HomeMy Public PortalAboutC-20-049 - KL Fenix Corporation Reimbursement Agreement, 20601 South Main St.REIMBURSEMENT AGREEMENT
THI§ REIMBURSEMENT AGREEMENT "A "
1 of �c s executed this day
if
2020 ("Effective Date"), by and ("Agreement")
the 1CITY OF CARSON, a
California cipal corporation ("City"), and KL FENIX CORPORATION, a California
(� corporation ("Developer"). City and Developer may be referred to, individually or collectively, as
"Party" or "Parties."
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RECITALS
WHEREAS, Developer owns that certain real property located at 20601 South Main
Street, City of Carson, County of Los Angeles, State of California, and identified as Assessor
Parcel No. 7336-003-043 ("Property"); and
WHEREAS, Developer desires to develop and operate a logistics facility as a truck
terminal with a 53,000 square foot building and 475 truck/cargo container parking/storage spaces
on the 14.33 acre Property ("Project"); and
WHEREAS, on June 6, 2018 and July 24, 2018, Developer filed with City an application
for an exception to City's duly adopted Interim Urgency Ordinance No. 18-1805U ("Exception
Application"), which exception would allow Developer to develop the Project in spite of the
moratorium placed by City's Ordinance No. 17-1615U and later twice extended, including by
Interim Urgency Ordinance No. 18-1805U, on the establishment, expansion, or modification of
truck yards, logistics facilities, hazardous materials and hazardous waste facilities, container
storage, and container parking; and
WHEREAS, after the City Council approved City Resolution No. 18-113 ("Resolution
No. 18-113") on August 21, 2018, whereby the City Council conditionally approved Developer's
request for exception to Interim Urgency Ordinance No. 18-1805U, Developer submitted to City
development applications for issuance of certain entitlements for the Project, including but not
limited to, applications for a General Plan Amendment, Specific Plan, Conditional Use Permit,
Site Plan and Design Review, and Entitlement Agreement (collectively, "Entitlements"); and
WHEREAS, Developer desires to enter into an entitlement agreement ("Entitlement
Agreement") with the City for the Project and commence with processing the Entitlements for the
Project; and
WHEREAS, the City is the lead agency, within the meaning of the California
Environmental Quality Act, Public Resources Code § 21000 et seq. ("CEQA"), for purposes of
conducting environmental review of the Project, and as such, will prepare all CEQA reports and
supporting documents, distribute such reports and documents to responsible agencies and others,
hold public hearings and consider public comments, and consider approval or certification of such
reports and other documents as it deems necessary and appropriate in accordance with CEQA; and
WHEREAS, the City and Developer desire to enter into this Agreement to provide for
Developer to be responsible for all direct and indirect City costs related to processing the Project,
CEQA approval for the Project, the Entitlements, and for Developer to deposit funds with City in
advance to cover such costs, and to establish procedures therefor; and
01007.0018/645767.1 q7
WHEREAS, as of the date of execution of this Agreement, the City has already incurred
certain costs and attorney's fees in connection with processing the Entitlements, and such costs
and fees are intended to be included as reimbursable costs pursuant to this Agreement; and
WHEREAS, the Parties acknowledge that prior to the Effective Date, Developer has made
certain deposits totaling at least One Hundred Sixteen Thousand Seven Hundred Fifty Dollars
($116,750) with City in connection with applications submitted for the Entitlements and CEQA
review, as follows: (1) $26,000 for Specific Plan review/processing; (2) $3,000 for Conditional
Use Permit; (3) $5,000 for Site Plan and Design Review; and (4) $82,750 for CEQA review
including all fees incurred by the Environmental Consultant (collectively, the "Existing Deposit");
and
WHEREAS, as of the Effective Date, the current balance remaining from the Existing
Deposit is $8,666.60 and most of the Existing Deposit has been exhausted on the Environmental
Review Process; and
WHEREAS, Developer acknowledges that the Existing Deposit does not include deposits
required by the City for all the Entitlements nor does the Existing Deposit include the anticipated
cost associated with the Planning Commission and City Council meetings and as such, Developer
agrees to add to the Existing Deposit to satisfy the City requirements; and
WHEREAS, the Parties further acknowledge that the Existing Deposit and any additional
deposits made by Developer associated with applications for the Entitlements will be credited
toward Developer's obligation to pay the City Costs (as defined below).
NOW, THEREFORE, for the purposes set forth herein, and for good and valuable
consideration, the adequacy of which is hereby acknowledged, the Parties hereby agree as follows:
TERMS
1. Incorporation of Recitals. The Parties hereby incorporate the Recitals as though
fully set forth herein.
2. Developer Responsibility for City Costs. Developer shall be responsible for, and
shall reimburse City for, all direct and indirect costs, fees and expenses of City related to review
and processing of the Entitlements and CEQA review (the "City Costs"). City Costs include, but
are not limited to: (1) attorneys' fees, at a rate not to exceed $350 per hour, and staff time required
for the drafting and review of the Entitlement Agreement, CEQA documents, any IDIF Agreement
or CFD Agreement, as such are defined in Resolution No. 18-113, processing Developer's
Exception Application, this Agreement, and any documents that the City deems necessary for the
processing of the Project, the Entitlements, and all entitlements related to any of the foregoing;
(2) all costs related to the review and processing of the Project, the Entitlements, the Exception
Application and all related entitlements, including but not limited to consultant costs which
includes, without limitation, consultant fees, costs, and expenses associated with processing
Developer's Community Facilities District assessment, noticing and holding public hearings and
considering public comments; (3) all fees, costs and expenses incurred in connection with CEQA
review or compliance, including but not limited to City staff time, attorneys' fees at the rate set
forth above, Environmental Consultant (as defined below) fees, costs of preparing, reviewing.
certifying and/or circulating necessary CEQA reports and documents, including any
environmental impact report, technical studies and analyses, and other supporting documents,
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reports, written declarations, studies, or analyses, as deemed necessary and appropriate by City in
accordance with CEQA; (4) all costs related to studies, reports and design services for the
development of any Project -related infrastructure; (5) all costs related to investigations of the
Property or the Project; and (6) any other fees and costs deemed necessary by the City in order to
process, review, or act upon the Entitlements, the Project, and all related entitlements. Developer's
obligation to deposit and reimburse City Costs are in addition to Developer's duty to indemnify,
defend, and hold harmless City, as set forth in Section 8, below.
Developer shall, within three (3) days from the Effective Date, deposit with City an additional sum
of Ninety -Five Thousand Dollars ($95,000) against which, together with any balance remaining
on the Existing Deposit, City Costs will be drawn down.
2.1 Additional Deposits by Developer. Developer shall make additional
deposits to the City within ten (10) days of City's written request to the Developer. City's written
requests for additional deposits shall state what costs have been incurred to date, additional costs
anticipated, and how City intends to apply any needed additional Developer deposits. If deposited
sums exceed the costs incurred by City, City shall refund the difference as soon as City determines
the amount of such excess.
2.2 City's Right to Cease Work. In the event that Developer does not promptly
pay or reimburse the City Costs, including by failing to reimburse amounts incurred or timely pay
any additional requested deposits, City may immediately cease all work related to or concerning
the Entitlements, CEQA, and/or the Project, and may take such further action as City deems
appropriate, including deeming any Developer application(s) abandoned and any development
permit issued by City to Developer null and void.
2.3 Interest on Deposit. Any amounts deposited by Developer shall be
maintained by City in an interest-bearing account of City's choice, and may be co -mingled with
other City funds in such account. Interest accruing upon any such deposits shall inure to and be
created for the benefit of City.
2.4 Accounting. City shall keep an accounting of the City Costs and all deposits
made by Developer. Upon written request, City shall provide statements of these accounts to
Developer, which shall include descriptions of the City Costs, including the date, amount, and the
type of activity for which the cost was incurred. Failure of City to provide any accounting shall
not excuse Developer's duty to perform any act, including the duty to make full and timely deposits
required under this Section 2. Developer may question or challenge any use of funds set forth in
the accounting and may appeal same to the City Council.
2.5 Unexpended Funds. Upon approval of all necessary Project entitlements,
including the Entitlements, the expiration of all applicable appeal periods, and if a legal or
administrative challenge is made to the Entitlements, then upon the resolution of such challenge,
City shall return any then -unexpended portion of the deposit to Developer, without interest, less
an amount equal to any unpaid expenses previously incurred by the City.
3. Additional Taxes, Fee, and Charges. Notwithstanding any provision to the
contrary, Developer shall pay all normal and customary fees and charges applicable to all permits
necessary for the Project, and any taxes, fees, and charges hereafter imposed by City, the
Entitlements and any entitlements related thereto, which are standard and uniformly -applied to
similar projects in the City.
4. City Release; Termination. This Agreement shall terminate three (3) years after
the Effective Date unless Developer has outstanding reimbursement obligations to the City at such
time or City reasonably determines that the Project has not been abandoned and/or City will incur
additional reimbursable costs after such date, in which event this Agreement will be automatically
extended for additional one (1) year terms until Developer has reimbursed all City Costs.
5. Remedies. In the event of a breach by Developer, City may, in addition to any other
remedies, seek to recover the City Costs plus reasonable attorneys' fees in enforcing this
Agreement. This provision will not be interpreted to curtail any of City's remedies at law or equity
against Developer for any violation of its codes, nor shall it be interpreted as a waiver of any
defense of Developer.
6. Conflicts of Interest.
6.1 No Financial Relationship. Developer acknowledges the requirements of
Government Code Sections 1090 et seq. (the "1090 Laws") and warrants that it has not entered
into any financial or transactional relationships or arrangements that would violate the 1090 Laws,
nor shall Developer solicit, participate in, or facilitate a violation of the 1090 Laws. By law, the
documents required by CEQA must be independently prepared by City. Accordingly, despite any
funding mechanism provided in this Agreement, during the existence of the City's contract with
the Environmental Consultant (as defined below), and for a period of one (1) year after final
resolution of Developer's application for the Project, neither Developer, nor any of its
representatives, agents or other persons acting on behalf of Developer, shall enter into any financial
relationship with the Environmental Consultant or with any City official, employee, or contractor.
Nor, during such period, shall Developer propose to enter into any future relationship with the
Environmental Consultant or with any City official, employee, or contractor. This shall not prevent
Developer's consulting with Environmental Consultant as permitted by Section 10 of this
Agreement.
6.2 Developer's Representations and Warranties. Developer represents and
warrants that it is duly authorized to do business in the State of California. Developer further
represents and warrants that, for the twelve (12) month period preceding the submission of its
application for the Project, Developer has not entered into any arrangement to pay financial
consideration to, and has not made any payment to, the Environmental Consultant or any of the
Environmental Consultant's agents or employees. Developer further represents and warrants that,
for the 12 -month period preceding the Effective Date of this Agreement, it has not entered into
any arrangement to pay financial consideration to, and has not made any payment to, any City
official, agent or employee that would create a legally cognizable conflict of interest as defined in
the Political Reform Act (California Government Code sections 87100 et seq.).
7. Developer Acknowledgements. Subject to the reimbursement obligations set forth
in this Agreement, Developer acknowledges and agrees that, with respect to the work concerning
the Entitlements, the environmental documentation required for or otherwise associated with the
Project under CEQA, and the Project:
7.1 City has sole discretion to select which of its employees and contractors are
assigned to the work.
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7.2 City has sole discretion to direct the work and evaluate the performance of
the employees and contractors assigned to the work, and City retains the right to terminate or
replace at any time any such person.
7.3 City has sole discretion to determine the amount of compensation paid to
employees or contractors assigned to the work.
7.4 City, not Developer, shall pay employees and contractors assigned to the
work from a City account.
8. Indemnification and Hold Harmless.
8.1 Agreement Not Liability or Debt of City. The Parties acknowledge that
there may be challenges to the legality, validity and adequacy of this Agreement, any of the
Entitlements, CEQA review for the Project, the Project itself, or other entitlements related to the
same. If such challenges are successful, such challenges could delay or prevent the
performance of this Agreement, approval of the Entitlements, CEQA review, or implementation
of the Project. City shall have no liability whatsoever for the inability of Developer to obtain
approval of the Entitlements, CEQA approval, or the Project, or to obtain entitlements
concerning the Entitlements, CEQA review, or the Project, as the result of any judicial
determination that some or all of the Project, the Entitlements, CEQA review, or any
entitlements related to any of the same are invalid or inadequate or not in compliance with law.
No official, officer, employee or agent of the City shall be personally liable hereunder to any
extent. The Parties fizrther acknowledge and agree that this Agreement is not a debt of the
City. The City shall not in any event be liable hereunder other than to return the unexpended
and uncommitted portions of the deposit as provided in Section 2.6 above, and to provide an
accounting under Section 2.5 above. The City shall not be obligated to advance any of its own
funds with respect to CEQA documents or for any other purpose.
8.2 Indemnification. Developer agrees to indemnify, protect, defend, and hold
harmless the City and its officials, officers, employees, agents, elected boards, commissions,
departments, agencies, and instrumentalities thereof, from any and all actions, suits, claims,
demands, writs of mandamus, liabilities, losses, damages, penalties, obligations, expenses, and any
other actions or proceedings (whether legal, equitable, declaratory, administrative, or adjudicatory
in nature), and alternative dispute resolution procedures (including, but not limited to, arbitrations,
mediations, and other such procedures) asserted by third parties against the City that challenge, or
seek to void, set aside, or otherwise modify or annul, the action of, or any approval by, the City
for or concerning this Agreement, the Entitlements, the Project, or any entitlements related to any
of the foregoing (including, but not limited to, reasonable attorneys' fees and costs) (herein the
"Claims and Liabilities") whether such Claims and Liabilities arise under planning and zoning
laws, the Subdivision Map Act, CEQA, Code of Civil Procedure Sections 1085 or 1094.5, or any
other federal, state, or local statute, law, ordinance, rule, regulation, or any decision of a competent
jurisdiction. In the event any action for any Claims and Liabilities is brought against the City and/or
related parties, upon City's notification to Developer of the pendency of a claim or suit, Developer
shall make a minimum deposit sufficient to pay all of Developer's indemnification obligations for
the following ninety (90) days, which includes legal costs and fees anticipated to be incurred as
reasonably determined by the City. Developer shall make deposits required under this section
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within five (5) days of the City's written request. At no point during the pendency of such claim
or suit shall the minimum balance of the deposit fall below One Hundred Thousand Dollars
($100,000).
If Developer fails to timely pay such funds, the City may abandon the action without
liability to Developer and may recover from Developer any attorneys' fees and other costs for
which the City may be liable as a result of abandonment of the action. It is expressly agreed that
the City shall have the right to utilize the City Attorney's office or use other legal counsel of its
choosing. Developer's obligation to pay the defense costs of the City shall extend until final
judgment, including any appeals. City agrees to fully cooperate with Developer in the defense of
any matter in which Developer is defending and/or holding the City harmless. The City may make
all reasonable decisions with respect to its representation in any legal proceeding, including its
inherent right to abandon or to settle any litigation brought against it in its sole and absolute
discretion, and City's reasonable decision to settle or abandon a matter, including but not limited
to following an adverse judgment or failure to appeal, shall not cause a waiver of the City's
indemnification rights. Any decision by the City to settle litigation shall not, without the written
consent of Developer, bind Developer. City shall discuss litigation strategy with Developer in good
faith, but shall retain absolute discretion to make strategy decisions.
8.3 Exception. The obligations of Developer under this Section shall not apply
to any claims, actions, or proceedings arising through the sole negligence or willful misconduct of
the City, its members, officers, or employees.
8.4 Period of Indemnification. The obligations for indemnity under Section
8.2 shall begin upon the Effective Date and shall survive termination or expiration of this
Agreement. If City and Developer enter into an Entitlement Agreement that is approved by the
City Council, the indemnity obligations in this Agreement pertaining to the Entitlement Agreement
may, pursuant to express written agreement in such Entitlement Agreement, be superseded by
Developer's indemnity obligations under such Entitlement Agreement.
9. Compliance with Guidelines; Independent Judgment. The CEQA Guidelines,
including Sections 15084 and 15090, require the lead agency to exercise its independent judgment
in CEQA findings and approvals. Payment of the cost of preparation of CEQA documents by
Developer does not undermine the independent preparation of CEQA documents by the City so
long as any consultant hired to prepare CEQA documents (the "Environmental Consultant") is
under contract to and directed by the City. Accordingly, it is understood that any such consultant
hired by the City to prepare CEQA documents shall be under contract to and directed by the City,
and Developer shall not attempt to direct, influence, or otherwise control the consultant in the
performance of the work. Any questions or concerns Developer may have will be directed to the
City.
10. Developer's Rights Concerning Review of Documents. City shall give
Developer at least ten (10) days' notice along with copies of any proposed contract with the
Environmental Consultant, drafts of CEQA documents, and related documents so that Developer
shall have the opportunity to provide comments or objections thereto, prior to the City finalizing,
filing, or otherwise releasing any of the foregoing. The City shall also provide Developer with
draft copies of all other reports and studies funded through this Agreement. Developer may discuss
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issues with the City or its consultants and may make comments orally or in writing. The City shall
also use reasonable efforts to permit Developer's review with respect to agendas and staff reports
for all open City Council, Planning Commission and other public body meetings at which the
Project or related matters are to be considered, and by providing Developer with draft copies
thereof prior to or concurrently with the transmission of such documents to the appropriate body.
It is expressly understood that the Environmental Consultant (and other City consultants retained
hereunder) is under contract solely with the City, and the City is free to disregard the comments
of Developer and exercise its independent judgment in making payments to the Environmental
Consultant or revising or accepting the Environmental Consultant's work product, without any
liability whatsoever to Developer therefor.
11. No Obligation to Adopt CEQA documents or to Approve Project. The
provisions of this Agreement shall in no way obligate the City to adopt any CEQA documents or
take any action related to approval of the Project, the Entitlements, or any entitlements related to
any of the foregoing. The City shall use its independent judgment in determining whether to
approve the Entitlements, whether to approve draft CEQA documents for circulation, and whether
to certify or to not certify CEQA documents. In the event that the City certifies CEQA documents,
the City shall use its independent judgment in determining the significance of any impacts,
approving any mitigation program, adopting a statement of overriding considerations, or taking
any other action. The City shall have no liability to Developer in any manner whatsoever therefor,
other than providing the accounting of expenses as provided herein.
12. Assignment. Developer may not assign this Agreement to any other entity unless
agreed to in writing by City and upon proof of the financial viability of the successor entity to
fulfill the Agreement's obligations. City's consent to assignment shall not be unreasonably
withheld.
13. Relationship Between the Parties. The Parties agree that this Agreement does not
operate to create the relationship of partnership, joint venture, or agency between City and
Developer. Nothing herein shall be deemed to make Developer an agent of City.
14. Authority to Enter Agreement. Developer warrants that it has the legal capacity
to enter into the Agreement. Each Party warrants that the individuals who have signed the
Agreement have the legal power, right, and authority to make this Agreement and bind each
respective Party.
15. Notices. All notices, demands, invoices, and communications shall be in writing
and delivered to the following addresses or such other addresses as the Parties may designate by
written notice:
To City: City of Carson
701 East Carson Street
Carson, CA 90745
Attn: Saied Naaseh, Community Development Director
Copy to: Aleshire & Wynder, LLP
18881 Von Karman Ave. Suite 1700
7
Irvine, CA 92612
Fax: 949-223-1180
email: ssoltani@awattomeys.com
Attn: Sunny Soltani, City Attorney
To Developer: KL Fenix Corporation
19401 S. Main Street
Gardena, CA 90248
Email: young@)dfenix.com
Attn: Young Kim
Depending upon the method of transmittal, notice shall be deemed received as follows: by
facsimile, as of the date and time sent; by messenger, as of the date delivered; by U.S. Mail first
class postage prepaid, as of 72 hours after deposit in the U.S. Mail; and by email, upon the sender's
receipt of an email from the recipient acknowledging receipt.
16. Cooperation; Further Acts. The Parties shall fully cooperate with one another,
and shall take any additional acts or sign any additional documents as may be necessary,
appropriate, or convenient to attain the purposes of this Agreement.
17. Construction; References; Captions. It being agreed the Parties or their agents
have participated in the preparation of this Agreement, the language of this Agreement shall be
construed simply, according to its fair meaning, and not strictly for or against any Party. Unless
otherwise specified, any term referencing time, days, or period for performance shall be deemed
calendar days and not business days, provided, however that any deadline that falls on a weekend
or holiday shall be extended to the next City business day. All references to Developer include all
personnel, employees, agents, and contractors of Developer, except as otherwise specified in this
Agreement. All references to City include its elected officials, appointed boards and commissions,
officers, employees, agents, and volunteers. The captions of the various paragraphs are for
convenience and ease of reference only, and do not define, limit, augment, or describe the scope,
content, or intent of this Agreement.
18. Amendment; Modification. No supplement, modification, or amendment of this
Agreement shall be binding unless executed in writing and signed by both Parties.
19. Waiver. No waiver of any default shall constitute a waiver of any other default or
breach, whether of the same or other covenant or condition. No waiver, benefit, privilege, or
service voluntarily given or performed by a Party shall give the other Party any contractual right
by custom, estoppel, or otherwise.
20. Binding Effect. Each and all of the covenants and conditions shall be binding on
and shall inure to the benefit of the Parties, and their successors, heirs, personal representatives, or
assigns. This section shall not be construed as an authorization for any Party to assign any right or
obligation.
21. No Third Party Beneficiaries. There are no intended third party beneficiaries of
any right or obligation assumed by the Parties.
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22. Invalidity; Severability. If any portion of this Agreement is declared invalid,
illegal, or otherwise unenforceable by a court of competent jurisdiction, the remaining provisions
shall continue in full force and effect, and shall be construed so as to effectuate the intent of the
Parties.
23. Consent to Jurisdiction and Venue. This Agreement shall be construed in
accordance with and governed by the laws of the State of California. Any legal action or
proceeding brought to interpret or enforce this Agreement, or which in any way arises out of the
Parties' activities undertaken pursuant to this Agreement, shall be filed and prosecuted in the
appropriate California State Court in the County of Los Angeles, California. Each Party waives
the benefit of any provision of state or federal law providing for a change of venue to any other
court or jurisdiction including, without limitation, a change of venue based on the fact that a
governmental entity is a party to the action or proceeding, or that a federal right or question is
involved or alleged to be involved in the action or proceeding. Without limiting the generality of
the foregoing waiver, Developer expressly waives any right to have venue transferred pursuant to
California Code of Civil Procedure section 394.
24. Time is of the Essence. Time is of the essence with respect to this Agreement.
25. Counterparts. This Agreement may be signed in counterparts, each of which shall
constitute an original and which collectively shall constitute one instrument.
26. Entire Agreement. This Agreement contains the entire agreement between- City
and Developer and supersedes any prior oral or written statements or agreements between City
and Developer with respect to the subject matter of this Agreement.
[SIGNATURES OF PARTIES ON NEXT PAGE]
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IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the day
and year first above written.
CITY:
Cl'
cot
By
ATTEST.
GAO e �O
By:
Donesia ause- dans, City Cle -
�;
APPROVED AS TO FORM:
By:
Sunny K. Soltani, City Attorney
DEVELOPER:
KL FENIX CORPORATION, a California
corporation
By•
ame: �9
Title:
By:
ame: IV -5
Title:
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Two corporate officer signatures required when Developer is a corporation, with one signature required from
each of the following groups: 1) Chairman of the Board, President or any Vice President; and 2) Secretary, any
Assistant Secretary, Chief Financial Officer or any Assistant Treasurer. DEVELOPER'S SIGNATURES
SHALL BE DULY NOTARIZED, AND APPROPRIATE ATTESTATIONS SHALL BE INCLUDED AS
MAY BE REQUIRED BY THE BYLAWS, ARTICLES OF INCORPORATION, OR OTHER RULES OR
REGULATIONS APPLICABLE TO DEVELOPER'S BUSINESS ENTITY.
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