HomeMy WebLinkAboutCity Council - 2012-71 RESOLUTION NO. 2012-71
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HUNTINGTON BEACH,
CALIFORNIA AUTHORIZING THE PROCESSING OF DOCUMENTATION REFLECTING
AND CONFIRMING OWNERSHIP OF REAL PROPERTY BY THE SUCCESSOR AGENCY
TO THE REDEVELOPMENT AGENCY OF THE CITY OF HUNTINGTON BEACH AND
APPROVING VARIOUS ACTIONS, SUBJECT TO CONDITIONS PRECEDENT,
RELATING TO THE TRANSFER OF THE PURCHASE PRICE AND SALE OF REAL
PROPERTY PURSUANT TO A PURCHASE AGREEMENT AND JOINT ESCROW
INSTRUCTIONS BY AND BETWEEN THE CITY OF HUNTINGTON BEACH AND
CAMPBELL LODGING, INC. AND CAMPBELL LODGING INTERNATIONAL, LLC
WHEREAS, the former Redevelopment Agency of the City of Huntington Beach
("Agency") was a redevelopment agency in the City of Huntington Beach ("City"), duly created
pursuant to the California Community Redevelopment Law (Part 1 (commencing with Section
33000) of Division 24 of the California Health and Safety Code) ("CRL"); and
WHEREAS, the Agency was responsible for the administration of redevelopment
activities within the City; and
WHEREAS, Section 33220 of the CRL provides that certain public bodies may aid and
cooperate in the planning, undertaking, construction or operation of redevelopment projects; and
WHEREAS, the City and the Agency entered into a number of Cooperation Agreements
to continue the effort to redevelop, revitalize and/or eliminate blight in the City to achieve the
purposes and goals of the CRL, to repay debt to the City and to provide for affordable housing,
as appropriate and as authorized by redevelopment law in effect at the time of approval of said
agreements; and
WHEREAS, pursuant to such authority set forth in the CRL and other applicable law, on
March 7, 2011, by Resolution No. 2011-17, the City approved and accepted the transfer of
certain real property located in the City of Huntington Beach, California, APN Nos. 142-081-06,
142-081-09, 142-081-10, 142-081-11, 142-081-12, and 142-081-28 (collectively, the "Agency
Property"); and
WHEREAS, pursuant to Resolution No. 2011-17, the City executed a certificate of
acceptance ("Certificate of Acceptance") for the Agency deed designed to transfer ownership of
the Agency Property from the Agency to the City ("Agency Deed"); and
WHEREAS, on or about March 10, 2011, the Agency Deed, along with the Certificate of
Acceptance, was recorded in the official records of the County of Orange; and
WHEREAS, neither the Cooperation Agreements nor the purported transfer of the
Agency Property (or any of the related documents and actions) were challenged within the
applicable statute of limitations; and
1
12-3499/85282.doc
Resolution No. 2012-71
WHEREAS, AB xl 26 ("AB 26") was signed by the Governor of California on June 28,
2011, making certain changes to the CRL and adding Part 1.8 and Part 1.85 to Division 24 of the
California Health and Safety Code; and
WHEREAS, AB 26 states, in part, that "[t]he Legislature hereby finds that a transfer of
assets by a redevelopment agency [after January 1, 2011] is deemed not to be in the furtherance
of the [CRL] and is thereby unauthorized"; and
WHEREAS, AB 26 further states, in part, that "[c]ommencing [February 1, 2012], ...
arrangements between the city ... that created the redevelopment agency and the redevelopment
agency are invalid..."; and
WHEREAS, AB 26 further states, in part, that "[a]ll ... properties [and] buildings ... of
the former redevelopment agency are transferred on [February 1, 2012], to the control of the
successor agency"; and
WHEREAS, subsequent to the date of transfer of the Agency Property to the City, the
City and Campbell Lodging, Inc. entered into that certain Purchase Agreement and Joint Escrow
Instructions dated January 27, 2012, as amended by that Amendment to Purchase Agreement and
Joint Escrow Instructions dated January 31, 2012 and that Second Amendment to Purchase
Agreement and Joint Escrow Instructions dated June 25, 2012 (collectively, the "Purchase
Agreement") relating to the sale of the Agency Property and the development thereon of a high-
quality, first-class, four story, 120-140 room Hyatt Place Hotel or other brand hotel ("Project')
pursuant to the terms and conditions contained in the Purchase Agreement. Campbell Lodging,
Inc. assigned its rights as "Buyer" under the Purchase Agreement to Campbell Lodging
International, LLC but retained the obligation to be the developer of the hotel; and
WHEREAS, on or about April 20, 2012, the California State Controller issued
correspondence stating, in part, that "[i]f your city ... received any assets from a redevelopment
agency after January 1, 2011, your city ... hereby is ordered to ... reverse the transfer and return
the applicable assets to the successor agency of the relevant redevelopment agency"; and
WHEREAS, under AB 26, each successor agency shall have an oversight board with
fiduciary responsibilities to holders of enforceable obligations and the taxing entities that benefit
from distributions of property taxes and other revenues pursuant to California Health and Safety
Code Section 34188; and
WHEREAS, the oversight board has been established for Successor Agency to the
Redevelopment Agency of the City of Huntington Beach ("Successor Agency") (which oversight
board shall hereinafter be referred to as the "Oversight Board") and all seven (7) members have
been appointed to the Oversight Board pursuant to California Health and Safety Code Section
34179; and
2
12-3499/85282.doc
Resolution No. 2012-71
WHEREAS, AB 1484 ("AB 1484") was signed by the Governor of California on June
27, 2012, making changes to AB 26 and certain additional changes to the CRL; and
WHEREAS, AB 1484, at Section 34179.5(c)(2) of Part 1.85 of the California Health and
Safety Code, categorizes certain assets as those "transferred after January 1, 2011 ... by the
redevelopment agency ... to the city ... that formed the redevelopment agency..." ("Section
34179.5(c)(2) Assets"); and
WHEREAS, AB 1484, at Section 34179.5(c)(1) of Part 1.85 of the California Health and
Safety Code, categorizes certain other assets as those "transferred from the former
redevelopment agency to the successor agency on or about February 1, 2012." ("Section
34179.5(c)(1)Assets"); and
WHEREAS, because (i) AB 26 states that a transfer of assets by a redevelopment agency
after January 1, 2011 was "unauthorized", (ii) AB 26 states that commencing February 1, 2012,
arrangements between a redevelopment agency and the city that created it are "invalid" and (iii)
the State Controller has purported to order that ownership of certain assets be vested in successor
agencies,the Agency Property is therefore not categorized as Section 34179.5(c)(2) Assets; and
WHEREAS, because AB 26 states that all properties and buildings of the former
redevelopment agency are transferred on February 1, 2012 to the control of the successor agency,
the Agency Property is therefore categorized as Section 34179.5(c)(1) Assets; and
WHEREAS, the City does not acknowledge that the purported transfer of the Agency
Property by the Agency to the City was not in furtherance of the CRL; and
WHEREAS, the City does not acknowledge the effectiveness of the Legislature's
purported deeming not to be in furtherance of the CRL of the purported transfer of assets that
was conducted in accordance with the CRL at the time when made and was not challenged
within the applicable statute of limitations; and
WHEREAS, the City does not acknowledge that commencing February 1, 2012,
arrangements between the redevelopment agency and the city that created it are invalid; and
WHEREAS, the City does not acknowledge the effectiveness of the California State
Controller's order to reverse the transfer of the Agency Property and return the applicable assets
to the Successor Agency to the Redevelopment Agency of the City of Huntington Beach
("Successor Agency"); and
WHEREAS, the City has limited financial resources and desires not to initiate litigation
at this time with regard to AB 26, AB 1484 and/or the purported order by the California State
Controller that ownership of the Agency Property be vested in the Successor Agency; and
WHEREAS, in order to avoid the costs of litigation and other costs, the City desires to
take action in a manner consistent with AB 26, AB 1484 and the California State Controller's
purported order, and in furtherance of the Successor Agency's duties under Section
3
12-3499/85282.doe
Resolution No. 2012-71
34179.6(h)(1) and Section 34179.6(f), by processing documentation reflecting ownership of the
Agency Property by the Successor Agency, without acknowledging the effectiveness of AB 26,
AB 1484 and/or such order and duties, expressly disclaiming the same; and
WHEREAS, the City's processing of documentation reflecting ownership of the Agency
Property by the Successor Agency is not intended to waive, and shall not constitute a waiver, by
the Successor Agency or the City of any constitutional, legal or equitable rights that the
Successor Agency or the City may have to challenge, through administrative or judicial
proceedings, the effectiveness and/or legality of all or any portion of AB 26 or AB 1484, any
determinations rendered or actions or omissions to act by any public agency or government
entity or division in the implementation of AB 26 and AB 1484, and any and all related legal and
factual issues, and the Successor Agency and the City expressly reserves any and all rights,
privileges, and defenses available under law and equity; and
WHEREAS, per Section 15301 of the State CEQA Guidelines, the transfer of the Agency
Property is exempt from environmental review under CEQA because the transfer will result in a
continuation of an existing facility involving no expansion of use and is therefore exempt from
environmental review, and any future development for the Agency Property will require separate
environmental review; and
WHEREAS, Health and Safety Code Section 34181(a) provides, in pertinent part, that
the Oversight Board shall direct the Successor Agency to transfer ownership to the appropriate
public jurisdiction of all assets and property constructed and used for governmental purposes;
and
WHEREAS, the City is the appropriate public jurisdiction for ownership of the Agency
Property pursuant to the Purchase Agreement, as authorized pursuant to Health and Safety Code
Section 34181(a); and
WHEREAS, the Successor Agency and Oversight Board will each consider approving its
own resolution (the "Successor Agency Resolution" and the "Oversight Board Resolution",
respectively) to, among other things: (1) approve of the terms of the Purchase Agreement; (2)
approve of the sale and conveyance of the Agency Property from the City or Successor Agency
to Campbell Lodging International, LLC in accordance with the terms and conditions set forth in
the Purchase Agreement, for the purpose of the Campbell Lodging, Inc. developing the Project;
(3) approve of the transfer to the Successor Agency of the purchase price received from the sale
of the Agency Property for distribution to the taxing agencies in accordance with AB 26/AB
1484; and (4) acknowledge and agree that the Purchase Agreement constitutes the existence of
an enforceable obligation pursuant to Part 1.8 and Part 1.85 of Division 24 of the Health and
Safety Code for the purposes of, without limitation, the disposition of assets previously owned
by the Agency; and
WHEREAS, all of the prerequisites with respect to the approval of this Resolution have
been met.
4
12-3499/85282.doc
Resolution No. 2012-71
NOW, THEREFORE, BE IT HEREBY RESOLVED, by the City Council of the City of
Huntington Beach, as follows:
1. The above recitals are true and correct and are a substantive part of this
Resolution.
2. The City hereby authorizes the processing of documentation via quitclaim deed(s)
or other appropriate instrument in order to reflect and confirm ownership of the Agency Property
by the Successor Agency, including the execution of Certificate of Acceptance therefore by the
Successor Agency, and the processing of documentation to transfer to/retention by the Successor
Agency or the City of the Purchase Agreement and/or any and all other lease or rental documents
pertaining to the Agency Property.
3. Provided that all of the following conditions (collectively, the "Conditions") are
satisfied, the City Council (a) approves of the sale and conveyance of the Agency Property from
the City or Successor Agency to Campbell Lodging International, LLC in accordance with the
terms and conditions set forth in the Purchase Agreement, for the purpose of the Campbell
Lodging, Inc. developing the Project; (b) approves of the transfer to the Successor Agency of the
purchase price received from the sale of the Agency Property for distribution to the taxing
agencies in accordance with AB 26 and AB 1484; (c) approves and consents to the transfer of
ownership of any or all of the Agency Property, together with the transfer of the Purchase
Agreement and/or any and all other lease or rental documents pertaining to the Agency Property,
from the Successor Agency to the City as the appropriate public agency, as may be directed by
the Oversight Board; and (d) acknowledges and agrees that the Purchase Agreement constitutes
the existence of an enforceable obligation pursuant to Part 1.8 and Part 1.85 of Division 24 of the
Health and Safety Code for the purposes of, without limitation, the disposition of assets
previously owned by the:
(1) The Successor Agency adopts the Successor Agency Resolution;
(2) The Oversight Board adopts the Oversight Board Resolution; and
(3) (A) The Department of Finance either does not review the Oversight Board
Resolution within the time period set forth in AB 26/AB 1484 and the Oversight Board
Resolution and the actions therein are deemed effective pursuant to AB 26/AB 1484 or (B) the
Department of Finance reviews the Oversight Board Resolution within the time period set forth
in AB 26/AB 1484 and the Department of Finance approves of the Oversight Board Resolution
and the actions therein.
4. The City Manager, or designee, is hereby authorized to take such actions and
execute such documents as are necessary to effectuate the intent of this Resolution on behalf of
the City, including, without limitation, transferring or retaining the Purchase Agreement and/or
any and all other lease or rental documents pertaining to the Agency Property and taking all
actions and signing any and all documents necessary to implement and effectuate the Purchase
Agreement and/or any and all other lease or rental documents pertaining to the Agency Property.
5. The City Council does not intend, by adoption of this Resolution, to waive any
constitutional, legal and/or equitable rights of the Successor Agency or the City under law and/or
in equity by virtue of the adoption of this Resolution and actions approved and taken pursuant to
5
12-3499(85282.doc
Resolution No. 2012-71
this Resolution and, therefore, reserves all such rights of the Successor Agency and the City
under law and/or in equity.
6. This Resolution shall take effect upon the date of its adoption.
PASSED, APPROVED, AND ADOPTED at a regular meeting of the Successor Agency
to the Redevelopment Agency of the City of Huntington Beach, California, held on the 15th day
of October, 2012 by the following vote, to wit:
Mayor
REVI ND APPROVED: INITIA AND APPROVED:
Cite a /ger Director of Economic Development
PROVED AS TO FORM:
�Att
6
12-3499/85282.doc
Res. No. 2012-71
STATE OF CALIFORNIA
COUNTY OF ORANGE ) ss:
CITY OF HUNTINGTON BEACH )
I, JOAN L. FLYNN the duly elected, qualified City Clerk of the City of
Huntington Beach, and ex-officio Clerk of the City Council of said City, do hereby
certify that the whole number of members of the City Council of the City of
Huntington Beach is seven; that the foregoing resolution was passed and adopted
by the affirmative vote of at least a majority of all the members of said City Council
at a regular meeting thereof held on October 15, 2012 by the following vote:
AYES: Shaw, Harper, Dwyer, Hansen, Carchio, Bohr, Boardman
NOES: None
ABSENT: None
ABSTAIN: None
Cit Jerk and ex-officio erk of the
City Council of the City of
Huntington Beach, California