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HomeMy WebLinkAbout21002 HB LLC and UDR, Inc - 2013-12-16Dept. ID ED 13-49 Page 1 of I Meeting Date: 12116/2013' �,oP,gd va _;7 -0 0 W 'A MEETING DATE: 12/16/2013 SUBMITTED TO: Honorable Mayor and City Council Members SUBMITTED BY: Fred A. Wilson, City Manager PREPARED BY: Ken Domer, Assistant City Manager SUBJECT: Approve and authorize execution of an Assignment and Assumption Agreement from 21002 HB, LLC (Crescent Heights) to UDR, Inc. for the Residential Development of Pacific City Statement of Issue: The City Council is requested to approve the Assignment and Assumption Agreement for construction of the Pacific City residential parcel from 21002 HB, LLC (Crescent Heights) to UDR, Inc. Financial Impact: There is no fiscal impact with the approval of this Agreement. Recommended Action: A) Approve the "Assignment and Assumption Agreement' between 21002 HB, LLC, UDR, Inc. and the City of Huntington Beach; and, B) Authorize the Mayor and the City Clerk to execute the Agreement; and, C) Authorize the City Manager the ability to effectuate. this Agreement, including any :affiliate formed to construct the project. Alternative Action(s): Do not approve the Assignment Agreement and direct staff accordingly. Analysis: On September 17, 2012, the City Council approved a Development Agreement ("DA") and Affordable Housing Agreement ("AHA") with 21002 HB, LLC (Crescent Heights) regarding the Pacific City Project.. As part of the DA, the City Council provided for the sale of the parcels to different entities. The retail parcel has been sold to DJM Acquisition Group and the Hotel Parcel has been sold to R.D. Olson/Pacific Hospitality Group. Crescent Heights has entered into escrow to sell the residential parcel to UDR, Inc., a Delaware Corporation. Based upon review of the firm's Statement of Qualifications, UDR is a high -quality residential developer with experience in Huntington Beach. UDR is the third largest U.S apartment Real Estate Investment Trust with an enterprise value of $13 HB -331- Item 22. - 1 Dept. ID ED 13-49 Page 2 of 2 Meeting Date: 12/16/2013 billion. The Company is an owner/operator which acquires, develops, redevelops and manages high -quality multifamily apartment communities across the U.S. with a primary focus on coastal markets. As of September 30, 2013, UDR owned or had an ownership position in 53,656 apartment homes within 187 communities. The Company is well capitalized and has a $900 million line of credit. UDR, Inc. was founded in 1972 and is headquartered in Denver, Colorado with regional offices in Newport Beach, Santa Clara, Dallas, Houston, Orlando, Washington DC and Richmond. UDR is experienced in both operating and developing multifamily communities in Huntington Beach. The Company's most recent projects in the area include the Residences at Bella Terra and Beach+Ocean (formerly Beach Walk). The Company has a good relationship with City staff and a proven track record of moving projects along expeditiously. With the approval of the Assumption Agreement, it is recommended that the City Manager have the authority to approve an Assignment from UDR, Inc. to an affiliate of UDR. An affiliate shall mean an entity which is directly or indirectly controlled by UDR, Inc. by at least fifty-one percent (51 %). The Assignment and Assumption Agreement ensures that the portions of the DA and AHA that relate to the residential parcel will be carried out by UDR. This includes the development standards, delay fee obligations, and maintenance obligations. The residential parcel will be developed as rental units as proposed in the approved Entitlement Application of Crescent Heights. Environmental Status: Not Applicable Strate-gic Plan Goal: Enhance economic development Attachment(s): 1. "Assignment and Assumption Agreement" Item 22. - 2 RB -332- OFFICIAL BUSINESS Document entitled to free recording per Government Code Section 6103 and 27383 RECORDING REQUESTED BY AND WHEN RECORDED MAIL TO: City of Huntington Beach 2000 Main Street Ruatington Beach, CA 92W Attu: Assistant City Manager Recorded in Official Records, Orange County Hugh Nguyen, Clerk -Recorder 111 III II II 111 E�� 111 1111III I III I II *$ R 0 0 0 6 4 2 5 1 9 7$ 2014000003294 8:00 am 0110&14 53 Sec2 A37 A38 F14 10 0.00 0.00 0.00 0.00 27.00 0.00 0.00 0.00 Space Above this Line Reserved for Recorder's ASSIGNMENT ANDASSU P-T-ION AGREEMENT - THIS ASSIGNMENT AND ASSUMPTION AGREEMENT (this "Assignment") is made as of l(61 , 2013, by and among 21002 HB, LLC, a Delaware limited liability company ("Assignor"), UDR, Inc., a Maryland corporation ("Assignee"), and the City of Huntington Beach ("City"). RECITALS A. The City entered into a Development Agreement dated as of August 20, 2012 with 21002 HB, LLC, a Delaware limited liability company ("21002' ), which was recorded September 18, 2012, as Instrument No. 2012000545746 in the Official Records of the County Recorder for Orange County, California (the "Development Agreement"). The Development Agreement is incorporated herein by this reference as though fully set forth herein. The Development Agreement as used herein shall mean, refer to and include the Development Agreement, as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments thereto (which are hereby incorporated herein by this reference) as well as other documents expressly incorporated by reference in the Development Agreement. Capitalized terms not defined herein Shall have the meanings ascribed to them in the Development Agreement. B. The City entered into an Affordable Housing Agreement dated as of August 20, 2012 with 21002 HB, LLC, a Delaware limited liability company ("21002") (the "Affordable Housing Agreement"). Attachment No. 3 to the Affordable Housing Agreement was the Agreement Containing Covenants Affecting Real Property (Including Affordable Rental And/Or Sale Restrictions), which was recorded September 18, 2012, as Instrument No. 2012000545745 in the Official. Records of the County Recorder for Orange County, California. The Affordable Housing Agreement is incorporated herein by this reference as though fully set forth herein. The Affordable Housing Agreement as used herein shall mean, refer to and include the Affordable Housing Agreement, as well as any riders, exhibits, addenda, implementation agreements, amendments and attachments thereto (which are hereby incorporated herein by this reference) as well as other documents expressly incorporated by reference in the Affordable Housing 1340391103875 Agreement. Capitalized terms not defined herein shall have the meanings ascribed to them in the Affordable Housing Agreement. C. The Development Agreement grants certain rights, duties and obligations (the "Development Agreement Rights, Duties and Obligations") with respect to the development and improvement of the property described as Lots 1, 2 and 3 of Tract No, 16338 as shown on a map filed in Book 893, Pages 7-12, inclusive, of Miscellaneous Maps, records of Orange County, California (the "Tract Map"). D. The Affordable Housing Agreement grants certain rights, duties and obligations (the "Affordable Rousing Agreement Rights, Duties and Obligations") with respect to the development and improvement of the property described as Lot 1 of Tract No. 16338 as shown on the Tract Map. E. Paragraphs 17(e) and 17(f) of the Development Agreement describe the assignment of Development Agreement Rights, Duties and Obligations and Paragraph 1.3. of the Affordable Housing Agreement describes the assignment of Affordable Housing Rights, Duties and Obligations. F. Assignor desires to assign to Assignee, and Assignee desires to accept and assume, all of Assignor's Development Agreement Rights, Duties and Obligations and Affordable Housing Agreement Rights, Duties and Obligations as they pertain and relate to Lot 1 of the Tract Map. G. Pursuant to Paragraph 17(e) of the Development Agreement and Paragraph 1.3 of the Affordable Housing Agreement, the City must approve the assignment and transfer of Assignor's Development Agreement Rights, Duties and Obligations and Affordable Housing Agreement Rights, Duties and Obligations to Assignee. H. Pursuant to Paragraph 17(f) of the Development Agreement and Paragraph 1.3.3 of the Affordable Housing Agreement, upon such approval by the City and the assumption of Development Agreement and Affordable Housing Agreement Rights, Duties and Obligations by Assignee as set forth in this Assignment, effective as of the date of recordation of this Assignment Assignor will be released from all Development Agreement and Affordable Housing Agreement Rights, Duties and Obligations with respect to Lot 1 of the Tract Map. I. Assignor is not currently in default under the Development Agreement or the Affordable Housing Agreement. AGREEMENT NOW THEREFORE, for good and valuable consideration, the receipt and adequacy of which are hereby acknowledged, Assignor and Assignee hereby agree as follows: 1. Assignment. Effective as of the date of recordation of this Assignment, Assignor hereby assigns all of the Development Agreement and Affordable Housing Agreement Rights, Duties and Obligations relating or pertaining to Lot 1 of the Tract Map. 2. Acceptance and Assumption. Effective as of the date of recordation of this Assignment, Assignee hereby accepts the foregoing assignment of the Development Agreement 134039/103875 -2- and Affordable Housing Agreement Rights, Duties and Obligations from Assignor and assumes all of the Development Agreement and Affordable Housing Agreement Rights, Duties and Obligations pertaining or relating to Lot 1 of the Tract Map arising from and after the date of recordation of this Assignment. Assignor and Assignee ackriowledge that such assignment and acceptance shall relieve Assignor of its duty to comply with the Development Agreement and Affordable Housing Agreement Duties and Obligations with respect to Lot 1 of the Tract Map. Assignee expressly and unconditionally assumes all the Development Agreement and Affordable Housing Agreement Rights, Duties and Obligations of Assignor, and the Project approvals with respect to Lot 1 of the Tract Map and Assignee agrees to be bound thereby in accordance with the terms thereof and to perform all of the Development Agreement and Affordable Housing Agreement Duties and Obligations, and such Project approvals with respect to Lot 1 of the Tract Map. 3. Consent to Assignment and Assumption. In reliance upon the assumption by Assignee of all Development Agreement and Affordable Housing Agreement Duties and Obligations with respect to Lot 1 of the. Tract Map pursuant to the foregoing, the City does hereby consent to and approves of the assignment of the Development Agreement and Affordable Housing Agreement Rights, Duties and Obligations pertaining or relating to Lot 1 of the Tract Map by Assignor to Assignee. Assignee has advised the City that Assignee intends to convey its interest in the purchase agreement pursuant to which it will acquire Lot 1 of the Tract Map (and, therefore, its interest in this Agreement) to a project specific entity, which will be an Affiliate of the Assignee. The City approves such assignment and delegates to the City Manager, the responsibility for confirming that the new project specific entity qualifies as an Affiliate subject to his or her sole discretion. . In the event the City Manager determines the Affiliate does not qualify as an Affiliate, the provisions regarding Assignment contained in the Development Agreement and specifically sections 17 (e) and (f) shall apply as to the assignment. In the event the City Manger determines the entity qualifies as an Affiliate, a new assignment agreement substantially similar to this Agreement shall be executed between Assignee and Affiliate and may be approved by the City Manager. For purposes of this Agreement, "Affiliate" shall mean an entity which is directly or indirectly controlled by Assignee. The term "controlled" as used in the immediately preceding sentence, shall mean the power directly or indirectly to direct the management, including by reason of being a manager, managing member or general partner of such entity, or controlling a manager, managing member or general partner of such entity. It shall be a presumption that control with respect to a corporation or limited liability company is the right to exercise, directly or indirectly, fifty-one percent (51%) or more of the voting rights attributable to the controlled corporation of limited liability company, and, with respect to any partnership, trust, or other entity or association, control is the possession, indirectly or directly, of the power to direct or cause the direction of the management or policies of the controlled entity. 4. Recordation of Agreement. This Agreement shall not be recorded, and thus become effective, until after closing of the sale of Lot 1 pursuant to the terms of the Purchase and Sale Agreement, dated November 11, 2013, between Assignor and Assignee and shall not be recorded prior to becoming effective. 13-4039/103875 -3- 5. Assignee Address. The principal address of Assignee for purposes of the Development Agreement is as follows: UDR, Inc. - - 1745 • Shea Center Drive, Suite 200 Highlands Ranch, CO 80129 Attn: Legal Department 6. Miscellaneous. (a) This Assignment shall be determined in accordance with and governed by the laws of the State of California. (b) This Assignment may be executed in counterparts, each of which shall be deemed an original and which, when taken together, shall constitute a complete instrument. . (c) Each party agrees to perform any further acts, and to execute and deliver any further documents that may be reasonably necessary or required to carry out the intent and provisions of this Assignment and the transactions contemplated hereby. (d) This Assignment shall bind and inure to the benefit of the respective heirs, personal representatives, grantees, successors and assigns of the parties hereto. IN WITNESS VVHEREOF, the parties hereto have caused this Assignment to be signed by their duly authorized officers as of the day and year first written above. ASSIGNOR: ASSIGNEE: 21002 HB, LLC, a Delaware limited liability company By: Name: Shlomo Dachoh Name: Title: Secretary Title: Name: Title: COUNTERPART ' T 13-4039/103875 -4- 5. Assignee Address. The principal address of Assignee for purposes of the Development Agreement is as follows: UDR, Inc. 1745 • Shea Center Drive, Suite 200 Highlands Ranch, CO 80129 Attn: Legal Department 6. Miscellaneous. (a) This Assignment shall be determined in accordance with and governed by the laws of the State of California. (b) This Assignment may be executed in counterparts, each of which shall be deemed an original and which, when taken together, shall constitute a complete instrument. (c) Each party agrees to perform any further acts, and to execute and deliver any further documents that may be reasonably necessary or required to carry out the intent and provisions of this Assignment and the transactions contemplated hereby. (d) This Assignment shall bind and inure to the benefit of the respective heirs, personal representatives, grantees, successors and assigns of the parties hereto. IN WITNESS WHEREOF, the parties hereto have caused this Assignment to be signed by their duly authorized officers as of the day and year first written above. ASSIGNOR: By: Name: Title: By: Name: Title: ASSIGNEE: COUNT `5 RPRT 13-4039/103875 4- Date: THE CITE' OF HUNTINGTON BEACH By: tilm. Mayor REVIEWED AND APPROVED AS TO FORM: City ,ity Attokey ennifer McGrath 1"�►V " "391103875 -5- Item 22. - 8 HB -338- CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of - ` t!!� I On �'2 " �6 " Zd/?j before me, Date o� Here Insert Name and Title of the Officer personally appeared /V Q M • Name(s) of Signer(s) ROBIN ESTANISLAU COMMISSION # 2017380 o Z ^' Notary Public - California U ORANGE COUNTY v My Comm Expires Apr 1. 2017 who proved to me on the basis of satisfactory evidence to be the person(* whose name(s)-is/aye-subscribed to the within instrument and acknowledged to me that he/&heA" executed the same in his/weir authorized capacity(ies), and that by hisA4e#th& signature(* on the instrument the person(e}, or the entity upon behalf of which the person* acted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and /official seal. Signature Place Notary Seal Above Signature of Notary Public OPTIONAL Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: Document Date: Signer(s) Other Than Named Above: Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): — El Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHT THUMBPRINT OF SIGNERTop of thumb here _ f f- W v C/ -Number of Pages: .4_ Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing RIGHTTHUMBPRINT OF SIGNER 02007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotaryorg Item #5907 Reorder: Call Toll -Free 1-800-876-6827 CALIFORNIA ALL-PURPOSE ACKNOWLEDGMENT State of California County of I On " 1.6 - Ze before me, 0 6 r-7 s Date Here Insert Name and Title of the Officer personally appeared To Afn L_. �lc1r1r ROBIN ESTANISLAU COMMISSION # 2017380 0 2 Notary Public - California C ORANGE COUNTY My Comm ExpvesApr 1. 2017 who proved to me on the basis of satisfactory evidence to be the person(s) whose name(e) is/ -subscribed to the within instrument and acknowledged to me that he/she/the*executed the same in hWher/#teir-authorized capacity(io4,, and that by 1�49/her/U;let -signature(,} on the instrument the person(,*, or the entity upon behalf of which the person(stacted, executed the instrument. I certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. WITNESS my hand and official seal. Signature Place NotarySeal Above Si nature of Notary Public 9 rY OPTIONAL. Though the information below is not required by law, it may prove valuable to persons relying on the document and could prevent fraudulent removal and reattachment of this form to another document. Description of Attached Document Title or Type of Document: 0 Document Date: fP d Number of Pages: v� Signer(s) Other Than Named Above: D So �, PLC �•y �i Capacity(ies) Claimed by Signer(s) Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHTT1lIMnBPRINT OF'SIGNER Signer's Name: ❑ Individual ❑ Corporate Officer — Title(s): ❑ Partner — ❑ Limited ❑ General ❑ Attorney in Fact ❑ Trustee ❑ Guardian or Conservator ❑ Other: Signer Is Representing: RIGHTTHUMBP_RINT', OV t ER ;R Top of thumb - ©2007 National Notary Association • 9350 De Soto Ave., P.O. Box 2402 • Chatsworth, CA 91313-2402 • www.NationalNotaryorg Item #5907 Reorder: Call Toll -Free 1-800-876-6827 STATE OF FLORIDA COUNTY OF MIAMI-DADE The foregoing instrument was acknowledged before me this j0'day of December, 2013, by Shlomo Dachoh, as Seer tary of 21002 FIB, LLC, a Delaware limited liability company. He is (check one) M personally known to me or ] has produced as identification. FITNESS my hand and official seal in the county and state named above this & day of December, 2013. OF IRA _ -NOTARY PUBLICS State of Florida... __.. Print Name; Bonnic H. Hudson Commission No.: EL-180386 w Commission Expires: 4/16/2016 i STATE OF COLORADO ) ) 5S. COUNTY OF DOUGLAS Subscribed and sworn to before me, in my presence, by Harry G. Alcock, who is personally known to me and who executed the within instrument in his authorized capacity of Senior Vice President — Asset Management of UDR, Inc., a Maryland corporation, this 9th day of December, 2013. 1 certify under PENALTY OF PERJURY under the laws of the State of California that the foregoing paragraph is true and correct. Witness my hand and official seal. Leslie E. Green, Notary Public My commission expires April 20, 2016 `\\`�wliu iE � ; �oigR�•. 2 ••• AUB L% req '•••...... ... 41, rc o p���````