereunder against any Exculpated Party. The provisions of this Section shall survive the expiration or earlier termination of this Agreement. The parties hereto have entered into this Agreement as of the date last stated below. LANDLORD: CITY OF REDLANDS, a municipal corporation Eddie Tejeda Mayor ATTEST: TENANT: PROPERTY ONE, LLC, a California limited liability comnanv BY: Judson & Brown, LLC, a Nevada limited liabilily com My, its manager BY: Lance Lenhert, its manager 01/04/2024 Jeanne Donaldson, City Clerk APPROVED AS TO FORM: Best Best & Krieger LLP Jessica K. Lomakin Special Counsel 5 Idcmo\Agreements\PropciIy One, LLC Reimbursement Agrcement FY23-0004.doex-ms