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Home My Public Portal About20-023 - Approving the Purchase of Environmental Insurance for the New City Yard PropertyRESOLUTION NO. 20-023 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF CARSON, CALIFORNIA, APPROVING THE PURCHASE OF ENVIRONMENTAL INSURANCE FOR THE NEW CITY YARD PROPERTY LOCATED AT 18620 SOUTH BROADWAY & 18601 SOUTH MAIN STREET IN THE CITY OF CARSON WHEREAS, the City of Carson ("City") has owned and operated that certain real property located at located at 2390/2400 E. Dominguez St. (APN 7316-026-900) ("City Property") as its City Yard for over 40 years; and WHEREAS, Prologis Targeted U.S. Logistics Fund, LP ("Prologis") owns that certain real property located at 18620 South Broadway & 18601 South Main Street, in the City of Carson (APN 7339-013-024) ("Prologis Property"); and WHEREAS, the City and Prologis agreed to exchange the Prologis Property for the City Property upon certain terms and conditions as set forth in an "Exchange Agreement under Threat of Condemnation and Joint Escrow Instructions" ("Exchange Agreement"), which was approved by the City Council during its June 18, 2019 Council meeting; and WHEREAS, both the City Property and Prologis Property were appraised, with the appraisals determining that the fair market value of the City Property is $25,824,000 and the fair market value of the Prologis Property is $15,624,000, with the net difference being $10,200,000, which will be due to City, subject to offset for a split of the costs of construction of improvements to the Prologis Property as discussed below; and WHEREAS, the City's primary objective in pursuing the Exchange Agreement is to acquire the Prologis Property for City's future use as its new Corporate Yard, once Prologis completes certain improvements to existing building(s) on the Prologis Property as required pursuant to the Exchange Agreement (the "Improvements"); and WHEREAS, the transaction is currently in Escrow, and the Exchange Agreement provides for the Escrow to close 45 days after substantial completion of the Improvements (the "Closing"); and WHEREAS, the parties each retained environmental consultants to review the Phase I and II environmental reports and to investigate the respective properties. With respect to the Prologis Property, Prologis' environmental consultant, Partner Engineering and Science, Inc. ("Partner") issued a report, which was peer reviewed by the City's environmental consultant, Anderson Environmental/EFl Global ("EFI") indicating that there are no major environmental concerns on either the City Property or the Prologis Property. Partner and EFI have issued reliance letters for the report on the Prologis Property in favor of the City, each of which is supported by $5M in professional errors and omissions insurance; and WHEREAS, as an additional layer of protection against any environmental concerns regarding the Prologis Property, the parties agreed to a condition precedent to Prologis' obligations in Section 9.1(i) of the Exchange Agreement to the effect that City shall provide Prologis with evidence of having obtained an environmental insurance policy in favor of the City (or the Carson Reclamation Authority, if applicable), which insurance shall be effective as of the Closing; and RESOLUTION NO. 20-023 Page 1 of 6 07777.0228/626989.2 WHEREAS, the valuation of the City property in the Exchange Agreement, as referenced above, included an additional $200,000, which Prologis agreed to include in the valuation as a means to pay for the costs of City purchasing the aforementioned insurance policy by increasing the net amount payable to the City under the Exchange Agreement by $200,000; and WHEREAS, to procure the environmental insurance as required pursuant to Section 9.1(i) of the Exchange Agreement, City has obtained the quote attached hereto as Exhibit "A," for pollution legal liability insurance from Allied World Assurance Company; and WHEREAS, the City Council sees fit to approve the purchase of the aforementioned insurance coverage, at Prologis' expense, in accordance with the Exchange Agreement. NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF CARSON DOES HEREBY FIND, DETERMINE, AND RESOLVE AS FOLLOWS: SECTION 1. The foregoing recitals are true and correct, and are incorporated herein as findings of fact. SECTION 2. The City Council hereby approves the purchase of pollution liability insurance coverage from Allied World Assurance Company on the terms set forth in the quote attached hereto as Exhibit "A" (the "Quote"). Notwithstanding the amount set forth in the Quote, the total approved premium, including surplus lines taxes and stamping fees, is $153,352.06. In accordance with Section 9.1(i) of the Exchange Agreement, the insurance shall be in effect as of the Closing. The Carson Reclamation Authority shall be named as an additional insured on the policy. The City Manager, with appropriate consultation from the City Attorney, is hereby authorized to execute such documents as reasonably necessary to carry out the purchase of the insurance coverage as approved herein. SECTION 3. This Resolution shall be effective immediately upon its adoption. SECTION 4. The City Clerk shall certify to the passage and adoption of this Resolution and enter it into the book of original Resolutions. [Signatures on Following Page] RESOLUTION NO. 20-023 Page 2 of 6 07777.0228/626989.2 r-� PASSED, APPROVED and ADOPTED this 4th day of February, 2020. APPROVED AS FORM: STATE OF CALIFORNIA j COUNTY OF LOS ANGELES j ss. CITY OF CARSON ) CITY OF CARSON: ATT T:m4k � f„ Y`I _'8onesia Gause-Aldana, MO, Ci Icrk I, Donesia Gause-Aldana, City Clerk of the City of Carson, California, hereby attest to and certify that the foregoing resolution, being Resolution No. 20-023, adopted by the City of Carson City Council at its meeting held on the 4th day of February, 2020 by the following vote: AYES: NOES: ABSTAIN: ABSENT: COUNCIL MEMBERS: Robles, Dear, Davis—Holmes, Hilton, Hicks COUNCIL MEMBERS: None COUNCIL MEMBERS: None COUNCIL MEMBERS:None 07777.0228/626989.2 RESOLUTION NO. 20-023 Page 3 of 6 WORLD L 1 . D ALLIED WORLD ASSURANCE COMPANY -b YY R LD Telephone: 267-800-1800Plaza,United F xtr287 800-185et, Suite 9 Philadelphia, PA 19103 To: Brian Lu Cobbs Allen Capital, LLC 152 West 570, Street New York, NY, 10019 Date: 12130/2019 Bdan.Lu@cacspecially.com From: Michael Checchio Account #: 793294 Re: City of Carson — Scheduled Location Pollution Liability QUOTATION Insured: City of Carson Address: 701 East Carson Street New Conditions Coverage Carson, CA 90745 Insured Location Name Insured Location Address Pre-existing Conditions Coverage 2390, 2400 and 2410 E Dominguez St., Carson, CA 18620 S Broadway and 18601 S Main St., Carson, CA The following Coverages may be offered: 1. Pre-existing Conditions Coverage 2. New Conditions Coverage 3. Blanket Non -Owned Site Coverage 4. Blanket Transportation Coverage 5. Business Interruption Coverage Option Coverages Each Coverage Policy Deductible Policy Premium Commission: 15% Included in the Premium above, Incident Section Aggregate 1/30/2020 Term 2% Additional Premium — Based on the Coverage Option selected above, Limit Aggregate Limit Limit 1 1-5 $10,000,000 $10,000,000 $10,000,000 $250A0 10 yr. $148,525.00 72 Fours — pre; 5 Cov 5 yr new Note: For multi-year policies a single aggregate limit applies to the entire policy term. Limits are not reinstated. Insurer: Allied World National Assurance Company Non -admitted in CA Policy Form: ENV-SPL2 00003 00 09/14 Premium Due Date: 30 Das from effective date of otic Premium See Option Above Commission: 15% Included in the Premium above, Retroactive Date: Policy Inception Quote Expiration Date: 1/30/2020 TRIA Amount : 2% Additional Premium — Based on the Coverage Option selected above, RESOLUTION NO. 20-023 (Exhibit A) Page 4 of 6 Endorsements: 1. ENV -IL 00002 (01115) —Policyholder Disclosure Statement Under the Terrorism Risk Insurance Act 2. ENV -IL 00009 00 (02J15)— Conditional Exclusion of Terrorism (Relating to Disposition of Federal Terrorism Risk Insurance Act) 3. ENV-SPL2 00006 00 (09114) — Additional Insured - Where Required by Written Contract 4. ENV-SPL2 00008 00 (06/19) — Asbestos and LBP - Inadvertent Disturbance 5, ENV-SPL2 00015 00 (05115) — Aggregate and Maintenance Deductible Amounts • 3x -> $50,000 6. ENV-SPL2 00023 00 (09114) — Business Interruption - Contingent BI 7. ENV-SPL2 00039 00 (02115) — Claim Expense (Partial) Outside of Limits • 25% (For Options 1 and 2 Only) 8. ENV-SPL2 MNSCPT — Institutional and Engineering Controls Exclusion with Exception for Bodily Injury and Property Damage Claims 'Subject to AWAC Legal Approval 9. ENV-SPL2 0007100 (09114) — Intentional Non-compliance Excl. 10. ENV-SPL2 00082 00 (09/14)— Limit Policy Provision to Specified Location(s) • ENV-SPL2 00163 00 (09114) — Pre-existing Cond. Cov, - 3rd Party Claims • 18620 S Broadway and 18601 S Main St., Carson, CA 11. ENV-SPL2 MNSCPT — Material Change in Use —Intended Use • IndustrallWarehouse Use • 'Subject to AWAC Legal Approval 12. ENV-SPL2 00113 00 (09114) — Named Insured • Carson Reclamation Authority • TBD 13. ENV-SPL2 00163 00 (09114) — Pre-existing Cond. Cov. - 3rd Party Claims • 'See ENV-SPL2 00082 00 (09114) — Limit Policy Provision to Specified Location(s) 14. ENV-SPL2 0018100 (09114) — Schedule of Insured Contracts) 15. ENV-SPL2 00182 00 (11117) — Scheduled Location Coverages, Limits and Deductible • 2390, 2400 and 2410 E Dominguez St., Carson, CA • Coverage 1Only • Retro Date — TBD — Date of Sale of Land Swap Agreement 16. ENV-SPL2 00186 00 (09114) — Split Policy Term • 10 Years Pre; 5 Years New 17. ENV-SPL2 00187 00 (12!14) — Straleglc Response Coverage Extension 18. ENV-SPL2 0019900 (09114) — Transportation -Scheduled Location 19. ENV-SPL2 00200 00 (09114) — Transportation - Transportation Date nla 20. ENV-SPL2 00223 00 (09114) — Waiver of Subrogatlon Where Required by Contract 21. IL 00017 04 (11108) — California - Suits Involving a Surplus Lines Broker - Remedies 22. ENV-SPL2 MNSCPT — Separation of insureds Amendatory Endorsement 23. ENV-SPL2 MNSCPT— Multi Year Policy Term —Minimum Earned Premium and Cancellation • 25% MEP at Inception; 50% at First Anniversary; 100% at Second Anniversary 24, ENV-SPL2 MNSCPT— Insured Contract Definition Endorsement 25. ENV-SPL2 MNSCPT — Independent Counsel 26. ENV-SPL2 MNSCPT — Notice of Possible Claim Amendatory Endorsement Subjectivities Quotation subject to Insurer's receipt, review and acceptance of: 1, Surplus Lines Affidavit 2. Completed and Signed Allied World Application 3. Completed and Signed TRIA Disclosure Statement 4. Insured or Risk Manager Contact Information (name, phone and email address) RESOLUTION NO. 20-023 (Exhibit A) Page 5 of 6 Please email ALL subjectivifies to Michael. Checchio@awac. com VALUE ADDED The following are available at no additional charge to Allied World Environmental policyholders. 2417 Environmental Helpline - Provides timely answers to policyholder questions regarding Environmental Health & Safety issues, regulatory matters and industry best practices affecting their day to day business, The service is offered through a strategic relationship with Hydro -Environmental Technologies, a highly regarded, mulfi-disciplinary and full- service Environmental, Health & Safety and risk management consulting company. Strategic Response - Policyholders receive access to a loll -free crisis hotline which connects insureds to professional crisis management resources in the event of a catastrophe. Coverage for Strategic Response Costs up to $250,000 outside policy limits and Strategic Management Loss up to $50,000 outside of policy limits is also provided, SURPLUS LINES DISCLOSURE This quotation is being offered on a surplus lines basis. The premiums quoted herein do not include any applicable taxes and fees. As the producing broker, it will be your responsibility to comply with all regulatory requirements, including the filing, collection and payment of all applicable Surplus Lines Taxes and Stamping Fees should a policy be issued. You will be required to complete and return the attached Surplus Lines Affidavit prior to the release of the binder. TERMS AND CONDITIONS Terms and conditions that are not specifically identified In this quote are not included, This quote is strictly conditioned upon satisfaction of all subjectivilies noted above and there being no material change in the risk, including a submission being made to the insurer of a claim or circumstance that might give rise to a claim, between the dale of this quote and the policy inception date. If a subjectivity is not satisfied, or our review of the information provided Identifies a material risk or condition, or in the event of such a change in risk, the insurer may, in its sole discretion, amend or withdraw this quote. All other terms and conditions as per Allied World's Policy Form and any applicable endorsements referenced herein. Thank you for choosing Allied World Environmental — Sustaining Policyholders. Reducing Risk. This Quote is authorized by Louis Iglesias. RESOLUTION NO. 20-023 (Exhibit Alf Page 6 of 6