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HomeMy WebLinkAboutMAKALLON ATLANTA HUNTINGTON BEACH, LLC - 2007-08-06Council/Agency Meeting Held: DeferContinued to: A� pproved 0 Conditionally Approved ® Denied 4�2 ate_ Goa . City Clerk's Signat Council Meeting Date: 8/6/2007 Department ID Number: BD2007-4 CITY OF HUNTINGTON BEACH REQUEST FOR CITY COUNCIL ACTION SUBMITTED TO: HONORABLE MAYOR AND CITY OO.UNCIL MEMBERS SUBMITTED BY: PENELOPE LBRETH-G T, ADMINISTRATOR,., PREPARED BY: ROSS CRANMER, DIRECTOR OF BUILDING & SAFETY SUBJECT: APPROVE A REIMBURSEMENT AGREEMENT FOR SPECIAL INSPECTION SERVICES ON THE PACIFIC CITY PROJECT AND PROFESSIONAL SERVICE CONTRACT FOR THE SERVICES Statement of Issue, Funding Source, Recommended Action, Alternative Action(s), Analysis, Environmental Status, Attachments) Statement of Issue: Transmitted for the City Council's consideration is a Reimbursement Agreement between the City and Makallon Atlanta Huntington Beach, LLC and a professional service contract between the City and Scott Fazekas & Associates Inc. The reimbursement agreement will offset the cost of providing special inspection services for the Pacific City project. Funding Source: The proposed Agreement allows the developer to pay for special services by depositing funds totaling $360,000. Two payments of $180,000 each will be made on or before August 27, 2007 and July 1, 2008. Recommended Action: Motion to: 1. "Approve the Reimbursement Agreement as prepared by the City Attorney, between the City and Makallon Atlanta Huntington Beach, LLC and authorize the Mayor and City Clerk to execute the Agreement." 2. "Appropriate Three Hundred Sixty Thousand Dollars ($360,000) to the Building & Safety Department operating account number 10055201.69365 in connection with the Reimbursement Agreement between the City and Makallon Atlanta Huntington Beach, LLC." "7� � /ALL= • /a - �/6lD 7- 0 REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 8/6/2007 DEPARTMENT ID NUMBER: BD2007-4 3. "Authorize the acceptance of two payments of $180,000 on or before August 27, 2007 and July 1, 2008 from Makallon Atlanta Huntington Beach, LLC for special building inspection services." -&I 4. "Approve the contract for $360,000 for special inspection services and authorize the Mayor and City Clerk to execute the Professional Services Contract between the City of Huntington Beach and Scott Fazekas Associates, Inc." 5. "Authorize the Director of Building & Safety to expend $360,000 for Special Inspection Services for the Pacific City Project out of 10055201.69365." Alternative Action(s): The City Council may make the following alternative motion(s): 1. "Deny the Reimbursement Agreement and Professional Service contract." 2. "Continue the item and direct staff accordingly." Analysis: Makallon Atlanta Huntington Beach, LLC has begun construction of the Pacific City project. In order to help expedite the project, the developer has requested that the Building and Safety Department commit sufficient resources to provide special inspection services. The special services are to include a full-time Building Inspector assigned to the project for thirty months. In order to provide for the special services, it will be necessary for the City to hire a contract inspector. To pay for these services, the City and Makallon Atlanta Huntington Beach, LLC will enter into a Reimbursement Agreement in the amount of $360,000. The payments have been divided into two equal payments of $180,000, the first due on or before August 27, 2007 and the second payment by July 1, 2008. Scott Fazekas & Associates, Inc. currently provides contract inspectors to the City. Staff recommends the City Council approve the agreement with Scott Fazekas & Associates, Inc. for a not -to -exceed total contract amount of $360,000 and authorize the Mayor and City Clerk to execute the documents. Scott Fazekas & Associates, Inc. is well respected in the industry and continues to provide exceptional services for the City of Huntington Beach. Also, Scott Fazekas & Associates, Inc. works exclusively for government agencies avoiding any conflict of interest with private developers. If the Reimbursement Agreement and budget appropriation to the Building & Safety Department are not approved, the City will not be able to provide the proposed special services in order to meet the developer's construction schedule. -2- 7/23/2007 4:09 PM REQUEST FOR CITY COUNCIL ACTION MEETING DATE: 8/6/2007 DEPARTMENT ID NUMBER: BD2007-4 Strategic Plan Goal: Create an environment that promotes tourism to increase revenues to support community services and transform the city's economy into a destination economy. Environmental Status: Not applicable COUNCIL POLICY REGARDING REQUESTS FOR AN APPROPRIATION OF FUNDS: As adopted by the City Council in March 1998, all requests for appropriation of funds must meet one of the following criteria; 1) The request is for an unanticipated emergency, 2) The request is required to implement labor negotiations, or 3) The request will be offset by related new revenues. This request meets criteria number 3. The new appropriation being requested will be offset by related new revenues from the Reimbursement Agreement between the City and Makallon Atlanta Huntington Beach, LLC. Attachment(s): -3- 7/23/2007 4:09 PM ATTACHMENT 1 REIMBURSEMENT AGREEMENT BETWEEN THE CITY OF HUNTINGTON BEACH AND MAKALLON ATLANTA HUNTINGTON BEACH, LLC FOR COSTS INCURRED FOR SPECIAL INSPECTION SERVICES. THIS AGREEMENT ("Agreement") is made and entered into by and between the City of Huntington Beach, a municipal corporation of the State of California, hereinafter referred to as "CITY," and Makallon Atlanta Huntington Beach LLC, a Delaware limited liability company hereinafter referred to as "DEVELOPER." WHEREAS, DEVELOPER is developing an area within the City of Huntington Beach known as "Pacific City;" and DEVELOPER is required to submit to CITY for inspection approvals; and DEVELOPER is required to pay normal inspection fees, for which DEVELOPER shall receive normal building inspection services; and DEVELOPER desires to have CITY commit sufficient resources to enable the special delivery of inspection services; and Pursuant to California Government Code Section 87103.6, DEVELOPER is allowed to defray the cost of all development approvals by reimbursing CITY for such costs, NOW, THEREFORE, in consideration of the promises and agreements hereinafter made and exchanged, the parties agree as follows: 1. PAYMENT DEVELOPER agrees to reimburse CITY for its delivery of special inspection services in the total amount of Three Hundred Sixty Thousand Dollars ($360,000), which represents the estimated cost of such special inspection services, to be paid as follows: 07-1073/10810 1 DEVELOPER shall make two payments to CITY. The first payment shall be in the sum of One Hundred Eighty Thousand Dollars ($180,000) to be made on or before August 27, 2007. The second payment in the sum of One Hundred Eighty Thousand Dollars ($180,000) shall be made on or before July 1, 2008. These payments shall be allocated to the Department of Building & Safety for inspection services. DEVELOPER acknowledges that the amount referenced in this Agreement is the CITY's best estimate of the costs for the services described herein, and that the actual cost of said services may be higher. In the event that the actual cost of said services exceeds the estimated costs, DEVELOPER agrees to pay the actual cost within ten (10) days after receiving CITY's invoice for same. In the event the actual costs of Reimbursement Services are less than the estimated costs, CITY will refund the difference between the actual and estimated costs. A late payment fee of ten percent (10%) will be assessed if CITY receives any payment later than the thirtieth (30th) day after that payment is due but unpaid. In addition, one and one-half percent (I'/2) interest per month shall be added for each month the payment hereunder is due but unpaid. 2. STATEMENT OF WORK TO BE PERFORMED The amounts reimbursed to CITY pursuant to this Agreement will help defray CITY's cost of delivery of special inspection services requested by DEVELOPER. CITY agrees to provide special inspection services by the Department of Building & Safety inspectors, and to provide a full time on -site inspector for a continuous period of approximately thirty (30) months, to be mutually established by CITY and DEVELOPER based on the actual start date of building improvements and DEVELOPER's construction schedule. Full time shall mean forty (40) hours within a seven (7) day period. It is anticipated that the work day will consist of eight (8) hours between 7:00 a.m. and 6:00 p.m.; however this schedule may vary as the needs of the Project 07-1073/10810 2 dictate. The exact working hours will be at the discretion of CITY. Each full time inspector shall be qualified to provide multi -disciplinary inspection services as the Project dictates. In the event such inspector is not qualified to provide some of the services, CITY may in its sole discretion, provide an additional qualified inspector to assist the full time inspector in a timely manner on an "as needed" basis. 3. EXCLUSIVE CONTROL BY CITY CITY will maintain exclusive control over the work described herein. Nothing in this Agreement: A. Shall be deemed to require CITY to approve any work, plan, proposal, suggestion, application or request submitted by DEVELOPER. B. Shall be deemed to limit, in any respect whatsoever, CITY's sole authority to direct and control the inspector(s) assigned to DEVELOPER's various development proj ects. C. Shall be deemed to impose any liability on CITY different from any liability as may otherwise be established by law. 4. CITY EMPLOYEES AND OFFICIALS DEVELOPER shall employ no CITY official nor any regular CITY employee in the work performed pursuant to this Agreement. No officer or employee of CITY shall have any direct financial interest in this Agreement. 5. TERMINATION OF AGREEMENT Either party may terminate this Agreement at any time with or without cause, upon fifteen (15) days' prior written notice to the other party. DEVELOPER shall be responsible for all costs incurred prior to termination, including any and all costs incurred after notice of termination has been given. 07-1073/10810 3 6. TERM This Agreement shall be effective on the date of its approval by the City Council of CITY. This Agreement shall expire when terminated as provided herein. 7. NOTICES Any notices, certificates, or other communications hereunder shall be given either by personal delivery to DEVELOPER's agent or to CITY as the situation shall warrant, or by enclosing the same in a sealed envelope, postage prepaid, and depositing the same in the United States Postal Service, to the addresses specified below; provided that CITY and DEVELOPER, by notice given hereunder, may designate different addresses to which subsequent notices, certificates or other communications will be sent: TO CITY: City of Huntington Beach ATTN: Director of Building & Safety 2000 Main Street Huntington Beach, CA 92648 8. MODIFICATION TO DEVELOPER: Mr. Wayne Pettigrew Makallon Atlanta Huntington Beach, LLC 4100 MacArthur Boulevard Newport Beach, CA 92660 No waiver or modification of any language in this Agreement shall be valid unless in writing and duly executed by both parties. 9. SECTION HEADINGS The titles, captions, section, paragraph and subject headings, and descriptive phrases at the beginning of the various sections in this Agreement are merely descriptive and are included solely for convenience of reference only and are not representative of matters included or excluded from such provisions, and do not interpret, define, limit or describe, or construe the intent of the parties or affect the construction or interpretation of any provision of this Agreement. 07-1073/10810 4 10. INTERPRETATION OF THIS AGREEMENT The language of all parts of this Agreement shall in all cases be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. If any provision of this Agreement is held by an arbitrator or court of competent jurisdiction to be unenforceable, void, illegal or invalid, such holding shall not invalidate or affect the remaining covenants and provisions of this Agreement. No covenant or provision shall be deemed dependent upon any other unless so expressly provided here. As used in this Agreement, the masculine or neuter gender and singular or plural number shall be deemed to include the other whenever the context so indicates or requires. Nothing contained herein shall be construed so as to require the commission of any act contrary to law, and wherever there is any conflict between any provision contained herein and any present or future statute, law, ordinance or regulation contrary to which the parties have no right to contract, then the latter shall prevail, and the provision of this Agreement which is hereby affected shall be curtailed and limited only to the extent necessary to bring it within the requirements of the law. 11. DUPLICATE ORIGINAL The original of this Agreement and one or more copies hereto have been prepared and signed in counterparts as duplicate originals, each of which so executed shall, irrespective of the date of its execution and delivery, be deemed an original. Each duplicate original shall be deemed an original instrument as against any party who has signed it. 12. IMMIGRATION DEVELOPER shall be responsible for full compliance with the immigration and naturalization laws of the United States and shall, in particular, comply with the provisions of the United States Code regarding employment verification. 07-1073/10810 5 13. LEGAL SERVICES SUBCONTRACTING PROHIBITED DEVELOPER and CITY agree that CITY is not liable for payment of any subcontractor work involving legal services, and that such legal services are expressly outside the scope of services contemplated hereunder. DEVELOPER understands that pursuant to Huntington Beach City Charter Section 309, the City Attorney is the exclusive legal counsel for CITY; and CITY shall not be liable for payment of any legal services expenses incurred by DEVELOPER. 14. ATTORNEY'S FEES In the event suit is brought by either party to construe, interpret and/or enforce the terms and/or provisions of this Agreement or to secure the performance hereof, each party shall bear its own attorney's fees. 15. GOVERNING LAW This Agreement shall be governed and construed in accordance with the laws of the State of California. 16. SIGNATORIES Each undersigned represents and warrants that its signature hereinbelow has the power, authority and right to bind their respective parties to each of the terms of this Agreement, and shall indemnify CITY fully for any injuries or damages to CITY in the event that such authority or power is not, in fact, held by the signatory or is withdrawn. CONTINUED ON NEXT PAGE 07-1073/10810 6 17. ENTIRETY This Agreement, and the attached exhibits, contains the entire agreement between the parties respecting the subject matter of this Agreement and supersedes all prior understanding and agreements whether oral or in writing between the parties respecting the subject matter hereof. IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed by and through their authorized officers on August st 6. , 20 07 MAKALLON ATLANTA HUNTINGTON CITY OF HUNTINGTON BEACH, a BEACH, LLC, municipal corporation of the State of By_. print name ITS: (circle one) Chairman/PresidentNice President/ Member -Manager AND By: Douglas $. kid B.Y.P. Operatiou and Finance print name ITS: (circle one) Secretary/Chief Financial Officer/Asst. Secretary — Treasurer/ Manager -Manager California ayor C # " ) � (Vty Clerk INITIATED AND APPROVED: Director of Building & Safety REVIEWED AND APPROVED: City Administrator APPROVED AS TO FORM: / --7/6-7 Jt C i�%ttorneY 07-1073/10810 7 ATTACHMENT 2 CITY OF HUNTINGTON BEACH INTERDEPARTMENTAL COMMUNICATION FINANCE DEPARTMENT TO: PENELOPE CULBRETH-GRAFT, DPA, CITY ADMINISTRATOR FROM: DAN T. VILLELLA, CPA, FINANCE DIRECTOR SUBJECT: FIS 2006-07-18 Approve a Reimbursement Agreement with Makallon Atlanta Huntington Beach, LLC for Special Inspection Services in Conjunction with the Pacific City Project DATE: JUNE 22, 2007 As required by Resolution 4832, this Fiscal Impact Statement has been prepared for " Approve a Reimbursement Agreement with Makallon Atlanta Huntington Beach, LLC for Special Inspection Services in Conjunction with the Pacific City Project" If the City Council approves this action (total appropriation $360,000 of which $180,000 is offset by new revenue not anticipated in the original budget), the current balance in the Second Tier Reserve for the General be reduced to $6,119,000. Dan T. Villella Finance Director City of Huntington Beach 2000 Main Street • Huntington Beach, CA 92648 OFFICE OF THE CITY CLERK JOAN L. FLYNN CITY CLERK August 15, 2007 Makallon Atlanta Huntington Beach, LLC 4100 MacArthur Blvd. Newport Beach, CA 92660 Attn: Wayne Pettigrew Dear Mr. Pettigrew. - Enclosed for your records is a copy of the Reimbursement Agreement Between the City of Huntington Beach and Makallon Atlanta Huntington Beach, LLC for costs incurred for special inspection services for the Pacific City project. Sincerely, Joan L. Flynn City Clerk JF:pe Enclosure: Agreement G:followup:agrmtltr Sister Cities: Anjo, Japan • Waitakere, New Zealand 1 Telephon e: 714-536-5227)